Maverick County Auditor clarifies 2013 County Audit Status at press conference
By: Jose G. Landa, Copyright 2014, Eagle Pass Business Journal, Inc.
Maverick County Auditor Fidencio Ortiz held a press conference on Friday, December 19, 2014, to clarify allegations raised at the Maverick County Commissioners Court meeting of December 9, 2014 against his County Auditor’s Office by Commissioners Court and Independent Auditor, Milo Martinez of Martinez Rosario & Company LLP of San Antonio, Texas. County Auditor Ortiz was joined by his staff at the press conference.
During the meeting held on December 19, 2014 certain statements were made by Commissioners Court, and independent auditor Milo Martinez blaming Ortiz’s office for a late audit and for the potential loss of over $ 800,000 in Texas Department of Agriculture funding due to the unfinished audit and the lack of not amending its previous 2011-2012 Audit as requested by the state agency.
“I am giving this press conference first and foremost to excuse myself and apologize to the taxpayers for not being present at the December 16, 2014 Maverick County Commissioners Court meeting due to health issues and a Doctor’s appointment I had scheduled out of town since six months ago,” said Ortiz.
“This appointment was very important to my health and I consulted with my Doctor and he advised me that I needed to assist if not I was not going to be able to see him until six months later and that would not be a wise choice because of health reasons,” said Ortiz.
“It is understood that I have the responsibility to attend regular Commissioners Court meetings but I want to state that the meeting of December 16, 2014 was a special meeting and it was put together a week prior to the meeting,” said Ortiz.
We are also here to inform the community on the status of the 2012-2013 Maverick County Audit.
Ortiz acknowledged that originally they were on a time set schedule for completing the 2013 audit as stated by Milo Martinez at the meeting held on December 9, 2014, but that the schedule was not followed due to the lack of a signed contract between Maverick County and Martinez Rosario & Company LLC for work on the 2012-2013 audit due to the high cost proposed by Rosario Martinez & Company LLC.
Ortiz noted that Maverick County Legal Counsel, Poncho Nevarez, was requested to negotiate the terms and conditions on the contract with the Independent Auditor, Rosario Martinez & Company LLC.
“They came to an agreement to pay $152,000 for their services on the 2012-2013 Maverick County Audit. Maverick County Judge David R. Saucedo then signed the contract on August 6, 2014. No Maverick County office can commit to anything with any company until authorized by the Maverick County Commissioners Court unless it is an emergency,” said Ortiz.
“We as auditors know the procedures established by the Court and we respect them and adhere to them. If we had begun to work with Martinez Rosario & Company LLP, without having a contract in place and Commissioners Court would have decided to hire another company, how were we going to pay for the services already rendered to us by Martinez Rosario & Company LLC? That is why we had to wait for a contract to be established and signed,” said Ortiz.
Ortiz explained that due to previous experiences and issues regarding misplaced documents during other audits, the County Auditor and Martinez had agreed to set up a Dropbox for safe delivery and safe-guarding of all documents pertaining to the 2012-2013 audit.
“This was done so to have better control and to avoid occurrences of previous years where documents were misplaced or they would say that they were never received by them,” said Ortiz.
Ortiz noted that the instructions for the Dropbox were sent to the County Auditor’s office by Martinez until September 2, 2014 , almost 30 days after the contract had been signed. “Information was then begun to be sent on September 3, 2014″ to the drop box,” said Ortiz.
Ortiz noted that as of December 19th, auditors from Martinez Rosario & Company LLC continue to request for documentation that is already in the Dropbox established but according to them cannot be found. “This is a clear indication that they have not taken the time to review all the information that is now in the assigned Dropbox,” said Ortiz.
Ortiz noted that auditors from Martinez Rosario & Company LLC arrived at the Maverick County Auditor’s office on November 17, 2014 but that they were there to do some work on the 2012 Maverick County Solid Waste Authority (MCSWA) Audit, also known as the Maverick County Landfill.
Ortiz further stated that Martinez Rosario & Company LLP did not begin to review and ask for county documents until December 15, 2014 and that at that time three persons assigned at his office were busy with producing documents for the MCSWA Audit.
“ The landfill’s audit was held back because Milo Martinez had not come to an agreement with the MCSWA Board of Directors on a payment. A draft of the 2012 Landfill audit has just been handed over to the MCSWA on December 16, 2014. It’s obvious that Milo Martinez was not going to work if he was not going to get paid. This is contrary to what he stated at the Maverick County Commissioners Court meeting on Tuesday December 9, 2014. Where he stated that lack of payment was not a reason to detain his work from being done.”
Ortiz noted that the MCSWA and Martinez had agreed to pay Martinez an additional $15,000 for his Landfill audit and awarding his company other future audits.
“He wanted another $25,000 from the MCSWA Authority when he finished the 2011-2012 audit. He did not want to turn over his report if he was not paid. The MCSWA Board of Directors told their attorney that they would not be paying that amount and for him to negotiate a lesser amount. They then agreed to pay $15,000 more and that Martinez had agreed to that amount with the condition that the MCSWA give him a contract for future audits including the 2012, 2013, and 2014 MCSWA audits,” said Ortiz.
Ortiz noted that the MCSWA had agreed to pay these additional fees in order to obtain their audit and save almost $10,000 in fees being requested by Martinez.
The MCSWA Board of Directors approved the engagement letters for the audit of financial statements for the years ended September 30, 2012, 2013, and 2014 with the Independent Auditing firm of Martinez , Rosario Company LLC at their regular meeting on Thursday, July 17, 2014.
Ortiz also noted that Martinez has had a problem with turnover among his auditing personnel and have had a great amount of rotation of employees. “This is the fourth year he works with the County and he has had over 10 auditors come in and out. The three auditors that we are assigned right now are educated but have very little time working for Milo and are not organized or familiar with the County books when they arrived to our offices,” said Ortiz.
“I am not a political person and I will not lend myself to the games that Commissioners Court has decided to play. I have nothing personal against them or against Mr. Milo Martinez. Today, I have decided to inform the citizens of the real reasons as to why the 2012-2013 audit has been detained to avoid this issue from escalating even further. What is and will be said of me as a person is compromised as we perform our job honestly as we follow the law,” said Ortiz.
Ortiz noted that the County Auditor’s office is not there to make friends. “Our job is to maintain the County’s records and books in a good state and enforce that the decisions by County Commissioners Court in regards to purchases and projects are adhered to according to the law. It is what we have done and continue to do so as I am here and until otherwise,” said Ortiz.
“It is true that we do have things to correct. But we cannot correct ten years of errors in two years. Every day we advance on correcting those issues but you fix five things and another ten things pop up. It is unfortunate and it is not up to me to select county personnel. After so many personal attacks on me and my office we remain attentive and have always helped out every department and office without any exception and we will continue to do so as necessary,” said Ortiz.
After reading his prepared statement, Ortiz opened up the press conference to questions from the press.
The first question from the press asked if the $152,000 Audit fee by Martinez was within the standard auditing fees charged by the industry for counties of the size and type like Maverick County. “We have spoken to various accountants and they have stated that for a County of this type and size you are speaking of an average fee between $50,000 and $65,000,” answered Ortiz.
The second question was how much was negotiated or paid for the 2012-2013 County audit? “He wanted more than $150,000 but they agreed to $152,000. In previous years, they had paid up to $160,000. It has all been above $100,000,” answered Ortiz.
The third question was do you believe that $152,000 is a high price? “He says that he has to charge that amount due to the existing conditions in the County in regards to what has occurred and the County corruption arrests and schemes,” answered Ortiz.
The next question asked about the issue of Maverick County having to de-obligate over $800,000 in a Texas Department of Agriculture (TDA) grant funds because certain amendments and adjustments were not done to the 2011-2012 County audit and the 2012-2013 County audit not being completed yet by Martinez. “The state and the federal governments had already told them and they want all the reports nine months after the end of a fiscal year. Since 2007 until 2012 those reports have been late all the time. The state has told them you all have been sending those reports late,” answered Ortiz.
“That is one of the things that they told them. Before Martinez Rosario & Company LLC began to work with the county, the previous auditing firm used to do all those reports and they used to have qualifications on their audits but they would give an opinion on the audits. Milo Martinez then came in and said no, I can’t do that. The other company before them gave an opinion on the audits of 2005, 2006, 2007, 2008 and 2009. Martinez came in and said no, all that is wrong,” said Ortiz.
The next question was how long did County Commissioner Roberto Ruiz serve as County Treasurer before being appointed County Commissioner. “He was County Treasurer from November 2012 to March 2013. Five months,” answered Ortiz.
Ortiz noted that he had recently written a report to both District Judges, Amado Abascal and Cynthia Muniz, and to Commissioners Court with certain information, including the fact that Roberto Ruiz failed to turn in his state-law required monthly County Treasurer’s reports during his five months tenure as County Treasurer.
A follow up question asked if Ruiz had never presented a treasurer’s report in the time he served as Maverick County Treasurer? “No. Not one report,” answered Ortiz.
Another follow-up question asked If the lack of monthly reports by the County Treasurer during those five months contributed to the problem of not being able to complete an audit? “Directly no, but within everything needed yes,” answered Ortiz.
Another question asked what was the County Auditor’s role in requesting that County Commissioners Court change the firm of Martinez Rosario & Company LLC. as independent auditor for future audits. What are your thoughts and response to those allegations?
Maverick County Assistant Auditor Karla Mazuka intervened and stated that in a meeting with County Judge David R. Saucedo that it was her and not Ortiz who had recommended for the firm of Martinez Rosario & Company LLP. be replaced. “The reason is because in all forms we had to start new and he had new personnel. Mr. Ortiz insisted that Martinez Rosario & Company LLP stay on board because we wanted to avoid having the completion of the audit from being further delayed,” said Mazuka.
“We then had a meeting with Legal Counsel Nevarez and County Judge Saucedo in regards to this very issue and at that time I did tell them why don’t we start asking for another firm to do our audits and Judge Saucedo agreed because he had already stated that he wanted to change due to the high cost being charged. He stated yes why not, do it. A Request for Proposals was then set up and was sent to Commissioners Court and it was then tabled and taken away from any action,” said Mazuka. This item was presented during the October 30, 2014 meeting but was taken off from any discussion or action at that time.
Another question asked about the Federal Bureau of Investigation (FBI) investigation of corruption, bribery, and bid-rigging scheme in Maverick County during 2009-2012. When did the FBI begin to come to the County Auditor’s office to request county documents for their investigation? “They did not begin to come to our office until after Mr. Ortiz had taken the position as County Auditor,” answered Mazuka.
A follow-up question asked if there are still information and documents from the County Auditor’s office regarding the FBI investigation that has not yet been returned and do you have access to that information? “I can’t say anything in regards to that. They told us not to say anything and that is that,” answered Ortiz.
Based on Ortiz’s answer, it appears that the FBI investigation is ongoing.
Another question asked how much is Maverick County presently in debt for? “They have paid off debt because it is programed in. The Jail, Public Facility Corporation debt is at almost $38,000,000. In total, the debt is at $ 65,000,000. Up to now the debt in 2013 was at $69,000,000 and it is now at $65,000,000. It is programmed that they will pay of a certain amount as we go along,” answered Ortiz. Ortiz noted that Maverick County has reduced the debt by $4 Million, from $69 Million to $65 Million.
