To: Board of Supervisors
From: Monica Nino, County Administrator
Report Title: Status of Assessor Compliance with County Audit
Recommendation: Recommendation of the County Administrator
RECOMMENDATIONS:
RECEIVE a report from the County Administrator on the status of the current audit of Contra Costa County’s financial statements for the fiscal year ending June 30, 2026, and the Assessor’s response to the audit, and receive any response by the Assessor.
APPROVE and AUTHORIZE the issuance of one or more subpoenas to the Assessor and other Assessor’s Office employees to provide testimony and produce documents that are necessary for Contra Costa County to complete the current audit of the County’s financial statements for the fiscal year ending June 30, 2026.
FISCAL IMPACT:
The delay of the Assessor not providing the requested information has the potential of delaying the Countywide annual financial statements for June 30, 2026.
BACKGROUND:
The County is required under Government Code section 25253 to prepare financial statements that provide information about operations cash flows, assets, and liabilities that account for the County’s management and use of funds. Government Code section 25250 requires these financial statements to be audited and authorizes the Board of Supervisors to contract with an independent certified public accountant or licensed public accountant to audit the financial statements in accordance with generally accepted auditing standards.
The current audit of Contra Costa County’s financial statements for the fiscal year ending June 30, 2026 is being conducted by Macias Gini & O’Connell LLP (“MGO”) pursuant to a contract approved and authorized by the Board of Supervisors. Under a contract amendment approved by the Board, the audit includes “additional consideration of certain property tax administration activities and related processes that may be relevant to the County’s financial reporting and audit objectives.” Specifically, the audit includes, among other things, a review of the accuracy and timeliness of property valuations and valuation changes for fiscal years 2021-2022 through 2025-2026.
To perform its audit of property tax administration activities and processes, MGO has selected samples from the annual assessments and corrections provided by the Assessor’s Office. MGO requires supporting documentation to ascertain the accuracy, completeness, and timeliness of the annual assessments and corrections data. Examples of the supporting documentation required by MGO include, but are not limited to, the following:
• Documented detailed process flows, including approval steps and authority as well as system access controls
• Written procedures related to conducting the assessments, including standards around timeliness
• Documentation to demonstrate how Assessor’s Office staff conducted their assessments and the supporting documentation for staff valuations and conclusions. Examples include:
§ Roll close reconciliation work papers and affidavits
§ Post-transmission change logs
§ All documentation pertaining to roll changes, like escape assessments, calamity reassessment, penalty assessments with preparer and approver(s)
§ Supplemental event log with event date, enrollment date, and transmittal date, reports summarizing year-end aging of unenrolled events for monitoring timeliness; reconciliation of transmitted supplemental totals to the log and the cost allocation computation.
§ Property details like square footage, year built.
§ Deeds/transfers/change in ownership statement forms, Clerk-Recorder’s intake log and backlog, population of transfer and excluded transfers with reviewer, sample work files with claim forms, and penalty and cancellation listings
§ Permit applications for property additions/improvements
§ Exemption documentation, including exemption master listing, welfare certificates and other supporting documents, late claim listings, evidence of review and application/termination of exemptions, and approver(s)
§ Relevant communications to and from property owners, like supplemental assessment notices, informal appeals (informal review requests).
§ Appeals log with values at issue, year-end exposure estimate, aging appeals and waivers, and stipulation listing with approver(s)
§ Proposition 8: Intake logs, system audit trail of all value changes within scope year, management reviews of exception reports and aging reports
§ Assessor’s Office working papers and files like cover sheets with approval signatures
MGO also has determined it is necessary to interview certain employees in the Assessor’s Office, including appraisers.
MGO has requested that the Assessor provide all of the documents listed above, and to make certain employees available for interviews. To date, the Assessor has not produced all documents and records requested by MGO, including the documents listed above, and has not allowed the MGO audit team individual interviews with certain Assessor’s Office staff.
The audit of property tax administration activities and processes, as part of the audit of the County’s financial statements, is authorized by Government Code section 25303. This statute authorizes the Board of Supervisors “to supervise the official conduct of all county officers,” and authorizes the Board, when necessary, to require a County officer to “make reports and present their books and accounts for inspection.” Revenue and Taxation Code section 408(b)(2) requires the Assessor to disclose information and permit access to all records in the Assessor’s Office to the Board of Supervisors or their duly authorized agents, employees, or representatives, when conducting an investigation of the Assessor’s Office pursuant to Government Code section 25303.
Because the Assessor has not produced all documents and records requested by MGO, including the documents listed above, and has not allowed the MGO audit team individual interviews with certain Assessor’s Office staff, it is necessary to compel the Assessor to provide testimony and produce documents that are necessary for Contra Costa County to complete the current audit of the County’s financial statements for the fiscal year ending June 30, 2026. Government Code section 25170 authorizes the Chair of the Board, on behalf of the Board of Supervisors, to issue subpoenas directing County officers and other persons to appear to answer questions and produce records “relating to the affairs or interests of the county.” Subpoenas issued by the Board Chair are served by the Sheriff. If the recipient of a subpoena refuses to comply with the subpoena, the noncompliance may be reported to a Superior Court judge. Upon receiving the report, the judge may issue an order directing the Sheriff to bring the subpoena recipient to court, or may take other action. The end date for completing the audit of the County’s financial statements under the contract is the end of December 2026.
CONSEQUENCE OF NEGATIVE ACTION:
MGO will be unable to fulfill their contracted services.