Further investigation ahead for Sanitation District? - KSBY.com | San Luis Obispo and Santa Barbara Area News

Further investigation ahead for Sanitation District?

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A report claiming mismanagement of the South San Luis Obispo County Sanitation District will now be forwarded to law enforcement to determine if criminal charges should be filed.

The Board of Directors reviewed the audit completed by Knudsen and Associates alleging questionable management practices by former District Administrator John Wallace.

Wallace was the administrator of the district for 27 years. The nearly 125 page report was reviewed at Wednesday night’s meeting in Arroyo Grande.

Among the concerns laid out by the auditors; skyrocketing expenses, bookkeeping issues, and contracting out district work to Wallace's own company -- the Wallace Group.

After reviewing the audit and listening to public comment, the Board voted unanimously to send the report into law enforcement for possible criminal charges.

The Board also agreed to adopt a series of recommendations presented by auditors including: hiring a human resources staffer, contracting outside legal counsel, creating new policies preventing document removal, and setting guidelines for conflict of interest issues.

"The board really felt there were some past practices that have occurred that put the district in a very precarious situation," said John Shoals, Board Chair. "We felt adopting those recommendations, many of which we've accomplished already, will help us to move forward and put this district on solid footing."

John Wallace did not attend the meeting, but a Wallace Group representative Chris Gardner spoke on his behalf. He asked the board for a continuance on the discussion, so he could review the extensive audit and refute the claims.

The Board decided to hear the report, but said it would listen to Wallace's response during public comment at its next meeting.

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