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Beaumont Audit IV: Falsifying Employee Benefits

City of Beaumont padded $92,000 to Employee Benefits.

Government Employee Benefits have been the center of our budget and economic talks - blaming the line workers for our State's financial problems. This is a lie. The City of Beaumont audit clearly shows that government officials are falsifying employee expenses.

In various departments in the General Ledger I found three (3) reoccurring posts:

Transaction # 208734 - Financial - 05/04/12 – 'Health & Fitness Reimbursement'

Transaction # 215049 – Financial - 07/27/12 - 'Health & Fitness Reimbursement'

Transaction # 222921 – Financial - 10/25/12 - 'Health & Fitness Reimbursement'

This is to reimburse the city employees for gym membership. Regular reimbursement transactions range from $100.00 – $250.00, fall under 'Purchasing', and have the employees' name in the memo, but with the above transactions there is no employee memo and the amounts are heavily skewed. The Street Maintenance Department has the following Health & Fitness Reimbursement transactions:

194764 – Purchasing – 11/04/11 - $178.98 - Employee's Name

208734 – Financial – 05/04/12 - $4,411.66

215049 - Financial – 07/27/12 - $337.00

222921 - Financial – 10/25/12 - $690.10

Street Maintenance used only $178.98 of their reimbursement, but the City has added over $5,000 more. The padding of the Health & Fitness account for the three dates listed totals $92,084.04. The City also padded the Education Reimbursement and other accounts. On 06/15/12 they took payroll deductions twice – on Transactions # 211306 and 211307.

There is no reasoning or excuses – This is State and Federal Fraud and Embezzling.

I attempted to match the amounts Payroll Dates on Check Warrant to Payroll Deductions on the Bank Statements, but there is no match. Council ratified Pay Period 04/26/12 for $550,744.37 and Pay Period 05/10/12 for $481,586.89 – but the Bank shows payroll on 04/16/12 for $427,416.05; and on 05/03/12 for $532,878.83; and on 05/17/12 for $452.001.97. Council is either ratifying the Check Warrants for the wrong dates and amounts or there is another payroll account.

Another disturbing transaction is # 214406 – 07/26/12 – 'Worker's Comp'. This transaction is attached to 15 different departments and totals $ 458,654.00. The Bank Statements do not show a check issued or an electronic debit transaction.

It has been suggested that the “MG Trust' automatic debits are 'Mello Roos', but I've found that the 'MG Trust' ACH Debits are claimed on the Check Warrants as 'Mutual of Omaha' and the dates are incorrect. For example: the 05/15/12 Check Warrant lists four (4) transactions with dates 03/29/12 and 04/12/12, but the Bank Statement shows the transactions occurred on 04/25 and 04/26/12. There are no Mutual of Omaha transactions on the General Ledger.

Another transaction of concern: # 207206 – 06/30/11, but plugged in April, 2012. I have not tracked these transactions fully, but I have noticed three (3) for $9,778,347.78, $4,492,567.72, and $10,473,775.60.

 

 

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Jack Smith January 04, 2013 at 12:41 AM
What the h*&& is going on with Beaumont City spending? Is there no one in charge? Is everyone on the take? Come on City Manager, do tell us why so much of our hard earned tax dollars are being wasted and hidden from us to boot. We are not rich. We pay our mello roos, our special assessments, out regular 1% property tax. We in turn expect honesty on the part of our elected and appointed government employees. We do not appreciate getting screwed by those whom we should trust. Please do not make us another mini-Bell city.
Libi Uremovic January 04, 2013 at 02:03 AM
the photo is hard to see...the city printed out the general ledger in 4 point print, but the charges are as follows: dept 2050 - police 05/04/12 - $20,532.02 07/27/12 - $5,98..57 10/25 - $7,676.87 dept 2090 - support svcs 05/04 - $4,414.97 07/27 - $1,823.03 10/25 - $,2360.91 dept 2150 - not listed on budget 05/04 - $2,224.03 07/27 - $1,172.95 10/25 - $2,262.00 dept 3250 - street maintenance 05/04 - $4,411.66 07/27 - $337.00 10/25 - $690.10
Hopeful January 04, 2013 at 05:29 AM
So when does all of this info go to the proper authorities for review?
Libi Uremovic January 04, 2013 at 06:52 AM
state controller's office has gotten the data as i found it... now that the holidays are over it's going to grand jury, d.a., and f.b.i. because playing with medicare and f.i.c.a. is a federal felony...
Hopeful January 04, 2013 at 07:23 AM
Thank you. Good to know. I look forward to hearing the outcome.
Sarah Valdivia January 04, 2013 at 06:20 PM
ohhh damn...I see some names on their that disturb me and now I know why they have what they have???/ dirty.....
James Hampton January 05, 2013 at 02:08 AM
If a certain amount of benefits are allotted each year, but only a certain amount is claimed/used, doesn't that still mean that the allotment still must be made in full just in case? Or are you talking about something different?
Libi Uremovic January 05, 2013 at 02:36 AM
the benefit amounts are being plugged in as if the city is reimbursing an employee, benefits like health & fitness and education are only applicable if the employee chooses to utilize them.....they are offered as an incentive for the employee to better themselves....the procedure is for the employee to turn in the receipts and the city issues a reimbursement check..... all of the normal journal entries are small amounts with the employee's name in the memo... the city is not reimbursing the employee - they are diverting the money for uses that have nothing to do with payroll.... one of the reasons the entries stood out is because they are much higher than normal and have no employee name in the memo....but the other reason is that the entries are all plugged in at the same time....the 05/04, 07/27, & 10/25 entries sit together.... the human can insert any random date, but the computer still records the journal entry in the order it was received..... ...that's how i noticed the multimillion dollar plugs dated 06/30/11... all of the other journal entries on the page were for april.... all of the 10/25/12 journal entries were found after 11/01/12 journal entries....
Libi Uremovic January 05, 2013 at 02:57 PM
here's an example: on 10/25/12 the city ran payroll with 132 total journal entries for salaries, benefits, & taxes taken from various departments.....7 different 'cash' journal entries totaling $464,095.85 are recorded.... at the 12/04/12 meeting council ratified $436,645.67 for payroll date 10/25/12... the bank says there was no payroll cut on 10/25/12 - payroll ran on 10/18/12... the bank statement shows the city makes only 3 different deposits each pay period - for payroll, garnishments, and taxes....yet the city makes anywhere from 4 - 7 cash journal entries whenever they cut payroll....
margaret bragg January 05, 2013 at 05:53 PM
Libi, from your own observations, just ballpark, how widespread is this kind of fraud? Multiply by the size of California, multiply by all 50 states, it makes one weak at the knees to think how much money this represents. We'd need to build more prisons just to house these jerks.
S.C.Moore January 05, 2013 at 06:16 PM
When there is no lid on the "cookie jar"---people will take the cookies!!! This is true in Banning, Beaumont, and many other towns---where there is little accountability. When will we, the taxpayers, take back our towns????? A mad taxpayer
Libi Uremovic January 05, 2013 at 07:13 PM
it's rampant throughout the state, but beaumont might win the prize for the most corrupt... and this is the basis of our economic problems on a state and federal level... in some countries corrupt government officials are executed because it's considered treason...
margaret bragg January 05, 2013 at 11:48 PM
Treason, eh? I don't think convicting them of treason is the worst idea I ever heard. It IS sabotaging our governments, and it would cost the taxpayer even more to warehouse them in some white collar prison... Hmmm, I like it. Treason it is.
Libi Uremovic January 06, 2013 at 12:05 AM
look at it on a federal level margaret - ike paid off the federal debt after wwii because at the time everyone understood that a country in debt is a country at risk.... ...in 1969 we were a debt-free country... in the last 40 years our elected and appointed officials have given foreign enemy countries better business deals than they have given their own country ... a few months ago the wall street journal reported that china was 'quietly selling off u.s. assets'... people hear the word treason and they think of cold war spy stories...but selling out our country economically is far worse than any random snippet of information...
Libi Uremovic January 07, 2013 at 02:06 AM
the position of city clerk is vital key to our system of checks and balances - the city clerk is the responsible for verifying the money and documentation of the finance director and city manager... this position usually pays about $127,000/yr and has their own staff because of the volume and importance of their work...the city of beaumont's city clerk makes $34.40 every two (2) weeks...no staff... let's review: we have a system that requires 2 signatures and a 3rd person who's duty is to verify the accuracy of the information.... but the person to check has been eliminated...which is why the system is out of balance...
Ken January 07, 2013 at 07:52 PM
look to the Deputy City Clerk...she is there 40 hrs a week
margaret bragg January 07, 2013 at 08:36 PM
Libi, I just wanted to thank you for the visual you gave me yesterday. When I think of some of the faces that would be lined up for the gallows under treason charges, it keeps me feeling all warm and fuzzy inside. It would give all new meaning to "reality TV".
Libi Uremovic January 08, 2013 at 12:58 PM
the paperwork from the city is signed by shelby hanvey - not the city clerk - which is the point of procedure in this state and country ....

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