San Benito supervisors ask state controller to audit auditor's office after $696,602 fraudulent ACH payment

SAN BENITO COUNTY, Calif. — The San Benito County Board of Supervisors voted 5-0 Oct. 21 to ask the California State Controller to open an independent review of the county auditor-controller’s office after a fraudulent automated clearinghouse payment of $696,602.02 was made Oct. 15 and routed to an account that has since been closed.

County Counsel Gregory Priamos opened the special meeting by outlining options for the board and recommending that the board seek a state controller audit under state law. Priamos cited the state-controller authority in his presentation and provided a timeline showing the transaction was initiated Oct. 15, alerted to county officials by the bank on Oct. 15, and described in an auditor email the following morning.

Why it matters: Supervisors said the incident — the second major loss involving county funds in two years — raises concerns about whether internal controls were followed countywide and whether prior fraudulent or erroneous transactions could have occurred undetected. The board approved a letter to the state controller asking for an immediate audit and investigation and instructed county staff to continue preparing parallel steps, including evaluating forensic accounting proposals already solicited by the county.

What happened: According to the timeline presented at the meeting and an email read into the record from Auditor-Controller Joe Paul Gonzalez, the county’s Resource Management Agency (RMA) submitted a vendor-change…