Lassen County auditor-controller announces retirement amid years-long audit backlog and software rollout troubles

Nancy Cardenas, Lassen County Treasurer-Tax Collector and Auditor-Controller, announced her retirement effective Oct. 31, 2025, and delivered a lengthy update on long-running audit problems and a troubled financial software rollout that she said have left the county “behind” on its audits.

Cardenas read from the civil grand jury’s report and the county’s external audit findings, saying, “The office of the Lassen County Auditor Controller has experienced a series of setbacks,” and detailed consequences the audits flagged, including payroll errors, late IRS and CalPERS payments and unresolved findings from prior years. She told the board the county faces significant federal reporting work, saying the external audits have identified material weaknesses in accounting for federal grants and in closeout procedures that resulted in misstatements totaling into the hundreds of thousands and millions in some categories.

The auditor described problems tied to the county’s transition to Tyler (Munis) software. She said some modules were not implemented or connected properly and that personnel and IT were not coordinated during the vendor selection and implementation. ‘‘Once this is done, then the auditor’s office can move forward with electronic time cards,’’ Cardenas said, adding that HR and payroll work is a necessary fraud-protection and workflow step the county has yet to complete.

Cardenas outlined specific financial consequences from prior errors: she cited a 2022 penalty notice related to 1095 health forms that showed a potential bill of $277,716.59 and said the county has been working with the IRS to upload missing forms and seek waiver of penalties. She also described other audit findings that identified understated and overstated federal-aid schedules and SEFA reconciliation errors.

School Superintendent Patricia Gunderson, invited to speak about the schools’ relationship to the treasurer’s office, told the board the county treasurer holds roughly $90 million in school funds and said timely appointments to the treasurer/auditor role are critical to payroll and vendor distribution continuity. ‘‘It takes us 30 days to update our system so that checks can be processed,’’ she told supervisors, urging a prompt appointment process.

Board members thanked Cardenas for her work and several urged the board to consider internal succession options and to follow the grand jury’s recommendations: developing written succession plans, mandatory continuing education for staff who handle grants and creating a compliance auditor role. Cardenas said she has been training two assistants to maintain operations and urged the board to give departments the resources and training necessary to fix recurring audit problems.

The board did not take a formal vote on appointments at this meeting; supervisors and members of the public urged the board to move swiftly to ensure continuity for payroll and banking signatories and to preserve access to county funds during the transition.

The auditor said she hopes to bring the county’s outside auditors to present the current draft audit to the board in September and asked for cooperation across departments to provide requested documentation. The board directed staff to continue working on audit cleanup and to consider the grand jury’s staffing and training recommendations going forward.