Stephen Ellison

Central California Water District's Misspending ‘Shocking'

Agency gave employees free housing, interest-free loans and credit cards without accounting for those expenses, audit shows

An irrigation district in Central California's prime farming region gave its employees free housing, interest-free loans and credit cards that the workers used to buy tickets for concerts and professional sports games, possibly breaking the law, state officials said Tuesday.

Employees at Panoche Water District based in Firebaugh used the credit cards to buy season tickets to Raiders and Oakland A's games and attend a Katy Perry concert, officials said.

The state Attorney General's office will next decide whether to file criminal charges, and auditors will also consider sending the case to state and federal tax authorities, said a spokeswoman for California State Controller Betty Yee.

The district gave $86,000 in interest-free loans to its employees over two years _ one planning to settle his $30,000 debt with $50 payments on a schedule that would take more than 23 years to fulfill, officials said.

Accounting practices were so lax that it is likely the district paid for some personal purchases that employees also made to Ralph Lauren, Nike and Sunglass Hut, according to Yee.

"The district's egregious lack of spending oversight is shocking," Yee said in a statement. "It is especially troubling in a region where effective water governance is so vital for the agricultural community."

The Panoche Water District delivers irrigation water to 62 farms on 38,000 acres in Merced and Fresno counties along Interstate 5 in one of the nation's most productive regions.

Auditors also found that since 1992 the district's general manager has lived in a home paid for by the district, which wasn't reported in his payroll taxes.

The district made a fleet of 50 vehicles available to employees and administrators to drive home each day, state officials said.

Yee says the district lacked written policies, ignored administrative procedures and potentially broke state law. She is considering next what action to take to hold officials at Panoche and other small water districts like accountable.

Officials at Panoche have documented corrective actions they are taking or plan to take in response to the review, state officials said.

Officials launched the routine audit because Panoche has received nearly $6 million in loans from the state, Yee spokeswoman Taryn Kinney said.

Panoche officials didn't immediately respond to a request for comment by The Associated Press.

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