Missing Assets

According to the June 30,2015 Comprehensive Annual Financial Report (the main public financial and operational report all cities are required to publish) the citizens of Highland have purchased $276,268,348 in capital assets, e.g. roads, bridges, cars, equipment, trucks, etc. since the city was started in 1987.  This amount represents about 80% of everything the city owns! The problem is the city has no list of these capital assets so there is no way to know if this is true, i.e. to know if the assets actually exist, to know if the assets have been subsequently stolen, or to know if the assets are being maintained. The city could be fraudulently hiding amounts claiming money spent is a capital assets but in reality the money spent is fraudulent.  What is even more troubling is that accounting regulations REQUIRE that such a list exist, but the accounting firm the city hired to audit its financials still said the financials are accurate.  This an impossible statement to make and a complaint with the states accounting regulatory board has been filed.  They are currently investigating.

Here is the page showing the amount of capital assets purchased since 1987:

What this shows is that citizens have purchased $98,120,219 in assets not being depreciated which are infrastructure assets, roads, bridges, sewer systems, etc. and $178,148,129 in assets that are being depreciated, e.g. trucks, buildings, equipment etc.  Depreciation is spreading the cost of the asset over the live of the asset.  For example, if a car is purchased for $40,000 and is expected to last 8 years, the annual cost of that car is $5,000.  Certain assets, i.e. infrastructure assets, are not required to be depreciated under accounting regulations if they are maintained at a objectively verifiable functional levels. For example, roads must be maintained in order they are usable but generally the roads will always exists.

Here is the balance sheet showing that capital assets represent 80% of everything the city owns:

Here is the complaint acknowledgement:

When we asked Chuck Dantuono, City Treasurer, for a list of the capital assets that agree to the 6/30/2014 Comprehensive Annual Financial Report we will given this document: AssetList which has no totals and this report prepared by a consultant: ConsultantReport.  Chuck makes about $196K per year and has been at the city since the early 1990s.  At best this is complete incompetence, e.g. no list of capital assets, hiring consultants, clean audit reports, etc,  and Chuck needs to be fired. Or there is fraud going on and everybody needs to be brought to justice.  

Betty Hughes, City Clerk and wife of city manager Joe Hughes, thought if we would just meet with Chuck, everything could be cleared up:

Mr. Adomitis:

The information has been forwarded to you.  I would encourage you to meet with Chuck so he can explain how it ties into the Financials.  The public records request does not require us to create a document only produce records.  In order to explain it via email instead of meeting, we would need to create a document. 

Please contact me to set up a meeting.

Betty Hughes, MMC
City Clerk
City of Highland
27215 Base Line
Highland, CA 92346
909.864.6861, ext. 226 | 909.862.3180 fax

This is from her November 5, 2015 email.  We didn't meet since there is no legitimate excuse for not having a list of assets purchased with tax payer money.