On Wednesday, June 30, the South Orange County Wastewater Authority (SOCWA) welcomed the opportunity to review its financials with the State of California. The following are the facts:
What Others are Saying about SOCWA and State Review:
“I think that this can vindicate SOCWA clearly and ensure that Moulton Niguel owes this rather large sum of back payment [to SOCWA].” – Senator Pat Bates (Joint Legislative Audit Committee Hearing, 6/28/17; 58:06)
“This is a great opportunity to highlight the good things [SOCWA] is doing.” – Assembly Member Blanca Rubio (Joint Legislative Audit Committee Hearing, 6/28/17; 53:36)
What SOCWA is Saying about the State Review:
- SOCWA embraces the review: SOCWA’s financials are strong and transparent, according to independent audits. We agree with members of the State Legislature who said this was a great opportunity to demonstrate the fiscal strength of the organization. We also agree that practices in place prior to 2014 needed improvement, which is why new management was hired and we commenced implementing new financial practices.
- The review was triggered by one member of SOCWA: Moulton Niguel Water District triggered the audit. Other SOCWA members, while embracing the opportunity, believe it is not a good use of taxpayer funds and distracts from SOCWA’s core mission.
- The State audit will cost taxpayers hundreds of thousands of dollars: While SOCWA embraces the opportunity to demonstrate strong financials, the audit will cost California taxpayers at least $268,000 and 2,200 hours of state employee time per the State Auditor. These are on top of SOCWA’s costs. These are resources taken away from our core mission: protecting the environment and creating recycled water. Still, SOCWA fully intends to work with the State.
- Among SOCWA’s largest financial risks is non-payment from its members: SOCWA relies solely on member contractual payments to meet its obligations. MNWD owes SOCWA approximately $927,000 dating back more than a year. This is currently our largest financial hurdle, as we cannot simply raise revenue to carry out our mission.
- SOCWA is working collaboratively with the State to ensure this can be done quickly, comprehensively and as cost-effectively as possible.