Though they identified six "weaknesses," auditors with the California Department of Food and Agriculture stated they were able to account for all revenue generated by a voter-approved sales tax to keep the Del Norte County Fairgrounds open.

The department's audit investigated how the Del Norte County Fair spent Measure F dollars after resident Linda Sutter accused the board of misplacing roughly $920,000 from the seven-year quarter-cent sales tax increase voters approved in 2014.

Last year Sutter ran against incumbents Doug Wakefield, Steven Westbrook and Sabina Renner for a seat on the Del Norte County Fairgrounds, Recreation and Parks Special District, prompting the district to take part in the November 2018 general election.

At a meeting Monday of the 41st District Agricultural Association board, fairgrounds CEO Kim Floyd said both the special district board and the state-appointed board felt it was in the community's best interest to have Sutter's charge independently investigated. The fairgrounds' annual audit by its independent certified public accountant found no missing funds, Floyd said. Nor did an examination by District 1 Supervisor Roger Gitlin, Floyd said.

Floyd read aloud from the California Department of Food and Agriculture's performance audit, which traced Measure F dollars passed from the 41st District Agricultural Association to the special district since the tax went into effect in 2015. The department's performance audit also included an investigation of the 41st District Agricultural Association's 2017 and 2018 expenditures for signs of irregular payments and to ensure the association complied with state laws, regulations and policies.

"'Our office was able to fully account for all Measure F funds without exception,'" Floyd said, reading from the audit. "All taxpayer money is accounted for."

Measure F has generated about $2,493,000 in revenue for the Del Norte County Fairgrounds between the tax's inception in 2015 through the end of 2018, according to the audit.

The California Department of Food and Agriculture did identify six areas of weakness, according to Floyd. These include better mileage tracking, improved accounting procedures for paid leave and the need to inventory property every three years. The auditors also wanted the special district to receive a financial report from the 41st District Agricultural Association every quarter, however Floyd said the association provided the report every month.

"The fair staff has made all the changes requested and submitted these changes to the state," she said. "The state found all six issues adequately addressed."

Floyd said the fairgrounds paid $20,000 for the state audit. That expense came from the Del Norte County Fairgrounds Recreation and Parks Special District and is Measure F money, she said. The district spent about $5,000 to $6,000 in legal fees, Floyd said.

Sutter's decision to run against the three special district incumbents forced the district to spend $7,820 on election-related expenses, Floyd said.

"There was probably four months worth of allocated time directly to handling (public-records act requests) for this," she said. "I spoke to (California Department of Food and Agriculture) Secretary Ross and she wanted to know all of us fair board CEOs what our biggest frustration was and what we're looking forward to. I was very candid with her and I said I wear my heart on my sleeve because I'm very passionate about our fair. This is my job and I believe in our community and it's frustrating when I have to take four months out of my time that I was assigned to do great things for our community, youth projects for our fair, and I had to take it to protect us and protect our boards and to protect our fair and they didn't find anything. We were all legit."

In a Facebook post to the page, Del Norte Journal on Tuesday, Sutter stated there were 11 weaknesses included in the audit, not the six that Floyd "wanted me to read."

Sutter noted that one of the weaknesses the audit referred to was a "lack of compliance with the terms of a memorandum of understanding" between the 41st District Agricultural Association and the special district. According to the audit that MOU was entered into in 2016 and stated that the 41st District would provide a quarterly financial report and request to the special district for funding assistance.

The special district would determine whether it would provide that assistance to the 41st District Agriculture Association within 30 days.

"Our office requested copies of any 41st DAA quarterly reports and Special District financial assistance determinations and conditions; however, none were provided," the audit reads. "Manager A stated the process to provide financial assistance to the 41st DAA by the Special District had evolved and the Special District wanted to allocate financial assistance in one large amount and allow the 41st DAA to determine the best operating uses for the funding."

According to the audit, in January 2018 the special district provided $250,000 to the 41st District Agriculture Association instead of considering assistance on a quarterly basis.

"By not following the terms and conditions listed within the MOU, the 41st DAA exposes itself to loss and inefficiencies," the audit reads.

In her Facebook post, Sutter states Floyd asked the Special District for $91,400 for bills and the district's director, Doug Wakefield decided to write a check for $100,000.

"This is continuous conduct of the special district who not only violates the MOU, but also fails to recognize $100,000 was not placed on the agenda and Kim Floyd never disclosed what the bills were," Sutter states.

Sutter also cited the other six findings, including a lack of compliance involving "certain expenditure transactions. The audit refers to $1,289 in state funds used for alcohol purchases in 2017 and 2018 as well as lodging rates paid that were above the allowable amounts for staying in Sacramento. According to the audit, the daily lodging rates the 41st District Agricultural Association paid ranged from $149 to $197 per night. The California Code of Regulations allows state employees $95 per night when staying in Sacramento.

The audit also states that the 41st District Agricultural Association did not have written procedures over the use of credit cards.

Other weaknesses include a lack of compliance regarding state vehicles usage and a failure to maintain travel logs for state vehicles driven off property. The audit also found that the 41st District Agriculture Association did conduct an inventory of its physical assets or equipment deemed a high risk of theft or loss.

"As soon as I can get an original copy from the state I will report more," Sutter states. "Had the 41st DAA and the Special district knew how to properly conduct government business they would not have been reprimanded to the point where intervention by the state was needed. There was much misuse of public money. The state will not go after them criminally, but it doesn't change the fact that the 41st DAA and Special District (committed) gross misconduct, dereliction of duty and misuse of trusted public money."

In a Facebook message to the Triplicate, Sutter said the audit noted that Measure F funding was intended to “backfill operating losses, rather than fund specific projects.”

“In essence, it was me that brought much-needed improvement and change to a corrupt 41st DAA and Special District,” Sutter told the Triplicate. “None of this would have gone as far as it did had these boards been fundamentally transparent.”

Though they praised Floyd's handling of the situation, the 41st District Agricultural Association board expressed frustration with Sutter's allegations. Director John Pritchett noted that the fair's auditor and the "most conservative member of the Board of Supervisors" both looked at the fairgrounds' records and found nothing, but the accusation continued.

"It was decided to put this to bed once and for all and this allegation, this claim, has been utterly debunked," Pritchett said, thanking Floyd for addressing the situation in a professional manner. "In an ideal world, the person who made this accusation would do three things: They would apologize to the Del Norte Recreation and Parks board and the Del Norte fair board; they would apologize to the current and previous CEOs following these accusations of malfeasance; and third, the person who made these accusations would repay the taxpayers of Del Norte County."

To read the California Department of Food and Agriculture's performance audit of the Del Norte County Fair, visit