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An investigation into the embezzlement of as much as $500,000 from the San Benito County Library, which resulted in the arrest of two former library employees, started as just another day in the office for San Benito County Auditor-Controller Joe Paul Gonzalez and his staff.
“It is our job to verify every claim that comes into this office,” Gonzalez said. “We audit every transaction. We’re still small enough that we can do that. And that is how we discovered irregularities in the purchases made by the library.”
This kind of sharp-eyed work has earned Gonzalez, 67, the respect of his peers and led to his election in May as the first Latino president of the California State Association of County Auditors (CSACA). As part of his responsibilities, Gonzalez will work with California State Controller Malia M. Cohen on improving statewide county auditing practices.
San Benito County Clerk-Recorder Francisco Diaz, who had worked as assistant county clerk-recorder under Gonzalez for eight years, offered praise for his predecessor.
“In working with Joe Paul,” Diaz said, “I’ve learned the importance of professionalism and governmental and administrative processes. I know he will take this new responsibility to new heights and standards.”
Gonzalez was born and raised in Hollister and began his journey to his current position at Gavilan College, where he studied political economy. Transferring to UC Berkeley, he decided he wanted to get into accounting. Unable to switch to accounting as a major, Gonzalez switched schools instead.
“I moved over to California State University, East Bay,” he said. “I was working at a CPA firm in Oakland, and when I finished up my degree, I didn’t know if I would stay in the Bay Area or come back to Hollister.
Deciding to return home, he joined his family business, Gonzalez Market, and with his brother Fernando operated Superior Bakery, a liquor store and hardware store until 2001, when they sold all the businesses. This left Gonzalez looking for a new direction.
“I wanted to continue to work,” he said. “I talked to my predecessor here at the auditor’s office, John Hodges, and he gave me a job as basically a buck private here as an accountant.”
Though Gonzalez said accounting practices constantly change, he quickly adapted to the new job.
“Every year,” he said, “there are changes associated with how you report and interpret things. But I came from self-employment, and I was self-motivated. Once I started, I could see the holes that needed to be filled.”
Hodges began grooming Gonzalez as his successor, sending him to training programs to sharpen his skills. Gonzalez went from accountant manager to finance director and ran for county clerk-auditor-recorder when Hodges retired in 2006.
He held the office through four successive elections, often unopposed, until the 2022 election when, at his suggestion, the position was split, with him winning the first election for auditor-controller and Diaz running for the new position of clerk-recorder.
“The office had really grown in responsibility,” Gonzalez said, “especially the recorder’s office. And there was the responsibility associated with going from a polling-place model to a vote-center model. It just could not be done properly as one office.”
Honored for helping run the county’s business
Gonzalez’s office is responsible for creating a yearly comprehensive financial report that complies with governmental accounting standards. In addition to auditing financial transactions, making all the county’s payments and handling payroll, his office performs audits on the county treasurer, apportions property taxes to the proper agencies, including schools, and acts as a watchdog for the county’s finances.
The exacting standards that he has set for his staff were evident when his office won a certificate of achievement for excellence in financial reporting in the 2021-22 fiscal year from the Government Finance Officers Association, which consists of 20,000 federal, state and local finance officials dedicated to implementing best practices in the field.
According to the association, its award is intended to “showcase work that goes above and beyond in terms of overcoming challenges and developing innovative solutions.”
“Basically,” Gonzalez said, “they scrutinize our work and tear it apart to see if they could find anything wrong with it. To me, it shows that we’re doing things right in the county and making sure that taxpayers’ dollars are being spent the way they are supposed to be spent.”
This year, CSACA, which consists of chief accounting officers or financial directors of all 58 counties in California, selected Gonzalez as its president—the first Latino to hold that position.
“The goal of the organization,” Gonzalez said, “is to provide an educational forum for the improvement of our craft. The state controller’s office meets with us to discuss ongoing issues and how to resolve them.”
One of the biggest issues they are working on now is record retention: what records need to be preserved, which level of government needs to preserve them, and what form the preservation takes.
“It’s kind of bewildering,” Gonzalez said. “The secretary of state’s office is in charge of record retention for the county auditors when it is really the state controller’s office that has all the associated accounting knowledge.”
Gonzalez says one of the field’s challenges is a lack of financial literacy of some county departments, which he hopes CSACA will address.
“They should be aware of purchasing policy,” he said. “That’s a huge source of the illiteracy. Many departments are funded by federal dollars, which must be fully accounted for and spent according to the guidelines promulgated by the Office of Management.”
Violations of purchasing policy were key to the library fraud discovered by Gonzalez’s office.
“It was a matter of claims coming in that were not in conformance with our procedures,” he said. “There were irregular payments associated with the library’s purchases, which we presented to the Sheriff’s Department.”
Gonzalez said the subsequent FBI investigation confirmed his office’s findings and could not find any discrepancies that his office had not already identified.
“The FBI expanded on our work,” he said, “There were really no differences found, but there is always a desire to have a second pair of eyes look at these things.”
Through CSACA, Gonzalez is also involved in creating what he called a “tiger team”—roving county auditors dedicated to ensuring best practices within the state.
“It will be a group of very sharp and experienced auditors,” he said. “They will be going to counties where a brand new auditor has been elected and explain their role, what they should be looking for and what their mindset should be.”
Gonzalez said it was an honor and privilege to be voted in as president and recognized in this manner.
“You know,” he said, “when you compare a little San Benito County to Los Angeles County, we’re not even the size of their smaller cities. The principles of the job are the same. We are the watchdog for the taxpayers, and we take that role pretty seriously.”
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