The criminal case against Chamise Cubbison, the former auditor-controller, and Paula Kennedy, the payroll manager, appeared to reach a turning point at a hearing on Monday after the defense highlighted a "pay type" report that was viewed by half a dozen people and contained the questionable 470 payments made to Kennedy over three years to compensate her for overtime.
The hearing continues today.
Both Cubbison and Kennedy have been charged with criminal misappropriation of funds. The statute typically covers cases in which someone takes funds that they are entrusted with for a specific purpose an uses them for another purpose. Examples include:
- A company treasurer who divers funds from the employee retirement fund to pay personal debts.
- A nonprofit director uses donated funds to pay for personal vacations instead of organizational programs.
- A financial advisor misuses client investment funds for unauthorized purposes.
The case against Cubbison and Kennedy is unusual in that the payroll funds in question are intended to compensate employees for hours worked. There is no displute that Kennedy worked the hours that were paid to her using the 470 pay type.
The problem with Kennedy's use of the 470 pay type appears to have been that she was an exempt employee who was not entitled to overtime. Unlike other exempt employees of the county who were paid using the 470 pay type, there was not a memorandum of understanding (MOU) on file that would have authorized these payments.
At the same time, prior testimony in the case has not turned up documentation around how to use the 470 code.
Judge Ann Moorman appeared troubled by Monday's testimony that the payments to Paula Kennedy were made in the open and, at least in theory, reviewed by multiple people. Monday's witnesses included Darcie Antle, CEO of Mendocino County, and Tony Rakes, the deputy CEO.
Moorman said she was going to have to go back and review prior witness testimony, including the testimony of Lloyd Weer, the former auditor, who spoke about the payments to Kennedy on penalty of perjury. Weer has denied directly authorizing Kennedy to use the pay type.
"Willful ignorance will not be tolerated by the court," Moorman said.
