The Santa Cruz County Board of Supervisors, the Sonoita-Elgin Fire District (SEFD) and the Sonoita School District have issued public statements following press reports regarding the size and potential impact of the financial irregularities in the County Treasurer’s Office involving former Treasurer Liz Gutfahr that are currently under investigation.

Following are the three statements in full:

1. June 7, 2024 press release from Santa Cruz County Board of Supervisors:

June 7, 2024

The Board of Supervisors recently held two Executive Sessions on May 16 and May 21, 2024, both regarding the ongoing investigation concerning former Treasurer Elizabeth Gutfahr and the Treasurer’s Office.

Today, the Board of Supervisors issued the following joint statement:

“Santa Cruz County remains committed to transparency and supporting the ongoing investigations regarding the former County Treasurer and County Treasurer’s Office. In the spirit of candor, we are able to share the following information without compromising the ongoing work being done to investigate the financial irregularities. In April, our financial institution notified the County of eleven irregular transactions, each transaction for $375,000. The County immediately took action to secure all accounts controlled by the Treasurer and the Treasurer’s Office and notified the proper authorities and agencies of the irregularities.

In addition, the County is conducting a comprehensive internal review with the assistance of experienced outside legal and forensic accounting professionals, including a full forensic financial investigation of the accounts controlled by the County Treasurer.

The County is also continuing to fully cooperate and assist with separate investigations being conducted by the United States Department of Justice and Federal Bureau of Investigation as well as the Arizona Auditor General’s Office. Likewise, the County is cooperating and assisting with an investigation being led by the newly appointed County Treasurer, Alejandro Paz, and the Deputy County Manager, Mauricio Chavez, with the assistance of the Santa Cruz County Attorney’s Office, which is focused on locating and reviewing all financial documents associated with the County Treasurer’s Office.

Additionally, the Board of Supervisors has contracted with Booth Management to examine current County and Treasurer policies and procedures and recommend changes to strengthen oversight regarding all activities by the County Treasurer’s Office moving forward.

At the direction of the Santa Cruz County Board of Supervisors, the Treasurer and County Management met with entities that are statutorily required to bank with the Treasurer.  Those entities include school districts, fire districts, provisional colleges, and the County. They were informed of the changes being put into place to protect funds, and that the operations of the Treasurer’s Office will continue to function as normal.

The Board of Supervisors is doing everything in its power to safeguard the County’s financial future, assist in bringing to light any potential wrongdoing, and will take action accordingly.”

2. June 6, 2024 public statement from SEFD Chief Marc Meredith:

06 June 2024

Follow Up statement to the Santa Cruz County Treasurer Issue

I was quoted in the Patagonia Regional Times this week regarding the situation created by the former Santa Cruz County Treasurer and I want to reiterate both the next actions SEFD will be taking as well as clarify some important process points.

As requested by the County and as part of good practice, we are working with our financial services firm to review what our stated tax levy revenue was for each of the last ten years and compare that to what we actually received. We will be reporting our findings to our Fire District Board and to the County. We hope to have that information available by the June 24th Board meeting.

SEFD, like all other special districts receives is annual tax levy information from the County treasurer’s office after the County assessor determines the value of each property in the district boundary and what our stated tax rate is for the next fiscal year. That results in a total amount of revenue that should be collected by the County and then disbursed to our district. This is the information we will be seeking to confirm during our review.

As is required by statute, SEFD maintains a balanced budget and reconciles its books on a monthly basis. We do not anticipate this to impact our budgeting process for FY24-25 and expect to approve a balanced budget at our June 24th meeting. The public is welcome to attend.

I welcome any questions from our community on this matter.

Fire Chief Marc D. Meredith

3. June 6, 2024 public statement from Sonoita School District Superintendent Mary Faley:

June 6, 2024

In April of this year, news outlets reported that Liz Gutfahr had resigned from her position as the Santa Cruz County Treasurer, as the FBI was investigating possible fraud in the treasurer’s office. At the request of County Superintendent Velasquez, Sonoita Elementary School District Business Manager, Heidi Gonzales, and I met with County Officials for an update on the situation.

At the meeting we were told that, to date, investigators had uncovered fraudulent transactions totaling over 4 million dollars. We were advised to review our financial records for the past twelve years and to report any discrepancies or concerns. We were also told that in addition to the FBI, the County Treasurers Office is being audited by the Arizona Auditor General and that a Forensic Audit is being conducted. Finally, we were assured that the loss of funds would not impact the day-to-day operations of the district, such as payroll.

As a school district in Arizona, all of our funds are on deposit with the County Treasurer. Our Business Manager reconciles our accounts monthly, with the County Superintendent’s Office and the County Treasurer’s Office. As a school district, our financial records are also audited annually by an independent auditing firm, which is reported to the Arizona Auditor General. We have a system of checks and balances within the district, which requires that financial transactions be approved by more than one employee. While we are confident that our financial records are accurate, we will be reviewing our records from previous years, as requested.

As concerning as the situation is, unfortunately there are still far more questions than answers. We will be monitoring the situation closely, and will keep you apprised of any impact on the District.

Thank you,

Mary U. Faley