Grand Jury: StanCOG's Top Three Employees Cashed Out $595,000 in Unapproved Vacation Pay

The Stanislaus County Civil Grand Jury released a report on June 10, 2026 titled "Riding Into the Sunset on Unapproved Cash: Misuse of Vacation Policy at the Stanislaus Council of Governments" (case number 26-22GJ), examining how the regional planning agency's top three employees converted years of unused vacation time into hundreds of thousands of dollars in cash payments.

StanCOG — the Stanislaus Council of Governments — was formed in 1971 by a Joint Powers Agreement among local governments and manages road and mass transit projects that cross city limits in Stanislaus County, including the North County Corridor Project realigning State Route 108 to connect Modesto, Riverbank, Oakdale, and adjacent unincorporated areas. Its largest task, according to the report, is distributing about $40 million annually in Measure L sales tax funds to the county's cities, the county, and local transit systems. StanCOG is overseen by a 16-member Policy Board that includes all five Stanislaus County supervisors, mayors or city council members from each of the county's nine incorporated cities, a representative of the Stanislaus Regional Transit Authority, and a non-voting representative from the California Department of Transportation.

Three Weeks a Year of Vacation, Eight Days Taken

The report's central finding is that from January 1, 2021 through September 17, 2025, the agency's three most senior positions — the Executive Director, the Director of Administrative Services, and a Deputy Executive Director of Planning — recorded only 8.4 combined days of vacation use over the nearly five-year span, an average of about 0.6 vacation days per year each. Over that same period, according to the report, taxpayers paid an extra $595,241.65 in compensation costs that would not have been paid had those employees simply taken their vacation as intended, a figure the report states was provided to the Grand Jury by StanCOG itself.

The agency's Employee Policy and Procedure Handbook, adopted by the Policy Board in 2018, mirrored Stanislaus County's own schedule under which regular full-time and management employees received five weeks of vacation beginning at 21 years of service. Article 3 of that handbook states plainly, in a passage the report quotes directly: "No employee will receive pay in lieu of vacation except on termination of his or her employment as described in Section 3.2.11 or pursuant to Sections 3.2.6, 3.2.7, or 3.2.8." Those referenced sections cover only rare exceptions tied to unusual workload demands, according to the report.

A Change the Public Never Saw

On November 3, 2021, the Policy Board's Executive Committee received a staff report from the Manager of Administrative Services recommending an amendment to the handbook, which the full Policy Board approved on November 17, 2021. The staff report described the change only in general terms — as reflecting "changes in employment laws, and revisions to policies and procedures" reviewed by legal counsel — but the report found that the specific substance of the amendment was never included in the online meeting packet distributed with the board's agenda. The revised handbook actually reduced the service-year threshold for five weeks of annual vacation from 21 years to just 12 years. The Grand Jury found three instances in which the online agenda packet lacked the specifics of a vacation-related policy change and included only a vague, general description in the board agenda itself, and found no evidence that the Policy Board knew the specifics of what it was approving on either November 17, 2021 or a subsequent September 17, 2025 vote.

The report describes a further, larger change that bypassed the Policy Board entirely: starting in 2023, without any board approval, employees with 12 or more years of service began accruing seven weeks — 280 hours — of annual vacation, up from five weeks. By the final year of employment in 2025, the report found, the Executive Director was accruing 8.8 weeks of vacation annually. It was not until September 17, 2025 that the Policy Board passed a resolution to stop the unapproved accrual and reaffirm the policy it had approved back in November 2021.

"Vacation policy used as a cash machine instead of its intended benefit"

Reserves Depleted, Headquarters at Risk

In a public meeting on March 4, 2026, according to the report, StanCOG leadership reported that paying out accrued vacation to departing employees had depleted the agency's reserves so thoroughly that StanCOG may have to sell the headquarters building it purchased the previous year. The report also notes that building up such reserves is difficult because StanCOG's funding sources come with rules the agency must follow.

The Grand Jury further found that calculating the cashed-out hours was complicated by inconsistent StanCOG timekeeping records: one payroll report would show certain hours as "used," while another shows it as "cash out." Some hours appear in one report and not in others, and the report found cash-outs were also retroactively logged more than a year later.

Oversight Gaps Beyond Vacation Pay

The report also found that StanCOG had failed to meet a separate obligation under its Joint Powers Agreement: the three most recent JPA amendments, in 2016, 2017, and 2018, required that a fidelity bond be posted by the Executive Director, but the Grand Jury's interviews determined StanCOG had no record of such a bond — only a crime insurance policy, whose existence StanCOG staff located only after what the report describes as "our persistent effort." The report states this has never been raised in the annual external audit required by the federal government.

In April 2026, StanCOG brought proposed changes to its Employee Policy and Procedure Handbook to the Policy Board to address the vacation policy, including capping accrued vacation hours at 500, down from 800, and requiring non-management employees to use at least one week of vacation before receiving any cash conversion of unused time.

Recommendations and Response

The Grand Jury's central finding is that "StanCOG executives and the Policy Board did not fulfill their signed agreement to ensure that the work of StanCOG is implemented in the most efficient and cost-effective manner possible." Its recommendations direct the Policy Board to implement, by September 30, 2026, a documented approval process for all leave and vacation entries in which items entered into the payroll system are approved by someone other than the employee who entered them, and to include in the Executive Director's annual evaluation the degree to which employees use their allotted vacation and whether cash-in-lieu payments are treated as a true exception and documented in personnel files.

StanCOG's official response to the report states that the agency would initiate an independent investigation into the allegations and pursue recouping any funds determined to have been used inappropriately, saying that "the recommendations of the independent investigation will be considered/evaluated and implemented in a manner deemed prudent by the Policy Board." The report states the results of that investigation are unknown at this time.

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Dismal Freedom Press covers regional planning and transportation agencies, joint powers authorities, and county civil grand jury findings across San Joaquin, Stanislaus, and Merced counties as part of its Investigations desk.

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