What had once been considered a possible case of fraud at the City of Turlock was chalked up to misinformation on Tuesday night.

Turlock City Manager Roy Wasden announced Tuesday that a controversial transfer of dollars into the city’s self-funded health insurance account — believed to have occurred without the council’s permission — had, in fact, been approved by the City Council on three separate occasions.

Councilman Ted Howze issued a public apology at Tuesday night’s meeting for his editorial that accused City of Turlock finance staff of engaging in “fraudulent accounting” by transferring funds without council approval.

“I’m a big boy,” Howze said. “I’m going to offer an apology to the finance staff. It’s the right thing to do.”

In the editorial, “The truth behind the city’s ‘found’ money,” which ran in the May 22 issue of the Turlock Journal, Howze pointed out a “pattern of corruption” in the City of Turlock which allowed $6 million to go missing. That money was located in overfunded city self-insurance accounts by the budget subcommittee two weeks ago.

The subcommittee also learned at that time that funds had been transferred from an overfunded State Unemployment Insurance account into a struggling health insurance account and a workman’s compensation account — without council approval. Council had believed the health insurance account was “healthy” and in need of no additional funding.

“Council’s negotiators were directing the cover-up of the funds while receiving the benefits as employees,” Howze wrote in the editorial. “… If a Fortune 500 company hid its sinking employee health fund from its board of directors and shareholders by redirecting dollars it claimed to have spent on research & development to the health fund, somebody would go to jail. In Turlock, some believe it’s just the way things always have and always will continue to be done.”

Tuesday’s new information showed that council did approve those fund transfers on three separate occasions. Twice the matter came before the council as an agenda item, and once it was included in an annual budget.

Until the new information came forward, Howze said he was fully under the disturbing impression that funds had been misused.

“The facts have changed and I’m glad that we dug those facts up,” Howze said. “… You have my sincerest apologies.”

To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.