The State Controller’s Office will conduct an audit of West Covina’s finances, Controller John Chiang recently announced. The investigation comes at the behest of the West Covina City Council, which requested the audit in June after numerous concerns expressed by residents.
“There is reason to believe that the city’s ability to provide reliable and accurate information relating to required financial reports is questionable,” Chiang said in a notification to City Manager Chris Chung. In particular, Chiang cited over $30 million in “extraordinary losses” related to loans between the city and its former redevelopment agency.
The investigation will focus on fiscal years 2011-2012 and 2012-2013, taking a look at the large drop in reserves, hefty legal fees, and the potential misuse of redevelopment bonds. A similar probe in the City of Cudahy found that $22.7 million in redevelopment funds had been misused.
Since West Covina requested the audit, it will cover the bill. Separate audits into city spending of the Special Gas Tax Street Improvement Fund and a Traffic Congestion Review Fund will be paid for by the State Controller’s Office.
“I think what it does is settle some questions that people have and then we can move on from there once we see what the controller said happened,” said City Council Member Mike Spence, who led the charge for the audit request. “I’m glad they’re going to be here. The public can have their answers and they can be confident that we’re moving forward,” he added, noting that the state’s involvement “takes the whole politics of the council out of it.”
Former mayor and California State Assembly Member Roger Hernandez has also called for an audit, citing exorbitant litigation fees recently paid by the city. While West Covina’s city manager says he expects to find no discrepancies, he echoed Spence’s sentiments, saying a transparent investigation would be in the best interest of the city.
Read more about the impending audit here.