Editorial | Original Article at pe.com
In a new review, California Controller Betty Y. Yee found Beaumont’s administrative and internal accounting controls contained “weaknesses” and “numerous deficiencies,” with 75 of 79 internal control elements being “inadequate.” Among other issues, the review identified failures to consistently engage in competitive bidding, keep receipts and invoices and properly account for bond transactions. The review “could not determine whether the bond proceeds were used for the intended purposes.”
The findings reinforce earlier audits since April, when investigators from the FBI and the Riverside County District Attorney’s Office raided City Hall, the residence of long-time City Manager Alan Kapanicas and the offices of Urban Logic Consultants.
In May, an accounting firm hired by the city reported Beaumont “does not prepare formal long term revenue, expense or cash flow projections,” part of a larger pattern of improper financial planning which allowed expenditures to exceed revenues. In July, an additional report was issued highlighting a “lack of city-wide policies and procedures for key finance activities” and a failure to “retain documentation that purchases are in compliance with municipal code and state law.”
“These kinds of deficiencies are of great concern, especially to the citizens of Beaumont, who rightly expect their city government to safeguard their tax dollars,” said Ms. Yee in a statement. “However, I am encouraged that city leaders now recognize the need to implement major improvements.”
This appears to be the case, with discussions about the city budget and finances being notable for their straightforwardness. The city has made several notable decisions, including severing ties with Mr. Kapanicas and cutting the city budget by $4 million to live within their means. Further, City Treasurer Nancy Carroll and Acting City Manager Elizabeth Gibbs-Urtiaga have made clear the need to review and restructure how the city does business.
City residents who care in the slightest about what their government is up to must keep a close eye on what goes on to ensure the right choices are made going forward.
Recovering from years of mismanagement and improper controls of taxpayer money will certainly take some time. Just as challenging will be restoring confidence in City Hall, which unfortunately allowed a dysfunctional way of doing things to become the norm. We applaud the city for making tough decisions and communicating honestly about the still dire situation it is in.