10/21/2013 by Cheryl Getuiza

126 local governments called out by state controller for not filing financial books


(photo credit: Blake Burkhart) Several local governments neglected to file their financial dealings. 

We learn from our mistakes—that’s how we grow and in the end, succeed, right? 

Well you’d think after the 2010 corruption scandal that rocked the working-class city of Bell, about 7 miles southeast of downtown Los Angeles, California local governments would bend over backwards to ensure their decisions and financial dealings were as transparent as possible. That is one national spotlight other cities would clearly rather go without seeing. 

It wasn’t much better earlier this year as the city of Stockton declared bankruptcy, the most populous in the nation to do so until the Motor City went belly-up.

Apparently some lessons are only learned the hard way as Bell and Stockton both showed up on a less-than-illustrious list recently.

Last week, California State Controller John Chiang sent letters to 126 local governments calling them out for failure to file their financial and accounting books, which is required under State law.

“Transparency in financial reporting-including public salaries-is necessary to protect communities against misuse of taxpayer dollars and other abuses of public interest,” said Controller Chiang.

Nine cities and 117 special districts failed to comply. In his letters, the Controller said that “repeated failures to file may indicate serious internal control problems at the local level.”

“Proactively disclosing local government finances is important to creating transparency and empowering oversight surrounding the money that comes into and flows out of these bodies,” said Alisha Green, Policy Associate at the Sunlight Foundation.

“Providing this information allows the public to better understand how their dollars are being put to work. Without the ability to access and analyze these reports, the flow of money and its impacts may be left in the dark,” Green said.

Recently, the Controller conducted several audits which uncovered serious problems with local governments’ internal controls. The letters urged each city and special district to submit their reports by the end of the year or they too will be subject to an audit.

“My office’s audits of Bell, Stockton and other fiscally-distressed public agencies have highlighted how weak accounting and reporting practices deny local leaders the opportunity to fix problems before they deteriorate into crisis and scandal,” said Chiang.

“The lack of transparency provides a breeding ground for unchecked spending, corruption and fiscal mismanagement.”

Governor Jerry Brown recently signed AB 1248, which calls for the Controller’s Office to work with local governments to develop statewide internal control guidelines.

All of these measures are put in place because no one wants to see any city, any county, or any special district fail. There have already been too many to list-- Bell, Stockton, Vallejo, San Bernardino.

As any parent would say, “we’re doing this for your own good,” so listen up!

Categories: Budget Reform, Transparency

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