The first of three audits detailing Bell’s mismanaged finances was released by the State Controller John Chiang on Wednesday. Based on the investigation’s findings, the scandal-plagued city had an inappropriate payroll, illegally raised taxes, mismanaged bond funds and entered into questionable contracts and land purchases. Furthermore, the city had a complete lack of internal controls. Specifically, Bell Chief Administrative Officer (CAO) Robert Rizzo had complete control and often used his position for his own personal gain. In a statement to the press, Chiang said, “Our audit found the city had almost no accounting controls – no checks or balances – and the General Fund was run like a petty cash drawer. The city’s purse-strings were tied to only one individual, resulting in a perfect breeding ground for fraudulent, wasteful spending.” Chiang also sent a letter to the city of Bell and interim City Administrator, Pedro Carrillo, which can be read here. Highlights include:
“There is no evidence of any oversight by members of the Bell City Council, most of whom received additional compensation and/or loans as a result of actions authorized by the CAO. Under this environment, the potential for waste, fraud, abuse, and misappropriation of public funds is extremely high. […] The Bell City Council approved exorbitant salary and benefits for the former CAO without any accountability for performance. The former CAO continued this process by allowing enormous salaries for other chief administrative staff. More than $93,000 in city funds was used to repay the former CAO’s personal loans, apparently without any authorization or justification of public benefit, which constitutes a gift of public funds.”
Reportedly the city also mismanaged its 2003 voter-approved Measure A bond funds. Forthcoming audit details include one on the city’s handling of state and federal funds (to be released by the end of October), and an audit of the financial reports prepared by the outside accounting firm (to be released in early November). You can view the complete audit report here.