City of Beaumont Under Investigation for Financial and Reporting Discrepancies

By City News Service

Three weeks after federal and local investigators raided offices at Beaumont City Hall, the state Controller’s Office announced Tuesday it will be conducting an investigation into the city’s financial and reporting practices.

State Controller Betty Yee said there are “significant discrepancies” between the city’s financial reports to her office and its audited financial statements.

“Beaumont residents and businesses need to be assured that their tax dollars are being used properly,” Yee said.

According to Yee, the total expenditures reported by the city to the controller’s office for 2012-13 were $50 million less than its audited financial statements. The city also failed to include capital assets in its activists and thus failed to record depreciation expenses. Discrepancies were also found in total revenues, transit fares and cash and investment funds.

Reports from an independent auditor also found deficits in some funds over the past two fiscal years, according to Yee. The reports also found that the city may not be able to cover its deficits without making cuts or raising more revenue, and also found that the city has no funds to pay a $43 million legal settlement.

Last month, investigators from the FBI and District Attorney’s Office carried out raids at City Hall, seizing boxes full of documents, computers and other items. Warrants were also served at the home of the city manager and at the offices of Urban Logic Consultants Group, which has provided contract employees to the city.

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