Audit Report on City's Finances Released

An independent audit report released Monday finds an 80 percent increase in overtime spending and purchases made without proper approval — whittling the reserve fund from $7.4 million in 2008 to $107,000 in 2011 — led the City of Long Beach into debt.

While former City Manager Charles Theofan defended his administration’s financial management and said the impact of the national recession is finally catching up to Long Beach, current City Manager Jack Schnirman said poor accounting practices by past administrations put Long Beach in its financial hole of $48 million in general obligation debt, according to News 12 Long Island. Schnirman said:

“The city has lived beyond its means for too long and business-as-usual has got to end.”

The auditor's report of the 2010-11 budget states, under the heading “Improper Budgetary Practices: Expenses & Revenues”: “Several key revenue sources were substantially overestimated compared to actual amounts earned.”

Under “Insufficient Accountability,” the report reads:

“Four separate bank accounts pertain to the City’s Police Department had reconciling items that were not investigated … the Finance Department was not provided with the bank reconciliations and other supporting documents to perform a proper review of these balances.”

Among the report’s top recommendations is that it is “essential that revenue budgetary estimates be prepared in such a manner that that they are in line with the current economic realities and recent trends.”

At Tuesday’s meeting, the City Council plans to revisit an item that was tabled at the Jan. 17 meeting, a resolution to declare a fiscal emergency. The meeting starts at 7 p.m. at City Hall.