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DONE Audit Devastating; Hundreds of Thousands of Dollars Misspent |
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ALERT
Edited by Sara Epstein
 In what could prove to be a devastating blow to the Department, City Controller Wendy Greuel will make public today (Tuesday) her audit of the Department of Neighborhood Empowerment ‘s oversight of Neighborhood Council expenditures.
Senior DONE management and the Mayor’s office have been aware of the audit results for some days now and have been bracing for this day.
This from Greuel’s Media Advisory: “The Neighborhood Council system has grown dramatically since its inception nearly 10 years ago. The audit will show that, while engagement and activism have grown, there has been a systematic failure of accounting and fiscal oversight of the neighborhood councils by DONE.
Some of the audits findings included:
• Neighborhood Councils are required to submit quarterly expenditure reports; currently, DONE is behind in reviewing 364 of these statements. 24 NC’s are at least 4 quarters overdue for submitting statements.
• DONE has never conducted a proper accounting of Neighborhood Councils’ financial accounts. During recent budget deliberations, DONE discovered that there was a $5.6 million discrepancy between the amount of money they thought the Neighborhood Councils had and what was actually available. DONE was also unaware that it had an account open with $160,000 in it.
• DONE is simply not complying with the City’s policy to require NC’s to provide financial reports.
• Neighborhood Council’s have made $880,000 in purchases, for which they have not submitted proper paperwork. “
Obviously the report casts a long shadow over the entire system. With more than a quarter of LA’s certified councils at least a year behind in submitting statements and $880,000 having been spent without the support of proper paperwork, Neighborhood Councils will have to share in the blame for this accounting debacle.
The Department and the System is still reeling from the discovery of the embezzlement of hundreds of thousands of dollars by a half a dozen or so NCs.
Individuals from at least six Neighborhood Councils are currently being prosecuted by the LA District Attorney.
The audit will be made public at a press conference at City Hall … 1st Street Steps at 9:30 am on Tuesday, Jan 12. –cw
CityWatch
Vol 8 Issue 3
Pub: Jan 12, 2010
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