Calexico and City of Industry Woefully Lacking in Fiscal Oversight, Controller Finds.

Calexico and the City of Industry have a troubling lack of internal oversight and controls over tax dollars, State Controller Betty Yee reported this week.

Referring to Calexico, Yee said, “Within a two-year span, city management allowed a $4.1 million surplus to become a $4.0 million deficit.” Of the 48 control attributes evaluated between July 1, 2015, and June 30, 2017, the controller found 37 to be inadequate. Questionable activity in Calexico included a $4.8 million water meter upgrade that was performed without a formal contract.

In the City of Industry, Yee found that the city still operates without enough internal controls, even though the problems were identified in a 2016 report. Of the eight recommendations in 2016, the city has fully implemented only three, and took no action on two. Of the three remaining, the controller determined that some incremental change had been made, but the city did not provide supporting documentation.

The controller found that the City of Industry Property and Housing Management Authority continually rents homes far below market rates to current and former City Council members. The estimated cost to renovate one particular home was $175,000, but ballooned to $798,000, leading the city to operate at a loss of $398,000 annually.

“The City of Industry’s unwillingness to admit certain failures and to provide documentation to prove proper use of public dollars is deeply disturbing,” Yee said.

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