City Overspends $16.3 Million a Year
A review of the city of Compton’s financial status conducted by State Controller Betty Yee found that the city overspends dramatically, and lacks accounting controls.
“The City of Compton has a general fund deficit cause in large part by reckless overspending, pervasive internal control deficiencies, and a lack of city council oversight,” the controller said in a news release.
Almost 90 percent of the 79 measures of internal accounting and administrative controls audited by the Controller’s Office were found to be deficient.
The city had a general fund surplus of $22.4 million in 2007-08, but three years later faced a $42.7 million deficit after spending $16.3 million a year above budgeted expenditures.
Included in the overspending: compensation for the City Council and mayor is nearly $1.3 million higher than the city’s charter allows. The controller additionally reported that each City Council member has a fulltime assistant, compared to comparable cities that have one for the entire board.
“While violating the city’s charter and continually overpaying themselves, the City Council’s brazen overspending contributed to the city’s financial hardship,” Yee said.
The City Council members asked the voters for a pay raise last year, but were soundly rejected. November’s Measure A, put on the ballot by the City Council, would have increased the annual salaries of the mayor and City Council members significantly, from $7,200 annually to $54,000 and $43,000, respectively. The measure was defeated with 73 percent of the voters in opposition.
In addition to the overspending, the controller found a lack of internal controls “such as a lack of segregation of cash-handling duties,” that allowed a former deputy treasurer to embezzle more than $3.7 million from May 2010 through December 2016 (resulting in a 6.5-year federal prison sentence), and consistent staff turnover that prevented employees from performing some critical functions.