City of Maywood Still Lacks Financial Controls, State Auditor Reports

Three years after a state audit revealed numerous problems with fiscal controls – or lack thereof – in the city of Maywood, the problems have yet to be corrected, the state auditor reported December 20.

Referring to an October 2019 corrective action plan, the auditor wrote: “We reviewed the plan and found the city has made progress toward resolving some of the concerns raised in our report. However, the city still has not finalized or obtained approval of the city council for many of the policies that were under development when the city submitted its initial update in April 2017. Additionally, although the city paid one of its overdue obligations, a large portion of the city’s outstanding debt, which is another problem we highlighted in our 2016 report, continues to remain unaddressed.”

The auditor continued: “The city continues to operate without many critical internal controls. In its April 2017 corrective action plan update, the city presented separate draft policies regarding internal controls, accounting practices, budgeting, and hiring. According to the interim finance director, only one of these policies was subsequently finalized and approved by the city council. … One example of the city’s need to prioritize implementing such policies and procedures is its repeatedly late publication of audited financial statements, which is symptomatic of weak internal controls in the accounting and reporting functions.”

Specifically, the city’s audited financial statements for fiscal year 2017–18 were released in September 2019, nearly 15 months after the end of the fiscal year.

Despite increasing revenue, the city remains in debt. The State Controller’s Office determined that Maywood must repay $2.6 million that a former redevelopment agency transferred to the city in 2011 and 2012, because the transfers violated state law. Another $10 million in debt stems from civil suits against the city’s police department, which was dissolved in 2010.

“These debt amounts remain virtually unchanged since the release of our report in October 2016,” the auditor reported. “If the city continues to make payments at the current rate, it will take 68 years to pay off this liability.”

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