Los Angeles Transportation Department Failed to Return $42.6 Million to General Fund

The Los Angeles Times reported May 9: “Los Angeles’ transportation department has identified a $42.6-million accumulation of cash that should have been paid to the city’s general fund over a 17-year period, officials said Wednesday. The money was allocated by city officials over the years to help fund costs of various projects. It should have been returned as federal, state and other grants arrived, according to Department of Transportation General Manager Jaime de la Vega. But from 1995 to 2011, the funds were only returned to the city's general fund twice, according to a City Council memo. The money grew in a fund that was not audited or examined.”

City Councilman Paul Krekorian said $42.6 million “is a lot to fall through the cracks,” and added: “I continue to be absolutely perplexed as to how this can happen in the second-biggest city in the country.”

The money was used to cover non-salary costs for city employees, including healthcare and pension benefits, Mr. de la Vega said. (Source: Los Angeles Times, May 9.)

California Tax Foundation   |   1215 K Street, Sacramento, CA 95814   |   916.441.0490   |   foundation@caltax.org