Represent!

Politics, government and public life for Southern California

LA budget officials don't know how much money may be hidden in city departments

The chair of the Budget and Finance Committee is seeking a complete list of the city's special funds. The recent discovery of an additional $43 million in the LADOT budget shows just how little city leaders know about departments' budgets.
The chair of the Budget and Finance Committee is seeking a complete list of the city's special funds. The recent discovery of an additional $43 million in the LADOT budget shows just how little city leaders know about departments' budgets. Alice Walton/KPCC

The recent discovery of an extra $43 million in the Department of Transportation's budget shows just how little Los Angeles city leaders know about so-called "special funds," the chair of the Budget and Finance Committee said Wednesday. 

There are between 600 and 700 special revenue funds on the City of L.A.'s books. These funds hold money from grants and taxes that are set aside for specific projects. And in the case of LADOT, sometimes the funds hold city dollars that should be reimbursed back to the General Fund. 

"There was a change in management in the Department of Transportation," Councilman Paul Krekorian told KPCC's Take Two. "And there was an early detection around October 2011 that this fund seemed to have more money that it should have in it, so they launched a forensic accounting effort that involved reviewing of 11,000 documents." 

As a result of that finding, Krekorian introduced a series of motions, the first of which seeks a complete list of the city's special funds and their cash balances. He also wants details on reimbursements to the General Fund.

The budget chair said it's up to general managers and the controller to monitor the special funds. 

"The city council needs to know what special funds are out there. We need a comprehensive list with a report about what their cash balances are, what their purpose is, and so forth," Krekorian said. 

In 2008, then-Controller Laura Chick told the Los Angeles City Council that special revenue funds should be reviewed on a quarterly basis. 

"Government is always trying to find ways to pay for providing basic services to the public," she wrote at the time. "There is no reason that millions of dollars should sit gathering dust especially when we are seeking to raise fees and taxes on the public." 

The current Controller (and mayoral candidate) Wendy Greuel said she repeatedly voices concerns about the special funds. Her office is currently auditing the more than 600 special funds. 

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