Los Angeles News
$42.6 million found in Los Angeles city coffers after auditors uncover accounting error
LOS ANGELES -- The city of Los Angeles found more than $40 million it didn't even know it had. The money was just sitting there through all these years of budget cuts, furloughs and layoffs.
Some may call it a windfall while others call it an embarrassment. When auditors found some $42.6 million sitting for years unknown in the L.A. city coffers, the frustrations boiled over.
The money piled up over 16 years because of what city officials call an accounting error at the Department of Transportation. Councilman Paul Krekorian says city auditors combed through more than 11,000 documents to find the money, which he says could have been used to prevent some of the service cuts and worker furloughs the city was forced to enact because of budget shortfalls.
"We're scrambling to find any cost efficiency that we can. We're cutting, in many respects, the services that our constituents expect the city to provide. While at the same time this money is sitting in a transportation grant fund," Krekorian said.
Krekorian says the money didn't build up because of any illegal activity. He blames poor oversight by managers who failed to find the mistake.
Meantime, city leaders are wondering if there are other secret piles of cash hidden in L.A.'s vast tangle of accounting practices.
"You can imagine what over $40 million will do to help the budget. And while it may be one-time money, how many other one-time moneys are sitting in some account and people are not aware," said Los Angeles Councilman Dennis Zine.
Now that the money has been discovered, Mayor Antonio Villaraigosa says Angelenos can look forward to seeing an uptick in certain services because of it.
"We're able to put it to good use, reducing our structural deficit even further and importantly making the investments in sidewalk repair, street repair that are so important," the mayor said.
Krekorian says why that money was lost for so long will be the subject of the Budget and Finance Committee meeting on Tuesday.
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