Public domain photo via Pixabay.
Public domain photo via Pixabay.

Responding to an audit that found hundreds of millions of dollars in questionable contracts in Industry, the state Controller’s Office announced Thursday it will conduct an investigation into the city’s finances.

“Our initial review shows significant discrepancies between the financial transaction reports submitted to my office and the city’s audited financial statements,” Controller Betty Yee said. “As the state’s chief fiscal officer, I have the duty to bring my office’s expertise to bear to identify potential misuses of taxpayer dollars.”

According to Yee, she sent a letter to city officials notifying them that she plans to investigate discrepancies in financial reports and analyze the city’s accounting controls.

The audit will focus on fiscal years 2012-13 and 2013-14, but may expand if needed, according to the Controller’s Office.

A recent KPMG audit commissioned by the city uncovered $326 million in contract payments between Industry and companies owned by relatives of Mayor David Perez over a period of nearly 20 years.

Fees paid for street sweeping, parking lot maintenance and other services raised questions about whether the city may have been overcharged. Industry officials now pay a street sweeping vendor less than one-sixth of what it had been billed by a company owned by Perez family members, the San Gabriel Valley Tribune reported.

Perez resigned in 2012, after serving as mayor for 11 years.

Earlier this week, the Los Angeles County Board of Supervisors voted to urge the state controller and District Attorney’s Office to investigate the allegations of fraud and corruption, suggesting that a grand jury be convened.

The District Attorney’s Office said last week it would be looking into the city’s financial management.

The D.A.’s office first launched an investigation in 2009, when Steve Cooley was district attorney. Two years later, investigators concluded that no conflict of interest existed because the contracts in question were signed before Perez took office and he abstained from votes related to family-owned businesses.

— City News Service

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