California politics and education update

Audits of Bell were 'rubber-stamp,' state controller says

A prominent accounting firm's audits of Bell's city finances amounted to a "rubber-stamp," according to a state controller's study concluding that much of the alleged wrongdoing would have been detected earlier had the firm done its job.

The long-awaited report is being closely watched because Mayer Hoffman McCann audits the books of dozens of government agencies in California and has 30 offices nationwide. Officials at several agencies, including California's public employee retirement board, have said they were awaiting the controller's study to help determine whether they would consider changes in their auditing contracts.

The controller's office found that MHM failed to comply with 13 of 17 "fieldwork auditing standards" when reviewing Bell's books in the 2008-09 fiscal year. The firm focused mostly on comparing financial numbers year to year rather than looking at potential for inappropriate or illegal activities, the controller's report said.

MHM's review gave clean audits to Bell, where eight current and former city officials were charged this fall in what prosecutors called a widespread corruption scheme that occurred over several years. The controller's report said that MHM did not find any city funds that had "significant deficiencies." The report said auditors did not explain why deficit balances of three funds totaling $8.89 million "were not considered significant."

Want more say over UC? Pay up

As The Times notes in its Dec. 17 editorial, California legislators -- who increased state funding to the University of California system this year in exchange for greater control over finances -- are incredulous over the university's recent tuition increases. Their outrage is ill-informed.

While they complain about rising costs, they fail to recognize that what has changed dramatically is not the cost of higher education but rather who pays -- the student or the taxpayer. Some realities:

The real cost of educating a student in the UC system has declined by nearly 20% over the last decade.

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It is paradoxical that the very individuals who have contributed to the rise in tuition by budgeting less public money for higher education are now complaining about the effects on students and parents of tuition increases. What, did legislators think they could decrease their share public education funding by more than 50% and not have an effect? How does the Legislature think the UC system should react when such a large hole is left in its budget?

L.A. lags behind other big cities on spending of federal stimulus funds

When the federal stimulus program was launched in early 2009, the city of Los Angeles was in dire straits, facing a shortfall of $427 million and the possibility of mass layoffs. City officials scrambled at the new source of funds, ultimately netting more than $630 million in stimulus grants.

But nearly two years later, the city has spent only about a quarter of that money, a rate of spending that trails that of New York, Chicago and several other large California cities. Though the bulk of L.A.'s stimulus money was awarded by last March, the city had completed only eight of its 108 projects by mid-October.

L.A. officials say they have been hampered by a painful irony. As millions of federal stimulus dollars flowed in the door, the city was reeling from cost-cutting measures that led to the exodus of 2,400 experienced workers through an early retirement program and more than 360 layoffs. On top of that, many city workers, including some who are handling stimulus projects, are forced to be on furlough 16 to 26 days a year.

A salve for California's financial woes -- if voters will buy it