Citizens of Laguna Beach! It’s Paul Merritt, your candidate for Laguna Beach City Council, with a critical expose of gross negligence and fiscal mismanagement.
In 2012 a new audit firm was hired. They discovered that an entry in the 2010 Comprehensive Annual Financial Report (CAFR) relating to a 2010 CalPERS payment of more than $10 million had been incorrectly journaled as a prepaid asset by the city of Laguna Beach finance department.
My sources could not find any justification for recording payment of a prior expense as a prepaid asset. Furthermore, the sources found that the city’s audited financial statements for 2010 and 2011 had not been revised to reflect the new (but incorrect) entry.
Long-term impacts are uncertain. Failure to assign millions of dollars correctly harms the credibility of all city of Laguna Beach finance department accounting assignments. Accurate accounts are an important responsibility of elected public officials, and are an implicit right of the citizens who voted them into office.
The annual CAFR is the single most important fiscal management document given to bankers and bondholders. It is also published on the city’s website to accurately inform citizens of the financial health of their city.
One of my platform positions is that fiscal accountability is a cornerstone of good governance. To prevent critical errors in Laguna Beach’s account ledgers from happening again, it is my belief that our elected City Treasurer, Laura Parisi, should be employed full time to maintain oversight.
Certified financial documents should be a beacon of truth for stakeholders and interested parties. Your vote means that a powerful new voice for financial accountability and transparency will, finally, be present on Laguna Beach’s City Council.
Paul Merritt, Laguna Beach