Opinion: Concerning City Council

By Michele Monda

Just how bad does it have to get before our city council wakes up and smells the burnt coffee?

Even the unauthorized firing of our city audit firm doesn’t seem to rock them. 

On Tuesday, Aug. 13, the council discussed hiring a new audit firm. But why did we need a new audit firm when the current firm was two years into a three-year contract?

The answer: Because Gavin Curran, the finance director/assistant city manager, unilaterally took it upon himself to fire them without any consent from the city council or city audit committee. 

Councilman Bob Whalen stated, “[The audit contract] shouldn’t have been terminated unilaterally by staff. I mean it shouldn’t have happened. . . this wasn’t a great process.” 

Mayor Pro Tem Alex Rounaghi said, “The decision to terminate the previous [auditors] should have gone to the Audit Committee.” Councilman George Weiss stated, “Our power, our authority has been usurped.” 

And yet amazingly, nothing happened to Gavin Curran. Not even a rebuke. Let’s examine why he fired the audit firm without informing anyone. 

Curran has been in charge of the finance department since at least 2011. 

Every year, the fiscal year ends June 30 and the review is supposed to be completed by outside auditors by Dec. 31. Yet, the last time any Laguna audit was done on time was 2017. That’s six years ago by accounting standards. 

The 2023 audit was completed a year late. From 2016 to the current year, audit 2023, auditors have repeatedly raised issues regarding city procedures, internal controls, cash and investments, and other financial mismanagement matters. 

Critical problems keep recurring, such as the failure to properly review and adjust deposit balances, lack of a capital asset policy, beginning balances for fiscal years were not in agreement with the audited forms making balances incorrect for an entire year, and irregularities with year-end closing procedures. 

These issues have continued year after year and have not been corrected. Why didn’t Curran roll up his sleeves and get it done as the chief financial officer? Neither of the past two city managers seemed interested in forcing the finance department into compliance, and Curran didn’t make it happen. 

Mayor Sue Kempf has excused it all, claiming it has been caused by personnel turnover and staffing issues. That leads to the question: What’s caused that? Other cities have managed to comply without material internal control weaknesses despite staffing issues. Why not Laguna?

Curran has repeatedly defended his inaction by stating that the department received the Government Financial Officers Association award for years. This is essentially a “participation award” and checklist for filling out the forms correctly. 

Their website states, “The goal of the program is not to assess the financial health of participating governments, but rather to ensure that users of their financial statements have the information they need to do so themselves.” Fun fact: the city of Bell received this award in 2007 and 2008, just years before the unraveling of one of the biggest financial scandals in California history – just to put this award in perspective. 

This is a serious breach of fiduciary responsibility for residents. It should be job one for the city to ensure that our finances are in order and comply with standard accounting principles. No company would ever tolerate these kinds of failures. Yet our city does. 

Fortunately, our new City Manager, Dave Kiff, has contracted for an operational assessment of the finance department and related functions. Finally, a city manager interested in cleaning up the irregularities and establishing a functioning and responsible finance department. Hopefully, this assessment will include a forensic audit of what’s been occurring so the department can start operating properly.

Curran stated the reason for firing the current auditing firm was that the firm couldn’t meet the Dec. 31 deadline. Could it be because they weren’t given the financials on time at the fiscal year end on June 30? 

Today is Aug. 23. Have our financials been prepared to hand off yet? Even the new firm the council selected based on the Audit Committee’s review has said it can’t get last year’s audit done by Dec. 31. Its end date was the same as our current auditors. 

So why the change? Could it be that the person criticized by the previous auditors for consistent irregularities terminated them without warning and without council or audit committee approvals simply because he wanted them gone?

And he got away with it because the current city council majority, with George Weiss objecting, voted for a new firm. 

Amazingly, not one word was said by others about this one man’s unauthorized rogue firing. What’s wrong with this financial picture? Just how low are our city council’s standards?

Hopefully, we’ll find out once the operational assessment comes back. Stay tuned.

Michèle is a 21-year Laguna resident and actively follows Laguna politics. She is the Treasurer of Laguna Beach Sister Cities and is involved with the local arts scene. She can be reached at Michelemonda3@gmail.com.