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City Council Orders Detailed Report From DOT After $42.6 Million Uncovered In Wrong Account

LOS ANGELES ( — The Los Angeles Department of Transportation has 30 days to issue a detailed review of how $42.6 million in city money accumulated for 17 years in the wrong account.

A report from the LADOT's general manager confirmed the oversight last week, blaming accounting errors for the millions of dollars that could have been used to keep teachers in classrooms and police and firefighters on the streets when many were laid off.

Instead, the money collected in the Special Transportation Department GRANT Fund, ready for transfer into the city's general fund, used to pay city bills.

City Council budget committee chairman Paul Krekorian on Tuesday recommended a set of motions to prevent more money from being forgotten in special funds.

Among measures Krekorian proposed is a centralized list of funds set up within departments.

He also asked that city staff be required to make note of funds that need to be reimbursed and requested that the city controller be responsible for monitoring such funds.

LADOT staff has been instructed to return to the budget committee in 30 days to give a report on its special funds and how millions accumulated over a decade-and-a-half without notice.

Krekorian last week placed the blame with the department's general managers and the city controller, who he said should have caught and corrected the error much sooner.

LA City Controller and mayoral candidate Wendy Greuel released a statement last Thursday placing blame with the City Council.

"As Controller, I have been concerned about the lack of accountability in the city's Special Revenue Funds and have raised this issue repeatedly," Greuel said.

"I am currently auditing the city's 600 special funds, which include transportation grant funds," she stated.

Greuel will run-off against City Councilman and fellow mayoral candidate Eric Garcetti on May 21.

(©2013 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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