STOCKTON (CBS13) - Stockton's financial problems are no secret, and now the state controller has released a report detailing what went wrong and why.
The audit paints a scathing picture of the city's misuse of money and the ignorance of state law. It appears no one seemed to even notice for years.
"They were just gonna do it the way they wanted to and they could disregard the law," said Jon Coupal, Howard Jarvis Taxpayers Association. "Well I think they are paying for that arrogance right now."
The state controller's audit says Stockton should've seen the warning signs.
"Their financial reports are anywhere from five to 19 months late. That delays outside reviews, doesn't provide timely information and it delivers penalties to the city of Stockton as well. There are costs to this," said Jacob Roper, California State Controller's Office.
The state controller says Stockton city leaders ignored signs of the economic downturn, improperly put gas taxes in their general fund, illegally sent redevelopment money to the city and had poor accounting for years.
The Stockton city auditor says the report reveals nothing new, and the city is already aggressively addressing the issues.
But Coupal says even if they are now, it's already too late.
"The lesson here for any city is that you've got to watch revenue and expenditures very carefully to make sure that you're ahead of these trends, not behind them," he said.
The misuse of money in Stockton is clear. The city's future is still in question, and there's no doubt the bankrupt city has a long way to go.
"The only thing that can save Stockton at this point is a significant turnaround not only in the state's economy but in the local economy," said Coupal.
In response, Stockton City Manager Bob Deis released this statement Monday saying, "Not only is the audit not new, but it just inflames the situation and slows down the cities recovery."
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