News & Analysis
Yet another major embarrassment has befallen the Irvine City Council, especially City Councilmember Christina Shea. This time, it involves the scandalous misconduct of Shea and her hand-picked accounting firm to conduct a “forensic audit” of the Great Park.
This was the “audit” that took two years (2013-2014) and consumed an astounding $1.7 million of Irvine taxpayer funds to ultimately find there were no problems with the seven previous public audits of the Great Park, and that the financial affairs of the Great Park from 2005-2012 were in good order.
Along the way, however, the so-called “independent” accounting firm — Hagen, Streiff, Newton & Oshiro (HSNO) — made all kinds of wild charges, each proven false, against political opponents of Councilmember Shea.
Critics of the “audit” called it a taxpayer-funded, Shea-directed “witch hunt” — a “fraudit” — aimed primarily at former Irvine Mayor and Councilmember Larry Agran, who chaired the Board of Directors of the Great Park from 2005 to 2010.
In fact, after a comprehensive State review of the so-called “forensic audit,” the State Auditor reported in 2016 that HSNO had not conducted an “audit” at all; that HSNO was chosen pursuant to a rigged bidding process; that HSNO’s contract with the City of Irvine allowed for hundreds of thousands of dollars in no-bid extensions, in violation of City policy; and that so-called “independent” attorneys (from the Aleshire & Wynder law firm) hired in place of the City’s regular attorneys were guilty of major violations of professional standards while filing false reports apparently timed for political purposes.
Now, in January 2018, yet another State report and complaint has been filed against the HSNO accounting firm regarding its shoddy work for the City on the Great Park. The 30-page complaint filed by the Executive Officer of the Califor nia Board of Accountancy, represented by the State Attorney General, alleges: 21 instances where HSNO failed to be “impartial and intellectually honest” regarding the Great Park; a number of acts of “negligence” that “indicate a lack of competency in the practice of public accountancy;” and that HSNO “knowingly prepared, published or otherwise disseminated a materially misleading report or information.” (emphasis added)
The Attorney General asks for a hearing, later this year, before the California Board of Accountancy, Department of Consumer Affairs and for an order “revoking or suspending, restricting, limiting or otherwise imposing discipline” upon HSNO’s license to practice public accountancy. The complaint also asks for an order that HSNO pay the reasonable costs of investigation and enforcement, as well as administrative penalties.
With the documented record of serious wrongdoing now in hand, yet another “ask” should be forthcoming. The City Council, on behalf of Irvine taxpayers, should be “asking” — in truth, demanding — its money back. The City contracted with HSNO for a comprehensive “forensic audit ” of Great Park finances. Instead, at a cost of $1.7 million — more than five times the originally projected costs — what the City Council and the Irvine taxpayers got was a series of politically-driven reports from HSNO that were so negligent, incompetent, and knowingly misleading that HSNO and selected principals at the firm could actually lose their professional licenses. It doesn’t get much worse than that.