Audit: Parks & Rec Lost or Misappropriated Funds

Long Beach City Auditor Laura Doud announced Monday that the Parks and Recreation Department -- one of the city's largest -- has lost funds through misappropriation, theft and a lack of standard accounting practices.

In an audit requested by the new directors of Long Beach Parks, Recreation & Marine, Doud's office found that there was no department-wide system by which revenues, some of which are collected at 34 field sites, could be ensured to reach the city's treasury.

So systemic is the lack of proper business protocol for monitoring revenues, Doud said, that her office was unable to quantify how much money has been lost by the department. Its annual revenues are $6 million and it has 416 full-time employees, plus a legion of part-time seasonal workers.

That transitory workforce across a city of 50 square miles is but one of the breakdowns cited in the financial operation of the department, which has won awards for its programs.

One of the examples in the audit, which was released shortly before 5 p.m., is that 23 part-time lifeguards at the Belmont Pool are handling about $121,000 in payments and they had not attended cash-handling training class. Also, two part-time employees are responsible for collecting and recording $287,000 for Aquatics Summer Camp fees and never attended cash-handling training.

The result, the audit concludes, is that $408,000 in public funds were handled by part-time workers with no training on how to safeguard the funds.

The proper way to handle public money, in very broad terms, is to have different people, not one individual, receiving, accounting and depositing revenues, she said.

The department's revenue-handling operation was audited after city management came to Doud last year with knowledge of two thefts, one at Blair Field's sports office, which mostly handles facilities-use payments, and a smaller theft at Wardlow Park.

"I don't know the exact dollars," Doud said of the two losses. "It wasn't large amounts, but we felt the need to go in and dig deeper and look at this as a whole department-wide problem that lacked a centralized revenue-gathering and monitoring procedure that any authorized employee could access from any of the department's many facility sites.

Phil Hester was director of Parks & Rec at the time the two thefts occurred which prompted Doud's investigation of losses, she said. Hester was a 22-year city employee until his recent retirement. Doud pointed out that "he's not out there responsible ... he has a business operations manager who really handles this stuff."

That business operations manager at the time, she said when asked, was JC Squires. But Doud, who was elected after running unopposed in 2010, declined to say where Squires now works, referring questions to the city manager or current Parks & Rec director.

Squires was interviewed by Patch last week during the emergency drill at Long Beach Airport, where the lists him as "manager, finance and administration/CFO," or chief financial officer.

A call to Long Beach Mayor Bob Foster could not immediately be returned at 5:50 p.m.

Doud issued a press release late Monday that stressed the positive steps that the department's new leaders are already employing and their embrace of accounting improvements. She was also careful to not single out individuals by name and noted that some of the problems were the result of non-administrative staff handling cash.

A example that she gave of a problem in the system: A sports venue user might not have paid for its past use of a park facility but is still able to rent and use it again with payment still owed.

Look for more on this story as we get through the 27-page audit (attached in pdf form), where the city departments involved provide a response.