Local

Audit of Great Park raises questions about project

Accounting and AuditingBusinessFinance

Preliminary findings of an audit of the Great Park showed irregularities and raises questions about the financial and structural management of the $200-million project.

Among other things, the review concludes that some contractors who were awarded low-bid contracts ultimately billed the city far more than originally estimated, in most cases because of change orders approved by the Irvine City Council.

The contractor that won the right to construct a preview park, for instance, ended up billing the city five times its original bid.

In some instances, services were paid for twice, and some work done by a public relations consultant for individual council members was billed to the park, the report says.

The Great Park has been an ambitious proposal to transform a retired Marine base in Orange County into what was supposed to be a municipal park on par with San Diego's Balboa Park, or even New York City's Central Park.

But only a portion has been built, and most of the money set aside for it has been spent.

The audit, ordered last year by the City Council, yields more questions than answers, stating that in some cases auditors were "precluded from further analysis."

For instance, only $5.5 million in tax increment revenue, billed as a main source of funding, was received by the park. But the audit firm was told that determining how the remaining $38 million was used was outside the scope of the review, the report states.

According to a Times analysis late last year, most of the tens of millions set aside for the Great Park went to plans, designs, administrative costs and consultants. Less than a fifth of the money went toward actual park construction.

The audit firm looked at the period from July 1, 2005, to Dec. 31, 2012, and reviewed documents including business and design plans, contracts and invoices and interviewed 23 current and former employees of the park, city and subcontractors.

Several key players refused to speak with auditors, the report notes, including architect Ken Smith, political strategist firm Forde & Mollrich and a Great Park employee tasked with reviewing invoices.

However, Stu Mollrich of Forde & Mollrich said he never received written questions from the auditing firm after requesting them Oct. 10. Written responses allow for more accurate, informed answers and provide a clear public record, he said in a statement.

The audit concluded, though, that a written exchange would not be cost-efficient and would inhibit free dialogue.

The Great Park Design Studio, which includes Smith, program and construction management firm Gafcon and Forde & Mollrich, said in a statement it has been willing to cooperate with auditors and that its award-winning work was completed on time and on budget.

Some individuals who told auditors they witnessed or were subjected to political pressure declined to speak publicly with auditors, but no further details were listed.

Councilwoman Christina Shea said the report uncovers irregularities that many have long been concerned about, but that there's more investigation to be done.

"It's really sad that the city is having to face this sort of black eye," she said. "There's just so many areas, double billings, paying those huge amounts of money."

Councilman Larry Agran, who had only superficially looked over the report before speaking with The Times, said he didn't believe there was much of concern.

"It's unnecessarily political in its tone and content," he said.

In November, the Irvine City Council approved developer FivePoint Communities' plan to build a scaled-down version of the park in exchange for the right to construct 4,606 homes.

The 688-acre park is a stark contrast to the 1,300-acre municipal park with forests, a lake, museums and a wildlife corridor promised to county voters in 2002 at the site of the former El Toro Marine Corps base.

samantha.schaefer@latimes.com

Copyright © 2014, Los Angeles Times
Related Content
Accounting and AuditingBusinessFinance
Comments
Loading