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Great Park consultant files complaint, says accounting firm hurt its reputation

Kids play soccer during the City of Irvine and FivePoint Communities ceremonial breaking of the concrete runways of the old El Toro Marine Base to make way for the Great Park neighborhoods and parks on Oct. 9. A Great Park consulting firm claims its reputation has been damaged during audits of the park.
(Don Leach / Daily Pilot)

A consulting firm battered by allegations of cronyism and inefficiency in reviews of Irvine’s $200-million effort to develop the Orange County Great Park has asked a state agency to force the city to apologize, claiming it besmirched the company’s reputation.

The park was meant to replace a retired Marine base with an enormous municipal park, but some city leaders have said that too much money has been spent and too little actual construction completed.

A developer has since agreed to build a scaled-down part of the park in exchange for the right to build thousands more houses around its edge, and a new Republican City Council majority voted to commission a forensic audit to look into where the money went.

Meanwhile, longtime park proponents have decried the ongoing audit as a political witch hunt.

In a complaint filed this week with the California Board of Accountancy, San Diego-based consultant Gafcon alleges that the audit, performed by accounting firm Hagen, Streiff, Newton and Oshiro, contained false information about the company’s work managing the Great Park Design Studio, the entity responsible for executing the park design.

“The deceptive allegations and misleading half-truths contained in the preliminary report have damaged our company and our valued employees,” Gafcon general counsel Paul Najar said in a statement.

Hagen, Streiff, Newton and Oshiro has been irresponsible in compiling its reports, the complaint adds.

But although the complaint formally accuses the accounting firm — which is licensed by the California Board of Accountancy — of misconduct, the complaint also demands that Irvine issue “an immediate and public exoneration of all the unsubstantiated allegations … as well as an apology to Gafcon Inc.”

A spokeswoman for the agency said that the board had received the complaint and could not comment specifically on an ongoing investigation.

However, said spokeswoman Lauren Hersh, “I can’t see that we would at all be involved in telling the city of Irvine what it needs to do.”

The California Board of Accountancy routinely investigates complaints about certified public accountant licensees, handling 3,094 in the 2012-2013 fiscal year, Hersh said.

The cases run the gamut, she said, with the most serious resulting in the revocation of a firm’s or accountant’s license. The agency can also refer cases to the attorney general’s office for review of possible criminal action.

The city and Hagen, Streiff, Newton and Oshiro did not immediately respond to requests for comment.

At a recent City Council meeting where audit attorneys working with the accounting firm presented a update on the status of the audit, Najar asked council members to watch Gafcon’s video rebuttal to allegations that the firm may have been overpaid for its work. Gafcon has long maintained that its work was done “on time and under budget.”

Councilwoman Christina Shea argued that clips of past council meetings included in those videos were taken out of context and proved nothing.

The full audit is expected to be complete in the next month or two.


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