A report by the California State Auditor accuses the City of Anaheim of mismanaging tourism-related contracts and millions of dollars in related funds.
State Auditor Grant Parks released the report on Tuesday morning after his office conducted an “urgent audit” of the city’s public funds that were disbursed to two private nonprofit entities: The Anaheim Chamber of Commerce and the Anaheim and Orange County Visitor and Convention Bureau (Visit Anaheim).
“The city entered into contracts with and disbursed more than $100 million to Visit Anaheim, and the Chamber received from both the city and Visit Anaheim more than $6 million in public funds from fiscal years 2012-13 through 2021-22,” the audit report said. “In general, we determined that the city lacked a meaningful contract monitoring process and did not properly manage the contracts it entered into with these entities, resulting in unallowable spending and unmet deliverables.”
One case the State Auditor’s office cited was when Visit Anaheim subcontracted with the Chamber to provide work related to promoting the city’s tourism and convention industries.
“Visit Anaheim did this without the required written permission from the city and absent appropriate oversight from the city,” the audit report continued. “The Chamber then used some of these funds for unallowable services, including advocating for or against proposed federal, state and local legislation and supporting resort-friendly candidates through its political action committee.”
Another incident of mismanagement of funds came when the city awarded a $6.5 million contract to Visit Anaheim to perform “economic recovery activities during the pandemic.”
However, the auditor’s office found that Anaheim had “millions in estimated unspent public funds” intended to fund similar services, officials said.
“Among the recommendations we have made for the city to improve its contract monitoring policies and procedures is for it to seek to renegotiate its largest contract with Visit Anaheim to allow for more effective oversight,” State Auditor Parks said.
In a press release, Anaheim Mayor Ashleigh Aitken said that city officials would “welcome this audit as we continue to move [the city] forward.”
“Oversight and accountability are vital to public trust, and we should always be expanding and improving,” Mayor Aitken continued. “Along with our recent tightening of lobbying rules, commissioning of a city ethics officer and enhanced rules for city communications, public record and City Council calendars, the audit’s recommendations will be part of a comprehensive set of reforms to guide Anaheim.”
The full audit report can be read here.
Click here to read the City of Anaheim’s press release regarding the state audit report’s findings.