State to review South El Monte after mayor caught in bribery scandal and critical financial audit

The state will probe South El Monte’s administrative and financial controls in the wake of a bribery scandal involving the city’s mayor and a critical audit.

State auditors in California State Controller Betty T. Yee’s office plan to go through the city’s ledgers, payroll records, contracts, audits and personnel records Sept. 6, according to a letter sent to Jennifer Vasquez, the acting city manager for South El Monte.

The letter states that the investigation is being done in part at the request of the Los Angeles County Board of Supervisors and after a review of financial reports and audits for fiscal years 2012 through 2015.

“I have concluded that there is reason to believe that the annual reports of financial transactions by the city are false, incomplete, or incorrect,” Yee wrote in the letter, adding that auditors will need to verify the information in those reports.

The audit comes days after the city manager abruptly quit and just weeks after the mayor was charged in a federal bribery case. The mayor pleaded guilty Thursday.

Last week, Anthony Ybarra, who had worked for the city for more than a decade, resigned as city manager. He denied that the city’s problems, including the bribery scandal, had anything to do with his resignation.

His exit followed the resignation of Mayor Luis Aguinaga, who stepped down after it was revealed in July that he regularly accepted bribes from a contractor doing business with the city.

Aguinaga admitted that, from 2005 to September 2012, he regularly accepted bribes of $500, with cash payments left in a City Hall bathroom or inside the passenger-side pocket of a car, according to the U.S. attorney’s office.

The long-running corruption scheme involved a contractor who provided construction and engineering services to the city.

At least two audits, including one by a firm hired by South El Monte last year, criticized the management of the city and, among other things, singled out its relationship with two firms.

Last September the town’s independent auditors advised the town to investigate its internal financial controls.

Released in June, the resultant audit found that South El Monte’s city manager — acting without council approval — authorized a series of contracts and payments involving the town’s grant-writing and engineering firms. The audit raised questions about the contracts.

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UPDATES:

4:40 p.m.: This article was updated to indicate that South El Monte Mayor Luis Aguinaga pleaded guilty Thursday.

This article was originally published on Sept.1 at 3:40 p.m.