The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
Sacramento, California 95814
Dear Governor and Legislative Leaders:
As approved by the Joint Legislative Audit Committee, the California State Auditor presents this audit report concerning the city of Lynwood (Lynwood), conducted as part of our high‑risk local government agency audit program.
This report concludes that Lynwood is a high‑risk city due to its financial and organizational risks. Specifically, Lynwood operated with a structural deficit for many years. Although the city projects its general fund operating revenues to exceed operating expenditures in fiscal year 2018–19, we question whether it will be able to sustain that level of financial activity due to recent salary increases and the use of one‑time revenue. Additionally, the city has violated state law by using restricted funds to pay for certain personnel costs. We also identified organizational inefficiencies that limit Lynwood’s ability to provide public services, such as high turnover in key leadership positions and an inability to effectively measure staffing needs. To address these concerns, we present several recommendations, such as developing policies and procedures to safeguard the city against waste, fraud, and inaccurate financial reporting. We also recommend that the city cease its inappropriate and unlawful use of restricted funds.
ELAINE M. HOWLE, CPA
California State Auditor