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California State Auditor Report Number : 2015-116

City of Irvine
Poor Governance of the $1.7 Million Review of the Orange County Great Park Needlessly Compromised the Review’s Credibility

August 9, 2016 2015-116

The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814

Dear Governor and Legislative Leaders:

As requested by the Joint Legislative Audit Committee, the California State Auditor presents this audit report concerning the city of Irvine’s management of the Orange County Great Park contract performance review (park review).

This report concludes that poor governance of the park review, which ultimately cost the city about
$1.7 million, compromised the review’s credibility. Specifically, Irvine did not ensure that the park review was conducted according to the industry standards most appropriate for achieving the city’s goals. City council members had stressed the importance of an independent audit. However, the standards under which Irvine chose to conduct the park review did not require the independence or rigor intrinsic to an audit. Further, the city’s request for proposal for the park review did not stipulate that Irvine was seeking bids for an audit.

Also, Irvine did not always follow its policies and procedures when selecting and overseeing the consultants performing the park review. Specifically, in 2013 Irvine altered the way it selected a consultant to perform the review. Toward the end of a competitive process to select a consultant for the park review, Irvine modified its selection and evaluation process by augmenting the scores of one bidder, and by including interview performance in its scoring and finalizing the methodology used to calculate scores after it had conducted the interviews. This, coupled with not notifying bidders of the changes to the process, unnecessarily cast doubt on the impartiality of Irvine’s selection of the consultant that would conduct the park review. Further, Irvine’s disjointed management of its contracts with consultants for the park review limited transparency related to the review’s cost and scope, and it also led to cost overruns.

Additionally, in January 2013, the city council unnecessarily created an advisory committee—a subcommittee composed of two city council members—to oversee the park review. State law allows the creation of such committees and allows them to conduct their business without adhering to state open meeting laws. Although we found no evidence to conclude that the subcommittee operated outside of its legal authority, we found that the subcommittee added little value to the process. For example, Irvine contracted with outside law firms who undertook many of the oversight activities that the subcommittee should have performed. Further, we found little evidence that the subcommittee advised the city council, even though the role of an advisory committee, in the context of open meeting laws, is to counsel, suggest, or advise. We believe Irvine would have been better served had the city council chosen not to establish a subcommittee for this high-profile review, but instead chosen to deliberate and decide openly at city council meetings the issues regarding the park review. Greater transparency could have increased public confidence in the park review.

Respectfully submitted,

State Auditor

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