California State Auditor Releases Report Criticizing City of Irvine’s Poor Governance of $1.7 Million Review of the Orange County Great Park
Independent State Investigation Finds Flaws in the City’s Audit Process Compromised Audit’s Credibility
SAN DIEGO, CA (August 9, 2016) – The City of Irvine exercised “poor governance” in its $1.7 million review of the Orange County Great Park project, according to a report released today by the California State Auditor. After a yearlong investigation of the audit, the agency concluded that the City of Irvine failed to conduct an independent audit of the contractors involved in the Great Park and did not follow appropriate industry standards, which “needlessly compromised” the audit’s credibility.
“The City did not ensure that the park review was conducted according to the most appropriate industry standards for achieving the City’s goals, which would have ensured an independent and more rigorous review,” the California State Auditor stated in a fact sheet on the report. “Irvine’s disjointed contract management allowed two consultants to duplicate work, commence work prior to receiving final approvals, and to work beyond the authorized amounts of their respective contracts, which led to cost overruns.”
The report released today represents the culmination of the formal state audit process, approved last year by the Joint Committee on Legislative Audit of the California Legislature at the bipartisan request of several state legislators. These legislators were seeking an independent review of the City of Irvine’s audit process for reviewing the Orange County Great Park after members of the public, City staff and businesses involved with the project brought to light several inaccuracies in preliminary reports and findings.
These discredited audits were conducted by consultants hired by the City of Irvine and selected by the Audit Subcommittee, comprised of just two members of the City Council, in a process that the report harshly condemned.
“Irvine compromised the impartiality and transparency of the process it used in selecting the consultant to perform the park review,” stated the agency fact sheet. “It modified and finalized the process after it had accepted and reviewed bidders’ proposals and interviewed selected firms. It substantially increased the winning bidder’s scores after the interview phase, raising the bidder from third- to first-place, whereas the scores for the other proposals remained unchanged.”
The state’s forensic audit reviewed the selection process used to hire the audit consultant and the City’s ongoing management of their contract, as well as the audit reports they produced, which were released by the City of Irvine in January 2014 and March 2015, respectively. These reports were found to contain numerous factual inaccuracies, incorrect assumptions and misleading conclusions about a number of businesses working on the Great Park project, including Gafcon. The San Diego-based construction consultant was a key member of the Great Park Design Studio that oversaw the Great Park’s Master Plan and design preparation work.
“We are extremely proud of our work on the Great Park project, which continues to be recognized for innovative and efficient planning and management, and we are pleased that the State Auditor has confirmed that the audit was fatally compromised from the very beginning,” said Gafcon CEO Yehudi Gaffen. “We believe that the State Auditor’s report sets the record straight and provided a more complete picture of events and decisions surrounding the Great Park.”
Key findings of the state audit included:
- City of Irvine misled the public into believing that the Great Park investigation was an audit instead of “consulting assignment.”
- City did not use appropriate government auditing standards.
- City’s selection process for the auditor was flawed and lacked transparency.
- City’s “auditors” did not adhere to the billing terms of their contracts, and City did not enforce those terms.
- City’s appointment of an audit subcommittee, which was exempt from state open meeting laws, compromised the Great Park’s audit’s integrity.
- City should not have released preliminary review results before a key election.Since the release of the City of Irvine’s audit, Gafcon has disputed every allegation contained in the report that concerned the company, providing video footage and written documentation, refuting each false claim and demonstrating the extent to which Board and Councilmembers were involved in decision-making related to the Park. In the interest of unbiased transparency regarding Gafcon’s work on the project, the company posted all of the evidence for public viewing at www.greatparktruth.com. “Since the beginning of this audit, we have cooperated with the City of Irvine and its auditors, providing thousands of documents and responding to every question posed to us,” said Gaffen. “We were always confident that the findings in the audit would ultimately be discredited, and we feel gratified that the State Auditor’s report has done exactly that. In the wake of these findings, we hope the City of Irvine will formally exonerate Gafcon and all the contractors who worked tirelessly to provide the residents of Orange County with the award-winning Master Plan for the Great Park.”
Gafcon began working on the Orange County Great Park project in 2006, in conjunction with Ken Smith Landscape Architect, Inc. The two entities joined together to form the Great Park Design Studio, which served as the primary contractor during the Master Plan Design Phase and the Schematic Design Phase. Since beginning work on the Great Park project, Gafcon cooperated with the requests of the City of Irvine, including prior audits commissioned by the City that found no material issues regarding the Design Studio or Gafcon’s performance. The Design Studio followed its contractual requirements and related directions given by the City of Irvine and the Great Park Board of Directors in a professional manner, completing the work on time and within budget. There was full oversight of the public funds for this project, and all spending, was approved by the City Council and Great Park Board of Directors.
The Great Park master plan and schematic design have received numerous national awards from key organizations for planning and vision, including the Southern California Association of Governments 2010 4th Annual Compass Blueprint Recognition Award-Honorable Mention, American Institute of Architects 2009 AIA Honor Award in Regional and Urban Design, the American Society of Landscape Architects 2009 ASLA Professional Honor Award for General Design, the American Planning Association (National) 2009 APA Focused Planning Issue Award, the American Society of Landscape Architects 2009 National Award for Research, the American Institute of Architects 2008 AIA Honor Award in Regional & Urban Design, the American Society of Landscape Architects 2008 ASLA National Honor Award for Analysis & Planning, American Planning Association (California and OC Chapters) 2008 APA Focused Planning Issue Award, California Society for Ecological Restoration 2007 SERCAL Members Award, and selected as part of the 2008 Sustainable Sites Initiative Case Study.
Gafcon is one of Southern California’s most respected construction consulting firms with more than 100 employees and offices in San Diego and Los Angeles. A family-owned business, Gafcon has a long history of involvement in the Southern California region and has successfully overseen more than $4 billion worth of construction projects on time and within budget, providing continual transparency to clients, public entities, oversight committees and taxpayers.