South El Monte faces a state inquiry

The state will investigate South El Monte’s administrative and financial controls following a bribery scandal involving the city’s mayor and a critical audit.

Auditors in 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 agreed to plead guilty to a federal bribery count.

Last week, Anthony Ybarra, who had worked for South El Monte 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.

South El Monte’s independent auditors advised the city last September to investigate its internal financial controls.

That audit, released in June, 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.