Should Irvine Have an Independent City Auditor?

• April 28, 2026, 7:05 am America/Los_Angeles

Alarms have been sounding recently about the City of Irvine’s financial condition. In late February came the news that the Great Park’s operating budget was facing a structural deficit, with a current year shortfall of $7.5 million potentially increasing to $12.7 million in Fiscal Year 2029-2030. Less than two months later, the other shoe dropped at the April 14 City Council meeting, with the staff revelation that an even larger structural deficit is looming for the City’s own operating budget, with a $6 million shortfall for the current fiscal year potentially ballooning to $37 million two years from now.

On a tie vote at the April 14 meeting, the Council rejected a motion calling for a forensic audit, along with a hiring freeze. The Council will revisit the topic at a special meeting on May 5.

How Did We Get Here?

This news must come as an unwelcome surprise to many residents of a city that’s long boasted of “rank[ing] No. 1 in fiscal strength across the country.” They might well ask how we got here. A search for answers might begin with a flashback.

In 2012, then-Mayor Suhkee Kang was termed out and ran unsuccessfully for Congress. Incumbent Councilmember Stephen Choi defeated his colleague Larry Agran in the race to succeed Kang. Beth Krom and Christina Shea were elected to the Council, joining holdover incumbents Agran and Jeffrey Lalloway. This resulted in a new Republican majority of Choi, Shea and Lalloway replacing the entrenched Democratic majority of Agran, Kang and Krom.

2012 Irvine City Council

The new majority headed by Choi sought to change the direction of Great Park development initiated under the previous majority. In January 2013, the Council directed staff to solicit proposals for a forensic audit of Great Park contracts. This led to a contract with an accounting firm that reported its preliminary findings to the Council in January 2014. The report found, among other things, improper use of sole source contracts and excessive use of change orders. The Council subsequently authorized the city manager to contract with the firm for a second phase of its investigation, and the firm issued its final report in March 2015. That report found, among other things, a lack of budget constraints for the Great Park’s design and construction.

However, the audit firm itself became a target for criticism when it turned out that some of its initial findings were false or baseless. A contractor implicated in those findings filed a complaint with the California Board of Accountancy that ultimately led to the audit firm surrendering its accounting license.

Meanwhile, the State Auditor’s office undertook its own investigation of the matter, and on August 9, 2015, it issued a scathing report criticizing City officials for failing to hold the audit firm to common industry standards to ensure impartial analysis in government audits, for altering the City’s procurement process in a way that advantaged a single bidder, and for managing consulting contracts in a manner that led to avoidable cost overruns and duplication of work. Additionally, the report focused on the Irvine’s lack of an internal auditor:

An internal auditor could have provided critical assistance and guidance during the park review, including guidance related to the use of appropriate audit standards. State law requires cities with aggregate spending of $50 million or more to consider establishing an ongoing audit function, which may be accomplished by establishing an internal auditing office within city government. The Association of Local Government Auditors states that an internal auditor function provides many benefits, including enhancing accountability to taxpayers, building credibility with residents, helping ensure that public funds are spent only in the public interest, and providing an independent and objective perspective so that decisions to spend public funds involve balanced and extensive information. As a knowledgeable resource on audit standards and compliance, an internal auditor could have ensured that Irvine required [the contracted firm] to complete the park review using a more robust set of standards than consulting standards. Further, an internal audit function could have conducted the park review itself, or it could have ensured that audits performed by an external auditor had an appropriate scope and that contracts were subject to rigorous monitoring. Such activities could have eliminated the expressed concerns of the city manager and one subcommittee member about the appearance of a conflict of interest that prevented staff from helping to manage the park review and simultaneously functioning as subjects of that same review. When we asked the city manager if Irvine had ever considered implementing an internal audit function, he stated that it had not done so during his more than 10 years as city manager.

Certain cities with characteristics similar to those of Irvine have internal audit functions. Of the top 10 fastest‑growing cities—by numeric increase in population—in California in 2015, only Irvine and Bakersfield do not. Further, other cities with a similar population size as that of Irvine have internal audit functions, including Berkeley, Glendale, and Anaheim; Berkeley, like Irvine, also has a University of California campus and annual expenditures comparable to Irvine’s annual expenditures. Moreover, the city of Riverside has an internal audit function, a population size similar to that of Irvine, and also is home to a University of California campus. As noted earlier, when conducting their work, internal auditors employed by cities must abide by GAGAS or standards issued by the Institute of Internal Auditors.

Thus, the State Auditor recommended: “To improve fiscal accountability and to ensure that audits are performed to appropriate standards, Irvine should adopt an internal audit function by December 2017.” In the City’s official response, then-Mayor Choi dismissed this recommendation, stating “it is not apparent that an internal auditor would have performed unfilled functions or added demonstrable value.”

The State Auditor responded: “We are disappointed that Irvine is choosing not to implement this recommendation. As we state in the Audit Results, an internal audit function could have conducted the park review itself, or it could have ensured that audits performed by an external auditor had an appropriate scope and that contracts were subject to rigorous monitoring.”  In October 2017, the State Auditor provided an update stating: “We remain disappointed that Irvine has chosen not to adopt an internal audit function, but acknowledge that the city remains open to reconsidering such a function in the future.”

Nearly a decade later, Irvine still has not implemented this recommendation. Instead, the Fiscal Services Division under the City Manager provides routine financial oversight, while the City continues to contract out legally required audits.

What Can We Do?

As mentioned by the State Auditor, Berkeley is comparable to Irvine in some respects and has an internal audit function. It is performed by an elected City Auditor whose office is independent of the city council and city manager. Berkeley’s larger neighbor to the south, Oakland, utilizes the same model. But we don’t have to look as far as the Bay Area for a useful example of this model–it’s been in effect in Long Beach for more than a century. 

New City Charter – Elected City Auditors

In 1907, the City of Long Beach adopted a new city charter that created the position of City Auditor, to be elected by “the qualified electors of the city.” As stated in the City Auditor’s website:  “The early City leaders understood that the ‘watchdog’ of City money must be independent, so they established the City Auditor as an elected position instead of appointed. To this day, the City Auditor still reports directly to the people of Long Beach, rather than to a City Council or City Manager.”

In its nearly 120 year history, the position of City Auditor has been held by only eleven people. This is largely thanks to the 32-year tenure of Myrtelle L. Gunsul, who was elected to the position in 1919, after serving for four years as Chief Deputy City Auditor. Ms. Gunsul retired in 1951, and remains the longest serving elected official in Long Beach history, as well as the city’s first woman elected to public office.

Carrying on in Ms. Gunsul’s tradition, the current City Auditor, Laura Doud, has served in that capacity since 2006. She brings strong credentials to the position, being both a Certified Public Accountant (CPA) and a Certified Fraud Examiner (CFE), as well as holding a Juris Doctor (JD) degree. Under her leadership, the City Auditor’s office has received multiple Knighten Awards, the highest honor given by the Association of Local Government Auditors (ALGA).

Article VII of the Long Beach City Charter gives the City Auditor broad authority as the general auditor of every department of the city, thus granting jurisdiction over far-flung enterprises such as the Port of Long Beach and the Long Beach Airport, as well as general government operations. Importantly this includes conducting performance audits, defined as “independent assessments of programs, functions, operations, or management designed to enhance performance, cost savings, efficiency or service improvements.”

In an email conversation with Irvine Watchdog, Auditor Doud pointed to the September 2025 Development Impact Fees Performance Audit as one of her office’s recent significant achievements. That audit found that despite inflation, three of the city’s four development impact fees had not changed since inception, resulting in $22 million in lost revenue. The audit made ten recommendations, all of which were accepted by city departments. 

In 2024, the Construction & Demolition Recycling Program Performance Audit found $9.2 million in forfeited deposits properly recognized as revenue and made available for funding of environmental projects that would otherwise be paid for out of the city’s general funds. This audit was awarded the Distinguished Knighten Award, which cited it as follows:

“The audit highlighted key opportunities for improvement. It stood out as a well-written, well-structured report that was easy to follow and effectively presented. The graphics and illustrations were clear and well placed, enhancing readability and understanding of key findings. The recommendations were linked directly to the findings, creating a cohesive and actionable audit report, and the ranking of recommendations in relation to the audit findings was outstanding.”

Auditor Doud told Irvine Watchdog that her office’s budget for FY 2026 is $3.55 million, and funds 15 full-time employees. Thus, the revenues realized just from either of the above audits would have been sufficient to fund the City Auditor’s office for several years. Long Beach’s overall city budget totals $3.7 billion. Thus, the cost of the City Auditor’s office is about 0.096% of the city budget.

Independent Fraud Hotline

The Long Beach City Auditor’s office also runs a Fraud Hotline that allows whistleblowers to anonymously report waste, fraud or abuse via telephone or online. The office investigates tips received, or refers them to other agencies with jurisdiction, and founded cases may result in corrective or disciplinary actions. The office issues an annual Fraud Hotline Activity Report, and Doud presents an annual update to the city’s Ethics Commission. (Oakland’s City Auditor operates a similar Whistleblower Program, as do others.)

Appointed City Auditors

Several other major California cities have city auditors appointed by their city councils, including San Diego, San Jose, and Sacramento. For example, section 39.2 of the San Diego City Charter provides in part:

The City Auditor must be appointed by the City Council, from those candidates identified by the Audit Committee, in accordance with the process set forth in section 39.1 of this Charter. The City Auditor must be a certified public accountant or certified internal auditor. The City Auditor is appointed for a term of five years. The City Council may reappoint the City Auditor to a second five-year term without considering other candidates, upon the City Auditor’s application and a favorable recommendation from the Audit Committee. The City Auditor is limited to serving two full five-year terms or ten years in total. The City Auditor reports to and is accountable to the Audit Committee. Upon the recommendation of the Audit Committee, the City Auditor may be removed for cause by a vote of two-thirds of the members of the City Council.

Before adopting that charter provision, San Diego considered other options. A 2019 report of San Diego’s Office of the Independent Budget Analyst discussed some of the pros and cons of the competing models: 

Elected versus Council Appointed City Auditors: Both methods for auditor selection are considered to be acceptable and are included in ALGA’s Model Legislative Guidelines. Some of the benefits that are often attributed to an elected City Auditor are: more directly accountable to the public; ability to potentially adjust audit schedules or workplans more quickly to address emerging issues; and a better sense of what the public is concerned about through campaigning. Some of the potential drawbacks associated with an elected City Auditor approach include: audits may be politically motivated; the influence of money on political outcomes; and auditor qualifications/credentials may be less thoroughly scrutinized. These potential drawbacks are less likely to result from a Council appointed City Auditor selection process.

Although San Diego opted for the appointed City Auditor model, Long Beach’s Laura Doud told us her preference was for the elected model: “I believe other cities should establish their own independent City Auditor positions as independence is the cornerstone of auditing. I believe the position should be elected and to have the authority placed in the city auditor to choose which audits to do and to release the audits unfiltered with complete transparency.”

Asked what should be the minimum qualifications for such a position, and whether Irvine would have a sufficient pool of qualified candidates for an elected City Auditor position, Doud responded: “I believe the City of Long Beach has it right…to be a licensed CPA in the State of California for at least five years. Yes, I believe a sufficient number of qualified residents would qualify as the City of Irvine made the salary competitive with the market.”

Establishment of an independent office of City Auditor would require an amendment to the City Charter. With prompt action, the City Council could place such an amendment on this November’s General Election ballot.