Three years after a massive corruption scandal, Bell's finances have worsen considerably and the city doesn't have the money to refund millions of dollars in taxes illegally levied on residents, according to a state audit released Wednesday.
Bell currently has a negative cash balance, caused in part by the city's move to stop collecting the illegal taxes, the state controller's office found. Bell promised to refund more than $3 million in overpaid taxes to residents and busineses, but auditors found that the city has not done so.
"The city is facing significant fiscal challenges that, if left unresolved, could lead to a fiscal crisis," the audit found.
Auditors also faulted the city for not following more than 20 recommendations the controller's office made after the corruption scandal.
[Updated at 10:27 a.m.: Bell released a statement saying it welcomed the audit: "The City is well aware of the financial hurdles in its path. However, there is a strategy in place which addresses a number of the [auditors'] concerns. The strategy involves pending mitigations which are unaccountable at the time of the audit’s publication. City officials are working tirelessly through the courts system to receive financial settlements and restitution, and in the process of selling property, and working around the clock to put the City back in good financial standing."]
In March, a Los Angeles jury convicted five of six former council members of stealing from the working-class city.