The iconic balloon at the Orange County Great Park.

The California Board of Accountancy issued a scathing report on two separate audits of spending and contracts for Irvine’s Great Park and is recommending the accountant firm that performed the audits have its license suspended.

An attorney for the accounting firm strongly denied the accusations. But former Irvine Mayor Larry Agran, whose political career was damaged by the Great Park audits said “for heaven’s sakes, if you can’t trust auditors to be honest and straightforward, then who can the public trust?”  

Agran was on the City Council and the Great Park Board of Directors during the time of the first audit and was criticized by the city-hired auditors for underestimating the cost of developing the Great Park.

The Irvine-based accountant firm, Hagen, Streiff, Newton & Oshiro (HSNO) reviewed spending and Great Park development contracts awarded between July 2005 and the end of 2012. The firm released the audits in two phases: the first in January 2014 and the second in March 2015.

The city spent over $1.4 million on the audits that examined why more than $250 million was spent to develop 88 of the Great Park’s 1,300 acres.

Mayor Pro Tem Christina Shea defended the audits Tuesday evening and said Gafcon, one of the Great Park contractors the accounting firm dinged in their audits, was trying to exonerate itself. Gafcon filed a complaint with the California Board of Accountancy (CBA) nearly three years ago.

“It’s just another political operation to justify what they did at the Great Park,” Shea said. “I think they’re just doing everything they can to exonerate themselves … we stand behind our audit, the city does and I do.”

According to the California Board of Accountancy report that was released Friday afternoon, the HSNO accountant firm violated numerous public accounting standards. There aren’t any criminal findings in the report, but the board is recommending HSNO reimburse the state an unspecified amount for the cost of the over two-year long Board of Accountancy investigation and pay an administrative penalty. It’s also recommended HSNO and its lead accountant in the audits have their accounting licenses revoked, suspended or restricted.

The California Board of Accountancy is responsible for regulating over 97,000 accounting licenses of both firms and individuals. The board also sets statewide industry standards.

One finding by HSNO said $38 million was missing from the Great Park’s funds, but that was disputed by city staff at the January 2014 City Council meeting. HSNO’s Chris Money was the lead accountant in both audits.

“A city employee recounted her conversation with Respondent Money that Respondent HSNO’s analysis of this issue was outside its scope of contract, and informed the City Council that the money was in a required RDA (Redevelopment Agency) set-aside account. Respondent Money agreed that explanation was ‘perfectly good,’” the CBA report reads.

HSNO withdrew its first audit in March 2015, when it issued its second audit report.

Money didn’t comment on the state Board of Accountancy report and referred Voice of OC to the firm’s Los Angeles-based attorney, Randall Dean.

“Hagen, Streiff, Newton & Oshiro (HSNO) and Mr. Money strongly disagree with the State Board’s Accusation, as they appropriately completed the engagements with the City of Irvine in accordance with professional standards. HSNO and Mr. Money look forward to presenting their case and being fully vindicated,” Dean wrote in an email

The CBA report also found problems with HSNO’s claims that Agran misled the public on the true cost of developing the Great Park.

“…HSNO faulted Mr. Agran for asserting that the Great Park ‘could be built for $401 million.’ But, Mr. Agran did not state that the Great Park ‘could be built for $401 million,’” reads the CBA report.

Agran was critical of the HSNO’s audits and largely attributes the firm’s “misconduct” and “incompetence” to his unsuccessful bid for City Council reelection in 2014.

“What are these guys going after me for? It was obviously intended to be a political hatchet job from the beginning and that’s what it was,” Agran said. “It was very damaging” to his 2014 re-election campaign, which he lost.

This isn’t the first time criticism has been leveled against the audit process of the Great Park spending. In August 2016, California Auditor Elaine Howle’s office released a report which said the audit process were haunted by poor governance from the city, the subcommittee failed to enforce auditing standards and said city officials failed to enforce the industry standards to ensure an impartial analysis.  

Howle’s report also found Irvine didn’t follow its policies in choosing the accounting firm and found “little evidence that the subcommittee that oversaw both phases of the performance review of Great Park contracts added value. As a result, Irvine spent about $1.7 million related to the park review in a manner that compromised the review’s credibility.”

Part of the $1.7 million cost is for Irvine-based law firm Aleshire & Wynder, which helped with the second phase of the audit and issued its own report. The CBA report didn’t address any of the law firm’s claims, instead focusing only on HSNO’s two audits.

The two-member city council subcommittee that oversaw both phases of the HSNO review of Great Park contracts was made up of Shea and Councilman Jeff Lalloway. Lalloway couldn’t be reached for comment as of Tuesday evening.

Lalloway was critical of Aleshire & Wynder’s billing practices at the September 2015 Great Park Board Meeting after the firm asked for an additional $100,000 from the city. The costs of the audit went from $240,000 to $1.7 million.  

Agran accused Shea on Tuesday of orchestrating the HSNO audit which led to findings that ultimately sank his reelection chances in 2014. He said the CBA report, along with the auditor’s 2016 report, helps back up his claim that the Great Park audits were intended as a political assassination against him.  

“Evidently, this was what it appeared to be at the start — a political hatchet job engineered by Christina Shea,” Agran said, adding that all funds and contracts were accounted for, despite auditor’s findings.

“Again, you might have disagreed with various park policies and programs, but all of those were authorized by the full board and there were no unauthorized expenditures or unaccounted for funds. Not one single penny,” Agran said.

But Shea said Agran and the Great Park contractors brought the audit on themselves by spending $250 million on the park with little to show for it.

“The people who were directing a hatchet job were Larry Agran and the people at the Great Park spending $250 million,” Shea said Tuesday night. “Larry was hiring so many consultants doing duplicate work. So his criticism is quite humorous at best. I mean he’s the one that wasted all the money, so I can’t see why he thinks we’re the problem … We were just trying to find out where it went.”

Shea said she and the city stand by the audit and Howle’s report didn’t criticize the audit findings, but some of the city processes behind it —  the city addressed some of the findings and some of which, “we didn’t agree with.”

“They (Howle’s office) never criticized the audit itself. They talked about correcting certain processes in the city, but they never criticized the findings of the audit.”

Additionally, the new California Board of Accountancy report said the city’s accounting firm made a false conclusion about the vetting process for one of the Great Park development contractors, San Diego-based Gafcon.

In its audit, HSNO said the city failed to properly review Gafcon. But the CBA report said the firm didn’t collect enough data to show “that City of Irvine policy was not followed” and the lead auditor later told the board that Irvine policy doesn’t require a reference check.

“In Fact, Respondent Money also informed the CBA that the City of Irvine’s policy did not require Gafcon’s references to be checked,” reads the report, which goes on to state in 2013 city staff couldn’t locate the reference file from 2005 and “HSNO assumed that Gafcon’s references had not been checked … HSNO’s conclusion, however, was contradicted by data in its own files.”

Gafcon first requested the CBA examine the audits in 2014.

“… we are pleased that the California Board of Accountancy has investigated our complaint and has decided to file a formal complaint against the City of Irvine’s accounting firm. We have always maintained that the audit was severely compromised,” Gafcon CEO Yehudi Gaffen said in a Tuesday press release.  

The company has a website that it says disputes the findings in the audits, and even has a video documentary about the audits.

Spencer Custodio is a Voice of OC reporter who covers south Orange County and Fullerton. You can reach him at

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