Los Angeles’ top financial watchdog is warning of growing risks as the city faces mounting budget pressure and limited oversight.
L.A. City Controller Kenneth Mejia says his office is stretched thin, with just a handful of investigators responsible for tracking fraud, waste, and abuse across a $45 billion city budget.
“Right now, we only have 5 fraud, waste, and abuse investigators for the entire city,” Mejia said, adding that his team receives around 800 complaints each year.
He warned that staffing shortages mean many cases can’t be independently reviewed. “What ends up happening is… we have to push it back to the department themselves to investigate themselves,” Mejia said. “That’s what people don’t want.”
The warning comes as city officials raise new concerns about Mayor Karen Bass’ proposed $14.85 billion budget, which relies on stronger-than-expected revenues but leaves little room for expanded services.
Budget officials say much of the city’s revenue growth is already committed, primarily to salaries, pensions and benefits. And future risks could wipe out nearly $1 billion in funding if certain ballot measures pass.
Even without those threats, the city faces a projected structural deficit in the coming years, with rising labor costs expected to outpace revenue growth.
Mejia says some of the city’s biggest financial pressures come from long-standing spending patterns.
He points to costly lawsuits, especially involving police and infrastructure issues like sidewalks and potholes, as a major drain on city finances. He also highlights rising overtime costs across departments and spending tied to large agencies like the Los Angeles Department of Water and Power as key areas that need closer scrutiny.
With more auditors, Mejia says his office would prioritize digging deeper into those high-cost areas to identify inefficiencies and potential savings.
Mejia says that kind of financial strain makes oversight even more critical. “If we don’t get to these claims… then we’ll keep losing money,” he said.
His office recently identified $80.4 million in idle city funds sitting unused across 177 special accounts. He says that’s money that hasn’t been touched in at least two years. The funds are earmarked for key areas like community safety, parks, housing, and homelessness. Still, Mejia says they could be strategically used now to help close budget gaps during a tough fiscal year. He’s urging city leaders to tap these underutilized dollars as a one-time funding source, repay reserves, and implement long-term policy changes to prevent funds from sitting idle in the future.
He’s asking for more auditors and investigators, arguing the investment would help prevent losses and fix systemic issues before they grow.
“We want to make sure that we have enough staff to sufficiently and independently review each thing… to fix the issue at the root cause,” Mejia said. “But until then, we are acting in a very reactive mode, and we’re not proactive. And so you want to get to that proactive level.”
With budget hearings ongoing, Mejia says the decision now rests with the City Council and that taxpayers should pay attention.
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