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State Agency Files Formal Complaint Against City of Irvine’s Auditor for its Work on Discredited Great Park Audit

California Board of Accountancy that protects the public from violations of accounting laws and regulations to conduct a hearing concerning a formal complaint filed against the City of Irvine’s accounting firm

SAN DIEGO, CA (January 16, 2018) – The City of Irvine’s accounting firm Hagen, Streiff, Newton & Oshiro, Accountants, PC (“HSNO”) disseminated false information, committed repeated acts of negligence, and failed to comply with professional standards in its review of the Orange County Great Park, according to a formal complaint filed before the California Board of Accountancy Department of Consumer Affairs (“Board of Accountancy”). This action is a result of a complaint Gafcon Inc. filed with the Board of Accountancy in 2014 demanding HSNO completely exonerate the company from false allegations contained in a preliminary report presented to the City and the Public by HSNO on the Great Park project.

In 2013, the Irvine City Council formed a two-member audit subcommittee consisting of Christina Shea and Jeff Lalloway to conduct a “forensic audit” of $250 million of Great Park expenditures and the contracts of the companies working on the Great Park project. Gafcon, a construction management firm, was a key member of the Great Park Design Studio that oversaw the Great Park’s Master Plan and design preparation work. The audit committee hired consultants, including HSNO, to perform the audit and issue two reports. Both reports were widely criticized by the media and the public as having numerous factual inaccuracies, incorrect assumptions, and speculative conclusions.

In 2016, the California State Auditor also issued an independent investigative report which criticized the City of Irvine and its audit subcommittee for exercising poor governance during the audit of the Great Park and not following appropriate industry standards which “needlessly compromised” the audit’s credibility.
>> read complete press release


California State Auditor Releases Report Criticizing City of Irvine’s Poor Governance of $1.7 Million Review of the Orange County Great Park

CSA website

Independent State Investigation Finds Flaws in the City’s Audit Process Compromised Audit’s Credibility

SAN DIEGO, CA (August 9, 2016) – The City of Irvine exercised “poor governance” in its $1.7 million review of the Orange County Great Park project, according to a report released today by the California State Auditor. After a yearlong investigation of the audit, the agency concluded that the City of Irvine failed to conduct an independent audit of the contractors involved in the Great Park and did not follow appropriate industry standards, which “needlessly compromised” the audit’s credibility.

audit

“The City did not ensure that the park review was conducted according to the most appropriate industry standards for achieving the City’s goals, which would have ensured an independent and more rigorous review,” the California State Auditor stated in a fact sheet on the report. “Irvine’s disjointed contract management allowed two consultants to duplicate work, commence work prior to receiving final approvals, and to work beyond the authorized amounts of their respective contracts, which led to cost overruns.”

The report released today represents the culmination of the formal state audit process, approved last year by the Joint Committee on Legislative Audit of the California Legislature at the bipartisan request of several state legislators. These legislators were seeking an independent review of the City of Irvine’s audit process for reviewing the Orange County Great Park after members of the public, City staff and businesses involved with the project brought to light several inaccuracies in preliminary reports and findings.
>> read gafcon’s complete statement

City’s Auditor HSNO Withdraws its 2014 Great Park Audit

2014 audit withdrawn

The so-called “audit” report released in January 2014 by the accounting firm known as Hagen, Streiff, Newton & Oshiro, Accountants, PC (HSNO) was withdrawn by HSNO on March 24, 2015. The “audit” contained numerous factual inaccuracies, incorrect assumptions, false findings and speculative preliminary conclusions. Much of the report was not based on facts and offered little evidence, and its findings were easily refuted, as is clearly shown by the videos we have prepared and provided below. Beyond that, there was no precedent in audit and attest standards for the release of the January 2014 preliminary “audit” report per the American Institute of CPAs (AICPA).

The City of Irvine spent approximately $1.5 million and nearly two years on the “audit” of the Great Park that has not produced a single, tangible, evidence-based result of wrongdoing on the part of the Design Studio or Gafcon. Continual questions about the legitimacy and transparency of this audit have been raised by elected officials, a former city auditor, media, community members and Great Park contractors, yet the City has ignored these concerns and refused to publicly respond to these issues.

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Despite these problems, we have gone out of our way to cooperate with every request by the City, providing all documentation requested by the City’s Special Counsel, as well as a full video and written rebuttal that disprove each preliminary report allegation brought against our company and the Design Studio. Our efforts have been met with accusations, disregard and even baseless legal threats as scare tactics, when all we have done is try to sustain and preserve our outstanding public reputation in the face of such a biased report. We are appalled that the City has refused to come forward and apologize for the misinformation released regarding the Great Park project, the Design Studio and Gafcon’s role as a design administrator for development of the Park’s Master Plan and Schematic Design. Link to PDF: Please see page one, third paragraph, last sentence for statement of withdrawal of the January 2014 audit.

Introduction

Welcome to Great Park Truth, a website established to provide accurate information about the design work of the Great Park Design Studio. The videos you are about to see will refute the city’s 2014 investigation conducted by the accounting firm known as HSNO. The videos have been placed numerical order to help you learn the truth.

The truth lies in the City Council and Great Park Corporation Board meetings. The good news is that to ensure transparency the City records the City Council Meetings and Great Park Board meetings and then posts those videos on its website. The Great Park Truth videos reflect a review of 10 years of meetings and documents to learn the truth about the City’s latest investigation.


1. Prologue

Did You Know?

The Design Studio was not responsible for the construction of the Great Park. The Design Studio was only responsible for the design of the Master Plan and Schematic Design.

Read More –>>

Video Reference Guide

To refute HSNO’s allegations, hundreds of hours of Irvine City Council and Great Park Corporation Board Meeting videos and documents were reviewed.

Please view the Video Reference Guide to see a complete list of videos used on this website.

>>


2. Background

The City Council and Great Park Corporation Board created a large bureaucracy with multiple levels of oversight to ensure the park planning and design was performed at a high standard with strong fiscal responsibility. This video takes a close look at the City’s oversight and the role of Bovis Lend Lease, the program manager who was responsible for reviewing all of the work and invoices of the Design Studio and its subcontractors.


3. Oversight

Comment

Please leave us a comment. We look forward to hearing from you. >>


4. Video Guide

Videos

This website features videos from the City Council and Great Park Board meetings. The footage reflects 10 years of meetings and documents, and the truth about the City’s latest investigation. These videos are available on the City of Irvine’s website, and we invite you to review them first hand to see how these issues are addressed. Each clip used is cited in the video’s reference guide to allow you to see the full video for yourself and we’ve included link’s to all the original City videos. >>

What You Will Find

When you watch the videos, you will find there were multiple levels of oversight that ensured responsibility and transparency on the project. You will see the control an oversight exercised by the City Council, the City staff, Great Park Corporation Board, the Corporation staff, and the Program Manager Bovis Lend Lease over the project. And, most importantly, you will see the truth.


5. Vetting

Did you know?

Gafcon and its partner successfully completed the Port of LA San Pedro Waterfront Master Plan and was recognized for its outstanding work on the project.

HSNO alleges that the City of Irvine failed to comply with its own policies with respect to the selection of Gafcon as a part of the Design Studio. In its preliminary audit, HSNO makes several allegations. The first allegation is that Gafcon was not vetted by the City. This is false. Please watch as Council Member Shea describes her own personal vetting of Gafcon.

The Design Studio completed the Master Plan process in a tightly compressed timeframe. Gafcon provided Design Administration to over 18 consultants who worked to complete the award winning and innovative design.


6. Master Plan

Awards

Master Designer Ken Smith and his team received numerous design awards. Their work was recognized by the American Institute of Architects, American Society of Landscape Architects, the American Planning Association and more >>


7. Schematic Design

After seven months of negotiations (over 30 meetings) with the City and Corporation, the Schematic Design contract was approved by the Great Park Corporation and Irvine City Council. The Program Manager Bovis Lend Lease performed “over the shoulder” review of all of the Design Studio’s work.

Did you know?

For Contract 2 – Schematic Design, Gafcon provided Design Administration for a team of 42 architecture and design firms that produced:

  • 2,335 pages of Landscape Plans and documents.
  • 14,882 pages of engineering plans and documents.
  • 1,117 pages of plans and reports by ecologists, lighting designers, water feature design firms, and more.
  • 81 physical scale models.
  • Hundreds of renderings used by the Corporation at meetings and presentations.

Once the Design Studio had delivered the Schematic Design, the Great Park Corporation asked the Design Studio to perform additional services for a 100 days period while the project was transitioned to a new architect and first phase of construction was started. These additional services were contain in a document called “Change Order 35″.

Did you know?

The City engaged two highly respected industry experts to provide independent opinions and validate the Design Studio contract fees for the Schematic Design. Both experts said that the fees were favorable to the City.


8. Change Order 35

HSNO alleges that Gafcon did not want to cooperate with the audit. This is simply false. Gafcon repeatedly informed HSNO that it was pleased to cooperate with the investigation. Considering the massive scale of this project and that it started in 2006, Gafcon believed that it was only reasonable for HSNO to provide it with some notice of areas of interest so that Gafcon could provide complete answers.


9. Cooperation with Investigation

Did you know?

Gafcon and its attorneys have provided the City with roughly 8,375 documents, which translates into 35,142 pages, compiled from the records of Great Park Design Studio executives and staff in response to requests from the audit attorney.

Video Reference Guide

To refute HSNO’s allegations, hundreds of hours of Irvine City Council and Great Park Corporation Board Meeting videos and documents were reviewed.
Please view the Video Reference Guide to see a complete list of videos used on this website. >>

As you watch the videos on this website, you will see that each of HSNO’s allegations against the Great Park Design Studio and Gafcon have been proven false by the words and documentation of the Great Park Corporation, the Irvine City Council and the very same officials who are now supporting the audit. Moreover, the audit conducted by HSNO is repetitive of the previous audits performed on the Great Park project, as well as the daily management and oversight by the Program Manager, Bovis Lend Lease.


10. Why is the Design Studio Being Investigated?