The City of Lodi has released the findings of two financial reviews, both concluding no fraud or misuse of funds amid months of scrutiny sparked by allegations from City Manager Scott Carney, who remains on paid administrative leave.

Officials recently presented the city’s Annual Comprehensive Financial Report (ACFR) for the fiscal year ending June 30, 2024, alongside the results of an independent investigation by financial assessor Kevin Harper. Both the ACFR audit, conducted by Lance, Soll & Lunghard, LLP, and Harper’s review found “no evidence of fraud, waste, or abuse in key areas,” including the city’s procurement card usage and utility deposit accounts.

Harper’s investigation, however, identified areas for improvement. While confirming no fraud, Harper recommended further accounting review of customer utility deposit accounts and stronger internal controls around procurement card use. Those findings align with broader concerns previously highlighted in a separate internal controls audit by Moss Adams LLP.

“We are proud that both the annual financial report and the independent investigation confirm the strong financial health and fiscal clarity of the City of Lodi, and validate that no taxpayer dollars were misused or attempted to be misused,” Mayor Cameron Bregman said in a news release.

The ACFR received an unmodified opinion — the highest level of assurance — for the City’s General and Streets Funds. Some enterprise funds received modified opinions due to past underreporting of unused holiday cash-outs to CalPERS, a discrepancy affecting up to 11 retirees. 

City staff are working to submit accurate data to CalPERS, and the financial impact is expected to be minor, according to the release.

The updates come as the city continues to investigate explosive claims made by Carney at an April 1 council meeting. He alleged that staff had tampered with official reports and misused city funds. Following the meeting, the council placed Carney on leave and hired the law firm Meyers Nave to conduct a personnel investigation, with a total contract value now at $260,000. 

In May, Lodi appointed James Lindsay, a retired city manager from Saratoga, to serve as interim city manager during Carney’s leave.