The California State Controller’s Office began their audit Thursday, evaluating Stockton’s existing internal control system for conducting its operations between July 1, 2023, through Dec. 31, 2025.
The audit aims to determine if the existing policies and procedures designed to safeguard public funds, ensure accurate financial reporting and detect or prevent errors and fraud are working.
In a letter to Stockton City Manager Johnny Ford, audit manager with the SCO local government audits bureau Michael Cheng explained that if the information gathered during the review merits further examination, the scope may expand to include prior years and potentially the current fiscal year.
An entrance conference is scheduled for Thursday, at 10:00 a.m. via Microsoft Teams. Fieldwork is expected to begin immediately afterward and take about eight to 12 weeks to complete.
The city is asked to provide working accommodations for SCO staff and to furnish necessary records and documentation throughout the process.
Copies of the letter were sent to several city officials, including Deputy City Managers Will Crew and Christine Tien, Mayor Christina Fugazi, Vice Mayor Jason Lee, the five remaining councilmembers, City Clerk Katherine Roland, Acting City Attorney Taryn Jones, and key SCO personnel.
This development follows months of concerns raised about Stockton’s financial management and oversight.
In November 2025, Vice Mayor Jason Lee, who chairs the City Council’s Audit Committee, sent a formal letter to the State Controller’s Office requesting a comprehensive audit. Lee cited serious risks to fiscal stability, including prolonged vacancies in key financial roles such as chief financial officer, procurement director, auditor and budget officer.
He described the situation as “a bank with the back door left open and no one watching it,” pointing to alleged internal control breakdowns, unauthorized commitments of public funds, improper procurement practices, unapproved budget modifications, and hiring practices that deviated from established policies. There have also been established payroll errors.
The request came after a city Council special meeting on November 12, 2025, where members unanimously voted to refer the allegations of potential misconduct to the California Attorney General, San Joaquin County District Attorney and county Civil Grand Jury for review. Those concerns included former interim City Manager Steve Colangelo’s commitment without council approval of city funds to support a nonprofit’s state grant application.
In a December 9, 2025, news release, Lee announced that the SCO had verbally confirmed plans to proceed with an investigation and would send written notice to the city. At that time, the SCO had not yet publicly detailed the audit to local media.
Stockton has a history with SCO audits. Following the city’s 2012 bankruptcy, a 2013 review by the office identified significant weaknesses in accounting and administrative controls, noting a high potential for waste, fraud, and abuse due to numerous deficiencies.
Want more? Sign up to get Stocktonia delivered to your inbox three days a week.