HERCULES, Calif. (CBS SF/AP) – State auditors are blasting the accounting records of a cash-strapped Contra Costa County city.

State Controller John Chiang said in a pair of audits released on Thursday that Hercules has the worst set of accounting records he has ever seen and may have to pay back $2 million in federal and state grants because of poor documentation.

Hercules is on the brink of bankruptcy and has laid off 40 percent of City Hall staff over the past year.

Mayor Dan Romero said the city did not misspend any state or federal funds. He blamed the bookkeeping problems on short staffing and turnover in the finance office.

The office is down to four employees from the previous nine and has its fourth director in less than three years.

KCBS’ Jeffrey Schaub Reports:

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)


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