05/11/2012 07:09 pm ET Updated Jul 11, 2012

State Controller: Hercules Financial Records Could Be 'Worst' He's Seen

A review by state auditors of how financially struggling Hercules handled its money during the final year of former city manager Nelson Oliva's tenure has concluded the city's accounting records were such a mess it was impossible to trace the expenditure of more than $2 million in state and federal funds.

In a report released today outlining a review of municipal financial transactions during the 2009-2010 fiscal year, state auditors said records related to the spending of state and federal grant money -- except for gasoline tax funds -- were "unauditable."

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