Lodi City Manager Investigation - July Update
Investigation Status: Still Ongoing
The investigation into Scott Carney's allegations is still in progress and has not been concluded as of July 2025. The Moss Adams report was released to the public in June. This report reviews the key public facts related to Scott Carney’s allegations and the Lodi City Government’s investigation, and then reviews the Moss Adams report and recommendations relative to Scott Carney’s allegations.
Carney's Original Allegations (April 1, 2025)
Scott Carney made several serious allegations during an April 1, 2025 city council meeting, including:
Widespread misuse of public funds and city credit cards for personal expenses[1]
Unauthorized alteration of staff reports by City Attorney Katie Lucchesi and City Clerk Olivia Nashed after he had approved them[1]
Document tampering to protect certain employees and hide financial disclosures[3]
Internal control deficiencies and material findings from annual audits[3]
Current Investigation Status
The investigation is ongoing and has been extended several times:
Third-Party Investigation: The city hired law firm Meyers Nave to conduct an independent investigation[4]
Budget Expansion: The contract with Meyers Nave has been expanded multiple times, with the total cost reaching $260,000 as of June 2025[5]
Timeline Extensions: While Mayor Cameron Bregman initially promised results within 45 days (by May 25, 2025)[7], the investigation has extended well beyond that timeframe[6]
Personnel Investigation: The investigation encompasses both the validity of Carney's allegations and potential disciplinary action against Carney himself[5]
No Findings Released Yet from Lodi City Government
Neither confirmation nor refutation of Carney's allegations has been publicly released by the Lodi City Government. . The investigation findings remain confidential, and the city has not disclosed whether the allegations have been substantiated or disproven[1][6].
Carney's Current Status
On paid administrative leave since April 9, 2025[1]
Potential lawsuit: Carney's attorney has indicated he may sue the city for alleged retaliation, claiming he was acting as a whistleblower[1]
Litigation hold: The city has been required to preserve all relevant documents and communications[1]
Recent Developments
Acting City Manager: James Lindsay was appointed as acting city manager in May 2025[4]
Moss Adams Report: A separate internal review by Moss Adams, LLP was presented in June 2025, highlighting financial control deficiencies and recommending improvements[6]
Ongoing Legal Proceedings: The city continues to meet in closed sessions regarding potential litigation[10]
Moss Adams Report Findings
Based on the available information, the Moss Adams report did validate several key aspects of Scott Carney's allegations regarding financial mismanagement and internal control deficiencies at the City of Lodi.
Key Findings That Validated Carney's Allegations
CAL-Card Misuse Confirmed
The Moss Adams report confirmed that city employees had misused CAL-Cards for unauthorized personal purchases[31]. This finding directly validates one of Carney's core allegations about credit card fraud and the potential misuse of public funds[31]. The report identified that city employees had been using CAL-Cards for personal purchases that were not authorized, which raises concerns of potential fraud and highlights the absence of a regulated purchasing environment[31].
Lack of Internal Controls
The report revealed significant deficiencies in financial oversight that align with Carney's claims about systemic problems:
No fraud reporting system: The city lacked a system for reporting potential fraud, waste, or abuse, which posed the risk that questionable activities might go uninvestigated[31]
Absence of internal audit function: The report noted that the lack of an internal audit function could lead to insufficient oversight, resulting in undetected errors, mismanagement, or fraudulent activities across departments[31]
Inadequate purchasing controls: The assessment found evidence of a lack of regulated purchasing environment and control deficiencies[1]
Financial Management Issues
The Moss Adams findings supported Carney's broader allegations about financial mismanagement:
Investment oversight problems: Currently, the city's investments are overseen by one employee, which Moss Adams said can pose several risks, including a lack of diversification and limited viewpoints[32]
Staffing inadequacies: The report identified insufficient staffing to handle various financial and administrative tasks[32]
Fleet management issues: The firm recommended evaluating the necessity of fleet vehicles and disposing of those no longer required[31]
Specific Moss Adams Recommendations
The report made several recommendations that directly address the issues Carney had raised:
Establish a fraud reporting hotline for employees, residents, and vendors to report suspicious activities confidentially[31]
Create an internal audit function with regular audit schedules across departments[31]
Enhance CAL-Card usage and review processes with pre-approval procedures, transaction limits, and regular audits[31]
Implement investment committee oversight instead of relying on a single employee[32]
Evaluate and improve staffing levels to ensure adequate financial controls[32]
Timing and Context
The Moss Adams report was completed in January 2025 and presented to the Lodi City Council in June 2025[31]. This timing is significant because:
Carney made his allegations in April 2025[31]
The Moss Adams assessment was initiated in September 2024, well before Carney's public statements[31]
The report's findings provided independent validation of financial control problems that Carney had identified
Validation of Carney's Whistleblower Claims
The Moss Adams findings lend credibility to Carney's position as a whistleblower, as the independent third-party assessment confirmed many of the same issues he had raised[31]. The report's documentation of actual CAL-Card misuse and systemic internal control deficiencies supports his allegations of widespread financial mismanagement[31].
JP Doucette, president and CEO of the Lodi Chamber of Commerce, stated that the report represents a significant step towards addressing the financial challenges facing the city's operations, noting that Moss Adams not only confirmed the existence of financial issues at City Hall but also provided a "road map" for rectifying structural weaknesses[32].
The Moss Adams report essentially served as objective validation of the core financial management and internal control issues that Scott Carney had alleged, providing independent confirmation of problems including credit card misuse, inadequate oversight, and systemic control deficiencies within the city's financial operations.
Sources
[1] Lodi faces potential lawsuit as city manager alleges retaliation https://stocktonia.org/news/local-government/2025/05/28/lodi-faces-potential-lawsuit-as-city-manager-alleges-retaliation/
[2] Lodi Manager Placed On Leave After Alleging Misuse of Public Funds https://www.californiacitynews.org/2025/04/lodi-manager-placed-leave-after-alleging-misuse-public-funds.html
[3] Lodi City Manager Drops Shocking Allegations at Public Meeting https://w.californiacitynews.org/2025/04/lodi-city-manager-drops-shocking-allegations-public-meeting.html
[4] Lodi appoints new acting city manager; investigation into claimed ... https://www.cbsnews.com/sacramento/news/lodi-new-acting-city-manager-misuse-of-city-funds-investigation/
[5] Lodi council set to vote on interim city manager amid personnel ... https://stocktonia.org/news/local-government/2025/05/06/lodi-council-vote-interim-city-manager-personnel-investigation/
[6] Will audit report serve as 'road map' for City of Lodi? - Yahoo https://www.yahoo.com/news/audit-report-serve-road-map-195300856.html
[7] Lodi special city council meeting canceled due to lack of quorum https://stocktonia.org/news/local-government/2025/05/22/lodi-special-city-council-meeting-canceled-due-to-lack-of-quorum/
[8] Lodi city manager may sue the city over alleged retaliation - YouTube https://www.youtube.com/watch?v=1Xu-yuMCyMA
[9] Lodi hires an acting city manager amid ongoing personnel ... https://stocktonia.org/news/local-government/2025/05/08/lodi-hires-an-acting-city-manager-amid-ongoing-personnel-investigation/
[10] [PDF] LODI CITY COUNCIL - SPECIAL https://www.lodi.gov/AgendaCenter/ViewFile/Agenda/_06102025-1845
[11] City Council Appoints Scott Carney as City Manager - City of Lodi https://www.lodi.gov/CivicAlerts.asp?AID=394&ARC=618
[12] [PDF] a resolution of the lodi city council appointing scott carney https://www.lodi.gov/DocumentCenter/View/8277/Scott-Carney-employment-agreement
[13] Lodi city manager on leave after alleging misuse of public funds https://www.youtube.com/watch?v=ERn5UryUVX0
[14] Meyers Nave Investigates… - Lodi 411 https://lodi411.com/lodi-eye/meyers-nave-investigates
[15] Lodi Manager Placed On Leave After Alleging Misuse of Public Funds https://awww.californiacitynews.org/2025/04/lodi-manager-placed-leave-after-alleging-misuse-public-funds.html
[16] City of Lodi releases new financial report - YouTube https://www.youtube.com/watch?v=VmwN1IopfTc
[17] Articles by Steve Mann's Profile | The (Toronto) Star, Lodi News ... https://muckrack.com/steve-mann-4/articles
[18] Fireworks show at Lodi Lake canceled due to warehouse explosion https://stocktonia.org/news/community/2025/07/02/fireworks-show-at-lodi-lake-canceled-due-to-warehouse-explosion/
[19] California DOJ Assists Lodi PD with Officer Incident Investigation https://cslea.com/2025/06/california-doj-assists-lodi-pd-with-officer-incident-investigation/
[20] 2024-2025 SAN JOAQUIN CIVIL GRAND JURY RELEASES FINAL ... https://www.sjcourts.org/2024-2025-san-joaquin-civil-grand-jury-releases-final-consolidated-report-and-selection-of-the-2025-2026-civil-grand-jury/
[21] Lodi city manager put on leave after alleging misuse of public funds https://stocktonia.org/news/local-government/2025/04/14/lodi-city-manager-put-on-leave-after-alleging-misuse-of-public-funds/
[22] Carney's Assistant Manager, Magee, Inexplicably Being Paid as ... https://209times.com/lodi/carneys-assistant-manager-magee-inexplicably-being-paid-as-consultant/
[23] [PDF] Workplace-Investigations.pdf - Meyers | Nave https://www.meyersnave.com/wp-content/uploads/Workplace-Investigations.pdf
[24] Lodi city manager placed on leave after alleging misappropriation of ... https://www.cbsnews.com/sacramento/news/lodi-city-manager-placed-on-leave-whistleblower/
[25] Lodi City Manager Drops Shocking Allegations at Public Meeting https://www.californiacitynews.org/2025/04/lodi-city-manager-drops-shocking-allegations-public-meeting.html
[26] [PDF] Lodi Central Plume Area – Imminent and Substantial Endangerment ... https://dtsc.ca.gov/wp-content/uploads/sites/31/2017/11/Lodi_ENF_SMBRP_ISE.pdf
[27] Lodi City Council selects parks and director as temporary ... - Yahoo https://www.yahoo.com/news/lodi-city-council-selects-parks-195100476.html
[28] File a Personnel Complaint | Lodi, CA https://www.lodi.gov/225/File-a-Personnel-Complaint
[29] 209 Times on Instagram: "Controversy in Lodi The Lodi City Council ... https://www.instagram.com/p/DIPaSKpTQJO/
[30] Lodi investigates 'widespread' misuse of public funds - ABC10 https://www.abc10.com/article/news/local/lodi/lodi-investigates-misuse-funds/103-5e2d3319-af3d-451f-b165-2d45a1e4ec23
[31] Council to receive results of internal audit - Yahoo https://www.yahoo.com/news/council-receive-results-internal-audit-195500028.html
[32] Will audit report serve as 'road map' for City of Lodi? - Yahoo https://www.yahoo.com/news/audit-report-serve-road-map-195300856.html