State Controller John Chiang's May 10 audit revealed Hercules failed to account for its use of $2 million in state and federal grant dollars during the 2009-2010 fiscal year.
The city of Hercules lost a $1.8 million grant from the California Natural Resources Agency this week on the heels of highly critical audit from State Controller John Chiang.
The nearly $2 million in grant money was slated for the financially embattled city's restoration of tidal marsh habitat in the roughly 12-acre Chelsea Wetlands near San Pablo Bay and the Pinole border, according to city documents.
Chiang's May 10 audit revealed the city failed to account for its use of $2 million in state and federal grant dollars during the 2009-2010 fiscal year.
Out of 107 documents requested for the state's review of city spending during that period, Hercules returned only 15, according to the controller's office.
That information prompted the state environmental agency to pull funding previously set aside for the wetlands project, agency spokesman Clark Blanchard said today.
"Unfortunately in light of the controller's audit, the Natural Resources Agency decided to exercise our option to terminate that grant," Blanchard said. "The state controller is basically our data agency, and when they tell us the city of Hercules lacks fiscal accountability, we take this seriously."
Hercules city staff did not return requests for comment Friday.