- Associated Press - Thursday, February 12, 2015

SAN FRANCISCO (AP) - The California state controller will audit a San Francisco Bay Area government association after its former director of financial services was accused of embezzling from a fund meant for city infrastructure improvements.

State Controller Betty T. Yee announced Thursday that her staff will audit the Association of Bay Area Governments internal administrative and accounting controls following theft allegations. The audit will begin Feb. 20 and will take a few weeks.

The San Francisco city attorney’s office said the association’s financing authority agreed to use its own reserve funds to restore the missing $1.3 million.

The association has said it appears Clarke Howatt, its former director of financial services, created false documents and identities as part of a scheme to take the money. His attorney, Mary McNamara, said Howatt does not deny the embezzlement allegations and is cooperating with investigators.

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