By Dave Bryan

STUDIO CITY ( — A new report has revealed the City of Los Angeles has been sitting on over $42 million accumulated over the last 17 years, left unspent during the worst recession in modern times.

While the city was laying off firefighters and teachers and pulling cops off the street, $42.6 million was ready for transfer into its general fund, used to pay city bills.

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KCAL9’s Dave Bryan reports it was only transferred this week after sitting in a special transportation fund where the money accumulated for over a decade and a half.

A report from the City of Los Angeles Department of Transportation’s General Manager confirmed the oversight, citing accounting errors.

City Council budget committee chairman Paul Krekorian told Bryan he was stunned to find out that while LA was in the grips of financial crisis, millions of dollars sat untouched in the Special Transportation Department GRANT Fund, never finding its way to the Los Angeles General Fund.

“I just find is shocking that for a decade and a half an accounting error could happen every year without anyone ever picking it up,” Krekorian said.

“These past few years have been some of the worst years in the history of the city in terms of providing services to our constituents in the wake of the Great Recession, and it sure would have been much easier if we had this $42 million.”

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Krekorian placed the blame with the Department general managers and the city controller, who he said should have caught and corrected the error much sooner.

LA City Controller Wendy Greuel disagrees. Greuel released a statement Thursday saying it’s the City Council that dropped the ball when her audits identified problems with the Transportation Department’s Special Fund – and they did nothing about it.

“As Controller, I have been concerned about the lack of accountability in the city’s Special Revenue Funds and have raised this issue repeatedly,” Greuel said.

“I am currently auditing the city’s 600 special funds, which include transportation grant funds,” she continued.

The issue now is caught up in the mayoral campaign with the election pitting Greuel against City Councilman Eric Garcetti only 12 days away.

Krekorian has endorsed Garcetti for mayor, and a spokesman for the Greuel campaign said his charges against the Controller are politically motivated.

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A spokesman for Garcetti said the City Council has no control over special funds, which he said are under the watch of the Controller and the Transportation Department general manager.