California Controller John Chiang said that between 2005 and 2010, the city misspent its gas tax and redevelopment funds.
The controller's review found that the city improperly used the money for dinners in Las Vegas for the city manager, promotional items including notebooks, pens, flash drives and embroidered polo shirts and golf registration fees for city councilmembers.
The eastern Los Angeles County suburb of 65,000 has a multimillion-dollar budget deficit and could be broke this fall.
The U.S. Department of Housing and Urban Development found last year that the city had misused federal housing grant money for a project that was never completed. The agency is demanding the city repay $2.2 million.
The Associated Press contributed to this report.