San Bernardino, the bankrupt California city facing an inquiry by the U.S. Securities and Exchange Commission, masked its growing deficits by using funds meant for sewers, roads and construction to cover current expenses, according to city records.

In the year ended June 30, San Bernardino added $33 million to its $177.7 million general fund from a payroll trust fund and accounts designated for sewer-line maintenance, storm-drain constriction and other purposes, exhausting most of the special funds, according to a city budget document.

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