San Diego’s City Council has approved paying another $2.2 million to KPMG for the Big Four firm’s long overdue 2003 audit. The additional spending approval brings the city’s total KPMG tab to $6.6. million.
It is the ninth time KPMG has asked the city for more money to complete its fiscal review, and follows the firm expressing confidence last week that it could finish the work by Dec. 22.
The council also approved paying more than $500,000 to accounting firm Macias, Gini & O'Connell for continued work on the city’s 2004 and 2005 audits, along with audits of the redevelopment agency and other projects required by state and federal governments. The council did, however, postpone an additional $890,000 that was sought for Macias to perform the city’s 2006 audit.
Concerns over the honesty of the city's financial statements has caused enough concern on Wall Street to cut the city off from borrowing there for overdue upgrades to the city's aging infrastructure.
The audits have been held up pending the conclusion of an internal investigation into San Diego's finances by the New York-based risk management firm Kroll Inc. Kroll's $20 million final report, delivered to the City Council in August, outlined numerous acts of wrongdoing related to San Diego's $1.4 billion pension fund shortfall and flawed financial reporting practices.
