One year down, three more to go.KPMG has approved San Diego’s financial statements for the city’s 2003 fiscal year, issuing a clean audit opinion letter last week. In the culmination of a three-year audit process, the Big Four firm issued 66 restatements -- covering wrongly recorded debt, property and investments -- that totaled nearly $1.8 billion.
It’s a major step towards restoring fiscal order for the city, which has seen its credit rating for general-obligation bonds plummet since 2002, delaying construction projects without the cash to fund them. The city can now turn its focus to its three remaining past-due annual audits, which are being handled by other firms.
In December, San Diego’s City Council approved paying another $2.2 million to KPMG for the 2003 audit -- bringing the city’s total tab with KPMG to $6.6 million. That spending approval was the ninth time KPMG asked the city for more money to complete its fiscal review.
Most of the problems stem from a period when San Diego allegedly hid financial obligations to retirees. In November, the Securities and Exchange Commission ordered the city to hire an independent financial consultant for the next three years, but didn’t levy fines.
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