The Morning Report
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The city of San Diego will collect nearly $1.1 million from a settlement it reached with the auditors it claimed failed to catch the financial reporting errors that have led to federal investigations and severe credit problems.
The City Council will be asked to approve the settlement at an upcoming meeting, the City Attorney’s Office said.
Originally, the city sought $100 million from auditors Caporicci & Larson and Calderon, Jahan & Osborn, as well as its former bond counsel, which has not yet resolved its portion of the case. The Caporicci and Calderon firms merged in 2003.
The city claimed that these auditors and attorneys certified past financial statements for the city despite the existence of inaccuracies. Those financial statements were used by the city to borrow over $1 billion for public projects.
Errors and omissions found in the financial disclosures have caused the city’s credit rating to be suspended and spurred investigations by the Justice Department and the Securities and Exchange Commission. The city is still attempting to get its credit rating restored so that it can once again borrow money for vital city projects.
The city also has malpractice lawsuits pending against the pension system’s former actuary and its financial advisors.