The Morning Report
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For more than two years, outside auditor KPMG has stood in the backdrop of the city’s financial picture, looming as a quiet and all-powerful player. Its blessing of the city’s financial statements has long been the key to restoring the city’s financial credibility.
And for those two years it has had a consistent and well-known answer for why it won’t release its vital audit of city finances: It has been awaiting the release of an independent investigation into allegations of wrongdoing.
That report was delivered finally this week, after three tries and more than $25 million in taxpayer dollars. But don’t count on that audit coming out just quite yet.
Although it has long been assumed that the investigative report issued by Kroll Inc. this week would trigger the audit, officials from KPMG issued only lukewarm and vague statements when asked about the report and its impact on the city’s financial status.
“Our goal here was to push the city to do the right thing,” said KPMG Managing Partner Steve DeVetter during Tuesday’s council meeting. He’d been asked if the findings of the investigative report that his firm had demanded were sufficient.
DeVetter continued: “We are anxious to see the city’s response to the report.”
Indeed, while the $20.3 million, 18-month probe by Kroll captured much of the public attention, city officials have been working behind the scenes to rectify a laundry list of accounting issues that at last count had led the city to devalue its total net worth by between $500 million and $600 million.
They will have a new task now, too, after the release of the Kroll report: a 54-step remediation plan. Mayor Jerry Sanders on Wednesday embraced in large part that plan in concept. But exactly what the Mayor’s Office will do with the recommendations and what final steps it will take to complete the audit won’t be made public until Aug. 24.
“What we will tell you is if your assessment isn’t good enough,” DeVetter said during Tuesday’s hearing.
Both Kroll and KPMG have noted that the city is still deficient in reconciling its bookkeeping.
So, it turns out there’s plenty more to be done than just this Kroll report. And KPMG declined to assess the Kroll report, saying that it was the city that hired the consultants and it was the city that would judge their report.