Mayor Jerry Sanders planned on having his completed KPMG audit in hand today. Instead, the 2003 financial statements Sanders would have liked to hold up as progress toward his goal of returning to Wall Street by June were instead held up by new questions about City Hall’s bookkeeping.

Jay Goldstone, the mayor’s chief financial officer, said the city received a 114-item list from KPMG of new concerns and questions about the 2003 audits this week. The new questions could further delay a process that’s been stalled since 2003.

He added that the outside auditor had not finished reviewing documents that the city had sent it weeks ago. KPMG has been “lagging,” he said.

“They said, by the end of October, they would have the opinion letter,” Goldstone said. “Now we’re learning that some of documents they’re just getting to now.”

Goldstone estimated that about 85 percent of the comments were ministerial or grammatical corrections, but that another 20 warranted significant work for the city.

“KPMG is correct with these questions, but why are they waiting until the last minute?” he said.

The news could delay the mayor’s target date for receiving the 2003 audits by about four to five weeks, Goldstone said. The timeline Sanders submitted months ago would have allowed the city to begin borrowing for infrastructure projects by June.

“That’s the risk you run throwing around dates when a lot of out of it is out of your control,” Goldstone said.

However, he said the city is trying to lessen the blow dealt by the KPMG delays by sending Macias, Gini & O’Connell, the city’s auditor for 2004, drafts of that year’s audit in order to allow the firm to continue its vetting process. The Macias firm can work for a while on a parallel track, but will ultimately have to account for the changes that the city makes because of KPMG’s comments, Goldstone said. (The 2004 and 2005 financial statements are also on hold pending the completion of the 2003 audit.)

A phone call to Steve DeVetter, who is handling the city of San Diego account for KPMG, was not returned by press time.


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