The Morning Report
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In an interview with KPBS’ Tom Fudge this morning, Council President Scott Peters said he was “fundamentally distressed” over the city of San Diego’s continued inability to get auditing firm KPMG to sign off on its 2003 financial statements.
Peters suggested that it was time to speak with Congress regarding how the private-sector rules regarding financial reporting have been applied to San Diego in the post-Enron era. Following a model laid down in the wake of corporate America’s accounting scandals, the city has paid nearly $30 million in taxpayer funds to investigators in order to produce an independent investigative report that would satisfy KPMG, only to have the auditors continue to put off the release of the financial statements.
As the council president noted, the lengthy delay has costly implications for the city. In addition to consulting fees, it has been forced to borrow money privately at higher interest costs than it could on Wall Street and put off refinancing projects that could save millions a year.
He also continued to hint that some redress would be appropriate if KPMG doesn’t deliver soon. City officials haven’t openly advocated suing KPMG, but have begun to allude to such measures.
“At a certain point you have to ask for your money back,” Peters said, adding that “if we don’t get the product, we need to address the remedies.”