So you’ll remember that KPMG, the city of San Diego’s outside auditors, not long ago signed off on the city’s long-delayed 2003 Comprehensive Annual Financial Report, or CAFR. It was a touching moment to see all the city’s brass hugging each other and on the verge of tears.

It’s illustrative of the city’s condition that a routine and boring annual report like that can cause so much jubilation.

But KPMG also recently came out with another report that hasn’t been flogged in public as excitedly.

Here’s a taste:

We found that the City had inadequate policies, procedures, internal controls and personnel to ensure that an accurate and reliable CAFR was prepared and reviewed on a timely basis. Indicators of control deficiencies included our identification of material misstatements, the restatement of previously issued financial statements, the ineffective oversight of the City’s financial reporting and internal control by those charged with governance, an ineffective control environment, inadequate controls over the selection and application of accounting principles, inadequate controls over nonroutine and nonsystematic transactions, and inadequate controls over the period-end financial reporting process.

Quite titillating for you accountants out there I’m sure.

Here’s the rest of the “Independent Auditors Report on Internal Controls.”

The report contains a series of negative findings about city management and after most of them, recommends that the city do what the mayor says he’s planning on doing.

Stay tuned.


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