To Mr. Hebrank: The SDCERS 2003 financial statements were audited by the same firm that audited City’s 2003 CAFR. However, when KPMG reaudited the City’s 2003 CAFR it found more than $1 billion in errors requiring an astonishing 66 restatements and a reportable material weakness in financial reporting internal controls. Is it possible potential problems exist in the SDCERS 2003 CAFR? And, should the SDCERS 2003 CAFR be reaudited? If it is not reaudited will the financial statements for ’04, 05,’06 etc. be reliable?
As part of their re-audit of the city of San Diego’s June 30, 2003 CAFR, KPMG also performed an audit of SDCERS’ June 30, 2003 CAFR. SDCERS fully disclosed the restatements associated with KPMG’s audit in our June 30, 2004 CAFR, which can be viewed on our website at www.sdcers.org (look for Note 14 on page 69).
Because the necessary footwork was done to clean up the June 30, 2003 numbers, we are confident that all our subsequent CAFRs (we’re shooting to publish 2005, 2006 and 2007 by the end of this calendar year) will be completely accurate. But we aren’t just relying on KPMG’s work. SDCERS hires its own independent audit firm each year to audit our financial statements for accuracy prior to publishing our CAFR. Each CAFR contains the independent auditor’s report (for the June 30, 2004 CAFR, the report can be found on page 20).