City of Compton attempts to get their financial house in order

The city of Compton is taking the first steps towards re-establishing the city’s credit rating.  Agenda item #9, on January 9, 2018, council agenda, was for a contract totaling $850,000 to produce audits for FY’s 2013-2017.  It was also noted during the same council meeting that the finance department is short seven employees.

The last audit that an accounting firm attempted to sign off on was in 2011.  In July 2012 the city was warned about its failure to provide an audit that included an independent auditor’s opinion.  As a direct result, the city lost its credit rating, when both Standard & Poors & Moody suspended ratings of the city’s bonds.

auditors declined to provide an opinion on the city’s redevelopment agency’s audit,” S&P said. “The independent auditors wrote that due to allegations of waste, fraud, and abuse of public monies, as well as a lack of city responses to the auditors’ inquiries, the scope of their work did not enable them to express an opinion.

Related:  Compton Elections: City’s Credit Rating

Between 2012-2016 the city changed city managers and controllers nearly seven times.

In 2016 former city manager Roger Haley revealed the mayor and city council passed an overstated budget.

Related:  Compton finance department overstated 2015-16 budget numbers

By 2017 the city’s former deputy city treasurer was convicted of stealing nearly $4 million dollars over two decades.

Related:  Former Compton deputy treasurer cops a plea

2UrbanGirls has noted in multiple posts, that the city keeps residents in the dark about the city’s finances by having warrants issued directly out of the city managers/controller’s office out of the public eye.  Weekly council agendas include only a handful of warrants.

Related:  Compton residents remain in the dark over the city’s finances

The city manager is authorized to issue checks up to $25,000.  Those checks are never included on council agendas, yet, on the city council agenda for January 9, 2018, 3 warrants are listed totaling $4,020.31.  These expenditures could have been paid directly out of the city manager’s office and weren’t.

2UrbanGirls initiated public records request in 2016 for checks written under the city manager’s purview from January 2013 through December 31, 2015.

A review of the warrants shows a large number of checks being written to the city’s water department and zero to the city’s trash hauler, despite them changing in 2015.  City Hall insiders say a lawsuit could be imminent over the nonpayment of the trash collection fees.  The cost to obtain a copy of the city’s trash contract is $104.00.

City Hall insiders went further to state there are issues between City Manager Cecil Rhambo and City Treasurer Douglas Sanders over who should be monitoring the cameras in the treasurer’s office.

Accounting firm Eadie and Payne LLP was awarded $850,000 to audit the city for FY 2013-2017.  The firm found itself the subject of a state investigation after their 2016 audit of the city of Oxnard for FY 2014-15.

State Controller Betty Yee requested the audit of the accounting firm in July 2016 and was quoted:

I am concerned about Oxnard’s failure to timely file its single audit report, and others in the community have sounded alarms about the potentially precarious financial condition of the city,” said Yee in a statement.

Auditors were unable to complete the audit due to over 100 identifiable inconsistencies in their accounting and were unable to unravel which expenditures belonged to which project.  The finance department was having an internal meltdown that spilled into the local newspaper headlines.

Related:  More on the Oxnard Accounting meltdown

The city of Oxnard jubilantly issued a press release in September 2016 stating Yee’s office found that Eadie and Payne LLP satisfied federal reporting requirements for the 2015 single audit report it completed for the City of Oxnard.

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