Within the last week, the city of Compton was found to be out of compliance with Housing and Urban Development grant fund requirements. Part of the city’s responsibilities are submitting annual audited financial statements. The city has failed to do so since 2013. The city has paid $850,000 to catch up on audits which lack an official opinion.
2UrbanGirls also reported that the city received a letter where federal auditors will be at City Hall the week of August 9th to review Community Development Block Grant funds. Whatever happened to the city’s grant coordinator?
Why is the lack of an opinion, on the city’s audit, significant? A member of the community shared why.
The entire purpose of an audit is for an independent inspection to review an organization’s finances and give an opinion as to the soundness of that institution’s finances and those handling those finances. If an auditing firm gives no opinion, it would be equivalent of not doing an audit as the firm is not concluding if the organization is financially sound, if it’s records are in order, or if mismanagement of funds or outright fraud is being committed.
Dazed and Confused former Auditor with Arthur Anderson, Deloitte and Touche and Price Waterhouse