San Bernardino Seal

By Ryan Hagen, The Sun
Posted: 03/17/15 – 6:41 PM PDT |

SAN BERNARDINO >> The city’s auditor revealed for the first time late Monday that it might be impossible to finish auditing the city’s financial statements in time for them to be used in a bankruptcy exit plan due May 30, potentially opening the city to crippling attacks by creditors.

Jim Godsey, a partner at Macias, Gini and O’Connell LLP accounting firm, said the serious problems that led him to request another $490,000 to finish the audits for fiscal years 2012-13 and 2013-14 — more than doubling the original cost estimate — had delayed the process, and further delays might be encountered later.

Godsey said the 2012-13 audit would probably be done by April 30, giving the city a month to build the accurate numbers from it into its Plan of Adjustment. The 2013-14 audit, though, might well not be ready by then.

That audit isn’t necessarily required by the charter committee, City Manager Allen Parker said, but he agreed with council members who said it would allow creditors to attack it as unprepared and undeserving of bankruptcy protection.

Without that protection, creditors will be able to collect the millions they’re owed, leaving too little for basic city services, said City Attorney Gary Saenz.

“If you don’t approve (the contract increase) tonight, I can probably guarantee we won’t make (the court’s deadline),” Saenz said. “That would be devastating for the city.”

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