San Bernardino Seal

By Ryan Hagen, The Sun
Posted: 06/26/15 – 2:47 PM PDT |

SAN BERNARDINO >> There’s more trouble for the city’s long-overdue audit, and it’s not because the city hasn’t given the necessary information, according to Deputy City Manager Nita McKay.

When the auditor first disclosed that the audited financial statements for the 2012-13 and 2013-14 fiscal years might not be finished by the May 30 deadline for the city to submit its bankruptcy exit plan, City Attorney Gary Saenz said failure to have those audits by the deadline would be “devastating for the city.”

In fact, the city filed its plan May 29 without the audits.

Their absence was not mentioned in the bankruptcy hearing following the filing. But the attorney representing bondholders, Vincent J. Mariott III, charged at that hearing that the city hadn’t fulfilled the purpose of the deadline because it hadn’t proposed a hearing date to determine the adequacy of its financial disclosure statement at the same time it filed the plan.

A bankrupt entity normally would have proposed that date to keep momentum in the case, said U.S. Bankruptcy Judge Meredith Jury, and she set the hearing date for Oct. 8.

The city’s auditor — Macias, Gini and O’Connell LLP accounting firm, or MGO — said six weeks ago that within eight weeks they would complete the 2012-13 audit (which was already a year late), said McKay, who oversees finances for the city.

McKay’s email provided no word on the 2013-14 audit, which was due in March.

At the end of each week since then, according to McKay, MGO has said they anticipate satisfactory audit progress as long as the city provides information in a timely manner as the city has been doing.

“As indicated in the quote (from MGO) above, City staff has responded to all audit inquiries in a timely manner,” Mckay wrote in an email sent to the City Council Thursday night.

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