California’s financially distressed local governments can learn from top performers
Years after our country emerged from the Great Recession, several Southern California cities have failed to prepare for the next downturn.
In October, California State Auditor Elaine Howle published fiscal health scores for 471 California cities. She found that many were ill-prepared to cover rising pension and other post-employment benefit expenses: a condition that would worsen if a new recession depresses tax revenues and decimates pension fund assets.
The state auditor assigned Compton the lowest score due to its lack of financial disclosure. The most recent audited financial statement on the city’s website is for the fiscal year that ended June 30, 2013. A 2014 audit was published but later retracted after the independent certified public accounting firm withdrew its opinion. Unfortunately, had Compton been able to produce more recent audited financials its score would likely still have been relatively low. Unaudited data that the city provides to the state controller shows Compton has a negative general fund balance, which is roughly analogous to an overdraft on an individual’s checking account.
Continue Reading on The Orange County Register
You might be interested in
