Wednesday, July 18, 2012

Straight Outta Compton

Forget NWA -- when it comes to Compton, the acronym you need to remember is IOU:

Financial troubles are surfacing in another California city: Compton, just south of Los Angeles, is in trouble. Just like Stockton, Mammoth Lakes and San Bernardino, Compton's bills are too big and its income too small.

Last week, Standard and Poor's, Compton's credit rating agency, put the some of the city's bonds on credit watch. S-and-P cited problems with alleged waste, fraud and misuse of city dollars, and blamed city officials for failing to turn over documents that might clear up questions.
Of course, there's a reason for this:
Now the agency wants the city to complete an independently audited financial statement. But that's going to be harder to get, according to the Los Angeles Times. Compton's independent auditor quit and would not approve the city's financial statements. It's not clear if another auditor was hired.

S-and-P warns Compton is flush with red ink: the city has a deficit greater than $40 million dollars.
So what is happening in Compton? Hard to know without a look at the books, but to have four cities in California essentially go belly up tells you that there are a lot of problems, with the biggest being independent oversight. A true audit would likely reveal that someone in the city government had their hand in the till; maybe more than one person. And because (a) larceny is part of the human heart and (b) omerta isn't just for ganstas any more, the result is what you see.

There are a lot of situations like this, in a lot of places other than California. Expect to see more of these stories.


Gino said...

its compton. yes, somebody's hands were in the till.

compton school district went bk some yrs ago and lost its charter to operate.
you be shocked to see who was on the payroll for doing nothing, and who's kids, brothers, etc... had gravy contracts for services.

its a very corrupt town, from the gangstas on the streets to the gangstas in city hall.

Bike Bubba said...

Spent a lot of time in Compton in 1994 and 1995--my church had an outreach there. Personally, knowing the place a little, I don't know what took them so long to go bankrupt. It's not like the place has been friendly to taxpayers (or anyone who doesn't like to get shot) for about 40 years, after all.

Jennifer Birks said...

You're right. This no longer a new story.

If independent dygtig revisor was hired already, this will likely fix and determine the cause of the financial troubles.