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.Of course, there's a reason for this:
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.
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.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.
S-and-P warns Compton is flush with red ink: the city has a deficit greater than $40 million dollars.
There are a lot of situations like this, in a lot of places other than California. Expect to see more of these stories.