City's cost overruns for audit tripled

By Johnny Brannon
Advertiser Staff Writer

Cost overruns for an overdue city audit have tripled since March because officials did not provide accurate financial information to private accountants, according to an auditing firm.

The annual review of the city's financial records should cost an extra $152,000 because of the delays, PricewaterhouseCoopers contends in its latest billing invoice.

The audit was supposed to be completed by November and cost $209,000. The price was expected to rise by about $50,000 because of earlier problems.

If approved, the added $152,000 would represent a 72.7 percent cost overrun.

"We just don't have that kind of money laying around to waste," fumed City Council budget chairwoman Ann Kobayashi. "This is the third year in a row that the audit has been late and we're paying extra money."

Similar difficulties cost an extra $37,000 last year and $87,000 more in 2001, city records show.

The auditors found "significant discrepancies" in some information provided by city officials this year, according to the invoice. And "there were numerous revisions and delays by the city administration in completing the fixed asset audit schedules."

City deputy budget director Chris Diebling said much of the holdup was due to new national requirements that cities assess the value of thousands of infrastructure items, such as sewer lines, roads and buildings.

"It's just a major new undertaking, accounting-wise," he said. "Obviously there are going to be some hiccups with that."

Some $679 million worth of infrastructure was inventoried and assessed for the first time, including 2.9 million feet of storm drains that had to be measured, Diebling said.

"Our people have been putting in tons of extra hours to get a handle on this," he said. "It was a Herculean effort and we had our share of problems with it."

The invoice also says that "financial statements were not properly and thoroughly reviewed" by top city finance officials after an accountant prepared them, "which resulted in various errors and revisions identified by us."

Diebling said he was not familiar with that complaint and could not immediately comment.

The audit should be finished by the end of the month, he said.