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Costs mounting as city tries to finish audit: stringent regulatory mandates partly to blame as tally climbs to $26m.

Article Excerpt
Making sense of the bills paid to consultants hired by the city of San Diego to resolve its billion-dollar pension scandal is like falling into a pit of quicksand. The more you move around, the deeper it gets.

Earlier this month, the City Council approved an additional $10 million be paid to Kroll Inc., a New York-based risk management firm and the city's de facto audit committee, to complete an investigation into the city's pension mess. The city needs to produce an outside report on the pension problem to satisfy outside auditor, KPMG, that the accounting firm is not culpable for errors and mistakes made in the past. The firm has told the city it can't sign off on annual audits for three previous fiscal years until the Kroll audit is done.

And without the annual audits, the city cannot issue municipal bonds to pay for now dormant projects such as sewer and water upgrades.

Elected city officials wring their hands publicly about the escalating costs for outside...

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