Guess which local municipality won awards from the Government
Finance Officers Association for excellence in financial reporting
16 straight years?
It's the same one that's the owner of an Award of Recognition
from the National Federation of Municipal Analysts for its
commitment to the kind of disclosure requirements that analysts
Need a hint? It's also the place where the county treasurer had
to resign after losing $2 billion making bad bets on interest
rates, jeopardizing county services and the jobs of county workers.
Yes, folks, it's Orange County, Calif., site of the nation's
largest municipal bankruptcy, where one wall in the reception area
at Orange County auditor-controller Steven Lewis' office is covered
with plaques attesting to the county's rectitude in matters of
The award-bedecked office was a strangely discordant background
when Lewis was served with lawsuits by a process server last week.
Still, neither the organizations that bestowed the awards nor
the accountants who certified the financial statements admit to any
sense of incongruity over the county's sterling financial reports
and its dismal financial performance. In fact, the county probably
will win the finance officers' association award again this year,
if the county's accountants ever finish their audit.
Auditor KPMG Peat Marwick suspended its work on the county's
audit for the fiscal year that ended June 30 this year and it may
not finish it until June 30 next year, said KPMG spokesman Kevin
Kelly. That's acceptable under the rules published by the
Governmental Accounting Standards Board, a privately funded
accounting standard-setting agency based in Norwalk, Conn.
Governments aren't required to publish their financial results
quarterly, the way companies are. Once a year is enough, and they
can wait a year to prepare them.
Kelly said that even though an audit is supposed to look at
what happened in the past, the audit of Orange County's 1994 fiscal
year has been suspended because of things that have happened since
the fiscal year ended: namely, the county's filing for bankruptcy
protection under Chapter 9 of the Bankruptcy Code.
"The audit has been suspended in light of the bankruptcy,"
Kelly said. "They have not been able to give us completed financial
Lewis didn't return phone calls seeking comment.
The finance association gave its Certificate of Achievement for
Excellence in Financial Reporting to 2,078 of the 2,168 governments
that applied for it in 1992, said Steven Gauthier, technical
director for the group. The award has been given since 1946.
After a while it becomes a rubber stamp. …