July 16 (Reuters) - Standard & Poor’s Ratings Service late on Friday said it may cut Compton, California’s BB long-term and underlying ratings for its lease revenue bonds, according to the rating agency’s website.
“The CreditWatch placement reflects that the independent auditors of the city’s recently released fiscal year 2011 audit declined to express an opinion on the financial statements,” S&P’s credit analyst Matthew Reining said.
“The independent auditor wrote that due to allegations of waste, fraud, and abuse of public moneys, as well as a lack of city responses to the auditors’ inquiries, that the scope of their work did not enable them to express an opinion,” he said.
If S&P fails to receive sufficient independently audited financial information from the city, it could withdraw or suspend the ratings, it said in a statement.
Compton, California, is located 16 miles south of Los Angeles.