COMPTON—City Treasurer Douglas Sanders has written his own letter to State Controller John Chiang, asking for a controller’s analysis of the independent auditor’s report so the cash-strapped city can resume line of credit talks.

Mayor Eric J. Perrodin sent a letter to Chiang alleging fraud, waste and abuse of city funds on Dec. 1, 2011, prompting audit firm Mayer Hoffman McCann PC to send a disclaimer of audit opinion, issued when the auditor will not present an opinion on financial statements because of missing information, along with the state-required single audit report, disqualifying the city from line of credit negotiations.

“Interim City Manager Lamont Ewell, City Con- troller Stephen Ajobiewe, and I began talks with Bank of the West about certain credit instruments in November 2011, which were critical to remaining solvent while the city makes contractually obligated payments for day-to-day expenses,” Sanders said. “I am disappointed with the auditors' findings because they do not provide me with a document that satisfies the requirements to reopen necessary discussions guaranteeing the city's cash management needs.”

Sanders said the controller’s analysis must outline the significance of its findings and potential impacts on shortand long-term consequences, and the options available to the city, including bankruptcy.

“The city must reverse the disclaimer of audit opinion finding or take corrective actions allowing the resumption of these critical financial discussions,” he said. “In your list of options curing the potential negative outcomes resulting from this report, I also ask that you indicate the timelines required to complete each of these actions.”

Perrodin said he cannot release his concerns to city officials because he fears a possible cover-up. The city’s audit firm, Mayer Hoffman McCann PC, also performed the annual report on Bell, where city officials and council members were arrested and charged with misappropriation of public funds.

The issue at hand, Sanders said, is cash flow.

“I expressed my concerns to Mayor Perrodin, Council members, and three city managers,” he said. “If the city cut its workforce by 90 percent it would not matter, because the low revenue received from June through December is not enough to pay these large bills. The line of credit was very important for the city.”

The allegations made by Perrodin have been vehemently denied by Council members Yvonne Arceneaux, Willie Jones and Janna Zurita, who also wrote letters to Chiang.

Interim City Manager Bryan Batiste said the city cannot give up.

“Our biggest problem is cash flow,” he said. “The city gets behind on its bills, but almost gets caught up after receiving its property taxes.”

The current system works because of the vendors, Batiste said, and the process has been in place for a long time.

“They work with us because they know our financial situation,” he said. “Most of them waive late fees as long as they get paid, but we still need to get our spending below current revenues.”

There is cautious optimism for the future, he said, but a daunting task lies ahead.

“I have faith that we can make it even though the light at the end of the tunnel is very dim,” he said. “We need to count our pennies and add them up.”

Batiste praised Sanders for his money management skills, but said at some point the city must stop using the “borrow from Peter to pay Paul” system.

State Controller Spokesman Jacob Roper told The Bulletin there is no timeframe in place to respond to any requests made by city officials.

Sanders told The Bulletin that he did not want to comment on the issue at this time.