By Jose Navarro, MBA | The Navarro Report
In October 2025, the California State Auditor reviewed three cities carrying high-risk designations — Calexico, Compton, and Richmond — and cleared two of them. Calexico and Richmond had made sufficient progress on prior audit recommendations to earn removal from the list. Compton had not. It remains designated a high-risk local government agency, and the State Auditor will continue to monitor it.
That sentence deserves more attention than it has received.
The high-risk designation is not a routine classification. The California State Auditor applies it specifically to cities whose financial conditions, administrative controls, or management practices pose documented risks to their ability to deliver services to residents. Being placed on the list requires a substantiated finding of significant problems. Staying on the list — after a review specifically designed to give cities an opportunity to demonstrate progress — means those problems have not been sufficiently resolved.
Compton’s history with the State Auditor’s office goes back to 2022, when a formal report found financial mismanagement and a lack of leadership that the office concluded had threatened the city’s ability to serve its public. The specific findings at that time included concerns about the city’s financial condition, administrative deficiencies, and the management of essential infrastructure including streets and the water system. The 2025 review — three years later — found that while Compton had made progress in several areas, significant risk areas remain. The Auditor’s recommendations still outstanding include developing funded plans to address the city’s poor street conditions by 2029, continuing work on water well operations with quarterly reporting to the city council, and completing projects included in a 2016 sewer system settlement agreement — a settlement reached a decade ago.
A financial controller reads a compliance timeline that includes a 2016 settlement agreement with items still outstanding in 2025 as a concrete measure of institutional follow-through. Not every audit finding can be resolved quickly. Infrastructure projects require funding, planning cycles, and contractor availability. But a sewer settlement from 2016 represents nine years of incomplete compliance, and it is the kind of finding that the State Auditor flags not because the project is hard but because the documented commitment to completing it has not been matched by documented action.
Compton is a city of roughly 100,000 residents, predominantly working-class, predominantly Latino and Black. It has also been one of the more financially scrutinized small cities in Los Angeles County for more than a decade — not because its problems are uniquely severe, but because the State Auditor’s high-risk program creates the documentation trail that makes the pattern visible over time. The residents who live with inadequate street conditions and aging water infrastructure are not abstract stakeholders in an audit finding. They are the people the audit program exists to protect.
What distinguishes Compton’s continued designation from a simple administrative delay is the comparison. Calexico and Richmond faced similar reviews, similar documentation requirements, and similar scrutiny. Both cleared the bar. The State Auditor determined their corrective action was satisfactory. Compton’s was not.
The audit program does not have enforcement authority. It can flag, report, and monitor. The next step requires the city’s own leadership to close the outstanding items, complete the infrastructure commitments, and build the internal controls that have been recommended for years. Until that happens, the State Auditor will keep watching. So will the 100,000 residents who have been waiting the longest.
Jose E. Navarro, MBA, is a financial controller and founder of The Navarro Report, a public finance and government accountability publication based in San Diego, California.
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