California's super-majority Democrat Legislature just passed, and the governor has signed, a "balanced budget" that looks like Orange County's before it filed for bankruptcy. It has been 25 years since "AA" credit-rated Orange County filed the world's largest municipal bankruptcy, following a $2.6-billion loss involving a failed leveraged borrowing scheme and accounting fraud.  But despite bankers, lawyers, and accountants paying $750 million for allegedly aiding OC risky taking, "AA" credit-rated California has not filed audited financials and is using leveraged borrowing to offset its $60-billion shortfall. Since about a third of the money lost in the OC bankruptcy involved federal grant program dollars, Congress tightened the A-128 Single Audit Act in 1996 to require all state and local recipients of federal grants to file an audited financial statement within six months of the fiscal year...(Read Full Post)