Clifton Gunderson LLP will help Harrisburg with its overdue 2009 audit and its 2010 audit.

The Lancaster-based accounting firm beat out three other firms to assist Pennsylvania's capital city with a review of its finances.

Mayor Linda Thompson announced her selection Thursday.

The city could have the audits by early to mid-June, as the work should take six to seven weeks, according to the request for proposals.

Cities and states tend to complete their audits a few months after a fiscal or calendar year ends.

Harrisburg's fiscal year ends Dec. 31. Some speculate that Harrisburg's late 2009 audit prompted the Securities and Exchange Commission in November to request bond-related documents that the city provides to investors.

City officials point to understaffing as the reason for why Harrisburg's 2009 audit is so late.

Along with the audits, the city anticipates receiving by May 27 a fiscal recovery plan from the Novak Consulting Group.

That plan will offer a strategy for how the city can get out from under $242 million of outstanding incinerator plant debt that it guarantees but has failed to make debt service payments on.

The incinerator facility itself is unable to meet all of its principal and interest payments.

Holders of the incinerator debt have been paid from debt-service reserve funds, co-guarantor Dauphin County, and bond insurer Assured Guaranty Municipal Corp.

Harrisburg's liquidity is also low and the city had a difficult time in the last few months of 2010 meeting payroll and debt service costs on its general obligation bonds.

Some residents and City Council members have raised the possibility of a bankruptcy filing to help Harrisburg address its fiscal challenges.

Thompson has said that she opposes a potential Chapter 9 filing.

Cravath, Swaine, and Moore LLP earlier this month advised the City Council to negotiate an agreement with the stakeholders of the incinerator bonds before filing for Chapter 9.

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