Organizers of Toronto's annual Caribana festival are upset they've lost government funding because of what they deem to be a financial auditing mix-up.

The City of Toronto has decided to cut funding for the Caribbean Cultural Committee (CCC), the traditional recipient of the grant, because officials say the organization has not filed proper financial statements for 2005.

The decision comes after the group was already given one deadline extension.

Coun. Joe Mihevc, the city's Caribana liaison, announced the decision last week. He said the CCC is disorganized.

Members of the CCC held a press conference Tuesday to try and explain their position. They denied being given any deadlines to submit a financial statement.

"During that period, I spoke with the auditor and the auditor said he could not produce any audited statement earlier than the end of February. That was communicated to Mr. Mihevc," Monica Pollard, CCC chairwoman, told reporters.

As a result, the city has invited the Toronto Mas Band Association (TMBA) to submit a bid to take over the festival and receive the government funding. The only thing the TMBA cannot use is the 'Caribana' title since that is owned by the CCC.

The TMBA has been given a deadline of March 31 to submit an application, business plan and festival management team, Sean Hill, Mihevc's executive assistant, told CTV.ca.

During a similar financial situation in 2002, the TMBA ran the August festival and turned a profit, Hill said. The association also filed a clean audit.

Despite the fracas, Caribana officials say their show will go on.

"We are telling you today, over our dead bodies, (that nobody will) take over this festival," Henry Gomez, CCC vice-chairman told reporters. "We are standing up for what is right."

Caribana, now in its 39th year, is one of Toronto's biggest annual tourist draws, but has run into financial difficulties in the past few years.

Last year the festival received almost $400,000 from the city, $400,000 from the province and $100,000 from the federal government.

With a report from CTV Toronto's Galit Solomon