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Bell, California, Accounting Firm Audits `Rubberstamp,' Controller Says
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Audits of Bell, California, the city that paid its former manager almost $800,000 a year, were
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a “rubberstamp” by its accounting firm, state Controller John Chiang said after an review.
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Mayer Hoffman McCann PC’s Irvine, California, office failed to follow “generally accepted
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fieldwork audit standards,” said Chiang, whose office last month found the city unlawfully spent at least $710,000 in state and federal funds. Eight current and former officials were
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arrested and charged with misappropriating public funds in September. City Manager Robert Rizzo and two other officials resigned July 22 after the Los Angeles Times reported that they were paid a collective $1.6 million annually. Bell is a town of 36,000 people south of Los Angeles in which one in four residents lives below the poverty line, according to the Census Bureau. Mayer Hoffman “appears to have been a rubberstamp rather than a responsible auditor committed to providing the public with the transparency and accountability that could have prevented the mismanagement of the city’s finances,” Chiang, a Democrat, said in a statement yesterday. “We were very offended by the tone of their press release,” Joe Cravelli, a spokesman for the accounting firm, said in a telephone interview. ‘Massive Scheme’
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“Recent evidence disclosed by the controller’s office shows that Mayer Hoffman was
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subjected to a massive scheme of collusion that reached through every layer of city
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government, to undermine the audit process and deceive the auditors,” the firm said in a press release.
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Chiang’s office said Mayer Hoffman failed to comply with 13 of 17 audit standards, including “assessing the risks of material misstatement,” according to a 153-page report. Mayer Hoffman, based in Leawood, Kansas, earned $44,000 for its 2008-09 review of Bell’s
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Bell, California, Accounting Firm Audits `Rubberstamp,' Controller Says - Bloomberg
finances, according to contracts the city released after a public records request.
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Rizzo provided the auditors with letters running for several pages that attested in part to the
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city’s “responsibility for the design and implementation of programs and controls to prevent and detect fraud,” according to copies provided by the city.
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To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net
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Bell, California, Accounting Firm Audits `Rubberstamp,' Controller Says - Bloomberg
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