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A resident celebrates the arrest of eight former and current Bell city officials by shaking little bells in front of City Hall on Sept. 21, 2010. The city officials were charged with misappropriation of more than $5.5 million in public funds for excessive salaries and illegal personal loans.
An auditing firm has hired an independent accounting company to review its failure to flag repeated fraud and mismanagement in this scandal-plagued suburb of Los Angeles.
The firm of Mayer Hoffman McCann hired the accounting company Carr Riggs & Ingram to review its work for California government agencies and issue a report in the next 60 days, the Los Angeles Times reported Saturday.
Firm spokesman Joe Crivelli said such reviews take place every three years, but Mayer Hoffman McCann moved up the forthcoming one in the wake of the scandals in Bell, where city leaders raised salaries, levied illegal taxes and wrongly loaned public money.
The city even won numerous awards for the financial reports the auditor signed off on. Those audits are now under investigation by State Controller John Chiang's office.
Crivelli defended his firm, saying it was not the job of an auditor to reveal the exorbitant salaries of city leaders, and suggested Bell officials may have concealed information from auditors.
"There may have been some collusion here between the city of Bell officials," he told the Times.
The firm conducts outside audits for many California government agencies and some federal agencies, but some are withholding work until the reviews from Chiang's office and Carr Riggs & Ingram are completed, and others are watching the results closely.
"If they are found to not have adhered to standards, we would have to take a closer look," said Assistant Finance Director Colleen O'Donoghue from the city of Costa Mesa, which uses Mayer Hoffman McCann as an auditor.
California's state employee retirement fund has decided not to give any more work to the firm until Chiang completes his review.
Chiang's spokeswoman Garin Casaleggio said his report is being finalized and will be issued before the end of the year.
During an audit of the city itself, Chiang's office concluded Bell illegally collected nearly $7 million in taxes from residents, misspent millions more in bond money and misused state gas tax funds.
Four of the five members of Bell's part-time City Council were paid about $100,000 a year, and former City Manager Robert Rizzo had a total compensation package of $1.5 million a year when numerous perks were included.
The police chief, city manager and assistant city manager have been fired, and one of the four highly paid council members has resigned. The other three are the subject of a March 8 recall, and all four face criminal charges of misappropriating public funds.
All have pleaded not guilty.
Information from: Los Angeles Times.
© 2010 The Associated Press.