Like many communities, Seal Beach has a contract with Mayer Hoffman McCann to audit the city’s financial records. The city of Bell was one such city. The Los Angeles Times recently reported that many cities are reconsidering their relationship with the firm.
On Monday, departing Seal Beach City Manager David Carmany said he would not recommend changing the city’s relationship with the auditing firm, citing a multi-year contract.
However, Seal Beach resident and activist Robert Goldberg said the City Council should consider hiring another firm to audit Seal Beach’s financial records. See his opinion piece on page 21.
A recent review by the State Controller’s Office found fault with the way the auditing firm reviewed Bell’s financial records. A copy of the Controller’s report has been forwarded to the California State Board of Accountancy.
“The Controller’s review found that the firm did not adequately look for documentation and evidence to support the city’s records, did not document the reason for deficit balances, management’s plans for dealing with the financial conditions, or the adverse effect of deficit balances,” according to a late December press release issued by the Controller’s Office.Representatives of Mayer Hoffman McCann disagreed.
“We believe that our team, which has the benefit of over 50 years of collective municipal auditing experience and included several of our most experienced and highly regarded municipal auditors, conducted its work at the highest levels of professionalism,” said company President Bill Hancock, in a press release issued before the final draft of the Controller’s review was made public.
The final draft of the report, available at the Controller’s Office Web site, is 153 pages long and includes a 40-page response to an earlier draft from the chief of MHM’s Division of Audits. The MHM response strongly disagreed with the Controller’s Office conclusion that the auditing firm’s work did not meet required standards.
Mayor Michael Levitt said he would talk to Carmany and City Attorney Quinn Barrow about Seal Beach’s relationship with MHM. As for reports concerning the auditing firm’s work in Bell, Levitt said he was under the impression that McCann auditors were given misleading information.
Levitt also said Seal Beach had used the auditing firm for many years and so have many other California cities.
Carmany said that Mayer Hoffman McCann had cooperated with the Controller’s Office during its review of the Bell audit.
Carmany said as city manager he would not recommend changing the city’s relationship with Mayer Hoffman McCann.
“I’m satisfied with the product,” Carmany said.
“We’re in a multi-year contract with Mayer Hoffman McCann,” Carmany said.
He said that a contract was a serious matter.
“In Seal Beach, I believe that our finances are in good order,” Carmany said.
MHM has audited Seal Beach financial records since June 30, 2008. According to an April 14, 2008 staff report to the City Council, the auditing firm was to be paid $44,585 for fiscal year 2009/10.
