Tuesday, Jun. 16, 2009

Out with the old, in with the new?

City looks to choose new auditor

Wednesday night the City Council is expected to approve an agreement to hire a new auditing firm in the wake of an alleged embezzlement of more than $420,000 that the company Los Baños most recently contracted with failed to detect.

A three-year contract with an option for a two-year extension with Pleasant Hill-based Maze and Associates is proposed on the council’s consent agenda.

If approved, the firm will charge the city $48,605 for an audit of its 2008-2009 fiscal records. The 2007-2008 audit, done by Beverly Hills-based Moss, Levy and Hartzheim LLP, cost Los Baños $39,500.

The Beverly Hills company’s audit did not identify a former city employee’s alleged embezzlement that, police say, was ongoing from December 2007 to March of this year.

Mayor Tommy Jones said the city will change audit firms because it’s evident there was something Moss, Levy and Hartzheim LLP missed.

“I want to bring in a firm to make sure things like this don’t happen again,” Jones said.

According to a city staff report, a request for proposal asking for bids on auditing services was sent out May 15, nearly a month after the alleged embezzlement was discovered. The staff report states that Maze and Associates’ bid was the only one received when bids closed on June 5.

The report also states Irvine-based Caporicci and Larson, as well as Sacramento-based Macias, Gini and O’Connell LLP, declined to participate in the bid because they have already scheduled their auditing year.

Other measures designed to make a third embezzlement — there was reportedly another one in May of 2007 — unlikely are upcoming.

The city plans to hire a forensics certified public accountant to assist the police department in its investigation into the still-unnamed suspect. The Finance Department will ask the City Council to upgrade a vacant utilities technician position to an accounting budget supervisor. The Finance Department will also change cash-handling procedures.

Police Chief Dan Fitchie has said it could be weeks longer before an arrest in the embezzlement case is made.

Enterprise staff writer Corey Pride can be reached at 388-6563 or cpride@losbanosenterprise.com