Bell auditor fined, placed on two years' probation
The state has reached a disciplinary settlement with the accounting firm that failed to detect financial irregularities in Bell despite money problems that drove the city to the brink of insolvency and led to a massive public corruption scandal.
According to the settlement with the California Board of Accountancy, Mayer Hoffman McCann must pay a $300,000 fine and as much as $50,000 for the cost of the investigation.
In addition, the firm’s license in California is suspended for six months, although that punishment was stayed, meaning the firm can continue practicing in the state if it agrees to two years of probation.
The settlement was reached Tuesday, five days after the state board filed a 13-page accusation against Mayer Hoffman. The settlement follows a highly critical report from the state controller that called Mayer Hoffman’s audits little more than a rubber stamp.
“We have taken the events at Bell and the findings of the [accountancy board] very seriously, and we have used this as an opportunity to renew our commitment to high-quality audit services,” William Hancock, president of Mayer Hoffman McCann, said in a news release.
Eight of Bell’s former leaders now face criminal trial on corruption charges.
-- Jeff Gottlieb
Photo: Former Bell administrator Robert Rizzo is led away in handcuffs after his arrest on corruption charges in September 2010. Credit: Robert Lachman / Los Angeles Times