Despite writing this blog for six years, I keep finding
important areas of government ethics that I have not discussed. One
such area involves dealing with the possible conflicts of outside auditors. Large cities and counties
have internal auditors or comptrollers, but most local governments
employ the services of external auditing firms, just as companies do.
These auditors have special duties toward their clients, that is, to
the community, not to the individuals who hire them and with whom
they work. And yet these auditors owe their contracts to the
individuals they work with. If they ask too many questions, investigate too carefully, or are
too critical of what they find, they have reason to believe that their contract will be given to a competitor. Therefore,
even more than outside attorneys, they are caught between their
professional obligations, their personal relationships with officials, and their commercial interest in not rocking
Bell CA Auditor's Disciplinary Proceedings
This issue has arisen with respect to last year's most famous
government ethics scandal, the huge salaries of Bell, CA officials.
According to a
recent article in the Los Angeles Times
, California's Board of
Accountancy filed disciplinary charges against Bell's outside
auditing firm for failure to detect financial irregularities,
including the overcharging of residents and businesses more than $6
million in taxes and fees and the placing of $23.5 million in bond
funds in a non-interest-bearing checking account.