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New set of eyes on books?

Some agencies stick with same auditors; others rotate

Published: Saturday, April 26, 2014 1:15 a.m. CDT

DIXON – The city of Dixon stuck with the same auditing firm for decades, a relationship that ended with the arrest of the city’s comptroller in 2012.

Last year, months after Rita Crundwell was sent to prison, CliftonLarsonAllen settled a civil lawsuit with the city for $35 million. That was in response to the city’s claim that the firm’s annual review of city finances had failed to catch Crundwell’s theft of nearly $54 million.

Depositions indicated that members of CliftonLarsonAllen’s staff were personally close to Crundwell. One of the firm’s accountants had even asked Crundwell for a date. She said no.

Long ago, the auditors would go to a bar with Crundwell and others from the city after completing an audit. She was a member of the firm’s softball team.

In the wake of the Crundwell scandal, Dixon went with a new firm, Milwaukee-based Wipfli. Both Wipfli and Clifton have Dixon offices.

A block from Dixon City Hall is the Old Lee County Courthouse. Like the city, the county has stayed with the same auditing firm, Clifton, for at least 2 decades and probably longer, with no plans to end the relationship.

Recently, though, Clifton has brought auditors from its branch in Peoria to handle the county’s audit to “mix it up,” according to County Board Chairman Rick Ketchum, D-Amboy.

Some government entities change their auditors occasionally. Sterling, for instance, puts out the work for public bids every 4 years.

“We have had low bids from three different firms in the last three bid cycles,” City Manager Scott Shumard and City Finance Director Cindy Von Holten said in a memo in 2012, shortly after Crundwell was arrested. “As a result, in the last 6 years, we have had 3 different auditing firms conduct the city’s annual audit. This not only keeps our costs lower, but also ensures that someone new looks over the city’s books every several years.”

In Rock Falls, Clifton has handled the audits for the past decade, City Administrator Robbin Blackert said.

“Each time we have done [requests for proposals] over the last 10 years, CliftonLarsonAllen has been the successful bidder,” she said in an email.

For Whiteside County, Wipfli has done the audit for the past 3 years, County Administrator Joel Horn said. The county solicits bids “not necessarily every 3 years, but fairly frequently, depending on increases in cost, etc.,” he said.

Experts disagree on whether government entities should change their auditors every few years. The Chicago-based Better Government Association, a watchdog group, likes the idea.

“It can’t hurt to have a different set of eyes,” said Patrick Rehkamp, a senior investigator with the association. “If I were on a board, I would say, ‘Maybe we should take [the audit] somewhere else.’”

In Dixon, he said, “if different people were looking at the books, that could have stopped” Crundwell’s theft.

Rehkamp said he understands why other major organizations in the area such as Lee County have stayed with Clifton despite the Crundwell scandal.

“CliftonLarsonAllen is a large firm,” he said. “They are well respected. There are a lot of good auditors there.”

Dave Sinason, an accounting professor at Northern Illinois University in DeKalb, said experts have long debated the need for rotating auditors.

“If you keep an auditor for a long time, they get to know your business,” he said. “The negative side is that they get complacent.”

It takes a few years for a firm to learn the ropes at a new agency, Sinason said.

“I’m not in agreement that you would have to change your auditor every 5 or 7 years,” he said. “But you can put it out for bid, see what people offer you.”

That way, he said, current auditors should “keep on their toes.”

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