"[Mayer Hoffman McCann] appears to have been a rubberstamp rather than a responsible auditor committed to providing the public with the transparency and accountability that could have prevented the mismanagement of the City's finances by Bell officials," Chiang said in a statement.
Eight current and former Bell city officials were charged this fall in what prosecutors said was a pervasive climate of corruption. Bell officials misappropriated $5.5 million in public funds, prosecutors said. The city overcharged property owners and businesses more than $6 million in fees and made other questionable financial decisions, an earlier controller's audit found.
Since 2006, Mayer Hoffman audited Bell's books; the controller's review focused on the firm's latest audit of the city and the redevelopment agency's 2008-09 financial statements
In a response to the controller's Bell report issued Tuesday, Mayer Hoffman said that the firm "was subjected to a massive scheme of collusion that reached through every layer of City government, to undermine the audit process and deceive the auditors."
The firm has been the independent auditor of Newport Beach for about the past 10 years and Costa Mesa for about the past 20 years, officials said.
Newport Beach Deputy Director of Administrative Services Dan Matusiewicz said that his division is waiting for the results of an independent peer review of Mayer Hoffman's California audit practice, so he can get another perspective.
He's comfortable with Newport's past audits by Mayer Hoffman.
"We continue to stand by the City of Newport Beach financial statements and the related audit opinion issued upon them," Matusiewicz wrote in an e-mail.
Before the controller's report was released, recently elected Newport Beach Mayor Mike Henn said that he was also confident with Newport's auditing process.
"I would not draw any conclusions from Bell that relate to Newport Beach," he said.
Costa Mesa's contract with Mayer Hoffman is up for renewal in 2011, and the city will seek new proposals. Newport Beach's contract is also up in 2011.