Kingman almost hires auditing firm marked by scandal

KINGMAN - A little extra due diligence can go a long way.

City of Kingman Finance Director Tina Moline changed her recommendation on whom the city should hire as its next auditor after terminating its contract with Heinfeld Meech, which was done in the wake of the alleged embezzlement of $1.1 million by former city budget analyst Diane Richards.

Moline's research might have saved the city some embarrassment down the road as the leading replacement auditing firm, CliftonLarsonAllen, was implicated in the largest case of municipal fraud in the country's history.

Rita Crundwell, the treasurer and comptroller of Dixon, Ill., was convicted of embezzling nearly $54 million from the city of 16,000 over a 22-year period. She pleaded guilty after her arrest in 2012 and is serving close to 20 years in federal prison.

Crundwell created a secret bank account and funneled taxpayer funds into it, created false invoices and then wrote checks from city funds made out to the treasurer, which she deposited into the secret account.

Dixon sued CliftonLarsonAllen and the bank. A $40 million settlement was reached, with the auditing firm paying all but $2.5 million.

Moline told the City Council at Tuesday's meeting that two of six responding certified public accounting firms met the requirements spelled out in her request for proposals.

A team of evaluators ultimately chose CliftonLarsonAllen over Hinton-Burdick, but Moline continued to research both firms and ran across the Dixon story.

Hinton-Burdick is a regional firm with offices in Flagstaff and Utah, as well as other locations. The firm will earn $229,000 over the five-year lifespan of the contract, nearly $100,000 less than CliftonLarsonAllen would have earned.

The Council voted unanimously to approve Hinton-Burdick.