The company that audited the city’s finances while prosecutors said a massive tax office theft was ongoing now wants an extra $1.2 million to complete its annual review, saying the alleged fraud has complicated the task.
But at least one city councilman said BDO Seidman shouldn’t profit from missing clear warnings that the city was being ripped off to the tune of at least $20 million.
“I don’t think we should be paying them a dollar more,” said Ward 1 D.C. Councilman Jim Graham. “They ignored a clear warning sign from the D.C. auditor.”
The Consolidated Annual Financial Report for fiscal 2007 was due to the city by Feb. 1, but BDO sought an extra two months to finish in the wake of last November’s tax office theft.
Two city employees, Harriette Walters and Diane Gustus, have been charged with stealing at least $20 million from the tax office.
The final report is expected next week.
BDO’s base price for the audit was $2.2 million. But over the course of the year, that has been changed, at times at the request of the city. One change, for which BDO is charging the city $932,232, covered “additional work at the Office of Tax and Revenue,” said Austin Anderson, D.C.’s deputy inspector general. Another $330,000 change will pay for the 60-day extension between Feb. 1 and March 31.
BDO, which bills by the hour, is in its third year auditing D.C.’s finances. The company has faced criticism for not following up on clues that something was awry at the tax office, where prosecutors said millions of dollars were stolen through fraudulent property tax refunds.
Russell Symons, a procurement officer in the inspector general’s office, said the discovery of fraud “resulted in standards that required additional work.”
