Today, California State Controller John Chiang released the first audit of the City of Bell’s corruption investigation. What was significant is that there were virtually no controls in place to prevent this from going on.
Chief Administrative Officer, Robert Rizzo had total control over how city funds were spend. No matter the size of type of organization that you have, there must be “segregation of duties.” for all individuals. There will be 2 more audit reports released by early November.
This case shows that conventional auditing, with is required for Government agencies, as well as public companies is not enough to detect fraud. Most fraud is not detected by these audits.
Kenneth Hunt's Blog 