Kathleen O’Connell, head of internal auditing for the Orange County Transportation Authority, has quit to become an executive of the Long Beach City Employees Federal Credit Union.

Ironically, one of her last official acts will be to help the transportation agency decide whether to keep its outside auditors, who also worked for scandal-plagued Bell.

The OCTA finance committee is scheduled to consider Jan. 19 whether to keep Irvine-based Mayer Hoffman McCann (MHM) as its outside auditors. In a highly critical report on the firm’s audits in Bell, state Controller John Chiang last month labeled MHM’s work as “a rubberstamp rather than a responsible auditor.” The firm said it disagrees with the controller’s findings.

OCTA had been set to discuss renewing MHM’s contract late last year but delayed acting until after the state controller’s report was released.

County Supervisor Bill Campbell, who chairs the OCTA finance committee, said he hasn’t talked to other committee members, but based on the criticisms in the controller’s report and the “tone of the discussion” at the last committee meeting, he expects the committee will recommend that the transportation agency seek bids from other auditing firms, rather than just renew the MHM contract for another year.

“The [controller’s] report was not complimentary is the mildest way to say it,” said Campbell.

According to the Los Angeles Times, several cities throughout southern California have held off renewing contracts with MHM or have switched to other outside auditors as a result of the Bell scandal and criticism of the auditors by the state controller.

O’Connell’s presentation on whether OCTA should keep MHM under contract comes two days before her scheduled departure. She joined the transportation agency in 2006, following eight years as a deputy city auditor for Long Beach and another eight years as a senior audit manager for accountants Ernst & Young.

In her Dec. 16 letter of resignation, O’Connell said she serves on the board of directors of the credit union in Long Beach and will become its deputy chief executive officer.

“My 4 ½ years with the Orange County Transportation Authority,” she wrote, “have been some of the most rewarding and challenging in my career, and I consider myself very privileged to have worked alongside both an incredibly talented Internal Audit staff, as well as a Board and management staff of extraordinary professionalism and commitment to the public.”

Campbell said O’Connell’s departure is “a real loss.”

“She has stood her ground firmly, as you want an internal auditor to do.”

In a Dec. 20 announcement of O’Connell’s departure, OCTA Chief Executive Will Kempton said her temporary replacement will be Janet Sutter, who also worked in the Long Beach auditor’s department and for Ernst & Young before joining the transportation authority.


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