FLINT, MI -- City Council hired a new auditor with a dubious past after another firm pulled out months before the state audit deadline, according to Flint officials.

Council unanimously voted at a regular meeting Monday, Aug. 12 to hire Rehmann Robson, a Saginaw-based accounting firm, to perform an audit of the city’s finance books with the state and federal audit deadline looming on Dec. 23, according to Flint Chief Finance Officer Tamar Lewis.

The late hire is a result of a lack in companies interested in auditing Flint’s finances, Lewis explained at an Aug. 7 council finance committee meeting.

The only firm to respond to Flint’s request for proposal “pulled out," Lewis said. The Flint Journal-MLive’s request for more information were not returned by the city.

“We’ve already chased off one auditor and we had one auditor that responded with ‘absolutely not, we’re not interested,'” Lewis said. “My concern is that we’re going to badger another vendor and then we won’t have someone to do our audit.”

Councilwoman Monica Galloway, Ward 8, stated Yeo and Yeo, another Saginaw-based accounting firm, pulled out because “they wanted to make sure their reputation was protected.”

“The auditors pulled out because they were concerned that the city didn’t have capacity with bodies to do the audit in a timely matter,” Galloway said. “This needed to be done yesterday. The fiscal year ended on June 30.”

Yeo and Yeo did not respond to The Flint Journal-MLive’s request for comment.

Michigan’s Uniform Budgeting and Account Act requires the annual filing of municipal audits within 120 days of the close of the fiscal year.

In April 1999, under former Mayor Woodrow Stanley, Flint was more than three months late in turning its audit over to the state, according to Flint Journal archives. Failing to submit the audit on time, Flint was placed on a “watch list” by Moody’s Investors Services -- a Wall Street investment service -- on Feb. 15, 2000.

Moody’s warned potential investors that it might downgrade Flint’s bond rating because of “its deteriorating financial position," according to Flint Journal archives.

Dupis and Ryden, formerly a Flint-based accounting firm, suggested there weren’t enough workers in the city’s department of finance in 1999 to keep financial records properly maintained, according to Flint Journal archives.

The firm found “significant deficiencies in the city’s internal controls over financial reporting,” according to previous stories in The Flint Journal.

To avoid any issues now, Flint officials decided to approach Rehmann Robson. The accounting firm confirmed they didn’t respond to the city’s request for bids, but were instead sought by the city.

Rehmann Robson did not respond to The Flint Journal-MLive’s request for further comment.

Council approved hiring Rehmann Robson after Council member Santino Guerra, 3rd Ward, amended the city’s resolution to extend the state’s two-year statute of limitations for accounting malpractice to five years in Flint. Guerra also requested reports on how purchase cards are spent and they must be filed with council.

Alcona County initially won a lawsuit in circuit court against Rehmann Robson nine years ago alleging accountants negligently performed auditing responsibilities, according to court records.

The State of Michigan Court of Appeals, however, ruled in favor of Rehmann Robson when the case was appealed and dismissed the suit because it wasn’t filed within the proper time frame.

The litigation arose after Alcona County Treasurer Thomas Katona became involved in the “Nigerian Advance Fee Fraud Scam,” and embezzled $1.2 million in county funds, according to court records.

Alcona sued Rehmann and Robson, which performed the county’s audits between 1998 and 2005, for not uncovering the treasurer’s embezzlement, according to the court record.

The county achieved a verdict in the case, however, it was dismissed on an appeal because Rehmann Robson’s contract that stated any claim based on its audit engagement must be filed within a year after its performance. Alcona County waited nearly two years to file its claim against the accounting firm.

The state’s statue of limitations for accounting malpractice is two years.

Council has the option to reconsider its auditing firm each year, Lewis stated. The resolution council approved would hire Rehmann Robson for one year.