"Only had it been for the City of Tyler would it have been illegal. In fact, (my firm) did it up until two years ago before I ran for mayor." Despite receiving a quote nearly 50 percent lower from another certified public accountant firm for its auditing services, the Murchison City Council voted instead to hire a firm for which Tyler Mayor Barbara R. Bass works as a partner, records show.

In a letter dated July 24, audit manager Kevin R. Cashion of Gollob, Morgan, Peddy & Co. of Tyler informed Murchison officials the firm could complete its audit of the city by the end of this year for $9,000.

The communication came a day after Cashion met with Murchison Mayor Pro-Tem Ann Boyles and 15 days after Dori Bohl of Corsicana CPA Hudson Anderson & Associates told former Murchison secretary Sharon Chase in an e-mail that firm could conduct its audit for $4,850.

The council approved the hiring of Gollob, Morgan, Peddy & Co. during a special meeting on Aug. 4. Official minutes from that meeting and other records give no indication the council even considered hiring Hudson Anderson & Associates for the lower rate, or that council members Megan Harville, Diane Crutchfield, Porter Kelly and Isaac Nation even knew about the communication between the firm and Chase.

The Chandler & Brownsboro Statesman questioned Bass about her involvement with Murchison and that of her firm because of the state's extensive conflictsof interest laws, which prohibit public officials from engaging in business practices where one party or more stand to benefit financially or otherwise from a binding legal agreement between public bodies.

"Murchison has hired our firm to do an external audit, and it is legal," Bass told the newspaper. "Only had it been for the City of Tyler would it have been illegal. In fact, (my firm) did it up until two years ago before I ran for mayor. We cannot do an audit for the City of Tyler any time I am on the council. "

A Statesman review of Texas law appears to substantiate Bass's claims. However, the newspaper asked Bass to explain why her firm may have been chosen over the less expensive firm, especially since she reportedly has a personal relationship with Boyles.

"I have met her, yes," Bass said. "I don't know how much you know about government audits, but they are extremely complex these days. I've never even heard of that other firm. The compliance requirements and accounting requirements all changed after 9-11, and they get more complex once you get into the government arena."

The Murchison City Council voted to authorize Boyles to "get an auditor for the city" after Crutchfield motioned for it during a July 21 meeting.

The e-mail from Bohl to Chase on July 9 said Hudson Anderson and Associates could complete its audit "around the end of September" and estimated it could do so for less than $5,000 - if the city's 2008 financial records were ready to review within a month.

"If the records are not ready until later in the year, we could possibly have conflicts with other audits that would likely cause the overall fee to increase," the message says.

Bass said Texas law prohibits CPAs from bidding accounting services and that she does not participate in audits conducted by her firm.

Budget documents show Murchison allotted $2,000 for auditing services. The city's 2009-2010 budget is about $250,000, only $57,550 of which is for the general fund.

Murchison Mayor Mike Hill did not respond to an e-mail seeking comment.