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Item 1.D.
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| Date: | 06/12/2023 |
| Title: | Audit Services Contract |
| Presented by: | Andy Zoeller, Finance Director |
| Department: | Finance |
| Presentation: | No |
| Legal Review: | Yes |
| Project Number: | N/A |
RECOMMENDATION
Staff recommends Council award the Auditing Services contract to Junkermier, Clark, Campanella and Stevens, P.C. (JCCS) for three (3) years, with three (3) one-year options to renew, by mutual agreement. The contract amount for year one shall be a total maximum fee of $96,900, year two is $101,745, and year three is $106,830.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
After evaluation and consideration of the proposals received, the selection committee unanimously recommends awarding the contract to Junkermier, Clark, Campanella and Stevens, P.C. (JCCS) for a period of three (3) years, with three (3) one-year options to renew, by mutual agreement.
The Finance Department initiated a Request for Proposals (RFP) for annual audit services, which was advertised in Yellowstone County News on April 7 and 13, 2023, and posted to the City's website. We received proposals from three firms: Eide Bailly, JCCS, and Maher Duessel. All firms' responses were thoroughly reviewed, and their references were checked.
During the evaluation process, the selection committee considered several factors, including the firms' ability to perform fieldwork on-site while still offering remote capabilities. We also discussed the possibility of switching audit firms to introduce a fresh approach to auditing the City of Billings' financial statements. Taking these factors into account, we assessed the pricing matrices provided by Eide Bailly and JCCS.
After reviewing the proposed pricing from both firms, it became apparent that Eide Bailly's pricing for the FY23 audit would likely range between $140,000 - $155,000, representing a significant increase compared to the previous year's audit cost. In contrast, JCCS offered a proposal that aligns more closely with our budget. Furthermore, considering the City staff's positive experience and satisfaction with JCCS's work and communication in the past, the selection committee unanimously decided to recommend JCCS for the contract award.
The contract amount for the first year will be a total maximum fee of $96,900, with year two set at $101,745 and year three at $106,830. Upon the Mayor's signature, the contract will be forwarded to the State Department of Administration for final review and execution. It is important to note that the State's standard contract allows for a three-year term. Therefore, if mutually agreed upon, a new contract will be executed for the additional renewal years.
The Finance Department initiated a Request for Proposals (RFP) for annual audit services, which was advertised in Yellowstone County News on April 7 and 13, 2023, and posted to the City's website. We received proposals from three firms: Eide Bailly, JCCS, and Maher Duessel. All firms' responses were thoroughly reviewed, and their references were checked.
During the evaluation process, the selection committee considered several factors, including the firms' ability to perform fieldwork on-site while still offering remote capabilities. We also discussed the possibility of switching audit firms to introduce a fresh approach to auditing the City of Billings' financial statements. Taking these factors into account, we assessed the pricing matrices provided by Eide Bailly and JCCS.
After reviewing the proposed pricing from both firms, it became apparent that Eide Bailly's pricing for the FY23 audit would likely range between $140,000 - $155,000, representing a significant increase compared to the previous year's audit cost. In contrast, JCCS offered a proposal that aligns more closely with our budget. Furthermore, considering the City staff's positive experience and satisfaction with JCCS's work and communication in the past, the selection committee unanimously decided to recommend JCCS for the contract award.
The contract amount for the first year will be a total maximum fee of $96,900, with year two set at $101,745 and year three at $106,830. Upon the Mayor's signature, the contract will be forwarded to the State Department of Administration for final review and execution. It is important to note that the State's standard contract allows for a three-year term. Therefore, if mutually agreed upon, a new contract will be executed for the additional renewal years.
ALTERNATIVES
City Council may award the auditing contract to Junkermier, Clark, Campanella and Stevens, P.C. (JCCS) for three (3) years, with three (3) one-year options to renew, by mutual agreement; or, not award the contract to Junkermier, Clark, Campanella and Stevens, P.C. (JCCS) and provide staff with further guidance.
FISCAL EFFECTS
As requested in the RFP process, Junkermier, Clark, Campanella and Stevens, P.C. (JCCS) has outlined their estimated hours and annual cost to the City below:
The audit is a General Fund expense from the Finance Department. The FY24 budget for audit expenses is $125,000.
| Fiscal Year | Est. # of Maximum Hours for Audit Team | Hourly Rate | Total Maximum Fee |
| 2023 | 450 | $215 | $96,900 |
| 2024 | 450 | $226 | $101,745 |
| 2025 | 450 | $237 | $106,830 |
| 2026 | 450 | $249 | $112,175 |
| 2027 | 450 | $262 | $117,785 |
| 2028 | 450 | $275 | $123,675 |
The audit is a General Fund expense from the Finance Department. The FY24 budget for audit expenses is $125,000.