Authorize Requests for Proposals for Auditing Services

The City has retained the auditing firm of Malloy, Montague, Karnowski, Radosevich & Co. [MMKR] for the audits of its comprehensive annual financial reports and Fire Relief Association since 1990.  The city has had three RFP's for auditing services since then, the last being 2007, with the contractual terms with MMKR ending on December 31, 2009.  Due to a change in staffing, council authorized a one-year extension for 2010 audit services. 

In November 2009, the city passed a purchasing policy which states that a Request for Proposals (RFP) for professional services will be solicited every three years (unless specifically extended by City Council) for standard city services related to such services as auditing and legal services.  As the auditing requirements are continuously changing and sometimes the changes can take a couple of years to implement, staff is requesting that the three-year RFP period be amended to five years.  The time extension would allow staff and auditors enough time to incorporate said GASB (Government Accounting Standards Board) mandates and for staff to get a full understanding of what workspapers the auditors require. 

Over the past few years, the City has seen an increase in costs for auditing services due to the implementation of GASB 34 and the upcoming implementation of GASB 54 and other legal requirements such as the Single Audit Act and compliance reporting. The following is a detail of the cost of auditing services for the City and Fire Relief over the past eleven years:

CAFR Year                    Budget Year                    City CAFR                           Fire Relief
                                                                                Cost                                  Cost

  2000                            2001                              $18,125                              $1,613
  2001                            2002                              $19,843                              $1,715
  2002                            2003                              $19,200                              $1,842
  2003                            2004                              $20,600                              $1,928
  2004                            2005                              $27,030                              $2,543
  2005                            2006                              $26,126                              $2,558
  2006                            2007                              $26,532                              $2,666
  2007                            2008                              $24,800                              $2,950
  2008                            2009                              $25,540                              $3,160
  2009                            2010                              $28,850                              $3,250
  2010                            2011                              $26,400                              $3,250

RFP’s would be due to the City by October 10, 2011.  An analysis of the proposals would take place with a recommendation for award of service presented at the October 25, 2011 Finance Committee meeting.  This time table would allow adequate time for the scheduling of preliminary audit work which generally takes place in late November and early December each year.

As stated above, we will be looking for a five-year commitment with established not-to-exceed amounts for the City’s regular Audit, the Fire Relief Audit and for a Single Audit (if required).

Recommend that the Finance Director be authorized to distribute Requests for Proposals for Auditing Services for a five-year commitment beginning with the audit of year ending December 31, 2011.

The costs associated with the city's annual audit and Fire Relief audit are included in the General Fund budget of the following year.

Motion to recommend City Council authorize the Finance Director to prepare and distribute Requests for Proposals for Auditing Servics for a five-year commitment beginning with the audit for fiscal 2011.