Council
Communication

Office of the City Manager
 
 

Date

May 7, 2007

 

Agenda Item No.       47

Roll Call No.              07-

Communication No.  07-281

Submitted by: Allen McKinley, Finance Director/Treasurer

 

AGENDA HEADING:

 

Contract renewal for one year with McGladrey & Pullen, LLP for independent auditing services.

 

 

SYNOPSIS:

 

To exercise the City’s option for the first of two one-year contract renewals with McGladrey &  Pullen, LLP as the city’s independent auditor.

 

 

FISCAL IMPACT:

 

Amount: $125,000

 

Funding Source:  2007-2008 Operating Budget under:

 

 

 

ADDITIONAL INFORMATION: 

 

On May 17, 2004 the City Council awarded the contract for professional auditing services to McGladrey & Pullen LLP at the conclusion of an RFP process that involved a total of three proposals.  The contract was for a three-year period with two one-year renewal options.  The base price for the contract was $82,000 for each of the three years with an allowance for inflation based on the CPI and changes in scope through negotiations with the Finance Director.  The contract price under the one-year extension reflects both a CPI adjustment and various changes in scope.  The “Single Audit Scope” price increase is a result of a qualified opinion in 2004 regarding SEFA (Schedule of Expenditures on Federal Awards).  As a result, the audit scope in this area was required to be expanded from 20% to 50% and was not foreseen during the original RFP process.  The “New Standards” increase results from additional auditing standards that have been adopted by AICPA (American Institute of CPAs) that revised many fundamental auditing principles that will require the auditor to perform more extensive procedures than in the past (Statements on Auditing Standards Nos. 104 – 111).  The “Added Scope” reflects the additional time that has been required of the auditors to complete on a timely basis the review of debt and assets particularly involving the Airport and the WRA.  The change in price is outlined in the following table:

 

 

 

 

                                                                                            Single

                                                                                            Audit             New            Added

Base Bid             CPI           Scope      Standards        Scope              New Price

General Audit                           $50,000           $   845       $20,000       $  6,000         $       0             $  76,845

Airport Audit                                7,000                118                  0           3,000           3,307                 13,425

Housing Audit                             18,000                304                  0           3,000                  0                 21,304

WRA Audit                                  7,000                118                 0           3,000           3,308                 13,426

Total                                        $82,000           $1,385       $20,000       $15,000         $6,615             $125,000

 

During the RFP process in 2004 the third year contract price of the other bidders were $108,000 and $135,000.  Therefore, setting aside the additional SEFA audit requirements the one-year contract renewal price is less than the other bid prices.

 

 

PREVIOUS COUNCIL ACTION(S):  NONE

 

Date:  May 17, 2004

 

Roll Call Number:         04-1033

 

Action:   Selection of McGladrey & Pullen, LLP as the City’s independent financial auditor and directing negotiation and execution of a contract for fiscal years ending June 30, 2004, 2005 and 2006, with the option of two one-year renewals.  Moved by Brooks to adopt.  Motion Carried 7-0.

 

 

BOARD/COMMISSION ACTION(S): NONE

 

Date: 

 

Roll Call Number:        

 

Action:

 

 

ANTICIPATED ACTIONS AND FUTURE COMMITMENTS: