ITEM TITLE:
Approval of One-Year Extension of Professional Services Contract for Financial Statements Audit with BDO, LLP.
SUBMITTED BY: Brian Carlson, Finance Director
FISCAL NOTES:
Expenditure Required: $82,000
Unencumbered Balance: $150,000
Funding Source: 001-5300-43200
RECOMMENDATION:
Approve one-year extension of professional services contract for financial statement audit with BDO, LLP
SUMMARY STATEMENT:
SUMMARY:
Staff is requesting approval of a one-year extension to its financial audit contract with BDO. The extension covers the 2016 audit, and the proposed cost is $82,000.
BACKGROUND:
The City currently contracts with BDO, LLP for annual financial auditing services. The contract specifies a three-year term, with the possibility of two one-year extensions (see Article 3 of the attached contract). This agenda item represents the first one-year extension for the 2016 audit, with such work to be done and invoiced during 2017.
Field-work is scheduled for the weeks of March 13, April 3 and April 10, pending Council approval of the contract extension. If approved, staff will begin coordination and orientation with the Audit Committee in advance of the field-work.
ANALYSIS:
Appendix B of the attached contract details the three-year compensation schedule; $61k, $63k, and $69k for audit years 2013, 2014, and 2015, respectively. In 2013 the actual fees were $91k, owing to the combined factors of sudden staff turnover and the introduction of a new auditing firm.
The proposed 2016 audit fee of $82,000 reflects a 10% increase over the three-year average fee. While this is a material increase, Staff feels that the request is reasonable in light of the complexity of the City’s audit.
Staff is also of the opinion that the shared history and continuity of the current Finance Director, Comptroller, and Audit firm is a significant benefit to the incoming City Manager, and will help facilitate her orientation.