HomeMy WebLinkAbout2005-043 Contract - Pauly Rogers & Co
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PAULY, ROGERS AND CO., P.C.
CERTIFIED PUBLIC ACCOUNTANTS
March 16, 2005
Lee Tuneberg
City of Ashland
FEESF()R TilE errv OF AI.SHLi\NH A;.ND ASHLANDP..:\RKS ANDRERECREA]]ON
The follo\ving is the fees for the City and component unit, the fees do not include preparation of financial
statements. Our fee increases is based on a percentage increase over the preceding year's fee that accounts for the
effect of inflation and anticipated normal increase in the Company's operations. We anticipate that fees will not
exceed a 3% increase per year. Our fees listed below include all travel and out of pocket expenses.
City Parks
2004-2005 $ 36,750 $ 10,300
2005-2006 37,850 10,650
Total $ 74,600 $ 20,950
~CHEDlJLE OIiPH,OFESSI()NAL FEES & EXr}~NSI~S
These amounts are based on anticipated cooperation of the City and on the assumption that the City's books will be
balanced and the accounts will be reconciled.
ADDITI()NAL SERViCES
If extraordinary circumstances are discovered during the audit, we will discuss it with you and arrive at a new
fee estimate before we incur the additional costs. Additional time would be necessary due to work that is
beyond the scope of the engagement indicated above. Such work could include, but is not limited to,
additional agreed upon procedures, special projects, and reconciliation's and/or adjustments needed to bring
the financial statements into conformity with generally accepted accounting standards or additional
procedures necessary to comply with OMB Circular A-133. The additional time will be biHed at our standard
hourly billing rates for the individuals who perform those services. The following is the hourly rate for each
position in our firm: Partner - $ 120/hr, Audit Manager $90/hr, In-Charge $80/hr, and Staff $70/hr.
Kenny Allen, as signer of this letter, is authorized to make representations and to bind the Firm in regard to
this fee proposal. We agree to all the same terms and conditions as agreed to in the original contract dated
March 25, 2002.
Very truly yours,
/~
Kenny Allen, CPA
PAULY, ROGERS & CO., P.C.
AUDIT COMMITTEE MEETING
JANUARY 11,2005- PAGE 1
CITY OF
ASHLAND
Audit Committee
DRAFT MINUTES
January 11, 2005 3:00pm
Shakespeare Room, Community Development/Engineering Services Building
51 Winburn Way
Call to Order
Chairman Marty Levine called the meeting to order at 3:00 p.m. on January 11, 2005 in the
Shakespeare Room of the Community Development/Engineering Services Building, 51
Winburn Way, Ashland, Oregon.
ROLL CALL:
Audit Committee Members Case, Christensen, Levine,
Morrison, and Nutter were present.
ABSENT:
None.
STAFF PRESENT:
LEE TUNEBERG, FINANCE DIRECTOR
COURTNEY BUDDRESS, ADMINISTRATIVE SECRETARY
OTHERS PRESENT:
None.
Approval of Minutes
Audit Committee Minutes of October 20, 2004:
Levine asked about sum of fees billed separately for GASB 34. Tuneberg responded that
the cost was around two thousand dollars.
Nutter referenced page four of minutes, where it says, and "Tune berg will provide" and
asked if he was not included in receiving the information. Tuneberg responded that he had
with him information regarding the committee's request to see revenue assurnptions from
the previous year. He will email the Budgetary Meeting comparisons once available.
Audit Committee Members Christensen/Nutter m/s to accept minutes as presE~nted.
Christensen, Levine, Nutter, Yes. Case, Morrison abstained. Motion passed.
Committee Discussion
Lee Tuneberg, Finance Director, spoke to the current situation of the audit contract. He
explained that this is the third year of the three-year contract. The committee met three
AUDIT COMMITTEE MEETING
JANUARY 11,2005- PAGE 2
years ago to discuss proposals from four or five different auditing firms throu!~hout the
state. Committee selected the proposal from Pauly, Rogers and Co. and signed a three-
year contract with them. Tuneberg referenced the problem that GASB 34 proposed, and
how it reflected especially high fees within the proposals received. Levine explained to the
committee that GASB (Government Accounting Standards Board) is a high le~vel group of
accountants specializing in governmental accounting that have put together a set of
procedures for auditors to follow in issuing their reports to ensure consistency amongst
reporting entities. GASB 34 caused a major change in the way governments do their
financial reporting so that it is more comparable with other entities. Tuneber~1 reiterated
that unlike other firms, Pauly, Rogers, and Associates proposed a very reasonable billing
price for GASB 34.
Tuneberg pointed to the provision listed on item ten within the existing contract, which
allows the extension of the contract for up to two fiscal years beyond 2003-04. He stated
that it is wise to go out to bid every few years, and had originally planned to propose doing
so this year. Due to changes in current circumstances, however, Tuneberg expressed
concern with going out to bid and instead strongly recommended to employ the provision
in item ten and extend the contract at least one, if not two years. He explained his main
reason for the change is that the City's accounting department is currently undergoing
some radical changes in staff. Patrick Caldwell, Staff Accountant will retire as of Friday,
January 14th with very short notice. Caldwell has worked as Staff Accountant for the City
of Ashland for 19 years. Tuneberg expressed concern at the impact of losing a
knowledgeable resource such as Caldwell. Tuneberg referenced additional personnel
changes currently facing his department that would make it very difficult to go through the
bidding process. He expressed the challenge in attempting to employ and teach a new
audit firm as to the processes and procedures of the department.
Tuneberg recommended extending the contract based on the economical price and job
well done by Pauly, Rogers, & Co. He stressed the need for the continuity of their skills
and knowledge in order to help his department get through the changes ahead this year,
and possibly the next as well.
Case asked if Pauly, Rogers, & Co. was the auditor prior to the contract. Tuneberg
responded that Moss Adams was the previous auditor. Committee discussed the history
of auditing firms and bidding processes used by the City.
Tuneberg stated that extending the contract allowed for negotiation of a new rate. He
expressed confidence that it would be less than five percent and possibly as low as two to
three percent. Nutter asked if he spoke with Roy Rogers about the rates. Tuneberg
responded that he had received the information from the onsite partner, Kenny Allen, who
had assured him that it would be less than five percent, and that renewals are typically
charged at two to three percent.
Tuneberg spoke to the scope of work and internal fraud. He listed utility billing!, accounts
payable, investments and wire transfers as areas that Pauly, Rogers, & Co. focus on as
highly potential areas for fraud. He then listed areas the City may ask them to focus on
AUDIT COMMITTEE MEETING
JANUARY 11,2005- PAGE 3
such as Visa statements, bidding, purchasing, and processing. He praised Pauly, Rogers
& Co. for their perspective and stated that the City is also allowed input on scope of work.
Nutter asked if personnel issues are expected to be repeated again next year. Tuneberg
responded no. Nutter pointed to figures on page two of contract and asked if contract
figures were correctly reflected. Tuneberg stated that the City paid according to contract,
with the exception of additional costs relating to GASB 34, which was a one-time fee.
Nutter asked how Pauly, Rogers & Co. compared to other bids received. Cornmittee
agreed that Pauly, Rogers & Co. was the lowest bid received and that others were
substantially higher.
Committee discussed rate changes in renewing for one year versus two years. Tuneberg
stated that rate should remain under five percent regardless of change in scope of work.
Christensen expressed concern with the time involved in replacement of staff. She
speculated that training new employees to become familiar with budgetary and auditing
processes could take more than a year. She therefore supported approving the extension
of the contract for two years rather than one. Committee discussed cost limitations and
negotiations regarding contract increases.
Audit Committee Members Christensen/Nutter m/s to approve extending the audit contract
up to two years with the Finance Director negotiating a cost increase of no more than four
percent per each year. Motion passed unanimously.
Tuneberg reminded committee that option remains to end contract after only one year. He
will provide particulars of contract negotiations to committee members via email.
Committee spoke to the benefits of switching auditors and gaining new perspE~ctives. They
praised their experience working with Pauly, Rogers & Co. and the questions raised by the
auditors. Nutter asked if Tuneberg expected difficulty in filling the open position. He
replied that Human Resources department has been receiving good response to the ads
placed. Committee discussed changes in staff and what Tuneberg is looking for in a new
Staff Accountant.
Adiournment
The meeting was adjourned at 3:50pm.
CONTRACT FOR AUDIT SERVICES
Audit Services Contract, dated this 25th day of March , 2002~, and made in
accordance with the requirements of ORS 297.405 through 297.555 between
("Auditor"), and the City of Ashland, Oregon, ("City") including the Ashland Parks and
Recreation Commission ("Commission")
City and Auditor agree:
1. Auditor shall conduct an audit of the accounts and fiscal affairs of th'e City and the
Commission, as of and for the years ending June 30, 2002, 2003, and 2004. The audit
will be made in accordance with the Minimum Standards for Audits of Municipal
Corporations as prescribed by law. The audit shall be undertaken in order to express an
unqualified opinion that the financial statements of the City and Commission are fairly
presented in conformity with generally accepted accounting principals consistently
applied, and to determine if the City and Commission have complied substantially with
appropriate legal. provisions. If the Auditor's opinion is other than unqualified, the
Auditor will fully discuss the reasons with the City in advance of issuing thH opinion.
2. The Auditor agrees that the services by Auditor shall be rendered by Roy Rogers,
CPA, or under this person's supervision, and that the work will be faithfully performed
with care and diligence. The services to be provided are detailed in the Proposal dated
January 31,2002, issued by Pauly, Rogers and Co., P.C.
3. Auditor is to begin the audit within 60 days following July 1 of each year and
complete the audit by November 15 or each year. Upon completion, writtHn reports are
to be delivered to the Audit Committee for consideration and review by the committee.
After review and acceptance by the Audit Committee, 25 copies of the final Commission
report shall be delivered to the City. The form and content of the reports shall be in
accordance with, and not less than, that required by the Minimum Standards for Audits
of Oregon Municipal Corporations.
4. City will provide for such financial statements as may be necessary to fully disclose
and fairly present the results of operations for the periods under audit and the financial
condition at the end of those periods. Although it is City's responsibility, the City reports
are to be reviewed and the Parks reports are to be drafted and prepared by the Auditor.
The cost of preparing such financial statements shall be included in the fee for
conducting the audit as set forth in paragraph 9.
6. Auditor is required to comply with chapter 3.12 of the Ashland Municipall Code to pay
a living wage, as defined in this chapter, to all employees performing work under this
contract and to any subcontractor who performs 50% or more of the service work under
this contract
7. Should unusual conditions arise or be encountered during the course of the audit
whereby the services of the Auditor are necessary beyond the extent of the work
1- Audit Contract
contemplated, written notification of such unusual conditions shall be delivered to the
City, who shall instruct the Auditor in writing concerning such> additional service. A
signed copy of each such notification and instruction shall be delivered limmediately to
the S~cretary of State by the City.
8. Either party may cancel this contract by giving notice in writing to the other party at
least 90 days prior to July 1 of any year.
9. City agrees to pay the Auditor for the City audit and the Commission aUldit for:
9.1. FY 2001-02, the sum of $ 33.100 and $ 9.000 respectively.
9.2. FY 2002-03, the sum of $ 34 .500 and $ 9.500 r1espectively.
9.3. FY 2003-04, the sum of $ 35.700 and $ 10.000 r1espectively.
The above fees do not take into account the increases due to implementation of GASB
34. Separate fees for those services will be negotiated separately with the City.
10. City and Auditor may extend this contract for up to two fiscal ye~rs beyond
FY 2003-04 upon such terms and conditions, as they shall mutually agree.
Pauly, Rogers and Co., P.C.
BY: '~7 7? ~~
Shareholder and Municipal Auditor
City of Ashland, Oregon
BY:
~~~~
rl IV 4N(fi ~~~~Je
Title:
2- Audit Contract
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Page 1 /1
CITY OF ASHLAND CITY RECORDE '
20 E MAIN ST.
ASHLAND, OR 97520 7/1/2004
(541 ) 488-5300
03324
VENDOR: 005746
PAULY ROGERS AND COMPANY.,P.C.
PO BOX 23684
PORTLAND, OR 97223
SHIP TO: Ashland Finance Dear1:ment
(541 ) 488-5300
20 E MAIN STREET
ASHLAND, OR 97520
FOB Point:
Terms: Net
Req. Del. Date: 3/25/2002
Speciallnst:
Req. No.:
Dept.: FINANCE
Contact: Lee TuneberQ
Confirming? No
THIS IS A REVISED PURCHASE ORDER
BLANKET PURCHASE ORDER
City Audit FY 2001-02
Commission Audit FY 2001-02
City Audit FY 2002-03
Commission Audit FY 2002-03
City Audit FY 2003-04
Commission Audit FY 2003-04 _~__>.~_~___~_>>.>~___
Revised purchase order 03/30/2005
Contract extended for additional (2)
fiscal years per letter dated March 16,
2005 and original contract dated March
25,2002
City Audit FY 2004-05
Parks Audit FY 2004-05
City Audit FY 2005-06
Parks Audit FY 2005-06
--- ---------------
33,100.00
9,000.00
34,500.00
9,500.00
35,700.00
> 1Q,QQQ~QQ
36,750.00
-----,.....~
10300.00
37,850.00
10,650.00
*** This is a change order. ***
BILL TO: Account Payable
20 EAST MAIN ST
541-552-2028
ASHLAND, OR 97520
SUIBTOTAL
TAX
FREIGHT
TOTAL
227 350.00
0.00
0.00
227,350.00
B 920.21100
E 710.03.08.00.604120
20 950.00
206400.00
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VENDOR COpy