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HomeMy WebLinkAbout2005-043 Contract - Pauly Rogers & Co ~M;'k~;""~,.. ~ ffi!' ~I' ~ - ~' . j" ,,;~[~: .,,11 "i~ 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 ~~, 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 ~ VENDOR COpy