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HomeMy WebLinkAboutFinal Minutes 02052007 Audit Committee Draft Minutes February 5, 2007 8:30am Council Chambers 1175 East Main Street Call to Order Chairman Levine called the Audit Committee meeting to order at 8:35 a.m. on February 5, 2007 in Council Chambers, 1175 East Main Street Ashland, Oregon. Roll Call Committee members Christensen, Levine, Morrison and Nutter were present. Lemhouse absent. STAFF PRESENT: LEE TUNEBERG, ADMINISTRATIVE SERVICES AND FINANCE DIRECTOR Approval of Minutes Audit Committee Minutes of December 20, 2006 Nutter moved, Christensen seconded to approve minutes as submitted. All Ayes. Request for Proposal Tuneberg spoke to the bid process and requirement for the meeting to review proposals to be an open meeting rather than a closed-door meeting where an evaluation panel evaluates all proposals in a confidential environment. Since the City received only one bid there was a discussion on how to proceed. Tuneberg said the Committee could reject all bids and go out for another advertisement or could review the one proposal received from Pauly, Rogers and Co., P.C. and decide on whether to accept the proposal now and recommend Council award the bid or the committee could interview the firm before deciding on how to proceed. Staff had distributed a telephone call log depicting the discussions with potential bidders who did not submit a proposal and why not. Log is attached. Committee discussed the scope of the bid, process to advertise and encourage participation and responses on the log. Tuneberg assured the Committee that all appropriate steps were taken and that the process was open and fair. Consensus was that some firms felt they could not submit a competitive bid, did not have the resources to do the job or could not afford to have staff travel to the Rogue Valley for the audit. The Committee discussed the benefit of rejecting the only proposal and re-advertising. Consensus was that we may alienate the one firm willing to do the job and may only get more expensive proposals…even worse, we may not get any other bids. It would delay the audit and issuance of the financial report for the fiscal year ending June 30, 2007. The Committee discussed the attributes of the RFP and the proposal received including a competitive quote for a scope that included additional work over the prior year (auditing Food & Beverage and Transient Occupancy Tax report preparers). Committee discussed whether there is any basis for rejecting the proposal from Pauly, Rogers and Co., P.C. Tuneberg said he did not have a legitimate reason for rejecting an audit firm that had worked well with the City, helped to comply with GASBS 34 in 2003 at a price thousands less than other bidders proposed, helped in preparing award winning reports and providing support throughout the year at a competitive price. However, as part of the reference checking discussion, staff distributed newspaper articles and a memorandum from Pauly, Rogers and Co., P.C. regarding audit issues at the City of West Linn and Portland Public Schools. Documents attached. The Committee discussed the required insurance coverage for professional contracts and the ability to end the three year contract early for an appropriate reason. Staff identified the RFP requirement for professional coverage and the contract clause allowing termination of services with 90 day notice prior to July 1 of any year. The Committee discussed the complaints filed against a past “partner” with Pauly, Rogers and Co., P.C. and the impact it could have on the City’s and Parks’ audits. The past partner and his staff did not work on our audit and will not in the coming years if the contract is awarded to Pauly. The committee felt it important to recognize that Pauly, Rogers and Co., P.C. is a viable bidder in that: The firm has audited Ashland and Parks and knows our operations. The firm has successfully guided the City through new auditing and reporting requirements. The firm has done special audits for the City at the request of the Committee and the Committee liked the work performed. The proposal was for $49,000 for both the City and Parks for the first year (a 1% increase over 2006’s $48,500) and increases only 3% for 2008 and for 2009. The scope was expanded to include a review of TOT and F&B reporting and the firm gave an equitable quote for the work included in the 1% increase. The Committee felt the firm has been professional in their work and presentations, often focusing on necessary improvements and upcoming reporting requirements. Audit issues raised at other agencies may help the firm review Ashland’s records even better. Ashland uses an Audit Committee – if the other agencies had such a committee they would not have gone 4 years without an audit and/or possibly avoided the problems they encountered. Nutter moved, Christensen seconded the motion to recommend to Council to award a three year contract to Pauly, Rogers and Co., P.C. at the price presented in the proposal. All Ayes. Committee directed staff to prepare the minutes and distribute a draft immediately for all members to review. If any subsequent questions arise they can be submitted in writing to Tuneberg for forwarding to Pauly, Rogers and Co., P.C. to respond to in writing rather than requiring a trip down to Ashland for discussion. Adjournment The meeting was adjourned at 9:55 a.m. Respectfully Submitted, Lee Tuneberg AUDIT COMMITTEE MEETING FEBRUARY 5, 2007 PAGE 3 OF 3