Agenda Addition: Item L5

The latest revision to the agenda and council packet for this coming Monday's meeting has this addition under "New Business": "Authority to Contract Additional Services from City Auditor."

Since Assistant Finance Director Gayle Bauman departed this past week, our city's finance department now appears to have four employees (a secretary, a payroll technician, and two accounting technicians). With a city budget around $30 million, there are apparently a few financial management tasks that do still need to be taken care of here and there. Copeland's memo to the council recommends hiring our current independent auditors to shoulder some of the burden:

Those additional services are as follows:

1. Preparation of the 2006 Comprehensive Annual Financial Report - $8,000 - $9,000

2. Implementation of Government Auditing Standards Board Statement, GASB,44
Economic Condition Reporting - $1,000 - $2,000

3. Workpaper/schedule preparation for the 2006 Audit – Not to exceed $5,000.

Recommendation: Adopt a motion giving the City Manager authority to contract with the City’s Auditor, HLB Tautges Redpath for additional services up to the amount of $16,000.

I don't know if it's standard practice in city government to hire your auditor as a financial consultant to perform additional services. I seem to recall the mixing of auditing work with other kinds of contractual services has led to problems for some entities in the past, at least in other contexts (the name Arthur Anderson springs to mind).

I mean, does it make sense to have the same firm both prepare an annual report and then audit it? Will we at least be reassured that individual staff from this firm who audit the books will be different from the ones who prepare them?

In the more than two weeks since Bauman announced her resignation, was Copeland unable to shop for bids from multiple accounting firms to offer to the city council for interim financial assistance? Or were none willing to bid?