HomeMy WebLinkAbout10 Audit Proposals Agenda Item # 10
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Memorandum
To: Board of Directors
From: Peter Holzmeister
Date: October 4, 2005
Subject: Audit proposals
Enclosed are three proposals from audit firms to provide audit services for the
District. We would have enclosed these documents in the packet delivered on
Friday, but we had only one at that time. We also have a verbal expression of
interest from KPMG that may be worth talking about on Wednesday evening.
Agenda Item # / 0
Memorandum
To: Board of Directors
From: Peter Holzmeister
Date: September 30, 2005
Subject: Audit proposals
Why this matter if before the Board of Directors: This matter involves selection of a firm to
audit to financial statements of the District. This is a Board function.
History. The Board approved a form of Request for Proposals (RFP) for audit services and
directed staff to solicit letter of interest and statements of qualifications from a fairly extensive list
of firms. We had certain goals in mind. We were interested in changing auditor at least every
three years. We were also hoping to save money by considering engaging a smaller firm with a
lower overhead. Our list of firms that received our RFP consisted primarily of small firms.
New information: We received only two written responses. We also had telephone
conversations with a firm that intends to submit a letter. This results in three firms to choose
from. We have also had conversations with Tim McCann of KPMG, asking whether the Board is
strongly committed to changing audit firms at the end of a three year engagement. They would
like to continue as our auditor, but do not want to make a proposal if they will not be considered.
Tim McCann tells us that there disadvantages to changing auditors on a three year rotation. He
would like the chance to discuss this with the Board. We have heard from at least one other
firm that did not submit a letter of interest that they will not accept a client who limits the
engagement to three years.
So here are issues for the Board to decide:
1. Are you comfortable with having only three firms to interview?
2. Do you want to reconsider the idea of changing auditors on a three year schedule?
3. Once you choose to interview the three (or four firms if you include KPMG) audit firms
that have expressed interest, do you want them to submit a final proposal prior to the
interview (which is not the process we had initially established)
Recommendation: I do not have a recommendation. I would like staff to remain out of this
deliberative process as much as possible.