HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 09/03/2013 - RESOLUTION 2013-077 AUTHORIZING THE PURCHASING AGEDATE: September 3, 2013
STAFF: John Voss
Gerry Paul
AGENDA ITEM SUMMARY
FORT COLLINS CITY COUNCIL 20
SUBJECT
Resolution 2013-077 Authorizing the Purchasing Agent to Enter Into a Professional Services Agreement with
McGladrey LLP, Certified Public Accountants, for Auditing Services.
EXECUTIVE SUMMARY
The purpose of this item is to authorize the Purchasing Agent to enter into a professional services agreement with
McGladrey LLP for auditing services.
A Request for Proposal (RFP) for audit services was issued to cover the next five years. The selection process
resulted in the selection of the McGladrey LLP. The auditor selection process was designed to ensure that the
selected firm exceeds the minimum requirements and has knowledge and experience in auditing similar entities.
An annual external audit by an independent certified public accountant is required by State Statute, City Charter and
most grant agreements.
STAFF RECOMMENDATION
Staff recommends adoption of the Resolution.
BACKGROUND / DISCUSSION
Audits Required
City - Article II, Section 17 of the City Charter requires the Council to provide for an annual independent audit of the
financial transactions of the City.
State - C.R.S. §29-1-603 requires that the governing body of each local government in the state shall cause to be
made an annual audit of the financial statements of the local government for each fiscal year.
Federal – Entities that expend $500,000 or more of federal awards are required to obtain a annual audit in accordance
with the Single Audit Act of 1996, OMB Circular A-133, and OMB Circular Compliance Supplement and Government
Auditing Standards. The City meets the threshold every year.
Audit Firm Rotation
The City does not have a policy on auditor rotation. However, the City Code limits service contacts to 5 years and
Purchasing Policies require an RFP. The following table shows a 30 year history of audit firms the City has engaged.
1983 Ericson, Hunt, Spelman 1993 Bondi 2003 Bondi
1984 Ericson, Hunt, Spelman 1994 Bondi 2004 Bondi
1985 KMG 1995 Bondi 2005 Bondi
1986 KPMG 1996 Bondi 2006 Bondi
1987 KPMG 1997 Bondi 2007 Bondi
1988 Price Waterhouse 1998 Bondi 2008 McGladrey & Pullen
1989 Price Waterhouse 1999 Bondi 2009 McGladrey & Pullen
1990 Price Waterhouse 2000 Bondi 2010 McGladrey
1991 Price Waterhouse 2001 Bondi 2011 McGladrey
1992 Price Waterhouse 2002 Bondi 2012 McGladrey
September 3, 2013 -2- ITEM 20
Selection Process
Proposal solicitation was sent to interested firms and those registered as vendors with the City of Fort Collins
Purchasing Division. The proposal was posted for pick up on the City’s Purchasing web page. The City received six
proposals to provide Audit Services to the City. Firms responding were:
• BKD LLP
• CliftonLarsonAllen LLP
• Eide Bailey LLP
• McGladrey LLP
• Rubin Brown
• Swanhorst & Company, LLC
A staff committee composed of the Chief Financial Officer, Controller/Assistance Financial Officer, Senior Accountant,
Senior Sales Tax Auditor, Finance Officer of the Poudre River Public Library District, Economic Health Analyst and
the Director of Purchasing and Risk Management read and rated the proposals using the following criteria:
• Scope of the Proposal
• Assigned Personnel
• Availability
• Motivation
• Cost and Work Hours
• Firm Capability
The firms eliminated were rated using these criteria. The top three rated firms were interviewed by the Council
Finance/Audit Committee on August 6.
The top three firms making presentations were
• CliftonLarsonAllen LLP
• McGladrey LLP
• BKD LLP
McGladrey LLP was the top ranked firm and the firm best suited to provide audit services. This was based on the
rating criteria, which included their breadth of audit experience, over all firm capability and value of their cost proposal.
FINANCIAL / ECONOMIC IMPACTS
The fees proposed by McGladrey, LLP are not to exceed $82,900 for 2013, $85,300 for 2014, $87,800 for 2015,
$90,400 for 2016 and $93,100 for 2017 fiscal audit years.
The fees proposed appear to be very reasonable from a cost perspective in relation to prior years and the amount of
service being rendered.
BOARD / COMMISSION RECOMMENDATION
The Finance Committee voted to recommend the Council approve a contract with McGladrey LLP for audit services.
The proposed resolution authorizes the Purchasing Agent to enter into an agreement for auditing services with
McGladrey LLP for the 2013 year audit, which will be renewable on an annual basis through 2017 with the approval
of the Finance/Audit Committee. The agreement can be terminated if the auditing services are deemed unsatisfactory.
ATTACHMENTS
1. McGladrey LLP Proposal
2. McGladrey LLP Cost Proposal
3. Draft minutes of Finance Committee August 6, 2013
ATTACHMENT 1
ATTACHMENT 2
Finance Administration
215 N. Mason
2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6788
970.221.6782 - fax
fcgov.com
Council Audit & Finance Committee
Minutes
8/6/2013
10:00 to 12:00
CIC Room
Council Attendees: Ross Cunniff, Bob Overbeck
Staff: Mike Beckstead, Gerry Paul, Mindy Pfleiger, John
Voss
Poudre River Public Library
District Staff:
Jeff Barnes
Interview Audit Firms
The Finance Committee heard presentations from three audit firms for selection of the City’s auditor for
the next 5 years. The firms were:
McGladrey, LLP
Clifton Larson Allen, LLP
BKD, LLP
Each firm gave a 15 minute presentation and the Committee took 45 minutes to ask questions.
The firms were rated using the rating criteria listed in the request for proposal.
The highest ranked firm was McGladrey, LLP.
Ross Cunniff and Bob Overbeck both recommend to the City Council that McGladrey, LLP be the City
auditor for the next 5 year period.
ATTACHMENT 3
RESOLUTION 2013-077
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE PURCHASING AGENT TO ENTER INTO
A PROFESSIONAL SERVICES AGREEMENT WITH
MCGLADREY LLP, CERTIFIED PUBLIC ACCOUNTANTS
FOR AUDITING SERVICES
WHEREAS, Article II, Section 17, of the City Charter requires the City Council to
provide for an independent annual audit by a certified public accountant of all books and
accounts of the City; and
WHEREAS, the Purchasing Agent has solicited proposals for the required audit from
accounting firms and received six proposals; and
WHEREAS, the proposals were reviewed by City staff and a staff Finance/Audit
Committee interviewed the top-ranked firms, which were rated on the scope of their proposals,
assigned personnel, availability, motivation, cost and work hours, and firm capability; and
WHEREAS, based on these criteria, McGladrey LLP was found to be the firm best
suited to provide auditing services to the City.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF
FORT COLLINS that the Purchasing Agent is hereby authorized to enter into a professional
services agreement with McGladrey LLP for auditing services for the 2013 year audit with
annually renewable terms at the option of the City Council Finance/Audit Committee for 2014
through 2017, for a fee not to exceed $82,900 for 2013, $85,300 for 2014, $87,800 for 2015,
$90,400 for 2016 and $93,100 for 2017 fiscal year audits.
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 3rd day of
September, A.D. 2013.
_________________________________
Mayor
ATTEST:
_____________________________
Chief Deputy City Clerk