Agendas and Minutes

Municipal Audit Committee (View All)

Audit Committee Meeting

Agenda
Tuesday, January 11, 2005

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 "Tuneberg 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 assumptions from the previous year. He will email the Budgetary Meeting comparisons once available.

Audit Committee Members Christensen/Nutter m/s to accept minutes as presented. 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 years ago to discuss proposals from four or five different auditing firms throughout 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 level 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. Tuneberg 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 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. Committee 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 perspectives. 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.

Adjournment

The meeting was adjourned at 3:50pm.

Online City Services

UTILITIES-Connect/Disconnect,
Pay your bill & more 
Connect to
Ashland Fiber Network
Request Conservation
Evaluation
Proposals, Bids
& Notifications
Request Building
Inspection
Building Permit
Applications
Apply for Other
Permits & Licenses
Register for
Recreation Programs

©2024 City of Ashland, OR | Site Handcrafted in Ashland, Oregon by Project A

Quicklinks

Connect

Share

twitter facebook Email Share
back to top