11-07-2016 Council Packet - Laserfiche WebLink

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Given all the factors involved, including cost, a case could be made either way for retaining the present audit firm or for changing firms. The case for retaining the current audit firm is that they have a working knowledge of the city’s operations, they have worked well with staff in past audits, they would provide continuity of services, and they would reduce the city’s audit cost by $500 for 2016. It should be noted that the audit costs proposed above by CliftonLarsonAllen LLP, includes a discount of $3,000 in 2016, $2,000 in 2017, and $1,000 in 2018 pertaining to issues encountered by City staff in the prior year related to the rough preliminary draft of the financial statements. The case for changing firms would be to gain a fresh look into the city’s financial operations, to gain another financial perspective, and to save a maximum of $3,850 for the 2016 audit. Considering all of the above, staff is proposing a change to Redpath and Company to provide auditing services to the City of Lino Lakes for 2016, 2017, and 2018. Redpath and Company is a leading accounting firm in the Twin Cities with offices located in White Bear Lake and St. Paul. Redpath has been involved in providing audit and other services to governmental clients since 1971. A sample of MN Governmental entities that Redpath and Company has recently audited includes Andover, Blaine, Bloomington, Cambridge, Chanhassen, Columbia Heights, Fridley, and St. Louis Park. Staff has reviewed the qualifications and experience of the firm, partners, directors, and staff and is excited about the opportunity to partner with Redpath and Company. If the City Council is receptive to the change in audit firms, staff would also like to further discuss the “continuous audit” approach outlined in the Redpath and Company Audit Services Proposal to determine the viability of the approach for the City of Lino Lakes audit. Under this method of auditing, many of the transactions that would typically be tested during final fieldwork could be tested nearer to when they actually occurred. Finally, the Redpath and Company proposal also offers a $2,000 fee discount for any year in which fieldwork were to begin around the second or third week of May. Historically audit fieldwork has been completed around the first week of April. Staff is receptive to the delay in the start of fieldwork, provided the final audit reports would be issued in time to meet the Office of the State Auditor deadline of June 30. Requested Council Direction Staff is seeking Council direction regarding the selection of an auditing firm for the next three years (2016, 2017, and 2018). Following the discussion, if the Council decides to change audit firms, the item will be placed on the November 14th consent agenda for formal Council approval. Attachments None