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12 <br />MEMORANDUM <br />DATE: August 16, 2011 <br />TO: Mayor and City Council <br />FROM: Jay Hartman, Interim City Manager <br />Roger Larson, Finance Director <br />ITEM: CITY AUDITOR — HLB TAUTGES, REDPATH <br />CONTRACT EXPIRES 12/31/11 <br />For the past 6 -years, HLB Tautges Redpath has audited the City's financial and <br />accounting records. Upon hiring this firm, the challenge asked of them was to work with <br />City staff to improve our financial reporting. <br />Looking back on this goal, in 2006 the City had a total of 9 audit findings (2 material <br />weakness' and 7 deficiencies). Comparing this to our last audit, (0 material weakness' <br />and 2 deficiencies), improvement has been on-going. To correct the 2 remaining <br />deficiencies, it would require the City to hire additional staff which is not cost effective. <br />At the August 1, 2011, work session staff discussed with the City Council the Auditor's <br />performance and how to proceed with negotiating a future contract for auditing services. <br />After discussing the options of going out for RF P's or negotiating a contract with our <br />present auditor, the City Council directed staff to negotiate a 3 -year agreement with IILB <br />Tautges, Redpath which included a zero percent increase for the next three years, <br />The City is in receipt of an engagement letter agreeing to provide auditing services for <br />auditing years 2011, 2012 and 2013 at the same cost as the 2010 audit ($47,225). <br />Recommendation: <br />Council approves resolution #I 1-050 approving HLB 'Tautges, Redpath, Ltd. as the City <br />Auditor for auditing years 2011, 2012 and 2013. <br />