To: Honorable Mayor and Members of Town Council
From: Trish Muller, Finance Director
Title
Resolution Authorizing the Engagement of BKD, LLP for Financial Auditing Services
Body
________________________________________________________________________________
Executive Summary
On July 24, 2018, the Finance Department issued a Request for Proposal seeking auditing services for the fiscal years December 31, 2018 through 2020. A selection panel comprised of the Assistant Town Manager, Finance Director, Assistant Finance Director, Accounting Manager, Accounting Supervisor and Finance Project Analyst conducted interviews on September 18.
Staff notified the Audit Committee on October 11 that the selection panel recommends BKD, LLP to conduct the Town’s auditing services for the fiscal years December 31, 2018 through 2020.
The purpose of this Resolution (Attachment A) is for Town Council to approve the engagement of BKD, LLP as the Town’s auditors.
Discussion
Since 2013, Eide Bailly, LLP has served as the Independent Auditor and successfully completed the annual financial audit and consent letters for the Town of Castle Rock. The Government Finance Officers Association (GFOA) guidance and industry standards recommend that municipalities bid out audit services every five years. As such and as the Town continues to grow, the Finance staff places great importance on evaluating other independent auditors who could not only perform a financial audit but also provide tools and technical guidance for the implementation of new pronouncements and other complex transactions.
Six certified public accounting firms submitted proposals to perform the annual financial audit for the Town. Proposed fees for annual audit services ranged from $51,000 to $74,400 and fees for single audit services ranged from $4,500 to $8,300 per program for 2018 with annual increases through 2020. A “Single Audit” represents audit procedures and reporting requirements performed for entities receiving greater than $750,000 in federal funds. In 2018, the Town has received $1,330,000 in federal funds related to the Meadows Parkway Reconstruction project and accordingly will need to have a Single Audit performed.
For each proposal submitted and for guidance during selection of firms to interview, the panel used the following criteria:
Content of the proposal
1. Qualifications in the area of experience, education and certifications for the firm and the staff to be assigned to this project
2. Fee range of proposal
3. Continuity in the personnel assigned to this project and a demonstration in their estimate of time on this project that they plan to have enough experienced and higher level staff supervising the audit on a constant basis
4. Location of firm
5. References from clients of similar projects
After reviewing the proposals based on the above criteria, the panel selected the following firms to make a presentation on their services and why they would do the best job for the Town:
1. BKD, LLP and
2. Eide Bailly, LLP
After completion of the firms’ presentations, the panel discussed the merits of each firm and unanimously agreed to recommend BKD, LLP to the Audit Committee as the Town’s auditors for fiscal years December 31, 2018 through 2020.
Along with cost, the panel considered many other important factors when selecting the auditing firm. BKD, LLP is an established and highly regarded firm with many years of government auditing experience. BKD’s experience with larger governments coupled with their extensive governmental knowledge and resources makes them an excellent fit for the Town as it continues to grow and experience new and complicated finance structures. BKD will bring a fresh perspective to the auditing process and represents the most responsive, reasonable and beneficial Independent Auditor for the Town of Castle Rock.
Budget Impact
The cost quoted for audit services from BKD, LLP was $56,775, $58,895 and $61,670 and for single audit services (if required) was $8,300, $8,590 and $9,060 per program for the years ended December 31, 2018, 2019 and 2020, respectively.
Staff Recommendation
Staff recommends that Town Council approve the Resolution as written.
Proposed Motion
“I move to approve a Resolution authorizing the engagement of BKD, LLP for financial auditing services.”
Attachments
Attachment A: Resolution
Exhibit 1: Services Agreement