Item 5AAGENDA ITEM # SA
JUNE 14, 2010
CITY OF ATLANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM: Selection of Audit Firm
SUBMITTED BY: Audit Selection Committee: City Commissioner John Fletcher, City Manager Jim Hanson
and Finance Director, Nelson Van Liere
DATE: June 6, 2010
BACKGROUND: The City Commission authorized the staff to advertise and take proposals for the
selection of an audit firm to perform annual audits of the City's financial statements for
a four year term with an optional two year extension. The City formed an Auditor
Selection Committee consisting of Commissioner John Fletcher, City Manager Jim
Hanson and Finance Director Nelson Van Liere.
The Committee met and discussed the proposals with regard to the established
mandatory evaluation criteria, technical qualifications and audit approach. Based on
the initial review of the five proposals submitted, the committee selected three firms to
interview. Those firms were interviewed on June 1, 2010. After the completion of the
interviews, the committee ranked the three finalists in the order of Purvis Gray & Co;
then Carr, Riggs & Ingram, LLC; then Powell and Jones, CPA. Pricing proposals were then
opened and considered along with the other evaluation criteria and an overall ranking
was determined. The Auditor Selection Evaluation Tabulation was completed indicating
that Purvis Gray & Co is the highest overall ranking from the Committee. The evaluation
tabulation is attached as part of this report as well as the minutes from the committee
meetings.
BUDGET: This expenditure crosses fiscal years due to the interim work performed in the summer.
There are sufficient funds in the Finance Department Budget for this year's cost and the
remainder will be included in subsequent year's budgets. The price proposal submitted
by Purvis Gray is the same as the proposal submitted in 2004 and the 2010 audit will be
less than the current year's budget.
RECOMMENDATION: Authorize the City Manager to enter into a contract for audit services with
Purvis Gray & Company for a four year period totaling $158,000 plus related service
costs if needed per the request for proposal specifications with an option to renew for
an additional two years if mutually agreed upon.
ATTACHMENT: Auditor Selection Evaluation Tabulation
Minutes from the March 19th Committee Meeting
Minutes from the May 25th Committee Meeting
Minutes from the June 1, 2010 Committee Meeting
CITY MANAGER APPROVAL:
AGENDA ITEM # SA
JiJNE 14, 2010
City of Atlantic Beach
Auditor Selection Evaluation Tabulation
Evaluation Criteria
Carr, Riggs &
In ram, LLC Joint -
Dufresne &
Associates /
KBLD, LLC
Powell &
Jones, CPA
Purvis
Gra & Co
Remick
Grou , PC
Mandato Elements
a. Independent and Licensed in
Florida
y
y
y
y
y
b. Adequate Continued Professional
Education
V
y
y
y
y
c. No Conflict of Interest y y y y y
d. Peer Review y y y y y
e. Followed Instructions y y y y y
Meets Mandatory Elements 11 y y y y
Technical Qualifications
A. Ex ertise and Ex erience
1. Past Ex erience 10 is 7 3 5 10 6
2 Staff and Resources (10 ts) 7 3 5 10 7
3. Volume of Ci Work (10 ts) 8 3 7 10 7
4ReferenceRes oones (10 ts) 10 6 ]0 10 5
Total Points 40 ts) 32 15 27 40 25
B. Audit A roach
1. Pro osed Staffin 10 ts) 9 5 9 10 8
2. # Hours b Se ent (10 ts) 9 10 10 8 5
3. Geo ra hic Location (5 ts) 4 4 4 4 3
4. Sam lin Techni ues (5 ts) 5 5 5 5 5
5. Anal ical Procedures (5 ts) 5 5 5 5 5
Total Points (35 rs 32 29 33 32 26
Cost Pro osal (a
2011 $50,350 $52,041 $37,750 $38,000 $34,000
2012 $50,350 $52,041 $37,750 $39,000 $36,000
2013 $52,625 $52,041 $37,750 $40,000 $38,000
2014 $52,675 $52,041 $37,750 $41,000 $40,000
Total over four ears $206,000 $208,164 $151,000 $158,000 $148,000
Total Points (b) 25 ts) 18 ] 8 25 23 25
Overall Score 82 62 85 95 76
(Note Onl In ormation
Total Estimated Hours 435 630 475 380 290
Avera e Cost er hour $118.39 $82.60 $79.47 $103.95 $127.59
Additonal Services:
SRF Loan Audit $4, 500 $3, 340 $5, 000 $0 $0
Federal Sin le Audit (annualav .) $3,625 $11,000 $3,000 $3,000 $4,000
State Sin le Audit (annual av . $3,625 No uote $3,000 $3,000 $4,000
(a) All-inclusive -includes out-of=pocket costs that may be incurred (i.e., travel, lodging, etc.)
(b) Formula for cost proposal ranking is Lowest of all cost proposals /respective cost proposal
X 25 points. Example: ($120,300/$180,350) X 25 = 16.75 or 17 rounded
H:Wudit Selection Committee\[RFP ]0-5-audit selection evaluation tabulation-fxls]Sheetl
AGENDA ITEM # SA
JiJNE 14, 2010
CITY OF ATLANTIC BEACH
Audit Selection Committee Meeting
Minutes of March 19, 2010 meeting
Call to Order: 9:00
Members Present:
John Fletcher, City Commissioner
Jim Hanson, City Manager
Nelson Van Liere, Finance Director
A brief overview of the selection process was discussed.
A list of prospective bidders was disbursed and briefly discussed.
A draft of the advertisement to be placed in the Financial News and Daily Record was disbursed
A discussion of the evaluation of the proposals was discussed, confirming the desire to include price
quotes in the proposals as part of the evaluation.
The evaluation criteria to be used are the same as previously used, including prices. The proposals will
be given to the committee members and individually scored using apre-formatted score sheet. The
committee will then meet to decide which firms to interview based on the evaluations.
The committee decided to begin the process two weeks earlier than originally proposed in the draft RFP
provided. All necessary changes to the calendar and proposed RFP will be adjusted to reflect the new
time-line.
The committee agreed to meet one week after the deadline for submittal during the week of May 25tH
The committee briefly discussed the approval of the revised Audit Selection Policy indicating the
removal of the mandatory auditor rotation clause.
It was agreed that Nelson Van Liere would handle the administrative duties of the committee.
Nelson Van Liere made a motion to adjourn the meeting at 9:38.
Minutes Approval:
John Fletcher, City Commissioner
Jim Hanson, City Manager
Nelson Van Liere, Finance Director U
AGENDA ITEM # SA
JUNE 14, 2010
CITY OF ATLANTIC BEACH
Audit Selection Committee Meeting
Minutes of May 25, 2010 meeting
Call to Order: 9:00
Members Present:
John Fletcher, City Commissioner
Jim Hanson, City Manager
Nelson Van Liere, Finance Director
The meeting was called to order for the purpose of evaluating five proposals and selecting three to
interview.
The proposals submitted were:
1. Carr Riggs and Ingram, LLC from Gainesville, Florida
2. Purvis Gray & Company, LLP from Gainesville, Florida
3. Powell and Jones Certified Public Accountants from Lake City, Florida
4. Reznick Group, P.C. from Atlanta Georgia
5. Dufresne & Associates, CPA, PA from Orange Park, Florida
The board discussed that all firms met all of the mandatory elements of the RFP. Dufresne & Associates
had however performed some work for the City in the last five years, yet the presentation claimed they
had not. There was consensus from the committee that each firm would be capable of performing a
standard audit.
The technical qualifications were discussed in general, and based on the proposals it was relatively a
quick decision to eliminate two of the proposals. The Reznick Group from Atlanta appeared to be
heavily into housing authorities and Federal Government programs. Only a few municipal governments
were included in their references and none were Florida clients.
Dufrense's references were also limited in municipal government experience and one of the references
queried was negative and indicated that the engagement was very difficult and the firm contract was
terminated after one year.
The committee also discussed the merits of the other three proposals indicating that all members of the
Committee were interested in interviewing the remaining three firms before we ranked them
specifically on the written proposals.
The committee decided to schedule three interviews for June 1, and a decision would be made
subsequent to the last interview. Price proposals would be opened after the interview to ensure that
price was not the primary deciding factor in the selection process.
The Finance Director was instructed after all checked calendars for availability to interview as follows:
8:OOam Powell and Jones Certified Public Accountants from Lake City, Florida
AGENDA ITEM # SA
JUNE 14, 2010
8:OOam Powell and Jones Certified Public Accountants from Lake City, Florida
9:OOam Carr Riggs and Ingram, LLC from Gainesville, Florida
1:30pm Purvis Gray & Company, LLP from Gainesville, Florida
2:15pm Discussion and selection.
The Finance Director agreed to set up the interviews and bring price proposals to the June 1 meeting.
Adjourn.
Minutes Approval:
John Fletcher, City Commissioner
Jim Hanson, City Manager
Nelson Van Liere, Finance Director ~ (~~... `
AGENDA ITEM # SA
J1JNE 14, 2010
CITY OF ATLANTIC BEACH
Audit Selection Committee Meeting
Minutes of June 1, 2010 meeting
Call to Order: 8:00
Members Present:
John Fletcher, City Commissioner
Jim Hanson, City Manager
Nelson Van Liere, Finance Director
The meeting was called to order for the purpose of conducting interviews.
Each interview was conducted by asking each applicant the same basic line of questioning. Each was
provided an opportunity to introduce staff, discuss the proposals, and highlight their respective firm's
strongest attributes. Each firm was asked about who would actually be on the engagement team and
on-site during fieldwork. Emphasis on the amount of time the upper management team members would
be present. Also discussed with each firm were some hot topic issues such as pension funding, fraud
detection and the general State of Florida financial condition of municipalities. We discussed with each
firm, the experience each of them had in reporting negative or serious issues of concern to the
management and how they handled that in the past. Each indicated that discussions were held with
management at least one level above the parties involved. The issue of reporting findings to the elected
officials while remaining independent was also discussed with respect of their ability to communicate
difficult issues to elected officials while remaining sensitive to public disclosure fall out that may be
associated with negative reports. Each briefly discussed Information Technology knowledge and each
indicated some experience with Atlantic Beach's current financial software. At the conclusion of each
interview, the committee discussed the particular issues of the applicants and discussed overall
impressions of the desirability to engage each.
After all interviews were completed, the committee immediately held discussions and deliberated the
merits of each applicant.
It was quickly apparent that Purvis Gray was the top choice and after considerable discussion, a
consensus was reached that Carr Riggs and Ingram was number two and Powell & Jones was number
three. Familiarity with our issues, an extensive list of municipal clients our size, positive references and
that the partner in charge would be present for the fieldwork where the primary reasons for selecting
Purvis Gray above the others. Interviewing for Purvis Gray were Ron Whitesides and Clint Boone. They
are the team that performs the audit, supported with a staff that is very familiar with our engagement.
Once the firms were ranked based on the mandatory elements and technical qualifications, the
Committee then opened the price proposals. The price proposals submitted were examined, and it was
quickly evident that our first choice of Purvis Gray was the second lowest to Powell & Jones. However
the minor differences in the proposed pricing was not enough to change the overall ranking. The
consensus of the committee was to recommend to the City Commission to enter into an agreement with
Purvis Gray & Co.
AGENDA ITEM # SA
JtINE 14, 2010
Meeting Adjourned at 2:45pm.
Attached is an Auditor Selection Evaluation Tabulation
Minutes Approval:
John Fletcher, City Commissioner
Jim Hanson, City Manager
Nelson Van Liere, Finance Director ~/