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Item 8G ~• CITY OF ATLANTIC BEACH ~„ CITY COMMISSION MEETING STAFF REPORT AGENDA ITEM: Selection of Audit Firm AGENDA ITEM #8G JUNE 28, 2004 SUBMITTED BY: Audit Selection Committee: City Commissioner Paul Parson, City Manager, Jim Hanson and Finance Director, Nelson Van Liere DATE: June 19, 2004 BACKGROUND: The City Commission authorized the staff to advertise and take proposals for a new audit firm after the previous firm was unable to continue to provide services at the contracted amount. Staffthen recommended to the City Commission that the City seek proposals for new auditors rather than seek approval for a change order to the James Moore & Company four-year contract of an additional $10,000 per year. The City advertised for proposals in May and received four proposals. The Audit Selection Committee met and discussed the proposals with regard to the evaluation criteria including mandatory criteria, technical qualifications, audit approach including staff and price. The committee selected two of the firms to ~* interview, as they were clearly superior. Representatives from Davis Monk & Co., and Purvis Gray & Co. were invited to discuss their proposals with the committee giving us a chance to meet the staff that would be performing the """ audit. Both firms interviewed very well. The committee then scored the proposals using the predetermined criteria and related weights. The evaluation for the final three firms is attached. The proposals were evaluated in accordance with the City's Audit Selection Procedures and the Request for Proposal guidelines. Purvis Gray & Co. received the highest overall ranking and therefore receives the committee's recommendation. BUDGET: This expenditure crosses fiscal years due to the interim work to be performed in the summer. There are sufficient funds in the Finance Department budget for this years cost and the remainder will be included in subsequent year's budget recommendations. The Purvis, Gray & Company proposal is approximately $5,000 less than a renewed James Moore & Company request per year. RECOMMENDATION: Authorize the City Manager to enter into a contract for audit services with Purvis, Gray & Company for afour-year period totaling $158,000 plus related ~ services costs if needed per the Request for Proposal specifications with an option to renew for an additional two years if mutually agreed upon. ~„ ATTACHMENT: Evaluation Tabulation CITY MANAGER APPROV AGENDA ITEM #8G JUNE 28, 2004 City of Atlantic Beach Auditor Selection Evaluation Tabulation FY 2003 - 04 Evaluation Criteria Davis, Monk & Com an James, Moore & Company Purvis, Gray &Com an Mandato Elements a. Independent and Licensed in Florida Z' Y Y b. Adequate Continued Professional Education Y Y Y c. No Conflict of Interest Y Y Y d. Peer Review Y Y Y e. Followed Instructions Y Y Y Meets Mandato Elements Y Y Y Technical Qualifications A. Ex ertise and Ex erience 1. Past Ex erience (10 ts) 8 6 10 2 Staff and Resources 10 ts) 8 6 10 3. Volume of Cit Work 10 ts) 10 10 10 4 Reference Res onses (10 ts) 10 8 10 Total Points 40 is 36 30 40 B. Audit A roach 1. Pro osed Staffin 10 ts) 9 7 10 2. # Hours b Se ent (10 ts) 9 6 10 Total Estimated Hours 400 412 435 3. Geo a hic Location 5 ts) 5 5 5 4. Sam lin Techni ues 5 is 5 5 5 5. Anal ical Procedures 5 is 5 5 5 Total Points (35 ts) 33 28 35 Cost Pro osal 2004 $34,000 $43,250 $38,000 2005 $34,000 $42,906 $39,000 2006 $35,400 $44,865 $40,000 2007 $36,100 $47,010 $41,000 Total over four ears $139,500 $178,031 $158,000 Total Points * 25 is 25 20 22 Avera e Cost er hour ote Onl) $87.19 $108.03 $90.80 Overall Score 94 78 97 * 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 ~w City of Atlantic Beach Audit Selection Committee Minutes from June 15, 2004 meeting. Meeting began at 2:15p.m. Present at the meeting: City Commissioner Paul Parson City Manager, Jim Hanson Finance Director, Nelson Van Liere, CPA The committee discussed the following points: AGENDA ITEM #8G JUNE 28, 2004 • Confirmed that all proposals were reviewed. • The Finance Director distributed evaluation forms. The information provided included some summary information from the proposals. • Nelson Van Liere reported that references for all proposals were contacted by the Finance staff and were all good. • Based on the initial review of proposals, a decision was made to interview two of the proposers. Davis Monk & Co. Purvis Gray & Co. • The remaining two would be optional interviews depending on how the top two choices went. • Dufresne & Associates was not selected for an interview due to low number of municipal audits, small number of overall staff and price. • James Moore & Co. is to be an alternate due to our recent experience with the firm over pricing and firm management style. It was decided that they should be the third firm presented to the City Commission, as the selection committee procedures require. Meeting adjourned at 3:OOp.m. ~" City of Atlantic Beach Audit Selection Committee Minutes from the June 17, 2004 meeting. Meeting began at 2:OOp.m. Present at the meeting: City Commissioner Paul Parson City Manager, Jim Hanson Finance Director, Nelson Van Liere, CPA AGENDA ITEM #8G JUNE 28, 2004 Mr. Alan Nast, CPA, PA and Tina Robinson, CPA were introduced and were allowed ample time to describe themselves and their firm's ability to provide audit services for the City of Atlantic Beach. Questions were asked regarding firm qualifications, staffing and procedures as well as availability. The interview lasted until 3:OOp.m. After the interview, the committee discussed the various highpoints. One notable issue with the Davis Monk fum was the confusion surrounding the team that would actually be performing the audit. Although it was clear that Tina Robinson would be a part of that team, the primary Steven Catel was not present. Mr. Catel was assigned to this team after the member that was to run our engagement that was included in the proposal was actually never hired by the firm. !~"" Highpoint was that Mr. Nast is very well qualified and he expressed his persistence in trying to get our business over the years and the main staff person on the engagement has a number of years experience with the City of Palatka and ~" seemed to be quite capable of performing the required tasks. The committee discussed the depth of the staff as an issue of concern. AT 3:OOp.m. Purvis Gray &Co was provided the same opportunity to describe their firm and their ability to deliver a quality product to the City. Mr. Ron Whitesides CPA and Mr. Martin Cass, represented the firm and are both to be ever present during the engagement. A third staff member would also be in the field with them. The interview lasted about an hour. ~"" The committee was assured that the partner in charge of the audit would be present with his team during fieldwork and available at all times. The audit team has been together for years including prior audits of the City of Atlantic Beach. '"~ The fum has extensive resources and depth of staff. They are committed to the fee quoted as they have always been in the past. After the interview, the committee remained and discussed the interview. The committee discussed the issue of timing regarding the selection of Purvis, Gray and Company after atwo-year period with James Moore & Company. All members agreed that the objective of rotating auditors had been met and choosing Purvis, Gray & Company should not be an issue. AGENDA ITED'I #8G JUNE 28, 2004 Page 2 of 2 ~, Audit Selection Committee minutes 6/17/04 The committee then scored the firms using the evaluation tabulation sheet and Purvis Gray did in fact rank the highest. We then agreed that the method and selection was fair and agreed to propose to the City Commission a recommendation to award a contract to Purvis, Gay & Co. Meeting Adjourned S:OSp.m. +~.