HDC - Item 2B - Authorization To Seek Proposals For Audit Services0 •
'ROSEMEAD HOUSING
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!NM, 94 / DEVELOPMENT CORPORATION
STAFF REPORT
TO: HONORABLE PRESIDENT AND DIRECTORS
FROM: ANDREW C. LAZZARETTO, EXECUTIVE DIRECTOR /IriDmvi fl-trmtiW kGL
DATE: APRIL 24, 2007 /
SUBJECT: AUTHORIZATION TO SEEK PROPOSALS FOR AUDIT SERVICES
SUMMARY
The California Government Code requires that an independent audit of the City of
Rosemead's records, books, and inventories be conducted and a report issued thereon.
The City's current auditor McGladrey & Pullen has performed the audit for over 20
years. The current contract ended after audit services for fiscal year ending June 30,
2006.
The City Manager has employed the services of a new Chief Financial Officer whose
objectives include improving the reporting capabilities of the City of Rosemead. The
services provided by the independent auditor are to support the City's reporting function
as well as to provide ongoing technical support when necessary. The contracting of a
new independent auditor will facilitate the successful completion of the City's objectives.
Staff Recommendation
Staff recommends that the City Council authorize the City Manager to seek proposals to
contract with a new public accounting firm to perform the annual audits of the financial
statements of the City of Rosemead, the Rosemead Community Development
Commission, and the Rosemead Housing Development Corporation. In addition, the
accounting firm will also perform the audit to satisfy the requirement imposed by the
Single Audit Act and the U.S. Office of Management and Budget (OMB Circular A-133).
ANALYSIS
The City will solicit proposals from independent audit firms. Each firm will be evaluated
based on a competitive selection process. The evaluation of proposals will not be
limited to price alone, but will also take into consideration technical merit and firm
capability. The competitive selection will include firm and personnel qualifications,
APPROVED FOR HOUSING DEVELOPMENT CORPORATION AGENDA: (C 7"` G--:-
Housing Development Corporation Meeting
April 24, 2007
Page 2 of 2
methodology and the cost of contracted services.
FINANCIAL REVIEW
There is no fiscal impact associated with the approval of the authorization to seek
proposals for audit services. Upon selection of an independent audit firm for fiscal
2007, staff will provide the Mayor and City Council with the cost of the audits under the
terms of the contract. Funds for the fiscal year 2007 audit will be included in the fiscal
year 2007 Annual Budget.
City audit expenditures paid to McGladrey & Pullen for fiscal 2006 were $86,500. Staff
anticipates that proposed audit fees from the firm will be at least $70,000 for fiscal 2007.
Staff believes that the solicitation of bids from new independent accounting firms will
provide the City with improved internal control recommendations, and additional insight
and perspective in a more cost effective environment.
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
Submitted by:
Lisa Pedote
Director of Finance