08.04 - Audit Proposals - Laserfiche WebLink

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AGENDA ITEM #8.4 REPORT TO CITY COUNCIL Date: November 9, 2004 Subiect: Audit Proposals Report: Proposals are attached. We received audit proposals from three firms: Mathias C. Justin, KDV, and LarsonAllen. Two of the three audit proposals quoted two audit methods to leave options open in dealing with GASB34. The City is currently required to do an accrual audit according to government standards. The reason for this type of audit has to do with a requirement of a Rural Development loan the city has through the USDA for the water tower. Without this requirement, the City would be able to do a cash basis audit,which would be less expensive and the City would not be required to meet the GASB34 requirements by the end of this year. There is a chance that the City could do a cash basis audit if we get a letter of authorization from the USDA. I have been in contact with the USDA office and they have indicated that they will consider our request,but offered no promises. Because GASB34 must be completed by the end of this year if we do not switch to a cash basis audit, I recommend that we budget for the accrual basis audit in case we do not receive authorization from the USDA. Staff feels that a different auditor may be able to provide a fresh look at the financial picture of the City. I have talked to the Deputy State Auditor about what the City expectations should be from an audit. She indicated that the City should request a management letter which would provide recommendations on how to improve operations and look at trends such as how to plan for future infrastructure expansion.