HomeMy WebLinkAbout04 - Audit Service ContractFebruary 22, 1999
Agenda Item No. 4
CITY OF NEWPORT BEACH
ADMINISTRATIVE SERVICES DEPARTMENT
Resource Management • Human Resources • Risk Management • Fiscal Services • M.I.S. • Revenue • Accounting
DATE: February 22, 1999
TO: Honorable Mayor and Members of the City Council
FROM: Dick Kurth, Interim Director of Administrative Services
RE: Audit Service Contract
RECOMMENDATION:
Grant an exception to Council Policy F -15 on Annual Audits by extending our current auditor's
contract to a seventh consecutive year without going through a formal bid selection process.
BACKGROUND:
In 1993, the City requested bids for Annual Audit services and selected KPMG Peat Marwick to
perform the City's Annual Financial Audit and Single Audits. Starting with fiscal 1992 -93, KPMG
has satisfactorily performed the audit services for six consecutive years.
Per Council Policy F -15:
The City will normally award an audit contract for a three -year period. The audit contract
may be renewed for an additional three-year period, without going through a new invitation
to bid procedure, with the same firm, if the City Council is satisfied with the performance of
the auditors and authorizes the extension.
At this time, the City would normally invite interested audit firms to bid for the 1998 -99 audit
services. If a new auditor was selected through the bid process, the first year audit is particularly
disruptive and time consuming to many departments. Before the routine part of the audit is started,
the new auditors must familiarize themselves and document the control environment of the City
including all internal controls, automated systems, operating processes, procedures and Council
policies.
Although having a fresh perspective on our operations is a healthy process, taking on this task this
year will be particularly burdensome considering the recent departure of the former City Manager
and workloads of personnel serving in acting capacities within the Administrative Services
Department. Additionally, the new City Manager will undoubtedly need assistance getting
orientated to City operations.