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Home My WebLink AboutResolutions - 2004.06.17 - 27552MISCELLANEOUS RESOLUTION 104149 June 17, 2004 BY: Finance Committee, Chuck Moss, Chairperson IN RE: BOARD OF COMM/SSIONERS - AWARD OF CONTRACT FOR FISCAL YEAR 2004 THROUGH FISCAL YEAR 2008 INDEPENDENT ANNUAL AUDITS To the Oakland County Board of Commissioners Chairperson, Ladies and Gentlemen: WHEREAS the County is required to hire an independent party to conduct annual audits of the County's financial statements; and WHEREAS the contract with the current independent auditor, Pricewaterhouse Coopers, expires on June 30, 2004; and WHEREAS in March 2004, the County issued REP #2030901 to conduct the annual independent audit of the County's financial statements; and WHEREAS the Audit Subcommittee has reviewed proposals submitted by various firms and recommends contracting with Plante and Moran, LLP to conduct the annual independent audit of the County's financial statements for the fiscal year ending September 30, 2004 through the fiscal year ending September 30, 2008 with an option to include Fiscal Year 2009 and Fiscal Year 2010; and WHEREAS Plante & Moran's proposal includes audit fees of $192,000 for the first year, with inflationary adjustments each succeeding year; and WHEREAS the County Executive's FY 2005 and FY 2006 Budget recommendation will include sufficient funding, under the Board of Commissioners, to cover the cost of this agreement. NOW THEREFORE BE IT RESOLVED that the Board of Commissioners awards a contract to Plante & Moran, LLP to conduct the annual independent audit of the County's financial statements for the fiscal year ending September 30, 2004 through the fiscal year ending September 30, 2008, with an option to include Fiscal Year 2009 and Fiscal Year 2010. BE IT FURTHER RESOLVED that the May 24, 2004, memo from the Administrative Audit Evaluation Committee to the Audit Committee regarding its recommendation for Professional Audit Services be attached to this resolution. Chairperson, on behalf of the Finance Committee, I move adoption of the foregoing resolution. FINANCE COMMITTEE FINANCE COMMITTEE Motion carried on a roll call vote with Jamian voting no and Webster absent. COUNTY MICHIGAN DEPARTMENT OF MANAGEMENT AND BUDGET FISCAL SERVICES DIVISION 'Timothy J. Soave, Manager COAKLANDT- L. BROOKS PATTERSON, OAKLAND COUNTY EXECUTIVE Commissioner Bill Bullard, Chair, Audit Committee Commissioner Pete Webster, Member, Audit Committee Commissioner Vince Gregory, Member, Audit Committee From: Administrative Audit Evaluation Committee Harvey Wedell, Senior Analyst, Board of Commissioners Tim Soave, Manager, Fiscal Services Penny Cremer, Chief, Fiscal Services Bruce Karmami, Chief, Auditing Scott Guzzy, Chief, Purchasing Subject: Recommendation on RFP # 2030901 Professional Audit Services Date: May 24, 2004 In March, the County issued RFP # 2030901, seeking an independent accounting firm to conduct the annual external audit of the County's financial statements. In response to that RFP, four (4) firms submitted proposals: Pricewaterhouse Coopers (the current auditor), Plante & Moran, LLP, Relunami Robson, CPAs, and Vichow Krause and Company, LLP. A summary of the first year (FY 2004) cost and committed hours, appears below: Pricewaterhouse Coopers 1,500 hours $224,055 Plante & Moran 1,800 hours $192,000 Vichow, Krause 2,000 hours $184,000 Rehmann Robson 1,836 hours $176,100 (Please note that comparisons of hours and dollars between firms is complicated by the fact that firms proposes different combinations of partner hours, senior hours, and staff , , . . hours) After reviewing and discussing the proposals, the Evaluation Committee decided to interview Pricewaterhouse Coopers, Plante & Moran, and Rehmann Robson. The interviews were conducted on May 19, 2004. Based upon the proposal review and the interviews, the Evaluation Committee recommends that the Audit Committee approve a five-year contract with Plante & Moran, LLP to conduct the annual external county audit. To: EXECUTIVE OFFICE BUILDING 34 EAST • 1200 N TELEGRAPH RD • PONTIAC MI 48341-0403 • (248) 858-0807 • FAX (248) 452-9467 The decision to change auditors is not taken lightly. The committee thoroughly discussed the commitment of staff time required by a new auditor. Additionally, this process will coincide with the planned implementation of the PeopleSoft financial system, which will also increase work requirements. However, even with this concern, the Evaluation Committee believes the Plante & Moran is the best choice to perform this required function. Below, is a brief summary of the reasons for this recommendation: Plante & Moran - Commitment from two experienced partners. Quicker response to questions. - Leaders in governmental accounting in the state. Can call upon these individuals for a number of questions, a real coup to have these two individuals. - Staff experienced with Michigan governmental accounting. - Leaders at the state level in GASB 34 implementation and other GASB pronouncements. - Because of this, they can provide more management suggestions and comments. - Have audited a number of major communities (Novi, Sterling Heights, Farmington Hills), also the Road Commission for Oakland County, certain State of Michigan audits, and several district courts. - Have audited PeopleSoft clients. Will utilize PeopleSoft individuals within company ranks. - Both internal control and extensive transaction testing. - We will be a big client for them, important for them to provide us service. Pricewaterhouse Coopers Ongoing concerns regarding responsiveness. The County's experience is that reviews and comments by the firm were delayed to the end of the process, causing additional, unnecessary work. Senior Partner placed responsibility for last year's delay onto subordinate. Price much higher than other vendors, with less proposed hours, even though they are the most experienced with us. Time for someone new, fresh set of eyes. Rehmann Robson No experience with government of our size. Concern regarding Wall Street view of our audit. Only 35 government group associates. Audit approach totally inappropriate for a government of our size. Use a balance sheet approach only, very little on internal controls. - We need both approaches - They do not understand the amount of testing they are committing to. No PeopleSoft experience. Hesitant regarding how PeopleSoft implementation would impact their pricing scheme, however they admitted that additional cost may be required to cover the conversion. Vichow Krause Experience with big governments out of state, very little Michigan experience. Subcontracting relationship, not clear of how this would work. In conclusion, the Administrative Audit Evaluation Committee recommends the county contract with Plante & Moran, LLP to conduct the required annual external county audit for the period July 1, 2004 through June 30, 2009 (covering fiscal years 2004- 2008). G. William Caddell, County Clerk Resolution #04149 Moved by Moss supported by Bullard the resolution be adopted. Discussion followed. June 17, 2004 Vote on resolution: AYES: Coulter, Crawford, Douglas, Gregory, Hatchett, Knollenberg, KowaII, Law, Long, McMillin, Middleton, Moss, Palmer, Patterson, Potter, Rogers, Scott, Suarez, Webster,Wilson, Zack, Bullard, Coleman. (23) NAYS: Jamian. (1) A sufficient majority having voted therefore, the resolution was adopted. I NOM MOVE ME FORKING IESOLUTION STATE OF MICHIGAN) COUNTY OF OAKLAND) I, G. William Caddell, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on June 17, 2004 with the original record thereof now remaining in my office. In Testimony Whereof, I have hereunto set my hand and affix, 3(d theXeal of the Co)trity of Oakland at Pontiac, Michigan this 17th day of June, 2004.