HomeMy WebLinkAboutRES NO 101-11RESOLUTION NO. 10 1 -4 1
A RESOLUTION OF THE COUNCIL OF THE CITY OF BAKERSFIELD
ADOPTING COUNCIL POLICY ON AUDIT REPORTING PRACTICES
AND SELECTION OF AUDIT FIRMS
WHEREAS, the City Council adopted a Council Policy on Audit Reporting
Practices in February 2005; and
WHEREAS, the policy adopted in 2005 required the mandatory rotation of
audit firms every five years; and
WHEREAS, the Government Finance Officers Association (GFOA) is a
nationally recognized association of cities and counties throughout the Unite d
States; and
WHEREAS, the GFOA best practices supports allowing the audit firm
currently providing services to participate in future competitive selection
processes where availability of well qualified public sector audit firms may be
limited; and
WHEREAS, the Budget and Finance Committee reviewed the current
policy at their September 26, 2011 committee meeting; and
WHEREAS, the Budget and Finance Committee recommend amending
the current policy to allow the current audit firm to participate in future
competitive selection processes; assuming that past performance of the current
auditors has proven satisfactory.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Bakersfield
as follows:
1. The foregoing recitals are true and correct and incorporated in their
entirety herein by reference.
2. This Resolution supersedes the previous audit practices policy
adopted by Resolution 040-05.
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HEREBY CERTIFY that the foregoing Resolution was passed and adopted
by the Council of the City of Bakersfield at a regular meeting thereof held on
OCT 1 9 2011 by the following vote:
,i ✓
COUNCILMEMBER SALS, i ~ WEIR, COUvC CH, HANSON, SULLIVAN, JOHNSON
NOES: COUNCILMEMBER /'N10y"4
COUNCILMEMBER
ABSEN COUNCILMEMBER
44Z A"~
ROBERTA GAFFORD, QWt
City Clerk and Ex Officio Clerk of the
Council of the City of Bakersfield
APPROVED OCT 19 2011
By
HARVEY L. HALL
Mayor
APPROVED AS TO FORM:
VIRGINIA GENNARO
City Attorney
By A
JOSHUA H. RUDNICK
Deputy City Attorney II
VG:CKI/Isc/nks fin
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Council Policy Statement
Independent Auditing Services for Annual Financial Audit
Background - The Government Finance Officers Association (GFOA) has long
recommended that state and local governmental entities obtain independent
audits of their financial statements performed in accordance with the appropriate
professional auditing standards. Properly performed audits play a vital role in the
public sector by helping to preserve the integrity of the public finance functions
and by maintaining citizens' confidence in their elected leaders.
It is the City Council's desire to incorporate the recommendations of GFOA into a
Council Policy regarding procurement of annual financial auditing services.
Recommendations - The City Council makes the following policy statements
and recommendations regarding the selection of auditing services:
- The scope of the independent audit should encompass not only the fair
presentation of the basic financial statements, but also the fair
presentation of the financial statements of individual funds and
component units. The cost of extending full audit coverage to the
financial statements of individual funds and component units can be
justified by the additional degree of assurance provided.
The City of Bakersfield shall require in their audit contracts that the
auditors of their financial statements conform to the independence
standard promulgated in the General Accounting Office's Government
Auditing Standards even for audit engagements that are not otherwise
subject to generally accepted government auditing standards.
- The City of Bakersfield shall enter into multiyear agreements not to
exceed five years in duration when obtaining the services of
independent auditors. Such multiyear agreements can take a variety of
different forms (e.g., a series of single-year contracts), consistent with
applicable legal requirements. Such agreements allow for greater
continuity and help to minimize the potential for disruption in
connection with the independent audit. Multiyear agreements can also
help to reduce audit costs by allowing auditors to recover certain
"startup" costs over several years, rather than over a single year.
- The City of Bakersfield shall undertake a full-scale competitive process
for the selection of independent auditors at the end of each five year
term of each audit contract, consistent with applicable legal
requirements. In order to promote competitive bidding among audit
firms who are fully qualified to perform public-sector audits, the City
shall actively seek the participation of all qualified firms, including the
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current auditors, assuming that past performance of the current
auditors has proven satisfactory.
- The City may desire on occasion to hire an independent auditor to
perform certain types of non-audit services for the City. Any non-audit
services that require Council approval per Bakersfield Municipal Code
section 3.20.105 C (which currently reads "amounts over $40,000)
should first be reviewed by the budget and finance committee.
Furthermore, The City should routinely explore the possibility of
alternative service providers before making a decision to engage their
independent auditors to perform significant non-audit services.
The audit procurement process should be structured so that the
principal factor in the selection of an independent auditor is the
auditor's ability to perform a quality audit. In no case should price be
allowed to serve as the sole criterion for the selection of an
independent auditor.
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