Counting Your Dollars:
Contracting for the Services of an Independent Auditor
of County Finances
Synopsis
“The purpose of an independent audit is to protect the
equity of the entity audited with tests that determine if the assets are
properly protected.”[1]
This report covers the bid process for securing the services of an independent
auditor for the
Background
The Grand Jury, as required by law, is responsible for performing
an independent audit of county offices and investigating spending by city and
county governments. The investigations may be conducted on a
selective basis each year but shall not duplicate examination or financial
statements that have been performed by or for the Board of Supervisors.[2]
In earlier years, the Grand Jury budget included funds to employ an outside
independent auditor to fulfill these duties. Subsequently, while retaining
oversight of this task, the Grand Jury transferred to the
Scope
The
Sources
Meetings:
·
·
·
·
Bidders’ Conference,
Analysis of Bids,
Entrance Conference,
Reviewed:
Bidders’ List.
Comprehensive Annual Financial Report, Fiscal Year 2003.
Government Code § 25250.
Grand Jury Reports:
· 1990-1991.
· 1997-1998.
· 1999-2000.
· 2000-2001.
· 2001-2002.
Management Letter, Fiscal Year 2003.
Management Letter, Fiscal Year 2004.
Penal Code § 925.
Request for Proposal.
Single Audit Report, Fiscal Year 2003.
Findings
1. It has been the practice of the county to request proposals for independent audit services every three or four years.
2. The current independent audit firm has provided services for seven years.
3. The 2001-2002 Santa Cruz County Grand Jury Final Report recommended that retention of an independent auditor should be reviewed every three years and changed at least every six years.
4. This
Request for Proposal process was to select an independent auditor to prepare an
annual audit for the
5. The independent audit firm provides various reports to the Santa Cruz County Audit Committee throughout the year. These reports require County Audit Committee review.
6. The Request for Proposal process began with preparation of the bid documents that:
· outlined the requirements of the county;
· described the basis on which the bids would be judged; and
· requested the qualifications of the bidders.
Invitations to Bid were sent to
44 qualifying accounting firms, locally and throughout northern and central
7. Two members of the Santa Cruz County Grand Jury are active members of the County Audit Committee.
Conclusions
1.
Response to
2. The County Audit Committee did not follow the recommendation of the 2001-2002 Santa Cruz County Grand Jury stating that independent audit services should be reviewed every three years with no one firm providing services for more than two consecutive three-year contracts. Good accounting practices and procedures dictate a change of auditing firms.
3. Criteria used to evaluate bids was comprehensive.
4. Grand Jury membership on Santa Cruz County Audit Committee fulfills the Grand Jury’s mandated responsibilities as outlined in Penal Code § 925. The County Audit Committee met four times during fiscal year 2004-2005.
Recommendations
1.
The
2. Review of the contract for independent audit services or invitation to bid should be scheduled every three years with no one firm providing services for more than two consecutive three-year contracts.
3.
The
4. The County Audit Committee should continue to meet at least twice each year, more frequently if needed.
Responses Required
Entity |
Findings |
Recommendations |
Respond Within |
|
Board of Supervisors |
1, 2, 3 |
1, 2, 4 |
60 Days |
|
Auditor-Controller |
3 |
1, 2, 3, 4 |
90 Days |
|
Audit Committee |
3, 7 |
2, 4 |
90 Days |
