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Independent Audit Contract for Fiscal Year Ending June 30, 2024
PURPOSE: The purpose of this item is to award a contract for the Town’s annual independent audit for the fiscal year ending June 30, 2024.
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Department
DEPARTMENT: Finance
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Contact
CONTACT INFORMATION: Darrell Keyes, Interim Finance Director, 918-7301.
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Information
INFORMATION: The Local Government Budget and Fiscal Control Act (LGBFCA) requires each local government to prepare an annual financial report on their financial position at the end of the fiscal year and financial results of operations. The LGBFCA also requires that this financial report be audited by an independent certified public accountant.
Due to unforeseen circumstances, the Town's previous audit firm, Forvis Mazars, LLP, informed the interim finance director that the firm did not have the staffing capacity to conduct the FY 2024 audit on July 31, 2024. On August 8, 2024, the Town issued an RFP for Audit Services for fiscal year ending 2024 through 2026 (see Attachment B). The standard audit services RFP template provided by the Local Government Commission was used. This RFP was advertised in the local newspaper, posted to the Town’s web site, and distributed to firms who had requested to be include in such solicitations. Responses were due on August 30, 2024. The Town received three responses from Maudlin & Jenkins, LLC, Clifton, Larson, Allen LLP, and Thompson, Price, Scott, Adams & Co., P.A. All firms have extensive experience working with municipalities, but the response from Maudlin & Jenkins, LLC met all requirements of the RFP (see Attachment C), and the firm is well-suited to meet the needs of the Town.
Maudlin & Jenkins, LLC continues to provide audit services to several local governments in North Carolina, including Orange County and the Town of Chapel Hill.
The audit cost proposed by Maudlin & Jenkins, LLC for fiscal year ending June 30, 2024 is $65,000. Depending upon the total expenditures of state and/or federal funds (i.e., Powell Bill, federal grants, etc.), the Town may be required to have one or more single audits prepared. The cost for a single audit is $5,000-8,000. Estimated audit costs for FY 2025 and FY 2026 are $67,000 and $69,000, respectively. These estimates are subject to change based on the scope of work to be determined annually.
All independent audit contracts must be approved by the staff of the LGC. Invoices from the audit firm must be approved by LGC prior to payment by the Town. The LGC approves up to 75% of the total fee prior to submission of the final audited financial statements to the LGC.
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Fiscal and Staff Impact
FISCAL IMPACT: The total cost for FY24 audit and financial statement preparation will not exceed $65,000. However, if a single audit is required for federal and/or state programs, there will be an additional cost of $5,000-8,000 per program. Funds for the annual audit, single audits, and financial statement preparation are included in the Finance Department’s General Fund operating budget.
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Recommendation
RECOMMENDATION: The Council adopt Attachment A to: 1) award a contract to Maudlin & Jenkins, LLC to perform independent audit, single audits, and annual financial statements for the fiscal year ending June 30, 2024; and 2) authorize the Mayor and Town Manager to execute the Contract to Audit Accounts (form LGC-205 or equivalent), engagement letter and/or additional items not addressed in the LGC-205. The continuation of Maudlin & Jenkins, LLC services in subsequent fiscal years ending June 30, 2025 and June 30, 2026 will be based on negotiation of scope of work and costs with approval by the Town Council and LGC.
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