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RFD- 3391 Business Items   Item #   10. b.    
Regular Council Meeting Agenda
Meeting Date: 09/10/2018  
Title:    Appointment of External Auditor - Pungur-Buick
Department: Corporate Services  
Strategic Vision Element: n/a Related Goal: n/a

Information
Request for Decision Summary
 
To appoint external auditors for the City of Spruce Grove.
Proposed Motion
That KPMG LLP be appointed as the external auditors for the City of Spruce Grove for fiscal years 2018 - 2022.

Background/Analysis
Auditors are appointed by Council to provide assurance over management's preparation of the annual consolidated financial statements.  The appointment of an external auditor is a decision that should be made independently of Administration.  

Request for Proposal

The last request for proposal (RFP) process for external audit services was conducted in 2012 with KPMG being appointed to provide service for the five year term 2012 - 2016.  City Council extended KPMG's term by one year in 2017 by Council resolution. 

In 2018 an RFP  for external audit services was issued July 12, 2018 and was posted on the Alberta Purchasing Connection.  An open procurement process was required as the value of a five year appointment exceeds the $100,000 procurement threshold.  The RFP requested that proponents provide a proposal for external audit services for a five year term covering the fiscal years 2018 - 2022.  Criteria for evaluating the proposals emphasized  the quality of the proposal and the audit by discerning the effectiveness of the proposed audit methodology, audit plan and deliverables.  Another important criteria category considered the experience, qualifications and resources offered by the potential firms.  Pricing was also considered when evaluating the proposals.  The request for proposals described the need for assurance services for five financial reports:
  • City of Spruce Grove Consolidated Financial Statements
  • Municipal Financial Information Return
  • Local Authorities Pension Plan
  • APEX Pension Plan
  • Family and Community Support Services 
The request for proposal also described the expectation for the Auditors to present their findings and engage in discussion with Council and Administration as a part of the Audit process through presentation of the Audit Findings report.

Proposals

The RFP closed on August 13, 2018 and resulted in eight proposals being received.  Each of the proposals met the mandatory requirements and the detailed information requirements set out in the request for proposals.  

Evaluation

Proposals were reviewed and evaluated by a team composed of the General Manager of Corporate Services, the General Manager of Community and Protective Services, and the Chief Financial Officer.   From the evaluation of submitted proposals, the review team short-listed two candidates for an interview process.  The two proponent teams were interviewed to determine fit to the City of Spruce Grove and to gain further insight into proposals presented by each firm.  The final evaluation by the review committee resulted in the selection of KPMG LLP. This team offers the strongest experience at a competitive price.

All proponents have been notified of Administration's evaluation results and thanked for their proposals.

KPMG LLP

KPMG LLP is a national firm of Certified Professional Accountants with vast experience in municipal audits, particularly with larger municipalities.  KPMG  LLP personnel are industry leaders understanding and implementing municipal accounting standards.  The partner responsible for the City's audit is a member of KPMG LLP's National Public Sector Network.  KPMG LLP has been the City of Spruce Grove's auditor for the past 20 years.

Options/Alternatives
 n/a
Consultation/Engagement
 n/a
Implementation/Communication
The auditors will begin planning work in the fall of 2018, conduct interim audit work in November/December 2018 and field work in March 2019.  The audited financial statements will be presented to Council for approval along with the presentation of the audit findings in April 2019.

Upon appointment by Council, the City will enter into a written agreement with KPMG LLP for the 2018 to 2022 fiscal years.
Impacts
 n/a

Fiscal Impact
Financial Implications:
The estimated audit fees average $60,241 per annum which is within the anticipated status quo budget.
Attachments
Request for Proposal

City Council and Committee of the Whole agendas and minutes are posted on the City of Spruce Grove website for information purposes only. These agendas may be changed at the discretion of Council by the addition or deletion of items. Anyone reviewing the draft agenda should do so on the understanding that it is subject to change by Council.

All attachments are in PDF format, and require the Adobe Acrobat Reader plug-in for viewing.

Audio from the most recent City Council and Committee of the Whole meetings are available via podcast on the City of Spruce Grove website.



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