February 26, 2010 City: Requests for Audit Proposals Will Likely Go Out

At yesterday's City Finance Committee meeting, there was more discussion about the 2009 audit. Gene Brooks expressed concern that the city's longtime local auditors Craine, Thompson & Jones did NOT tell the Council in any of the last three years that the City was in poor financial shape or that Sewer Fund money was being used or moved to the General Fund to shore up and cover up the city's pathetic finances. Of course, former City Administrator Jim Crumley, current Budget Director Brian Janish, and current Assistant City Administrator Buddy Fielder didn't tell the council anything either.

New City Administrator Tony Cox didn't say it directly yesterday, but he strongly hinted that the City should advertise for new auditors and try to get a new set of eyes reviewing the city's finances and performing the city's audit.

I have said this same thing many times in previous years. It's common sense to periodically change auditors in order to get a fresh set of eyes going over the government books. And, as Tony Cox added, it just happens to be a "best practice" in government auditing.


Yes, seeking new city auditors isn't just a Noe thing, it is a BEST PRACTICE recommendation from the Government Finance Officers Association (GFOA).  Click on image at left to enlarge. This GFOA document, recommending that solicitations for new auditors should go out at least every five years, was included with the 2009 city audit that was provided to all councilmembers. 

It was mentioned at yesterday's meeting that the Jones firm (Hiram Jones, Tom Jones, and James Craine) has been the city's sole auditing firm for about 30 years. The Jones firm and personnel merged a few years back with Glenn Thompson, CPA, and  are now performing the city's audit under the new firm name  Craine, Thompson & Jones (CTJ).

Performance of an audit is a professional service. RFP's (Request for Proposals) are advertised asking for proposals for auditing services from governmental auditors. As a professional service, Bob Garrett pointed out that there is no requirement that the low bid/low proposal be accepted. Instead, each proposal is evaluated on a number of factors including cost, services provided, and how the proposal meets the city's needs and purposes. 

CTJ may end up again as the low-cost proposal. If CTJ is the "low cost audit" proposal, the council will have to decide whether yet another "low cost audit"-- from the firm that failed to note the repeated violation of state law by Crumley and company in switching sewer fund money to the general fund in 2007 and 2008 and that failed to inform the council of the city's negative cash position and depletion of the city's rainy-day fund, trumps a "best practices audit" by another firm.