Memo from J Schedler - 1983 Auditr �
-ITY OF HOPKINS
10 FIRST STREET SOUTH FHONM WU -6474
DPKINS, MINNESOTA 55343
W
INTER - OFFICE MEMO
TO William P. Craiz GATE September 16, 19 83
1
FROM
SUBJECT 1983 Audit Proposals
A request for proposal concerning audit services for 1983 was sent to
12 CPA firms in the metro area. Nine firms responded with a proposal,
one declined to propose and two did not respond.
The attached tabulation shows 1983 audit fees ranging from $6,300 to
$15,000. I recommend the City of Hopkins engage the firm of Peat,
• Marwick, Mitchell & Co. at a fee of not to exceed $10,500.
I make this re even though 5 firms had a lower fee proposal
for several reasons. Since Hopkins is about to embark on a new computer
system. I feel that the CPA firm selected should have experience and
preferably EDP audit specialists to assist the city in the enormous task
of converting to a new system.
Such assistance would be extremely helpful to make an efficient conversion
and to ensure that proper controls and separation of duties are maintained
or implemented.
Additional reasons why I am not recommending the lower fee proposals are:
Abdo, Abdo & Eick
This is a Mankato based firm which opened a 2 man office in the
metro area last year. Most of their municipal clients are smaller
than Hopkins. I see no indication of any EDP experience or staff
backup.
Anfinson, Hendrickson & Co.
it This firm proposes to use an independent consultant in complex
areas of EDP which are beyond staff capabilities? For the
specific imminent needs of the City of Hopkins I do not feel
this would be a good, close workable situation.
Geo. Hansen Co.
Again no specific EDP support staff and this firm already is
performing approximately 20 other municipal audits, which all
must be completed in the first six months of the year to comply
with state law. I.have experienced slowness with this firm, in
the past, in receiving timely audit reports.
Page two
. Wilkerson, Guthmann & Johnson
An EDP support would be provided by a management advisory service?
Cost and relationship not stated. Presently they audit 3 municipal-
ities, 2 of which are very small. and the field auditors all Have
3 or less years of experience. Overall this firm is not strong on
municipal auditing.
The three highest proposals Fox, Coopers & Lybrand and Laventhol &
Horwath, do not bring expertise or services above or equal to the remaining
two proposals.
Peat, Marwick and McGladrey Hendrickson proposals are quite comparable on
many factors. McGladreys fee is $9,900 plus out of pocket costs which
makes the fee proposals within a few hundred dollars of Peat, Marwick.
In evaluating the personnel assigned to Hopkins through reading resumes,
talking with other cities, who presently engage Peat, Marwick as their
auditors, and personally meeting and knowing some individuals, my im-
pression is that Peat, Marwick has assembled the most experienced and
knowledgeable team.
• The PM Engagement Supervisor, the person in charge of the audit on -site
has been trained as a Computer Audit Specialist and has experience with
audits of Hennepin County and the City of Mendota Heights which both
operate in computer environments. The counterpart proposed by McGladrey
does not have such experience and training, but would have to defer to
his EDP specialist department.
Additionally PM has offered as additional services, at no extra cost,
consultation on developing a purchasing policy for the city (which is a
goal of the finance department) and presenting a one -half day seminar on
fiscal management for Council and department head personnel.
over the past several years PM has been the most active, of all the firms
who submitted a proposal, in developing municipal accounting standards and
in assisting the municipal communities in training of fiscal matters.
Through this process PM personnel keep up to date on the current G.A.A.P.
and NCGA requirements and insure that the city would also comply and remain
current with the changing government accounting standards.
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