Loading...
HomeMy WebLinkAboutCS 47-06 0."1 r." d tJ CiflJ 0# REPORT TO AUDIT COMMITTEE Report Number: CS 47-06 Date: October 3,2006 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: Reappointment of Auditors Recommendation: 1. That Report CS 47-06 of the Director, Corporate Services & Treasurer be received; 2. That the Audit Committee recommend to Council that the firm of Deloitte & Touche, LLP be reappointed as the City Auditor for a five year term for the 2006 - 2010 audits inclusive; and, 3. That the appropriate officials of the City of Pickering be given authority to give effect thereto. Executive Summary: Under the Municipal Act, 2001 Council must review the provision of audit services at least every five years and appoint an Auditor, including the reappointment of the existing Auditor, for a period not to exceed five years. The existing Auditor, Deloitte & Touche was appointed on January 15, 2002 following the conclusion of an extensive request for proposals, interviews and analysis process involving four of Canada's largest and most respected accounting and auditing firms. Deloitte undertakes the annual audit for the City, Library Board and previously APTA. The five-year appointment is drawing to a close and it is recommended the firm be reappointed as discussed below. Financial Implications: None beyond fees included in the Annual Current Budget approved by Council. For 2007 Budget, we anticipate a 5 percent inflationary increase on the 2006 audit fees which is generally in line with the industry and past years fees. This increase equates to approximately $3,500 for the Audits of the City and Library. Report CS 47-06 Date: October 3, 2006 CO';' Subject: Reappointment of Auditors Page 2 Background: The Municipal Act, 2001 S. O. 2001, Section 296 states in part: "1. Auditor - a municipality shall appoint an auditor licenced under the Public Accountancy Act, 2004 who is responsible for, a) annually auditing the accounts and transactions of a municipality and it's local boards and expressing the opinion of financial statements of these bodies based on the audit; b) performing duties designated by the Minister; and c) performing duties required by the municipality or local board which do not conflict with the duties designated by the Minister. 3. An auditor of a municipality shall not be appointed for a term exceeding five years." The current Auditors were appointed by Council through adoption of the Recommendations contained in Report CS 01-02 in January, 2002 which means their term is now nearing it's end. A reappointment must take place prior to the 2006 Audit which commences with the Interim Audit in late October, 2006 and extends into 2007. In 2002 an extensive RFP process was undertaken with four large international firms together with our local Auditor which resulted in the appointment of Deloitte & Touche as the highest scoring firm as evaluated by the Selection Committee. Deloitte & Touche is one of the larger international firms and it has also focused on the municipal sector, particularly in Ontario. It is heavily involved with the various accounting boards, associations and the provincial government in reviewing and implementing improvements to Municipal Accounting. In fact, one of the most significant advantages associated with Deloitte is their vast experience in the municipal Sector and the derivation and implementation of Public Sector Accounting Board (PSAB) recommendations. The firm's knowledge in this particular area has been especially beneficial to the City. Locally, the firm provides municipal audit expertise to six of the eight local area municipalities, the Regional Municipality of Durham and the Durham District School Board. The services provided by the firm have clearly demonstrated proficiency in the municipal environment and have demonstrated more than just a working knowledge of City operations. Their comments and assistance is always relevant and practical. Based on the experience to date the firm has provided an excellent level of service at a reasonable cost. D03 Report CS 47-06 Date: October 3,2006 Subject: Reappointment of Auditors Page 3 Another consideration is that not reappointing the existing auditor and proceeding with an RFP after only five years can be counterproductive. Such a process involves a considerable amount of limited staff resources; a long learning CUNe with the new firm (at least three years) and additional annual work by staff for those same years. Finally, switching firms too frequently can indicate that the City is not willing to invest in a long term relationship that provides the necessary level of seNice, only the lowest bid. Neither of these are messages that we want to entertain for such an important, and increasingly complex function. Attachments: None Prepared I Approved I Endorsed By: ~~f"=~- Gillis A. Paterson Director, Corporate SeNices & Treasurer GAP:vw Copy: Chief Administrative Officer Recommended for the consideration of Pickering City Council \ \ /' ;1 '"'~~ ~..