SR-6-H (95)
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FI:CMD:ymk:srkpmg.word.pobas J~l 9 1991
city council Meeting: July 9, 1991 Santa Monica, Call arnia
STAFF REPORT
TO: Mayor and City Council
FROM: City Staff
SUBJECT: RETAINING KPMG PEAT MARWICK TO PROVIDE AUDITING SERVICES
FOR THE CITY FOR FISCAL YEARS 1990-91 THROUGH 1994-95
Introduction
This is to recommend that the Clty council authorize the City
Manager to negot1.ate and execute a contract with KPMG Peat
Marwick to provide aUditing services for the city of Santa Monica
for fiscal years 1990-91 through 1994-95.
Background
KPMG Peat Marwick (for~erly known as Peat Marwick and Mitchell)
was initially selected as the City's auditors in 1980 as the
result of a competitlve selection process. Since 1980, they
have provided excellent aud1.ting services to the city at
competitive costs. However, during the Spring of 1991, staff
desired to formally re-examine the market place for such
services. A Request for Proposal for city auditing services was
therefore sent to sixteen major accounting firms with offices in
the Los Angeles area. Four proposals were received.
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The proposals were carefully evaluated by an inter-departmental
selection committee consisting of the Director of Finance, the
Account~ng Manager, the Director of Transportation, and
representatives of the General Services Department and the City
Manager's Office.
The City of Santa Monlca provldes an extraordinary range and
complexity of public services for a City its size. As a result,
the City's financial transactions are also quite complex.
Further, in order to help maintain the City's high bond rating
and secure the lmoiest possible interest rates on future bond
issues, it is very important that the City's books be audited by
a firm that is highly respected ln the field of public
accounting. Proposals Here therefore prlmarily evaluated based
on quality and experience of the firm's staff who would be
assigned to audit the city, the adequacy of the proposed audit
approach and audit methodologies, and the firm's ability to meet
various other mandatory professional requirements. To further
evaluate the expertise and experience of staff to be assigned to
audit the city, two finalist firms were interviewed by the
selection committee. Upon completion of the interviews, the
selection comMittee also considered the proposed cost of the
audit services.
As a result of the evaluation process, the selection committee
recommended and the city Manager concurred in retaining the audit
services of KPMG Peat Marwlck.
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Budqet/Financial Impact
The adopted FY1991-92 city Budget includes $71,800 for KPMG Peat
Marwick to conduct a financial audit for FY1990-91. This cost
will be proportionately allocated among all of the City's funds
through the city's Administrative Indirect Cost Allocation Plan.
Recommendation
It is recommended that the city Manager be authorized to
negotiate and execute a contract ''lith KPMG Peat Marwick for
auditing servlces for fiscal years 1990-91 through 1994-95.
Prepared by: Mike Dennis, Director of Finance
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