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City of Missoula, Montana Item to be referred to City Council Committee Committee: A & F Item: Award Contract for Professional Services – Audit Preparation Assistance Date: August 4, 2009 Prepared by: Brentt Ramharter Initiated by: Brentt Ramharter Action Required: Authorize Mayor to execute The Professional Services Agreement for Audit Preparation Assistance with Nicole Noonan, CPA. Recommended Motion: Council awards the contract for Professional Services Agreement - Audit Preparation Assistance to Nicole, Noonan, CPA, 435 Little Mill Creek Road, St. Regis, Montana 59866 Timeline: Referral to committee: August 4, 2009 Committee discussion: August 12, 2009 Deadline: Have council approve ASAP. Background and Alternatives Explored: 1. The city has historically hired assistance to get us ready for the audit. Last year we spent $9,500 for audit assistance. 2. The reason for the assistance is that the audit has grown in complexity. The requirements placed on governmental agencies to prepare financial statements have increased tremendously in recent years due to scandals and problems on Wall Street. Our audit used to cost $26,092 in FY 2005 while we now are budgeting $62,475 for FY 2010, mainly due to increased mandated auditing requirements that we must pay our auditors to perform. As a result, in the last 4 -5 years, we have had to hire additional expert outside assistance to meet all of our year-end financial reporting requirements associated with the audit. 3. The city's Assistant Finance Director had historically been the key person to get the city's financial statements ready to be audited. With her absence we are adding more time to the audit assistance contract with Nicole Noonan this year. Maximum contracted time will be 500 hours at $65/hour which would total to $32,500 if all of the time is needed. We have been fortunate to hire Nicole Noonan over the past several years to assist my staff in the preparation of the year-end statements. The scope of Nicole's work is identified in the attached audit preparation list. Nicole Noonan also employs Christi Page, CPA, who will work with Nicole very intensively during September and early October. Both Nicole Noonan and Christi Page have been in charge of the field work associated with the city's audit in years past, so both of them understand the city quite well from an audit perspective. Financial Implications: The cost is estimated not to exceed $32,500 (500 hours of assistance). The city will be invoiced only for their hours worked. If the city can do more of the work than projected at this point, then ---PAGE BREAK--- the contractors will work fewer hours than estimated. The current estimate of time needed is about 400 hours, so the higher number of hours (500 hours) will allow for contingencies to be addressed, if necessary. Attachments: Professional Services Agreement Audit Preparation List