HomeMy WebLinkAboutAgenda - 01-24-2013 - 5jORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: January 24, 2013
Action Agenda
Item No. 5 -j
SUBJECT: Extension of Audit Services and Contract with Martin Starnes & Associates,
CPAs, P.A.
DEPARTMENT: Finance and Administrative PUBLIC HEARING: (Y /N) No
Services
ATTACHMENT(S):
Audit Engagement Letter
INFORMATION CONTACT:
Clarence Grier, 919 - 245 -2453
1
PURPOSE: To approve an extension of contract services to perform the annual County audit for
the fiscal years ending June 30, 2013, 2014, and 2015.
BACKGROUND: By North Carolina General Statute, Orange County is required to have an
independent a u d i t conducted. For the past three fiscal years, Martin Starnes & Associates,
CPAs, P.A. (Martin Starnes) has performed the County's annual audit. Martin Starnes has been
instrumental in assisting the County in resolving financial and accounting issues, and has assisted in
the upgrade of the County's credit ratings by performing the audit in a timely and efficient manner.
Martin Starnes proposes the following fees for the audit for the next three fiscal years:
Fiscal Year
2013
2014
2015
Amount
$ 85,800
$ 88,300
$ 88,300
The fee for FY 2013 will remain the same as FY 2012.
In recent years the following firms have performed the County's audit services:
• Cherry, Bekaert and Holland , LLP
• McGladrey and Pullen, LLP
• Martin Starnes & Associates, CPAs
FY2001 -2006
FY2007 -2009
FY2010 -2012
Due the changes in financial and auditing standards, federal and state regulations, and reduction in
the number of firms performing audits of governmental entities, governmental entities are
maintaining their auditing firms for longer periods of time.
FINANCIAL IMPACT: The total amount of this contract, if approved by the Board, is $85,800 for
FY 2013, and $176,600 for the next two fiscal years. Funds were budgeted in the 2012 -2013
Financial and Administrative Services budget to cover the current fiscal year expenditure.
RECOMMENDATION(S): The Manager recommends that the Board approve the extension of
the contract with Martin Starnes & Associates, CPAs, P.A. of Hickory, North Carolina to conduct
auditing services for Orange County in the amount of $85,800, and authorize the Manager to
sign the contract on behalf of the Board pending staff and Attorney review.
MARTIN STAR ES 3
ASSOCIATES, CPAs, P.A.
"14 Professional.Association of C'ertifi'ed F"aahlic flccoiantcints and Management Consnl'tants "
September 24, 2012
Orange County
Attn: Clarence Grier
John Link Government Services Center
200 South Cameron Street
Hillsborough, NC 27278
Dear Mr. Grier,
It has been a pleasure to provide audit services to Orange County for the past several years. We
are looking forward to a long relationship with the County that will allow us to become more
efficient in our procedures and offer even better management suggestions as a result of our
knowledge of the County's operations.
The audit relationship is much more than a commodity product, therefore, the Local Government
Commission does not require the services to be re -bid at the end of a service agreement. We are
proud of the level of service we offer and believe that to be the reason we have a near 100%
renewal rate with our government clients. We would rather negotiate an extension of our
agreement rather than subject the relationship to the bidding process. If the County is pleased
with the service, then fees are the only variable, and I am certain we can come to terms as it
relates to fees.
Recently, much talk has been made about mandatory auditor rotations. According to the
Government Finance Officers' Association, "the high level of specialized expertise needed to
perform a quality audit of a state or local government often limits competition, which means that
a requirement to change audit firms at the end of the audit contract could have the unintended
effect of forcing a government to engage the services of a less qualified audit firm. Many of the
advantages suggested for auditor rotation (such as obtaining a fresh perspective) often can be
achieved by rotating staff within the same firm."
We are required by our auditing standards to maintain our independence, and we can assure the
County that Martin Starnes & Associates takes compliance with the independence standard
seriously. We rotate our audit teams as a normal course of business due to staff growth. We
reinvent the audit process each year during the planning stage to make sure we are addressing the
pertinent risk areas of the County's audit. Therefore, a long audit relationship, if managed
properly, is a great benefit to the County.
730 13th Avenue Drive SE ♦ Hickory, North Carolina 28602 ♦ Phone 828 - 327 -2727 ♦ Fax 828 - 328 -2324
13 South Center Street ♦ Taylorsville, North Carolina 28681 ♦ Phone 828 - 632 -9025 ♦ Fax 828 - 632 -9085
Toll Free Both Locations 1- 800 - 948 -0585 ♦ Website: www.martinstames.com
M
Our fees for the fiscal years ending June 30, 2013 - 2015 are proposed as follows:
2013 $ 85,800
2014 $ 88,300
2015 $ 88,300
I am looking forward to your acceptance of our service extension agreement. Feel free to
call me with questions or concerns.
Sincerely,
Paula P. Hodges, CPA
Partner
If you agree with the service extension agreement above, please sign the enclosed copy of
this letter in the space indicated and return it to our office.
Accepted by:
Title: Date: