AGENDA - Special General Committee - 20071002Council/Committee
Secretary
SPECIRIENEUL
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AUDIT
AGENDA
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IMMOPMEN
COINCIL CMIERS
AUBOU TOWN ULL
PUBLIC RELEASE
26/09/07
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TOWN OFAURORA
SPECIAL GENERAL COMMITTEE MEETING
AUDIT COMMITTEE AGENDA
NO. ®7-37
Tuesday, October 2, 2007
7:00 p.m.
Council Chambers
Mayor Morris in the Chair
I DECLARATIONS OF PECUNIARY INTEREST
II APPROVAL OF AGENDA
RECOMMENDED:
THAT the agenda as circulated by the Corporate Services Department be
approved.
111 CONSIDERATION OF ITEM REQUIRING SEPARATE DISCUSSION
1V ADJOURNMENT
Special General Committee Meeting No. 07-37 Page 2 of 2
Tuesday, October 2, 2007
AGENDA ITEM
1. FS07-045 — Appointment of Municipal Auditors pg. 1
RECOMMENDED:
THAT the Audit Committee recommends to Council the appointment of the
firm of Grant Thornton as Municipal Auditor for a three year term; and
THAT the appropriate by-law be prepared.
SPECIAL G. C. - OCTOBER 2, 2007
October 2, 2007 -2- Report No. FS07-045
Respondents to the proposal were ask to submit their proposal for a three year
appointment with the option of an additional two years. We selected a three year term as
this would take us to the end of the first reporting period for Capital Assets. This is a
critical period as the auditing firm must assist and agree to the book value of our inventory.
We also requested the proposal in a two envelope system one with the work plan proposal
and the second envelope was to include the pricing. Our purpose in doing this was to
evaluate the proposals first on their content then factor in their proposed pricing.
Tenders closed on September 12 at which time Mr. Marc J. Pourvahida, Director of
Finance/Treasurer for the Town Whitchurch-Stouffville and your Director of
Finance/Treasurer opened the proposal envelopes.
On September 18 we got together again to review and rank the proposals then we ask Mr.
R. Panizza, Director of Corporate Services to open the second envelope which contained
the prices.
COMMENTS
The Director of Finance/Treasurer for Whitchurch-Stouffville and your Director of
Finance/Treasurer felt in our discussions that there might be some savings to both
municipalities if we could appoint the same auditing firm.
We felt that the savings would notjust be from a reduction in auditing fees but because we
are both at the same stage of the Capital Asset Management Project. We felt that with the
same auditing firm if we had questions or clarifications that would generate a fee we could
share that expense thus reducing both municipalities cost.
OPTIONS
That Council accept the proposal of another firm.
FINANCIAL IMPLICATIONS
For reference our audit fees for the 2006 municipal and library audit were:
Regular Audit $59,000.
Gas Tax Audit $ 2.000.
Administrative Expense $ 2,065.
Total Fee 2006 Audit $63,065.
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SPECIAL G. C. — OCTOBER 2, 2007
October 2, 2007 -3- Report No. FS07-045
There were three proposals submitted and after review of the proposals and the fees the
following is the ranking as determined by both Treasurers.
1. Grant Thornton
2. Deloitte
3. KPMG
The following are the prices as submitted for the three years:
Grant
Thornton
Deloitte
ICPMG
Total 2007 Fees
$60,960
$62,540
$52,200
Total 2008 Fees
$60,960
$62,540
$53,400
Total 2009 Fees
$72,345
$64,416
$77,600
Total for 3 Years
$194,265
$189,496
$183,200
Discount
$9,000
$9,220
Net Price if both municipality's accept
$185,265
$189,496
$173,980
i viscount otrereo it Dom municipalities accept me same company
We are recommending the firm of Grant Thornton as they ranked the highest in our review
even though their pricing is the second lowest.
Some of the benefits of this decision would be as follows:
1. We will receive a discount of $9,000. over the three years.
2. There is the potential for two municipalities to save fees by not both having to pay
for the same advice. We see the potential for this savings to be greatest in the next
3 years as we both implement our Capital Asset Management program.
By coincidence if we accept the proposal by Grant Thornton this will mean that all
six of the northern York Region municipalities will be with the same firm, this could
provide us with greater opportunity for savings.
3. Our staff will not have to go through a conversion to a new auditing firm and staff
are familiar with Grant Thornton Team and this will cause less stress for everyone.
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SPECIAL G. C. — OCTOBER 2, 2007
October 2, 2007 - 4 - Report No. FS07-045
4. The fees proposed by Grant Thornton in the next 3 years are less we paid in 2006.
5. We see a benefit being associated with the northern 6 Regional Municipalities.
CONCLUSIONS
When we decided to do a joint tender we anticipated that the fees would be very similar,
however when combining the costs for both municipalities Grant Thornton was the lowest
by a significant amount. Although the Town of Aurora is seeing some savings from
previous years the Town of Whitchurch-Stouffville is recognizing the largest benefit from
the joint proposal.
If we were to decide to pick any firm other than Grant Thronton the fees would be as
presented before the discount and the savings would only be $2,065.
The Capital Asset Management Project is one of the largest factors for our municipality
over the next three years and this will have an impact on the audit in 2009, the year that we
start reporting Assets on our Balance Sheet. In our RFP we ask each respondent to
identify the additional cost they would anticipate in ourfirst year of reporting Capital Assets.
You can see by the proposals that two firms recognized the additional work with their fees.
What isn't factored in is the work and interpretation advice that we will require from the
auditors leading up to this. This work will be on a time and material basis and when
reviewing the proposals the hourly rates for each firm were very similar. Our municipality
will have to budget funds each year for this additional work, however, as identified in the
benefits we believe that we can reduce this cost by working with Whitchurch-Stouffville and
the other municipalities in the northern 6 municipalities of the Region. We don't believe
that we would see the same advantage if we were with a different firm than Whitchurch-
Stouffville.
LINK TO STRATEGIC PLAN
Goal D: Ensure transparent, accountable and open governance in concert with informed
and involved citizens
Objective D1: Continue the commitment of fiscal responsibility and accountability
Objective D3: Be accountable and transparent to residents by ensuring open and
accessible information flow and accessible decision -making
ATTACHMENTS
N/A
ME
SPECIAL G. C. - OCTOBER 2, 2007
October 2, 2007 - 5 - Report No. FS07-045
PRE -SUBMISSION REVIEW
Senior Management Team - September 19, 2007
Prepared by. L. John Gutteridge, Director of Finance/Treasurer -Ext. #4111
Director of Finance/Treasurer
John S. Rogers
Chief Administrative Officer
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