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City attorney flags audit contract language; council signals plan to solicit audit proposals
Summary
City Attorney Cliff told the council the city's current auditor agreement with Ridge and Ingram contains clauses that limit the firm's liability and allow unilateral withdrawal; council members instructed staff to explore alternatives and consider an RFP ahead of budget season.
City Attorney Cliff told the City of Maitland City Council on April 28 that language in the city's auditor agreement with Ridge and Ingram raised "legal ramifications" that warrant review and possibly a request for proposals.
Cliff said he had reviewed a fee agreement the firm presented and identified terms that concerned him, including a broad limitation-of-liability clause and a termination provision that gives the auditor "the right and sole discretion to withdraw for any reason from any specific engagement" upon written notice, which would release the firm from the obligation to complete contracted services. "They have a limitation of liability section, that keeps them from having the liability for basically any kind of damages... their damages can never exceed the amount of the fees we pay them," Cliff said, arguing that the clause could leave the city exposed.
Cliff told council members the problematic language appeared in a recent engagement letter the firm provided in the midst of an ongoing multi-year engagement. He recommended the city consider timing its review now because budget-season procurement planning was imminent.
City Manager Mark explained how the council could proceed: staff could issue a request for proposals (RFP) and form an audit selection committee consisting of one council member and two outside, non-city employees to review responses and return a recommendation to council. When asked whether council should take action now, one council member said, "Send them forward to find a, you know, find an alternative," expressing support for soliciting other firms. The council did not record a formal vote on the matter during the meeting; staff said they would proceed if given direction.
Council members and staff discussed the timing and the need to examine contract language rather than basing decisions solely on price. Cliff said the concern was contractual language, not the fee itself.
No motion to replace the auditor was recorded that evening; the recorded action was direction for staff to explore alternatives and, if appropriate, to issue an RFP for auditing services ahead of the city's budget schedule.
