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Council to split audit and financial-preparation work; staff recommends continuing Hogan Hanson for preparation
Summary
Finance staff recommended splitting financial‑statement preparation from the independent audit to eliminate recurring findings. Hogan Hanson would continue financial preparation while a new firm handles the audit; councilmembers endorsed the approach as best practice despite cost increases.
Finance staff presented two proposed contracts (A7 and A8) to separate financial‑statement preparation from the independent audit after recurring audit findings related to segregation of duties and financial‑statement preparation.
Leanne, presenting the item, said the split is "industry best practice" and that continuing a relationship with Hogan Hanson for financial preparation would reduce onboarding costs because the firm already knows the city's systems. She said the city received two audit proposals and two denials during the RFP process, which staff attributed to a national shortage of CPAs.
Councilmembers voiced support for the split. One councilmember, a CPA by background, said that while the change may increase direct costs, it would likely save staff time and improve audit independence and value.
No formal vote on the contracts was recorded in the work session transcript; staff said the item will be carried forward to Council action as part of the consent/contract agenda.
