Finance committee moves audit engagement with Amick and Company toward approval, with state licensure contingency

The Jackson City finance committee voted to substitute the engagement document and move forward with consideration of an engagement letter with Amick and Company to complete the city's overdue fiscal-year audits for 2024 and 2025, but council members insisted any final contract include contingencies to meet Mississippi state registration and licensure requirements.

Dr. Douglas Allen, owner of Amick and Company (the firm proposed to audit the city), told the committee he planned to start planning on March 1, conduct interim field work in March and April, complete year-end field work in May and finalize the FY2024 audit by June 30, 2026, then move directly into the FY2025 audit. "We assembled a team that specifically handles municipalities," Allen said, adding the firm intends to maintain an on-site presence and hold weekly progress meetings so "we don't have to revisit that later."

Why it matters: Jackson is behind on its audits, and the city's 2023 report included 22 audit findings that the new auditor said he will follow up on. Committee members said they want clear commitments that the firm will help the city correct repeated deficiencies and not repeat problems that prolonged previous audits.

CFO Jillian Caldwell told the committee legal staff had prepared a substitute engagement document that names the Mississippi state tort claims fund as part of the audit scope. Caldwell also said Amick had applied for the firm-level license with the Mississippi State Board of Accountancy and expected approval at its March meeting.

Several council members raised two recurring concerns during the exchange. Councilman Grisele said he wanted assurance the firm would not "shut down during tax season," as a previous auditor had, and Allen replied that Amick separates its tax and audit staff and would dedicate five to six staff to the engagement. "We're not gonna take a 6 month break for tax season," Allen said, describing a commitment of continual presence and staffing for the engagement.

Mayor Hoyt and other members pressed Allen on component-unit treatment, including whether Jackson Water's numbers must be incorporated into the city's financial statements or can be attached. Allen said he needed to review the documentation but noted the city already reports two discretely presented component units (Jackson Redevelopment Authority and the municipal airport authority) and that any unaudited units would require disclosure language in the city's financial statements.

Legal and registration contingencies: City Attorney Drew Martin said in committee that auditing firms performing government audits in Mississippi must register with the state auditor's office in addition to any accountancy board licensure. A committee member emphasized legal risk, saying any engagement should be "contingent upon him first meeting the requirements of state law" because signing a contract before those conditions are met could render the engagement void and expose the city to liability. Caldwell and Allen agreed that the registration and licensing issues would be addressed before contract execution.

Committee action and next steps: The committee voted to substitute the packet item with the version provided by legal and to move the engagement question out of committee for further processing; several members responded "aye" during the voice vote. Council members and staff said contingency language requiring evidence of state registration and other conditions could be added when the engagement contract is finalized. The committee then adjourned.

Context and clarifications: Allen noted that while Amick has municipal engagements in Kentucky and other jurisdictions, the firm has not previously audited in Mississippi. He said the firm has experience with component units and federal audit requirements and will perform required single-audit testing for major federal programs (including COVID-related programs) per OMB guidance. Caldwell said the convention center, airport and redevelopment authority had provided 2023 or 2024 audits as applicable; the status of Jackson Water's audit was not confirmed during the meeting.

What was not decided: The committee's action was to substitute the engagement paperwork and move the item out of committee; it did not award a final contract during the meeting. Committee members instructed staff and legal to ensure the engagement letter includes the necessary state approvals and any contingency language before execution.

Quotes: "We assembled a team that specifically handles municipalities," said Dr. Douglas Allen, adding the firm would be "hands on" during field work. "Any engagement of this firm would need to be contingent upon him first meeting the requirements of state law," said a committee member during the discussion about legal risk and registration requirements. CFO Jillian Caldwell said she had worked with Allen and the city's legal team to prepare the substitute document the committee considered.

Next procedural step: Staff and legal will incorporate registration and contingency language into the final engagement terms; the full council is expected to consider the engagement after committee actions and any final contract language are prepared.