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Pewaukee council presses for swifter audits after Baker Tilly's disengagement and RFPs arrive
Summary
Councilors raised concerns about repeated audit delays and higher-than-expected out-of-scope billing. Baker Tilly's lead said he issued a disengagement after staff circulated an RFP; the auditor offered to re-engage if the council wishes. The council scheduled finance-committee review and asked both firms and staff to set clearer expectations.
The Common Council spent substantial time Feb. 26 addressing delays and costs in the city's annual audits after staff circulated an RFP and Baker Tilly's engagement lead issued a disengagement letter.
Councilors said audits for recent fiscal years arrived late and that the city has paid materially more than the fixed engagement fee because auditors frequently have had to do out-of-scope cleanup work. Baker Tilly's engagement lead (Paul, S10) told the council he had repeatedly worked with staff and the city's accountant (LNA) to find a path to complete the audits and ultimately issued a disengagement after the RFP process began without a prior conversation.
"When we came out in March to begin that work, it was apparent that things were not ready for audit," the auditor said. He explained repeated rescheduling and staff turnover at the city increased administrative time and cost and that he would be willing to provide a new engagement letter to resume under terms similar to the prior arrangement.
Councilmembers said they were concerned that the timing of audits (some audits completed a year or more after the fiscal year) leaves the council unable to use audited results in the next budget cycle. They described a sequence of problems when city accounting staffing changed and LNA, the city's accounting contractor, scaled up.
The council received four RFP responses; staff had scrapped two as not meeting requirements or being too high, and two finalists (CLA and Sikich) were shortlisted for the finance committee to review. The council directed the finance committee to convene on March 11 to evaluate the finalists and to invite both Baker Tilly and LNA to present their perspectives on timing, oversight and the audit calendar.
Rather than immediately firing or accepting a resignation, the council's working consensus was to try to preserve continuity while tightening expectations: one motion called for re-engaging Baker Tilly if possible while the finance committee sets clear parameters, schedules, and senior-level oversight from LNA. Council members emphasized that whatever the governance decision, they need a defined audit calendar and explicit deliverables so that audited information arrives before budget season.
No formal termination of either firm was recorded at the meeting; the council scheduled further discussion and asked staff to bring a draft engagement letter and an audit calendar to the March finance-committee meeting.
