Portsmouth audit committee recommends three-year extension with CLA after debate over scope and independence

The Portsmouth Audit Committee on June 9 voted to recommend that the City Council approve a three‑year extension of the city’s audit contract with CLA, with an optional additional three‑year renewal, after members debated auditor continuity, the audit’s scope and the committee’s independence.

Deputy City Manager for Finance and Administration Nathan Lenny outlined the proposed engagement and cost history, saying the prior three‑year engagement covered fiscal years 2023–25 at roughly $105,000, $110,000 and $115,000, and that the current proposal raises each of the first three years by about $4,000. He said the initial three‑year commitment would amount to roughly $375,000 over that term and would include an option to extend for another three years.

Committee members argued that keeping a single auditor through the city’s ERP implementation and chart‑of‑accounts transition would limit disruption and avoid the expense of bringing a new firm up to speed mid‑project. Others noted there is no state or charter requirement to rotate auditors at a fixed interval, though procurement practice sometimes favors periodic competition.

Members and public commenters also pressed the committee to clarify the audit scope before sending a final contract to council. Several participants urged that the committee obtain from CLA a clear comparison of (a) a compliance‑style audit commonly used for federal funds and statutory compliance, (b) a full financial statement audit that can include an internal control assessment, and (c) the cost and scope of agreed‑upon procedures or targeted internal‑control testing for specific programs such as school finances or pensions.

The meeting included an explicit procedural concern raised about committee composition and auditor independence: a speaker said having a finance manager or department head who is the subject of audit participate on the committee risks undermining independence and recommended following Government Finance Officers Association (GFOA) guidance on audits and oversight.

After public comment and discussion, the committee made and seconded a motion to recommend the three‑year contract extension with CLA; members voted in favor and directed staff to present the recommendation to City Council. The committee also scheduled a reconvened meeting for Wednesday, Dec. 16 at 4 p.m. to review audit deliverables and timing for the Government Finance Officers Association submission.

The committee’s recommendation is advisory; the City Council will make the final decision on the contract and any changes to the audit scope or procurement schedule.