HomeMy WebLinkAbout1977-07-27-Auditing-rpt ttssachuse##s
MEMORANDUM
RECEIVED
DATE: 7/27/77
TO: BOARD OF SELECTMEN PAGE:
1971 JUL PM55
FROM: Auditing Committee 27 SUBJECT: Report of Auditing CommitteE
CLERK
The Auditing Committee appoint" or
Id "of Selectmen on April 25, 1977 has
y
met four times and has the following to report to the Board:
1. The Town advertised and solicited proposals from public accounting firms
to perform an audit of the Town's financial accounts and records for the
period August 1, 1973 to June 30, 1977. All responding firms were also
requested to submit an estimate of the fee for an audit of the period
July 1, 1977 to June 30, 1978. Eleven firms submitted proposals, in-
cluding the so-called "big eight."
2. Following analysis of the proposals and discussions by the Committee,
four firms were selected for interview:
Base Fee Estimate FY 1978 Fee Estimate
Arthur Andersen & Co. $ 8,000 $8,000
Coopers and Lybrand 8,500 6,500
Laventhol & Horwath 10,500 7,500
Touche Ross & Co. 16,500 9 ,500
These firms represented four of the five lowest estimates. It was apparent from
the estimates - and acknowledged by the firms - that the very low base estimates were
the result of these firm's interest in securing the Lexington engagement, even at a
potential initial loss. All four firms indicated that the estimated fees would not
be exceeded unless the scope of audit or management services were changed. Inter-
views were conducted on July 25 and 26, 1977.
3. The Auditing Committee at its meeting on July 26 unanimously voted the fol-
lowing:
(a) To recommend that the Selectmen authorize the Town Manager to engage
the firm of Arthur Andersen & Co. to perform the audit voted in
Article 9 of the 1977 Annual Town Meeting.
(b) To recommend that the Selectmen designate the Town Manager as primary
working liaison with Arthur Andersen & Co.
(c) To recommend that Arthur Andersen & Co. be instructed to address all
informal and formal oral and written reports to the Board of Select-
men and the Manager.
(d) To recommend that the Board of Selectmen invite the Appropriation
Committee (or its representatives) to attend meetings at which the
auditing firm is presenting reports and recommendations.
(e) To recommend that the Board of Selectmen dissolve the Auditing
Committee upon acceptance of this report.
Respectfully submitted,
The Auditing Committee:
Fred C. Bailey, Chairman
Margery M. Battin
Norman P. Cohen
Copies to: Board Members Edward E. Furash
Auditing Committee Robert M. Hutchinson, Jr.
,./Town Clerk Richard M. Perry, Secretary
em