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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