County hopes paying more for audits will help bottom line
GOLD BEACH andndash; Curry County commissioners on Wednesday disregarded the recommendation of the county accountant and unanimously voted to hire Moss Adams as the county's auditors for the next three years at a cost of $100,000 more than the current auditor, Pauly Rogers and Co.
"It's a significant cost factor on the budget," Commissioner George Rhodes said. "My question, as a business person, sometimes you get what you pay for."
Rhodes said that Pauly Rogers finished their audits late the last three years.
"We weren't happy with the delays," he said.
He said that county citizens need to have the information to make decisions.
Commissioner David Itzen said he was a member of the Coos-Curry Electric Cooperative board when it hired Moss Adams. He said that was when the co-op reversed its fortune and started to become successful.
"They were critical to the survival of Coos-Curry. They had the ability to turn that company around," Itzen said.
"They have accountants who are specialists with electric businesses. Likewise, they have a division that concentrates on municipal government," Itzen said.
"They won't be the whole answer, but it's a start," he said. "We wrote off $190,000 from the general fund to Public Health, $165,000 from the general fund to Home, Health and Hospice," Itzen said.
He said Moss Adams could have helped change things before they got that far.
County Accountant Gary Short said the $30,000 a year the county would save by hiring Pauly Rogers would go a long way toward adding county staff.
"If we had staff time, some of these delays would not have occurred," he said.
Short noted when he took over as county accountant, there had been no county accountant for three months.
"I would like to have $30,000 to hire staff," Short said.
"Largely due to circumstances at the county four of the five annual reports were not completed by the December 31 timeline," Short said.
"Conditions that caused delays in prior years are not as likely to occur this year or in the reasonable future. Except for the delay conditions the actual audit work went smoothly and the annual report product is certainly adequate," Short said.
"Moss Adams is a large firm and certainly has the depth of staff and expertise to address virtually any topic. Most of the firm's clients appear to be larger organizations and municipalities such as Clackamas and Multnomah counties. Although Moss Adams is undoubtedly very competent to also work with small municipalities such as Curry County, all other counties are using smaller Oregon audit firms. Cost may be the significant factor," Short said.
Jan Dietz, director of administration for the commissioners, was previously an auditor for one of the larger auditing firms in the country. She recommended that the county hire Moss Adams.
"Both firms have experience in auditing other counties, cities and municipalities," Dietz said.
"One thing to consider is that Moss Adams is the leader in the West for providing services to governmental institutions. Their engagement team specializes in audits of governmental entities. I believe this specialization is very important for the county because you have a team of professional CPAs that audit municipalities. For the most part that is all they do. They will have very in-depth experience at what other counties are doing from an accounting standpoint," she said.
Itzen said it was time for a different set of eyes to look over the county's books.
Jim Lanzarotta, a partner in Moss Adams from Eugene, and Amanda Moore, an auditor from the Medford office, were there to make a presentation to the commissioners. No one from Pauly Rogers attended the special meeting on Wednesday.
County Counselor Jerry Herbage sent emails to 14 of the 19 firms that performed county audits for Oregon counties in the year ending June 30, 2011. Only Moss Adams, one of the largest CPA and consulting firms in the nation, and Pauly Rogers, a much smaller firm located in Tigard, submitted proposals.
Moss Adams projected a three year cost of $232,800 compared to $132,700 for Pauly Rogers and Co.
Commissioner Bill Waddle noted that Moss Adams projected they would use 710 hours per year performing the Curry County audits while Pauly Rogers estimated 473.
Lanzarotta told the commissioners that Moss Adams have specialists in government work.
"That's what we do," he said.
"One area where we are different is even in the audits, we have specialists who come in. One is (information technology). Instead of using CPAs, we have IT specialists who also are auditors. They talk the language of both," Lanzarotta said.
He said the IT specialists come and spend about 40 hours with the county's IT staff.
Lanzarotta said that Moss Adams had recently audited Jackson County, which was happy with the work with the IT staff.
He said his auditors also are specialists at identifying spending that could be used to match government grants, with the county able to qualify for more grants.
Waddle said considering the 710 hours that Moss Adams anticipates spending on the county's audits, the hourly cost is not that much more than Pauly Rogers.
Lanzarotta said the biggest thing his firm did was find "how can we help you improve so you don't lose money."
The commissioners voted to hire Moss Adams as the county's new auditor and instructed Herbage to draw up a contract to be approved in a future meeting.