NRS 354.624 requires the City provide for an annual audit of its financial statements in accordance with Generally Accepted Auditing Standards and that the audit be presented to Council.  NRS 354.624(3) provides that the Council may, without requiring competitive bids, designate the auditor or firm annually. 

A request for proposals (RFP) for audit service, under RFP#20/21-006, was advertised on December 16, 2020, in the Reno Gazette-Journal, the City's website, and on multiple bid service sites.  In addition, known interested vendors were alerted to the availability of the proposal package via email.  For the last two years, City staff has prepared the Comprehensive Annual Financial Report (CAFR). Therefore, the RFP requested two separate quotes for services.  In the first scenario, the provider would audit the financial statements and prepare the CAFR.  In the second scenario, the provider would audit the CAFR as prepared by City staff. Including both options in the RFP will allow the City more flexibility as the City’s needs change. 

The City received five proposals that were reviewed and evaluated by Finance Department staff.   A summary of the proposals is attached to this staff report. 

One of the five respondents, Eide Bailly, LLP (which merged with Kafoury Armstrong & Co.), has performed audit services for the City for a number of years.  Under their proposal, Eide Bailly has offered auditing teams led by auditors with experience working with the City.  Their proposed fee for the fiscal year 2021 audit ($131,000.00) represents increases of $1,500.00 for the City audit and $300.00 for the Truckee Meadows Water Reclamation Facility audit.  

While Eide Bailly was not the low bidder, Eide Bailly is the only bidder with a local office, has experience with the City, and has many more employees available to aid the City than the two lower bidders. Finance Department staff anticipates retaining experienced audit staff with knowledge of City operations will result in a quality audit. 

If approved, the City of Sparks will enter into a contract with Eide Bailly to provide financial statement audit services for the three fiscal years ending June 30, 2021, through June 30, 2023, with an option of extending the agreement for up to three additional years through June 30, 2026.  Decisions on whether to extend the contract as proposed will be made by mutual agreement between Eide Bailly and the Chief Financial Officer.  If an agreement is not reached regarding an extension, a contract with a new vendor will be presented for Council consideration.

1. The City Council may approve the contract with Eide Bailly, LLP, to provide financial statement audit services for the City of Sparks and Truckee Meadows Water Reclamation Facility for fiscal years ending June 30, 2021, through June 30, 2023.

2. The City Council may reject the contract with Eide Bailly and direct the City Manager to provide other alternatives.

I move to approve the contract (AC-5738) with Eide Bailly, LLP, to provide financial statement audit services for the City of Sparks and Truckee Meadows Water Reclamation Facility for fiscal years ending June 30, 2021, through June 30, 2023, in an annual amount not to exceed $156,000.00 in fiscal year 2022, $157,500.00 in fiscal year 2023, $159,000.00 in fiscal year 2024, with a mutually agreeable option of extending the contract for each of the three subsequent fiscal years, RFP #20/21-006.