Prior to 2015 the City utilized the services of Kraft CPAs, PLLC (Kraft) to conduct the annual audit and financial statement preparation. In the interest of good governance in FY 2015, it was decided to solicit proposals from firms interested in performing the financial audits for the City. The contract at that time was awarded to Crosslin, PLLC (Crosslin). From 2015 to 2020, the City utilized the services of Crosslin for financial and compliance audit services. Crosslin performed satisfactorily during this time. As the five-year agreement with Crosslin was coming to an end, the City again solicited proposals from firms interested in performing financial audits for the City and the contract was awarded to Blankenship CPA Group, PLLC (Blankenship). For FY 2021 and FY 2022 auditing services, Blankenship struggled to deliver on their commitment, and therefore, after much consideration, staff decided not to recommend renewal of the agreement with Blankenship.
In lieu of conducting another full Request for Proposals process as was done in 2021, staff reviewed the results of the 2021 RFP (see attached) to identify potential firms to consider. Staff decided not to consider Crosslin so soon after the last five-year engagement with them. Of the other three responsive firms, staff had no knowledge of the experience of ATA or Rodefer Moss & Co. but obviously had extensive knowledge of Kraft. Given the time constraints around making this important decision and the desire to have a smooth transition to a new firm, staff contacted Kraft to discuss their willingness and ability to take on an additional client. Kraft was willing to agree to take on the City's auditing services for FY 2023. During the time prior to 2015, the City experienced an independent, positive, and professional relationship with Kraft, meeting the service needs for the annual audit of the City's financial statements and preparation of the Annual Comprehensive Financial Report (ACFR).
Kraft is one of the largest accounting firms in Tennessee with more than 250 employees. The firm (founded in 1958) specializes in the governmental and non-profit arena and lists the following as current clients: City of Hendersonville, City of White House, City of Belle Meade, Emergency Communications District of Nashville and Davidson County, and White House Utility District. Kraft was chosen as a 2023 Top Accounting Firm and a 2023 Top Tax Firm based on a Forbes survey. Additional information is provided in the attached proposal.
The attached proposed agreement is for the audit of the City's financial statements for all funds and preparation of the ACFR for the fiscal year ending June 30, 2023. Separate pricing is provided for the audit of the Emergency Communications District to account for those costs separately. The approval of the ECD portion of the audit contract will also be considered on April 10, 2023 as part of the ECD meeting preceding the regular Board of Commissioners meeting.
The total proposed fee for FY 2023 auditing services is $59,000, with an additional fixed cost of $3,800 for a single audit of one major program. A major program is one whose grant expenditures exceed $750,000 in one fiscal year. For each additional major program, the fee is between $3,500 and $4,000, dependent upon complexity. No incidental expenses will be charged to the City. Pricing is provided for two (2) additional one-year renewal options, for a total of three years.
| June 30, 2023 |
$59,000 |
$3,800 |
$62,800 |
| June 30, 2024 |
$60,400 |
$3,800 |
$64,200 |
| June 30, 2025 |
$61,800 |
$3,800 |
$65,600 |
For comparison purposes the current year cost for Blankenship to audit the FY 2022 financials for all funds except ECD was $48,400. Had both parties agreed to renew the Blankenship agreement for next year to audit the FY 2022 financials for all funds except ECD, the contracted fee would have been $49,900 compared to the $59,000 fee from Kraft. While there is no way to know for sure, staff believes based on several conversations with Blankenship staff, it is very likely they would have requested a contract amendment to increase their original proposed third year fee due to increased staffing costs.
Please contact Finance Director or Assistant Finance Director if you have questions. |