November 5, 2007     City of Dallas to Hire New Auditor

The Dallas City Council is expected to hire Grant Thornton LLP to perform the annual audit of the City’s financial operations for the next three fiscal years.  Grant Thornton will replace KPMG which has audited the City’s statements for the past several years.  The audits will cost the city a total of $3,147,000 or about $1, 1049,000 each year. 

The City’s audit reports are due to be issued six-months after the end of the September 30 fiscal year.  For the past two years, KPMG was unable to issue their reports prior to the due date. 

The audit for fiscal year 2006 was awarded to KPMG on December 13, 2006.  This contract was for $950,000 based on an estimate of 5,000 audit hours at a billing rate of $190 per hour.  Subsequent to completion of their work and the issuance of the report, the City Council was asked to approve an additional $334,834 for time spent by KPMG auditors that exceeded the original estimate.

This additional time spent was attributable to the “lack of reliance on existing City controls, grant compliance issues, and the financial system upgrade in fiscal year 2006.”