The Pensacola City Council’s Committee of the Whole (COW) voted unanimously on Monday to ask Florida’s attorney general (AG) whether the council’s audit committee can ratify an invalid RFP and thereby make it valid.
City Attorney Jim Messer had told the city council and the council’s audit committee in May that by ratifying an invalid RFP for an independent auditor, the audit committee could create a valid RFP. At the COW meeting on Monday, Councilwoman Sherri Myers made the motion for the council to ask the attorney general to confirm Messer’s opinion. That motion was unanimously approved.
Prior to Monday’s meeting, Councilwoman Myers explained why she wanted the city council to request the opinion of the attorney general regarding the legality of the ratification process.
“The citizens of Pensacola need to be assured that the council did the right thing in selecting an independent auditor. The AG’s opinion will help provide that assurance,” Myers said. Myers also explained that she needs the support of the city council to obtain the attorney general’s opinion because the AG’s office will not provide opinions to individual council members.
Myers emphasized that requesting the AG’s opinion will not delay contracting with the number one ranked accounting firm to do the audit. And it will not delay that firm’s proceeding with the audit itself. The contract negotiation and the audit can move forward at the same time that the council is seeking the AG’s opinion, Myers said.
“What can possibly be the downside to asking for an opinion from the attorney general to assure the citizens of Pensacola that the council followed a prudent and fair process to select an independent auditor to audit the city’s financial accounts?” Myers asked. “There will be no delay in getting on with the audit. But we need to know sooner rather than later that the process was legal.”
The consequence of the AG returning an adverse opinion regarding ratification is that the RFP process must begin anew.
Myers was prompted to make her request for the AG’s opinion when she received a response to her earlier letter to David Martin, the auditor general of Florida. In his response Martin told Myers that she should seek the opinion of the attorney general to confirm Messer’s opinion.
On June 4, Myers had written the auditor general asking his advice about ratification because the auditor general was largely responsible for passing the statutes that set out the procedures for selecting an independent auditor.
Among other things the statute requires that the audit committee issue the RFP for the independent auditor position. However, back in March, the finance department rather than the audit committee issued the RFP and four accounting firms responded to the proposal request.
On May 17 the audit committee met to discuss the validity of the original RFP. In response to the committee’s questions about the original RFP, Messer provided the members with a written opinion.
“At this point in time there is no valid RFP. There is no valid RFP because the requirement that the Committee provide the factors to use for the evaluation of audit services as set forth in Florida Statute 218.391(2)(a) was not followed in the RFP process,” Messer wrote. “There are two ways to create a valid RFP: a) the first way is to start the process anew with a new RFP draft and issuance; b) the second way is to ratify the current RFP.”
On May 22 the committee met again. At this meeting the committee members did a line by line review of the evaluation criteria of the RFP. The committee found that the criteria of the original RFP complied with the state statutes. Being satisfied with the substance of the original RFP, particularly with regard to the evaluation criteria, the audit committee ratified the RFP and, according to the city attorney’s opinion, created a valid RFP.
The RFP that was ratified retained certain language that inaccurately identified the members of the audit committee and inaccurately described the role of the Mayor and administrative staff in the selection and evaluation process. However, Chair Diane Mack called that language “procedural,” and at Mack’s request, the head of the purchasing department, George Maiberger, informed the firms that submitted proposals, in a written memo, about the procedural inaccuracies in the RFP.
In her letter to the auditor general, Myers explained all of the circumstances surrounding the decision by the audit committee to ratify the original invalid RFP and then asked the auditor general about the ratification.
Deputy Auditor General Ted Sauerbeck replied to Myers’ letter.
“In your letter, you asked the question ‘Did the audit committee create a valid RFP by ratifying the original RFP issued by the finance department,’” Sauerbeck wrote. “While we are not authorized to opine on legal matters, the Florida Attorney General is authorized to render opinions on legal matters pertaining to local governments.”
“The City’s audit committee may want to review the Auditor Selection Guidelines located on our Web site,” he added. “Although the Guidelines are non-mandatory, governmental entities would benefit from using them to help ensure a quality audit. By adhering to the Guidelines, entities can demonstrate to constituents that a prudent and fair auditor selection process was used.”