Title
Consider a memorandum/resolution renewing the agreement with Pattillo, Brown & Hill, LLP to provide independent auditing services for the City of Killeen for the fiscal year ending September 30, 2025.
Body
DATE: June 3, 2025
TO: Kent Cagle, City Manager
FROM: Judith Tangalin, Executive Director of Finance
SUBJECT: Independent Auditing Services
BACKGROUND AND FINDINGS:
The City Charter and Financial Governance Policy require City Council to designate a qualified certified public accountant to perform the City’s annual audit. The audit must be conducted in accordance with Government Auditing Standards issued by the Government Accountability Office (GAO), the Single Audit Act Amendments of 1996, and the Office of Management and Budget’s Uniform Guidance.
In 2022, the City issued RFQ #22-27 to solicit independent audit services for FY 2022 and FY 2023, with the option to extend for three additional years. Pattillo, Brown & Hill, LLP was selected through this process, and City Council has approved their engagement for the past three fiscal years, including FY 2024.
On May 19, 2025, staff presented the proposed engagement to the Audit Committee, which voted to recommend continuing with Pattillo, Brown & Hill, LLP for the Fiscal Year 2025 audit. This engagement would be the second of the three optional extension years under the original RFQ.
Pattillo, Brown & Hill, LLP continues to demonstrate a strong understanding of governmental auditing, maintains an experienced audit team, and has consistently provided timely and professional service.
THE ALTERNATIVES CONSIDERED:
N/A
Which alternative is recommended? Why?
N/A
CONFORMITY TO CITY POLICY:
This action aligns with City Charter Section 40, which requires that, prior to the end of each fiscal year, the City Council designate qualified Certified Public Accountants to perform an independent audit of the City’s accounts and financial transactions. The selected auditor must have no personal interest in the fiscal affairs of the City and must not be involved in maintaining the City’s records. The audit must be conducted as a post-audit of the books and documents maintained by the Department of Finance and other City departments, in accordance with specifications approved by the City Council.
Additionally, Texas Local Government Code Section 103.001 requires all municipalities to conduct an annual audit of their records and accounts and to prepare an annual financial statement based on that audit.
FINANCIAL IMPACT:
What is the amount of the revenue/expenditure in the current fiscal year? For future years?
|
|
2026 |
|
Audit |
$126,000 |
|
Single Audit Base Fee |
$5,000 |
|
Single Audit Major Program (1) |
$7,500 |
|
PFC Audit & Report |
$10,000 |
|
Total |
$148,500 |
|
Estimated 3 major programs @ $7500 each |
$22,500 |
|
Total estimate per year |
$171,000 |
Is this a one-time or recurring revenue/expenditure?
Recurring expenditure
Is this revenue/expenditure budgeted?
Yes, expenditures are budgeted for all applicable funds in accounting services xxx-54210-xxx-xxx-xxxxxx. The costs related to the FY 2025 audit will be incurred across two fiscal years. The interim audit work is budgeted in the FY 2025 Adopted Budget, and the remaining costs for final audit work will be included in the proposed FY 2026 Budget.
If not, where will the money come from?
N/A
Is there a sufficient amount in the budgeted line-item for this revenue/expenditure?
Yes. A portion of the cost is included in the FY 2025 Adopted Budget for interim work, and the remainder will be included in the proposed FY 2026 Budget for final audit services, pending Council approval.
RECOMMENDATION:
Staff recommends that the City Council appoint Pattillo, Brown & Hill, LLP to provide independent auditing services to the City of Killeen for the fiscal year ended September 30, 2025.
DEPARTMENTAL CLEARANCES:
Legall
ATTACHED SUPPORTING DOCUMENTS:
Engagement Letter
Fee Schedule
Certificate of Interested Parties
Presentation