Question: We are required to put out a Request For Proposal (RFP) for our next auditor. Are there any new guidelines?
Response: AB 2834 (Chapter 1128/2002) was approved by the Governor on September 30, 2002 and has put new guidelines into place for audit service RFP's. There is now a limit of six consecutive years for any firm where the partner-in-charge of the audit and the reviewing partner has been the same in each of those years. The law does allow the six-year limitation to be waived by the Education Audits Appeals Panel if it finds that no other eligible auditor is available to perform the audit. Please go to the following site to review the full content of AB 2834:
Here is section four of AB 2834 that directly relates to your question.
"4) Existing law requires the audits be made by certified public accountants or licensed public accountants. This bill would require local education agencies to select these accountants from a directory approved by the Controller. The bill would require the directory to be published not later than December 31 of each year and would require the accountants included in the directory to be in good standing with the Board of Accountancy and to have no prior history of noncompliance in the education context.
The bill would make it unlawful, commencing with the 2003-04 fiscal year and except as specified, for a public accounting firm to provide audit services to a local educational agency if the lead or coordinating audit partner having primary responsibility for the audit or the audit partner responsible for reviewing the audit, performed audit services for the local education agency for each of the 6 previous fiscal years. The bill would require that a nonauditing, management, or other consulting service provided to a local education agency by a certified public accounting firm while the certified public accounting firm is performing an audit of the agency pursuant to this section to be in accord with specified standards."
02/04/03
