Modesto moves to replace auditor with new one at twice the cost

The division on the Modesto City Council was on full display last week as council members spent nearly two hours discussing whether to replace the consulting firm that serves as the city auditor with an in-house auditor at twice the cost.

Mayor Ted Brandvold wants to remove Moss Adams — the Seattle-based certified public accounting and business consulting firm that has worked for the city since 2011 — with an auditor who would be a city employee.

His proposal would cost Modesto $367,756 in its upcoming budget year, which starts July 1. That includes hiring an auditor and a staff person to help the auditor and $100,000 for consulting services. Modesto allocated $181,493 in its current budget for Moss Adams.

Moss Adams does not perform the city’s financial audits but focuses on efficiency studies, performance reviews and similar matters.

Council members Jenny Kenoyer and Doug Ridenour questioned how the city could afford this given its financial challenges and why it would do this given that they were not aware of any complaints regarding Moss Adams.

“I’m just not really understanding the feasibility of this,” Kenoyer said. “If we are supposed to be conscious of our very tight budget, why would we be adding extra spending?”

And Modesto’s last experience with an in-house auditor did not go well. A previous council in 2010 terminated the contract with that city auditor after he had been on the job for just 18 months because he had not uncovered enough inefficiencies.

But Brandvold said having an in-house auditor should pay for itself over time as that auditor saves Modesto money as he finds more efficient ways for the city to operate than a contract auditor based in Seattle. Moss Adams has offices in Stockton and Sacramento, but Brandvold said after the meeting that still would not provide the same presence at City Hall as an in-house auditor.

He added that an in-house auditor would be more accountable to him and the rest of the council and serve as another watchdog at City Hall, though Ridenour and Kenoyer said they found Moss Adams to be accountable and accessible.

Brandvold’s proposal has the support of the Modesto Chamber of Commerce, Chuck Bryant — who helped Brandvold get elected in February 2016 and served as chairman of his 100-day budget review committee — and the Stanislaus Taxpayers Association.

STA President Dave Thomas told council members that they need an auditor who is directly reportable to them and will work full-time on their behalf and not on the special projects of the city’s bureaucracy. He added that was the intent when Modesto amended its city charter roughly a decade ago to create the position.

If Moss Adams is not accountable to the council, that would be the fault of the council. Moss Adams’ work schedule is approved by the council’s Audit Committee and the full council. The consulting firm also reports its findings to the committee and the council.

The discussion about the auditor was part of the council’s initial approval of Modesto’s upcoming $367 million operating budget. The council will give its final approval June 27.

Ridenour and Kenoyer asked for separate votes on the city auditor and the budget but were rebuffed by the other council members, who wanted one vote on both items. The two cast the only “no” votes. Councilman Bill Zoslocki was not at the meeting.

This story was originally published June 18, 2017 at 5:01 PM with the headline "Modesto moves to replace auditor with new one at twice the cost."