Recommendation as submitted by Richard Bendall, Chief Internal Auditor:
Internal Audit recommends your Committee review the results of Staff's evaluations and direct Internal Audit to submit the recommendation memo to the LACERA Board of Retirement for the Board's consideration in selecting LACERA's external financial statement auditor for the five year period beginning January 1, 2010 and ending December 31, 2014, with a two year extension at the option of LACERA.
(Memo dated September 1, 2009)
Richard Bendall, Chief Internal Auditor, gave an overview of the process performed to identify all the candidates and the subsequent finalists. Mr. Bendall also reviewed the recommendation memo that would go to the Board of Retirement, once the Committee's recommendation has been made.
The Committee inquired if LACERA had a policy requiring external auditor rotation. As stated by Mr. Bendall, LACERA does not have a policy requiring external auditor rotation. At this time a discussion ensued where both staff and the Audit Committee discussed the pros and cons of auditor rotation, the size of the three finalists, the relationship with the current external auditor and external auditor insurance requirements.
Richard continued by giving overview of the appendices in the recommendation memo which included an overview of the finalists.
Mr. Schneider moved to approve the recommendation as stated in “Action Item A.” The motion was seconded by Mr. Morris and approved with a 3 to I vote. Chairman Russin, Mr. Morris and Mr. Schneider voted yes. Mr. Santos voted no, with the opinion that Brown Armstrong should be removed from the list of finalists, due to the fact that they have been LACERA's auditors for the past 7 years.
