Macomb County will have a new auditor beginning next year after the current firm unexpectedly raised its price this year and submitted a higher bid than its competitor for the next five-year contract.
The county Board of Commissioners last week unanimously approved hiring Sterling Heights-based UHY Advisors to perform its audit from 2023 to 2027 for the prior year’s finances at a total cost of $851,000.
The bid was significantly higher than the $1.58 million bid proposed by Plante Moran, which is a national firm with an office in Clinton Township. A third firm, Accutrak Accounting & Consulting in St. Clair Shores, submitted the lowest bid, but county finance officials said it lacked experience in municipal audits.
UHY is the largest Macomb County-based accounting firm.
“We have confidence UHY fits the qualifications of what we’re looking for and of course the prices, as you may have noticed on the bid-spec list, was substantially lower than the incumbent and the other firm which did not have a lot of governmental audit experience, which is why we could not go with them,” county Deputy Finance Director Steve Adair told the board Tuesday at a committee meeting.
The board panel, a committee of the whole, voted to advance the request to the full board, which gave final approval Thursday.
Plante Moran has been the county’s auditor for 10 years.
Both firms’ proposal included an approximately 3% increase year to year, but Plante Moran’s total hours and cost per hour for some work were higher, county finance officials said.
Plante Moran rankled some board members a couple of months ago when it demanded a 42% increase in this year’s audit contract to review 2021 accounting maneuvers, from $170,000 to $241,500, due to extra work required to track the influx of federal funds received by the county as a result of the COVID-19 pandemic.
Board members said they had no choice but to approve it.
Coincidentally, Plante Moran at the same meeting Tuesday provided its annual report on the general audit but still must complete the “single audit,” which reviews the federal revenue and spending, by Sept. 30.
Macomb County auditor ups fee by 42% due to heightened federal-funds tracking
To eliminate any perception of a conflict of interest, UHY accountant Harold Burns will resign as treasurer for the campaigns of county Executive Mark Hackel and county Public Works director Candice Miller after the November election and before Jan. 1, UHY officials said. Hackel is running for re-election this year.
In early 2019, UHY was initially hired to conduct the audit of former county prosecutor Eric Smith’s expenditure of $1.8 million in certain forfeiture and other public funds from 2012 to 2018. But UHY was replaced with another firm due to Burns’ role in the Hackel campaign. Smith’s expenditures of the funds resulted him in being charged with 10 felonies for which he is scheduled for face trial in April in Macomb Circuit Court.
Commissioner Veronica Klinefelt of Eastpointe said at Tuesday’s meeting UHY “got ripped off” by losing that audit though “there was no conflict (of interest) in any way, shape or form.”
UHY five years ago also conducted an audit of spending by the county Public Works Office while under the leadership of then-public works commissioner Anthony Marrocco, who as indicted on various allegations by federal authorities for which he faces trial in October.
Commissioner Julie Matuzak of Clinton Township said she was pleased the service was put out to bid though it was not a requirement because it is a “professional services” contract. She repeated her prior assertions that county administrators sometimes automatically want to stay with the same professional services firm because of familiarity.
“I am happy we’ve bid this out,” Matuzak said. “Too often we hear (from administrators), ‘We’ve always used them, we’ve used them before, we’re comfortable with them.’ … This is a really good example of why we’re doing this.”
Another commissioner expressed concern about UHY being unfamiliar with Macomb County, but Commissioner Jeff Farrington of Utica, who works in finance, said it can be good for new people inspect the books.
“I think it’s always good to have a new set of eyes … every 10, 12 years,” he said, adding UHY “has an excellent reputation.”
Marlene Beach of UHY agreed its accountants will have to familiarize themselves with the county’s financial workings.
“We realize there’s going to be some extra time we have to commit on our part to get to know the county, know how you do things,” Beach told the board. “Hopefully we can come up with some questions that haven’t been asked before.”
UHY has about 50 municipal clients out of its Port Huron office alone, Beach said, including St. Clair and Lapeer counties. Macomb will be its largest municipal client, she said.
Beach pointed to Plante Moran’s report earlier in the meeting that only one minor issue came up in its audit of 2021 finances.
“That’s comforting for us coming in knowing that we’ve had a good audit, processes are going well, that you have internal controls,” she said. “We will look at them as part of our audit.”
Lisa Plonka of Plante Moran reported there was only one minor deficiency noted in the audit of 2021. The report says there was a “lack of segregation of duties related to online banking and payment processing” for an employee and a single bank account in the DPW.
“We did not notice or did not note any inappropriate expenditures having been made,” she said. “This was really an issue where there was potential-ability to be paid without duplicate or duel authorization where an individual could both initiate and approve a disbursement.”
Adair said he believes the portal was set up during the COVID-19 pandemic when employees were working remotely, and it will be eliminated.
The audit report also repeated a concern it has mentioned in prior reports that some of the county’s “alternative investments” are “more inherently difficult to value.”
David Herrington of Plante Moran gave parting words to the board.
“I think a lot of good has been done, and we’re proud to have worked alongside many of you for the past decade,” he said.
Macomb County financial audit ‘clean’ for the first time in several years
