City plans to hire accounting firm Baker Tilly to serve as auditor

By the Daily Post staff

Palo Alto City Council is scheduled to vote on whether to hire the Chicago-based accounting firm of Baker Tilly to serve as city auditor — outsourcing a position that had previously been held by an individual.

The council decided several months ago that instead of having a person fill the position of auditor, it would outsource the job to an accounting firm.

The three contenders for the job were Baker Tilly, Eide Bailly LLP of Fargo, N.D. and Moss Adams LLP of Seattle.

And now the council, after closed door meetings, appears to have settled upon Baker Tilly as its choice. The council will formalize its decision at its Sept. 28 meeting. The city auditor position has remained unfilled for 18 months since the previous city auditor, Harriet Richardson, left in February 2019.

A Baker Tilly senior consulting manager, Kyle O’Rourke, will serve as the company’s liaison to the council. O’Rourke has several titles after his name including CGAP (Certified Government Auditing Professional), MPA (Master of Public Administration), CIA (Certified Internal Auditor) and CRMA (Certification in Risk Management Assurance) among others.

O’Rourke holds a master of public affairs with a concentration in public financial management, and a bachelor of science in public affairs from Indiana University at Bloomington. O’Rourke also serves as senior vice president of the Chicago chapter of the Institute of Internal Auditors. Other industry memberships include the Association of Local Government Auditors (ALGA) and the Association of Government Accountants (AGA).

“It is an honor to be selected as Palo Alto’s next City Auditor and I recognize the unique opportunity for our firm and myself to play this important role,” O’Rourke said in a statement. “Our team brings together extensive public sector and internal audit experience and we will work diligently to achieve the mission the City Council has set for Palo Alto’s City Auditor focus, keeping residents’ best interests at the forefront.”

The City Council’s agreement with Baker Tilly is a 21-month contract with a mutual option to renew for up to three additional years. Contract terms include compensation not to exceed $750,000 per year, with the first year prorated at $550,000. Termination of the contract is at the City Council’s discretion within 10 days.

The $750,000 contract will allow the city to reduce its spending on the auditor’s office by $250,000. The city budget for the fiscal year that ended June 30 called for four full-time positions in the auditor’s office including the city auditor.

Internal auditing services will include on-site work in Palo Alto by O’Rourke and other employees, city-wide risk assessments, approximately six audits per year, management of the fraud, waste and abuse hotline, and selection and oversight of the city financial auditor, which is an outside firm that does the Certified Annual Financial Report.

The city has had an auditor since 1983 after residents voted to change the city’s charter, its governing document, to add the position. The auditor is one of four positions hired directly by the council. The others are city manager, city attorney and city clerk.

Former city auditor Sharon Erickson, who held the position from 2001 to 2008, said that the office primarily does performance audits of city operations to point problems out within the city before they “blew up into a scandal that would be in the Palo Alto papers,” Erickson told the Post previously.

“I think this whole plan is a stunningly bad idea. The council is circumventing the charter with this proposal to outsource,” Erickson said. “We saw ourselves as the eyes and ears of the public in the organization,” Erickson said, pointing out that the office she used to hold made sure that the city’s money was being spent efficiently and effectively.