Chapter 117-3 Audit Contracts

117-3-01 Audit contract.

Whenever the auditor of state determines that an audit of a local public office will not be performed by the auditor of state's office, an independent public accountant may be engaged pursuant to section 115.56 or section 117.11 of the Revised Code to perform the audit.

Replaces: Part of 117-11-01

R.C. 119.032 review dates: 11/30/2010 and 11/30/2015
Promulgated Under: 119.03
Statutory Authority: 115.56 , 117.11
Rule Amplifies: 115.56 , 117.11
Prior Effective Dates: 9/24/1984, 12/23/1984, 7/1/2000

117-3-02 Execution of audit contracts.

(A) All contracts for audits of local public offices shall be executed by the auditor of state. Any contracts for audits of public offices other than state agencies which are not executed by the auditor of state shall be void and no payment shall be issued for services received under such contracts.

(B) Contracts for audits of state agencies shall be subject to the provisions of division (B) of section 117.43 of the Revised Code.

Replaces: 117-11-03

R.C. 119.032 review dates: 11/30/2010 and 11/30/2015
Promulgated Under: 119.03
Statutory Authority: 115.56 , 117.11
Rule Amplifies: 115.56 , 117.11
Prior Effective Dates: 9/24/1984, 12/23/1984, 7/1/2000

117-3-03 Audit contract standards.

Independent public accountants performing audits under contract pursuant to section 115.56 or section 117.11 of the Revised Code shall follow the auditing standards prescribed in the contract in performing such audits. The contract shall incorporate the request for proposals, the response from the independent public accountant, and the memorandum of agreement.

Replaces: 117-11-05

R.C. 119.032 review dates: 11/30/2010 and 11/30/2015
Promulgated Under: 119.03
Statutory Authority: 115.56 , 117.43
Rule Amplifies: 115.56 , 117.43
Prior Effective Dates: 9/24/1984, 12/23/1984, 7/1/2000

117-3-04 Election of public office.

The auditor of state may appoint, either at the request of a public office or on the auditor of state's own initiative, an independent public accountant to perform the financial audit required by section 117.11 of the Revised Code. The public office may participate in the selection of such an independent public accountant pursuant to the process outlined in Chapter 117-3 of the Administrative Code. Requests for audits to be conducted by independent public accountants shall be submitted by the officials of the public office who have the legal authority to enter into binding contracts on behalf of the public office to the auditor of state for approval or disapproval.

Replaces: 117-11-07

R.C. 119.032 review dates: 11/30/2010 and 11/30/2015
Promulgated Under: 119.03
Statutory Authority: 115.56 , 117.11
Rule Amplifies: 115.56 , 117.11
Prior Effective Dates: 9/24/1984, 12/23/1984, 7/1/2000

117-3-05 Request for proposals.

Where the auditor of state has determined that an audit will be performed by an independent public accountant, the auditor of state will prepare a request for proposals. This document will clearly set forth:

(A) Clear and accurate specifications of the requirements of the audit;

(B) Minimum requirements which independent public accountants seeking the audit engagement must fulfill; and

(C) The period or periods to be covered by the audit.

Replaces: 117-11-08

R.C. 119.032 review dates: 11/30/2010 and 11/30/2015
Promulgated Under: 119.03
Statutory Authority: 115.56 , 117.11
Rule Amplifies: 115.56 , 117.11
Prior Effective Dates: 9/24/1984, 12/23/84, 7/1/2000

117-3-06 Submission of request for proposals.

The request for proposals will be submitted to not fewer than three independent public accountants who have registered with the auditor of state and who have indicated their desire to contract to audit public offices of the class under consideration. The request for proposals shall be submitted only to responsible independent public accountants that possess the potential ability to perform successfully under the terms and conditions of the proposed audit engagement. Consideration may be given to such matters as integrity, compliance with public policy, record of past performance, and technical resources. Reasonable requests by the public office for the inclusion of a specific firm in the selection process will be honored to the maximum extent practicable.

Replaces: 117-11-09

R.C. 119.032 review dates: 11/30/2010 and 11/30/2015
Promulgated Under: 119.03
Statutory Authority: 115.56 , 117.11
Rule Amplifies: 115.56 , 117.11
Prior Effective Dates: 9/24/1984, 12/23/1984, 7/1/2000

117-3-07 Proposal.

Each independent public accountant to whom the request for proposals has been sent and who desires to be considered for selection to perform the audit shall submit to the auditor of state a complete, concise, and comprehensible proposal in the form and manner specified in the request for proposals. The auditor of state shall forward a copy of all proposals received to the contracting public office.

Replaces: 117-11-10

R.C. 119.032 review dates: 11/30/2010 and 11/30/2015
Promulgated Under: 119.03
Statutory Authority: 115.56 , 117.11
Rule Amplifies: 115.56 , 117.11
Prior Effective Dates: 9/24/1984, 12/23/1984, 7/1/2000

117-3-08 Criteria for selection.

The auditor of state and the public office shall review the proposals separately on the basis of criteria set forth in the request for proposals. Such criteria may include:

(A) Organization size and location of office;

(B) Qualifications of staff to be assigned to the audit;

(C) Prior experience in auditing governmental units and programs or not-for-profit entities or other specialized accounting practices applicable to the audit;

(D) Independent public accountant's understanding of the work to be performed;

(E) Quality of audit reports previously submitted; and

(F) Fee.

Effective: 04/01/2011
R.C. 119.032 review dates: 11/30/2010 and 04/01/2015
Promulgated Under: 119.03
Statutory Authority: 115.56 , 117.11
Rule Amplifies: 115.56 , 117.11
Prior Effective Dates: 9/24/84, 12/23/84, 7/1/00

117-3-09 Selection and award.

The selection of the independent public accountant shall be made by the auditor of state. Upon selection of a proposal, the auditor of state will send a formal notice of award to the independent public accountant and to the public office. The auditor of state will also prepare the memorandum of agreement on the basis of the request for proposals and submit it to the independent public accountant and the public office for execution.

Replaces: 117-11-12

R.C. 119.032 review dates: 11/30/2010 and 11/30/2015
Promulgated Under: 119.03
Statutory Authority: 115.56 , 117.11
Rule Amplifies: 115.56 , 117.11
Prior Effective Dates: 9/24/1984, 12/23/1984, 7/1/2000

117-3-10 Alternative procedures.

If, in the opinion of the auditor of state, none of the responses submitted by the independent public accountants are satisfactory the auditor of state may either:

(A) Recommend the competitive selection procedures as set forth in Chapter 117-3 of the Administrative Code, including, insofar as the auditor of state considers necessary, providing the request for proposals to additional independent public accountants for consideration; or

(B) Without further formal proceedings, award the audit contract to an independent public accountant who, on the basis of the applicable review criteria, the auditor of state considers to be most desirable.

Replaces: 117-11-13

R.C. 119.032 review dates: 11/30/2010 and 11/30/2015
Promulgated Under: 119.03
Statutory Authority: 115.56 , 117.11
Rule Amplifies: 115.56 , 117.11
Prior Effective Dates: 9/24/1984, 12/29/1984, 7/1/2000

117-3-11 Waiver.

Notwithstanding the provisions of Chapter 117-3 of the Administrative Code, if the officials of the public office refuse to participate in the selection of the independent public accountant or in the contracting process, the auditor of state may, without further formal proceedings, award the audit contract to the independent public accountant who, on the basis of the applicable review criteria, the auditor of state considers to be most desirable. "Refuse to participate" includes both an express refusal to participate and a failure to perform actions required by the auditor of state.

Replaces: 117-11-14

R.C. 119.032 review dates: 11/30/2010 and 11/30/2015
Promulgated Under: 119.03
Statutory Authority: 115.56 , 117.11
Rule Amplifies: 115.56 , 117.11
Prior Effective Dates: 9/24/1984, 12/29/1984, 7/1/2000