RE-8 selects new auditing firm

Because BDO Global backed out in September, the district was on a time-crunch to find a new auditor

Nina Joss
njoss@coloradocommunitymedia.com
Posted 9/29/22

Staffing issues at an international accounting and consulting firm has the Weld RE-8 School Board scrambling to find a group to lead their annual audit next year.

Shortly before it was set to …

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RE-8 selects new auditing firm

Because BDO Global backed out in September, the district was on a time-crunch to find a new auditor

Posted

Staffing issues at an international accounting and consulting firm had the Weld RE-8 School Board scrambling to find a group to lead their annual audit.

Shortly before it was set to begin the audit process for the Weld Re-8 School District, auditing firm BDO Global – who has worked with the Fort Lupton district for four years – backed out of its commitment due to staffing issues.

The district selected a new auditor, CliftonLarsonAllen (CLA), to complete the financial inspection before March 1, Director of Finance and Business Services Jessica Holbrook said.

“It puts us in a very difficult position, as normally this is the time of year that auditors are coming into the district and doing field work and getting everything that they need to accomplish in order to have that audit delivered by Dec. 31,” she said in the Sept. 22 regular board of education meeting.

According to Holbrook, BDO also backed out of auditing commitments to Eaton RE-2 School District, Weld County School District RE-1 and Estes Park School District R-2 within days of dropping RE-8.

Normally, audits are due to the state Dec. 31, according to Holbrook. But due to the district’s situation, the Office of the State Auditor granted RE-8 an extension until March 1, she said.

At the Sept. 22 meeting, Holbrook requested that several board policies be waived to expedite the process of finding a new auditor. The normal process for choosing an auditing firm takes about two months, she said.

The motion passed unanimously, letting Superintendent Alan Kaylor and his staff choose an auditing firm without going to the board for approval throughout the process, Holbrook said.

“We’re just trying to speed up the whole process by not going through all of that,” she said.

After considering several bids, the district chose CliftonLarsonAllen (CLA) to be their new auditor Sept. 28, Holbrook said. She said other districts had good things to say about the firm and it quoted a lower price and a better timeline for the project.

"We feel confident that they'll be able to get (our audit) done in a timely manner and with great accuracy," she said.

Dissatisfaction and understanding:

Board member Cody LeBlanc said the thought of subverting board policy made him reluctant to vote in favor of the motion, but he did so because it made sense for the timeline.

“I believe that our board policy on requests for proposals is important to just ensure total transparency in large transactions that the district engages in,” he said. “I was hesitant to vote yes, but I did because we were so short on time.”

During the meeting, Holbrook said the district had a five-year commitment with BDO that was re-engaged annually — but it was not a contract. She said either party could have backed out of the committment at any point.

LeBlanc said he wished he had known that sooner. He said he was dissatisfied with BDO’s service over the last two years because it did not complete audits on time.

“After their performance the last couple of years, I wish I would have… realized that because I would have asked for us to get rid of them in June," he said.

Holbrook told CCM these delays were because of federal funding related to COVID, which complicated the auditing process for many districts. She said some delays in the process were specifically due to the late release of federal regulations for COVID funding, a factor outside of BDO's control.

For these reasons, she said she didn’t blame BDO for how it conducted business in the past.

“There's a heavy strain on auditing firms just due to the mass increase of work that they're having to do, so I never once looked at anything that BDO had done in the past as a negative,” she said.

But Holbrook said she was shocked that BDO backed out of their commitment so late in the year. She said she thought the staffing issues at the company had to do with COVID.

Kaylor, too, was frustrated with the way BDO backed out of its commitment.

“I would go so far as to say I think it was unprofessional on (BDO’s) part to enter into an agreement with us, and then not be able to fulfill the agreement, especially the timing,” he said to CCM.

Randy Watkins, a representative of BDO, did not respond to CCM’s request for comment for this story.

Re-8’s recent audits can be found on the “Financial Transparency” page of the district’s website.

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