Annual Post Audit

Legal Requirements

Rhode Island General Law Section 45-10-4 requires:

• Municipalities and regional school district to engage an independent certified public accountant to make a detailed post audit of their financial records. School districts which are part of the primary government of a municipality shall be included in the municipality's post audit and shall not be required to obtain a separate post audit;
• Annual audits of municipalities and school districts, to be conducted in accordance with generally accepted auditing standards and government auditing standards;
• Selection of auditors to be subject to final written approval by the State Auditor General. Municipalities and school districts shall not engage auditors nor contract for their services until such written authorization is received by the Auditor General; and
• The term school district shall include regional school districts.

Refer to section on School Uniform Chart of Accounts (UCOA) – Agreed-Upon Procedures for additional annual reporting requirements related to school districts.

Procedure for Requesting Approval of RFP for Audit Services and Auditor Selection

In order to assist municipalities going through the auditor selection process this office has issued Guidelines for Audit Bids and Specifications for municipalities. These guidelines contain information that should be included in a request for proposal of audit services, as well as the forms necessary to obtain approval of:

• the request for proposal prior to its issuance (Appendix 1); and
• the proposed selection of auditor prior to engaging or entering into a contract for services (Appendix 2) and (Appendix 3).

As part of the approval of a municipality’s or regional school district’s selection of an independent auditor, the Auditor General will consider several factors, including but not limited to the following:

• the municipality’s or regional school district’s basis for selecting an audit firm;
• the audit firm’s qualifications and responses relative to the RFP;
• the audit firm’s capacity and track record for meeting required deadlines (e.g. staffing levels and other government engagements with similar due dates); and
• the audit firm’s cost proposal for the engagement relative to the other proposals.

By approving the municipality’s or regional school district’s selection of an audit firm, the Auditor General is not ensuring that the audit firm will (1) meet all contractual terms including the municipality’s or regional school district’s deadline for completion of the audit or (2) comply with professional standards in the conduct of the audit.

Approval of a firm to conduct the audit does not limit our authority to review, make further inquiries, and/or reject the audit report.