International audit firm with notable public sector experience selected to perform City audit services for up to five years

City of Palo Alto logoThe Palo Alto City Council is slated to approve a contract through June 2022 with an option to extend for three years with internationally-regarded advisory, tax, auditing, and assurance firm Baker Tilly US, LLP (Baker Tilly) and appoint Kyle O’Rourke, MPA, CIA, CGAP, CRMA, Senior Consulting Manager in Baker Tilly’s Public Sector practice, as City Auditor on September 28.

Baker Tilly is one of the few comprehensive professional services firms with a practice dedicated to state and local governmental clients. Baker Tilly’s experience extends across more than 40 states with specific public sector clients in California such as the cities of Carlsbad, Riverside, Burbank, Modesto, and Richmond and several utility clients including Sacramento Municipal Utility District, Imperial Irrigation District, Northern California Power Agency, San Diego Gas & Electric, Glendale Utilities, Pasadena Water and Electric, Anaheim Public Utilities, and the California Public Utilities Commission. This is notable as Palo Alto owns and operates its own utilities.

“On behalf of my Council colleagues, we see tremendous community value in the upcoming selection of Baker Tilly as the firm to represent the City’s internal audit functions, which provides vital risk monitoring transparency and accountability for the Palo Alto community,” said Adrian Fine, mayor of Palo Alto. “Kyle O’Rourke’s experience and leadership managing public sector audit consulting for Baker Tilly will serve our community well as we focus on ensuring annual audits, risk management reviews, and other important work.”

Kyle O’Rourke is a 10-year veteran in internal auditing and consulting services for public sector clients. In addition, O’Rourke specializes in risk consulting, business process reviews, organizational and operational assessments, benchmarking studies, and technology needs assessments. He is a Certified Internal Auditor (CIA), a Certified Government Auditing Professional (CGAP), and 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 (IIA). Other industry memberships include the Association of Local Government Auditors (ALGA) and the Association of Government Accountants (AGA). He holds several other industry certifications and related training including IIA Risk Management Assurance Certification and the IIA Leadership Academy, and has written extensively on auditing, risk management, and related topics.

“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. “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 1.75-year contract with a mutual option to renew for up to three additional years. Internal auditing services will include on-site work in Palo Alto by the City Auditor and other staff, citywide risk assessments, approximately six audits per year, management of the fraud, waste and abuse hotline, and selection and oversight of the City financial auditor. Baker Tilly and Kyle O’Rourke will report to the City Council and audit plans, status updates, and reports will continue to be reviewed by the City Council Policy and Services Committee. Contract terms include compensation not to exceed $750K per year, with the first year prorated at $550K. Termination of the contract is at the City Council’s discretion within 10 days.

The City Council led a competitive procurement process to select its top firm to provide internal auditing services. In February 2020, the City Council unanimously requested the Council Appointed Officers Committee (CAO Committee) to initiate a Request For Proposal (RFP) process to engage an outside firm to provide internal auditor services for the City of Palo Alto. After the City Council’s action, they engaged an outside consulting firm, Management Partners, to support the work of the CAO Committee. From April to June, the CAO Committee and evaluation team reviewed the RFP and evaluation process, developed the scope of services, and screened responses to the RFP. This work resulted in public interviews of top firms by the CAO Committee on July 28. Following these public interviews, the City Council conducted closed session interviews of the City Auditor candidates designated by the top firms recommended by the CAO Committee. Through the interview process, the Council has selected Baker Tilly and Kyle O’Rourke to lead the City’s internal audit services.

If the City Council approves the Baker Tilly contract and adopts the resolution to appoint Kyle O’Rourke as Palo Alto’s City Auditor, the internal auditing services engagement will begin on October 1.