I'm about 60% through an audit for a property management company in Spokane served by Avista. The PM company just got acquired by a larger firm and the new management wants to revoke all existing third-party authorizations pending their own compliance review. My LOA is still valid and I have most of the data I need but not all of it. Can they revoke an LOA mid-engagement? Should I rush to request everything I still need before the revocation takes effect?
Client wants to revoke my LOA before the audit is finished
The client can revoke an LOA at any time — it's their authorization and they control it. But your engagement agreement should be a separate document from the LOA. The LOA is between the client and the utility. The engagement agreement is between you and the client. Even if the LOA gets revoked, your engagement agreement and any work product you've already created should be protected under that contract. That said, yes — I would absolutely submit any remaining data requests immediately before the revocation is processed.
I'd also reach out to the new management directly. Frame it as an opportunity: you've already done significant analysis and found preliminary savings. Offer to present your findings so far and let them decide whether to continue. Most acquirers want to reduce costs at the properties they just bought. Your audit might align perfectly with their goals. The compliance review is probably just standard due diligence, not a rejection of your work.
Good advice from both of you. I submitted my remaining data requests immediately and Avista processed them before the revocation came through. Also reached out to the new management and Susan was right — they were very interested in the savings I'd already identified. They issued a new LOA under their own letterhead and I'm continuing the audit under a new engagement agreement with the acquiring company. Actually ended up expanding the scope to include their other properties too.
This is a great example of turning a potential setback into an expanded engagement. Cindy handled it well by acting quickly on the data requests and proactively engaging the new ownership. The lesson for everyone is to always keep your engagement agreement separate from your LOA, and to have a clause in your agreement that addresses what happens if the client relationship changes during the engagement — mergers, acquisitions, and management changes are common in commercial real estate.