(1) In selecting an independent auditor to perform an audit under 2-7-503 , MCA, a local government entity shall consider the following criteria:

(a) listing on department's roster of independent auditors authorized to conduct local government audits;

(b) independence, as defined by applicable auditing standards;

(c) demonstrated understanding of the work to be performed;

(d) technical experience of the independent auditor in conducting similar types of local government entity audits;

(e) qualifications of staff to be assigned to the audit;

(f) work history of the independent auditor; and

(g) the proposed audit fee.

(2) The department may require the local government entity to demonstrate that the independent auditor selected is qualified to conduct the audit based on an evaluation of:

(a) the criteria established in (1);

(b) any additional information requested by and used by the local government entity in selecting the independent auditor; and

(c) the results of oral interviews of independent auditors conducted by the local government entity, if appropriate.