HomeMy WebLinkAboutE- 5 Audit Services Contract •
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AZUSA
CONSENT CALENDAR
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: MARCIE MEDINA, DIRECTOR OF FINANCE
VIA: RICK COLE, CITY MANAGER Ze
DATE: MARCH 4, 2002
SUBJECT: AUDIT SERVICES CONTRACT
RECOMMENDATION
It is recommended that the City Council approve the proposal for audit services from Lance, Soli •
&Lunghard for a new three year contract with a one year option renewal
BACKGROUND
The City conducted an extensive interview process in evaluating proposals for auditing services
four years ago. The City then appointed Lance, Soli &Lungard Certified Public Accountants for
audit services for four years ending with fiscal year ending June 30, 2001. Changing auditors
involves a training period, during which the auditors become familiar with the City and staff. It
took our current auditors at least three years to get familiar with Azusa's accounting system,
policies &procedures and to build good interaction with City staff.
For these reasons, staff is recommending that the City extend the current agreement with Lance,
Soil &Lunghard for an additional three years with an option to renew for one additional year.
At the conclusion of this period, staff will rebid the service to insure high quality audit services
in the future.
FISCAL IMPACT
First year services will total $56,002 and will be included in the Finance Department's FY2003
operating budget. The agreement calls for a modest (approximately 2%) increase per year with
a maximum price of $60,200 in the fourth year of service.
l1L3.am@ 03 2North B3rea Boulevard �„ 4.
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6 Brea,CA 92821-4056 1,�I 701n ),�Lunghard (714)672 0022 ,i
LLP Fax (714) 672-0331 \1 /#
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CERTIFIED PUBLIC ACCOUNTANTS www.Islcpas.com pNxly
1949-19991999
Brandon W.Burrows
Donald L.Parker
Michael K.Chu
David E.Hale
A Professional Corporation
January 31, 2002 Donald G.Slater
Richard K.Kikuchi
Retired
Robert C.Lance
1914-1994
Richard C.Soil
Marcie Medina
Fred192-Lu9nghard,Jr.
Director of Finance
City of Azusa
213 E. Foothill Blvd
Azusa, CA 91702-1395
.:-- _ _s_
Dear Ms. Medina:
As you are aware, our contract with the City of Azusa for auditing services will
expire with the fiscal year ending June 30, 2001. Over the past four years, we have provided the
City and Redevelopment Agency with auditing and accounting services which:
• Produced a CAFR meeting all the requirements necessary to receive the
Government Finance Officer's and California Society of Municipal Officer's Award
for excellence in financial reporting.
• Met all Federal and State filing requirements for various audits and reports,
including the State Controller's Office requirements for the Redevelopment
Agency's Controller's Report.
• Provided assistance and information to your staff and helpful recommendations to
management, when requested.
We have made it a priority to provide the City of Azusa and the Azusa
Redevelopment Agency with the best service available and we would like to continue to provide
this level of service to the City and Agency. Since we are familiar with your accounting system,
we will be able to perform an efficient audit, which will benefit the City and Agency with
continuity of firm personnel and minimal disruption to City staff during the audit. In addition, we
have structured staff rotation in your engagement so that the City will always receive a fresh look
at its system and records.
As you well know, the City of Azusa will be implementing GASB 34 during the
fiscal year ending June 30, 2003. Lance,Soll & Lunghard, LLP will guide you through this entire
process. Because of our familiarity with your system and personnel, we feel that this transition
process will be a smooth one. Therefore, we will provide this assistance to the City of Azusa at
MEMBER
CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
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CERTIFIED PUBLIC ACCOUNTANTS
Ms. Marcie Medina, Finance Director
City of Azusa
Audit Proposal
January 31, 2002
Page 2
no extra charge. We anticipate holding an initial GASB 34 meeting to establish benchmarks and
a schedule for the next two years in the month of January of 2002.
Toward this end, we would like to propose a new three-year contract with a one
year option to provide continuous and undisrupted auditing services to the City of Azusa. This
contract would start with the 2001-02 fiscal year and would end with the 2004-05 fiscal year.
With regard to fees for our services, we have kept the first year constant and then incorporated a
minimal increase. As noted before, we will provide GASB 34 implementation assistance at no
extra charge to the City.
Our proposed fee schedule for the next four years are as follow:
2001-02 2002-03 2003-04 2004-05
City of Azusa $ 24,110 $ 24,800 $ 25,500 $ 26,300
Azusa Redevelopment Agency 10,158 10,500 10,800 11,100
Azusa Public Financing Authority 1,340 1,400 1,400 1,400
Single Audit 4,900 5,000 5,200 5,400
LA County Title III Senior Program 1,798 1,900 2,000 2,100
Head Start Program 2,039 2,100 2,200 2,300
Azusa Agricultural Water Company 1,471 1,500 1,500 1,500
Azusa Valley Water Company 2,580 2,700 2,800 2,900
Special Audits(3 per year) 5,106 5,300 5,500 5,700
City Investment Portfolio 1,500 1,500 1,500 1,500
Redevelopment Agency
Investment Portfolio 1,000 1,000 1,000 1,000
Total $ 56,002 $ 56,700 $ 58,400 $ 60,200
The services to be performed, fee structure and billing methods would remain
unchanged from our prior agreement. This would include the termination section that provides for
termination of the agreement upon 15 days written notice from either party.
Again, we look forward to continuing to provide quality services to the City and
the Redevelopment Agency. To update your file, we have previously provided to you a copy of
our most recent Peer Review Report, which is a quality control review of our firm by an
independent CPA firm. We have just completed a current Peer Review in August of this year. We
fully expect the results to be unqualified, as in the past, and we will forward the report to you as
soon it is issued.
Lace
r!ghard
LLP
CERTIFIED PUBLIC ACCOUNTANTS
Ms. Marcie Medina, Finance Director
City of Azusa
Audit Proposal
January 31, 2002
Page 3
Should you or any other representative of the City of Azusa have additional
questions regarding this proposal, please do not hesitate to contact us at (714) 672-0022.
Very truly yours,
l..o'
RICHARD K. KIKUCHI, CPA
PARTNER