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HomeMy WebLinkAboutE-10 Staff Report - Badawi Extension to PSASecond Amendment of Auditing Services Agreement April 4, 2022 Page 1 CONSENT ITEM E-10 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: SERGIO GONZALEZ, CITY MANAGER FROM: TALIKA M. JOHNSON, DIRECTOR OF ADMINISTRATIVE SERVICES DATE: APRIL 4, 2022 SUBJECT: APPROVE SECOND AMENDMENT TO THE AGREEMENT WITH BADAWI & ASSOCIATES CERTIFIED PUBLIC ACCOUNTANTS FOR PROFESSIONAL AUDITING SERVICES BACKGROUND: The City’s contract for professional auditing services has expired. The City has already exercised a 3-year contract from June 6, 2017 to June 30, 2020, with two (2) extended years. Due to Badawi and Associates expertise and familiarity with the City’s Financials, Staff has requested an additional one-year term of services. RECOMMENDATIONS: Staff recommends that the City Council take the following actions: 1)Approve a Second Amendment for a One (1) year extension to the professional services agreement with Badawi & Associates Certified Public Accountants for auditing services; and 2)Authorize the City Manager to execute Second Amendment with Badawi & Associates, in a form acceptable to the City Attorney, on behalf of the City; and 3) Authorize an increase to Badawi & Associates Certified Public Accountants from $59,680 to $61,470 for fiscal year 2021/22 auditing services. ANALYSIS: Badawi & Associates has successfully performed the City’s Annual Financial Audits for several years. As such, staff is requesting that Council waive the bidding procedures in best interest of the City Pursuant to Section 2-539 – Waiving of the Purchasing Procedures. Badawi & Associates, as the City’s Auditor is familiar with the City’s Policies, Procedures and financials and therefore can streamline the audit and reporting process to ensure Staff can meet all deadlines efficiently. Selecting a new firm would significantly increase staff time in order to transfer all APPROVED CITY COUNCIL 4/4/2022 Second Amendment of Auditing Services Agreement April 4, 2022 Page 2 historical information to ensure accurate audits and reports. Therefore, Staff seeks to amend the original Auditing Services Agreement’s scope of services (Exhibit A); and to increase the total compensation (Exhibit A) under the Agreement by $1,790 for fiscal year 2021/22. FISCAL IMPACT: There will be no fiscal impact to the General Fund as sufficient budget is available in FY 21/22 to cover these services. Prepared by: Reviewed and Approved: Talika M. Johnson Sergio Gonzalez Director of Administrative Services City Manager Attachment: 1) Second Amendment to the Professional Services Agreement 45635.01000\31368292. 1 B-1 CITY OF AZUSA SECOND AMENDMENT TO AGREEMENT FOR PROFESSIONAL SERVICES 1.PARTIES AND DATE. This First Amendment to the Agreement for Professional Services (“Second Amendment”) is entered into on the ____ day of ________, 2022, by and between the City of Azusa (hereinafter referred to as the “City”) and Badawi & Associates, Certified Public Accountants (hereinafter referred to as the “Consultant”). City Consultant are sometimes collectively referred to herein as the “Parties.” 2.RECITALS. 2.1 Agreement. The Parties entered into that certain Agreement for Professional Services dated June 6th, 2017 (“Agreement”). 2.2 Second Amendment. The Parties now desire to amend the Agreement in order to renew the Agreement for an additional one-year term and increase the total compensation under the Agreement. 3.TERMS. 3.1 Scope of Services. The Agreement is hereby amended to include the scope of services set forth in Exhibit “A,” attached hereto and incorporated herein by reference. 3.2 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this First Amendment at the rates set forth in Exhibit “A” attached hereto and incorporated herein by reference. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this First Amendment at the rates set forth in Exhibit “A” attached hereto. 3.3 Remaining Provisions of Agreement. Except as otherwise specifically set forth in this Second Amendment, the remaining provisions of the Agreement shall remain in full force and effect. Attachment 1 45635.01000\31368292. 1 B-2 IN WITNESS WHEREOF, the parties have executed this First Amendment to Agreement on this ____ day of __________, 2022. CITY OF AZUSA BADAWI & ASSOCIATES, CPA By: Sergio Gonzales City Manager B y: NAME: . TITLE: . ATTEST: By: Jeffrey Lawrence Cornejo, Jr. City Clerk By: NAME: . TITLE: . APPROVED AS TO FORM: B y: Best Best & Krieger LLP City Attorney ` March 9, 2022 Ms. Talika Johnson Director of Administrative Services City of Azusa 213 E Foothill Boulevard Azusa CA 91702 Dear Ms. Johnson, I would like to take this opportunity to thank you and your staff for the confidence and support you have provided to us over the past several years. I would also like to take this opportunity to present this letter for your consideration regarding extending the Badawi & Associates audit contract with the City of Azusa. Over the past years, we have developed an understanding of the City's operation that has aided us in providing quality audit services. With that knowledge, we've been able to expand our audit efforts and provide observations that, hopefully, have assisted City staff. We have also demonstrated our ability to respond to requests of the City and our ability to deliver a quality product. We trust the City has been satisfied with our efforts. Per your request, we are pleased to present this proposal to provide audit services to the City for the year ending June 30, 2022. The objective of our audit is to issue an opinion regarding the fairness of presentation of the City's financial position for the fiscal year in accordance with generally accepted accounting principles. The audit to be performed will follow generally accepted auditing standards, U.S. General Accounting Office's Government Auditing Standards, Single Audit Act and the Federal Uniform Guidance. Our fees for the year 2022 will be as follows: Service 2022 City of Azusa ACFR 42,117$ Single Audit & Related Reports 5,438 GANN Limit Agreed-upon Procedures 515 Public Financing Authority (APFA)2,863 City's Community Facility Districts (CFDs)6,417 Azusa RMC-JPA 2,575 Public Safety CFD 1,545 Total $ 61,470 EXHIBIT “A” TO FIRST AMENDMENT TO AGREEMENT FOR PROFESSIONAL SERVICES SCOPE OF SERVICES Ms. Talika Johnson Director of Administrative Services City of Azusa The service we will provide will follow the guideline as outline in the original proposal to the City. We would very much like to continue our relationship with the City and stand ready to provide the level of service and commitment for which the City has become accustomed. If you have any questions, please feel free to call me at (510)-768-8244. Sincerely, Ahmed Badawi President Badawi & Associates, CPAs RESPONSE: This letter correctly sets forth the understanding of the City of Azusa. By: Title: Date: