HomeMy WebLinkAbout1P1DATE: Subject: From: SUMMARY CITY COUNCIL STAFF REPORT MARCH 25, 2021 CONSENT CALENDAR DISCUSSION ON ESTABLISHING A POLICY FOR DURATION OF THE TERM FOR THE CITY AUDITING FIRM Jeffery Ballinger, City Attorney At the March 11, 2021 meeting, the City Council requested a resolution adopting a policy for the duration of the term for a City auditing firm to be three to five years, with City Council approving to extend any auditing contract for greater than five years. RECOMMENDATION: Adopt the Resolution establishing the policy for the duration of the term for a City Auditing Firm. (Attachment 1) BACKGROUND: At the March 11, 2021 City Council meeting, the City Council expressed the importance of regular rotation of the City auditing firm. The regular rotation of the City auditing firm helps ensure audit quality. Government Code Section 12410.6, while not presently applicable to Charter Cities, requires employing "the lead audit partner or coordinating audit partner having primary responsibility for the audit, or the audit partner responsible for reviewing the audit" for no more than six consecutive fiscal years. The City Council expressed the term of the auditing firm should be three to five years, with City Council approving to extend any auditing contract greater than five years. ITEMNO. ____ \ p __
2City Council Staff Report March 25, 2021 -Page 2 Policy for Duration of the Term for the City Auditing Firm ENVIRONMENTAL IMPACT: The requested City Council action is not a "Project" as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a "Project" means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. According to Section 15378(b), a Project does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment. FISCAL IMPACT: The adoption of this policy is not expected to have a financial impact on the City. SUBMITTED: City Attorney ATTACHMENTS: 1. Resolution adopting a policy for the duration of the term for a City Auditing Firm
3ATTACHMENT 1
4RESOLUTION NO. --A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ADOPTING A POLICY FOR THE DURATION OF THE TERM FOR A CITY AUDITING FIRM WHEREAS, The City Council recognizes the importance of the rotation of the City auditing firm on a regular basis to ensure audit quality; and WHEREAS, Government Code Section 12410.6, while not presently applicable to Charter Cities, provides that a city cannot employ a public accounting firm to provide audit services if the lead audit partner or coordinating audit partner having primary responsibility for the audit, or the audit partner responsible for reviewing the audit, has performed audit services for that city for six consecutive fiscal years; and WHEREAS, the City Council now wishes to adopt this Resolution, adopting a policy. THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, HEREBY RESOLVES, DETERMINES AND APPROVES AS FOLLOWS: Section 1. Factual Findings. The true and correct recitals above are incorporated by this reference herein as the basis and foundation for the City's adoption of this Resolution. Section 2. City Auditing Firm Term Cap. The City Council hereby establishes the policy that the terms of agreement for any auditing firm providing audit services should generally be three to five years. City Council action shall be required to extend the term of an auditing firm providing audit services to the City for more than five years. Section 3. Severability. Should any individual component of this Resolution be adjudicated to be invalid and unenforceable, the remaining provisions shall be and continue to be fully effective. Section 4. Effective Date. This Resolution will become effective immediately upon adoption and remain effective unless superseded by a subsequent resolution. Section 5. CEQA. Adoption of this Resolution is not considered a "Project" as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a "Project" means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. Adoption of this Resolution establishing a term limit for the City Auditor, it can be seen with certainty, will not have any potential for resulting in either a direct physical change in the in the environment, or a reasonably foreseeable indirect physical change in the environment. Therefore, it is considered
5Resolution No. __ Page2 exempt from CEQA pursuant to Section 15378(b), in that a "Project" does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment. PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY COUNCIL THIS DAY OF _____ 2021. DAVID H. READY, CITY MANAGER ATTEST: ANTHONY J. MEJIA, MMC, CITY CLERK CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, ANTHONY J. MEJIA, MMC, City Clerk of the City of Palm Springs, hereby certify that Resolution No. __ is a full, true and correct copy as was duly adopted at a regular meeting of the City Council of the City of Palm Springs on ____ _ 2021, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ANTHONY J. MEJIA, MMC, CITY CLERK