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Home My WebLink About7/21/1999 - STAFF REPORTS (19) DATE: July 21, 1999 TO: City Council FROM: Director of Finance&Treasurer EXERCISE OF OPTION FOR CONRAD & ASSOCIATES,L.L.P.,INDEPENDENT AUDITORS RECOMMENDATION: It is recommended that the City Council approve an option for two additional years for the City's financial audit services from Conrad & Associates, L.L.P. BACKGROUND: The Council awarded the contract for the City's Financial Audit to Conrad& Associates,LLP (Conrad)on July 3, 1996, for a three year period plus a two year option(see Minute Order No. 5769). In February, 1999, Conrad submitted a proposal to provide audit services for the next two years for$51,000 per year, an increase of about 3% over the cost for the Fiscal Year 1998 audit. The proposal was reviewed by the Director of Finance, the Director of Office of Management& i Budget, and the City Manager and was found acceptable. In addition, the City was in the process i of changing the computer software for the entire financial system and in preparing a Request for Proposal for bank services. Both of these would have been complicated by a change in auditors. The option extension was approved in order to commence this year's audit work. Council's concurrence was subsequently noted and is requested. The attached Minute Order would validate the extension of the contract to cover the audits for ' this year and next. A Request for Proposal for audit services to cover Fiscal Year 2000-01 will be sent out late next year. The Fiscal Year 1999-00 budget already contains funds for audit services, and no additional appropriations are needed. Parkins Thomas M. Ka narr City Manager Director of Finance&Treasurer Attachments: Copy of Minute Order No. 5769 ' f9 k� Conrad & Associates Proposal AH*RO"VEL Minute Order i DE.,;LIVED I7A M4216 , EXHIBIT D SCHEDULE OF PERFORMANCE The Contractor shall have drafts of the final reports and recommendations to management available for review by the Finance Director by the following dates: City of Palm Springs November 18 Public Facilities Corporation September 30 Public Financing Authority November 30 Redevelopment Agency November 18 A-133 Single Audit December 16 Entrance Conferences.Progress Reporting and Exit Conferences An entrance conference shall be scheduled prior to beginning interim field work. . Progress reports are to be submitted on at least a monthly basis to the Finance Director. An exit conference to summarize the results of field work and to review significant findings shall be held on the last day of field work or within one week thereafter. Final Reports The Finance Department shall complete their review of the draft report as expeditiously as possible. This process is not expected to exceed one week During that period, the contractor shall be available for any meetings that may be necessary to discuss the drafts. Once all issues for discussion are resolved, the final signed report shall be delivered to the Finance Director within ten working days but no later than the following dates: Redevelopment Agency December 2 City of Palm Springs December 2 Public Facilities Corporation October 15 Public Financing Authority October 15 A-133 Single Audit December 31 EXHIBIT C SCHEDULE OF COMPENSATION Maximum Fees (Including Out of Pocket Expenses) For Audits of Fiscal Year Ending June 30 1999 2000 City of Palm Springs funds and account groups (including review letter on Gann spending limit, management letter and preparation and word processing of CAFR) $27,000 27,500 Financial and compliance audit of the Palm Springs Redevelopment Agency 8,000 8,500 Financial audit of the Palm Springs Financing Authority (including preparation of State Controller's Report) 10,000 10,800 Financial audit of the Palm Springs Public Facilities Corporation, including preparation of State Controller's Report and nonprofit corporation income tax returns Forms 990 and 199 2,000 - Single audit examination of federal grants(includes general compliance, CDBG grants and other minor federal grants; excludes FAA grants or other special reports to FAA) 4,000 4,200 Total $51,000 51.000 The foregoing amounts also contemplate that City staff will provide maximum cooperation and assistance in schedule preparation and assistance with confirmations. Our fees contemplate that City staff will provide the auditors with trial balances and supporting schedules of asset and liability balances with substantially all year end entries recorded by City staff. A summary of estimated hours by classification is as follows: Classification Hours Percentage Partner 50 5% Manager 150 14% Senior Auditor 450 43% Staff Auditor 400 38% 1.050 1 % • Payment Schedule. AUDITORS shall submit a monthly billing based on the percentage of audit work completed. After approval of CITY'S Director of Finance, said invoice shall be paid within 30 days, less a 100/6 retention, which shall be held until the completion and delivery of all final reports and schedules. /�i43 MINUTE ORDER N0. 5769 17AY AWARDING CONTRACT TO CONRAD & ASSOCIATES TO PERFORM THE C1TY'S JUNE 30,1996, JUNE 30, 1997, AND JUNE 30, 1998 FINANCIAL AUDIT INCLUDING COWIDLATION AND PREPARATION OF THE COMPREHENSIVE ANNUAL FINANCIAL REPORT AT A MAXIMUM PEE OF $47,500, $48,5W, AND $49,500, RESPECTIVELY, WITH AN OPTION TO PROVIDE THE SAME SERVICES FOR TWO (2)ADDITIONAL YEARS,SUBJECT TO THE ANNUAL REVIEW AND RECOMMENDATION OF THE DIRECTOR OF FINANCE, THE SATISFACTORY NEGOTIATION OF TERMS (INCLUDING A PRICE ACCEPTABLE TO BOTH THE CITY OF PALM SPRINGS AND CONRAD), THE APPROVAL OF THE PALM SPRINGS CITY COUNCIL AND THE ANNUAL AVAILABILITY OF AN APPROPRIATION. 1 HEREBY CERTIFY that this Minute Order,awarding contract to Conrad&Associates to perform the City's June 30, 1996,June 30, 1997, and June 30, 1998 Financial Audit including compilation and preparation of the Comprehensive Annual Financial Report at a maximum fee of $47,500, $48,5W, and $49,500, respectively, with an option to provide the same services for two (2)additional years, subject to the annual review and recommendation of the Director of Finance, the satisfactory negotiation of terms (including a price acceptable to both the City of Palm Springs and Conrad), the approval of the Palm Springs City Council and the annual availability of an appropriation, was adopted by the City Council of the City of Palm Springs, California in a meeting thereof held on the 3rd day of July, 1996. �/JUDITH SUMICH City Clerk MINUTE ORDER NO.__6 �—O APPROVING THE OPTION FOR THE EXTENSION OF THE CONTRACT FOR CONRAD & ASSOCIATES LLP FOR TWO YEARS FOR AUDIT SERVICES TO COVER THE FINANCIAL AUDITS OF FISCAL YEARS 1998-99 AND-. 1999-00. I hereby certify that this Mnute Order approving the option for the extension of the contract for Conrad& Associates LLP for two years for audit services to cover the financial audits of fiscal years 1998-99 and 1999-00 at$51,000 per year was adopted by the City Council of the City of Palm Springs, California, in a meeting thereof held on the 21"day of July, 1999. Patricia Sanders Acting City Clerk 1 07S Conrad 8 Associates Auditing Services - 2 yrs AGREEMENT #3676 CONe T l CERTII M06455, 7-21-99 related 1 1 �L�L SOCIATES, L.L.P. 1100 MAIN STREET,SUITE C •ft"I sHn ixc�uaxa�aorns� eo�roe�noHs IRVINE,CAUFORNIA 92614 (949)474-2020 Fax(949)263•SS20 February 11, 1999 Honorable Mayor and City Council City of Palm Springs c%Thomas M.Kanarr P.O.Box 2743 Palm Springs,California 92263-2743 Dear Mayor and Members of the City Council: Conrad & Associates, L.L.P. is desirous of an ongoing relationship in serving as independent auditors for the City of Palm Springs. Our firm was selected as independent auditors by the City Council through a competitive bid process for an initial three years beginning with the fiscal year ended June 30, 1996 with an option for two additional years subject to City Council approval. We have served the City Council well these past three years and are requesting that the two year option for fiscal years ending June 30, 1999 and June 30,2000 be extended to our firm. During the past three years,we have worked with City finance staff to produce a Comprehensive Annual Financial Report which has received the Certificate of Award for Outstanding Financial Reporting from the California Society of Municipal Finance Officers (CSMFO) and the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association (GFOA). Each year we have provided the City Council with constructive comments relating to improvements in internal controls and have also responded to special requests of the staff and Council for support regarding workers' compensation claims issues and special close out audits of Federal Aviation Administration (FAA) audits granted to the Palm Springs Airport. It has been our policy to provide continuity of staffing from our professional staff which is in the best interests of City staff and our firm due to the complexity of certain areas of the audit of the City of Palm Springs and related entities. We plan to provide continuity for the 1999 audit. In addition to Michael A. Harrison, C.P.A. serving as Engagement Partner, Ms. Wendy Goetsch, C.P.A. will serve as Engagement Manager and Mrs. Kim Forest, C.P.A. will serve as Senior Field Auditor. We have included a new Exhibit C to the Contract for Audit Services dated July 3, 1996 which sets forth the Schedule for Compensation for the various audit tasks performed for the City and related entities. The Compensation Schedule reflects a slight increase in the overall fee due to the number of new debt issues in the Financing Authority. We are also contemplating that the Palm Springs Public Facilities Corp. can be collapsed and activity transferred to the Financing Authority for the 1989 Wastewater Treatment Plant Refunding Certificates during fiscal year 1999 which would alleviate the need for a separate component unit report and other tax and State Controller filings in the year 2000. MEMBERS OF ACKAND CALIFORNIA SOCIETY OF CEMIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSnTUrE OF CERMED PUBLIC AccouNIANTS PRNATE COMPANIES PRACTICE SECTION