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HomeMy WebLinkAbout05/20/1997, C-7 - EXTEND AUDIT CONTRACT WITH GLENN, BURDETTE, PHILLIPS, & BRYSON council j agenoa Rpm 4emN�e - CITY O F SAN LUIS O B I S P O FROM: Bill Statler,Director of Finance Prepared By: Carolyn Dominguez,Accounting ManagerCp SUBJECT: EXTEND AUDIT CONTRACT WITH GLENN,BURDETTE,PHILLIPS, & BRYSON CAO RECOMMENDATION Approve a three-year extension on current contract for auditing services with Glenn, Burdette, Phillips, and Bryson(GBPB), and authorize the Mayor to execute the contract DISCUSSION In April 1994 the Council awarded a three-year contract to Glenn,Burdette,Phillips, and Bryson for audit services. The terms of the contract allowed for a three-year extension upon mutual agreement by both parties. We have been pleased with the high quality of professional services provided by our current auditors and asked them to provide a fee proposal for an additional three years. FISCAL EVIPACT Audit service fees proposed for 1996-97 through 1998-99 are as follows: Actual Proposed Proposed Proposed 1995-96 1996-97 1997-98 1998-99 General Fund City general purpose financial statement $25,960 $26,600 $27,300 $28,000 Single Audit Act financial and compliance report 13,965 14,300 14,700 15,100 Transportation Development Act(TDA) financial and compliance report 3,895 4,000 4,100 42200 Whale Rock Commission annual financial 2,940 3,300 3,400 3,500 statements Central Coast Cities Self Insurance Fund annual financial statements 12,440 12,800 13,100 13,500 Total $599200 $611,000 $629600 $6400 The proposed fees represent less than a 3%increase each year.Adequate funding has been included in the Preliminary 1997-99 Financial Plan. Council Agenda Report-Extend Audit Services Contract Page 2 ALTERNATIVES Do not authorize extending the contract. Staff could be directed to issue a Request for Proposal (RFP) for auditing services. This alternative is not recommended. The City has not experienced any significant changes in its financial reporting requirements, nor has there been a substantial change in the economic condition that would lead us to believe the process would result in any different results than when the current auditing services contract was first awarded just three years ago. In summary, we are satisfield with the quality of service provided by GBPB, and they have proposed very competitive fees. ATTACHMENTS ■ Agreement for Auditing Services ■ Exhibit A-Proposal for Services from GBPB C'- `7 2 AGREEMENT THIS AGREEMENT is made and entered into in the City of San Luis Obispo on this 20th day of May, 1997,by and between the CITY OF SAN LUIS OBISPO,a municipal corporation,hereinafter referred to as City, and GLENN,BURDETTE,PHILLIPS&BRYSON,hereinafter referred to as Contractor. WITNESSETH: WHEREAS,on April 19, 1994, the City awarded a three year contract for auditing services per Specification No.93-68.Expiring upon the completion of the audit for the fiscal year ended June 30, 1996 WHEREAS,pursuant to said contract,a three-year extension could be granted upon the mutual agreement of both patties. NOW THEREFORE, in consideration of their mutual promises, obligations, and covenants hereinafter contained,the parties hereto agree as follows: 1. TERM. The team of this Agreement shall be from the date of this Agreement is made and entered, as first written above,until acceptance or completion of the annual audit for the fiscal year ended June 30, 1999 2. INCORPORATION BY REFERENCE. City Specification No. 93-68 and Contractor's proposal dated February 27, 1997,are hereby incorporated in and[Wade a part of this Agreement. 3. C1TY'S OBLIGATIONS. For providing auditing services as specified in this Agreement,City will pay and Contractor shall receive the amounts provided in Exhibit A attached hereto and incorporated into this Agreement. 4. CONTRACTOR'S OBLIGATIONS. For and in consideration of the payments and agreements herein before mentioned to be made and performed by City,Contractor agrees with City to do everything required by this Agreement and the said specification 5. AMENDMENTS. Any amendment, modification, or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the City Administrative Officer of the City. 6. COMPLETE AGREEMENT. This written Agreement, including all writings specifically incorporated herein by reference, shall constitute the complete agreement between the parties hereto. No oral agreement,understanding,or representation not reduced to writing and specifically incorporated herein shall be of any force or effect,nor shall any such oral agreement,understanding,or representation be binding upon the parties hereto. L _7-3 7. NOTICE. All written notices to the patties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows: City City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo,CA 93401 Contractor Glenn,Burdette,Phillips&Bryson 1150 Palm Street San Luis Obispo,CA 93401 8. AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant that each individual executing this agreement on behalf of each parry is a person duly authorized and empowered to execute Agreements for such party. IN WITNESS WHEREOF,the parties hereto have caused this instrument to be executed the day and year fust above written. ATTEST: CITY OF SAN LUIS OBISPO, A Municipal Corporation By: City Clerk Mayor APPROVED AS TO FORM: CONTRACTOR � By: yceitltl Members of t. m Of counsel David W.Phillips,CPA Fred L Glenn,CPA GB David A.Bryson.CPA Stephen A.Burdette.CPA Attachments L Gary A.Wintermeyer,CPA Managers: GLENN,BURDETTE,PHIWPS PBRYSON Bradford M.Hair.CPA Michael T.Glaudel.CPA Jeanne A Potter,CPA Marianne Heinen,CPA C AED PUBLIC ACCOUNTANTS Daniel J.O'Hare,CPA Linda J.Hamilton.CPA A PROFESSIONAL CORPORATION Kothi Mffenegger.CPA Heien G liunbon-C�CPA Fred W.Bogart,CPA Catherine L McKenna.CPA �fouccLd in 1965 February 27, 1997 J Bill Statler City of San Luis Obispo 990 Palm Street San Luis Obispo,California 93401-3249 Dear Bill: Thank you for your invitation to submit a proposal to extend our audit contract for an additional three years. Attached is our proposal to perform auditing services for the City of San Luis Obispo for the years ended June 30, 1997, 1998 and 1999. We will perform the following services: We will perform the audits in accordance with generally accepted auditing standards as set forth by the American utitute of Certified Public Accountants(AICPA),the standards for financial audits set forth in the US General _,ccounting Office's Government Auditing Standards, 1994 Revision,issued by the Comptroller General of the United States,the provisions of the Single Audit Act of 1984 and the provisions of US Office of Management and Budget (OMB)Circular A-128,Audits of State and Local Governments,and the applicable laws,rules and regulations of the Transportation Development Act. We will issue a report on the fair presentation of the City's general purpose financial statements in conformity with generally accepted accounting principles. We will also provide an"in-relation-to"report on the combining and individual fund financial statements and supporting schedules based on the auditing procedures applied during the audit of the general purpose financial statements. We will not audit the statistical section of the comprehensive annual financial report(CAFR). We will be responsible for performing certain limited procedures involving supplementary information required by the Governmental Accounting Standards Board as mandated by generally accepted auditing standards. We will issue an agreed-upon-procedures report for the Gann limitation verification. We will provide an"in-relation-to"report on the schedule of federal financial assistance based on the auditing procedures applied during the audit of the general purpose financial statements. As required by the Single Audit Act and OMB Circular A-128,we will also provide the following reports: a report on the internal control structure based on our understanding of the internal control structure and assessment of control risk during an audit of the general purpose financial statements,a report on compliance with applicable laws and regulations based on an audit of the general purpose financial statements,a report on the internal control structure used in administering federal financial assistance programs,a report on compliance with specific requirements applicable to major federal financial assistance programs,a report on compliance with specific requirements applicable to nonmajor federal financial assistance program transactions,and a report on compliance with the general requirements applicable to federal uncial assistance program& f rrW=di VpraWsa Vctyslo96 1150 Palm Street-San Luis Obispo,California 93401 -(805)544-1441 - 53010th Street- Paso Robles,California 93446 -(805)237-3995 FAX(805)5444351 - E-Mail:gbpb@thegrid.net (!,7-6' Bill Statler City of San Luis Obispo February 27, 1997 Page 2 In the required reports on internal controls,we will communicate any matters considered to be reportable conditions under standards established by the AICPA. Reportable conditions that are also material weaknesses will be identified as such in the report. Other matters involving the internal control structure that are not reportable conditions nor .material weaknesses will be reported in a separate letter to management which will be referred to in the required reports on internal controls. Reports on compliance will include all instances of noncompliance. We acknowledge the requirement to make an immediate,written report of all irregularities and illegal acts or indications of illegal acts of which we become aware to the City Administrative Officer,the Director of Finance and the City Attorney. We will assure ourselves that the City is informed of each of the following: the auditors'responsibility under generally accepted auditing standards,significant accounting policies,management judgments and accounting estimates,significant accounting audit adjustments,other information in documents containing audited financial statements,disagreements with management,management consultation with other accountants,major issues discussed with management prior to retention and difficulties encountered in performing the audit. We will audit the City's Transit Fund and Transportation Development Act Fund and provide a report on the fair presentation of each fimd's financial statements in conformity with generally accepted accounting principles. Additionally,we will provide a report on each of the fund's compliance with the applicable laws,rules and regulations of the Transportation Development Act and the allocation instructions of the San Luis Obispo Council of Governments. We will audit the Central Coast Cities Self-Insurance Fund,a joint venture,and provide a report on the fair presentation of the find's combined financial statements in conformity with generally accepted accounting principles. We will also provide an"in-relation-to"report on the combining financial statements based on the auditing procedures applied during the audit of the combined financial statements. We will audit the Whale Rock Commission,a joint venture,and provide a report on the fair presentation of the Commission's financial statements in conformity with generally accepted accounting principles. We will review the City's compliance with its investment polices and procedures on a quarterly basis and attend a quarterly meeting of the investment oversight committee in order to report the results and make recommendations related to the City's compliance and controls over investments. At the conclusion of our audits,we will provide the following reports to the City of San Luis Obispo: One copy of each report identified above relating to the City's CAFR and Single Audit. We understand that the preparation and printing of the CAFR,including the Single Audit section,will be the responsibility of the City. We will be responsible for reviewing,as well as editing and proofing the final draft. We propose to provide these reports by November 15,each year in order to allow the City to submit for the GFOA and CSMFO award programs. rill Statler ,:ity of San Luis Obispo February 27, 1997 Page 3 One copy of the audit opinion for the Whale Rock Commission. We understand that the preparation and printing of the financial statements will be the responsibility of the City. We will be responsible for reviewing,as well as editing and proofing the final draft.We propose to provide these reports by November 30,each year. Fifteen copi--s of the audit opinion,financial statements and compliance reports of the Transportation Development Act Funds. We understand that we will be responsible for the preparation and printing of the financial statements.We propose to provide these reports by November 30, each year. Twenty-five copies of the audit opinion,financial statements and supplemental schedules of the Central Coast Cities Self-Insurance Fund. We understand that we will be responsible for the preparation and printing of the financial statements.We propose to provide these reports by November 30,each year. Five copies of the agreed-upon procedures report for the Gann appropriations limit calculation.We propose to provide these reports by November 30,each year. One copy of the letter to management on the adequacy of internal controls and recommendations for improvement We have attached a schedule of estimated hours and fees for these services. We have based the fees on our standard hourly rates. As our commitment to you,we have discounted the fees by approximately 13%. We are enclosing a copy of our most recent quality control review report in accordance with Government Auditing Standards. We look forward to the opportunity of serving you. If you are in agreement with the terms of this proposal,we will execute a written contract in the form adopted by the City. If there are any questions,you may contact us at 544- 1441. Sincerely, Kathi Niffenegger,CPA for Glenn,Burdette,Phillips&Bryson Certified Public Accountants A Professional Corporation Attachments C'• � 7 CITY OF SAN LUIS OBISPO PROPOSAL FOR AUDIT SERVICES Year ended Year ended Year ended June 30, 1997 June 30, 1998 June 30, 1999 Financial Statements General purpose financial statements $ 26,600 S 27,300 S 28,000 Central Coast Cities Insurance JPA 12,800 13,100 13,500 Whale Rock Commission 3,300 3,400 3,500 Financial and Compliance Reports Transportation Development Act 4,000 4,100 4,200 Single Audit Act 14,300 14,700 15,100 Total S 61,000 S 62,600 S 64,300 Increase from prior year fees 2.5% 2.6% 2.7% Share- Supervisory Professional Bid holders Managers Staff Staff Other Discount Total Financial Statements General Purpose Financial Statements Estimated Hours 85 0 100 220 25 430 Standard Hourly Rate 130 90 75 55 40 Total Bid 11050 0 7500 12100 1000 (5,050) S 26,600 Central Coast Cities Insurance JPA Estimated Hours 25 0 100 40 25 190 Standard Hourly Rate 130 90 75 55 40 Total Bid 3250 0 7500 2200 1000 (1,150) S 12,800 Whale Rock Commission Estimated Hours 8 0 8 32 8 56 Standard Hourly Rate 130 90 75 55 40 Total Bid 1040 0 600 1760 320 (420) S 3,300 Financial and Compliance Reports Transportation Development Act Estimated Hours 10 0 38 0 15 63 Standard Hourly Rate 130 90 75 55 40 Total Bid 1300 0 2850 0 600 (750) S 4,000 Single Audit Act Estimated Hours 40 0 75 80 20 215 Standard Hourly Rate 130 90 75 55 40 Total Bid 5200 0 5625 4400 800 (1,725) S 14,300 SPOKANE OTHELLO SPOKANE VALLEY QUINCY COLFAX TM-CIIII MOSES LAKE YAKWA OMAK NORTH IDAHO 1EMASTIIt& D4NIIIS Pu c ACCOUNTING To the Shareholders Glenn, Burdette, Phillips &Bryson AND CONSULnNG We have reviewed the system of quality control for the accounting and auditing practice of Glenn, Burdette, Phillips &Bryson (the firm) in effect for the year ended May 31, SERVICES 1996. Our review was conducted in conformity with standards for peer reviews promulgated by the peer review committee of the SEC practice section of the AICPA Division for CPA Funis (the section). We tested compliance with the firm's quality control policies and procedures and with the membership requirements of the section to M OF the extent we considered appropriate. These tests included the application of the firm's Policies and procedures on selected accounting and auditing engagements. TAG In performing our review, we have given consideration to the general characteristics of wTERNAnONAL a system of quality control as described in quality control standards issued by the AICPA. Such a system should be appropriately comprehensive and suitably designed in relation to the firm's organizational structure, its policies, and the nature of its practice. Variance in individual performance can affect the degree of compliance with a firm's pr=nbed quality control policies and procedures. Therefore, adherence to all Policies and procedures in every case may not be possible. As is customary in a peer review, we are issuing a letter under this date that sets forth comments relating to certain policies and procedures or compliance with them. None of these matters were considered to be of sufficient significance to affect the opinion expressed in this report. In our opinion, the system of quality control for the accounting and auditing practice of Glenn, Bmdette, Phillips&Bryson for the year ended May 31, 1996, met the objec- tives of quality control standards established by the AICPA and was being complied with during the year then ended to provide the firm with reasonable assurance of conforming with professional standards. Also, in our ophdon, the firm was in confor- mity with the membership requirements of the section m all material respects. .P Spokane, Washington August 14, 1996