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Home My WebLink About04/04/2011, C3 - REQUEST FOR PROPOSALS FOR AUDIT SERVICES Maenq�.e councit 4-5-11 agenba REpoRt CITY OF SAN LUIS OBISPO FROM: Mary Bradley, Interim Director of Finance & Information Technology Debbie Malicoat, Finance Manager SUBJECT: REQUEST FOR PROPOSALS FOR AUDIT SERVICES RECOMMENDATION Authorize issuing a request for proposals for audit services. DISCUSSION Section 810 of the City Charter requires an annual audit of the City's financial statement by an independent certified public accountant. In 2005, the Council entered into a multi-year contract for auditing services with Glenn, Burdette, Phillips & Bryson, Certified Public Accountants (GBPB), which was extended for an additional three years in 2008. While their services have been outstanding, the contract extension has expired. As such, staff is recommending issuing a formal request for proposals (RFP) so the City can be assured of receiving quality professional services at the best competitive price. Key elements of the workscope and selection process include: Scope of Services. Audit work will include: 1. City basic financial statements. 2. Single Audit Act financial and compliance reports. 3. Transportation Development Act(TDA) financial and compliance report. 4. Whale Rock Commission annual financial statements. Although included in the overall scope of services for efficiency purposes, the TDA and Whale Rock reports are separately financed through their own respective funding sources. Contract Term. The RFP provides for a five year term with an option to renew for an additional three years. The Government Finance Officers Association of the United States and Canada (GFOA) has recommended a five year term as a best practice. This helps ensure consistency and minimizes start-up costs for both the City and the auditor. Local Government Expertise. The successful proposer will have demonstrated expertise in performing local government audits in accordance with generally accepted accounting principles and auditing standards as well as guidelines set forth in the Certificate of Excellence in Financial Reporting program of the GFOA. CM Request for'Proposals for Audit Services \ Page 2 Staff Resources. Most California cities and other government agencies end their fiscal year on June 30, which results in all of them requiring audit services at the same time. We will be looking for assurances that the successful firm has the trained resources available to service the City during this busy period. Prospective Proposers. A Notice of Interest to propose on audit services has been sent electronically to all firms with offices in California that have expressed an interest over the past several years in submitting a proposal for audit services (Attachment 1). An RFP will be transmitted electronically to all interested responders. In addition, a notice requesting proposals will be published in The Tribune and posted on the City's website. Any additional firms with interest in proposing will be e-mailed the RFP. Review Process. All proposals will be received electronically via e-mail and reviewed and rated by a special Review Committee composed of the Director of Finance & IT, the Principal Administrative Analyst, the Transit Manager, the Utilities Senior Administrative Analyst, the Finance Manager,Accounting Supervisor and Customer Services Supervisor. The proposals will be rated based on experience and expertise, approach to completing the work, their understanding of the workscope and proposed compensation. In short, contract award will not be based solely on price,but on a combination of factors in determining the best overall proposal. Contract Award by the Council. The Council typically delegates award of consultant contracts to the City Manager if the cost is within the budget. In the case of audit services, however, it is important that the Council award the contract as, in accordance with generally accepted accounting principles, the independent auditors' report, which encompasses staffs management of the City's financial operations, is made directly to the Council. As such, the auditors' selection and contractual relationship should be made directly by the governing body. Schedule. The following summarizes the proposed selection process schedule: Task Date Issue Notice of Interest in proposing audit services 3-25-11 Issue RFP for audit services 4-6-11 Complete proposal evaluation 5-13-11 Conduct finalist interviews,if required 5-20-11 Recommend contract award to the Council 6-21-11 FISCAL IMPACT Similar auditservices for 2009-10 totaled approximately$60,600 as follows: City Financial Statements(including Single Audit Act report) 50,900 TDA Financial and Compliance Audit 5,400 Whale Rock Commission 4,300 Total $ 60,600 It is expected that costs for audit services for 2010-11 will be similar to these amounts. C3-2 I Request for Proposals for Audit Services Page 3 ALTERNATIVES Renegotiate the Existing Contract with GBPB. Although the City has been satisfied with the services provided by its current auditor, staff does not recommend this alternative at this time. It is prudent for the City to periodically seek formal audit proposals in order to ensure competitive pricing and services. However, as noted above, GBPB has provided outstanding services to the City, and staff plans to invite them to submit a proposal as part of the selection process ATTACHMENT Proposers List ON FILE IN THE COUNCIL OFFICE Request for Proposals for Audit Services G:\Finance Division\Accounting\Audit Folders\Auditing Services RFP,2011\Council Agenda Report,Auditing Services RFP.doc 0-3 ATTACHMENT PROPOSERS LIST AUDITING SERVICES—SPECIFICATION NO.91067 Steve L. Larson Richard Green, Partner Caporicci & Larson Macias,Gini&O'Connell,LLP 5 Park Plaza, Suite 700 3000 S Street, Suite 300 Irvine,CA 92614 Sacramento, Ca 95816 (949)653-9400 office (916) 928-4600 (949) 833-3582 fax (916)928-2577 fax slarson `pa.com r rg eeen(a,mRocpa.com Nitin P. Patel,CPA Mayer Hoffman McCann P.C. Diehl, Evans& Company, LLP Benjamin P Reyes,CPA 5 Corporate Parke, Suite 100 5060 California Ave, Ste 800 Irvine, Ca 92606-5165 Bakersfield,Ca 93309 (949)399-0600 (661)325-7500 (949)399-0610 fax (661)325-7004 fax NitinpAdiehlevans.com breves ,cbiz.com Glenn, Burdett,Phillips&Bryson Maze&Associates Kathi Niffenegger,CPA Scott.Maze 1150 Palm St 3478 Buskirk Ave, Suite 215 San Luis Obispo,Ca 93401 Pleasant Hill,CA 94523 (805)544-1441 x526 (925)930-0902 (805) 544-4351 fax (925)930-0135 fax KN(a)GBPB.com scottm(a,mazeassociates.com Rogers, Anderson,Malody& Scott LLP Moss, Levy& Hartzheim Terry P. Shea,CPA Paul Niedermuller,CPA 290 North"D"Street, Suite 300 802 E. Main Street San Bernardino, CA 92401 Santa Maria,CA 93454 (805)925-2579 x105 (805)925.2147 fax pniedermuller(&ml hcnas.com Vavrinek,Trine, Day&Co Ron White, CPA 8270 Aspen Street Rancho Cucamonga, Ca 91730 (909)466-4410 (909)466-4431 fax rwhite(a,vtdcpa.com r NOTE: Not to be included with Proposer's Package when mailed or handed out. This should be included and referenced as an attachment to the Council Agenda Report or City Manager Report C3-4