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Anaheim, CA 92805
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CITY COUNCIL AGENDA REPORT
City of Anaheim
FINANCE DEPARTMENT
DATE: MAY 12, 2026
FROM: FINANCE DEPARTMENT
SUBJECT: APPROVAL OF AMENDMENT NO. 1 TO AN AGREEMENT
WITH KPMG, LLP FOR FINANCIAL AUDIT SERVICES
ATTACHMENT (Y/N): YES ITEM # 13
GOVERNMENT CODE § 84308 APPLIES: NO
RECOMMENDATION:
That the City Council, by Motion, approve and authorize the Finance Director/City Treasurer to execute Amendment No. 1 to an Agreement, with KPMG, LLP to perform the annual financial audit of the City for the fiscal years ending June 30, 2026, 2027 and 2028, in the not-to-exceed amount of $797,700, $820,000, and $850,000, respectively, with two (2) one-year renewal options in the not-to-exceed amount of $875,000 and $900,000, respectively, for a cumulative amount of $4,242,700, and authorize de minimis changes that do not substantially change the terms and conditions of the agreement, so long as such changes are determined to be de minimis by the City Attorney’s Office.
DISCUSSION:
Section 1219 of the Anaheim City Charter requires that the City Council employ the services of an independent Certified Public Accounting firm each year to perform an audit of the City’s financial records.
With the recent retirement of the City’s Controller with 35 years of institutional knowledge, it is recommended that the City retain the current auditors to ensure the City maintains its high standards in financial reporting. The recommendation was presented to the City’s Audit Committee on April 20, 2026, and unanimously approved.
KPMG, LLP has performed the City’s audit for over twenty years and has satisfactorily met all requirements and produced complete reports. The firm has provided timely professional guidance to the City’s financial accounting staff during the implementation of various major Governmental Accounting Standard Board (GASB) pronouncements.
During this time frame, KPMG, LLP has routinely performed rotations of the Engagement Partner, Concurring Partner, Senior Audit Manager, and the Audit Team Lead.
Additionally, KPMG, LLP is the only remaining “Big 4” accounting firm that continues to conduct government audits with the depth of expertise and capacity necessary to support a city of Anaheim’s size.
The Agreement with KPMG, LLP will provide for the payment of standard hourly rates for work actually performed, and is not to exceed $797,700, $820,000, and $850,000 for Approval of Amendment No.1 to an Agreement with KPMG, LLP for Financial Audit Services May 12, 2026
the fiscal years ending June 30, 2026, 2027, and 2028, respectively. These prices reflect no increase for the current year and only modest increases averaging no more than 3.66% annually.
Additionally, the Agreement allows the City to exercise two (2) one-year renewal options.
KPMG was selected after a 2020 Request for Proposal in which a multi-departmental selection committee evaluated firms based on the following criteria:
Thoroughness of Audit Approach
Qualification of Firm for Complex Full Service Municipal Auditing Qualifications of Assigned Individuals
Overall fees
Adequacy of Staffing Plan
Commitment to Timeliness of Audit
Quality of Audit Work
Based on the combined results of the evaluations and subsequent interviews with the top three firms, KPMG, LLP was recommended and ultimately awarded the contract. Their performance continues to meet all expectations and requirements.
IMPACT ON BUDGET:
The costs associated with the annual audit are billed to various City funds and departments based upon the actual work performed. Sufficient funds are available in the current fiscal year budget.
Respectfully submitted,
Deborah A. Moreno
Finance Director/City Treasurer
Attachments:
1. Amendment No. 1 to Audit Services Agreement
2. Original Agreement