CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
3/13/2023
1 SUBJECT:
Contract with Maze and Associates for Auditing Services RECOMMENDED ACTION:
Adopt the attached resolution to authorize the City Manager to renew a contract with Maze and Associates Accountancy Corporation to provide financial audit services for the fiscal year ended June 30, 2023 through June 30, 2025, with an option to extend the agreement for an additional two years through the fiscal year ended June 30, 2027.
STAFF CONTACT:
Yulia Carter, Assistant City Manager
(650) 738-7402
[email protected] <mailto:[email protected]>
BACKGROUND/DISCUSSION:
The City is required to contract with an independent auditor to review the City's financials and reporting. In 2015 the City conducted an RFP process and entered into a contract with Maze & Associates for Auditing services.
Maze and Associates is a licensed California Certified Public Accounting Firm based in Pleasant Hill, CA. The firm has focused its practice on municipalities since its inception in 1986. The firm is reputed to be one of the industry's leaders in the San Francisco Bay Area and is an expert in municipal finances and Governmental Accounting Standards Board (GASB) requirements with nearly one hundred municipal clients.
The firm will provide the following reports on an annual basis for the City of Pacifica:
• Audit of the financial statements and assist in the preparation of the Annual Comprehensive Financial Report.
• Management Letter (Memorandum on Internal Control).
• Testing for compliance with the Single Audit Act and applicable laws and regulations and issuance of reports.
• Testing of compliance for the Transportation Development Act Programs and preparation of required reports.
• Perform procedures and issue agreed-upon procedures reports to comply with GANN (Proposition 111 Appropriation) Limit increment requirements. • Audit of the City of Pacifica Child Development Programs and issuance of a report.
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• Testing of compliance with the Agreement for Distribution of Measure A Funds. • Testing of compliance with the Agreement for Distribution of Measure W Funds. • Other Mandated Reporting includes State Controller's reports of Financial Transactions and Annual Street Reports.
In addition to the annual audit work, Maze & Associates provides deep accounting expertise, internal quality assurance, and a team approach in supporting their clients throughout the year.
This includes ongoing training on new pronouncements issued by GASB or refresher courses on internal control, financial systems, and cyber security, and ongoing assistance with financial compliance and other key elements of effective financial management. With the City hiring the new Deputy Finance Director this year and the new Management Partner from Maze & Associates being assigned to the next year's audit, the City complies with the Government Finance Officers Association (GFOA) to maintain the independence of the audit team.
Therefore, staff recommends extending their services at the current cost adjusted by actual annual CPI capped at 6%. This renewal would allow for greater continuity during the audit process built on effective working relationships between the City staff and the auditors.
ALTERNATIVE ACTION:
The City Council may elect not to extend services outlined in the attached engagement letter beyond the audit work for FY 2022-23 and direct staff to proceed with the RFP process this fiscal year to secure a new audit contract before the end of FY 2023-24.
Staff would recommend against this option as changing an audit firm typically requires a significantly higher effort during the first year, given the number of major special projects planned for the next two years. This includes a new ERP system implementation that spans over two years that would stretch already lean Finance staff resources . The City intends to minimize disruption and delays in the annual audit services and ensure the continuity of services provided by Maze during this critical period.
Also, the professionalism of the firm staff and the rotation of engagement partners in the firm make it possible for the audit to remain independent.
FISCAL IMPACT:
There is no additional current year's fiscal impact associated with this action, as the cost of the audit was included in the FY 2022-23 Adopted Budget. If approved, the next year’s contract cost of $79,220 will be included in the FY 2023-24 Base Budget. The annual cost increase for the subsequent years will be adjusted by the annual CPI increase and included in the base budget as well.
ORIGINATED BY:
Finance Department
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March 13, 2023
ATTACHMENT LIST:
Pacifica FY 2023 to 2027 Fee Proposal (PDF)
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RESOLUTION NO. ________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA AUTHORIZING
THE CITY MANAGER TO EXECUTE A THREE-YEAR CONTRACT WITH A TWO-YEAR
EXTENSION OPTION WITH MAZE AND ASSOCIATES FOR THE AUDIT AND MANDATED
REPORTING OF FINANCIAL SERVICES
WHEREAS, the City executed a Professional Services Agreement with Maze & Associates in 2015 for annual financial audit services and preparation of the Comprehensive Annual Financial Report in compliance with Governmental Accounting Standards; and WHEREAS, the City of Pacifica has continued utilizing services provided by Maze and Associates to date; and
WHEREAS, Maze and Associates is a certified public accounting firm, ranked in the top 100 CPA firms nationwide with an extensive list of Bay Area municipal clients; and WHEREAS, the City intends to minimize disruption and delays in the annual audit services and ensure the continuity of services provided by Maze.
RESOLVED by the City Council of the City of Pacifica, California, that:
The City Council hereby authorizes the City Manager to execute a three-year contract with Maze and Associates for the FY 2022-23 to FY2024-25 audit cycles with a two-year extension option, subject to the annual actual CPI increase capped at 6%. • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on March 13, 2023, by the following vote:
AYES, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
ABSTAIN, Councilmembers:
_________________________
Tygarjas Twyrls Bigstyck, Mayor
ATTEST: APPROVED AS TO FORM:
_________________________ _________________________
Sarah Coffey, City Clerk Michelle Kenyon, City Attorney