Administrative
Report
H.9., File # 22-3744 Meeting Date: 3/15/2022
To: MAYOR AND CITY COUNCIL
From: JENNIFER PAUL, FINANCE DIRECTOR
TITLE
APPROVE A FIFTH AMENDMENT TO THE AGREEMENT WITH LANCE, SOLL AND LUNGHARD, LLP FOR AUDITING SERVICES IN THE AMOUNT OF $68,336 AND EXTENDING THE TERM TO APRIL 30, 2023.
EXECUTIVE SUMMARY
The retirement of the City’s Financial Services Director after 39 years of institutional knowledge and experience has been impactful to the operations of the Financial Services Department. In an effort to assist the new Finance Director by maintaining continuity in auditing services for one full fiscal year of financial reporting, staff is recommending the retention of Lance, Soll and Lunghard, LLP (LSL), the City’s auditing firm, for one (1) additional year. LSL’s proposed fee of $68,336 for the FY 2021-22 audit is consistent with the fees the firm has charged the City during the last two years of the agreement.
The City’s Statements of Financial Principles requires the City to bid for auditing services every five years. The previous RFP was issued in 2017. The Financial Services Department will issue an RFP for auditing services following completion of the FY 2021-22 audit in December 2022 to maintain compliance with the five-year policy.
BACKGROUND
Section 11(d) of the City's Statements of Financial Principles requires the City to retain the services of an independent auditor to perform annual financial audits of its financial statements in compliance with all GASB pronouncements and in accordance with generally accepted auditing standards and the provisions of the U.S. Office of Management and Budget (0MB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.
On January 19, 2017 Financial Services staff issued an RFP and solicited qualified auditing firms through the California Society of Municipal Finance Officers (CSMFO) and DemandStar websites.
The City received a total of eight proposals by the RFP deadline on February 16, 2017.
Financial Services Department staff reviewed the eight proposals and selected the three most well qualified firms to participate as finalists in the City's oral interview process.
Each firm was evaluated based on the criteria established in the RFP, highlighted below:
H.9., File # 22-3744 Meeting Date: 3/15/2022
• Independent and licensed to practice in California
• No conflict of interest
• External quality control review report
• Expertise and experience
• Audit approach
• Price
On February 28, 2017, an interview panel consisting of the City's Audit Committee, the Chairman of the Budget and Finance Commission and Financial Services Department Staff conducted interviews of the three finalists. At the conclusion of the interviews, the Audit Committee determined that Lance, Soll & Lunghard, LLP (LSL) was the most qualified firm that best met the evaluation criteria in the RFP. The Audit Committee, by unanimous vote, recommended that the City Council award an agreement for independent audit services to LSL.
LSL is a public accounting firm located in Brea, which has been providing services since 1929 and has demonstrated extensive experience with city government audits. LSL is currently auditing nearly 60 government entities (cities, districts, and authorities) throughout California.
COORDINATION
The City Attorney’s Office has reviewed and approved the amendment as to form.
FISCAL IMPACT
The cost of auditing services is available in the Financial Services operating budget.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
Lance, Soll and Lunghard, LLP - Fifth Amendment
Lance, Soll and Lunghard, LLP - Signature
Lance, Soll and Lunghard, LLP - Agreement and Amendments Lance, Soll and Lunghard, LLP - Insurance