Lance, Sall, & Lunghard LLP is a member of PrimeGlobal, a global association of independent accounting firms. No PrimeGlobal member firm is an agent or partner of the association or of any other member firm.
No PrimeGlobal member firm has the authority to enter into any legal obligations on behalf of the association or any other member firm. If Lance, Soil, & Lunghard LLP introduces you to another PrimeGlobal member firm, Lance, Soll, & Lunghard LLP specifically denies any liability for any work performed by that firm. You should make your own contractual arrangements with that firm for work that they perform. The fact that you may have been introduced to us by another PrimeGlobal member firm does not make that firm, its partners or its employees responsible for any of our acts or omissions. Lance, Soil, & Lunghard LLP is not the agent or partner of PrimeGlobal or any other member firm, and does not have the authority to enter into legal obligations on behalf of either the association or any other member firm thereof. You agree that Lance, Soil, & Lunghard LLP has the sole liability for any work performed under this engagement and you undertake not to make any claim or bring any proceedings against either PrimeGlobal or any other member of PrimeGlobal in relation to work covered by this engagement.
Couemment Auditing Standards require audit organizations to provide a copy of their most recent external peer review report and any subsequent review reports during the period of the contract. Our 2016 peer review accompanies this letter.
Our audit engagement ends on delivery of our audit report. Any follow-up services that might be required will be a separate, new engagement. The terms and conditions of that new engagement will be governed by a new, specific engagement letter for that service.
We appreciate the opportunity to be of service to the City of Redondo Beach and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us.
Very truly yours,
Iie,- 91 ? 004
RESPONSE'
This letter correctly sets forth the understanding of the City of R do Beach Management signature:
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SYSTEM REVIEW REPORT
October 26, 2016
To the Partners of
Lance, Sall & Lunghard, LLP
and the Peer Review Committee of the California Society of CPA' s:
We have reviewed the system of quality control for the accounting and auditing practice of Lance, Soil & Lunghard, LLP ( the Firm) in effect for the year ended May 31, 2016. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants. As a part of our peer review, we considered reviews by regulatory entities, if applicable, in determining the nature and extent of our procedures. The Firm is responsible for designing a system of quality control and complying with it to provide the Firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Our responsibility is to express an opinion on the design of the system of quality control and the firm' s compliance therewith based on our review. The nature, objectives, scope, limitations of, and the procedures performed in a System Review are described in the standards at www.aicpa. org/ prsummary.
As required by the standards, engagements selected for review included engagements performed under Government Auditing Standards and audits of employee benefit plans.
In our opinion, the system of quality control for the accounting and auditing practice of Lance, Soil & Lunghard, LLP in effect for the year ended May 31, 2016 has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficienry(ies/ or fail. Lance, Soil & Lunghard, LLP has received a peer review rating of pass.
EXHIBIT " B"
SCHEDULE FOR COMPLETION
TERM. The term of this Agreement shall commence on April 18, 2017 and expire April 17, 2020, unless otherwise terminated as herein provided. The Mayor is authorized to execute letters of engagement for each fiscal year shown in Exhibit C. This Agreement may be extended for an additional two ( 2) year term at the City' s sole discretion.
14 EXHIBIT " C"
COMPENSATION
Provided Consultant is not in default under this Agreement, Consultant shall be compensated as provided below.
AMOUNT.
For the first three years (Years 1 — 3) of this Agreement, Consultant shall be compensated as follows:
A. Year 1 ( FY 2016-2017): $ 64,415.00
B. Year 2 ( FY 2017-2018): $ 64,415.00
C. Year 3 ( FY 2018-2019): $ 64,415. 00
For the optional two additional years (Years 4 and 5) of this Agreement, Consultant shall be compensated as follows:
D. Year 4 ( FY 2019-2020): $ 66,347.45
E. Year 5 ( FY 2020- 2021): $ 66,347.45
IL METHOD OF PAYMENT. Consultant shall provide invoices to City for approval and payment. Invoices must be itemized, adequately detailed, based on accurate records, and in a form reasonably satisfactory to City. Consultant may be required to provide back- up material upon request.
III. SCHEDULE FOR PAYMENT. City agrees to pay Consultant within thirty ( 30) days of receipt of monthly invoices, provided, services are completed to City's full satisfaction.
IV. CONSULTANT' S ADDRESS FOR NOTICE. Written notices to Consultant shall be given by registered or certified mail, postage prepaid and addressed to or personally served on:
Consultant
Bryan Gruber, CPA, Partner
Lance, Sall & Lunghard, LLP
203 N. Brea Blvd, Suite 203
Brea, CA 92821
15 City
Craig Kohler, Finance Director
City of Redondo Beach
415 Diamond St., Door C
Redondo Beach, CA 90277
EXHIBIT " D"
INSURANCE REQUIREMENTS FOR CONSULTANTS
Without limiting Consultant's indemnification obligations under this Agreement, Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, or employees.
Minimum Scope of Insurance
Coverage shall be at least as broad as:
Insurance Services Office Commercial General Liability coverage ( occurrence form CG 0001).
Insurance Services Office form number CA 0001 ( Ed. 1/ 87) covering Automobile Liability, code 1 ( any auto).
Workers' Compensation insurance as required by the State of California Employer's Liability Insurance.
Minimum Limits of Insurance
Consultant shall maintain limits no less than:
General Liability: $ 1, 000, 000 per occurrence for bodily injury, personal injury and property damage. The general aggregate limit shall apply separately to this project.
Automobile Liability: $ 1, 000,000 per accident for bodily injury and property damage.
Employer's Liability: $ 1, 000, 000 per accident for bodily injury or disease.
Deductibles and Self -Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either: ( 1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers or (2) the Consultant shall provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration and defense expenses.
16 Other Insurance Provisions
The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions:
Additional Insured Endorsement
General Liability: The City, its officers, elected and appointed officials, employees, and volunteers shall be covered as insureds with respect to liability arising out of work performed by or on behalf of the Consultant. General liability coverage can be provided in the form of an endorsement to the Consultant's insurance, or as a separate owner's policy.
Automobile Liability: The City, its officers, elected and appointed officials, employees, and volunteers shall be covered as insureds with respect to liability arising out of automobiles owned, leased, hired or borrowed by or on behalf of the Consultant.
For any claims related to this project, the Consultant's insurance coverage shall be primary insurance as respects the City, its officers, elected and appointed officials, employees, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Consultant' s insurance and shall not contribute with it.
Each insurance policy required by this clause shall be endorsed to state that coverage shall not be canceled by either party, except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the City.
Each insurance policy shall be endorsed to state that the inclusion of more than one insured shall not operate to impair the rights of one insured against another insured, and the coverages afforded shall apply as though separate policies had been issued to each insured.
Each insurance policy shall be in effect prior to awarding the contract and each insurance policy or a successor policy shall be in effect for the duration of the project.
The maintenance of proper insurance coverage is a material element of the contract and failure to maintain or renew coverage or to provide evidence of renewal may be treated by the City as a material breach of contract on the Consultant' s part.
Acceptability of Insurers
Insurance shall be placed with insurers with a current A. M. Best' s rating of no less than A:VII and which are authorized to transact insurance business in the State of California by the Department of Insurance.
17 Verification of Coveraoe
Consultant shall furnish the City with original certificates and amendatory endorsements effecting coverage required by this clause. The endorsements should be on the City authorized forms provided with the contract specifications. Standard ISO forms which shall be subject to City approval and amended to conform to the City' s requirements may be acceptable in lieu of City authorized forms. All certificates and endorsements shall be received and approved by the City before the contract is awarded. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements effecting the coverage required by these specifications at any time.
Subcontractors
Consultant shall include all subcontractors as insured under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein.
Risk Management
Consultant acknowledges that insurance underwriting standards and practices are subject to change, and the City reserves the right to make changes to these provisions in the reasonable discretion of its Risk Manager.
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