AGREEMENT
FOR PROFESSIONAL SERVICES BETWEEN
THE CITY OF SALINAS AND THE PUN GROUP, LLP
CONTENTS
RECITALS 1
TERMS 1
1. Scope of Services. 1
2. Term; Completion Schedule. 1
3. Compensation. 1
4. Billing. 1
5. Meet & Confer. 2
6. Additional Copies. 2
7. Responsibility of Consultant. 2
8. Responsibility of City. 2
9. Acceptance of Work Not a Release. 3
10. Indemnification and Hold Harmless 3
11. Insurance. 3
12. Access to Records. 3
13. Non-Assignability. 3
14. Changes to Scope of Work. 3
15. Ownership of Documents. 4
16. Termination. 4
17. Compliance with Laws, Rules, and Regulations. 5
18. Exhibits Incorporated. 5
19. Independent Contractor. 5
20. Integration and Entire Agreement. 5
21. Jurisdiction and Venue. 5
22. Severability 5
23. Notices. 6
24. Nondiscrimination. 6
25. Conflict of Interest. 7
26. Headings. 7
27. Attorneys’ Fees 7
28. Non-Exclusive Agreement. 7
29. Rights and Obligations Under Agreement. 7
30. Licenses. 7
31. Counterparts. 7
32. Legal Representation. 7
33. Joint Representation. 8
34. Warranty of Authority. 8
35. No Waiver of Rights. 8
Exhibit A – Insurance Requirements 9
Exhibit B – Scope of Services 12
Exhibit C – Fees 16
AGREEMENT FOR PROFESSIONAL SERVICES BETWEEN
THE CITY OF SALINAS AND THE PUN GROUP, LLP
This Agreement for Professional Services (the “Agreement” and/or “Contract”) is made and entered into this 15th day of June 2022, between the City of Salinas, a California Charter city and municipal corporation (hereinafter “City”), and The Pun Group, LLP, a California limited liability partnership (hereinafter “Consultant”).
RECITALS
WHEREAS, Consultant represents that he, she, or it is specially trained, experienced, and competent to perform the special services which will be required by this Agreement; and WHEREAS, Consultant is willing to render such professional services, as hereinafter defined, on the following terms and conditions.
NOW, THEREFORE, City and Consultant agree as follows:
TERMS
1. Scope of Services. The project contemplated and the scope of Consultant’s services are described in Exhibit B, attached hereto, and incorporated herein by reference.
2. Term; Completion Schedule. This Agreement shall commence on June 15, 2022. The duration of this Agreement is for the period of June 15, 2022 through June 30, 2025, corresponding to audit services provided for fiscal years ending June 30, 2022 to June 30, 2024, unless extended in writing by either party upon (30) days written notice. This Agreement may be extended only upon mutual written consent of the parties upon the same terms and conditions for two (2) additional one (1) year terms and may be terminated only pursuant to the terms of this Agreement.
3. Compensation. City hereby agrees to pay Consultant for services rendered to the City pursuant to this Agreement according to the rates of compensation as set forth in Exhibit C. The total cost for all work described in Exhibit B shall not exceed amounts set forth in Exhibit C. The compensation for Consultant’s work shall not exceed the rates set forth in Exhibit C.
4. Billing. Consultant shall submit to City an itemized invoice, prepared in a form satisfactory to City, describing its services and costs for the period covered by the invoice. Except as specifically authorized by City, Consultant shall not bill City for duplicate services performed by more than one person. Consultant’s bills shall include the following information, as applicable, to which such services cost or pertain:
A brief description of services performed;
The date the services were performed;
The number of hours spent and by whom; and
Consultant’s signature.
Any such invoices shall be in full accord with any and all applicable provisions of this Agreement.
City shall make payment on each such invoice within thirty (30) days of receipt; provided, however, that if Consultant submits an invoice which is incorrect, incomplete, or not in accord with the provisions of this Agreement, City shall not be obligated to process any payment to Consultant until thirty (30) days after a correct and complying invoice has been submitted by Consultant. The City shall process undisputed portion immediately.
5. Meet & Confer. Consultant agrees to meet and confer with City or its agents or employees with regard to services as set forth herein as may be required by City to ensure timely and adequate performance of the Agreement.
6. Additional Copies. If City requires additional copies of reports, or any other material which Consultant is required to furnish as part of the services under this Agreement, Consultant shall provide such additional copies as are requested, and City shall compensate Consultant for the actual costs related to the production of such copies by Consultant.
7. Responsibility of Consultant. By executing this Agreement, Consultant agrees that the services to be provided and work to be performed under this Agreement shall be performed in a fully competent manner. By executing this Agreement, Consultant further agrees and represents to City that Consultant possesses, or shall arrange to secure from others, all of the necessary professional capabilities, experience, resources, and facilities necessary to provide City the services contemplated under this Agreement and that City relies upon the professional skills of Consultant to do and perform Consultant’s work. Consultant further agrees and represents that Consultant shall follow the current, generally accepted practices in this area to the profession to make findings, render opinions, prepare factual presentations, and provide professional advice and recommendations regarding the projects for which the services are rendered under this Agreement.
8. Responsibility of City. To the extent appropriate to the projects to be completed by Consultant pursuant to this Agreement, City shall:
(A) Assist Consultant by placing at its disposal all available information pertinent to the projects, including but not limited to, previous reports and any other data relative to the projects. Nothing contained herein shall obligate City to incur any expense in connection with completion of studies or acquisition of information not otherwise in the possession of City. (B) Examine all studies, reports, sketches, drawings, specifications, proposals, and other documents presented by Consultant, and render verbally or in writing as may be appropriate, decisions pertaining thereto within a reasonable time so as not to delay the services of Consultant. (C) The Director of Finance, or his designee, shall act as City’s representative with respect to the work to be performed under this Agreement. Such person shall have the complete authority to transmit instructions, receive information, interpret, and define City’s policies and decisions with respect to materials, equipment, elements, and systems pertinent to Consultant’s services. City may unilaterally change its representative upon notice to Consultant. (D) Give prompt written notice to Consultant whenever City observes or otherwise becomes aware of any defect in a project.
9. Acceptance of Work Not a Release. Acceptance by City of the work to be performed under this Agreement does not operate as a release of Consultant from professional responsibility for the work performed.
10. Indemnification and Hold Harmless. Consultant shall defend, indemnify, and hold harmless City and its officers, officials, employees, volunteers, and agents from and against any and all liability, loss, damage, expense, costs (including without limitation costs and fees of litigation) of every nature arising out of or in connection with Consultant’s performance of work hereunder, including the performance of work of any of Consultant’s subcontractors or agents, or Consultant’s failure to comply with any of its obligations contained in the agreement, except such loss or damage which was caused by the sole negligence or willful misconduct of City.
11. Insurance. Consultant shall procure and maintain for the duration of this Agreement insurance meeting the requirements specified in Exhibit A hereto.
12. Access to Records. Consultant shall maintain all preparatory books, records, documents, accounting ledgers, and similar materials including but not limited to calculation and survey notes relating to work performed for City under this Agreement on file for at least three (3) years following the date of final payment to Consultant by City. Any duly authorized representative(s) of City shall have access to such records for the purpose of inspection, audit, and copying at reasonable times during Consultant’s usual and customary business hours. Consultant shall provide proper facilities to City’s representative(s) for such access and inspection.
13. Non-Assignability. It is recognized by the parties hereto that a substantial inducement to City for entering into this Agreement was, and is, the professional reputation and competence of Consultant. This Agreement is personal to Consultant and shall not be assigned by it without express written approval of City.
14. Changes to Scope of Work. City may at any time, and upon a minimum of ten (10) days written notice, seek to modify the scope of services to be provided for any project to be completed under this Agreement. Consultant shall, upon receipt of said notice, determine the impact on both time and compensation of such change in scope and notify City in writing. Upon agreement between City and Consultant as to the extent of said impacts to time and compensation, an amendment to this Agreement shall be prepared describing such changes. Execution of the amendment by City and Consultant shall constitute Consultant’s notice to proceed with the changed scope.
15. Ownership of Documents. Title to all final documents, including drawings, specifications, data, reports, summaries, correspondence, photographs, computer software (if purchased on City’s behalf), video and audio tapes, software output, and any other materials with respect to work performed under this Agreement shall vest with City at such time as City has compensated Consultant, as provided herein, for the services rendered by Consultant in connection with which they were prepared. City agrees to hold harmless and indemnify Consultant against all damages, claims, lawsuits, and losses of any kind including defense costs arising out of any use of said documents, drawings, and/or specifications on any other project without written authorization of Consultant.
16. Termination.
City shall have the authority to terminate this Agreement, upon sixty-days’ written notice to Consultant, as follows:
If, in City’s opinion, the conduct of Consultant is such that the interest of City may be impaired or prejudiced, or For any reason whatsoever.
Upon termination, Consultant shall be entitled to payment of such amount as fairly compensates Consultant for all work satisfactorily performed up to the date of termination based upon Consultant’s rates shown in Exhibit C and/or Section 3 of this Agreement, except that:
In the event of termination by City for Consultant’s default, City shall deduct from the amount due Consultant the total amount of additional expenses incurred by City as a result of such default. Such deduction from amounts due Consultant are made to compensate City for its actual additional costs incurred in securing satisfactory performance of the terms of this Agreement, including but not limited to, costs of engaging another consultant(s) for such purposes. In the event that such additional expenses shall exceed amounts otherwise due and payable to Consultant hereunder, Consultant shall pay City the full amount of such expense.
In the event that this Agreement is terminated by City for any reason, Consultant shall:
Upon receipt of written notice of such termination promptly cease all services on this project, unless otherwise directed by City; and Deliver to City all documents, data, reports, summaries, correspondence, photographs, computer software output, video and audio tapes, and any other materials provided to Consultant or prepared by or for Consultant or City in connection with this Agreement. Such material is to be delivered to City in completed form; however, notwithstanding the provisions of Section 15 herein, City may condition payment for services rendered to the date of termination upon Consultant’s delivery to City of such material.
In the event that this Agreement is terminated by City for any reason, City is hereby expressly permitted to assume the projects and complete them by any means, including but not limited to, an agreement with another party.
The rights and remedy of City and Consultant provided under this Section are not exclusive and are in addition to any other rights and remedies provided by law or appearing in any other section of this Agreement.
17. Compliance with Laws, Rules, and Regulations. Services performed by Consultant pursuant to this Agreement shall be performed in accordance and full compliance with all applicable federal, state, and City laws and any rules or regulations promulgated thereunder.
18. Exhibits Incorporated. All exhibits referred to in this Agreement and attached to it are hereby incorporated in it by this reference. In the event there is a conflict between any of the terms of this Agreement and any of the terms of any exhibit to the Agreement, the terms of the Agreement shall control the respective duties and liabilities of the parties.
19. Independent Contractor. It is expressly understood and agreed by both parties that Consultant, while engaged in carrying out and complying with any of the terms and conditions of this Agreement, is an independent contractor and not an employee of City. Consultant expressly warrants not to represent, at any time or in any manner, that Consultant is an employee or servant of City.
20. Integration and Entire Agreement. This Agreement represents the entire understanding of City and Consultant as to those matters contained herein. No prior oral or written understanding shall be of any force or effect with respect to those matters contained herein. This Agreement may not be modified or altered except by amendment in writing signed by both parties.
21. Jurisdiction and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California, County of Monterey, and City of Salinas. Jurisdiction of litigation arising from this Agreement shall be in the State of California, in the County of Monterey or in the appropriate federal court with jurisdiction over the matter.
22. Severability. If any part of this Agreement is found to be in conflict with applicable laws, such part shall be inoperative, null and void insofar as it is in conflict with said laws, but the remainder of the Agreement shall continue to be in full force and effect.
23. Notices.
(A) Written notices to City hereunder shall, until further notice by City, be addressed to:
Director of Finance
City of Salinas
City Hall
200 Lincoln Avenue
Salinas, California 93901
With a copy to:
City Attorney
City of Salinas
City Hall
200 Lincoln Avenue
Salinas, California 93901
(B) Written notices to Consultant shall, until further notice by Consultant, be addressed to:
Kenneth H. Pun, CPA, CGMA
Managing Partner
The Pun Group, LLP
200 East Sandpointe Avenue, Suite 600
Santa Ana, CA 92707
[email protected]
949-777-8850 (Fax)
(C) The execution of any such notices by the Director of Finance shall be effective as to Consultant as if it were by resolution or order of the City Council, and Consultant shall not question the authority of the Director of Finance to execute any such notice. (D) All such notices shall either be delivered personally to the other party’s designee named above, or shall be deposited in the United States Mail, properly addressed as aforesaid, postage fully prepaid, and shall be effective the day following such deposit in the mail.
24. Nondiscrimination. During the performance of this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, color, religion, ancestry, creed, sex, national origin, familial status, sexual orientation, age (over 40 years) or disability. Consultant shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color, religion, ancestry, creed, sex, national origin, familial status, sexual orientation, age (over 40 years) or disability.
25. Conflict of Interest. Consultant warrants and declares that it presently has no interest, and shall not acquire any interest, direct or indirect, financial or otherwise, in any manner or degree which will render the services required under the provisions of this Agreement a violation of any applicable local, state, or federal law. Consultant further declares that, in the performance of this Agreement, no subcontractor or person having such an interest shall be employed. In the event that any conflict of interest should nevertheless hereinafter arise, Consultant shall promptly notify City of the existence of such conflict of interest so that City may determine whether to terminate this Agreement. Consultant further warrants its compliance with the Political Reform Act (Government Code section 81000 et seq.) and Salinas City Code Chapter 2A that apply to Consultant as the result of Consultant’s performance of the work or services pursuant to the terms of this Agreement.
26. Headings. The section headings appearing herein shall not be deemed to govern, limit, modify, or in any manner affect the scope, meaning or intent of the provisions of this Agreement.
27. Attorneys’ Fees. In case suit shall be brought to interpret or to enforce this Agreement, or because of the breach of any other covenant or provision herein contained, the prevailing party in such action shall be entitled to recover their reasonable attorneys’ fees in addition to such costs as may be allowed by the Court. City’s attorneys’ fees, if awarded, shall be calculated at the market rate.
28. Non-Exclusive Agreement. This Agreement is non-exclusive and both City and Consultant expressly reserves the right to contract with other entities for the same or similar services.
29. Rights and Obligations Under Agreement. By entering into this Agreement, the parties do not intend to create any obligations express or implied other than those set out herein; further, this Agreement shall not create any rights in any party not a signatory hereto.
30. Licenses. If a license of any kind, which term is intended to include evidence of registration, is required of Consultant, its representatives, agents, or subcontractors by federal, state, or local law, Consultant warrants that such license has been obtained, is valid and in good standing, and that any applicable bond posted in accordance with applicable laws and regulations.
31. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute a single agreement.
32. Legal Representation. Each party affirms that it has been represented, if it so chose, by legal counsel of its own choosing regarding the preparation and the negotiation of this Agreement and the matters and claims set forth herein, and that each of them has read this Agreement and is fully aware of its contents and its legal effect. Neither party is relying on any statement of the other party outside the terms set forth in this Agreement as an inducement to enter into this Agreement.
33. Joint Representation. The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any party. No presumptions or rules of interpretation based upon the identity of the party preparing or drafting the Agreement, or any part thereof, shall be applicable or invoked.
34. Warranty of Authority. Each party represents and warrants that it has the right, power, and authority to enter into this Agreement. Each party further represents and warrants that it has given any and all notices, and obtained any and all consents, powers, and authorities, necessary to permit it, and the persons entering into this Agreement for it, to enter into this Agreement.
35. No Waiver of Rights. Waiver of a breach or default under this Agreement shall not constitute a continuing waiver or a waiver of a subsequent breach of the same or any other provision of this Agreement. The failure to provide notice of any breach of this Agreement or failure to comply with any of the terms of this Agreement shall not constitute a waiver thereof. Failure on the part of either party to enforce any provision of this Agreement shall not be construed as a waiver of the right to compel enforcement of such provision or any other provision. A waiver by City of any one or more of the conditions of performance under this Agreement shall not be construed as waiver(s) of any other condition of performance under this Agreement.
IN WITNESS WHEREOF, the parties hereto have made and executed this Agreement on the date first written above.
CITY OF SALINAS
____________________________
Steve Carrigan
City Manager
APPROVED AS TO FORM:
_________________________
□ Christopher A. Callihan, City Attorney, or
□ Rhonda Combs, Assistant City Attorney
CONSULTANT
___________________________________
By (Printed Name): ___________________
Its (Title): ___________________________
Exhibit A – Insurance Requirements
Insurance Requirements
Consultant shall procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work hereunder and the results of that work by Consultant, his agents, representatives, employees, or subcontractors. With respect to General Liability and Professional Liability, coverage should be maintained for a minimum of five (5) years after Agreement completion.
Minimum Scope and limit of Insurance
Coverage shall be at least as broad as:
Commercial General Liability (“CGL”): Insurance Services Office Form (“ISO”) CG 00 01 covering CGL on an occurrence basis, including products and completed operations, property damage, bodily injury, and personal & advertising injury with limits no less than $1,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.
Automobile Liability: ISO Form CA 0001 covering any auto, or if Consultant has no owned autos, hired and non-owned, with limits no less than $1,000,000 per accident for bodily injury and property damage.
Workers’ Compensation insurance as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with a limit of no less than $1,000,000 per accident for bodily injury or disease.
Professional Liability (also known as Errors and Omissions) insurance appropriate to the work being performed, with limits no less than $1,000,000 per occurrence or claim, $2,000,000 aggregate per policy period of one year.
If Consultant maintains broader coverage and/or higher limits than the minimums shown above, the City of Salinas requires and shall be entitled to the broader coverage and/or higher limits maintained by Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to City.
OTHER INSURANCE PROVISIONS
The insurance policies are to contain, or be endorsed to contain, the following provisions:
Additional Insured Status
The City of Salinas, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of Consultant including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to Consultant’s insurance (at least as broad as ISO Form CG 20 10, CG 11 85, or both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 forms if later revisions used).
Primary Coverage
For any claims related to this Agreement or the project described within this Agreement, Consultant’s insurance coverage shall be primary coverage at least as broad as ISO Form CG 20 01 04 13 as respects City, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by City, its officers, officials, employees, or volunteers shall be in excess of Consultant’s insurance and shall not contribute with it.
Notice of Cancellation
Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to City.
Waiver of Subrogation
Consultant hereby grants to City a waiver of any right to subrogation which any insurer of said Consultant may acquire against City by virtue of the payment of any loss under such insurance. Consultant agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not City has received a waiver of subrogation endorsement from the insurer.
The Workers’ Compensation policy shall be endorsed with a waiver of subrogation in favor of the City of Salinas for all work performed by Consultant, its employees, agents, and subcontractors.
Self-Insured Retentions
Self-insured retentions must be declared by Consultant to and approved by City. At the option of City, Consultant shall provide coverage to reduce or eliminate such self-insured retentions as respects City, its officers, officials, employees, and volunteers; or the consultant shall provide evidence satisfactory to City guaranteeing payment of losses and related investigations, claim administrations, and defense expenses. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or City.
Acceptability of Insurers
Insurance is to be placed with insurers with a current AM Best’s rating of no less than A:VII, unless otherwise acceptable to City.
Claims Made Policies
If any of the required policies provide coverage on a claims-made basis:
The Retroactive Date must be shown and must be before the date of this Agreement or the beginning of Agreement work.
Insurance must be maintained, and evidence of insurance must be provided for at least five (5) years after completion of the Agreement of work.
If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the Agreement effective date, Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of Agreement work.
A copy of the claims reporting requirements must be submitted to City for review.
Verification of Coverage
Consultant shall furnish City with original certificates and amendatory endorsements or copies of the applicable insurance language effecting coverage required by this Agreement. All certificates and endorsements are to be received and approved by City before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive Consultant’s obligation to provide them. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.
Subcontractors
Consultant shall require and verify that all sub-consultants and/or subcontractors maintain insurance meeting all the requirements stated herein, and Consultant shall ensure that Entity is an additional insured on insurance required from such sub-consultants and/or subcontractors.
Special Risks or Circumstances
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.
Maintenance of Insurance
Maintenance of insurance by Consultant as specified shall in no way be interpreted as relieving Consultant of its indemnification obligations or any responsibility whatsoever and Consultant may carry, at its own expense, such additional insurance as it deems necessary.
Exhibit B – Scope of Services
Audit services may include, but are not limited to:
Financial Statement Audits and issuance of an opinion statement on the Annual Comprehensive Financial Report of the City of Salinas. The audit will be conducted in accordance with Generally Accepted Government Auditing Standards. The report will be in full compliance with all current GASB pronouncements.
Consultant will assist in meeting the requirements for the Government Finance Officers Association (GFOA) “Certificate of Achievement for Excellence in Financial Reporting.” If needed, prepare a Single Audit Report which will include the following:
report on compliance and on internal control over financial reporting based on an audit of financial statements performed in accordance with Government Auditing Standards; report on compliance with requirements applicable to each major program, internal control over compliance, and on the schedule of expenditures of federal awards in accordance with Uniform Guidance, “Audits of State and Local Governments,” and the Single Audit Act of 1984 (Public Law 98-502); Schedule of Expenditures of Federal Awards;
Notes to Schedule of Expenditures of Federal Awards;
Schedule of Findings and Questioned Costs;
any other required schedules or reports;
preparation of the Data Collection Form for Reporting on Audits of States, Local Governments, and Non-Profit Organizations.
Test compliance with Proposition 111, Article XIII.B – Review of Appropriation Limit Calculations (Gann Limit).
Prepare financial and compliance audit of the Successor Agency to the Community Development Commission as the Salinas Redevelopment Agency (“Successor Agency).
Prepare separate audits of the financial statements of the City of Salinas’ Transportation Safety and Investment Plan Account Fund and the related types of compliance requirements described in the Transportation Agency for Monterey County's (TAMC) Ordinance No. 2016-01 and in the Measure X Master Programs Funding Agreement (the Agreement) between TAMC and the City of Salinas, as of and for the year ended June 30.
Consultant will issue a separate “management letter” that includes recommendations for improvements in internal control, accounting procedures, and other significant observations that are considered to be non-reportable conditions. Management letters will be addressed to the City Manager.
Consultant will issue Form SF-SAC, Data Collections Form for Reporting of Audits of States, Local Governments, and Non-Profit Organizations.
Consultant will assist in preparing pension reconciliations and adjustments, other post-employment benefits (OPEB) plan reconciliations and adjustments, GASB 34 conversion and reconciliation, schedule of expenditures of federal awards and related notes, and filing of the data collection form.
Additional Services:
Consultant will compile the Annual State Controller’s Report for City.
Consultant will serve as a resource and provide training to professional accounting staff on the preparation of financial statements and best practices in conformance with applicable.
Consultant will perform the following special requirements:
Budget
Consultant will examine the final budget document as approved by the City Council and compare the estimated revenues and appropriations as shown in the budget document with the entries recorded on the revenue ledger and the appropriation ledger maintained by the Department of Finance.
Funds
Consultant will examine City ordinances or resolutions and minutes of meetings of the City Council pertaining to all funds of City to determine the purpose of each fund and the proper disposition of all funds’ revenues, expenditures, and year-end balances. Consultant will also examine the various fund transactions and balances in each fund and prepare the appropriate financial statements for the audit report.
Verification of Cash and Securities
Cash & Checks: Consultant will count all cash and checks in the Department of Finance as of June 30. Consultant will subsequently be satisfied that all items counted and verified are deposited in City’s depository bank. Investment securities owned by City and held in safekeeping by City’s various banks and financial institutions will be verified as to their existence as of June 30. Written confirmation will be obtained from all City depositories of balance on hand on June 30.
Collateral Pledged for Funds on Deposit: Consultant will examine the records of pledged collateral and make such tests of depository bank pooled collateral operations as may be necessary to express an opinion as to the legal sufficiency of the collateral to safeguard City’s bank deposits.
Accounting Records: Consultant will examine City’s internal accounting and administrative controls to determine that accounting procedures are adequate to safeguard assets and provide reasonable assurance of proper recording of financial transactions.
Assets
Cash and Investments: Treasury and investment operations are the responsibility of the Department of Finance. Consultant will verify the cash balances and the existence of the investments. The investments market value will be reviewed and compared to book value. Consultant will review balances as of June 30 and investments earnings recorded during the fiscal year. The footnote disclosure will be in compliance with the applicable GASB statement(s).
Fixed Assets: Consultant will examine the procedures for recording the acquisition of and the disposal of property owned by City. Consultant will compare the annual inventories of property with the controls maintained by the Department of Finance. Consultant will review the transactions involving fixed assets to the extent necessary to ensure that accountability for fixed assets is maintained.
Liabilities
Accounts Payable: Consultant will make a sufficient examination of accounts payable to enable it to determine that, in general, they bear evidence of verification and approval with supporting documents such as purchase orders, vendor's invoices, receiving reports, transportation bills, contracts and other documents where necessary. Consultant will also be satisfied that the claims were charged against the proper departmental appropriations and that funds were available at the date the purchase was made.
Bonded Debt: Consultant will examine the amount of bonded debt of City, and the outstanding debt determined by Consultant will be reconciled to the accounting records of City by fund and amount outstanding as of June 30.
Other Liabilities and Deferred Credits: Consultant will be satisfied with the fairness of the accounts representing other liabilities and deferred credits.
Fund Balances
Consultant will examine revenues and expenditures by funds and analyze the changes in fund balances for the financial statement of each fund in the audit report.
Single Audit Act
Consultant will perform a financial and compliance audit under the Single Audit Act of 1996 and in accordance with Uniform Guidance.
The Single Audit Report will include the schedule of expenditures of federal awards, footnotes, findings, and questioned costs, including reportable conditions and material weaknesses, and follow up on prior year audit findings, if applicable. The Single Audit Report is not to be included in the ACFR but is to be issued separately.
Provided By Client (PBC) Lists: Consultant will provide PBC lists for both interim and final audits according to an agreed-upon timeline between the engagement team and City in order to be reasonably prepared for a field audit. The engagement team will meet with City’s management during the initial planning stage to discuss audit schedules and review the prior year's audit findings (if any). We will deliver a list of all documents to be provided by City’s staff. Once such materials are agreed upon by the engagement team and City’s finance personnel, no other schedules will be requested unless new information comes to light in the course of test work.
Attendance at Meetings and Hearings: The engagement team will participate in as many meetings with staff as needed to perform the work scope tasks, present the audit plan prior to beginning fieldwork, and discuss the draft audit reports. The team will attend public meetings to present and discuss its findings and recommendations. Once all issues of discussion are resolved, the completed Financial Reports, Single Audit report (if applicable), and other reports will be delivered to City according to the agreed-upon schedule.
Proposed Audit Adjustments: All proposed adjusting journal entries by Consultant will be discussed and explained in a timely manner with the designated Department of Finance personnel. Such proposed adjustments will be in a format that shows the lowest level of posting detail needed for data entry in the general ledger systems.
Supplemental Reports, Audits, or Agreed-Upon Procedures: Other services, such as agreed-upon procedures, may be deemed necessary. These services will be performed at agreed-upon rates and will be added in a written agreement before commencing audit work. Consultant and the City of Salinas will discuss and approve the scope and associated costs of these tasks.
Advice and Consultation: Will be provided throughout the year on matters relating to accounting and financial reporting. Such services do not include any task that entails significant research or a formal report.
GASB Implementation: Consultant will provide technical assistance and training in the implementation of applicable GASB pronouncements not yet in effect. A dedicated partner will be responsible for providing advice and consultation for the implementation of these new standards. Consultant will advise City on the applicability of accounting and reporting standards and other accounting issues and provide guidance on new note disclosures, GASB implementations, and other reporting requirements. We will also provide training, resources, and information on topics relevant to City’s financial reporting and operations. (Depending upon the scope, additional charges may apply.) Report of all Irregularities and Illegal Acts: Consultant will make an immediate written report of all irregularities and illegal acts or indications of illegal actions of which we may become aware to the City Council, City Manager, City Attorney, and the Director of Finance.
Working Paper Retention and Access to Working Papers: Consultant will retain, at its own expense, all working papers and reports for a minimum of seven (7) years unless the City of Salinas notifies Consultant in writing of the need to extend the retention period. Consultant will make working papers available to City or any government agencies included in the audit of federal grants.
City of Salinas;
United States Department of Housing and Urban Development (HUD); United States General Accounting Office;
State of California, Office of the State Controller
parties designated by the federal or state governments or by City as part of an audit quality review process; and auditors of entities of which City is a sub-recipient of grant funds.
Additionally, Consultant will comply with reasonable requests from successor auditors and allow them to review working papers that relate to matters of continuing accounting significance.
Exhibit C – Fees
Auditing Services
Consultant’s all-inclusive maximum fees are as follows:
FY 22
FY 23
FY 24
FY 25
Optional
FY26
Optional
City Audit and Related Reports
$63,000
$64,890
$66,836
$68,841
$70,906
Single Audit
10,000
10,300
10,609
10,927
11,255
Gann Limit Review
500
515
530
546
563
Successor Agency
8,500
8,755
9,018
9,288
9,567
Transportation Safety and Investment Plan Account Fund
10,000
10,300
10,609
10,927
11,255
State Controller’s Report – City
3,000
3,090
3,183
3,278
3,377
Total
$95,000
$97,850
$100,785
$103,808
$106,923
Additional Professional Services
Supplemental reports, audits, or agreed-upon procedures not covered by this proposal may be added to a written agreement prior to commencing audit work. Consultant and City will discuss and approve the scope and associated costs of these services. Such additional work will be performed at the hourly rates below.
Hourly Billing Rates
Partners
$275
Managers
$200
Senior Accountants
$150
Staff Accountants
$125
Clerical
$ 75
Additional Professional Services
Consultant will bill City at the rates outlined in the Auditing Services section in four stages:
at conclusion of the planning phase;
at conclusion of the interim phase;
at conclusion of the year-end phase;
after presentation and acceptance of the final audit reports.
Interim billings will cover periods of not less than a calendar month.
Billing amounts are as follows:
% of Proposal Amount
Planning
10%
Interim
40%
Fieldwork
40%
Presentation and Acceptance of Reports
10%
Expenses (Out-of-Pocket)
Out-of-pocket expenses, including, but not limited to, those for travel, data resources, photocopying, and postage/delivery, will be borne by Consultant.
Consultant’s partners will be available to provide advice and consultation as necessary to City. City will not be billed for these services.
Form: Professional Service Agreement v. January 2021 Page 1 of 17 The Pun Group, LLP
June 2022
Form: Professional Service Agreement v. January 2021 Page 2 of 17 The Pun Group, LLP
June 2022