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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: March 4, 2026
To: Honorable Mayor and City Council Members
From: C. Jeannie Fortune, Interim Director of Finance & Management Services
Department: Finance & Management Services
Subject: Approval of the award for Financial Auditing Services to Eadie Payne LLP, in the Amount of $542,860 to Audit
Financial Statements for Fiscal Years Ending June 30,
2026, through June 30, 2030, with the Option of Auditing the City’s Financials for Two Subsequent Years (All
Wards)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California, approve the professional services agreement with Eadie Payne LLP for financial auditing services in the amount of $542,860 for fiscal years ending June 30, 2026, through June 30, 2030, with the option of auditing the City’s financial statements for two subsequent years (through June 30, 2032).
City Manager's Comments
The Finance Department soliciting proposals for audit services for the City through June 30, 2030. The City Manager concurs with the Finance Department recommendation to award to Eadie Payne LLP for a total of $542,869 over 5 years.
Executive Summary
Pursuant to California law, each year, the City engages the services of an independent auditor to audit its financial statements and related internal control procedures. The City’s previous auditor was Rogers, Anderson, Malody and Scott, LLP (RAMS), completing their independent audit for the City’s Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2025. The City sent out a Request for Proposals (RFP) for auditing services and an internal committee determined that contracting with Eadie Payne LLP for audit services from June 30, 2026 through June 30, 2030 with the option of auditing the City’s financials for two additional years is the best choice based on qualifications, expertise, transparency, and price. 3 1
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Background
The purpose of an independent auditor's report for government agencies is to provide stakeholders (citizens, lawmakers) with objective assurance and transparency on financial accountability, program effectiveness, and compliance with laws, improving trust and decision-making by verifying fair presentation, strong internal controls, and proper use of public funds.
The City issued an RFP for audit services. Audit services for the fiscal year to be audited usually commence in the month of May of that fiscal year with a review on internal controls and accounting procedures and continue until December of the following fiscal year.
The City received six (6) proposals:
Proposer Location Amount Comments
The Pun Group LLP Santa Ana, CA $541,512
Vasquez & Company LLP Glendale, CA $523,300
Forvis LLP Irvine, CA $670,000
Eadie Payne LLP Riverside, CA $542,860
Rogers, Anderson, Malody,
Scott (RAMS) LLP (current
auditor)
San Bernardino,
CA $545,072
Includes a 5% credit
for being local
Clifton Larson Allen (CLA) LLP Ontario, CA $634,790
An independent financial audit is crucial for a city because it provides an objective, unbiased evaluation of financial records, ensuring that public funds are managed with integrity, transparency, and accuracy.
Discussion
The RFP issued for auditing services requested that the audit be conducted in accordance with Generally Accepted Government Auditing Standards (GAGAS), issued by the Government Accountability Office (GAO) of the United States. These standard provide the framework for conducting high-quality audits of government programs, entities, and funds. These standards are used to ensure that audits of government spending are reliable, objective, and transparent.
The scope of work required of the potential auditor included:
To perform a financial and compliance audit to determine (a) whether the combined financial statements of the City fairly present the financial position and the results of financial operations in accordance with generally accepted accounting principles, and (b) whether the City has complied with laws and regulations that may have a material effect upon the financial statements. To examine the City’s internal accounting controls and accounting procedures and render written reports of their findings and recommendations to the City and its legislative body.
The examination shall report conditions found during the audit that can be defined as either a significant or material weakness in the design or operation 3 1
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of the internal control structure, which could adversely affect the organization’s ability to record, process, summarize, and report financial data. The auditors shall be required to make an immediate, written report of all irregularities and illegal acts or indications of illegal acts of which they become aware.
The Auditors shall submit a management letter indicating their findings and/or recommendations on those matters noted and observed during the conduct of the examination of the financial records.
When evaluating the proposals, the internal committee took into consideration the following categories:
Approach to audit quality; identifying risks and determining materiality; Team knowledge and experience; in-depth knowledge of governmental Accounting, fund accounting, and applicable state and/or federal laws; Single-audit capability;
Value added services;
Detailed scope;
Responsiveness, communicativeness throughout and after the audit; Quality control procedures;
Location of offices (proximity to the City);
Pricing of the engagement.
Although Vasquez & Company submitted the lowest responsive bid, the internal committee noted that their offices are further away. The committee believed geographic proximity is beneficial for efficiency and quality. Proximity allows for easier, face-to-face access to staff, physical documents and systems. Local auditors often have better context-specific knowledge of the local regulations and economic environment.
The next three (proposers) scored similarly and had competitive pricing:
The Pun Group LLP - prior auditor for 6 years (FY2013-14 through 2018-19); Eadie Payne LLP, and
Rogers, Anderson, Malody, Scott (RAMS) LLP - current auditor for 6 years (FY2019-20 through 2024-25)
City staff believes that awarding the professional services agreement for audit services to Eadie Payne LLP will provide a commitment to fresh perspectives, potentially uncovering overlooked risks, errors, or possible fraud:
Fresh Perspective & Objectivity: The new auditors are not tied to past decisions, allowing them to evaluate financial reporting with unbiased, fresh eyes, which can lead to identifying missed issues.
Increased Risk Detection: A new auditor may identify vulnerabilities or material weaknesses that were previously overlooked.
Signaling Increased Scrutiny: This action demonstrates to stakeholders and 3 1
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investors a commitment to enhanced governance and high-quality oversight. Familiarity Threat: Selecting a new auditor helps mitigate the familiarity threat—the risk that a long-standing relationship with a client causes the auditor to become too sympathetic to their interests or too accepting of their work. A new, independent firm brings "fresh eyes" to the financial reporting process, which is critical for restoring objectivity, skepticism, and trust. 2021-2025 Strategic Targets and Goals
Awarding the professional services agreement for auditing services aligns with Key Target No. 1: Improved Operational & Financial Capacity.
Fiscal Impact
The annual costs associated with each audit fiscal year will be included in the Finance and Management Services Department’s annual operating budget.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California approve the professional services agreement with Eadie Payne LLP for financial auditing services in the amount of $542,860 for fiscal years ending June 30, 2026 through June 30, 2030, with the option of auditing the City’s financial statements for two subsequent years (through June 30, 2032).
Attachments
Attachment 1 Professional Services Agreement with Eadie Payne LLP Attachment 2 Eadie Payne Proposal for Professional Auditing Services Ward:
All Wards
Synopsis of Previous Council Actions:
N/A
CC: Eric Levitt, City Manager