CITY OF SAN MATEO
CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 8 Section Name: CONSENT CALENDAR Account Number: 10-2011 File ID: 25-10536 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Finance Department
MEETING DATE: November 03, 2025
SUBJECT:
Independent Audit Services — Amendment
RECOMMENDATION:
Approve Amendment No. 1 to an Agreement with The Pun Group LLP for independent audit services to extend the Agreement by one additional year; increase the compensation by $73,973, for a new total Agreement amount of $422,543.68; and authorize the City Manager to execute the amendment in substantially the form provided.
BACKGROUND:
The City of San Mateo released a Request for Proposals (RFP) for audit services in December 2020 and sent direct solicitations to eight professional Certified Public Accountant (CPA) firms that provide audit services to local government entities. The City received five responses to the RFP. Following an internal evaluation process, the City selected The Pun Group LLP (Pun Group) as the preferred CPA firm. On April 7, 2021, the City Council approved a five-year Agreement with Pun Group for independent audit services.
The current Agreement with Pun Group expires on December 31, 2025. City staff recommends extending this Agreement for one additional year, which will add the audit for the fiscal year ending June 30, 2026 to the Agreement. Staff recommends adding one year to the contract because Pun Group has proved an excellent audit partner as the City has moved all of its financial processes to Workday. The current audit team has been supportive during the transition to Workday and has worked through new reporting with staff to obtain the proper information for the audit. By waiting one more year, City staff can continue to work with Pun Group on the first full audit with all the City‘s financial pieces, including payroll, in Workday. At the same time, the original audit Agreement was five years, and audit contracts are more typically six years. Best practice for cities is to change auditors or at least to change managing partners within an audit firm every six years. By adding one more year, the Agreement term is more standard, allows one more year to work with the current audit partner from Pun Group, and provides more time for the Finance Department to conduct a new RFP process.
BUDGET IMPACT:
There is no additional fiscal impact as the operating funds for the City's annual audit are already included in the Finance budget and this additional year represents a 2% increase from the year prior, which can be covered by that budget.
ENVIRONMENTAL DETERMINATION:
This independent audit services amendment is not a project subject to CEQA, because it is a government fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. (CEQA Guidelines Section 15378(b)(4).)
NOTICE PROVIDED
All meeting noticing requirements were met.
CITY OF SAN MATEO
ATTACHMENTS
Att 1 – Proposed Amendment
STAFF CONTACT
Abby Veeser, Finance Director
[email protected]
(650) 522-7102