Agenda Item: 6
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR
CITY MANAGER APPROVAL:
DATE: April 12, 2022
SUBJECT: AWARD CONTRACT FOR PROFESSIONAL AUDITING SERVICES DEPARTMENT: Administrative Services
PRESENTER: Brittany Houston
RECOMMENDED ACTION
City Council:
1. Award a three-year contract for Auditing Services to The Pun Group, LLP, for $379,763, with an option for two one-year renewals not to exceed the annual bid amount plus an adjustment in compensation consistent with the appropriate Consumer Price Index.
2. Authorize the City Manager or designee to execute all contracts and associated documents, subject to City Attorney approval. Authorize the City Manager to execute up to two annual renewal options not to exceed $129,945, plus an adjustment in compensation consistent with the appropriate Consumer Price Index.
3. Appropriate on-going funds in the amount of $22,500 from the General Fund (Fund 100) to Accounting Professional Services expenditure account 1002101-516102.
BACKGROUND
Annually, the City of Santa Clarita (City) issues various audited financial and compliance reports. The reports are published to meet various federal, state, and other regulatory requirements, and to report to the City Council and the citizens of Santa Clarita on the City's annual financial status. The City's auditors are required by auditing standards to perform the audit to obtain a reasonable assurance about whether the financial statements prepared by management are "free of material misstatements" and to report on the results of the audit in the Independent Auditor's Report.
The contract with the current audit firm, Eide Bailly LLP (formerly Vavrinek, Trine, Day & Co., LLP), was awarded in 2016 and has now expired. In order to ensure the City would be receiving the highest quality auditing services, a Request for Proposal (RFP) for Professional Auditing
Services was issued on January 3, 2022.
The RFP was published on BidNet, the City's purchasing site. Audit firms registered on the site received an email notification that the City had posted its RFP. The RFP was downloaded by 14 firms. The following firms submitted proposals:
Company Location Three-Year Cost
Eide Bailly, LLP Rancho Cucamonga, CA $548,840
The Pun Group, LLP Santa Ana, CA $379,763
Moss, Levy & Hartzheim, LLP Culver City, CA $314,555
Badawi & Associates Berkeley, CA $314,970
Staff scored the proposals from each firm, evaluating their qualifications and experience, audit methodology and management approach, quality of personnel, and commitment to timeliness.
Three of the four firms were interviewed by the evaluation panel. As a result of this evaluation process, The Pun Group, LLP, is recommended based on their ability to provide professional guidance, qualified staff, experience auditing local governments, and the positive feedback received from their municipal clients contacted for references.
The Pun Group, LLP, is one of the "Top Accounting Firms" in Orange County according to the Orange County Business Journal and is also on the list of CalCPA Top 150 firms. The firm provides governmental auditing services to over 75 municipalities. The firm also won 2022's Best of Accounting® award from ClearlyRated which recognizes the best in staffing, accounting, and the other professional services.
To ensure the highest quality audit, The Pun Group, LLP, has a full-time partner and staff dedicated to quality control and over 15 percent of the audit hours will be performed directly by firm partners and managers. Based on total audit hours, the bid submitted by The Pun Group, LLP, has competitive hourly rates for Fiscal Year (FY) 2021-22.
Based on the results of this competitive process, the annual cost to the City for acquiring auditing services will be $125,600 for FY 2021-22, $124,218 for FY 2022-23 and $129,945 for FY 2023-
24. ALTERNATIVE ACTION
Other direction as determined by City Council.
FISCAL IMPACT
Upon approval of the recommended action, adequate funds will be budgeted for the contracted amount not to exceed $379,763 over three fiscal years.
ATTACHMENTS
Request for Proposal - Professional Auditing Services (available in City Clerk's Reading File)
Exhibit A - The Pun Group, LLP, Cost Proposal (available in City Clerk's Reading File)