City Council
Report
City Council Meeting: April 23, 2024
Agenda Item: 5.C
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To: Mayor and City Council
From: Heather Averick, Director, Housing and Human Services Department Subject: Award a Contract to Moss Adams, LLP for Human Services Grants Program Monitoring Services
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines;
2. Award RFP # 402 to Moss Adams, LLP, for ongoing compliance monitoring services for the Housing and Human Services Department; and
3. Authorize the City Manager to negotiate and execute an agreement with Moss Adams, LLP, for two years, with two additional one-year renewal options, for a total amount not to exceed $400,000 over a four year period, with future funding contingent on Council budget approval.
Summary
The City’s Human Services Division (HSD) in the Housing and Human Services Department awards close to $10 million annually through the Human Services Grants Program (HSGP), a collaboration between the City and public non-profit organizations, to improve the wellbeing and quality of life for vulnerable and low-income Santa Monica residents including youth and families, seniors, people with disabilities, and people experiencing homelessness.
In operation for over four decades, the HSGP grant cycle includes regular monitoring and audits of grantee agencies and programs. As part of this monitoring practice, the City has a long history of contracting with an outside CPA firm with expertise in generally accepted accounting principles (GAAP) for non-profit organizations to conduct 2 of 5
certain aspects of fiscal monitoring, including performing reviews of documented internal controls, and assessments of administrative capacity. This work was contracted through the City’s open and competitive procurement process through a Request for Proposal (RFP). Due to City budget adjustments, external review of HSGP contracts was suspended temporarily mid-2020. Internal controls and monitoring of HSGP agencies continued through review of their bi-annual program and fiscal reporting submissions.
Since suspending the outside CPA review, reports have been evaluated internally by the HSD Fiscal Administrator and Analysts to ensure contract compliance, including evaluation of expenditures and general ledgers, program outcomes, funding conditions, significant trends or challenges in programming and budgeting, service levels of participants, validity of fiscal variances, and other contract compliance measures. Late 2021, the City posted an RFP for HSGP Grantee Monitoring Services, and external fiscal monitoring and site visits resumed for the 2020-2021 fiscal year. Moss Adams LLP secured the bid for the FY 2020-2021 HSGP monitoring. In addition to this work, the firm also produced the 2023 Moss Adams Grantee Monitoring and Process Review report (Attachment A). The report provides multiple detailed observations and recommendations related to the City’s grants program, including the recommendation that the City develop and execute an ongoing fiscal and programmatic monitoring process and provide technical assistance and training to HSGP agencies to ensure funding requirements are understood and followed.
HHSD released an RFP for the engagement of an external consultant for such services on March 14 and received two proposals. As the highest rated proposal by interdepartmental City staff and external reviewers, staff recommends approval of an agreement with Moss Adams, LLP for two years, with two additional one-year renewal options, for a total amount not to exceed $400,000 over a four-year period. This timeline aligns with the Human Services Grants Program four-year funding cycle, concluding June 30, 2027, and allows Moss Adams several months beyond the close of the 2023- 2027 grant cycle for conclusive analysis and report deliverables due by April 2028. 3 of 5
Discussion
The FY2023/27 HSGP programs and outcomes align with and advance the City Council priorities adopted in March 2023:
1) Addressing Homelessness
2) Clean & Safe Santa Monica
3) Cultivate Economic Recovery & Expand Community and Cultural Offerings 4) Racial Justice, Equity & Social Diversity
5) Sustainable & Connected Community
Performance management is a priority for HSD and is in alignment with community and Council emphasis on agency and program accountability. Contract monitoring plays a crucial role in ensuring transparency, accountability, and compliance for funding entities.
HSD contracted Moss Adams to perform fiscal desk reviews and site visits of HSGP grantees for fiscal year 2020-2021. In addition, HSD tasked Moss Adams with reviewing the current monitoring procedures of the HSGP process, identifying opportunities for improvement and taking into consideration the capacity of HSD’s HSGP monitoring team. Moss Adams published findings and monitoring process recommendations in the 2023 Moss Adams Grantee Monitoring and Process Review Report on February 13, 2023. (Attachment A)
To move forward on the fiscal monitoring recommendations, HSD released an RFP on February 20, 2024, inviting proposals from qualified firms with expertise in non-profit fiscal and program operations for the provision of ongoing compliance monitoring services for agencies funded through the City’s HSGP. Ideal applicants would hold active Certified Public Accounting licensure and possess a demonstrated understanding of non-profit social service programs and fiscal best practices, including expertise in federal Office of Management and Budget requirements and generally accepted accounting principles for non-profit organizations. Familiarity with local and regional service delivery systems and community needs would also be highly desirable.
Vendor Selection
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Bidder Recommendation
Best Qualified Firm Moss Adams, LLP
Evaluation Criteria Proposed work plan ability to accomplish project goals; previous experience with fiscal and public contract monitoring and compliance; value add/breadth of service; efficiency in cost proposal; proposer’s work samples and references for similar engagements.
Municipal Code SMMC 2.24.190
RFP Data
Posting Date: 2/20/2024 # of Vendors Downloaded: 17
Closing Date: 3/15/2024 # of Submittals Received: 2
Posted On: City’s online bidding site
Advertised In:
(City Charter & SMMC)
Santa Monica Daily Press
Additional Outreach: In addition to over 6,700 vendors registered in the City’s OpenGov platform, notification about the open bid was sent to HSD’s robust email distribution list, which includes agencies funded by the HSGP, the Human Services
Commission, Disabilities Commission, Virginia Avenue
Park & Police Activities League Boards, Cradle to Career collaborative, Early Childhood Task Force collaborative, Westside Cities Councils of Government, the Westside
Coalition, and neighborhood associations.
Justification to Award
Based on the evaluation criteria and the criteria set forth in SMMC 2.24.190, staff recommends Moss Adams as the best qualified firm to provide for the provision of ongoing compliance monitoring services based on their technical competence, plan to meet the project work scope, cost of services, demonstrated experience through references and work samples, and value add/breadth of service proposed to monitor the HSGP grantee agencies. Moss Adams is one of the 15 largest accounting and consulting firms in the United States and has been an industry leader in compliance and internal auditing services for over 30 years with significant experience working with governmental organizations, including the City of Santa Monica.
Environmental Review
The professional services agreement is exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. The agreement is covered by the common-sense exemption which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on Submittals Received
Moss Adams LLP The Pun Group, LLP
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the environment.” The award agreement will provide consulting services for fiscal and programmatic monitoring. Therefore, it can be seen with certainty that the agreement would not result in adverse physical impacts on the environment, and as such, is exempt from CEQA.
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the General Fund to award a professional services agreement with Moss Adams, LLP for ongoing compliance monitoring services for agencies receiving funding through the City’s HSGP. Future year funding is contingent on Council budget approval.
Contract Request
FY 2023-24 Request
Amount
Future Year
Amount Account # Total Contract Amount
$25,000 $375,000 01420002.552010 $400,000
Prepared By: Natasha Kingscote, Administrator
Approved Forwarded to Council
Attachments:
A. Attachment A: City of Santa Monica HSGP Grantee Monitoring 2023-02-13 B. Moss Adams Oaks Initiative Signed
C. Moss Adams Levine Act Signed