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HomeMy WebLinkAboutItem No. 09 - Awarding a Professional Services Agreement for Auditing Services beginning FY 2019-20 Page 1 Staff Report City of San Bernardino Request for Council Action Date: May 6, 2020 To: Honorable Mayor and City Council Members From: Teri Ledoux, City Manager By:Paul Espinoza, Finance Director Subject: Resolution Awarding a PSA to (RAMS) as External Auditors for Beginning FY 2019/20 Recommendation Adopt Resolution 2020-88 of the Mayor and City Council of the City of San Bernardino, California, awarding a Professional Services Agreement to Rogers, Anderson, Malody & Scott (RAMS) of San Bernardino, California, as the City’s external auditors, in an amount not-to exceed $283,500 for a three-year term with a two-year option to extend. Background Annually, the City issues various audited financial and compliance reports. They are published not only to meet various federal, state, and other regulatory requirements, but also to report to the Mayor and City Council and the public 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 from material misstatement and to report on the results of the audit in the Independent Auditor’s Report. In addition, Assembly Bill (AB) 1345 was introduced in 2013 to address the length of time that audit services can be provided by the same audit team. Beginning with FY 2013/14, local governments can only use the same audit team for six consecutive years, after which time a new audit team with the same firm, or a different audit firm, will be required to complete the audit. To ensure qualified audit services are reasonably priced, the Finance Department has historically issued a Request for Proposals (RFP) for audit services every four to six years. The City’s current auditors, The Pun Group LLP, have performed six consecutive audits dating back to FY 2013/14. Although staff has been pleased with the services provided by the Pun Group, based on the length of time with the Pun Group and the requirements directed by Assembly Bill 1345 Local Government Audits, staff feels it is fiscally prudent to switch auditors at this time. Under AB -1345 section 12410.6(b) a local agency shall not employ a public accounting firm to provide audit services to a local agency for six consecutive fiscal years. 6701 Page 2 Discussion An RFP was issued on February 26, 2020 for auditing services beginning with the audit of FY 2019/20. Evaluation and Selection The City was fortunate to have six qualified firms respond to the City’s R FP. Proposals were received from the following firms: 1 Brown Armstrong Bakersfield, CA 2 Eadie and Payne LLP Riverside, CA 3 Lance, Soll and Lunghard, LLP Brea, CA 4 The Pun Group LLP Santa Ana, CA 5 Rogers, Anderson, Malody & Scott, LLP (RAMS) San Bernardino, CA 6 White Nelson Diehl Evans LLP (WNDE) Irvine, CA Proposals were reviewed by a team consisting of the Deputy Director of Finance, Accounting Manager, and Accountant III. Each firm was evaluated based on their proposed cost, the size of their firm, and experience with cities comparable to the City of San Bernardino in both size and services provided. Staff was unanimous in its selection of the top three firms consisting of RAMS, WNDE, and the Pun Group (consisting of a different audit team to comply with AB 1345). These firms were invited to participate in Zoom interviews on April 7, 2020. Staff also conducted reference checks of the top three firms, with all references coming back with positive marks. After a lengthy review and interview process, RAMS was selected based on their ability to provide professional guidance, qualified staff, price, and experience auditing comparable cities. The agreement is for an amount not -to-exceed $283,500 to cover required professional auditing services. A detail by fiscal year is shown below: 2020-2025 Strategic Targets and Goals Entering into a new contract for auditing services at a reasonable price is consistent with Key Target No. 1: Financial Stability. The new audit contract will provide significant savings, which will allow the City to operate in a fiscally responsible and business -like manner. Fiscal Impact The current contract price for all services is $184,500. The approximately $93,000 of 6701 Page 3 savings will be included in the City’s budget beginning with the FY 2020/21 (for the FY 2019/20 audit). Conclusion Adopt Resolution 2020-88 of the Mayor and City Council of the City of San Bernardino, California, awarding a Professional Services Agreement to Rogers, Anderson, Malody & Scott (RAMS) of San Bernardino, California, as the City’s external auditors, in an amount not-to exceed $283,500 for a three-year term with a two-year option to extend. Attachments Attachment 1 Professional Services Agreement between the City of San Bernardino and Rogers, Anderson, Malody, & Scott LLP Ward: All Resolution No. 2020-88 RESOLUTION NO. 2020-88 RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, AUTHORIZING THE EXECUTION OF AN AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND ROGERS, ANDERSON, MALODY & SCOTT, LLP FOR THE PROVISION OF FINANCIAL AUDITING SERVICES WHEREAS, in compliance with AB 1345 and in the interests of being fiscally prudent, City staff released a request for proposals for audit services; and WHEREAS, the City received proposals from six qualified firms; and WHEREAS, following a lengthy review and interview process, City staff recommended the selection of Rogers, Anderson, Malody & Scott, LLP. BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. The City Manager is hereby authorized and directed to execute the Professional Services Agreement with Rogers, Anderson, Malody & Scott, LLP, a copy of which is attached and incorporated herein as Exhibit “A”. SECTION 2. The Finance department is hereby authorized to issue a Purchase Order to Rogers, Anderson, Malody & Scott, LLP for Financial Auditing Services for an amount not to exceed $90,800 for the Fiscal Year 2019-20 and Fiscal Year 2020-21 financial audits, and an amount not to exceed $101,900 for the Fiscal Year 2021-22 financial audit. SECTION 3. The City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. SECTION 4. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable. SECTION 5. Effective Date. This Resolution shall become effective immediately. APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the Acting City Clerk this ___ day of __________ 2020. John Valdivia, Mayor Resolution No. 2020-88 City of San Bernardino Attest: Genoveva Rocha, CMC, Acting City Clerk Approved as to form: Sonia Carvalho, City Attorney Resolution No. 2020-88 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) ss CITY OF SAN BERNARDINO ) I, Genoveva Rocha, CMC, Acting City Clerk, hereby certify that the attached is a true copy of Resolution No. 2020-___, adopted at a regular meeting held on the ___ day of _______ 2020 by the following vote: Council Members: AYES NAYS ABSTAIN ABSENT SANCHEZ _____ _____ _______ _______ IBARRA _____ _____ _______ _______ FIGUEROA _____ _____ _______ _______ SHORETT _____ _____ _______ _______ NICKEL _____ _____ _______ _______ RICHARD _____ _____ _______ _______ MULVIHILL _____ _____ _______ _______ WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____________ 2020. Genoveva Rocha, CMC, Acting City Clerk