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HomeMy WebLinkAboutMayer Hoffman McCann P.C.; 2014-12-16;AGREEMENT FOR AGREED UPON PROCEDURES MAYER HOFFMAN MCCANN P.C. THIS AGREEMENT is made and entered into as of the day of •Dg^lgVyvbei^ 2014, by and between the CITY OF CARLSBAD, a municipal corporation. ("City"), and Mayer Hoffman McCann, a Professional Corporation, ("Contractor"). RECITALS A. City requires the professional services of a Certified Public Accounting Firm that is experienced in agreed upon procedures. B. Contractor has the necessary experience in providing professional services and advice related to agreed upon procedures. C. Contractor has submitted a proposal to City and has affirmed its willingness and ability to perform such wori<. NOW, THEREFORE, in considerafion of these recitals and the mutual covenants contained herein. City and Contractor agree as follows: 1. SCOPE OF WORK City retains Contractor to perform, and Contractor agrees to render, those services (the "Services") that are defined in attached Exhibit "A", which is incorporated by this reference in accordance wrth this Agreement's terms and condrtions. 2. STANDARD OF PERFORMANCE While performing the Services, Contractor will exercise the reasonable professional care and skill customarily exercised by reputable members of Contractor's profession practicing in the Metropolitan Southern California Area, and will use reasonable diligence and best judgment while exercising its professional skill and expertise. 2.1 Engagement Obiectives Contractor will apply the agreed-upon procedures which City has specified, listed in the attached schedule, related to the internal controls and accounting transactions of The Crossings at Carisbad, operated by Kemper Sports. The sufficiency ofthe procedures is solely the responsibility of those parties specified in the report. Consequently, Contractor makes no representafion regarding the sufficiency of the procedures described in the attached schedule either for the purpose forwhich this report has been requested or for any other purpose. If, for any reason, Contractor is unable to complete the procedures, Contractor will describe any restrictions on the performance of the procedures in our report, or will not issue a report as a result of this engagement. 2.2 Our Responsibilifies Contractor's engagement to apply agreed-upon procedures will be conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Because the agreed-upon procedures listed in the attached schedule do not constitute an examinafion. Contractor will not express an opinion on the subject matter described above. In addition. Contractor has no obligation to perform any procedures beyond those listed in the attached schedule. Contractor will submit a report listing the procedures performed and Contractor's findings. This report is intended solely for the use of the Specified Parties, and should not be used by anyone City Attorney Approved Version 1/30/13 other than these Specified Parties. Contractor's report will contain a paragraph indicating that had Contractor performed additional procedures, other matters might have come to Contractor's attention that would have been reported to City. 3. TERM The term of this Agreement will be effecfive for a period of six months maximum from the date first above written. 4. TIME IS OF THE ESSENCE Time is of the essence for each and every provision of this Agreement. 5. COMPENSATION The total fee payable for the Services to be performed during the initial Agreement term shall not exceed twenty thousand dollars ($20,000.00). No other compensation for the Services will be allowed except for items covered by subsequent amendments to this Agreement. The City reserves the right to withhold a ten percent (10%) retenfion unfil City has accepted the work and/or Services specified in Exhibit "A". Incremental payments, tf applicable, should be made as oufiined in attached Exhibrt "A". 6. STATUS OF CONTRACTOR Contractor will perform the Services in Contractor's own way as an independent contractor and in pursuit of Contractor's independent calling, and not as an employee of City. Contractor will be under control of City only as to the result to be accomplished, but will consult with City as necessary. The persons used by Contractor to provide services under this Agreement will not be considered employees of City for any purposes. The payment made to Contractor pursuant to the Agreement will be the full and complete compensafion to which Contractor is entitled. City will not make any federal or state tax withholdings on behatf of Contractor or its agents, employees or subcontractors. City will not be required to pay any workers' compensation insurance or unemployment contributions on behatf of Contractor or its employees or subcontractors. Contractor agrees to indemnify City within thirty (30) days for any tax, refirement contribution, social security, overtime payment, unemployment payment or worl<;ers' compensation payment which City may be required to make on behatf of Contractor or any agent, employee, or subcontractor of Contractor for work done under this Agreement. At the City's election, City may deduct the indemnification amount from any balance owing to Contractor. 7. SUBCONTRACTING Contractor will not subcontract any portion of the Services without prior written approval of City. If Contractor subcontracts any of the Services, Contractor will be fully responsible to City for the acts and omissions of Contractor's subcontractor and of the persons either direcfiy or indirecfiy employed by the subcontractor, as Contractor is for the acts and omissions of persons direcfiy employed by Contractor. Nothing contained in this Agreement will create any contractual relationship between any subcontractor of Contractor and City. Contractor will be responsible for payment of subcontractors. Contractor will bind every subcontractor and every subcontractor of a subcontractor by the terms of this Agreement applicable to Contractor's work unless specifically noted to the contrary in the subcontract and approved in writing by city. 8. OTHER CONTRACTORS The City reserves the right to employ other Contractors in connection with the Services. City Attomey Approved Version 1/30/13 9. INDEMNIFICATION Contractor agrees to indemnify and hold harmless the City and its officers, officials, employees and volunteers from and against all claims, damages, losses and expenses including attorney's fees arising out of the performance of the work described herein caused by any negligence, recklessness, or willful misconduct of the Contractor, any subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable. The parties expressly agree that any payment, attorney's fee, costs or expense City incurs or makes to or on behatf of an injured employee under the City's self-administered workers' compensation is included as a loss, expense or cost for the purposes of this secfion, and that this section will survive the expirafion or eariy termination of this Agreement. 10. INSURANCE Contractor will obtain and maintain for the duration of the Agreement and any and all amendments, insurance against claims for injuries to persons or damage to property which may arise out of or in connection with performance of the services by Contractor or Contractor's agents, representatives, employees or subcontractors. The insurance will be obtained from an insurance carrier admitted and authorized to do business in the State of California. The insurance carrier is required to have a current Best's Key Rafing of not less than "A-:VH". OR with a surplus line insurer on the State of California's List of Eligible Surplus Line Insurers (LESLI) with a rafing in the latest Best's Key Rating Guide of at least "A:X". 10.1 Coverages and Limits. Contractor will maintain the types of coverages and minimum limits indicated below, unless Risk Manager or City Manager approves a lower amount. These minimum amounts of coverage will not consfitute any limitations or cap on Contractor's indemnification obligations under this Agreement. City, its officers, agents and employees make no representation that the limits of the insurance specified to be carried by Contractor pursuant to this Agreement are adequate to protect Contractor. If Contractor believes that any required insurance coverage is inadequate. Contractor will obtain such additional insurance coverage, as Contractor deems adequate, at Contractor's sole expense. 10.1.1 Commercial General Liabilitv Insurance. $1,000,000 combined single-limrt per occurrence for bodily injury, personal injury and property damage. If the submitted policies contain aggregate limits, general aggregate limits will apply separately to the work uncler this Agreement or the general aggregate will be twice the required per occurrence limit. 10.1.2 Automobile Liabilitv. (tf the use of an automobile is involved for Contractor's work for City). $1,000,000 combined single-limrt per accident for bodily injury and property damage. 10.1.3 Workers' Compensation and Emplover's Liabilitv. Workers' Compensation limits as required by the California Labor Code. Workers' Compensafion will not be required tf Contractor has no employees and provides, to City's satisfaction, a declarafion stafing this. 10.1.4 Professional Liabilitv. Errors and omissions liability appropriate to Contractor's profession with limits of not less than $1,000,000 per claim. Coverage must be maintained for a period of five years following the date of completion of the work. I I If box is checked. Professional Liability City's Initials Contractor's Initials Insurance requirement is waived. City Attorney Approved Version 1/30/13 10.2. Addifional Provisions. Contractor will ensure that the policies of insurance required under this Agreement contain, or are endorsed to contain, the following provisions: 10.2.1 The City will be named as an addifional insured on Commercial General Liability which shall provide primary coverage to the City. 10.2.2 Contractor will obtain occurrence coverage, excluding Professional Liability, which will be written as claims-made coverage. 10.2.3 This insurance will be in force during the life of the Agreement and any extensions of it and will not be canceled without thirty (30) days prior written notice to City sent by certified mail pursuant to the Nofice provisions of this Agreement. 10.3 Providing Certificates of Insurance and Endorsements. Prior to City's execution of this Agreement, Contractor will furnish certificates of insurance and endorsements to City. 10.4 Failure to Maintain Coverage, tf Contractor fails to maintain any of these insurance coverages, then City will have the option to declare Contractor in breach, or may purchase replacement insurance or pay the premiums that are due on exisfing policies in order to maintain the required coverages. Contractor is responsible for any payments made by City to obtain or maintain insurance and City may collect these payments from Contractor or deduct the amount paid from any sums due Contractor under this Agreement. 10.5 Submission of Insurance Policies. City reserves the right to require, at anytime, complete and certified copies of any or all required insurance policies and endorsements. 11. BUSINESS LICENSE Contractor will obtain and maintain a City of Carisbad Business License for the term of the Agreement, as may be amended from time-to-time. 12. ACCOUNTING RECORDS Contractor will maintain complete and accurate records with respect to costs incurred under this Agreement. All records will be cleariy identifiable. Contractor will allow a representafive of City during normal business hours to examine, audrt, and make transcripts or copies of records and any other documents created pursuant to this Agreement. Contractor will allow inspecfion of all work, data, documents, proceedings, and activifies related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. 13. OWNERSHIP OF DOCUMENTS All work product produced by Contractor or its agents, employees, and subcontractors pursuant to this Agreement is the property of City. In the event this Agreement is terminated, all work product produced by Contractor or its agents, employees and subcontractors pursuant to this Agreement will be delivered at once to City. Contractor will have the right to make one (1) copy of the work product for Contractor's records. 14. COPYRIGHTS Contractor agrees that all copyrights that arise from the services will be vested in City and Contractor relinquishes all claims to the copyrights in favor of City. City Attorney Approved Version 1/30/13 15. NOTICES The name of the persons who are authorized to give written notices or to receive written notice on behatf of City and on behalf of Contractor under this Agreement. For Citv For Contractor Name Charies McBride Name Ken Al-lmam Administrative Services Title Director Tifie Shareholder Department Administrafive Services Address 2301 Dupont Dr., Suite 200 City of Carisbad Irvine, CA 92612 Address 1635 FaradayAvenue PhoneNo. 949-474-2020 Ext. 273 Carisbad, CA 92008-7314 Email kalimam@cbiz.com Phone No. 760-602-2430 Each party will nofify the other immediately of any changes of address that would require any notice or delivery to be directed to another address. 16. CONFLICT OF INTEREST Contractor shall file a Conflict of Interest Statement with the City Clerk in accordance with the requirements of the City of Carisbad Conflict of Interest Code. The Contractor shall report investments or interests in all four categories. 17. GENERAL COMPLIANCE WITH LAWS Contractor will keep fully informed of federal, state and local laws and ordinances and regulations which in any manner affect those employed by Contractor, or in any way affect the performance of the Services by Contractor. Contractor will at all times observe and comply with these laws, ordinances, and regulafions and will be responsible for the compliance of Contractor's services with all applicable laws, ordinances and regulafions. Contractor will be aware of the requirements of the Immigration Reform and Control Act of 1986 and will comply with those requirements, including, but not limited to, verifying the eligibility for employment of all agents, employees, subcontractors and consultants whose services are required by this Agreement. 18. DISCRIMINATION AND HARASSMENT PROHIBITED Contractor will comply with all applicable local, state and federal laws and regulations prohibiting discrimination and harassment 19. DISPUTE RESOLUTION If a dispute should arise regarding the performance of the Services the following procedure will be used to resolve any questions of fact or interpretafion not otherwise setfied by agreement between the parties. Representafives of Contractor or City will reduce such questions, and their respective views, to writing. A copy of such documented dispute will be forwarded to both parties involved along with recommended methods of resolufion, which would be of benefit to both parties. The representative receiving the letter will reply to the letter along with a recommended method of resolufion within ten (10) business days. Ifthe resolufion thus obtained is unsatisfactory to the aggrieved party, a letter oufiining the disputes will be fonwarded to the City Manager. The City Manager will consider the facts and solufions recommended by each party and may then opt City Attorney Approved Version 1/30/13 to direct a solufion to the problem. In such cases, the acfion of the City Manager will be binding upon the parties involved, although nothing in this procedure will prohibit the parties from seeking remedies available to them at law. 20. TERMINATION In the event of the Contractor's failure to prosecute, deliver, or perform the Services. City may terminate this Agreement for nonperformance by notifying Contractor by certified mail of the terminafion. If City decides to abandon or indefinitely postpone the work or services contemplated by this Agreement, City may terminate this Agreement upon written notice to Contractor. Upon notification of terminafion. Contractor has five (5) business days to deliver any documents owned by City and all work in progress to City address contained in this Agreement. City will make a determination of fact based upon the work product delivered to City and ofthe percentage ofwork that Contractor has performed which is usable and of worth to City in having the Agreement completed. Based upon that finding City will determine the final payment ofthe Agreement. Either party upon tendering thirty (30) days written notice to the other party may terminate this Agreement. In this event and upon request of City, Contractor will assemble the work product and put it in order for proper filing and closing and deliver it to City. Contractor will be paid for work performed to the termination date; however, the total will not exceed the lump sum fee payable under this Agreement. City will make the final determinafion as to the portions of tasks completed and the compensation to be made. 21. COVENANTS AGAINST CONTINGENT FEES Contractor warrants that Contractor has not employed or retained any company or person, other than a bona fide employee working for Contractor, to solicit or secure this Agreement, and that Contractor has not paid or agreed to pay any company or person, other than a bona fide employee, any fee, commission, percentage, brokerage fee, gift, or any other considerafion contingent upon, or resulting from, the award or making of this Agreement. For breach or violation of this warranty, City will have the right to annul this Agreement without liability, or. in its discrefion, to deduct from the Agreement price or consideration, or otherwise recover, the full amount of the fee, commission, percentage, brokerage fees, gift, or confingent fee. 22. CLAIMS AND LAWSUITS By signing this Agreement, Contractor agrees that any Agreement claim submitted to City must be asserted as part of the Agreement process as set forth in this Agreement and not in anficipation of lifigation or in conjuncfion with litigafion. Contractor acknowledges that tf a false claim is submitted to City, it may be considered fraud and Contractor may be subject to criminal prosecufion. Contractor acknowledges that California Government Code secfions 12650 et seg.. the False Claims Act applies to this Agreement and, provides for civil penalties where a person knowingly submits a false claim to a public entity. These provisions include false claims made with deliberate ignorance of the false information or in reckless disregard of the truth or falsity of information. If City seeks to recover penalties pursuant to the False Claims Act, it is enfified to recover its litigation costs, including attorney's fees. Contractor acknowledges that the filing of a false claim may subject Contractor to an administrafive debarment proceeding as the result of which Contractor may be prevented to act as a Contractor on any public work or improvement for a period of up to five (5) years. Contractor acknowledges debarment by another jurisdicfion is grounds for City to terminate this Agreement. City Attomey Approved Version 1/30/13 23. JURISDICTIONS AND VENUE Any acfion at law or in equity brought by either of the parties for the purpose of enforcing a right or rights provided for by this Agreement will be tried in a court of competent jurisdiction in the County of San Diego, State of California, and the parties waive all provisions of law providing for a change of venue in these proceedings to any other county. 24. SUCCESSORS AND ASSIGNS It is mutually understood and agreed that this Agreement will be binding upon City and Contractor and their respecfive successors. Neither this Agreement nor any part of rt nor any monies due or to become due under it may be assigned by Contractor wrthout the prior consent of City, which shall not be unreasonably withheld. 25. ENTIRE AGREEMENT This Agreement, together with any other written document referred to or contemplated by it, along with the purchase order for this Agreement and its provisions, embody the enfire Agreement and understanding between the parties relating to the subject matter of it. In case of conflict, the terms of the Agreement supersede the purchase order. Nerther this Agreement nor any of its provisions may be amended, modified, waived or discharged except in a writing signed by both parties. 26. AUTHORITY The individuals execufing this Agreement and the instruments referenced in it on behatf of Contractor each represent and warrant that they have the legal power, right and actual authority to bind Contractor to the terms and conditions of this Agreement. CONTRACTOR CITY OF CARLSBAD, a municipal corporafion of the State of California By: • (sign here) -City Managor or Mayor or Division Director as authorized by the City Manager (print name/fitle) ATTEST: By: (sign here) BARBARA 5N(SLES0N City Clerk (print name/title) City Attorney Approved Version 1/30/13 If required by City, proper notarial acknowledgment of execufion by contractor must be attached. If a corporafion. Agreement must be signed by one corporate officer from each of the following two groups. Group A Group B Chairman. Secretary. President, or Assistant Secretary, Vice-President CFO or Assistant Treasurer Otherwise, the corporafion must attach a resolufion certified by the secretary or assistant secretary under corporate seal empowering the officer(s) signing to bind the corporafion. APPROVED AS TO FORM: CELIA A. BREWER. City Attorney Assistant uity Attorney City Attorney Approved Version 1/30/13 Exhibit A THE CITY OF CARLSBAD The Crossings at Carlsbad (Kemper Sports) Agreed-Upon Procedures PROCEDURES 1. Contractor will obtain Kemper Sports' policies and procedures over the accounting transactions at The Crossings at Carisbad. 2. Contractor will interview Kemper Sports' staff involved in processing and reviewing accounting transactions for the purposes of understanding the current system of internal controls. This evaluation will cover the following accounting cycles: a. Cash receipting b. Inventory c. Gift certificates d. Petty cash, tf any e. Purchasing f Cash disbursements g. Employee reimbursements h. Payroll i. Bank reconciliafions j. Financial reporting 3. Contractor will idenfify key controls noted during our interviews. Contractor will perform tests of the controls to determine tf the controls are being adhered to. Contractor will use sampling techniques to perform the test of controls, but will not perform the level of sampling required to express an opinion on the effectiveness of the controls. 4. Based on our review of the policies and procedures, inquiry, observafion, and testing of controls. Contractor will provide recommended changes to the existing policies and procedures. 5. Contractor will obtain information provided by Kemper Sports regarding the extent and results of the procedures they performed to determine tf their employee committed fraud. Contractor will evaluate the sufficiency and completeness of their procedures. Contractor may duplicate or expand their procedures based on the sufficiency of what has been done and documented. 6. Contractor will obtain accounfing system informafion for the last five years. Contractor will also obtain all bank statements for the same period. Contractor will ufilize our IDEA data mining software to compare the informafion for the purpose of identifying potential fraudulent transacfions and also for the purpose of determining tf the transacfions in the accounting system are complete and can be relied upon for other procedures. After evaluafing the results. Contractor will ask the City of Carisbad whether or not the procedures should be extended back to prior periods. a. Comparison of check numbers and amounts per accounting system matching check numbers and amounts per bank statements. City Attorney Approved Version 1/30/13 b. Comparison of total cash receipts per the accounfing system to total deposits per the bank statements. c. Comparison of total disbursements per the accounting system to total disbursements per the bank statements. d. Search for duplicate checks. For all duplicate check numbers, we will review disbursement support to determine if the transactions are fraudulent. e. Search for duplicate payment amounts. For all duplicate payment amounts. Contractor will review disbursement support to determine tf the transactions are fraudulent. 7. Contractor will use of software to evaluate payments over the last flve years by vendor. Contractor will perform an online evaluation of the more significant vendors to determine that the address on invoices agrees to the vendor's address and that the vendor appears valid. 8. Contractor will download vendor addresses and compare to Kemper Sports' employee addresses. We will also evaluate vendor addresses for PO Boxes and duplicate addresses. Contractor will invesfigate the legitimacy of the vendors identified. 9. Contractor will review a sample of payroll reports and trace all employees listed to information in their personnel files to ensure the employees exist. Contractor will evaluate employee addresses for duplicates. 10. Contractor will evaluate a sample of payroll direct deposits to determine tf there are any duplicate roufing numbers. 11. Contractor will provide you a report of our agreed-upon-procedures and the results of the procedures. ENGAGEMENT FEES Contractor estimate that its fees for the services previously outlined will range from $10,000- $20,000 depending the number of years Contractor reviews. City will only be billed for actual hours incurred for this engagement at the houriy rates indicated below: Classification Houriy Rate Shareholder $175 Senior associate 115 Staff auditor 105 Contractor fees are based upon the complexity of the work to be performed, fiming of the engagement, experience level of the personnel required, and estimates of the professional time to complete the required services. Contractor fees do not include expenses in connecfion with these services, such as for travel, copies and prinfing, postage, etc., which will be billed separately. City Attorney Approved Version 1/30/13 10 Addifionally, Contractor fees are dependent on the availability, quality, and completeness of the Responsible Party's records and, where applicable, upon the Responsible Party's personnel providing the level of assistance identified in the request list distributed at the end of our planning work (e.g. the Responsible Party's employees preparing confirmafions and schedules we request, locating documents selected by us for testing, etc.). Should Contractor assumpfions with respect to these matters be incorrect, or should the condifion of the records, degree of cooperafion, or other matters beyond Contractor's reasonable control require additional commitments by Contractor beyond those upon which Contractor's estimated fees are based. Contractor may adjust Contractor's fees and planned completion dates. If signiflcant addifional fime is necessary. Contractor will discuss it with management of City and arrive at a new fee estimate as soon as reasonably practicable. In addifion, fees for any related projects or research and/or consultation on special tiusiness or financial issues, will be billed separately from the fee referred to above and will be subject to separate arrangements. OTHER SERVICES As a result of Contractor's prior or future services. Contractor might be requested to provide infomiafion or documents to the Specified Parties or a third party in a legal, administrafive, or arbitration or similar proceeding in which Contractor is not a party, tfthis occurs, Contractor's efforts in complying with such requests will be deemed billable to City as a separate engagement. Contractor shall be entrtled to compensafion for Contractor's fime and reasonable reimbursement for Contractor's expenses (including legal fees) in complying with the request. For all requests. Contractor will observe the confidenfiality requirements of Contractor's profession and will notify management of City promptly of the request. City Attorney Approved Version 1/30/13 11 Mayer Hoffman McCann P.C, Board Resolution The undersigned, being all members ofthe Board of Directors of Mayer Hoffman McCann P.C, a Missouri professional corporation "the Corporation", do hereby approve and adopt the following resolution: RESOLVED, that the shareholders of Mayer Hoffman McCann P.C. as listed below are hereby authorized to sign and execute contracts to provide professional services on behatf of the Corporation. 1. Ken Al-lmam 2. Marcus Davis 3. Ron Rolwes 4. Jennifer Farr 5. Sam Perera 6. Laurie Hopkins 7. Bill Tapp 8. Bruce Murphy 9. Laura Brock 10. Jay Webber IN WITNESS WHEREOF, the undersigned have hereunto subscribed their names effective as of Februarv 18, 2014. Paul Nation Richard Angell Richard A. Howard en Stephen Leff