HomeMy WebLinkAbout2012-04-10; City Council; 20870; Selection of Mayer Hoffman McCann for Financial AuditCITY OF CARLSBAD - AGENDA BILL
AB# 20,870
SELECTION OF MAYER HOFFMAN
McCANN P.C. FOR FINANCIAL AUDIT
DEPT. HEAD
MTG. 04/10/12 SELECTION OF MAYER HOFFMAN
McCANN P.C. FOR FINANCIAL AUDIT CITY ATTY. (
DEPT. FIN
SELECTION OF MAYER HOFFMAN
McCANN P.C. FOR FINANCIAL AUDIT CITY MGR. 7^
RECOMMENDED ACTION:
Adopt Resolution No. 2012-087 authorizing the City of Carlsbad to enter into an agreement with
the audit firm of Mayer Hoffman McCann Professional Corporation to perform the city's financial
audits for fiscal years 2011-12 through 2015-16.
ITEM EXPLANATION:
The city retained the certified public accounting firm of Mayer Hoffman McCann Professional
Corporation to perform audit services for the last five (5) years. The Finance Department has
been pleased with their services, but periodically it is appropriate and recommended to consider
changing auditors to assure service, independence and quality of the audit. Best audit
practices recommend that the city periodically receive proposals from other audit firms, but
select the firm best suited for the city. Requests for proposals (RFPs) were solicited from
sixteen (16) firms with the following ten (10) firms responding with a proposal:
Moss Adams LLP
Macias, Gini & O'Connell, LLP
McGladrey & Pullen, LLP
Sonnenberg & Company CPAs
Christy White Accountancy Corporation
Moss, Levy & Hartzheim, LLP
Mayer Hoffman McCann P.C.
White Nelson Diehl Evans LLP
Rogers, Anderson, Molody & Scott, LLP
Brown Armstrong Accountancy Corporation
An audit selection committee, consisting of four (4) personnel from the Finance Department,
examined the RFPs for firm and staff qualifications, experience, audit approach, expertise in
governmental auditing, and experience in providing on-going financial consulting services to
municipalities. The top three (3) firms were interviewed by the selection committee. Upon
completion of the selection process, the committee is recommending Mayer Hoffman McCann,
P.C.
DEPARTMENT CONTACT: Kevin Branca 760-602-2430 kevin.branca(5jcarlsbadca.aov
FOR CITY CLERKS USE ONLY.
COUNCIL ACTION: APPROVED CONTINUED TO DATE SPECIFIC •
DENIED • CONTINUED TO DATE UNKNOWN •
CONTINUED • RETURNED TO STAFF •
WITHDRAWN • OTHER-SEE MINUTES •
AMENDED •
Page 2
Mayer Hoffman McCann P.C. has an audit practice predominately focused on local government
auditing and has done an outstanding job performing the city's various audits during the past
five (5) fiscal years. Mayer Hoffman McCann P.C. is a national practice with 35 offices
throughout the United States, is licensed in all 50 states with approximately 2,000 accounting
and audit professionals, and is one of the ten (10) largest accounting firms in the nation. Their
Western Region Office consists of nine (9) offices, which includes Irvine, San Diego, and Los
Angeles. The audit team will consist of individuals from the Irvine office. The review committee
felt their combination of local experience and resources along with prior working knowledge of
the City of Carlsbad would provide the City of Carlsbad with the highest level of capabilities by
an audit firm to conduct a thorough audit of the City of Carlsbad's records and additionally
provide a well-trained and qualified staff with which to work with.
FISCAL IMPACT:
Although cost was not a primary factor in the selection, bids for fiscal year 2011-12 ranged from
$62,000 to $125,000. Mayer Hoffman McCann P.C.'s bid for fiscal year 2011-12 is $81,000;
and total cost for the five (5) fiscal years is $425,745. Sufficient funds are available in the
current budget to cover the fiscal year 2011-12 costs. Audit costs for the remaining four years
will be budgeted in the future years' budgets. Although these costs include the costs
associated with the audit of the successor agency of the city's redevelopment agency, if
separately issued financial statements are not required for the successor agency, these costs
will not be incurred by the city.
EXHIBITS:
1. Resolution No. 2012-087 authorizing the selection of the audit firm of Mayer Hoffman
McCann P.C. to perform the financial audit.
2. Agreement with Mayer Hoffman McCann P.C.
1 RESOLUTION NO. s)ni7-nR7
2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, AUTHORIZING THE
SELECTION OF MAYER HOFFMAN McCANN P.C. TO
4 PERFORM THE FINANCIAL AUDITS FOR FISCAL YEARS
2011-12, 2012-13, 2013-14, 2014-15, AND 2015-16.
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6 WHEREAS, the audit of the City of Carlsbad financial records is required by the
7 City Council: and
WHEREAS, bids from certified public accounting firms have been solicited,
accepted, and evaluated; and
WHEREAS, Mayer Hoffman McCann P.C. has been determined to be the most
qualified at a reasonable cost; and
WHEREAS, sufficient funds are available in the current 2011-12 Operating
Budget.
15 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
16 Carlsbad, California, as follows:
1. That the above recitations are true and correct.
2. The public accounting firm of Mayer Hoffman McCann P.C. is selected to
perform the financial audits of fiscal years 2011-12 through 2012-16, and
3. That the agreement between Mayer Hoffman McCann P.C. and the City of
Carlsbad is hereby approved and the Mayor is hereby authorized and directed to
23 execute said agreement.
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1 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council
2 of the City of Carlsbad on the 10**^ day of April, 2012, by the following vote to wit:
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AYES: Council Members Hall, Kulchin, Blackburn and Douglas.
NOES: Council Member Packard.
ABSENT: None.
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11 MATT HALL, Mayor
^2 ATTEST:
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LORRAINE M. WOOD, City Clerk
(SEAL) M^^.o-'.
AGREEMENT FOR AUDITING SERVICES
MAYER HOFFMAN MCCANN P.C.
THIS AGREEMENT is made and entered into as of the day of
AprcC , 2012, 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 governmental auditing.
B. Contractor has the necessary experience in providing professional services and
advice related to governmental auditing.
C. Contractor has submitted a proposal to City and has affirmed its willingness and
ability to perform such work.
NOW, THEREFORE, in consideration 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 with this Agreement's terms and conditions.
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.
3. TERM
The term of this Agreement will be effective for a period of five years 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 Agreement term shall not
exceed four hundred twenty-five thousand, seven hundred and forty-five dollars ($425,745.00)
and shall be payable per Agreement year as further described in Exhibit "A" under heading
entitled: Total All-inclusive Price. 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%) retention until City has accepted the work and/or Services
specified in Exhibit "A".
Incremental payments, if applicable, should be made as outlined in attached Exhibit "A".
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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
compensation to which Contractor is entitled. City will not make any federal or state tax
withholdings on behalf of Contractor or its agents, employees or subcontractors. City will not be
required to pay any workers' compensation insurance or unemployment contributions on behalf
of Contractor or its employees or subcontractors. Contractor agrees to indemnify City within
thirty (30) days for any tax, retirement contribution, social security, overtime payment,
unemployment payment or workers' compensation payment which City may be required to
make on behalf 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 directly or indirectly
employed by the subcontractor, as Contractor is for the acts and omissions of persons directly
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.
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 attorneys
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 behalf 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 section, and that
this section will survive the expiration or early 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 Rating of not less than "A-:Vir'. OR
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with a surplus line insurer on the State of California's List of Eligible Surplus Line Insurers
(LESLI) with a rating 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 constitute 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-limit
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 under this
Agreement or the general aggregate will be twice the required per occurrence limit.
10.1.2 Automobile Liabilitv (if the use of an automobile is involved for
Contractor's work for City). $1,000,000 combined single-limit 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' Compensation will not be required if
Contractor has no employees and provides, to City's satisfaction, a declaration stating 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.
10.2. Additional 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 additional 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 Notice provisions of this Agreement.
10.3 Providinq 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. If 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 existing policies in order to
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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. Citv 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 Carlsbad 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 clearly identifiable. Contractor will allow a representative of City
during normal business hours to examine, audit, and make transcripts or copies of records and
any other documents created pursuant to this Agreement. Contractor will allow inspection of all
work, data, documents, proceedings, and activities 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.
15. NOTICES
The name of the persons who are authorized to give written notices or to receive written notice
on behalf of City and on behalf of Contractor under this Agreement.
For Citv For Contractor
Name: Chuck McBride Name Ken Al-lmani
Title: Finance Director Title Shareholder
Department: Finance Address 2301 Dupont Dr., Suite 200
City of Carlsbad Irvine, CA 92612
Address: 1635 Faraday Avenue Phone No. 949-474-2020 Ext. 273
Carlsbad, CA 92008-7314 Email kalimam(^cbiz.com
Phone No. 760-602-2430
Each party will notify the other immediately of any changes of address that would require any
notice or delivery to be directed to another address.
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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 Carlsbad 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 regulations and will be responsible for the compliance of
Contractor's services with all applicable laws, ordinances and regulations.
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 interpretation not otherwise settled by agreement
between the parties. Representatives of Contractor or City will reduce such questions, and their
respective views, to writing. A copy of such documented dispute will be fonA/arded to both
parties involved along with recommended methods of resolution, which would be of benefit to
both parties. The representative receiving the letter will reply to the letter along with a
recommended method of resolution within ten (10) business days. If the resolution thus
obtained is unsatisfactory to the aggrieved party, a letter outlining the disputes will be fon^/arded
to the City Manager. The City Manager will consider the facts and solutions recommended by
each party and may then opt to direct a solution to the problem. In such cases, the action 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
termination. 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 termination. 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 of the
percentage of work 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 of the
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
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payable under this Agreement. City will make the final determination 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 consideration
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 discretion, to deduct from the Agreement price or consideration, or othen/vise recover, the full
amount ofthe fee, commission, percentage, brokerage fees, gift, or contingent 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
anticipation of litigation or in conjunction with litigation. Contractor acknowledges that if a false
claim is submitted to City, it may be considered fraud and Contractor may be subject to criminal
prosecution. Contractor acknowledges that California Government Code sections 12650 et seq..
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 entitled to
recover its litigation costs, including attorney's fees. Contractor acknowledges that the filing of a
false claim may subject Contractor to an administrative 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 jurisdiction
is grounds for City to terminate this Agreement.
23. JURISDICTIONS AND VENUE
Any action 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 respective successors. Neither this Agreement or any part of it nor any
monies due or to become due under it may be assigned by Contractor without 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 entire
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. Neither this Agreement nor
any of its provisions may be amended, modified, waived or discharged except in a writing
signed by both parties.
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26. AUTHORITY
The individuals executing this Agreement and the instruments referenced in it on behalf 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
corporation of the State of California
By:
(sign here)
(print name/title)
By:
(sign here)
(print name/title)
By:
Mayor "^^^9. o ^
ATTEST
LORRAINE M. WOOD
City Clerk
If required by City, proper notarial acknowledgment of execution by contractor must be
attached. If a corporation. Agreement must be signed by one corporate officer from each of the
following two groups.
Group A
Chairman,
President, or
Vice-President
Group B
Secretary,
Assistant Secretary,
CFO or Assistant Treasurer
Otherwise, the corporation must attach a resolution certified by the secretary or assistant
secretary under corporate seal empowering the officer(s) signing to bind the corporation.
APPROVED AS^ FORM:
RONALD-^ B^L, City^ttorney
assistant City Attorney
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EXHIBIT "A"
SCOPE OF SERVICiS
OUR FIRM'S UNDERSTANDING OF THE OBJECTIVES AND
SCOPE OF THE ENGAGEMENT
Our tinderstandrng of the objectives and scope of the work to be perfoimed is based upon your
request ftwr propo^«
Based upon the foregoing we tmd^stand the objectives and scope of work to be as foilows:
1. We will perform an audit examination of the CoMpreheiislve Animal Financial Report
of the City of Cailsbad fot the fiscai years ending June 30, 2012 tirough June 30, 2016.
Our examination will bei conducted in accordance with auditing standards graemlly
accepted in the United States of America and Government Auditing Standards. The
financial section of the CAFR will be drafted by City personnel. We will review the
complete CAFR for conformity with the requirements of the CAFR award programs of
GFOA. We are committeii to completing our review of this report and providing our
opinion on the same in accjordance with the City's timeline requirements.
2. We will perform a financial and compliance audit of the govemmental activities, each
major fund and the aggregate remaining fund information of the Carlsbad
Redevelopment Agency fpr the years ended June 30,2012 through 2016. Our audit will
be conducted in accordanjce witib. auditing standards generally accepted in the United
States, Govemmera Auditing Standards and the Guidelines for Compliance Audits of
Califomia Redevelopment]Agencies. The City will draft and word process the financial
statements and notes to the financial statements. The auditors will provide boimd copies
of the final report.
3. We will perform a financi^ audit ofthe Enctna Financing Joint Powers Authority for
the years ended June 30,2|012 through 2016. Our audit will be conducted in accordance
witii auditing standards geimlly accepted in the United States and Govemment Auditing
Standards. The City will (|raft and word process tiie financial statements and notes to tiie
financial statements. The auditors will provide bound copies of the final report
4. When required, we will pkform a Single Audit of the City of Carisbad m accordance
vnih the Single Audit Act Amendments of1996 (Public Law 104«156) and OMB Circular
A-133 Qn^ikd. Audits of States, Local Governments, and Non-Profits Organizations. Our
single audit will cover all! federal grants received by tiie City and its component units
either as a primary or secondary recipient The City will provide to the Auditors the
Schedule of Federal Finajncial Assistance encompassing all direct and pass-through
federal funds receive by tibe City and component units. We will reader our reports on the
single audit in accordancje witii the single audit requirements as described in this
propsal. We are committW to providinjg the requested number of copies of the single
audit report in accordancjs with the City's timeline requirements. The auditors wll
provide bound copies of th^ final rqjort.
5. We will perform a^^-up(on procedures to test and report on the City's Gann Limit for
the years ended June 30,2012 through 2016. The auditors will provide bound copies of
the final report
6. We will report instances of compliance that are det^ted by the audit faocess, as required
by Government Auditing Siandards. \T
7. We will report to the City
Auditing Standards No. 114.
8.
9.
Council the communications required by Statement on
We will prepare a letter to Ci^ Council reporting matters dealing with intemal control
that meet the threshold of beuiig significant control deficiencies (previously reportable
conditions) as defined by Statement on Auditing Standards (SAS) No. 115.
We win immediately report in
illegal acts of which we become
Diiector, as required by govemmental
writing any irregularities or illegal acts or indications of
aware to the City Council, City Manager and the Finance
~ auditing standards.
10. We will prepare a management letter. This letter will include nonreportable conditions
(tifciose constructive comments not required to be included in tiie single audit report). We
will discuss those comments with the Finance Director and otiiier appropriaie City
personnel prior to its finalizatioii.
11. Mayer HofBnan McCann P.C.|desires to keep its clioils abreast of new developments
affecting local govemment fijoance. We would plan to advise City staff of new
accounting developments duriijig the interim/planning stage of each year's au<Ht and
tiarough our annual GASB Update tiiat we provide for our clients.
12. Finally, we perceive the scope! of our work as being advisors to the City of Carlsbad.
Throi^out the year, City per^nnel will have access to fhe Engagement Shareholder,
Ken AJ-Imam, Quality ContrpI Review Shareholder, Jemiifer Farr, and Engagement
Manager, Dean Votava, to s^k advice in the application of accounting principles,
financial statement preparatioi and content and other matters relating to the City,
including matters of taxation and policy relating to City fiinge benefits.
Witii respect to tiie City of Carlsbad knd its component units, Mayer HofiOman McCann P.C.
meets the independence requirement^ of generally accepted accoimting standards and the
Govemment Auditing Standards (200& revision) published by the U.S. General Accounting
Office. Our firm has never had a recorcj of substandard audit work. No conflicts of interest exist
relative to our firm perfomiing the audit MHM does not intend to use subcontractors for this
engagement, |
TOTAL ALL-INCLUSIVE PRICE
The following is a breakout of jthe fee associated with conducting the audit of the City of
Carisbad.
Description of Sarvices
CAFR
•Carlsbad Redevelopment Agenc)
Encina Financing Joint
Powers Authority
Single Audit
GANN Limit Verification
Total All-inclusive Price
* This represents the cost to audit
be no extra charge should separate
2012 2013 2014 2015 2016
$ 59,000 60,475 61,985 63,535 65,125
7,100 7,275 7,460 7,645 7,835
6,500 6,660 6,830 7,000 7,175
7,300 7,480 7,670 7,860 8,055
1,100 1425 ^ «^ J. 3^ 1,185 1,215
mm ?3,0I5 mm 87,225 89.405
the residual activity of the redevelopment agency. There will
financial statemaits be required for the successor agency.
The above fees include an annual adjustment of 2.5%.
We will pogress bill the City fo^ the above services as the engagement hours are expended.
Final billing wiU be made upon delivery of the final audit reports. Any special projects, extra
work, accounting assistance, or su^tional assignments wUl be performoi at the standard hourly
rates indicated in the accompanyinjg fee schedule.
Our fees contemplate conditions
providing at fhe start of tiie audi
subsidiary schedules supporting
agreonent with generai ledger b
assistance is needed in preparing
would perform the same at the bo
itisfactory for the performance ofthe audit, including the City
ti trial balances reflecting all year end adjustments, necessary
as^t and liability balances, all necessary reconciliations in
jances, and customary supporting analyses and schedules. If
^ear end joumal entries or resolving reconciliation issues, we
ly rates indicated in this cost proposal.
The City will type confinnation requests. If there are changes in the scope of the audit (added
enterprise activity, additional comjnent units, new audit or accounting requirements, etc.), we
would discuss these changes with the Director of Finance and the effect of tiiese changes on the
professional audit hours and costs of the engagement. Our fixed fee pricing contemplates up to
two major programs for the single audit A price adjustment of $3,500 will be made for each
additional major program.
RATES FOR ADDITIONAL PROFESSIONAL SERVICES
The following is a summary of hourly rates for services that may be required outside the scope of
the audit for the years 2012-2016:
Classification
Shareholders
Managers
Field Managers/Senior Auditors
Staff Auditors
Honrlv
Rates
$135
125
115
105
Mayer Hoffman McCann P.C.
Board Resolution
The undersigned, being all members of the 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 behalf of the Corporation.
1. KenAI-lmam
2. Michael Harrison
3. Marcus Davis
4. Michael Gutierrez
5. Ron Rolwes
6. Jennifer Farr
7. Matthew Lenton
8. Jim Babcock
9. Benjamin Reyes
10. Sam Perera
11. Dana Basney
12. Jeffrey Baumgarten
13. James Comito
14. David Diamond
15. Steve Fanucchi
16. Robert Gellman
17. Mike Lichtenberger
18. Jim Putt
19. Stuart Starr
20. Timothy Willis
21. Laurie Hopkins
IN WITNESS WHEREOF, the undersigned have hereunto subscribed their names
effective as of March 23, 2011.
William L. Hancock Frank Maughan
Mark Garten
Paul E. Nation