HomeMy WebLinkAbout06 APPROVE AGREEMENT WITH DIEHL, EVANS, AND CO• Agenda Item 6
AGENDA REPORT Reviewed:
City Manager
Finance Director
MEETING DATE: JUNE 7, 2011
TO: WILLIAM A. HUSTON, INTERIM CITY MANAGER
FROM: PAMELA ARENDS-KING, FINANCE DIRECTOR
SUBJECT: APPROVE AGREEMENT FOR INDEPENDENT AUDIT SERVICES
SUMMARY:
The City sent Request for Proposals (RFP) to independent certified public accounting
firms to audit its financial statements through the fiscal year ending June 30, 2013, with
the option of auditing its financial statements for each of the two subsequent fiscal
years. The Audit Commission reviewed the RFP's submitted and selected Diehl, Evans
& Company, LLC (Diehl Evans) as the firm that should complete the auditing services.
RECOMMENDATION:
It is recommended, based on the advisement of the Audit Commission, that the City
Council contract with Diehl Evans as the independent certified public accounting firm to
audit its financial statements through the fiscal year ending June 30, 2013, with the
option of auditing its financial statements for each of the two subsequent fiscal years.
Staff also requests Council approve and authorize the City Manager to execute an
agreement subject to the City Attorney's approval, between the City and Diehl Evans for
the services recommended.
FISCAL IMPACT:
The fees for the annual audit services are not to exceed $48,835.00 for each of the fiscal
years audited through June 30, 2013. If the two subsequent fiscal years are audited the
fees for fiscal year 2013/2014 are not to exceed $49,811.00 and for fiscal year 2014/2015
not to exceed $50,807.00. The allocation of the annual auditing fees is 60% to the General
Fund; 15% to the Water Enterprise Fund; and 25% to the three Redevelopment Project
Areas.
BACKGROUND:
For the past six fiscal years the annual audits were completed by Macias, Gini &
O'Connell LLP. It is the City's practice to change audit firms every five to six years,
therefore the Audit Commission and the Finance Department developed an RFP that
was sent to six independent auditing firms, Bonnie, Hopkins &Bastardi, LLP; Caporicci
& Larson, Inc.; Diehl, Evans & Company, LLP; Lance, Soll & Lunghard, CPA's LLP;
Macias, Gini & O'Connell, LLP; and Rogers, Anderson, Malody & Scott, LLP. Of the six
firms, Bonnie, Hopkins &Bastardi, LLP and Caporicci & Larson, Inc., did not submit a
APPROVE AGREEMENT FOR INDEPENDENT AUDIT SERVICES
JUNE 7, 2011 PAGE 2
proposal. The Audit Commission reviewed each proposal and awarded points to each
firm based on predefined qualifications. The cost for services bids were submitted in
sealed envelopes and not opened by the Audit Commission until the proposals were
discussed at the March 24, 2011 Audit Commission special meeting. Representatives
from each firm that submitted a proposal were present at that meeting to make a
presentation and answer any questions the Commissioners may have had. Diehl Evans
was the highest scoring firm.
Diehl Evans is a large regional full service Certified Public Accounting firm that has
been in existence for more than 80 years. It has offices in Irvine, Carlsbad and
Escondido California. The firm has devoted a large portion of its practice to providing
professional. services to governmental agencies since 1950. The scope of services the
firm will complete for the three years ending June 30, 2013 are the annual financial
audit of the basic financial statements in accordance with Governmental Auditing
Standards; preparation of the City's Comprehensive Annual Financial Report (CAFR); a
management letter under Statements of Auditing Standards No. 115; a report under
Statements of Auditing Standards No. 114; a financial and compliance audit of the
Tustin Redevelopment Agency; a Single Audit of Federal Grants to be performed to
meet the requirement of the U.S. Office of Management and Budget (OMD) Circular A-
133; review of the calculation of the City's GANN Appropriations Limit (GANN) as
required by Section 1.5 of the Article XIIIB of the California Constitution; and the
preparation of the State Controller's Reports for the City of Tustin and the Tustin
Redevelopment Agency.
Pamela Arends-King
Finance Director