HomeMy WebLinkAboutItem 3i: Agreement with Pun & McGeady for Financial Auditing Services ell pp"!
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�RI'�RATEp- STAFF REPORT
Administrative Services Department
DATE: June 19, 2012
TO: Mayor and City Council
FROM: Hue C. Quach, Administrative Services Director
Shannon Huang, Financial Services Manager/City reasurer ; )
SUBJECT: AUTHORIZE THE CITY MANAGER TO EXECUTE A PROFESSIONAL
SERVICES AGREEMENT IN THE AMOUNT OF $37,600 WITH PUN &
MCGEADY LLP FOR THE CITY'S FINANCIAL AUDITING SERVICE FOR
THE FISCAL YEAR ENDING JUNE 30, 2012
Recommendation: Approve
SUMMARY
In 2010, the City Council approved an auditing service contract including a four year
renewal option with Caporicci & Larson who was selected through request for proposal
(RFP) processes in 2010. Recently, a notice of transfer was announced that the City's
account will be handled by Pun & McGeady LLP, a new firm established by Caporicci &
Larson's former managing partner who was responsible for the City's engagement in
the past two fiscal years. Typically, a change such as this where service may be
affected, an RFP would be considered. However, as the auditing partner will continue
to manage the City's account and those services provided in past years have been
satisfactory, it is recommended that the City exercise the option to renew the auditing
services agreement with Pun & McGeady for the fiscal year ending June 30, 2012 at the
cost of $37,600, an amount similar to the prior two fiscal years.
DISCUSSION
The City Charter requires an annual audit of the City's financial statements by an
independent Certified Public Accountant. In March of 2010, staff solicited proposals
from qualified certified public accounting firms to audit the City's financial statements for
the fiscal year ending June 30, 2010 through June 30, 2014. Among the nine
proposals received, Caporicci & Larson was the lowest bidder and was granted with the
auditing contract for Fiscal Year 2009-10, including four (4) one-year contract
extensions. This is a typical provision in audit service agreements, which provides for
continuity for a period of time, but also allows the City to not extend the agreement
should the City Council want to make changes.
Professional Services Agreement with Pun & McGeady for City Financial Auditing
Service for the fiscal year Ending June 30, 2012
June 19, 2012
Page 2 of 2
Recently, the City has been notified that the auditing partner who has been responsible
for the City engagement since 2009 has started his own firm, Pun & McGeady, LLP,
and has assumed the contractual right to the City's auditing contract. With
organizational changes similar to this, there may be concerns for the continuity of
auditing staff that has worked with the City and considerations to go out for request for
proposal may be appropriate. However, as the managing partner of the new firm will
continue to retain the City's account, responsiveness and delays are not expected as
services provided in past years have been satisfactory and without delays in completing
the City's annual financial reports. Nonetheless, their deliverance of service for the
proposed year will be monitored with the expectation of equal or higher service level
than the past year. Should it becomes necessary, the process to prepare a request for
proposal for the City's auditing services for Fiscal Year 2012-13 can be accomplished in
January 2013.
It is recommended that the City Council approve the one year contract with Pun &
McGeady LLP for the fiscal year ending June 30, 2012 at the cost of $37,600, an
amount similar to the past two fiscal years.
FISCAL IMPACT
The auditing contract is $37,600 and funded accordingly: General Fund - $29,126;
Arcadia Transit - $1,538; and Successor Agency - $6,936.
Sufficient funds are budgeted in the proposed 2012-13 budget for this obligation.
RECOMMENDATION
It is recommended the City Council authorize. the City Manager to execute a
Professional Services Agreement with Pun & McGeady for the City's financial auditing
service for the fiscal year ending June 30, 2012.
Approved:
•
Dominic Lazzaretto
City Manager