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HomeMy WebLinkAboutC-2529SERVICE AGREEMENT FINANCIAL AUDIT SERVICES This Service Agreement (hereinafter "Agreement ") is made and entered into on this 10 0day of June, 2010 by and between the CITY OF ARCADIA, a charter city organized under the Constitution and laws of the State of California with its principal place of business at 240 West Huntington Drive, Arcadia, California 91066 -6021 (hereinafter "City "), and CAPORICCI & LARSON, Inc. with its principal place of business at 5 Park Plaza, Suite 700, Irvine, CA 92614 (hereinafter "Auditor "). City and Auditor may be individually referred to as "Party" and collectively referred to herein as "Parties." ItrillV :1161 A. The City requires professional audit services to be performed at or in connection with the audit of the City's financial statements. B. The Auditor has represented to City that the Auditor is qualified to perform said services and has submitted a proposal to City for same. C. The City desires to have the Auditor perform said services on the terms and conditions set forth herein for a period of one (1) year, expiring with the completion of fiscal year 2009 -10 audit service, with options to extend for four (4) additional years. NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND CONDITIONS IDENTIFIED HEREIN, THE PARTIES HEREBY AGREE AS FOLLOWS: 1. SCOPE OF SERVICES. Auditor shall perform the services described in Exhibit "A," attached hereto and incorporated herein by reference, in accordance with the terms and conditions contained in this Agreement. 2. PAYMENT. 3(A). Billing. In order to request payment, Auditor shall submit invoices to City identifying the services performed and the charges therefor. City shall make payments to Auditor for services which are performed in accordance with this Agreement, to the satisfaction of City. 3(B). "Not to Exceed" Compensation. The compensation payable to Auditor for the services identified in Exhibit "A" shall not exceed $37,600. Auditor shall not perform any services beyond the services identified in Exhibit "A" without prior written authorization from City's Authorized Representative. 3(C). Auditor's Failure to Perform. In the event that Auditor performs services which do not comply with the requirements of this Agreement, Auditor shall, upon receipt of written notice from City, re- perform the services (without additional compensation to Auditor). If Auditor's failure to perform in accordance with this Agreement causes damages to City, Auditor shall reimburse City for the damages incurred (which may be charged as an offset to Auditor's payment). CITY OF ARCADIA SERVICE AGREEMENT FINANCIAL AUDIT SERVICES Page 2 3. AUTHORIZED REPRESENTATIVES. 3(A). Auditor's Authorized Representative. Auditor understands that, in entering into this Agreement, City has relied upon Auditor's ability to perform in accordance with its representations regarding the qualifications of Auditor (including the qualifications of its Authorized Representative, its personnel, and its subconsultants, if any). Therefore, Auditor shall not replace its Authorized Representative without the prior written consent of City. All services under this Agreement shall be performed by, or under the direct supervision of, Consultant's Authorized Representative. 3(B). City's Authorized Representative. For the performance of services under this Agreement, Auditor shall take direction from City's Authorized Representative, Emily Lin, Accounting Manager, unless otherwise designated in writing by City's Authorized Representative or the City Manager. 4. INFORMATION AND DOCUMENTATION. 4(A). Information from City. City has made an effort to provide Auditor with all information necessary for Auditor's performance of services under this Agreement. If Auditor believes additional information is required, Auditor shall promptly notify City, and City will provide to Auditor all relevant non - privileged information in City's possession. 4(B). Auditor's Accounting Records. Auditor shall maintain all documents that support auditor's costs and expenses related to this Agreement, including personnel, subconsultant invoices and payments, and reimbursable expenses for a period of no less than 4 years. These documents shall be made available to City within a reasonable time after City's request, during normal business hours. 4(C). Ownership of Work Product. All workpapers prepared by Auditor (including its employees and subconsultants) for this Agreement ( "work product "), whether complete or in progress, are the properties of the Auditor. Auditor shall not reveal the work product, or make it available, to any third party without the prior written consent of the City. CITY OF ARCADIA SERVICE AGREEMENT FINANCIAL AUDIT SERVICES Page 3 5. RELATIONSHIP BETWEEN THE PARTIES. Auditor is, and at all times shall remain, an independent contractor solely responsible for all acts of its employees, agents, or subconsultants, including any negligent acts or omissions. Auditor is not City's agent, and shall have no authority to act on behalf of City, or to bind City to any obligation whatsoever, unless City provides prior written authorization to Auditor. Auditor is not an officer or employee of City, and Auditor shall not be entitled to any benefit, right, or compensation other than that provided in this Agreement. 6. CONFLICTS OF INTEREST PROHIBITED. Auditor (including its employees, agents, and subconsultants) shall not maintain or acquire any direct or indirect interest that conflicts with the performance of this Agreement. Auditor shall comply with all requirements of the Political Reform Act (California Government Code sections 81000, et seq.) and other laws relating to conflicts of interest, including: (a) Auditor shall not make or participate in a decision made by City if it is reasonably foreseeable that the decision may have a material effect on Auditor's economic interest, and (b) if required by law, Auditor shall file financial disclosure forms with the City Clerk. If Auditor maintains or acquires a conflicting interest, any contract with City (including this Agreement) involving Auditor's conflicting interest may be terminated by the City. 7. NONDISCRIMINATION. Auditor shall not discriminate against any person related to the performance under this Agreement (including any employee or applicant) because of race, color, religious creed, national origin, physical disability, mental disability, medical condition, marital status, sexual orientation, or sex. 8. COMPLIANCE WITH LAW AND STANDARD OF CARE. Auditor shall comply with all applicable legal requirements including all federal, state, and local laws (including ordinances and resolutions), whether or not said laws are expressly stated in this Agreement. Auditor shall perform services under this Agreement using a standard of care equal to, or greater than, the degree of skill and diligence ordinarily used by reputable professionals, with a level of experience and training similar to Auditor, performing under circumstances similar to those required by this Agreement. 9. BUSINESS LICENSE. Auditor shall apply for and pay the business tax and registration tax for a business license, in accordance with Arcadia Municipal Code. CITY OF ARCADIA SERVICE AGREEMENT FINANCIAL AUDIT SERVICES Page 4 10. INSURANCE. Auditor shall, throughout the duration of this Agreement, maintain insurance to cover Auditor (including its agents, representatives, subconsultants, and employees) in connection with the performance of services under this Agreement. This Agreement identifies the minimum insurance levels with which Auditor shall comply; however, the minimum insurance levels shall not relieve Auditor of any other performance responsibilities under this Agreement (including the indemnity requirements), and Auditor may carry, at its own expense, any additional insurance it deems necessary or prudent. Concurrently with the execution of this Agreement by Auditor, and prior to the commencement of any services, Auditor shall furnish written proof of insurance (certificates and endorsements), in a form acceptable to City. Auditor shall provide substitute written proof of insurance no later than 30 days prior to the expiration date of any insurance policy required by this Agreement. 10(A). Minimum Insurance Levels. Auditor shall maintain insurance at the following minimum levels: 10(A)(1). Commercial General Liability coverage in an amount not less than $1,000,000 general aggregate and $1,000,000 per occurrence for general liability, bodily injury, personal injury, and property damage. 10(A)(2). Automobile Liability coverage in an amount not less than $1,000,000 per accident for bodily injury and property damage. 10(A)(3). Workers' Compensation coverage as required by the State of California. 10(A)(4). Professional Liability coverage for damages that may be the result of errors, omissions, or negligent acts of Auditor in an amount not less than $1,000,000 per claim. CITY OF ARCADIA SERVICE AGREEMENT FINANCIAL AUDIT SERVICES Page 5 10(B). Endorsements. The insurance policies shall be endorsed as follows: 10(B)(1). For the commercial general liability insurance, City (including its elected officials, employees, and agents) shall be named as additional insured. 10(B)(2). Auditor's insurance is primary to any other insurance available to City with respect to any claim arising out of this Agreement. Any insurance maintained by City shall be excess of Auditor's insurance and shall not contribute with it. 10(B)(3). Auditor's insurance will not be canceled, limited, or allowed to expire without renewal until after 30 days written notice has been given to City. 10(C). Qualifications of Insurers. All insurance companies providing coverage to Auditor shall be insurance organizations authorized by the Insurance Commissioner of the State of California to transact the business of insurance in the State of California. 11. INDEMNIFICATION. Auditor shall indemnify, hold harmless, and defend City (including its elected officials, officers, agents and employees) from and against any and all claims (including all litigation, demands, damages, liabilities, costs, and expenses, and including court costs and attorney's fees) resulting or arising from performance, or failure to perform, under this Agreement. 12. TERM OF THE AGREEMENT. The term of this Agreement shall commence as the date the agreement is executed, and shall continue until completion of all services required for the fiscal year ending June 30, 2010 and in accordance with the timing requirements set forth in the City's Request for Proposal for financial auditing services dated April 2, 2010. The term of this agreement includes an option to renew for four subsequent years. This Agreement may be terminated by either party without cause upon fifteen (15) days written notice. If City exercises its right to terminate this Agreement in accordance with this paragraph, City shall pay Auditor for all services satisfactorily performed in accordance with this Agreement, through and including the date of termination, but not to exceed the payments according to the rates specified in Exhibit "A" or the maximum amount authorized under paragraph 2 of this Agreement. CITY OF ARCADIA SERVICE AGREEMENT FINANCIAL AUDIT SERVICES Page 6 13. DEFAULT. If either party ( "demanding party ") has a good faith belief that the other party ( "defaulting party ") is not complying with the terms of this Agreement, the demanding party shall give written notice of the default (with reasonable specificity) to the defaulting party, and demand the default to be cured within ten days of the notice. If: (a) the defaulting party fails to cure the default within ten days of the notice, or, (b) if more than ten days are reasonably required to cure the default and the defaulting party fails to give adequate written assurance of due performance within ten days of the notice, then (c) the demanding party may terminate this Agreement upon written notice to the defaulting party. 14. NOTICES. All notices required or contemplated by this Agreement shall be in writing and shall be delivered to the respective party as set forth in this section. Communications shall be deemed to be effective upon the first to occur of: (a) actual receipt by a party's Authorized Representative, or (b) actual receipt at the address designated below, or (c) three working days following deposit in the United States Mail of registered or certified mail sent to the address designated below. The Authorized Representative of either party may modify their respective contact information identified in this section by providing notice to the other party. To: City Attn: Hue C. Quach City of Arcadia 240 West Huntington Drive, Arcadia, CA 91066 -6021 To: Auditor Attn: Gary Caporicci Caporicci & Larson, Inc. 5 Park Plaza #700 Irvine, CA 92614 15. HEADINGS. The heading titles for each paragraph of this Agreement are included only as a guide to the contents and are not to be considered as controlling, enlarging, or restricting the interpretation of the Agreement. 16. SEVERABILITY. If any term of this Agreement (including any phrase, provision, covenant, or condition) is held by a court of competent jurisdiction to be invalid or unenforceable, the Agreement shall be construed as not containing that term, and the remainder of this Agreement shall remain in full force and effect; provided, however, this paragraph shall not be applied to the extent that it would result in a frustration of the parties' intent under this Agreement. CITY OF ARCADIA SERVICE AGREEMENT FINANCIAL AUDIT SERVICES Page 7 17. GOVERNING LAW, JURISDICTION, AND VENUE. The interpretation, validity, and enforcement of this Agreement shall be governed by and interpreted in accordance with the laws of the State of California. Any suit, claim, or legal proceeding of any kind related to this Agreement shall be filed and heard in a court of competent jurisdiction in the County of Los Angeles. 18. ATTORNEY'S FEES. In the event any legal action is commenced to enforce this Agreement, the prevailing party is entitled to reasonable attorney's fees, costs, and expenses incurred. 19. ASSIGNMENT AND DELEGATION. This Agreement, and any portion thereof, shall not be assigned or transferred, nor shall any of Auditor's duties be delegated, without the written consent of City. Any attempt to assign or delegate this Agreement without the written consent of the City shall be void and of no force or effect. A consent by the City to one assignment shall not be deemed to be a consent to any subsequent assignment. 20. MODIFICATIONS. This Agreement may not be modified orally or in any manner other than by an agreement in writing signed by both parties. 21. WAIVERS. Waiver of a breach or default under this Agreement shall not constitute a continuing waiver or a waiver of a subsequent breach of the same or any other provision of this Agreement. 22. ENTIRE AGREEMENT. This Agreement, including all documents incorporated herein by reference, comprises the entire integrated understanding between the parties concerning the services described herein. This Agreement supersedes all prior negotiations, agreements, and understandings regarding this matter, whether written or oral. The documents incorporated by reference into this Agreement are complementary; what is called for in one is binding as if called for in all. CITY OF ARCADIA SERVICE AGREEMENT FINANCIAL AUDIT SERVICES Page 8 23. SIGNATURES. The individuals executing this Agreement represent and warrant that they have the right, power, legal capacity, and authority to enter into and to execute this Agreement on behalf of the respective legal entities of the Auditor and the City. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. IN WITNESS WHEREOF, City and Auditor do hereby agree to the full performance of the terms set forth herein. CITY OF ARCADIA AUDITOR Caporicci & Larson, Inc. By: By: Donald Penman Gary C9&ricci City Manager Principal Date: (.1 1 4 1y Date: ATTEST: tI ,tr � 1 APPROVED AS TO FORM: CONCUR: ��� C", 4&5t� Stephen P. Deitsch Hue C. ch City Attorney Administrative Services Director CITY OF ARCADIA SERVICE AGREEMENT FINANCIAL AUDIT SERVICES Page 9 EXHIBIT A SCOPE OF SERVICES a. Auditor will perform an audit of all funds of the City of Arcadia. The audit will be conducted in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, issued by the Comptroller of the United States. b. The City's Comprehensive Annual Financial Report (CAFR) will be prepared and word processed by the Auditor. Auditor will render their auditors' report on the basic financial statements which will include both Government -Wide Financial Statements and Fund Financial Statements. Auditor will also apply limited audit procedures to Management's Discussion and Analysis (MD &A) and required supplementary information (RSI) required by the Governmental Accounting Standards Board as mandated by generally accepted auditing standards. c. Auditor will conduct a financial and compliance audit of the Arcadia Redevelopment Agency. The compliance audit shall include the provisions of laws and regulations identified in the Guidelines for Compliance Audits of California Redevelopment Agencies, issued by the State Controller. d. When required, Auditor will perform a single audit on the expenditures of federal grants in accordance with OMB Circular A -133 and render the appropriate audit reports on Internal Control over Financial Reporting based upon the audit of the City's financial statements in accordance with Government Auditing Standards and the appropriate reports on compliance with Requirements Applicable to each Major Program, Internal Control over Compliance and on the Schedule of Expenditures of Federal Awards in Accordance with OMB Circular A -133. The single audit report will include appropriate schedule of expenditures of federal awards, footnotes, findings and questioned costs, including reportable conditions and material weaknesses, and follow up on prior audit findings where required. e. Auditor will prepare a financial report in accordance with the SCAG Guide to the Transportation Development Act Program and other pertinent state requirements for inclusion in a separate annual report on Transportation Development Act Funds. f. Auditor will prepare the annual report of Financial Transactions to the State Controller's office, also referred to as the State Controller's Report for the City of Arcadia and the Arcadia Redevelopment Agency. g. Auditor shall perform agreed -upon auditing procedures pertaining to the City's GANN Limit (Appropriations Limit) and render a letter annually to the City regarding compliance. h. Submit a report on Auditor's examination of the City's financial statements for the fiscal year which will express an opinion as to the fairness of their presentation in conformity with generally accepted accounting principles applicable to the various funds of the City, or state the reasons for any exceptions to said principles. This opinion is in support of the Comprehensive Annual Financial Report of the City. L Auditor will identify and evaluate the City's internal control over financial reporting and report in writing to the City Council any control deficiencies found during the audit that are considered significant deficiencies and /or material weaknesses based on the standards and guideline established by Statement on Auditing Standards (SAS) No. 115, Communicating Internal Control Related Matters Identified in an Audit. j. Auditor shall communicate with the City Council matters related to the financial statement audit, in the auditor's professional judgment, significant and relevant to the governing body, according to the standards and guideline established by Statement on Auditing Standard (SAS) No. 114, The Auditor's Communication With Those Charged With Governance k. Auditor shall provide full report production responsibility of the City's Comprehensive Annual Financial Report. Single Audit report, Redevelopment Agency and Transit District Authority Financial Report. 1. Auditor may be consulted throughout the year as an information resource and may be asked to provide guidance on implementing Federal and State regulations as they may affect local government accounting.