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HomeMy Public PortalAbout11) 7D Approval of Fifth Amendment to the Agreement with Vavrinek, Trine, Day and CompanyAGENDA ITEM 7.0. ADMINISTRATIVE SERVICES DEPARTMENT DATE: TO: FROM : MEMORANDUM May 7 , 2019 The Honorable City Council Bryan Coo k, City Ma nager CH By : Susan Paragas , Administrative Services Director ., SUBJECT: APPROVAL OF A FIFTH AMENDMENT TO THE AGREEMENT WITH VAVRINEK, TRINE, DAY & COMPANY, LLP FOR PROFESSIONAL AUDIT SERVICES RECOMMENDATION: The City Council is reques ted to authorize the City Manager to enter into a f ifth amendment t o the agreeme nt for profess io na l aud it services w ith Vavrine k , Trin e , Day & Company , LLP (VTD ) extend ing their services for Fiscal Year (FY ) 20 18-2019 (Attachment "A "). BACKGROUND: 1. On January 6 , 2016 , the City requested p roposals from qua l ified Certified Public Accounting (CPA) firms for a three-year contract to audit its financia l statements beginning with the fisca l year ending June 30 , 2016 , wi t h the option to renew the contract for an additional two f iscal years , f or a total of 5 years . 2 . On Ap ril 5 , 2016 , the C ity Council authorized the C ity Manager to en te r into an agreement for professional audit services ("Agreement") with VTD for FY 2015-16. 3 . On April 4 , 2017, the City Council authorized t he City Manager to enter into a f i rst amendment to the Agreemen t for profess ional audit services with VTD for FY 2016- 17. 4. On April 17 , 2018 , the C ity Council authorized the City Manager to ente r into a second amendment to the Agreement for p rofessional aud it services with VTD for FY 2017-18. 5 . On January 2 , 2019 , the City Council authorized the City Manager to enter into a third amendment to the Ag reement for professional audit services w ith VTD f or the FY 2017-18 GASB 75 accounting entries and related note disclosures . City Council May 7 , 2019 Page 2 of 2 6 . On February 5 , 2019, the City Council authorized the City Manager to enter into a fourth amendment to the Agreement for professional audit services with VTD for the preparation and submission of the FY 2017-18 State Controller's Office Cit ies Financ ia l Transactions Report. ANALYSIS: In April 2016 , the City entered into the Agreement with VTD for profess iona l aud it services commencing with FY 2015-16 . The Agreement is for three (3 ) years with the ability to extend it for two (2) one-year agreements , which would be through FY 2019- 20 . Th is request applies to the first of the 2 one-year extension . It is anticipa ted that the City w i ll extend VTD 's Agreement for FY 2019-20 . Subsequently , a request for proposal will be issued to sol icit firms to provide aud it services . VTD's aud it services were satisfactory for FY 2017-18 and as a result , it is request ed that the City Council authorize the City Manager to enter into the Fifth Amendment with VTD to perform the annual independent audit for FY 2018-2019 . The scope of services is also amended to include the preparation of the GASB 75 Other Post-Employment Benefits accounting entries and related note disclosures for the City 's fi nancial statement at an additional cost of $2 ,500 . CITY STRATEGIC GOALS: Actions contained in this report al ign with the City's strategic goa l of good governance. FISCAL IMPACT: There is no fiscal impact for FY 2018-2019 as the audit costs will be budgeted in FY 2019-20 . The total estimated FY 2019-20 costs , with the Fifth Amendment , shall not exceed $58 ,730 . ATTACHMENT(S): A . Fifth Amendment to Agreement with VTD ATTACHMENT A FIFTH AMENDMENT TO AGREEMENT FOR SERVICES by and between the CITY OF TEMPLE CITY and VAVRINEK, TRINE, DAY & COMPANY, LLP Dated May 7, 2019 Pa ge I of l 3 ATTACHMENT A FIFTH AMENDMENT TO AGREEMENT FOR SERVICES This Fifth Amendment to the Agreement for Services ("Fifth Amendment"), which is dated for reference as indicated on the cover page, is hereby entered in to by and between the CITY OF TEMPLE CITY, a Cali fornia charter city ("City"), and Vavrinek, Trine, Day & Company, LLP ("Service Provider"), as follows: RECITALS A. On January 6, 2016, the City requested proposals from qualified Certified Public Accounting (CPA) firms for a three-year contract to a udit its financial statements beginning with the fiscal year ending June 30, 20 16 , with the option to renew the contract for an additional t wo fiscal years, for a total of 5 yea rs . B. On April 5, 20 16 , the C ity Council authorized the C ity Manager to enter into an agreement ("'Agreement") for professional audit services with VTD for Fiscal Year ('·FY'.) 2015 -16. C. On April 4 , 2017, the City Council authorized the City Manager to enter into a first amendment to th e Agreement fo r professiona l audit services with VTD for the FY 2016 - 17. D. On Apr il 17 , 2018, the City Counci l authorized the City Manager to enter into a second amendment to the Agreement fo r professional audit services with VTD for the FY 2017- 18. E. On January 2, 20 19 , the City Counc i l authorized the City Manager to enter into a third amendment to the Agreement for professional a udit services ("Third Amendment") with VTD to include the preparation of th e req uired GASB 75, Accounting and Finandal Reporting for Poslemploymenl Benefits other than Pensions , accounting entri es and disclosures fo r the FY ended June 30, 2018. F. On February 5, 2019 the C ity Council authorized the City Manager to enter into a fourth amendment to the Agreement for profess ional audit services with VTD for the preparation and submi ssion of the FY 2017-18 State Contro ll e r 's Office Cities Financial Transactions Report. G. On May 7, 20 19 , the City Council authorized the City Manager to enter into a fifth amendment to the Agreement ("Fifth Amendment") for professional audit services with V TD fo r FY 20 18-1 9. OPERATIVE PROVISION OW, THEREFORE, in considerat ion of the promises made and recited herein , the parties do hereby e nter into thi s Fifth Amendment, which modifies and amends the Agreement as follows: Page 2 of 13 ATTACHMENT A I. AMENDMENT. The Agreement is hereby modified and amended as follows: 1.1 Section I . Secti on I is he reb y modifi ed and amended as follows: Subject to th e prov isions of Section 20 "Termination of Agreement"' of th is Agreement, the Term ofthis Agreement is for 12 months commencing on the date when the Fifth Amendment is properly executed by the appropriate authorities of the City and Service Provider. 1.2 Section 2 of the Agreement is he reby amended as follows: T he Service Provider wi ll prepare th e GASB 75 Other Post- Employment Benefits accounting entries and related note disclosures for the City 's financ ial statement in addition to the services included in the Agree ment. 1.3 Section 4 of the Agreement is hereby amended as follows: The third sentence of Sect ion 4 , s ubparag raph (a) of the Agreement is amended to read as follows: The tota l a ll-in clusive m aximum fee for FY 2018 -19 audit sha ll be: Fifty-Eight Thousand Seven Hundred and Thirt y Dollars ($58 ,730). Amount not to c hange unless additional compensation is approved in writing by the City Council or City Manager. 2 . GENERAL PROVISIONS. 2.1 Remainder U nch a n ged. Exce pt specifically modified and amended in th is Fifth Amendment and previous amendments, First, Second, Third and Fourth Agreements remain in full force and effect and binding upon the part ies. 2.2 Integration. T hi s Fifth Amendment consists of pages I to page 6 inclusive, which constitute the entire understanding and agreement of the parties and supersedes all negotiations or previous agreements between th e parties with respect to all or a ny part of the transaction discussed in thi s Fifth Amend ment. 2.3 Effective Date. T hi s Fifth Amendm ent is effective on the date it was formally approved b y the City Co uncil and executed by the appropriate authorities of the City and ervice Provider. 2.4 Applicable Law. The laws of the State of Ca li forn ia shall govern the interpretation and enforce m e nt of this Fir st Amendmen t. Page 3 of 13 ATTACHMENT A 2.5 References. All references to the Agreement include all their respective terms and provisions. All defined terms utili zed in this First Amendment have the same meaning as provided in the Agreement, unl ess expressly stated to the contrary in this Fi rst Agreement. IN WITNESS WHEREOF, the parties hereto have executed thi s Fifth Amendment to the Agreement on the date and year first wri tten above. CITY: THE C ITY OF TEMPLE ClTY By: _________________________ __ Bryan Cook, City Manager ATTEST: Peggy Kuo , City C lerk APPROVED AS TO FORM Gregory M . Murphy, C ity Attorney SERV ICE PROVID E R : Vavrinek, Trine , Day & Company, LLP By: ________________________ _ N ame: __________________ _ T itl e: By: ________________________ _ Name: ____________________ _ T itl e:----------------- Pa ge 4 of 13 ATTACHMENT A A notary public or other officer completing this ce rtificate verifies only the identity of the ind ivid ual who signed the document to which th is certificate is attached , and not the t ru thfulness , accuracy, or vali dity of that document. NOTE: SERVICE PROVIDER'S SIGNATURES S HALL BE DULY NOTARIZED, AND APPROPRIATE ATTESTATIONS SHALL BE INCLUDED AS MAY BE REQUIRED BY THE BYLAWS, ARTICLES OF INCORPORATION, OR OTHER RULES OR REGULATIONS APPLICABLE TO SERVICE PROVIDER'S BUSINESS ENTITY. ALL-PURPOSE ACKNOWLEDGMENT NOTARY FOR CALIFORNIA STATE OF CALIFORNIA COUNTY OF LOS ANGELES On -------.~=------''L-.!2::..:0::.__, before me, --,rr:;-;:;;-;:;-:~rr:l~"'T"r=;:;;-/=.......-r.=""T"'";:;~=~!T.'":l:=.,.---Date Name And Iitle Of Offi cer (e .g . "Ja ne Doe, Notary Public") personally appeared------------------------------- Name of Signer(s) who proved to me on the basis of satisfactory evidence to be the person (s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity (i es), and that by his/her/their signature(s) on the instrument the person (s), or the ent ity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the l aws of the State of California that the forego ing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public OPTIONAL Th ough this section is optiona l, completing th is informati on can deter alternation of the document or fra udu lent reattachment of this form to an unintended document. CAPACIT(IES) CLAIMED BY SIGNER(S) Signer's Name : Individual Corporate Officer DESCRIPTION OF ATTACHED DOCUMENT Title(s) Title or Type of Document Partner(s) Limited Ge neral Attorney-In-Fa ct Number Of Pages Trustee(s) Guardian /Conserv ator Other: Date Of Document Signer is represent ing : Name Of Person(s) Or Entity (ies ) Pa ge 5 of 13 ATTACHMENT A E XHIBIT A SCOPE AN D SER VI CES ection 5 -Audit Plan / cope of Work ,\. O u r P ro p o ~e d udit P lan Our cng..lgcmcnt a pproa h lor the Cll~ ol I em pic C i t~ ..1ud11 h~ "cll-dct.t i h:d go.tb b~ "hich the cr ·~.tgcmcnt partner an mo:a~u r e prog rc '· Our nutl 1t pl an mdmk-, trc-tuent contact he t\\ cen the partnl'r and the e ngage ment tea m to a urc thJt objeCt I\ c:' ..1rc aliJmc:d J l.'l rdm • to th e J Utllt chcduk:. Jntl th.ll problem:. Me ommunicated and dea lt "ith on a tim e!~ ba~is Our o:nga gc mcnt approJch bene lit) I rum our long <tc cum uiJtc:d e\J)I:n c m:e d ur ing "h1 h ou r li n n hJ 1d c n111icd 1-c., .trc a:. ol lin.tnl'IJ I .tnd ,, ·countmg con~· ern 111 thl' audit pnxc\\. \.i o rr important I~. tht:' approac h pr o\ 1dc' lor a l'O mpktr rc '"'l'''lllcnt (lt the rn rmrccnwnt and con trol en ' ir mn cnl in c.tch) c.sr'' aud it ~uu.J thu' 1' ~...tp.thlc ut rc,~mtl1n~ to t:h<.~ngc' and "sll cn\urc th<~t tlc.r dl inc:. arc met in bsumg the annu..1l tinanci:~l '>la tcmc nh. r he I.e~ d tJri.ll. h:ri ti of our cngJt; ·mcnt .1pproad1 Jrc • All lll!t'dl!t (If iht' ('II\' II/ r.mplt· ('1111111.1 \WIIl<lr l'llfl(/l'\ \\c h.t\C: C\ten i\C C\('Crtcn ,c Juditing I! 1crnmcntal cn t1tic "malar to th\.· t it~ I hs ~·,pcricm.c cnat-k.., u ... to pe rform J more dtio.11:n t .tudit .111J 1tlcn 11 t} I.e) au~..ht ri-.1-., • Cmt ,•lft'dlll'/11!.1 '· Our c:\pcrscnccd aud i t or ~ lo" pc r.:cnt J gc o f tu rno' c1 rc du(c yo ur l'O~t • '""'''Ill•'', \\<c t ~sl..c dcatllmc!!>. both} o ur .111d our-. \cnou~l ). • /',trill<'' mtliiUR<'r ulln/\,'lll<'flf Deci di ng on audit ~tr,Hcgi c~ n:qu trc~ "c a o nc d JUd _m.:nt Our p.trtn~·r, and m .tn ,I~Cr\ h o~ c lxcn hc,l\ rl~ llld ~o:lm t muou'>l) Ill\ nh c~l 111 g1H cmmc;nt.tl auJII, 1-urtht'mlorc. > uu 11 til be Jbk to con )ult 1\ ith 'en or tcJm member' 11 hcnt'\ cr necJcJ thruu ·hout th e > cJr. \\ c .trc al'asl,tbk durmg the 1 c.1r to r an~ tddltlllfl JI c n ultatron that ma~ an'-C ard 'pcdtic:J m the rc qu e..,t for propo al. Protl'U ,\l mm:s•mt•nt Ot era /I , llu/11 Our audit plan for each of th c fi nl }ear-iO\ol~ocs o;i\ (61 t .t~c~ for each audll. I hc'c )tagc' rtrc· 'tagc I. Plan ni ng 'tage ~. Ri 1.. A:. c ~m c nt . ta •c 1. Pn :pa ration ofthc \Crull udi t PIJ n tJgc .t . t on du ctsng tht:' lntcnm \ud st tagc 5. Condu ting the I rn.ll \udit ;,tagc 6 R ·port ing I he'" '>t.tl c' 11 ill lx appl ied to the Ci t ~·, C J\ I R audit '" "ell ,,., the uth.:r Juthh I he .rudll appr~•J ~o. 'l "til ~t' tarlorcd to the rr 1-ol ead1 rndr~o 1du.1l c:nllt\ .md the ~e.tk "111 .al'o be .ttlJu tl·d ,,, no:O.:l'".t~ to en un: that each l'ntrt) · tinancial 'tatc menh arc fa 1r l ~ 'tatcJ .\'ta gr> /, PI 111111ng 1 D will meet wi th 1-e) :.tun to plan thl' Jud it '>l'TI i<.:l· tor th e >car. I hcse meet ings 11 all di cus all ,au dit i~ 'tiC'> and the proposed in terim ''llfl.. plan . Ounn • th1~ phJ~c. 11e "ill a co m plr h • ltlcntlf) ing the 1-c) pcr-,onncl an d lOill.t eh in the l·mJ illC D.:p.trtmcnt Jlld oth ·r depart ment • ldenllf) the Ci t} o l I cmp h: lit\ sgnslitJnt cla'w' lll tmn~.1ct t on and bu me rr<Xt:'~'e' • Clht :un .ln uncicl"\tnndsnf of audit rl'il-.1rc.t' • Oc1 clopmg .m umlcr-.tandm~o of unu,ual tran">.ldlon' or C\ ent'> th at h..11 ~ o urrcd dunnl th~ ti~ al 'car • I ormJiumg log b ti s. • hnalrti ng the timdrJ mc lor rntc ru n ticld\\O r 1.. Pa ge 6 of 13 ----------~-- ATTACHMENT A cction 5 -Audit Plan / cope of\ ork \. Our Pro p o~ctl •\u ll il Pl a n. (C o n t inul'd ) .I"' I \111<'/11 th~ mlom1ati n ohtam.:J tn the: pl.mnant-nw.:t n •:. \'I D "til pcrlorm a n!> J:.~ 'mem J') required b) tatenll~n l ' on i\udlltng tandanh ( \ ) to b\.' u c:d tn the pr'rlJr • .tlton o f the 01 ..:rail audn plan \.,part oltht' rt l J '>t.::. mc:nl \\C: '"II p.:rlorm the loiiOI\1111:! I. Obtai ar ndc:~tand m~,; ol the cnttl) and th en' tronmcnt and 11 rt b and mmcrial ""rnpltlUh.t.: n:qlmcll'cnh \ I D '"II refer to the Cit~\ pd{•r ll'ar Comprcheno;iH: Annual J inan .. s.sl Rcpc•rt . nnual buJ~d di.Xumc:m. rnuntdpal ode and other rdc:1 a 11 do .. urm:nt.lt ton to a 1 1 "111'> our undc:r andtn • ul the C. I} bu tnt::.'> t.:ll \ tronrnen t and ri)l..' \ ID "sll al o wndu 1 mqutf) "nh le~ md11 tdu al "tthtn the Ctt> '' ho .m: rc pon i ble lor c\ccuttnt; the Cit)':. Mratcgt" pl.m. , O btam an undcro;tanding ol the cnttl) ' mtcrn.t l "ontmh \ I 0 '"II n:lcr to the 'it~ ' orguntz.tl wrl.ll l.harh. bud .. •ct. "lllh:n poh-.re:. .111 J pru~ocJ ure . li n.m~otal a .. ~.:ounltn • 1 .ten~'> tu a i!.t ..., llh uur unJ.:r:.tand rtf ol tntcrnal control \ I I> 1\11 tho rcrtom1 inquif). oh t.:r•al on 111 f)l:d ton. and \\ 111..- thr~ u:;h' <1! l..e~ mtcmal .. ontrol 1 .. ur.: th.: le~ ~.ontroh ~re proper. ,,k t_!OcJ and tmpkm nt.:J ".: 1 "I "" I control c~ \.'1.:' if'ldud R«:1 enuc (. ollc..tton Btlhng Pr urcmen t Cash lJt'>bU ~I!m cnh ln'e'tment ma nage me nt IJr.:bt m.m,sgc:m t:n l I manc tal rc:po rt mg Year eml ·lo~in g Budl!c.'ltng Rt-.1.. lllJnagemcnt II 1ma n Rt.::.;)Ur 1.' Pa) rtlll II C ontro l . relating tu .til ,l')~l:h vi thc ,IUdll l \t.:r ace'" . .:~·u rit) Uad. up and recu' Cl) ·) ~t r.:m intr.:rf.Jct.:'> I raud l'n:1 cntton Program (,rJnh 1\l an.tgc:ment 3 PrdsmmJf) J nal~ ti~·al rc1 It:". tktc:nnm.Jiton ul pn:luninJf) rn.Jl'rtJitt~ lo:1eb . ~ •\nJI) '' ol l..ml" mt tatc:mcnt . tl an) 'i Cun idcr.ll ton (I I rt\1.. of ma tenal lllh'IIJICIIlt.:lll .tt the tndll tdual JC ·ou nt n.tiJn ·.:. d..t'' nl trJn,<ll..ll011'> anJ d 1 do urc: k1 cl. 6 .,.,l'~'>lllg the ri')b ol matc rialmt"!Jtemr.:ut a t both th e linath.ta l !>latem r.:nt and rdc,ant lh t:rtton lc,.:h. 7 c the n 1.. ol materi al n ncornp li ancc "ith Ia "., and rcgulatton tha t h.11 c •' dtrcct ond mall nal ·llr.:l.l on the fin anci al tatcmcn ts . 8 Fvaluall on oi l he: C it)' tnlonnalton t c:chnolog~ and ~enera l mlunnatt on ll:c.hnolng) conttol, "JX~...:...LI~'r~rll=.:T~cJIIU II uj th .: Q\t rail Audtl /'1(111 Once the planning a nd ri 1.. a r,:,.,rnt.:nt procc:.,, are ctlmplct.: an m emil audll plan ''ill · pre par ·d The plan \\Ill ~df ) eJc.h audtl ta~l. -.tallin_ a !!Otnen t . tnnclm.:' .mJ Juc d.ltc I he plan ''til .tho brt.: t do11 n the "or I.. a ... -.il nmc:nh ~l\\l.'Cn rnteril'l and final .usdit Iundin..:' 1 hc .tud it plar "ill induJc the Iran .td on l) de' '' hn:h ha1 c: b~n ek~.ll:d hn mh:m.sl ~.ontwl te~tmc and th , ... lllr '' htc. h unl~ tic J~·t..s leJ "all.. through ''all b\.' pcrfunnt.:d \\ c: ''til .tho prcp.~rc · 1 hc prc ltmtnal) ma t c r ial it~ gutdclmc~. the a udit pro gram ,. mduding con.,idcra t tOn of: IJcnlllic.tllun ul .trca "ht.:rc '>pcual .tud llc.om•Jc:r-Jitllll' .trc nc:c.c.,,.tr~ o.:~tgn lll further .tudi t proc.ed urc Ill r ·Juc.c ri-.1-tl ..:un,idcred ncc l' ~31}. o I hc Jc:, dupmcnl ol C\pcdaltc.ln' l~'r an.tll lt1.JI ptl)~.cJun: . 11111cltnc . and a rgnmcnt ut Jll tUdit n:,pon,thtltti ., Page7 ofl 3 ATTACHMENT A Section 5 -Audit Plan/Scope of Work f\, O u r Propo cd A udit Plan . (Co ntinued ) Stm:t• -1 tiro! lntrnm A ud11 Our intcnm tield ,,orl-. date "ill nonnall occ ur during. th~ l.1r1.h-1\l a) t1mel rame. I he !~pcci lk '~ed.:. "ill be determined dunn g the planni ng meetin g and preparat ion of the audit plan pro c . \\ ~ ''ill obtain an undcr.tunding of the dc,ign <tn d impkm~ntution of th~o: fina nc1 al reponing -;~ qcm to umkr!ltand th e lollo" o l informatio n tor I . l:.tch d a ol tran !l ac tio n that~~ l!!lll li t:.m tto the tin.tn 1J I !l lah:ment !>. , 1 he procedu re s "it hin both au toma ted and manu al \, ·tern . b) "hich tho~l· t ran~.1 c t i on!> arc initia ted . aut ho rw.:d. re corded. pro C!l ~·d . and reported in th e ti nan ·ia l statement!> J . I h ·re lated oceount ing record~. "h ·ther in clcet roniL or man ual c;up poning infumm t io n. an d spc ific d{'Coun t in the financi a l tatc mcn t Ill\ oh cd m 111 ltl..ttmg. a uth ori11 n~. r ·cordi ng. pr{X:c: ~i n • lllld rep on in g trnn oction .t . llo" the mfo rmat ion ) tern!~ captures ev ent!> .mJ ~·o ndiuon!> other than cl.l!t!>e~ ot tr.tn!>Jl iiOil!> that are 1gnificant to the finan ia l ~tate m enl\. I he finan 1al repon ing pro cs u!>e d to prepare the II) s financial !>latement . tn ludm{! 'ig111ti ant accountmg es timat e and d1 to urc .. Sta ge 5. th~ Fmal .ltulu \\ l' '~ill c:om mcn c o ur final fic:ld\\or~ a soon as Cit} of I em pie Cit} ha uffi c1e nt l) d o ed the1r a count in • r\: o rd . \\ c C'\pcct final fi eldwork to tal..c pla ce du n ng cpte mber -Octobe r During th i ph a'>~. \H.: "iII pc rfimn ub t.m t i' e :nrdit prlX:ed ure~ on the } car-end ta tcment o f m:t po'111 on and fund ba lu n c . rc' enuc and e'\pend1turc c'\pcn c n count \ c will u C' n 'a net) o f audi t proc edure "hic h ma) in ·ludc ou t ide con lirmat lllll\, .tati:-.11 ul \amp ling. anJ de t,nlcd tc lin g of chedulc~. an..t l) 11 ·al rc\ te". inquny. and ob en all n Ounng th1 ph a c \\C "ill draft the financia l '>l ~llem cnh . . \'tag. 6, tht• R.po rllll!! Jllul\•' \tthc: c:nd o lthc audit pr<.K:C '''c ''Ill meet '''t h l..c ,t,tlt Ill \.Q \CI the l ollo"rn ~ • D1 cu 1m proq:mcnt lo r u~c:que n t ~ca r au d1 t plan . • \1 eet with the udit Com mitte.: or ou nci lto pre en t the rcwlts ol'thc audit . • Commun ic ate "ith thu c ch,rrgcd "1th go' crnam:c . • \l.,'e "ill prepare [)raft udit Rc po rb "1th mana geme nt letter comnu:nt to m.magemcnt pnor to the: agreed upon ~~ uancc da te. • \\'e "ill prepJre Fin al Dmtl ud it Rcpo n ~ and mana gement lcttc1 eommc nb lor pn::.en tat ion to th e Cit) pri or to the a g ree d upon 1 ua n c da te . • ig nilica nt deli icn c 1c and materia l \\c:al..ne ~.: lll an~ J rdcn t itied dunng the l "O U r!IC or the audit Pro fcs 10na l ~IUnd ard ~ requ ire: \Hillen c mmumc .111 n to ma nagement and tho c charged "tth go,emance, o f signi fi cant dcticu.~n u: o r mutcnal \\C,I~nc ~c. ide nti fi ed Junng the .llldit. • Ot h~:r mattc n. that \\e bdie \C to be of potential benefit to the ma nage ment ot the t 11 ~. !>U h a!l recommen datton for opemllonal or .tdmint,tra th c c:lficicnc~. or lor impro' ing c '\istin g internal contro l Page 8 o f 13 ATTACHMENT A ection 5-Audit Plan / cope o f Wo rk \. Our l'ropo~e d A ud it l'la n, (Co nt inued ) C o mm u n icat io n We do not belle\ c in !.urp ri e~. Alth ough the reportm g ph~e in voh·cs a rc a p of the proce con~tant communi a tio n re garding the eac h a!.pcct of the aud it throughout th e en tire procc <;~. huvc an y urpri!>cs a t the c nu o f the auJ11 . \\C "ill be in You ''iII not Ll . U e of Compute r A ss i ted Aud iti ng Tec hniq u e~ ~o ft \\ a r r in the E n gage m en t c. 1111: kc } members ass igne d to the C 11 ~ · ~:ng a gcmcnt team ar c ex pc n.:nc.ed 111 ''o rking '' ith mun 1 1p.sl ml urma ti on s~!>t cm uch U) un J.ird Ornc k . Peopk oft. 11-i\''1 . SA J>. ,rc.tt Pl,1in ... I-IJ I·'· an d 11'\RRI ~ Ut dlt)' IJilhn g ) t.:m~. I hcrelorc mullmJI .un uu nt o t Cit) lllnc \\O uld lx necc Jr) tutr.un our tea m m hu" to mo:.t cl1 h.1cntl ) ac ·c ~ Cit )' tr.sn >.s..:tio lh Jnd Jm:urncnt-. lur tho: au dit . I o a '"' m our a c<; mcnt ol the II em Iron men t under the CO'iO .md CC Btl trnm c"orl... the: cngagcmcnt team Wi ll Ullh/c o ur I I peciah t: \1 . Jc.sn nc I uk cn . P.srtlll:r. C PA. Cl A. II r. C<.BIA. \Ill,\. r urthcr in lo nnation on ~h Loken and her C\pc ric ncc b incl ud ·J m the rc umc s cc t io n o f the propo .. al En g a gem e nt Timclin e 0 -:" \\ t\ ~ .~ 0 "'~\\~ '3 '· \ .;; \\~\ \ \\ ! \ ..; \utl il \lllc.-Wnl'' ... "' I'Lmmn~ \lccl mi C'>I Oi-'C I I 1arch 111rc h \uthl l'l.mmn¥("'·'W' ~ .111d 1 ) pnl pnl lnlcrtm I ickhH rl. ("t.Jgc I ) M B) \lay ''"''' 'l cdr-1 nc.l \\u ri. ('>h111 ) ... Cf)I CIIIbcr .,c:(llemh<:r l1 ~.t l 'l car·Lnc.l \\u ri.. (I nd) (~l.t ~<c '>c pl cmbcr .,cplcmb.:r Dell\ cr l>r.1f1 \udtlllr,· Rctllln I l.1 't'fl) O..ttlbcr ().:Iober Dell\ c1 I· itul R cpon ~ •o,cmb cr ,o ,cm bcr Page 9 of 13 ATTACHMENT A E XHIBIT B C O MP ENSATI ON Co t Propo al (A IIInclu ivc M a x in1um Price) \\ e arc linnl) comm itt ed to pro..,iding the Ci t) of I cmplc Ci t) ( it) \\ ith th up.:rior lc\cl o f pro fcs. ional .. en 1ce~ th .u the (.i t) ha s come to c tx<t:t I rum II'> Inde penden t Judllor-We \In' e to pro ' 1de e\<.eptmnJI t.tl l. qua l it). anJ 'Jluc at thl' lo \\ c 1 p<>\\thk k.:'> llln\J\tcnt '' ith thee P'=c lati "' ol the II) Our mtc~ .1re om JX tt tl\ c. '\C O "1th our de pt h ol '\pert ·r ~c .mJ \:umnut ment to quJIII) II O\\C\Cr ''e do not ''Jnt lee ,tlunc to be.-an ob t.1dc m the(. '' clc<.tton ol \ JHillcl. I nne. IJ.I\ !. (o. 1.1 .1'. \\ l' \\UUid tX' h.tpp) Ill JJ\CU \and Ol'gllt iatl.' 'Ul h lee 1\\UC'> JnJ rl'>p<lO tbtfll te\ \qth )llU 201~2016 2016-2017 201 7-20..!!._!018-20 19 2019-1020 <. 11~ u l I cmplc 11~ I R Audll 1 llk:luJc , '\' I •mil AFP) ~~~ ()0() ~11 .11()() I ~00 ~~II I :! '-lm¥1c uJ11 Rcpl..lrl I '"'UIIII. uno. lll.Jft•r JlW!:.fJill) I ll 1 (1()0 1.000 Ql01 EO IIOLRI.\ RATE 201~2016 2016-201 201 .. ·2018 20 18-2019 201 9 -2020 Pi.lnn~r :!:!11 ::::o :!::!'7 :!1> ::!.t u I \ l .m.• ·~·r I 0 I u I 5 1111 1'17 ',upcn 1 11r I II 1.11 I I II IM '-lt:ll l\lr 1111 140 Ill 1411 I 53 \t,ell 'J t) 'I~ lU I Jl)-1 l'.ar.Jl'n•k"u ~ (1'\ (,'\ (1 7 hll 71 Pa ge 10 of 13 ATTACHMENT A EXHIBIT C INSURANCE A. Insurance Requirements. Service Provider shall provide and ma intain insurance , acceptable to the City, in full force and effect throughout the term of this Agreement , against claims for injuries to persons or damages to property wh ich may arise from or in connection with the performance of the Services by Service Provider , its agents , representatives or employees . Insu rance is to be placed with insurers with a current A.M . Best's rating is an assigned policyholders ' Rating of A (or higher) and Financia l Size Category Class VII (or larger). Only the following "marked " requirements are applicable and Service Prov ider shall provide the following scope and limits of insurance : 1. Minimum Scope of Insurance . Coverage shall be at least as broad as : x Commercial Gene ral Liability. Insuran ce Services Office form Commercial General Liability coverage (Occurrence Form CG 0001 ). x Automobile Liability. Service provider shall maintain automob ile insurance at least as board as Insurance Services Office form CA 00 01 covering bod il y injury and property damage for all activities of the Service Prov ider arising out of or in connection with work to be performed under this Agreement, i nclud ing coverage for any owned , hired , non-owned or rented veh i cles . x Workers ' Compensation . Workers ' Compensation Insurance (Statutory Limits) and Employer's Liability Insurance as required by the Labor Code of State of California covering all persons provid ing Services on behalf of the Service Prov ider and all risks to such persons under this Agreement. x Professional (Errors and Omissions ) Liability. Profess ion al liab ility in surance appropriate to the Service Provider's profession . Th is coverage may be written on a "claims made" bas is, and must include coverage for contractual li ab il ity. The insurance must be maintained for at least three (3) consecutive years fo llowi ng the complet ion of Serv ice Provider's services or the te rm i nation of th is Agreement. During this additional three (3) year period , Serv ice Provider shall annua ll y and upon request of the C ity submit written evidence of th is continuous coverage . Service Provider shall maintain professional liability insurance that covers the Services to be performed in connection with this Agreement. Any pol icy i nception date , co ntinuity date , or retroactive date must be before the effective date of th is agreement and Serv ice Provider agrees to maintain continuous coverage through a period of no less than three years after completion of the services requ i red by th is agreement. Page II of 13 ATTACHMENT A 1. Minimum Limits of Insurance . Service Provider shall maintain limits of insurance no less than : (1) Commercial General Liability . $1 ,000 ,000 per occurrence , $2 ,000 ,000 general aggregate for bodily injury, personal injury and property damage. (2) Automobile Liability . No less than $1 ,000 ,000 combined single limit for each accident. (3) Workers' Compensation . Workers ' Compensation as required by the Labor Code of the State of California of not less than $1 ,000 ,000 per occurrence and Emp loyer's Liability Insurance with limits of at least $1 ,000 ,000 . (4) Professional Liability . $1 ,000 ,000 per claim and in the aggregate . B. Other Prov isions . Insurance policies required by th is Agreement shall contain the following provisions : 1. All Pol ic ies . Each insurance policy required by this Agreement shall be endorsed and state the coverage shall not be suspended , voided, cancelled by the in surer or either Party to this Agreement, reduced in coverage or in limits except after 30 days' prior written notice by certified mail , return receipt requested , has been given to City. 2 . Commercial General Liability and Automob ile Liability Coverages . (1) City , and its respective elected and appo inted officers, officials , and employees and volunteers are to be covered as additional insureds as respects : liability arising out of activities Service Provider performs ; products and completed operations of Service Provider; premises owned, occupied or used by Service Prov ider ; or automobiles owned , leased , hired or borrowed by Service Provider. The coverage shall contain no special limitations on the scope of protection affo rded to City , and their respective elected and appointed officers , officials , or employees . (2) Serv ice Provi der's insurance sha ll apply separately to each ins ured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. (3) Requirements of specific coverage features or limits contained in this Section are not intended as a l imitation on coverage , limits or other requirements , or a waiver of any coverage normally provided by any insurance . Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or in sured to be all inclusive , or to the exclusion of other coverage , or a waiver of any type . If the Vendor mainta ins higher limits than the minimums shown above , the Agency requires and shall be entitled to coverage for the higher limits ma intained by the Vendor. Any avai lab le insurance proceeds in Page 12 of 13 ATTACHMENT A excess of the specified minimum li mits of insurance and coverage shall be available to the Agency. (4) Coverage provided by the CONTRACTOR shall be primary and any insurance or self-i nsurance or maintained by Agency shall not be requi red to contribute to it. The limits of insurance required herein may be satisfie d by a combination of primary and umbrella or excess insurance . Any umbre ll a or excess ins urance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non -contributory basis for the benefit of Agency before the Agency's own insurance or self-insurance shall be called upon to protect is as a named in sured . (5) Any f a il ure to comply w ith the report in g or other provisions of the insurance policies , including breaches of warranties , shall not affect coverage provided to City , and its respective elected and appointed officers , officials , employees or volunteers . 3. Workers ' Compensation Coverage . Un less the City Manager otherwise agrees in writing , the i nsurer shall agree to wa ive all rights of subrogation against City , and its respect ive elected and appointed officers , officials , employees and agents for losses arising from work performed by Service Provider. C . Other Requirements . Service Provider agrees to deposit with City , at or before the effective date of this Agreement, certificates of insurance necessary to satisfy City that the insurance prov isions of this contract have been complied with . The City may require that Service Provider furnish City with copies of origin al endorsements effecting coverage required by this Exhibit "C". The certificates and endorsements are to be s igned by a person authorized by that i nsurer to bind coverage on its behalf. City reserves the right to inspect complete , certified copies of all req uired insurance policies , at any time . 1. Service Provider shall furnish certificates and endorsements from each subcontractor identical to those Service Provider provides . 2 . Any deductibles or self-insured retentions must be declared to and approved by City . At the option of City, either the insurer shal l reduce or eliminate such deductibles or self-insured retentions as respects City or its respect ive elected or appointed officers , officials , employees and volunteers or the Service Provider shall procure a bond guarantee in g payment of losses and related investigations , claim administration , defense expenses and claims . 3 . The procuring of such required policy or policies of insurance shall not be construed to limit Service Provid er's lia bility hereunder nor to fu lfill the indemnification provisions and requirements of this Agreement. Page 13 of 13