HomeMy Public PortalAbout2019.122 (09-17-19) RESOLUTION NO. 2019.122
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD
AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT WITH LANCE, SOLL &
LUNGHARD, LLP TO PROVIDE REVIEW AND ANALYZE THREE (3) YEARS OF
PAYROLL DATA AND RELATED TAXES BASED ON THE AGREED UPON
PROCEDURES ENGAGEMENT LETTER AND AUTHORIZING APPROPRIATION
REQUESTS
WHEREAS, the City implemented a new payroll program, ADP in April 2016.
Since the go live date, the City has encountered significant problems with the program,
resulting in erroneous payroll data including employee pay, pension information, leave
accruals and taxes that has and continues to require an extensive amount of staff time to
correct on an on-going basis; and
WHEREAS, some of the City's significant issues with ADP have been 1) its inability
to accurately calculate employee deductions (percentage contribution of "PERSable"
earnings) for CaIPERS; 2) incorrectly turning off longevity calculations impacting full-time
employees; 3) its inability to calculate longevity correctly for hourly employees and
allocate to various departments (involves a system limitation in which ADP cannot
calculate longevity for hourly employees when allocating employees to various
departments); 4) Floating Holiday Leave Balance not visible to employees; and, 5)
Secondary Vacation Leave Banks no visible to employees requested shift of hours from
primary vacation leave bank; and
WHEREAS, although these issues have been addressed over time, new
challenges and issues are continuously occurring; and
WHEREAS, ultimately, ADP does not have the capacity to handle complex
municipal payroll. In in order to bring the process to good standing and aid the City with
moving forward, over three years of payroll data for all full-time and part-time employees
will need to be analyzed, reconciled and recomputed, due to the systemic problems
associated with ADP and its implementation; and
WHEREAS, the Finance Director has engaged the assistance of the Certified
Public Accounting firm, Lance, Soli & Lunghard, LLP (LSL) to assist with the cleanup of
historical payroll data; and
WHEREAS, LSL is a known leader in providing internal audit services to clients.
LSL provides outsourced and co-sourced internal audit services to Municipalities located
in California. Their programs, tools and resources are constantly being enhanced to help
ensure that they can address the most current regulatory focus areas and provide the
most value-added perspective to their clients; and
WHEREAS, LSL is a public accounting firm licensed by the State of California,
Department of Consumer Affairs, as a Public Accounting Partnership. All of the partners
and managers are Certified Public Accountants licensed by the State of California. As a
firm, they are members of the American Institute of Certified Public Accountants and the
California Society of Certified Public Accountants. The firm provides general tax, attest
and advisory services and have proactively developed a full-service team to address
industry-specific and organization challenges. Some specific services that LSL provides
include financial auditing and CAFR preparation, internal auditing, program specific
audits, performance audits, and compliance audits in programs such as Housing
Authorities, Child Care, TDA, AQMD, Proposition A, Proposition C, Measure M, TOT, and
various accounting procedures reviews; and
WHEREAS, LSL provides internal audit services through the consulting practice.
The consulting practice is structured around risk advisory services. Given the
collaborative way in which they serve many municipal clients, LSL combines the internal
audit practice with several other governance-related services—regulatory compliance
and risk advisory. The risk-based internal audit methodology centers on building a sound
understanding of the City of Lynwood, its departments, processes and cycles,
organizational structure, and culture to create a first-class internal audit department; and
WHEREAS, LSL has provided staff with an agreed upon engagement letter for
said services. The task at hand requires high level accounting expertise. If approved by
Council, the LSL team which will consist of four (4) high level skilled accountants, will be
tasked with assisting Finance staff with recalculating payroll from March 1, 2016 to June
30, 2019. The task encompasses the following:
1) Reviewing payment stub and ensuring amount matches the amount on payroll
registers and general ledger.
2) Reviewing W-4 forms and recalculating the tax withholding for Federal and State
Income Tax purposes on the pay stubs to ensure calculations are correct and in
accordance with the employee W-4
3) Recalculating all other Federal, State, and Local tax liabilities on the pay stub and
ensuring they are in compliance with Federal, State and Local government tax
laws.
4) Recalculating each employees' deferred compensation contributions.
5) Recalculating retirement employer percentage and ensuring it agrees to CaIPERS
City's contribution percentage.
6) Obtaining and reviewing employee PAF forms and applicable MOU's and ensuring
the salary amount approved agrees to the payroll register.
7) Reviewing and recalculating leave balances; and
WHEREAS, this effort consists of an extensive amount of work and will take
approximately six (6) months to complete; and
WHEREAS, staff is requesting that the Mayor execute an agreement with Lance,
Soli & Lunghard, LLP to provide payroll processing and reporting functions based on the
agreed upon procedures engagement letter; and
WHEREAS, pursuant to Section 6-3.13 (a)(3) of the Lynwood Municipal Code, the
City may bypass a Request For Proposal (RFP) process provided that 4/5ths of the
members of the Lynwood City Council find an alternative process is more economical and
efficient than a RFP process.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES
HEREBY FIND, ORDER, AND RESOLVE AS FOLLOWS:
Section 1. The City Council authorizes the Mayor to execute an agreement with
Lance, Soil & Lunghard, LLP in the not to exceed amount of $106,000, based on the
services provided by the certified public accounting firm to provide payroll processing and
reporting functions based on the agreed upon procedures engagement letter, approved
as to form by the City Attorney.
Section 2. Consistent with Lynwood Municipal Code Section 6-3.13(a)(3) and by
a vote of not less than four-fifths (4/5) of its members, the City Council finds that
contracting directly with Lance, Soli & Lunghard, LLP is more efficient and economical
than procuring the services via an RFP process due to the City's need to have a new
system in place to ensure City employees are provided expedient verified information for
their current year.
Section 3. That the City Council approves the following appropriations:
Fund Dept. Div. Object Description Amount
1011 Budgetary Fund Balance ($36,400)
Professional/Contr.
1011 30 270 62015 Services $36,400
Fund Dept. Div. Object Description Amount
6051 Budgetary Fund Balance ($16,800)
Professional/Contr.
6051 30 315 62015 Services $16,800
Fund Dept. Div. Object Description Amount
6401 Budgetary Fund Balance ($2,800)
•
Professional/Contr.
6401 30 315 62015 Services $2,800
Section 4. This resolution shall become effective immediately upon its adoption.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the
City of Lynwood, California this 17th day of September 2019.
Jo Luis Solache, Mayor
ATTEST:
14 4AA 41LiIJ
Maria Quinonez, Jos Ometeotl,
City Clerk City-Manager
APPROVED AS TO FORM: APPROVED AS TO CONTENT:
A►2 . I
Noel Tapia, •hn Dons,
City Attorney / inance Director
STATE OF CALIFORNIA )
) §
COUNTY OF LOS ANGELES )
I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the
above and foregoing resolution was duly adopted by the City Council of said City at its
regular meeting thereof held in the City Hall of the City on the 17th day of September,
2019 and passed by the following vote:
AYES: COUNCIL MEMBERS ALATORRE, CASANOVA, SANTANA, MAYOR
PRO TEM CASTRO, AND MAYOR SOLACHE
NOES: NONE
ABSTAIN: NONE
ABSENT: NONE
OiA
Maria Quinonez,
City Clerk
STATE OF CALIFORNIA )
) §
COUNTY OF LOS ANGELES )
I, the undersigned City Clerk of the City of Lynwood, and Clerk of the City Council
of said City, do hereby certify that the above and foregoing is a full, true and correct copy
of Resolution No. 2019.122 on file in my office and that said resolution was adopted on
the date and by the vote therein stated. Dated this 17th day of September, 2019.
Maria Quinonez,
City Clerk