HomeMy WebLinkAboutItem 4.03 Financial Audit 08/09 Agmtti~ " ~1,
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SUBJECT:
CITY CLERK
File # ~~^0-^3 ^~
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AGENDA STATEMENT
CITY COUNCIL MEETING DATE: FEBRUARY 17, 2009
ATTACHMENTS:
Authorization to engage the Firm of Caporicci & Larson to Conduct
the Fiscal Year 2008/2009 Financial Audit
Report Prepared by: Ad Hoc Audit Subcommittee -Mayor Tim
Sbranti and Councilmember Kate Ann Scholz; and Paul S. Rankin,P~
Administrative Services Director
1. Engagement Letter from Caporicci & Larson dated January 30,
2009 addressed to Paul Rankin, Administrative Services Director
RECOMMENDATION: Authorize the Mayor to execute the Engagement Letter and direct
Staff to proceed with planning for the completion of the Fiscal Year
2008/2009 Financial Audit.
FINANCIAL STATEMENT: Total cost of the proposed engagement is $31,400, which represents
no change from the amount billed for the Fiscal Year 2007/2008
Financial Audit.
DESCRIPTION:
The firm of Caporicci & Larson, Certified Public Accountants has
conducted the financial audit for the past five consecutive years for the City of Dublin. The firm was
selected following a Request For Proposal process in 2004. The current agreement was established with a
five year term and the completion of the Fiscal Year 2007/2008 audit would conclude the original scope
of services.
Typically an audit engagement is proposed as a multi-year agreement due to the intense data collection
required at the outset of working with a new client. The Administrative Services Staff is currently in the
process of implementing a new computer accounting system, which requires a significant commitment of
staff resources. The new system is currently scheduled to go live in July 2009. If the City were to seek
proposals for audit firms and select a new firm at this time, it would require a substantial commitment of
staff resources as they balance adaptation to new software at the same time as new auditors, while
preparing the Financial Statements for June 30, 2009.
Given these conditions, Staff discussed the possibility of extending the current agreement for audit
services with Ahmed Badwi the Partner at Caporicci & Larson assigned to the City of Dublin Audit.
Although he has worked at various levels on the City Audit, the Fiscal Year 2007/2008 Audit was the first
that he served in the capacity as Partner. As described in Attachment 1, Caporicci & Larson have agreed
to extend their services for the Fiscal Year 2008/2009 Audit. The proposed fees are at the same rate as is
being charged for the last Audit. The firm typically begins planning and scheduling of interim audit work
in the Spring prior to the end of the Fiscal Year on June 30, 2009.
COPY TO: Ahmed Badwi, CPA -Caporicci & Larson
Page 1 of 2
ITEM NO. ~.
G:~AuditWgreements~2009 ExtensionWgenda_lyrExtension.doc
The concept of a one-year extension was discussed with the Ad-Hoc Audit Subcommittee when they met
on January 28, 2009. There was an understanding of the challenges involved with conducting a Request
For Proposals at the same time as implementing new software. The one-year extension would allow the
City to complete the Fiscal Year 2008/2009 Audit and then conduct a Request For Proposals in advance of
the audit for Fiscal Year 2009/2010.
RECOMMENDATION
Staff would recommend that the City Council authorize the Mayor to execute the Engagement Letter as
presented, and direct Staff to proceed with planning for the completion of the Fiscal Year 2008/2009
Financial Audit.
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Caporicci & Larson
C'ertifie~l Public Accountants
January 30, 2009
Mr. Paul Rankin
Administrative Services Director
City of Dublin
100 Civic Plaza
Dublin, CA 94568
Dear Mr. Rankin:
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As you are aware, our current audit contract ends with the completion of the 2008 audit. I
would like to take this opportunity to thank you for the confidence and support you and the
City have provided us over the years. I would also like to take this opportunity to present
this letter for your consideration regarding extending the Caporicci & Larson audit contract
with the City, in accordance with our discussion at the Ad-Hoc Audit Committee meeting.
As discussed the staff involvement with installing a new accounting system at the same time
as securing new auditors is a significant impact on City resources.
Over the past years, we have developed an understanding of the City's operation that has
aided us in providing quality audit services.. -With that knowledge, we've been able to
expand our audit efforts and provide observations that have assisted City staff. We have also
demonstrated our ability to respond to requests of the City and our ability to deliver a quality
product. We trust the City has been satisfied with our efforts.
We would like to propose an extension of our audit contract for the fiscal year ending June
30, 2009. The objective of our audits is to issue an opinion regarding the fairness of
presentation of the City's financial position for each year in accordance with generally
accepted accounting principles. The audits to be performed will follow generally accepted
auditing standards, U.S. General Accounting Office's Government Auditing Standards,
Single Audit Act, and OMB A-133.
As of today, we are not aware of any legal requirement to rotate audit firms. However, in an
attempt to assist the City to comply with recommendations offered by the Government
Accountability Office regarding this matter, we have assigned a new engagement partnex to
the City of Dublin to be responsible far reviewing City's financial records.
Toll Frce Ph: (87?) 862-2200
(baic3asea7. ~rase~;e C:aosntrc~
78Q GranHAvc.,Suite t365 ~ Corporate Park, Suite 10(.
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Attachment 1
Toll Free Far: (866) 436-097
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~'' Campus Commons Ru., Suite 200 485fl lther~urv: Suite 7 C(ro
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Mr. Paul Rankin
City of Dublin
Page 2
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Our proposed professional fees to perform the audit services to the City for the year ending
June 30, 2009, will remain at the 2008 levels as follows:
Audit Year Amount
For the year ending June 30, 2009 $31,400
It is our understanding that you will need to first obtain authorization from the City Council.
If the City agrees with the foregoing, please sign the copy of this letter in the space provided
and return it to us.
We would very much like to continue our relationship with the City and stand ready to
provide the level of service and commitment for which the City has become accustomed.
If you have any questions, please feel free to call me using our toll-free number (877) 862-
2200, ext. 146.
Sincerely,
Ahmed Badawi
Partner
This letter correctly sets forth the understanding of the
City of Dublin as listed above.
Acknowledged by:
City of Dublin
Date