01-15-2008 - Extension of Contract - Independent Auditing Services10 r
10, City of West Covina
Memorandum
TO: Andrew G. Pasmant, City Manager
and City Council
FROM: Tom Bachman, Director of Finance
AGENDA
ITEM NO.: D-7e
DATE: January 152008
SUBJECT: EXTENSION OF CONTRACT - INDEPENDENT AUDITING SERVICES
RECOMMENDATION:
It is recommended that the City Council extend the contract of Mayer Hoffman McCann, P.C.,
Conrad Government Services Division for three years to provide auditing services for fiscal
years 2007-08 through 2009-10.
DISCUSSION:
In 2003, the City entered into a five-year contract with the independent auditing firm of Conrad
& Associates (since merged with Mayer Hoffinan McCann, P.C.) to provide auditing services to
the City for fiscal years 2002-03 through 2006-07. Conrad was brought on board following a
period of transition in the finance department in which greats strides .were made in improving the
City's financial reporting capabilities. During this five-year period, Conrad has provided
excellent and responsive services to the City during a period in which the City changed its
computerized finance system as well as implemented the new financial reporting model required
under GASB 34.
Mayer Hoffman has proposed to extend the contract for auditing services for an additional three
years as follows:
2007-08
$33,400
2008-09
$35,100
2009-10
$36,100
This represents a 10% cost increase in the first year, a 5% increases in the second year and a 3%
increase in the third year. The cost increase in the first years represents an increase in auditing
hours necessitated by new risk assessment auditing standards issued by the AICPA's Auditing
Standards Board. These statements establish standards concerning the auditor's assessment of
the risks of material misstatement in a financial statement audit, and the design and performance
of audit procedures that are responsive to the assessed risks.
Staff is recommending that the City award a three-year contract extension to Mayer Hoffman.
Mayer Hoffinan's price was considerably lower than the other most qualified firms that
submitted. proposals the last time the contract was bid, and staff believes cost increases requested
here are justified and competitive. Staff has also been very pleased with their technical expertise
and professionalism.
FISCAL IMPACT:
Total three-year cost is $104,600. Funds will be budgeted in the future City and Community
Development Commission budgets.
Prepare by: Tom Bachman
Director of Finance
Finance docs on storage-1/Agenda Items/CAFR/Audit Contract Extension 1.15-08