SR 02-23-2016 3F
Santa Monica Audit Subcommittee
Report
Audit Subcommittee of the Santa Monica City Council
Meeting: January 19, 2016
Agenda Item: 6_
To: Chairperson and Members
From: Gigi Decavalles-Hughes, Director of Finance
Subject: Selection of the Professional Auditing Firm for Recommendation to the City
Council for Award of a Contract
Recommended Action
Staff recommends that the Audit Subcommittee of the Santa Monica City Council select
Lance, Soll & Lunghard, LLC (LSL) for recommendation to the City Council for award of
a contract to provide professional auditing services for the City.
Executive Summary
In October 2015, staff issued a request for proposals for professional auditing services
for the City for fiscal years 2015-16 through 2019-20. The evaluation team, consisting of
two financial experts from the Audit Subcommittee and six members of City financial staff,
recommends Lance, Soll, and Lunghard, LLP (LSL) as the best proposal. With the Audit
for the City
Council with the recommendation to authorize the City Manager to negotiate and execute
a contract with LSL.
Discussion
The City engages an independe
basic financial statements as well as an examination of its Redevelopment Successor
Agency financial statements, Big Blue Bus Fund financial statements, Air Quality
Improvement Program, and its Schedule of Expenditures of Federal Awards (Single
Audit). The independent auditor also performs agreed-upon procedures to test and report
Fiscal year 2014-15 is the final year of a five year contract with th
independent auditor, LLP (MGO). Completion of the current
contract requires a competitive bid process. On October 29, 2015 staff issued a request
for proposal to seek qualified certified public accountants to audit its financial statements
for the fiscal years 2015-16 through 2019-20. Six proposals were received.
The evaluation committee reviewed and evaluated the six proposals utilizing agreed upon
criteria. MGO was one of the proposals received and remained in consideration. The
evaluation committee selected three additional firms that were unfamiliar to the City to
interview on January 13, 2016. The firms were given ten minutes to make a presentation,
and the remainder of the interview was dedicated to questions and answers.
As a result of this process, the evaluation committee recommends that the firm of LSL be
retained to provide auditing services for the City of Santa Monica and that the Audit
Subcommittee recommend LSL to the full City Council on February 23, 2016 for award of
contract.
Established in 1929, LSL is a California-based certified public accountant (CPA) firm that
specializes in government audits and is known as an industry expert at the State and
federal level. They were selected based on the technical knowledge of the partners and
managers to be assigned to the engagement; their emphasis on time management,
planning, and realizing deadlines; and the ability to provide valuable insight and
information related to new accounting standards, industry best practices, and unusual
accounting transactions throughout the process.
swiftly so that the interim audit work for the FY 2015-16 audit can begin in the Spring.
Staff anticipates that the selected auditor will be present at the April meeting of the Audit
Subcommittee to discuss planning and communication.
Financial Impact
The cost of the contract is $149,725 per year with a 2% increase each year, for a total of
$779,175 over the five years from FY 2015-16 to FY 2019-20.
Reference:
AgreementNo.10254
(CCS)