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ADMINISTRATIVE
COMMITTEE |
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20. |
CONSIDER
AUTHORIZATION TO CONTRACT WITH HAYASHI & WAYLAND TO CONDUCT ANNUAL
FINANCIAL AUDIT FOR FISCAL YEAR ENDING 2017, 2018, and 2019. |
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Meeting
Date: |
June 12, 2017 |
Budgeted: |
Yes |
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From: |
David J.
Stoldt, |
Program/
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Services & Supplies |
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General
Manager |
Line Item No.: |
Professional Fees |
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Prepared
By: |
Suresh
Prasad |
Cost
Estimate: |
$44,000 for 2017, $45,500
for 2018, $47,000 for 2019 Plus additional fee for CAFR
& GASB75 |
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General Counsel Approval: N/A |
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Committee Recommendation: The Administrative Committee reviewed this item on June 12, 2017 and recommended _____________. |
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CEQA Compliance: This action does not constitute a project as defined by
the California Environmental Quality Act Guidelines section 15378. |
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SUMMARY: The District is required to have an audit of its financial records performed on an annual basis. The three-year agreement with the firm of Hayashi and Wayland (H&W) to conduct the annual audit expired with the completion of the audit for Fiscal Year (FY) 2015-2016. Due to the uniqueness of the District’s operations, including its involvement with the CAWD/PBCSD Wastewater Reclamation Project (Project), there is a high learning curve for auditors to become sufficiently knowledgeable with the District’s financial records to enable them to complete a timely and adequate audit. H&W has also conducted audits of the Project in the past, and although the Project currently utilizes a different auditing firm, H&W’s familiarity with the Project makes it much easier for them to incorporate the Project’s current financial information into the District’s audit report. Based on this familiarity with the operations of the District and the Project, as well as the excellent quality of past audits, District staff is requesting a new three-year proposal from H&W.
H&W has submitted a three-year
proposal to conduct the audits for fiscal year ending 2017, 2018, and 2019 in
the amount of $136,500. The base audit fee
includes costs to cover for Governmental Accounting Standards Board (GASB) 68
standards, which includes standards for pension reporting. In addition, additional fee would be incurred
each year for Comprehensive Annual Financial Report compilation as well as for
implementation and testing of GASB 75, new reporting standards for Other
Post-Employment Benefits. The fee
estimated for FYE 2017 including the additional services is a not-to-exceed
price of $61,500.
RECOMMENDATION: District staff recommends that the Board authorize the Chief Financial Officer to enter into a three-year agreement with Hayashi& Wayland to conduct the annual audit of the District’s financial records for a total cost of $136,500 plus additional fee for CAFR compilation and implementation of GASB75 standards. The Administrative Committee reviewed this item at its June 12, 2017 meeting and recommended _________by a vote of _ to _. Approval of this expenditure is contingent upon adoption of the Fiscal Year 2017-2018 Budget.
BACKGROUND: Annually,
the District is required to secure an independent audit of its financial
operations in conformance with the requirements set by the Governmental
Accounting Standards Board and the California State Controller. Due to the uniqueness of the District’s operations,
including its involvement with the Reclamation Project, the District has used
the accounting firm of H&W to conduct the annual audit of the District’s
financial records since 1989.
20-A Hayashi & Wayland Audit Proposal
file:///U:\staff\Board_Committees\Admin\2017\20170612\20\Item-20.docx