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FINANCE AND
ADMINISTRATION COMMITTEE |
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ITEM: |
ACTION
ITEM |
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3. |
CONSIDER
AUTHORIZATION TO CONTRACT WITH CLIFTONLARSONALLEN LLP TO CONDUCT ANNUAL
FINANCIAL AUDIT FOR FISCAL YEAR ENDING 2023, 2024, and 2025 |
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Meeting
Date: |
August 14, 2023 |
Budgeted: |
Yes |
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From: |
David J.
Stoldt, |
Program/ |
Services & Supplies |
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General
Manager |
Line Item No.: |
Professional Fees |
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Prepared
By: |
Suresh
Prasad |
Cost Estimate: |
$64,000 for 2023, $69,500
for 2024, $74,000 for 2025 Plus additional fee for ACFR
& Other Fees |
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General Counsel Approval: N/A |
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Committee Recommendation: The Finance and Administration Committee reviewed this item on August 14, 2023 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 Wayland (HW) to conduct the annual audit expired with the completion of the audit for Fiscal Year (FY) 2020-2022. 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. HW has also conducted audits of the Project in the past, and although the Project currently utilizes a different auditing firm, HW’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. This experience and familiarity has been beneficial to the District as it relates to the Pure Water Monterey project operation. 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 CliftonLarsonAllen LLP (CLA) (formerly Hayashi Wayland).
CLA has submitted a three-year
proposal to conduct the audits for fiscal year ending 2023, 2024, and 2025 in
the amount of $207,500. 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 Annual Comprehensive Financial Report compilation as well as for State
Controllers Report. The fee estimated
for FYE 2023 including the additional services is a not-to-exceed price of $78,225.
RECOMMENDATION: The Finance and Administration Committee should recommend that the Board authorize the Chief Financial Officer to enter into a three-year agreement with CliftonLarsonAllen LLP to conduct the annual audit of the District’s financial records for a total cost of $207,500 plus additional fee for ACFR compilation and State Controllers Report.
BACKGROUND: Annually,
the District is required to complete 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 HW to conduct the annual audit of the
District’s financial records since 1989.
HW has changed it’s name to CliftonLarsonAllen LLP.
3-A CliftonLarsonAllen LLP Audit Proposal
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