For City Council Meeting [September 24, 2019]
TO: Honorable Mayor and City Council
APPROVAL: Rod Foster, City Administrator
FROM: Jessica Brown, Finance Director
Title
Request City Council Authorize the Engagement of Teaman, Ramirez & Smith, Inc. for Independent Audit Services for the 2018-19 Audit and Comprehensive Annual Financial Report.
Body
BACKGROUND
On June 26, 2018, the City Council approved a three year professional services agreement with Teaman, Ramirez and Smith, Inc. (TRS) for independent audit services for fiscal year 2017-18, through 2019-20. On September 16, 2019, the City received the 2018-19 audit engagement letter from TRS.
ANALYSIS/DISCUSSION
The engagement letter defines the 2018-19 audit process including:
• The objectives of the engagement;
• Responsibilities of management;
• Responsibilities of the auditor;
• Limitations of the engagement;
• Associated fees; and
• Preliminary timeline.
It is anticipated that the first phase of the audit process begin the end of September through October with the interim and yearend request lists being issued to the City. The interim audit fieldwork is anticipated to take place the end of October and the yearend audit fieldwork the first two weeks of November, with draft financial statements prepared by mid-December.
Approval of this item will allow the City to engage TRS for independent audit services for the 2018-19 fiscal year.
ENVIRONMENTAL IMPACT
The action is exempt from California Environmental Quality Act (CEQA) pursuant to Section 15378(b) (5) of the CEQA Guidelines because the preparation of a budget plan is a governmental administrative activity that will not result in direct or indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY
General Plan Guiding Principle 3 - Rialto's Economic Environment Is Healthy and Diverse - specifically, our City government will lead by example, and will operate in an open, transparent, and responsive manner that meets the needs of the citizens and is a good place to do business.
LEGAL REVIEW
The City Attorney has reviewed and supports this staff report.
FINANCIAL IMPACT
Operating Budget Impact
There is no financial impact associated with the approval of this item as the City Council approved professional services agreement with Teaman, Ramirez & Smith, Inc. includes fiscal year 2018-19 as its second year of independent audit services. Approval of this item authorizes the engagement of said services for 2018-19. The cost associated with the 2018-19 audit is $71,500 and is included in the 2019-20 budget.
Capital Improvement Budget Impact
There is no financial impact to the capital improvement budget as a result of the approval of this item.
RECOMMENDATION
Staff recommends that the City Council authorize the engagement of Teaman, Ramirez & Smith, Inc. for independent audit services for the 2018-19 audit and comprehensive annual financial report.