TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Javier Carcamo, Finance Director
PREPARED BY: Chauntal Anderson, Purchasing and Contracts Coordinator
SUBJECT:
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First Amendment with Rogers, Anderson, Malody & Scott, LLP
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RECOMMENDATION
recommendation
Approve the First Amendment to the Agreement for Financial Auditing Services between the City of Murrieta and Rogers, Anderson, Malody & Scott, LLP (RAMS); and
Amend the Operating Budget for Fiscal Year 2024/25.
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PRIOR ACTION/VOTE
On April 18, 2023, the City Council authorized a three year agreement with Rogers, Anderson, Malody & Scott, LLP (RAMS). (Vote: 4-0-1)
CITY COUNCIL GOAL
Maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency.
BACKGROUND
On January 17, 2023, the Finance Department ran a Request for Proposals (RFP) for the City of Murrieta (City) financial auditing services. The City received proposals from four firms with RAMS identified as providing the best overall value to the City.
On April 18, 2023, the City Council approved a professional service agreement with RAMS. RAMS is a licensed Certified Public Accounting (CPA) that specializes in auditing local government. The original agreement term was for three (3) fiscal years, with an option for two (2) one (1) year renewals. In consideration of the services to be performed by RAMS, the City agreed to pay the external audit firm $143,590 for the initial three-year term of the agreement. If the two optional years are exercised, the total five-year agreement would be $253,150.
RAMS has completed the first fiscal year of its contract and has exceeded the department’s expectations for its timeliness and quality of work. However, based on the number of hours allocated to our City to complete the first-year audit, RAMS has requested that, effective with the fiscal year 2024 audit, an annual increase of 5% is applied to our previous proposal. Without an adjustment to the payment terms, this will likely impact the quality of the audit as they have to adjust the hours assigned to the audit, which, in turn, may force the City to terminate the engagement. Disruption of audit services can affect the City’s ability to complete the audit and financial statements in time. In addition, the total proposed fee increase is below that of the audit firm that came in second place during the RFP process.
To ensure consistency and to ensure the additional renewal years can be exercised, we would like to proceed with honoring RAMS's request for a 5% annual increase to the already approved annual rates, as listed below.
FISCAL IMPACT
Staff recommends amending the Fiscal Year 2024/25 Operating Budget to increase 1102600-60200 by $2,365 for Fiscal Year 2023/24 audit. The remaining years of the agreement will be budgeted as part of the subsequent Biennial Budget process.
Previously approved rates in 2023
|
Fiscal Year |
Fiscal Year Amount |
|
2022-23 |
$47,300 |
|
2023-24 |
$47,300 |
|
2024-25 |
$48,900 |
|
Total |
$143,590 |
|
If the option to renew is exercised |
|
|
2025-26 |
$48,990 |
|
2026-27 |
$50,570 |
|
Grand Total |
$253,150 |
Newly proposed rates with a 5% increase
|
Fiscal Year |
Fiscal Year Amount |
|
2022-23 |
$47,300 |
|
2023-24 |
$49,665 |
|
2024-25 |
$52,148 |
|
Total |
$149,113 |
|
If the option to renew is exercised |
|
|
2025-26 |
$54,755 |
|
2026-27 |
$57,493 |
|
Grand Total |
$261,361 |
ATTACHMENTS
1. First Amendment
2. Murrieta Increase Letter