BOARD MEETING DATE: October 9, 1998 AGENDA NO. 18
PROPOSAL:
Amend Contract with Vargas, Lopez and Company LLP for Independent Audit Services
SYNOPSIS:
On June 14, 1996, the Board awarded a three-year contract to Vargas, Lopez and Company, Certified Public Accountants, for financial audit services. The contract for the FY audit ending June 30, 1998 expires on June 30, 1999. The AQMD is in the process of transitioning to new financial systems which are Year 2000 compliant. Staff recommends that Vargas, Lopez and Company’s contract be extended for one additional year and amended to include consulting services for internal control review. The total cost of this amendment would not exceed $35,900; $20,900 for financial audit services to be included in the FY 1999-2000 budget, and $15,000 for consultant services available in the current budget.
COMMITTEE:
Administrative, September 18, 1998, Recommended for Approval
RECOMMENDED ACTION:
Amend contract with Vargas, Lopez and Company, LLP for one additional year of financial audit services for the fiscal year ending June 30, 1999 and for additional consulting services for internal control review at a total cost not to exceed $35,900.
Barry R. Wallerstein, D.Env.
Acting Executive Officer
Background
On June 14, 1996, the Board awarded a three-year contract to Vargas, Lopez and Company, LLP for financial audit services. The contract expires on June 30, 1999 for the fiscal year audit ending June 30, 1998. The AQMD is in the process of transitioning to a new financial system which is year 2000 compliant. During this transition year, AQMD will be operating two software systems with different requirements and procedures. Based on the auditor’s experience with AQMD’s procedures and internal controls, extending the contract for one year of additional audit services and amending it to include consulting services during the financial systems conversion would ensure that internal controls would be in place to support the changes necessary to implement these new financial systems.
Proposal
Due to the special circumstances of system conversion, staff proposes that the contract with Vargas, Lopez and Company, LLP be extended for one additional year and amended to include consulting services for internal control review during the new financial systems conversion. Our practice of releasing an RFP every three years for audit services will be resumed next year.
Resource Impacts
Total contract amendment costs are not to exceed $35,900. Sufficient funds are included for the internal control review in the FY 1998-99 Budget. The funds for the fourth year financial audit will be included in the FY 1999-2000 Budget.
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