BOARD MEETING DATE: November 5, 1999 AGENDA NO. 14
PROPOSAL:
Amend Contract for Audit Consultant Services
SYNOPSIS:
On October 9, 1998, the Board amended the contract with its independent auditors, Vargas, Lopez and Company, Certified Public Accountants, to provide additional audit consulting services for internal control reviews. The AQMD is completing the process of transitioning to new financial systems which are Year 2000 compliant. Staff recommends that Vargas, Lopez and Company’s contract be amended to include $15,000 in additional audit consultant services. With this amendment, the total cost of consultant services to review and document the internal controls of the new financial systems would not exceed $30,000. Funding for this work is included in the FY 1999-00 Budget.
COMMITTEE:
Not Applicable
RECOMMENDED ACTION:
Amend contract with Vargas, Lopez and Company, LLP in the amount of $15,000 for additional internal control review services, bringing total funding to $30,000 for audit consulting services related to the AQMD’s transition to nes financial systems..
Barry R. Wallerstein, D.Env.
Executive Officer
Background
On October 9, 1998, the Board amended the contract with its independent auditors, Vargas, Lopez and Company, Certified Public Accountants, to provide additional audit consulting services for internal control reviews. The AQMD is completing the process of transitioning to new financial systems which are Year 2000 compliant. During this transition year, AQMD has been operating two software systems with different requirements and procedures. Based on the auditor’s experience with AQMD’s procedures and internal controls, the contract with our auditors was amended to provide additional audit services during the financial systems’ conversion to ensure that internal controls would be in place to support the changes necessary to implement these new financial systems. At that time, due to a limited budget for this work ($15,000), only a review of the Financials (accounting, purchasing, accounts payable, fixed assets) was covered. The original amount to complete a review of all internal controls (which would include payroll, human resources, and projects) relating to the new PeopleSoft implementation was $30,000.
Proposal
Due to the special circumstances of system conversion, staff proposes that the contract with Vargas, Lopez and Company, LLP be amended to complete the review and documentation of internal controls.
Resource Impacts
With this amendment, the total cost of audit consultant services to review and document the internal controls of the new financial systems would not exceed $30,000. Funding for this work is included in the FY 1999-00 Budget.
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