HomeMy WebLinkAbout09. Authorize General Manager to execute a contract Agreement not to exceed $171,600 with Maze & ASsociates, to perform audit services FY 22-23 through 2024-25 with option to extend 2 yearsItem 9.
BOARD OF DI RECTORS
POSIT ION PA PER
M E E T ING D AT E:MAY 4, 2023
S UB J E C T: A UT HO R I Z E T HE G E NE R A L MA NA G E R TO E X E C UT E A C O NT R A C T I N
A N A MO UNT NO T TO E X C E E D $171,600 W I T H MA Z E & A S S O C I AT E S,
C E RT I F I E D P R O F E S S I O NA L A C C O UNTA NT S TO P E R F O R M F I NA NC I A L
A UD I T S E RV I C E S F O R F I S C A L YE A R S 2022-23 T HR O UG H 2024-25 W I T H
T HE O P T I O N TO E X T E ND F O R T W O A D D I T I O NA L YE A R S
S UB M I T T E D B Y:
K E V I N MI Z UNO, F I NA NC E MA NA G E R
I NI T I AT I NG D E PART M E NT:
A D MI NI S T R AT I O N-F I NA NC E
RE V IE WE D B Y:P HI L I P L E I B E R , D E P UT Y G E NE R A L MA NA G E R
R oger S . B ailey
General Manager
IS S UE
T he B oard of D irectors is required to appoint the independent auditor to provide prof essional auditing
services necessary to meet Central S an's current and long-term financial reporting needs. W ith the
expiration of C entral San's incumbent contract f or prof essional auditing services on F ebruary 28, 2023,
staf f has conducted competitive solicitation and evaluation procedures, and proposes the B oard approve a
new three-year contract with the option to extend f or two additional years.
B AC K G RO UND
C entral San is required by C alif ornia state law to have an independent audit of the financial statements
completed annually. F or the past 10 f iscal years, the f irm of Maze & Associates has been Central S an's
independent auditors and has worked with staf f to achieve the Government F inance Of f icers A ssociation
(G F O A ) award f or E xcellence in F inancial Reporting. T he G F O A has recently published articles and
guidelines on best practices which encourage local municipal entities to complete a thorough and
competitive bidding process and strive f or the highest quality service, even if it is with the same audit firm.
Since most audit firms do not specialize in the government sector, mandatory rotation of f irms could
prevent agencies from obtaining the best services. I n order to maintain independence, it is required by the
state that the leading audit partner be rotated after every six years.
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R equest for Proposal (R F P) and S election Process
I n March 2023, Central S an released an R F P for professional auditing services. C onsistent with Central
San's policies, the R F P instructed bidders to submit their proposals in two parts: (1) a technical proposal
and (2) a cost proposal. T he purpose of the technical proposal is to demonstrate the qualifications,
competence and capacity of the firm seeking to provide services in accordance with the requirements of
the R F P. T he purpose of the cost proposal is to include all of the pricing information relative to performing
the services described in the R F P, which is both submitted and evaluated separately f rom the technical
proposal.
I n total, f our f irms responded to the R F P : (1) C. J . B rown & C ompany C PAs; (2) C ropper A ccountancy
C orporation; (3) Mann, Urrutia, Nelson, C PAs & Associates L L P; and (4) Maze & Associates. A panel of
five Central S an staf f evaluated the proposals against three separate criteria specif ied in the R F P.
Services requested in the R F P were consistent with those outlined previously.
T he three selection criteria specif ied in the R F P to be included in the technical proposal were based on
the f ollowing:
1. F irm Qualifications, Experience and R eferences 40%
2. Proposed Staf f ing and P roject Organization 30%
3. Proposed A pproach and Work P lan 30%
Total:100%
T he proposal that scored highest by staf f was from Maze & Associates (Maze). Maze is a highly regarded
national f irm that provides all the needed auditing services specif ied in the R F P to a multitude of public
agencies, many of which are located in California and similar to C entral San. I n their proposal, Maze
committed to retaining the same auditing partner (Mr. Alvey), with whom Central S an has worked effectively
with over the past f ew years, for the f irst year of the new contract. T hereaf ter, commencing with the F Y
2023-24 audit, Maze has proposed an audit partner that is similarly qualif ied to Mr. A lvey, with extensive
audit experience in the public sector including over sewer districts.
Term
T he R F P requested, and the contract provides for a total f ive-year term, consisting of an initial three-year
term, with an option to extend an additional two years. Services can be terminated by Central S an at any
time. C osts are discussed in the F inancial I mpact section of this paper.
ALT E RNAT I V E S /C O NS I D E RAT IO NS
T he B oard could extend the current contract with Maze f or another year and issue another R F P later. T his
is not recommended as it is best practice to execute services contracts with a maximum term of 5 years
and to solicit proposals thereafter to ensure competitive pricing and continued quality of services.
F I NANC IAL I M PAC T S
Maze has proposed a fee of $31,600 f or the F Y 2022-23 audit, which is essentially held flat compared to
the prior year audit fee. T he total f or the three-year contract with the optional two-year extension shall not
exceed $171,600. A dditional fees are charged f or work requested by the D istrict which is outside the
scope of the annual audit. Staf f recommends entering into a three-year contract with two optional one-year
extensions.
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C O M M I T T E E RE C O M M E ND AT IO N
T he F inance C ommittee reviewed this matter at its special meeting on A pril 25, 2023 and recommended
approval.
RE C O M M E ND E D B O ARD AC T I O N
Authorize the General Manager to execute a contract in an amount not to exceed $171,600 with Maze &
Associates, Certified P ublic Accountants to provide prof essional auditing services for F iscal Years 2022-
23 through 2024-25 with the option to extend for two additional years.
G O A L FO U R : G overnance and Fiscal R esponsibility
Strategy 3 - Maintain financial stability and sustainability
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