DATE: October 8, 2024
TO: Board of Supervisors
SUBMITTED BY: Paul Nerland, County Administrative Officer
SUBJECT: Retroactive Amendment No. 1 to Audit Services Agreement No. 24-292 with CliftonLarsonAllen, LLP
RECOMMENDED ACTION(S):
TITLE
Approve and authorize the Chairman to execute a retroactive Amendment No. 1 to Audit Services Agreement, amending Agreement No. 24-292 with CliftonLarsonAllen, LLP, effective September 23, 2024, with no change to the term, revising the scope of the Agreement, authorizing the Auditor-Controller/Treasurer-Tax Collector or the County Administrative Officer to sign audit engagement letters, authorizing the County Administrative Officer to request additional services if required, and increasing the maximum compensation by $342,226 to a total not to exceed $1,259,315.
REPORT
Approval of the recommended action will retroactively amend Agreement 24-292 with CliftonLarsonAllen, LLP (CLA), to increase the maximum compensation amount to include audits of the County’s grant programs issued by the Board of State and Community Corrections and the California Department of Insurance. Although the County in its Request for Proposal for External Audit Services, sought external audit services for these programs, neither CliftonLarsonAllen’s proposal nor Agreement 24-292 included those services. The recommended amendment adds those services. Approval of the recommended action will also allow for revision of the scope of the agreement to authorize the County Administrative Officer to request additional services, if required, to a maximum compensation not to exceed $200,000 over the whole term of the agreement, to remove incorrect references to a Treasury Oversight audit which is not covered by the agreement, and to authorize the Auditor-Controller/Treasurer-Tax Collector or the County Administrative Officer, or the CAO’s designee, to sign annual audit engagement letters. There is no additional Net County Cost associated with the recommended action. The item is countywide.
RETROACTIVE AGREEMENT:
The recommended Amendment is retroactive to September 23, 2024, due to length of time required to have the amendment reviewed and approved by CLA’s legal counsel. The signed agreement was received from CLA on September 25, 2024. The work was initiated prior to October 8, 2024, through a purchase order in the amount of $25,740, to meet the audit deadline imposed by the California Department of Insurance.
FISCAL IMPACT:
There is no increase in Net County Cost associated with this item. The maximum annual cost for the FY 2023-24 audit will increase by $65,740 from $165,969 to $231,709. The five-year contract maximum will increase from $917,089 to $1,259,315 and includes a 5% annual increase for the Board of State and Community Corrections and the California Department of Insurance grant audits and an annual maximum of $40,000, for additional future services to be requested by the CAO if required. Sufficient appropriations are included in the FY 2024-25 Interest and Miscellaneous Org. 2540 Adopted Budget to cover the increase cost, and future budget requests will include additional appropriations to fund the costs associated with the audits performed under this agreement.
DISCUSSION:
On June 18, 2024, your Board approved Agreement 24-292 with CliftonLarsonAllen, LLP for independent and professional external audit services. Although the County in its Request for Proposal No. 24-050 for External Audit Services, sought independent and professional external audit services including audits of the Board of State and Community Corrections and California Department of Insurance grant programs, neither the Contractor’s Proposal nor the Agreement included those services.
During the term of the agreement, the County might also require additional audit services. For example, the County might obtain a new State grant that requires audits not covered by the agreement or amendment. If the County requires such services, the County’s Audit Coordinator, with approval from the CAO, will request additional services for a maximum amount payable not to exceed $40,000 for any Fiscal Year covered by the agreement.
The amendment also revises the scope to remove an incorrect reference to a Treasury Oversight audit which is covered by a different agreement for external audit services and not covered by the County’s agreement with CliftonLarsonAllen. The amendment also authorizes the County’s Auditor-Controller/Treasurer-Tax Collector or CAO, or the CAO’s designee, to sign annual engagement letters. Although neither the Contractor’s Proposal nor the Agreement included reference to an annual engagement letter, after the parties signed the Agreement, the Contractor indicated that it wishes to receive an engagement letter from the County before proceeding with services for each Fiscal Year covered by the Agreement.
REFERENCE MATERIAL:
BAI #29, June 18, 2024
ATTACHMENTS INCLUDED AND/OR ON FILE:
On file with Clerk - Amendment No. 1 to Agreement with CliftonLarsonAllen, LLP
On file with Clerk - Electronic Signature Verification
CAO ANALYST:
Paige Benavides