Approve first amendment to Agreement No. 19-77 with Lance, Soll, & Lunghard, LLP Certified Public Accountants to increase funding for Additional Services by $40,000. (General fund impact $40,000) (Haynes) 

Approve first amendment to Agreement No. 19-77 with Lance, Soll, & Lunghard, LLP Certified Public Accountants to increase funding for Additional Services by $40,000. 

In April 2019, the Board of Supervisors approved a three-year contract with Lance, Solle, & Lunghard, LLP (LSL) for independent countywide auditing services for fiscal years 2018-19, 2019-20 and 2020-21. The contract included two one-year options to extend for fiscal years 2021-22 and 2022-23, which were subsequently exercised.  The basic scope of services in the contract includes the annual audit of the County’s financial statements and audit of the County’s Schedule of Federal Financial Assistance (Single Audit), as well as other services such as quarterly audits of the County Treasury.

In additional to the basic services, the contract also includes a scope of work for Additional Services, which includes preparation of the County’s financial statements, providing assistance with the requirements of the GFOA Certificate of Achievement for Excellence in Financial Reporting, and other audit or accounting services as requested by the Chief Financial Officer.  To date, the County has utilized LSL for such additional services as tax consulting correspondence to the IRS and an audit of the Leinberger Replacement Project as required by the Board of State and Community Corrections (BSCC). The contract with LSL includes a $40,000 maximum for Additional Services, of which $21,712 has been spent or obligated.

Due to significant turnover and staffing changes within the Accounting & Financial Reporting division, including the recent departure of the Accounting Manager, the Department of Financial Services (DFS) is in need of additional support in preparing the financial statements for fiscal year 2022-23.  While this work is within the scope of Additional Services in the existing contract with LSL, the cost of this service would exceed the current $40,000 maximum.

It is not uncommon for smaller agencies to contract with their external auditors to prepare financial statements. Doing so does not limit or impair the auditors from conducting an independent audit or issuing an opinion on the presentation of the financial statements.  As such, staff recommends that the Board approve an amendment to the agreement with LSL to increase the maximum funding for Additional Services.

The Department of Financial Services worked with the Procurement Division within the Department of General Services to develop the contract amendment with LSL. 

Vendor Performance
The Department of Financial Services (DFS) confirms LSL has performed satisfactorily on the current agreement. DFS intends to issue a request for proposals (RFP) for independent audit services beginning with fiscal year 2023-24.