H.7_Amended & Restated Agreement with LSL for Financial Auditing Services-2City of Grand Terrace
Amended & Restated
Professional Services Agreement
with Lance, Soll & Lunghard, LLP for
Financial Auditing Services
February 9, 2021
2030 Vision
Goal #1:
Ensure Our Fiscal Viability through
the continuous monitoring of
receipts and disbursements against
approved budget appropriations.
2
Gov’t Accounting Standards Board (GASB)
•The Government Accounting Standards Board
(GASB) establishes financial & accounting
standards for US State & local governments that
follow Generally Accepted Accounting Principles
(GAAP);
•The GASB standards are recognized as
authoritative by state and local governments, state
Boards of Accountancy, and the American Institute
of CPAs (AICPA).
3
Gov’t Accounting Standards Board (GASB)
•The Board develops and issues accounting
standards through a transparent and inclusive
process intended to promote financial reporting
that provides useful information to taxpayers,
public officials, investors, and others who use
financial reports.
4
Gov’t Accounting Standards Board (GASB)
•Since the award of the Financial Auditing Services
agreement to Lance, Soll & Lunghard (LSL), the
Board has instituted additional accounting and
reporting requirements that have been added to
the agreement.
5
Current Agreement
•The City awarded a five -year financial auditing
services agreement to Lance, Soll & Lunghard
(LSL) in 2014;
•In 2018, said agreement was extended for
another 2 years, until 2020;
6
Current Agreement
•Since contract award in 2014, additional reporting
requirements have been added:
1.Housing Successor
Annual Financial Reports;
2.GASB Standard 68 –requiring different
accounting and financial reporting of pensions,
liabilities;
3.GASB Standard 75 –requiring different
accounting & financial reporting of other post -
employment benefits other than pensions.7
ORIGINAL AGREEMENT
Category FY2013-14 FY2014-15 FY2015-16 FY2016-17 FY2017-18
Audit Services $19,090 $19,660 $20,250 $20,860 $21,490
Annual Financial Report Preparation $3,430 $3,530 $3,640 $3,750 $3,860
State Controller’s Report $2,930 $3,020 $3,110 $3,200 $3,300
Annual Street Report $900 $930 $960 $990 $1,020
SUB-TOTAL $26,350 $27,140 $27,960 $28,800 $29,670
Additional Required Reports
Housing Successor $0 $0 $5,500 $5,500 $5,500
Gov. Acctg. Standards Board
(GASB) Statement 68 Report $0 $0 $0 $0 $0
ADJUSTED TOTAL $26,350 $27,140 $33,460 $34,300 $35,170
Single Audit (if required)$3,180 $3,280 $3,380 $3,480 $3,580
GRAND TOTAL $29,530 $30,420 $31,340 $32,280 $33,250
3.00%3.02%2.50%2.50%
2-YEAR EXTENSION
Category FY2018-19 FY2019-20
Audit Services $21,490 $21,920
Annual Financial Report Preparation $3,860 $3,937
State Controller’s Report $3,300 $3,366
Annual Street Report $1,020 $1,040
SUB-TOTAL $29,670 $30,263
Additional Required Reports
Housing Successor $5,500 $5,610
Gov Acctg Standards Board (GASB)
Statement 68 Report $2,000 $2,040
ADJUSTED TOTAL $37,170 $37,913
Single Audit (if required)$3,580 $3,652
GRAND TOTAL $40,750 $41,565
0.00%2.00%
Effect of the COVID -19 Pandemic
•Interaction between agencies, has been restricted to
e-mail, zoom meetings, regular mail and faxes;
•Requests for information, documents, files, prior
reports has required extensive scanning, access to
file transfer protocol (FTP) sites to upload huge data
files;
•LSL’s institutional knowledge of the City’s financial
system will continue a smooth and efficient annual
audit;
10
Effect of the COVID -19 Pandemic
•LSL is cognizant of the effect the pandemic has
had on local agencies and therefore, has
proposed fees for FY2020-21 the same as their
FY2017-18 and FY2018 -19 fees.
•In addition, the original agreement showed
costs increasing by 3% for the first couple of
years, lowering to 2.5% upon the addition of
GASB required reporting;
11
AMENDED &
RESTATED
OPTIONAL
2-YEAR
Category FY2020-21 FY2021-22 FY2022-23 FY2023-24
Audit Services $21,490 $21,920 $22,358 $22,805
Annual Financial Report $3,860 $3,937 $4,016 $4,097
State Controller’s Report $3,300 $3,366 $3,433 $3,502
Annual Street Report $1,020 $1,040 $1,061 $1,082
SUB-TOTAL $29,670 $30,263 $30,868 $31,486
Additional Required Reports
Housing Successor $5,500 $5,610 $5,722 $5,837
Gov. Acct. Standards Board
(GASB) Statement 68 Report $2,000 $2,040 $2,081 $2,122
ADJUSTED TOTAL $37,170 $37,913 $38,671 $39,445
Single Audit (if required)$3,580 $3,652 $3,725 $3,799
GRAND TOTAL $40,750 $41,565 $42,396 $43,244
-2.00%2.00%2.00%2.00%
Recommendation
•Staff recommends that City Council approve an
Amended & Restated Professional Agreement
with LSL for financial auditing services for
FY2020-21 and FY2021 -22,;
•Authorize the City Manager to execute two
additional extensions; and
•Authorize the Mayor to execute the Amended &
Restated Agreement.
13
Questions?