HomeMy WebLinkAboutMINUTES - 12141993 - 1.124 J_ __ 124 }
TO: BOARD OF SUPERVISORS s•• Contra
FROM: Phil Batchelor, County Administrator
Costa
�. .:.. _ .=
December 13, 1993 County
�• L'4o
DATE: c'rAq c'an`t. r
SUBJECT: CONTRACT FOR ACCOUNTS PAYABLE AUDIT
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
APPROVE and AUTHORIZE the County Administrator to execute a
contract with Loder, Drew & Associates (LDA) to conduct an accounts
payable .audit of payments made by Contra Costa County for the past
two years . Payment to the contractor consists entirely of
contingency payments based on the amount recovered by the
contractor. The . contract term is September 1, 1993 through
December 31, 1993, although the contract will be extended for a few
months once it has been determined what period of time will
actually be required for the engagement to be completed.
BACKGROUND:
The purpose of an accounts payable audit is to identify duplicate
payments, overpayments, missed discounts, sales and use tax errors,
freight overpayments, missed volume purchase agreements, missed
promotional allowances, and real estate expenses overpayments .
LDA proposes to perform a 100% review of all accounts payable
transactions for the period July 1, 1991 through June 30, 1993.
The audit will include a manual review and an electronic review
using the firm' s proprietary software. LDA will provide the County
with a management report that will identify internal control
weaknesses discovered during the course of the audit. LDA will
also identify and document cases where the County is entitled to
repayments from vendors and will.
CONTINUED ON ATTACHMENT: YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR - RECOMMENDATION OF BOARD COMMITTEE
-L-APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON Der-ember 14, 19,93 APPROVED AS RECOMMENDED 2!�, OTHER
VOTE OF SUPERVISORS
1 HEREBY CERTIFY THAT THIS IS A TRUE
UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATES SHOWN.?`/
ATTESTED i`J�` ce- y/t�a / f L �07-3
Contact: PHIL BATCHELOR,CLERK OF THE BOARD OF
CC: County Administrator SUPERVISORS AND COUNTY ADMINISTRATOR
Auditor-Controller
County Counsel
Loder, Drew & Associates (Via CAO)Y Lam" DEPUTY
_2_
LDA is reimbursed on the basis of the amount the County recovers as
a result of LDA's efforts. The contingency recovery provides for
LDA to be paid as follows :
50% of the amount of each recovery totaling $ 0 - $2,500
40% of the amount of each recovery totaling $2,501 - $3,500
30% of the amount of each recovery totaling $3,501 - $5,000
25% of the amount of each recovery totaling more than $5,000.
We believe that it will be helpful to have an outside review of the
County' s payment activities and any advice the contractor may be
able to offer to improve our procedures for the payment of bills in
the future. The contractor is paid only when the County actually
recovers funds as a result of the contractor's activities .
1
November 8, 1993
Mr. Paul Abelson
Systems Accountant
Contra Costa County
625 Court Street
Martinez, CA 94553
Dear Paul:
Enclosed is a fully executed agreement to provide Contra Costa County with our accounts
payable audit service. I will contact you shortly to discuss the audit commencement date.
If you have any questions, please do not hesitate to contact me.
Sincerely,
LODER, DREW and ASSOCIATES, Inc.
i
onald K. Loder
\yl
Six Venture • Suite 212
Irvine, California 92718
(714)753-1700•FAX(7 14)753-1420
.Contra Costa- County Number
Standard Form 1/87 STANDARD CONTRACT Fund/Org # -101
(Purchase of Services) Account # 2310
1. Contract Identification. Other #
Department: County Administrator
Subject: Accounts Payable Audit
2. Parties. The County of Contra Costa, California (County), for its Department named-above,
and the following, named Contractor mutually agree and promise as follows:
Contractor: Loder Drew & Assocs.
Capacity: Corporation Taxpayer ID # 33-0213893
Address: Six Venture, Ste 212
Irvine, CA 92718
3. Term. The effective date of this Contract is September 1, 1993 and it terminate!
December 31, 1993 unless sooner terminated as provided lerein.
4. Pavment Limit. County's total payments to Contractor under this Contract shall not excee(
- Contractor to be paid on contingency.
5. County's Obligations. County shall make to the Contractor those payments described it
the Payment Provisions attached hereto which are incorporated herein by reference, subject
to all the terms and conditions contained or incorporated herein.
6. Contractor's Obligations. Contractor shall provide those services and carry out that work
described in the Service Plan attached hereto which is incorporated herein by reference,
subject to all the terms and conditions contained or incorporated herein.
7. General and Special Conditions. This Contract is subject to the General Conditions and
Special Conditions (if any) attached hereto, which are incorporated herein by reference.
8. Project. This Contract implements in whole or in part the following described Project,
the application and approval documents of which are incorporated herein by reference:
*
9. Legal Authority. This Contract is entered into under and subject to the following legal
authorities: Government Code section 31000
10. Signatures. These signatures attest the parties' agreement hereto:
COUNTY OF CONTRA COSTA, CALIFORNIA
BOARD OF SUPERVISORS ATTEST: Phil Batchelor, Clerk of the Board
of Supervisors and County Administrator
By By
Chairman/Designee Deputy
CONTRACTOR
y
By ,�-a4 _ _ g
Designate business capacity A (Designate business capacity B
* The project set forth in Contractor' s proposal as modified by the Payment
Provision, Service Plan, Special Conditions and General Conditions.
Note to Contractor: For corporations (profit or nonprofit), the contract Bust be signed by two officers. Signature A mist be that
of the pres ant or vice-president and Signature B mist be that of the secretary or assistant secretary (Civil Code Section 1190. and
Corporations Code Section 313). All signatures mist be acknowledged as set forth on papa two.
APPROVALS/ACKNOWLEDGEMENT
Number
APPROVALS
RECOMMENDED BY DEPARTMENT FORM APPROVED
By By ( )
Designee _0
APPROVED: COUNTY ADMINISTRATOR
By .
Designee
ACKNOWLEDGEMENT
State of California ACKNOWLEDGEMENT (by Corporation,
Partnership, or Individual)
County of
The person(s) signing above for Contractor, personally known to me in the
individual or business capacity(ies) stated, or proved to me on the basis of
satisfactory evidence to be the stated individual or the representatives)
of the partnership or corporation named above in the capacity(ies) stated,
personally appeared before me today and. acknowledged that he/she/they exe-
cuted it, and acknowledged to me that the partnership named above executed
it or acknowledged to me that the corporation named above executed it pur-
suant to its by-laws or a resolution of its board of directors.
Dated: �� �/ 3
[Notarial Seal]
OFFICIAL SEAL Notary Public Deputy County Clerk
U 1
SUSAN MUSSO
x NOTARY PUBLIC-CALIFORNIA
• ORANGE COUNTY
My Comm.Expires May 5,1995
-2-
t;ENElk AL CONDITIONS
(Purchase of Services)
1. Compliance with Law. Contractor shall be subject to and comply with all
Federal, State and "local laws and regulations applicable with respect to its perfor-
mance under this Contract, including but not limited to, licensing, employment and
purchasing pr;act.ices;_ and wages, hours and conditions of employment , including
nondiscrimination..
2. Inspection. Contractor's performance, place of business and records per-
taining to thi's Contract are subject to monitoring, inspection, review and audit by
authorized represe.nta't;ives of the County, the State of California, and the United
States Government.
3:. Records. Contractor shall keep and make available for inspection and
copying by-authorized. representatives of the County, the State of California, and the
United States Government, the Contractor's regular business records and such addi-
tional records pertaining to this Contract as may be required by the County.
a. Retention of Records. The Contractor shall retain all documents per-
taining to this Contract for five years from the date of submission of Contractor's
final payment demand or final 'Cost Report; for any further period that is required by
law; and until all Federal/State audits are complete and exceptions resolved for this
contract's funding period. Upon request, Contractor shall make these records avail-
able to authorized representatives of the County, the State of California, and the
United States Government.
b. Access to Books and Records of Contractor, Subcontractor. Pursuant to
Section 1861(v)(1) of_ the- Social Security Act, and any regulations promulgated
thereunder, Contractor shall, upon written request and until the expiration of four
years after the furnishing of ,services pursuant to this Contract, make available to
the Secretary of Health and Human Services or to the Comptroller General, or any of
their duly authorized representatives, this. Contract and books, documents, and
records of Contractor that are necessary to certify the nature and extent of all
costs and charges hereunder.
Further , if Contractor carries out any of the duties of this Contract through a
subcontract with a value or cost of $10,000 or more over a twelve-month period, such
subcontract shall contain a clause to the effect that upon written request and until
the expiration of four years after the furnishing of services pursuant to such
subcontract, the subcontractor shall make available, to the County, to the Secretary
or .to the Comptroller General, or any of their duly authorized representatives, the
subcontract and books, documents, and records of the subcontractor that are necessary
to verify the nature and extent of all costs and charges thereunder.
This special condition is in addition to any and all other terms regarding the main-
tenance or retention of records under this Contract and is binding on the heirs,
successors, assigns and representatives of Contractor.
4. Reporting Requirements. Pursuant to Government Code 57550, Contractor shall
include in all documents or :written reports completed and submitted to County in
accordance with this Contract, a separate section listing the numbers and dollar
amounts of all contracts and subcontracts relating to the preparation of each such
document or written report. This section shall apply only if the payment limit under
this Contract exceeds $5,000.
-1-
1
GENERAL CONDITIONS v
(Purchase of Services)
S. Termination.
a. Written Notice. This Contract may be terminated by either party, at
their sole discretion, upon thirty-day advance written notice thereof to the other,
and may be cancelled immediately by written mutual consent.
b. Failure to Perform. The County, upon written notice to Contractor, may
immediately terminate this Contract should the Contractor fail to perform properly
any of its obligations hereunder. In the event of such termination, the County may
proceed with the work in any reasonable manner it chooses. The cost to the County of
completing Contractor's performance .shall be deducted from any sum due the Contractor
under. this Contract, without prejudice to the -County's rights otherwise to recover
its damages.
c. Cessation of Funding. Notwithstanding Paragraph S.a. above, in the
event that Federal, State, or other non-County funding for this Contract ceases, this
Contract is terminated without notice.
6. Entire Agreement. ' This Contract contains all the terms and conditions
agreed upon by the parties. Except as expressly provided herein, no other
understanding, oral or otherwise, regarding the subject matter of this Contract shall
be deemed to exist or to bind any of the parties hereto.
7. Further Specifications for Operating Procedures. Detailed specifications of
operating procedures and budgets required by this Contract, including but not limited
to, monitoring, evaluatingg auditing, billing, or regulatory changes, may be devel-
oped and set forth in a written Informal Agreement between the Contractor and the
County. Such Informal Agreements shall be designated as such and shall not be
amendments to this Contract except .to the extent that they further detail or clarify
that which is already required hereunder. Such Informal Agreements may not enlarge
in any manner the scope of this Contract, including any sums of money to be paid the
Contractor as provided herein. Informal Agreements may be approved and signed by the
head of the County Department for which this Contract is made or his designee.
S. Modifications and Amendments.
a. General Amendments. This Contract may be modified or amended by a
written document executed by the Contractor and the Contra Costa County Board of
Supervisors or, after Board approval, by its designee, subject to any required State
or Federal approval.
b. Administrative Amendments. Subject to the Payment Limit, the Payment
Provisions and the Service Plan may be amended by a written administrative amendment
executed by the Contractor and the County Administrator or his designee, subject to
any required State or Federal approval, provided that such administrative amendments
may not materially change the Payment Provisions or the Service Plan.
9. Disputes. Disagreements between the County and Contractor concerning the
meaning, requirements, or performance of this Contract shall ' be subject to final
determination in writing by the head of the County Department for which this Contract
is made or his designee or in accordance with the applicable procedures (if any)
required by the State or Federal Government .
-2-
GENERAL CONDITIONS
(Purchase of Services)
10. Choice of Law and Persorial Jurisdiction.
1
a. This Contract is made in Contra Costa County and shall be governed and
construed in accordance with the laws of the State of California.
b. Any action relating to this Contract shall be instituted and prosecuted
in the courts of Contra Costa County, State of California.
11. Conformance with Federal and State Regulations and Laws. Should Federal or
State regulations or laws touching upon the- subject of this Contract be adopted or
revised during the term hereof, this Contract shall be deemed amended to assure
conformance with such Federal or State requirements.
12. No Waiver by County. Subject to Paragraph 9. (Disputes) of these General
Conditions, inspections or approvals, or statements by any officer, agent or employee
of the County indicating the Contractor's performance or any part thereof complies
with the requirements of this Contract, or acceptance of the whole or any part of
said performance, or payments therefor, or any combination of these acts, shall not
relieve the Contractor's obligation to fulfill this Contract as prescribed; nor shall
the County be thereby estopped from bringing any action for damages or enforcement
arising from any failure to comply with any of the terms and conditions of this
Contract.
13. Subcontract and Assignment. This Contract binds the heirs, successors,
assigns and representative; of Contractor. The Contractor shall not enter into
subcontracts for any work contemplated under this Contract and shall not assign this
Contract or monies due or to become due, without the prior written consent of the
County Administrator or his designee, subject to any required State or Federal
approval.
14. Independent Contractor Status. This Contract is by and between two
independent contractors and is not intended to and shall not be construed to create
the relationship' between the parties of agent, servant, employee, partnership, joint
venture or association.
15. Conflicts of Interest. Contractor, its officers, partners, associates,
agents, and employees, shall not make, participate in making, or in any way attempt
to use the position afforded them by this Contract to influence any governmental
decision in which he or she knows or has reason to know that he or she has a
financial interest under California Government Code Sections 87100, et seq., or
otherwise.
16. Confidentiality. Contractor agrees to comply and to require its officers,
partners, associates, agents and employees to comply with all applicable State or
Federal statutes or regulations respecting confidentiality, including but not limited
to, the identity of persons served under this Contract, their records, or services
provided them, and assures that:
a. All applications and records concerning any individual made or kept by
Contractor or any public officer or agency in connection with the administration of
or relating to services provided under this Contract will be confidential, and will
not be open to examination for any purpose not directly connected with the
administration of such service.
-3-
GENERAL CONDITIONS
(Purchase of Services)
b. No person will publish or disclose or permit or cause to be published or
disclosed, any list of persons receiving services , except as may be required in the
administration of such service. Contractor agrees to inform all employees , agents
and partners of the above provisions, and that any person knowingly and intentionally
.,disclosing such information other than as authorized by law may be guilty of a
misdemeanor.
17. Nondiscriminatory Services. Contractor agrees that all goods and services
under this Contract shall be available to all qualified person's regardless of age,
sex, race, religion, color, national origin, or ethnic background, or handicap, and
that none shall be used, in whole or in part, for religious worship or instruction.
18. Indemnification. The Contractor shall defend, indemnify, save, and hold
harmless the County and its officers and employees from any and all clai-Es, costs and
liability for any damages, sickness, death, or injury to ' person(s) or property,
including without limitation all consequential damages, from any cause whatsoever
arising directly or indirectly from or connected with the operations or services of
the Contractor or its agents, servents, employees- or subcontractors hereunder, save
and except claims or litigation arising through the sole negligence or sole willful
misconduct of the County or its officers or employees. Contractor will reimburse the
County for any expenditures, including reasonable attorneys fees, the County may make
by reason of the matters that are the subject of this indemnification, and if
requested by the County will defend any claims or litigation to which this
indemnification provision applies at the sole cost and expense of the Contractor.
19. Insurance. During the entire term of this Contract and any extension or
modification thereof, the Contractor shall keep in effect insurance policies meeting
the following insurance requirements unless otherwise expressed in the Special
Conditions:
a. 'Liability Insurance. The Contractor shall provide comprehensive liabi-
lity insurance,' including coverage for owned and non-owned automobiles, with a
minimum combined single limit coverage of $500,000 for all damages, including
consequential damages, due to bodily injury, sickness or disease, or death to any
person or damage to or destruction of property, including the loss of use thereof,
arising from each occurrence. Such insurance shall be endorsed to include the County
and its officers and employees as additional insureds as to all services performed by
Contractor under this agreement. Said policies shall constitute primary insurance as
to the County, the State and Federal Governments, and their ..officers, agents, and
employees, so that other insurance policies held by them or their self-insurance
ptogram(s) shall not be required to contribute to any loss covered under the
Contractor's insurance policy or policies.
b. Workers' Compensation. The Contractor shall provide workers'
compensation insurance coverage for its employees.
c. Certificate of Insurance. The Contractor shall provide the County with
(a) certificate(s) of insurance evidencing liability and worker's compensation
insurance as required herein .no later than the effective date of this Contract. If
the Contractor should renew the insurance policy(ies) or acquire either a new
insurance policy(ies) or amend the coverage afforded through an endorsement to the
policy at any time during the term of this Contract, then Contractor shall provide
(a) current certificate(s) of insurance.
d. Additional Insurance Provisions. The insurance policies provided by the
Contractor shall include a provision for thirty (30) days written notice to County
before cancellation or material change of the above specified coverage.
-4-
GENERAL CONDITIONS
(Purchase of Services)
20. Notices. All notices provided for by this Contract sha11 be in writing and
may be delivered by deposit in the United States mail, postage prepaid. Notices to
the County shall be addressed to the head of the County Department for which this
Contract is made. Notices to the Contractor shall be addressed to the Contractor' s
address designated herein. The effective date of notice shall be the date of deposit
in the mails or of other delivery, except that the effective date of notice to the
County shall be the date of receipt by the head of the County Department for which
this Contract is made.
21. Primacy of General Conditions. Except for Special Conditions which
expressly supersede General Conditions, the Special Conditions (if any) and Service
Plan do not limit any term of the General Conditions.
22. Nonrenewal. Contractor understands and agrees that there is no
representa�.ion, implication, or understanding that the services provided by
Contractor under this Contract will be purchased . by County under a new contract
following expiration or termination of this Contract, and waives all rights dr claims
to notice or hearing respecting any failure to continue purchase of all or any such
services from Contractor.
23. Possessory Interest. If this Contract results in the Contractor having
possession of, claim �to or right to the possession of land or improvements, but does
not vest ownership of the land or improvements in the same person, or if this
Contract results in the plLmement of taxable improvements on tax exempt land (Revenue
& Taxation Code §107), such interest or ,improvements may represent a possessory
interest subject to property tax, and Contractor may be subject to the payment of
property taxes levied on such interest . Contractor agrees that this provision
complies with the notice requirements of Revenue & .Taxation Code §107.6, and waives
all rights to further notice or to damages under that or any comparable statute.
24. No Third-Party Beneficiaries. Notwithstanding mutual recognition that
services under this Contract may provide some aid or assistance to members of the
County's population, it is not the intention of either the County or Contractor that
such individuals occupy the position of intended third-party beneficiaries of the
obligations assumed by either party to this Contract.
25. Copyrights and Rights in Data. Contractor shall not publish or transfer any
materials produced or resulting from activities supported by this agreement without
the express written consent of the County Administrator. If any material is subject
to copyright, the County reserves the right to copyright such and the Contractor
agrees not to copyright such material. If the material is copyrighted, the County
reserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish,
and use such materials, in whole or in part, and to authorize others to do so.
-5-
GENERAL CONDITIONS
(Purchase of Services)
26. Required Audit. If Contractor is funded by $25,000 or more in federal
grant funds in any fiscal year from any source, Contractor shall provide to
County at Contractor's expense an audit conforming to the requirements set forth
in the most current version of Office of Management and Budget Circular A-133.
If Contractor is funded by $25,000 to $100,000 in federal grant funds in any
fiscal year from any source, Contractor shall arrange for conduct of the
federally-required audit biennially and shall submit the audit to County in the
time, form, and manner required by the most current version of Office of
Management and Budget Circular A-133 and by County. If Contractor is funded by
$100,000 or more in federal grant funds in any fiscal year from any source,
Contractor shall arrange for conduct of the federally-required audit annually
and shall submit the audit to County in the time, form, and manner required by
the most current version of Office of Management and Budget Circular A-133 and
by County. Contractor is solely responsible for arranging for the conduct of the
audit, and for its cost, and County may withhold the estimated cost of the audit
or 10 percent of the contract amount, whichever is larger, or the final payment,
from Contractor until County receives .the audit from Contractor.
27. Endorsements. Contractor shall not in its capacity as a contractor
with Contra Costa County publicly endorse or oppose the use of any particular
brand name or commercial product without the prior approval of the Board of
Supervisors. In its County contractor capacity, Contractor shall not publicly
attribute qualities or lack of qualities to a particular brand name or commercial
product in the absence of a well-established and widely-accepted scientific basis
for such claims or without the prior approval of the Board of Supervisors.- In its
County contractor capacity, Contractor shall not participate or appear in any
commercially-produced advertisements designed to promote a particular brand name
or commercial product, even if Contractor is not publicly endorsing a product, as
long as the Contractor's presence in the advertisement can reasonable be
interpreted as an endorsement of the product by or on behalf of Contra Costa
County. Notwithstanding the foregoing, Contractor may express its views on
products to other contractors, the Board of Supervisors, County officers, or
others who may be authorized by the Board of Supervisors or by law to receive such
views.
PAYMENT PROVISIONS
1
1. Payment shall be on a contingency basis at the following rates:
50% of the amount of each recovery totaling$ 0 -$ 2,500.
40% of the amount of each recovery totaling$ 2,501 - $ 3,500
30%of the amount of each recovery totaling $ 3,501 - $ 5,000
25%of the amount of each recovery totaling more than$ 5,000.
A recovery shall be defined as moneys actually received by County from(1) debits
processed by County and approved by the vendor and/or(2)refund checks received
by County and/or(3)credits processed on a sales/use tax return as a result of
Contractor's efforts. Payment to Contractor shall be based upon the recovery
amount for each original invoice from which a recovery is made. Individual items
on any one invoice shall be summarized and counted together as one recovery for
payment purposes. If County paid two or more invoices with one check and there
was an overpayment,the total amount of the invoices shall be considered one for
purposes of the calculating the recovery amount.
2. County shall have sole discretion regarding the use of collection agencies and/or
attorneys in the recovery process. In the event vendor refuses Contractor's initial
inquiry and County determines that collection efforts are to be made, Contractor and
County shall calculate Contractor's share of any recovery based on the net recoveries
that result from such effort(i.e. recoveries less costs of recovery). Contractor is
aware that County has its own collection agency and agrees that, in the event County
determines that collection efforts are to be made, if County wishes to pursue
collection of any overpayments in-house rather than through the use of an outside
agency, County may charge the fees set out below, as compensation for collection,
prior to calculating the net recovery(i.e. overpayment recovered less fee below).
County is aware of, and may take advantage of, arrangements Contractor has with
Dun& Bradstreet(D &B)to perform collections of items identified by Contractor
at the contractually established rates set forth in the eei4faet between P & B an A -
Gen#aet , which is attached hereto and incorporate herein by this reference.
Coupqs
P177-461-1, �GA
1y Collection Fees-, jRcy .DR ,vv
/"/C, i c P/IUL
�G , I4-:71,174A C 15;fJ
For items greater than$10,000 18%of the Overplymer t KecJ red
For items $ 2,001 - $ 10,000 20%of the Overpayment Recovered
For items $ 301 - $ 2,000 25%of the Overpayment Recovered
For items up to $ 300 27%of the Overpayment Recovered
Calculating the split of recoveries made shall take the form of one of the four
scenarios below:
A. If the vendor refunds overpayment without collection efforts, County shall receive
recovery, and when payment is due,remit the payment due Contractor to the
Contractor in accordance with paragraph 3 below.
B. If the vendor refuses to pay and is subject to collection through County and County
is successful in securing recovery, County shall, after deducting the County
Collection Fee, calculate and remit payment due Contractor to Contractor in
accordance with paragraph 3 below.
C. If the vendor refuses to pay and is subject to collection from D &B, and D &B is
successful in securing recovery without litigation,then D & B shall remit net
recovery (i.e. amount recovered less their collection fee, if any)to Contractor.
Contractor shall calculate its fee and remit remainder to County.
D. If collection by D &B requires litigation, Contractor may elect, with County's
consent,to advance D&B an initial $500-$750 deposit(Initial Deposit) for
preparing, filing, and serving the initial complaint. If collection succeeds with no
further expenditures required,payment shall be the same as scenario C, including
the cost of preparing, filing, and serving the initial complaint as part of the
"collection fee." If additional deposits are required to litigate, one of three scenarios
shall occur:
(a) If both County and Contractor wish to pursue litigation further, Contractor
and County may agree to advance D &B additional funds for litigation
expenses. The amounts advanced, and the credit for additional advances
expended, shall be in the same proportion as the recovery split applicable
under paragraph 1 above. (e.g., if the amount to be collected is greater than
$5,000, County shall advance 75%and Contractor 25%). When recovery is
made, payment shall be made as follows: Contractor first keeps
reimbursement for its Initial Deposit. Then Contractor calculates and keeps
its proportion of additional advances, and credits County with its proportion
of additional advances. Finally, from the remaining funds, Contractor
calculates and keeps its contingency fee as set forth under paragraph 1, and
returns all remaining funds to County.
(b) If County does not wish to pursue litigation further, Contractor shall not
pursue it, and Contractor shall not be reimbursed for any deposits advanced.
(c) If County does wish to pursue litigation further, but Contractor does not,
1 County shall be responsible for any additional advances for litigation
expenses, and County shall receive all net recoveries (i.e., amount recovered
less D &B's collection fees). Contractor shall receive nothing ,and County
shall not be responsible for reimbursing Contractor for any advances.
Contractor shall cooperate with County and D &B in whatever manner
necessary to facilitate D&B's litigation efforts and conveyance of all
recoveries to County..
In all cases, County assumes no responsibility for, and Contractor agrees to hold
County harmless for, any D &B litigation charges in excess of litigation deposits.:
Contractor also agrees to ensure all unexpended deposits originated from County are
returned to County within 30 days of termination of the relevant litigation.
3. Payment Demands. Contractor shall submit written demands. Said demands shall
be made on County Demand Form D-15 and in the manner and form prescribed by
County. Contractor shall submit said demands for payment no later than 30 days
from the end of the month in which the contract services upon which such demand is
based were actually rendered. Upon approval of said payment demands by the head
of the County Department for which this Contract is made, or his designee, County
will make payments as specified in paragraphs 1 and 2 above.
4. Penalty for Late Submission. When Contractor fails to submit to County a timely
demand for payment as specified in paragraph 3 above, and as a result of
Contractor's late submission County is unable to obtain reimbursement from the
State of California or otherwise;to the extent the County's recovery of funding is
prejudiced, County shall not pay Contractor for such services, even though such
services were fully provided.
5. County has the right to withhold payment to Contractor when, in the opinion of
County expressed in writing to Contractor, (a) Contractor's performance, in whole or
in part, either has not been carried out or is insufficiently documented, (b)
Contractor has neglected, failed or refused to furnish information or to cooperate
with any inspection,review or audit of its program,work or records, or(c)
Contractor has failed to sufficiently itemize or document its demand(s) for payment.
6. Audit Exceptions. Contractor agrees to accept responsibility for receiving, replying
to, and/or complying with any audit exceptions by appropriate County, State or
Federal audit agencies occurring as a result of its performance of this Contract.
Contractor also agrees to pay to County within 30 days of demand by County the
full amount of the County's obligation, if any,to the State and/or Federal
government resulting from any audit exceptions,to the extent such are attributable
to Contractor's failure to perform properly any of its obligations under this Contract.
SPECIAL CONDITIONS
t
1. Contractor's fee, as set forth in Payment Provisions, is full compensation for all
services, work and expenses provided or incur-red by Contractor under this Contract.
2. Insolvency of Contractor. If Contractor shall apply for or consent to the
appointment of a receiver,trustee, or liquidator of Contractor of all or a substantial
part of its assets, file a voluntary petition in bankruptcy or admit in writing its
inability to pay its debts as they come due,make a general assignment for the
benefit of creditors, file a petition or answer seeking reorganization or arrangement
with creditors to take advantage of any insolvency law or, if an order,judgment or
decree shall be entered by any court of competent jurisdiction, on the application of
a creditor, adjudicating Contractor as bankrupt or insolvent or approving a petition
seeking reorganization of Contractor or appointing a receiver,trustee or liquidator of
Contractor of all or substantial part of the assets of Contractor, County may
terminate this Contract for cause.
3. Termination. The following provision supersedes General Conditions paragraph 5.
Termination., a. Written Notice, only,without otherwise modifying the remainder
of paragraph 5:
"Written Notice. This Contract may be terminated by either party, at their sole
discretion,upon 30-day advance written notice thereof to the other, and may be
canceled immediately by written mutual consent. If Contract is terminated under
this provision, Contractor shall be paid for recoveries obtained by them prior to
termination, including for recoveries obtained by them prior to termination but
received by County within 12 months of termination."
4. Affiliates of Contractor. Contractor shall not enter into any agreement with respect
to its performance of this Contract with any subsidiary, affiliate or other company in
which Contractor has an ownership interest without County's prior written approval.
In the event that Contractor recommends County enter into any contract with any
subsidiary, affiliate or other company in which Contractor has an ownership
interest, Contractor agrees to provide County prior written notice of any such
relationship.
5. No Contracting Power. Neither Contractor nor any owner, agent or employee of
Contractor shall have power or authority to enter into or authorize any contract,
agreement or settlement on behalf of County.
t 6. Government Regulations. On behalf of County, Contractor shall use its best efforts
to assure that County complies with the requirements of any statute, ordinance, law,
rule, regulation or order of any governmental or regulatory body relevant to the
subject matter of this Contract.. In the event of any material change in relevant
laws, rules and/or regulations, Contractor shall advise County of the change and of
required actions for compliance.
I
SERVICE PLAN
Contractor and County agree as follows:
1. Contractor shall perform a review and audit of accounts payable transactions for the
period July 1, 1991 -June 30, 1993. The purpose shall be to identify overpayments
of any type that might be recoverable for the benefit of County. Contractor also
shall expand the review and audit to include County's fiscal year 1993-94 at this
same pay rate, if requested by County.
2. The general obligations of Contractor shall be those set forth in Contractor's E
Proposal, which is attached hereto and incorporated herein by this reference. In the
event of inconsistencies between the terms and conditions of the Payment
Provisions, Service Plan, Special Conditions and General Conditions and the terms
and conditions of the Proposal,the terms and conditions of the Payment Provisions,
Service Plan, Special Conditions and General Conditions shall control.
3. Contractor shall work independently in the Auditor-Controller's Office, or at its own
offices, to identify and secure recovery of any overpayments County may have made
during the subject period.
4. County shall provide Contractor with County-owned space from which to carry out
Contractor's services under this Contract. Access to copiers, FAX, and telephone
will also be provided by County, and County,shall absorb these costs to a maximum
of$250 per month. Contractor shall pay all remaining costs.
5. Contractor shall not remove records from the Auditor-Controller's Office, and all
County rules related to records control shall be followed by Contractor.
6. County shall by October 31, 1993,provide Contractor with a magnetic tape
containing fiscal years 1991-92 and 1992-93 accounts payable history data as
described in Contractor's record layout instructions package, which is attached
hereto and incorporated herein by this reference.
7. Contractor shall provide supporting documentation for each overpayment it recovers
so County can match them with actual recoveries.
8. Contractor shall perform the review and audit between November 1, 1993, and
December 31, 1993.
1 9. Contractor shall instruct vendors to send refund checks and credit memos to:
Contra Costa County
Auditor-Controller's Office
625 Court Street, Room 103
Martinez, CA 94553
Attn: Grace Darrin
and name the specific invoice and, if applicable, purchase order number related to_
the refund for County's reference.
10. Contractor shall at all times act in a professional manner and at no time take any
action which could jeopardize County's relationship with its vendors.
11. Contractor shall furnish reports to County from time to time, and when requested, in
such form and numbers as requested, concerning activities of Contractor under this
Contract, and shall snake a final report or reports to County at the audit's completion.
This final report shall include a comprehensive list of audit findings, which, at a
minimum, shall list all overpayments identified by Contractor and the status of
securing refund/credit for each overpayment. In the event a refund or written credit
memo has not yet been received,the vendor contact and phone number shall also be
provided.
12. Contractor is aware that the accounts payable history does not include cash refunds
and agrees to inquire initially regarding any overpayments whether or not the vendor
has already made a refund. In such instances when the answer is "yes," Contractor
shall obtain information that will allow County to confirm that the refund was in fact
received. Recoveries relating to fiscal year 1991-92 activity, obtained or promised
to County prior to November 1, 1993, shall not count as a recovery for Contractor.
1
April 27, 1993
Mr. Paul Abelson
Contra Costa County
651 Pine Street
Martinez, CA 94553
Dear Paul:
I would like to thank you for taking the time to meet with me to discuss Loder, Drew and
Associates and our Accounts Payable Audit Program. I look forward to your decision regarding
our firm. If you have any questions, please do not hesitate to contact me.
Sincerely,
LODER, DREW and ASSOCIATES
toen2al(d K. Loder
/y1
Six Vcnlurc • tiuitc 212
11.ViitC, Cal ifornia 1)2 71 8
(714),-53-1700-FAX(714)T.53-1420
t
Accounts Payable Audit Proposal
for
Mr. Paul Abelson
Contra Costa County
Loden Drew and Associates
Principal Products or Services
Loder, Drew and Associates (LDA)performs accounts payable audits for Fortune 500
companies throughout the United States. Our primary focus in providing accounts
payable audits is to identify processing errors and potential problems that affect our
client's bottom line. We have developed comprehensive methods for conducting these
audits; we utilize Generally Accepted Auditing Standards(GAAS) as well as other
proprietary computerized techniques developed internally by our firm. These
methods ensure the greatest possible recovery for our clients. Our firm has an
excellent understanding of all of the major accounts payable software programs
currently employed by most companies.
Founded in 1985,LDA employs 20 professionals in 9 states including Arizona,
California, Illinois, Massachusetts, New Jersey, New York, Oregon, Texas, and
Washington.
Scope of Work
LDA proposes to perform a one hundred percent(10.0%)review of all accounts payable
transactions for a two year period. This review would include all accounts payable
documents. Our audit will include a manual review(depending upon filing systems
employed) and an electronic review using our proprietary SCANSEARCFtTM software.
All documentation and audit efforts will remain on-site to ensure document integrity.
The audit will take approximately three to four months to complete.
The purpose of the audit is to identify duplicate payments, overpayments, missed
discounts, sales and use tax errors, freight overpayments, missed volume purchase
agreements, missed promotional allowances, real estate expense overpayments
(including CAM charges and lease adjustments) and advertising allowance
overpayments, among other items. LDA will provide a management report that will
identify internal control weaknesses discovered during the course of the audit. This
report will also recommend corrective actions to prevent these weaknesses from
occurring in the future.
Loder,Drew and Associates 1 Accounts Payable Auditors
Special skills and talents that provides us a competitive
advantage in the market place
• LDA employs only degreed accountants. We do not employ independent
contractors or temporary clerical personnel. Our staff credentials include CPAs,
MBAs and CIAs. Our personnel undergo extensive training to ensure our client
a thorough and professional audit.
• We have an excellent understanding of the major software packages employed
by large corporations. In fact, many of the manufacturers of these packages are
clients of LDA, including ASK, Informix, Ingres and Oracle, among others.
• Our client base includes mostly Fortune 500 companies. We have performed
over 700 audits since 1985. We have over 300 active clients, including 100 high-
tech manufacturing clients and over 50 with annual sales greater than one
billion dollars.
• We employ SCANSEARCITM, our state-of-the-art proprietary software package
designed and developed to identify duplicate payments and overpayments. This
software package ensures that we have not missed overpayments that may
have occurred, including duplicate payments that are caused by processing
copies of original vendor invoices. These copies may be for dissimilar amounts,
different vendors (including same vendor, different vendor number), different
invoice numbers, different company locations or any combination of the above.
• We have multi-state expertise in the sales and use tax area. Our staff expert
has over 36 years with the California State Board of Equalization(SBOE).
• We have real estate expertise in contract(lease) compliance and common area
maintenance charges.
• We validate all audit items prior to presenting them to our client to ensure the
accuracy of our audit findings as well as to ensure an expedited recovery
process.
• At the conclusion of the audit we will provide you with a well written and
informative narrative audit report. This report will identify the cause of each
audit item and make practical recommended corrective actions that will ensure
that these weaknesses are addressed.
Loder,Drew and Associates 2 Accounts Payable Auditors
Fee Structure
Fee is contingent upon recovery. Our fee proposal is fifty percent on all amounts less
than $2500.00, forty percent on all amounts between $2501.00 and $3500.00, thirty
percent on all amounts between $3501.00 and $5000.00 and twenty-five percent of all
amounts greater than $5001.00 the amount recovered. Fee shall be paid 30 days
after receipt of funds from vendor(as a result of services performed by LDA)or 30
days after acknowledgment that a debit has been deducted from a payment to a
vendor. All items presented for payment will be pre-approved and recognized by the
vendor.
Professionalism and Quality Control
LDA staff adheres to Generally Accepted Auditing Standards (GAAS) as published by
the American Institute of Certified Public Accountants (AICPA), both in work ethic,
professionalism and appearance. We take pride in the accomplishments and success
collectively as a team. This is apparent in LDA 's mission statement:
'LDA will be known as a leader to the Fortune 500 in the area
of auditing accounts payable departments:'
Added to this are LDA 's values as expressed below:
• CLIENT SERVICE Outperform the client's expectations.
• INTEGRITY The highest quality in everything we do
and to all we do business with.
• SUPPORT SUCCESS Make everyone we deal with successful.
• WORKETHIC Do it right--the first time. Look for and seize
every opportunity to do it better- in service, in
methods, and on time.
At the conclusion of each audit engagement LDA solicits feedback from our clients via
our Client Satisfaction Survey(attached). It is our goal to improve our process and
service to ensure satisfied clients and continued success. These surveys are an
integral part of our employee evaluation process, providing us continuing constructive
feedback and a benchmark to achieve and surpass.
Loder, Drew and Associates 3 Accounts Payable Auditors
Senior Staff Biographies
Ronald K. Loder, 37, Chief Executive Officer, has been a Partner with Loder, Drew
and Associates, Inc. since inception in July 1985. From 1979 to 1985, Mr. Loder held
several key financial and operating positions at Kierulff Electronics, a $500 million
industrial electronics distributor. These positions included Manager of Operations,
Corporate Manager of Operations Analysis,Director of Internal Audit and Senior
Accountant. Mr. Loder is a graduate of Rider College, Trenton, NJ with a B.S. degree
in Accounting.
Dawn R. Hayes, 31, Senior Vice President, has been a Partner with Loder, Drew and
Associates, Inc. since 1988. From 1986 to May 1988, Ms. Hayes was an Associate
with Loder, Drew and Associates, Inc. From 1984 to 1986, Ms. Hayes was a Senior
Auditor with the CPA firm of Gilbert Vasquez and Company of Los Angeles,
California. Ms. Hayes is a graduate of Northern Illinois University with a B.S. degree
in Accounting and Finance.
Kelvin D. Thompson, 41,Vice President/Operations has been employed with Loder,
Drew and Associates, Inc. since April 1991. Mr. Thompson-began his career in public
accounting and held key positions with Payless Drug Stores, Mercedes Benz Credit
Corporation and Nissan Motor Acceptance Corporation. These positions include
Senior Auditor, Manager Internal Audit,Director Internal Audit, and Corporate
Manager, Product Development. Mr. Thompson graduated from Brigham Young
University-Hawaii, with a B.S. degree in Accounting.
Russell Davidson, 37, Certified Internal Auditor(CIA), has been qui Associate with
Loder, Drew and Associates, In.c. since 1987. Mr. Davidson previously held positions
as Controller and Senior Internal Auditor with various medium size, high technology
corporations. Mr. Davidson is a member of the American Institute of Certified
Internal Auditors. Mr. Davidson graduated with a B.S. degree in Accounting from
California State University.
Marjorie Sellers, 39, an ABA graduate of the University of Southern California, has
been. a Senior Auditor with Loder, Drew and Associates, .Inc.. since 1989. Ms. Sellers
previously held senior level staff and management accounting positions with Max
Factor Corporation.
David Akagi, 33, Certified.Public Accountant(CPA), is an honors graduate in
accounting from Brigham Young University and has been employed as an.Auditor
with Lod,-I-, Drew, and Associates, Inc. shite 1991. Mr,. Akagi was Senior Accountant
with Halls,ein &Warner, CPA's, located in Long Beach, California from 1986 to 1.991.
Loder, Draw and Associates 4 Accoants Payable Auditors
Senior Staff Biographies (continued)
Jeffrey Chin, 33, Certified Public Accountant(CPA)joined Loder, Drew and
Associates, Inc. as Senior Auditor in September 1991. Mr. Chin graduated from
California State University, Los Angeles in 1981 with a B.S. degree in Business
Administration and was employed by Pacific Enterprises, a major utility corporation
for nine years.
Rozzana Vasquez, 35, graduated from California State University, Los Angeles in
1984 with a B.S. degree in Business Administration. Her accounting career began-In
public accounting with the CPA firm of Gilbert Vasquez and Company from 1984 to
1989. Ms. Vasquez has been with Loder, Drew and Associates, Inc. since 1989.
Loder, Drew and Associates, Inc. employs twelve additional degreed accountants.
Loder,Drew and Associates 5 Accounts Payable Auditors
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00000000000 000000000000 449 P02 JUL 12 '93 14:40
1
LODER, DREW AND ASSOCIATES, INC.
Six Venture, Suite 212
Irvine, California 92718
Tel. No. (714) 753-1700/Fax No. (714)753-1420
ACCOUNTS PAYABLE AUDIT
Computer Data Formatting and Transmittal Instructions
This i/iformgtiPN J8 rPG]uvrtpd for the purpovp of pondupting an Qvvounty payable audit- It it%r"PQrat;VP
that we receivecomplete and comprehensive Information pertaining to the information requested at least
two(2) weeks f rior to the start date of the audit.
Media/RWOraiho Formal
Preferr6d: 1/2-inch, 9-track (reel-to-reel)Magnetic Tape
6250 or 1600 bpi
EBCDIC or ASCII
Unlabeled or Labeled(IBM Standard or ANSI)
Diock sizo lo33 than 32,000 byt03
Files should be'transfered via a copyformat,QQ NOT_USE A BACKUP UTILITY THAT
Data FW
1. A/P Involcs/Cheok History records=QR 24,X MONTH P RIOD)
This record typically bears a one-to-one relationship with check-invoice lines and
contains applicable invoice and check data_ It is used as an index during our auditing
process. (it is important that we receive the invoice number and invoice amount and not
the general ledger account distribution. Included in this Information should be all debit
transactions, credit transactions, voided checks.manual checks, recurring payments and
subsequent adjustments to the original invoice. )
W. i Ali-,Vendor Address records
This record is an extract from typical Vendor Master files and contains address/contact
data. It is used to prepare mailing labels for selected vendor verifications.
See following ottachments for detailed record layouts. Prior to downloading this Information to
the tape, plea4e call or provide LODER,DREW&ASSOCIATES with the file layout..
Transmift
1. Ship the transmittal and media by express courier along with a copy or description of
the record layout to:
Loder, Draw and Associates, Inc.
Six Venture,Suite 212
Irvine, CA 92718
Loder, Drew and Associates 1 Auditors
00000000000 000000000000 449 P03 JUL 12 193 14:40
AITACHAIENtr A
RECORD LAYOUTS
AJP INVOICEICLHECK HISTORY RECORD
Recommended block size a 12,000
Record length-j 120
Position Description.. Length Type Comments
1-15 Vendor Number 15 A/N Include Remit-to address code, it
applicable.
16-30 Vendor(short) is A/N Use Vendor short name, if
name available;otherwise, truncate
Vendor full name
31-50 Invoice number 20 A/N
51-59 Invoice date 9 A/N
60-67 Check number 8 A/N
68-76 Check date A/N
77-87 Voucher number 11 A/N
88-100 Invoice amount 13 Numeric
101-108 Void Check Info 8 A/N Void check info (if available)
109-120 Miscellaneous 12 A/N (2)
(1) If credit ttansactions are not noted as negative numbers,please provide the appropriate
(laid IndI44tor to Identify credit transactions.
(2) If a batch!f fling system Is maintained in the A/P department and batch numbers(or tape,
reel or re6ord locator numbers) are required to access this data, provide the appropriate
data in this field.
Loder, Drew and Associates 2 Auditors
00000000000 000000000000 449 PO4 JUL 12 '93 14:41
ATTACHMENT B
RECORD LAYOUTS
A/P VENDOR ADDRESS RECORD
Record length 270 Recommended block size = 13,500
Position Description Length Type Comments
1-15 Vendor Number 15 AIN Should match history record
rendering
16-55 . Vendor(full) 40 AIN
Name
56-95 Vendor Address 40 A/N Contact name, if available
Dine-1*'
96-135 *endor Address 40 A/N
Line-2**
136-175 Vendor Address 40 A/N
Line-3`*
176-195 Vendor City 20 A/N If City-State-Zip are not
196-215 Vendor State 20 A/N separate fields, use the 176-225
216-225 Vendor Zip Code 10 A/N span for the combined field
226-240 Vendor Country 15 AM Optional Field
or Vendor
Oountry code
241-255 Date record 15 A/N Optional Field***
dreated
256-270 15 A/N Optional Field***
See Attachme6t C, for Type and Footnote legends.
Loder, Drew and Associates 3 Auditors
• bbbbbL�bblJlJt� bbbbbl�t�bl�bblJ 44�J HUb: JUL 12 'y,5 14:41
ATTACHMENT C
RECORD LAYOUT LEGEND
FIELD TYPES
A/N -Alphanumeric field Either left or right justified in accordance with your system
specifications.
Date = Date fi6id Left-justified in accordance with one of the following date
formats:
mmddyy
yymmdd
yyddd(Julianized date)
aaaddyy(a-alpha month abreviation character)
aaaddyyyy
ddaaayy
I ddaaayyyy
Numeric= Nu eric signed
dollars-and-c nts amount Right-justified
Blank or zero-filled
Actual or implied decimal point
Sign character can be any one of the following:
Leading sign:separate character
Trailing sign: separate character
Embedded sign: rightmost character(Typical IBM Zoned
Decimal sign handling)
Packed decimal:rightmost nibble(Typical IBM
Packed/COBOL COMP-3 sign handling)
(Unused leading characters of this 13-byte field
which precede the necessarily shorter packed
FOOTNOTES field can be blank(filled with spaces)]
'Optional Miscellaneous Field Use this area to record additional pertinent client-specific data
(such as microfilm/microfiche indexes,overflow area for
truncated field, etc.) If a batch filing system is used in the A/P
Department and batch numbers(or tape, reel or record locator
numbers) are required to access this data, provide appropriate
data in this field.
** Vendor Address Line Fields Notice that up to three address lines (plus the City-State-Zip) are
provided for. If your system maintains a lesser number of lines,
fill the unused line fields with spaces.
* * Optional Vendor-address
Record Fields Vendor Country or Country Code: Any entry or code which
differentiates Canadian and other international addresses is
helpful. Fill with spaces for U.S. A. vendors or if not available.
Vendor Telephone anq Vendor FAX: Please provide one or
both if recorded in your system.
Loder, prow and Associates 4 Auditors
November 29, 1993
Mr. Paul Abelson
Systems Accountant
Contra Costa County
625 Court Street
Martinez, CA 94553-1282
Dear Paul:
Per our previous discussions, Loder, Drew and Associates (LDA) has negotiated a special rate
with Dun and Bradstreet (D&B)to perform collection efforts on our behalf. This rate is eighteen
percent (18%)of the amount recovered. As D&B makes a collection,they deduct their 18%fee
and then remit the net amount recovered to LDA. If collection is achieved via the use of a
Dunsgram,there is no fee earned by D&B. In the event litigation is required,the rate structure
changes. D&B charges the following rates on the net proceeds they receive after deducting
attorney fees, and then forwards the remaining funds to us:
$200.00 to$300.00 27%
$3001.00 to$2000.00 25%
$2001.00 to$10,000.00 20
$10,000.00 and over 18%
As part of our agreement with D&B, there are generally "initial charges" by attorneys when suits
or other legal proceedings are authorized by claimant, consisting of a suit fee (usually$500.00 to
$750.00), advance court costs (usually$100.00 to$250.00), and in some instances a retainer.
D&B is required to ask for our approval prior to turning any collection item over to an attorney,
and the attorney will provide LDA with a good faith estimate of all of the costs anticipated before
starling work. There may be some attorneys who will accept the case on a contingency basis
versus an hourly rate.
If you have any questions, please do not hesitate to contact me.
Sincerely,
LODER, DREW and ASSOCIATES, Inc.
- i
Ronald K. Loder
\yl
Vent III c Suite ' 1 '
h-Vine, Calilornia 921- 18
(i 14),-i3-1 700•FAX(;14)753-143(1