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Home My WebLink AboutMINUTES - 05041993 - 2.4 TO: BOARD OF SUPERVISORS Contra FROM: Costa Phil Batchelor, County Administrator County DATE: May 4 1993 SUBJECT: KPMG Peat Marwick Audit Services Contract Extension SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: APPROVE and AUTHORIZE the County Administrator or designee to execute a contract amendment with KPMG Peat Marwick for the provision of audit services of the County' s finances, internal operations, and federal financial assistance programs (single audit) for the fiscal year ending June 30, 1993 . BACKGROUND: The current contract with KPMG Peat Marwick for the annual financial audit of County records for FY 1991792 has expired. In February the Grand Jury advised of their intention to no longer participate. They expressed their desire to be considered independent with respect to the annual financial audit, and they believe the Grand Jury/Board of Supervisors joint contract does not satisfy other areas of -the Penal Code with respect to auditing with which they may be required to comply. In order to proceed with this year' s audit, the County Administrator recently met with KPMG Peat Marwick to discuss a one- year extension of the current contract. KPMG Peat Marwick has performed the annual audit of County financial affairs admirably for several years and we believe a one-year extension is both cost effective and beneficial . KPMG Peat Marwick has consistently provided Contra Costa County a competitive rate and has included an MBE/WBE sub contract component. While we believe this extension is warranted in order to proceed in a timely fashion, it is our intent to issue a Request For Proposals for auditing services for FY 1993-94 . CONTINUED ON ATTACHMENT: YES SIGNATURE: XA RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): y ACTION OF BOARD ONywa4k o- z 9f.2 APPROVED AS RECOMMENDED /rN OTHER VOTE OF SUPERVISORS / ^ v \ I 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. THE DATE SHOWN. g ATTESTED Contact: Dean Lucas 646-4077 PHIL BATCHEL ,CLERKOFTHEBOARDOF M. County Administrator SUPERVISORS AND COUNTY ADMINISTRATOR Auditor-Controller KPMG Peat Marwick BY //ADEPUTY 2, ' Peat Marwick Certified Public Accountants 2121 No. California Blvd., Suite 840 Telephone 510 943 1555 Telefax 510 946 0371 Walnut Creek, CA 94596-7304 April 30, 1993 Board of Supervisors Contra Costa County Martinez, California This letter summarizes our proposal to perform an annual audit of the County's general purpose financial statements and federal financial assistance programs as of and for the year ending June 30, 1993. We have provided audit services to the County for several years and we are prepared to extend our current contract. This letter includes our proposed: • Scope, ♦ Engagement Team, ♦ Reporting, ♦ Professional Fees, and • MBE)WBE Plan Scope We will conduct our audits in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the.United States; the Single Audit Act of 1994; and the provisions of OMB Circular A-128,Audits of State and Local Governments, with the primary objective of issuing our opinions on the County's Comprehensive Annual Financial Report (CAFR) and federal financial assistance programs (Single Audit) at the conclusion of our audits. It should be understood that County management has responsibility for representations contained in the financial statements and schedule of federal financial assistance programs and we will require that a letter be furnished to us by members of the County's management near the. completion of our audits. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. solo 8av Area Pracoce Member rF;rm of,.,... r•._.,..,,..... .. .. _ .. _ • 1 K Peat Marwick CONTRA COSTA COUNTY PAGE 2 In conducting our audits, we will perform tests of the accounting records and such other procedures as we consider necessary in the circumstances to form our opinion about whether the CAFR is free of material misstatement and to report on whether management has complied with laws and regulations and has established and maintained an internal control structure. An audit in accordance with the above standards is not designed to provide absolute assurance that there are no misstatements in the County's financial statements or any noncompliance with laws and regulations resulting from errors or irregularities. The County's internal control structure should provide assurance, although not absolute assurance, against the possibility of such errors and irregularities. We understand that all records, documentation, and information we request in connection with our audit will be made available to us. Engagement Team The engagement team for these audits will be comprised of the following individuals: CAFR Single Audit Audit Lead Partner Lou Miramontes Lou Miramontes Engagement Partner Jack Lynn Jack Lynn Manager Jesse Takahashi Kwi Lee In-Charge John Mosunic Olivia Choi Lou Miramontes is a partner and resident in our Walnut Creek office and has seventeen years experience at servicing governmental entities. He has served as the County's engagement partner for the past six years. Jack Lynn is designated as a government services specialist and has twenty years experience at serving governments. Jack previously served as concurring review partner for the County. Jesse Takahashi will function as the engagement manager of the CAFR audit. He has been the in-charge accountant for the past two years and is very familiar with detail aspects of the County's operations. Kwi Lee will again serve as engagement manager for the single audit. She serves several governments in this capacity. RMS Peat Marwick CONTRA COSTA COUNTY PAGE 3 Timing We anticipate that the timeline for conducting the audits and the delivery of our reports will be as follows: Joint pre-planning meeting on audit procedures.......................................May 25, 1993 Planning and preliminary audit.procedures ....................................................June 1993 Commence final audit procedures.....................................................September 7, 1993 Status meeting.......................................................................................October 6, 1993 Finalize drafts of the CAFR with Office of October 29 to Auditor/Controller and County Administrator.....................................November 12 Present to the County Administrator the draft financial statements and audit findings...........:....................................................November 12 Issued opinion on CAFR...........................................................................November 19 Finalize draft management letter with County Administrator.........................................................................................December 10 Deliver management letter to County Administrator.................................December 20 Issue single audit opinions.........................................................................December 20 Audit exit conference.................................................................................January 1994 The above-noted meetings will be focused at communicating the audit plan, obtaining input on such plan, communicating the status of the performance of our auditing procedures and preliminary findings based upon the results of our application of auditing procedures and reviewing draft financial statements and management letter. Reporting At the conclusion of our audit,we plan on issuing the following reports: 1. Our opinion on the Comprehensive Audited Financial Report (CAFR) 2. Our opinions on the Schedule of Federal Financial Assistance and Related Reports on Internal Control and Compliance AMP Peat Marwick CONTRA COSTA COUNTY PAGE 4 3. Management letters which will communicate recommendations and observations on internal control and operating matters noted during the conduct of our audit procedures. It should be understood that our audit may not reveal all errors, irregularities, or illegal acts which may have occurred during the year. However, please be advised that it is our responsibility to ensure that management is informed of any significant illegal acts that we become aware of during our audit. If the illegal act involves funds from other governmental entities, it is the County's responsibility to inform the other governmental entities of these acts. If the County's management and audit committee are involved in the illegal act or do not report to the other governmental entities on a timely basis, we, as auditors, will be obligated to report the illegal acts to these other governmental entities. Professional Fees Our proposed fees for the audits are based upon our estimates of professional time required to conduct our procedures at billing rates applicable to governments. The proposed fees are as follows: CAFRAudit............................................................$ 72,000 Single Audit ............................................................$ 60,500 K�IVI Peat Marwick CONTRA COSTA COUNTY PAGE 5 MBE/WBE Plan We are aware of the County's policy regarding Minority Business Enterprises (MBE) and Women Business Enterprises (WBE). We service many governments which have similar policies and as a result, we have developed professional relationships with MBE and WBE firms in the Bay Area. In certain cases, we have entered into subcontractor relationships with MBE/WBE firms who provide services to governments under our direction. We would like to discuss a specific MBE/WBE plan for this audit with County representatives. Attached to this letter is our Firm's Bay Area Practice Work Force summary, which provides information concerning our employee make up. In summary we are pleased to respond to your request to submit this proposal letter to provide professional audit services to Contra Costa County. We look forward to discussing this letter with County representatives. Very truly yours, KPMG Peat Marwick Louis P. Miramontes Partner Q\\ VAr A N\\ r r N ``A cn cri oo\\ cci cn cn o 1