2012/02/21 Lance, Soll & Lunghard, LLP Amendment 1 change to services and compensation AMENDMENT NO. 1 TO
AGREEMENT FOR AUDIT SERVICES
This is Amendment No. 1 to that certain AGREEMENT for Audit Services ("Agreement")
made on April 7, 2009, by and between the City of Menifee ("City") and Lance, Soll & Lunghard,
LLP which Amendment is made and entered into on February 21, 2012 to increase the services
and compensation as indicated below:
1. Section 2, "Services" is amended to read as follows:
Section 2. Services: Unless otherwise extended, this Agreement shall terminate upon
completion of the audit for the 2011-12 fiscal year.
2. Section 3, "Compensation" is amended to read as follows:
Section 3. Compensation: The fees for the auditing service hereunder are set out on
Exhibit "A" and shall not exceed the following amounts, including all reimbursements,
unless additional work specifically is authorized in writing by CITY in advance of
performance of such work:
FY 2008-09 $10,225.00; FY 2009-10 $10,532.00; FY 2010-11 $10,848.00; FY 2011-12
$14,250.00
Jo h 'Denver, Mayor Richard K. Kikuchi, CPA
Partner
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Attest: Appegved as Form:
Kathy Bennett, City Clerk Josepfi Fle er, Interim Cit Attorney
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Amendment No.1 to Audit Agreement with LSL 1 of 1
AGREEMENT FOR AUDIT SERVICES
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THIS AGREEMENT, made and entered into this 7th day of April, 2009, by and between
the CITY OF MENIFEE (hereinafter called "CITY")and LANCE, SOLL&LUNGHARD, LLP, a
partnership of Certified Public Accountants(hereinafter called"ACCOUNTANTS"):
WITNESSETH:
The parties do agree as follows:
1. . Recitals
This agreement is made and entered into with respect to the following facts:
(a) That CITY is desirous of obtaining the services of qualified certified public
accountants for the purpose of conducting annual audits of its financial books and records; and
(b) That ACCOUNTANTS have demonstrated their qualifications to perform
such services, and have agreed to perform such audit services, subject to the provisions of this
Agreement; and
(c) That the legislative body of CITY has heretofore determined that the public
interest,convenience and necessity require the execution of this Agreement.
2. Services
CITY hereby engages ACCOUNTANTS to perform audits and examinations of the
accounting books and records of CITY for the following three fiscal years: 2008-09; 2009-2010;
and 2010-2011. Unless otherwise extended, this Agreement shall terminate upon completion of
the audit for the 2010-2011 fiscal year.
(a) ACCOUNTANTS shall.perform the services for the rates set out on Exhibit,
attached and incorporated here. ACCOUNTANTS shall conduct an examination of City's
financial statements for compliance with generally accepted accounting principles, as established by
the Governmental Accounting Standards Board (GASB), each such fiscal year. The audits will be
conducted in accordance with generally accepted auditing standards as established by the American
Institute of Certified Public Accountants(AICPA), and shall include such other auditing procedures
as we consider necessary in the circumstances. It is understood by all parties that such audit
procedures are not yrimarily designed to and cannot be relied upon to disclose all defalcations or
other irregularities. Reliance for the prevention or detection of fraud, defalcations or other
irregularities should be placed principally upon an adequate internal accounting system with
appropriate and functioninu internal controls. It is the resuonsibility of management of each entity
to establish and maintain such an internal control s, stem.
4850-7063-9875.3
Under the requirements of the Federal Government's program covering a single
audit for all federal grant funds,the compliance and financial audit will be conducted according to
the requirements of the Single Audit Act as amended in 1996 and in accordance with generally
accepted auditing standards as well as generally accepted governmental auditing standards.
ACCOUNTANTS' examination will be made in accordance with the standards for financial and
compliance audits contained in the Government Auditing Standards, issued by the Comptroller
General of the United States; the Single Audit Act as amended in 1996; and the provision of OMB
Circular A-133,Audits of State and Local Governments.
(b) ACCOUNTANTS shall submit a report of their examination of the City's
Government-Wide and Fund financial statements for each such fiscal year,which shall include such
component units, if any,notes to the financial statements and an opinion as to the fairness of their
presentation in conformity with generally accepted accounting principles, applicable to the various
funds or state the reasons for any exceptions to said principles. ACCOUNTANT'S will apply
limited audit procedures to Management's Discussion and Analysis (MD&A) and required
supplementary information. The Comprehensive Annual Financial Report(CAFR)will be prepared
and word processed by the ACCOUNTANTS. ACCOUNTANTS shall submit twenty five (25)
hard bound copies of the report.
(c) ACCOUNTANTS shall submit a report on Internal Control over Financial
Reporting based upon the audit of the CITY'S financial statements in accordance with
Government Auditing Standards and the appropriate reports on compliance with Requirements
Applicable to each Major Program, Internal Control over Compliance and on the Schedule of
Expenditures of Federal Awards in Accordance with OMB Circular A-133. The single audit
report will include appropriate schedule of expenditures of federal awards, footnotes, findings
and questioned costs, including reportable conditions and material weaknesses, and follow up on
prior audit findings where required. ACCOUNTANTS shall.submit ten (10) copies of the
report.
(d) ACCOUNTANTS shall perform agreed-upon auditing procedures and
submit a letter annually to the City regarding compliance to the CITY'S GANN Limit
(Appropriations Limit). ACCOUNTANTS shall submit ten(10)copies of the report.
(e) ACCOUNTANTS shall prepare the Annual State Controller's Reports and
Annual Street Reports for the CITY and file them with the appropriate agency on behalf on the
CITY.
(f) In addition to submitting a report on the examination of the financial
statements of CITY, ACCOUNTANTS shall submit fifteen (15) copies of a management letter
setting forth their findings and/or recommendations on those matters noted and observed during the
conduct of the examination of the financial records and developed within the scope usually
associated with such an examination relating to,but not limited to,the following:
(i) Improvement in systems of internal control.
4850-7063-9675.3
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(ii) Improvement in accounting system.
(iii) Apparent noncompliance with laws and rules and regulations.
(iv) Any other material matter coming to the attention of the firm during
the conduct of the examination.
3. Compensation
The fees for the auditing service hereunder are set out on Exhibit "A and shall not exceed
the following amounts, including all reimbursements, unless additional work specifically is
authorized in writing by CITY in advance of the performance of such work.:
FY 2008-09:$10,225.00;FY 2009-2010: $10,532.00;FY 2010-2011: $10,848.00
The fees due hereunder shall be paid in installments during each fiscal year, as work is done
by ACCOUNTANTS with a 10% withheld balance due upon submission of the fiscal year-end
audit report(s). The fees shall be paid by the CITY within 60 days of the date on the billing unless
otherwise disputed by CITY during that time.
Any additional work outside the scope of services in(2) shall be billed at the hourly rates
set out on Exhibit "A." ACCOUNTANTS shall identify in writing any additional work required
with an estimated cost to perform the work to the CITY prior to commencement. No additional
work shall be performed without the express written consent of the CITY.
4. CITY Facilities
CITY shall not be required to furnish any office facilities to.ACCOUNTANTS, but shall
make available to ACCOUNTANTS working space for such time as ACCOUNTANTS or its
employees may be required to work at the City Hall. CITY personnel shall furnish minimal
assistance, as determined by the Finance Director, to ACCOUNTANTS, in connection with the
preparation of necessary schedules and the production of underlying supporting documents for
ACCOUNTANTS inspection and auditing.
5. Retention of Workinji Papers
As required, ACCOUNTANTS will retain all audit working papers for a period of at least
seven years and the relevant federal agencies can have access to such papers, as is required by the
law,upon request.
6. Termination
CITY and ACCOUNTANTS shall have the right to terminate this Agreement, at any time,
upon fifteen (15) days written notice to the other party. In event of such termination,
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ACCOUNTANTS shall be entitled to compensation for services rendered through and including
the date of giving of notice of termination. ACCOUNTANTS shall not be entitled to any
compensation for any services rendered by them after the giving of notice of such tennination.
7. Notices
Notice given pursuant to this Agreement shall be served upon the person to .be notified by
personal service upon such party, or by the deposit of such written notice in the care and custody of
the United States Postal Service,.postage prepaid,addressed as follows:
(a) CITY: CITY OF MENIFEE
Attn: George Wentz,City Manager
29714 Haun Rd.
Menifee, CA 92586
(b) ACCOUNTANTS:
LANCE, SOLL&LUNGHARD
Attention: Richard K.Kikuchi,CPA,Partner
203 N.Brea Blvd., Suite 203
Brea,California 92821-4056
Notices hereunder shall be deemed to have been given pursuant to this Paragraph on the day
of personal service thereof upon the party to be notified,or as of the second(2nd)day following the
deposit of the same in the care and custody of the United States Postal Service, first-class,postage
prepaid.
8. CompIiance with Laws
In the performance of the work required by this Agreement, ACCOUNTANTS shall abide
by and conform to any and all applicable laws of the United States, State of California,-and
or IT
dinances,regulations and policies of the CITY..
9. Status of ACCOUNTANTS
The performance by ACCOUNTANTS hereunder shall be in the capacity of an
independent contractor and not as an officer,agent or employee of CTTY.
10. Completion of Work
The work undertaken pursuant to this Agreement,including issuance of appropriate reports,
shall be completed with due diligence and quickly as possible upon notification that the City's and --
Agency's books are.ready for audit.
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11. Liabili Indemnification
ACCOUNTANTS shall defend, indemnify and save harmless CITY, its elected and
appouited officials, officers, agents and employees from all liability from loss damage or injury to
persons or property, including the payment by ACCOUNTANTS of any and all legal costs and
attorney's fees,in any manner arising out of any negligent or intentional or willful acts or omissions
of ACCOUNTANTS in performance of this Agreement, including but not limited to, all
consequential damages to the maximum extentpermitted bylaw. Said indemnification shall include
any claim that ACCOUNTANTS, or ACCOUNTANTS employees or agents, are considered to be
employees of the CITY or are entitled to any employee benefits from CITY, including but.not
limited to those available under Public Employees Retirement Law.
12. Insurance
With respect to performance of work under this agreement, ACCOUNTANTS shall
maintain and shall require all of its subcontractors to maintain insurance as described below:
(a) Workers' compensation insurance with statutory limits,. and employer's
liability insurance with limits of not less than $1,000,000 per accident. In accordance with the
provisions of California Labor Code, Section 3700, every employer shall secure the payment of
employee compensation.
(b) Comprehensive general liability insurance with a combined single limit of
not less than.$1,000,000 per occurrence. Such insurance shall include product/completed
operations liability,owner's and contractor's protection,blanket contractual liability,personal injury
liability, broad form property damage coverage and explosion, collapse and underground hazard
coverage.
(c) Comprehensive automobile liability insurance with a combined single limit
of not less than$1,000,000 per occurrence. Such insurance shall include coverage for owned,hired
and non-owned automobiles.
(d) professional liability(errors and omissions)insurance with a limit of not less
than$1,000,000.
(e) General Insurance Requirements: All insurance required by express
provision of this Agreement shall be carried only in responsible insurance companies licensed to do
business in the State of California. CITY, its officials, officers, agents and employees shall be
named as additional named insureds. Such insurance shall be primary as to CITY.
If ACCOUNTANTS,for any reason,fails to maintain insurance coverage which is required
pursuant to this Agreement, the same shall be deemed a material breach of contract. CITY, at its
sole option, may forthwith terminate this Agreement and obtain damages from the
ACCOUNTANTS resulting from said breach. Alternatively, CITY may purchase such required
insurance coverage, and may deduct from sums due to ACCOUNTANTS any premium costs
advanced by CITY for such insurance. However, prior to CITY obtaining such coverage, it must
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notify ACCOUNTANTS of the breach of contract and afford ACCOUNTANTS reasonable time to
acquire the necessary coverage.
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13. Miscellaneous
(a) This Agreement may be amended only in writing signed by the parties.
(b) No waiver of any term or condition of this Agreement shall be a continuing
waiver thereof.
(c) This Agreement constitutes the entire agreement of the parties and
supersedes any other agreements,whether written or oral.
(d) In the event of litigation to enforce this Agreement, the prevailing party in
that litigation shall be entitled to costs and reasonable attorneys fees as determined by the court.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed on the
day and year first above written.
CITNAWWemntz,
By:
ger
ATTEST:
Pennefft,City Clerk
LANCE, SOLL&LUNGHARD,LLP;
A Partnership
BY.
' T
y'
Richard K. Kikuchi,CPA
Partner
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Attachment A
AUDIT WORK COST PROPOSAL FORM
Service 2008109 2009110 2010111
City Audit and Related Reports $9 975 $10,274 $10,582
GANN Limit Review Report $250 $258 $265
Single Audit and Related Reports Included Included Included
Total for Fiscal Year not-to-exceed $10,225 $10 532 $10,848
Attachment 8
ESTIMATE OF COST
Name of Firm: Lance, Soil & Lun hard, LLP
Address: 41185 Golden Gate Circle, Suite 103
Murrieta, CA 92562
Contact Name: Richard IC. Kikuchi
Contact Phone#: (951) 304-2728 Fax#: (951) 304-3940
Contact Email: richard.kikuchi lslcpas.com
I. Auditor's Standard Billing Rates
Auditors Standard Hourly Billing Rates
POSITION 2008/09 2009/10 2010/11
Partner $180 $165 $191
Manager $104 $107 $110
Senior Accountant $86 $89 $91
Staff Accountant $77 $79 $82
Clerical Included Included Included