ITEM:

CONSENT CALENDAR

 

 

16.

CONSIDER AUTHORIZATION TO CONTRACT WITH HAYASHI & WAYLAND TO CONDUCT ANNUAL FINANCIAL AUDITS FOR FISCAL YEARS 2009-10, 2010-11 & 2011-12

 

Meeting Date:

June 21, 2010

Budgeted:

Yes

 

From:

Darby Fuerst,

Program/

Services & Supplies Ė

 

General Manager

Line Item No.:

Professional Services

 

Prepared By:

 

Rick Dickhaut

Cost Estimate:

$28,350 (FY 2010-11 for FY 2009-10 audit)

$89,400 (Three-year total)

General Counsel Review:N/A

Committee Recommendation:The Administrative Committee reviewed this item on June 15, 2010 and recommend approval.

CEQA Compliance:N/A

 

SUMMARY:The District is required to have an audit of its financial records performed on an annual basis.The latest three-year agreement with the firm of Hayashi and Wayland (H&W) to conduct the annual audit expired with the completion of the audit for Fiscal Year (FY) 2008-09.Due to the uniqueness of the Districtís operations, including its involvement with the CAWD/PBCSD Wastewater Reclamation Project (Project), there is a high learning curve for auditors to become sufficiently knowledgeable with the Districtís financial records to enable them to complete a timely and adequate audit.H&W has also conducted audits of the Project in the past, and although the Project currently utilizes a different auditing firm, H&Wís familiarity with the Project makes it much easier for them to incorporate the Projectís current financial information into the Districtís audit report.Based on this familiarity with the operations of the District and the Project, as well as the excellent quality of past audits, District staff requested a new proposal from H&W.

 

H&W has submitted a three-year proposal to conduct the audits for FYís 2009-10, 2010-11 and 2011-12 for the amounts of $28,350, $29,800 and $31,250, respectively.If the District were to choose a one-year engagement, the cost for FY 2009-10 would be $31,250.The proposed budget for FY 2010-11 includes $30,000 to fund the audit for FY 2009-10.District staff has contacted the fiscal officers of the Carmel Area Wastewater District and Pebble Beach Community Services District to obtain information about their annual audit costs.Based on a comparison of the estimated hours and fees paid by those two agencies, District staff determined that the quotes from H&W are reasonable and competitive.

 

RECOMMENDATION:District staff recommends that the Board authorize the General Manager to enter into a three-year agreement with Hayashi & Wayland, beginning with the audit for FY 2009-10, to conduct the annual audit of the Districtís financial records for a total three-year cost of $89,400. ††

 

BACKGROUND:Annually, the District is required to secure an independent audit of its financial operations in conformance with the requirements set by the Governmental Accounting Standards Board (GASB) and the California State Controller.Due to the uniqueness of the Districtís operations, including its involvement with the Reclamation Project, the District has used the accounting firm of H&W to conduct the annual audit of the Districtís financial records since 1989.The audit for FY 2008-09 cost $27,000 and concluded the latest three-year agreement with H&W.

 

EXHIBITS

None

 

 

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