ITEM:

CONSENT CALENDAR

 

17.

CONSIDER AUTHORIZATION TO CONTRACT WITH HAYASHI & WAYLAND TO CONDUCT ANNUAL FINANCIAL AUDIT FOR FISCAL YEAR ENDING 2017, 2018, AND 2019.

 

Meeting Date:

June 19, 2017

Budgeted:

Yes

 

From:

David J. Stoldt,

Program/

Services & Supplies

 

General Manager

Line Item No.:††††

Professional Fees

 

Prepared By:

 

Suresh Prasad

Cost Estimate:

$44,000 for 2017, $45,500 for 2018, $47,000 for 2019

Plus additional fee for CAFR & GASB75

General Counsel Approval:N/A

Committee Recommendation: The Administrative Committee reviewed this item on June 12, 2017 and recommended approval.

CEQA Compliance:This action does not constitute a project as defined by the California Environmental Quality Act Guidelines section 15378.

 

SUMMARY:The District is required to have an audit of its financial records performed on an annual basis.The 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) 2015-2016.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 is requesting a new three-year proposal from H&W.

 

H&W has submitted a three-year proposal to conduct the audits for fiscal year ending 2017, 2018, and 2019 in the amount of $136,500.The base audit fee includes costs to cover for Governmental Accounting Standards Board (GASB) 68 standards, which includes standards for pension reporting.In addition, additional fee would be incurred each year for Comprehensive Annual Financial Report compilation as well as for implementation and testing of GASB 75, new reporting standards for Other Post-Employment Benefits.The fee estimated for FYE 2017 including the additional services is a not-to-exceed price of $61,500.

 

RECOMMENDATION:District staff recommends that the Board authorize the Chief Financial Officer to enter into a three-year agreement with Hayashi & Wayland to conduct the annual audit of the Districtís financial records for a total cost of $136,500 plus additional fee for CAFR compilation and implementation of GASB75 standards. The Administrative Committee reviewed this item at its June 12, 2017 meeting and recommended approval by a vote of 3 to 0.Approval of this expenditure is contingent upon adoption of the Fiscal Year 2017-2018 Budget.

 

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 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.

 

EXHIBIT

17-A††† Hayashi & Wayland Audit Proposal

 

 

 

file:///U:\staff\Boardpacket\2017\20170619\ConsentClndr\17\Item-17.docx