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Home My WebLink AboutItem 06.fOctober 7, 2019 Item No.________ AMENDMENT TO AUDITING SERVICES AGREEMENT WITH CLIFTONLARSONALLEN LLP Proposed Action Staff recommends adoption of the following motion: Move to approve Amendment to Auditing Services Agreement with CliftonLarsonAllen LLP. Overview In 2016, the City of Lakeville staff issued a Request for Proposals (RFP) for auditing services. The City Council approved a three-year agreement on November 16, 2016 with CliftonLarsonAllen LLP (CLA). The firm has provided excellent audit services for each of the past three years. CLA has a well-trained and professional staff that provides high quality audit services. CLA also provides auditing services for the Lakeville Fire Relief Association. Staff is requesting Council approval of a three-year extension of the Auditing Services Agreement for fiscal years ending December 31, 2019, 2020 and 2021. Primary Issues to Consider • Costs for conducting the City of Lakeville annual audit and preparing the CAFR: Year City Audit CAFR Preparation Total City Cost 2019 $31,425 $4,900 $36,325 2020 $32,300 $4,900 $37,200 2021 $33,125 $4,900 $38,025 Total $96,850 $14,700 $111,550 Supporting Information • Amendment of Professional Services Agreement • Professional Services Agreement dated November 16, 2016. Financial Impact: $ Budgeted: Y☐ N☐ Source: Related Documents: (CIP, ERP, etc.): Envision Lakeville Community Values: Good Value for Public Services Report Completed by: Jerilyn Erickson, Finance Director 111,550 General, Utility, Liquor Funds Future Budgets Y $0(1'0(1772352)(66,21$/6(59,&(6$*5((0(17 7+,6 $0(1'0(17³$PHQGPHQW´ LV PDGH DQG HQWHUHG LQWR WKLV BBBB GD\ RI BBBBBBBBBBBB³(IIHFWLYH'DWH´E\DQGEHWZHHQWKH&LW\RI/DNHYLOOHD0LQQHVRWD PXQLFLSDO FRUSRUDWLRQ ³&LW\´ DQG &OLIWRQ/DUVRQ$OOHQ //3 D 0LQQHVRWD OLPLWHG OLDELOLW\ SDUWQHUVKLS³&RQVXOWDQW´ 5(&,7$/6 $7KHSDUWLHVHQWHUHGLQWRD3URIHVVLRQDO6HUYLFHV$JUHHPHQWGDWHG1RYHPEHU ³$JUHHPHQW´IRUWKHSHUIRUPDQFHRIILQDQFLDODXGLWVIRUWKH&LW\ %7KHSDUWLHVGHVLUHWRH[WHQGWKH$JUHHPHQWIRUDQDGGLWLRQDOWKUHH\HDUV 12:7+(5()25(WKHSDUWLHVDJUHHDVIROORZV $PHQGPHQWWR3DUDJUDSKRIWKH$JUHHPHQW3DUDJUDSK%RIWKH$JUHHPHQWLV KHUHE\DPHQGHGWRUHDGDVIROORZV % &RQVXOWDQW¶VSURSRVDOGDWHG2FWREHUUH&LW\RI/DNHYLOOH3URIHVVLRQDO $XGLWLQJ 6HUYLFHV DV PRGLILHG E\ &RQVXOWDQW¶V UHYLVHG VFKHGXOHRIIHHVDQG H[SHQVHVWRSURYLGHDXGLWLQJVHUYLFHVIRUWKHILVFDO\HDUVHQGLQJ'HFHPEHU DQGDWWDFKHGKHUHWRDV([KLELW$³)HH6FKHGXOH´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rincipal CLAconnect.com AUDIT QUOTE Christopher Knopik, CPA, CFE, Principal, is entitled to represent the firm, empowered to submit the quote, and authorized to sign a contract with the City of Lakeville (the City) and the Lakeville Fire Relief Association (the FRA). CliftonLarsonAllen LLP Our fees are based on the timely delivery of services provided, the experience of personnel assigned to the engagement, and our commitment to meeting your deadlines. We have found over the years that our clients don’t like fee surprises. Neither do we. We commit to you, as we do all of our clients, that: We will be available for brief routine questions at no additional charge, a welcome investment in an on‐ going relationship. Any additional charges not discussed in this quote will be mutually agreed upon up front. We will always be candid and fair in our fee discussions, and we will avoid surprises. The fee proposal is based on the following: City and FRA personnel will provide assistance periodically throughout the year and during the assurance fieldwork with regard to account analysis and provision of year‐end account reconciliation workpapers and schedules. The assurance reports will be delivered in accordance with mutually agreed upon deadlines. Professional standards and regulations currently in effect. We reserve the right to modify your quoted fee if professional standards or regulations change for any engagement period. No significant changes in the operations of City or FRA subsequent to the date of this quote. SCHEDULE OF PROFESSIONAL FEES AND EXPENSES – COMBINED Year City Audit Preparation of CAFR Total All Inclusive Cost ‐ City Audit Total All Inclusive Cost ‐ Fire Relief Audit Preparatio n of year‐ end payroll tax forms Total All Inclusive Cost ‐ Combined 2019 31,425$ 4,900$ 36,325$ 4,260$ Varies 40,585$ 2020 32,300$ 4,900$ 37,200$ 4,420$ Varies 41,620$ 2021 33,125$ 4,900$ 38,025$ 4,505$ Varies 42,530$ Total 96,850$ 14,700$ 111,550$ 13,185$ Varies 124,735$ APPENDIX A SCHEDULE OF PROFESSIONAL FEES AND EXPENSES ‐ CITY Hours Standard Hourly Rates Quoted Hourly Rates Total Partners 40 $ 270 $ 185 7,400$ Managers 55 180$ 125$ 6,875$ Supervisory Staff 65 145$ 100$ 6,500$ Other (Specify) Associates 110 120$ 90$ 9,900$ Administrative 15 80$ 50$ 750$ Subtotal 285 31,425$ Out‐of‐Pocket Expenses included Meals and Lodging included Transportation included CAFR Drafting 4,900$ Total All‐inclusive Price for 2019 Audit Services 36,325$ CITY OF LAKEVILLE SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 2019 CITY OF LAKEVILLE FINANCIAL STATEMENTS Hours Standard Hourly Rates Quoted Hourly Rates Total Partners 40 $ 270 $ 185 7,400$ Managers 55 180$ 125$ 6,875$ Supervisory Staff 65 145$ 105$ 6,825$ Other (Specify) Associates 110 120$ 95$ 10,450$ Administrative 15 80$ 50$ 750$ Subtotal 285 32,300$ Out‐of‐Pocket Expenses included Meals and Lodging included Transportation included CAFR Drafting 4,900$ Total All‐inclusive Price for 2020 Audit Services 37,200$ CITY OF LAKEVILLE SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 2020 CITY OF LAKEVILLE FINANCIAL STATEMENTS SCHEDULE OF PROFESSIONAL FEES AND EXPENSES – CITY (CONTINUED) Hours Standard Hourly Rates Quoted Hourly Rates Total Partners 40 $ 275 $ 185 7,400$ Managers 55 185$ 130$ 7,150$ Supervisory Staff 65 145$ 105$ 6,825$ Other (Specify) Associates 110 120$ 100$ 11,000$ Administrative 15 80$ 50$ 750$ Subtotal 285 33,125$ Out‐of‐Pocket Expenses included Meals and Lodging included Transportation included CAFR Drafting 4,900$ Total All‐inclusive Price for 2021 Audit Services 38,025$ CITY OF LAKEVILLE SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 2021 CITY OF LAKEVILLE FINANCIAL STATEMENTS SCHEDULE OF PROFESSIONAL FEES AND EXPENSES – FRA Hours Standard Hourly Rates Quoted Hourly Rates Total Partners 6 $ 270 $ 165 990$ Managers 0 180$ 110$ ‐$ Supervisory Staff 11 145$ 90$ 990$ Other (Specify) Associates 26 120$ 80$ 2,080$ Administrative 5 80$ 40$ 200$ Subtotal 48 4,260$ Out‐of‐Pocket Expenses included Meals and Lodging included Transportation included Year‐end Tax Forms Various Total All‐inclusive Price for 2019 Audit Services 4,260$ CITY OF LAKEVILLE SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 2019 LAKEVILLE FIRE RELIEF ASSOCIATION FINANCIAL STATEMENTS Hours Standard Hourly Rates Quoted Hourly Rates Total Partners 6 $ 270 $ 170 1,020$ Managers 0 180$ 115$ ‐$ Supervisory Staff 11 145$ 90$ 990$ Other (Specify) Associates 26 120$ 85$ 2,210$ Administrative 5 80$ 40$ 200$ Subtotal 48 4,420$ Out‐of‐Pocket Expenses included Meals and Lodging included Transportation included Year‐end Tax Forms Various Total All‐inclusive Price for 2020 Audit Services 4,420$ CITY OF LAKEVILLE SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 2020 LAKEVILLE FIRE RELIEF ASSOCIATION FINANCIAL STATEMENTS SCHEDULE OF PROFESSIONAL FEES AND EXPENSES – FRA (CONTINUED) Completion of the year‐end tax forms (1099, 1096, W2, W3, 944, and 945) will be charged based on actual time involved. Our payroll services team member we utizlize with our relief organizaitons is $150 per hour. In the event unique or complex issues arise, we will work with you to determine the level of assistance and arrange with an appropriate fee for our services. These discussions will happen before the services are undertaken and at your express written consent. ADDITIONAL SERVICES Should City or FRA require additional services beyond the scope of the audit engagement, we will provide you the estimated level of effort and the resources necessary to complete the work. If a service falls outside of the scope of our bid, we will let you know and ask for your written permission before starting the work and bill you for it. Rates for additional services will be discussed as issues arise. Hours Standard Hourly Rates Quoted Hourly Rates Total Partners 6 $ 275 $ 175 1,050$ Managers 0 185$ 115$ ‐$ Supervisory Staff 11 145$ 95$ 1,045$ Other (Specify) Associates 26 120$ 85$ 2,210$ Administrative 5 80$ 40$ 200$ Subtotal 48 4,505$ Out‐of‐Pocket Expenses included Meals and Lodging included Transportation included Year‐end Tax Forms Various Total All‐inclusive Price for 2021 Audit Services 4,505$ CITY OF LAKEVILLE SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 2021 LAKEVILLE FIRE RELIEF ASSOCIATION FINANCIAL STATEMENTS