COUNTY OF SAN MATEO

County Manager/Clerk of the Board

DATE:

March 24, 2008

BOARD MEETING DATE:

April 8, 2008

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Reyna Farrales, Deputy County Manager

SUBJECT:

Agreement with Macias Gini & O’Connell LLP for Audit Services

RECOMMENDATION

Adopt a Resolution:

1.

Authorizing an agreement with Macias Gini & O’Connell LLP from April 1, 2008 to March 31, 2011, for post-audits, examination of various County Auditors’ financial statements and for other specified audit work for the fiscal years ending June 30, 2008, 2009 and 2010, for a total all-inclusive maximum price of $1,146,139; and

2.

Authorizing the County Manager to execute subsequent amendments and minor modifications not to exceed an aggregate of $25,000 and to make minor changes in the types of services and activities provided under the Agreement.

Vision Alignment

Commitment: Responsive, effective and collaborative government.

Goal 22: County and local governments effectively communicate, collaborate and develop strategic approaches to issues affecting the entire County.

This Agreement contributes to this goal by providing an independent audit of the County’s financial transactions and records to ensure that adequate internal controls have been established, and that financial statements and disclosures are in compliance with government standards and reporting requirements.

Performance Measure

Measure

FY 2007-08
Estimate

FY 2008-09
Projected

County submits financial statements to the State on time and attains Certificate of Achievement for Excellence in Financial Reporting for its comprehensive annual financial report (CAFR)

Yes

Yes

Background

The County Charter (Article VI Section 603) provides that the Board of Supervisors shall have an annual audit made by a certified public accountant and the auditor shall report on the County’s financial transactions and records and the effectiveness of internal controls. The current contract with Macias Gini & O’Connell LLP (MGO) expired with the the fiscal year ending June 30, 2007. MGO has been the County’s auditor for over ten years.

Discussion

A Request for Proposal (RFP) for audit services was issued in December 2007 for the same scope of services as the current agreement, as well as a request to conduct a stand-alone audit of the Housing Authority. The RFP was sent to twelve firms and advertised twice in a local newspaper. MGO was the only firm that submitted a proposal. The Grand Jury reviewed the proposal in February and contacted five other Bay Area counties, and found MGO hourly rates, as well as the total hours and distribution across staff levels and projects, reasonable.

The term of the contract is from April 1, 2008 to March 31, 2011, for the fiscal years ending June 30, 2008, 2009 and 2010 for the same scope of work as the previous agreement, which includes the audit of the County’s financial statements, the Single Audit, and a stand-alone audit of the San Mateo Medical Center. The County at its discretion may exercise two additional one-year options if MGO’s performance is deemed satisfactory. MGO has agreed to rotate its Partner assigned to this engagement. The County will explore including a stand-alone audit of the Housing Authority in the MGO contract next year when Housing’s current audit contract expires and a separate RFP process is completed. MGO complies with the County’s insurance and contract requirements, including equal benefits, non-discrimination and jury service pay.

Fiscal Impact

Auditors agree to perform the services required under this Agreement for an all-inclusive maximum amount not to exceed the following by fiscal year, for a total of $1,146,139:

●

$369,379 for Fiscal Year ending June 30, 2008

●

$381,883 for Fiscal Year ending June 30, 2009

●

$394,877 for Fiscal Year ending June 30, 2010

The fees for auditing FY 2007-08 represent a 3.1% increase from the previous year. Funds will be included each fiscal year in the Grand Jury budget, which is fully funded by the General Fund.