EXECUTIVE
MANAGEMENT COMMITTEE
MARCH
21, 2002
SUBJECT:
CPA AUDIT
POOL CONTRACT
ACTION:
RECOMMENDATION FOR AWARD OF CPA AUDIT POOL CONTRACT
RECOMMENDATION
A.
Authorize the Chief Executive Officer to award fifteen fully burdened
unit labor rate multiple award contracts with:
|
Contractor |
Contract
Number |
1.
|
Andrew Lu & Company |
PS01-2511-15-01 |
2.
|
BDO Seidman LLP |
PS01-2511-15-02 |
3.
|
Conrad & Assocs. LLP |
PS01-2511-15-03 |
4.
|
Jones, Jenle & Schunck |
PS01-2511-15-04 |
5.
|
Macias, Gini & Co. |
PS01-2511-15-05 |
6.
|
Nunez & Associates |
PS01-2511-15-06 |
7.
|
QIU Accountancy Corp. |
PS01-2511-15-07 |
8.
|
Quezada & Company |
PS01-2511-15-08 |
9.
|
Ramirez International |
PS01-2511-15-09 |
10.
|
Simpson
& Simpson |
PS01-2511-15-10 |
11.
|
Thompson, Cobb, Basilio |
PS01-2511-15-11 |
12.
|
Vargas, Lopez & Co. |
PS01-2511-15-12 |
13.
|
Vasquez & Company |
PS01-2511-15-13 |
14.
|
Wang Professional Corp. |
PS01-2511-15-14 |
15.
|
Williams & Tucker |
PS01-2511-15-15 |
|
|
|
to
provide audit services for a period of five years, inclusive of two one-year
options, effective April 2, 2002.
B.
Authorize the Chief Executive Officer to execute Task Orders under these
contracts for audit services for the first year of the contracts, in a total
amount not to exceed $5,156,000. Some
Task Orders may exceed $200,000 each.
RATIONALE
The
Metro uses certified public accounting (CPA) firms’ to meet federal, state,
local, and Metro audit requirements that call for certification of financial
statements, independent opinions, and audits based on agreed-upon procedures.
Such services include audits for Call-for-Projects closeout audits and
interim audits of cost reimbursement contracts, change orders, work orders and
Metro internal audits. The audit pool
assists the Management Audit Services Department (MASD) in meeting Metro’s audit
needs, providing specialized expertise for certain engagements, and providing
independent audits of sensitive issues. In addition, the CPA firms may be tasked
to provide auditors in order to meet audit workload demands exceeding the
capacity of MASD’s internal audit resources.
The recommended not-to-exceed
amount of $5,156,000 is an estimate of the cost of audit services for the first year of the contract.
This amount includes $3,644,000 to cover the audit services needed to
complete a large number of contract audits required to close out contracts and
to support anticipated and existing litigation.
The services are needed for
approximately 500 construction and contract audits, including approximately 300
audits related to the $400 million plus Engineering Management Consultants’
(EMC) contract. Completion of the
EMC audits is time sensitive to adequately support litigation related to the
close out. The services are also
needed for Project Audit to complete approximately 150 project audits, which
need to be conducted; and also for ad-hoc audits performed by Internal Audit at
the request of management, the Metro Board, and/or required by new legislation.
FINANCIAL
IMPACT
Funding
of $1,290,000 for this service in the remainder of FY02 is included in the FY 02
budget. Since this is a multi-year
contract, the Chief Financial Officer and the MASD Managing Director will be
accountable for budgeting the cost in future years, including any option
exercised. To March, 2002 in
FY’02, $2,363,331 was expended for this service, with an additional $2.1
million encumbered, but not yet spent. Funding
for the remaining years of the five-year contract will be requested prior to
each of the years.
The
estimated cost for the first contract year is shown below by cost center name,
number, and amount.
Internal
Audit |
#2511 |
$
365,000 |
Construction
Audit |
#2512 |
$
214,000 |
Project
Audit |
#2513 |
$
933,000 |
Contract
Audit |
#2517 |
$
3,644,000 |
|
Total |
$
5,156,000 |
ALTERNATIVES
CONSIDERED
The
alternative would be to hire additional full-time staff to perform the audits.
However, this alternative is not considered cost effective.
Additionally, some of the audits call for certification of financial
statements and independent opinions, which can only be provided by CPA firms.
Attachment:
Prepared by:
Gene Cooper, Project Audit Manager, MASD
|
|
|
RICHARD
BRUMBAUGH |
|
ROGER
SNOBLE |
Chief Financial Officer |
|
Chief
Executive Officer |
|
|
|