TITLE
Recommendation to authorize City Manager to amend the agreement with KPMG, LLC to extend the contract term one year to perform the audit of the Comprehensive Annual Financial Report (CAFR) and Federal Single Audit for the City of Long Beach and related reporting entities. The contract price will be $1,042,475 plus $25,665 per required Single Audit program exceeding 13 programs and cover fiscal year 2012, extending the term of the agreement to September 30, 2013.
DISCUSSION
Pursuant to Section 803 of the City Charter, the Office of the City Auditor is charged with completing "an annual audit of the City's financial records" and rendering an appropriate auditor's opinion thereon in accordance with auditing standards generally accepted in the United States.
In August 2007, the Office of the City Auditor issued a Request for Proposal (RFP) to perform the annual audit of the CAFR and the Federal Single Audit for the City of Long Beach and related reporting entities. Six auditing firms responded to the RFP. An eight-member steering committee reviewed the proposals in depth and conducted interviews of the finalists. The committee unanimously selected KPMG to perform the requested services.
The original term of the contract covered fiscal years 2007 through 2009 and included two one-year renewal options the City exercised for fiscal years 2010 and 2011. The Office of the City Auditor has negotiated a one year extension to this existing agreement. The audit fees for fiscal year 2012 include a 2% CPI adjustment over the fiscal year 2011 fees. This is lower than the 3% annual increase for the 2011 auditing fees.
Over the years, KPMG has developed a solid understanding of the City, its multiple reporting entities and complex operations. In addition, there are three key factors that support extending the contract with KPMG for one additional year.
1. Available Staff Time. There is a significant learning curve for new auditors, especially for a city as large and ...
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