Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Juan Raigoza, Controller
Subject: Amendment to the Agreement with Macias Gini & O’Connell, LLP
RECOMMENDATION:
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Adopt a resolution authorizing and directing the President of the Board to execute an amendment to the agreement with Macias Gini & O’Connell, LLP to provide additional professional financial auditing services to the County and to increase the County’s maximum fiscal commitment by $75,000 for a new total contract amount of $1,532,500.
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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. In compliance with this requirement, the County has previously contracted with outside professional auditing firms to review and report on the County’s financial statements.
On May 23, 2023, the Board adopted Resolution No. 079628, authorizing an agreement with Macias Gini & O’Connell, LLP (MGO) to provide professional financial auditing services to the County for the term of May 23, 2023 through May 22, 2025, for payments in an amount not to exceed $957,250, with an option to extend the agreement at the County’s election for one additional year through May 22, 2026 for an additional $500,250.
Under the agreement (the “Agreement”) entered into pursuant to Resolution No. 079628, MGO is required to audit the County’s Annual Comprehensive Financial Report, San Mateo Medical Center Audit Report, San Mateo County Joint Power Finance Authority, all District Attorney’s Grant Reports, Single Audit Report (up to 7 programs), Local Transportation Fund; performing Agreed Upon Procedures of Investment Policy Report, Report on Appropriation Limit; and issuing Management Letter. MGO is also required to issue reports to the Board and the Controller regarding the financial statements and compliance and internal controls issues.
DISCUSSION:
In accordance with OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, MGO has conducted a Single Audit of nine programs for Fiscal Year 2023-24, an increase of two programs beyond what is contemplated under the Agreement. Staff projects that additional Single Audits will continue to be required for up to ten programs (rather than seven as contemplated under the Agreement).
To facilitate uninterrupted professional financial auditing services, the Controller’s Office is recommending that the Board approve an amendment to the Agreement with MGO to increase their services to cover additional programs under their Single Audit Report obligations. To cover the cost of the increased services, the proposed amendment would increase the County’s maximum fiscal obligation by $75,000 for a total contract amount of $1,532,500.
The County Attorney has approved the proposed amendment and resolution as to form.
COMMUNITY IMPACT:
Approval of this amendment will facilitate audit compliance and ensure effective internal controls that enable the County to deliver services to all residents.
FISCAL IMPACT:
The total amount to be expended under the amended Agreement is $1,532,500, with the amounts per fiscal year specified below. The Agreement is funded by the General Fund and is included in the Non-Departmental services FY 2024-25 budget and will be included in the recommended budget for FY 2025-26.
FY 2023-24: $471,550
FY 2024-25: $515,700
FY 2025-26: $545,250