1995-094-Execute A Contract With Maze And Associates To Provide Auditing Services For Fiscal Years 1994-95, 1995-96 And 1996-97RESOLUTION 1995 - 94
RESOLUTION OF THE TOWN OF LOS GATOS
AUTHORIZING THE TOWN MANAGER TO EXECUTE A
CONTRACT WITH MAZE AND ASSOCIATES
TO PROVIDE AUDITING SERVICES
FOR FISCAL YEARS 1994 -95, 1995 -96 AND 1996 -97
RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa
Clara, State of California, that the Town of Los Gatos enter into a contract with Maze &
Associates for financial auditing services for fiscal years 1994 -95, 1995 -96 and 1996 -97, and that
the Town Manager is authorized, and is hereby directed, to execute said contract in the name and
on behalf of the Town of Los Gatos.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town
of Los Gatos, California, held on the 17th day of July, 1995 by the following vote:
COUNCIL MEMBERS:
AYES: Randy Attaway, Steven Blanton, Linda Lubeck,
Mayor Patrick O'Laughlin
NAYES: None
ABSENT: Joanne Benjamin
ABSTAIN: None
SIGNED: i` k" k-j 1f { v\
MAYOR OF THE TOW OF LOS
GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
An Agreement Between the Town of Los Gatos
and Maze & Associates
1QWR CLERK
wGR: ASS
BID-
THIS AGREEMENT, made and entered into this
between the TOWN OF LOS GATOS, a municipal corporation of he State of California hereinafter
referred to as "Town ", and MAZE & ASSOCIATES, whose offices are 1670 Riviera Avenue, Suite
100, Walnut Creek, CA 94596, hereinafter referred to as "AUDITORS ";
WITNESSETH:
IT IS HEREBY MUTUALLY AGREED AS FOLLOWS:
1. Term of Agreement: The Agreement shall cover services rendered pertaining to the
fiscal years ending June 30, 1995, June 30, 1996 and June 30, 1997.
2. Conduct of Audit:
A. Audit Scone and Womk AUDITORS shall conduct audits of the
books, records, accounts and financial transactions of all offices, departments, and
funds of TOWN for the fiscal years ending June 30, 1995, 1996 and 1997. Audits(s)
shall be done in accordance with generally accepted auditing standards, the audit
standards adopted and the procedures recommended by the American Institute of
Certified Pubic Accountants in its audit guide entitled Audits of State and Local
Governmental Units. Audit of the Transit Assist Program will be done in accordance
with Article 4.5 of the Transportation Development Act and the allocation
instructions of the Metropolitan Transportation Commission. Audits referenced in
this section shall include a separate audit report of the Transit Assist Program and a
separate audit of the Redevelopment Agency.
B. Audit of Financial Statements: AUDITORS shall audit the general
Purpose (combined) balance sheet of all fund types and account groups of the TOWN
of Los Gatos at June 30, 1995, 1996 and 1997 and the related statements of revenues,
expenditures /expenses, and changes in fund balances /retained earnings and cash
flows of the proprietary funds for the years then ended. Audits shall be made in
accordance with generally accepted auditing standards and shall, accordingly, include
such tests of the accounting records and such other auditing procedures as
AUDITORS consider necessary in the circumstances.
The purpose of the audits is to render an independent accountant's opinion on
the fairness of the TOWN financial statements in relationship to generally accepted
accounting principles and the consistency of the application of such principles. The
TOWN understands that these audits, due to limitations in the auditing processes,
cannot be relied upon to discover fraud, defalcations, or irregularities, should any
exist. However, any such matters coming to AUDITORS' attention shall be
communicated to TOWN.
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C. Audit of Com fiance with Federal Laws and Re ulations: In accordance
with the Single Audit Act and OMB Circular A -128, AUDITORS shall perform a
compliance audit of federal assistance programs of the TOWN OF LOS GATOS for
the years ending June 30, 1995, 1996 and 1997. Audits shall be made in accordance
with generally accepted auditing standards, Standards for Audits of Governmental
Or anizations Programs Activities and Functions, issued by the U.S. General
Accounting Office, the Single Audit Act of 1984, and the provisions of OMB
Circular A -128, Audit of State and Local Governments.
AUDITORS shall apply procedures to determine if the TOWN has complied
with laws and regulations to determine whether there have been events of non-
compliance that may have a material effect on the financial statements. The nature
and extent of such tests shall be solely determined as a matter of AUDITORS'
professional judgement. Examples of the types of compliance procedures that might
be performed include:
° Tracing the appropriations in the adopted budget to the budget status
report to determine if appropriation amounts are correctly recorded
in the accounting system and resultant financial statements.
° Reviewing expenditure reports to determine if appropriations have
been violated (exceeded).
Examining transfers between funds to determine if they have been
authorized.
° Testing cash receipts /revenues to determine if they were accounted
for in the proper funds and accounts; especially those restricted
externally for certain uses.
° Reviewing the municipal improvement, parks and special assessment
bond indentures to select for compliance testing covenants relating to
the establishment of accounts reserve levels, and bond repayment.
° Testing investment transactions to determine if they conform with the
TOWN'S investment policy.
Testing purchases to determine adherence to the TOWN'S purchasing
policies.
The Single Audit Act requires AUDITOR to extend auditing procedures to
all major federal assistance programs as well as non -major federal assistance program
transactions. For the TOWN OF LOS GATOS, major federal assistance programs are
any federal program for which total expenditures of federal financial assistance
exceed $300,000 in a fiscal year.
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The following program shall require a compliance audit at June 30, 1995:
Community Development Block Grants.
For each major Program identified, AUDITORS shall perform a compliance
audit in accordance with the Single Audit Act of 1984 and OMB Circular A -128.
It is understood that AUDITORS' compliance testing cannot be relied upon
to disclose all instances of non - compliance due to inherent limitations in the auditing
process. Instances of fraud, abuse, non - compliance with laws or regulations, or
illegal acts coming to AUDITOR'S attention will be communicated to TOWN.
D. Study and Evaluation of the Internal Control Structure: AUDITORS
shall perform a study and evaluation of internal control structure (accounting and
administrative) as part of the audit of the general purpose financial statements as
required by the Single Audit Act and the Office of Management and Budget (OMB)
Circular A -128. The purpose of this study and evaluation is to determine the nature,
timing, and extent of auditing procedures necessary for expressing an opinion on the
TOWN' financial statements and to determine if the TOWN has internal control
systems to provide reasonable assurance that it is managing its federal financial
assistance programs in accordance with applicable laws and regulations. To fulfill
this requirement AUDITORS will:
° Identify the significant elements of the internal control structure.
Identify the controls evaluated and those that were not.
Perform tests of compliance with the controls to determine if the
controls are functioning in accordance with prescribed procedures.
Report material weaknesses identified as a result of the study,
evaluation and tests.
° Report material weaknesses in internal controls related to federal
financial assistance programs.
It is understood that AUDITORS' evaluation cannot be relied upon to disclose
all weaknesses in internal controls due to inherent limitations in the auditing process.
E. Transit Assist: AUDITORS shall audit the statement of revenues and
expenses of the Transportation Development Act Program, Article 4.5, of the TOWN
OF LOS GATOS for the fiscal years ending June 30, 1995, 1996 and 1997. The
purpose of the audit is to determine if the financial statements are presented fairly in
accordance with generally accepted accounting principles.
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F. Proposition 111 (Gann) AUDITORS shall calculate Proposition 111 yearly
appropriation limit increments.
G. Redevelopment Agency: AUDITORS shall conduct a Redevelopment Agency
audit and include tests of compliance with the Guidelines for Compliance Audits of
California Redevelopment Agencies issued by the State Controller
H. In connection with the audit of the financial statements, the AUDITORS
shall conduct a review of the internal control structure, the accounting procedures
employed by the TOWN, including the TOWN's data processing and related
compliance with the laws, rules, and regulations, and shall submit to the TOWN a
separate comprehensive report in letter form detailing their findings, observations,
opinions, comments, or recommendations resulting from said review.
I. -Date(5) of Audit(s): AUDITORS shall perform audit(s) as soon as the
TOWN's accounts are ready after the close of the fiscal year. TOWN shall complete
its closing of fiscal year activities no later than July 31. Audit shall be completed
within ninety (90) days after the closing of fiscal year activities, including receipt of
all data due the AUDITOR on the Annual Closing Checklist.
3. Availability of Town Records: Any and all TOWN records necessary for the conduct
of this audit shall be made available to AUDITORS by TOWN, and AUDITORS shall be entitled
to use any and all internal audits and records of TOWN as may be necessary or convenient for the
performance of this Agreement.
4. Audit Reports: AUDITORS shall submit audit reports and management letter(s)
within ninety (90) days following the closing of the TOWN's books and accounts including receipt
by the AUDITORS of all data on the Annual Closing Checklist. The audit report shall contain
AUDITORS' opinion, the financial statements, and related footnotes. AUDITORS shall submit
twenty (20) copies of each audit report and management letter. AUDITORS shall type, print, and
assemble the financial statements. It is expected that the completed audit would be submitted to the
TOWN by October 15th of each year.
5. Compensation for Audit: AUDITORS shall be compensated for the provision of
services outlined herein under Paragraphs 1 through 4 (pertaining to the audit) as follows:
General Purpose Financial
Statement Report
Town of Los Gatos Single Audit
Transit Assist Program
Redevelopment Agency Reports
CAFR
Proposition 111 Report (Gann)
Out of Pocket Travel Costs
TOTAL
1995
1996
1997
$28,080
$28,549
$29,026
2,355
2,394
2,434
1,820
1,850
1,881
3,315
3,370
3,427
4,455
4,529
4,605
605
615
625
L200
1,220
1.240
$41,830
$42,527
$43,238
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It is agreed that the fees for the June 30, 1995, 1996 and 1997 fiscal years are
subject to review and negotiation based upon the actual audit hours required.
In all cases, total annual compensation shall be inclusive of labor, travel
report preparation and printing, and other expenses.
Progress payments will be made on the basis of hours of work completed
during the course of the engagement and out -of- pocket expenses incurred in
accordance with the firm's dollar cost bid proposal. Interim billing shall cover a
period of not less than a calendar month. Ten percent (10 %) will be withheld from
each billing pending delivery of the firms final reports..
6. Additional Services: During the audit process, should extraordinary circumstances
arise which would warrant more intensive and detailed services be performed, AUDITORS shall
provide all facts related to the extraordinary circumstances, and the estimated costs of additional
services. There will be no payment for additional services performed without prior written approval
of the Town Manager. Additional services in excess of the 15% contingency fee will require Town
Council approval. However, should the firm's hours decrease (i.e. TOWN staff prepares additional
schedules or typing), the Town Manager may substitute additional services, so long as the total
annual compensation is not exceeded.
7. Insurance.
A. Minimum Scope of Insurance:
i. AUDITORS agrees to have and maintain, for the duration of the
contract, a General Liability insurance policy insuring AUDITORS
to an amount not less than: one million dollars ($1,000,000)
combined single limit per occurrence for bodily injury, personal
injury and property damage.
AUDITORS agrees to have and maintain, for the duration of the
contract, an errors and ommissions insurance policy insuring
AUDITORS to an amount not less than $750,000.
ii. AUDITORS shall provide to the Town all certificates of insurance,
with original endorsements effecting coverage. AUDITORS agrees
that all certificates and endorsements are to be received and approved
by the Town before work commences.
AUDITORS shall provide to the Town all certificates of insurance,
with original endorsements effecting coverage. Certificates of such
insurance shall be filed with the Town on or before commencement
of performance of this agreement.
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B. General Liability:
The Town, its officers, officials, employees and volunteers are to be
covered as insured as respects: liability arising out of activities
performed by or on behalf of the AUDITORS; products and
completed operations of AUDITORS, premises owned or used by the
AUDITORS.
ii. The AUDITORS's insurance coverage shall be primary insurance as
respects the Town, its officers, officials, employees and volunteers.
Any insurance or self - insurance maintained by the Town, its officers,
officials, employees or volunteers shall be excess of the
AUDITORS's insurance and shall not contribute with it.
iii. Any failure to comply with reporting provisions of the policies shall
not affect coverage provided to the Town, its officers, officials,
employees or volunteers.
iv. The AUDITORS's insurance shall apply separately to each insured
against whom a claim is made or suit is brought, except with respect
to the limits of the insurer's liability.
C. All Coverage: Each insurance policy required in this item shall be endorsed
to state that coverage shall not be suspended, voided, cancelled, reduced in
coverage or in limits except after thirty (30) days' prior written notice by
certified mail, return receipt requested, has be given to the Town. Current
certification of such insurance shall be kept on file at all times during the
term of this agreement with the Town Clerk.
D. In addition to these policies, AUDITORS shall have and maintain Workers'
Compensation insurance as required by California law and shall provide
evidence of such policy to the Town before beginning services under this
Agreement. Further, AUDITORS shall ensure that all subcontractors
employed by AUDITORS provide the required Workers' Compensation
insurance for their respective employees.
8. Indemnification. The AUDITORS shall save, keep and hold harmless indemnify and
defend the Town its officers, agent, employees and volunteers from all damages, costs or expenses
in law or equity that may at any time arise or be set up because of loss or liability arising by reason
of, or in the course of performing work which may be occasioned by a willful or negligent act or
omissions of the AUDITORS, or any of the AUDITORS' employees, or any sub - consultant.
9. Termination of Agreement. The Town shall have the right to terminate this
agreement with or without cause by giving not less than fifteen (15) days written notice of
termination. In the event of termination, the AUDITORS shall deliver to the Town all files,
documents, and reports performed to date by the AUDITORS. In the event of such termination, the
Page 6 of 9
AUDITORS shall be paid for all satisfactory work to the date of termination, unless such termination
is made for cause, in which event, compensation, if any, shall be adjusted in light of the particular
facts and circumstances involved in such termination. In the event of such termination, Town shall
pay Consultant an amount that bears the same ratio to the maximum contract price as the work
delivered to the Town bears to completed services contemplated under this Agreement pursuant
to Exhibit A hereto, unless such termination is made for cause, in which event, compensation, if
any, shall be adjusted in light of the particular facts and circumstances involved in such
termination.
10. Compliance with Laws. The AUDITORS shall comply with all applicable laws,
codes, ordinances, and regulations of governing federal, state and local laws. AUDITORS represents
and warrants to Town that it has all licenses, permits, qualifications and approvals of whatsoever
nature which are legally required for AUDITORS to practice its profession. AUDITORS represents
and warrants to Town that AUDITORS shall, at its sole cost and expense, keep in effect or obtain
at all times during the term of this Agreement any licenses, permits, and approvals which are legally
required for AUDITORS to practice its profession.
11. Confidential Information. All data, documents, discussion or other information
developed or received by or for the AUDITORS in performance of this Agreement are confidential
and will not be disclosed to any person except as authorized by the Town Manager, or Manager's
designee or as required by law.
12. Independent Contractor. It is understood that the AUDITORS, in the performance
of the work and services agreed to be performed, shall act as and be an independent contractor and
not an agent or employee of the Town. As an independent contractor AUDITORS shall not obtain
any rights to retirement benefits or other benefits which accrue to Town employee(s). With prior
written consent, the AUDITORS may perform some obligations under this Agreement by
subcontracting, but may not delegate ultimate responsibility for performance or assign or transfer
interests under this Agreement.
13. Conflict of Interest. The AUDITORS has no holdings or interests within the Town
of Los Gatos. AUDITORS has no business holdings or Agreements with any member of the staff
or management of the Town or its representatives.
14. Waiver. No failure on the part of either parry to exercise any right or remedy
hereunder shall operate as a waiver of any other right or remedy that party may have hereunder.
15. Governing Law. This Agreement, regardless of where executed, shall be governed
by and construed to the laws of the State of California.
16. Entire Agreement. The Request for Proposals, the Proposal submitted by the
AUDITORS, and this Agreement constitute the entire agreement between the parties. Should there
by any conflict among the three, the terms and conditions contained in this Agreement shall prevail.
No terms, conditions, understandings or agreements purporting to modify or vary this Agreement,
unless hereafter made in writing and signed by the party to be bound, shall be binding on either
party.
Page 7 of 9
17. Disputes. In any dispute over any aspect of this agreement the prevailing party shall
be entitled to reasonable attorney's fees, as well as all reasonable costs.
is. Availability of Records. AUDITOR shall maintain the records supporting this billing
for not less than three (3) years following completion of the work under this Agreement. AUDITOR
shall make these records available to authorized personnel of the Town at the AUDITOR'S offices
during business hours upon written request of the Town.
19. Proiect Man3ePr The Project Manager for the AUDITOR for the work under this
Agreement shall be Cory Biggs.
20. Assignability and Subcontracting. The services to be performed under this
Agreement are unique and personal to the AUDITOR. No portion of these services shall be assigned
or subcontracted without the written consent of the Town.
21. Notices. Any notice required to be given shall be deemed to be duly and properly
given if mailed postage prepaid, and addressed to:
To Town: Town of Los Gatos
110 E Main St
Los Gatos CA 95032
To AUDITORS: Cory Biggs, Principal
Maze & Associates
1670 Riviera Avenue, Suite 100
Walnut Creek, CA 94596
or personally delivered to AUDITORS to such address or such other address as AUDITOR
designates in writing to Town.
22. AUDITOR agrees to testify in any litigation brought regarding the subject of the
work to be performed under this Agreement. AUDITOR shall be compensated for its costs and
expenses in preparing for, traveling to, and testifying in such matters at its then current hourly rates
of compensation, unless such litigation is brought by AUDITOR or is based on allegations of
AUDITOR'S negligent performance or wrongdoing.
23. Equal Employmentment 0-- Vporn'nity AUDITORS warrant that it is an equal opportunity
employer and shall comply with applicable regulations governing equal employment opportunity.
Neither AUDITORS nor its subcontractors do and neither shall discriminate against persons
employed or seeking employment with them on the basis of age, sex, color, race, marital status,
sexual orientation, ancestry, physical or mental disability, national origin, religion, or medical
condition, unless based upon a bona fide occupational qualification pursuant to the California Fair
Employment & Housing Act.
24. Execution. This Agreement may be executed in several counterparts each of which
shall constitute one and the same instrument and shall become binding upon the parties when at least
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one copy, here of shall have been signed by both parties hereto. In proving this agreement, it shall
not be necessary to produce or account for more than one such counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year
first written above:
TOWN OF LOS GATOS:
DAVID W. KNAPP
Town Manager
APPROVED AS TO FORM:
LARRY ANDERSON
Town Attorney
ATTEST:
MARIAN COSGROVE, Town Clerk
NTINANCEMAZE.AGR
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MAZE & ASSOCIATES
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TITLE
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DATE