To: Sonoma County Board of Supervisors and Board of Commissioners of the Community Development Commission
Department or Agency Name(s): Sonoma County Community Development Commission
Staff Name and Phone Number: Arvan Williams, (707) 565-7512
Vote Requirement: Majority
Supervisorial District(s): Countywide
Title:
Title
Professional Services Agreement for Financial Auditing Services
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Recommended Action:
Recommended action
Approve and authorize the Executive Director of the Sonoma County Community Development Commission (CDC) to execute a Professional Services Agreement with Smith Marion & Company, Inc. for financial auditing services through December 31, 2026, in an amount not to exceed $172,775.
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Executive Summary:
The Sonoma County Community Development Commission (CDC) is required to have an independent, impartial certified public accountant audit its financial statements annually to comply with California Government Code and federal Office of Management and Budget (OMB) requirements. The OMB requires that a non-federal governmental entity, which expends $750,000 or more in federal awards in a given fiscal year, have a single audit conducted in accordance with 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The annual audits help to demonstrate and ensure that the Commission is a professionally managed organization that is accessible, transparent, fiscally responsible, and accountable to the public.
This item requests the Board to authorize execution of a Professional Services Agreement with Smith Marion and Company for independent financial auditor services for the Sonoma County Community Development Commission in a total amount of $172,775 through December 31, 2026, to audit FY 2023/24 for an amount of $55,485, FY 2024/25 for an amount of $58,620, and FY 2025/26 for an amount of $58,670. The Sonoma County Auditor-Controller-Treasurer-Tax Collector (ACTTC) concurs with CDC’s selection of Smith Marion and Company.
Discussion:
As required by federal regulations contained in 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, the CDC must obtain an independent, single audit due to its expenditure of more than $750,000 in federal funds annually. The CDC utilizes the services of an independent firm of certified public accountants to audit its financial statements each fiscal year.
Pursuant to the CDC’s Procurement Policy, adopted by the Board of Commissioners to comply with federal requirements established at 24 CFR 85.36, the CDC issues a Request for Proposals (RFP) to obtain audit services. Typically, the audit services RFP is issued every three years. Standard accounting principles support this bidding pattern. The RFP is not issued to the Sonoma County Auditor‐Controller‐Treasurer‐Tax Collector (ACTTC) since the CDC’s governing body is the Board of Supervisors acting in their capacity as the CDC’s Board of Commissioners, and the County ACTTC’s office is therefore not considered to have an “arms‐length” independent relationship with the CDC. CDC staff assesses the agency’s audit needs and develops criteria in accordance with OMB A‐133 on which to evaluate audit firm proposals.
The RFP for audit services was issued on February 01, 2024, to 30 firms. Firms were provided with general information about the agency, agency description, services required, key dates of federal report submissions, proposal requirements, evaluation process, fee proposal attachments and a sample of a County Counsel approved “Agreement for Consulting/Professional Services Contract.” Two firms submitted completed proposals by the February 29, 2024 deadline, providing quotes for the services for FY 2023/24, as follows:
|
Respondent |
Dollar Amt. |
Ave. Score |
Rank |
|
Smith Marion & Co. |
$ 55,485.00 |
95 |
1 |
|
Pisenti & Brinker, LLP |
$ 49,500.00 |
30 |
2 |
|
|
|
|
|
The CDC accounting staff Controller and Supervising Accountant reviewed the proposals using pre-established criteria. Smith Marion & Company, Inc. prevailed as the firm with the most extensive experience in auditing Housing Authorities and other various federal funding streams that are used by the CDC. Despite the lower cost of Pisenti & Brinker, LLP in the first year, Smith Marion's bid was lower over the three-year term and included more hours from partner-level staff, representing a better value. Smith Marion also provides extensive experience providing auditing services to housing authorities and community development agencies and is more familiar with HUD financial reporting requirements. Smith Marion also provides consulting support to CDC staff inquiries throughout the year at no additional cost and has extensive experience within the firm with Housing Authorities and other federal and state grants, and does not need to rely on third-party consultants. The County ACTTC concurs with CDC’s selection of Smith Marion and Company.
Strategic Plan:
This item directly supports the County’s Five-year Strategic Plan and is aligned with the following pillar, goal, and objective. Contracting and employing outside audit services with Smith Marion and Co., ensures that the CDC is minimizing risk, providing transparency, and protecting its economic resources.
Pillar: Organizational Excellence
Goal: Goal 1: Strengthen operational effectiveness, fiscal reliability, and accountability
Objective: Objective 3: Ensure County budget process and information are understandable, accessible, and in a format that enables the public to identify County investments and funding for major initiatives and services.
Racial Equity:
N/A
Was this item identified as an opportunity to apply the Racial Equity Toolkit?
No
Prior Board Actions:
N/A
Fiscal Summary
|
Expenditures |
FY23-24 Adopted |
FY24-25 Projected |
FY25-26 Projected |
|
Budgeted Expenses |
$ 55,485 |
$ 58,620 |
$ 58,670 |
|
Additional Appropriation Requested |
|
|
|
|
Total Expenditures |
$ 55,485 |
$ 58,620 |
$ 58,670 |
|
Funding Sources |
|
|
|
|
General Fund/WA GF |
|
|
|
|
State/Federal |
$ 55,485 |
$ 58,620 |
$ 58,670 |
|
Fees/Other |
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Use of Fund Balance |
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Contingencies |
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Total Sources |
$ 55,485 |
$ 58,620 |
$ 58,670 |
Narrative Explanation of Fiscal Impacts:
Expenditure appropriations for the CDC’s annual audit is included in the FY2023/24 adopted budget. Expenditure appropriations have been included in the FY2024/25 budget development process. The cost of the annual audit is allocated over the CDC’s various funding sources.
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Staffing Impacts: |
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Position Title (Payroll Classification) |
Monthly Salary Range (A-I Step) |
Additions (Number) |
Deletions (Number) |
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Narrative Explanation of Staffing Impacts (If Required):
N/A
Attachments:
Agreement for Consulting/Professional Services
Related Items “On File” with the Clerk of the Board: