HomeMy WebLinkAboutAgr 2010-06-30 (Marcello & Company)AGREEMENT FOR PROFESSIONAL SERVICES -
ACCOUNTING SERVICES
THIS AGREEMENT, made and entered this 3 o day of ~ e, , 2010, by and between the
TOWN OF TIBURON, a municipal corporation of the State of California, hereinafter called
"Town," and MARCELLO & COMPANY, a California limited partnership, hereinafter referred to
as "Consultant,"
RECITALS
A. The Town requires the services of certified public accountants to perform certain agreed-
upon auditing services.
B. The Consultant is skilled and experienced in the auditing services required by the Town.
Therefore, the parties wish to contract for the Consultant to provide the services described in
the proposal letter from Consultant dated June 30, 2010, ("Services"), which is attached
hereto as Exhibit A and incorporated herein by reference, in accordance with all applicable
federal and state requirements.
AGREEMENT
1. Scone of Consultant Services. Consultant shall perform the agreed-upon auditing services,
as described in Exhibit A. Consultant may subcontract out certain of the Services to other
Consultants only as may be approved in advance in writing by Town. In the event of such
subcontracting, Consultant shall remain responsible for the full performance of such
services.
2. Compensation. Consultant's fee for the Services shall be as set forth in Exhibit B, which is
attached hereto and incorporated herein by reference, plus out of pocket expenses (such as
report reproduction, postage, travel, copies, etc.). Not withstanding the foregoing,
Consultant's maximum gross fee for the Services shall not exceed $26,000 without a prior
written amendment to this Agreement. Payments shall be due thirty days after submission
of an itemized invoice showing work actually completed. Consultant shall submit invoices
on a monthly basis for time and materials actually expended.
3. Standard of Work, Indemnity. Consultant shall perform the services in a skillful and
professional manner 'compatible with the usual, customary standard of Consultant's
profession. Consultant shall indemnify, defend and hold Town harmless from and against
claims, liabilities, suits, loss, cost, expense and damages to the extent caused by a negligent
act or omission of Consultant's in the performance of the Services pursuant to this
Agreement.
4. Consultant as Independent Contractor. Consultant (including its agents and employees) is
. not an agent or employee of the Town but is an independent contractor not subject to the
H.-TinancelAgreementsLAg. Auditors, FY 09 - IO.docl
direction and control of the Town. Without limiting the foregoing, Consultant shall
maintain complete control of its operations and personnel and shall be solely liable and
responsible to pay all required salaries, wages, expenses, taxes and other obligations,
including, but not limited to, withholding and Social Security.
at Hearin s. If requested by the Town Planning Director, Gonsultarshall
appear at Council or other eanngs
Audit of Books and Records. Town may, in its sole discretion, undertake an independent
audit anion of the Consultant's records and accounts of expenditures and
1 program activities at its own e sultant shall furnish all items necessary in the
Town's discretion to complete said audit and/or e ub'ect to restrictions on
confide~~tiality limited to expenditure or receipt cf program (ands, and pro
wnershi of Documents Use. All documents, including drawings and specifications
; prepare ltant pursuant to this Agreement shall be the property of Town. Town
acknowledges that said o are prepared for use only by Town officials in
reviewing the operations of the Town's zn ent. Consultant makes no
representation that said documents are suitable for any other p
8. Stop Work Order. Town may at any time, by written notice to Consultant ("Stop Work
Order"), require Consultant to stop or suspend performance of the Services, in whole or in
part, for a period of up to ninety days after such notice is delivered to Consultant. Upon
receipt of the Stop Work Order, Consultant shall immediately comply therewith and take all
reasonable steps to minimize the incurrence of costs allocable to the Services covered bythe
Stop Work Order during the period of work stoppage. Within ninety days of the delivery of
the Stop Work Order, or such later time as may be agreed to by the parties, Town shall
either cancel the Stop Work Order or terminate this Agreement as provided in Paragraph 13.
Consultant shall resume work upon the cancellation of the Stop Work Order. To the extent
that the Stop Work Order results in a documentable increase in the cost of performing the
Services or the time required for such performance, Consultant shall receive an equitable
adjustment in compensation or an extension of time for performance, as appropriate. .T s J~, n ,
9. Delinquency. In the event that a proper invoice remains unpaid for more than 45 days after
submittal, Consultant may commence to charge interest of the unpaid amounts at the lesser
of 1.5% per month or the maximum rate allowed under applicable usury laws. In addition,
Consultant may suspend the performance of the Services after giving Town 10 days notice
of its intent to do so. In the event of such suspension, the Base Fee shall be increased to
include Consultant's reasonable costs of suspending and restarting the Services.
-r0:----Ti_nati Contract. It is expressly understood that either party shall have the right to
terminate this agreement within five (5) days written notice to the other party. In such
event, Consultant shall deliver to~h -awnro jes of all finished and unfinished surveys,
studies, documents, computer disks, and/or repor
Consultant shall be ts p~ o the contract, and
entitled to receive just and equitable compensation for any s '
H.-TinancelAgreementsUg. Auditors, FY 09 - IO.doc2
work completed as determined by the Town.
11. Discrimination. In the performance of the terms of this Agreement, Consultant shall not
engage in nor permit others he may employ to engage in discrimination in the employment
of such persons based on race, color, religion, sex, sexual preference, age, or handicapped
conditions.
12. Miscellaneous.
A. Other Contract Provisions. Other contract provisions are set forth in Exhibit A. To
the extent that there are any inconsistencies with such Exhibit and the other portions
of this Agreement, the latter shall prevail.
B. Governing Law; Venue. The laws of the State of California shall govern this
Agreement. Marin County shall be the venue for resolving any dispute arising from
this Agreement.
C. Severability. If any provision of this Agreement is found to be invalid or
unenforceable, the validity and enforceability of the remaining portions shall not be
affected unless the effect thereof would materially change the economic burden on
either party.
D. Successors in Interest; Assignment. This Agreement shall be binding on the assigns
and successors in interest to both parties. Neither party may assign their obligations
under this Agreement without the written consent of the other party.
E. Entire Agreement; Amendment. This Agreement represents the entire Agreement
between the parties. This Agreement may only be amended in writing.
IN WITNESS WHEREOF the parties hereto have caused their duly authorized representatives to
execute this Agreement the day and year above written.
CONSULTANT
TGWN OF TI]B~TRON
6pLhA.. Marcello, D' ector of Audits Town Manger
MARCELLO & CO ANY
APP VF;ID AS TO FORM:
f
Ann R. Dan rth, Town Attorney
H: IFinancelAgreementslAg. Auditors, FY 09 -10.doc3
MARCELLO & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
2701 Cottage Way, Suite 30 / Sacramento, California 95825 / 916.979.9079
June 30, 2010
Town Hall - Tiburon
Attention: Ms. Heidi Bigall, ASD
1505 Tiburon Boulevard
Tiburon, California 94920
RE: 2010 Audit Engagement Letter
=r 4 ~ .e.._+.~-,-.tee- ...n.. `..~..e.
.
" 4 .
L JUL - 2 2010
FINANCE DEPARTMENT
TOWN OFTIBURON
We are pleased to confirm our understanding of the services we are to provide the Town of Tiburon for the year ended
June 30, 2010. We will audit the financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information, which collectively comprise the basic financial statements of the Town of
Tiburon and the Tiburon Redevelopment Agency (a blended component unit of the Town) as of and for the year ended
June 30, 2010. Accounting standards generally accepted in the United States provide for certain required
supplementary information (RSI), such as management's discussion and analysis (MD&A), to accompany the Town of
Tiburon's basic financial statements. As part of our engagement, we will apply certain limited procedures to the Town
of Tiburon's RSI. These limited procedures will consist principally of inquiries of management regarding the methods of
measurement and presentation, which management is responsible for affirming to us in its representation letter.
Unless we encounter problems with the presentation of the RSI or with procedures relating to it, we will disclaim an
opinion on it. The following RSI is required by generally accepted accounting principles and will be subjected to certain
limited procedures, but will not be audited:
1. Management's Discussion and Analysis.
2. Schedule of Funding Progress - Defined Benefit Pension Plan.
3. Budget to Actual Comparisons.
Audit Objective
The objective of our audit is the expression of opinions as to whether your basic financial statements are fairly
presented, in all material respects, in conformity with generally accepted accounting principles and to report on the
fairness of the additional information referred to in the first paragraph when considered in relation to the basic financial
statements taken as a whole. Our audit will be conducted in accordance with auditing standards generally accepted in
the United States of America and will include tests of the accounting records and other procedures we consider
necessary to enable us to express such opinions. If our opinions on the financial statements are other than unqualified,
we will fully discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or are
unable to form or have not formed opinions, we may decline to express opinions or to issue a report as a result of this
engagement.
Management Responsibilities
Management is responsible for the basic financial statements and all accompanying information as well as all
representations contained therein. You are also responsible for making all management decisions and performing all
management functions; for designating an individual with suitable skill, knowledge, or experience to oversee our
assistance with the preparation of your financial statements and related notes and any other nonattest services we
provide; and for evaluating the adequacy and results of those services and accepting responsibility for them.
Management is responsible for establishing and maintaining effective internal controls, including monitoring ongoing
activities; for the selection and application of accounting principles; and for the fair presentation in the financial
statements of the respective financial position of the governmental activities, each major fund, and the aggregate
remaining fund information of the Town of Tiburon, in conformity with U.S. generally accepted accounting principles.
Management is also responsible for making all financial records and related information available to us and for the
accuracy and completeness of that information. Your responsibilities include adjusting the financial statements to
correct material misstatements and confirming to us in the representation letter that the effects of any uncorrected
misstatements aggregated by us during the current engagement and pertaining to the latest period presented are
immaterial, both individually and in the aggregate, to the financial statements taken as a whole.
- 1 -
You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for
informing us about all known or suspected fraud or illegal acts affecting the government involving (1) management, (2)
employees who have significant roles in internal control, and (3) others where the fraud or illegal acts could have a
material effect on the financial statements. Your responsibilities include informing us of your knowledge of any
allegations of fraud or suspected fraud affecting the government received in communications from employees, former
employees, regulators, or others. In addition, you are responsible for identifying and ensuring that the entity complies
with applicable laws and regulations.
With regard to using the auditor's report, you understand that you must obtain our prior written consent to reproduce or
use our report in bond offering official statements or such other documents.
With regard to the electronic dissemination of audited financial statements, including financial statements published
electronically on your website, you understand that electronic sites are a means to distribute information and, therefore,
we are not required to read the information contained in these sites or to consider the consistency of other information
in the electronic site with the original document.
Audit Procedures - General
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas
to be tested. We will plan and perform the audit to obtain reasonable rather than absolute assurance about whether
the financial statements are free of material misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3)
misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the entity or to
acts by management or employees acting on behalf of the entity.
Because an audit is designed to provide reasonable, but not absolute, assurance and because we will not perform a
detailed examination of all transactions, there is a risk that material misstatements may exist and not be detected by us.
In addition, an audit is not designed to detect immaterial misstatements, or violations of laws or governmental
regulations that do not have a direct and material effect on the financial statements. However, we will inform you of any
material errors and any fraudulent financial reporting or misappropriation of assets that come to our attention. We will
also inform you of any violations of laws or governmental regulations that come to our attention, unless clearly
inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not extend to any
later periods for which we are not engaged as auditors.
Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and
may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other
assets and liabilities by correspondence with selected individuals, funding sources, creditors, and financial institutions.
We will request written representations from your attorneys as part of the engagement, and they may bill you for
responding to this inquiry. At the conclusion of our audit, we will require certain written representations from you about
the financial statements and related matters.
Audit Procedures - Internal Control
Our audit will include obtaining an understanding of the entity and its environment, including internal control, sufficient
to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of
further audit procedures. An audit is not designed to provide assurance on internal control or to identify deficiencies in
internal control. However, during the audit, we will communicate to management and those charged with governance
internal control related matters that are required to be communicated under AICPA professional standards.
Audit Procedures - Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement,
we may perform tests of the Town of Tiburon's compliance with applicable laws and regulations and the provisions of
contracts and agreements. However, the objective of our audit will not be to provide an opinion on overall compliance
and we will not express such an opinion.
Engagement Administration, Fees, and Other
We may from time to time, and depending on the circumstances, use third-party service providers in serving your
account. We may share confidential information about you with these service providers, but remain committed to
maintaining the confidentiality and security of your information. Accordingly, we maintain internal policies, procedures,
and safeguards to protect the confidentiality of your personal information. In addition, we will secure confidentiality
agreements with all service providers to maintain the confidentiality of your information and we will take reasonable
precautions to determine that they have appropriate procedures in place to prevent the unauthorized release of your
confidential information to others. In the event that we are unable to secure an appropriate confidentiality agreement,
you will be asked to provide your consent prior to the sharing of your confidential information with the third-party
-2-
service provider. Furthermore, we will remain responsible for the work provided by any such third-party service
providers.
We understand that your employees will prepare all cash or other confirmations we request and will locate any
documents selected by us for testing.
We expect to begin our audit in September 2010 and to issue our reports no later than November 30, 2010. Ralph
Marcello is the engagement partner and is responsible for supervising the engagement and signing the report or
authorizing another individual to sign it. Our fee for these services will be at our standard hourly rates plus out-of-
pocket costs (such as report reproduction, word processing, postage, travel, copies, telephone, etc.) except that we
agree that our gross fee, including expenses is nat expected to exceed $26,000. Our standard hourly rates vary
according to the degree of responsibility involved and the experience level of the personnel assigned to your audit. Our
invoices for these fees will be rendered each month as work progresses and are payable on presentation. In
accordance with our firm policies, work may be suspended if your account becomes 30 days or more overdue and may
not be resumed until your account is paid in full. If we elect to terminate our services for nonpayment, our engagement
will be deemed to have been completed upon written notification of termination, even if we have not completed our
report. You will be obligated to compensate us for all time expended and to reimburse us for all out-of-pocket costs
through the date of termination. The above fee is based on anticipated cooperation from your personnel and the
assumption that unexpected circumstances will not be encountered during the audit. Such unexpected circumstances
might include, for example, a greater than expected risk of material misstatement due to fraud. If significant additional
time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the additional costs.
Financial Statement Report and Timing
• Preparation and delivery to the auditor (via email) of the Trial Balance, preferably one week before field work
commences, will be the responsibility of the Town.
• All documents requested by the auditor via a "Request for Audit Documents Schedule" should be ready at
9:00am on the first day of field work.
• Preparation of the final bound audited financial statement reports of the Town and RDA will be the
responsibility of the auditor. (10 reports of each)
• A Single Audit is not anticipated nor included with this engagement. (average fee, $7,500)
• Field work is tentatively scheduled to begin Monday, September 20, 2010 and end Friday, September 24,
2010.
• Preparation of Management's Discussion and Analysis (MD&A) and other Required Supplementary
Information (RSI) will be the responsibility of the Town.
• Preparation of the Town's State Controller Office report will be the responsibility of the auditor, due
electronically approximately on October 20, 2010.
• Preparation of the RDA's State Controller Office report will be the responsibility of the auditor, due
electronically by December 31, 2010.
We appreciate the opportunity to be of service to the Town of Tiburon and believe this letter accurately summarizes
the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of
our engagement as described in this letter, please sign the enclosed copy and return it to us.
Very truly yours,
Marcello & Company, CPAs
RESPONSE:
This letter correctly sets forth the understanding of the Town of Tiburon.
By
Title
Date
-3-