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HomeMy WebLinkAboutStaff Report 2405-3105CITY OF PALO ALTO Policy & Services Committee Special Meeting Tuesday, June 11, 2024 7:00 PM     Agenda Item     2.Approval of Office of City Auditor FY2025 Task Orders Late Packet Report, Presentation Task 1: Citywide Risk Assessment Task 2: Preparation of Annual Audit Plan Task 3: Selection of External Financial Auditor and Annual Audit Coordination Task 5: Preparation of Quarterly Reports, Annual Status Reports, Provision of City Hotline and Other Ongoing Office Administrative Functions Policy & Services Committee Staff Report Report Type: ACTION ITEMS Lead Department: City Auditor Meeting Date: June 11, 2024 Report #:2405-3105 TITLE Approval of Office of City Auditor FY2025 Task Orders Task 1: Citywide Risk Assessment Task 2: Preparation of Annual Audit Plan Task 3: Selection of External Financial Auditor and Annual Audit Coordination Task 5: Preparation of Quarterly Reports, Annual Status Reports, Provision of City Hotline and Other Ongoing Office Administrative Functions BACKGROUND This will be released as a late packet report. APPROVED BY: Kate Murdock Policy & Services Committee Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: City Auditor Meeting Date: June 11, 2024 Report #:2405-3078 TITLE Recommend City Council Approval of Various Task Orders with Baker Tilly for Internal Audit Services 1) Extend deadline for FY 2024 Task Orders Task 1: Citywide Risk Assessment, Task 2: Preparation of Annual Audit Plan, Task 3: Selection of External Financial Auditor and Annual Audit Coordination, 2) Execute New FY 2025 Task 5: Preparation of Quarterly Reports, Annual Status Reports, Provision of City Hotline and Other Ongoing Office Administrative Functions, and 3) Amend the budget for FY 2024 Task Orders; CEQA Status – Not a Project. RECOMMENDATION The City Auditor recommends that the Policy & Services Committee recommend City Council approval of the following: 1. Extend the deadline from June 30, 2024 to December 31, 2024 for FY2024 Task Orders still underway: a. FY2024: Task 1: Citywide Risk Assessment b. FY2024: Task 2: Preparation of Annual Audit Plan c. FY2024: Task 3: Selection of External Financial Auditor and Annual Audit Coordination 2. A new FY2025 Task 5 to commence on July 1, 2025 to support ongoing audit reporting and administrative activities: Task 5: Preparation of Quarterly Reports, Annual Status Reports, Provision of City Hotline and Other Ongoing Office Administrative Functions; and 3. Amend FY2024 Task Orders to realign authorized budget with a net zero impact overall: a. FY2024: Task 6: Evaluation and Benchmarking reduced by $20,000, b. FY2024: Task 5: Preparation of Quarterly Reports, Annual Status Report, Provision of City Hotline, and Other Ongoing Office Administrative Functions increased by $20,000. BACKGROUND In accordance with our agreement with the City, Baker Tilly is required to conduct recurring activities each year. Those recurring activities include the following tasks outlined in our agreement. • Task 1: Citywide Risk Assessment • Task 2: Preparation of Annual Audit Plan • Task 3: Selection of External Financial Auditor and Annual Audit Coordination • Task 5: Preparation of Quarterly Reports, Annual Status Reports, Provision of City Hotline and Other Ongoing Office Administrative Functions Various audit specific task orders are approved annually in alignment with the Annual Council Approved Audit Workplan. Task Orders approved by the Council are executed by the Policy & Services Committee Chair as the Project Manager for the Baker Tilly contract as stipulated in the contract terms. ANALYSIS The Office of the City Auditor (OCA) is seeking three types of changes to task orders for the P&S Committee’s recommendation for Council Approval. If these Task Orders are approved unanimously by the Policy & Services Committee, this recommendation will be forwarded to the full City Council approval on the June 18th consent calendar for Council approval. 1) Recommended Extension of Time (Attachment A) FY2024 Task Orders are underway but not complete and currently are authorized through June 30, 2024. The recommended amendment would extend the term six months to December 31, 2024 for the task orders below. No change in budget is requested, this extension will enable work underway to continue that was impacted by the change in City Auditor role. • FY2024: Task 1: Beginning with year 1 and continuing at a minimum every other year thereafter, prepare a citywide risk assessment following the same review and approval requirements described in Task 2. The risk assessment process will be the primary determinant of subsequent audit activity. • FY2024: Task 2: Prepare an annual audit plan for review by the City Manager and appropriate City Council Committee(s), and approval by the City council, that identifies preliminary objectives of each audit to be performed, the schedule for each audit, and the estimated not to exceed resources and costs for each audit. The city Auditor shall consult with the city Attorney as necessary when developing audit plans. The annual audit plan will be largely based on the risk assessment required in Task 1. • FY2024: Task 3: Selection of an External Financial Auditor and Annual Audit Coordination. 2) New Task Orders for FY2025 (Attachment B) To begin work in FY 2025, approval of the Task 5 commencing on July 1, 2025, ending June 30, 2025, will ensure support of ongoing audit reporting and administrative activities. Specifically, Task 5 is “Preparation of Quarterly Reports, Annual Status Reports, Provision of City Hotline and Other Ongoing Office Administrative Functions.” The work will include the review and preparation of quarterly and annual reports, the provision of the City Hotline, and other administrative functions. It will verify the reports for accuracy, timeliness, completeness, and compliance with standards and regulations. The City Hotline's effectiveness, efficiency, and compliance, including responsiveness and user satisfaction, will be evaluated. Administrative functions will be assessed for efficiency, effectiveness, and compliance. 3) Amend FY2024 Task Orders to realign authorized budget with a net zero impact overall (Attachment C) In reconciling actual activity during the transition of both staffing and the fiscal year, realignment of budgeted levels between task orders is recommended. No change in overall FY 2024 spending authority is recommended, however, this better aligns with the cost of these tasks respectively. The Office of the City Auditor would like to transfer unused funds from Task 6: Evaluation and Benchmarking in the amount of $20,000 and reallocate these funds to Task 5: Preparation of Quarterly Reports, Annual Status Report, Provision of City Hotline, and Other Ongoing Administrative Functions. FISCAL/RESOURCE IMPACT Work recommended in these tasks is within both the approved scope and compensation of the contract with Baker Tilly and funding levels in the FY2024 and FY2025 Operating Budget for the Office of the City Auditor. ENVIRONMENTAL IMPACT Council action on this item is not a project as defined by CEQA because contracting for auditing services is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. CEQA Guidelines section 15378(b)(5). ATTACHMENTS: Attachment A: Time Extension FY24 Task Orders 1, 2, & 3 Attachment B: FY25 Task 5: Preparation of Reports, City Hotline, & Other Tasks Attachment C: Budget Alignment FY24 Task Orders 5 & 6 APPROVED BY: Kate Murdock, City Auditor PROFESSIONAL SERVICES TASK ORDER TASK ORDER FY24-01 Citywide Risk Assessment Consultant shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 below are incorporated into this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. C21179340 OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE) 1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340 1B. TASK O RDER NO.: FY24-01 2. CONSULTANT NAME: Baker Tilly US, LLP 3. PERIOD OF PERFORMANCE: START: November 1, 2023 COMPLETION: June 30, 2024 4 TOTAL TASK ORDER PRICE: $35,000 BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT: TBD 5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________ 6. CITY PROJECT MANAGER’S NAME & DEPARTMENT: Greg Tanaka, Chair of the City Council’s Policy and Services Committee 7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A) MUST INCLUDE:  SERVICES AND DELIVERABLES TO BE PROVIDED  SCHEDULE OF PERFORMANCE  MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable)  REIMBURSABLE EXPENSES, if any (with “not to exceed” amount) 8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A I hereby authorize the performance of the work described in this Task Order. APPROVED: CITY OF PALO ALTO BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: COMPANY NAME: ______________________ BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F Councilmember Tanaka 8/28/2023 Council member Greg Tanaka Baker Tilly US, LLP City Auditor 8/29/2023 Adriane D. McCoy Attachment A DESCRIPTION OF SCOPE OF SERVICES Introduction Attachment A, the Description of Scope of Services, contains the following four (4) elements:  Services and Deliverables To Be Provided  Schedule of Performance  Maximum Compensation Amount and Rate Schedule (As Applicable)  Reimbursable Expenses, if any (With “Not To Exceed” Amount) Services & Deliverables Baker Tilly’s approach to conducting the Citywide Risk Assessment involves four (4) primary steps:  Step 1: Project Planning & Management  Step 2: Information Gathering  Step 3: Analysis  Step 4: Reporting Step 1 – Project Planning & Management This step includes those tasks necessary to solidify mutual understanding of the risk assessment scope, objectives, deliverables, and timing as well as ensuring that appropriate client and consultant resources are available and well-coordinated. Tasks include:  Finalize project design – The first project activities will be to: o Identify communication channels and reporting relationships and responsibilities of project staff o Review and confirm project timelines o Review and confirm deliverables  Arrange logistics/administrative support – Matters to be addressed include schedules for interviews and data collection, contact persons in the departments, any other logistical matters, etc.  Conduct kick-off meeting with key project stakeholders Step 2 – Information Gathering This step involves gathering information, through various means, that will enable the project team to understand the various risks facing the City. Tasks include:  Request and review background information – the project team will develop an information request(s) in order to obtain various background information from the City. The request will include, but not be limited to: DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F o Strategic plan(s) o Financial reports, including the most recent City Budget and Comprehensive Annual Financial Report (CAFR) o Operational policies and procedures o Municipal code o Consulting reports o Other relevant information and reports  Conduct interviews with City Council and management o Risk assessment interviews, aimed at understanding City functions and identifying risks, will be conducted with City Council members as well as department and division  Conduct a risk assessment survey, if necessary  Conduct research into key risks in order to identify relevant information to assess risks Overall, the project team will consider the risk categories including:  Strategic  Financial  Technology  Human Capital  Operational  Reputational  Economic  Compliance Step 3 – Risk Analysis In Step 3, the project team will develop a risk assessment consisting of auditable areas (also referred to as an audit or risk universe). The risk assessment will be prepared in consideration of the following risks types:  Environment, Strategy, and Governance – risks that have an organization wide impact and are not subject to a specific department or function (e.g., ethics)  Significant Projects and Initiatives – risks associated with large projects (e.g., capital projects, technology implementation) or City initiatives (e.g., employee engagement initiative).  Function Specific Risks – risks associated with a specific department or function (e.g., procurement policy compliance) The project team will assess the likelihood and impact of potential adverse events in order to quantitatively score each auditable area for purposes of prioritizing audit activities. Step 4 – Reporting In Step 4, the project team will finalize the draft Risk Matrix and prepare a draft Risk Assessment Report. The project team will ask for input (general completeness, risk scoring) on the Risk Matrix from key project stakeholders. Upon finalization of the Risk Matrix, the project team will finalize the Risk Assessment Report. DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F Deliverables: The following deliverables will be prepared as part of this engagement:  Risk Assessment Report  Presentation of Results to City Council (note that this may be combined with presentation of the Task 2 Annual Audit Plan) Schedule of Performance Anticipated Start Date: November 1, 2023 Anticipated End Date: June 30, 2024 Maximum Compensation Amount and Rate Schedule The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $35,000. The not-to-exceed budget is based on an estimate of 200 total project hours, of which 20 are estimated to be completed by the City Auditor. Reimbursable Expenses We plan to complete all work remote including all interviews and documentation review. If at any point the City and Baker Tilly mutually determine it will be beneficial to perform a portion of the work on-site, we will submit an estimate of our reimbursable expenses for the City’s approval prior to traveling to Palo Alto. DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F PROFESSIONAL SERVICES TASK ORDER TASK ORDER FY24-02 Annual Audit Plan Consultant shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 below are incorporated into this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. C21179340 OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE) 1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340 1B. TASK O RDER NO.: FY24-02 2. CONSULTANT NAME: Baker Tilly US, LLP 3. PERIOD OF PERFORMANCE: START: November 1, 2023 COMPLETION: June 30, 2024 4 TOTAL TASK ORDER PRICE: $10,500 BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT: TBD 5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________ 6. CITY PROJECT MANAGER’S NAME & DEPARTMENT: Greg Tanaka, Chair of the City Council’s Policy and Services Committee 7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A) MUST INCLUDE:  SERVICES AND DELIVERABLES TO BE PROVIDED  SCHEDULE OF PERFORMANCE  MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable)  REIMBURSABLE EXPENSES, if any (with “not to exceed” amount) 8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A I hereby authorize the performance of the work described in this Task Order. APPROVED: CITY OF PALO ALTO BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: COMPANY NAME: ______________________ BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F Council member Greg Tanaka Councilmember Tanaka 8/28/2023 Baker Tilly US, LLP 8/29/2023 Adriane D. McCoy City Auditor Attachment A DESCRIPTION OF SCOPE OF SERVICES Introduction Attachment A, the Description of Scope of Services, contains the following four (4) elements:  Services and Deliverables To Be Provided  Schedule of Performance  Maximum Compensation Amount and Rate Schedule (As Applicable)  Reimbursable Expenses, if any (With “Not To Exceed” Amount) Services & Deliverables Baker Tilly’s approach to preparing the Annual Audit Plan involves two (2) primary steps:  Step 1: Consultation with City Council and Management  Step 2: Reporting Step 1 – Consultation with City Council and Management The Risk Matrix and Risk Assessment Report will serve as the primary drivers of the Annual Audit Plan. The project team will initiate discussions over Risk Assessment results, potential audit activities, and audit coverage with City Council and Management. The purpose of those conversations will be to understand the priorities of City Council, and to develop a Draft Annual Audit Plan: The Draft Annual Audit Plan will identify the following components for each audit activity:  Audit activity type – audit or consulting activity  Audit objectives and scope  Anticipated budget – both in terms of hours and budget  Anticipated timeline Step 2 – Reporting The project team will present the Draft Annual Audit Plan to the City Council in order to obtain input on each potential audit activity. Upon refining the plan, the project team will finalize the Annual Audit Plan for presentation to City Council. Deliverables The following deliverable will be prepared as part of this engagement:  Annual Audit Plan DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F Schedule of Performance Anticipated Start Date: November 1, 2023 Anticipated End Date: June 30, 2024 Maximum Compensation Amount and Rate Schedule The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $10,500. The not-to-exceed budget is based on an estimate of 50 total project hours, of which 10 are estimated to be completed by the City Auditor. Reimbursable Expenses We plan to complete all work remote including all interviews and documentation review. If at any point the City and Baker Tilly mutually determine it will be beneficial to perform a portion of the work on-site, we will submit an estimate of our reimbursable expenses for the City’s approval prior to traveling to Palo Alto. DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F PROFESSIONAL SERVICES TASK ORDER TASK ORDER FY24-03 External Financial Auditor Consultant shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 below are incorporated into this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. C21179340 OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE) 1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340 1B. TASK O RDER NO.: FY24-03 2. CONSULTANT NAME: Baker Tilly US, LLP 3. PERIOD OF PERFORMANCE: START: July 1, 2023 COMPLETION: June 30, 2024 4 TOTAL TASK ORDER PRICE: $15,000 BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD 5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________ 6. CITY PROJECT MANAGER’S NAME & DEPARTMENT: Greg Tanaka, Chair of the City Council’s Policy and Services Committee 7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A) MUST INCLUDE:  SERVICES AND DELIVERABLES TO BE PROVIDED  SCHEDULE OF PERFORMANCE  MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable)  REIMBURSABLE EXPENSES, if any (with “not to exceed” amount) 8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A I hereby authorize the performance of the work described in this Task Order. APPROVED: CITY OF PALO ALTO BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: COMPANY NAME: ______________________ BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F Councilmember Tanaka Council member Greg Tanaka 8/28/2023 Baker Tilly US, LLP 8/29/2023 City Auditor Adriane D. McCoy Attachment A DESCRIPTION OF SCOPE OF SERVICES Introduction Attachment A, the Description of Scope of Services, contains the following four (4) elements:  Services and Deliverables To Be Provided  Schedule of Performance  Maximum Compensation Amount and Rate Schedule (As Applicable)  Reimbursable Expenses, if any (With “Not To Exceed” Amount) Services & Deliverables Baker Tilly’s approach to the Office of the City Auditor’s role on the financial audit involves one (1) primary step in FY23:  Step 1: Assistance in Managing the Financial Audit Step 1 – Role in Managing the Financial Audit In FY23, the project team will assist in managing the financial audit and presenting financial audit results to the Finance Committee and to the City Council, in accordance with municipal code. Deliverables: Legislative documents will be prepared to present the financial statements and reports prepared by an external auditor to the Finance Committee Schedule of Performance Anticipated Start Date: July 1, 2023 Anticipated End Date: June 30, 2024 Maximum Compensation Amount and Rate Schedule The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $15,000. The not-to-exceed budget is based on an estimate of 40 total project hours, of which 40 are estimated to be completed by the City Auditor. DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F Reimbursable Expenses Baker Tilly anticipates planning one on-site fieldwork week. Given this possibility, Baker Tilly could incur reimbursable expenses for this Task. The not-to-exceed maximum for reimbursable expenses for this Task is $3,250. The following summarizes anticipated reimbursable expenses:  Round-trip Airfare – $1,000  Ground Transportation (car rental or Uber/taxi) - $400  Hotel accommodation - $1,500 (4 nights)  Food and incidentals – $350 DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F 4 7 7 5 PROFESSIONAL SERVICES TASK ORDER TASK ORDER FY25-05 Various Reporting & City Hotline Consultant shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 below are incorporated into this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. C21179340 OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE) 1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340 1B. TASK ORDER NO.: FY23-4.22 2. CONSULTANT NAME: Baker Tilly US, LLP 3. PERIOD OF PERFORMANCE: START: July 1, 2024 COMPLETION: June 30, 2025 4 TOTAL TASK ORDER PRICE: $60,000 BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD 5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________ 6. CITY PROJECT MANAGER’S NAME & DEPARTMENT: Lydia Kou, Chair of the City Council’s Policy and Services Committee 7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A) MUST INCLUDE: ▪SERVICES AND DELIVERABLES TO BE PROVIDED ▪SCHEDULE OF PERFORMANCE ▪MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable) ▪REIMBURSABLE EXPENSES, if any (with “not to exceed” amount) 8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A I hereby authorize the performance of the work described in this Task Order. APPROVED: CITY OF PALO ALTO BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: COMPANY NAME: ______________________ BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ 4 7 7 5 Attachment A DESCRIPTION OF SCOPE OF SERVICES Introduction Attachment A, the Description of Scope of Services, contains the following four (4) elements: •Services and Deliverables To Be Provided •Schedule of Performance •Maximum Compensation Amount and Rate Schedule (As Applicable) •Reimbursable Expenses, if any (With “Not To Exceed” Amount) Services & Deliverables Baker Tilly’s will provide the following services in Task 5: •Quarterly Reports •Annual Status Report •Provision of the City Hotline •Office Administrative Functions Deliverables: The following deliverables will be prepared as part of this engagement: •Quarterly Reports (4 in FY2025) •Annual Status Report Schedule of Performance Anticipated Start Date: July 1, 2024 Anticipated End Date: June 30, 2025 Maximum Compensation Amount and Rate Schedule The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $60,000. The not-to-exceed budget is based on an estimate of 300 total project hours, of which 170 are estimated to be completed by the City Auditor. Reimbursable Expenses The City Auditor anticipates a trip every other month (total of 6 trips). Given this possibility, Baker Tilly could incur reimbursable expenses for this Task. 4 7 7 5 The not-to-exceed maximum for reimbursable expenses for this Task is $19,500. The following summarizes anticipated reimbursable expenses: •Round-trip Airfare – $6,000 (6 round trip flights) •Ground Transportation (car rental or Uber/taxi) - $2,400 •Hotel accommodation - $9,000 (24 nights) •Food and incidentals – $2,100 PROFESSIONAL SERVICES TASK ORDER TASK ORDER FY24-05 Various Reporting & City Hotline Consultant shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 below are incorporated into this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. C21179340 OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE) 1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340 1B. TASK O RDER NO.: FY24-05 2. CONSULTANT NAME: Baker Tilly US, LLP 3. PERIOD OF PERFORMANCE: START: July 1, 2023 COMPLETION: June 30, 2024 4 TOTAL TASK ORDER PRICE: $90,000 BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD 5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________ 6. CITY PROJECT MANAGER’S NAME & DEPARTMENT: Greg Tanaka, Chair of the City Council’s Policy and Services Committee 7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A) MUST INCLUDE:  SERVICES AND DELIVERABLES TO BE PROVIDED  SCHEDULE OF PERFORMANCE  MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable)  REIMBURSABLE EXPENSES, if any (with “not to exceed” amount) 8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A I hereby authorize the performance of the work described in this Task Order. APPROVED: CITY OF PALO ALTO BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: COMPANY NAME: ______________________ BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F Councilmember Tanaka 8/28/2023 Council member Greg Tanaka Baker Tilly US, LLP Adriane D. McCoy City Auditor 8/29/2023 Attachment A DESCRIPTION OF SCOPE OF SERVICES Introduction Attachment A, the Description of Scope of Services, contains the following four (4) elements:  Services and Deliverables To Be Provided  Schedule of Performance  Maximum Compensation Amount and Rate Schedule (As Applicable)  Reimbursable Expenses, if any (With “Not To Exceed” Amount) Services & Deliverables Baker Tilly will provide the following services in Task 5:  Quarterly Reports  Annual Status Report  Provision of the City Hotline  Office Administrative Functions Deliverables: The following deliverable will be prepared as part of this engagement:  Quarterly Reports (4 in FY24)  Annual Status Report Schedule of Performance Anticipated Start Date: July 1, 2023 Anticipated End Date: June 30, 2024 Maximum Compensation Amount and Rate Schedule The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $90,000. The not-to-exceed budget is based on an estimate of 300 total project hours, of which 170 are estimated to be completed by the City Auditor. Reimbursable Expenses The City Auditor anticipates a trip every other month (total of 6 trips). Given this possibility, Baker Tilly could incur reimbursable expenses for this Task. The not-to-exceed maximum for reimbursable expenses for this Task is $19,500. DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F The following summarizes anticipated reimbursable expenses:  Round-trip Airfare – $6,000 (6 round trip flights)  Ground Transportation (car rental or Uber/taxi) - $2,400  Hotel accommodation - $9,000 (24 nights)  Food and incidentals – $2,100 DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F PROFESSIONAL SERVICES TASK ORDER TASK ORDER FY24-06 Evaluation and Benchmarking Consultant shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 below are incorporated into this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. C21179340 OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE) 1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340 1B. TASK O RDER NO.: FY24-06 2. CONSULTANT NAME: Baker Tilly US, LLP 3. PERIOD OF PERFORMANCE: START: July 1, 2023 COMPLETION: June 30, 2024 4 TOTAL TASK ORDER PRICE: $24,000 BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD 5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________ 6. CITY PROJECT MANAGER’S NAME & DEPARTMENT: Greg Tanaka, Chair of the City Council’s Policy and Services Committee 7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A) MUST INCLUDE:  SERVICES AND DELIVERABLES TO BE PROVIDED  SCHEDULE OF PERFORMANCE  MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable)  REIMBURSABLE EXPENSES, if any (with “not to exceed” amount) 8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A I hereby authorize the performance of the work described in this Task Order. APPROVED: CITY OF PALO ALTO BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: COMPANY NAME: ______________________ BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F Council member Greg Tanaka Councilmember Tanaka 8/28/2023 Adriane D. McCoy Baker Tilly US, LLP City Auditor 8/29/2023 Attachment A DESCRIPTION OF SCOPE OF SERVICES Introduction Attachment A, the Description of Scope of Services, contains the following four (4) elements:  Services and Deliverables To Be Provided  Schedule of Performance  Maximum Compensation Amount and Rate Schedule (As Applicable)  Reimbursable Expenses, if any (With “Not To Exceed” Amount) Services & Deliverables Baker Tilly’s approach to undergoing a peer review involves three (3) primary steps:  Step 1: Preparation for a peer review  Step 2: A peer review by an independent evaluator  Step 3: Cost per audit analysis Step 1 – Preparation for a peer review The Office of the City Auditor (OCA) will conduct a self-assessment before a peer review. Step 2 – A peer review by a qualified organization OCA will undergo a peer review conducted by an independent evaluator. In order to accomplish this task, OCA will:  Request a peer review from the Association of Local Government Auditors (ALGA)  Provide documents and answer questions as requested by ALGA  Obtain a peer review report from ALGA Step 3 – Cost per audit analysis OCA will prepare a cost per audit analysis. Deliverables: Legislative documents will be prepared to present a peer review report from an independent evaluator. Schedule of Performance Anticipated Start Date: June 1, 2023 Anticipated End Date: June 30, 2024 DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F Maximum Compensation Amount and Rate Schedule The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $24,000. The not-to-exceed budget is based on an estimate of 95 total project hours, of which 25 are estimated to be completed by the City Auditor. Reimbursable Expenses Baker Tilly anticipates no travel costs. All procedures including interviews and documentation reviews are expected to be completed remotely. DocuSign Envelope ID: 64EC69FD-9F22-4E31-A074-737EA405F27F Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, are members of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms. City of Palo AltoOffice of the City Auditor (OCA) Policy & Services Committee Meeting Task Order Changes City Auditor: Kate Murdock June 11, 2024 City Auditor recommends the Policy and Services Committee: Extend Task Orders, which expire June 30, 2024, to December 31, 2024: o FY2024: Task 1 – Citywide Risk Assessment o FY2024: Task 2 – Preparation of the Annual Audit Plan o FY2024: Task 3 – Selection of External Financial Auditor and Annual Audit Coordination Approve the commencement of FY2025 Task 5 on July 1, 2024 to support ongoing audit reporting and administrative activities Amend FY2024 Task Orders to realign authorized budget with a net zero impact: o FY2024: Task 6 – Evaluation and Benchmarking reduced by $20,000 o FY2024: Task 5 – Preparation of Quarterly Reports, Annual Status Report, Provision of City Hotline, and Other Ongoing Office Administrative Functions increased by $20,000 RECOMMENDATION 2 Questions? Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, operate under an alternative practice structure and are members of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms. The name Baker Tilly and its associated logo is used under license from Baker Tilly International limited. The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. © 2024 Baker Tilly Advisory Group, LP