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HomeMy WebLinkAboutStaff Report 2308-18975.Approval of Office of City Auditor FY2024 Task Orders; CEQA Status - Not a project Q&A 2 8 8 7 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: City Auditor Meeting Date: August 21, 2023 Report #:2308-1897 TITLE Approval of Office of City Auditor FY2024 Task Orders; CEQA Status - Not a project RECOMMENDATION The City Auditor and the Policy & Services Committee recommend that the City Council approve the following Task Orders: 1) FY24-Task 01 – Citywide Risk Assessment 2) FY24-Task 02 – Annual Audit Plan 3) FY24-Task 03 – External Financial Auditor 4) FY24-Task 05 – Various Reporting & City Hotline 5) FY24-Task 06 – Evaluation and Benchmarking BACKGROUND The City Auditor presented the attached FY2024 Task Orders consisting of five task orders listed above during the Policy & Services Committee meeting on August 8, 2023, where the task orders were approved as follows: MOTION: Council Member Veenker moved, seconded by Council Member Lauing to recommend City Council approve FY24-Task 01 – Citywide Risk Assessment, FY24-Task 02 – Annual Audit Plan, FY24-Task 03 – External Financial Auditor, FY24-Task 05 – Various Reporting & City Hotline, FY24-Task 06 – Evaluation and Benchmarking. MOTION PASSED: 3-0 2 8 8 7 ANALYSIS In accordance with our agreement with the City1 including Amendment No. 1 to the contract2, Baker Tilly is required to conduct recurring activities each year. Those recurring activities including the following tasks outlined in our agreement: •Task 1: Citywide Risk Assessment •Task 2: Preparation of Annual Audit Plan •Task 3: Assist with Selection of a Financial Auditor and Assist in Managing the Financial Audit •Task 5: Various Tasks including periodic reporting, fraud/waste/abuse hotline, office administrative functions •Task 6: Evaluation and Benchmarking The Office of the City Auditor (OCA) received approval from the Policy & Services Committee of the Tasks Orders that correspond to the Tasks outlined above and recommends these task orders to the City Council for approval. The Task Orders provide the contractual authority to begin this work in Fiscal Year 2024. An excerpt from the contract outlining these tasks is below for ease of reference. 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.” 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.” Task 3 “Selection of External Financial Auditor and Annual Audit Coordination: Coordinate the annual external financial audit in each year of the contract term. Pursuant to the City Charter, the City Auditor shall oversee the selection process for the annual external financial auditor.” 1 September 28, 2020: Baker Tilly Contract Approval - https://www.cityofpaloalto.org/files/assets/public/agendas- minutes-reports/reports/city-manager-reports-cmrs/year-archive/2020-2/id-11624.pdf?t=64761.15 2 May 9, 2022: Baker Tilly Contract Amendment No. 1 Approval - https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council- agendas-minutes/2022/20220509/20220509pccsmamended-linked.pdf 2 8 8 7 Task 5 “Preparation of Quarterly Reports, Annual Status Report, Provision of City Hotline, and Other Ongoing Office Administrative Functions: Prepare and issue quarterly reports describing the status and progress toward audit completion, to be provided as information reports to the City Council and reviewed by the appropriate committee, unless other reporting methods are directed by Council. Prepare and issue an annual report in the first quarter of each fiscal year on the status of recommendations made in completed audits, to be provided as an information report to the City Council and reviewed by the appropriate committee, unless other reporting methods are directed by Council. Maintain and respond to the City’s employee “hotline” function provided through voicemail, email or written submissions. Coordinate referrals as appropriate to other City offices, departments or divisions and incorporate relevant referrals into future risk assessments, audit plans or audit activity as appropriate.” This task provides for authorization of travel during the full 2024 fiscal year assuming a trip every other month (total of 6 trips). Although the contract stipulated an on site presence every two weeks by the Office of the City Auditor, leveraging remote work efficiencies and ensuring economical use of contract authority and funds, this task order revises that frequency. Baker Tilly will use discretion to ensure travel is used to minimize travel expenses and maximize effectiveness of time on site, ultimately ensuring alignment with audit work schedules and Council and Committee activities. Additionally, the current contract, Amendment NO.13, includes the budget schedule for FY 2023, FY 2024, and FY 2025 that shows a budget amount of $60,000 each year for Task 5. The main activities related to this task have been meetings with management and City Council members and preparing staff reports for City Council and Committee meetings. However, Baker Tilly needs to perform other activities normally performed by the Internal Audit function, namely, engagement project management and annual audit plan monitoring. Therefore, the Maximum Compensation Amount in the proposed task order for Task 5 is $90,000 that includes a $30,000 transfer from the Task 4 (Execute Annual Audit Plan) budget amount of $582,250 shown in the current contract. Task 6 “Undergo a peer evaluation following the guidelines of the Association of Local Government Auditors every two years (i.e., at the end of the initial contract term, then every other year thereafter throughout the contract term), or as required by the City Council, so that 3 May 9, 2022: Baker Tilly Contract Amendment No. 1 Approval - https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council- agendas-minutes/2022/20220509/20220509pccsmamended-linked.pdf 2 8 8 7 performance of the internal audit function can be objectively assessed. Prepare a cost per audit analysis following the first completed fiscal year, to be submitted at the beginning of the second fiscal year and every year thereafter throughout the contract term, that includes benchmark agencies determined by the CITY, and obtain independent third-party certification of data accuracy. The cost per audit analysis will be used to evaluate the cost effectiveness of services provided by the CONSULTANT. This evaluation will be incorporated into ongoing performance assessments as required and will help ensure that fees for service provision throughout the duration of the Agreement are objectively determined and mutually agreed upon. This evaluation and report from the peer evaluator will be presented to the Policy and Services Committee and City Council in alignment with typical audit reporting activities.” The current contract, Amendment NO.1, includes the budget schedule that shows Task 6 budget amounts of $21,000, $6,000, and $21,000 for FY 2023, FY 2024, and FY 2025, respectively. In preparation for and support of a peer evaluation in FY 2024, the Maximum Compensation Amount in the proposed task order for Task 6 is $24,000 that includes a $18,000 transfer from the Task 4 (Execute Annual Audit Plan) budget amount of $582,250 shown in the current contract. As a result of transfers to Task 5 and Task 6, the remaining Task 4 (Execute Annual Audit Plan) budget amount is to be adjusted to $534,250 for which an audit plan will be presented to the Policy and Services Committee and City Council in coming months. The table below summarizing two budget amount transfers from Task 4 to Task 5 and Task 6 shows the net effect on the total contract value is $0. 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 approved in the FY 2024 Adopted Operating Budget for the Office of the City Auditor. FY 2023-24 Budget per Amendment 1 Transfer Updated Budget Amount Task 4 $582,250 -$48,000 $534,250 Task 5 $60,000 $30,000 $90,000 Task 6 $6,000 $18,000 $24,000 TOTAL $648,250 $0 $648,250 2 8 8 7 STAKEHOLDER ENGAGEMENT No stakeholder outreach was necessary to create task orders for the tasks described in the signed contract. ENVIRONMENTAL REVIEW Council action on this item is not a project as defined by CEQA because the Auditor task orders are administrative activities that will not result in direct or indirect physical changes in the environment. CEQA Guidelines section 15378(b)(5). ATTACHMENTS Attachment A: TASK ORDER FY24-01 Citywide Risk Assessment Attachment B: TASK ORDER FY24-02 Annual Audit Plan Attachment C: TASK ORDER FY24-03 External Financial Auditor Attachment D: TASK ORDER FY24-05 Various Reporting & City Hotline Attachment E: TASK ORDER FY24-06 Evaluation and Benchmarking APPROVED BY: Adriane D. McCoy, 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 ___________________________________ 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: 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. 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. 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 ___________________________________ 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 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. 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 ___________________________________ 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. 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 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 ___________________________________ 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. 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 FY24-06 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 ___________________________________ 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 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.         Dear Mayor and Council Members:  On behalf of City Manager Ed Shikada, please find below the staff responses to questions from  Councilmembers Tanaka and Veenker regarding the Monday, August 21 Council Meeting consent  agenda item.     Item 3:  Approval of an Extraterritorial Utility Service and Offsite Infrastructure Agreement between  City of Palo Alto and City of Mountain View in relation to Palo Alto Homekey project at 1237 San  Antonio Road for connection to City of Mountain View Water and Sewer Utility Services.  1. What are the exact costs associated with the connection, permits, and fees are not specified.  Although it says LifeMoves will cover utility and permitting fees, what would the city of Palo  Alto cover? (Tanaka)   Staff response: The City is not responsible for any costs associated with this during the term of the  ground lease with LifeMoves. Upon termination of the ground lease, whomever takes over the future use  of the site would likely assume the related utility costs.  2. Are there any long‐term maintenance costs associated with this connection? (Tanaka)  Staff response: As this site will be a customer within the Mountain View system, it is Mountain View  Utilities’ responsibility for long‐term maintenance and we assume this is incorporated into utility rates.   3. I'm glad to see our City and Mountain View cooperating to support Project Homekey. The  agreement at attachment A recites that we are unable to provide water and sewer services to  the site. Why? Is it a physical limitation or a financial limitation? I see that we are paying  Mountain View for the cost of the infrastructure and connections. (Veenker)  Staff response: The Palo Alto Homekey site is located at a site at the border of Mountain View and Palo  Alto and it was originally an old treatment plant site for the City of Los Altos.  When the City acquired the  old Los Altos Treatment Plant site the City did not run utilities to this site.  The Palo Alto/Mountain View  city boundary is at the property line of the LATP site instead of in the middle of the road. As the project  team evaluated all the design details for this project, it was determined that connecting to the Mountain  View water and sewer utilities was easier and less costly in the project design than connecting to Palo  Alto for these specific utilities. The LifeMoves development team is paying the sewer and water  connection fees to Mountain View as any other developer would do to tie into their system.    4. What, if any, risks are there with not owning the utilities infrastructure necessary for Palo Alto  residents to live at the Homekey site? (Veenker)  Staff response: There are no known risks for using Mountain View utilities for this site. LAFCO approved  this inter‐jurisdictional utility service and Mountain View will treat the site as it would any customer for  these services.         Item 5: Approval of Office of City Auditor FY2024 Task Orders; CEQA Status ‐ Not a project  1. Have similar variations been made in previous years, and if so, what were the outcomes?  (Tanaka)  Staff response: Yes, an annual audit budget reallocation was also requested and approved in FY2023.  The outcome of the reallocation of the annual audit budget did not result in any increases in budget  dollars but provided for specific task order activities required during FY2023.  2. How do these changes align with industry standards or practices in other similar cities?  (Tanaka)  Staff response: This task order request pertains to reallocating the approved annual audit budget related  to an administrative project that has been designated for activity occurring during the entire FY2024. It is  within industry standards and a typical process for a multiyear audit plan to allow for this budget  reallocation as described in Baker Tilly’s contract.