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Home My WebLink AboutStaff Report 2505-4691CITY OF PALO ALTO CITY COUNCIL Tuesday, June 17, 2025 Council Chambers & Hybrid 5:30 PM Agenda Item 2.Approval of the Office of the City Auditor Annual Risk Assessment and FY 2026 Audit Plan and Corresponding Task Orders 7 3 5 7 City Council Staff Report From: City Auditor Report Type: CONSENT CALENDAR Lead Department: City Auditor Meeting Date: June 17, 2025 Report #:2505-4691 TITLE Approval of the Office of the City Auditor Annual Risk Assessment and FY 2026 Audit Plan and Corresponding Task Orders RECOMMENDATION The City Auditor and the Policy and Services Committee recommend the City Council approve the following reports: 1. Fiscal Year 2025 Risk Assessment Report 2. Fiscal Year 2026 Audit Plan Report 3. Fiscal Year 2026 Audit Plan Task Orders EXECUTIVE SUMMARY Baker Tilly, serving as the City Auditor, surveyed City Council, Executive Leadership Team and staff members about citywide and departmental risks. The Auditor received responses from 11 departments across the organization. Baker Tilly analyzed the results of these responses and other data and information gathered from industry associations and publications. Identified risks were scored and then ranked based on likelihood and impact. The FY2026 Audit Plan was prepared based on the results of the FY2025 risk assessment and other relevant factors such as other planned assessments and studies. BACKGROUND The Palo Alto Municipal Code (Section 2.08.1301) requires the City Auditor prepare and submit an annual audit plan to the City Council for review and approval. In its capacity serving as the City Auditor function, and in accordance with Baker Tilly’s agreement with the City, Baker Tilly 1 https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-60361 7 3 5 7 performed a citywide risk assessment (Task 1 of the agreement2). The purpose of the assessment was to identify and prioritize risks to develop the annual audit plan (Task 2). During the risk assessment, Baker Tilly assessed a wide range of risk areas, including strategic, financial, technological, human capital, operational, reputational, economic, and including compliance risk categories. ANALYSIS 2 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2020-2/id-11624.pdf?t=64761.15 7 3 5 7 Council. Furthermore, one responsibility of the Office of the City Auditor (OCA) is to follow up on management’s corrective actions. The follow-up activities require periodic inquiries with management on outstanding corrective actions and verifying implementation of the corrective actions as well as testing of the effectiveness of the implemented controls. FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: 1 May 15, 2025 City of Palo Alto Office of the City Auditor FY2025 Annual Risk Assessment Contents 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. INTRODUCTION...............................................................................................................1 RISK ASSESSMENT APPROACH...................................................................................2 RISK ASSESSMENT RESULTS......................................................................................3 APPENDICES...................................................................................................................9 1 Introduction Overview According to City Ordinance of the City of Palo Alto (the City), the mission of the Office of the City Auditor (OCA) is to promote honest, efficient, effective, economical, and fully accountable and transparent city government. To fulfill this mission, the OCA conducts performance audits and performs financial/operational analyses of city departments, programs, services, or activities as approved by the City Council. (Section 2.08.130). In its capacity serving as the City Auditor function, and in accordance with Baker Tilly’s agreement with the City (Task #1 of the agreement), Baker Tilly Advisory Group, LP (Baker Tilly) conducted the fiscal year (FY) 2025 citywide risk assessment in order to develop the FY2026 annual audit plan (Task #2). The California Government Code Section 1236 requires all cities that conduct audit activities to conduct their work under the general and specified standards prescribed by the Institute of Internal Auditors (IIA) or the Government Auditing Standards (GAO) issued by the Comptroller General of the United States, as appropriate. According to the IIA Standard 2010, the head of internal audit function “must establish a risk-based plan to determine the priorities of the internal audit activity, consistent with the organization’s goals” and consider the input of senior management and a governing board. The purpose of the risk assessment is to develop an internal audit plan that assigns internal audit resources to the activities that add the most value to the City. The risk assessment process involves identifying, measuring, and prioritizing risks associated with the audit universe (list of specific departments, functions, processes, programs, etc. that can be subject to an audit). Risk is defined as “the possibility of an event or condition occurring that will have an impact on the ability of an organization to achieve its objectives.”1 Due to management changes in the OCA at the end of FY2024, the FY2024 Risk Assessment was delayed and presented to City Council for approval in December 2024. As the FY2025 risk assessment is being conducted just 6 months later, the OCA conducted an assessment process to preserve City resources. The OCA surveyed City Council, Executive Leadership Team and other key management staff across the organization. OCA received responses from 11 departments. This report summarizes our risk assessment methodology, analysis, and results. The FY2026 annual audit plan is based on the results of this risk assessment. Through the risk assessment, we observed certain strengths of the City. Key strengths include: Commitment to public service by a dedicated and highly professional management team High value placed on efficient and effective government Focus on strategic planning and implementation Demonstrated investment in innovation and commitment to sustainability Dedication to continuous improvement Risk Assessment Process Considerations The starting point of internal auditing is to conduct a risk assessment that is the basis for determining internal audit activities. However, it is not a one-size-fits-all process. The scope and complexity of the risk assessment are affected by various factors such as the maturity level of the internal audit function’s products and services, the organization’s enterprise risk management efforts, coordination with other monitoring and risk management functions, and the stakeholders’ expectations. As every organization is subject to a changing environment, the results of the annual risk assessment represent the information considered at the time of the assessment. In addition to the annual macro-level risk assessment, the internal audit function is required to perform an engagement-level risk assessment when starting each audit listed in the approved audit plan. The IIA Standard 2200 states, “Internal auditors must develop and document a plan for each engagement, including the engagement’s objectives, scope, timing, and resource allocations. The plan must consider the organization’s strategies, objectives, and risks relevant to the engagement.” 1 Rick A. Wright Jr., CIA, “The Internal Auditor’s Guide to Risk Assessment” The Institute of Internal Auditors Research Foundation (IIARF), 2018 2 Risk Assessment Approach Baker Tilly’s risk assessment approach this year focused on gathering information from the following inputs: •Surveying City Council, Executive Leadership Team members and other key management staff •Analyzing key documents such as City Council Priorities, budget documents, the annual comprehensive financial report, and other relevant documents •Updating the risk assessment matrix with the gathered information •Scoring the auditable units (listed in Appendix A) in the risk assessment matrix based on the likelihood and impact of potential adverse events •Identifying potential internal audit topics for the auditable units with high-risk scores •Summarizing the approach and results for presentation At the start of our contract with the City, Baker Tilly conducted an initial comprehensive risk assessment in FY2021 by interviewing all Council Members and Executive Leadership Team (ELT) members to create a risk assessment matrix. Each year, this matrix is updated to redevelop a comprehensive picture of the risk landscape which is continuously changing. For FY2025, Baker Tilly conducted a survey of City Council, ELT and other management staff, as well as meeting with available City Council members to identify strategic and operational challenges and risks. While the risk assessment primarily measures inherent risk (the risk without mitigating controls/factors) for each risk factor, it also considers specific risks based on the above information and the City’s processes, controls, and other factors surfaced through internal audit activities. Using the information gathered, OCA identified risks and determined the likelihood and impact of those risks. 3 Risk Assessment Results Department Descriptions and Key Risk Areas When identifying risk areas throughout the City, Baker Tilly considered each department and associated risks. Based on the concerns described by interviewees, departments’ functions, and their inherent risks, Baker Tilly identified the auditable risk areas for each department. Below is an overview of the City’s departments and their key risk areas. Administrative Services The Administrative Services Department provides financial and analytical support to the City. Departmental functions include finance and accounting, purchasing, administration, budget, real estate, and others. Key Risk Areas Purchasing Card Program Procurement Process Property Management Contract & Consultant Oversight City Attorney’s Office The City Attorney’s Office provides legal services to the City, including providing legal advice and training to City leaders, negotiating on behalf of the City, drafting contracts and other legal documents, investigating claims, and defending the City in litigation Key Risk Areas Identification of Legal Risks Contracts & Legal Documents Public Records Act City Clerk’s Office The City Clerk serves as a liaison between the public and City Council. Office functions include Public Records Act requests, public hearings, local elections, board and commission recruitments, record management, and others. Key Risk Areas Election Administration Record Retention & Management Council Meeting Management City Manager’s Office The City Manager’s Office provides leadership to the City departments and is responsible for facilitating City Council legislative actions, managing special interdepartmental projects, and more. The Communications Office is housed under the City Manager’s Office and is the primary correspondent between the City and the public. Key Risk Areas Citywide Risk Management Government Efficiency Economic Development Strategic Planning Consultant Management Office of Transportation The Office of Transportation works to enhance quality of life and improve the safety of the users of all modes of transportation. The Office is responsible for sustainable transportation systems, managing parking, and oversees the City’s traffic and transportation capital improvement projects. Key Risk Areas Traffic Safety Improvements Federal Railroad Administration (FRA) Quiet Zone Transit-Related Growth Community Services Department The Community Services Departments offers a variety of services administered through the following three divisions and the Office of Human Services: Arts and Sciences; Open Spaces, Parks, and Golf; and Recreation. Key Risk Areas Human Services Resource Allocation Process (HSRAP) Junior Museum and Zoo (JMZ) Operation Equipment & Materials Management 4 Fire The Fire Department oversees emergency response such as ambulance transports and fire response/rescue, emergency protection services such as fire prevention, and hazardous materials planning. The department highlights safeguarding the community and compassionate care. Key Risk Areas Emergency Preparedness (Foothills Fire Master Plan) Staffing Fleet Electrification Human Resources The Human Resources (HR) Department is responsible for recruiting, developing, and retaining a well-qualified and professional workforce. The Department ensures compliance with relevant labor laws, adheres to record keeping practices, and serves as a strategic partner for executive decision making. Key Risk Areas Recruitment Succession Planning HR Strategy & Risk Management Workplace Safety Information Technology The Information Technology Department's provides innovative technology solutions that support City departments. The department oversees IT project management, operations, enterprise systems, and security services. Key Risk Areas - PCI/DSS Compliance - AMI Implementation - ERP Upgrade - Adoption & Integration of New Tech Library The Library Department operates five libraries throughout the City, each offering unique resources. The Library provides educational programming, multi-cultural events, and large and diverse book, information and technology resources. Key Risk Areas Operations Events and Programming Volunteer Engagement Office of Emergency Services The Office of Emergency Services is designed to prevent, prepare for, and recover from various hazards. The Office is responsible for overseeing various risk management programs. Key Risk Areas Emergency Preparedness (Foothills Fire Mitigation Program; Evacuation Plans, COOPs, Interlocal Agreements) Training Compliance Planning and Development Services The Planning Department supports the City in land use development, planning, transportation, housing and environmental policies, and plans and programs that “maintain and enhance the City as a safe, vital, and attractive community”. Key Risk Areas Building Permit & Inspection Processes Building Permit & Inspection Fees Zoning Ordinance Code Enforcement Long Range Planning Below Market Rate Housing Police The Police Department oversees technical services such as dispatch and record management, field services such as patrol and emergency response, and animal control. The Police Department also places a high value on community relations. Key Risk Areas Crime Reduction Psychiatric Emergency Response Team (PERT) Program Safety and Wellness Training Staffing 5 Overall Risk Scoring Distribution Baker Tilly structured the audit universe based on the department/division/program from the budget document and management’s feedback, which resulted in 96 auditable units (Appendix A). We scored them based on the information gathered for each risk factor related to the likelihood, impact, or fraud. Appendix B lists the risk factors, definitions, and scoring method. The maximum score for an auditable unit is 30. The following chart shows the distribution of overall risk scoring. Baker Tilly rated the auditable units as follows: •High Risk – Scores 14 and above •Moderate Risk – Scores more than 9 and less than 14 •Low Risk – Scores below 9 Listed in the following pages are the auditable units with a score over 12 (out of 30) based on our scoring. The list includes 26 functions rated as high risk (with a score between 14 and 30) and 49 functions rated as Public Works The Public Works Department is broken into four divisions: Engineering, Airport, Public Services, and Environmental Services. The Divisions are responsible for a variety of tasks including design and implementation of capital projects, maintenance of City-owned and leased structures, and management of the solid waste programs. Key Risk Areas Wastewater Treatment Capital Program The Americans with Disabilities Act (ADA) Compliance Flood Protection Capital Project Fleet Operations Airport Operations Utilities The Utilities Department owns and operates electric, gas, water, wastewater and fiber optic services to the City. The City purchases all their power from external sources. The mission of the Department is to “provide safe, reliable, environmentally sustainable and cost effective services.” Key Risk Areas Power Purchase Agreements Utility Billing Fiber Optics Billing & Rates Rate Setting and Adjustment Utility Asset Management Reserves 21 49 26 2 - 8 (LOW)9 - 13 (MODERATE)14 - 30 (HIGH) 6 moderate risk (with a score between 9 and 14). In determining the audit activities to be performed in FY2026, we further evaluated specific risks and functional areas and considered risk-based priorities as well as other factors such as requirements by law or regulation, timing of activities, special projects, and requests from City Council and management. The proposed audit plan will be included in a separate FY2026 Annual Audit Plan Report. 7 8 9 Appendix A: Resumes Appendices 10 Appendix A: Audit Universe City Attorney’s Office Administration Consultation and Advisory Litigation and Dispute Resolution Official and Administration Duties City Clerk’s Office Administration Administrative Citations Council Support Services Election/Conflict of Interest Legislative Records Management City Manager’s Office Administration and City Management Economic Development Public Communication Administrative Services Department Accounting Administration Office of Management and Budget Printing and Mailing Purchasing Real Estate Treasury/Revenue Collection/Warehouse Community Services Department Administration and Human Services Animal Shelter Aquatics Arts and Sciences Open Space, Parks and Golf Recreation and Cubberley Fire Department Administration Emergency Response Environmental Safety Management Records and Information Management Training and Personnel Human Resources Department Administration, Employee Org Development and HR Systems Benefits and Compensation Employee and Labor Relations Recruitment Risk Management, Safety, Workers’ Compensation Information Technology Department Enterprise Systems Office of the CIO Operations Project Services Library Department Administration Collection and Technical Services Public Services Office of Emergency Services Emergency Services Office of Transportation Administration Parking Districts Programs Special Revenue Funds Planning and Development Services Department Administration 11 Building Development Services Planning and Transportation Special Districts Police Department Administration Animal Control Field Services Investigations and Crime Prevention Services Law Enforcement Services Parking Services Police Personnel Selection Technical Services Traffic Services Department of Public Works Administration Airport Engineering Services Refuse Storm Drainage Streets Structures and Grounds Sustainability Trees Vehicle Replacement and Maintenance Wastewater Treatment Utilities Department Electric Administration Electric Customer Service Electric Demand Side Management Electric Engineering (Operating) Electric Operations and Maintenance Electric Resource Management Fiber Optics Administration Fiber Optics Customer Service Fiber Optic Operations and Maintenance Gas Administration Gas Customer Service Gas Demand Side Management Gas Engineering (Operating) Gas Operations and Maintenance Gas Resource Management Wastewater Collection Administration Wastewater Collection Customer Service Wastewater Collection Engineering (Operating) Wastewater Collection Operations and Maintenance Water Administration Water Customer Service Water Engineering (Operating) Water Operations and Maintenance Water Resource Management 12 Appendix B: Risk Factor Definition 1 May 15, 2025 City of Palo Alto Office of the City Auditor FY2026 Annual Audit Plan Contents 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. INTRODUCTION...............................................................................................................1 RISK ASSESSMENT RESULTS......................................................................................3 PROPOSED AUDIT PROJECTS FOR FY2024................................................................4 APPENDICES...................................................................................................................6 1 Introduction Introduction The purpose of the audit activities performed by Baker Tilly Advisory Group, LP (Baker Tilly) as the outsourced Office of the City Auditor (OCA) for the City of Palo Alto (the City) is “to ensure that city management is using its financial, physical, and informational resources effectively, efficiently, economically, ethically, and equitably, and in compliance with laws, regulations, contract and grant requirements, and city policies and procedures”, according to the Palo Alto Municipal Code (Section 2.08.130). It requires the City Auditor to prepare an annual audit plan for the City Council’s approval. Conformance with Local Ordinances and Standards Section 2.08.130 of the Palo Alto Municipal Code defines that the mission of the OCA is to promote honest, efficient, effective, economical, and fully accountable and transparent city government. Audits are conducted and non-audit services provided in accordance with Government Auditing Standards, as established by the Comptroller General of the United States, Governmental Accountability Office. The following duties of the City Auditor exist regarding the plan and scope of internal audits. Palo Alto City Charter Article IV Sec. 12 requires the City Auditor to perform the following: –Conduct audits in accordance with a schedule approved by the City Council and may conduct unscheduled audits from time to time. –Conducts internal audits of all the fiscal transactions of the City. Title 2 Administrative Code Section 2.08.130 requires the City Auditor to perform the following: –Prepare an annual audit plan for City Council approval. –Identify the preliminary objectives of each audit to be performed, reflecting the purpose of the engagement and a preliminary description of the areas that may be addressed. –Conduct performance audits and perform non-audit services of any City department, program, service, or activity as approved by the City Council. California Government Code Section 1236 requires all cities that conduct audit activities to conduct their work under the general and specified standards prescribed by the Institute of Internal Auditors (IIA) or the Government Auditing Standards (GAO) issued by the Comptroller General of the United States, as appropriate. Audit Activity Type The OCA will conduct performance audits and perform financial/operational analyses of any City department, program, service, or activity as approved by the City Council in accordance with the Baker Tilly agreement. Performance Audits According to the Government Auditing Standards (GAO-18-568G, Section 1.21 and 1.22, page 10-12), performance audits provide objective analysis, findings, and conclusions to assist management and those charged with governance and oversight with, among other things, improving program performance and operations, reducing costs, facilitating decision making by parties responsible for overseeing or initiating corrective action, and contributing to public accountability. Performance audits may include the following four (4) audit objectives: –Program effectiveness and results 2 INTRODUCTION –Internal control design and effectiveness –Compliance with laws, regulations, and policies –Prospective analysis Audit Planning Considerations While maintaining its independence and objectivity in accordance with standards, the City Auditor considers a variety of matters when developing the Annual Audit Plan, including but not limited to: –Risk Assessment – the OCA performed a risk assessment and summarized the results in a separate report (Task #1). Generally speaking, audit activities target high(er) risk areas. The results are shown on the following page. –Ability to Add Value – audit seeks to add value through independent and objective analysis. –City Council – the City Auditor reports to the City Council and seeks input on audit priorities. –Coverage and Prior Audits – the City Auditor considers prior audits conducted by the OCA, the financial audit, and other audit and consulting reports recently issued. –“Ripeness” and On-Going Initiatives – certain risk areas may be addressed through operational activities, which could mean they are not ripe for audit to add value. –Scheduling – the City Auditor takes into consideration the timing of an audit and other on-going initiatives that directly relate. Putting an undue burden on City staff may exacerbate the risk at hand or other interrelated risks. 3 Risk Assessment Results The OCA performed a citywide risk assessment to plan for FY2026 audit activities and documented the methodology and the detailed results in a separate Risk Assessment Report. In summary, we identified the following areas rated as High or Moderate risks. In determining the audit activities to be performed in FY2026, we further reviewed these risks and functional areas and considered the matters listed in the previous page. Summary The proposed audits, special advisory projects and follow-up project for FY2026 are listed on the next page. The projects were selected from the auditable units that were rated as High or Moderate in the results of our risk assessment and selected based on some factors such as risk rating, the pervasiveness of the processes or 4 PROPOSED PROJECTS FOR FY2026 controls, the audit coverage, the timing of projects, and the value-adding activities that help the City enhance the ability to manage risks, strengthen accountability, and improve efficiency and effectiveness. 5 Proposed Audit Plan for FY2026 6 Appendix A: Resumes Appendices 7 PROFESSIONAL SERVICES TASK ORDER 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.: FY25-4.29 2. CONSULTANT NAME: Baker Tilly Advisory Group, LP 3. PERIOD OF PERFORMANCE: START: July 1, 2025 COMPLETION: May 31, 2026 4. TOTAL TASK ORDER PRICE: $97,575 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: Baker Tilly Advisory Group, LP BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ 8 Attachment A Introduction •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 •Step 1: Audit Planning •Step 2: Fieldwork and Testing •Step 3: Reporting Step 1 – Audit Planning •Gather information to understand the environment under review o Understand the environment under assessment o Assess the City code, regulations, and other standards and expectations o Assess prior audit results, as applicable o Assess additional documentation and conduct interviews as necessary •Assess the audit risk •Prepare an audit planning memo and audit program o Refine audit objectives and scope o Identify the audit procedures to be performed and the evidence to be obtained and examined •Announce the initiation of the audit and kick-off meeting with key stakeholders o Discuss audit objectives, scope, audit process, timing, resources, and expectations o Discuss documentation and interview requests for the audit Step 2 – Fieldwork and Testing •Interviewing the appropriate individuals to gain an understanding of the organizational structure, processes, and controls related to the Program 9 •Analyze policies and procedures as well as the legislative and regulatory requirements to identify the criteria to be used for evaluation of control design and effectiveness •Select samples of applications and projects to determine if in compliance with rules and regulations •Compare processes and controls against best practices Step 3 – Reporting In Step 3, the project team will perform tasks necessary to finalize audit working papers, prepare and review a draft report with stakeholders, and submit a final report for management response. Tasks include: •Developing findings, conclusions, and recommendations based on the supporting evidence gathered •Validating findings with appropriate individuals and discuss the root cause of the identified findings •Complete supervisory review of working papers and a draft audit report •Distribute a draft audit report and conduct a closing meeting with key stakeholders o Discuss the audit results, findings, conclusions, and recommendations o Discuss management responses •Obtain written management responses and finalize a report •Review report with members of City Council and/or the appropriate Council Committee Deliverables: The following deliverables will be prepared as part of this engagement: •Audit Report •Policy & Services Committee Audit Report Presentation Schedule of Performance Anticipated Start Date: July 1, 2025 Anticipated End Date: May 31, 2026 Maximum Compensation Amount and Rate Schedule The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $97,575. The not-to-exceed budget is based on an estimate of 475 total project hours, of which a minimum of 70 are estimated to be completed by the City Auditor. Reimbursable Expenses We plan to complete all work remote including all interviews and documentation review. However, during the planning and fieldwork phases of this audit, the City and Baker Tilly may mutually determine it will be beneficial to perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task. The not-to-exceed maximum for reimbursable expenses for this Task is $6,500. The following summarizes anticipated reimbursable expenses: •Round-trip Airfare – $2,000 (1 round trip flight x 2 auditors) •Ground transportation – $800 (car rental or Uber/taxi) •Hotel accommodation – $3,000 (2 rooms x 4 nights) •Food & Incidentals – $2,100 10 PROFESSIONAL SERVICES TASK ORDER TASK ORDER FY25-4.36 Fleet Resources & Sustainability / Climate Action 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 ORDER NO.: FY25-4.30 2. CONSULTANT NAME: Baker Tilly Advisory Group, LP 3. PERIOD OF PERFORMANCE: START: July 1, 2025 COMPLETION: May 31, 2026 4. TOTAL TASK ORDER PRICE: $90,255 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: Baker Tilly Advisory Group, LP BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ 11 Attachment A Introduction •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 •Step 1: Audit Planning •Step 2: Fieldwork and Testing •Step 3: Reporting Step 1 – Audit Planning •Gather information to understand the environment under review o Understand the environment under assessment o Assess the City code, regulations, and other standards and expectations o Assess prior audit results, as applicable o Assess additional documentation and conduct interviews as necessary •Assess the audit risk •Prepare an audit planning memo and audit program o Refine audit objectives and scope o Identify the audit procedures to be performed and the evidence to be obtained and examined •Announce the initiation of the audit and kick-off meeting with key stakeholders o Discuss audit objectives, scope, audit process, timing, resources, and expectations o Discuss documentation and interview requests for the audit Step 2 – Fieldwork and Testing •Interviewing the appropriate individuals to gain an understanding of the organizational structure, processes, and controls related to the Fleet & S/CAP Programs •Analyze policies and procedures as well as the legislative and regulatory requirements to identify the criteria to be used for evaluation of control design and effectiveness •Gather data on fleet vehicles, including maintenance, disposal, driver training and safety programs •Analyze fleet utilization to identify underused or overused vehicles 12 •Analyze maintenance and repair records •Assess progress in achieving S/CAP goals •Other steps as identified during planning •Compare processes and controls against best practices Step 3 – Reporting In Step 3, the project team will perform tasks necessary to finalize audit working papers, prepare and review a draft report with stakeholders, and submit a final report for management response. Tasks include: •Developing findings, conclusions, and recommendations based on the supporting evidence gathered •Validating findings with appropriate individuals and discuss the root cause of the identified findings •Complete supervisory review of working papers and a draft audit report •Distribute a draft audit report and conduct a closing meeting with key stakeholders o Discuss the audit results, findings, conclusions, and recommendations o Discuss management responses •Obtain written management responses and finalize a report •Review report with members of City Council and/or the appropriate Council Committee Deliverables: The following deliverables will be prepared as part of this engagement: •Audit Report •Policy & Services Committee Audit Report Presentation Schedule of Performance Anticipated Start Date: July 1, 2025 Anticipated End Date: May 31, 2026 Maximum Compensation Amount and Rate Schedule The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $90,255. The not-to-exceed budget is based on an estimate of 440 total project hours, of which a minimum of 60 are estimated to be completed by the City Auditor. Reimbursable Expenses We plan to complete some fieldwork steps for this audit on-site if the City and Baker Tilly mutually determine it will be beneficial to perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task. The not-to-exceed maximum for reimbursable expenses for this Task is $6,500. The following summarizes anticipated reimbursable expenses: •Round-trip Airfare – $2,000 (1 round trip flight x 2 auditors) •Ground transportation – $800 (car rental or Uber/taxi) •Hotel accommodation – $3,000 (2 rooms x 4 nights) •Food & Incidentals – $2,100 13 PROFESSIONAL SERVICES TASK ORDER 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.: FY25-4.30 2. CONSULTANT NAME: Baker Tilly Advisory Group, LP 3. PERIOD OF PERFORMANCE: START: July 1, 2025 COMPLETION: April 30, 2026 4. TOTAL TASK ORDER PRICE: $97,575 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: Baker Tilly Advisory Group, LP BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ 14 Attachment A Introduction •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 •Step 1: Audit Planning •Step 2: Fieldwork and Testing •Step 3: Reporting Step 1 – Audit Planning •Gather information to understand the environment under review o Understand the environment under assessment o Assess the City code, regulations, and other standards and expectations o Assess prior audit results, as applicable o Assess additional documentation and conduct interviews as necessary •Assess the audit risk •Prepare an audit planning memo and audit program o Refine audit objectives and scope o Identify the audit procedures to be performed and the evidence to be obtained and examined •Announce the initiation of the audit and kick-off meeting with key stakeholders o Discuss audit objectives, scope, audit process, timing, resources, and expectations o Discuss documentation and interview requests for the audit Step 2 – Fieldwork and Testing •Interviewing the appropriate individuals to gain an understanding of the organizational structure, processes, and controls related to the Office of Transportation and Public Works Departments as they relate to the design and implementation of traffic safety improvements •Analyze policies and procedures as well as the legislative and regulatory requirements to identify the criteria to be used for evaluation of control design and effectiveness •Gather data on traffic safety programs and initiatives including calming measures, engineering design and implementation, data collection, performance measurement and public education 15 •Analyze project plans and justification and evaluate design criteria •Analyze cost estimates and budgeting •Assess stakeholder input and engagement •Assess installation/implementation of traffic safety features •Assess performance data •Compare processes and controls against best practices Step 3 – Reporting In Step 3, the project team will perform tasks necessary to finalize audit working papers, prepare and review a draft report with stakeholders, and submit a final report for management response. Tasks include: •Developing findings, conclusions, and recommendations based on the supporting evidence gathered •Validating findings with appropriate individuals and discuss the root cause of the identified findings •Complete supervisory review of working papers and a draft audit report •Distribute a draft audit report and conduct a closing meeting with key stakeholders o Discuss the audit results, findings, conclusions, and recommendations o Discuss management responses •Obtain written management responses and finalize a report •Review report with members of City Council and/or the appropriate Council Committee Deliverables: The following deliverables will be prepared as part of this engagement: •Audit Report •Policy & Services Committee Audit Report Presentation Schedule of Performance Anticipated Start Date: July 1, 2025 Anticipated End Date: April 30, 2026 Maximum Compensation Amount and Rate Schedule The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $97,575. The not-to-exceed budget is based on an estimate of 475 total project hours, of which a minimum of 70 are estimated to be completed by the City Auditor. Reimbursable Expenses We plan to complete some fieldwork steps for this audit on-site if the City and Baker Tilly mutually determine it will be beneficial to perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task. The not-to-exceed maximum for reimbursable expenses for this Task is $6,500. The following summarizes anticipated reimbursable expenses: •Round-trip Airfare – $2,000 (1 round trip flight x 2 auditors) •Ground transportation – $800 (car rental or Uber/taxi) •Hotel accommodation – $3,000 (2 rooms x 4 nights) •Food & Incidentals – $2,100 16 PROFESSIONAL SERVICES TASK ORDER TASK ORDER FY25-4.38 City of Palo Alto Utilities Reserves 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.: FY25-4.32 2. CONSULTANT NAME: Baker Tilly Advisory Group, LP 3. PERIOD OF PERFORMANCE: START: July 1, 2025 COMPLETION: December 31, 2025 4. TOTAL TASK ORDER PRICE: $70,815 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: Baker Tilly Advisory Group, LP BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ 17 Attachment A Introduction •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 •Step 1: Assessment Planning •Step 2: Fieldwork and Testing •Step 3: Reporting Step 1 – Assessment Planning •Gather information to understand the environment under review o Understand the environment under assessment o Assess the City code, regulations, and other standards and expectations o Assess prior audit results, as applicable o Assess additional documentation and conduct interviews as necessary •Prepare an assessment program o Refine assessment objectives and scope o Identify the procedures to be performed and the evidence to be obtained and examined •Announce the initiation of the assessment and kick-off meeting with key stakeholders o Discuss assessment objectives, scope, audit process, timing, resources, and expectations o Discuss documentation and interview requests for the audit Step 2 – Fieldwork and Testing •Interviewing the appropriate individuals to gain an understanding of current procedures including how the Utility projects peak demand, calculates reserve margins, models demand growth, etc. •Analyze policies and procedures related to reserves •Assess compliance with regulatory reserve margin requirements and other relevant standards •Compare processes and controls against best practices 18 Step 3 – Reporting In Step 3, the project team will perform tasks necessary to finalize assessment working papers, prepare and review a draft report with stakeholders, and submit a final report for management response. Tasks include: •Developing observations and recommendations based on the supporting evidence gathered •Validating observations with appropriate individuals •Complete supervisory review of working papers and a draft audit report •Distribute a draft assessment report and conduct a closing meeting with key stakeholders o Discuss the observations and recommendations o Discuss management responses •Obtain written management responses if appropriate and finalize a report •Review report with members of City Council and/or the appropriate Council Committee Deliverables: The following deliverables will be prepared as part of this engagement: •Assessment Report •Policy & Services Committee Assessment Report Presentation Schedule of Performance Anticipated Start Date: July 1, 2025 Anticipated End Date: December 31, 2025 Maximum Compensation Amount and Rate Schedule The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $70,815. The not-to-exceed budget is based on an estimate of 345 total project hours, of which a minimum of 40 are estimated to be completed by the City Auditor. Reimbursable Expenses We plan to complete all work remote including all interviews and documentation review. However, during the planning and fieldwork phases of this audit, the City and Baker Tilly may mutually determine it will be beneficial to perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task. The not-to-exceed maximum for reimbursable expenses for this Task is $6,500. The following summarizes anticipated reimbursable expenses: •Round-trip Airfare – $2,000 (1 round trip flight x 2 auditors) •Ground transportation – $800 (car rental or Uber/taxi) •Hotel accommodation – $3,000 (2 rooms x 4 nights) •Food & Incidentals – $2,100 19 PROFESSIONAL SERVICES TASK ORDER 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.: FY25-4.33 2. CONSULTANT NAME: Baker Tilly Advisory Group, LP 3. PERIOD OF PERFORMANCE: START: August 1, 2025 COMPLETION: March 31, 2026 4. TOTAL TASK ORDER PRICE: $57,165 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: Baker Tilly Advisory Group, LP BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ 20 Attachment A Introduction •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 •Step 1: Audit Planning •Step 2: Fieldwork and Testing •Step 3: Reporting Step 1 – Assessment Planning •Gather information to understand the environment under review o Understand the environment under assessment o Assess the City code, regulations, and other standards and expectations o Assess prior audit results, as applicable o Assess additional documentation and conduct interviews as necessary •Prepare an assessment program o Refine assessment objectives and scope o Identify the procedures to be performed and the evidence to be obtained and examined •Announce the initiation of the assessment and kick-off meeting with key stakeholders o Discuss assessment objectives, scope, audit process, timing, resources, and expectations o Discuss documentation and interview requests for the audit Step 2 – Fieldwork and Testing •Interviewing the appropriate individuals to gain an understanding of the organizational structures, processes, and controls related to soliciting consulting services and understand outcomes •Assess challenges the City has experienced with consulting services •Review best practices and provide recommendation frameworks related to determining when to engage consulting services vs. keeping services “in house” and project management practices to optimize consulting project deliverables and results. 21 Step 3 – Reporting In Step 3, the project team will perform tasks necessary to finalize assessment working papers, prepare and review a draft report with stakeholders, and submit a final report for management response. Tasks include: •Developing observations and recommendations based on the supporting evidence gathered •Validating observations with appropriate individuals •Complete supervisory review of working papers and a draft audit report •Distribute a draft assessment report and conduct a closing meeting with key stakeholders o Discuss the observations and recommendations o Discuss management responses •Obtain written management responses if appropriate and finalize a report •Review report with members of City Council and/or the appropriate Council Committee Deliverables: The following deliverables will be prepared as part of this engagement: •Assessment Report •Policy & Services Committee Assessment Report Presentation Schedule of Performance Anticipated Start Date: August 1, 2025 Anticipated End Date: March 31, 2026 Maximum Compensation Amount and Rate Schedule The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $29,440. The not-to-exceed budget is based on an estimate of 345 total project hours, of which a minimum of 20 are estimated to be completed by the City Auditor. Reimbursable Expenses We plan to complete all work remotely including all interviews and documentation review. However, during the planning and fieldwork phases of this audit, the City and Baker Tilly may mutually determine it will be beneficial to perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task. The not-to-exceed maximum for reimbursable expenses for this Task is $6,500. The following summarizes anticipated reimbursable expenses: •Round-trip Airfare – $2,000 (1 round trip flight x 2 auditors) •Ground transportation – $800 (car rental or Uber/taxi) •Hotel accommodation – $3,000 (2 rooms x 4 nights) •Food & Incidentals – $2,100 22 PROFESSIONAL SERVICES TASK ORDER 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.: FY25-4.33 2. CONSULTANT NAME: Baker Tilly Advisory Group, LP 3. PERIOD OF PERFORMANCE: START: August 1, 2025 COMPLETION: February 28, 2026 4. TOTAL TASK ORDER PRICE: $54,165 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: Baker Tilly Advisory Group, LP BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ 23 Attachment A Introduction •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 •Step 1: Audit Planning •Step 2: Fieldwork and Testing •Step 3: Reporting Step 1 – Assessment Planning •Gather information to understand the environment under review o Understand the environment under assessment o Assess the City code, regulations, and other standards and expectations o Assess prior audit results, as applicable o Assess additional documentation and conduct interviews as necessary •Prepare an assessment program o Refine assessment objectives and scope o Identify the procedures to be performed and the evidence to be obtained and examined •Announce the initiation of the assessment and kick-off meeting with key stakeholders o Discuss assessment objectives, scope, audit process, timing, resources, and expectations o Discuss documentation and interview requests for the audit Step 2 – Fieldwork and Testing •Interviewing the appropriate individuals to gain an understanding of current thresholds and authority levels •Conduct a benchmarking study to determine thresholds in similar sized cities •Assess best practices in establishing thresholds 24 Step 3 – Reporting In Step 3, the project team will perform tasks necessary to finalize assessment working papers, prepare and review a draft report with stakeholders, and submit a final report for management response. Tasks include: •Developing observations and recommendations based on the supporting evidence gathered •Validating observations with appropriate individuals •Complete supervisory review of working papers and a draft audit report •Distribute a draft assessment report and conduct a closing meeting with key stakeholders o Discuss the observations and recommendations o Discuss management responses •Obtain written management responses if appropriate and finalize a report •Review report with members of City Council and/or the appropriate Council Committee Deliverables: The following deliverables will be prepared as part of this engagement: •Assessment Report •Policy & Services Committee Assessment Report Presentation Schedule of Performance Anticipated Start Date: August 1, 2025 Anticipated End Date: March 31, 2026 Maximum Compensation Amount and Rate Schedule The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $54,165. The not-to-exceed budget is based on an estimate of 285 total project hours, of which a minimum of 30 are estimated to be completed by the City Auditor. Reimbursable Expenses We plan to complete all work remote including all interviews and documentation review. However, during the planning and fieldwork phases of this audit, the City and Baker Tilly may mutually determine it will be beneficial to perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task. The not-to-exceed maximum for reimbursable expenses for this Task is $6,500. The following summarizes anticipated reimbursable expenses: •Round-trip Airfare – $2,000 (1 round trip flight x 2 auditors) •Ground transportation – $800 (car rental or Uber/taxi) •Hotel accommodation – $3,000 (2 rooms x 4 nights) •Food & Incidentals – $2,100 25 PROFESSIONAL SERVICES TASK ORDER 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.: FY25-4.34 2. CONSULTANT NAME: Baker Tilly Advisory Group, LP 3. PERIOD OF PERFORMANCE: START: July 1, 2025 COMPLETION: June 30, 2026 4. TOTAL TASK ORDER PRICE: $59,390 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: Baker Tilly Advisory Group, LP BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ 26 Attachment A Introduction •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 •Track and monitor progress on all audit recommendations •Obtain sufficient evidence to support conclusions regarding the status of audit recommendations •Annually report on the status of recommendations Deliverables: •Annual Status of Audit Recommendations Report •Policy & Services Committee Report Presentation Schedule of Performance Maximum Compensation Amount and Rate Schedule