HomeMy WebLinkAboutStaff Report 2606-6475CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Monday, August 10, 2026
Council Chambers & Hybrid
5:30 PM
Agenda Item
2.Recommend City Council Approval to Extend Certain FY 2026 City Auditor Task Orders
with No Impact to Task Order Budgets
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: City Auditor
Meeting Date: August 10, 2026
Report #:2606-6475
TITLE
Recommend City Council Approval to Extend Certain FY 2026 City Auditor Task Orders with No
Impact to Task Order Budgets
RECOMMENDATION
The City Auditor recommends that the City Council approve timeline extensions for the
following FY 2026 task orders with a net zero impact to the Office of the City Auditor’s (OCA)
contracted budget:
Task Order 4.35 – Below Market Rate Housing
Task Order 4.36 – Fleet Resources & Sustainability & Climate Action Plan (SCAP)
Task Order 4.37 – Traffic Safety Improvements
Task Order 4.38 – CPAU Utility Program Reserves Advisory Project: this audit was
presented to P&S in April 2026 and will be presented to the Utility Advisory Commission
in September 2026 and later to the Finance Committee.
Task Order 4.41 – Follow-up Activities
FY26 Task 6 – Evaluation & Benchmarking
BACKGROUND
In accordance with our agreement with the City, Baker Tilly is required to conduct recurring
activities each year. Task 4 – Execute the Annual Audit Plan comprises the majority of OCA’s
budget and time. Specific audit task orders are approved annually by the City Council and
executed by the Policy & Services Committee (P&S) Chair as the Project Manager for the Baker
Tilly contract as stipulated in the contract terms.
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ANALYSIS
OCA is seeking to extend task order timelines for the first five task orders which are all
associated with Audit Plan projects that are underway and at various stages of either fieldwork
or reporting. All reports should be completed by the end of the calendar year. Work on both
the CPAU Utility Program Reserves Advisory Project and the Audit Follow-Up Activities Project
are complete and in final stages of reporting expected in August/September 2026.
The three remaining audits are in various stages of fieldwork and reporting. The Below Market
Rate Housing Audit is with management for their review and response and is scheduled for
presentation at the September P&S meeting. The Fleet Resources & SCAP and Traffic Safety
Improvement Audits both experienced delays due to audit staff turnover. New teams have
been assigned and both audits are in fieldwork. No additional funds are anticipated to complete
this work.
For Task 6 – Evaluation & Benchmarking, Baker Tilly is in the process of initiating a third-party
assessment of the City’s Audit function through the Institute of Internal Auditor.
Extension of these Tasks and Task Orders will not impact the approved scope or compensation
for these audits and audit activities included in the FY26 Baker Tilly contract’s operating budget
for the OCA.
Council action on this item is not a project as defined by CEQA because the audit activities do
not involve any commitment to any specific project which may result in a potentially significant
physical impact on the environment. CEQ Guidelines section 15378(b)(4).
Attachment A: Task Orders 4.35, 4.36, 4.37, 4.38, 4.41, and FY26 Task 6
: Kate Murdock, City Auditor
7
PROFESSIONAL SERVICES TASK ORDER
TASK ORDER FY26-4.35 Below Market Housing Rate Program
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. C21179340A
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340A
1B. TASK O RDER NO.: FY26-4.35
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:
Vicki Veenker, 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
described in this Task Order.
APPROVED:
CITY OF PALO ALTO
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
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___________________________________
Docusign Envelope ID: 3867CDA0-2394-4C73-A5C3-3AAA5E07A7CB
8/7/2025
Senior Manager
Kate Murdock
9/5/2025
Council Member
Council Member Vicki Veenker
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 an internal audit of the Below Market Rate Housing Program involves three
(3) primary steps:
• Step 1: Audit Planning
• Step 2: Fieldwork and Testing
• Step 3: Reporting
Step 1 – Audit Planning
This step consists of the tasks performed to adequately plan the work necessary to address the overall audit
objective and to solidify mutual understanding of the audit scope, objectives, audit process, and timing between
stakeholders and auditors. Tasks include:
• 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
The step involves executing the procedures in the audit program to gather information, interview
individuals, and analyze the data and information to obtain sufficient evidence to address the audit
objectives. The preliminary audit objective is to determine (1) if the Below Market Rate Housing Program
maximizes the creation and retention of affordable housing stock in comparison to similar programs, and
(2) determining whether services are provided to low- and moderate-income households in a timely manner
that meets the needs of the community. Finally, the audit will evaluate the administration of the Below
Market Rate Housing Program for adequate internal controls to safeguard the City from fraud, waste, and
abuse. Procedures include, but are not limited to:
• Interviewing the appropriate individuals to gain an understanding of the organizational structure,
processes, and controls related to the Program
Docusign Envelope ID: 3867CDA0-2394-4C73-A5C3-3AAA5E07A7CB
• 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
Docusign Envelope ID: 3867CDA0-2394-4C73-A5C3-3AAA5E07A7CB
10
PROFESSIONAL SERVICES TASK ORDER
TASK ORDER FY26-4.36 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.: FY26-4.36
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:
Vicki Veenker, 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
described in this Task Order.
APPROVED:
CITY OF PALO ALTO
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
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___________________________________
Docusign Envelope ID: 3867CDA0-2394-4C73-A5C3-3AAA5E07A7CB
Senior Manager
8/7/2025
Kate Murdock
Council Member Vicki Veenker
Council Member
9/5/2025
11
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 an internal audit of the Building Permit and Inspection Fees involves three (3)
primary steps:
•Step 1: Audit Planning
•Step 2: Fieldwork and Testing
•Step 3: Reporting
Step 1 – Audit Planning
This step consists of the tasks performed to adequately plan the work necessary to address the overall audit
objective and to solidify mutual understanding of the audit scope, objectives, audit process, and timing between
stakeholders and auditors. Tasks include:
•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
The step involves executing the procedures in the audit program to gather information, interview
individuals, and analyze the data and information to obtain sufficient evidence to address the audit
objectives. The preliminary audit objective is to determine (1) if the City is effectively and efficiently
managing fleet resources; and (2) if the City is on track to achieve City Fleet Sustainability and Climate
Action Plan goals established for 2030. Procedures include, but are not limited to:
•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
Docusign Envelope ID: 3867CDA0-2394-4C73-A5C3-3AAA5E07A7CB
• 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
Docusign Envelope ID: 3867CDA0-2394-4C73-A5C3-3AAA5E07A7CB
13
PROFESSIONAL SERVICES TASK ORDER
TASK ORDER FY26-4.37 Traffic Safety Improvements
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. C21179340A
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE):C21179340A
A 1B. TASK ORDER NO.: FY25-4.37
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:
Vicki Veenker 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
described in this Task Order.
APPROVED:
CITY OF PALO ALTO
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
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___________________________________
Docusign Envelope ID: 3867CDA0-2394-4C73-A5C3-3AAA5E07A7CB
Kate Murdock
8/7/2025
Senior Manager
Council Member
9/5/2025
Council Member Vicki Veenker
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 an internal audit of the Building Permit and Inspection Fees involves three (3)
primary steps:
• Step 1: Audit Planning
• Step 2: Fieldwork and Testing
• Step 3: Reporting
Step 1 – Audit Planning
This step consists of the tasks performed to adequately plan the work necessary to address the overall audit
objective and to solidify mutual understanding of the audit scope, objectives, audit process, and timing between
stakeholders and auditors. Tasks include:
• 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
The step involves executing the procedures in the audit program to gather information, interview
individuals, and analyze the data and information to obtain sufficient evidence to address the audit
objectives. The preliminary audit objective is to determine if the City is effectively and efficiently
designing and implementing improvements to ensure traffic safety for residents. Procedures include, but are
not limited to:
• 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
Docusign Envelope ID: 3867CDA0-2394-4C73-A5C3-3AAA5E07A7CB
• 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
Docusign Envelope ID: 3867CDA0-2394-4C73-A5C3-3AAA5E07A7CB
16
PROFESSIONAL SERVICES TASK ORDER
TASK ORDER FY26-4.38 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 A
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340 A
1B. TASK ORDER NO.: FY26-4.38
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:
Vicki Veenker, 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
described in this Task Order.
APPROVED:
CITY OF PALO ALTO
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
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___________________________________
Docusign Envelope ID: 3867CDA0-2394-4C73-A5C3-3AAA5E07A7CB
Senior Manager
8/7/2025
Kate Murdock
Council Member Vicki Veenker
Council Member 9/5/2025
17
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 an assessment of the City of Palo Alto Utilities Reserves (3) primary steps:
•Step 1: Assessment Planning
•Step 2: Fieldwork and Testing
•Step 3: Reporting
Step 1 – Assessment Planning
This step consists of the tasks performed to adequately plan the work necessary to address the overall audit
objective and to solidify mutual understanding of the assessment scope, objectives, process, and timing between
stakeholders and auditors. Tasks include:
•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
The step involves executing the procedures in the assessment program to gather information, interview
individuals, and analyze the data and information to obtain sufficient evidence to address the assessment
objectives. The preliminary objective is to assess the City of Palo Alto Utilities supply, operating, and
capital expenditure reserve policies and provide related benchmarking and best practices information:
•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
Docusign Envelope ID: 3867CDA0-2394-4C73-A5C3-3AAA5E07A7CB
25
PROFESSIONAL SERVICES TASK ORDER
TASK ORDER FY26-4.41 Follow-Up Audit Activities
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. C21179340A
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340 A
1B. TASK ORDER NO.: FY26-4.34
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:
Vicki Veenker, 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
described in this Task Order.
APPROVED:
CITY OF PALO ALTO
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
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___________________________________
Docusign Envelope ID: 3867CDA0-2394-4C73-A5C3-3AAA5E07A7CB
8/7/2025
Kate Murdock
Senior Manager
Council Member Vicki Veenker
Council Member
9/5/2025
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 conducting Follow-Up Audit Activities::
• 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:
The following deliverables will be prepared as part of this engagement:
• Annual Status of Audit Recommendations Report
• Policy & Services Committee Report Presentation
Schedule of Performance
Anticipated Start Date: July 1, 2025
Anticipated End Date: June 30, 2026
Maximum Compensation Amount and Rate Schedule
The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $18,255.
The not-to-exceed budget is based on an estimate of 90 total project hours, of which a minimum of 10 are estimated
to be completed by the City Auditor.
Docusign Envelope ID: 3867CDA0-2394-4C73-A5C3-3AAA5E07A7CB
PROFESSIONAL SERVICES TASK ORDER
TASK ORDER FY26-06 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. C21179340A
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340A
1B. TASK O RDER NO.: FY26 – Task 6
2. CONSULTANT NAME: Baker Tilly US, LLP
3. PERIOD OF PERFORMANCE: START: November 20, 2025 COMPLETION: June 30, 2026
4 TOTAL TASK ORDER PRICE: $45,450
BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD
5. BUDGET CODE_______________
COST CENTER________________
COST ELEMENT______________
WBS/CIP__________
PHASE__________
6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:
Vicki Veenker, 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:
Baker Tilly Advisory Group, LP
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
Docusign Envelope ID: FF6B5C7D-F637-4C0B-9098-EA017A266973
Manager
8/1/2025
Kate MurdockCouncil Member Vicki Veenker
8/7/2025
Council Member
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 and independent auditor
• Step 3: Cost per audit analysis
Step I – 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: November 20, 2025
Anticipated End Date: June 30, 2026
Docusign Envelope ID: FF6B5C7D-F637-4C0B-9098-EA017A266973
Maximum Compensation Amount and Rate Schedule
The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this
Task is $45,450. The not-to-exceed budget is based on an estimate of 100 total project hours, of
which 80 are estimated to be completed by the City Auditor.
Reimbursable Expenses
As part of the peer review process, the City Auditor’s Office will be paying the peer review
teams’ travel expenses should the peer review agency determine that the peer review will require
an onsite visit. The City Auditor’s Office will have a better estimate of these expenses in the Fall
of 2025, but a rough estimate is $10,000. This will cover airline, hotel, uber, and meal expenses
for the peer review team (typically 2 to 3 individuals for 4 days). At this time, it is not
anticipated that there will be other costs associated with the peer review if conducted through the
Association of Local Government Auditors.
Docusign Envelope ID: FF6B5C7D-F637-4C0B-9098-EA017A266973