HomeMy WebLinkAboutVan Lant & Fankhanel, LLP 2015-05-12; Amendment 12; 2022-10-04 COU No. 1415-197-Al2
CITY OF UKIAH
AMENDMENT NO. 12
TO
PROFESSIONAL SERVICES CONTRACT 1415-197
BETWEEN
VAN LANT & FANKHANEL, LLP and THE CITY OF UKIAH
This Amendment No. 12, entered on October 4, 2022, revises the Agreement for
Professional services dated May 12, 2015 between the City of Ukiah and Van Lant &
Fankhanel, LLP for professional consulting services relating to providing auditing
services.
This Amendment No. 12 revises the following as per Exhibit A:
1. The time of completion has been amended to extend the agreement for an
additional two (2) years, to provide auditing services for fiscal years ending 2022
and 2023.
2. The Basis for Compensation has been amended to accommodate the two (2)
additional years, adding $76,450 to the agreement, resulting in a revised not to
exceed amount of$345,300.
Except as expressly amended by this Amendment, all other terms remain unchanged and
in full force and effect.
IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS
AMENDMENT ON THE EFFECTIVE DATE:
VAN LANT& FANKHAN L
BY: DATE: A 2
BRETT VAN LANT
CITY OF UKIAH
BY: ��`sw DATE: Oct 6, 2022
SAGE SANGIACOMO, CITY MANAGER
ATTEST
z�� Oct 6 2022
BY:Kristine Lawler(Oct 6,2022 13:04 PDT) DATE:
KRISTINE LAWLER, CITY CLERK
Van Lant & EXHIBIT A -
Amendment 12
VE= Fankhanel, LLP
—{ Certified Public Accountants
July 28, 2022
To: Management and the City Council
City of Ukiah
300 Seminary Avenue
Ukiah, CA 95482
We are pleased to confirm our understanding of the services we are to provide the City of Ukiah (City)for the year
ended June 30, 2022.
Audit Scope and Objectives
We will audit the financial statements of the governmental activities, the business-type activities, each major fund
and the aggregate remaining fund information, including the related notes to the financial statements, which
collectively comprise the basic financial statements, of the City as of and for the year ended June 30, 2022.
Accounting standards generally accepted in the United States of America provide for certain required
supplementary information(RSI),such as management's discussion and analysis(MD&A),to supplement the City's
basic financial statements. Such information, although not a part of the basic financial statements, is required by
the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for
placing the basic financial statements in an appropriate operational, economic, or historical context. As part of our
engagement, we will apply certain limited procedures to the City's RSI in accordance with auditing standards
generally accepted in the United States of America. These limited procedures will consist of inquiries of
management regarding the methods of preparing the information and comparing the information for consistency
with management's responses to our inquiries. the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We will not express an opinion or provide any assurance on the
information because the limited procedures do not provide us with sufficient evidence to express an opinion or
provide any assurance. The following RSI is required by generally accepted accounting principles and will be
subjected to certain limited procedures, but will not be audited:
1) Management's Discussion and Analysis
2) Budgetary comparison schedules.
3) Pension RSI.
We have also been engaged to report on supplementary information other than RSl that accompanies the City's
financial statements. We will subject the following supplementary information to the auditing procedures applied in
our audit of the financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the financial statements or to
the financial statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America, and we will provide an opinion on it in relation to the financial
statements as a whole, in a report combined with our auditor's report on the financial statements:
1) Schedule of expenditures of federal awards.
2) Combining schedules.
In connection with our audit of the basic financial statements, we will read the following other information and
consider whether a material inconsistency exists between the other information and the basic financial statements,
or the other information otherwise appears to be materially misstated. If,based on the work performed,we conclude
that an uncorrected material misstatement of the other information exists,we are required to describe it in our report.
1) Introductory Section
l 2) Statistical Section
Van Lant&Fankhanel,LLP
29970 Technology Drive_Suite 105 A
Murrieta CA 92563
909 856 6879
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The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and issue an auditor's report that includes our
opinions about whether your financial statements are fairly presented, in all material respects, in conformity with
GAAP, and report on the fairness of the supplementary information referred to in the second paragraph when
considered in relation to the financial statements as a whole. Reasonable assurance is a high level of assurance
but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS
and Government Auditing Standards will always detect a material misstatement when it exists. Misstatements,
including omissions,can arise from fraud or error and are considered material if there is a substantial likelihood that,
individually or in the aggregate,they would influence the judgment of a reasonable user made based on the financial
statements. The objectives also include reporting on:
• Internal control over financial reporting and compliance with provisions of laws, regulations, contracts, and
award agreements, noncompliance with which could have a material effect on the financial statements in
accordance with Government Auditing Standards.
• Internal control over compliance related to major programs and an opinion (or disclaimer of opinion) on
compliance with federal statutes, regulations, and the terms and conditions of federal awards that could
have a direct and material effect on each major program in accordance with the Single Audit Act
Amendments of 1996 and Title 2 U.S. Code of Federal Regulations(CFR)Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards(Uniform Guidance).
Auditor's Responsibilities for the Audit of the Financial Statements and Single Audit
We will conduct our audit in accordance with GARS; the standards for financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States; the Single Audit Act Amendments of
1996; and the provisions of the Uniform Guidance, and will include tests of accounting records, a determination of
major program(s)in accordance with Uniform Guidance, and other procedures we consider necessary to enable us
to express such opinions. As part of an audit in accordance with GAAS and Government Auditing Standards, we
exercise professional judgment and maintain professional skepticism throughout the audit.
We will evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management. We will also evaluate the overall presentation of the financial statements,
including the disclosures, and determine whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation. We will plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether from (1) errors, (2)
fraudulent financial reporting, (3) misappropriation of assets or(4) violations of laws or governmental regulations
that are attributable to the government or to acts by management or employees acting on behalf of the government.
Because the determination of waste and abuse is subjective, Government Auditing Standards do not expect
auditors to perform specific procedures to detect waste or abuse in financial audits nor do they expect auditors to
provide reasonable assurance of detecting waste or abuse.
Because of the inherent limitations of an audit, combined with the inherent limitations of internal control, and
because we will not perform a detailed examination of all transactions, there is an unavoidable risk that some
material misstatements or noncompliance may not be detected by us, even though the audit is properly planned
and performed in accordance with GAAS and Government Auditing Standards. In addition,an audit is not designed
to detect immaterial misstatements or violations of laws or governmental regulations that do not have a direct and
material effect on the financial statements or on major programs. However, we will inform the appropriate level of
management of any material errors, any fraudulent financial reporting, or misappropriation of assets that come to
our attention. We will also inform the appropriate level of management of any violations of laws or governmental
regulations that come to our attention, unless clearly inconsequential. We will include such matters in the reports
required for a Single Audit. Our responsibility as auditors is limited to the period covered by our audit and does not
extend to any later periods for which we are not engaged as auditors.
We will also conclude, based on the audit evidence obtained, whether there are conditions or events, considered
in the aggregate, that raise substantial doubt about the government's ability to continue as a going concern for a
reasonable period of time.
Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts,
tests of the physical existence of inventories, and direct confirmation of receivables and certain assets and liabilities
by correspondence with selected individuals, funding sources, creditors, and financial institutions. We will also
request written representations from your attorneys as part of the engagement.
We may, from time to time and depending on the circumstances, use third-party service providers in serving your
account. We may share confidential information about you with these service providers but remain committed to
maintaining the confidentiality and security of your information. Accordingly, we maintain internal policies,
procedures, and safeguards to protect the confidentiality of your personal information. In addition, we will secure
confidentiality agreements with all service providers to maintain the confidentiality of your information and we will
take reasonable precautions to determine that they have appropriate procedures in place to prevent the
unauthorized release of your confidential information to others. In the event that we are unable to secure an
appropriate confidentiality agreement, you will be asked to provide your consent prior to the sharing of your
confidential information with the third-party service provider. Furthermore, we will remain responsible for the work
provided by any such third-party service providers.
Our audit of financial statements does not relieve you of your responsibilities.
We will also provide a report on agreed upon procedures performed on the City's calculation of its annual
appropriations limit as required by Article XIII B of the California State Constitution.We will perform the procedures
in the Article XIII B Appropriations Limit Uniform Guidelines as published by the League of California Cities. This
report will include a statement that the report is intended solely for the information and use of management, City
Council and specific legislative or regulatory bodies and is not intended to be and should not be used by anyone
other than these specified parties.
Audit Procedures—Internal Control
We will obtain an understanding of the government and its environment, including internal control relevant to the
audit, sufficient to identify and assess the risks of material misstatement of the financial statements, whether due
to error or fraud, and to design and perform audit procedures responsive to those risks and obtain evidence that is
sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentation, or the override of internal control. Tests of controls may be performed to test the
effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are
material to the financial statements and to preventing and detecting misstatements resulting from illegal acts and
other noncompliance matters that have a direct and material effect on the financial statements. Our tests, if
performed,will be less in scope than would be necessary to render an opinion on internal control and, accordingly,
no opinion will be expressed in our report on internal control issued pursuant to Government Auditing Standards.
As required by the Uniform Guidance,we will perform tests of controls over compliance to evaluate the effectiveness
of the design and operation of controls that we consider relevant to preventing or detecting material noncompliance
with compliance requirements applicable to each major federal award program. However, our tests will be less in
scope than would be necessary to render an opinion on those controls and, accordingly, no opinion will be
expressed in our report on internal control issued pursuant to the Uniform Guidance.
An audit is not designed to provide assurance on internal control or to identify significant deficiencies or material
weaknesses. Accordingly, we will express no such opinion. However, during the audit, we will communicate to
management and those charged with governance internal control related matters that are required to be
communicated under AICPA professional standards, Government Auditing Standards, and the Uniform Guidance.
Audit Procedures—Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement,
we will perform tests of the City's compliance with provisions of applicable laws, regulations, contracts, and
agreements, including grant agreements. However, the objective of those procedures will not be to provide an
opinion on overall compliance and we will not express such an opinion in our report on compliance issued pursuant
to Government Auditing Standards.
The Uniform Guidance requires that we also plan and perform the audit to obtain reasonable assurance about
whether the auditee has complied with federal statutes, regulations,and the terms and conditions of federal awards
applicable to major programs. Our procedures will consist of tests of transactions and other applicable procedures
described in the OMB Compliance Supplement for the types of compliance requirements that could have a direct
and material effect on each of the City's major programs. The purpose of these procedures will be to express an
opinion on the City's compliance with requirements applicable to each of its major programs in our report on
compliance issued pursuant to the Uniform Guidance.
Other Services
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We will also assist in preparing the financial statements, schedule of expenditures of federal awards, and related
notes of the City in conformity with U.S. generally accepted accounting principles and the Uniform Guidance based
on information provided by you. These nonaudit services do not constitute an audit under Govemment Auditing
Standards and such services will not be conducted in accordance with Government Auditing Standards. We will
perform the services in accordance with applicable professional standards. The other services are limited to the
financial statements, schedule of expenditures of federal awards, and related notes services previously defined.
We, in our sole professional judgment, reserve the right to refuse to perform any procedure or take any action that
could be construed as assuming management responsibilities.
You agree to assume all management responsibilities for the financial statements, schedule of expenditures of
federal awards,and related notes,and any other nonaudit services we provide.You will be required to acknowledge
in the management representation letter our assistance with preparation of the financial statements, the schedule
of expenditures of federal awards, and related notes and that you have reviewed and approved the financial
statements, the schedule of expenditures of federal awards, and related notes prior to their issuance and have
accepted responsibility for them. Further, you agree to oversee the nonaudit services by designating an individual,
preferably from senior management, with suitable skill, knowledge, or experience; evaluate the adequacy and
results of those services; and accept responsibility for them.
Responsibilities of Management for the Financial Statements and Single Audit
Our audit will be conducted on the basis that you acknowledge and understand your responsibility for(1)designing,
implementing, establishing, and maintaining effective internal controls relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or error,
including internal controls over federal awards, and for evaluating and monitoring ongoing activities to help ensure
that appropriate goals and objectives are met; (2) following laws and regulations; (3) ensuring that there is
reasonable assurance that government programs are administered in compliance with compliance requirements;
and (4) ensuring that management and financial information is reliable and properly reported. Management is also
responsible for implementing systems designed to achieve compliance with applicable laws, regulations,contracts,
and grant agreements. You are also responsible for the selection and application of accounting principles; for the
preparation and fair presentation of the financial statements, schedule of expenditures of federal awards, and all
accompanying information in conformity with accounting principles generally accepted in the United States of
America, and for compliance with applicable laws and regulations (including federal statutes), rules, and the
provisions of contracts and grant agreements (including award agreements). Your responsibilities also include
identifying significant contractor relationships in which the contractor has responsibility for program compliance and
for the accuracy and completeness of that information.
You are also responsible for making drafts of financial statements, schedule of expenditures of federal awards, all
financial records,and related information available to us and for the accuracy and completeness of that information
(including information from outside of the general and subsidiary ledgers). You are also responsible for providing
us with (1)access to all information of which you are aware that is relevant to the preparation and fair presentation
of the financial statements, such as records,documentation, identification of all related parties and all related-party
relationships and transactions, and other matters; (2) access to personnel, accounts, books, records, supporting
documentation, and other information as needed to perform an audit under the Uniform Guidance; (3) additional
information that we may request for the purpose of the audit; and (4) unrestricted access to persons within the
government from whom we determine it necessary to obtain audit evidence.At the conclusion of our audit,we will
require certain written representations from you about the financial statements; schedule of expenditures of federal
awards; federal award programs; compliance with laws, regulations, contracts, and grant agreements; and related
matters.
Your responsibilities include adjusting the financial statements to correct material misstatements and confirming to
us in the management representation letter that the effects of any uncorrected misstatements aggregated by us
during the current engagement and pertaining to the latest period presented are immaterial, both individually and
in the aggregate,to the financial statements of each opinion unit taken as a whole.
You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and
for informing us about all known or suspected fraud affecting the government involving (1) management, (2)
employees who have significant roles in internal control, and(3)others where the fraud could have a material effect
on the financial statements. Your responsibilities include informing us of your knowledge of any allegations of fraud
or suspected fraud affecting the government received in communications from employees, former employees,
grantors, regulators, or others. In addition, you are responsible for identifying and ensuring that the government
complies with applicable laws, regulations, contracts, agreements, and grants. You are also responsible for taking
timely and appropriate steps to remedy fraud and noncompliance with provisions of laws, regulations, contracts,
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and grant agreements that we report. Additionally, as required by the Uniform Guidance, it is management's
responsibility to evaluate and monitor noncompliance with federal statutes, regulations, and the terms and
conditions of federal awards; take prompt action when instances of noncompliance are identified including
noncompliance identified in audit findings; promptly follow up and take corrective action on reported audit findings;
and prepare a summary schedule of prior audit findings and a separate corrective action plan.
You are responsible for identifying all federal awards received and understanding and complying with the
compliance requirements and for the preparation of the schedule of expenditures of federal awards(including notes
and noncash assistance received, and COVID-19-related concepts, such as lost revenues, if applicable) in
conformity with the Uniform Guidance. You agree to include our report on the schedule of expenditures of federal
awards in any document that contains, and indicates that we have reported on, the schedule of expenditures of
federal awards. You also agree to [include the audited financial statements with any presentation of the schedule
of expenditures of federal awards that includes our report thereon OR make the audited financial statements readily
available to intended users of the schedule of expenditures of federal awards no later than the date the schedule
of expenditures of federal awards is issued with our report thereon]. Your responsibilities include acknowledging to
us in the written representation letter that (1)you are responsible for presentation of the schedule of expenditures
of federal awards in accordance with the Uniform Guidance; (2)you believe the schedule of expenditures of federal
awards, including its form and content, is stated fairly in accordance with the Uniform Guidance; (3)the methods of
measurement or presentation have not changed from those used in the prior period (or, if they have changed, the
reasons for such changes); and (4) you have disclosed to us any significant assumptions or interpretations
underlying the measurement or presentation of the schedule of expenditures of federal awards.
You are also responsible for the preparation of the other supplementary information,which we have been engaged
to report on, in conformity with U.S. generally accepted accounting principles (GAAP). You agree to include our
report on the supplementary information in any document that contains, and indicates that we have reported on,
the supplementary information. You also agree to[include the audited financial statements with any presentation of
the supplementary information that includes our report thereon OR make the audited financial statements readily
available to users of the supplementary information no later than the date the supplementary information is issued
with our report thereon]. Your responsibilities include acknowledging to us in the written representation letter that
(1)you are responsible for presentation of the supplementary information in accordance with GAAP;(2)you believe
the supplementary information, including its form and content, is fairly presented in accordance with GAAP; (3)the
methods of measurement or presentation have not changed from those used in the prior period (or, if they have
changed, the reasons for such changes); and (4) you have disclosed to us any significant assumptions or
interpretations underlying the measurement or presentation of the supplementary information.
Management is responsible for establishing and maintaining a process for tracking the status of audit findings and
recommendations. Management is also responsible for identifying and providing report copies of previous financial
audits, attestation engagements, performance audits, or other studies related to the objectives discussed in the
Audit Scope and Objectives section of this letter. This responsibility includes relaying to us corrective actions taken
to address significant findings and recommendations resulting from those audits, attestation engagements,
performance audits,or studies.You are also responsible for providing management's views on our current findings,
conclusions, and recommendations,as well as your planned corrective actions for the report,and for the timing and
format for providing that information.
Engagement Administration, Fees,and Other
We understand that your employees will prepare all cash, accounts receivable, or other confirmations and
schedules we request and will locate any documents selected by us for testing.
At the conclusion of the engagement, we will complete the appropriate sections of the Data Collection Form that
summarizes our audit findings. It is management's responsibility to electronically submit the reporting package
(including financial statements, schedule of expenditures of federal awards, summary schedule of prior audit
findings, auditors' reports, and corrective action plan) along with the Data Collection Form to the federal audit
clearinghouse. We will coordinate with you the electronic submission and certification. The Data Collection Form
and the reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors'
reports or nine months after the end of the audit period.
We will provide copies of our reports to the City; however, management is responsible for distribution of the reports
and the financial statements. Unless restricted by law or regulation, or containing privileged and confidential
information, copies of our reports are to be made available for public inspection.
The audit documentation for this engagement is the property of VLF, LLP and constitutes confidential information.
However, subject to applicable laws and regulations, audit documentation and appropriate individuals will be made
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available upon request and in a timely manner to the Oversight Agency or its designee, a federal agency providing
direct or indirect funding, or the U.S. Government Accountability Office for purposes of a quality review of the audit,
to resolve audit findings,or to carry out oversight responsibilities.We will notify you of any such request. If requested,
access to such audit documentation will be provided under the supervision of VLF, LLP personnel. Furthermore,
upon request,we may provide copies of selected audit documentation to the aforementioned parties.These parties
may intend, or decide, to distribute the copies or information contained therein to others, including other
governmental agencies.
The audit documentation for this engagement will be retained for a minimum of seven years after the report release
date or for any additional period requested by the Oversight Agency for Audit, or Pass-through Entity. If we are
aware that a federal awarding agency, pass-through entity, or auditee is contesting an audit finding,we will contact
the party(ies) contesting the audit finding for guidance prior to destroying the audit documentation.
We will begin our audit in April of 2022 and plan to issue our reports in December of 2022. Brett Van Lant, CPA is
the engagement partner and is responsible for supervising the engagement and signing the reports or authorizing
another individual to sign them.
Our proposed fees for FY 2022 and FY 2023 are listed below:
Fiscal Year
Se ry ice 2021/22 2022/23
City audit and related reports $ 31,900 $ 32,700
Single Audit, if required 2,650 2,950
State Controller's Report Preparation 1,850 1,900
GANN Limit 550 600
Street Report 650 700
Grand Total (not-to-exceed) $ 37,600 $ 38,850
Our invoices for these fees will be rendered each month as work progresses and are payable on presentation. In
accordance with our firm policies, work may be suspended if your account becomes 60 days or more overdue and
may not be resumed until your account is paid in full. If we elect to terminate our services for nonpayment, our
engagement will be deemed to have been completed upon written notification of termination, even if we have not
completed our report(s). You will be obligated to compensate us for all time expended and to reimburse us for all
out-of-pocket costs through the date of termination. The above fee is based on anticipated cooperation from your
personnel and the assumption that unexpected circumstances will not be encountered during the audit. If significant
additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the
additional costs. In addition,the above fees are based on the assumption that the Single Audit will include no more
than two major programs, in accordance with the Uniform Guidance.
Reporting
We will issue written reports upon completion of our Single Audit. Our reports will be addressed to the City Council
of the City of Ukiah. Circumstances may arise in which our report may differ from its expected form and content
based on the results of our audit. Depending on the nature of these circumstances, it may be necessary for us to
modify our opinions, add a separate section, or add an emphasis-of-matter or other-matter paragraph to our
auditor's report, or if necessary, withdraw from this engagement. If our opinions are other than unmodified, we will
discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to
form or have not formed opinions, we may decline to express opinions or issue reports, or we may withdraw from
this engagement.
The Government Auditing Standards report on internal control over financial reporting and on compliance and other
matters will state that(1)the purpose of the report is solely to describe the scope of testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal
control or on compliance, and(2)the report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering the entity's internal control and compliance. The Uniform Guidance report on
internal control over compliance will state that the purpose of the report on internal control over compliance is solely
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to describe the scope of testing of internal control over compliance and the results of that testing based on the
requirements of the Uniform Guidance. Both reports will state that the report is not suitable for any other purpose.
We appreciate the opportunity to be of service to the City of Ukiah and believe this letter accurately summarizes
the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms
of our engagement as described in this letter, please sign the attached copy and return it to us.
Very truly yours,
VAN LANT& FANKMANEL, LLP
)�v�� 4- 310-wl�-' ii),
Brett Van Lant
Certified Public Accountant
RESPONSE:
This letter correctly sets forth the understanding of the City of Ukiah.
Signature:
Title: _ Sage Sangiacomo
Date: 10/4/22
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