TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Trang Nguyen, Finance Director
1. SUBJECT
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Result of the Independent Accountants' Report on the Agreed Upon Procedures for Payroll
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2. SUMMARY
LSL Certified Public Accountants completed the Payroll Agreed-Upon Procedures engagement approved by the City Council on February 24, 2026. The engagement concluded that the City's payroll calculations, employee compensation, leave administration, overtime calculations, and related payroll processes were accurate, with no exceptions identified. The report also included recommendations to strengthen internal controls, clarify provisions within the City's Memoranda of Understanding, and further reduce operational risk.
3. RECOMMENDED ACTION
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Receive and file the results of the Agreed Upon Procedures for Payroll.
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4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Stability.
6. DISCUSSION AND BACKGROUND
BACKGROUND
Staff is currently implementing the Human Capital Management module as part of the City's new Enterprise Resource Planning (ERP) system. Given the significance of payroll as the City's largest operating expenditure and the opportunity to validate existing processes before implementation of the new system, staff recommended engaging an independent firm to perform an Agreed-Upon Procedures (AUP) engagement. The purpose of the AUP was to independently assess payroll calculations, evaluate internal controls, and identify opportunities to strengthen payroll governance. On February 24, 2026, the City Council approved the agreement with LSL Certified Public Accountants (LSL) to perform the City's annual financial audit services and the Payroll AUP.
DISCUSSION
LSL began fieldwork for the Payroll Agreed-Upon Procedures (AUP) engagement in May 2026. The engagement included interviews with Human Resources and Payroll staff and test...
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