TO: Chair and Members of the Audit Advisory Committee
FROM: Trang Nguyen, Finance Director
1. SUBJECT
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Agreement with LSL, LLP for Annual Financial Audit services for the City and the Successor Agency of the former Orange Redevelopment Agency for Fiscal Year 2025-2026 and 2026-2027 and an Agreed Upon Procedures for Payroll.
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2. SUMMARY
To be submitted for City Council's approval is a two-year agreement with LSL, LLP to provide annual financial audit services for the City and the Successor Agency for Fiscal Years 2025-2026 and 2026-2027, along with a one-time Agreed-Upon Procedures engagement related to payroll. The total not-to-exceed cost is $185,240 and will be funded through the annual operating budget.
3. RECOMMENDED ACTION
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Receive and file.
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4. DISCUSSION AND BACKGROUND
The current agreement with LSL, LLP (LSL) expires upon completion of the Fiscal Year 2024-2025 audit. Per Government Code 12410.6(b), the City may retain LSL for an additional two years before issuing a new Request for Proposals (RFP), as the lead partner has served only four years which has not exceeded the six-year rotation limit. Staff are seeking authorization to exercise this option for the following reasons:
* Familiarity with City operations: LSL has extensive knowledge of the City's financial processes, and with the recent changes to the financial software, it is more cost-effective to retain a firm that is already familiar with the City's systems.
* Cost savings: The City currently receives a 20% discount from LSL's standard hourly rates.
The proposed extension covers audit services for Fiscal Years ending June 30, 2026, and June 30, 2027, at costs of $84,600 and $87,140, respectively. Actual annual costs may vary depending on the number of major programs included in the federally required Single Audit and whether the Optional Services for ACFR Preparation and Investment Portfolio are requested. Additional details on the scope of work and r...
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