HomeMy WebLinkAboutC20184 - Audit SvcsContract No. C20184
CITY OF PALM DESERT
FINANCE DEPARTMENT
STAFF REPORT
REQUEST: APPROVAL OF THE CONTRACT WITH LANCE, SOLL & LUNGHARD,
LLP, FOR AUDIT SERVICES OF THE CITY OF PALM DESERT, PALM
DESERT REDEVELOPMENT AGENCY, DESERT WILLOW GOLF
RESORT, PALM DESERT RECREATION FACILITIES CORPORATION,
AND THE HOUSING AUTHORITY FOR THE FISCAL YEAR ENDED JUNE
30, 2006
SUBMITTED BY: PAUL S. GIBSON, DIRECTOR OF FINANCE
DATE: APRIL 13, 2006
CONTENTS: AUDIT ENGAGEMENT LETTER
Recommendation:
By Minute Motion, that the City Council approve the contract with Lance, Soll &
Lunghard, LLP, for audit services of the City of Palm Desert, Palm Desert
Redevelopment Agency, Desert Willow Golf Resort, Palm Desert Recreation
Facilities Corporation, and the Housing Authority for the fiscal year ended June 30,
2006.
Background:
On June 13, 2002 , the City Council approved a five-year contract with Lance, Soil & Lunghard,
LLP, to conduct audits of the City of Palm Desert, Palm Desert Redevelopment Agency, Desert
Willow Golf Resort, Palm Desert Recreation Facilities Corporation, and the Housing Authority. This
is the last year of the existing contract and the increase in fees is consistent with the approved
contract.
On February 28, 2006, the Audit, Investment and Finance Committee met and recommended to
continue the audit contract with Lance, Soll & Lunghard LLP.
Staff recommends to continue the contract with Lance, Soll & Lunghard, LLP, in relation to the audit
services provided for the City, Redevelopment Agency, Desert Willow Golf Resort, Palm Desert
Recreation Facilities Corporation and the Housing Authority.
Submitted by:
Paul S. Gibson, Director of Finance
PSG:JLE:nmo
Approved by:
Carlos L. Ortegaity Manager
Lance
Soll &
Lunghard
LLP
Certified Public Accountants
September 9, 2005
To the Honorable Mayor and Members of the City Council
City of Palm Desert, California
Brandon W. Burrows
Donald L. Parker
Michael K. Chu
David E. Hale
4 Pniessiortal Co'poraarn,
Donald G. Slater
Richard K. Kikuchi
Retired
Robert C. Lance
19I4-1994
Richard C. Soli
Fred J. Lunghard, Jr.
1928-1999
We have audited the financial statements of the City of Palm Desert for the year ended June 30, 2005
and have issued our report thereon dated September 9, 2005. Professional standards require that we
provide you with the following information related to our audit.
Our Responsibility under Auditing Standards Generally Accepted in the United States of America
and Government Auditing Standards
Our responsibility, as described by professional standards, is to plan and perform our audit to obtain
reasonable but not absolute assurance about whether the financial statements are free of material
misstatement and are fairly presented in accordance with accounting standards generally accepted in the
United States of America. Because an audit is designed to provide reasonable but not absolute
assurance, and because we did not perform a detailed examination of all transactions, there is a risk that
material misstatements may exist and not be detected by us.
As part of our audit, we considered the intemal control of the City of Palm Desert. Such considerations
were solely for the purpose of determining our audit procedures and not to provide any assurance
concerning such internal control.
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we performed tests of the City of Palm Desert's compliance with certain provisions of laws,
regulations, contracts and grant agreements. However, the objective of our tests was not to provide an
opinion on compliance with such provisions.
Significant Accounting Policies
Management is responsible for the selection and use of appropriate accounting policies. In accordance
with the terms of our engagement, we will advise management about the appropriateness of accounting
policies and their application. The significant accounting policies used by the City of Palm Desert are
described in the notes to the financial statements. No new accounting policies were adopted and the
application of existing policies was not changed during the year ended June 30, 2005. We noted no
transactions entered into by the City of Palm Desert during the year that were both significant and
unusual and of which, under professional standards, we are required to inform you of, or transactions for
which there is a lack of authoritative guidance or consensus.
75 }EARS
3o:
1929 lh//2004
06 EXCellegCe 203 N. Brea Blvd., Suite 203 • Brea, CA 92821-4056 • (714) 672-0022 • Fax (714) 672-0331 • www.lslcpas.com
Lance
So4I s
Lunghard
LLP
CERTIFIED PUBLIC ACCOUNTANTS
To the Honorable Mayor and Members of the City Council
City of Palm Desert, California
Page 2
Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management
and are based on management's knowledge and experience about past and current events and
assumptions about future events. Certain accounting estimates are particularly sensitive
because of their significance to the financial statements and because of the possibility that future
events affecting them may differ significantly from those expected. Where applicable, the City
utilized accounting estimates for depreciation on City assets, amortization of bond related
issuance costs, premiums/discounts and gains/losses on bond defeasance and for reporting
incurred but not reported amounts relating to the liability for claims and judgments. The
methodology used during this audit is consistent with that of prior years. We evaluated the key
factors and assumptions used to develop these estimates in determining that they are reasonable
in relation to the financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a
matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting or
auditing matter that could be significant to the financial statements or the auditor's report. We are
pleased to report that no such disagreements arose during the course of our audit.
Consultations with Other Independent Accountants
In some cases management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation
involves application of an accounting principle to the governmental unit's financial statements or a
determination of the type of auditor's opinion that may be expressed on those statements, our
professional standards require the consulting accountant to check with us to determine that the
consultant has all the relevant facts. To our knowledge, there were no such consultations with
other accountants.
Issues Discussed Prior to Retention of Independent Auditors
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as the City's auditors.
However, these discussions occurred in the normal course of our professional relationship and
our responses were not a condition to our retention.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing our audit.
This information is intended solely for the use of Governing Board(s), Committees and
management of the City of Palm Desert and is not intended to be, and should not be, used by
anyone other than these specified parties.
Very truly yours,
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