Loading...
HomeMy WebLinkAbout12-09-2009 Administration Committee Agenda AGENDA REGULAR MEETING OF THE ADMINISTRATION COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, DECEMBER 9, 2009, AT 5:00 P.M. ADMINISTRATIVE OFFICE 10844 Ellis Avenue Fountain Valley, California 92708 www.ocsd.com PLEDGE OF ALLEGIANCE DECLARATION OF QUORUM PUBLIC COMMENTS REPORT OF COMMITTEE CHAIR REPORT OF GENERAL MANAGER REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES CONSENT CALENDAR ITEMS 1. Approve minutes of the November 4, 2009, meeting of the Administration Committee. ACTION ITEMS 2. a) Approve an additional one-year renewal period to the Purchase Order Contract with Lance, Soll & Lunghard, Certified Public Accountants, for internal auditing services for the period of March 1, 2010 through February 28, 2011, in an amount not to exceed $58,670; and, b) Direct Lance, Soll & Lunghard to perform specific internal auditing assignments as the Administration Committee deems necessary. December 9, 2009 Page 2 3. Approve a one-year extension of the service agreement for External Financial Auditing Services, Specification No. CS-2005-217, with Mayer Hoffman McCann P.C., for the independent financial audit covering fiscal year 2009-10, in an amount not to exceed $56,000. INFORMATIONAL ITEMS None. CLOSED SESSION During the course of conducting the business set forth on this agenda as a regular meeting of the Committee, the Chair may convene the Committee in closed session to consider matters of pending real estate negotiations, pending or potential litigation, or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) employee actions or negotiations with employee representatives; or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Committee during a permitted closed session and are not available for public inspection. At such time as final actions are taken by the Committee on any of these subjects, the minutes will reflect all required disclosures of information. A. Convene in closed session. CONFERENCE WITH LABOR NEGOTIATORS (Government Code Section 54957(b)(1)) 1. Agency Designated Representatives: James D. Ruth, General Manager; Robert Ghirelli, Assistant General Manager; Lorenzo Tyner, Director of Finance and Administrative Services; Jeff Reed, Human Resources and Employee Relations Manager; and Paul Loehr, Human Resources Supervisor. 2. Employee Organizations: a). Orange County Employees Association; b). International Union of Operating Engineers, Local 501; and c). Supervisors, Professional Management Team (part of Peace Officers Council of California). B. Reconvene in regular session. C. Consideration of action, if any, on matters considered in closed session. Other business and communications or supplemental agenda items, if any. Adjournment: The next regular Administration Committee meeting is scheduled for Wednesday, February 10, 2010, at 5 p.m. December 9, 2009 Page 3 H:\dept\agenda\Admin Committee\2009\1209\03.120909_Admin Agenda.docx Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2, this agenda has been posted in the main lobby of the District’s Administrative offices not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting to all, or a majority of all, of the members of District’s Board, are available for public inspection in the office of the Clerk of the Board, located at 10844 Ellis Avenue, Fountain Valley, California. Items Not Posted: In the event any matter not listed on this agenda is proposed to be submitted to the Committee for discussion and/or action, it will be done in compliance with Section 54954.2(b) as an emergency item or because there is a need to take immediate action, which need came to the attention of the Committee subsequent to the posting of agenda, or as set forth on a supplemental agenda posted in the manner as above, not less than 72 hours prior to the meeting date. Public Comments: Any member of the public may address the Administration Committee on specific agenda items or matters of general interest. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to three minutes. Matters of interest addressed by a member of the public and not listed on this agenda cannot have action taken by the Committee except as authorized by Section 54954.2(b). Consent Calendar: All matters placed on the consent calendar are considered as not requiring discussion or further explanation, and unless a particular item is requested to be removed from the consent calendar by a Director of staff member, there will be no separate discussion of these items. All items on the consent calendar will be enacted by one action approving all motions, and casting a unanimous ballot for resolutions included on the consent calendar. All items removed from the consent calendar shall be considered in the regular order of business. The Committee Chair will determine if any items are to be deleted from the consent calendar. Items Continued: Items may be continued from this meeting without further notice to a Committee meeting held within five (5) days of this meeting per Government Code Section 54954.2(b)(3). Meeting Adjournment: This meeting may be adjourned to a later time and items of business from this agenda may be considered at the later meeting by Order of Adjournment and Notice in accordance with Government Code Section 54955 (posted within 24 hours). Accommodations for the Disabled: The Board of Directors Meeting Room is wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board‘s office at (714) 593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Notice to Committee Members: For any questions on the agenda or to place any items on the agenda, Committee members should contact the Committee Chair or Clerk of the Board ten days in advance of the Committee meeting. Committee Chair: Mark Waldman (714) 827-1969 Committee Secretary: Lilia Kovac (714) 593-7124 lkovac@ocsd.com General Manager: Jim Ruth (714) 593-7110 jruth@ocsd.com Assistant General Manager Bob Ghirelli (714) 593-7400 rghirelli@ocsd.com Director of Finance and Lorenzo Tyner (714) 593-7550 ltyner@ocsd.com Administrative Services Human Resources and Employee Jeff Reed (714) 593-7144 jreed@ocsd.com Relations Manager Page 1 ADMINISTRATION COMMITTEE Meeting Date 12/09/09 To Bd. of Dir. AGENDA REPORT Item Number 2 Item Number Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services GENERAL MANAGER'S RECOMMENDATION 1. Approve an additional one-year renewal period to the Purchase Order Contract with Lance, Soll & Lunghard, Certified Public Accountants, for internal auditing services for the period of March 1, 2010 through February 28, 2011, in an amount not to exceed $58,670; and, 2. Direct Lance, Soll & Lunghard to perform specific internal auditing assignments as the Administration Committee deems necessary. SUMMARY At the direction of the Committee in FY 2005-06, staff solicited a Request for Proposal (RFP) to provide 600 hours of Internal Auditing Services, with the option of auditing the following two years at the Committee’s discretion. The RFP was submitted to eight firms specializing in providing auditing services for local governments. After completion of the RFP process, Lance, Soll & Lunghard’s (LSL) proposal was deemed to be the most qualified, and responsive to the Sanitation District’s needs, and LSL was selected to serve as the District’s internal auditors. Based on the high level of work performed by LSL, and their willingness to conform to the Committee’s reporting timelines, the Administration Committee renewed their contract in February 2007, 2008, and 2009. At this time, staff is again recommending that their contract be renewed for an additional year beyond the original four-year agreement at the same not-to-exceed amount of $58,670 proposed during the initial contact year, and the following three option renewal years. Recommended Areas to Be Considered in Future Internal Audits Although staff has no knowledge of any improprieties or irregularities within the accounting or operational activities of the Sanitation District, following are typical areas the Committee may want to consider in future internal audits: 1. Audit large contractor’s progress payments for accuracy and appropriateness. This would mean auditing their books and records to the progress payments. 2. Contract management. 3. Proper billings to end-users, including permittees. 4. Expenditures conform to District ordinances, resolutions, policies and procedures. 5. Employee expense reports conform to Board ordinances and resolutions. 6. Employee salaries and benefits conform to Board ordinances and resolutions. 7. Credit card purchases conform to policies and procedures. 8. District contributions are Board approved. Page 2 9. District memberships conform to policies and procedures. 10. Comprehensive review of all key accounting policies, procedures, and processes to ensure that all related internal controls are well designed, properly implemented, and adequately maintained. Staff recommends that the Committee direct the Sanitation District’s contracted internal auditors to perform an internal audit review of the first item listed above. Staff believes that auditing large contractors for appropriate billings could generate the largest possible return on funds spent on contracted internal auditing services. PRIOR COMMITTEE/BOARD ACTIONS February 2009 - Administration Committee approved the renewal of the contract with Lance, Soll & Lunghard, Certified Public Accounts, for an additional year to serve as the District’s contracted internal auditors for the period of March 1, 2009 through February 28, 2010, for an amount not to exceed $58,670 February 2008 - Administration Committee approved the second year of the two-year renewal option on the Purchase Order Contract with Lance, Soll & Lunghard, Certified Public Accounts, to serve as the District’s contracted internal auditors for the period of March 1, 2008 through February 28, 2009, for an amount not to exceed $58,670. February 2007 - Administration Committee approved the first year renewal of the two-year renewal option on the Purchase Order Contract with Lance, Soll & Lunghard, Certified Public Accounts, to serve as the District’s contracted internal auditors for the period of March 1, 2007 through February 28, 2008, for an amount not to exceed $58,670. February 2006 - Board approved a Purchase Order Contract with Lance, Soll & Lunghard, Certified Public Accountants, to serve as the Sanitation District’s contracted internal auditors for fiscal year 2005-06, for the period of March 1, 2006 through February 28, 2007, for an amount not to exceed $58,670. ADDITIONAL INFORMATION An Evaluation Team comprised of the Director of Finance, Controller, and Accounting Manager determined that Lance, Soll & Lunghard (LSL) was the best qualified firm to serve as the Sanitation District’s internal auditors based on the following observations: 1. The firm has provided auditing services to local governments for over 75 years, and has consistently been named one of the “Top Accounting Firms” in Orange County by the Orange County Business Journal. 2. They provided extensive examples on internal auditing services provided to other governmental clients. 3. They described in detail their thoroughness in conducting internal auditing services. Based on the Evaluation Team’s recommendation, the Committee approved the selection of LSL to serve as the Sanitation District’s internal auditors. Page 3 During FY 2005-06, LSL completed an internal review of the Sanitation District’s capital improvement program’s procurement procedures and related internal controls, and issued their independent account’s report to the Committee in October 2006. During FY 2006-07, LSL completed an internal review of the Sanitation District’s agreement with the Orange County Water District (OCWD) regarding the construction of the Groundwater Replenishment System, and audited the subsequent billings from OCWD to ensure conformity with the agreement. During FY 2007-08, LSL completed an internal review of the Sanitation District’s on the collection and remittance of capital facilities capacity charge fees by member agencies on behalf of the Sanitation District. During FY 2008-09, LSL completed internal reviews of the Sanitation District’s key Accounting policies, procedures, and processes to ensure that all related internal controls are well designed, properly implemented, and adequately maintained; and performed an internal review on chemical purchases to ensure that they are reasonable and the policies and procedures over the control of chemicals are adequate. BUDGET / DELEGATION OF AUTHORITY COMPLIANCE This request complies with authority levels of the Sanitation District’s Delegation of Authority. This item has been budgeted. JDR:LT:MW:lc H:\dept\agenda\Admin Committee\2009\1209\05.LS&L Internal Auditing.doc Form No. DW-102.3 Agenda Report – Board Revised: 09/01/2009 Page 1 ADMINISTRATION COMMITTEE Meeting Date 12/09/09 To Bd. of Dir. AGENDA REPORT Item Number 3 Item Number Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services GENERAL MANAGER'S RECOMMENDATION Approve a one-year extension of the service agreement for External Financial Auditing Services, Specification No. CS-2005-217, with Mayer Hoffman McCann P.C. for the independent financial audit covering fiscal year 2009-10, in an amount not to exceed $56,000. SUMMARY Mayer Hoffman McCann has served as the Sanitation District’s independent financial auditors for the past five years following a comprehensive selection process and the completion of a ten-year auditing service period with Moreland & Associates. Staff has been satisfied with the quality and timeliness of the work performed by Mayer Hoffman McCann and is now recommending that their contract be renewed for an additional year at the same contract amount as negotiated for FY 2008-09. PRIOR COMMITTEE/BOARD ACTIONS In April 2005, the Administration Committee awarded a five-year auditing services contract with Mayer Hoffman McCann (formally known as Conrad & Associates). BUDGET/DELEGATION OF AUTHORITY COMPLIANCE This request complies with authority levels of the Sanitation District’s Delegation of Authority. This item has been budgeted. JDR:LT:MW:lc