FROM: Amy McInerny, Chief Financial Officer
SUBJECT: Selection of Accounting Firm to Perform Agreed Upon Procedures for FY 2023-24
RECOMMENDATION:
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Approve the engagement of Brown Armstrong Accountancy Corporation in the sum of $39,800 for agreed upon procedures reports in Fiscal Year 2023-24.
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BACKGROUND:
In June 2023, the Board approved an FY 2023-24 Audit Workplan with three specific areas for Agreed Upon Procedures reports to be prepared by an independent accounting firm or firms. Those reports cover the following areas:
1. Benefits and Customer Service - Death Benefit Processes - Payments to Beneficiaries and Member Death Verification
2. Financial and Investment Operations - Accounts Payable Process
3. Financial and Investment Operations - Payroll Process (SBCERA Employees).
In February 2024, staff released a Request for Proposals (RFP), which was posted on sbcera.org and publicized through social media. The RFP indicated that one or more firms could be selected to perform the three separate reports, and requested that pricing be broken down between the three areas.
SBCERA received two proposals in response to the RFP:
1. Brown Armstrong Accountancy Corporation: $39,800
a. Death Benefits $15,200 145 hours $104.83/hr average
b. Accounts Payable $11,900 115 hours $103.48/hr average
c. Payroll $12,700 125 hours $101.60/hr average
2. TAP Financials, LLP: $168,060
a. Death Benefits $65,220 330 hours $197.64/hr average
b. Accounts Payable $48,080 248 hours $197.90/hr average
c. Payroll $53,760 272 hours $197.65/hr average
Both proposals are in compliance with the requirements of the RFP; both firms are well-qualified to perform the requested agreed upon procedures reports. Given the wide difference in cost between the proposals, staff recommends that Brown Armstrong Accountancy Corporation be selected for all three agreed upon procedures reports.
The death benefits report is a re-test of the report issued in 2022 by Brown Armstrong, which included a number of findings and recommendations for improvements to the process.
Copies of both the Brown Armstrong and TAP Financials proposals are attached as Exhibits A and B, respectively.
COMMITTEE REVIEW:
This item was not reviewed by the Audit Committee. As this would have been the only item on the Audit Committee agenda for March 21, 2024, both the Board Chair and the Audit Committee Chair agreed to advance this item directly to the Board.
BUDGET IMPACT:
Costs for this item are included in the current year administrative budget.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Prudent Fiscal Management
STAFF CONTACT:
Amy McInerny
ATTACHMENTS:
Exhibit A: Proposal from Brown Armstrong Accountancy Corporation
Exhibit B: Proposal from TAP Financials, LLP