EXTERNAL AUDIT CONTRACT WITH 12 COSSOLIAS, WILSON, DOMINGUEZ, AND LEAVITT, CPA S - AUDIT FIRM
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1 COLLEGE OF THE SEQUOIAS COMMUNITY COLLEGE DISTRICT Board of Trustees Meeting January 8, 2018 EXTERNAL AUDIT CONTRACT WITH 12 COSSOLIAS, WILSON, DOMINGUEZ, AND LEAVITT, CPA S - AUDIT FIRM Status: Presented by: Action Christine Statton Vice President, Administrative Services Issue The District issued a Request for Proposal seeking external audit services and foundation audit and tax services on November 16, 2017, with proposals due back to the District on December 13, Six audit firms responded to the proposal. Background The District s current audit firm is Vavrinek, Trine, Day and Co., LLP. VTD was the low bidder for the District s Request for Proposal issued most recently in This audit firm has performed the external audit for the District for over twenty years. The current audit partner from VTD has audited the District s finances for a number of years. Similar to the Sarbanes-Oxley act of 2002 which requires rotation of (1) the partner having primary responsibility for the audit and (2) the partner responsible for reviewing the audit every five years for corporations, the Chancellor s Office implemented a six-year rotation effective June for community colleges. As such, the District is due to rotate audit partners soon, whether or not COS selects a different audit firm. There is no requirement to rotate audit firms; however, it is beneficial to seek proposals from potential audit firms at different intervals, and it is a good institutional practice to seek other review and input over District operations when feasible and beneficial. The six proposals for the annual external financial audit, and the annual Foundation audit and Tax Return filings were: TOTAL Brown Armstrong, CPA s 52,500 54,100 55,400 56,800 57, ,400 No current CC Audits, Bakersfield Based Corwe Horwath, LLP 55,000 57,000 59,000 61,000 63, , CC Audits, Sacramento Based Vavrinek, Trine, Day and Co, LLP 53,500 53,500 53,500 55,105 57, , CC Audits, Fresno and LA Based CliftonLarsonAllen, LLP 85,600 88,300 91,100 93,800 96, ,400 9 CC Audits, Glendora Based Harshwal & Co, LLP, CPA s 31,000 31,000 31,000 32,550 32, ,100
2 No CC Audits, very small firm, Oakland Based Cossolisa, Wilson, Dominguez Leavitt CPA s 39,883 40,680 41,493 42,323 43, ,548 8 CC Audits, Excellent References, SD Based The most recent annual audit fee for (VTD) was $50,640, comprised of: District audit fee $40,890 Foundation audit fee and tax return filing $9,750 Administration narrowed the final decision down to two firms: Vavrinek, Trine, Day and Co, LLP (third lowest bid) and Cossolisa, Wilson, Dominguez, Leavitt CPA s (CWDL second lowest bidder). Harshwal & Co, LLP was eliminated from consideration even though they were by far the lowest bidder, due to their not having any Community College Audit experience, and due to the very small size of the firm. The Proposal also had some weaknesses noted. Administrative Services has had extensive discussion with the Fiscal Services department, the President, and with the Foundation office staff. Fiscal Services notes that it is always easier to continue with a current external audit firm, and a District runs the risk of having to train the new audit firm staff, as well as bring the new audit firm up to speed on the District s reporting systems and processes. However, in discussions with the President and with the Foundation Director and staff, it is the general consensus that administration recommends changing audit firms for The Vice President of Administration also contacted six references given by CWDL, and all references were exceptional; much more positive than anticipated, especially for the difficult process of transitioning to a new audit firm. Given this information, and the fact that CWDL, CPA s proposal for five years was $66,000 less, it is recommended that the District select CWDL to perform the necessary external audits, Foundation audits, and file the Foundation Tax Returns over the next five years. The District has been very pleased with the relationship with Vavrinek, Trine, Day, and Company, and truly thanks them for their many years of service. Title 5 section states that arrangements for annual audits for any fiscal year as required by section of the Education Code shall be made final no later than the May 1 preceding that fiscal year end. Recommended Action It is recommended that the Board of Trustees approve the contract agreement with Cossolias, Wilson, Dominguez and Leavitt, Certified Public Accountants for five years, starting with the audit performed for The contract agreement will be fulfilled with the completion of the audit.
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