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HomeMy WebLinkAboutResolution #5374 - master service agreement and statement of work with CliftonLarsonAllen for certain accounting services RESOLUTION NO. 5374 A RESOLUTION APPROVING A MASTER SERVICES AGREEMENT AND STATEMENT OF WORK WITH CLIFTONLARSONALLEN LLP FOR CERTAIN ACCOUNTING SERVICES WHEREAS, the City of Canton, Illinois (the "City") is in need of accounting, budgeting, financial statement preparation, consulting, and comptroller services for the City (collectively the "Professional Services") to assist the City, City Treasurer and/or Budget Officer; WHEREAS, the Mayor and City Council have determined that it is necessary and in the best interests of the City of Canton for the City to obtain said Professional Services from CliftonLarsonAllen LLP ("CLA"). NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CANTON, ILLINOIS, AS FOLLOWS: 1. The Outsourcing Preparation Statement of Work with CLA, substantially in the form as attached hereto as "Exhibit A," is hereby APPROVED; 2. That the Mayor and/or the City Treasurer are hereby authorized to enter into any and all agreements and execute any other documentation necessary to obtain the Professional Services and in relation to the above-said Statement of Work; 5. That this Resolution shall be in full force and effect immediately upon its passage by the City Council of the City of Canton, Illinois and approval by the Mayor thereof. PASSED by the City Council of the City of Canton, Illinois at a regular meeting this 3`a day of May, 2022, upon a roll call vote as follows: AYES: Aldeiperson Andra Chamberlin, Justin Nelson, John Lovell, Craig West, Angela Hale, Jeff Fritz, Angela Lingenfelter, Greg Gossett NAYS: None ABSENT: None APP OVED: e McDowell, Mayor ATT ST: -� Dian ley- oc , ity,Clerk i i i i I i CliftonLarsonAllen LLP https://www.claconnect.com Outsourcing Preparation Statement of Work Date:April 4, 2022 This agreement constitutes a Statement of Work("SOW")to the Master Service Agreement("MSA")made by and between CliftonLarsonAllen LLP("CLA,""we,""us,"and"our")and City of Canton("you"and "your")dated July 15, 2021 or any superseding MSA.The purpose of this SOW is to outline certain services you wish us to perform in connection with that agreement. Scope of professional services Adam Pulley,CPA is responsible for the performance of the preparation engagement and other services identified in this agreement.He may be assisted by one or more of our authorized signers in the performance of the preparation engagement. Beka Schultz is responsible for the daily activities of the engagement. Ongoing normal accounting services: • Outsourced accounting functions - Reconcile bank accounts monthly and prepare journal entries for ledger fund balances - Prepare departmental allocations and closing entries as outlined per budget - Prepare various city-wide invoices,license renewals,and intergovernmental billings, utilizing the City's Springbrook system,which is maintained by Springbrook - Prepare financial statement information and present to management and council/ oversight individual - Attend council meetings upon request and availability - Develop and track key metrics as requested and review periodically with council/oversight individual - Import mapped payroll file into accounting software for ledger reconciliation Page 1 of 8 i i Internal staff are responsible for processing payroll and related compliance,as well as employee benefit invoices and payment reconciliations Document accounting process and procedures accordingly Update accounting software for various accounts and software dimensions as needed Continue process and procedure improvement implementation to maintain an internal control environment recommended as a result of the annual financial statement audit Report and manage cash flows for funds and related savings accounts Gather information necessary to facilitate the entity's annual financial statement audit Assist with bank communications and negotiations Assist with group insurance plan and city-wide insurance communication and negotiations Assist with budgeting services as approved • We will prepare federal Form 1099 and Form 1096 from information provided by you and transmit federal Form 1099 to federal and state taxing authorities on your behalf,if requested • Our 1099 preparation services could include electronically transmitting 10 99 forms to federal and state taxing authorities on your behalf CLA shall be authorized to the following cash access services: • Prepare checks and/or electronic funds transfers(EFT,ACH,wire,etc.)to be drawn upon your bank account(s),upon request or in the absence of the Treasurer(time to be separately billed if recurring or based on volume of transactions). • Take deposits to the bank that include cash at the discretion of management or council. Preparation services-financial statements You have requested that we prepare the bi-monthly Comptroller Report of theCity of Canton,which comprise the financial information identified below. Financial statements: Fund trending for the fiscal year Budget vs.Actual comparisons for various funds Various interfund balances and external receivables/liabilities I Page 2 of 8 i The financial statements will not include the statement of cash flows and the disclosures ordinarily included in financial information prepared in accordance with the regulatory basis of accounting. Preparation services—prospective financial information(i.e.,unexpired budget information) You have requested that we prepare the financial forecast of City of Canton which comprises the forecasted financial information identified below. Financial statements: Fund trending for the fiscal year Budget vs.Actual comparisons for various funds Various interfund balances and external receivables/liabilities A financial forecast presents,to the best of management's knowledge and belief,the entity's expected financial position,results of operations,and cash flows for the forecast period.It is based on management's assumptions reflecting conditions it expects to exist and the course of action it expects to take during the forecast period. The financial forecast will omit substantially all of the disclosures required by the guidelines for presentation of a financial forecast established by the American Institute of Certified Public Accountants (AICPA presentation guidelines)other than those related to the significant assumptions.The financial forecast will identify this departure. Management has requested the financial forecast be prepared without substantially all disclosures,which is a departure from the AICPA presentation guidelines.The financial forecast will identify these departures. The supplementary information accompanying the financial forecast will be prepared and presented for purposes of additional analysis and is not a required part of the basic financial forecast. References to financial statements in the remainder of this SOW are to be taken as a reference to also include the prospective financial information,where applicable. Engagement objectives and our responsibilities The objective of our engagement is to prepare financial statements in accordance with the financial reporting framework based on information provided by you and information generated through our outsourced accounting services. The objective of our engagement is also to prepare a financial forecast in accordance with the guidelines for the presentation of a financial forecast established by the American Institute of Certified Public Accountants(AICPA presentation guidelines)based on information provided by you. We will conduct our preparation engagement in accordance with Statements on Standards for Accounting and Review Services(SSARSs)promulgated by the Accounting and Review Services Committee of the Page 3 of 8 American Institute of Certified Public Accountants(AICPA)and comply with the AICPA's Code of Professional Conduct,including the ethical principles of integrity,objectivity,professional competence,and due care. Engagement limitations We are not required to,and will not,verify the accuracy or completeness of the information you will provide to us for the engagement or otherwise gather evidence for the purpose of expressing an opinion or a conclusion.Accordingly,we will not express an opinion,a conclusion,nor provide any assurance on the financial statements and the supplementary information. Our engagement cannot be relied upon to identify or disclose any financial statement misstatements, including those caused by fraud or error,or to identify or disclose any wrongdoing within the entity or noncompliance with laws and regulations.We have no responsibility to identify and communicate deficiencies in your internal control as part of this engagement.You agree that we shall not be responsible for any misstatements in the entity's financial statements that we may not identify as a result of misrepresentations made to us by you. No assurance statement The financial statements will not be accompanied by a report.However,management agrees that each page of the financial statements will include a statement clearly indicating that no assurance is provided on them. There will usually be differences between the forecasted and actual results,because events and circumstances frequently do not occur as expected,and those differences may be material.Management agrees that the introduction to the summary of the significant assumptions will include a caveat to that effect. Our firm cannot be associated with any financial statements you file with the U.S.Securities and Exchange Commission(SEC)and accordingly,the name of our firm cannot be included in any of City of Canton's public filings. Management responsibilities The engagement to be performed is conducted on the basis that you(management and,when appropriate, those charged with governance)acknowledge and understand that our role is to prepare financial statements in accordance with the financial reporting framework. We are required by professional standards to identify management's responsibilities in this agreement. Those standards require that you acknowledge and understand that management,and those charged with governance,as appropriate,have the following overall responsibilities that are fundamental to our undertaking the engagement to prepare your financial statements in accordance with SSARSs: a• The selection of the financial reporting framework to be applied in the preparation of the financial statements and the use of the AICPA presentation guidelines in the preparation of the Page 4 of 8 i forecast. b. The design,implementation,and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error,and the development of assumptions that reflect your plans and expectations regarding events and circumstances for the forecast period. C. The prevention and detection of fraud. d. To ensure that the entity complies with the laws and regulations applicable to its activities. e. The accuracy and completeness of the records,documents,explanations,and other information, including significant judgments,you provide to us for the engagement to prepare financial statements. f• To provide us with the following: L Access to all information relevant to the preparation and fair presentation of the financial statements,such as records,documentation,and other matters. ii. Additional information that may be requested for the purpose of the engagement. Unrestricted access to persons within the entity with whom we determine it necessary to communicate. We understand that you are engaging us to make recommendations and perform services to help you meet your responsibilities relevant to the preparation and fair presentation of the financial statements(items a and b). The AICPA presentation guidelines require a summary of significant assumptions.We will assist management in the development of the assumptions for the financial forecast;however,management acknowledges that it is responsible for the assumptions(including review and approval of the assumptions) and for the preparation and fair presentation of a financial forecast that presents,to the best of management's knowledge and belief,the entity's expected financial position,results of operations,and cash flows for the financial forecast period,based on management's assumptions and reflecting conditions management expects to exist and the course of action management expects to take during the forecast period assuming the hypothetical assumptions. For all accounting services we may provide to you,including the preparation of your financial statements, management agrees to assume all management responsibilities;oversee the services evaluate the adequacy and results of the services;and accept responsibility for the results of the services. Management responsibilities relevant to CLA's access to your cash Someone with management authority is responsible for the processes below.All approvals listed must be documented in writing,either electronically or manually: Page 5 of 8 i • Approve all invoices and check payments. • Approve all new,vendors and customers added to the accounting system. • Approve all electronic funds transfers(EFT,ACH,wire,etc.)to external parties. • Approve all customer and vendor credit memos and accounts receivable amounts written off. • Review and approve all bank statements and affiliated monthly reconciliations. • All requests or approvals received via email,text or IM will be confirmed via phone. Fees,time estimates,and terms Time estimates: Ongoing normal accounting services: Services performed by Time estimate Staff/consulting controller 80 hours per month Related to the budget 100 hours per year Principal/Quality Assurance As requested or required The professional fees(guaranteed through April 30, 2023)for these services are as follows: Item Fee Ongoing Normal Accounting Services $7,100 per month Budget Services $17,000 estimated per year(billed on project basis) Included in the fixed fees are meetings and phone calls to discuss operations,business matters,and accounting matters of the entity.While the fixed fees entitle the entity to consultations with us,if organizational conditions change or the scope of the work requires substantial additional effort beyond what has been defined in this agreement,CLA agrees to perform the additional work at a mutually agreed upon price. Page 6 of 8 i I Out-of-pocket expenses such as out-of-town travel,meals,and lodging will be billed at cost and are not included in the fees quoted above.We will also add a technology and client support fee of five percent(5%) of all professional fees billed.The fee estimates are based on anticipated cooperation from your personnel and their assistance with preparing requested schedules.If the requested items are not available on the dates required or are not accurate,the estimated fees will likely be higher.If unexpected circumstances require significant additional time,we will advise you before undertaking work that would require a substantial increase in the fee estimate. Use of financial statements The financial statements we prepare are for management's use.If you intend to reproduce and publish the financial statements,they must be reproduced in their entirety. Agreement We appreciate the opportunity to provide the services described in this SOW related to the MSA.All terms and provisions of the MSA shall apply to these services.If you agree with the terms of this SOW,please sign below and return a signed copy to us to indicate your acknowledgment and understanding of,and agreement with,this SOW. CliftonLarsonAllen LLP Adam Pulley,CPA Principal 309-495-8767 adam.pulley@claconnect.com Response This SOW correctly sets forth the understanding of City of Canton and is accepted by: I Page 7 of 8 i CLA Client ORG: CliftonLarsonAllen LLP ORG: City of Canton NAME: Adam Pulley,CPA NAME: y Mal �Iow� UL TITLE: Principal TITLE: y(/ SIGN: �l�"' l SIGN: DATE: April 4,2022 DATE: Page 8 of 8 I CliftonLarsonAllen LLP https://www.claconnect.com Outsourcing Preparation Statement of Work Date:April 4,2022 This agreement constitutes a Statement of Work("SOW")to the Master Service Agreement("MSA')made by and between CliftonLarsonAllen LLP("CLA,""we,""us,"and"our")and City of Canton("you"and "your")dated July 15, 2021 or any superseding MSA.The purpose of this SOW is to outline certain services you wish us to perform in connection with that agreement. Scope of professional services Adam Pulley,CPA is responsible for the performance of the preparation engagement and other services identified in this agreement.He may be assisted by one or more of our authorized signers in the performance of the preparation engagement. Beka Schultz is responsible for the daily activities of the engagement. Ongoing normal accounting services: • Outsourced accounting functions - Reconcile bank accounts monthly and prepare journal entries for ledger fund balances - Prepare departmental allocations and closing entries as outlined per budget - Prepare various city-wide invoices,license renewals,and intergovernmental billings, utilizing the City's Springbrook system,which is maintained by Springbrook Prepare financial statement information and present to management and council/ oversight individual - Attend council meetings upon request and availability - Develop and track key metrics as requested and review periodically with council/oversight individual - Import mapped payroll file into accounting software for.ledger reconciliation Page 1 of 8 Internal staff are responsible for processing payroll and related compliance,as well as employee benefit invoices and payment reconciliations Document accounting process and procedures accordingly Update accounting software for various accounts and software dimensions as needed Continue process and procedure improvement implementation to maintain an internal control environment recommended as a result of the annual financial statement audit Report and manage cash flows for funds and related savings accounts Gather information necessary to facilitate the entity's annual financial statement audit Assist with bank communications and negotiations Assist with group insurance plan and city-wide insurance communication and negotiations Assist with budgeting services as approved • We will prepare federal Form 1099 and Form 1096 from information provided by you and transmit federal Form 1099 to federal and state taxing authorities on your behalf,if requested • Our 1099 preparation services could include electronically transmitting 1099 forms to federal and state taxing authorities on your behalf CLA shall be authorized to the following cash access services: • Prepare checks and/or electronic funds transfers(EFT,ACH,wire,etc.)to be drawn upon your bank account(s),upon request or in the absence of the Treasurer(time to be separately billed if recurring or based on volume of transactions). • Take deposits to the bank that include cash at the discretion of management or council. Preparation services-financial statements You have requested that we prepare the bi-monthly Comptroller Report of theCity of Canton,which comprise the financial information identified below. Financial statements: Fund trending for the fiscal year Budget vs.Actual comparisons for various funds Various interfund balances and external receivables/liabilities Page 2 of 8 The financial statements will not include the statement of cash flows and the disclosures ordinarily included in financial information prepared in accordance with the regulatory basis of accounting. Preparation services—prospective financial information(i.e.,unexpired budget information) You have requested that we prepare the financial forecast of City of Canton which comprises the forecasted financial information identified below. Financial statements: Fund trending for the fiscal year Budget vs.Actual comparisons for various funds Various interfund balances and external receivables/liabilities A financial forecast presents,to the best of management's knowledge and belief,the entity's expected financial position,results of operations,and cash flows for the forecast period.It is based on management's assumptions reflecting conditions it expects to exist and the course of action it expects to take during the forecast period. The financial forecast will omit substantially all of the disclosures required by the guidelines for presentation of a financial forecast established by the American Institute of Certified Public Accountants (AICPA presentation guidelines)other than those related to the significant assumptions.The financial forecast will identify this departure. Management has requested the financial forecast be prepared without substantially all disclosures,which is a departure from the AICPA presentation guidelines.The financial forecast will identify these departures. The supplementary information accompanying the financial forecast will be prepared and presented for purposes of additional analysis and is not a required part of the basic financial forecast. References to financial statements in the remainder of this SOW are to be taken as a reference to also include the prospective financial information,where applicable. Engagement objectives and our responsibilities The objective of our engagement is to prepare financial statements in accordance with the financial reporting framework based on information provided by you and information generated through our outsourced accounting services. The objective of our engagement is also to prepare a financial forecast in accordance with the guidelines for the presentation of a financial forecast established by the American Institute of Certified Public Accountants(AICPA presentation guidelines)based on information provided by you. We will conduct our preparation engagement in accordance with Statements on Standards for Accounting and Review Services(SSARSs)promulgated by the Accounting and Review Services Committee of the Page 3 of 8 American Institute of Certified Public Accountants(AICPA)and comply with the AICPA's Code of Professional Conduct,including the ethical principles of integrity,objectivity,professional competence,and due care. Engagement limitations We are not required to,and will not,verify the accuracy or completeness of the information you will provide to us for the engagement or otherwise gather evidence for the purpose of expressing an opinion or a conclusion.Accordingly,we will not express an opinion,a conclusion,nor provide any assurance on the financial statements and the supplementary information. Our engagement cannot be relied upon to identify or disclose any financial statement misstatements, including those caused by fraud or error,or to identify or disclose any wrongdoing within the entity or noncompliance with laws and regulations.We have no responsibility to identify and communicate deficiencies in your internal control as part of this engagement.You agree that we shall not be responsible for any misstatements in the entity's financial statements that we may not identify as a result of misrepresentations made to us by you. No assurance statement The financial statements will not be accompanied by a report.However,management agrees that each page of the financial statements will include a statement clearly indicating that no assurance is provided on them. There will usually be differences between the forecasted and actual results,because events and circumstances frequently do not occur as expected,and those differences may be material.Management agrees that the introduction to the summary of the significant assumptions will include a caveat to that effect. Our firm cannot be associated with any financial statements you file with the U.S.Securities and Exchange Commission(SEC)and accordingly,the name of our firm cannot be included in any of City of Canton's public filings. Management responsibilities The engagement to be performed is conducted on the basis that you(management and,when appropriate, those charged with governance)acknowledge and understand that our role is to prepare financial statements in accordance with the financial reporting framework. We are required by professional standards to identify management's responsibilities in this agreement. Those standards require that you acknowledge and understand that management,and those charged with governance,as appropriate,have the following overall responsibilities that are fundamental to our undertaking the engagement to prepare your financial statements in accordance with SSARSs: a• The selection of the financial reporting framework to be applied in the preparation of the financial statements and the use of the AICPA presentation guidelines in the preparation of the Page 4 of 8 forecast. b. The design,implementation,and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error,and the development of assumptions that reflect your plans and expectations regarding events and circumstances for the forecast period. C. The prevention and detection of fraud. d. To ensure that the entity complies with the laws and regulations applicable to its activities. e. The accuracy and completeness of the records,documents,explanations,and other information, including significant judgments,you provide to us for the engagement to prepare financial statements. f• To provide us with the following: i• Access to all information relevant to the preparation and fair presentation of the financial statements,such as records,documentation,and other matters. ii. Additional information that may be requested for the purpose of the engagement. Unrestricted access to persons within the entity with whom we determine it necessary to communicate. We understand that you are engaging us to make recommendations and perform services to help you meet your responsibilities relevant to the preparation and fair presentation of the financial statements(items a and b). The AICPA presentation guidelines require a summary of significant assumptions.We will assist management in the development of the assumptions for the financial forecast;however,management acknowledges that it is responsible for the assumptions(including review and approval of the assumptions) and for the preparation and fair presentation of a financial forecast that presents,to the best of management's knowledge and belief,the entity's expected financial position,results of operations,and cash flows for the financial forecast period,based on management's assumptions and reflecting conditions management expects to exist and the course of action management expects to take during the forecast period assuming the hypothetical assumptions. For all accounting services we may provide to you,including the preparation of your financial statements, management agrees to assume all management responsibilities;oversee the services evaluate the adequacy and results of the services;and accept responsibility for the results of the services. Management responsibilities relevant to CLA's access to your cash Someone with management authority is responsible for the processes below.All approvals listed must be documented in writing,either electronically or manually: Page 5 of 8 • Approve all invoices and check payments. • Approve all new vendors and customers added to the accounting system. • Approve all electronic funds transfers(EFT,ACH,wire,etc.)to external parties. • Approve all customer and vendor credit memos and accounts receivable amounts written off. • Review and approve all bank statements and affiliated monthly reconciliations. • All requests or approvals received via email,text or IM will be confirmed via phone. Fees,time estimates,and terms Time estimates: Ongoing normal accounting services: Services performed by Time estimate Staff/consulting controller 80 hours per month Related to the budget 100 hours per year Principal/Quality Assurance As requested or required The professional fees(guaranteed through April 30,2023)for these services are as follows: Item Fee Ongoing Normal Accounting Services $7,100 per month Budget Services $17,000 estimated per year(billed on project basis) Included in the fixed fees are meetings and phone calls to discuss operations,business matters,and accounting matters of the entity.While the fixed fees entitle the entity to consultations with us,if organizational conditions change or the scope of the work requires substantial additional effort beyond what has been defined in this agreement,CLA agrees to perform the additional work at a mutually agreed upon price. Page 6 of 8 Out-of-pocket expenses such as out-of-town travel,meals,and lodging will be billed at cost and are not included in the fees quoted above.We will also add a technology and client support fee of five percent(5%) of all professional fees billed.The fee estimates are based on anticipated cooperation from your personnel and their assistance with preparing requested schedules.If the requested items are not available on the dates required or are not accurate,the estimated fees will likely be higher.If unexpected circumstances require significant additional time,we will advise you before undertaking work that would require a substantial increase in the fee estimate. Use of financial statements The financial statements we prepare are for management's use.If you intend to reproduce and publish the financial statements,they must be reproduced in their entirety. Agreement We appreciate the opportunity to provide the services described in this SOW related to the MSA.All terms and provisions of the MSA shall apply to these services.If you agree with the terms of this SOW,please sign below and return a signed copy to us to indicate your acknowledgment and understanding of,and agreement with,this SOW. CliftonLarsonAllen LLP Adam Pulley,CPA Principal 309-495-8767 adam.pulley@claconnect.com Response This SOW correctly sets forth the understanding of City of Canton and is accepted by: Page 7 of 8 CLA Client ORG: CliftonLarsonAllen LLP ORG: City of Canton NAME: Adam Pulley,CPA NAME: TITLE: Principal TITLE: SIGN: Gue� SIGN: DATE: April 4,2022 DATE: J` /DATE: / v��� Page 8 of 8