DRAFT AUDITOR SERVICES CONTRACT AGREEMENT FOR AUDITOR SERVICES

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1 ATTACHMENT 1 DRAFT AUDITOR SERVICES CONTRACT AGREEMENT FOR AUDITOR SERVICES THIS AGREEMENT, made and entered into on XXX XX, 2013, by and between the ORANGE COUNTY VECTOR CONTROL DISTRICT, (hereinafter called "THE DISTRICT") and XXXXXXXX of Certified Public Accountants (hereinafter called "ACCOUNTANTS ): The parties do agree as follows: 1. Recitals WITNESSETH: This agreement is made and entered into with respect to the following facts: (c) That the DISTRICT is desirous of obtaining the services of qualified certified public accountants for the purpose of conducting annual audits of its financial books and records; and That ACCOUNTANTS have demonstrated their qualifications to perform such services, and have agreed to perform such audit services, subject to the provisions of this Agreement; and That the legislative body of the DISTRICT has heretofore determined that the public interest, convenience and necessity require the execution of this Agreement. 2. Services As more fully described in the ACCOUNTANTS Proposal dated XXXX XX, 2013 (Attachment A), the DISTRICT hereby engages ACCOUNTANTS to perform audits and examinations of the accounting books and records of the DISTRICT for the fiscal years ending on June 30, 2013 through 2015, and with an option for each of the two subsequent fiscal years. ACCOUNTANTS shall conduct an examination of the DISTRICT's financial statements for compliance with Accounting Principles Generally Accepted in the United States of America, as established by the Governmental Accounting Standards board (GASB), each such fiscal year. The audits will be conducted in accordance with generally

2 accepted auditing standards as established by the American Institute of Certified Public Accountants (AICPA), and shall include such other auditing procedures as considered necessary in the circumstances. It is understood by all parties that such audit procedures are not primarily designed to and cannot be relied upon to disclose defalcations or other irregularities. Reliance for the prevention or detection of fraud, defalcations or other irregularities should be placed principally upon an adequate internal accounting system with appropriate and functioning internal controls. It is the responsibility of management of each entity to establish and maintain such an internal control system; however, ACCOUNTANT will report on internal control weaknesses as discussed in Section 2 (c) of this agreement. (c) (d) ACCOUNTANTS shall submit a report of their examination of the financial statements for each such fiscal year, which shall include such supplementary financial statements, notes to the financial statements and an opinion as to the fairness of their presentation in conformity with Accounting Principles Generally Accepted in the United States of America, applicable to the various funds or state the reasons for any exceptions to said principles. In addition to submitting a report on the examination of the financial statements of the DISTRICT, ACCOUNTANTS shall submit a report on internal controls over financial reporting and on compliance and other matters based on an audit of the financial statements performed in accordance with Government Auditing Standards. In the required report on internal controls, the auditor shall communicate any reportable conditions found during the audit. A reportable condition shall be defined as a significant deficiency in the design or operation of the internal control structure, which could adversely affect the organization s ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. Reportable conditions that are also material weaknesses shall be identified as such in the report. Non-reportable conditions discovered by the auditors shall be reported in a separate letter to the Board of Trustees, which shall be referred to in the report on internal controls. This management letter shall summarize audit findings and recommendations, as affecting the financial statements, internal controls, accounting systems, and legal compliance. Communications shall be in compliance with Statement of Auditing Standards No

3 3. Compensation All fees for the DISTRICT shall be based on rates as specified in a written proposal to the DISTRICT dated XXXX XX, 2013, which is incorporated herein (see Attachment A). The fees due hereunder shall be paid in installments during each fiscal year, as work is done by ACCOUNTANTS with the remaining balance (10% retention) due upon submission of the fiscal year-end audit report(s). Should operation of the DISTRICT or reporting requirements change from those present at XXXX XX, 2013, it is agreed that such additional work shall be billed at the rates contained in ACCOUNTANTS proposal, page XX (see Attachment A). Such extra work will not commence without the approval of the DISTRICT and an Addendum to this contract. 4. Additional DISTRICT Operations Added Should the DISTRICT require a Single Audit, acquire or bring into its operations additional facilities, provide grant funds to a sub-grantee, or acquire accounting control of special districts which are not now a part of its accounting activities the audit fees related to such additional work are subject to further negotiation. 5. The DISTRICT Facilities The DISTRICT shall not be required to furnish any office facilities to ACCOUNTANTS, but shall make available to ACCOUNTANTS working space for such time as ACCOUNTANTS or its employees may be required to work at the DISTRICT. The DISTRICT personnel shall furnish minimal assistance, as determined by management, to ACCOUNTANTS, in connection with the preparation of necessary schedules and the production of underlying supporting documents for ACCOUNTANTS inspection and auditing. 6. Reports ACCOUNTANTS shall furnish to DISTRICT twenty (20) copies of the audited financial statements. 7. Retention of Working Papers As required, ACCOUNTANTS will retain all audit working papers for a period of at least five (5) years and the relevant federal agencies can have access to such papers, as is required by law, upon request. During the term of the agreement and within five (5) years of termination, the DISTRICT or its agent shall have the right to inspect all audit work papers upon written request. 3

4 8. Termination THE DISTRICT and ACCOUNTANTS shall have the right to terminate this Agreement, at any time, upon fifteen (15) days written notice to the other party. In event of such termination, ACCOUNTANTS shall be entitled to compensation for services rendered through and including the date of giving of notice of termination. ACCOUNTANTS shall not be entitled to any compensation for any services rendered by them after the giving of notice of such termination. ACCOUNTANTS shall forthwith provide THE DISTRICT with its usable work product in a form that THE DISTRICT may use. Should this information be in electronic format, ACCOUNTANTS shall cooperate in providing access to such software and files as are reasonably necessary to transfer the information. 9. Notices Notice given pursuant to this Agreement shall be served upon the person to be notified by personal service upon such party, or by the deposit of such written notice in the care and custody of the United States Postal Service, postage prepaid, addressed as follows: THE DISTRICT: ORANGE COUNTY VECTOR CONTROL DISTRICT Attn: District Manager Garden Grove Boulevard Garden Grove, CA ACCOUNTANTS: XXXXXXXXXXXX XXXXXXXXXXXX Notices hereunder shall be deemed to have been given pursuant to this paragraph on the day of personal service thereof upon the party to be notified, or as of the second (2 nd ) day following the deposit of the same in the care and custody of the United States Postal Service. 10. Compliance with Laws In the performance of the work required by this Agreement, ACCOUNTANTS shall abide by and conform to any and all applicable laws of the United States, State of California and ordinances, regulations and policies of the DISTRICT. 4

5 11. Completion of Work The work undertaken pursuant to this Agreement, including issuance of appropriate reports shall be completed with due diligence and as quickly as possible upon notification that the DISTRICT's books are ready for audit. 12. Liability Indemnification ACCOUNTANTS shall defend, indemnify and save harmless the DISTRICT, its elected and appointed officials, officers, agents and employees from all liability from loss damage or injury to persons or property, including the payment by ACCOUNTANTS of any and all legal costs and attorney's fees, in any manner arising out of any negligent or intentional or willful acts or omissions of ACCOUNTANTS in performance of this Agreement, including but not limited to, all consequential damages to the maximum extent permitted by law. 13. Insurance With respect to performance of work under this agreement, ACCOUNTANTS shall maintain and shall require all of its subcontractors to maintain insurance as described below: Workers' compensation insurance with statutory limits, and employer's liability insurance with limits of not less than $1,000,000 per accident. Upon beginning work, ACCOUNTANTS shall furnish to THE DISTRICT a Certificate of Insurance as proof that full Workers' Compensation Insurance has been secured for all persons who may be employed directly or through subcontractors in carrying out the work specified herein, in accordance with the provisions of the laws of the State of California. In accordance with the provisions of California Labor Code, Section 3700, every employer shall secure the payment of employee compensation. ACCOUNTANTS shall, prior to commencing work, sign and file with THE DISTRICT a certification as follows: "I am aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Workers' Compensation or to undertake self-insurance in accordance with the provisions of that Code, and I will comply with such provisions before commencing the performance of the work of this Agreement." Comprehensive general liability insurance with a combined single limit of not less than $1,000,000 per occurrence. The DISTRICT shall be named as additional named insured. A certificate of insurance shall be 5

6 filed with the DISTRICT Administrative Services Department. Such insurance shall include product/completed operations liability, owner's and contractor's protective, blanket contractual liability, personal injury liability, broad form property damage coverage and explosion, collapse and underground hazard coverage. (c) (d) (e) Comprehensive automobile liability insurance with a combined single limit of not less than $1,000,000 per occurrence. Such insurance shall include coverage for owned, hired and non-owned automobiles. Professional liability (errors and omissions) insurance with a limit of not less than $2,000,000. General Insurance Requirements: All insurance required by express provision of this Agreement shall be carried only in responsible insurance companies licensed to do business in the State of California. If ACCOUNTANTS, for any reason, fails to maintain insurance coverage which is required pursuant to this Agreement, the same shall be deemed a material breach of contract. The DISTRICT, at its sole option, may forthwith terminate this Agreement and obtain damages from the ACCOUNTANTS resulting from said breach. Alternatively, the DISTRICT may purchase such required insurance coverage, and may deduct from sums due to ACCOUNTANTS any premium costs advanced by the DISTRICT for such insurance. However, prior to the DISTRICT obtaining such coverage, it must notify ACCOUNTANTS of the breach of contract and afford ACCOUNTANTS reasonable time to acquire the necessary coverage. 14. Nondiscrimination by ACCOUNTANTS ACCOUNTANTS represent and agree that ACCOUNTANTS, its affiliates, subsidiaries, or holding companies do not and will not discriminate against any subcontractor, consultant, employee, or applicant for employment because of race, religion, color, sex, handicap, or national origin. Such nondiscrimination shall include, but not be limited to, the following: employment, upgrading, demotion, transfer, recruitment, recruitment advertising, layoff, termination, rates of pay or other forms of compensation, and selection for training. 6

7 IN WITNESS WHEREOF the parties have caused this Agreement to be executed on the day and year first above written. ORANGE COUNTY VECTOR CONTROL DISTRICT ATTEST: By: By: PRESIDENT, BOARD OF TRUSTEES SECRETARY, BOARD OF TRUSTEES DISTRICT MANAGER DISTRICT COUNSEL ACCOUNTANTS By: 7

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