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HomeMy WebLinkAbout05.L- Finance RESOLUTION (ID # 3990) DOC ID: 3990 H CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION Agreement/Contract From: Nita McKay M/CC Meeting Date: 12/07/2015 Prepared by: Veronica Martinez, (909) 384-5242 Dept: Finance Ward(s): All Subject: Resolution of the Mayor and Common Council of the City of San Bernardino Authorizing the Execution of an Agreement Between the City of San Bernardino and the Pun Group, LLP, Certified Public Accountants, for the Provision of Financial Auditing Services. (#3990) Current Business Registration Certificate: No Financial Impact: The total not to exceed fee for audit services is $329,000 for the financial audit for Fiscal Year 2013-14 and the total not to exceed fee for audit services is $374,000 for the financial audit for Fiscal Year 2014-15. The total contract amount shall not exceed $703,000. There is sufficient funding in the Fiscal Year 2015-16 operating budget for one year's audit serivices. A budget appropriation is required from fund balance in the General Fund to perform the second year audit. Because the prior fiscal year had expenditures for only one audit, there is sufficient fund balance for this budget amendment in Fiscal Year 2015-16. Motion: Adopt the Resolution. BACKGROUND The City's Professional Audit Services Request for Proposal was forwarded to seven professional Certified Public Accounting (CPA) firms on June 27, 2013. Three CPA firms responded. Professional Audit services are to include: • An audit performed in accordance with generally accepted auditing standards; • An independent auditor's report on the fair presentation of the financial statements in conformity with generally accepted accounting principles; • A separate single audit report on grant activity, internal control and compliance with grantor requirements; and • A report on the Appropriations Limit for each fiscal year. The Fiscal Year 2012-13 financial statement audit and Single Audit extended far past the originally estimated completion dates. Since the City needs to have the audits completed before the Plan of Adjustment is approved by the bankruptcy court, staff confirmed with the City Attorney's Office that a full request for proposal is not mandated at this time. The City Attorney's Office confirmed that the top two audit firms that Updated: 12/3/2015 by Jolena E. Grider H I Packet Pg. 177 NOWNEMM 5.L 3990 responded with proposals in 2013 could submit revised proposals to perform the necessary professional auditing services. City staff contacted the top two auditing firms, i.e. The Pun Group and Macias, Gini & O'Connell (MGO), for revised cost proposals, as well as a proposed timeline for completion of the remaining two fiscal year financial statement audits and the remaining one fiscal year Single Audit. The City received a response from The Pun Group, LLP (formerly Pun & McGeady, LLP). MGO has not responded to the City's request for updated audit fee estimates and audit completion timelines. Staff recommends that the Mayor and Common Council approve the execution of the attached professional services agreement with The Pun Group, LLP, for the financial auditing services listed above for the following reasons: • Significant experience and demonstrated professional skills and credentials with performing similar audits, specifically as it relates to experience of the proposed staff (having worked with and audited the City of Stockton for four years; after the bankruptcy filing in completing all audits for Stockton's approved Plan of Adjustment); • Ability of the audit team to meet required deadlines for the City (audit Fiscal Years 2013-14 and 2014-15 simultaneously with completion expected on or before June 30, 2016); • Anticipated su pp ort requirements of City staff; • Technical advice throughout the year on special accounting issues; • Ability to complete Single Audit for Fiscal Year 2013-14 in a timely manner, within the City's deadline; and • Not to exceed (fixed fee) dollar amounts for both fiscal year audits. As required in the original Request for Proposal and the request for updated fee estimates, The Pun Group, LLP has agreed to honor their originally submitted not to exceed fees for Fiscal Years 2013-14 and 2014-15, as follows (see Attachment 2): • FY 2013-14 $329,000 ($374,000 minus $45,000 contracted for Single Audit) • FY 2014-15 $374,000 City Attorney Review: Supporting Documents: Resolution The Pun Group Certified Public Accountants 12-07-15 (DOCX) agrmt 3990 (PDF) The Pun Group - Technical Proposal 2013 (PDF) The Pun Group Revised Proposal(DOCX) Updated: 12/3/2015 by Jolena E. Grider H Packet Pg. 178 RESOLUTION NO. ° 1 J RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF -� 2 SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT 0 3 BETWEEN THE CITY OF SAN BERNARDINO AND THE PUN GROUP, LLP, c9 CERTIFIED PUBLIC ACCOUNTANTS FOR THE PROVISION OF FINANCIAL a 4 AUDITING SERVICES. (D 5 c 6 NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON r COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: ,7 c m m 8 SECTION 1. The City Manager is hereby authorized and directed to execute the m 9 Financial Auditing Service Agreement with The Pun Group, LLP, Certified Public 10 Accountants, a copy of which is attached and incorporated herein as Exhibit "A". Q 11 SECTION 2. The Finance Department is hereby authorized to issue a Purchase a 12 13 Order to The Pun Group, LLP, Certified Public Accountants for Financial Auditing Services 0 14 for an amount not to exceed $329,000 for the Fiscal Year 2013-14 financial audit and an cm N w 15 amount not to exceed $374,000 for the Fiscal Year 2014-15 financial audit. The Finance 16 0 Department is also authorized to amend the Fiscal Year 2015-16 operating budget to include Q 17 18 an appropriation for $374,000 for auditing services from the fund balance of the General a 19 Fund. ' 20 SECTION 3. The authorization granted hereunder shall expire and be void and of no L) sa 21 0 further effect if the Service Agreement for Financial Auditing Services is not completed 0 22 within sixty (60) days following the effective date of the Resolution. 23 24 /// o 25 26 took 27 28 1 a Packet Pg. 179 L 2 a o L 3 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF 4 SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT 5 BETWEEN THE CITY OF SAN BERNARDINO AND THE PUN GROUP, LLP, CERTIFIED PUBLIC ACCOUNTANTS FOR THE PROVISION OF FINANCIAL 6 AUDITING SERVICES. r U 7 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor 8 d and Common Council of the City of San Bernardino at a meeting m r 9 thereof,held on the day of ,2015,by the following vote,to wit: E 10 11 Council Members: AYES NAYS ABSTAIN ABSENT at 0 12 MARQUEZ 13 BARRIOS o 14 N VALDIVIA 15 16 SHORETT c V 17 NICKEL a 18 JOHNSON a 19 MULVIHILL 20 C. 21 0 L 22 Georgeann Hanna, City Clerk c a 23 The foregoing Resolution is hereby approved this day of , 2015. 24 0 25 0 R. Carey Davis, Mayor 26 City of San Bernardino c 27 Approved as to form: _ 28 Gary D. Saenz, City Attorney 2 a Packet Pg: 180 `5La ;I 1 By: J 2 O 3 4 a m 5 c 6 r U ,7 c m a� 8 3 a� 00 9 = E 10 it a 0 12 M LO 13 ti O 14 N N 15 R 16 'O u 17 18 a 19 t 20 CL 21 0 ,L^ V 22 a. 23 24 0 25 N 26 27 E 28 3 a Packet Pg. 181 Exhibit A FINANCIAL AUDITING SERVICES AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND THE PUN GROUP,LLP N v THIS AGREEMENT for Auditing Services is made and entered into on this 7t' day of December,2015 by and between the City of San Bernardino,a charter city("CITY"),and The Pun a Group, LLP, Certified Public Accountants("AUDITORS"). a) WITNESSETH : N S, A. WHEREAS, CITY proposes to have AUDITORS perform the services described herein below; and Q R B. WHEREAS, AUDITORS represent that they have that degree of specialized expertise contemplated within California Government Code,Section 37103,and hold all necessary U. L. licenses to practice and perform the services herein contemplated; and a C. WHEREAS, CITY and AUDITORS desire to contract for financial auditing services as described in the Scope of Services, attached hereto as Exhibit "A"; and 0 D. WHEREAS, no official or employee of CITY has a financial interest, within the 3 provisions of California Government Code, Sections 1090-1092, in the subject matter of this a Agreement. r NOW, THEREFORE, for and in consideration of the mutual covenants and conditions contained herein,the parties hereby agree as follows: c 1.0. SERVICES PROVIDED BY AUDITORS d 1.1. Scope of Services. For the remuneration stipulated,AUDITORS shall provide the m professional services described in the Scope of Services attached hereto as Exhibit "A" and E incorporated herein by this reference. If a conflict arises between the Scope of Services and this Professional Services Agreement (hereinafter "Agreement"), the terms of the Agreement shall a govern. 0 w 1.2. Professional Practices. All professional services to be provided by AUDITORS `== pursuant to this Agreement shall be provided by skilled personnel and in a manner consistent with the standards of care,diligence and skill ordinarily exercised by professional consultants in similar M fields and circumstances in accordance with sound professional practices. AUDITORS also E warrant that they are familiar with all laws that may affect their performance of this Agreement and shall advise CITY of any changes in any laws that may affect AUDITORS' performance of this Agreement. AUDITORS further represents that no CITY employee will provide any services E under this Agreement. 0 w Packet Pg:182 Exhibit A 1.3. Warranty. AUDITORS warrant that they shall perform the services required by this Agreement in compliance with all applicable Federal and California employment laws v including,but not limited to,those laws related to minimum hours and wages; occupational health o and safety; fair employment and employment practices; workers' compensation insurance and safety in employment; and all other Federal, State and local laws and ordinances applicable to the services required under this Agreement. AUDITORS shall indemnify and hold harmless CITY from and against all claims, demands, payments, suits, actions, proceedings, and judgments of every nature and description including reasonable attorneys'fees and costs,presented,brought,or recovered against CITY for, or on account of any liability under any of the above-mentioned laws, arising from or related to AUDITORS 's performance under this Agreement. a 1.4. Non-discrimination. In performing this Agreement,AUDITORS shall not engage in, nor permit its officers, employees or agents to engage in, discrimination in employment of persons because of their race, religion, color, national origin, ancestry, age, mental or physical u. disability, medical condition, marital status, sexual gender or sexual orientation, except as ,o permitted pursuant to Section 12940 of the Government Code. Violation of this provision may J result in the imposition of penalties referred to in Labor Code, Section 1735. a 1.5 Non-Exclusive Agreement. AUDITORS acknowledge that CITY may enter into 0 agreements with other consultants for services similar to the services that are subject to this Agreement or may have its own employees perform services similar to those services a contemplated by this Agreement. c 1.6. Delegation and Assignment. This is a personal service contract, and the duties set forth herein shall not be delegated or assigned to any person or entity without the prior written v consent of CITY. AUDITORS may engage a subcontractor(s) as permitted by law and may employ other personnel to perform services contemplated by this Agreement at AUDITORS's sole cost and expense. m T 1.7 Conflicts of Interest. During the term of this Agreement, AUDITORS shall at all 0 times maintain a duty of loyalty and a fiduciary duty as to the CITY and shall not accept payment from or employment with any person or entity which will constitute a conflict of interest with the a CITY. 0 0 1.8 CITY Business, Certificate. AUDITORS shall obtain and maintain during the term of this Agreement, a valid CITY Business Registration Certificate pursuant to Title 5 of the o City of San Bernardino Municipal Code and any and all other licenses, permits, qualifications, M insurance and approvals of whatever nature that are legally required of AUDITORS to practice E their profession, skill or business. 0 w 2.0. COMPENSATION AND BILLING E 2.1. Compensation.AUDITORS shall be compensated for work performed and the City a 2 Packet Pg.983 Exhibit A LO shall be billed once per month. The total not to exceed fee for audit services is $329,000 for the financial audit for Fiscal Year 2013-14 and the total not to exceed fee for audit services is N $374,000 for the financial audit for Fiscal Year 2014-15. The total contract amount shall not c exceed$703,000. N 2.2. Additional Services. AUDITORS shall not receive compensation for any services provided outside the Scope of Services unless the CITY, prior to AUDITORS performing the 0 additional services, approves such additional services in writing. It is specifically understood that oral requests and/or approvals of such additional services or additional compensation shall be barred and are unenforceable. 3 a 2.3. Method of Billing. AUDITORS may submit invoices to CITY for approval. Said invoices shall be based on the total of all AUDITORS's services which have been completed to CITY's sole satisfaction. CITY shall pay AUDITORS 's invoices within forty-five (45) days LL from the date CITY receives said invoices. The invoices shall describe in detail, the services 0 performed and the associated time for completion. Any additional services approved and a performed pursuant to this Agreement shall be designated as "Additional Services" and shall identify the number of the authorized change order,where applicable,on all invoices. ; 0 L 2.4. Records and Audits. Records of AUDITORS's services relating to this Agreement c shall be maintained in accordance with generally accepted auditing standards and shall be made a. available to CITY for inspection and/or audit at mutually convenient times for a period of three(3) years from the Effective Date. _ 3.0. TERM AND NOTIFICATION. c 3.1. Term. This Agreement shall commence on the Effective Date and continue through the completion of the Fiscal Years 2013-14 and 2014-15 financial audits, which is m estimated to be completed on or before June 30, 2016, unless the Agreement is previously = terminated as provided for herein. E a) 3.2 Termination. CITY or AUDITORS may terminate the services provided under a Section 1.1 of this Agreement upon thirty(30)days written notice to the other parry. In the event of termination, AUDITORS shall be paid the reasonable value of services rendered to the date of termination. 0 o� 3.3 Documents. In the event of termination of this Agreement, all documents M prepared by AUDITORS in their performance of this Agreement shall be delivered to the CITY E within ten (10) days of delivery of termination notice to AUDITORS,at no cost to CITY. Any use of uncompleted documents without specific written authorization from AUDITORS shall be at CITY's sole risk and without liability or legal expense to AUDITORS. E a 3 Packet Pg. 184 Exhibit A LO 4.0. INSURANCE N 0 4.1. Minimum Scope and Limits of Insurance. AUDITORS shall obtain and maintain >_ during the term of this Agreement all of the following insurance coverages: U. (a) Commercial general liability, including premises-operations, N products/completed operations, broad form property damage, blanket contractual liability, independent contractors,personal injury with a policy limit of not less than One Million Dollars($1,000,000.00),combined single a limits,per occurrence and aggregate. (b) Automobile liability for owned vehicles, hired, and non-owned vehicles, with a policy limit of not less than One Million Dollars ($1,000,000.00), LL combined single limits,per occurrence and aggregate. a: (c) Workers' compensation insurance as required by the State of California. - 0 4.2. Endorsements. The commercial general liability insurance policy shall contain or be endorsed to contain the following provisions: a (a) Additional insureds: "The City of San Bernardino and its elected and r appointed boards, officers, agents, and employees are additional insureds c with respect to this subject project and contract with City." U (b) Notice: "Said policy shall not terminate,nor shall it be materially changed or cancelled, nor the coverage reduced, until thirty (30) days after written 3 notice is given to City." 0 ca « r. (c) Other insurance: "Any other insurance maintained by the City of San E Bernardino shall be excess and not contributing with the insurance provided by this policy." 4.3. Certificates of Insurance. AUDITORS shall provide to CITY certificates of o insurance showing the insurance coverages and required endorsements described above, in a form V and content approved by CITY,prior to performing any services under this Agreement. M 4.4. Non-limiting. Nothing in this Section shall be construed as limiting in any way, E the indemnification provision contained in this Agreement, or the extent to which AUDITORS may be held responsible for payments of damages to persons or property. a� E s « ' a 4 Packet Pg:'185 ; Exhibit A T 5.0. GENERAL PROVISIONS N T 0 5.1. Entire Agreement: This Agreement constitutes the entire Agreement between the parties with respect to any matter referenced herein and supersedes any and all other prior writings and oral negotiations. This Agreement may be modified only in writing,and signed by the parties in interest at the time of such modification. The terms of this Agreement shall prevail over any N inconsistent provision in any other contract document appurtenant hereto, including exhibits to a, this Agreement. w 5.2. Notices. Any notices, documents, correspondence or other communications Q concerning this Agreement or the work hereunder may be provided by personal delivery,facsimile or mail and shall be addressed as set forth below. Such communication shall be deemed served or = delivered: a) at the time of delivery if such communication is sent by personal delivery; b) at the U- time of transmission if such communication is sent by facsimile; and c) 48 hours after deposit in the U.S. Mail as reflected by the official U.S. postmark if such communication is sent through a regular United States mail. CL 3 IF TO CONSULTANT: IF TO CITY: P c Kenneth H. Pun, CPA, CGMA City Manager a The Pun Group, LLP City of San Bernardino 200 E. Sandpointe Ave., Suite 600 300 North"D"Street Santa Ana, CA 92707 San Bernardino, CA 92418 Telephone(949) 777-8801 Telephone: (909) 384-5122 Facsimile: (949) 777-8850 Facsimile: (909) 384-5138 o� 3 m m 5.3. Attorneys' Fees. In the event that litigation is brought by any party in connection with this Agreement, the prevailing party shall be entitled to recover from the opposing party all E costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party in the d exercise of any of its rights or remedies hereunder or the enforcement of any of the terms, Q conditions, or provisions hereof. The costs, salary and expenses of the City Attorney and o members of his office in enforcing this contract on behalf of the CITY shall be considered as o "attorneys' fees" for the purposes of this Agreement. 0 rn 5.4. Governing Law. This Agreement shall be governed by and construed under the Y laws of the State of California without giving effect to that body of laws pertaining to conflict of E laws. In the event of any legal action to enforce or interpret this Agreement, the parties hereto agree that the sole and exclusive venue shall be a court of competent jurisdiction located in San c Bernardino County, California. E U 5.5. Assignment. AUDITORS shall not voluntarily or by operation of law assign, a s Packet P6-1861 Exhibit A transfer, sublet or encumber all or any part of AUDITORS's interest in this Agreement without c CITY's prior written consent. Any attempted assignment, transfer, subletting or encumbrance CM shall be void and shall constitute a breach of this Agreement and cause for termination of this a Agreement. Regardless of CITY's consent, no subletting or assignment shall release AUDITORS of AUDITORS's obligation to perform all other obligations to be performed by AUDITORS hereunder for the term of this Agreement. a� 5.6. Indemnification and Hold Harmless. AUDITORS shall protect, defend, indemnify and hold harmless CITY and its elected and appointed officials,boards, commissions, officers, attorneys, agents and employees from any and all claims, losses, demands, suits, Q administrative actions, penalties, liabilities and expenses, including reasonable attorney fees, damage to property or injuries to or death of any person or persons or damages of any nature including, but not limited to, all civil claims or workers' compensation claims arising from or in any way related to AUDITORS's performance under this Agreement,except when caused solely U. by the CITY's negligence. 5.7. Independent Contractor. AUDITORS, at all times while performing under this Agreement,are and shall be acting at all times as an independent contractor and not as an agent or c employee of CITY. AUDITORS shall secure,at their expense,and be responsible for any and all payment of wages, benefits and taxes including, but not limited to, Income Tax, Social Security, State Disability Insurance Compensation, Unemployment Compensation, and other payroll a. deductions for AUDITORS and their officers,agents, and employees,and all business licenses, if any are required, in connection with the services to be performed hereunder. Neither S AUDITORS nor its officers, agents and employees shall be entitled to receive any benefits which employees of CITY are entitled to receive and shall not be entitled to workers' compensation G insurance, unemployment compensation, medical insurance, life insurance, paid vacations, paid holidays, pension, profit sharing or social security on account of AUDITORS and its officers', 3 agents' and employees' work for the CITY. This Agreement does not create the relationship of m agent, servant, employee partnership or joint venture between the CITY and AUDITORS. _ a� E 5.8. Conflict of Interest Disclosure.AUDITORS or its employees may be subject to the a provisions of the California Political Reform Act of 1974 (the "Act"), which (1) requires such a persons to disclose financial interests that may be materially affected by the work performed under c this Agreement, and (2) prohibits such persons from making or participating in making decisions o that will have a foreseeable financial effect on such interest. 0 cn AUDITORS shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for termination of the Agreement by CITY. E as 5.9. Responsibility for Errors. AUDITORS shall be responsible for their work and c results under this Agreement. AUDITORS, when requested, shall furnish clarification and/or E explanation as may be required by the CITY's representative, regarding any services rendered under this Agreement at no additional cost to CITY. In the event that an error or omission Q 6 Packet Pg. 187 Exhibit A attributable to AUDITORS occurs, then AUDITORS shall, at no cost to CITY, provide all other r AUDITORS professional services necessary to rectify and correct the matter to the sole N satisfaction of CITY and to participate in any meeting required with regard to the correction. o N 5.10. Prohibited Employment. AUDITORS shall not employ any current employee of LL CITY to perform the work under this Agreement while this Agreement is in effect. U it a) 5.11. Costs. Each party shall bear its own costs and fees incurred in the preparation and N negotiation of this Agreement and in the performance of its obligations hereunder except as expressly provided herein. a 5.12. No Third Party Beneficiary Rights. This Agreement is entered into for the sole 2 benefit of CITY and AUDITORS and no other parties are intended to be direct or incidental c beneficiaries of this Agreement and no third party shall have any right in, under or to this U- L.o a 5.13. Headings. Paragraphs and subparagraph headings contained in this Agreement are included solely for convenience and are not intended to modify, explain or to be a full or accurate description of the content thereof and shall not in any way affect the meaning or ° interpretation of this Agreement. _ a. 5.14. Amendments. Only a writing executed by all of the parties hereto or their respective successors and assigns may amend this Agreement. � 5.15. Waiver. The delay or failure of either party at any time to require performance or compliance by the other of any of its obligations or agreements shall in no way be deemed a waiver of those rights to require such performance or compliance. No waiver of any provision of this 3 Agreement shall be effective unless in writing and signed by a duly authorized representative of m the party against whom enforcement of a waiver is sought. The waiver of any right or remedy c with respect to any occurrence or event shall not be deemed a waiver of any right or remedy with E respect to any other occurrence or event, nor shall any waiver constitute a continuing waiver. d L 5.16. Severability. If any provision of this Agreement is determined by a court of a competent jurisdiction to be invalid or unenforceable for any reason, such determination shall not affect the validity or enforceability of the remaining terms and provisions hereof or of the offending provision in any other circumstance, and the remaining provisions of this Agreement shall remain in full force and effect. E 5.17. Counterparts. This Agreement maybe executed in one or more counterparts,each of which shall be deemed an original. All counterparts shall be construed together and shall constitute one agreement. w a 7 Packet Pg. 188 Exhibit A 5.18. Corporate Authority.The persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said parties and N that by doing so,the parties hereto are formally bound to the provisions of this Agreement. 0 N LL d U_ G1 w R LL C O Ja. CD O III c 7 d O m m d E L M CD O III M 2 t4 r.+ E U Q Exhibit A FINANCIAL AUDITING SERVICES AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND THE PUN GROUP,LLP N 0 N IN WITNESS WHEREOF,the parties hereto have caused this Agreement to be executed by and LL through their respective authorized officers,as of the date first above written. CITY OF SAN BERNARDINO, AUDITORS A Municipal Corporation c v a Allen J. Parker, City Manager Kenneth H. Pun,CPA, CGMA, Managing Partner LL L 0 W a CL APPROVED AS TO FORM: P ,Ln V Gary D. Saenz, City Attorney a d B : a U c m m m T c m E m as L a 0 M O O O M 2 E L R .F+ d E V w .Id a 9 Packet Pg:,190 5.L.c a� a� W City of I San Bernardino U- L O San Bernardino, California a J J CL 3 O L _ { (RFP F-14-04) n. u - �� Proposal to Provide " Professional Auditing Services rM w For the Years Ending ) June 30, 2013 through 2015 3 (D July 23, 2013 0 L a 0 TECHNICAL PROPOSAL CD M r N f6 N ' "W" S `"° Kenneth H. Pun, CPA, CGMA a Managing Partner v 9 Corporate Park, Suite 130 c erg w', V 6� Irvine, California 92606 CD `I. Phone: (949) 777-8801 ' Email: kpun @pm-Ilp.com o _ a (D !!. c E PUN & M C'GEADY' Q Packet Pg. 191 Q .o coC 3 Q U C fSf C U. I- 0 M. a J J 3 O L C C CL U C m m m C0 c - d E CD a> L Q 0 Q� M M r O N W O C. O L a U r_ L V d F C. C O t9 C 7 a a� F- c CD u Q Packet Pg. 192 City of San Bernardino Proposal to Provide Professional Auditing Services TABLE OF CONTENTS C TransmittalLetter..........................................................................................................................1 a SectionI Independence..............................................................................................................3 Section II - License to Practice in the State of California L Section III- Firm Qualifications and Experience n: • Federal or State Desk Review J M Disciplinary Actions 4 0 • ........................................................................................................... L • Client Training Seminar.....................................................................................................5 • c Most Recent External Quality Control Review 6 n. Section IV- Partner, Supervisory and Staff Qualifications and Experience..................................7 c • Engagement Team Biographies........................................................................................8 • Staff Continuity 9 v • Quality Control System 9 3 Y Affirmative Action • 10 m T c • Engagement Team Resumes 11 a) Section V- Similar Engagements with other Cities or Government Entities................................18 Section VI - Specific Audit Approach..........................................................................................19 Q 0 Section VII - Schedule for the 2013 Fiscal Year Audit................................................................24 M Section VIII - Identification of Anticipated Potential Audit Problems...........................................27 M Section IX-"Prepare by Clients" (PBC) List...............................................................................28 N Benefits of Choosing Pun & McGeady LLP 30 0 ................................................................................ c. ThankYou...................................................................................................................................30 ° a R Appendices a� Professional Audit Services Checklist 33 Bid Contents and Forms 34 L Subcontractors List 36 Non-Conclusion Affidavit.............................................................................................................37 a as Proof of Insurance- Sample.......................................................................................................39 r c m E r Q Packet Pg. 193 5.L.c U C 'a Q V C f0 C_ LL L O a J J C. 7 O V C IL Q� C U c a> m 3 a� m c a� E (D a� L a 0 M M r O N to N O C_ O L a 'c z U d H C_ O C7 C 3 IL t- C m u w a Packet Pg. 194 S.L.c 9 Corporate Park Suite 130 Irvine, California 92606 2 PUN & MCGEADY Phone: (949) 777-8800 CD C.1,edMAI.Ar2xn Mm.andsus.mAatia Fax: (949) 777-8850 tM www.pm-llp.com c Q July 23, 2013 c LL L Ms. Vanessa Sanchez o City of San Bernardino o: 300 N. "D" Street, 4th Floor Finance Department Q. San Bernardino, California, 92418 0 rLn V c Dear Ms. Sanchez: a.. a� We are delighted to present our qualifications and service plan to the City of San Bernardino (the"City") pursuant to your Request for the Professional Auditing Services. As you will see throughout the proposal, Pun & McGeady LLP c (the"Firm") is uniquely suited to serve as the next public accounting firm for the City. This letter hereby acknowledges the Firm's understanding of the work to be performed. We hereby offer our commitment to perform all of the required work, to complete the audit and to issue the necessary auditor's report within the time periods outlined by the City. This belief is based on the following key differentiators: 3 m m 0 1. Our long-standing legacy of serving clients throughout California; _ 2. Our tremendous experience serving governmental entities; and 3. Our risk based audit approach, which focuses on the key areas of risk so that efficiencies are created, resulting in lower overall cost to the City. L of Q As a partner of the Firm, I will be the primary contact for negotiation of the contract. Additionally, I have been c authorized to legally bind the Firm. You may contact me at the following address and phone number: M Mr. Kenneth H. Pun, CPA, CGMA M Managing Partner N 9 Corporate Park, Suite 130 Irvine, California 92606 0 Telephone: (949) 777-8801 C E-mail: kpun @pm-Ilp.com L a. In addition, the following individual is authorized to make representations on the part of the Firm: 2 'c Mr. Gary M. Caporicci, CPA, CGFM, CFF Partner ~ 9 Corporate Park, Suite 130 L Irvine, California 92606 0 Telephone: (949) 777-8802 c9 E-mail: gcaporicci @pm-Ilp.com c a. a� E t Q Packet Pg. 195 5.L.c Ms. Vanessa Sanchez City of San Bernardino Page 2 (D a� The approach to the audit has been designed to meet the audit requirements of the various authorities with the least disruption to the City's office operations. The foundation of the audit approach is based on communication = coupled with a strong knowledge of the City's operations and detailed planning at the initial stages of the audit. Open communication lines with all parties of the Engagement Team and the City's Management and staff a throughout the engagement eliminate "surprises". Initial planning and proper assignment of duties to experienced m personnel provide for an effective and efficient audit process. Consequently, inefficiencies, disruptions, and lack of ._ understanding are kept to a minimum. LL We believe we are the best qualified to perform the audit because our audit staff includes individuals well versed in o governmental auditing and accounting requirements. We have performed auditing and consulting engagements for 0 numerous cities and special districts throughout California. Specifically, we will commit to meeting the City's schedule for completing the audit, are in agreement with the standard City contract language, and can meet the -? minimum insurance requirements. o L The Firm agrees to perform all of the work outlined in the City's Request for Proposal within the time periods established by the City. This proposal fully complies with the requirements as defined in the Request for Proposal, a and this letter and accompanying proposal represents a firm and irrevocable offer for 120 days from the date of (D this proposal to the City. Should you have any questions regarding this proposal or our qualifications, please do not w hesitate to contact us. c R We welcome your inquiries and look forward to further discussions with you. U _ CD Sincerely, 3 a� m E Pun & McGeady LLP a Certified Public Accountants and Business Advisors 0 0 M M r O N f6 N O O_ O L a U V d H Q 3 O t9 _ 7 a d .c c m R w a 2 Packet Pg. 196 S.L.c City of San Bernardino Proposal to Provide Professional Auditing Services a� SECTION I — INDEPENDENCE We would like to inform you of Pun & McGeady LLP's independence with respect to the financial statements of Q the City of San Bernardino (the "City"), the Successor Agency of the City of San Bernardino and the San Bernardino Joint Powers Financing Authority (PFA). In that regards, we confirm that the Firm meets the independence requirements as defined by the U.S. Government Accountability Office's Government Auditing Standards (1994/ December 2011 Revision), and the American Institute of Certified Public Accountants and u. California State Society of Certified Public Accountants as promulgated in various auditing and professional c standards for the City. n: J The Firm had no professional relationships involving the City or any of its component units or oversight units for M the past five (5)years. o '0 V C SECTION II — LICENSE TO PRACTICE IN THE STATE OF CALIFORNIA 5 The Firm and all key professional staff assigned to the City are properly licensed to practice as Certified Public r- Accountants in the State of California and comply with U.S. Government Accountability Office's Government Auditing Standards. to c m m m �t�fc of �alffariria tlrErartmrut of&=ru[rr Afralru y P I Tr life ruin TRIllarl of Arrilttut4utru a j Pµwstiartt b me vrtMrtis}fas a!G'+aaast 1,dNNOn IId rr Husxe*�a arei Prnfesaurrtg Gore,ft�l,rrn,+ PUN&MCGEADY LLP Co ( i � mceM mw tap!a�tc«as a..... ,gym tfrrtifirl Vubttr kcrattutants � n b 9�r.A L11Manw O { In Witness Whe,"I,9.ePrNi0YM+1M 8Mdihf•TiMMIIrMeMttw 1lI10MMYMMMfyYpMi1194MC#Ad]Wr6NCY `� on car.rsrmyofw,ece,MIX // N CL g«� rrn a � � �flecu<ua(<ft• -t. V VAR 7478 irLfIN1AqttQl.S(HIF:41 1 LU r P ,Ln V a as H w c CD E w 3 Packet Pg. 197 City of San Bernardino Proposal to Provide Professional Auditing Services SECTION IV — FIRM QUALIFICATIONS AND EXPERIENCE Y The accounting firm of Pun & McGeady LLP, Certified Public Accountants ("Firm"), a limited liability partnership, Q was founded in 2012. The Firm is a full service accounting firm with 25 professionals providing auditing, accounting, and advisory services to governmental entities with offices located in Irvine, San Diego and Walnut Creek, California. m c U. Although Pun & McGeady LLP is newly formed, the predecessor firm of Caporicci & Larson served government `o agencies since 1989. Further, key management listed in this proposal came from Caporicci & Larson CPA firm a where these individuals provided outstanding services to agencies throughout California. J Our professionals combine practical knowledge with years of experience to provide a level of understanding and o service that is unique among professional service firms. The Firm takes a team approach to every engagement, ensuring the highest degree of technical knowledge, experience and understanding of current issues and c regulatory matters. Hard work and integrity have enabled our clients to succeed and prosper. a m Our Governmental Partners Group including Kenneth H. Pun, Gary M. Caporicci, Jack F. Georger and Maria C. Orellana, has been providing auditing, accounting and advisory services to numerous governmental entities = throughout United States. With over 100 years of combined experience in the governmental industry, we have been a trusted business partner to our clients and have earned our reputation as one of the most respected and socially responsible accounting firms. Our professionals deliver high-value accounting and consulting services v c and are committed to you and the City. The breadth and depth of our expertise enables us to provide our clients CD with business solutions focused on their continued success at fees that represent our outstanding value. Our 3 engagement team members have developed tremendous technical and industry expertise through years of serving governmental clients. In addition to performing the annual financial audits for various governmental m entities, we have performed special studies in financial management, accounting, cost accounting systems analyses, internal audit services and internal controls documentation and testing. Through our participation in E industry associations and activities, we continually learn about significant industry developments and the ;v associated impacts on your management and operations. It is part of our duty to inform you, as well as our Q colleagues within the Firm, about these developments. 0 0 Our Irvine office, located at 9 Corporate Park, Suite 130, Irvine, California, 92606, will perform the requested services for the City. However, additional staff from our San Diego and Walnut Creek's office may also be assigned (at no additional cost to the City)to the engagement. c N Almost any accounting firm can perform the audit; however, a great relationship is one that is personal, adds u1°, value to the process, and one where the client feels better about our firm each day. Significant partner CL involvement and low personnel turnover are keys to our success. a Federal or State Desk Review r There are no federal or state desk reviews or field review of any audits performed by Pun & McGeady or any of its partners, managers or professionals in the past five (5)years. ~ CL 0 Disciplinary Actions c Neither the Firm nor any of its partners, managers or professionals have been the subject of any disciplinary . action taken or pending by State regulatory bodies or professional organizations in the past five (5)years. F C 0 E Q 4 Packet Pg. 198 City of San Bernardino Proposal to Provide Professional Auditing Services Q d Client Training Seminar = The Firm hosts an annual update on recent technical accounting and finance issues affecting the Q governmental arena. This all day session qualifies for 8 hours of CPE under the rules of the State Board of Accountancy and is held in four locations (Clovis, San Diego, Cerritos, and Danville) throughout California. For U the 2013 Client Training Seminar, participants will receive a high-level briefing on various technical matters, including the following: LL L • The latest from the auditing standards, including the new clarity standards; updates to important AICPA — publications; and the 2011 revisions to Government Auditing Standards; o- J • What you need to know as an Auditee for your 2013 Single Audits, including the OMB Circular A-133 —� Compliance Supplement; • New and Anticipated Pronouncements issued by Government Accounting Standards Board (GASB) t0- Statements and discuss future issues under consideration by GASB; J • Implementation of GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, a Deferred Inflows of Resources and Net Position; • Discussion of GASB Statements No. 67 and 68,Accounting and Financial Reporting for Pension Plans; • Overview of the Survey of Cities and Counties; _ sa Importantly, all of our clients are invited to attend FREE OF CHARGE. U c m m 3 w m c STAT6 CD r'r"^M1YgWCa. .. r CD tv ° N RS N k a Q. O L a m � U O ,Ln V CL Q c a� r 5 Packet Pg. 199 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services U) Most Recent External Quality Control Review w La Since the Firm is newly established, we have yet to have our first peer review. However, the Firm's managing a partner, Kenneth H. Pun, was a Partner of Caporicci & Larson. Mr. Pun supervised its Southern California @ practice and heavily participated in the quality control process of C&L. In 2011, a quality review of the policies, practices, and procedures was conducted for C&L. The reviewer made an independent assessment of C&L's = quality control policies and procedures inspected the working papers and reports on a representative sample of E accounting and auditing engagements including governmental clients. C&L's administrative files and records o were also reviewed and our professional personnel interviewed. "- a J J Q. 3 The result of the review was that 0 C&L received a report with a "pass" rating after a thorough study and a. evaluation of C&L's procedures and eCauer��F� work practices. A pass rating r indicates that the auditing practice of = Svslrm Review R<nnrt C&L was suitably designed and �o complied with to provide reasonable assurance that an effective quality v cAPafuccf�uRSOn,INC. � q Y twine,PeerRevi control system exists, and that our and the Peer Review Committee of the California Saiay of CPAs � � r accounting and auditing work 3 5 We have reviewed the system of quality contrd for the accounting and auditing practice of aporiai&IA son,Inc.(tho Grm)in cfreel for the yar ended April 30,2011.Our par review conforms to professional standards. m was conducted in accordance with the Standards fa Performing and Reporting on Pea Reviews m established by the Par Review Board of the American Institute or Certified Public Accountants The firm is responsbk for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable We have scheduled our first peer 0 professional standards in all mal-all respects. Our responsibility is to cap=%an opinion on the design of the system or quality control and the firm's compliance therewith hued oa nun review. review for May 2013 after our first E The nature,objeaivcs,scope,limitation of,and the procedure,performed in a System Review arc fU described inthe,randaadta,www.a;ma.n, anniversary and will review of the As required by the standards,en a cmros w1ccied for review imudcd rn 8agc mattf pusd Firm's policies, practices, and Q UnderGovermaem AvJlnag Standards and an audit of an a„ployce benefit pi,n. procedures. The reviewer will make •• In our opinion,the syncmarquany coastal for the a ccounting and audit in gpractiocofCaporiccik an independent assessment of the Larwn,Inc.in effect for tie,:year ended April 30,1011,has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with Firm's quality control policies and V applicable professional standards in all material respects.Firms ao racive a rating of purrs.Pass wdrhd,,r-�e,,or�ai,.CporKei&f,arson.lnc.has rectiv*d.prare,—wwratios rp._ procedures and will inspect the working papers and reports on a c representative sample of accounting N "mCali GGP and auditing engagements. The N Rancho Cucamonga.California Q September 14,2011 Firm's administrative files and CL CA 9173n records will be reviewed and our o professional personnel interviewed. a �a Upon completion of our first peer c review, we will furnish to you the U r independent peer reviewers' report and the recommendations, if an a 1.51 Our CPAMERICA 0 Q H C t V tO a.r a 6 Packet Pg.200 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services 10 SECTION IV - PARTNER, SUPERVISORY AND STAFF QUALIFICATIONS AND EXPERIENCE a The Engagement Team will normally consist of individuals who provide a broad business perspective and significant experience in governmental auditing. This team will provide access to a wide range of technical capabilities, which will provide the City with not only the technical support necessary to perform the audit, but also S LL the broad business background to interpret findings and observations to offer effective solutions to issues, and the personal involvement of the Engagement and Concurring Partners of the Firm. ° City a J J O. of • • O C �a 7 a� w I a. Quality Control__Reviewer- Engagement Partner Concurring Partner Kenneth H. Pun, r Jack F. -• .- -1 CGIVIA+ Gary Caporicci V .A CIA .. CGFM, CFF c m 3 a� m c •. a� E a� . - �- Frances • v a� a rn rn M Supervisors M r O N Andrew Roth, •A Kristin Nguyen f� O Q O a � a U Professional U d As Needed H O L The experience of the personnel assigned to the engagement is critical to providing you with an effective and efficient audit. Their prior experience will be invaluable to the engagement. These are the professionals who will 0 be on the job on a day-to-day basis; they need to be experienced in auditing governmental entities. These °- professionals are familiar with the complexities of governmental accounting, auditing and financial reporting, F including but not limited to all GASB pronouncements, the Single Audit Act, OMB Circular A-133, and fund operations. E If there are changes to key personnel for reasons other than those specified in the request for proposal, prior U written notification will be provided to the City. f° Q 7 Packet Pg. 201 Cit y of San Bernardino Proposal to Provide Professional Auditing Services it cn Engagement Team Biographies = Kenneth H. Pun, CPA, CGMA Q Engagement Partner Ken will be responsible for the delivery of all services to the City and will also directly oversee the audit team. He r_ will manage the engagement planning and fieldwork, as well as review and approve the workpapers and reports. r_ An assurance partner in our Irvine office, Ken has more than 15 years of public accounting experience 'L specializing in audit and management consulting for government organizations. o a Gary M. Caporicci, CPA, CGFM, CFF Concurring Partner 3 Gary will work directly with Kenneth Pun managing the engagement planning and fieldwork. Also, he will be responsible for the Firm's governmental practice, including administration, professional development, practice standards and procedures, and quality control. Quality control activities include the pre-release review of audit a and management advisory reports issued by the Firm. Jack F. Georger, CPA, CIA = Quality Control Reviewer Jack will be responsible for the final quality control review of the engagement. An assurance partner in our Irvine 0 office with over 30 years of experience, Jack has provided financial and compliance audit and consultation C services to governmental clients including cities, counties, school districts, and various not-for-profit entities. As 3 an audit and accounting specialist he provides advice and consultation regarding complex accounting matters, a assists engagement teams in audit matters and is responsible for ensuring that reports issued by the Firm comply m with professional standards. E Coley Delaney, CPA L Engagement Manager Q Coley will work closely with Ken and Gary, directing the audit team in its daily activities. He is an assurance c services/audit manager in the Firm and has extensive experience in the audit of local government entities, including cities, counties, transportation agencies, and other not-for-profit entities. M Frances Kuo, CPA N Compliance Manager N Working with Coley Delaney, Frances will direct the audit team in the compliance related matters. She is an 0 CL assurance services/audit manager. She has extensive experience in the audit of local government entities o including cities, counties, park districts and healthcare entities. a. U Andrew Roth, CPA = Kristin Nguyen Supervisors i- Directly assisting Coley Delaney and Frances Kuo, Andrew and Kristin will direct the audit staff, coordinate with L City personnel and implement the audit approach. o Senior and Staff Accountants d Since all Pun & McGeady LLP governmental audit staff are qualified to perform financial audits of municipalities CD and other governmental agencies, the Firm can assure the quality of staff over the engagement term. The Firm �-- strives to balance skill-set requirements with continuity on engagements. As staff develop, we encourage them to take increased responsibility on engagements that they have been previously assigned. E U R w Q 8 Packet Pg.202' City of San Bernardino Proposal to Provide Professional Auditing Services Staff Continuity w �a The Firm's policy on providing service to our clients includes a commitment to maintaining continuity of audit a personnel. We cannot guarantee that our staff will remain with the Firm. However, to encourage our staff to remain with us, we pay competitive wage rates, offer promotional opportunities, provide state-of-the-art •5 equipment and excellent working conditions, and offer various benefits, such as retirement plans, medical plans, profit sharing programs, educational benefits, and other such benefits. Additionally, we will guarantee that any U. staff member assigned to this engagement will return to the City in subsequent years if he or she is still with the o Firm. We can also guarantee that the two partners will be involved in future years. Continuity of audit staff is of "- prime concern to us, and because of the hands-on involvement of the partners, we can assure you that future a years' audits will be conducted in an efficient and effective manner with qualified and experienced professionals. —� a 0 Quality Control System ' a. The quality of the Firm's professional practice is of utmost importance to the a, Firm, to clients and to users of our reports. We provide services that conform to professional standards and consider the integrity of individuals in determining ' our professional relationships. '�� � >, To ensure that the Firm's performance is in conformity with our stated t, v standards and those issued by the American Institute of Certified Public m Accountants(AICPA), our quality control system encompasses the following: 3 Y Professional Development a� Each member of the Engagement Team participates in continuing education programs offered by the AICPA m and California State Society of Certified Public Accountants, and each has met the continuing education Q requirements. 0 a� The Firm maintains a comprehensive training program targeted at appropriate professional staff levels. It M utilizes in-house developed educational programs, AICPA and California CPA Foundation educational M programs, and on-the-job training. c N The Firm's annual training schedule, which officially begins in April for all professional staff and u7a, administrative staff, includes comprehensive in-house training sessions on such topics as: Q. 0 • Review of principles of accounting and financial reporting for state and local governments a • Review of governmental fund types and account groups • Review of newly issued generally accepted auditing standards and government auditing standards _ • Review of internal control evaluation approaches including COSO principles • Updates on recent governmental accounting and reporting guidelines • Review of Single Audit requirements and approaches >Z • Review of financial audit approaches o • Overview of audit and internal control workpaper techniques • Review of GASB 34 reporting requirements c • Review of current issues facing the governmental community a m c m Y Y a 9 Packet Pg. 203 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services During the year, professional staff members are sent to various educational sessions sponsored by the c AICPA and California State Society of CPAs, as considered appropriate for the level and need of the individual. These classes include, among others: a • Governmental Financial Reporting Standards and Practices 70, • Yellow Book: Government Auditing Standards = • Financial Accounting Standards: Comprehensive Review c • Single Audit "- • Governmental Auditing &Accounting Update ,o • Governmental Accounting Principles n: • Comprehensive Review of Generally Accepted Auditing Standards CL The result of the Firm's training programs is the development of a highly educated and competent municipal o audit group capable of performing an efficient and effective audit for the City. The Team members will a continue their professional development efforts. CL Affirmative Action The Firm is an Equal Opportunity employer and complies with all Federal and State hiring requirements. The Firm also supports Affirmative Action philosophies and works hard to provide disadvantaged groups with opportunities for self enhancement. v c CD Q) 3 CD M T a� E m m L Q 0 M r O N fC N O CL O a` U_ C L V d 1" Q 7 O C a Engagement Team Resumes (D Pun & McGeady LLP is committed to providing the seasoned professionals and personalized services the City of San c Bernardino deserves. All work will be performed by P&M personnel; no subcontractors will be used. Full engagement E team resumes are as follows: M Q 10 Packet Pg. 204 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services Un a� Kenneth H . Pun , CPA* , CGMA �a Engagement d U Kenneth H. Pun is the Partner-In-Charge of the Assurance Division and the Founder of Pun & McGeady LLP. Prior to founding his own practice, Mr. Pun spent over 10 years with Caporicci & Larson, Inc. (a subsidiary L - '" of Marcum LLP), a specialty CPA firm recognized as one of California's ° _ foremost experts in governmental and not-for-profit accounting, auditing, J and advisory services. Mr. Pun has more than fifteen (15)years of public accounting experience o with a high level of expertise successfully working with the " governmental, private, and not-for-profit sectors. Mr. Pun is often engaged by clients as a result of the premier level of service he a "* provides, his commitment, and his innovative methods of increasing as operational efficiencies and reducing costs. Mr. Pun is a trusted advisor and a leader of accounting services to governmental and non-profit EDUCATION organizations. BS Degree In addition to working with clients, Mr. Pun provides the audit teams with U direction and technical guidance to ensure adherence to the Firm"s m Administration, • quality controls and assists with the development of the Assurance 3 Accounting from the Services practice. Mr. Pun also speaks on topics related to audits and m University of • quality control and shares his expertise with clients through annual m •_ educational seminars. PROFESSIONAL & CIVIC AFFILIATIONS d a� L • Member,American Institute of Certified Public Accountants(AICPA) • Member, California Society of Certified Public Accountants(CaICPA) Q • Member, CaICPA Government Accounting and Auditing Committee AREAS OF • Member, Government Finance Officers Association(GFOA) ;ARTIAL Member, California Society of Municipal Finance Officers(CSMFO)Audits LISTING OF CLIENTS Reviews N •_ • • _ City of Arcadia • City of Bradbury • City of Calexico N nce Litigation ••• City of Cerritos • City of Chula Vista • City of Clovis a • City of Fairfield • City of Hermosa Beach • City of Gardena o • City of La Mesa • City of Poway • City of Ridgecrest n- • Marina Coast Water • Olivenhain Municipal • North County District Water District Transit District •E v' 3 City of Stockton City of Shaffer City of Victorville U • South Orange • Southern California • San Diego H County Wastewater Alliance of Publicly Metropolitan ' Authority Owned Treatment Transit District 3 Works p L � . CONTINUING PROFESSIONAL EDUCATION c •Various municipal accounting courses offered by the California Society of a CPAs and local universities including: ,Q o Governmental Financial Reporting Standards and Practices f' • ' ' • • o Yellow Book: Government Auditing Standards c o Municipal Accounting m 'Licensed by the State of . o Single Audit •Has met the current CPE educational requirements to perform audits of ;4 governmental agencies. Q 11 Packet Pg. 205 City of San Bernardino Proposal to Provide Professional Auditing Services W in Gary M . Caporicci , Concurring Partner Q .v Gary M. Caporicci has more than 30 years of diversified business experience, including a specialization in audit and management consulting for government organizations. Mr. Caporicci's clients include o public and private universities and colleges, city and county 4+- governments, state agencies, joint power authorities, healthcare a agencies, transportation agencies and special districts. Known for his -J expertise in the areas of construction and government, Mr. Caporicci C wrote the AICPA audit guides on these topics, and authored many audit o and accounting courses for professional groups, as well as academic institutions. He frequently speaks and lectures at many professional organizations, governmental seminars and conferences including °- industry associations, other accounting firms and universities. In addition, he authors white papers for the California Committee on a Municipal Accounting. Prior to working with the Firm, Mr. Caporicci founded his own accounting v i-• -- • • • practice. He also spent 11 years with a "Big Eight" professional services _ - • • firm where he was an Audit Manager and gained broad experience in a Q wide range of industries such as government, construction, 3 manufacturing, mutual funds and insurance. Mr. Caporicci's earlier m experience includes a consultant position with a "Big Four" practice and = Vice President of a national insurance and financial services company. PROFESSIONAL & CIVIC AFFILIATIONS a L • Member and Instructor,American Institute of Certified Public Accountants Q (AICPA) c • Member,Author and Instructor, California Society of Certified Public Accountants(CaICPA) • Past Chair, CaICPA Government Accounting and Auditing Committee r� • •Chair and Speaker, CaICPA Governmental Accounting and Auditing State o 0 o f f Conferences `V • Member, CaICPA Council of •Chair, California Committee on Municipal Accounting (CCMA) o • Member, Government Finance Officers Association(GFOA) L- • Member, California Society of Municipal Finance Officers(CSMFO) 0. • Member, Governmental Accounting Standards Board(GASB) 7t • Deposits and Investment Risks Disclosure Task Force(GASB No. 40) • National Reviewer&Speaker, Government Finance Officers Association •Adjunct Professor, National University ~ • Past Member, Texas Governmental Accounting and Auditing Committee C ` L ��' . � •- CONTINUING PROFESSIONAL EDUCATION � •Author and instructor of various municipal accounting courses offered by the California Society of CPAs and local universities including: o- o Governmental Financial Reporting Standards and Practices s • Yellow Book: Government Auditing Standards • Municipal Accounting c • Single Audit E E • ' - - • Has met the current CPE educational requirements to perform audits of governmental agencies. r Q 12 Packet Pg. 206 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services n Jack F . Georger, . c Quality =a Control Reviewer Q 2 L) Jack Georger is the Partner of the Governmental Division by leveraging more than 37 years of public accounting and auditing experience in the government, agribusiness, financial services, manufacturing and non- 0 profit sectors, Mr. Georger brings an in-depth knowledge and practical expertise to each client engagement. Mr. Georger coordinates plans and manages financial audit activities, consulting activities, federal and state —! CL compliance audit activities, performance audits and numerous quality n_ control and internal control reviews for a broad mix of governmental 0- agencies and programs throughout the United States. c Mr. Georger is a continuing professional education course instructor for a AICPA. Annually, he instructs over 300 hours on accounting and auditing subjects. He has coauthored training material in governmental accounting and auditing for the AICPA and is the technical reviewer of EDUCATION the CCH Knowledge-Based Audits TM of State and Local Governments w with Single Audits. v Bachelor of _ _ Mr. Georger is licensed to practice as certified public accountant in the aci G Mason University states of California, New York, Virginia, Maryland, District of Columbia, 3 Fairfax, Virginia Georgia, South Carolina, Connecticut (inactive), Missouri and Wyoming m (inactive). and is a Certified Internal Auditor(CIA). +, PROFESSIONAL & CIVIC AFFILIATIONS E a� • Member, American Institute of Certified Public Accountants(AICPA) AREAS OF EXPERTISE • Member, Institute of Internal Auditors • Member, California Society of Certified Public Accountants(CaICPA) Audits • Member, CaICPA Government Accounting and Auditing Committee a) Reviews • Member, New York Society of Certified Public Accountants(NYSSCPA) •Chairman, NYSSCPA Government Accounting and Auditing Committee , Federal • • Member, NYSSCPA Auditing Standards Committee c Litigation Support • Member, NYSSCPA Financial Accounting Standards Committee N • Member, NYSSCPA Not For Profit Committee y • Member, Missouri Society of Certified Public Accountants(MSCPA) a •South Carolina Association of Certified Public Accountants(SCACPA) ° • Member, Government Finance Officers Association(GFOA)-CAFR Reviewer a R KEY CLIENTS `2 'c • Local Governments: a� o City of Bloomington, Illinois f 'Zsli o County of St Louis, Missouri a ` o Town Andrews, South Carolina 0 o County of Isle of Wight, Virginia 0 c CONTINUING PROFESSIONAL EDUCATION a • Instructor of over 300 hours municipal accounting courses offered by the AICPA _ h' • _ • • Has met the current CPE educational requirements to perform audits of c kh governmental agencies E E 'Licensed by the State of California c� Y Q 13 Packet Pg.207 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services Q n a Coley Delaney is a Manager within Pun & McGeady LLP's Assurance division. Mr. Delaney has over eight(8)years of accounting and auditing 5 experience working with governmental agencies, not-for-profit entities LL and private for-profit entities. Mr. Delaney also has a particular expertise 4° in conducting audits for GAO Yellow Book and compliance (OMB a Circular A-133). —r Mr. Delaney has performed audit and other attest services for several o governmental agencies throughout California including cities, counties, redevelopment agencies, public financing authorities, housing = authorities, transportation agencies, and special districts, and has a assisted in their efforts to publish their Comprehensive Annual Financial s Reports in compliance with GASB Statement No. 34. Mr. Delaney shares his expertise internally to other Firm professionals. He develops training materials for governmental auditing and Single Audits and is a frequent speaker at in-house seminars on topics related 0 to government auditing standards and Single Audit. PROFESSIONAL & CIVIC AFFILIATIONS 3 CD • • • Member,American Institute of Certified Public Accountants(AICPA) m „ • Member, California Society of Certified Public Accountants(CaICPA) E PARTIAL LISTING OF CLIENTS •City of Calexico Q •City of Chula Vista •City of Clovis rn • City of Fairfield M ._ _ • City of La Mesa _ •City of Poway e •City of Ridgecrest 0 sea" • City of Shafter N • Fallbrook Healthcare District o • Family Health Centers of San Diego 0 • North County Transit District a. • Redwood Coast Medical Center E p p •San Diego Community College District •San Diego Metropolitan Transit District U •Southwestern Community College District •Tulare Community Health Clinic sz • United Health Centers of San Joaquin Valley o ' - •San Diego Association of Governments L C7 CONTINUING PROFESSIONAL EDUCATION a. •Various municipal accounting courses offered by the California Society of m CPAs and local universities including: o Governmental Financial Reporting Standards and Practices o Yellow Book: Government Auditing Standards • - o Municipal Accounting = o Single Audit • Has met the current CPE educational requirements to perform audits of Q governmental agencies. 14 Packet Pg.208 City of San Bernardino Proposal to Provide Professional Auditing Services co M - • E 'a3 Q Frances Kuo is a Manager within Pun & McGeady LLP's Assurance division. Ms. Kuo has over eight (8) years of accounting and auditing experience working with governmental agencies, not-for-profit entities o and employee benefit plan providers. Ms. Kuo also has a particular y- expertise in conducting audits for GAO Yellow Book and compliance (OMB Circular A-133). CL Ms. Kuo has performed audit and other attest services for several o municipalities throughout California including cities, counties, redevelopment agencies, public financing authorities, housing authorities, transportation agencies, and special districts, and assisted in a their efforts to publish their Comprehensive Annual Financial Reports in compliance with GASB Statement No. 34. w • Ms. Kuo shares her expertise internally to other Firm professionals. She develops training materials for governmental auditing and single audits _ - and is a frequent speaker at in-house seminars on topics related to v government auditing standards and single audit. CD - • - PROFESSIONAL & CIVIC AFFILIATIONS 3 a� • • • Member,American Institute of Certified Public Accountants(AICPA) m _ • Member, California Society of Certified Public Accountants(CaICPA) PARTIAL LISTING OF CLIENTS _ • 0)County of Madera • Q •County of Glenn • County of Humboldt o°> •San Diego Metropolitan Transit System .�M. •City of Arcadia • •City of Brea c • City of Buena Park • •City of Downey N •City of Fullerton 0. -•- • • • City of Hermosa Beach .. . e g o •City of Indian Wells n' •City of Monterey Park • City of Petaluma �•, 0 •City of Palm Desert y •City of Ridgecrest E— CL $ r CONTINUING PROFESSIONAL EDUCATION 0 L •Various municipal accounting courses offered by the California Society of 0 CPAs and local universities including: a o Governmental Financial Reporting Standards and Practices m o Yellow Book: Government Auditing Standards o Municipal Accounting o Single Audit • Has met the current CPE educational requirements to perform audits of E " governmental agencies. ca Q 15 Packet Pg. 209 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services 0 in Andrew Roth , • • - r v i s • Q U Andrew Roth is a Supervisor of Pun & McGeady LLP. He has more than seven (7) years of governmental experience that ranges from GASB = audit/reporting, Internal Controls/COSO Framework, Single Audit, L Corporate Financial Reporting, Data Analysis and Taxation. ° a Prior to joining Caporicci & Larson, our predecessor firm, in 2010, Andrew spent 4 years in another regional size accounting firm where he 0. was a senior associate and gained experience in high profile 0 governmental entities including the city of San Diego and the county of 0 San Diego. _ a In various engagements, Andrew has been involved in providing significant services to various governmental entities and actively w contributed and participated in the planning process, implementation of c EDUCATION the audit work plan, supervision of staff, compliance testing for the Single Audit Concept and preparation of the Comprehensive Annual Financial v BS Degree in Ac • . from Reports. _ the San m Diego PROFESSIONAL & CIVIC AFFILIATIONS 3 University • Member,American Institute of Certified Public Accountants(AICPA) m •Member, California Society of Certified Public Accountants(CaICPA) c a� PARTIAL LISTING OF CLIENTS AREAS OF •City of Calexico Q Audits •City of Chula Vista •City of Clovis Reviews •City of Fairfield Federal M Compliance •City of La Mesa Litigation "' •City of Poway c •City of Ridgecrest N •City of San Diego •City of Shafter 0 •County of San Diego 0 • Fallbrook Healthcare District a • Family Health Centers of San Diego 0 •North County Transit District i= •San Diego Community College District •San Diego Metropolitan Transit District F •Southwestern Community College District Q • United Health Centers of San Joaquin Valley o �-' CONTINUING PROFESSIONAL EDUCATION •Various municipal accounting courses offered by the California Society of a CPAs and local universities including: m o Governmental Financial Reporting Standards and Practices ' ' ' ' o Yellow Book: Government Auditing Standards o Municipal Accounting E *Licensed by the State of California o Single Audit • Has met the current CPE educational requirements to perform audits of governmental agencies. Q 16 Packet Pg. 210 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services c°n' Kristin Nguyen _ r • Kristin Nguyen is a Supervisor within Pun & McGeady LLP. She has U more than seven (7) years of governmental experience that ranges from = GASB audit/reporting, Internal Controls/COSO Framework and Single iz Audit. o 2 In various engagements, Kristin has been involved in providing J significant services to various governmental entities and actively —! contributed and participated in the planning process, implementation of the audit work plan, supervision of staff, compliance testing for the Single ° -Audit and preparation of the Comprehensive Annual Financial Reports, which have earned the GFOA Certificate of Achievement for Excellence in Financial Reporting. PROFESSIONAL & CIVIC AFFILIATIONS EDUCATION • Member, American Institute of Certified Public Accountants(AICPA) • Member, California Society of Certified Public Accountants(CalCPA) BA Degree U PARTIAL LISTING OF CLIENTS Administration, • as Accounting from Concordia •City of Arcadia 3 Ohl' •City of Brea m University, Irvine P •City of Cerritos •City of Gardena •City of Hermosa Beach •City of Lomita •City of Monterey Park Q • •City of Redondo Beach EXPERTISE AREAS • City of San Clemente a, Audits •City of Santa Barbara •City of Santa Clarita Reviews Federal •City of Stanton N •Conejo Recreation and Park District 7V • El Toro Water District 0 O • Mountains Recreation and Conservation Authority 0- 0 •South Bay Regional Public Communications Authority a- •South Orange County Wastewater Authority @ CONTINUING PROFESSIONAL EDUCATION U . . L •Various municipal accounting courses offered by the California Society of f CPAs and local universities including: ' CL o Governmental Financial Reporting Standards and Practices o Yellow Book: Government Auditing Standards p ; . o Municipal Accounting o Single Audit a • Has met the current CPE educational requirements to perform audits of m governmental agencies. _ F- knguyen@pm-lip.com _ m E *Licensed b the Slate of California t U r Q 17 Packet Pg.211 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services CD Cn SECTION V — SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENT AGENCIES a Of the many governmental audits with requirements similar to the City that our current partners and professional 2 staff conducted through Caporicci & Larson, and are now conducting through Pun & McGeady LLP, we have selected the following governmental agencies, for you to contact: ii L • Engagement Partner: Kenneth H. Pun, CPA, CGMA ,o • Concurring Partner: Gary M. Caporicci, CPA, CGFM, CFF a • Scope of Work: Annual financing and compliance audits, including GFOA Certificate of Achievement for J Excellence in Financial Reporting. C 0 COMPLETION PROJECT NAME AND PROPOSED MAIN rLn V CONTACT • DATE LOCATION • • IL a� $376,000/year Ms.Vanessa Burke— 2013—Present City of Stockton (Average) Chief Financial (209)937-8908 vanessa.burke @stocktongov.com Stockton,CA 3,000 Hours Officer � A Metropolitan Transit $295,000/year U 1 System (Average) Ms. Linda Musengo— C y (619)557-4531 linda.musengo @sdmts.com m o Finance Manager San Diego,CA 2 3 ,000 Hours »� $117,000/year Ms.Evelyn Ong m 2009 City of Chula Vista (Average) Fiscal Operational � t(619)409-3818 eong @ci.chula-vista.ca.us _ Chula Vista,CA SOO Hours Managers E $75,000/year 2007-Present City of Calexico (Average) Mr.John Quinn— Q Calexico,CA Finance Director (760)768-2135 jquinn @calexico.ca.gov 500 Hours o M o $45,000/year 2008-Present City of Clovis (Average) Ms.Jamie Hughson— Clovis,CA Director of Finance (559)324-2106 jamieh @ci.clovis.ca.us 400 Hours o N $350,000/year Mr.John Sullivan— N City of Victorville (Average) Former Finance 760 646-0934 C CL Victorville,CA ( ) jullivan@firstsecuritybanknv.com 0 2,500 Hours Director d Other governmental/not-for-profit entities part of our client's list: 2 • City of Arcadia • City of Artesia • City of Bradbury • City of Brea • City of Calexico • City of Cerritos ~ • City of Clearlake • City of Cloverdale • City of Cotati o • City of Fairfield • City of Hermosa Beach • City of La Mesa t9 • City of Madera • City of Petaluma • City of Placentia a • City of Placerville • City of Poway • City of Ridgecrest • City of Shafter • City of Solana Beach • City of Stockton F' • City of Vallejo • Family Health Centers of San Diego • Fallbrook Healthcare District a 18 Packet Pg. 212 5 L:c City of San Bernardino Proposal to Provide Professional Auditing Services oa� SECTION VI — SPECIFIC AUDIT APPROACH General and Internal Control: Q m The City of San Bernardino desires the auditor to express an opinion on the fair presentation of its financial U statements in conformity with generally accepted accounting principles. In addition, the audit shall result in the c expression of separate opinions on the financial statements of the Successor Agency of the City of San S U. Bernardino and the San Bernardino Joint Powers Financing Authority(PFA). o w The examination will be made in accordance with generally accepted auditing standards. Generally accepted J auditing standards are included in Statements on Auditing Standards published by the AICPA and in GAS issued _J by GAO. The primary purpose of the examination is to express an opinion on the financial statements and that such an examination is subject to the inherent risk that errors or irregularities may not be detected. o The Firm will make an immediate, written report of all irregularities and illegal acts or indications of illegal acts of which they become aware to the following parties: n- m s • The City Council of the City of San Bernardino; • The City Manager of the City of San Bernardino; and • The Director of Finance of the City of San Bernardino U The Firm will also perform: am • Certain limited procedures involving Management's Discussion and Analysis and Required Supplementary Information required by the Governmental Accounting Standards Board as mandated by m generally accepted accounting standards. c m • Provide opinions as to the compliance with the Federal Single Audit Act and OMB Circular A-133. The 0 Firm is to provide an "in-relation-to" report on the Schedule of Expenditures of Federal Awards based on the auditing procedures applied during the audit of the financial statements. Q • Test compliance with the Single Audit Act and applicable laws and regulations. The Firm will prepare and o I publish a Single Audit Report including the appropriate schedules; report on internal control when federal o expenditures meet or exceed the threshold requiring a Single Audit. M • Test compliance with Article XIIIB pertaining to the City's appropriation limit, and prepare an Agreed-Upon o Procedures report to the City Council regarding compliance. N m ✓ Prepare Management Letter that includes significant and less significant (i.e. reportable and non- 0 reportable) recommendations for improvements to internal control. o L a E The Firm will keep the Director of Finance informed of each of the following: `2 'c s ✓ The auditor's responsibility under generally accepted auditing standards. ✓ Significant accounting policies. ✓ Management judgments and accounting estimates. C ✓ Significant audit adjustments. o ✓ Other information in documents containing audited financial statements. ✓ Disagreements with management. ✓ Management consultation with other accountants. a. ✓ Major issues with management prior to retention. r ✓ Difficulties encountered in performing the audit. 10 ✓ Errors, irregularities, and illegal acts. a� U R r Q 19 Packet Pg. 213 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services Cl) 0) Reports to be Issued: q • A report on the fair presentation of the General Purpose Financial Statements in conformity with generally a accepted accounting principles. (50 copies) • Component Unit Financial Statements for the San Bernardino Successor Agency. (25 copies) U • Compliance reports and certification letters as required, such as the Proposition 111 Appropriation Limit Compliance Report. (10 copies) E LL • Single Audit Report. (25 copies) o 0 In the required report(s) on internal control, the Firm will communicate any reportable conditions found during the 0- audit. Reportable conditions that are also material weaknesses will be identified as such in the report. Non- reportable conditions discovered by the auditors will be reported in a separate letter to management, which shall be referred to in the report(s)on internal control. The report on compliance will include all material instances of noncompliance. All non-material instances of non- compliance shall be reported in a separate management letter, which shall be referred to in the report on M compliance. Q c Audit Standards to be Followed: c° w The audit will be conducted in accordance with: v c 1) Generally accepted auditing standards established by the AICPA 2) The standards contained in Government Auditing Standards issued by the GAO 3 3) Provisions of the Single Audit Act and OMB Circular A-133 (D 4) Requirements issued by the California State Controller's office = 5) Other requirements as required E a) We will conduct the necessary audit steps to perform: a� • Planning of the engagement Q • Evaluation of the existing internal control environment to determine degree of risk of material c misstatements • Determination of compliance with laws, regulations, grant provisions, and City approved policies M • Assessment of potential fraudulent issues N • Validation of account balances V_ • Verification of reasonableness of management estimates o CL 0 Working Paper Retention and Access to Working Papers: a` All working papers and reports must be retained, at the auditor's expense, for a minimum of seven (7) years unless the firm is notified in writing by the City of San Bernardino of the need to extend the retention period. The auditor will be required to make working papers available, upon request, to the following parties or their designees: a • City of San Bernardino; • U.S. Department of Housing and Urban Development; • U.S. General Accounting Office; a • Parties designated by the Federal or State governments or by the City as part of an m s • audit quality review process; � • Auditors of entities of which the City of San Bernardino is a component unit; and • Auditors of entities of which the City is a sub recipient of grant funds. In addition, the Firm will respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance. Q 20 Packet Pg. 214 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services CD Objectives of Our Services = =a The basic objective of our audit of the City is to conduct an examination of the financial statements in accordance Q with generally accepted auditing standards and to express our opinion on the fairness of presentation of such financial statements in conformity with generally accepted accounting principles. Additionally, we believe that another real value of our audit lies in meeting other objectives at no additional cost. The following are other objectives of our services that have important benefits to the City: LL • To offer substantive observations and recommendations relating to accounting and ° operating control policies and procedures J • To identify opportunities for operating efficiencies and isolate candidate activities for cost .J reduction opportunities • To perform a professional audit in an efficient and effective way to minimize disruption to the o office operations C9 To offer ongoing advisory services to assist in the running of the operation and implementation of improved operating procedures a. m s The engagement will be conducted within the framework of the Firm's quality control program which includes the use of audit v programs, careful planning, use of computerized audit software and internal control evaluation & documentation software, and objective review procedures. On-site staff will use Firm supplied portable � � computers and printers. E ? (D The approach to the audit has been Q designed to meet the audit requirements of j I the various entities with the least disruption to the City's operations. The foundation of U1 v the audit approach is based on communication coupled with a strong �� knowledge of City operations and detailed 04 planning at the initial stages of the audit. y 0 Open communication lines with all parties of the Engagement Team and City Management and staff throughout o the engagement eliminate "surprises." Initial planning and proper assignment of duties to experienced personnel a provide for an effective and efficient audit process. Consequently, inefficiencies, disruptions, and lack of understanding are kept to a minimum. E U a� 0. 0 c� a m F- E _ m 21 Packet Pg.215 a� City of San Bernardino Proposal to Provide Professional Auditing Services CD .) Segmentation of the Engagement S The audit approach will consist of four phases: Q Initial Planning Meeting: U The Engagement Partner and Manager will meet with City Management to discuss the audit approach, identify specific 'u. needs of City Management, and familiarize themselves with o City policies and practices. a J J Interim: a The Engagement Team members including the Engagement Partner will perform the internal control o reviews, test transactions, evaluate compliance with Single Audit Act requirements (if any), identify 0 potential audit issues that need to be addressed, perform limited confirmation procedures, and develop a clear understanding between the Engagement Team and City Management of the year-end audit a. responsibilities and assignments. An exit conference will be held at the end of our visit. c Year end: The Engagement Team members including the Engagement Partner will conduct validation procedures on v general ledger account balances, complete confirmation procedures, perform analytical procedures on CD revenue and expenditures, perform search for unrecorded liabilities, complete compliance work on Federal Assistance, and wrap up audit field work. An exit conference will be held at the end of our visit. (D M T Reporting: a� Auditor's reports for all City reporting entities and compliance requirements will be finalized along aEi Management Letter comments. The Partners and Manager will be available to make presentations to the City's governing board. a' d Assuming there are no internal City circumstances that could delay the audit, the audit process will be completed and all reports issued within the time frames established by the City. Additionally, we will automatically review the c°h' financial reports for compliance with GFOA reporting guidelines at no additional cost to the City. 0 Sample Size and the Extent to which Statistical Sampling is to be used in the Engagement N 7i U) Our audit approach will include statistical sampling activities. Population size and the level of assurance to be Q derived from a particular test will dictate the sample size. We use sampling in our audit approach to compliment o skilled judgment and knowledge of the particular situation. n. U Type and Extent of Analytical Procedures c We use analytical procedures in several aspects of our audit. Extensive knowledge and industry background are H required for effective analytics, and our staff possesses the appropriate experience and knowledge for the City to a benefit from these procedures. We begin to apply our preliminary analytical procedures at interim, when we o analyze year-to-date results and balances and compare them with budget and prior year actuals. We forecast many year-end amounts at interim, so that we can limit the amount of work required at year-end and concentrate = instead on areas of concern. In addition, trend and ratio analysis will be utilized to identify any uncertain or a unusual events that may have occurred. m F- c a� E U R a 22 Packet Pg.216 City of San Bernardino Proposal to Provide Professional Auditing Services CD cn Approach to be Taken to Gain and Document an Understanding of the City's Internal Control Structure c =a We have developed diagnostic reviews which enable us to evaluate your systems and controls, and to provide Q management with constructive feedback. Combined with our knowledge of the City and understanding and experience with the City's accounting software, our control review will form the basis of our audit risk assessment. U We will utilize the COSO approach in our evaluation of the City's internal processes to identify potential control deficiencies. In future years, we will update our understanding through similar procedures. U_ L We perform walkthrough of all major accounting systems including financial reporting, revenues recognition and cash receipts process, purchasing/contracts management and cash disbursement process, payroll and related liabilities, etc. and document our understanding using narrative or flowchart. a Approach to be Taken in Determining Laws and Regulations Subject to Audit Test Work o U Our audits are designed to ensure that we test transactions for compliance with the Single Audit Act and other applicable laws and regulations, including the California Government Code, provisions of applicable Grant °• guidelines, California Constitution GANN Limit requirements, requirements of local measures, Transportation Development Act requirements, etc. We identify applicable laws and regulations as part of our audit planning a each year and continuously refer to specific regulations, compliance supplements, state guidelines and contracts currently in force. U The Single Audit Act, for example, requires a calculation to determine which grants will be included in our audit scope, and the selection of transactions from those grants for detail test. These tests are in addition to the 3 transactions tests we have already performed as part of our interim procedures testing, and cannot be performed until after year-end, when the determination can be made as to which grants must be tested. m The California Government Code has many provisions and underlying regulations relating to investments and C investment policy, all of which are tested as part of our audit of cash and investments. That Code and the E underlying regulations also form the basis of our compliance audit tests of debt covenants compliance and other (D areas. a Approach to be Taken in Drawing Audit Samples for Purposes of Test of Compliance c rn M We follow the `Audit Sampling Considerations of Circular A-133 Compliance Audits"for the purpose of testing Compliance. We will evaluate the control deviations and compliance exceptions and document direct and material elements relating to the compliance requirements. Sample size will base on professional judgment and the N knowledge of the particular situation. N 0 Extent of use of EDP Software in the Engagement o L a We use EDP Software in our engagement to increase our efficiency and quality of our work and meet the new R professional requirements regarding fraud and internal control. Our engagement team will import data from the E City's financial software and extract useful data for the purpose of testing and analytical procedures particular in the following areas: a) • Successful Fraud Test • Questionable Invoices 0 t9 • Phantom Vendor Schemes c • Kickback or Conflict-of-Interest Schemes 3 a • Dormant Account Schemes d • Money Laundering Schemes H c a� E U cv Q 23 Packet Pg. 217 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services n SECTION VII— SCHEDULE FOR THE 2013 FISCAL YEAR AUDIT Q • Award of Contract _ U. L O • Interim Audit Procedures: d J J W Partners Q Planning and Administration Managers p Supervisors L -® Review of key work papers of prior year audit. • Entrance conference with City Management to discuss audit approach,timing, assistance,and issues. O • Review and evaluate City's accounting and financial reporting. Prepare an p overall memo of recommendations, potential issues, and suggestions for improvements. • Prepare detailed audit work plan and audit programs,audit budget and staffing U schedule,list of schedules to be prepared by City staff,and list of schedules to be prepared by City staff,and provide it to City Management. (D 3 Partners O Managers m -Internal Control Evaluation +� Supervisors C _Staff O • Meeting with key Finance Division personnel. ai O • Obtain and document understanding of key internal control systems through walk-throughs,interviews of staff,and review of supporting documentation: Q ✓ General ledger system. c ✓ Budgeting system, ✓ Revenue,accounts receivable,and cash collections. M ✓ Purchasing,expenditures,accounts payable,and cash disbursements. c • Payroll. N its • Federal Financial Assistance. rn O • Other systems. SZ O L • Identify control risks. (' is • Evaluate IT control environment. v Perform statistical testing of the internal control system and evaluate the s effectiveness of the City's systems. Select large dollar and random samples of L) transactions in key operating systems. Sample size to meet required level for H determined degree of risk. Review supporting documentation of selected,,,,' ransactions, evaluate adequacy of support and approvals, and conclude Q' . degree of adherence to accuracy and compliance with City's policies. o • Conduct fraud assessment procedures. 129 • Assess degree of risk for material misstatement. CL • Provide to City's management a memo concerning potential management letter N points and identify issues,if any. F- • Hold exit conference with management and discuss observations. r d E v R Q 24 Packet Pg. 218 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services CD it N SECTION VII- SCHEDULE FOR THE 2013 FISCAL YEAR AUDIT Period Audit Tasks Staffing a Partners L) Managers -Single Audit Compliance and Other Compliance Supervisors c Staff U' • Entrance conference with City's Management. - Obtain Federal Financial Assistance Schedule. a: J • Determine grants to be considered as major programs including clusters. J CL • Perform audit tests of major grant programs and compliance with Federal Law ■ and Regulations, O • Identify whether sub-recipients exist and develop appropriate audit procedures C'1 consistent with OMB A-133 requirements. • Review grant documents, select sufficient number of transactions to test for compliance of Federal Requirements. a) -_' Coordinate Single Audit efforts with the Financial Audit efforts. Communicate findings to City Management,if any. c Partners U -Other Audit Tasks Managers Supervisors d Staff 3 .® Review minutes of Council meetings and other key committees. y • Coordinate with City staff and prepare of all appropriate confirmation requests m including: ✓ Bank accounts. E ✓ Investment pool accounts. aa) ✓ Accounts receivable. Q -,v ✓ Federal grants. o ✓ Revenue from governmental agencies. � ✓ Bond and other debts. M -_ ✓ Pension plan. 0 ✓ Attorney letters. N ✓ Others,as required. 0 Provide City with audit plan and list of year end audit schedules. OCL -, Hold exit conference with City Management and discuss observations. O. Partners v • • Year-End Audit Procedures: Managers .2 Supervisors Staff v _■ Entrance conference with the City Management. H • Follow-up on all outstanding confirmations. Q Verify and validate account balances b reviewing supporting 0 • y y g pporting documentation p including invoices, vouchers, board resolutions, minutes, and other documents, as required. C • Perform analytical review of revenue and expenditures. Determine reason for E material differences between budget and actual. 0- • Perform a search for unrecorded liabilities by reviewing disbursements subsequent to June 30, testing terms of contractual obligations, and interviewing City staff. �\ Perform review of events subsequent b discussions wigs tt Maga a q y review of all minutes of the Board and_ke committees • Hold exit conference with City Management. r Z a 25 Packet Pg.219 5.L c City of San Bernardino Proposal to Provide Professional Auditing Services SECTION VII— SCHEDULE FOR THE 2013 FISCAL YEAR AUDIT 2013 a Audit Tasks Staffing Period Partners C November/ Audit Reports: Managers December Supervisors Staff L' ® ` • Review drafts of City financial statements. 0 • Create and review draft of Single Audit Reports concerning internal control d structure,compliance with laws and regulations,and administering of federal -j J financial assistance programs. _ Q • Produce and review other reports as required. O O L • Provide drafts of reports to City Management for review. (9 c O a Within 5 Final Audit Reports,Financial Statements,Management Letter,and Single Audit working days Reports delivered 41 after approval ca a U c m m aD Personnel m c 2013 a� E m Partners 550 Managers 600 Q Seniors 800 c Professional Staff 800 °' M Total Hours 2750 M r O N f0 N O CL O 0. 2 V L� r Q ,,O^^ V a m c a� v a 26 Packet Pg. 220 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services SECTION VIII - IDENTIFICATION OF ANTICIPATED POTENTIAL AUDIT PROBLEMS a We do not anticipate that there will be any audit problems at the City. However, the following are some areas that we will carefully investigate and monitor during our audit procedures: c ca c • Investments: LL • Evaluate compliance with GASB 31. 0 • Review and evaluate the City's authorization and approval process of its investments. n: • Review and evaluate the City's controls to assure compliance with investment limitations and types of specific investments. • Review and evaluate the City's monitoring of its investments. o • Financial Reporting: • Review and evaluate that the City's Annual Financial Reports are in compliance with current reporting and disclosures requirements issued by the GASB. n- o Review Annual Financial Reports for financial reporting conformance awards issued by GFOA. w • Review and evaluate degree of compliance with the various GASBs in effect. a • Review degree of compliance with infrastructure obligations and regulatory provisions. • Internal Control Structure: • Review and evaluate the City's internal control functions and ascertain compliance with proper ci internal control philosophies. aci • Review computer system processes and controls and evaluate adequacy of the control 3 environment. m Several new GASB pronouncements will become effective over the time period of this proposal. As such, specific attention will be provided to determine the proper implementation of these new pronouncements. A list of known E new pronouncements with implementation dates that fall within this proposal period are as follows: L • GASB 57—OPEB Measurements By Agent Employers and Agent Multi-Employer Plans • GASB 58 —Accounting and Financial Reporting for Chapter 9 Bankruptcies • GASB 59—Financial Instruments Omnibus M • GASB 60—Accounting and Financial Reporting for Service Concession Arrangements M • GASB 61 —The Financial Reporting Entity: Omnibus-an amendment of GASB Statements No. 14 and c No. 34 N • GASB 62—Codification of Accounting and Financial Reporting Guidance Contained in Pre-November N 30, 1989 FASB and AICPA Pronouncements ° a • GASB 63 — Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, a and Net Position • GASB 64 — Derivative Instruments: Application of Hedge Accounting Termination Provisions — an v amendment of GASB Statement No. 53 c s • GASB 65—Items Previously Reported as Assets and Liabilities U • GASB 66—Technical Corrections—2012—an amendment of GASB Statements No. 10 and No. 62 ~ • GASB 67— Financial Reporting for Pension Plans—an amendment of GASB Statement No. 25 C • GASB 68 — Accounting and Financial Reporting for Pensions — an amendment of GASB Statement o No. 27 c9 • GASB 69—Government Combinations and Disposals of Government Operations • GASB 70—Accounting and Financial Reporting for Nonexchange Financial Guarantees °- F c E v c� .r Q 27 Packet Pg. 221 City of San Bernardino Proposal to Provide Professional Auditing Services �n SECTION IX - "PREPARED BY CLIENTS" (PBC) LIST Following is a sample list of the"client-prepared" schedules to be provided to the Firm. Q U C c>s C LL 4 � 30,2013 t0 �a a J Please provide the following schedule,and information to assist with the audit these requests will atlow us to complete the audit of J your financial statements in a timely and efficient manner.We will be basing our audit plan on the.assumption that all schedules listed, Q• below will be availabfc for our use on the dates indicated.This list Is not all Inclusive.We may,and probably will,request other Items as G our audit progresses.Microsoft Excel and Word formats are preferred,but Adobe and sc,jnntd hard copy reports are also helpful.If >_ you have any questions on any of tM:schedules or if there are areas where we may be of .istanco,alease,feel free to contact us. (� Date C Request Number Requested Item Date Requested Expected General f1 1 Agerida and Minut_ns from//1,'2012 to tha Trost current mcctin,s 2 Accounting Policies and Procedures(Accounting Manual) 3 Conflict of Interest Statement and the Adopted Resolution 7/15/13 C 4 Form 700 for ALL City Council Members,City Managers,Finance Director 7/15/13 5 Fraud Policy /151? .e Budget Adopted Budget for the finalpsar20122013 aid th�,adapted RcsoluWi n 0 Both Operational and C oital Improvement / GANN Limit Calcuation 7115113 Trial Balances 14 N 1 1 al Balance as of and fu the year ended June 30,K12(1'601 Yaar 1 iel m Balance agreed to the Issued Audit Report) C 2 t hat Balance for the most recent closed Month t2) Confirmations E 1 ListinP,of all Confirmation sent for the 2012 Audit /15113 ty 2 Legal Expenditures byAttorney for the year 20122013 7,'15113 L CA �Financial Statements and Other Q 1 Copy of all issued reports for the year ended June 30,2012 1/1S/13 ,. AW Cash and Investments 1 list of all Bank Accounts 7/15113 2 List of aR Investment Accounts_ 7/15/13 v 3 Bank Reconciliation as of June 30,2013 for ALL bank accounts 4 Most Recent Investment Policy and the Adopted Resolution 7,'15/13 r 5 Investment Report as of)une 30,2013 C 1 List of all loans outstandings as of July 1,2012 7115/13 2 Roll forward schedules of the loans receivables N O 3 Aging Report for all Recriva tiles by Fund as of June 30,2013 CL r, �w I„ h t.,J .,, .=tCapltalASSetsm O IL` 1 Roll Forward Schedule of Capital Assets for the year ended June 30,2013 CtT 2 Detailed listing of capital assets as of July 1,2012 7/15/13 U 7 C 3 Detailed listing of Additions,Retirements,and J ransfcrs during the year U 4 GASH,34 Apprisal Report during implementation year 7/15113 5 Capital Assets Policy 7/15/13 r 6 Calculation of Depreciation for the year ended June 30,2013 Q 7 Identification of any obsolescences assets,if any. 7/15/13 O ,,Lnn V C CL QJ L� F C U (6 La a 28 Packet Pg. 222 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services SECTION X - "PREPARED BY CLIENTS" (PBC) LIST S a U C tts C Client Assistance Request Package u- L FYE: June 30,2013 O a Please provide the following schedules and information to assist with the audit.These requests will allow us to complete the audit of J your financial statements in a timely and efficient manner.We will be basing our audit plan on the.assumption that all schedules listed f1 below will he available.for our use on the dates indicated.I his IIst Is not all inclusive_We may,and probably will,request other items as our audit progresses.Microsoft Ucel and Word formats are preferred,but Adobe and scanned hard copy reports are also helpful, It Oi you have any questions on any of the schrdulc,or if th,,o arc area;where we may be of assistance,please 1,,::tree to contact us. (� Date Request Number! Requested Item Date Requested Expected Deferred Charges (1 U 1 111i1fl,Cikllblidf111t D!'f!I'fld Charges z Miottlattonsdsdu�a '�' ;•,�;. IRV0ntory, � 1 DetyN[i! Fundas�ofhute 2013 1 Accounts Payable Detail Ustingasof June 30,2013 V 2 Cash Disbursement Report(both Wire and Checks)for July and August of 2,]13 Accrued payroll and belated N 3 PayralRgjtxHor the period including Juno 30,2013. 2 FamUlfarALL uarterandItsreconciliationtothegeneral ledger. tv m 3 GA58 Statement No.96 Schedule asof June 3D.2013 ,A49 C Calculation of Invested In Capital Assets',NeCyf ReWted;Debt for Governmental d r 2 Activities,Business Type Activities,ALL trnq se FUnd atbt�AU.intemal 0) Services Fund. 0) Official Statements and Debt-8NfCeScheduk for AEL°butstanding debt as of Q 1 July 1.2013 ' gs ., 7/15113 2 Roll forward schedule for the yearertded June 30,2013 7/15/13 O O M M r O N tts N O CL O L G U tU t•— >Z O ,LR V a m c tD 29 Packet Pg. 223 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services U �- cn M Benefits of Choosing Pun & McGeady LLP r At Pun & McGeady LLP, we combine our professional trust and integrity with a proven industry approach to Q address the impact of unique client issues. Our professional teams are organized by industry lines to facilitate 70 customized service delivery and are led by seasoned partners who share a common philosophy for personalized .5 client service. The quality of service that Pun & McGeady LLP delivers is the direct result of a higher level of = partner attention and manager involvement in the work. LL L 0 We are committed to exceeding your expectations and we trust that this proposal has provided you with the necessary information about our firm, core engagement service team members, audit approach and fees to assist 0. you with your selections. Our engagement team members have the experience and qualification to serve you in the most cost effective way possible. p 0 In summary, Pun & McGeady LLP has the resources and relevant in-depth industry knowledge to provide the City with the highest level of quality service that you expect and deserve as a valued client. n. m s Thank You = Thank you for the opportunity to submit our proposal to provide you with professional services. For any additional v information, please contact: c m m Mr. Kenneth H. Pun, CPA, CGMA 3 Managing Partner CO 9 Corporate Park, Suite 130 = Irvine, California 92606 Email: kpun @pm-Ilp.com 0 Phone: (949) 777-8801 P Q 0 Sincerely, M / N 7i N Pun & McGeady LLP a Certified Public Accountants and Business Advisors ° a U m F- Q. 0 c a m s t- c U E .r Q 30 Packet Pg. 224 5.L.c a� CD rn c Q m c _c LL L O Q. J J Q 3 O ''Lnn V C n. Q� APPENDICES .1.1 U ✓ Professional Audit Services - Checklist 3 ✓ Bid Contents and Forms m ✓ Subcontractor's List ✓ Non-Conclusion Affidavit Q ✓ Proof of Insurance - Sample M M r O N c� (A O Q O L a �a U t U O F- Q O C9 C O CL W F- a.: c m .�c a 31 Packet Pg. 225 5.L.c m o c �a Q m c m c ii L 0 c: J Q. O O L U' C O a m .r v c� U c CD CD d 3 m This page intentionally left blank. c m E 0 m L Q O M M r O N t3 W O Q O L Q. V �C .c U d H Q 3 O C9 c 7 a m F- r _ d E Q 32 Packet Pg. 226 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services ,L co Q City of San Bernardino, Finance Department = Purchasing Division c LL RFP F-14-04 0 0 Professional Audit Services a J J Bid Documents to Be Returned Q. 0 'Ln V Title Page o. x❑ Cover Letter!Letter of Introduction y t x❑ Project Approach x❑ Project Staffing �+ U 0 Vendor Qualifications and Project Experience c ar m n References 3 m x❑ Original Proposal VendorF°"' m Three(3)copies of Proposal Vendor for , m a� Fil Original Firm& Fixed Fee Schedule in a separate SEALED envelop Vendor Authorized Binding Signature(s) o 0 0 x❑ Proof of Insurance M Addendum Received(City Form)Nr°""5 c N x❑ Non-Collusion Affidavit(City Form)N Forms N O 0 Listing of Proposed Subcontractor(City Form) NF°`"° o CL x❑ 120 Day Minimum Proposal Validity Statement U ❑ u, s U CD ❑x Copy of Contractor License or other appropriate Licenses where applicable vi G­­1 Specifications#35 Q Offeror(s)are requested to submit this checklist completed with all bid documents.This list 0 0 may not be inclusive of all documents needed to submit your RFP. _ IL Q t t— c m U R r-. Q 33 Packet Pg. 227 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services Q rn _ a III. BID CONTENT AND FORMS _ m Proposer to enclose Proposal along with signed and dated Firm& Fixed"Fee Schedule"(in U. a separate SEALED envelope.)See Section I. E.3.c. o 0 Are there any other additional or incidental costs that will be required by your firm in order to meet the requirements of the Proposal Specifications? Yes / No (circle one). If you answered"Yes",please provide detail of said additional costs: Q: No. 0 0 rL^ V _ n. Please indicate any elements of the Proposal Specifications that cannot be met by your firm. N/A _ a Have you included in your proposal all informational items and forms as requested?Yes / U No . (circle one). If you answered"No", please explain: _ Yes 3 a� m T This offer shall remain firm for 120 days from RFP close date. � E Q Terms and conditions as set forth in this RFP apply to this proposal. P M Cash discount allowable % days;unless otherwise stated, payment terms are: Q Net thirty(30)days. o� rn In signing this proposal,Offeror(s)warrants that all certifications and documents requested herein are attached and properly completed and signed. M 0 N From time to time,the City may issue one or more addenda to this RFP. Below, please indicate all Addenda to this RFP received by your firm,and the date said Addenda was/were o received. Q, 0 L Verification of Addenda Received d R Addenda No: 1 Received on: 07/16/2013 2 Addenda No: Received on: U Addenda No: Received on: 0 C7 c IL Q I- _ m E U r a 34 Packet Pg. 228 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services Cnn d Q FIRM NAME: Pun& McGeady LLP ADDRESS: 9 Corporate Park, Suite 130 Irvine, California, 92606 U- L O Phone: (949) 777-8801 J Email: kpun @pm-Ilp.com �. Fax: (949) 777-8850 o c Authorized Signature: T '71 a a� Print Name: Kenneth H. Pun,CPA, CGMA Title: Managing Partner c�a a U c IF SUBMITTING A"NO PROPOSAL", PLEASE STATE REASON (S)BELOW: 3 a� [0 c a� E m a� L a� Q 0 rn 0 M M r O N N O Q O L a _U G V d Q O C9 C a m AF A t- c a� c.� r Q 35 Packet Pg. 229 S.L.c City of San Bernardino Proposal to Provide Professional Auditing Services Cn 0) Q SUBCONTRACTOR'S LIST c As required by California State Law,the General Contractor bidding will hereinafter state the subcontractor who will be the subcontractor on the job for each particular trade or E subdivision of the work in an amount in excess of one-half of one percent of the General o Contractor's total bid and will state the firm name and principal location of the mill, shop, or �- office of each. If a General Contractor fails to specify a subcontractor, or if he specifies more J than one subcontractor for the same portion of work to be performed under the contract in excess of one-half of one percent, he agrees that he is fully qualified to perform that portion a himself and that he shall perform that portion himself. 0 'Ln V DIVISION OF NAME OF FIRM OR LOCATION d WORK OR TRADE CONTRACTOR CITY a. N/A N/A N/A M U c m Q 3 w m T a� Kenneth H. Pun,CPA,CGMA �� - /Z.._ a� Print Name Signature of Bidder Q Company Name: Pun & McGeady LLP M Address: 9 Corporate Park, Suite 130, Irvine, CA 92606 M r O N 14 N REJECTION OF BIDS CL 0 L The undersigned agrees that the City of San Bernardino reserves the right to reject any or a all bids, and reserves the right to waive informalities in a bid or bids not affected by law, if to do seems to best serve the public interest. c s U d N Q. O C 7 a m c a� Q 36 Packet Pg. 230 City of San Bernardino Proposal to Provide Professional Auditing Services Cl) c Q NON-COLLUSION AFFIDAVIT U c TO: THE COMMON COUNCIL,CITY OF SAN BERNARDINO c LL L In accordance with Title 23, United States Code, Section 112, the undersigned hereby states, under penalty of perjury: a 4 That he(she has not,either directly or indirectly,entered into any agreement, participated in O_ any collusion, or otherwise taken action in restraint of free competitive proposal in o connection with RFP F-14-04 c (L a) Business Name Pun & McGeady LLP y Business Address 9 Corporate Park, Suite 130, Irvine, CA 92606 Signature of Offeror(s)X U c W m 3 AVW& Place of Residence a' M c a� Subscribed and sworn before me this day of 20 E a) L Notary Public in and for the County of State of California. Q My commission expires 20 M M r O N tlS N O O L a 2 t V a) H Q. 3 O C7 c 3 CL m h- c a� V R Q 37 Packet Pg.231 :12201 Ri 5.L.c m V CD Cl) • as _ _ Q u _ ro c LL L O a J J Q O O ''Lnn V _ a a� Y ro Y U c a� m 3 Y CD m Y c a� E a) a� L Q O M_ M r O N ro N O CL O L ro U U Q F Q 7 O C O 0. m F C d U ro Y Y Q Packet Pg.232 5.L.c City of San Bernardino Proposal to Provide Professional Auditing Services 0 Cn -� PUNUA-1 OP ID:RRO .ACORO° CERTIFICATE OF LIABILITY INSURANCE UATE(031 M 191201 Mj/D2 "' � �...-.—� 013 Q THIS CERTIFICATE IS ISSUED AS A MATTER'OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER.THIS 2 CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S),AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. _ IMPORTANT: If the certificate holder Is an ADDITIONAL INSURED,the policy(ies)must be endorsed. If SUBROGATION IS WAIVED,subject to ji the terms and conditions of the policy,certain policies may require an endorsement. A statement on this certificate does not confer rights to the LO certificate holder in lieu of such endorsement(s). 10 PRODUCER Phone:858-259-5800 CONTACT Q. Leavitt Ins Agency San Diego Fax:858-259-6069 NAME:PHONE FAIL No: J CA License#OB72756 3636 Nobel Drive,Suite 100 E-MI aESS:Renate-Rosander@leavitt.com J San Diego,CA 92122 INSURER AFFORDING COVERAGE NAIC# INSURER A:Travelers Casualty Nrs Co Amer 31194 0 INSURED Pun&McGeady,LL INSURERS;Travelers Casualty Ms Co Amer. 31194 (7 9 Corporate Park#130 Navi ator's Insurance Co C Irvine,CA 92606 INSURER C: 0 42307 O INSURER D: (L INSURERE: INSURER F COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD CC INDICATED: NOTIMTHSTANDING`ANY REQUIREMENT,TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN,THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, ++ EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOYMI MAY HAVE BEEN REDUCED BY PAID CLAIMS. V INSR TYPE OF INSURANCE POLICY NUMBER MrDDfYYYY) (MMIDDY LIMITS GENERALIIABRRY. EACH OCCURRENCE $ 2,000,00 N d A X COMMERCIAL GENERAL UABLITY 16802B646976`. 03101/2013 03101/2014 PREMSES Ea T wi tru,nce $ 300,00 �j CLANS MADE❑X OCCUR MED EXP(Anyone person) $ 5,00 m .y PERSONAL&ADVINJURY $ 2,000,00 �.+ GENERAL AGGREGATE $ 4,000,00 GEN'L AGGREGATE IJMIT APPUESPER: PRODUCTS.COWIOPAGG $ 4,000,00 E POLICY LOC I $ AUTOMOBILE LIABRITY a accident $ 2,000,00 L A ANY AiTO 168028545975 0310112013 03101/2014 BODILY INJURY(Per person) $ ALLOMJED. SCHEDULED. BODILY INJURY(Per accident) $ Q AUTOS _ AI.JTOS X HIRC-0ALJTOS X NON-OWNED Y $ O NJTOS r ace den Q> $ 0) M UMBRELLA LIAB OCCUR EACH OCCURRENCE $ EXCESS"AB. CLAIMS-MADE AGGREGATE. $ M r DIED RETENTION$ $ N WORKERS COMPENSATION X T A rU AND EMPLOYERS'LIABILITY A ANY PROPRIETOPWARTNERID(ECUTIVE YIN A- MIA 03101/2013 030112014 E.L.EACH ACCIDENT $ 1,000,00( N 0 FF ICERIM EM BER EXCLUDED? O (Mandatory in NN) - X E.L.DISEASE-EA EMPLOYE $ 1,000,00 If s descaibeunder CL DE�SCRI PTION OF OPERATIONS below E.L.DISEASE-POLICY I MIT $ 1,000,00 O C Errors&Omm'ssion SFI2APL0A1M92NV 030112013 0310112014 Per Occur 1,000,00 ` CL Aggregate 2,000,00 V DESCRIPTION OF OPERATIONS 1 LOCATIONS/VEHICLES(Attach ACORD 101,Additional Remarks Schedule,if more space is required) •_ Evidence of insurance U d I— CL O 0 CERTIFICATE HOLDER CANCELLATION = 3 D_ SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE G THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN Evidence of Insumace ACCORDANCE WITH THE POLICY PROVISIONS. F AUTHORIZED REPRESENTATIVE E ©1988-2010 ACORD CORPORATION. All rights reserved. ACORD 25(2010105) The ACORD name and logo are registered marks of ACORD Q 39 Packet Pg.233 S.L.c m a� Q L) _ CO c U- L O a J J Q O O 'Ln V _ CL a� _ w U _ CD m 3 m m This page intentionally left blank. Q E d L Q 0 CD M M O N t0 N O Q O L a Fa 2 V G! Q O C9 _ 7 CL m F- c m E u a 40 Packet Pg.234 5.L:c a� u N 03 C ' Q io C R 0 _C LL L O n: J J CL 7 O //L^� V C CL KN a� s 0 U C ` ��MM / TMFNT (D a� 3 m m 0 C a) E m 4) L Q O Q� M r O N N Fc�M O CL ` rp L- PUN & McGEADY IL Cedifled Public Accountants and Business Advisors V t V d F !Z O C 3 CL m H 4j c m Q Attachment 2 JN GROUP LL ACCOUNTANTS&ADVISORS s' N _ December 3,2015 a_ Nita McKay Deputy City Manager City of San Bernardino = 300 North D Street L San Bernardino,CA 92418 c: J RE: Proposal to Perform Professional Auditing Services for the City of San Bernardino 4 Dear Ms.McKay, 0 t� This letter is to confirm our understanding that The Pun Group will honor our Proposal submitted on July nom. 23,2013 for the Professional Auditing Services. Y In summary,our fees for the Professional Auditing Services are as follows: For the Fiscal Year Ended June 30,2014 $374,000 v Less: Single Audit Contract executed on September 9,2015 ($45,000) 3 For the Fiscal Year Ended June 30,2015 $374,000 m Y c We would also like to provide an option for the City to extend our contract: For the Fiscal Year Ending June 30,2016 $374,000 m L Our goal is to complete these audits and issue our audit reports in a timely manner. The personnel a assigned to this engagement are fully qualified to perform an effective and efficient audit of the City, and their extensive experience will be invaluable to the audit process. Our professionals are familiar with the (n complexities of governmental accounting, auditing, and financial reporting, including but not limited to, all GASB pronouncements,the Single Audit Act,OMB Circular A-133,and fund operations. o a Should you have any questions,please do not hesitate to contact me at 949-777-8801. We look forward L- L to working with the City during this challenging time. Thank you. Sincerely, The Pun Group,LLP c. 0 L L CL a� E- Kenneth H.Pun,CPA,CGMA Managing Partner m LI v a 200 East Sandpointe Avenue,Suite 600,Santa Ana,California 92707 Tel:949-777-8800•Toll Free:855-276-4272• Fax:949-777-8850 www.pungroup•com Packet Pg.236: