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HomeMy WebLinkAboutCC Resolution 10617 (Auditing Services)RESOLUTION NO. 10617 A RESOLUTION AUTHORIZING AN AGREEMENT WITH CAPORICCI, CROPPER & LARSON LLP, CERTIFIED PUBLIC ACCOUNTANTS, TO PROVIDE AUDITING SERVICES FOR THE YEARS ENDING JUNE 30, 2000 THROUGH JUNE 30, 2002, WITH OPTIONS FOR THE YEARS ENDING JUNE 30, 2003 AND JUNE 30, 2004. The City Council of the City of San Rafael resolves as follows: The City Manager and City Clerk are authorized to execute, on behalf o the City of San Rafael, an agreement with Caporicci, Cropper & Larson LLP, Certified Public Accountants a copy of which is hereby attached and by this reference made a part hereof. I, JEANNE M. LEONCINI, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a reaular meeting of the City Council of said City held on Mondav the 3rd day of Anril. 2000. by the following vote, to wit: AYES: COUNCILMEMBERS: Cohen, Heller, Miller & Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: Phillips A.o�P JE IV M LEONCINI, City Clerk AGREEMENT FOR AUDITING SERVICES This Agreement is made and entered into this 3rd day of April , 2000, by and between the CITY OF SAN RAFAEL (hereinafter "CITY"), and CAPORICCI, CROPPER & LARSON, LLP Certified Public Accountants (hereinafter "CONTRACTOR"). RECITALS WHEREAS, the City desires to engage the services of a contractor to perform the annual Audit of the City and, WHEREAS, Contractor represents that it has the expertise, experience and willingness to perform said audit, AGREEMENT NOW, THEREFORE, the parties hereby agree as follows: PROJECT COORDINATION. A. CITY. The City Manager shall be the representative of the CITY for all purposes under this Agreement. The Assistant Director of Management Services — Finance Division is hereby designated the PROJECT MANAGER for the CITY, and said PROJECT MANAGER shall supervise all aspects of the progress and execution of this Agreement. B. CONTRACTOR. CONTRACTOR shall assign a single PROJECT DIRECTOR to have overall responsibility for the progress and execution of this Agreement for CONTRACTOR. Stephen L. Larson, Partner is hereby designated as the PROJECT DIRECTOR for CONTRACTOR. Should circumstances or conditions subsequent to the execution of this Agreement require a substitute PROJECT DIRECTOR for any reason, the PROJECT DIRECTOR designee shall be subject to the prior written approval of the PROJECT MANAGER. 2. DUTIES OF CONTRACTOR. CONTRACTOR shall perform the duties and/or provide services as described in Section Il of the Request for Proposals for Audit Services,(Attached Exhibit A) and pursuant to the CONTRACTOR'S Proposal dated February 20, 2000.(Attached Exhibit B) 3. DUTIES OF CITY. CITY shall pay the compensation as provided in Paragraph 4, and perform the duties as described in the Request for Proposals for Audit Services, (Attached Exhibit A) and pursuant to CONTRACT'S Proposal dated February 20, 2000. (Attached Exhibit B). 4. COMPENSATION. For the full performance of the services described herein by CONTRACTOR, CITY shall pay CONTRACTOR pursuant to the Schedule of Fees and Expenses reflected in Appendix F of the Request for Proposals for Audit Services, (Attached Exhibit A) and pursuant to CONTRACTOR'S Comprehensive Dollar Cost Bid Proposal dated February 25, 2000. (Attached Exhibit C) Payment will be made monthly upon receipt by PROJECT MANAGER of itemized invoices submitted by CONTRACTOR. 5. TERM OF AGREEMENT. The term of this Agreement shall be for three consecutive years commencing April 03, 2000 for auditing the fiscal year ending June 30, 2000 and ending April 03, 2003 for auditing the fiscal year ending June 30, 2002. Upon mutual agreement of the parties, and subject to the approval of the City Council, the term of this Agreement shall be extended for an additional period of two, one (1) year options for auditing fiscal years ending June 30, 2003 and June 30, 2004. 6. TERMINATION. A. Discretionary. Either party may terminate this Agreement without cause upon thirty (30) days written notice mailed or personally delivered to the other party. B. Cause. Either party may terminate this Agreement for cause upon fifteen (15) days written notice mailed or personally delivered to the other party, and the notified party's failure to cure or correct the cause of the termination, to the reasonable satisfaction of the party giving such notice, within such fifteen (15) day time period. C. Effect of Termination. Upon receipt of notice of termination, neither party shall incur additional obligations under any provision of this Agreement without the prior written consent of the other. D. Return of Documents. Upon termination, any and all CITY documents or materials provided to CONTRACTOR and any and all of CONTRACTOR's documents and materials prepared for or relating to the performance of its duties under this Agreement, shall be delivered to CITY as soon as possible, but not later than thirty (30) days after termination. 2 C N I 7. OWNERSHIP OF DOCUMENTS. The written documents and materials prepared by the CONTRACTOR in connection with the performance of its duties under this Agreement, shall be the sole property of CITY. CITY may use said property for any purpose, including projects not contemplated by this Agreement. INSPECTION AND AUDIT. Upon reasonable notice, CONTRACTOR shall make available to CITY, or its agent, for inspection and audit, all documents and materials maintained by CONTRACTOR in connection with its performance of its duties under this Agreement. CONTRACTOR shall fully cooperate with CITY or its agent in any such audit or inspection. 9. ASSIGNABIL1TY. The parties agree that they shall not assign or transfer any interest in this Agreement nor the performance of any of their respective obligations hereunder, without the prior written consent of the other party, and any attempt to so assign this Agreement or any rights, duties or obligations arising hereunder shall be void and of no effect. 10. INSURANCE. A. During the term of this Agreement, CONTRACTOR shall maintain, at no expense to CITY, the following insurance policies: 1. A comprehensive general liability insurance policy in the minimum amount of one million ($1,000,000) dollars per occurrence for death, bodily injury, personal injury, or property damage; 2. An automobile liability (owned, non -owned, and hired vehicles) insurance policy in the minimum amount of one million ($1,000,000) dollars per occurrence; 3. If any licensed professional performs any of the services required to be performed under this Agreement, a professional liability insurance policy in the minimum amount of one million $1,000,000) dollars to cover any claims arising out of the CONTRACTOR's performance of services under this Agreement. B. The insurance coverage required of the CONTRACTOR by section 11. A., shall also meet the following requirements: 1. The insurance shall be primary with respect to any insurance or coverage maintained by CITY and shall not call upon CITY's insurance or coverage for any contribution; 2. Except for professional liability insurance, the insurance policies shall be endorsed for contractual liability and personal injury; 3. Except for professional liability insurance, the insurance policies shall be specifically endorsed to include the CITY, its officers, agents, employees, and volunteers, as additionally named insureds under the policies. 4. CONTRACTOR shall provide to City's Risk Manager, (a) Certificates of Insurance evidencing the insurance coverage required herein, and (b) specific endorsements naming CITY, its officers, agents, employees, and volunteers, as additional named insureds under the policies. 5. The insurance policies shall provide that the insurance carrier shall not cancel, terminate or otherwise modify the terms and conditions of said insurance policies except upon thirty (30) days written notice to City's Risk Manager. 6. If the insurance is written on a Claims Made Form, then, following termination of this Agreement, said insurance coverage shall survive for a period of not less than five years; 7. The insurance policies shall provide for a retroactive date of placement coinciding with the effective date of this Agreement; 8. The insurance shall be approved as to form and sufficiency by PROJECT MANAGER and the City Attorney. C. If it employs any person, CONTRACTOR shall maintain worker's compensation and employer's liability insurance, as required by the State Labor Code and other applicable laws and regulations, and as necessary to protect both CONTRACTOR and CITY against all liability for injuries to CONTRACTOR's officers and employees. D. Any deductibles or self-insured retentions in CONTRACTOR's insurance policies must be declared to and approved by the City's Risk Manager and the City Attorney. At CITY's option, the deductibles or self-insured retentions with respect to CITY shall be reduced or eliminated to CITY's satisfaction, or CONTRACTOR shall procure a bond guaranteeing payment of losses and related investigations, claims administration, attorney's fees and defense expenses. 4 �_``s � �._. 11. INDEMIgMCATION. CONTRACTOR shall indemnify, release, defend and hold harmless CITY, its officers, agents, employees, and volunteers, against any claim, demand, suit, judgment, loss, liability or expense of any kind, including attorney's fees and administrative costs, arising out of or resulting in any way, in whole or in part, from any acts or omissions, intentional or negligent, of CONTRACTOR or CONTRACTOR'S officers, agents and employees in the performance of their duties and obligations under this Agreement." 12. NONDISCRRvHNATION. CONTRACTOR shall not discriminate, in any way, against any person on the basis of age, sex, race, color, religion, ancestry, national origin or disability in connection with or related to the performance of its duties and obligations under this Agreement. 13. COMPLIANCE WITH ALL LAWS,. CONTRACTOR shall observe and comply with all applicable federal, state and local laws, ordinances, codes and regulations, in the performance of its duties and obligations under this Agreement. CONTRACTOR shall perform all services under this Agreement in accordance with these laws, ordinances, codes and regulations. CONTRACTOR shall release, defend, indemnify and hold harmless CITY, its officers, agents and employees from any and all damages, liabilities, penalties, fines and all other consequences from any noncompliance or violation of any laws, ordinances, codes or regulations. 14. NO THIRD PARTY BENEFICIARIES,. CITY and CONTRACTOR do not intend, by any provision of this Agreement, to create in any third party, any benefit or right owed by one party, under the terms and conditions of this Agreement, to the other party. G 15. NOTICES. All notices and other communications required or permitted to be given under this Agreement, including any notice of change of address, shall be in writing and given by personal delivery, or deposited with the United States Postal Service, postage prepaid, addressed to the parties intended to be notified. Notice shall be deemed given as of the date of personal delivery, or if mailed, upon the date of deposit with the United States Postal Service. Notice shall be given as follows: TO CITY: TO CONTRACTOR: Mr. Dennis Shives, Project Manager City of San Rafael P.O. Box 151560 San Rafael, CA 94915-1560 Mr. Stephen L. Larson, Partner Caporicci, Cropper & Larson, LLP Certified Public Accountants 1575 Treat Blvd., Suite 208 Walnut Creek, California 94598 16. INDEPENDENT CONTRACTOR. For the purposes, and for the duration, of this Agreement, CONTRACTOR, its officers, agents and employees shall act in the capacity of an Independent Contractor, and not as employees of the CITY. CONTRACTOR and CITY expressly intend and agree that the status of CONTRACTOR, its officers, agents and employees be that of an Independent Contractor and not that of an employee of CITY. 17. ENTIRE AGREEMENT -- AMENDMENTS. A. The terms and conditions of this Agreement, all exhibits attached, and all documents expressly incorporated by reference, represent the entire Agreement of the parties with respect to the subject matter of this Agreement. B. This written Agreement shall supersede any and all prior agreements, oral or written, regarding the subject matter between the CONTRACTOR and the CITY. C. No other agreement, promise or statement, written or oral, relating to the subject matter of this Agreement, shall be valid or binding, except by way of a written amendment to this Agreement. D. The terms and conditions of this Agreement shall not be altered or modified except by a written amendment to this Agreement signed by the CONTRACTOR and the CITY. E. If any conflicts arise between the terms and conditions of this Agreement, and the terms and conditions of the attached exhibits or the documents expressly incorporated by reference, the terms and conditions of this Agreement shall control. 18. SET-OFF AGAINST DEBTS. CONTRACTOR agrees that CITY may deduct from any payment due to CONTRACTOR under this Agreement, any monies which CONTRACTOR owes CITY under any ordinance, agreement, contract or resolution for any unpaid taxes, fees, licenses, assessments, unpaid checks or other amounts. 19. WAIVERS. The waiver by either party of any breach or violation of any term, covenant or condition of this Agreement, or of any ordinance, law or regulation, shall not be deemed to be a waiver of any other term, covenant, condition, ordinance, law or regulation, or of any subsequent breach or violation of the same or other term, covenant, condition, ordinance, law or regulation. The subsequent acceptance by either party of any fee, performance, or other consideration which may become due or owing under this Agreement, shall not be deemed to be a waiver of any preceding breach or violation by the other party of any term, condition, covenant of this Agreement or any applicable law, ordinance or regulation. 20. COSTS AND ATTORNEY'S FEES. The prevailing party in any action brought to enforce the terms and conditions of this Agreement, or arising out of the performance of this Agreement, may recover its reasonable costs (including claims administration) and attorney's fees expended in connection with such action. 21. CITY BUSINESS LICENSE / OTHER TAXES,. CONTRACTOR shall obtain and maintain during the duration of this Agreement, a CITY business license as required by the San Rafael Municipal Code . CONTRACTOR shall pay any and all state and federal taxes and any other applicable taxes. CONTRACTOR's taxpayer identification number is 68-0433109, and CONTRACTOR certifies under penalty of perjury that said taxpayer identification number is correct. 22. APPLICABLE LAW. The laws of the State of California shall govern this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day, month and year first above written. CITY OF SAN RAFAEL ROD GOULD, City Manager ATTEST: M. LEONC.�NI, City Clerk 8 CAPORICCI, CROPPER & LARSON,LLP By Name: STEPHEN L. LARSON Title: Partner (Revised 6/99) ( C` EXHIBIT A CITY OF SAN RAFAEL REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES JANUARY 18, 2000 1400 Fifth Avenue, Room 204 San Rafael, Calif. 94901 CITY OF SAN RAFAEL REOUEST FOR PROPOSALS TABLE OF CONTENTS I. INTRODUCTION A. General Information B. Term of Engagement C. Subcontracting II. NATURE OF SERVICES REQUIRED A. General B. Scope of Work to be Performed C. Auditing Standards to be Followed D. Reports to be Issued E. Special Considerations F. Working Paper Retention and Access to Working Papers III. DESCRIPTION OF THE GOVERNMENT A. Name and Telephone Number of Contact Persons/Organizational Chart/Location of Offices B. Background Information C. Fund Structure D. Budgetary Basis of Accounting E. Federal and State Financial Assistance F. Pension Plans G. Component Units H. Joint Powers I. Joint Ventures J. Magnitude of Finance Operations K. Computer Systems L. Availability of Prior Reports and Working Papers 2 IV. TIME REQUIREMENTS A. Proposal Calendar B. Date Contract to be Awarded C. Date Audit May commence D. Schedule for the June 30, 2000, 2001, 2002 Fiscal Year Audits 1. Interim Work 2. Detail Audit Plan and Programs 3. Fieldwork 4. Draft Reports E. Entrance Conferences, Progress Reporting and Exit Conferences F. Date Final Report is Due V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department and Clerical Assistance B. Other Departmental Assistance C. Information Systems Processing (I.S.) Assistance D. Reports and Schedules to be Prepared by the Staff of the CITY OF SAN RAFAEL E. Work Area, Telephone, Photocopying and FAX Machines F. Report Preparation 3 VI. PROPOSAL REQUIREMENTS A. General Requirements 1. Submission of Notification of Interest 2. Pre -proposal Conference 3. Inquiries 4. Submission of Proposals B. Technical Proposal 1. General Requirements 2. Independence 3. License to Practice in California 4. Firm Qualifications and Experience 5. Partner, Supervisory and Staff Qualifications and Experience 6. Similar Engagements with Other Government Entities 7. Specific Audit Approach 8. Identification of Anticipated Potential Audit Problems 9. Report Format C. Sealed Dollar Cost Bid 1. Total All -Inclusive Maximum Price 2. Rates by Partner, Specialist, Supervisory and Staff Level Times Hours Anticipated for Each 3. Out-of-pocket Expenses in the Total All-inclusive Maximum Price and Reimbursement Rates 4. Rates for Additional Professional Services 5. Manner of Payment VII. EVALUATION PROCEDURES A. Audit Proposal Review Committee B. Review of Proposals C. Evaluation Criteria 1. Mandatory Elements 2. Technical Qualifications 3. Price D. Oral Presentations E. Final Selection F. Right to Reject Proposals 4 APPENDICES A. Findings from External Audits B. Organizational Chart C. List of Key Personnel, Office Locations and Telephone Numbers D. Proposer Guarantees E. Proposer Warranties F. Format for Summary Schedule of Professional Fees and Expenses and Detail to Support the Total All -Inclusive Maximum Price in Cost Proposal Submission. G . Impact of Financial Software Systems Replacement during Engagement (Separate Schedule of Fees in Cost Proposal Submission) H. Impact of GASB 34 Requirements during Engagement (Separate Schedule of Fees in Cost Proposal Submission) I. Summary Budget Information (Fiscal Years 1999-2001) J. Comprehensive Annual Financial Report — June 30, 1999 K. Redevelopment Agency Audited Financial Statements — June 30, 1999 L. Child Development Program Audited Financial Statements — June 30, 1999 M. Single Audit Act Report — June 30, 1998 N. City of San Rafael Professional Services Agreement O. San Rafael Redevelopment Agency Professional Services Agreement 5 CITY OF SAN RAFAEL REQUEST FOR PROPOSALS I. INTRODUCTION A. General Information The CITY OF SAN RAFAEL is requesting proposals from qualified firms of certified public accountants to audit its financial statements for the fiscal years ending June 30, 2000, 2001, 2002 with the option of auditing its financial statements for each of the two subsequent fiscal years ending June 30, 2003, and 2004. These audits are to be performed in accordance with generally accepted auditing standards, the standards set forth for financial audits in the General Accounting Office's (GAO) Government Auditing Standards (1994), the provisions of the federal Single Audit Act of 1984 (as amended in 1996) and U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations as well as the following additional requirements: Guidelines for Compliance Audits of California Redevelopment Agencies California Department of Education Audit Guide for Auditors of Child Development and Nutrition Programs Article XIIIB of the California Constitution - Appropriation Limit Any future changes or additions to the above standards or requirements will be followed during the term of the engagement. There is no expressed or implied obligation for the CITY OF SAN RAFAEL to reimburse responding firms for any expenses incurred in preparing proposals in response to this request. T u A pre -proposal conference for all the firms interested in submitting a proposal will be held at 2:00 p.m. on Friday, February 04, 2000, 1400 Fifth Avenue in City Council Chambers to answer questions about the engagement. After this pre -proposal conference, any inquiries concerning the request for proposals should be addressed to Dennis Shives, Assistant Director of Mgmt. Services — Finance Division. All interested audit firms will be forwarded a copy of the summarized questions and responses addressed at the pre -proposal conference by February 11, 2000. To be considered, one original and five (5) copies of a proposal must be received at the City Clerk's Office at 1400 Fifth Avenue, Room 209, City of San Rafael by 4:00 p.m. on Friday, February 25, 2000. The CITY OF SAN RAFAEL reserves the right to reject any or all proposals submitted. Proposals submitted will be evaluated by a four member Audit Proposal Review Committee consisting of: Assistant City Manager/Treasurer Assistant Director of Mgmt. Svcs. — Finance Div. Accountant — Finance Division Assistant Director -Community Services During the evaluation process, the Audit Proposal Review Committee and the CITY OF SAN RAFAEL reserve the right, where it may serve the CITY OF SAN RAFAEL's best interest, to request additional information or clarifications from proposers or to allow corrections of errors or omissions. At the discretion of the CITY OF SAN RAFAEL or the Audit Proposal Review Committee, firms submitting proposals may be requested to make oral presentations as part of the evaluation process. 7 The CITY OF SAN RAFAEL reserves the right to retain all proposals submitted and to use any ideas in a proposal regardless of whether that proposal is selected. Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposals, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the CITY OF SAN RAFAEL and the firm selected. It is anticipated the selection of a firm will be completed by April 07, 2000. Following the notification of the selected firm it is expected a contract will be executed between both parties by April 21, 2000. B. Term of Engagement A three (3) year contract with two additional option years exercised annually is contemplated, subject to the annual review and recommendation of the Audit Proposal Review Committee, the satisfactory negotiation of terms (including a price acceptable to both the CITY OF SAN RAFAEL and the selected firm), and the concurrence of the City Council and Redevelopment Agency Board. C. Subcontracting Firms submitting proposals are encouraged to consider subcontracting portions of the engagement to small audit firms or audit firms owned and controlled by socially and economically disadvantaged individuals. If this is to be done, that fact, and the name of the proposed subcontracting firms, must be clearly identified in the proposal. Following the award of the audit contract, no additional subcontracting will be allowed without the express prior written consent of the CITY OF SAN RAFAEL. II. NATURE OF SERVICES REQUIRED A. General The CITY OF SAN RAFAEL is soliciting the services of qualified funis of certified public accountants to audit its financial statements for the fiscal years ending June 30, 2000, 2001, 2003 with the option to audit the CITY OF SAN RAFAEL's financial statements for each of the two subsequent fiscal years. These audits are to be performed in accordance with the provisions contained in this request for proposals. 8 B. Scope of Work to be Performed The CITY OF SAN RAFAEL desires the auditor to express an opinion on the fair presentation of its general purpose financial statements in conformity with generally accepted accounting principles. The CITY OF SAN RAFAEL also desires the auditor to express an opinion on the fair presentation of its combining and individual fund and account group financial statements and schedules in conformity with generally accepted accounting principles. The auditor is not required to audit the supporting schedules contained in the comprehensive annual financial report. However, the auditor is to provide an "in -relation -to" opinion on the supporting schedules based on the auditing procedures applied during the audit of the general purpose financial statements and the combining and individual fund financial statements and schedules. The auditor is not required to audit the statistical section of the report. The auditor shall also be responsible for performing certain limited procedures involving required supplementary information required by the Governmental Accounting Standards Board as mandated by generally accepted auditing standards. The auditor is not required to audit the schedule of expenditures of federal awards. However, the auditor is to provide an "in -relation -to" report on that schedule based on the auditing procedures applied during the audit of the financial statements. C. Auditing Standards To Be Followed To meet the requirements of this request for proposals, the audit shall be performed in accordance with generally accepting auditing standards as set forth by the American Institute of Certified Public Accountants, the standards for financial audits set forth in the U.S. General Accounting Office's Government Auditing Standards (1994), the provisions of the Single Audit Act of 1984 (as amended in 1996) and the provisions of U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations, Audits of State and Local Governments, and the standards for financial and compliance audits contained in the Audit Guide for Auditors of Child Development Proerams Administered by Private. Private Non -Profit and Public Aeencies, issued by the State of California Department of Education. Any subsequent changes in these standards or requirements will be adhered to during the term of the engagement. 9 D. Reports to be Issued Following the completion of the audit of the fiscal year's financial statements, the auditor shall issue: 1. A report on the fair presentation of the financial statements in conformity with generally accepted accounting principles, including an opinion on the fair presentation of the supplementary schedule of expenditures of federal awards "in relation to" the audited financial statements. 2. A report on compliance and internal control over financial reporting based on an audit of the financial statements performed in accordance with Government Auditing Standards. 3. A report on compliance and internal control over compliance applicable to major federal and state financial assistance programs. In the required reports on compliance and internal controls, the auditor shall communicate any reportable conditions found during the audit. A reportable condition shall be defined as a significant deficiency in the design or operation of the internal control structure, which could adversely affect the organization's ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements. Reportable conditions that are also material weaknesses shall be identified as such in the report. Non -reportable conditions discovered by the auditors shall be reported in a separate letter to management, which shall be referred to in the reports on compliance and internal controls. The report on compliance and internal controls shall include all material instances of noncompliance. All nonmaterial instances of noncompliance shall be reported in a separate management letter, which shall be referred to in the report on compliance and internal controls. Irreeularities and illeeal acts. Auditors shall be required to 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: Rod Gould, City Manager Ken Nordhoff, Assistant City Manager Dennis Shives, Assistant Director of Management Svcs. 10 Renortine to the Audit Proposal Review Committee. Auditors shall assure themselves that the CITY OF SAN RAFAEL's Audit Proposal Review Committee is informed of each of the following: 1. The auditor's responsibility under generally accepted auditing standards 2. Significant accounting policies 3. Management judgments and accounting estimates 4. Significant audit adjustments 5. Other information in documents containing audited financial statements 6. Disagreements with management 7. Management consultation with other accountants 8. Major issues discussed with management prior to retention 9. Difficulties encountered in performing the audit E. Special Considerations 1. The financial statements of the San Rafael Sanitation District are included as a discretely presented component unit of the financial statements of the CITY OF SAN RAFAEL. It is anticipated that the auditor will not be required to provide special assistance to the San Rafael Sanitation District's audit firm of Vavrinek, Trine, Day & Company. 2. The CITY OF SAN RAFAEL will send its comprehensive annual financial report to the Government Finance Officers Association of the United States and Canada and the California Society of Municipal Finance Officers for review in their Certificate of Achievement for Excellence in Financial Reporting program. It is anticipated that the auditor will not be required to provide special assistance to the CITY OF SAN RAFAEL to meet the requirements of these programs. 3. The CITY OF SAN RAFAEL currently anticipates it will prepare one or more official statements in connection with the sale of debt securities which will contain the general purpose financial statements and the auditor's report thereon. The auditor shall be required, if requested by the fiscal advisor and/or the underwriter, to issue a "consent and citation of expertise" as the auditor and any necessary "comfort letters." 4. The CITY OF SAN RAFAEL has determined that the United States Department of Housing and Urban Development will function as the cognizant agency in accordance with the provisions of the Single Audit Act of 1984 (as amended in 1996) and U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. 5. The Schedule of Expenditures of Federal Awards and related auditor's report, as well as the reports on compliance and internal controls are not to be included in the comprehensive annual financial report, but are to be issued separately. 6. A list of findings and other weaknesses from the CITY OF SAN RAFAEL's most recent financial statement audit are included in this document (Appendix A). Of those findings and other weaknesses, management believes that the following have not been resolved: Fixed Assets: City needs to have a written policies and procedures manual. Accounting: City needs to have a comprehensive accounting policies and procedures manual. Child Develop. A revised Attendance and Fiscal Report is to be Programs: issued to the Calif. Dept. of Education correcting one instance of miscalculation on enrollment days and one instance of reported reimbursement. 12 7. Impact of Financial Systems replacement during term of engagement. The City has as a priority, the replacement of the current centralized hardware and software systems that are used for the Financial and Human Resources applications as well as other applications used in the Fire and Police departments. Based on a recently developed work plan, it is projected that during the fall of 2000 through fall of 2001 testing, data conversion and implementation phases for a new system migration would occur. Additionally, as part of the response to technical requirements, (Section VI. B.) information should be included as to what extent a migration to a new financial software system will have on the scope of the audit for both the City and the audit firm.(Also, see Appendix G. for additional annual cost impact information requested separately as part of the COST PROPOSAL). 8. Difficulties are anticipated in implementing and complying with the following specific reporting requirements recently mandated by the GASB: GASB STATEMENT NO. 34, BASIC FINANCIAL STATEMENTS — AND MANAGEMENT'S DISCUSSION AND ANALYSIS Requires development of new summary financial statements and a reconciliation between the current governmental fund financial statements and the new government -wide financial statements. Additionally, all capital assets, including infrastructure assets are to be recorded at historical cost and depreciation charges reported. Also conversion from modified accrual to full accrual basis in many activities will be a major undertaking. This new reporting model is required to be in place for the CITY OF SAN RAFAEL in the fiscal year beginning July 01, 2002. The CITY OF SAN RAFAEL will require the auditor's assistance to comply with these reporting requirements during the implementation phase and the subsequent reporting years. Additionally, as part of the response to the technical requirements (Section VI. B.) information should be included as to what extent these new requirements will have on the scope of the audit for both the City and audit firm. (Also, see Appendix H for additional cost information requested separately as part of the COST PROPOSAL). 13 F. Working Paper Retention and Access to Working Papers All working papers and reports must be retained, at the auditor's expense, for a minimum of three (3) years, unless the firm is notified in writing by the CITY OF SAN RAFAEL 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: CITY OF SAN RAFAEL SAN RAFAEL REDEVLEOPMENT AGENCY U.S. Department of Housing and Urban Development (HUD) U.S. General Accounting Office (GAO) State of California Department of Education Parties designated by the federal or state governments or by the CITY OF SAN RAFAEL as part of an audit quality review process Auditors of entities of which the CITY OF SAN RAFAEL is a sub - recipient of grant funds In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance. III. DESCRIPTION OF THE GOVERNMENT A. Name and Telephone Number of Contact Persons/Organizational Chart/Location of Offices The auditor's principal contact with the CITY OF SAN RAFAEL will be Dennis Shives, Assistant Director of Management Services — Finance Division, or a designated representative, who will coordinate the assistance to be provided by the CITY OF SAN RAFAEL to the auditor. An organizational chart (Appendix B) and a list of key personnel with the location of their principal offices (Appendix C) are attached. 14 B. Background Information The CITY OF SAN RAFAEL was incorporated as a Charter City, effective July 1, 1913 with a Council and a City Manager. The City Council consists of a directly elected Mayor and four council members, all elected to four year terms. The CITY OF SAN RAFAEL serves an area of 22 square miles with a population of 54,402. The CITY OF SAN RAFAEL's fiscal year begins on July 01 and ends on June 30. The CITY OF SAN RAFAEL provides the following services to its citizens: Police Protection: includes one station and 1 sub -station; 79 sworn and 29 Civilian personnel. Fire Protection: includes 6 fire stations, 47 firefighters, including 21 Paramedics. Streets: includes 158 miles with 85 major intersections signalized, and 4,000 street lights. Comm. Sacs: includes 22 parks and 3 recreation facilities. Child Care: Operates Preschool, Before and After -School Child Care at Eleven sites serving 1850 children, and 24 Camps and enrichment programs for youth and teens. Library: includes one facility with 130,000 annual volumes. Commnity provides plan checking, permit processing and general Development: plan updates and amendments. Also includes building and safety construction inspection and code enforcement and compliance. City Attorney: provides legal services to all City staff/departments and to Mayor, Council members and City Manager on issues related to land use, planning development, personnel, Municipal Code, liability assessment and litigation management, and review of City contracts, ordinances and resolutions. City Clerk: official custodian of documents, processes agendas/staff reports, accepts filing of petitions, Filing Official/Officer And Deputy City Treasurer. Elected Position. 15 City Manager: City and Agency wide administration; intergovernmental Relations and public information to the community at -large. Management comprised of Financial Services, Human Resources & Risk Services: Management Services, and Information Systems divisions under direction of the Assistant City Manager/City Treasurer. The CITY OF SAN RAFAEL has a total payroll of $25.7 million covering 425 full-time equivalent employees. This includes 363 full-time, 48 permanent part- time (Child Care Division) and approximately 30 seasonal part-time employees. The CITY OF SAN RAFAEL is organized into eleven departments and agencies and are titled as follows: Community Development Community Services City Attorney City Clerk Elected Officials & City Manager Fire Library & Cultural Affairs Management Services Police Public Works Economic Development/Redevelopment Agency An organization chart is included as Appendix B. The accounting and financial reporting functions of the CITY OF SAN RAFAEL are centralized .The Finance Division is responsible for the budget development, external financial reporting, debt administration, general ledger, payroll, accounts payable/receivables, cash receipts and revenue, fixed assets , parking citation collection and processing; business licenses and City-wide delinquency collection. Purchasing functions are de -centralized to departments with dollar limits requiring separate approvals. Additionally, a State approved CAL -Card Program for Credit Card purchases is used for small purchases by departments. 16 More detailed information on the government and its finances can be found in: DOCUMENT LOCATION CONTACT FY 1999-2001 Annual Budget Finance Dennis Shives FY 1998-99 C.A.F.R. Finance Dennis Shives Financial Records Finance Cindy Mosser Agendas/Minutes City Clerk Jeanne Leoncini Ordinances/Resolutions City Clerk Jeanne Leoncini Municipal Code/Legal Doc's. City Attorney Gus Guinan Official Statements Finance Dennis Shives Personnel Rules Human Resources Daryl Chandler Employee Memorandum's of Understanding :(7 as follows) Human Resources Daryl Chandler (Fire Fighter's Assoc., Fire Chief's Officer Assoc., Police Assoc., Police Mid -Managers Assoc., Marin Assoc. of Public Employees - Miscellaneous Unit; Supervisory Unit; Child Care Unit.) Salary Resolutions:(2 as follows) Human Resources Daryl Chandler (Mid -Management -non safety; Part -Time Hourly/Seasonal ) Worker's Compensation/Liability Reports/Files Risk Management Sharon Andrus Calif. Dept. of Education Community Services: Child Care & Develop. Contracts Child Care Bill Sharf 17 C. Fund Structure The CITY OF SAN RAFAEL uses a total of 58 funds for internal accounting and general ledger purposes which are summarized into the following fund types and account groups in its financial reporting: * Includes 3 Agency Funds ** Includes 4 Agency Funds D. Budgetary Basis of Accounting and Reporting The CITY OF SAN RAFAEL prepares its budgets on a basis consistent with generally accepted accounting principles except for capital project funds, which are adopted on a project length basis. Capital improvement budgets are used for the entire project until completion; re -appropriating unused appropriations from year to year. The current budget is a two-year appropriation, with mid -year reviews to occur annually. The budget is prepared and tracked on a program basis, with resources and costs allocated between programs. Additionally, each program is described, has defined goals and two year objectives and includes key result areas which are the activities need to achieve the goal. Performance measurements are listed and used to quantify the results. 18 Number of Number With Individual Legally Adopted Fund TVDe/Account Grout Funds Annual Budgets General fund 1 _1 Special revenue funds _17_ _17_ Debt service funds 8—* 6 Capital projects funds 9_** 0_ Enterprise funds 0_ Internal service funds 3 3 Expendable trust funds 4_ 0_ Non -expendable trust funds _ 0_ 0_ Pension trust funds 0 0 Agency funds (Capital Proj.& Admin.) _ 1_ 0_ General fixed assets account group 1_ NA General long-term debt account group 1_ NA * Includes 3 Agency Funds ** Includes 4 Agency Funds D. Budgetary Basis of Accounting and Reporting The CITY OF SAN RAFAEL prepares its budgets on a basis consistent with generally accepted accounting principles except for capital project funds, which are adopted on a project length basis. Capital improvement budgets are used for the entire project until completion; re -appropriating unused appropriations from year to year. The current budget is a two-year appropriation, with mid -year reviews to occur annually. The budget is prepared and tracked on a program basis, with resources and costs allocated between programs. Additionally, each program is described, has defined goals and two year objectives and includes key result areas which are the activities need to achieve the goal. Performance measurements are listed and used to quantify the results. 18 E. Federal and State Awards During any of the fiscal years to be audited, the CITY OF SAN RAFAEL may receive federal or state awards. F. Pension Plans The CITY OF SAN RAFAEL participates in the following pension plans: Multiple-Emplover Sinele-Emnlover Cost- Defined Plan Sharing Agent Benefit Contrib. Marin County Employee Retirement Fund X Public Agency Retirement System(for non -County X retirement system Employees) Public Agency Retirement System (IRS 401 c plan for X Management is under review) G. Component Units The CITY OF SAN RAFAEL is defined, for financial reporting purposes, in conformity with the Governmental Accounting Standards Board's Codification of Governmental Accounting and Financial Reporting Standards, Section 2100. Using these criteria, component units are included in the CITY OF SAN RAFAEL's financial statements. The management of the CITY OF SAN RAFAEL identified the following component units for inclusion in the CITY OF SAN RAFAEL's financial statements as of June 30, 2000. SAN RAFAEL REDEVELOPMENT AGENCY Year -End: JUNE 30`h SAN RAFAEL JOINT POWERS FINANCING AUTHORITY Year -End: JUNE 30`h FRIENDS OF SAN RAFAEL Year -End: JUNE 30TH (Established in FY1999-00 and we believe will be subject to audit in this year) 19 These component units are to be audited as part of the audit of the CITY OF SAN RAFAEL's financial statements. The management of the CITY OF SAN RAFAEL has determined that the following potential component units should not be included in the CITY OF SAN RAFAEL's financial statements for the following reasons: Potential Component Unit Reason for Exclusion Various Agencies, Boards, Commissions, No Oversight Responsibility Committees, Districts and Districts reflected In Appendix B —Organization Chart H. Joint Power Agreements NAME OF NAME OF OTHER TYPE OF JOINT POWER PARTICIPATING GOVERNMENT(S)_ SERVICES PROVIDED Calif. Joint Powers Risk Mgmt. Authority 120 Calif. public agencies Pooled self-insurance for losses I. Joint Ventures The CITY OF SAN RAFAEL does participate in joint ventures with other governments. NAME OF NAME OF OTHERTYPE OF JOINT VENTURE PARTICIPATING GOVERNMENT(S) SERVICES PROVIDED Marin County Integrated Cities of San Rafael, Mill Procurement & operation of an On -Line Library System Valley, Sausalito, County on-line library system. Of Marin. Marin Street Light Acquisition Joint Power Authority Marin Emergency Radio Authority County of Marin & 12 Local Agencies County of Marin & 25 Local Agencies 20 Acquire street lights & facilities. Manage, own and operate a County -wide public safety and emergency radio system. Countywide Planning County of Marin & 10 Standards for traffic, Agency local cities water & sewer facilities. Marin County Cable Rate Regulation Joint Powers Authority Seven Local Cities Marin County Major Crimes Twelve local law Task Force enforcement agencies Marin County Hazardous County of Marin & and Solid Waste Joint Local Cities Powers Authority J. Magnitude of Finance Operations Regulate rates for cable television service and equipment. Funding and policy direction of peace officers to detect and prosecute major crimes. Implement source reduction and recycling elements in County The finance division of the Management Services Department is headed by Dennis Shives, Assistant Director of Management Services — Finance Division and consists of ten full-time and 1 part-time employees. The principal functions performed and the number of employees assigned to each are as follows: Function Number of Emnlovees Division Manager 1 General Ledger/Budgeting 3 Payroll 1 Accounts Payable 1 Parking Citation Collect./ Cash Receipting 1 Business License 2.5 Customer Service/Recep. 1 K. Computer Systems Hardware TVDe of Eauiament Number Make of Eauioment Networked? Centralized MainFrame 1 UNIX Operating Sys. Personal Computers 200 Data General Various 21 No Yes -City Wide L. Software Vendor Maior Applications BRC General Ledger, Payroll/Human Resources, Accounts Payable, Purchasing, Cash Receipting, Financial Reporting (Prime — PICK Information Language) HDL Business License Administration (PC — Windows) ESCOM Software Svcs. Recreation Programs & Facilities (PC — Windows) Softerware, Inc. Child Care Billing System (PC — Windows) Enforcement Technology Parking Citation Issuance System (PC — Windows) Timeslips Time & Billing System (PC — Windows) Microsoft Office Budget Development, Word Processing Suite -Windows (Word, Excel, Access, Powerpoint) Availability of Prior Audit Reports and Working Papers Interested proposers who wish to review prior years' audit reports and management letters should contact DENNIS SHIVES at 1400 Fifth Avenue, San Rafael, Calif. 94901. Telephone number is (415) 485-3455. E-mail dennis.shives @ ci.san-rafael.ca.us. The CITY OF SAN RAFAEL will use its best efforts to make prior audit reports and supporting working papers available to proposers to aid their response to this request for proposals. 22 IV. TIME REQUIREMENTS A. Proposal Calendar The following is a list of key dates up to and including the date proposals are due to be submitted: Request for proposal issued JAN. 18, 2000 Due date for notification of interest JAN. 31, 2000 Preproposal conference FEB. 04, 2000 Due date for proposals FEB. 25, 2000 B. Notification and Contract Dates Selected firm notified MAR 31, 2000 Contract Negotiated/Finalized APR. 07, 2000 City Council/Agency Award APR. 17, 2000 Contract Date APR. 21, 2000 C. Date Audit May Commence MAY 01, 2000 The CITY OF SAN RAFAEL will have records available for interim audit work and management personnel available to meet with the firm's personnel as of May 01, 2000. D. Schedule for the June 30, 2000, 2001 and 2002, Fiscal Year Audits (A similar time schedule will be developed for audits of future fiscal years if the CITY OF SAN RAFAEL exercises its option for additional audits). 23 Each of the following should be completed by the auditor no later than the dates indicated. 1. Interim Work The auditor shall complete interim work by June 30`h 2. Detailed Audit Plan The auditor shall provide the Assistant Director of Mgmt. Svcs. —Finance Division by July 01 both a detailed audit plan and a list of all schedules to be prepared by the CITY OF SAN RAFAEL. 3. Fieldwork The auditor shall complete all fieldwork by September 30th 4. Draft Reports The auditor shall have drafts of the audit reports and recommendations to management available for review by the Assistant City Manager and Assistant Director of Mgmt. Services as outlined below: Report Tvve Annual Due Date General Purpose Financial Statements October 31 Redevelopment Agency October 31 Child Development Program October 15 Single Audit November 30 Gann Appropriation November 30 E. Entrance Conferences, Progress Reporting and Exit Conferences (A similar time schedule will be developed for audits of future fiscal years if the CITY OF SAN RAFAEL exercises its option for additional audits). 24 At a minimum, the following conferences should be held by the dates indicated on the schedule: Week of Entrance conference with all May 01 key finance division personnel The purpose of this meeting will be to discuss prior audit problems and to identify the key internal controls and interim work to be performed. This meeting will also be used to establish overall liaison for the audit and to make arrangements for work space and other needs of the auditor Progress conference with Assist. Director June 26 Of Mgmt. Svcs. — Finance Division and key finance division personnel The purpose of this meeting will be to summarize the results of the preliminary review, and to discuss the year-end work to be performed Entrance conference with Assist. Dir. of Sept. 05 Mgmt. Svcs. — Finance Divison and key Finance Divison personnel to commence year-end audit work 25 Exit conference with Assist. Dir. Of Mgmt. Oct. 09 Svcs. — Finance Div. and key Finance Divison Personnel The purpose of this meeting will be to summarize the results of the field work and to review significant findings F. Date Final Report is Due The Auditor shall prepare draft financial statements, notes, and all required supplementary schedules, in CAFR ready format, by the dates indicated in Section IV D 4 above. The Auditor shall provide all recommendations, revisions and suggestions for improvement to the Assist. Dir. of Mgmt. Svcs. -Finance by November 30`s. The Assist. Dir. of Mgmt. Svcs. -Finance and designated finance division personnel will complete their review of the draft report as expeditiously as possible. It is not expected that this process should exceed one week. During that period, the auditor should be available for any meetings that may be necessary to discuss the audit reports. Once all issued for discussion are resolved, the final signed reports, in CAFR ready format, shall be delivered within ten work days to the Assistant Director of Mgmt. Svcs. — Finance Division at 1400 Fifth Avenue, San Rafael, Calif. 94901 The required quantities of reports are as follows: No. No. Tvne of Report Bound Unbound General Purpose Financial Statements 25 Redevelopment Agency Report 20 Child Develop. Program Report 15 Single Audit Report 10 Gann Calculation Report 5 OR V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Division and Clerical Assistance The finance division staff and responsible management personnel will be available during the audit to assist the firm by providing information, documentation and explanations. The preparation of confirmations will be the responsibility of CITY OF SAN RAFAEL. In addition twenty-five hours of clerical support will be made available to the auditor for the preparation of routine letters and memoranda. B. Other Departmental Assistance Responsible staff personnel from the Redevelopment Agency, Child Care Program, Public Works, Library and other departments as the need occurs, will be available for information and documentation during the audit. C. Information Services Division (I.S.) Assistance The following I.S. Division personnel will be available to assist the auditor in performing the engagement: Position Hours Programmer Analyst 40 I.S. personnel will also be available to provide systems documentation and explanations. The auditor will not be provided computer time and the use of the CITY OF SAN RAFAEL's computer hardware and software. Auditors will be allowed to inquire into all subsystems to review transactions through coordination with the City. 27 D. Reports and Schedules to be Prepared by the Staff of the CITY OF SAN RAFAEL The staff of CITY OF SAN RAFAEL will provide the year-end general ledger reports and schedules requested by the auditor using available computer generated reports and minimal supporting manually prepared schedules at a date mutually agreed to by both the auditor and the City staff. The current financial software applications do not provide for the direct down -load to other systems. E. Work Area, Telephones, Photocopying and FAX Machines The CITY OF SAN RAFAEL will provide the auditor with reasonable work space, desks and chairs. The auditor will also be provided with reasonable access to telephone lines, photocopying facilities and FAX machines. However, there will be occasions when the normal work day may be reduced in hours to accommodate meetings in occupied rooms. F. Report Preparation Report preparation, editing and printing shall be the responsibility of the auditor. VI. PROPOSAL REQUIREMENTS A. General Requirements I. Submission of Notification of Interest Firms interested in submitting a proposal must submit by January 31, 2000 their "Notification of Interest" in the format attached to the letter transmitting this Request for Proposal. Failure to do so will disqualify firms from submitting a proposal. 2. Pre -proposal Conference A conference for firms interested in submitting proposals will be held at 2:00 p.m. on Friday February 04, 2000 at the City Council Chamber, 1400 Fifth Avenue, San Rafael, Calif.94901. Both verbal and written questions will be accepted during the conference. A summary of the questions and responses of the pre -proposal conference will be distributed by Feb. 11, 2000, to all firms that submit a "Notification of Interest." W 3. Inquiries Inquiries concerning the request for proposals and the subject of the request for proposals must be made to: Dennis Shives, Assistant Director of Mgmt. Svcs. -Finance Division City of San Rafael 1400 Fifth Avenue, Room 204 San Rafael, Calif. 94901 Phone: (415) 485-3455 E-mail dennis.shives@san-rafael.ca.us CONTACT WITH PERSONNEL OF THE CITY OF SAN RAFAEL OTHER THAN DENNIS SHIVES. ASSISTANT DIRECTOR OF MGMT. SVCS. REGARDING THIS REOUEST FOR PROPOSALS MAY BE GROUNDS FOR ELIMINATION FROM THE SELECTION PROCESS. 4. Submission of Proposals The following material is required to be received by 4:00 p.m. on Friday, February 25, 2000 for a proposing firm to be considered: a. A master copy (so marked) of a Technical Proposal and five copies to include the following: i. Title Pate Title page showing the request for proposals subject; the firm's name; the name, address and telephone number of the contact person; and the date of the proposal. ii. Table of Contents iii. Transmittal Letter A signed letter of transmittal briefly stating the proposer's understanding of the work to be done, the commitment to perform the work within the time period, a statement why the firm believes itself to be best qualified to perform the engagement and a statement that the proposal is a firm and irrevocable offer for ninety (90)days. 29 iv. Detailed Proposal The detailed proposal should follow the order set forth in Section VI B of this request for proposals. v. Executed copies of Proposer Guarantees and Proposer Warranties, attached to this request for proposal (Appendix D and Appendix E) b. The proposer shall submit an original and five copies of a dollar cost bid (APPENDIX F pages 1 thru 6; APPENDIX G and APPENDIX H) in a separate sealed envelope marked as follows: SEALED DOLLAR COST BID PROPOSAL FOR CITY OF SAN RAFAEL FOR PROFESSIONAL AUDITING SERVICES DUE: FEBRUARY 25, 2000 C. Proposers should send the completed proposal consisting of the two separate envelopes to the following address: J. Leoncini, City Clerk City of San Rafael 1400 Fifth Avenue, Room 209 San Rafael, Calif. 94901 B. Technical Proposal 1. General Requirements The purpose of the Technical Proposal is to demonstrate the qualifications, competence and capacity of the firms seeking to undertake an independent audit of the CITY OF SAN RAFAEL in conformity with the requirements of this request for proposals. As such, the substance of proposals will carry more weight than their form or manner of presentation. The Technical Proposal should demonstrate the qualifications of the firm and of the particular staff to be assigned to this engagement. It should also specify an audit approach that will meet the request for proposals requirements. 30 THERE SHOULD BE NO DOLLAR UNITS OR TOTAL COSTS INCLUDED IN THE TECHNICAL PROPOSAL DOCUMENT. The Technical Proposal should address all the points outlined in the request for proposals (excluding any cost information which should only be included in the sealed dollar cost bid). The Proposal should be prepared simply and economically, providing a straightforward, concise description of the proposer's capabilities to satisfy the requirements of the request for proposals. While additional data may be presented, the following subjects, items Nos. 2 through 9, must be included. They represent the criteria against which the proposal will be evaluated. 2. Independence The firm should provide an affirmative statement that is independent of the CITY OF SAN RAFAEL as defined by the U.S. General Accounting Office's Government Auditing Standards (1994)] The firm also should provide an affirmative statement that it is independent of all of the component units of the CITY OF SAN RAFAEL as defined by those same standards. The firm should also list and describe the firm's (or proposed subcontractors') professional relationships involving the CITY OF SAN RAFAEL or any of its agencies or component units for the past five (5) years, together with a statement explaining why such relationships do not constitute a conflict of interest relative to performing the proposed audit. In addition, the firm shall give the CITY OF SAN RAFAEL written notice of any professional relationships entered into during the period of this agreement. 3. License to Practice in California An affirmative statement should be included that the firm and all assigned key professional staff are properly licensed to practice in California. 31 4. Firm Qualifications and Experience The proposer should state the size of the firm, the size of the firm's governmental audit staff, the location of the office from which the work on this engagement is to be performed and the number and nature of the professional staff to be employed in this engagement on a full-time basis and the number and nature of the staff to be so employed on a part-time basis. If the proposer is a joint venture or consortium, the qualifications of each firm comprising the joint venture or consortium should be separately identified and the firm that is to serve as the principal auditor should be noted, if applicable. The firm is also required to submit a copy of the report on its most recent external quality control review, with a statement whether that quality control review included a review of specific eovernment engagements. The firm shall also provide information on the results of any federal or state desk reviews or field reviews of its audits during the past three (3) years. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with state regulatory bodies or professional organizations. 5. Partner, Supervisory and Staff Qualifications and Experience Identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assiened to the eneaeement. Indicate whether each such person is licensed to practice as a certified public accountant in California. Provide information on the government auditing experience of each person, including information on relevant continuing professional education for the past three (3) years and membership in professional organizations relevant to the performance of this audit. Provide as much information as possible regarding the qualifications, experience and training, including relevant continuing professional education, and any pertinent knowledge or experience from workshops related to the reporting requirements for the specific staff to be assiened to this eneaeement. Describe experience and knowledge of Single Audit Act requirements, Redevelopment Agency and Child Development Program auditing and reporting. Indicate how the quality of staff over the term of the agreement will be assured. 32 Engagement partners, managers, other supervisory staff and specialists may be changed if those personnel leave the firm, are promoted or are assigned to another office. These personnel may also be changed for other reasons with the express prior written permission of the CITY OF SAN RAFAEL. However, in either case, the CITY OF SAN RAFAEL retains the right to approve or reject replacements. Consultants and firm specialists mentioned in response to this request for proposal can only be changed with the express prior written permission of the CITY OF SAN RAFAEL, which retains the right to approve or reject replacements. Other audit personnel may be changed at the discretion of the proposer provided that replacements have substantially the same or better qualifications or experience. 6. Similar Engagements With Other Government Entities For the firm's office that will be assigned responsibility for the audit, list the most significant engagements (maximum - 5) performed in the last five years that are similar to the engagement described in this request for proposal. These engagements should be ranked on the basis of total staff hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact. 7. Specific Audit Approach The proposal should set forth a work plan, including an explanation of the audit methodology to be followed, to perform the services required in Section II of this request for proposal. In developing the work plan, reference should be made to such sources of information as CITY OF SAN RAFAEL's budget and related materials, organizational charts, internal procedures, and financial and other management information systems. 33 Proposers will be required to provide the following information on their audit approach: a. Proposed segmentation of the engagement b. Level of staff and number of hours to be assigned to each proposed segment of the engagement Sample size and the extent to which statistical sampling is to be used in the engagement d. Type and extent of analytical procedures to be used in the engagement Approach to be taken to gain and document an understanding of the CITY OF SAN RAFAEL's internal control structure f. Approach to be taken in determining laws and regulations that will be subject to audit test work g. Approach to be taken in drawing audit samples for purposes of tests of compliance 8. Identification of Anticipated Potential Audit Problems The proposal should identify and describe any anticipated potential audit problems, the firm's approach to resolving these problem and any special assistance that will be requested from the CITY OF SAN RAFAEL. Additionally, the proposal should address the following two issues: 1) Impact of Financial Software Systems Replacement. The City has as a priority, the replacement of the current centralized hardware and software systems that are used for the Financial and Human Resources applications as well as other applications used in the Fire and Police departments. Based on a recently developed work plan, it is projected that during the fall of 2000 through fall of 2001 testing, data conversion and implementation phases for a new system migration would occur. Additionally, as part of the response to technical requirements, (Section VI. B.) information should be included as to what extent a migration to a new financial software system will have on the scope of the audit for both the City and the audit firm.(Also, see Appendix G. for additional annual cost impact information requested separately as part of the COST PROPOSAL). 34 2.) Impact of: GASB STATEMENT NO. 34, BASIC FINANCIAL STATEMENTS —AND MANAGEMENT'S DISCUSSION AND ANALYSIS. Requires development of new summary financial statements and a reconciliation between the current governmental fund financial statements and the new government -wide financial statements. Additionally, all capital assets, including infrastructure assets are to be recorded at historical cost and depreciation charges reported. Also conversion from modified accrual to full accrual basis in many activities will be a major undertaking. This new reporting model is required to be in place for the CITY OF SAN RAFAEL in the fiscal year beginning July 01, 2002. The CITY OF SAN RAFAEL will require the auditor's assistance to comply with these reporting requirements during the implementation phase and the subsequent reporting years. Additionally, as part of the response to the technical requirements (Section VI. B.) information should be included as to what extent these new requirements will have on the scope of the audit for both the City and audit firm. (Also, see Appendix H for additional cost information requested separately as part of the COST PROPOSAL). 9.. Report Format The proposal should include sample formats for required reports. NO DOLLARS SHOULD BE INCLUDED IN THE TECHNICAL PROPOSAL C. Sealed Dollar Cost Bid 1. Total All -Inclusive Maximum Price The sealed dollar cost bid should contain all pricing information relative to performing the audit engagement as described in this request for proposal. The total all-inclusive maximum price to be bid is to contain all direct and indirect costs including all out-of-pocket expenses. The CITY OF SAN RAFAEL will not be responsible for expenses incurred in preparing and submitting the technical proposal or the sealed dollar cost bid. Such costs should not be included in the proposal. 35 The first page of the sealed dollar cost bid should include the following information: a. Name of Firm b. Certification that the person signing the proposal is entitled to represent the firm, empowered to submit the bid, and authorized to sign a contract with the CITY OF SAN RAFAEL. C. The remaining pages of the sealed dollar cost bid should include the following information: A Total All -Inclusive Maximum Price for each year of the three year engagement, plus the all-inclusive maximum price for each of the two option years. Appendix F, Page 1 provides a format for the pricing information that is required. 2. Rates by Partner, Specialist, Supervisory and Staff Level Times Hours Anticipated for Each Additionally, the sealed dollar cost bid should include a schedule of professional fees and expenses, presented in the format provided in the attachment (Appendix F Pages 2 through 6), that supports the total all- inclusive maximum price for FY 1999-2000 audit requirements. 3. Out-of-pocket Expenses Included in the Total All-inclusive Maximum Price and Reimbursement Rates All estimated out-of-pocket expenses to be reimbursed should be presented on the third page of the sealed dollar cost bid in the format provided in the attachment (Appendix F Pages 2 thru 6). All expense reimbursements will be charged against the total all-inclusive maximum price submitted by the firm. 36 4. Rates for Additional Professional Services If it should become necessary for CITY OF SAN RAFAEL to request the auditor to render any additional services to either supplement the services requested in this RFP or to perform additional work as a result of the specific recommendations included in any report issued on this engagement, then such additional work shall be performed only if set forth in an addendum to the contract between CITY OF SAN RAFAEL and the firm. Any such additional work agreed to between CITY OF SAN RAFAEL and the firm shall be performed at the same rates set forth in the schedule of fees and expenses included in the sealed dollar cost bid. APPENDICES G AND H ARE TO BE COMPLETED AND RETURNED IN THE SEALED DOLLAR COST BID DOCUMENT BUT ARE NOT INCLUDED IN THE POINTS AWARDED IN THE PRICE CRITERIA. 5. Manner of Payment Progress payments will be made on the basis of hours of work completed during the course of the engagement and out-of-pocket expenses incurred in accordance with the firm's dollar cost bid proposal. Interim billing shall cover a period of not less than a calendar month. Ten percent (10%) will be withheld from each billing pending delivery of the firm's final reports. VII. EVALUATION PROCEDURES A. Audit Proposal Review Committee Proposals submitted will be evaluated by a four member Audit Proposal Review Committee, consisting of Assistant City Manager/Treasurer Assist. Director of Mgmt. Svcs. — Finance Division Accountant — Finance Division Assistant Director of Community Services 37 B. Review of Proposals The Audit Proposal Review Committee will use a point formula during the review process to score proposals. Each member of the Audit Proposal Review Committee will first score each technical proposal by each of the criteria described in Section VII C below. The full Audit Proposal Review Committee will then convene to review and discuss these evaluations and to combine the individual scores to arrive at a composite technical score for each firm. At this point, firms with an unacceptably low technical score will be eliminated from further consideration. After the composite technical score for each firm has been established, the sealed dollar cost bid will be opened and additional points will be added to the technical score based on the price bid. The maximum score for price will be assigned to the firm offering the lowest total all-inclusive maximum price. Appropriate fractional scores will be assigned to other proposers. The CITY OF SAN RAFAEL reserves the right to retain all proposals submitted and use any idea in a proposal regardless of whether that proposal is selected. C. Evaluation Criteria Proposals will be evaluated using three sets of criteria. Firms meeting the mandatory criteria will have their proposals evaluated and scored for both technical qualifications and price. The following represent the principal selection criteria which will be considered during the evaluation process. 1. Mandatory Elements a. The audit firm is independent and licensed to practice in California. b. The firm has no conflict of interest with regard to any other work performed by the firm for the CITY OF SAN RAFAEL C. The firm adheres to the instructions in this request for proposal on preparing and submitting the proposal d. The firm submits a copy of its last external quality control review report and the firm has a record of quality audit work. 38 2. Technical Quality: (Maximum Points - 60) Expertise and Experience (1) The firm's past experience and performance on comparable government engagements and scope of work. (2) The quality and experience of the firm's professional personnel to be assigned to the engagement and the quality of the firm's management support personnel to be available for technical consultation and response. b. Audit Approach (1) Adequacy of proposed staffing plan for various segments of the engagement (2) Adequacy of sampling techniques (3) Adequacy of analytical procedures 3. Price: (Maximum Points — 40) COST WILL NOT BE THE PRIMARY FACTOR IN THE SELECTION OF AN AUDIT FIRM D. Oral Presentations During the evaluation process, the Audit Proposal Review Committee may, at its discretion, request any one or all firms to make oral presentations. Such presentations will provide firms with an opportunity to answer any questions the Audit Proposal Review Committee may have on a firm's proposal. Not all firms may be asked to make such oral presentations. E. Final Selection The City Council and Redevelopment Board will select a firm based upon the recommendation of the Audit Proposal Review Committee. It is anticipated that a firm will be selected by March 31, 2000. Following notification of the firm selected, it is expected a contract will be executed between both parties by April 21, 2000, after award on April 17, 2000. 39 F. Right to Reject Proposals Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposal unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the CITY OF SAN RAFAEL and the firm selected. The CITY OF SAN RAFAEL reserves the right without prejudice to reject any or all proposals. 40 EXHIBIT B City of San Rafae- Proposal to Perform Professional Auditing Services For the years ended June 30, 2000 through June 30, 2002, with options for June 30, 2003 and June 30, 2004 Submitted Februanj 20, 2000 +1. Contact Person: Stephen L. Larson Caporicci, Cropper & Larson, LLP Certified Public Accountants 1575 Treat Blvd., Suite 208 Walnut Creek, CA 94598 Telephone: (925) 932-3860 C CL Caporicci, Cropper & Larson, LLP Certified Public Accountants CITY OF SAN RAFAEL Table of Contents Proposal Page Summary of Proposal 1 Letter of Transmittal 9 Independence, License to Practice, and Insurance 15 Firm Qualifications and Experience 19 - About the Firm - Governmental and Non -Profit Accounting Experience - Other Accounting and Auditing Experience - Quality Review Letter Partner, Supervisory and Staff Qualifications and Experience 27 Similar Engagements with Other Governmental Entities Specific Audit Approach 43 Understanding of Requested Services Audit Approach - Objectives of our Services - Work Plan - Audit Schedule Identification of Anticipated Potential Audit Problems 57 Report Format 63 No Fee Services f7 Conclusion 71 I i �i � i li 11 Idlil it I l i Lig � i� I �41�1i I l i iai � i Summary of Provosal L I, 1 CI'T'Y OF SAN RAFAEL Summary of Proposal Introduction This overview is presented to provide you with a general knowledge of the contents of the proposal and to allow you to quickly: gain an understanding of our Firm . review the qualifications of the Firm and members of the Engagement Team �• . identify services provided to the City at no additional cost . locate City required documents Firm Oualifications The accounting firm of Caporicci, Cropper & Larson, Certified Public Accountants, LLP (the "Firm") provides auditing, accounting, and advisory services to numerous governmental entities throughout California. With offices located in Irvine and Walnut Creek and a staff of 22 audit professionals, the Firm serves a variety of cities and counties throughout California as well as conducting financial related services for the State of California and various Federal agencies. Names and phone numbers of several of our current clients and other references are provided for your inquiries. We encourage you to contact these individuals to obtain information on the quality of the audit and the ability of the audit staff. In addition to specific city financial statements, the Firm has also audited redevelopment agencies, child development programs, transportation authorities, public financing authorities, special districts, OCJP grants, self insurance pools, joint power authorities and has also performed numerous compliance audits in accordance with the Single Audit Act, TOT audits, franchise audits, and other special projects. The Firm has also issued numerous "comfort letters" on bond offerings as well as performed special projects of various types. Several of our city clients currently receive the GFOA and CSMFO awards for reporting excellence. The Firm is a member of the Private Companies Practice Section of the AICPA and received a positive peer review report on its system of quality control. The Partners of the Firm have over 100 years of practical experience encompassing all aspects of the financial arena. For eleven years, Mr. Gary M. Caporicci, the assigned Engagement Partner for the City of San Rafael (the "City"), held various positions with Coopers & Lybrand including its head of the governmental audit practice for the Southwest Region of the United States responsible for offices located in Houston, Austin, New Orleans, and Oklahoma City. Gary is also a national reviewer for the GFOA and has literally participated in hundreds of city audits of all sizes. Mr. Stephen L. Larson, the second Partner assigned 3 CITY OF SAN RAFAEL Summary of Proposal to the engagement served for many years in a variety of positions with Arthur Young & Company (currently Ernst & Young) and Coopers & Lybrand in their audit and consulting areas. Steve provides expertise in Single Audit compliance requirements and internal control structure evaluation. Firm policy requires that the Engagement Partner, during the first year of the engagement, be actively involved in the daily fieldwork. This means to the City that Gary will actually be on-site during much of the audit coordinating the audit process, supervising the audit staff, gaining a hands-on understanding of City processes, and benefiting the City with his broad municipal experience. In addition, Steve will also be on-site overseeing the internal control and Single Audit efforts. We have found that this effort by both Partners benefits the City and the Firm through developing a thorough knowledge of City practices and issues, and establishing a close working relationship with the City's Management. Additionally, continuity of audit personnel is assured because of the hands on involvement of the two partners. The two professional staff assigned to the Engagement are qualified and experienced. Each individual of the Engagement Team has several years of experience and has conducted or participated in numerous municipal audits of various sizes. Their understanding of city operations and the various authoritative guidelines will provide the where -with -all to perform the audit in an efficient and effective manner with minimal disruption to the City's finance department. Technical Avvroach 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 City operations and detailed planning at the initial stages of the audit. Open communication lines with all parties of the Engagement Team and City Management and Staff throughout the engagement eliminates "surprises". Initial planning and proper assignment of duties to experienced personnel provide for an effective and efficient audit process. Consequently, inefficiencies, disruptions, and lack of understanding are kept to a minimum. The audit approach will consist of four phases: Initial Planning Meeting: Both Partners will meet with City Management to discuss audit approach, identify specific needs of City Management, and familiarize themselves with City policies and practices. 4 CITY OF SAN RAFAEL Summary of Proposal Interim: For two weeks in May, three Engagement Team members will perform the internal control reviews, test transactions, evaluate compliance with Single Audit Act requirements, identify 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 responsibilities and assignments. Year end: For three weeks in August/ September, four Engagement Team members will conduct validation procedures on general ledger account balances, develop financial statement report formats, prepare the necessary financial reports for the City and its related entities, complete confirmation procedures, perform analytical procedures on revenue and expenditures, perform search for unrecorded liabilities, complete compliance work on Federal Financial Assistance, and wrap up audit field work. Reporting: Financial statements and reports for all City reporting entities and compliance requirements will be finalized along with Single Audit Reports and Management Letter comments. Drafts of the various financial statements and reports will be provided to City Management for review prior to finalization and printing. Both Partners will be available to present the financial reports to the City Council. The audit process will be completed and all reports issued within the time frames established by the City. Additionally, we will prepare the financial reports in accordance with GFOA and CSMFO reporting guidelines. No Fee Services The Firm will provide other services at no additional cost to the City: . The Firm will provide the City with at least 30 hours of consulting service in each of the audit years at no cost to the City. . The Firm will provide periodic updates to City Management on recent developments in governmental accounting and reporting at no cost to the City. 5 CITY OF SAN RAFAEL Summary of Proposal . The Firm will perform the agreed upon procedures to review the GANN Appropriations Limit calculations at no cost to the City. . The Firm will provide ongoing advisory services to respond to questions by City staff to assist in the running of City operations and implementation of improved operating procedures at no cost to the City. Conclusion A relationship with the City of San Rafael will be of great value to our Firm and we stand ready to commit our resources, knowledge, experience, and expertise to the benefit of your City. We possess the technical qualifications and experience to provide the level of service desired and expected by you and pledge to you our complete commitment to providing the City of San Rafael with the highest quality of service possible. Thank you for allowing us to present our firm. Walnut Creek, California February 20, 2000 6 CITY OF SAN RAFAEL Summary of Proposal APPENDIX D PROPOSER GUARANTEES I. The proposer certifies it can and will provide and make available, at a minimum, all services set forth in Section II, Nature of Services Required. H. The proposer agrees to enter into and be bound by the two separate Agreements for Auditing Services described in Appendices N and O. . Signature of Official: '�*L fZ—, Name (typed): Stephen L. Larson Title: Partner Firm: Caporicci, Cropper & Larson, Certified Public Accountants, LLP Date: February 20, 2000 7 CITY OF SAN RAFAEL Summary of Proposal APPENDIX E PROPOSER WARRANTIES A. Proposer warrants that it is willing and able to comply with State of California laws with respect to foreign (non -state of California) corporations. B. Proposer warrants that it will not delegate or subcontract its responsibility under an agreement without the prior written permission of the City of San Rafael. C. Proposer warrants that all information provided by it in connection with this proposal is true and accurate. Signature of Official: - —9 P Name (typed): Stephen L. Larson Title: Partner Firm: Caporicci, Cropper & Larson, Certified Public Accoutttaids, LLP Date: February 20, 2000 8 Letter of Transmittal �JLJ Caporicci, Cropper & Larson, LLP Certt ted Public Accountants February 20, 2000 Mr. Dennis Shives Assistant Director of Management Services - Finance City of San Rafael 1400 Fifth Avenue Room 204 San Rafael, CA 94901 Dear Mr. Shives: Offices located in: Irvine, California Walnut Creek, California The accounting firm of Caporicci, Cropper & Larson, Certified Public Accountants, LLP (the Firm) is pleased to have the opportunity to respond to your request for a proposal to perform auditing services and to submit its qualifications to perform a general audit of the financial records of the City of San Rafael and related entities (the "City") for the three years June 30, 2000 through June 30, 2002 with the option to renew for the years ending June 30, 2003 and June 30, 2004. The objective of our audit is to issue an opinion regarding the fairness of presentation of the City's financial position for each year in accordance with generally accepted accounting principles. The audit to be performed will follow generally accepted auditing standards, U.S. General Accounting Office's Government Auditing Standards, Single Audit Act of 1984 requirements, as amended in 1996, OMB -A-133 as amended, and the Audit Guide for Auditors of Child Development Programs Administered by Private Non - Profit and Public Agencies. This proposal will introduce our Firm to you, highlight the background of the partners and staff assigned to the engagement, summarize our experience in the governmental area, and describe our approach to auditing the City. This proposal demonstrates our ability to render the quality examination and to perform the necessary accounting and auditing services requested by the City on a timely basis. As a partner of the Firm, I will be the primary contact for negotiation of the contract. Additionally, I have been authorized to legally bind the Firm. You may contact me at the following address and phone number: Mr. Stephen L. Larson, Partner Caporicci, Cropper & Larson, LLP Certified Public Accountants 1575 Treat Blvd., Suite 208 Walnut Creek, CA 94598 Phone Number: (925) 932-3860 1575 Treat Blvd., Suite 208 Walnut Creek, CA 94598 Tel: (925) 932-3860 Fax: (925) 932-3862 Mr. Dennis Shives February 20, 2000 Page 2 We are committed to performing the required work, completing the audit, and issuing the necessary auditors' reports prior to the City's published time frames. Our audit staff includes individuals well versed in municipal auditing and reporting requirements. We have performed auditing and consulting engagements for numerous cities and non-profit organizations. The Engagement Partner assigned to the City, Mr. Caporicci, is a member of various governmental committees, has actively participated in the development of accounting and audit guidelines and standards for the governmental sector, and serves as a national reviewer for the GFOA. We are responsive to the needs of the City, understand the City's operational environment, and pledge to you our complete commitment to providing a quality product, which meets the City's requirements. This proposal is a firm and irrevocable offer and will remain valid for 90 days after the date of this letter. We are confident you will find our organization offers the required expertise, technical knowledge, and business understanding to perform an audit of the City. Our past experience provides us with a thorough understanding of the needs and requirements of the City, as well as the technical knowledge to perform such services in accordance with the accounting and auditing guidelines as published by the various authoritative entities. We welcome your inquiries and look forward to further discussions with you. Sincerely, -40— L e, -,ze Stephen L. Larson Partner Caporicci, Cropper & Larson, LLP 13 m I 1 i II ! 411 1 Vi III IYllill A 6.61III I .11.11 IM. Yli li II Independence License to Practice Insurance 15 CITY OF SAN RAFAEL Independence, License to Practice, and Insurance Independence The Firm meets the independence requirements as defined by the U.S. General Accounting Office's Standards for Audit of Governmental Organizations, Programs, Activities and Functions, and the American Institute of Certified Public Accountants and California State Society of Certified Public Accountants as promulgated in various auditing and professional standards. Additionally, the Firm is independent of all component units of the City as defined by those standards. During 1998 the Firm provided assistance in certifying the integrity of certain ballot protest hearing procedures relating to the Point San Diego Road Landscaping District. The Firm will provide the City written notice of any other professional relationships entered into during the period of this agreement between the City and the itself. The Firm has not been accused of any sub -standard work or performance. In fact, clients have repeatedly praised Firm personnel for their professional approach to the performance of their duties and the sensitivity to client operating requirements. License to Practice in California The Firm and all key professional staff assigned to the City's audit are properly licensed to practice as Certified Public Accountants in the State of California. The Firm is registered with the AICPA and the State Society of CPA's. Its State of California partnership number is 5891. The Firm has met all required State and local laws, rules, and regulations. Insurance All Firm personnel are covered by Workers' Compensation Insurance to the extent required by law. The Firm maintains various insurance policies including $1 million in professional liability and $2 million in general liability. Prior to execution of a contract with the City, the Firm will record the City as an additional insured and provide evidence of such coverage and action. 17 I I. 11 1 1 1 1 .. I. 1. I, 1 I I, 11 . 11 1 1 1 Firm Qualifications and Experience 19 CITY OF SAN RAFAEL Firm Qualifications and Experience About the Firm The Firm has offices located in Irvine, California and Walnut Creek, California, and provides a full range of accounting services to governmental agencies and private sector organizations throughout California including audit, tax, accounting, computer audit assistance, and business and management advisory services. The four partners combined have over 100 years of practical experience encompassing all aspects of the financial arena. Twenty-two (22) professional staff members provide the financial background and specific experience to meet the City's operational needs. Fifteen (15) professional staff are assigned to our governmental support group. Ten (10) of our professional staff are certified, six (6) have passed the CPA Examination and are at various stages of their experience requirements, and six (6) are entry level staff. Our Walnut Creek office, which employees twelve professional staff (two partners, two directors, one manager and seven professional staff) will perform the requested services for the City. However additional staff from our Irvine office may also be assigned to the engagement. The Firm also employs two professionals who are skilled in computer sciences. These individuals are available to assist the audit team where appropriate. Firm policy requires the Engagement Partner, during the first year of the engagement, be actively involved in the daily fieldwork. This policy guarantees the proper and efficient performance of the audit process, educates the Engagement Partner as to City processes and issues, and provides the City with on-site expertise in the areas of governmental auditing, accounting, compliance, and current developments. Consequently, one Partner with over twenty-eight years experience and four professionals with combined experience of over thirty years will be assigned full time to perform the audit requirements of the City during 2000. In subsequent years, the manager will be responsibility for daily fieldwork and the Engagement Partner's role will evolve to on-site supervision, direction, review, addressing of compliance issues and update of City staff on current developments. Additionally, because of the importance of the City's audit to the development of our Firm, a second partner will be actively involved with the audit, serving as liaison between the City and Engagement Team and providing specific expertise in the area of Single Audit requirements and internal control structure. We are committed to providing appropriate and related experience, personal involvement, and a broad business perspective to produce a quality end -product within the time frames required. The Firm's partners and professional staff assigned to the City have performed audits, accounting services and consulting services for numerous governmental entities including, but not limited to, the City of Vacaville, Town of Danville, City of Hercules, City of Menlo 1)1 CITY OF SAN RAFAEL Firm Qualifications and Experience Park, City of Brisbane, City of Rocklin, City of Morgan Hill, City of Placerville, City of Sanger, City of Eureka, City of Ceres, City of Corona, City of Claremont, the California, Maritime Academy, City of Hermosa Beach, City of Redondo Beach, El Toro Reuse Planning Authority (a Joint Powers Agreement between the County of Orange, City of Irvine, and City of Lake Forest), City of Shafter, County of Colusa, County of Modoc, County of Del Norte, County of Lassen, County of Trinity, County of Tuolumne, Anaheim Redevelopment Agency, City of Reedley, Reedley Redevelopment Agency, City of Brawley, Brawley Community Redevelopment Agency, the Local Transportation Authority Fund for the City of Brawley ( a Joint Powers Agreement between seven local cities), the Bertsch -Ocean View Community Development District, Crescent Fire Protection District, Smith River Cemetery District, the City of Houston, and the Houston Water and Sewer Treatment District. Each audit engagement included financial audits in accordance with the various authoritative auditing standards, compliance audits in accordance with OMB A-133, internal control structure evaluation, operational reviews, on-going advisory support, and updates on recent governmental accounting and financial reporting developments. Additionally, several of the above listed governmental entities received financial reporting awards from CSMFO and GFOA. Each member of the audit team has performed audits and consulting services for other non- profit operations requiring similar services as the City. These include but are not limited to the RTC, the United Way, March of Dimes, Skagg's Foundation, Rossmoor Leisure World, the World Trade Center Association of Orange County, the Santa Ana Economic Development Corporation, the Master Chorale of Orange County, 2nd Life Foundation, KPBX Public Radio, and Texas Tech University. We will adhere to generally accepted auditing standards as promulgated by the AICPA, United States General Accounting Office, and the California State Controller's Office. The Firm's Partners are current members of the California Society of Municipal Finance Officers and the GFOA, have been members of various national and State municipal accounting committees, and Mr. Caporicci is a national reviewer for the GFOA and current quality control reviewer for the California Society of CPAs and the AICPA. The Firm's Partners are past "Big 5" employees with several years practical experience. For example, the Engagement Partner, Mr. Caporicci, served with Coopers & Lybrand for over 11 years and was head of its governmental audit practice for the Southwest Region which included offices in Houston, Austin, New Orleans, and Oklahoma City. Mr. Caporicci also provides ongoing governmental accounting expertise to several of the "Big 5" firms. Mr. Larson spent several years with Arthur Young & Company (currently Ernst & Young) and Coopers & Lybrand in the audit and consulting divisions. The philosophies and quality orientation offered by the "Big 5" firms serve as the basis of Caporicci, Cropper & Larsori s 22 CITY OF SAN RAFAEL Firm Qualifications and Experience approach to the City's audit. Many of the Firm's operational policies, personnel development activities, engagement planning, control, and direction practices, client interaction philosophies, and commitment to a quality end product are based on "Big 5" standards. And, we offer this approach at "local firm" prices. Consequently, the City benefits in two ways - receipt of a quality audit and a reduction in its audit costs. Governmental and Non -Profit Accounting Experience The following is a partial list of selected clients for which accounting services have been provided: Governmental • City of Vacaville, California • Vacaville Redevelopment Agency, Vacaville, California • City of Hercules, California • Hercules Redevelopment Agency, Hercules, California • City of San Leandro, California • San Leandro Redevelopment Agency, San Leandro, California • City of Los Altos, California • City of Menlo Park, California • Belle Heaven Child Care, Menlo Park, California • Menlo Park Redevelopment Agency, Menlo Park, California • City of Eureka, California • Eureka Redevelopment Agency, Eureka, California • Eureka Hazardous Waste Management Authority, Eureka, California • Town of Danville, California • Danville Community Development Agency, Danville, California • Danville Lighting and Assessment District, California • Danville Public Financing Authority, Danville, California • City of Ceres, California t= . Ceres Redevelopment Agency, Ceres, California • City of Placerville, California • Placerville Redevelopment Agency, Placerville, California • City of Reedley, California • Reedley Redevelopment Agency, Reedley, California • County of Colusa, Colusa, California • Colusa County Justice Court, Colusa, California • County of Modoc, Alturas, California • Modoc County Justice Court, Alturas, California • County of Del Norte, Crescent City, California • Del Norte Justice Court, Crescent City, California • City of Hermosa Beach, California 23 CITY OF SAN RAFAEL Firm Qualifications and Experience Governmental (continued) • City of Shafter, California • Shafter Redevelopment Agency, Shafter, California • Bertsch -Ocean View Community Service District, Crescent City, California • Big Rock Community Service District, Crescent City, California • Church Tree Community Service District, Crescent City, California • Crescent Fire Protection District, Crescent City, California • Fort Dick Fire Protection District, Crescent City, California • Gasquet Community Service District, Crescent City, California • Hunter Valley Community Service District, Crescent City, California • Klamath Community Service District, Klamath, California • Klamath Fire Protection District, Klamath, California • Redwood Park Community Service District, Crescent City, California • Smith River Community Service District, Smith River, California • Smith River Fire Protection District, Smith River, California • Smith River Cemetery District, Smith River, California • California Maritime Academy, Vallejo, California Non -Profit Organizations • Stanford University, Palo Alto, California • United Way, Oakland, California • March of Dimes, Oakland, California • The World Trade Center Association of Orange County, Irvine, California • Fullerton, Arboretum Authority, Fullerton, California • The Master Chorale of Orange County, Pittsburg, California • California State University - Fullerton, Fullerton, California • Rossmoor Leisure World, Walnut Creek, California • Skagg's Foundation, Oakland, California • ACTS For Children, Bloomington, California • 2nd Life Foundation, Los Angeles, California • Santa Ana Economic Development Corporation, Santa Ana, California • KPBX Public Radio, Spokane, Washington • Texas Tech University, Lubbock, Texas Additional Activities Both Partners have conducted training and educational seminars and classes on municipal and not-for-profit accounting requirements and processes for the American Institute of Certified Public Accountants, the California State Society of Certified Public Accountants, Sonoma State University, University of California - Irvine, and National University. 24 CITY OF SAN RAFAEL Firm Qualifications and Experience t Other Accounting and Auditing Experience The Firm has also conducted engagements with similar requirements as those of the City for the following entities: . Crown-Zellerbach (timber products), San Francisco, California . Grubb & Ellis Development Corporation (real estate), San Francisco, California . Bank of America (banking), San Francisco, California . Fireman's Fund Insurance Companies (insurance), Novato, California . Bechtel Group of Companies (construction), San Francisco, California . Silverado Country Club (hospitality), Napa, California . Commerce Bank (banking), Newport Beach, California . E1Dorado Bank (banking), Laguna Hills, California The Bank of Hemet (banking), Riverside, California . Pacific Mutual Insurance Companies (insurance), Newport Beach, California . Santa Fe Escrow (escrow services), Orange, California . Automated Data Technologies (electronics), Santa Ana, California . American Express Insurance Companies (insurance), New York, New York . Gulf Oil Company (oil and gas), Houston, Texas . Texas United Group of Companies (salt, oil and gas), Houston, Texas . Becon Construction Company (mining), Boise, Idaho . Valhalla Arabians (agriculture), Spokane, Washington Quality Control Review During 1999, a merger occurred between the accounting firms of Caporicci & Larson and Cropper and Parody to form Caporicci, Cropper & Larson, LLP. The two merging firms were members of the AICPA Quality Review Program and had received unqualified reviewer reports in the past. The merged firm of Caporicci, Cropper & Larson, LLP continues to be a member of the AICPA Quality Review Program and will undergo a review of its operations in the next two months. The reviewer's reports on both Caporicci & Larson and Cropper and Parody follow. L 25 X TT GREGORY, YORKE & LERIAS 1 L CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AICPA DIVISION FOR CPA FIRMS RICHARD E. YORKE, M.B.A., C.P.A. JOHN LERIAS, C.P.A. 1 177 NORTH PARK AVENUE 0 POMONA. CALIFORNIA 91768 0 (909) 623-6641 Y FAX NO (909) 620-0947 November 26, 1996 Caporicci & Larson, CPAs Newport Beach, California We have reviewed the system of quality control for the accounting and auditing practice of Caporicci & Larson, CPAs (the firm) in effect for the year ended September 30, 1996. Our review was conducted in conformity with standards established by the Peer Review Board of the American Institute of Certified Public Accountants (AICPA). We tested compliance with the firm's quality control policies and procedures to the extent we considered appropriate. These tests included a review of selected accounting and auditing engagements. In performing our review, we have given consideration to the quality control standards issued by the AICPA. Those standards indicate that a firm's system of quality control should be appropriately comprehensive and suitably designed in relation to the firm's size, organizational structure, operating policies, and the nature of its practice. They state that variance in individual performance can affect the degree of compliance with a firm's quality control system and, therefore, recognize that there may not be adherence to all policies and procedures in every case. In our opinion, the system of quality control for the accounting and auditing practice of Caporicci & Larson, CPAs in effect for the year ended September 30, 1996, met the objectives of quality control standards established by the AICPA and was being complied with during the year then ended to provide the firm with reasonable assurance of conforming with professional standards in the conduct of that practice. Caporicci & Larson, CPAs is a member of the private companies practice section of the AICPA division for CPA firms (the section) and has agreed to comply with the membership requirements of the section. In connection with our review, we tested the firm's compliance with those requirements to the extent we considered appropriate. In our opinion, the firm was in conformity with the membership requirements of the section during the year ended September 30, 1996, in all material respects. RUDOLPH J. GREGORY ACCOUNTANCY CORP. 0 RUDOLPH J. GREGORY, RETIRED To the Partners Parodi & Cropper Lafayette, California We have reviewed the system of quality control for the accounting and auditing practice of Parodi & Cropper (the firm) in effect for the year ended June 30, 1997. Our review was conducted in accordance with standards promulgated by the Peer Review Committee of the SEC Practice Section of the AICPA Division for CPA Firms (the Section). We tested compliance with the firm's system of quality control and with the membership requirements of the Section to the extent we considered appropriate. These tests included the application of the firm's policies and procedures on selected accounting and auditing engagements. In performing our review, we have given consideration to the quality control standards for an accounting and audit practice issued by the AICPA. Those standards require that a firm's quality control policies and procedures be appropriately comprehensive and suitably designed in relation to the firm's size, organizational structure, operating policies, and the nature of its practice. Variance in an individual's performance and understanding of professional requirements or the firm's quality control policies and procedures can affect the degree of compliance with a firm's prescribed quality control policies and procedures and, accordingly, the effectiveness. of the system. Therefore, adherence to all policies and procedures in every case may not be possible. As is customary in a peer review, we are issuing a letter under this date that sets forth comments related to certain policies and procedures or compliance with them. None of these matters were considered to beof sufficient significance to affect the opinion expressed in the report. In our opinion, the system of quality control for the accounting and auditing practice of Parodi & Cropper in effect for the year ended June 30, 1997, has been designed to meet the requirements ,of the quality control standards for an accounting and auditing practice established by the AICPA, and was being complied with during the year then ended to provide the firm with reasonable assurance of conforming with professional standards. Also, in our opinion, the firm was in conformity with the membership requirements of the Section in all material respects. Denver, Colorado November 14, 1997 A PROFESSIONAL CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 950 SOUTH CHERRY STREET a SUITE 918 ■ DENVER. COLORADO 80222 ■ 303/759-3773 • FAX: 303/759-1168 MEMIIE•RS Of THE SEC PRACTICE SECTION AND THE PRIVATE COMPANIES SECTION OF THE DIVISION FOR CPA FIRMS I Iii I I I .III I L.. I l i. it .I I I i 1 1. ILII, Partner, Supervisory and Staff Qualifications and Experience CITY OF SAN RAFAEL Partner, Supervisory and Staff Qualifications and Experience The Engagement Team will normally consist of six individuals who provide a broad business perspective and significant experience in governmental and non-profit 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 the broad business background to interpret findings and observations, to offer effective solutions to issues, and the personal involvement of the partners of the Firm. It is Firm policy to require the Engagement Partner, during the first year of the engagement, to be actively involved in the daily fieldwork. This policy guarantees the proper and efficient performance of the audit process, educates the Engagement Partner as to City processes and issues, and provides the City with on-site expertise in the areas of governmental auditing, accounting, and current developments. The Engagement Team will be led by Gary M. Caporicci, CPA, a partner of the Firm, who has over twenty-eight years of audit and business experience. His diversified background offers the technical qualities required of the governmental and non-profit areas and the necessary where -with -all to properly evaluate the entire accounting process, develop opportunities to improve the accounting process, and to offer practical business recommendations. Gary, over the years, has been active in the California State Society of Certified Public Accountants' Municipal Accounting Committee where he developed several municipal accounting guidelines, the Municipal Accounting Officers Association, and the GFOA where he serves as a national financial statement reviewer. Gary also teaches municipal accounting courses at a local university. A detail of Gary's background follows. The second member of the Engagement Team is Stephen L. Larson, CPA, a partner of the Firm. Steve's background includes over twenty-five years of audit and business experience encompassing both the public and non-profit sectors. Steve was actively involved with the California State Society of Certified Public Accountants' Municipal Accounting Committee and participated in the development of several audit guidelines for California municipalities. Steve will act as liaison between the City and the Firm, provide directional guidance as required, and evaluate Single Audit compliance and internal control. The third member of the Engagement Team is Joe Arch, CPA. Joe's background includes over fifteen years in various accounting related positions including Assistant Finance Director for the City of San Leandro and System Specialist for Eden Systems, Inc.. He has also participated in the audits of several city and county governments. Joe holds an MBA in computer information systems and an MPA. Joe also serves as our IT specialist and works with several cities assisting in system design and implementation. During his tenure with Eden Systems, he assisted in the conversion of over 30 migrations to new systems The fourth member of the Engagement Team is Jay Clark. Jay's background includes over ten years of accounting, auditing and tax experience in both profit and non-profit organizations. He has also participated in the audits of several city and county governments. 14 CITY OF SAN RAFAEL Partner, Supervisory and Staff Qualifications and Experience The fifth member of the Engagement Team is Shin Green. Shirts background includes over two years of accounting and auditing experience. he has also participated in several audits of city and county governments. The sixth member of the Engagement Team is Steve Amos. Steve's background includes over five years of accounting related experience. He has also participated in the audits of several city and county governments. The estimated number of hours each Engagement Team member is scheduled to provide the City during the first audit year is as follows: Gary M. Caporicci CPA (Partner) 45 Stephen L. Larson, MBA, CPA (Partner) 30 Joe Arch, CPA (Director) 50 Jay Clark (Senior) 200 Shin Green (Professional Staff) 200 Steve Amos (Professional Staff) 120 Administrative Staff 50 Total I� 6951 Each member of the Engagement Team participates in Continuing Education programs offered by the American Institute of Certified Public Accountants and California State Society of Certified Public Accountants and each has met the continuing education requirements for municipalities. The Firm maintains a comprehensive training program targeted at appropriate professional staff levels. It utilizes in-house developed educational programs, AICPA and California CPA Society educational programs, and on-the-job training. The Firm maintains an annual training schedule which officially begins in July when all professional and administrative staff attend a six day comprehensive in-house training session which includes: • Review of principles of accounting and financial reporting for state and local governments. . Review of governmental fund types and account groups. ao CTI'Y OF SAN RAFAEL Partner, Supervisory and Staff Qualifications and Experience . Review of internal control evaluation approaches. . Updates on recent governmental accounting and reporting guidelines. . Review of Single Audit requirements and approaches. . Review of financial audit approaches. . Overview of audit and internal control workpaper techniques. . Review of current issues facing the governmental community. During the year, professional staff are sent to various educational sessions sponsored by the AICPA and California State Society of CPA's, as considered appropriate for the level and need of the individual. These classes include, among others: . Governmental Financial Reporting Standards and Practices. . Yellow Book: Government Auditing Standards. . Financial Accounting Standards: Comprehensive Review. . Single Audit. • Governmental Auditing & Accounting Update. . Governmental Accounting Principles. . Comprehensive Review of Generally Accepted Auditing Standards. The Firm also provides monetary incentives for professional staff to attend university programs focusing on governmental accounting. The result of the Firm's training program is the production of a highly educated and competent municipal audit group capable of performing an efficient and effective audit for the City. The Team members will continue their professional development practices. The Firm's policy on providing service to our clients includes a commitment to maintaining continuity of audit personnel. We can not 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 equipment, provide excellent working conditions, provide various benefits such as retirement plans, medical plans, profit sharing programs, educational benefits, and other such benefits. Additionally, we will guarantee that any staff member assigned to this engagement will return to the City in subsequent years if he or she is still with the 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 senior partners, we can assure you that future years' audits will be conducted in an efficient and effective manner with qualified and experienced professionals. Resumes of each member of the Engagement Team follow. al CITY OF SAN RAFAEL Partner, Supervisory and Staff Qualifications and Experience Gary M. Caporicci Certified Public Accountant Length of Career . Over 28 years of diversified business experience with 11 years at Coopers & Lybrand. . Certified Public Accountant for the states of California and Texas. Professional Experience • Partial listing of clients with similar requirements as the City: City of San Leandro, CA. City of Corona, CA. City of Los Altos, CA. City of Claremont, CA. Town of Danville, CA. City of Chico, CA. City of Hermosa Beach City of Delano, CA. City of Placerville, CA. City of Shafter, CA. City of Ceres, CA. City of Brawley, CA. City of Oakland, CA. City of Sanger, CA. City of Sanger, CA. City of Reedley, CA. Anaheim Redevelopment Agency, CA. City of West University Place, TX. Anaheim Housing Authority, CA. City of Boston, MA. City of West Covina, CA. Education . BS Degree in Accounting from Armstrong College, Berkeley, California (1968). Professional Activities • Member, Governmental Accounting and Auditing Committee (7 years). • Past Chairman, CSCPA local committee on Governmental Accounting and Auditing (5 years). • Past national reviewer for the GFOA. . Principal writer of various California Committee on Municipal Accounting (CCMA) articles. . Past Co -Chairman (2 years) and speaker (5 years) at various CSCPA Governmental Units conferences. . Past member of the Texas Governmental Accounting and Auditing Committee. . Instructor for the CSCPA in areas of governmental and non-profit accounting and auditing. • Instructor for the American Institute of Certified Public Accountants. • Adjunct Professor at National University with emphasis on Accounting for Governmental and Nonprofit Entities, Principles of Auditing, and Advanced Accounting. Continuing Education . Have met the current governmental CPE educational requirements. governmental entities. 3? CI'T'Y OF SAN RAFAEL Partner, Supervisory and Staff Qualifications and Experience Stephen L. Larson Certified Public Accountant Length of Career • Over 25 years of diversified business experience including positions with Ernst & Young (formerly Arthur Young & Co.), Coopers & Lybrand, and American Express. . Certified Public Accountant for the states of California and Washington. Professional Experience . Partial listing of clients and business relationships with similar needs as the City: City of Vacaville, CA. City of Hercules, CA. City of Morgan Hill, CA. City of Reedley, CA. Town of Danville, CA. City of Placerville, CA. City of San Leandro, CA. City of Corona, CA. City of Menlo Park, CA. City of Hermosa Beach, CA. City of Eureka, CA. City of West Covina, CA. City of Ceres, CA. City of Buenaventura, CA. City of Los Altos, CA. City of Brawley, CA. California Maritime Academy, Vallejo, CA. City of West Sacramento, CA. San Ramon Services District, San Ramon, CA. City of Sanger, CA. San Joaquin Housing Authority, Stockton, CA. County of Colusa, Colusa, CA. County of Modoc, Alturas, CA. County of Del Norte, Crescent City, CA. Education . BS Degree in Accounting from California State University, Hayward (1971). • MBA in Accounting from California State University, Hayward (1982). Professional Activities • Adjunct Faculty for UCI, National University, Sonoma State University. • Discussion Leader, Washington Society of Certified Public Accountants. • Guest Lecturer on various accounting, budgeting and tax subjects, to various professional, civic and private organizations. . Contributory writer of auditing publications for California State Society of Certified Public Accountants. • Member, American Institute of Certified Public Accountants. • Member, California State Society of Certified Public Accountants. • Member, CSMFO • Member, GFOA Continuing Education Have met the current CPE educational requirements to perform audits on governmental entities. CITY OF SAN RAFAEL Partner, Supervisory and Staff Qualifications and Experience Joseph J. Arch Certified Public Accountatit Manager Length of Career . Over 16 years of diversified business experience including positions with the City of San Leandro and Eden Systems. . Certified Public Accountant for the states of California and Washington. Professional Experience . Partial listing of clients with similar needs as the City: Audit Relationships: City of Vacaville, CA. City of Morgan Hill, CA. City of Brisbane, CA. City of Alameda, CA. City of San Leandro, CA. City of Los Gatos, CA. City of San Carlos, CA. City of Redwood City, CA. City of Livermore, CA. Town of Danville, CA. Town of Atherton, CA. Town of Hillsborough, CA. Svstem Conversions: City of Santa Maria, CA. City of San Clemente, CA. City of El Segundo, CA. City of Aberdeen, WA. City of Rialto, CA. City of Nampa, ID. City of Ogden, UT. Jackson County, MO. City of Avondale, A7. Education • BS Degree in Accounting from California State University, Hayward (1983). • MBA in Computer Information Systems from the College of Norte Dame (1992). • MPA in Public Management from California State University, Hayward (1997). Professional Activities . Member, American Institute of Certified Public Accountants. . Member, California State Society of Certified Public Accountants. . Member, GFOA CAFR Review Committee. . Member, Washington Society of Certified Public Accountants. Continuing Education . Various municipal accounting courses offered by the California State Society of CPA's and local universities including (have met the educational requirements): - Governmental Financial Reporting Standards and Practices. - Yellow Book: Government Auditing Standards. - Financial Accounting Standards: Comprehensive Review. - Municipal Accounting (National University). 3.1 CITY OF SAN RAFAEL Partner, Supervisory and Staff Qualifications and Experience Jay Clark Senior Length of Career . Ten years of accounting experience Professional Experience Partial listing of clients with similar needs as the City: City of San Leandro, CA. City of Menlo Park, CA. City of Los Altos, CA. City of Eureka, CA City of West Sacramento, CA. County of Del Norte, Crescent City, CA. County of Colusa, Colusa, CA. County of Trinity, Weaverville, CA. Performed financial audit and single audit activities for each engagement listed above. Education BS Degree in Business Administration: California State University - Fresno, Fresno, California (1987). Professional Activities . Passed the Uniform CPA Exam . Associate Premium Auditor, Insurance Institute of America . Candidate Member, California State Society of Certified Public Accountants Continuing Education Various municipal and general accounting courses offered by the California State Society of CPA's and the AICPA. (Have met the current educational requirements to perform audits on governmental entities.). The following is a representative sample of related courses taken during the past three years: - Governmental Auditing & Accounting Update. - Governmental Accounting and Financial Reporting Standards. - Comprehensive Review of Generally Accepted Auditing Standards. - Single Audit. CITY OF SAN RAFAEL Partner, Supervisory and Staff Qualifications and Experience Shin Green Professional Staff Length of Career . Two years with Caporicci & Larson, CPA's. Professional Experience Partial listing of clients with similar needs as the City: City of Vacaville, CA. City of Ventura, CA. City of Eureka, CA. City of Los Altos, CA. City of Menlo Park, CA. Belle Heaven Child Development Center, Menlo Park, CA. City of San Leandro, CA. City of Pinole, CA. City of West Sacramento, CA. Town of Danville, CA. Education . BS Degree in Business Administration from the University of California - Berkeley (1997) Continuing Education . Various municipal accounting courses offered by the California State Society of CPA's and local universities including (have met the educational requirements): - Governmental Financial Reporting Standards and Practices. - Yellow Book: Government Auditing Standards. - Municipal Accounting. - Single Audit CITY OF SAN RAFAEL Partner, Supervisory and Staff Qualifications and Experience Steven A. Amos Professional Staff Length of Career . Six years experience in various accounting related positions Professional Experience . Partial listing of clients with similar needs as the City: City of Vacaville, CA. City of San Leandro, CA. Town of Danville, CA. City of Menlo Park, CA. City of Morgan Hill, CA. City of San Bruno, CA. Education . BS Degree in Accounting from Portland State University (1994) Continuing Education . Various municipal accounting courses offered by the California State Society of CPA's and local universities including (have met the educational requirements): - Governmental Financial Reporting Standards and Practices. t - Yellow Book: Government Auditing Standards. - Municipal Accounting. - Single Audit. r i '47 A IN Similar Eneagements with Other Governmental Entities CITY OF SAN RAFAEL Similar Engagements with Other Governmental Entities As stated earlier in the proposal, the Engagement Partner has been active in the governmental accounting and auditing area for many years. The City will receive the benefit of his broad experience as a result of his active participation in the audit. His professional accomplishments include: . For the GFOA: - Serves as national reviewer for the Certificate of Achievement for Excellence in Financial Reporting program. . For the AICPA: - Participated in drafting and editing the State and Local Governmental Units Audit and Accounting Guide. - Served as instructor of various Governmental Accounting and Auditing courses. . For the California Society of CPA's: - Serves as Co -Chairman and speaker of the Governmental Units Conference. - Serves on the State Governmental Accounting and Auditing Committee (California). - Served as instructor of various Governmental Accounting and Auditing courses. - Acted as the principal writer of various publications for the California Committee on Municipal Accounting. . For Coopers & Lybrand: - Responsible for the Southwestern Region Governmental Audit Practice. - Served as National Quality Reviewer for governmental audits. - Member of the Governmental Accounting and Auditing Industry Group. The Engagement Partner has managed, supervised, coordinated, and monitored literally hundreds of municipal audits of all sizes. Additionally, in his many years of being active in the governmental area, he has assisted many cities, counties, GFOA, and other entities in developing approaches and solutions to complex accounting issues. Additionally, each professional staff assigned to the City's audit has also conducted or participated in numerous municipal audits of various sizes. Their valuable experience will provide the where -with -all to perform the audit in an efficient and effective manner resulting in the least disruption to the City's finance department. CITY OF SAN RAFAEL Similar Engagements with Other Governmental Entities Of the many goverlumental audits with similar requirements as the City that we have conducted, we have selected the following governmental engagements for you to contact. We encourage the City to call the individuals listed here to obtain information on the quality of the audits and, more importantly, the ability of the audit staff. 42 Total Staff Governmental Agencv Hours Scope of Work Date Contact & Telephone # • City of Vacaville 800 Financial Audit/Single Audit 1999 Ken Campos Vacaville Redevelopment Agency Financial Audit Finance Manager Transportation Development Act GFOA Certification (707) 449-5118 CSMFO Certification • City of Morgan Hill 550 Financial Audit/Single Audit 1999 Tina Reza Morgan Hill Redevelopment Agency Financial Audit Acting Finance Director GFOA Certification (408) 779-7237 CSMFO Certification • City of Redondo Beach 800 Financial Audit/Single Audit 1999 Agnes Walker Redondo Beach Redevelopment Agency Financial Audit Financial Services Director Inmate Trust Fund Financial Audit (310) 372-1171 Mortgage Revenue Bond Series A & B Financial Audit GFOA Certification CSMFO Certification • City of Hercules 450 Financial Audit 1998/ Marie Simons Hercules Redevelopment Agency Financial Audit 1999/ Finance Director/Treasurer (510) 799 8225 • City of West Covina 800 Financial Audit/Single Audit 1997/ Margie Tucker West Covina Redevelopment Agency Financial Audit 1998/ Finance Director West Covina Public Financing Authority Financial Audit 1999 (626) 814-8476 Civic Center Authority Financial Audit Parking Authority Financial Audit Waste Management Authority Financial Audit • City of San Buenaventura (Ventura) 1,000 Evaluate internal controls 1997/ Marilyn E. Leuck Management System Review Evaluate staff capabilities 1998/ Director of the Management Enhance internal reporting 1999 Services capabilities (805) 654-7812 Identify opportunities to reduce costs/ increase effectiveness Assist in the implementation of recommendations Financial Audit of the City Financial Audit GFOA Certification CSMFO Certification • City of Shafter 500 Financial Audit/Single Audit 1995/ Jo Barrick Shafter Redevelopment Agency Financial Audit 1996/ Finance Director CSMFO Certification 1997/ (805) 746-6361 1998/ 1999 We encourage the City to call the individuals listed here to obtain information on the quality of the audits and, more importantly, the ability of the audit staff. 42 Specific Audit Approach 43 ri Understanding of Requested Services 11 45 CITY OF SAN RAFAEL Understanding of Requested Services The City desires an audit and expression of an opinion in accordance with generally accepted accounting principles on the fairness of presentation of its general purpose financial statements for the fiscal years ending on June 30, 2000 through June 30, 2004. The City also requires an "in -relation to" opinion on the presentation of its combining and individual fund and account group financial statements and schedules in conformity with generally accepted accounting principles. The City also desires an audit and expression of an opinion in accordance with generally accepted accounting principles on the fairness of presentation of the San Rafael Redevelopment Agency financial statements for the fiscal years ending June 30, 2000 through June 30, 2004. Additionally, the audit scope will be expanded to include a compliance examination in accordance with the Guideline for Compliance Audits of California Redevelopment Agencies as issued by the California State Controller. The City also desires an audit and expression of an opinion in accordance with generally accepted accounting principles and Government Auditing Standards on the fairness of presentation of the Child Development Program financial statements for the fiscal years ending June 30, 2000 through June 30, 2004. The City also desires a review of the GANN Appropriations Limit calculations for the City and a report thereon. All audit work and the resulting final opinions and financial reports are to be completed and issued no later than the published time frames as noted in the RFP. The audit of these financial statements shall be conducted in accordance with generally accepted auditing standards as set forth by the American Institute of Certified Public Accountants, the standards for financial audits set forth in the U.S. General Accounting Office's Government Aisditing Standards, various standards established by the Government Accounting Standards Board, and the Audit Guide for Audits of Child Development and Nutrition Programs issued by the State of California Department of Education. The preparation of any financial reports will be consistent with requirements of CSMFO and GFOA certification procedures and guidelines. The City may receive levels of federal financial assistance which require an audit to be conducted in accordance with the Single Audit Act of 1984 and OMB Circular A-133, as amended, relating to compliance with various laws and regulations and proper internal control structure. When appropriate, reports are to be issued by the Firm indicating amount of federal financial assistance, description of the various specific federal assistance programs in which the City participates either directly or as a pass-through, degree of compliance with 47 CITY OF SAN RAFAEL Understanding of Requested Services appropriate laws and regulations, quality of the internal control structure, and reportable conditions and findings, if any. These reports will be issued no later than as noted in the RFP. Should any conditions be discovered requiring corrective action, the Firm will provide a detailed description of the findings and recommended actions as to their resolution. The Firm will prepare and print the following financial reports within the time frames required: Comprehensive Annual Financial Report (CAFR) San Rafael Redevelopment Agency Financial Report Child Development Program Single Audit Report GANN Letter Due Quantity Date Bound Unbound October 31 25 1 October 31 25 1 October 31 15 1 November 30 10 1 November 30 5 1 The Firm will submit a letter to management detailing reportable conditions found during the audit. Non -material instances of noncompliance shall be reported in a separate management letter, if appropriate, and any other observations or recommendations determined to be informative to City management. The Firm will be available to assist the City in obtaining long term financing by issuing required "comfort letters" and "statements to underwriters noting consent and citation expertise". The Firm will assist the City in applying Generally Accepted Accounting Principles and provide support in maintaining proper financial management procedures. The Firm will be available to provide advice and counsel regarding significant matters during the year. The audit timeline presented by the City will be followed and all final reports will be provided to the City prior to the time frames required. The Firm's Partners and Staff welcome the opportunity to present the financial reports to the City Council and will be ready to respond to questions from the Council and Citizens of the City. 48 Audit Approach 50 CITY OF SAN RAFAEL Specific Audit Approach Objective of Our Services The basic objective of our audit of the City is to conduct an examination of the financial statements in accordance 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: • To offer substantive observations and recommendations relating to accounting and operating control policies and procedures. • To identify opportunities for operating efficiencies and isolate candidate activities for cost reduction opportunities. • To perform a professional audit in an efficient and effective way to minimize disruption to the office operations. • To offer ongoing advisory services to assist in the running of the operation and implementation of improved operating procedures. The engagement will be conducted within the framework of the Firm's quality control program which includes the use of audit 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 IBM compatible computers and laser printers. Work Plan The work plan has been designed to efficiently and effectively address the audit requirements of the City, to perform the audit of the City's financial records in a timely manner with minimal disruptions to office operations, and to meet the City's timeline. We will conduct the necessary audit steps to adequately perform: Planning of the engagement Evaluation of the existing internal control structure Determination of degree of compliance with laws, regulations, grant provisions, and City approved policies Validation of account balances Determination of competency of finance department staff Verification of reasonableness of management estimates CI CITY OF SAN RAFAEL Specific Audit Approach Work Plan (continued) Our Approach Our approach to performing audit services to the City is based on a thorough understanding of its business. Additionally, our governmental and non-profit audit knowledge assists us in performing the required work with minimum interruption to your office operations. We will concentrate on important matters rather than become bogged down in minor details, thus assuring that your audit is performed efficiently, effectively, and in the least amount of time and disruption. We will also review procedures and controls over the accounting process, evaluate the accuracy of recorded transactions, and perform other tests and investigative steps as considered appropriate to render an opinion on the financial statements of the City. Our audit approach will adhere to generally accepted auditing standards of the AICPA, the U.S. General Accounting Office, and the California State Controller. Assuming the City's financial records are in adequate condition and no unusual issues are discovered during the audit process, we will issue the first draft of the necessary financial reports for the year ended June 30, 2000 no later than September 30, 2000. Additionally, we will issue the first draft of the various auditors' reports as required by OMB A-133 by September 30, 2000 and the Management Letter on or before September 30, 2000. Final reports will be issued two weeks after approval is granted by the City. Members of the Firm will be available for routine consultation whenever City staff considers it necessary. We will review all financial reports and any findings, observations, etc. with key members of the City's management. We will be available to present the financial report, if desired by the City's management. 52 CITY OF SAN RAFAEL Specific Audit Approach The Audit Schedule Award of Contract May Interim Audit Procedures: May - Planning and Administration Review and obtain copies of key work papers of prior audit firm. Entrance Conference with City Management to discuss audit approach, timing, assistance, and issues. Review and evaluate the City's accounting and financial reporting. Prepare an overall memo of recommendations, potential issues, and suggestions for improvements. Prepare overall memo to City confirming audit procedures, timing, and assistance. Prepare detailed audit work plan and audit programs, audit budget and staffing schedule, list of schedules to be prepared by City staff, and provide to City Management. May - Internal Control Structure May 1 Meeting with key Finance Division personnel Obtain and document understanding of key internal control systems through walk-throughs, interviews of staff, and review of supporting documentation: - Budgeting System. - Revenue, utility billing, accounts receivable, and cash collections. Purchasing, expenditures, accounts payable, and cash disbursements. - Payroll. - Federal Financial Assistance. - Other systems Partner 10 Manager 5 Senior 20 Staff 10 Partner 20 Manager 15 Senior 40 Staff 100 CITY OF SAN RAFAEL Specific Audit Approach The Audit Schedule (continued) ii.Mw.n - �:�Rf,:�. W ,y-;�.i: :.. �,,^:f:s :.d0„ j -;s:.-.•„ r 'zs',':.3`"ti:��`}•': rl�WIN �ka st. ': ,y`x :i.3 ipr.i•. :. �.}�,,^".' lsr";�-"`�„i�,�i'-'f::•'f3"i;.";i..-r,rnk:Nt'Pasks ` , .>_,s ; f�`ours' May - Interval Control Structure (continued) Perform statistical testing of the internal control system and evaluate the effectiveness of the City's systems. Select large dollar and random samples of transactions in key operating systems. Sample size to meet required level for determined degree of risk. Review supporting documentation of selected transactions, evaluate adequacy of support and approvals, and conclude on degree of adherence to accuracy and compliance with City policies. Provide to the City's management a memo concerning management letter points and identify issues, if any. May - Single Audit Compliance Obtain or prepare Federal Financial Assistance Partner 15 Schedule. Perform audit tests of grant programs and Senior 10 compliance with Federal Law and Regulations. Staff 40 Review grant documents, select sufficient number of transactions to test for compliance of Federal General and Specific Requirements. May - OtherAuditTasks . Review minutes of City Council meetings and other Senior 3 key committees. Coordinate with City staff and assist in the pre- Senior 7 paration of all appropriate confirmation requests Staff 13 including: - Bank Accounts. - Investment pool accounts. - Accounts receivable. - Federal grants. - Revenue from governmental agencies. 54 CITY OF SAN RAFAEL Specific Audit Approach The Audit Schedule (continued) May . Coordinate with City staff and assist in the preparation of all appropriate confirmation requests including (continued): - Bond and other debts. - Pension plan. - Attorney letters. - Others, as required Hold progress conference with City Management. Hold exit conference with City Management. August/ Year end Audit Procedures: Partner 20 September Manager 20 Senior 100 Staff 150 August/ Entrance conference with City Management. September Follow-up on all outstanding confirmations. Verify and validate account balances by reviewing supporting documentation including invoices, vouchers, council resolutions, minutes, and other documents, as required. Perform analytical review of revenue and expenditures. Determine reason for material differences between budget and actual. 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 subsequent events by discussions with City Management and review of all minutes of City Council and key committees. September 15 Hold exit conference with City Management. CITY OF SAN RAFAEL Specific Audit Approach The Audit Schedule (continued) September 30 Audit Reports: Partner 10 Manager 10 Senior 20 Staff 7 Admin 50 September 30 Review drafts of City financial statements, and present audit reports. September 30 Review draft of Single Audit Reports concerning internal control structure, compliance with laws and regulations, and administering of federal financial assistance programs. September 30 Review draft of management letter points. September 30 Present above draft reports to the City Management. Within 2 Final Audit Reports, Financial Statements, Management weeks after Letter, and Single Audit Reports delivered. approval. Summary of Professional Audit Hours and Administrative Staff support for the Year Ending 2000: Personnel tRIorsw=; . '4 a Partner 75 Manager 50 Senior 200 Professional Staff 320 Administrative Staff 50 Total Hours 11 69,511 56 W I . Identification of Anticipated Potential Audit Problems 57 58 CITY OF SAN RAFAEL Identification of Anticipated Potential Audit Problems 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: Budgeting Compliance: • Review and evaluate the City's controls over budgetary compliance. • Review and evaluate the City's reporting of variances and the budgetary amendments and related approvals. Investments: Evaluate compliance with GASB 31. Review and evaluate the City's authorization and approval process of its investments. Review and evaluate the City's controls to assure compliance with city and state investment limitations and types of specific investments. Review and evaluate the City's monitoring of its investments. Reporting Entities: Review and evaluate the City's relationships to those various entities that city council members and city management are actively involved. Determine which of those entities the City should incorporate into its Annual Financial Report and those the City should not in accordance with GASB No. 14. Review for appropriate financial reporting and disclosure of those entities into the City's Annual Financial Report. 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 and GFOA. Review Annual Financial Reports for financial reporting conformance awards issued by CSMFO and GFOA. Evaluate the City's progress towards implementing GASB 34. Internal Control Structure: Review and evaluate the City's internal control functions and ascertain compliance with proper internal control philosophies. Review new computer system processes and controls and evaluate adequacy of the control environment. As relates to GASB 34: . The Firm will be available to assist the City in its implementation of GASB 34. 51) CITY OF SAN RAFAEL Identification of Anticipated Potential Audit Problems The effort to implement GASB 34 should not be underestimated. It will take significant and, possibly, costly actions by City staff in all departments to implement its provisions within the time frames required. Consequently, we recommend that the City establish a task force to determine the specific requirements of implementation, develop an approach to implementation, estimate the cost of implementation, and periodically report progress. Additionally, we recommend that the City begin reserving funds to meet the cost of implementation. Such costs include: A. Design of the new reporting model may require outside technical assistance. B. Infrastructure assets will require a physical inventory, valuation at current market levels, and deflating at the current market levels using price -level indexes to the year of acquisition. This effort may require outside technical assistance. We have formed an alliance with Charles Abbott Associates, Inc. (CAA), an engineering firm offering engineering services to governmental agencies throughout California. Our mission is to provide coordinated support to cities during their implementation of the various requirements of GASB 34. CAA will be available to assist in the identification, count, valuation of infrastructure assets, and development of ongoing maintenance systems. Our Firm will be available to assist the City in the physical count of operational assets and the development of the new reporting model. We are available to discuss the issue in greater depth and will welcome the opportunity to present a proposal on assisting the City in implementing GASB 34. We anticipate that the effort of implementing GASB 34 will not materially impact the scope of the audit unless the City is unable to comply with the provisions of GASB 34. However as indicated above, effects on City staff is expected to be significant. As relates to the system conversion: The City is undergoing a conversion of its financial and human resources computer systems. We have experienced staff available to assist the City in its efforts. We can provide assistance in identifying software packages, implementing specific software, and training City staff. An undertaking of this magnitude will have a significant impact on City resources. Significant time and resources will be 60 CITY OF SAN RAFAEL Identification of Anticipated Potential Audit Problems required to successfully complete the conversion process. Though we don't expect a significant impact on the scope of the audit, we are concerned that sufficient City staff will be available to timely and properly close the City's financial reports, perform required reconciliations, file supporting documentation, prepare needed audit schedules and to address our questions. Internal closing time tables may slip necessitating changes to our audit time schedule. Delays maybe experienced by our audit team in obtaining the necessary responses for our inquiries. We recommend that Firm staff be allowed to participate with the conversion team so that issues can be identified early and corrective actions taken before issues become problems. 61 62 Report Formats 63 CITY OF SAN RAFAEL Report Format We have conducted audits of many cities and have created numerous reports for our clients throughout the years. And many of our clients receive the CSMFO and GFOA reporting awards. Included under separate cover are copies of report formats demonstrating our ability to produce the following reports: 1. CAFR 2. RDA 3. Childcare 4. Single Audit We can provide additional reports if so desired. 65 No Fee Services 67 CITY OF SAN RAFAEL "No Fee" Services We offer other services at no additional cost to the City. These other services include: . On-site participation of both Partners of the Firm (at least 75 hours) at no additional cost to the City. Mr. Caporicci, the Engagement Partner, will physically be present at the City's facilities for at least 45 hours during the engagement to supervise staff, evaluate City operations, coordinate audit activities, develop relationships with City Management and staff, and to provide technical expertise during the audit process. Mr. Larson, a partner of the Firm, will be present at City facilities for at least 30 hours to coordinate and supervise the internal control evaluation and Single Audit compliance phases of the engagement. His expertise in operational and system controls and Single Audit compliance requirements will assure that this phase of the audit process will be conducted efficiently and effectively to the benefit of the City. . Providing the City with at least 30 hours of consulting service in each of the audit years at no cost to the City. These hours can be used by the City for whatever City Management considers appropriate. Some of our clients have asked us to assist in conversions of EDP systems, develop financial projections, evaluate proposal on in -sourcing of paramedic services, review compliance with investment policies, evaluate bond offerings from a financial perspective, assist in property and equipment inventories, to name only a few of the special projects for which the City may desire assistance. • Providing updates to City finance staff on recent developments in governmental accounting and reporting at no cost to the City. . The Firm will perform the agreed upon procedures to review the GANN Appropriations Limit calculations at no cost to the City. 69 Conclusion 71 CITY OF SAN RAFAEL Conclusion A client relationship with the City will be of great value to our Firm and we welcome the opportunity to develop a long-term relationship. We are committed to: Rendering the highest standard of service. Establishing a long-term working relationship dedicated to meeting the needs of the City. . Assisting the City in operational issues. . Producing a quality end -product. We possess the technical qualifications and experience to provide the level of service desired and expected by the City of San Rafael and stand ready to provide our knowledge and experience for the benefit of your organization. We would like to express our appreciation to the City and to its Staff for allowing us the opportunity to submit a proposal to perform professional auditing services. We are available, at your convenience, to discuss any aspects of our proposal. Thank you for allowing us to present our Firm. �A 'aci�'�'%`I°°`' LeK-, CCP Walnut Creek, California LL February 20, 2000 73 City of San Rafael Proposal to Perform Professional Auditing Services For the years ended June 30, 2000 through June 30, 2004 Submitted February 25, 2000 Contact Person: Stephen L. Larson Caporicci, Cropper & Larson, LLP Certified Public Accountants 1575 Treat Blvd., Suite 208 Walnut Creek, CA 94598 Phone: (925) 932-3860 EXHIBIT C CCL Caporicci, Cropper & Larson, LLP Certified Public Accountants CITY OF SAN RAFAEL Table of Contents ��� "� , � ��,:�;Seale.d_�D►c�l.,lavr��o��'Bi f:;-- .�: > �.f Comprehensive Dollar Cost Bid - Name of Firm - Certification - Total All -Inclusive Maximum Price for the Engagement - Discount - Rates by Partner, Specialist, Supervisor, and Staff - Out of Pocket Expenses - Rates for Additional Professional Services - Manner of Payment - Summary Schedule of Professional Fees and Expenses - Summary of Proposed Fees -Fees by Staff Category - Fees by Type of Service -2000 -2001 -2002 -2003 -2004 Page 3 3 3 4 4 4 5 5 6 9 13 19 T 7 Comvrehensive Dollar Cost Bid id CITY OF SAN RAFAEL Comprehensive Dollar Cost Bid We are committed to the performance of a high quality audit at the most reasonable fee level possible, both initially and throughout the engagement. In the interest of developing a long- term relationship, we will absorb all costs required to familiarize ourselves with the operations and accounting systems. Additionally, the engagement Partner will be available to provide advice and consultation as necessary to the City. These costs will also be absorbed by the Firm. Name of Firm: Caporicci, Cropper & Larson, LLP Certified Public Accountants 1575 Treat Blvd., Suite 208 Walnut Creek, California 94598 Certification: The person signing the proposal is entitled to represent the Firm, empowered to submit the bid and authorized to sign a contract with the City of San Rafael. Total All -Inclusive Maximum Price: ;�:"All=Inclpsi�e Maicimuifi�'' Year 2000 $ 38,875 2001 39,350 2002 39,975 2003 39,840 2004 39,840 Total 11 $ 197,880' We believe the above pricing is fair and reasonable to both the City and to the Firm. The above All -Inclusive Maximum Price includes all direct and indirect costs including printing, out-of-pocket expenses and an escalation factor for inflation. } CITY OF SAN RAFAEL Comprehensive Dollar Cost Bid Discount: Because of the importance of your City to our strategic plan, we have discounted our normal fee structure. This discount in fees, already included in the All - Inclusive Maximum Price, amounts to: 'F Year Total 2000 $ 10,000 2001 5,000 2002 5,000 2003 1,460 2004 1,460 Total 11 $ 22,920 II Rates by Partner, Specialist, Supervisor, and Staff: For the year ended June 30, 2000: Detail of rates for all years in the format prescribed by the RFP is included in the section labeled "Schedule of Professional Fees and Expenses". Out of Pocket Expenses All out of pocket expenses will be absorbed by the Firm. 4 Hourly, Estimated - Billing Total Total. Name/Fuinction • Rate - Hours Costs Gary M. Caporicci, CPA (Partner) $ 115 45 $ 5,175 Stephen L. Larson, MBA, CPA (Partner) 115 30 3,450 Joe Arch, MBA, MPA, CPA (Manager) 105 50 5,250 Jay Clark (Senior) 85 200 17,000 Shin Green (Professional Staff) 50 200 10,000 Steve Amos (Professional Staff) 50 120 6,000 Administrative Staff 40 50 2,000 Total 695 48,875 Less Discount (10,000) All -Inclusive Maximum Cost $ 38,875 Detail of rates for all years in the format prescribed by the RFP is included in the section labeled "Schedule of Professional Fees and Expenses". Out of Pocket Expenses All out of pocket expenses will be absorbed by the Firm. 4 CITY OF SAN RAFAEL Comprehensive Dollar Cost Bid We are committed to the performance of a high quality audit at the most reasonable fee level possible, both initially and throughout the engagement. In the interest of developing a long- term relationship, we will absorb all costs required to familiarize ours /es with the operations and accounting systems. Additionally, the engagement Partnerw' 1 be available to provide advice and consultation as necessary to the City. These costs will so be absorbed by the Firm. Name of Firm: Caporicci, Cropper & Larson, LLP Certified Public Accountants / 1575 Treat Blvd., Suite 208 Walnut Creek, California 94598 , Certification: The person signing the proposal is entitled to represent the Firm, empowered to submit the bid'and authorized to sign a contract with the City of San Rafael. ' Total All -Inclusive Maximum Price: \ VA L f Yj 2000 $ 38,875 2001 39,350 2002 39,975 2003 39,840 2004 39,840 Total 11 $ 197,8801( We believe the above pricing is fair and reasonable to both the City and to the Firm. The above All -Inclusive Maximum Price includes all direct and indirect costs including printing, out-of-pocket expenses and an escalation factor for inflation. CITY OF SAN RAFAEL Comprehensive Dollar Cost Bid Rates for Additional Professional Services We are hesitant to simply state hourly rates, as often times the needs of the client and the specific tasks directly impact the billing rates for our services. We maintain a policy of flexible billing rates and try to work within client cost -control parameters. However, to provide the City with additional information, the following are our current published billing rates: 'E�`2`�a�:�u ��'. � 1 �+ l'--'� �n.s:' Sk"9,s r"v,� • �' ' :1P � x�' Partner $ 150.00 Director $ 125.00 Manager $ 105.00 Senior $ 95.00 Professional Staff $ 75.00 Administrative Staff $ 50.00 It is Firm policy, during the term of the audit contract, to match the lowest qualified bid on additional financial related services required by the City. Manner of Payment Each Engagement Team member maintains detailed time sheets describing work performed, date of work, and amount of time spent on each task for the Engagement. The Firm will summarize the amount of time spent during the month and bill the City based on the hourly rates published in the proposal up to a maximum of 90%. The remaining 10% of the proposal amount will not be due until all final reports are delivered and accepted by the City. Based on our previous experience, the City can anticipate three billings as follows: For interim work 45% For year end work 45% At presentation and acceptance of final reports 10% Total 100% CITY OF SAN RAFAEL Comprehensive Dollar Cost Bid Payment by the City is due 30 days after receipt of each billing. A late fee of 1.5% of the billed but unpaid balance will be added for each 30 -day period that the bill remains unpaid. Summary We are able to offer our services at this fee level because: We possess the necessary experience and technical knowledge to perform an effective and efficient audit. We are very familiar with the accounting requirements of the City through past relationships with similar organizations. We use a comprehensive advanced planning process involving both our personnel and the City's key personnel. . We desire a long-term relationship with the City. In order to maximize the cost/benefit relationship of our services, we will also attempt to identify significant areas for improvements and cost savings. These observations will be communicated to the City Management. ************** Walnut Creek, California February 25, 2000 I Schedule of Professional Fees and Summary of Proposed Fees City of San Rafael SUMMARY OF PROFESSIONAL FEES ANIS EXPENSES All-Inclusige Maximum price (Net of Discouni)' 3Lrvlces 1 General Purpose Financial Statements 2 Redevelopment Agency 3 Child Development Program 4 (Single Audit 5 IGANN Limit Calculation All -Inclusive Maxint'tim Price - Hours • _ Servicesl, x•`, 1 General Purpose Financial Statements 2 Redevelopment Agency 3 (Child Development Program 4 ISingle Audit 5 IGANN Limit Calculation Total Hours Summary of Proposed Fees June 30, 2000 through June 30, 2004 I,turlyRateS„::,;::r,-•zti;. _. .su 4 3;: �` �,z �. Peis TinelR 4999401.,,[ x 2000-01 ;yrs r •• ' ' .:�'��'�'q`,�'. 1999-06 2000 01 a f2UU1-020 1:{'e2002-03 ' 2003.04 $ 115 $ 115 $ 115 $ 125 $ 125 1Manager „ . 105 1 105 1 105 1 $ 28,845 $ 28,570 $ 28,655 $ 28,450 $ 28,450 $ 142,970 4,150 4,465 4,245 95 4,275 4,275 21,410 2,785 2,045 2,255 + 2,265 2,265 11,615 3,095 I I 4,2701 4,8201 4,8501 4,850 21,885 $ 38,875 I $ 39,350 I $ 39,9751 $ 39,840 I $ 39,840 1 $ 197,880 50 1999-OQ 206001"i; _ 2001=(12r §ti2002-03 2t10�-04'' 482 444 405 370 370 I 75 1 631 561 56 I 56 46 I 31 I 321 32 I 32 73 1 63 1 63 1 6311 63 19 I 19 1 191 19 1 19 695 ( 6201 575 I 540 I 540 I,turlyRateS„::,;::r,-•zti;. _. .su 4 3;: �` t.. r; _ .•,+.:..l•.... �, + ;. :y� ar.. '�''�'" 'a+ a:.+i•,4!:;�.;�t..Y, , �. Peis TinelR 4999401.,,[ x 2000-01 2061-02 ; 03 ' ' x2002 OU3-04 Partner $ 115 $ 115 $ 115 $ 125 $ 125 1Manager „ . 105 1 105 1 105 1 105 1 105 Supervisor 85 I 85 1 951 95 I 95 Staff I 50 I 50 I 601 60 I 60 (Administrative 401 401 501 501 50 Cost of Impact on 9.66 o£'Audil Because of System Migraifon and Implementation of, GASB 34 1 System Migration 2 Implementation of GASB 34 Total Cost ' •r far r..';. • n,4 J , .F , For the. Fiscal �Gt~ai fir: . ` ' *,� ` t' .. .� ,Total �y kr 1999-00 2000-01 2601-02 x '2002 03 2Q03 04 5 Xeaze $ $ 1,280 $ 2,650 $ $- $ 3,930 $ - $ 1,280 $ 2,650 1 $ - $ - 1 $ 3,930 Notes (**) a. Includes Auditor preparing financial statements. a. Costs based on services required in Section 11 and exclude potential cost impacts in Appendices G and H. 10 City of San Rafael SUMMARY OF PROFESSIONAL. FEES AND EXPENSES COSTS Professional Fees Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses Meals and lodging Transportation Other - Printing Costs Total Expenses Gross Charges Less Discount Total All -Inclusive Maximum Price HOURS Partners Managers Supervisory Staff Professional Staff Other Total Hours Total Costs of All Years thgtlkf�al Yearfill° 50 1 50 25 1 25 50 $ 8,625 $ 5,750 $ 5,750 $ 3,125 $ 3,12511$ 26,375 5,250 6,300 4,200 290 3,150 3,15011 22,050 1 17,000 17,000 16,625 20I 16,625 16,625 11 83,875 16,000 14,500 17,400 17,400 17,400 11 82,7001 2,000 I 800 I 1,000 1,000 1,00011 5,800 48,875 44,350 44,975' 41,300' 41,30011 220,800 1 48,875 1 44,350 44,975 1 41,300 1 41,300 11 220,800 (10,0001I (5,000) I 1 (5,000) I (1,460) 1 (1,460)II (22,920)I 1$ 38,875 1 $ 39,350 1 $ 39,975 1 $ 39,840 1 $ 39,840 1, $ 197,880 97740 ' R I 4 L�±va{-!r111"19110014271 '$'ri LVN4�{h,. ,.'r I• 75 50 1 50 25 1 25 50 60 1 40 30 1 30 200 1 200 175 1 175 175 1 320 1 290 290 290 290 50I 20I 20I 20I 20I 695 1 620 575 1 540 1 540' This page intentionalhy left blank 12 Fees by Staff Category 13 City of San Rafael SCHEDULE OF PROFESSIONAL FEES AND EXPENSES I Supporting Schedule for year ending June 30, 2000 Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total All -Inclusive Maximum Price Quoted Hourly Rates 115 105 85 50 40 Total Hours. Total Bid 75 $ 8,625 50 5,250 200 17,000 320 16,000 50 2,000 695 48,875 1 48,875 1 1 (10,000) 1 1 $ 38,875 1 14 City of San Rafael �i, S BDL UVWil'ROFE S ON ,' A� BSS Supporting Schedule for year ending June 30, 2001 Expenses: Meals and lodging - Transportation - Other - Printing - Total Expenses - Gross Charges ' 44,350 1 Less Discount 1 (5,000) 1 Total All -Inclusive Maximum Price 1 $ 39,350 1 )iiiad '� xY.� 1,r 10 Professional Fees: ... Partners $ 115 50 $ 5,750 Managers 1051 60 6,300 Supervisory Staff 85 + 200' 17,000 Professional Staff 50 290 14,500 Other - Administrative Staff Support 40 20 800 Total Professional Fees 620 44,350 Expenses: Meals and lodging - Transportation - Other - Printing - Total Expenses - Gross Charges ' 44,350 1 Less Discount 1 (5,000) 1 Total All -Inclusive Maximum Price 1 $ 39,350 1 City of San Rafael SCHEDULE OF PROFESSIONAL FEES AND EXPENSES. Supporting Schedule for year ending June 30, 2002 Professional Fees: Partners — Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total All -Inclusive Maximum Price ,Quoted Tcital 1 ; Hours ,Quoted Tcital Hourly= ; Hours To#al Bid Rates $ 115 50 $ 5,750 105 40 4,200 95 175 16,625 60 290 17,400 50 201 1,000 575 1 44,975 1 44,975 1 1 (5,000) 1 1 $ 39,975 1 City of San Rafael SCHEDULE OF PROFESSIONAI FEES', D'�BX ?!ENS.E Supporting Schedule for year ending June 30, 2003 1 Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total All -Inclusive Maximum Price MCI { _ obis'' $ 125 25 $ 3,125 105 30 3,150 95 175 16,625 60 290 17,400 50 I 20 I 1,000 540 41,300 41,300 (1,460) 1 $ 39,840 1 City of San Rafael SCHEDULE OF PROFESSIONAL FEES AND EXPENSES I Supporting Schedule for year ending June 30, 2004 1 Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total All -Inclusive Maximum Price Qud4ec� Total Hourly' Hours Total Bid Rates $ 125 25 $ 3,125 105 30 3,150 95 175 16,625 60 290 17,400 50 20 1,000 540 41,300 41,300 I (1,460) 1 $ 39,840 1 IS Fees by Type of Service 19 This page intentionally left blank. 20 2000 City of San Rafael SUMMARY OF PROFESSIONAL FEES AND EXPENSES For the Audit of the 2000 Financial Statements: Combining Schedule - All City Services COSTS Nature of Services to be Provided (Net of Discounts): City Audit and Management Letter Audit of San Rafael Redevelopment Agency Audit of San Rafael Child Development Program Single Audit GANN Limit Calculation Total Audit Cost for All City Services HOURS Nature of Services to be Provided: City Audit and Management Letter Audit of San Rafael Redevelopment Agency Audit of San Rafael Child Development Program Single Audit GANN Limit Calculation Total Hours for All City Services jdtal Price, $ 28,845 4,150 2,785 3,095 $ 38,875 Total Hours 482 75 46 73 19 695 2" f - City of San Rafael SCHEDVEOEOPPR For the Audit of the 2000 Financial Statements: Audit and Management Letter I Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Start-up Discount Total Cost T, 0 115 51 5,865 105 36 3,780 85 1451 12,325 50 215 10,750 40 I 35 I 1,400 482 34,120 34,120 (5,275)1 $ 28,845 1 23 City of San Rafael SCHEDULE OF PROFESSIONAL FEES AND EXPENSES For the Audit of the 2000 Financial Statements: Redevelopment Agency Audit Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Start-up Discount Total Cost Quoted Hourly Rates Total , Total Bid Hours $ 115 10 $ 1,150 105 5 525 85 15 1,275 50 40 2,000 40 I 5 I 200 75 5,150 5,150 1 (1,000) 1 $ 4,150 1 2.1 City of San Rafael SCHEDULE OF, P.,ROVESSIONAL FE SAN �?CP'ENSES 1 � For the Audit of the 2000 Financial Statements: Child Development Program Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Start-up Discount Total Cost Quoted,< r, Total Harly Hocxs Tofal`'Bi $ 115 5 $ 575 105 3 315 85 15 1,275 50 20 1,000 40 I 3 I 120 46 3,285 3,285 1 (500) 1 $ 2,785 I 25 City of San Rafael SCHEDULE OF PROFESSIONAL FEES AND EXPENSES For the Audit of the 2000 Financial Statements: Single Audit Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Start-up Discount Total Cost Quoted Hourly- Rates ourly_Rates Total Total Bid Hours $ 115 8 $ 920 105 5 525 85 20 1,700 50 35 1,750 40 5 200 73 5,095 I - 5,0951 I (2,000) 1 $ 3,095 2r� City of San Rafael SCHEDULE, 1? PRO ESSI NIII; EE D EVENS$S t -_......il..i•��.��.��.i. yY, f�„`�'�Ya��'� r 'I' ..R:Fi �4Cq�+y�;'��i�5�k�' Q' - For the Audit of the 2000 Financial Statements: GANN Limit Calculation Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Start-up Discount Total Cost �:• uoted�;�e �� i. )Iouirl Total y7 .Li18Q�Q�� $ 115 1 $ 115 105 1 105 85 5 425 50 10 500 40 I 2 I 80 19' 1,225 27 This page intentionally left blank. 28 2001 ')n City of San Rafael SUMMARY OF PROFESSIONAL FEES AND EXPENSES For the Audit of the 2001 Financial Statements: Combining Schedule - All City Services COSTS Nature of Services to be Provided (Net of Discounts): City Audit and Management Letter Audit of San Rafael Redevelopment Agency Audit of San Rafael Public Financing Authority Single Audit GANN Limit Calculation Total Audit Cost for All City Services HOURS Nature of Services to be Provided: City Audit and Management Letter Audit of San Rafael Redevelopment Agency Audit of San Rafael Public Financing Authority Single Audit GANN Limit Calculation Total Hours for All City Services Total Price $ 28,570 4,465 2,045 4,270 $ 39,350 Total Hours 444 63 31 63 19 620 30 City of San Rafael jIT df"�'roi: SCHEDUL'O! yRP .k FESSIQ{ �AF. a1,U Ems'. $F9� 4 atia� r�dlr�k,':ntsrF xra '� `P'p ri E�� �F� w �.,Y;,k• er., ��. ��3�;rc For the Audit of the 2001 Financial Statements: Audit and Management Letter Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost r r; Po t Uo a i� Se �$ 115 42 $ 4,830 105 43 4,515 85 1451 12,325 50 205 10,250 40 I 9 , 360 444 32,280 32,280 1 (3,710) 1 $ 28,570 1 City of San Rafael SCHEDULE OF PROFESSIONAL FEES AND EXPENSES' For the Audit of the 2001 Financial Statements: Redevelopment Agency Audit Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost N Quoted Total. Hourly flours' ' ` Total Sid Rates - 115 3 $ 345 105 8 840 85 20 1,700 50 301 1,500 40� 2 80 63 4,465 4,465 -I $ 4,465 12 City of San Rafael K .:•'.�'N: � i'3 .. " .'. .... .: � .'... s : ' :.� ^r,' � 'i�I+ �s y. ^ .... �inf 'h JJSP V � .:... .'il. Zr-:� SCHEDULE y., 4 ;�• . ;`''�� it ��,$.:-' '� a U ;P�}IOFESSIO�NA><:',�E . - .. .L .r �!��'^i'.�-..i�S�d".�F �� C�L r���.�1[�-�1�� :1f���,���_�5�I1Td CTiir�'�.•�if3tf5: For the Audit of the 2001 Financial Statements: Child Development Program Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost • rFlo eclt ,=� , ates $ 115 1 $ 115 105 2 210 85 10 850 50 15 750 40 3 120 31 2,045 2,045 $ 2,045 33 City of San Rafael SCHEDULE OF PROFESSIONAL FEES AND EXPENSES For the Audit of the 2001 Financial Statements: Single Audit Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost Quoted Hourly Total Rates Hours Total Bid 1 1151 3 $ 345 105 5 525 85 201 1,700 501 30 + 1,500 40 + 5 1 200 631 4,270 4,270 �1 $ 4,2701 is City of San Rafael For the Audit of the 2001 Financial Statements: GANN Limit Calculation Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost $ 115 105 85 50 40 1 $ 2 5 10 1 19 I$ 115 210 425 500 40 1,290 This page intentionally left blank 16 2002 37 City of San Rafael SUMMARY OF PROFESSIONAL FEES"AND EXPENSES For the Audit of the 2002 Financial Statements: Combining Schedule - All City Services COSTS Nature of Services to be Provided (Net of Discounts): City Audit and Management Letter Audit of San Rafael Redevelopment Agency Audit of San Rafael Public Financing Authority Single Audit GANN Limit Calculation Total Audit Cost for All City Services HOURS Nature of Services to be Provided: City Audit and Management Letter Audit of San Rafael Redevelopment Agency Audit of San Rafael Public Financing Authority Single Audit GANN Limit Calculation Total Hours for All City Services a 090114 $ 28,655 4,245 2,255 4,820 $ 39,975 Morolt urs 405 56 32 63 19 575 38 City of San Rafael For the Audit of the 2002 Financial Statements: Audit and Management Letter Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost $ 115 42 $ 4,830 105 25 2,625 95 130 12,350 60 200 12,000 50 8 400 405 32,205 1 32,205 1 1 (3,550) 1 1 $ 28,655 1 39 City of San Rafael SCHEDULE OF PROFESSIONAL FEES AND EXPENSES For the Audit of the 2002 Financial Statements: Redevelopment Agency Audit Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost u` ted: Total Hourly r Totahffid :Hours.; :r Rates : , _--fw , air $ 115 3 $ 345 105 5 525 95 15 1,425 60 30 1,800 50 I 3 150 56 4,245 4,245 -I f j $ 4,2451 M City of t JJ�� � r 3�, ..•.-�l:.ko:_.4�.:t•Y3:%vsSfa.0 ..:.i• $ � f � '6-, For the Audit of the 2002 Financial Statements: Child Development Program Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost $ 115 1 $ 115 105 3 315 95 5 475 60 20 1,200 50 3 150 32 2,255 2,255 �I $ 2,255 City of San Rafael S;IEDULEQFA. For the Audit of the 2002 Financial Statements: Single Audit Ki ';y EBF.• �r.,,; •-;� Professional Fees: Partners $ 115 3 $ 345 Managers 105 5 525 Supervisory Staff 95 20 1,900 Professional Staff 60 30 1,800 Other - Administrative Staff Support 50 5 250 Total Professional Fees 63 4,820 Expenses: Meals and lodging - Transportation - Other - Printing - Total Expenses - Gross Charges 1 4,820 1 Less Discount I - I Total Cost 1 $ 4,8201 42 City of San Rafael For the Audit of the 2002 Financial Statements: GANN Limit Calculation Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost $ 115 1 $ 115 105 2 210 95 5 475 60 10 600 50 1 50 19 1,450 43 This page intentionally left blank. 411 2003 45 City of San Rafael SUMMARY OF PROFESSIONAL FEES AND EXPENSES For the Audit of the 2003 Financial Statements: Combining Schedule - All City Services COSTS Nature of Services to be Provided (Net of Discounts): City Audit and Management Letter Audit of San Rafael Redevelopment Agency Audit of San Rafael Child Development Program Single Audit GANN Limit Calculation Total Audit Cost for All City Services HOURS Nature of Services to be Provided: City Audit and Management Letter Audit of San Rafael Redevelopment Agency Audit of San Rafael Child Development Program Single Audit GANN Limit Calculation Total Hours for All City Services ,,Total Price $ 28,450 4,275 2,265 4,850 $ 39,840 Total' Hours 370 56 32 63 19 540 46 City of San Rafael For the Audit of the 2003 Financial Statements: Audit and Management Letter Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost I r HF uoy�d"ti �i"p�� � • w.F pn $ 125 17 $ 2,125 105 15 1,575 95 130 12,350 60 200 12,000 50 8 400 370 28,450 28,450 -1 $ 28,450 47 City of San Rafael SCHEDULE OF PROFESSIONAL FEES AND.EXPENSES For the Audit of the 2003 Financial Statements: Redevelopment Agency Audit Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost 3: Quoted Hourly Total Total Sid r.. -Rates Hours $ 125 3 $ 375 105 5 525 95 15 1,425 60 30 1,800 50 3 150 561 4,275 4,275 1 $ 4,275 1 48 City of San Rafael SCHEDULE PRJESSIONAIrD#rES�E.�S}'�,��;. ••,�'��1��?i�"O`..'i For the Audit of the 2003 Financial Statements: Child Development Program Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost t Ur N. ' TSO4s: Ili Mb !3 2 $ 125 105 j 95 60 501 1I$ 3� 5� 20 3I 32 125 315 475 1,200 150 2,265 2,265 2,265 City of San Rafael SCHEDULE OF PROFESSIONAL FEES AND EXPENSES. For the Audit of the 2003 Financial Statements: Single Audit Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost • � .Hourly :,N• :' ,t.&A Bid ���ry.,a ''Rat es , �. $ 125 3 $ 375 105 5 525 95 20 1,900 60 30 1,800 50 5 250 63 4,850 4,850 -I $ 4,850 50 City of San Rafael SCHEDULE OF PROFESSIONAL FEE§ 7D/ fiXPENSE5 : r, For the Audit of the 2003 Financial Statements: GANN Limit Calculation gQubted: k '110 ; Y. F.Y ti xeHou4y 41.1{., t Professional Fees: Partners $ 125 1 $ 125 Managers 105 2 210 Supervisory Staff 95 5 475 Professional Staff 60 10 600 Other - Administrative Staff Support 50 I 1' 50 Total Professional Fees 19 1,460 Expenses: Meals and lodging - Transportation - Other - Printing - Total Expenses - Gross Charges ' 1,460 1 Less Discount I (1,460) 1 Total Cost I $ _ I 51 This page intentionally left blank. 2004 City of San Rafael SUMMARY OF PROFESSIONAL FEES AND EXPENSES For the Audit of the 2004 Financial Statements: Combining Schedule - All City Services, COSTS Total Price Nature of Services to be Provided (Net of Discounts): City Audit and Management Letter $ 28,450 Audit of San Rafael Redevelopment Agency 4,275 Audit of San Rafael Child Development Program 2,265 Single Audit 4,850 GANN Limit Calculation - Total Audit Cost for All City Services $ 39,840 HOURS Total Hours Nature of Services to be Provided: City Audit and Management Letter 370 Audit of San Rafael Redevelopment Agency 56 Audit of San Rafael Child Development Program 32 Single Audit 63 GANN Limit Calculation 19 Total Hours for All City Services 540 54 City of San Rafael .SCHEDULE OF POOFESSIONA ifEE AN JCI' Sw FNSES For the Audit of the 2004 Financial Statements: Audit and Management Letter Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost r..st , r..:,.,.. 'Qu' fecp Hol, $ 125 17 $ 2,125 105 15 1,575 95 130 12,350 60 200 12,000 50 8 400 370 28,450 28,450 $ 28,450 ;i5 City of San Rafael SCHEDULE OF PROFESSIONAL FEES AND EXPENSES For the Audit of the 2004 Financial Statements: Redevelopment Agency Audit Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost Quoted Hourly Rates Totat Total Sid Hours $ 125 3 $ 375 105 5 525 95 15 1,425 60 30 1,800 50 , 3 150 56 1 4,275 4,275 �I $ 4,275 56 City of San Rafael SCHEDTJL, QF )?RO E SIOhTAL E AND. E2T�E SES For the Audit of the 2004 Financial Statements: Child Development Program Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost brl��� x'- $ 125 1 $ 125 105 3 315 95 5 475 60 20 1,200 50 I 3 I 150 32 2,265 2,265 -I $ 2,265 F7 City of San Rafael s SCHEDULE OF PROFESSIONAL FEES AND EXPENSES For the Audit of the 2004 Financial Statements: Single Audit Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost `Quofed Total ' ; Hourly;. Total Bid. Rates Hours. 125 31 $ 375 105 5 1 525 95 201 1,900 601 301 1,800 50 5 I 250 631 4,850 4,8501 $ 4,8501 58 City of San Rafael SCHEDULE Of PROkS,SIONAIjFEES AAND EXITNl ES For the Audit of the 2004 Financial Statements: GANN Limit Calculation Professional Fees: Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses: Meals and lodging Transportation Other - Printing Total Expenses Gross Charges Less Discount Total Cost 6aces �. $ 125 1 $ 125 105 2 210 95 5 475 60 10 600 50 I 1 I 50 191 1,460 1,460 (1,460) 1 rIo This page intentionally left blank. 60 Estimated Cost Impact on Audit Scope because of Migration to New System and Implementation of GASB 34 61 City of San Rafael SUMMARY OF PROFESSIONAL FEES AND EXPENSES ; Appendix G Estimated Additional Professional Fees and Expenses for the Annual Impact of Replacement Financial Systems HOURS Partners Managers Supervisory Staff Professional Staff Other Total Hours HOUR,RATES Partners Managers Supervisory Staff Professional Staff Other 1999-00.:. 2000-01 . ' 2001-02 ' 2002-03; 2003-04 ,_ �"fi::'Yi : 9.� For the Fiec�l. Year :. :.. r• : ' a. _ . Total COSTS 1 " 1999=00 12000-01, . 2001-02' f 2002-03 `. •2003=04- . f 5 Years _ Professional Fees I I I Partners 1 $ - $ 230 $ 575 $ - $ I $ 805 1 Managers g 1 1,050 525 - - 1 1,575 Supervisory Staff 1 - - 950 1 9501 Professional Staff 1 600 6001 Other - Administrative Staff Support 2002=03 . = I - - I II _ I Total Professional Fees 1 1,280 1 2,650 1 -11 3,9301 Expenses 105 105 105 1 85 85 Meals and lodging 1 I 1 501 I II 60 1 Transportation 1 = l I 401 11 501 Other - Printing Costs Total Expenses Estimated Charges t 1 $ - � $ 1,280 � $ ilGross 2,650 � $ - � $ - 3,9301 HOURS Partners Managers Supervisory Staff Professional Staff Other Total Hours HOUR,RATES Partners Managers Supervisory Staff Professional Staff Other 1999-00.:. 2000-01 . ' 2001-02 ' 2002-03; 2003-04 (Vote: Estimated costs are based on the assumption that the new system was installed in a timely manner, appropriate reconciliations between old and new systems have been performed by City Staff, and reconciling items have been addressed and resolved. The Firm's efforts will involve review of the new computer system, verification of old system ending balances with new system beginning balances, testing of recorded Iruisaclions in the new system to supporting documentation, and general familiarization with new system operations and documentation. We have assisted with numerous computer system conversions and should the City require assistance in the implementation effort, we would be pleased to submit our estimate of fees. Additionally, the City may want to use the 30 hours of consulting time provided by us at no cost to the City to asset it in the conversion process. 62 2 5 1 10 5 - 1 1 - 10 I -I 101 I -I I 121 I 301 I -I _ 1999-00., 2000-01 .. ,2061-09 g. ", 2002=03 . = 2003-04L . $ 115 $ 115 $ 115 $ 125 $ 125 1 105 105 105 105 105 1 85 85 95 95 95 501 501 60 1 601 60 I` 401 401 501 501 50 (Vote: Estimated costs are based on the assumption that the new system was installed in a timely manner, appropriate reconciliations between old and new systems have been performed by City Staff, and reconciling items have been addressed and resolved. The Firm's efforts will involve review of the new computer system, verification of old system ending balances with new system beginning balances, testing of recorded Iruisaclions in the new system to supporting documentation, and general familiarization with new system operations and documentation. We have assisted with numerous computer system conversions and should the City require assistance in the implementation effort, we would be pleased to submit our estimate of fees. Additionally, the City may want to use the 30 hours of consulting time provided by us at no cost to the City to asset it in the conversion process. 62 City of San Rafael SUMMARY OF PROFESSIONAL FEES AND EXPENSES' COSTS Professional Fees Partners Managers Supervisory Staff Professional Staff Other - Administrative Staff Support Total Professional Fees Expenses Meals and lodging Transportation Other - Printing Costs Total Expenses Gross Estimated Charges HOURS Partners Managers Supervisory Staff Professional Staff Other Total Hours HOUR RATES Partners Managers Supervisory Staff Professional Staff Other Appendix H Estimated Additional Professional Fees and Expenses for the Annual Impact of GASB 34 Requirements x� �i F�is a caluYea=?•��="'���'�"�� U� ate 2atk.a�a.w I I Is -$ -$ -$ -$ $ - I II I - �- -I- I$ -I$ -I$ -I$ -I$ 1:.1000-00 12'k: 200 .x+�'� I 04"!X-04 ' .200MV7. z op:.L=,02 <::" '200Y 03;s zot�3 Q4 1 I $ 115 $ 115 $ 115 $ 125 $ 125 I I 105 105 105 105 105 85 85 95 95 95 50 50 60 60 60 40 40 50 50 501 Note: We do not expect any significant scope issues with the audit beyond the normal audit process. Consequently, we will not charge the City for any audit efforts resulting from GASB 34 implementation. However, the audit of the City's post GASB 34 implementation is not the issue. The actual implementation of GASB 34 will require significant efforts, resources, and costs for the City. The development of the financial model, identification and valuation of infrastructure assets, establishment of on-going tracking systems for the infrastructure assets, and general conversion to a full accrual based approach to recording transactions will require significant planning, assignment of dedicated resources, and follow-through to accomplish the implementation within the timeframes required. The task should not be underestimated and we stand ready to assist the City in its efforts to comply with the provisions of GASB 34. We have formed an alliance with Charles Abbott Associates, an engineering firm providing services to municipalities throughout California. Our combined knowledge of the technical requirements of GASB 34 and the operational environment of the City provides a resource to assist you in the implementation. We will be pleased to submit our proposal to assist you in implementing GAS13 34. 6'4 This page intentionalhl left blank.