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.
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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.
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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.
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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
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CAPORICCI, CROPPER & LARSON,LLP
By
Name: STEPHEN L. LARSON
Title: Partner
(Revised 6/99)
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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
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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
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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
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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
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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
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