HomeMy WebLinkAbout1998-06-02; City Council; 14695; SELECTION OF CONRAD & ASSOCIATES FOR FINANCIAL AUDIT0 w
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- %TY OF CARLSBAD - AGENR BILL
AB# /4, (945 TITLE:
CITY ATN. SELECTION OF CONRAD &ASSOCIATES MTG. ' 06/02/98
DEPT HD. - u
I 'FIN I I. DEPT. ' FOR
FINANCIAL AUDIT I CITY MGR.
I I I
RECOMMENDED ACTION:
Adopt Resolution No. 98 - 15 9 authorizing the selection of the audit firm of Conrad & Assc
perform the City's financial audit for fiscal years 1997-98, 1998-99, and 1999-00, with an
extend for two additional years.
ITEM EXPLANATION:
The City has retained the certified public accounting firm of Conrad & Associates to perfr
services for the last five years. The Finance Department has been pleased with their ser
periodically it is necessary to request proposals from public accounting firms to assure se
price competitiveness. RFPs were solicited from 18 firms with the following 10 firms responc
Calderon, Jaham & Osborn Caporicci & Larson
Conrad & Associates, LLP Deloitte & Touche, LLP
Diehl, Evans & Company, LLP KPMG Peat Marwick, LLP
McGladrey & Pullen, LLP Moreland & Associates
Peterson & Company Thomas, Bigbie & Smith
An audit review committee examined the RFPs for firm and staff qualifications and experiel
approach, expertise in governmental auditing, and experience in providing on-going consulting services to municipalities. Two firms considered to be the most qualified at a re
check, the committee has selected Conrad & Associates.
Conrad & Associates specializes in local government accounting and comes highly recot
from other municipalities. In addition, their performance has been outstanding while assistin
with audit services for the last five years.
FISCAL IMPACT:
cost were selected for the oral interview process. Upon completion of the interviews and
Although cost was not a primary factor in the selection, bids for fiscal year 1997-98 rar
$35,000 to $65,000. Bids from smaller firms clustered under $40,000, while the bids fro1
larger firms were at the high end. The Conrad & Associates bid for fiscal year 1997-98 was
and total cost for the three fiscal years is $122,413. Sufficient funds are available in tt
budget to cover the fiscal year 1997-98 costs. Audit costs for the remaining two yea
budgeted in future year's budgets.
EXHIBIT:
1. Resolution No. 98 - /5'1 authorizing the selection of the audit firm of Conrad & Associa
to perform the financial audit.
2. Agreement with Conrad & Associates.
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RESOLUTION NO. 98-159
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, AUTHORIZING THE SELECTION OF CONRAD &ASSOCIATES TO PERFORM THE
AND 1999-00 FINANCIAL AUDITS FOR FISCAL YEARS 1997-98,1998-99,
WHEREAS, the audit of the City of Carlsbad financial records is required by the
City Council; and
WHEREAS, bids from certified public accounting firms have been solicited,
accepted, and evaluated; and
WHEREAS, Conrad & Associates has been determined to be the most qualified
at a reasonable cost; and
WHEREAS, funding is expected to be made available in the 1998-99
Operating Budget.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Carlsbad, California, as follows:
1. That the above recitations are true and correct.
2. The public accounting firm of Conrad & Associates is selected to perform the
financial audits for fiscal years 1997-98, 1998-99, 1999-00, with an option to extend for
two additional years.
3. That the agreement between Conrad & Associates and the City of Carlsbad
is hereby approved and the Mayor and City Clerk are hereby authorized and directed to
execute said agreement.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the Carlsbad City
Council held on the 2nd day of June , 1998, by the
following vote, to wit:
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27 ATTEST:
Ayes: Council Members Lewis,
Noes: None
Absent: None
28 k J2.L (SEAL) ALETHA L. RAUTENKRANZ, City Clerk
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AGREEMENT
THIS AGREEMENT is made and entered into as of the #-J NO day 1 - o! I1 fi' 12 /
9- 194 8, by and between the CITY OF CARLSBAD, a municip
corporation, hereinafter referred to as "City", and Conrad & Associates, L. L. P., hereinaft
referred to as 'Contractor."
RECITALS
City requires the services of a Certified Public Accounting Firm to provide the necessa
auditing services for preparation of City Audits; and Contractor possesses the necessary ski
and qualifications to provide the services required by the City;
NOW, THEREFORE, in consideration of these recitals and the mutual =venal
contained herein, City and Contractor agree as follows:
I. CONTRACTOR'S OBLIGATIONS
Contractor will provide professional accounting and auditing services as stated in tt:
Proposal for Audit Services to the City of Carlsbad (Attachment 1) which includes the followin
Audit of the City of Carlsbad's Comprehensive Annual Financial Report
Gann Limit Verifications
Audit of the Public Improvement Corporation
Audit of the Redevelopment Agency
Federal Asset Forfeiture Audit
Audit of the Encina Financing Joint Powers Authority
Single Audit
2. CITY OBLIGATIONS
The City shall comply with the obligations stated in the Request for Proposals
(RFP) for Professional Auditing Services, January, 1998 (on file with the City Clerk).
rev. 1012:
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3. PROGRESS AND COMPLETION
The work under this contract will begin within ten (10) days after receipt of notification tc
proceed by the City and be completed as stated in the RFP. Extensions of time may b8
granted if requested by the Contractor and agreed to in writing by the Finance Director. Th
Finance Director will give allowance for documented and substantiated unforeseeable an
unavoidable delays not caused by a lack of foresight on the part of the Contractor, or delay
caused by City inaction or other agencies' lack of timely action.
4. FEES TO BE PAID TO CONTRACTOR
The total fee payable for the services to be performed shall not exceed $39,800 d
fiscal year 1997-98, $40,797 for fiscal year 1998-99, and $41,816 for fiscal year 1999-00. I'
other compensation for services will be allowed except those items covered by supplemenl
agreements per Paragraph 8, "Changes in Work." The City reserves the right to withhold a tc
percent (1 0%) retention until the project has been accepted by the City.
Incremental payments, if applicable, should be made as outlined in attached Exhibit "A
5. DURATION OF CONTRACT
This agreement shall extend for a period of three (3) years from date thereof. T
contract may be extended by the City Manager for an additional two (2) year period or p
thereof, based upon a review of satisfactory performance and the City's needs. The .part
shall prepare extensions in writing indicating effective date and length of the extended contrac
6. PAYMENT OF FEES
Progress payments will be made on the basis of hours of work completed during '
course of the engagement and out-of-pocket expenses incurred in accordance with the firr
Cost Proposal for Audit Services (Attachment 2). Interim billing shall cover a period of not I
than a calendar month. The final ten percent (10%) of the total price will be paid upon deli\
of the firm's final reports.
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7. FINAL SUBMISSIONS
Complete drafts of the final documents and audit reports will be delivered to the City bl
the following dates:
Encina Financing Joint Powers Authority September 30
Gann Limit Verifications September 30
Public Improvement Corporation September 30
CAFR October 31
Data Collection Form October 31
Federal Asset Forfeiture Audit October 31
Redevelopment Agency October 31
Single Audit October 31
All final reports are to be issued by or before November 15* of each year unless a lat
date is agreed to, in writing, by the Finance Director.
a. CHANGES IN WORK
If, in the course of the contract, changes seem merited by the Contractor or the Cil
and informal consultations with the other party indicate that a change in the conditions of tl
contract is warranted, the Contractor or the City may request a change in contract. SUI
changes shall be processed by the City in the following manner: A letter outlining the requin
changes shall be forwarded to the City by Contractor to inform them of the proposed changl
along with a statement of estimated changes in charges or time schedule. A Standa
Amendment to Agreement shall be prepared by the City and approved by the City according
the procedures described in Carlsbad Municipal Code Section 3.28.172. Such Amendment
Agreement shall not render ineffective or invalidate unaffected portions of the agreement.
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9. COVENANTS AGAINST CONTINGENT FEES
The Contractor warrants that their firm has not employed or retained any company c
person, other than a bona fide employee working for the Contractor, to solicit or secure thi
agreement, and that Contractor has not paid or agreed to pay any company or person, 0th
than a bona fide employee, any fee, commission, percentage, brokerage fee, gift, or any othc
consideration contingent upon, or resulting from, the award or making of this agreement. Fc
breach or violation of this warranty, the City shall have the right to annul this agreement withol
liability, or, in its discretion, to deduct from the agreement price or consideration, or otherwk
recover, the full amount of such fee, commission, percentage, brokerage fees, gift, I
contingent fee.
10, NONDISCRIMINATION CLAUSE
The Contractor shall comply with the state and federal laws regarding nondiscriminatiol
11. TERMINATION OF CONTRACT
In the event of the Contractor's failure to prosecute, deliver, or perform the work i
provided for in this contract, the City Manager may terminate this contract for nonperformanr
by notifying the Contractor by certified mail of the termination of the Contractor. T
Contractor, thereupon, has five (5) working days to deliver said documents owned by the C
and all work in progress to the Finance Director. The Finance Director shall make
determination of fact based upon the documents delivered to City of the percentage of w(
which the Contractor has performed which is usable and of worth to the City in having I
contract completed. Based upon that finding as reported to the City Manager, the Mana!
shall determine the final payment of the contract.
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This agreement may be terminated by either party upon tendering thirty (30) day:
written notice to the other party. In the event of such suspension or termination, upon reques
of the City, the Contractor shall assemble the work product and put same in order for prope
filing and closing and deliver said product to City. In the event of termination, the Contractc
shall be paid for work performed to the termination date; however, the total shall not exceed th,
lump sum fee payable under paragraph 4. The City Manager shall make the final determinatio
as to the portions of tasks completed and the compensation to be made.
12. DISPUTES
If a dispute should arise regarding the performance of work under this agreement, th
following procedure shall be used to resolve any question of fact or interpretation not otherwi:
settled by agreement between parties. Such questions, if they become identified as a part of
dispute among persons operating under the provisions of this contract, shall be reduced
writing by the principal of the Contractor or the City Finance Director. A copy of suc
documented dispute shall be forwarded to both parties involved along with recommendt
methods of resolution which would be of benefit to both parties. The City Finance Director
principal receiving the letter shall reply to the letter along with a recommended method
resolution within ten (IO) days. If the resolution thus obtained is unsatisfactory to the aggrievc
party, a letter outlining the dispute shall be forwarded to the City Council for their resolutic
through the Office of the City Manager. The City Council may then opt to consider the direct1
solution to the problem. In such cases, the action of the City Council shall be binding upon t
parties involved, although ,nothing in this procedure shall prohibit the parties seeking remed
available to them at law.
13. CLAIMS AND LAWSUITS
The Contractor agrees that any contract claim submitted to the City must be asserted
part of the contract process as set forth in this agreement and not in anticipation of litigation c
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in conjunction with litigation. The Contractor acknowledges that if a false claim is submitted tl
the City, it may be considered fraud and the Contractor may be subject to criminal prosecutior
The Contractor acknowledges that California Government Code sections 12650 et sea., th
False Claims Act, provides for civil penalties where a person knowingly submits a false claim t
a public entity. These provisions include false claims made with deliberate ignorance of th
false information or in reckless disregard of the truth or falsity of information. If the City (
Carlsbad seeks to recover penalties pursuant to the False Claims Act, it is entitled to recover ii
litigation costs, including attorney's fees. The Contractor acknowledges that the filing of a fats
claim may subject the Contractor to an administrative debarment proceeding wherein tt
Contractor may be prevented to act as a Contractor on any public work or improvement for
period of up to five years. The Contractor acknowledges debarment by another jurisdiction
grounds for the City of Carlsbad to disqualify the Contractor from the selection process. 4
(Initial)
The provisions of Carlsbad Municipal Code sections 3.32.025, 3.32.026, 3.32.027 ar
3.32.028 pertaining to false claims are incorporated herein by reference. knitial)
14. STATUS OF THE CONTRACTOR
The Contractor shall perform the services provided for herein in Contractor's own w
as an independent Contractor and in pursuit of Contractor's independent calling, and not as
employee of the City. Contractor shall be under control of the City only as to the result to
accomplished, but shall consult with the City as provided for in the request for proposal. T
persons used by the Contractor to provide services under this agreement shall not
considered employees of the City for any purposes whatsoever.
The Contractor is an independent Contractor of the City. The payment made to 1
Contractor pursuant to the contract shall be the full and complete compensation to which 1
Contractor is entitled. The City shall not make any federal or state tax withholdings on behalf
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the Contractor or hidher employees or subcontractors. The City shall not be required to pa
any workers' compensation insurance or unemployment contributions on behalf of th
Contractor or hidher employees or subcontractors. The Contractor agrees to indemnify th
City within 30 days for any tax, retirement contribution, social security, overtime paymen
unemployment payment or workers' compensation payment which the City may be required i
make on behalf of the Contractor or any employee or subcontractor of the Contractor for WOI
done under this agreement or such indemnification amount may be deducted by the City fro!
any balance owing to the Contractor.
The Contractor shall be aware of the requirements of the Immigration Reform ar
Control Act of 1986 and shall comply with those requirements, including, but not limited t
verifying the eligibility for employment of all agents, employees, subcontractors and Consultan
that are included in this agreement.
15. CONFORMITY TO LEGAL REQUIREMENTS
The Contractor shall cause all drawings and specifications to conform to all applicat
requirements of law: federal, state and local. Contractor shall provide all necessary supportil
documents, to be filed with any agencies whose approval is necessary.
The City will provide copies of the approved plans to any other agencies.
16. OWNERSHIP OF DOCUMENTS
All plans, studies, sketches, drawings, reports, and specifications as herein required 2
the property of the City, whether the work for which they are made be executed or not. In t
event this contract is terminated, all documents, plans, specifications, drawings, reports, a
studies shall be delivered forthwith to the City. Contractor shall have the right to make one
copy of the plans for his/her records.
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17. REPRODUCTION RIGHTS
The Contractor agrees that all copyrights which arise from creation of the work pursuar
to this contract shall be vested in City and hereby agrees to relinquish all claims to SUC
copyrights in favor of City.
18. HOLD HARMLESS AGREEMENT
Contractor agrees to indemnify and hold harmless the City of Carlsbad and its officer!
officials, employees and volunteers from and against all claims, damages, losses and expense
including attorneys fees arising out of the performance of the work described herein caused t
any willful misconduct, or negligent act, or omission of the contractor, any subcontracta
anyone directly or indirectly employed by any of them or anyone for whose acts any of the
may be liable.
19. ASSIGNMENT OF CONTRACT
The Contractor shall not assign this contract or any part thereof or any monies dl
thereunder without the prior written consent of the City.
20. SUBCONTRACTING
If the Contractor shall subcontract any of the work to be performed under this contrz
by the Contractor, Contractor shall be fully responsible to the City for the acts and omissions
Contractor's subcontractor and of the persons either directly or indirectly employed by t
subcontractor, as Contractor is for the acts and omissions of persons directly employed by
Contractor. Nothing contained in this contract shall create any contractual relationship
between any subcontractor of Contractor and the City. The Contractor shall bind evl
subcontractor and every Subcontractor of a subcontractor by the terms of this contr
applicable to Contractor's work unless specifically noted to the contrary in the subcontraci
question approved in writing by the City.
rev. 10122.
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21. PROHIBITED INTEREST
No official of the City who is authorized in such capacity on behalf of the City t'
negotiate, make, accept, or approve, or take part in negotiating, making, accepting, c
approving of this agreement, shall become directly or indirectly interested personally in thi
contract or in any part thereof. No officer or employee of the City who is authorized in SUC
capacity and on behalf of the City to exercise any executive, supervisory, or similar functions i
connection with the performance of this contract shall become directly or indirectly interest€
personally in this contract or any part thereof.
22. VERBAL AGREEMENT OR CONVERSATION
No verbal agreement or conversation with any officer, agent, or employee of the Cit
either before, during or after the execution of this contract, shall affect or modify any of tt
terms or obligations herein contained nor entitle the Contractor to any additional payme
whatsoever under the terms of this contract.
23. SUCCESSORS OR ASSIGNS
Subject to the provisions of Paragraph 18, "Hold Harmless Agreement," all terrr
conditions, and provisions hereof shall inure to and shall bind each of the parties hereto, a1
each of their respective heirs, executors, administrators, successors, and assigns.
24. EFFECTIVE DATE
This agreement shall be effective on and from the day and year first written above.
25. CONFLICT OF INTEREST
The Contractor shall file a conflict of interest statement with the City Clerk in accordan
with the requirements of the City's conflict of interest code incorporating Fair Political Practic
Commission Regulation 18700 as it defines A consultant. The disclosure category shall
categories 1,2,3 and 4.
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26. INSURANCE
The Contractor shall obtain and maintain for the duration of the contract and any and i
amendments insurance against claims for injuries to persons or damage to property which mi
arise out of or in connection with performance of the work hereunder by the Contractor, t
agents, representatives, employees or subcontractors. Said insurance shall be obtained frc
an insurance carrier admitted and authorized to do business in the State of California. TI
insurance carrier is required to have a current Best's Key Rating of not less than "A-:v" a1
shall meet the City's policy for insurance as stated in Resolution No. 91-403.
A. Coveraaes and Limits.
Contractor shall maintain the types of coverages and minimum limits indicat
herein, unless a lower amount is approved by the City Attorney or City Manager:
1. Comprehensive General Liability Insurance. $1,000,000 combin
single-limit per occurrence for bodily injury, personal injury and property damage. If I
submitted policies contain aggregate limits, general aggregate limits shall apply separately
the work under this contract or the general aggregate shall be twice the required per occurren
limit.
2. Automobile Liability (if the use of an automobile is involved
Contractor's work for the City). $1,000,000 combined single-limit per accident for bodily injl
and property damage.
3. Workers' Compensation and Employer's Liability. Work(
Compensation limits as required by the Labor Code of the State of California and Employt
Liability limits of $1,000,000 per accident for bodily injury.
4. Professional Liability. Errors and omissions liability appropriate to
contractor's profession with limits of not less than $1,000,000 per claim. Coverage shall
maintained for a period of five years following the date of completion of the work.
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B. Additional Provisions.
Contractor shall ensure that the policies of insurance required under th:
agreement contain, or are endorsed to contain, the following provisions.
1. The City shall be named as an additional insured on all policies excludir
Workers' Compensation and Professional Liability.
2. The Contractor shall furnish certificates of insurance to the City befol
commencement of work.
3. The Contractor shall obtain occurrence coverage, excluding Profession
Liability which shall be written as claims-made coverage.
4. This insurance shall be in force during the life of the agreement and a1
extension thereof and shall not be canceled without 30 days prior written notice to the City se
by certified mail.
5. If the Contractor fails to maintain any of the insurance coverages requirt
herein, then the City will have the option to declare the Contractor in breach, or may purcha!
replacement insurance or pay the premiums that are due on existing policies in order that tl
required coverages may be maintained. The Contractor is responsible for any payments mal
by the City to obtain or maintain such insurance and the City may collect the same from t~
Contractor or deduct the amount paid from any sums due the Contractor under this agreemer;
rev. 10/22/
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27. RESPONSIBLE PARTIES
The name of the persons who are authorized to give written notices or to receive writte
notice on behalf of the City and on behalf of the Contractor in connection with the foregoing ar
as follows:
For City: Title Finance Director
Name Lisa Hildabrand
Address 1200 Carlsbad Village Drive
Carlsbad, CA 92008
For Contractor: Title Partner
Name Ken AI-Imam
Address 1100 Main Street, Suite C
Imine, CA 92614
ArchitecVLicense Number: 32377E.
ArchitecVLicense Number:
28. BUSINESS LICENSE
Contractor shall obtain and maintain a City of Carlsbad Business License for tl
duration of the contract.
29. ENTIRE AGREEMENT
This agreement, together with any other written document referred to or contemplah
herein, embody the entire agreement and understanding between the parties relating to tl
subject matter hereof. Neither this agreement nor any provision
hereof may be amended, modified, waived or discharged except by an instrument in
rev. 10/22/
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writing executed by the party against which enforcement of such amendment, waiver c
discharge is sought.
Executed by Contractor this 2 8 @ day of 9 19YL.
CONTRACTOR:
CONRAD L? ASSOCIATES. L. L. P.
By:
Ken AI-Imam. Partner
By: (sign here)
(print namehitle)
ATTEST:
-7 Lh k. RL Io. ku" -
ALETHA L. RALJTENKRANZ City Clerk
(Proper notarial acknowledgment of execution by Contractar must be attached.)
(President or vice-president and secretary or assistant secretary must sign for corporations.
only one officer signs, the corporation must attach a resolution certified by the secretary
assistant secretary under corporate seal empowering that officer to bind the corporation.)
APPROVED AS TO FORM:
RONALD R. BALL City Attorney
BY Depuiy City Attorney
rev. 101221
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State of California )
County of Orange 1
On May 28, 1998, before me, the undersigned, a notary public for the state, personally appearel Ken Al-Imam, personally known to me to be the person whose name is subscribed to the withi instrument.
YW- - Detb;~ - - Css;zd A" 7 I\ ,x* . 3Ll. Comm. #IC63088
NOTARY PL2LIC - CALIFOSNIA 5 0RI:GE CCL'NTY 0 Comm. €:(a Jcne 25.1993 f - """"/I
wk A&L 1
Debbie Conrad
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CONRAD CERTIFIED PUBLIC ACCOUN ~SSOCIATES, L.L.R 11 00 MAIN STREET
IRVINE, CALIFORh
A PARTNERSHIP INCLUDIYC PROFE~SIONALCORPORA~IONS (71 4)
February 20,1998
Lisa Hildabrand Finance Director
City of Carlsbad
1200 Carlsbad Village Drive Carlsbad, California 92008-1989
Dear Lisa:
Conrad & Associates, L.L.P. is pleased to respond to your request for proposal to servc independent auditors for the City of Carlsbad for the years ending June 30,1998,1999, and 2 with the option for renewal in years 2001 and 2002.
We are aware that while the City of Carlsbad has solicited numerous proposals, Conrac Associates, L.L.P. would be your best selection for the following reasons which are set fort1 greater detail of our proposal:
Conrad & Associates, L.L.P.’s audit team of Ken Al-Imam, Engagement Partner, Michael A. Harrison, Technical Review Partner, and Michelle Kepner, Senior Auditor have a proven track record in serving the City of Carlsbad. We are proud of the excellent service and audit personnel that our firm has provided to the City over the past five years.
0 As we have done in the past, we plan to provide continuity of staffing on the engagement from year to year. This continuity lends itself to understanding
complex areas of the audit while devoting further attention to new issues as they arise on the audit.
0 Conrad & Associates, L.L.P. is one of the largest local accounting Grms in Southern California that specializes in local government auditing. Our firm employs 42 individuals, including 38 professionals. During calendar year 1997, our professionals performed in excess of 56,000 hours of auditing and consulting services for our governmental and non-profit clients.
Our firm has an extremely high client retention percentage. We believe the primary reasons for this high satisfaction of our services is responsiveness to client needs, experienced staffing, timeliness of our services and reasonableness. of our fees.
0 We understand the scope of work to be performed and we can and will deliver the services desired by the City in the timeframes desired by the City.
0 In the Southern California area, we currently serve as independent auditors for 32
cities.
MEMBERS OF AICPA AND CALIFORNIA SOCIETV OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AME; .- -. INSTITUTE OF CERTIFIED PUN IC KCOLIMTANTS PRIVAT’ COMPAMIF5 PRPCTICF 5FCTION
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Lisa Hildabrand Finance Director City of Carlsbad February 20,1998
Page Two
Conrad & Associates, L.L.P. is a member of the American Institute of Certified Pu Accountants (AICPA) Private Companies Practice Section Peer Review. Our firm developed quality control standards and procedures which have been subjected AICPA standards of review. We believe it is important for you to know I Conrad & Associates, L.L.P. has received an unqualified opinion on the quality con‘
of our accounting and auditing practice for each of our peer reviews.
Our partners and managers regularly advise our local government clients in mah relating to “Taxation of Employee Fringe Benefits”.
We believe that our fee estimate and structure will assure the City of Carlsbad of most reasonable cost (based upon the experience of our audit team) to perform annual audit examination for the City and the related component units. Our offer fiscal years 1998-2000 is a firm offer.
Mr. Ken Al-Imam, Engagement Partner, and Mr. Michael A. Harrison, Tech Review Partner, are authorized to bind our firm in contractual matters with the CiQ Carlsbad. Messrs. Harrison and Al-Imam are also authorized to make representati for our firm.
0 Conrad & Associates, L.L.P. is licensed and in good standing with the California SI Board of Accountancy to practice as independent certified public accountsll
Additionally, Conrad & Associates, L.L.P, is independent with respect to the City
Carlsbad within the GAO standards and is an Equal Opportunity Employer. We
committed to providing outstanding service to the City and in meeting the reques time deadlines and we will maintain our audit working papers for a period of th years.
Our firm thanks the City of Carlsbad for the opportunity to present our proposal qualificati and for the opportunity to serve as your independent auditors. Our proposal remains a firm i irrevocable offer for 90 days. I look forward to you contacting me so that I may answer furl any questions which you may have. You may contact me at (714) 474-2020.
Very truly yours,
CONRAD & ASSOCIATES, L.L.P.
/4-
KA:dac Enclosure
Ken AI-Imam, C.P.A. Partner
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PROFILE OF THE PROPOSER
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Section
A
B
C
D
E
F
G
H
I
Amendix
A
B
C
D
PROPOSAL OF AUDIT SERVICES
TO THE
CITY OF CARLSBAD
TABLE OF CONTENTS
PROFILE OF THE PROPOSER
About Conrad & Associates, L.L.P.
PROPOSERS OUALIFICATIONS
Qualifications and Related Experience of the Personnel who will Service the City of Carlsbad
Our PAor Experience Auditing Cities, Redevelopment
Agencies, and other Local Governments
Assistance in the Implementation of New Accounting Pronouncements
References of Current Local Government Clients
Capabilities in General Consulting and Compliance Auditing
APPROACH, SCOPE AND TIMING
Approach, Timing and Work Program of Our Engagement Team
Our Firm's Understanding of the Objectives and Scope of the Engagement
AUDIT FEES
Our Hourly Rates and Maximum Fees to Perform this Engagement (removed and bound separately)
Resumes of Audit Engagement Team
Results of Most Recent Quality Control Review
Proposer Certification
Proposer Summary Sheet
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0 ATTACHMENT 1
PROPOSAL, OF AUDIT SERVICES
TO THE
CITY OF CARLSBAD
Submitted by: CONRAD & ASSOCIATES, L.L.P. 1100 Main Street, Suite C Imine, California 92614
February 20,1998
CONTACT PERSON - KEN AL-IMAM, PARTNER PHONE NO. (714) 474-2020 FAX NO. (714) 263-5520
CONRAD & ASSOCIATES, L.L.P. CALIFORNIA LICENSE NO. X3447
CONRAD & ASSOCIATES, L.L.P. FEDERAL IDENTIFICATION NO. 95-3389106
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SECTION A
ABOUT CONRAD l& ASSOCIATES, L.L.P.
Conrad & Associates, L.L.P. is located in Irvine, California and has a staff of forty-two (1 individuals, including thirty-eight (38) professionals. Four of the firm's six partners devote ml than 75% of their time in managing governmental audit and general consulting engageme related to governmental clients. Three of the firm's partners have extensive "Big 6" pul accounting experience in addition to extensive local firrn experience. One of our tax partners ; an advanced degree in taxation as well as being a C.P.A. This tax expertise adds an additio dimension for our local governmental clients in areas of taxation affecting local governme1 Since 1971, Conrad & Associates, L.L.P. has specialized in governmental and nonprc accounting and auditing. For the past 27 years, the firm has been performing accounting : audit services to the private and public sector and not-for-profit organizations.
A breakdown of our firm's personnel by level of experience is as follows:
Partners Managers/Supervisors Seniors Staff ClericaVBookkeepers
6 9
9 14 4 -
42 -
Conrad & Associates, L.L.P. and all assigned key personnel are licensed to practice in the SI of California and have complied with all applicable California Board of Accounta: requirements. The firm's employees have met all of the State's Continuing Educal requirements, and the firm is in compliance with CPA requirements of the Private Compar Practice Section of the AICPA.
A Quality Control Firm
For over 18 years, Conrad & Associates, L.L.P. has been one of the few local CPA firms wf has subjected its audit and accounting practice to the scrutiny of the peer review progl
administered by the Private Companies Practice Section of the American Institute of Certi: Public Accountants (AICPA). As a member of the Private Companies Practice Section of AICPA, our audit procedures and working papers are regularly examined by another CPA fin
the firm-on-firm peer review program. In addition, all aspects of the firm's quality con
practices have been reviewed, including the firms commitment to extensive training progra In every member firrn, each member of the professional staff must enroll in continu professional education courses. Each is required to take at least 120 hours of classes OVI three-year period. Courses cover a wide spectrum of professional and technical subjects, o prepared by the AICPA, to help the practitioner maintain his professional expertise. following policies and procedures are .evaluated during the peer review.
1. How a firm implements independence requirements
2. How personnel are assigned
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SECTION A, (Continued)
3. Provision for consultation when technical assistance is required
4, How field work is supervised
5. Hiring practices
6. Continuing Professional Education programs
7. Promotion of personnel
8. Decisions on obtaining and retaining clients
9. Internal inspection of the firm's work
This means that when the City of Carlsbad selects our firm to perform services for you, you I know that our firm has agreed to comply with the strict membership requirements of the sect to which we belong and has agreed to have our compliance with those requirements reviewed others. Thus, there is greater assurance that our personnel are adequately trained and up-to-c on professional developments relating to governmental as well as commercial auditi Accordingly, membership in this Division provides additional assurance that our firm \ comply with professional accounting and auditing standards. The Governmental Account Office (GAO), in their 1994 revisions to the "Yellow Book", Government Auditing Randal require CPA firms performing governmental audits to participate in quality control ''PC review. We are proud of the fact that Conrad & Associates, L.L.P. received unqualified opinion on the quality of its accounting and auditing practice for each of its qua control reviews. Conrad & Associates, L.L.P. has participated in voluntary peer review si 1979. A copy of those opinions, together with California Society of Certified Pu' Accountants Peer Review Program (CSCPA) approval of the results of the review, are inclu in Appendix B. We would like to indicate that during our most recent quality control rev several government audits, including single audits of cities and other governmental entities, P reviewed by the review team who found our work to substantially comply with all professic: standards. Additionally, our firm has had numerous federal and state desk reviews and f reviews of our audits done by the State Office of Criminal Justice Planning, the 1 Departments of Labor, Health and Human Services, Environmental Protection Agency and California State Controller's office. In all instances the federal or state agencies indicated t satisfaction with our work. Our firm has never had a record of substandard audit work.
As a local CPA firm, our office contains approximately 9,000 square feet of space for the
individuals in our firm. To accommodate our clients, we have an in-house IBM Data Proces! System network and numerous IBM compatible personal computers. We use Microsoft 1 for Windows 95 software for the production of reports and other written documents of highest quality. Our field audit staff teams are equipped with lap-top computers and our a staff are proficient in several software programs including Microsoft Word, Excel, Quatro and Word Perfect. Our staff are capable of readinghansferring data in that media with the Ci
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PROPOSER'S OUALIFICATIONS
e e
SECTION B
QUALIFICATIONS AND RELATED EXPERIENCE OF THE PERSONNEL WHO WILL SERVICE THE CITY OF CARLSBAD
The successful outcome of any audit requires personnel with the managerial and technical ski1 to perform the work required. The engagement team who will serve the City of Carlsbad ha. served together as a team of professionals on numerous financial audit examinations of loc government entities.
We believe that efficient administrative management and supervision of the audits is 1 extremely critical factor in achieving the desired results for the City Council of the City Carlsbad. In that regard, we propose to establish the following procedures.
Mr. Ken AI-Imam, Engagement Partner will be responsible for the coordination of the audit the City of Carlsbad and fulfillment of the requirements of the City Council of the City Carlsbad. Mr. Al-Imam, as the Engagement PartnerManager, will be in the field to plan a coordinate the management of the audit examination of the City of Carlsbad. He will wo closely with the Finance Director and be responsible to the City Council of the City of Carlsba He serves as a reviewer for the CSMFO award program for CAFRs and has been a speaker at number of CSMFO local chapters on matters pertaining to technical issues and new GAS pronouncements. Mr. AI-Imam is the current chairman of the Governmental Accounting a~ Auditing Committee for the Long Beach-Orange County Chapter of the California Society 1 CPA’s. He has made presentations in public hearings before the Governmental AccountiI Standards Board (GASB). Mr. Al-Imam is also responsible for the firm-wide training of auc personnel at Conrad & Associates, L.L.P. in the area of local governmental accounting a auditing.
Mr. Michael A. Harrison serves as a partner in the firm’s local government auditing practice. 1 has over 27 years of auditing experience including 23 years of providing services to speci districts, cities and redevelopment agencies. Mr. Harrison will serve as Technical Revie Partner. In this capacity, Mr. Harrison will act as a technical and consulting partner to Mr. A
Imam and the City’s Finance Director. As a second partner reviewer, he will perform quali
control reviews of audit reports issued by our firm. Mr. Harrison is a member of tl Governmental Accounting and Auditing Committee for the Long Beach - Orange Cow Chapter of the California Society of CPA’s. Mr. Harrison also serves as a reviewer for tl CSMFO award program for CAFR’s and has been a speaker on technical topics for both tl California Society of CPA’s and the California Society of Municipal Finance Officers.
Mrs. Michelle Kepner will serve as Senior Auditor of the audit of the City of Carlsbad. She w: work closely with Mr. Al-Imam, Ms. Lisa Hildabrand, Finance Director, Kevin Branca, Assista Finance Director and other Staff of the Finance Department. She will plan and conduct the auc work and supervise the Staff Accountants who will work with her. Mrs. Kepner has extensb
, local government auditing experience.
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SECTION C
OUR PRIOR EXPERIENCE AUDITING CITIES, REDEVELOPMENT AGENCIES, HOUSING AUTHORITIES. AND OTHER LOCAL GOVERNMENTS
Conrad & Associates, L,LE as a firm, under the direction of partners Mr, Ken Al-Imam and I Michael A. Harrison, are vastly experienced in the audits of local government units (all fu:
audit examinations of cities including single audits performed under OMB Circulars A-128 i A-133, financial and compliance audits of California Redevelopment Agencies, a1 examinations of public housing authorities, joint powers authorities and special distric Among the local government entities which Conrad & Associates, L.L.P. has served during past fiscal year are the following:
All Funds Examinations of California Cities
City of Brea (Approximate budget $130 million) During 1992, our firm was selected as audii among a wide field of competition for this Orange County City. The City has a very acl redevelopment agency. During fiscal year 1992, the Brea Financing Authority issued ne; $200,000,000 in tax allocation and lease revenue bonds and defeased four previous issues of Redevelopment Agency. The Agency has numerous owner participation and develc disposition agreements with significance to the annual audit. The city has a regional shopF mall and receives various sources of grant finding subject to the single audit. The City
received the CSMFO Certificate of Achievement for Excellence in Financial Reporting in 1 and previous years and has submitted its CAFR for the year ended June 30, 1997 for reviem the Government Finance Officers Association and the California Society of Municipal Fina Officers.
City of Palm SDrinm (Approximate budget $85 million) Conrad & Associates, L.L.P. served as auditors for this Coachella Valley City since 1986. The Palm Springs Redevelopn Agency, which is part of the reporting entity of the City, has ten project areas. The City oper the Palm Springs Regional Airport and receives various federal funding, including FAA gr; subject to the single audit under OMB Circular A-133. Other enterprise funds of the City incl the Wastewater and Golf Course activities. The City has received the CSMFO Award Outstanding Financial Reporting and the GFOA Certificate of Achievement for Excellencl Financial Reporting for its 1989-1996 CAFR's, and has submitted its 1997 CAFR under eacl those award programs.
Citv of Nonvalk (Approximate budget $56 million) Conrad & Associates, L.L.P. has perfon the audit of this Los Angeles County city from 1986 through 1997. We have performed a si]
Norwalk Financing Authority and Norwalk Redevelopment Agency. The City receives g funding from the U. S. Department of Housing Development for the Section 8 Hou
assistance program as well as CDBG and other federal funding. The City also operates a 2
. fbnded child care program and a Senior Citizens action program. For each of'the years 1 through 1996, the City has received the CSMFO Award for Outstanding Financial Reporting the GFOA Certificate of Achievement for Excellence in Financial Reporting. The City submitted its 1997 CAFR under each of the foregoing programs.
audit in accordance with OMB Circular A-133 for each of those years. Our audits include
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SECTION C, (Continued)
Citv of Costa Mesa (Approximate budget of $95 million) Conrad & Associates, L.L.P. v selected to serve as independent auditors in fiscal 1991. Included in the audit are the operatic of the Costa Mesa Financing Authority, the Costa Mesa Redevelopment Agency and the Co Mesa Sanitary District. The City also operates a municipal golf course and receives varic suurces of Federai funding subject to single audit under OMB Circular A-133. The City 1
received the CSMFO Award for Outstanding Reporting and the GFOA Certificate Achievement for Excellence in Financial Reporting for its 1996 CAFR and has submitted 1997 CAFR under each of the foregoing programs.
Citv of Azusa (Approximate budget of $41 million) Conrad & Associates, L.L.P. has conduc the audit examinations of the City of Azusa and Azusa Redevelopment Agency since 1987. : City operates several enterprise activities including water, sewer and an electric utility. y Agency has entered into several developer disposition agreements which include rebates of st taxes. The City has received the GFOA Certificate of Achievement for Excellence in Financ Reporting for its CAFR for 1995 and 1996.
Citv of Buena Park (Approximate budget of $59 million) During 1982, our professior assisted the City in implementing NCGA Statement #3 to incorporate changes in the "Report Entity". Additionally, in connection with a fixed asset appraisal performed by an out5 appraisal firm, we successhlly completed audit procedures and assisted the City in recording those assets on their books. With the appraisal and audit work, the City was able to rem1 previous accountants' report qualifications relating to the incompleteness of fixed asset recol Conrad & Associates, L.L.P. fiuther assisted the City finance department in upgrading its am financial report which has been submitted under both the CSMFO Award Programs and Government Financial Officers Association (GFOA) Certificate of Achievement Program. fiscal years 1983 through 1992, the City has been awarded the GFOA Certificate of Achieverr and the CSMFO's Outstanding Award for fiscal 1983-92.
Citv of San Gabriel (Approximate budget $1 1 million) Conrad & Associates, L.L.P. conduc the audit examination of this Los Angeles County City for fiscal 1988 through 1997. A sir audit in accordance with OMB Circular A-1 33 was also conducted for each year. The 1' through 1996 CAFR received the CSMFO Outstanding Award and GFOA's Certificate
Achievement for Excellence in Financial Reporting, The 1997 CAFR has again been submi.
for review under the CSMFO and GFOA Award Programs.
City of La Verne (Approximate budget $20 million) Conrad & Associates, L.L.P. conducted audit examination of this City for fiscal 1988 through 1997. The City and Agency have sev owner participation agreements, multiple issues of long-term debt outstanding, and operates 1 a water and sewer utility. A single audit in accordance with OMB Circular A-133 was i conducted for each year. The City received the CSMFO Award for outstanding finan reporting for each of the past eight fiscal years.
City of Gilrov (Approximate budget $35 million) Conrad & Associates, L.L.P. has conduc the audit examination of this Santa Clara County City for fiscal 1989 through 1997. Du fiscal 1992 we assisted the City in a conversion to full governmental GAAP for all its fu During 1989 we also conducted a management audit of the City's waste disposal contractor, single audits in accordance with OMB Circular A-133 for 1989 through 1997.
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SECTION C, (Continued)
Town of Apple Valley (Approximate budget $12 million) Conrad & Associates, L.L.P. w selected to serve as independent auditors for this relatively new City in San Bernardino Cour during I99 1. The City has a Water District and several special assessment districts. Our staff
also providing technical support and assistance in various areas to the City staff. The City k received the CSMFO Award for outstanding reporting and the GFOA Award for excellence financial reporting for its CAFRs during 1994-1 996. The 1997 CAFR was submitted under bc award programs.
City of Highland (Approximate budget $6 million) Conrad & Associates, L.L.P. current serves as the auditors of this San Bernardino County City. We completed the examination oft
City for the years ended June 30,1989 through June 30,1997, During 1990 we assisted the Ci
Redevelopment Agency. The City has received the GFOA and CSMFO awards for its CAE during each of the past eight years.
City of Hemet (Approximate budget $20 million) Conrad & Associates, L.L.P. was select during 1989 to serve as auditors of this Riverside County City. We have completed our audit the City, Redevelopment Agency and the single audit in accordance with OMB Circular A-1
for the years ended June 30, 1989 through 1997. The City has several internal service fu activities and operates refuse and water utility enterprise funds.
City of Hawaiian Gardens (Approximate budget $9 million) Conrad & Associates, L.L.P. u selected in late 1990 to serve as auditors of this Los Angeles County City. Our firm complet. the 1989 through 1996 audit examinations of the City, Redevelopment Agency and Pub1 Financing Authority. We also conducted single audits in accordance with OMB Circular A-13 We have provided technical assistance to the City and Redevelopment Agency in accountil matters, and performed special reviews at the Agency's request of the validity of tl
Redevelopment Agency's tax increment increase from 1988 to 1989. The Redevelopme Agency has engaged in several debt issues, including those involving the advance refunding a~
defeasance of debt.
City of Rancho Mirage (Approximate budget $1 8 million) Conrad & Associates profession2 under Mr. Harrison's direction, performed the examination of this desert City from 1982 throu; 1988. The City receives significant hotel-motel bed taxes and has numerous special assessme districts subjected to audit. Our firm was again selected in 1992 to perform the aut examinations of the City, Agency, Financing Authority and single audit. The City has receiv award recognition under the CSMFO and GFOA Award programs for excellence in Financ reporting for its CAFR.
City of La Ouinta (Approximate budget $30 million) Conrad & Associates, L.L.P. was selectc in 1992 to serve as auditors of this Coachella Valley City. Included within the audit are the 1 Quinta Redevelopment Agency and La Quinta Financing Authority. The City has receiv recognition under the CSMFO award program for its CAFR.
City of Indio (Approximate budget $25 million) Conrad & Associates, L.L.P. was selected 1993 to serve as independent auditors for this Coachella Valley City. Our firm has also assist the City in technical issues relating to the Redevelopment Agency, pass-through agreements a
in developing accounting policies and establishing fund stiucture for a newly form
the Indio Financing Authority.
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SECTION C, (Continued)
City of Carlsbad (Approximate budget $80 million) Conrad & Associates, L.L.P. was selec; in 1993 to serve as auditors for this San Diego County City. The scope of the audit includes .
Carlsbad Housing Authority, Carlsbad Redevelopment Agency and the Encina Joint Pow Financing Authority. Conrad & Associates, L.L.P. previously served as auditors from 1981. for the City.
City of Whittier (Approximate budget $60 million) We were selected in 1994 to perform
Authority. The City's enterprise activities include sewer, water and solid waste. We assisted City in addressing issues relating to its landfill closure and post-closure cost. The City 1
received the CSMFO and GFOA awards for excellence in financial reporting for its CAFR,
Citv of Temple Citv (Approximate budget $12 million) Conrad & Associates, L.L.P. is un' contract through 1998 to perform the audit of the City, Redevelopment Agency, Financ Authority and Single Audit under OMB Circular A-133. We also have provided other techni assistance in the preparation of State Controllers Reports, Employee Benefit Plan tax returns : other budgetary assistance. The City has received the CSMFO and GFOA awards for excellel in financial reporting for its CAFR.
City of Bell (Approximate budget $12 million) We were selected in 1994 to perform the audil this Los Angeles County City, the Bell Redevelopment Agency and Surplus Property Author We also perform a single audit under OMB Circular A-133. The City has received the CSM award for excellence in financial reporting.
City of Pomona (Approximate budget $1 12 million) We were selected to perform the 1995 annual audits of this Los Angeles County City. We have performed audits of the City, Agen Housing Authority, Financing Authority and Single Audit. The City received the GFOA aw for its 1995 and 1996 CAFR's. This City is in an urban setting with extensive grant fund under Housing Assistance, Housing Rehabilitation and Preservation, Home Investrn Partnership Act, CDBG, Shelter Care and Emergency Shelter Grants.
Citv of Hesperia (Approximate budget $30 million) We were selected in 1995 to perform audit of the Hesperia Water District, City of Hesperia, Hesperia Fire Protection District , Hesperia Redevelopment Agency. We have also assisted the Fire Protection District in spel internal control related issues.
Citv of Diamond Bar (Approximate budget $1 0 million) We were selected in 1995 to perf( the audit of this Los Angeles County city. We have also performed special cable televi: audits for the City during 1995. The City has received the CSMFO and GFOA awards excellence in financial reporting.
Citv of Escondido (Approximate budget $100 million) During 1983 through 1s Conrad & Associates performed the audit examination of this northern San Diego County C
The City operates numerous proprietary activities, including Water and Sewer. The (
receives various grant funding sources, including Community Development Block Grant FUI Single audits were performed for fiscal 1985, 1986, 1987 and 1988 under OMB Circular A-: In 1995 the City again selected our firm to serve as auditors. The City receives both the CSb and GFOA awards for its CAFR.
audit of this Los Angeles County City, its Redevelopment Agency and Public Financ,
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SECTION C. (Continued)
City of Orange (Approximate budget $120 million) This active full service City provid police, fire, water, refuse, and sanitation services. The City and Redevelopment Agency 2 involved in a number of financial transactions with recorded debt of the City and Agen
CAFR.
CiW of Villa Park (Approximate budget $1 million) We were selected in 1997 to perform t audit of this Orange County City. We also assist the City in preparing reports including the St; Controllers and Street Reports.
Citv of San Clemente (Approximate budget $53 million) We were selected in 1996 to perfo: the audit of the City and Redevelopment Agency. We also perform a single audit of gr: programs and a financial audit of a joint powers authority for animal control. The City receiv award recognition for its 1996 CAFR under the CSMFO and GFOA award programs and ag: has submitted its 1997 CAFR for award recognition.
Citv of South Gate (Approximate budget $60 million) We were selected in 1997 to perform 1 audit of this Los Angeles County City. We previously served as auditors from 1983-1987. TI City has significant grant activity including Section 8 Housing Programs. We performed aud of the City, Redevelopment Agency and Public Financing Authority. The City submitted
CAFR under the CSMFO and GFOA Award Programs in 1997.
Citv of La Puente (Approximate budget $8 million) We were selected during 1997 to serve t: Los Angeles County City. We performed audits of the City and Redevelopment Agency.
Citv of Laguna Niguel (Approximate budget $18 million) We were selected in 1996 to serve independent auditors of this Orange County City. We performed audits of the City 2 Community Services Districts for fiscal years ended June 30,1996 and 1997.
Citv of Indian Wells (Approximate budget $33 million) We were selected in 1997 to serve independent auditors of this Coachella Valley City. We have audited the Redevelopml Agency and performed agreed upon auditing procedures at the City's Golf Course operator 2 hoteYmotel operators.
City of Mission Vieio (Approximate budget $42 million) We were selected in 1997 as audi of this Orange County City. We perform the audit of the City and Redevelopment Agency. 1 City also submits its CAFR under the CSMFO and GFOA award programs.
approximating $100 million. The City receives the GFOA and the CSMFO awards for
Clients Receiving: GFOAICSMFO Award for Financial Reborting
Conrad & Associates, L.L.P. has a proven track record in assisting cities in the upgrading of ti .financial reporting. A number of our clients have received the "Certificate of Achievement Excellence in Financial Reporting" issued, by the Government Finance Officers Associat (GFOA) and the "Certificate of Award for Outstanding Financial Reporting" issued by California Society of Municipal Finance Officers (CSMFO). In addition, both Mr. Harrison i Mr. Al-Imam serve as technical reviewers in the CSMFO award program. The following ci received financial reporting awards during the period of time that we served as their auditors:
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SECTION C. (Continued)
Clients Receiving GFONCSMFO Award for Financial Reporting, (Continued;!
Town of Apple Valley City of Bell City of Carlsbad City of Buena Park City of Nonvalk City of Palm Springs City of San Gabriel City of Hemet City of Highland City of La Verne City of Costa Mesa City of Brea City of Azusa
City of Diamond Bar City of La Quinta City of Escondido City of Whittier City of Pomona City of Temple City City of San Clemente City of Orange City of South Gate City of Indian Wells City of Mission Viejo
City of Rancho Mirage
GFOA Award
X
X X X X X X X
X X X
X
X X X
X X X
CSMFO Award
X X X X X X X
X X X X
X X X X X
X X X
X X
Experience with Redevelopment Agencies
Conrad & Associates, L.L.P. currently or has previously performed financia1 and complianc audits of the following redevelopment agencies:
Indio Redevelopment Agency Brea Redevelopment Agency Santa Ana Redevelopment Agency Buena Park Redevelopment Agency Rancho Mirage Redevelopment Agency Stanton Redevelopment Agency Rialto Redevelopment Agency San Marcos Redevelopment Agency Azusa Redevelopment Agency Vista Redevelopment Agency South Gate Redevelopment Agency Downey Redevelopment Agency Temple City Redevelopment Agency
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SECTION C, (Continued)
ExDerience with RedeveloDment Agencies, (Continued)
San Jacinto Redevelopment Agency Westminster Redevelopment Agency Nonvalk Redevelopment Agency Palm Springs Redevelopment Agency Carlsbad Redevelopment Agency Cathedral City Redevelopment Agency
Desert Hot Springs Redevelopment Agency Escondido Redevelopment Agency
La Verne Redevelopment Agency Gilroy Redevelopment Agency Hemet Redevelopment Agency Highland Redevelopment Agency Costa Mesa Redevelopment Agency Delano Redevelopment Agency La Quinta Redevelopment Agency Whittier Redevelopment Agency Bell Redevelopment Agency Pomona Redevelopment Agency Hesperia Redevelopment Agency Orange Redevelopment Agency San Clemente Redevelopment Agency La Puente Redevelopment Agency
Banning Redevelopment Agency
Our experience with redevelopment agencies is extensive and includes the following:
0 Assistance in the accounting for developer disposition agreements (DDA's) and OW
0 Computations of obligations under pass-through agreements
0 Assistance in the use of tax-sharing agreements as an economic incentive
0 Consultations regarding the financial benefit to the City resulting from redevelopml
0 Tax increment financing of projects
Consultations regarding low-moderate income housing requirements
0 The establishment, merging, and adding of project areas
0 The use of rehab loans in redevelopment agencies
0 Assistance in issuance (and rehdings) of Tax Allocation Bonds
participation agreements
activities
0 The establishment of redevelopment fund structure
0 Use of City loans and advances
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SECTION C, (Continued)
Experience in Auditing Public Housing Authorities and Proprams
Name of Housing Authority Type of Audit Dates
Pomona Housing Authority A- 128 Single Audit 6/95-6/9C
Hawaiian Gardens Housing Authority A- 128 Single Audit 6/94-6/9(
Nonvalk Housing Authority A-128 Single Audit 6/86-6/9t
Carlsbad Housing Authority A-128 Single Audit . 6/93-6/9(
County of Riverside Housing Authority PHA Financial and Compliance Audit 6/82-6/8:
Baldwin Park Housing Authority PHA Financial and Compliance Audit 6/83
Santa Ana Housing Authority A- 102/A- 128 Single Audits 6/83-6188
South Gate Housing Authority PHA Financial and Compliance Audit 618 1-6/81
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SECTION D
ASSISTANCE IN THE IMPLEMENTATION OF NEW ACCOUNTING
PRONOUNCEMENTS
As a part of our service to the City, we will provide the following assistance with respecl certain significant new accounting pronouncements expected to impact the City of Carlsbac the next few years:
GASB NO. 3 I-FAIR VALUE REPORTING FOR INVESTMENTS
In March 1997, the GASB issued GASB Statement No. 31 entitled Accounting and Financ Reporting for Certain Investments and for External Investment Pools. This statement, wk requires fair value reporting for virtually all local government investments, is effective for yc ending June 30, 1998. As a result of this statement, investments reported on the balance shee local government financial statements will be carried at their fair value, not at their cost as been done in the past. .The mark-up or mark-down of investments to fair value each year wil: ran through the income statement and reported along with interest income in a line item ca~ investment income. A prior period adjustment will be recorded for the difference between c and fair value as of July 1, 1997, if material. Essentially all investments will be required to presented at fair value, instead of cost. Cost reporting will be generally permitted for negotia money market instruments that were purchased by the government within one year of t€ maturity (as long as the credit rating of the issuer has not significantly impacted their ma value). Non-negotiable certificates of deposit and non-negotiable investment contracts will a generally be reported at cost (regardless of their maturity), as long as the fair value of instruments has not been significantly affected by an impaired credit rating of the issuer.
Our firm will assist the City in the implementation of GASB No. 3 1. Should the City wisl make the fair value adjustments on either a monthly, quarterly, or annual basis, we will assist City by providing examples of spreadsheets that can be used to make these computations. will advise the City on which funds have sufficiently material cash balances to justify allocation of the fair value adjustment.
If the City wishes to only make the adjustment at year end for financial reporting purposes or we will assist the City in the establishment of a separate contra account in the general ledge1
the City in order to isolate the impact of the GASB 3 1 adjustments. A reserve of fund bah will also be established for any unrealized gains in order to segregate such amounts fr available fund balance.
IMPLEMENTATION OF NEW FINANCIAL REPORTING MODEL
In January 1997, the GASB issued an exposure draft on a proposed new financial report model. If approved final, these proposed changes will become effective for the year ended JI 30, 2001. The new model will add a new summary level of reporting in addition to combined and combining levels of reporting currently in use. The balance sheet (“statement net assets”) at the new summary level of reporting (called the entity-wide perspective) will most cases have just three columns (governmental activities, business-type activities, and a tc column). The income statement (“statement of activities”) will be formatted in a unique w
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SECTION D, (Continued)
starting with program expenses, backing out program revenues, and then adding in gene revenues.
Summary Financial Data will Use a Different Basis of Accounting Than at the Fund Level
At the entity-wide level, the full accrual basis of accounting will be used. However, 1 combined, combining, and fund levels of reporting will continue to be presented on the modifi accrual basis of accounting for governmental funds. This will make it difficult to track numb( from the combined level of reporting to the entity-wide perspective.
Changes in Reporting Fixed Assets
A major change will be required for reporting general fixed assets in that GASB will requ infrastructure assets (streets, etc.) to be included. If it is impractical to fully compile estimai original cost data on all infrastructure assets, GASB will permit a minimum reporting of just 1 major infrastructure assets acquired or improved in the past 25 years. We will recommend tl our local governmental clients hire an appraisal firm to inventory these assets. The original c( of these assets can be calculated by these firms using “trending back” or other discounti techniques to estimate construction costs when the assets or improvements were acquired.
Impact on the Books of Local Government
The modified accrual basis of accounting will still be required at the individual fund, combinil and the combined levels of reporting in the new financial reporting model. Most of the chanl resulting from this new model will be dealt with in the preparation of the year end financ
statements. Therefore, we will be recommending that our local government clients continue maintain their fund accounting system as they have in the past. We will recommend that the C engage its auditors to make the necessary modifications in the City’s financial data in order produce the required entity wide perspective of reporting, which will required the full accr basis of accounting. We expect that considerable time will be expended to change the combir data from the modified accrual basis of accounting to the full accrual basis of accounting. estimate of the hours required to make these modifications and the related cost will be provic to the City at that time.
REVENUE RECOGNITION FOR NONEXCHANGE TRANSACTIONS
In March 1997, the GASB issued an exposure draft redefining the rules of revenue recognit
, for nonexchange transactions, taxes and other significant local government revenue sources t do not involve the providing of goods or services as consideration for the monies received. 1 proposed new accounting standard classifies nonexchange transactions into four categories:
Derived tux revenues-taxes derived from (or imposed on) exchange transactions 1 take place between private parties.
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SECTION D, (Conthed\
Generally these are recognized in the period in which the underzying exchan transaction between the private parties occurs.
An example would be the tax on sales transactions that take place betwel merchants and their customers.
Imposed nonexchange fransactions-imposition is not based upon exchange transactio between private parties.
Generally these are recognized as revenue when an enforceable legal claim to t asset arises unless the revenue is required to be used a specific period. In tl case, revenue is recognized over the period for which the tax is levied.
0 *An example would be property taxes whose imposition is based upon propel ownership (which is not an exchange transaction).
Government-mandated nonexchange transactions-resources received from anoth government to finance a mandate imposed upon the recipient government by tl providing government.
0 Generally not recognized until all eligibility requirements have been met.
Voluntary nonexchange fransactions-donations and most voluntary grants.
Generally not recognized until all eligibility requirements have been met.
This proposed new accounting standard is effective for fiscal years ending June 30, 2001. 1 will assist the City in the interpretation of this standard as it applies to the major revenue sour of the City. We will provide practical advice to help the City make the necessary measuremen and accounting distinctions.
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SECTION E
REFERENCES OF LOCAL GOVERNMENT CLIENTS
For your convenience, we have listed below references with regard to audit work currently bt performed by Conrad & Associates, L.L.P. for several local governments in Southern Califor Mr. Al-Imam or Mr. Harrison currently serve as partners on these engagements.
Name of Citv/Contact Person Partner Approximate Ho
1. City of Brea and related entities Larry D. Hurst, Financial Services Director (7 14) 990-7675 Harrison 950
2. City of La Quinta and related entities John Falconer, Director of Finance (760) 777-71 50 Al-Imam 600
9 3. City of San Clemente and related entities Paul Gudgierson, Finance Director (714) 361-8341 Harrison 750
4. City of Indio and related entities David Culver, Director of Finance (760) 342-6560 Harrison 750
5. City of Mission Viejo and related entities Irwin Bornstein, Director of Finance (714) 470-3059 Harrison 650
6. City of Hemet and related entities Steve Temple, Finance Director (909) 765-2330 AI-Imam 650
7. City of Escondido and related entities
Phyllis Laderman, Director of Finance
(760) 74 1-4676 Al-Imam 800
8. City of Nonvalk and related entities James Weber, Director of Finance (562) 929-5749 Harrison 850
9. City of Costa Mesa and related entities Marc Davis, Acting Finance DirectodTreasurer (714) 754-5243 Al-Imam 1,000
10. City of Palm Springs and related entities Thomas M. Kanarr, Finance DirectodTreasurer (760) 323-8229 Harrison 1,000
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SECTION F
CAPABILITIES IN GENERAL CONSULTING AND COMPLIANCE AUDITING
In addition to our annual auditing services, we have assisted our clients by performing varic management advisory and other accounting services, including:
8 Special hotel-motel bed tax audits
Other gross receipts audits (cable television franchise fees, excavation tax, etc.)
Contractual agreement compliance audits
0
0
0
0
0
0
0
0
0
0
0
0
0
Review of central purchasing systems
Review,of warehouse controls and inventory systems
Investment Portfolio reviews and policy on derivative use
Review of operations in City Treasurers' Office
Reviews of water billing systems
Reviews of cash controls in parks and recreation departments
Review of investment policies and modifications thereto
Special EDP reviews
Review of permitting process within city building departments
Analysis of investment yields
Special fraud audits
Assistance in presentations to city councils
Assistance in setting up special accounting systems for redevelopment agencies
Assistance to Bond undermiters in providing "comfort letters" on debt issues municipalities
Consultations regarding the maximizing of tax increment revenue for redevelopmt agencies
Organizational review of finance departments
Tax advice regarding deferred compensation, employee benefits, use of city vehicles, et
Review of financial forecasts
16
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SECTION F. (Continued)
0 Assistance in cash reconciliation problems
0 Determination of the cost of excess sewer capacity for a developerkity contract arrangement
Assistance in the selection of qualified finance personnel for employment by the City
0 Assistance in computation of Proposition 1 11 Gann Limitations
0 Management reviews of finance and City Treasurer's office
0 Assistance in establishing accounting for development projects and fees to comply t~, AB 1600
Special Reviews of the Validity of Changes in Tax Increment Revenue from year to y within Redevelopment Agencies
Assistance in Section 8 Housing program portability issues
0 Assistance in the acquisition of private water companies and the accounting issues rela thereto
17
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APPROACH, SCOPE AND TIMING
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SECTION G
APPROACH. TIMING AND WORK PROGRAM OF OUR ENGAGEMENT TEAM
The audit approach of Conrad & Associates, L.L.P. is unique with regard to the following:
0 Our firm is sensitive to the priorities and work requirements of our clients. We w( around the schedules of our clients when scheduling segments of the audit requesting documentation in order to minimize disruption in the Finance Departme]
Whenever possible, we use accounting support already prepared by the Fim Department in order to avoid duplication or unnecessary requests for audit support schedules.
0 Because of our firm's expertise in local governmental auditing, our staff are trair: and familiar with local government accounting. You will spend no time in trainj our personnel.
When formulating internal control recommendations, we obtain a thorou understanding of the specific circumstances at your City in order to provide a tailor! practical recommendation.
Throughout the year we are a resource to our clients in providing accounting advi researching technical questions, dealing with tax problems, and helping with otl problems as they arise.
In May, 1997, following our appointment as auditors of the City, Mr. Al-Imam, Engagem Partner and Mrs. Kepner will meet with Ms. Hildabrand, Finance Director, and Kevin Brant Assistant Finance Director for the purpose of planning the audit of the City. In addition
will be accomplished: establishing an effective and efficient communication link with City personnel, the followi
- Dates for audit field work of the various audit examinations will be finalized.
- Arrangements will be made with City personnel for the typing of confirmation requests.
- Analytical procedures will be utilized in planning the audit which will focus on:
a) Enhancing our understanding of the City of Carlsbad and the transactions a events that have occurred since your last audit date and;
b) Identifying areas that may represent specific risks relevant to the aut (assessment of control risk).
- Critical audit areas will be identified and the universe of transactions will be identified I purposes of statistical sampling of transactions and other audit tests in conjunction wj
determining whether reliance can be placed upon the system of internal accounti:
controls has been in the: controls. Typically the major cycles which our firm has placed reliance on inten
IS
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SECTION G. (Continued)
Purchasing/Receiving/Accounts Payable and Cash Disbursements Cycle of the Cit
e Payroll Cycle.
- We will also be reviewing internal control structure within the revenuehash receipts cyc property and equipment and treasury management cycles.
- We will identify areas of potential concern of the City Council, City Manager and Finance Director.
- Based upon our planning procedures we will develop levels of materiality for audit test and develop and tailor our audit program of the City.
Following the engagement planning meetings, Mr. Al-Imam and Mrs. Kepner will coordin with Mr. Branca, those items which would be required by our staff in meeting the tim. requirements of the various audits.
In conjunction with our planning of the engagement, we will perform our interim audit wc We will have evaluated the critical audit areas and assessed control risk (as mentioned ab01 Our review of internal control structure will be by questionnaire, and procedural write-up of yt accounting system. Each of the approaches requires inquiry and observation of City persom
Comments and recommendations relating to the accounting system will be discussed v
appropriate City personnel and where appropriate be included in our management letter wh will be issued at the conclusion of the examination.
Additional procedures that will be accomplished during our interim audit procedures include following:
1. Reviewing of internal control structure (including controls surrounding the E environment) and communication of recommendations to City Managerr concerning City policies and procedures.
2. Testing of audit areas where reliance can be placed upon internal control structure audit purposes; i.e., payroll and purchasing/accounts payable/receiving/c; disbursements.
3. Reviewing of minutes of the City Council of the City and related entities.
4. Reviewing of conflict of interest (related party) statements.
5. Following up on unusual items noted from analytical procedures. (We will perfc significant comparison and inquiry regarding fluctuations of revenues and expendih by fund budgets versus actual and actual for the previous year).
6. Reviewing of important contracts, new debt issues, leases and joint power agreemen
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SECTION G, (Continued)
7. Performing required compliance and internal control testing relating to the fede grant programs of the City.
8. Reviewing the City’s calculation of its appropriations limit (Gam limit) in accordm with Article XI11 B of the State Constitution.
9. Testing for compliance with City budgetary policies and procedures, including testi the integrity of the budgetary data reflected in the City’s accounting system.
10. Providing the City with suggestions regarding the close of City books after year el Our assistance and communication in the closing of the City books is expected minimize the number of audit adjustments required after the close of City books.
As a part of our Single Audit for the years in which the City expends greater than $300,000 federal funding, we would supplement our approach with the following procedures in perform:
the single audit. (This would be accomplished as a part of our planning and interim audit worl
1. Re-review all pertinent federal and AICPA publications including:
The Single Audit Act Amendments of 1996 (Public Law 104-156) signed into I on July 5, 1996 and effective for the fiscal year ending June 30, 1997. This 1 supersedes the SingZe Audit Act of 1984 (Public Law 98-502) previou applicable to local governments
OMB Circular A-1 33 entitled Audits of States, Local Governments, and Nc ProJit Organizations
GAO Government Auditing Standards (Yellow Book), 1994 revision
AICPA Audit and Accounting Guide Audits of State and LocaE Government UT (1 994 revision)
SAS No. 74 Compliance Auditing Considerations in Audits of Governmer
Entities and Other Recipients of Federal Financial Assistance
Revised Compliance Supplement for Single Audits of State and Lo Governments
Catalog of Domestic Assistance Programs
OMB Circular A-87
OMB Circular A-102
2. Identify the federal programs administered by the City of Carlsbad and the amou expended during the audit period.
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SECTION G. (Continued)
..
3. Apply the risk-based auditing approach mandated by the Single Audit Act Amendme!
of 1996 (Public Law 104-1 56) and OMB Circular A-133 entitled Audits of Stat( Local Governments, and Non-Profits Organizations for the determination of maj programs to be selected under the single audit process. As prescribed by the directit of the new single audit requirements, this will involve a consideration of t complexity of the program, prior audit findings, changes in personnel, the competen of personnel, the extent to which sub-recipients are used, the extent of overview a monitoring by granting agencies, the extent of recent changes in program requiremen
the newness of the program, the size of the program, and the inherent risk of t program,
4. Identify the oversight audit agency.
5. Identi@ and list the major compliance supplements and subrecipients of the City, any.
6. Review the administrative control systems to ensure compliance.
7. Execute the sampling plan.
8. Perform audit procedures for the selected transactions.
9. Test compliance with other material compliance requirements.
10. Test matching requirements, if any.
1 1. Test indirect costs, if any.
12. Review reports and claims for advances and reimbursements to the fed€ government.
13. Review processing of audit reports for state and local government subrecipients.
14. Prepare the independent auditors’ reports required by OMB Circular A-133.
In mid August, after the final closing of the books and preparation of final trial balances by C personnel for the year ended June 30), we will commence performing our ye end substantive audit. Our final examination will include tests which we deem necess2 including:
1. Confirmation by third parties of selected sources of City revenue.
2. Testing of support for the significant assets and liabilities of the City.
3. Review of significant events after year end (through the completion of our audit).
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SECTION G, (Continued)
4. Review of attorney letters for significant legal matters affecting the City's financ position.
5. Testing of revenues and expenditures through analytical procedures and otl substantive procedures as necessary,
The aforementioned tests are only a few of the tests performed during the examination and by means is it meant to be all inclusive. At the completion of the audits each year, Mr. A1-Im: and Mrs. Kepner will meet with Ms. Hildabrand, Finance Director and Kevin Branca, Assist: Finance Director to review our audit findings and any adjusting journal entries. We plan comply with the audit timeline for delivery of all audit reports.
We will also make ourselves available to meet with City Council, as necessary.
Utilization of Computers on Governmental Audits
Each audit team in our firm is assigned and utilizes an IBM compatible portable persol computer at the job site. The primary software program utilized by our audit staff is "Fast G the fund accounting audit system. Fast G, once set up on each local government client u automatically produce hd accounting workpapers and financial reports. Journal entries or
posted will automatically update individual, combining and combined level financial statemen Our audit staff have received specific training in this software program to facilitate effectivene on our local governmental audits. Also utilized are Microsoft Word, Excel, Quatro Pro a Word Perfect. All of our field staff are computer literate in the foregoing programs and we cou exchange data with the City staff in these programs. Additionally, each of our audit Seniors a knowledgeable of controls surrounding the EDP environment and assessing the effectiveness those controls within the audit of the local government.
Use of Statistical Sampling
Based upon our preliminary assessment of control risk for the City's internal control structu we identi@ those major transaction cycles where reliance upon the internal control structure deemed to be the most effective audit approach. At a minimum, this is expected to entail tests controls for the purchases/disbursements/payables cycle and the payroll cycle, For thc transaction systems we utilize statistical sampling techniques to support a lower assessment
control risk.
In conducting our tests of controls, we use the parameters set forth in the AICPA Audit Sampli. Guide for statistical sampling techniques. The Guide establishes the following sample si2 when a 10% allowable risk of over-reliance is used and when the preliminary review of t internal control structure supports an expectation of no significant weaknesses or errors:
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SECTION G, (Continued)
Use of Statistical Sampling, (Continued)
Planned Degree on Tolerable Sample Reliance of Controls Rate Sizes
Substantial Moderate Minimal
2%- 7% 32-1 14
6% - 12% 18- 38 11% - 20% 11- 20
The actual sample sizes used will depend upon our preliminary assessment of control risk and extent of our planned substantive tests and analytical procedures. We statistically evaluate results of our sampling techniques to determine whether or not any modifications need to
made to the nature, timing and extent of our planned substantive tests, Ow substantive tests
designed to be responsive to the areas of higher control risk revealed by our statistical samplin;
We use our firm's IBM Data Processing System to randomly select the transactions to be test Our computer has specialized software designed for this purpose which can produce statistically random sample even when there are breaks in the City's transaction sequence (: example, different sets of check numbers are used).
Analytical Procedures to Immove Understanding of Client
Analytical procedures are used by our firm in general planning to improve the auditc understanding of the governmental unit's operations and to identify audit areas for increas attention. SAS No. 56 requires the use of analytical procedures in the planning and over review stages of all audits.
SAS No. 56 states that "analytical procedures should be applied to some extent. . . for all aud of financial statements made in accordance with generally accepted auditing standards" for t
following purpose among others:
To assist the auditor in planning the nature, timing and extent of other auditing procedures
Analytical procedures may be used in both general planning and audit program planning.
SAS No. 56 describes the two broad uses of analytical procedures in audit planning as follows:
Enhancing the auditor's understanding of the client's business and the transactions a events that have occurred since the last audit date.
0 Identifying areas that may represent specific risks relevant to the audit.
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SECTION G, (Continued)
Comparisons of account balances between accounting periods and ratio and trend analy: usually improve the auditor's understanding of the client and its operations and may identi critical audit areas, e.g., comparing general and special revenue fund expenditures by functio and revenue by source for the past two years provides an understanding of the governmenl unit's operations and may identify a revenue source that requires increased attention in t
current audit.
SAS NO, 56 requires use of analytical procedures in audit planning, but does not speci
particular procedures that are always necessary. Ow firm believes that in a government engagement, the auditor's preliminary analytical procedures should include, as a minimum, comparison of current account balances in the working trial balance to similar amounts in tl prior annual period's financial statements and the current period's budget. However, a thoughtf consideration of expected relationships among account balances and periods by an experiencc auditor is far more important than a mechanical comparison. The auditor should think ab0 these . relationships and bring 'to bear other knowledge about the governmental unit ar government operations.
Consideration of Laws and Regulations
Our audit approach recognizes the importance of laws and regulations in planning the audit of local governmental entity. As a part of the audit, our firm obtains an understanding of those lav and regulations that have a direct and material effect on the determination of financial stateme: amounts. We then design the audit to provide reasonable assurance of detecting materi
financial statement amounts. instances of noncompliance that will have a direct and material effect on the determination I
Assistance fiom Citv Staff
Normal cooperation and assistance from City staff is expected by the auditors including typing ( confirmation requests, and normal year-end schedule preparation (i.e., lead schedules, ban reconciliations and other support for significant asset and liability balances of the City). I& would also expect reasonable assistance fiom City staff in reproducing permanent files or othc documents and refiling requested documentation during the audit examination. Should the Cil require our technical and accounting assistance, this would be conducted at the hourly rates sc forth in our proposal.
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SECTION H
OUR FIRM’S UNDERSTANDING OF THE OBJECTIVES AND SCOPE OF THE ENGAGEMENT
Our understanding of the objectives and scope of the work to be performed is based upon yo1 request for proposal, the information provided at the pre-proposal conference and our pric experience in auditing the City of Carlsbad.
Based upon the foregoing we understand the objectives and scope of work to be as follows:
1. We will perform an audit examination of all fund types and account groups of the City I Carlsbad for the years ended June 30, 1998 through June 30,2000. Our examination w be conducted in accordance with generally accepted auditing standards a~ Government Auditing Standards. The auditors will draft and word process the finmci
section (including the supplementary schedules) of the Comprehensive Annual Financi Report (CAFR) of the City of Carlsbad. The City will draft and word process tl introductory and statistical sections of the CAFR. The auditors will provide bound dra copies of the CAFR (financial section) by October 3 1. After receiving the City’s revie comments, the auditors will provide the final camera-ready CAFR (financial section) ar one double-sided bound copy by November 23, as indicated in the request for proposal.
2. For fiscal years where federal grant expenditures exceed $300,000, we will perform “single audit” of the City of Carlsbad in accordance with the Single Audit A Amendments of 2996 (Public Law 104- 156) and OMB Circular A-133 entitled Audits l States, Local Governments, and Non-Projts Organizations. Our single audit will covi all federal grants received by the City of Carlsbad and its component units either as primary or secondary recipient. The City will provide to the auditors the Schedule ( Federal Financial Assistance encompassing all direct and pass-through federal func
received by the City. We will render our reports on the single audit in accordance wi the single audit requirements as described in Section G of this proposal.
3. We will perform a financial and compliance audit of the City of Carlsbad Redevelopme]
Agency for the years ended June 30, 1998 through 2000. Our compliance auditin procedures will meet the State Controllers guidelines for compliance audits ( Redevelopment Agencies. The auditors will prepare the financial statements and provic the requested number of copies in accordance with the timetable for report delivel indicated in the request for proposal.
4. We will audit the financial statements of the Carlsbad Public Improvement Corporatic for the years ended June 30, 1998 through 2000. The auditors will prepare the financi statements and provide the requested number of copies in accordance with the timetab for report delivery indicated in the request for proposal.
5. We will audit the financial statements of the Encina Financing Joint Powers Authority fc
the years ended June 30, 1998 through 2000. The auditors will prepare the financi: statements and provide the requested number of copies in accordance with the timetab: for report delivery indicated in the request for proposal.
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SECTION H, (Continued)
6. We will audit the federal asset forfeiture funds of the City of Carlsbad for the years enc June 30, 1998 through 2000. In accordance with the new audit directives provided by 1 US. Departments of Justice and Treasury, we will include the results of our audit of thc
funds in the single audit report for the City of Carlsbad.
7. We will test the City’s appropriation limit and provide a letter of Agreed Up Procedures for the years ended June 30,1998 through 2000.
8. We will prepare a management letter. This letter will include nonreportable conditic (those constructive comments not required to be included in the single audit report). 7 will discuss those comments with Finance personnel prior to its finalization.
9. Conrad .& Associates, L.L.P. desires to keep its City clients abreast of new developmer affecting local government finance. We would plan to advise City staff of ne accounting developments during the interim/planning stage of each year’s audit.
10. Finally, we perceive the scope of our work as being advisors to the City of Carlsbs Throughout the year, City personnel will have access to the Engagement Partner, Ken r! Imam, Technical Review Partner, Michael A. Harrison, and Engagement Senic Michelle Kepner to seek advice in the application of generally accepted accountil principles, the establishment and segregation of funds, advise regarding debt issuanc
including matters of taxation and policy relating to City fringe benefits. financial statement preparation and content and other matters relating to the Cit
With respect to the City of Carlsbad and its component units, Conrad & Associates, L.L.P. mec the independence requirements of generally accepted accounting standards and the Governme, Auditing Standards (1994 revision) published by the US. General Accounting Office. Our fir: has never had a record of substandard audit work. Conrad & Associates, L.L.P. does not inter to use subcontractors for this engagement. We are independent with respect to the City I Carlsbad. No conflicts of interest exists relative to our firm performing the audit.
26
0 a
AUDIT FEES
(Removed and bound separately)
0
APPENDIX A
RESUMES OF AUDIT ENGAGEMENT TEAM
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AUDIT TEAM ORGANIZATION CHART
City Council
City of Carlsbad
Lisa Hildabrand Finance Director
I
I
Kevin Branca Assistant Finance Director
I I
Ken Al-Imam, C.P.A. Engagement PartnerManager H I
Michael A. Harrison, C.P.A. Technical Review Partner 1 '. I -
* Michelle Kepner, C.P.A. Senior Auditor
& Professional Staff
0 a
KEN AL-IMAM, C.P.A.
Ewagement Partner
California CPA Certificate No. 32377E, July, 198 1
EDUCATION
B.A. - California State University, Fullerton (Accounting) Certified Public Accountant - California
PROFESSIONAL EXPERIENCE
4 years - Conrad & Associates, L.L.P. (Senior Accountant) 5 years - Conrad & Associates, L.L.P. (Audit Manager) 2 years - Conrad & Associates, L.L.P. (Senior Manager) 6 years - Conrad & Associates, L.L.P. (Partner)
Total Auditing Experience - 18 years Total Supervisory Experience - 16 years
RELATED EXPERIENCE
The following is a summary of Mr. Al-Imam's related experience:
Audits of California Cities
Mr. Al-Imam has been directly responsible for the annual financial audits including single a1 conducted under OMB Circular A-128 of the following entities:
c&
City of Costa Mesa
Duties Performed Dates Performed
Partner 0619 1-06/97
City of La Quinta Partner 06192-06/97
City of Santa Ana Manager 06184-06/86
City of Buena Park SeniorManagerPartner 06182-06/97
City of Rialto SeniorManager 06/82-06/89.
City of Rancho Mirage Partner 06192-06/97
City of Carlsbad SeniorPartner 06181-06/83, 06193-06/97
City of Stanton Manager 06183-06/87
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Ken AI-Imam, (Continued)
Audits of California Cities. (Continued)
CitJ Duties Performed Dates Performed
City of Westminster Seniormanager 0618 1-06/86, 06188-06/89
City of Azusa . Managerpartner 06187-06/97
City of South Gate ManagerlPartner 06/84-06/88, 06/97
City of Vista Managerpartner 06185-06/94
City of Banning
City of La Verne
City of San Marcos
City of Indian Wells
City of Escondido
City of Downey
City of Nonvalk
City of Hemet
City of San Gabriel
City of Gilroy
City of Santee
City of Whittier
City of La Puente
Managerpartner
Managerpartner
Manager
Partner
Manager
Manager
Manager
ManagerQartner
Manager
Managerpartner
Partner
Partner
Partner
California Redevelopment Agency Audit Experience
Ayency Duties Performed
Costa Mesa Redevelopment Agency Partner
Carlsbad Redevelopment Agency Partner
06187-06/91
06188-06/96
06183-06/87
06/97
06183-06/88
06185-06/86
06/86
06189-06/97
06/88
06/89-06/97
06/91-06/95
06194-06/97
06/97
Dates Performed
0619 1-06/97
06193-06/97
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Ken Al-Imam, (Continued)
California Redevelopment Aaencv Audit Experience, (Continued)
Agency Duties Performed
Santa Ana Redevelopment Agency Manager
La Quinta Redevelopment Agency Partner
Bum Park Redevelopment Agency SenioflManagerlPaflner
Rancho Mirage Redevelopment Partner
Rialto Redevelopment Agency
Westminster Redevelopment Agency
San Marcos Redevelopment Agency
Stanton Redevelopment Agency
Downey Redevelopment Agency
La Verne Redevelopment Agency
Nonvalk Redevelopment Agency
Azusa Redevelopment Agency
South Gate Redevelopment Agency
Vista Redevelopment Agency
Banning Redevelopment Agency
Gilroy Redevelopment Agency
Hemet Redevelopment Agency
La Puente Redevelopment Agency
SeniorManager
Seniormanager
Manager
Manager
Manager
Managerpartner
Manager
ManagerPartner
Manager
Managerpartner
Managerpartner
Manager
Manager/Partner
Partner
Dates Performed
06184-06/86
06192-06/97
06182-06197
06/92-06/97
06182-06/89
06/83-06/87, 06/89
06/84-06/87
06/84-06/87
06/85-06/86
06/88-06/97
06/86
06187-06197
06183-06/88
06186-06\94
06187-06/98, 0619 1 -06/92
06/89-06/90
06189-06/97
06/97 .
0
Ken Al-Imam, (Continued)
Audits of Special Districts and Authorities
Entitv Name
San Elijo Joint Powers Authority
Big Bear Regional Waste Management Authority
Encina Financing Authority
Yorba Linda Water District
California Joint Powers Insurance Authority
Encinitas Fire Protection District
Orange County Water District
Azusa Agricultural Water
Azusa Public Financing Authority
Water Facilities Authority
La Quinta Public Financing Authority
Orange County Civic Center Authority
Transportation System Development Authority
Nonvalk Civic Improvement Corporation
Los Angeles County/City of Downey Regional Public Recreation Authority
Downey Civic Center Corporation
Downey Water Facilities Corp.
Community Development Commission of the City of Escondido
Banning Public Facilities Corporation
Capistrano Beach Sanitary District
0
Duties Date: Tvue of Entity Performed Perforr
Joint Powers Authority Partner 06/92-(
Joint Powers Authority Partner 06/94-0
Joint Powers Authority Partner 06/93-0
Special District Senior 0618 1-0
Joint Powers Authority Partner 06/9
Special District
Special District
Non-Profit Corporation
Financing Authority
Joint Powers Authority
Financing Authority
Joint Powers Authority
Joint Powers Authority
Partner
Senior
Manager/
Partner
Partner
Manager/ Partner
Partner
Senior
Manager
06/92-C
061t
06/87-0
0619 1-0
06/85-0
06/92-0
06/1
12/8
Financing Authority Manager 06/1
Financing Authority Manager 0612
Financing Authority Manager 06/1
Financing Authority Manager 06/1
Financing Authority Manager 06187-0
Financing Authority Manager 06/87-0
Special District Manager/ 06/85-0 Partner
e e
Ken AI-Imam, (Continued)
Audits of Public Housing Authorities
Authoritv Duties Performed Dates Performed
Santa Ana Housing Authority Manager 1984-88
Nonvalk Housing Authority Manager 1986-88
Carlsbad Housing Authority SeniorRartner 1982-84, 1993-97
County of Riverside Housing Authority Manager 1983-84
Baldwin Park Housing Authority ManagerPartner 1983-84, 1995
South Gate Housing Authority SeniorNanager 1981-83, 1997
PROFESSIONAL AFFILIATIONS AND LEADERSHIP OUALITIES
Mr. Al-Imam is a member of the American Institute of Certified Public Accountants an California Society of Certified Public Accountants. He is also a member of the California Sc of Municipal Finance Officers (CSMFO) and the Governmental Accounting and Auc Committee of the Long BeachlOrange County Chapter of the Cal-Society of CPA's.
Mr. Ai-Imam serves as partner in charge of the Firm's continuing education training seminar? has spoken on technical topics to various sections and chapters of the California Socie Municipal Finance Officers. Mr. Ai-Imam has been a technical reviewer under the CSMFO !
Program for excellence in Financial Reporting for the past ten years,
The following is a summary of selected continuing education courses attended by Mr. AI-I during the past three years.
Date Sponsor Topic
01/19/95 CSMFO LAIF Investment Pool Safety
02/24/95 Cal Society of CPA's Reporting Investment Losses, Update on CCMA White Paper
04125-26/95 Conrad & Associates, L.L.P. Local Government Audit Training 1995 Session I
07/20/95 CSMFO Municipal Debt Disclosures
07124-26/95 Conrad & Associates, L.L.P. Local Government Audit Training 1995 Session I1
0 1/22/96 Conrad & Associates, L.L.P. Accounting for Nonprofits: Contributior and Financial Statements
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Ken AI-Imam, (Continued)
PROFESSIONAL AFFILIATIONS AND LEADERSHIP QUALITIES, (CONTINUED)
Date Sponsor Topic
02125-27/96 CSMFO 1996 Annual Conference
04/25-26/96 Conrad & Associates, L.L.P. 1996 Local Government Audit Training - Session I
07/26-28/96 Conrad & Associates, L.L.P. 1996 Local Government Audit Training - Session I1
0 1/27/97 Cal Society of CPA’s GASB Update - PERS Disclosures
0113 1/97 Conrad & Associates, L.L.P. The New AICPA Accounting and Audit Guide for Nonprofits
02/23-25/97 CSMFO 1997 Annual Conference
0412 1/97 Cal Society of CPA’s The GASB Exposure Draft on the New Financial Reporting Model
05/01 -02197 Conrad & Associates, L.L.P. 1997 Local Government Audit Training Session I
07/28-30/97 Conrad & Associates, L.L.P. 1997 Local Government Audit Training Session I1
1211 8/97 Cal-State University Fullerton Information Technology Update
0 a
MICHAEL A. HARRISON, C.P.A.
Technical Review Partner
California CPA Certificate No. 19299E, Date Issued - 9/28/73
EDUCATION
B.A. Accounting - California State University, Fullerton
PROFESSIONAL EXPERIENCE
9 1/2 years - KPMG Peat Marwick (Senior Manager) 18 years - Conrad & Associates, L.L.P. (Partner)
. .Total Auditing Experience - 27 1/2 years
Total Supervisory Experience - 26 years
RELATED EXPERIENCE
The following audits were performed under Mr. Harrison's supervision.
Mr. Harrison's experience in the performance of sinFle audits under Circular A-128 and A-13 in the financial audits of local governmental units entities and other related entities inch following:
Organizational Wide Audits of California Cities (All Funds and Account Groutx)
citV Duties Performed Dates Performed
City of Orange Partner 06/96-06/97
City of Brea Partner 06/92-06/97
City of Laguna Niguel Partner 06/96-06/97
City of Westminster
City of Carlsbad
City of Rancho Mirage
City of Indio
City of Rialto
City of Buena Park
Partner
Partner
Partner
Partner
Partner
0618 1 -06/89
06/8 1 -06/83
06/82-06/87
06/93-06/97
06/82-06/90
ManagerPartner 06/78, 06/82-06/89
0 a
Michael A. Harrison, (Continued)
Organizational Wide Audits of California Cities (All Funds and Account Groups), (Continued
c& Duties Performed Dates Performed
City of San Jacinto Partner 06/9 1-06/95
City of Vista Partner 06/83-06/90
City of Delano Partner 06/9 1-06/94
City of Stanton Partner 06183-06/87
City of San Clemente
City of Hesperia
City of San Marcos
City of Escondido
City of Santa Ana
City of South Gate
City of Downey
City of Desert Hot Springs
City of La Verne
City of Azusa
City of Palm Springs
City of Norwalk
City of Los Alamitos
City of Beaumont
City of Banning
Partner
Partner
Partner
Partner
Partner
Partner
Partner
Partner
Partner
Partner
Partner
Partner
Partner
Partner
Partner
06196-06197
06195-06/97
06183-06/87
06/83-06/88
06184-06187
06/84-06/88
06185-06187
06/85-06/90
06/88-06/92
06187-06192
06/86-06/97
06/86-06/97
06i86-06188
06186-06/91
06187-06191
City of San Gabriel
City of Highland
City of Hemet
City of Gilroy
Partner
Partner
Partner
Partner
06188-06/97
06/89-06/97
06189-06193
06189-06193
0 0
Michael A. Harrison, (Continued)
Organizational Wide Audits of California Cities (All Funds and Account Groups). (Continued)
w Duties Performed Dates Performed
City of Temple City Partner 06194-06/97
City of Claremont Partner 06/83-06/88
City of Villa Park Partner 06/97
Audits of California RedeveloDment Agencies (All Funds)
Agency Duties Performed
Brea Redevelopment Agency Partner
Orange Redevelopment Agency Partner
Indio Redevelopment Agency Partner
Santa Ana Redevelopment Agency Partner
Rialto Redevelopment Agency Partner
Rancho Mirage Redevelopment Agency Partner
Cathedral City Redevelopment Agency Partner
Buena Park Redevelopment Agency Partner
Claremont Redevelopment Agency Partner
Delano Redevelopment Agency Partner
San Jacinto Redevelopment Agency Partner
Carlsbad Redevelopment Agency Partner
Dates Performed
06/92-06/97
06/96-06/97
06193-06/97
06/84-06/87
06182-06/89
06/82-06/88, 06/92
06/87-06/96
06/82-06/90
06i83-06i88
06/9 1-06/93
06/91 -06196
06182-06/84
San Clemente Redevelopment Agency Partner 06/96-06/97
Hesperia Redevelopment Agency Partner 06/95-06/97
Westrninster Redevelopment Agency Partner 06/83-06/89
San Marcos Redevelopment Agency Partner 06183-06/87
South Gate Redevelopment Agency Partner 06/84-06/88
0 0
Michael A. Harrison, (Continued)
Audits of California Redevelopment Agencies (All Funds). (Continued)
Agency Duties Performed
Stanton Redevelopment Agency Partner
Downey Redevelopment Agency Partner
Desert Hot Springs Redevelopment Agency Partner
La Quinta Redevelopment Agency Partner
Santee Redevelopment Agency Partner
Nonvalk Redevelopment Agency Partner
Palm Springs Redevelopment Agency Partner
Banning Redevelopment Agency Partner
Azusa Redevelopment Agency Partner
Gilroy Redevelopment Agency Partner
Hemet Redevelopment Agency Partner
Highland Redevelopment Agency Partner
Temple City Redevelopment Agency Partner
Dates Performed
06/84-06/87
06185-06187
06185-06/90
06/92
0619 1-06/96
06/86-06/97
06186-06/97
06/87-06/91
06187-06/92
06189-06/90
06189-06/92
06190-06197
06/94-06/97
Audits of Special Districts and Authorities
Entity TvDe of Entitv
Palm Springs Public Financing Financing Authority
Authority
Yorba Linda Water District Special District
Los Alamitos County Water District Special District
Orange County Water District Special District
Mesa Consolidated Water District Special District
Azusa Agricultural Water Non-Profit Corp.
Water Facilities Authority Joint Powers Authority
Duties Performed
Partner
Partner
Partner
Partner
Partner
Partner
Partner
Dates Performe(
06/90-06/5
06/8 1 -06/5
06/88-0615
02186-02/1
06/83-06/8
06187-0615
06/85-06/5
0 e
Michael A. Harrison, (Continued)
Audits of Special Districts and Authorities, (Continued)
Duties Dates
Entitv Tyoe of Entitv Performed Perform
Tri-Cities Park Authority Joint Powers Authority Partner 06/92-061
Orange County Civic Center Authority I Joint Powers Authority Partner 06/82-06,
Brea Public Financing Authority Joint Powers Authority Partner 06/92-06/
Transportation System Joint Powers Authority Partner 12/86 Development Authority
Palm Springs Public Facilities Corporation Financing Authority Partner 06/85-06/
Norwalk Civic Improvement Financing Authority Partner 06/86-061 Corporation
Los Angeles CountyKity of Financing Authority Partner 06/86-06/1 Downey Regional Public Recreation Authority
Downey Civic Center Corporation Financing Authority Partner 06/85-06/:
Downey Water Facilities Corp. Financing Authority Partner 06/85-06/;
Community Development Commission Financing Authority Partner 06/87-0611
Capistrano Bay Community Services Special District Partner 06/92-06/!
El Barrio Park Authority Joint Powers Authority Partner 06/83-06/1
Banning Public Facilities Corporation Financing Authority Partner 06/87-06/!
of the City of Escondido
Capistrano Beach Sanitary District Special District Partner 06/85-06/!
Buena Park Library District Special District Partner 06/88-06/1
Southeast Water Coalition Joint Powers Authority Partner 06/93
Cathedral City Public Financing Authority Financing Authority Partner 06/92-06/!
Cathedral City Community Services District Special Dktrkt Partner 06/86-06/<
San Gabriel Valley Mosquito Abatement District Special District Partner 06/93-06,
a e
Michael A. Harrison, (Continued)
Audits of Public Housinp Authorities
Authoritv Duties Performed Dates Perfon
San Bernardino Housing Authority
Santa Ana Housing Authority
Hawaiian Gardens Housing Authority
Pomona Housing Authority
Norwalk Housing Authority
Carlsbad Housing Authority
County of Riverside Housing Authority
Baldwin Park Housing Authority
South Gate Housing Authority
Partner
Partner
Partner
Partner
Partner
Partner
Partner
Partner
Partner
1996-9;
1984-86
1994-97
1995-97
19 86-97
1982-84 1993 -96
1983-84
1983-84 1995
1981-83
PROFESSIONAL AFFILIATIONS AND LEADERSHIP OUALITIES
Mr. Harrison is a member of the AICPA, Government Finance Officers Association and Cal Society of CPA's. Mr. Harrison is a member of the Governmental Accounting and AI Committee of the Long BeacWOrange County Chapter of the California Society of 1
Society of Municipal Finance Officers on technical and non-technical matters, Mr. Harrison h the past 16 years, served on the Professional and Technical Standards Committee of the Cali Society of Municipal Finance Offlcers. The members evaluate annually the exceller Comprehensive Annual Financial Reports of California cities. Mr. Harrison, who was with E Peat Marwick for 9 112 years prior to joining Conrad & Associates in 1980 instructed nun KPMG Peat Marwick courses, including:
Mr. Harrison has been a speaker at California Society of CPAs workshops and to the Call
1. Regional Staff Audit Training Courses - Staff Accountants - Instructed all modules 01 five day regional audit training course
2. Regional Staff Audit Training Courses - Senior Accountants - Instructed all modules 0: five day regional audit training course
3. Regional Government Audit Training - Advanced - Instructed this three day cours
governmental accounting and auditing for senior accountants and management
4. California Government Audit Training - Basic - Instructed this one day coum governmental accounting and auditing in all of KPMGs seven California offices
0 0
Michael A. Harrison, (Continued)
PROFESSIONAL AFFILIATIONS AND LEADERSHIP QUALITIES. (CONTINUED)
Mr. Harrison has been the coordinator and/or co-coordinator of Conrad & Associates, L.L.1 House Governmental Audit Training Seminars for the past 16 years. He has extensive know of local governmental accounting and auditing issues and serves as an instructor semi-annua the fm's CPE training.
Mr. Harrison served as the firms liaison during their past four quality control reviews in I Conrad & Associates, L.L.P. received an "unqualified opinion" on the quality control o accounting and audit practice.
The following is a list of selected continuing education courses attended by Mike Hanison d the past three years.
- Date SDonsor ToDic
01/19/95 Cal Society of Municipal LAIF Investment Pool Safety Finance Officers
02/24/95 Cal Society of CPA's Reporting Investment Losses Update on CCMA White Paper
0425-26/95 Conrad & Associates, L.L.P. Local Government Audit Training 1995 Session I
07/24-26/95 Conrad & Associates, L.L.P. Local Government Audit Training 1995 Session I1
08/07/95 Chapman University Chapman Non-Profit Seminar
11/01/95 Cal Society of CPA's Understanding Chapter 9 Municipal
Bankruptcy
12/06/95 Cal-Society of CPA' s Current Tax Developments for Nonprofit5 and Tax Exempt Organizations
12/19/95 Cal-State University Fullerton Accounting and Auditing Update Accounting Focus Group
01/22/96 Conrad & Associates, L.L.P. Accounting for Nonprofits: Contribution2 and Financial Statements
02/07/96 Cal Society of CPA's Non-profit Investment Guidelines
02125-27/96 CSMFO Annual Conference
04/25-26/96 Conrad & Associates, L.L.P. 1996 Local Government Audit Training
e 0
Michael A. Harrison, (Continued)
PROFESSIONAL AFFILIATIONS AND LEADERSHIP OUALITIES. (CONTINUED)
- Date SDonsor Topic
07/26-28/96 Conrad & Associates, L.L.P. 1996 Local Government Audit Training
Session I1
01/27/97 Cal Society of CPA's GASB Update - PERS Disclosures
01/31/97 Conrad & Associates, L.L.P. The New AICPA Accounting and Audit Guide for Nonprofits
02i23-25/97 CSMFO 1997 Annual Conference
0412 1/97 Cal Society of CPA's The GASB Exposure Draft on the New Financial Reporting Model
05/01-02/97 Conrad & Associates, L.L.P. 1997 Local Government Audit Training Session I
07/28-30/97 Conrad & Associates, L.L.P. 1997 Local Government Audit Training
Session I1
12/18/97 Cal-State University Fullerton Information Technology Update
0 0
MICHELLE KEPNER
SENIOR AUDITOR I1
EDUCATION
Bachelor of Science (Accounting) - Biola University
PROFESSIONAL EXPERIENCE
Conrad & Associates, L.L.P. - 3 ?h years experience auditing local governments
Audits of California Cities (including Single Audits under OMB Circular A- 128 and A- 133)
citV Type of Audit Dates Perfon
City of Carlsbad Annual Audit 06/95-0615
City of Bell Annual Audit 06/94-0615
City of Temple City Annual Audit 06/95-0615
City of Hawaiian Gardens Annual Audit 06/95-0615
City of Pomona Annual Audit 06/95,06/S
City of Gilroy Annual Audit 06/95
City of Costa Mesa Annual Audit 06/94
Audits of Joint Powers Authorities and Wastewater Authorities
Authority Type of Audit Dates Perfon
Encina Financing Joint Powers Authority Annual Audit 06/96-0615
Big Bear Area Regional Wastewater Authority Annual Audit 06/94-0615
San Elijo Joint Powers Authority Annual Audit 06/94-0615
Audits of Special Districts and Other Authorities
DistrictlAuthoritv Type of Audit Dates Perfon
Big Bear Community Services District Annual Audit 06/94-0611
Housing Authority of the County of San Bernardino Annual Audit 09/95-09/S
Baldwin Park Housing Authority Compliance Audit 04/94,03/9
Bell Community Housing Authority Annual Audit 06/96-0615
0 0
Michelle Kepner, (Continued)
Audits of California RedeveloDment Agencies
Agency Tvpe of Audit Dates Perfon
Carlsbad Redevelopment Agency Financial and Compliance 06/96-06/S
Bell Redevelopment Agency Financial and Compliance 06/94-06/S
Audits of Non-Profit Organizations (under OMB Circular A- 133)
Entitv Type of Audit Dates Perforr
Orange YMCA Annual Audit 12194- 1 214
YWCA of Pasadena - Foothill Valley Annual Audit 06/96-0619
Sarah Center Annual Audit 06/94
Experience in Performing Drug and Alcohol Audits
Mrs. Kepner has performed more than a dozen drug and alcohol audits on behalf of the Counl Orange.
Computer Skills
Mrs. Kepner is proficient in the use of IBM compatible computers, Microsoft Excel and W Lotus 1-2-3, Word Perfect, Quattro Pro and Prentice Hall’s Government Software Program, FA G.
Relevant continuing education courses of Mrs. Kepner during recent years are as follows:
Date SDonsor ToDic
07125-27194 Conrad & Associates, L.L.P. 1994 Local Government Accounting and Audit Training
04125-26195 Conrad & Associates, L.L.P. 1995 Local Government Audit Training
07124-26/95 Conrad & Associates, L.L.P. 1995 Local Government Audit Training
0 1/22/96 Conrad & Associates, L.L.P. Accounting for Non-Profit Contributions and Financial Statement Presentation
04125-26196 Conrad & Associates, L.L.P. 1996 Local Government Audit Training
07126-28196 Conrad & Associates, L.L.P. 1996 Local Government Audit Training
e 0
Michelle Kepner, (Continued)
Date Sponsor Topic
01/31/97 Conrad & Associates, L.L.P. The New AICPA Accounting and Audit GL for Nonprofits
05/01 -02/97 Conrad & Associates, L.L.P. 1997 Local Government Audit Training
07/28-30197 Conrad & Associates, L.L.P. 1997 Local Government Audit Training
01/26/98 Conrad & Associates, L.L.P. Auditors Responsibility Regarding Fraud under New SAS No, 82
e 0
APPENDIX B
RESULTS OF MOST RECENT QUALITY CONTROL REVIEW
4 0 0
I
1
'g e September 11, 1995
. ~OXJ I '1 !cic'[i- Ronald L. Conrad, CPA (krtiiied Conrad & Associates
Public 1100 Main St., Suite C il .\ccountants Irvine, CA 92714-6730
1
1
1
f't'c!'
f<t.\-ic\\'
. ~)~*()iJr,!l~-! . _...I
!
Dear Mr. Conrad:
It is my. pleasure to notify you .that .on August 31, 1995
nost recent peer review of your firm, the related letter comments, and your firm's response thereto. Those docume
will now be placed in the public files of the Division
CPA Firms. The field work on your next review shol commence by May 31, 1998.
California Peer Review Committee accepted the report on
As You know, the reviewer's opinion was unqualified, I Committee asked me to convey its congratulations to . firm.
1 Sincerely,
*
1 2" A? fdL Joan R. Erickson, CPA
Director
Peer Review Program
cc: Dennis J Wagner, CPA
1
I ? 'I-+:-.- 8T.--L--. -nnrr-."r & AAArL &*UILL&CA. rUUY323J
1 1
I
Review Number: 872:
i
i
1 -" - -.
L.:::; :'
1 . _. .. .. ....
. ..>..I . I .- :. . . " 1 . ..; .< .-
e
a 0
WAGNER, MATTHIAS & MCGINN, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
loo0 73RD STREET * SUITE 5 DES MOINES. IOWA 5031 1-1393
515 225-0778 FAX: 515 225-1909
Member oj !he AICPA Division for CPd Firms
Private Companies Practice Section
To the Partners Conrad & Associates
We have reviewed the system of quality control for the accounting and auditing practice of Conrat Associates (the firm) in effect for the year ended December 31,1994. Our review was conducted in confor;
with standards established by the Peer Review Board of the American Institute of Certified Public Account;
(AICPA). We tested compliance with the firm's quality control policies and procedures to the extent 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 AIC Those standards indicate that a firm's system of quality control should be appropriately comprehensive suitably designed in .relation to the firm's size, organizational structure, operating policies, and the nature ( practice. They state that variance in individual performance can affect the degree of compliance with a fi~ quality control system and, therefore, recognize that there may not be adherence to all policies and procedl in every case.
In our opinion, the system of quality control for the accounting and auditing practice of Conrad & Assaciate effect for the year ended December 31,1994, met the objectives of quality control standards established by
AlCPA and was being complied with during the year then ended to provide the firm with reasonable assura of conforming with professional standards in the conduct of that practice.
Conrad & Associates is a member of the private companies practice section of the AICPA division for (
firms (the section) and has agreed to comply with the membership requirements of the section. In connec
with our review, we tested the firm's compliance with those requirements to the extent we conside appropriate. In our opinion the firm was in conformity with the membership requirements of the section du the year ended December 31,1994, in all material respects.
lt%.v,N*4dt&R
(7 Ill Li , 'YYW t.' Anvil c)7 400E
mccfi
0 0 ATTACHMENT
COST PROPOSAL OF AUDIT SERVICES
TO THE
CITY OF CARLSBAD
Submitted by: CONRAD & ASSOCIATES, L.L.P.
1100 Main Street, Suite C Imine, California 92614
February 20,1998
CONTACT PERSON - KEN AL-I"., PARTNER PHONE NO. (714) 474-2020 FAXNO. (714) 263-5520
CONRAD & ASSOCIATES, L.L.P. CALIFORNIA LICENSE NO. X3447
CONRAD & ASSOCIATES, L.L.P. FEDERAL IDENTIFICATION NO. 95-3389106
a 0
CONRAD CERTIFIED PUBLIC ACCOUNT ~SOCIATES. L.L.R 11 IRVINE, 00 MAIN CALlFORNll STREET, !
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS (7 14) 4:
February 20,1998
Lisa Hildabrand, Finance Director City of Carlsbad
1200 Carlsbad Village Dive Carlsbad, California 92008
Dear Ms. Hildabrand:
Enclosed please find Section I of our proposal which sets forth our cost proposal which we ha separated from our technical proposal for audit services.
Very truly yours,
CONRAD & ASSOCIATES, L.L.P.
KA:dac Enclosure
Ken Al-Imam, C.P.A. Partner
MEMBERS OF AKPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PIVOICE SKITION
0 e
SECTION I
. . OUR HOURLY RATES AND MAXIMUM FEES TO PERFORM THIS ENGAGEMENT
The following is a summary of the estimated hours and a breakdown of the ,maximum (including out of pocket expense) for the engagement:
City Audit
Public Improvement Corporation
Redevelopment Agency
Single Audit
Gm Limit
Encina Financing Joint Powers Authority
Federal Asset Forfeiture Audit
Totals
1997-98
$24,400
700
4,300
8,500
400
1,100
400
$39,800
1998-99
25,010
718
4,408
8,713
410
1,128
410
40,797
1999-200(
25,63 5
736
4,5 18
8,93 1
420
1,156
420
41.816
Estimated Breakdown of Audit Effort bv Classification
Classification Estimated Hours
Partner 100 11%
Senior 400 45% Staff - 400 44% - 900 100% -
The annual audit of the City of Carlsbad and component units contemplate conditic
satisfactory to completion of the examinations, including the City providing the auditors w
trial balances with substantially all closing entries completed.
Additionally, the City agrees to furnish subsidiary detail of account balances and reconciliati'
of accounts to the general ledger. We understand that the City will provide maximt cooperation and schedule preparation for the auditors as set forth on Page 12 of the WP. F also contemplate that the City will type confirmation requests and pull supporting documentati for our staff. If there are any changes in the scope of the audit; i.e, additional federal gri programs, substantial additional debt issuances, refundings, added project areas, etc., we WOI like to discuss these changes with the City Finance Director and the effect of these changes professional audit hours and costs of the engagement.
Hourly rates in effect for 1998 for additional services that the City may request are as follows classification and level of experience:
Classification
Partners Managers Supervisors
Senior Auditors
Staff Auditors
Hourlv Rate
$120 85 70
60 3
IZ @ a4 6(c
- 9
fil@
w
June 5,1998
Conrad & Associates, L.L.P.
Ken AI-lman, Partner
1100 Main Street, Suite C
Irvine, CA 92614
RE: CONTRACT FOR FINANCIAL AUDIT FOR CITY OF CARLSBAD
Enclosed for your files is a copy of Carlsbad City Council Agenda Bill No. 14,695 and
Resolution No. 98-159 which was adopted by Council on June 2, 1998.
Also enclosed is a copy of the signed contract with the City to perform the City's
financial audit for FY 1997-98, 1998-99 and 1999-00.
If you have any questions regarding this contract please call Lisa Hildabrand, Finance
Director, at (760) 434-2867.
*.yjfL. . .4 <.'" :;
i ,r*.. ,~,.,~~~.,~,-,.'~,~...~~~~~.i +: ~. '. i_.-
2
KATHLEEN D. SHOUP
Sr. Office Specialist
i"
1200 Carlsbad Village Drive - Carlsbad, California 92008-1 989 - (760) 434-2801