Badawi & Associates CPA - ProposalCity of
La Quinta
TECHNICAL PROPOSAL
For Professional Auditing Services for the
City of La Quinta
For the fiscal years ending June 30, 2017 to 2021
March 1, 2017
Contact Person:
Ahmed Badawi, CPA
Badawi & Associates
Certified Public Accountants
180 Grand Avenue, Suite 1500
Oakland, CA 94612
Phone: (510) 768-8244
Fax: (510) 768-8249
E-mail: abadawi@b-acpa.com
BADAWI&ASSOCIATES
. ' PUBLIC *CCOUN i ANTS
City of La Quinta
Table of Contents
Page
1Letter of Transmittal
3Independence
3Firm Qualifications and Experience
- Insurance
- License to Practice in California
- Firm Qualifications
- Technical Approach
- Firm Experience
- Additional Activities
- Client Training Seminar
- CSMFO Training
- GASB 68 Firm Developed Tools & Assistance
- Quality Control Review
- Federal or State Desk Review
- Disciplinary Action
- Lost Clients and Pending Legislation
3
3
3
4
5
5
6
6
6
6
8
8
8
Partner, Supervisory and Staff Qualifications and Experience 9
Similar Engagements with other Government Entitles 17
Understanding of Services to be Provided 21
Specific Audit Approach
- Objectives for Our Services
- Audit Approach
- Technical Approach
- Audit Schedule
22
22
23
27
Discussion of Relevant Accounting Issues 30
Conclusion 31
Appendix A - References 32
► BADAWI& ASSOCIATES◄
CERTIFIED PUBLIC ACCOUNTANTS
March 1,2017
Ms. Karla Campos
Finance Director/Treasurer
City of La Quinta
78495 Calle Tampico
La Quinta, CA 92253
Dear Ms, Campos,
Badawi & Associates (B&A), Certified Public Accountants (the “Firm") is pleased to have the opportunity to respond
to your request for a proposal to provide external audit services and to submit its qualifications to perform an
independent audit of the financial statements of the City of La Quinta (the “City”) for the fiscal years ending June 30,
2017 to 2021. The objective of our audits is to issue opinions regarding the fairness of presentation of the financial
position of the City in accordance with generally accepted accounting principles. These audits are to be performed
in accordance with generally accepted auditing standards, the standards set forth for financial audits in the General
Accounting Office’s (GAO) Government Auditing Standards, the provisions of the federal Single Audit Act of 1984,
as amended in 1996), and the Uniform Guidance, Audits of States, Local Governments and Non-Profit
Organizations. Uniform Administrative Requirements, as well as any other applicable federal, state, local or
programmatic audit requirements.
We will also perform the following as part of our engagement;
• Single Audit (if required)
• Gann Limit
• State Controller’s Report
We will also apply limited audit procedures to Management’s Discussion and Analysis (MD&A) and required
supplementary information. In addition, we will prepare the management letter containing comments and
recommendations regarding our review and evaluation of the systems of internal control and accounting
procedures.
This proposal will highlight the background of the partners and staff assigned to the engagement, summarize our
experience in the governmental area, and describe our approach to auditing the City.
This proposal demonstrates our ability to render the quality examination and to perform the necessary accounting
and auditing services requested by the City on a timely basis.
As a partner of the Firm, I will be the primary contact for negotiation of the contract. Additionally, I have been
authorized to legally bind the Firm. You may contact me at the following address and phone number;
Mr. Ahmed Badawi, CPA
Badawi & Associates
Certified Public Accountants
180 Grand Ave. Suite 1500
Oakland, CA 94612
Telephone; (510)768-8244
E-mail: abadawi@b-acpa.com
Address: 180 Grand Avenue, Suite 1 BOG Oakland, CA9461, • Phone: 510.768.8?^' ■ Fax: 510.768 8249
Karla Campos
Finance Director/Treasurer
City of La Quinta
Page 2
We are committed to performing the required work, compieting the audit, and issuing the necessary auditors’
reports prior to the City’s published time frames and commit to you that we will perform the work within the time
frames required.
We beiieve we are the best quaiified to perform the audit because our audit staff inciudes individuais weil
versed in municipai auditing and reporting requirements. We have performed auditing and consuming
engagements for numerous cities throughout California. We wiii be responsive to the needs of the City, we
understand the City’s operational environment, and piedge to you our complete commitment to providing a
quality product that meets the City’s requirements.
The approach to the audit has been designed to meet the audit requirements of the various authorities with the
ieast disruption to the City’s office operations. The foundation of the audit approach is based on communication
coupied with a strong knowiedge of City operations and detailed pianning at the initial stages of the audit. Open
communication lines with all parties of the Engagement Team and City Management and staff throughout the
engagement eliminate “surprises”. Initial planning and proper assignment of duties to experienced personnel
provide for an effective and efficient audit process. Consequently, inefficiencies and disruptions are kept to a
minimum. In addition, we perform almost half of the audit tasks during the interim phase to minimize any
unforeseen delays during the year>end phase and to ensure a smooth and timely audit process.
The Firm maintains liability insurance coverage for professional liability. Workers’ Compensation,
Comprehensive General Liability and Auto as part of our comprehensive insurance policy.
The Firm is an Equal Opportunity employer and complies with all Federal and State hiring requirements. The
Firm also supports Affirmative Action philosophies and works hard to provide disadvantaged groups with
opportunities for self enhancement.
This proposal is a firm and irrevocable offer for 180 days.
We are confident that you will find our organization offers the required expertise, technical knowledge, and
business understanding to perform an audit of the City. Our past experience provides us with a thorough
understanding of the needs and requirements of the City, as well as the technical knowledge to perform such
services in accordance with the accounting and auditing guidelines as published by the various authoritative
entities.
We welcome your inquiries and look forward to further discussions with you.
Sincerely,
Ahmed Badawi
Partner
Badawi & Associates
Certified Public Accountants
Technical ProposalCity of La Quinta
Independence
The Firm is independent of the City of La Quinta as defined by the GAO’s Standards for Audit of
Governmental Organizations. Programs. Activities and Functions, and the AlCPA and California
State Society of Certified Public Accountants as promulgated in various auditing and professional
standards.
Independence
Insurance
Firm
Qualifications
and
Experience
The Firm maintains professional liability insurance and other coverage as part of our
comprehensive insurance policy. Upon selection as City’s independent auditor, the Firm and our
insurance provider will provide a certificate of insurance to the City which shows the minimum
requirements identified by the City have been met.
License to Practice in California
The Firm and all key professional staff assigned to City's audit are properly licensed to practice as
Certified Public Accountants in the State of California and comply with GAO Government Auditing
Standards.
The Firm is registered with the California State Board of Accountancy.
COR6823.
The Firm has met all required State and local laws, rules, and regulations.
Its State number is
Firm Qualifications
Badawi & Associates was founded by Mr. Ahmed Badawi. Mr. Badawi has over 20 years of
experience working with state and local government with a special focus on cities. Prior to
founding B&A, Mr. Badawi was a partner with several local and national firms, where he headed
their government practice in Northern California. Mr. Badawi founded Badawi & Associates to
serve the fast-paced needs of California's local governments. The goal is to build a proactive,
client-focused culture from the ground up and to eliminate the entrenched bureaucratic culture and
intrinsic limitations of the big audit firms
Located in Oakland, CA, the Firm serves a variety of cities throughout California as well as
conducting financial related sen/ices for numerous special districts and authorities. Names and
phone numbers of several of our current and past clients and other references are provided for
your inquiries. We encourage you to contact these individuals to obtain information on the quality
of the audit and the ability of the audit staff.
Our Oakland office will be the Engagement Office assigned to the City.
In addition to specific city financial statements, the Firm members have also audited numerous
redevelopment agencies, public financing authorities, hospitals, housing authorities, transportation
authorities, special districts, water districts, OCJP grants, self-insurance pools, joint power
authorities and has also performed numerous compliance audits in accordance with the Single
Audit Act, childcare regulations, TOT regulations, AQMD regulations, franchise requirements, RDA
compliance, and other special projects. Additionally, the Firm has significant experience in bond
offerings, post closure landfill costs, and recent changes to redevelopment agency reporting
requirements.
3
BADAWI & ASSOCIATES
Cl ilU .- . U- i_ ACf OUNi AN o
City of La Quinta Technical Proposal
The Engagement Partner assigned to the City, Mr. Ahmed Badawi. Mr. Badawi has over 20 years
of government audit experience. He is a member of various governmental committees, has actively
participated in the development of accounting and audit guidelines for the governmental sector,
and is an instructor for the California Society of Municipal Finance Officers.
The professional staffs assigned to the Engagement are qualified and experienced. Each
individual of the Engagement Team has several years of experience and has conducted or
participated in numerous municipal audits of various sizes. Their understanding of governmental
operations and the various authoritative guidelines will provide the where-with-all to perform the
audit in an efficient and effective manner with minimal disruption to the City’s finance department.
Technical Approach
The approach to the audit has been designed to meet the audit requirements of the various
authorities with the least disruption to the City's operations. The foundation of the audit approach
is based on communication coupled with a strong knowledge of City operations and detailed
planning at the initial stages of the audit. Open communication lines with all parties of the
Engagement Team and City Management and staff throughout the engagement eliminate
“surprises". Initial planning and proper assignment of duties to experienced personnel provide for
an effective and efficient audit process. Consequently, inefficiencies, disruptions, and lack of
understanding are kept to a minimum.
The audit approach will consist of four phases:
Initial Planning Meeting;
The Engagement Partner and Manager will meet with City Management to discuss the
audit approach, identify specific needs of City Management, and familiarize themselves
with City policies and practices.
Interim:
The Engagement Team members including the Engagement Team Partner will perform the
internal control reviews, test transactions, evaluate compliance with Single Audit Act
requirements, identify potential audit issues that need to be addressed, perform limited
confirmation procedures, and develop a clear understanding between the Engagement
Team and City Management of the year end audit responsibilities and assignments. In
addition, we strive to complete many of the year-end audit tasks during the interim
phase to ensure a smoother audit process. We will work with the City on providing a
list of those tasks that we will target to complete during interim and work with the
City on how to complete them to minimize the amount of effort and time needed at
year-end which in turn will assist the City in meeting its goal of issuing the audited
financial statements or CAFR (if requested) by the desired deadline.
Year end:
The Engagement Team members including the Engagement Team Partner will conduct
validation procedures on general ledger account balances, complete confirmation
procedures, perform analytical procedures on revenue and expenditures, perform search
for unrecorded liabilities, complete compliance work on Federal Assistance, and wrap up
audit field work.
Reporting:
Auditor’s reports for all City reporting entities and compliance requirements will be finalized
along with Single Audit Reports and Management Letter comments. The Partner and
Manager will be available to make presentations to the City Council and/or designated
bodies.
A
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itM CLHi l i! ACCOUNi ANiS
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4
Technical ProposalCity of La Quinta
Firm Experience
The Firm is located in Oakland, and provides a full range of accounting services to governmental
agencies throughout California, including audit, tax and accounting. The Firm’s professional staff
members provide the financial background and specific experience to meet the City’s operational
needs. Additionally, this situation provides the City with an auditing firm that has depth in
capabilities to address any financial issue the City may need assistance with, and the quality audit
approach that you expect.
Our Oakland office will be the Engagement Office assigned to the City.
Firm policy requires that the Engagement Partner, during the first year of the engagement, be
actively involved in the daily fieldwork. This means to the City that Mr. Badawi will actually be on
site during the audit coordinating the audit process, supervising the audit staff, gaining a hands-on
understanding of City processes, and benefiting the City with his broad municipal experience. We
have found that this effort benefits the City and the Firm through developing a thorough knowledge
of the City's practices and issues and establishing a close working relationship with the City’s
Management. Additionally, continuity of audit personnel is assured because of the hands on
involvement of the Partner.
We are committed to providing appropriate and related experience, personal involvement, and a
broad business perspective to produce a quality end product within the time frames required.
The Firm provides financial and compliance auditing services to governmental agencies throughout
California. We are a governmental agency auditing firm and our professional staff members have
been performing these services for many years. As a result, we have performed financial and
compliance audits on most, if not all, types of governmental agencies and operations including:
Cities
Redevelopment
Agencies
Financing
Authorities
Housing
Authorities
Special Districts
Water Districts
Waste
Management
Authorities and
Operations
Pension Plans
Child Care
Operations
Joint Power
Authorities
Investment
Activities
Landfills
Enterprise Funds
Airports
Transportation
Operations
Federal and State
Grants
Additional Activities
We offer a full range of accounting and finance services to the governmental sector. These
services include:
• Financial audits
• Compliance audits
• Tax advice
• Development of financial and
accounting policies and procedures
• Investment review and compliance
evaluation
• Operational reviews
• Technical guidance on existing and
upcoming accounting issues
• Training seminars
• Pension/profit-sharing plans
• Performance audits
• Business consulting
Consequently, Firm personnel are well qualified to perform the services expected by the City.
5BADAWI &ASSOCIATESi
v-lRi 'a;...AN
City of La Quinta Technical Proposal
Client Training Seminar
The Firm hosts an annual update on recent technical accounting and finance issues affecting the
governmental area. This all day session reviews new and anticipated pronouncements from
GASB, discusses future issues under consideration by GASB, reviews accounting treatment of
various transactions where issues may arise, and provides a general overview of state and federal
compliance issues. All of our clients are invited to attend, free of charge. The one day session
qualifies for CPE under the rules of the State Board of Accountancy and is held in locations
throughout the Bay Area.
CSMFO Training
The Firm provides a one-day training session entitled “Introduction to Governmental Accounting” to
members of CSMFO. Firm personnel developed the class materials and teach the sessions.
Approximately 10 sessions are held annually at various locations throughout the State. The Firm
provides these sessions for only the cost of materials to CSMFO in keeping with its philosophy to
support the industry in which it serves.
GASB 68 Firm Developed Tools and Assistance
The Firm has developed tools to assist our clients with GASB 68 implementation or preparation of
journal entries for the CalPERS’ Plans. In addition to providing our clients with these tools and
instructions on how to use them, we are available to answer any questions on how to prepare and
complete your GASB 68 journal entries.
Quality Control Review
According to Government Auditing Standards, firms who perform audits under the Yellow Book are
required to have a peer review once every three years. We received a report with a rating of pass
with no deficiencies which we attached for your review.
6
< BADAW1&ASSOCIATES
CL«i I uD PUULiC ACCOUNi ANfS
City of La Quinta Technical Proposal
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System Review Report
Budnwi & Associates
Oakland, California;
and the Peer Review Committee of the California Society of CPAs
We have reviewed the system of quality control for the accounting and auditing practice of
Badawi &, Associates (the firm) in effect for the year ended February 29, 2016. Our peer
review was conducted in accordance v\-ilh the Standards for Performing and Reporting
Peer Reviews established by the Peer Review Board of the American Institute of Certified
Public Accountants. As part of our peer review, we considered reviews by regulatory
entities, if applicable, in determining the nature and extent of our procedures. The fimt is
responsible for designing a system of quality control and complying with it to provide the
finn with reasonable assurance of performing and reporting in conformity with applicable
professional standards in all material respects. Our responsibility is to express an opinion
on the design of the system of quality control and the finn’s compliance therewith based
on our review. The nature, objectives, scope, limitations of, and the procedures performed
in a System Review are described in the standards at www.aicDa.onz/prstimmarv.
As required by the standards, engagements selected for review included engagements
performed under GowrmncfU Aiuiiling Siandardx.
In our opinion, the system of quality control for the accounting and auditing practice of
Badawi & Associates in effect for the year ended February' 29, 2016, has been suitably
designed and complied with to provide the firm with reasonable assurance of performing
and reporting in conformity with applicable professional standards in all material respects.
Firms can receive a rating ol' fxiss. pass with deficiency(ies) or fail. Badawi & Associates
has received a peer review rating ofpass.
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CLH i _D public ACCOUN i AN i S
City of La Quinta Technical Proposal
B&A have policies and procedures to ensure it hires only qualified people, that it properly
supervises them and provides professional training, that it advances them to responsibilities they
are capable of handling, and that it provides them with necessary technical resources. All members
of B&A are very familiar with the stringent quality control standards established by the AiCPA.
The Firm Is a member of the AICPA Government Audit Quality Center.
The Firm is a member of the AICPA Private Companies Practice Section.
Federal or State Desk Reviews
The Firm has had no negative federal or state reviews in the past three (3) years.
Disciplinary Action
There has not been any state or federal disciplinary actions taken or pending against the Firm nor
any findings to report.
Lost Clients and Pending Litigations:
The Firm has not experienced termination of any contracts before completion, and has not
experienced any lawsuits or legal actions that have been resolved or are currently pending in the
prior five years.
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IttM CLHM i: P-J[3l'C ACCOUN! ANtS
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8
City of La Quinta Technical Proposal
The Engagement Team will normally consist of seven individuals who provide a broad business
perspective and significant experience in governmental auditing This team will provide access to a
wide range of technical capabilities which will provide the City with not only the technical support
necessary to perform the audit, but also the broad business background to interpret findings and
observations to offer effective solutions to issues, and the personal involvement of the Engagement
and Compliance Partners of the Firm.
Partner,
Supervisory,
and Staff
Qualifications
and
Experiences Engagement Quality
ReviewerEngagement Partner
Ahmed Bedawi Jeesie Powell
CPA
CPA
IT Specialists
Robert Wucher
Audit Manager
Mitesh Oesai
CPA
Audit Senior
Monica Singhai
CPA
Professional
Audit Staff
Professional
Audit Staff
The Engagement Team will be led by Ahmed Badawi, CPA. Mr. Badawi’s background includes
over twenty years of municipal auditing and accounting experience with a special focus on cities.
He is the instructor of the CSMFO “Introduction to Governmental Accounting" training classes. Mr.
Badawi is a member of the Government Accounting and Auditing Committee, the Accounting
Principles and Auditing Standards Committee and the State Technology Committee of the
California Society of Certified Public Accountants. He has participated in the audits of numerous
city, county and special district governments, as well as non-profit entities. His diversified
background offers the technical qualities required of the governmental and non-profit areas and the
necessary wherewithal to properly evaluate the entire accounting process, develop opportunities to
improve the accounting process, and to offer practical business recommendations. Mr. Badawi is
licensed as a CPA with the ability to attest an opinion on an audit.
The second member of the Engagement Team is Mitesh Desai, CPA. Mr. Desai's background
includes ten years of experience in municipal auditing with a special focus on cities. Mr. Desai has
participated in the audits of numerous governmental agencies, assisted in their efforts to publish
their CAFRs in compliance with GASB 34, and a volunteer member of the GFOA Special Review
Committee. Mr. Desai has also achieved the Advanced Single Audit Certificate offered by the
AlCPA. He will serve as the Audit Manager.
9bciBADAWI &ASSOCIATESi
O M'JDuIC ACCOUN • AN
City of La Quinta Technical Proposal
The third member of the Engagement Team is Monica Singhai, CPA Mrs. Singhai's background
includes over fourteen years of experience in municipal auditing experience. She has participated
in the audits of numerous governmental agencies and assisted in their efforts to publish their
financial statements in compliance with various regulations. Mrs. Singhai will be the Senior of this
engagement.
The fourth member of the Engagement Team is Robert Wucher. Mr, Wucher has 30 years of
experience in the field of Information Technology (IT) at the senior and executive management
level. He has worked extensively with government agencies, private organizations and public
companies. Industry experience includes the public sector, banking, manufacturing, Internet, health
care and not-for-profit organizations.
The fifth member of the Engagement Team is Jessie Powell. CPA. Ms. Powell background
includes thirty five years of accounting and auditing experience. She has an extensive background
in audit and accounting engagements for small businesses and specializing in governmental
entities and not-for-profit organizations. She also performs second partner reviews and
engagement quality control reviews for several CPA firms throughout California and is an active
peer reviewer for the CalCPA Peer Review Program. She has participated in the audits of
numerous district, and city governments, as well as non-profit entities. Her diversified background
offers the technical qualities required of the governmental and non-profit areas and the necessary
wherewithal to properly evaluate the entire accounting process, develop opportunities to improve
the accounting process, and to offer practical business recommendations. Ms. Powell will serve as
an Engagement Quality Reviewer of this engagement.
Each member of the Engagement Team participates in continuing education programs offered by
the AlCPA and California State Society of Certified Public Accountants, and each has met the
continuing education requirements for municipalities. In addition, the firm offers at least 60 hours of
in-house CPE annually focused mainly on municipal audits.
Professional Development:
The Firm maintains a comprehensive training program targeted at appropriate professional staff
levels. It utilizes in-house developed educational programs, AlCPA and California CPA Foundation
educational programs, and on-the-job training.
The Firm’s annual training schedule which officially begins in April for all professional staff and
administrative staff includes comprehensive in-house training sessions on such topics as:
• Review of principles of accounting and financial reporting for state and
local governments,
• Review of governmental fund types and account groups,
• Review of newly issued generally accepted auditing standards and GAO
auditing standards.
• Review of Internal Control evaluation approaches including COSO
principles.
• Updates on recent governmental accounting and reporting guidelines.
• Review of Single Audit requirements and approaches.
• Review of financial audit approaches.
• Overview of audit and internal control work paper techniques,
• Review of GASB reporting requirements.
• Review of current issues facing the governmental community.
10d _ ,
BADAW1& ASSOCIATES
CL«i -I HV.O..IC ACCOUNT AN ts
Technical ProposalCity of La Quinta
During the year, professional staff members are sent to various educational sessions sponsored by
the AlCPA and California State Society of CPAs, as considered appropriate for the level and need
of the individual. These classes include, among others:
• Governmental Financial Reporting Standards and Practices.
• Yellow Book: Government Auditing Standards.
• Financial Accounting Standards: Comprehensive Review.
• Single Audit.
• Governmental Auditing & Accounting Update.
• Governmental Accounting Principles.
• Comprehensive Review of Generally Accepted Auditing Standards
The result of the Firm’s training program is the production of a highly educated and competent
municipal audit group capable of performing an efficient and effective audit for the City.
The Team members will continue their professional development efforts.
Staff Retention and Continuity:
The Firm's policy on providing service to our clients includes a commitment to maintaining
continuity of audit personnel. We cannot guarantee that our staff will remain with the Firm.
However, to encourage our staff to remain with us, we pay competitive wage rates; offer
promotional opportunities: provide state-of-the-art equipment and excellent working conditions; and
offer various benefits, such as retirement plans, medical plans, profit sharing programs,
educational benefits, and other such benefits. Additionally, we will guarantee that any staff
member assigned to this engagement will return to the City in subsequent years if he or she is still
with the Firm. We can also guarantee that the partner will be involved in future years. Continuity
of audit staff is of prime concern to us and because of the hands-on involvement of the partner; we
can assure you that future years’ audits will be conducted in an efficient and effective manner with
qualified and experienced professionals.
The Firm is an Equal Opportunity employer and complies with all Federal and State hiring
requirements. The Firm also supports Affirmative Action philosophies and works hard to provide
disadvantaged groups with opportunities for self enhancement.
Resumes of each member of the Engagement Team follow.
11< ^►BADAWl&ASSOCIATES
Clw ' . P ACCOUN'a;.
City of La Quinta Technical Proposal
Ahmed Badawi, Certified Public Accountant - Engagement Partner
Length of Career
• Twenty years’ experience in municipal auditing and accounting with a special focus on cities.
• Certified Public Accountant for the State of California.
Professional Experience
• Partial listing of clients served:
S«rvto»» Providsd
Financial
Audit
Single
Audit
RDA PFA Entarpriaa
FundAuditAudit Other
Cities
Antioch
Albany
Berkeley
Burlingame
Dublin
Fremont
Pleasanton
Redwood City
Richmond
San Bruno
San Leandro
San Mateo
Turlock
Union City
Walnut Creek
Counties
Santa Cruz County
Contra Costa County
County of Lassen
Special Districts and Other.
Port of Redwood City
Marin Municipal Water District
Coastside Fire Protection Distnet
Alameda County Water Distnet
Cosumnes Community Services Distnet
East Bay Regiortal Park Dstrict
Metropolitan Transportation Commission
South Bayside System Authority
Stanislaus County Childcare
West County Wastewater District
Health Care.
Alameda County Medical Center
Family Healthcare Network
X X X X X
X X X X
X X X X X
X XX
X X X
X X X X
X X X X
X X X X X
X X X X X X
X X X X X
X X X X
X X X X X
X X X X X X
X XXXX
X X X X X
X X X X X X
X X X X X X
XXXX
XXX
XX
XX
X X X
XX
X X X
X
XX
X X
XX
XXX
XX
• Has performed numerous financial audits, Single Audits, Transportation Development Act audits,
housing audits, electrical utility audits, RDA audits, PFA audits, and Trust Fund audits, and has
prepared numerous CAFRs.
Education
• BS Degree in Accounting from the University of Alexandria, Egypt.
Professional Activities
• Instructor. CSMFO’s “Introduction to Governmental Accounting" training class.
• Member, CALCPA Government Accounting and Auditing Committee
• Member, American Institute of Certified Public Accountants.
• Member, California Society of Certified Public Accountants.
• Member, Government Finance Officers Association.
• Member, California Society of Municipal Finance Officers.
• Chair, Audit Committee, San Francisco SPCA, a CA nonprofit organization
Continuing Education
Has met the cun’ent CPE educational requirements to perform audits on governmental agencies
12
< ► BADAWI & ASSOCIATES
CLH'.'I LL> P'JOliC ACCOUNi AN’S
Technical ProposalCity of La Quinta
Mitesh Desai, Certified Public Accounfant- Professional Audit Manager
Length of Career
• Ten years' experience in municipal auditing with a special focus on cities.
• Certified Public Accountant for the State of California.
Professional Experience
• Has participated in several financial audits, Single Audits, RDA audits, PFA audits. Transportation
Development Act audits, and housing audits
Stvios Provided
Financial
Audit
Single
Audit
RDA PFA Enterprise
Fund OtherAuditAudit
Cities;
Antioch
Aibany
Barstow
BerKeiey
Buena Park
Foster City
Fremont
East Palo Alto
Lemon Grove
Newark
Menlo Park
Oakdale
Pittsburg
Placerville,
Redwood City
Rio Viste
Sar Mateo
Susanville
Turlock
Union City
Vacaville
Yountville
Counties:
Contra Costa
Glenn
Santa Cruz
Other.
Alameda County Water District
Alameda County Medical Center
Castro Valley Sanitary District
Cosumnes Comminity Senrices District
Golden Valley Health Cer«ers
Marin Municipal Water District
West County Wastewater District
Contra Costa Child Development Programs
Stanislaus County Childcare
X X X
X
X X X X
X X X X X
X X X X
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X X
X X X X
X X X
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X X X X
X X X X
X X X X X
X
X X X
X X X
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X
X X X X X X
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X X X
X
X
X X
X
X X
X X
X X
Education
• BS Degree in Business Economics with an emphasis in Accounting from University of California,
Santa Barbara
Professional Activities
* Member, American Institute of Certified Public Accountants.
’ Member, California Society of Certified Public Accountants.
• Volunteer Member, GFOA Special Review Committee
Continuing Education
• Various municipal accounting courses offered by the California Society of CPAs and local universities
including:
- Governmental Financial Reporting Standards and Practices
- Yellow Book; Government Auditing Standards
- Municipal Accounting
- Single Audit
• Has met the current CPE educational requirements to perform audits on governmental agencies.
13tm* BADAW1&ASSOCIATESi
' t .Ut- ^_IC ACCOUNI AN '
City of La Quinta Technical Proposal
Monica Singhai, Certified Public Accountant - Professional Audit Senior
Length of Career
Fourteen years’ experience in auditing with special focus on municipalities.
One year experience in accounting related position.
Certified Public Accountant for the State of California.
Professional Experience
• Has participated in several fi nancial audits, Single Audits, RDA audits and PFA audits
Services Provided
Financial
Audit
Single
Audit
RDA PFA Enterprise
FundAuditAudit
Cities:
City of Berlteley
City of East Paio ARo
City of Menlo ParR
City of Redwood City
Special District:
Alameda County Fire District
Alameda County Law Library
Burbank Sanitary District
Lions Gate Community Service District
Los Medanos Community Health Care District
Oakland-AJameda County Coliseum Authority
School District
Bayshore Elementary School District
Belmont'Redwood Shores School District
Brisbane SchorH District
Jefferson Elementary School District
La Monda-Pescadero Unified School District
Pacifica School District
Ravenswood City School District
Redwood City School District
San Mateo*Foster City School District
Charter schools:
Oakland Military Institute College Preparatory Academy
Sacramento VaRey Charter School
West Sacramento College Prep Charter School
Firsts:
First S Alameda County
First 6 Inyo County
First 5 Marin County
First 5 Monterey County
First 5 Santa Cruz County
Others:
Alameda County Housing Community Development Agency
Alameda County Redevelopment Agency
Alameda County Successor Agency
City of Oakland - Measure C
City of Oakland • Measure Y
City of Oakland - Child Care and Development Program
City of Oakland • Wildfire Prevention Assessment District
X X X
X X
X X X
X X X
X
X
X X
X
X
X
X
X X X
X
X X
X X X
X X
X X X
X X
XXX
X X
X
X
X X
X
X
X
X
XXX
X X
X
X
X
X
X
Education
Bachelor of Science in Accounting from Jabalpur University, India.
Professional Activities
* Member, California Society of Certified Public Accountants.
* Member, Institute of Chartered Accountants of India.
Continuing Education
• Various local governments and not for profit accounting courses offered by the Caiifomia Society of
CPAs and AlCPA including:
- Governmental Financial Reporting Standards and Practices
- Yellow Book: Government Auditing Standards
- Single Audit
Has met the current CPE educational requirements to perform audits on governmental agencies.
14
< BADAWI&ASSOCIATES
CLH: l :^L>PV-.-lC ACCOUNiANfS
Technical ProposalCity of La Quinta
Robert Wucher - Information Technology Specialist
Length of Career
• Thirty years’ experience in information technology (IT)
• Worked extensively with government agencies, private organizations and public companies
• Industry experience includes public sector, banking, manufacturing, internet, healthcare, and not-for
profit organizations
Areas of Expertise
• Systems Auditing and Controls Review (SEC AU-314, SAS-109, SAS-94)
• Sarbanes-Oxley, Section 404 IT Compliance Consulting and Auditing
• Journal Entry Analysis in Support of SAS-99 using IDEA by Caseware
• SSAE-16 (SOC 1, 2 & 3), Type I & II Reporting (Formerly SAS-70)
• ERP/MRP System Reviews and Workflow Analysis
• Software as a Service (SaaS) Cloud Computing Technologies
• International and Multinational Company IT Audit Expertise
• Forensic Data Analysis and Litigation Support in Support of Fraud Auditing
• Systems Selection and Request-for-Proposal (RFP) Development
• Systems Programming and Data Conversion
• Systems Failure Analysis and Quality Improvement
• E-Commerce and EDI Systems
• Information Technology Strategic Planning
• System Process/Procedures Development and Implementation
• Disaster Recovery and Business Continuity Planning
Publications
• Author, The Top Five Tips Every Technology Executive Needs to Know About Sarbanes-Oxley,
Published 2007, Aspatore Books
• Author, \Aflnning Legal Strategies for Technology & E-Business, An Overview of IT Controls Under
Sarbanes-Oxley Published 2005, Aspatore Books
Presentations
• IT Security Trends
• Data Privacy and Cloud Computing
• IT Trends and Red Flag Rule
• IT Controls for NFP Organizations
Education
• B.S. degree in Business Administration, Finance, Old Dominion University, Norfolk, VA.
Professional and Civic Associations
• Member, Information Systems Audit and Control Association (IASCA)
• MAS-90 Accounting Application Suite Qualified Installer, SAGE Systems
• Former Board Member, Pets are Wonderful Support (PAWS), San Francisco, CA
15BADAW1&ASSOCIATES
CL«M -DPjOw'C ACCOi ' AN '
City of La Quinta Technical Proposal
Jessie Powell, CPA - Engagement Quality Reviewer
Length of Career
¨ Thirty-five years of accounting and auditing experience.
• Extensive background in audit and accounting engagements for small businesses and specializes in
governmental entities and not-for-profit organizations
¨ Performs second partner reviews and engagement quality control reviews
• Active peer reviewer for the CalCPA Peer Review Program
• Participates in the audits of numerous district, and city governments, as well as non-profit entities.
Education
• B.S, Business Administration, California State University, Long Beach
Professional Activities
* Board Member, Kimberly-Shirk Association
* Board Member, YMCA of the East Valley
• Member, American Institute of Certified Public Accountants
* Member, California Society of Certified Public Accountants
* Member, CalCPA Governmental Accounting & Auditing Committee
* Committee Member, CalCPA Accounting Principles and Auditing Standards Committee
* Member, Redlands Chapter of the American Association of University Women
* Former Member, CalCPA Peer Review Committee
* Former team captain, AlCPA Peer Review Program
• Former President, Inland Empire Chapter of CalCPA
* Former President, YMCA of the East Valley
* Former President, Soroptimist International of Redlands
* Former Treasurer, Kimberly-Shirk Association
* Former Treasurer, CalCPA Group Insurance Trust
* Former Treasurer. Redlands Community Music Association
* Former Treasurer, Family Service Association of Redland
* Former Treasurer, Soroptimist International of Redlands
• Former Committee Chair, CalCPA Accounting Principles and Auditing Standards Committee
• Former Member, California State Board of Accountancy Administrative Committee
* Former Lecturer on Governmental and Non-Profit Accounting at university level
16
1:^* BADAWI&ASSOCIATESi
CLRIT -.D P'JtJLiC ACCOUNi AN
Technical ProposalCity of La Quinta
The table on the following page is a partial listing of our clients similar to the City, and illustrates the
many different types of components involved in each audit engagement that present very difficult
and complex auditing and accounting challenges.
Similar
Engagements
with Other
Governmental
Entities
*
Indicates cities with population over 50,000
indicates cities with governmental revenues over 100 million and population over 50,000
4^ BADAWI&ASSOCIATES
nnn CLW' I PhjD,.iC ACCOL j an
t
17
City of La Quinta Technical Proposal
REM/
Sueeesaer
Agancy
ChIM
Care
Audit
Cliant
Since
Engagamant
Partner
GFOA
Award
Single
Audit
Housing
Authorit^
Ente rprisa
FundsCityHoursPrincipal Contact CAFR TDA
Henry Oyekanni
Rnance DrectorAhmed
Badaw i
**Berkeley 2006 1800 Yes Yes X X X X
(510)981-7300
hoyekanrnQci-berkeley.ca.us
Derek Rarrpone
Financial Services Manager
{650)780-7071
drafTpone^redw oodcity org
Redw cod Ahmed
Badaw I
2006 600 Yes Yes X X X X
Qty
sy. Drew CorMtt
Finance Dreclor
<650)522-7104
dcorfrett®cityofsanmeteo org
Ahmed
Badaw i
**San Mateo 2004 500 Yes Yes X X X X
KYs. Davina l-tatfield
Ahmed
Badaw I
Accounting Manager
(707)449-5104
dhatfieid®cityOf vacavi8e.com
**YesVacavSe2008600Yes X X X X X
Ms. Gayle Okada
Supervising Accountant
(510)675-5352
gaylapQunioncity.org
Ahimd
Badaw I
*YesUnion City 2006 600 Yes X X X X
Ms. [}awn Merchant
Finance Drector
(925)779-6135
Dmerchant@ci.antioch .ca.us
Ahmed
Badaw I
2005 470 Yes Yes X X X XAntioch
KY. Rosendo Rodriguez
Finance Drector
(650)330-6640
RRodnguezQmenioparXorg
Ahmed
Badaw i
Menk) PexV.514 Yes Yes X X X X X2014
Ms. Susie VW>odslock
Director of Admnistrative
Services
Ahmed
Badaw i
2009 550 Yes Yes X X XNewark
(510)578-4804
susie.w oodstock®new ark.org
hY. David Glasser
France & AdnvistrativeAhmed
Badaw i
X2008380YesYesXXAbany
Service Drector
<510)526-5730
Ms. Mary Lee Sharer
France Manager
(707)374-6451 Ext. 1118
rrlaharerOcI.rl^vista.ca.us
Ahmed
Badaw i
XNoNfAXXXRio Vista 2009 480
Nte. Cindy FYothro
France Drector
(760)255-5115
cprothroigbarstow ca.org
Ahrred
Badaw i
Yes Yes X X X2012550Barstow
M-. Sung Hyun
France Drector
(714)562-3717
shuynt^buenapark.com
Ahmed
Badaw i
X XYesYesXBuena F^rk 2013 500
M*. Jared Hancock
City Adrrinistrator
(530)252-5100
JhancockQcityofSusan vMe.org
Ahmed
Badaw i
XYesCSIvFOSusanvMe2013450
Ms. Brenda Okw in
France DrectorEast Ralo Ahmed
Badaw i
Yes Yes X X X4502014
(650)853-3122
bohvin^cityofepa.Qrg
AKo
fA. Kenneth Spray
France DrectorAhmed
Badaw i
XYesN/A X2015400MBirae
.(650>25&-2433
ksprayQci.fffifcfae.ca.us
Ms Bonnie Johnson
Ahmed
Badaw i
France Drector
(909)795-9801 ext 231
bjohnson®cityofcaimesa.net
t^A350NoCakmesa2013
kYs Maria Ojeda
Finance DrectorAhmed
Badaw i
N/A XYountvBe2015300No
(707)944-8851
rarrow (SyvMe.com
M*. GUbert Rojas
Finance Drector
(619)825-3803
grojasQlamongrove.ca.gov
Lemon
Grove
Ahmed
Badaw I
XNoN/A X2013350
Linda Leaver
Finance Dreclor
(707)464-7483 x224
leaverOcrescantcity.org
Crescent Ahmed
Badaw i
X XNoN/A X X2014300
Qty
^ BADAW1&ASSOCIATES
CLR- l _DF\Jf3LiC ACCOUNiANTS
18
Technical ProposalCity of La Quinta
The table below lists all special district engagements:
Client
Since
GFOA
Award
Single
Audit
Enterprise
Funds
Engagement
Partner Principal Contact CAFRSpecial District Hours
Mr. Jeff RarTDS
General Manager
(916)405-7150
jefframos@yourcscl.com
Cosurmes
Comrunity
Services District
Ahmed
Badawi
2008 350 Yes Yes
Florin Resource
Conservation
District/ Bk
Grove VN^ter
District
Mr. Jink^lberg
Rnance Manager/Treasurer
(916)685-3556
imalberg@egwd.org
Ahmed
Badawi
2015 350 Yes Yes X
M'S. Mkyung Pustelnik
Rnance ivbnager
(415)945-1410
rnpustelnik@marinw ater.org
li^rin Municipal
V^^ter District
Ahmed
Badaw i
2010 350 Yes Yes X X
Ms. Joyce Giuggre
Adrrinistrative Services
Manager
(831)-718-8019
jgiutfre@rrbard.org
Monterey Bay
Unified Air
Ftolution Control
District
Ahmed
Badawi
2016 200 No NVA
M. Rajesh Sewak
Mnager of Finance & Adrnn.
(650)306-4150
rsew ak@redw oodcityport.com
Port of
Redwood City
Ahmed
Badawi
2006 200 No NiA X X
Ms. Jan Cooke
Rnance Drector
(650)375-7408
jcooke@hil5borough, net
Central County
Rre Department
Ahmed
Badawi
2012 150 Yes Yes
M. Tracy New
Drector of Business Services
6934 Sequel Drive
Aptos, CA 95003
(831)-685-6690
Aptos La Selva
Rre District
Ahmed
Badaw i
2016 120 No IsVA
194 _
BADAWI & ASSOCIATES
CL«' t xDPuOl • ACCOUN AN
City of La Quinta Technical Proposal
What Our Clients Sav About Us
In addition to the references provided in Appendix A, we have also provided contact information for
all our clients on the previous page if you would like to speak to any of them about their experience
with us. These are some of the things our clients have said about us.
“I would recommend Badawi & Associates to anyone seeking professional and
knowledgeable audit services"
Sung Hyun
Finance Director
City of Buena Park
‘‘This was the District’s first year with Badawi &Associates and I found the entire to
team to be responsive, thorough, detailed and professional. Not only was this a first
year audit, but we also implemented GASB 68 and completed a major restatement of
the District’s Capital Assets. With all of those moving pieces, this was by far the
smoothest first year audit that I have ever participated in.9f
Jim Malberg
Finance Manager
Florin Resource Conservation District/
Elk Grove Water District
20
BADAWI&ASSOCIATES
CLR! 'i !LD public ACCOUN? an ^ S
Technical ProposalCity of La Quinta
The City desires an audit of the financial records for the City and an expression of an opinion in
accordance with generally accepted accounting principles on the fairness of presentation of
financial statements for the fiscal years ending June 30, 2017 to 2021.
The Firm will:
Understanding
of Services to be
Provided
Express an opinion on the fair presentation of its basic financial statement which includes
but is not limited to the financial statements of governmental activities, the business-type
activities, each major fund and all aggregate remaining fund information in conformity with
generally accepted accounting principles in the United States of America.
Express an opinion on the fair presentation of its combining and individual non-major and
fiduciary fund financial statements and schedules in conformity with generally accepted
accounting principles. The Firm will provide an “in-relation-to” report on the supporting
schedules contained in the comprehensive annual financial report based on the auditing
procedures applied during the audit of the basic financial statements and schedules.
Provide an "in-relation-to” report on the schedule of federal financial assistance based on
the auditing procedures applied during the audit of the financial statements.
Perform the audit in accordance with generally accepted auditing standards accepted in
the United States of America, applicable to the financial audit contained in the Government
Auditing Standards issued by the Comptroller General of the United States and the
provisions of the Uniform Guidance, Audits of States, Local Governments and Non-Profit
Organizations.
Perform limited procedures on supplementary information required by the Government
Accounting Standards Board.
Issue the following reports, following the completion of the audit of the fiscal year’s financial
statements;
> Independent Auditor's Report on Financial Statements and Schedule of
Expenditure of Federal awards
> Report on Internal Control over Financial Reporting and on Compliance and Other
Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards
> Management Letter comments on Internal Controls
> Independent Auditor's Report on Compliance with Requirements Applicable to
Each Major Program and Internal Control over Compliance in Accordance with
the Uniform Guidance
> Schedule of findings and questioned costs
> Auditor’s Communication with Those Charged with Governance
> Comprehensive Annual Financial Report following the requirements and
guidelines of the GFOA award program
> Report on GANN Limit
> Annual State Controller’s Report
Provide special assistance to the City as needed.
Retain all working papers and reports at the audit firm's expense for a minimum of 7 years.
In addition, make working papers available to the City and/or any government agency as
appropriate.
21
1:^BADAWI&ASSOCIATESi
CLH' ! -P AC(->.'--'N'Arj
City of La Quinta Technical Proposal
Should any conditions be discovered requiring corrective action, the Firm will provide a detailed
description of the findings and recommended actions as to their resolution.
The Firm will submit a report to the City Council and management detailing auditor’s responsibility
under generally accepted auditing standards, significant accounting policies, management
judgments and accounting statements, significant audit adjustments, other information in
documents containing audited financial statements, disagreements with management,
management consultations with other accountants, major issues discussed with management prior
to retention, difficulties encountered during the audit, and any significant deficiencies or material
weaknesses found during the audit. Non-material instances of noncompliance will be reported in a
separate management letter, if appropriate, along with any other observations or recommendations
determined to be informative to City management.
The Firm will be available to provide advice and counsel regarding significant matters during the
year.
The Firm’s Partner and Staff welcome the opportunity to make presentations to the City Council
and will be ready to respond to questions from the Council and citizens of the City.
Objectives of Our Services
The basic objective of our audit of the City is to conduct an examination of the financial statements
Approach in accordance with generally accepted auditing standards and to express our opinion on the
fairness of presentation of such financial statements in conformity with generally accepted
accounting principles.
Specific Audit
Additionally, we believe that another real value of our audit lies in meeting other objectives at no
additional cost. The following are other objectives of our services that have important benefits to
the City:
• To offer substantive observations and recommendations relating to
accounting and operating control policies and procedures.
• To identify opportunities for operating efficiencies and isolate candidate
activities for cost reduction opportunities.
• To perform a professional audit in an efficient and effective way to minimize
disruption to the office operations.
• To offer ongoing advisory services to assist in the running of the operation
and implementation of improved operating procedures.
The engagement will be conducted within the framework of the Firm's quality control program
which includes the use of audit programs, careful planning, use of computerized audit software and
internal control evaluation & documentation software, and objective review procedures. On-site
staff will use Firm supplied portable computers and printers.
Audit Approach
The specific audit approach has been designed to efficiently and effectively address the audit
requirements of the City, to perform the audit of the City’s financial records in a timely manner with
minimal disruptions to office operations, and to meet the City’s timeline.
The audit will be conducted in accordance with:
Generally accepted auditing standards established by the AlCPA.
The standards contained in Government Auditing Standards issued by the GAO.
Provisions of the Single Audit Act and the Uniform Guidance.
Requirements issued by the California State Controller’s office.
Other requirements as required.
1)
2)
3)
4)
5)
22
< BADAWI&ASSOCIATES
-L' PUBLIC ACCOUNI AN'-'
Technical ProposalCity of La Quinta
We will conduct the necessary audit steps to perform;
• Planning of the engagement.
• Evaluation of the existing internal control environment to determine degree of
risk of material misstatement.
• Determination of degree of compliance with laws, regulations, grant
provisions, and City approved policies.
• Assessment of potential fraudulent issues.
• Validation of account balances.
• Verification of reasonableness of management estimates.
Technical Approach
We use an industry specific audit approach tailored to governmental entities. Our governmental
audit approach addresses the special risks and circumstances of local governments. As a result,
the audit is conducted efficiently and effectively with minimal disruption to your staff.
The core of our governmental technical audit approach can be summarized as follows:
Planning. Understanding and Communication:
Based on our previous audit experience, using the budget, organizational charts, manuals
and other financial information systems and our knowledge of how governments work, we
will obtain an insight to the specific concerns and sensitivities of the City. Our understanding
is updated continuously through our year-round contact and communication efforts. We will
agree on common audit objectives and expectations with management before audit work
begins and, throughout the audit, will meet regularly with management to discuss audit
issues and to gather feedback.
1.
2.In-Depth Review of Systems and Controls:
We have developed diagnostic reviews which enable us to evaluate your systems and
controls, and to provide management with constructive feedback. Combined with our
knowledge of the City and understanding and experience with the City’s accounting software,
our control review will form the basis of our audit risk assessment. We will utilize the COSO
approach in our evaluation of the City’s internal processes to identify potential control
deficiencies. In future years, we will update our understanding through similar procedures.
Risk-Based Customized Testing Program:
Our audit approach is tailored to governmental applications. We will use audit programs
specifically designed to address the operational environment of governmental entities. Our
approach will identify potential control risks and the opportunities for risk of material
misstatements and fraud. We will evaluate the various risk assessments and identify the
potential risks relating to the:
• Balance Sheets/ Statement of Net Position
• Statement of Revenues and Expenditures / Statement of Activities
• Presentation
• Disclosure
Our audit procedures will then be developed to address these risk areas.
Expanded Interim Fieldwork:
Timeliness and audit efficiency is enhanced by performing extensive interim work. Partners,
managers and senior staff work with City staff to identify and resolve potential audit issues
early. Accordingly, the amount of audit work to perform at year end is minimized. Because
our audit staff is familiar with the operations before year-end fieldwork begins, disruption of
accounting staff is minimized.
3.
4.
23
BADAWI&ASSOCIATESi
CL«i I ••«CCOUN n AN '
City of La Quinta Technical Proposal
5.Smooth Transition:
Our testing program focuses on audit risks identified by our understanding of the City’s
operations. We will work with the accounting staff to identify the most effective ways to
address our objectives. Communication between the members of the audit engagement
team and City staff will be fluid and continuous.
Sample Size and Sampling Techniques:
Our audit approach will include sampling activities. Population size and the level of
assurance to be derived from a particular test will dictate the sample size. We use sampling
in our audit approach to compliment skilled judgment and knowledge of the particular
situation. Our sample size will range normally from 25 to 60 items.
Automated Systems:
We will evaluate controls over the IT functions to assess control risk. We intend to test
controls for purposes of reliance. Our review procedures will evaluate controls over:
• Security Management
• Logical and Physical Access
• Configuration Management
• Segregation of Duties
• Contingency Planning
In addition, we will review controls over:
• Input, processing, output, master data
• Application interface
• Data management system interface
Our Information Technology Specialists Group will evaluate the IT operating control
environment.
6.
7.
Analytical Procedures:
We use analytical procedures in several aspects of our audit. Extensive knowledge and
industry background are required for effective analytics, and our staff possesses the
appropriate experience and knowledge for the City to benefit from these procedures.
8.
Approach to be Taken in Determining Laws and Regulations Subject to Audit Test
Work:
We continuously refer to specific regulations, compliance supplements, state guidelines and
contracts currently in force. We perform the procedures required related to laws and
regulations, using inquiries, observations and sampling techniques. Some of the laws and
regulations that we believe may be applicable to the City are the requirements of the
California Public Utilities Commission, Single Audit Act and other applicable laws and
regulations, including the California Government Code, provisions of applicable Grant
guidelines, California Constitution GANN Limit requirements, requirements of local
measures. Child Care Program compliance requirements, etc.
Report Format:
We will meet with City Management to review report formats. Any report format changes will
be made in conjunction with approval from the City’s management.
Work Plans:
The detailed work plans will be designed to efficiently and effectively address the audit
requirements of the City in accordance with generally accepted auditing standards, to
perform the audit of the City’s financial records in a timely manner with minimal disruptions to
office operations, and to meet the City's timeline.
9.
10.
11.
24
ba BADAWI &ASSOCIATES
CLw' ir ild public accoun' an ^ •
Technical ProposalCity of La Quinta
12.Adjusting Journal Entries:
We will discuss and explain proposed audit adjusting entries with the City’s designated
Finance Department personnel prior to recording. Audit adjusting entries will be provided in a
format showing the lowest level of posting detail needed for data entry on the City’s general
ledger system.
Listing of Schedules and Tables (anticipated to be prepared bv the Citvl:
Based on preliminary inquiries made with management and City staff and review of
documents, we will tailor a list of schedules, tables, and other reconciliations required for the
audit. We will take into account as much as possible reconciliations already prepared by the
City for day to day operations and reporting, as well as any reports that are system
generated to limit the need for additional City staff hours.
The following is a listing of significant reconciliations that we would normally expect the City
to provide to us in assisting us in conducting our fieldwork.
13.
¨ Trial Balance
• CAFR and Account Roll Up Schedule
• Budget to Actual Reports
¨ Bank Reconciliations
• Listing of manually prepared journal
entries posted
• Summary of Investments held by the City
• Capital Asset Schedules
• Long Term Debt Schedules
• Debt amortization schedules &
Calculations of deferred amounts
• Calculations of any debt covenants
amounts or percentages
• Schedule of Operating Leases
• Schedule of Expenditures of Federal
Awards
* Analysis of Deferred Inflows of
Resources an Deferred Outflows of
Resources
Reconciliation of Receivables to
subsidiary ledgers
Calculations for estimate of allowance for
uncollectible accounts
Loans Receivable Schedules
Reconciliation of Significant Revenue
Accounts
Utility billing Registers and Fee
schedules
Compensated Absences and Early
Retirement Obligation Schedules and
Copies of Related Policies
Claims Payable schedules
Pension and OPEB Roll Fonward &
Supporting Schedules
GASB 54 Fund Balance Roll Forward
Schedule
Interfund Transaction Schedules
< BADAWI&ASSOCIATES
nnn Cl • I '.DHoOLlC ACCOUN AN '
t
25
City of La Quinta Technical Proposal
14. Computer Software:
The firm maintains a variety of soft\ware packages in the audit and financial statement
compilation process, which include MS Office (Word, Excel, etc ), Prosystem fx Engagement,
PPC Checkpoint and Checkpoint Tools, and Single Audit SMART Tool. Our IT. Specialist
also has the ability to run reports using IDEA (data analysis software).
Our audit software enables us to link our audit trial balance to the financial statements, for
efficient financial statement compilation. It also allows us to create various analytical reports
easily (e.g. year to year comparisons, budget to actual comparisons, trend analysis, ratio
analysis, etc.).
Our research tools are always kept up to date to ensure compliance with accounting and
auditing standards, and are also a resource for us to provide guidance to our clients.
We also use Prosystem electronic portal, which allows our clients to easily upload
requested audit schedules and testing selections. The portal is very helpful in the
audit process as it reduces duplicated audit requests, and allows our engagement
team to review uploaded schedules prior to beginning audit fieldwork.
26
< BADAWl&ASSOCIATES
nnn CLRiir ILL) PUBLIC ACCOUNTANTS
Technical ProposalCity of La Quinta
Audit Schedule
2017
Period Audit Tasks
Award of Contract
Interim Audit Procedures:
March - Planning and Administration
- Review and obtain copies of key w ork papers of prior audit firm.
' Entrance conference w rth City Management to discuss audit approach,
timing, assistance, and issues
' Review and evaluate the City's accounting and financial reporting. Prepare
an overall memo of recommendations, potential issues, and suggestions for
improvements.
*■ Prepare overall memo to City confirming audit procedures, timing, and
assistance.
* Prepare detailed audit work plan and audit programs, audit budget and
staffing schedule, and list of schedules to be prepared by City staff, and
provide it to City Management.
April - June - Internal Control Evaluation
' Meeting w ith key Finance Division personnel.
* Obtain and document understanding of key internal control systems through
walk-throughs, interviews of staff, and review of supporting
General ledger system.
Budgeting system.
Revenue, utility billing, accounts receivable, and cash collections.
F\jrchasing, expenditures, accounts payable, and cash disbursements.
Payroll-
Federal Financial Assistance.
Other systems-
* Identify control risks.
*■ Evaluate rr control environment-
* Perform testing of the internal control system and evaluate the
effectiveness of the City’s systems. Select large dollar and random
samples of transactions in key operating systems. Sample size to meet
required level for determined degree of risk. Review supporting
documentation of selected transactions, evaluate adequacy of support and
approvals, and conclude on degree of adherence to accuracy and
“ Conduct fraud assessment procedures.
* Assess degree of risk for material misstatement.
* FYovide to the City’s management a memo concerning management letter
points and identify issues, if any.
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City of La Quinta
2017
Period Audit Tasks
April - June
• Other Tasks
Review minutes of City Council meetings and other key committees.
” Preliminary testing,verify and validate account balances by reviewing supporting
documentation including invoices, vouchers, council resolutions, minutes, and other
documents, as required.
* Preliminary Single Audit and other compliance testing
* Coordinate with City staff and prepare of all appropriate confirmation requests
including:
Bank accounts.
Investment pool accounts.
Accounts receivable.
Federal grants.
Revenue from governmental agencies.
Bond and other debts.
Pension plan.
Attorney letters.
Others, as required.
* Provide City with audit plan and list of year end audit schedules.
nn Hold progress conference with City Management.
* Hold exit conference with City Management.
October n Final Field work
Entrance conference with City Management.
Follow-up on all outstanding confirmations.
Verify and validate account balances by reviewing supporting documentation
including invoices, vouchers, council resolutions, minutes, and other documents, as
required.
Perform analytical review of revenue and expenditures. Determine reason for
material differences between budget and actual.
Perform a search for unrecorded liabilities by reviewing disbursements subsequent
to June 30, testing terms of contractual obligations, and interviewing City staff.
Perform review of subsequent events by discussions with City Management and
update all minutes of City Council and key committees.
- Single Audit Compliance
* Entrance conference with City Management
* Obtain Federal Financial Assistance Schedule
' Determine grants to be considered as major programs including clusters
* Perform audit tests of major grant programs and compliance with Federal Law and
Regulations.
* Review grant documents, select sufficient number of transactions to test for
compliance of Federal Requirements.
Coordinal Single Audit efforts with the Financial Audit efforts.
* Communicate findings to City Management
^ Other Compliance
< BADAWI&ASSOCIATES
nnn CLR ‘ !| iLD PUDL'C ACCOUN i AN 1S
28
City of La Quinta
Audit Schedule. Continued
2017
Audit TasksPeriod
November n Audit Reports
' Prepare drafts of the City's financial statements
’ Prepare draft of Single Audit Reports concerning internal control structure,
compliance with laws and regulations, and administering of federal finandal
assistance programs, (if required)
’ Prepare other reports as required.
Provide drafts of reports to City Management for review.
^ Provide revised final drafts of all required reports to the City for approval
• Final Audit Reports, Financial Statements, and Single Audit Reports delivered.December 10, 2017
29i _ _ ,► BADAWI& ASSOCIATESi
CL« I! Ml D PUliLtC ACCOUN IAN'S
City of La Quinta
Discussion of
Relevant
Accounting
Issues
identification of Anticipated Potential Audit Problems
We do not anticipate that there will be any audit problems at the City. However, the following are some
areas that we will carefully investigate and monitor during our audit procedures:
Financial Reporting:
Review and evaluate that the City’s Annual Financial Reports are in compliance with
current reporting and disclosures requirements issued by the GASB and GFOA.
Review Annual Financial Reports for financial reporting conformance awards issued by
CSMFO and GFOA.
Review and evaluate degree of compliance with the various GASBs in effect.
Review degree of compliance with infrastructure obligations and regulatory provisions.
Internal Control Structure;
Review and evaluate the City’s internal control functions and ascertain compliance with
proper internal control philosophies.
Review computer system processes and controls and evaluate adequacy of the control
environment.
o
o
o
o
o
o
Several new GASB pronouncements will become effective over the time period of this proposal. As
such, specific attention will be provided to determine the proper implementation of these new
pronouncements. A list of known new pronouncements with implementation dates that fall within this
proposal period are as follows:
2017
Statement 74 - Financial Reporting for Postemployment Benefit Plans Other Than Pension
Plans
Statement 77 - Tax Abatement Disclosures
Statement 78 - Pensions Provided through Certain Multiple-Employer Defined Benefit Pension
Plans
Statement 80 - Blending Requirements for Certain Component Units
Statement 82 - Pension Issues - an amendment of GASB Statements No. 67, No. 68, and No.
73
2018
Statement 75 - Accounting and Financial Reporting for Postemployment Benefits Other Than
Pension
Statement 81 - Irrevocable Split - Interest Agreements
2019
Statement 83 - Certain Asset Retirement Obligations
2020
Statement 84 - Fiduciary Activities
30J► BADAWl&ASSOCIATES
CtH- I i’PUBl-lC ACCOUN! ANIS
i
City of La Quinta
A client relationship with the City will be of great value to our Firm and we welcome the opportunity to
develop a long-term relationship with the City. We are committed to;
Conclusion
Rendering the highest standard of service.
Developing a long-term working relationship dedicated to meeting the needs of the City.
Assisting the City in operational issues.
Producing a quality end-product.
We have the technical qualifications and experience to provide the level of service desired and
expected by the City and stand ready to provide our knowledge and experience for the benefit of your
organization.
We would like to express our appreciation to the City and to its Staff for allowing us the opportunity to
submit a proposal to perform professional auditing services. We are available, at your convenience, to
discuss any aspects of our proposal.
Thank you for allowing us to present our Firm to you.
*****************
314
> BADAWI &ASSOCIATESi
' ^ ' If lD '^CCOU''^! 6N ^5:
City of La Quinta
ReferencesAppendix A
1) City of Barstow
• Scope of Work: Comprehensive Annual Financial Report, Single Audit, Gann Limit, SAS 114,
Barstow Fire Protection District, Odessa Water District
• Engagement Partner: Ahmed Badawi
• Address: 220 E. Mountain View Street, Ste. A, Barstow, CA 92311
• Principal Contact:
Mrs. Cindy Prothro
Finance Director
Phone: (760)255-5115
CDrothro@baretowca.ora
2) City of Buena Park
• Scope of Work: Comprehensive Annual Financial Report, Single Audit, Gann Limit, SAS 114, Buena
Park Foundation
¨ Engagement Partner: Ahmed Badawi
• Address: 6650 Beach Boulevard, 1®’ Floor, Buena Park, CA 90622
• Principal Contact:
Mr, Sung Hyun
Finance Director
Phone: (714)562-3713
shvun@buenapark.com
3) City of Calimesa
• Scope of Work: Basic Financial Statements. Gann Limit, SAS 114
• Engagement Partner: Ahmed Badawi
• Address: 908 Park Avenue, Calimesa, CA 92320
• Principal Contact:
Ms. Bonnie Johnson
City Manager
Phone: (909)795.9801
biohnson@citvofcalimesa.net
4) City of San Mateo
• Scope of Work: Comprehensive Annual Financial Report, Gann Limit, SAS114, Measure A (San
Mateo County), Due Diligence Reviews for the RDA Successor Agency
• Engagement Partner: Ahmed Badawi
• Address: 330 W 20'^ Avenue, San Mateo, CA 94403
• Principal Contact:
Mr. Drew Corbett
Director of Finance
Phone: (650)522-7102
dcorbett@citvofsanmateo.orQ
5) City of Newark
• Scope of Work: Comprehensive Annual Financial Report, Single Audit, Gann Limit, SAS114, Utility
Users Tax, Vehicle Registration Fee Audit (Alameda County), Measure B (Alameda County),
Transportation Development Act, Newark Betterment Corporation Audit, Newark Betterment
Corporation 990 Tax Return, Due Diligence Reviews for the RDA Successor Agency
• Engagement Partner: Ahmed Badawi
• Address: 37101 Newark Blvd, Newark, CA 94560
• Principal Contact:
Mrs. Susie Woodstock
Director of Administrative Services
Phone: (510)578^804
Fax; (510)578-4358
susie.woodstock@newark.orQ
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CLW I ilD PUliLiC ACCOUNI AN IS
City of La Quinta
6) City of East Palo Alto
• Scope of Work; Comprehensive Annual Financial Report, Single Audit, Gann Limit, SAS114.
Measure C, Measure A Report (San Mateo County),
• Engagement Partner: Ahmed Badawi
¨ Address: 2415 University Avenue, East Palo Alto, CA 94303
• Principal Contact:
Mrs. Brenda Olwin
Finance Director
Phone: (650) 853-3122
bolwin@citvofeDa.orQ
7) City of Berkeley
• Scope of Work: Comprehensive Annua! Financial Report, Gann Limit. SAS114, Measure B (Alameda
County), Vehicle Registration Fee Audit (Alameda County), Due Diligence Reviews for the RDA
Successor Agency
• Engagement Partner; Ahmed Badawi
¨ Principal Contact;
Mr. Henry Oyekanmi
Director of Finance
(510)981-7300
hovekanmi@ci.ber1«:elev.ca.us
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CLHM r_DPULV_'C ACCOUNiANlS