Chavan & Associates LLP - ProposalPROPOSAL FOR CONDUCTING
THE ANNUAL INDEPENDENT AUDIT
OF THE
CITY OF LA QUINTA
Submitted March 1, 2017
Chavan & Associates, LLP
Certified Public Accountants
1475 Saratoga Ave., Suite 180
San Jose, CA 95129
Phone: (408) 217-8749
Fax: (408) 872-4159
E-mail: sheldon@cnallp.com
Contact: Sheldon Chavan, Partner
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PageTitle
Transmittal Letter,I
1A. Firm Qualifications and Experience
Contractor Identification and Introduction
Firm Size, Staff Size, Location and Staffing
Range of Services
Contract Terminations and Affirmation Concerning Substandard Audit Work.
Equal Opportunity Employer
Independence
Subcontract
Business Licenses
License to Practice in California
Insurance
Quality Control Review
Discussion of Relevant Accounting Issues & GASB 68
Tax Resource
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5B. Specific Audit Approach
Phase I
Phase II
Phase III
Compliance and Program Specific Auditing
Recommendations for Improved Operations
Irregularities and Illegal Acts
Control Risk Assessment
Analytical Procedures
Identification of Potential Audit Problems
Resources Available for Standards Interpretations
Summary of Audit Phases
Summary of Team Assignments
Summary of Roles and Responsibilities
Summary of Staff Hours by Phase
Summary Timeline
Audit Scope
C. Additional Data/Proposal Exceptions
Current Client List
Technology in the Audit
Proposal Exceptions
D. Partner, Supervisory, and Staff Qualifications and Resumes
Sheldon Chavan, Engagement Partner
Jeff Ira, Partner
Paul Pham, Manager
Daniel Garaycochea, Senior Auditor
Matthew Ojeda, Professional Staff
Jennie Tran, Professional Staff
Professional Education and Training
E. References and Similar Engagements
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Attachments:
Attachment A - Peer Review Report
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Chavan & Associates, UP
Certified Public Accountants
March 1, 2017
Finance Department
City of La Quinta
78495 Calle Tampico
La Quinta, CA 92253
We are pleased to have this opportunity to submit our proposal to provide auditing services for the
City of La Quinta {the "City"). Our understanding of the work outlined in the request for proposal is
that we will audit the financial statements of the governmental activities, business-type activities,
component units, each major fund, and aggregate remaining fund information of the City for fiscal
years ending June 30, 2017 through 2021.
Our audits will be performed in accordance with auditing standards generally accepted in the
United States of America, the standards set forth for financial audits in the United States General
Accounting Office's (GAO) Government Auditing Standards, the provisions of the Single Audit Act
and 0MB Code of Federal Regulation Uniform Administrative Requirements, and relevant GASB
statements. We will also apply the necessary procedures to prepare the reports as requested in
the RFP.
As a result of our audit, we will express an opinion on the fair presentation of the basic financial
statements of the City and other entities and grants as listed in the RFP in accordance with GAAP.
We will also issue a report on the City's internal controls over financial reporting, the City's
compliance with applicable laws and regulations, the City's internal control structure used in
administering federal financial assistance programs and the City's compliance with general and
specific requirements related to major and non-major federal financial assistance programs in
accordance with Government Auditing Standards and Uniform Compliance.
Throughout the contract period, we will provide consultation on accounting and compliance issues
and attend City meetings to discuss the audit and management comments. It is our commitment
to the City that we will complete the work within the agreed time frame.
We are confident Chavan & Associates LLP ("C&A") is the best-qualified firm to serve as your
independent auditors. A brief list of reasons includes;
• We specialize in the audits of local governments.
• Sheldon Chavan, Managing Partner, will supervise and run the audit in the field and has
been auditing local governments and non-profit organizations for 19 years.
• Our Managing Partner has performed similar audits for the City of Rocklin, the City of
Suisun, and the City of Saratoga.
• Our firm and key professionals are properly licensed to practice in the state of California.
Page Ii 1475 Saratoga Ave, Suite 180, San Jose, CA 95129
Tel: 408-217-8749 • E-Fax: 408-872-4159
infor^cnatlp.com • www.cnallp.com
Chavan & Associates, LLP
Certified Public Accountants
• Our service will be dependable, reliable and timely.
• We will be sensitive to your workload. We understand you and your staff must keep up with
your current work as well as deal with the audit.
• We are available twelve months of the year to serve our audit clients. You are important to
our firm and we promise a high level of involvement and enthusiasm at all levels.
We are secure in our belief that our firm is the best qualified to meet your needs. Once you have
examined our proposal and contacted our references, we feel you will agree.
Staffing for the City's audit will include 1 Engagement Partner, 1 Associate Partner, 1 Manager, 1
Senior Auditor, 1 Professional Staff and 1 Administrative Staff.
Sheldon Chavan (1475 Saratoga Ave, Suite 180, San Jose, CA 95129, 650-346-1329,
Sheldon@cnallp.com) is the partner authorized to sign and obligate the firm contractually and
represent the firm. He is empowered to submit the bid and authorized to sign a contract with the
City. This proposal is a firm and irrevocable offer until for 90 days.
We look forward to being of service to you.
Very truly yours.
C U/P
Sheldon Chavan, C.P.A., Partner
Chavan & Associates, LLP
Page I ii 1475 Saratoga Ave, Suite 180, San Jose, CA 95129
Tel: 408-217-8749 • E-Fax: 408-872-4159
info(Scnallp.coni • www.cnallp.com
Section A
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Section A - Firm Qualifications and Experience
Proposalfor Auditing Services
Contractor Identification and Introduction
Chavan & Associates, LLP (C&A)
1475 Saratoga Ave, Suite 180, San Jose, CA 95129
408-217-8749
408-872-4159
Sheldon (Scnallp.com
202009218003
27-0630496
Sheldon Chavan, CPA, Partner
Our Managing and Engagement Partner, Sheldon Chavan, has performed audits under Government
Auditing Standards, the Single Audit Act and the State Controller's Office Minimum Audit Requirements
since 1998. In August of 2009, Sheldon established C&A as a limited liability partnership specializing in
local government auditing and consulting. Sheldon has audited and prepared Comprehensive Annual
Financial Reports (CAFRs) and basic financial statements as required by the Government Finance
Officers Association (GFOA) and the Governmental Accounting Standards Board (GASB) for cities, fire
districts, water districts, sanitation districts, JPAs and other types of special districts. He has also been a
reviewer of CAFRs for the GFOA. Most recently, C&A prepared or reviewed the CAFRs of the Town of
Los Gatos, the City of Saratoga, the City of Oroville, City of Suisun, City of Pacific Grove, and the Los Altos
School District for the year ending June 30, 2016. Our goal at C&A is to provide premium audit services
at a reasonable fee. We believe that continuous partner involvement helps us achieve our goal, which is
why our partners are constantly in the field. Ultimately, minimizing on-the-
job training allows us to focus exclusively on servicing our clients.
After starting the firm with only 9 clients in 2009, we currently have 83
government, nonprofit and grant clients, 40 of which were required to have a
single audit (0MB Subpart F) in 2015-16. Our firm's experience includes
numerous audits under state and federal compliance audit guides, including
the Minimum Audit Requirements and Reporting Guidelines for special districts as required by the State
Controller's Office. What makes us unique from other audit firms is that we eliminate "on-the-job"
training through intensive in-house training, audit planning, and by having partners in the field
throughout the entire engagement (not just "spot-checking"). The daily interaction with our
Engagement Partner has been invaluable to our clients as it provides the opportunity for immediate
feedback and the chance to ask questions related to accounting, account coding, grant requirements,
CAFR requirements, budgeting, and much more. Auditing Is the main focus of our practice and we are
available to start as early as March 15th, however our calendar is flexible. Having an early start date has
great returns for our clients in that control deficiencies can be corrected before reports have been
submitted and the year has been closed.
C&A is also a member of the AlCPA's Government Audit Quality Center which promotes the importance
of quality governmental audits and the value of such audits to purchasers of governmental audit
services. GAQC is a voluntary membership center for CPA firms and state audit organizations that
perform governmental audits.
Firm Size, Staff Size, Location and Staffing
We also have ten professional, full-time staff in addition to our two partners and one administrative
person that will be available to assist as needed throughout the engagement. As the Managing Partner,
Company Name:
Address:
Office:
Fax:
E-mail:
CA File Number:
FEIN:
Authorized to Sign:
Single Audit
Experience
m Chavan & Associates, LLP Page I
Section A * Firm Qualifications and Experience
Proposal for Auditing Services
Sheldon will perform the work directly with assistance from other professional
staff as needed. Our central office is located in San Jose, CA. Staffing for the
City's audit will include the following professionals {audit experience):
Staffing
Jeff ira. Associate Partner (35 yrs.)
Daniel Garaycochea, Senior (3 yrs.)
Jennie Tran, Prof. Staff (1 yr.)
Sheldon Chavan, Engagement Partner (19 yrs.)
Paul Pham, Manager (8 yrs.)
Matthew Ojeda, Prof. Staff (2 yrs.)
One of the professional staff could change from year to year. The City will be notified of any staff
changes prior to field work. The Engagement Partner will be the same during each year of the
engagement. See our summary of audit phases by segment on pages 8 and 9 for staff responsibilities.
Range of Services
The following summarizes the range of services we provide:
Number Mam Contractor
Prequalification Nonprofit
Service*Tax
iment
AndofPercent by
Entity AudH^AccountingQlentsEnti^Type
3K OKOKLocal Education Agencies
Charter Schools
Non-profit Oi^anizations
Cities and Towns
Special Districts
Privately Held
36K 97K30
88KOK100%OK810%
OK 81K0%19%94%16
0%OK100%0%6 8%
OK OK6%16 19%94%
OK OK0%7%100%6
EAAP
Audit
Single
Audit
Bond
Audit
GAS GAGAS
Audit OtherAudit
130%45%75%48%24%Percent by Service Type 96%
Contract Terminations and Affirmation Concerning Substandard Audit Work
C&A and all assigned personnel do not have any record of substandard work, contract failures,
outstanding claims, litigation, investigations, or other unsatisfactory performance issues against us or
pending with the State Board of Accountancy or any other entity, in addition, we have not had any
federal or state desk review or field reviews of our audits. C&A has no record of lost clients or contract
failures.
Equal Opportunity Employer
C&A is an equal opportunity employer and is in compliance with the Civil Rights Act of 1964, the State
Fair Employment Practice Act, and all applicable federal and state laws and regulations relating to
equality.
Independence
C&A is independent of the City and all of its component units as defined by generally accepted auditing
standards and the U.S. GAO's Government Auditing Standards. In all matters relating to the audit work,
the audit organization and individual auditors, whether government or public, should be free from
m. Chavan & Associates, LLP Page 2
Section A - Firm Qualifications and Experience
Proposal for Auditing Services
personal and external impairments to independence, should be fiscally independent, and should
maintain an independent attitude and appearance.
C&A did not have any professional relationships involving the City of La Quinta, or any of its agencies
and component units, for the past five (5) years that would cause a conflict of interest relative to the
scope of services identified in the request for proposal.
Subcontractor
C&A will not be engaged with any subcontractors during this engagement.
Business Licenses
C&A will obtain and maintain a valid business license with the City throughout the duration of the
contract.
License to Practice in the State of California
C&A and all key professionals are properly licensed to practice as certified public accountants in the
State of California and do not have any record of substandard work or unsatisfactory performance
pending with the State Board of Accountancy.
Insurance
C&A maintains the following insurance:
• Commercial General Liability Insurance (bodily injury and property damage) is $4,000,000 per
occurrence. The carrier is Hartford Insurance Company.
• Automobile Bodily Injury and Property damage liability insurance is $2,000,000 per occurrence. The
carrier is Hartford Insurance Company.
• Professional Liability Insurance carrier is Philadelphia Insurance Company. The per claim/aggregate
limit of the liability is $3,000,000.
• Workers Compensation Insurance carrier is Twin City Insurance Company. The per claim/aggregate
limit of the liability is $1,000,000.
Quality Control Review
We are enrolled in the AlCPA quality control peer review program. Our most recent peer review was
performed and submitted by Chaing, Hammon and Co. on June 30, 2014 and included the audits
completed for the June 30, 2013 fiscal year and December 31, 2013 calendar
year. We passed our peer review without exception. See Attachment A for a
copy of our most recently available peer review report from June 30, 2014.
C&A has an exceptional record of quality control. Our audits substantially
complied with auditing standards generally accepted in the United States of
America and the standards for financial and compliance audits contained in the
U.S. General Accounting Office's Standards for Audits of Governmental Agencies,
Peer
Review
PS Chavan & Associates, LLP Page 3
Section A - Firm Qualifications and Experience
Proposal for Auditing Services
Programs, Activities, and Functions; issued by the U.S. General Accounting Office; the provisions of the
Single Audit Act Amendments of 1996; and the provisions of OMB's Uniform Compliance.
Discussion of Relevant Accounting Issues & GASB 68
The Governmental Accounting Standards Board (GASB) continues to issue new statements in an effort to
make financial information accounted for, and reported by, local governments more reliable. Often, the
statements issued by GASB are confusing and difficult to apply. Therefore, it is our goal to keep our
clients informed about upcoming standards and how they may affect their future. Our technical
expertise and guidance in the implementation and interpretation of GASB statements will be available
throughout the year. We offer inclusive consultation throughout the term of our contract. We also
offer in-house training via internally developed seminars. For example, we have given presentations
and training on compliance requirements for specific grants and the key controls needed to meet those
requirements. Generally these sessions provide about 8 hours of training, in addition to year-round
consultation, and are included in the audit. Two training sessions per year are included in our fee.
In addition, we will send periodic e-mails and newsletters when significant new accounting
pronouncements are issued, at the time they are issued. The most important factors we have discussed
include: The potential impact of new pronouncements, the due date and the changes in the reporting
presentation, planning the City should do to ensure it is prepared and the assistance we can provide to
ensure compliance. We also prepare template note disclosures and update our template financial
statements to meet the reporting standards.
In relation to GASB 68, we have prepared a template workbook for all different plan types and have
consulted with GASB, CalPERS and actuarial third parties, such as Bartel, to ensure the accuracy of the
methodology and calculations included in our workbook. We can take the plan data from a cost sharing
plan, input the basic information into our workbook and all the calculations, disclosures, journal entries
and reporting balances will automatically populate. We also utilize this workbook during our audit to
assist us with testing census data. This workbook can also be utilized by City staff if the City so desired.
This is a great tool to ensure the City meets the accounting reporting requirements for all retirement
plans included in GASB 68.
We offer accounting and reporting guidance year round in support of GASB 68 and any other new
accounting standards that may impact our clients. We include all relevant new standards in the CAFR
note disclosures each year as well.
Tax Resource
Although our primary focus is year-round auditing, Chavan & Associates, LLP has over 20 years of tax
experience that will be available to the City. CStA's experience includes returns provided for
governmental, municipal, non-profit, individual, corporate, and payroll taxes. Our partners, managers,
and staff will be fully available and capable of answering and addressing any concerns the City may have
in regards to tax matters.
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Section b
Specific Audit Approach
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Section B - Specific Audit Approach
Proposal for Auditing Services
The C&A audit approach begins with an entrance conference between Sheldon Chavan and
management to gather information for risk assessment and audit
planning. Upon the conclusion of the entrance conference, Sheldon will
plan and schedule C&A's three phase audit approach and prepare a list of
items to be provided for Phase I of the audit. Significant aspects of each
phase are outlined as follows;
Three Phase Audit
Approach
Phase I - Planning and Risk Assessment
This phase is designed to evaluate your operating and accounting procedures and will provide the basis
for a significant portion of our letter to management. The results of our work during this phase will
determine our audit approach for significant accounts and compliance.
At the conclusion of this phase, we intend to provide the City with a list detailing the information that
will be needed in order to facilitate the completion of the audit in a timely manner. Having all items on
the list are available prior to the beginning of Phase il will allow us to complete the audit within the
allotted time frame or earlier. We will also begin the testing of federal compliance for major programs
during this phase and discuss the impact of new GASB's, such as GASB 82, with management. During
our entrance conference, we plan to discuss the plans offered by the City and identify the reporting
requirements, information available, and the remaining steps required for the City to implement these
pronouncements.
We plan the audit and obtain our understanding of the Internal control structure, control environment,
and accounting system through:
Inquiries of appropriate management and staff personnel.
Inspection of the City's documents, records, budget and related
materials, organizational charts, manuals and programs.
Observation of the Cit/s activities and operations to
corroborate the results of inquiries.
Testing of the controls to determine they are operating as
planned.
Performance of preliminary analytical review on interim financials. The analytical review
entails comparing similar information for the same time frame from the prior year and also
comparing current year-to-date information to the budget to determine areas that may need
additional attention during Phase II.
Review and evaluation of the City's financial and other management information system
controls and procedures. Our staff has gained invaluable experience with systems such as HTE,
MOM, Springbrook, Pentamation, QuickBooks, Digital Schools, SunGuard, Escape, FUND$,
CECC, SACS, Financial 2000, SASi, Quicken, Edusoft, Minisoft, Infinite Campus, Aeries, Power
School, Quick School, Blue Bear, Genesis, as well as many others. It is our goal to maximize the
usage of your computer system during the audit.
Internal Controls
Documentation
This phase constitutes approximately 36% of all non-clerical hours of the engagement and may be
combined with Phase II If desired. At the completion of Phase I, an exit conference will be held to
discuss findings and recommendations and prepare for Phase II.
Chavan & Associates, LLP Page 5
Section B < Specific Audit Approach
Proposal for Auditing Services
Phase II n Substantive Audit Procedures and Compliance
This phase is designed to complete our substantive and compliance audit procedures on the accounts of
the City. The approach for Phase II will be based on the results of Phase I. Audit programs will be
tailored for your City's needs. This work will begin after the closing of your books.
Sample size and selection is based on our assessment of risk and planned or actual deviations. A typical
sample size will be 25 to 60 items and be randomly selected. Our sampling methods vary depending
on the type of tests we perform. Sample selection for compliance work
will be based on the respective compliance and audit guides, KC, our
experience and judgment, and other various sources. We use Knowledge
Coach (KC) audit programs by Commerce Clearing House (CCH) to assist
in our risk determination and sampling selection. We also use
ProSystems fx Engagement paperless audit, Microsoft Excel, and
Microsoft Word on laptops to perform the audit. Generally, we prefer
information provided in electronic format, however we use production scanners in the office and
portable scanners in the field for information that is unavailable in
electronic format.
Analytical procedures during Phase II involve comparing current data to
prior year and budget data, calculating dollar and percentage variances
and investigating differences. We also analyze trends and relationships
of the various financial statement components and ratios.
Laws and regulations subject to audit will be determined based on
inquiry and familiarity we gain with the City and with state and federal compliance requirements. We
also attend seminars and webinars related to state and federal regulations to keep abreast of new
requirements.
Phase il will take approximately 36% of the engagement hours. At this time, an exit conference will be
held to discuss findings and recommendations, the status of new accounting principles and reporting
requirements, and prepare for Phase III.
Phase III - Financial Statement Preparation and Review
This phase consists of preparing or assisting with the preparation of your financial statements (CAFR), as
required In the RFP, in conformity with accounting principles generally accepted In the United States of
America. We will also prepare all other financial and compliance reports required of us as listed on the
RFP. The required reports and management letter will be submitted to management as noted in the
timeline in the RFP, unless otherwise agreed, We will also ensure that new GASB pronouncements
identified in phase I and II have been appropriately accounted for and disclosed in the financial
statements and that the impact of these statements is sufficiently presented in our audit reports. The
most efficient way to ensure we meet the reporting deadlines is to have the audited trial balance and
final adjustment completed by the last day of field work, and to have a draft of the CAFR ready by the
first day of field work. This, in combination of the automation provided by Prosystems engagement will
reduce the lag time from the completion of field-work and report issuance.
Our reporting process is automated through our audit software. Once we obtain the City's trial balance
in electronic format, we can import that into our system, which will automatically code and update all
financial statements and most note disclosures in the financial statements and notes. We can also auto
link tables, charts and other documents the City would like to generate. All of this information can be
Sampling
Methods
r
Analytical
Procedures & Laws
and Regulations
Chavan & Associates, LLP Page 6
Section B - Specific Audit Approach
Proposal for Auditing Services
shared through our online secure lockbox/fileshare website at www.cnallp.com. All agreed upon
adjustments will be linked in our audit software. This greatly reduces the report preparation time and
involvement of City staff and creates more opportunity for review of Information systems, internal
controls and management recommendations. At the end of this phase we will provide a summary of
audit adjustments and uncorrected misstatements (passed adjustments).
We anticipate that Phase III will comprise approximately 28% of the engagement hours, including the
majority of the clerical hours. The timing of each phase of the audit is estimated based on the
assumption that the City will meet their close schedule and responsibilities as noted in the request for
proposal.
Please note that we generally hold entrance conferences at the beginning of Phase I and II and exit
conferences at the end of Phase I, II and III. However, we are available to meet with the City at any
time.
Compliance and Program Specific Auditing
Included In all phases are specific procedures required to complete individual compliance items.
Analytic and sampling procedures generally follow those described in the preceding phase, but
modified, when needed, to meet specific guidelines of the programs audited.
Recommendations for Improved Operations
We feel we have accumulated valuable knowledge in accounting and auditing which has allowed us to
offer a wide range of specific recommendations to increase the efficiency and effectiveness of our audit
clients. With our background, we can provide services that may be very beneficial to you presently and
in the future. As our client, you can look to us for informed support year-round in all areas of interest
or concern. In the course of our engagement with the City, we will provide prompt, knowledgeable
answers to your questions regarding all aspects of accounting, finance, management, and operations.
It is our policy to discuss discrepancies and recommendations with City staff directly involved and then
with management, as necessary. If an item warrants inclusion in the report as a finding, we will obtain
management's responses to each finding. All responses will be reviewed with management and
relevant committees before they are presented to the City Council.
Irregularities and Illegal Acts
We will make an immediate, written report of all irregularities and illegal acts or indications of illegal
acts of which we become aware to the City Manager, City Attorney, Treasurer and Audit Committee
Chair.
Control Risk Assessment
As part of our audit approach, we use KC forms, narratives, questionnaires and summary schedules to
gain an understanding of the control environment and assess its overall effectiveness. This helps
identify the types of potential misstatements and factors that affect the risk of material misstatement
and their impact on the audit plan.
Analytical Procedures
Analytical procedures are used at three points of time during our audit; planning, substantive testing,
and final review of the completed financial statements. Analytical procedures are used to obtain
are
us
Chavan & Associates, LLP Page 7
Section B - Specific Audit Approach
Proposal for Auditing Services
knowledge of conditions and events, to indicate the presence of possible misstatements, to provide
substantive evidence of balances and to assess the financial condition of the City.
As we obtain knowledge about the City, we will be able to direct our attention to areas requiring greater
audit emphasis as well as provide substantive evidence in support of recorded account balances.
Identification of Potential Audit Problems
Each year we approach the audit objectively and use a risk based approach to anticipate any potential
audit problems. If anything were to come to our attention during the course of the audit, it would be
reported to the proper management level depending on the nature of the problem and as noted in the
RFP.
Resources Available for Standards Interpretations
In addition to the items published by GFOA, AlCPA, FASB, and GASB, we use RIA checkpoint and
Thompsons as our main online reference material. As our client, the City will have access to all our
resources.
Summary of Audit Phases (Generalized, Not All-Inclusive)
|L
Audit Phases
Phase I
iPhase I)
iPhase III
A
r
Internal Control Documentation & Testing
Management Points
Ma)or Program and Ma^or Funds
Exit Conference
Confirmations
FIrtal Ma)or Programs and Major Funds
Hnallze Audit Programs
TNal Balance and Leads
Substantive and Compliance Tests
Management Points
Inltlsl Audit Adjustments
Initial Report Preparation
Exit Conference
Rnalize T6 and Audit Adjustments
Firullze Management Points and Findings
Final Review of Audrt Files by Managers and
Partners
Prepare. Assist With or Review Conversion
Entries
Prepare Final Letters and CorreM>ondence
Prepare and Issue First Drafts of Audited
Financials, Compliance Reports and Opinions
Issue Final Audit Report
Final Exit Conference and Planning for Next Fiscal
Ybar
Council Meeting. As Necessary
Chavan <& Associates, LLP Page 8
Section B • Specific Audit Approach
Proposal for Auditing Services
Summary of Team Assignments (Not All-Inclusive, Senior and Manager May be Interchangeable)
Team Assignments
Phase I
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• WdrRInc Pepei Review
•Menetement PoM lle\ee>ii
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•QuAlItvConirel
•Audit Plennliit
•Audit Binder PrepereUoti
• Meier rwtf end Met« Pre«r*n<
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•Audit Pra|iemi
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• Uinlflcant Tremaclion Arcoe
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: •TDA/MTC
•ToemPlemUnf
•Teem Meelkifs
•Cenetpendene*
•Steff Support
•Mdermetion Technotofv Suppon
Phase II
m>» i t I
•OrertMHrvirw
•ReviMr AwSt Pbn
•Rpvidw Audit PiOBiemt
•Updele Teom Astignmentt
•Review Maior Fund^aior
Pfogram Del.
•ArtaFytitt
•Rdwew Workint pAperv
Management PoinispndAlf't
•Ouide Audit Team
•Entrance and Ut Conierencet
rTearrr nanmng
•Audit Under Revitur
•Working Paper Review
•Man^emenl Point Review
•CotKurring Partner Renew
•Qualitv Control
•PbrMrrv llpdaee
•Audit Binder Update
•Finalize Major Program and
MajorFund Determination.
•Update and Finabe Audit
Piograme
•Substantive Teeing lor
Signilkant Accounts
•CompRance Testing
•Guide and Monitor Sufi
•ConTirinalions
'Subetanrive TesNng
•Significant Tiansactlon Areas
(Cast), Investments, Capital
Assets, Long-term Debt,
Pensions. Fund Batance, Net
Positian, Revenue.
UpendHures)
Xompiaixe Testing
•Ski^ Audit lundemi
QuidacKe)
•TOA/MTC
•Team banning
•Team Meetings
•correspondence
•Staff Suppen
•Infoimalian Tectmotogy Support
•Confirmations
w
Phase III
VE) ('VJ|Et«<e-ll*ractner I \•rt<u Ahi
•Final Review & Sign-olT
•rinaliw Audit Ptan
•F Inalke Audit Programs
•Final Analytics
•Prepare CAfftand Review
Supporting Schedules
•Review all Other Reports
•Review and Finaliw all
Required Management
Letters andCocresportdence
•Exit Conferences, Committee
and Board Presentatiorts
•FInaNae Audit Binder
•Review Staff Working papers
•Review Staff Management
Points
•Review Reports
•Prepare Assigned Reports
•Review CAFR Prepared by
Engagement Partner
•Ftnallae Working Papers
•Finalize Managemertt Pomls
•Prepare Assigned Reports
•Assist with Report Review
•Final Audit Binder Review
•Final WorkingPaper Rewew
•Final Management Point
Review
•Concutrii^ Partner Review
•Quality Control
•CariBipoiKfencc
•Staff Support
•Information Technoiogv
Support
■Report Binding and Deliverv
Chavan & Associates, LLP Page 9
Section B - Specific Audit Approach
Proposal for Auditing Services
Summary of Roles and Responsibilities (Not All-Inclusive)
General Roles and Responsibilities
^ Phase III► Phase II► Phase I
Ik
C&ALLP
The Engagement Partner's focus will
be on overall reportir^ guidance
and working with City staff to
complete the reporting phase.
The Associate Partner will assist in
report prepartion and client
communication.
The Senior/Manager wrill review
workpapers, letters and reports,
and help maintain quality control.
The Senior Professional Staff will
focus on report preparation and
assisting the engagement partner
and guiding our staff.
The Professional Staff will act in a
support role during this phase.
C&A LLP
The Engagement Partner's focus will
include finalizing the audit
programs, substantive analytics, and
overseeirtg the audit.
The Associate Partner will provide
fieldwork support when necessary
and help maintain quality control.
The Senior/Manager will review
workpapers, letters and reports and
help maintain quality control.
The Senior Professional Staff will
focus on substantive tests for
significant accounts.
The Professional Staff will focus on
substantive tests for significant
accounts, federal compliance, and
other required audits.
C&ALLP
The Engagement Partner will be
responsible the overall planning,
scheduling, review and coordination
of Phase I.
The Associate Partner vrill provide
fieldwork support when necessary
and help maintain quality control.
The Senior/Manager will review
workpapers, letters and reports and
help maintain quality control.
The Senior Professional Staff will
focus on the more complex areas of
controls and support the
Engagement Partner.
The Professional Staff will focus on
detail of tests of controls over
financial, federal compliance and
other areas as needed
City Staff
During this phase. City staff will be
expected to provide a preliminary
balance sheet and revenues and
expenditures by fund, policies and
procedures for key controls, a
preliminary summary of federal
grants, the original budget, contact
information for departments and
confirmations, and generally
provide the information included In
the lists of items for interim. We
also plan to interview various staff
to document and test controls.
Testing controls will include
sampling for significant areas. Our
documentation of internal controls
will be done in person and via
interviews, unless otherwise
requested.
City Staff
We expect the City staff to review
and respond to all reports required
to complete the audit. We
anticipate the City will provide or
assist us in gathering information
needed for the CAFR and note
disclosures. Management will be
required to sign a representation
letter which will be provided by us.
Management will be required to
provide responses to any and all
recommendations and findings
included in the management letter.
Report preparation will be
completed as outlined in the RFP,
unless otherwise agreed prior to
Phase III of the audit.
City Staff
During this Phase, City staff will be
expected to provide the final
balance sheet and revenue
expenditures by fund and accounts
from the GL. We will prepare
leadsheets in our audit software,
but the City should have adequate
support for significant accounts.
We will perform a review of journal
entries at this time and again before
the final reports are issued, thus we
will need access to the City's Journal
entries. We will request reports for
major grant programs, certain City
programs, and business type
activities. We will also perform a
number of analytical procedures
which will require staff responses,
and this will be done in personin
most cases.
Chavan & Associates, LLP Page 10
Section B - Specific Audit Approach
Proposal for Auditing Services
Summary of Staff Hours by Phase
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Phases Total
HoursLevel of Staff I II HI
Engagement Partner 24 24 56 104
Associate Partner 2 2 4 8
Manager 48 48 16 112
Senior Staff 48 48 16 112
Professional Staff 48 48 36 132
Administrative Staff 4 4 8 16
"T9'4 I'M m 4sr
Summary Timeline
r
Segment Estimated Phase
Entrance Conference Mays,2017
Audit Planning C&A’s Office May 9,2017 I
Interim Ustof Items and Audit Plan (Usually 30 Days Prior to Interim)May 9, 2017
Interim Testing May 15,2017
Interim Exit Conference May 17,2017
Initial Ustof Findings and Recommendations May 17,2017 I
Preparatiwi and Mailing of Confirmation Letters ot 3rd Parties June 2017 II
Year-end Field Work Planning Meeting C8iA June 2017 11
Ustof Items Required by Client Year-end June 2017 II
Year-efKJ Field Work November 13,2017 II
ExitConference November 17,2017
Final Ustof Findings arKl Recommerwiations November 17,2017 II
Audit Adjustments November 17,2017 II
Draft Reports, Financials and Management Letters December S, 2017
Second Draft Reports, Financials and Management Letters December 11,2017 III
Final Reports, Financials and Management Letters December 18,2017 III
Final Exit Conference and Audit Committee Review December 18, 2017 III
Printed Reports and Letters January 5, 2018
Council, Cwnmittee & Public Presentations As Needed
Chavan & Associates, LLP Page 11
Section B - Specific Audit Approach
Proposal for Auditing Services
Audit Scope
We understand the scope of our services to be as follows:
C&A will perform an audit of all funds of the City of La Quinta. The audit will be conducted in
accordance with auditing standards generally accepted in the United States of America and
Government Auditing Standards, issued by the Comptroller of the United States. The City's
Comprehensive Annual Financial Report (CAFR) will be prepared by C&ALLP, except for the statistical
section, transmittal letter, organizational chart and MD&A. C&A will render their auditors' report on
the basic financial statements which will include both Government-Wide Financial Statements and
Fund Financial Statements. C&A will also apply limited audit procedures to Management's
Discussion and Analysis and required supplementary information pertaining to the General Fund
and each major fund of the City. We do provide template MD&A's with all the updated numbers
and tables for all yeas to be reported on. The City would only need to update the factors section
and some of the explanations of year over year changes.
A.
If applicable, C&A will perform a single audit on the expenditures of federal grants in accordance
with 0MB Uniform Compliance and render the appropriate audit reports on Internal Control over
Financial Reporting based upon the audit of the City's financial statements in accordance with
Government Auditing Standards and the appropriate reports on compliance with Requirements
Applicable to each Major Program, and Internal Control over Compliance in Accordance with 0MB
Uniform Compliance. The single audit report will include an appropriate schedule of expenditures of
federal awards, footnotes, findings and questioned costs, including reportable conditions and
material weaknesses, and follow up on prior audit findings where required.
B.
C&A shall issue a separate "management letter" for each audit that includes recommendations for
improvements in internal control, accounting procedures and other significant observations that are
considered to be non-reportable conditions. Management letters shall be addressed to the City
Council.
C.
C&A will provide 40 hours of consulting and training during each year of the engagement.D.
C&A will also provide agreed-upon procedures related to the City's GANN limit and prepare the
required report in compliance with Article XIIIB.
E.
C&A will provide communications required by SAS 114 and SAS 115.F.
C&A will be available to present and to discuss the draft and final annual financial statements and
results of operations with the City Council, City Staff, Audit Committee and other meetings as
needed throughout the year.
G.
We shall retain all working papers and reports at the auditor's expense for a minimum of seven (7)
years, unless the firm is notified in writing by the City of the need to extend the retention period.
The working papers are subject to review by federal and state agencies and other individuals
designated by the City. Additionally, we shall respond to the reasonable inquiries of successor
auditors and allow successor auditors to review working papers.
H.
Page 12Chavan & Associates, LLP
Section B - Specific Audit Approach
Proposal for Auditing Services
C&A will provide a timeline schedule of the annual audit each year.I.
C&A will provide a listing of requesting items at least 4 weeks prior to fieldwork.J.
C&A will provide assistance to meet GFOA program requirements, including responding to GFOA
comments.
K.
C&A will prepare and print all the reports as noted in the RFP, including tabbing and binding. We
will provide unbound reproductive masters of each report, bound copies and digital files in Adobe.
L.
Chavan <& Associates, LLP Page 13
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Additional Data/Proposal ExceptionsI
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Proposal for Auditing Services
Current Client List
3OlyolOrowllc
Ctyol Pacific Crow
Oly of Point Arena
Otyof AocUin
0(y of Saratoga
Town of Los Gatos
E 1
AnMopeSchool District
Burlirt^ma School Oisvict
CabrilloUnifiad School District
Cotab'ftohnart Park Unified School District
Dalano Union School District
Goldwi Valley Unified School District
Hillsborou^ Gly School District
Las UmlUs School District
Lassen View Union Elementary School District
Los Altos School OiSVict
Luther Burbank School District
MilibraeSchool District
Mountain ViawWhisman School District
Napa Valley Unified School District
Orchard Schod District
Pacifica School District
Porioia Valley School District
Red Bluff Union Elementary School Distnet
RosdandSchool District
Santa RosaOtySchools
San Bruno Park School District
San Carlos School District
San Lorenco Valley UniTiadSchool District
Scons Valley Unified School Kstrict
Sequoia Union High School Oisinn
Sonoma Valley Unified School District
South San Francisco Unified School Oisirict
Union School District
vyesi County Transportabon A^enev
WoodsideBemeneary School District
E ^ e
Credo Hifh School
Charter School of Morgan Hill
Mission PreparatorySchool
Orange County Censervafion Corps Charter School
Roseland Charto- School
San Jose Consw Corps Charter School
Stone Bridge Charter School
Wood and Star Chartd School
Chavan & Associates, LLP Page 14
Section C - Additional Data/Proposal Exceptions
Proposal for Auditing Services
1
Bay Atm Water Suptfy Conservation Afency
Castro Valley Saniary District
Central Marin Sanitation Agency
Cast Bay Olstfiarprs Authority
Cl Dorado Hillt Community Services District
fairfiald*Suisun Sevier District
Midpeninsula Refional Open Space District
Oro Lorrta Sanitary District
Sana Qara Cpurtty Regional Open Space Auth
SausalitP^armC'ty Seniaopn District
Silicon Valley Oean Water
The Cities’Group
Valley of the Moon Fire District
West Bay Sariary District
Wes t VaiI ey Sani alion Oi St ri ct
Westborough watv District
A
Black Adoption Ptacemeniand Research Center
Soys ar>d Girls Oubs of Central Sortorra County
Boys and Girls Oubs of Sonoma Valley
Cenar for Empowerii^ Refugees & immigrants
Children of Grace
Col lecd «• Roots
Empowerment for Success
Midaya Fourxlatian
Mission Lan^jage and Vocational School
Orgartie Farming Research Foundation
Pyramid Al terralives
Redwood City Education Foundation
Si n Jose Cons wati on Corps
Sin^larity Uravtrsily
The Moca Foundation
wark2future Foundation
iE
^agnostics for the Real World
Halcyon Molecular
Pathway a Choices
Proheatih Homecare
Sociometrics
R&6 Wholesa le Oi sUi buti on
Technology in the Audit
C&A is 3 paperless firm and we use a secure cloud server for file sharing. We have Lenovo laptops and
Fujitsu and Plustek scanners that we use in the field. Our laptops are synchronized to our cloud server
every day to avoid loss of data. The scanners allow for flexibility during the audit since it is not feasible
to expect every document In electronic format.
Our secure online lockbox provides for a better option over e-mailing electronic files. Each of our clients
has an account login username and password through our website that allows them to upload files. This
is especially helpful with sensitive information such as payroll data as it is much more secure than e-
mail.
m Page 15Chavan & Associates, LLP
Section C - Additional Data/Proposal Exceptions
Proposal for Auditing Services
While we have an office, we pride ourselves on our mobility. Our office has become a meeting place and
printing center. We have invested in high-end HP black/white and color printers and have established a
printing and binding shop for report processing.
Our audit software is ProSystems fx Engagement which we compliment with ProSystem fx Knowledge
Coach (KC) audit programs and workpapers. These programs allow us to roll-forward audit information
without having to replace the audit programs in the binder because they automatically update with
changes in auditing and accounting standards every month.
Finally, we have purchased data extraction software for each of our laptops that convert Adobe and
other file types to Word and Excel.
All of the above mentioned technological innovations make the audit more efficient and provides us the
opportunity to spend time in areas that are more meaningful to the City, such as having the financial
statements completed by the deadline each year. It also reduces the time and effort required by City
staff to provide information and almost entirely eliminates redundancy from year to year in the audit.
Proposal Exceptions
C&A did not have any exceptions or requested changes to the City's RFP conditions or requirements.
Chavan & Associates, LLP Page 16
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Section D
Partner, Supervisory and Staff
Qualifications AND Resumes
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Section D - Partner, Supervisory and Staff Qualifications and Resumes
Proposal for Auditing Services
We are aware of the need for continuity of personnel on the engagement and promise that the
Engagement Partner and Manager will be directly involved in the audit during each year of the contract.
We believe that extensive partner involvement provides continuity that could not be achieved in any
other way. All staff committed in this proposal will be available for the entire June 30, 2017 audit and
are available 12 months a year for questions, comments and implementation support. We understand
that the Engagement Partners, managers and other supervisory staff and specialists may be changed
only with the express prior written permission of the City. Other audit personnel may be changed at
discretion as long as the replacements have substantially the same or better qualifications or
experience. The City retains the right to approve or reject replacements.
Note that Sheldon Chavan will be your key contact throughout the audit and Paul Pham and Bryan
Kwon will be his support. They will help implement new accounting standards and facilitate ongoing
support and maintenance.
Sheldon Chavan, CPA
Engagement Partner (Member CalCPA, AlCPA, GFOA, CSMFO, GAQC)
our
PT
Sheldon holds a B.S. in Accounting from San Jose State University. He began his
career in public accounting in 1998 and has been auditing local governments and
nonprofit organizations ever since. Sheldon is a CPA licensed in California and a
member of AlCPA, CalCPA, CSMFO, GAQC and GFOA.
member of the GFOA Special Review Committee, with responsibility for
reviewing CAFR's for award of the Certificate of
Excellence in Financial Reporting. Sheldon has
prepared CAFR's for the City of Berkeley, City of
Sunnyvale, City of Pittsburg and many others over
his career. Most recently, Sheldon prepared the
CAFR of the City of Oroville, City of Saratoga and
the Town of Los Gatos for the fiscal years ended June 30, 2016.
He has also been a
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CAFR
Preparation
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Sheldon has been managing audits his entire 19 year career, which includes the technical review of all
work papers, staffing, scheduling, reporting, state compliance, federal compliance, state controllers
reports and much more. He is responsible for running the audit in the field and providing accounting
and auditing technical support to other partners and staff, primarily In the areas of compliance with
auditing standards generally accepted in the United States of America, the standards set forth for
financial audits in the United States General Accounting Office's (GAO) Government Auditing Standards,
and the provisions of the Federal Single Audit Act and the United States Office of Management and 0MB
Uniform Compliance. Sheldon also ensures that each staff has met the continuing professional
education requirements under these standards and teaches several in-house seminars a year. He also
administers our firm's quality control system as required by GAAS and Yellow Book standards. Sheldon
has been performing audits under the Single Audit Act his entire career. Understanding the complexities
of the various federal programs is one of his specialties. Over the years, Sheldon has audited major
programs such as CDBG, Shelter Plus Care, Home Investment in Affordable Housing, HUD Section 8,
Highway Planning and Construction, Medi-Cal, Low-income Low Energy Assistance, IDEA Local
Assistance, ARRA, and many more.
M. Chavan & Associates, LLP Page 17
Section D - Partner, Supervisory and Staff Qualifications and Resumes
Proposal for Auditing Services
Sheldon has extensive experience auditing government bond programs and can assist the City with bond
covenant calculations, bond compliance, tax filings, bond arbitrage issues and any other general
reporting requirements, in addition, we currently have ten clients for which we complete special bond
performance audits each year. We also provide contractor prequalification services for some clients
who use restricted bond funds for modernization and infrastructure improvements.
Sheldon's recent continuing professional education;
}Description of m.
fraud in Exempt Organisations: GAGAS, Preventing Fraud, and Audit Committees
fraud in Exempt Organizations: Government & NPO Environment' plus 'Fraudulent Financial Reporting
Ethics: Pointer Electronics, Inc. - You Are the Audit Partner
Ethics: BAN&K Advisory Services LLC • You Arethe Audit Partner
Frequent Government and NPO Frauds: Misuse of Assets
2016 Governmental and Nonprofit Annual Update: Federal Government Activities
2016 Qrrly Update-Gov/NFP-ai (Winter): SAS and GAS8 Nos. 68 & 71
Qrtly UpdateX3ov/NFP-«2 (Spring): 0MB A-133 Developments and SASs 118,119. & 120
2016 Governmental and Nonprofit Annual Update: Federal Government Activities
2016 Qrtly Update-Gov/NFP-Pl (Winter): SAS No. 117 and GASB Nos. 67 & 68
Program-Specific Audits' plus 'Audit Tools and Guidance
Applying Risk/tesessment Standards: Understanding the Entity and Its Environment
Howto conduct a peer review
Governmental Accounting and Audiong Conference Webcast • S121266C
Not-for-Profit Organizations Conference Webcast • S121343C
Cases in NFP Acct. & Auditing: 'Financial Statement Requirements' plus 'Net Asset Classifications'
Fraud In Exempt Organizations: Applying AU Sec. 316 in Governmental and Not-for-Profit Environments
Ethics: AA&C LLP - Accounting Firm Practice Deveiopment Committee
Ethics: Precious Mining Inc.- You Are the Audit Committee Chair
Cases in NFP Acct. 8i Auditing: Contributions
Field Work Documentation: Preparation, Maintenance, Types of Workpapers
School District Update Including LCFF and LCAP Compliance
School Districts ConfererKe Webcast - S12144SC
Overview plus ‘federal Awards'
Pass-Through Awards and Subrecipients’ plus 'Meet theSEFA
Major Program Determination’ plus 'Types of Compliance Requirements'
Compliance Supplement, Cost Circulars, and Testing Internal Control
Testing Compliance' plus 'Reporting Requirements'
The Current 0MB Environment
Basic Governmental Accounting: 'Reporting Entity' plus 'Government-Wide Statements'
ml Chavan & Associates, LLP Page 18
Section D - Partner, Supervisory and Staff Qualifications and Resumes
Proposal for Auditing Services
The following is a partial list of Sheldon's clients over the years:
Oty of Berkley
CityofCampbelf
Otyof Mirin«
Otyof Ullbfse
Oly of Novato
OtyofOrovi He
Oty of Pacific Grove
Gtyof Pinsburg
City of Po nt Arena
City of Redwood Gty
Oiyof RocUin
ClyufSaliiwv
City of San Carlos
City of San Rafael
City of Saratoga
Qty of Scons Valley
Cityof Sonoina
City of South San Prancisco
Cityof Susun City
Cityof Sunnyvale
City of Tracy
Town of Los Gatos
Town of Windsor
Say Area Water Services & Corts
Central MarinSaniiaiionAgencv
East Bay Dischargers Authority
Pairflefd-Suisan Sanitation Oistricl
Halt Moon Bay Fire Protection
Hayward Area Parks and Rec
Midland Recreation Dise-ict
los Trarxos Water Oisinct
Mckinney Water Oistnct
Menlo Park fire Protection
Midpen Regional Open Space Auth
OiuLuiiid SaiMUiy OisItiU
Pleasant HitI Parks and Rec
Point Montara Fire Protect on Dtsoict
Santa Clara Regional Open SpaceAuih
Saratoga Cemetery Oistnct
South Bayside System Authority
South San Francisco Conf Or
Suasalilo-Man n City Sanitation Oi strict
Tahoe Reqional Planning Agency
The Cities Group
Valley of the Moon Fire
West Bay Sani lary District
West County Wastewattr Oistrict
Westborough Water District
Woodside Fire Protection District
Antelope Elementary
Beimoni Redwood Shores
Burl ingame
Cabrillo Unified
Campbell Union
Ooserdale Unified
Cotaii Rohnert Park
Hillsborough City
la Honda Pescadero
lakeside
Las Lomitas Elementary
Ldssai lAew Elviiiiiiiiai v
los AItts Elanentary
Luther Burbank
Manion Joi ni Uni on
MenloParkCity
Ml librae Elementary
Mineral
Mountain Viav Whisman
Orchard
Pacifica
Plum Valley
Portola Vblley Elementary
Red Bluff
Salmas Union High
San Bruno Park
San Carlos Elementary
San lorento Val ley Unified
San Mateo County Office
San Mateo Union Hi^
Scans VblleyUnfied
Sequoia Union High
Sonoma Valley Unified
Soquel Oementary
Union School Oistnct
West County Agency (l£A)
Windsor Unified
Woodside Elementary
2006 Washington St.
Bay Area Special Education JPA
Bay Area Watv Lisers Associaoon
Bl ack Adopb on Placemen
Boys and Girls Gubs of Sonoma
Center for Empowen ng Refugees
Children of Grace
Collecbve Roots
Credo High School
Hidaya Foundation
Livebooks
Maslieiy
Mission Oiarttr
Mission Larguageand Vocabonal School
Morgan Hill Charter Foundation
Morgan Hill Charter School
Nob Hill Home Owners J^oc
O'Conner Water
One Mill ion Lights
Orange County Charier School
Paihmy to Choices
Pyram d Altemati ve
RedwoodOtyEducatlon Foundaoon
San Jose CotKervalion Charter
San Jose Conservabon Corps
Singulanty Uraversity
Sociometrics
South Tahoe Area Transit Aithonty
Slone Bn dge Charter School
Woodside Aihe-ton Authonty
work2future FourxJaOon
Chavan & Associates, LLP Page 19
Section D - Partner, Supervisory and Staff Qualifications and Resumes
Proposal for Auditing Services
Jeff Ira
Associate Partner, CPA (Member CalCPA, AlCPA, GFOA, CSMFO, GAQC)
Jeffrey is a graduate of Humboldt State University with a B.S. in Business with a
concentration in Accounting. He is a CPA licensed in California, a member of the
AlCPA, the California Society of CPAs, the GFOA and the CSMFO. Jeff joined our
firm in 2017 and has been auditing local governments since 1981. Jeff is a member
of the GFOA Special Review Committee, with responsibility for reviewing CAFR's
for award of the Certificate of Excellence in Financial Reporting. Jeff served as a
Councilmember and the Mayor for Redwood City. He has also served on various
local governing boards and committees, which makes him acutely aware of both
your financial and management needs. Jeff will be responsible for concurrent
review of your audit, which is a quality control measure designed to ensure the
audit is completed effectively and in compliance with governmental auditing standards, compliance
requirements and uniform guidance requirements.
Jeff has thirty-five years of professional experience and has participated in a variety of auditing and
consulting engagements with cities, towns, school districts, and special districts including the following
(partial listing):
Antelope Elementary
Cabrillo Unified
Cotati Rohnert Park
La Honda Pescadero
Lassen View Elementary
LasLomitas Elementary
Los Altos Elementary
Luther Burbank
Redwood City Elementary
Menlo Park City
Millbrae Elementary
Santa Cruz City
Mountain View Whitman
Orchard School District
Burlingame
Jefferson Union High
Portela Valley Elementary
Red Bluff
San Bruno Park
San Mateo County Office
Sequoia Union High
Sonoma Valley Unified
San Mateo Unified
Ravenswood Elementary
Windsor Unified
Woodside Elementary
City of Berkeley
City of Qoverdale
CityofOrovitle
City of Point Arena
City of Saratoga
City of Sonoma
City of Tracy
Town of Los Gatos
City of Pittsburg
QtyofSanRafael
City of Concord
City od Salinas
City of Sunnyvale
Qty of San Carlos
Qty of South San FrarKisco
Dty of Marina
City of San Bruiw
City of Campbell
City of Novato
Town of Atherton
Oty of Cupertino
Bay Area Water Supply Conserv. Agency
Central Marin Sanitation Agency
East Bay Dischargers Authority
Half Moon Bay Fire Protection
Los Trancos Water District
Menlo Park fire Protection
Pleasant Hill Parks and Rec
Point Montara Fire Protection District
Santa Clara Regional Open Space Auth
Saratoga Cemetery District
South Bayside Systems Authority
South San Francisco Conf. Ctr.
Tahoe R^ional Planning Agency
The Cities Group
West Bay Sanitary District
West County Wastewater District
Westborough Water District
Woodside Fire Protection District
Highland Recreation
Coast side Water District
m. Chavan & Associates, LLP Page 20
Section D - Partner, Supervisory and Staff Qualifications and Resumes
Proposal for Auditing Services
Jeffs recent continuing professional education:
GAGAS • Ethical Prindplas In Government Auditir^
GAGAS - Field Work and Reporting Standards
GAGAS • Field Work Startdards For Financial Audits
Government Auditing
Uator Changes to Auditing Standards
Limiting Auditor UabiiitY
Auditor Communications: Criheal New ftequrements
School Districts Conferertcc
GAGAS • General Field Work And Reporting Stvidards
GAGAS - General Startdards
GAGAS - Reporting Standards For Financial Audits
GAGAS - Use and Application of GAGAS
Governmental Accounting, Reporting, and iViditing update
GASB Basic Finandai Statements for State and Local Governments
M. Chavan «& Associates, LLP Page 21
Section D - Partner, Supervisory and Staff Qualifications and Resumes
Proposal for Auditing Services
Paul Pham
Manager
Paul received his Bachelor of Science from Pacific University and hopes to pursue a Master of
Accountancy in the near future. He is currently preparing to sit for the CPA exam and plans to complete
his CPA certification by the end of the year. Paul has been working in public and private accounting
since 2007 and has completed eight governmental audit seasons. He has completed financial and
compliance audits for the entities (including LEA's) listed below since 2007. Besides the standard control
documentation and substantive testing required for GAAS audits, Paul has performed audits and
prepared reports under 0MB Subpart F and the Single Audit Act for most of the entities listed below. He
has audited Federal grants from various agencies, including FEMA, HUD, FTA, the Department of
Education (Title I, Special Education, Title II, Adult Ed) and much more.
Paul's recent continuing professional education:
Government Auditing
Major Changes to Auditing Standards
Limiting Auditor Liabiiitv
Internal Fraud: Analytical Techniques
School Districts Conference
Yellow Book: General. Field Work and Reporting Startdards
GASB Basic Financial Statements for State and Local Governments
GAGAS • Ethical Rrindpicsin Government Auditing
GAGAS • Field Work and Reporting Standards
GAGAS - Field Work Startdards For Financial Audits
GAGAS - General Field Work And Reporting Standards
GAGAS - General Standards
GAGAS n Reporting Standards For Financial Audits
GAGAS - Use arsd Application of GAGAS
The following is a partial list of Paul's clients over the years:
Nonprofits and Charter SchoolsSchool Dfstrlctt/COE'sSocial DMrtcHCRies and Towns
2006 Washington St CIA
Black Adoption Placement & Research Center
Boys and Girls Clubs of Sonoma
Center for Empowering Refugees and Immigrants
Collective Roots
Credo Charter
Mission Charter
Morgan Hill Charter
Nob Hill Home Owners Association
Pathway to Choices
Redwood City Education Foundation
San Jose Conservation Charter
San Jose Conservation Corps
Sociometrics
City of Berkeley
CityofOroville
City of Pacific Grove
Qty of Point Arena
Gtyof Rocklin
Qty of Saratoga
City of Sonoma
CityofSuisun City
City of Tracy
Town of Los Gatos
Bay Area Water Supply Conserv. Agency
Central Marin Sanitation Agency
East Bay Dischargers Authority
Half Moon Bay Fire Protection
Los Trancos Water District
Menlo Park Fire Protection
OroLoma Sanitary District
Pleasant Hill Parks and Rec
Point Montara Fire Protection District
South Bayside Systems Authority
South San Francisco Conf. Ctr.
Tahoe Regional Planning Agency
The Cities Group
West Bay Sanitary District
WestCounty Wastewater District
Wes thorough Water District
Woods! de FI re Protection District
Antel ope El emen la ry
Cabrillo Unified
Cotad RhonertPark
La Honda Pescadero
LAssen View Elementary
Las Lomitas Elementary
U)S Altos Elementary
Luther Burbank
Manton Joint Union
Mineral
Millbrae Elementary
Mourttain ViewWhisman
Orchard School District
Pacifica
Plum Valley
Poriola Valley Elementary
Red Bluff
San Bruno Park
San Mateo County Office
Seqouia Union High
Sonoma Valley Unified
Union Elementary
West County AgerKy |IE^
Windsor Urufied
Woodside Elementary
Page 22Chavan & Associates, LLP
Section D - Partner, Supervisory and Staff Qualifications and Resumes
Proposal for Auditing Services
Daniel Garaycochea
Senior Auditor
Daniel graduated from San Jose State University with a Bachelor of Science in Legal Studies. He has
successfully completed three seasons of governmental auditing. Daniel has performed tests of controls,
substantive tests, state compliance testing and Federal compliance testing for various special districts
and school districts. Besides the standard control documentation and substantive testing required for
GAAS audits, Daniel has performed audits and prepared reports under the Single Audit Act. He has
audited Federal grants from various agencies, including the Department of Transportation, HUD, FEMA,
Special Education, National School Lunch, Title I, Department of Education grants and others.
Recent continuing professional education;
IGAGAS • Ethical Prindples In Government Auditinf
GAGAS n Field Work and iteponin{ Standards
GAGAS - Field Work Staisdards For Financial Audits
GAGAS • General Field Work And Reporting Standards
GAGAS - Gerteral Standards
GAGAS n Reporting Standaids For Financial Audits
GAGAS • Use and Application of GAGAS
Government Auditing
Major Changes to Auditing Surtdards
Limiting Auditor Uabilitv
Internal Fraud: Analytical Techniques
School Districts Conference
Yellow Book; General, Field Work and Reporting Starsdards
GASB Basic Financial Statements for State and Local Governments
The following is a list of Daniel's clients over the years:
CRtcsand Towaa S0KW Dktrkts School DM^COTs MoNOfoftts and Other
City of Berkeley
Cityof Oroville
Cty of Pacific Grove
City of Point Arerta
Cityof Rocklin
Qly of Saratoga
Cityof Sonoma
Cityof Suisun City
CtyofTracy
Town of Los Gatos
Bay Area Water Supply Conserv. Agency
Central Marin Sanitation f^ency
Cast Bay Dischargers Authority
Half Moon Bay Fire Protection
Los Trancos Water District
Menlo Park Fire Protection
Oro Loma Sanitary District
Pleasant Hill Parks and ftec
Point Montar a Fire Protection District
South Bayside Systems Authority
South San FrarKisco Conf. Ctr.
Tahoe Regional PlanningAgency
The Cities Group
West Bay Sanitary District
West County Wastewater District
Wes thorough Water District
Woodside Fire Protection District
Antdope dementary
Cabrillo Unified
Cotati RhonertPark
La Honda Pescadero
Lassen Mew elementary
Las lomilas dementary
Los Altos dementary
Luther Burbank
Manton ioint Union
Mineral
Mill brae dementary
Mountain View Whisman
Orchard School District
PaciHca
PlumVailey
Portola Valley Elementary
Red Bluff
San Bruno Park
San Mateo County ORice
Seqouia Union High
Sonoma Wiley Unified
Union Elementary
West County Agency (LEA)
Windsor United
Woodside dementary
2006 Washington St QA
Black Adoption Placement & Research Center
Boys and Girls Clubs of Sonoma
Center for Empowering Refugees
Collective Roots
Credo Charter
Mission Charter
Morgan Hill Charter
Nob Hill Home Owners Association
Pathway to Choices
Redwood City Education Foundation
San Jose Conservation Charter
SanJoseConservation Corps
Sociometrics
Chavan & Associates, LLP Page 23
Section D - Partner, Supervisory and Staff Qualifications and Resumes
Proposal for Auditing Services
Matthew Ojeda
Professional Staff
Matthew graduated from the San Jose State University, with a B.S. in Accounting. He has successfully
completed two seasons of governmental auditing. Matthew has performed tests of controls,
substantive tests, state compliance testing and Federal compliance testing for various special districts
and school districts. Besides the standard control documentation and substantive testing required for
GAAS audits, Matthew has performed audits and prepared reports under the Single Audit Act. He has
audited Federal grants from various agencies, including Special Education, National School Lunch, Title I,
Department of Education grants and others.
Recent continuing professional education:
i.
Government Auditing
Major Changes to Auditing Standards
Limiting Auditor Liability
Internal Fraud: Analytical Techniques
School Districts Conference
Yellow Book: General. Field Work and Reporting Standards
GASB Basic FinarKial Statements for State and Local Governments
GAGAS - Ethical Phrtciplesin Government Auditing
GAGAS - Field Work and Reporting Star>dards
GAGAS - Field Work Standards For Financial Audits
GAGAS - General Field Work And Reporting Standards
GAGAS - General Standards
GAGAS - Reporting Starsdards For Finarraal Audits
GAGAS - Use and Application of GAGAS
The following is a list of Matthew's clients over the years:
Eim
Bay Area Water Supply Conserv. Agency
Central Marin Sanitation Agency
East Bay Dischargers Authority
Ha If Moon Bay Fire Protection
Los Trancos Water District
Menlo ParkFireProtection
Oro Loma Sanitary District
Pleasant Hill Parks and Rec
Point Montara Fire Protection District
South Bayside Systerrs Authority
South San Frartcisco Conf. Ctr.
Tahoe Regional Planning Agency
The Cities Group
West Bay Sanitary District
West County Wastewater District
Westborough Water District
Woodside Fire Protection District
rowns
2006 Washington St OA
Black Adoption Placement & Research Center
Boys and Girls Clubs of Sonoma
Certter for Empowering Refugees
Collective Roots
Credo Otarter
Mission Charier
City of Berkeley
Ctyof Oroville
Qtyof Pacific Grove
City of Point Arena
Otyof Rocklin
City of Saratoga
Ctyof Sonoma
Cty of Suisun City
Otyof Tracy
Town of Los Gatos
Antelope El ementary
Cabrillo Linified
Cotaii Rhonert Park
La Honda Pescadero
Lassen View Elementary
Las Lomitas Elementary
Los Altos Elementary
Luther Burbank
Manton Joint Union
Mineral
Mi 11 bra e El ementa ry
Mountain View Whisman
Orchard School District
Pacifica
Plum Valley
Portola Valley Elementary
Red Bluff
San Brurto Park
San Maleo County Office
Seqouia Union High
Sortoma Valley Unified
Union Elementary
West County Agency (LEA)
Wirtdsor Unified
Woodside Elementary
Morgan Hill Charter
Nob Hill Home Ovtners Association
Pathway to Choices
Redwood Cty Education Foundation
San JoseConservation Charter
San Jose Conservation Corps
Sociometrics
Page 24Chavan & Associates, LLP
Section D - Partner, Supervisory and Staff Qualifications and Resumes
Proposal for Auditing Services
Jennie Tran
Professional Staff
Jennie graduated from the San Jose State University, with a B.S. in Accounting. New to public
accounting in 2014, she has successfully completed one full season of governmental auditing. Jennie
has performed tests of controls, substantive tests, state compliance testing and Federal compliance
testing for various special districts and school districts. Besides the standard control documentation and
substantive testing required for GAAS audits, Jennie has performed audits and prepared reports under
the Singie Audit Act. She has audited Federal grants from various agencies, including Department of
Transportation, HUD, FEMA, Special Education, National School Lunch, Title I, Department of Education
grants and others.
Recent continuing professional education:
E
GAGAS' Ethical Principles In Government Awdttinf
GAGAS • Field Work and Reporting Standards
GAGAS - Field Work Standards For Flnartcial Audits
GAGAS • General Field Work And Reportirtg Star>dards
GAGAS • General Standards
GAGAS' ReportingMafvdatds ForFInanoai Audits
GAGAS' Use and Application of GAGAS
Government Auditing
Maior Changes to Auditing Standards
Limiting Auditor LJabllitv
Internal Fraud: Analytical Techniques
School Districts Conference
Yellow Book; General, Field Work and Reporting Star^ards
GAS8 Basic Financial Statements for State and Local Governments
The following is a list of Jennie's clients over the years:
rowns issm
2006 WashingtonStOA
Hack Adoption PlacerTKr>t& Research Center
Boys artd Girls Clubs of Sonoma
Center for Empowering Refugees
Collective Roots
Credo Charter
Mission Charier
Morgan Hill Charter
Nob Hill Home Owners Association
Pathway to Oioices
Redwood Gty Education Foundation
San JoseConservation Charter
San Jose Conserva lion Corps
Sociomttries
City of Berkeiey
CtyofOroville
Gty of Pacific Grove
Cityof Point Arena
Gty of Rocklin
Gty of Saratoga
Gty of Sonoma
Qtyof SuisunCity
Gty of Tracy
Town of Los Gatos
Bay Area Water Supply Cortserv. Agency
Central Marin Sanitation Agency
East Bay Dischargers Authority
Ha I f Moon Bay F ire Prolec Hon
Los Trancos Water Disuict
Menlo ParkFireProtection
Oro Loma Sanitary District
Pleasant Hill Parks and Rec
Antelope Elementary
Cabrillo Unified
Colati Rhonert Park
La Honda Pescadero
Lassen ^ew Etementary
las Lomitas Elementary
Los Altos Bcmentary
Luther Burbank
Man ton Joint Union
Mineral
Miilbrae Bementary
Mounuin ViewWhlsman
Orchard School District
Pacifica
Plum Valley
Portoia Valley Bementary
Red Huff
San Bruno Park
San Mateo County Office
Seqouia Union High
Sortoma Valley Unified
Union Elementary
West County Agency (LEA)
Windsor Unified
W oods i de El emen tary
Point Montara Fire Protection District
South BaysideSystems Authority
South San Francisco Conf. Ctr.
Tahoe Regional Planning Agency
The Cities Group
West Bay Sanitary District
West County Wastewater District
Westborough Water District
Woodside Fire Protection District
Chavan & Associates, LLP Page 25
Section D - Partner, Supervisory and Staff Qualifications and Resumes
Proposal for Auditing Services
Professional Education and Training
Our professionals complete 80 hours of continuing professional education every two years in auditing
and accounting which includes 80 hours of governmental auditing and accounting training. We use a
combination of in-house seminars, self-study and outside seminars sponsored by the AiCPA, the GFOA,
the California Education Foundation and other recognized groups.
I
M Chavan & Associates, LLP Page 26
This Page Intentionally Left Blank
Section E- References and Similar Engagements
Proposal for Auditing Services
Client References and Similar Engagements
The following projects were completed by C&A in 2015-16:
r
iMMyNamr City of Saratov TcMmof iMGattK CHry of Pacific Gnw*
I22t Steve Conway PKrWaMiitfaod
TM«Pinance Mwwer Finance Director Hnanca OtfaciDf
Addrau 13777Fruitvate Ave, Saratoga, CA 95070 110 E, Wn St. Uh Gatos. CA 95030 300 Forest Ave. Pacific Grove. CA 93950
40S-a»-1227 40^3S4-6g28 831-648-3181
C»ri>al tmcfacianegtaratoca ca.tB sconwavglotgatoica-«ov pmaitia'^dfiicitYOfpadticgTovc.ori
Audit Period 6/3(y2016 6/3<V2016 6/30/2016
Houn 420 420 400
Sheldort Chavan Sheldon Chavan Sheldon Chavan
6POA Award Vet vet No
EMitvTvpe Oty qtv City
Scope of Woft CAFR Review
GAGAS Audit
Single Audit/OMe
SAS114 Report
Management Letter
TOAAudit
GANN UmitAUP
Year Round Contultation
CAFRPrep
GAGAS Audit
Single Audit/OMB
SAS 114 Report
Management Letter
GANN UmitAUP
TDA Audit
Successor Age ncy Audit
Year Round ConsultMion
CAFRPrepfNoGFOA)
GAGAS Audit
Single Audit/OMB
GANN UmitAUP
SAS U4 Report
Management Lener
Year Round ComuRation
r
CatityName CftvofOrovMe Ctiyof Roddin CMyof Suisun Oty
RuthVvnght MaryRIster Blaafaeth Luna
TWe Pireaorof Finance Finance Officer Accourdind Sendot M»>nef
Addrcu 173S Montaomery St, Orovilie. CA SSTORoAlin Road, ftocklin, CA 95677 701 Ovic Center Btvd.. Stiitun City. CA »4Sn
530-aa-2413 916-62S-5024 707-421-3215
E-mal wrightr^tyoforowilleorE mary rittergrodtiin.ca.us
6/30/2016
eltf>a#tuitun.cpm
AudN Period 6/3(y2016 6/30/2016
Partner
240 340 SCO
Sheldon Chavan Sheldon Chavan Sheldon Chavan
GKMAywd Yes No Yes
EnrityType Ga.City
SccHWofWark CAFRPrep
GAGAS Audit
Single Audit/OMB
GANN UmitAUP
SAS 114 Report
Year Round Contultation
CAFR Prep
Single Audit/OMB
SAS 114 Report
Pdan^ment Letter
GANN UmitAUP
Year Rourtd Corsultation
CAFR Prep
GAGAS Audit
Si r«le Audit/OMB
SAS 114 Report
Management Letter
GANN Umit ALP
TOA Audit
Year Round Consultation
Chavan & Associates, LLP Page 27
Attachment A
CHIANG, HAMMON & COMPANY
Certified Public Accountants
2007 W, Hedding Street, Suite 209 San Jose, CA 95128
(408) 244-2002 (408) 244-2333 Fax
System Review Report
June 10, 2014
To the Members of Chavan & Associates LLP
and the Peer Review Committee of the CalCP A
We have reviewed the system of quality control for the accounting and auditing practice
of Chavan & Associates LLP in effect for the year ended December 31, 2013. Our peer
review was conducted in accordance with the Standards for Performing and reporting on
Peer Reviews established by the Peer Review Board of the American Institute of Certified
Public Accountants. As a part of our peer review, we considered reviews by regulatory
entities, if applicable, in determining the nature and extent of our procedures. The firm is
responsible for designing a system of quality control and complying with it to provide the
firm reasonable assurance of conforming 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 firm’s compliance therewith based on my review. The nature,
objectives, scope, limitations of, and the procedures performed in a System Review are
described in the standards at www.aicpa.org/prsummarv.
As required by the standards, engagements selected for review included engagements
performed under the Government Auditing Standards.
In our opinion, the system of quality control for the accounting and auditing practice of
Chavan & Associates LLP. in effect for the year ended December 31,2013, has been
suitably designed and complied with to provide the firm with reasonable assurance of
conforming with applicable professional standards in all material respects. Firms can
receive a rating oipass, pass with deficiency(ies) orfail. Chavan & Associates LLP has
received a peer review rating ofpaj5.
Chiang, Hammon & Company