HomeMy WebLinkAboutItem 4.4 - 1688 Audit Service Agreement
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STAFF REPORT
CITY COUNCIL
DATE: November 21, 2017
TO: Honorable Mayor and City Councilmembers
FROM:
Christopher L. Foss, City Manager
SUBJECT:
Agreement with Badawi & Associates to Provide Auditing Services
Prepared by: Lisa Hisatomi, Assistant Administrative Services Director
EXECUTIVE SUMMARY:
The City Council will consider the approval of a consulting services agreement with
Badawi & Associates to provide audit services to the City.
STAFF RECOMMENDATION:
Adopt the Resolution Approving a Consulting Services Agreement with Badawi &
Associates to Provide Auditing Services.
FINANCIAL IMPACT:
The total cost for five years will not exceed $277,975, which includes $20,000 in
contingency for potential special audit programs, in addition to the base contract of
$257,975. The first year’s contract cost is included in Fiscal Year 2017 -18 Adopted
Budget, while future year costs will be included in each respective annual budget.
DESCRIPTION:
The City's current auditor, Maze & Associates (Maze), has provided audit services to
the City of Dublin for the past six years. The City has been well served by Maze's team
of professionals, and has produced complete and accurate annual financial reports.
However, best practices established for public agency finance recommend that
agencies periodically review the provision of these professional services. This allows for
a fresh review of City finance operations.
Audit Firm Selection Process
A Request for Proposal (RFP) for professional auditing services was issued on
September 1, 2017. The RFP was published on the City’s website and sent to five audit
firms, including Maze. The City received proposals from eight qualified firms which
represent a range of firm size and location, proposed cost, and propo sed hours for the
engagement. The RFP requested a five -year proposal, which includes a three-year
agreement with two one-year extensions.
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The selection process contained three separate elements, comprising: 1) Evaluation of
written proposals and firm background; 2) In-person presentation and interview; 3)
Reference checks.
The evaluation and selection of the audit firm was based on the following criteria:
Responsiveness of the proposal in clearly stating and understanding of the work
to be performed
Technical experience of the firm
Qualification of audit team
Size and structure of the firm
Quality and completeness of the proposal
Proposed hours and costs
Interview and presentation performance
Based on the written proposal review, three firm s were invited to participate in an
interview/presentation. Each of the selected firm had extensive experience with
municipal audits and a strong regional presence. The following are the firms selected
for interview:
Badawi & Associates
Maze & Associates
Vavrinek, Trine, Day & Co.
Based on the complete evaluation process including reference checking, Staff is
recommending the selction of Badawi & Associates, located in Oakland. In Alameda
County, Badawi & Associates currently provide audit services to Albany, Berkeley,
Newark, and Union City.
Services And Costs
As part of the audit engagement, the following scope of services will be provided by
Badawi & Associates on an annual basis:
1. Comprehensive Annual Financial Report (CAFR)
2. Single Audit Report (In the event that the City has expenditures from Federal
resources that exceed $750,000)
3. Special Purpose Audits (Required by Alameda County Transportation
Commission)
4. Appropriation (GANN) Limit Report
5. State Controller’s Cities Financial Transactions Report
6. State Controller’s Annual Street Report
7. Other Auditor Reports (“Management Letter” that includes recommendations for
improvements in internal control and accounting procedures)
Badawi & Associates has presented a total Not-To-Exceed cost proposal which begins
at $49,490 in the first year and would reach $52,505 in the fifth year. The following
table displays the components of the fees proposed. In the case of Single Audit, if the
City did not meet the expenditure threshold requirement, the cost would not be incurred.
All other work is expected to occur on an annual basis.
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Base Service FY2018 FY2019 FY2020 FY2021 FY2022
City Audit and Related Reports $31,130 $32,060 $33,035 $33,035 $33,035
Single Audit and Related Reports $3,000 $3,090 $3,180 $3,180 $3,180
Special Purposes Audit and
Related Reports
$9,780 $10,070 $10,370 $10,370 $$10,370
GANN Limit Audit Report $610 $630 $650 $650 $650
State Controller City Financial
Transactions Report
$3,660 $3,770 $3,880 $3,880 $3,880
State Controller Street Report $1,310 $1,350 $1,390 $1,390 $1,390
Total for Fiscal Year (not-to-
exceed)
$49,490 $50,970 $52,505 $52,505 $52,505
The total cost for base audit services over the five -year period is $257,975. Staff
recommends to include $20,000 in the total contract amount to account for any as -
needed audit services within the time frame.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
None.
ATTACHMENTS:
1. Resolution Approving a Consulting Services Agreement with Badawi & Associates to
Provide Auditing Services
2. Exhibit A to the Resolution - Consulting Services Agreement Between the City of
Dublin and Badawi & Associates
ATTACHMENT 1
RESOLUTION NO. XXX- 17
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
* * * * * * * * *
APPROVING A CONSULTING SERVICES AGREEMENT
WITH BADAWI & ASSOCIATES TO PROVIDE AUDITING SERVICES
WHEREAS, the City desires to annually have an independent audit of its financial reports;
and
WHEREAS, the best practices in municipal finance recommend that periodically agencies
should evaluate options available for the provision of audit services; and
WHEREAS, the City issued a Request for Proposals and received eight responses; and
WHEREAS, City Staff evaluated the responses and determined that the proposed scope of
services and approach to the provision of audit services and preparation of financial reports
presented by Badawi & Associates most closely related to the City’s needs; and
WHEREAS, Badawi & Associates has extensive experience providing audit services to
cities and other public agencies; and
WHEREAS, Badawi & Associates provided a not-to-exceed fee proposal to complete City
audits and specified financial reporting for a five -year period: a three-year agreement with two one-
year extensions; and
WHEREAS, City Staff recommends an additional $20,000 in contingency for additional audit
programs not listed in the scope of services.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does
hereby authorize the City Manager to execute the agreement with Badawi & Associates and up to
two one-year extensions to this agreement (attached hereto as Exhibit A), in a contract amount not
to exceed $277,975 for a five-year period, which will be paid as annual increments described in
Exhibit A.
PASSED, APPROVED AND ADOPTED this 21st day of November, 2017.
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________________
Mayor
ATTEST:
_______________________________________
City Clerk
CONSULTING SERVICES AGREEMENT BETWEEN
THE CITY OF DUBLIN AND BADAWI & ASSOCIATES
This Agreement is made and entered into between the City of Dublin ("City") and Badawi & Associates
(“Consultant”) as of November 21, 2017 (the “Effective Date”). In consideration of their mutual covenants,
the parties hereto agree as follows:
Section 1. SERVICES. Subject to the terms and conditions set forth in this Agreement, Consultant
shall provide to City the services described in the Scope of Work attached as Exhibit A at the time and
place and in the manner specified therein. In the event of a conflict in or inconsistency between the terms
of this Agreement and Exhibit A, the Agreement shall prevail.
1.1 Term of Services. The term of this Agreement shall begin on the date first noted above
and shall end after the completion of the Fiscal Year 2019-20 audit, with the option to
renew as set forth in section 8.2 below Consultant shall complete the work described in
Exhibit A prior to January 1 following the close of the prior fiscal year, unless the term of
the Agreement is otherwise terminated or extended, as provided for in Section 8. The
time provided to Consultant to complete the services required by this Agreement shall not
affect the City’s right to terminate the Agreement, as provided for in Section 8.
1.2 Standard of Performance. Consultant shall perform all services required pursuant to this
Agreement in the manner and according to the standards observed by a competent
practitioner of the profession in which Consultant is engaged in the geographical area in
which Consultant practices its profession. Consultant shall prepare all work products
required by this Agreement in a substantial, first-class manner and shall conform to the
standards of quality normally observed by a person practicing in Consultant's profession.
1.3 Assignment of Personnel. Consultant shall assign only competent personnel to perform
services pursuant to this Agreement. In the event that City, in its sole discretion, at any
time during the term of this Agreement, desires the reassignment of any such persons,
Consultant shall, immediately upon receiving notice from City of such desire of City,
reassign such person or persons.
1.4 Time. Consultant shall devote such time to the performance of services pursuant to this
Agreement as may be reasonably necessary to meet the standard of performance
provided in Section 1.1 above and to satisfy Consultant’s obligations hereunder.
Section 2. COMPENSATION. City hereby agrees to pay Consultant as per the compensation
schedule in Exhibit B, notwithstanding any contrary indications that may be contained in Consultant’s
proposal, for services to be performed and reimbursable costs incurred under this Agreement.
Notwithstanding the foregoing, an additional $20,000 in contingency is available for additional audit
programs not listed in Exhibit B, but only with the City Manager’s prior approval. In the event of a conflict
between this Agreement and Consultant’s proposal, attached as Exhibit A, regarding the amount of
compensation, the Agreement shall prevail. City shall pay Consultant for services rendered pursuant to this
Agreement at the time and in the manner set forth herein. The payments specified below shall be the only
payments from City to Consultant for services rendered pursuant to this Agreement. Consultant shall
submit all invoices to City in the manner specified herein. Except as specifically authorized by City,
Consultant shall not bill City for duplicate services performed by more than one person.
Consultant and City acknowledge and agree that compensation paid by City to Consultant under this
Agreement is based upon Consultant’s estimated costs of providing the services required hereunder,
including salaries and benefits of employees and subcontractors of Consultant. Consequently, the parties
further agree that compensation hereunder is intended to include the costs of contributions to any pensions
and/or annuities to which Consultant and its employees, agents, and subcontractors may be eligible. City
therefore has no responsibility for such contributions beyond compensation required under this Agreement.
2.1 Invoices. Consultant shall submit invoices, not more often than once a month during the
term of this Agreement, based on the cost for services performed and reimbursable costs
incurred prior to the invoice date. No individual performing work under this Contract shall
bill more than 2,000 hours in a fiscal year unless approved, in writing, by the City Manager
or his/her designee. Invoices shall contain the following information:
The beginning and ending dates of the billing period;
A Task Summary containing the original contract amount, the amount of
prior billings, the total due this period, the balance available under the
Agreement, and the percentage of completion;
The Consultant’s signature.
2.2 Reserved.
2.3 Total Payment. City shall pay for the services to be rendered by Consultant pursuant to
this Agreement. City shall not pay any additional sum for any expense or cost whatsoever
incurred by Consultant in rendering services pursuant to this Agreement. City shall make
no payment for any extra, further, or additional service pursuant to this Agreement.
In no event shall Consultant submit any invoice for an amount in excess of the maximum
amount of compensation provided above either for a task or for the entire Agreement,
unless the Agreement is modified prior to the submission of such an invoice by a properly
executed change order or amendment.
2.4 Reserved.
2.5 Reserved.
2.6 Payment of Taxes. Consultant is solely responsible for the payment of employment taxes
incurred under this Agreement and any similar federal or state taxes.
2.7 Payment upon Termination. In the event that the City or Consultant terminates this
Agreement pursuant to Section 8, the City shall compensate the Consultant for all
outstanding costs and reimbursable expenses incurred for work satisfactorily completed as
of the date of written notice of termination. Consultant shall maintain adequate logs and
timesheets in order to verify costs incurred to that date.
2.8 Authorization to Perform Services. The Consultant is not authorized to perform any
services or incur any costs whatsoever under the terms of this Agreement until receipt of
authorization from the Contract Administrator.
Section 3. FACILITIES AND EQUIPMENT. Except as set forth herein, Consultant shall, at its sole
cost and expense, provide all facilities and equipment that may be necessary to perform the services
required by this Agreement. City shall make available to Consultant only the facilities and equipment listed
in this section, and only under the terms and conditions set forth herein.
City shall furnish physical facilities such as desks, filing cabinets, and conference space, as may be
reasonably necessary for Consultant’s use while consulting with City employees and reviewing records and
the information in possession of the City. The location, quantity, and time of furnishing those facilities shall
be in the sole discretion of City. In no event shall City be obligated to furnish any facility that may involve
incurring any direct expense, including but not limited to computer, long-distance telephone or other
communication charges, vehicles, and reproduction facilities.
Section 4. INSURANCE REQUIREMENTS. Before beginning any work under this Agreement,
Consultant, at its own cost and expense, shall procure "occurrence coverage" insurance against claims for
injuries to persons or damages to property that may arise from or in connection with the performance of the
work hereunder by the Consultant and its agents, representatives, employees, and subcontractors.
Consultant shall provide proof satisfactory to City of such insurance that meets the requirements of this
section and under forms of insurance satisfactory in all respects to the City. Consultant shall maintain the
insurance policies required by this section throughout the term of this Agreement. The cost of such
insurance shall be included in the Consultant's bid. Consultant shall not allow any subcontractor to
commence work on any subcontract until Consultant has obtained all insurance required herein for the
subcontractor(s) and provided evidence thereof to City. Verification of the required insurance shall be
submitted and made part of this Agreement prior to execution.
It shall be a requirement under this Agreement that any available insurance proceeds broader than or in
excess of the specified minimum insurance coverage requirements and/or limits shall be available to City
as an additional insured. Furthermore, the requirements for coverage and limits shall be (1) the minimum
coverage and limits specified in this Agreement; or (2) the broader coverage and maximum limits of
coverage of any insurance policy or proceeds available to the named insured; whichever is greater. The
additional insured coverage under the Consultant’s policy shall be “primary and non-contributory” and will
not seek contribution from City’s insurance or self-insurance and shall be at least as broad as CG 20 01 04
12. In the event Consultant fails to maintain coverage as required by this Agreement, City at its sole
discretion may purchase the coverage required and the cost will be paid by Consultant. Failure to exercise
this right shall not constitute a waiver of right to exercise later. Each insurance policy shall include an
endorsement providing that it shall not be cancelled, changed, or allowed to lapse without at least thirty (30)
days’ prior written notice to City of such cancellation, change, or lapse.
4.1 Workers’ Compensation. Consultant shall, at its sole cost and expense, maintain
Statutory Workers’ Compensation Insurance and Employer’s Liability Insurance for any
and all persons employed directly or indirectly by Consultant. The Statutory Workers’
Compensation Insurance and Employer’s Liability Insurance shall be provided with limits of
not less than ONE MILLION DOLLARS ($1,000,000.00) per accident. In the alternative,
Consultant may rely on a self-insurance program to meet those requirements, but only if
the program of self-insurance complies fully with the provisions of the California Labor
Code. Determination of whether a self-insurance program meets the standards of the
Labor Code shall be solely in the discretion of the Contract Administrator. The insurer, if
insurance is provided, or the Consultant, if a program of self-insurance is provided, shall
waive all rights of subrogation against the City and its officers, officials, employees, and
volunteers for loss arising from work performed under this Agreement.
An endorsement shall state that coverage shall not be canceled except after thirty (30)
days' prior written notice by certified mail, return receipt requested, has been given to the
City. Consultant shall notify City within 14 days of notification from Consultant’s insurer if
such coverage is suspended, voided or reduced in coverage or in limits.
4.2 Commercial General and Automobile Liability Insurance.
4.2.1 General requirements. Consultant, at its own cost and expense, shall maintain
commercial general and automobile liability insurance for the term of this
Agreement in an amount not less than ONE MILLION DOLLARS ($1,000,000.00)
per occurrence, combined single limit coverage for risks associated with the work
contemplated by this Agreement. If a Commercial General Liability Insurance or an
Automobile Liability form or other form with a general aggregate limit is used,
either the general aggregate limit shall apply separately to the work to be
performed under this Agreement or the general aggregate limit shall be at least
twice the required occurrence limit. Such coverage shall include but shall not be
limited to, protection against claims arising from bodily and personal injury,
including death resulting therefrom, and damage to property resulting from
activities contemplated under this Agreement, including the use of owned and non-
owned automobiles.
4.2.2 Minimum scope of coverage. Commercial general coverage shall be at least as
broad as Insurance Services Office Commercial General Liability occurrence form
CG 0001. Automobile coverage shall be at least as broad as Insurance Services
Office Automobile Liability form CA 0001 Code 1 (“any auto”).
4.2.3 Additional requirements. Each of the following shall be included in the
insurance coverage or added as an endorsement to the policy:
a. City and its officers, employees, agents, and volunteers shall be covered
as additional insureds with respect to each of the following: liability arising
out of activities performed by or on behalf of Consultant, including the
insured’s general supervision of Consultant; products and completed
operations of Consultant; premises owned, occupied, or used by
Consultant; and automobiles owned, leased, or used by the Consultant.
The coverage shall contain no special limitations on the scope of
protection afforded to City or its officers, employees, agents, or
volunteers.
b. The insurance shall cover on an occurrence or an accident basis, and not
on a claims-made basis.
c. An endorsement must state that coverage is primary insurance with
respect to the City and its officers, officials, employees and volunteers,
and that no insurance or self-insurance maintained by the City shall be
called upon to contribute to a loss under the coverage.
d. Any failure of CONSULTANT to comply with reporting provisions of the
policy shall not affect coverage provided to CITY and its officers,
employees, agents, and volunteers.
e. An endorsement shall state that coverage shall not be canceled except
after thirty (30) days' prior written notice by certified mail, return receipt
requested, has been given to the City. Consultant shall notify City within
14 days of notification from Consultant’s insurer if such coverage is
suspended, voided or reduced in coverage or in limits.
4.3 Professional Liability Insurance. Consultant, at its own cost and expense, shall
maintain for the period covered by this Agreement professional liability insurance for
licensed professionals performing work pursuant to this Agreement in an amount not less
than ONE MILLION DOLLARS ($1,000,000) covering the licensed professionals’ errors
and omissions.
4.3.1 Any deductible or self-insured retention shall not exceed $150,000 per claim.
4.3.2 An endorsement shall state that coverage shall not be suspended, voided,
canceled by either party, reduced in coverage or in limits, except after thirty (30)
days' prior written notice by certified mail, return receipt requested, has been given
to the City.
4.3.3 The following provisions shall apply if the professional liability coverages are
written on a claims-made form:
a. The retroactive date of the policy must be shown and must be before the
date of the Agreement.
b. Insurance must be maintained and evidence of insurance must be
provided for at least five years after completion of the Agreement or the
work, so long as commercially available at reasonable rates.
c. If coverage is canceled or not renewed and it is not replaced with another
claims-made policy form with a retroactive date that precedes the date of
this Agreement, Consultant must provide extended reporting coverage for
a minimum of five years after completion of the Agreement or the work.
The City shall have the right to exercise, at the Consultant’s sole cost and
expense, any extended reporting provisions of the policy, if the Consultant
cancels or does not renew the coverage.
d. A copy of the claim reporting requirements must be submitted to the City
prior to the commencement of any work under this Agreement.
4.4 All Policies Requirements.
4.4.1 Acceptability of insurers. All insurance required by this section is to be placed
with insurers with a Bests' rating of no less than A:VII.
4.4.2 Verification of coverage. Prior to beginning any work under this Agreement,
Consultant shall furnish City with certificates of insurance and with original
endorsements effecting coverage required herein. The certificates and
endorsements for each insurance policy are to be signed by a person authorized
by that insurer to bind coverage on its behalf. The City reserves the right to
require complete, certified copies of all required insurance policies and
endorsements. Failure to exercise this right shall not constitute a waiver of right to
exercise later.
4.4.3 Subcontractors. Consultant agrees to include with all subcontractors in their
subcontract the same requirements and provisions of this Agreement including the
Indemnification and Insurance requirements to the extent they apply to the scope
of the Subcontractor’s work. Subcontractors hired by Consultant agree to be
bound to Consultant and the City in the same manner and to the same extent as
Consultant is bound to the City under the Contract Documents. Subcontractor
further agrees to include these same provisions with any Sub-subcontractor. A
copy of the Owner Contract Document Indemnity and Insurance provisions will be
furnished to the Subcontractor upon request. The General Contractor shall require
all subcontractors to provide a valid certificate of insurance and the required
endorsements included in the agreement prior to commencement of any work and
will provide proof of compliance to the City.
4.4.4 Variation. The City may approve a variation in the foregoing insurance
requirements, upon a determination that the coverages, scope, limits, and forms of
such insurance are either not commercially available, or that the City’s interests
are otherwise fully protected.
4.4.5 Deductibles and Self-Insured Retentions. All self-insured retentions (SIR)
and/or deductibles must be disclosed to the City for approval and shall not reduce
the limits of liability. Policies containing any self-insured retention provision and/or
deductibles shall provide or be endorsed to provide that the SIR and/or
deductibles may be satisfied by either the named insured or the City.
4.4.6 Excess Insurance. The limits of insurance required in this Agreement may be
satisfied by a combination of primary and umbrella or excess insurance. Any
umbrella or excess insurance shall contain or be endorsed to contain a provision
that such coverage shall also apply on a primary and non-contributory basis for the
benefit of City (if agreed to in a written contract or agreement) before City’s own
insurance or self-insurance shall be called upon to protect City as a named
insured.
4.4.7 Notice of Reduction in Coverage. In the event that any coverage required by
this section is reduced, limited, or materially affected in any other manner,
Consultant shall provide written notice to City at Consultant’s earliest possible
opportunity and in no case later than five days after Consultant is notified of the
change in coverage.
4.5 Remedies. In addition to any other remedies City may have if Consultant fails to provide
or maintain any insurance policies or policy endorsements to the extent and within the time
herein required, City may, at its sole option exercise any of the following remedies, which
are alternatives to other remedies City may have and are not the exclusive remedy for
Consultant’s breach:
Obtain such insurance and deduct and retain the amount of the premiums for such
insurance from any sums due under the Agreement;
Order Consultant to stop work under this Agreement or withhold any payment that
becomes due to Consultant hereunder, or both stop work and withhold any payment,
until Consultant demonstrates compliance with the requirements hereof; and/or
Terminate this Agreement.
Section 5. INDEMNIFICATION AND CONSULTANT’S RESPONSIBILITIES. To the maximum
extent allowed by law, Consultant shall indemnify, keep and save harmless the City, and City
Councilmembers, officers, agents and employees against any and all suits, claims or actions arising out of
any injury to persons or property, including death, that may occur, or that may be alleged to have occurred,
in the course of the performance of this Agreement by a negligent act or omission or wrongful misconduct
of the Consultant or its employees, subcontractors or agents. Consultant further agrees to defend any and
all such actions, suits or claims and pay all charges of attorneys and all other costs and expenses arising
therefrom or incurred in connection therewith; and if any judgment be rendered against the City or any of
the other individuals enumerated above in any such action, Consultant shall, at its expense, satisfy and
discharge the same. Consultant’s responsibility for such defense and indemnity obligations shall survive
the termination or completion of this Agreement for the full period of time allowed by law. The defense and
indemnification obligations of this Agreement are undertaken in addition to, and shall not in any way be
limited by, the insurance obligations contained in this Agreement.
In the event that Consultant or any employee, agent, or subcontractor of Consultant providing services
under this Agreement is determined by a court of competent jurisdiction or the California Public Employees
Retirement System (PERS) to be eligible for enrollment in PERS as an employee of City, Consultant shall
indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions
for PERS benefits on behalf of Consultant or its employees, agents, or subcontractors, as well as for the
payment of any penalties and interest on such contributions, which would otherwise be the responsibility of
City.
Consultant/Subcontractor’s responsibility for such defense and indemnity obligations shall survive the
termination or completion of this Agreement for the full period of time allowed by law.
Section 6. STATUS OF CONSULTANT.
6.1 Independent Contractor. At all times during the term of this Agreement, Consultant shall
be an independent contractor and shall not be an employee of City. City shall have the
right to control Consultant only insofar as the results of Consultant's services rendered
pursuant to this Agreement and assignment of personnel pursuant to Subparagraph 1.3;
however, otherwise City shall not have the right to control the means by which Consultant
accomplishes services rendered pursuant to this Agreement. Notwithstanding any other
City, state, or federal policy, rule, regulation, law, or ordinance to the contrary, Consultant
and any of its employees, agents, and subcontractors providing services under this
Agreement shall not qualify for or become entitled to, and hereby agree to waive any and
all claims to, any compensation, benefit, or any incident of employment by City, including
but not limited to eligibility to enroll in the California Public Employees Retirement System
(PERS) as an employee of City and entitlement to any contribution to be paid by City for
employer contributions and/or employee contributions for PERS benefits.
6.2 Consultant No Agent. Except as City may specify in writing, Consultant shall have no
authority, express or implied, to act on behalf of City in any capacity whatsoever as an
agent. Consultant shall have no authority, express or implied, pursuant to this Agreement
to bind City to any obligation whatsoever.
Section 7. LEGAL REQUIREMENTS.
7.1 Governing Law. The laws of the State of California shall govern this Agreement.
7.2 Compliance with Applicable Laws. Consultant and any subcontractors shall comply with
all laws applicable to the performance of the work hereunder.
7.3 Other Governmental Regulations. To the extent that this Agreement may be funded by
fiscal assistance from another governmental entity, Consultant and any subcontractors
shall comply with all applicable rules and regulations to which City is bound by the terms of
such fiscal assistance program.
7.4 Licenses and Permits. Consultant represents and warrants to City that Consultant and
its employees, agents, and any subcontractors have all licenses, permits, qualifications,
and approvals of whatsoever nature that are legally required to practice their respective
professions. Consultant represents and warrants to City that Consultant and its
employees, agents, any subcontractors shall, at their sole cost and expense, keep in effect
at all times during the term of this Agreement any licenses, permits, and approvals that are
legally required to practice their respective professions. In addition to the foregoing,
Consultant and any subcontractors shall obtain and maintain during the term of this
Agreement valid Business Licenses from City.
7.5 Nondiscrimination and Equal Opportunity. Consultant shall not discriminate, on the
basis of a person’s race, religion, color, national origin, age, physical or mental handicap or
disability, medical condition, marital status, sex, or sexual orientation, against any
employee, applicant for employment, subcontractor, bidder for a subcontract, or participant
in, recipient of, or applicant for any services or programs provided by Consultant under this
Agreement. Consultant shall comply with all applicable federal, state, and local laws,
policies, rules, and requirements related to equal opportunity and nondiscrimination in
employment, contracting, and the provision of any services that are the subject of this
Agreement, including but not limited to the satisfaction of any positive obligations required
of Consultant thereby.
Consultant shall include the provisions of this Subsection in any subcontract approved by
the Contract Administrator or this Agreement.
Section 8. TERMINATION AND MODIFICATION.
8.1 Termination. City may cancel this Agreement at any time and without cause upon written
notification to Consultant.
Consultant may cancel this Agreement upon 30 days’ written notice to City and shall
include in such notice the reasons for cancellation.
In the event of termination, Consultant shall be entitled to compensation for services
performed to the effective date of termination; City, however, may condition payment of
such compensation upon Consultant delivering to City any or all documents, photographs,
computer software, video and audio tapes, and other materials provided to Consultant or
prepared by or for Consultant or the City in connection with this Agreement.
8.2 Extension. City may, in its sole and exclusive discretion, extend the end date of this
Agreement beyond that provided for in Subsection 1.1. Any such extension shall require a
written amendment to this Agreement, as provided for herein. Consultant understands and
agrees that, if City grants such an extension, City shall have no obligation to provide
Consultant with compensation beyond the maximum amount provided for in this
Agreement. Similarly, unless authorized by the Contract Administrator, City shall have no
obligation to reimburse Consultant for any otherwise reimbursable expenses incurred
during the extension period.
Notwithstanding the foregoing, the City Manager is authorized to approve up to two (2)
one-year extensions to this agreement. Any such extension shall not change the remaining
terms and conditions, including compensation as set forth in Exhibit B.
8.3 Amendments. The parties may amend this Agreement only by a writing signed by all the
parties.
8.4 Assignment and Subcontracting. City and Consultant recognize and agree that this
Agreement contemplates personal performance by Consultant and is based upon a
determination of Consultant’s unique personal competence, experience, and specialized
personal knowledge. Moreover, a substantial inducement to City for entering into this
Agreement was and is the professional reputation and competence of Consultant.
Consultant may not assign this Agreement or any interest therein without the prior written
approval of the Contract Administrator. Consultant shall not subcontract any portion of the
performance contemplated and provided for herein, other than to the subcontractors noted
in the proposal, without prior written approval of the Contract Administrator.
8.5 Survival. All obligations arising prior to the termination of this Agreement and all
provisions of this Agreement allocating liability between City and Consultant shall survive
the termination of this Agreement.
8.6 Options upon Breach by Consultant. If Consultant materially breaches any of the terms
of this Agreement, City’s remedies shall included, but not be limited to, the following:
8.6.1 Immediately terminate the Agreement;
8.6.2 Retain the plans, specifications, drawings, reports, design documents, and any
other work product prepared by Consultant pursuant to this Agreement;
8.6.3 Retain a different consultant to complete the work described in Exhibit A not
finished by Consultant; or
8.6.4 Charge Consultant the difference between the cost to complete the work
described in Exhibit A that is unfinished at the time of breach and the amount that
City would have paid Consultant pursuant to Section 2 if Consultant had
completed the work.
Section 9. KEEPING AND STATUS OF RECORDS.
9.1 Records Created as Part of Consultant’s Performance. The City agrees and
acknowledges that in accordance with Professional Standards of the American Institution
of CPA’s (AICPA), audit documentation is the property of the auditor, who may make
available to the City at the auditor’s discretion, copies of the audit documentation.
Notwithstanding the foregoing, all other reports, data, maps, models, charts, studies,
surveys, photographs, memoranda, plans, studies, specifications, records, files, or any
other documents or materials, in electronic or any other form, that Consultant prepares or
obtains pursuant to this Agreement and that relate to the matters covered hereunder shall
be the property of the City. Consultant hereby agrees to deliver those documents to the
City upon termination of the Agreement. It is understood and agreed that the documents
and other materials, including but not limited to those described above, prepared pursuant
to this Agreement are prepared specifically for the City and are not necessarily suitable for
any future or other use. City and Consultant agree that, until final approval by City, all
data, plans, specifications, reports and other documents are confidential and will not be
released to third parties without prior written consent of both parties.
9.2 Consultant’s Books and Records. Consultant shall maintain any and all ledgers, books
of account, invoices, vouchers, canceled checks, and other records or documents
evidencing or relating to charges for services or expenditures and disbursements charged
to the City under this Agreement for a minimum of three (3) years, or for any longer period
required by law, from the date of final payment to the Consultant to this Agreement.
9.3 Inspection and Audit of Records. Any records or documents that Section 9.2 of this
Agreement requires Consultant to maintain shall be made available for inspection, audit,
and/or copying at any time during regular business hours, upon oral or written request of
the City. Under California Government Code Section 8546.7, if the amount of public funds
expended under this Agreement exceeds TEN THOUSAND DOLLARS ($10,000.00), the
Agreement shall be subject to the examination and audit of the State Auditor, at the
request of City or as part of any audit of the City, for a period of three (3) years after final
payment under the Agreement.
Section 10. MISCELLANEOUS PROVISIONS.
10.1 Attorneys’ Fees. If a party to this Agreement brings any action, including an action for
declaratory relief, to enforce or interpret the provision of this Agreement, the prevailing
party shall be entitled to reasonable attorneys’ fees in addition to any other relief to which
that party may be entitled. The court may set such fees in the same action or in a
separate action brought for that purpose.
10.2 Venue. In the event that either party brings any action against the other under this
Agreement, the parties agree that trial of such action shall be vested exclusively in the
state courts of California in the County of Alameda or in the United States District Court for
the Northern District of California.
10.3 Severability. If a court of competent jurisdiction finds or rules that any provision of this
Agreement is invalid, void, or unenforceable, the provisions of this Agreement not so
adjudged shall remain in full force and effect. The invalidity in whole or in part of any
provision of this Agreement shall not void or affect the validity of any other provision of this
Agreement.
10.4 No Implied Waiver of Breach. The waiver of any breach of a specific provision of this
Agreement does not constitute a waiver of any other breach of that term or any other term
of this Agreement.
10.5 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of
and shall apply to and bind the successors and assigns of the parties.
10.6 Use of Recycled Products. Consultant shall prepare and submit all reports, written
studies and other printed material on recycled paper to the extent it is available at equal or
less cost than virgin paper.
10.7 Conflict of Interest. Consultant may serve other clients, but none whose activities within
the corporate limits of City or whose business, regardless of location, would place
Consultant in a “conflict of interest,” as that term is defined in the Political Reform Act,
codified at California Government Code Section 81000 et seq.
Consultant shall not employ any City official in the work performed pursuant to this
Agreement. No officer or employee of City shall have any financial interest in this
Agreement that would violate California Government Code Sections 1090 et seq.
Consultant hereby warrants that it is not now, nor has it been in the previous twelve (12)
months, an employee, agent, appointee, or official of the City. If Consultant was an
employee, agent, appointee, or official of the City in the previous twelve months,
Consultant warrants that it did not participate in any manner in the forming of this
Agreement. Consultant understands that, if this Agreement is made in violation of
Government Code §1090 et.seq., the entire Agreement is void and Consultant will not be
entitled to any compensation for services performed pursuant to this Agreement, including
reimbursement of expenses, and Consultant will be required to reimburse the City for any
sums paid to the Consultant. Consultant understands that, in addition to the foregoing, it
may be subject to criminal prosecution for a violation of Government Code § 1090 and, if
applicable, will be disqualified from holding public office in the State of California.
Principals and those performing work for City of Dublin may be required to submit a
California Fair Political Practices Commission (FPPC) Form 700: Statement of Economic
Interests documenting potential financial conflicts of interest. For additional information,
proposers should refer to the FPPC website at http://www.fppc.ca.gov/Form700.html.
10.8 Solicitation. Consultant agrees not to solicit business at any meeting, focus group, or
interview related to this Agreement, either orally or through any written materials.
10.9 Contract Administration. This Agreement shall be administered by the City Manager
("Contract Administrator"). All correspondence shall be directed to or through the Contract
Administrator or his or her designee.
10.10 Notices. Any written notice to Consultant shall be sent to:
Badawi & Associates
Attn: Ahmed Badawi
180 Grand Avenue, Suite 1500 Oakland, CA 94612
Any written notice to City shall be sent to:
The City of Dublin
Attn: Colleen Tribby
100 Civic Plaza
Dublin, CA 94568
10.11 Integration. This Agreement, including Exhibits A and B, represents the entire and
integrated agreement between City and Consultant and supersedes all prior negotiations,
representations, or agreements, either written or oral.
IN WITNESS HEREOF, the parties have caused their authorized representatives to
execute this Agreement on the 21st day of November, 2017.
CITY OF DUBLIN CONSULTANT
_________________________________ ______________________________
Christopher L. Foss, City Manager Ahmed M. Badawi, Partner
Attest:
____________________________
Caroline Soto, City Clerk
Approved as to Form:
____________________________
John Bakker, City Attorney
EXHIBIT A
SCOPE OF SERVICES
As presented in the response to the Request For Proposal submitted by Badawi & Associates dated
September 27, 2017, Badawi & Associates shall provide annually the following services at the fixed not-to-
exceed price shown in Exhibit B.
1. Comprehensive Annual Financial Report (CAFR)
As part of the base scope of work, the auditor will required to prepare the general purpose financial
statements and combining statements for the City’s Comprehensive Annual Financial Report
(CAFR). The auditor will express an opinion on the basic financial statements in accordance with
established accounting standards.
2. Single Audit Report
In the event that the City has expenditures from Federal sources that exceed $750,000, a Single
Audit shall be performed in accordance with the provisions of the Single Audit Act issued by the
Federal government.
3. Special Purpose Audits
Preparation of financial and compliance audits required by Alameda County Transportation
Commission, such as Measure B/BB (transportation sales tax), Measure F (vehicle registration
fee), and Transportation Development Act programs.
4. Appropriation (GANN) Limit Report
Annually the City must obtain a report prepared by Consultant based on agreed upon auditing
procedures related to the City’s GANN Limit in compliance with Proposition 111, Article XIII B –
review of Appropriation Limit Calculation.
5. State Controller’s Reports
Consultant will prepare and submit to the State Controller the “Annual Report of City Financial
Transactions” and the “Annual Streets and Highways Report”.
6. Other Auditor Reports
Consultant will issue as deemed appropriate a separate “Management Letter” that includes
recommendations for improvements in internal control, accounting procedures, and other
significant observations that are considered to be non-reportable conditions.
The full response made by Consultant to the Request for Proposal shall be incorporated by
reference in fully describing the work schedule and performance of tasks by the Consultant (Exhibit
C).
The scope of services is for auditing and financial report preparation over a five year period. The
term of the agreement is for three years with the option of two one-year extensions.
EXHIBIT B
COMPENSATION SCHEDULE
The following is the not-to-exceed compensation by scheduled tasks to be performed annually as described
in the Scope of Services.
Annual Cost by Task
Tasks FY2018 FY2019 FY2020 FY2021 FY2022
City Audit and related reports (CAFR) 31,130 32,060 33,035 33,035 33,035
Single Audit (if required) 3,000 3,090 3,180 3,180 3,180
Special Purposes Audit Related Reports
(Measure B, Measure BB, VRF, and
TDA)
9,780 10,070 10,370 10,370 10,370
GANN Limit 610 630 650 650 650
State Controller’s Report 3,660 3,770 3,880 3,880 3,880
State Controller’s Street Report 1,310 1,350 1,390 1,390 1,390
Total for Fiscal Year (not to exceed)* $49,490 $50,970 $52,505 $52,505 $52,505
* Pricing include printing and binding all City reports and providing PDF files for web posting
Hourly Rates
The following rates are applicable should the City require additional services that are agreed to in writing prior to
being performed and are beyond the fixed price Scope of Services above.
Position Hourly Rate
Partner $200
EQR 200
Manager 150
Senior 125
Staff 100
IT 150
Admin. 75
EXHIBIT C
BADAWI & ASSOCIATES’ TECHNICAL PROPOSAL FOR PROFESSIONAL AUDITING SERVICES
FOR THE CITY OF DUBLIN
2885017.1
City of
Dublin
TECHNICAL PROPOSAL
For Professional Auditing Services
for the City of Dublin
For the fiscal years ending June 30, 2018 to 2020, with
the option of two one-year extensions
September 29, 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
Page
Letter of Transmittal 1
Independence 3
Firm Qualifications and Experience
- Insurance
- License to Practice in California
3
3
3
- Firm Qualifications 3
- Technical Approach 4
- Firm Experience 5
- Additional Activities 5
- Quality Control Review
- GASB 68 Assistance
- Free Services
- Federal or State Desk Review
- Disciplinary Action
- Lost Clients and Pending Legislation
6
6
6
8
8
8
Partner, Supervisory and Staff Qualifications and Experience 9
Similar Engagements with other Government Entities
Understanding of Services to be Provided
Specific Audit Approach
15
19
- Objectives for Our Services 20
- Audit Approach
- Technical Approach
- Audit Schedule
20
21
24
Discussion of Relevant Accounting Issues
27
Conclusion 28
Appendix A – References
29
City of Dublin
Table of Contents
Address: 180 Grand Avenue, Suite 1500 Oakland, CA 94612 • Phone: 510.768.8251 • Fax: 510.768.8249
September 29, 2017
Ms. Yuliana Tjeng
Senior Accountant
City of Dublin
100 Civic Plaza
Dublin, CA 94568
Dear Ms. Tjeng,
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 Dublin (the “City”) for the fiscal years ending June 30,
2018 to 2020 with the option of extending the contract for two one-year extensions. 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 applicable
• Gann Limit
• Alameda County Transportation Authority –
Measure B/BB/F Report
• TDA Report
• State Controller’s Report – City of Dublin
• State Controller’s Report – Annual Street
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
2
Ms. Yuliana Tjeng
Senior Accountant
City of Dublin
Page 2
We are committed to performing the required work, completing the audit, and issuing the necessary auditors’
reports.
We believe we are the best qualified to perform the audit because our audit staff includes individuals well versed in
municipal auditing and reporting requirements. We have performed auditing and consulting engagements for
numerous cities throughout California. We will be responsive to the needs of the City, we understand the City’s
operational environment, and pledge 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
least disruption to the City’s office operations. The foundation of the audit approach is based on communication
coupled with a strong knowledge of City operations and detailed planning at the initial stages of the audit. Open
communication lines with all parties of the Engagement Team and City Management and staff throughout the
engagement 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
City of Dublin Technical Proposal
3
Independence
The Firm is independent of the City of Dublin as defined by the GAO’s Standards for Audit of
Governmental Organizations, Programs, Activities and Functions, and the AICPA and California
State Society of Certified Public Accountants as promulgated in various auditing and professional
standards.
Insurance
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 City which shows the minimum
requirements identified by 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. Its State number is
COR6823.
The Firm has met all required State and local laws, rules, and regulations.
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 services 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.
Firm
Qualifications
and
Experience
Independence
City of Dublin Technical Proposal
4
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 CAFR.
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.
City of Dublin Technical Proposal
5
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.
City of Dublin Technical Proposal
6
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’ Cost Sharing Plans for which individualized actuarial valuations
are no longer prepared. 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 the 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 is attached for your review.
City of Dublin Technical Proposal
7
City of Dublin Technical Proposal
8
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.
City of Dublin Technical Proposal
9
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.
The Engagement Team will be led by Ahmed Badawi, CPA. Mr. Badawi’s background includes
over twenty years of municipal auditing 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, 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.
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
AICPA. He will serve as the Audit Manager.
Engagement Partner
Ahmed Badawi
CPA
Audit Senior
Professional
Audit Staff
Audit Manager
Mitesh Desai
CPA
IT Specialists
Robert Wucher
Engagement Quality
Reviewer
Professional
Audit Staff
Partner,
Supervisory,
and Staff
Qualifications
and
Experiences
City of Dublin Technical Proposal
10
The third 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.
Each member of the Engagement Team participates in continuing education programs offered by
the AICPA 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, AICPA 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.
During the year, professional staff members are sent to various educational sessions sponsored by
the AICPA 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.
City of Dublin Technical Proposal
11
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.
City of Dublin Technical Proposal
12
Resumes of Engagement Team
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:
Financial Single RDA PFA Enterprise
Audit Audit Audit Audit Fund Other
Cities:
Antioch X X X X X
Albany X X X X
Berkeley X X X X X
Burlingame X X X
Dublin X X X
Fremont X X X X
Pleasanton X X X X
Redwood City X X X X X
Richmond X X X X X X
San Bruno X X X X X
San Leandro X X X X
San Mateo X X X X X
Turlock X X X X X X
Union City X X X X X
Walnut Creek X X X X X
Counties:
Santa Cruz County X X X X X X
Contra Costa County X X X X X X
County of Lassen X X X X
Special Districts and Other:
Port of Redwood City X X X
Marin Municipal Water District X X
Coastside Fire Protection District X X
Alameda County Water District X X X
Cosumnes Community Services District X X
East Bay Regional Park District X X X
Metropolitan Transportation Commission X
South Bayside System Authority X X
Stanislaus County Childcare X X
West County Wastewater District X X
Health Care:
Alameda County Medical Center X X X
Family HealthCare Network X X
Services Provided
• 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 current CPE educational requirements to perform audits on governmental agencies
City of Dublin Technical Proposal
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Mitesh Desai, Certified Public Accountant – 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
Financial Single RDA PFA Enterprise
Audit Audit Audit Audit Fund Other
Cities:
Antioch X X X
Albany X
Barstow X X X X
Berkeley X X X X X
Buena Park X X X X
Foster City X X X X X
Fremont X X X X X
East Palo Alto X X X X
Lemon Grove X X
Newark X X X X
Menlo Park X X X
Oakdale X X X X
Pittsburg X X X X X
Placerville,X X X X
Redwood City X X X X
Rio Vista X X X X
San Mateo X X X X X
Susanville X
Turlock X X X
Union City X X X
Vacaville X X X X X
Yountville X X X
Counties:
Contra Costa X X X X X X
Glenn X
Santa Cruz X X X X X X
Other:
Alameda County Water District X X
Alameda County Medical Center X X X
Castro Valley Sanitary District X
Cosumnes Community Services District X
Golden Valley Health Centers X X
Marin Municipal Water District X
West County Wastewater District X X
Contra Costa Child Development Programs X X
Stanislaus County Childcare X X
Services Provided
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.
City of Dublin Technical Proposal
14
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, Winning 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
City of Dublin Technical Proposal
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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.
* Indicates cities with population over 50,000
** Indicates cities with governmental revenues over 100 million and population over 50,000
Similar
Engagements
with Other
Governmental
Entities
City of Dublin Technical Proposal
16
City
Client
Since Hours
Engagement
Partner Principal Contact CAFR
GFOA
Award
RDA/
Successor
Agency
Single
Audit TDA
Child
Care
Audit
Housing
Authority
Enterprise
Funds
**Berkeley 2008 1800 Ahmed
Badawi
Mr. Henry Oyekanmi
Finance Director
(510)981-7300
hoyekanmi@ci.berkeley.ca.us
Yes Yes X X X X
**Redwood
City 2006 600 Ahmed
Badawi
Mr. Derek Rampone
Financial Services Manager
(650)780-7071
drampone@redwoodcity.org
Yes Yes X X X X
**San Mateo 2004 500 Ahmed
Badawi
Mr. Drew Corbett
Finance Director
(650)522-7104
dcorbett@cityofsanmateo.org
Yes Yes X X X X
**Vacaville 2008 600 Ahmed
Badawi
Mrs. Davina Hatfield
Accounting Manager
(707)449-5104
dhatfield@cityofvacaville.com
Yes Yes X X X X X
*Union City 2006 600 Ahmed
Badawi
Ms. Gayle Okada
Supervising Accountant
(510)675-5352
gayleo@unioncity.org
Yes Yes X X X X
*Antioch 2005 470 Ahmed
Badawi
Ms. Dawn Merchant
Finance Director
(925)779-6135
Dmerchant@ci.antioch.ca.us
Yes Yes X X X X
Menlo Park 2014 514 Ahmed
Badawi
Mr. Rosendo Rodriguez
Finance Director
(650)330-6640
RRodriguez@menlopark.org
Yes Yes X X X X X
Newark 2009 550 Ahmed
Badawi
Ms. Susie Woodstock
Director of Administrative
Services
(510)578-4804
susie.woodstock@newark.org
Yes Yes X X X
Albany 2008 380 Ahmed
Badawi
Mr. David Glasser
Finance & Administrative
Service Director
(510)528-5730
Yes Yes X X X
Rio Vista 2009 480 Ahmed
Badawi
Ms. Mary Lee Sharer
Finance Manager
(707)374-6451 Ext. 1118
mlsharer@ci.rio-vista.ca.us
No N/A X X X X
Barstow 2012 550 Ahmed
Badawi
Ms. Cindy Prothro
Finance Director
(760)255-5115
cprothro@barstowca.org
Yes Yes X X X
Buena Park 2013 500 Ahmed
Badawi
Mr. Sung Hyun
Finance Director
(714)562-3717
shuyn@buenapark.com
Yes Yes X X X
Susanville 2013 450 Ahmed
Badawi
Mr. Jared Hancock
City Administrator
(530)252-5100
jhancock@cityofsusanville.org
Yes CSMFO X
East Palo
Alto 2014 450 Ahmed
Badawi
Ms. Brenda Olwin
Finance Director
(650)853-3122
bolwin@cityofepa.org
Yes Yes X X X
Millbrae 2015 400 Ahmed
Badawi
Mr. Kenneth Spray
Finance Director
(650)259-2433
kspray@ci.millbrae.ca.us
Yes N/A X X
Calimesa 2013 350 Ahmed
Badawi
Ms. Bonnie Johnson
Finance Director
(909)795-9801 ext 231
bjohnson@cityofcalimesa.net
No N/A
Yountville 2015 300 Ahmed
Badawi
Mrs Maria Ojeda
Finance Director
(707)944-8851
rarrow@yville.com
No N/A X
Lemon
Grove 2013 350 Ahmed
Badawi
Mr. Gilbert Rojas
Finance Director
(619)825-3803
grojas@lemongrove.ca.gov
No N/A X X
Crescent
City 2014 300 Ahmed
Badawi
Ms. Linda Leaver
Finance Director
(707)464-7483 x224
lleaver@crescentcity.org
No N/A X X X X
City of Dublin Technical Proposal
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The table below lists all special district engagements:
Special District
Client
Since Hours
Engagement
Partner Principal Contact CAFR
GFOA
Award
Single
Audit
Enterprise
Funds
Florin Resource
Conservation
District/ Elk
Grove Water
District
2015 350 Ahmed
Badawi
Mr. Jim Malberg
Finance Manager/Treasurer
(916)685-3556
jmalberg@egwd.org
Yes Yes X
Marin Municipal
Water District 2010 350 Ahmed
Badawi
Mrs. Mikyung Pustelnik
Finance Manager
(415)945-1410
mpustelnik@marinwater.org
Yes Yes X X
Cosumnes
Community
Services District
2008 350 Ahmed
Badawi
Mr. Jeff Ramos
General Manager
(916)405-7150
jefframos@yourcsd.com
Yes Yes
Monterey Bay
Unified Air
Pollution Control
District
2016 200 Ahmed
Badawi
Ms. Joyce Giuggre
Administrative Services
Manager
(831)-718-8019
jgiuffre@mbard.org
No N/A
Port of
Redwood City 2006 200 Ahmed
Badawi
Mr. Rajesh Sewak
Manager of Finance & Admin.
(650)306-4150
rsewak@redwoodcityport.com
No N/A X X
Central County
Fire Department 2012 150 Ahmed
Badawi
Ms. Jan Cooke
Finance Director
(650)375-7408
jcooke@hillsborough.net
Yes Yes
Aptos La Selva
Fire District 2016 120 Ahmed
Badawi
Ms. Tracy New
Director of Business Services
6934 Soquel Drive
Aptos, CA 95003
(831)-685-6690
No N/A
City of Dublin Technical Proposal
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What Our Clients Say 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.
Sung Hyun
Finance Director
City of Buena Park
Jim Malberg
Finance Manager
Florin Resource Conservation District/
Elk Grove Water District
“I would recommend Badawi & Associates to anyone seeking professional and
knowledgeable audit services”
“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.”
City of Dublin Technical Proposal
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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, 2018 to 2020, with the option of extending
the contract for each of the two subsequent fiscal years.
The Firm will:
• 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
Gann Appropriation Limit Calculation Report
Alameda County Transportation Authority – Measure B/BB/F Reports
Transportation Development Act Audit
State Controller’s Report – City of Dublin
State Controller’s Report – Annual Street Reports
• 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.
Understanding
of Services to be
Provided
City of Dublin Technical Proposal
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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
in accordance with generally accepted auditing standards and to express our opinion on the
fairness of presentation of such financial statements in conformity with generally accepted
accounting principles.
Additionally, we believe that another real value of our audit lies in meeting other objectives at no
additional cost. The following are other objectives of our services that have important benefits to
the City:
• To offer substantive observations and recommendations relating to
accounting and operating control policies and procedures.
• To identify opportunities for operating efficiencies and isolate candidate
activities for cost reduction opportunities.
• To perform a professional audit in an efficient and effective way to
minimize disruption to the office operations.
• To offer ongoing advisory services to assist in the running of the operation
and implementation of improved operating procedures.
The engagement will be conducted within the framework of the Firm's quality control program
which includes the use of audit programs, careful planning, use of computerized audit software and
internal control evaluation & documentation software, and objective review procedures. On-site
staff will use Firm supplied portable 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:
1) Generally accepted auditing standards established by the AICPA.
2) The standards contained in Government Auditing Standards issued by the GAO.
3) Provisions of the Single Audit Act and the Uniform Guidance.
4) Requirements issued by the California State Controller’s office.
5) Other requirements as required.
Specific Audit
Approach
City of Dublin Technical Proposal
21
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:
1. 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.
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.
3. 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.
4. 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.
City of Dublin Technical Proposal
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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.
6. 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.
7. 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.
8. 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.
9. 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.
10. 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.
11. 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.
City of Dublin Technical Proposal
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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.
13. Listing of Schedules and Tables (anticipated to be prepared by the City):
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.
• 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 Forward &
Supporting Schedules
• GASB 54 Fund Balance Roll Forward
Schedule
• Interfund Transaction Schedules
14. Computer Software:
The firm maintains a variety of software 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 I.T. 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.
City of Dublin Technical Proposal
24
2018
Period Audit Tasks
►Review and obtain copies of key work papers of prior audit firm.
►Entrance conference with City Management to discuss audit approach, timing,
assistance, and issues
►Review and evaluate the City's accounting and financial reporting. Prepare an
overall memo of recommendations, potential issues, and suggestions for
improvements.
►Prepare overall memo to City confirming audit procedures, timing, and assistance.
►Prepare detailed audit work plan and audit programs, audit budget and staffing
schedule, and list of schedules to be prepared by City staff, and provide it to City
Management.
►Meeting with key Finance Division personnel.
►Obtain and document understanding of key internal control systems through walk-
throughs, interviews of staff, and review of supporting documentation:
General ledger system.
Budgeting system.
Revenue, utility billing, accounts receivable, and cash collections.
Purchasing, expenditures, accounts payable, and cash disbursements.
Payroll.
Federal Financial Assistance.
Other systems.
►Identify control risks.
►Evaluate IT 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 compliance with City policies.
►Conduct fraud assessment procedures.
►Assess degree of risk for material misstatement.
►Provide to the City’s management a memo concerning management letter points
and identify issues, if any.
Interim Audit Procedures:
March - Planning and Administration
- Internal Control Evaluation
April
City of Dublin Technical Proposal
25
2018
Period
►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.
►Hold progress conference with City Management.
►Hold exit conference with City Management.
September - 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.
►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.
►Coordinate Single Audit efforts with the Financial Audit efforts.
►Communicate findings to City Management.
►Other Compliance
Audit Tasks
- Single Audit Compliance
- Other TasksApril
City of Dublin Technical Proposal
26
Audit Schedule, Continued
2018
Period
►Prepare drafts of City prepared CAFR
►Prepare draft of Single Audit Reports concerning internal control structure,
compliance with laws and regulations, and administering of federal financial
assistance programs.
►Prepare other reports as required.
October -Provide drafts of reports to City Management for review.
October - Provide revised final drafts of all required reports to the City for approval
November - Final Audit Reports, Financial Statements, and Single Audit Reports delivered.
Audit Tasks
- Audit ReportsOctober
City of Dublin
27
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:
o 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.
o Review Annual Financial Reports for financial reporting conformance awards issued by
CSMFO and GFOA.
o Review and evaluate degree of compliance with the various GASBs in effect.
o Review degree of compliance with infrastructure obligations and regulatory provisions.
• Internal Control Structure:
o Review and evaluate the City’s internal control functions and ascertain compliance with
proper internal control philosophies.
o Review computer system processes and controls and evaluate adequacy of the control
environment.
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 – An Amendment of
GASB Statement No. 14
• 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
• Statement 85 – Omnibus 2017
• Statement 86 – Certain Debt Extinguishment Issues
2019
• Statement 83 – Certain Asset Retirement Obligations
2020
• Statement 84 – Fiduciary Activities
2021
• Statement 87 – Leases
Discussion of
Relevant
Accounting
Issues
City of Dublin
28
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:
• 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.
* * * * * * * * * * * * * * * * *
Conclusion
City of Dublin
29
References
1) City of Berkeley
• Scope of Work: Comprehensive Annual Financial Report, Gann Limit, SAS114, Measure B (Alameda
County), Vehicle Registration Fee Audit (Alameda County), Due Diligence Reviews for the RDA
Successor Agency
• Contract Amount: $188,000
• Engagement Partner: Ahmed Badawi
• Principal Contact:
Mr. Henry Oyekanmi
Finance Director
(510)981-7332
hoyekanmi@ci.berkeley.ca.us
2) 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
• Contract Amount: $60,000
• Engagement Partner: Ahmed Badawi
• Address: 330 W 20th Avenue, San Mateo, CA 94403
• Principal Contact:
Mr. Drew Corbett
Director of Finance
Phone: (650)522-7102
dcorbett@cityofsanmateo.org
3) 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
• Contract Amount: $55,000
• Engagement Partner: Ahmed Badawi
• Address: 37101 Newark Blvd, Newark, CA 94560
• Principal Contact:
Mrs. Susie Woodstock
Director of Administrative Services
Phone: (510)578-4804
Fax: (510)578-4358
susie.woodstock@newark.org
4) City of Barstow
• Scope of Work: Comprehensive Annual Financial Report, Single Audit, Gann Limit, SAS 114,
Barstow Fire Protection District, Odessa Water District
• Contract Amount: $71,152
• 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
cprothro@barstowca.org
Appendix A
City of Dublin
30
5) City of Buena Park
• Scope of Work: Comprehensive Annual Financial Report, Single Audit, Gann Limit, SAS 114, Buena
Park Foundation
• Contract Amount: $30,735
• Engagement Partner: Ahmed Badawi
• Address: 6650 Beach Boulevard, 1st Floor, Buena Park, CA 90622
• Principal Contact:
Mr. Sung Hyun
Finance Director
Phone: (714)562-3713
shyun@buenapark.com
6) City of Calimesa
• Scope of Work: Basic Financial Statements, Gann Limit, SAS 114
• Contract Amount: $25,462
• Engagement Partner: Ahmed Badawi
• Address: 908 Park Avenue, Calimesa, CA 92320
• Principal Contact:
Ms. Bonnie Johnson
City Manager
Phone: (909)795.9801
bjohnson@cityofcalimesa.net
7) 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),
• Contract Amount: $60,000
• 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@cityofepa.org