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HomeMy WebLinkAboutReso 141-17 Consulting Services Agreement with Badawi & Associates to Provide Auditing Services RESOLUTION NO. 141 — 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, by the following vote: AYES: Councilmembers Biddle, Goel, Gupta, Hernandez and Mayor Haubert NOES: ABSENT: ABSTAIN: kyq -Al- Mayor ATTEST: r'e4 City Clerk Reso No. 141-17, Adopted 11/21/2017, Item No. 4.4 Page 1 of 1 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 etseq.,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 9,780 10,070 10,370 10,370 10,370 (Measure B, Measure BB, VRF, and TDA) 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 •Cityof 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 aa..b-acpa.com 4, 1 tal>BADAWI&ASSOCIATES CERTIFIED Dont ic ACCOUNTANTS City of Dublin Table of Contents Page Letter of Transmittal 1 Independence 3 Firm Qualifications and Experience 3 - Insurance 3 - License to Practice in California 3 - Firm Qualifications 3 -Technical Approach 4 - Firm Experience 5 -Additional Activities 5 - Quality Control Review 6 - GASB 68 Assistance 6 - Free Services 6 - Federal or State Desk Review 8 - Disciplinary Action 8 - Lost Clients and Pending Legislation 8 Partner, Supervisory and Staff Qualifications and Experience 9 Similar Engagements with other Government Entities 15 Understanding of Services to be Provided 19 Specific Audit Approach - Objectives for Our Services 20 -Audit Approach 20 -Technical Approach 21 -Audit Schedule 24 Discussion of Relevant Accounting Issues 27 Conclusion 28 Appendix A— References 29 (@) P BADAWI&.ASSOCIA.fIS CERTIFIED PUBLIC ACC.X.DUN FAN FS 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 • State Controller's Report—City of Dublin • Gann Limit • State Controller's Report—Annual Street • Alameda County Transportation Authority— Report Measure B/BB/F Report • TDA Report We will also apply limited audit procedures to Management's Discussion and Analysis (MD&A) and required supplementary information. In addition, we will prepare the management letter containing comments and recommendations regarding our review and evaluation of the systems of internal control and accounting procedures. This proposal will highlight the background of the partners and staff assigned to the engagement, summarize our experience in the governmental area, and describe our approach to auditing the City. This proposal demonstrates our ability to render the quality examination and to perform the necessary accounting and auditing services requested by the City on a timely basis. As a partner of the Firm, I will be the primary contact for negotiation of the contract. Additionally, I have been authorized to legally bind the Firm. You may contact me at the following address and phone number: Mr.Ahmed Badawi, CPA Badawi &Associates Certified Public Accountants 180 Grand Ave. Suite 1500 Oakland, CA 94612 Telephone: (510)768-8244 E-mail: abadawi@b-acpa.com Address: 1_.D Grand Avenue, Site 1500 0 K nd. _A 94612 Phone: 510.708.82 Fax:510.768.8249 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 2 B A SO CIA1 ES City of Dublin Technical Proposal Independence 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 Firm Qualifications Qualifications Badawi & Associates was founded by Mr. Ahmed Badawi. Mr. Badawi has over 20 years of and 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 Experience 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. 3 COD "F, BADAWI&ASSOCIA1"ES City of Dublin Technical Proposal The Engagement Partner assigned to the City, Mr. Ahmed Badawi. Mr. Badawi has over 20 years of government audit experience. He,is a member of various governmental committees, has actively participated in the development of accounting and audit guidelines for the governmental sector, and is an instructor for the California Society of Municipal Finance Officers. The professional staffs assigned to the Engagement are qualified and experienced. Each individual of the Engagement Team has several years of experience and has conducted or participated in numerous municipal audits of various sizes. Their understanding of governmental operations and the various authoritative guidelines will provide the where-with-all to perform the audit in an efficient and effective manner with minimal disruption to the City's finance department. Technical Approach The approach to the audit has been designed to meet the audit requirements of the various authorities with the least disruption to the City's operations. The foundation of the audit approach is based on communication coupled with a strong knowledge of City operations and detailed planning at the initial stages of the audit. Open communication lines with all parties of the Engagement Team and City Management and staff throughout the engagement eliminate "surprises". Initial planning and proper assignment of duties to experienced personnel provide for an effective and efficient audit process. Consequently, inefficiencies, disruptions, and lack of understanding are kept to a minimum. The audit approach will consist of four phases: Initial Planning Meeting: The Engagement Partner and Manager will meet with City Management to discuss the audit approach, identify specific needs of City Management, and familiarize themselves with City policies and practices. Interim: The Engagement Team members including the Engagement Team Partner will perform the internal control reviews, test transactions, evaluate compliance with Single Audit Act requirements, identify potential audit issues that need to be addressed, perform limited confirmation procedures, and develop a clear understanding between the Engagement Team and City Management of the year end audit responsibilities and assignments. In addition, we strive to complete many of the year-end audit tasks during the interim phase to ensure a smoother audit process. We will work with the City on providing a list of those tasks that we will target to complete during interim and work with the City on how to complete them to minimize the amount of effort and time needed at year-end which in turn will assist the City in meeting its goal of issuing the 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. 4 4 Cip BADAWISZASSOCIAVES City of Dublin Technical Proposal 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 • Waste • Investment • Redevelopment Management Activities Agencies Authorities and • Landfills • Financing Operations • Enterprise Funds Authorities • Pension Plans • Airports • Housing • Child Care • Transportation Authorities Operations Operations • Special Districts •• Joint Power • Federal and State • Water Districts Authorities Grants Additional Activities We offer a full range of accounting and finance services to the governmental sector. These services include: • Financial audits • Operational reviews • Compliance audits • Technical guidance on existing and • Tax advice upcoming accounting issues • Development of financial and • Training seminars accounting policies and procedures • Pension/profit-sharing plans • Investment review and compliance • Performance audits evaluation Business consulting Consequently, Firm personnel are well qualified to perform the services expected by the City. • 5 4 COD BADA I CASSOCIA IS CL R:P to t,1 3r .ACC-( ,t tt City of Dublin Technical Proposal Client Training Seminar The Firm hosts an annual update on recent technical accounting and finance issues affecting the governmental area. This all day session reviews new and anticipated pronouncements from GASB, discusses future issues under consideration by GASB, reviews accounting treatment of various transactions where issues may arise, and provides a general-overview of state and federal compliance issues. All of our clients are invited to attend, free of charge. The one day session qualifies for CPE under the rules of the State Board of Accountancy and is held in locations throughout the Bay Area. CSMFO Training The Firm provides a one-day training session entitled "Introduction to Governmental Accounting"to members of CSMFO. Firm personnel developed the class materials and teach the sessions. Approximately 10 sessions are held annually at various locations throughout the State. The Firm provides these sessions for only the cost of materials to CSMFO in keeping with its philosophy to support the industry in which it serves. GASB 68 Firm Developed Tools and Assistance The Firm has developed tools to assist our clients with GASB 68 implementation or preparation of journal entries for the CaIPERS' 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. 6 $, AWIAS 0 IAS AccouN City of Dublin Technical Proposal j,,siN I Eitiv,CPA CPA liecatiwor LIP tie Ceaitied MU amuntagitl 'Fp\Efulinti,s tonsuttanis System Review Report Badawi&Associates Oakland.California; and the Peer Review Committee of the California Society of CPAs We have reviewed the system of quality control for the accounting and auditing practice of Badawi& Associates (the firm) in effect for the year ended February 29,2016. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified ; Public Accountants. As part of our peer review, we considered reviews by regulatory entities,ii'applicable,in determining the nature and extent of our procedures The firm is responsible for desioning a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable i professional standards in all material respects. Our responisbility is to express an opinion on the design of the system of quality control and the firm's compliance therewith based on our review. The nature,objectives.scope, limitations of;and the procedures performed '40 in a System Review are described in the standards at www.aicori.ora/orsummarv. 7,0 • /;.'"--; 744s As required by the standards, engagements selected for review included engagements performed under Government Auditing Standards. • In our opinion, time system of quality control for the accounting and auditing practice of 1'1947; Badawi & Associates in effect for the year ended February 29, 2016, has been suitably desinned and complied with to provide the firm with reasonable assurance of performing tV,,,,,..k.4;4F7:4140:4'1,:iiirf.14:4?-0.t'Z444. and-reporting in conformity with applicable professional standards in all material respects. Firms can receive a ratinij of p(isc.pass iii it deficienty(ies) or fad. Badawi Lk,: Associates 1°A*Treikkiti4,:;171,-.: has received a peer review rating of pass. 0 19 .744:',:r% -°' :1*; 404*93i: ..fj8gol4006::";„„ `:AV9944033: LL P *4%1" ° Ontario,California :#46.4Y1dct.4tY4F.e.V.-.:°. . May 20,2016 ^7, ; pA ' 4 • ^ INA A et-r M ERICA C. %INTERNATIONAL GowlicalvathlrAmaIlQaai 7 COD i4 BADAWI ASSOCIAL ES City of Dublin Technical Proposal B&A have policies and procedures to ensure it hires only qualified people, that it properly supervises them and provides professional training, that it advances them to responsibilities they are capable of handling, and that it provides them with necessary technical resources.All members of B&A are very familiar with the stringent quality control standards established by the AICPA. The Firm is a member of the AICPA Government Audit Quality Center. The Firm is a member of the AICPA Private Companies Practice Section. Federal or State Desk Reviews The Firm has had no negative federal or state reviews in the past three (3) years. Disciplinary Action There has not been any state or federal disciplinary actions taken or pending against the Firm nor any findings to report. Lost Clients and Pending Litigations: The Firm has not experienced termination of any contracts before completion, and has not experienced any lawsuits or legal actions that have been resolved or are currently pending in the prior five years. 8 13ADAWI SZASSOCIATES City of Dublin Technical Proposal Partner, 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 Supervisory, wide range of technical capabilities which will provide the City with not only the technical support and Staff 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 Qualifications and Compliance Partners of the Firm. and Experiences gageme t#� sr �, A d Sada evt were ,r ����aEiPA A-7%��% 1 lT Specialists . Robert,Wucht 0. �. ,Audit[anage sOsh Decal CFA Audit Senio 607%-r-10111414 1 ' ` Professional� Professional-V,0 Audit Staff � AAudit S a`ff' ` 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. C . BADAWI ASSOCIATES 9 t City of Dublin Technical Proposal 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. 10 4 ta BADAWI&ASSOCIATES City of Dublin Technical Proposal Staff Retention and Continuity: The Firm's policy on providing service to our clients includes a commitment to maintaining continuity of audit personnel. We cannot guarantee that our staff will remain with the Firm. However, to encourage our staff to remain with us, we pay competitive wage rates; offer promotional opportunities; provide state-of-the-art equipment and excellent working conditions; and offer various benefits, such as retirement plans, medical plans, profit sharing programs, educational benefits, and other such benefits. Additionally, we will guarantee that any staff member assigned to this engagement will return to the City in subsequent years if he or she is still with the Firm. We can also guarantee that the partner will be involved in future years. Continuity of audit staff is of prime concern to us and because of the hands-on involvement of the partner;we can assure you that future years' audits will be conducted in an efficient and effective manner with qualified and experienced professionals. The Firm is an Equal Opportunity employer and complies with all Federal and State hiring requirements. The Firm also supports Affirmative Action philosophies and works hard to provide disadvantaged groups with opportunities for self enhancement. Resumes of each member of the Engagement Team follow. 11 ' BATA I& SSOCIATEs Le 4 ¢::; i T C ACC ACCOUNT TAI `TS City of Dublin Technical Proposal 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: Services Provided 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 • 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 12 4 ONO > BADAWI l!ASSOCIATES y CLr1iI'_:. ! ..L.%_.r..r ... ICI .I A(',;I L. City of Dublin Technical Proposal 1 ■ •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 Services Provided 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 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. • 13 4r 11, V BA t AWIi��� ASSOCJATaES may' ci: ...,F: wlh i ".r L%...C -�..-:w is t..,' i F S City of Dublin Technical Proposal 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 4 A A ASSOCIATES E 14 A Fs City of Dublin Technical Proposal Similar The table on the following page is a partial listing of our clients similar to the City, and illustrates the Engagements many different types of components involved in each audit engagement that present very difficult With Other and complex auditing and accounting challenges. Governmental Entities Indicates cities with population over 50,000 ** Indicates cities with governmental revenues over 100 million and population over 50,000 I _ 15 1-BADA t&ASSOCIATES City of Dublin Technical Proposal Client - Engagement-, GFOA Successor Single Care-. Housing Enterprise City Since Hours -:Partner Principal Contact CAFR Award Agency Audit TDA Audit Authority Funds M.Henry Oyekanni • ** Berkeley 2008 1800 Ahmed Finance Director Yes Yes X X X X Badawi (510)981-7300 hoyekanrri@ci.berkeley.ca.us Mr.Derek Rarrpone ** Redwood 2006 600 Ahmed Financial Services Manager Yes Yes X X X X City Bedew i (650)780-7071 drarrpone@redwoodcity.org Mr.Drew Corbett ** San Mateo 2004 500 Ahmed Finance Director Yes Yes X X X X Badaw i (650)522-7104 dcorbett@cityofsanmateo.org Mrs.Devine Hatfield ** Vacaville 2008 600 Ahmed Accounting Manager Yes Yes X X X X X Badaw i (707)449-5104 dhalfield@cityolvacaville.com Ms.Gayle Okada * Union City 2006 600 Ahmed Supervising Accountant Yes Yes X X X X Badawi (510)675-5352 gayleo @unioncity.org Ms.Dawn Merchant * Antioch 2005 470 Ahmed Finance Director Yes Yes X X X X Badaw i (925)779-6135 Drrerchant@ci.antioch.ca.us M-.Rosendo Rodriguez Menlo Park 2014 514 Ahmed Finance Director Yes Yes X X X X X Badaw i (650)330-6640 RRodrig uez @rrenlopark org Ms.Susie Woodstock Director of Administrative Newark 2009 550 Badawi Services Yes Yes X X X (510)578-4804 susie.w oodstock@new arkorg Mr.David Glasser Albany 2008 380 Ahmed Finance&Administrative Yes Yes X X X Badaw i Service Director (510)528-5730 Ms.Mary Lee Sharer Rio Vista 2009 480 Ahmed Finance Manager No WA X X X X Badawi (707)374-6451 Ext.1118 Ms harer@ci.rio-vista.ca.us Ms.Cindy Prothro Barstow 2012 550 Ahmed Finance Director Yes Yes X X X Badaw i (760)255-5115 cprothro@barstowca.org Mr.Sung Hyun Buena Park 2013 500 Ahmed Finance Director Yes Yes X X X Badawi (714)562-3717 shuyn @buenaparkcom M-.Jared Hancock Susanville 2013 450 Ahmed City Administrator Yes CSMFO X Badaw i (530)252-5100 jhancock@cityofsusanville.org Ms.Brenda OIw in East Palo 2014 450 Ahmed Finance Director Yes Yes X X X Alto Badawi (650)853-3122 boles in@cityofepa.org Mr.Kenneth Spray Millbrae 2015 400 Ahmed Finance Director Yes N/A X X Badawi (650)259-2433 kspray@ci.millbrae.ca.us Ms.Bonnie Johnson Calirresa 2013 350 Ahmed Finance Director No WA Badawi (909)795-9801 ext 231 bjohnson@cityofcalirresa.net Ms Maria qeda Ahmed Finance Director Yountvlle 2015 300 No NIA X Badawi (707)944-8851 rarrow @yvile.com ' Mr.Gilbert Rojas Lemon 2013 350 Ahmed Finance Director No WA X X Grove Badawi (619)825-3803 grojas@Jemongrove.ca.gov Ms.Linda Leaver Crescent 2014 300 Ahmed Finance Director No N/A X X X X City Badawi (707)464-7483 x224 Ileaver@crescentcity.org �Z. 16 4 C) .». B..i ADAWItASSOCIATES A ,,ktW ^:S..).i .� City of Dublin Technical Proposal The table below lists all special district engagements: Client Engagement GFOA Single Enterprise Special District Since - Hours Partner Principal Contact CAFR "Award Audit Funds Florin Resource Conservation Mr.Jim Melberg District/�k 2015 350 Ahmed Finance Manager/Treasurer Yes Yes X Grove Water Badaw i (916)685-3556 District jmalberg @egw d.org Mrs.Mikyung Pustelnik Marin Municipal 2010 350 Ahmed Finance Manager Yes Yes X X Water District Badawi (415)945-1410 mpustelnik @marinw ater.org Cosumnes Mr.Jeff Ramos Community 2008 350 Ahmed General Manager Yes Yes Services District Badaw i (916)405-7150 jefframos@yourcsd.com Monterey Bay Ms.Joyce Giuggre Unified Air Ahmed Administrative Services Pollution Control 2016 200 Badaw i Manager No N/A District (831)-718-8019 jgiuffre @mbard.org Mr.Rajesh Sewak Port of 2006 200 Ahmed • Manager of Finance&Admin. No N/A X X Redwood City • Badawi (650)306-4150 rsew ak @redw oodcityport.com • Ms.Jan Cooke Central County 2012 150 Ahmed Finance Director Yes Yes Fire Department Badaw i (650)375-7408 jcooke@hillsborough.net Ms.Tracy New Aptos La Selva Ahmed Director of Business Services 2016 120 6934 Soquel Drive No N/A Fire District Badaw i Aptos,CA 95003 (831)-685-6690 • 17 4 itilb RADA I ASSOCIA ILS Xqd City of Dublin Technical Proposal 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. "I would recommend Badawi"& Associates to anyone seeking professional and knowledgeable audit services" Sung Hyun Finance Director City of Buena Park "This was the District's first year with Badawi&Associates and I found the entire to . team to be responsive, thorough, detailed and professional. Not only,was this a first year audit, but we also implemented GASB 68 and completed a major restatement of, the District's Capital Assets. With all of those moving pieces, this was by far the smoothest first year audit that I have ever participated in Jim Malberg Finance Manager Florin Resource Conservation District/ Elk Grove Water District tta 18 BA.t AW ASS CJATEs ACC-0L3' ' 'C`°' City of Dublin Technical Proposal Understanding The City desires an audit of the financial records for the City and an expression of an opinion in of Services to be 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 Provided 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. + 19 BAAWI&ASSOCIATES Rauc Ac r;eu y'..:AN..1 City of Dublin Technical Proposal Should any conditions be discovered requiring corrective action, the Firm will provide a detailed description of the findings and recommended actions as to their resolution. The Firm will submit a report to the City Council and management detailing auditor's responsibility under generally accepted auditing standards, significant accounting policies, management judgments and accounting statements, significant audit adjustments, other information in documents containing audited financial statements, disagreements with management, management consultations with other accountants, major issues discussed with management prior to retention, difficulties encountered during the audit, and any significant deficiencies or material weaknesses found during the audit. Non-material instances of noncompliance will be reported in a separate management letter, if appropriate, along with any other observations or recommendations determined to be informative to City management. The Firm will be available to provide advice and counsel regarding significant matters during the year. The Firm's Partner and Staff welcome the opportunity to make'presentations to the City Council and will be ready to respond to questions from the Council and citizens of the City. Objectives of Our Services The basic objective of our audit of the City is to conduct an examination of the financial statements 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. Specific Audit Audit Approach p The specific audit approach has been designed to efficiently and effectively address the audit Approach 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. 20 i ba BADAWt ASSOCIA`I ES c, ,tee City of Dublin Technical Proposal 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. 21 BA W.WI&ASSOCIATES City of Dublin Technical Proposal 5. Smooth Transition: Our testing program focuses on audit risks identified by our understanding of the City's operations. We will work with the accounting staff to identify the most effective ways to address our objectives. Communication between the members of the audit engagement team and City staff will be fluid and continuous. 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. Ourr 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. .... 22 A 'I ASSOCIATES City of Dublin Technical Proposal 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 • Reconciliation of Receivables to subsidiary • CAFR and Account Roll,Up Schedule ledgers " • Budget to Actual Reports • Calculations for estimate of allowance for • Bank Reconciliations uncollectible accounts • Listing of manually prepared journal • Loans Receivable Schedules entries posted • Reconciliation of Significant Revenue • Summary of Investments held by the City Accounts • Capital Asset Schedules • Utility billing Registers and Fee schedules • Long Term Debt Schedules • Compensated Absences and Early • Debt amortization schedules& Retirement Obligation Schedules and Calculations of deferred amounts Copies of Related Policies • Calculations of any debt covenants • Claims Payable schedules amounts or percentages • Pension and OPEB Roll Forward& • Schedule of Operating Leases Supporting Schedules • Schedule of Expenditures of Federal • GASB 54 Fund Balance Roll Forward Awards Schedule • Analysis of Deferred Inflows of • Interfund Transaction Schedules Resources an Deferred Outflows of Resources 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. 23 $A A I '.ASSOCIATES City of Dublin Technical Proposal 201 Period AuditTasks Interim Audit Procedures: March -Planning and Administration •Review and obtain copies of key work papers of prior audit firm. 'Entrance conference with City Management to discuss audit approach,timing, assistance,and issues Review and evaluate the City's accounting and financial reporting. Prepare an overall memo of recommendations,potential issues,and suggestions for improvements. 'Prepare overall memo to City confirming audit procedures,timing,and assistance. Prepare detailed audit work plan and audit programs,audit budget and staffing schedule,and list of schedules to be prepared by City staff,and provide it to City Management. April -Internal Control Evaluation 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. 24 City of Dublin Technical Proposal 2©18 Pend. Audit Tasks April -Other Tasks Review minutes of City Council meetings and other key committees. P.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. -Single Audit Compliance Entrance conference with City Management. •Obtain Federal Financial Assistance Schedule. Determine grants to be considered as major programs including clusters. •Perform audit tests of major grant programs and compliance with Federal Law and Regulations. ' Review grant documents,select sufficient number of transactions to test for compliance of Federal Requirements. 'Coordinate Single Audit efforts with the Financial Audit efforts. Communicate findings to City Management. Other Compliance 25 Attib B ;DWI ASSOCIATES City of Dublin Technical Proposal Audit Schedule, Continued Period Audit Tasks October -Audit Reports '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. • 26 BADAWI ASSOCIATES F vLi L t ACCUIP,.:-S.F1[�j City of Dublin Discussion of Identification of Anticipated Potential Audit Problems Relevant We do not anticipate that there will be any audit problems at the City. However, the following are some Accounting areas that we will carefully investigate and monitor during our audit procedures: Issues • 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 • ba27 BADAWI&ASSOCIATES City of Dublin Conclusion A client relationship with-the City will be of great value to our Firm and we welcome the opportunity to develop a long-term relationship 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. ***************** A L SOT S 28 VP • City of Dublin Appendix A 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 dco rbetta,citvofsan mateo.o rq 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.woodstocknewark.orq 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 corothro c(Dbarstowca.orq 29 AI&ASSOI:AaS City of Dublin 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 a(�,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(c�citvofcalimesa.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 bolwincitvofeoa.orq " 30 .I Cob BADAWI&ASSOCIATES