HomeMy WebLinkAbout08 APPROVE AMENDMENT TO INDEPENDENT AUDITORS AGREEMENTMEETING DATE: FEBRUARY 7, 2012
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: PAMELA ARENDS-KING, FINANCE DIRECTOR
SUBJECT: APPROVE AMENDMENT TO THE INDEPENDENT AUDITORS
AGREEMENT
SUMMARY:
The City's independent auditors, Diehl, Evans & Company, LLC merged with White,
Nelson & Company LLC establishing the firm White Nelson Diehl Evans LLP. The
amendment to the agreement with Diehl, Evans & Company, LLC reflects this change.
RECOMMENDATION:
It is recommended the City Council approve the amendment to the independent
auditor's agreement that memorializes the City's consent to assignment of the
Agreement to the New Firm and the New Firm's acknowledgement of assumption of all
liabilities and obligations under the agreement.
FISCAL IMPACT:
There is no fiscal impact with this amendment. The original fees to the agreement for the
annual audit services are not to exceed $48,835.00 for each of the fiscal years audited
through June 30, 2013. If the two subsequent fiscal years are audited the fees for fiscal
year 2013/2014 are not to exceed $49,811.00 and for fiscal year 2014/2015 not to exceed
$50,807.00. The allocation of the annual auditing fees is 60% to the General Fund; 15% to
the Water Enterprise Fund; and 25% to the three Redevelopment Project Areas.
BACKGROUND:
The City entered into an agreement for independent auditing services June 7, 2011,
with Diehl Evans. The Diehl, Evans & Company, LLC. and White, Nelson & Company
merger does not affect the auditing services specified in the original agreement.
Pamela Arends-King
Finance Director
Attachment: Amendment No. 1 to Professional Services Agreement Audit Services
AMENDMENT NO. 1 TO PROFESSIONAL SERVICES AGREEMENT
AUDIT SERVICES
THIS AMENDMENT NO. 1 TO PROFESSIONAL SERVICES AGREEMENT
("Amendment") is made and entered into this day of (the "Effective
Date") by and between the City of Tustin, a California General Law City ("City"), Diehl, Evans
& Company, LLP ("Prior Firm") and White Nelson Diehl Evans LLP ("New Firm").
RECITALS
A. City previously entered into an agreement with Diehl, Evans & Company, LLC
(the "Prior Firm"), dated June 1, 2011, for the performance of professional audit services for
City, its Redevelopment Agency, and related accounts (the "Agreement'), a copy of which is
attached hereto.
B. Diehl, Evans & Company, LLC has subsequently merged with White, Nelson &
Co. LLP to form the New Firm.
C. Section 5.3 of the Agreement requires the City's written approval to any
assignment of the Agreement.
D. City and the New Firm desire to enter into this Amendment to memorialize the
City's consent to assignment of the Agreement to the New Firm and the New Firm's
acknowledgement of assumption of all liabilities and obligations under the Agreement.
AGREEMENT
In consideration of the recitals and the promises and covenants herein, the parties agree as
follows:
1. Assignment of Agreement and Assumption of Obligations and Liabilities
Effective as of the Effective Date, all of Prior Firm's right, title, and interest in and to the
Agreement shall be deemed assigned to New Firm, and New Firm agrees to have assumed all of
Prior Firm's obligations and liabilities under the Agreement.
2. Personnel to Remain the Same. The New Firm acknowledges that the
experience, knowledge, education, capability, and reputation of the Prior Firm, its principals and
employees, were a substantial inducement for City to enter into the Agreement, and hereby
agrees that, except as otherwise approved by the City in accordance with the Agreement, the
personnel assigned to perform the services under the Agreement shall remain the same.
3. Charges to Remain the Same. The parties hereby agree that the rates to be
charged by New Firm shall be the same as those charged by Prior Firm under the Agreement.
4. Insurance. The New Firm acknowledges that it shall be bound by the insurance
and indemnification provisions of Section 6 of the Agreement. Upon execution of this
Amendment, New Firm shall provide City with all of the certifications, endorsements, and
certificates required to be provided pursuant to Section 6 of the Agreement.
S. Notices. For purposes of Section 10.1 of the Agreement, the address of the New
Firm for notice purposes shall be as follows:
To Firm: Mike Ludin
White, Nelson Diehl Evans LLP
2875 Michelle Drive, Suite 300
Irvine, CA 92606
6. Agreement Remains in Full Force and Effect. This modifying Amendment is
supplemental to the Agreement and is by reference made a part of said Agreement. All of the
terms, conditions, and provisions, thereof, unless specifically modified herein, shall continue in
full force and effect.
7. Binding Effect. This Amendment shall be binding on and inure to the benefit of
the parties hereto, their respective heirs, executors, administrators, successors -in -interest, and
assigns.
8. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of California.
9. Authority to Execute. Each of the undersigned represents and warrants that he
or she is duly authorized to execute and deliver this Amendment and that such execution is
binding on upon the entity for which he or she is executing this document.
10. Counterparts. This Amendment may be executed in counterparts, and when all
parties have so executed the Amendment, such counterparts collectively shall constitute one
agreement binding on all parties hereto, notwithstanding that all parties are not signatories to the
original or the same counterpart. The parties may also deliver executed copies of this
Amendment to each other by facsimile, which facsimile signatures shall be binding.
SIGNATURES ON FOLLOWING PAGES
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the dates
set forth below.
Date:
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
City Attorney
Date:
Date:
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CITY OF TUSTIN,
a California general law city
By:
John Nielsen
Mayor
Date:
Date:
WHITE NELSON DIEHL EVANS LLP
By:
Signature
Print Name
Title
By:
Signature
Print Name
Title
Date:
Date:
DIEHL, EVANS AND COMPANY, LLP
0.0
LOW
Signature
Print Name
Title
Signature
Print Name
Title
PROFESSIONAL SERVICES AGREEMENT
AUDIT SERVICES
THIS AGREEMENT FOR PROFESSIONAL SERVICES (the "Agreement") is made
and entered into this 1ST day of June, 2011, by and between the City of Tustin, a California
general law city ("City") and Diehl, Evans & Company (`Firm").
RECITALS
A. City requires the services of Firm to perform professional audit services for
the City, its Redevelopment Agency, and related accounts.
B. City circulated the Request for Proposal for annual auditing services attached
hereto as Exhibit A (the "RFP"), and in response Firm submitted to City a Technical Audit
Proposal attached hereto as Exhibit B (the "Proposal") to provide such services to City
pursuant to the terms of this Agreement. For the purpose of this Agreement, Page 24 of the
Proposal is not considered a part of the Proposal and is deleted in its entirety from such
Proposal.
C. Based on its experience, education, training, and reputation, Firm is qualified
to provide the necessary services to City for the project and desires to provide such services.
D. City desires to retain the services of Firm for the project.
NOW, THEREFORE, in consideration of the promises and mutual agreements
contained herein, City agrees to retain and does hereby retain Firm and Firm agrees to
provide services to the City as follows:
1. FIRM SERVICES
1.1 Scone of Services. In compliance with all terms and conditions of this
Agreement, Firm shall provide those services specified in the RFP and the Proposal
(hereinafter referred to as the "Scope of Services"). In the event of any conflict or
inconsistency between the terms contained in the RFP and the Proposal, the terms set forth in
the RFP shall govern; and in the event of any conflict or inconsistency in the terms of the
Scope of Services and the terms set forth in the body of this Agreement, the terms set forth in
the body of this Agreement shall govern. For the purposes of this Agreement, Page 24 and
all of the material contained therein, shall not be deemed a part of the Proposal and shall not
be considered a limitation on or condition of performance in any respect of the Firm's
obligations under this Agreement.
I.I.I. Additional Services. Additional services beyond those described in
the Scope of Services, and additional compensation for additional services, must be approved
in writing by City in the manner set forth in Section 3.3 (`Changes") of this Agreement.
1.2 Compliance with Law. All services rendered under this Agreement shall be
provided by Firm in accordance with all applicable City, federal, state, and local laws,
statutes, and ordinances and all lawful orders, rules, and regulations promulgated thereunder.
1.3 Licenses and Permits. Firm shall obtain at its sole cost and expense such
licenses, permits, and approvals as may be required by law for the performance of the
services required by this Agreement. Firm represents and warrants that it or its employees
possess all professional licenses required to provide the professional services within the
Scope of Work.
1.4 Familiarity with Work. By executing this Agreement, Firm warrants that
Firm (a) has thoroughly investigated and considered the work to be performed, (b) has
investigated the site of the work and become fully acquainted with the conditions there
existing, (c) has carefully considered how the work should be performed, and (d) fully
understands the facilities, difficulties and restrictions attending performance of the work
under this Agreement. Should the Firm discover any latent or unknown conditions materially
differing from those inherent in the work or as represented by City, Firm shall immediately
inform City of such fact and shall not proceed with any work except at Firm's risk until
written instructions are received from the Contract Officer.
1.5 Care of Work. As a material inducement for City to enter into this
Agreement, Firm represents and warrants that Firm is a provider of first class work and
professional services and that Firm is experienced in performing the Services contemplated
herein and, in light of such status and experience, Firm covenants that it shall follow the
highest professional standards in performing the Services required hereunder. For purposes
of this Agreement, the phrase "highest professional standards" shall mean those standards of
practice recognized as high quality among well-qualified and experienced professionals
performing similar work under similar circumstances. In addition, Firm shall adopt and
follow reasonable procedures and methods during the term of the Agreement to prevent loss
or damage to materials, papers, or other components of the work, and shall be responsible for
all such damage until acceptance of the work by City, except such loss or damages as may be
caused solely by City's own wrongful acts or negligence.
2. TIME FOR COMPLETION.
The time for completion of the services to be performed by Firm is an essential
condition of this Agreement. Firm shall prosecute regularly and diligently the work of this
Agreement according to the agreed upon schedule of performance set forth in the Scope of
Services. Firm shall not be accountable for delays in the progress of its work caused by any
condition beyond its control and without the fault or negligence of Firm. Delays shall not
entitle Firm to any additional compensation regardless of the party responsible for the delay.
3. COMPENSATION OF FIRM
3.1 Compensation of Firm. Total compensation for the services hereunder shall
not exceed One Hundred Forty -Six Thousand Five Hundred Five Dollars ($146,505.00) for
the first three fiscal year audits as set forth in the Scope of Work. (the "Maximum Contract
Amount"). Total compensation for the 2013/14 audit, if City extends the engagement herein
shall not exceed Forty -Nine thousand eight hundred eleven dollars ($49,811.00) and Fifty
thousand eight hundred seven dollars ($50,807.00) for the 2014/2015 audit (the "Extension
Maximum Amounts"). Included within the compensation are all of Firm's ordinary office
and overhead expenses incurred by it, its agents and employees, including mileage, meetings
with City representatives and incidental costs to perform the stipulated services, including
without limitation reproduction costs, telephone expenses, and transportation expenses. Such
expenses are subject to and included within the Maximum Contract Amount or the Extension
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Maximum Amounts, The Maximum Contract Amount and any Extension Maximum
Amounts shall also include the attendance of Firm at all Project meetings reasonably deemed
necessary by the City. Firm shall not be entitled to any increase in the Maximum Contract
Amount or any Extension Maximum Amounts for attending these meetings. Firm hereby
acknowledges that it accepts the risk that the services and expenses identified in the Scope of
Work may be more costly and/or time-consuming than Firm anticipates, that Firm shall not
be entitled to additional compensation therefore, and that the provisions of Section 3.3 shall
not be applicable to the services identified in the Scope of Work. The maximum amount of
City's payment obligations under this section are the amounts specified herein. The services
shall be billed to the City at the hourly rate set forth in Exhibit "A;" however, if the City's
maximum payment obligation under the Maximum Contract Amount or any Extension
Maximum Amount is reached before the Firm's Services under this Agreement are
completed, Firm shall nevertheless complete the Work without liability on the City's part for
further payment beyond the Maximum Contract Amount or the applicable Extension
Maximum Amount.
3.2 Method of Payment. In any month in which Firm wishes to receive payment,
Firm shall no later than the first working day of such month, submit to City in the form
approved by City, an invoice for services satisfactorily completed prior to the date of the
invoice. Payments shall be based on the pricing schedule or hourly rates as set forth in the
schedule of tees in the Scope of Services for authorized services performed. City shall pay
Firm based on invoices which are approved by City consistent with this Agreement, within
thirty (34) days of receipt of Firm's invoice.
3.3 Chanes. In the event any change or changes in the Scope of Services, or the
performance of services that are outside the Scope of Services, is requested by either party,
the revision to the Scope of Services shall not take effect until approved in writing and
approved in accordance with this Section. Revisions to the Scope of Services shall be made
only by execution of a written amendment to this Agreement, setting forth with particularity
all terms of such amendment, including, but not limited to, any additional fees. If City
Council approval of an amendment is required, then the changes in the Scope of Services
shall be approved by the required body. Changes not requiring City Council approval may be
approved in writing by the Contract Officer.
3.4 Appropriations. This Agreement is subject to and contingent upon funds
being appropriated therefore by the City Council for each fiscal year covered by the
Agreement. If such appropriations are not made, this Agreement shall automatically
terminate without penalty to City.
4. PERFORMANCE SCHEDULE
4.1 Time of Essence. Time is of the essence in the performance of this
Agreement.
4.2 Schedule of Performance. All services rendered pursuant to this Agreement
shall be performed pursuant to the agreed-upon schedule of performance set forth in the
Scope of Services. The extension of any time period must be approved in writing by the
Contract Officer. If no schedule of performance is set forth in the Scope of Services, then
satisfactory completion of all services shall occur prior to the expiration of the Term, or any
extension thereof, set forth in Section 4.4.
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4.3 Force Maieure. The time for performance of services to be rendered
pursuant to this Agreement may be extended because of any delays due to unforeseeable
causes beyond the control and without the fault or negligence of Firm, including, but not
limited to, acts of God or of a public enemy, acts of the government, fires, earthquakes,
floods, epidemic, quarantine restrictions, riots, strikes, freight embargoes, and unusually
severe weather if Firm shall within ten (10) days of the commencement of such condition
notify the Contract Officer who shall thereupon ascertain the facts and the extent of any
necessary delay, and extend the time for performing the services for the period of the
enforced delay when and if in the Contract Officer's judgment such delay is justified, and the
Contract Officer's determination shall be final and conclusive upon the parties to this
Agreement.
4.4 Term. Unless earlier terminated in accordance with Section 8.5 of this
Agreement, the term of this Agreement shall commence on the effective date of this
agreement, and all services required under this Agreement shall be completed no later than
June 30, 2015 for the financial statements for fiscal years 2010/2011, 2011/2012 and
2012/2013. City at its sole discretion shall have the option to extend the engagement for two
subsequent one-year terms to include financial statements for fiscal years 2013/2014 and
2014/2015.
4.4.1 Survival of Expiration/Termination. The following sections of this
Agreement shall survive any expiration or termination of this Agreement: Section 3.4;
Section 5.4 (including sections 5.4.1 through 5.4.3); Sections 6.1 (including sections 6.1.1
through 6.1.6) and 6.2; Section 7.2, 7.3, 7.4 and 7.5; Sections 8.1, 8.2, 8.3, 8.4, 8.5, 8.6;
Sections 9. 1, and 9.2; Sections 10. 1, 10.2, 10.3, 10.4, 10.5, 10.6 and 10.7.
5. COORDINATION OF WORK
5.1 Representative of Firm. The following principal of Firm is hereby
designated to be the principal and representative of Firm authorized to act in its behalf with
respect to the services and work specified herein and make all decisions in connection
therewith: Michael R. Ludin, Engagement Review Partner and CPA. It is expressly
understood that the experience, knowledge, education, capability, and reputation of the
foregoing principal is a substantial inducement for City to enter into this Agreement.
Therefore, the foregoing principal shall be responsible during the term of this Agreement for
directing all activities of Firm and devoting sufficient time to personally supervise the
services hereunder. The foregoing principal may not be changed by Firm without express
written approval of the Contract Officer.
5.2 Contract Officer, The Contract Officer shall be the City Finance Director, or
his/her designee. It shall be the Firm's responsibility to keep the Contract Officer fully
informed of the progress of the performance of the services and Firm shall refer any decisions
that must be made by City to the Contract Officer. Unless otherwise specified herein, any
approval of City required hereunder shall mean the approval of the Contract Officer.
5.3 Prohibition Against Subcontracting or Assignment. The experience,
knowledge, education, capability, and reputation of Firm, its principals and employees, were
a substantial inducement for City to enter into this Agreement. Therefore, Firm shall not
contract with any other individual or entity to perform in whole or in part the services
required hereunder without the express written approval of City. In addition, neither this
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Agreement nor any interest herein may be assigned or transferred, voluntarily or by operation
of law, without the prior written approval of City.
5.4 Independent Contractor.
5.4.1 The legal relationship between the Parties is that of an independent
contractor, and nothing herein shall be deemed to make Firm a City employee. During the
performance of this Agreement, Firm and its officers, employees, and agents shall act in an
independent capacity and shall not act as City officers or employees. The personnel
performing the Services under this Agreement on behalf of Firm shall at all times be under
Firm's exclusive direction and control. Neither City nor any of its officers, employees, or
agents shall have control over the conduct of Firm or any of its officers, employees, or
agents, except as set forth in this Agreement. Firm, its officers, employees, or agents shall
not maintain an office or any other type of fixed business location at City's offices. City shall
have no voice in the selection, discharge, supervision, or control of Firm's employees,
servants, representatives, or agents, or in fixing their number, compensation, or hours of
service. Firm shall pay all wages, salaries, and other amounts due its employees in
connection with this Agreement and shall be responsible for all reports and obligations
respecting them, including but not limited to social security income tax withholding,
unemployment compensation, workers' compensation, and other similar matters. City shall
not in any way or for any purpose be deemed to be a partner of Firm in its business or
otherwise a joint venturer or a member of any joint enterprise with Firm. Firm shall not at
any time or in any manner represent that it or any of its agents or employees are agents or
employees of City.
5.4.2. Firm shall not incur or have the power to incur any debt, obligation, or
liability against City, nor bind City in any manner.
5.4.3 No City benefits shall be available to Firm, its officers, employees, or
agents in connection with any performance under this Agreement. Except for professional
fees paid to Firm as provided for in this Agreement, City shall not pay salaries, wages, or
other compensation to Firm for the performance of Services under this Agreement. City shall
not be liable for compensation or indemnification to Firm, its officers, employees, or agents,
for injury or sickness arising out of performing Services hereunder. If for any reason any
court or governmental agency determines that the City has financial obligations, other than
pursuant to Sections 3.1. and 3.3 herein, of any nature relating to salary, taxes, or benefits of
Firm's officers, employees, servants, representatives, subcontractors, or agents, Firm shall
indemnify City for all such financial obligations.
5.5 Personnel:. Firm agrees to assign the following individuals to perform the
services set forth herein. Firm shall not alter the assignment of the following personnel
without the prior written approval of the Contract Officer. The City shall have the
unrestricted right to order the removal of any personnel assigned by Firm by providing
written notice to Firm.
Name: Title:
Nitin P. Patel CPA; Concurring Review Partner
Daphnie Munoz CPA; Senior Audit Manager
Sarah H. Ro CPA, Audit Senior
5.6 Conflicts of Interest. Firm covenants that it presently has no interest and
shall not acquire any interest, direct or indirect, which would conflict in any manner or
degree with the performance of the services contemplated by this Agreement. No person
having such interest shall be employed by or associated with Firm.
6. INSURANCE AND INDEMNIFICATION
6.1 Insurance. Firm shall procure and maintain, at its sole cost and expense, in a
form and content satisfactory to City, the insurance described herein for the duration of this
Agreement, including any extension thereof, or as otherwise specified herein, against claims
which may arise from or in connection with the performance of the service hereunder by
Firm, its agents, representatives, or employees. Such insurance shall be kept in full force and
effect during the term of this Agreement. The procuring of such insurance and the delivery of
policies, certificates, and endorsements evidencing the same shall not be construed as a
limitation of Firm's obligation to defend and indemnify City, its elected officials, officers,
agents, employees, and volunteers.
6.1.1 Minimum Insurance Coverage. Except as otherwise authorized
below for professional liability (errors and omissions) insurance, all insurance provided
pursuant to this Agreement shall be on an occurrence basis. The minimum types and amount
of insurance required hereunder shall be as follows:
A. Errors and Omissions Insurance. Firm shall obtain and maintain in full
force and effect throughout the term of this Agreement, standard industry form professional
liability (errors and omissions) insurance coverage in an amount of not less than two million
dollars ($2,000,000.00) per claim or occurrence, in accordance with the provisions of this
section.
(1) Firm shall either: (a) certify in writing to the City that Firm is
unaware of any professional liability claims made against Firm and is unaware of any facts
which may lead to such a claim against Firm; or (b) if Firm does not provide the certification
pursuant to (a), Firm shall procure from the professional liability insurer an endorsement
providing that the required limits of the policy shall apply separately to claims arising from
errors and omissions in the provision of services pursuant to this Agreement.
(2) If the policy of insurance is written on a "claims made" basis, the
policy shall be continued in full force and effect at all times during the term of this
Agreement, and for a period of three (3) years from the date of the completion of the Services
provided hereunder. In the event of termination of the policy during this period, Firm shall
obtain continuing insurance coverage for the prior acts or omissions of Firm during the
course of performing Services under the terms of this Agreement. The coverage shall be
evidenced by either a new policy evidencing no gap in coverage, or by obtaining separate
extended "tail" coverage with the present or new carrier or other insurance arrangements
providing for complete coverage, either of which shall be subject to the written approval by
the Contract Officer.
(3) In the event the policy of insurance is written on an "occurrence"
basis, the policy shall be continued in full force and effect during the term of this Agreement,
or until completion of the Services provided for in this Agreement, whichever is later. In the
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event of termination of the policy during this period, new coverage shall immediately be
-obtained to ensure coverage during the entire course of performing the Services under the
terms of this Agreement.
B. Workers' Compensation Insurance. Firm shall obtain and maintain, in
full force and effect throughout the term of this Agreement, workers' compensation insurance
in at least the minimum statutory amounts, and in compliance with all other statutory
requirements, as required by the State of California. Firm agrees to waive and obtain
endorsements from its workers' compensation insurer waiving subrogation rights under its
workers' compensation insurance policy against the City and to require each of its
subcontractors, if any, to do likewise under their workers' compensation insurance policies.
C. Commercial General Liability insurance. Firm shall obtain and
maintain, in full force and effect throughout the term of this Agreement, a policy of
comprehensive general liability insurance with limits of at least one million dollars
($1,000,000.00) per occurrence, two million dollars ($2,000,000.00) in the general aggregate,
and one million dollars ($1,000,000.00) for products and completed operations. Firm shall
either: (a) certify in writing to the City that Firm is unaware of any liability claims made
against Firm, and is unaware of any facts which may lead to such a claim against Firm; or (b)
if Firm does not provide the certification pursuant to (a), Firm shall procure from the
commercial general liability insurer an endorsement providing that the required limits of the
policy shall apply separately to occurrences during the rendition of services pursuant to this
Agreement.
D. Business Automobile Insurance. Firm shall obtain and maintain, in
full force and effect throughout the term of this Agreement, a policy of business automobile
liability insurance written on a per occurrence basis with a single limit liability in the amount
of one million dollars ($1,000,000.00) bodily injury and property damage. The policy shall
include coverage for owned, non -owned, leased, and hired cars.
E. Employer Liability Insurance. Firm shall obtain and maintain, in full
force and effect throughout the term of this Agreement, a policy of employer liability
insurance written on a per occurrence basis with a policy limit of at least one million dollars
($1,000,000.00) per accident for bodily injury or disease.
6.1.2 Sufficiency of Insurers. Insurance required herein shall be issued by
a licensed company authorized to transact business in the state by the Department of
Insurance for the State of California with a current rating of A -:VII or better (if an admitted
carrier), or a current rating of A:X or better (if offered by a non -admitted insurer listed on the
State of California List of Eligible Surplus Lines Insurers (LESLI), by the latest edition of
A.M. Best's Key Rating Guide, except that the City will accept workers' compensation
insurance from the State Compensation Fund.
6.1.3 Endorsement and Verification of Coverage.
Prior to commencement of services hereunder, Firm shall obtain and deliver to City
approved insurance endorsements providing all of the following: (1) insurance coverage shall
be primary insurance as respects City and its respective elected officials, officers, employees,
agents, and volunteers; and (2) any insurance or self-insurance maintained by City and its
respective elected officials, officers, employees, agents, and volunteers shall be in excess of
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Firm's insurance and shall not contribute with it; and (3) as to the commercial general
liabilityandautomobile liability policy, the Orange County Fire Authority and its respective
elected officials, officers, employees, agents, and volunteers shall be endorsed as additional
insureds in accordance with standard ISO additional insured endorsement form
CG2010(1185) or equivalent language (Additional insured endorsements are not required for
Professional Liability or Workers' Compensation policies); and (4) as to Workers'
Compensation Insurance, the insurer waives all rights of subrogation and contribution it may
have against City, its elected officials, officers, employees, agents, and volunteers.
Firm shall furnish City with both original certificates of insurance and all required
endorsements, effecting all of the coverages required by this Agreement. The certificates and
endorsements are to be signed by a person authorized by that insurer to bind coverage on its
behalf. All proof of insurance is to be received and approved by the City before work
commences. City reserves the right to require Firm's insurers to provide complete, certified
copies of the required insurance policies at any time.
Each insurance policy required by this section shall be endorsed to state that coverage
shall not be suspended, voided, cancelled, or modified by either Party, or reduced in coverage
or in limits, except after thirty (30) days prior written notice by First Class U.S. Mail,
postage -prepaid, has been provided to the City. Notwithstanding the foregoing in this
subsection, if coverage is to be suspended, voided, or cancelled because of Firm's failure to
pay the insurance premium, the notice provided to Firm shall be by ten (10) days prior
written notice. An endorsement indicating that an insurer will "endeavor to" provide City
such notice (or similar words) shall not be a sufficient substitute for the actual notice required
herein
Firm represents and warrants that Firm has — prior to submitting its bid or executing
this Agreement - confirmed with its insurers the existence and amounts of the required
coverage and confirmed the willingness of each insurer to provide the required endorsements.
If, after executing this Agreement, Finn is unable to procure one or more required
endorsements from its existing insurer(s), Finn shall take those steps necessary (potentially
including, but not limited to, changing carriers and/or incurring additional premiums at
Firm's sole cost) to procure the required insurance and endorsements.
6.1.4 Deductibles and Self -Insured Retentions. Any deductibles or self-
insured retentions must be declared to and approved by the City. At the option of the City,
either the insurer shall reduce or eliminate such deductibles or self-insured retentions as
respects the City, its elected officials, officers, employees, agents, and volunteers, or, Firm
shall procure a bond guaranteeing payment of the deductible or self-insured retention in the
event of any covered claim.
6.1.5 Separation of Insureds; No Special Limitations. All insurance
required by this Section shall contain standard separation of insureds provisions. In addition,
such insurance shall not contain any special limitations on the scope of protection afforded to
the City, its directors, officials, officers, employees, agents, and volunteers.
6.1.6 Replacement or Renewal. During any period of time during which
insurance is required to be maintained hereunder, Firm shall provide proof that policies of
insurance required herein expiring or otherwise terminated, cancelled, or non -renewed during
the term of this Agreement have been renewed or replaced with other policies providing at
least the same coverage. Proof that such coverage has been ordered shall be submitted prior to
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expiration. Endorsements as required in this Agreement applicable to the renewing or new
coverage shall be provided to City no later than ten (10) days prior to expiration of the lapsing
coverage.
6.2 Indemnification. To the fullest extent permitted by law, Firm shall
indemnify, defend (at Firm's sole cost and expense), protect and hold harmless City and its
officers, Board members, member agencies, officials, employees, attorneys, agents and
volunteers and all other public agencies whose approval of the Project is required,
(individually "Indemnified Party'; collectively "Indemnified Parties") against any and all
liabilities, claims, judgments, arbitration awards, settlements, costs, demands, orders, and
penalties (collectively "Claims"), including but not limited to Claims arising from injuries or
death of persons (Firm's employees included) and damage to property, which Claims,
including alleged Claims, arise out of, pertain to, or are related to the negligent acts or
omissions, recklessness, or willful misconduct of Firm, its agents, employees, or
subcontractors, or arise from Firm's negligent, reckless, or willful performance of or failure
to perform any term, provision, covenant, or condition of this Agreement ("Indemnified
Claims"), but Firm's liability for Indemnified Claims shall be reduced to the extent such
Claims arise from the willful misconduct or gross negligence of the City, its officers, Board
members, member agencies, officials, employees, agents and volunteers.
Firm shall reimburse the Indemnified Parties for any reasonable expenditures,
including reasonable attorneys' fees, expert fees, litigation costs, and expenses that each
Indemnified Party may incur by reason of Indemnified Claims. Upon request by an
Indemnified Party, Firm shall defend with legal counsel reasonably acceptable to the
Indemnified Party all Claims against the Indemnified Party that may arise out of, pertain to,
or relate to Indemnified Claims, whether or not Firm is named as a party to the Claim
proceeding. The determination whether a Claim "may arise out of, pertain to, or relate to
Indemnified Claims" shall be based on the allegations made in the Claim and the facts known
or subsequently discovered by the Parties. In the event a final judgment, arbitration award,
order, settlement, or other final resolution expressly determines that Claims did not arise out
of, pertain to, nor relate to the negligence, recklessness, or willful misconduct of Firm to any
extent, then City shall reimburse Firm for the reasonable costs of defending the Indemnified
Parties against such Claims, except City shall not reimburse Firm for attorneys' fees, expert
fees, litigation costs, and expenses that were incurred defending Firm or any parties other
than Indemnified Parties against such Claims.
Firm's indemnification obligation hereunder shall survive the expiration or earlier
termination of this Agreement until all actions against the Indemnified Parties for such
matters indemnified hereunder are fully and finally barred by the applicable statute of
limitations or, if an action is timely filed, until such action is final. This Section 6.2 is
intended for the benefit of third party Indemnified Parties not otherwise a party to this
Agreement.
7. RECORDS AND REPORTS
7.1 Reports. Firm shall periodically prepare and submit to the Contract Officer
such reports concerning the performance of the services required by this Agreement as the
Contract Officer shall require.
9
7.2 Records. Firm shall keep such books and records as shall be necessary to
properly perform the services required by this Agreement and enable the Contract Officer to
evaluate the performance of such services. The Contract Officer shall have full and free
access to such books and records at all reasonable times, including the right to inspect, copy,
audit, and make records and transcripts from such records.
7.3 Ownership of Documents. All reports, information, data and exhibits
prepared or assembled by Firm in connection with the performance of its services pursuant to
this Agreement are confidential to the extent permitted by law, and Firm agrees that they
shall not be made available to any individual or organization without prior written consent of
the City. All such reports, information, data, and exhibits shall be the property of the City
and shall be delivered to the City upon demand without additional costs or expense to the
City. The City acknowledges such documents are instruments of Firm's professional
services.
7.4 Release of Documents. Except with the prior written approval of the
Contract Officer, or as otherwise required by final order of a court of competent jurisdiction,
all drawings, specifications, reports, records, documents, and other materials (collectively
"Documents") prepared by Firm in the performance of services under this Agreement shall
not be released publicly or to any individual or entity not expressly authorized by this
Agreement to review such Documents. Firm shall notify City immediately of any request
received by Firm to review such Documents.
7.5 Cost Records. Firm shall maintain all books, documents, papers, employee
time sheets, accounting records, and other evidence pertaining to costs incurred while
performing under this Agreement and shall make such materials available at its offices at all
reasonable times during the term of this Agreement and for three (3) years from the date of
final payment for inspection by City and copies thereof shall be promptly furnished to City
upon request.
8. ENFORCEMENT OF AGREEMENT
8.1 California Law. This Agreement shall be construed and interpreted both as
to validity and to performance of the parties in accordance with the laws of the State of
California. Legal actions concerning any dispute, claim, or matter arising out of or in relation
to this Agreement shall be instituted in the Superior Court of the County of Orange, State of
California, or any other appropriate court in such county, and Firm covenants and agrees to
submit to the personal jurisdiction of such court in the event of such action.
8.2 Waiver. No delay or omission in the exercise of any right or remedy of a
non -defaulting party on any default shall impair such right or remedy or be construed as a
waiver. No consent or approval of City shall be deemed to waive or render unnecessary
City's consent to or approval of any subsequent act of Firm. Any waiver by either party of
any default must be in writing and shall not be a waiver of any other default concerning the
same or any other provision of this Agreement.
10
8.3 Rights and Remedies are Cumulative. The rights and remedies of the
parties are cumulative and- the exercise of one or more of such rights or remedies shalt not
preclude the exercise of, at the same or different times, of that or any other rights or remedies
for the same default or any other default by the other parry.
8.4 Legal Action. In addition to any other rights or remedies, either party may
take legal action, in law or in equity, to cure, correct, or remedy any default, to recover
damages for any default, to compel specific performance of this Agreement, to obtain
injunctive relief, a declaratory judgment, or any other remedy consistent with the purposes of
this Agreement.
8.5 Termination Prior to Expiration of Term. City reserves the right to
terminate this Agreement at any time, with or without cause, upon thirty (30) days written
notice to Firm, except that where termination is due to the fault of Firm or the continuation of
services would constitute an immediate danger to health, safety, or general welfare, the
period of notice shall be such shorter time as may be determined by the City. Upon receipt of
the notice of termination, Firm shall immediately cease all services hereunder except such as
may be specifically approved by the Contract Officer. Firm shall be entitled to compensation
for all services rendered prior to receipt of the notice of termination and for any services
authorized by the Contract Officer thereafter. Those sections identified in Section 4.4.1
hereinabove shall survive any termination of this Agreement.
8.6 Attornev Fees. In the event any dispute between the parties with respect to
this Agreement results in litigation or any non judicial proceeding, the prevailing party shall
be entitled, in addition to such other relief as may be granted, to recover from the non -
prevailing party all reasonable costs and expenses, including but not limited to reasonable
attorney fees, expert Firm fees, court costs and all fees, costs, and expenses incurred in any
appeal or in collection of any judgment entered in such proceeding. The reasonable amount
of attorney fees hereunder shall be calculated multiplying the actual number of hours
reasonably spent by the attorneys) for the prevailing party in such proceeding by either: (a)
the actual hourly rate of the attorney(s) representing the prevailing party in such proceeding,
or (b) $200 per hour, whichever is lower. No "lodestar multiplier" shall apply to the
calculation of reasonable attorney's fees or costs hereunder.
9. City OFFICERS AND EMPLOYEES, NON-DISCRIMINATION
9.1 Non -Liability of City Officers and Employees. No officer, director, official,
attorney, or employee of City shall be personally liable to the Firm, or any successor -in -
interest, in the event of any default or breach by City or for any amount which may become
due to the Firm or its successor, or for breach of any obligation of the terms of this
Agreement.
9.2 Covenant Against Discrimination. Firm covenants that, by and for itself, its
heirs, executors, assigns, and all persons claiming under or through them, that there shall be
no discrimination or segregation in the performance of or in connection with this Agreement
regarding any person or group of persons on account of race, color, creed, religion, sex,
marital status, disability, sexual orientation, national origin, or ancestry.
10. MISCELLANEOUS PROVISIONS
11
10.1 Notice. Any notice, demand, request, consent, approval, or communication
either party desires or is- required --to give to the other party or arty other person shall -be in
writing and either served personally or sent by pre -paid, first-class mail to the address set
forth below. Either party may change its address by notifying the other party of the change of
address in writing. Notice shall be deemed communicated seventy-two (72) hours from the
time of mailing if mailed as provided in this Section.
To City: Finance Department
ATTN: Finance Director
300 Centennial Way
Tustin, CA 92780
To Firm: Mike Ludin
Diehl, Evans and Company, LLP
5 Corporate Park, Suite 100
Irvine, CA 92606-5165
10.2 Integrated Agreement. This Agreement contains all of the agreements of the
parties and cannot be amended or modified except by written agreement.
10.3 Amendment. This Agreement may be amended at any time by the mutual
consent of the parties by an instrument in writing. Amendments affecting the Scope of
Services or compensation shall be approved in accordance with Section 3.3 hereinabove.
10.4 Severability. In the event that any one or more of the phrases, sentences,
clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or
unenforceable by valid judgment or decree of a court of competent jurisdiction, such
invalidity or unenforceability shall not affect any of the remaining phrases, sentences,
clauses, paragraphs, or sections of this Agreement, which shall be interpreted to carry out the
intent of the parties hereunder.
10.5. Interpretation. This Agreement shall be construed as a whole according to
its fair language and common meaning to achieve the objectives and purposes of the parties.
The terms of this Agreement are contractual and the result of negotiation between the parties.
Accordingly, any rule of construction of contracts (including, without limitation, California
Civil Code Section 1654) that ambiguities are to be construed against the drafting party, shall
not be employed in the interpretation of this Agreement. The caption headings of the various
sections and paragraphs of this Agreement are for convenience and identification purposes
only and shall not be deemed to limit, expand, or define the contents of the respective
sections or paragraphs.
10.6 Authority. The persons executing this Agreement on behalf of the parties
hereto warrant that they are duly authorized to execute this Agreement on behalf of said
parties and that by so executing this Agreement the parties hereto are formally bound to the
provisions of this Agreement.
10.7 Counterparts. This Agreement may be executed in counterparts, and when
all parties have so executed the Agreement, such counterparts collectively shall constitute one
agreement binding on all parties hereto, notwithstanding that all parties are not signatories to
the original or the same counterpart. The parties may also deliver executed copies of this
Amendment to each other by facsimile, which facsimile signatures shall be binding.
12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year above written.
CITY OF TUSTIN
A California general law city
f
/By: f G
,p
Date:
tMayor
ATTEST:
By:__ Date: (�, l -yl
*-tityy Clerk
«FIRM"
DIEHL, Evans and Company, LLP
Nf*�
Date: By:
Signature
Title
By:
Signature
Title
13
EXHIBIT "A"
REQUEST FOR PROPOSALS
14
CITY OF TUSTIN
REQUEST FOR PROPOSALS
INTRODUCTION
A. General Information
The City of Tustin is requesting proposals from qualified firms of Certified Public Accountants to
audit its financial statements through the fiscal year ending June 30, 2013, with the option of
auditing its financial statements for each of the two subsequent fiscal years. These audits are
to be performed in accordance with auditing standards generally accepted in the United States
of America, the standards set forth for financial audits in the current U.S. General Accounting
Office's (GAO) Government Auditing Standards, the provisions of the federal Single Audit Act,
and U.S. Office of Management and Budget (OMB) Circular A-133, Audits of State, Local
Governments, and Non -Profit Organizations, as amended.
There is no expressed or implied obligation for the City of Tustin to reimburse responding firms
for any expenses incurred in preparing proposals in response to this request.
To be considered, seven (7) copies of a proposal must be received by Linda Anicich, Finance
Administrative Secretary, at 300 Centennial Way, Tustin, California, 92780, by 5:00 p.m. on
Thursday, February 24, 2011. The City of Tustin reserves the right to reject any or all
proposals submitted. Proposals will be evaluated by the City's Audit Commission. The Audit
Commission consists of five members selected by the City Council, representative of the
citizens and businesses of the community.
During the evaluation process, the Audit Commission and the City of Tustin reserve the right,
where it may serve the City of Tustin's best interest, to request additional information or
clarifications from proposers or to allow corrections of errors or omissions. At the discretion of
the City of Tustin or the Audit Commission, firms submitting proposals may be requested to
make oral presentations as part of the evaluation process.
The City of Tustin reserves the right to retain all proposals submitted and to use any ideas in a
proposal regardless of whether that proposal is selected. Submission of a proposal indicates
acceptance by the firm of the conditions contained in this Request for Proposals, unless clearly
and specifically noted in the proposal submitted and confirmed in the contract between the
City of Tustin and the firm selected.
It is anticipated the selection of a firm will be completed by April 5, 2011. Following the
notification of the selected firm, it is expected a contract will be executed between both parties
by April 29, 2011.
City of Tustin RFP
Page 1 of 20
B. Ternv-of�;ement_
A three (3) year contract is contemplated, with an option to extend the contract for two one-year
periods (possible 5 -year total), subject to the annual review and recommendation of the Audit
Commission.
C. Subcontracting
If firms submitting proposals are considering subcontracting portions of the engagement, that
fact and the name of the proposed subcontracting firm must be clearly identified in the proposal.
Following award of the audit contract, no subcontracting will be allowed without the express prior
written consent of the City of Tustin.
II. NATURE OF SERVICES REQUIRED
A. General
The City of Tustin is soliciting the services of qualified firms of Certified Public Accountants to
audit its financial statements through the fiscal years ending June 30, 2013, with the option to
audit the City of Tustin's financial statements for each of the two (2) subsequent fiscal years,
subject to the satisfactory negotiation of terms, including a price acceptable to both the City and
the selected firm. These audits are to be performed in accordance with the provisions
contained in this Request for Proposals.
B. Scope of Work to be Performed
The City desires a Comprehensive Annual Financial Report (CAFR) and its component unit
financial statements for the City of Tustin and the Tustin Redevelopment Agency to be
prepared by the independent auditor and be fully compliant for GASB 34 for the fiscal year
ended June 30, 2011 and each of the subsequent years, June 30, 2012 and 2013 of the audit
firm's contract with the City.
The selected independent auditor will be required to perform the following tasks:
The auditor shall perform an audit of all funds of the City. The audit shall be conducted
in accordance with auditing standards generally accepted in the United States of
America and Government Auditing Standards, issued by the Comptroller of the United
States. The City's Comprehensive Annual Financial Report (CAFR) will be
prepared, word processed and printed by the audit firm. The CAFR will be in full
compliance with GASB 34. The audit firm will render their auditor's report on the basic
financial statements which will include both Government -Wide Financial Statements and
Fund Financial Statements. The audit firm will also apply limited audit procedures to
Management's Discussion and Analysis (MD&A) and required supplementary
information pertaining to the General Fund and each major fund of the City.
The auditor is expected to express an opinion on the fair presentation of the financial
statements of the Tustin Redevelopment Agency and Report on Compliance with
applicable laws, regulations, and administrative requirements governing its activities.
The auditor shall prepare GASB 34 compliant component unit financial statements for
City of Tustin RFP
Page 2 of 20
2. The auditor shall perform a single audit on the expenditures of federal grants in
accordance with OMB Circular A-133 and render the appropriate audit reports on
Internal Control over Financial Reporting based upon the audit of the City's financial
statements in accordance with Government Auditing Standards and the appropriate
reports on compliance with Requirements Applicable to each Major Program, Internal
Control over Compliance and on the Schedule of Expenditures of Federal Awards in
Accordance with OMB Circular A-133. The single audit report will include appropriate
schedule of expenditures of federal awards, footnotes, findings and questioned costs,
including reportable conditions and material weaknesses, and follow up on prior findings
where required.
3. The auditor shall perform agreed-upon auditing procedures pertaining to the City's
GANN Limit (Appropriations Limit) and render a letter annually to the City regarding
compliance.
4. The auditor shall issue 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. Management letter
shall be addressed to the City Manager.
5. The auditor shall prepare and file the Annual State Controller's Report each year by the
due date for both the City and Redevelopment Agency.
C. Auditing Standards to be Followed
To meet the requirements of this Request for Proposals, the audit shall be performed in
accordance with generally accepted auditing standards as set forth by the American Institute of
Certified Public Accountants, the standards for financial audits set forth in the current U.S.
General Accounting Office's Government Auditing Standards, the provisions of the Single Audit
Act and the provisions of U.S. Office of Management and Budget (OMB) Circular A-133, Audits
of State, Local Governments, and Non -Profit Organizations, as amended.
An opinion on compliance with the rules and regulations for redevelopment agencies, as
published by the Office of State Controller, will also be required.
D. Reports to be issued
Following the completion of the audit of the fiscal year's financial statements, the Auditor shall
issue:
1. A report on the fair presentation of the financial statements in conformity with
generally accepted accounting principles.
2. A Single Audit Report.
3. A Financial and Compliance Audit of the Redevelopment Agency.
4. An Agreed Upon Procedures Report in connection with annual calculations of
appropriations limit.
City of Tustin RFP
Page 3 of 20
in t comm, any--reportable -
conditions found during the audit. A reportable condition shall be defined as a significant
deficiency in the design or operation of the internal control structure, which could adversely
affect the organization's ability to record, process, summarize, and report financial data
consistent with the assertions of management in the financial statements. Reportable
conditions that are also material weaknesses shall be identified as such in the report.
Non -reportable conditions discovered by the Auditors shall be reported in a separate letter to
management, which shall be referred to in the report(s) on internal controls.
The reports on compliance shall include all instances of significant non-compliance.
Irregularities and Illegal Acts. Auditors shall be required to make an immediate written report
of all irregularities and illegal acts or indications of illegal acts of which they become aware to
the following parties: City Manager, City Attorney, Audit Commission.
Reporting to the Audit Commission. Auditors shall assure themselves that the City of
Tustin's Audit Commission is informed of each of the following in accordance with
Independence Standards Board (ISB) Standard No. 1:
1. The Auditor's responsibility under generally accepted auditing standards
2. Significant accounting policies
3. Management judgments and accounting estimates
4. Significant audit adjustments
5. Other information in documents containing audited financial statements
6. Disagreements with management
7. Management consultation with other accountants
8. Major issues discussed with management prior to retention
9. Difficulties encountered in performing the audit
E. Special Considerations
1. The City of Tustin will send its Comprehensive Annual Financial Report to the
Government Finance Officers Association of the United States and Canada for review
in its. Certificate of Achievement for Excellence in Financial Reporting program. It is
anticipated that the Auditor will not be required to provide special assistance to the City
of Tustin to meet the requirements of that program.
2. The City of Tustin may prepare one or more official statements in connection with the
sale of debt securities which will contain the general purpose financial statements and
the Auditor's report thereon. The Auditor shall be required, if requested by the fiscal
advisor and/or the underwriter, to issue a "consent and citation of expertise" as the
Auditor and any necessary "comfort letters" at no additional cost to the City.
3. The City of Tustin has determined that the State Controllers Office will function as the
cognizant agency in accordance with the provisions of the Single Audit Act and U,S.
City of Tustin RFP
Page 4 of 20
Office of Management and Budget (OMB) Circular A-1 33.
4. The Single Audit Report is not to be included in the comprehensive annual financial
report, but is to be issued separately.
5. A|ist of findings and other weaknesses from the City ofTustin'smost recent financial
statement audit are attached tothis document (APPENDIX A).
F. Working Paper Retention and Access to Working Papers
All working papers and reports must baretained, edthe Auditor's expense, for ominimum of
three CB yoara, unless the finn is notified in writing by the City of Tustin of the need to extend
the retention period. The Auditor will be required to make working papers avei|ab|e, upon
request, tothe following parties ortheir designees:
City of Tustin
State Controller's Office
U.S. General Accounting Office (GAO); and
Parties designated bvthe federal or state Qcmernnnontm orbvthe City of Tustin as pad of
anaudit quality review process; and
Auditors ¢fentities ofwhich City ofTustin kymsub-recipient mfQnantfunds
Auditors ofentities o/which the City ofTustin imacomponent unit
|naddition, the firm shall respond to the reasonable inquiries ofsuccessor Auditors and allow
successor Auditors to review working papers relating to rnottoro of continuing accounting
significance.
Ill. DESCRIPTION OF THE GOVERNMENT
A. Background Information
The City of Tustin serves an area of 11.07 square miles with a population of 74,825. The City's
fiscal year begins onJuly 1and ends onJune 3O. ^
The City of Tustin is a full service City providing Administration, Community Development,
Public Works, Police, and Parks and Recreation services tothe c#mmmnunib/. 'Fire Protection
services are contracted forth the Orange County Fire Authority.
'
The City of Tustin has a total annual payroll of $24,600,000 covering 380 full and a
employees. The City is organized into departments and agencies. The accounting and
financial reporting functions of the City are centralized.
More detailed information on the government and its finances can be found /n Budget
d#curnenta.[��co|Stotennanta.and Annual Financial Renu�o.
B. Fund Structure
The City ofTustin uses the following fund types and account groups inits financial reporting.
City of Tustin RFP
Page 5of2O
Number of Number with Legally
Fund Type/Account Group Individual Funds Adopted Annual Budgets
General Fund 6 6
City Capital Fixed Assets 1
Non -Major Governmental Funds
Special Revenue Funds 15 15
Debt Service Funds 3 3
Capital Project Funds 8 8
Permanent (established by GASB 34)
Proprietary Funds 4 3
Private -purpose Trust (established by GASB 34) 1
Agency Funds 2
C. Budgetary Basis of Accounting
The City of Tustin prepares its budgets on a basis consistent with generally accepted
accounting principles.
D. Federal and State Financial Assistance
During the fiscal years to be audited, the City of Tustin may receive the following types of
financial assistance.
County Grants: OCTAISCRRA; Prop. 42 OCCAP; RNSP; SLESF
State Grants: AB 2928 Traffic Congestion Relief Fund; Measure M and
Proposition 111; Office of Traffic Safety; Recycling; SB 90
Funds; State of California Parks Bond Acts; Sobriety Check Point
Federal Grants: Bio -Chem Grant; Community Development Block Grants; USDOJ
Office of Justice Programs; Click It or Ticket; Dept. of
Transportation RSTP-STP; American Recovery & Reinvestment
Act (ARRA)
E. Pension Plans
The City of Tustin is a member of the State of California Public Employees' Retirement System.
F. Component Units
The City of Tustin is defined, for financial reporting purposes, in conformity with the
Governmental Accounting Standards Board's Codification of Governmental Accounting and
Financial Reporting Standards, Section 2100. Using these criteria, component units are
included in the City of Tustin's Financial Statements.
The Management of the City of Tustin has identified the following component units for inclusion
in the City of Tustin's Financial Statements:
Tustin Community Redevelopment Agency
City of Tustin RFP
Page 6 of 20
These component units are to be audited as part of the audit of the City's Financial Statements.
G. Joint Ventures
The City of Tustin does participate in joint ventures with other governments.
Name of Name of Other Type of
Joint Venture Participatina Governments Services Provided
California Insurance
Pool Authority
Orange County Fire Authority
Cities of Brea, Cypress,
Irvine, Laguna Beach,
Los Alamitos, Montclair,
Orange, San Clemente,
Westminster, Yorba Linda
H. Magnitude of Finance Operations
Insurance Pooling
and Excess Insurance
Fire Protection Services
The Finance Department is headed by Pamela Arends-King, Finance Director, and consists of
16 employees. The principal functions performed and the number of employees assigned to
each is as follows:
Function Number of Emplovees
Finance Director I
Accounting Supervisor 1
Sr. Financial Analyst I
Payroll Specialist 1
Sr. Accounting Specialist 3
Accounting Specialist 4
Part -Time Accountant I
Water Meter Reader 2
PT Business License Tech. 1
Administrative Secretary 1
1. Availability of Prior Audit Reports and Management Letters
The City of Tustin's most recent Comprehensive Annual Financial Report (CAFR) and Auditor's
Management Letter for the FY ended June 30, 2009 are included in Appendix A. The 2010
CAFR will be posted on the City's website no later than February 4, 2011. Interested proposers
who wish to review any prior year audit reports and management letters should contact Pamela
Arends-King at 300 Centennial Way, Tustin, California, 92780; telephone number (714) 573-
3061, and e-mail address Parends-kinga-tustinca,ora.
City of Tustin RFP
Page 7 of 20
`IV. TIME REQUIREMENTS
A. Proposal Calendar
Request for Proposals Issued:
Due Date For Proposals:
B. Notification and Contract Dates
Selected Firm Notified:
Projected Contract Date:
C. Date Audit May Commence
January 25, 2011
5:00 p.m. Thursday, February 24, 2011
April 6, 2011
April 29, 2011
The City of Tustin will have all records ready for audit and management personnel available to
meet with the firm's personnel no later than mid-May, 2011.
D. Schedule for the 2011 Fiscal Year Audit
(A similar schedule will be developed for audits of future fiscal years if the City of Tustin
exercises its option for additional audits.)
Each of the following shall be completed by the Auditor no later than the dates indicated.
1. Interim Work
The Auditor shall complete all interim work between May/June, 2011.
2. Detailed Audit Plan
The Auditor shall provide the City of Tustin by June 30, 2011 both a detailed audit plan
and a list of all schedules to be prepared by the City of Tustin.
3. Field Work
The Auditor shall complete all field work by mid-October, 2011.
4. Draft Reports
The Auditor shall have drafts of the audit report(s) and recommendations to
management available for review by the Finance Director by November 8, 2011.
E. Entrance Conferences, Progress Reporting and Exit Conferences
(A similar time schedule will be developed for audits of future fiscal years if the City of Tustin
exercises its option for additional audits.)
At a minimum, the following conferences should be held by the dates indicated on the schedule:
Entrance conference with all key Finance Department personnel * week of May 16
The purpose of this meeting will be to discuss prior audit problems and the interim work to be
performed. This meeting will also be used to establish overall liaison for the audit and to make
City of Tustin RFP
Page 8 of 20
* Progress conference, if necessary, with Audit Commission and the Finance Director
* approximately mid -.lune
The purpose of this meeting will be to discuss the year-end work to be performed, to
summarize the results of the preliminary review, and to identify the key internal controls or other
matters to be tested.
" Entrance conference with Finance Director to commence year-end audit work
* approximately September 6
k Exit conference with Finance Director * approximately mid-October
The purpose of this meeting will be to summarize the results of the field work and to review
significant findings.
F. Date Final Report is Due
The Finance Department will complete their review of the draft report as expeditiously as
possible. During that period, the Auditor should be available for any meetings that may be
necessary to discuss the audit reports. Once all issues for discussion are resolved, the final
signed report shall be delivered to the Finance Director. It is anticipated that this process will
be completed and the final report delivered by November 22, 2011. The auditors will present
the final report to the City Council and Audit Commission.
Fifteen (15) copies of each of the final reports shall be delivered to Pamela Arend$ -King,
Finance Director, at 300 Centennial Way, Tustin, California, 92780.
V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION
A. Finance Department and Clerical Assistance
The Finance Department staff and responsible management personnel will be available during
the audit to assist the firm by providing information, documentation and explanations. The
preparation of confirmations will be the responsibility of the City of Tustin. In addition, clerical
support will be made available to the Auditor for preparation of routine letters and memoranda.
B. Computer Applications Assistance
I.T. personnel will be available to assist the Auditor in performing the engagement. They will
also be available to provide systems documentation and explanations. The Auditor may be
provided computer time and the use of the City of Tustin's computer hardware and software.
C. Work Area, Telephones, Photocopying and FAX Machines
The City of Tustin will provide the Auditor with reasonable work space, desks and chairs. The
Auditor will also be provided with access to a telephone line, photocopying facilities and FAX
machines.
City of Tustin RFP
Page 9 of 20
Report preparation and editing shall be the responsibility of the Auditor.
VI. PROPOSAL REQUIREMENTS
A. General Requirements
Inquiries
Inquiries concerning the Request for Proposals and the subject of the Request for Proposals
must be made to:
Pamela Arends-King, Finance Director
300 Centennial Way
Tustin, CA 92780
(714) 573-3061
Parends-kingatustinca. org
CONTACT WITH PERSONNEL OF THE CITY OF TUSTIN OTHER THAN PAMELA ARENDS-
KING, FINANCE DIRECTOR, REGARDING THIS REQUEST FOR PROPOSALS MAY BE
GROUNDS FOR ELIMINATION FROM THE SELECTION PROCESS.
2. Submission of Proposals
The following material is required to be received by 5-00 p.m. on Thursday. February 24,
2011 for a proposing firm to be considered.
a. A master copy (so marked) of a Technical Proposal and six (6) copies to include the
following:
i. Title Page
Title page showing the Request for Proposals' subject; the firm's name; the name,
address and telephone number of a contact person; and the date of the proposal.
Table of Contents
Transmittal Letter
A signed letter of transmittal briefly stating the proposer's understanding of the work to
be done, the commitment to perform the work within the time period, a statement why
the firm believes itself to be best qualified to perform the engagement and a statement
that the proposal is a firm and irrevocable offer for 120 days.
iv. Detailed Proposal
The detailed proposal should follow the order set forth in Section VI B of this Request
for Proposals. It should include an executive summary and be limited to a maximum of
25 pages, single sided, double spaced.
City of Tustin RFP
Page 10 of 20
V. -Exe-cUte-d-COPie �-GLPMPQser-Guarantees-and-ANaaanties, attached •
Request for Proposals (APPENDIX C.)
b. The Proposer shall submit an original and six (6) copies of a dollar cost bid in a
separate sealed envelope marked as follows:
SEALED DOLLAR COST BID PROPOSAL FOR CITY OF TUSTIN
FOR PROFESSIONAL AUDITING SERVICES
DATE
c. The Proposer shall submit an original and six (6) copies of the completed technical
Proposal, along with the separate sealed dollar cost bid envelope to the following
address:
Pamela Arends-King
Finance Director
300 Centennial Way
Tustin, CA 92780
B. Technical Proposal
General Requirements
The purpose of the technical proposal is to demonstrate the qualifications, competence and
capacity of the firms seeking to undertake an independent audit of the City of Tustin in
conformity with the requirements of this Request for Proposals. As such, the substance of
proposals will carry more weight than their form or manner of presentation. The technical
proposal should demonstrate the qualifications of the firm and of the particular staff to be
assigned to this engagement. It should also specify an audit approach that will meet the
Request for Proposals' requirements.
THERE SHOULD BE NO DOLLAR UNITS OR TOTAL COSTS INCLUDED IN THE
TECHNICAL PROPOSAL DOCUMENT.
2. Independence
The firm should provide an affirmative statement that it is independent of the City of Tustin as
defined by generally accepted auditing standards. The firm also should provide an affirmative
statement that it is independent of all of the component units of the City of Tustin as defined by
those same standards.
The firm should list and describe the firm's (or proposed subcontractor's) professional
relationships involving the City of Tustin or any of its component units for the past five (5) years,
together with a statement explaining why such relationships do not constitute a conflict of
interest relative to performing the proposed audit.
In addition, the firm shall give the City of Tustin written notice of any professional relationships
entered into during the period of this agreement.
City of Tustin RFP
Page 11 of 20
3. License W-Practice in California
An affirmative statement should be included indicating that the firm and all assigned key
professional staff are properly licensed to practice in California.
4. Firm Qualifications and Experience
The proposal should state the size of the firm, the size of the firm's governmental audit staff,
the location of the office from which the work on this engagement is to be performed, the
number and nature of the professional staff to be employed in this engagement on a full-time
basis, and the number and nature of the staff to be so employed on a part-time basis.
If the proposer is a joint venture or consortium, the qualifications of each firm comprising the
joint venture or consortium should be separately identified and the firm that is to serve as the
principal Auditor should be noted, if applicable.
The firm is also required to submit a copy of the report on its most recent external quality
control review, with a statement whether that quality control review included a review of specific
government engagements.
The firm shall also provide copies of the results of any federal or state desk reviews or field
reviews of its audits during the past three (3) years.
In addition, the firm shall provide information on the circumstances and status of any
disciplinary action taken or pending against the firm during the past three (3) years with state
regulatory bodies or professional organizations.
5. Partner, Supervisory and Staff Qualifications and Experience
The firm should identify the principal supervisory and management staff, including engagement
partners, managers, other supervisors and specialists, who would be assigned to the
engagement and indicate whether each such person is licensed to practice as a Certified Public
Accountant in California. The firm also should provide information on the government auditing
experience of each person, including information on relevant continuing professional education
for the past three (3) years and membership in professional organizations relevant to the
performance of this audit.
The firm should provide as much information as possible regarding the number, qualifications,
experience and training, including relevant continuing professional education, of the specific
staff to be assigned to this engagement. The firm also should indicate how the quality of staff
over the term of the agreement will be assured.
Engagement partners, managers, other supervisory staff and specialists may be changed if
those personnel leave the firm, are promoted or are assigned to another office. These
personnel may also be changed for other reasons with the express prior written permission of
the City of Tustin. However, in either case, the City of Tustin retains the right to approve or
reject replacements.
Consultants and firm specialists mentioned in response to this Request for Proposals can only
City of Tustin RFP
Page 12 of 20
be changed with the express prior written pPrmiacion of the (`it�nf T� irdiin ieihirh _ the
right to approve or reject replacements.
Other audit personnel may be changed at the discretion of the proposer provided that
replacements have substantially the same or better qualifications or experience.
6. Prior Engagements with the City of Tustin
The firm should list separately all engagements within the last five (5) years, ranked on the
basis of total staff hours, for the City of Tustin by type of engagement (i.e., audit, management
advisory services, other). For each engagement, the firm should indicate the scope of work,
date, engagement partners, total hours, location of the firm's office from which the engagement
was performed, and the name and telephone number of the principal client contact.
7. Similar Engagements with Other Government Entities
For the firm's office that will be assigned responsibility for the audit, list the most significant
engagements (maximum of 5) performed in the last five (5) years that are similar to the
engagement described in this Request for Proposals. These engagements should be ranked
on the basis of total staff hours.
Indicate the scope of work, date, engagement partners, total hours, and the name and
telephone number of the principal client contact.
8. Specific Audit Approach
The proposal should set forth a work plan, including an explanation of the audit methodology to
be followed, to perform the services required in Section II of this Request for Proposals. In
developing the work plan, reference should be made to such sources of information as the
City of Tustin's budget and related materials, organizational charts, manuals and programs, and
financial and other management information systems.
Proposers will be required to provide the following information on their audit approach:
a. Proposed segmentation of the engagement
b. Level of staff and number of hours to be assigned to each proposed segment of the
engagement
NO DOLLARS SHOULD BE INCLUDED IN THE TECHNICAL PROPOSAL
c. Sample sizes and the extent to which statistical sampling is to be used in the
engagement
d. Extent of use of EDP software in the engagement
e. Type and extent of analytical procedures to be used in the engagement
City of Tustin RFP
Page 13 of 20
internal control structure
g. Approach to be taken in determining laws and regulations that will be subject to audit
test work
h. Approach to be taken in drawing audit samples for purposes of tests of compliance
9. Identification of Anticipated Potential Audit Problems
The proposal should identify and describe any anticipated potential audit problems, the firm's
approach to resolving these problems and any special assistance that will be requested from
the City of Tustin.
10. Report Format
The proposal should include sample formats for required reports.
NO DOLLARS SHOULD BE INCLUDED IN THE TECHNICAL PROPOSAL
C. Sealed Dollar Cost Bid
1. Total All-inclusive Maximum Price
The sealed dollar cost bid should contain all pricing information relative to performing the audit
engagement as described in this Request for Proposals. The total proposed price to be bid is
to contain all direct and indirect costs including all out-of-pocket expenses. An escalation factor
may be addressed in the sealed dollar cost bid that will allow for an accurate evaluation of the
total cost for the five (5) year engagement period.
The first page of the sealed dollar cost bid will be a completed APPENDIX C, PROPOSER
GUARANTIES AND WARRANTIES.
APPENDIX D, SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF
THE 2011 FINANCIAL STATEMENTS
The second page of the sealed dollar cost bid should include a schedule of your fees and
expenses, presented in the format provided in the attachment (APPENDIX D) that supports the
total all-inclusive maximum price, and should include:
Rates by Partner, Specialist, Supervisory and Staff Level Times J Hours Anticipated for
Each
Out-of-pocket Expenses Included in the Total All -Inclusive Maximum Price and
Reimbursement Rates
Proposal for Subsequent Years
City of Tustin RFP
Page 14 of 20
2. Rates for Additional Professional Services
If it should become necessary for the City of Tustin to request the Auditor to render any
additional services, then such additional work shall be performed only if set forth in an
addendum to the contract between the City of Tustin and the firm. Any such additional work
agreed to between the City of Tustin and the firm shall be performed at the same rates set forth
in the schedule of fees and expenses included in the sealed dollar cost bid.
3. Manner of Payment
Progress payments will be made on the basis of hours of work completed during the course of
the engagement and out-of-pocket expenses incurred in accordance with the firm's dollar cost
bid proposal. Interim billings shall cover a period of not less than a calendar month.
VII. EVALUATION PROCEDURES
A. Review of Proposals
The Audit Commission will use a point formula during the review process to score proposals.
Each member of the Audit Commission will first score each technical proposal by each of the
criteria described in Section VII C below. The full Audit Commission will then convene to review
and discuss these evaluations and to combine the individual scores to arrive at a composite
technical score for each firm. At this point, firms with an unacceptably low technical score will
be eliminated from further consideration.
After the composite technical score for each firm has been established, the sealed dollar cost
bid will be opened and additional points will be added to the technical score based on the price
bid. The maximum score for price will be assigned to the firm offering the lowest total all-
inclusive maximum price. Appropriate fractional scores will be assigned to other proposers.
B. Evaluation Criteria
Proposals will be evaluated using three sets of criteria. Firms meeting the mandatory criteria
will have their proposals evaluated and scored for both technical qualifications and price. The
following represents the principal selection criteria which will be considered during the
evaluation process.
1. Mandatory Elements
a. The audit firm is independent and licensed to practice in California.
b. The audit firm's professional personnel have received adequate continuing
professional education within the preceding two years.
C. The firm has no conflict of interest with regard to any other work performed by
the firm for the City of Tustin.
d. The firm submits a copy of its most recent external quality control review report
and the firm has a record of quality audit work.
e. The firm adheres to the instructions in this Request for Proposals on preparing
and submitting the proposal.
City of Tustin RFP
Page 15 of 20
1"M �--Mb j] rr._a pr- X 7--V-1w
a. Expertise and Experience (Maximum Points - 45)
(1) Such as the firm's past experience and performance on comparable
government engagements.
(2) Such as the quality of the firm's professional personnel to be assigned to
the engagement and the quality of the firm's management support
personnel to be available for technical consultation.
b. Audit Approach (Maximum Points - 30) Including, but not limited to:
(1) Such as adequacy of proposed staffing plan for various segments of the
engagement.
(2) Such as adequacy of sampling techniques.
(3) Such as adequacy of analytical procedures.
3. Price (Maximum Points - 26)
COST WILL NOT BE THE PRIMARY FACTOR IN THE SELECTION OF AN AUDIT FIRM
City of Tustin RFP
Page 16 of 20
AUDITORS MANAGEMENT LETTER AND COPY OF MOST RECENT AUDIT REPORT
City of Tustin RFP
Page 17 of 20
CITY OF TUSTIN
ORGANIZATIONAL CHART
City of Tustin RFP
Page 18 of 20
PROPOSER GUARANTEES AND WARRANTIES
A. The proposer certifies it can and will provide and make available, at a minimum, all
services set forth in Section 11, Nature of Services Required.
B. Proposer warrants that it is willing and able to obtain Professional Liability Insurance
providing limits not less than one (1) million dollars of coverage for the willful or
negligent acts, or omissions of any officers, employees or agents thereof, or show
evidence of the ability to provide substitute security equal to the same limit.
C Proposer warrants that it will not delegate or subcontract its responsibilities under an
agreement without the express prior written permission of the City of Tustin.
D. Proposer warrants that all information provided by it in connection with this proposal is
true and accurate.
Signature of Official:
Name (typed):
Title:
Firm:
Date:
City of Tustin RFP
Page 19 of 20
A NDIX D
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE
2011 FINANCIAL STATEMENTS
Standard Quoted
Hours Hourly Rates Hourly Rates Total
Partners $ $ $
Managers $ $ $
Supervisory Staff $ $ $
Staff $ $
Other (specify) $ $
SUBTOTAL $ $ $
Out-of-pocket expenses:
Meals and Lodging
Transportation
Other (specify)
TOTAL proposed price for 2011 audit
r, 3
ra
Q
Fee and Expense Proposal for Subsequent Years:
Escalation Factor 2012 2013 2014 2015
S:\Linda\Audit Commission\RFP Tustin Final.doc
City of Tustin RFP
Page 20 of 20
PROPOSAL
CITY OF TUSTIN
TECHNICAL AUDIT PROPOSAL
FOR THE THREE YEARS ENDING JUNE 30, 2013
(WITH AN OPTION FOR EACH OF THE TWO YEARS
ENDING JUNE 30, 2014 AND JUNE 30, 2015)
Submitted By:
DIEHL, EVANS & COMPANY, LLP
BUILDING OUR FUTURE
HONORING OUR PAST
TITLE PAGE
RFP Subject:
Certified Audits onthe City ofTustin
For the Three Years Ending June 30 2013
(With anOption for Each ofthe Two Years
Ending June 3D'ZO14and June 30,2O15)
Name ofProposer:
Diehl, Evans & Company, LLP
Cert|fiedPublic Accountants and Consultants
Local Address:
5Corporate Pad, Suite 100
Irvine, CA926OG'5165
Telephone:
(949) 399-0600
Fax:
(949) 399-0610
Federal Identification Number:
95-3497193
California CPA License Number:
PAR 997
Website:
vvvvw.d|eh|evans.com
Email:
m|ke/@d|eh!evans.00nn
Contact Persons:
Michael R. Lud|n'CRA
Engagement Partner
N|t|nP.Patel, CPA
Concurring Review Partner
Date:
February 24,2O11
11A DIEHL, EV8NS ~= ��
COMPANY, LLP
comnEDPUBLIC ACCOUNTANTS &cnmnuzAVTS
CITY OF TUSTIN
TABLE OF CONTENTS
February 24, 2011
Page
Number
Letter of Transmittal
1-2
Firm Profile and Qualifications:
Licensing and Independence
3
Size and Location of Firm
3
Range of Activities
3
Participation in "Quality Review" Programs
4
Education Programs
4
Participation in Professional Organizations
5
GFOA and CSMFO Award Programs
6
Computer Auditing Capabilities
6
Firm Experience with Governmental Entities:
Similar Engagements with Other Municipal Entities
7
City Client References
7
Redevelopment Agency Experience
7
Enterprise Fund Experience
8
Single Audit Experience
8
Experience with Preparation of State -Mandated Reports
9
Special Districts
9
Nonprofit Corporations and Joint Power Authorities
9
Partner, Supervisory and Staff Qualifications and Experience:
Audit Team
10
Commitment Related To Personnel
10
Nondiscrimination Policy
10
Resumes of Audit Team Personnel
11-14
Scope of Work, Timing and Audit Approach:
Entities to Be Included In Audit
15
Reports To Be Issued and Due Dates
15
Audit Timing
16
Commitment to Deliver Reports on a Timely Basis
16
Audits To Be In Accordance With GRAS and Other Requirements
16-17
Audit Approach
17-18
Approach To Internal Control
19
Single Audit Approach
19-20
kh. A- "111 DIEHL, EVANS & COMPANY, LLP
ffml J CSMIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
L.A
CITY OF TUSTIN
(CONTINUED)
February 24, 2011
23
GASB Statement No. 57
Page
GASB Statement No. 59
Number
Scope of Work, Timing and Audit Approach (Continued):
23
Determining Laws and Regulations Subject to Audit
20
Method of Sampling
20
Analytical Procedures
21
Management Letters
21
Potential Audit Problems
21
Retention Of and Access to Audit Workpapers
21
Other Professional Services
21
Segmentation of the Audit Hours, By Partner and Staff Level
22
Discussion of Relevant Accounting Issues:
GASB Statement No. 54
23
GASB Statement No. 57
23
GASB Statement No. 59
23
GASB Statement No. 60
23
GASB Statement No. 61
23
GASB Statement No. 62
23
Work Required by City Staff
24
Consulting Services Department:
Overview of Services Provided
25
Attachment 1:
City Client References
List of Similar City Engagements
List of Special District Engagements
Attachment 11 - Results of Outside Quality Review
Attachment III - Organization Chart
Attachment IV - Sample Reports
Proposer Guarantees and Warranties
IML An "I DIEHL, EVANS& COMPANY, LLP
FMI J CERTIFIED FUIYLIC ACCOUNTANTS 6r CONSULTANTS
DIEHL, EVANS & COMPANY, LLP
A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS
5 CORPORATE PARK, SUITE 100
IRVINE, CALIFORNIA 92606-5165
(949) 399-0600 • FAX (949) 399-0610
wyw.dicWcYans.wm
February 24, 2011
Ms. Pamela Arends-King
Finance Director
City of Tustin
300 Centennial Way
Tustin, CA 92780
Dear Ms. Arends-King:
MICHAEL R LUDIN, CPA
CRAIG W. SPRAIWt CPA
NITIN P, PATE, CPA
ROMMT 7. CALLANAN, CPA
•PHW H HOLTRAW, CPA
•THOMAS M PERLOWM CPA
•HARVEY 7. SCEMOEDER, GRA
KWNEfHR AM=, CPA
WIL JAM C. PM474 CPA
•A PP.CrEspopm CCRPCRATIQ7
We are pleased to present our proposal to serve as independent auditors for the City of Tustin. We
have prepared this information in accordance with the guidelines set forth in your request for
proposal
Why We Are The Best Qualified Firm
We consider ourselves to be the best qualified firm to perform auditing and accounting services for
the City of Tustin. Please consider these qualifications:
• Diehl, Evans and Company, LLP has been in existence for more than 80 years and providing
auditing services to governmental agencies since 1950. A significant part of our practice is
devoted to providing professional services to your specialized industry and on an annual basis our
firm audits over 100 governmental agencies Including, Cities, Redevelopment Agencies, Special
Districts and other governmental agencies.
• our firm has devoted a substantial amount of time and resources in order to provide
governmental agencies with quality audits. Our knowledge of the Industry is best demonstrated
by the fact that our clients who apply for the "Outstanding Award in Financial Reporting" issued
by the California Society of Municipal Finance Officers (CSMFO) and the "Certificate of
Achievement in Financial Reporting" issued by the Government Finance Officers Association
(GFOA) consistently receive these awards. A list of these clients is presented on page 6 of this
proposal.
• We are a full service CPA firm. Our Consulting Services Department can provide the City with a
variety of services, including investment policy compliance reviews, litigation support, dispute
resolution services, and consulting on a wide array of governmental issues,
OTHER OFFICES AT. 2965 ROOSEVELT STREET 613 W. VALLEY PARKWAY, SUITE 330
CARLSBAD, CALIFORNIA 92008.2389 ESOONDIDO, CALIFORNIA 92025-2598
(760) 729-2343 a FAX (760) 729-2234 (760) 741.3141 • FAX (760) 741-9890
Why We Are The Best Qualified Firm (Continued)
•_rstand that we provide a service to the�City. Our audit approach is tailored to meet ail v technical requirements while maintaining professional skepticism withoutof rgetting that we
provide a service. We are able to achieve this by partner involvement in all phases of the audit
and assigning experienced governmental audit staff to the engagement. The partner will be
involved in all phases of the audit including the planning, risk assessment procedures and final
review of all workpapers and financial reports. We have assigned experienced governmental
auditors to this audit engagement, including the senior manager, Daphnie Munoz, CPA with
12 years of experience and the audit supervisor, Sarah H. Ro, CPA with 9 years of experience to
this engagement. Partner involvement will result in decisions being made on a timely basis and
experienced staff, familiar with municipal procedures and records, will minimize disruption to
your staff.
The scope of our services for the three years ending June 30, 2013 would be as follows:
• A financial audit of the basic financial statements of the City of Tustin in accordance with
! Governmental Auditing Standards to be Included in the Comprehensive Annual Financial
Report (CAFR).
• A management letter under Statements of Auditing Standards No. 115, containing any
comments or recommendations resulting from our review of the systems of internal controls
in connection with the financial audits.
• A report under Statements of Auditing Standards No. 114, communicating information related
to the audit to those in charge of governance at the conclusion of the audits.
• A financial and compliance audit of the Tustin Redevelopment Agency.
• A Single Audit of Federal Grants to be performed to meet the requirements of the U.S. Office
of Management and Budget (OMB) Circular A-133.
• An agreed-upon procedures review of the calculation of the City's GANN Appropriations Limit
(GANN), as required by Section 1.5 of Article XIIiB of the California Constitution.
t • Preparation of the State Controller's Reports for the City of Tustin and the Tustin
j Redevelopment Agency.
We make a commitment to deliver all necessary reports based on the timetable presented herein on
page 15. Also, a more detailed discussion of our understanding of the work to be performed is set
forth on pages 15 through 21.
Our goal is to provide the City with the highest quality of service, including a CAFR which meets all
required reporting standards and a comprehensive management letter which is practical and helpful
to management in improving operations. We are confident that our service and experience will be of
benefit to the City and will provide added value over and above the performance of the audit itself.
Throughout the year, you should feel comfortable in calling us for advice regarding accounting and
auditing matters, as we are never too busy to meet the needs of our clients. We encourage you to
verify our level of service by contacting the references provided In this proposal.
We thank the City for the opportunity to present our proposal. Please feel free to contact me, or
Mr. Nitin P. Patel, CPA, at (949) 399-0600 if you have any questions. This proposal constitutes a firm
and irrevocable offer for 60 days from the date of this letter. Mr. Patel and I are authorized to
represent our firm, and bind the firm to a contract.
a Very truly yours,
DIEHL, EVANS & COMPANY, LLP
chael R. Ludin, CPA
Engagement Partner
FIRM PROFILE AND QUALIFICATIONS
_W_ Z
Our firm, and all of our certified personnel, are properly licensed to practice public accounting in
California.
Also, we meet the independence requirements of "Governmental Auditing Standards" as published
by the U.S. General Accounting Office. We have no conflict of interest with the City and will provide
written notice to the City of any professional relationships contemplated with the City during our term
as auditors., We have not provided auditing or any other services to the City during the past five years.
9"Miall 1111KIN111
Diehl, Evans & Company, LLP is a Southern California accounting firm with offices in Irvine, Carlsbad
and Escondido. We are one of the oldest CPA firms In Southern California, with over 80 years of public
practice experience.
Diehl, Evans & Company, LLP has extensive experience in providing auditing, accounting and
consulting services in the governmental sector. Over twenty thousand hours per year are devoted to
this area of our practice for nearly 100 governmental units including cities, redevelopment agencies,
water districts, special districts, nonprofit corporations and joint power authorities.
Our firm has 49 employees which includes 40 professional staff members. Your City would be served
from our Irvine office, which has 20 professional staff members.
Diehl, Evans & Company, LLP is a full service CPA firm. We offer a broad range of services, including:
Certified Audits
Compilations and Reviews
Agreed -Upon Procedure Reviews
Financial Services
Tax Planning
Income Tax Preparation
Consulting Services
Our specific services available to governmental agencies are more fully set forth in this proposal.
DIEHL, EVANS Si COMPANY, LLP
CERTIFIED nXL1C ACCOUNTANTS & CONSULTANTS
In 1986, our firm began an annual internal quality review program, whereby all three offices are
reviewed for compliance with all current accounting and auditing requirements. Formal reports of
these reviews are presented to the partners, and adjustments in our auditing and reporting
procedures are made as necessary.
In January 2009, our firm underwent a quality review by an independent CPA firm, under provisions of
the AICPA Quality Review Program. These reviews are required every three years and covered our
audits of governmental agencies. We received a final report dated January 28, 2009 with a pass rating
on our systems and procedures. A copy of the Independent CPA firm's report is included herein at
Attachment 11. Accordingly, we are confident that our current auditing standards and techniques meet
all existing requirements.
No regulatory action has ever been taken against any office of our firm due to substandard work. We
had no significant deficiencies noted in any federal or state desk reviews over the past three years.
Diehl, Evans & Company, LLP has a formal continuing education program. All firm auditors are
required to obtain 80 hours of continuing education every two years in the accounting and auditing
area as required by Government Auditing Standards, and at least 24 hours of government related
continuing education courses. Our staff is continually expanding their knowledge of the governmental
industry through our in-house training programs, programs offered by the AICPA, GFOA, the California
Society of Certified Public Accountants and other professional organizations, and through on-the-job
training.
Noted below is a description of certain in-house education courses taken by our partners and staff to
meet the governmental continuing education requirements. All personnel involved with governmental
auditing are required to attend these courses.
• Understanding the Risk Assessment Standards (SAS 104 -111)
• Understanding of GASB Statement No. 34, Basic Financial Statements - and Management's
Discussion and Analysis - for State and Local Governments
• Understanding, and Auditing, Deposits and Investments of California Governmental Units
• Understanding GASB Statements 43 and 45 related to Other Post Employment Benefits
• Reviews of Internal Controls in Accordance With Statements on Auditing Standards
• Assessing Audit Risk and Materiality in Conducting An Audit
• Understanding Statement on Auditing Standards No. 99 - Consideration of Fraud in a Financial
Statement Audit
• Redevelopment Agency Compliance Audits - interpreting the Health and Safety Code
• Computer Auditing in the Governmental Environment
• The Single Audit - New Provisions under OMB Circular A-133
• Laws and Regulations in the Government Sector
DIEHL, EVANS & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
-4-
Our partners and staff are actively involved in professional organizations in the governmental
accounting field. !Voted below is a summary of our participation in various national and California
governmental organizations.
AICPA
jOur firm is a member of the AICPA Governmental Audit Quality Center. The Center is a firm -based
voluntary membership Center whose primary purpose is to promote the importance of quality
governmental audits to purchasers of governmental audit services. The Center provides members
with an online forum tool for sharing best practices, as well as discussions on audit, accounting, and
regulatory issues. As a member of the Center, the firm receives updates on changes in auditing and
accounting standards that effect governmental audits. The quality control partner is required to
attend an annual web cast to discuss auditing and reporting issues effecting governmental audits. Our
firm uses the resources of the Center to maintain the quality of our governmental audits.
GFOA, GASB and FASB
Our firm Is an associate member of the Government Finance Officers Association of the United States
and Canada (GFOA).
Also, we have web based access to the latest pronouncements issued by the Governmental
Accounting Standards Board (GASB) and the Financial Accounting Standard Board (FASB), including
Interpretations, Technical Pronouncements and Newsletters. We regularly analyze these
pronouncements and advise our governmental clients of changes in accounting rules.
CSMFO and CRA
Three of our Irvine office partners (Mr. Michael Ludin, Mr. Nitin Patel and Mr. Robert Calianan) and
our Director of Consulting Services (Mr. William S. Morgan) are associate members of the California
Society of Municipal Finance Officers (CSMFO). Our personnel regularly attend local CSMFO chapter
meetings throughout Southern California, and the annual statewide conference. We often provide
public speakers for these meetings.
Our firm is also an active member in the California Redevelopment Association (CRA). We receive
monthly newsletters from CRA to keep us up to date on legal developments affecting redevelopment
agencies. Mr. Morgan periodically serves as a public speaker for seminars and workshops sponsored
f by CRA.
CSCPA
All partners, Mr. Morgan and several of our managers are all members of the Governmental
Accounting and Auditing (GAA) Committee of the Orange County Chapter, California Society of
Certified Public Accountants (CSCPA). Mc Patel, Mr. Ludin and Mr. Morgan have each served as
chairman of this committee. Firm personnel have been involved over the years in preparing position
papers issued for professional organizations on governmental accounting matters. Mr. Patel and
Mr. Callanan are members of the State Governmental Accounting and Auditing Committee.
DIEHL, EVANS & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
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The partner and manager will be involved in all phases of report preparation or review. Reporting
checklists will be used to assure compliance with all reporting requirements. In addition, another
member of the firm, not associated with the audit, and with extensive governmental auditing and
accounting experience, will review each financial statement audited and related reports. Based on
the high quality of our review process, we have been able to assist various cities in obtaining the
GFOA "Certificate of Achievement for Excellence in Financial Reporting" or the "Outstanding Award"
for financial reporting from CSMFO. During the past five years, the following clients received awards:
Alhambra
Downey
Lake Elsinore
Pico Rivera
Buena Park
Encinitas
Lakewood
Rancho Palos Verdes
Cerritos
Fullerton
Los Alamitos
San Fernando
Chino
Healdsburg
Mission Viejo
San Juan Capistrano
Commerce
Hesperia
Montebello
Santa Clarita
Coronado
Huntington Beach
Norwalk
Signal Hill
Del Mar
Indian Wells
Oceanside
Temecula
Diamond Bar
Irvine
Palm Desert
Thousand Oaks
Westminster
Each of our audit staff members is equipped with laptop computers with engagement software that
are used for workpaper preparation and facilitates the preparation and/or review of financial
statements. Utilizing spreadsheet and other programs, we will transfer data through direct input or
through downloading from the City's accounting system. This will allow us to streamline substantive,
tests and perform analytical reviews of accounts. This process reduces the time needed to prepare
lead schedules and to prepare and review financial statements. It also helps identify accounting and
auditing issues that may require further inquiry or investigation.
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CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
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FIRM EXPERIENCE WITH GOVERNMENTAL ENTITIES
Your request for proposal called for a maximum of five similar engagements, ranked by total staff hours. These
are set forth below:
Engagement
City Partner Hours Scope of Work
Palm Desert Patel 625 City, RDA and Single Audits
Fullerton Patel 615 City, RDA, AQMD and Single Audits; Cost
Allocations; and State Controller's Reports
Chino Ludin 590 City, RDA and Single Audits
Downey Ludin 575 City, RDA, AQMD, Cemetery District, Public
Financing Authority and Single Audits
Westminster Patel 420 City, RDA, AQMD and Single Audits
Certified audits were performed on the financial statements of all of these cities and their component units.
Client references for these cities are included below.
City of Palm Desert
Mr. Paul Gibson
Director of Finance
760-346-0611
City of Downey
Mr. John Michicoff
Finance Director
562-904-7262
City of Fullerton
Ms. Dianna L. Honeywell
Fiscal Services Manager
714-738-6523
City of Westminster
Ms. Sherry Johnson
Accounting Manager
714-898-3311
City of Chino
Mr. Rob Burns
Director of Finance
909-627-7577
A complete list of similar engagements for the past five years in included In Attachment I of this proposal.
CITY CLIENT REFERENCES
one means of judging the high quality of our auditing and accounting services would be contact with some of
our clients over the past year. We are including the names and phone numbers of the city clients as presented
in Attachment I of this proposal. We encourage you to contact any of these individuals and verify our level of
service.
REDEVELOPMENT AGENCY EXPERIENCE
Over the past year we audited the following redevelopment agencies.
Alhambra Redevelopment Agency
Avalon Community Improvement Agency
Redevelopment Agency of the City of
Buena Park
Community Development Commission of
the City of Downey
Fullerton Redevelopment Agency
Hesperia Redevelopment Agency
Huntington Beach Redevelopment Agency
Irvine Redevelopment Agency
City of Lake Elsinore Redevelopment Agency
Lakewood Redevelopment Agency
Marin County Redevelopment Agency
Palm Desert Redevelopment Agency
Rancho Palos Verdes Redevelopment Agency
San Fernando Redevelopment Agency
San Juan Capistrano Community
Redevelopment Agency
Signal Hill Redevelopment Agency
Westminster Redevelopment Agency
DIEHL, EVANS & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
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IIyTERPRISE FUND EXPERIENCE
Most cities audited by our firm have a water uti
other enterprise funds au Re your rrn aver
City
Alhambra
Avalon
Buena Park
Cerritos
Chino
Commerce
C Coronado
Del Mar
Downey
Encinitas
Fullerton
Healdsburg
Huntington Beach
Lakewood
Mission Viejo
Montebello
Norwalk
Oceanside
Palm Desert
Pico Rivera
Rancho Palos Verdes
San Fernando
San Juan Capistrano
Santa Clarita
Signal Hill
t Thousand Oaks
tWestminster
,e fund. Noted below is a partial listing of
years:
Enterprise
Water, Sewer, Storm Drain, Sanitation, Golf Course
Harbor, Sewer, Saltwater, Solldwaste, Hospital
Water
Reclaimed Water
Water, Sewer, Sanitation System
Water, Transit System, Cable Television
Golf Course, Sewer
Sewer
Golf Course, Transit System
Water, Sanitation
Water, Refuse
Electric, Water, Sewer, Transit
Water, Sewer, Refuse Collection
Water
Animal Services, Television
Water, Golf, Transit System
Transit
Harbor
Golf Course
Water
Water Quality Flood Protection
Water, Sewer
Water, Sewer
Transit
Water
Water, Sewer, Golf
Water
R['►4 . 1 _!i 4 , �TiiWW
We perform single audit services for most of our cities that receive federal funds as required by
OMB Circular A-133. Over the past year, Single Audits were performed for the following cities.
City of Alhambra
City of Buena Park
City of Downey
City of Fullerton
City of Hesperia
City of Huntington Beach
City of Irvine
City of La Habra Heights
DIEHL, EVANS & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
City of Lake Elsinore
City of Lakewood
City of Los Alamitos
City of Palm Desert
City of Rancho Palos Verdes
City of San Fernando
City of San Juan Capistrano
City of Signal Hill
City of Westminster
We have experience with the preparation of various state -mandated reports, such as the State
Controller's Report, the Annual Street Report and Statement of indebtedness. Specifically, with
regard to cities, we have prepared the state mandated reports, over the past year, for the Cities of
Avalon, Buena Park, Fullerton, La Habra Heights, Los Alamitos and Rancho Palos Verdes.
Noted below is a listing of special districts audited by our firm over the past year.
Borrego Water District
Costa Mesa Sanitary District
Downey Cemetery District
EI Toro Water District
La Habra Heights County Water District
La Puente Valley County Water District
Laguna Beach County Water District
Las Virgenes Municipal Water District
Leucadia County Water District
Municipal Water District of Orange County
Olivenhain Municipal Water District
Orange County Water.District
Otay Water District
Padre Dam Municipal Water District
Pomona -Walnut -Rowland Joint
Water Line Commission
Puente Basin Water Agency
Rowland Water District
Sunset Beach Sanitary District
Surfside Colony Stormwater Drainage District
Surfside Community Services District
Valencia Heights Water Company
Valley Wide Recreation and Park District
Walnut Valley Water District
Yorba Linda Water District
Noted below is a partial listing of nonprofit corporations and joint power authorities audited by our
firm over the past year. A substantial number of these entities are "component units" which are
combined into the basic financial statements of governmental organizations which exercise oversight
responsibility.
Age Well Senior Services, Inc.
Annunciation Byzantine Catholic Church
of Anaheim
Buena Park Foundation
Cal State L.A. Metrolink Authority
Downey Public Financing Corporation
Grace Lutheran Church
Irvine Community Land Trust
Lake Elsinore Public Financing Authority
Lake Elsinore Recreation Authority
DIEHL, EVANS & COMPANY, LLP
CERTIFIED FUBUC ACCOUNTANTS & CONSULTANTS
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Las Virgenes-Triunfo Joint Powers Authority
Palm Desert Recreational Facilities
Corporation
Public Cable Television Authority
South County Senior Services
Southeast Area Animal Control Authority
United Cerebral Palsy Association
Valencia Heights Water Company
Walnut Valley Building Corporation
Westview Services, inc. 403(b) Plan
PARTNER, SUPERVISORY AND STAFF QUALIFICATIONS AND
EXPERIENCE
The audit team assembled consists of individuals who have extensive experience auditing
governmental agencies and are familiar with municipal accounting. in addition, each team member's
skill and experience developed working in other industries our firm serves can be applied to the
individual requirements of the City of Tustin.
The personnel assigned to the engagement team are as follows:
The engagement partner will be Mr. Michael R. Ludin, CPA. Mr. Ludin has over 30 years of experience
with audits of local governments. He will be involved with all phases of the audit including (a) the
planning phase of the audit to assess risks related to the audit (b) a final review of all the work papers
and financial reports, and (c) attending any meetings with City's management and City council at the
conclusion of the audit. He will be responsible for assuring that all work for the City is performed in a
complete and timely manner.
Mr. Nitin P. Patel, CPA, will be the Concurring Review Partner and will perform a quality review of all
reports issued in connection with the audit. Mr. Patel has over 25 years of experience with audits of
local governments. He will also consult in the accounting treatment of unusual transactions or audit
Issues.
Mrs. Daphnie Munoz, CPA, will serve as the senior audit manager. Mrs. Munoz has over 12 years of
experience with audits of local governments. She will be the primary contact for the City and related
audits. She will (a) perform the initial review of the work papers including a review of the work
completed related to internal controls, (b) supervise the completion of the financial reports and
management letter and (c) assist in the audit of any complex or unusual audit areas.
The audit senior will be Ms. Sarah H. Ro, CPA. Ms. Ro has over 9 years of public accounting
experience. She will be onsite supervising staff accountants and performing the fieldwork including
performing tests of internal controls, substantive tests of account balances, and analytical tests. She
will also draft the financial statements and various reports required for this engagement.
Resumes for the above partners and personnel are included at pages 11-14.
KII&I Oil 111UTT41, 4 1113 12 UO3 9 _3 %. 1
We make a commitment to retain the same personnel on the City from year to year, except where
such personnel leave the firm, or where the change is approved by the City. if a staff member is
replaced, we make a commitment to replace that person with staff of at least equal experience.
Our firm has a policy to provide equal employment opportunities to all qualified persons without
regard to race, color, age, sex, religion, national origin or handicap.
DIEHL, EVANS & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
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MICHAEL R. LUDIN. CPA
—I_R2g Rfl
Engagement Review Partner
Education
California State University, Fullerton
Bachelor of Arts in Business Administration,
with concentration in Accounting, 1975
Licensing
Certified Public Accountant in California since 1980
Professional
Organizations
American Institute of Certified Public Accountants (AICPA)
California Society of Certified Public Accountants (CSCPA)
Governmental Accounting and Auditing Committee of the Orange County
Chapter, California Society of CPAs, Past Chairman
Associate Member of Government Finance Officers Association (GFOA)
'
Associate Member of California Society of Municipal Finance Officers
(CSMFO)
CSMFO Professional and Technical Standards Committee - Report Reviewer for
Award Program
Range of
Experience
Has been with Diehl, Evans & Company, LLP since 1978 with emphasis in
governmental auditing and financial reporting.
Experience includes supervision of over one hundred audits of governmental
agencies including cities, redevelopment agencies, nonprofit corporations, and
joint power authorities.
Public speaker on municipal accounting and instructor at firm's in-house
governmental accounting and auditing seminars.
Managing Director of firm's Irvine office.
Continuing
Professional
Education
For the period of January 1, 2008 through December 31, 2010:
Total Hours: 261.00 Total Government Hours: 122.00
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NITIN P. PATEL, CPA
Education University of California at Irvine
Bachelor of Arts in Economics
California State University at Long Beach
Masters of Accounting Program
Licensing Certified Public Accountant in California since 1988
Professional
Organizations American Institute of Certified Public Accountants
California Society of Certified Public Accountants
California Society of Municipal Finance Officers (CSMFO) - Associate Member
CSMFO Professional and Technical Standards Review Committee
- Report Reviewer for Award Program
Governmental Accounting and Auditing Committee of Orange County
- Committee Chairman (2001-2002)
California Governmental Accounting and Auditing Committee Member
Range of
Experience Has been with Diehl, Evans & Company, LLP since 1986 with emphasis in
governmental accounting and financial reporting.
Responsible for firm's in-house governmental accounting and auditing training
programs.
Experience includes supervision of over one hundred audits of governmental
agencies including cities, redevelopment agencies, non-profit corporations,
joint powers authorities and special districts.
Other experience includes providing consulting services for governmental
agencies including special internal control reviews, cost allocation plans, cable
television rate reviews, reviews of City Treasurer operations and transient
occupancy tax reviews of city hotels/motels.
Continuing
Professional
Education For the period of January 1, 2008 through December 31, 2010:
Total Hours: 190.00 Total Government Hours: 141.00
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DAPHNIE MUNOZ, CPA
Position
Senior Audit Manager
City of Indian Wells
of Governments
Education
De La Salle University, Philippines
City of Oceanside
Bachelor of Science in Accounting, 1995
Licensing
Certified Public Accountant in California since 2001
Professional
Oreanizations
American Institute of Certified Public Accountants
California Society of Certified Public Accountants
Ranee of Experience
Mrs. Munoz has been with Diehl, Evans & Company, LLP since 1998, and has
performed all phases of local governmental audits including Special Districts,
Cities, Redevelopment Agencies, Single Audit of Federal Grants, Compliance
Audits and Agreed -Upon procedure engagements. As an audit manager, she is
involved with planning the audit, supervising staff accountants, assisting clients
with any complex or unusual issues and preparation of financial statements.
Mrs. Munoz served as the Audit Manager on the following local government
audits in 2010:
City of Alhambra Downey Cemetery District
City of Buena Park EI Toro Water District
City of Downey Laguna Beach County Water District
City of Irvine Las Virgenes Municipal Water District
City of Los Alamitos Municipal Water District of
City of Palm Desert Orange County
City of San Juan Capistrano Orange County Water District
Yorba Linda Water District
Mrs. Munoz has also been involved with the following governmental clients:
City of Diamond Bar
Coachella Valley Association
City of Indian Wells
of Governments
City of Mission Viejo
Cucamonga Valley Water District
City of Oceanside
Rancho California Water District
City of Thousand Oaks
Trabuco Canyon Water District
City of Tustin
Prior Experience Prior to working for Diehl, Evans & Company, LLP, she worked for Union
Incorporated in Irvine, CA for two years as a staff accountant. Her routine duties
as staff accountant included verifying daily cash receipts, sales reports and
processing weekly payroll. Other duties included preparing month-end journal
entries, assisting in the annual closing process and account reconciliation
reports.
Continuing
Professional
Education For the period of January 1, 2008 through December 31, 2010:
Total Hours: 191.00 Total Government Hours 137.00
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it SARAH H. RO, CPA
Education University of California, Los Angeles
Bachelor of Science in Economics, 1996
Licensing
Range of
Experience
Continuing
Professional
Education
Certified Public Accountant in California since 2004
Joined Diehl, Evans & Company, LLP in July 2003, concentrating on audits and
the preparation of financial reports for governmental agencies. Other
experience includes audits of nonprofit organizations and 401(k) Plans. Prior to
coming to Diehl, Evans & Company, LLP, Ms. Ro provided business process
outsourcing services to private corporations at Arthur Andersen, LLP, located in
Irvine, California. Prior audit engagements with Diehl, Evans & Company, LLP
include:
Cities:
City of Alhambra
City of Chino
City of Commerce
City of Huntington Beach
City of Indian Wells
City of Los Alamitos
City of Oceanside
City of Thousand Oaks
City of Westminster
Special Districts:
Beach Cities Health District
Coachella Valley Association
of Governments
Costa Mesa Sanitary District
Cucamonga Valley Water District
El Toro Water District
Las Virgenes Municipal Water District
Puente Basin Water Agency
Rowland Water District
Walnut Valley Water District
For the period of January 1, 2008 through December 31, 2010:
Total Hours: 238.00 Total Government Hours 144.00
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CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
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SCOPE OF WORK, TIMING AND AUDIT APPROACH
City of Tustin
Tustin Redevelopment Agency
REPORTS TO BE ISSUED
AND DUE DATES
Draft
Final
Due Dates
Due Dates
City of Tustin:
Comprehensive Annual Financial Report
November 8
November 22
Management Letter (SAS No.115)
November 8
November 22
Communication under SAS No. 114
N/A
November 22
Preparation of State Controller's Report
N/A
As required
by the State
Controller's
Office
Tustin Redevelopment Agency:
Annual Report, Including Report on Compliance November 8 November 22
Preparation of State Controller's Report N/A As required
by the State
Controller's
Office
Single Audit Reports: November 8 November 22
• independent Auditors' Report on Internal Control
Over Financial Reporting and on Compliance and
other Matters Based on Audit of Financial
Statements Performed in Accordance With
Government Auditing Standards
• Independent Auditors' Report on Compliance
with Requirements That Could Have a Direct and
Material Effect on Each Major Program and
internal Control Over Compliance in Accordance
with OMB Circular A-133 and on the Schedule of
Expenditures of Federal Awards.
Report on Compliance with Article XIIIB Appropriation
Limit (GANN) November 8 November 22
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AUDIT TIMING
Assuming that the City's books are closed and ready for examination and that all necessary schedules
and documents are available for our use by the end of August each year, the suggested time schedule
for the various phases of the audit would be approximately as follows:
• Entrance conference with key City staff. Discussion of any
prior audit concerns and the performance of interim work.
• Interim audit fieldwork and management review
• Progress conference, if necessary, with Audit Commission
and the Finance Director
• Detailed audit plan and list of all schedules to be prepared by
the City of Tustin
• Conference with Finance Director to commence year-end
audit work
• Final audit fieldwork and management review
• Exit conference with Finance Director to summarize the
results of the fieldwork and to review significant findings
• Deliver draft copies of reports
• Deliver Final Reports
Completed By
Week of May 16
May/June
Mid June
June 30
September 6
Mid October
Mid October
See page 15
See page 15
If all books and records, schedules and documents are made available to us by the end of August, we
make a commitment to have audit team members available and to provide all reports by the due
dates specified above.
We will audit the financial statements of the City and the component units noted on the preceding
page. The financial statements of all entities where the City exercises oversight will be combined with
the City's financial statements, in accordance with GASB Statement 14. Our audit will be in
accordance with auditing standards generally accepted in the United States of America as set forth by
the AICPA, and will include such auditing procedures as we consider necessary under the
circumstances. We will apply certain limited procedures, which consist principally of inquiries of
management regarding methods of measurement and presentation of required supplementary
information. However, we do not audit such information and do not express an opinion on it. Any
supplemental financial statements will be subjected to auditing procedures as we consider necessary
in relation to the financial statements taken as a whole. The scope of our audit will not include any
statistical information, and we will not express an opinion concerning it.
Our audits will conform with the guidelines set forth in the AICPA's Industry Audit Guide, Audits of
State and Local Governmental Units. Also, each examination will comply with the standards for
financial and compliance audits contained in the Government Auditing Standards (2007 Edition),
issued by the U.S. General Accounting Office, the provisions of the Single Audit Act and the provisions
of the U.S. Office of Management and Budget (OMB) Circular A-133.
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CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
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Our audit of the Redevelopment Agency will include an audit on compliance in accordance with
Health and Safety Code Section 33080.1 and Sections I through V of the "Guidelines for Compliance
Audits of California Redevelopment Agencies" issued by the State Controller's Office.
Also, we will perform a limited procedures review of the City's Gann Spending Limitation Computation
as required by Section 1.5 of Article XIIIB of the California Constitution. Our review will be performed
in conformance with the provision of the "League of California Cities Uniform Guidelines".
• Our audit approach is tailored to meet the technical requirements while maintaining professional
skepticism without forgetting that we provide a service. The following aspects of our audit
approach will add additional value to the audit services.
• On a first year engagement, we will assign experienced staff auditors including the in charge field
auditor having least 5 years of experience. You will not spend time training our auditors.
• Whenever possible, we will use same format for audit supporting schedules used in prior years for
the current year audit. This will reduce time spent by the City staff in dealing with the audit when
a different audit firm is chosen.
• Throughout the year we are available as a resource to our clients in researching technical
questions, dealing with new pronouncements, reviewing complex financial entries and helping
with any other issues as they arise.
• The work papers will be reviewed by the manager or partner as field work is being completed to
minimize additional questions after the fieldwork is completed.
Our firm uses a governmental audit program which will be modified to the City of Tustin's operations
to accommodate specific client circumstances. Our audit programs are organized by the financial
statement approach and general procedures. The requirements of Statement of Auditing
Standards 104 thru 111 (Risk Assessment Standards) are utilized to modify the audit programs to
focus on the higher risk areas of the financial statements
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AUL)IT APPROACH (CONTINUEDa
_ --------1._._Audit Planning Procedures and Interim Fieldwork:
Gather information about the City and its environment, including internal control:
• Preaudit conference with the City to establish process of communication between the
audit team and City staff.
• Establish scope of working and timing of fieldwork.
• Evaluate the design of internal controls that are relevant to the audit and determine
whether the control, either individually or in combination is capable of effecting,
preventing or detecting and correcting material misstatements.
• Determine that the controls have been implemented, that is, that the controls exist and
that the City is using it.
• Specific areas to review include:
- Accounts payable/cash disbursements
Accounts receivable/cash receipts
Payroll disbursements
- Utility billing process
- Investment compliance
Property and equipment
• Review of minutes of the City of Tustin.
• Review of important contracts and debt agreements.
2. Final Audit Work:
During the final audit work, we will assess "risk" of material misstatement based on understanding
of the City's audit environment, including its internal control, to identify account balances to audit
' that appear in the City's financial statements. Our work may include:
• Confirmation of cash and investments balances and testing of bank reconciliations.
t • Confirm significant receivable balances or review subsequent cash receipts to verify
receivable balance.
• Search for unrecorded liabilities.
• Testing of interfund balances and transfers.
• Test capital asset additions and depreciation expense.
• Confirm long-term debt balances and review the accounting treatment of debt issued or
refunded.
• Test support for other significant assets or liabilities.
• Analytical procedures on balance sheet and revenue and expenditure accounts, to evaluate
and explain unusual fluctuations from prior year balances or current year budgeted
amounts.
• Review of attorney letters for significant legal matters affecting the City's financial position.
The audit workpapers will be reviewed by our management team as the work is being performed
in the field so that at the conclusion of the fieldwork we are able to report any adjustments or
findings. An exit conference will be held to review any significant adjustments or findings.
mom
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CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
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Our_.audlt_will include obtaining an understanding of the entity and its environment, including internal
control, sufficient to assess the risks of material misstatement of the financial statements and to
design the nature, timing, and extent of further audit procedures. Our understanding of the internal
controls will be completed by completing narratives and checklists for various processes related to
internal control. Tests of controls may be performed to test the effectiveness of certain controls that
we consider relevant to preventing and detecting errors and fraud that are material to the financial
statements and to preventing and detecting misstatements resulting from illegal acts and other
noncompliance matters that have a direct and material effect on the financial statements. Our tests,
if performed, will be less in scope than would be necessary to render an opinion on internal control
and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to
Government AuditingStandards.
As required by OMB Circular A-133, we will perform tests of controls over compliance to evaluate the
effectiveness of the design and operation of controls that we consider relevant to preventing or
detecting material noncompliance with compliance requirements applicable to each major federal
award program. However, our tests will be less in scope than would be necessary to render an
opinion on those controls and, accordingly, no opinion will be expressed in our report on internal
control issued pursuant to OMB Circular A-133.
An audit is not designed to provide assurance on internal control or to identify significant
deficiencies. However, during the audit, we will communicate to management and those charged
with governance internal control related matters that are required to be communicated under AICPA
professional standards, Government Auditing Standards, and OMB Circular A-133.
The single audit will be performed in accordance with all the requirements of the Single Audit Act
Amendments of 1996, OMB Circular A-133, Government Auditing Standards issued by the GOA (the
"Yellow Book") and AICPA Statement on Auditing Standards No. 117, "Compliance Audits".
Our audit will include tests of transactions related to major federal award programs for compliance
with applicable laws and regulations and the provisions of contracts and grant agreements. Because
an audit is designed to provide reasonable, but not absolute assurance and because we will not
perform a detailed examination of all transactions, there is a risk that material misstatements or
noncompliance may exist and not be detected by use. In addition, an audit is not designed to detect
immaterial misstatements or violations of laws or governmental regulations that do not have a direct
and material effect on the financial statements or major programs. However, we will inform you of
any material errors and any fraudulent financial reporting or misappropriation of assets that comes to
our attention. We will also inform you of any violations of laws or governmental regulations that come
to our attention, unless clearly inconsequential. We will include such matters in the reports required
fora Single Audit.
We will perform tests of controls to evaluate the effectiveness of the design and operation of controls
that we consider relevant to preventing or detecting material noncompliance with compliance
requirements applicable to each major federal award program. However, our tests will be less in
scope than would be necessary to render an opinion on those controls and, accordingly, no opinion
will be expressed in our report on internal control issued pursuant to OMB Circular A-133.
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CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
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complied with applicable laws and regulations and the provisions of contracts and grant agreements
applicable to major programs. Our procedures will consist of the applicable procedures described in
the OMB Circular A-133 "Compliance Supplement" for the types of compliance requirements that
could have a direct and material effect on each of the City's major programs and any specific
requirements of ARRA funds. The purpose of those procedures will be to express an opinion on the
City's compliance with requirements applicable to major programs in our report on compliance issued
pursuant to OMB Circular A-133.
When we begin the single audit, we will identify the Major and Nonmajor Federal Financial Assistance
Programs of the City. Each Major and Nonmajor program will be identified as either a low risk or high
risk program. Programs to be tested will be selected based on our assessment of risk for each
program.
We will identify the types of activities that are either specifically allowed or prohibited by the laws,
regulations, and contract or grant agreements pertaining to the programs and document an
understanding of the Internal controls the City has to provide reasonable assurance that federal
awards are expensed only for allowable activities or costs.
We will select a sufficient number of transactions to support a low level of assessed control risk. If no
exceptions in the function of key controls are noted, we will conclude that a low level of control risk
was achieved. if weaknesses in the internal controls are noted, we will modify our audit program as
needed.
As part of our single audit, we will request that the City assist in completing the Data Collection Form.
The form will assist us in identifying the federal programs which will be required to be tested.
Under provisions of AICPA Statement on Auditing Procedures No. 117, management of the City is
responsible for identifying to its outside auditors any laws and regulations which would have a
significant effect on the audit. This would include federal laws (such as federal grant regulations),
State laws (such as permitted investments under the California Government Code) and local laws
(such as restrictions on special revenues levied by the City). After our selection as auditors, we will
consult with City officials regarding these matters, to determine what laws and regulations need to be
evaluated in connection with our audit. If a City is not able to identify specific laws and regulations
that effect it, we have references (California Government Code and Health and Safety Code) to the
more common laws, rules and regulations In our standard audit programs for the usual activities of a
California City or Redevelopment Agency which will assist us in identifying laws and regulations to
review in the audit.
Our approach is to utilize random sampling based in our testing.of the internal control systems related
to cash receipts, cash disbursements, payroll and utility billings. Based on a statistical conclusion used
by the firm our sample sizes can range from 25 to 60 transactions for each system. A random sample
selection allows each item in the population of an equal chance of being selected. In addition, for
disbursements, we may select a stratified sample of all transactions over a specified dollar amount for
review.
DIEHL, EVANS & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
-20-
Analytical procedures are used in the planning and final stages of the audit. in the planning phase, we
use analytical procedures to identify unusual financial transactions and comparing relationships to
expected results. We compare current year information to the prior years for balance sheet items,
revenues and expenditures. In addition, revenues and expenditures are compared to budgets to
identify unexpected results. In the final stages of the audit, the financial statements are reviewed to
identify expected relationships such as comparing debt paid to expenditures recorded on
governmental funds, transfers between funds, depreciation expense, etc. For all significant
relationships identified, explanations are obtained as to why the situation occurred and additional
audit procedures are applied to resolve any concerns.
In connection with each audit, a complete review of internal controls will be made of all significant
accounting procedures. Our firm uses an internal control questionnaire, computer systems
questionnaire and narration to gain an understanding of the internal control process as part of our
audit. We will identify weaknesses and after discussion with the appropriate City staff, we will submit
a management letter which will identify weaknesses observed during these reviews and throughout
the audit. The management letter will also assess the effect of the management letter comments on
the financial reporting process and recommend steps towards eliminating the weaknesses.
'e ► .] W.1110 2 :1111-WiTUR
We do not anticipate any significant potential audit problems. If any potential audit problems are
Identified, we will immediately discuss them with the City's management. Our approach is to
coordinate the resolution of any problems with the City's management. We expect that with our
experience with auditing governmental entities and resources, we expect minimal disruption to the
City's management in resolving any identified audit problems.
' ► i ► � � / : 1 ! ilk ' .�. ' :_ i '_ i__
in accordance with provisions of OMB Circular A-133, GAO requirements, and the California Board of
Accountancy, our audit workpapers will be maintained for at least seven years after the date of the
report. These workpapers will be made available as necessary to your cognizant audit agency (or its
designee), to GAO representatives, or to any other federal or state agency needing access to the
workpapers. Also, our firm will respond to any reasonable inquiries of successor auditors and we will
allow any successor auditors to review our workpapers.
We will be available for any other professional assistance you require to research and answer
accounting and reporting problems raised by the City, regardless of the time of year. Such assistance
may include, but is not limited to, tax questions, the review of bond documents, cost allocation
programs and employee benefit programs. We have provided several tax opinions to City audit clients
for matters relating to deferred compensation, fringe benefits, stipends and allowances, and other
issues. We also will keep the City informed of new developments affecting municipal finance and
reporting, changes in grant rules and regulations, etc.
DIEHL, EVANS & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS .¢ CONSULTANTS
-21-
SEGMENTATION OF THE AUDIT
HOURS,
BY PARTNER
AND STAFF
LEVEL
Supervisory
Partner Managers
Staff
Staff
Clerical
Total
City of Tustin - Audit,
including SAS No. 114
and SAS No. 115 letters 20
36
86
96
12
250
Tustin Redevelopment
Agency - Audit 4
8
20
35
3
70
Single Audit 4
8
15
40
3
70
Appropriations limit
■ Review (GANN) 1
-
-
2
1
4
`I
State Controller's Reports:
City 2
3
-
24
1
30
Redevelopment Agency 1
3
-
15
1
20
TOTAL HOURS 32
58
121
212
21
444
DIEHL, EVANS & COMPANY, LLP
CEMMED PUBLIC ACCOUNTANTS & CONSULTANTS
-22-
DISCUSSION OF RELEVANT ACCOUNTING ISSUES
GASB Statement No. 54 on Fund Balance Reporting and Governmental Fund Type Definitions is effective for
periods ending after June 15, 2010. The Statement enhances the usefulness of fund balance information by
providing clearer fund balance classifications that can be more consistently applied and by clarifying the
existing governmental fund type definitions. This Statement establishes fund balance classifications that
comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints
imposed upon the use of the resources reported in governmental funds.
The definitions of the general fund type, special revenue fund type, debt service fund type, capital projects
fund type and permanent fund type are clarified by the provisions in this Statement.
GASB Statement No. 57 on OPER Measurements by Agent Employers and Agent Multiple -Employer Plans is
effective for periods beginning after lune 15, 2011. The Statement addresses Issues related to the use of the
alternative measurement method and the frequency and timing of measurements by employers that
participate in agent multiple -employer other postemployment benefit (OPEB) plans (that is, agent employers).
in addition, this Statement clarifies that when actuarially determined OPEB measures are reported by an agent
multiple -employer OPEB plan and its participating employers, those measures should be determined as of a
common date and at a minimum frequency to satisfy the agent multiple -employer OPEB plan's financial
reporting requirements.
Lty.1.1 Ai; U i ►1
GASB Statement No. 59 on Financial Instruments Omnibus is effective for period beginning after June 15, 2010,
The Statement provides updates and improvements to existing standards regarding financial reporting and
disclosure requirements of certain financial instruments and external investment pools for which significant
Issues have been identified in practice.
GASB Statement No. 60 on Accounting and Financial Reporting for Service Concession Arrangements is
effective for financial statements for periods beginning after December 15, 2011. The Statement's objective is
to improve financial reporting by addressing issues related to service concession arrangements (SCAB), which
are a type of public-private or private -public partnership. The Statement establishes recognition,
measurement, and disclosure requirements for SCAs for both the transferor and governmental operators,
requiring governments to account for and report SCRs in the same manner, which will improve the
comparability of financial statements.
GASB Statement No. 61, The Financial Reportin-qEntity: Omnibus - an amendment of GASB Statements No. 14
and 34, is effective for financial statements for periods beginning after June 15, 2012. The Statement modifies
certain requirements for inclusion of component units in the financial reporting entity. The requirements of
the statement will result in financial reporting entity financial statements being more relevant by Improving
guidance for including, presenting, and disclosing information about component units and equity transactions
of a financial reporting entity.
GASB Statement No. 62,
December 15, 2011. The requirements of this statement will improve financial reporting by contributing to
GASB's efforts to codify all sources of generally accepted accounting principles for state and local governments
so that they derive from a single source.
00
ILA- I DIEHL, EVANS & COMPANY, LLP
CMFiM PUBLIC ACCOUNTANTS & CONSULTANTS
-23-
I WORK REQUIRED BY CITY STAFF
Our fixed annual fees contemplate that conditions satisfactory to the normal progress and completion
of the examination will be encountered and that City accounting personnel will furnish the
agreed-upon assistance in connection with the audit. However, if unusual circumstances are
encountered which make it necessary for us to do additional work; we shall report such conditions to
the responsible City officials and provide the City with an estimate of the additional accounting fees
involved.
Noted below is a listing of work required by City staff to assist in the audit.
1. Technical assistance in familiarizing our staff with:
• The flow of information through the various departments and accounting systems.
• Reports generated by your accounting system.
• The system of internal controls.
• Controls established to monitor compliance with federal grants.
2. Preparation of trial balances for all funds, after posting of all year end journal entries.
3. Preparation of schedules supporting all major balance sheet accounts, and selected revenue and
expenditure accounts.
4. Typing of all confirmation requests.
5. Pulling and refiling of all supporting documents required for audit verification.
6. Assistance with the preparation of the CAFR and footnotes, including:
a. Determination of major funds.
b. Determination of general and program revenues and allocation of program revenues to:
1. charges for services,
2. operating grants and contributions, and
3. capital grants and contributions.
c. Determining components of net assets into capital assets net of related debt, restricted and
unrestricted assets.
d. Assistance in determining the amounts to be reported (1) in the Reconciliation of the
Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to
the Statement of Activities and (2) the Reconciliation of the Balance Sheet of Governmental
Funds to the Statement of Net Assets.
e. Consolidation of intemal service fund activity into governmental activities or business -type
activities In the government -wide financial statements.
f. Preparation of the management`s discussion and analysis, transmittal letter and all statistical
tables for the CAFR.
DIEHL, EVANS & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
-24-
CONSULTING SERVICES DEPARTMENT
OVERVIEW OF SERVICES PROVIDED
Diehl, Evans & Company, LLP offers a wide range of consulting services to governmental agencies. This
section of our proposal summarizes the primary types of services provided by the firm.
The firm's Director of Consulting Services is Mr. William S. Morgan, CPA. Mr. Morgan has over thirty
years of experience in providing accounting, auditing and consulting services to California cities,
counties, redevelopment agencies, water districts, special districts, joint power authorities and
nonprofit corporations. Many of the firm's consulting projects are planned, supervised and reviewed
by Mr. Morgan.
Our firm provides the following types of services:
• Governmental Tax Consulting
• Performance and Operational Studies
• Redevelopment Consulting Services
' • Reviews of City Treasurer Operations
• Cable Television and Broadband Consulting Services
• Reviews of Solid Waste Haulers and
Assistance With Trash Rate Negotiations
Litigation Support and Dispute Resolution Services
• Fraud Investigations
• Hotel/Motel Transient Occupancy Tax Reviews
• Business License Operation Reviews
With regard to these engagements, we would intend to perform limited procedures reviews in
connection with each assignment, in accordance with the AICPA's attestation standards. Under the
provisions of the attestation standards, the City would designate what specific procedures it wishes to
have performed. We would then perform those procedures and report on our findings. This type of
engagement would not constitute a certified audit in accordance with auditing standards generally
accepted in the United States of America. Such special services are not part of our standard fee
arrangements and would be subject to a separate fee quotation.
DIEHL, EVANS & COMPANY, LLP
CERTIFIED PUBUC ACCOUNTANTS & CONSULTANTS
-25-
ATTACHMENT I
CITY CLIENT REFERENCES
AND
LIST OF SIMILAR ENGAGEMENTS
one means of judging the high quality of our auditing and accounting services would be contact with
some of our existing clients. We
are including the names and phone numbers of our city clients over
the past year. VVeencourage you
tocontact any ofthese individuals.
City of Alhambra
City of Huntington Beach
City of Palm Desert
Mr. Dean Johnson
Mr. Dahl 8u|psan
Mr. Paul Gibson
Assistant Finance Director
Senior Analyst
Director nfFinance
(626) 570-5017
(714) 536-5907
(760) 346-0611
City of Avalon
City of Irvine
City of Rancho Palos Verdes
Ms. Betty ]oGarcia
Ms. Donna Mullally
Ms. Kathryn Downs
Finance Director
Manager ofFiscal Services
Deputy Director ofFinance
(310) 510-0220
(949) 724-6037
and Information Technology
(31O)544-5216
City of Buena Park
City of La Habra Heights
City of San Fernando
Mr. Sung Hyun
Ms. Marice|aMedina
Mr. A|Hernandez
Director ofFinance
Finance Director
Finance Director
(714)562-3713
/562\694-63O2
(818)898-73O7
Cily of Downe
City of Lake Elsinore
City of San Juan Capistrano
Mr. John K4ich|coff
Mr. James Riley
Ms. Cindy Russell
Finance Director
Director of
Director of
(562) 904-7262
Administrative Services
Administrative Services
(9S1)674'3124
(949)443-63O1
City of Fullerton
City of Lakewood
City of Sikrnal Hill
Ms. Dianna L Honeywell
Ms. Diane Perkin
Ms. Maida Alcantara
Fiscal Services Manager
Director ofFinance
Director ofFinance
(724)738-6523
(562) 866-9771
(562) 989-7319
City of Hesperia
City of Los Alamitos
City of Westminster
k8r.Brian Johnson
Ms. Anita 4grannonte
Ms. She rryJohnson
Director ofAdministrative
Finance Manager
Accounting Manager
Services
(562) 431-3538
(714)89Q'3311
(760) 947-1442
LIST OF SIMILAR CITY ENGAGEMENTS
We have listed below the cities which were under contract with us during the past five fiscal years.
Legend:
AQMD - Air Quality Management District Audit
CA - City Audit
OCU - Other Component Unit Audits
PFA - Public Financing Authority
PI -Public Improvement
PP - Pension Plans
RA - Recreation Authority
RDA - Redevelopment Agency Audit
SA - Single Audit
SCR - State Controllers' Reports
SR - Street Report
T - Transportation
Sustantially all of the above engagements were performed through the firm's Irvine office.
Period of Service
City
From
To
Contact Name
Phone Number
Scope of Work
Alhambra
2005
Present
Mr. Dean Johnon
626-570-5017
CA, RDA, SA
Avalon
2006
Present
Ms. Betty to Garcia
310-510-0220
CA, RDA, OCU
Buena Park
2004
Present
Mr. Sung Hyun
714-562-3713
CA, RDA, SA, SCR, OCU
Cerritos
1969
2008
Ms. Denise Manoogian
562-860-0311
CA, RDA, SA
Chino
1995
2009
Mr. Rob Burns
909-627-7577
CA, RDA, SA
Commerce
1999
2005
Mr. Vilko Domic
323-722-4805
CA, RDA, SA, OCU
Coronado
1970
2007
Mr. Jack Van Sambeck
619-522-7300
CA, RDA, SA, PFA, PI
Del Mar
1994
2005
Ms. Suzanne Wellcome
858-755-9354
CA, PFA
Diamond Bar
2005
2009
Ms. Susan Full
909-839-7051
CA, SA
Downey
1987
Present
Mr. John Michicoff
562-9047262
CA, RDA, AQMD, PFA, SA, OCU
Encinitas
2006
2008
Ms. Jennifer Smith
760-633-2600
CA, SA, Golf Authority
Fullerton
2004
Present
Ms. Dianna 1. Honeywell
714-738-6523
CA, RDA, AQMD, SA, SCR, Cost Allocations
Healdsburg
2003
2009
Ms. Heather Ippoliti
707-431-3311
CA, PI, RDA, T, SA, SCR
Hesperia
1997
Present
Mr. Brian Johnson
760.947-1442
CA, RDA, SA
Huntington Beach
2007
Present
Mr. Dahl Bulosan
714-536-5907
CA, RDA, AQMD, SA
Indian Wells
2003
2007
Mr. Kevin McCarty
760-346-2489
CA, RDA, SA
Irvine
2000
Present
Ms. Donna Mullally
949-724-6000
CA, RDA, AQMD, PP, SA, OCU
La Habra Heights
2008
Present
Ms. Maricela Medina
562-694-6302
CA, SA
Lake Elsinore
2005
Present
Mr. James Riley
951-674-3124
CA, RDA, PFA, RA, SA
Lakewood
1974
Present
Ms. Diane Perkin
562-866-9771
CA, RDA, SA
Los Alamitos
2008
Present
Ms. Anita Agramonte
562-431-3538
CA, SA (when required)
Mission Viejo
2005
2008
Mr. Bob Barry
949-470.3004
CA, RDA, SA, SCR, SR, OCU
Montebello
2002
2009
Mr. Chickwan Michael Tarn
323-887-1419
CA, RDA, T, SA, Hotel
Norwalk
2001
2007
Ms. lana Stuard
562-929-5748
CA, RDA, SA PFA, T, Consortium
Oceanside
2007
2009
Ms, Teri Ferro
760-435-3855
CA, RDA, OCU
Palm Desert
2008
Present
Mr. Paul Gibson
760-346-0611
CA, RDA, SA
Pico Rivera
2004
2008
Mr. John Herrera
562-801-4395
CA, RDA, SA
Rancho Palos Verdes
2008
Present
Ms. Kathryn Downs
310-5445216
CA, RDA, PI, SCR, SR
San Fernando
2007
Present
Mr. Al Hernandez
818-898-7307
CA, RDA, SA
San Juan Capistrano
2005
Present
Ms. Cindy Russell
949-443-6301
CA, RDA, Community Housing Corp.
Santa Ciarita
2002
2008
Mr. Darren Hernandez
661-255-4920
CA, RDA, SA, AQMD, PFA, T
Signal Hill
1962
Present
Ms. Maida Alcantara
562-989-7319
CA, RDA, SA (when required)
Temecula
2002
2007
Ms. Genle Roberts
951.694-6430
CA, RDA, SA
Thousand Oaks
2003
2007
Ms. Catherine Haywood
805449-2232
CA, RDA, SA, T, Child Care Grant
Westminster
1997
Present
Ms. Sherry Johnson
714-898-3311
CA, RDA, AQMD, SA
Legend:
AQMD - Air Quality Management District Audit
CA - City Audit
OCU - Other Component Unit Audits
PFA - Public Financing Authority
PI -Public Improvement
PP - Pension Plans
RA - Recreation Authority
RDA - Redevelopment Agency Audit
SA - Single Audit
SCR - State Controllers' Reports
SR - Street Report
T - Transportation
Sustantially all of the above engagements were performed through the firm's Irvine office.
CLIST OF SPECIAL
DISTRICT
ENGAGEMENTS
_..
_...
We -have Hsted-below-the special-districts-whic-h were under-contfact wI#v-us-dufkg the past five fiscal yeafs.
Period of Service
Client Name
From
To
Contact Name
Phone Number
Borrego Water District
2006
Present
Ms. Kim Pittman
760-726-5856
Coachella Valley Association of Governments
2001
2009
Mr. Gary Leong
760-346-1127
Coachella Valley Conservation Commission
2009.
2009
Mr. Gary Leong
760-346-1127
Costa Mesa Sanitary District
2005
Present
Ms. Sherry Kallab
714-293-8928
Cucamonga Valley Water District
1991
2006
Ms. Carrie Corder
909-987-2591
Downey Cemetery District
1987
Present
Ms. Beverly Lauzen
562-9047102
EI Toro Water District
2008
Present
Mr. Michael Grandy
949-837-7050
Jurupa Community Services District
2002
2008
951-727-3515
La Habra Heights County Water District
2002
Present
Ms. Tammy Wagstaff
562-697-6769
La Puente Valley County Water District
1986
Present
Mr. Greg Galindo
626-330-2126
Laguna Beach County Water District
2002
Present
Mr. Robert Westphal
949-494-1041
Lake Elsinore Assessment District
2006
2008
Mr. lames Riley
951-674-3124
Lake Elsinore Community Facilities Districts
2006
2008
Mr. James Riley
951-674-3124
Las Virgenes Municipal Water District
2007
Present
Ms. Sandra Schmidt Hicks
818-251-2100
Leucadia County Water District
2010
Present
Mr. Paul Bushee
760-753-0155
Municipal Water District of Orange County
2007
Present
Mr. Phil Letron
714-378-3200
Olivenhain Municipal Water District
2009
Present
Ms. Rainy Selamat
760-632-4218
Orange County Fire Authority
2004
2007
Mr. Jim Ruane
714-573-6642
Orange County Vector Control
1986
2006
Ms. Dana Ohaneslan
714-971-2421
Orange County Water District
2006
Present
Mr. Randy Fick
714378-3200
Otay Water District
2009
Present
Mr. Jim Cudlip
760-670-0250
Padre Dam Municipal Water District
2009
Present
Ms. Karen Jassoy
619-258-4616
Pico Rivera Water Authority
2004
2008
Mr. John Herrera
562-801-4395
Pomona -Walnut -Rowland Joint Water Line Commission
2002
Present
Mr. Sean Henry
562-697-1726
Puente Basin Water Agency
2005
Present
Mr. Brian Teuber
909-595-1268
Rancho California Water District (RCWD)
2002
2007
Mr. Jeff Armstrong
951-296-6900
RCWD - Assessment District
2002
2007
Mr. Jeff Armstrong
951-296-6900
RCWD - Community Facilities Districts
2002
2007
Mr. Jeff Armstrong
951-296-6900
Rowland Water District
2007
Present
Mr. Sean Henry
562-697-1726
Santa Fe Irrigation District
2002
2006
Mr. Michael Bardin
858-756-2424
Sunset Beach Sanitary District
1986
Present
Ms. Chris Montana
562-493-9932
Surfside Colony Stormwater Drainage District
2010
Present
Ms. Chris Montana
562-493-9932
Surfside Community Services District
2010
Present
Ms. Chris Montana
562-493-9932
Valencia Heights Water Company
2010
Present
Mr. David Michalko
626-332-8935
Vallecitos Water District
2010
Present
Mr. Tom Scaglione
760-744-0460
Valley Wide Recreation and Park District
1986
Present
Mr. Jeff Leatherman
951-654-1505
Victor Valley Wastewater Reclamation Authority
2007
2009
Mr. Logan Olds
760-948-9849
Walnut Valley Water District
2002
Present
Mr. Brian Teuber
909-595-1268
Yorba Linda Water District
2008
Present
Mr. Stephen Parker
714-701-3040
Sustantially all of the above engagements were performed through the firm's Irvine office.
ATTACHMENT II
RESULTS OF OUTSIDE QUALITY REVIEW
HEIDENREICH A HEIDENREICH, CPAs, PLLC
10201 S. 51" Street #170
Phoenix, AZ 85044
(480)704-6301 fax 785.4618
System Review Report
January 28, 2009
To the Owners of
Diehl, Evans & Company, LLP
and the Pear Review Committee of the CA Society of CPAs
We have reviewed the system of quality control for the accounting and auditing practice of Diehl,
Evans & Company, LLP (the firm) in effect for the year ended September 30, 2008. 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. The firm is responsible for designing a system of quality control and complying with
it to provide the firm with reasonable assurance of performing and reporting in conformity with
applicable professional standards in all material respects. Our responsibility is to express an
opinion on the design of the system of quality control and the firm's compliance therewith based
on our review. The nature, objectives, scope, limitations of, and the procedures performed in a
System Review are described in the standards at www.aicpa.org/prsummary.
As required by the standards, engagements selected for review included engagements performed
under the Government Auditing Standards and audits of employee benefit plans.
In our opinion, the system of quality control for the accounting and auditing practice of Diehl,
Evans & Company, LLP In effect for the year ended September 30, 2008, has been suitably
designed and complied with to provide the firm with reasonable assurance of performing and
reporting In conformity with applicable professional standards in all material respects. Firms can
receive a rating of pass, pass with deficiencyfies) or fail. Diehl, Evans & Company, LLP has
received a peer review rating of pass.
.J1,.zi�tsaic:fa�' �►tatdeetu�ctt.
Heidenreich & Heidenreich, CPAs, PLLC
ATTACHMENT IV
SAMPLE REPORTS
SAMPLE REPORTS
TABLE OF CONTENTS
Independent Auditors' Report - City
Independent Auditors' Report - Redevelopment Agency
Independent Auditors' 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 AuditingStandards- Redevelopment Agency
Independent Auditors' 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 - Single Audit
Independent Auditors' Report on Compliance with Requirements
That Could Have a Direct and Material Effect on Each Major
Program and on Internal Control Over Compliance In Accordance
With OMB Circular A-133 and on the Schedule of Expenditures of
Federal Awards - Single Audit
Independent Accountants' Report on Agreed -Upon Procedures
Applied to Appropriations Limit Worksheet No. 6
Management Letter
(date audit completed)
INDEPENDENT AUDITORS' REPORT - City
City Council Members
City of Tustin
Tustin, California
iWe have audited the accompanying financial statements of the governmental activities, the
business -type activities, each major fund, and the aggregate remaining fund information of the City of
Tustin, California, as of and for the year ended June 30, 2011, which collectively comprise the City's
basic financial statements as listed in the table of contents. These financial statements are the
responsibility of the City of Tustin's management. Our responsibility is to express opinions on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the City's internal control over
financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test
j basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in.all material respects, the
respective financial position of the governmental activities, the business -type activities, each major
fund, and the aggregate remaining fund information of the City of Tustin, California, as of June 30,
2011, and the respective changes in financial position and cash flows, where applicable, thereof and
the respective budgetary comparison statement for the General Fund, for the year then ended In
conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated (date audit
completed) on our consideration of the City of Tustin' internal control over financial reporting and our
tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements
and other matters. The purpose of that report is to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing, and not to provide an
opinion on the internal control over financial reporting or on compliance. That report is an integral
part of an audit performed in accordance with Government Auditing Standards and should be
considered in assessing the results of our audit.