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Home My WebLink About18- RFP Submission - Annual Independent Financial Audit - Amatics CPA Group PROPOSAL FOR ANNUAL INDEPENDENT FINANCIAL AUDIT SERVICES For the years ending June 30, 2018 and 2019 Submitted by: Amatics CPA Group 220 West Lamme, Suite 3A Bozeman, MT 59715 Morgan Scarr, CPA Audit Shareholder mscarr@amaticscpa.com (406) 404-1925 March 14, 2018 CITY OF BOZEMAN, MONTANA Audit Proposal TABLE OF CONTENTS Page Letter of Transmittal ................................................................................................................................ 1 Firm Profile ............................................................................................................................................... 2 Engagement Personnel and Qualifications ................................................................................................ 3 References ................................................................................................................................................. 4 Scope – Audit Approach ........................................................................................................................... 5 Scope – Timeline and Communication ..................................................................................................... 6 Additional Data ......................................................................................................................................... 7 Compensation ............................................................................................................................................ 8 Fee Structure ............................................................................................................................................. 8 Resumes ............................................................................................................................................ 9 – 10 Peer Review Report ................................................................................................................................. 11 March 14, 2018 City of Bozeman, Montana Audit Committee 121 N Rouse Ave Bozeman, MT 59715 Thank you for the opportunity to submit this proposal for annual independent financial audit services for the City of Bozeman for the years ending June 30, 2018 and 2019. We are confident that our experience has prepared us to perform these services with the highest level of efficiency and provide you with a high-quality, valuable service. Our understanding of the work to be performed is as follows: o Independent annual financial audits for the years ending June 30, 2018 and 2019, for the City of Bozeman o Preparation of the Comprehensive Annual Financial Report (CAFR) o Audits completed in accordance with Generally Accepted Auditing Standards (GAAS), Government Auditing Standards issued by the Comptroller General of the U.S. 2011 revision (GAO standards), and AICPA Audit & Accounting Guide – Audits of State and Local Governmental Units (ASLGU) o Audits in accordance with Single Audit Act, if the City meets the federal grant revenue threshold to require a Single Audit o Auditors’ reports submitted to the City by the first Monday in December, with draft submitted at least two weeks prior to final report date o Presentation of final reports to the Audit Committee and City Commission o Performance of an in-depth review of the City’s internal control procedures for one area each year, as selected by the City We understand that we will work with City management to develop a time schedule and procedures. We are confident that we can complete this work within the specified time period. Our practice is built on performing quality work in a professional and effective manner. We are confident that you will be pleased with our dedication to you as a client and our commitment to service throughout the year. We would welcome the opportunity to discuss our proposal with you and to answer any questions. We look forward to the possibility of serving your Organization. I am authorized to make representations for Amatics CPA Group as a Shareholder of the firm. My email address and phone number are included below. Sincerely, Amatics CPA Group Morgan Scarr, CPA Shareholder mscarr@amaticscpa.com (406) 404-1925 P. O. Box 1207 Bozeman, MT 59771 220 West Lamme St Ste 3A Bozeman, MT 59715 P 406.404.1925 F 406.404.1926 AmaticsCPA.com CITY OF BOZEMAN Independent Audit Proposal Page 2 FIRM PROFILE Amatics CPA Group personnel have worked to build a reputation as a leader in the Montana accounting industry, based on our commitment to quality work and our drive to provide exceptional client service. We strive to understand your organization’s changing needs and to provide services to help your organization achieve its goals. We are a local CPA firm. The Amatics office is located in Bozeman and consists of 22 employees, including 13 CPAs (5 shareholders, 5 managers, 5 senior and staff accountants, and 4 paraprofessional staff). We offer a wide range of services including audits, reviews, compilations, agreed-upon procedures, consulting, tax planning and preparation, business valuations, bookkeeping, and payroll. We have extensive experience in working with governmental organizations, performing audits, reviews, compilations, and consulting. We have worked with governmental entities with a variety of revenue sources, internal control systems, levels of staffing, and governance structures. We are able to draw from our experience with these entities to provide you with valuable suggestions and services. In order to maintain the highest professional standards, we emphasize continuing professional education to keep all professionals up-to-date on accounting and auditing developments. Our audit and attestation staff attend multiple annual accounting and auditing updates each year. As a firm, we are committed to providing our personnel with the continuing professional education opportunities necessary for them to not only fulfill responsibilities assigned them during an engagement, but also to succeed within the firm. Our Amatics audit committee meets regularly to discuss upcoming standards and to proactively plan how to help prepare our clients to implement any necessary changes. Additionally, we encourage staff to become involved in local organizations through volunteering, nonprofit board participation, professional clubs and affiliations, and industry groups. This allows staff and our firm to gain broader exposure to other organizations’ operations and to leverage that experience to provide more valuable ideas and information to our clients. Amatics CPA Group is approved by the Montana Department of Administration and is listed on the Department’s roster of independent auditors authorized to conduct audits of Montana local government entities. We follow all professional standards and are qualified to perform these audit services. We are a member of the American Institute of Certified Public Accountants (AICPA) and adhere to all AICPA professional standards of audit practices and conduct. We are independent, as established by the AICPA, with respect to City of Bozeman. Amatics CPA Group is proud of our reputation for providing clients with high quality services. Our Amatics Audit Committee developed and maintains our system of quality control through continuous monitoring, in-house file review, and an annual review of our processes and procedures. In addition, we formally monitor this system of quality control through participation in the American Institute of Certified Public Accountants (AICPA) Peer Review Program, administered by the Montana Society of Certified Public Accountants. We received a peer review rating of pass on the quality control of our accounting and auditing practice at our most recent peer review, for the year ended May 31, 2016. A copy of this peer review report is enclosed at the end of this proposal. CITY OF BOZEMAN Independent Audit Proposal Page 3 ENGAGEMENT PERSONNEL AND QUALIFICATIONS Audit Team Morgan Scarr Audit Shareholder CPA Justin Gerber Audit Manager CPA Terry Alborn Technical Reviewer Audit Shareholder CPA Dan McInerney Staff Accountant CPA Tanner Gliko Staff Accountant CPA Candidate The review will be planned and managed by Morgan Scarr, a shareholder with more than 10 years of audit and accounting experience, the majority of which has been spent providing accounting and auditing services for Montana governmental and nonprofit organizations. Morgan will be responsible for directing the day-to-day activities of the staff and ensuring that the plan is executed as scheduled. Joining her on this engagement will be Justin Gerber, who has 8 years of public accounting experience, much of it spent working with governmental and nonprofit organizations. Dan McInerney, a staff accountant with a number of years of experience working with governmental entities and single audit standards, will perform the majority of the audit field work. Tanner Gliko, staff accountant, will provide additional support as necessary. Terry Alborn, a shareholder with over 30 years of experience, will perform independent quality control technical review on the engagement. We are confident that our engagement service team will provide highly professional and timely service. Our staff has a wealth of experience that can provide an invaluable resource for your organization. Resumes of our professional staff involved in this engagement are included in this proposal. Morgan oversees more than 30 financial statement audits and reviews for governmental, nonprofit, and for profit entities. Additionally, she provides other attestation engagements (compilations, agreed-upon procedures, financial statement preparation) and tax preparation services for numerous other clients in industries such as nonprofit, medical, technology, retail, restaurant, construction, finance, and professional services. Morgan has also recently served as a peer review team member, in charge of reviewing the client’s A-133/OMB Uniform Guidance engagements. We have experience auditing a number of other Montana local governmental entities. References are included on the next page. We encourage you to reach out to them; we are proud of our positive working relationships and strive to maintain them. CITY OF BOZEMAN Independent Audit Proposal Page 4 REFERENCES City of Belgrade, Montana Government auditing standards Single audit in applicable years Diane Eagleson, Finance Director deagleson@cityofbelgrade.net Ted Barkley, City Manager tbarkley@cityofbelgrade.net City of Livingston, Montana Government auditing standards Single audit in applicable years Paige Fetterhoff, Chief Finance Officer pfetterhoff@livingstonmontana.com Michael Kardoes, City Manager mkardoes@livingstonmontana.com Town of West Yellowstone, Montana Government auditing standards Lanie Gospodarek, Finance Director lgospodarek@townofwestyellowstone.com Dan Sabolsky, Town Manager dsabolsky@townofwestyellowstone.com Hebgen Basin Fire District Government auditing standards Shane Grube, Fire Chief sgrube@hbrfd.com (406) 646-9094 Other references available upon request. CITY OF BOZEMAN Independent Audit Proposal Page 5 SCOPE – AUDIT APPROACH Planning The audit will be performed in accordance with Generally Accepted Auditing Standards and Government Auditing Standards. The planning phase includes gaining an understanding of your accounting system, policies and procedures; evaluating internal controls; preliminary materiality; the nature, timing and extent of the audit testing procedures; and coordinating the work to be accomplished throughout the audit. Preliminary audit planning is a collaborative process. The entire audit team meets to discuss the engagement as a whole, analyze the preliminary risk assessments, and brainstorm audit procedures. Internal Control Internal control evaluation is based the adequacy of the internal controls to effectively prevent, or detect and correct, errors or misstatements. To evaluate this, we must determine whether the controls are designed appropriately and implemented. We test samples of revenues and disbursements, then use our evaluation to determine the nature, timing, and extent of audit testing and to design our audit procedures. We will also consider the adequacy of policies and procedures to effectively mitigate the risk of errors, irregularities, or misstatements. The results of these evaluations can provide a basis for improvements to add value to your organization and its operations. Materiality Preliminary judgment of materiality is based on the assessed risk of material misstatement, the amount and types of assets and revenues and the nature and frequency of proposed audit adjustments in prior periods. Amatics will use a risk-based approach to the audit of the organization. Testing in certain areas will be primarily substantive in nature (confirming balances, vouching significant additions) while testing in others may consist more of analytical procedures (identifying and investigating large and unusual variances from predicted or budgeted amounts). Our testing will concentrate on individually significant items. We will determine the areas of high risk on the organization’s financial statements and rely heavily on substantive testing in those areas. For areas of lower risk we will rely on analytical procedures such as inquiry and observation and comparison of amounts to previous years and to budget. Field Work The majority of the substantive procedures and testing happens during field work. Audit staff perform the majority of the testing procedures, as well as analytical procedures in areas of lower risk. These procedures are all designed by the audit manager or shareholder. All audit work performed by staff is reviewed by the audit shareholder. Audit procedures in riskier or individually significant areas are performed by the audit manager and shareholder. Resources will be used to ensure that the financial statements and footnotes are properly presented, in all material respects, and that all required disclosures are included and all relevant pronouncements are adopted. The next section discusses our plans for communication to ensure the audit process stays on track toward timely completion. ∙Understand controls to assess risks ∙Evaluate controls' ability to mitigate risk of material misstatement ∙Link financial statement risks to assertions ∙Design audit procedures to address risks ∙Evaluate internal control deficiencies ∙Communicate internal control related matters Internal Control in the Audit Process ∙Continuous audit team communication ∙During on-site audit work, (at minimum) daily status meeting with audit team and management ∙Communicate issues or concerns as they arise ∙Solicit feedback and input from management ∙Check in throughout the year on applicable topics Communication and Monitoring CITY OF BOZEMAN Independent Audit Proposal Page 6 SCOPE – TIMELINE AND COMMUNICATION We understand your requirement for the audit to be completed by early December. We have the capacity to be flexible to work around your staff and management schedules as necessary. Additionally, we are diligent about maintaining open communication throughout the entire process. We strive to make our planning process comprehensive so our field work time can be spent effectively and efficiently. We will communicate with management throughout the process as well, to involve you and solicit input to ensure we develop a complete understanding of your organization and its activities. As questions or issues arise, we will bring them to your attention in order to keep the lines of communication open and continually move toward the goal of a timely and thorough audit process. Additionally, we believe in maintaining our relationships with clients throughout the year, making it a point to stay knowledgeable about changes in your operations and activities during the year. We will also communicate with you on topics we find applicable to you and your industry, in the hopes of identifying opportunities to help contribute to the future success of your organization. We would propose the following timeline to ensure completion of the audit ahead of your desired deadline. Process Timing Entrance conference August Preliminary planning, request items August Preliminary close/financial statements Mid-September On-site field work September/October File and workpaper review October Exit conference November Delivery of draft reports November Audit Committee meeting Late November Delivery of final reports Early December City Commission presentation Early December CITY OF BOZEMAN Independent Audit Proposal Page 7 ADDITIONAL DATA DISCRIMINATION We affirm that we will not discriminate on the basis of race, color, religion, creed, sex, age, marital status, national origin, or because of actual or perceived sexual orientation, gender identity, or disability. SUMMARY At Amatics, our focus is on providing value to our clients. That is our emphasis throughout the entire audit process. We are here to provide support as needed throughout the year and to give you the tools and recommendations to support your financial reporting and management processes. We work to provide an exceptional level of client service and believe you will be completely satisfied if you choose to partner with us for your audit services. We would welcome the opportunity to meet with you to discuss our proposal and to answer any questions. CITY OF BOZEMAN Independent Audit Proposal Page 8 COMPENSATION The estimated total hours and all-inclusive maximum fees for the requested work are as follows: Planning and preliminary procedures Field work Reporting and review Total Shareholder 45 50 40 135 Manager 65 80 45 190 Staff 30 90 20 140 Total 140 220 105 465 Audit fees, if no single audit requirement 44,000$ 46,000$ 4,000$ Fiscal Year 2018 Fiscal Year 2017 Single Audit, if required Our fees are competitive with other firms in the area. The fee estimate above includes all travel, administrative, clerical, and reproduction work. In addition to competitive rates, we will never bill you for additional services without first having mutually agreed on the billing arrangement for those services, including questions and consultations throughout the year. Although we furnish services to a large number of clients, we recognize our responsibility to provide personalized service. Over the term of the engagement, the same professionals will be involved to maximize efficiency and provide continuity. Hourly rates charged for each staff classification is as follows: Shareholder 210$ Manager 160$ Staff 110$ Technical Reviewer 235$ CITY OF BOZEMAN Independent Audit Proposal Page 9 RESUMES MORGAN SCARR, CPA Shareholder Experience • 10 years in public accounting • Audit and accounting – governmental, nonprofit, and for profit organizations • Financial reporting and internal controls • Tax planning, preparation, compliance – business, nonprofit • Chair of Amatics CPA Group’s Audit Committee • Peer Review team member, reviewing uniform guidance engagements Education • Bachelor of Science in Accounting – Montana State University • Masters of Professional Accountancy – Montana State University Memberships and Community Involvement • Montana Society of Certified Public Accountants • AICPA Governmental Audit Quality Control Center • AICPA Nonprofit Section Member • Montana State University College of Business Accounting Advisory Council • First Security Bank Foundation Board Member • Bridgercare Past Board Member and Treasurer • Event volunteer with HAVEN, Big Brothers Big Sisters, Museum of the Rockies • Leadership Bozeman 23 JUSTIN GERBER, CPA Audit Senior Experience • 8 years in public accounting • Audit and accounting – governmental entities, nonprofit healthcare facilities, employee benefit plans, nonprofit, for profit organizations, compliance audits as required by the uniform guidance related to expenditures of federal awards • Tax planning and preparation – nonprofit organizations Education • Bachelor of Arts in Accounting and Finance – Cedarville University • Masters of Accountancy – University of South Florida Memberships and Community Involvement • Running, coaching, church involvement • Montana Society of Certified Public Accountants • American Institute of Certified Public Accountants CITY OF BOZEMAN Independent Audit Proposal Page 10 TERRY L ALBORN, CPA Shareholder Independent Technical Reviewer Experience • Over 30 years in public accounting • Audit – governmental, non-profit and for profit organizations • Financial reporting and internal controls • Tax planning and preparation – individuals, business and non-profit • Peer Reviewer under AICPA Peer Review program Education • Bachelor of Science in Accounting – Drake University Memberships and Community Involvement • Bozeman Area Chamber of Commerce Board of Directors • Bozeman Area Chamber of Commerce Lead Group member • AICPA Governmental Audit Quality Control Center • Montana Society of Certified Public Accountants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matics CPA Group Amatics CPA Group