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HomeMy WebLinkAbout2014 RFP Financial Audit: GHG, proposal WE For the years ending Jame 30,2014 and 2015 ,34vTG 6.a.;k,1,�,S'IIA A 1, :6M( ^f)RA C 16 14 OU li 66q"6`'urf,'C' tia ll6'6P4 '4 130 " + ..L0,��" � SESEEMSEEMEEM Proposal of Independent Financial Audit —by— Ryan . Lindsay, CPA, g -cp .co (406) 442-5520 April 24, 2014 CPAO Governmental Audit Quality .su er Member (J J� iVpi I I r: m I 1, duowe � Dein G T I 1�,iW NN&GALLISItA­ LETTER OF TRANSMITTAL April 24, 2014 City of Bozeman 201 First Avenue East Bozeman, MT 59901 Thank you for inviting Galusha, Higgins & Galusha, PC to submit a proposal for the audit of the financial statements of the City of Bozeman for the fiscal years ending June 30, 2014 and 2015. Because of our expertise in audit requirements of municipal entities and including our experience with municipalities of similar size, we believe we can provide a very technically proficient and efficient product to the City of Bozeman. This letter summarizes our response to your audit proposal request. Our audit will be a Single Audit conducted in accordance with generally accepted auditing standards; the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and the provisions OMB Circular A-133, "Audits of State and Local Governments and Non-Profit Organizations,"' and will include tests of the accounting records of City of Bozeman, Montana and other procedures we consider necessary to enable us to express an unqualified opinion that the financial statements are fairly presented, in all material respects, in conformity with generally accepted accounting principles and to report on the Schedule of Federal Financial Assistance and on City of Bozeman's compliance with laws and regulations and its internal controls as required for Single Audit. Timing and cooperation are important considerations. Our preliminary planning approach will be to meet with the City's Finance Director and staff and define a workable time frame for information required and reporting deadlines. In setting these audit information and reporting time lines we are quite conscious of City personnel availability and also the need to conform to the reporting deadlines relating to the City's Comprehensive Annual Financial Reporting to the Governmental Finance Officers' Association, We are committed to these responsibilities. Our first concern is to serve you and to help you to be effective, efficient, and successful at achieving your goals. We measure our own success by our effectiveness in helping you succeed. This engagement would be performed jointly by the Helena, Billings, and Bozeman Offices of our firm. We have presently committed two shareholders, two senior staff, one staff accountant to complete this engagement. A discussion of the GHG Offices is included in the profile section of this proposal. We appreciate the opportunity to present our firm for your consideration and will be pleased to furnish additional information or meet with the City's Selection Committee. Sincerely, RYAN D. LINDSAY, CPA, Shareholder Inti ✓ f 7 / u 7 I FIRM PROFILE Ga.lusha, Higgins & Galusha, PC (GHG) is an established high quality firm of certified public accountants Located in Montana and Idaho. GHG is the largest privately owned accounting firm in Montana. GHG is a long-standing member of the American Institute of Certified Public Accountants (AICPA) and in 2010 joined the AICPA Governmental Audit Quality Center. By joining the Government Audit Quality Center, we displayed our willingness to voluntarily adhere to the highest standards of audit quality in our policies, procedures and training;related to the performance of governmental and not-for-profit entities. These standards are the benchmark of our commitment to quality performance and client service. More information on the Center .and its requirements are available on the Center's website at�utt :r/�rw .mil:Hca.orgflnte°estA�eas/Govern'�aentalA�aditQtirality. Our Helena, Bozeman Billings offices will jointly provide the requested audit services for the City. Combined, these offices employ: Partners 11 Managers 12 Associates 34 Paraprofessionals/Support Staff 8 65 Each of our local offices provide a full-range of services to our clients including audit, accounting,tax, valuation, fraud prevention and other management advisory services. All certified public accountants on the staffs of our Melena, Bozeman and Billings offices are licensed to practice in the State of Montana and are individual members of the AICPA. The firm meets or exceeds all requirements all CPE requirements promulgated by the AICPA and GAO. Detailed CPE records are available by request. / smf tt,E'i I °sd1M` /�yny RELEVANT FIRM GHG has extensive non-profit and governmental audit experience. The following is a EXPERIENCE: partial list of clients for which we perform audit and tax work from our GHG offices. These clients have either granted us permission to use their name in this proposal or our involvement with them is a matter of public record: Client Number of'Years as Client City of Helena 26 Helena School. District#1 6 Hili County 5+ Blaine County 5+ Hill County Water District 5+ City of Ammon, Idaho 5+ Choteau County 1. City of Basalt, Idaho 5+ University of Montana 20+ Victor Water and Sewer District 5+ Woods Bay Water and Sewer District 1 Round Butte Water and Sewer District $ i MEN= f / 7 REFERENCES Listed below is a sample of entities our firm has provided audit services, all of the audits were Governmental audits including A-133 work: City of Helena: Glenn Jorgenson, Controller 316 N. Park, Room 320 Helena, Montana 59623 Telephone- (406)447-8415 26 years of audit service Helena School Kim Harris, District Clerk District 41: 55 South Rodney Street Helena, Montana 59601. Telephone -(406)324-2040 6 years of audit service Blaine County: Sandra Boardman, Clerk and Recorder P.G. Box 278 Chinook, Montana 59523 Telephone- (406)357-3240 8 years of audit service University of lathy Burgemeier, Director of Internal Audit Montana Revenue Internal Audit Department Bond Audit: 32 Campus Drive Missoula, MT 59812 The individuals listed above may be contacted and have indicated they will provide information regarding the audit services provided by Galusha, Higgins & Galusha, PC. The firm has not been the subject of any disciplinary or regulatory action during the past three years. The firm does not have a record of substandard audit work and are approved by the Department of Commerce of the State of Montana to conduct audits of local governments. a a G I ENGAGEMENT GRGANLIATIONAL CHART AND 'STAFF LISTING Ryan D. Lindsay, Mr. Lindsay has managed several audits of municipalities and local governments. He CPA, Shareholder has 12 years of experience with such audits. He will be responsible for the final review of the reports before issuance and review of critical audit fieldwork areas. He will be on-site for approximately 2.5% of the audit. Dian E. Dare, CPA, Ms. Dare has worked with local government and non-profit entities throughout her I5 Shareholder year career including audits of municipalities and local governments and school districts. She will be responsible for second review of reports before issuance .and will assist in supervision and review of audit fieldwork. She will be on-site for approximately 15% of the audit. Matt 14je1m, CPA, Mr. Hjelm has been involved with governmental auditing, including A-133 audits for Senior his entire 8 year career. He will assist in planning and supervision of audit fieldwork procedures. He will be on-site for approximately 50%of the audit. Amanda D.Flor, Ms. Flohr has been involved with governmental auditing, including A-133 audits for her CPA, Senior entire career. She will assist in planning and supervision of audit fieldwork procedures. She will be on-site for approximately 50%of the audit. Derrick,Williams, Mr. Williams has been involved with governmental auditing, including A-133 audits for Associate Auditor his entire 8 year career. He will assist in planning and supervision of audit fieldwork procedures. He will be on-site for approximately 50%of the audit. Professional resumes for the individuals listed above are included as Appendix A. 1 MEN: AUDIT Pursuant to the services requested in the proposal, we expect to perform an audit of the APPROACH AND City of Bozeman, including all reporting units and component units in accordance with PROPOSED GAGAS. In addition, we will perform audits, as required, of the City's major federal SCHEDULE: programs in accordance with OMB Circular A-133. GHG has not identified any potential difficulties, audit or otherwise, that would prevent our ability to comply with any of the requirements listed in the request for proposal. It is our philosophy that timely and effective communication is the key to successful auditing. It is our practice to maintain ongoing communication with all interested parties throughout the audit process. This approach enables us to identify and take action on areas of concern and performance from the very first day of audit planning, and helps us to conduct efficient and effective audits.. Our general audit approach is to plan the audit after receiving a preliminary trial balance. Based on our review of the trial balance and audit risk assessment, we design the audit and request certain account analyses from the client. After our initial audit risk assessment, which includes our estimate of the required time for each aspect of our audit, we schedule our audit planning and fieldwork phases in a manner to ensure staff continuity and availability. In order to maintain the level of quality and client service that we expect of ourselves, GHG has instituted a comprehensive employee development program which includes training specifically identified to allow our individual employees to succeed. The results of our development program are productive and efficient employees and satisfied clients. Internal control documentation and testing, if considered necessary, along with preliminary planning and confirmations would be performed over the course of 1 week in early September. Substantive testing on year-end balances would be performed over a 2-3 week period in October and early November. The audit team would include 4-5 individuals with experience in ,governmental accounting and auditing. .Audit sample selection and certain testing will be performed using data analysis software (IDEA), Utilization of IDEA provides significant improvements in audit effectiveness and efficiency when compared to standard audit practices. AUDIT We will identify and assess the City's compliance with applicable direct and material APPROACH AND laws and regulations by utilizing the State of Montana Department of Administration's PROPOSED "Compliance Supplement for Audits of Montana Local Government Entities" as well SCHEDULE, cont. as applicable OMB Compliance Supplements and Grant Documents. If awarded the contract to perform audit services for the City of Bozeman, GHG will proceed immediately with audit planning and preparation services as necessary to complete the audit. Upon the conclusion of audit fieldwork, our team will schedule the appropriate exit conferences and presentations in accordance with the request for proposal. CITY'S If selected as the City's auditors, we will determine periods of time (June-September) ASSISTANCE: when we could meet with appropriate City personnel and thoroughly document City processes. These periods of time would strictly be at the convenience of the City personnel involved in this process. As for assistance, in October through December we would hope to have the same level of cooperation as in prior years. SUMMARY OF We will provide the following services as of and for the years ended June 30, 2011, AUDIT SERVICES and 2015. AND REPORTS: Financial and compliance examination of the City of Bozeman's Comprehensive Annual Financial Report(CAFR). A summary of significant audit findings. On a rotating basis perform an in-depth examination of the City's internal control procedures and internal audits of one area as selected by the City. Perform the required procedures per state law over the building inspection codes. 5 printed copies of the final CAFR and 20 copies of the building code inspection report and management letter. r& 1 M �/ rr The total costs for auditing the City of Bozeman for the fiscal years ended .lune 30, 2013, 2014. and 2015 are as follows. Hourly Total 2014. 2015 Rate Hours Total Total Partner 200 40 $ 8,000 $ 8,000 Manager 130 40 5,200 5,200 Senior 115 120 13,800 13,800 Associates 100 200 20,000 20,000 400 47,000 47,000 Courtesy Discount (8,500) (7,500) $ 38,500 $ 39,500 The above fees are all inclusive to all related direct expenses for travel and report production. The above fees will remain the same for the initial two year contract period. .After the initial contract period Galusha, Higgins & Galusha, PC reserves the right to renegotiate the audit fee. The cost structure noted above is based upon there being no single audit requirement during this two year period. Per discussions with the .finance department they do not foresee having a single audit requirement for fiscal year 2014. if during the initial contract period a significant amount of new major funds are acquired or there is a substantial increase in the Federal expenditures Galusha, Higgins & Galusha, PC reserves the right to renegotiate the audit fee. : < APPEND}x A SLIMES i RESUME OF: Ryan D. Lindsay, CPA. PRESENT POSITION: Shareholder FIRM EXPERIENCE: February 2002 to present Galusha, Higgins &Galusha, PC Certified Public Accountants and Advisors Helena, Montana Audit and Agreed-Upon Procedures Experience Includes: City of Helena Financial Institutions Montana State Lottery Blue Cross Blue Shield of Montana Montana Board of Investments Long-term health care and hospitals Construction organizations Non-profit organizations Tax Experience Includes: Preparation of Federal and State Income Tax Returns EDUCATION: Bachelor of Arts, Accounting Bachelor of Arts, Business Administration -Concentration in Finance Carroll College; Helena, Montana May 2002 PROFFESIONAL I.,ICENSES AND ASSOCIATIONS: Certified Public Accountant—Montana Member of the American Institute of CPAs Member of the Montana.Society of CPAs Member of the Montana Bankers Association CIVIC ACTIVITIES: Treasurer, United Way of Lewis& Clark County Board of Directors, United Way of Lewis & Clark County Past treasurer of the Helena Chamber of Commerce Young Professionals Leadership Helena'Graduate CONTINUING PROFESSIONAL EDUCATION: AICPA Governmental and Not-for-Profit Training Program, October 2010 &2012 AICPA National Conference on Credit Unions, October 2011 YP � Mali 00 RESUME OF: Kimberly E. Dare, CPA, CFE PRESENT POSITION: Shareholder FIRM EXPERIENCE: 2001 to present Galusha, Higgins &Galusha, PC Certified Public Accountants and Advisors Billings, Montana Audit&Tax Experience Includes Financial statement and compliance audits A-133 audits Certified Fraud. Examiner Test internal controls during the auditing process Housing Authority Auditing Tribal Housing.Authority Auditing Tax preparation EDUCATION: Montana State University—Billings Bachelor of Science in Business Administration-Accounting Option PREVIOUS EXPERIENCE: Joseph Eve, Billings MT - 1999 to 2001 Audit governmental units, housing authorities, tribal housing authorities, school districts, not-for profits and Indian tribes and casinos. Prepare compilation and reviews for clients, as well as bookkeeping and tax.set-vices, Perform management advisory services, including the set-up of new computer accounting systems. Montana Silversmiths, Inc. - 1998 to 1999 Responsible for maintaining the standard product costs, performing regular cost accounting close, as well as reconciling purchase materials received with purchase material paid for. PROFESSIONAL LICENSES AND ACTIVITIES: Certified Public Accountant—Montana Member of American Institute of CPAs Member of Montana Society of CPAs Member of Billings Chapter of Montana Society of CPAs Association of Certified Fraud Examiners CIVIC ACTIVITIES: Past Treasurer Soroptimist International of Billings United Way volunteer Office of Public Instruction.GASB-34 Implementation Committee Montana Society of CPAs Governmental Audit Accounting;Financial Reporting Committee 4 ME= RESUME OF: Matt Hjelm, CPA PRESENT POSITION: Senior Associate FIRM EXPERIENCE: February 2011 to present Galusha, Higgins & Galusha, PC Certified Public Accountants and Advisors Billings, Montana Audit Experienee Includes: Financial statement and compliance audits of governmental and. not-for-profit entities OMB Circular A-133 audits Test internal controls during the auditing process Attest engagements PREVIOUS EXPERIENCE: Joseph Eve,Billings MT-2009 to 2011 Prepared individual, partnership, corporate,trust and estate tax returns. Acted as Senior Accountant/Assistant Controller for large Indian tribe on outsourcing,engagement. Duties included maintain/overseeing reconciliations,AR, AP, monthly fund financial statements, compliance with (SMB Circular A-87, Worked on audits of governmental entities, primarily in the areas of Indian tribes. Anderson ZurrlV uehlen,Butte MT-2008 to 2009 As part of the staff consultant team,gained experience in both audit and tax preparation.. Prepared individual, partnership, corporate and estate tax returns. Worked on audits of non-public entities, primarily in the areas of .financial institutions and construction companies. EDUCATION- Montana State University, Bozeman MT2007 M.A., Professional Accountancy Montana State University, Bozeman MT2006 PROFESSIONALB.S., Business, Accounting Option LICENSES AND ACTIVITIES: Certified Public Accountant—Montana Member of American Institute of CPAs Member of Montana Society of CPAs Association of Certified Fraud Examiners CIVIC ACTIVITIES: Billings School District No. 2 Audit Committee Heights National Little League Volunteer a RESUME OF: Amanda D. Flohr, CPA PRESENT POSITION: Senior Associate FIRM EXPERIENCE: January 2013 to present Galusha, Higgins & Galusha, PC Certified Public Accountants and Advisors Bozeman, Montana Experience Includes Financial statement and compliance audits A-133 audits Test internal controls during the auditing process Tax preparation OTHER EXPERIENCE: Holmes and Turner, PC, Bozeman MT-2008 to 2012 In-charge and staff responsible for audits of not-for profits, governmental units, and school districts audits. Prepare compilations and reviews for clients, as well as bookkeeping and tax services. EDUCATION: Dickinson State University Bachelor of Science in Accounting PROFESSIONAL LICENSES AND Certified Public Accountant- Montana ACTIVITIES: Member of the American Institute of CPAs Member of Montana Society of CPAs CIVIC ACTIVITIES Heart of the Valley Animal Shelter Volunteer , ` t RESUME OF: Derrick A. Williams CPA Candidate PRESENT POSITION: Associate 11 FIRM EXPERIENCE: January 2013 to present Galusha, Higgins &Galusha, PC Certified Public Accountants and Advisors Helena, Montana Audit Experience Includes: Single Audits Non Profits Casino Gaming Banking Industries include: Tribal Governments Financial Institutions PREVIOUS EXPERIENCE: Senior Auditor JOSEPH EVE, CPAs Salt Lake City,UT January 2009 to December 2012. EDUCATION: Bachelor of Science, Accounting University of Idaho December 2008 CONTINUING PROFESSIONAL EDUCATION: Annual Audit& Accounting Updates APPENDix $ PEER REviEw REPORT i,l I u li rl i II oW i� SYSTEM REVIEW REPORT August 26, 2011. To the Shareholders of Galusha, Higgins&Galusha IMINOFFICE and the Peer Review Committee of the Montana Society of CPAs �2010TRUXTUN AVENUE SUM:300 We have reviewed the system of duality control for the accounting and auditing 8A,Ki. srlr.LD,CA93309 practice of Galusha, Higgins & Galusha (the firm) in effect for the year ended June rr-I..6M 321,197~ 301, 2011, Our peer review was conducted in accordance with the Standards for rAX 661,324.4997 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 info(pbxpasrorn designing a system of duality control and complying with it to provide the firm with 568 CENTRALAV U reasonable assurance of performing and reporting in conformity with applicable SHAFIEK ALIFO NIA93263 professional standards in all material respects. Our responsibility is to express an ,fl, &')f 740145 opinion on the design of the system of duality control and thefirm's compliance r. 0.'41,746.1218 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 8050 N-PALM AVENUE wwW.aic a.otir rsupn. dna . sulr�roe FRES 0,'GAVF0R A 93711 As required by the standards, engagements selected for review included engagements TEL s59.4a6�s�2 performed under Government Auditing Standards, audits of employee benefit plans, FAX 5s 476,1591 and audits performed under FDICIA. 7190 E.COLORA09"pivo. In our opinion,the system of quality control for the accounting and auditing practice su0"t:' 0se of Galusha, Higgins & Galusha in effect for the year ended June 307, 2011,. has been PAS DNA, AL�FORNIA91 dol suitably designed and complied with to provide the firm with reasonable assurance of TI Q%MOMX performing and reporting in conformity with applicable professional standards in all rAX 626:*10922 material respects. Firms can receive a rating of pass, pass with defrciency(ies), or fail. Galusha, Higgins Icor Galusha has received a peer review rating ofpass, BROWN ARMSTRONG ACCOUNTANCY CORPORATION By: Burton H.Armstrong ca NOith AMtlr6ba y' = R.0315TE RM with the PLbkic t.:ltarnyviy A,Qcour1tl g Ovesqbl,Board asci MFMBFR of the Aniv Pun 1"str vl,of P`ri'iifiwI PuWr ArFrv+ummntti / / / , ,. /, ...r , / r. / ,./, % ��� f ll� ��� Peer Review Program American institute of Certified Public Accountants Administered by the Monfana Society of CPAs Novernber 10, 2011 William F. Honzel„ C-"PA Galusha, Higgins & Galusha, P.C. 910 N Fast Chance Gulch Ste A Helena, MT 59601 Dear Mr. Henze]: It is my pleawsurc to notify you that on November 10, 2011 the Montana Peer Review Executive Committee accepted the report on the most recent system peer review Of your firm. J'he due date for your next review is December 31,2014. This is the date by which all review documents should be completed and submitted to the administering entity. As you know, the: deport had a peer review rating of pass. The Committee asked me to convey its congratulations to the: firm, Sincerely, Carol l.,opuch Peer Review Coordinator 800 272 0307 cc_ Burton Armstrong, CPA Firm Number-, 10023496 Review Number.324198 Letter 11>(A3662 P,0 Box 138,Helena,MT 69624-0138 (406)442-7301 www.mscpa.org / t' G_. r.. . / %�,,,li��./ /,,,fi///�I/i/r�//%/i/tei�„/.�✓/iii/�JJ„ //1id�% /IJ �����//%/`��f%��////%/�//////,�i//iii,:,