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HomeMy WebLinkAbout2014 RFP Financial Audit: JCCS, Proposal �TCC5 Proposal for Audi( Services Years Endinu Junc 302014 &' 201 J Proposal for Annual Independent F 0 0 inancial Audit City of Bozeman Contact: Loran Stensland, Shareholder 501 Park Drive South #100 Great Falls, MT 59403 Istensland@jccscpa.com 406-761-2820 Submitted: April 24, 2014 714 Stoneridge Drive, Suite 3A q Bozeman, Montana 59718 - (406) 587-1277 - jccscpa.com T��[flc ol,Corlh_'Ms Letter of Transmittal 3 Firn-i Profile and Qualifications 4-5 Approach to the Audit 6-7 Most Recent Peer Review Report 8 Additional Data 9-10 Two-Year Price Proposal 11 Appendixes A. Price Proposal— Staff Hours and Rates 12 B. Resumes of the Audit Team: 13-17 Loran Stensland, CPA Troy Watling, CPA Vickie Tischendorf, CPA Tyler Bryant, CPA, CFE Matt McKee 714 Stoneridge Drive,Suite 3A P.O.Box 1,965 Bozeman,MT 59771 Ph.(406)587-1277 - Fx.(406)587-8794 — Luj*ermier- Clark - CTnpanella- Stevens - PC jccscpa.com Certified Public Accountants and Business Advisors April 24, 2014 Auditor Selection Committee City of Bozeman, Montana City Hall, 121 North Rouse Avenue Bozeman, MT 59715 LETTER OF TRANSMITTAL We appreciate the opportunity to submit this proposal to serve as the independent certified public accountants for the City of Bozeman, Montana. This proposal addresses the audit and accounting services outlined in your request for proposal for the years ended June 30,2014 and 2015. The City of Bozeman, Montana has an outstanding reputation for excellence in financial reporting and we congratulate you on your accomplishments. We fully understand the work to be performed in accordance with the latest revisions of Generally Accepted Auditing Standards as they apply, the standards set forth for financial audits in the General Accounting Office's (GAO) Government Auditing Standards 2003 & 2007 Revision (as required), the provisions of the federal Single Audit Act of 1984 (with amendment in 1996) and U.S. Office of Management and Budget (OMB) Circular A-133, Audits of State and Local Governments and Non-Profit Organizations, the time frame as stated in the request for proposal, and we wish to emphasize our commitment to meeting all of the City of Bozeman's requirements. Junkermier, Clark, Campanella, Stevens, P.C. (JCCS) is one of the oldest and largest local firms in Montana. We have the technical abilities and expertise to assist the City of Bozeman, Montana with their implementation of various accounting pronouncements as they become effective, as well as other difficult accounting matters that may arise. We have the resources, experience, reputation, and enthusiasm to serve the City of Bozeman, Montana in an outstanding manner. Loran Stensland, Shareholder, is authorized to make representations for JCCS, and can be reached at 501 Park Drive South#100, Great Falls,Montana 59405, 406-7612820. We welcome the opportunity to meet with you to discuss this proposal and answer any further questions you might have. Again, we appreciate the opportunity to submit this proposal. Respectfully submitted, JUNKERMIER, CLARK, CAMPANELLA, STEVENS, P.C. Certified Public Accountants and Business Advisors �f Loran Stensland, CPA Shareholder Bozeman • Great Falls • Hamilton - Helena - Kalispell • Missoula. - Whitefish Page 3 i�H'M PFC)Ilk 2 LH]d QUU1111CLOJOWS AN)w hbnkernllcr Uk,-O,. CampancBkl. Scv,,,' rll, staff will be provided in subsequent years in order to Our firm is one of the oldest and largest local firms facilitate continuity and efficiency in your audit in Montana. Founded in 1946, we celebrate over 65 engagement. The selected audit team will consist of years of extending excellent service to our clients the following professionals: and providing them with industry expertise. We have seven (7) offices across the state of Montana located in Great Falls, Hamilton, Helena, Missoula, Loran S1Cnslaml, (11A Kalispell, Whitefish, and Bozeman. In total, these seven offices employ over one-hundred twenty five (125) individuals. Our statewide audit division staff is currently comprised of thirty (30) highly qualified scHmv1,N ior Br� U 11\, F professionals, Il of which comprise our governmental audit staff. sta'ff'f' Auditing services for the City of Bozeman, Montana All members of the firm who are certified public would be conducted by our Bozeman and Great Falls accountants are in compliance with the Montana offices. Staffing for these offices is as follows: Board of Public Accountants' CPE requirements. Furthermore, all personnel assigned to the Bozeman Great Falls engagement are in compliance with the Government Shareholders - 6 Auditing Standards' CPE requirements. A list of Managers 2 4 continuing education courses for the engagement Senior Staff - 3 personnel is available upon request. Other professional 3 4 Resumes for the above individuals are included in staff Appendix(B)to this proposal. The JCCS, Bozeman and Great Falls offices offer a wide variety of professional services from auditing and tax services to management advisory services. Our expertise includes working with both wo, government, not-for-profit entities, for-profit entities and employee benefit plans in accounting, auditing, financial reporting, and taxation. Although the Bozeman and Great Falls offices will be directly responsible for this engagement, our firm structure allows us access to statewide expertise from all of our branch offices. Employees of JCCS will perform all of the work on this engagement. In every case possible the same Page 4 1-'irn) Pr(d'iic mid Qufl i 10111" Our Bozeman and Great Falls offices have extensive experience auditing governmental organizations of various sizes including organizations exempt under 11 411 Section 501(c)(3) of the Internal Revenue Code and those subject to the requirements of OMB Circular A 133 and the Single Audit Act. The following include our most recent audit engagements over the past five years with operationsX-", `0'00 and compliance requirements similar to that of the City of Bozeman, Montana. All of these engagements issue a Comprehensive Annual Financial Report. You are invited to contact anyone on the list. En tity Scope of Work Fiscal Year Engagement Total Hours Contact Name relephone-9 Partner City of Billings Full-Scope-A-133 6/30/09-6/30/13 Loran Stensland 540 Pat Weber 406-657-8209 Cascade County Full-Scope-A-133 6/30/09-6/30/12 Loran Stensland 490 Joe Briggs 406-454-6810 City of Great Falls Full-Scope-A-133 6/30/09-6/30/13 Loran Stensland 465 Melissa Kinzler 406-455-8476 City of Bozeman Full-Scope-A-133 6/30/09-6/30/13 Loran Stensland 435 Brian Lameres 406-582-2335 Page 5 "Iq,�q)roach to dw Amhl As our experience indicates, we clearly understand PLH'�MSL� the scope of services to be provided. You can be The purpose of our audit will be to express our assured that we will design your audits specific to opinion that the financial statements present fairly, in the City of Bozeman, Montana to ensure compliance all material respects, the financial position, results of with all applicable standards and ensure you receive operations and cash flows of the City of Bozeman, high-quality, efficient, and effective audit services. Montana in conformity with GAAP. We will also Furthermore, JCCS is independent with respect to express an opinion on compliance with the types of the City of Bozeman, Montana as defined by compliance requirements described in the OMB Generally Accepted Auditing Standards and Circular A-133 Compliance Supplement that could Government Auditing Standards and no conflicts of have a direct and material effect on each of the City interest exist. of Bowman's federal programs. If, for any reason, we feel it necessary to give other than an unqualified �'W 0 pc. Prot S,,I'\ i°.: opinion, we would clearly state the reason for the The audits will be performed in accordance with: qualification and discuss it with you prior to issuing e Generally Accepted Auditing Standards as the report. prescribed by the American Institute of Certified Public Accountants * Related Accounting Principles Generally Our audit procedures are based upon our risk Accepted in the United States (GAAP) assessment of the significant elements of the financial statements as identified by the needs and • Government Auditing Standards, issued by the expectations of the users of the financial statements. Comptroller General of the United States In addition, we will assess what assertions are • The Single Audit Act, as amended, and U.S. relevant over the identified significant elements, Office of Management and Budget Circular A what type of controls should be in place, document -133 the controls in place, test the controls, and then develop analytical audit procedures to be used during preliminary review of the financial statements. Based upon the results of the preliminary analytical procedures, we will determine the nature, timing, and extent of further audit procedures that will enable us to gather sufficient audit evidence to issue an audit opinion. Communication and observation are key components of our audit �Xapproach. Our approach allows Lis to demand less of ,04 your time by focusing our work on the significant lx 0"'1 1j elements identified in the risk assessment process. Page 6 iaIkTMd COWRfl legal services utilized during the year and discuss applicable laws and regulations with governance and Prior to audit fieldwork, we will gain an management. understanding of the City of Bozeman's internal controls through discussion with governance, �Jr�c of management, and staff, and review of operating JCCS operates on a "paperless" platform and will manuals, organizational charts, and internal audit utilize and promote the transmission of documents in reports. In addition to our standard procedures to an electronic format to the extent possible. We will gain an understanding of internal controls, we will establish a secure link for these transmissions to perform an in-depth review of one area as selected promote efficiency, and ensure confidentiality of the by the City of Bozeman, Montana. information. JCCS does not anticipate utilizing data �SanlphHI,2 extraction software for audit procedures. Sampling procedures will be utilized where needed to reduce risk of material misstatement of the Upon request, we will provide a copy of the financial statements to a sufficiently low level. workpapers pertaining to any questioned costs Sampling procedures may be utilized for testing determined during the audit. The workpapers will be account balances, details of transactions, tests of concise and provide the basis for the questioned controls and tests of compliance. Tests of costs as well as an analysis of the problem. Our compliance and internal controls will be performed workpapers are also available for examination by the as required by Yellow Book and OMB Circular A- cognizant federal or state agency, the GAO, and the 133. City of Bozeman, Montana. Our audit workpapers are maintained for a minimum of five years after the report release date. As stated in our overall risk based audit approach, preliminary analytical procedures are utilized in the planning segment of the audit. Additional analytical We will conduct an exit conference with the City of procedures are used in substantive testing utilizing Bozeman, Montana Director and Controller at the non-financial to financial data. An example would conclusion of our fieldwork. Observations and be calculating projected service revenue based on the recommendations including those related to internal number of users of the service and the applicable control and compliance will be summarized in rates. writing and discussed with the City of Bozeman, Montana Director and Controller. We will present the final reports to the audit committee and City To identify the significant laws and regulations to be Commission. audited, we will initially review grant documents; debt and lease contracts, and the Montana Code Annotated. We will also review invoices related to IRS= Page 7 7 t �I to L. Ik It tV ;1 rw .I L N !H .. P I, I wr the Shareholders a:ad' 1auru<.a Pri�rlr:rp C larks Caarnpane .a, A, S(cycils, h .(.. tararl Ow Pc.er Idea Ow Ceartamur.we of Te y,lwru'at;an a CPA Socioy 'aaa We rvim:wed the sy51' ni or anality crwratrr:rl Or thw., a ac.ca.aauratiry am] Wi ing p'ma.°tac:a.° of J urrlcnrrda, g.'9W C'a araap-aauaella, & Stevens, p'.(,.. (the lir.rua) in effect for the year endedJune 307 201 1 . (scar peer review was conducted 0 taecrrrclaarne witlr Ilia: St;auaclaank 1"lar 'Pul�au"r,rriuug rand Repacar-tura, on Peer Reviebxs esnibfislaeel lay the Peer Review Hrurcl of Me Arruerlarru lur.,ti ute: of C er hed PAHc• ,ycc:rraarrtautts Ile An is respaarrsHe Or designing as systcura of clauaalOy cmn rri and areamoysing m ith rt to praavidc Be Inial *a r h ru.aerra.rlale ratia;wmnee of pedbrrning and reprwarting, in c.rrnl¢art i y with ap[Aicaalale p�arwalc„ssionarl standards in <alp tnauteriaal respect, Our resp"acaTrAlaility is to exp mss arra arpairrion on the design ral`IN system 0f CIU',.d1ty ccaratraal aratd thae lira"a's compliaarace 1.)aSed rata our review. 'Hic ratrtuare, arl�leclt es, ~scope, Waitr not s ral'. and the ptwccrrlr.rms p arkarrawd lora a SysCe n On ov are descril,cd in the sta n l;.uAs at avay4� urap"a�ywa5ra� p�ruksaiur�ra��i . As rc°alatire d liy the staaKards, cng ageraaews ;elucted Or rw.;w remv include(] enga{vAea- ctlt, p C ornied under t'drnvrrrarrw AndihngSusrrGbiVy and aa.ucMs ca1`eaag:alrr ve WHO plans, In our afknimr, the systema rrt`cpa.aaah ccrmnd tcar alae aaeca.wurt"irrg and rarur.litiag practke rrt'Jaraulcerrauuer, (M t.Iaarpramlh, & Stevens,. P L in ekla 1`u Me year ctaekd June 30. 2011. Para, I,a= sukaNj clesigwd ,and vmrpalied "Oh to paroviele We larraa "rtlk r"mmrakak le <u"aaraarace of yr'I'onning and zepaa'rrtitag In saE'dl4rVmk1v w uh appl1,i:aNe prs"tOssio ,i,l ti?twi dards tl.N','t all dGre41.4rkl respects. F n-rns �an reccive &a raftingof gaaa.a.a. �zfrma r.mralr wlmw�°fir"aaG�aueu,�fPc �,m or,aLrrl. Jraka c:rratac°r. C:°laarlw. t:"rampaaarwHa- So Sici+.ans. 11 (� has received to freer Nkinv rahng of pass, Page 8 .ALLI�UOHLfl *November 2014: Draft audit reports and At JCCS, we take the confidentiality of our clients CAFR are provided to the City of Bozeman, seriously. We will not publish, reproduce, or Montana officials for review. otherwise divulge information obtained in any • December 2014: City of Bozeman, Montana manner. Only JCCS employees on the audit returns draft comments to JCCS. JCCS issues engagement team will have access to the information final CAFR and audit reports. obtained during the audit, Furthermore, we utilize a secure file sharing program to facilitate secure transmission of all electronic documents. Rr ('ompU loll o9-Al.ldit The timing of the audit schedule is dependent upon the preparedness of your year-end accounting records. Provided the accounting records are ready A and available, by the second week of September, r �iwolf 2014, the expected timeline for the City of Bozeman, V F Montana audit would be as follows: b • June 2014: Entrance conference with City of Bozeman, Montana officials to discuss a Fieldwork dates are general and the actual dates will timeline for the audit and the overall audit be scheduled based on your availability and plan. preference. Please note that we strive to exceed July 2014: JCCS conducts internal control stated deadlines in all cases possible, procedures and review of the City's minutes. 01jr Commihil,'M • August 2014: Single audit procedures are conducted. JCCS submits a request for We understand completely the work to be documents and confirmations. performed. Our current level of staffing is more than September 2044: Fieldwork performed at sufficient to ensure that you receive timely, efficient • City of Bozeman, Montana offices. audits. As we previously stated, in every case possible the same staff will be provided in e October 2014: JCCS meets with City of subsequent years in order to facilitate continuity and Bozeman, Montana officials to summarize efficiency in your audit engagement. preliminary results, discuss any problems encountered, and identify work to be completed. 1100100 Page 9 'AckfinonAl Rcquin,'d collaboratively with the City of Bozeman, Montana At the conclusion Of Our engagement, we will issue a to address these challenges. required communications letter which is addressed to the City of Bozeman, Montana Commissioners, This letter discusses our observations during the audit and our recommendations for improving operations, internal controls, the accounting system, and other aspects we may notice. Before publishing our required communications letter, we will review it with the Director and Controller so that we can solicit their comments and cooperation in making any needed changes. In the event any Of Our services were to disclose fraud or other irregularities, we will promptly advise the City of Bozeman, Montana Commissioners. V 1 I ta e :�a i e k°"P `: ,,,rG C-,�,; At JCCS, we pride ourselves on providing value- JCCS affirms that we will not discriminate on the added services for our clients. We provide analysis basis of race, color, religion, creed, sex, age, marital and recommendations for issues that come to our status, national Origin, or because of actual or attention relating to efficiencies in your operations, perceived sexual orientation, gender identity or internal controls, and accounting processes. In disability which also recognizes the eventual addition, when you are a client of JCCS you have contract will contain a provision prohibiting access to our personnel all year to assist with issues discrimination as described above and that this that arise during the year. Furthermore, we conduct prohibition on discrimination will apply to the hiring no-cost personalized presentations to help educate and treatment of the submitting entity's employees. our clients on various topics including business JCCS has in place an equal opportunity employment practices, recent accounting pronouncements, policy that applies to all Firm activities. This policy compliance, and other technical accounting topics. is in the current policies and procedures manual, NcN� GASH which is required to be read and followed by all employees of JCCS. The City of Bozeman, Montana will be required to implement GASBs 65 and 66, as applicable, for the year ending June 30, 2014, and GASB 68 for fiscal year ending June 30, 2015. Implementation of new standards is often challenging and JCCS would work Page 10 714 Stoneridge Drive, Suite 3A P.O,Box 1965 Bozeman, NIT 59771 Ph.(406)587-1277 - Fx.(406)587-8794 jecscpa.com Lwn ermjier- Clark - CaTpanella- Stevens - PC ------ Certified Public Accountants and Business Advisors Two-Year Price Proposal JCCS is very familiar with the nature of funding, operations and reporting requirements of the City of Bozeman, Montana. Our prices are based upon the time expended on an engagement at appropriate hourly rates for the indi- viduals involved, which are based on our understanding of your operations, assistance from your personnel, and your records. The following summarizes our proposed price for the audit and non-attest services described in the request for proposal. The two-year pricing proposal listed below includes the following non-attest services that are not sepa- rately stated: • Draft the Comprehensive Annual Financial Report, including full note disclosures. • Provide 25 copies of the audit report and management letter including an electronic PDF copy of each. We would like to propose the following two-year price structure for the years ended: June 30,2014 Audit & Don-attest services $39,500 June 30,2015 Audit& non-attest services $41,500 See Appendix A for hourly rates to be charged for each staff classification. These quotes reflect an approximate 65 to 70% decrease in the hourly rates as stated in Appendix A. Any additional services requested that fall outside the scope of the audit will be billed at our hourly rates of$90 to $230 per hour depending on the level of staff required. Bozeman - Great Falls - Hamilton * Helena - Kalispell - Missoula - Whitefish Page 11 Appendix A PROPOSAL FOR ANNUAL INDEPENDENT FINANCIAL AUDIT CITY OF BOZEMAN PRICE PROPOSAL STAFF FOURS AND RATES STAFF HOURS AND RATES The following summarizes the JCCS proposed hours and staff rates for the audit and non-attest services described in the request for proposal. Our estimated hours to complete the June 30, 2014 and 2015 audits by classification of employee are as follows: Hours hate Shareholder 40 $230 Manager 150 $150 Senior 110 $135 Staff 140 $90 Page 12 Appendix B PROPOSAL FOR ANNUAL INDEPENDENT FINANCIAL AUDIT CITY OF BOZEMAN RESUMES OF THE AUDIT TEAM RR!,3Un-ies of the Ai idit lean') Certified Public Accountant Shareholder, Great Falls Mr. Stensland has experience in auditing and accounting with an emphasis in the government, credit union, non-profits, private business,and insurance industries. He also prepares financial statements, including analysis, adjustments, and related comments. His tax experience includes preparation of individual, corporation, and partnership federal and state tax returns. He is currently a member and former chairman of the JCCS Audit and Accounting Committee. I B.S. in Business Administration, Major in Accounting Montana State University, Bozeman,NIT Continuing education courses through Montana Society of Certified Public Accountants (MSCPA), American Institute of Certified Public Accountants (AICPA) sponsored courses. Mr. Stensland has met all educational requirements required by the Montana Board of Public Accountants and the AICPA. Uomm� m'�N Mr. Stensland serves as the President for the Lewis and Clark Foundation, Inc. Mr. Stensland is an active member and Past-President of the Uptown Optimist Club, Past- Treasurer of the Confero Sports Foundation, as well as an alumnus of Leadership Great Falls. Page 13 a,i m e s o t h e A idit 'Team � k0Y LIN() Certified Public Accountant Manager, Bozeman Mr. Watling has experience in audits of commercial, non-profit and governmental entities, preparation of audited reviewed and compiled financial statements, including related notes to financial statements. His specific industries of focus are non-profit organizations, HUD, and audits in accordance with Circular A-133. His tax experience includes the preparation of individual, nonprofit, partnership and corporate federal and state tax returns. B.A. in Business Administration, Major in Accounting University of Alaska, Anchorage, AK Continuing education courses through Montana Society of Certified Public Accountants (MSCPA), American Institute of Certified Public Accountants (AICPA) and Junkermier, Clark, Campanella, Stevens, P.C. sponsored courses. Mr. Watling has met all educational requirements required by the Montana Board of Public Accountants and the AICPA. Cmmlnmi`il\ Member of Gallatin County CDBG Revolving Loan Fund Board, Past board member and treasurer of Big Brothers Big Sisters of Gallatin County, member of Gallatin College Advisory Council,member of MSCPA, member of the MSCPA Ethics Committee, member of the Association of Certified Fraud Examiners and AICPA. Page 14 of the AUdft TI earn VK'KH� 'Hs( I H'NDORF Certified Public Accountant F"I'2'seni llonitim� Manager, Bozeman Mrs. Tischendorf has been involved in all phases of audit engagement since 1993,and her primary focus consists of the auditing of Employee profit sharing,4-01(k), and ESOP benefit plans, and audits of governmental and not-for-profit entities. Ms. Tischendorf also conducts financial statement reviews and prepares financial statements for a variety of entities. B.S. Business Administration, Major in Accounting Montana Missoula, MT Continuing education courses through Montana Society of Certified Public Accountants (MSCPA), American Institute of Certified Public Accountants(AICPA) sponsored courses. Ms. Tischendorf has met all educational requirements required by the Montana Board of Public Accountants and the AICPA. CoinnmnO'N Ms. Tischendorf currently serves on the board of the Montana Society of Certified Public Accountants (MSCPA), serves as chair to the MSCPA Audit committee, and is the board liaison to the Government accounting, auditing& financial review committee. She is a member of the American Institute of Certified Public Accountants and the Governmental and Employee benefit plan audit quality centers. Ms. Tischendorf participates in various community fundraisers and recently served on the finance committee for the local United Way. Page 15 R(.:sun � of the At..ick 'Fearn Certified Public Accountant, Certified Fraud Examiner Posirion Senior, Great Falls I N)cn° i" I Mr. Bryant has experience in auditing and accounting with an emphasis in the governmental, non-profit,private businesses, and credit union industries. He also prepares financial statements, including analysis, adjustment, and related comments. His tax experience includes preparation of individual, non-profit, corporation, and partnership federal and state tax returns. Master of Professional Accountancy Montana State University, Bozeman, MT B.S. Business Administration, Major in Accounting Montana State University, Bozeman, NIT Continuing education courses through Montana Society of Certified Public Accountants(MSCPA),American Institute of Certified Public Accountants (AICPA) sponsored courses. Mr. Bryant has met all educational requirements required by the Montana Board of Public Accountants and the AICPA. kr\ Mr. Bryant is the Vice President of the Great Falls Society of CPAs, Treasurer for the Confero Sports Foundation, and formerly a member of the Financial Literacy Committee for the Montana Society of CPAs. Page 16 a.a °pro r of (he A ii-6 p N E,,a rr, Accountant II, Bozeman Since 2013, Mr. McKee has experience in audit and review engagements including inquiry, analysis, documentation, and testing of client control procedures and preparation and review of financial statements. Additional experience includes audits of financial institutions and not-for-profit organizations. 6 c:1�x�aba�3E�i7 B.S. degree in Business, Accounting Option (Honors) Montana State University, Bozeman, M Continuing education courses through Montana Society of Certified Public Accountants (MSCPA), American Institute of Certified Public Accountants (AICPA), Junkermier, Clark, Campanella, Stevens, P.C. sponsored courses and other industry specific courses. Mr. McKee is a member of the Bozeman Chapter of the MSCPA and is an active volunteer with Bozeman youth baseball and a past volunteer with Uganda Orphans Fund and Big Brothers Big Sisters. Page 17