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HomeMy WebLinkAbout2014 RFP Financial Audit: Denning, Downey and Associates, P.C. A PROPOSAL FOR PROFESSIONAL AUDITING SERVICES OF THE CITY OF BOZEMAN Submitted by: Denning, Downey&Associates, P.0 Certified Public Accountants P.O. Box 1.957 Kalispell, MT 59903-1957 (406) 756-6879 ddagddaudit.com April 15, 2014 Contact: Kim M. Downey, CPA, CGFM, CFF, CITP kdowncygddaudit.com Robert K. Denning, CPA, CGFM, CFF, CITP bdenninggddaudit.com Denning, Downey & �ssoe� �' u °P.C. CERTIFIED PUBLIC ACCOUNTANTS P.0. Box/Vj7Kalispell, HT 59P03'/957 (406) 756-687y`FAX(406)25 7-7879~E-Mai/ Kim M Downey, C?A, CG}M, CFF (]TP Robert K. Denning, {]PA' CGFM, {FF, C2T7, TABLE OF CONTENTS CoverLetter.................................................................................... 1-2 License to Practice in State ofMontana................................................ 3 Company Profile, Staff Qualifications and Experience FirmProfile......................................................................... 3 � UTx*crionoo.^.~—^..,^_._—.'__~..._~—..^.~..~^....~~....,,,~^,.,^,'^..^`^ 3 References........................................................................... 4-5 Professional Certificutioom..~.......,.^......,..........,,,.....,..,.-- 6 Key Personnel: Years ofRelevant Experience......................................... 6-7 Methodology: Independence........................................................................ 7 Conflict nyInterest................................................................. 7 Strengths............................................................................. 7 Audit Philosophy,,,,,~,,,~,~,,,~,,_~_,___~^_,_~,,,',^,,.^,,,.~,,~,~,^,~,, 7 Relate and Interact................................................................. 7-0 Cnuammnitatioo....__.~_—,.............~,~.,,~,,,~,,,~,~,~,,.,~,'~,., 8 Strategyfor the Future............................................................ 8 StaffTraining and CPE.......,....,_..,..._,._~,_,,,~,,,~,,,~~,~^~ 8 ResultsofPeer Review............................................................. 8 ContactInformation................................................................ 8 PeerReview Opinion......................................................................... 9 ProposedCost.................................................................................. 10 Appendix A: Rates Per Classification....,,....—_...—._,.......,.,...~~...._.. 11 Denning, Downey & Associates, P.C. CERTIFIED PUBLIC ACCOUNTANTS P.O.Box 1957 Kalispell, IIT 5990.3-/957 (406) 756-6879-FAX(406)257-7879-E-Had dda(_ddauditxonl Kim M Downey, CPA, C,GFM, CFF, CITP Robert K. Denning, CPA, CGFAI, CFF, CITP April 15, 2014 City of Bozeman Attn: Stacey Ulmen, CMC, City Clerk PO Box 1230 Bozeman, MT. 59771-1230 Dear Ms. Ulmen: We are pleased to present our proposal for an audit of the financial statements of the City of Bozeman. In addition, our proposal includes the preparation of the government-wide and fund level financial statements, the combining and combined financial statements, notes to the financial statements, and schedule of expenditures of federal awards. We understand the City will complete a preliminary close of its accounting system by the 2'd week in September. We will then begin work on completion of the required financial statements and field audit. Assuming the City's above stated timeline is met, and no unforeseen problems are encountered we will submit the auditor's report by the first Monday in December. We will perform a financial audit in accordance with generally accepted auditing standards; the standards for financial audit contained in Government Auditing Standards, issued by the U.S. General Accounting Office. If we are contracted to perform a federal audit, we will perform a financial audit in accordance with accounting standards generally accepted in the United States of America; the standard for financial audit contained in Government Auditing Standards, issued by the U.& Governmental Accountability Office and the Single Audit Act of as amended in 1996 and the provisions of OMB Circular A-133, "Audits of State and Local Government and Non-Profit Organizations." Our proposal assumes that the financial statements are complete and in balance, and that unusual problems will not be encountered during the audit. If, during the course of the audit, material errors or theft is encountered, we will consult with you and mutually agree as to the extent and cost of any additional work required. This proposal does not include an audit of any component unit or related districts as required by GASB 414 or 439. We appreciate the opportunity to present this proposal. Should you have any questions regarding this proposal, or any other financial matter, please do not hesitate to call. Upon acceptance of this proposal, please contact our office and we will promptly send an engagement letter or a standard audit contract. Denning, Downey and Associates, P.C. does not and 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 and we also recognize the eventual contract will contain a provision prohibiting discrimination as described above and that this prohibition on discrimination shall apply to the hiring and treatment of the submitting entity's employees and to all sub contracts, Sincerely, ZA Kim M.YDoey, CPA, CGFM, CFF, CITP Denning, Downey & Associates, CPA's, P.C. KD/sh -2- tt 4 State of Montana This certificate vermes Licensure as: 'F�ust�ness Standards IJivision FIRM ° Bdar of Public Accountants Person In Charge KIM DOWNEY _ w . —PAC FIRM-LIC-840 MR:x ; Active 1=x 3/31/2015 DENNING DOWNEY AND ASSOCIATES CTAS PC PG BOX 1951 KALISPELL, MT 5990 RENEW ORWERJF)'YOUR LICENSE Ar. http>:tleb iz,Mr.DWP01/ Company Profile, Staff Qualifications and Experience Firm Profile: Denning, Downey and Associates, CPA's PC started business in January 1994 with a focus on servicing Montana local ,governments and school districts complex and continually changing accounting and auditing needs. 20 years later, Montana local government's accounting needs still account for 100% of our business. We have offices located in Kalispell and Helena Montana. A summary of the staff positions are detailed below: Audit Division (100% of total firm revenues Shareholders 2 Audit Managers 1 Audit Seniors 1 Professional audit staff 4 Paraprofessional staff 4 Support staff a Total audit division 15 Experience: In the past year we audited • 16 of the 56 Counties, • 17 of the 91 Cities and Towns, and 50 of the 218 School Districts • 18 Other Districts and Component Units M 2 of the 3 State Community Colleges of the State of Montana govenunents that are required to have audits per the .Montana Department of Administration audit status report. Those numbers represent 24% of the audited local governments in Montana. Our audit staff of 15 is responsible for auditing more Montana local governments than any other firm in the State. Reference: The following is a partial list of our clients in the last 5 years; please feel free to contact any of them for a reference. Counties Beaverhead County Lincoln County Broadwater County Madison County Garfield County Pondera County Hill County Richland County Jefferson County Sanders County Judith Basin County Sheridan County Lake County Sweet Grass County Liberty County Toole County Cities and Towns City of Boulder Town of Browning City of Cut Bank Town of Cascade City of East Helena Town of Chester City of Shelby Town of Eureka City of Sidney Town of Manhattan City of Whitefish Town of Philipsburg City of Boulder Town of Stanford City of Kalispell Town of Sunburst Town of Twin Bridges Town of Virginia City School Districts Townsend School District Swan Lake-Salmon School District Anaconda School District Augusta School District West Valley School District Troy School District Deer Park School District Libby School District Fair-Mont-Egan School District Eureka School District Swan River School District Fortine School District Kalispell School District McCormick School District Cayuse Prairie School District Sunset School District Helena Flats School District Swan Valley School District lila School District Seeley Lake School District Somers School District Whitewater School District Bigfork School District Stevensville School District Whitefish School District Victor School District Evergreen School District Darby School District Philipsburg School District Lone Rock School District Havre School District Florence-Carlton School District Rocky Boy School District Thompson Falls School District Browning School District Trout Creek School District Belgrade School District Hot Springs School District Ronan School District Smith Valley School District Upper West Shore School District Trego School District Pleasant Valley School District Laurel School District Wolf Point School District Dodson School District -4 - Arlee School District West Yellowstone School District Valley View School District Yaak School District Other Entities Bigfork Rural Fire District Northern Express Transportation Authority Evergreen No I Rural Fire District Madison Valley Rural Fire District Bigfork Water & Sewer District Northern Montana Joint Refuse Disposal District Pablo/Lake County Water & Sewer Flathead Special Education Cooperative Flathead Irrigation District Park County Special Education Cooperative Joint Board of Control Bitterroot Valley Special Education Cooperative Tri-City Interlocal Sanders County Special Education Cooperative Hebgen Basin Fire District Flathead County Water & Sewer District 48 Flathead Irrigation District Flathead County Economic Development Authority -5 - Professional Certifications: Prior to forming Denning, Downey, and Associates, CPA's, P.C., the shareholders, Bob Denning and Kim Downey, both CPA's, are Certified Government Financial Managers (CGFM), Certified in Financial Forensics (CFF), and are Certified Information Technology Professionals (CITP), were local government auditors from the Montana Department of Commerce. Together they bring a total of more than 45 years of Montana local, government expertise to each of our clients. Because our focus is Montana local governments, we are able to provide the highest quality, most comprehensive service in the State of Montana. Key Personnel: Years of Relevant Experience Robert K. Denning, CPA, CGFM, CFF, CITP Bob is a 1987 graduate of Pacific Lutheran University in Tacoma, Washington. Prior to becoming a partner with Denning, Downey & Associates, CPA's, P.C., Bob spent four years with Hughes, Woodring, and Associates of Tacoma, Washington and over two years with Local Government Services Bureau of the Montana State Department of Commerce. While employed with Hughes, Woodring, and Associates, his duties included auditing for-profit, not-for-profit, and government subsidized entities, compilations, reviews, management advisory services, and tax preparation. During his years with Local Government Services, Bob was a senior auditor and served as in- charge auditor of many local government audits. He has performed seminars on GASB 14, 18, 31, and 34. Bob is a member of the Montana Society of CPA's, the Washington society of CPA's, the AICPA, and the Association of Government Accountants (AGA), is a Certified Government Financial Manager, (CGFM), is a Certified in Financial Forensics (CFF) and is a Certified Information Technology Professional (CITP). Governmental Accounting Experience: Bob has amassed in excess of 45,000 hours of governmental audit experience over the past 25 years. Kim M. Downey, CPA, CGFM, CFF, CITP Kim is a 1988 graduate of the University of Montana. She has twenty four years of audit experience all with Montana local governments and school districts. In her career she has performed a variety of services for Montana local governments including consulting, agreed-upon procedures, fraud investigations, financial audits and audits required by the Single Audit Act. She is the partner in charge for school district and single audits. Additional responsibilities at the firm include human resources, the partner in-charge of quality control including technical review of audit reports, and training staff. She is a member of the Montana Society of CPA's, the Washington Society of CPA's, past president and member of the Governmental Accounting, Auditing, Financial Reporting Committee, the AICPA, the Association of Government Accountants (AGA), is a Certified Government Financial Manager (CGFM) is a Certified in Financial Forensics (CFF) and is a Certified Information Technology Professional (CITP). Governmental Accounting Experience: Kim has amassed in excess of 45,000 hours of governmental audit experience over the past 24 years. - 6- JohnPaulPoelman, CPA Prior to coming to work for Denning, Downey& Associates, CPAs, P.C. JohnPaul was employed in Alaska auditing local governments. He has over 8 years of audit experience with all types of local governments. He is currently the Senior Auditor at our Helena office. He is a member of the Montana Society of CPA's and the AICPA. Governmental Accounting Experience: JohnPaul has over 10,000 hours of government accounting experience. Methodology Independence: We require that all professional staff members be familiar with, and adhere to, the independence rules, regulations, interpretations, and rulings of the AICPA, the State of Montana Board of Public Accountants, and the U.S. General Accounting Office. Each member of our staff is independent of your entity, and each individual assigned to the audit will sign an independence representation for the engagement. Conflict of interest: Denning, Downey & Associates CPA's PC is aware of and complies with the independence rules of the AICPA, State Board of Accountancy and the U.S. General Accounting Office regarding possible conflicts of interest. Strengths: The strength of our firm lies in our overall auditing expertise. Individually and collectively we have a strong understanding of internal control, both conceptually and the practical aspects; of audit procedures and techniques; of federal program audit requirements; and of state legal compliance requirements. We have a thorough audit review process starting with the assignment of an owner as "In-Charge" of every client, The "In-Charge" ensures that all appropriate audit procedures are performed, the work is complete, and all conclusions are proper. Upon completion of the field work, an overall audit review and technical review of the audit report is performed by our in-house "audit reviewer." The audit reviewer is responsible for informing all audit staff of potential deficiencies in the work performed. Audit Philosophy: Our firm is committed to conducting audits of the highest quality in the most efficient and effective manner possible. Efficiency and effectiveness is gained through extensive experience with similar entities and an organized planning process specifically designed to each individual audit. We are committed to providing technical assistance on an on-going basis. Although we define and utilize the concept of materiality in conducting our audits, we also firmly believe that the internal control work should include all cash collection areas, regardless of the amount collected and some testing should be performed in these areas. Denning, Downey & Associates, CPAs P.C.'s philosophy that audits should be conducted in a friendly, helpful, but completely objective and professional manner has helped us to establish an excellent reputation in our field of expertise. Each audit requires a different approach dependent on our risk assessment and planning process including our assessment of internal controls and compliance requirements relevant to the entity being audited. Relate and Interact: We will establish a professional, friendly, and courteous relationship with your administration and employees. Because of our many years of experience and individual personalities, we will conduct the audit with the least disruption possible to your employees. You will be kept informed on the audit progress and timely informed -7- on any problem or potential problem areas of the audit. All audit findings will .be reviewed and explained to the appropriate individuals. Communication: It is our philosophy to communicate fully with appropriate client personnel at the proper time as the audit progresses. We encourage full discussion of sensitive and complex issues in order to resolve all audit issues. The findings and recommendations, if any, that may be included in the various auditors' reports, including the management letter, will be constructive in nature, intended to be helpful, and informative. Strategy for the Future: The base of our practice is, and will continue to be, in auditing and consulting of Montana local governments. We keep on top of emerging local government and auditing issues by subscribing to the appropriate reference material and by maintaining a complete library. In the past three years we have kept our clients current by providing annual update seminars. Staff training and Continuing Professional Education (CPE): Denning, Downey & Associates CPA's PC is committed to providing training for all staff in order to maintain the highest quality of audit possible. Governmental Auditing Standards requires all staff to have at least 24 hours of CPE related to government accounting every two years. Our firm requires that all professional staff have at least 80 hours of governmental CPE every two years. In addition we require that all non-professional staff have at least 24 hours of governmental CPE annually. A complete listing of courses taken by the shareholders of the firm is available upon request. Results of Peer Review: Our most recent peer review was completed in July 2013, and received an unqualified opinion. A copy of the opinion is provided in this proposal. The Firm has never been the object of RRy disciplinary action. Contact information: Robert K Denning, CPA CGFM, CFF, CITP is the shareholder assigned to your engagement. He will be your main contact, feel free to contact him or Kim Downey C� CPA, CGFM, CFF, CITP shareholder at any time. Bob's Phone Numbers: Office 756-6879 Ext. 101 Cell 253-6208 Home 756-8095 Kim's Phone Numbers-, Office 756-6879 Ext. 102 Cell 253-6210 MA"I&CO. System'Reviewer Report JuOy 31,21713 To the Partners of Deng.Downey&Associates CPAs,PC And the Feer Review Convniitee of the Montana Society of CPAs We have reviewed the system of qu.Wity control for the accatmting ;and auditing praaetice of Denning. Downey&Associates CPAs.PC (the firm.)in effect for the year ended May 31.2013. Our peer review was conducted in aocord> nce with the Standards for Performing and Reporting on Peer Reviews established by the Peer Reeiew Board of the American Institute of Certified Public Accountants. As part of our peeve-review.we considered reviews may regdatary entities,if applicaWe in determining time nature and extent of our procedures. The firm: is resportskife for designing a system of quality conlrod and complying with it to provikie the firm with reasonable assurance of perfomung and reporting in confnnvity with applicable professional standards in all material respects. Our re5porisiba&y is to mess an opinion on the design of the system of equality control and the fsnn's compliance therewith based on our review- The nature. objectives, scope. lunitations of, and the procedures performed in a System Review are deserted in the standards at As required by the standards,engagernents selected for review included engagements perfbaned under GovernitneritAuJd ing Standard's. In our opinion.the system of gxiality control for the accounting and auditing practice of Denning,Downey &Associates CFAs, PC in effect for the year ended May 31, 21713 has been suitaW designed and cornpliedwith to,provide the firm with reasonable assurance of performing and repay ung in conformity with applicable proliessional standardsin alt material respects. Firms can receive a rating of pa,gs„,pass w h deirciaerx)fiesj or Baer. Denning,Downey$Associates,CPAs, PC has reeved a peer review rating of pass. P' '. Magnuson.McHugh F Company,P.A Coeur d'Alene,ID 83814 ;� y i 1 r. err,it '.wdrvr . .?�—.M1 'n„'r. •, iu .i A .�:.� "..�_ ;4 _g_ Denning, Downey & Associates, P.C. CERTIFIED PUBLIC ACCOUNTANTS P.O. Bax 1957 Kalispell, YVIT 59903-1957 (4016) 756-6879•FAX(406)257-7879 E-b4ail dclaoaddaudit.com Kim M Downey, CPA, CGFM, CFF CITP Robert K Denning, CPA, CGFM, CFF, CITP COMPENSATION Fiscal Year Total Hours Total Cost 2014 350 $38,900 2015 350 539,640 Signature of Offici Kim h Do y, CPA Title: Shareholder Firm: De in , Downey and Associates, CPA's, P.C. Date: S ► 10 - Denning, Downey & Associates, P,C. CERTIFIED PUBLIC ACCOUNTANTS P.O. Bax 1957 Kalispell, MT 59903-1957 (406) 756-6879-FAX(406)257-7879-E-Maridclaaddateditcom Kim M. Downey, CPA, CGFM CFF, CITP Robert K Denning, CPA, CGFM CFF, CITP Denning, Downey and Associates, P.C. Kalispell, MT FY 2014 Professional Level Anticipated Hours Rate/Hour Total — Partner 20 200 $4,000 Manager 80 180 $14,400 Senior Accountant 100 100 $10,000 Other Staff Support 150 70 $10,500] Total for services $38,900 FY 2015 Professional Level Anticipated Hours Rate/Hour Total Partner 20 200 $4,000 Manager 80 —183 $14,640 Senior Accountant 100 102 $10,200 Other Staff Support 150 72 $10,800 Total for services $39,640