10 Chavan & Associates Second Amendment with Attachments
PREPARED BY: Eric Lemon
Finance and Accounting Manager
Reviewed by: Town Manager, Town Attorney, and Assistant Town Manager
110 E. Main Street Los Gatos, CA 95030 ● 406-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 2/18/2025 ITEM NO: 10
DATE: February 12, 2025
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Authorize the Town Manager to Execute a Second Amendment with Chavan
& Associates, LLP. to Extend the Contract for One Year, Update the Scope of
the Original Agreement, and Increase Compensation by $56,500 for a Total
Agreement Amount Not to Exceed $189,000
RECOMMENDATION:
Authorize the Town Manager to execute a second amendment with Chavan & Associates, LLP.
to extend the contract for one year, update the scope of the original agreement, and increase
the compensation by $56,500 for a total agreement amount not to exceed $189,000.
BACKGROUND:
In 2021, the Town of Los Gatos issued a Request for Proposal (RFP) for qualified independent
certified public accounting firms to audit its annual financial statement for three fiscal years (FY
2021-22, 2022-23, and 2023-24), with an option to extend the agreement an additional two
fiscal years with Town Council approval.
Based upon the proposals, interviews, and reference checks, Town staff, in consultation with
the Finance Commission, selected Chavan & Associates, LLP. On December 21, 2021, the Town
Council received the Finance Commission’s recommendation and authorized the Town
Manager to execute a three-year agreement with Chavan & Associates, LLP.
On April 2, 2024, the Council approved the first amendment to the agreement which updated
the scope of services and compensation in the contract to include required Transportation
Development Act Audits.
PAGE 2 OF 3 SUBJECT: Chavan & Associates Agreement DATE: February 12, 2025
DISCUSSION:
With this second amendment, the Town requests to extend the agreement with Chavan &
Associates, LLP for an optional one-year term and amend the agreement to update the scope,
term, and compensation sections.
The Firm charged for additional services ($4,000) for the FY 2023-24 Annual Comprehensive
Financial Report’s (ACFR) Management, Discussion, and Analysis (MD&A) section and extra
meetings the Partner prepared for and attended, which were based on the hourly rate provided
in the original engagement letter. The additional charges are included in the amended not to
exceed amount.
CONCLUSION:
Staff recommends the Council authorize the Town Manager to execute a second amendment
with Chavan & Associates, LLP. to extend the contract for one year, update the scope of the
original agreement, and increase the compensation by $56,500 for a total agreement amount
not to exceed $189,000.
FISCAL IMPACT:
There is no fiscal impact for the year FY 2024-25. In the subsequent year, charges will be
included in the proposed Operating and Capital Budget.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachments:
1. Second Amendment with Chavan & Associates, LLP
2. Engagement Letter – FY 2024-25 Town Audit
3. Engagement Letter – FY 2024-25 TDA
4. First Amendment with Chavan & Associates, LLP
5. Original Agreement with Chavan & Associates, LLP
1 of 2 Chavan & Associates, LLP. – Second Amendment
2nd AMENDMENT TO AGREEMENT
This AMENDMENT TO AGREEMENT is dated for identification this 12th day of February, 2025 and amends that certain agreement for Auditing Services dated 1/12/2022, made by and between the Town of Los Gatos, ("Town,") and the Chavan & Associates, LLP. (“Consultant.”) RECITALS
A. Town and Consultant entered into an Auditing Services Agreement on 1/12/2022,
(“Agreement”), a copy of which is attached hereto and incorporated by reference as
Attachment 5 to this Amendment.
B. Town and Consultant entered into a 1st Amendment to the Agreement on 4/2/2024,
(“Agreement”), a copy of which is attached hereto and incorporated by reference as
Attachment 4 to this Amendment.
C. Town desires to amend the Agreement to update the scope of work, term and time of
performance, and compensation sections.
AMENDMENT 1. Section 2.1, “Scope of Services” is amended to include the additional services described in that certain proposal sent to the Town on October 8, 2021, Engagement Letter dated
March 25, 2024, Engagement Letter dated October 7, 2024, and Engagement Letter dated December 19, 2024, which is hereby incorporated by reference and included as
attachments 5, 4, 3, and 2, respectively. 2. Section 2.2, “Term and Time of Performance is amended to read this contract will remain in effect from 01/01/22 to 01/31/26. 3. Section 2.6, “Compensation” is amended to read Compensation for the consultant’s professional services will be increased by $56,500 for a total agreement that shall not exceed $189,000, inclusive of all costs. Payment shall be based upon Town approval of each task.
4. All other terms and conditions of the Agreement remain in full force and effect. IN WITNESS WHEREOF, the Town and Consultant have executed this Amendment.
Attachment 1
2 of 2
Chavan & Associates, LLP. – Second Amendment
Town of Los Gatos Approved as to Consent:
By: _______________________________ By: ___________________________
Chris Contantin, Town Manager Chavan & Associates, LLP
Department Approval:
_______________________________________
Gitta Ungvari
Director of Finance
Approved as to Form: Attest:
______________________________ ______________________________
Gabrielle Whelan, Town Attorney Wendy Wood, CMC, Town Clerk
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October 7, 2024
Town of Los Gatos
110 E. Main Street
Los Gatos, CA 95030
We are pleased to confirm our understanding of the services we are to provide for the Town of
Los Gatos (the “Town”)for the fiscal year ending June 30, 2025. We will audit the financial
statements of the governmental activities, the business-type activities, each major fund, and the
aggregate remaining fund information of the Town and the related notes to the financial
statements, which collectively comprise the Town’s basic financial statements.In addition, we
will audit the Town’s compliance over major federal award programs, and perform the services
as noted in Exhibit A,as applicable each fiscal year. We are pleased to confirm our acceptance
of this audit engagement by means of this letter.
Our audits will be conducted with the objectives of our expressing an opinion on each opinion
unit and an opinion on compliance regarding the entity’s major federal award programs. The
objectives of our audit of the financial statements are to obtain reasonable assurance about
whether the financial statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance but is not absolute assurance and therefore is not a guarantee that an
audit conducted in accordance with auditing standards generally accepted in the United States of
America (GAAS) and in accordance with Government Auditing Standards (GAGAS), will
always detect a material misstatement when it exists. Misstatements, including omissions, can
arise from fraud or error and are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user
based on the financial statements.
The objectives of our compliance audit are to obtain sufficient appropriate audit evidence to form
an opinion and report at the level specified in the governmental audit requirement about whether
the entity complied in all material respects with the applicable compliance requirements and
identify audit and reporting requirements specified in the governmental audit requirement that are
supplementary to GAAS and Government Auditing Standards, if any, and perform procedures to
address those requirements.
Accounting principles generally accepted in the United States of America, (U.S. GAAP),as
promulgated by the Governmental Accounting Standards Board (GASB), require that the items
noted below be presented to supplement the basic financial statements. Such information,
although not a part of the basic financial statements, is required by the GASB, who considers it to
be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. As part of our engagement, we will
apply certain limited procedures to the required supplementary information (RSI) in accordance
with auditing standards generally accepted in the United States of America, (U.S. GAAS). These
limited procedures will consist primarily of inquiries of management regarding their methods of
Attachment 2
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measurement and presentation and comparing the information for consistency with
management’s responses to our inquiries. We will not express an opinion or provide any form of
assurance on the RSI. The following RSI is required by U.S. GAAP and will be subjected to
certain limited procedures but will not be audited:
1.Management’s discussion and analysis.
2.Major fund budget to actual schedules.
3.Pension schedules.
4.Other postemployment benefit schedules.
Supplementary Information Other than RSI
Supplementary information other than RSI will accompany the Town’s basic financial
statements. We will subject the following supplementary information to the auditing procedures
applied in our audit of the basic financial statements and perform certain additional procedures,
including comparing and reconciling the supplementary information to the underlying accounting
and other records used to prepare the financial statements or to the financial statements
themselves, and additional procedures in accordance with U.S. GAAS.
We intend to provide an opinion on the following supplementary information in relation to the
financial statements as a whole:
1.Nonmajor governmental fund combining balance sheets and statements of revenues,
expenditures and changes in fund balances.
2.Nonmajor budgetary comparison schedules.
3.Proprietary funds combining balance sheets and statements of revenues, expenditures and
changes in net position, and cash flows, as applicable.
4.Fiduciary fund statements, as applicable.
Also, the document we submit to you will include the following other additional information that
will not be subjected to the auditing procedures applied in our audit of the basic financial
statements:
1.ACFR introductory section.
2.Statistical tables.
Schedule of Expenditures of Federal Awards
We will subject the schedule of expenditures of federal awards to the auditing procedures applied
in our audit of the basic financial statements and certain additional procedures, including
comparing and reconciling the schedule to the underlying accounting and other records used to
prepare the financial statements or to the financial statements themselves, and additional
procedures in accordance with auditing standards generally accepted in the United States of
America. We intend to provide an opinion on whether the schedule of expenditures of federal
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awards is presented fairly in all material respects in relation to the financial statements as a
whole.
Data Collection Form
Prior to the completion of our engagement, we will complete the sections of the Data Collection
Form that are our responsibility. The form will summarize our audit findings, amounts and
conclusions. It is management’s responsibility to submit a reporting package including financial
statements, schedule of expenditure of federal awards, summary schedule of prior audit findings
and corrective action plan along with the Data Collection Form to the federal audit clearinghouse.
The financial reporting package must be text searchable, unencrypted, and unlocked. Otherwise,
the reporting package will not be accepted by the federal audit clearinghouse. We will assist you
in the electronic submission and certification. You may request from us copies of our report for
you to include with the reporting package submitted to pass-through entities.
The Data Collection Form is required to be submitted within the earlier of 30 days after receipt
of our auditors’ reports or nine months after the end of the audit period, unless specifically
waived by a federal cognizant or oversight agency for audits. Data Collection Forms submitted
untimely are one of the factors in assessing programs at a higher risk.
Auditor Responsibilities
We will conduct our audit in accordance with GAAS and in accordance with Government
Auditing Standards. As part of an audit in accordance with GAAS and in accordance with
Government Auditing Standards, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of controls.
Obtain an understanding of the system of internal control in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control.2 However, we will communicate to you in
writing concerning any significant deficiencies or material weaknesses in internal control
relevant to the audit of the financial statements that we have identified during the audit.
Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements, including the disclosures, and whether the financial
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statements represent the underlying transactions and events in a manner that achieves fair
presentation.
Conclude, based on the audit evidence obtained, whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the Town’s ability to continue
as a going concern for a reasonable period of time.
Because of the inherent limitations of an audit, together with the inherent limitations of internal
control, an unavoidable risk that some material misstatements or noncompliance may not be
detected exists, even though the audit is properly planned and performed in accordance with
GAAS and Government Auditing Standards of the Comptroller General of the United States of
America. Please note that the determination of abuse is subjective and Government Auditing
Standards does not require auditors to detect abuse.
Our responsibility as auditors is limited to the period covered by our audit and does not extend to
any other periods.
Compliance with Laws and Regulations
As previously discussed, as part of obtaining reasonable assurance about whether the basic
financial statements are free of material misstatement, we will perform tests of [Entity Name]’s
compliance with the provisions of applicable laws, regulations, contracts, and agreements.
However, the objective of our audit will not be to provide an opinion on overall compliance and
we will not express such an opinion.
Audit of Major Program Compliance
Our audit of the Town’s major federal award program(s) compliance will be conducted in
accordance with the requirements of the Single Audit Act, as amended; and the provisions of
U.S. Office of Management and Budget’s (OMB)Uniform Guidance;and will include tests of
accounting records, a determination of major programs in accordance with Uniform Guidance,
and other procedures we consider necessary to enable us to express such an opinion on major
federal award program compliance and to render the required reports. We cannot provide
assurance that an unmodified opinion on compliance will be expressed. Circumstances may arise
in which it is necessary for us to modify our opinion or withdraw from the engagement.
The Uniform Guidance requires that we also plan and perform the audit to obtain reasonable
assurance about whether material noncompliance with applicable laws and regulations, the
provisions of contracts and grant agreements applicable to major federal award programs, and the
applicable compliance requirements occurred, whether due to fraud or error, and express an
opinion on the entity’s compliance based on the audit. Reasonable assurance is a high level of
assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in
accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always
detect material noncompliance when it exists. The risk of not detecting material noncompliance
resulting from fraud is higher than for that resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
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Noncompliance with the compliance requirements is considered material if there is a substantial
likelihood that, individually or in the aggregate, it would influence the judgment made by a
reasonable user of the report on compliance about the entity’s compliance with the requirements
of the federal programs as a whole.
As part of a compliance audit in accordance with GAAS and in accordance with Government
Auditing Standards, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also identify and assess the risks of material noncompliance, whether
due to fraud or error, and design and perform audit procedures responsive to those risks.
Our procedures will consist of determining major federal programs and, performing the
applicable procedures described in the U.S. Office of Management and Budget OMB
Compliance Supplement for the types of compliance requirements that could have a direct and
material effect on each of the entity’s major programs, and performing such other procedures as
we considers necessary in the circumstances. The purpose of those procedures will be to express
an opinion on the entity’s compliance with requirements applicable to each of its major programs
in our report on compliance issued pursuant to the Uniform Guidance.
Also, as required by the Uniform Guidance, we will obtain an understanding of the entity’s
internal control over compliance relevant to the audit in order to design and perform tests of
controls to evaluate the effectiveness of the design and operation of controls that we consider
relevant to preventing or detecting material noncompliance with compliance requirements
applicable to each of the entity’s major federal award programs. Our tests will be less in scope
than would be necessary to render an opinion on these controls and, accordingly, no opinion will
be expressed in our report. However, we will communicate to you, regarding, among other
matters, the planned scope and timing of the audit and any significant deficiencies and material
weaknesses in internal control over compliance that we have identified during the audit.
We will issue a report on compliance that will include an opinion or disclaimer of opinion
regarding the entity’s major federal award programs, and a report on internal controls over
compliance that will report any significant deficiencies and material weaknesses identified;
however, such report will not express an opinion on internal control.
Management’s Responsibilities
Our audit will be conducted on the basis that management acknowledge and understand that they
have responsibility:
1.For the preparation and fair presentation of the financial statements in accordance with
accounting principles generally accepted in the United States of America;
2.For the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material
misstatement, whether due to error fraudulent financial reporting, misappropriation of assets,
or violations of laws, governmental regulations, grant agreements, or contractual agreements;
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3.For identifying, in its accounts,all federal awards received and expended during the period
and the federal programs under which they were received;
4.For maintaining records that adequately identify the source and application of funds for
federally funded activities;
5.For preparing the schedule of expenses of federal awards (including notes and noncash
assistance received) in accordance with the Uniform Guidance requirements;
6.For designing, implementing, and maintaining effective internal control over federal awards
that provides reasonable assurance that the entity is managing federal awards in compliance
with federal statutes, regulations, and the terms and conditions of the federal awards;;
7.For identifying and ensuring that the Town complies with laws, regulations, grants, and
contracts applicable to its activities and its federal award programs and implementing
systems designed to achieve compliance with applicable laws, regulations, grants, and
contracts applicable to activities and its federal award programs;
8.For disclosing accurately, currently, and completely the financial results of each federal
award in accordance with the requirements of the award;
9.For identifying and providing report copies of previous audits, attestation engagements, or
other studies that directly relate to the objectives of the audit, including whether related
recommendations have been implemented;
10.For taking prompt action when instances of noncompliance are identified;
11.For addressing the findings and recommendations of auditors, for establishing and
maintaining a process to track the status of such findings and recommendations and taking
corrective action on reported audit findings from prior periods and preparing a summary
schedule of prior audit findings;
12.For following up and taking corrective action on current year audit findings and preparing a
corrective action plan for such findings;
13.For submitting the reporting package and data collection form to the appropriate parties;
14.For making the auditor aware of any significant vendor / contractor relationships where the
vendor / contractor is responsible for program compliance;
15.To provide us with:
a.Access to all information of which management is aware that is relevant to the
preparation and fair presentation of the financial statements, and relevant to federal award
programs, such as records, documentation, and other matters;
b.Additional information that we may request from management for the purpose of the
audit; and
c.Unrestricted access to persons within the Town from whom we determine it necessary to
obtain audit evidence.
d.A written acknowledgement of all the documents that [management] expects to issue that
will be included in the annual report and the planned timing and method of issuance of
that annual report;4 and
e.A final version of the annual report (including all the documents that, together, comprise
the annual report) in a timely manner prior to the date of the auditor’s report.
16.For including the auditor’s report in any document containing basic financial statements that
indicates that such basic financial statements have been audited by the Town’s auditor;
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17.For adjusting the financial statements to correct material misstatements and confirming to us
in the management representation letter that the effects of any uncorrected misstatements
aggregated by us during the current engagement and pertaining to the current year period(s)
under audit are immaterial, both individually and in the aggregate, to the financial statements
as a whole;
18.For acceptance of nonattest services, including identifying the proper party to oversee
nonattest work;
19.For maintaining adequate records, selecting and applying accounting principles, and
safeguarding assets;
20.For informing us of any known or suspected fraud affecting the Town involving
management, employees with significant role in internal control and others where fraud could
have a material effect on compliance and the financials;
21.For the accuracy and completeness of all information provided;
22.For taking reasonable measures to safeguard protected personally identifiable and other
sensitive information; and
23.For confirming your understanding of your responsibilities as defined in this letter to us in
your management representation letter.
With regard to the supplementary information and schedule of expenditures of federal awards
(SEFA) referred to above, you acknowledge and understand your responsibility (a) for the
preparation of the supplementary information and SEFA in accordance with the applicable
criteria, (b) to provide us with the appropriate written representations regarding the
supplementary information and SEFA, (c) to include our report on the supplementary information
and the SEFA in any document that contains the supplementary information and that indicates
that we have reported on such supplementary information and the SEFA, and (d) to present the
supplementary information and the SEFA with the audited financial statements, or if the
supplementary information and the SEFA will not be presented with the audited financial
statements, to make the audited financial statements readily available to the intended users of the
supplementary information and the SEFA no later than the date of issuance by you of the
supplementary information and the SEFA and our reports thereon.
As part of our audit process, we will request from management, written confirmation concerning
representations made to us in connection with the audit.We understand that your employees will
prepare all confirmations we request and will locate any documents or invoices selected by us for
testing.
If you intend to publish or otherwise reproduce the financial statements and make reference to
our firm, you agree to provide us with printers’ proofs or masters for our review and approval
before printing. You also agree to provide us with a copy of the final reproduced material for our
approval before it is distributed.
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Audit Administration and Fees
Our all-inclusive maximum fee for these services will be as follows (see Exhibit A):
Fiscal year ending June 30, 2025 $48,500
Our fees include out-of-pocket costs (such as report reproduction, word processing, postage,
travel, copies, telephone, etc.).
Our standard hourly rates vary according to the degree of responsibility involved and the
experience level of the personnel assigned to your audit as follows:
Engagement Partner $300 per hour
Associate Partner $250 per hour
Manager $200 per hour
Senior Auditor $150 per hour
Staff Auditor $125 per hour
Administrative $100 per hour
Our invoices for these fees will be rendered each month as work progresses and are payable on
presentation. In accordance with our firm policies, work may be suspended if your account
becomes thirty days or more overdue and may not be resumed until your account is paid in full. If
we elect to terminate our services for nonpayment, our engagement will be deemed to have been
completed upon written notification of termination, even if we have not completed our report.
You will be obligated to compensate us for all time expended and to reimburse us for all out-of-
pocket costs through the date of termination. The above fee is based on anticipated cooperation
from your personnel and the assumption that unexpected circumstances will not be encountered
during the audit. If cooperation is not provided as anticipated and at a level that hinders the
progress of the services to be provided, we retain the right to terminate the contract for cause
with thirty (30) days’ notice. During that time, the Town will have the opportunity to provide the
cooperation required to complete the audit and C&A may rescind the cancellation.
If the services to be performed by C&A are not performed in an acceptable manner to the Town,
the Town may cancel this contract for cause by providing notice to C&A, giving at least thirty
(30) days’notice of the proposed cancellation and the reasons for same. During that time period,
C&A may seek to bring the performance of services to a level that is acceptable to the Town, and
the Town may rescind the cancellation if such action is in Town’s best interest. Notwithstanding
the above provisions, the Town may, upon the expiration of thirty (30) days written notice to
C&A, terminate the agreement at will. Payment for services or goods received prior to
termination shall be made by the Town provided those goods or services were provided in a
manner acceptable to the Town. Payment for those goods and services shall not be unreasonably
withheld.
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Sheldon Chavan, CPA, is the engagement partner for the audit services specified in this letter.
His responsibilities include supervising Chavan & Associates LLP’s services performed as part
of this engagement and signing or authorizing another qualified firm representative to sign the
audit report.
Other Matters
During the course of the engagement, we may communicate with you or your personnel via fax
or e-mail, and you should be aware that communication in those mediums contains a risk of
misdirected or intercepted communications.
Regarding the electronic dissemination of audited financial statements, including financial
statements published electronically on your Internet website, you understand that electronic sites
are a means to distribute information and, therefore, we are not required to read the information
contained in these sites or to consider the consistency of other information in the electronic site
with the original document.
The audit documentation for this engagement is the property of Chavan & Associates LLP and
constitutes confidential information. However, we may be requested to make certain audit
documentation available to state and federal agencies and the U.S. Government Accountability
Office pursuant to authority given to it by law or regulation, or to peer reviewers. If requested,
access to such audit documentation will be provided under the supervision of Chavan &
Associates LLP’s personnel. Furthermore, upon request, we may provide copies of selected audit
documentation to these agencies and regulators. The regulators and agencies may intend, or
decide, to distribute the copies of information contained therein to others, including other
governmental agencies. We agree to retain our audit documentation or work papers for a period
of at least seven years from the date of our report.
We will be available during the year to consult with you on financial management and
accounting matters of a routine nature.You agree to inform us of facts that may affect the
financial statements of which you may become aware during the period from the date of the
auditor’s report to the date the financial statements are issued.In accordance with the
requirements of Government Auditing Standards, a copy of our latest external peer review report
of our firm is available upon request or on our website.
During the course of the audit, we may observe opportunities for economy in, or improved
controls over, your operations. We will bring such matters to the attention of the appropriate level
of management, either orally or in writing.
Professional standards prohibit us from being the sole host and/or the sole storage for your
financial and non-financial data. As such, it is your responsibility to maintain your original data
and records and we cannot be responsible to maintain such original information. By signing this
engagement letter, you affirm that you have all the data and records required to make your books
and records complete.
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Nonattest Services
With respect to any nonattest services we perform, the Town’s management is responsible for (a)
making all management decisions and performing all management functions; (b) assigning a
competent individual to oversee the services; (c) evaluating the adequacy of the services
performed; (d) evaluating and accepting responsibility for the results of the services performed;
and (e) establishing and maintaining internal controls, including monitoring ongoing activities.
Nonattest services include the preparation of the audited financial statements, note disclosures,
supplemental information (as noted above), the schedule of expenditures of federal awards,the
data collection form, the state controller’s annual reports;statistical schedules that are derived
from the audited financial statements. These items will be prepared from information prepared
and provided by the Town during our audit, such as the Town’s trial balance.
We will not assume management responsibilities on behalf of the Town. However, we will
provide advice and recommendations to assist management in performing its responsibilities.
Our responsibilities and limitations of the engagement are as follows:
We will perform the services in accordance with applicable professional standards,
including GAAS, GAGAS and Uniform Guidance as previously noted.
The nonattest services are limited to the services previously outlined. Our firm, in its sole
professional judgment, reserves the right to refuse to do any procedure or take any action
that could be construed as making management decisions or assuming management
responsibilities, including determining account coding and approving journal entries. Our
firm will advise the Town with regard to the nonattest services provided, but the Town
must make all decisions with regard to those matters.
Government Auditing Standards require that we document an assessment of the skills,
knowledge, and experience of management, should we participate in any form of preparation of
the basic financial statements and related schedules or disclosures as these actions are deemed a
non-audit service.
Reporting
We will issue a written report upon completion of our audit of the Town’s basic financial
statements. Our report will be addressed to the Town Council. Circumstances may arise in which
our report may differ from its expected form and content based on the results of our audit.
Depending on the nature of these circumstances, it may be necessary for us to modify our
opinions, add an emphasis-of-matter or other-matter paragraph(s) to our auditor’s report, or if
necessary, withdraw from the engagement. If our opinions on the basic financial statements are
other than unmodified, we will discuss the reasons with you in advance. If, for any reason, we are
unable to complete the audit or are unable to form or have not formed opinions, we may decline
to express opinions or to issue a report as a result of this engagement.
Page | 11 16450 Monterey Road, Ste. 5, Morgan Hill, CA 95037
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In accordance with the requirements of Government Auditing Standards, we will also issue a
written report describing the scope of our testing over internal control over financial reporting
and over compliance with laws, regulations, and provisions of grants and contracts, including the
results of that testing. However, providing an opinion on internal control and compliance over
financial reporting will not be an objective of the audit and, therefore, no such opinion will be
expressed.
At the conclusion of our audit engagement, we will communicate to management and the Council
the following significant items from the audit:
Our view about the qualitative aspects of the Town’s significant accounting practices;
Significant difficulties, if any, encountered during the audit;
Uncorrected misstatements, other than those we believe are trivial, if any;
Disagreements with management, if any;
Other findings or issues, if any, arising from the audit that are, in our professional
judgment, significant and relevant to those charged with governance regarding their
oversight of the financial reporting process;
Material, corrected misstatements that were brought to the attention of management as a
result of our audit procedures;
Representations we requested from management;
Management’s consultations with other accountants, if any; and
Significant issues, if any, arising from the audit that were discussed, or the subject of
correspondence, with management.
If the foregoing is in accordance with your understanding, please indicate your agreement by
signing this letter and emailing it to us at info@cnallp.com. If you have any questions, please let
us know.
We appreciate the opportunity to be your financial statement auditors and look forward to
working with you and your staff.
Very truly yours,
Sheldon Chavan, CPA, Managing Partner
Chavan & Associates, LLP
Page | 12 16450 Monterey Road, Ste. 5, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com •www.cnallp.com
RESPONSE:
This letter correctly sets forth the understanding of the Town of Los Gatos.
Signature:
Title:
Date:
Page | 13 16450 Monterey Road, Ste. 5, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com •www.cnallp.com
Exhibit A
Services Hours 2025
Town Audit 340 34,000$
Single Audit 30 3,000
GANN Limit 4 500
ACFR Preparation 48 6,000
Consulting, Updates and Guidance N/A Included
Present Reports to Board and Committees N/A Included
Conversion Entries N/A Included
Subtotal Base Audit 422 43,500
Annual Financial Transactions Report 16 2,250
Measure G AUP 24 2,750
Total All-Inclusive Maximum Price 462 48,500$
Page | 1 16450 Monterey Road, Ste. 5, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
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December 19, 2024
Town of Los Gatos
110 E. Main Street
Los Gatos, CA 95030
We are pleased to confirm our understanding of the services we are to provide for the Town of
Los Gatos (the “Town”)for the fiscal year ending June 30, 2025.We will audit the
Transportation Development Act (TDA) financial statements and the related notes to the TDA
financial statements for each fiscal year then ended. This includes the annual fiscal audit as
required by PUC Section 99245. Our audit will be conducted with the objective of our
expressing an opinion on each opinion unit and an opinion on compliance regarding the Town’s
compliance with the regulations of the Transportation Development Act, including section 6666
of Title 21, of the California Code of Regulations, and the allocation instructions and resolutions
of the Metropolitan Transportation Commission.
Audit of the Financial Statements
We will conduct our audit in accordance with auditing standards generally accepted in the United
States of America (U.S. GAAS),and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States of
America (GAGAS). Those standards and the Uniform Guidance require that we plan and perform
the audit to obtain reasonable assurance about whether the basic financial statements are free
from material misstatement. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The procedures selected depend on
the auditor’s judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to error, fraudulent financial reporting, misappropriation of
assets, or violations of laws, governmental regulations, grant agreements, or contractual
agreements.
An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.If appropriate, our procedures will therefore
include tests of documentary evidence that support the transactions recorded in the accounts. As
part of our audit process, we will request written representations from your attorneys, and they
may bill you for responding. At the conclusion of our audit, we will also request certain written
representations from you about the financial statements and related matters.
Because of the inherent limitations of an audit, together with the inherent limitations of internal
control, an unavoidable risk that some material misstatements or noncompliance (whether caused
by errors, fraudulent financial reporting, misappropriation of assets, detected abuse, or violations
of laws or governmental regulations) may not be detected exists, even though the audit is
properly planned and performed in accordance with U.S. GAAS and Government Auditing
Standards of the Comptroller General of the United States of America.Please note that the
Attachment 3
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determination of abuse is subjective and Government Auditing Standards does not require
auditors to detect abuse.
In making our risk assessments, we consider internal control relevant to the Town’s preparation
and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Town’s internal control. However, we will communicate to you in writing
concerning any significant deficiencies or material weaknesses in internal control relevant to the
audit of the financial statements that we have identified during the audit.Our responsibility as
auditors is limited to the period(s) covered by our audit and does not extend to any other periods.
We will issue a written report upon completion of our audit of the Town’s basic financial
statements. Our report will be addressed to the governing body of the Town. We cannot provide
assurance that unmodified opinions will be expressed. Circumstances may arise in which it is
necessary for us to modify our opinions or add emphasis-of-matter or other-matter paragraphs. If
our opinions on the basic financial statements are other than unmodified, we will discuss the
reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable
to form or have not formed opinions, we may decline to express opinions or to issue a report as a
result of this engagement.
In accordance with the requirements of Government Auditing Standards, we will also issue a
written report describing the scope of our testing over internal control over financial reporting
and over compliance with laws, regulations, and provisions of grants and contracts, including the
results of that testing. However, providing an opinion on internal control and compliance over
financial reporting will not be an objective of the audit and, therefore, no such opinion will be
expressed.We also will perform tests and procedures required by the regulations of the
Transportation Development Act, including section 6666 of Title 21, of the California Code of
Regulations, and the allocation instructions and resolutions of the Metropolitan Transportation
Commission.
Audit of TDA Compliance
Our audit of the Town’s compliance will be made in accordance with the requirements of the
regulations of the Transportation Development Act, including section 6666 of Title 21, of the
California Code of Regulations, and the allocation instructions and resolutions of the
Metropolitan Transportation Commission; and will include tests of accounting records and other
procedures we consider necessary to enable us to express such an opinion on TDA program
compliance and to render the required reports. We cannot provide assurance that an unmodified
opinion on compliance will be expressed. Circumstances may arise in which it is necessary for us
to modify our opinion or withdraw from the engagement.
Page | 3 16450 Monterey Road, Ste. 5, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com •www.cnallp.com
Management’s Responsibilities
Our audit will be conducted on the basis that management acknowledge and understand that they
have responsibility:
1.For the preparation and fair presentation of the financial statements in accordance with
accounting principles generally accepted in the United States of America;
2.For the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material
misstatement, whether due to error fraudulent financial reporting, misappropriation of assets,
or violations of laws, governmental regulations, grant agreements, or contractual agreements;
3.For identifying, in its accounts,all TDA awards received and expended during the period and
the TDA programs under which they were received.
4.For maintaining records that adequately identify the source and application of funds for TDA
funded activities;
5.For the design, implementation, and maintenance of internal control over TDA awards;
6.For establishing and maintaining effective internal control over TDA awards that provides
reasonable assurance that the Town is managing TDA awards in compliance with section
6666 of Title 21, of the California Code of Regulations, and the allocation instructions and
resolutions of the Metropolitan Transportation Commission;
7.For identifying and ensuring that the Town complies with laws, regulations, grants, and
contracts applicable to its activities and its TDA award programs and implementing systems
designed to achieve compliance with applicable laws, regulations, grants, and contracts
applicable to activities and its TDA award programs;
8.For disclosing accurately, currently, and completely the financial results of each TDA award
in accordance with the requirements of the award;
9.For identifying and providing report copies of previous audits, attestation engagements, or
other studies that directly relate to the objectives of the audit, including whether related
recommendations have been implemented;
10.For taking prompt action when instances of noncompliance are identified;
11.For addressing the findings and recommendations of auditors, for establishing and
maintaining a process to track the status of such findings and recommendations and taking
corrective action on reported audit findings from prior periods and preparing a summary
schedule of prior audit findings;
12.For following up and taking corrective action on current year audit findings and preparing a
corrective action plan for such findings;
13.For submitting the reporting package to the appropriate parties;
14.For making the auditor aware of any significant vendor / contractor relationships where the
vendor / contractor is responsible for program compliance;
15.To provide us with:
a.Access to all information of which management is aware that is relevant to the
preparation and fair presentation of the financial statements, and relevant to federal award
programs, such as records, documentation, and other matters;
Page | 4 16450 Monterey Road, Ste. 5, Morgan Hill, CA 95037
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b.Additional information that we may request from management for the purpose of the
audit; and
c.Unrestricted access to persons within the Town from whom we determine it necessary to
obtain audit evidence.
16.For including the auditor’s report in any document containing basic financial statements that
indicates that such basic financial statements have been audited by the Town’s auditor;
17.For adjusting the financial statements to correct material misstatements and confirming to us
in the management representation letter that the effects of any uncorrected misstatements
aggregated by us during the current engagement and pertaining to the current year period(s)
under audit are immaterial, both individually and in the aggregate, to the financial statements
as a whole;
18.For acceptance of nonattest services, including identifying the proper party to oversee
nonattest work;
19.For maintaining adequate records, selecting and applying accounting principles, and
safeguarding assets;
20.For informing us of any known or suspected fraud affecting the Town involving
management, employees with significant role in internal control and others where fraud could
have a material effect on compliance and the financial statements;
21.For the accuracy and completeness of all information provided;
22.For taking reasonable measures to safeguard protected personally identifiable and other
sensitive information; and
23.For confirming your understanding of your responsibilities as defined in this letter to us in
your management representation letter.
As part of our audit process, we will request from management, written confirmation concerning
representations made to us in connection with the audit.We understand that your employees will
prepare all confirmations we request and will locate any documents or invoices selected by us for
testing.
If you intend to publish or otherwise reproduce the financial statements and make reference to
our firm, you agree to provide us with printers’ proofs or masters for our review and approval
before printing. You also agree to provide us with a copy of the final reproduced material for our
approval before it is distributed.
Audit Administration and Fees
Our all-inclusive maximum fee for these services will be as follows:
Fiscal year ending June 30, 2025 $4,000
Our fees include out-of-pocket costs (such as report reproduction, word processing, postage,
travel, copies, telephone, etc.).
Page | 5 16450 Monterey Road, Ste. 5, Morgan Hill, CA 95037
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info@cnallp.com •www.cnallp.com
Our standard hourly rates vary according to the degree of responsibility involved and the
experience level of the personnel assigned to your audit as follows:
Engagement Partner $300 per hour
Associate Partner $250 per hour
Manager $200 per hour
Senior Auditor $150 per hour
Staff Auditor $125 per hour
Administrative $100 per hour
Our invoices for these fees will be rendered each month as work progresses and are payable on
presentation. In accordance with our firm policies, work may be suspended if your account
becomes thirty days or more overdue and may not be resumed until your account is paid in full. If
we elect to terminate our services for nonpayment, our engagement will be deemed to have been
completed upon written notification of termination, even if we have not completed our report.
You will be obligated to compensate us for all time expended and to reimburse us for all out-of-
pocket costs through the date of termination. The above fee is based on anticipated cooperation
from your personnel and the assumption that unexpected circumstances will not be encountered
during the audit. If cooperation is not provided as anticipated and at a level that hinders the
progress of the services to be provided, we retain the right to terminate the contract for cause
with thirty (30) days’ notice. During that time, the Town will have the opportunity to provide the
cooperation required to complete the audit and C&A may rescind the cancellation.
If the services to be performed by C&A are not performed in an acceptable manner to the Town,
the Town may cancel this contract for cause by providing notice to C&A, giving at least thirty
(30) days’notice of the proposed cancellation and the reasons for same. During that time period,
C&A may seek to bring the performance of services to a level that is acceptable to the Town, and
the Town may rescind the cancellation if such action is in Town’s best interest. Notwithstanding
the above provisions, the Town may, upon the expiration of thirty (30) days written notice to
C&A, terminate the agreement at will. Payment for services or goods received prior to
termination shall be made by the Town provided those goods or services were provided in a
manner acceptable to the Town. Payment for those goods and services shall not be unreasonably
withheld.
Sheldon Chavan, CPA, is the engagement partner for the audit services specified in this letter.
His responsibilities include supervising Chavan & Associates LLP’s services performed as part
of this engagement and signing or authorizing another qualified firm representative to sign the
audit report.
Other Matters
During the course of the engagement, we may communicate with you or your personnel via fax
or e-mail, and you should be aware that communication in those mediums contains a risk of
misdirected or intercepted communications.
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Regarding the electronic dissemination of audited financial statements, including financial
statements published electronically on your Internet website, you understand that electronic sites
are a means to distribute information and, therefore, we are not required to read the information
contained in these sites or to consider the consistency of other information in the electronic site
with the original document.
The audit documentation for this engagement is the property of Chavan & Associates LLP and
constitutes confidential information. However, we may be requested to make certain audit
documentation available to state and federal agencies and the U.S. Government Accountability
Office pursuant to authority given to it by law or regulation, or to peer reviewers. If requested,
access to such audit documentation will be provided under the supervision of Chavan &
Associates LLP’s personnel. Furthermore, upon request, we may provide copies of selected audit
documentation to these agencies and regulators. The regulators and agencies may intend, or
decide, to distribute the copies of information contained therein to others, including other
governmental agencies. We agree to retain our audit documentation or work papers for a period
of at least seven years from the date of our report.
We will be available during the year to consult with you on financial management and
accounting matters of a routine nature.You agree to inform us of facts that may affect the
financial statements of which you may become aware during the period from the date of the
auditor’s report to the date the financial statements are issued.
With respect to any nonattest services we perform, the Town’s management is responsible for (a)
making all management decisions and performing all management functions; (b) assigning a
competent individual to oversee the services; (c) evaluating the adequacy of the services
performed; (d) evaluating and accepting responsibility for the results of the services performed;
and (e) establishing and maintaining internal controls, including monitoring ongoing activities.
Nonattest services include the preparation of the audited financial statements and note
disclosures. These items will be prepared from information prepared and provided by the Town
during our audit, such as the Town’s trial balance.
We will not assume management responsibilities on behalf of the Town. However, we will
provide advice and recommendations to assist management in performing its responsibilities.
Our responsibilities and limitations of the engagement are as follows:
We will perform the services in accordance with applicable professional standards,
including GAAS and GAGAS.
This engagement is limited to the services previously outlined. Our firm, in its sole
professional judgment, reserves the right to refuse to do any procedure or take any action
that could be construed as making management decisions or assuming management
responsibilities, including determining account coding and approving journal entries. Our
firm will advise the Town with regard to the nonattest services provided, but the Town
must make all decisions with regard to those matters.
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Government Auditing Standards require that we document an assessment of the skills,
knowledge, and experience of management, should we participate in any form of preparation of
the basic financial statements and related schedules or disclosures as these actions are deemed a
non-audit service.
During the course of the audit, we may observe opportunities for economy in, or improved
controls over, your operations. We will bring such matters to the attention of the appropriate level
of management, either orally or in writing.
At the conclusion of our audit engagement, we will communicate to management and the Council
the following significant items from the audit:
Our view about the qualitative aspects of the Town’s significant accounting practices;
Significant difficulties, if any, encountered during the audit;
Uncorrected misstatements, other than those we believe are trivial, if any;
Disagreements with management, if any;
Other findings or issues, if any, arising from the audit that are, in our professional
judgment, significant and relevant to those charged with governance regarding their
oversight of the financial reporting process;
Material, corrected misstatements that were brought to the attention of management as a
result of our audit procedures;
Representations we requested from management;
Management’s consultations with other accountants, if any; and
Significant issues, if any, arising from the audit that were discussed, or the subject of
correspondence, with management.
In accordance with the requirements of Government Auditing Standards, a copy of our latest
external peer review report of our firm is available upon request or on our website.
If the foregoing is in accordance with your understanding, please indicate your agreement by
signing this letter and emailing it to us at info@cnallp.com or follow the DocuSign link in the
email provided. If you have any questions, please let us know.
We appreciate the opportunity to be your financial statement auditors and look forward to
working with you and your staff.
Very truly yours,
Sheldon Chavan, CPA, Managing Partner
Chavan & Associates, LLP
Page | 8 16450 Monterey Road, Ste. 5, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com •www.cnallp.com
RESPONSE:
This letter correctly sets forth the understanding of the Town of Los Gatos.
Signature:
Title:
Date:
1 of 2
Chavan & Associates, LLP. – First Amendment
1st AMENDMENT TO AGREEMENT
This AMENDMENT TO AGREEMENT is dated for identification this 2nd day of April, 2024 and amends that certain agreement for Auditing Services dated 1/12/2022, made by and between the Town of Los Gatos, ("Town,") and the Chavan & Associates, LLP. (“Consultant.”)
RECITALS
A.Town and Consultant entered into an Auditing Services Agreement on 1/12/2022,
(“Agreement”), a copy of which is attached hereto and incorporated by reference as
Attachment 1 to this Amendment.
B.Town desires to amend the Agreement to update the scope of work and compensation
sections.
AMENDMENT
1.Section 2.1, “Scope of Services” is amended to include the additional services described in
that certain proposal sent to the Town on October 8, 2021 and Engagement letter datedMarch 25,2024, which is hereby incorporated by reference and included as attachments 1
and 2, respectively.
2.Section 2.6, “Compensation” is amended to read Compensation for the consultant’sprofessional services will be increased by $15,500 for total agreement that shall not exceed $132,500, inclusive of all costs. Payment shall be based upon Town approval of each task.
3.All other terms and conditions of the Agreement remain in full force and effect.
IN WITNESS WHEREOF, the Town and Consultant have executed this Amendment.
Town of Los Gatos Approved as to Consent:
By: _______________________________ By: ______________________________
Laurel Prevetti, Town Manager Chavan & Associates, LLP
Department Approval:
_______________________________________
Gitta Ungvari
Director of Finance
DocuSign Envelope ID: EBB2886B-AF0D-4565-A90D-225839A6BB75
4/3/2024
4/3/2024
4/8/2024
2 of 2
Chavan & Associates, LLP. – First Amendment
Approved as to Form: Attest:
______________________________ ______________________________
Gabrielle Whelan, Town Attorney Wendy Wood, CMC, Town Clerk
DocuSign Envelope ID: EBB2886B-AF0D-4565-A90D-225839A6BB75
4/8/2024 4/9/2024
Page | 1 15105 Concord Circle, Ste. 130, Morgan Hill, CA 95037
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info@cnallp.com •www.cnallp.com
March 25, 2024
Town of Los Gatos
110 E. Main Street
Los Gatos, CA 95030
We are pleased to confirm our understanding of the services we are to provide for the Town of
Los Gatos (the “Town”)for the fiscal years ending June 30, 2017, 2020, 2021, 2022 and 2024.
We will audit the Transportation Development Act (TDA) financial statements and the related
notes to the TDA financial statements for each fiscal year then ended. This includes the annual
fiscal audit as required by PUC Section 99245. Our audit will be conducted with the objective of
our expressing an opinion on each opinion unit and an opinion on compliance regarding the
Town’s compliance with the regulations of the Transportation Development Act, including
section 6666 of Title 21, of the California Code of Regulations, and the allocation instructions
and resolutions of the Metropolitan Transportation Commission.
Audit of the Financial Statements
We will conduct our audit in accordance with auditing standards generally accepted in the United
States of America (U.S. GAAS),and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States of
America (GAGAS). Those standards and the Uniform Guidance require that we plan and perform
the audit to obtain reasonable assurance about whether the basic financial statements are free
from material misstatement. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The procedures selected depend on
the auditor’s judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to error, fraudulent financial reporting, misappropriation of
assets, or violations of laws, governmental regulations, grant agreements, or contractual
agreements.
An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.If appropriate, our procedures will therefore
include tests of documentary evidence that support the transactions recorded in the accounts. As
part of our audit process, we will request written representations from your attorneys, and they
may bill you for responding. At the conclusion of our audit, we will also request certain written
representations from you about the financial statements and related matters.
Because of the inherent limitations of an audit, together with the inherent limitations of internal
control, an unavoidable risk that some material misstatements or noncompliance (whether caused
by errors, fraudulent financial reporting, misappropriation of assets, detected abuse, or violations
of laws or governmental regulations) may not be detected exists, even though the audit is
properly planned and performed in accordance with U.S. GAAS and Government Auditing
Standards of the Comptroller General of the United States of America.Please note that the
Attachment 2
DocuSign Envelope ID: EBB2886B-AF0D-4565-A90D-225839A6BB75
Page | 2 15105 Concord Circle, Ste. 130, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com •www.cnallp.com
determination of abuse is subjective and Government Auditing Standards does not require
auditors to detect abuse.
In making our risk assessments, we consider internal control relevant to the Town’s preparation
and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Town’s internal control. However, we will communicate to you in writing
concerning any significant deficiencies or material weaknesses in internal control relevant to the
audit of the financial statements that we have identified during the audit.Our responsibility as
auditors is limited to the period(s) covered by our audit and does not extend to any other periods.
We will issue a written report upon completion of our audit of the Town’s basic financial
statements. Our report will be addressed to the governing body of the Town. We cannot provide
assurance that unmodified opinions will be expressed. Circumstances may arise in which it is
necessary for us to modify our opinions or add emphasis-of-matter or other-matter paragraphs. If
our opinions on the basic financial statements are other than unmodified, we will discuss the
reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable
to form or have not formed opinions, we may decline to express opinions or to issue a report as a
result of this engagement.
In accordance with the requirements of Government Auditing Standards, we will also issue a
written report describing the scope of our testing over internal control over financial reporting
and over compliance with laws, regulations, and provisions of grants and contracts, including the
results of that testing. However, providing an opinion on internal control and compliance over
financial reporting will not be an objective of the audit and, therefore, no such opinion will be
expressed.We also will perform tests and procedures required by the regulations of the
Transportation Development Act, including section 6666 of Title 21, of the California Code of
Regulations, and the allocation instructions and resolutions of the Metropolitan Transportation
Commission.
Audit of TDA Compliance
Our audit of the Town’s compliance will be made in accordance with the requirements of the
regulations of the Transportation Development Act, including section 6666 of Title 21, of the
California Code of Regulations, and the allocation instructions and resolutions of the
Metropolitan Transportation Commission; and will include tests of accounting records and other
procedures we consider necessary to enable us to express such an opinion on TDA program
compliance and to render the required reports. We cannot provide assurance that an unmodified
opinion on compliance will be expressed. Circumstances may arise in which it is necessary for us
to modify our opinion or withdraw from the engagement.
DocuSign Envelope ID: EBB2886B-AF0D-4565-A90D-225839A6BB75
Page | 3 15105 Concord Circle, Ste. 130, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com •www.cnallp.com
Management’s Responsibilities
Our audit will be conducted on the basis that management acknowledge and understand that they
have responsibility:
1.For the preparation and fair presentation of the financial statements in accordance with
accounting principles generally accepted in the United States of America;
2.For the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material
misstatement, whether due to error fraudulent financial reporting, misappropriation of assets,
or violations of laws, governmental regulations, grant agreements, or contractual agreements;
3.For identifying, in its accounts,all TDA awards received and expended during the period and
the TDA programs under which they were received.
4.For maintaining records that adequately identify the source and application of funds for TDA
funded activities;
5.For the design, implementation, and maintenance of internal control over TDA awards;
6.For establishing and maintaining effective internal control over TDA awards that provides
reasonable assurance that the Town is managing TDA awards in compliance with section
6666 of Title 21, of the California Code of Regulations, and the allocation instructions and
resolutions of the Metropolitan Transportation Commission;
7.For identifying and ensuring that the Town complies with laws, regulations, grants, and
contracts applicable to its activities and its TDA award programs and implementing systems
designed to achieve compliance with applicable laws, regulations, grants, and contracts
applicable to activities and its TDA award programs;
8.For disclosing accurately, currently, and completely the financial results of each TDA award
in accordance with the requirements of the award;
9.For identifying and providing report copies of previous audits, attestation engagements, or
other studies that directly relate to the objectives of the audit, including whether related
recommendations have been implemented;
10.For taking prompt action when instances of noncompliance are identified;
11.For addressing the findings and recommendations of auditors, for establishing and
maintaining a process to track the status of such findings and recommendations and taking
corrective action on reported audit findings from prior periods and preparing a summary
schedule of prior audit findings;
12.For following up and taking corrective action on current year audit findings and preparing a
corrective action plan for such findings;
13.For submitting the reporting package to the appropriate parties;
14.For making the auditor aware of any significant vendor / contractor relationships where the
vendor / contractor is responsible for program compliance;
15.To provide us with:
a.Access to all information of which management is aware that is relevant to the
preparation and fair presentation of the financial statements, and relevant to federal award
programs, such as records, documentation, and other matters;
DocuSign Envelope ID: EBB2886B-AF0D-4565-A90D-225839A6BB75
Page | 4 15105 Concord Circle, Ste. 130, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com •www.cnallp.com
b.Additional information that we may request from management for the purpose of the
audit; and
c.Unrestricted access to persons within the Town from whom we determine it necessary to
obtain audit evidence.
16.For including the auditor’s report in any document containing basic financial statements that
indicates that such basic financial statements have been audited by the Town’s auditor;
17.For adjusting the financial statements to correct material misstatements and confirming to us
in the management representation letter that the effects of any uncorrected misstatements
aggregated by us during the current engagement and pertaining to the current year period(s)
under audit are immaterial, both individually and in the aggregate, to the financial statements
as a whole;
18.For acceptance of nonattest services, including identifying the proper party to oversee
nonattest work;
19.For maintaining adequate records, selecting and applying accounting principles, and
safeguarding assets;
20.For informing us of any known or suspected fraud affecting the Town involving
management, employees with significant role in internal control and others where fraud could
have a material effect on compliance and the financial statements;
21.For the accuracy and completeness of all information provided;
22.For taking reasonable measures to safeguard protected personally identifiable and other
sensitive information; and
23.For confirming your understanding of your responsibilities as defined in this letter to us in
your management representation letter.
As part of our audit process, we will request from management, written confirmation concerning
representations made to us in connection with the audit.We understand that your employees will
prepare all confirmations we request and will locate any documents or invoices selected by us for
testing.
If you intend to publish or otherwise reproduce the financial statements and make reference to
our firm, you agree to provide us with printers’ proofs or masters for our review and approval
before printing. You also agree to provide us with a copy of the final reproduced material for our
approval before it is distributed.
Audit Administration and Fees
Our all-inclusive maximum fee for these services will be as follows:
Fiscal year ending June 30, 2017 $2,500
Fiscal year ending June 30, 2020 (Program 1)$2,500
Fiscal year ending June 30, 2020 (Program 2)$2,500
Fiscal year ending June 30, 2021 $500
Fiscal year ending June 30, 2022 $2,500
Fiscal year ending June 30, 2024 $2,500 to $5,000
DocuSign Envelope ID: EBB2886B-AF0D-4565-A90D-225839A6BB75
Page | 5 15105 Concord Circle, Ste. 130, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com •www.cnallp.com
Our fees include out-of-pocket costs (such as report reproduction, word processing, postage,
travel, copies, telephone, etc.).
Our standard hourly rates vary according to the degree of responsibility involved and the
experience level of the personnel assigned to your audit as follows:
Engagement Partner $175 per hour
Associate Partner $125 per hour
Manager $95 per hour
Senior Auditor $80 per hour
Staff Auditor $65 per hour
Administrative $50 per hour
Our invoices for these fees will be rendered each month as work progresses and are payable on
presentation. In accordance with our firm policies, work may be suspended if your account
becomes thirty days or more overdue and may not be resumed until your account is paid in full. If
we elect to terminate our services for nonpayment, our engagement will be deemed to have been
completed upon written notification of termination, even if we have not completed our report.
You will be obligated to compensate us for all time expended and to reimburse us for all out-of-
pocket costs through the date of termination. The above fee is based on anticipated cooperation
from your personnel and the assumption that unexpected circumstances will not be encountered
during the audit. If cooperation is not provided as anticipated and at a level that hinders the
progress of the services to be provided, we retain the right to terminate the contract for cause
with thirty (30) days’ notice. During that time, the Town will have the opportunity to provide the
cooperation required to complete the audit and C&A may rescind the cancellation.
If the services to be performed by C&A are not performed in an acceptable manner to the Town,
the Town may cancel this contract for cause by providing notice to C&A, giving at least thirty
(30)days’notice of the proposed cancellation and the reasons for same. During that time period,
C&A may seek to bring the performance of services to a level that is acceptable to the Town, and
the Town may rescind the cancellation if such action is in Town’s best interest. Notwithstanding
the above provisions, the Town may, upon the expiration of thirty (30) days written notice to
C&A, terminate the agreement at will. Payment for services or goods received prior to
termination shall be made by the Town provided those goods or services were provided in a
manner acceptable to the Town. Payment for those goods and services shall not be unreasonably
withheld.
Sheldon Chavan, CPA, is the engagement partner for the audit services specified in this letter.
His responsibilities include supervising Chavan & Associates LLP’s services performed as part
of this engagement and signing or authorizing another qualified firm representative to sign the
audit report.
DocuSign Envelope ID: EBB2886B-AF0D-4565-A90D-225839A6BB75
Page | 6 15105 Concord Circle, Ste. 130, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com •www.cnallp.com
Other Matters
During the course of the engagement, we may communicate with you or your personnel via fax
or e-mail, and you should be aware that communication in those mediums contains a risk of
misdirected or intercepted communications.
Regarding the electronic dissemination of audited financial statements, including financial
statements published electronically on your Internet website, you understand that electronic sites
are a means to distribute information and, therefore, we are not required to read the information
contained in these sites or to consider the consistency of other information in the electronic site
with the original document.
The audit documentation for this engagement is the property of Chavan & Associates LLP and
constitutes confidential information. However, we may be requested to make certain audit
documentation available to state and federal agencies and the U.S. Government Accountability
Office pursuant to authority given to it by law or regulation, or to peer reviewers. If requested,
access to such audit documentation will be provided under the supervision of Chavan &
Associates LLP’s personnel. Furthermore, upon request, we may provide copies of selected audit
documentation to these agencies and regulators. The regulators and agencies may intend, or
decide, to distribute the copies of information contained therein to others, including other
governmental agencies. We agree to retain our audit documentation or work papers for a period
of at least seven years from the date of our report.
We will be available during the year to consult with you on financial management and
accounting matters of a routine nature.You agree to inform us of facts that may affect the
financial statements of which you may become aware during the period from the date of the
auditor’s report to the date the financial statements are issued.
With respect to any nonattest services we perform, the Town’s management is responsible for (a)
making all management decisions and performing all management functions; (b) assigning a
competent individual to oversee the services; (c) evaluating the adequacy of the services
performed; (d) evaluating and accepting responsibility for the results of the services performed;
and (e) establishing and maintaining internal controls, including monitoring ongoing activities.
Nonattest services include the preparation of the audited financial statements and note
disclosures. These items will be prepared from information prepared and provided by the Town
during our audit, such as the Town’s trial balance.
We will not assume management responsibilities on behalf of the Town. However, we will
provide advice and recommendations to assist management in performing its responsibilities.
Our responsibilities and limitations of the engagement are as follows:
We will perform the services in accordance with applicable professional standards,
including GAAS and GAGAS.
DocuSign Envelope ID: EBB2886B-AF0D-4565-A90D-225839A6BB75
Page | 7 15105 Concord Circle, Ste. 130, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com •www.cnallp.com
This engagement is limited to the services previously outlined. Our firm, in its sole
professional judgment, reserves the right to refuse to do any procedure or take any action
that could be construed as making management decisions or assuming management
responsibilities, including determining account coding and approving journal entries. Our
firm will advise the Town with regard to the nonattest services provided, but the Town
must make all decisions with regard to those matters.
Government Auditing Standards require that we document an assessment of the skills,
knowledge, and experience of management, should we participate in any form of preparation of
the basic financial statements and related schedules or disclosures as these actions are deemed a
non-audit service.
During the course of the audit, we may observe opportunities for economy in, or improved
controls over, your operations. We will bring such matters to the attention of the appropriate level
of management, either orally or in writing.
At the conclusion of our audit engagement, we will communicate to management and the Council
the following significant items from the audit:
Our view about the qualitative aspects of the Town’s significant accounting practices;
Significant difficulties, if any, encountered during the audit;
Uncorrected misstatements, other than those we believe are trivial, if any;
Disagreements with management, if any;
Other findings or issues, if any, arising from the audit that are, in our professional
judgment, significant and relevant to those charged with governance regarding their
oversight of the financial reporting process;
Material, corrected misstatements that were brought to the attention of management as a
result of our audit procedures;
Representations we requested from management;
Management’s consultations with other accountants, if any; and
Significant issues, if any, arising from the audit that were discussed, or the subject of
correspondence, with management.
In accordance with the requirements of Government Auditing Standards, a copy of our latest
external peer review report of our firm is available upon request or on our website.
If the foregoing is in accordance with your understanding, please indicate your agreement by
signing this letter and emailing it to us at info@cnallp.com or follow the DocuSign link in the
email provided. If you have any questions, please let us know.
We appreciate the opportunity to be your financial statement auditors and look forward to
working with you and your staff.
DocuSign Envelope ID: EBB2886B-AF0D-4565-A90D-225839A6BB75
Page | 8 15105 Concord Circle, Ste. 130, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com •www.cnallp.com
Very truly yours,
Sheldon Chavan, CPA, Managing Partner
Chavan & Associates, LLP
RESPONSE:
This letter correctly sets forth the understanding of the Town of Los Gatos.
Signature:
Title:
Date:
DocuSign Envelope ID: EBB2886B-AF0D-4565-A90D-225839A6BB75
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
AGREEMENT FOR CONSULTANT SERVICES
THIS AGREEMENT is made and entered into on 01/12/22 by and between TOWN OF LOS GATOS, a
California municipal corporation, ("Town") and Chavan & Associates, LLP, ("Consultant"), whose
address is 15105 Concord Circle, Suite 130, Morgan Hill CA 95037. This Agreement is made with
reference to the following facts.
I.RECITALS
1.1 The Town desire to engage Consultant to provide professional auditing services.
1.2 The Consultant represents and affirms that it is willing to perform the desired work
pursuant to this Agreement.
1.3 Consultant warrants it possesses the distinct professional skills, qualifications, experience,
and resources necessary to timely perform the services described in this Agreement.
Consultant acknowledges Town has relied upon these warranties to retain Consultant.
2.1
2.2
2.3
2.4
2.5
II.AGREEMENTS
Scope of Services. Consultant shall provide services as described in that certain proposal
sent to the Town on October 8, 2021, which is hereby incorporated by reference and
attached as Attachment 1.
Term and Time of Performance. This contract will remain in effect from 01/01/22 to
01/31/25.
Compliance with Laws. The Consultant shall comply with all applicable laws, codes,
ordinances, and regulations of governing federal, state and local laws. Consultant
represents and warrants to Town that it has all licenses, permits, qualifications and
approvals of whatsoever nature which are legally required for Consultant to practice its
profession. Consultant shall maintain a Town of Los Gatos business license pursuant to
Chapter 14 of the Code of the Town of Los Gatos.
Sole Responsibility. Consultant shall be responsible for employing or engaging all persons
necessary to perform the services under this Agreement.
Information/Report Handling. All documents furnished to Consultant by the Town and all
reports and supportive data prepared by the Consultant under this Agreement are the
Town's property and shall be delivered to the Town upon the completion of Consultant's
services or at the Town's written request. All reports, information, data, and exhibits
prepared or assembled by Consultant in connection with the performance of its services
pursuant to this Agreement are confidential until released by the Town to the public, and
Chavan & Associates -Agreement for Auditing Services Page 1 of6 Attachment 5
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
the Consultant shall not make any of the these documents or information available to any
individual or organization not employed by the Consultant or the Town without the
written consent of the Town before such release. The Town acknowledges that the
reports to be prepared by the Consultant pursuant to this Agreement are for the purpose
of evaluating a defined project, and Town's use of the information contained in the reports
prepared by the Consultant in connection with other projects shall be solely at Town's risk,
unless Consultant expressly consents to such use in writing. Town further agrees that it
will not appropriate any methodology or technique of Consultant which is and has been
confirmed in writing by Consultant to be a trade secret of Consultant.
2.6 Compensation. Compensation for Consultant's professional services shall not exceed
$117,000, inclusive of all costs. Payment shall be based upon Town approval of each task.
2. 7 Billing. Billing shall be monthly by invoice within thirty (30) days of the rendering of the
service and shall be accompanied by a detailed explanation of the work performed by
whom at what rate and on what date. Also, plans, specifications, documents or other
pertinent materials shall be submitted for Town review, even if only in partial or draft
form.
2.8
2.9
Payment shall be net thirty (30) days. All invoices and statements to the Town shall be
addressed as follows:
Invoices:
Town of Los Gatos
Attn: Accounts Payable
P.O. Box 655
Los Gatos, CA 95031-0655
Availability of Records. Consultant shall maintain the records supporting this billing for not
less than three years following completion of the work under this Agreement. Consultant
shall make these records available to authorized personnel of the Town at the Consultant's
offices during business hours upon written request of the Town.
Assignability and Subcontracting. The services to be performed under this Agreement are
unique and personal to the Consultant. No portion of these services shall be assigned or
subcontracted without the written consent of the Town.
2.10 Independent Contractor. It is understood that the Consultant, in the performance of the
work and services agreed to be performed, shall act as and be an independent contractor
and not an agent or employee of the Town. As an independent contractor he/she shall not
obtain any rights to retirement benefits or other benefits which accrue to Town
employee(s). With prior written consent, the Consultant may perform some obligations
under this Agreement by subcontracting, but may not delegate ultimate responsibility for
performance or assign or transfer interests under this Agreement. Consultant agrees to
testify in any litigation brought regarding the subject of the work to be performed under
Chavan & Associates -Agreement for Auditing Services Page2of6
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this Agreement. Consultant shall be compensated for its costs and expenses in preparing
for, traveling to, and testifying in such matters at its then current hourly rates of
compensation, unless such litigation is brought by Consultant or is based on allegations of
Consultant's negligent performance or wrongdoing.
2.11 Conflict of Interest. Consultant understands that its professional responsibilities are solely
to the Town. The Consultant has and shall not obtain any holding or interest within the
Town of Los Gatos. Consultant has no business holdings or agreements with any individual
member of the Staff or management of the Town or its representatives nor shall it enter
into any such holdings or agreements. In addition, Consultant warrants that it does not
presently and shall not acquire any direct or indirect interest adverse to those of the Town
in the subject of this Agreement, and it shall immediately disassociate itself from such an
interest, should it discover it has done so and shall, at the Town's sole discretion, divest
itself of such interest. Consultant shall not knowingly and shall take reasonable steps to
ensure that it does not employ a person having such an interest in this performance of this
Agreement. If after employment of a person, Consultant discovers it has employed a
person with a direct or indirect interest that would conflict with its performance of this
Agreement, Consultant shall promptly notify Town of this employment relationship, and
shall, at the Town's sole discretion, sever any such employment relationship.
2.12 Equal Employment Opportunity. Consultant warrants that it is an equal opportunity
employer and shall comply with applicable regulations governing equal employment
opportunity. Neither Consultant nor its subcontractors do and neither shall discriminate
against persons employed or seeking employment with them on the basis of age, sex,
color, race, marital status, sexual orientation, ancestry, physical or mental disability,
national origin, religion, or medical condition, unless based upon a bona fide occupational
qualification pursuant to the California Fair Employment & Housing Act.
Ill. INSURANCE AND INDEMNIFICATION
3.1 Minimum Scope of Insurance:
i.Consultant agrees to have and maintain, for the duration of the contract,
General Liability insurance policies insuring him/her and his/her firm to an
amount not less than: one million dollars ($1,000,000) combined single
limit per occurrence for bodily injury, personal injury and property damage.
ii. Consultant agrees to have and maintain for the duration of the contract, an
Automobile Liability insurance policy ensuring him/her and his/her staff to
an amount not less than one million dollars ($1,000,000) combined single
limit per accident for bodily injury and property damage.
iii. Consultant shall provide to the Town all certificates of insurance, with
original endorsements effecting coverage. Consultant agrees that all
Chavan & Associates -Agreement for Auditing Services Page3of6
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
3.2
3.3
certificates and endorsements are to be received and approved by the
Town before work commences.
iv.Consultant agrees to have and maintain, for the duration of the contract,
professional liability insurance in amounts not less than $1,000,000 which is
sufficient to insure Consultant for professional errors or omissions in the
performance of the particular scope of work under this agreement.
General Liability:
i.The Town, its officers, officials, employees and volunteers are to be covered
as insured as respects: liability arising out of activities performed by or on
behalf of the Consultant; products and completed operations of Consultant,
premises owned or used by the Consultant. This requirement does not
apply to the professional liability insurance required for professional errors
and omissions.
ii.The Consultant's insurance coverage shall be primary insurance as respects
the Town, its officers, officials, employees and volunteers. Any insurance or
self-insurances maintained by the Town, its officers, officials, employees or
volunteers shall be excess of the Consultant's insurance and shall not
contribute with it.
iii.Any failure to comply with reporting provisions of the policies shall not
affect coverage provided to the Town, its officers, officials, employees or
volunteers.
iv.The Consultant's insurance shall apply separately to each insured against
whom a claim is made or suit is brought, except with respect to the limits of
the insurer's liability.
All Coverages. Each insurance policy required in this item shall be endorsed to state that
coverage shall not be suspended, voided, cancelled, reduced in coverage or in limits except
after thirty (30) days' prior written notice by certified mail, return receipt requested, has
been given to the Town. Current certification of such insurance shall be kept on file at all
times during the term of this agreement with the Town Clerk.
Workers' Compensation. In addition to these policies, Consultant shall have and maintain
Workers' Compensation insurance as required by California law and shall provide evidence
of such policy to the Town before beginning services under this Agreement. Further,
Consultant shall ensure that all subcontractors employed by Consultant provide the
required Workers' Compensation insurance for their respective employees.
Chavan & Associates -Agreement for Auditing Services Page4of6
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
3.4
4.1
4.2
Indemnification. The Consultant shall save, keep, hold harmless and indemnify and defend
the Town its officers, agent, employees and volunteers from all damages, liabilities,
penalties, costs, or expenses in law or equity that may at any time arise or be set up
because of damages to property or personal injury received by reason of, or in the course
of performing work which may be occasioned by a willful or negligent act or omissions of
the Consultant, or any of the Consultant's officers, employees, or agents or any
subconsultant.
IV.GENERAL TERMS
Waiver. No failure on the part of either party to exercise any right or remedy hereunder
shall operate as a waiver of any other right or remedy that party may have hereunder, nor
does waiver of a breach or default under this Agreement constitute a continuing waiver of
a subsequent breach of the same or any other provision of this Agreement.
Governing Law. This Agreement, regardless of where executed, shall be governed by and
construed to the laws of the State of California. Venue for any action regarding this
Agreement shall be in the Superior Court of the County of Santa Clara.
4.3 Termination of Agreement. The Town and the Consultant shall have the right to terminate
this agreement with or without cause by giving not less than fifteen days (15) written
notice of termination. In the event of termination, the Consultant shall deliver to the
4.4
4.5
4.6
Town all plans, files, documents, reports, performed to date by the Consultant. In the
event of such termination, Town shall pay Consultant an amount that bears the same ratio
to the maximum contract price as the work delivered to the Town bears to completed
services contemplated under this Agreement, unless such termination is made for cause,
in which event, compensation, if any, shall be adjusted in light of the particular facts and
circumstances involved in such termination.
Amendment. No modification, waiver, mutual termination, or amendment of this
Agreement is effective unless made in writing and signed by the Town and the Consultant.
Disputes. In any dispute over any aspect of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees, including costs of appeal.
Notices. Any notice required to be given shall be deemed to be duly and properly given if
mailed postage prepaid, and addressed to:
Town of Los Gatos
Attn: Town Clerk
110 E. Main Street
Los Gatos, CA 95030
Chavan & Associates -Agreement for Auditing Services
Chavan & Associates, LLP
Attn: Sheldon Chavan
15105 Concord Circle, Suite 130
Morgan Hill, CA 95037
Page5of6
DocuSign Envelope ID: 2529C044-9E24-4732-8959-482B8D58876E
or personally delivered to Consultant to such address or such other address as Consultant
designates in writing to Town.
4.7 Order of Precedence. In the event of any conflict, contradiction, or ambiguity between the
terms and conditions of this Agreement in respect of the Products or Services and any
attachments to this Agreement, then the terms and conditions of this Agreement shall
prevail over attachments or other writings.
4.8 Entire Agreement. This Agreement, including all Exhibits, constitutes the complete and
exclusive statement of the Agreement between the Town and Consultant. No terms,
conditions, understandings or agreements purporting to modify or vary this Agreement,
unless hereafter made in writing and signed by the party to be bound, shall be binding on
either party.
IN WITNESS WHEREOF, the Town and Consultant have executed this Agreement.
Town of Los Gatos by:
DocuSigned by:
1/21/2022
��ffi�67M'"Fr-___ -------------Laurel Prevetti, Town Manager
Recommended by:
DocuSigned by:
1/16/2022
fjrfe918�8�way, Finance Director
Approved as to Form:
DocuSigned by:
lJJ; ij
Robert Schultz, Town Attorney
DocuSigned by:
6 MMc, cPMc
Town Clerk
Chavan & Associates -Agreement for Auditing Services
Consultant, by:
Chavan & Associates, LLP
1/13/2022
Page 6 of 6
DocuSign Envelope ID: 2529C044-9E24-4732-8959-482B8D58876E
TECHNICAL PROPOSAL FOR CONDUCTING
THE ANNUAL INDEPENDENT AUDIT
OF THE
TOWN OF Los GATOS
Submitted October 81 2021 •
Chavan & Associates, LLP
Certified Public Accountants
15105 Concord Circle, Suite 130
Morgan Hill, CA 95037
Phone:(650)346-1329
Fax: (408) 872-4159
E-mail: sheldon@cnallp.com
Contact: Sheldon Chavan, Partner
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Title
Transmittal Letter .............................................................................................................................................. ..
A.Independence, License to Practice in CA, and Firm Qualifications & Experience ...................................... ..
Independence ....................................................................................................................................... .
License to Practice in California ............................................................................................................ .
Contractor Identification and Introduction ......................................................................................... ..
Firm Size, Staff Size, Location and Staffing .......................................................................................... ..
Range of Services .................................................................................................................................. .
Contract Terminations and Affirmation Concerning Substandard Audit Work .................................... .
Equal Opportunity Employer ............................................................................................................... ..
Subcontractor ....................................................................................................................................... .
Business Licenses .................................................................................................................................. .
Insurance ............................................................................................................................................. ..
Quality Control Review ........................................................................................................................ ..
B.Partner, Supervisory and Staff Qualifications and Resumes ...................................................................... .
Sheldon Chavan, CPA, Managing Partner ............................................................................................ ..
Paul Pham, CPA, Partner ...................................................................................................................... .
Niru Machiraju, CPA, Audit Supervisor ................................................................................................. .
Andrew Quintero, Senior Auditor ........................................................................................................ .
Matthew Ojeda, Senior Auditor ........................................................................................................... .
Professional Education and Training .................................................................................................... .
C.Similar Engagements .................................................................................................................................. .
D.Specific Audit Approach ............................................................................................................................ ..
Phase I -Planning and Risk Assessment .............................................................................................. ..
Phase II -Substantive Audit Procedures and Compliance .................................................................... .
Phase Ill -Financial Statement Preparation and Review ...................................................................... .
Compliance and Program Specific Auditing ......................................................................................... ..
Recommendations for Improved Operations ...................................................................................... ..
Irregularities and Illegal Acts ............................................................................................................... ..
Control Risk Assessment ..................................................................................................................... ..
Analytical Procedures .......................................................................................................................... ..
Identification of Potential Audit Problems ........................................................................................... .
Resources Available for Standards Interpretations ............................................................................. ..
Summary of Audit Phases .................................................................................................................... ..
Summary of Team Assignments ........................................................................................................... .
Summary of Roles and Responsibilities ................................................................................................ .
Summary of Staff Hours by Phase ........................................................................................................ .
Summary Timeline ............................................................................................................................... ..
Audit Scope .......................................................................................................................................... .
E.Discussion of Relevant Accounting Issues .................................................................................................. .
F.Additional Information .............................................................................................................................. ..
Current Client List ................................................................................................................................ ..
Technology in the Audit ....................................................................................................................... .
Proposal Exceptions ............................................................................................................................ ..
C&A's Responsibility for Detecting Fraud ............................................................................................ ..
Attachments:
Attachment A-Most Recent External Quality Control Review
Attachment B -Prepared by Client List
Attachment C -Proposal Warranties
Attachment D -Conflict of Interest Statement
Attachment E -Non-collusion Declaration
Attachment F -References
Attachment G -Statement Regarding Insurance Coverage and Worker's Compensation Insurance Ack. Certificate
Page 11
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•Chavan and Associates, llp
Certified Public Accountants
October 8, 2021
Gitta Ungvari, Finance and Budget Manager
Town of Los Gatos, Finance Department
110 E. Main Street
Los Gatos, CA 95030
We are pleased to have this opportunity to submit our proposal to provide auditing services for the
Town of Los Gatos (the "Town"). Our understanding of the work outlined in the request for
proposal is that we will audit the financial statements of the Town for fiscal years ending June 30,
2022, 2023 and 2024, with two option years.
Our audits will be performed in accordance with auditing standards generally accepted in the
United States of America, the standards set forth for financial audits in the United States General
Accounting Office's (GAO) Government Auditing Standards, the provisions of the Federal Single
Audit Act of 1984 and the Single Audit Act Amendments of 1996; the U. S. Office of Management
and Budget's (0MB) guidance for federal awards and agreements as provided in the Code of
Federal Regulation (CFR) 2 Part 200, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards and relevant Governmental Accounting Standards Board
(GASB) Statements. We will also apply the necessary procedures to prepare the reports as
requested in the RFP, such as the ACFR, single audit reports, management letter, optional measure
GAU P's, and preparation of the financial transactions and compensation report.
As a result of our audit, we will express an opinion on the fair presentation of the basic financial
statements, as listed in the RFP, in accordance with GAAP. We will also issue a report on internal
controls over financial reporting and on compliance with applicable laws and regulations in
accordance with Government Auditing Standards.
Throughout the contract period, we will provide consultation on accounting and compliance issues
and attend meetings to discuss the audit and management comments. It is our commitment to
the Town that we will complete the work within the agreed time frame and that we have the
resources, time and personnel to dedicate to this engagement for the entirety of the contact. We
are confident Chavan & Associates LLP ("C&A") is the best-qualified firm to serve as your
independent auditors. A brief list of reasons includes:
•We specialize in the audits of local governments and not for profit entities.
•Our partners have 37 years of combined experience auditing local governments.
•Our firm and key professionals are properly licensed to practice in the state of California.
•Our service will be dependable, reliable and timely.
•We will be sensitive to your workload. We understand you and your staff must keep up with
your current work as well as deal with the audit.
Page Ii 15105 Concord Circle, Ste. 130, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com • www.c��fll
DocuSign Envelope ID: 2529C044-9E24-4732-8959-482B8D58876E
•Chavan and Associates, llp
Certified Public Accountants
• Our staff and partners are available twelve months of the year to serve our audit clients.
You are important to our firm and we promise a high level of involvement and enthusiasm at
all levels.
• Our managing partner will be the lead for your audit. He will attend all conferences and
meetings and will supervise the audit directly during each year and phase of the
engagement. Our Managing Partner will be the person that prepares your Annual
Comprehensive Report which will then be reviewed by our Associate Partner.
•We offer flexible staffing and scheduling, especially during COVID-19. We can send a full
team onsite, work 100% remotely, or send a small team on site to minimize exposure. All of
our team members are vaccinated and will follow your policies in regard to COVID-19.
• To improve the efficiency of the audit process, we use an online software, Engagement
Organizer (EO), to provide a list of information and monitor the workflow during the audit.
The link to EO is provided early during the planning process and includes items for both
interim and year-end work, such that we can edit the list as needed moving forward. All
documents can be uploaded here and notes, status updates and comments are done
through EO. We also have a secure portal as an additional way to share information.
We are secure in our belief that our firm is the best qualified to meet your needs. Once you have
examined our proposal and contacted our references, we feel you will agree.
Staffing for the audit will include one Engagement Partner, one Associate Partner, one Supervisor,
one Senior Auditor, one Professional Staff and one Administrative Staff. The Engagement Partner,
one Senior and two Staff will be assigned to visit your offices, as feasible with regard to COVID-19
circumstances. The Engagement Partner, Associate Partner, Supervisor and Senior Auditor will be
available throughout the entire contract period.
Sheldon Chavan (15105 Concord Circle, Suite 130, Morgan Hill, CA, 95037, 650-346-1329,
Sheldon@cnallp.com) is the partner authorized to sign and obligate the firm contractually and
represent the firm. He is empowered to submit the bid and authorized to sign a contract. This
proposal is a firm and irrevocable offer for 90 days.
We look forward to being of service to you.
Very truly yours, CtA
Sheldon Chavan, C.P.A., Partner
Chavan & Associates, LLP
Pagel ii 15105 Concord Circle, Ste. 130, Morgan Hill, CA 95037
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com • www.c��fll
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
Section A
Independence, License to Practice in California, and Firm's Qualifications & Experience
DocuSign Envelope ID: 2529C044-9E24-4732-8959-482B8D58876E
Independence
Section A Independence, License to Practice in California, and Firm's Qualifications & Experience
Town of Los Gatos Proposal for Auditing Services
C&A is independent of the Town and all of its component units as defined by generally accepted
auditing standards and the U.S. General Accountability Office's Government Auditing Standards. In all
matters relating to the audit work, the audit organization and individual auditors, whether government
or public, should be free from personal and external impairments to independence, should be fiscally
independent, and should maintain an independent attitude and appearance.
C&A did not have any professional relationships involving the Town of Los Gatos, or any of its agencies
and component units, for the past five (5) years that would cause a conflict of interest relative to the
scope of services identified in the request for proposal. However, C&A did provide the Town's auditing
services for the fiscal year ended June 30, 2016 and the 4 years prior. Providing audit services to an
entity does not create a conflict of interest, nor compromise independence.
License to Practice in the State of California
C&A and all key professionals are properly licensed to practice as certified public accountants in the
State of California and do not have any record of substandard work or unsatisfactory performance
pending with the State Board of Accountancy. C&A is registered with the California State Board of
Accountancy and our stat number is PAR 7294.
Contractor Identification and Introduction
Company Name:
Address:
Office:
Fax:
E-mail:
CA File Number:
FEIN:
Authorized to Sign:
Chavan & Associates, LLP (C&A)
15105 Concord Circle, Suite 130, Morgan Hill, CA 95037
408-217-8749
408-872-4159
Sheldon@cnallp.com
202009218003
27-0630496
Sheldon Chavan, Partner; Paul Pham, Partner
Our partners have performed audits under Governmental Auditing
Standards, the Single Audit Act and the State Controller's Office Minimum
Audit Requirements for a combined 37 years; Sheldon for 23 years and Paul
Pham for 14 years. In August of 2009, we established C&A as a limited
liability partnership. C&A is a local audit firm in San Jose, CA specializing in
Single AuditJ
local government auditing and consulting. We have audited and prepared Annual Comprehensive
Financial Reports {ACFRs) and basic financial statements as required by the Government Finance
Officers Association {GFOA) and the Governmental Accounting Standards Board {GASB) for cities, fire
districts, water districts, sanitation districts, JPAs and other types of special districts. Our partners have
been reviewers of ACFRs for the GFOA and CSMFO. Most recently, C&A prepared ACFRs of City of
Saratoga, the City of Oroville, City of Suisun, City of Pacific Grove, and City of Carmel -by-the Sea for the
year ending June 30, 2020 (working on 2021). Our goal at C&A is to provide premium audit services at a
llchavan & Associates, LLP Page 1 11
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Section A Independence, License to Practice in California,
and Firm's Qualifications & Experience
Town of Los Gatos Proposal for Auditing Services
reasonable fee. We believe that continuous partner involvement helps us achieve our goal, which is
why our partners are constantly involved in every audit. Ultimately, minimizing on-the-job training
allows us to focus exclusively on servicing our clients.
After starting the firm with only 9 clients in 2009, we currently have 100 government, nonprofit and
grant clients, 40 of which were required to have a single audit under uniform guidance in 2019-20. Our
firm's experience includes numerous audits under state and federal compliance audit guides, including
the Minimum Audit Requirements and Reporting Guidelines for Cities as required by the State
Controller's Office. What makes us unique from other audit firms is that we eliminate "on-the-job"
training through intensive in-house training, audit planning, and by having partners in the field
throughout the entire engagement ( not just "spot-checking"). The daily interaction with our
Engagement Partner has been invaluable to our clients as it provides the opportunity for immediate
feedback and the chance to ask questions related to accounting, account coding, grant requirements,
ACFR requirements, budgeting, and much more. Auditing is the main focus of our practice and we are
available to start as early as February 1st, however our calendar is flexible.
C&A is also a member of the AICPA's Government Audit Quality Center which promotes the importance
of quality governmental audits and the value of such audits to purchasers of governmental audit
services. GAQC is a voluntary membership center for CPA firms and state audit organizations that
perform governmental audits.
Firm Size, Staff Size, Location and Staffing
We also have twelve professional, full-time staff in addition to our three partners and one
administrative person that will be available to assist as needed throughout the engagement. Our
engagement partners are directly involved with the audits. Our central office is located in Morgan Hill,
CA. Staffing for the Town's audit will include the following professionals (audit experience):
Sheldon Chavan, CPA, Managing Partner (23 years)
Paul Pham, CPA, Partner (14 years)
Niru Machiraju, CPA, Supervisor (6 years)
Andrew Quintero, Senior Auditor (4 years)
Matthew Ojeda, Senior Auditor (6 years)
One of the professional staff could change from year to year. The Town will be notified of any staff
changes prior to field work. The Engagement Partner, manager, and supervisor will be the same during
each year of the engagement.
llchavan & Associates, LLP Page2
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Range of Services
Section A Independence, License to Practice in California, and Firm's Qualifications & Experience
Town of Los Gatos Proposal for Auditing Services
The following summarizes the range of services we provide:
Number Management, Contractor
of Percent by Accounting & Prequalification Nonprofit
Entity Type Clients Entity Auditing Other Services Tax
Local Education Agencies 37 37% 89% 0% 14% 0%
Charter Schools 11 11% 100"/4 0% 0% 100%
Non-profit Organizations 17 17% 94% 0% 0% 82%
Cities and Towns 10 10% 90% 0% 0% 0%
Special Districts 17 17% 88% 12% 0% 0%
Privately Held 7 7% 71% 29% 0% 0%
GAS GAG AS Single Bond EAAP
Audit Audit Audit Audit Audit Other
Contract Terminations and Affirmation Concerning Substandard Audit Work
C&A and all assigned personnel do not have any record of substandard work, contract failures,
outstanding claims, litigation, investigations, or other unsatisfactory performance issues against us or
pending with the State Board of Accountancy or any other entity. In addition, we have not had any
federal or state desk review or field reviews of our audits. C&A has no record of lost clients or contract
failures.
Equal Opportunity Employer
C&A is an equal opportunity employer and is in compliance with the Civil Rights Act of 1964, the State
Fair Employment Practice Act, and all applicable federal and state laws and regulations relating to
equality.
Subcontractor
C&A will not be engaged with any subcontractors during this engagement.
Business Licenses
C&A will obtain and maintain a valid business license with throughout the duration of the cont ract, as
applicable.
llchavan & Associates, LLP Page 3 11
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Section A Independence, License to Practice in California,
and Firm's Qualifications & Experience
Town of Los Gatos Proposal for Auditing Services
Insurance
C&A maintains the following insurance:
•Commercial General Liability Insurance (bodily injury and property damage) is $4,000,000 per
occurrence. The carrier is Hartford Insurance Company.
•Automobile Bodily Injury and Property damage liability insurance is $2,000,000 per occurrence. The
carrier is Hartford Insurance Company.
•Professional Liability Insurance carrier is Philadelphia Insurance Company. The per claim/aggregate
limit of the liability is $3,000,000.
•Workers Compensation Insurance carrier is Twin City Insurance Company. The per claim/aggregate
limit of the liability is $1,000,000.
Quality Control Review
We are enrolled in the AICPA quality control peer review program. Our peer review was performed in
compliance with AICPA and GAO requirements and included a selection of government audit
engagements. Our audits complied with auditing standards generally accepted in the United States of
America and Generally Accepted Governmental Auditing Standards.
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Section B
Partner, Supervisory and Staff Qualifications and Resumes
DocuSign Envelope ID: 2529C044-9E24-4732-8959-482B8D58876E
Section B -Partner, Supervisory and Staff Qualifications and Resumes
Town of Los Gatos Proposal for Auditing Services
We are aware of the need for continuity of personnel on the engagement and promise that the
Engagement Partner will be directly involved in the audit during each year of the contract. We believe
that extensive partner involvement provides continuity that could not be achieved in any other way. All
staff committed in this proposal will be available for the entire June 30, 2022 audit and are available 12
months a year for questions, comments and implementation support. We understand that the
Engagement Partners, managers and other supervisory staff and specialists may be changed only with
the express prior written permission of the Town. Other audit personnel may be changed at our
discretion as long as the replacements have substantially the same or better qualifications or
experience. The Town retains the right to approve or reject replacements.
Sheldon Chavan, CPA
Managing Partner (Member CalCPA, AICPA, GFOA, CSMFO, GAQC)
Sheldon holds a B.S. in Accounting from San Jose State University. He began his
career in public accounting in 1998 and has been auditing local governments and
nonprofit organizations ever since. Sheldon is a CPA licensed in California and a
member of AICPA, CalCPA, CSMFO, GAQC and GFOA. He has also been a
member of the GFOA Special Review Committee, with responsibility for
reviewing ACFR's for award of the Certificate of Excellence in Financial
Reporting. Sheldon has prepared/reviewed ACFR's for the City of Berkeley, City
of Sunnyvale, City of Pittsburg and many others
over his career. Most recently, Sheldon prepared
the ACFR of the City of Oroville, City of Saratoga
and the City of Pacific Grove for the fiscal years
ended June 30, 2020 (partial listing).
Sheldon has managed governmental audits his entire career, which
includes the technical review of all work papers, staffing, scheduling,
reporting, state compliance, federal compliance, state controllers reports and much more. He is
responsible for running the audit in the field and providing accounting and auditing technical support to
other partners and staff, primarily in the areas of compliance with auditing standards generally accepted
in the United States of America, the standards set forth for financial audits in the United States General
Accounting Office's (GAO) Government Auditing Standards, and the provisions of the Federal Single
Audit Act and the United States Office of Management and Title 2 CFR Part 200 (Uniform Guidance).
Sheldon also ensures that each staff has met the continuing professional education requirements under
these standards and teaches several in-house seminars a year. He also administers our firm's quality
control system as required by GAAS and Yellow Book standards. Sheldon has been performing audits
under the Single Audit Act his entire career. Understanding the complexities of the various federal
programs is one of his specialties. Over the years, Sheldon has audited major programs such as National
School Lunch, Title II Education Technology, IDEA Special Education Local Assistance, Title I, Education
Jobs Fund, Title IV Drug Free Schools, NCLB Title 111, Title II Improving Teacher Quality, CDBG, Shelter Plus
Care, Home Investment in Affordable Housing, HUD Section 8, Highway Planning and Construction,
Medi-Cal, Low-income Low Energy Assistance, and many more.
Sheldon has extensive experience auditing government bond programs and can assist the Town with
bond covenant calculations, bond compliance, tax filings, bond arbitrage issues and any other general
II Chavan & Associates, LLP Page 5 11
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Section B -Partner, Supervisory and Staff Qualifications and Resumes
Town of Los Gatos Proposal for Auditing Services
reporting requirements. In addition, we currently have multiple clients for which we complete special
bond performance audits each year. We also provide contractor prequalification services for some
clients who use restricted bond funds for modernization and infrastructure improvements.
Sheldon's recent continuing professional education:
Description of Program/Training
Yellow Book:Revised Government Auditing Standards
Government Audting Standards -Yellow Book
Frequent Government and NPO Frauds: Misuse of Assets
Governmental and Nonprofit Annual Update: Federal Government Activities
Single Audit Lighting Round
Governmental Audit Quality Cetner Annual Update Webcast
Program-Specific Audits' plus 'AuditTools and Guidance'
Applying Risk Assessment Standards: Understanding the Entity and Its Environment
GASB Updates
Governmental Accounting and Auditing Conference Webcast -5121266C
Not-for-Profit Organizations Conference Webcast -5121343C
Cases in NFP Acct. & Auditing: 'Financial Statement Requirements' plus 'Net Asset Classifications'
Governmental Auditing: Course Two Performance Audits
Governmental Auditing: Course Three Financial Audits, Attestation Engagements, and ..
Governmental Accounting and Reporting
Ethics: AA&C LLP -Accounting Firm Practice Development Committee
State and Local Govt Planning Considerations
Cases in NFP Acct. & Auditing: Contributions
Field Work Documentation: Preparation, Maintenance, Types of Workpapers
School District Update Including LCFF and LCAP Compliance
School Districts Conference
Understanding the Changes to Yellow Book Independence
California Regulatory Review Course
Fraud Audit Techniques Using Excel
Applying the Uniform Guidance in Your Single Audits
Testing Compliance' plus 'Reporting Requirements
Fid Act Understanding impacts of GASB 84
Its Here! Fid Act Implementation Considerations
Accounting and Auditing Conference
Bernard Madoff Investment Securities' Auditor'
The Detection and Prevention of Fraud in Financial Statements
Governmental Auditing: Course One Fundamental Principles for Government Auditing
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Section B -Partner, Supervisory and Staff Qualifications and Resumes
Town of Los Gatos Proposal for Auditing Services
The following is a partial list of Sheldon's clients over the years:
Cities and Towns Special Districts/JPA's School Districts/COE's Nonprofits and Other
City of Albany
City of Berke! ey
City of Carmel-by-the-Sea
City of Del Rey Oaks
City of Marina
City of Novato
City of Oroville City of Pacific Grove
City of Pittsburg
City ofpointArena
City of Salinas City of San Rafael
City of Saratoga
City of Scotts Valley
City of Sonoma
City of South San Francisco
City of Sui sun City
City of Sunnyvale
City ofTr acy
Town of Los Gatos
Town of Windsor
Bay Area Water Services & Cons
Central Marin Sanitation Agency
East Bay Dischargers Authority
Fairfield-Suisan Sanitation
Half Moon Bay Fire Protection
Hayward Area Parks and Rec
Highland Recreation District Los Tranco s Water Di strict
Mckinney Water District
Menlo Park Fire Protection
Midpen Regional Open Space Pleasant Hill Parks and Rec
Point Montara Fire District
Santa Clara Regional Open Space
Saratoga Cemetery District
South Bayside System Authority
South San Francisco Conf. Ctr.
Sausalito-Marin City Sanitation
Tahoe Reqional Planning Agency
The Ci ties Group
Valley of the Moon Fire
West Bay Sanitary Di strict
West County Wastewater Di strict
Westborough Water Di strict
Woodside Fire Protection Di strict
II Chavan & Associates, LLP
Antelope Elementary
Belmont Redwood Shores
Burlingame
Cabrillo Unified
Campbell Union
Cloverdale Unified
Cotati Rohnert Park Hi II sborough City
La Honda Pescadero
Lakeside
Las lomitas Elementary
Lassen View Elementary
Los Altos Elementary
Luther Burbank
Manton Joint Union
Menlo Park City
Millbrae Elementary
Mineral Mountain View Whisman
Orchard
Pacifica
Plum Valley
Portola Valley Elementary
Red Bluff
Salinas Union High
San Bruno Park San Carlos Elementary
San Mateo County Office
San Mateo Union High
Scotts Valley Unfi ed
Sequoia Uni on High Sonoma Valley Unified
Uni on School District
West County Agency ILEA)
Windsor Unified
Woodside Elementary
2006 Washington St.
Bay Area Special Education JPA
Bay ftlea Water Users Association
Black Adoption Placement
Boys and Girls Clubs of Sonoma
Center for Empowering Refugees
Children of Grace Collective Roots
Credo High School
Diagnostics for the Real World
Hidaya Foundation
Livebooks
Mashery
Mission Charter
Mission Language and Vocational
Morgan Hill Charter Foundation
Morgan Hill Charter School
Nob Hi 11 Home Owners Assoc.
O'Conner Water
One Million Lights
Orange County Charter School
Pathway to Choices
Pyramid AJ ternatives
Redwood City Education Foundation
San Jose Conservation Charter
San Jose Conservation Corps Singularity University
Sociometri cs
South Tahoe Area Transit Authority
Stone Bridge Charter School
Woodside Atherton Authority
Work2future Foundation
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DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
Section B -Partner, Supervisory and Staff Qualifications and Resumes
Town of Los Gatos Proposal for Auditing Services
Paul Pham, CPA
Associate Partner (AICPA, CalCPA)
Paul received his Bachelor of Science from Pacific University and hopes to pursue a Master of
Accountancy in the near future. He is currently preparing to sit for the CPA exam and plans to complete
his CPA certification by the end of the year. Paul has been working in public and private accounting
since 2007 and has completed Fourteen governmental audit seasons. He has completed financial and
compliance audits for the entities (including LEA's) listed below since 2007. Besides the standard control
documentation and substantive testing required for GAAS audits, Paul has performed audits and
prepared reports under 0MB Subpart F and the Single Audit Act for most of the entities listed below. He
has audited Federal grants from various agencies, including FEMA, HUD, FTA, the Department of
Education (Title I, Special Education, Title II, Adult Ed) and much more.
Paul's recent continuing professional education:
Desaiption of Program/Tra,ning
GAGAS -Ethical Princi pies In Government Auditing
GAGAS -Field Work and Reporting Standards
GAGAS -Field Work Standards For Financial Audits
GAGAS -General Field Work And Reporting Standards
GAGAS -General Standards
Government Auditing
Maj or Changes to Auditing Standards
Limiting Auditor Liability
Auditor Communications: Critical New Requirements
School Districts Conference
Governmental Accounting, Reporting, and Auditing Update GAGAS -Reporting Standards For Financial Audits
GAGAS-Use and Application of GAGAS GASB Basic Financial Statements for State and Local Governments
The following is a partial list of Paul's clients over the years:
Cities and Towns Special Districts School Districts/COE's Nonprofits and Olarter Schools
City of Albany Bay Area Water Services & Cons
City of Berkeley Central Marin Sanitation Agency
City of Carmel-by-the-Sea Fai rfield-Suisan Sanitation District
CityofDel Rey Oaks Menlo Park Fire Protection
City of Orovi II e Mi dpen Regional Open Space
City of Pacific Grove Santa Clara Regional Open Space
City of Point Arena Saratoga Cemetery District
City of Rocklin South Bayside System Authority
Oty of Saratoga South San Francisco Conf. Ctr. City of Sonoma Suasalito-Mari n City Sanitation District
City of Suisun City Tahoe Reqional Planning Agency
Antelope Elementary
Burlingame
Cabrillo Unified
Cotati Rohnert Park
Hillsborough City
Bay Area Water Users Association
Black Adoption Placement
Boys and Girls Clubs of Sonoma
Center for Empowering Refugees
Children of Grace
Collective Roots
Credo High School
Hidaya Foundation
Livebooks Mashery
Mission Charter
City ofTracy The Cities Group
Town of Los Gatos Valley of the Moon Fire
La Honda Pescadero
Las Lomitas Elementary
Lassen View Elementary
Los Altos Elementary Luther Burbank
Manton Joint Union
Millbrae Elementary
Mineral
Mission Language and Vocational School
NASAAMES Exchange
West Bay Sanitary District
Westborough Water District
II Chavan & Associates, LLP
Mountain View Whisman
Orchard
Pacifica
Plum Valley
Portola Valley Elementary
Red Bluff
San Bruno Park
San Carlos Elementary
San Lorenzo Valley Unified
San Mateo County Office
Scotts Valley Unfied Sequoia Union High
Sonoma Valley Unified
Soquel Elementary
Union School District
West County Agency (LEA)
Windsor Unified
Woodside Elementary
Orange County Charter School
Pathway to Choices
Pyramid Alternatives
Redwood City Education Foundation
San Jose Conservation Charter
San Jose Conservation Corps
Sociometrics
South TahoeArea Transit Authority
Stone Bridge Charter School
Work2future Foundation
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DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
Section B -Partner, Supervisory and Staff Qualifications and Resumes
Town of Los Gatos Proposal for Auditing Services
Niru Machiraju, CPA
Audit Supervisor (Member AICPA, CalCPA)
Niru received her Bachelor and Master of Science in Accounting from the University of Saint
Thomas. She received her CPA license in 2020. Niru has been working in public accounting since 2015
and has completed six audit seasons. During the 2021 audit season, she completed the financial and
compliance audits for the entities listed below and has additional experience in the manufacturing,
distribution. and non-profit industries. Niru has audited over sixty local governments and nonprofits
since 2015. Besides the standard control documentation and substantive testing required for GAAS
audits, Niru has performed audits and prepared reports under GAGAS and Uniform Guidance. She has
also audited Federal grants from various agencies, including HUD and the Department of Education
(Title I, Special Education) and much more.
Mona's recent continuing professional education:
Description of Program/Training
GAGAS -Ethical Principles In Government Auditing
GAGAS -Field Work and Reporting Standards
GAGAS -Field Work Standards For Financial Audits
GAGAS -General Field Work And Reporting Standards
GAGAS -General Standards
GAGAS -Reporting Standards For Financial Audits
GAGAS -Use and Application of GAGAS
Government Auditing
Major Changes to Auditing Standards
Limiting Auditor Liability
Auditor Communications: Critical New Requirements
School Districts Conference
Governmental Accounting, Reporting, and Auditing Update
GASB Basic Fina ncia I Statements for State and Loca I Governments
The following is a list of Mona's clients over the past year:
Cities and Towns Special Districts School Districts/COE's Nonprofits and Other
City of Albany
City of Carmel-by-the-Sea
City of Del Rey Oaks
City of Orovi 11 e
City of Pacific Grove
City of Poi ntArena
City of Rocklin
City of Sar a toga
City of Marina
City of Sui sun City
Bay Area Water Services & Cons
Chico Area Recreation and Park District
Lake Canyon Community Services District
Midpen Regional Open Space
Ross Valley Sanitary District
Santa Clara Regional Open Space
South San Francisco Conf. Ctr.
Stege Sanitary District
Suasal ito-Marin City Sanitation Di strict
The Cities Group
Va 11 ey of the Moon Fi re
West Bay Sanitary District
Westborough Water Di strict
II Chavan & Associates, LLP
Antelope Elementary
Burlingame
Cabrillo Unified
Cotati Rohnert Park
Hillsborough City
Las Lomitas Elementary
Lassen View Elementary
Los Altos Elementary
Luther Burbank
Mil I brae Elementary
Orchard
Pacifica
Red Bluff
San Bruno Park
San Carlos Elementary
San LorenzoValley Unified
San Mateo County Office
Sequoia Union High
Sonoma Valley Unified
Soquel Elementary
Union School Di strict
West County Agency {LEA)
Woodside Elementary
Bay Area Water Users Association
Boys and Girls Clubs of Sonoma
Center for Empowering Refugees
Children of Grace
Credo High School
Hidaya Foundation
Mission Charter
NASA AMES Exchange
Pathway to Choices
Peninsula Conflict Resolution Center
Redwood City Education Foundation
Stone Bridge Charter School
Work2future Foundation
Stone Bridge Charter School
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DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
Section B -Partner, Supervisory and Staff Qualifications and Resumes
Town of Los Gatos Proposal for Auditing Services
Andrew Quintero
Senior Auditor
Andrew has successfully completed three seasons of governmental auditing. Andrew has performed
tests of controls, substantive tests, state compliance testing and Federal compliance testing for various
special districts and cities. He has been the Senior Auditor in-charge of clients such as the Town of
Yountville, City of Suisun City, Fairfield-Suisun Sanitary District and many more. Besides the standard
control documentation and substantive testing required for GAAS audits, Andrew has performed audits
and prepared reports under 0MB Subpart F and the Single Audit Act. He has audited Federal grants
from various agencies, including Special Education, National School Lunch, Title I, Department of
Education grants and others.
Andrew's recent continuing professional education:
Description of Program/Training
GAGAS -Ethical Principles In Government Auditing
GAGAS -Field Work and Reporting Standards
GAGAS -Field Work Standards For Financial Audits
GAGAS -General Field Work And Reporting Standards
GAGAS -General Standards
GAGAS -Reporting Standards For Financial Audits
GAGAS -Use and Application of GAGAS
The following is a list of Andrew's clients:
Government Auditing
Major Changes to Auditing Standards
Limiting Auditor Liability
Auditor Communications: Critical New Requirements
School Districts Conference
Governmental Accounting, Reporting, and Auditing Update
GASB Basic Fina ncia I Statements for State and Loca I Governments
Cities and Towns Special Districts School Districts/COE's Non profits and Other
G ty of Oroville Bay Area Water Supply Conservation .A.3ency Jefferson Uiim High School District Peninsula Conflict Resoluti m Center
d ty of Paci fie Grove Castro Valley Sanitary District John Swett Lliified School District Redwood City Education Foundation
Gty of Point Arena El Dorado Hills Community Services District Las Lomitas School District San Mateo County Exposition and Fair Association
d ty of Rocklin Lake Canyon Community Services District Lassen Vi eN lhion Elementary Sc hod District Sonoma Valley Hospital Foundation
City of Saratcga Midpeninsul a Reg:ional Open Space District Los Altos School District The Moca Foundation
City of Suisun City Puri ssima Hil Is Water District Luther &Jrbank Sc hod District The San Jose Library Foundation
Town of Yountvi lie Ross Valley Sanitary District
Santa Oara County Regional Open SpaceAuth
Sausalito-Marin GtySanitation District
StegeSanitary District
Silica, Valley Clean Water
South San Fancisco Conference Center
The Cities' Group
Valley of the Moc.,n Fire District
West Bay Sanitary D·strict
WestValleySanitation District
Westborough Water District
II Chavan & Associates, LLP
Menlo Park City School District
Millbrae School District
Mountain Vi eN Whisman School District
Napa Valley lhified School District
Orchard Schod District
Pacifica Schod District
Red BluffJointlhion High School District
Red Bluff Union ElementarySchod District
Roseland Elementary School D·strict
San Bruno ParkSchod District
San Carlos School District
San LcrenzoValley Unified School District
San Mateo Foster City School District
San Rafa<J a ty Schoci s
Santa Rosa OtySchools
Woodside Elementary
Page 10 11
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
Section B -Partner, Supervisory and Staff Qualifications and Resumes
Town of Los Gatos Proposal for Auditing Services
Matthew Ojeda
Senior Auditor
Matthew graduated from the San Jose State University, with a B.S. in Accounting. Starting in public
accounting in 2014, he has successfully completed six seasons of governmental auditing. Matthew has
performed tests of controls, substantive tests, state compliance testing and Federal compliance testing
for various special districts and school districts. Besides the standard control documentation and
substantive testing required for GAAS audits, Matthew has performed audits and prepared reports
under 0MB Subpart F and the Single Audit Act. He has audited Federal grants from various agencies,
including Special Education, National School Lunch, Title I, Department of Education grants and others.
Matthew's recent continuing professional education:
Description of Program/Training
GAGAS -Ethical Principles In Government Auditing
GAGAS -Field Work and Reporting Standards
GAGAS -Field Work Standards For Financial Audits
GAGAS -General Field Work And Reporting Standards
GAGAS -General Standards
GAGAS-Reporting Standards For Financial Audits
GAGAS -Use and Application of GAGAS
Government Auditing
Major Changes to Auditing Standards
Lirniti ng Auditor Lia bi I ity
Auditor Communications: Critical New Requirements
School Districts Conference
Governmental Accounting, Reporting, and Auditing Update
GASB Basic Financial Statements for State and Loca I Govern rnents
The following is a list of Matthew's clients over the years:
Cities and Towns Special Districts School Districts/COE's Nonprofits and Other
City of Del Rey Oaks
City of Oroville
City of Pacific Grove
City of Point Arena
City of Rocklin
City of Saratoga
City of Sui sun City
Town of Los Gatos
Castro Valley Sanitary District
Central Marin Sanitation Agency
Fairfield•Suisan Sanitation District
Midpen Regional Open Space Auth
Oro Lorna Sanitary District
Santa Clara Regional Open SpaceAuth
Saratoga Cemetery District
Sausalito-Marin City Sanitation District
Si I icon Valley Clean Water
The Cities Group
West Valley Sanitation District
II Chavan & Associates, LLP
Ante I ope El ernenta ry
Burli ngarne
Cabrill o Unified
Cotati Rohnert Park
Golden Valley Unified
Hillsborough City
Las Lornitas Elementary
Lassen View Elementary
Los Altos Elementary
Luther Burbank
Millbrae Elementary
Mission Preparatory School
Mountain View Whisman
Napa Valley Unified
Orchard
Pacifica
Palo Alto Unified
Portola Valley Elementary
Red Bluff
Roseland Charter
Roseland Elementary
San Bruno Park
San Carlos Elementary
San Lorenzo Valley Unified
San Mateo County Olli ce
San Mateo Foster City
Santa Rosa City School
Scotts Va 11 ey Unfi ed
Sequoia Union High
Sonoma Valley Unified
Soquel Elementary
South San Francisco Unified
Union School District
Woodside Elementary
Boys and Girls Club of Central Sonoma County
Boys and Girls Clubs of Sonoma Valley
Credo High School
Diagnostics for the Rea I World
Mission Language and Vocational School
Morgan Hi II Charter Foundation
Morgan Hi II Charter School
Orange County Charter School
Organic Farming Research Foundation
Proheatlh Homecare
Redwood City Education Foundation
San Jose Conservation Charter
San Jose Conservation Corps
San Mateo County Exposition Fair Association
Sociometrics
Work2future Found a ti on
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Section B -Partner, Supervisory and Staff Qualifications and Resumes
Town of Los Gatos Proposal for Auditing Services
Professional Education and Training
Our professionals complete 80 hours of continuing professional education every two years in auditing
and accounting which includes at least 80 hours of governmental auditing and accounting training
specific to local governments. We use a combination of in-house seminars, self-study and outside
seminars sponsored by AICPA, G FOA, the California Education Foundation and other recognized groups.
All assigned staff meet the educational requirements for Governmental engagements as specified by the
California Board of Accountancy, Federal General Accounting Office, Governmental Accounting
Standards Board, and the AICPA as appropriate.
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Section C
Similar Engagements
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
Section C -Similar Engagements
Town of Los Gatos Proposal for Auditing Services
Client References and Similar Engagements
The following projects were completed by C&A in 2019-20 and are ongoing in 2020-21:
Entity Name City of Del Rey Oaks City of Saratoga
Contact Person Roberto Moreno Dennis Jaw
Title Chief Business Officer Finance Manager
Address 650 Canyon Del Rey Road, Del Rey Oaks, CA 93940 13777 Fruitvale Ave, Saratoga, CA 95070
Phone 831-394-8511 408-868-1227
E-mail RobertoM@GovernmentFinancialSolutionslnc.com djaw@saratoga.ca. us
Audit Period 6/30/2021 6/30/2021 Hours 260 360
Fiscal Years Audited 3 5
Partner Sheldon Chavan Sheldon Chavan
GFOAAward No Yes
EntitvTvpe City City
Finance Dept Staff 3 6
Scope of Work Report Prep CAFR Review
GAGASAudit GAGASAudit
SAS 114 Report Single Audit/OMB
Management Letter SAS 114 Report
GANN Limit AUP Management Letter
Measure S Audit IDAAudit
Year Round Consultation GANN Limit AUP
Year Round Consultation
Entity Name City of Rocklin City of Suisun City
Contact Person Angela Doyle Elizabeth Luna
Title Senior Accountant Accounting Services Manager
Address 3970 Rocklin Road, Rocklin, CA 95677 701 Civic Center Blvd., Su isun City, CA 94533
Phone 916-625-5033 707-421-3215
E-mail angela.doyle@rocklin.ca.u s eluna@suisun.com
Audit Period 6/30/2021 6/30/2021
Hours 340 400 Fiscal Years Audited 4 5
Partner Sheldon Chavan Sheldon Chavan
GFOAAward No Yes
Entity Type City City
General Fund Budget $10,000,000 $36,800,000
Finance Dept Staff 2 10
Scope of Work ACFR ACFR
GAGASAudit GAGASAudit
Single Audit/OMB Single Audit/OMB
SAS 114 Report SAS 114 Report
Management Letter Management Letter
GANN Limit AUP GANN Limit AUP
PFAAudit IDA Audit
Successor Agency Audit successor Agency Audit
Year Round Consultation Year Round Consultation
II Chavan & Associates, LLP
City of Carmel
Robin Scattini
Finance Director
PO Box CC, Carmel-by-the Sea, CA 93921
831-620-2019
rscattini@ci.carmel.ca. us
6/30/2021 320
3
Sheldon Chavan
Yes
City
3
CAFR Prep
Single Audit/OMB
SAS 114 Report
Management Letter
GANN Limit AUP
Measure S Audit
SCO FTR/Streets
Year Round Consultation
City of Pacific Grove
Tori Hannah
Administrative Services Director
300 Forest Ave, Pacific Grove, CA 93950
831-648-3103
thannah@cityofpacifi cgrove. org
6/30/2021
340 5
Sheldon Chavan
Yes
City
$17,500,000
6
ACFR
GAGASAudit
Single Audit/OMB
GANN Limit AUP
SAS 114 Report
Management Letter
Measure S Audit
Year Round Consultation
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Section D
Specific Audit Approach
DocuSign Envelope ID: 2529C044-9E24-4732-8959-482B8D58876E
Section D -Specific Audit Approach
Town of Los Gatos Proposal for Auditing Services
The C&A audit approach begins with an entrance conference between Sheldon Chavan and
management to gather information for risk assessment and audit
planning. Upon the conclusion of the entrance conference, Sheldon will
plan and schedule C&A's three phase audit approach and prepare a list of
items to be provided for Phase I of the audit. Significant aspects of each
phase are outlined below as augmented based on our review of the
Town's financial reports, RFP, Budget documents, and Council and
Finance Commission agendas and minutes:
Phase I -Planning and Risk Assessment
This phase is designed to evaluate your operating and accounting procedures and will provide the basis
for a significant portion of our letter to management. The results of our work during this phase will
determine our audit approach for significant accounts and compliance. We plan to begin this phase by
meeting with management and the Finance Commission to plan the audit and discuss any significant
issues with the proposed audit plan and timeline.
At least six weeks prior to the beginning of this phase, we intend to provide the Town with a link to
Engagement Organize ("EO")r detailing the information and timing that will be needed in order to
facilitate the completion of the audit in a timely manner. Having all items in EO uploaded prior to the
beginning of the audit field work will allow us to complete the audit within the allotted time frame or
earlier. We will also begin the testing of federal compliance for major programs during this phase, if
applicable. The EO will include Phase I, 11, and Ill items once uploaded and will updated during the year.
The Town will be able to leave notes on each item, upload attachments
and message our team through EO.
We plan the audit and obtain our understanding of the internal control
structure, control environment, and accounting system through:
•Inquiries of appropriate management and staff personnel.
•Inspection of the Town's documents, records, budget and
related materials, organizational charts, manuals and programs.
•Observation of the Town's activities and operations to corroborate the results of inquiries.
•Testing of the controls to determine they are operating as planned.
•Performance of preliminary analytical review on interim financials. The analytical review
entails comparing similar information for the same time frame from the prior year and also
comparing current year-to-date information to the budget to determine areas that may need
additional attention during Phase II.
•Review and evaluation of the Town's financial and other management information system
controls and procedures. Our staff has gained invaluable experience with systems such as HTE,
Multiple Operation Management (MOM), Springbrook, Pentamation, QuickBooks, Digital
Schools, SunGuard, Escape, FUND$, CECC, SACS, Financial 2000, SASi and many others. It is our
goal to maximize the usage of your computer system during the audit.
This phase constitutes approximately 42% of all non-clerical hours of the engagement and may be
combined with Phase II if desired. At the completion of Phase I, an exit conference will be held to
discuss findings and recommendations and prepare for Phase II.
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Section D -Specific Audit Approach
Town of Los Gatos Proposal for Auditing Services
Phase II -Substantive Audit Procedures and Compliance
This phase is designed to complete our substantive and compliance audit procedures on the accounts of
the Town. The approach for Phase II will be based on the results of Phase I. Audit programs will be
tailored for your Town's needs. This work will begin after the closing of your books.
Sample size and selection is based on our assessment of risk and planned or actual deviations. A typical
sample size will be 25 to 60 items and be randomly selected. Our sampling methods vary depending
on the type of tests we perform. Sample selection for compliance work
will be based on the respective compliance and audit guides, KC, our
experience and judgment, and other various sources. We use Knowledge
Coach (KC) audit programs by Commerce Clearing House (CCH) to assist
in our risk determination and sampling selection. We also use
ProSystems fx Engagement paperless audit, Microsoft Excel, and
Microsoft Word on laptops to perform the audit. Generally, we prefer
information provided in electronic format, however we use production scanners in the office and
portable scanners in the field for information that is unavailable in
electronic format.
Analytical procedures during Phase II involve comparing current data to
prior year and budget data, calculating dollar and percentage variances
and investigating differences. We also analyze trends and relationships
of the various financial statement components and ratios.
Laws and regulations subject to audit will be determined based on
inquiry and familiarity we gain with the Town and with state and federal compliance requirements. We
also attend seminars and webinars related to state and federal regulations to keep abreast of new
requirements.
Phase II will take approximately 42% of the engagement hours. At this time, an exit conference will be
held to discuss findings and recommendations, the status of new accounting principles and reporting
requirements, and prepare for Phase Ill.
Phase Ill - Financial Statement Preparation and Review
This phase consists of preparing or assisting with the preparation of your financial statements, as
required in the RFP, in conformity with accounting principles generally accepted in the United States of
America. We will also prepare all other financial and compliance reports required of us as listed on the
RFP. The required reports and management letter will be submitted to management as noted in the
timeline in the RFP, unless otherwise agreed. We will also ensure that new GASB pronouncements
identified in phase I and II have been appropriately accounted for and disclosed in the financial
statements and that the impact of these statements is sufficiently presented in our audit reports. The
most efficient way to ensure we meet the reporting deadlines is to have the audited trial balance and
final adjustment completed by the last day of field work. This, in combination of the automation
provided by Prosystems engagement will reduce the lag time from the completion of field work and
report issuance.
Our reporting process is automated through our audit software. Once we obtain the Town's trial
balance in electronic format, we can import that into our system, which will automatically code and
update all financial statements and most note disclosures in the financial statements and notes. We can
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Section D -Specific Audit Approach
Town of Los Gatos Proposal for Auditing Services
also auto link tables, charts and other documents the Town would like to generate. All of this
information can be shared through our online secure lockbox/fileshare website at www.cnallp.com
and through our online engagement portal which is linked to our list of items. All agreed upon
adjustments will be linked in our audit software. This greatly reduces the report preparation time and
involvement of Town staff and creates more opportunity for review of information systems, internal
controls and management recommendations. At the end of this phase we will provide a summary of
audit adjustments and uncorrected misstatements (passed adjustments).
We anticipate that Phase Ill will comprise approximately 16% of the engagement hours, including the
majority of the clerical hours. The timing of each phase of the audit is estimated based on the
assumption that the Town will meet their close schedule and responsibilities as noted in the request for
proposal.
Please note that we generally hold entrance conferences at the beginning of Phase I and II and exit
conferences at the end of Phase I, II and Ill. However, we are available to meet with the Town at any
time.
Compliance and Program Specific Auditing
Included in all phases are specific procedures required to complete individual compliance items.
Analytic and sampling procedures generally follow those described in the preceding phase, but are
modified, when needed, to meet specific guidelines of the programs audited.
Recommendations for Improved Operations
We feel we have accumulated valuable knowledge in accounting and auditing which has allowed us to
offer a wide range of specific recommendations to increase the efficiency and effectiveness of our audit
clients. With our background, we can provide services that may be very beneficial to you presently and
in the future. As our client, you can look to us for informed support year-round in all areas of interest
or concern. In the course of our engagement with the Town, we will provide prompt, knowledgeable
answers to your questions regarding all aspects of accounting, finance, management, and operations. It
is our policy to discuss discrepancies and recommendations with Town staff directly involved and then
with management, as necessary. If an item warrants inclusion in the report as a finding, we will obtain
management's responses to each finding. All responses will be reviewed with management and
relevant committees before they are presented to the Town Council.
Irregularities and Illegal Acts
We will make an immediate, written report of all irregularities and illegal acts or indications of illegal
acts of which we become aware to the Audit Committee (or similar) and Attorney.
Control Risk Assessment
As part of our audit approach, we use KC forms, narratives, questionnaires and summary schedules to
gain an understanding of the control environment and assess its overall effectiveness. This helps us
identify the types of potential misstatements and factors that affect the risk of material misstatement
and their impact on the audit plan.
Analytical Procedures
Analytical procedures are used at three points of time during our audit; planning, substantive testing,
and final review of the completed financial statements. Analytical procedures are used to obtain
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Section D -Specific Audit Approach
Town of Los Gatos Proposal for Auditing Services
knowledge of conditions and events, to indicate the presence of possible misstatements, to provide
substantive evidence of balances and to assess the financial condition of the Town.
As we obtain knowledge about the Town, we will be able to direct our attention to areas requiring
greater audit emphasis as well as provide substantive evidence in support of recorded account balances.
Identification of Potential Audit Problems
Each year we approach the audit objectively and use a risk-based approach to anticipate any potential
audit problems. If anything were to come to our attention during the course of the audit, it would be
reported to the proper management level depending on the nature of the problem and as noted in the
RFP.
Resources Available for Standards Interpretations
In addition to the items published by GFOA, AICPA, FASB, and GASB, we use RIA checkpoint and
Thompsons as our main online reference material. As our client, the Town will have access to all our
resources.
Summary of Audit Phases {Generalized, Not All-Inclusive)
Entrance Conference
Planning Analytics
Interim List of Items
Risk Assessment
Internal Control Documentation & Testing
Management Points
Major Program and Major Funds
Exit Conference
Entrance Conference
General Audit Procedures
Confirmations
Final Major Programs and Major Funds
Finalize Audit Programs
Trial Balance and Leads
Substantive and Compliance Tests
Management Points
Initial Audit Adjustments
Initial Report Preparation
'-------------------! Exit Conference
The audit plan will be customized to meet your needs!
Phases I and II can
be combined.
II Chavan & Associates, LLP
0 0
Finalize TB and Audit Adjustments
Finalize Management Points and Findings
Final Review of Audit Files by Managers and Partners
Prepare, Assist With or Review Conversion Entries
Prepare Final Letters and Correspondence
Prepare and Issue First Drafts of Audited Financials, Compliance Reports and Opinions
Issue Final Audit Report
Final Exit Conference and Planning for Next Fiscal Year
Council Meeting, As Necessary
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Section D -Specific Audit Approach
Town of Los Gatos Proposal for Auditing Services
Summary of Team Assignments {Generalized, All-Inclusive)
► Engagement Partner I
• Overall Review •Audit Planning and Risk Assessment • Entrance/Exit Conferences •Team meetings •Team Assignments •Quality Control
t Engagement Partner �
•Overall Review •Review Audit Plan •Review Audit Programs •Update Team Assignments •Review Major Fund/Major Program Det. •Analytics •Review Working papers, Management Points and AJE's •Guide Audit Team •Entrance and Exit Conferences
t Engagement Partner t
•Final Review & Sign-off •Finalize Audit Plan •Finalize Audit Programs •Final Analytics •Prepare CAFR and Review Supporting Schedules •Review all Other Reports •Review and Finalize all Required Management letters and Correspondence •Exit Conferences, Committee and Board Presentations
► Associate Partner �
•Team Planning •Audit Binder Review •Working Paper Review •Management Point Review •Concurring Partner Review •Quality Control
t Associate Partner t
•Team Planning •Audit Binder Review •Working Paper Review •Management Point Review •Concurring Partner Review •Quality Control
t Associate Partner it
•Final Audit Binder Review •Final Working Paper Review •Final Management Point Review •Concurring Partner Review •Quality Control
II Chavan & Associates, LLP
I Senior � •Audit Planning •Audit Binder Preparation •Major Fund and Major Program Determination •Audit Programs •Internal Control Doc. and Testing •Compliance Control Doc. and Testing
t Senior t •Planning Update •Audit Binder Update •Finalize Major Program and Major Fund Determination. •Update and Finalize Audit Programs •Substantive Testing for Significant Accounts •Compliance Testing •Guide and Monitor Staff •Confirmations
t Senior � •Finalize Audit Binder •Review Staff Working papers •Review Staff Management Points •Review Reports •Prepare Assigned Reports •Review CAFR Prepared by Engagement Partner
► Staff ( •Internal Control Doc. and Testing • Significant Transaction Areas • Dept. and Desk Level Controls •Compliance Control Doc. and Testing • Single Audit •TDA/MTC •Team Planning
•Team Meetings
I Staff ( •Substantive Testing •Significant Transaction Areas (Cash, Investments, Capital Assets, long-term Debt, Pensions, Fund Balance, Net Position, Revenue, Expenditures) •Compliance Testing •Single Audit (Uniform Guidance)
•TDA/MTC •Team Planning •Team Meetings
I Staff t •Finalize Working Papers •Finalize Management Points •Prepare Assigned Reports •Assist with Report Review
The above chart provides a general overview of typical team assignments.
•Correspondence • Staff Support •Information Technology Support
•Information Technology Support •Confirmations
•Information Technology Support •Report Binding and Delivery
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Section D -Specific Audit Approach
Town of Los Gatos Proposal for Auditing Services
Summary of Roles and Responsibilities {Not All-Inclusive)
General Roles and Responsibilities
C&A LLP
The Engagement Partner will be responsible the overall planning, scheduling, review and coordination of Phase I.
The Associate Partner will provide fieldwork support when necessary and help maintain quality control.
The Senior/Manager will review workpapers, letters and reports and
help maintain quality control.
The Senior Professional Staff will focus on the more complex areas of controls and support the Engagement Partner.
The Professional Staff will focus on detail of tests of controls over financial, federal compliance and other areas as needed.
Town' Staff
During this phase, your staff will be expected to provide a preliminary balance sheet and revenues and expenditures by fund, policies and procedures for key controls, a preliminary summary of federal grants, the original budget, contact information for departments and confirmations, and generally provide the information included in the lists of items for interim. We also plan to interview various staff to document and test controls.
Testing controls will include sampling for significant areas. Our documentation of internal controls will be done in person and via interviews, unless otherwise
requested.
II Chavan & Associates, LLP
The Engagement Partner's focus will include finalizing the audit programs, substantive analytics, and overseeing the audit.
The Associate Partner will provide fieldwork support when necessary and help maintain quality control.
The Senior/Manager will review workpapers, letters and reports and
help maintain quality control.
The Senior Professional Staff will focus on substantive tests for significant accounts.
The Professional Staff will focus on substantive tests for significant accounts, federal compliance, and other required audits.
Town' Staff
During this Phase, your staff will be expected to provide the final balance sheet and revenue expenditures by fund and accounts
from the GL. We will prepare leadsheets in our audit software, but the organization should have adequate support for significant accounts. We will perform a review
of journal entries at this time and again before the final reports are issued, thus we will need access to journal entries. We will request reports for major grant programs, certain other programs, and business type activities. We will also perform a number of analytical procedures which will require staff responses, and this will be done in person in most cases.
The Engagement Partner's focus will be on overall reporting, guidance and working with District staff to complete the reporting phase.
The Associate Partner will assist in report prepartion and client communication.
The Senior/Manager will review workpapers, letters and reports,
and help maintain quality control.
The Senior Professional Staff will focus on report preparation and assisting the engagement partner and guiding our staff.
The Professional Staff will act in a support role during this phase.
Authoritie's Staff
We expect the Town' staff to review and respond to all reports required to complete the audit. We anticipate the Town will provide or
assist us in gathering information needed for the ACFR and note disclosures. Management will be required to sign a representation letter which will be provided by us.
Management will be required to provide responses to any and all recommendations and findings included in the management letter. Report preparation will be completed as outlined in the RFP, unless otherwise agreed prior to Phase Ill of the audit.
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Section D -Specific Audit Approach
Town of Los Gatos Proposal for Auditing Services
Summary of Staff Hours by Phase
Phases Total
Level of Staff I II Ill Hours
Engagement Partner 32 32 24 88
Associate Partner 4 4 4 12
Supervisor 32 32 8 72
Senior Staff 36 36 8 80
Professional Staff 42 42 8 92
Administrative Staff 2 2 4 8
Totals 148 148 56 352
Summary Timeline
Segment Estimated
Entrance Conference March 1, 2022
Audit Planning C&A's Office March 1, 2022
List of Items Required by Client March 15, 2022
Interim Testing May 2, 2022
Interim Exit Conference and Completion May 9, 2022
Preparation and Mailing of Confirmation Letters to 3rd Parties July 1, 2022
Year-end Field Work Planning Meeting August 1, 2022
Update List of Items Required by Client -Final (Initial Done at Interim) August 1, 2022
Year-end Field Work and Compliance Testing September 26, 2022
Exit Conference September 30, 2022
Progress List of Management Point and Recommendations October 7, 2022
Final List of Management Point and Recommendations October 21, 2022
Audit Adjustments October 21, 2022
Draft Reports, Financials, Management Letters November 4, 2022
Final Reports, Financials, Management Letters November 25, 2022
Council, Commission & Public Presentations As Needed
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11/111
11/111
Ill
Ill
Ill
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Audit Scope
Section D -Specific Audit Approach
Town of Los Gatos Proposal for Auditing Services
We understand the scope of our services to be as follows:
A.Audit and issue a report on the fair presentation of the Basic Financial Statements of the Town of
Los Gatos in accordance with generally accepted auditing standards; the standards set forth for
financial audits in the U.S. General Accountability Office's most recent Government Auditing
Standards; the provisions of the federal Single Audit Act of 1984 and the Single Audit Act
Amendments of 1996; 0MB guidance for federal awards and agreements as provided in the Code of
Federal Regulation (CFR ) 2 Part 200, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards; and relevant GASB Statements. The audit shall be
conducted for the purpose of forming an opinion on the Town's Basic Financial Statements taken as
a whole, and to determine whether the operations were conducted in accordance with legal and
regulatory requirements.
B.Prepare, with limited involvement of the Town, the Comprehensive Annual Financial Report (Annual
Financial Report) for the Town of Los Gatos and the activities of the private-purpose trust funds of
the Successor Agency to the Los Gatos Redevelopment Agency. The Town shall retain ultimate
responsibility for the approval and dissemination of the Annual Financial Report; however, C&A shall
prepare the draft and complete related tasks, including but not limited to the following:
a.Evaluate the document against the Annual Financial Report reporting checklists of the
Government Finance Officers Association (GFOA) and the California Society of Municipal Finance
Officers (CSMFO) to ensure eligibility for their respective Annual Financial Report award
programs. It is the Town's intention to continue to receive these awards annually and expect
that the Annual Financial Report will meet their requirements.
b.Verification of implementation of recommended improvements from prior year submissions to
GFOA under the Annual Financial Report award program.
c. Proofreading and overall review, including layout, design, and making suggested improvements
to the document.
d.Printing and binding of the final document.
e.Assisting with the written responses to the recommendations and questions posed by the
Finance Commission prior to the Annual Financial Report's consideration by Town Council..
C.In the required reports on internal controls, C&A shall communicate any reportable conditions
found during the audits. A reportable condition is defined as a significant deficiency in the design or
operation of the internal control structure, which could adversely affect the organization's ability to
record, process, summarize, and report financial data consistent with the assertions of management
in the financial statements. Reportable conditions that are also material weaknesses shall be
identified as such in the report. Non-reportable conditions discovered shall be reported in a
separate letter to management, which shall be referred to in the reports on internal controls. The
reports on compliance shall include all instances of noncompliance.
D.C&A will prepare a management letter, if applicable, reporting material weaknesses and significant
control deficiencies. Prior to completion of the management letter, C&A shall meet with the Town
Manager, Director of Finance, the Finance and Budget Manager, the Town Finance Commission, and
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Section D -Specific Audit Approach
Town of Los Gatos Proposal for Auditing Services
other Town staff as assigned to review findings and recommendations in detail before the final
letter and Town responses are published.
E.Optional Services
a.Development of Agreed Upon Procedures for the review and reporting of Measure G district
sales tax revenues and expenditures.
b.Preparation of the Cities Financial Transactions and Compensation Report (State Controller's
Report).
F.Deliverables
a.One electronic file, in PDF format, and 25 bound copies, of the Annual Financial Report,
including the necessary audit opinion letters.
b.One electronic file, in PDF format, and 25 bound copies, of the federal single audit report, if
applicable, including the necessary audit opinion letters.
c.One electronic file, in PDF format, and 25 bound copies, of the management letter, if applicable.
d.One electronic file, in PDF format, and 25 bound copies, of the required Appropriations Limit
Review reporting upon agreed-upon procedures on compliance with Proposition 111 for the
year audited.
G.Irregularities and Illegal Acts. Auditors shall be required to make an immediate, written report of all
irregularities and illegal acts or indications of illegal acts of which they become aware to the
following parties:
a.Los Gatos Town Council
b.Town Manager
c.Town Attorney
H.We will provide consultation regarding accounting and compliance issues found throughout the
contract period.
I.We will attend Town Council meetings as requested throughout the contract period.
J.A partner will be available to present the audit report to the Finance Commission and/or Council.
K.All working papers and reports will be retained, at the auditor's expense, for a minimum of seven (7)
years, unless the firm is notified in writing by the Town of the need to extend the retention period.
C&A will make such working papers available, on request, to the following parties or their designees:
a.Town of Los Gatos
b.Parties designated by the Town, or federal or state governments, as part of an audit quality
review process
c.Auditors of entities of which the Town is a subrecipient of grant funds
L.C&A shall respond to the reasonable inquiries of successor auditors and allow successor auditors to
review working papers relating to matters of continuing accounting significance.
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Section E
Discussion of Relevant Accounting Issues
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Section E -Discussion of Relevant Accounting Issues
Town of Los Gatos Proposal for Auditing Services
Discussion of Relevant Accounting Issues
The Governmental Accounting Standards Board (GASB) continues to issue new statements in an effort to
make financial information accounted for, and reported by, local governments more reliable. Often, the
statements issued by GASB are confusing and difficult to apply. Therefore, it is our goal to keep our
clients informed about upcoming standards and how they may affect their future. Our technical
expertise and guidance in the implementation and interpretation of GASB statements will be available
throughout the year. We offer inclusive consultation throughout the term of our contract. We also
offer in-house training via internally developed seminars. For example, we have given presentations
and training on compliance requirements for specific grants and the key controls needed to meet those
requirements. Generally, these sessions provide about 8 hours of training, in addition to year-round
consultation, and are included in the audit.
In addition, we will send periodic e-mails and newsletters when significant new accounting
pronouncements are issued. The most important factors we have discussed include: The potential
impact of new pronouncements, the due date and the changes in the reporting presentation, planning
the Town should do to ensure it is prepared and the assistance we can provide to ensure compliance.
We also prepare template note disclosures and update our template financial statements to meet the
reporting standards. In relation to GASB 84, we provided clients with an analysis workbook that is a Q&A
document to help them identify component units and how to report pensions, postemployment plans
and custodial funds.
The following is a summary of upcoming accounting pronouncements that could have an impact on the
Town:
1.Disclosure Framework:
The objective of this project is to develop concepts related to a framework for the development
and evaluation of notes to financial statements for the purpose of improving the effectiveness of
note disclosures in government financial reports. The framework will establish criteria for the
Board to use in evaluating potential note disclosure requirements during future standards-setting
activities and in reexamining existing note disclosure requirements. Those concepts also will
provide governments a basis for considering the essentiality of information items for which the
GASB does not specifically provide authoritative disclosure guidance.
Update: The Concepts Statement, Communication Methods in General Purpose External Financial
Reports that Contain Basic Financial Statements; Notes to Financial Statements, has taken a turn
from the original timeline. There were specific discussions related to the concept of essentiality. As
the concept of essentiality is significant to the Concepts Statement, it would have a broad impact to
users of the financial statements and Governmental Accounting Standards Advisory Council
indicated some concern over the significance of the change in the proposed definition; the Board
voted to re-expose the proposed concepts in an exposure draft. GASB anticipates the comment
period on this revised exposure draft of this Concepts Statement to open in July 2021.
2.Financial Reporting Model:
Reexamination of Statements Nos. 34, 35, 37, 41 and 46 and Interpretation 6: The objective of this
project is to make improvements to the financial reporting model, including Statement No. 34,
Basic Financial Statements-and Management's Discussion and Analysis-for State and Local
II Chavan & Associates, LLP Pa e23
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Section E -Discussion of Relevant Accounting Issues
Town of Los Gatos Proposal for Auditing Services
Governments, and other reporting model-related pronouncements (Statements No. 35, Basic
Financial Statements-and Management's Discussion and Analysis-for Public Colleges and
Universities, No. 37, Basic Financial Statements-and Management's Discussion and Analysis-for
State and Local Governments: Omnibus, No. 41, Budgetary Comparison Schedules-Perspective
Differences, and No. 46, Net Assets Restricted by Enabling Legislation, and Interpretation No. 6,
Recognition and Measurement of Certain Liabilities and Expenditures in Governmental Fund
Financial Statements). The objective of these improvements would be to enhance the effectiveness
of the model in providing information that is essential for decision-making and enhance the ability
to assess a government's accounting and to address certain application issues, based upon the
results of the pre-agenda research on the financial reporting model.
Update: After public hearings were held in March and April 2021, GASB is currently redeliberating
the drafted Statement, Financial Reporting Model Improvements. The agenda on this Concepts
Statement extends into 2022 with a draft expected in first quarter 2022.
3.Revenue and Expense Recognition:
The overall objective of this project is to develop a comprehensive, principles-based model that
would establish categorization, recognition and measurement guidance applicable to a wide range
of revenue and expense transactions. Achieving that objective will include: (1) development of
guidance applicable to topics for which existing guidance is limited, (2) improvement of existing
guidance that has been identified as challenging to apply, (3) consideration of a performance
obligation approach to the GASB's authoritative literature and (4) assessment of existing and
proposed guidance based on the conceptual framework. The expected outcome of the project is
enhanced quality of information that users rely upon in making decisions and assessing
accountability.
On the heels of the Financial Accounting Standards Boards (FASB) roll out of the revenue
recognition guidance, GASB has taken up a similar project reviewing the guidance for recognition of
revenues and expenses. Deliberations are anticipated to be ongoing through November 2022.
While this project is not anticipated for completion until 2025, the broad application and impact
will make it one to keep up to date with its progress.
4.GASB Statement No. 87-Leases
Most organizations have transitioned their immediate focus on the implementation of GASB 87 as
it will become effective for most fiscal 2022 year-end financial statements. GASB 87 defines a lease
as a contract that conveys control of the right to use another entity's non-financial asset for a
period of greater than one year. Purchased power agreements are exempt from this treatment
(unlike the Financial Accounting Standards Board lease standard). GASB 87 is effective for fiscal
years beginning after June 15, 2021.
II Chavan & Associates, LLP Pa e24
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Section F
Additional Information
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Section F -Additional Information
Town of Los Gatos Proposal for Auditing Services
Current Client List
Cities/Towns CAFR GAS GAGAS Single Audit
City of Albany • • •
City of Del Rey Oaks • •
City of Lincoln •
City of Marina • • • •
City of Orovil I e • • • •
City of Pacific Grove • • • •
City of Point Arena • •
City of Rocklin • • • •
City of Saratoga • • • •
City of Suisun City • • • •
Town of Yountville • • •
Local Education Agencies CAFR GAS GAGAS Single Audit
An tel ope School District • •
Berkeley Ulified School District
BurlingameSchool District • . .
Cabrillo U,ified School D'strict • • .
Corning Uni on High School District . . .
Cotati -Rohnert Park Unified School District . . .
Cottonwood Uni on School District • •
Golden Valley Unified School District . . .
Hills borough City School District . . .
Jefferson Union High School District . . .
John Swett Ulified School District
Las Lomi tas School D. strict • •
Lassen View Union Elementary School District • •
Los Altos School District • • • •
Luther Burbank School District . . .
Menlo Park Gty School District . . .
Mil I brae School District . .
Mountain View Whisman School District . . .
Napa Val I ey Unified School District . . •
Orchard School District . •
Pacifica School District . • •
Red Bluff Joint Uli on High School D. strict • . .
Red Bluff Union Elementary School District • • •
Rosel and Elementary School District . • •
San Bruno Park School District . . .
San Carlos School District . . .
San LorenzoValleyUnified School District • • •
San Mateo Foster City School District . . •
San Rafael City Schools
Santa Rosa City Schools • • •
Sequoia Ulion High School District • • •
Sonoma Valley Unified School District . . .
Soquel Uni on Elementary School District • • •
South San Francisco Ulified School District
Union School District . . .
West County Transportation Agency . .
Woodside Elementary School Di strict • •
II Chavan & Associates, LLP
EAAP Other Bond (P39) •
• •
• •
EAAP Other Bond (P39) • . . • . • . . • . . . • • • • • • • . . • • . . . • . • • . . • • . . • • • • . . • • • • • . . . • • . . . . . • •
Page 25 11
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Section F -Additional Information
Town of Los Gatos Proposal for Auditing Services
Charter Schools CAFR GAS GAGAS Single Audit
Charter School of Morgan Hill ., .,
Cottonwood Creek Charter School ., .,
Credo High School ., .,
Kid Street Charter School ., .,
The Reach Charter School ., .,
Mission Preparatory School ., .,
Pathways Charter School ., .,
Roseland Charter School ., ., .,
RSTEMAcadamy Charter School ., .,
Stone Bridge Charter School ., .,
Woodland Star Charter School ., .,
Special Districts CAFR GAS GAGAS Single Audit
Bay Area Water Supply Cooservation Agency ., ., .,
Castro Valley Sanitary District ., .,
El Dorado Hil Is Community Services District ., ., .,
Lake Canyon Community Services District ., .,
Midpeninsul a Region al Open Space District ., ., .,
Purissima Hills Water District
Ross Val I ey Sanitary Ci strict ., ., .,
Santa Clara County Regional Open Space Auth ., ., .,
Sausalito-Marin City Sanitation District ., ., .,
Stege Sanitary District ., .,
Silicon Valley Clean Water ., .,
South San Fanci sco Conference Center .,
The d ti es' Group ., .,
Valley of the Moon Fire District ., .,
West Bay Sanitary District ., .,
West Val I ey Sanitation District ., .,
Westborough Water District
Non Profit Organizations CAFR GAS GAGAS Single Audit
Boys and Girls Clubs of Sonoma Valley .,
Center for Empowering Refugees & Immigrants .,
Chi I dren of Grace
Far West Wheel Chair Association .,
Hidaya Found a ti on .,
Mission Language and Vocational School .,
Morgan Hill Charter School Foundation .,
NASA AM ES Exchange .,
O'Connor Tract Co-Operative Water Co. .,
Peninsula Conflict Resolution Center .,
Redwood City Education Foundation .,
San Mateo County Exposition and Fair Association .,
Sonoma Val I ey Hospital Foundation .,
The Moc a Found a ti on .,
The San Jose Llbrary Foundation .,
Tru .,
Work2fu rure Foundation ., ., .,
Privately Held Corporations CAFR GAS GAGAS Single Audit
Air Filter/Control
Dfusion, Inc. ., ., .,
Diagnostics for the Real World ., ., .,
FRTek US, LLC .,
Pathway to Choices .,
Roberts of Woodside
Sociometrics ., ., .,
II Chavan & Associates, LLP
EAAP Other Bond (P39) ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
EAAP Other Bond (P39)
.,
.,
EAAP Other Bond {P39) ., ., .,
., ., ., ., ., ., ., ., .,
.,
.,
EAAP Other Bond (P39) .,
.,
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Technology in the Audit
Section F -Additional Information
Town of Los Gatos Proposal for Auditing Services
C&A is a paperless firm and we use secure cloud servers for file sharing. We have Lenovo laptops and
Fujitsu scanners that we use in the field. Our secured laptops are synchronized to our cloud server every
day to avoid loss of data. The scanners allow for flexibility during the audit since it is not feasible to
expect every document in electronic format.
Our secure online fileshare and engagement organizer provide for a better option over e-mailing
electronic files. Each of our clients has an account login username and password through our website or
an emailed link that allows them to upload files. This is especially helpful with sensitive information
such as payroll data as it is much more secure than e-mail.
Our audit software is ProSystems fx Engagement which we compliment with Knowledge Coach (KC)
audit programs and workpapers. These programs allow us to roll-forward audit information without
having to replace the audit programs in the binder because they automatically update with changes in
auditing and accounting standards every month. Finally, we have purchased data extraction software
for each of our laptops that convert Adobe and other file types to Word and Excel.
All of the above-mentioned technological innovations make the audit more efficient and provides us the
opportunity to spend time in areas that are more meaningful to the District. It also reduces the time
and effort required by District staff to provide information and minimizes redundancy from year to year
in the audit.
Proposal Exceptions
C&A did not have any exceptions or requested changes to the Town's RFP conditions or requirements.
C&A's Responsibility for Detecting Fraud
While audits are not designed to root out every instance of fraud, we have a responsibility to detect
material misstatements in the financial statements caused by either fraud or error. Accordingly,
generally accepted auditing principles prescribe specific audit procedures to detect fraud that must be
carried out during each audit. C&A must hold a fraud brainstorming session at the beginning of the
audit. This session is designed to provide a time for the audit team to consider how the client could
commit fraud. The brainstorming meeting is used to set a tone of professional skepticism in the audit.
Because committing material financial statement fraud often requires adjustments to financial records,
C&A will test journal entries for any signs of manipulation. Another likely place for fraud is in accounting
estimates since management may be able to influence accounting estimates to manipulate the financial
statements. Generally, we perform procedures to determine if the methodology for completing
accounting estimates has changed from the prior year and examine the directionality of estimates as a
whole. We also closely examine significant unusual transactions outside of normal operations. This
examination requires organizations to explain the purpose and rationale for the transaction and we
corroborate management's response with other information received during the audit.
II Chavan & Associates, LLP Page 27 11
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Attachments
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Attachment A -Peer Review Report
REPORT ON THE FIRM'S SYSTEM OF QUALITY CONTROL
June 18, 2021
To the Partners ofChavan & Associates, LLP
and the Peer Review Committee of the
California Society of Certified Public Accountants
We have reviewed the system of quality control for the accounting and auditing practice of Chavan & Associates,
LLP in effect for the year ended December 31, 2019. Our peer review was conducted in accordance with the Standards
for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of
Certified Public Accountants (Standards).
A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as
described in the Standards may be found at www.aicpa.org/prsummary. The summary also includes an explanation
of how engagements are identified as not having been performed or reported in conformity with applicable
professional standards, if any, are evaluated by a peer reviewer to determine a peer review rating.
Firm's Responsibility
The firm is responsible for designing a system of quality control and complying with it to provide the firm with
reasonable assurance of performing and reporting in conformity with applicable professional standards in all material
respects. The firm is also responsible for evaluating actions to promptly remediate engagements deemed as not
performed or repo1ted in conformity with professional standards, when appropriate, and for remediating weaknesses
in its system of quality control, if any.
Peer Reviewer's Responsibility
Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance
therewith based on our review.
Required Selections and Considerations
Engagements selected for review included engagements performed under Government Auditing Standards including
compliance audits under the Single Audit Act.
As a part of our peer review, we considered reviews by regulatory entities as communicated by the firm, if applicable,
in determining the nature and extent of our procedures.
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
Attachment A -Peer Review Report To the Partners ofChavan & Associates, LLP
and the Peer Review Committee of the
California Society of Certified Public Accountants Page 2
Opinion
In our opinion, the system of quality control for the accounting and auditing practice of Chavan & Associates, LLP in effect for the year ended December 31, 2019, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficiency(ies) or fail. Chavan & Associates, LLP has received a peer review rating of pass.
Santa Ana, California
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
Attachment A -Peer Review Report
PowELL & SPAFFORD, 1 c.
CERl 11-lt-D PUl31 IC .\CCOL;'-T'-\ '1 IS
Report on the Firm's System of Quality Control
To Chavan & Associates, LLP
and the Peer Review Committee of the California Society of CPAs
Jessie C. Powell, CPA (Rel.)
Palrick D. Spofford, CPA
Lv IHI I I 1, ih, ( .1.r, r n, I ,� { 'If I ( f .\,1 f unbnn,
\ I, 1111 .--r: ,._\m, rH 111 l,i,,lituft .J ( 1, l,fu. / I ul !u �\1 rrunl,,1',
We have reviewed the system of quality control for the accounting and auditing practice of Chavan & Associates, LLP (the firm) in effect for the year ended December 31, 2016. Our peer review was
conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants (Standards).
A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as described in the Standards may be found at www.aicpa.org/prsummary. The summary also includes an explanation of how engagements identified as not performed or reported in conformity with
applicable professional standards, if any, are evaluated by a peer reviewer to determine a peer review rating.
Firm's Responsibility
The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. The firm is also responsible for evaluating actions to promptly
remediate engagements deemed as not performed or reported in conformity with professional standards, when appropriate, and for remediating weaknesses in its system of quality control, if any.
Peer Reviewer's Responsibility
Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance therewith based on our review.
Required Selections and Considerations
Engagements selected for review included engagements performed under Government AuditingStandards, comp I iance audits under the Single Audit Act and audits of employee benefit plans.
As a part of our peer review, we considered reviews by regulatory entities as communicated by the firm, if applicable, in determining the nature and extent of our procedures.
-1-
447 Mis OU Pi C url • ccllands, CA 92373 • PO. ox ...J.7 • Redlands, CA '2375
Telepl1one 909-792-1 52 • fox 909-79.2-2015
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E Attachment A -Peer Review Report
Deficiencies Identified in the Firm's System of Quality Control
We noted the following deficiencies during our review:
I.The firm's quality control policies and procedures addressing continuing professionaleducation (CPE) are not sufficient to provide reasonable assurance that its personnel willhave the education necessary to perform engagements in accordance with professional andregulatory requirements. The courses taken by firm personnel did not provide them with
sufficient information about current developments in auditing matters. This contributed toaudit engagements performed under Government Auditing Standards, including complianceaudits under the Single Audit Act and audits of employee benefit plans, not conforming to
professional standards in all material respects in the areas of proper presentation anddisclosure for required supplemental information (RSI), documentation of independence,preparation of the schedule of expenditures of federal awards and documentation of testingspecific to major program compliance. The audits of employee benefit plans did not conformto professional standards related to reporting, internal control documentation and participant
testing.
2.The firm's quality control policies and procedures regarding monitoring did not provide it
with reasonable assurance that the policies and procedures relating to the system of qualitycontrol are operating effectively. The firm's quality control policies and procedures did notinclude ongoing inspection, and post issuance reviews to assist in providing ongoingconsideration and evaluation of the quality control system.
Opinion
ln our opinion, except for the deficiencies previously described, the system of quality control for the accounting and auditing practice of Chavan & Associates, LLP in effect for the year ended December 3 I, 20 I 6, has been suitably designed and comp I ied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficiency (ie!)) or fail. Chavan & Associates, LLP has
received a peer review rating of pass with deficiencies.
March 19, 2018
-2-
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E Attachment B -Prepared by Client List
LIST OF ITEMS (FORMAT AND PRESENTATION IS A DOWNLOAD FROM ENGAGEMENT ORGANIZER AND LESS PRESENTABLE)
SECTION NAME
Interim -Financial
Interim -General
Interim -Investments
Interim -Cash and Other
Interim -Receipts/Cash
Interim -Disbursements
Interim -Procurement
Interim -Commitments
Interim -Payroll/HR
REQUEST ITEM
1.1 -Preliminary Trial Balance for FY21 (July 1, 2020 to June 30, 2021) -FORMAT: Excel
1.2 -Chart of Accounts, with:
fund names and type ,account type, revenue category, expense department, etc. Please include a
description for any new funds not included in the FY21 audited financial statements. -FORMAT: Excel
1.3 -2021 adopted budget and amendments, if any -FORMAT: Any
1.4 -2021 reconciliation of budget changes and amendments -FORMAT: Any
1.5 -Most recent board packet and financial information submitted to the board -Unless available
online FORMAT: Adobe
2.0 -Internal accounting manual, policies and procedures. -Please ensure this includes all policies
regarding purchasing, procurement and vendor card policy, hiring, fund balance or reserve,
investment, billing, budget, debt, etc. FORMAT: Adobe
2.1 -Capital asset policy and procedures for property, plant, equipment, infrastructure and
construction in progress. -unless included in the internal accounting manual provided above. FORMAT:
Adobe
2.2 -A summary of committees and subcommittees with contact information -FORMAT: Any
2.3 -Council by-laws -FORMAT: Adobe
2.4 -Organizational Chart -FORMAT: Any
2.5 -List of departments and contact information for main contact in each department. -FORMAT: Any
3.0 -Investment policy-unless included in the internal accounting manual provided above. FORMAT:
Any
3.1 -Most recent investment report approved by the Council -FORMAT: Any
4.0 -List of all bank and brokerage accounts under the Town's name and tax ID. Please include the bank
and brokerage contact information. Where applicable, please note the purpose, restrictions, fund, etc.
associated with each account -FORMAT: Any
5.0 -List of all locations/departments collecting cash and/or checks over the counter. -FORMAT:
Any .. ••
5.1 -Cash receipts listing/register by location through today -FORMAT: Excel
5.2 -For the Enterprise funds, please provide the most recent rate studies and council-approved rate
changes.
6.0 -Summary of purchases by vendor through field work date -FORMAT: Excel
6.1 -Warrant register (including any EFT) from 7/1/2020 through field work date. -Please include the
account code, vendor, amount, warrant#, and warrant date FORMAT: Excel
6.2 -List of credit cards and store cards/accounts with cardholder names, account numbers, and limits.
If the name of the card and the name used as the vendor for disbursements are different, please
indicate the vendor name as well. -FORMAT: Any
6.3X -Support for Sampled Disbursements
7.0-List of projects that required formal bids awarded during fiscal year 2021.
7.1 -List of public projects over $5,000 -FORMAT: Any
8.0 -List of contracts entered into and open for 2021 -FORMAT: Any
9.0X -Payroll Sample
9.0 -Payroll register paid in March 2021 and November 2020 -FORMAT: Adobe
9.1 -List of employees, including identification of employees who work on federal programs,
department, and category code (or job title) -FORMAT: Excel
9.2 -List of new hires with hire dates and category code (or job title) -FORMAT: Excel
9.3 -List of terminated employees with termination dates and category code (or job title) -FORMAT:
Any
9.4 -MOUs, employment contracts, management compensation agreements, Council compensations
arrangements and supporting salary schedules -FORMAT: Adobe
9.5 -Employee handbook and/or HR policies Handbook -unless included in the internal accounting
manual provided above. FORMAT: Adobe
9.6 -Conflict of interests policies for employees and Council, if any-unless included in the internal
accounting manual provided above. FORMAT: Adobe
DocuSign Envelope ID: 2529C044-9E2 4-4 732-8959-482B8D58876E Attachment B -Prepared by Client List
LIST OF ITEMS (FORMAT AND PRESENTATION IS A DOWNLOAD FROM ENGAGEMENT ORGANIZER AND LESS PRESENTABLE)
SECTION NAME
Interim -Debt
Federal Compliance
GANN Limit
Year-End -General
Year-End -Reporting
REQUEST ITEM
9.7 -List of employees receiving early termination benefits and a summary of those benefits, if any -
FORMAT: Any
9.8 -Summary list of OP EB plans and retirement plans offered to employees, if any. -FORMAT: Any
9.9 -Census information (list of employees and retirees) sent to the actuarial for the retiree health plan
(OPEB) valuation report (GASB 75). Please include their names, date of birth, and female/male. -
FORMAT: Excel
9.10 -List of employees currently enrolled in the CalP ERS pension retirement plan. Please include their
names, date of birth, and female/male. (GASB 68) FORMAT: Excel
10.0 -All debt agreements -FORMAT: Adobe
10.1 -Amortization schedules for all long-term debt -FORMAT: Excel
10.2 -Summary of capital and operating leases -Only if annual payment exceeds $10,000 FORMAT:
Excel
10.3 -Agreements for any new or amended capital or operating leases. -Only if annual payment
exceeds $10,000 FORMAT: Adobe
11.0 -Grant tracker -schedule of expenditures of federal awards through date of field work. Please
include the CFDA#, amount awarded, amount spent current year, amount spent for award if multi year
award, program name, federal department name, pass-through entities, etc. -Please note if any
portion of the State Revolving Fund loan is federally funded and if there were any additional draw
downs in FY21. FORMAT: Excel
12.0 -Adopted resolution for the most recent appropriations limits. FORMAT: Adobe
12.1 -City's calculation of the most recent GANN limit
12.2 -Department of Finance Price Factor and population information used for the GANN limit
calculation
13.0 -Detailed Trial Balance or Financial Summary Report by Fund and Object for June 30, 2021 -
FORMAT: Excel
13.1 -Revenue and Expenditure report with adopted budget, final budget, actual and variance by Fund
and Object for the fiscal years ended June 30, 2021 -FORMAT: Excel
13.2 -A list of journal entries from July 1, 2020 through date of field work. -This will also cover
subsequent events. FORMAT: Excel
13.3 -List of all related parties known by the Town as well as policies and procedures used by City to
identify related parties. FORMAT: Any
13.4 -Significant events after year end, such as debt agreements, significant purchases or contracts.
Required subsequent event disclosure. FORMAT: Any
14.0 -A list of commitments in dollar amounts to vendors and contractors outstanding at 6/30/2021,
that have not been recorded in accounts payable or accrued liabilities. (encumbrances, open PO's and
contracts) -Required for disclosure. Please list original and remaining commitment balances. This
would include fire and police services contracts. FORMAT: Excel
14.1 -A list of Joint Powers Authorities (JPAs) for which the Town is a part of, the purpose of each JPA,
the Town's role and contact information -FORMAT: Any
14.2 -The most recently available audit reports from JPAs for which the Town is a member. -
FORMAT: Paper or Adobe
Year-End -Cash and Investments 15.0 -Bank reconciliations 6/30/2021 and 7/31/2021 -FORMAT: Any
15.1 -Bank statements for all cash accounts as of 6/30/2021 and 7/31/2021 -FORMAT: Paper or
Adobe
15.2 -Summary of restricted cash as of June 30, 2021 -FORMAT: Any
15.3 -Brokerage and/or LAIF statements for the period ended June 30, 2021 -FORMAT: Paper or
Adobe
15.4 -If not included in brokerage statements or treasurer's report, please provide a breakdown of
investment maturities by type of investment in the categories of 12 moths or less, 13-24 months, 25-3 6
months, 37-48 months and 49-60 months. -If only deposit money in LAIF, checking or savings, this will
not be applicable FORMAT: Any
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E Attachment B -Prepared by Client List
LIST OF ITEMS (FORMAT AND PRESENTATION IS A DOWNLOAD FROM ENGAGEMENT ORGANIZER AND LESS PRESENTABLE)
SECTION NAME
Year-End -Accounts Receivable
and Revenue
Year-End -Capital Assets (PP&E)
Year-End -lnterfund
Year-End -Accounts Payable
Year-End -Deposit Payable
Year-End -Other Liabilities
Year-End -Accrued Liabilities
Year-End -Payroll
Year-End -PERS
Year-End -OPEB
REQUEST ITEM
15.5 -Summary of fair values by account or type of asset as required by GASB 72 (please contact
sheldon@cnalip.com if you need clarification or assistance with this) -If only deposit money in LAIF,
checking or savings, this will not be applicable FORMAT: Any
16.0 -Summary schedule of AR by customer, government or other resource as of 6/30/2021 -Please
also include a aging report FORMAT: Excel
16.1 -Cash receipts listing/register by location from July 1, 2021 to field work. Please ensure the report
at least includes the date, description and amount. FORMAT: Excel
16.2 -Reconciliation of property taxes
16.3 -Schedule of gas tax apportionment from the State Controller's Office
16.4 -Reconciliation of sales tax revenue to the general ledger and copies of BOE remittances
17.0 -Summary schedule showing capital assets beginning balances, additions, deletions, transfers, and
ending balances for both governmental and proprietary capital assets by category as of June 30, 2021 -
FORMAT: Excel
17.1 -Detailed listing capital assets at June 30, 2021, including cost, accumulated depreciation and
current year depreciation -FORMAT: Excel
17.2 -List of all CIP by program with beginning, additions, deletions (transfers), and ending balance for
fiscal year ending 6/30/21, if applicable -If possible, please include warrant/EFT #s for additions.
FORMAT: Excel
17.3 -Land or property held for sale and its net realizable value, if any. -FORMAT: Excel
17.4 -Depreciation expense by function for 6/30/2021 -FORMAT: Excel
17.XX Capital Asset Sample Support
18.0 -Summary schedule of balances due to and due from funds as of 6/30/2021 -This schedule should
have three columns, the first column will report the fund with the due from (receivable), the second
column will report the due to (payable), and the third column should explain the purpose of the
transaction FORMAT: Excel
18.1 -Summary schedule of transfers in and transfers out and explanations as to the purpose of the
transfers for FYE 2021 -FORMAT: Excel
19.0 -Summary of AP dollar balances by vendor and fund at June 30, 2021 -FORMAT: Excel
19.1 -Warrant register from 7/1/2021 to 9/1/2021. Please ensure this report includes the fund and
object for each warrant. Excel format.
20.0 -List of deposit payables and reason for deposits -FORMAT: Any
21.0 -Insurance claim payable schedule showing beginning claim payable, claims incurred,
increase/decrease in estimate liability for prior claim, claim paid, and ending claim payable for FYE
2021 -If not applicable, identify the cities total potential exposure after insurance. This could simply
be the Town's deductible per occurrence. FORMAT: Any
21.1 -Open insurance claim report as of June 30, 2021 -FORMAT: Any
22.0 -Supporting schedules for accrued salaries and Payroll Register covering the final pay period of
the year for FY 2021 -FORMAT: Paper or Adobe
23.0 -Payroll register with YTD totals as of June 30, 2021 -FORMAT: Paper or Adobe
23.1 -Payroll reconciliations from register or 941's to GL for FYR 6/30/2021, if any. -FORMAT: Excel
23.2 -Schedule of vacation and sick accruals, including beginning balance, earned, paid, and ending
balance. (Compensated absences) for FYE 6/30/2021 -Please provide in hours and dollars FORMAT:
Excel
24.0 -Cal PERS actuarial valuation report for GASB 68 reporting, if not provided online on Cal PERS
website -FORMAT: Paper or Adobe
24.1 -Schedule of CalPERS covered member, noting active and inactive members and which members
are receiving benefits, for each plan -If not already provided at interim FORMAT: Any
24.2 -Summary of CalPERS contributions by employer and employee, for each plan -FORMAT: Any
25.0 -Actuarial report for GASB 75, if applicable. -If not already provided at interim FORMAT: Paper
or Adobe
25.1 -CERBT or other trust account statement for FYE 6/30/2021 -FORMAT: Paper or Adobe
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E Attachment B -Prepared by Client List
LIST OF ITEMS (FORMAT AND PRESENTATION IS A DOWNLOAD FROM ENGAGEMENT ORGANIZER AND LESS PRESENTABLE)
SECTION NAME
Year-End -Debt
Year-End -Fund Balance/Net
Assets
Year-End -GANN
REQUEST ITEM
26.0 -Schedule of long term debt showing beginning balance, payment, and ending balances and
amounts due within one year for FYE 6/30/2021 -FORMAT: Paper or Adobe
26.1 -Debt agreements and amortization schedules, if any changes or for new debt. Please include any
new debt issued subsequent to year end as well -If not already provided at interim FORMAT: Any
27.0 -Final summary of fund balance classifications per GASB 54 (Nonspendable, Restricted, Assigned
and Unassigned) -FORMAT: Excel
27.1 -Town Council resolution supporting committed fund balances per GASB 54 and any revenue
stabilization agreements, if any. -FORMAT: Paper or Adobe
28.0 -GANN Limit resolution and council agenda report for 2021. -Please provide the original
resolution and calculation as well as the final resolution and calculation, if applicable FORMAT: Adobe
or paper
28.1 -GANN Limit letter from state department of finance with population information -FORMAT:
Adobe or paper
DocuSign Envelope ID: 2529C044-9E24-4732-8959-482B8D58876E
ATTACHMENT C PROPOSER WARRANTIES
The proposer warrants that it can and will provide and make available, at a minimum, all of
the services and deliverables set forth in this RFP.
The proposer warrants that it is willing and able to obtain an errors and omissions insurance
policy providing a prudent amount of coverage for the willful or negligent acts or omissions of
any officers, employees, or agents in conjunction with the services to be provided. C overage
limits shall be $21 0001000 or more per occurrence, without reduction for claims paid during
the policy period. The carrier should be duly insured and authorized to issue similar insurance
policies for this nature in the State of C alifornia.
The proposer warrants that it will not delegate or subcontract its responsibilities under an
agreement without the prior written permission of the Town.
The proposer warrants that all information provided by it in connection with this proposal is
true and accurate.
Printed Name: __ S_h _e _ld_o_n_C_h_a_v_a_n ____________________ _
Title: Managing Partner
Firm: __ C _h_a_v _a _n _&_A_ss_o_c_ia_t _e _s,_L_L_P ____________________ _
Date: 10/8/2021 -----------------------------
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
ATTACHMENT D -CONFLICT OF INTEREST STATEMENT
THIS FORM MUST BE PRINTED OUT, COMPLETED AND SUBMITTED WITH THE PROPOSAL
PROFESSIONAL AUDITING SERVICES
The undersigned declares:
I/We Chavan & Associates, LLP (Insert Name) have the following financial, business, or other
relationship with Town of Los Gatos that may have an impact upon the outcome of the contract. If none,
please specify that no other relationships may have an impact on this contract or Project.
None and no other relationships may have an impact on this contract
I/We Chavan & Associates, LLP (Insert Name) have the following current clients who may have a
financial interest in the outcome of this contract. If none, please specify that no other clients may have a
financial interest with an impact on this contract or Project.
None
Pursuant to Government Code section 1090 and any other laws, rules and regulations that may apply, the
Proposer covenants that neither it, its subcontractors nor employees presently have an interest, and shall
not acquire any interest, direct or indirect, financial or otherwise that would conflict in any manner or
degree with contract awarded from this RFP. Proposer certifies that to the best of its knowledge, no one
who has or will have any financial interest in the contract awarded from this RFP is an officer or employee
of the Town. Through its submittal of a proposal, Proposer acknowledges that it is familiar with Section
87100 et seq. and Section 1090 et seq. of the Government Code of the State of California and will
DocuSign Envelope ID: 2529C044-9E24-4732-8959-482B8O58876E
immediately notify the Town if it becomes aware of any facts concerning the contract to be awarded that
constitute a violation of said provisions.
Furthermore, if there is reason to believe that collusion exists among the Proposers, the Town may refuse to
consider proposals from participants in such collusion. No person, firm, or corporation under the same or
different name, shall make, file, or be interested in more than one proposal for the same work unless
alternate proposals are called for. A person, firm, or corporation who has submitted a sub-proposal to a
Proposer, or who has quoted prices on materials to a Proposer, is not thereby disqualified from submitting a
sub-proposal or quoting prices to other Proposers. Reasonable ground for believing that any Proposer is
interested in more than one proposal for the same work will cause the rejection of all proposals for the work
in which a Proposer is interested. If there is reason to believe that collusion exists among the Proposers, the
Town may refuse to consider proposals from participants in such collusion. Proposers shall submit as part of
their proposals documents the completed Non-Collusion Declaration provided herein.
I, on behalf of the Proposer, declare under penalty of perjury under the laws of the State of California that
the foregoing is true and correct and that this declaration is executed on October 8. 2021 [date], at
Mogan Hill [city], CA [state].
Chavan & Associates, LLP Managing Partner
Proposer Name (Person, Firm, Corp.) Title of Authorized Representative
15105 Concord Circle, Ste 130 Sheldon Chavan
Address Name of Authorized Representative
Morgan Hill, CA 95037
City, State, Zip
10/8/2021
Date Signed
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
ATTACHMENT E-NON-COLLUSION DECLARATION
THIS FORM MUST BE PRINTED OUT, COMPLETED AND SUBMITTED WITH THE PROPOSAL
PROFESSIONAL AUDITING SERVICES
The undersigned declares:
I am the Managing Partner [Insert Title] of Chavan & Associates, LLP [Insert name of
company, corporation, LLC, partnership or joint venture] the party making the foregoing proposal.
The proposal is not made in the interest of, or on behalf of, any undisclosed person, partnership, company,
association, organization, or corporation. The proposal is genuine and not collusive or sham. The
Respondent has not directly or indirectly induced or solicited any other respondent to put in a false or
sham proposal. The Respondent has not directly or indirectly colluded, conspired, connived, or agreed with
any bidder or anyone else to put in a sham proposal, or to refrain from responding. All statements
contained in the proposal are true.
Any person executing this declaration on behalf of a respondent that is a corporation, partnership, joint
venture, limited liability company, limited liability partnership, or any other entity, hereby represents that
he or she has full power to execute, and does execute, this declaration on behalf of the respondent.
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
ATTACHMENT F -REFERENCES
THIS FORM MUST BE PRINTED OUT, COMPLETED AND SUBMITTED WITH THE PROPOSAL
PROFESSIONAL AUDITING SERVICES
List three (3) references for work of a similar nature to the Services performed within the last five (5) years.
Use additional sheets as necessary.
1.
2.
City of Carmel-by-the-Sea
Na me of Agency
Robin Scattini
Contact Name
831-620-2019
Contact Telephone
6/30/2019 to 6/30/2021
Contract Period
PO Box CC, Carmel-by-the-Sea, CA 93921
Agency Address
Finance Director
Contact Title
rscattini@ci.carmel.ca .us
Contact Email Address
$27,000
Contract Amount
ACFR, Audit, Single Audit, GANN, Measure S, Management Letters
Description of services performed including costs.
City of Saratoga 13777 Fruitvale Ave, Saratoga, CA 95070
Na me of Agency Agency Address
Dennis Jaw Finance Manager
Contact Name Contact Title
408-868-1227 djaw@saratoga.ca.us
Contact Telephone Contact Email Address
6/30/2014-6/30/2021 $39,000
Contract Period Contract Amount
ACFR, Audit, Single Audit, Management Letters, GANN, TDA Audit
DocuSign Envelope ID: 2529C044-9E24-4732-8959-482B8O58876E
3.
Description of services performed including costs.
City of Del Rey Oaks
Name of Agency
Roberto Moreno
Contact Na me
831-394-8511
Contact Telephone
6/30/2018-6/30/2021
Contract Period
650 Canyon Del Rey Road, Del Rey Oaks, CA 93940
Agency Address
Chief Business Officer
Contact Title
RobertoM@GovernmentFinancialSolutionslnc.com
Contact Email Address
$26,750
Contract Amount
Audit, GANN, Measure S, Police AUP, Management Letters
Description of services performed including costs.
I hereby certify that the Proposer performed the work listed above.
Sheldon Chavan 10/8/2021
Signature of Proposer Name Date
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and
correct and that this declaration is executed on 10/8/21 [date], at Morgan Hill [city], _CA [state].
By:
Name:
Title:
Sheldon Chavan
Managing Partner
DocuSign Envelope ID: 2529C044-9E24-4 732-8959-482B8D58876E
ATTACHMENT G -STATEMENT REGARDING INSURANCE COVERAGE AND WORKER'S COMPENSATION
INSURANCE ACKNOWLEDGMENT CERTI Fl CATE
THIS FORM MUST BE PRINTED OUT, COMPLETED AND SUBMITTED WITH THE PROPOSAL
PROFESSIONAL AUDITING SERVICES
PROPOSER HEREBY CERTIFIES that the Proposer has reviewed and understands the insurance coverage
requirements specified in the RFP. Should the Proposer be awarded a contract for Services, Proposer
further certifies that the Proposer can meet the specified requirements for insurance, including insurance
coverage of any subcontractors, and agrees to name the Town as additional insured for the Services
specified.
By certifying this form, the Proposer also understands the Worker's Compensation insurance requirement
per the California Labor Code, Sections 1860 and 1861:
I am aware of the provisions of Section 3700 of the Labor Code, which
require every employer to be insured against liability for worker's
compensation or to undertake self-insurance in accordance with the
provisions of that code, and I will comply with such provisions before
commencing the performance of the work of this contract.
Chavan & Associates, LLP
Name of Proposer (Person, Firm, or Corporation)
Signature of Proposer's Authorized Representative
Sheldon Chavan, Managing Partner
Name & Title of Authorized Representative
10/8/2021
Date of Signing