05 Attachment 1l?.09"+
AGREEMENT FOR CONSULTANT SERVICES
THIS AGREEMENT is made and entered into on May 24,2017 by and between TOWN OF LOS
GATOS, a California municipal corporation, ("Town") and Badawi & Associates, ("Consultant"),
whose address is 180 Grand Avenue, Suite 1500, Oakland CA. This Agreement is made with
reference to the following facts.
1.2 The Consultant represents and afhrms that it is willing to perform the desired work pursuant
to this Agreement.
1.3 Consultant warants 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.
II. AGREEMENTS
2.t Scope of Services. Consultant shall provide services as described in that certain Technical
proposal for professional auditing services sent to the Town on March 31,2077, which is
hereby incorporated by reference and attached as Exhibit A.
2.2 Tetm and Time of Performance. This contract will remain in effect from June 1,2017 to
June 30, 2020. Consultant shall perform the services described in this agreement as
described in Exhibit A.
2.3 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.
1.1
2.4
2.5
I. RECITALS
The Town desire to engage Consultant to provide professional auditing services.
Sole Responsibility. Consultant shall be responsible for employing or engaging all persons
necessary to perform the services under this Agreement.
Information/Report Handlins. 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, unless proprietary in nature, 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 the Consultant shall not make any of the these documents or
information available to any individual or organization not employed by the Consultant or
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ATTACHMENT 1
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. Torvn
fuither 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 for fiscal year ending
June 30,2017 shall not exceed $32,015; for fiscal year ending June 30,2018 shall not
exceed $33,175; and for fiscal year ending June 30,2019 shall not exceed 534,265,
inclusive of all costs, as described in that certain "Sealed Dollar Cost Bid for professional
auditing services" submitted to the Town on March 31,2017, which is hereby incorporated
as Exhibit B. Payment shall be based upon Town approval of each task.
2.7 Bilins. RiUing nhall be men
inen+
rnaterials shall be s . Billing
shall be made as follows; 45 percent of the contract after the interim phase,45 percent afier
the year-end phase and 10 percent after all work is completed and final reports are issued.
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
2.8 Availabilitv of Records. Consultant shall maintain the records supporting this billing fbr
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.
2.9 Assisnability and Subcontractine. 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 perfornance or assign or
transfer interests under this Agreement. Consultant agrees to testify in any litigation brought
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regarding the subject of the work to be performed under 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.ll 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 Opporlunity. Consultant warrants that it is an equal opportunity
employer and shall comply with applicable regulations goveming equal emplolrment
opportunity. Neither Consultant nor its subcontractors do and neither shall discrirninate
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.
UI. INSURANCE AND INDEMNIFICATION
3.1 Minimum Scope of Insurance
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 lirnit
per occurrence for bodily injury, personal injury and property damage.
ll.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.
Consultant shall provide to the Town all certificates of insurance. with
original endorsements effecting coverage. Consultant agrees that all
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l.
lv
certificates and endorsements are to be received and approved by the Torvn
before work commences.
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:
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.
11.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 shail not
contribute with it.
Iu.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 Coveraees. 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.
Indemnification. The Consultant shall save, keep, hold harmless and indemnify and clefend
the Town its officers, agent, employees and volunteers from all damages, liabilities,
Protbssional Auditing Services - Badawi & Associates
3.2
J.J
3.4
051201 I
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l.
4.1
4.2
4.3
4.4
4.5
4.6
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 sub consultant.
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.
Governine 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.
Termination of Asreement. The Town and the Consultant shall have the right to tenninate
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 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 seruices
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. [n any dispute over any aspect of this Agreement, the prevailing party shall be
entitled to reasonable attomey'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
I l0 E. Main Street
Los Gatos, CA 95030
Badawi & Associates
Attn: Ahmed Badawi, CPA
180 Grand Avenue, Suite 1500
Oakland, CA946l2
or personally delivered to Consultant to such address or such other address as
Consultant designates in writing to Town.
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4.7 Order of Precedence. ln 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 Apreement. 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 paffy to be bound, shall be binding on
either party.
IN WITNESS WHEREOF, the Town and Consultant have executed this Agreement.
Town of lns Gatos by:by:
Prevetti, Town Manager Ahmed Badawi, CPA
Recommended by:
Director
Approved as to Form:
t,
Robert
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Town of
Los Gatos
For Professional Auditing Services for the
Town of Los Gafos
For the fiscal years ending June 30, 2017 to 2019 with the option to
extend for two subseguenf one-year terms
@ ,*o*,&AssocrArEs
Exhibit A
TECHNICAL PROPOSAL
March 31,2017
gqEc!-@s:
Ahmed Badawl, CPA
Badawi E Associates
Certlfied Public Accountants
180 Grand Avenue, Suite 1500
Oakland, CA 94612
Phone: (510) 768-82U
Fax: (510) 768{2'19
E-mail: abadawl@b-acoa.com
Exhibit A
Town of Los Gatos
Letter of Transmittal
lndependence
Firm Qualiflcations and Experience
lnsurance
License to Practice in California
Firm Qualifications
Technical Approach
Firm Experience
Additional Ac{ivities
Client Training Seminar
CSMFO Training
GASB 68 Firm Developed Tools and Assistance
Quality Control Review
Federal or State Desk Review
Disciplinary Action
Lost Clients and Pending Legislation
Conflicl of lnterest
Partner, Supervisory and Staff eualifications and Erperlence
Slmllar Engagements with other Government Entities
Und€rstanding of Services to be provided
Specific Audit Approach
Objectives for Our Services
Audit Approach
Technical Approach
Audit Schedule
Obcussion of Relevant Accounting lssues
Conclusion
Appendlx A - References
Appendix B - Proposer Warranties
1
a
3
3
3
a
4
5
5
6
6
6
6
8I
8I
Paqe
17
21
22
22
23
27
30
31
32
u
I
Exhibit A
Table of Contents
Exhibit A
BADAWI&ASSOC TES
Dear Mr. Conway,
Bada\ui & Associates (B&A), C€nmed Public Accountants (the'Fim') is pleased to have the opportunity to respond
to your request for a proposal to provide extemal audit services and lo submit ils qualificalions to perform an
indePendent audit of the linancial statements of the To\ n of Los Gatos (the "To\ ,n') for the fiscal years ending June
30, 2017 to 20'19 with option to extend for tf,ro subsequenl oneyear lerms. The objective of oui audits is lo issue
opinions regarding the fairness of presentation oI the financial position of the Town in accordance with generalty
accepted accounting principles. These audits are to be performed in accordance with generally acceptedauditina
standards, the standards Eet forth for linancial audits in the General Accounting Ottice's lOnOl eovemment
luditing Standards, the provisions of the federal Single Audit Act ot 1984, as amended in 1996), and the Uniform
Guidance, Audits of Slales Loca, Govemmenls and Non-Proft Oryanaalbns, Unifo;m Administrative
Requirements, as well as any other applic€ble federal, state, local or programmatic audit requirements.
We will also perform the follorving as parl of our engagement:
March 9, 2017
Mr. Ahmed Badawi, CPA
Badawi & Associates
Ce,tified Public Accountants
180 Grand Ave. Suite 1500
Oakland, CA 94612
Telephone: (51 0)768-82114
E-mail: abadawi(Ab-acoa.com
Single Audit (rr reguiredJ.
GANN Limit.
Audit Pension Trust Fund (@lrbnar).
Annual State Conkolle/s Reports (oplbr,ar)
We rvill also apPly limited audit procedures lo Management's Discussion and Analysis (MD&A) and required
suPPlementary informalion. ln addition, rye will prepare the management letter containing comments and
recommendations regarding our review and evaluation of the systems ot internal control and accounling
proc6dures.
This Proposal will highlight the background of the partners and staff assigned to the engagement, summarize our
experience in the govemmental area, and describe our approach lo auditing the Town.
This proposal demonstrales our abilrty to render the quality examination and to perform the nec€ssary accounting
and auditing seMces requested by lhe Town on a limely basis.
As a partner of the Firm, I will be lhe primary contact for negoliation of the cont6ct. Additionally, I have been
authorized to legally bind the Firm. You may contacl me et the fotlowing address and phone number:
Iar:
Mr. Stephen Conway
Direclor of Finance
Toryn ot Los Galos
1 10 East Main Street
Los Gatos, CA 95030
Phone:
Exhibit A
We are committed to performing the required work, completing the audit, and issuing the neoessary
auditors' repons prior to the To\ rn's published time frames and commil to you that we will perfom the
work within lhe time frames required.
We belaeve we are the best qualified to perrorm the audit because our audit staff includes individuals
well versed in municipal audiling and reporting requirements. We have perlormed audiling and
consulting engagements for numerous cities throughout California. We will be resPonsive lo the
ne€ds ot the To,vn, we understand the Town's operational environment, and pledge to you our
complele commitrnent to providing a quality product that meets the Town's requirements.
The approach to the audit has been designed to meet the audit requiremenls of the variouo
authorities with the least disruption to the To\ rn's ofiice operalions. The foundation of lhe audit
approach is based on communication coupled with a strong knor./edge of Town operations -and
deiailed planning at the initial stages ol the audit. Open communication lines with all parties of the
Engagement Team and Toln Management and staff lhroughoul the engagement eliminate
sr.r-rprises". lnitial planning and proper assignment of dulies to experienced Personnel provide for an
effeclive and ef{icienl audit process. Consequently, inefficiencies and disruptions are kept to a
minimum. ln addition, we perform almost hatl oI the audit tasks during the interim phase to minimize
any unforese€n delays during the year-end phase and to ensure a smooth end timely audit process.
The Firm maintains liabilily insurance coverage for professional liability, workeG' compensation,
Comprehensive General Liability and Auto as pan of our comprehensive insurance policy.
The Firm is an Equal Opportunity employer and complies with all Fed€ral and State hiring
requirements. The Firm also supports Atfirmative Action philosophies and works hard lo provide
disadvanlaged groups with opportunities for setf enhancernent.
Mr. Stephen Conway
Direclor of Finance
Town ol Los Gatos
Page 2
This proposal is a ,irm and inevocablB offer fol 180 days.
we are confident that you will find our organization offers the required expertise, tschnical
knowledge, and business understanding to p€rrorm an audit of the Torvn. Our past e)Qerience
provides us with a thorough understianding of the n€eds and requirements of lhe To m, as well as the
iechnical knorvle<lge to pertom such services in accordanc€ with the accounting and auditing
guidelines as published by the various adhoritative entities.
We welcome your inquiries and look torward lo futth€, discussions with you.
Sincerely,
ArJB"+--
Ahmed Badawi
Partner
Badawi & Associates
Certified Public Accountants
Exhibit A
Technical Proposal
Firm
Qualifications
and
Experience
lndependancs
The Firm is independent of the Torrn ot Los Gatos as defined by the GAO'S Stsndads ,or Aud,l ot
Govemmental Oryanizatbns, Programs, Activilies and Fut ctions, and the AICPA and Califomia
State Soci€ty of Certified Public Accountants as promulgated in various auditing and professional
standards-
lnsurance
The Firm maintains professional liability insurance and other coverage as part ol our
comprehensive insurance policy. Upon selection as Town's independenl auditor, lhe Firm and our
insurance provider will provide a certificate of insurance to Toyvn which shows the minimum
requiremenls kientified by To\,vn have been met.
Llcen3o to Prectlce ln Cllifomla
The-Firm and all key professional 6taff assigned to Town's audit are prop€dy licensed to practice
as Cerlitied Public AccountanE h the State of Califomia and coniply wiin GeO Govbmment
Auditing Standatds.
Jle flrm is registered with the Califomia State Board of Accountancy. lts State number is
coR6823.
The Firm has met all required State and locsl larvs, rules, and regulations.
Fi]m Oualific.tlons
Badawi & Associates wes founded by Mr. Ahmed Badawi. Mr. Badawi has over 20 years of
experience working with stale and local govemmenl wilh a special focus on cities. prior lo
founding B&A, Mr. Badawi was a partner with several local and national ,irms, where he headed
their govemmenl practice in Northern Califomia. Mr. Badawi founded Badawi I Associates to
serve the faslpaced needs of Califomia's local govemments. The goal is to build a proactive,
clienl-focused culture from the ground up and to eliminate the entrenched bureaucratic culture and
intrinsic limitations of the big audit lirms.
Locatgd in Oakland, CA, the Firm serues a variety of cities throughout California as vuell as
conducting financi€l related services for numerous special dislricts and authorities. Names and
phone numbers of several of our cunent and past clients and other relerences are provided tor
your inquiries. We encourage you to contact these individuals to obtain information on the quality
of the audit and the ability of the audit staff.
Our Oakland olfice will be lhe Engagement Office assigned to the Tolf,n.
ln addition to specific city financial statements, the Firm mernbers have also audited numerous
redevelopment agencies, public financing aulhorities, hospitals, housing authorities, transportation
authorties, special districts, water districls, OCJP grants, self-insurance pools, joint power
aulhorities and has also performed numerous compliance audits in accordance with the Single
Audit Act, childcare regulalions, TOT regulations, AQMD regulations, lranchise requirements, RDA
compliance, and other special projecls. Additionally, the Firm has significant experience in bond
otferings, posl closure landfill costs, and recent changes to redevelopment agency reponing
requirements.
The Engagement Partn€r assigned to lhe Town, Mr. Ahmed Badawi. Mr. Badayri has over 20 years
of government audit experience. He is a member of various govemmental committees, has actively
participated in the development of accounting and audit guidelines for the governmental secloi,
and is an inslruclor for the Califomia Society of Municipal Finance Of{icers.
3F.nE BADAWI&ASSOCIATTS
Exhibit A
Town of Los Gatos
Independence
Town of Los Gatos Technical Proposal
The professional staffs assigned to the Engagemenl are qualifled and exPerienced. Each
individual ot the Engagement Team has several years of exPerience and has conducted or
participated in numerous municipal audits of various 6ize8. Their understanding of governmental
operalions and the various authoritative guidelines will provide the where-with€ll to perform the
audit in an efticient and effeciive manner with minimal disruplion to the Town's finance depattmenl.
Issnls3!-AEEseb
The approach to the audit has been designed to meel the audit requirements of the various
aulhoritiB with lhe least disruption to the Toffn's operations. The foundation of the audit approach
is based on communication couplad with a strong knorvledge of Town oPerations and d€tailed
planning at the initial stages of the audit. Open cornmunicatbn lin€s with all Parties of the
Engagehent Team and To rn Management and stafi lhroughout the engagement eliminale
surprises'. lnitial planning and proper assignment of duties to exPerienced personnel provide for
an iffeaive and efficient audit process. Consequently, inefficiencies, disruptions, and lack of
understanding are kept to a minimum.
Tha audit approach will consist ot four Phases:
lnitial Planning Meeting:
The Engagement Partner and Manager will meet with Tot m Management to discuss the
audit approach, identity specific needs of Town Managemenl, and familiarize themselvEs
with Town policies and prac{ices.
The Engagement Team members including the Engagement Team Partner will pertorm the
intemal control reviews, test transactions, evaluate comPliance with Single Audit Act
requirements, identify potential audit issues thal need to be addressed, perform limited
confirmation procedures, and develop a clear understanding between the Engagement
Team and Torvn Management ol lhe year end audit resPonsibilities and assignmenls. ln
addltlon, we stdve to comPlete many of the year.ond audlt tasks durlng ths interlm
phase to ensur€ a smoothot audlt proces3. Ws rYlll wolk with the Town on Provldlng
a list of those tasks that w6 wlll target to compllto durlng lntorim and work with the
Town on how to complete thsm to mlnlmlze tho amount ot affort and tlmo needed at
yoar-€nd whlch in tum will assbt the Town in mootlng tts goal of lssuing the CAFR
by the desirsd deadllno.
Year end:
The Engagement Team members including the Engagement Team Partner will conduct
validation procedures on general ledger account balances, complete conrimation
procedures, perform analytical Procedures on revenue and expenditures, perform search
for unrecorded liabilitiss, complete compliance work on Federal Assislance, and wrap up
audit field work.
lnterim
Reporting:
Auditois repolts ,or atl Town reporting entities and compliance requiremonts will be
linalized along with Single Audit Reports and Management Letler comments. The Partner
and Manager will be available to maka Presentations to the To^rn Council and/or
designated bodies.
Exhibit A
BADAWI&ASSOCIATES
Town of Los Gatos Technical Proposal
Flrm Expe?lence
The Firm is loc€ted in Oakhnd, and provides a full range of accounting services to govemmental
agencies throughout Califomia, including audit, tax and accounting. The Firm's protessional staff
members pro\ride lhe financial background and specific experience to meet the Town's operational
needs. Additionally, this situation provil$ the To\ rn with an auditing firm that has depth in
capabilities to address any financial issue the To\ n may need assistance with, and the quality
audit approach that you expecl.
Our Oakland office will be the Engagement Oftice assigned to the Tow't.
Firm policy requir$ that lhe Engagement Partner, during the first year ot the engagement, be
actively involved in the daily fielduork. This means to the Torvn that Mr. Badawi will aaually be on-
site during the audit coordinating the audit process, supeNising the audit staff, gaining a hinds-on
u.nderstanding of Tott/n processes, and benefiting the To n $rith his broad municipai experience.
we har/e found that this effort bonef(s the To^rn and the Firm through developing a ihorough
knowledge oJ the Town's practices and issues and establishing a clos€ working relaionship with
the Torrn's Management. Additionally, continuity of audit personnel is assured because of the
hands on involvement of the Partner.
We are cornmitted to providing approprhte and related experi6nce, personal involvemenl, and a
broad business persp€ctive to produce a quality end product within the time framss required.
The Firm provides financial and compliance auditing services to govemmental agencies throughoul
Califomia. We are a govemmental agency auditing firm and our professional siaff memberslave
been performing these services for many years. As a result, we have performed financial and
compliance audits on most, if not all, types ol governmental agencies and op€rations including:
Cities.
Redevelopment
Agencies.
Financing
Aulhorities.
Housing
Aulhorities.
Special Districts.
Water Dislricts
Waste
Management
Authorities and
Operations.
Pension Plans.
Child Care
OperationsoJointPower
Authorities
lnvest nenl
Activities.
Landfills.
Enterprise Funds.
Airports.
Transportation
Operations.
Federaland State
Grants
Operational reviews.
Technical guidance on existing and
upcoming accounting issues.
Training seminaG.
Pensior/profit-sharingplans.
Performance audits.
Business consulting
Additlonal Activitias
We offer a full range of accounting and finance services to lhe governmental sector. These
services include:.
Financialaudils.
Compliance audits.
Tax advice.
Development of financial and
accounting policies and procedures.
lnvestment review and compliance
evaluation
Consequently, Firm personnel are well qualified to perform the seMces expected by the Town
BADAWI&ASSOCIATES
Exhibit A
4alt 5
Town of Los Gatos Technical Proposal
Client Trainino Seminar
The Firm hosts an annual update on recent technical accounting and finance issues alfecting the
govemmental area. This all day session reviews new and anticipated pronouncements from
GASB, discusses Iuture issues under consideration by GASB, reviews accounting treatment of
various transactions s,here assues may arise, and provfores a general overview of slate and federal
compliance issues. All of our clients are invited to atlend, free of charge. The one day session
qualifies lor CPE under the rules of the State Board of Accountancy and is held in locations
throughout the Bay Area.
CSIIFO Trainlno
The Firm provides a oneday training session entitled 'lntroduclion to Governmental Accounting' to
members of CSMFO. Firm personnel develop€d the class materials and teach the sessions.
Approximalely lO sassions are heu annually at various locations throughout the State. The Firm
provides these sessions for only the cost ol matorials to CSMFO in keeping with its Philosophy to
support lhe industry in which it serves.
GASB 68 Flrm Devoloped Tools and Assbt nca
The Firm has developed lools lo asaisl our clients with GASB 68 imPlementation or Preparation of
joumal entries for lhe CaIPERS' Plans. ln addition to providing our clienls with lhese tools and
instructions on ho,t/ lo use them, we are available to anstfler any qu6tions on hofl to prepare and
cornpbte your GASB 68 joumal entries.
Oualitv Control Rovlew
According to Governmenl Auditing Standards, firms who perform audits underthe Yollow Book are
required to have a pe€r review once every thrae ysars. We received a report with a rating of Pass
with no deliciencbs which we attached for your review.
L-=lE BADAWI&ASSOCIATES
6
ExhibitAIt
Town of Los Gatos Technical Proposal
GYLA\
U88illlll8[ur.'
Svstcm Rqricrr Rcrpn
l rr llur.,('ll{
Snn rr ('. \ti r rrrs, ( ll{
l. lur r O ll r! & 1'A
CPAM,FsI,S,^+
dia.a& r.r-r' l}r.'l-. r.*r,-"
Dldlrrl & AliocLt.i
OaIland, Califomia;
and thc Pecr Revics Comminec ofrhc Califomia Socicl).ofCpAs
v-c,f Je.]E:icr$c! lhc_syscm ofquality control for thc ccsounring lnd ruditing 1tacliceofrt:lo3\r r ag Asso,cirtes (rhe lirm) in cffccr for rhc lcar cndcd FcbruaD, 29, 201-6.' OurFcrreliessasconductcdinrccordalrcewith. fic
stsndsrds
fo. fcrformin! ana Rcponin! onPccr.Rcvicsr esrablhhcd b) rhc pccr Rcric* rload ofrhc Amcricon iisiirureorccnifiearuDlcAcrcounlrnts. As pirr of our pccr rcvicrr, \e considcrcd revicns by ,cgulator!.entitics,.if alplicable, in d.t.miniog thc naturc ard cxtent ofou, pro"Jrr..- Thc firm is
11f*,:P! for dcsigning a r)Btcm of quctirl.conuol aod conrplying sirh ir ro pruriac rhc
1'g lt,jl r:irr:k assurance of lrrforming ond reponing in conformiq.rvirhopplicabteprolcssionalstandardsinallmarcrialr6pccB. Ou csponsibililr. is lo c;prrss onopiniononthcdesignofthesysrcmofqualirycontrotandrfr" hrrnt colpfior"iitrcrerrirh basca
ll^o31::*I Thc nature, objectiv€s, scopc, limiblions o[, and rhe proccdurcs pcrformed
rn o Systcltt Rcvae\' ore dcscribcd in lhc standards at $rsr.oicoa.oru/o.$umman.
t_"l.tlld bt Us shndords, cngagcmcnts sclcrted for rcvies.includeddrgagernenrsperlormcdundcrOorernmcnAulitittgStotdonls.
ln our opinion, thc systcm of qualirl control for rhc acclunling ord auditing pructiccofBodarvi & Arsociares in elT!"cl for thc. 1.car ended fcbruarf.29] 2016, hos been suiroblv
t:,tT1 -l"o
complicd s irh ro.protide ihe n.m,"irtr rcasoLuic ;il;; "
f ;ili;;
I1-Try"a"g in confomir) $ith lpplicablc prollssional sundards in oll morerial rr_spectslftmscanr.ccilc o rating of;mss. pots tti,h deliciclqllcs) o..[oil. Bada\i & Associatcsnirsreccrvcdupsvrer.ies mling oflroJJ.
G4LOe , ,-, ttp
7ENEBADAWI&ASSOCIATES
Exhibit A
Ontorio. Colifomix
Mo)' 20. 2016
l I20 Concour!,
Suitr l0O
Onr!rio, CA 9176.1
909-9{t3990
6fi)6t{4696
r^\ 909.94t.9di3
t!b(iOldeuEe
1Y'Itr
is our
is, ttn*n' tuubrJ
4
Town of Los Gatos Technical Proposal
Federal or Stete [re3k ReYlesB
The Firm has had no negative federalor state revbws in the Past three (3) ye8rs.
@Euolll.Asle4
There has not been any state or federal disciPlinary eclions taken or pending agairct the Firm nor
any findings to repon.
Lost ClLnb .nd Pendlno Litloltaon8:
The Firm has not experienced lermination ot any contrec,ts More co.nPbtion, and. has nol
ip",lenceO
iny hwsriits or legat actions that have'been resolved or are cunently p€nding in the
prior five year8.
Connlct of lntatast :
The Firm does @! have a conflid ot interesl tvith any offidals or employees.of the. To n of Los
Gatos. lf a confl-ic1o, intefesl u,6re to b€come knoirm, the lirm rvould immedbtely diwlge such lacls
to the Town.
6llltEBADAWI&ASSOCIATES
B&A have policies and procedures to ensure il hires only qualilied people, that it propedy
sup€rvises them and provides professional training, that it advances lhem to responsibilities th6y
are capable of handling, and thal it provides them with necessa.y lechnical resourcas. All members
of B&A are very familiar with lhe stringent quality conttol standards established by th€ AICPA.
The Firm is a mombor of the AICPA Govemmont Audit Ouality Center.
The Firm is a mombar of the AICPA Pdvate Companlos Pracilcc Soction.
a
Exhibit A
Town of Los Gatos Technlcal Proposal
Partner,
Supervisory,
and Staff
Qualifications
and
Experiences
The Engagement Team will nomally consist of seven indiviruals who provide a broad business
perspective and signmcant experience in govemmental auditing. This team will provide accegs to a
wide range of technical capabilities which will provide the Toxn with not only the technical support
neoessary to perform the audit, but also the broad business background to interpret findings and
observations to otfer effeclive solutions to issues, and the personal involvement of the Engagement
and Compliance Partners of the Firm.
The Engagement Team will be led by Ahmed Badawi, CPA. Mr. Badawi's background includes
over twenty years of municipal auditing and accounting experience with a special focus on cities.
He is the instructor of the CSMFO "lntroduclion to Govemmental Accounling' lraining classes. Mr.
Badawi is a member of the Govemment Accounting and Auditing Committee, the Accounting
Principles and Auditing Slandards Committee and the State Technology Committee of the
Califomia Society of Certified Public Accounlanls. He has p€rticipated in lhe audits o, numerous
city, county and special district governments, as well as non-prolit entities. His diveGified
background offers the technical qualities required of the govemmental and non-profit areas and the
necessary wherewilhal to properly evaluate the enlire accounting process, develop opportunities to
improve the accounting process, and to offer practical business recommendations. Mr. Badawi is
licensed as a CPA with the ability to attest an opinion on an audit.
The second member of lhe Engagement Team is Mitesh Desai, CpA. Mr. Desai's background
includes ten years oI experience in municipal auditing with a special locus on cities. Mr. Desai has
participated in the audits of numerous govemmenlal ag€ncies, assisted in their elforts to publish
their CAFRS in complaance with GASB 34, and a volunte€r member of the GFOA Special Review
Committee. Mr. Desai has also achieved the Advanced Single Audit Certificate offered by the
AICPA. He will serve as the Audit Manager.
r!;tE ' BADAWI&ASSOCIATTSart
Exhibit A
C{ffitri..
cPA
tffiid
Ll.--all*
tnaa-?
kC'ArrFrb
R.trrhdt
rif haa-
Lllo.d
CPA
5t-
fof.. Sttafd
CPA
Fn*aaloarladtaJl tf &Jl
Town of Los Gatos Technical Proposal
Prof63slonal Develoomont:
The Firm mainlains a comprehensive training program targeted at appropriale Professional staff
levels. lt ulilizes in-house developed educational programs, AICPA and Califomia CPA Foundation
educational programs, and on{he-iob training.
The Fim's annual training schedule which offEially begins in April for all Professional staff and
administrative staft includes cornprehensive in+ous€ lraining 66ssioas on such topios as:
Review of principles of accounting and financial rePoding for state and
local governments..
Review of govemmental lund typ6 and account groups.
Review of newly issued generally acceptod auditing standards and GAO
auditing standards..
Review ot lnternal Control evaluation approaches including COSO
principles..
Updates on recent govemmental accounting and repo{ting guidelines..
Review of Single Audit requirements and approaches.
Review of financial audit approaches..
Overview ol audit and intemal control work paper techniques..
Review of GASB repoding raquirements..
Review of cunent issues facing lhe govemmental community.
BADAWI&ASSOCIATES
Exhibit A
10
The third memb€r of the Engagement Team is Monica Singhai, CPA. Mrs. Singhai's background
includes over lourteen years of experience in municipal auditing exp€rience. She has participated
in the audits of numerous govemmental agencies and assisted in their efforts to publish lheir
financial statements in compliance with vadous regulations. Mrs. Singhai will be the Senior ol this
engagement.
The fourth member ot the Engagement Team is Robert Wucher. Mr. Wucher has 30 years of
exp€rience in the lield of lnformation Technology 0T) at the senior and executive managemenl
level. He has worked extensively with govemment agencies, private organizations and public
companies. lndustry experience includes the public sector, banking, manufacluring, lnlemet, health
care and not-for-proltl organizations.
The fifth member ol the Engagement Team is Jessi€ Porrell, CPA. Ms. Powell background
includes thirty live years of accounting and auditang experience. She has an eliensive background
in audit and accounting engagoments for small businesses and specializing in govemmental
entities and not-for-profit organizations. She also perfotms second partner teviews and
engagemenl quality control reviews lo, several CPA firms throughout Califomia and is an aclive
peer reviewer for the CaICPA Peer Review Program. She has participated in lhe audits of
numerous districl, and city governments, as well as non-prof entities. Her diversifi€d background
offers the technical qualities requited of the governmental and non-profit areas and the necessary
wherewithal to properly evaluate the entire accounting process, develop opPortunities to imptove
the accounting process, and lo offer Practical business recommendalions. Ms. Pot rell will servo as
an Engagement Ouality Reviewer of this engagement.
Each member of lhe Engagement Team participales in continuing education Programs oflered by
the AICPA and California State Soci€ty of Certifred Public Accountants, and each has met lhe
continuing education requirements for municipalities. ln addition, the firm offers at leasl 60 hours of
in-house CPE annually focused mainly on municipal audits.
Town of Los Gatos Technlcal Proposal
During the year, professional staff membeE are s€nt to varioB educational sessions sponsored by
the AICPA and Calitomia State Society of CPAS, as considered appropriate for the ler€l and need
of the individual. These classes include, among others:
Govemmenlal Financial Reporting Standards and Practices..
Yellow Book: Go\€mment Auditing Standards..
FinancialAccounting Standards: Cornprehensh/eReview..
Single Audit..
Go\€mmentalAuditing & Accounling Update..
GovemmenlalAccountingPrinciples..
Comprehensive Revi€w of Generally Accepted Auditing Standards
The .result of.the Firm's kaining program is the production ol a h(lhly educated and competent
municipal audit group capable oI performing an efticient and effectivaaddit for the Tonn.
The Team members will continue their professional devetopment efforts.
EI
I trflE BADAWI &ASSOCIATES
Staff Retention and Continultv:
The. Firm's policy on providing seffice to our clients includes a commitrnenl to maintaining
conlinuity of audit personnel. we cannot guaranlee thal our staff will remain with the Firml
Hou/ever, lo encouEge our staff to remain with us, we pay competitive wage rates; offer
promotional opporlunities; provide state-of-the.art equipment and excellent working ionditions; andotfervariousbenefits, such as retiremenl plans, medical plans, prolit shiring programs,
educational benefits, and olher such benef s. Additionally, we will guaranto€ ttiat'ant staff
member assigned lo this engagement will retum to the Torvn in subsequent years if he or'she is
still with lhe Firm. we can also guaranlee that the partner will be involved in future years.
continuity of audit staff is of prime concem to us and because ol the hands-on involvement bf the
partneri we can assure you that future years'audits will be conducted in an efficient and effeclive
manner with qualmed and erperienced prolessionals.
The Firm is an Equal Opportunity employer and complies with all Federal and State hiring
requirements. The Firm also supports Affirmative Action philGophies and works hard to provid;
disadvantaged groups with opporlunities for self enhancement.
Resumes of each member of the Engagement Tearn are as follows.
Exhibit A
11
Town of Los Gatos
R6sumes of Enoaqement Team
Ahmod Badawl, Cedf,ad Publlc Accorrrrad- Engagom.nt Plrtner
L.nqor of Ca]eal.
Tn/snty yeals'€)eeri€nco in municipel suditing and sccouoting with 8 special bcus on cilies
Certified Public Accountant br ths Stale of Calibmia.
EeBrblilEllnltlee.
Partial listing of di€nts s6rv8d:
LfiL.. tri.La
qrllarn.
OlLr
S!.da D!at! ra Orx
rrh luidra lh. o-u
c& Fr. Ptllcoll tId
ltsldcarrt$lt.D3€
canfi3 crr.lr,{t 3i5. 0n5d
E{ a? R.9ond Pnr l[lcl
I.lqtlllllFr-lrcolni*.r
serr 9.,r!. t dr Arr.ri
Sutr ce,ry qrd.i.
l$dc.irrr[*-D-la
r!!d corrt r5.d cr:
Frra, ltafcll ta-lr
I
x
t
It
x
x
x
x
I
I
x
x
x
x
t
I
x
tt
x
I
x
x
x
t
I
I
x
t
x
x
I
t
I
I
x
x
I
I
T
Has perform€d nwnerolE financial audits, Singl€ Audits, Ttansportatoo Dovebprmnt Ad auditE'
housing eudib. eleciricsl utility sudits, RoA audits. PFA audiE, 8nd Trust Fund audits, 8nd has
prepaEd numorous CAFRs.
Edretlh!.
BS DegrBe in Accounting from th€ Univors,ly of AlexaMrie, Egypl.
e!e!elrle!r!Ac@!&3.
lnsfuctor. CSMFO'S 'lnt oduction to Govsrnmentel Accourting' training class.
tuember, CALCPA Go\r€mmenl Accounting and Auditing Committ€e.
Member, Ams.ican lnstitute of Cartified Publrc Accountanb..
Membgr, Califomia Socioty of Csrtifisd Public Accountanb.
Member, Go\€mment Finance OffcsrE Association.
M€mbsr, Caliiomis Society ol Municipel Financa OtficsrE..
Chair. Audit Co.rmitt66, San Frsncisco SPCA, a CA nonptofrt organization
Conlinulnq Educadon
Has met the cunent CPE €ducational r€quirementE to porform audi6 on govemmental agoncies
@ *o *,&essocrnrts
Exhibit A
12
Technical Proposal
Town of Los Gatos Technical Proposal
l$itorh D6al, Ceitilred Publlc Accountant - Prof6slonal Audlt Managcr
4EcS-e!-e!Es
Ten years'erperience in municipal auditing with a spocial hdjs on cities..
C6rtified Public Accountant tur tlle Stste of Califomia.
Profolrlonal Erp.rlencs
H83 panicipabd in se\reralfinancialaudG. Singl€ Audits, ROA audiE, pFA audils, Transportatbn
Development Act audils, and housing audits
cilaa:
Anli).h X xxA!ll, XBrlto*xxxx
S..tdayxxxxx
Bt r.Prt x X x x
Fodr cq x x x xxFnarrtatxxxxx
EatlP&AIoIXXX
llngl G.oi. XxNorllrtXXXx
llrto P..t X Ixordc6xxxxp.aro x x x x x
PlEn |.. X X X x
R.6.ood Cty X X xxR.Yd.xxxx
n lri.o X X X xXSrr'th,l. xTutdx xxLti(. Cry X XxV.c.,rDXXXXX
Yolrll D x x x
colincditxxxxxx
GlrhXSrracrrExx)(xxx
Otff
Jriaoa carrry'aadoatE x x
r\l&n d. C6r*y {.drC Ced.. X X X
Cdo V.&, S,trry OltE X
Ccunrlaa Cfim(r*y Srvit5 Dcnd X
Gold.n ViNa, ttaa$ Cfua X x
Yrn tt(tid r/lrir orr.Er x
lrv.tl Carly $ltaLvtar o{fat X X
Cdrra Cda Or& O6,cloFlr Prog.rn! X x
Sl'Err! Cdrlty CrE x x
Educrtlon
BS D€gro€ in Busin6s Economics with 8n emphasis in Accounting from Uni\€rsity ot Califomia
Santa Barbara
Pmf.tslo[l Actlvlda!
Memb€r, American lnstihJte of Certifiad Public Accountants.'
Member, Califomia So€iety ot Certifi€d Public Accountants.
Volunte6r lrlsmber, GFOA Special Review Committee
Cononulno Educa0on
Various municipel a@ounting courses ofered by tl|€ Califomia Society ol CPAS and local univeEiti€s
induding:
Go\Emmental Finencial Reportm Standar* and Praclices
Yello$, Book: Gov€mmont Auditing Standards
MunicipalAccountirE
Single Audit.
Has mat the cunent CPE educalioflal requiEments to perlorm audits on govemmontal agencies
EilE
Exhibit A
Srric- Prq't .aFlo.lcld lhd. iDA ?FA Er..prtr.AIl& Auft A{.ll A-r Fld otif,
BADAWI&ASSOCIATTS
I :l
Town of Los Gatos Technical Proposal
ilonlca Slnghal, C9ftfied Pub c Accounrarr, - P.otosslonal Audit Ssnior
Lenoth ol Caraer.
Fourtoen years' exporience in auditng with sg€cial looJs on municipalities.
One year e)perionce in eccounting related position
Certified Public Accountant lor the St3te of Calibmia
e@e$!9Er!.E&n!@s.
Has psrticipated in s€verelfnancial audits, Singlo Audits, RDA eudits and PFA 8'Jdits
Sarvtcaa
ProYldadffitudnAldt _.!!!!!- A,n[ Fu.{
Cb.:
Cf, ol Brf..,
Cr, ol Ed P.5 l!
CI, oallrlo Prt
Cfy ol i.arl.d Cfy
SFdJ Ht
AE t Ccnt,Fll D*id
lltl.h carr, trfn ry
Sunr* Srrly offic
t E G.a Cc'!!rrt S.,*t fiai
l.. llrh6 Ccltnd, r3i C..oalU
Oell.^!rrd. Ccnay C.aa.r, Aa.,fy
Sd..lU.tid
Bnr,sr Elm-tr, S.rtool 0 ts
ldrll{.rt od Stut SdD.ltc
Sritla.r Sdrool urtlc
J.arsi EllllEr 6.nd (Eu
Lr Hdn .P.!..d..o t*trd S.tod Ottic
P.d.. S.t d Bit
R fir,Fod Cly S. oBu
t dmd crr sdo.l utit
Srl llcFo.a.r cl, sdod ortit
Ctri rdoobl
OtI ff.,y ltrdfa C.a.e. Pt?tr., A.dny
SErrriS v.t, cfuu San d
ia S8rlrrt C*a. fir, Ch.:s.tod
Fit S:
Fi! 5 lh.d. carr,
Frd 5f|yo Cdrt,
Fia 5r.,h Co.rt,
Fii 5llcr:ry Couiy
Fil 5 Sd. Cne Cqrly
Ora.!:
rll-. ca.!t, Holrle Contr,ly o.|ralfl ! fenc,
fltlll Ccrrt R.d.r,ao9drr
3
q
lMCor{ySrErsf..nq
CIy or O*lla . tLart C
Cft oa O.Ed - laalt Y
Cf, ol O.lId - Ct& Cr. ra or.bprrr Proirtll
Ctr.f Otr.$ErPr trL..aill qaru
x
x
x
x
I
x
I
T
I
x
x
x
x
x
x
x
x
I
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
xt
x
x
x
x
x
x
xtI
x
x
x
x
Egca!@.
Bachslor o, Sciencs in Accounlrng ftom Jsbalpur UnivaBity, lndia.
E!Eie!.!-A@@'
Member, Caliromia Socjety of C€rtifi€d Public Account8nts'
Member, InslituE ol Charl€rgd Accountants of lndia.
Coollnulno Educrdon
Various local gorremments and not for profit sccounting coursas olbr€d by th€ Cslibmis Soci€ty ol
CPAS 8nd AICPA including
Gov3mmantal Financial Repo,ting Standards and Practic€s
Yallofl Book: Gowmrnont Auditing Stsnderds
Singl€ Audit
Has met the current CPE sducational r€quirements to periorm audits on go\amm€otal sgenciG
BADAWI&ASSOCIATES
14
hq
Exhibit A
Technical Proposal
Robett Wucher - Information Tschnology SpeclalEt
Lanott ot C.]!ot.
Thirty y6ars' experience in inbmeton t€chnotogy (tT).
Worked erl€nsiwly with gor€mment sgencies, pri\raE orgEnizations and public compenies.
lnduslry e)p€ri€nce includes puuic s€c1or. banking, manuleduring, inbrnet, herlthcare, and not-br
prolit organizations
Aruaa ot ExDertll..
Syslems Auditing and Controls Review (SEC AU-314, SA$109, SAS-94).
Sarban€s-Oxlsy, S€c1ion 404 lT Complience Consutting and Auditing.
Joumal Entry Anatysb in Supporl ot SAS-99 Ging |DEA by Caseware.
SSAE-16 (SOC 1,2 & 3), Type l& ll Reporling (Formerty SA$70).
ERP/MRP Slstem Revietvs snd Workflow Anatysis.
Soft,vare as a SeMce (SaaS) Cloud Compul,ng Tecinotogies.
lntemalional and MultinationalCompany lT Audit Epertse.
FoEnsic Data AnelFis and Litigation Sepon in Support ot Fraud Auditing.
Systems S€leclion and Roquest-for-Propocal (RFp) De\€lopment.
Systems Pr€ratnming and Data Conversbo.
Systems Failuro Anatysis and Ouality lmpro\rsmont.
E-Commerce and EDI Systams.
lnformation Technology Strstegic ptanning
System Process/Proceduras Developrnant 8rd lmpbmentation.
Oisaster Recor€ry and Business Continuily Planning
Publlcadons.
lfihor, Th6 Top Fiw Trp6 Every Tochnology Exeortiv€ Needs to Know About Sarban€6-O{ey,
Publbhed 2007, AspatorB Books.
Author, Winning Logal Strategies for Tedlnology E E-Busino3s, An O\€Mefl of tT Controls Undsr
Sarbanss-Odey Publishod 2m5. AspabrB Bod(s
Prrgantadona.
lT Security Trends.
Oata Privacl and Cloud Cornputing.
lT Treods and Red Flag Rule.
lT Controls icr NFP Orggnizations
Educ.don.
B.S. degre€ in Busin€ss Administralion, Finance, Otd Dominion University, Norblk. VA.
Professional rnd Clvic A6sociations
Mernber, lntormation Sysbms Audit end Control Association (IASCA).
MAS-90 Acctunling Application Suite Oualified tnstatter, SAGE Systoms.
Former Board Member PeE are Wonderful Suppod (PAWS), San Francisco, CA
BADAWI&ASSOCIATES
Exhibit A
15
Town of Los Gatos
Town of Los Gatos
Jsssb Powall, cPA - Engagemont Quallty Rayio{rol
lerss.d-Sllrsr.
Thirty-five !€8rs ot eccounting end audfing 6xponenoe.
E(amiv€ background in audit and accounUng gngagEments for gnall businass€s ard sp€cializes in
go\remmeatal ontities 8nd notbrrtoft ooanizatioos.
Perlorms second pann6, reviews 8nd engag€mont quslity control rBviews
Active p€ar revier,ver tor tho CslCPA Peet Reviaw Program
Participates in $e eudits o, num€rous dEtricl, and city gorsmm€nt8, a8 u/gll as non{.oft entiti€s.
Elccrge!.
B.S, Busan€ss Adminiskstion, Celifomia State Uni'/ersity, Long Besch
tu&lrlelluegggr!'
Board Member, Kjmberly-Shilk A8sociatio.r
Boerd Momb6r, YMCA ol the Esst V.ll6y
M€rnb6r. American lnstitlJts ol Cdtifi€d Puuic Accountants
M€fibar, Calilomis Society of Certifi€d Public Accountanb
Member. CaICPA Gowmmenbl Accounting I Auditing Committee
Commin€e ir€mbsr, CaICPA Ac4ounting Principhs and Auditing Stand8rds Committee
Member. R€dlands Chapter o, the funsrican A$ocistion of UnivaEity Wotnen
Formsr Memb€r. CdCPA P€€r Rsview Committoe
Form8r team captain, AICPA P€3r Roview Pmgram
Former PrBsidar , lnland EmpirB Chapbr ol CaICPA
Former Ptesidenl, YMCA ol th€ East Vslley
Former Pr€sidont, Soroptimist lnlemalionsl of Redlands
Formar TrBasutor, Kimbedy-Shifi Assodation
Form Tr€asursr, CdCPA Goup lnsuranc€ Tn'lsl
Former TGasurer, Rodlsnds Cfiimunity MtBic Associatioa
Former Tregsurer, Family SeMce A$oci8ton o, R6dland
Former Treasurar, Soroptmbt lnbmstional of Rsdhnds
Former Committse Chair, CaICPA AccountirE Principl6 and Auditing StandarG Commitb€
Fonner i/bmber, Calitomia Stato Boad of Accountancy AdminBffijva Committee
Former Leclurer on Gowmmental and Noo-Profit Accountin0 8t uni\€rsity level
BADAWI&ASSOCIAIIS
Exhibit A
16
Technical Proposal
tlD
Technical Proposal
Similar
Engagements
with Other
Governmental
Entities
The lable on the following page is a partial listing of our clients similar to the Town, and illustrates
the many difierent types of components involved in each audit engagement that present very
difficult and complex auditing and accounting challenges.
lndicAes cities with population over 50,000
lndicates cities with govemmental revenues over 100 million and population o\rer 50,OOO
L-llT BADAWI&ASSOCIATES(
Exhibit A
17
Town of Los Gatos
Town of Los Gatos
hov.b lac' h..r.&Y ct u.
F.IE.i &na.. lrh,!.{pr
650,71O7O7 |
rh.nE-6.6.6a.lt.do
r,.db.t6..Yot..ndr.o do
r.Glv.arr-..d
s4-v.ite Ae6br
t5ro)crE6362
o2a)7-rTar3lrlEn,trlodl,Eh.4u.
rt F..-rb &td
fr.tiwan-lblrtqo
Dr.cx. .aA.trhattv.
ar o)57r{loa.6a.' ...bbc!nr* rt sc
FllrE a artitrab.n .
tSro)51l57!O
r07F7/r-6.5! arr. II1!
1lt.5-rO.i..i>uatlqr.6
ao)25+6 rra
cd.6rcat-.b* q.re
rh!vnat)d@ri.6
53O)2!E-tt6
Dreracayd.s&a..rt
a!o)a!3-3i 22
350)241243:t
r3*n6cl n-.-.q ! t
baarnid!4.h,!,c-E ..tl
ni.adwB..46
a.r..As..4nr.ly.qo
BADAWI&ASSOCIATES
Exhibit A
18
Technical Proposal
l*,
l"*-
l**
l^,"""'
l**'
l"**.
l'*-
Town of Los Gatos Technica! Proposal
The table below lists all
Erg.O.rnanl
P.rtnarSo.cirl tl3trlct
Cabnt
Sanc.lburt Prlnclp.l Cont ct CAFN
GFOA
Awrrd
Singh
Aurlit
E!i.rprFc
Fund3
Florh Fbsoucr
Oon5€rvstbn
tIBticU *
G.ove l/tAtct
tlstic{
2015 350 Ahnrd
Bad,ewi
l*.fiil$..g
Fhance l/tstager/Tr6a3ur€.
sr6)o85-35s6
iYeberg(Qeew d.sg
Yes Yes x
tkrit&bird
li&ler gelict 2010 350
Ah.rrd
Sadawi
tt8, I'lvung Rlstehk
RtancsLEags
415)9a$1ar0
rpt,ab*(Qrr3ritw tfer.o.g
Y6s Ye3 x x
cuonc
S6rvi:e$ abrilt
2008 350 AhnEd
8.dawi
l't. J€ft RarEs
C*fEr.d f'/brEg€r
8t6).10$7r5{,
letfranD.(eyourcad.cofli
Yes Yes
lenEr:y 3a,
tffi3dAt
Rclrrton Contsd
IXrbr
2016 200 AhrEd
Bsdaw i
ilts. Jqce tiirggre
AdBhirtative S€ryi:€s
MarEOet
ll)-71&8019
i*dtr@srd.qg
No t{A
turt of
fud'*ood Cfy 2006 2AO AhrEd
8adafli
i,t. Rairsh Sefld(
Itibn 0l{ of Fh.rlce A Adnh.
eso)30o-r150
6av, !l@f adtf oodctypoftco.n
t{o t{A x x
C.nfd C.i.rlty
Fr6 OeparttEllt 2012 150 Ahn€d
Badawi
l.lts. Jan Oooare
Firgrce llccior
650)37r7a06
i:ool€@hl3 borougtt,rB!
Ys3 Yes
APioE L8 $€av.
Fro UslIht ?016 120 AhfiEd
Badaw I
l,b. Tracr l€w
ffactd ot Bosirecs S€avico€
6934 Soqud Diva
Apro6, cA 95003
831)-6tS869O
ls NA
@t. BADAwl&nssocnrrs
Exhibit A
19
Town of Los Gatos Technical Proposal
What Our Clients Sav About Us
ln addition to the references provided in Appendix A, we have also provided contact informatbn for
all our clients on the previous page if you would like to speak to any of them about their exp€rience
with us. These are some of the things our clients have said aboul us.
Sung Hyun
Finance Director
Clty of Buena Pa*
Jim llalberg
Finance ltanager
Florin Resource Conservation Dlstrlcl/
Elk Grove water Disttlct
l would rccommq/d Bad€,wi t Associates ao an,rc,ne seelthg ptof*slonal and
knowledgable auilt servlc*"
This w* tlre Disafc{'s first year wtth Badawl & Assoclates and I found the qtfrre to
t@m to be reqponsirre, thotough, debited and prcfessloaal. Not only ras thls a first
y*r audit, bui we also lmpturented GASB 68 and completd a naior rcstttanwfi of
ine Disfnct's CapiAl Assets. Wtth all ol those movlng pleces, tlrls was by lar tha
smootlrest fTrsl yar audlt tha|l have ever prticlpatd in."
E BADAwT&AssoctArEs
Exhibit A
20
Town of Los Gatos
Understanding
of Services to be
Provided
The Torvn desires an audit of the financial records for the Tovyn and an expression of an opinion in
accordance with generally accepted accounting principles on lhe faimess of presentation of
financial statemenls lor the fiscal years ending June 30, 2017 to 2019 with optbn to extend for two
subsequent one-year terms.
The Fim will:
Express an opinion on the fair presentation ot its basic financial statement which includes
bul is not limited lo lhe financial statements of governmer al activities, the business-type
activiti€s. each maior fund and all aggregate remaining fund information in confomity with
generally accepted eccounting principles in the United States of America.
Express an opinion on the hir presentation of its combining and individual non-maior and
fiduciary fund tinancial stalements and schedules in confomity with generally accepted
accounting principles. The Fim will provide an 'in-relation-to' report on the supporling
schedules contained in the comprehensive annual financial report based on the auditing
procedures applied during lhs audit of the basic financial statements and schedules.
Provide an "in-relalion{o' reporl on the schedule of federal financial assislance based on
the auditing procedures applied during the audit of the financial statements.
Perform the audit in accordance wth generalty accepted auditing standards accepted in
the United States of America, applicable to the linancial audit contained in the Government
Auditing Standards issued by the Comptroller General of the United Stales and the
provisions of the Uniform Guidance, Audits of States, Local Gov€mments and Non-profit
Organizations.
Perform limited procedures on supplementary information required by the Go\€mment
Accounting Standards Board.
lssue the follo|ing reports, following the comphtion of the audit of the liscal year's financial
statemenls:
lndependent Auditois Reporl on Fiflancial Statements and Schedule ol
Expenditure of Federal awards>'
Tonn's Comprehensive Annual Financial Report>
Report on lntemal Control over Financial Reporting and on Complianc€ and Other
Mattec Based on an Audit of Financial Stalemenls Perlormed in Accordance with
Govemment Auditing Standards>
Managemenl Letter comments on lntemal Controls>
lndependent Audito/s Report on Compliance with Requirements Applicable to
Each Ma.ior Program and lrilemal Control over Complianc€ in Accordance with
the Uniform Guidance>
Schedule offindings and questioned costs>
Auditor's Communbalion with Those Charged wilh Go\remance>
Single Audit (f roguircd)
l. GANN Limit Repod>
Audit Report for Pension Trust Fund (optional)>
Annual State Conlroller's Reports (oprionar)
Provide special assislance to the Torm as needed..
Retain all working papers and reports at the audil lirm's expense for a minimum of 7 years.
ln addition, make t/vo*ing papers available to the To^rn and/or any govemment agency as
appropriate.
@ ,ooo*r&nssocrnrrs
Exhibit A
Technlcal Proposal
21
Town of Los Gatos Technical Proposal
Specific Audit
Approach
Should any condi(ions be discovered requiring correclive aclion, the Fim will provid€ a detailed
description of the tindings and tecommended actions as to their rssolulion.
The Firm will Bubmit a report to the Tor/n Council and management detailing eudito/s responsibility
under generally accepted auditing standards, signrtcant accounting policies, management
judgmenls aM acoounting slalements, significant audit adjusltnelis, other intormation in
documents containing audited financial stalements, disagreements with management,
management consultations with other accounlants, maior issues discussed with manag€ment prior
lo retention, difficullies encountered during the audit, and 8ny significant deficiencies or material
weaknesses found dudng the audit. Non-material instances of noncompliance will be ]eported in a
separate management letter, if appropriate, along with any other observations o, recornmendatbns
determined to be informative to Town management.
Th3 Firm will b€ available to provide advice and coumel regarding significant matters during the
year.
The Firm's Partne, and Staf, relcorne the opportunity to make Pres€nlations to the Torn Council
and will be ready to respond to questions frotn the Council and citizens ot the Town.
Obleclivos o, Our Sorvlcas
The basic objectGif our audit ot the Town is to conducl an examination of lhe financial
Btatements in'accordance with ge erally accepled Euditing standards and to exPross our oPinion
on lhe fairness of presentation ol such financial slatemonts in conformi$ with generally accePled
accounling principles.
Additionally, we bolieve lhal anolher real value of our audit lies in meeting other obiectives at no
additional cost. The follo$/ing are other objecliveo of our servi:es that have imPottant benefits to
the Town:
To offer substantive obsan/ations and recommendations rehting to
accounting and operaring control polbies and procedures.
To identify opponunities tot oPeraling efFlciencies and isolate candidate
activities for cost raduction opportunitiG..
To perrorm a professional audit in an efficienl and etreciive way to minimize
disruption to lhe office operations..
To offer ongoing advisory services to assist in lhe running of the operalion
and implementatbn of improved operating procedures.
The engagement will be conducted within thB fram€i ork ot the Firm's quality cor{rol program
which includes the use of audit programs, careful Planning, use of comPutelized audit soflware and
intemal control evalualion & documentation soffware, and ob.ieclive review Procedures. On-sits
staff will use Firm supplied porlable computers and printers.
A!CI!]!Poroachmespecmcaudit approach has been designed to efficiently and effectively address the audit
requiremenls o, the To rn, to perform the audit of the Town's linancial records in a timely manner
with minimal disruptions lo office operations, and to meet the Torvn's timeline.
The audit will be conducted in accordance with:
1) Generally accepted auditing standards established by the AICPA.
2) The slandards contained in Govemment Auditing Standerds issued by the GAO.
3) P.ovisions ol the Single Audit Act and the Unirorm Guidance.
4) Requiremants issued by the California Stato Controller's office.
5) Other requirements as required.
BADAWI&ASSOCIATES
Exhibit A
22
Town of Los Gatos Technical Proposa!
We will conducl the necessary audit steps to perform:
Planning of the engagement.r Evaluation of the.existing intemal control environment lo determine degree of
risk of materhl misstaternent..
Determination of degree of compliance with laws, regulations, grant
provisions, and Torrrrn approved policies..
Assessment of potential fraudulenl issues..
Validation of account balances..
Verification of reasonableness of management estimates.
Technical Aooroach
We..yse an industry specific audit approach tailored to govemmental entities. Our govemmental
audit approach addresses the special risks and circumslances of local goyemmenls.- As J resutt,
the audit is conducled efiiciently and effectively with minimaldisruption to your staff.
The core of our govemmental technical audit approach can be summarized as follows:
l. Planninq.Understandino andCommunication:
Based on our previous audit experience, using the budget, organizational charrs, manualsandotherfinancial .information systems and our knorvledge of-ho,v govemments work, wewillobtainaninsighttothespecificconcemsandiensitivitiesoftheTown. Ourunderstandingisupdatedcontinuouslythroughouryear-round contact andcommunicationefforts. We will agree on common audit objeaives and expec{ations wittr management
before audit work begins and, throughout the iudit, wil meet iegularly with managiftenttodiscussaudilissuesandtogatherfeedback.
2. @stemsandControls:We have developed diagnostic reviews which enable us to evaluale your systemsandcontrols, and to provide management wilh constructive feedback. C'ombin;d withourknowledgeoftheTorrnandunderstandingandexperiencewiththeTown's accounting
software, our control review will form the baiis of our audit risk assessmeni. We willutilizetheCOSOapproachinourevaluationoftheTown's intemal processes to identify potential
control deficiencies. ln future years, we will update our understanding throughsimilarprocedures.
3. Bisk-Based Customized Testino prooram:
Our audit approach is tailored to govemrnental applications We will use audit programs
specifically designed lo address the operational environment of govemmental entiieslOurapproachwillidentifypotentialcontrolrisksandtheopportunitiesforriskofmaterial
misstatements and fraud. We will evaluate the various risk assessments and identifythepotentialrisksrelatingtothe:
o Balance Sheets/ Statemenl of Net position
r statement of Revenues and Expendrtures / statement ofActivitiesoPresentation:
Disclosure
our audit procedures will then be developed to address lhese risk areas.
E BADAwT&nssocrnrrs
Exhibit A
23
Town of Los Gatos Technical Proposal
4.
5.
6.
8.
9.
Eroanded lnterim Fieldwork:
ffiyisenhancedbyperformingextensiveinterimwork.Partners,
managers and senior staff wod< wilh Town staff to identify and resolve gotential audit issues
early -
Accordingly, the amount of audit work to perform at year end is minimized. Because
our Ludit staff iJ iamiliar with the operations before year-end fieldwork begins, disruption of
accounting staff is minimized
Smooth Transition:
6ur tes focuses on audit dsks identified by our understanding of the Tourn's
operations.
We
will work with the accounting staff to identify the-most effectlve urays to
address our objectives. Communication between the members ol the audit engagement
team and Town staff will be fluid and continuous.
Samole Size and Samolino Technioues:
g activities. Population size and the level of
assurance to be derived from a particular test will dictate the sample size. We use sampling
in our audit approach to compliment skilled judgment and knorlvledge of the particular
situation. Our sample size will range normally from 25 to 60 items.
7 Automated Svstems:
ffils over the lT tunctions lo assss control risk. We intend to test
conlrols for purposes of reliance. Our review procedures will evaluate controls over:
SecurilyManagementoLogicalandPhysicalAccess.
ConfiguratbnManagement.
Segregation ofDutiesoContingencyPlanning
ln addilion, we will review controls oven
r lnput, procassing, output, master data
oApplicationinterfaceoDataman4ementsystem anterface
Our lnformation Technology Specialists Group will evaluate the lT operating control
environment.
Analvtical Procedures:
@duresinseveralaspectsofouraudit.Extensiveknowledgeand
industry baciground are required for effective analytics, and our staff possesses the
appropriate experience and knowledge for the Town to benefit from these procedures.
Approach to be Taken in Determinino Laws and Requlations Subiect to Audit Test
Work:
Wlcontinuously refer to specific regulations, compliance supplements, state guidelines and
contracls currently in force. We perform the procedures required related to laws and
regulations, using inquiries, observations and sampling techniques. Some of the laws and
r{ulations that we believe may be applicable to the Town are the requirements ol the
CJifomia Public Utilities Commission, Single Audit Act and other applicable laws and
regulations, including the California Government Code, provisions of applicable Gran!
gu-idelines, California Constilution GANN Limit requirements, requiremenls of local
measures, Child Care Program compliance requirements, elc.
E BADAwt&essocnrrs
Exhibit A
24
Town of Los Gatos Technical Proposal
10.
11.
12.
13.
Report Format:
We will meet wilh Town Management lo review report formats. Any reporl format changes
will be made in conjunction wilh approvalfrom the Town,s management
Work Plans:
The.detailed work plans will be designed to efiiciently and effectively address the audit
requirements of the Town in accordance with generally accepled auditing standards, toperformtheauditoftheTorn's financial records in a timety manner with minlmal disruptions
to office operations, and to meet the Town's timeline.
Adiustinq Joumal Entries:
We will discuss and explain proposed audit adjusting entries with the Town's designated
Finance.Department personnel prircr to recording. Audit adjusting entries will be providid in a
format shoring the lowest level of posting detaiineeded for datientry on the Town's general
ledger system.
Uv Ue fownt:
Based on preliminary inquiries maOe nd reviewofdocuments, we will tailor a lisl of schedules, tables,lnd other reconciliations required for the
audit. We will take into account as much as possible reconciliations already prepared bytheTownfor, day t9 day operations and reporting, as well as any reporls ti:at' aresyitemgeneratedtolimittheneedforadditionalTownstaffhours.
The follorving is a listing of significant reconciliations that we would normally expect the Torn
to provide to us in assisting us in conducting our fieldwork.
r Trial Salance.
CAFR and Account Roll UpScheduterBudgettoActualReports.
Bank Re@nciliations
o Listing of manually prepared journat
entries posted.
Summary of lnvesfnenb held by the
Town.
Capital Asset Schedules
o Long Term DebtSchedulesrDebtamortizationscfiedules &
Calculations of defenedamountsrCalculationsofanydebtco\Enants
amounts orpercentagesrScheduleofOperatingLeases
o Schedule of Erperditures of Federal
AwardsrAnalysis of Defened lnflourc of
Resources an Defened Outfro,ra of
Resources
Reconciliation ol Receivables to subsidiary
tedgets
Calculations for estimate of allowance for
uncolladible accounls
Loans Receivable Schedules
Roconciliation of Signifcant Rerr,enue
Accounb
Utility billing Registers end Fee schedules
Compensated Abences and Early
Reliremenl Obligation Schedules and
Copies of Related Policies
Ctaims PayaHe schedules
Pension and OPEB Roll Fonrard &
Supporting Schedubs
GASB 54 Fund Balance Roll Forward
Schedule
lnterfund Transaction Schedules
a
a
a
O
o
a
a
a
a
EI, BADAwT&essocnms
Exhibit A
25
Town of Los Gatos Technical Proposal
14. Gomouter Software:
The firm maintains a variety of software packages in the audit and financial statement
compilation process, which include MS Ofiice (Word, Excel, etc.), Prosyslem fx Ergagement'
ppi Cnecfioint and Checkpoint Tools, and Single Audit SMART Tool. Our l.T. Specialist
also has the ability to run reports using IDEA (data analysis softrrare).
Our audit software enables us to link our audit trial balance to lhe tinancial statements, for
effrcient financial statement compilation. ll also allows us to create various analytical reports
easily (e.g. year to year comparisons, budget to actual comparisons, trend analysis, ratio
analysis, etc.).
Our research tools are always kept up to date to ensure compliance with accounting and
auditing standards, and are aiso a resource lor us to provide guidance to our clients-
We also use Prosystem electronic portal, whictr allovvs our clients to easily upload
requested audit schedules and tesiing setections. The portal is very helpful in the
audit process as it reduces dupticated audit requests' lnq 1l-lows our engagement
team to revlew uploaded schedules prior to beginning audit fieldworh.
a
a
a
ExhibitA@! BADAwl&essocnms
26
Town of Los Gatos
Audit Schedule
June
June
Awaid ot Coolnct
lnHrr &tdlt Prfiadurta:
Pbmtag arl Adnhffioa
RcylClv Jd o[.lh cotilE ol kly nEit plFr! ol plkr sud.t frm.
Er{rarc8 coiftGncr !{0t TorJi Mamg€m€nt to dilcr6s rudit approadt, limirE,
8E6blficr, 8nd tssl.E3
R€{isw and svahrat! lha Town 't accorrtii! lld fna,lcirl llportim. prroar9 8n
otral nEmo ot.lco.flltcradb.!, potGrlial bstt, and 3uggcsti6r ,or
improGmcnb.
Pr3?at! ovlnl nomo to Toen co.lEnhg adit p.oclduE, liming, and
Sstblsnca. ,/
PrlP.Ir &ld€d .trdit rcrt pfrn md ]dr1t prograns, aldt budgEt .nd 3bfing
harub, .rld bt o, &n€dll!! to ba p.lpsld by Toun ltsft Jx, p.oridc it to
Tou.t lhn.gt! ana.
tnlem.l Conlr!,l Ey.tuelon
eotir! tih kry Filane Divlsion pelroffrl.
O ah arld doorrrr{ lrda,rlfdhe of kly irffirlco.ltd ryltorru Oyo.fgh rs*-
trot4ht, intsNhwE ol !t fl, ud rlyiar r ol lpporting dodrr.iElionl
Ganoral lcdlGr lystern.
Br,tdgetng !y!fm.
RcEnr, uflity HiE. sccotntg lEcehlsbL, trd c!!h cdlcdiolB.
hrtharrre, rrocndtura. lccouds plyabb, and cash dilbusenrnB.
P.yUl.
FcdGral Finrndd Aarlstrnce,
Oticr rytbm!.
l&dily co.|tsl &ks.
Et.latc lT corirol erui.rIri,rwrl. /
Pedo.m t€lhg of lh6 r,rd corlrol 9yltsr lnd.vduai! tha rthirrloa.s of
t E Tovrn '! lyEtems. S€hd lal!6 dlrr lnd nndom 3ampls! of traBadionr h
key op€.rlirt Eyrtarrl!. Slmplc lize to ma!,t Eqdcd levd for dctcmimd
g!a ot fuk. Rcvitw lwpoding doona ltkrn ol $Lclcd tran$ction!,
ar,duair doqur€y of ll.ppod rln tegrovd!. rrd co.duda on &gr!e o,
ldh6r€flcE to rcqncy rnd comCisncs wih Tou/n policb3.
Conduci trald sllrglmrni p.ocadur!.'
Assr3s (,Ce ,E ot rilk ro. malcrial tt|itstdcrlrnt./
Prolidg to t! To*n '3 mar|aeGihai t mrmo concGmirE msnslEnrd l€lier
pointr !r{ ld.r{ily bslrs, it rny. '
BADAWI&ASSOCIATES
Exhibit A
27
Technlcal Proposal
N1t
Pctlod A|dlt T!.l(t
tt
Town of Los Gatos Technical Proposal
mfl
Period
June
SeBembcr -
kober
September -
O€fober
Otter lasks
Revierr minutss of Tom Coundl m€otitpo arxl ofi€r kcy cfiimifce'
Preliminary testing,wrify and validat€ accomt bshnccr W ra'iewitE stspdr€
deumentalion indulng inwrices, \oucfnrs, courc{ Bldutions, minubg. gtd dpr
documenb, as rcquired.
Preliminary Sit$c Audit and ofrtd csrdtanoe t33ti!R
coofdinate wi$ Tom stafl and gfspets o, s[ spProp{iste confinnalio .ts.EsE including:
Bsr* accoirlts.
lnvcstnail pod ur*s.
Acoodr mocivabh.
Fefiralgr€.lb.
Rcrrrxtc ilottt got,€iltmc.iC rytdla
Bofld alttl dler d€bts.
PGrsrott F.
Albtn€, lers.
Otpa, as rcryimd.
Prq,id€ To*tt rih etdt Catt ild fd o[ y.e ord adll edndJce'
tldd progrress canhrarrcewifi Tmn tYtanagerncr*
Fldct exit confuenccwith fourn UanaOonsL
Finat Field vort(
Entnncscqrhrncswih Town Matae€nt€ttt
Fouox.up m aI o.tstafifng cofifitmd,{I1s.
vaify and valklde eccount bdanca! by nvinring suppo.tng doomfftatio|l induding
inwrirces, vqrcirers, council ra3dutbns, mim,t€s, and dlrer doe.rments, as rcquired'
Pcrbrm arCythal revietfl of rerr€n|E a,x, crPefxtihr€s. Deu,min€ eesoo br matedd
difief? tcet bct\^cen budget and 8dld.
Perlonn a seacfr hr wrrecorbd liablliti€! by rgvtt*itlg dbbursetp3flb 3166€SJGfit to June
30, testitE terms of conbatud oui{Ftbns, and intavicwing Torn s6'
Performreviewolsubsequenta,afilsbydisoissiotlswitrTorn llatryneotandlpdab
a$ minutes ol Torrn Courrrl and kcy commit€6.
Single Audit ComPti.nce
Entrance coflhrenoe with Towtt Managsment.
Obtrin F€d€rd Finncial Asistance Scheth{e.
DeErmirc grants to b€ consideled 8s mior progrrams indudirE dusbrs'
Perfonn audit tesb of maix grant programs and compliencc wilh Fcerd Lar 3nd
Regdations.
Revigfl grant (hcuments, seleci sufficj€nt nunbef of Eansactions to tesl b, comdisnce d
Fetleral RequiremenB.
Coordinate Singilc Atdit efforts wih fl€ Financial Audit ffirts.
Commurscate findings to Town Manag€ment
O&er Comdlance
@t BADAwt&nssoctems
Exhibit A
28
Audit Teskr
Town of Los Gatos Technlcal Proposal
I
Audit Schedule. Continuod
odonq --
Ao.ttl R.,o,I'
PrrFr dr.ll ol tha Tqit ,lirtdJ ataLlrtr
Plrpa.! rrrt ol Slth Aldl R*D.t. 6tE ttrC htfitd co.lrd tnrtui!.
adpatae u[r bt rrd nedfionr, tr diH.ltli9 ofltt a,C ilttddeilreD.ooma. (a .tqdl.d)
Prrpa.r o0La leFafa aa ra$i!d.
pro',ia ta, A ,.p,ts toT i ll-raadtlarlt to. l!ll*.
Ploiix rqraad thJ d.ltt d a Gq|iad eo.ta to tta Tei b ?!.on.l
Dccemb€r . Fhrl AJ{,t ne,,,.6 FhrDc&, St rarr.ntr, Srlgra ludrl md Otrar R.rp,rL atatt atd
@ *oo*r&e,ssocnrrs 2e
Exhibit A
2017
P.rtod
Town of Los Gatos Technical Proposal
Discussion of
Relevant
Accounting
Issues
ldentification of Anticioeted Potential A it Problems
We do nol anticipate that there will be any audil problems at the To,vn. However, the following are
6ome areas thal we will carefully investilrate and monitor during our audit procedures:
Financial Reporting:
o Review and evaluate that the Tofln's Annual Financial Repotts are in complbnce with
cunent reponing and disclosures raquitements issued by the GASB and GFOA.
o Review Annual Financial Reports for financial reporling conformance awards issued by
CSMFO and GFOA.
o Review and evaluats d€gre€ ot compliance with the various GASB8 in effect.
c Review degree of comPliance with infrastructure obligations and regulatory Provisions.
lnt€rnal Conlrol Slruclure:
o Review and e\raluate the To n's inlernalcontrol funclions and ascerlain complianc€ with
prop€r intemal control philosophies.
o Review computet system prooesses and controls and evaluats adequacy of the conlrol
environment.
Statement 74 - Financial RePorting tor PostemPloym€nt Benefit Plans other Than Pension
Plans
Statement 77 - Tax Abatement Oisclosures
Statement 78 - Pensions Provided lhrough Certain Multiple EmPloyer Delined Benefd Pension
Plans
Statement 80 - Blending Reguirements for Cerlain Component Units - An Amendment of
GASB Statement No. 14
Stetement 82 - Pension lssues. an amendment of GASB Stalements No. 67, No. 68, and No.
73
Statement 75 - Accounting and Financial RBporting icr Poslsmployment Benefits Othor Than
Pension
Slatement 81 - lnevocable Split-lnterest Agre€ments
Staternent 85 - Omnibus 2017
Statement 83 - Cettain Asset Retirement Obligations
Several new GASB pronouncernents will be€ome etfeclive ovel the time period of this proposal. AS
such, specific aueniion will be Provided lo d€termine the propsr implemonlation oJ thte ngyr
pronouncements. A list of kno/vn new pronouncernents with implementation dates that fall within this
proposal period are as lollo ,s:
2017
2018
2020
20r9
@ u r^*,&rssocterrs
Exhibit A
30
Statement 84 - Fiduciary Activities
Town of Los Gatos Technical Proposal
Conclusion A clienl relationship with the Town will be of great value to our Farm and rve welcome the
opportunity to develop a long-term relationship with the Town. We are committed to:
Rendering the highest standard of seNice.
Developing a long-term working relalionship dedicated to meeting the needs of the To^/n.
Assisting lhe To.vn in operalional issues.
Producing a quality end-product.
We have the techni5l quamc€tions and exp€rience to provk e the level of s€rvice desircd and
expecled by the To^rn and stand ready lo provide our knowledge and experience for the benelit of
your organization.
We uould like to express our apprechtion to th€ Town and to ils Staff for allof,ring us the
opportunity to submit a proposal to perform professional auditing services. We are arrailable, at
your convenience, to discu3s any aspects of our proposal.
Thank you for allowing us to present our Firm to you.
@ *oo*r&e,ssocnrrs(
Exhibit A
3l
Town of Los Gatos Technical Proposal
Appendix A References
1) City ot B€rkeley.
Scope of Work: CompretEn3ivs Annual Financisl Repott, Gann Limit, SAS114. tlgesurs B
Alam€da County), Vehid€ R€gEtration Fee Audit (Alarnoda County), Due Dilirenco Revia*B bl
o ROA Succa8sor &pncy.
Contrad Arnount t 188,000.
EngagBrFnt PartEr Ahm€d Badswi.
PrincFal Contact:
Mr. Hanry Oyekan ni
Financs Dir€clor
s10)981 -7300
ho\.€kanmiAci.brrkebv. ca.u3
2) City of Nsvrart.
Scope of Wo.k: ComprEhensiw Annusl Financiel Rapo( Single Audil Gann Limit, SAS114'
tltilii'l UseB Ta(, Vehile Regisadion Foo Audit (Atam€da County)' iil€asuro B (Alam€da
CoiJ;ty), Tran3porlslion D€v€lopmenl Act Nowa Bottament Corporation Audit' NetYsd(
Betterment Corporatiofl 990 Tax Retum, Du€ Oligence Revia$6 br ti€ RDA Succ$sor A€ancy
Conuacl Atnount $55,m0.
Engag€m€nt Parlnar Ahm€d Badawi.
Address: 37101 Nswa* Bh,d, t{sw8ri, CA 94560
Principal Contrt:
Mrs. Susie Woodstoct
Oireclor ot AdninBtrativ3 SeMc8s
Phon€: (510)57H8Ot
Fax (510)57H358
illiered$clloos[r8-olc
3) City ol S.n Mateo.
Scope ofWort: Comprehensive Annual Financial RePort, Gann Limit, SAS114, Measuro
A (San Maleo Counly), Due Diligence Revi€ws tor tho ROA Successor Agency
Contract Amount $60,000.
Engsgement Partn€r: Ahmod Badawi
Addr€ss 330 W 2Oh Awnu€. San Mateo, CA 9/t403
Principal Conlaci:
Mr. DrBw Colbstt
Diroclor ol Finenc€
Phone: (650)522-7102
t) City of Easl PaloAltorScopeolWoft: ComprBhsrEi\/6 Annual Financial R€port, Singla Audit Gann Limit SAS1i4,
MoasurB C. Maasure A Rapofi (San M6bo county),.
Cont'ad AmolJnt S80,000.
Engagamont Partner AhmedBadawirAddress: 2i115 Unirrersity A\€nua, East Palo Alio. CA 94303
Principal Contacl:
Mr6. BIBnds Owin
Finance Oil€dot
Phona: (650) 85$3122
bolwin@citvohoe.om
BADAWI&ASSOCIATIS
32
Exhibit A
Town of Los Gatos Technical Proposal
5) City of Buena Pafi.
Scope ol Work: Comprehensirre Annual Financial Report, Single Audit, Gann Limit, SAS 114,
Buena Park Foundation.
ContactAmount930,735.
Er€agpmeril Pertter: Ahmed Badarvi.
Addr€ss: 6650 B€ach Boulewrd, 1d Floor, Buena ped<, CA90622oPrincipalContact
Mr. Sung Hyun
Finanoe Direcbr
Phone: fr14F62-37r3
shwn@buenafi.csn
6) City of Calimesa.
Scope of Work: Basic Financial Stetem€nts, Gann Limil, SAS ,l
14oContradtunount $25,62.
Engagpment Parher: AhmedBadawioAddles: 908 Park Avenue, Calimesa, CA 92320.
Principal Conlact
Ms. Bonnie Johnson
City Managa
Phone: (909)795.9801
bi ohnsonocitvobalimesa. net
7l City ofBarstorlroScopeofWodc Conprehensirre Annual Financiat Report, Singb Arrdit Gann Linit. SAS 114,
Barstorv Fire Protedion Distic{, Odessa Water Dbtric{.
ConbactAmarnt$71,152.
Engagement Parhen Ahmed Badawi.
Acldress. 220 E. Mountain Vrew Street Ste. A, Barstow, CA g23l t.
Principal Contacl.
Mrs. Cindy Prothro
Finance Diraclor
Phone; (760)25$5115
coro0[@bersto*ra.om
@t BADAwl&essocrems(
V Exhibit A
33
Town of Los Gatos
Appendix B PROPOSER WARRANTIES
The proposer u'arrants 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
acb or omissions of any officers, employees, or agents in coniunction with the services
to be provided. Coverage limis shall be $2,000,000 or mone Per occurrence, without
reduction for claims paid during the poliry period. The carrier should be duly insured
and authorized to issue similar insurance policies for this nature in Ale State of
Califomia.
The proposer warrants that it will not detegate or subcontract its resPonsibilities under
an agreemmt without the prior written permission of the Town.
The proposer warranb that all inlormation provided by it in connection with this
proposal is bue and accurate.
ArJB"4=-
Sisnature:
Printed Name:Ahmed Badau'i
Title:Presitlent
Firm: Badawi & Associates
Date: March 31, 2017
rlltE BADAWI&ASSOCIATIS
Exhibit A
34
Technical Proposal
Town of
Los Gatos
For Professional Auditing Services for the
Town of Los Gafos
For the fiscal years ending June 30, 2017 to 2019 with the
option to extend for two subseguent one-year terms.
March 31,2017
Contact Person:
Ahmed Badawi, CPA
Badawl & Assoclates
Certilied Public Accountants
180 Grand Avenue, Sulte 1500
Oakland, CA 94612
Phone: (5'10) 768.8,214
Fax: (5'10) 768{2,f9
Efi all: abadawl@b-acoa.com
@ .ooo*r&AssoclArEs
Exhibit B
SEALED DOLLAR COST BID
Exhibit B
Town of Los Gatos Sealed Dollar Cost Bld
Name of Flrm and Certification
The undeEigned declares that he or she has carefully examined the Request for Proposal document
and is thoroughly familiar with its contents and is authorized lo represent the proposing firmi and
hereby agrees to perform the speciFted vt.ort for lhe cosl quoted below in full.
Firm Name: Eadau/i t A86ociae6
Firm Address 180 Grand A\€nue, Suite 1500
Ahmed Badawi
President
10 7684244
abadawi@S.acpa. com
At-JB--t=--
Signature:
Print Name
Tifle:
Date:
Ahmed Badawi
D.ai,aa.t
Schedule ol All-lnclusive ilaximum Price bv Report
Op0ona I Yoa r8
Al.lnc lu! hrt Irrlnr um Prlcc
by tuporr
Towr Ardif
Singl€ Ardit
CAFR Preparation
Genn limit
l,lanagament Lelbl
Total R€quested Se^ices
Optonal S€^rices:
Stats Contollers Report
Adit o, Pension Trust Fund'
Tot lAllSsrvlco!
June 30,
2019
26,'t15 3
2,940
1,7 45
175
390
JurE 30,
2017
24,040
2,420
2,690
395
325
25,590
2,730
1,640
t0
360
June 30,
2020
June 30,
2021
26,115 $
2,940
t,745
175
390
26,1 '15
2,940
1,745
475
390
29,870 30,760 31,665 31.665 3r,665
I 32,016 I 33,r75 3 34,265 $ 3.,?65 S 3ar65
Audit olthe Pension Trust Fund (if created by the Town) will be induded as parl ol our audit o, the Town's linancial
slalem€nts.
l*.nE B^DAWI&ASSOCIATES
Exhibit B
Oakland. CA 9{612
Contact llame:
Contact Title:
Contact Phone:
Contact E-mail:
Signature ot Authorized Representative:
March 31. 2017
r
2.'.115 2.415 2,600 2.600 2,600
Jurl. 30,
2018
Town of Los Gatos Sealed Dollar Cost Bid
l-buB
OudGd
ilarly
RdG
Orid!d
Totd
3 3.7E0PartrBrs28Ir35
105 6,405M$aoers 61
85 E5 7.2.5SuEnisoryStei
91 70 6.370Slafi
lT Soecidist 100 2W
60Clsicd'I 60
Orrt4{-Pocla
exoetlses
Meis & lodoirE
TransDonaron
Othe{ (so6*Y}:
24.0a0
Tdd llincrl,3iE
maimun
Schedule of Professionat Fees and Exoenses bv Deliverabla for FY20l7 to FY20{9
Torn Audlt lFY2OlA Town Audit lFY2{ll8l Town Audlt lFEllgl
HouE
Orrolcd
Hotty
Rde
OrrdGd
Tdd
Partners ?7 3 155 3 4.rEs
Manixtcrs 58 11C 6380
Sue^isfl itall 83 95 7.E65
Sran 86 80 6.880
lT Soecrdl3t 2 100 2S
Clericd 1 60 60
On{fpock6t
AIEGES
Mcds & lodoim
Transgortiion
Oth€r (sgccitY)l
TotC ata,rcluciE
filIinr.rlt 3 25 590
Sinols Audit lFY2Ot8l $inci!&iffiYm1$
b.G
Ouol.d
Horry
Flt.
Oriataal
TC.C
Pa'lners 2 $ 155 3 310
Manaocrs 2 1tc 22n
SuoerirsdY stall 6 95 760
srdt 18 8C 1.4,(0
lT. SsEidisl 10(
Oericd 6C
O'r+pockcl
affia'
Mesl3 t lodorm
Transooneion
Oth.r lEoecifvI
Ttla dlinclusir.
rn&imum t 2.730
d
ql
l'burs
Otdcd
Ho(,iy
Rt.
Qudrd
Toad
PanmB 25 3 170 t '1,250
Msroers 54 rr5 6.210
SumiBe sla{l n r05 8,0E5
Sralt 86 85 7,310
l't. Soaislisl 2 100 200
Ctmcd 1 60 60
Or-dpcfGt
exE lsgsl
M€d3 E lod*m
Tlanspodt;on
Othc, (3Eity).
TolC iHncluiir.
rfiriril{Il I 25.115
llouE
Onolad
tlorrly
Rde
Qrrdcd
Toaal
Partnefs 2 t 135 t 270
Mglaoers r05 210
Suenasoav stdf I 85 6E0
Stat 18 70 1,260
l.T. Sp€cidisl 100
CIsicd 60
Oln{f,pocka
oan3es:
Mears Elodoim
Treasa6naion
Other {so€cifY)
Tdd ctirrlGi\e
m$(amum I 2.1m
hl$
O'rdrd
lhrty
Rete
Atot.d
Tdr{
P9.lrp.s 2 I 170 3 3a0
Manaoers 2 'tl5 230
SusnaeorY sldt E 105 840
srd 18 85 1.530
l.T. SpcclCirt r00
CtmcC 60
rl.c*!6kti
dM:
llals t lodem
Tmsmrtdim
OttEr (sEifvi:
Tca.t Ct-irEnsir.
meirmrn 0 2.940
2
@t BADAwT&ASsoctArEs
Exhibit B
Town of Los Gatos Sealed Dollar Cost Bid
schedule of Prof$sional Fe€s and ExoenBes bv oeliyorable for Fy2o'17 to Fy2o19 (continusd)
CAFR rFYlmTr clFR tFEotlt.CAFR IFY1OIIT
Ratc
1 t r70 t r70
2 1t5
3 105 3r5
Slan 1o 65 850
lT Sp6idirl 100
Odrcd 3 60 100
Mds t lddm
3 1.745
Gtnn Llmlt lFY2OtTl
Ouotcd
Ri.
OiJdd
Totd
1 ! 135 3 r3!i
1 105 105
1 65 E5
S!sn 1 70 70
lT SFcitr.l 1m
O.ric.l 6C
TotJ al.ircli.ir.
t 395
iq,t lf 2016 rld 2O1t rt arlrrine t ..dlc. E Cro*S in FY20t7
O.nn Uln|tlFfI0li] Ornn Lhrtt IFY:IOitt
q
Orrold
Rdc
ollot!d
TorC
1 3 155 3 155
2 110 2A
3 95 245
Slall 10 60 E@
IT. SF€cidrn 100
O.dc!3 60 1EO
I l.BtOIIIIIIIIII
Oud.d
lbolry
Rl.
GJ.l6d
Told
2 t r35 z 270
3 105 315
7 E5 595
sldl 19 7A 1 330
tT Spccdist 100
3 60 180
Toll dl.irEllnl\.
t 2.6q)IIIIIIIIII
O'J.ad
tbony
Rd.
Osdd
Taisl
1 I 195 I 'r55
1 110 1r0
I 95
Sl.t I 80 EO
I T SEciCi.t l@
6o
IL0IIIII
Oud.d
Flta Tdd
1 5 170 a r70
1 115 1t5
1 105 105
Slat 1 85 65
lT Sp-drit 100
Clncd 60
3 475IIIIIIIIII
L?lE r BADAWT&ASSOCIATES
Exhibit B
3
Town of Los Gatos Sealed Dollar Cost Bid
Schedule ot Professional Fees and Eroenses bv Delivorable for FY20l7 to FY2019
Erotc!o!!t"lr!r! lf l40lt)Xrn o.rn.nr Lrlt r {FY2Olll tll.orrr.EtdJrtf EiEl$
s . contorl.,. Jr nY.rrrr
Qudld
lbqrly
Rr.
1 s 135 t 13t
2 105 210
8 65 6ao
Stri 16 70 1_120
lT Spcc€llat tm
60
3 2.145
strt contoll.rr [L!on lFY2ol8l
Oqd.d
Ou.td
Totd
1 t 155 a 1s5
2 r10 220
6 95 760
Sran 16 EO 1 200
IT SpaaidEl roo
Ocncf 60
a 2.415
Sr.t Connoll.nR.ponlFYmlrl
Ouarad
flta
Oudd
1 s r35 I r35
I 105 r05
1 85 85
Sran 70
1@
60
Totd ll.irEll'h.
3 325
IIIIIIIII
O'rcd
Rt.
I I 155 t 155
I 110 110
1 95 95
Slall 80
I T SFcid'$1@
6!
I 360
III
Oudd
flla
Ortd
T6rd
I I 170 I 170
115 115
I r05 105
srcl
100
Cl€acal 60
Tol.l alilElrli.
I 3r0IIIIIIII
Oud.d
Rd.
Ir7013r7o
2 115 2g
105 8a0
Siatl 15 85 1.360
1@
60
I 2.6@
III
II
EtilE
4
BADAWI&ASSOCIATES
Exhibit B
1
T--
tl
Town of Los Gatos Sealed Dollar Cost Bid
ltlanner of Pavment:
Ellllno Seouence:
We will submit our bill for servi:es on a progress basis-
lnterim fieldwork (Progress Billing 1)-
Year-end fieldwork (Progress Billing 2)-
Report issuance (Final Billing)
Rates for Additional Professional Services:
Any services outside the scope of our engagement will be promptly idenlned before the
seNices are rendered- Upon mutual agreement, the out-of-scop€ seNi:es will be separately
billed at our standard hourly rates. While it can be difficutt to simply state hourly rates, as
often times the needs of the cli€nl and th€ specific lasks direc{ly impact the billing rates for
our services, we want lo provide the following information regarding our published billing
rates:
Porilion Hourly Rab
Parlner
EQR
Manager
Senior
Stafi
n
Admin.
200
200
150
125
100
150
75
Our Standa.d Hourly Rates are adjusted annually by 3% for Cost of Llvlng and lnflatlon
Adjustments
@ .oon*r&nssocrnrns
5
Exhibit B
Town of Los Gatos Sealed Dollar Cost Bid
A client relationship with the Town will be of great value to our Firm and tt/e urelcome the opportunity
to develop a long-term relationship wilh the Toivn. We are committed to:
Rendering the highest standard of service.
Developing a long-term working relationship dedicaed lo meeling the ne€ds ofthe Town
Assisting the Town in operational Bsue3.
Producing a quality end-product.
We haw the technical qualifications and exp€rience to provide the level d sorvice desired and
ex@ed by the To n and sl,and ready lo provile our knowlsdge and erqerience tor the b€nefit of
your organization.
We would like to express our appreciation to the Torvn and to its Staff tor albvving uE lhe opportunity
to submit a proposal to perform professional auditing sewices. We are available, at your
convenience, lo discuss any aspec,ts of our proposal.
Thank you for allowing us lo presont our Firm to you.
BADAWI&ASSOCIATES
Exhibit B