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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 Professional Auditing Services - Badawi & Associates 05,20r r Page I of6 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 Professional Auditing Services - Badawi & Associates t-9 05,201 l Page 2 o1'6 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 Professional Auditing Services - Badawi & Associates lll 05 l0r r Page 3 of6 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 Page 4 of6 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. Prof'essional Auditing Services - Badawi & Associates 05.10r I Page 5 oi6 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 Professional Auditing Services - Badawi & Associates 05 201 ! Page 6 of6 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