CC Audit 2019 City s Response to Questions/Clarifications RFP Addendum # 1 March 4, 2019

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Isabella Norton
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1 CC Audit 2019 City s Response to Questions/Clarifications RFP Addendum # 1 March 4, 2019 As described in the CC Audit 2019 Request for Proposals issued February 13, 2019, questions and requests for clarifications were submitted by audit firms. All questions received in writing by the question deadline (February 27, 2019) are included in this response. Question 1: Is your current auditor included or excluded from this RFP? Why is the organization going out to bid? Is the incumbent allowed to bid? Response 1: Our contract with our previous auditor, Badawi & Associates, ended with the FY audit. Mr. Badawi has been the City s auditor for five years, and the City is now required to contract with a new audit engagement partner. Badawi & Associates is allowed to bid on this RFP with a different audit partner. Question 2: How many auditors and how many days were the prior auditors on site, for various types of field work? What was the total number of hours in the prior year? How long were the auditors at the organization last year? Response 2: The on-site audit team (Engagement Partner, 1 Senior Accountant, and 1 Staff Accountant) were at the City offices for one week. The full team did additional work off site. The City does not have the total number of hours. Question 3: What were the prior year fees for all the audit services provided? Response 3: Please see the City s agreement with Badawi & Associates, attached. Question 4: What were the prior year fees for the compilation of the financial statements? Response 4: The prior year fees were not broken down by service component. Total fees are listed on the attached agreement. Question 5: How many journal entries were proposed by the prior auditor and how many findings did they issue? Response 5: City staff worked with the auditor to request guidance on various issues prior to the need for audit adjustments. During the engagement the auditor proposed one adjustment, which the City made. There were no findings.

2 Question 6: Are there any new audit services requested in this RFP that were not included in the prior year fees? Response 6: Yes. The City has not been preparing a CAFR, which is included in this RFP. The prior audit agreement did not include preparation of the annual SCO reports, which is included in this RFP as an optional service. Question 7: Were there any significant events in the current year? Response 7: The only significant accounting change during FY was the implementation of GASB 75. No other significant events. Question 8: Are there any plans for new indebtedness or refunding, if applicable? Response 8: The City does not currently have any bonds outstanding. The City may incur new indebtedness during the term of this agreement. Specifically, there are at least two projects (water system improvement project and renovation of a new City Hall) under consideration. Question 9: Please provide the prior year audit fee for both City and Housing Authority. Response 9: Please see the City s agreement with Badawi & Associates, attached. Question 10: Were your GASB 68 pension balances calculated by an actuary or other third party, internally or with help from your prior auditor? Response 10: The City is a participating agency in the CalPERS cost-sharing plan. Actuarial reports at the plan level are provided by CalPERS, and City staff calculates pension balances and required journal entries with the assistance of the auditor. Question 11: If you have another postemployment benefit plan (retiree medical benefits), have you had an actuary complete a valuation as required by GASB 75? Response 11: Yes. The City does have an OPEB plan and had an actuarial valuation prepared for GASB 75 purposes. Question 12: When was the last inventory of your depreciable property completed? Response 12: The City reviews assets annually with confirmations and adjustments provided to Finance by each department. Question 13: Have you had or do you anticipate any management turnover? Response 13: The current City Manager (former Public Works Director) was named Interim City Manager in January 2018 and permanent City Manager in June The Finance Director has been in place since May No turnover in these two positions is currently anticipated. There has been and will be turnover in other director-level positions in the City.

3 Question 14: Have you had or do you anticipate any council member turnover? Response 14: Council members are elected to four-year terms in alternating cycles. In November 2018, two Council member positions were up for election. One was re-elected; the other chose not to run for re-election and a new Council member was elected. The other three positions will be up for election in Question 15: Do you plan to issue any debt or have you issued any debt since your last audit? Response 15: The City does not currently have any bonds outstanding. The City may incur new indebtedness during the term of this agreement. Specifically, there are at least two projects (a water system improvement project and renovation of a new City Hall) under consideration. Question 16: What was the all-inclusive cost of your audit by service component? Response 16: The prior year fees were not broken down by service component. Total fees are listed on the attached agreement. Question 17: Please provide a copy of any management letters related to the audit report. Response 17: There were no management letters identifying significant deficiencies or material weaknesses related to the FY audit.

450 San Rafael Avenue Belvedere, CA Tel: (415)

450 San Rafael Avenue Belvedere, CA 94920 Tel: (415) 435-3838 www.cityofbelvedere.org REQUEST FOR PROPOSALS: Professional Auditing Services ADDENDUM #1: QUESTIONS AND ANSWERS Addendum Issued: April 5,