Pismo Beach City Council
October 6, 2026

PISMO BEACH CITY COUNCIL STAFF REPORT
Agenda Item #9.F
Meeting Date: October 6, 2026

TITLE:

Agreement With Badawi & Associates to Provide Professional Financial Auditing Services for Fiscal Years 2028 Through 2030

RECOMMENDATION:

Adopt a Resolution authorizing the City Manager to enter into an agreement with Badawi & Associates to provide professional financial auditing services in the amount of $124,538 for the City of Pismo Beach for Fiscal Years 2028 through 2030.

EXECUTIVE SUMMARY:

The City of Pismo Beach hires a professional financial auditing firm to audit and prepare the City’s financial statements and assist staff with various accounting issues throughout the year. In accordance with Government Code 12410.6(b) it is best practice to rotate auditors every six years to maintain independence of the auditor and the client. The City is completing its fifth and final year of the agreement with the current financial auditing firm, and therefore staff went through a process to select a new auditing firm or new auditing partner this year. Staff released a Request for Proposals for professional financial auditing services and from that process has selected Badawi & Associates as the City’s financial auditors. Staff recommends that the Council adopt a Resolution (Attachment 1) to authorize the City Manager to enter into an agreement with Badawi & Associates to provide professional financial auditing services for the City of Pismo Beach for Fiscal Years (FY) 2028 through 2030.

Background
The City contracted with the auditing firm Badawi & Associates for financial auditing services from FY 2023 through FY 2027 (audit years FY 2022 through FY 2026). Badawi & Associates has performed well for the City in the five years that it has been the City’s financial auditor. With the efforts of City leadership including the City Council and key staff, the City has continued to receive the prestigious Government Finance Officers Association (GFOA) Award for Excellence in Financial Reporting.

Effective January 1, 2013, during FY 2014, Government Code Section 12410.6 (California Assembly Bill 1345) was enacted to limit a local agency from contracting with public accounting firm and audit partner having primary responsibility for more than six consecutive fiscal years. This Government Code requirement helps to maintain independence between the auditor and the client relationship. The City is under the six- year time frame by one year due to the current 5-year agreement. As such, the City is now selecting a new auditing firm and/or audit partner having primary responsibility and went through the Request for Proposal (RFP) process this year.

Request for Proposals Process
On July 23, 2026, staff released an RFP for professional financial auditing services and received nine proposals. Staff reviewed the proposals and selected Badawi & Associates, Council Agenda 10-6-2026 9.F-1

the same firm that the City currently works with, but with a different audit partner having primary responsibility. This complies with Government Code as there is a separate audit partner. The proposals were evaluated according to the specifications identified in the RFP. As a result of this evaluation process, a final selection was made to select the firm of Badawi & Associates with a separate audit partner. Badawi & Associates had the best technical proposal based on its direct experience and expertise, clear audit approach understanding the City’s scope of services, sound references, and provided the second lowest five-year cost proposal.

Badawi & Associates
The firm of Badawi & Associates is located in Berkeley, California. The firm specializes in government audits with 70—75% focused on municipal clients. Mr. Mitesh Desai, CPA, has performed financial and compliance nonprofit and governmental audits for 18 years.

The audit for the City will be conducted by the following full-time audit staff: 1 – Engagement Partner, 1 – Audit Manager, 1 – Audit Senior, and 2 – Professional Audit Staff members, 1 IT Specialist, and 1 – Engagement Quality Reviewer.

Badawi & Associates has numerous current and prior municipal clients, with the closest to Pismo Beach including the Cities of San Luis Obispo, Solvang, Guadalupe, Berkeley, Oakland, and San Mateo.

Conclusion and Recommendation
Staff recommends that the Council adopt a resolution (Attachment 1) to authorize the City Manager to enter into an agreement with Badawi & Associates to provide professional financial auditing services in the amount of $124,538 for the City of Pismo Beach for Fiscal Years (FY) 2028 through FY 2031.

FISCAL IMPACT:

The fiscal impact of adopting the attached resolution and entering into a contract with Badawi & Associates is an annual cost ranging from $40,292 to $42,746 for a total contract amount of $124,538 over the three-year term of the contract. This cost is allocated to the City’s General Fund, Local Transportation Fund, Lodging Business Improvement District Fund; and Water, Wastewater, and Parking Enterprise Funds.

The three-year contract amount is $970 greater than the first three years of the last agreement, and the first year of the agreement is $2,121 less than the current cost for FY 2027 (audit year FY 2026).

The proposed contract would be effective from July 1, 2027 through June 30, 2030, and includes the option to renew for two additional one-year terms through June 30, 2032.

This total contract amount includes the auditing services and services to prepare the State Controller’s reports. The annual costs by the fiscal year audited are listed in Table 1.

Council Agenda 10-6-2026 9.F-2

Table 1. Service Costs by Fiscal Year
Fiscal Year Audited Annual Cost
FY 2027 $40,292
FY 2028 41,500
FY 2029 42,746
Three-Year Total $124,538
FY 2030 (optional year)44,028
FY 2031 (optional year)45,350
The City’s General Fund, Local Transportation Fund, Lodging Business Improvement District Fund; and Water, Wastewater, and Parking Enterprise Funds include sufficient budget authority in FY 2027 to support the first year of the contract and future years would be recommended for inclusion in future year budgets.

Note that the cost of the audit occurs in the following fiscal year that is being audited. For example, the cost of the first-year audit occurs in FY 2028 while the audit being performed is for FY 2027.

ATTACHMENTS:

1. Resolution

2. Auditor Agreement
Submitted by: Nadia Feeser, Administrative Services Director City Manager Approval:

Council Agenda 10-6-2026 9.F-3

RESOLUTION NO. R-2026-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH,

CALIFORNIA AUTHORIZING THE CITY MANAGER TO ENTER INTO AN

AGREEMENT WITH BADAWI & ASSOCIATES TO PROVIDE PROFESSIONAL FINANCIAL AUDITING SERVICES IN THE AMOUNT OF $124,538 FOR FISCAL YEARS 2028 THROUGH 2030
WHEREAS, the City of Pismo Beach hires a professional financial auditing firm to audit and prepare the City’s financial statements and assist staff with various accounting issues throughout the year; and
WHEREAS, Government Code 12410.6(b) requires municipalities to rotate auditors every six years to maintain independence of the auditor and the client; and WHEREAS, staff released a Request for Proposals (RFP) for professional financial auditing services on July 23, 2026; and
WHEREAS, staff received and a committee reviewed and evaluated the proposals in accordance with the evaluation criteria outlined in the RFP; and WHEREAS, staff selected Badawi & Associates with a separate audit partner as the City’s new professional auditor based on the firm’s direct experience and expertise, clear audit approach understanding the City’s scope of services, sound references, and cost proposal; and
WHEREAS, the new contract will be effective from July 1, 2027 through June 30, 2030, for audit years Fiscal Year (FY) 2027, 2028, and 2029; and has options to renew for two additional one-year terms; and
WHEREAS, the City’s General Fund, Local Transportation Fund, Lodging Business Improvement District Fund; and Water, Wastewater, and Parking Enterprise Funds include sufficient budget authority in FY 2027 to support the first year of the contract.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Pismo Beach hereby authorizes the City Manager to enter into an agreement with Badawi & Associates, in substantially the form attached to staff’s report dated October 6, 2026, to provide professional auditing services for the total contract amount of $124,538 from July 1, 2027 to June 30, 2030, with options to renew for two additional one-year terms.

UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 6th day of October 2026, by the following vote:

Council Agenda 10-6-2026 9.F-4
Attachment 1

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSED:

Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Kirkwood, City Clerk
IN WITNESS WHEREOF, I have hereunto set my hand and official seal of the City of Pismo Beach on _______________________.
________________________
Erica Kirkwood, City Clerk
Council Agenda 10-6-2026 9.F-5
Attachment 1

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Vendor Agreement (Rev. 3/2024)

CITY OF PISMO BEACH

VENDOR AGREEMENT FOR PROFESSIONAL SERVICES
This Vendor Agreement for Professional Services (“AGREEMENT”) is made and entered into as of the date the AGREEMENT is fully executed by all parties (the “Effective Date”), by and between the City of Pismo Beach, a municipal corporation (“CITY”), and Badawi & Associates (“VENDOR”). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows:

RECITALS:

CITY wishes to retain the services of an experienced and qualified VENDOR to provide the following services:

Professional financial auditing services, single audit, Gann Limit, Transportation Development Act Compliance, State Controllers’ Office reporting
VENDOR represents and warrants that it is qualified to perform those services.

AGREEMENT:

I. SERVICES TO BE PERFORMED BY VENDOR
VENDOR will provide the services listed in the Scope of Services attached hereto as Exhibit A.

VENDOR warrants that all work and services set forth in the Scope of Services will be performed in a competent, professional and satisfactory manner. Extra work beyond that described in the Scope of Services is not authorized without the express written approval of CITY. VENDOR shall request and receive written approval prior to performing any extra work. Any work beyond that reflected in the approved Scope of Services shall not be compensated by CITY unless prior written approval was provided under this paragraph. To the extent that Exhibit A is a proposal from VENDOR, such proposal is incorporated only for the description of the Scope of Services and no other terms and conditions from any such proposal shall apply to this AGREEMENT unless specifically agreed to by CITY in writing.

II. TERM
Unless earlier terminated in accordance with Section IV below, or unless the Scope of Services are substantially completed, the AGREEMENT will continue in full force and effect from the Effective Date through June 30, 2030. Upon mutual written agreement, the term of this AGREEMENT can be extended annually under the same terms for an additional one (1) year period, up to two years, ending June 30, 2032.

III. COMPENSATION
A. VENDOR’s Fee
For services rendered pursuant to this AGREEMENT, VENDOR will be paid in accordance with the Compensation Schedule attached hereto as Exhibit B. However, in no event will the total amount of money paid VENDOR, for services initially contemplated by this AGREEMENT and associated expenses, exceed the sum of one hundred twenty-four thousand five hundred thirty-eight dollars ($124,538.00), unless otherwise first approved in writing by CITY. Should this AGREEMENT be extended pursuant to Section II, VENDOR’s fee may be 2 of 12
Vendor Agreement (Rev. 3/2024)
adjusted upon the written agreement of the parties, in the form of an amendment to this AGREEMENT.

B. Schedule of Payment
VENDOR will submit invoices monthly for actual services performed and associated expenses.

Invoices shall be submitted on or about the first business day of each month, or as soon thereafter as practical, for services provided in the previous month. Payment shall be made within thirty (30) days of receipt of each invoice as to all non-disputed fees. If CITY disputes any of VENDOR’s fees it shall give written notice to VENDOR within thirty (30) days of receipt of an invoice of any disputed fees set forth on the invoice. Any final payment under this AGREEMENT shall be made within forty-five (45) days of receipt of an invoice therefor.

IV. TERMINATION OF AGREEMENT
A. CITY may at any time, for any reason, with or without cause, suspend or terminate this AGREEMENT, or any portion hereof, by serving upon VENDOR at least ten (10) days' prior written notice. Upon receipt of said notice, VENDOR shall immediately cease all work under this AGREEMENT, unless the notice provides otherwise. If CITY suspends or terminates a portion of this AGREEMENT, such suspension or termination shall not make void or invalidate the remainder of this AGREEMENT.

B. In the event this AGREEMENT is terminated pursuant to this Section, CITY shall pay to VENDOR the actual value of the work performed up to the time of termination, provided that the work performed is of value to CITY. Upon termination of the AGREEMENT pursuant to this Section, VENDOR will submit an invoice to CITY pursuant to Section III.

V. FORCE MAJEURE
If any party fails to perform its obligations because of strikes, lockouts, labor disputes, embargoes, "acts of God," inability to obtain labor or materials or reasonable substitutes for labor or materials, governmental restrictions, governmental regulations, governmental control, judicial orders, enemy or hostile governmental action, civil commotion, fire or other casualty, or other causes beyond the reasonable control of the party obligated to perform, then that party’s performance shall be excused for a period equal to the period of such cause for failure to perform.

VI. RETENTION OF FUNDS
VENDOR authorizes CITY to deduct from any amount payable to VENDOR (whether or not arising out of this AGREEMENT) any amounts the payment of which may be in dispute or that are necessary to compensate CITY for any losses, costs, liabilities, or damages suffered by CITY, and all amounts for which CITY may be liable to third parties, by reason of VENDOR’s acts or omissions in performing or failing to perform VENDOR’s obligations under this AGREEMENT. In the event that any claim is made by a third party, the amount or validity of which is disputed by VENDOR, or any indebtedness exists that appears to be the basis for a claim of lien, CITY may withhold from any payment due, without liability for interest because of the withholding, an amount sufficient to cover the claim. The failure of CITY to exercise the right to deduct or to withhold will not, however, affect the obligations of VENDOR to insure, indemnify, and protect CITY as elsewhere provided in this AGREEMENT.

Attachment 2
Council Agenda 10-6-2026 9.F-6

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Vendor Agreement (Rev. 3/2024)
VII. CITY REPRESENTATIVE
The Administrative Services Director is designated as the “City Representative,” authorized to act on its behalf with respect to the work and services specified in this AGREEMENT and to make all decisions in connection with this AGREEMENT. Whenever approval, directions, or other actions are required by CITY under this AGREEMENT, those actions will be taken by CITY Representative, unless otherwise stated. CITY’s City Manager has the right to designate another CITY Representative at any time, by providing notice to VENDOR.

VIII. VENDOR REPRESENTATIVE(S)
The person(s) employed by VENDOR whose name(s) are set forth immediately following the signatures of the parties executing this AGREEMENT are designated as being the representative(s) of VENDOR authorized to act on its behalf with respect to the work specified in this AGREEMENT and make all decisions in connection with this AGREEMENT.

IX. INDEPENDENT CONTRACTOR
VENDOR is, and at all times will remain as to CITY, a wholly independent contractor. Neither CITY nor any of its elected officials, officers, employees or agents will have control over the conduct of VENDOR or any of VENDOR’s employees, except as otherwise set forth in this AGREEMENT and then only as to the results to be accomplished and not the method by which VENDOR provides the Scope of Services. VENDOR may not, at any time or in any manner, represent that it or any of its agents or employees are in any manner agents or employees of CITY.

X. BUSINESS LICENSE
VENDOR must obtain a CITY business license prior to the start of work under this AGREEMENT, unless VENDOR is qualified for an exemption.

XI. OTHER LICENSES AND PERMITS
VENDOR warrants that it has all professional, contracting and other permits and licenses required to undertake the work contemplated by this AGREEMENT.

XII. VENDOR’S ACCOUNTING RECORDS; OTHER PROJECT RECORDS A. VENDOR shall maintain complete and accurate records with respect to sales, costs, expenses, receipts, and other such information required by CITY that relate to the performance of services under this AGREEMENT. VENDOR shall maintain adequate records of services provided in sufficient detail to permit an evaluation of services.

B. All such records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. Except for VENDOR’s audit workpapers, VENDOR shall provide free access to the representatives of CITY or its designees at reasonable times to such books and records; shall give CITY the right to examine and audit said books and records; shall permit CITY to make transcripts or copies therefrom as necessary; and shall allow inspection of all work, data, documents, proceedings, and activities related to this AGREEMENT. Such records, together with supporting documents, shall be maintained for a period of three (3) years after receipt of final payment. Unless such property is proprietary in nature, upon completion of, or in the event of termination or suspension of this AGREEMENT, all original documents, designs, drawings, maps, models, 4 of 12
Vendor Agreement (Rev. 3/2024)
computer files, surveys, notes, and other documents prepared in the course of providing the services to be performed pursuant to this AGREEMENT shall become the sole property of CITY and may be used, reused, or otherwise disposed of by CITY without the permission of VENDOR. With respect to computer files, VENDOR shall make available to CITY, at VENDOR's office and upon reasonable written request by CITY, the necessary computer software and hardware for purposes of accessing, compiling, transferring, copying and/or printing computer files. VENDOR hereby grants to CITY all right, title, and interest, including any copyright, in and to the documents, designs, drawings, maps, models, computer files, surveys, notes, and other documents prepared by VENDOR in the course of providing the services under this AGREEMENT.

C. Unless such property is proprietary in nature and excluding VENDOR’s audit workpapers, all plans, studies, sketches, drawings, reports, and specifications as herein required are the property of CITY, whether the work for which they are made be executed or not. In the event this AGREEMENT is terminated, and at the end of the term of this AGREEMENT, all such plans, studies, sketches, drawings, electronic documentation, reports, and specifications shall be delivered immediately to CITY. VENDOR may retain one copy of each document for VENDOR’S records, but shall have no proprietary rights to them. CITY agrees to indemnify VENDOR against any damages caused by the unauthorized re-use of said documents.

XIII. INDEMNIFICATION
A. Non-design, non-construction Professional Services:

To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8), VENDOR shall indemnify, defend, and hold harmless CITY, and its elected officials, officers, employees, volunteers, and agents (“CITY Indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of VENDOR’s performance or VENDOR’s failure to perform its obligations under this AGREEMENT or out of the operations conducted by VENDOR, including CITY’s active or passive negligence, except for such loss or damage arising from the sole negligence or willful misconduct of CITY. In the event CITY Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from VENDOR’s performance of this AGREEMENT, VENDOR shall provide a defense to CITY Indemnitees or at CITY’s option, reimburse CITY Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims.

B. Non-design, construction Professional Services:

To the extent the Scope of Services involve a “construction contract” as that phrase is used in Civil Code Section 2783, this paragraph shall apply in place of paragraph A. To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8), VENDOR shall indemnify, defend, and hold harmless the CITY, and its elected officials, officers, employees, volunteers, and agents (“CITY Indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of VENDOR’s performance or VENDOR’s failure to perform its obligations under this AGREEMENT or out of the operations conducted by VENDOR, except for such loss or damage arising from the active negligence, sole negligence or willful misconduct of CITY. In the event CITY Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from VENDOR’s performance of this AGREEMENT, VENDOR shall provide a defense to CITY Indemnitees or at CITY’s option, reimburse CITY Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims.

Attachment 2
Council Agenda 10-6-2026 9.F-7

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Vendor Agreement (Rev. 3/2024)
C. Design Professional Services:

In the event VENDOR is a "design professional," and the Scope of Services require VENDOR to provide “design professional services” as those phrases are used in Civil Code Section 2782.8, this paragraph shall apply in place of paragraphs A or B. To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8) VENDOR shall indemnify, defend and hold harmless CITY and its elected officials, officers, employees, volunteers and agents (“City Indemnitees”), from and against all claims, damages, injuries, losses, and expenses including costs, attorney fees, expert consultant and expert witness fees arising out of, pertaining to or relating to, the negligence, recklessness or willful misconduct of VENDOR, except to the extent caused by the sole negligence, active negligence or willful misconduct of CITY. Negligence, recklessness or willful misconduct of any subcontractor employed by VENDOR shall be conclusively deemed to be the negligence, recklessness or willful misconduct of VENDOR unless adequately corrected by VENDOR. In the event CITY Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from VENDOR’s performance of this AGREEMENT, VENDOR shall provide a defense to CITY Indemnitees or at CITY’s option, reimburse CITY Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. In no event shall the cost to defend charged to VENDOR under this paragraph exceed VENDOR’s proportionate percentage of fault. However, notwithstanding the previous sentence, in the event one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, VENDOR shall meet and confer with other parties regarding unpaid defense costs.

D. Payment by CITY is not a condition precedent to enforcement of the indemnities in paragraph A, B, or C. In the event of any dispute between VENDOR and CITY, as to whether liability arises from the active negligence, sole negligence or willful misconduct of CITY or its officers, employees, or agents, VENDOR will be obligated to pay for CITY’s defense until such time as a final judgment has been entered adjudicating CITY as having been actively negligent, solely negligent or as having engaged in willful misconduct. Except as otherwise required by Civil Code Section 2782.8, VENDOR will not be entitled in the absence of such a determination to any reimbursement of defense costs including but not limited to attorney’s fees, expert fees and costs of litigation. The provisions of this Section 13 shall survive completion of VENDOR’s services or the termination of this AGREEMENT.

XIV. NON-LIABILITY OF CITY OFFICERS AND EMPLOYEES

No elected official, officer, employee, or agent of CITY will be personally liable to VENDOR, in the event of any default or breach by CITY or for any amount that may become due to VENDOR.

XV. INSURANCE

A. Without limiting VENDOR’s indemnification of CITY, and prior to commencement of the Scope of Services, VENDOR shall obtain, provide and maintain at its own expense during the term of this AGREEMENT, policies of insurance of the type and amounts described below and in a form that is satisfactory to CITY.

1. General liability insurance. VENDOR shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office (ISO) form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted.

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Vendor Agreement (Rev. 3/2024)

2. Automobile liability insurance. If VENDOR owns vehicles used in performing the Scope of Services in any manner, VENDOR shall maintain automobile insurance at least as broad as Insurance Services Office (ISO) form CA 00 01 covering bodily injury and property damage for all activities of VENDOR arising out of or in connection with any work to be performed under this AGREEMENT, including coverage for any owned, hired, non-owned or rented vehicles, in an amount not less than $1,000,000 combined single limit for each accident.

3. Workers’ compensation insurance. VENDOR shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $1,000,000), as required by law.

4. VENDOR shall submit to CITY, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of CITY, its officers, agents, employees, and volunteers.

5. Errors and Omissions/Professional Liability. VENDOR shall maintain a policy of professional liability insurance written on a claims-made basis in an amount not less than $1,000,000. VENDOR shall also procure and pay for appropriate tail coverage for a minimum of three years following completion of the Scope of Services to cover any errors or omissions occurring during the Term. In the alternative, VENDOR may elect to obtain equivalent coverage on an occurrence basis. CITY’s Risk Manager or City Attorney may waive the requirement of professional liability insurance if he/she determines that such a policy is not commercially available to VENDOR. If such a policy is commercially available, additional cost to VENDOR in obtaining such a policy shall not be a basis upon which the insurance requirement will be waived.

B. Other provisions or requirements:

1. Proof of insurance. VENDOR shall provide certificates of insurance to CITY as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers’ compensation. Insurance certificates and endorsements must be approved by CITY’s Risk Manager prior to commencement of performance.

Current certification of insurance shall be kept on file with CITY at all times during the term of this contract. CITY reserves the right to require complete, certified copies of all required insurance policies, including endorsements to such policies, at any time.

2. Duration of coverage. VENDOR shall procure and maintain for the duration of the AGREEMENT insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the work hereunder by VENDOR, its agents, representatives, employees, or subconsultants.

3. Primary/noncontributing. Coverage provided by VENDOR shall be primary and any insurance or self-insurance procured or maintained by CITY shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of CITY before CITY’s own insurance or self-insurance shall be called upon to protect it as a named insured.

4. CITY’s rights of enforcement. In the event any policy of insurance required under this AGREEMENT does not comply with these specifications or is canceled and not replaced, CITY has the right but not the duty to obtain the insurance it deems necessary and any premium paid by CITY will be promptly reimbursed by VENDOR or Attachment 2
Council Agenda 10-6-2026 9.F-8

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Vendor Agreement (Rev. 3/2024)
CITY will withhold amounts sufficient to pay premium from VENDOR payments. In the alternative, CITY may terminate this AGREEMENT as provided in paragraph IV.

5. Acceptable insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance or is on the List of Approved Surplus Line Insurers in the State of California, with an assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise approved by CITY’s Risk Manager.

6. Waiver of subrogation. All insurance coverage maintained or procured pursuant to this AGREEMENT shall be endorsed to waive subrogation against CITY, its elected or appointed officials, agents, officers, employees, and volunteers or shall specifically allow VENDOR or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. VENDOR hereby waives its own right of recovery against CITY, and shall require similar written express waivers and insurance clauses from each of its subconsultants.

7. Enforcement of contract provisions (non-estoppel). VENDOR acknowledges and agrees that any actual or alleged failure on the part of CITY to inform VENDOR of non- compliance with any requirement imposes no additional obligations on CITY nor does it waive any rights hereunder.

8. Requirements not limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance.

Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If VENDOR maintains higher limits than the minimums shown above, CITY requires and shall be entitled to coverage for the higher limits maintained by VENDOR. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to CITY.

9. Notice of cancellation. VENDOR agrees to oblige its insurance agent or broker and insurers to provide to CITY with a thirty (30) day notice of cancellation (except for nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for each required coverage. In the event VENDOR’s policy of insurance cannot be endorsed to provide this notice of cancellation, VENDOR shall provide CITY notice of such cancellation, in writing, not later than 24 hours following the effective time of such cancellation.

10. Additional insured status. General liability policies shall provide or be endorsed to provide that CITY and its officers, officials, employees, and agents shall be additional insureds under such policies. This provision shall also apply to any excess/umbrella liability policies. Each such insurance policy shall contain language substantially similar to the following clause:
"The City of Pismo Beach, its elected and appointed officials, officers, employees, and agents are named as additional insureds as respects operations of the named insured performed under contract with the City of Pismo Beach." CITY need not be named as an additional insured on professional liability insurance policies.

11. Prohibition of undisclosed coverage limitations. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement 8 of 12
Vendor Agreement (Rev. 3/2024)
of any kind that has not been first submitted to CITY and approved of in writing by CITY’s Risk Manager or City Attorney.

12. Separation of insureds. A severability of interests provision must apply for all additional insureds ensuring that VENDOR’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the insurer’s limits of liability. The policy(ies) shall not contain any cross-liability exclusions.

13. Pass-through clause. VENDOR agrees to ensure that its sub-consultants, sub- contractors, and any other party providing any work under the Scope of Services under the direction of VENDOR, provide the same minimum insurance coverage and endorsements required of VENDOR. VENDOR agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. VENDOR agrees that upon request, all AGREEMENTS with consultants, subcontractors, and others engaged in performing work under the Scope of Services will be submitted to CITY for review.

14. CITY’s right to revise specifications. CITY reserves the right at any time during the term of the contract to change the amounts and types of insurance required by giving VENDOR ninety (90) days' advance written notice of such change. If such change results in substantial additional cost to VENDOR, CITY and VENDOR may renegotiate VENDOR’s compensation.

15. Self-insured retentions. Any self-insured retentions must be declared to and approved by CITY. CITY reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these specifications unless approved by CITY.

16. Timely notice of claims. VENDOR shall give CITY prompt and timely notice of claims made or suits instituted that arise out of or result from VENDOR’s performance under this AGREEMENT, and that involve or may involve coverage under any of the required liability policies.

17. Additional insurance. VENDOR shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Scope of Services.

XVI. SUBCONTRACTORS
Before VENDOR retains or hires a subcontractor to provide any work, labor, or services relative to this AGREEMENT, VENDOR must:

A. Present the name and identifying information of the subcontractor that will provide any work, labor, or services to CITY;
B. Present to CITY the form of subcontract that will be used with the subcontractor for CITY’s approval, which approval will not be unreasonably withheld. Such subcontract agreement must include an indemnity agreement that is generally in accord with the indemnity obligations contained in paragraph XII of this AGREEMENT and must specifically name CITY as an indemnified party; and
C. Secure from the subcontractor evidence of insurance coverage that meets with this AGREEMENT including naming CITY as an additional insured as required by this AGREEMENT, unless such requirement is waived in writing by CITY's Risk Manager as provided in paragraph XXV below.

Attachment 2
Council Agenda 10-6-2026 9.F-9

9 of 12
Vendor Agreement (Rev. 3/2024)
XVII. CONFLICT OF INTEREST
No officer or employee of CITY may have any financial interest, direct or indirect, in this AGREEMENT, nor may any officer or employee participate in any decision relating to the AGREEMENT that affects the officer or employee’s financial interest or the financial interest of any corporation, partnership, or association in which the officer or employee is directly or indirectly interested, in violation of any law, rule or regulation.

No person may offer, give, or agree to give any officer or employee or former officer or employee, nor may any officer or employee solicit, demand, accept, or agree to accept from another person, a gratuity or an offer of employment in connection with any decision, approval, disapproval, recommendation, preparation or any part of a program requirement or a purchase request, influencing the content of any specification or procurement standard, rendering of advice, investigation, auditing, or in any other advisory capacity in any way pertaining to any program requirement, contract or subcontract, or to any solicitation or proposal.

XVIII. NOTICE
All notices, requests, demands, or other communications under this AGREEMENT will be in writing.

Notice will be sufficiently given for all purposes as follows:

A. Personal delivery. When personally delivered to the recipient; notice is effective on delivery.

B. First Class mail. When mailed first class to the last address of the recipient known to the party giving notice; notice is effective three mail delivery days after deposit in a United States Postal Service office or mailbox.

C. Certified mail. When mailed certified mail, return receipt requested; notice is effective on receipt, if delivery is confirmed by a return receipt.

D. Overnight delivery. When delivered by an overnight delivery service, charges prepaid or charged to the sender’s account; notice is effective on delivery, if delivery is confirmed by the delivery service.

E. Facsimile transmission. When sent by fax to the last fax number of the recipient known to the party giving notice; notice is effective on receipt. Any notice given by fax will be deemed received on the next business day if it is received after 5:00 p.m. (recipient’s time) or on a non- business day.

Addresses for purpose of giving notice are as set forth immediately following the signatures of the parties executing this AGREEMENT.

F. Any correctly addressed notice that is refused, unclaimed, or undeliverable because of an act or omission of the party to be notified, will be deemed effective as of the first date the notice was refused, unclaimed or deemed undeliverable by the postal authorities, messenger or overnight delivery service.

G. Either party may change its address or fax number by giving the other party notice of the change in any manner permitted by this AGREEMENT. Any change in address or fax number that is not provided to the other party will not void delivery of any notice under this AGREEMENT, and delivery to the last known address or fax number shall be deemed sufficient for notice under this AGREEMENT.
10 of 12
Vendor Agreement (Rev. 3/2024)
XIX. PROHIBITION AGAINST ASSIGNMENT AND SUBCONTRACTING
This AGREEMENT and all exhibits are binding on the heirs, successors, and assigns of the parties.

The AGREEMENT may not be assigned or subcontracted by either CITY or VENDOR without the prior written consent of the other.

XX. INTERPRETATION
The terms of this AGREEMENT shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this AGREEMENT or any other rule of construction that might otherwise apply.

XXI. SEVERABILITY
If any part of this AGREEMENT is found to be in conflict with applicable laws, that part will be inoperative, null and void insofar as it is in conflict with any applicable laws, but the remainder of the AGREEMENT will remain in full force and effect.

XXII. TIME OF ESSENCE
Time is of the essence in the performance of this AGREEMENT.

XXIII. GOVERNING LAW; JURISDICTION
This AGREEMENT will be administered and interpreted under the laws of the State of California.

Jurisdiction of and venue for any litigation arising from the AGREEMENT will be in the Superior Court of the San Luis Obispo County, or in the United States District Court for the Central District of California.

XXIV. COMPLIANCE WITH STATUTES AND REGULATIONS
VENDOR will be knowledgeable of and will comply with all applicable federal, state, county and city statutes, rules, regulations, ordinances and orders. VENDOR and its subcontractor(s) shall not discriminate against any person in the performance of this AGREEMENT on the basis of race, religion, national origin, color, age, sex, sexual orientation, AIDS, HIV status, disability, or any other basis protected by state or federal law, and shall comply with applicable federal and state equal employment opportunity laws, ordinances, rules and regulations.

XXV. WAIVER OF BREACH
No delay or omission in the exercise of any right or remedy by a nondefaulting party on any default will impair the right or remedy or be construed as a waiver. A party’s consent or approval of any act by the other party requiring the party’s consent or approval will not be deemed to waive or render unnecessary the other party’s consent to or approval of any subsequent act. Any waiver by either party of any default must be in writing and will not be a waiver of any other default concerning the same or any other provision of this AGREEMENT.

XXVI. ATTORNEY’S FEES
Except as provided for in paragraph XV, in any dispute, litigation, arbitration, or other proceeding by which one party either seeks to enforce its rights under this AGREEMENT (whether in contract, tort or Attachment 2
Council Agenda 10-6-2026 9.F-10

11 of 12
Vendor Agreement (Rev. 3/2024)
both) or seeks a declaration of any rights or obligations under this AGREEMENT, the prevailing party will be awarded reasonable attorney’s fees, together with any costs and expenses, to resolve the dispute and to enforce any judgment, including post judgment attorney’s fees costs and expenses and any attorneys’ fees or costs incurred on appeal of any judgment.

XXVII. EXHIBITS

All exhibits identified in this AGREEMENT are incorporated into the AGREEMENT by this reference.

In the event of any conflict between the terms of this AGREEMENT and the terms of an exhibit, the terms of this AGREEMENT shall control. Notwithstanding the foregoing sentence, the provisions of Section XIII of this AGREEMENT shall not be altered, amended, limited or otherwise affected in any manner by any language included in an exhibit to this AGREEMENT, even if such exhibit purports to affect the provisions of Section XIII.

XXVIII. VENDOR’S AUTHORITY TO EXECUTE

The persons executing this AGREEMENT on behalf of the VENDOR warrant that:

A. the VENDOR is duly organized and existing under the appropriate State laws; B. they are duly authorized to execute this AGREEMENT on behalf of the VENDOR; C. by so executing this AGREEMENT, the VENDOR is formally bound to the provisions of this AGREEMENT; and
D. entering into this AGREEMENT does not violate any provision of any other AGREEMENT to which the VENDOR is bound.

XXIX. INTEGRATION; AMENDMENT

This AGREEMENT represents the entire understanding of CITY and VENDOR as to those matters contained in it. No prior oral or written understanding will be of any force or effect with respect to the terms of this AGREEMENT. The AGREEMENT may not be modified or altered except in writing signed by both parties.

IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be executed the day and year last written below.

Signatures begin on next page.

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Vendor Agreement (Rev. 3/2024)
CITY:

City of Pismo Beach, a Municipal Corporation

Signed:

Name: Nadia Feeser
Title: Administrative Services Director

Dated: ________________________________

Signed:

Name: Jorge E. Garcia
Title: City Manager

Dated: ________________________________

Address for giving notice (See Section XVIII):
760 Mattie Road, Pismo Beach, CA 93449

ATTEST:

Signed:

Name: Erica Kirkwood
Title: City Clerk

APPROVED AS TO FORM:

Signed:

Name: Dean J. Pucci
Title: City Attorney
VENDOR:

Badawi & Associates

Signed:

Name: ________________________________
Title: _________________________________
Dated: ________________________________

Address for giving notice (See Section XVIII):
______________________________________
______________________________________

Email address for official communications:
______________________________________

Vendor Representative (See Section VIII):

Name/Title: ____________________________

Attachments:

Exhibit A: Scope of Service
Exhibit B: Compensation Schedule
Attachment 2
Council Agenda 10-6-2026 9.F-11

City of
Pismo Beach

TECHNICAL PROPOSAL
For Professional Auditing Services for
the City of Pismo Beach
For fiscal years ending June 30, 2027 through 2029,
with the option of extending the contract for up to two (2) additional one-year periods.

August 27, 2026
Contact Person:

Ahmed Badawi, CPA
Badawi & Associates
Certified Public Accountants
5901 Christie Avenue, Suite 307
Emeryville, CA 94608
Phone: (510) 768-8244
Fax: (510) 768-8249
E-mail: [email protected]
([KLELW$

Attachment 2
Council Agenda 10-6-2026 9.F-12

City of Pismo Beach
Table of Contents
Page
1 – Cover Letter and Executive Summary ................................................................................................................ 1 2 – Proposer’s Background & Qualifications ........................................................................................................... 5 Firm Qualifications .................................................................................................................................................... 7 License to Practice in California................................................................................................................................ 7 Firm Experience ........................................................................................................................................................ 8 Additional Activities ................................................................................................................................................... 8 Client Training Seminar ............................................................................................................................................ 9 GASB 68 Firm Developed Tools and Assistance ..................................................................................................... 9 Flowcharting Documentation .................................................................................................................................... 9 Quality Control Review ........................................................................................................................................... 10 Federal or State Desk Reviews .............................................................................................................................. 12 Disciplinary Action ................................................................................................................................................... 12 Litigations ................................................................................................................................................................ 12 Partner, Supervisory, and Staff Qualifications and Experiences ............................................................................ 13 Similar Engagements with Other Governmental Entities ........................................................................................ 21 3 – Comparable Current Clients and (Sample) References .................................................................................. 27 References .............................................................................................................................................................. 29 4 – Approach and Deliverables................................................................................................................................ 31 Objectives of Our Services ..................................................................................................................................... 33 Audit Approach ....................................................................................................................................................... 33 Technical Approach ................................................................................................................................................ 33 Understanding of Services to be Provided ............................................................................................................. 37 Audit Schedule ........................................................................................................................................................ 39 Use of Technology in the Audit ............................................................................................................................... 42 Discussion of Relevant Accounting Issues ............................................................................................................. 44 5 – Affirmation of Independence ............................................................................................................................. 45 Independence ......................................................................................................................................................... 47 6 – Guarantees and Warranties .............................................................................................................................. 49 Appendix A .............................................................................................................................................................. 51 7 – Affirmation of Minimum Insurance Requirement ........................................................................................... 53 Insurance ................................................................................................................................................................ 55 Conclusion................................................................................................................................................................. 56 Appendix – Exceptions to Contract 57

Attachment 2
Council Agenda 10-6-2026 9.F-13

1 - Cover Letter and
Executive Summary
1 This page intentionally left blank.
2 Attachment 2
Council Agenda 10-6-2026 9.F-14

August 27, 2026
Letter of Transmittal
Ms. Nadia Feeser
Administrative Services Director and City Treasurer
City of Pismo Beach
760 Mattie Road,
Pismo Beach, CA 93449
Dear Ms. Feeser:

Badawi & Associates (B&A), Certified Public Accountants (the “Firm”) is pleased to have the opportunity to respond to your request for a proposal to provide external audit services and to submit its qualifications to perform an independent audit of the financial statements of the City of Pismo Beach (the “City”) for the fiscal years ending June 30, 2027 through 2029, with the option of extending the contract for up to two (2) additional one-year periods. The objective of our audits is to issue opinions regarding the fairness of presentation of the financial position of the City in accordance with generally accepted accounting principles. These audits are to be performed in accordance with generally accepted auditing standards, the standards set forth for financial audits in the Government Accountability Office’s (GAO) Government Auditing Standards, the provisions of the federal Single Audit Act of 1984, as amended in 1996, and the Uniform Guidance, Audits of States, Local Governments and Non-Profit Organizations, Uniform Administrative Requirements, as well as any other applicable federal, state, local or programmatic audit requirements.

We will also perform the following as part of our engagement:
- Single Audit (if required)
- Gann Limit Agreed-upon Procedures
- Transportation Development Act (TDA) Audit
- State Controller’s Annual City Financial Transactions Report - State Controller’s Annual Street Report
We will also apply limited audit procedures to Management’s Discussion and Analysis (MD&A) and required supplementary information. In addition, we will prepare the management letter containing comments and recommendations regarding our review and evaluation of the systems of internal control and accounting procedures.

This proposal will highlight the background of the partners and staff assigned to the engagement, summarize our experience in the governmental area, and describe our approach to auditing the City.

This proposal demonstrates our ability to render the quality examination and to perform the necessary accounting and auditing services requested by the City on a timely basis.

As a partner of the Firm, I will be the primary contact for negotiation of the contract. Additionally, I have been authorized to legally bind the Firm. You may contact me at the following address and phone number:

Ahmed Badawi,CPA
Badawi & Associates
Certified Public Accountants
5901 Christie Avenue, Suite 307
Emeryville, CA 94608
Telephone: (510)768-8244
E-mail: [email protected]
3 Ms. Nadia Feeser
Administrative Services Director and City Treasurer
City of Pismo Beach

We are committed to performing the required work, completing the audit, and issuing the necessary auditors’ reports.

We believe we are the best qualified to perform the audit because our audit staff includes individuals well versed in municipal auditing and reporting requirements. We have performed auditing and consulting engagements for numerous cities throughout California. We will be responsive to the needs of the City, we understand the City’s operational environment, and pledge to you our complete commitment to providing a quality product that meets the City’s requirements.

The approach to the audit has been designed to meet the audit requirements of the City with the least disruption to the City’s office operations. The foundation of the audit approach is based on communication coupled with a strong knowledge of City operations and detailed planning at the initial stages of the audit. Open communication lines with all parties of the Engagement Team and City Management and staff throughout the engagement eliminate “surprises”.

Initial planning and proper assignment of duties to experienced personnel provide for an effective and efficient audit process. Consequently, inefficiencies and disruptions are kept to a minimum. In addition, we perform almost half of the audit tasks during the interim phase to minimize any unforeseen delays during the year-end phase and to ensure a smooth and timely audit process.

The Firm maintains liability insurance coverage for professional liability, Workers’ Compensation, Comprehensive General Liability and Auto as part of our comprehensive insurance policy.

The Firm is an Equal Opportunity employer and complies with all Federal and State hiring requirements. The Firm also supports Affirmative Action philosophies and works hard to provide disadvantaged groups with opportunities for self enhancement.

This proposal is a firm and irrevocable offer for 180 days.

We are confident that you will find our organization offers the required expertise, technical knowledge, and business understanding to perform an audit of the City. Our past experience provides us with a thorough understanding of the needs and requirements of the City, as well as the technical knowledge to perform such services in accordance with the accounting and auditing guidelines as published by the various authoritative entities.

We welcome your inquiries and look forward to further discussions with you.

Sincerely,
Ahmed Badawi
Partner
Badawi & Associates
Certified Public Accountants
4 Attachment 2
Council Agenda 10-6-2026 9.F-15

2 – Proposer’s Background &
Qualifications
5 This page intentionally left blank.
6 Attachment 2
Council Agenda 10-6-2026 9.F-16

City of Pismo Beach Technical Proposal

Firm Qualifications
Badawi & Associates was founded by Mr. Ahmed Badawi. Mr. Badawi has over 25 years of experience working with state and local government with a special focus on cities. Prior to founding B&A, Mr. Badawi was a partner with several local and national firms, where he headed their government practice in Northern California. Mr. Badawi founded Badawi & Associates to serve the fast-paced needs of California's local governments. The goal is to build a proactive, client-focused culture from the ground up and to eliminate the entrenched bureaucratic culture and intrinsic limitations of the big audit firms.

Located in Emeryville, CA, the Firm serves a variety of cities and towns throughout California as well as conducting financial related services for numerous special districts and authorities.

Names and phone numbers of several of our current and past clients and other references are provided for 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 Emeryville office will be the Engagement Office assigned to the City.

In addition to specific City financial statements, the Firm members have also audited numerous redevelopment agencies, public financing authorities, hospitals, housing authorities, transportation authorities, special districts, water districts, OCJP grants, self-insurance pools, joint power authorities and has also performed numerous compliance audits in accordance with the Single Audit Act, childcare regulations, TOT regulations, AQMD regulations, franchise requirements.

The Engagement Partner assigned to the City will be Mr. Mitesh Desai, CPA. Mr. Desai’s background includes eighteen years of experience in municipal auditing. Mr. Desai has participated in the audits of numerous governmental agencies, assisted in their efforts to publish their Annual Comprehensive Financial Reports in compliance with GASB 34, and a volunteer member of the GFOA Special Review Committee. Mr. Desai is responsible for conducting in- house trainings for staff auditors and is credentialed with the Advanced Single Audit Certificate offered by the AICPA.

The professional staffs assigned to the Engagement are qualified and experienced. Each individual of the Engagement Team has several years of experience and has conducted or participated in numerous municipal audits of various sizes. Their understanding of governmental operations and the various authoritative guidelines will provide the where-with-all to perform the audit in an efficient and effective manner with minimal disruption to the City’s finance department.

License to Practice in California
The Firm and all key professional staff assigned to the City’s audit are properly licensed to practice as Certified Public Accountants in the State of California and comply with GAO Government Auditing Standards.

The Firm is registered with the California State Board of Accountancy. Its State number is 6823.

The Firm has met all required State and local laws, rules, and regulations.

Firm
Qualifications
and
Experience
7 City of Pismo Beach Technical Proposal
Firm Experience
The Firm provides a full range of accounting services to governmental agencies throughout California, including audit, tax and accounting. The Firm’s professional staff members provide the financial background and specific experience to meet the City’s operational needs.

Additionally, this situation provides the City with an auditing firm that has depth in capabilities to address any financial issue the City may need assistance with, and the quality audit approach that you expect.

We are committed to providing appropriate and related experience, personal involvement, and a broad business perspective to produce a quality end product within the time frames required.

The Firm provides financial and compliance auditing services to governmental agencies throughout California. We are a governmental agency auditing firm and our professional staff members have been performing these services for many years. As a result, we have performed financial and compliance audits on most, if not all, types of governmental agencies and operations including:
x Cities
x Redevelopment
Agencies
x Financing
Authorities
x Housing Authorities
x Special Districts
x Water Districts
x Waste Management
Authorities and
Operations
x Pension Plans
x Child Care
Operations
x Joint Power
Authorities
x Investment Activities
x Landfills
x Enterprise Funds
x Airports
x Transportation
Operations
x Federal and State
Grants
Additional Activities
We offer a full range of accounting and finance services to the governmental sector. These services include:
x Financial audits
x Compliance audits
x Tax advice
x Development of financial and
accounting policies and procedures
x Investment review and compliance
evaluation
x Operational reviews
x Technical guidance on existing and
upcoming accounting issues
x Training seminars
x Pension/profit-sharing plans
x Performance audits
x Business consulting
Consequently, Firm personnel are well qualified to perform the services expected by the City. 8 Attachment 2
Council Agenda 10-6-2026 9.F-17

City of Pismo Beach Technical Proposal

Client Training Seminar
The Firm hosts an annual update on recent technical accounting and finance issues affecting the governmental area. This all-day session reviews new and anticipated pronouncements from GASB, discusses future issues under consideration by GASB, reviews accounting treatment of various transactions where issues may arise, and provides a general overview of state and federal compliance issues. All of our clients are invited to attend, free of charge. The one-day session qualifies for CPE under the rules of the State Board of Accountancy and is held in the Bay Area.

GASB 68 Firm Developed Tools and Assistance
The Firm has developed tools to assist our clients with preparation of GASB 68 journal entries for the CalPERS’ Cost Sharing Plans (for which individualized actuarial valuations are no longer prepared) and the CalPERS’ Agent Multiple Employer Plans. In addition to providing our clients with these tools and instructions on how to use them, we are available to answer any questions on how to prepare and complete the GASB 68 journal entries.

Flowcharting Documentation
As part of our risk assessment procedures, we prepare flowcharts for documenting our understanding of the City’s significant accounting and financial processes. Flowcharts are updated annually for any changes in the City’s processes and copies can be provided upon request for the City’s internal use. Flowcharted processes may include:
x Financial Reporting, Closing, and Manual Journal Entries x Cash Receipts, Billing, and Accounts Receivable/Revenues x Cash Disbursements, Purchasing, and Accounts Payable/Expenditures x Payroll and Human Resources
Quality Control Review
According to Government Auditing Standards, firms who perform audits under the Yellow Book are required to have a peer review once every three years. We received a report with a rating of pass with no deficiencies which we attached for your review. 9 City of Pismo Beach Technical Proposal

10 Attachment 2
Council Agenda 10-6-2026 9.F-18

City of Pismo Beach Technical Proposal
11 City of Pismo Beach Technical Proposal
The Firm has policies and procedures to ensure it hires only qualified people, that it properly supervises them and provides professional training, that it advances them to responsibilities they are capable of handling, and that it provides them with necessary technical resources. All members of the Firm are very familiar with the stringent quality control standards established by the AICPA.

The Firm is a member of the AICPA Government Audit Quality Center.

The Firm is a member of the AICPA Private Companies Practice Section.

Federal or State Desk Reviews
The Firm has had no negative federal or state reviews in the past three (3) years.

Disciplinary Action
There has not been any state or federal disciplinary actions taken or pending against the Firm nor any findings to report.

Litigations
The Firm has not experienced any lawsuits or legal actions that have been resolved or are currently pending in the prior five years.
12 Attachment 2
Council Agenda 10-6-2026 9.F-19

City of Pismo Beach Technical Proposal

The Engagement Team will normally consist of seven individuals who provide a broad business perspective and significant experience in governmental auditing. This team will provide access to a wide range of technical capabilities which will provide the City with not only the technical support necessary to perform the audit, but also the broad business background to interpret findings and observations to offer effective solutions to issues, and the personal involvement of the Engagement and Compliance Partners of the Firm.

The Engagement Team will be led by Mitesh Desai, CPA. Mr. Desai’s background includes eighteen years of experience in municipal auditing. Mr. Desai has participated in the audits of numerous governmental agencies, assisted in their efforts to publish their Annual Comprehensive Financial Reports in compliance with GASB 34, and a volunteer member of the GFOA Special Review Committee. Mr. Desai is responsible for conducting in-house trainings for staff auditors and is credentialed with the Advanced Single Audit Certificate offered by the AICPA. His diversified background offers the technical qualities required of the governmental and non-profit areas and the necessary wherewithal to properly evaluate the entire accounting process, develop opportunities to improve the accounting process, and to offer practical business recommendations.

The second member of the Engagement Team will be Samantha “Samo” Michel, CPA. Ms.

Michel’s background includes seven years of accounting and auditing experience. She has participated in the audits of numerous governmental entities and assisted in their efforts to publish their financial statements in compliance with various regulations. Ms. Michel will be the Audit Manager of this engagement.

The third member of the Engagement Team will be Everly Feng. Ms. Feng’s background includes four years of accounting and auditing experience. She has participated in the audits of numerous governmental entities and assisted in their efforts to publish their financial statements in compliance with various regulations. Ms. Feng will be the Audit Senior of this engagement.

Engagement Partner

Mitesh Desai
CPA

Audit Manager

Samantha “Samo”
Michel
CPA
Engagement Quality
Reviewer

Ahmed Badawi
CPA

Audit Senior

Everly Feng



Professional
Audit Staff


Professional
Audit Staff
IT Specialist

Omar Rahman,

CPA, CISA
Partner,
Supervisory,
and Staff
Qualifications
and
Experiences
13 City of Pismo Beach Technical Proposal

The fourth member of the Engagement Team will be Omar Rahman, CPA, CISA. Mr. Rahman has over ten years of experience in the field of Information Technology (IT) audit and risk management at the senior and executive management level. He has worked extensively with government agencies, private organizations, and public companies, providing external and internal audit services in support of financial statement audits. Mr. Rahman will serve as the I.T.

Specialist of this engagement.

The fifth member of the Engagement Team will be Ahmed Badawi, CPA. Mr. Badawi’s background includes over twenty-five years of municipal auditing experience with a special focus on cities. Mr. Badawi is a member of the Government Accounting and Auditing Committee of the California Society of Certified Public Accountants. He has participated in the audits of numerous City, county and special district governments, as well as non-profit entities. He will serve as the Engagement Quality Reviewer.

Each member of the Engagement Team participates in continuing education programs offered by the AICPA and California State Society of Certified Public Accountants, and each has met the continuing education requirements for municipalities. In addition, the firm offers at least 60 hours of in-house CPE annually focused mainly on municipal audits.

Professional Development:

The Firm maintains a comprehensive training program targeted at appropriate professional staff levels. It utilizes in-house developed educational programs, AICPA and California CPA Foundation educational programs, and on-the-job training.

The Firm’s annual training schedule which officially begins in April for all professional staff and administrative staff includes comprehensive in-house training sessions on such topics as:
x Review of principles of accounting and financial reporting for state and local governments x Review of governmental fund types and account groups
x Review of newly issued generally accepted auditing standards and GAO auditing standards
x Review of Internal Control evaluation approaches including COSO principles x Updates on recent governmental accounting and reporting guidelines x Review of Single Audit requirements and approaches
x Review of financial audit approaches
x Overview of audit and internal control work paper techniques x Review of GASB reporting requirements
x Review of current issues facing the governmental community During the year, professional staff members are sent to various educational sessions sponsored by the AICPA and California State Society of CPAs, as considered appropriate for the level and need of the individual. These classes include, among others:
x Governmental Financial Reporting Standards and Practices x Yellow Book: Government Auditing Standards
x Financial Accounting Standards: Comprehensive Review
x Single Audit
x Governmental Auditing & Accounting Update
x Governmental Accounting Principles
x Comprehensive Review of Generally Accepted Auditing Standards The result of the Firm’s training program is the production of a highly educated and competent municipal audit group capable of performing an efficient and effective audit for the City.

The Engagement Team members will continue their professional development efforts. 14 Attachment 2
Council Agenda 10-6-2026 9.F-20

City of Pismo Beach Technical Proposal

Staff Retention and Continuity:

The Firm's policy on providing service to our clients includes a commitment to maintaining continuity of audit personnel. We cannot guarantee that our staff will remain with the Firm.

However, to encourage our staff to remain with us, we pay competitive wage rates; offer promotional opportunities; provide state-of-the-art equipment and excellent working conditions; and offer various benefits, such as retirement plans, medical plans, profit sharing programs, educational benefits, and other such benefits. We can also guarantee that the partner will be involved in future years. Continuity of audit staff is of prime concern to us and because of the hands-on involvement of the partner; we can assure you that future years’ audits will be conducted in an efficient and effective manner with qualified and experienced professionals.

The Firm is an Equal Opportunity employer and complies with all Federal and State hiring requirements. The Firm also supports Affirmative Action philosophies and works hard to provide disadvantaged groups with opportunities for self enhancement.

Resumes of each member of the Engagement Team follow.
15 City of Pismo Beach Technical Proposal

Mitesh Desai, Certified Public Accountant – Engagement Partner Length of Career
x Eighteen years of experience in municipal auditing with a special focus on cities x Certified Public Accountant for the State of California Professional Experience
x Has performed numerous financial audits, Single Audits, RDA audits, PFA audits, Transportation Development Act audits, and housing audits

Education
x BS Degree in Business Economics with an emphasis in Accounting from University of California, Santa Barbara
Professional Activities
x Member, American Institute of Certified Public Accountants x Member, California Society of Certified Public Accountants x Volunteer Member, GFOA Special Review Committee
Continuing Education
x Various municipal accounting courses offered by the California Society of CPAs and local universities including:
- Governmental Financial Reporting Standards and Practices - Yellow Book: Government Auditing Standards
- Municipal Accounting
- Single Audit
x Has met the current CPE educational requirements to perform audits on governmental agencies Financial Single RDA PFA Enterprise
Audit Audit Audit Audit Fund Other
Cities:

Albany X
Antioch X X X
Azusa X X X X
Berkeley X X X X X
Buena Park X X X X
Calimesa X X X
Crescent City X X X X X
Dablin X X X
East Palo Alto X X X X
El Cerrito X X X X X
Foster City X X X X X
Fremont X X X X X
Lemon Grove X X
Lindsay X X X
Menlo Park X X X
Millbraie X X X X
Newark X X X X
Oakdale X X X X
Pittsburg X X X X X
Placerville X X X X
Rio Vista X X X X
San Mateo X X X X X
Sebastopul X X X X
Solvang X X
Susanville X
Turlock X X X
Union City X X X
Vacaville X X X X X
Waterford X X X X
Yountville X X X
Yuba City X X X X
Child Care Programs:

Menlo Park Child Care X X
Stanislaus County Childcare X X
Non-profits:

Housing Endowment and Regional Trust X
Special Districts and Other:

Castro Valley Sanitary District X
Cosumnes Community Services District X
Marin Municipal Water District X
West County Wastewater District X X
X X
Services Provided
Contra Costa Child Development Programs
16 Attachment 2
Council Agenda 10-6-2026 9.F-21

City of Pismo Beach Technical Proposal

Samantha “Samo” Michel, Certified Public Accountant – Professional Audit Manager Length of Career
x Seven years of experience in municipal auditing
x Three seasons of experience in personal tax preparation x Certified Public Accountant for the State of California Professional Experience
x Has participated in several financial audits, Single Audits, RDA audits, PFA audits, Transportation Development audits, and housing audits

Education
x BS, University of Washington, Seattle, WA
x Accounting, Foothill College, Los Altos Hills, CA
Professional Activities
x Member, California Society of Certified Public Accountants x Member, Forensic Services Section, California Society of Certified Public Accountants Continuing Education
x Various municipal accounting courses offered by the California Society of CPAs and local universities including:
- Governmental Financial Reporting Standards and Practices - Yellow Book: Government Auditing Standards
- Municipal Accounting
- Single Audit
x Has met the current CPE educational requirements to perform audits on governmental agencies

Services Provided
Financial
Audit
Single
Audit
TDA
Audit
SCO
Report
PFA
Audit Other
Cities/Towns:

Antioch x x x x x
Barstow x x
Berkeley x x x x
Buena Park x x x x
Crescent City x x x
East Palo Alto x x x
Folsom x x x
Guadalupe x x x
Lathrop x x x x
Los Gatos x
Menlo Park x x x
Millbrae x x x
Pacifica x x x x x
Pismo Beach x x x
San Bruno x x x x x
San Carlos x x x x x
San Luis Obispo x x x x
San Mateo x x x x
Sausalito x x x
Union City x x x x x
Vacaville x x x x
Waterford x x
Yuba City x x x x
Counties:

Contra Costa County x
Special Districts and Other:

Amador County Transporation Commission x x
Amador Transit x x
Central County Fire District x
Elk Grove Water District x
Hayward Area Recreation District x x
Port of San Luis Harbor x
StopWaste x x
17 City of Pismo Beach Technical Proposal

Everly Feng – Professional Assurance Senior
Length of Career
x Four years of experience in municipal auditing
Professional Experience
x Has participated in several financial audits, Single Audits, RDA audits, PFA audits, Enterprise Fund and housing audits

Education
x BS Degree in Accounting from San Francisco State University Continuing Education
x Various municipal accounting courses offered by the California Society of CPAs and local universities including:
- Governmental Financial Reporting Standards and Practices - Yellow Book: Government Auditing Standards
- Municipal Accounting
- Single Audit
x Has met the current CPE educational requirements to perform audits on governmental agencies

Services Provided
Financial
Audit
Single
Audit
RDA
Audit
PFA
Audit
Enterprise
Fund Other
Cities/Towns:

Cotati x x
Dublin x x x x
Folsom x x x x
Lafayette x x
Lathrop x x
Lemon Grove x x
Los Altos x x
Mountain View x x x
Ontario x x x x x
Richmond x x x x
San Bruno x x
Sausalito x x
Victorville x x x x
Counties:

Contra Costa County x x
Special Districts and Other:

Hayward Area Recreation District x
Richmond Housing Authority x x
Ross Valley Fire Department x
Sacramento Metropolitan Fire District x x
Union Sanitary District x x x
18 Attachment 2
Council Agenda 10-6-2026 9.F-22

City of Pismo Beach Technical Proposal
Omar Rahman, Certified Public Accountant, Certified Information System Auditor – Information Technology Specialist
Length of Career
x Over ten years of experience auditing information technology (IT) processes and controls x Certified Public Accountant for the State of California x Certified Information System Auditor
Areas of Expertise
x IT risk consulting and audit services for governmental entities, private/public companies, nonprofits, and professional service organizations
x External and internal IT audit services in support of financial statement audits x Technical guidance/support on IT risks and controls in relation to SOX 404a and SOX 404b compliance, NIST 800-53/171a, Cyber Security Framework, HIPAA Technical Safeguards, CCPA/GDPR compliance, COBIT 2019 Framework
x Managed entire life cycle of IT internal and external audit engagements from planning research, audit program development, fieldwork and reporting
x Assess risks related to IT processes/assets and corresponding applications/tools x IT control testing over business automated controls, general IT controls, and cyber security controls as well as IT substantive testing over information systems.

Partial list of governmental clients served:
- City of Berkeley
- City of Chino
- City of Dinuba
- City of Dublin
- City of Healdsburg
- City of Jurupa Valley
- City of Lathrop
- City of Laverne
- City of Lemon Grove
- City of Ontario
- City of Mountain View
- City of Pomona
- City of Richmond
- City of San Carlos
- City of Sausalito
- City of San Luis Obispo
- City of Foster City
- City of Victorville
- Sacramento Metropolitan Fire District
- Sacramento Employment and Training Agency
- Union Sanitary District
Presentations
x November 2017 - Institute of Internal Auditors - General IT Controls for Internal Audit x December 2018 - Institute of Internal Auditors - SDLC Process and Audit/Risk Considerations x February 2019 - IT Audit for Business Process Professionals x May 2019 - IT Internal Audit Emerging Technologies: Data Analytics x September 2019 - Information Systems Audit and Control Association Education
x B.S. Degree in Economics, University of California, Los Angeles, CA.

Professional Activities
x Certified Public Accountant - California
x Certified Public Accountant - Ohio
x Certified Information System Auditor
19 City of Pismo Beach Technical Proposal
Ahmed Badawi, Certified Public Accountant – Engagement Quality Reviewer Length of Career
x Over twenty-five years of experience in municipal auditing and accounting with a special focus on cities
x Certified Public Accountant for the State of California Professional Experience
x Partial listing of clients served:
x Has performed numerous financial audits, Single Audits, Transportation Development Act audits, housing audits, electrical utility audits, RDA audits, PFA audits, and Trust Fund audits, and has prepared numerous Annual Comprehensive Financial Reports Education
x BS Degree in Accounting from the University of Alexandria, Egypt Professional Activities
x Member, CALCPA Government Accounting and Auditing Committee x Member, American Institute of Certified Public Accountants x Member, California Society of Certified Public Accountants x Member, Government Finance Officers Association
x Member, California Society of Municipal Finance Officers Continuing Education
x Has met the current CPE educational requirements to perform audits on governmental agencies Services Provided
Financial
Audit
Single
Audit
TDA
Audit
RDA
Audit
Enterprise
Fund Other
Cities/Towns:

Antioch x x x x x x
Atwater x x x x
Azusa x x x x x
Berkeley x x x x x x
Chino x x x x
Compton x
Crescent City x x x x x
Dinuba x x x x x
Dublin x x x x
Folsom x x x x x
Foster City x x x x x
Glendora x x x x x
Guadalupe x x x x x
Healdsburg x x x x x
La Verne x x x x
Lafayette x x x x
Larkspur x x x x
Lathrop x x x x
Lemon Grove x x x x
Millbrae x x x x x
Mountain View x x x x
Ontario x x x x x
Petaluma x x x x x x
Pomona x x x x x
Richmond x x x x x x
San Bruno x x x x x
San Carlos x x x x x x
San Luis Obispo x x x x
Sausalito x x x x
Scotts Valley x x x x x
Wasco x x x x x x
Counties:

Contra Costa County x x x x x
Santa Cruz County x x x x x
Special Districts and Other:

Alameda County Water District x x x
East Bay Regional Park District x x x
20 Attachment 2
Council Agenda 10-6-2026 9.F-23

City of Pismo Beach Technical Proposal
The tables below and on the following page are a partial listing of our clients similar to the City, and illustrates the many different types of components involved in each audit engagement that present very difficult and complex auditing and accounting challenges (in order of audit hours). ** Indicates cities with population over 50,000
** Indicates cities with governmental revenues over $100 million and population over 50,000 Ci
t
y
Cl
i
e
n
t

S
i
n
c
e
H
o
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r
s

En
g
a
g
e
m
e
n
t

P
a
r
t
n
e
r
Principal Contact
An
n
u
a
l

C
o
m
p
r
e
h
e
n
s
i
v
e

Fin
a
n
c
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a
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R
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p
o
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GF
O
A

A
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a
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RD
A
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s
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A
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Sin
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A
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d
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TD
A
Wa
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r

F
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d
Se
w
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r

F
u
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d
SC
O

R
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p
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Ho
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s
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A
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o
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y
En
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p
r
i
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F
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d
s
Pe
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s
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T
r
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s
t

F
u
n
d
** Richmond 2020 2,338 Ahmed
Badawi
Jerry Chak
Accounting Manager
(510) 620-6569
[email protected]

X X X X X X X X X
** Berkeley 2008 1,505 Mitesh
Desai
Henry Oyekanmi
Finance Director
(510) 981-7300
[email protected]

X X X X X X X X
** Victorville 2024 950 Ahmed
Badawi
Carmen Cun
Finance Director/City Treasurer
(760) 955-3170
[email protected]

X X X X X X
San Carlos 2023 865 Ahmed
Badawi
Paul Harris
Financial Services Manager
(650) 802-4217
[email protected]

X X X X X X X X
** Folsom 2019 786 Mitesh
Desai
Stacey Tamagni
Finance Director
(916) 461-6712
[email protected]

X X X X X X X
** Pomona 2023 756 Ahmed
Badawi
Andrew Mowbray
Finance Director/City Treasurer
(909) 620-2353
[email protected]

X X X X X X X X
**Mountain
View 2024 741 Ahmed
Badawi
Derek Rampone
Finance & Administrative Services
Director
(650) 903-6316
[email protected]

X X X X X X X X
* Petaluma 2019 691 Mitesh
Desai
Corey Garberolio
Assistant Finance Director
(707) 778-4357
[email protected]

X X X X X X X X X
La Verne 2023 691 Ahmed
Badawi
Christy Lopez
Finance Director
(909) 596-8752
[email protected]

X X X X X
Pittsburg 2024 683 Ahmed
Badawi
Elena Adair
Finance Director
(925) 252-4848
[email protected]

X X X X X X X X X X
*San Luis
Obispo 2019 638 Mitesh
Desai
Emily Jackson
Finance Director
(805) 781-7125
[email protected]

X X X X X X
Similar
Engagements
with Other
Governmental
Entities
21 City of Pismo Beach Technical Proposal
Ci
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P
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Principal Contact
An
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C
o
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p
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h
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Fin
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R
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GF
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A
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A
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Sin
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A
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TD
A
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F
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Se
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F
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SC
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A
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En
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p
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e

F
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Pe
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s
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n

T
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t

F
u
n
d
Chino 2023 621 Ahmed
Badawi
Kim Sao
Director of Finance/City Treasurer
(909) 334-3354
[email protected]

X X X X X X
Lafayette 2020 586 Mitesh
Desai
Tim Przybyla
Finance Manager
(925) 299-3213
[email protected]

X X X X X
Lathrop 2023 585 Ahmed
Badawi
Cari James
Finance Director
(209) 941-7320
[email protected]

X X X X X X X
Sausalito 2023 559 Ahmed
Badawi
Angeline Loeffler
Finance Director
(415) 289-4150
[email protected]
X X X
Pacifica 2024 559 Ahmed
Badawi
Lucy Xie
Deputy Finance Director
(650) 738-7392
[email protected]

X X X X X
Dinuba 2023 556 Ahmed
Badawi
Karina Solis
Administrative Services Director
(559) 591-5900
[email protected]

X X X X X X X X
Millbrae 2015 550 Mitesh
Desai
Mike Sung
Finance Director
(650) 259-2433
[email protected]

X X X X X X X
** Dublin 2018 546 Mitesh
Desai
Jay Baksa
Finance Director
(925) 833-6648
[email protected]

X X X X X
Azusa 2017 540 Mitesh
Desai
Talika Johnson
Administrative Services Director
(626) 812-5202
[email protected]

X X X X X X X
Foster City 2023 540 Ahmed
Badawi
Waqas Hassan
Assistant Finance Director
(650) 286-3204
[email protected]

X X X X X X X
Jurupa Valley 2023 498 Ahmed
Badawi
Susan Paragas
Finance Director
(951) 332-6464
[email protected]
X X
Glendora 2022 487 Ahmed
Badawi
Kyle Johnson
Finance Director
(626) 914-8245
[email protected]

X X X X X X X X
San Bruno 2022 486 Ahmed
Badawi
Nick Pegueros
Chief Financial Officer
(650) 616-7054
[email protected]

X X X X X X X X
22 Attachment 2
Council Agenda 10-6-2026 9.F-24

City of Pismo Beach Technical Proposal
Ci
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Cl
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S
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H
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En
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P
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Principal Contact
An
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C
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h
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Fin
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A
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A
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A
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F
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Se
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F
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R
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A
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h
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En
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p
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F
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Pe
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T
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F
u
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d
Healdsburg 2023 452 Ahmed
Badawi
Katie Edgar
Finance Director
(707) 431-3184
[email protected]

X X X X X X
* Yuba City 2017 450 Mitesh
Desai
Diona Pope
Finance Director
(530) 822-4615
[email protected]

X X X X X X X X
Larkspur 2019 437 Mitesh
Desai
Emilia Gabriele
Administrative Services Director
(415) 927-5016
[email protected]
X X X
Wasco 2021 428 Ahmed
Badawi
Rocio Mosqueda
Accounting Manager
(661) 758-7234
[email protected]

X X X X X X X
Piedmont 2024 400 Ahmed
Badawi
Kiran Bawa
Finance Director
(510) 420-3045
[email protected]
X X X
Pismo Beach 2022 389 Ahmed
Badawi
Vanessa Garris
Finance Manager
(805) 773-7085
[email protected]

X X X X X X
Atwater 2021 380 Ahmed
Badawi
Anna Nicholas
Finance Director
(209) 357-6310
[email protected]

X X X X X X
Orinda 2024 378 Ahmed
Badawi
Douglas Alessio
Assist. City Manager/Admin. Serv. Dir.
(925) 253-4220
[email protected]

X X X X X
Lemon Grove 2022 377 Ahmed
Badawi
Stacey Tang
Finance Director
(619) 825-3803
[email protected]

X X X X
Scotts Valley 2019 311 Mitesh
Desai
Stephanie Hill
Administrative Services Director
(831) 440-5614
[email protected]

X X X X X
Waterford 2018 311 Mitesh
Desai
Tina Envia
Finance Manager
(209) 874-2328 Ext: 104
[email protected]

X X X X
Solvang 2019 308 Mitesh
Desai
Wendy Berry
Administrative Services Director
(805) 688-5575 x 205
[email protected]

X X X X X X X
Guadalupe 2017 303 Mitesh
Desai
Janice Davis
Finance Director
(805) 356-3895
[email protected]

X X X X X
23 City of Pismo Beach Technical Proposal
Ci
t
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Cli
e
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t

S
i
n
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e
H
o
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s

En
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P
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n
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r
Principal Contact
An
n
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l

C
o
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p
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e
h
e
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s
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e

Fin
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c
i
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R
e
p
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t
GF
O
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A
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RD
A
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s
s
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A
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y
Sin
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e

A
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TD
A
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F
u
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Se
w
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r

F
u
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d
SC
O

R
e
p
o
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Ho
u
s
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g

A
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h
o
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i
t
y
En
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p
r
i
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F
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Pe
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T
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F
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Crescent City 2014 227 Ahmed
Badawi
Linda Leaver
Finance Director
(707) 464-7483 x224
[email protected]

X X X X X X
24 Attachment 2
Council Agenda 10-6-2026 9.F-25

City of Pismo Beach Technical Proposal
The table below is a partial listing of special district engagements (in order of audit hours):

Special District
Cl
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t

S
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s
En
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Pa
r
t
n
e
r
Principal Contact
An
n
u
a
l

C
o
m
p
r
e
h
e
n
s
i
v
e

Fin
a
n
c
i
a
l

R
e
p
o
r
t
GF
O
A

A
w
a
r
d
Sin
g
l
e

A
u
d
i
t
En
t
e
r
p
r
i
s
e

F
u
n
d
s
Sacramento
Metropolitan Fire District 2023 519 Ahmed
Badawi
Ronald Empedrad
Controller
(916) 859-4510
[email protected]
Yes Yes X
County of Contra Costa
Community Services
Bureau Child
Development Program
2013 505 Mitesh
Desai
Alexandra Heinitz
Department Fiscal Officer
(925) 608-4948
[email protected]
No N/A
El Dorado Irrigation
District 2024 403 Ahmed
Badawi
Penny Buchman
Finance Director
(530) 642-4139
[email protected]
Yes Yes X X
Union Sanitary District 2023 362 Ahmed
Badawi
Mark Carlson, CPA
CFO/Business Services Manager
(510) 477-7510
[email protected]
Yes Yes X
Florin Resource
Conservation District/
Elk Grove Water District
2015 350 Ahmed
Badawi
Patrick Lee
Finance Manager / Treasurer
(916) 685-3556
[email protected]
Yes Yes X
Hayward Area
Recreation
and Park District
2017 350 Mitesh
Desai
Rekha Nayar
Finance Director
(510) 881-6707
[email protected]
Yes N/A X
San Ramon Valley Fire
Protection District 2021 285 Ahmed
Badawi
Davina Hatfield
Chief Financial Officer
(925) 838-6668
[email protected]
Yes Yes X
Alameda County Waste
Management Authority
(StopWaste)
2018 212 Mitesh
Desai
Jennifer Luong
Finance Services Manager
(510) 891-6500
[email protected]
Yes Yes
Ross Valley Fire
Department 2021 190 Ahmed
Badawi
Jeff Zuba
Finance & Admin. Services Director
(262) 989-2208
[email protected]
No N/A
Southern Marin Fire
Protection District 2020 160 Ahmed
Badawi
Karen Scalabrini
(707) 217-8646
[email protected]
No N/A
Central County Fire
Department 2012 150 Mitesh
Des ai
Jan Cooke
Finance Director
(650) 375-7408
[email protected]
Yes Yes
Central Fire Protection
District of
Santa Cruz County
2018 150 Mitesh
Desai
Nancy Dannhauser
Finance Director
(831) 479-6842
[email protected]
No N/A
Victorville Valley Water
District 2024 129 Ahmed
Badawi
Carmen Cun
Finance Director/City Treasurer
(760) 955-3170
[email protected]
No N/A X
Marin Wildfire Prevention
Authority 2021 106 Ahmed
Badawi
Karen Scalabrini
(707) 217-8646
[email protected]
No N/A
25 This page intentionally left blank.
26 Attachment 2
Council Agenda 10-6-2026 9.F-26

3 – Comparable Current Clients
and (Sample) References
27 This page intentionally left blank.

28 Attachment 2
Council Agenda 10-6-2026 9.F-27

City of Pismo Beach Technical Proposal
References
1) City of Victorville
x Scope of Work: Annual Comprehensive Financial Report, Single Audit, SAS 114, Victorville Water District, Southern California Logistics Airport Authority x Engagement Partner: Ahmed Badawi
x Address: 14343 Civic Drive, Victorville, CA 92393
x Principal Contact:

Ms. Carmen Cun, Finance Director/City Treasurer
(760) 955-3170
[email protected]
2) City of San Carlos
x Scope of Work: Annual Comprehensive Financial Report, SAS 114, Gann Limit, Measure A, Measure M, Measure W, C/CAG Audit, C/CAG Single Audit, State Controller’s Report
x Engagement Partner: Ahmed Badawi
x Address: 600 Elm Street, San Carlos, CA 94070
x Principal Contact:

Mr. Paul Harris, Financial Services Manager
(650) 802-4217
[email protected]
3) City of Lafayette
x Scope of Work: Annual Comprehensive Financial Report, Single Audit, SAS 114, Gann Limit, TDA, Lamorinda Fee and Finance Authority Report, Lamorinda School Bus Transportation Agency Report, State Controller’s Report x Engagement Partner: Ahmed Badawi (2020 – 2025), Mitesh Desai (2026 – Present) x Address: 3675 Mount Diablo Blvd., #210, Lafayette, CA 94549 x Principal Contact:

Mr. Tim Przybyla, Finance Manager
(925) 299-3213
[email protected]
4) City of Mountain View
x Scope of Work: Annual Comprehensive Financial Report, Single Audit, SAS 114, Shoreline Regional Park Community Audit, Transportation Development Act Audit, Gann Limit
x Engagement Partner: Ahmed Badawi
x Address: 500 Castro Street, Mountain View, CA 94039
x Principal Contact:

Mr. Derek Rampone, Finance and Administrative Services Director (650) 903-6316
[email protected]
5) City of San Luis Obispo
x Scope of Work: Annual Comprehensive Financial Report, Single Audit, SAS 114, Gann Limit, TDA, Whale Rock Commission Audit
x Engagement Partner: Ahmed Badawi (2019 – 2024), Mitesh Desai (2025 – Present) x Address: 990 Palm Street, San Luis Obispo, CA 93401
x Principal Contact:

Ms. Emily Jackson, Finance Director
(805) 781-7125
[email protected]
29 This page intentionally left blank.
30 Attachment 2
Council Agenda 10-6-2026 9.F-28

4 – Approach and Deliverables
31 This page intentionally left blank.

32 Attachment 2
Council Agenda 10-6-2026 9.F-29

City of Pismo Beach Technical Proposal
Objectives of Our Services
The basic objective of our audit of the City is to conduct an examination of the financial statements in accordance with generally accepted auditing standards and to express our opinion on the fairness of presentation of such financial statements in conformity with generally accepted accounting principles.

Additionally, we believe that another real value of our audit lies in meeting other objectives at no additional cost. The following are other objectives of our services that have important benefits to the City:
x To offer substantive observations and recommendations relating to accounting and operating control policies and procedures.
x To identify opportunities for operating efficiencies and isolate candidate activities for cost reduction opportunities.
x To perform a professional audit in an efficient and effective way to minimize disruption to the office operations.
x To offer ongoing advisory services to assist in the running of the operation and implementation of improved operating procedures.

The engagement will be conducted within the framework of the Firm's quality control program which includes the use of audit programs, careful planning, use of computerized audit software and internal control evaluation and documentation software, and objective review procedures.

On-site staff will use Firm supplied portable computers and printers.

Audit Approach
The specific audit approach has been designed to efficiently and effectively address the audit requirements of the City, to perform the audit of the City’s financial records in a timely manner with minimal disruptions to office operations, and to meet the City’s timeline.

The audit will be conducted in accordance with:
1) Generally accepted auditing standards established by the AICPA. 2) The standards contained in Government Auditing Standards issued by the GAO. 3) Provisions of the Single Audit Act and the Uniform Guidance. 4) Requirements issued by the California State Controller’s office. 5) Other requirements as required.

We will conduct the necessary audit steps to perform:
x Planning of the engagement
x Evaluation of the existing internal control environment to determine degree of risk of material misstatement
x Determination of degree of compliance with laws, regulations, grant provisions, and City approved policies
x Assessment of potential fraudulent issues
x Validation of account balances
x Verification of reasonableness of management estimates Technical Approach
We use an industry specific audit approach tailored to governmental entities. Our governmental audit approach addresses the special risks and circumstances of local governments. As a result, the audit is conducted efficiently and effectively with minimal disruption to your staff.

Specific Audit
Approach
33 City of Pismo Beach Technical Proposal
The core of our governmental technical audit approach can be summarized as follows:

1. Planning, Understanding and Communication:

Based on our previous audit experience, using the budget, organizational charts, manuals and other financial information systems and our knowledge of how governments work, we will obtain an insight to the specific concerns and sensitivities of the City. Our understanding is updated continuously through our year-round contact and communication efforts. We will agree on common audit objectives and expectations with management before audit work begins and, throughout the audit, will meet regularly with management to discuss audit issues and to gather feedback.

2. In-Depth Review of Systems and Controls:

We have developed diagnostic reviews which enable us to evaluate your systems and controls, and to provide management with constructive feedback. Combined with our knowledge of the City and understanding and experience with the City’s accounting software, our control review will form the basis of our audit risk assessment. We will utilize the COSO approach in our evaluation of the City’s internal processes to identify potential control deficiencies. In future years, we will update our understanding through similar procedures.

3. Risk-Based Customized Testing Program:

Our audit approach is tailored to governmental applications. We will use audit programs specifically designed to address the operational environment of governmental entities. Our approach will identify potential control risks and the opportunities for risk of material misstatements and fraud. We will evaluate the various risk assessments and identify the potential risks relating to the:
x Balance Sheets / Statement of Net Position
x Statement of Revenues and Expenditures / Statement of Activities x Presentation
x Disclosure
Our audit procedures will then be developed to address these risk areas.

4. Expanded Interim Fieldwork:

Timeliness and audit efficiency is enhanced by performing extensive interim work. Partners, managers and senior staff work with City staff to identify and resolve potential audit issues early. Accordingly, the amount of audit work to perform at year end is minimized. Because our audit staff is familiar with the operations before year-end fieldwork begins, disruption of accounting staff is minimized.

5. Smooth Transition:

Our testing program focuses on audit risks identified by our understanding of the City’s operations. We will work with the accounting staff to identify the most effective ways to address our objectives. Communication between the members of the audit engagement team and City staff will be fluid and continuous.

6. Sample Size and Sampling Techniques:

Our audit approach will include sampling 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 knowledge of the particular situation. Our sample size will range normally from 25 to 60 items. 34 Attachment 2
Council Agenda 10-6-2026 9.F-30

City of Pismo Beach Technical Proposal

7. Automated Systems:

We will evaluate controls over the IT functions to assess control risk. We intend to test controls for purposes of reliance. Our review procedures will evaluate controls over:
x Security Management
x Logical and Physical Access
x Configuration Management
x Segregation of Duties
x Contingency Planning
In addition, we will review controls over:
x Input, processing, output, master data
x Application interface
x Data management system interface
Our information Technology Specialists will evaluate the IT operating control environment.

8. Analytical Procedures:

We use analytical procedures in several aspects of our audit. Extensive knowledge and industry background are required for effective analytics, and our staff possesses the appropriate experience and knowledge for the City to benefit from these procedures.

9. Approach to be Taken in Determining Laws and Regulations Subject to Audit Test Work:

We continuously refer to specific regulations, compliance supplements, state guidelines and contracts currently in force. We perform the procedures required related to laws and regulations, using inquiries, observations and sampling techniques. Some of the laws and regulations that we believe may be applicable to the City are the requirements of the California Public Utilities Commission, Single Audit Act and other applicable laws and regulations, including the California Government Code, provisions of applicable Grant guidelines, California Constitution Gann Limit requirements, requirements of local measures, Child Care Program compliance requirements, etc.

10. Report Format:

We will meet with City Management to review report formats. Any report format changes will be made in conjunction with approval from City Management.

11. Work Plans:

The detailed work plans will be designed to efficiently and effectively address the audit requirements of the City in accordance with generally accepted auditing standards, to perform the audit of the City’s financial records in a timely manner with minimal disruptions to office operations, and to meet the City’s timeline.

12. Adjusting Journal Entries:

We will discuss and explain proposed audit adjusting entries with the City’s designated Finance Department personnel prior to recording. Audit adjusting entries will be provided in a format showing the lowest level of posting detail needed for data entry on the City’s general ledger system.

35 City of Pismo Beach Technical Proposal

13. Listing of Schedules and Tables (anticipated to be prepared by the City):

Based on preliminary inquiries made with management and City staff and review of documents, we will tailor a list of schedules, tables, and other reconciliations required for the audit. We will take into account as much as possible reconciliations already prepared by the City for day-to-day operations and reporting, as well as any reports that are system generated to limit the need for additional City staff hours.

The following is a listing of some of the significant reconciliations and schedules that we would normally expect the City to provide to us in assisting us in conducting our fieldwork. x Trial Balance
x Annual Comprehensive Financial
Report Account Roll Up Schedules
x Budget to Actual Reports
x Bank Reconciliations
x Listing of manually prepared journal
entries posted
x Summary of Investments held by the
City
x Capital Asset Schedules
x Long-Term Debt Schedules
x Debt Amortization Schedules and
Calculations of Deferred Amounts
x Calculations of any debt covenants
amounts or percentages
x Schedule of Leases
x Analysis of Deferred Outflows of
Resources and Deferred Inflows of
Resources
x Reconciliation of Receivables to
Subsidiary Ledgers
x Calculations for Estimate of Allowance
for Uncollectible Accounts
x Loans Receivable Schedules
x Reconciliation of Significant Revenue
Accounts
x Utility Billing Registers and Fee
schedules
x Compensated Absences Schedules
and Copies of Related Policies
x Claims Payable Schedules
x Pension and OPEB Roll-Forward and
Supporting Schedules
x GASB 54 Fund Balance Roll Forward
Schedule
x Interfund Transaction Schedules
36 Attachment 2
Council Agenda 10-6-2026 9.F-31

City of Pismo Beach Technical Proposal

The City desires an audit of the financial records for the City and an expression of an opinion in accordance with generally accepted accounting principles on the fairness of presentation of financial statements for the fiscal years ending June 30, 2027 through 2029, with the option of extending the contract for up to two (2) additional one-year periods.

The Firm will:
x Express an opinion on the fair presentation of its basic financial statements which includes but is not limited to the financial statements of governmental activities, the business-type activities, each major fund and all aggregate remaining fund information in conformity with generally accepted accounting principles in the United States of America. x Express an "in-relation-to" opinion on the fair presentation of its combining and individual non-major and fiduciary fund financial statements and schedules in conformity with generally accepted accounting principles.
x The Firm will provide an “in-relation-to” report on the supporting schedules contained in the Annual Comprehensive Financial Report based on the auditing procedures applied during the audit of the basic financial statements and schedules. x Provide an “in-relation-to” report on the schedule of expenditures of federal awards based on the auditing procedures applied during the audit of the financial statements. x Perform the audit in accordance with generally accepted auditing standards accepted in the United States of America, applicable to the financial audit contained in the Government Auditing Standards issued by the Comptroller General of the United States and the provisions of the Uniform Guidance, Audits of States, Local Governments and Non-Profit Organizations.
x Perform limited procedures on supplementary information required by the Government Accounting Standards Board.
x Issue the following reports, following the completion of the audit of the fiscal year’s financial statements:
¾ Independent Auditor’s Report on Financial Statements and Schedule of Expenditure of Federal Awards
¾ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
¾ Independent Auditor’s Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance with the Uniform Guidance
¾ Schedule of Findings and Questioned Costs
¾ Auditor’s Communication with Those Charged with Governance ¾ Transportation Development Act (TDA) Audit
¾ Gann Limit Agreed-upon Procedures
¾ State Controller’s Annual City Financial Transactions Report ¾ State Controller’s Annual Street Report
x Provide special assistance to the City as needed.
x Retain all working papers and reports at the audit firm’s expense for a minimum of 7 years.

In addition, make working papers available to the City and/or any government agency as appropriate.

Should any conditions be discovered requiring corrective action, the Firm will provide a detailed description of the findings and recommended actions as to their resolution.

Understanding of
Services to be
Provided
37 City of Pismo Beach Technical Proposal

The Firm will submit a report to the City’s Council and management detailing auditor’s responsibility under generally accepted auditing standards, significant accounting policies, management judgments and accounting statements, significant audit adjustments, other information in documents containing audited financial statements, disagreements with management, management consultations with other accountants, major issues discussed with management prior to retention, difficulties encountered during the audit, and any significant deficiencies or material weaknesses found during the audit. Non-material instances of noncompliance will be reported in a separate management letter, if appropriate, along with any other observations or recommendations determined to be informative to City Management.

The Firm will be available to provide advice and counsel regarding significant matters during the year.

The Firm’s Partner and Staff welcome the opportunity to make presentations to the City Council and will be ready to respond to questions from the Council and citizens of the City. 38 Attachment 2
Council Agenda 10-6-2026 9.F-32

City of Pismo Beach Technical Proposal
2027
Period Audit Tasks
June - Planning and Administration
f The entrance conference shall be held with City staff. The purpose of this meeting will be to discuss prior audits and the interim work to be performed. This meeting will also be used to establish overall liaison for the audits and to make arrangements for workspace and other needs
f Review and evaluate the City's accounting and financial reporting.

Prepare an overall memo of recommendations, potential issues, and suggestions for improvements
f Prepare overall memo to the City confirming audit procedures, timing, and assistance
f Prepare detailed audit work plan and audit programs, audit budget and staffing schedule, and list of schedules to be prepared by the City staff
f Send the PBC List to the City that will include all request items considered to be necessary for the audit
July - Internal Control Evaluation
f Meeting with City Manager and Department Heads of other departments with large operating budgets or which have significant federal grant expenditures
f Attending City Council meetings
f Meeting with off-site locations
f Meeting with key Finance Department personnel
f Obtain and document understanding of key internal control systems through walk-throughs, interviews of staff, and review of supporting documentation
o General ledger system
o Budgeting system
o Revenue, utility billing, accounts receivable, and cash collections
o Purchasing, expenditures, accounts payable, and cash
disbursements
o Payroll
o Federal Financial Assistance
o Other systems
f Identify control risks
f Evaluate IT control environment
f Perform testing of the internal control system and evaluate the effectiveness of the City’s systems. Select large dollar and random samples of transactions in key operating systems. Sample size to meet required level for determined degree of risk. Review supporting documentation of selected transactions, evaluate adequacy of support and approvals, and conclude on degree of adherence to accuracy and compliance with City policies f Conduct fraud assessment procedures
f Assess degree of risk for material misstatement
f Provide to the City’s management a memo concerning
management letter points and identify issues, if any
Audit
Schedule
39 City of Pismo Beach Technical Proposal
2027
Period Audit Tasks
July - Other Tasks
f Review minutes of City Council meetings and other key committees f Perform preliminary substantive procedures, which would include tests of:
o Vendor and contractor payments
o Payroll expense
o Utility billing
o Pension and OPEB testing
o Capital asset acquisitions
o Journal entries
o Retrospective review of accounting estimates
f Financial statement database management and other setup, in addition to drafting of all necessary report templates
f Preliminary Single Audit and other compliance testing f Coordinate with City staff and prepare of all appropriate confirmation requests including:
o Bank accounts
o Investment pool accounts
o Accounts receivable
o Federal grants
o Revenue from governmental agencies
o Bond and other debts
o Pension plan
o Attorney letters
o Others, as required
f Update the PBC List with any additional requests that will be needed for the City's audit
f Provide the City with audit plan and list of year-end audit schedules f Hold progress conference with City Management
f Hold exit conference with City Management
October -
November
- Final Fieldwork
f Entrance conference with City Management
f Follow-up on all outstanding confirmations
f Verify and validate account balances by reviewing supporting documentation including invoices, vouchers, council resolutions, minutes, and other documents, as required
f Perform analytical review of revenue and expenditures. Determine reason for material differences between budget and actual f Perform a search for unrecorded liabilities by reviewing disbursements subsequent to June 30, testing terms of contractual obligations, and interviewing City staff
f Perform review of subsequent events by discussions with City Management and update all minutes of City Council and key committees
40 Attachment 2
Council Agenda 10-6-2026 9.F-33

City of Pismo Beach Technical Proposal

2027
Period

Audit Tasks

- Single Audit Compliance
f Entrance conference with City Management
f Obtain Federal Financial Assistance Schedule
f Determine grants to be considered as major programs including clusters
f Perform audit tests of major grant programs and compliance with Federal Law and Regulations
f Review grant documents, select sufficient number of transactions to test for compliance of Federal Requirements
f Coordinate Single Audit efforts with the Financial Audit efforts f Communicate findings to City Management
f Other Compliance

November -
December

- Audit Reports
f Complete drafts of City’s Annual Comprehensive Financial Report f Prepare draft of Single Audit Reports concerning internal control structure, compliance with laws and regulations, and administering of federal financial assistance programs
f Prepare other reports as required
f Provide revised final drafts of all required reports to the City for approval

December

- Final City Audit Reports, Financial Statements, Single Audit Reports, and other reports delivered
- Audit Presentation to Council (if requested)

January 2028

- State Controller’s Reports delivered and submitted
- Single Audit Report package submitted to Federal Audit Clearinghouse

Note: the proposed audit schedule above can be adjusted as necessary based on the needs of the City.

Estimated Hours by Audit Phase

Position Planning
Interim
Fieldwork
Year End
Fieldwork Reporting Total
Partner 7 17 12 3 39 Audit Manager 6 26 27 4 63 Audit Senior 12 45 48 6 111 Professional Audit Staff - 75 69 8 152 IT Specialist - 5 - - 5 Administrative Assistant 4 7 - 8 19 Total 29 175 156 29 389 41 City of Pismo Beach Technical Proposal

The Firm maintains a variety of specialized software packages during the audit that enable us to perform an efficient, thorough, and timely audit and keeping time demands on City staff to a minimum.

Trial Balance Management and Financial Statement Preparation CCH Axcess Engagement allows us to import and manage multiple years of trial balance data including budgetary information, create multiple account groupings, generate reports, post journal entries proposed during the audit (including GASB 34 conversion entries), and link information directly to the financial statements. This gives us the ability to:
¾ Generate immediate trend and other comparative analysis of trial balance and budget data prior to the start of the audit. This allows us to identify potential issues and make inquiries early in the audit
¾ Link the financial statements and footnotes prior to the start of the audit allowing us to have majority of the financial statements (including budgetary comparison schedules and other supplementary information) prepared at the time the trial balance is uploaded ¾ Audit adjustments or City adjustments provided during the audit are automatically reflected in the financial statements
Audit Request Management and Document Exchange
Teamwork Project Management (“Teamwork”) is a secure, cloud-based collaboration platform that our Firm now uses to manage the “Prepared by Client (PBC) List” that streamlines the process of requesting, receiving, and keeping track of documents. Teamwork helps to facilitate the engagement through seamless collaboration between the Firm and our clients. By utilizing Teamwork, the City can do all of the following in one secure virtual environment:
¾ Attach files of any type to document requests
¾ Easily track the status of document requests
¾ Access templates and documents from us that require completion ¾ Have multiple City staff get involved and assist in the audit process ¾ Participate in a dialog for questions and notes
We have found that the use of the PBC List in Teamwork has helped our clients be always informed as to the status of their audit, and not be surprised with new requests or follow up on outstanding requests previously provided.

Audit Reporting Phase Management
Teamwork is also used by our Firm to manage the reporting phase of the audit, including timeline, key milestones, draft reviews, and final deliverables. With Teamwork, the entire reporting process and related communications are organized within one centralized project space. Using Teamwork, the City can:
¾ View the reporting timeline and track upcoming due dates and milestones ¾ Easily see which items are pending, under review, or completed. ¾ Access and review draft versions of reports in a single location ¾ Receive notifications when new drafts or updated versions are uploaded ¾ Participate in proof and review workflows for report approvals prior to final issuance.

We have found that managing the reporting phase of the audit using Teamwork has helped our clients always be informed as to the status of their reports and deliverables.

Use of
Technology
in the Audit
42 Attachment 2
Council Agenda 10-6-2026 9.F-34

City of Pismo Beach Technical Proposal
Computer Aided Audit Tools (CAATs)
The Firm’s data analytics software enables our Engagement Team to perform more than 150 Computer Aided Audit Tools (or “CAATs”). CCH Teammate Analytics gives us the ability to perform advanced data analysis and increase efficiency. By utilizing this software, we can:
¾Immediately visualize and analyze 100% of account populations with graphs, charts and statistics to identify anomalies
¾Make fewer sample selections that are targeted to problematic areas ¾Quickly analyze transactional data for:
o Duplicate records
o Missing transactions
o Transaction sequence
o Unusual items
¾Compare excel worksheets for changes or differences
¾Generate immediate testing samples
¾Perform regression analysis
¾Filter and extract data from City reports
Audit Planning, Risk Assessment, and Audit Programs
Our firm utilizes CCH Knowledge Coach, which is an expert system that adapts and customizes our audit approach specifically based on the City’s structure, operating environment, specific transactions, and identified risks or matters to be addressed in the audit. The software is frequently updated for new industry trends and audit requirements. Included in the software is a continuous diagnosis of audit forms that identifies missing information, procedures, or any conflicts that need to be addressed prior to issuance of the audit report. We have found that this audit tool greatly benefits our audit clients in the following ways:
¾Removal of standardized audit steps and procedures that do not add value to the audit ¾Targeted audit procedures focusing on risks and accounts specific to the City’s operations
¾Audit is always performed in accordance with audit standards especially the risk assessment standards
¾Maximizing audit efficiency having less City staff time dedicated to gathering information or responding to inquiries by focusing on material issues ¾Automatic self-diagnostics ensure no audit steps are missed, guaranteeing a quality audit
Research Tools
We maintain multiple research software packages that are always kept up to date to ensure compliance with accounting and auditing standards and are also a resources for us to provide guidance to our clients. In addition to accounting and audit literature, we have access to interactive disclosure checklists that include sample footnote disclosures and financial statements.
43 City of Pismo Beach Technical Proposal
Identification of Anticipated Potential Audit Problems
We do not anticipate that there will be any audit problems at the City. However, the following are some areas that we will carefully investigate and monitor during our audit procedures:
x Financial Reporting:
¾Review and evaluate that the City’s Annual Comprehensive Financial Report is in compliance with current reporting and disclosures requirements issued by the GASB and GFOA.
¾Review the Annual Comprehensive Financial Report for financial reporting conformance awards issued by CSMFO and GFOA.
¾Review and evaluate degree of compliance with the various GASBs in effect. ¾Review degree of compliance with infrastructure obligations and regulatory provisions. x Internal Control Structure:
¾Review and evaluate the City’s internal control functions and ascertain compliance with proper internal control philosophies.
¾Review computer system processes and controls and evaluate adequacy of the control environment.

Several new GASB pronouncements will become effective over the time period of this proposal.

As such, specific attention will be provided to determine the proper implementation of these new pronouncements. A list of known new pronouncements with implementation dates that fall within this proposal period are as follows:
2027
x Statement 105 – Subsequent Events
Discussion of
Relevant
Accounting
Issues
44 Attachment 2
Council Agenda 10-6-2026 9.F-35

5 – Affirmation of Independence

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46 Attachment 2
Council Agenda 10-6-2026 9.F-36

City of Pismo Beach Technical Proposal

Independence
The Firm is independent of the City of Pismo Beach as defined by the GAO’s Standards for Audit of Governmental Organizations, Programs, Activities and Functions, and the AICPA and California State Society of Certified Public Accountants as promulgated in various auditing and professional standards.
47 This page intentionally left blank.

48 Attachment 2
Council Agenda 10-6-2026 9.F-37

6 – Guarantees and Warranties

49 This page intentionally left blank.
50 Attachment 2
Council Agenda 10-6-2026 9.F-38

City of Pismo Beach Technical Proposal
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52 Attachment 2
Council Agenda 10-6-2026 9.F-39

7 – Affirmation of Minimum
Insurance Requirement
53 This page intentionally left blank.
54 Attachment 2
Council Agenda 10-6-2026 9.F-40

City of Pismo Beach Technical Proposal

Insurance
In accordance with the City’s request for proposals, we affirm that we will meet the minimum insurance requirements. We have included a copy of our current insurance certificate as proof of insurance below. 55 City of Pismo Beach Technical Proposal
A client relationship with the City will be of great value to our Firm and we welcome the opportunity to develop a long-term relationship with the City. We are committed to:
x Rendering the highest standard of service
x Developing a long-term working relationship dedicated to meeting the needs of the City x Assisting the City in operational issues
x Producing a quality end-product
We have the technical qualifications and experience to provide the level of service desired and expected by the City and stand ready to provide our knowledge and experience for the benefit of your organization.

We would like to express our appreciation to the City and to its Staff for allowing us the opportunity to submit a proposal to perform professional auditing services. We are available, at your convenience, to discuss any aspects of our proposal.

Thank you for allowing us to present our Firm to you.
** * * * * * * * * * * * * * * *
Conclusion
56 Attachment 2
Council Agenda 10-6-2026 9.F-41

City of Pismo Beach Technical Proposal
With regards to the sample contract (RFP Appendix B) we would like to modify the below paragraphs as follows:

XII. VENDOR’S ACCOUNTING RECORDS; OTHER PROEJCT RECORDS B. All such records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. Except for VENDOR’s audit workpapers, VENDOR shall provide free access to the representatives of CITY or its designees at reasonable times to such books and records; shall give CITY the right to examine and audit said books and records; shall permit CITY to make transcripts or copies therefrom as necessary; and shall allow inspection of all work, data, documents, proceedings, and activities related to this AGREEMENT. Such records, together with supporting documents, shall be maintained for a period of three (3) years after receipt of final payment. Unless such property is proprietary in nature, upon completion of, or in the event of termination or suspension of this AGREEMENT, all original documents, designs, drawings, maps, models, computer files, surveys, notes, and other documents prepared in the course of providing the services to be performed pursuant to this AGREEMENT shall become the sole property of CITY and may be used, reused, or otherwise disposed of by CITY without the permission of VENDOR. With respect to computer files, VENDOR shall make available to CITY, at VENDOR's office and upon reasonable written request by CITY, the necessary computer software and hardware for purposes of accessing, compiling, transferring, copying and/or printing computer files. VENDOR hereby grants to CITY all right, title, and interest, including any copyright, in and to the documents, designs, drawings, maps, models, computer files, surveys, notes, and other documents prepared by VENDOR in the course of providing the services under this AGREEMENT.

C.Unless such property is proprietary in nature and excluding VENDOR’s audit workpapers, all plans, studies, sketches, drawings, reports, and specifications as herein required are the property of CITY, whether the work for which they are made be executed or not. In the event this AGREEMENT is terminated, and at the end of the term of this AGREEMENT, all such plans, studies, sketches, drawings, electronic documentation, reports, and specifications shall be delivered immediately to CITY. VENDOR may retain one copy of each document for VENDOR’S records, but shall have no proprietary rights to them. CITY agrees to indemnify VENDOR against any damages caused by the unauthorized re-use of said documents.

Appendix –
Exceptions to
Contract
57 City of
Pismo Beach

SEALED DOLLAR COST BID PROPOSAL
For Professional Auditing Services for
the City of Pismo Beach
For fiscal years ending June 30, 2027 through 2029,
with the option of extending the contract for up to two (2) additional one-year periods.

August 27, 2026
Contact Person:

Ahmed Badawi, CPA
Badawi & Associates
Certified Public Accountants
5901 Christie Avenue, Suite 307
Emeryville, CA 94608
Phone: (510) 768-8244
Fax: (510) 768-8249
E-mail: [email protected]
([KLELW%
Attachment 2
Council Agenda 10-6-2026 9.F-42

City of Pismo Beach Cost Proposal
Name of Firm and Certification
Name of Firm: Badawi & Associates
Address: 5901 Christie Avenue, Suite 307
City, State, Zip: Emeryville, CA 94608
Contact Name: Ahmed Badawi
Contact Telephone Number(s): 510-768-8244
Contact Fax Number(s): 510-768-8249
Contact E-mail Address: [email protected]
I, the undersigned, certify I am duly authorized to represent the above-named firm and am empowered to submit this bid. In addition, I certify I am authorized to contract with the City of Pismo Beach on behalf of the above named firm.

The Firm will honor the prices listed in this proposal for 180 days from the submittal deadline.

President August 27, 2026
Signature Title Date
Ahmed Badawi
Name
City of Pismo Beach Cost Proposal
Schedule of Professional Fees
The above is an all-inclusive maximum price, including services, out-of-pocket expenses, meals, lodging, transportation, printing, and other costs.
(1)Our fee for the City’s Audit includes preparation of the net investment in capital assets calculation and response to GFOA review comments.

Optional
Year
Optional
Year
2029-30 2030-31
City Audit and Related Reports, including
ACFR Preparation (1)28,242$ 29,089$ 29,962$ 30,861$ 31,787$ Single Audit (only if required)3,715 3,826 3,941 4,059 4,181 Gann Limit Agreed-upon Procedures 741 763 786 810 834 TDA Audit and Related Reports 3,564 3,671 3,781 3,894 4,011 Annual Financial Transactions Report 2,519 2,595 2,673 2,753 2,836 Annual Street Report 1,511 1,556 1,603 1,651 1,701 Total 40,292$ 41,500$ 42,746$ 44,028$ 45,350$
Service 2026-27 2027-28 2028-29
Attachment 2
Council Agenda 10-6-2026 9.F-43

City of Pismo Beach Cost Proposal

Manner of Payment:

Each Engagement Team member maintains detailed time sheets describing work performed, date of work, and amount of time spent on each task for the Engagement. The Firm will bill the City after completion of each phase of the audit and bill the City up to a maximum of 90%. The remaining 10% of the proposal amount will not be due until all final reports are delivered and accepted by the City. The City can anticipate three billings as follows:

Work Performed
% of Proposal
Amount

For interim work 45%
For year-end work 45%
At presentation and acceptance of final reports 10%
Total 100%

Rates for Additional Professional Services:

Any services outside the scope of our engagement will be promptly identified before the services are rendered. Upon mutual agreement, the out-of-scope services will be separately billed at our standard hourly rates. While it can be difficult to simply state hourly rates, as often times the needs of the client and the specific tasks directly impact the billing rates for our services, we want to provide the following information regarding our published billing rates:

Position Hourly Rate
Partner $ 350
EQR 350
Manager 250
Senior 200
Staff 150
I.T. 250
Admin. 125

Our Standard Hourly Rates are adjusted annually by 3% for Cost of Living and Inflation Adjustments

Conclusion:

A client relationship with the City will be of great value to our Firm and we welcome the opportunity to develop a long- term relationship with the City. We are committed to:
* Rendering the highest standard of service.
* Developing a long-term working relationship dedicated to meeting the needs of the City. * Assisting the City in operational issues.
* Producing a quality end-product.

We have the technical qualifications and experience to provide the level of service desired and expected by the City and stand ready to provide our knowledge and experience for the benefit of your organization.

We would like to express our appreciation to the City and to its Staff for allowing us the opportunity to submit a proposal to perform professional auditing services. We are available, at your convenience, to discuss any aspects of our proposal.

Thank you for allowing us to present our Firm to you.
* * * * * * * * * * * * * * * * *
Attachment 2
Council Agenda 10-6-2026 9.F-44