City of San Bernardino
Proposal for Phase One Financial Process Assessment
AUGUST 13, 2026
PREPARED BY
EadiePayne
3880 Lemon St., Suite 300
Riverside, CA 92501
CONTACT PERSON
Eden C. Casareno
Office: 951.241.7805
[email protected]
WWW.EADIEPAYNELLP.COM
TABLE OF CONTENTS
Letter of Transmittal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Cost Estimate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Proposed Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Proposed Staffing and Hours. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Scope and Independence Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Breakdown of Tasks and Hours. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 PAGE
3880 Lemon St., Ste. 300
Riverside, CA 92501
P.O. Box 1529
Riverside, CA 92502-1529
951-241-7800
www.eadiepaynellp.com
August 13, 2026
Tarik Rahmani, CFO
City of San Bernardino
290 North D Street
San Bernardino, CA 92401
Dear Mr. Rahmani,
EadiePayne LLP is pleased to submit this preliminary proposal for a Phase One Financial Process Assessment for the City of San Bernardino. This document presents our understanding of the engagement and outlines a cost estimate, proposed schedule, staffing plan, scope considerations, and a detailed breakdown of tasks and hours to support your evaluation of our approach.
Our estimated cost for Phase One ranges from $140,000 to $150,000, with an anticipated schedule of 14 to 18 weeks from kickoff to final report and Council presentation. The engagement will be staffed by an experienced team led by an Engagement Partner, an Audit Manager, and two Audit Associates, and will focus on budget development and monitoring, procurement and contracting, payroll and position control, restricted funds and grants, and financial reporting and reconciliation processes, as detailed further in this proposal.
We recommend limiting the scope of the engagement to three years in order to manage costs effectively.
We believe a three-year timeframe is adequate for identifying and assessing relevant trends. We also recommend to exclude the review of Community Facilities Districts and Landscape Maintenance Districts as the City’s objectives in this area will necessitate legal analyses more appropriately conducted by law firms with specialized expertise in CFDs and LMDs.
This is a preliminary proposal and the scope, schedule, staffing, and cost estimate outlined herein may be revised based on further guidance and direction from City management and the City Council. We welcome the opportunity to discuss this proposal in greater detail and to refine our approach based on your feedback.
We appreciate the opportunity to present this proposal and look forward to the possibility of serving the City of San Bernardino.
Sincerely,
EadiePayne LLP
LETTER OF TRANSMITTAL
2 This proposal outlines an independent, risk-based assessment of the City’s core financial processes, with a cost estimate of $140,000–$150,000, a 14–18 week schedule, and a dedicated project team.
We are committed to transparency, practical recommendations, and ongoing communication with City representatives and Council. Please let us know if there are any questions or requests for clarification regarding this proposal.
Based on the described engagement scope, the estimated cost for Phase One ranges from $140,000 to $150,000. This estimate covers project planning, document review, interviews, transaction testing, draft and final report preparation, Council presentation, and follow-up deliverables. The range reflects variables such as the volume of records, number of departments involved, and extent of risk-based testing. A more precise estimate can be provided after an initial scoping meeting and access to sample data.
The engagement is projected to span approximately 14 to 18 weeks from project kickoff to final report and Council presentation, assuming timely access to documentation and staff. A proposed timeline is as follows:
The schedule may be adjusted based on the City’s availability, data readiness, and any emergent issues requiring expanded review.
The project team will be led by an Engagement Partner, supported by an Audit Manager and two Audit Associates. Estimated total hours are 700–750 distributed as follows:
The team’s size and composition may be adjusted based on final scope and risk assessment.
EXECUTIVE SUMMARY
COST ESTIMATE
PROPOSED SCHEDULE
PROPOSED STAFFING AND HOURS
Weeks 1–2 Project initiation, work plan development, and document request.
Weeks 3–6 Document review, process mapping, and staff interviews.
Weeks 7–11 Transaction testing and interim observations.
Weeks 12–13 Draft report preparation and management review.
Weeks 14–16 Final report, corrective action matrix, and Council presentation.
Position Estimated Hours Primary Responsibilities
Engagement Partner 130–150 hours Oversight, reporting, presentations Audit Manager 180–200 hours Planning, supervision, fieldwork, testing Audit Associates 390-400 hours Document review, sampling, data analysis 3 The engagement scope is comprehensive but does not include forensic investigation, legal review, or assessment of individual performance unless specifically expanded by Council. Any request to investigate specific allegations or transactions outside the defined scope would require a separate engagement and resources.
The consulting team will maintain independence and objectivity throughout the review, following professional standards. Should the City request advisory assistance in implementing corrective actions, this may impact independence for any subsequent attestation or audit services and will be disclosed in advance.
We recommend that the review of Community Facilities Districts and Landscape Maintenance Districts be segregated into its own engagement. The City requests an engagement that involves a legal evaluation of the establishment and authorization of the CFD/LMD, district boundaries, and service obligations that we believe are better served by law firms that specialize in CFD/LMDs.
Finally, we recommend to limit the scope for this engagement to three years (FY 2024, 2025 and 2026) in order to keep the cost at a more reasonable amount. We believe examining data from three years is sufficient to determine whether findings are one-time occurrences or recurring issues. However, if the City decides to include FY 2023, the total estimated hours should be adjusted to 900 - 950 hours and the cost will increase to a range of $180,000 to $190,000.
Other potential scope limitations include incomplete records, lack of access to key personnel, or evolving City priorities. Any such limitations will be flagged promptly, and significant issues requiring immediate attention will be reported as interim observations.
Budget development, monitoring and spending authority
SCOPE AND INDEPENDENCE CONSIDERATIONS
Tasks Hours
Interview budget/finance department personnel, city management, and city council members (5-6 individuals) 6
Review budget document for FY 2024, 2025 and 2026 12
Review detailed budget to actual comparison for FY 2024, 2025, and 2026 12 Review selected presentations by management to City Council during FY 2024, 2025, and 2026 12 Review of documentation of budgetary controls and determine compliance by City personnel on a test basis to determine whether budget actions were approved at the proper level, supported by documentation, accurately entered into the financial system, and reported consistency with Council authorization.
24 BREAKDOWN OF TASKS AND HOURS
4 Procurement and Contracting/Contract Administration and Vendor Payment Controls Payroll and Position Control
BREAKDOWN OF TASKS AND HOURS
Tasks Hours
Interview purchasing/finance department personnel, other department personnel, city management, and city council members (5-6 individuals) 6 Review listing of contracts for FY 2024, 2025, and 2026. 6 Review payment records by vendor/contract for FY 2024, 2025, and 2026 6 Review of documentation of procurement & contracting controls and determine compliance by City personnel on a test basis. Select a sample 15 contracts for each of FY 2024, 2025, and 2026 and examine contracts, bids, bid evaluation, contract approval, amendments/change orders, and other supporting documentation. Also examine invoices, POs, evidence that services or goods were received, approval for payment, and other supporting documentation for vendor payments and monitoring of contract balances, expiration and close-out. 150
Tasks Hours
Interview payroll/HR personnel, other department personnel, city management, and city council members (5-6 individuals) 6
Review of documentation of payroll and position controls, identify key controls, and determine compliance by City personnel. For each of FY 2024, 2025 and 2026, a sample of 15 employees will be selected from a number of departments selected on a risk basis. Controls to be tested should include authorization of positions, salary and benefits, segregation of duties, and documentation of any changes.
150
Obtain payroll records for the FY 2024, 2025, and 2026 and reconcile to adopted position schedule and budget. 10
Evaluate trends of personnel expenditures over FY 2024, 2025, and 2026. 8 5 Restricted Funds, Grants and Special Funding Sources
Financial Reporting, Reconciliation, and Corrective Action
BREAKDOWN OF TASKS AND HOURS
Tasks Hours
Interview accounting/finance personnel, other department personnel, city management, and city council members (5-6 individuals) 6
Perform an analytical review of all restricted funds, grant funds, debt service funds and other funds subject to Council-imposed restrictions using the fund financial statements for FY 2024, 2025 and 2026.
24 For a select number of funds, review supporting documentation of specific restrictions/ commitments/ assignments/ reserves. Documentation may include grant agreements, municipal code provisions, and City Council resolutions.
12 From selected funds above, verify that transactions were made only for eligible uses, expenditures went through an approval process, and transfers between funds were appropriate. 75 Obtain a sample of related internal and external reports and any relevant reconciliations to the City’s accounting records. 24
Review documentation of subrecipient monitoring. 8
Tasks Hours
Interview accounting/finance personnel, city management, and city council members (5-6 individuals) 6
Review a selection of bank and investment reconciliations, interfund balances and transfers, accounts receivable and account payable reconciliations, capital asset and project records and other account reconciliations during FY 2024, 2025, and 2026, and verify whether the reconciliations went through appropriate review and approval. Determine how discrepancies were resolved.
75 Obtain all manual journal entries for FY 2024, 2025, and 2026, obtain a risk-based sample, and examine supporting documentation. 60
Review any audit findings and relevant corrective action plan for FY 2024, 2025 and 2026.
Determine the status of corrective action plan. 18