Sebastopol City Council
March 4, 2025

CITY OF SEBASTOPOL CITY COUNCIL
AGENDA ITEM REPORT FOR MEETING OF: March 4, 2025
=========================================================================================== To: Honorable Mayor and City Councilmembers
From: Ana Kwong – Administrative Services Director
Subject: Approve contract with Chavan & Associates LLP for Professional Auditing Services at a cost of $29,000 for the first three years, with an option to extend 2 more years and request for a budget adjustment of $4,000
=========================================================================================== RECOMMENDATIONS:

Thisitem isto request that the City Council Approve contractwith Chavan& Associates, LLP for professional auditing services, and authorize the City Manager to execute a contract with Chavan & Associates for audit service for fiscal year 24-25 through 26-27, with possible extension of up to two additional years and and request for a budget adjustment of $4,000.

EXECUTIVE SUMMARY:

The City requires audit services of the financial statements for fiscal year 2024-25 (FY 25), and the Administrative Services (Finance) Department recommends Chavan and Associates, LLP CPAs (Chavan). The proposed cost for a three year period with 2 subsequent year as optional will be as follows:

BACKGROUND AND DISCUSSION:

The City of Sebastopol is legally required by the Government Accounting Standards Board (GASB) to issue annual financial reports that are audited by an external audit firm. In April 2017, Badawi and Associates was selected as the City’s external auditor through a Request for Proposals (RFP) process. The City entered into a contract with Badawi and Associates on April 4, 2017, for a duration of three years, with an option to extend for an additional two years. The City exercised this option, extending the contract until June 30, 2021. In 2021, further extended contract until 2024 due to lack of capacity for new RFP. The Government Finance Officers Association (GFOA) has long recommended that local governmental entities enter into multiyear agreements of at least five years when obtaining the services of independent auditors as a best practice and also recommending changing auditor periodically.

Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

The most recent engagement with Badawi & Associates expired on June 30, 2024. On August 15, 2024, the City of Sebastopol issued a request for proposals (RFP) for a new auditor. This first RFP resulted in no proposals from firms other than the incumbent. We issued a second RFP on October 7, 2024, and reached out to smaller audit firms, urging them to submit proposals. These firms cited capacity issues as the reason for not submitting proposals.

STAFF ANALYSIS:

The Administrative Services(Finance) Department presented the new proposed pricing structure with the first year audit fee of $52,745 of the incumbent firm Badawi & Associates to the Budget Committee (BC) for review during the scheduled Budget Committee meeting on February 10, 2025.

After thorough discussion, the Budget Committee expressed concerns that the new pricing structure might be too burdensome for the City. The options considered were:

1. Contacting the current auditor to explore the possibility of a 1-year audit contract instead of the existing 3- year contract with 2 optional years.

2. Following up with the previously contacted firm to see if they are willing to submit a proposal.

3. As the Administrative Services Director scheduled to attend the California Society Municipal Finance Officers’ conference the week of February 18, 2025, to potentially solicit more audit firms to submit proposals during the exhibit hall sessions.

With this proactive efforts at the conference, three additional proposals were received as listed below:

Chavan & Associates, LLP CPA
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

The Pun Group, LLP
Based on the evaluation of all four proposals, staff considers and recommends Chavan & Associates, LLP to be the best available choice as the auditor for the City of Sebastopol for the next 3 years, with 2 optional years. This recommendation is based on their competitive pricing in municipal auditing. The selection of Chavan & Associates, LLP is expected to provide the City with the audit services while ensuring fiscal responsibility and transparency.

COMMUNITY OUTREACH:

This item has been noticed in accordance with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours prior to schedule meeting date.

FISCAL IMPACT:

The proposed service cost for up to three year period with 2 subsequent year as optional will be as follows:

Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

The FY24-25 adopted budget for audit services was $25,000 based on actual expenses for recent audits and proposed for a budget adjustment for $4,000 in account 100-14-01-4220 for a total contract of $29,000.

OPTIONS:

No other options are available.

ATTACHMENTS:

Chavan & Associates Proposal & Fees Summary
Budget Amendment Resolution
APPROVALS:

Department Head Approval: Approval Date:_2/6/25______
CEQA Determination (Planning): Approval Date:_2/6/25______ The proposed action is not a project under the California Environmental Quality Act (CEQA) Administrative Services (Financial) Approval Date:_2/6/25______ Costs authorized in City Approved Budget:  Yes ☒ No ☐ N/A Account Code (f applicable) ___________________________ City Attorney Approval: Approval Date: __N/A____________ City Manager Approval: Approval Date: ___2/25/25_________ Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

FEES SUMMARY

FOR THE ANNUAL INDEPENDENT AUDIT
OF THE

CITY OF SEBASTOPOL
Submitted February 17, 2025
Chavan & Associates, LLP
Certified Public Accountants
16450 Monterey Road, Suite 5
Morgan Hill, CA 95037
Phone: (650) 346-1329
Fax: (408) 872-4159
E-mail: [email protected]
Contact: Sheldon Chavan, Partner
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Fees Summary
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 1
Date: February 17, 2025
Firm: Chavan & Associates, LLP (C&A)
16450 Monterey Road, Suite 5
Morgan Hill, CA 95037
Phone: (650) 346-1329
Contact Person: Sheldon Chavan, Managing Partner
[email protected]
650-346-1329
Price per Year by Service Level:

Certification: I, the undersigned, certify I am duly authorized to represent C&A and I am empowered to submit this bid. In addition, I certify I am authorized to contract with the City of Sebastopol on behalf of C&A.

Managing Partner February 17, 2025
Signature Title Date
Sheldon Chavan
Name
Services Hours 2025 2026 2027 2028 2029
City Audit, ACFR, Reports and Letters 259 $ 22,500 $ 22,500 $ 22,500 $ 24,000 $ 25,000 Single Audit 20 2,500 2,500 2,500 2,500 2,500
GANN Limit AUP 5 500 500 500 500 500
Management Letters N/A Included Included Included Included Included GASB implementation and guidance N/A Included Included Included Included Included Present Reports to Council/Committees N/A Included Included Included Included Included Meals, Lodging and Transportation N/A Included Included Included Included Included Subtotal City Audit 284 25,500 25,500 25,500 27,000 28,000 City AFTR (SCO) 10 2,500 2,500 2,500 2,500 2,500
City ASR (SCO) 6 1,000 1,000 1,000 1,000 1,000
Total All-Inclusive Maximum Price 300 $ 29,000 $ 29,000 29,000$ $ 30,500 $ 31,500 Optional
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Fees Summary
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 2
Schedule of Professional Fees
Our professional fees are based on actual time devoted to an engagement, at hourly rates related to the experience levels of the individuals performing the work. The following is our standard fee schedule for our audit personnel:

Manner of Payment
Progress payments will be made on the basis of pro-rated audit work completed during the course of the engagement and out-of-pocket expenses incurred in accordance with our proposal.

Rates for Additional Professional Services
In the event that extraordinary circumstances require additional services beyond the agreed upon scope, C&A will provide, in writing and in advance, the reasons for the additional services along with our estimated costs and a statement that no work will be performed prior to City approval. Rates for additional services would be the same as those identified under the quoted hourly rates above.

Standard &
Quoted
Hourly
Rates Hours 2025 2026 2027 2028 2029
Engagement Partner $ 200 40 $ 8,000 $ 8,000 $ 8,000 $ 8,240 $ 8,487 Associate Partner/Reviewer 150 8 1,200 1,200 1,200 1,236 1,273 Manager 115 16 1,840 1,840 1,840 1,895 1,952
Supervisor 85 80 6,800 6,800 6,800 7,004 7,214
Professional Staff 75 132 9,900 9,900 9,900 10,197 10,503 Administrative Staff 75 8 600 600 600 618 637
Professional Discount N/A N/A (2,840) (2,840) (2,840) (2,190) (2,066) Total Fees Base Audit 284 25,500 25,500 25,500 27,000 28,000 Additional Fees and Services:

City AFTR (SCO) N/A 10 2,500 2,500 2,500 2,500 2,500
City ASR (SCO) N/A 6 1,000 1,000 1,000 1,000 1,000
Total All-Inclusive Maximum Price 300 $ 29,000 $ 29,000 $ 29,000 $ 30,500 $ 31,500 Optional
Fiscal Year Ending
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City Council Meeting Packet of March 4, 2025

PROPOSAL FOR CONDUCTING

THE ANNUAL INDEPENDENT AUDIT
OF THE

CITY OF SEBASTOPOL
Submitted February 17, 2025
Chavan & Associates, LLP
Certified Public Accountants
16450 Monterey Road, Suite 5
Morgan Hill, CA 95037
Phone: (650) 346-1329
Fax: (408) 872-4159
E-mail: [email protected]
Contact: Sheldon Chavan, Partner
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Title Page
Transmittal Letter................................................................................................................................................ i - ii A. Firm Qualifications & Experience ................................................................................................................ 1 Independence........................................................................................................................................ 1 License to Practice in California............................................................................................................. 1 Contractor Identification and Introduction ........................................................................................... 1 Firm Size, Staff Size, Location and Staffing ............................................................................................ 2 Range of Services................................................................................................................................... 3 Contract Terminations and Affirmation Concerning Substandard Audit Work ..................................... 3 Equal Opportunity Employer................................................................................................................. 3 Subcontractor........................................................................................................................................ 3 Business Licenses................................................................................................................................... 3 Quality Control Review.......................................................................................................................... 3 B. Specific Audit Approach .............................................................................................................................. 4 Phase I - Planning and Risk Assessment ................................................................................................ 4 Phase II - Substantive Audit Procedures and Compliance ..................................................................... 5 Phase III - Financial Statement Preparation and Review....................................................................... 5 Compliance and Program Specific Auditing........................................................................................... 6 Recommendations for Improved Operations........................................................................................ 6 Irregularities and Illegal Acts................................................................................................................. 6 Control Risk Assessment ....................................................................................................................... 6 Analytical Procedures............................................................................................................................ 6 Identification of Potential Audit Problems............................................................................................ 7 Resources Available for Standards Interpretations............................................................................... 7 References............................................................................................................................................. 7 Summary of Staff Hours by Phase ......................................................................................................... 7 Summary Timeline................................................................................................................................. 8 City Client List........................................................................................................................................ 8 C. Scope of Services......................................................................................................................................... 9 D. Partner, Supervisory and Staff Resumes..................................................................................................... 11 Sheldon Chavan, CPA, Managing Partner.............................................................................................. 11 Jeff Ira, CPA, Independent Reviewer..................................................................................................... 14 Paul Pham, CPA, Associate Partner ....................................................................................................... 16 Angela Lee, CPA, Audit Manager........................................................................................................... 17 Andrew Quintero, Senior Auditor ......................................................................................................... 18 Matthew Ojeda, Senior Auditor ............................................................................................................ 19 Professional Education and Training ..................................................................................................... 20 ATTACHMENTS:

Peer Review Report
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City Council Meeting Packet of March 4, 2025

Page | i 16450 Monterey Road, Ste. 5, Morgan Hill, CA 95037 Tel: 408-217-8749 • E-Fax: 408-872-4159
[email protected] • www.cnallp.com
February 17, 2025
City of Sebastopol
7120 Bodega Ave
Sebastopol, CA 95472
We are pleased to have this opportunity to submit our proposal to provide auditing services for the City of Sebastopol (the “City”). Our understanding of the work outlined in the request for proposal is that we will audit the financial statements of the City for the fiscal years ending June 30, 2025, 2026 and 2027, with two option years.

Our audits will be performed in accordance with auditing standards generally accepted in the United States of America, the standards set forth for financial audits in the United States General Accounting Office’s (GAO) Government Auditing Standards, the provisions of the Federal Single Audit Act of 1984 and the Single Audit Act Amendments of 1996; the U. S. Office of Management and Budget’s (OMB) guidance for federal awards and agreements as provided in the Code of Federal Regulation (CFR) 2 Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and relevant Governmental Accounting Standards Board (GASB) Statements. We will also apply the necessary procedures to prepare the reports as requested in the RFP and noted in our cost proposal.

As a result of our audit, we will express an opinion on the fair presentation of the basic financial statements, as listed in the RFP, in accordance with GAAP. We will also issue a report on internal controls over financial reporting and on compliance with applicable laws and regulations in accordance with Government Auditing Standards.

Throughout the contract period, we will provide consultation on accounting and compliance issues and attend meetings to discuss the audit and management comments. It is our commitment to the City that we will complete the work within the agreed time frame and that we have the resources, time and personnel to dedicate to this engagement for the entirety of the contact. We are confident Chavan & Associates LLP ("C&A") is the best-qualified firm to serve as your independent auditors. A brief list of reasons includes:
 We specialize in the audits of local governments and not for profit entities.  Our partners/reviewers have 84 years of combined experience auditing local governments.  Our firm and key professionals are properly licensed to practice in the state of California.  Our service will be dependable, reliable and timely.
 We will be sensitive to your workload. We understand you and your staff must keep up with your current work as well as deal with the audit.
 Our staff and partners are available twelve months of the year to serve our audit clients.

You are important to our firm and we promise a high level of involvement and enthusiasm at all levels.

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City Council Meeting Packet of March 4, 2025

Page | ii 16450 Monterey Road, Ste. 5, Morgan Hill, CA 95037 Tel: 408-217-8749 • E-Fax: 408-872-4159
[email protected] • www.cnallp.com
 The engagement partner will attend all conferences and meetings and will supervise the audit directly during each year and phase of the engagement.  We offer flexible staffing and scheduling. We can send a full team onsite, work 100% remotely, or send a small team on site.
 To improve the efficiency of the audit process, we use online software, Engagement Organizer (EO), to provide a list of information and monitor the workflow during the audit.

The link to EO is provided early during the planning process and includes items for both interim and year-end work, such that we can edit the list as needed moving forward. All documents can be uploaded here and notes, status updates and comments are done through EO. We also have a secure portal as an additional way to share information.

We have a full-time IT manager on staff that is available to assist throughout the audit. All of our partners and staff are familiar with software utilization and data extraction. We also focus on the management of user ID’s, passwords, and password authentication tools. Finally, when performing test of controls, we look for controls that will prevent email scams, such as requests to change remittance advice for a vendor’s invoice.

While most of our clients prefer digitally published reports in pdf format, we have invested in HP color printers, binding machines and binding supplies, to provide professional bound reports to clients whom still appreciate a printed report. Our team has been printing, binding and publishing ACFR’s and similar reports for over forty years; beginning with Jeff Ira back in the 1980’s.

Staffing for the audit will include one Engagement Partner, one Associate Partner, one Audit Manager, one Supervisor, two Professional Staff and one Administrative Staff. The Engagement Partner, one Senior and one Staff will be assigned to visit your offices, as feasible.

Sheldon Chavan and Paul Pham are the partners authorized to sign and obligate the firm contractually and represent the firm. He is empowered to submit the bid and authorized to sign a contract. This proposal is a firm and irrevocable offer for 90 days. We look forward to being of service to you.

Very truly yours,
Sheldon Chavan, C.P.A., Partner
Chavan & Associates, LLP
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City Council Meeting Packet of March 4, 2025

Section A
Firm Qualifications & Experience
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section A - Firm Qualifications & Experience
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 1
Independence
C&A is independent of the City and all of its component units as defined by generally accepted auditing standards and the U.S. General Accountability Office’s Government Auditing Standards. In all matters relating to the audit work, the audit organization and individual auditors, whether government or public, should be free from personal and external impairments to independence, should be fiscally independent, and should maintain an independent attitude and appearance.

C&A did not have any professional relationships involving the City of Sebastopol, or any of its agencies and component units, for the past five (5) years that would cause a conflict of interest relative to the scope of services identified in the request for proposal.

License to Practice in the State of California
C&A and all key professionals are properly licensed to practice as certified public accountants in the State of California and do not have any record of substandard work or unsatisfactory performance pending with the State Board of Accountancy. C&A is registered with the California State Board of Accountancy and our stat number is PAR 7294.

Contractor Identification and Introduction
Company Name: Chavan & Associates, LLP (C&A)
Address: 16450 Monterey Road, Ste. 5, Morgan Hill, CA 95037 Office: 408-217-8749
Fax: 408-872-4159
E-mail: [email protected]
CA File Number: 202009218003
FEIN: 27-0630496
Authorized to Sign: Sheldon Chavan, Partner; Paul Pham, Partner Our partners and reviewers have performed audits under Governmental Auditing Standards, the Single Audit Act and the State Controller’s Office Minimum Audit Requirements for a combined 84 years; Sheldon for 27 years, Jeff Ira for 41 years, and Paul Pham for 16 years. In August of 2009, we established C&A as a limited liability partnership. C&A is a local audit firm in San Jose, CA specializing in local government auditing and consulting. We have audited and prepared Annual Comprehensive Financial Reports (ACFRs) and basic financial statements as required by the Government Finance Officers Association (GFOA) and the Governmental Accounting Standards Board (GASB) for cities, fire districts, water districts, sanitation districts, JPAs and other types of special districts. Our partners have been reviewers of ACFRs for the GFOA and CSMFO.

Most recently, C&A prepared ACFRs for the City of El Cerrito, City of Oroville, City of Suisun, Town of Los Gatos, and City of Carmel-by-the Sea for the year ending June 30, 2024. Our goal at C&A is to provide premium audit services at a reasonable fee. We believe that continuous partner involvement helps us achieve our goal, which is why our partners are constantly involved in every audit. Ultimately, minimizing on-the-job training allows us to focus exclusively on servicing our clients.

Single Audit
Experience
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City Council Meeting Packet of March 4, 2025

Section A - Firm Qualifications & Experience
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 2
After starting the firm with only 9 clients in 2009, we currently have approximately 200 government, nonprofit and grant engagements covering about 109 clients, 43 of which were required to have a single audit under uniform guidance in the last audit season. Our firm’s experience includes numerous audits under state and federal compliance audit guides, including the Minimum Audit Requirements and Reporting Guidelines for Cities as required by the State Controller’s Office. What makes us unique from other audit firms is that we eliminate “on-the-job” training through intensive in-house training, audit planning, and by having partners in the field throughout the entire engagement (not just “spotchecking”). The daily interaction with our Engagement Partner has been invaluable to our clients as it provides the opportunity for immediate feedback and the chance to ask questions related to accounting, account coding, grant requirements, ACFR requirements, budgeting, and much more. Auditing is the main focus of our practice and we are available to start as early as February 1st, however our calendar is flexible.

C&A is also a member of the AICPA’s Government Audit Quality Center which promotes the importance of quality governmental audits and the value of such audits to purchasers of governmental audit services. GAQC is a voluntary membership center for CPA firms and state audit organizations that perform governmental audits.

Firm Size, Staff Size, Location and Staffing
We also have fourteen professional, full-time staff in addition to our partners and two administrative staff that will be available to assist as needed throughout the engagement. Our engagement partners are directly involved with the audits. Our central office is located in Morgan Hill, CA. Staffing for the City’s audit will include the following professionals (audit experience):

Sheldon Chavan, CPA, Managing Partner (25 years)
Jeff Ira, Independent Reviewer (41 Years)
Paul Pham, CPA, Associate Partner (16 years)
Angela Lee, CPA, Audit Manager (10 years)
Andrew Quintero, Senior Auditor (5 years)
Matthew Ojeda, Senior Auditor (7 years)
One of the professional staff could change from year to year. The City will be notified of any staff changes prior to fieldwork. The Engagement Partner, manager, and supervisor will be the same during each year of the engagement.

Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section A - Firm Qualifications & Experience
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 3
Range of Services
The following summarizes the range of services we provide:

Contract Terminations and Affirmation Concerning Substandard Audit Work C&A and all assigned personnel do not have any record of substandard work, contract failures, outstanding claims, litigation, investigations, or other unsatisfactory performance issues against us or pending with the State Board of Accountancy or any other entity. In addition, we have not had any federal or state desk review or field reviews of our audits. C&A has no record of lost clients or contract failures.

Equal Opportunity Employer
C&A is an equal opportunity employer and is in compliance with the Civil Rights Act of 1964, the State Fair Employment Practice Act, and all applicable federal and state laws and regulations relating to equality.

Subcontractor
C&A will not be engaged with any subcontractors during this engagement.

Business Licenses
C&A will obtain and maintain a valid business license throughout the duration of the contract, as applicable.

Quality Control Review
We are enrolled in the AICPA quality control peer review program. Our peer review was performed in compliance with AICPA and GAO requirements and included a selection of government audit engagements. Our audits complied with auditing standards generally accepted in the United States of America and Generally Accepted Governmental Auditing Standards.

There were no desk reviews or disciplinary action in the last 3 years.

Number Management,
of Percent by Accounting & Nonprofit
Entity Type Clients Entity Auditing Other Tax
Local Education Agencies 33 30% 100% 0% 0%
Charter Schools 13 12% 100% 0% 100%
Non-profit Organizations 22 20% 91% 0% 68%
Cities and Towns 13 12% 85% 0% 0%
Special Districts 19 17% 84% 16% 0%
Privately Held 9 8% 67% 22% 0%
GAAS GAGAS Single Bond EAAP
Audit Audit Audit Audit Audit
Percent by Service Type 93% 75% 39% 19% 41%
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City Council Meeting Packet of March 4, 2025

Section B
Specific Audit Approach
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section B - Specific Audit Approach
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 4
The C&A audit approach begins with an entrance conference between Sheldon Chavan and management to gather information for risk assessment and audit planning. Upon the conclusion of the entrance conference, Sheldon will plan and schedule C&A’s three phase audit approach and prepare a list of items to be provided for Phase I of the audit. Significant aspects of each phase are outlined below as augmented based on our review of the City’s financial reports, RFP, Budget documents, and Council and Finance Commission agendas and minutes:

Phase I - Planning and Risk Assessment
This phase is designed to evaluate your operating and accounting procedures and will provide the basis for a significant portion of our letter to management. The results of our work during this phase will determine our audit approach for significant accounts and compliance. We plan to begin this phase by meeting with management and the Finance Commission to plan the audit and discuss any significant issues with the proposed audit plan and timeline.

At least six weeks prior to the beginning of this phase, we intend to provide the City with a link to Engagement Organize (“EO”)r detailing the information and timing that will be needed in order to facilitate the completion of the audit in a timely manner. Having all items in EO uploaded prior to the beginning of the audit field work will allow us to complete the audit within the allotted time frame or earlier. We will also begin the testing of federal compliance for major programs during this phase, if applicable. The EO will include Phase I, II, and III items once uploaded and will updated during the year.

The City will be able to leave notes on each item, upload attachments and message our team through EO.

We plan the audit and obtain our understanding of the internal control structure, control environment, and accounting system through:
 Inquiries of appropriate management and staff personnel.  Inspection of the City’s documents, records, budget and related materials, organizational charts, manuals and programs.  Observation of the City’s activities and operations to corroborate the results of inquiries.  Testing of the controls to determine they are operating as planned.  Performance of preliminary analytical review on interim financials. The analytical review entails comparing similar information for the same time frame from the prior year and also comparing current year-to-date information to the budget to determine areas that may need additional attention during Phase II.
 Review and evaluation of the City’s financial and other management information system controls and procedures. Our staff has gained invaluable experience with systems such as HTE, Multiple Operation Management (MOM), Springbrook, Pentamation, QuickBooks, Digital Schools, SunGuard, Escape, FUND$, CECC, SACS, Financial 2000, SASi and many others. It is our goal to maximize the usage of your computer system during the audit.

This phase constitutes approximately 40% of all non-clerical hours of the engagement and may be combined with Phase II if desired. At the completion of Phase I, an exit conference will be held to discuss findings and recommendations and prepare for Phase II.

Three Phase Audit
Approach
Internal Controls
Documentation
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City Council Meeting Packet of March 4, 2025

Section B - Specific Audit Approach
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 5
Phase II - Substantive Audit Procedures and Compliance
This phase is designed to complete our substantive and compliance audit procedures on the accounts of the City. The approach for Phase II will be based on the results of Phase I. Audit programs will be tailored for your City’s needs. This work will begin after the closing of your books.

Sample size and selection is based on our assessment of risk and planned or actual deviations. A typical sample size will be 25 to 60 items and be randomly selected. Our sampling methods vary depending on the type of tests we perform. Sample selection for compliance work will be based on the respective compliance and audit guides, KC, our experience and judgment, and other various sources. We use Knowledge Coach (KC) audit programs by Commerce Clearing House (CCH) to assist in our risk determination and sampling selection. We also use ProSystems fx Engagement paperless audit, Microsoft Excel, and Microsoft Word on laptops to perform the audit. Generally, we prefer information provided in electronic format, however we use production scanners in the office and portable scanners in the field for information that is unavailable in electronic format.

Analytical procedures during Phase II involve comparing current data to prior year and budget data, calculating dollar and percentage variances and investigating differences. We also analyze trends and relationships of the various financial statement components and ratios.

Laws and regulations subject to audit will be determined based on inquiry and familiarity we gain with the City and with state and federal compliance requirements. We also attend seminars and webinars related to state and federal regulations to keep abreast of new requirements.

Phase II will take approximately 40% of the engagement hours. At this time, an exit conference will be held to discuss findings and recommendations, the status of new accounting principles and reporting requirements, and prepare for Phase III.

Phase III - Financial Statement Preparation and Review
This phase consists of preparing or assisting with the preparation of your financial statements, as required in the RFP, in conformity with accounting principles generally accepted in the United States of America. We will also prepare all other financial and compliance reports required of us as listed on the RFP. The required reports and management letter will be submitted to management as noted in the timeline in the RFP, unless otherwise agreed. We will also ensure that new GASB pronouncements identified in phase I and II have been appropriately accounted for and disclosed in the financial statements and that the impact of these statements is sufficiently presented in our audit reports. The most efficient way to ensure we meet the reporting deadlines is to have the audited trial balance and final adjustment completed by the last day of field work. This, in combination of the automation provided by Prosystems Engagement will reduce the lag time from the completion of field work and report issuance.

Our reporting process is automated through our audit software. Once we obtain the City’s trial balance in electronic format, we can import that into our system, which will automatically code and update all financial statements and most note disclosures in the financial statements and notes. We can also auto Sampling
Methods
Analytical
Procedures & Laws
and Regulations
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section B - Specific Audit Approach
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 6
link tables, charts and other documents the City would like to generate. All of this information can be shared through our online secure lockbox/fileshare website at www.cnallp.com and through our online engagement portal which is linked to our list of items. All agreed upon adjustments will be linked in our audit software. This greatly reduces the report preparation time and involvement of City staff and creates more opportunity for review of information systems, internal controls and management recommendations. At the end of this phase we will provide a summary of audit adjustments and uncorrected misstatements (passed adjustments).

We anticipate that Phase III will comprise approximately 20% of the engagement hours, including the majority of the clerical hours. The timing of each phase of the audit is estimated based on the assumption that the City will meet their close schedule and responsibilities as noted in the request for proposal.

Please note that we generally hold entrance conferences at the beginning of Phase I and II and exit conferences at the end of Phase I, II and III. However, we are available to meet with the City at any time.

Compliance and Program Specific Auditing
Included in all phases are specific procedures required to complete individual compliance items.

Analytic and sampling procedures generally follow those described in the preceding phase, but are modified, when needed, to meet specific guidelines of the programs audited.

Recommendations for Improved Operations
We feel we have accumulated valuable knowledge in accounting and auditing which has allowed us to offer a wide range of specific recommendations to increase the efficiency and effectiveness of our audit clients. With our background, we can provide services that may be very beneficial to you presently and in the future. As our client, you can look to us for informed support year-round in all areas of interest or concern. In the course of our engagement with the City, we will provide prompt, knowledgeable answers to your questions regarding all aspects of accounting, finance, management, and operations. It is our policy to discuss discrepancies and recommendations with City staff directly involved and then with management, as necessary. If an item warrants inclusion in the report as a finding, we will obtain management’s responses to each finding. All responses will be reviewed with management and relevant committees before they are presented to the City Council.

Irregularities and Illegal Acts
We will make an immediate, written report of all irregularities and illegal acts or indications of illegal acts of which we become aware to the Audit Committee (or similar) and Attorney.

Control Risk Assessment
As part of our audit approach, we use KC forms, narratives, questionnaires and summary schedules to gain an understanding of the control environment and assess its overall effectiveness. This helps us identify the types of potential misstatements and factors that affect the risk of material misstatement and their impact on the audit plan.

Analytical Procedures
Analytical procedures are used at three points of time during our audit; planning, substantive testing, and final review of the completed financial statements. Analytical procedures are used to obtain Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section B - Specific Audit Approach
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 7
knowledge of conditions and events, to indicate the presence of possible misstatements, to provide substantive evidence of balances and to assess the financial condition of the City.

As we obtain knowledge about the City, we will be able to direct our attention to areas requiring greater audit emphasis as well as provide substantive evidence in support of recorded account balances.

Identification of Potential Audit Problems
Each year we approach the audit objectively and use a risk-based approach to anticipate any potential audit problems. If anything were to come to our attention during the course of the audit, it would be reported to the proper management level depending on the nature of the problem and as noted in the RFP.

Resources Available for Standards Interpretations
In addition to the items published by GFOA, AICPA, FASB, and GASB, we use RIA checkpoint and Thompsons as our main online reference material. As our client, the City will have access to all our resources.

Client References and Similar Engagements
Summary of Staff Hours by Phase
Entity Name City of El Cerrito City of Oroville Town of Los Gatos Contact Person Crystal Reams Ruth Duncan Gitta Ungvari
Title Finance Director Director of Finance Finance Director Address 10890 San Pablo Avenue, El Cerrito, CA 94530 1735 Montgomery St, Oroville, CA 95965 110 E. Main St, Los Gatos, CA 95030 Phone 510-215-4312 530-538-2413 408-354-685
E-mail [email protected] [email protected] [email protected] Last Audit Period 6/30/2023 6/30/2023 6/30/2023
Hours 480 272 440
Fiscal Years Audited 2 6 2
Partner Sheldon Chavan Sheldon Chavan Sheldon Chavan
GFOA Award Yes Yes Yes
Scope of Work ACFR ACFR ACFR
GAGAS Audit GAGAS Audit Management Letter
Single Audit/OMB Single Audit/OMB GANN Limit AUP
GANN Limit AUP GANN Limit AUP TDA Audit
SAS 114 Report SAS 114 Report Single Audit
Management Letter Management Letter GANN Limit AUP
Successor Agency Successor Agency TDA Audit
SCO AFTR SCO AFTR Successor Agency Audit
Year Round Consultation Year Round Consultation Year Round Consultation Total
Level of Staff I II III Hours
Engagement Partner 8 8 24 40
Associate Partner/Reviewer 2 2 4 8
Manager 6 6 4 16
Supervisor 36 36 8 80
Professional Staff 62 62 8 132
Administrative Staff 2 2 4 8
Totals for Audit Services 116 116 52 284
Phases
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section B - Specific Audit Approach
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 8
Summary Timeline
City Client List
This is a partial listing from our total list of clients which includes 110 local governments and nonprofits.

Segment FY2025 Phase
Entrance Conference May 15, 2025 I
Audit Planning C&A's Office May 16, 2025 I
List of Items Required by Client May 20, 2025 I
Interim Testing June 16, 2025 I
Interim Exit Conference and Completion June 20, 2025 I
Preparation and Mailing of Confirmation Letters August 1, 2025 II Year-end Field Work Planning Meeting August 1, 2025 II
Progress Conference August 26, 2025 II
Update List of Items Required by Client - Final August 26, 2025 II Year-end Field Work and Compliance Testing September 22, 2025 II Exit Conference September 26, 2025 II
Final List of Recommendations September 26, 2025 II/III Audit Adjustments November 1, 2025 II/III
Draft Reports, Financials, Management Letters November 1, 2025 III Final Reports, Financials, Management Letters November 15, 2025 III Council, Commission & Public Presentations As Needed III Cities/Towns ACFR GAS GAGAS Single Audit EAAP Other Bond (P39) City of Albany    
City of Carmel-by-the-Sea    
City of Cotati    
City of Del Rey Oaks   
City of El Cerrito     
City of Gridley     
City of Marina     
City of Oroville     
City of Pacific Grove     
City of Point Arena  
City of Rocklin     
City of Saratoga    
Town of Los Gatos    
Town of Yountville    
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section C
Scope of Services
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section C - Scope of Services
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 9
Audit Scope
We understand, accept, and have included in our work plan the following scope of services:

A. Independent Auditor’s Reports for the City on the fair presentation of the financial statements in conformity with generally accepted accounting principles based upon audits of the Basic Financial Statements of the City. The other supplementary information listed in the Table of Contents in the City's ACFR, including combining schedules and additional budgetary comparison schedules, are not a required part of the basic financial statements, however, C&A is to provide a report on the combining and individual fund financial statements and supporting schedules. The information presented shall be based on the auditing procedures applied during the audits of these basic financial statements.

B. C&A will issue a separate management letter (SAS 114) that include disclosures of material and non-material weaknesses in internal controls, disclosures of violations of finance-related legal and contractual provisions, and auditors’ recommendations for financial and program management improvements. City staff comments addressing any issues disclosed, such as a material weakness, will be incorporated in the report.

C. C&A will issue a separate management letter (SAS 115) that includes an overview on the scope of the audit and the firms’ responsibility under U.S. GAAS; any misstatements, audit adjustments or significant audit findings; and any difficulties encountered during the audit including disagreements with management.

D. C&A will prepare a separate Single Audit Report of Federal Financial Assistance (if required), including internal controls over financial reporting and compliance performed in accordance with the U.S. Office of Management and Budget (OMB) Circulate A-133, Audits of States, Local Governments, and Non-Profit Organizations. The report will include the appropriate Schedule of Expenditures of Federal Awards, footnotes, findings and questioned costs, including reportable conditions and material weaknesses, and follow up on prior audit findings where required.

E. Our audits are to be performed in accordance with all applicable and generally accepted auditing standards including, but not limited to: the standards set forth for financial audits by the Governmental Accounting Standards Board (GASB), in the General Accounting Office’s (GAO) Government Auditing Standards, and in the U.S. Office of Management and Budget (OMB) Circular A-133, Audits of State, Local Governments, and Non-Profit Organizations.

F. C&A will provide assistance to the City in order to meet the requirements for the Government Finance Officers Association (GFOA) “Certificate of Achievement for Excellence in Financial Reporting.” Our assistance will include all items noted in section III.A. of the RFP.

G. All working papers and reports must be retained, at C&A’s expense, for a minimum of five (5) years following completion of the audit, unless the firm is notified in writing by the City of the need to extend the retention period. C&A will be required to make working papers available, upon request, to the following parties or their designees:

Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section C - Scope of Services
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 10

1. Parties designated by the federal or state governments or by the City as part of an audit quality review process.

2. Auditors of entities of which the City of Capitola is a sub-recipient of grant funds.

3. State of California, Office of the State Controller.

H. In addition, C&A shall respond to the inquiries of successor auditors and allow successor auditors to review working papers relating to matters of accounting significance.

I. C&A will prepare the City’s Annual Financial Transactions Report and Streets Report required by the State Controller’s Office and file the reports electronically with the State Controller’s Office before the due date each fiscal year.

Note: The scope of services in the RFP supersedes the above scope which generally aligns with the RFP but may not be listed in the same specific order.

Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section D
Partner, Supervisory and Staff Resumes
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section D - Partner, Supervisory and Staff Resumes
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 11
We are aware of the need for continuity of personnel on the engagement and promise that the Engagement Partner will be directly involved in the audit during each year of the contract. We believe that extensive partner involvement provides continuity that could not be achieved in any other way. All staff committed in this proposal will be available for the entire June 30, 2025 audit and are available 12 months a year for questions, comments and implementation support. We understand that the Engagement Partners, managers and other supervisory staff and specialists may be changed only with the express prior written permission of the City. Other audit personnel may be changed at our discretion as long as the replacements have substantially the same or better qualifications or experience. The City retains the right to approve or reject replacements.

Sheldon Chavan, CPA
Managing Partner (Member CalCPA, AICPA, GFOA, CSMFO, GAQC) Sheldon holds a B.S. in Accounting from San Jose State University. He began his career in public accounting in 1998 and has been auditing local governments and nonprofit organizations ever since. Sheldon is a CPA licensed in California and a member of AICPA, CalCPA, CSMFO, GAQC and GFOA. He has also been a member of the GFOA Special Review Committee, with responsibility for reviewing ACFR’s for award of the Certificate of Excellence in Financial Reporting. Sheldon has prepared/reviewed ACFR’s for the City of Berkeley, City of Sunnyvale, City of Pittsburg and many others
over his career. Most recently, Sheldon prepared
the ACFR of the City of Oroville, Town of Lost Gtos
and the City of Albany for the fiscal years ended
June 30, 2023 (partial listing).

Sheldon has managed governmental audits his entire career, which includes the technical review of all work papers, staffing, scheduling, reporting, state compliance, federal compliance, state controllers reports and much more. He is responsible for running the audit in the field and providing accounting and auditing technical support to other partners and staff, primarily in the areas of compliance with auditing standards generally accepted in the United States of America, the standards set forth for financial audits in the United States General Accounting Office’s (GAO) Government Auditing Standards, and the provisions of the Federal Single Audit Act and the United States Office of Management and Title 2 CFR Part 200 (Uniform Guidance).

Sheldon also ensures that each staff has met the continuing professional education requirements under these standards and teaches several in-house seminars a year. He also administers our firm’s quality control system as required by GAAS and Yellow Book standards. Sheldon has been performing audits under the Single Audit Act his entire career. Understanding the complexities of the various federal programs is one of his specialties. Over the years, Sheldon has audited major programs such as ARPA, CARES Act, National School Lunch, Title II Education Technology, IDEA Special Education Local Assistance, Title I, Education Jobs Fund, Title IV Drug Free Schools, NCLB Title III, Title II Improving Teacher Quality, CDBG, Shelter Plus Care, Home Investment in Affordable Housing, HUD Section 8, Highway Planning and Construction, Medi-Cal, Low-income Low Energy Assistance, and many more.

Sheldon has extensive experience auditing government bond programs and can assist the City with bond covenant calculations, bond compliance, tax filings, bond arbitrage issues and any other general ACFR
Preparation
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section D - Partner, Supervisory and Staff Resumes
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 12
reporting requirements. In addition, we currently have multiple clients for which we complete special bond performance audits each year. We also provide contractor prequalification services for some clients who use restricted bond funds for modernization and infrastructure improvements.

Sheldon’s recent continuing professional education:

Description of Program/Training
Yellow Book:Revised Government Auditing Standards
Government Audting Standards - Yellow Book
Frequent Government and NPO Frauds: Misuse of Assets
Governmental and Nonprofit Annual Update: Federal Government Activities Single Audit Lighting Round
Governmental Audit Quality Cetner Annual Update Webcast Program-Specific Audits' plus 'Audit Tools and Guidance' Applying Risk Assessment Standards: Understanding the Entity and Its Environment GASB Updates
Governmental Accounting and Auditing Conference Webcast - 5121266C Not-for-Profit Organizations Conference Webcast - 5121343C Cases in NFP Acct. & Auditing: 'Financial Statement Requirements' plus 'Net Asset Classifications' Governmental Auditing: Course Two Performance Audits
Governmental Auditing: Course Three Financial Audits, Attestation Engagements, and..

Governmental Accounting and Reporting
Ethics: AA&C LLP - Accounting Firm Practice Development Committee State and Local Govt Planning Considerations
Cases in NFP Acct. & Auditing: Contributions
Field Work Documentation: Preparation, Maintenance, Types of Workpapers School District Update Including LCFF and LCAP Compliance School Districts Conference
Understanding the Changes to Yellow Book Independence
California Regulatory Review Course
Fraud Audit Techniques Using Excel
Applying the Uniform Guidance in Your Single Audits
Testing Compliance' plus 'Reporting Requirements
Fid Act Understanding impacts of GASB 84
Its Here! Fid Act Implementation Considerations
Accounting and Auditing Conference
Bernard Madoff Investment Securities’ Auditor'
The Detection and Prevention of Fraud in Financial Statements Governmental Auditing: Course One Fundamental Principles for Government Auditing Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section D - Partner, Supervisory and Staff Resumes
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 13
The following is a partial list of Sheldon’s clients over the years:

Cities and Towns Special Districts/JPA's School Districts/COE's Nonprofits and Other City of Albany Bay Area Water Services & Cons Antelope Elementary 2006 Washington St.

City of Berkeley Central Marin Sanitation Agency Belmont Redwood Shores Bay Area Special Education JPA City of Carmel-by-the-Sea East Bay Dischargers Authority Burlingame Bay Area Water Users Association City of Del Rey Oaks Fairfield-Suisan Sanitation Cabrillo Unified Black Adoption Placement City of Marina Half Moon Bay Fire Protection Campbell Union Boys and Girls Clubs of Sonoma City of Novato Hayward Area Parks and Rec Cloverdale Unified Center for Empowering Refugees City of Oroville Highland Recreation District Cotati Rohnert Park Children of Grace City of Pacific Grove Los Trancos Water District Hillsborough City Collective Roots City of Pittsburg Mckinney Water District La Honda Pescadero Credo High School City of Point Arena Menlo Park Fire Protection Lakeside Diagnostics for the Real World City of Salinas Midpen Regional Open Space Las Lomitas Elementary Hidaya Foundation City of San Rafael Pleasant Hill Parks and Rec Lassen View Elementary Livebooks City of Saratoga Point Montara Fire District Los Altos Elementary Mashery City of Scotts Valley Santa Clara Regional Open Space Luther Burbank Mission Charter City of Sonoma Saratoga Cemetery District Manton Joint Union Mission Language and Vocational City of South San Francisco South Bayside System Authority Menlo Park City Morgan Hill Charter Foundation City of Suisun City South San Francisco Conf. Ctr. Millbrae Elementary Morgan Hill Charter School City of Sunnyvale Sausalito-Marin City Sanitation Mineral Nob Hill Home Owners Assoc.

City of Tracy Tahoe Reqional Planning Agency Mountain View Whisman O'Conner Water Town of Los Gatos The Cities Group Orchard One Million Lights Town of Windsor Valley of the Moon Fire Pacifica Orange County Charter School West Bay Sanitary District Plum Valley Pathway to Choices West County Wastewater District Portola Valley Elementary Pyramid Alternatives Westborough Water District Red Bluff Redwood City Education Foundation Woodside Fire Protection District Salinas Union High San Jose Conservation Charter San Bruno Park San Jose Conservation Corps
San Carlos Elementary Singularity University
San Mateo County Office Sociometrics
San Mateo Union High South Tahoe Area Transit Authority Scotts Valley Unfied Stone Bridge Charter School
Sequoia Union High Woodside Atherton Authority
Sonoma Valley Unified Work2future Foundation
Union School District
West County Agency (LEA)
Windsor Unified
Woodside Elementary
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section D - Partner, Supervisory and Staff Resumes
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 14
Jeffrey J. Ira, CPA
Independent Reviewer (Member CalCPA, AICPA, GFOA, CSMFO, GAQC) Jeffrey is a graduate of Humboldt State University with a B.S. in Business with a concentration in Accounting. He is a CPA licensed in California, a member of the AICPA, the California Society of CPAs, the GFOA and the CSMFO. Jeff joined our firm in 2017 and has been auditing local governments since 1981. Jeff is a member of the GFOA Special Review Committee, with responsibility for reviewing ACFRs for award of the Certificate of Excellence in Financial Reporting. Jeff served as a Councilmember and the Mayor for Redwood City. He has also served on various local governing boards and committees, which makes him acutely aware of both your financial and management needs. Jeff will be responsible for concurrent review of your audit, which is a quality control measure designed to ensure the audit is completed effectively and in compliance with governmental auditing standards, compliance requirements and uniform guidance requirements.

Jeff has forty years of professional experience and has participated in a variety of auditing and consulting engagements with cities, school districts, and special districts including the following (partial listing):

Cities and Towns Special Districts School Districts/COE's City of Berkeley Bay Area Water Supply Conserv. Agency Antelope Elementary City of Cloverdale Central Marin Sanitation Agency Cabrillo Unified City of Oroville East Bay Dischargers Authority Cotati Rohnert Park City of Point Arena Half Moon Bay Fire Protection La Honda Pescadero City of Saratoga Los Trancos Water District Lassen View Elementary City of Sonoma Menlo Park Fire Protection Las Lomitas Elementary City of Tracy Pleasant Hill Parks and Rec Los Altos Elementary Town of Los Gatos Point Montara Fire Protection District Luther Burbank City of Pittsburg Santa Clara Regional Open Space Auth Redwood City Elementary City of San Rafael Saratoga Cemetery District Menlo Park City City of Concord South Bayside Systems Authority Millbrae Elementary City od Salinas South San Francisco Conf. Ctr. Santa Cruz City City of Sunnyvale Tahoe Regional Planning Agency Mountain View Whisman City of San Carlos The Cities Group Orchard School District City of South San Francisco West Bay Sanitary District Burlingame City of Marina West County Wastewater District Jefferson Union High City of San Bruno Westborough Water District Portola Valley Elementary City of Campbell Woodside Fire Protection District Red Bluff City of Novato Highland Recreation San Bruno Park
Town of Atherton Coast side Water District San Mateo County Office City of Cupertino Sequoia Union High
Sonoma Valley Unified
San Mateo Unified
Ravenswood Elementary
Windsor Unified
Woodside Elementary
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section D - Partner, Supervisory and Staff Resumes
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 15
A summary of Jeff’s recent professional education includes:

GAGAS - Ethical Principles In Government Auditing Government Auditing GAGAS - Field Work and Reporting Standards Major Changes to Auditing Standards GAGAS - Field Work Standards For Financial Audits Limiting Auditor Liability GAGAS - General Field Work And Reporting Standards Auditor Communications: Critical New Requirements GAGAS - General Standards School Districts Conference
GAGAS - Reporting Standards For Financial Audits Governmental Accounting, Reporting, and Auditing Update GAGAS - Use and Application of GAGAS GASB Basic Financial Statements for State and Local Governments Description of Program/Training
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section D - Partner, Supervisory and Staff Resumes
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 16
Paul Pham, CPA
Associate Partner (AICPA, CalCPA)
Paul received his Bachelor of Science from Pacific University and hopes to pursue a Master of Accountancy in the near future. Paul has been working in public and private accounting since 2007 and has completed Fourteen governmental audit seasons. He has completed financial and compliance audits for the entities listed below since 2007. Besides the standard control documentation and substantive testing required for GAAS audits, Paul has performed audits and prepared reports under OMB Subpart F and the Single Audit Act for most of the entities listed below. He has audited Federal grants from various agencies, including FEMA, HUD, FTA, the Department of Education (Title I, Special Education, Title II, Adult Ed) and much more.

Paul’s recent continuing professional education:

The following is a partial list of Paul’s clients over the years:

GAGAS - Ethical Principles In Government Auditing Government Auditing GAGAS - Field Work and Reporting Standards Major Changes to Auditing Standards GAGAS - Field Work Standards For Financial Audits Limiting Auditor Liability GAGAS - General Field Work And Reporting Standards Auditor Communications: Critical New Requirements GAGAS - General Standards School Districts Conference
GAGAS - Reporting Standards For Financial Audits Governmental Accounting, Reporting, and Auditing Update GAGAS - Use and Application of GAGAS GASB Basic Financial Statements for State and Local Governments Description of Program/Training
Cities and Towns Special Districts School Districts/COE's Nonprofits and Charter Schools City of Albany Bay Area Water Services & Cons Antelope Elementary Bay Area Water Users Association City of Berkeley Central Marin Sanitation Agency Burlingame Black Adoption Placement City of Carmel-by-the-Sea Fairfield-Suisan Sanitation District Cabrillo Unified Boys and Girls Clubs of Sonoma City of Del Rey Oaks Menlo Park Fire Protection Cotati Rohnert Park Center for Empowering Refugees City of Oroville Midpen Regional Open Space Hillsborough City Children of Grace City of Pacific Grove Santa Clara Regional Open Space La Honda Pescadero Collective Roots City of Point Arena Saratoga Cemetery District Las Lomitas Elementary Credo High School City of Rocklin South Bayside System Authority Lassen View Elementary Hidaya Foundation City of Saratoga South San Francisco Conf. Ctr. Los Altos Elementary Livebooks City of Sonoma Suasalito-Marin City Sanitation District Luther Burbank Mashery City of Suisun City Tahoe Reqional Planning Agency Manton Joint Union Mission Charter City of Tracy The Cities Group Millbrae Elementary Mission Language and Vocational School Town of Los Gatos Valley of the Moon Fire Mineral NASA AMES Exchange West Bay Sanitary District Mountain View Whisman Orange County Charter School Westborough Water District Orchard Pathway to Choices
Pacifica Pyramid Alternatives
Plum Valley Redwood City Education Foundation
Portola Valley Elementary San Jose Conservation Charter Red Bluff San Jose Conservation Corps
San Bruno Park Sociometrics
San Carlos Elementary South Tahoe Area Transit Authority San Lorenzo Valley Unified Stone Bridge Charter School
San Mateo County Office Work2future Foundation
Scotts Valley Unfied
Sequoia Union High
Sonoma Valley Unified
Soquel Elementary
Union School District
West County Agency (LEA)
Windsor Unified
Woodside Elementary
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section D - Partner, Supervisory and Staff Resumes
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 17
Angela Lee, CPA
Audit Manager
Angela received her Bachelor and Master of Science in Accounting from San Francisco State University. Angela has been working in public accounting since 2014 and has completed ten audit seasons. Since starting with C&A, she completed the financial and compliance audits for the entities listed below and has additional experience local government and non-profit industries not listed below.

Angela has audited over 80 local governments and nonprofits since 2014. Besides the standard control documentation and substantive testing required for GAAS audits, Angela has performed audits and prepared reports under GAGAS and Uniform Guidance. She has also audited Federal grants from various agencies, including HUD, Department of Justice, the Department of Education (Title I, Special Education) and much more.

Angela’s recent continuing professional education:

The following is a list of Niru’s clients over the past year:

GAGAS - Ethical Principles In Government Auditing Government Auditing GAGAS - Field Work and Reporting Standards Major Changes to Auditing Standards GAGAS - Field Work Standards For Financial Audits Limiting Auditor Liability GAGAS - General Field Work And Reporting Standards Auditor Communications: Critical New Requirements GAGAS - General Standards School Districts Conference
GAGAS - Reporting Standards For Financial Audits Governmental Accounting, Reporting, and Auditing Update GAGAS - Use and Application of GAGAS GASB Basic Financial Statements for State and Local Governments Description of Program/Training
Cities and Towns Special Districts School Districts/COE's Nonprofits and Other City of Albany Bay Area Water Services & Cons Antelope Elementary Bay Area Water Users Association City of Carmel-by-the-Sea Chico Area Recreation and Park District Burlingame Boys and Girls Clubs of Sonoma City of Del Rey Oaks Lake Canyon Community Services District Cabrillo Unified Center for Empowering Refugees City of Oroville Midpen Regional Open Space Cotati Rohnert Park Children of Grace City of Pacific Grove Ross Valley Sanitary District Hillsborough City Credo High School City of Point Arena Santa Clara Regional Open Space Las Lomitas Elementary Hidaya Foundation City of Rocklin South San Francisco Conf. Ctr. Lassen View Elementary Mission Charter City of Saratoga Stege Sanitary District Los Altos Elementary NASA AMES Exchange City of Marina Suasalito-Marin City Sanitation District Luther Burbank Pathway to Choices City of Suisun City The Cities Group Millbrae Elementary Peninsula Conflict Resolution Center Valley of the Moon Fire Orchard Redwood City Education Foundation West Bay Sanitary District Pacifica Stone Bridge Charter School Westborough Water District Red Bluff Work2future Foundation San Bruno Park Stone Bridge Charter School
San Carlos Elementary
San Lorenzo Valley Unified
San Mateo County Office
Sequoia Union High
Sonoma Valley Unified
Soquel Elementary
Union School District
West County Agency (LEA)
Woodside Elementary
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section D - Partner, Supervisory and Staff Resumes
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 18
Andrew Quintero
Senior Auditor
Andrew has successfully completed five seasons of governmental auditing. Andrew has performed tests of controls, substantive tests, state compliance testing and Federal compliance testing for various special districts and cities. He has been the Senior Auditor in-charge of clients such as the City of Yountville, City of Suisun City, Fairfield-Suisun Sanitary District and many more. Besides the standard control documentation and substantive testing required for GAAS audits, Andrew has performed audits and prepared reports under OMB Subpart F and the Single Audit Act. He has audited Federal grants from various agencies, including Special Education, National School Lunch, Title I, Department of Education grants and others.

Andrew’s recent continuing professional education:

The following is a list of Andrew’s clients:

GAGAS - Ethical Principles In Government Auditing Government Auditing GAGAS - Field Work and Reporting Standards Major Changes to Auditing Standards GAGAS - Field Work Standards For Financial Audits Limiting Auditor Liability GAGAS - General Field Work And Reporting Standards Auditor Communications: Critical New Requirements GAGAS - General Standards School Districts Conference
GAGAS - Reporting Standards For Financial Audits Governmental Accounting, Reporting, and Auditing Update GAGAS - Use and Application of GAGAS GASB Basic Financial Statements for State and Local Governments Description of Program/Training
Cities and Towns Special Districts School Districts/COE's Nonprofits and Other City of Oroville Bay Area Water Supply Conservation Agency Jefferson Union High School District Peninsula Conflict Resolution Center City of Pacific Grove Castro Valley Sanitary District John Swett Unified School District Redwood City Education Foundation City of Point Arena El Dorado Hills Community Services District Las Lomitas School District San Mateo County Exposition and Fair Association City of Rocklin Lake Canyon Community Services District Lassen View Union Elementary School District Sonoma Valley Hospital Foundation City of Saratoga Midpeninsula Regional Open Space District Los Altos School District The Moca Foundation City of Suisun City Purissima Hills Water District Luther Burbank School District The San Jose Library Foundation Town of Yountville Ross Valley Sanitary District Menlo Park City School District Santa Clara County Regional Open Space Auth Millbrae School District Sausalito-Marin City Sanitation District Mountain View Whisman School District Stege Sanitary District Napa Valley Unified School District Silicon Valley Clean Water Orchard School District
South San Fancisco Conference Center Pacifica School District The Cities' Group Red Bluff Joint Union High School District Valley of the Moon Fire District Red Bluff Union Elementary School District West Bay Sanitary District Roseland Elementary School District West Valley Sanitation District San Bruno Park School District Westborough Water District San Carlos School District
San Lorenzo Valley Unified School District
San Mateo Foster City School District
San Rafael City Schools
Santa Rosa City Schools
Woodside Elementary
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section D - Partner, Supervisory and Staff Resumes
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 19
Matthew Ojeda
Senior Auditor
Matthew graduated from the San Jose State University, with a B.S. in Accounting. Starting in public accounting in 2014, he has successfully completed seven seasons of governmental auditing. Matthew has performed tests of controls, substantive tests, state compliance testing and Federal compliance testing for various special districts and school districts. Besides the standard control documentation and substantive testing required for GAAS audits, Matthew has performed audits and prepared reports under OMB Subpart F and the Single Audit Act. He has audited Federal grants from various agencies, including Special Education, National School Lunch, Title I, Department of Education grants and others.

Matthew’s recent continuing professional education:

The following is a list of Matthew’s clients over the years:

GAGAS - Ethical Principles In Government Auditing Government Auditing GAGAS - Field Work and Reporting Standards Major Changes to Auditing Standards GAGAS - Field Work Standards For Financial Audits Limiting Auditor Liability GAGAS - General Field Work And Reporting Standards Auditor Communications: Critical New Requirements GAGAS - General Standards School Districts Conference
GAGAS - Reporting Standards For Financial Audits Governmental Accounting, Reporting, and Auditing Update GAGAS - Use and Application of GAGAS GASB Basic Financial Statements for State and Local Governments Description of Program/Training
Cities and Towns Special Districts School Districts/COE's Nonprofits and Other City of Del Rey Oaks Castro Valley Sanitary District Antelope Elementary Boys and Girls Club of Central Sonoma County City of Oroville Central Marin Sanitation Agency Burlingame Boys and Girls Clubs of Sonoma Valley City of Pacific Grove Fairfield-Suisan Sanitation District Cabrillo Unified Credo High School City of Point Arena Midpen Regional Open Space Auth Cotati Rohnert Park Diagnostics for the Real World City of Rocklin Oro Loma Sanitary District Golden Valley Unified Mission Language and Vocational School City of Saratoga Santa Clara Regional Open Space Auth Hillsborough City Morgan Hill Charter Foundation City of Suisun City Saratoga Cemetery District Las Lomitas Elementary Morgan Hill Charter School Town of Los Gatos Sausalito-Marin City Sanitation District Lassen View Elementary Orange County Charter School Silicon Valley Clean Water Los Altos Elementary Organic Farming Research Foundation The Cities Group Luther Burbank Proheatlh Homecare
West Valley Sanitation District Millbrae Elementary Redwood City Education Foundation Mission Preparatory School San Jose Conservation Charter Mountain View Whisman San Jose Conservation Corps
Napa Valley Unified San Mateo County Exposition Fair Association Orchard Sociometrics
Pacifica Work2future Foundation
Palo Alto Unified
Portola Valley Elementary
Red Bluff
Roseland Charter
Roseland Elementary
San Bruno Park
San Carlos Elementary
San Lorenzo Valley Unified
San Mateo County Office
San Mateo Foster City
Santa Rosa City School
Scotts Valley Unfied
Sequoia Union High
Sonoma Valley Unified
Soquel Elementary
South San Francisco Unified
Union School District
Woodside Elementary
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Section D - Partner, Supervisory and Staff Resumes
City of Sebastopol Proposal for Auditing Services
Chavan & Associates, LLP Page 20
Professional Education and Training
Our professionals complete 80 hours of continuing professional education every two years in auditing and accounting which includes at least 80 hours of governmental auditing and accounting training specific to local governments. We use a combination of in-house seminars, self-study and outside seminars sponsored by AICPA, GFOA, the California Education Foundation and other recognized groups.

All assigned staff meet the educational requirements for Governmental engagements as specified by the California Board of Accountancy, Federal General Accounting Office, Governmental Accounting Standards Board, and the AICPA as appropriate.

Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Attachments
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

REPORT ON THE FIRM’S SYSTEM OF QUALITY CONTROL
June 18, 2021
To the Partners of Chavan & Associates, LLP
and the Peer Review Committee
of the California Society of Certified Public Accountants We have reviewed the system of quality control for the accounting and auditing practice of Chavan & Associates, LLP in effect for the year ended December 31, 2019. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants (Standards).

A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as described in the Standards may be found at www.aicpa.org/prsummary. The summary also includes an explanation of how engagements are identified as not having been performed or reported in conformity with applicable professional standards, if any, are evaluated by a peer reviewer to determine a peer review rating.

Firm’s Responsibility
The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. The firm is also responsible for evaluating actions to promptly remediate engagements deemed as not performed or reported in conformity with professional standards, when appropriate, and for remediating weaknesses in its system of quality control, if any.

Peer Reviewer’s Responsibility
Our responsibility is to express an opinion on the design of the system of quality control and the firm’s compliance therewith based on our review.

Required Selections and Considerations
Engagements selected for review included engagements performed under Government Auditing Standards including compliance audits under the Single Audit Act.

As a part of our peer review, we considered reviews by regulatory entities as communicated by the firm, if applicable, in determining the nature and extent of our procedures. 200 E. Sandpointe Ave., Suite 600, Santa Ana, California 92707 Tel: 949-777-8800 • Fax: 949-777-8850
www.pungroup.cpa
Attachment A Agenda Item Number 11 Agenda Item Number 11 City Council Meeting Packet of March 4, 2025

To the Partners of Chavan & Associates, LLP
and the Peer Review Committee
of the California Society of Certified Public Accountants

Opinion
In our opinion, the system of quality control for the accounting and auditing practice of Chavan & Associates, LLP in effect for the year ended December 31, 2019, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficiency(ies) or fail. Chavan & Associates, LLP has received a peer review rating of pass.

Santa Ana, California
Attachment A Agenda Item Number 11 Agenda Item Number 11 City Council Meeting Packet of March 4, 2025

RESOLUTION NUMBER: XXXX-2025

CITY OF SEBASTOPOL

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEBASTOPOL AUTHORIZING A BUDGET AMENDMENT FOR THE

PROFESSIONAL AUDITING SERVICES WITH CHAVAN AND ASSOCIATES WHEREAS, the City of Sebastopol is legally required by the Government Accounting Standards Board (GASB) to issue annual financial reports that are audited by an external audit firm; and WHEREAS, in April 2017, Badawi and Associates was selected as the City’s external auditor through a Request for Proposals (RFP) process. The City entered into a contract with Badawi and Associates on April 4, 2017, for a duration of three years, with an option to extend for an additional two years. The City exercised this option, extending the contract until June 30, 2021; and
WHEREAS, in 2021, further extended contract until 2024 due to lack of capacity for new RFP; and WHEREAS, on August 15, 2024, the City of Sebastopol issued a request for proposals (RFP) for for a new auditor; and WHEREAS, the City issued a second RFP on October 7, 2024, and reached out to smaller audit firms, urging them to submit proposals. These firms cited capacity issues as the reason for not submitting proposals; and WHEREAS, after thorough discussion, the Budget Committee expressed concerns that the new pricing structure might be too burdensome for the City. The options considered were:

1. Contacting the current auditor to explore the possibility of a 1-year audit contract instead of the existing 3-year contract with 2 optional years.

2. Following up with the previously contacted firm to see if they are willing to submit a proposal.

3. As the Administrative Services Director scheduled to attend the California Society Municipal Finance Officers’ conference the week of February 18, 2025, to potentially solicit more audit firms to submit proposals during the exhibit hall sessions.

WHEREAS, based on the evaluation of all four proposals, staff considers and recommends Chavan & Associates, LLP to be the best available choice as the auditor for the City of Sebastopol for the next 3 years, with 2 optional years. This recommendation is based on their competitive pricing in municipal auditing; and WHEREAS, the FY24-25 adopted budget for audit services was $25,000 based on actual expenses for recent audits; and WHEREAS, the new audit firm cost is $29,000, which requires a budget adjustment of $4,000 in account 100-14-01-4220, bringing the total contract to $29,000.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Sebastopol does hereby approve a budget amendment of $4,000 identified in the account listed 100-14-01-4220.

The above and foregoing Resolution was duly passed, approved, and adopted at a meeting by the City Council on the 4th day of March, 2025, by the following vote:

I, the undersigned, hereby certify that the foregoing Resolution was duly adopted by the City of Sebastopol City Council by the following vote:

VOTE:

Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025

Ayes:

Noes:

Absent:

Abstain:

APPROVED:

Stephen Zollman, Mayor
ATTEST:

Mary Gourley, Assistant City Manager/City Clerk, MMC
APPROVED AS TO FORM:

Alex Mog, City Attorney
Agenda Item Number 11 Agenda Item Number 11
City Council Meeting Packet of March 4, 2025