ATTACHMENT A
Addendums and Sealed Bid Proposal for Badawi & Associates, Certified Public Accountants
PROJECT JM024-024 ADDENDUM #1 Page 1 of 3
JM024-024
PROFESSIONAL AUDITING SERVICES
September 13, 2023
ADDENDUM #1
This Addendum constitutes additional information and serves to clarify questions and issues. This will be considered to be part of the City of Victorville RFP for “PROFESSIONAL AUDITING SERVICES”, Project #JM024-024
1. QUESTION: How long have the current auditors been performing the audit for the City? ANSWER: The current firm is in its fifth contract year currently auditing FY23 financials, so we need to have a new agreement for the next 3-5 years.
2. QUESTION: If a member of the team has past experience with another firm on financial statement audits, such as the scope of work, does this satisfy the firm experience requirement?
ANSWER: Yes, as long as the experience is comparable to what they would have if working with your firm on financial statement audits.
3. QUESTION: What is the desired timeline for:
a) Interim: Between late May and mid-July for completion. Generally two weeks of in-person or remote in-depth review and interaction with staff and then follow up. b) Fieldwork: Start at the beginning of October and have draft reports by mid- December. Approximately 10 weeks.
c) Draft Reports: Mid-December.
d) Final Reports: Late January (after audit committee review meeting).
4. QUESTION: How many auditors and how many weeks wer e the auditors on -site for both interim and year-end fieldwork?
ANSWER: Largely, it has been 2- 3 auditors. Recent audits primarily remote with a few in- person visits for meetings or audit of confidential materials and inventory observation.
5. QUESTION: What was the prior year’s annual audit fee(s)? Please provide a breakdown by the report.
ANSWER: FY23 Financial Statement Audit Fees as follows: ACFR preparation $6,788; Single Audit Report $14,492; City of Victorville Financial and Compliance Reporting $70,485; Victorville Water District Financial and Compliance Reporting $22,536; and Southern California Logistics Airport Authority Financial and Compliance Reporting $30,652.
6. QUESTION: Are there any new services requested in this RFP that w ere not included in the prior year’s audit fee?
ANSWER: No, all requested services remain the same.
7. QUESTION: If required, who does the State Controller’s Financial Transaction Report preparation and submission? If the auditors, how much were the last year’s fees?
PROJECT JM024-024, ADDENDUM #1 Page 2 of 3
ANSWER: The SCO report is currently prepared by a separate consultant.
8. QUESTION: How many major programs were tested each year for the Single Audit? If applicable, please provide the most recent copy of the report.
ANSWER: Annual average testing is one or two major programs. In addition, the previous three years there has been testing of two major programs annually for the COVID funding. See attached Single Audit report.
9. QUESTION: How many journal entries were proposed by the auditors? Were there any findings?
ANSWER: Over the two prior years there were more than 40, but in prior years there were less than 20. Findings for the audit are attached.
10.QUESTION: Were there any material adjustments made by the auditors in connection with the examination of the prior year’s Financial Statements? ANSWER: Yes, see attached findings report.
11.QUESTION: Has the City entered into any Major Contracts, Studies, and/or Started any Projects in the Current Fiscal Year that would not be reflected in the Prior Year Financial Statements?
ANSWER: As a full service city, the City is always entering into studies and starting projects.
However, I do not believe any of these are out of the ordinary.
12.QUESTION: Any New Debt Issuances in the Current Fiscal Year? ANSWER: No.
13.QUESTION: Is the City involved in any litigation not included in the Prior Year Financial Statements?
ANSWER: None that I am aware of.
14.QUESTION: Are there any other Major Changes in the Current Fiscal Year that would affect the operations of the City?
ANSWER: None.
15.QUESTION: How did you measure the quality of the audit performed? ANSWER: Fair; auditor merged with another firm mid- contract and there were definite changes occurring as a result.
16.QUESTION: What audit areas, in your opinion, were cumbersome? ANSWER: Testing and reviewing implementation of the new GASB regulations for GASB87 and GASB96 as well as the additional requirements of testing in the single audit for the COVID funding received.
17.QUESTION: What efficiencies would you like to see in the audit of the City’s financials? ANSWER: Quick turnaround for review time on both sides (auditor and city), thorough upfront PBC lists to minimize questions and responses back and forth continuously, easy exchange of files, avoidance of duplicate request s of paperwork/documentation, along with providing the same staff (continuity) if it is possible.
18.QUESTION: Will digital proposals be accepted in lieu of hard copies? ANSWER: No, digital proposals will not be accepted in lieu of hard copies. Please follow the instructions in Section 2 of the RFP regarding proposal submittals.
19.QUESTION: Have there been any disagreements with your prior auditor? If so, please explain.
ANSWER: No disagreements.
PROJECT JM024-024, ADDENDUM #1 Page 3 of 3
20.QUESTION: What has typically been the most challenging aspect(s) of the audit process? ANSWER: Long turn -around time for reviews, repeated requests for same material and additional requests that should have been included in the original PBC requests.
PROPOSER ACKNOWLEDGEMENT
Please confirm receipt of this Addendum #1, JM024-024, by attaching the signed acknowledgment to your proposal submittal. Failure to acknowledge receipt of this addendum may result in your proposal being rejected as non-responsive. The undersigned acknowledges- receipt of ADDENDUM #1:
Receipt acknowledged and conditions agreed to this _______ day of ___________2023
Proposer: ________________________________________________________________
By: ___________________________________________________________________
CITY APPROVAL:
__________________________________
Kim Scott
Finance Manager
CITY OF VICTORVILLE
JM024-024
PROFESSIONAL AUDITING SERVICES
October 4, 2023
ADDENDUM #2
This Addendum constitutes additional information and serves to clarify questions and issues. This will be considered to be part of the City of Victorville RFP for “PROFESSIONAL AUDITING SERVICES”, Project# JM024-024.
1. QUESTION: What is the reason that you are considering changing the auditor? ANSWER: Answered in Addendum #1, Question #1.
2. QUESTION: Will your prior auditors be invited to bid? ANSWER: The RFP is posted on the City’s website and any firm wishing to participate in this RFP, can do so.
3. QUESTION: How many staff did the audit team consist of in the past and when did the auditors come on site?
ANSWER: Answered in Addendum #1, Question #4.
4. QUESTION: Is the scope of the services requested the same as last year? ANSWER: Answered in Addendum #1, Question #6.
5. QUESTION: Have there been any changes in your accounting system or software since last year?
ANSWER: Our accounting system is the same; however, we implemented Debtbook to track our leases and SBITAs.
6. QUESTION: Do you expect to have any retirement or replacement of key employees? ANSWER: Within the next five years, we expect there to be some retirements or replacements. We currently have a few vacancies.
7. QUESTION: How many weeks of fieldwork did your prior auditors require for your last audit? ANSWER: It is hard to say since they were remote the entire time since COVID. Prior in-person audits required one week at interim and four for final.
8. QUESTION: How many weeks/hours were spent by the prior auditors in the field?
ANSWER: It is hard to say since they were remote the entire time since COVID. Prior in-person audits required one week at interim and four for final.
9. QUESTION: When did the on-site fieldwork take place?
ANSWER: Interim on-site was May or June and final was October/early November.
10. QUESTION: What were the prior year audit fees and can you please breakdown by components?
ANSWER: Answered in Addendum #1, Question #5.
11. QUESTION: What is the current year budget for auditing services?
ANSWER: Answered in Addendum #1, Question #1.
12. QUESTION: When will a closed trial balance be available for the audit with all closing entries recorded?
ANSWER: Answered in Addendum #1, Question #3.
13. QUESTION: Is there anything specific that you are looking for with successor auditors? ANSWER: Answered in Addendum #1, Question #17.
14. QUESTION: What are the things you liked and did not like about your current auditors? ANSWER: Answered in Addendum #1, Question #17 and Question #20.
15. QUESTION: What are the things you liked and did not like in the audit process followed by your current auditors?
ANSWER: Answered in Addendum #1, Question #15, #16, #17, and #20.
16. QUESTION: How many adjusting entries did you have last year? ANSWER: Answered in Addendum #1, Question #9.
17. QUESTION: Do you expect to have a single audit this year? ANSWER: We anticipate a single audit every year.
18. QUESTION: Would the City be open to having the majority of the audit performed remotely?
ANSWER: Yes.
19. QUESTION: What was the City’s experience with remote auditing? Would you suggest any changes?
ANSWER: We basically had no issues with remote auditing as I think the key is communication between the auditors and key staff.
20. QUESTION: Are the majority of supporting documentation maintained electronically (e.g. PDF), such as checks, vendor invoices, cash receipts, timecards, personnel files.
ANSWER: The majority of documents are electronic. We are on an exception-based time entry system for full- time staff. All personnel items would need to be reviewed on-site to maintain confidentiality requirements.
21. QUESTION: Do you allow your auditors to access the City’s financial software remotely?
ANSWER: Yes.
22. QUESTION: Does the City prepare its own State Controller’s Report?
ANSWER: Answered in Addendum #1, Question #7.
23. QUESTION: The City’s FY 2022 ACFR was issued in April 2023. Could you please describe any reasons for the delay?
ANSWER: There was a delay for the implementation of GASB 87 as a result of the large amount of leases and complex agreements as well as increased grant testing requirements with COVID grants. Ad ditionally, the delay caused additional time as auditors had other clients scheduled and worked on our audit in their spare time.
PROPOSER ACKNOWLEDGEMENT
Please confirm receipt of this Addendum #2, JM024-024, by attaching the signed acknowledgement to your proposal submittal. Failure to acknowledge receipt of this addendum may result in your proposal being rejected as non- responsive. The undersigned acknowledges receipt of ADDENDUM #2.
Receipt acknowledged and conditions agreed to this __________ day of ___________2023
Proposer:__________________________________________________________________
By:_______________________________________________________________________
CITY APPROVAL:
_____________________________
Kim Scott, Finance Manager
EXHIBIT B, COST PROPOSAL/FEE SCHEDULE, PROJECT JM24-024 20/Consultant/Professional Services Provider Agreement/Badawi & Associates, CPAs/Project JM24-024 EXHIBIT B, COST PROPOSAL/FEE SCHEDULE, PROJECT JM24-024 21/Consultant/Professional Services Provider Agreement/Badawi & Associates, CPAs/Project JM24-024 EXHIBIT B, COST PROPOSAL/FEE SCHEDULE, PROJECT JM24-024 22/Consultant/Professional Services Provider Agreement/Badawi & Associates, CPAs/Project JM24-024 EXHIBIT B, COST PROPOSAL/FEE SCHEDULE, PROJECT JM24-024 23/Consultant/Professional Services Provider Agreement/Badawi & Associates, CPAs/Project JM24-024 EXHIBIT B, COST PROPOSAL/FEE SCHEDULE, PROJECT JM24-024 24/Consultant/Professional Services Provider Agreement/Badawi & Associates, CPAs/Project JM24-024 EXHIBIT B, COST PROPOSAL/FEE SCHEDULE, PROJECT JM24-024 25/Consultant/Professional Services Provider Agreement/Badawi & Associates, CPAs/Project JM24-024 EXHIBIT B, COST PROPOSAL/FEE SCHEDULE, PROJECT JM24-024 26/Consultant/Professional Services Provider Agreement/Badawi & Associates, CPAs/Project JM24-024 EXHIBIT B, COST PROPOSAL/FEE SCHEDULE, PROJECT JM24-024 27/Consultant/Professional Services Provider Agreement/Badawi & Associates, CPAs/Project JM24-024 EXHIBIT B, COST PROPOSAL/FEE SCHEDULE, PROJECT JM24-024 28/Consultant/Professional Services Provider Agreement/Badawi & Associates, CPAs/Project JM24-024 EXHIBIT B, COST PROPOSAL/FEE SCHEDULE, PROJECT JM24-024 29/Consultant/Professional Services Provider Agreement/Badawi & Associates, CPAs/Project JM24-024 EXHIBIT B, COST PROPOSAL/FEE SCHEDULE, PROJECT JM24-024 30/Consultant/Professional Services Provider Agreement/Badawi & Associates, CPAs/Project JM24-024 EXHIBIT B, COST PROPOSAL/FEE SCHEDULE, PROJECT JM24-024 31/Consultant/Professional Services Provider Agreement/Badawi & Associates, CPAs/Project JM24-024 EXHIBIT B, COST PROPOSAL/FEE SCHEDULE, PROJECT JM24-024 32/Consultant/Professional Services Provider Agreement/Badawi & Associates, CPAs/Project JM24-024 EXHIBIT B, COST PROPOSAL/FEE SCHEDULE, PROJECT JM24-024 33/Consultant/Professional Services Provider Agreement/Badawi & Associates, CPAs/Project JM24-024