HomeMy WebLinkAbout05/11/2005 B A K E R S F I E L D
Mike Maggard, Chair
Irma Carson
Harold Hanson
Staff: John W. Stinson
SPECIAL MEETING NOTICE
BUDGET AND FINANCE COMMITTEE
of the City Council - City of Bakersfield
Wednesday, May 11, 2005- 1:15 p.m.
City Manager's Conference Room, Suite 201
Second Floor - City Hall, 1501 Truxtun Avenue, Bakersfield, CA
AGENDA
1. ROLL CALL
2. ADOPT FEBRUARY 9, 2005 AGENDA SUMMARY REPORT
3. PUBLIC STATEMENTS
4. DEFERRED BUSINESS*
A. Review andCommitteerecommendationonCi~AuditorPmposals-Klimko
5. NEW BUSINESS
A. Staff report and Committee recommendation on requests for funding - Stinson
a. Bakersfield Symphony Orchestra
b. Valley Fever Vaccine Project of the Americas
B. Committee discussion and recommendation regarding setting next meeting
date/meeting schedule - Stinson
6. COMMITTEE COMMENTS
7. ADJOURNMENT
B ·A K E R S F I .E L D
Staff: John W. Stinson Irma Carson
For: Alan Tandy, City Manager Harold Hanson
AGENDA SUMMARY REPORT
SPECIAL MEETING
BUDGET AND FINANCE COMMH-rEE
Wednesday, February 9, 2005 · 3:00 p.m.
City Manager's Conference Room - City Hall
1. ROLL CALL
Called to Order at 3:05 p.m.
Present: Councilmembers Mike Maggard, Chair; Irma Carson and Harold Hanson
2. ADOPT DECEMBER 17, 2004 AGENDA SUMMARY REPORT
Adopted as submitted.
3. PUBLIC STATEMENTS
4. DEFERRED BUSINESS
A. Staff report and Committee recommendation regarding City Auditor
~Rotation Policy
Finance Director Gregory Klimko explained there was a request from the
Committee to check the feasibility of rotating auditing firms, due to what has been
happening in the private world of finance with negative news reports regarding
auditing firms.
The City has had the same auditing firm for 15 years (three 5-year contracts). The
Finance Director recommended the Committee consider a policy to rotate auditors
no less than once every five years. Also, when the City undertakes a competitive
process for the selection of independent auditors, the current auditor shall be
excluded from the process for the upcoming audit term.
DRAFT
AGENDA SUMMARY REPORT
BUDGET AND FINANCE COMMITTEE MEETING
Wednesday, February 9, 2005
Page - 2 -
The Finance Director explained cost is always an issue; however, those in the
professional accounting area of finance do not believe cost should be the primary
issue in the selection of an independent auditor, but it should be the firm's ability to
perform a quality audit. Changing auditors would give the City a new look from a
different prospective and might bring something to light to provide an area of
additional improvement.
The Committee reviewed a draft policy. Committee Member Hanson made a
motion to approve staff's recommendations on rotating auditing firms and to
forward the policy to the City Council at its February 23rd meeting. The Committee
unanimously approved the motion.
Committee Chair Maggard requested staff to thank the current auditors for their
years of service as they have done a good job for the City.
5. NEW BUSINESS
A. Staff report and Committee recommendation on Fiscal Year 2005-06
Community. Development Block Grant (CDBG), Home Investment
Partnerships (HOME), and Emergency Shelter Grant (ESG) Annual
Spending Plan
Economic Development Director Donna Kunz provided an overview of' the
memorandum and attachments included in the Committee packet. Under the U.S.
Department of Housing and Urban Development (HUD), the City receives annual
entitlements to improve Iow-income.neighborhoods. The City'.s entitlements for FY
2005-06 are: $3,744,782 for Community Development Block Grant (CDBG) funds;
$1,687;189 for the HOME Investment Partnership Program; $45,164 for American
Dream DoWnpayment Initiative; and $143,845 for the Emergency Shelter Program.
Total available funds from HUD for 2005-06 are $5,620,980.
Based'. on the information from HUD on the funding resources available for
2005-06, the Economic Development Director provided a review of the proposed
spending plan. FOllowing Council direction from prior years and in keeping with the
goals and objectives of the Council, staff incorporate a continuance of public safety
and street improvements in the spending plan.
The Committee reviewed a list of streets for the proposed CIP in Public Works for
street improvements totaling $700,000. These improvements included resurfacing,
sidewalks and reconstruction of streets in HUD eligible areas in Wards 3, 6, and 7.
City Manager Alan Tandy eXplained the spending programs are subject to the
President's proposed budget and proposed cuts to the 'Community Development
Block Grant funding. Staff had planned to propose a Section 108.loan to be repaid
DRAFT
AGENDA SUMMARY REPORT
BUDGET AND FINANCE COMMITTEE MEETING
Wednesday, February 9, 2005
Page - 3 -
by CDBG funds to fully fund building the SE Fire Station, but-have not moved
forward' due to the uncertainty of CDBG being funded in future years to allow for
repayment of the loan.
The City Manager stated he challenged Donna Kunz to come up with a secondary
plan to complete-the SE Fire Station not dependent on CDBG funds to repay a
Section 108 loan.
The-City Manager explained Donna Kunz did come up with a plan to accelerate the
completion of the Fire Station and some balancing of land acquisition activities in
the Redevelopment Area along California Avenue. Over a two-year period apply
for a Section 108 loan and using the.Section 108 .loan to leverage a BEDI grant,
apply fOr a Brownfields Economic Development Initiative (BEDI) grant. The BEDI
grant cannot pay for the construction of the Fire Station but can be used to pay the
debt service on the Section 108 loan for a couple of years. This action would fully
fund construction of the Fire Station and the land acquisition activities along
California. Avenue.
The secondary financing plan shows even if the CDBG entitlement is canceled in
its entirety, the City can repay both the old Section 108 loan and the new Section
108 loan from SE Redevelopment Project Area income. The design work for the
Fire Station could move forward now. Land acquisition was paid with
Redevelopment funding. When the Section 108 loan is secured, the construction
($3.6 million) could go out to bid with completion of the Fire Station projected in FY
2006-07. A Police sub-station is proposed to be included to replace the one
located by White on Hughes Lane.
Economic Development Director Donna Kunz provided an overview of a three-year
cashflow plan. Staff did not want to just do a Section 108 loan and use the
redevelopment tax increment for that purPose as the tax increment is vital for
redevelopment projects. Staff proposed trying for a competitive grant called
Brownfields Economic Development Initiative (BEDI). The BEDI grant could be
used to debt service the Section 108'loan'for a couple of years, while building up
the commercial development activities to bring in tax increment for more projects.
The proposed plan will finance the current condemnation obligations, the California
Avenue property acquisitions, and construction of the Fire Station. Also, it will pay
the new and the old Section 108 debt service should the CDBG not be funded in
future years.
Committee Chair Maggard expressed the plan seemed like a good way to get the
Fire Station built, but asked staff to provide a more detailed timeline for completion
of the station in the report to Council. : '
D AFT
AGENDA SUMMARY REPORT
BUDGET AND FINANCE COMMI'i-rI=E MI=ETING
Wednesday, February 9, 2005
Page - 4 -
Committee Member Hanson spoke regarding the high cost of building fire stations.
He expressed the City should have high quality, efficient stations but asked staff to
closely monitor the spending for decorative exteriors.
Fire Chief Ron Fraze explained the developer provided money to .make the new
stationin the southwest attractive to fit in with their development.
Committee Member Carson requested-staff to talk with developers in the SE area
about donating money towards building the fire station as they did for the new fire
station in the southwest.
Committee Member Carson made a motion the Committee accept staff's
recommendations on the. CDBG, HOME and ESG Action Plan for FY 2005-06 and
the Committee recommend moving forward with staff's SE Redevelopment
Financing Plan (applying for a Section 108 loan and BEDI grant) for construction of
the Fire Station and property acquisition in the Redevelopment Area along
California Avenue. The Committee unanimously approved 'the motion and
requested staff to forward the recommendations to the City Council.
B. Staff report and Committee recommendation regarding Audit Reports for
fiscal year ending June 30, 2004
· Comprehensive,Annual Financial Report (CAFR)
· Independent Auditors Report - Single Audit Report - Schedule of Federal
Expendituresfor the City of Bakersfield
· Independent Auditors Report - Compliance with Contractual Requirements relative
to the Bakersfield Subregional Wastewater Management Plan
· Independent Auditors Report on Apprepriations Limit Worksheet (GANN Limit) of'
the City of Bakersfield
· Independent Auditors Report - Bakersfield Centennial Garden, Convention Center
& Ice Sports Center
Finance Director Gregory Klimko stated there were no management recommendations or
negative findings in -the audits. There was a comment regarding the Bakersfield
Subregional Wastewater Management Plan arriving two days late.
Committee Member. Hanson made a motion to accept the audits. Th~ Committee
unanimously approved the motion and forwarding a report to the City Council.
6. COMMI'R'EE COMMENTS
7. ADJOURNMENT
The meeting adjourned at 4:25 p.m.
DRAFT
AGENDA SUMMARY REPORT
BUDGET AND FINANCE COMMITTEE MEETING
Wednesday, February 9, 2005
Page - 5 -
Attendance: Staff: City Manager Alan Tandy; Assistant City Manager John W. Stinson;
City Attorney Ginny Gennaro; Finance Director Gregory Klimko; Fire Chief Ron Fraze;
Assistant Finance Director Nelson Smith; Economic Development Director Donna Kunz;
Community Development Coordinator George Gonzales; Police Captain Tim Taylor;
Economic Community Development Business Manager Rhonda Barnhard; General
Manager Jim Foss and Director of Finance Steve Womack, Centennial Garden/SMG;
Others: Jan Sublett, Alliance Against Family Violence; Daniel Gorman, Executive
Director, Bakersfield Rescue Mission; Diana Campbell Rice, Bakersfield Homeless
Center; and James Burger, reporter, The Bakersfield Califomian
cc: Honorable Mayor and City Council
S:~JOHN~Council Committees\O5Budget& Finance~)5febO9summ ary.doc
-COST PROPOSAL TO AUDIT THE
CITY OF BAKERSFIELD
FOR THE FISCAL YEARS ENDED JUNE 30, 2005 WITH
OPTIONAL YEARS 2006 THROUGH 2009
M. GREEN AND COMPANY LLP
CERTIFIED PUBLIC ACCOUNTANTS
3900 W. CALDWELL AVENUE
VISALIA, CA 93277
CONTACT PERSON: JUSTIN MORALES, JR., CPA
ENGAGEMENT PARTNER
PHONE: (559) 627-3900
E-MAIL: jmoralesC, m.q reenc pas.com
COPY
M. Green and Company LLP
CERTIFIED P UBLIC ACCOUNTANTS
lARRY W. AYEI~, C.P.A.
MARIA D, BORGF..q, C.P.A.
r~vn~ M. o~, C.a.A. April 4, 2005
wM. K~s~, c.~.^. City of Bakersfield
~.=~ M. ~E, c.~.^. Finance Division - Attn: Nelson K. Smith
~Y~ M. L~M~E, c.~.^. 1501'Truxtun Avenue.
A~N S. MOO,Z, C.P.^. Bakersfield, CA 93301
JUSTIN MORALF~, JR., C.P.A.
~,N~r. B. NVN~S, C.P.A.' Dear Mr. Smith:
GIUSEPPE SC. ALIA, C.P.A.
~N~r.W.W.,TB,~LC.~.A. M. Green and Company LLP is pleased to submit our dollar cost bid proposal to
provide annual audit services to the City of Bakersfield for the fiscal years ending June 30,
2005 with optional years 2006 through 2009. I certify that as Partner of the firm, I am entitled
to represent the firm, empowered to submit the bid, and authorized to sign a contract with
· YN~rt~^. o^,c=, c.~.^, the City of Bakersfield.
NANCY R. TUT$CHULTE, C.P.A. Our estimated audit personnel hours and alt h~clusive maximum fees for A FULL
SCOPE AUDIT for the fiscal year ending lune 30, 2005 is 513 hours and $ 43,268. Our
estimated audit personnel hours and all inclusive maximum fees for ALTERNATE A AUDIT
ROBERT L. BANDY,co,,~,~C.P.A. for the fiscal year ending June 30, 2005 is 493 hours and $ 41, 928. A summary schedule of
~A~S o. DWYER, C.a.A. professional fees and expenses is presented on page 1 with corresponding detail schedules by
co.,~,, classification of personnel, hourly rate and estimated hours.
DONALD G. GORDON, C.P.A.
co,~,=, Should the hours we incur be less than those proposed for the annual audit, we
MAURICEM. GR.EEN, C.P.A.co~U/iant reserve the right to bill our all-inclusive maximum fees. Conversely, if our incurred hours
exceed our proposed hours, we understand that our fees shall not exceed the proposed
JAME~ R. JOHNSON, C,P.A.
Co~,,,,,~,~ amount. The proposed fees are based on the assumption that there will not be any major
~o~ ^. ~,, C.a.A. changes in scope of the audit engagement. If the scope of the audit is expanded, our fees will
co,~,,~,, be adjusted accordingly.
CRARLES L. SOU~, C.P.A.
co,,,,,,~ We appreciate the opportunity to serve the City of Bakersfield. Should you have any
~T,*. woo.,~Y. C.a.A. questions regarding this cost proposal, please contact me at (559) 627-3900.
Consu/mm
Very truly yours,
M. GREEN AND COMPANY LLP
Certified Public Accountants
Visalia
Hanford Justin Morales, Jr., CPA
Dinuba Parmer
3900 West Caldwell · Post Office Box 3330 · Visalia, California 93278-3330 · Telephone (559) 627-3900 ° FAX (559) 625-1606
E-mail: visalia@rngreencpas, com· Web Site: www. mgreencpas, com
! SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
~ FOR THE AUDIT OF THE FISCAL YEAR 2005 FINANCIAL STATEMENTS
COMBINING SCHEDULE ALL SERVICES
.,~
FULL SCOPE AUDIT
TOTAL
PRICE
SERVICE TO BE PROVIDED SCHEDULE FY 2.004-2005
City CAFR and Management Letter SCHEDULE A PAGE 2 $29,075
Redevelopment Agency Audit-Annual Financial Report SCHEDULE B PAGE 3 $4,407
Public Finance Authority- Annual Financial Report SCHEDULE C PAGE 4 $2,978
~ Complianc_e Report
Single Audit SCHEDULE D PAGE 5 $3,935
,. Redevelopment Agency SCHEDULE E PAGE 6 $1,687
; Waste Water Management Plan SCHEDULE F PAGE 7 $1,186
TOTAL ALL INCLUSIVE MAXIMUM PRICE FOR FY 2004-2005 AUDIT PAGE 8 43,268
ALTERNATE A
TOTAL
SERVICE TO BE PROVIDED SCHEDULE PRICE
FY 2004~2005
City CAFR and Management Letter SCHEDULE A PAGE 9 $27,735
Redevelopment Agency Audit - Annual Financial Report SCHEDULE B PAGE 10 $4,407
Public Finance Authority- Annual Financial Report SCHEDULE C PAGE 11 $2,978
Compliance Report
Single Audit SCHEDULE D PAGE 12 $3,935
Redevelopment Agency SCHEDULE E PAGE 13 $1,687
Waste Water Management Plan SCHEDULE F PAGE 14 $1,186
TOTAL ALL INCLUSIVE MAXIMUM PRICE FOR FY 2004-2005 AUDIT PAGE 15 41,928
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THE FISCAL YEAR 2004-05 FINANCIAL STATEMENTS
SUPPORTING SCHEDULE A
CITY CAFR AND MANAGEMENT LETTER
TOTAL
CLASSIFICATION STANDARD QUOTED ESTIMATED PROPOSED
OF PERSONNEL HOURLY RATES HOURLY RATES HOURS FEES
Partner-in-Charge $158 $126 50 $6,300
Technical Review Partner $158 $126 10 $1,260
Manager 126 101 75 7,575
Senior Auditor 96 77 80 6,160
Staff Auditor 71 57 120 6,840
Clerical 43 34 10 340
Sub Total 345 $28,475
Out-of-pocket Expense:
Transportation $600
TOTAL ESTIMATED HOURS/
TOTAL PROPOSED FEES FOR CAFR AND MANAGEMENT LETTER 345 $29,075
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THE FISCAL YEAR 2004-05 FINANCIAL STATEMENTS
SUPPORTING SCHEDULE B
REDEVELOPMENT AGENCY AUDIT - ANNUAL FINANCIAL REPORT
TOTAL
CLASSIFICATION STANDARD QUOTED ESTIMATED PROPOSED
OF PERSONNEL HOURLY RATES HOURLY RATES HOURS FEES
Partner-in-Charge $158 $126 6 $756
Technical Review Partner $158 $126 2 $252
Manager 126 .101 10 1,010
Senior Auditor 96 77 15 1,155
Staff Auditor 71 57 14 798
Clerical 43 34 4 136
Sub Total $4,107
Out-of-pocket Expense:
Transportation $300
TOTAL ESTIMATED HOURS/
TOTAL PROPOSED FEES FOR REDEVELOPMENT AGENCY AUDIT 51 $4,407
SCHEDULE OFPROFESSIONALFEES AND EXPENSES
FORTHEAUDITOFTHEFISCALYEAR2004-0$FINANCIALSTATEMENTS
SUPPORTING SCHEDULE C
PUBLIC FINANCEAUTHORITY-ANNUALFINANClALREPORT
TOTAL
CLASSIFICATION STANDARD QUOTED ESTIMATED PROPOSED
OF PERSONNEL HOURLY RATES HOURLY RATES HOURS FEES
Partner-in-Charge $158 $`126 4 $504
Technical Review Partner $158 $'126 1 $126
Manager 126 101 10 1,010
Senior Auditor 96 77 7 539
Staff Auditor 71 57 9 513
Clerical 43 34 4 136 .
Sub Total $2,828
Out-of-pocket Expense:
Transportation $150
TOTAL ESTIMATED HOURS/
TOTAL PROPOSED FEES FOR PUBLIC FINANCE AUTHORITY 35 $2,978
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THE FISCAL YEAR 2004-05 FINANCIAL STATEMENTS
SUPPORTING SCHEDULE D
COMPLIANCE REPORT - SINGLE AUDIT
TOTAl..
CLASSIFICATION STANDARD QUOTED ESTIMATED PROPOSED
OF PERSONNEL HOURLY RATES HOURLY RATES HOURS FEES
Partner-in-Charge $158 $126 6 $756
Technical Review Parther $158 $126 2 $252
Manager 126 101 9 909
Senior Auditor 96 77 14 1,078
Staff Auditor 71 57 10 570
Clerical 43 34 5 170
Sub Total $3,735
Out-of.pocket Expense:
Transportation $200
TOTAL ESTIMATED HOURS/
TOTAL PROPOSED FEES FOR COMPLIANCE SINGLE AUDIT 46 $3,935
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THE FISCAL YEAR 2004-05 FINANCIAL STATEMENTS
SUPPORTING SCHEDULE E
COMPLIANCE REPORT REDEVELOPMENT AGENCY
TOTAL
CLASSIFICATION STANDARD QUOTED ESTIMATED PROPOSED
OF PERSONNEL HOURLY RATES HOURLY RATES HOURS FEES
Partner-in-Charge $158 $126 2 $252
Technical Review Partner $158 $126 1 $126
Manager 126 101 3 303
Senior Auditor 96 77 2 154
Staff Auditor 71 57 12 684
'Clerical 43 34 2 68
Sub Total $1,587
Out-of-pocket Expense:
Transportation $100
TOTAL ESTIMATED HOURS/
TOTAL PROPOSED FEES REDEVELOPMENT AGENCY 22 $1,687
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
! FOI~ THE AUDIT OF THE FISCAL YEAR 2004-05 FINANCIAL STATEMENTS
,, SUPPORTING SCHEDULE F
COMPLIANCE REPORT - WASTE WATER MANAGEMENT PlaN
TOTAL
CLASSIFICATION STANDARD QUOTED ESTIMATED PROPOSED
OF PERSONNEL HOURLY RATES HOURLY RATES HOURS FEES
Partner-in-Charge $158 $126 2 $252
Technical Review Partner $158 $126 0 $0
Manager '~26 101 4 404
Senior Auditor 96 77 3 231
Staff Auditor 71 57 3 171
Clerical 43 34 2 68
Sub Total $1,126
Out-of-pocket Expense:
Transportation $60
TOTAL ESTIMATED HOURS/
TOTAL PROPOSED FEES FOR WASTE WATER MGT PLAN 14 $1,186
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THEFISCALYEAR2004-05FINANCIALSTATEMENTS
SUPPORTING SCHEDULETOTAL
ALLINCLUSIVE MAXIMUM FEES
TOTAL
CLASSIFICATION STANDARD QUOTED ESTIMATED PROPOSED
OF PERSONNEL HOURLY RATES HOURLY RATES HOURS FEES
Partne[-in-Charge $158 $126 70 $8,820
Technical Review Partner $158 $126 16 $2,016
Manager 126 101 · 111 11,211
Senior Auditor 96 77 121 9,317
Staff Auditor 71 57 !68 9,576
Clerical 43 34 27 918
Sub Total $41,858
Out-of-pocket Expense:
Transportation $1,410
TOTAL ESTIMATED HOURS/
TOTAL PROPOSED FEES FOR COMBINED SCHEDULE 513 $43,268
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THE FISCAL YEAR 2004-05 FINANCIAL STATEMENTS
SUPPORTING SCHEDULE A
CITY CAFR AND MANAGEMENT LETTER
TOTAL
CLASSIFICATION STANDARD QUOTED ESTIMATED PROPOSED
OF PERSONNEL HOURLY RATES HOURLY RATES HOURS FEES
Partner-in-Charge $158 $126 50 $6,300
Technical Review Partner $158 $126 10 $1,260
Manager 126 101 75 7,575
Senior Auditor 96 77 70 5,390
Staff Auditor 71 57 110 6,270
Clerical 43 34 10 340
Sub Total 325 $27,135
Out-of-pocket Expense:
Transportation $600
TOTAL ESTIMATED HOURS/
TOTAL PROPOSED FEES FOR CAFR AND MANAGEMENT LETTER 325 $27,735
SCHEDULE OF PROFESSIONAL FEES AND' EXPENSES
FOR THE AUDIT OF THE FISCAL YEAR 2004-05 FINANCIAL STATEMENTS
SUPPORTING SCHEDULE B
REDEVELOPMENT AGENCY AUDIT - ANNUAL FINANCIAL REPORT
TOTAL
CLASSIFICATION STANDARD QUOTED ESTIMATED PROPOSED
OF PERSONNEL HOURLY RATES HOURLY RATES HOURS FEES
Partner-in-Charge $158 $126 6 $756
, Technical Review Partner $158 $126 2 $252
Manager 126 101 10 1,010
? Senior Auditor 96 77 15 1,155
Staff Auditor 71 57 14 798
Clerical 43 34 4 136
'~ Sub Total $4,107'
" Out-of-pocket Expense:
Transportation $300
TOTAL ESTIMATED HOURS/
TOTAL PROPOSED FEES FOR REDEVELOPMENT AGENCY AUDIT 51 $4,407
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THE FISCAL YEAR 2004-05 FINANCIAL STATEMENTS
SUPPORTING SCHEDULE C.
PUBLIC FINANCE AUTHORITY - ANNUAL FINANCIAL REPORT
TOTAL
CLASSIFICATION STANDARD QUOTED ESTIMATED PROPOSED
OF PERSONNEL HOURLY RATES HOURLY RATES HOURS FEES
· Partner-in-Charge $158 $126 4 $504
: Technical Review Partner $158 $126 1 $126
Manager 126 101 10 1,010
~ Senior Auditor 96 77 7. 539
'~ Staff Auditor 71 57 9 513
Clerical 43 34 4 136
~ Sub Total $2,828
Out-of-pocket Expense:
Transportation $150
TOTAL ESTIMATED HOURS/ ,
TOTAL PROPOSED FEES FOR PUBLIC FINANCE AUTHORITY 35 $2,978
SCHEDULE OF PROFESSIONAL FEES AND 'EXPENSES.
FOR THE AUDIT OF THE FISCAL YEAR 2004-05 FINANCIAL STATEMENTS
SUPPORTING SCHEDULE D
COMPLIANCE REPORT - SINGLE AUDIT
TOTAL
CLASSIFICATION STANDARD QUOTED ESTIMATED PROPOSED
OF PERSONNEL HOURLY RATES HOURLY RATES HOURS FEES
Partner-in-Charge $158 $126 6 $756
Technical Review Partner $158 $126 2 $252
Manager 126 101 9 '909
Senior Auditor 96 77 14 1,078
Staff Auditor 71 57 10 570
Clerical 43 34 5 170
Sub Total $3,735
Out-of-POcket Expense:
Transportation $200
TOTAL ESTIMATED HOURS/
TOTAL PROPOSED FEES FOR COMPLIANCE SINGLE AUDIT 46 $3,935
SCHEDULE OF PROFESSIONAL FEES AND' EXPENSES
· FOR THE AUDIT OF THE FISCAL YEAR 2004-05 FINANCIAL STATEMENTS
SUPPORTING SCHEDULE E
COMPLIANCE REPORT REDEVELOPMENT AGENCY
TOTAL
CLASSIFICATION STANDARD QUOTED ESTIMATED PROPOSED
OF PERSONNEL HOURLY RATES HOURLY RATES HOURS FEES
Partner-in-Charge $158 $126 2 $252
Technical. Review' Partner $158 $126 1 $126
Manager 126 101 3 303
Senior Auditor 96 77 2 154
Staff Auditor 71 57 12 684
Clerical 43 34 2 68
Sub Total $1,587
Out-of-pocket Expense:
,Transportation $100
TOTAL ESTIMATED HOURS/
TOTAL PROPOSED FEES REDEVELOPMENT AGENCY 22 $1,687
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THE FISCAL YEAR 2004-05 FINANCIAL STATEMENTS
SUPPORTING SCHEDULE F
COMPLIANCE REPORT - WASTE WATER MANAGEMENT PLAN
TOTAL
CLASSIFICATION STANDARD QUOTED ESTIMATED PROPOSED
OF PERSONNEL HOURLY RATES HOURLY RATES HOURS FEES
Partner-in-Charge $158 $126 2 $252
Technical Review Partner $158 $126 0 $0
Manager 126 101 4 404
Senior Auditor 96 77 3 231
Staft Auditor 71 57 3 171
Clerical 43 34 2 68
Sub Total $1,126
Out-of-pocket Expense:
Transportation $60
TOTAL ESTIMATED HOURS/
TOTAL PROPOSED FEES FOR WASTE WATER MGT PLAN 14 $1,186
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THE FISCAL YEAR 2004-05 FINANCIAL STATEMENTS
SUPPORTING SCHEDULE TOTAL
ALL INCLUSIVE MAXIMUM FEES
TOTAL
CLASSIFICATION STANDARD QUOTED ESTIMATED PROPOSED
OF PERSONNEL HOURLY RA'IES HOURLY RATES HOURS FEES
Partner-in-Charge $158 $126 -- 70 $8,820
Technical Review Partner $158 $126 16 $2,016
Manager. 126 101 111 11,211
Senior Auditor 96 77 111 8,547
Staff Auditor 71 57 158 9,006
Clerical 43 34 27 918
Sub Total $40,518
Out-of-pocket Expense:
Transportation $1,410
TOTAL ESTIMATED HOURS/
TOTAL PROPOSED FEES FOR COMBINED SCHEDULE 493 $41,928
TECHNICAL PROPOSAL TO AUDIT THE
CITY OF BAKERSFIELD
FOR THE FISCAL YEARs ENDED JUNE 30, 2005, WITH
OPTIONAL YEARS 2006 THROUGH 2009
M. GREEN AND COMPANY LLP
CERTIFIED PUBLIC ACCOUNTANTS
3900 W.' CALDWELL'AVENUE
VISALIA, CA 93277
CONTACT PERSON: JUSTIN MORALES, JR., CPA
. ENGAGEMENT PARTNER
J PHONE: (559) 627-3900
E-MAIL: jm°rales(a).m(ireencpas.com ' '
J
COPY' "
..... : ' ': ' : · TABLE OF CONTENTs
PRopOsAL SECTIONS PAGE NO.
Title Page
General Information:
Firm Reference Information'. ................................................................. i ................................................... 1
Peer Review2 .......... ........................................................................ ~.~ .............. ~ ..... ' .................................... 2
Profile 'of the Firm...' ............................................................................................... i ........................... ....... 3
History of the Firm.2 ............................................... i ................... - ..................
FirmDocumentation ........ ' ..................................................................................
Staff QUa,lifications and Related Experience: "
Related Experience of the Firm ......................................... .............. ..~ ..... :.' ........ ~.....~..~ ........................... 17-18
Proposed Proieet Approach:
Scope of the Engagement ..i...i .................. ' ......................... :..: ....... : ........... i ................. i ....................... :.. 19-26
References
References ....... ......................................................... i ...... : ............. ~ ........................ , ....................... ~ ...... 27-31
Conflict of Interest / Supplement:
Conflict of Interest Statement..: ........................ '. .................................... ~ ......................... : .............. : ......... 32
Appendix:
Proposing Firm Guarantees
· ProPosing Firm Warranties
/ '[, · CERTIFIED PUBLIC ACCOUNTANTS · '
~, w. ^,=s. c.i~.^. '"' April 4~. 2005
MAR. LA D. BORGF~, C.P.A. ·
~,~ M. c,~,~, c.P.^. Ci~ of Bakersfield
~. ~. c.~.~. F~ce Deponent A~: Ne~on K. S~
1501 Truxm Avenue
~ M. ~, C.P.A.
Bakersfield, CA 93301
~ ~. ~ c.~.,.
~ s. ~, c.~.,. Dea~ Mx. S~:
~ MO~, ~, C.P.A.
~ ~. ~. c.~.~. Draw~g from over 50 years of pubic sector experience, we have a ~orough
'~dersmd~g of .~e ~ancial operations ~ w~ch ~e Ci~ of Bakersfield ~cfiom;
~m.c.~.~. i~ ~que ~d complex ~cial ~acfiom and ~e related accoun~g, repor~g.
~ ~. ~ ~.. C.a.A. ~d operational issues.
~s.~,c.~.,. ~ order to provide ~e most Comprehemive services available ~ our
'] ~dus~ we have placed toge~er a professional audit tern ~at has. extemive
I
~,.~m.c.~.~. experience as se~ice providers to subst~fiagy sized Cities, Co~fies, Co~
~. ~, c.~.~. Dep~en~, School ~d Spedal D~ic~. O~' reputation for de~ver~g qu~.
,~.~s~mc.~.~. produc~ ~ a ~ely ma~er ~ ~ ~igh~l perspective on ways to ~prove
operafiom ~ we~ kno~. We ~ke pride ~ our'record of se~ice ~d cotangent to
· o,~ ~ ~. c.~.~, our c~ents and w~ con~uagy s~ive'to meet ~d exceed expectafio~ of excegence.
~a~ Below ~ a brief su~a~ as to why we feel our f~ ~ your best choice to perform
~ ~ ~. ~, C.a.A. ~e engagement.
~.~,c.~.,. Audit Team Expe~ence --GASB 34: Our audit' team has extensive
experience ~ work~g wi~ goverment agenCies ~d ~plemen~g GASB ~. ~e
.~U~CE M. ~, C,P.A.
~ ~ o~ ~resno, ~e ~esno Co~ ~m~lo~ee ~e~emen~ Assoda~on, and ~e ~a~ers~eld
.] ~ A. ~. C.~.~. C0~ ~ce o~
~ ~.'c.~.~. ~oca~ ~resence: ~. ~reen ~d Com~ ~ ~as M~ ~ local ~resence ~ ~e
cen~ va~e~ for over ~0years ~ ~ves ~s a ~orou~h
~ A. W~Y~ C.P.A.
~s~ Based AudRin~: ~ur ~m has been one o~ ~e ~oneers
~temal consol s~c~re and ~gh r~k audit areas of an org~a~on. As a result of
. ~e ~creased emphas~ ~ ~e current audit env~oment,, we s~c~e o~ audi~ to
meet ~e ~creased demands of fraud and r~k based audi~g. Th~ approach to
Td~e audi~g posifiom our ~m as ~e leader ~ o~ field ~ ~plemen~g ~e new &aud
,.] V~ s~dards.
Hmford
~n~a
Members of. the audit.team have instruc.ted at Fresno State University, College of the Sequoias, and San ' -
Jo~tquin Valley College/In addition, we have conducted a variety of training programs covering a broad
.range of .accounting, auditing, and. financial, reporting, topics, specific to non-profit organizations and' "
,governmental agencies. Below is.a Partial list of courses conducted by members of Your audit team.'
GASB 34'Financial Reporting Model Single Audit Applications
GASB 34 Special Purpose Governments Changes in Government Accounting Standards
GA_qB 37 and 38 Update . Risk Based Auditing
GASB 34 Infrastmcture Reporting . SAS 99 (New Fraud Standards)
GASB 33 Accounting and Reporting GAO IndePendence Standards
OMB' Circular A-133 Accounting Issues Program Specific Audits -
Non-Profit Financial Management single Audits in a Non-Profit Organization
Our firm is committed to performing the audits and delivering the City of Bakersfield separate
. reports and financial statements,..as detailed in the scope of work section of the proposal 'within the
required time period. The audit team is knowledgeable and has all of the experience necessary to fulfill
this promise.
We appreciate this opportunity to present our proposal to provide professional services to' the
City of Bakersfield for the fiscal years ending June' 30, 2005, with optional years 2006 through 2009. We
believe that 'our proposal clearly demonstrates that M. Green and Company LLP is your best choice. As
Engagement Partner, I am authorized to represent the firm, as well as to sign for and obligate the firm
contractually. This proposal is considered to be a firm and irrevocable offer valid for ninety days from
the date of this letter. ·
If yoU have any questions about this proposal, please call me at our Visa]ia office, (559) 627-3900.
Thank you for your consideration of. our proposal.
Very truly yOurs,
M. GREEN AND COMPANY LLP
Certified Public Accountants.
Justin Morales, Jr, CPA
partner
I
M. Green and'Company' LLP . . :'
3900 West Caldwell Avenue
Visalia, CA 93277 ·
Phone (559) 627-3900
Fax (559) 625-i606'
htr-p://www.mgreencPas.com
Account RepresentatiVes:
lustin Morales, Jr., CPA
Kenneth W. White, Ir., CPA
Type of Organization: "' .
M. Green and Company is a Small BUsiness Limited Liability Partnership
Federal Tax Identification Number:
94-1683129
Ce~fied Public Accountants.
PEER REVIEW REPORT
.. August 22, 2002
To the Parmers
NL Green and Company LLP
We have reviewed the system of quality control for the accounting and auditing practice of M. Green and Company
LLP (the firm) in effect 'for the year ended May 31, 2002. A system of quality control encompasses the firm's
organizational structure and the policies adopted and procedures established to provide it with r&asonable
] assurance of conforming with professional standards. The elements of quality control are described, in the
! Statements on Quality Control Standards issued by the AmeriCan Institute of Cenkfied Public Accountants
(AICPA). The design of the system and compliance with it are the respons~ility of the firm. Our responsibility is'
] to ex~ess 'an opinion on the design of the system, and the firm's comPliance with the Hem based on our review.
Our review was conducted in accordance'with standards established by the Peer Review Board of'the AICPA. In
· 'performing our review, we obtained an understanding of the system of qualitY control for the firm's'accountfiag and
i auditing practice. In addition, we tested compliance with the firm's quality control policies and' procedures to the
extent we considered appropriate. These tests 'covered the application of the firm's policies and procedures on
selected engagements. Because 'our review was based on selective tests, it would not necessarily disclose all
} weaknesses in the system of quality control or all instances of lack of compliance with it.
Because there are inherent limitations in the effectiveness of any system 'of quality control, depart'utes fi,om the
system may occur and not be detected. Also, projection of any 6valuatiun of a system of quality control to future
periods is SUbject to the risk that the system of quality control may become inadequate because of changes in
conditions, or because the degree of compliance with the pohcies or procedures may deteriorate. ·
In our.opinion, the system of quality .control for the accounting and auditing practice oflVL' Green.and Company
LIP in effect for the year ended May 31, 2002, has been designed to meet the requkem'ents of the quality control
standards for an accounting and auditing practice established by the AICPA and was complied with during the year
· .1 then ended to provide the firm with reasonable assurance of conforming with professional standards.
William V. Allen, Jr.
Peer Review Without Peer
2148 Margarita Drive, The Villages, FL 32159 ,. (352) 750-9636, bill~billaile~.com
2
Our Firm's Organizational Structure and Designated Representatives. '
We are a local firm' of Certified Public Accountants with four offices irt the KingS/Tulare County Area. The'
current partner/staffing composition o.f our organization is summarized as follows:
HANFORD OFFICE VISALIA oFFIcE TULARE OFFICE DINUBA OFFICE
1483 Bailey Drive 3900 W. Caldwell Ave. 308 South "M" Street 132 South L
584-2751 627-3900 688-7401 591-4545
Partners Partners P ar~ers Partners
'
Alan S. Moore, CPA Kenneth W. White, Jr., CPA Kevin M. Green, CPA Larry Aye. rs, CPA
Giuseppe Scalia, CPA Kathleen M. Lampe, CPA Wnx Kent Jensen, CPA
Maria D. Borge$, CPA Lynn M. Lampe, CPA
Justin Morales, Jr., CPA Kenneth B. Nunes, CPA
Profes~sional Staff Professional Staff Professional Staff Professional Staff
Nancy Tutschulte, CPA. Lynda S. Anderson, CPA Elaine Reule~ CPA Bill lolly
D~nny Gill Lynette g. Garcia, CPA Rebecca Agredano
Dawn Perkins Don Dorman Stephanie Tumup.~:l
Albert Macias Regina Longoria David Bekedam
Natalie Siegel Caron Ketchie Matt Everett :
Jessica Parker Rick Camarillo Crystal Duke
Alberto Magallanes, Jr.
Consultants Consultants Consultants Consultants
James G. Dwyer, CpA Donald G. Gordon, CPA Robert
L
Bandy,
CPA
Forest
CPA
James 1L Johnson, CPA ' Charles L. Southard, CPA Maurice M. Green, CPA
Kent A. Woolley, CPA '
Our Visalia office is the lead office for this proposal, although we may utilize professional staff from other
offices in the conduct of the engagement. The listing illustrated above represents our current professional staffing,
by office, and does not include our full charge bookkeepers and clerical/data entry staff.
M. Green and Company LLP is a "full service" firm with extensive experience in governmental auditing,
commercial auditing, non-profit organization audits, tax preparation, consulting and accounting services for a
multitude of industries including but not limited to cities, counties, county departments, schools, coUnty offices of
education, JPA's, sPeciall districts, non-Profit organizations, health care professionals, restaurants, manufacturing
companies, agricultural COmpanies, and television/radio stations.
and has' conducted over 2,800 audits. Last year, we conducted ·over· 75 audits of cities, coUnties, school
'districts, school JPAs, migrant edUcation audits; county offices of education, special districts, and non-'
profit organizations. ;
In 2002, M. Green and Company LLP received an. unqualified opinion (the highest, opinion report
Possible) as a result of an extensive outside Quality Control Review (QCR) of our Firms' internal 'quality
control review system. As part Of our internal quality control review system, we monitor and ensure that
all of our professional, audit staff involved in governmental auditing receive professional continuing
education and training in governmental auditing and-accounting. This is done internally on an annual
basis. We also conduct extensive internal quality control reviews annually and have an outside review
· every three years. In addition,, we are fully insured and maintain professional malpractice insurance for
all professional services rendered:
Members of our permanent staff have unique experience in the area of special Projects such as
Federal and State categorical programs. This is very important in today's governmental auditing
enVironment since compliance auditing is such a critical component of the independent auditor's
reporting responsibilities.
Other noteworthy features of our firm include the following: a) computer eXpertise, b) in-house and.
outside' continuing professional education for all professional staff, c) extensive experience 'with non-
profit and' governmental audits and single audit requirements, d) defalcation investigations~ ..and e)
special engagements for the statewide Fiscal Crisis and Management, Assistance Team (FCMAT).
If you have any questions regarding M. Green and ComPany:LLP and its staff please contact Justin
Morales at (559) 627-3900.
INDEPENDENCE:. . ....
We. certify that. M. Green and .Company LLp meets the INDEPeNDENcE.sTANDARDs as 'set forth in section
· 3.11-3.24 of the G.A.'O.'s Government Auditing Standardsl June 1994 ediiion (Yellow.Book) as revised through
January 2002, with resPect to'the City of Bakersfield and its component units.
.Xp RI .NC , W TH VlUNICIpAL AUDITS, sINeL . AUDITS *ND
IMPLEMENTATION OF GASB 34: . .
All key audit 'team ·members are highly experienced in governmental fund accounting and auditing, conducting
single audits, and preparing or assisting in the preparation of Basic Financial Statements. Our firm has been
· implementing GASB 34.with many sizable clients including, but not limited to, the City of Woodlake, City of
Avenal, .City Of Kingsburg, City.of Corc0ran, and the County of Fresno.
Furthermore, we certify that the management team has performed audits for'the following municipalities:
. City of Arvin, California City of Lemoore, California
City of Avenal, California City of Modesto, California *
. City of Corcoran, California City of Ridgecrest, California
City of Delano, California * City o£ San lose, California *
City of Farmersville, California City of Taft, California
City of FresnO~ California * City of Tehachapi, california
City of Gait, California * '- City of Woodlake, California
.City of Kingsburg, California
· .GFAO Awarded ' '
LIC ,NS TO P CTIC , IN STAT , OF CAriFO -iA:
We certify that our accounting firm is licensed to practice in the State of California:
FIRM CAPACITy:
We .certify that we are and will continue to be adequately staffed for an engagement of this magnitude.
Further, we declare that we will commit the necessary personnel in numbers and related experience as
well as 'other resources necessary, which in our judgment will be required to successfully complete the
engagement. At this time we have 32 governmental professional staff. We will continue to maintain the
highest possible level of staff continuity throughout the coUrse of the engagement; this is to ensure that
.the City of Bakersfield deriVes maximum benefit from their working relationship With our firm.
STATEMENT OF QUALIFICATIONS:
We certify that our staff is highly qualified to fulfill the requirements of this engagement. Ail of our audit
reports, as submitted, have passed desk reviews frOm the U.S. Department of Labor, Inspector General,
California State ContrOller's Office, Department of Education, Office of the Auditor G~neral, and the
Office of Criminal Justice. planningl
SURETIES:
Proposer warrants that it has an adequate Errors and omission Insurance Policy whiCh wi/1 prOvide a
'
prudent amount of coverage for the willful or' negligent acts~ or omissions of any officer, employees or
agents thereof. Proposer also warrants that it has General Insurance and Workers' Compensation
Insurance.
'
ENGAGEMENT'TE 'AM "
PROFILE OF THE
Audit Team '
We have selected the staff for this engagement based on their experienCe and training in relation to the
requirements of the City of Bakersfield. Inkeeping with our commitment to providing our' clients with
superior services, professionally delivered, we always have an audit manager and/or senior auditor, on
site during the course of the fieldwork.
It is our policy to keep Continuity of the audit team for each client. In addition to an audit manager
and/or senior auditor, we anticipate having one to two staff auditors present during our fieldwork. Their
interface will be with audit manager and/or senior auditor. This insures that the City of Bakersfield will
not be disrupted by inexperienced auditors and the audit will be performed timely and in a professional
manner. The following section describes the responsibilities and involvement of the keY members of the
audit team.
'.
Engagement Partner'
'
The engagement partne~ for the City of Bakersfield audit will be lustin Morales, Ir., CPA. Mr. Morales
has over 13 years governmental accountSng and auditing experience.' · His professional experience is
provided in detail in the resume on pages 13 and 14. As engagement partner, Mr. Morales will have the
following responsibilities: '
~ .Approval of the objectives, scope, and audit plan
t2 . Assignment of staff appropriate to the engagement .
;2 Consultation with audit staff and the City of Bakersfield over important issues "
~1 Review Of significant or important audit areas
Q Quality of the audit and the report
r~ Final review and delivery of the report to City Council
Technical Review Partner '
The technical review partner for theCity of Bakersfiel'd audit will be Ken White, Ir, CPA. Mr. White has
over 30 years governmental accounting and auditing experience. His professional experience is provided
in detail in .the resume on pages 15 and 16. As technical review partner, Mr. White will have the
following responsibilities:
Q Consult with Partner-In-Charge on technical decisions
ta Stay current on the engagement process and be available in absence of partner-in-Charge
" Q Review reports for compliance with the .applicable.standards
· ... . ...:....~::..:.:.,: ~.~ .... ..... -'... ;: .' ... ! . :~.'~ .
Auait manager ·
'
The'engagement manager for the City'of Bakersfield· will be' Don Dorman. As a finance manager for over
· 8 years, Mr. Dorman has developed a significantbody of knowledge of governmental operations. He also
has experience auditS_rig cities and special districts. Mr. Dorman's continuing professional education is
also directly related to governmental audits. His resume summary is in further detail On page 17.
The audit manager will be present during field work and will be responsible for:'
Development of the overall audit plan
Determination of the nature, timing, and scope of specific audit procedures
C3 On-site supervision of the audit team
Direct execution of audit procedures in significant or difficult audit areas.
Senio'r Staff
Ms. Caron Ketchie has extensive experience auditing cities and counties, she will direct the work of one
or possibly two staff accountants. As shown in her resume on pages 18' and 19, she is well qualified to
perform all audit procedures. She has been noted by clients as being extremely thorough and efficient in
her audit' performance.
Staff AccOuntants
Our staff accountants are all CpAs or CPA candidates as detailed in pages 20 and 21.· The entire staff
assigned to this aUdit has prior experience auditing other M. Green and Company LLP city clients and
performing ~single audits for different entities. All members of the audit team have satisfied the Yellow'
Book requirements.
. JUSTIN MoRALEs, ,IR., CPA"' ENGAGEMENT PARTNER:
Mr. Morales is. a 1992 graduate of Cal-Poly, San Luis Obispo University where he attained his
Bachelor of Science in accounting~ He has been a Certified Public Accountant since 1995. Before joining
our firm in 2002, Mr. Morales was the Director Of the Fresno office of a state-wide CPA firm specializing
in auditing and consulting of governmental agencies.
Mr. Morales has over 13 years of auditing experience' in governmental auditing. He. has further
developed his professional proficiency by conducting numerous training courses Covering a variety of
accounting, auditing, and financial reporting topics. He has also continued his professional education by
attending seminars in a variety of audit areas with emphasis on governmental accounting, auditing, and
financial reporting. '
Mr. Morales has served on the California Society 'of CPA Board of Directors - Fresno chapter (2000-
2002),-and is currently the Government Auditing and Accounffng Committee Chair. In addition; he is a
member of the California Society of Municipal Finance. Officers, American Institute of Certified Public
Accountants, American Association of Hispanic Certified Public Accountants, and The. California Society
of Certified Public Accountants.
Past and Present Public Sector Clients Served:
*GFOA awarded
Mr. Morales has performed finandal and compliance audits for the following clients.. (All audits
were conducted in accordance with auditing' standards generally accepted in the United States of
America. Further, many were conducted in accordance with Government Auditing Standards and the
Single Audit Act.)
City Governments
City of Arvin, California City of Kingsburg' California
City of Avenal, California City of Lemoore, California ·
City Of Corcoran, California City of Modesto, California*
City of Delano, California* of California
City
Ridgecrest,
City of Farmersville, California City of San Jose, california*
City of Fresno, California* City of Taft, California* .
City of Gait, California* City of Tehachapi, California
~ City of Woodlake, California
Redevelopment Agencies
Arvin Redevelopment Agency Kingsburg Redevelopment Agency"
Avenal Redevelopment Agency Lemoore Redevelopment Agency
Corcoran Redevelopment Agency Modesto Redevelopment Agency
Delano Redevelopme.nt Agency Ridgecrest Redevelopment Agency ·
Farmersville Redevelopment Agency San Jose Redevelopment Agency
Fresno Redevelopment Agency Taft Redevelopment Agency
Gait Redevelopment Agency Tehachapi RedeveloPment Agency
Woodlake RedevelolSment Agency
Past and Present Public Sector 'Clients Served (continued):
County Governments~
County of Fresno, Califorrda* CoUnty of Sola. no, California*
CoUnty' of Kern, California* coUnty of Tulare, California*
County of Monterey, California*
Retirement Plans~Systems ·
Fresno County Retirement Plan* Kern CoUnty Employee's Retirement Plan*
Kern CoUnty Deferred Compensation Plans Tulare CoUnty Retirement Plan*
'Transportation
Fresno County Council of Governments Kern County TDA audits
Fresno. County Transportation Authority Omnitrans Transit
Kern Council of
County
Governments
Other Governmental EntitieS, Including Special Districts and Joint Powers Authorities
Corcoran Cemetery District E1 Rico Reclamation District
Delta Lands Reclamation District
Utility Related
Kaweah Delta Water District Kern County water Agency
Kaweah River Power Authority St. John Water District
Continuing Professional Education:
Below is a listing of relevant CPE Courses taken within the last three years. This list is only a partial
list detailing the courses relevant to governmental accounting and auditing for the year and is not meant
to be all-inclusive.
Course Title~ Date . Credit Hours
Communicating Fraud Examination Results August 2004 8
Yellow Book Update August 2004 8
Fraud & Risk Based Auditing Update July 2004 16
ACFE Annual Fraud Conference July 2004 24
SAS, FASB, GASB Update · June 2004 3
AICPA State & Local Govt's Guide Update May 2004 8
ACFE Auditing For Internal Fraud May 2004 8'
SAS 99 and COSO (InStructor) September 2003 14
Evaluating Internal Controls - COSO approach July 2003 16
SAS 99 and Single Audit for Governments June 2003 1.5
Risk-Based and Fraud Auditing for Governments ' June 2003 8
Fresno CoUnty: Internal Audit Planning (Instructor) February 2003 8
Fresno State: NFP Fin. Mgt. Course (Instructor) january 2003 48
Derivatives and Hedging January 2003 2.5
Audit Planning: A Particular Guide ' November 2002' 8
Risk Based Auditing November 2002 · 1.5
GASB 34 Infrastructure Reporting (Instructor) September 2002 3..
Post EnrOn Ethics AugUSt 2002 2
Single Audit Plann/ng June 2002 6
GASB 37 and 38 Update (Instxuctor) January 2002 3
KENNETH W. WHITE, JR., CpA- TECHNICAL REVIEW PARTNER
Mr. White has been a California Certified pUblic Accountant since 1973. He is a 1968 graduate of
California State university, Fresno with a Bachelor of Science degree in accounting. He is a graduate of
College of the Sequoias and Redwood H~gh School. ~'
During the past thirty;two years, Mr. White has conducted. approximately 2,100 audits involving
cities, counties, county offices of education, school districts, special districts, non-profit organizations,
federal grant audits,, and jOint powers authorities. In addition he has audited and consulted with many
school districts regarding Cafeteria and Student Body Accounting and various Federal 'and State
programs. ·
Mr. White is a member of the American Institute of Certified Public Accountants and a member of the
Fresno Chapter of California Society of Cerl~fied Public Accountants: He annually attends seminars
covering many facets of auditing and accounting. Mr. White is a director of the SeqUoia Lions Club of
Visalia and a member of the Sons of Italy Lodge.
Past and Present Public Sector Clients Served:
· GFOA awarded
Mr. White has performed financial and compliance audits for the following.clients. (All audits were
conducted in accordance wi.th auditing standards generally accepted in the United States of America.
Further, many were conducted in accordance with Government. Auditing Standards and the Single Audit
Act)
City Governments
City of Arvin, California City of Kingsburg, California
City of Avenal, California City of Lemoore, California
City of Corcoran, California City of Taft, California
City of Farmersville, California City of Woodlake, california
Redevelopment Agencies
Arvin Redevelopment Agency. Kingsburg Redevelopment Agency
Avenal Redevelopment Agency Lemoore Redevelopment Agency'
Corcoran Redevelopment Agency . Taft Redevelopment Agency
Farmersville Redevelopment Agency Woodlake Redevelopment Agency
County Governments '
County of Fresno, California* County of Tulare, California*
Retirement Plans/Systems
Fresno County Retirement Plan* Tulare County Retirement Plan*
School Districts and Other £ocal Educational Agenctes
Allensworth Elementary School District Pleasant View Elementary School District
AIPaugh Unified School District . Sequoia Union Elementary School District
Belridge Elementary School District Springville Union Elemehtary School District
Past and Present Public Sector Clients Served (cOntinued):
School Districts ': '
Citrus So Tule Elementary School District Sequoia Union Elementary schoOl District
Columbine School District Stone Corral Elementary School District.
Cuyama Joint Unified School District Strathmore Union. Elementary School District
Eaxlimart Elementary School District Sunnyside Union Elementary School District
Faxmersville Unified School District Terra Bella Union Elementary School District
Hope Elementary School District Tipton Elementary School District
Kings River Union Elementary School District Traver Joint Union Elementary School District
Lemoore Union Elementary School District Tulare City Elementary School District
Liberty Elementary School District Tulare County Office of Education
Monson-Sultana ]t. Union Elm, Sch. Dist. Tulare Joint Union High School District
Oak Valley Union Elementary School District Woodlake Union School District
Palo Ve. rde Union Elementary School District Woodlake Union High School District
San Antonio Union Elementary School District
Other Governmental Entit&s, Including Special Districts and Joint Powers AuthOrities
. School Employees Trust of Tulare CountyTulare County Schools Self Insurance Authority
Tulare County Schools Insurance Group
Continuing Professional' Education:
Below is a listing of relevant CPE Courses. taken within the last three years. This list is °nly a partial list
detailing the courses relevant to governmental accounting and auditing for the year and is not meant to
be all-inclusive.
Course Title Date Credit Hours
Fraud and Risk-Based Auditing Update July 2004 16
IDEA July 2004. 3
SAS, FASB, GASB Update June 2004 3
AICPA State and Local Govt's Guide Update 2004 8
May
School District Compliance May 2004 8
Evaluating Internal Controls - COSO approach July 2003 16
School District Audits June 2003 8
SAS 99 and Single Audit for Government ... June 2003 1.5
Risk-Based and Fraud Auditing for Governments June 2003 8
IDEA Data Extraction May 2003 8
School DistrictConference May 2003 8
State Compliance June 2003 8
GASB 34 May 2002 8
School District's Conference May 2002 8
GAO Independence Rules March 2002 1.5
The New GAO Independence Standard March 2002 1.5
School Audit Workshop September 2001 4
GASB 34 · SePtember 2001 ' ~ 1
Auditware Annual Update' July 200! 8
State Compliance ' - June 2001 4
Single Audit Compliance June 2001 4
School Districfs Conference May 2001 . . .. 8
Audit Proficiency Training (MAP) May 2001 8' .
' . DON DORMAN ' ENGAGEMENT MANAGER .... '.
Mr. Dorman is a graduate of Pepperdine University .Where he attained his' Bachelor of Science in
Business Administration, with ~n emphasis in accounting from University of California, Los Angeles. Mr.
Dorman has also passed-all parts of the CPA exam. Before joining' our firm Mr. Dorman was a senior
auditor for Moreland and Associates, Inc. Prior work experience includ6.s being finance manager for the
City of Port Hueneme for 8 years, as well as, an attorney specializing in general tax and estate planning.
Past and Present Public Sector C~ients Served:
Mr. Dorman has performed financial and compliance audits for the following clients. {All audits
were conducted in ac. cordance with auditing standards generally accepted in the United States of
America.' Further, many were conducted in accordance with Government Auditing Standards and the
Single Audit Act.)
City Governments
City of Arvin, California City of Lemoore, California
City of East Palo Alto, California City of San Juan Capistrano, California
City of Hughson, California City of Santa Maria, CaLifornia
City of King City, California City of Shafter, California
City of Lawndale, California City of Simi Valley, California
Redevelot~ment Agencies-
· City of East Palb Alto, California City of Shafter, California
City 0f Hughson,. California City of simi Valley, California
OtherGovernmental Entities, Including Special Districts and Joint Powers Authorities.
Santa Barbara County of Association of Govt's
Utility Related
Mesa Consolidated Water District
Continuing Professional Education:
Below is a listing 6f relevant CPE courses taken within the last year. This list is only a partial List
detailing the courses relevant to governmental accounting and auditing for the year and is not meant .to
be ail-inclusive.
.Course Title Date Credit Hours
Government Accounting: Fund Acct/Revenues Triple Flip August 2004 3.5
Government Accounting CAFR August 2004 4 '
Disclosure Checklist August 2004 2
Audit Training August 2004, · 6
Single Audit/A~dit Methology ' August 2004 8
Quality Control/Audit Computer Technology August 2004 8
-12- '"
cARoN KETCHIE ' SENIOR AUDITOR
Ms. Caron Ketchie is a 2003, Cum Laude, graduate from California State University Fresno with a
Bachelor of Science in Business Administration with an emphasis in accounting.
.
Ms. Ketchie joined M. Green'and Company LLp in 2003. Since that time, she has worked on audits
for cities, counties, nonprofits, and school districts. She has also continued her education by attending all
of M. Green and Company LLP's in-house certified professional education classes.
Past and Present Public Sector Clients Served:
*GFOA awarded
Ms. Ketchie has performed financial and compliance audits for the following clients. (All audits were
conducted in accordance with auditing standards generally accepted in the United States of America.
Further, many were conducted in accordance with Government Auditing Standards and the Single Audit
Act.)
City ,Governments
City of Arvin, California City of Lemoore, california
City of Avenal, california City of Taft, California* -.
City of Corcoran; California City of Woodlake, California ·
City-o f- -K, ingsbuxgr California
Redevelopment Agencies
Arvin Redevelopment Agency Lemoore Redevelopment' AgenCy
Avenal RedeveloPment Agency Taft Community Development Agency
Corcoran Redevelopment AgenCy Woodlake Redevelopment AgenCy
Kingsburg Redevelopment Agency.
County Governments
County of Fresno, California* County of Tulare, California*
School Districts '
Alpaugh Unified School Dist. Migrant Program Colombine School District Migrant Program
Arrnona Unified School Dist. Migrant Program Tulare High School District
Citrus South Tule Woocllake Elementary School District
Central Union School Dist. Migrant program Woodlake High School District
Other Public Agencies
Taft Wastewater Treatment Plant
Non-Profit Agencies
Alcohol Center for Teenagers Girl Scouts loshua Tree Council
First Assembly of God (Review) United Way of Fresno County
Fresno Coral, Inc.
'/.~ Below is a listing of relevant CPE .Courses taken within the last'tWo years.-, This list is only .a partial
'list 'det~iiing the COurses relevant to governmental accounting and auditing for the years and is not meant
to be all-inclusive. '
Course Title Date Credit Hours
Fraud and Risk Based Auditing Update. . July 2004 16
SAS, FASB, GASB Update June 2004 3
Work Paper Documentation June 2004 4
GoSystem Audit SoftWare June 2004 4
School District Compliance June 2004 8
AICPA State and Local Govt's Guide Update ' May 2004 8
Professional Ethics - .. January 2004 8
Cash Flow Statement PreParation September 2003 4.25
. ALBERT MAClAS~¢- STAFF AUDITOR .
Mr. Albert Macias is a 2002, graduate from San Diego State Uni-cersity With a Bachelor Of Science in
Business Administration with an emphasis in accounting.~
Mr. Macias joined M. Green and Company LLP in 2002. Since that time, he has worked· on audits for
cities, counties, nonprofits, school districts, and private industry~ He has also continued his edUcation by
attending all of M. Gte. eh and Company LL!~. s in-house cer~ied professional education classes.
Past and Present Public Sector Clients Served:
*GFOA awarded
Mrl Macias has performed 'f'mancial and compliance audits for the following clients. (All audits were
Conducted in accordance with auditing standards generally accepted in the United States of America.
Further, many were conducted in accordance with Government Auditing Standards and the Single Audit
Act.)
Cing Go~,ernments
. City of Arvin, California City of LemoOre, California
City of Avenal, California City of Taft, CalifOrnia*
City of Corcoran, California City of Woodlake, California
City of KingSbur'g, California
Redevelopment Agencies
Arvin Redevelopment Agency Lemoore
Redevelopment
Agency'
Avenal Redevelopment Agency Taft Community Development Agency
Corcoran Redevelopment Agency Woodlake Redevelopment Agency
Kingsburg Redevelopment Agency
Count~ Governments
County of Fresno, California* County of Tulare, California*
Continuing.Professional Education:
within the two years. 'This list is only a partial
Below
a
listing
of
relevant
CPE
Courses
~ken
last
list detailing the courses relevant to governmental accounting and auditing for the years and is not meant
to be ail-inclusive.
Course Title Date ' Credit Hours
Fraud .and Risk Based Auditing Update July 2004 16
SAS, FASB, GASB Update lune 2004 3
Work Paper Documentation June 2004 4
GoSystem Audit Software lune 2004 4
School District Compliance Iune 2004 8
AICPA State and Local Govt's Guide Update ' May 2004 8 .-
Professional Ethics January 2004 - 8.
Cash Flow Statement Preparation · "September 2003 4.25
.,RICK cAMARILLO - STAFF AUDITOR
Mr. Rick camarillO is a 2003, graduate from California State University Fresno with a Bachelor of
Science in Business Administration with an emphasis in accounting.
Mr. camarillo joined M. Green and Company LLP in 2003, Since that time, he has worked on audits
for cities, counties, nonprofits, and school districts. He has also continued his education by attending all
of M. Green and Company LLP's in-house certified professional education class&s.
Past and Present Public Sector Clients Served:
*GFOA awarded
Mr. Camarillo has performed financial and compliance audits for the following clients. (All audits
were conducted in accordance with auditing standards generally accepted in the United States of
America. Further, 'many were conducted in accordance with Government Auditing Standards and the
Single Audit Act.)
City GovernmentS
City of Arvinl California City of Lemoore, California.
City of Avenal, CaLifornia City of Taft, California*
City of Corcoran, California City of Woodlake, California
City of Kingsburg, California'
Redevelopment Agencies
Lemoore Redevelopment Agency
Redevelopment
Agency
Avenal Redevelopment Agency Taft Community Development Agency
Corcoran Redevelopment Agency Woodlake RedevelopmentAgency
Kingsburg Redevelopment Agency
County Governments
County of Fresno, California* County of Tulare, California*
Continuing Professional Education:
Below is a listing of relevant CPE Courses taken within the last two years. This list is only a partial
list detailing the courses relevant to governmental accounting and auditing for the years and is not meant
to be all-inclusive.
Course Title .Date Credit Hours
Fraud and Risk Based Auditing Update : 'luly 2004 16
I SAS, FASB, GASB Update lune 2004 3
: Work Paper Documentation June 2004 4
GoSystem Audit Software June 2004 4
,-1 School District Compliance June 2004 8
AICPA State and Local Govt's Guide Update · May 2004 8
Professional Ethics · - . . January 2004 8
j" Cash Flow Statement Preparation September.2003 4.25
J .: -16- '·
RELATED EXPERIENCE. OF THE FIRM
I '
Our firm and/or management level staff has serVed as independent auditors and financial consultants to
numerous governmental agencies. The following synopsis is a partial list of clients your engagement
team has served. ~ .
* GFOA awarded
'City Governments
City of Arvin, California City of Kingsburg, California
City of Avenal, California City of.Lemoore, California
t City of C0rcoran, California City of Modesto, California *
City of Delano, California * City of Ridgecrest, California
City of Farmersville, California City of San Jose, California *
] City of Fresno, California * City of Taft, California*
i City of Gait, California * City of Tehachapi, Ca]/fomia
City of Woodlake, California
Redevelopment Agencies
Arvin Redevelopment Agency Modesto Redevelopment Agency
Avenal Redevelopment Agency Ridgecrest Redevelopment Agency
Corcoran Redevelopment Agency San Jose Redevelopment Agency
Delano Redevelopment Agency Taft Redevelopment Agency
Farmersville Redevelopment Agency Tehachapi Redevelopment Agency
· t Galt Redevelopment Agency Woodlake Redevelopment Agency
· .I Kingsbtrrg Redevelopment Agency
Lemoore Redevelopment Agency
I
.j County Governments
County of Fresno, California * County of Solano,.California *
y C0untyof Kern, Califo. rnia*. County of Tulare, California *
: i County of Monterey, California *.
Retirement Plans/Systems
Fresno County Retirement Plan* Kern County Employee's Retirement Plan
Tulare County Retirement Plan* Kern County Deferred Compensation Plans
] transportation
_.i Fresno County Council'of Governments Kern County TDA audits
Fresno County TranSportation Authority Omnitrans Transit
J Kern Council of Governments
J - 17': ..
School Districis·
A1paugh Unified School D~triCt Sequoia'Union Elementary School District
Belridge Elementary School District Springville Union Elem. School District...
Citrus So Tale Elementary School District Stone Corral Elementary SChool District"
Columbine School District Strathmore Un. Elementary School District
Cuyama Joint Unified School District Sunnyside Un. Elementary School District,
Earlimart Elementary School District Terra Bella Un. Elementary School District
Farmersville'Unified School District Tipton Elementary School District
Hope Elementary School District Traver Joint Un. Elementary School District
Kings River Union Elem. SChool District Tulare City Elementary School District
Lemoore Union Elementary School District ~ Tulare Joint Union Elementary School District
Liberty Elementary School District Tulare County Office of Education
Monson-Saltana Jt. Union Elem. SCh. Dist. Woodlake Union School District
Oak Valley Union Elem. School District Woodlake Union High School District
Pleasant View Elementary School District
'
Other Governmental Entities, Including Special Districts and Joint Powers
Central Calif. Tristeza Eradication ~hool EmploYees Trust of Tala.re City
Central Valley Pest Control District So. Tulare City Memorial District
Corcoran Cemetery District - Tulare City Schools Insurance Group
Delta Lands Reclamation District Tulare City Schools Self Insurance Authority
E1 Rico Reclamation District Tulare Lake Basin Water Storage District
Exeter District Ambulance Tulare Lake Reclamation District
Exeter Public Cemetery Tulare Memorial District
Taft Cemetery District Woodlake Fire Protection.
Kern County Sanitary Fund Woodlake Memorial District
Utility Related
Armona Comm. Svc. District Kaweah River Power Authority
Cutler-Orosi Public Utility District Kern Water
County
Agency
Earlimart Public Utility District Kettleman City Comm. Svc. District.
Cross Creek Flood Control District Laton Conununity Services District
Deer Creek Storm Water District St. Johns Water District
Empire West Side Irrigation District Stratford Public Utility District .
Hacienda Water District Tipton Community Service District
Home Garden Comm. Svc. District Tulare Irrigation District
Ivanhoe Public Utility District Tulare Lake Drainage District '
Kaweah Delta Water District
PROPOSED PROJECT APPROACH.
A description of the natUre of serVices'required by the City of Bakersfield for the fiscal years ending June
30, 2005 with. optional years 2006 though 2009 is provided in this section.
AUDITBASIC FINANCIAL STATEMENTS
'Full Scope: · ·
.We will perform a financial audit for the purpose of expressing anopinion on the fair presentation of
the City of Bakersfield's Basic Financial Statements and the fair presentation of the financial
statements of individual funds and component units in conformity with auditing standards generally
accepted in the United States of America. It is also our understanding that our firm will prepare the
notes to the basic financial statements.
Alternate A:
We will perform a financial audit for the purpose of expressing an opinion on the fair presentation' of-
the City of Bakersfield's Basic Financial Statements, as well as an "in-relation-to" report for its'
combining and supplementary information in conformity with auditing standards generally accepted
in the United States of America. It is also our understanding 'that our firm will prepare the notes to
the basic financial statements.
Our objective is to provide an audit plan that is both realistic and mutually acceptable, thus forming.
the basis by which audit progress can be measured.' Frequent communication is'required for the
audit plan to be an effective management tool. 'We will meet with the appropriate management
personnel on a regular basis to report the progress of our audits, and any preliminary findings. We
expect the City of Bakersfield to communicate any foreseeable delays in the delivery of accounting
records, financial statements, and/or other documents needed to complete· our work.
We propose t° address all key accounting and reporting issues that could potentially affect our audit
opinion up front. Proper planning, 't~mely communications, and the prompt resolution of reporting
issues will lead to a smooth transition to the final reports and timely completion of the engagement.
This approach will as a result create a positive working relationship between our auditors and City of
Bakersfield personnel.
An audit is subject to the inherent risk that errors or irregularities may not be detected. However,
should there be any conditions discovered which lead to the belief that material errors or fraud may
exist, or if any o.ther circumstances are encountered that require extended services, we Will promptly
advise in writing the City of Bakersfield Management and City of Bakersfield Attorney.
In the event that circumstances warrant more extensive and detailed services beyond those in the
contractual agreement, we shall provide in writing and in advance the reasons for the additional
services together with our estimate of costs. No additional work will be performed without advance
approval by the City of Bakersfield.
~f .'APF
SINGLE AUDIT. .'.'~OMB. CIRCULAR...' .. , A-133" . .' :"
We will perform, a Single .Audit in accordance with the' federal single Audit' Act Amendments of
1996; the provisions of U.S. Office of Management and Budget (OMB) Circuiar A-133, Audits of
StateS, Local Governments and NOn-Profit Organizations; and' the related' Compliance supplement for
.Single Audits of State and Local Governments. The fOlio_wing .types of reports are expected to be
issued: ..
.
El Report on Compliance and on Internal control ~Over Financial Reporting Based on an
Audit of Basic Financial .Statements Performed in Accordance with Government
Auditing Standards.
El Report on Compliance with Requirements APplicable to EaCh Major Program and
Internal Control over Compliance.
El An "in relation to" report on the schedule of expenditures of federal awards.
The major programs selected for testing using a Risk Based Criteria will be tested in accordance with
the following compliance requirements:
El Activities allowed and unallowed
El Allowable costs/cost principles
El Cash management
El Davis-Bacon Act
El Eligibility
.
El Equipment and Real Property management
El Matching, Level of Effort, Earmarking
El Period of Availability of Federal Funds
El Procurement, Suspension and Debarment '.
Q · Program Income
t2 Real Property acquisition and relocation asSistance
El Reporting
El Subrecepient Monitoring
El Spedal Test and Provisions
REDEVELOPMENT AGENCY OF THE CITy OF BAKERSFIELD
We will perform a financial and compliance audit of the City of Bakersfield's Redevelopment Agency
and issue a report on compliance in accordance with the current Guidelines for Compliance Audits of
California RedevelolJment Agencies, issued by the: State Controller's Office, Division of Local.
'Government Fiscal Affairs. . '
PUBLIC FINANCE AUTHORITY OF THE CITY OF BAKERSFIELD
We. will perform a financial and compliance audit' of the City of Bakersfield's Public 'Finance
Authority and issue a report on compliance and on internal control Over Financial Reporting'Based'
on an Audit of Basic Financial Statements performed, in accordance with Government Auditing
Standards.
,. .: r20
· ' ' .... ' . WASTEWATERMANAGEMENT PLAN -..' '.' .
'" We will aPPly certain Procedures to the City of Baker~field's SubregiOnal Wastewater Management
Plan. These procedures will be performed Solely to assist you in determining the'City of Bakersfield's'
· Compliance with Agreement 76-153, as amended. .'
GANN APPROPRIATIONS LIMIT
We Will apply the .procedures enumerated below to the City Of Bakersfield's Appropriations Limit
Worksheet. These procedures will be performed solely to assist you in meeffng the requirements of
Section 1.5 of Article XILTB of the California Constitution.
C3 Review the accuracy of the computations.
Cl Determine that'the Appropriations Limit resulting from the completion of various
~ worksheets was adopted by the City CoUncil.
rq Determine that the population and inflation options were selected by a recorded vote of
~ the City Council.
c~ Determine that the actual revenues did not exceed the appropriations limit.
] ''
I REPORTS ON INTERNAL CONTROL AND COMPLIANCE
Since our audit will be performed in accordance with Government Auditing Standards, We will issue
a report on the internal control over financial reporting in relation to Compliance with laws,
regulations, contracts, and' agreements (noncompliance with which could have a direct and material
affect on the financial statements). Any identified reportable conditions and material weaknesses in
reporting be reported to you in this report.
internal
over
Listed below are some of the types of laws, regulations, contracts and agreements that may have
have a direct and material effect on the basic financial statements and are reviewed as of our
part.
audit:.
i [~ Reporting Entity
c2 Tax Reporting
Cl Procurement
] ~ Appropriations
~2 Legal Authority of Transactions
Establishment of Funds
I Budgetary Reporting
[~ Matching Requirements
Restrictions on Expenditures
d ri Taxing.and debt limitations:
Cl Time and Eligibility requirements ..
-2i~ .'-
J "
'.MANAGEMENT AND INTERNAL CONTROL RECOMMENDATIONS
: we will also .iSsue a memorandum, on internal controls. (memorandum), which will address the
systems: of internal control~ accounting. and financial, sYstems, functions, procedures, and processes
.. especially with 'regard to cost effectiveness and immaterial noncompliance with laws, regulations,
contracts, and grants. It is oUr firm's policy to discuss all. findings and recommendations with the
appropriate management personnel prior, to' inclusiOn in oUr memorandum.
~ LETTER REPORTING T° THE AUDIT COMMITTEE
i ~ We will also issue a letter to the City of Bakersfield audit committee that communicates auditor
responsibilities, significant accountSng policies, 'disagreements with management and other relevant
issues to the audit.
'l
STANDARDS FOR AUDIT
· Our audit will be conducted in accordance with all applicable requirements, which include .the following:
[] . Generally accepted auditing standards of the American Institute of Certified Public Accountants.
[] General Accounting Office Standards for Audit of Governmental Organizations, Programs, Activities,
and Functions
[] Government Auditing Standards
[] Governmental Accounting, Auditing. and Financial RePorting
[] Audits of State and Local Governmental Units
[] Office of Management and Budget Circular A-133.
Office of Management and Budget Compliance Supplement for Single Audit of Grants to State and
Local Governments
USE OF EDP SOFTWARE IN THE ENGAGEMENT
We make extensive use of Interactive Data Extraction and Analysis' (IDEA) computer software to perform
· analytical review of financial data. In addition, IDEA is used as a statistical sampling tool for the purpose
of transaction and compliance testing. IDEA is a state of the art decision support tool that enables us to
focus on the strengths and weaknesses in a client's accounting and related control systems.
Auditing the EDP Environment
We will evaluate the City of Bakersfield's EDP system in accordance with GAO's guide, ,Assessing
~ the Reliability of Computer-Based Data" (GAO/OP-8.1.3, September 1990). 'This guide provides the
! following guidance to auditors when. conducting an audit of a government entity: (1) Determine how
computer-based data will be used and how it will affect the audit objectiVes; (2) Determine what is
known about the data and the system that produced it; (3') Obtain an understanding of relevant
] system controls, which can reduce risk to an acceptable level; (4).Test the data for reliability; and (5)
· _1 Disclose the data source and how the :reliability of data .was established or qualify the report if data
reliability could not be established. In addition, we will document our understanding of the EDP
! environment in accordance with GoVernment Audiiing Standards Amendment No. 1,
i Documentation Requirements When Assessing Control Risk at Maximum for Controls Significantly
Dependent Upon Computerized Information Systems.
WORKPAPER RETENTION
; ~.firm will retain all workpapers for a minimum of seven (7) years, unless We are notified in Writing by
J the City Of Bakersfield of the need to extend the retention period. The workpapers will be available, upon
. request, to the City of Bakersfield's or their designee(s).
POTENTIAL ~kUDIT PROBLEMS
In reviewing your requirements in the Request for Proposal (RFP), we do not anticipate any unusual
audit Problems.
SCOPE OF TESTING .. "
In order to accomplish our responsibility, our audit will be divided into three phases: planning, interim
and year-end. The following general approach will be followed:
PHASE I- PLANNING
''
This phase will focus on understanding the organization and its operatSng environment in order to
formulate an audit strategy. This is accomplished by performing the following:
'
An entrance conference with appropriate personnel to discuss areas of concern, 'new
.developments Occurring during the fiscal year under audit, time frames and the appropriate
lines of communication. '
El Written request for schedules, statements and documents necessary to complete the audit.
Normally the document request is given to the client months in advance in order to allow
sufficient time to 'compile the information. For first year clients, when advanced time is 'not
· always, available, we will assist in compiling the information. Existing schedules and
statements that the client u~ili~es may be modified for our use..
'
El Review. of. prior year's audited' financial statements and an analytical review will be
performed between the current and prior year to identify variances. · ·
El Risk assessments to evaluate audit ris'k considerations will be prepared for material account
balances and classes of transactions .to identify areas and types .of testing to be performed.
Materiality levels will be determined for each fund.
Determination of scope of the Single Audit. Major programs will be determined based on
risk. :
ElDetermine 'the scope of certain provisiOns of laws, regulations, contracts and grants which
could have a direct and material effect on financial statement amounts.
El Audit programs will be developed to best accomplish our audit objectives.
~ Follow-up on prior year's findings.
PHASE II- INTERIM ' .. ·
This phase concentrates the evaluatiOn of the internal
compliance
on
organization's
¢ontro]~,
tests
of
in accordance with the Single Audit Act and certain provisior~ of laws,, regulations, contracts and
grants. .' . .~ · ~
!
Internal Controls
We will ob~rt~ an understanding and evaluate the Cit~ of Bakersfield's internal control s~ructure
and test transactions as deemed necessary.. The Si~tificant internal control cycles we will
evaluate are the following: "
I ~ Billin§s/Receivables/Cash Receipts
~ Purchasin§/?ayables/Cash Disbursements
~ Payroll
i ~ Bud§et
~ Ci~ of Bakersfield's Investment Pool Interest Allocation
·
Single Audit
· - We will test the requirements of applicable programs and perform appropriate tests.
I Other Compliance
The emphasis of these tests Will be' on certain provisions' of laws,' regulations, contracts and grants
~ as determined during our planning stage.
i
.J This phase includes substantive testing of balances, emphasis On the reporting aspect, assurance that
all appropriate disclosures are'made and development of appropriate findings and
] 'recommendations. In order to accomplish these tasks, the following approach will be taken:
~ Substantive testing of material account balances is Performed in order to ensure
appropriateness.
· ~ Financial statements and the notes to the financial statements are finalized.
c2 An exit conference is convened with appropriate personnel to summarize the audit and
! to discuss recommendations the City of Bakersfield should consider.
.j ~ A presentation is made before the City Council to present the audited financial
statements.
'
LEVEL. OF PARTICIPATION FROM ciTY OF BAKERSFiELDSTAFF
The.level 'of partidpation' from the City of Bakersfield staff will be consistent with respect to the
schedules, confirmations and support documentation provided to your current auditors and reviewed by
our firm during f-he pre-proposal conference.
PROPOSED TIMETABLE OF ENGAGEMENT
Date Task/Deliverable
May 31, Entrance conference with the City' of Bakersfield's
initial liaisons and appropriate management
pers?nnel. Discuss timing of the audit and
assignment of schedules to be performed. Establish
overall liaison for the audit and make arrangements
for workspace and other needs of the auditor.
july 4-15 Document and evaluate our understanding of the
control environment, accounting system, and internal
controls.
July4-15 Complete aUdit planning,, systems documentation,
testing of major transaction cycles, and single audit
compliance testing.
July 15 Progress conference with the City of Bakersfieid's
Finance Personnel and other appropriate management
personnel to summarize the results'of the preliminary
review and to identify key internal controls or other
matters to be tested.
sep 19-Oct 21 Perform final year-end fieldwork and propose final
adjustments. 'Conduct exit conference with the
Finance Director and appropriate management
personnel to summarize the results of the fieldwork'
and to review significant findings.
October 21-24 Receive DRAFT financial statements and all. required
supplementary schedules. Provide the city with notes
to the basic financial statements.
October 31 Provide in FINAL form all required reports to the City
of Bakersfield. .
CITY OF WOODLAKE
Scope of Services: Conducted financial and compliance' audits of the general-purpose
financial statements. Issued separate reports for the Single Audit and
Redevelopment Agency.
Years Served: Fiscal years ended June 30, 1994 - Present
Partner -In-Charge: ' Justin Morales Jr., Partner in Charge
Total Staff Hours: ~ 400 Average
Contact: Mr. Bill Lewis
City Administrator
350 N. Valencia
Woodiake, CA 93286
(559) 564-8055
.. blewis@ci.woodlake.ca.us
CITY OF AVENAL
Scope of Services: Conducted financial and compliance aUdits of the· general-purpose
financial statements. Issued separate reports, for the Single Audit and
Redevelopment Agency. Prepared Transaction Reports required by the
State Controller's office for the City, Redevelopment Agency and the
Annual Street RePort. We also 'prepared the Annual Statement of
Indebtedness and the Annual Housing Report.
Years Served: Fiscal years ended June 30,1994 - Present
Partner -In-Charge Justin Morales Jr., Partner in Charge
Total Staff Hours: 600 Average .
Contact: .Ms. ESther Strong
Finance Director.
919 Skyline Boulevard
Avenal, CA 93204
(559) 386-5766
estrong@cityofavenal.com
- 27'-
CITY OF CORCORAN
Scope of Services: Conducted financial and. compliance audits of the general-purpose
financial statements. Issued separate' reports for the Single Audit and
Redevelopment Agency. '
Years Served: Fiscal years ended jUne 30,1994 - Present
Partner -In-Charge: · Justin Morales Ir., Partner in Charge
Total Staff Hours: 500 Average
Contact: Ms. Joyce Venegas
Finance Director
1033 Chittenden Ave.
Corcoran, CA 93202
(559) 992-2151
. JVenegas@co.kings.ca.us
CITY OF KINGSBURG ·
Scope of Services: Conducted financial and compliance audits of the general-purpose
financial statements. Issued separate reports for the Single Audit and
Redevelopment Agency. Prepared Transaction Reports required by the
State Controller's office for the City, Redevelopment Agency and the
.- Annual Street Report. We also prepared the Annual Statement of
Indebtedness and the Annual Housing Report.
Years Served: Fiscal years ended June 30, 2002 - Present
. Partner -In-Charge: Justin Morales Jr? Partner in Charge
Total Staff Hours: 325 Average
Contact: Mr. Don Jensen
Finance Director
1401 Draper Street.
Kingsbuxg, CA 93631
(559) 897-5821
djensen@clearskye.net
CITY OF ARVIN
Scope of Services: Conducted financial and compliance audits of the general-pUrpose
financial statements. Issued separate reports for the Single Audit and
Redevelopment Agency.
Years Served: Fiscal year ended June 30, 2003 - Present
Partner -In-Charge: justin Morales Jr., Partner in Charge
Total Staff Hours: 450 Average ·
Contact: Mr. David Powell
200 Campus Drive
Arvin, CA 93203
(661) 854-3385
dpowell123@msn.com
CITY OF TAFT
Scope of Services: Conducted financial and compliance audits of the general-purpose
financial statements. Issued-separate reports for the Single Audit,
Redevelopment Agency, and Waste Water Treatment Plant.
Years Served: Fiscal year ended june 30, 2004 - Present
Partner -In-Charge: Justin Morales Jr., Partner in Charge
Total Staff Hours: 450.~verage
Contact: Ms. Betty Napier
209 E. Kern
Taft, CA 93268
(661) 763-1350
bnapier-tch@bak'rr'c°m
CITY OF LEMOORE
.Scope of serViceS: Conducted financial and. compliance audits of the .general-purpose
financial statements. Issued separate reports for 'the Single Audit and
Redevelopment Agency.
Years Served: Fiscal year ended June 30, 2004 - Present
Partner-In-Charge: Justin Morales Ir., Partner in Charge
Total Staff Hours: 700 Average
Contact: Ms. Nancy Cota
119 Fox Street
Lemoore, CA 93245
(559) 924-6707
ncota@lemoore.com
COUNTY OF FRESNO
Scope of Services: Conducted financial and compliance audits .of the basic financial
statements (Comprehensive Annual Financial Report- CAFR) and assisted in
-implementation of GASB 34. CAFR received 'the ~GFOA Certificat~ of
· ~ Achievement for all years indicated. Issued separate reports for the Single
Audit, Treasury Investment Policy, OCJP Grants, Quarterly Cash coUnts,.
Transportation (Measure C) funding, Violent Offender Grants,~ Children
and Family Commission .contracts, American Avenue Disposal Site and.
ApprOpriation Limit Calculation.
'
Years Servedi Fiscal year ended lune 30, 2000 - Present
Total Staff Hours: 2,000
Crow, CPA / Nick Subedar
Contact:
Ms.
Vicki
Auditor-Controller/Treasurer-Tax Collector
2281 Tulare St.
Fresno, CA 93271
(559) 488-3609
VCrow~co.fresno.ca.us / NSubedar~co.fresno.ca.us
"
_~M. ~r~n a~' Conq~ny LLP
-30- " ...
'COUNTY OF TUL.,s..R~
Scope of Services: " Conducted financial and compliance audits of the basic financial
statements (ComprehensiVe Annual Financia! Report- CAFR) and ass/steal in
· implementation of GASB 34. CAFR ~received the GFOA Certificate of
Achievement for all years indicated. Issued separate reports for the Single
Audit, Treasury Investment Policy,. OCJP Grants, Quarter!y Cash C°unts,
Violent Offender Grants, GANN and Appropriation Limit CalcUlation.
"
Years Served: Fiscal year ended June 30, 2004 - Present
Partner -In-Charge: Justin Morales Jr., Partner in Change'
Total Staff Hours: ' 900
Contact: Ms. Carol Pightling
Chief Accountant .
2800 W. Burrel Ave.
Visalia, CA 93291
(559) 733-6345
cpightli@co.tulare.ca.us
We certify that we have not had professional relationships involving the City of Bakersfield or
any of its agencies or component units within the past 5 years.
We further certify that we do not have any clients at this time that have any financial interest in
the outcome of the proposed audit.
The engagement partner for this proposal is Justin Morales, Jr., CPA. Mr. Morales .is a duly
licensed Certified Public Accountant in California and has been involved in audits of California
governmental agencies for over 13 years. All staff assigned to the job would meet the G.A.O.'s
governmental auditing continuing education requirements.
During our last quality control review, which included a review of specific government
engagements, we received an unqualified opinion - the highest level of assurance possible. Please
refer to our Peer Review Report on page 2.
Desk reviews of our audits, performed by the U.S. Department of Labor, Inspector General,
California State Controller's Office, Department of Education, Office of the Auditor General, and
the Office of Criminal Justice Planning have all resulted in our reports being accepted as
submitted.
.Our firm does not have a record of substandard audit work nor any outstanding claim of
substandard work or unsatisfactory performance pending with the State Board of Akcountancy,
nor does any employee proposed to be assigned to the City of Bakersfield audit. There have not
been any positive enforcement actions or other matters that would reflect on our professional
qualifications, including any action for substandard audits taken by a federal inspector general.
_~ , M. 6r~m and C~mln~ny ~
i PROPOSING FIRM GUARANTEES
· i I. The proposing firm certifies it can and will provide and make available, as a minimum, all
services set forth in Section II, Nature of Services Required.
Name (typed)i Justin Morales, Jr.
Title: Partner
Firm: M. Green and Company LLP
? Date: April 4, 2005
PROPOSING FIRM WARRANTIES
A. The Proposing firm warrants that it is willing and able to comply with State of California laws
with respect to foreign (non-state of California) corporations.
B. The Proposing firm warrants that it is willing and able to obtain an errors and omissions
insurance policy providing a prudent amount of coverage for the willful or negligent acts, or
omissions of any officers, employees or agents thereof.
C. The Proposing firm warrants that it will not delegate or subcontract its responsibilities under an
" agreement without prior written permission of the City of Bakersfield.
D. The Proposing firm warrants that all information provided by it in connection with this proposal
! is true and accurate.
Name (typed): Justin Morales, Jr.
Title: Partner
Firm: M. Green and Company LLP
Date: April 4, 2005
CITY OF BAKERSFIELD
TOTAL ALL-INCLUSIVE MAXIMUM PRICE
PROPOSAL FOR PROFESSIONAL
AUDITING SERVICES
FOR THE FISCAL YEAR ENDED JUNE 30, 2005
WITH OPTIONS TO EXTEND THE CONTRACT
FOR THE YEARS 2006,' 2007, 2008 AND 2009
Mayer Hoffman M¢Cann P.C.
5060 California Avenue, Suite #800
Bakersfield, CA 93309
(661) 325-7500
(661) 325-7004 - FAX
Contacts:
.Benjamin P Reyes, Shareholder
E-mail: breyes@cbiz.com
April 8, 2005
Mayer Hoffman McCann P.C.
An Independent CPA Firm
SEALED DOLLAR COST BID
April 8,2.005
Mr. Nelson Smith
Assistant Finance Director
City of Bakersfield
1501 Truxtun Avenue
Bakersfield, Ca. 93301
We submit the following in resPonse to your request for proposal:
Full
Financial Statements: Scope Alternate A
City- Wide - CAFR $ 45,408 $ 54,490
Redevelopment Agency - AFR. 11,552 '12,707
PFA-AFR 11,008 11,008
.Compliance Reports:
Single Audit 10,256 10,256
Wastewater Management P1an 2,032 2,032
80,256 90,493
Less: initial year discount (8,026) (9,049)
$ 72,230 $ 81,444
We agree to perform additional services at the rates quoted in our proposal except for work that
might be performed during our peak season. We consider November to April to be our peak season
and respectfully request that the discounted rates in our proposal be negotiated prior to the
performance of any additional work.
SOUTHERN CALIFORNIA LOCATIONS
5060 CALIFORNIA AVenUE, SUITE 800 · BAKERSFIELD, CA 93309 · PH 661.325.7500 · FAX 661.325.7004
11601 WILSRIRE BOULEVARD, SUITE 2300 * LOS ANGELES, CA 90025 * PI-{ 310.~68.2000 · FAX 310.268.2001
300 ESPLANADE DRIVE, SUITE 250 · OXNARD, CA 93036 · Pa 805.988.3222 · FAX 805.988.3220
City of Bakersfield Sealed Dollar Cost Bid
Page 2
We are unable to provide an estimate for the compliance report for the audit of the Redevelopment
Agency. However, our best guess would that at least 30% of our estimated cost would represent
work related to compliance, and this amount is included in our' overall cost estimate.
Our cost estimate for the single audit is based on performing audit procedures for two major
programs. If, based on our professional judgment, the scope is expanded to include the testing of
additional programs; we will discuss this with you and provide you with a cost estimate prior to
starting the additional procedures.
We certify that the person signing the proposal is entitled to represent the firm, empowered to
submit the bid, and authorized to sign a contract with the City of Bakersfield.
~ .,
I .~ /' /J / ~' /
Benjamin P Reyes, CPA
Shareholder
MAYER HOFFMAN MCCANN
CERTIFIED PUBLIC ACCOUNTANTS
City of Bakersfield Sealed Dollar Cost Bid
Page 3
City of Bakersfield Schedule 1
Summary Schedule of Professional Fees and Expenses
Professional Staffby Hours, Hourly Rates, and Total
For the Audit of the June 30, 2005 Financial Statements
Standard Quoted
Hourly Hourly Total
Hours. Rates Rates 2004
Shareholder 56 $210 $168 $ 9,408
Manager 66 160 $128 8,448
Supervisory staff 312 140 $112 34,944
Other 312 110 $88 27,456
Total for services described 746 80,256
Less: initial year discount (8,026)
Total all-inclusive maximum price for 2005 $ 72,230
MAY£R HOFFMAN MCCA.'~N
CERTIFIED PUBLIC ACCOUNIANTS
City of Bakersfield Sealed Dollar Cost Bid
Page 4
\
City of Bakersfield Schedule 2
Summary Schedule of Professional Fees and Expenses
Combining Schedule for All Services
For the Audit of the June 30, 2005 Financial Statements
Sen'ice to be Provided I-Irs Sch.No. Amount
Comprehensive Annual Financial Report 412 3 $ 45,408
Redevelopment Agency 112 4 11,552
Public Financing Authority 106 5 11,008
Single Audit 98 6 10,256
Wastewater Management Plan 18 7 2,032
Total for services described 746 80,256
Less: initial year discount (8,026)
Total all-inclusive maximum price for 2005 746 $ 72,230
City of Bakersfield Schedule 3
Schedule of Professional Fees and Expenses
Supporting Schedule For Comprehensive Annual Financial Report Audit
For the Audit of the June 30, 2005 Financial Statements
Hourly Total
Hours Rates 2004
Shareholder 36 , $168 $ 6,048
Managers 56 128 7,168
Supervisor 168 112 18,816
Other 152 88 13,376
Total price 412 $ 45,408
MAYER HOFFMAN MCCANN
CERTIFIED PUBLIC ACCOUNTANTS
City of Bakersfield Sealed Dollar Cost Bid
Page 5
City of Bakersfield Schedule 4
Schedule of Professional Fees and Expenses
Supporting Schedule For R.DA Audit
For the Audit of the June 30, 2005 Financial Statements
Hourly Total
Hours Rates 2004
Shareholder 8 $168 $ 1,344
Managers 0. 128 _
SuPervisory staff 44 112 4,928
Other 60 88 5,280
Total price 112 $ 11,552
'City of Bakersfield Schedule 5
Schedule of Professional Fees and Expenses
Supporting Schedule For PFA Audit
For the Audit of the June 30, 2005 Financial Statements
Hourly Total
Hours Rates 2004
Shareholder 4 $168 $ 672
Managers 10 128 1,280
Supervisory staff 40 112 4,480
Other 52 88 4,576
Total price 106 $ 11,008
MAYER HOFFMAN MCCANN
CERTIFIED PUBLIC ACCOUNTANTS
City of Bakersfield Sealed Dollar Cost Bid
Page 6
City of Bakersfield Schedule 6
Schedule of Professional Fees and Expenses
Supporting Schedule For Single Audit *
For the Audit of the June 30, 2005 Financial Statements
Hourly Total
Hours Rates 2004
Shareholder 6 $168 $ 1,008
Managers 0 128 -
Supervisory staff 48 112 5,376
Other 44 88 3,872
Total price 98 $ 10,256
* Estimated for two major Pro,ams
City of Bakersfield Schedule 7
Schedule of Professional Fees and Expenses
Supporting Schedule For Wastewater Management Plan
For the Audit of the June 30, 2005 .Financial Statements
Hourly Total
Hours Rates 2004
Shareholder 2 $168 $ 336
Managers 0 128 -
Supervisory staff 12 112 1,344
Other 4 88 352
Total price 18 $ 2,032 ,
MAYER HOFFMAN MCCANN
CERTIFIED PUBLIC ACCOUNTANTS
CITY OF BAKERSFIELD
PROPOSAL FOR PROFESSIONAL
AUDITING SERVICES .
FOR THE FISCAL YEAR ENDED $UNE 30, 2005
'WITH OPTIONS TO EXTEND THE CONTRACT
FOR THE YEARS ENDED JUNE 30, 2006,2007,2008 AND 2009
Mayer H6ffman McCann P'C.
5060 California Avenue, Suite #800
Bakersfield, CA 93309
(661) 325-7500
(661) 325-7004 - FAX
Contacts:
Benjamin P Reyes, Shareholder
E-mail: breyes@cbiz.com
April 8, 2005
._~
CITY OF BAKERSFIELD
TABLE OF CONTENTS
GENERAL INTRODUCTION
PROFILE OF MAYER HOFFMAN MCCANN P.C. 5
MANDATORY TECHNICAL PROPOSAL REQUIREMENTS
INDEPENDENCE 8
LICENSED TO PRACTICE IN CALIFORNIA 8
FIRM QUALIFICATIONS AND EXPERIENCE 8
AUDITOR'S sTAFFING AND QUALIFICATIONS 12
SIMILAR ENGAGEMENTS WITH OTHER
GOVERNMENTAL ENTITIES 20
AUDIT APPROACH
.......................................................................................................... 23
SPECIFIC AUDIT APPROACH 30
IDENTIFICATION OF ANTICIPATED POTENTIAL AUDIT PROBLEMS ............. 32
REPORT FORMAT
............................................................................................................. 2
APPENDIX A (PROPOSER GUARANTEES) ........................................................................ 33
APPENDIX B (AUDITORS' REPORTS) ................................................................................ 36
APPENDIX C (EXTERNAL CONTROL REVIEW) ......................... ' ..................................... 43
APPENDIX D (ACCOUNTING TODAY ARTICLE) ..................... ~ ...................................... 45
Mayer Hoffman McCann P.C.
',. An Indel)enden! CPA Firm
April 8,2005
Mr. Nelson Smith
Assistant Finance Director
City of Bakersfield
1501 Truxtun Avenue
Bakersfield, Ca. 93301
Thank you for inviting Mayer Hoffman McCann P.C. ("MHM") to offer a proposal for
professional services for the City of Bakersfield (the City). We are excited about the prospect of
serving the City.
Scope of the audit
We are pleased to present our proposal for financial accounting & auditing services to the City of
Bakersfield and its component units for the year ended June 30, 2005 and optional years
2006,2007,2008 and 2009. We understand that we will audit the basic financial statements and
perform certain limited procedures with respect to required supplementary information and
supporting schedules and statements. At the conclusion of our audit, we will issue an opinion on
the basic financial statements and an "in relation to" opinion on the supporting schedules and
statements. We will disclaim any opinion on the management discussion and analysis.
We will test the schedule of expenditures of federal awards in accordance with the 1996 Revised
Single Audit Act and OMB Circular A-133 and issue an "in relation to" report on the schedule as
a result of our audit of the basic financial statements.
· Why Mayer Hoffman & McCann
This proposal has been prepared to demonstrate our commitment to the project as well as our in-
depth resources and extensive experience in auditing a City government such as yours. As you
read our proposal, please consider the following:
· Our engagement shareholder/partner, Benjamin Reyes has the requisite
.
experience in the government industry that will provide that "extra assurance"
that your audit is performed within the new spirit of compliance as required by the
recently amended (2003) Government Auditing Standards. In addition, Ben will
be on-site to provide "hands-on" supervision and extensive "face-to-face"
interaction with City personnel.
We are local and easily accessible to yom: staff. Jennifer Haney is a shareholder in
our firm and will be the coordinating shareholder on the engagement for our
Bakersfield office.
Southern California Locations
· 5060 California Avenue, Suite 800 · Bakersfield, CA 93309 · ph 661.325.7500 · fax 661.325.7004
11601 Wilshire Boulevard, Suite 2300 · Los Angeles, CA 90025 · ph 310.268.2000 · fax 310.268.2001
300 Esplanade Drive, Suite 250 · Oxnard, CA 93036 · ph 805.988.3222 · fax 805.988.3220
City of Oxnard
Page 2
· Last but not least, we would like you to keep in mind that due to recent events, the
responsibility upon the audit committee to "select the external auditor" has been
~ given a greater emphasis. We have read your evaluation procedure and appreciate
~ your emphasis on the quality of service and the quality of the engagement team
'and specialist to be assigned to the engagement, and not necessarily on. the
quantity of government audits. Our local offices currently perform the audits of
buy.corn, a successful dotcom company, Grimway Farms, one of the largest
carrot producer and distributor in the world, and the Prison Industry Authority,
: one of the largest government owned manufacturing entity in California. In
i addition, we have local experience: we audit the City of Oxnard, City of
Tehachapi, City of Delano and Kern High School District. We-are.proud to
~ say that the hours we have proposed to perform this audit reflects our concern for
~ quality audits and the qualification of the professionals assigned on this
engagement also reflects this concern for quality service to the City of
· Bakersfield.
Other Commitments
We are committed to perform all work required in this proposal in accordance within City
specified time periods.
This proposal is a firm and irrevocable offer for sixty (60) days.
Thank you for the privilege of presenting this proposal. We will work diligently to earn your
'i
] . trust and confidence.
Very truly yours,
?
i MAYER HOFFMAN McCANN P.C.
Benjamin P. Reyes, CPA
MAYER HOFFMAN MCCANN
CERTI~IF.J~ PUBLIC ACCOUNTANTS
CITY OF BAKERSFIELD
GENERAL INTRODUCTION: PROFILE OF MAYER HOFFMAN MCCANN P.C.
Mayer Hoffman McCann P.C., Certified Public Accountants, is a national accounting firm.
We provide high quality, efficient and timely audit and accounting services to'assist our clients
in a variety of industries. Established in 1954 in Kansas City, Missouri, Mayer Hoffman McCann
has provided accounting, auditing, tax, and related professional services to diverse private,
public, .commercial and not-for-profit organizations.'
Mayer Hoffman McCarm P.C. (MHM) expanded into a national CPA fu'm in.2001 by combining
the offices 'of established accounting practices. MHM currently has offices in the following
locations:
Arizona: Phoenix Ohio: Cleveland
California: Bakersfield, Los Angeles, Oxnard, Kansas: Topeka, Wichita
'San Diego and San Jose Pennsylvania Philadelphia
Colorado: Boulder, Denver New York: City of New York
Floricla:. Boca Raton Utah: Salt Lake City
Illinois: Chicat!;o, Elm Grove Missouri: St Louis, Kansas Cit~
By following this path of business expansion, we have quickly developed a national accounting
practice that is staffed with experienced professionals with local -knowledge. As a national
accounting firm, we have the resources to successfully complete any engagement, regardless of
size, complexity, or industry. Our professionals have the experience, flexibility, and
commitment necessary to efficiently and effectively serve our clients.
For your benefit, included in this proposal is an article from Accounting Today identifying CBIZ
MHM as one °fthe top ten (10) accounting firms in the United States.
Our Clients and Our Service Philosophy. Our representative national clients and our service
philosophy is as follows:
REPRESENTATIVE CLIENT LIST
Applebee's International, Inc National Mercantile Bank
Blistex Inc. PF Chang's
Caterpillar Ping, Inc
Chevys ' Qualcomm
Cleveland Browns Sara Lee
Federal Deposit Insurance Cor Sun MicroSystems
Grimmway Farms Tootsie Roll
Marriot International Tromp Pla?a
Monsanto Company World Series of Golf
CITY OF BAKERSFIELD
We believe that the skills and experience of the professionals performing the work drive the
success of an engagement. Establishing and maintaining a successful business relationship relies
on two key factors - the desire to provide the' best possible client service and an in-depth
knowledge of our client's service needs. To ensure that you receive the highest quality service,
we selected the members of our engagement team based on their extensive background in
auditing similar governmental entities and federal compliance programs, and on their high
potential for making a significant contribution to supporting your goals. Our team's technical'and
practical knowledge, combined with the desire to serve you responsively and to help you
prosper, enables us to provide you with the support and expertise you should expect from your
accounting and consulting firm. Our professionals are dedicated to exceptional' client service,
have an unparalleled commitment to quality, work together as a team, and recognize the
importance of people.
Commitment to the Government Sector
Our professional staff understands the government industry and related professional standards.
We are very knowledgeable about Generally Accepted Government Auditing Standards
(GAGAS) as set forth by the' Comptroller General of the United States, as well as the criteria
established through the Governmental Accounting Standards Board (GASB), Federal Office of
Management and Budget Circulars, AICPA Audit Guides and Statements of Positions, Federal
Compliance Supplements, Transportation Development Act requirements, Guidelines for
Compliance Audits of California Redevelopment Agencies, and other technical material as
deemed necessary. Our firrn monitors our professional staff to ensure that they comply with the
continuing education requirements and to stay abreast of the dynamic government environment.
Commitment to Quality
Mayer Hoffman McCann's dedication to quality through training is evidenced by its
commitment to a firm wide training program for its shareholders, managers, supervisors and
staff. Here are several key features of our national training program:
· Designation of a Director of National Training to supervise a training program on
a national basis.
· Participation by all MHM offices in MHM's annual training seminar.
· Required Participation by all audit shareholders in the AICPA's Annual
Conference "National Advanced Accounting & Auditing Technical Symposium".
· . Participation in nation-wide accounting and auditing updates.
· Participation by shareholders and managers as instructors in the annual training
seminar.
· Participation by all supervisors and staff in the annual training seminar in
accordance with MHM's designated "experience" level.
Commitment to quality via internal training is not sufficient; MHM recognizes this need by
providing'the following research tools on a national basis:
· ' Subscription to Thomson's PPC Reference Library which include approximately
50 audit and accounting guides such as Audits' of Local Governments, Single
6
CITY OF BAKERSFIELD
Audits, Audits of Not for Profits, HUD Audits, Guide to Implementing GASB 34,
Guide to Preparing Governmental Financial Statements, etc.
· Subscription to Thomson's PPC Reference Library, which include all FASB,
GASB, and AICPA publications.
· Subscription to Aspen'Publications" Accounting ReSearch'Manager, a recognized
research engine for audits of public companies.
We enforce .this commitment to quality by means of the following procedures:
· Designation of a Director of Quality Control to review compliance with MHM
policies and procedures by means of an annual inspection of Various offices
throughout the country.
· Establishment of an acceptance committee to monitor the quality of clients
accepted by MHM shareholders.
* Establishment of a technical committee to direct a firm wide policy with respect
to the various accounting and auditing pronouncements.
* Mandatory second shareholder pre-issuance review of all audit repOrts.
Membership
Our fu-m is a member of the Government Finance Officers Association (GFOA), California.
Society of Municipal Finance Officers (CSMFO), American Institute of Certified Public
Accountants (AICPA), the California Society of CPAs, and the SEC Practice Section of the
AICPA.
We have also been approved by the United States General Services Administration as a provider
of Financial and Business Solutions.
Range of Service
As a full-service certified professional accounting and management consulting firm, all of our
offices provide management consulting auditing, accounting, and tax services to governmental
and nonprofit organizations, as well as to corporations, partnerships, and individuals.
CITY OF BAKERSFIELD
MANDATORY TECHNICAL PROPOSAL REQUIREMENTS
INDEPENDENCE
Mayer Hoffman McCann P.C., Certified Public Accountants is independent of the City of
Bakersfield as defined by U.S. Generally Accepted Auditing Standards and the U.S; General
Accounting Office's Government Auditing Standards (2004). We are also independent of the
City of Bakersfield and its component units as def'med by those same standards.
The following represents professional relationships for the past five years of the Firm,
Shareholders, managers and other key members of the engagement team:
City of Bakersfield and its
component units I$°ne No conflict exist [
In addition, we will monitor all services provided to the City to ensure that we meet current and
future standards for independence.
LICENSED TO PRACTICE IN CALIFORNIA
Mayer Hoffman & McCann P.C. and all assigned key financial statement audit professional are
properly licensed to practice in the State of California.
FIRM QUALIFICATIONS AND EXPERIENCF,
The Mayer Hoffman McCann P.C. partner firms are comprised of in excess of one hundred
individual CPA shareholders (partners), whose expanse of diverse experiences includes
significant engagements with commercial and governmental and OMB Circular A-133 clients.
We estimate that approximately fifty to seventy of our CPA professionals have experience with
governmental auditing and they bring with them excellent reputations and the attributes of
technical ability, proactive creativity, and integrity.
Commercial Auditing Experience. MHM is registered with the Public Company Accounting
Oversight Board (PCAOB) and is a member of the Center for PUblic Company Audit Firms
(known prior to January 1, 2004 as the SEC Practice Section) of the American Institute .'of
Certified Public Accountants and serves public audit clients across the United States. As a
member of the PCAOB and the Center for Public Company Audit Firms, fu'ms must follow more
stringent quality standards for auditing publicly held companies and undergo inspection by the
PCAOB (for public company clients) and a peer review (for their non-public clients) of their
policies and standards to assure that training, supervision of work and continuing education
results in a strong quality control system for their attest practices. A peer review is an audit of a
public accounting fu'm's quality control system by Certified Public Accountants from other
fu-ms. MHM has always received excellent evaluations and "clean opinions" on these audits.' .
CITY OF BAKERSFIELD
Mayer Hoffrnan McCann P.C. has the capability of servicing companies of all sizes including
public companies that report to the Securities and Exchange Commission ("SEC") as well as
small, non-public, family owned businesses. In addition, we focus on helping companies with all
of their attestation needs (reporting on internal controls under FDICLA, SAS 70 reports, benefit
plans, and .others). In the aggregate, the assurance practice provides audit services to thousands
of companies nationwide. Each of our clients is provided the best professional service and care
with the knowledge that the most important business is your b~sinesS.
Governmental Auditing Expertise. Our firm's philosophy is one of commitment to the goals
and objectives of Afl.re'native Action and is continually seeking to fred staff fi.om diverse
backgrounds encompassing all races, creeds, and ethnicity. As an example of our commitment to
excellence in governmental accounting and auditing, we present for your review, a brief
summary regarding our Bakersfield, California office and our Chicago, Illinois office.
Ben Reyes and David Barrash are Directors of Governmental Services for our Bakersfield,
California and Chicago, Illinois office, respectively.
Both Directors have devoted significant time and resources in anticipation of GASB Statement
No. 34. For the past several years, Ben and David have attended numerous comprehensive
training conferences held by the Government Finance Officers' Association, and the California
and Illinois CPA Society in their respective area. Ben and David have also taught several
courses on GASB No. 34 to other professionals as part of our continuing education program. Ben
has implemented GASB No. 34 for Kern High School District, City of Delano, Delano
Community' Redevelopment Agency, City of Tehachapi, City of Tehachapi Redevelopment
Agency, City of Santa Paula, and Santa Paula Redevelopment Agency. David is currently
working, with his clients, the Village of Rosemont, Illinois and the Village of West Dundee,
Illinois, on their GASB No. 34 implementations.
As part of our commitment to the government industry, Mr. Reyes has participated on the
Government Accounting and Auditing Committee (GAAC) fOr the California Society of CPAs,
Bakersfield Chapter, and the GAAC at the state committee level; the California Society of
Municipal Finance Officers (CS,MI:O); and the Governmental Finance Officers' Association
(GFOA). As part of his commitment, Mr. Reyes has volunteered his time for the last fifteen
years to the Special Review Committees of the GFOA and the CSMFO for their respective
"excellence in f'mancial reporting" program. As a reviewer, Mr. Reyes reviews comprehensive
annual f'mancial reports submitted by cities, counties, and special districts for compliance with
GFOA's and CSMFO's financial reporting standards. In addition, he has assisted the cities 'of
Delano, Fresno, Bakersfield and the Counties of Kern 'and Tulare in the preparation of their
Comprehensive Annual 'Financial Report and will be available to do the same for the Cits,. In
addition, Ben has recently co-authored with Practitioners Publishing Company (PPC) '.tn drafting
and revising the publication Risk Based Audits of Local Governments. This audit publication is
probably used by a majority of governmental auditors in the United States.
CITy OF BAKERSFIELD
Our Southern California Network of Offices and Assigned Staff.
The City will be serviced by MHM P.C.'s southern California group of offices located in
Bakersfield, Los Angeles, and Oxnard. The southern California group consists of Shareholders,
managers, supervisors, and staff mounting to 106 professionals. Professionals by classification
consist of the following:
ALL AUDIT
Shareholders 21 5 '
Managers 16 6
Supervisors 22 12
Staff 47 32
Total 106 55
Our Clients. The following is a representative list of some of our local government clients
(Southern California Clients in Bold):
Aston Township City of Silver Lake
Borough of Collingdale City of Tehachapi, Ca
Borough of Colwyn City of Tehaehapi Redevelopment Agency
Borough of Folcroft County of Tulare
Borough of Prospect Park Haverford Township
Chester Water Authority Kern High School District
City of Chester, Pa Lower Chichester Township
City of Columbus Marple Township
City of Concordia Radnor Marple Sewer Authority
City of Delano, Ca · Ridley Township
City of Delano Redevelopment Agency Ridley School District
City of Flint Hill, Mo Southeast Delco School District
City of Highland Township of Thornbury
City of Lancaster Township of Newton
City of Overland Park, Ks Township of Warmister
City' of Overland Park Convention Bureau Tale River Tribal Council
City of Philadelphia Municipal Pension Fund Tale River Housing Authority
City of Philadelphia, Division of Aviation PFC Village of Rosemont
City of Santa Paula, Ca Village of Schaumburg
City of Santa Paula Redevelopment Agency Village of West Dundee
CITY OF BAKERSFIELD
External Quality Control Review
In addition to our range of expertise and client service orientation, our success is attributable to
the high standards we set for ourselves. For example, Mayer Hoffman McCann P.C. is a
member of the Center for Public Company Audit Firms of the American Institute of Certified
Public Accountants (formerly known as the SEC Practice Section). This means several things.
First, we ~must follow the more stringent quality standards in our work as required of CPA frans
auditing publicly held companies. Second, our f~n is required to undergo a peer review of our
policies and standards to assure that our training, supervision of work and continuing education
results in a strong quality control system for our accounting practice. A peer review is basically
an audit of Mayer. Hoffman McCann P.C.'s quality control system by CPAs from other fu'ms.
We have always received excellent evaluations on these reviews. During our last quality control
review, we received an unmodified report - the highest level of assurance possible.
Litigation Status
There are.neither any current or pending disciplinary or litigation actions against our fu'm in any
manner related to our professional activities or have there been any such actions in the past.
CITY OF BAKERSFIELD
AUDITOR'S STAFFING AND QUALIFICATIONS
Engagement Team
In conducting the financial and compliance audits for the City of Bakersfield, the engagement
team will consist of individuals having extensive background .in financial and compliance audits.
The engagement team will be comprised of the following:
Financial Audit Team
Responsibility Member
Shareholder - Engagement Benjamin P. Reyes, CPA
Shareholder - Audit Jennifer Haney, CPA
Manager/SuPervisor Stephanie Peters, CPA
Senior Auditor Ryan Diffee,CPA
;Veronica Barker
Mr. Reyes will be the engagement shareholder and will be responsible for coordinating all
services to the City of Bakersfield. Ben will provide guidance and consultation on audit and
accounting matters and be responsible for suPervision and quality control of our work product.
Ben will strive to work closely with the audit committee of the City of Bakersfield, principally
through the Finance Director. The audit committee will be consulted initially to assess the
design of our audit approach and then periodically updated with the status of the audit.
Jennifer Haney will be the audit shareholder with responsibility in planning, supervision and
completion of the audit. In addition, Jennifer will be on site to provide direct supervision. ~
Jennifer will Work closely with Nelson Smith, Assistant Finance Director who will be a key
auditor's contact with the City of Bakersfield.
It is anticipated that Nelson and/or designee will also serve as liaison between City personnel and
the audit engagement team. This role will include: controlling and coordinating the distribution
of audit requests for supporting schedules, analyses, confirmations, and other information related
to the audit process; management of communication channels for responses to audit inquiries;
and general trouble-shooting.
Jennifer wili suPervise a team including the .engagement manager, senior auditor and other
professional staff. Jennifer and Stephanie will conduct and supervise all fieldwork. This will
include a substantial amount of time in the field and direct contact with City of Bakersfield's
personnel. Jennifer will also be the primary liaison between the audit engagement team and the
Finance Director's office. This role will include: control and coordination of the items
mentioned above fi.om the audit engagement team's perspective; initial discussion of all audit
issues and resolutions; initial discussions of recommendations for improvements in accounting
systems, or operational areas; and periodic status updates on the progress of our
internal
controls
work.
CITY OF BAKERSFIELD
In addition to his overall responsibility for the engagement, Ben will focus on the governmental
aspects of the audit such as the technical excellence of the CAFR, audit of the redevelopment
agency, and compliance testing under OMB circular A-133.
Stephanie Peters, CPA will be responsible for the planning of the engagement and the audit of
proprietary funds, where her extensive experience in commercial audits will be utilized. She also
will be responsible for ensuring that all work papers are reviewed and finalized for final review
by. Jennifer. 'Stephanie will interview the City's Utility billing. Supervisor to obtain an
understanding of the utility billing and collections procedures. Stephanie will also work with
Cheryl Perkins, Treasurer, to obtain an understanding of the City's Investment Policy.
Veronica Barker will be the in-charge over the audit of governmental funds. She will assist in the
internal control review of payroll and disbursements/purchasing and will interview appropriate
City personnel to obtain a thorough understanding of controls over processing and f'mancial
reporting. Veronica will work closely with Jennifer to ensure that all work papers are reviewed
and finalized for review by Jennifer Haney.
Ryan Diff.ee will be responsible for the Single Audit compliance testing and will work with the
City's Grants Manager.
They will be assisted by trained staff' in performing audit procedures such as test of controls,
compliance testing, test of account balances, etc.
Experience of the Financial Audit Team
Engagement Shareholder. Benjamin P Reyes (Ben) has worked on governmental auditing in the
last twenty years. Ben's background with California counties, cities, school districts and
community colleges provides the expertise needed to perform the services you requested. Prior to
joining Mayer Hoff.man McCann in 2002, Ben was the shareholder in charge of government
services for a large regional fu'm based in Kern COunty. In this capacity, Ben trained
governmental auditors that are currently ~recognized shareholders and managers for their
respective audit firms, In addition, Ben was the lead person in City audits, being an active
participant in CSMFO and GFOA. Ben formerly was engagement partner on audits of the City of
Fresno, City of Delano, City of Ridgecrest, City of Tehachapi, COunty of Monterey and County
of Tulare and co-partner on the audit of the County of Kern. In the mid-1990's, he assisted the
City of Delano, Omnitrans, County of Kern and County of Tulare obtain their fu'st GFOA Award
for Excellence in Financial Reporting.
From 1997 to 2001, Ben was responsible for the audit of the City of Fresno and its component
units, the Redevelopment Agency and the Employees Pension Trust. Combined, the City had
cash and investments of $2.0 billion and long-term debt of $390 million that included a Pension
Obligation Bond (POB) of $213 million. As part of the GASB 34 implementation planning, Ben
assisted the City in determining the proper accounting treatment for the POB, which Would have
had a serious negative impact on the City's net assets.
13
CiTY OF BAKERSFIELD
In 2002, Ben assisted Jennifer in the audit of the Kern High School District in implementing
GASB Statement No. 34. As part of the engagement, Mr. Reyes supervised the development of
the conversion worksheets used by the District in converting its financial information from
modified accrual to the GASB 34 model.
In 2003, Ben assisted the City of Delano in implementing GASB 34. Ben has had a long history
with the City of Delano, assisting them in various capacities thru the years. In the early nineties,
Ben assisted the City in obtaining its fu'st GFOA Award for EXcellence in Financial Reporting.
In 2003, Ben assisted the City of Santa Paula in implementing GASB 34 and at the same time,
provided assistance in establishing a fixed asset record for the City. This was a first for the City
of Santa Paula as it had always received a qualification on its audit report for not maintaining a
record of its fLxed asset.
In 2004, Ben assisted the City of Oxnard in its first timely presentation of its CAFR to the
City Council in over three years.
In 2004, Ben assisted the Prison Industry Authority in implementing GASB Statement 42
AcCounting and Financial Reporting of Impairments of Capital Assets.
Among his former and current clients are (current in bold):
Authority for Ca Cities Excess Liability Fresno Employees Retirement Systems
Bakersfield City School District Fresno Council of Governments
City of Arvin Fresno County Transit Authority
City of Bakersfield Fresno Express Transit
City of Delano Fresno Rural Transit System '
City of Clovis Golden Empire Transit System
City of Coalinga Kern Council of Governments
City of Fresno 'Kern Community College District
City of Indio Kern County Employees Retirement Assn
City of Ridgecrest Kern Health Systems
City of Santa Paula Kern Medical Center
City of Shafter Kern High School District
City of Tulare Natividad Medical Center
City of Tehachapi Omnitrans Transit
County of Kern Panama Buena Vista School District
County of Los Angeles' Prison Industry Authority
County of Monterey San Joaquin Regional Transit District
County of Tulare (special project) Santa Cruz Metropolitan Transit District
~entral Contra Costa Transit Authority Self Insured Schools of California I, II, and IH
community Health Plan of Los Angeles Yule River Tribal Council
14
CITY OF BAKERSFIELD
Assisting Shareholder. Jennifer Haney (Jennifer) has over fourteen years of accounting and
auditing experience. Jennifer's audit experience includes audits conducted under Government
AUditing Standards, the Single Audit Act as revised and OMB Circular 133. She is currently the
audit Shareholder in charge of twenty-five (25) HUD assisted projects and audits of the City of
Tehachapi, the Kern High School District, and assisted in the audit of the City of Oxnard. In
· addition, Jennifer was the technical reViewer on the audit of the City of Delano and the City of
Santa Paula.
The HUD audit referred to .above was performed in accordance with GAO and HUD Compliance
Audit Guide applicable to audits of major federal programs. In this audit, Ms Haney supervised a
manager and a senior, along with staff in performing audit procedures that involved
approximately 1200 hours.
In 2002, Jennifer was responsible for implementing GASB 34 for the Kern High School District.
· In the audit of the Kern High School District, Jennifer directly supervised the audit of the
Schedule of Expenditures of Federal Awards amounting to $25 million along with her overall
responsibility for the audit of the District's operations with annual appropriations in excess of
$100 million.
In 2003, Jennifer assisted the City of Tehachapi and its Redevelopment Agency in implementing
GASB 34.
In 2004, Jennifer assisted Ben in supervising and completing the audit of the City of Oxnard.
Manager. Stephanie Peters, CPA has over eight (8) years of accounting and auditing experience
with Mayer Hoffman McCann where she is currently a senior audit manager. We know that
Stephanie will be a valuable asset to the engagement team because of her diverse audit
background in governmental, agriculture, manufacturing, and bank audits. This expertise was
recently applied in the audits of the Kern High School District, City of Tehachapi and City of
Santa Paula. We have found her technical expertise to be valuable to us in designing audit
procedures. In the area of cash and investments, her experience in auditing financial institutions
provided the fu'm with an insight that we are starting to utilize in our governmental practice. In
addition, her ability to research complicated accounting and auditing problems, provide timely
solutions, and assist clients in the implementation of new GASB and FASB statements, is
exceptional.
Relevant recent experience for Stephanie Peters consist of the following:
· Compliance testing of expenditures of federal awards under the Revised Single
Audit Act and OMB Circular A-133.
· Supervision in the preparation of the conversion worksheets for the new reporting
model (GASB 34).
· Analysis of clients' operations, control environment, and fraud risk factors to
understand and identify 'effective internal controls and aid clients in the resolution.
of auditing, accounting and 'reporting issues through independent research .and
analysis, then prepare reports to management documenting results of audit
CITY OF BAKERSFIELD
findings and evaluation of internal controls and provide business insights and
recommendations to companies.
· FDICIA control audits on banking clients.
· Preparation and review of registration statements for initial public offerings (S-1),
quarterly (10Q) and year-end (10K) financial statements, MD&A, and footnote
disclosures to ensure they are in accordance with Generally Accepted Accounting
Principles and the regulatory requirements of the SEC.
Senior Auditors. Veronica Barker and Ryan Diffee have over four years of accounting and
auditing experience, with two years related to auditing local governments in California~ They
have audited the City of Delano, City of Santa Paula, Prison Industry Authority, San Luis Trust
(local bank), Tule River Tribal Council, and Kern Health Systems (the public health authority for
County of Kern). Veronica was the in-charge in the audits of the City of Tehachapi and Kern
High School District. Veronica performed an important role in those audits as the person in
charge of the preparation of the annual financial report, including the development of the GASB.
34 conversion worksheets for California' governmental agencies. Veronica has over 250 hours of
experience documenting control systems, interviewing client personnel, and performing single
audits of 'federal award programs. Ryan's experience with auditing federal award programs
includes Highway Planning and Construction, National School Lunch Program, and Block
Grants for the Prevention and Treatment of Substance Abuse among others. Ryan has also been
trained in the implementation of the Sarbanes-Oxley Act that requires publicly traded entities to
document their internal control system and issue a management letter with regard to their control
system with their audit.
Ryan has exceptional skills in financial statement and work paper preparations. His expertise is
based on a natural aptitude for understanding computer systems, report preparation software, and
Word and Excel. In 2003, Ryan wrote the implementation guide for MHM in its implementation
of a paperless audit system.
Representative Clients:
· City of Delano · KHSD EduCational Foundation
' Community Redevelopment Agency of · Kern Health Systems
the City of Delano · Mid Valley Recovery Services
· City of Santa Paula · San Luis Trust Bank
· Santa Paula Redevelopment Agency · Tule River Tribal Council
· City of Tehachapi · Kern High School District
· City of Tehachapi Redevelopment
Agency
Compliance Audits of Expenditures of Federal Awards
The following is a representative list of federal programs that the audit team has tested for
compliance:
CITY OF BAKERSFIELD
Grantor Department Program Title CFDA No.
Agriculture Food Stamps 10.551
National School Lunch 10.555,
Education No Child Left Behind 84.010
Special Education Grants 84.027A
Housing and Urban
Development (HUD) Community Block Grants 14.228
HOME Investment Partnerships 14.239
Section 8 Housing
Justice Community Oriented Policing 16.71 (l
Labor Workforce Investment Act (WIC) 17.25S
Transportation Highway Planning and Construction 20.205
Health & Human ServicesTemporary Assistance for Needy Families 93.558
Child Support Enforcement 93.564
Medical Assistance Prol~'am 93.778
CITY OF BAKERSFIELD
Assurance of Staff Qualify over the Term of the Contract
Our assurance to the City of Bakersfield is the same assurance that we provide all of our clients
and this assurance is resident in our 'Quality Control Document. Key areas of our quality control
procedures that have a direct impact on staff quality are personnel management and professional
development. In these two areas, advancement, training, and supervision are monitored internally
to ensure the optimum in engagement performance and compliance with professional standards.
In addition, external peer reviewers review these areas for compliance with our Quality Control
Policies and Procedures. A copy of our latest peer review report is also included in this proposal.
In addition, our shareholders, managers and staff actively participate in MHM's national training
program. A discussion of MHM's national training program is included in this proposal in the
section
In addition, key members of the engagement team will review annually, the performance of the
team in relation to advancement within the team and ability to service the City in terms of client
responsibility and technical expertise.
If, during the course of the contract, circumstances require a change in the composition of the
audit team, the finn will select replacements of similar background and experience. The City
will have the right to challenge any replacement member.
Other Specialists.-From time to time as accounting or auditing issues arise; a team of specialists
across the MHM universe will be available to support the Engagement Team. The City may also
require the services of its audit fu'rn in other areas. We have identified the following
professionals to assist the engagement team on as needed basis:
Gerald Moench, CPA, (Gerald) ' will provide suppOrt 'in computer assisted audit procedures.
Gerald is proficient in the use of IDEA and ACL. Mr. Moench is also Director of Training for
MHM PC and will assist in planning and risk assessment on an as needed basis. As a member of
Audit Watch, Gerald trained over 40 CPA frans in. risk assessment.
Robert J. Leslie, CPA, (Rob) is a shareholder and director of single audit services in our Phoenix
office. Rob was a member of the Single Audit committee for the AICPA and assisted in the
editing and approving the 1996 Single Audit Revisions and changes to OMB Circular A-133. He
also participated in various speaking and training seminars at various governmental conferences
between. 1996 and 2000. Rob will. assist the team, if needed, in 'the Single Audit part of the
engagement.
Marie Ebersbacher, CPA, CFE is a Senior Manager and Certified Fraud Examiner with extensive
experience working with local governments, public and private companies in a variety of
capacities in connection with fraud risk assessments, fraud detection to litigation support and
expert witness services. Marie will assist the engagement team in performing fraud risk
assessments as required by SAS 99 on as needed basis.
CITY OF BAKERSFIELD
John H. Lenzi, CPA' is a shareholder in our Philadelphia ~office specializing in reviewing
calculations made by underwriters in relation to the issuance of refunding bonds. He. has
currently reviewed such calculations for the City of Banning, Delano, Gonzalez and Tehachapi.
In prior years, he has performed such services for the City of Philadelphia and other cities in
Pennsylvania. He is available to the engagement team for assistance in reviewing disclosures for
refunding activities such as "economic gain or loss". John is also available to the City in
performing arbitrage calculations.
Mike Harrison, CPA, of Conrad & Associa_tes is available also to the engagement team on as
· needed basis. Conrad & Associates .is one of the largest audit firms specializing in audits of cities
i in the Southern California area.
, Relevant Continuing Professional Education of the Engagement Team
!
I
The following represents the relevant representative continuing professional education of the
engagement team:
· .Single Audit Sampling and Compliance Review, U.S. Department of Education,
2004
· Deposit and Investment Risk Disclosures (GASB statement No. 40), 2004
· National Advanced Accounting and Auditing Technical Symposium, 2004 and
2003
· Fraud Detection in a GAAS Audit-.' SAS No. 99, 2003 and 2004
· GASB 34 Implementation, 2001, 2002
· Accounting and Auditing Updates, 2001, 2002, 2003
· MHM National Training Seminar for Auditors (Beginning and Advanced)
· 2002,2003, and 2004
~ · GFOA Annual Governmental GAAP Update, 2002 and 2004
· Internal Audit under the SARBANES OXLEY Act of 2002,2003
· Consideration of Internal Control in a Single Audit, 2002
!
CITY OF BAKERSFIELD
SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENTAL ENTITLES
We are proud of the service that we are providing (and have provided) to our governmental and
OMB Circular A-133 clients and encourage you to contact the references included in our
proposal. We are aware of no municipal client we have served that was not fully satisfied with
the quality and timeliness of our performance.
1. The City of Oxnard, Ventura, California is one of the fastest growing cities in
California. MHM was selected as the City's auditor because of its record .of client
service, quality and thorough audits, and most of all, timely deliveries of its work
product. This selection paid off for the City as for the fa'st time in the last five years, the
audit was completed in accordance with the City's schedule. The services we provided to
the City of Oxnard consist of an audit of the Comprehensive Annual Financial Report of
the City and its Redevelopment Agency. During the audit, we assisted the City in
correcting errors from implementing GASB 34 in prior years, which included special
assistance in the area of general fixed assets. We are proud of our relationship with the
City and the "spirit of teamwork" between City staff and our staff that made for a
successful audit effort in the first year of our contract. Our audit was performed in
accordance with generally accepted auditing standards, Government .4uditing Standards,
and the Single Audit Amendments of 1996 and OMB Circular .4-133 Compliance
Supplements.
The engagement shareholder is Benjamin Reyes and the engagement is performed from
our Bakersfield office with total engagement hours of approximately 850. The principal
client contact and reference is Orlando Capulong, Controller. His telephone number
805-385-7462.
2. The Kern High School District is one of the largest non-unified school district in
i California with a current annual budget in excess of $200 million, cash and investments
of'$200 million of which $90 million is with a component unit, and General Obligation
~ Bonds and Revenue Bonds of $160 million. We have assisted the District in the
~ preparation of its Annual Financial Report for the years ended June 30, 2002, 2003 and
2004 and those reports were issued in accordance with GASB No. 34. The scope of the
audit included an audit of the basic financial statements and compliance testing of $25
million in federal expenditures. Our audit was performed in accordance with generally
accepted auditing standards, Government .4uditing Standards, and the Single Audit
i Amendments of 1996 and OMB Circular A-133 Compliance Supplements.
The audit shareholder is Jennifer Haney and the engagement is performed from the
t Bakersfield office with total engagement hours of approximately 1000 hours. The
· principal client contact and reference is David Chalupa, CPA, Director of Fiscal Services.
He can be reached at 661-827-3131.
2O
CITY OF BAKERSFIELD
, 3. The Village of Rosemont, Illinois is a suburb of Chicago located' adjacent to O'Hare
'International Airport with a very comprehensive municipal audit, having a current annual
budget in excess of $130 million and including the-business-type activities of the Allstate
Arena (a 16,000-seat, indoor arena), the Rosemont Theatre (a' 4,300-seat theatre), the
Rosemont Convention Center (an 850,000 square foot facility), the Willow Creek Health
Club (a 93,000 square foot health and fitness facility), commercial'real estate,
water/sewer system, as well as Redevelopment Districts with Tax Increment Financing,
numerous Bond Issuances (approximately $150 million outstanding), and additional stand
alone audit of the Public Safe _ty Officers' Pension Fund.' We have issued our audits for the
.'. years ended December 31, 1991 through 2003. The audit engagement includes our
i issuance of the Village's general purpose financial statements, supplemental information,
~ and all required auditor's reports as prescribed by generally accepted auditing standards,
and is being performed in accordance with the requirements of the Yellow Book, the
{ Single Audit Act of 1984, and OMB Circular A-133, when necessary. We also issue an
' annual audit for the Rosemont Convention Bureau, Which is accounted for as a
~ component unit of the Village. At management's request, we have performed internal
~ control studies for all major programs and functions of the Village, and, as Rosemont has
extensive hotel and food and beverage taxes, we have performed periodic revenue audits
- for their hotels and restaurants. Recently, we assisted the City in implementing GASB
i 34.
The engagement shareholder is David M. Barrash, and the engagement is performed from
the Chicago, Illinois office with total engagement hours of approximately 2,000.' The
principal client contact and reference is John Hochstettler, Finance Director. His
telephone number is 847-825-4404.
The City of Delano is a city in Kern County, California with a total annual budget of $30
million. The audit is a very comprehensive audit of the City's CAFR, which also
includes an audit of a Redevelopment Agency, a Correctional Facility, and an Employees
Pension Plan. Business type activities include a Refuse Fund, Water and Sewer Fund,
Airport Fund and Transit Fund as major funds..City staff prepares the CAFR that has
received the GFOA award continuously since the early 1990's when Ben Reyes assisted
th6 City in its initial application. During the year, we assisted the City in recording an
advance refunding and related disclosures for various tax revenue bonds and a private
note in the amount of $16.5 million in addition to providing assistance in implementing
GASB No.34, Our' audit was performed in accordance with generally accepted auditing
standards, Government Auditing Standards, and the Single Audit Amendments of 1996
and OMB Circular.~-133 Compliance Supplements.
The engagement shareholder is Benjamin Reyes and the engagement is performed from
our Bakersfield office with total engagement hours of approximately 550. The principal
client contact and reference is Narciso Aguda, Finance Director. He can be reached at
661-721-3310x235.
21
CITY OF BAKERSFIELD
The City of Santa Paula is a small city in Ventura, California with a total annual budget
of $28 million. The City is a recent client for Mayer Hoffman McCann PC, with the audit
for the year ended June 30, 2004 being the second year in a multi-year contract. The
services we provided to the City of Santa Paula consist of an audit of the Annual
Financial Report of the City and its Redevelopment 'Agency. During the audit, we
assisted the City in implementing GASB 34,'which included special assistance in the area
of general fixed assets. Prior to June 30, 2003, the City did not have an auditable detail of
its general fixed assets. We are proud of our relationship with the City and the "spirit of
teamwork" between City staff and our staff that made for a successful audit effort in the
fa'st year of our contract. Our audit was performed in accordance with generallY accepted
auditing standards, Government Auditing Standards, and the Single Audit Amendments
of 1996 and OMB Circular A-133 Compliance Supplements.
The engagement shareholder is Benjamin Reyes and the engagement is performed fi.om
our Bakersfield office with total engagement hours of approximately 550. The principal
client contact and reference is Tina Rivera, Finance Director. Phone number is 805-933-
4206.
We also encourage you to contact the following former clients of Benjamin P Reyes:
CLIENT/SERVICES PROVIDED/HOURS CONTACT PERSON
City of Fresno (1997 to 2001 with former fn'm) Mr. Greg Wiles, CPA, Treasurer
CAFR, Redevelopment Agency Audit, Single Audit ' (559) 621-7004
Employees Retirement System, Health and Benefits Audit
2350 Hours
Kern Council of Government (1991 to 2001) Mr. Dan'el Hildebrand
Annual Financial Report; TDA Audits for Kern County ChiefAdminislxative Officer
$50 Hours (661) 861-2191
22
CITY OF BAKERSFIELD
AUDIT APPROACH
Our financial audit approach is distinguished from other approaches because it is based on a
conceptual framework recognizing-that every organization and operating environment is
different. Consequently, a thorough understanding of the organization's structure, strategic plans,
operations, and environment is required to tailor an audit program to achieve all audit objectives
in an efficient and effective manner.
The resulting audit plan minimizes redundant audit procedures while maximizing the potential
for providing practical recommendations to improve operations. We do not stop at identifying
weaknesses. We provide solutions and a means to accomplish organizational goals and legal
mandates.
Standards For Audit. Our audit will be conducted in accordance, with all applicable
requirements, which include the following:
· Generally accepted auditing standards of the American Institute of Certified Public
Accountants (AICPA)
· Government Auditing Standards (2003 Revision) issued by the Comptroller General of
the United States
· AICPA Audit and Accounting Guide Audits of State and Local Governmental Units
(GASB 34 edition)
· Single Audit Act Amended 1996 and OMB Circular A-133 and the Compliance
Supplements
· California State Controller's Guide to Compliance Audits of Redevelopment Agencies
In addition, we will use the GFOA Guide ito Governmental Accounting, Auditing and Financial
Reporting for guidance in applying generally accepted governmental accounting principles.
Responsibility The primary responsibility of our examination is to express an opinion on the
fairness of presentation of the City's financial statements. The examinations will be made on a
test basis and, therefore, are subject to the inhei'ent risk that errors or irregularities may not be
detected. If conditions-are discovered which lead to the belief that material errors, defalcations
or. other irregularities may exist, or if any other circumstances are encountered that require
emended services, we will promptly advise the City of the nature of such circumstances and our
estimate of the type and amount of such additional services in writing and will await
authorization to perform such additional services.
Reporting.. The City's annual report will be'in the form of a comprehensive annual fmancial
report as prescribed by the Government Finance Officers' Association publication Governmental
Accounting, Auditing and Financial Reporting (GAAFR) using the GASB 34 model and
includes the following:
· Management Discussion and Analysis
Basic Financial Statements
· Required Supplementary Information
cITy OF BAKERSFIELD
· Combining and Individual Fund Statements and Schedules
· Statistical Information
Upon Completion of our audit, we will issue the appropriate independent auditor's opinion on the
basic financial statements, disclaim an opinion on' the MD&A and statistical information, and an
"in relation to" opinion on the required supplementary .information and combining and individual
fund statements and schedules.
Segmentation of the Engagement
In order to accomplish our responsibility, our audit will be divided into three tasks: preliminary
fieldwork, final fieldwork, and issuance of reports. The following general approach will be
followed:
Preliminary field work
We expect to start our preliminary fieldwork as soon as the contract is signed but no later than
May 31 and complete .this phase by July 15. This phase of the audit will include planning for the
CAFR audit and performing compliance testing for the Single Audit and the Redevelopment
Agency.
PI .a4ming. This phase will focus on understanding the organization and its operating environment
in order to formulate an audit strategy. This is accomplished by performing the following:
· - We will conduct an entrance conference with the Finance Director and other appropriate
personnel to discuss areas of concern, new deVelopments occurring during the fiscal year
under audit, time fi'ames and the appropriate lines of communication.
· We will perform risk assessments to evaluate audit risk considerations for material
account balances and classes of transactions to identify areas and types of testing to be
performed.
· As part of our risk assessments, we will obtain an understanding of the City's internal
control over financial reporting and we will assess inherent risk, control risk, and overall
audit risk.
· We will verify the accuracy of our control risk assessments by performing test of
controls. We normally perform such tests over payroll, purchasing and disbursements,
and utility billings and collections.
· We will prepare a document request of the schedules, statements and documents
necessary to complete the audit. Existing schedules and statements that the client utilizes
may be modified for our use. We will submit this request no later than June 15.
· Materiality levels will be determined for each major fund type.
· Audit will be developed to best accomplish our audit
programs
objectives.
· We will follow-up on prior year's findings.
· We will review prior auditor's work papers.
CITY OF BAKERSFIELD
The following represents our estimate of hours by engagement team member needed to perform
this phase 0f the audit:
Planning CAFR Audit Week 1 Week 2 Total
Shareholder 8 4 12
Manager 8 8 16
Senior 40 24 64
Staff 8 40 48
64 76 140
Final Field Work
We expect to start our final fieldwork as soon as the City is ready for the final phase of the audit
and we expect this date to be no later than August 19, the entrance conference for year end field
work. We expect to Work with Nelson K. Smith, Assistant Finance Director, in this phase of the
audit.
This task includes substantive testing of balances, with emphasis on the reporting aspect,
assurance that all appropriate disclosures are made and development of appropriate findings and
recommendations. In order to accomplish these tasks, the following approach will be taken:
· We will review account balances to confu'mations received, primarily cash and
investments held and long-term debt balances at June 30. We will request assistance from
the City fdr significant variances discovered.
We will perform an analytical review of revenues by major types and expenditure by
functions to detect error in classifieations; We will request assistance from your Budget
manager, to assist us in resolving variances of actual amounts from budgets.
· We will perform a test of the freed assets record. It is our understanding that the City will
be implementing the infrastructure section of GASB 34. We have allocated four (4) hours
of shareholder time to review the work done by your consultant.
We will review the GASB 34 conversion worksheets.
· We will perform a search for unrecorded liabilities and commitments and contingencies.
· We will secure representation from management and key officials regarding matters
covered in the audit.
· We will review the draft financial statements and prepare the notes to the financial
statements.
25
CITY OF BAKERSFIELD
· An exit conference is convened with appropriate personnel to summarize the audit and to
discuss recommendations the City should consider.
We would like to have a draft of the CAFR available at the start of the final fieldwork and at
least no later than the second week of final field work. If not available, we would need an
adjusted trial balance for all of the major funds.
The following represents our estimate of hours by engagement team member needed to perform
this phase of the audit:
Final Field
Work Week 1 Week 2 Total
Shareholder 4 4 8
Manager 8 16 24
Senior 40 40 80
Staff 40 40 80
92 100 192
Issuance of our report~
We expect to dra~ our reports during the last two weeks of October and issue reports by
November 7.
We will be performing the following procedures:
· Review of the final draft of the CAFR. We review
expect
to
the
final
CAFR
and
discuss
any differences from the draft financial statements at the City.
· Submit notes to the financial statements
· Review responses to our findings and recommendations.
· Review draft reports with management.
· Present final reports to the audit committee/City Council.
The following represents our estimate of hours by engagement team member needed to perform
this phase of the audit:
26
CITY OF' BAKERSFIELD
Report
Issuance Week I Week 2 ~ Total
Shareholder 8 8 16
Manager 8 8 16
Senior 16 8 24
Staff 16 8 24
48 32 80
Single Audit
Our performance of the procedures for the single audit will be integrated with the three phases
'discussed above. Our procedures will consist of the following:
We will obtain a schedule of federal awards expenditure
· We will select major programs for testing
· We will obtain an understanding of the risk for each major programs and develop
a test of compliance for each major program
· We will perform test of compliance
· We will drat~ and issue reports.
The audit will be performed in accordance with the 1996 Single Audit Act Amendments and
OMB Circular A-133 and its Compliance Supplements.
Ryan Diffee will lead the single audit testing and Ben Reyes will review and supervise.
The following represents our estimate of hours by engagement team member needed to perform
this phase of the audit:
Single Audit Week 1 Total
Shareholder 6 6
Manager 0 0
Senior 48 48
Staff 44 44
98 98
27
CITY OF BAKERSFIELD
Redevelopment Agency
As with the single Audit, we will integrate our audit of the Agency with the CAFR audit.
Procedures unique to the Agency Will be performed in accordance with the California State
Controller's "Guideline for Compliance Audits of Redevelopment Agencies".
The following represents our. estimate of hours by engagement team member needed to perform
this phase of the audit:
RDA Audit Week 1 Week 2 Total
Shareholder 8 0 8
Manager 0 · 0 0
Senior 44 0 44
Staff 60 0 60
112 0 112
Public Financing Authority
We will coordinate this audit with our audit of the long-term obligations of the City. Procedures we will
perform are those required by generally accepted auditing standards. The following represents our
estimate of hours by engagement team member needed to perform this phase of the audit:
PFA Week 1 Total
Shareholder 4 4
Manager 10 10
Senior 40 40
Staff 52 52
106 106
CITY OF BAKERSFIELD
Proposed Time Table
The following is our proposed timetable for the audit, from preliminary fieldwork to issuance of
auditor's reports.
Preliminary
Shareholder x
Manager x
Supervisor x
Auditors x
Single Audit
Shareholder x x
Manager
Supervisor x x
Auditors x x
Final Field Work
Shareholder x x
Manager x x
Supervisor x x
Auditors x x
Issue Reports
Shareholder x x
Manager x x
Supervisor x
Auditors x
CITY OF BAKERSFIELD
SPECIFIC AUDIT APPROACH
The following specific audit approaches are our general firrn procedures. It is our policy that we
tailor the use of each approach on an engagement-by-engagement basis, as opposed to a "cookie
cutter approach". By this method, we ensure an audit that is efficient and of value to our client.
Internal Controls; .We will obtain an understanding and evaluate the City's internal control and
test transactions as deemed, necessary. The significant internal control cycles we will evaluate
are the following:
· Treasury/Investments
· Receivables/Cash receipts
· Purchasing/Payables/Cash Disbursements
· Payroll
· Financial Reporting
We will perform interviews with various members of the City's management and with the City's
Assistant Finance Director in the process of evaluating internal control. As part of the process,
we will work with City staff to document the City's internal controls. We have found it efficient
to provide our clients with documents accessible by using WORD and we will do the same for
City staff.
Tests of Controls. Generally accepted auditing standards require that controls must be tested
when risk is assessed at less than maximum. We will utilize this approach in designing an
efficient and effective audit of the City's transactions. In addition, we have found test of controls
to have value added for the City in terms of developing recommendations for improvements.
We plan to use statistical Sampling using a maximum sample size of 60. In extracting the
samples, we will use Audit Command Language (ACL).
Approach to Test of Details. We will use not statistical sampling during the substantive part of
the audit, as it is neither efficient nor practical. In drawing audit samples, we will use materiality
concepts such as tolerable misstatements and individually significant items and audit risk to
determine the amount of detail testing we will perform. For example, we might test
disbursements over $10,000 for certain accounts to achieve 60% aUdit coverage.
Approach To Selecting Laws And Regulations Subject To Compliance Testing. For the
most part, our approach is dictated by'our contract with the City. For example, the engagement
requires that we perform a compliance audit of the expenditures of federal awards in accordance
with the 1996 Revision of the Single Audit Act and OMB Circular A-133. We will use OMB A-
133 to select laws and regulations applicable to such compliance testing. In addition, we also
review 'for material state grants for possible compliance testing. If we fred, in our auditor's
opinion, that we need to extend our audit procedures, we will discuss and request permission
from the City before we perform such additional compliance testing.
CITY OF BAKERSFIELD
Analytical Procedures. We will use analytical procedures in planning and performing
substantive audit procedures during the course of the engagement. Several of the analytical
procedures we will perform are:
Analysis of variances -comparison of current year actual to prior
Analysis of variances - comparison of current year actual to budget
· Analysis of variances - comparison of expected property tax collection to actual
· Analysis of variances - comparison of assessed valuation to current, year and
other counties
· Analysis of variance - comparison of expected revenue for the Solid Waste Fund
to actual revenue.
· Analysis of variances - comparison of expected interest income t° actual
· Analysis of variances - comparison of average payroll and payroll benefit for the
current year to the prior year
Approach to Drawing Samples for .Test of Compliance. Our approach to drawing samples is
dictated by the population characteristics. If the population consists of small and numerous
transactions such as payroll, we will use the procedures discussed in "Test of Controls" above. A
population consisting of large and uneven amounts (capital outlays) will be tested similar to the
approach discussed in" Test of Details" above.
Extent of the-use of EDP software in the Engagement. Information technology is an
important component of our conduct of the audit engagement. We currently employ a "paperless
audit" system, which maximizes the efficiency of the audit team through the following measures:
· Use of PPC's Engagement Manager (EM). The EM allows the efficient
coordination of audit programs, audit work papers, research tools, and client
provided electronic information in Word or Excel in a designated client file.
· Use of ACL, data extraction sof~,vare, in managing, information provided by the
City for test of transactions.
· . PPC's Electronic Tools that standardized work
provides
papers,
confirmation
letters, checklist, etc.
CITY OF BAKERSFIELD
IDENTIFICATION OF ANTICIPATED POTENTIAL AUDIT PROBLEM~
We have not identified any potential audit problems. However, the City has been with the same
auditor for at least ten years. We do not expect any difficulties, however, because of the
difference of our approach, if any, and by just having a different "pair of eyes", we might
identify audit problems or areas that might require additional audit procedures. In such instances,
we will discuss the situation with the City and obtain written permission before we expand the
extent of our audit procedures and incur any additional costs.
REPORT FORMAT
Sample reports' are included in this proposal as Appendix B
.1
APPENDIX A
PROPOSER GUARANTEES
The proposer certifies it can and will provide and make available, as a minimum, all services set
forth in Section II, Nature of Services Required, in the request for proposal.
Signature of Official:
Name: Benjamin P. Reyes
Title: Shareholder'
Firm: Mayer, Hoffman & McCarm P.C.
Date: April 8, 2005
APPENDIX A (Continued)
PROPOSING FIRM WARRANTIES
A. Proposer warrants that it is willing and able to comply with State of California laws with
respect to foreign (non-state of California) Corporations.
i B. Proposer warrants that it is willing and able to obtain an errors and Omissions insurance
i policy providing a prudent amount of coverage for the willful or negligent acts, or
omissions of any officers, employees or agents thereof.'
C. Proposer warrants that it.will not delegate or subcontract its responsibilities under an
agreement without the prior permission of the City of Bakersfield.
D.' Proposer warrants that all information provided by it in connection with this proposal is
true and accurate.
Signature of Official:
~"' Name: Benjamin P. Reyes
Title: Shareholder
~ Firm: Mayer, Hoffman & McCann P.C.
.i Date: April 8,2005
APPENDIX B
AUDITOR'S REPORTS
APPENDIX B (Continued)
INDEPENDENT AUDITORS' REPORT
Members of the City Council
City of Bakersfield
California
We have audited the accompanying financial statements of thc governmental activities, the business-type
activities, the aggregate discretely, presented component units, each major fund, and the aggregate
remaining fund information of the City of Bakersfield, California, as of and for the year ended June 30,
2005, which collectively comprise the City's basic financial statements as listed in the table of contents.
These financial statements are the responsibility of the City of Bakersfield's management. Our
responsibility is-to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States. Those standards require that we plan. and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall basic financial statement
presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activity, business-type activities, the aggregate
discretely presented component units, each major fund, and the aggregate remaining fund information of
the City of Bakersfield, as of June 30, 2005, and thc respective changes in financial position and cash
flows, where applicable, thereof for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated (date of issue),
on our consideration of the City of Bakersfield's internal control over financial reporting and our tests of
its compliance with certain provisions of laWs, regulations,' contracts and grants and grant agreements and
other matters. The purpose of. this report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and do not provide an opinion on the
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in conjunction with
this report in considering the results of operations.
The management's discussion and analysis and budgetary comparison infOrmation on pages XX through
XX and XX through XX are not a required part of the basic financial statements but are supplementary
information required by the Governmental Accounting Standards Board. We have applied certain limited
procedures, which consisted principally of inquires of management regarding the methods of
measurement and presentation of the required supplementary informatiOn. However, we did not audit the
information and express no opinion on it.
37
APPENDIX B (Continued)
Members of thc City Council
City of Bakersfield
Page 2
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
compromise the City of Bakersfield's basic financial statements. The introductory section, Combining
and individual nonmajor fund f'maneial statements, and statistical tables are presented for purposes of
additional analysis and are not a required part of the basic financial statements. The combining and
individual nonmajor fund financial statements have been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole. The introductory section and statistical
information have not been subjected to the auditing procedures applied in the audit of the basic financial
statements and, accordingly, we express no opinion on them.
Mayer Hoffman McCann P.C.
Bakersfield, California ,
(Date of Issue)
I
APPENDIX B (Continued)
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMpLIANcE AND OTHER
-MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Members of the City Council
City of Bakersfield
Bakersfield, California
We have audited the basic financial statements of City of Bakersfield as of and for the year ended June
30, 2005 and have issued our report thereon dated (last date of fieldwork). We conducted our' audit in
accordance' with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United states.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered City of Bakersfield's internal control over financial
reporting in order to determine, our auditing procedures for the purpose of expressing an opinion on the
basic financial statements and not to provide assurance on the internal control over financial reporting.
Our consideration of the internal control over financial repOrting Would not necessarily disclose all
matters on .the internal control that might be material weaknesses. A material weakness is a reportable
condition in which the design or operation of one or more of -the internal control components does not
reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would
be material in relation to the financial statements being audited may occur and not be detected within a
timely period by employees in the normal course of performing their assigned functions. We noted no
matters involving the internal control over financial reporting and its operation that we consider to be
material weaknesses.
Compliance
As part of obtaining reasonable assurance about whether the City of Bakersfield's financial statements are
free of material misstatement, we performed tests of its compliance with certain _provisions of laws,
regulations, contracts and grants, noncompliance with which could have a direct and material effect on
the determination of' financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit and, accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are'required to be
reported under Government Auditing Standards.
APPENDIX B (Continued)
._.
Members of the City Council
City of Bakersfield
.Page 2
This report is intended solely for the information and uses of the audit committee, management and
federal awarding agencies and pass-through entities and is not intended to be and should not be used by
anyone other than those specified parties. However, this 'report is a matter of public record and its
distribution is not limited.
Mayer Hoffman McCann P.C.
Bakersfield, California
(Last date of fieldwork)
1
APPENDIX B (Continued)
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH,
MAJOR PROGRAM Ah~ INTER~AL Coh~rROL OVER COMPLIANCE'm
ACCORDANCE"WITH OMB CIRCULAR A-133 AND REPORT ON THE
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Members of the City Council
City of Bakersfield
Bakersfield, California
Compliance
We have' audited the compliance of City of Bakersfield with the types of compliance requirements
described in the U.S. Office of Management and Budget (OMB) Circular ,4.-133 Compliance Supplement
that are applicable to each of its major federal programs for the year ended June 30, 2005. City of
Bakersfield's major federal programs are identified in the summary of auditor's results section of the
accompanying schedule of.findings and questioned costs. Compliance with the requirements of laws,
regulations, contracts and grants applicable to each of its major federal programs is the responsibility of
City of Bakersfield's management. Our responsibility is to express an opinion on City of Bakersfield's
compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government ,4uditing
Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, ,4udits of
State, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133
require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance
with the ,types of compliance requirements referred to above that could have a direct and material effect
on a major federal program occurred. An audit includes examining, on a test basis, evidence about City
of Bakersfield's compliance with those requirements and performing sUCh other procedures, as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion. Our audit does not provide a legal determination on City of Bakersfield's compliance with those
requirements.
In our opinion, City of Bakersfield complied, in all material respects, with the requirements referred to
above that are applicable to each of its major federal programs for the year ended June 30, 2005.
41
APPENDIX B (Continued)
Members of thc City Council
City of Bakersfield
page 2
Internal Control Over Compliance
The management of City of Bakersfield is responsible for establishing and maintaining effective internal
control over compliance with requirements or laws, regulations, contracts, and grants applicable to federal
programs~ In planning and performing our audit, we considered City of Bakersfield'S internal control
over compliance with requirements that could have a direct and material effect on a major federal.
program in order to determine our auditing procedures for the purpose of expressing our opinion on
compliance'and to test and report on internal control over compliance in accordance with OMB Circular
A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the
internal control that might be material weaknesses. A material weakness is a reportable condition in
which the design or operation of one or more of the internal control components does not reduce to a
relatively low level the risk that noncompliance with applicable requirements of laws, regulations,
contracts, and grants caused by error or fraud that would be material in relation to a major federal
program being audited may occur and not be detected within a timely period by employees on the normal
course of performing their assigned ftmctions. We noted no matters involving the internal control-over
compliance and its operation that we consider to be material weaknesses.
' Schedule Of Expenditures Of Federal Awards
We have audited the basic financial statements of the City of Bakersfield as of and for the fiscal year
ended June 30, 2005 and have issued our report thereon dated (to be determined). Our .audit was
performed for the purpose of forming opinions on the financial statements, which collectively comprise
the City's basic financial statements. The accompanying schedule of expenditures of federal awards is
presented for purposes of additional analysis as required by OMB Circular A-133, and is not a required
part of the basic financial statements. Such information has been subjected to the auditing procedures
applied in-the audit of the basic financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
This report is intended solely for the information and use of the audit committee, and
management,
federal awarding agencies, and pass-through entities and is not intended to be and should not be used by
anyone other than these specified parties.
Mayer Hoffman McCann P.C.
Bakersfield, Califomia
(Last date of fieldwork)
APPENDIX C
EXTERNAL CONTROL REVIEW
First National Bank Building
400 Pine Street, Suite 600
Ab!lene, Texas 79601-5128
Office (915) 672-4000
Davis, Kinard & Co., P.C. FAX (915) 672-7049
Certified Public A~:countants 1-800-588.2525
http',//www, dkcpa.com
To the Shareholders of
Mayer Hoffman McCann P.C.'
and the SEC Practice Section Peer Review Committee
We have reviewed the system of quality control for the accounting and auditing practice of Mayer Hoffman
McCann P.C. (the firm) in effect for the year ended June 30, 2002.' A system of quality control encompasses
the firm's organizational structure and the policies adopted and procedures established to provide it with
reasonable assurance of complying with professional standards. The elements of quality control are
I described in the Statements on Quality Control Standards issued by the American Institute of Certified Public
Accountants (the AICPA). The design of the system+ and compliance with it, are the responsibilities of the
firm. In addition, the firm has agreed to comply with the membership requirements of the SEC Practice
! Section of thc AICPA Division for CPA Firms (the Section). Our responsibility is to express an opinion on
~ the design of the system, and the finn's compliance with that system and the Section's membership
· requirements based on our review.
Our review was conducted in accordance with standards established by the Peer Review Committee of the
Section and included procedures to plan and perform the review that are summarized in the attached
description of the peer review process. Our .review would not necessarily disclose ali- weaknesses in the
system of quality control or all instances of lack of compliance with it or with the membership requirements
of the Section since it was based on selective tests. Because there are inherent limitations in the effectiveness
ofany system of quality control, departures from the system may occur and not be detected. Also, projection
of any evaluation of a system of quality control to future periods is subject to the risk that the system of
quality control may become Inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
In our opinion, the system of quality control for the accounting and auditing practice of Mayer Hoffman
McCann P.C. in effect for the year ended June 30, 2002, has been designed to meet the requirements of the
quality control standards for an accounting and auditing practice established by the AICPA, and
complied with during the year then ended to provide the firm with reasonable assurance of complying with
professional standards. Also, in our opinion, the firm complied during that year with the membership
requirements of the Section in all material respects.
As is customary in a peer review, we are issuing a letter under this date that sets forth comments relating to
certain policies and procedures or compliance with them. The matters described in the letter were not
"! considered to be of sufficient significance to affect the opinion expressed in. this report.
DAVIS, KINARD & CO., P.C.
! Abilene, Texas
~ December 20, 2002
.-a FOR MORE INFORMATION CONTACT:
American Institute of Certified Public Accountants
Division of Rrms - SEC Practice Section
Ha~orslde Financial Center, 201 Plaza Three
Jersey City, New Jersey 07311-3881
APPENDIX D
ACCOUNTING TODAY ARTICLE
-.,.'ibuted to
05 ~,F~ I ! Fi'~ I: t~ 7 · '..,:..-,o~'
Board or Directors .... . Council
"':" ...... ' .~ ='
President April 8, 2005 City Mgr ~'~
Milt Younger, Esq.
Clerk of the City Colmcil City Atty
Vice President
Hon. Jon Stuebbe · of Bakersfield Other
· . 1501 Truxtun Avenue
Tre~urer Bakersfield, CA 93301
Don Lindsay
Secreaty Re: Bakersfield Symphony Orchestra By City Clerk
John Sherman, O.D. Date .~
~ Dear Madam Clerk:
Bradford Anderson, M.D. I would like to request an opportunity to appear at an appropriate time
Bernard Barmann, Ph.D.
Philip Bentley before the City Council and its budgetary committee to ask for a contribution to
Morgan Cia)Ion the Bakersfield Symphony Orchestra for the 2005/2006 season.
David Cross
Bruce Freeman
Toni Oallardo I am the 2004/2005 President of the Board of the Bakersfield Symphony
Eleanor Heisk¢il Orchestra. I know that the members of the City Council will agree that our
Sze Ho, M.D. ~
I. Nile Kinney, Esq. community is fortunate to have a fine symphony orchestra that has performed
Jerome Klcinsnsser. Ph.D. for more than 70 years. We are also fortunate to have a renowned conductor,
Joe Ma¢llvaine, Ph.D. John Farter, who will be celebrating his 30th year with the Orchestra. For the
Amy MeGuim
Kandis Peake 2005/2006 season, the Orchestra will be offering approximately 40
Dr, Tony Perdli-Minetti performances which, in this past year, covered more than 150,000 people and
Deborah Perkins 40,000 students. The Orchestra is the principal presenter of symphonic music to
Larry E. Reider, Ed.D.
Sunny S~ofield the citizens of our city.
Dee Slnde
Sandra Smano In response to our request for the 2004/2005 season, you indicated that
Butyl Vance
Marilyn Vance yOU would not be able to make any contribution.
Honoraty Life Metnbet For the 2005/2006 season, we respectfully request that you make a
Jim Collier
C.L. Clart contribution of $50,000. In my view, it is long past time for the City to step up
Donald R. Lindsay · to the plate and provide greater support for the cultural activities of our
Manager community. The Orchestra is an important part of our effort to improve the
Nancy Marvin image of Bakersfield and is a selling point that we use in connection with our
efforts to recruit businessmen and professionals to come to our city. Our money
Dir. Of Development is well-spent in supporting this institution. I realize that it is a matter of
Sheri Horn Bunk
priorities, however, for the City to give absolutely nothing to the Orchestra
Music DireCtor which bears its name while using it as a selling point to attract business to our
John Farter community seems difficult to explain.
We understand that you are facing severe budgetary constraints. Our
own budget is approximately $900,000 and only 40% of this is achieved by
ticket sales. We make great effort to obtain contributions from the citizens of
1328 34a' Street, Suite A, Bakersfield, CA 93301 · Phone: (661) 323-7928 · FAX: (661) 323-7331
Website: www.bakersfieldsymphony.org a Email: music®bakersfieldsymphony.org
City Council of Bakersfield
April 8, 2005
Page Two
our community. In the past year, our concerts were attended by more people
than in all of the past history of the Orchestra. The Orchestra is better than ever
and our citizens have been supporting it. I hope that the City Council will
recognize and support the increasing importance of the Bakersfield Symphony
Orchestra to our community.
As in the past, we are submitting our application for funds through the
Arts Council of Kern. The Arts Council has cooperated well with the
Symphony in making presentations and in fund-raising.
I request permission to appear in front of the City Council and its
budgetary committee at an appropriate time and answer any questions that the
members may have.
Thank you for your consideration.
Yours very truly,
Milt~
MMY:va
cc: Bakersfield Symphony Orchestra
Attn: John Fan'er, Conductor
Arts Council of Kern County
Attn: Jeanette Richardson
Board of Director~ · '
P~id~nt April 8, 2005
Milt Younger, Esq. ' Clerk of the Kern Coun¢.'
Vice President Board of Supervisors
Hon. Jon Stud)be '1115 Truxtun Avenue .
· ' ' ' - "' ' i' U2.".~':': ~.
Tr=~, Bake.rsfield,. CA 9330.1
Don Lind~ay . · .... ~.:-:' !2": '""
·
' Re:" akersfield Symphony Orcheslra
Se~ i ..: ....
John Sherman, O.D. ~ ._-..~.~
Dear Madam Clerk: ~i
Bradford AndePson, M.D. I woUld like to request an opportunity to appear' at an appropriate· time
Bernard Barmann, Ph.D. before thc Board'to ask for a contribution to the Bakersfield Symphony'
· Philip Bentley ....
Morgan Cla>aon Orchestra for'6ur 2005~2006 season.
David Cross
BruCeToni GallardoFreeman · ']~ am the 2004/2005 President. . of the Board.0fthe Bakersfield sYmPhony
· ' £1ea, or m,/sken '. OrcheStra~ I know you will agree that our community is fortunate to have a fine
Sz¢,o, M.D. Symphony omhestra that has performed fOr more than 70'years. We are also
J. }~ile Kinn~, r. sq. : fortufiate to have out renowned conductor, John Farter; who will be'celebrating
Jcromd Kl¢insnsser. Ph.D .... * ·
Joe Macllvaine, Ph.D. his 30th year with the Orchestra. The Orchestra will Offer for the.2005/2006
Amy McOui~e seaSon approximately 40 performances, covering more than 150,000 people End
KnndisPeake · ' ' -' ' · .
Dr. Tony PerellioMinetti 40,000 students. As you know, it.!s thc principal presenter of.live symphonic
Deborah Perkins music to the citizens of om' city and county.
Larry E. Rcider, Ed:D. .'.
Sunny Scoficld
Dca Slade .We greatly appreciate'your cOnffibufion.thiSpast year of $991000. For
Sandra. SoPrano ' the 2005/2006 season, we will again present our September 11th Memorial.
Butyl Vanc~ Conce/'t. You generously contributed $15,000 this past year to defray the costs
Mm'ilyn VanCe -
· of this very sUccessful concert. In addition, yOu contfibutcd.$~7,00 fora concert
Honorary Life Member' . which we Presented in Tat~' and $17,000 for a concert we will Pr6sent in thc next
Jim Collier ' few days .in Ridgecrest. I hope you are pleaSed wit,h the performances and with
C.L. Clnrk · . .
Donald IL Liadsay the enthusiastic response from the people of Kern County to those performances.
Manager We understand that you are facing severe budgetary constraints. Our
Nancy Marvin · - "
own budget is approximat¢ly $900,000 and only 40%.of this is. achieved by
DiP. Of DevclOPmem ticket sales. We have been. able to inCrease support from the citizens Of Kern
Shed Horn Bunk County, however, yom' own contribution remains our largest. You .may
Music DireCtor " remember that thc City of Bakersfield first agreed to contribute $45,000 for the
John Farter 2003/2004 season, but'then concluded thatit could not contribute more than
approximately $25,000. It Contributed nothing' for the 2004/2005 seaSon. This
year, we will again aSk the City to contribute $50,000, the amount that it
contributed in years prior to last year~ ...
1328 34~ Street, Suite A, Bakersfield; CA 93301 * Phone: (661) 323-792'8 * FAX: '(661) 323-7331
Wcbsite: www.bakersfieldsymphony.org · Emaih music~bakersfieldsymphony.org
Kem County Board of Supervisors
April 8, 2005
Page Two
By way of comparison, the budget of the Fresno Philharmonic is
approximately $2,000,000. We have adopted as our goals the achievements of a
budget of $1,000,000 and playing an increasing role in the cultural life of our
county. The orchestra is an important part of our effort to improve the image of
Kern County. It is a selling point that we use in connection with our efforts to
recruit businessmen and prOfessionals to come to our city. Our money is well
spent in supporting this institution.
As in the past, we are submitting our application for funds through the
Arts Council of Kern. The Arts Council has cooperated well with the
Symphony in making presentations and in fund-raising.
I request permission to appear before the Board at an appropriate time
and answer any questions that the members may have.
Thank you for your consideration.
Yours very truly,
Milton M. Yo~
MMY:va
cc: Bakersfield. Symphony Orchestra
Attn: John Farter, Conductor
Arts Council of Kem County
Atto: Jeanette Richardson
A ROTARY DISTRICT 5240 PROJECT -
P.O. BOX 2752 BAKERSFIELD, CALIFORNIA 93303
(800) 825-3387 [800°~ALoFEVER] (661) 832-1456
April 27, 2005
Bakersfield City Council
1501 Truxtun Avenue
Bakersfield, CA 93301
Dear Council Members:
The possibility and necessity of developing a viable vaccine for Valley Fever has been under
discussion for decades. A whole spherule vaccine developed by Dr. Hillel Levine was tested in
the early 1980's in a massive effort spearheaded in Bakersfield by Doctors Einstein, Johnson,
Cunningham, and Larwood. This early vaccine proved effective in animals, but was not tolerated
in humans in doses large enOugh to have the desired results. In early 1990's, Doctors Einstein and
Jung caused a review to be made of new possibilities due to scientific advances. This review,
accomplished through CSUB led to unpreCedented collaboration among major researchers, which
has brought us to the verge of a new vaccine.
The State of California, the County of Kern, the California HealthCare Foundation, the federal
government, and thousands of individual and corporate donations raised over $14 million in
pursuit of a vaccine. An update written by Project Director Richard Hector provided to you
it~dicate, s that much has been accomplished. A vaccines candidate has been identified; however,
e project is in need of additional funds to reach the point where human trials maY be possible.
The support of the Bakersfield City Council for the development of a vaccine will save the city
dollars in the long run. Your health care expenses and employee work time loss will be reduced
when an effective vaccine is developed. In addition your constituents will be benefited with
protection from the physical, emotional and financial suffering from this disease.
We are requesting a $50,000 contribution from the City of Bakersfield. This canbe paid over 5
years. Your support will signify to others how important local community support is to the'
development of this vaccine.
We thank you for your consideration and look forward to your support.
~Si~_nqerely,
Pauline Larw-~~~'/~/-~~/
Fund. raising Committee
Making a good vaccine better
With several years of research efforts now behind us, we have sufficient
experimental results to conclude that the chimeric fusion protein called
"Ag2/PRA106+Csa" remains our best choice as the antigen for the recombinant
vaccine proposed for human trials. The recent study in monkeys confirmed what
we had previously seen in mice in that administration of the vaccine markedly
reduced the severity of disease after subsequent infection with the Valley Fever
. fungus. Additionally, the monkey experiment provided important information that
the vaccine appears to be well 'tolerated; no adverse reactions were detected in
any vaccinated animal.
But the need to press on with what we have in hand is tempered by a
desire to make absolutely sure that we have the best possible vaccine before we
commit our remaining resources to the very expensive development activities
that lie ahead. What else do we need? This requires explanation ....
Most vaccines on the market have a number of components or additives
other than the disease-specific antigens responsible for the immunization of the
patient. Some components are nothing more than solutions designed to help
stabilize and preserve the vaccine. But most vaccines also contain something
called an adjuvant that is added to a vaccine to bOOst the immune response to
the antigen. The only adjuvant approved for human use is a simple aluminum
salt (called "alum") that helps attract white blood cells to the site of injection and
results in more efficient "processing" of the antigen by the immune system. The
result is that a vaccine with alum usually results in much. greater antibody
response than a vaccine without alum. The trouble with Valley Fever, however,
is that antibodies play no role-in protection against disease, and so alum would
not, by itself, be a sufficient adjuvant. We need an adjuvant that stimulates white
blood cells to respond by what is called "cell mediated immunity".
Although many possible adjuvants have been evaluated during the past
five years of the Valley Fever Vaccine Project, the one that provided the best
results has, for largely business reasons, become almost impossible to obtain.
The monkey study, for example, was performed with a combination of two
alternate adjuvants that are still considered'experimental by the FDA and may or
may not be approved for use.
Thus, we are considering alternates to the experimental adjuvants to
create a formulation that might both enhance the immune response and meet the
safety standards of the FDA. Two different approaches that share a common
characteristic, is that instead of using a liquid solution, the vaccine is processed
into microscopic particles of polymers that contain the antigen. When these
"nanoparticles" are injected into humans they have, in many cases, resulted in
significantly enhanced immune responses. The simplest explanation for this is
that the white blood cells of a person's, immune system can more easily find and
interact with a particle than it can a single molecule of an antigen. ^ basketball is
easier to grab than a single grain of sand, right? (it is important to note, however,
that these particles are still much smaller, "softer" and less irritating than the
whole spherule vaccine tested in the 1980'S) So, if we incorporate our protein
into particles that are more easily recognized by the body, we might increase the
chances that the body will respond more vigorously to the protein, resulting in
even better protection. And that is what we plan to test next.
Although this means additional experiments, it's a decision designed to
increase our chances for success now by creating a formulation that is-both safer
and more effective. We are convinced that we have a good protein that could.
serve as the basis for a vaccine, but in order to ultimately reach the market and
become available, the vaccine must have human trial results impressive enough
to convince the pharmaceutical industry, then the FDA, then the clinicians who
would recommend the vaccine, and ultimately the patients who will pay money in
order to be vaccinated. If we can take steps now to make a good vaccine better,
then we have made an investment that will pay the dividend of better prospects
for a vaccine to fight this terrible disease.
Valley' Fever has long plagued - and mystified - man.
Although it has been studied for the past 100 years, it
is a disease that has remained impossible to control ®su,~.~m~,,. ]
and difficult to treat. The development of a vaccine O~'~"'~'~d~~" /
is considered the only way to prevent this disease that -.~,"~?~
costs so much.., not only in terms of dollars, but also =^*A.A~, ~' v~,~u~,
in human sufferi, ng.
.... is ~T?
The technical name for Valley Fever is Coccidioidomycosis, or"Cocci" for short.
It is caused by Coccidioides immitis, a fungus somewhat like yeast or mildew
which lives in the soil. The tiny seeds, or spores, become wind-borne and Endemic Areas of Valley
are inhaled into the lungs, where the infection starts. Valley Fever is not contagious ·
from person to person. It appears that after one exposure, the body develops Fever in North, Central
immunity, and South America
Valley Fever is a sickness of degree. About 60 percent of the people who breathe
the spores do not get sick at. all. For some, it may feel like a cold or flu. For those
sick enough to go to the doctor, it Can be serious, with pneumonia-like symptoms,
requiting medication and bed rest.
Of all the people infected with Valley Fever, one or more out of 200 will develop
the disseminated form, which is devastating, and can be fatal. These are the cases in
which the disease spreads beyond the lungs through the bloodstream- typically to
the skin, bones and the membranes surrounding the brain, causing meningitis.
it is estimated that there are 7,500 new cases of Cocci annually in the
U.S,A, alone. This translates to a cost that exceeds $60 million each year.
Life Cycle of Coccidioides Immitis ~~O G~?S 177
Uycellum: The ~jetative pa~t. ~*
of ~ hmgus, made o( a mass
of th'eadliko tubes. ~ ~you Uve h ~ ende~c ~e~ you may have had V~ey Fever wi~out even ~ow~g it. h some
endemc ~e~, ~ much ~ h~ of ~e ~pulation h~ been ~ected. Persons whose activities put
>~ ~ ~em h much contact wi~ ~e soil ap~ to have a somewhat ~eater risk. Once ~ected ~rsons
, eu~ w~ ~. ofccp, FiUpino ~d some o~er Asi~ ~ces~es seem to be at a ~eater risk of con~act~g the
more serious, or disse~ated, fo~ of the disease. %e young, the old, .~d those with lowered
. ~ ~ i~une syste~ ~e ~so ~ ~e Mgh risk ~oup. ~le men ~e at ~eater risk th~ women,
pregn~t women ~e es~ci~y ~lnemble, p~icul~ly in ~e ~d tfimesten
'".*',~,~* ~~AT gAN Y°u Do?
We need yo~ sup~m g you would ~ke addition~ ~o~afion or c~ provide fin~ci~ ~sismce,
ple~e contact ~e ad.ess below:
V~ley Fever %ccine Project of ~e ~edcas
A Rot~ Dis~et 5240 ~oject
FO. Box 2752
B~c~field, CA 93303
Source: Kern CounN Health Depa.ment WeI: (661) 832-1456 or Website: w~w.~al!eyfever, com
Courtesy of KENT KUEH~HE BAKERSFIELD CALIFORNIAN 1-800-V~-~VR (1-8~-825-3387) E-m~l: info~ v~leyfever, com
VALLEY FEVER VACCINE PROJECT
BRIEF REVIEW
A whole spherule vaccine developed by Dr. Hillel Levine was tested in the early 1980's-in a massive
effort spearheaded in. Bakersfield by Dr.s Hans Einstein, Royce Johnson, Ralph Cunningham and Tom
Larwood. This early vaccine proved effective in animals, but was not tolerated in humans in doses large
enough-to have the desired results. In the early 1990's, Doctors Einstein and Johnson Jung Caused a review
to be made of new possibilities due to scientific advances. This review led te lhe unprecedented collaboration
among five major researchers which has brought us to the verge of a new vaccine.
Over $14 million has been
Bakersfield Californian Editorial raised since 1996. Expendi-
December 8, 2004 tures have been coordinated
through an advisory commit-
Give to v ey fever ttmd.
~e and dispersed through the
California State University of
Bakersfield Foundation to
M oney is the vital mot ofa]lgood fungus that selZles in l~e lungs. Atbestin ensure that available funds
-developme~ofa~ccinetopre- thatgh~slffelo~hnmuni~inm~tpeo- are spent efficaciously. The
· ,vent ~ ~ ~ the need for mere pre. State of California has con-
mo~e~isimmed~te. B~ m ~ ~ ~ ~ tributed over $7 million and
?tat~mustcome~~ sp~ throu~ the btoodsta~ to the approximately $5 million has
epicenler for the someQmes ciati~g pain, parab~ and come from the California
~ disease tt~ ~ e~adea~ HealthCare Foundation.
throughout much of the Pmvenfio~~av'ac-
Southwest and ~ cine is the key, becausedmgs Other major supporters have
'- Government agendes i~! e~eclivem~ One drug included the CDC (Centers for
'and fotaaaaoas ~ ts wide~ ~ b~ Disease Controland.Preven-
donated huge sums at the patients as almost as bad as tion), the Valley Fever Amed-
behest of the funding drive the d[~a{~l disease
statted a decade ago by the ~ cas Foundation, and the
Rotaz7 Club of B~kemlteld W~ t~as fuad~ effom County of Kem.
.to a astiona~ sad even httemationaJ ]nanavemgeyea~lcesesduetovail~ We can't look to the State of
:effozt. fever cost aap~s, a~ a~ California for additional funds,
is needed. The Valley ~ Va:rise Pm- p~scr~on~ aa(! doctor a~! hos[atal and the California HealthCare
jectofthe~,isata~pointin bias. ~ in pet'iodic epidemic yeats ~ Foundation 'has not an-
'vaccine~--need~tomanu- costjusttnKemCou~eaasoattomo~e nounced whether it will pro-
for human clinical tr~s~n 2005. Thepro- nationally, vide any additional funds.
~,ed budgeterS3.1 millionlacks $ZSmil- Public agen~ from Cml Stme Bal~xs-
iionthmugh20O~, field to the Legislam~ toCeagmss have If we do not raise additional
Yollowingadecade ofeffort, morethan ~totheeffert. Sonowisthefime funds before the end of June,
$13 million has bee~ raised and spent for for ~ -- especial~ tJt(s~ whose
-~eatchanddevetopmentltms f~_Tol~e workemateoual~m--andLndivia'tmls~o planned activities will be can-
the raome~tum of developma~ at this pushthepmiect~tocaap~fa' celled. An additional $2.5 mil-
stage could do Lrzeparable hana. lfworkJn theh'ownbestJaten~;, lion is required.
haOs ~*hle, to tu~ back researche~ to the Valley Fever An/emms Foundafi~
:~ and ¢linicia~ who w~l move RO. Bax ~o~ ~ CAg~0& ~r Sandra Larson
· .o~toott~~ ~(~maa~ caU 8~4r~ o~ LSm-¥AL- February 22, 2005
MRY-~-L:~ 14:~B From:HCINTOSH & ~IRT ~1 8~ ~7~ To:R~eh~ax P.1/1
Ci~ of 8ake~fleld C1~ Cle~ ~.
; 501 Truxtun Avenue
Ba~rsfield, California 93301
A~N: Honorable Council Membe~
.,:na Survey~ng
Honorable Council Members;
~,/ii E~:]j;neoring A request has recently ~en made to your Council to consider
fundin8 the e~R to find a vaccine for Valley F~er, This request has
been refeffed to your Budget and Finance .Commi~ee, I am writing to
rh,~to&'ammetry you to request your s~(ious consideration of ~is effort, Please consider it
from the pem~ctive of one of ~e Major Employem in the So~hern San
J~quln Valley and i~ succ~sful development's effe~ °n the heal~ care
: p ; costs assoclat~ wi~ the illness. As an employer, I have had s~e~!
employees contract the disease. Recently, I have one employee that has
been ~ work ~r seve~l wee~, The financial impa~ on'oUr firm due to
the lost time and decrease In pmdu~ivi~ h~ been si~ificant, If you
: .' ~ ~, g check with your health insurance or workers com~.nsat[on cost you will
probably see a significant aff~ on ~e Ci~ budget.
?.'...'..' -~ ~n' u l The r~uest for funding for $50,000,00 is an Investment in ~e
future of the citizens of this communi~, Through our effo~ and othem
over $14 Million has been raised in punuit of a vaccine. $2.S Million ls
' '.-: .:., :~' ..,;t~-.:. n~d~ to take the project to a point where human trials may be possible.
Pl~se seriously consider this request as an Investment in the
future of the employe~ and citizens of the CiW of Bakersfield.
Roger A. Mclntosh
661,834.48~4 ~:rjs
Fax 661.834.0972
2001 Wheelan Cou~
Bakersfield, CA 93309
ADMINISTRATIVE- REPORT
[ME~""rINQ DATE: ,~el~embw 19, 2OOq I AC~ENOA BBC=TI H: Rel=Mf~
PROM; Joha W, Stlna~, Aanrala nt Oily Mana~m' DI[T~ARIM ENT H, EAD..._~,~.__
DA?';: Sa~n~ber q t, 200~ CITY Xl"rOl~N EY
~UBJ ECT: Resolulr~rt. eekabliahi(~g Council pol~ for e~tlu~[ing requests foe financial a~sletanoe ~rem
n~oroflt grOUl~.
RECtOMklENOATION'.
Buctget and ~Finen~ C~ontml~tee resMY~memls e~plfon ~f.lha resalutlM~ a~Ct ~Onditlens.
BACKGROUND:
HI~?ORI C P. pLIC¥:
The C[t)' i nnueliy' receives a v~uisb' of raqueeta to~ Oily f~nd~ fro-n non.l~ro~i! gr~ul~, Molt ere/aquas[ins
vse o! C~mrrmnilY Development Bloctc C3 ra~l Fund~ but lh~e am same W~i=b reque~l GeMral Fu~ as
~efl. In order to ral~ll/evaluate Iheae requests t,ha ¢l~Couneil ha~ had a policy that rheas refusals meet
. cenai',n ulterla.
· T~ Council in the pas( has eonstdam=l the fallowing,='lier~a when reviewing
· Or~a,-fi~a eXpenditure.~ rather then ~going
, Gepllsl expenditures rat~e~ l~an general open,ting e~end[luxe~;
, o~e-[ime a;[ivi(iee Which am tle~ to epeciS¢ high pr~dly CIty Ooundl goals;
Use of G]Iy facilities by' ~he non.t~roflt I1
The OouJ~oll I1~ the past baa car,f~lly ~valuated howlhese requesla are r,~neldered slnoe 1here =,re IImJled
t'unl~a aveile131e [o meed et.xah requesls due to 1ha fin~oiaJ ~mands of normal oily opeteliona end needs
~m~utfing police ~qd ~1~ prc4eollon, publiowtxg, a l. rt(~ olhet cfi). sauces. The Dour~il he~ alee Ioek~ lo
non-profits making requests, tO ~rovide melching ~rtmde ~o 1he oily does ~ol beau the en~iro cost of Lhe
I::eoposad project or ~tivity. The mal~..hi~ fund req~Jre,,1~l~ Is 6 deeonalratioa nf cem~unit¥ aupport for
RESOLLmON NO. I 5 2 ". 0 I
A RESOLUTION ESTABUSHING COUNCIL
POLICY FOR EVALUATING REQUESTS FOR
FINANCIAL ASSISTANCE FROM NON-PROFIT
GROUPS.
WHEREAS, the City Council from time to time receives requests for financial
assistance from non-profit groups; and
WHEREAS, the City Council must evaluate these requests for financial assistance
to determine the ability of.the City to consider such requests in accordance with Council
goals and given limited City resources; and
WHEREAS, the City Council requested that the Budget and Finance Committee of
'the Council review a policy for evaluating requests for financial assistance from non-profit
groups; and
WHEREAS, the Budget and Finance Committee has reviewed the proposed policy
and-is recommending its adoption; and
WHEREAS, a resolution of the City Council is necessary to adopt Council policy for
financial assistance from non-profit groups;
NOW, THEREFORE, BE IT RESOLVED as follows:
1. Ail the foregoing recitals are true and correct.
2. The Council may consider requests for financial assistance'from non-profit
groups if the request for financial assistance meets at least ;one of the following criteria:
a. It is for one-time expenditures rather than ongoing costs;
b. It is for capital expenditures rather than operating costs;
,c. It is for one-time activities which are tied to specific high priority City
Council goals;
d. It is for use of City facilities by the non-profit group.
Requests for financial assistance from non-profit groups .not meeting the criteria set forth
in this paragraph will not be considered for funding.
3. Non-profit groups requesting financial assistance shall provide current financial
information including Balance Sheets, Profit and Loss Statements and other pertinent
financial information to support their funding request. The non-profit group shall provide
evidence of matching funds so the City does not bear the entire cost of the proposed
project or activ'~¥.
ORiGiNAL
4. The Council will not consider assistance to non-profit groups for ongoing
operation and maintenance purposes with the exception of the following groups with which
the City has had an ongoing relationship, The Bakersfield Senior .Center, The Bakersfield
Museum of Art and The Bakersfield Symphony. The sources and amounts of funds to be
contributed annually to these three organizations is to be recommended by the City
Manager as part of the City's annual budget, subject to City Council review and approval.
6. The Council authorizes the City Manager to notify groups who make requests for
financial assistance which do not conform to this policy, that their request is outside
Council policy.
I HEREBY CERTIFY that the foregoing Resolution was passed and adopted
by the Council of the City of Bakersfield at a regular meeting thereof held on ~1
by the following vote:
Ayes: Council Member Benharn, Carson, Couch, Hanson, Maggard, Salvaggio, Sullivan
Noes: CouncilMember ~ ~
Abstain: CouncilMember ~ot3 ~.
Absent: Council Member I~t,.', E
CITY CLERK AND EX OFFICe) of the
Council of the City of Bakersfield
Mayor
APPROVED AS TO FORM:
BART J. THILTGEN
City Attorney
ORIGINAL
7
B A K E RS F I E L D
OFFICE OF THE CITY MANAGER
.MEMORANDUM
August 22, 2001
TO: Honorable Mayor and city Council
FROM: Alan Tandy, City Manager
SUBJECT: Requests for Financial Assi~a'nce
As you are aware, requests for financial assistance from non-profit groups have been on
a very rapid rise lately. Some examples include Kern County Museum, Bakersfield '
Museum of Art, Bakersfield Music Theatre, First Night, DBA, Bakersfield Symphony, and
Bakersfield College, among others. Not only is the number increasing, but also the
amounts requested.
All of these groups do good work - as do literally hundreds of other non-profits in town - all
of whom need more money.
For many years, the Council had a policy of not funding the ongoing operation and
maintenance costs of non-profit groups. There have been, however, certain exceptions,
including the Symphony, and periodic' assistance to two groups that had a long-term
relationship With the City by renting City facilities - the .Museum of Art and Bakersfield
Senior Center. Start up or one-time activities are also done such as First Night and Vision
2020. Those, however, are not ongoing operation and maintenance costs. We also have
service contracts with SPCA, CVB and KEDC - those are really purchase of services and
fall into a different category.
Until the Council clarifies its policy, we will continue to be besieged by additional requests -
ali good causes, all in need of money, but which cumulatively we cannot afford.
A few weeks ago, staff recommended a policy that would disallow, assistance to non-profits
for ongoing operation and maintenance purposes' with the exception of those with whom
we have had an ongoing relationship - the Bakersfield Senior Center, Bakersfield Museum
of Art and the Symphony.. The Council did. not act on that recommendation due, in part,
to the press of other business. Since that time, we have received four o(her requests..
Requests for Financial Assistance
Page 2
Staff now wants to add to our previous recommendation by adding sources and amounts
as follows: ,
Bakersfield Senior Center - $50,000 per year from the Housing and Community
Development Grant (beginning wit'h the FY 2002-03 budget)
Bakersfield Museum of Art - $25,000 per year from the General Fund (beginning
with the FY 2002-03 budget)
Bakersfield Symphony - rent equivalent at Convention Center (currently $46,000
per year)
In addition, staff would be instructed that when requests are received, we would write the
requesting agency back indicating their request is outside of adopted Council policy.
Pend~g requests for the DBA, Symphony and'First Night would be included in the
decision.
If this does not meet Council's expectations or desires, staff requests a full Council policy
discussion of alternatives. This is a serious matter which needs policy control that is
consistently applied.
DRAFT 2005 MEETING SCHEDULES
C~ty Counc~ Meetings ~ 5:J 5 p~m~ Budget Meetings & Presentations
Continued at 6:30 p~m. Monday~s 6~ Noon, Wednesday's 6}~ 5:15pm
Headn9 on 6/8, Adoption on 6/22
Ho~days - C}ty HaB C~osed Jo~r~t Cffy/County
JANUARY FEBRUARY MARCH
APRIL MAY JNE
~ 2
?i8 9
¢915 16
1122 23
~ 29 30
JULY AUGUST SEPTEMBER
OCTOBER NOVEMBER DECEMBER
[}raf~ Apr[ 28 2005
BUDGET AND F NANCE COMMITTEE
DRAFT 2005 r~IEET~NG SCHEDULE
~ Budget and Finance Committee Meetings @ i
City Council Meetings @ 5:i5 p.m. ~ Budget Meetings & Presentations
Continued at 6:30 p.m. Monday's ~ Noon, Wednesday's ~ 5:15pm
Hearing on 6/8, Adoption on 6/22
Holidays - City Hall Closed Joint City/County Meeting
JANUARY FEBRUARY MARCH
APRIL MAY JUNE
JULY AUGUST SEPTEMBER
OCTOBER NOVEMBER DECEMBER
23 24 25
Draft ~ ~ay ii, 2005