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HomeMy WebLinkAboutItem 15 - Agreement for Professional Auditing ServicesFinance and Management Services https://www.santa-ana.org/finance Item # 15 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report May 4, 2021 TOPIC: Agreement for Professional Auditing Services AGENDA TITLE: Approve Agreement with CliftonLarsonAllen LLP for Professional Auditing Services in an Aggregate Amount Not to Exceed $759,245, for Up to a Four -Year Term (General and Non -General Fund) RECOMMENDED ACTION Authorize the City Manager to execute an agreement with CliftonLarsonAllen LLP for professional auditing services, for a two-year period beginning with the fiscal year -ending June 30, 2021 and June 30, 2022, with a provision for one two-year renewal for the fiscal year -ending June 30, 2023 and June 30, 2024, for a total aggregate amount not to exceed $759,245, subject to non -substantive changes approved by the City Manager and City Attorney. DISCUSSION The Finance and Management Services Agency (FMSA) is responsible for overseeing the financial statement audits and examinations, along with the preparation of the City's Comprehensive Annual Financial Report. Annually, the City of Santa Ana utilizes the services of an independent Certified Public Accounting firm to conduct the annual audit of the City's financial statements, and state and federal grant audits (Single Audit). The audits are conducted in accordance with the generally accepted auditing standards and the Government Auditing Standards issued by the Comptroller General of the United States. The standard annual audits include the following: evaluation of internal controls, determination of compliance to legal requirements, application of General Accounting Standards Board (GASB) requirements, and validation that the City's financial statements are presented in accordance with Generally Accepted Accounting Principles (GAAP) in the United States of America. A total of seven accounting firms submitted proposals in response to the Request for Proposal (RFP) No. 21-024 (Exhibit 2); Badawi & Associates, CliftonLarsonAllen LLP, Crowe LLP, Davis Farr LLP, Eide Bailey LLP, Macias, Gini & O'Connell LLP, and The Pun Group. The seven proposals were evaluated and ranked by a Review Committee (Committee) composed of the following: Police Administrative Budget Manager, Community Development Agency Principal Management Analyst, Assistant Director of Agreement for Professional Auditing Services May 4, 2021 Page 2 Finance & Management Services Agency, Accounting Manager, and Supervising Accountant. The evaluation was based on the following factors: • Technical qualifications and experience of key members of the engagement team and the firm • Experience with similarly sized governmental agencies in providing the types of services outlined in the RFP • Financial stability and resources to handle all aspects of the engagement as specified in this RFP and provide ongoing support and technical assistance throughout the term of the agreement • Compliance with the requirements of the RFP. • Thoroughness of auditors' proposed scope of work, clearly defined schedule of work to be performed, and ability to meet required completion dates for key parts of the audit • Reasonableness of cost budget Based on the Committee's evaluation and review of references, CliftonLarsonAllen LLP (CLA) was selected as the most qualified firm to conduct the City's annual audit(s) and examinations (Exhibit 3). They demonstrated a high level of technical knowledge regarding all aspects of the City's engagement, and experience in the field of government accounting and auditing with similarly sized governments. CLA, one of the leading national accounting firms, acquired the City's current auditors, White Nelson Diehl Evans LLP in October 2020. In accordance with the Government Finance Officers Association best practices, CLA will rotate their engagement partner and senior manager to provide a fresh perspective and ensure continued objectivity. CLA is also able to offer the resources of a national firm, including but not limited to, various information technology software programs to streamline the audit process and complimentary training opportunities for City staff throughout the year. Additionally, the firm has proposed to include two Engagement Partners, which will provide the City with additional technical assistance in implementation of complex accounting standards. Their highly experienced audit team will allow the City to have a comprehensive, effective, and efficient audit. CLA will conduct the following audits and reviews of the City: • City Audit (Comprehensive Annual Financial Report), including management and audit committee letters • Single Audit of Federal Grants • Audit of Air Quality Improvement Program • GANN Limit Review • Compliance Review of the City's investment policy Agreement for Professional Auditing Services May 4, 2021 Page 3 • U.S. Department of Housing & Urban Development (HUD) Real Estate Assessment Center submission attestation and review of HUD Financial Data Schedule for the Housing Authority • Preparation of the City's State Controller's Report • Measure X (Sales Tax) Compliance Report • Agreed Upon Procedures or other services as requested by the Executive Director of Finance & Management Services Agency The proposed cost for the first year of the new contact is $181,260, which is a 2.4% decrease in annual cost to the City compared to the current year cost of $185,630. The aggregate contract amount reflects annual fee increases of 3% going forward. As such, staff recommends contracting with CLA to perform the annual auditing services for a period of two years and the option to renew for an additional two years. The Request for Proposal (RFP) No. 21-024 was advertised on February 22, 2021 and offers were solicited. A summary of the RFPs and offers received is as follows: • 114 Vendors were notified • 18 Vendors downloaded the RFP • 8 Santa Ana vendors notified • 7 Proposals received Outreach Efforts The Purchasing Division advertised this project on the City's online bid management and publication system, which directly notified eight Santa Ana vendors, one of which downloaded the RFP. The vendor based in Santa Ana submitted a proposal for consideration and was invited to interview. However; it did not rank in the top three. Furthermore, staff's outreach efforts also included directly reaching out to audit firms well- known in the local government circles requesting submission of proposals for the above - referenced RFP. ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. FISCAL IMPACT Funds for these services will be included in the following fiscal years' budget within the accounts noted below along with their respective audit related costs. The allocations are subject to non -substantive changes based on the actual work performed. Fiscal Accounting Unit- Fund Accounting Unit, Amount Year Account # Description Account Description Agreement for Professional Auditing Services May 4, 2021 Page 4 FY20-21 01110110-62300 General Fund FIN/MGMT SVS- $30,000 Accounting FY21-22 01110110-62300 General Fund FIN/MGMT SVS- $100,000 Accounting FY21-22 01110130-62300 General Fund FIN/MGMT SVS- $2,275 Treasury Services FY21-22 03116510-62300 Air Quality Planning -Air Quality Imp $3,475 Improvement FY21-22 14018760-62400 Housing Housing Authority- $24,000 Authority- Voucher Admin Voucher Admin FY21-22 67118021-62400 COSA-RDA COSA RDA Blig Retire $5,000 Obligation Debt Sry Retirement FY21-22 Various-62300 General Fund Various $46,510 and Various Grant Funds FY22-23 01110110-62300 General Fund FIN/MGMT SVS- $100,000 Accounting FY22-23 01110130-62300 General Fund FIN/MGMT SVS- $2,343 Treasury Services FY22-23 03116510-62300 Air Quality Planning -Air Quality Imp $3,580 Improvement FY22-23 14018760-62400 Housing Housing Authority- $25,000 Authority- Voucher Admin Voucher Admin FY22-23 67118021-62400 COSA-RDA COSA RDA Blig Retire $5,000 Obligation Debt Sry Retirement FY22-23 Various-62300 General Fund Various $50,922 and Various Grant Funds FY23-24 01110110-62300 General Fund FIN/MGMT SVS- $100,000 Accounting FY23-24 01110130-62300 General Fund FIN/MGMT SVS- $2,413 Treasury Services FY23-24 03116510-62300 Air Quality Planning -Air Quality Imp $3,690 Improvement FY23-24 14018760-62400 Housing Housing Authority- $25,000 Authority- Voucher Admin Voucher Admin Agreement for Professional Auditing Services May 4, 2021 Page 5 FY23-24 67118021-62400 COSA-RDA COSA RDA Blig Retire $5,000 Obligation Debt Sry Retirement FY23-24 Various-62300 General Fund Various $56,502 and Various Grant Funds FY24-25 01110110-62300 General Fund FIN/MGMT SVS- $70,000 Accounting FY24-25 01110130-62300 General Fund FIN/MGMT SVS- $2,485 Treasury Services FY24-25 03116510-62300 Air Quality Planning -Air Quality Imp $3,800 Improvement FY24-25 14018760-62400 Housing Housing Authority- $25,000 Authority- Voucher Admin Voucher Admin FY24-25 67118021-62400 COSA-RDA COSA RDA Blig Retire $5,000 Obligation Debt Sry Retirement FY24-25 Various-62300 General Fund Various $62,250 and Various Grant Funds Total $759,245 EXHIBIT 1. Professional Services Agreement with CliftonLarsonAllen LLP 2. Request for Proposal (RFP) #21-024, Professional Auditing Services 3. Response to RFP - #21-024 — CliftonLarsonAllen LLP Submitted By: Kathryn Downs, FMSA Executive Director Approved By: Kristine Ridge, City Manager EXHIBIT 1 AGREEMENT WITH CLIFTONLARSONALLEN LLP TO PROVIDE PROFESSIONAL AUDITING SERVICES THIS AGREEMENT is made and entered into on this 4th day of May, 2021, by and between CliftonLarsonAllen, LLP, a Minnesota limited liability partnership ("Auditor"), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California ("City"). RECITALS A. On February 22, 2021, the City issued Request for Proposal No. 21-024 ("RFP"), by which it sought an Auditor to perform Annual Independent Audits of the City's financial statements and records. B. Auditor submitted a timely and responsive proposal that was selected by the City. Auditor represents that it is recognized as a competent and qualified certified public accountant ("CPA"), licensed by the California State Board of Accountancy, and is able and willing to provide the services described in the scope of work that was included in the RFP, which shall be incorporated by reference as though attached hereto. C. In undertaking the performance of this Agreement, Auditor represents that it is knowledgeable in its field and that any services performed by Auditor under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES AUDITOR shall perform its Annual Independent Audit for the two fiscal years ending June 30, 2021 through June 30, 2022 fiscal years, as detailed in Exhibit A, and as set forth in City's RFP, and Auditor's proposal, incorporated by reference as though fully attached hereto. Said. services shall be performed in accordance with the process set forth in Auditor's Proposal. The Executive Director of Finance and Management for the City can request that Auditor provide other auditing services upon request in lieu of the two agreed upon procedure reviews identified in Exhibit B. 2. REPRESENTATIVES For purposes of implementing this Agreement, the representative of City shall be the Executive Director of the Finance and Management Services Agency, or her or his designated representative, and the representative of the Auditor shall be Daphnie Munoz, CPA Engagement Partner. Except as may be otherwise stated herein, such representatives shall have the authority to act on behalf of their respective parties in carrying out the terms of this Agreement. Page I of 9 3. DELIVERY OF WORK PRODUCT — OWNERSHIP Auditor warrants and represents that it has the absolute right to enter into and perform this Agreement and will perform its obligations hereunder in accordance with standards and practices prevailing in the industry. Auditor's contribution to the Project, including works to be produced by Auditor hereunder, will not infringe or misappropriate the proprietary or personal rights of any third person or party. Auditor shall deliver to City any work product which results from the services provided. Said work product shall be submitted in hard copy and produced in a form compatible with City's information systems, as agreed between the Project Manager and Auditor. In regard to all material produced as a deliverable under this Agreement, including but not limited to records, papers, drawings, specifications, programs, systems and other materials prepared by Auditor, Auditor agrees, for itself and its affected officers, employees, agents, contractors, and volunteer workers, that (a) other such material shall be the property of the City, and may not be copyrighted without prior review from the City, and ( b) the authors of all such material, whether copyrighted or not, award to the City, and to its officers, agents and employees acting within the scope of their official duties, as a condition of payment to the Auditor, a royalty -free, nonexclusive, irrevocable license throughout the world for governmental purposes to disclose, publish, translate, reproduce, and use such materials. 4. COMPENSATION a. City agrees to pay, and Auditor agrees to accept as total payment for its services for City, the rates and charges identified in Exhibit B. The total amount to be expended under this Agreement shall not exceed $759,245 during the term of this Agreement, including any extension periods. b. Payments to Auditor shall be made within forty-five (45) days after receipt by City of invoices from Auditor, which shall be rendered not more often than monthly. Special examinations, surveys, or detailed reports of any nature outside the scope of this Agreement shall be billed separately by Auditor and must be specifically authorized in writing by City in advance of such additional services proposed to be provided. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by City. 5. TERM The term of this Agreement shall be for a period of two (2) consecutive years, beginning with the fiscal year ending June 30, 2021 and June 30, 2022. CITY shall retain an option in its sole discretion to extend auditing services for one additional two -year period, exercisable by the City Manager, for the fiscal year ending June 30, 2023 and June 30, 2024, subject to nonsubstantive changes approved by the City Manager and City Attorney, Page 2 of 9 6. INDEPENDENT CONTRACTOR Auditor shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer -employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Auditor performs the services which arc the subject matter of this Agreement; however, the services to be provided by Auditor shall be provided in a manner consistent with all applicable standards and regulations governing such services. Auditor shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 7. INSURANCE Prior to undertaking performance of work under this Agreement, Auditor shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: a. Commercial General Liability Insurance_ . Auditor shall maintain commercial general liability insurance naming the City, its officers, employees, agents, volunteers and representatives as additional insured(s) and shall include, but not be limited to protection against claims arising from bodily and personal injury, including death resulting therefrom and damage to property, resulting from any act or occurrence arising out of Auditor's operations in the performance of this Agreement, including, without limitation, acts involving vehicles. The amounts of insurance shall be not less than the following: single limit coverage applying to bodily and personal injury, including death resulting therefrom, and property damage, in the total amount of $1,000,000 per occurrence, with $2,000,000 in the aggregate. Such insurance shall (a) name the City, its officers, employees, agents, and representatives as additional insured(s); (b) be primary and not contributory with respect to insurance or self-insurance programs maintained by the City; and (c) contain standard separation of insureds provisions. b. Business automobile liability insurance, or equivalent form, with a combined single limit of not less than $1,000,000 per occurrence. Such insurance shall include coverage for owned, hired and non -owned automobiles. C. Worker's Compensation Insurance. In accordance with the provisions of Section 3700 of the Labor Code, Auditor, if Auditor has any employees, is required to be insured against liability for worker's compensation or to undertake self-insurance. Prior to commencing the performance of the work under this Agreement, Auditor agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. d. If Auditor is or employs a licensed professional such as an architect or engineer: Professional liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim with $2,000,000 in the aggregate. e. The following requirements apply to the insurance to be provided by Auditor pursuant to this section: Page 3 of 9 i. Auditor shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement. ii. Certificates of insurance shall be furnished to'the City upon execution of this Agreement and shall be approved by the City. iii. Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the City. iv. Where the amounts or coverage provided by the certificates of insurance provides coverage greater than those listed by this Agreement, the amounts provided by the certificates of insurance shall be incorporated by reference into the Agreement. V. Auditor shall supply City with a fully executed additional insured endorsement. f. if Auditor fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right, at the City's election, to forthwith terminate this Agreement. Such termination shall not affect Auditor's right to be paid for its time and materials expended prior to notification of termination. Auditor waives the right to receive compensation and agrees to indemnify the City for any work performed prior to approval of insurance by the City. 8. INDEMNIFICATION Auditor agrees to defend, and shall indemnify and hold harmless the City, and its officers and employees from liability: (1) for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including death, and claims for property damage, which may arise from the negligent operations of the Auditor, its subcontractors, agents, employees, or other persons acting on its behalf which relates to the services described in section 1 of this Agreement; and (2) from any claim that personal injury, damages, just compensation, restitution, judicial or equitable relief is due by reason of any breach of the terms of this Agreement. This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered, or alleged to have been suffered, by reason of the negligent acts referred to in this Section or by reason of the breach of the terms of this Agreement. The Auditor further agrees to indemnify, hold harmless, and pay all costs for the defense of the City, including fees and costs for special counsel to be selected by the City, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement. City may make all reasonable decisions with respect to its representation in any legal proceeding. Notwithstanding the foregoing, to the extent Auditor's services are subject to Civil Code Section 2782.8, the above indemnity and defense obligation shall be limited to the extent provided by Civil Code Section 2782.8, and to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Auditor. Page 4 of 9 9. CONFIDENTIALITY All information gained by Auditor in performance of this Agreement shall be considered confidential and shall not be released by Auditor without City's prior written authorization excepting that information which is a public record and subject to disclosure pursuant to the California Public Records Act, government Code Section 6250 et seq. Auditor, its officers, employees, agents, or subcontractors, shall 'not voluntarily provide declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the project or cooperate in any way with a party who may be adverse to City or whom Auditor reasonably should know may be adverse in any subsequent litigation. Auditor shall incur no liability under this Agreement for materials submitted by it, which are later released by City, its officers, employees, or agents. Auditor shall also incur no liability for statements made by it at any public meeting, or for any document released by it for which prior written City authorization was obtained. If Auditor or any of its officers, employees, consultants, or subcontractors does voluntarily provide information in violation of this Agreement, City has the right to reimbursement and indemnity from Auditor for any damages caused by Auditor's conduct -- including attorney's fees. Auditor shall promptly notify City should Auditor, its officers, employees, agents or subcontractors be served with any Summons, Complaint, Subpoena, Notice of Deposition, Request for Documents, Interrogatories, Request for Admissions or other discovery requests from any party regarding this agreement and the work performed. hereunder. City retains the right, but not the obligation, to represent Auditor and /or to be present at any deposition, hearing, or similar proceeding. Auditor agrees to cooperate fully with City and to provide City with the opportunity to review any response to discovery requests provided by Auditor. However, City's right to review any such response does not imply or mean the right by City to control, direct, or rewrite said response. City warrants that Auditor will have fully met the requirements of this provision by obtaining City's written approval prior to providing documents, testimony, or declarations; Consulting with City before responding to a Subpoena or court order; in the case of depositions upon providing Notice to City of same; or providing City opportunity to review discovery responses prior submission. For purposes of this section, a written authorization from City shall include a' faxed" Ietter 10. CONFLICT OF INTEREST CLAUSE AUDITOR covenants that neither it nor any officer or principal of their firm have any interests, nor shall they acquire any interest, directly or indirectly which will conflict in any manner or degree with the performance of their services hereunder. AUDITOR further covenants that in the performance of this Agreement, no person having such interest shall be employed by them as an officer, employee, agent, or subcontractor. Page 5 of 9 11. NON-DISCRIMINATION Auditor shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, gender identity, gender expression, gender, medical conditions, genetic information, or military and veteran status, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, teaching, training, utilization, promotion, termination or other employment related activities or any services provided under this Agreement. Auditor affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 12. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and . Auditor, and supersedes any and all other agreements, oral or written, between the parties. In the° event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Auditor. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Auditor or the City. Each party to this Agreement acknowledges that no. representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which is not embodied herein. 13. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Auditor, .Auditor may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other Auditors retained by City. 14. TERMINATION This Agreement may be terminated by the City upon thirty (30) days written notice of termination. In such event, Auditor shall be entitled to receive and the City shall pay Auditor compensation for all services performed by Auditor prior to receipt of such notice of termination, subject to the following conditions: a. As a condition of such payment, the Executive Director may require Auditor to deliver to the City all work product(s) completed as of such date, and in such case such work product shall be the property of the City unless prohibited by law, and Auditor consents to the City's use thereof for such purposes as the City deems appropriate. b, Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement. Page 6 of 9 15. WAIVER No waiver of breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this Agreement shall be effective unless it is in writing and signed by the party waiving the breach, failure, right or remedy. No waiver of any breach, failure or right, or remedy shall be deemed a waiver of any other breach, failure, right or remedy, whether or not similar, nor shall any waiver constitute a continuing waiver unless the writing so specifies. 16. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 17. PROFESSIONAL LICENSES Auditor shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Auditor shall notify the City immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 18. MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature herein below has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify City fully, including reasonable costs and attorney's fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. 19. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by fax or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M-30) Page 7 of 9 P.O. Box 1988 Santa Ana, CA 92702-1988 Fax: 714- 647-6956 With courtesy copies to: Executive Director, Finance and Management Services Agency City of Santa Ana 20 Civic Center Plaza (M-17) P,O. Box 1988 Santa Ana, California 92702 Fax: 714-647-5414 To Auditor: CliftonLarsonAllen, LLP 2875 Michelle Drive, Ste. 300 Irvine, CA 92606 Fax: 714-978-7893 A party may change its address by giving notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by fax, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. [signature page to follow] Page 8 of 9 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: CITY OF SANTA ANA Daisy Gomez Cleric of the Council APPROVED AS TO FORM: SONIA R. CARVALHO City or y By: Ryan O. od Assistan ity Attorney RECOMMENDED FOR APPROVAL: • 1l-..... Nmh,nW—ft ,—, 665 Mp Kathryn Downs, CPA Executive Director Finance and Management Services Agency Kristine Ridge City Manager AUDITOR: By: Daphnie Munoz Title: PC f n C1 P n i Page 9 of 9 City of Santa Ana EXHOT A SCOPF OF SERVICES Methodology. Our audit is performed based on a risk -based approach. We conduct our audits under the concept of "understanding the entity." This concept is based fundamentally on the fact that the City is unique. By understanding the City, we gain the necessary perspective for performing an effective audit. Our audit approach places particular emphasis on the planning phase to determine maximum efficiency and effectiveness. When performing an audit, we are sensitive and understanding of the fact that we report to those charged with governance. We maintain objectivity and independence in order to be able to issue our audit opinions. We will act within our philosophy of total client service, maintain the professional relationship refined with management, and fulfill our responsibilities with the utmost professionalism. Yearlong support: We encourage your staff to take advantage of our accessibility throughout the year for questions that may arise. Our people, working with you and your staff, can provide proactive advice on new accounting or GAAP pronouncements and their potential impact; help with immediate problems including answers to brief routine questions, and share insights and best practices to assist you in planning for your future success. The assessment phase of an engagement starts when an engagement letter is issued. Upon notice of contract award, we will prepare a contract and engagement letter. We will communicate our plan to start the work and to discuss the audit process. These discussions are intended to accomplish the following: • Identify key management and staff involved in the audit • Identify primary audit liaisons • Introduce our audit team and identify key CLA contact personnel • Discuss the timetable • Explain our means and ways of communication • inquire about any issues, which we may need to be aware of • Discuss logistics and administrative matters • Complete a preliminary assessment of risk based on a review of prior year workpapers. and knowledge of your organization Through all phases of the audit, we think it is important to have regular communications with the City's management to discuss the status of the engagement. We will provide timely communication of any critical issues, concerns, and potential findings with the person primarily responsible for the area and our audit liaisons. We will be available to meet with key management prior to issuance of the final audit report. This meeting will highlight some of the results of the audit, any outstanding items, and reporting and issuing processes. The main objective of the planning phase is to identify significant areas and design efficient audit procedures. We will accomplish our planning by following the methodology below: • Conduct an entrance meeting with the City's personnel to mutually agree on an outline of responsibilities and timeframes. The agenda will include but not be limited to the following: Establish audit approach and timing schedule Assistance to be provided by the City's personnel - Application of generally accepted accounting principles - Initial audit concerns - Concerns of the City's management - Establishment of report parameters and timetables - Progress reporting process - Establish principal contacts • Gain an understanding of the operations of the City, including any changes in its organization, management style, and internal and external factors influencing the operating environment. We will utilize reference materials such as the budget and related materials, organizational charts, manuals and programs, financial, and other management information systems • Identify significant accounts and accounting applications, critical audit areas, significant provisions of laws and regulations, and relevant controls over operations • Determine the likelihood of effective Information Systems (IS) - related controls • Perform a preliminary overall risk assessment • Confirm protocol for meeting with and requesting information from relevant staff • Establish a timetable for the fieldwork phase of the audit • Determine a protocol for using TeamMate Analytics and Expert Analyzer (TeamMate), our data extraction and analysis software, to facilitate timely receipt and analysis of reports from management • Compile an initial comprehensive list of items to be prepared by the City, and establish mutually agreed upon deadlines We will document our planning through preparation of the following: • Entity Profile. This profile will help us gain an understanding of the City's activities, organizational structure, services, management, key employees, and regulatory requirements • Preliminary Analytical Procedures. These procedures will assist in planning the nature, timing and extent of auditing procedures that will be used to obtain evidential matter. They will focus on enhancing our understanding of the financial results, and will be used to identify any significant transactions and events that have occurred since the last audit date, as well as to identify any areas that may represent specific risks relevant to the audit • General Risk Analysis. This will contain our overall audit plan, including materiality calculations, fraud risk assessments, overall audit risk assessments, effects of our IS assessment, timing, staffing, client assistance, a listing of significant provisions of laws and regulations and other key planning considerations • Account Risk Analysis. This document will contain the audit plan for the financial statements, including risk assessment and the extent and nature of testing by assertion • Prepared by Client Listing. This document will contain a listing of schedules and reports to be prepared by the City's personnel with due dates for each item One of the key elements in the planning of this audit engagement will be the heavy involvement of principals and managers. We will clearly communicate any issues in a timely manner and will be in constant contact with the City as to what we are finding and where we expect it will lead. We will develop our audit programs during this phase. Utilizing the information, we have gathered, and the risks identified, we will produce an audit program specifically tailored to the City. This program will detail by major section the nature and types of tests to be performed. We view our programs as living documents, subject to change as conditions warrant. During the systems evaluation phase, we will gain an understanding of the internal control structure of the City for financial accounting and relevant operations. Next, we will identify control objectives for each type of control that is material to the financial statements, and then identify and gain an understanding of the relevant control policies and procedures that effectively achieve the control objectives. Finally, we will determine the nature, timing, and extent of our control testing and perform tests of controls. This phase of the audit will include testing of certain key internal controls: • Electronic data, including general and application controls reviews and various user controls • Financial reporting and compliance with laws and regulations We will test controls over certain key cycles. One audit efficiency initiative is to rely heavily on internal controls when appropriate, and to creatively look at internal control testing to make it as efficient as possible. This means not routinely performing detailed tests of transactions using large samples. We first seek to identify key controls, and then identify possible testing through alternative methods, such as observation, interviews, and re -performance. These tests serve not only to gather evidence about the existence and effectiveness of internal control for purposes of assessing control risk, but also to gather evidence about the reasonableness of an account balance. We will also develop our internal control tests to assess the compliance with certain provisions of laws, regulations, contracts, and grants for which noncompliance could have a direct and material effect on the determination of financial statement amounts. Our use of multi -purpose tests allows us to provide a more efficient audit without sacrificing quality. Our assessment of internal controls will determine whether the City has established and maintained internal controls to provide reasonable assurance that the following objectives are met: • Transactions are properly recorded, processed, and summarized to permit the preparation of reliable financial statements and to maintain accountability over assets • Assets are safeguarded against loss from unauthorized acquisition, use, or disposition • Transactions are executed in accordance with laws and regulations that could have a direct and material effect on the financial statements We will finalize our audit programs during this phase. We will also provide an updated Prepared by Client Listing based on our test results and our anticipated substantive testing. During the internal control phase, we will also perform a review of general and application Information Systems (IS) controls for the applications that are significant to financial statements to conclude whether IS general controls are properly designed and operating effectively, and consider application controls as part of the internal control assessment in the financial statement audit. Our strategy for the IS review of the applications will involve reviewing all the general control activities, including the computerized and manual processes. We will determine the scope of work by applying the concepts of materiality and risk assessment to effectively reduce examination inefficiencies. When planning this examination, we will gain an understanding of the City's operations by reviewing its current controls and control objectives as documented and will also review prior years' audit work and the status of corrective actions. Based on our preliminary review, we will perform an initial risk assessment of each critical element in each general control category, as well as an overall assessment of each control category. We will then proceed to assess the significant computer -related controls. For IS -related controls that we deem to be ineffectively designed or not operating as intended, we will gather sufficient evidence to support appropriate findings and will provide recommendations to improve internal controls. For those IS controls that we deem to be effectively designed, we will perform testing to determine if they are operating as intended through a combination of procedures, including observation, inquiry, inspection, and re -performance. The extent of our substantive testing will be based on results of our internal control tests. It has been our experience that governmental entities, like the City, often have a system of internal controls that, with appropriately designed tests and correlation to account balances, can be used to limit the extent of account balance substantiation testing. Audit sampling will be used only in those situations where it is the most effective method of testing. Before deciding to sample, we will consider all possible approaches and audit techniques. Items where, in our judgment, acceptance of some sampling risk is not justified will be examined 100 percent. These may include unusual items or items for which potential misstatements could individually equal or exceed tolerable error. After identifying individually significant or unusual items, we will decide on the audit approach for the remaining balance of items by considering tolerable error and audit risk. This may include (1) testing a sample of the remaining balance; (2) lowering the previously determined threshold for individually significant items to increase the percent of coverage of the account balance; or (3) applying analytical procedures to the remaining balance. When we elect to sample balances, we will use IDEA to efficiently control and select our samples. Our work papers during this phase will clearly document our work as outlined in our audit programs. We will also provide the City with status reports during the audit fieldwork. As in all phases of the audit, we will be in communication with the City to determine that all identified issues are resolved in a timely manner. We will also hold a final exit conference with the City to summarize the results of our fieldwork and review significant findings. Reports to management will include oral and/or written reports regarding: Independent auditors' report Management letter Written communication to those charged with governance, which includes the following areas: — Our responsibility under auditing standards generally accepted in the United States of America — Changes in significant accounting policies or their application — Unusual transactions — Management judgments and accounting estimates — Significant audit adjustments — Other information in documents containing the audited financial statements — Disagreements with the City — The City's consultations with other accountants — Major issues discussed with management prior to retention — Difficulties encountered in performing the audit — Fraud or illegal acts Once the final review of working papers and financial statements are completed — a process that actually starts while the fieldwork is in process — our opinion, the financial statements, and management letter will be issued. The City will be provided a draft of any comments that we propose to include in the management letter, enabling you to review the comments for accuracy prior to final release. Any items that come to our attention that are not what we consider major items may be discussed verbally with management and not included in the management letter, Our management letter will include items noted during our analysis of your operations. We will also make a formal presentation of the results of the audit to those charged with governance of the City, if requested. Sample size and statistical sampling We follow the guidance of AU-C Section 530, Audit Sampling, in using statistical and nonstatistical approach. We use quality control material in all our audit engagements. These AU-C Section 530 — "Audit Sampling" forms guide our staff through a logical process of assessing inherent risk, control risk, and combined audit risk, followed by an assessment of appropriate sample size for testing. Sample sizes will vary depending on the nature of the testing (compliance versus substantive) and the size of the population being sampled. Sampling techniques are utilized in compliance and internal control testing, as well as substantive testing of certain asset and liability account balances. Sample sizes used for internal control testing depend on a number of factors, namely the number of expected or actual control deviations, size of population, and level of control assurance anticipated. Sample sizes can range from 20 to 90 possible selections. To illustrate, if no internal control deviations are anticipated and the frequency of the population (i.e., the number of times the control is performed in a given year) is less than 100, then we will test 20 transactions in order to obtain moderate control assurance. If 2 internal control deviations are anticipated, and the frequency of the population is greater than 200, then we will test 90 transactions in order to obtain low control assurance. We are usually able to cover a substantial portion of the compliance and controls testing with one sample, resulting in a very efficient approach. Data analytics In addition to standard auditing methodology, a distinguishing aspect of CLA's audit services incorporates the power of data analytics to multiply the value of the analyses and the results we produce for clients. CLA's data methodology is a six -phase, systematic approach to examining an organization's known risks and identifying unknown risks. Successful data analysis is a dynamic process that continuously evolves throughout the duration of an engagement and requires collaboration of the engagement team. Data analytics are utilized throughout our audit process, our risk .assessment, Data Analytics and review ("RADAR") is a specific application of general ledger data analytics that has been implemented on all audit engagements. RADAR is an innovative approach created and used only by CLA that aims to improve and replace traditional preliminary analytics that were being performed. The phases in our data analytics process are as follows: 1. Planning In the planning stage of the engagement, the use of data analysis is considered and discussed to determine that analytics are directed and focused on accomplishing objectives within the risk assessment. Areas of focus, such as journal entries, cash disbursements, inventory, and accounts receivable are common. 2. Expectations We consider the risks facing our client and design analytics to address these risks. Through preliminary discussions with management and governance, we develop and document expectations of financial transactions and results forth e year. These expectations will assist in identifying anomalies and significant audit areas in order to appropriately assess risk. 3. Data Acquisition Sufficient planning, a strong initial risk assessment, and an adequate understanding of your systems will serve as the foundation necessary to prepare our draft data request list. We will initially request information in written format and conduct follow-up conversations helping CLA practitioners our staff share a mutual understanding of the type of data requested and the format required. If there are going to be any challenges/obstacles related to obtaining data, or obtaining data in the preferred format, they will generally be discovered at this point, 4. Technical Data Analysis Technical analysis of the data requires the skillful blend of knowledge and technical Y 4 g capability. Meaningful technical analysis provides the engagement team with a better understanding of the organization. The additional clarity assists the comprehensive and Insightful engagement team to better assess what is "normal" and, in turn, be better suited to Analytics spot anomalies, red -flags and other indications of risk. Analytics generally fall into five categories, each looking into the data set in a different way and deployed with a different purpose. 5. Interpret Results and Subsequent Risk Assessment Trends and anomalies will be identified through the performance of the above referenced analytics. Comments regarding the interpretation of those trends and anomalies will be captured. When trends are identified they are reconciled against expectations. For anomalies identified, the approach to further audit procedures will be considered. 6. Response and Document The last process is to capture responses and determine that our procedures are properly documented. Abstracts, charts or summaries of both trends and anomalies are retained in the audit documentation to support our identification of risks. Our analysis can be tailored and customized to help analyze an array of information, including client specific and proprietary data. Key benefits of data analytics include: • Built-in audit functionality including powerful, audit specific commands and a self -documenting audit trail • 100 percent data coverage, which means that certain audit procedures can be performed on entire populations, and not just samples • Unlimited data access allows us to access and analyze data from virtually any computing environment • Eliminates the need to extrapolate information from errors (a common effort when manually auditing data) and allows for more precise conclusions The below figure illustrates typical data analytics scenarios. f5.0ae.aoo -- User Activity by Month 14.000.OW rrm u,000.000 10,000.000 rw. rna, .d 6.D00,000 4 f r"ni 9.060,000 � rHP 1 ra.r 2,000.000 ■1b. Bsirroxcn G1owx cbrewn "A- yurx Si00.a00 Receipts and Disbursements Trending $ 00 oae 51100.G00j S "o, fir' 51200.u00}, Si1a0,aaoV 5(400.0m) ....,r _. S[sao,ewl SIs00A0r1 Transaction Activity 4.0*0 =�� iDato Analytics. At the end of a series of pre -determined analytics (often retrieved from multiple proprietary accounting systems) that are customized to the project at hand, we identify anomalies and potential errors in transactions. In every case, we review what appears to be inappropriate activity, including supporting documentation evidencing the transactions. Procedures used to understand internal processes and controls We understand with a change in the engagement principal and a different approach with CLA would require a new to develop an understanding of the City and its internal control and operating structure. We also strive to develop our understanding in the least intrusive manner possible, while still maintaining our professional responsibilities. We would utilize a combination of internal control forms and interviews with key accounting personnel to gain and document our understanding of the City. We will also use as a baseline any existing internal control processes, policies, organizational charts, etc. the City may have already documented. Tests of design and operating effectiveness would then be performed to confirm our understanding. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) has established a framework for internal control systems. Under C050 In term! Control: the COSO framework, internal control is a process to provide reasonable Integrated Framework assurance that those internal objectives, including effectiveness and efficiency of business operations, reliability of financial reporting, and compliance with applicable laws and regulations, will be met. Our audit approach is designed to evaluate and test the departmental internal controls in accordance with COSO concepts. Our procedures include a review of the overall control environment, determination of the internal controls which are determined to be direct and material to the federal program under review, determination of the adequacy of those procedures, and testing of the procedures to determine if they are functioning as designed. During the planning and internal control phases of our audit, we will develop our understanding of the City's business operations and internal control structure for financial accounting and relevant operations through observation, discussion, and inquiries with management and appropriate personnel. During this phase of the audit, we will review budgets and related materials, organization charts, accounting and purchase manuals, and other systems documentation that may be available. Once we understand your operations, we will then identify control objectives for each type of control that is material to the financial statements. The next step will be to identify and gain an understanding of the relevant control policies and procedures that effectively achieve the control objectives. We will then determine the nature, timing, and extent of our control testing, and perform tests of controls. This phase of the audit will include extensive testing of controls over transactions, financial reporting, and compliance with laws and regulations. Whenever possible, we will use dual-purpose tests to reduce the need to select multiple samples for internal control and compliance testing. We will be as efficient as possible, thereby reducing the disruption to your operations while achieving our audit objectives. Our assessment of internal controls will determine whether the City has established and maintained internal controls to provide reasonable assurance that the following objectives are met: • Transactions are properly recorded, processed, and summarized to permit the preparation of reliable financial statements and to maintain accountability over assets • Assets are safeguarded against loss from unauthorized acquisition, use, or disposition • Transactions are executed in accordance with laws and regulations that could have a direct and material effect on the financial statements Our workpapers during this phase will clearly document our work through the preparation of the following for each significant transaction cycle or accounting application: • Audit program • Cycle memo and supporting documentation • Account risk analysis (ARA) • Specific control evaluation (SCE) Approach to be taken in determining laws and regulations that will be subject to audit test work We will obtain an understanding of the laws and regulations that have an impact on the City's operations by reviewing council minutes to identify any ordinances or resolutions that might have an impact to operations and reporting by the City, as well as interview key personnel and management of the City. Additionally, the staff assigned to the engagement attend regular trainings and are well versed in upcoming legislation, federal and state laws (i.e. Uniform Grant Guidance) and proactively discuss these upcoming changes with our clients. We will also review current operations, contracts and IGA's that may have an impact on current operations. Identification of anticipated potential audit problems In situations where authoritative guidance on a particular transaction or accounting issue is unclear or subject to interpretation, our approach is to proactively meet with management to discuss the issue and reach a conclusion that is hopefully agreed upon by both parties. We do not have specific "firm policies" that dictate our conclusions to be reached on all complex accounting issues. Rather, each issue must be evaluated independently by our engagement team. As discussed above, we will not only meet internally, but also facilitate discussion with the City's management team in order to obtain a mutual understanding of the particular accounting issue, determine the applicable authoritative guidance that most closely relates to the issue, and strive to reach an approach agreed upon by both parties. If there still remains any ambiguity or disagreement, we can explore other resources that could possibly assist, such as subject matter professionals within the Government Accounting Standards Board staff or the Government Finance Officers Association (GFOA) or perhaps other municipalities who may have dealt with similar issues. Use of technology in the a0dit We're reimagining the audit process through technology to elevate your experience! Secure, Interactive Request Lists Anal tics and Insights Y >; `■`�� Impactful Interactions Assurance Information Exchange (AIE) — To make working with CLA a seamless experience, our team utilizes a proprietary, secure web -based application to request and obtain documents necessary to complete client engagements. This application allows CLA and our clients to view a live client assistance letter client, which provides detailed information, including due dates for all the open items CLA is requesting. Additionally, clients can attach electronic files and add commentary related to the document requests directly on the application. Follow the link to view a brief tutorial of the Assurance Information Exchange. Microsoft' Teams— Our services approach focuses on impactful interactions. We've said goodbye to the days of setting up camp in our clients' conference rooms for weeks on end. We know our clients have organizations to run, so our interactions have purpose. To assist with communications when we are not onsite, we utilize tools such as Microsoft Teams, which allow for two-way screen sharing and video, We've found this helps minimize disruptions in our clients' environments while continuing to effectively communication with each other. TeamMate Analytics and Expert Analyzer (TeamMate) — To analyze and understand large data sets, we use TeamMate Analytics and Expert Analyzer. We customize the application by industry in order to perform B. Response the most applicable procedures. This allows us to go beyond sampling tTcnument and instead analyze the entire general ledger for targeted anomalies. 'IF DotoAnalytics Far beyond the audit application, our six -phase process of Risk methodotogy Assessment, Data Analytics and Review (RADAR) can also provide A ro actionable insights to help you understand your entity better. 4. Technical Data Analysis Commitment to Communication with Management As you will see, we are committed to ongoing communication throughout the engagement. Continual communication starts when an engagement letter is issued, continues until the completion or closeout of an engagement, and throughout the remainder of the year. We believe effective communication is critical to a successful engagement. This communication includes the exchange of ideas and advice as changes are considered or implemented by the entity or the accounting profession. During the engagement we will hold regular status meetings with the City to enhance day-to-day operations, to communicate results, and to ensure that any issues are commonly understood and addressed. The objectives of tracking and formally reporting the engagement status are to: • Provide a consistent technique for monitoring progress against plan • Identify any issues quickly to allow for timely corrective action • Provide an objective rather than subjective evaluation of status • Provide timely information on a regular basis • Assist with obtaining buy -in of any audit recommendations on a timely basis Working remotely under special circumstances CLA exists to create opportunities for our clients, our people, and our communities. For several years now we have fostered a remote culture throughout the firm understanding that flexibility to work remotely enables us to better serve our clients under a variety of circumstances. In fact, we had already implemented a number of tools, before the Covid-19 pandemic developed, such as Assurance Information Exchange (AIE) and Microsoft® Teams, which we utilize to provide seamless service to our clients. As we continue to navigate these uncertain times, CLA will work with the District to determine the correct balance of in -person and remote field work to best meet the District's needs. If onsite work is performed, a senior supervising auditor will be on site for 100% of the time when procedures are performed, and the principals will be available throughout field work. Whether we are working with the District remotely or in person, CLA is committed to performing your audit services and meeting your deadlines. c. Segmentation, timeline, and completion dates An important distinction between CLA and other firms is the amount of principal and manager involvement in the engagement. Because our principals and managers are directly involved in the engagement during fieldwork, we can proactively identify significant issues immediately and resolve them with management so that the engagement is essentially complete when fieldwork ends. We expect that the majority of our audit hours will be concentrated in the high -risk audit areas. Our approach is not to overwork every account with extensive substantive testing. While substantive testing remains part of the process, we think out -of -the -box analytically, identify relationships and truly learn about your operations. Assuming that the interim fieldwork commences in late May or early June and final fieldwork commencing in October, the following is an abbreviated suggested timeline and milestones to meet the deadlines listed in the RFP: Entrance conference Principal / Manager May 31 Preliminary risk assessment and initial audit plan Principals / Manager June 30 SEFA review & major program determination Manager/ Senior December 15 Understanding of the City's internal controls Manager/Senior June 30 Perform walkthroughs and internal control testing Senior / Staff June 30 Evaluate information system controls Manager / Senior June 30 Final risk assessment and comprehensive audit plan Principal / Manager June 30 Exit Conference to discuss interim fieldwork results Principal/Manager June 30 Single Audit major program internal control and Senior / Staff January 31 compliance testing Financial Statement substantive testing and analytical Senior /Staff November 15 procedures Exit Conference to discuss final fieldwork results Principal / Manager November 15 Drafting reports (, Management Letter, Single Audit, other deliverables) and required communications Manager /Senior November 30 Detailed review of work Principal / Manager November 15 Communications with management Principal / Manager November 15 Finalization of reports and required communications Principal / Manager December 10 Reports to be issued and due dates We make a commitment to issue the reports by the due dates specified below with interim fieldwork in May/June and final fieldwork completed by November15 for the June 30 year end audits Independent Auditor's Report on City of Santa Ana Financial Audit Independent Auditors' 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 Communication to those in charge of governance (Audit Committee Letter) Single Audit Report: Independent Auditors' Report on compliance for each major program and internal control over compliance required by Uniform Guidance, formerly OMB Circular A-133 Air Quality Improvement Fund (AQMD) GANN Limit computation Investment Policy Compliance Review U.S. Department of Housing of Urban Development (HUD) Real Estate Assessment Center (REAC) submission attestation and review of HUD Financial Data Schedule (FDS) for the Housing Authority Annual State Controller's Report Measure X (Sales Tax) Compliance Report n/a December 10 November30 December 10 November 30 December 10 February 15 February 28 November 30 December 10 November 30 November 30 n/a n/a December 10 December 10 February 28 January 31 November 30 December 10 Agreed -Upon -Procedures Report TBD TBD d. Segmentation of hours Proposed staffing plan and segmentation of the audit hours by principal and staff level are as follows: City audit, including management and audit committee letters 50 100 610 10 770 Single Audit of Federal Grants 12 40 220 3 275 AQMD Audit of the Air Quality Improvement Fund 1 4 24 -- 29 GANN Limit Review -- 1 8 -- 9 Compliance Review of the City's Investment Policy 2 12 16 -- 30 Preparation of the Santa Ana Housing Authority's Financial Data Schedule 2 4 -- - 6 MeasureX— Agreed -Upon Procedures 4 8 36 2 50 Preparation of the City's State Controller's Report - 8 40 -- 48 Total Hours 71 177 954 15 1,217 Two Agreed -Upon Procedures Reviews, Annually (1) 8 18 108 4 138 (1) The hours for agreed -upon procedures are estimated and subject to negotiation once the scope of each agree -upon procedures are determined. Proposed staffing plan and segmentation of audit hours by principal and staff level by phases are as follows: City audit and related reports Phases 1 and 2 Phase 3 Phase 4 Phase 5 Measure X Single Audit Total Hours 3 8 8 1 20 12 24 130 -- 166 12 32 440 -- 484 28 65 120 9 222 4 8 36 2 50 12 40 220 3 275 71 177 954 15 1,217 5 Cost Proposal a. Cost breakdown by contract year City of Santa Ana EXHIBIT B SCHEDULE OF PROFESSIONAL FEES AND EXPENSES The compensation for financial auditing and report preparation services to be provided in each fiscal year, in accordance with this agreement, is shown below: Option Years Description of Services FY 2020-21 FY 2021-22 FY 2022-23 FY 2023.24 City audit, including management and audit committee letters $100,850 $104,025 $107,295 $110,665 Single Audit of Federal Grants 38,480 39,635 40,825 42,050 AQMD Audit of the Air Quality Improvement Fund 3,475 3,580 3,690 3,800 GANN Limit Review 895 920 950 980 Compliance Review of the City's Investment Policy 4,550 4,685 4,825 4,970 Preparation of the Santa Ana Housing Authority's Financial Data Schedule 1,350 1,390 1,430 1,475 Measure X -Agreed-Upon Procedures 7,020 7,230 7,445 7,670 Preparation of the City's State Controller's Report 5,600 5,770 5,945 6,120 Two Agreed -Upon Procedures Reviews, Annually (1) 19,040 19,610 20,200 20,805 Maximum Not -to -Exceed Total Fee $181,260 $186,845 $192,605 $198,535 (I)The hours and fees for the agreed -upon procedures are estimated and subject to negotiation once the scope of each agreed - upon procedures are determined. The City, during the term of this agreement, may request that Consultant provide special services in accordance with the provisions of this agreement. if Consultant agrees to perform the special services, the Consultant's hourly fees to perform these services for the term of the agreement are as follows unless a lesser fee is agreed to in a separate agreement between the City and Consultant. Option Years Title FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 Partners $275 $283 $292 $300 Managers 200 206 212 219 Supervisory Staff 150 155 159 164 Staff Auditor 100 103 106 109 Clerical 60 62 64 66 Expenses: All expenses incurred by the Consultant in performing the services in accordance with this agreement are included in the above annual fee quotes. These expenses include, but are not limited to: meals and lodging, transportation, communications, report preparation, word processing, and printing, and postage. THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL, PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. Our fees are based on the timely delivery of services provided, the experience of personnel assigned to the engagement, and our commitment to meeting your deadlines. CLA understands the importance of providing our clients with value-added strategies. We propose to provide routine, proactive quarterly meetings — as part of our fee — that will allow us to review and discuss with you the impact of new accounting issues, as well as any other business issues you are facing and how they should be handled. This level and frequency of interaction will no doubt enable CLA to help you tackle challenges as they come up and take full advantage of every opportunity that presents itself. We have found over the years that our clients don't like fee surprises. Neither do we. We commit to you, as we do all of our clients, that: • We will be available for brief routine questions at no additional charge, a welcome investment in an on- going relationship. • Like most firms, we are investing heavily in technology to enhance the client experience, protect our data environment, and deliver quality services. We believe our clients deserve clarity around our t technology and client support fee, and we will continue to be transparent with our fee structure. • Any additional charges not discussed in this proposal will be mutually agreed upon up front. • We will always be candid and fair in our fee discussions, and we will avoid surprises. b. Billing for supplemental services It is not our policy or practice to bill our clients every time we receive a phone call. In the course of providing our services to you, we will regularly consult with you regarding accounting, financial reporting, and significant business issues. If a specific project is complex or requires significant time or resources, we will discuss the scope of the project and its fee with you first to make sure there are no surprises. While it is difficult to establish an exact policy for billing in these situations, we commit to discussing the request with you in advance of performing our services if we believe the time requirement to provide you the desired assistance is other than routine. We will discuss the scope of the project and our estimate to complete it prior to commencing work. We have a 24 to 48-hour response policy to return calls and emails from our clients to provide effective and timely communication. If the person you need to talk to is not available at the time you call, we will contact him/her and have him/her get back to you. We have a number of qualified professionals on our staff who can provide you with timely and competent assistance. Our last word on fees — we are committed to serving you. Therefore, if fees are a deciding factor in your selection of an accounting firm, we would appreciate the opportunity to discuss our audit plan. At CLA, it's more than just getting the job done. Clifton LarsonAllen - Auditing Services(122774.1) Final Audit Report 2021-04-20 Created: 2021-04-20 By: Kristin Andrade (kandrade@santa-ana.org) Status: Signed Transaction ID: CBJCHBCAABAA3_bXKBgwUcWiyOlhgmXP-ZVxzdfYsUGw "CliftonLarsonAllen - Auditing Services(122774.1)" History Document created by Kristin Andrade (kandrade@santa-ana.org) 2021-04-20 - 10:01:12 PM GMT- IP address: 98.153.69.210 C. Document emailed to Kathryn Downs (kdowns@santa-ana.org) for signature 2021-04-20 - 10:01:35 PM GMT Email viewed by Kathryn Downs (kdowns@santa-ana.org) 2021-04-20 - 10:05:31 PM GMT- IP address: 98.153.69.210 &0 Document e-signed by Kathryn Downs (kdowns@santa-ana.org) Signature Date: 2021-04-20 - 10:05:57 PM GMT - Time Source: server- IP address: 98.153.69.210 Agreement completed. 2021-04-20 - 10:05:57 PM GMT a Adobe Sign EXHIBIT 2 REQUEST FOR PROPOSALS (RFP) NO. 21-024 FOR PROFESSIONAL AUDITING SERVICES CITY OF SANTA ANA FINANCE & MANAGEMENT SERVICES AGENCY Sergio Vidal Assistant Director of Finance & Management Services Agency KEY RFP DATES: The schedule below is tentative and subject to change at the discretion of City, with appropriate notice to prospective Proposers. Issue Date: Deadline for Questions about RFP: Proposal Due Date: Review of Proposals: Oral Interviews (conducted at City's discretion) Projected Award Date: February 22, 2021 March 3, 2021 March 15, 2021, by 10:00 AM on or about March 16 — 31, 2021 on or about March 22, 2021 on or about May 4, 2021 "I) CITY OF SANTA ANA Table of Contents I. BACKGROUND..............................................................................................................................3 II. PROJECT PURPOSE.................................................................................................................... 4 III. SCOPE OF SERVICES................................................................................................................. 4 IV. TIME REQUIREMENTS................................................................................................................. 6 V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR................................................................... 7 VI. MINIMUM QUALIFICATIONS........................................................................................................ 7 VII. TERM OF AGREEMENT............................................................................................................... 8 VIII. RFP SCHEDULE OF EVENTS...................................................................................................... 8 IX. RESPONSE TO RFP.................................................................................................................... 8 X. SELECTION PROCEDURES & CRITERIA.................................................................................. 13 XI. WITHDRAWALS..........................................................................................................................14 XII. PROTESTS................................................................................................................................. 14 XIII. GENERAL TERMS AND CONDITIONS...................................................................................... 15 XIV. AWARD OF AGREEMENT......................................................................................................... 19 XV. IMPLEMENTATION.................................................................................................................... 19 EXHIBITS A SAMPLE AGREEMENT (FOR REFERENCE ONLY) B SCHEDULE OF PROFESSIONAL FEES AND EXPENSES (REQUIRED FORM TO BE SUBMITTED WITH PROPOSAL) ATTACHMENTS (REQUIRED FORMS TO BE SUBMITTED WITH PROPOSAL) A REFERENCES B PROPOSER'S STATEMENT C NON -COLLUSION AFFIDAVIT D NON -LOBBYING CERTIFICATION E NON-DISCRIMINATION CERTIFICATION RFP No. 21-024 Professional Auditing Services Page 2 of 34 (9) CITY OF SANTA ANA I. BACKGROUND The City of Santa Ana is a Charter City in the State of California located in northern Orange County. The City was incorporated in 1886 and operates under a Council -Manager form of government. The City currently occupies a land area of 27.2 square miles and serves a population of approximately 335,000. The City is bordered by Garden Grove, Tustin, Orange, Costa Mesa, Fountain Valley, and Westminster. The City's fiscal year begins on July 1 and ends on June 30. The City of Santa Ana is a full service City of approximately 1,050 full-time and 300 part-time employees with twelve (12) agencies (departments). City services include police, water, sewer, sanitation, road maintenance, recreation, library, planning and building, and engineering services. The City contracted with the Orange County Fire Authority to outsource its fire services in 2012. The City Council is composed of an elected Mayor and six (6) Council Members. A. Fund Structure The following funds and account groups were presented in the City's fiscal year 2019-20 Comprehensive Annual Financial Report: Fund Types/Account Group Number of Individual Funds Number of Funds on CAFR General Fund 14 1 Special Revenue Funds 38 7 Capital Projects Funds 45 7 Debt Service Funds 2 1 Enterprise Funds 9 7 Internal Service Funds 14 9 Private -Purpose Trust Funds 7 1 Agency Funds 20 6 B. Finance Department Operations The Finance Department is headed by the Finance Director and consists of approximately 55 full-time and 22 part-time employees. The department is responsible for Treasury & Customer Service, Purchasing, Budgeting, Payroll, and Accounting. The accounting functions are computerized using Lawson Infor software. The applications operating on this system include but are not limited to; general ledger, accounts receivable, accounts payable, project accounting, grant management, purchasing, and asset management. C. Budgetary Basis of Accounting The City's budget is adopted annually by the City Council and is prepared for each fund in accordance with its basis of accounting (generally modified accrual). The City Manager is responsible for preparation and implementation of the annual budget. While all unencumbered appropriations are lapsed at year-end, valid outstanding encumbrances (those for which performance under executory contract is expected in the next year) are re - appropriated and become part of the subsequent year's budget. The City Council and the City Manager have the authority to amend the budget during the year. The City's fiscal year RFP No. 21-024 Professional Auditing Services Page 3 of 34 (9) CITY OF SANTA ANA 2020-21 total budget is approximately $772 million with the General Fund budget totaling approximately $326 million. The City maintains budgetary controls to ensure compliance with legal provisions embodied in the appropriated budget approved by the City Council. The level of budgetary control exists at the department level. D. Component Units The City identified the Successor Agency to the Community Redevelopment Agency as a Fiduciary Component Unit and the Housing Authority of the City of Santa Ana and the Santa Ana Financing Authority as Blended Component Units. E. Federal, State and Local Assistance The City receives financial assistance in the form of state and federal programs which vary from year to year. Accordingly, compliance with the Single Audit Act of 1996 and implementing regulations issued by the United States Office of Management and Budget (OMB) Circular A-133, and the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200) will be required. F. The City's Comprehensive Annual Financial Reports (CAFR) and the Single Audit Reports for the last ten years are available on the City's website at: https://www.santa-ana.org/finance/comprehensive-annual-financial-reports-cafr-and-other-financial- reports The audits of the City for the past five (5) fiscal years were performed by Clifton LarsonAllen LLP (formerly White Nelson Diehl Evans LLP). It is anticipated that their work papers will be available for review. II. PROJECT PURPOSE The City of Santa Ana (City) is requesting proposals from qualified Certified Public Accountant firms to perform its Annual Independent Audit for the two fiscal years ending June 30, 2021 through June 30, 2022, with the option to renew the contract for one additional two-year term for a total of four years. The audits are to be performed in accordance with the provisions contained in this Request for Proposals (RFP). III. SCOPE OF SERVICES A. Auditing Standards to be followed The audits shall be performed in accordance with: Auditing Standards generally accepted in the United States of America as set forth by the American Institute of Certified Public Accountants; The standards set forth for financial audits in the General Accounting Office's (GAO) Government Audit Standards issued by the Comptroller General of the United States; RFP No. 21-024 Professional Auditing Services Page 4 of 34 "I) CITY OF SANTA ANA The provisions of the Federal Single Audit Act as amended; Title 2 US Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance); and Other or new pronouncements or regulations in place now or in the future B. Reports to be issued • Comprehensive Annual Financial Report ("CAFR") — all funds including Fiduciary Funds, Successor Agency and Housing Authority Financial Report • Single Audit of Federal Grants and Other Financial Information: During the fiscal year 2020-21, the City received and expended more than $32 million of the Coronavirus Aid, Relief, and Economic Security Act (CARES) Funds. • Air Quality Improvement Fund (AQMD) Audit Report • Report on the City's GANN Limit computation • City's Investment Policy Compliance Review • U.S. Deparatment of Housing of Urban Development (HUD) Real Estate Assessment Center (REAC) submission attestation and review of HUD Financial Data Schedule (FDS) for the Housing Authority • Annual State Controller's Report • Measure X (Sales Tax) Compliance Report • Agreed -Upon -Procedures Report (up to two annually). The scope of review will include but not limited to the following: The City's internal control processes, contractual agreements, certain provisions of the municipal code. C. The City will prepare the CAFR and submit it to the Government Finance Officers Association (GFOA) for review in their Certificate of Achievement for Excellence in Financial Reporting program. The auditor shall review the CAFR and provide guidance to ensure full compliance with Generally Accepted Accounting Principles established by Government Accounting Standard Board (GASB) and the GFOA award program. The audit timeline must take into consideration the GFOA submittal deadline. D. The auditor shall issue a management letter containing comments and recommendations regarding the auditor's review and evaluation of the systems of internal control and accounting procedures as well as communications required by the Statements on Auditing Standards (SAS) 114 and 115. E. It is expected that the auditor will be available throughout the year for general consultation regarding matters of accounting at no additional cost to the City. The auditor may be asked to provide guidance on implementation of new GASB and SAS requirements and provide expertise and recommendations regarding specific of Federal and State regulations as to how they may impact local government accounting. F. If requested, the auditor may be required to meet with staff and Council Members to review the Management Letter and Audit. Attendance at Council meetings may also be requested. RFP No. 21-024 Professional Auditing Services Page 5 of 34 "I) CITY OF SANTA ANA G. The auditors shall be required to make an immediate, written report of irregularities and illegal acts or indications of illegal acts of which they become aware to the following parties: City Manager and the Executive Director of Finance and Management Services. H. If requested by the member of the bond financing team, the auditor may be asked to issue a "consent and citation of expertise" and any necessary "comfort letters" in relationship to City financial statements and auditors' report, which are included in the Official Statement prepared in connection with sale of debt securities at no additional cost to the City. Working Paper Retention and Access to Working Papers Working papers are to be retained for a minimum of five (5) years following completion of the audit and are to be made available (upon reasonable notice) to City staff as well as any third parties authorized by the City. The auditor will be required to make working papers available to the City or government agencies included in the audit of federal grants. In addition, the firm shall respond to reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing audit significance. Subcontracting Should any firm submitting a proposal consider subcontracting portions of the engagement, that fact must be clearly identified in the proposal along with the name of the proposed subcontractor. Following the award of the audit contract, no additional subcontracting will be allowed without prior written consent by the City's Executive Director of Finance and Management Services. IV. TIME REQUIREMENTS A. CAFR and Related Resorts It is anticipated that the audit work will be performed in two phases, Interim and Final Fieldwork: 1. Interim Fieldwork Interim fieldwork shall take place in late May or early June and would consist of planning and interim audit procedures (such as gaining an understanding of relevant systems, procedures and internal controls, selected compliance and transaction testing, etc.). 2. Final Fieldwork Final fieldwork would involve completing the examination of the General Purpose Financial Statements, preparing opinion letters and other relevant financial reports. The final fieldwork is to begin no earlier than October 1, and shall be completed no later than November 15. This schedule may be altered only by mutual agreement between the City and the auditor. Any proposed audit adjustments must be identified no later than the conclusion of audit field work. 3. Draft Reports • The CAFR will be prepared by City staff. The Auditor will review the draft CAFR prepared by the City and provide recommendations. The complete final draft of the City and its component units' financial statements, including footnotes and supplementary schedules shall be completed by third week of November. A draft of the management letter is due no later than November 30. RFP No. 21-024 Professional Auditing Services Page 6 of 34 "I) CITY OF SANTA ANA • Drafts of the AQMD Audit Report, GANN Limit Reports and review of the City's Investment Policy are due no later than November 30. • Drafts of the Measure X Compliance Report and other Agreed -Upon Procedures reports are due no later than November 30. • First draft of the Annual State Controller's Report is due end of first week in January. • The City will review and provide comments or responses to the auditors within 10 calendar days of receipt of each of the draft reports. B. Sinale Audit and Related Reports Final Fieldwork Final fieldwork would involve completing the examination of the Schedule of Expenditures of Federal Awards, major federal grant programs, preparing opinion letters and other relevant financial reports. The final fieldwork is to begin no earlier than October 1 and shall be completed by January 31. This schedule may be altered only by mutual agreement between the City and the auditor. 2. Draft Reports Draft of the Single Audit Report and HUD REAC submission attestation and review of HUD Financial Data Schedule (FDS) for the Housing Authority are due no later than 60 days from the date of the completion of the CAFR. V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR A. Finance Department and Clerical Assistance City staff will be available to assist in the audit. City staff will prepare any necessary schedules, provide documents (invoices, checks, council meeting minutes, etc.) and prepare all confirmations. In addition, we will be available to respond to any questions which may arise during the audit. B. The City will provide the auditors with suitable workspace, telephone, access to FAX machine and photocopier. VI. MINIMUM QUALIFICATIONS Firms submitting bids shall meet the following minimum qualifications: A. Firm shall have successfully completed audits of a minimum often (10) government agencies including cities, in the preceding twelve months. B. Staff assigned to the engagement shall have a minimum of one-year of experience in the audit of municipalities. Managers or supervisors assigned to the engagement shall have a minimum of five years of experience in the audit of municipalities. Partners assigned to the engagement shall have a minimum of five years of experience in the audit of municipalities. C. Firm shall have prepared and issued a minimum of five Single Audit reports in the preceding twelve months. RFP No. 21-024 Professional Auditing Services Page 7 of 34 (9) CITY OF SANTA ANA VII. TERM OF AGREEMENT The term of the agreement is two (2) years beginning with the fiscal year ending June 30, 2021. The City may, at its discretion, extend the agreement with the same or more limited scope of required services for up to one (1) additional two-year terms, contingent upon direction of the City Manager. VIII. RFP SCHEDULE OF EVENTS Schedule below is tentative and subject to change at discretion of City, with appropriate notice to prospective Proposers. Issue Date: Deadline for Questions about RFP Proposal Due Date: Review of Proposals: Oral Interviews (conducted at City's discretion) Projected Award Date: IX. RESPONSE TO RFP A. SUBMITTAL INSTRUCTIONS Monday, February 22, 2021 Wednesday, March 3, 2021 Monday, March 15, 2021, by 10:00 AM on or about March 16 - 31, 2021 on or about March 22, 2021 on or about May 4, 2021 It is the responsibility of the Proposer to ensure that any proposals submitted have been uploaded to PlanetBids prior to the proposal due date and time. Proposals, including all required sections and forms, shall be submitted electronically via the City's Bid Management System, PlanetBids. No other form of submittal will be accepted. It is the responsibility of the Proposer to ensure that any proposals submitted has been uploaded to PlanetBids prior to this proposal due date and time. PlanetBids will not accept late bids and no exceptions shall be made. Proposers will receive an a -bid confirmation number with a time stamp from PlanetBids indicating that their proposal was submitted successfully. The City will only receive and consider those proposals that were transmitted successfully. Submit proposal online at: http://www.planetbids.com/portal/portal.cfm?CompanvlD=20137. Proposer shall be solely responsible for informing itself with respect to the proper utilization of the bid management system, for ensuring the capability of their computer system to upload the required documents, and for the stability of their internet service. Failure of the Proposer to successfully submit an electronic proposal shall be at the Proposer's sole risk and no relief will be given for late and/or improperly submitted proposals. Proposers experiencing any technical difficulties with the bid submission process may contact PlanetBids at (818) 992-1771. Questions of an operational nature may be directed to the City's assigned Project Manager. Neither the City, nor PlanetBids, makes any guarantee as to the timely availability of assistance, or assurance that any given problem will be resolved by the bid submission deadline. Proposals shall NOT be mailed or sent via telegraphic, electronic or facsimile means. All notifications, updates and addenda will be posted online on PlanetBids at https://www.planetbids.com/portal/portal.cfm?CompanvlD=20137. Proposers shall be RFP No. 21-024 Professional Auditing Services Page 8 of 34 (9) CITY OF SANTA ANA responsible for monitoring the site to obtain information regarding this solicitation. Failure to respond to required updates may result in a determination of a nonresponsive proposal. B. COMMUNICATION / CONTACT WITH CITY STAFF Unless otherwise authorized herein, Proposers who are considering submitting a proposal in response to this RFP, or who submit a proposal in response to this RFP, are only to communicate with the assigned Project Coordinator(s), and no other City staff about this RFP from the date this RFP is issued until a contract is awarded. The City will provide all official communication concerning this RFP in writing via the City's Bid Management System, PlanetBids. General questions regarding this RFP may be directed to the City's assigned Buyer utilizing the City's PlanetBids system. The City will not be responsible for or bound by any oral communication or any other information or contact that occurs outside the official communication process specified herein, unless confirmed in writing by the designated Project Manager. C. REQUEST FOR INFORMATION OR CLARIFICATION / QUESTIONS Questions regarding this RFP shall be submitted via PlanetBids by 4:00 PM on March 3, 2021. Responses to all questions will be posted on PlanetBids no later than the date and time shown at the schedule of key RFP dates above. All prospective Proposers are advised to visit PlanetBids on a regular basis as the responses may be posted earlier than the date above. No verbal requests or responses will be accepted. Significant interpretations or clarifications will be addressed via addenda to this RFP. D. ADDENDA Any changes in RFP from the date of release to date of submittal will result in an addendum or amendment. Notification of such addendum or amendment shall be posted on City's PlanetBids system, https://www.planetbids.com/portal/portal.cfm?CompanVID=20137. Proposers shall be responsible for monitoring the site to obtain information regarding this solicitation. E. UNDERSTANDING PROPOSAL It is the responsibility of each Proposer to inquire about any criteria, condition, term, provision, or requirement of the RFP that the Proposer does not understand. Responses to inquiries, if they significantly change or clarify the RFP requirements or any aspect of the procurement process, will be forwarded by addenda to all Proposers. The City will not be bound by any oral responses to inquiries. By submitting proposals, Proposers assert that they have fully read the RFP and any addenda issued by the City, the proposed Contract and any other Contract Documents, and affirm that the terms and conditions stated therein are fully understood and are acceptable to the Proposer. Each Proposer accepts the terms and conditions of the Contract Documents and indicates their ability and willingness to perform the requested services under such terms and conditions. Any exceptions to the terms and conditions set forth in the Contract Document should be clearly noted in each Proposer's proposal. RFP No. 21-024 Professional Auditing Services Page 9 of 34 "I) CITY OF SANTA ANA Please direct all questions regarding the procurement process to: City of Santa Ana Finance & Management Services — Purchasing Division Karla Lopez, Buyer Email: klopez10 @..santa-ana.org Phone: (714) 647-5466 F. PROPOSAL CONTENTS Proposals are to be prepared in such a way as to provide a straightforward, concise delineation of capabilities to satisfy the requirements of this RFP. Colored displays, promotional materials, etc., are not necessary or desired. Emphasis should be concentrated on conformance to RFP instructions, responsiveness to the RFP requirements, and on completeness and clarity of content. Dividers and clear organization of content and material are encouraged. Cover Letter Proposals shall include a letter signed by a principal or authorized representative who can make legally binding commitments for the entity. Include type of business entity. Cover Letter shall not exceed one page. Cover letter must be addressed to the following: Sergio Vidal, Assistant Director of Finance & Management Services Agency City of Santa Ana — Finance and Management Services Agency 20 Civic Center Plaza Santa Ana, CA 92701 2. Agreement Statement Proposal shall include a statement outlining your concurrence or concerns with any and all provisions as contained in the Standard Agreement attached as Exhibit A of this RFP. 3. Firm and Team Experience Proposal shall include a profile of the firm's experience including the following: a. A general description of the firm, including size, number of employees, and any past or contemplated changes in ownership. b. A description of the size of the firm's governmental staff and the firm's experience with governmental agencies of a similar size, nature, and scope. Emphasis should be placed on assignments undertaken within the past three (3) years and on engagements undertaken by the personnel proposed to be assigned to this agreement. c. Name and contact information of the Project Manager to be assigned to the engagement. d. Resumes for the professional staff assigned to the engagement. A discussion of educational background and relevant experience of the Partner, Supervisor(s) and Staff which will be assigned to this engagement as well as their assigned responsibilities under the proposal shall be included. RFP No. 21-024 Professional Auditing Services Page 10 of 34 (9) CITY OF SANTA ANA e. A description of the Proposer's experience in providing similar services to those requested in this RFP, specifically the firm's most significant audit engagements in the last three (3) years including individuals whom we may contact for reference. This must include a discussion of the Proposer's qualifications and relevant experience including recent experience in compliance auditing under the Single Audit Act. f. A list of the local office's most significant engagements in the last five (5) years, indicating whether they are public or private sector, and including scope of work, date, supervising actuaries, and name and telephone number of the client contact. g. Data requirements from the City. h. A statement that the firm is independent of the City and that it is unaware of potential conflicts of interest. i. An affirmative statement verifying the firm and all assigned key professional staff are properly licensed to practice in California. j. A copy of a report on its most recent external quality control review (peer review), with a statement whether that quality control review included a review of specific government engagements (required by Government Audit Standards). k. Information on the results of any Federal or State desk reviews or field reviews of its audits during the past three (3) years. In addition, the Proposer shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with State regulatory bodies or professional organizations. I. A description of limits on liability, if any. m. A warrant that the firm maintains a prudent amount of errors and omissions insurance that covers negligent acts and is applicable to the work requested in this RFP. n. An acknowledgement by signature that the signer is authorized to contractually bind the firm. o. Any pending legal actions and litigations against the firm. Legal actions against the firm in the previous five years shall be included. 4. Work Plan a. A description of the proposed work plan including nature of interim and final fieldwork testing procedures, explanation of the audit methodology to be followed to perform the services required of this RFP. This may include, but not be limited to discussion of: • Selection of sample size; • Type and extent of analytical procedures to be used; • Approach to gain understanding of the City's internal control structure; • Approach to determining laws/regulations subject to audit test work; • Approach to identifying any anticipated audit problems and the firm's approach to resolving these problems; • Approach to communicating audit findings to City staff; and • Ability to perform work remotely under a special circumstance. RFP No. 21-024 Professional Auditing Services Page 11 of 34 "I) CITY OF SANTA ANA The extent of support which will be required from City staff (i.e. pulling invoices, checks, schedule preparation, etc.) Due to the City's limited staff, the City will not be able to provide copying services. c. A preliminary schedule including tentative dates for completion of interim and final field work, preparation of financial statements, footnotes, opinion letters and the management letter. d. A proposed budget including estimated hours for each member of the engagement team and hourly billing rates for each of the contract years. 5. Cost Proposal All proposers are required to submit Exhibit B, which contains: a. A cost breakdown by contract year (including renewal option term if exercised); including out-of-pocket expenses and a total not -to -exceed cost for all services outlined in Section 3B of this RFP. A listing of billing rates, by staffing level, which would apply to any supplemental services which may be requested by the City during the term of this contract. Pricing instructions should be clearly defined to ensure fees proposed could be compared and evaluated. Proposals shall be valid for a minimum of ninety (90) days following Proposal deadline. The cost for developing the Proposal is the sole responsibility of the Proposer. All Proposals submitted become the property of the City. The proposed fees and rates for this contract will be fixed for the duration of the agreement, including allowable renewal options exercised at the discretion of the City. 6. Certifications (ATTACHMENTS AND EXHIBIT B) The following forms, included in this RFP, shall be signed and included as part of the proposal submittal package: • Attachment A: References • Attachment B: Proposer's Statement • Attachment C: Non -Collusion Affidavit • Attachment D: Non -Lobbying Certification • Attachment E: Non -Discrimination Certification • Exhibit B: Schedule of Professional Fees and Expenses PLEASE NOTE: City will not be waiving notarization requirement when applicable on any of the required attachents. 7. References Contractor shall provide three (3) references from public agency customers for which actuarial work similar to services specified in this RFP have been performed, including contact names and telephone numbers, and types of services your firm has provided. Use Attachment A — References. The respondent grants permission for the City to contact any individuals listed as references. RFP No. 21-024 Professional Auditing Services Page 12 of 34 "I) CITY OF SANTA ANA City may disqualify a Proposer if.- • References fail to substantiate Proposer's description of services and deliverables provided; or • References fail to support that Proposer has a continuing pattern of providing capable, productive, and skilled personnel, or • City is unable to reach the point of contact with reasonable effort. It is the Proposer's responsibility to inform the point of contact(s) of normal City working hours. 8. Evidence of Financial Capacity Proposer may be requested to submit its most recent audited financial statement, evidencing Proposer's financial capacity to fully perform the required services, including provision of equipment and personnel expenses over a ninety (90) day period. If said financial statement does not reflect full ninety (90) day operational capacity, Proposer may include a letter of credit as evidence of supplemental capacity. 9. Insurance The selected Proposer shall provide the required evidence of insurance coverage as set forth in the standard agreement within ten (10) business days after receipt of Notice of Intent to Award. Contractor must maintain, for the duration of its contract, insurance coverages as required by the City. Subcontractors must comply with the City's insurance requirements as stated herein. Primary Contractor shall not allow any Subcontractor to commence work until all insurance required of Subcontractor is obtained. Additionally, Contractor shall provide the following insurance coverage: A warrant that the firm maintains a prudent amount of errors and omissions insurance that covers negligent acts and is applicable to the work requested in this RFP. Work on the contract shall not begin until after the awarded Contractor has submitted acceptable evidence of the required insurance coverages. X. SELECTION PROCEDURES & CRITERIA A. The City will establish a proposal review committee, consisting of City staff designated by the Executive Director of Finance and Management Services. The review committee will evaluate proposals based on the response to the RFP, which includes adherence to outlined directions and format, and the City evaluation criteria set forth above. B. Proposers will be ranked by Finance staff based on the following criteria: RFP No. 21-024 Professional Auditing Services Page 13 of 34 (9) CITY OF SANTA ANA CATEGORY POINTS Experience of Firm and Personnel Technical qualifications and experience of key members of the engagement team and 25 the firm. Relevant Project Experience Experience with similarly sized governmental agencies in providing the types of 25 services outlined in this RFP Financial stability and resources to handle all aspects of the engagement as specified in this RFP and provide ongoing support and technical assistance throughout the term of 20 the agreement. Responsiveness to RFP Compliance with the requirements of this RFP. Thoroughness of auditors' proposed 15 scope of work, clearly defined schedule of work to be performed, and ability to meet required completion dates for key parts of the audit. Reasonableness of Cost - Cost of delivering specified services is consistent with industry standards. - Expected overhead costs for the awarded entity as they apply to management of the contract 15 NOTE: Contractor shall pay all salaries and wages, employer's Social Security taxes, unemployment insurance, and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. TOTAL POSSIBLE SCORE 100 C. A final score will be calculated for each submitted proposal and used to rank Proposers. The City is under no obligation to accept any proposal and reserves the right to negotiate with respondents as to fees and terms. The City may reject proposals at its sole discretion. If a proposal fails to satisfy any requirements outlined in this RFP, it may be considered non- responsive and the proposal may be rejected. D. The City shall not be obligated to accept the lowest priced proposal, but will make an award in the best interests of the City of Santa Ana after all factors have been evaluated. E. Oral interviews will be conducted at the City's discretion tentatively on March 22, 2021. F. Finance staff will recommend the top ranked consulting firm to the City Manager or City Council for award of contract. XI. WITHDRAWALS Proposers are responsible for verifying all prices and information before submitting a proposal. Prior to the proposal due date, the Proposer or Proposer's representative may withdraw the proposal by providing written notice of the proposal withdrawal to the City Contact/Project Manager. Verbal or telephonic withdrawals are not permissible. XII. PROTESTS RFP No. 21-024 Professional Auditing Services Page 14 of 34 "I) CITY OF SANTA ANA Proposers may file a "protest" to an RFP with the City's assigned Project Manager. In order for a Proposer's protest to be considered valid, the protest must: Be filed in writing within five (5) business days of either the RFP issued date or before 5:00 p.m. of the 5th business day following the posting of RFP Results/Notice of Intent to Award Contract on the City's website; 2. Clearly identify the specific irregularity or accusation; 3. Clearly identify the specific City staff determination or recommendation being protested; 4. Specify, in detail, the grounds of the protest and the facts supporting the protest; and 5. Include all relevant, supporting documentation with the protest at time of filing. If the protest does not comply with each of these requirements, it will be rejected as invalid. If the protest is valid, the City's Project Manager, or other designated City staff member, shall review the basis of the protest and all relevant information. The Project Manager will provide a written decision to the protestor within ten (10) business days from receipt of protest. The decision from the Project Manager, or her/her designee, is final and no further appeals will be considered. XIII. GENERAL TERMS AND CONDITIONS By submitting a Proposal, the Proposer acknowledges that it has thoroughly examined and accepts the Terms and Conditions of this RFP as described below: A. AMERICANS WITH DISABILITIES ACT The awarded Contractor hereby certifies that it will comply, as applicable, with the Americans with Disabilities Act of 1990 ("ADA"), 42 USC §§ 12101 et seq., and its implementing regulations, including Subtitle A, Title II of the ADA. Contractor will not discriminate against persons with disabilities nor against persons due to their relationship to or association with a person with a disability. Any contract entered into by the awarded Contractor (or any subcontract thereof), relating to this RFP, shall be subject to the provisions of this paragraph. B. CITY RIGHT TO REJECT The City reserves the right to reject any or all proposals submitted and no representation is made hereby that any agreement will be awarded pursuant to this RFP or otherwise. The City reserves the right to accept or reject the combined or separate components of this proposal in part or in its entirety or to waive any minor inconsistency, informality or technical defect in the proposal. C. CONFLICT OF INTEREST Contractor shall exercise reasonable care and diligence to prevent any actions or conditions that could result in a conflict with the best interests of the City. This obligation shall apply to the Contractor; the Contractor's employees, agents, and Subcontractors associated with accomplishing work and services hereunder. The Contractor's efforts shall include, but not be limited to, establishing precautions to prevent its employees, agents, and Subcontractors from providing or offering gifts, entertainment, payments, loans or other considerations which could be deemed to influence or appear to influence City staff or elected officers from acting in the best interests of the City. RFP No. 21-024 Professional Auditing Services Page 15 of 34 "I) CITY OF SANTA ANA Each Proposer must disclose any existing or potential conflict of interest relative to the performance of the contractual services resulting from this RFP. Any such relationship that might be perceived or represented as a conflict should be disclosed. The City reserves the right to disqualify any Proposer on the grounds of actual or apparent conflict of interest. No person, firm, or subsidiary thereof who has been awarded this Contract may be awarded a Contract for the provision of services, the delivery of supplies, or the provision of any other related action which is required, suggested, or otherwise deemed appropriate as an end product of this Contract. Therefore, Contractor is precluded from contracting for any work recommended as a result of this Contract. D. CONTRACTOR'S EXPENSE Pre -Contractual Expenses: The City is not liable for any costs incurred by Proposers prior to entering into a formal contract. Costs of developing a response to this RFP, are entirely the responsibility of the Proposer, and shall not be reimbursed in any manner by the City. Pre - contractual expenses are not to be included in the cost proposal. Pre -contractual expenses include, but are not limited to, preparation of the proposal, submission of the proposal and additional information, attendance at pre -proposal conference, negotiating any matter related to this RFP with City, and/or any other expenses incurred by the Proposer prior to the date of award and execution, if any, of the contract. Other Expenses: The Contractor will be responsible for all costs related to photo copying, telephone communications, fax communications, and parking while on City sites during the performance of work and services under this Contract. E. CONTRACTOR'S PROJECT MANAGER/KEY PERSONNEL Except as formally approved by the City, the key personnel identified in Contractor's proposal shall be the individuals who will actually complete the work. Changes in staffing must be reported in writing and approved by the City. The City shall have the right to require the removal and replacement of the Contractor's Project Manager and key personnel under the awarded contract. The City shall notify the Contractor in writing of such action. The City is not required to provide any reason, rationale, or additional factual information if it elects to request any specific key personnel be removed from performing services under the awarded contract. The City shall review and approve the appointment of the replacement for the Contractor's personnel. Said approval shall not be unreasonably withheld. Standards of Conduct: Contractor's personnel shall be courteous and maintain good working relationships with all stakeholders, state or outside agencies, other team members and staff within the City. Criminal Background Certification: Contractor certifies that all employees working on this contract have had a criminal background check at Contractor's cost and that said employees are clear of any sexual and drug -related convictions. Contractor further certifies that all employees hired by Contractor or Subcontractor shall be free from any felony convictions. City reserves the right to require Contractor to pay fingerprinting fees for personnel assigned to work in sensitive areas. F. COST PROPOSAL The price and amount of the Cost Proposal/Fee Schedule must have been arrived at independently and without consultation, communication, agreement or disclosure with or to any other Subcontractor, Proposer or prospective Proposer. RFP No. 21-024 Professional Auditing Services Page 16 of 34 (9) CITY OF SANTA ANA Prices offered by Proposers in their proposals are an irrevocable offer for the term of the contract and any contract extensions. The awarded Contractor agrees to provide the purchased services at the costs, rates, and fees as set forth in their Fee Schedule in response to this RFP. No other costs, rates or fees shall be payable to the awarded Subcontractor for implementation of their proposal. G. DATA RETENTION Contractor shall be responsible for retaining data, records, and documentation for the preparation of required items. These materials shall be made available to and as requested by City. All materials, documents, data or information obtained from the City Data files or any City medium furnished to Contractor in the performance of an awarded contract will at all times remain the property of the City. Such data or information may not be used or copied for direct or indirect use by Contractor after completion or termination of this Contract without the express written consent of the City. All materials, documents, data or information, including copies, must be returned to the City at the end of the contract. All data, documents and other products used, developed, or produced during response preparation of the RFP will become property of the City. All responses to the RFP shall become property of the City. Proposer information identified as proprietary shall be maintained confidential, to the extent allowed under the California Public Records Act. H. DRUG -FREE WORKPLACE The awarded Contractor certifies compliance with Government Code Section 8355 in matters relating to providing a drug -free workplace. Failure to comply with these requirements may result in suspension of payments under the Contract or termination of the contract or both, and the Contractor may be ineligible for award of any future City contracts. EXAMINATION Proposer represents that it has thoroughly examined and become familiar with the services and responsibilities required this RFP and that it is capable of effectively and efficiently performing quality work to achieve the City's objectives. Any attachments referenced herein or any interpretations, clarifications or amendments subsequently posted in relation to this RFP are fully incorporated. Any irregularities or lack of clarity in the RFP should be brought to the designated City Contact/Project Manager's attention as soon as possible so that corrective addenda may be furnished to prospective Proposers. Proposals which appear unrealistic in the terms of technical commitments, lack of technical competence, or are indicative of failure to comprehend the complexity and risk of this contract, may be rejected. EXECUTION OF AGREEMENT Upon successful negotiations, the City and the selected Proposer will enter into an Agreement similar to that as shown in EXHIBIT 3 STANDARD AGREEMENT in the Appendix of this RFP. If a Proposer is unwilling or unable to execute an Agreement within thirty (30) days after being notified of selection under this RFP, the City reserves the right to select the next most qualified Proposer or call for new Proposals, whichever the City deems most appropriate. RFP No. 21-024 Professional Auditing Services Page 17 of 34 (9) CITY OF SANTA ANA K. JOINT OFFERS/SUBCONSULTANTS Where two or more Proposers desire to submit a single Proposal in response to this RFP, they should do so on a prime sub -consultant basis. The City intends to contract with a single firm and not with multiple firms doing business as a joint venture. Should the use of sub - consultants be offered, the Proposer shall provide the same assurances of competence for the sub -consultant plus the demonstrated ability to manage and supervise the subcontracted work. Sub -consultants shall not be allowed to further subcontract with others for work under the Agreement. The provisions of the Agreement shall apply to all sub -consultants in the same manner as the Proposer. The City reserves the right to reject, replace and approve any and all Subcontractors. All Subcontractor(s) shall be identified in the response to the RFP and the City reserves the right to reject any proposed Subcontractor(s). Subcontractors shall be the responsibility of the prime Contractor and the City shall assume no liability of such Subcontractors. L. INDEPENDENT CONTRACTOR Contractor is considered an independent Contractor and neither Contractor, its employees, nor anyone working under Contractor will be considered an agent or an employee of City. Neither Contractor, its employees, nor anyone working under Contractor, will qualify for workers' compensation or other fringe benefits of any kind through City. M. LITIGATION STATUS Each Proposer must include in its proposal a complete disclosure of any alleged significant prior or ongoing contract failures, any civil or criminal litigation or investigation pending which involves the Proposer or in which the Proposer has been judged guilty or liable. Failure to comply with the terms of this provision will disqualify any proposal. The City reserves the right to reject any proposal based upon the Proposer's prior history with the City or with any other party, which documents, without limitation, unsatisfactory performance, adversarial or contentious demeanor, significant failure(s) to meet contract milestones or other contractual failures. N. NEGOTIATIONS The City reserves the right to negotiate final contract terms with any Proposer selected. The contract between the parties will consist of the RFP together with any modifications thereto, and the awarded Contractor's proposal, together with any modifications and clarifications thereto that are submitted at the request of the City during the evaluation and negotiation process. In the event of any conflict or contradiction between or among these documents, the documents shall control in the following order of precedence: the final executed contract, the RFP, any modifications and clarifications to the awarded Contractor's proposal, and the awarded Contractor's proposal. Specific exceptions to this general rule may be noted in the final executed contract. Negotiations shall be confidential and not subject to disclosure to competing Contractors unless and until an agreement is reached. If contract negotiations cannot be concluded successfully, the City reserves the right to negotiate a contract with another Contractor or withdraw the RFP. O. PROJECT MANAGER The selected Proposer will assume responsibility for all services in its proposal. The selected Proposer shall identify a sole point of contact, Project Manager, with the greatest knowledge RFP No. 21-024 Professional Auditing Services Page 18 of 34 "I) CITY OF SANTA ANA in regard to the required service operations and contractual matters, including payment of any and all charges resulting from the Agreement. P. PROPOSAL VALIDITY Services, pricing, and warranties indicated in a Proposer's Proposal must be valid for a period of 90 days at minimum after the submission of the Proposal. Q. PUBLIC AGENCIES Other public agencies, as defined by California Government Code Section 6500, may choose to use the terms of this Contract, subject to Contractor's acceptance. The City is not liable or responsible for any obligations related to a subsequent contract between Contractor and another public agency. R. PUBLIC RECORDS Proposals will become public record after the award of a contract unless the proposal or specific parts of the proposal can be shown to be exempt by law. Each Proposer may clearly label all or part of a proposal as "CONFIDENTIAL" provided that the Proposer thereby agrees to indemnify and defend the City for honoring such a designation. The failure to so label any information that is released by the City shall constitute a complete waiver of any and all claims for damages caused by any release of the information. Proposer information identified as proprietary shall be maintained confidential, to the extent allowed under the California Public Records Act. S. SUBCONTRACTORS Proposals in response to this RFP must identify any Subcontractors, and outline the contractual relationship between the Awarded Subcontractor and each Subcontractor. An official of each proposed Subcontractor must sign, and include as part of the proposal submitted by the Prime Contractor, a statement to the effect that the Subcontractor has read and will agree to abide by the awarded Contractor's obligations. Any Subcontractor proposed after award of contract must be approved by the City before commencement of work. The City will look solely to the awarded Contractor for the performance of all contractual obligations which may result from an award based on this RFP, and the awarded Contractor shall not be relieved for the non-performance of any or all Subcontractors. XIV. AWARD OF AGREEMENT Selected Contractor(s) will be notified in writing. Any award is contingent upon the successful negotiation of final contract terms. A. EXECUTION OF AGREEMENT A standard agreement is included as Exhibit A — Standard Agreement of this RFP. "Proposer" will hereinafter be referred to as "Consultant" or "Contractor" in standard agreement. The term of the agreement will begin after the agreement is fully executed, and all required bonds, insurance documents and contents of the payment information packet have been received and approved. XV. IMPLEMENTATION A. KICK-OFF MEETING A kick-off meeting will be held after award of contract. Contractor and its team will meet with City of Santa Ana staff to conduct introductions, discuss scope of services, and implementation process. RFP No. 21-024 Professional Auditing Services Page 19 of 34 (9) CITY OF SANTA ANA B. NOTICE TO PROCEED Following the kick-off meeting, a formal Notice to Proceed (NTP) may be issued after the agreement is fully executed, and all insurance documents and contents of the Payment Information Packet have been received and approved. C. TENTATIVE AUDIT CALENDAR FOR THE FIRST YEAR OF AGREEMENT (FY2020-21) Schedule below is tentative and subject to change at discretion of City. May/June 2021 Interim Audit Fieldwork June 30, 2021 Fiscal year-end October— November, 2021 Final Audit Fieldwork Complete Final Drafts of- - CAFR - Management Letter November 30, 2021 - AQMD Report - GANN Report - Investment Policy Review Report - Measure X Compliance Report - Other AUP Reports First week of December 2021 CAFR Finalized & Audit Opinion issued First Week of January 2022 Draft State Controller's Report January 2022 Single Audit Final Fieldwork -Single Audit Report issued February 2022 -Data Collection and related report submitted to the Federal Audit Clearinghouse - HUD REACT Report submitted RFP No. 21-024 Professional Auditing Services Page 20 of 34 (9) CITY OF SANTA ANA EXHIBIT A SAMPLE AGREEMENT THIS AGREEMENT is made and entered into on this day of , 2021 by and between , ("Consultant"), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California ("City"). RECITALS A. The City desires to retain a Consultant having special skill and knowledge in the field of: B. Consultant represents that Consultant is able and willing to provide such services to the City. C. In undertaking the performance of this Agreement, Consultant represents that it is knowledgeable in its field and that any services performed by Consultant under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES Consultant shall perform during the term of this Agreement, the tasks and obligations including all labor, materials, tools, equipment, and incidental customary work required to fully and adequately complete the services described and set forth in Scope of Services - Exhibit A, attached hereto and incorporated by reference. 2. COMPENSATION a. City agrees to pay, and Consultant agrees to accept as total payment for its services for City, the rates and charges identified in Compensation - Exhibit B. The total amount to be expended during the term of this Agreement shall not exceed $xxxxxx. b. Payment by City shall be made within forty-five (45) days following receipt of proper invoice evidencing work performed, subject to City accounting procedures. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by City. 3. TERM This Agreement shall commence on [enter a Start Date or "the date first written above"] for a number (#) year term with the option for the City to grant up to a number (#)-year renewals, exercisable by a writing by the City Manager and the City Attorney, unless terminated earlier in accordance with Section 15, below. RFP No. 21-024 Professional Auditing Services Page 21 of 34 (9) 4. INDEPENDENT CONTRACTOR CITY OF SANTA ANA Consultant shall, during the entire term of this Agreement, be construed to be an independent Consultant and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer - employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Consultant performs the services which are the subject matter of this Agreement; however, the services to be provided by Consultant shall be provided in a manner consistent with all applicable standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 5. OWNERSHIP OF MATERIALS This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ("Documents & Data"). Consultant shall require all subcontractors to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were provided to Consultant by the City. City shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City's sole risk. 6. INSURANCE Prior to undertaking performance of work under this Agreement, Consultant shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: a. Commercial General Liability Insurance. Consultant shall maintain commercial general liability insurance naming the City, its officers, employees, agents, volunteers and representatives as additional insured(s) and shall include, but not be limited to protection against claims arising from bodily and personal injury, including death resulting therefrom and damage to property, resulting from any act or occurrence arising out of Contractor's operations in the performance of this Agreement, including, without limitation, acts involving vehicles. The amounts of insurance shall be not less than the following: single limit coverage applying to bodily and personal injury, including death resulting therefrom, and property damage, in the total amount of $1,000,000 per occurrence, with $2,000,000 in the aggregate. Such insurance shall (a) name the City, its officers, employees, agents, and representatives as additional insured(s); (b) be primary and not contributory with respect to insurance or self-insurance programs maintained by the City; and (c) contain standard separation of insureds provisions. b. Business automobile liability insurance, or equivalent form, with a combined single limit of not less than $1,000,000 per occurrence. Such insurance shall include coverage for owned, hired and non - owned automobiles. C. Worker's Compensation Insurance. In accordance with the provisions of Section 3700 of the Labor Code, Contractor, if Consultant has any employees, is required to be insured against liability for worker's compensation or to undertake self-insurance. Prior to commencing the performance of the work under this Agreement, Consultant agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. d. If Consultant is or employs a licensed professional such as an architect or engineer: Professional liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim with $2,000,000 in the aggregate. RFP No. 21-024 Professional Auditing Services Page 22 of 34 "I) CITY OF SANTA ANA e. The following requirements apply to the insurance to be provided by Consultant pursuant to this section: i. Consultant shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement. ii. Certificates of insurance shall be furnished to the City upon execution of this Agreement and shall be approved by the City. iii. Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the City. iv. Where the amounts or coverage provided by the certificates of insurance provides coverage greater than those listed by this Agreement, the amounts provided by the certificates of insurance shall be incorporated by reference into the Agreement. V. Consultant shall supply City with a fully executed additional insured endorsement. If Consultant fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right, at the City's election, to forthwith terminate this Agreement. Such termination shall not affect Contractor's right to be paid for its time and materials expended prior to notification of termination. Consultant waives the right to receive compensation and agrees to indemnify the City for any work performed prior to approval of insurance by the City. 7. INDEMNIFICATION Consultant agrees to defend, and shall indemnify and hold harmless the City, its officers, agents, employees, contractors, special counsel, and representatives from liability: (1) for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including death, and claims for property damage, which may arise from the negligent operations of the Contractor, its subcontractors, agents, employees, or other persons acting on its behalf which relates to the services described in section 1 of this Agreement; and (2) from any claim that personal injury, damages, just compensation, restitution, judicial or equitable relief is due by reason of the terms of or effects arising from this Agreement. This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered, or alleged to have been suffered, by reason of the events referred to in this Section or by reason of the terms of, or effects, arising from this Agreement. The Consultant further agrees to indemnify, hold harmless, and pay all costs for the defense of the City, including fees and costs for special counsel to be selected by the City, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement. City may make all reasonable decisions with respect to its representation in any legal proceeding. Notwithstanding the foregoing, to the extent Contractor's services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Contractor. 8. INTELLECTUAL PROPERTY INDEMNIFICATION Consultant shall defend and indemnify the City, its officers, agents, representatives, and employees against any and all liability, including costs, for infringement of any United States' letters patent, trademark, or copyright infringement, including costs, contained in the work product or documents provided by Consultant to the City pursuant to this Agreement. RFP No. 21-024 Professional Auditing Services Page 23 of 34 (9) CITY OF SANTA ANA 9. RECORDS Consultant shall keep records and invoices in connection with the work to be performed under this Agreement. Consultant shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any services, expenditures, and disbursements charged to the City for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant under this Agreement. All such records and invoices shall be clearly identifiable. Consultant shall allow a representative of the City to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement during regular business hours. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to this Agreement for a period of three (3) years from the date of final payment to Consultant under this Agreement. 10. CONFIDENTIALITY If Consultant receives from the City information which due to the nature of such information is reasonably understood to be confidential and/or proprietary, Consultant agrees that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential Information" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and/or agent of the other party is covered by this Agreement. The foregoing obligations of non-use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Consultant disclosed in a publicly available source; (c) is in rightful possession of the Consultant without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Consultant without reference to information disclosed by the City. 11. CONFLICT OF INTEREST CLAUSE Consultant covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 12. NON-DISCRIMINATION Consultant shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, gender identity, gender expression, gender, medical conditions, genetic information, or military and veteran status, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, teaching, training, utilization, promotion, termination or other employment related activities or any services provided under this Agreement. Consultant affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 13. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Contractor, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Contractor. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Consultant or the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which is not embodied herein. RFP No. 21-024 Professional Auditing Services Page 24 of 34 (9) 14. ASSIGNMENT CITY OF SANTA ANA Inasmuch as this Agreement is intended to secure the specialized services of Contractor, Consultant may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other Contractors retained by City. 15. TERMINATION This Agreement may be terminated by the City upon thirty (30) days written notice of termination. In such event, Consultant shall be entitled to receive and the City shall pay Consultant compensation for all services performed by Consultant prior to receipt of such notice of termination, subject to the following conditions: a. As a condition of such payment, the Executive Director may require Consultant to deliver to the City all work product(s) completed as of such date, and in such case such work product shall be the property of the City unless prohibited by law, and Consultant consents to the City's use thereof for such purposes as the City deems appropriate. b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement. 16. WAIVER No waiver of breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this Agreement shall be effective unless it is in writing and signed by the party waiving the breach, failure, right or remedy. No waiver of any breach, failure or right, or remedy shall be deemed a waiver of any other breach, failure, right or remedy, whether or not similar, nor shall any waiver constitute a continuing waiver unless the writing so specifies. 17. JURISDICTION -VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 18. PROFESSIONAL LICENSES Consultant shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Consultant shall notify the City immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. RFP No. 21-024 Professional Auditing Services Page 25 of 34 (9) CITY OF SANTA ANA 19. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by fax or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, CA 92702-1988 Fax: 714- 647-6956 With courtesy copies to: Kathryn Downs Executive Director, Finance & Management Services Agency City of Santa Ana 20 Civic Center Plaza (M-xx) P.O. Box 1988 Santa Ana, California 92702 Fax: To Contractor: First & Last Name Title Consultant Firm Name Address City, State, Zip Fax: A party may change its address by giving notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed asset forth above. If sent by fax, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 20. MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature herein below has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify City fully, including reasonable costs and attorney's fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. RFP No. 21-024 Professional Auditing Services Page 26 of 34 (9) CITY OF SANTA ANA b. The Agreement is the final and complete agreement and any prior or contemporaneous agreements for similar services between the parties is superseded by this Agreement. This shall not apply where the Parties are currently engaged and Consultant is providing services not contemplated by this Agreement. C. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: Daisy Gomez Clerk of the Council APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney By: Assistant City Attorney RECOMMENDED FOR APPROVAL: Executive Director [INSERT] Agency CITY OF SANTA ANA Kristine Ridge City Manager CONSULTANT: (title) (name) (title) SAMPLE ONLY RFP No. 21-024 Professional Auditing Services Page 27 of 34 (9) CITY OF SANTA ANA EXHIBIT B SCHEDULE OF PROFESSIONAL FEES AND EXPENSES The compensation for financial auditing and report preparation services to be provided in each fiscal year, in accordance with this agreement, is shown below: Description of Services FY 2020-21 FY 2021-22 FY 2021-23 FY 2021-24 Total Comprehensive Annual Financial Report $ _ Single Audit of Report _ AQMD Audit Report _ Report on the City's GANN Limit computation _ City's Investment Policy Compliance Review _ HUD REAC Submission attestation and review of FDS for the Housing Authority - Annual State Controller's Report _ Measure X (Sales Tax) Compliance Report _ Agreed -Upon -Procedures Report up to two annually)Out of pocket expenses please specify) - Maximum Not -to -Exceed Total Fee $ - $ - $ - $ - $ - The City, during the term of this agreement, may request that Consultant provide special services in accordance with the provisions of this agreement. If Consultant agrees to perform the special services, the Consultant's hourly fees to perform these services for the term of the agreement are as follows: unless a lesser fee is agreed to in a separate agreement between the City and Consultant. Title FY 2020-21 FY 2021-22 FY 2021-23 FY 2021-24 Partner Manager Supervisor Senior auditor Staff auditor Other please specify) Expenses: All expenses incurred by the Consultant in performing the services in accordance with this agreement are included in the above annual fee quotes. These expenses include, but are not limited to: meals and lodging, transportation, communications, report preparation, word processing, and printing, and postage. THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. RFP No. 21-024 Professional Auditing Services Page 28 of 34 (9) CITY OF SANTA ANA ATTACHMENT A REFERENCES List and describe fully the contracts performed by your firm which demonstrate your ability to provide the supplies, equipment or services included in the scope of the proposal specifications. Attach additional pages if required. The City reserves the right to contact each of the references listed for additional information regarding your firm's qualifications. Reference Customer Name: Address: Contract Amount: Description of supplies, equipment, or services provided: Reference Customer Name: Address: Contract Amount: Description of supplies, equipment, or services provided: Reference Customer Name: Address: Contract Amount: Description of supplies, equipment, or services provided: Contact Individual: Phone Number: Facsimile Number: Year: Contact Individual: Phone Number: Facsimile Number: Year: Contact Individual: Phone Number: Facsimile Number: Year: THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. RFP No. 21-024 Professional Auditing Services Page 29 of 34 (9) CITY OF SANTA ANA ATTACHMENT B PROPOSER'S STATEMENT Proposer understands and agrees that this written RFP (or any part thereof specifically designated and accepted by the City of Santa Ana, hereinafter City) shall constitute the entire agreement between proposer and the City only after it has been accepted by the City Council, endorsed by the Clerk of the Council with her signature and official seal noting hereon the action of approval of the Council, signed by the Executive Director or his duly authorized agent, and signed by the City Attorney, denoting his approval of the form of this document, and its execution, and when it or an exact copy of it has been either delivered to proposer or deposited with the United States Postal Service properly addressed to the proposer with the correct postage affixed thereto. Proposer further agrees that upon delivery (as defined above) of the accepted agreement he/she will furnish City all required bonds and certificate of liability insurance within ten (10) days (excluding Saturdays, Sundays and City's legal holidays), or the funds, check, draft, or proposer's bond substituted in lieu thereof accompanying this proposal shall become the property of the City and shall be considered as payment of damages due to the delay and other causes suffered by City because of the failure to furnish the necessary bonds and because it is distinctly agreed that the proof of damages actually suffered by City is difficult to ascertain; otherwise said funds, check drafts, or proposer's bond substituted in lieu thereof shall be returned to the undersigned. Proposer understands that a proposal is required for the entire work, that the estimated quantities set forth in the RFP schedule are solely for the purpose of comparing proposals, and that final compensation under the contract will be based upon the actual quantities of work satisfactorily completed. All terms contained in the specifications, the certification of nondiscrimination by contractors, and the required insurance certificates are to be incorporated by reference into this agreement and are made specifically as part of this RFP. Firm Signed and Printed Name: Title Date THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. RFP No. 21-024 Professional Auditing Services Page 30 of 34 (9) CITY OF SANTA ANA ATTACHMENT C NON -COLLUSION AFFIDAVIT (Title 23 United States Code Section 112 and Public Contract Code Section 7106) To the CITY OF SANTA ANA In accordance with Title 23 United States Code Section 112 and Public Contract Code 7106 the proposer declares that the proposal is not made in the interest of, or on behalf of, any undisclosed person, partnership, company, association, organization, or corporation; that the proposal is genuine and not collusive or sham; that the proposer has not directly or indirectly induced or solicited any other proposer to put in a false or sham proposal, and has not directly or indirectly colluded, conspired, connived or agreed with any proposer or anyone else to put in a sham proposal, or that anyone shall refrain from bidding; that the proposer has not in any manner, directly or indirectly, sought by agreement, communication, or conference with anyone to fix the proposal price of the proposer or any proposer, or to fix any overhead, profit, or cost element of the proposal price, or of that of any other proposer, or to secure any advantage against the public body awarding the contract of anyone interested in the proposed contract; that all statements contained in the proposal are true; and, further, that the proposer has not, directly or indirectly, submitted his or her proposal price or any breakdown thereof, or the contents thereof, or divulged information or data relative thereto, or paid, and will not pay, any fee to any corporation, partnership, company association, organization, bid depository, or to any member or agent thereof to effectuate a collusive or sham proposal. Note: The above noncollusion affidavit is part of the proposal. Signing this proposal on the signature portion thereof shall also constitute signature of this noncollusion affidavit. Proposers are cautioned that making a false certification may subject the certifier to criminal prosecution. Signed State of California, County of Subscribed and sworn to (or affirmed) before me on this day of , 20 , by , proved to me on the basis of satisfactory evidence to be the person(s) who appeared before me. Notary Public Signature Notary Public Seal THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. RFP No. 21-024 Professional Auditing Services Page 31 of 34 (9) CITY OF SANTA ANA ATTACHMENT D NON -LOBBYING CERTIFICATION The prospective participant certifies, by signing and submitting this bid or proposal, to the best of his or her knowledge and belief, that: (1) No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. (2) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, "Disclosure of Lobbying Activities," in conformance with its instructions. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. The prospective participant also agrees by submitting his or her bid or proposal that he or she shall require that the language of this certification be included in all lower tier subcontracts, which exceed $100,000 and that all such subrecipients shall certify and disclose accordingly. Signed: Title: Firm: Date: THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. RFP No. 21-024 Professional Auditing Services Page 32 of 34 (9) CITY OF SANTA ANA ATTACHMENT E NON-DISCRIMINATION CERTIFICATION The undersigned consultant or corporate officer, during the performance of this contract, certifies as follows: The Consultant shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. The Consultant shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment without, regard to their race, color, religion, sex, or national origin. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Consultant agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause. 2. The Consultant shall, in all solicitations or advertisements for employees placed by or on behalf of the Consultant, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin. 3. The Consultant shall send to each labor union or representative of workers with which he/she has a collective bargaining agreement or other contract or understanding, a notice to be provided advising the said labor union or workers' representatives of the Consultant's commitments under this section, and shall post copies of the notice in conspicuous places available to employees and applicants for employment. 4. The Consultant shall comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor. 5. The Consultant shall furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his/her books, records, and accounts by the administering agency and the Secretary of Labor for purposes of investigation, to ascertain compliance with such rules, regulations, and orders. 6. In the event of the Consultant's non-compliance with the nondiscrimination clauses of this contract or with any of the said rules, regulations, or orders, the contract may be canceled, terminated, or suspended in whole or in part and the Consultant may be declared ineligible for further Government contracts or federally assisted construction contracts in accordance with procedures authorized in Execution Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or by rule, regulations, or order of the Secretary of Labor, or as otherwise provided by law. RFP No. 21-024 Professional Auditing Services Page 33 of 34 (9) CITY OF SANTA ANA 7. The Consultant shall include the portion of the sentence immediately preceding paragraph (1) and the provisions of paragraphs (1) through (7) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to Section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontract or purchase order as the administering agency may direct as means of enforcing such provisions, including sanctions for noncompliance; provided, however, that in the event the Consultant becomes involved in, or is threatened with, litigation with a subconsultant or vendor as a result of such direction by the administering agency, the Consultant may request that the United States enter into such litigation to protect the interests of the United States. 8. Pursuant to California Labor Code Section 1735, as added by Chapter 643 Stats. 1939, and as amended, no discrimination shall be made in the employment of persons upon public works because of race, religious creed, color, national origin, ancestry, physical handicaps, mental condition, marital status, or sex of such persons, except as provided in Section 1420, and any consultant of public works violating this Section is subject to all the penalties imposed for a violation of the Chapter. Signed: Title: Firm: Date: THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. RFP No. 21-024 Professional Auditing Services Page 34 of 34 EXHIBIT 3 creote, op�oftwu� March 12, 2021 Proposal to provide professional auditing services to: City of Santa Ana 4 Technical Proposal RFP Number: 21-024 CLAconnect.com Prepared by; WEALTH ADVISORY Daphnie Munoz, CPA, Principal OUTSOURCING daphnie.munoz@claconnect.com direct 714-795-5474 1 fax 714-978-7893 AUDIT, TAX, AND CONSULTING I Cover Letter March 12, 2021 Sergio Vidal, Assistant Director of Finance & Management Services Agency City of Santa Ana -- Finance and Management Services Agency 20 Civic Center Plaza Santa Ana, CA 92701 CIA (CliftonLarsonAlien LLP) 2875 Michelle drive, Suite 300 Irvine, CA 92606 %DIF 714-978-13001fax714-978-7893 CLAconnecltcom Thank you for inviting CliftonLarsonAllen (CLA) to propose our services to the City of Santa Ana (City) for audit services for the fiscal years ending June 30, 2021 and 2022. We understand the City reserves the right to extend the contract for up to one additional one two-year term for a total of four years. CLA's extensive experience serving local governments in California and nationally— bolstered by our client -oriented philosophy— makes CLA the top qualified candidate to be your independent firm. The following are just a few differentiators offered for the City's consideration! Strong methodology and responsive timeline. In forming our overall audit approach, we have carefully reviewed the RFP and other information made available and considered our past experience performing similar work for other local governments. In addition to our local government clients, we currently serve more than 4,150 governmental organizations nationally. From our work with you in the past, our staff understands your complexities not just from a compliance standpoint, but also from an operational point of view. We have developed a work plan that takes into consideration your unique needs as a governmental entity in the state of California. The work plan also minimizes the disruption of your staff and operations and provides a blueprint for timely delivery of your required reports. Experience auditing cities. Our Irvine office (legacy firm White Nelson Diehl Evans LLP) currently audits approximately 100 government entities on an annual basis including approximately 45 cities. WNDE served as the auditors for the City of Santa Ana for the period FY 2016 to FY 2020. For a fresh perspective and to comply with the State of California requirements, we are proposing with a new engagement partner. CAFR assistance. We understand the City's desire to issue a CAFR and receive the Government Finance Officers Association (GFOA) certificate of achievement for excellence in financial reporting. Our team is comprised of individuals, dedicated to your engagement, with significant experience assisting governmental entities in receiving this award. We will work closely with the City to assist in your CAFR preparation and review of the GFOA checklist, to best position the City to receive this award. Verification Statements I, Daphnie Munoz, your engagement principal in charge, will serve as the primary contact person for this engagement. Furthermore, as principal of CLA, I am authorized to sign, bind, and commit the firm to the obligations contained in this proposal and the City's RFP. This proposal is valid for a period of 90 days following proposal deadline. We are eager to continue working with you and welcome the opportunity to present our proposal to the City's management team. If you have any questions about our offerings, please do not hesitate to call me directly. Sincerely, Clifton LarsonAl len LLP M Daphnie Munoz, CPA, Prip8pal Direct 714-795-5474 J daphnie.munoz@claconnect.com �A member of Nexia International Table of Contents 1 Cover Letter 2 Agreement Statement 3 Firm and Team Experience a. Firm overview b. Experience with similar governmental agencies c. Office information and primary contact for your engagement d. Proposed engagement team e. Experience f. List of local office's most significant engagements in the last five (5) years g. Data requirements from the City h. Independence _ i. Licensed j. Quality control review and peer review k. Federal or state desk or field reviews I. Limits on liability m. Insurance n. Authorized to contractually bind the firm o. Disciplinary action 4 Work Plan a. Audit approach c. Segmentation, timeline, and completion dates d. Segmentation of hours 5 Cost Proposal a. Cost breakdown by contract year 6 Certifications 7 References 8 Evidence of Financial Capacity 9lnsurance Additional Information Appendix Engagement team biographies Attachments B through E 2 4 4 4 4 4 5 6 10 11 11 12 12 14 14 14 14 14 14 14 25 28 29 29 31 32 33 34 34 35 35 42 2 Agreement Statement We have reviewed the City's standard agreement which was provided as Exhibit A of the request for proposal. We have no exceptions except for the following: We reserve the right to discuss the modification of the wording in Section 7 of the agreement regarding indemnification to ensure that we will not be in violation of our insurance providers' requirements or generally accepted auditing standards. 3 Firm and Team Experience a. Firm overview With 7,400 people in more than 130 U.S. locations, and a global affiliation, we bring a wide array of approaches to help clients in all markets, foreign and domestic. CLA exists to create opportunities for our clients, our people, and our communities through industry -focused wealth advisory, outsourcing, audit, tax, and consulting services. Our broad professional services allow us to serve clients more completely — from startup to succession and beyond. CLA has nearly 400 state and local government professionals' firm wide. Our professionals are immersed in the industries they serve and have specialized knowledge of their operating and regulatory environments. HISTORY F LOCATION ____ VO'' years 1 C O More than 130 ® Gf locations nationwide in business FISCALLY STRONG $1.1 billion NATIONAL Among the nation's leading professional in revenue servicesfirms rr RESOURCES �,400+ employees r inaudfngmore Ihan 400 state and local government `=Y r!lliiii professlonaft INDUSTRY DRIVEN we serve ` ,150+ governmental entities b. Experience with similar governmental agencies CLA understands and appreciated California governmental experience like no other firms. CLA has a team of professionals in our Irvine office that focus their efforts in the government industry. Our government services team specifically chose to work in this industry. As such, our people are passionate about what they do and eager to exceed your expectations both now and in the future. As a CPA firm experienced in serving state and local government, CLA is aware of the financial and legal compliance requirements that government officials are facing daily, specifically in the State of California. CLA's Irvine office currently audits approximately 100 governmental organizations which includes approximately 45 cities in California. c. Office information and primary contact for your engagement The City will be served by our specialized government engagement team located in our Irvine, California office. We are a local firm with national resources. We are solely focused on providing high quality accounting, auditing, and consulting services to California municipalities, special districts, and other government entities. Daphnie Munoz will be your assurance principal and is authorized to bind the firm. Primary Contact Firm Location Daphnie Munoz, CPA, Principal CliftonLarsonAlfen LLP 714-795-5474 I Fax: 714-978-7893 2875 Michelle Drive, Suite 300 daphnie.munoz@CLAconnect.com Irvine, California d. Proposed engagement team An experienced engagement team has been aligned to provide the most value to your organization. The team members assigned to this engagement have performed numerous City Municipal Audit engagements of this nature and will commit the resources necessary to provide top quality service throughout the engagement. All management team members are full-time employees from the Irvine Office, currently and properly licensed Certified Public Accountants. Additional staff will hold a minimum of a bachelor's degree from an accredited university, be a licensed CPA or CPA candidate, and will be closely managed by one of more of the individuals listed below. Daphnie Munoz, CPA Kassie Radermacher, CPA, CFE Robert Perl, CPA Nicole Racine, CPA James Kreiser, CISA, CRMA CFSA Engagement Principal 22+ Assurance Principal 15+ Manager 14+ Senior 3+ Information Systems Principal 22+ Detailed biographies are available in the Appendix of this proposal. Roles and responsibilities Engagement Principal— Daphnie Munoz will have overall engagement responsibility including planning the phase of the audit to assess risks related to the audit. Daphnie will perform a final review of the work papers and financial reports. Daphnie is responsible for total client satisfaction through the deployment of all required resources and continuous communication with management and the engagement team. Assurance Principal— Kassie Radermacher will serve as the assurance principal and will perform a detailed review of the work papers and financial reports. Kassie will oversee the audit, supervise the staff, and maintaining client contact throughout the engagement and throughout the year Engagement Manager— Robert Peri, will act as the lead manager on the engagement. In this role, Robert will assist the engagement and assurance principals with planning the engagement, coordination of the timeline of the engagement status with the City and performing complex audit areas. He will perform a technical review of all work performed and is responsible for the review of the comprehensive annual financial report and all related reports. Information Systems Principal— James Kreiser will lead the audit team in documenting and evaluating general computer controls and IT application controls. Engagement Senior— Nicole Racine will act as the senior on the engagement. In this role, Nicole will be onsite performing the fieldwork, supervising, and reviewing the work of the staff accountants as the audit fieldwork is being performed and providing updates to the City staff. Additional Staff We will assign additional staff to your engagement based on your needs and their experience providing services to state and local governments. The staff assigned to your team will be from our Irvine office with state and local government as their industry focus at CLA. e. Experience Government experience CLA offers the credibility, reputation, and resources of a leading professional services firm — without sacrificing the small -firm touch. We bring high levels of technical excellence, commitment, and dedication to our clients, which have made us one of the most successful professional service firms serving governmental entities. Our strong reputation for serving state and local government units provides the City the confidence in their decision to select CLA to continue as their professional service provider. CLA has one of the largest governmental audit and consulting practices in the country, serving thousands of governmental clients nationwide. Regulated industries clients represent approximately one -quarter of all firm - wide revenue, and each of the government services team members are thoroughly versed in the issues critical to complex governmental entities. Our professionals have deep, technical experience in serving governmental entities. As a professional service firm experienced in serving state and local units of government, we are very aware of the financial and legal compliance requirements that government officials face daily. This creates complexities and service issues within a unique operational and regulatory environment. Because of our experience, we have become adept at providing our clients with insights in this environment not typical of other professional service firms. Certificate of achievement assistance The Government Finance Officers Association is awarded to state and local governments that go beyond the minimum requirements of generally accepted accounting principles. It is awarded to state and local governments who produce a comprehensive annual financial report that evidences the spirit of transparency and full disclosure. Members of the GFOA staff and the GFOA Special Review Committee (SRC) review reports submitted to the CAFR program. CLA provides audit services to many entities that received the GFOA Certificate of Excellence in Financial Report. All of the procedures noted in our audit approach and our technical review of the CAFR are done to help the City prepare and publish the top product possible. Our managers and principals who review the CAFR have a strong understanding of the GFOA requirement for the certificate. We understand that this is a prestigious award for the City and a great accomplishment for the Finance and Accounting departments. We will review the GFOA comment letter for each CAFR and provide the City advice regarding the response to the GFOA reviewer's comments. Our procedures with respect to the CAFR will be the review of the comments from GFOA on the prior year submission to determine they were adequately addressed, completion of the CAFR checklist, and review of the transmittal letter and statistical data to determine that information presented is reasonable and agrees with the information in the financial statements and management's discussion and analysis (MD&A), where applicable. We understand the interrelationships of the many and varied components of a governmental entity's financial statements, allowing us to quickly determine errors or problems with the financial statements. Our depth of knowledge and experience also allows us to assist the City with the preparation of the CAFR and improvement of the City's financial statements. Our involvement with clients in the GFOA Certificate program helps to determine that we are on the leading edge of reporting trends and techniques. We have been engaged by various entities to review their statements for compliance with program requirements. We have aided clients in the early implementation of professional pronouncements and regularly provide our clients with updates on new pronouncements which will affect them and will do the same for the City. California municipal entities the local Irvine office has recently audited that have received the GFOA award of excellence in financial reporting are: @! Alhambra Irvine Newport Beach Santa Ana Burbank La Canada Flintridge Norco Santa Barbara Cerritos La Habra Norwalk Santa Fe Springs Chino Laguna Hills Orange Signal Hill Colton Lake Forest Palos Verdes Estates Stanton Del Mar Lancaster Pasadena Torrance ElSegundo Monterey Park Rancho Palos Verdes Tustin Glendale Murrieta San Buenaventura West Hollywood Hesperia La Palma San Juan Capistrano Westminster The table below identifies the professionals who are currently members of the GFOA Special Review Committee together with their length of service with the Committee: Robert Callanan, CPA Principal Irvine, CA 5+ Julie S. Fowler, CPA Signing Director Sebring, FL 10+ Rich Gonzalez, CPA Principal Roseville, CA 5+ Michelle Hoffman, CPA Principal Minneapolis, MN 4+ Christopher Kessler, CPA Principal Fort Myers, FL < 1 Christopher G. Knopik, CPA, CFE Principal Minneapolis, MN 5+ Jacob S. Lenell, CPA Principal Milwaukee, WI 10+ Daphnie Munoz, CPA Principal Irvine, CA 5+ Remi Omisore, CPA Principal Baltimore, MD 6+ Nitin Patel, CPA Principal Irvine, CA 5+ Jeffrey Peek, CPA Manager Roseville, CA 4+ Miranda Wendlandt, CPA, CFE Principal Alexandria, MN 3+ Single audit experience CLA has become the national leader in providing audit, tax, and many other financial services to government entities similar to the City. Our client portfolio of nonprofit, government, and health care institutions represents nearly half of the firm's total revenues. The chart below illustrates CLA's experience in serving organizations that receive federal funds and demonstrates our firm's dedication to serving the government and nonprofit industry. CLA performs the largest number of single audits in the United States! We audited nearly $56 billion dollars in federal funds in 2019. {Number of Single Audits Performed* CLA 337 Eide Baisy..»..,.._.,.._...,..,_........., - - - •----:.__,�.. 7 674 - Plante & Moran + 558 Baker Tiby Virchow Krause 525 BKD ~.. .•�•• 492 RSC.rt 1473 Lance SoA & Lunghard 42 The Pun Group 39 Maya., Gim & O'Connell 34 0 200 400 ECO SCfl 1CC0 120G 1400 'The information for the firms above was pulled from the Federal Audit Clearinghouse for audits with fiscal year ends between lanu0iy 1, 2019 — December 31, 2019 In the current environment of increased oversight and new federal funding being available through the CARES Act in response to the COVID-19 pandemic, it is more important than ever to find qualified auditors who have significant experience with federal grants specific to the City and can enhance the quality of the City's single audit. Therefore, the single audit, if needed, will be performed by a team of individuals who are managed by personnel who specialize in single audits in accordance with OMB's UG and who will offer both knowledge and quality for the City. As part of our quality control process, the single audit will be reviewed by a firm Designated Single Audit Reviewer. The AICPA clarified auditing standard, AU-C 935 "Compliance Audits" requires risk -based concepts to be used in all compliance audits including those performed in accordance with OMB UG. Our risk -based approach incorporates this guidance. Single Audit Resource Center (SARC) Award CLA received the Single Audit Resource Center (SARC) Award for Excellence in Knowledge, Value, and Overall Client Satisfaction. SARC's award Single Audit recognizes audit firms that provide an outstanding service to their clients Resource Center based on feedback received from an independent survey in June 2018. The survey queried 10,762 nonprofit and government entities about the knowledge of their auditors, the value of their service, and overall satisfaction with their 2017 fiscal year-end audit. The SARC award demonstrates CLA's dedication to serving the government and nonprofit industry and maintaining the most stringent regulatory requirements in those sectors. Participation in Quality Improvement Programs We work with governmental entities across the country, and our exposure to the circumstances and issues that surround your industry will allow us to serve you with exceptional knowledge and insight. We understand the specific needs and challenges of the public sector and have been serving clients similar to the City for decades. We are actively involved in and/or are members of the following professional organizations: • American Institute of Certified Public Accountants (AICPA) AICPA's State and Local Government Expert Panel AICPA's Government Audit Quality Center (GAQQ OIL) ✓ AICPA Government Finance Officers Association (GFOA) ✓ Special Review Committee for the GFOA's ✓ Certificate of Achievement for Excellence in Financial Reporting (Certificate) Program ✓ AICPA Single Audit Quality Task Force ✓ Association of Government Accountants ✓ California Society of Municipal Finance Officers ✓ Governmental Accounting and Audit Committee of the Orange County Chapter of the California Society of Certified Public Accountants Our participation/membership in the aforementioned professional organizations, combined with various other technical services we subscribe to, allows use to be at the forefront of change in the government environment. We take seriously our responsibility for staying current with new accounting pronouncements, auditing standards, other professional standards and laws and regulations. f. List of local office's most significant engagements in the last five (5) years The below table provides related and relevant California projects that the CLA Irvine Office has successfully completed for Cities in the last five years. City of Glendale Client contact Ms. Shu-Jun Li, Deputy Finance Director Address 141 North Glendale Ave., Suite 346, Glendale, CA 91206 Phone number I email 818-551-3048 1 sli@Glendaleca.gov Engagement principal Daphne Munoz Dates of services 2020 — Present Scope of work City audit, Electric Utility Funds audit, Single Audit City of Burbank Client contact Dino Balos, Accounting Manager Address 275 East Olive Avenue, Burbank, CA 91502 Phone number I email 818-238-5518 I dbalos@burbankca.gov Engagement principal Nitin Patel Dates of services 2013-Present Scope of work City audit, Electric and Water Utility funds audit, Single Audit, Investment AUP, AQMD audit Client contact Ms. Stacey Dabbs, Finance Director Address 650 N. La Cadena Drive, Colton, CA 92324 Phone number I email 909-370-5036 1 sdabbs@coltonca.gov Engagement principal Daphnie Munoz Dates of services 2014 — Present Scope of work City and Single Audits; Child Care Compliance Audit; Electric and Water Utility Funds; State Controller's Report Client contact Mr. Casey Brooksher, Finance Director Address 9700 Seventh Ave., Hesperia CA 92345 Phone number I email 760-947-1813 i cbrooksher@cityofhesperia.us Engagement principal Daphne Munoz Dates of services 2016 — Present Scope of work City audit, Water and Sewer Utility Funds audit, Single Audit, State Controllers Reports City of Victorville Client contact Bobby Magee, Director of Finance Address 14343 Civic Dr., Victorville, CA 92392 Phone number I email 760-955-5055 1 bmagee@victorvilleca.gov Engagement principal Kassie Radermacher Dates of services 2019 - Present Scope of work Audits of the City, Victorville Water District, and Southern California Logistics Airport Authority, Single audit g. Data requirements from the City We request that the City provide access to all records required for the audits and other requirements of the contract. In addition, we request that you assign a "project coordinator" through whom we will communicate and coordinate activities. We do not foresee needing the City's staff other than during normal business hours. To assist in this process, we will provide a detailed Prepared by Client list early in the engagement. We will ask that your accounting staff provide us with standard schedules, as well as additional requested supporting items. We anticipate that your accounting personnel will assist us in retrieving the documents stored electronically for certain invoices, vouchers, cancelled checks, and other documents and records. We are extremely flexible as to the format in which we receive this information and will determine through the use of the latest technology that your personnel will not be asked to perform any unnecessary or extensively disruptive tasks. We will depend on your staff to provide us with as much information as possible, in an effort to limit everyone's time on the engagement and, ultimately, to save your organization money. h.Independence CLA is not aware of any financial, business, or other relationship with the City of any member of the City staff that may have an impact on the outcome of the project. CLA is independent of the City as required by auditing standards generally accepted in the United States and the U.S. Government Accountability Office's Government Auditing Standards. Our firm -wide quality control policies and procedures foster strict compliance with these professional standards. In addition, the individuals assigned to your audit are independent of the City. i. Licensed CLA is duly licensed to practice public accountancy in the state of California and other states. All management team members hold a CPA designation. Additional staff will hold a minimum of a bachelor's degree from an accredited university, be a licensed CPA or CPA candidate and will be closely managed by the proposed management team members. A copy of our state license is provided below: BOARD OF ACCOUNTANCY LICENSING DETAILS FOR: 7083 NAME: CLIFTONLARSONALLEN LLP LICENSE TYPE: CPA - PARTNERSHIPS LICENSE STATUS: CLEAR PREVIOUS NAMES: LARSONALLEN LLP ♦ LARSON, ALLEN, WEISHAIR & CO., LLP ADDRESS 60 S MARKET STREET SAN JOSE CA 95113 SANTA CLERA COUNTY j. Quality control review and peer review ISSUANCE DATE JULY 27, 2006 EXPIRATION DATE JULY 31, 2022 CURRENT DATE I TIME JUNE 25 2020 7:37:7 AM The most recent peer review report we received expressed a rating of pass, which is the most positive report a firm can receive. We are proud of this accomplishment and its strong evidence of our commitment to technical excellence and quality service. The full report is provided on the following page. In addition to an external peer review, we have implemented an intensive internal quality control system to provide reasonable assurance that the firm and our personnel comply with professional standards and applicable legal and regulatory requirements. Our quality control system includes the following: • A quality control document that dictates the quality control policies of our firm. In many cases, these policies exceed the requirements of standard setters and regulatory bodies. Firm leadership promotes and demonstrates a culture of quality that is pervasive throughout the firm's operations. To monitor our adherence to our policies and procedures, and to foster quality and accuracy in our services, internal inspections are performed annually, • Quality control standards as prescribed by the AICPA. The engagement principal is involved in the planning, fieldwork, and post -fieldwork review. In addition, an appropriately experienced professional performs a risk -based second review of the engagement prior to issuance of the reports. • Hiring decisions and professional development programs designed so personnel possess the competence, capabilities, and commitment to ethical principles, including independence, integrity, and objectivity, to perform our services with due professional care. • An annual internal inspection program to monitor compliance with CLA's quality control policies. Workpapers from a representative sample of engagements are reviewed and improvements to our practices and processes are made, if necessary, based on the results of the internal inspection. • Strict adherence to the AICPA's rules of professional conduct, which specifically require maintaining the confidentiality of client records and information. Privacy and trust are implicit in the accounting profession, and CLA strives to act in a way that will honor the public trust. • A requirement that all single audit engagements be reviewed by a designated single audit reviewer, thereby confirming we are in compliance with the standards set forth in OMB Uniform Guidance. t.� Cherry Bekaert— CPAs 6 Advisors Report on the Firm's System of Quality Control November 21, 2019 To the Principals of OlftonLarsonAllen LLP and the National Peer Review Committee We have reviewed the system of quality control for the accounting and auditing practice of CiiflonLarsonAllen LLP (the trm) applicable to engagements not subject to PCAOB permanent inspection in effect for the year ended May 31, 2019.Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants (Standards). A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as described in the Standards may be found at www.aiepa.orglprsuminary. The summary also includes an explanation of how engagements identified as not performed or reported in conformity with applicable professional standards, if any, are evaluated by a peer reviewer to determine a peer review rating. Fires Responsibility The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. The firm is also responsible for evaluating actions to promptly remedlate engagements deemed as not performed or reported in conformity with professional standards, when appropriate, and for remediating weaknesses in its system ofquality control, if any, Peer Reviewer's Responsibility Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance therewith based on our review - Required Selections and Considerations Engagements selected for review included engagements performed under Govemmenr Auditing Standards, including compliance audits under the Single Audit Act; audits of employee benefft plans; audits performed under FDlQI& audits of broker -dealers; and examinations of service organizations [BOG 1 and SOC 2 ongagementsj. As a part of our peer review, we considered reviews by regulatory entities as communicated by the firm, if applicable, in delemtining the nature and extent of our procedures. opinion In our opinion, the system of quality control for the accounting and auditing practice of CliftonLarsonAllen LLP applicable to engagements not subject to PCAOB permanent inspection in effect for the year ended May 31, 2019, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficlency(ies) or fail, CliftonLarsonAVen LLP has received a peer review rating or pass. � � LJ Cherry Bekaert LLP k. Federal or state desk or field reviews CLA has been subject to several federal and state desk reviews by state oversight agencies during the past three years, and we have resolved all findings. In addition, our government audits are subject to review by each agency's Office of Inspector General, as well as the U.S. Government Accountability Office, and we have also resolved all findings identified in those reviews. I. Limits on liability See Section 9, Insurance. m. Insurance Clifton LarsonAllen LLP carries commercially reasonable amounts of general liability and malpractice (aka professional liability) insurance. if requested, the firm will provide a certificate of coverage for an amount specified by the City upon being engaged. In. Authorized to contractually bind the firm Daphnie Munoz, as principal of CLA, is authorized to sign, bind, and commit the firm to the obligations contained in this proposal and the City's RFP. This proposal is valid for a period of 90 days. o. Disciplinary action From time to time, the firm is a defendant in lawsuits involving alleged professional malpractice. In all cases, the firm believes that it has a strong position and intends to defend itself vigorously. Should the ultimate outcome be unfavorable, however, net of the deductible provisions of the firm's malpractice insurance, all cases are expected to be fully covered by insurance and will not have a material impact on the firm or its ability to perform these services. Moreover, in those cases where claims have been resolved by settlement (the vast majority of our cases), the firm is typically subject to confidentiality agreements that prohibit the disclosure of information regarding those matters. Disclosure by the firm of any details about those matters could invalidate the settlement agreements. 4 Work Plan a. Audit approach Many organizations view an audit as a requirement that doesn't contribute to their overall operations or value. At CLA, we believe an audit should be an annual check-up that gives you insight into your organization, allowing you to take advantage of opportunities and improve your operations. CLA is one of a few firms that have developed its own proprietary audit program. Our audit teams can customize our audit programs to address the specific risks and unique characteristics of your operation. We do not perform the exact same procedures for every client. In addition, our audit programs are interactive, providing guidance to the staff while they are performing the audit procedures. Our audit approach for year one and subsequent years will have certain consistent elements. However, we expect that the subsequent years will result in fewer audit hours based on the efficiencies gained as we become more familiar with your operations. Our audit objective extends beyond the issuing of an opinion on financial statements. We believe that a good audit yields substantial information for management and is a valuable tool in recognizing opportunities and identifying areas that can be strengthened. An effective audit performed by our team will also provide: • An objective look at your policies and procedures • Valuable suggestions for improvements in your financial operations and other areas • An analysis of trends and unusual variations from year-to-year • Protection for current and future resources through improved internal controls • A deterrent to embezzlement and other fraudulent activities Through careful consideration of the above risks and their interrelationships, we will develop an audit plan and related procedures that concentrate our efforts on those elements of your financial statements that involve the greatest risk. At the same time, we will avoid the unnecessary application of commonplace and traditional procedures to low -risk areas. Throughout the engagement, we will communicate our observations to the City. The information we provide is intended to help you better manage your organization, and not just reside in a written report that is filed among your organization's records. Ourteams are very deadline driven and have experience meeting and exceeding deadlines from working with numerous similar clients throughout the years. Through upfront planning and coordination with our clients we can establish timelines that meet their needs and enable us to perform our work efficiently and effectively, thus minimizing the disruption to their business. Your time has value. We recognize that you and your teams' day is filled with competing priorities and constant distractions. We elevate your experience by utilizing a variety of communication mediums, such as a web -based document portal, video conferencing, email, and phone calls, to keep everyone informed and on track. These mediums provide ultimate flexibility so that you can choose where and how your audit is performed. In contrast to a traditional engagement, where a team spends weeks on site at your location, our Seamless Assurance Advantage focuses on having the right team members on your engagement and isn't dependent upon any physical locations. Phases and methodology of financial statement audit The CLA audit methodology utilizes a five -phase approach. Methodology. Our audit is performed based on a risk -based approach. We conduct our audits under the concept of 'understanding the entity." This concept is based fundamentally on the fact that the City is unique. By understanding the City, we gain the necessary perspective for performing on effective audit. Our audit approach places particular emphasis on the planning phase to determine maximum efficiency and effectiveness. When performing an audit, we are sensitive and understanding of the fact that we report to those charged with governance. We maintain objectivity and independence in order to be able to issue our audit opinions. We will act within our philosophy of total client service, maintain the professional relationship refined with management, and fulfill our responsibilities with the utmost professionalism. Yearlong support: We encourage your staff to take advantage of our accessibility throughout the year far questions that may arise. Our people, working with you and your staff, can provide proactive advice on new accounting or GAAP pronouncements and their potential impact; help with immediate problems including answers to brief routine questions, and share insights and best practices to assist you in planning for your future success. The assessment phase of an engagement starts when an engagement letter is issued. Upon notice of contract award, we will prepare a contract and engagement letter. We will communicate our plan to start the work and to discuss the audit process. These discussions are intended to accomplish the following: • Identify key management and staff involved in the audit • Identify primary audit liaisons • Introduce our audit team and identify key CLA contact personnel • Discuss the timetable • Explain our means and ways of communication • Inquire about any issues, which we may need to be aware of • Discuss logistics and administrative matters • Complete a preliminary assessment of risk based on a review of prior year workpapers and knowledge of your organization Through all phases of the audit, we think it is important to have regular communications with the City's management to discuss the status of the engagement. We will provide timely communication of any critical issues, concerns, and potential findings with the person primarily responsible for the area and our audit liaisons. We will be available to meet with key management prior to issuance of the final audit report. This meeting will highlight some of the results of the audit, any outstanding items, and reporting and issuing processes. Phase 2: Planning & Strategy The main objective of the planning phase is to identify significant areas and design efficient audit procedures. We will accomplish our planning by following the methodology below: • Conduct an entrance meeting with the City's personnel to mutually agree on an outline of responsibilities and timeframes. The agenda will include but not be limited to the following: Establish audit approach and timing schedule Assistance to be provided by the City's personnel - Application of generally accepted accounting principles - Initial audit concerns - Concerns of the City's management - Establishment of report parameters and timetables - Progress reporting process - Establish principal contacts • Gain an understanding of the operations of the City, including any changes in its organization, management style, and internal and external factors influencing the operating environment. We will utilize reference materials such as the budget and related materials, organizational charts, manuals and programs, financial, and other management information systems • Identify significant accounts and accounting applications, critical audit areas, significant provisions of laws and regulations, and relevant controls over operations • Determine the likelihood of effective Information Systems (IS) - related controls • Perform a preliminary overall risk assessment • Confirm protocol for meeting with and requesting information from relevant staff • Establish a timetable for the fieldwork phase of the audit • Determine a protocol for using TeamMate Analytics and Expert Analyzer (TeamMate), our data extraction and analysis software, to facilitate timely receipt and analysis of reports from management • Compile an initial comprehensive list of items to be prepared by the City, and establish mutually agreed upon deadlines We will document our planning through preparation of the following: • Entity Profile. This profile will help us gain an understanding of the City's activities, organizational structure, services, management, key employees, and regulatory requirements • Preliminary Analytical Procedures. These procedures will assist in planning the nature, timing and extent of auditing procedures that will be used to obtain evidential matter. They will focus on enhancing our understanding of the financial results, and will be used to identify any significant transactions and events that have occurred since the last audit date, as well as to identify any areas that may represent specific risks relevant to the audit • General Risk Analysis. This will contain our overall audit plan, including materiality calculations, fraud risk assessments, overall audit risk assessments, effects of our IS assessment, timing, staffing, client assistance, a listing of significant provisions of laws and regulations and other key planning considerations • Account Risk Analysis. This document will contain the audit plan for the financial statements, including risk assessment and the extent and nature of testing by assertion • Prepared by Client Listing. This document will contain a listing of schedules and reports to be prepared by the City's personnel with due dates for each item One of the key elements in the planning of this audit engagement will be the heavy involvement of principals and managers. We will clearly communicate any issues in a timely manner and will be in constant contact with the City as to what we are finding and where we expect it will lead. We will develop our audit programs during this phase. Utilizing the information, we have gathered, and the risks identified, we will produce an audit program specifically tailored to the City. This program will detail by major section the nature and types of tests to be performed. We view our programs as living documents, subject to change as conditions warrant. Ph ase 3* Systems Evaluation During the systems evaluation phase, we will gain an understanding of the internal control structure of the City for financial accounting and relevant operations. Next, we will identify control objectives for each type of control that is material to the financial statements, and then identify and gain an understanding of the relevant control policies and procedures that effectively achieve the control objectives. Finally, we will determine the nature, timing, and extent of our control testing and perform tests of controls. This phase of the audit will include testing of certain key internal controls: • Electronic data, including general and application controls reviews and various user controls • Financial reporting and compliance with laws and regulations We will test controls over certain key cycles. One audit efficiency initiative is to rely heavily on internal controls when appropriate, and to creatively look at internal control testing to make it as efficient as possible. This means not routinely performing detailed tests of transactions using large samples. We first seek to identify key controls, and then identify possible testing through alternative methods, such as observation, interviews, and re -performance. -these tests serve not only to gather evidence about the existence and effectiveness of internal control for purposes of assessing control risk, but also to gather evidence about the reasonableness of an account balance. We will also develop our internal control tests to assess the compliance with certain provisions of laws, regulations, contracts, and grants for which noncompliance could have a direct and material effect on the determination of financial statement amounts. Our use of multi -purpose tests allows us to provide a more efficient audit without sacrificing quality. Our assessment of internal controls will determine whether the City has established and maintained internal controls to provide reasonable assurance that the following objectives are met: • Transactions are properly recorded, processed, and summarized to permit the preparation of reliable financial statements and to maintain accountability over assets • Assets are safeguarded against loss from unauthorized acquisition, use, or disposition • Transactions are executed in accordance with laws and regulations that could have a direct and material effect on the financial statements We will finalize our audit programs during this phase. We will also provide an updated Prepared by Client Listing based on our test results and our anticipated substantive testing. During the internal control phase, we will also perform a review of general and application Information Systems (IS) controls for the applications that are significant to financial statements to conclude whether IS general controls are properly designed and operating effectively, and consider application controls as part of the internal control assessment in the financial statement audit. Our strategy for the IS review of the applications will involve reviewing all the general control activities, including the computerized and manual processes. We will determine the scope of work by applying the concepts of materiality and risk assessment to effectively reduce examination inefficiencies. When planning this examination, we will gain an understanding of the City's operations by reviewing its current controls and control objectives as documented and will also review prior years' audit work and the status of corrective actions. Based on our preliminary review, we will perform an initial risk assessment of each critical element in each general control category, as well as an overall assessment of each control category. We will then proceed to assess the significant computer -related controls. For IS -related controls that we deem to be ineffectively designed or not operating as intended, we will gather sufficient evidence to support appropriate findings and will provide recommendations to improve internal controls. For those IS controls that we deem to be effectively designed, we will perform testing to determine if they are operating as intended through a combination of procedures, including observation, inquiry, inspection, and re -performance. Phase 4: Testing & Analysis The extent of our substantive testing will be based on results of our internal control tests. It has been our experience that governmental entities, like the City, often have a system of internal controls that, with appropriately designed tests and correlation to account balances, can be used to limit the extent of account balance substantiation testing. Audit sampling will be used only in those situations where it is the most effective method of testing. Before deciding to sample, we will consider all possible approaches and audit techniques. Items where, in our judgment, acceptance of some sampling risk is not justified will be examined 100 percent. These may include unusual items or items for which potential misstatements could individually equal or exceed tolerable error. After identifying individually significant or unusual items, we will decide on the audit approach for the remaining balance of items by considering tolerable error and audit risk. This may include (1) testing a sample of the remaining balance; (2) lowering the previously determined threshold for individually significant items to increase the percent of coverage of the account balance; or (3) applying analytical procedures to the remaining balance. When we elect to sample balances, we will use IDEA to efficiently control and select our samples. Our work papers during this phase will clearly document our work as outlined in our audit programs. We will also provide the City with status reports during the audit fieldwork. As in all phases of the audit, we will be in communication with the City to determine that all identified issues are resolved in a timely manner. We will also hold a final exit conference with the City to summarize the results of our fieldwork and review significant findings. Phase 5: Reporting & Follow-up Reports to management will include oral and/or written reports regarding: Independent auditors' report Management letter • Written communication to those charged with governance, which includes the following areas: -- Our responsibility under auditing standards generally accepted in the United States of America Changes in significant accounting policies or their application — Unusual transactions — Management judgments and accounting estimates Significant audit adjustments -- Other information in documents containing the audited financial statements — Disagreements with the City — The City's consultations with other accountants — Major issues discussed with management prior to retention — Difficulties encountered in performing the audit — Fraud or illegal acts Once the final review of working papers and financial statements are completed — a process that actually starts while the fieldwork is in process — our opinion, the financial statements, and management letter will be issued. The City will be provided a draft of any comments that we propose to include in the management letter, enabling you to review the comments for accuracy priorto final release. Any items that come to our attention that are not what we consider major items may be discussed verbally with management and not included in the management letter. Our management letter will include items noted during our analysis of your operations. We will also make a formal presentation of the results of the audit to those charged with governance of the City if requested. Sample size and statistical sampling We follow the guidance of AU-C Section 530, Audit Sampling, in using statistical and nonstatistical approach. We use quality control material in all our audit engagements. These AU-C Section 530— "Audit Sampling" forms guide our staff through a logical process of assessing inherent risk, control risk, and combined audit risk, followed by an assessment of appropriate sample size for testing. Sample sizes will vary depending on the nature of the testing (compliance versus substantive) and the size of the population being sampled. Sampling techniques are utilized in compliance and internal control testing, as well as substantive testing of certain asset and liability account balances. Sample sizes used for internal control testing depend on a number of factors, namely the number of expected or actual control deviations, size of population, and level of control assurance anticipated. Sample sizes can range from 20 to 90 possible selections. To illustrate, if no internal control deviations are anticipated and the frequency of the population (i.e., the number of times the control is performed in a given year) is less than 100, then we will test 20 transactions in order to obtain moderate control assurance. If 2 internal control deviations are anticipated, and the frequency of the population is greater than 200, then we will test 90 transactions in order to obtain low control assurance. We are usually able to cover a substantial portion of the compliance and controls testing with one sample, resulting in a very efficient approach. Data analytics In addition to standard auditing methodology, a distinguishing aspect of CLA's audit services incorporates the power of data analytics to multiply the value of the analyses and the results we produce for clients. CLA's data methodology is a six -phase, systematic approach to examining an organization's known risks and identifying unknown risks. Successful data analysis is a dynamic process that continuously evolves throughout the duration of an engagement and requires collaboration of the engagement team. Data analytics are utilized throughout our audit process, our risk r'lssessment, Oota �inalytics and Review ("RADAR") is a specific application of general ledger data analytics that has been implemented on all audit engagements. RADAR is an innovative approach created and used only by CLA that aims to improve and replace traditional preliminary analytics that were being performed. The phases in our data analytics process are as follows 1. Planning In the planning stage of the engagement, the use of data analysis is considered and discussed to determine that analytics are directed and focused on accomplishing objectives within the risk assessment. Areas of focus, such as journal entries, cash disbursements, inventory, and accounts receivable are common. 2. Expectations We consider the risks facing our client and design analytics to address these risks. Through preliminary discussions with management and governance, we develop and document expectations of financial transactions and results forth e year. These expectations will assist in identifying anomalies and significant audit areas in order to appropriately assess risk. 3. Data Acquisition Sufficient planning, a strong initial risk assessment, and an adequate understanding of your systems will serve as the foundation necessary to prepare our draft data request list. We will initially request information in written format and conduct follow-up conversations helping CLA practitioners our staff share a mutual understanding of the type of data requested and the format required. If there are going to be any challenges/obstacles related to obtaining data, or obtaining data in the preferred format, they will generally be discovered at this point. 4. Technical Data Analysis Technical analysis of the data requires the skillful blend of knowledge and technical capability. Meaningful technical analysis provides the engagement team with a better understanding of the organization. The additional clarity assists the Comprehensive �� and Insighlfut �� engagement team to better assess what is normal and, in turn, be better suited to Anaiytics spot anomalies, red -flags and other indications of risk. Analytics generally fall into five categories, each looking into the data set in a different way and deployed with a different purpose. S. Interpret Results and Subsequent Risk Assessment Trends and anomalies will be identified through the performance of the above referenced analytics. Comments regarding the interpretation of those trends and anomalies will be captured. When trends are identified they are reconciled against expectations. For anomalies identified, the approach to further audit procedures will be considered. 6. Response and Document The last process is to capture responses and determine that our procedures are properly documented. Abstracts, charts or summaries of both trends and anomalies are retained in the audit documentation to support our identification of risks. Our analysis can be tailored and customized to help analyze an array of information, including client specific and proprietary data. Key benefits of data analytics include: • Built-in audit functionality including powerful, audit specific commands and a self -documenting audit trail • 100 percent data coverage, which means that certain audit procedures can be performed on entire populations, and not just samples e Unlimited data access allows us to access and analyze data from virtually any computing environment • Eliminates the need to extrapolate information from errors (a common effort when manually auditing data) and allows for more precise conclusions The below figure illustrates typical data analytics scenarios. Pe n Ford Ana lys Receipts and Disbursements Trending 5700.000 ... ... SiOu,aw �r snao,a0oi $iioa,000i s,wo,0oot slsaoa■oi s{sak,osoi 16.0ae0aa - User Acti9itq by Month 6,000 - - Transaction Activity by TiR i 14.000.000 ■ I.n 5,000 U.0ao.00o • F,k wMn i,000 io.xa.aoa ■ w ■us, 3Aao 6.00Q00o .. __ _ ■Ri 7,o00 SAW ■v<e 3.000.0a6 - ■r�Pi a MI wo - d d f{ d it a►aa" gat a' a' l� f> i+ �+ d !>Ar� i+ it .+ r► arimPran Gt■yre [Wawn Nano lions y8 > y'P r'D •i� �� K' w� rF�y+'fir �'8 5� r� ..'� kP y$�� Data Analytics. At the end of a series of pre -determined onalytics (often retrieved from multiple proprietary accounting systems) that are customized to the project at hand, we identify anomalies and potential errors in transactions. In every case, we review what appears to be inappropriate activity, including supporting documentation evidencing the transactions. Procedures used to understand internal processes and controls We understand with a change in the engagement principal and a different approach with Cf_A would require a new to develop an understanding of the City and its internal control and operating structure. We also strive to develop our understanding in the least intrusive manner possible, while still maintaining our professional responsibilities. We would utilize a combination of internal control forms and interviews with key accounting personnel to gain and document our understanding of the City. We will also use as a baseline any existing internal control processes, policies, organizational charts, etc. the City may have already documented. Tests of design and operating effectiveness would then be performed to confirm our understanding. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) has established a framework for internal control systems. Under the COSO framework, internal control is a process to provide reasonable coso Internal contort: integrattedLd Framework assurance that those internal objectives, including effectiveness and efficiency of business operations, reliability of financial reporting, and compliance with applicable laws and regulations, will be met. Our audit approach is designed to evaluate and test the departmental internal controls in accordance with COSO concepts. Our procedures include a review of the overall control environment, determination of the internal controls which are determined to be direct and material to the federal program under review, determination of the adequacy of those procedures, and testing of the procedures to determine if they are functioning as designed. During the planning and internal control phases of our audit, we will develop our understanding of the City's business operations and internal control structure for financial accounting and relevant operations through observation, discussion, and inquiries with management and appropriate personnel. During this phase of the audit, we will review budgets and related materials, organization charts, accounting and purchase manuals, and other systems documentation that may be available. Once we understand your operations, we will then identify control objectives for each type of control that is material to the financial statements. The next step will be to identify and gain an understanding of the relevant control policies and procedures that effectively achieve the control objectives. We will then determine the nature, timing, and extent of our control testing, and perform tests of controls. This phase of the audit will include extensive testing of controls over transactions, financial reporting, and compliance with laws and regulations. Whenever possible, we will use dual-purpose tests to reduce the need to select multiple samples for internal control and compliance testing. We will be as efficient as possible, thereby reducing the disruption to your operations while achieving our audit objectives. Our assessment of internal controls will determine whether the City has established and maintained internal controls to provide reasonable assurance that the following objectives are met: • Transactions are properly recorded, processed, and summarized to permit the preparation of reliable financial statements and to maintain accountability over assets • Assets are safeguarded against loss from unauthorized acquisition, use, or disposition • Transactions are executed in accordance with laws and regulations that could have a direct and material effect on the financial statements Our workpapers during this phase will clearly document our work through the preparation of the following for each significant transaction cycle or accounting application: • Audit program • Cycle memo and supporting documentation • Account risk analysis (ARA) • Specific control evaluation (SCE) Approach to be taken in determining laws and regulations that will be subject to audit test work We will obtain an understanding of the laws and regulations that have an impact on the City's operations by reviewing council minutes to identify any ordinances or resolutions that might have an impact to operations and reporting by the City, as well as interview key personnel and management of the City. Additionally, the staff assigned to the engagement attend regular trainings and are well versed in upcoming legislation, federal and state laws (Le. Uniform Grant Guidance) and proactively discuss these upcoming changes with our clients. We will also review current operations, contracts and IGA's that may have an impact on current operations. Identification of anticipated potential audit problems In situations where authoritative guidance on a particular transaction or accounting issue is unclear or subject to interpretation, our approach is to proactively meet with management to discuss the issue and reach a conclusion that is hopefully agreed upon by both parties. We do not have specific "firm policies" that dictate our conclusions to be reached on all complex accounting issues. Rather, each issue must be evaluated independently by our engagement team. As discussed above, we will not only meet internally, but also facilitate discussion with the City's management team in order to obtain a mutual understanding of the particular accounting issue, determine the applicable authoritative guidance that most closely relates to the issue, and strive to reach an approach agreed upon by both parties. If there still remains any ambiguity or disagreement, we can explore other resources that could possibly assist, such as subject matter professionals within the Government Accounting Standards Board staff or the Government Finance Officers Association (GFOA) or perhaps other municipalities who may have dealt with similar issues. Use of technology in the audit We're reimagining the audit process through technology to elevate your experience! IKr)ecure, Interactive Request Lists Analytics and insights Y I; �L `■`�� Impactful Interactions Assurance Information Exchange (AIE)—To make working with CLA a seamless experience, our team utilizes a proprietary, secure web -based application to request and obtain documents necessary to complete client engagements. This application allows CLA and our clients to view a live client assistance letter client, which provides detailed information, including due dates for all the open items CLA is requesting. Additionally, clients can attach electronic files and add commentary related to the document requests directly on the application. Follow the link to view a brief tutorial of the Assurance Information Lxchange. Microsoft® Teams — Our services approach focuses on impactful interactions. We've said goodbye to the days of setting up camp in our clients' conference rooms for weeks on end. We know our clients have organizations to run, so our interactions have purpose. To assist with communications when we are not onsite, we utilize tools such as Microsoft Teams, which allow for two-way screen sharing and video. We've found this helps minimize disruptions in our clients' environments while continuing to effectively communication with each other. TeamMate Analytics and Expert Analyzer (TeamMate) — To analyze and understand large data sets, we use TeamMate Analytics and Expert Analyzer. We customize the application by industry in order to perform 6. Response the most applicable procedures. This allows us to go beyond sampling oo ument and instead analyze the entire general ledger for targeted anomalies. Far beyond the audit application, our six -phase process of Risk Assessment, Data Analytics and Review (RADAR) can also provide L_ r "3Dwa actionable insights to help you understand your entity better. Acquisition 4. Technical Data Anafysis Commitment to Communication with Management As you will see, we are committed to ongoing communication throughout the engagement. Continual communication starts when an engagement letter is issued, continues until the completion or closeout of an engagement, and throughout the remainder of the year. We believe effective communication is critical to a successful engagement. This communication includes the exchange of ideas and advice as changes are considered or implemented by the entity or the accounting profession. During the engagement we will hold regular status meetings with the City to enhance day-to-day operations, to communicate results, and to ensure that any issues are commonly understood and addressed. The objectives of tracking and formally reporting the engagement status are to: • Provide a consistent technique for monitoring progress against plan • Identify any issues quickly to allow for timely corrective action • Provide an objective rather than subjective evaluation of status • Provide timely information on a regular basis • Assist with obtaining buy -in of any audit recommendations on a timely basis Working remotely under special circumstances CLA exists to create opportunities for our clients, our people, and our communities. For several years now we have fostered a remote culture throughout the firm understanding that flexibility to work remotely enables us to better serve our clients under a variety of circumstances. In fact, we had already implemented a number of tools, before the Covid-19 pandemic developed, such as Assurance Information Exchange (AIE) and MicrosoftO Teams, which we utilize to provide seamless service to our clients. As we continue to navigate these uncertain times, CLA will work with the District to determine the correct balance of in -person and remote field work to best meet the District's needs. If onsite work is performed, a senior supervising auditor will be on site for 100% of the time when procedures are performed, and the principals will be available throughout field work. Whether we are working with the District remotely or in person, CLA is committed to performing your audit services and meeting your deadlines. c. Segmentation, timeline, and completion dates An important distinction between CLA and other firms is the amount of principal and manager involvement in the engagement. Because our principals and managers are directly involved in the engagement during fieldwork, we can proactively identify significant issues immediately and resolve them with management so that the engagement is essentially complete when fieldwork ends. We expect that the majority of our audit hours will be concentrated in the high -risk audit areas. Our approach is not to overwork every account with extensive substantive testing. While substantive testing remains part of the process, we think out -of -the -box analytically, identify relationships and truly learn about your operations. Assuming that the interim fieldwork commences in late May or early June and final fieldwork commencing in October, the following is an abbreviated suggested timeline and milestones to meet the deadlines listed in the RFP: Entrance conference Principal / Manager May 31 Preliminary risk assessment and initial audit plan Principals / Manager June 30 SEFA review & major program determination Manager / Senior December 15 Understanding of the City's internal controls Manager/Senior June 30 Perform walkthroughs and internal control testing Senior / Staff June 30 Evaluate information system controls Manager / Senior June 30 Final risk assessment and comprehensive audit plan Principal / Manager June 30 Exit Conference to discuss interim fieldwork results Principal/Manager June 30 Single Audit major program internal control and Senior / Staff January 31 compliance testing Financial Statement substantive testing and analytical Senior/Staff November 15 procedures Exit Conference to discuss final fieldwork results Principal / Manager November 15 Drafting reports (, Management Letter, Single Audit, other Manager/ Senior November 30 deliverables) and required communications Detailed review of work Principal / Manager November 15 Communications with management Principal / Manager November 15 Finalization of reports and required communications Principal / Manager December 10 Reports to be issued and due dates We make a commitment to issue the reports by the due dates specified below with interim fieldwork in May/June and final fieldwork completed by November15 for the June 30 year end audits Draft Report Final Report Reports for City of Santa Ana Due Date Due Date Independent Auditor's Report on City of Santa Ana Financial Audit Independent Auditors' 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 Communication to those in charge of governance (Audit Committee Letter) Single Audit Report: Independent Auditors' Report on compliance for each major program and internal control over compliance required by Uniform Guidance, formerly OMB Circular A-133 Air Quality Improvement Fund (AQMD) GANN Limit computation Investment Policy Compliance Review U.S. Department of Housing of Urban Development (HUD) Real Estate Assessment Center (REAL) submission attestation and review of HUD Financial Data Schedule (FDS) for the Housing Authority Annual State Controller's Report Measure X (Sales Tax) Compliance Report Agreed -Upon -Procedures Report n/a December 10 November 30 December 10 November 30 December 10 February 15 February 28 November30 December 10 November30 December 10 November30 December 10 n/a February 28 n/a January 31 November30 December 10 TBD TBD d. Segmentation of hours Proposed staffing plan and segmentation of the audit hours by principal and staff level are as follows: City audit, including management and audit committee letters 50 100 610 10 770 Single Audit of Federal Grants 12 40 220 3 275 AQMD Audit of the Air Quality Improvement Fund 1 4 24 -- 29 GANN Limit Review -- 1 8 -- 9 Compliance Review of the City's Investment Policy 2 12 16 -- 30 Preparation of the Santa Ana Housing Authority's Financial Data Schedule 2 4 -- -- 6 Measure X — Agreed -Upon Procedures 4 8 36 2 50 Preparation of the City's State Controller's Report -- 8 40 -- 48 Total Hours 71 177 954 15 1,217 Two Agreed -Upon Procedures Reviews, Annually (1) 8 18 108 4 138 (1) The hours for agreed -upon procedures are estimated and subject to negotiation once the scope of each agree -upon procedures are determined. Proposed staffing plan and segmentation of audit hours by principal and staff level by phases are as follows: City audit and related reports Phases 1 and 2 Phase 3 Phase 4 Phase 5 Measure X Single Audit Total Hours 3 8 8 1 20 12 24 130 -- 166 12 32 440 -- 484 28 65 120 9 222 4 8 36 2 50 12 40 220 3 275 71 177 954 15 1,217 5 Cost Proposal a. Cost breakdown by contract year City of Santa Ana EXHIBIT B SCHEDULE OF PROFESSIONAL FEES AND EXPENSES The compensation for financial auditing and report preparation services to be provided in each fiscal year, in accordance with this agreement, is shown below: Option Years Description of Services FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 City audit, including management and audit committee letters $100,850 $104,025 $107,295 $110,665 Single Audit of Federal Grants 38,480 39,635 40,825 42,050 AQMD Audit of the Air Quality Improvement Fund 3,475 3,580 3,690 3,800 GANN Limit Review 895 920 950 980 Compliance Review of the City's Investment Policy 4,550 4,685 4,825 4,970 Preparation of the Santa Ana Housing Authority's Financial Data Schedule 1,350 1,390 1,430 1,475 Measure X-Agreed-Upon Procedures 7,020 7,230 7,445 7,670 Preparation of the City's State Controller's Report 5,600 5,770 5,945 6,120 Two Agreed -Upon Procedures Reviews, Annually (1) 19,040 19,610 20,200 20,805 Maximum Not -to -Exceed Total Fee $181,260 $186,845 $192,605 $198,535 (1)The hours and fees for the agreed -upon procedures are estimated and subject to negotiation once the scope of each agreed - upon procedures are determined. The City, during the term of this agreement, may request that Consultant provide special services in accordance with the provisions of this agreement. If Consultant agrees to perform the special services, the Consultant's hourly fees to perform these services for the term of the agreement are as follows unless a lesser fee is agreed to in a separate agreement between the City and Consultant, Option Years Title FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 Partners $275 $283 $292 $300 Managers 200 206 212 219 Supervisory Staff 150 155 159 164 Staff Auditor 100 103 106 109 Clerical 60 62 64 66 Expenses: All expenses incurred by the Consultant in performing the services in accordance with this agreement are included in the above annual fee quotes. These expenses include, but are not limited to: meals and lodging, transportation, communications, report preparation, word processing, and printing, and postage. THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. Our fees are based on the timely delivery of services provided, the experience of personnel assigned to the engagement, and our commitment to meeting your deadlines. CLA understands the importance of providing our clients with value-added strategies, We propose to provide routine, proactive quarterly meetings — as part of our fee — that will allow us to review and discuss with you the impact of new accounting issues, as well as any other business issues you are facing and how they should be handled. This level and frequency of interaction will no doubt enable CLA to help you tackle challenges as they come up and take full advantage of every opportunity that presents itself. We have found overthe years that our clients don't like fee surprises. Neither do we. We commit to you, as we do all of our clients, that: • We will be available for brief routine questions at no additional charge, a welcome investment in an on- going relationship. • Like most firms, we are investing heavily in technology to enhance the client experience, protect our data environment, and deliver quality services. We believe our clients deserve clarity around our t technology and client support fee, and we will continue to be transparent with ourfee structure. • Any additional charges not discussed in this proposal will be mutually agreed upon up front. • We will always be candid and fair in our fee discussions, and we will avoid surprises. b. Billing for supplemental services It is not our policy or practice to bill our clients every time we receive a phone call. In the course of providing our services to you, we will regularly consult with you regarding accounting, financial reporting, and significant business issues. If a specific project is complex or requires significant time or resources, we will discuss the scope of the project and its fee with you first to make sure there are no surprises. While it is difficult to establish an exact policy for billing in these situations, we commit to discussing the request with you in advance of. performing our services if we believe the time requirement to provide you the desired assistance is other than routine. We will discuss the scope of the project and our estimate to complete it prior to commencing work. We have a 24to 48-hour response policy to return calls and emails from our clients to provide effective and timely communication. If the person you need to talk to is not available at the time you call, we will contact him/her and have him/her get back to you. We have a number of qualified professionals on our staff who can provide you with timely and competent assistance. Our last word on fees — we are committed to serving you. Therefore, if fees are a deciding factor in your selection of an accounting firm, we would appreciate the opportunity to discuss our audit plan. At CLA, it's more than just getting the job done. 6 Certifications Attachment A: References, is submitted in this proposal under the following Section 7, References. Attachments B through E: are submitted in this proposal under the Appendix. Exhibit B: Schedule of Professional Fees and Expenses, is submitted hereinabove as part of Section 5, Cost Proposal as 5a. Cost breakdown by contract year. 7 References CITY OF SANTA ANA ATTACHMENT A REFERENCES List and describe fully the contracts performed by your firm which demonstrate your ability to provide the supplies, equipment or services included in the scope of the proposal specifications. Attach additional pacies if reauired. The City reserves the right to contact each of the references listed for additional information regarding your firm's qualifications. Reference Customer Name: City of Glendale Contact Individual: Shu-Jun Li Address: �141 North r31andale. Suotp. 346 _ Phone Number: 818-551-3048 Glendale, CA 91206 Facsimile Number: Contract Amount: $111,050 Year: 2020 Description of supplies, equipment, or services provided: City, Electric and Water Enterprise Fund, ICIS and Single Audit, Reference Customer Name: City of Burbank Address: 276 East Olive Ave. Burbank, CA 91502 Contract Amount: $133,160 Contact Individual: Dino Balos Phone Number: 818-238-5518 Facsimile Number: Year: 2020 Description of supplies, equipment, or services provided: City, AQMD, Water and Utility Enterprise Fund , Measure P AUP, Investment Compliance AUP and Single Audit Reference Customer Name: City of Victorville Address: 14343 Civic Dr. Victorville, CA 92392 Contract Amount: $135.680 Contact Individual: Bobby Magee Phone Number: 7gn-955-5055 Facsimile Number: Year: Description of supplies, equipment, or services provided: City, it rnnimile wirer nistrirt. And niithern Cglifornin I ogistirs.Airport AwhnrltV Single_widif THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. RFP No. 21-024 Professional Auditing Services Page 29 of 34 8 Evidence of Financial Capacity CLA is financially stable. As one of the largest certified public accounting and consulting firms in the nation, CLA prides itself on conducting its business in a fiscally responsible manner and has built a solid fiscal foundation. We proactively plan for fiscal challenges by monitoring operation costs, controlling expenditures, reviewing, and adjusting costs, and maintaining financial reserves. While recent turmoil in certain economic sectors has created challenging conditions for all businesses, CLA remains financially strong. CLA has annual revenues in excess of $1.1 billion and employs more than 6,200 professionals at over 120 locations throughout the United States. As a privately held company we do not provide financial information outside of the company. CLA is in good standing and maintains a R&B rating of SAL 9 Insurance CliftonLarsonAilen LLP carries commercially reasonable amounts of general liability and malpractice (aka professional liability) insurance. If requested, the firm will provide a certificate of coverage for an amount specified by the City upon being engaged. Use of subcontractor We do not anticipate using any subcontractor, association, or affiliate member firm personnel on your engagement. Additional Information Additional services In addition to the services outlined in this proposal, CLA collectively offers a wide breadth of highly customized services and capabilities to meet our clients' wants and needs, including a sampling of the following: • ACA Reporting • Financial statement and forensic audits • Fraud risk assessment and investigations • Implementation assistance for complex accounting standards • Internal audit, risk assessments, and evaluations • IT security and network vulnerability assessments • Operational and financial systems consulting • Operations and performance improvement • Organizational and financial health assessment • Outsourced accounting and public administration • Self -insured medical and PBM claim audits • Strategic, business, and capital planning • Strategic, financial, and operational consulting • Training and educational seminars • Telecom cost savings assessments We pride ourselves on taking the initiative to meet each and every need of our clients, and therefore are always prepared to take on additional projects. However, independence is ourfirst concern when providing additional services. Independence can easily become impaired when providing consulting services; therefore, we do not provide any services to our audit clients beyond those allowed. If additional work is requested by the City outside of the scope of the audit, we will discuss with you our proposed fee for additional services priorto beginning the new services. Appendix Engagement team biographies Daphnie Munoz, CPA CLA (Clifton LarsonAllen LLP) Audit and Assurance Principal Irvine, California Profile 714-795-5474 daphnie.rnunoz@CLAconnect.com Daphnie is an assurance principal at our CLA's Irvine office, formerly White Nelson Diehl Evans LLP (WNDE). She joined the White Nelson Diehl Evans LLP in 1998. She earned her CPA designation in 2001 and became an Audit and Assurance Principal in 2011. A key figure in the firm's Government Audit Practice, Daphnie works closely with Government entities to provide thorough attestation services, including single audits. She has extensive experience with a wide range of local government related audit engagements, including cities, successor agencies/redevelopment agencies, federal grants, special districts, compliance audits and agreed -upon procedures engagements. Daphnie lives in Fullerton with her husband Joe, and their two sons. In her free time, she enjoys spending time with her family. Technical, service, and industry experience • Government entities, including nonprofits and special districts Education and professional involvement • Bachelor of science in accounting from De La Salle University, Manila • Certified Public Accountant in the state of California • American Institute of Certified Public Accountants (AICPA), member • California Society of Certified Public Accountants (CaICPA), member • California Society of Municipal Finance Officers (CSMFO), member • Government Finance Officers Association (GFOA), member Local government experience Cities: • Cerritos • Colton • Del Mar • Filmore • Glendale • Hesperia Special Districts: • El Toro Water District • Fairbanks Community Services District • Grossmont Healthcare District • Heber Public Utilities District • Midway City Sanitary District • Placentia Library District • Lake Forest • Palos Verdes Estates • Lancaster • Pico Rivera • Murrieta • Torrance • Rancho Santa Fe Community Services District • Valley Wide Recreation and Park District • Vista Irrigation District • Whispering Palms Community Services District • Yorba Linda Water District Kassie Rademacher,, CPA, CFE CLA (CliftonLarsonAilen LI_P) Principal 714-795-5382 Irvine, California kassie.radermacher@CLAconnect.com Profile Kassie is a principal at CLA's Irvine office, formerly White Nelson Diehl Evans (WNDE). She has been practicing public accounting since 2005 and joined the firm in 2009 where she currently serves in the audit department. She is skilled in performing all phases of local governmental audits including cities, special districts, successor/redevelopment agencies, single audit of federal grants, compliance audits and agreed -upon procedures engagements. As an audit and assurance principal, Kassie is involved with planning the audit, performing fieldwork for all aspects of the audit, supervising staff accountants and preparing financial statements. Technical experience • Local government, including cities and special districts Education and professional involvement • Bachelor's degree in forensic science with an emphasis in crime scene analysis from West Virginia University • Master of professional accountancy from West Virginia University • Certified Public Accountant in the states of California and Virginia • Certified Fraud Examiner • American Institute of Certified Public Accountants (AICPA), member • Association of Certified Fraud Examiner, member • California Society of Municipal Finance Officers (CSMFO), member • California Society of Certified Public Accountants (CalCPA), member Local government experience Cities: • La Canada Flintridge • Laguna Beach Special Districts: • San Juan Capistrano • Santa Ana • Casitas Municipal Water District • Mesa Water District • Midway City Sanitary District • Orange County Mosquito & Vector Control District • Orange County Water District • Public Cable Television Authority • Stanton • West Hollywood • Laguna Hills • Victorville • Westminster • Serrano Water District • Western Municipal Water District • Western Riverside County Regional Wastewater Authority • Westside Cities Council of Governments • Yorba Linda Water District Robert Perl, CPA CLA (CliftonLarsonAllen LLP) Manager Irvine, California Profile 714-795-5458 rob.perl@CLAconnect.com Rob is an assurance manager at CLA's Irvine office, formerly White Nelson Diehl Evans (WNDE). He has more than 14 years of experience in performing audits and consultations for government agencies and non-profit organizations, including single audits. He is also well versed in data analytics and cybersecurity forfinance and accounting. His diverse client base includes organizations in the non-profit, governmental, financial services, manufacturing, distribution, and agriculture industries. Technical experience • Local government agencies, including cities, nonprofits, and special districts • Financial services • Manufacturing and distribution • Agriculture • Data analytics • Cybersecurity for finance and accounting Education and professional involvement • Bachelorof accounting from Brigham Young University, Laie, Hawaii • American Institute of Certified Public Accountants (AICPA), member • California Society of Certified Public Accountants (CaICPA), member Local government experience Cities: • Burbank • Lancaster • Santa Ana • Gilroy • Murrieta • Victorville Special District. • Monterey Peninsula Regional Park District Additionally, Mr. Perl also served as the senior audit manager on the following nonprofit audits during 2019. Nonprofit Entities: • Catholic Charities of Orange County, Inc. • United Cerebral Palsy Association of Orange County • Child Abuse Prevention Center • Orange County Council, Boy Scouts of America • YMCA of Orange County Nicole Racine, CPA CLA (CliftonLarsonAllen LLP) Senior 714-795-5357 Irvine, California nicole.racine@CLAconnect.com Profile Racine is a senior at CLA's Irvine office, formerly White Nelson Diehl Evans (WNDE). She been with the firm since 2017. Racine has performed all phases of audits including cities, single audit of federal grants, special districts, compliance audits, and agreed - upon procedures engagements. She has been involved with planning the audit, performing fieldwork for all aspects of the audit, and preparing financial statements. Technical experience • Local government, including cities and special districts Education and professional involvement • Bachelor of art from California State University, Fullerton • Certified Public Accountant in the state of California • American Institute of Certified Public Accounts (AICPA), member • California Society of Certified Public Accountants (CaICPA), member Local government experience Cities: • Chino • Monterey Park • Tustin • Del Mar • Palos Verdes Estates Special Districts: • Coachella Valley Water District • Laguna Beach County Water District James P. Kreiser, CISA, CRMA CFSA CLA (CliftonLarsonAllen LLP) Principal, Business Risk and IT Services Phone 717-5SS-0860 Harrisburg, Pennsylvania james.kreiser@CLAconnect.com Profile Jim is a principal in the Clifton LarsonAllen LLP (CLA) specialized advisory services group. He has 22 years of professional services experience in providing consulting and advisory services. Jim spent 10 years of his experience working at a Big 4 firm in their business risk and technical risk services groups. His experience also includes internal audit roles at CitiBank, AMP, and Capital BlueCross. Jim has held roles of chief risk officer, general auditor, and others. His focus has primarily been in the governmental sector, health care, and financial institutions. At CLA, Jim has focused on clients particularly on consulting, IT, internal audit, and third -party reporting services. Some of the key clients Jim has focused on include the Pennsylvania State System of Higher Education, Commonwealth of Pennsylvania, State of Rhode Island, Maryland Department of Budget and Management, West Virginia Higher Education Policy Commission, State of Delaware, Haverford College, California Housing Finance Agency, Washington State Department of Transportation, Maryland Transportation Authority, and many others. Technical experience Jim's experience includes managing and leading projects, which include engagements related to outsourced and co -sourced internal auditing, IT audit, third -party reviews and performance audits, enterprise risk management processes, IT security and auditing services, SSAE 16 reporting (SOC 1 and SOC2), operational improvements, process solutions and implementation for those solutions across the organization. His primary focus for the firm is in the Public Sector Group (State and Local Government, Higher Education, and Non -Profit organizations). His service experience is business risk, IT, and internal audit services. Specific experience includes, but is not limited to, the following: • Internal audit outsourcing and co -sourcing, including information technology, financial, performance audits, and operational audits. • IT security and risk consulting • Enterprise -wide risk assessments. • IIA Quality Assurance Reviews (QAR) • Vendor management and Implementation Assessment • Compliance related activities and benchmarking • Presentations and Training; including speaking at various conferences/professional organizations on IT controls, Security, ERM, and third -party reporting, and risk management. Education and professional involvement • Bachelor of science, Carnegie Mellon University —Pittsburgh, Pennsylvania o BS of managerial economics a BS of philosophy • Certified Information Systems Auditor • Certified in Risk Management Assurance • Certified Financial Services Auditor CLAconnect.com WEALTH ADVISORY I OUTSOURCING I AUDIT, TAX, AND CONSULTING w A member of Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, Nexia International an SEC -registered investment advisor. Attachments B through E CITY OF SANTA ANA ATTACHMENT B PROPOSER'S STATEMENT Proposer understands and agrees that this written RFP (or any part thereof specifically designated and accepted by the City of Santa Ana, hereinafter City) shall constitute the entire agreement between proposer and the City only after it has been accepted by the City Council, endorsed by the Clerk of the Council with her signature and official seal noting hereon the action of approval of the Council, signed by the Executive Director or his duly authorized agent, and signed by the City Attorney, denoting his approval of the form of this document, and its execution, and when it or an exact copy of it has been either delivered to proposer or deposited with the United States Postal Service properly addressed to the proposer with the correct postage affixed thereto. Proposer further agrees that upon delivery (as defined above) of the accepted agreement he/she will furnish City all required bonds and certificate of liability insurance within ten (10) days (excluding Saturdays, Sundays and City's legal holidays), or the funds, check, draft, or proposer's bond substituted in lieu thereof accompanying this proposal shall become the property of the City and shall be considered as payment of damages due to the delay and other causes suffered by City because of the failure to furnish the necessary bonds and because it is distinctly agreed that the proof of damages actually suffered by City is difficult to ascertain; otherwise said funds, check drafts, or proposer's bond substituted in lieu thereof shall be returned to the undersigned. Proposer understands that a proposal is required for the entire work, that the estimated quantities set forth in the RFP schedule are solely for the purpose of comparing proposals, and that final compensation under the contract will be based upon the actual quantities of work satisfactorily completed. All terms contained in the specifications, the certification of nondiscrimination by contractors, and the required insurance certificates are to be incorporated by reference into this agreement and are made specifically as part of this RFP. Firm Clifton LarsonAllen LLP Signed and Printed Name; Title Prilld Date March 15, 2021 M Daphnis Munoz, CP THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. RFP No. 21-024 Professional Auditing Services Page 30 of 34 CITY OF SANTA ANA ATTACHMENT D NON -LOBBYING CERTIFICATION The prospective participant certifies, by signing and submitting this bid or proposal, to the best of his or her knowledge and belief, that: (1) No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. (2) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an offiiceror employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Farm-LLL, "Disclosure of Lobbying Activities," in conformance with its instructions. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. The prospective participant also agrees by submitting his or her bid or proposal that he or she shall require that the language of this certification be included in all lower tier subcontracts, which exceed $100,000 and that all such subreciplents shall certify and disclose accordingly. Signed: Title: Principal Firm: ClihonLarsonAllcn LLP Date: March 15, 202 i THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. RFP No. 21-024 Professional Auditing Services Page 32 of 34 (9) CITY OF SANTA ANA ATTACHMENT E NON-DISCRIMINATION CERTIFICATION The undersigned consultant or corporate officer, during the performance of this contract, certifies as follows: The Consultant shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. The Consultant shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment without, regard to their race, color, religion, sex, or national origin. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Consultant agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause. 2. The Consultant shall, in all solicitations or advertisements for employees placed by or on behalf of the Consultant, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin. 3. The Consultant shall send to each labor union or representative of workers vuith which he/she has a collective bargaining agreement or other contract or understanding, a notice to be provided advising the said labor union or workers' representatives of the Consultant's commitments under this section, and shall post copies of the notice in conspicuous places available to employees and applicants for employment. 4. The Consultant shall comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor. 5. The Consultant shall furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his/her books, records, and accounts by the administering agency and the Secretary of Labor for purposes of investigation, to ascertain compliance with such rules, regulations, and orders. 6. In the event of the Consultant's non-compliance with the nondiscrimination clauses of this contract or with any of the said rules, regulations, or orders, the contract may be canceled, terminated, or suspended in whole or in part and the Consultant may be declared ineligible for further Government contracts or federally assisted construction contracts In accordance with procedures authorized in Execution Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or by rule, regulations, or order of the Secretary of Labor, or as otherwise provided by law. RFP No. 21-024 Professional Auditing Services Page 33 of 34 (9) CITY OF SANTA ANA The Consultant shall include the portion of the sentence immediately preceding paragraph (1) and the provisions of paragraphs (1) through (7) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to Section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontract or purchase order as the administering agency may direct as means of enforcing such provisions, including sanctions for noncompliance; provided, however, that in the event the Consultant becomes involved in, or is threatened with, litigation with a subconsullant or vendor as a result of such direction by the administering agency, the Consultant may request that the United States enter into such litigation to protect the interests of the United States. Pursuant to California Labor Code Section 1735, as added by Chapter 643 Stats. 1939, and as amended, no discrimination shall be made in the employment of persons upon public works because of race, religious creed, color, national origin, ancestry, physical handicaps, mental condition, marital status, or sex of such persons, except as provided in Section 1420, and any consultant of public works violating this Section is subject to all the penalties imposed for a violation of the Chapter. Signed: Ll)., a14u¢_ M wn,az / Title: principal Firm: (A ifto nLarso n Allen 111' Dale: March 15.2021 THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL, PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. RFP No. 21-024 Professional Auditing Services Page 34 of 34 A member of Investmentadvisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, Nexia an 5EC-registered investment advisor. I CliftonLarsonAllen LLP International