HomeMy WebLinkAboutItem CSEA( Bti
AGENDA STAFF REPORT t
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DATE: ,February 13, 2017
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, City Manager
FROM: Victoria L. Beatley, Director of Finance /City Treasurer
SUBJECT: AGREEMENT FOR ANNUAL AUDITING SERVICES
SUMMARY OF REQUEST:
That the City Council adopt Resolution No. 6712 approving the agreement for
annual auditing services between The Pun Group and the City of Seal Beach for
three consecutive years, beginning with the fiscal year ending June 30, 2017 and
authorize the City Manager to execute the agreement.
BACKGROUND AND ANALYSIS:
The City of Seal Beach is required to have an audit of their financial records
completed each year. It is City practice to go out for bid for these services every
three to five years. On December 07, 2016, the City issued a Request for
Proposal (RFP) for annual auditing services that was sent to fifteen firms.
In response to the City's RFP, proposals were received from three highly
qualified accounting firms. The following is a recap of the bids received:
Staff reviewed the proposals and disqualified Teaman, Ramirez and Smith as
they did not comply with the requirements of the RFP. Staff then invited The Pun
Group to an interview with an internal rating Committee. Both firms were then
invited to an interview with the Audit Committee:
Agenda Item C
Teaman,
The Pun
White Nelson
Ramirez and
Group
Diehl Evans
Smith
FY 16/17
48,500
47,130
50,500
FY 17/18
49,470
48,075
51,250
FY 18/19
50,459
49,040
52,000
Totals
$148,429
$144,245
$153,750
Staff reviewed the proposals and disqualified Teaman, Ramirez and Smith as
they did not comply with the requirements of the RFP. Staff then invited The Pun
Group to an interview with an internal rating Committee. Both firms were then
invited to an interview with the Audit Committee:
Agenda Item C
The firm of The Pun Group is a local firm whose business primarily consists of
governmental auditing and related services. They participate in and conduct
formal education and training for their clients. The proposed audit team far
exceeds this requirement for governmental accounting and auditing training.
Their references include many large and small governmental entities throughout
the state. The Pun Group prides themselves on their "talented and experienced
team of professionals" which hasithe ability to meet all deadlines and provide
assistance to staff through -out the year.
The firm of White Nelson Diehl Evans LLP is one of the largest National CPA firm
whose Irvine office has focused on governmental auditing for the past 85 years.
The firm, and all of their certified personnel, are properly licensed to practice
public accounting in California. White Nelson Diehl Evans LLP has extensive
experience in providing auditing, accounting and consulting services in the
government sector.
After careful consideration, staff and the Audit Committee are recommending The
Pun Group to perform annual auditing services fiscal years 2016/17, 2017/18,
and 2018/19. The Professional Services Agreement also allows for two
additional one year extensions. The Pun Group is a highly respected firm within
the field of government accounting and auditing. They have a proven track
record as reflected by the list of accomplishments and references contained in
their proposal (page 23). Staff contacted several of the references listed on the
"Client List" in the proposal and confirmed without exception, that The Pun Group
is a highly reputable government accounting and auditing firm with exemplary
performance, experience, accountability, and creditability.
ENVIRONMENTAL IMPACT:
This action is exempt from the California Environmental Quality Act, because it is
not defined as a "project' under CEQA.
LEGAL ANALYSIS:
The City Attorney has reviewed this staff report the Professional Services
Agreement and approved them as to form.
FINANCIAL IMPACT:
The Pun Group fees for services to be provided are outlined in the attached
proposal in the amounts of $48,500 for fiscal year 2016/17, $49,470 for fiscal
year 2017/18 and $50,459 for fiscal year 2018/19. There are adequate funds in
the approved budget for annual audit services.
Page 2
RECOMMENDATION:
That the Council adopt Resolution No. 6712 approving the agreement for annual
auditing services between The Pun Group and the City of Seal Beach for three
consecutive years, beginning with the fiscal year ending June 30, 2017, and
authorize the City Manager to execute the agreement.
SUBM
Victoria L. Beatley
Director of Finance /City Trbasurer
NOTED AND APPROVED:
lam ! �4
Patrick Gallegos
Assistant City Manager
Prepared by: Alayna Hoang, Finance Manager
Attachments:
A. Resolution No. 6712
B. Agreement for Auditing Services
C. Exhibit "A" - Proposal for Auditing Services
Page 3
Attachment "A"
RESOLUTION NUMBER 6712
A RESOLUTION OF THE SEAL BEACH CITY COUNCIL
APPROVING A PROFESSIONAL SERVICES AGREEMENT FOR
THE PUN GROUP FOR ANNUAL AUDIT SERVICES
THE SEAL BEACH CITY COUNCIL DOES HEREBY RESOLVE:
Section 1. The City Council hereby approves the professional services
agreement ( "Agreement') between the City of Seal Beach and The Pun Group
for auditing services in the amount of $48,500 for fiscal year 2016/17, $49,470
for fiscal year 2017/18 and $50,459 for fiscal year 2018/19.
Section 2. The Council hereby directs the City Manager to execute the
Agreement.
PASSED, APPROVED AND ADOPTED by the Seal Beach City Council at a
regular meeting held on the 13th day of February 2017 by the
following vote:
AYES: Council Members
NOES: Council
ABSENT: Council Members
ABSTAIN: Council Mem
Sandra Massa - Lavitt, Mayor
ATTEST:
Robin L. Roberts, City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Robin L. Roberts, City Clerk of the City of Seal Beach, do hereby certify that
the foregoing resolution is the original copy of Resolution Number 6712 on file in
the office of the City Clerk, passed, approved, and adopted by the City Council at
a regular meeting held on the 13th day of February 2017.
Robin L. Roberts, City Clerk
Attachment "B"
PROFESSIONAL SERVICES AGREEMENT
Between
City of Seal Beach
211 8th Street
Seal Beach, CA 90740
THE PUN GROUP, Accountants & Advisors
200 E. Sandpointe, Suite 600
Santa Ana, CA 92707
This Professional Service Agreement ( "the Agreement') is made as of February 13,
2017 (the "Effective Date "), by and between THE PUN GROUP, Accountants &
Advisors ( "Consultant'), a California corporation, and the City of Seal Beach ( "City'), a
California charter city, (collectively, "the Parties ").
S7296- 0001 \1236808vt.doc
RECITALS
A. City desires certain professional services.
B. Consultant represents that it is qualified and able to provide City with such
services.
NOW THEREFORE, in consideration of the Parties' performance of the
promises, covenants, and conditions stated herein, the Parties hereto agree as
follows.
AGREEMENT
1.0 Scope of Services
1.1. Consultant shall provide those services ( "Services ") set forth in the
attached Exhibit A, which is hereby incorporated by this reference. To the extent
that there is any conflict between Exhibit A and this Agreement, this Agreement
shall control.
1.2. Consultant shall perform all Services under this Agreement in
accordance with the standard of care generally exercised by like professionals
under similar circumstances and in a manner reasonably satisfactory to City.
1.3. In performing this Agreement, Consultant shall comply with all
applicable provisions of federal, state, and local law.
1.4. Consultant will not be compensated for any work performed not
specified in the Scope of Services unless the City authorizes such work in
advance and in writing. The City Manger may authorize extra work to fund
unforeseen conditions up to the amount approved at the time of award by the
City Council. Payment for additional work in excess of this amount requires prior
City Council authorization.
2.0 Term
This term of this Agreement shall commence as of the Effective Date and shall
continue for a term of three years unless previously terminated as provided by
this Agreement.
3.0 Consultant's Compensation
City will pay Consultant in accordance with the hourly rates shown on the fee
schedule set forth in Exhibit A for Services but in no event will the City pay more
than $ 48,500 FY 2016 -17, $49,470 FY 2017 -18 and $50,459 FY 2018 -19 with
two years option. Option $ 51,469 FY 2019 -20, and Option $ 52,498 FY 2020-
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21. Any additional work authorized by the City pursuant to Section 1.4 will be
compensated in accordance with the fee schedule set forth in Exhibit A.
4.0 Method of Payment
4.1. Consultant shall submit to City monthly invoices for all services
rendered pursuant to this Agreement. Such invoices shall be submitted within 15
days of the end of the month during which the services were rendered and shall
describe in detail the services rendered during the period, the days worked,
number of hours worked, the hourly rates charged, and the services performed
for each day in the period. City will pay Consultant within 30 days of receiving
Consultant's invoice. City will not withhold any applicable federal or state payroll
and other required taxes, or other authorized deductions from payments made to
Consultant.
4.2. Upon 24 -hour notice from City, Consultant shall allow City or City's
agents or representatives to inspect at Consultant's offices during reasonable
business hours all records, invoices, time cards, cost control sheets and other
records maintained by Consultant in connection with this Agreement. City's
rights under this Section 4.2 shall survive for two years following the termination
of this Agreement.
5.0 Termination
5.1. This Agreement may be terminated by City, without cause, or by
Consultant based on reasonable cause, upon giving the other parry written notice
thereof not less than 30 days prior to the date of termination.
5.2. This Agreement may be terminated by City upon 10 days' notice to
Consultant if Consultant fails to provide satisfactory evidence of renewal or
replacement of comprehensive general liability insurance as required by this
Agreement at least 20 days before the expiration date of the previous policy.
6.0 Party Representatives
6.1. The City Manager is the City's representative for purposes of this
Agreement.
6.2. Kenneth H. Pun is the Consultant's primary representative for
purposes of this Agreement.
7.0 Notices
7.1. All notices permitted or required under this Agreement shall be
deemed made when personally delivered or when mailed 48 hours after deposit
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in the United States Mail, first class postage prepaid and addressed to the party
at the following addresses:
To City: City of Seal Beach
211 8th Street
Seal Beach, California 90740
Attn: City Manager
To Consultant: The Pun Group, Accountants & Advisors
200 E. Sandpointe, Suite 600 Santa
Ana, CA 92707
Attn: Kenneth H. Pun
7.2. Actual notice shall be deemed adequate notice on the date actual
notice occurred, regardless of the method of service.
8.0 Independent Contractor
8.1. Consultant is an independent contractor and not an employee of
the City. All services provided pursuant to this Agreement shall be performed by
Consultant or under its supervision. Consultant will determine the means,
methods, and details of performing the services. Any additional personnel
performing services under this Agreement on behalf of Consultant shall also not
be employees of City and shall at all times be under Consultant's exclusive
direction and control. Consultant shall pay all wages, salaries, and other
amounts due such personnel in connection with their performance of services
under this Agreement and as required by law. Consultant shall be responsible
for all reports and obligations respecting such additional personnel, including, but
not limited to: social security taxes, income tax withholding, unemployment
insurance, disability insurance, and workers' compensation insurance.
8.2. Consultant shall indemnify and hold harmless City and its elected
officials, officers, employees, servants, designated volunteers, and agents
serving as independent contractors in the role of City officials, from any and all
liability, damages, claims, costs and expenses of any nature to the extent arising
from Consultant's personnel practices. City shall have the right to offset against
the amount of any fees due to Consultant under this Agreement any amount due
to City from Consultant as a result of Consultant's failure to promptly pay to City
any reimbursement or indemnification arising under this Section.
9.0 Subcontractors
No portion of this Agreement shall be subcontracted without the prior written
approval of the City. Consultant is fully responsible to City for the performance of
any and all subcontractors.
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10.0 Assignment
Consultant shall not assign or transfer any interest in this Agreement whether by
assignment or novation, without the prior written consent of City. Any purported
assignment without such consent shall be void and without effect.
11.0 Insurance
11.1. Consultant shall not commence work under this Agreement until it
has provided evidence satisfactory to the City that Consultant has secured all
insurance required under this Section. Consultant shall furnish City with original
certificates of insurance and endorsements effecting coverage required by this
Agreement on forms satisfactory to the City. The certificates and endorsements
for each insurance policy shall be signed by a person authorized by that insurer
to bind coverage on its behalf, and shall be on forms provided by the City if
requested. All certificates and endorsements shall be received and approved by
the City before work commences. The City reserves the right to require
complete, certified copies of all required insurance policies, at any time.
11.2. Consultant shall, at its expense, procure and maintain for the
duration of the Agreement, insurance against claims for injuries to persons or
damages to property that may arise from or in connection with the performance
of this Agreement. Insurance is to be placed with insurers with a current A.M.
Best's rating no less than A: VIII, licensed to do business in California, and
satisfactory to the City. Coverage shall be at least as broad as the latest version
of the following: (1) General Liability: Insurance Services Office Commercial
General Liability coverage (occurrence form CG 0001); (2) Automobile Liability:
Insurance Services Office Business Auto Coverage form number CA 0001, code
1 (any auto); and, if required by the City, (3) Professional Liability. Consultant
shall maintain limits no less than: (1) General Liability: $2,000,000 per
occurrence for bodily injury, personal injury and property damage and if
Commercial General Liability Insurance or other form with a general aggregate
limit is used, either the general aggregate limit shall apply separately to this
Agreement/location or the general aggregate limit shall be twice the required
occurrence limit; (2) Automobiie Liability: $1,000,000 per accident for bodily injury
and property damage; and (3) Professional Liability: $1,000,000 per
claim /aggregate.
11.3. The insurance policies shall contain the following provisions, or
Consultant shall provide endorsements on forms supplied or approved by the
City to state: (1) coverage shall not be suspended, voided, reduced or canceled
except after 30 days prior written notice by certified mail, return receipt
requested, has been given to the City; (2) any failure to comply with reporting or
other provisions of the policies, including breaches of warranties, shall not affect
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coverage provided to the City, its directors, officials, officers, (3) coverage shall
be primary insurance as respects the City, its directors, officials, officers,
employees, agents and volunteers, or if excess, shall stand in an unbroken chain
of coverage excess of the Consultant's scheduled underlying coverage and that
any insurance or self- insurance maintained by the City, its directors, officials,
officers, employees, agents and volunteers shall be excess of the Consultant's
insurance and shall not be called upon to contribute with it; (4) for general liability
insurance, that the City, its directors, officials, officers, employees, agents and
volunteers shall be covered as additional insureds with respect to the services or
operations performed by or on behalf of the Consultant, including materials, parts
or equipment furnished in connection with such work; and (5) for automobile
liability, that the City, its directors, officials, officers, employees, agents and
volunteers shall be covered as additional insureds with respect to the ownership,
operation, maintenance, use, loading or unloading of any auto owned, leased,
hired or borrowed by the Consultant or for which the Consultant is responsible.
11.4. All insurance required by this Section shall contain standard
separation of insureds provisions and shall not contain any special limitations on
the scope of protection afforded to the City, its directors, officials, officers,
employees, agents, and volunteers.
11.5. Any deductibles or self- insured retentions shall be declared to and
approved by the City. Consultant guarantees that, at the option of the City,
either: (1) the insurer shall reduce or eliminate such deductibles or self- insured
retentions as respects the City, its directors, officials, officers, employees,
agents, and volunteers; or (2) the Consultant shall procure a bond guaranteeing
payment of losses and related investigation costs, claims and administrative and
defense expenses.
12.0 Indemnification, Hold Harmless, and Duty to Defend
Consultant shall defend, indemnify, and hold the City, its officials, officers,
employees, volunteers and agents serving as independent contractors in the role
of city officials (collectively "Indemnitees ") free and harmless from any and all
claims, demands, causes of action, costs, expenses, liability, loss, damage or
injury, in law or equity, to property or persons, including wrongful death, in any
manner arising out of or incident to any acts or omissions of Consultant, its
employees, or its agents in connection with the performance of this Agreement,
including without limitation the payment of all consequential damages and
attorneys' fees and other related costs and expenses, except for such loss or
damage arising from the sole negligence or willful misconduct of the City. With
respect to any and all such aforesaid suits, actions, or other legal proceedings of
every kind that may be brought or instituted against Indemnitees, Consultant
shall defend Indemnitees, at Consultant's own cost, expense, and risk, and shall
pay and satisfy any judgment, award, or decree that may be rendered against
Indemnitees. Consultant shall reimburse City and its directors, officials, officers,
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employees, agents and /or volunteers, for any and all legal expenses and costs
incurred by each of them in connection therewith or in enforcing the indemnity
herein provided. Consultant's obligation to indemnify shall not be restricted to
insurance proceeds, if any, received by Consultant, the City, its directors,
officials, officers, employees, agents or volunteers. All duties of Consultant
under this Section shall survive termination of this Agreement.
13.0 Equal Opportunity
Consultant affirmatively represents that it is an equal opportunity employer.
Consultant shall not discriminate against any subcontractor, employee, or
applicant for employment because of race, religion, color, national origin,
handicap, ancestry, sex, sexual orientation, or age. Such non - discrimination
includes, but is not limited to, all activities related to initial employment,
upgrading, demotion, transfer, recruitment or recruitment advertising, layoff, or
termination.
14.0 Labor Certification
By its signature hereunder, Consultant certifies that it is aware of the provisions
of Section 3700 of the California Labor Code that require every employer to be
insured against liability for Workers' Compensation or to undertake self- insurance
in accordance with the provisions of that Code, and agrees to comply with such
provisions before commencing the performance of the Services.
15.0 Entire Agreement
This Agreement contains the entire agreement of the parties with respect to the
subject matter hereof, and supersedes all prior negotiations, understandings, or
agreements. This Agreement may only be modified by a writing signed by both
parties.
16.0 Severability
The invalidity in whole or in part of any provisions of this Agreement shall not
void or affect the validity of the other provisions of this Agreement.
17.0 Governing Law
This Agreement shall be governed by and construed in accordance with the laws
of the State of California.
18.0 No Third Party Rights
No third party shall be deemed to have any rights hereunder against either party
as a result of this Agreement.
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19.0 Waiver
No waiver of any default shall constitute a waiver of any other default or breach,
whether of the same or other covenant or condition. No waiver, benefit, privilege,
or service voluntarily given or performed by a party shall give the other party any
contractual rights by custom, estoppel, or otherwise.
20.0 Prohibited Interests; Conflict of Interest
20.1. Consultant covenants that it presently has no interest and shall not
acquire any interest, direct or indirect, which may be affected by the Services, or
which would conflict in any manner with the performance of the Services.
Consultant further covenants that, in performance of this Agreement, no person
having any such interest shall be employed by it. Furthermore, Consultant shall
avoid the appearance of having any interest, which would conflict in any manner
with the performance of the Services. Consultant shall not accept any
employment or representation during the term of this Agreement which is or may
likely make Consultant "financially interested" (as provided in California
Government Code § §1090 and 87100) in any decision made by City on any
matter in connection with which Consultant has been retained.
20.2. Consultant further warrants and maintains that it has not employed
or retained any person or entity, other than a bona fide employee working
exclusively for Consultant, to solicit or obtain this Agreement. Nor has
Consultant paid or agreed to pay any person or entity, other than a bona fide
employee working exclusively for Consultant, any fee, commission, gift,
percentage, or any other consideration contingent upon the execution of this
Agreement. Upon any breach or violation of this warranty, City shall have the
right, at its sole and absolute discretion, to terminate this Agreement without
further liability, or to deduct from any sums payable to Consultant hereunder the
full amount or value of any such fee, commission, percentage or gift.
20.3. Consultant warrants and maintains that it has no knowledge that
any officer or employee of City has any interest, whether contractual, non -
contractual, financial, proprietary, or otherwise, in this transaction or in the
business of Consultant, and that if any such interest comes to the knowledge of
Consultant at any time during the term of this Agreement, Consultant shall
immediately make a complete, written disclosure of such interest to City, even if
such interest would not be deemed a prohibited "conflict of interest' under
applicable laws as described in this subsection.
21.0 Attorneys' Fees
If either parry commences an action against the other party, legal, administrative
or otherwise, arising out of or in connection with this Agreement, the prevailing
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party in such litigation shall be entitled to have and recover from the losing party
all of its attorneys' fees and other costs incurred in connection therewith.
22.0 Exhibits
All exhibits referenced in this Agreement are hereby incorporated into the
Agreement as if set forth in full herein. In the event of any material discrepancy
between the terms of any exhibit so incorporated and the terms of this
Agreement, the terms of this Agreement shall control.
23.0 Corporate Authority
The person executing this Agreement on behalf of Consultant warrants that he or
she is duly authorized to execute this Agreement on behalf of said Party and that
by his or her execution, the Consultant is formally bound to the provisions of this
Agreement.
IN WITNESS WHEREOF, the Parties hereto, through their respective authorized
representatives have executed this Agreement as of the date and year first
above written.
CITY OF SEAL BEACH CONSULTANT
M
Attest:
M
Jill R. Ingram, City Manager
Robin L. Roberts, City Clerk
By:
Name:
Its:
By:
Approved as to Form: Its:
0
Craig A. Steele, City Attorney
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Attachment "C"
PROPOSAL
CITY OF SEAL BEACH
SEAL BEACH, CALIFORNIA
Proposal to Perform Professional Auditing Services
For the three (3) fiscal years beginning with Fiscal Year Ending June
with the option to renew for two (2) additional fiscal years
DECEMBER 22, 2016
Kenneth H. Pun, CPA, CGMA
Managing Partner
200 East Sandpointe Avenue, Suite 600, Santa Ana, CA 92707
Phone: (949) 777 -8801 1 Fax: (949) 777 -8850 1 Email: ken.pun @pungroup.com
California CPA License Number: PAR 7601
Federal Identification Number: 46- 4016990
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
TABLE OF CONTENTS
Letterof Transmittal ...................................................................................................................... ............................... 1
Section I — License to Practice in California ................................................................................ ...............................
3
SectionII — Independence ........................................................................................................... ...............................
3
Section III — Firm Qualifications and Experience ......................................................................... ...............................
4
AboutThe Pun Group, LLP ............................................................................................... ..............................4
StaffConsistency ............................................................................................................. ...............................
4
Other Services Offered by the Firm ................................................................................. ...............................
5
Local Office's Information Technology (IT) Audit Capabilities ......................................... ...............................
5
Firm's Municipal Clients ................................................................................................... ...............................
6
Most Recent External Quality Control Review ................................................................. ...............................
10
Federalor State Desk Review ......................................................................................... ...............................
11
DisciplinaryAction ............................................................................................................ ...............................
11
Section IV — Partner, Supervisory and Staff Qualifications and Experience ............................... ...............................
12
ProposedEngagement Team .......................................................................................... ...............................
12
QualityControl System... ................................................................................................................................
14
ProfessionalDevelopment ............................................................................................... ...............................
14
EngagementTeam Resumes .......................................................................................... ...............................
14
Section V — Similar Engagements with Other Government Entities ............................................ ...............................
23
SectionVI — Specific Audit Approach .......................................................................................... ...............................
25
Scopeof Work ................................................................................................................. ...............................
25
Reportsto be Issued ........................................................................................................ ...............................
26
Working Paper Retention and Access to Working Papers .............................................. ...............................
26
Objectiveof Our Services ................................................................................................ ...............................
26
Proposed Segmentation of the Engagement and Timeline ............................................. ...............................
27
Level of Staff and Number of Hours to be Assigned to Each Proposed Segment of the Engagement..........
27
Sample Size and the Extent to Which Statistical Sampling is to be Used in this Engagement ......................
28
Type and Extent of Analytical Procedures to be Used in the Engagement ..................... ...............................
28
Approach to be Taken to Gain and Document an Understanding of the City's Internal Control Structure ....
29
Approach to be Taken in Determining Laws and Regulations that will be Subject to Audit Test Work..........
29
Approach to be Taken in Drawing Audit Samples for Purposes of Tests of Compliance ..............................
29
GASB tmplementation Specialist ..................................................................................... ...............................
29
ClientTraining Seminar ................................................................................................... ...............................
30
Section VII — Identification of Anticipated Potential Audit Problems ............................................ ...............................
31
SectionVIII — Cost Proposal ......... : .................................. ...........................................................................................
32
Certification...................................................................................................................... ...............................
32
Total All-inclusive Maximum Price ................................................................................... ...............................
32
Out of Pocket Expenses in the Total Maximum Price and Reimbursement Rates ......... ...............................
33
Rates for Additional Professional Services ...................................................................... ...............................
33
Mannerof Payment .......................................................................................................... ...............................
33
Benefits of Choosing The Pun Group, LLP ................................................................................... ...............................
34
Thankyou ..................................................................................................................................... ...............................
34
Appendix:
Proofof Insurance ............................................................................................................ ............................... 37
THE 'mot
PUN GROUP
ACCOUNTANTS & ADVISORS
December 22, 2016
City of Seal Beach
Ms. Robin L. Roberts I City Clerk
211 8th Street
Seal Beach, California 90740
Dear Ms. Robin L. Roberts :
Please allow us to introduce our Firm and share our qualifications and proposed audit plan for the City of Seal
Beach (the "City ") pursuant to your Request for Proposal for Professional Auditing Services for the three (3) fiscal
years beginning with Fiscal Year Ending June 30, 2017, with the option to renew for two (2) additional fiscal years.
The Pun Group, LLP (the "Firm "), has the knowledge and experience necessary to become the City's next public
accounting firm, and the work plan to ensure a smooth audit process.
This letter is an acknowledgement of the Firm's understanding of the work to be performed. We hereby offer our
commitment to perform all of the required work, complete the audit, and issue the necessary auditor's
report within the time periods outlined by the City. We are secure in affirming our commitment because we
have:
1. A lengthy legacy of serving California cities
2. Prodigious experience serving governmental entities
3. An efficient, lower -cost approach to auditing that focuses on high -risk areas
I will serve as your primary contact for contract negotiations. I am the managing partner of the Firm and have been
authorized to legally bind the Firm. My contact information follows:
Name: Mr. Kenneth H. Pun, CPA, CGMA
Position: Managing Partner
Address: 200 East Sandpointe Avenue, Suite 600
Santa Ana, California 92707
Telephone: (949) 777 -8801
Email: ken.pun @pungroup.com
You may also contact the following partner, who is authorized to represent the Firm:
Name:
Mr. Gary M. Caporicci, CPA, CGFM, CFF
Position:
Partner
Address:
200 East Sandpointe Avenue, Suite 600
Santa Ana, California 92707
Telephone:
(949) 777 -8802
Email:
gary.caporicci @pungroup.com
The Pun Group is the right choice for the City of Seal Beach because we are experienced and focused in your
industry.
• We have audited and consulted many California cities.
• We have assisted many clients in earning the GFOA Certificate of Achievement for Excellence in Financial
Reporting.
200 East Sandpointe Avenue, Suite 600, Santa Ana, California 92707
Tel: 949 - 777 -8800 -Toll Free: 855- 276 -4272 • Fax: 949 - 777 -8850
www.pungroup.com
City of Seal Beach
Ms. Robin L. Roberts I City Clerk
Page 2
• Our depth of resources and specific government experience are substantial, and we are committed to
deploying these resources and our experience on behalf of the City. Simply put, the City will become one of
our most important clients, and will receive the priority service it deserves.
• We have assigned Gary Caporicci, our GASB Implementation Specialist, who is appointed to the State
Retirement Advisory Committee by the State Controller, in assisting the City in the implementation of
GASB's new standards.
Our goal for this audit is to complete the process in accordance with regulations while minimizing disruption to the
City's daily operations. The Firm will:
• Take advantage of its solid familiarity with the City's operations.
• Create a detailed audit plan during initial stages of the audit.
• Maintain an open communication line between the Engagement Team and the City's Management.
Assign duties to qualified staff members.
This method ensures that the audit process will be performed steadily, communicated clearly, and completed
efficiently.
The Firm is an Equal Opportunity Employer and complies with all Federal and State hiring requirements.
This proposal meets the requirements of the City's Request for Proposal. This letter and the accompanying
proposal represent a firm and irrevocable offer valid for a period of 90 days.
Proof of current General Liability, Business Auto Liability, Professional Liability, and Workers' Compensation
insurance can be found at the Appendices section under this proposal. We will provide a copy of our Certificate of
Insurance with coverages and amounts specified in the contract with the City within 10 calendar days after the
notice of contract award.
Also, upon the notice of contract award the Firm will obtain a valid Business License with the City of Seal Beach.
If you have any questions about the proposal or the Firm, do not hesitate to contact us. We look forward to
speaking with you.
Sincerely,
The Pun Group, LLP
Certified Public Accountants and Business Advisors
Kenneth H. Pun, CPA, CGMA
Managing Partner
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
SECTION I — LICENSE TO PRACTICE IN CALIFORNIA
The Firm and all key professional staff are licensed by the State of California to practice as Certified Public
Accountants, and meet the Continuing Professional Education requirements under U.S. GAO's Government
Auditing Standards to perform the proposed audits.
California
Pursuard to the provWone
California
Mai Mika F
11 Accountancy
3 of the Business and Professions Cade: the firm of
SECTION II — INDEPENDENCE
The Pun Group, LLP (the "Firm') requires all employees to adhere to strict independence standards in relation to
the Firm's clients. These independence standards exceed, in many instances, the standards promulgated by the
American Institute of Certified Public Accountants (AICPA).
The Pun Group, LLP certifies that it is independent of the City of Seal Beach (the "City ") and the Successor
Agency to Seal Beach Redevelopment Agency (the "Agency "). The Firm meets independence requirements
defined by the United States Government Accountability Office's (U.S. GAO's) Government Auditing Standards,
and the American Institute of Certified Public Accountants (AICPA).
The Firm will give the City of Seal Beach written notice of any professional relationships entered into during the
period of the agreement.
THE PUN GROUP; LP ='
�.
tered end! ce as a Memhlp of
Is duty regiand entered to vac6 pe
..,
Certrfied:Public Accountants
In Witness Whereat, the Proswant and Savetvy- Treasurer eth their trends and the seal of she Celyomh Board or Arsowaancy
on this save!teemh day of Daeameer, 2077
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t , `b j r SECNETARY.TItF.ASUftE0.
,,TAR 7601
SECTION II — INDEPENDENCE
The Pun Group, LLP (the "Firm') requires all employees to adhere to strict independence standards in relation to
the Firm's clients. These independence standards exceed, in many instances, the standards promulgated by the
American Institute of Certified Public Accountants (AICPA).
The Pun Group, LLP certifies that it is independent of the City of Seal Beach (the "City ") and the Successor
Agency to Seal Beach Redevelopment Agency (the "Agency "). The Firm meets independence requirements
defined by the United States Government Accountability Office's (U.S. GAO's) Government Auditing Standards,
and the American Institute of Certified Public Accountants (AICPA).
The Firm will give the City of Seal Beach written notice of any professional relationships entered into during the
period of the agreement.
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
SECTION III — FIRM QUALIFICATIONS AND EXPERIENCE
About The Pun Group, LLP
The Pun Group, LLP, Certified Public Accountants and Business Advisors, founded in 2012, is a limited liability
partnership. We are a full- service accounting firm that is comprised of forty (40) professionals who work on a full -
time basis and provide auditing, accounting, and advisory services. Our Partners Group have served
governmental agencies since 1989, under the umbrella of its predecessor firm, Caporicci & Larson, where all key
personnel assigned provided outstanding services to governmental entities throughout California. Out of the forty
(40) professionals, thirty (30) of them are focused in the Government Assurance Practice. The Firm has offices in
Orange County, San Diego, Palm Desert (California) and Phoenix (Arizona).
The combination of hands -on experience and practical knowledge exercised by our audit professionals makes the
Firm unique in our field. Our technical knowledge and thorough understanding of current regulations and issues —
along with the Firm's commitment to hard work, integrity, and teamwork on every engagement — enable us to help
our clients succeed.
Our Governmental Partners Group —which include Kenneth H. Pun, Gary M. Caporicci, Paul J. Kaymark, Lisa B.
Lumbard and Jack F. Georger — provide auditing, accounting, and advisory services to numerous governmental
entities throughout the United States. With more than one hundred -fifty (150) years of combined experience in the
governmental industry we have become a trusted business partner, and well- respected as one of the most socially
responsible accounting firms.
In addition to annual financial audits, team members undertake special studies in financial management,
accounting, cost - accounting- system analysis, internal audit services, and internal control documentation and
testing. By participating in industry associations and activities, we are always up to date on the latest industry
changes and the impact they will have on your operations. We will keep you and our colleagues in the Firm, fully
informed of these developments. Our team is committed to bringing the full breadth and depth of our expertise to
the audit of the City offering an outstanding value.
Our Orange County office, located at 200 East Sandpointe Avenue, Suite 600, Santa Ana, California 92707 will
perform the requested services for the City. In this location we count on 6 partners, 2 senior managers, 1 manager,
2 supervisors, 4 seniors, 6 professional staff and 4 administrative staff. However, we may assign additional staff
from our San Diego or Palm Desert (California) offices to the engagement, at no additional cost to the City. No
subcontractors will be used.
While many accounting Firms can perform an audit, not all can build a great working relationship with their clients.
The Pun Group, LLP prides itself on developing lasting, personal relationships with our clients. Our hands -on
partner involvement and low personnel turnover are crucial tools to our success and highly beneficial to the City.
Our Firm has: I
• Extensive experience in audits of local governments as well as experience with preparation of
Comprehensive Annual Financial Reports, and comprehensive assistance with the implementation of new
GASB Pronouncements.
• Strong work ethic and willingness to respond to the City of Seal Beach requirements and needs.
Staff Consistency
The Firm is committed to maintaining staff continuity throughout audit engagements. While we cannot guarantee
that our staff members will stay with the Firm, we encourage loyalty by paying competitive wages, offering
opportunities for promotion, using state -of- the -art equipment, and providing excellent working conditions. We also
offer benefits including retirement plans, medical plans, profit- sharing programs, and continuing education. The
Firm is an equal - opportunity employer and complies with all federal and state hiring requirements. The Firm also
supports affirmative- action philosophies and works hard to provide opportunities for self- enhancement to
members of disadvantaged groups.
We guarantee that the partners assigned to this audit will be involved throughout the entire engagement term, and
that assigned staff members will return to the City in future years if they are still with the firm. One of our primary
audit concerns is staff continuity, and our hands -on partner involvement ensures that qualified and experienced
professionals will perform audits efficiently and effectively every year of the engagement.
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Other Services Offered by the Firm
Auditing and Accounting
The Pun Group, LLP provides all levels of attestation services, including audits, reviews, and special
examinations on specific accounts, items, and transactions. Additionally, we provide the following: preparation
of financial statements, projections, and forecasts; practical analysis of financial information on ratios,
inventory, revenues, and expenses; SEC compliance; IFRS conversions.
Business/Tax Consulting
We provide guidance to closely held, emerging, and family -owned businesses. Our extensive experience with
privately held businesses during their entire life cycle allows us to assist our clients to create value, increase
profitability, secure financing, and reach goals.
Business Valuation
We provide many business valuation services, including, but not limited to, the following: mergers and
acquisitions, joint- venture agreements, goodwill impairment, fairness opinions, restructuring from public to
private entities, and allocation of purchase price.
Our multi - disciplinary team includes JDs, and MBAs who have expertise in economics, financial modeling,
business management, marketing, psychology, law, competitive analysis, consumer behavior, and market
research. Professional designations held by our members include CFE, CVA, CGMA, CIA, CGFM, CFF and
M FAA.
Financial Recovery/Forensic Services
We provide many forensic accounting services, including, but not limited to the following: fraud and
mismanagement, fraudulent transfers, stockbrokerage churning, fraud risk assessment, safeguarding of assets,
organizational reviews.
Our forensic accounting and fraud investigation team excels in solving complex economic crimes. We provide
guidance on the prevention and detection of fraud. Members of the team speak as leading experts at forensic
accounting and fraud investigation conferences around the nation.
Tax Services
Our Firm provides many tax services, including, but not limited to the following: planning /consulting,
compliance, IRS and state representation, estate planning and valuation.
We have specialists in international, federal, state and local taxes. Through careful planning, we can assist our
clients with tax strategies for all levels of taxation.
Local Office's Information Technology (IT) Audit Capabilities
In order to promote audit efficiency, the Firm uses the following technology in providing auditing services:
The Firm uses ProSystem fx® Engagement for audit documentation. It allows real time synchronization of
the workpapers and real time quality control review.
Citrix Receiver allows the engagement team to access the Firm's secure network through internet
anywhere they are.
The Firm uses ProSystem fx® Portal for file sharing with the client. Provided by client, items are uploaded
to this secured site and are downloaded and reviewed prior to the fieldwork.
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Firm's Municipal Clients
The Pun Group, LLP has performed numerous audits of governmental organizations subject to financial and
compliance audits. These audits were performed in accordance with auditing standards generally accepted in the
United States, Government Auditing Standards, Uniform Grant Guidance (formerly known as OMB Circular A -133)
and its Compliance Supplement (when applicable), Office of the State Controller's Minimum Audit Requirements
and Reporting Guidelines for California Special Districts. A list of current engagements is as follows:
City of Bradbury
2012 — Present
Yes
N/A
N/A
Kenneth H. Pun
150
City of Calexico
2007 — Present
Yes
Yes
N/A
Kenneth H. Pun
750
City of Cerritos
2009 — Present
Yes
Yes
Yes
Kenneth H. Pun
400
City of Clovis
2006 — Present
Yes
Yes
Yes
Kenneth H. Pun
400
City of Culver City
2016 — Present
Yes
Yes
Yes
Kenneth H. Pun
535
Town of Danville
1999 — Present
Yes
Yes
Yes
Gary Caporicci
300
City of Desert Hot Springs
2013 — Present
Yes
N/A
N/A
Kenneth H. Pun
500
City of Encinitas
2014 — Present
Yes
Yes
Yes
Kenneth H. Pun
350
City of Escondido
2016 — Present
Yes
Yes
Yes
Kenneth H. Pun
400
City of Gardena
2007 — Present
Yes
Yes
Yes
Gary Caporicci
700
City of Hemet
2015 — Present
Yes
Yes
N/A
Kenneth H. Pun
380
City of Hermosa Beach
2004 — Present
Yes
N/A
Yes
Kenneth H. Pun
200
City of Huntington Park
2015 — Present
Yes
Yes
N/A
Kenneth H. Pun
650
City of Industry
2015 — Present
Yes
Yes
Yes
Kenneth H. Pun
600
City of Laguna Niguel
2016 — Present
Yes
Yes
Yes
Kenneth H. Pun
390
City of Lakewood
2013 — Present
Yes
Yes
Yes
Kenneth H. Pun
380
City of Lynwood
2016 — Present
Yes
Yes
Yes
Kenneth H. Pun
585
City of Monterey
2016 — Present
Yes
Yes
Yes
Kenneth H. Pun
620
City of Morro Bay
2015 — Present
Yes
Yes
N/A
Kenneth H. Pun
400
City of National City
2013 — Present
Yes
Yes
Yes
Kenneth H. Pun
600
City of Placentia
2016 — Present
Yes
Yes
Yes
Kenneth H. Pun
620
City of Placerville
2008 — Present
Yes
Yes
NIA
Kenneth H. Pun
350
City of Pomona
2016 — Present
Yes
Yes
Yes
Kenneth H. Pun
650
6
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
City of Ridgecrest
2009 — Present
Yes
Yes
Yes
Kenneth H. Pun
300
City of San Bernardino
2015 — Present
Yes
Yes
N/A
Kenneth H. Pun
3,000
City of South Gate
2016 — Present
Yes
Yes
Yes
Kenneth H. Pun
480
City of Stockton
2012 — Present
Yes
Yes
N/A
Kenneth H. Pun
2,500
Gold Coast Transit System
2015 — Present
Yes
Yes
Yes
Paul J. Kaymark
150
Transit System Y 2005 — Present Yes Yes Yes Kenneth H. Pun 1,850
Shasta Regional _ 2015 — Present Yes N/A N/A Kenneth H. Pun 200
2015 — Present Yes N/A N/A Paul J. Kaymark 60
2015 — Present Yes Yes Yes Kenneth H. Pun 400
Altadena Library District 2015 — Present Yes N/A
N/A Paul J. Kaymark 90
Antelope Valley State Water 2015 — Present Yes N/A
N/A Paul J. Kaymark 40
Contractors Association
Paul J. Kaymark
Heights Community 2015 Pt Y N/A
Barstow — resen es
ee.,a..e�
N/A Paul J. Kaymark 40
Y
Big Bear City Airport District 2015 — Present Yes N/A N/A Paul J. Kaymark 120
Big Bear City Community 2015 — Present Yes N/A N/A Paul J. Kaymark 200
Services District
Bodega Bay Fire Protection 2015 — Present Yes N/A N/A Paul J. Kaymark 140
°; ... " V ° ". °` °. 2015 — Present Yes N/A N/A Paul J. Kaymark 230
California Domestic Water 2016 — Present Yes N/A N/A Paul J. Kaymark 200
Desert Recreation District
2015 — Present
Yes
N/A
N/A
Paul J. Kaymark
150
Desert Recreation
2015 — Present
Yes
N/A
N/A
Paul J. Kaymark
40
Foundation
2016 — Present
Yes
N/A
N/A
Paul J. Kaymark
180
Diablo Water District
2015 — Present
Yes
N/A
N/A
Paul J. Kaymark
350
East Orange County Water
2015 — Present
Yes
N/A
N/A
Paul J. Kaymark
130
District
2016 — Present
Yes
N/A
N/A
Paul J. Kaymark
100
El Toro Water District
2015 — Present
Yes
N/A
N/A
Paul J. Kaymark
270
2015 — Present Yes N/A N/A Kenneth H. Pun 100
l Fallbrook Healthcare District
2008 — Present
Yes
N/A
N/A
Kenneth H. Pun
75
Golden Hills Community
Services District
2016 — Present
Yes
N/A
N/A
Paul J. Kaymark
180
Las Virgenes Municipal Water
2014 — Present
Yes
N/A
N/A
Kenneth H. Pun
300
District
Los Angeles Walerkeeper
2016 — Present
Yes
N/A
N/A
Paul J. Kaymark
100
Marina Coast Water District
2012 — Present
Yes
N/A
Yes
Kenneth H. Pun
240
7
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
V"1 HIV �'lN F1" �I V1VUUU11 2015 — Present Yes Yes Yes Kenneth H. Pun 240
�IN`VVPUIL"VO, ""lI"°`aIr 2010 — Present Yes N/A _ N/A Kenneth H. Pun 20
North Count Fire Protection
2015 — Present
Yes
N/A
N/A
Paul J. Kaymark
120
District
Services District
North County Dispatch JPA
2015 — Present
Yes
N/A
N/A
Paul J. Kaymark
60
North of the River Municipal
2015 — Present
Yes
N/A
N/A
Paul J. Kaymark
150
Water District
Trabuco Canyon Water
2015
— Present
Orange County Coastkeeper
2015 — Present
Yes
N/A
N/A
Paul J. Kaymark
60
Palmdale Water District
2015 — Present
Yes
N/A
N/A
Paul J. Kaymark
180
Palos Verdes Library District
2015 — Present
Yes
N/A
N/A
Paul J. Kaymark
110
Port of Hueneme - Oxnard
2015 — Present
Yes
N/A
Yes
Kenneth H. Pun
250
Harbor District
Valley Sanitary District
2015
— Present
Yes
N/A
Yes
Rancho Santa Fe Fire
2015 — Present
Yes
N/A
N/A
Paul J. Kaymark
120
Protection District
55
West County Wastewater
niter. ,r
2015
— Present
Yes
N/A
Riverside County Flood
Paul J. Kaymark
240
Control and Water
2015 — Present
Yes
N/A
Yes
Kenneth H. Pun
250
Conservation District
San Bernardino County Fire 2016 — Present Yes N/A N/A Paul J. Kaymark 200
Protection District
San Diego Coastkeeper 2015 — Present Yes N/A N/A Paul J. Kaymark 75
San Dieguito Water District 2014 — Present Yes N/A N/A Kenneth H. Pun 75
Audit
San Elijo Joint Powers 2016 — Present Yes N/A N/A Kenneth H. Pun 146
'""'"" " "'" " "" 2015 — Present Yes N/A
Vector Control District
N/A Paul J. Kaymark 130
South Bay Regional Public
Yes
Communications Authority 2015 — Present Yes N/A
N/A Paul J. Kaymark 100
Southwestern Community 2009 — Present Yes Yes
N/A Kenneth H. Pun 720
Stallion Springs Community
2015
— Present
Yes
N/A
N/A
Paul J. Kaymark
220
Services District
The Farm Mutual Water
2015
— Present
Yes
N/A
N/A
Paul J. Kaymark
170
Company
Trabuco Canyon Water
2015
— Present
Yes
N/A
N/A
Paul J. Kaymark
200
District
Twentynine Palms Water
2016
— Present
Yes
N/A
N/A
Paul J. Kaymark
160
District
Valley Sanitary District
2015
— Present
Yes
N/A
Yes
Kenneth H. Pun
140
West County Agency
2015 — Present
Yes
N/A
N/A
Paul J. Kaymark
55
West County Wastewater
niter. ,r
2015
— Present
Yes
N/A
N/A
Paul J. Kaymark
240
2016 — Present Yes N/A N/A Paul J. Kaymark 100
West Valley Water District 2015 — Present Yes N/A N/A Paul J. Kaymark 320
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Alliance Medical Center
2013 — Present
Yes
N/A
N/A
Kenneth H. Pun
300
Anderson Valley Health Clinic
2012 — Present
Yes
N/A
N/A
Kenneth H. Pun
200
Desert Hot Springs Health
2013 — Present
Yes
N/A
N/A
Kenneth H. Pun
100
and Wellness Foundation
Family Health Centers of San
2009 — Present
Yes
Yes
Yes
Kenneth H. Pun
600
Diego
Industry Convalescent
2015 — Present
Yes
N/A
N/A
Kenneth H. Pun
230
Hospital
Mann City Health and
2010 — Present
Yes
Yes
N/A
Kenneth H. Pun
110
Wellness Center
McCloud Healthcare Clinic
2013-2015
Yes
Yes
N/A
Kenneth H. Pun
200
Mountain Valleys Health
2015 — Present
Yes
Yes
N/A
Kenneth H. Pun
200
Centers
Redwood Coast Medical
2008 — Present
Yes
Yes
N/A
Kenneth H. Pun
200
Services
Ritter Center
2013 — Present
Yes
N/A
N/A
Kenneth H. Pun
100
Shingletown Medical Center
2013 — Present
Yes
Yes
N/A
Kenneth H. Pun
190
Tulare Community Health
2008 — Present
Yes
Yes
NIA
Kenneth H. Pun
200
Clinic I Altura Centers
United Health Centers of San
2010-2016
Yes
Yes
N/A
Kenneth H. Pun
300
Joaquin Valley
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Most Recent External Quality Control Review
The Firm participates in the AICPA Peer Review Program, which is designed to identify weaknesses in accounting -
service policies, practices, and procedures.
In 2015, an independent reviewer assessed the Firm's quality - control policies, reviewed administrative records,
interviewed professional personnel, and inspected the Firm's working papers and reports from a representative
sample of accounting and auditing engagements, including governmental audits. The reviewer concluded that the
Firm fully complies with the AICPA's stringent standards for quality control.
A quality- control reviewer considers, among other things, a firm's policies regarding hiring, training, supervision,
delegation of responsibilities, and access to technical resources.
The reviewer determined that the Firm's accounting and auditing work and internal quality - control system meet the
AICPA's guidelines for professional standards.
The Firm's participation in the Peer Review Program demonstrates our commitment to quality. We also affirm our
dedication to excellent client service through our voluntary memberships in the AICPA — including the AICPA's
Governmental Audit Quality Center —and CaICPA.
S„sam Re,inc Rcmn
Pun Group. LLP
the Peer Rcvino Committer of the California Society of CPAs
We once mviewed the —tenudquelo, mnwl fm she vaounliii, aW aW am, paselioc of
the Pun Grwp. LLP (the horn in tlfat has the ym ended Uccember 31. 3014, spur Peer
mien' x corrduaW in mNarec Pith the SaWaIdS fin Pcr6lming aW Repuning on
Pen Rvaywa established by the Peer Ro'icw Rowd ofthe Amnican Inotitae of Certified
Public Accounsanu. As part of our per a„iese. rte ennodned sevieus by regulatory
cntitio, ifvppliezble. in dearmining ]be roam and extern ofour parseedurca. The Grm is
reayonsible for desi,in, o system ntqualiry mnwl nW cnmpllin, Pilo it m p.side tl,c
fat wish ..We maatre of pdannin, anal re,nio, in vonf n nh, nigh applinblc
pn3uianal snrdaNv in all matnial oce ec s. Gm rnponsiality ix to enpms an n,irsc.
n the design of the aysuo, of 4selny ornWl and the firm ono'haae the —ith haled
on our r. the nature, nyo,'OVes. cope, limitasio r; of. real the procedures performed
m a Svsrecm Review are dcsodhcd in tM atardnNsn xnnrv/msum
As "ourd by the o.act rds. ers,,emenls selalM far re,'iew orcluhtl on mgagrnwnt
prfnmeJ uMer Gn,wnmenr Awlir,nR La•daWx.
In our opinion. the stem of quality conrral for the accounting and adiaing practise of l he
Pun Group, LLP in e0an for the year eWW Deamher 31. 2014, has been milably
Jcsigmd aml ,wnpliW n'ith to pravidsathe lint Pith reasonable a of perf nine
and Ieponing in confonony onto applicable psollmional ssandanls io all Itumrial mpcts,
Fimascan acceirea rain, ofpsw, are, u Johdfii,,,(hQ mJhll. the Pun Gai LLP
UP
13.,015
10
CPAMERICA
ejF.rmD Ra..na
IFochwerui�
Y.Y141� Von.... I .... ..a.
S„sam Re,inc Rcmn
Pun Group. LLP
the Peer Rcvino Committer of the California Society of CPAs
We once mviewed the —tenudquelo, mnwl fm she vaounliii, aW aW am, paselioc of
the Pun Grwp. LLP (the horn in tlfat has the ym ended Uccember 31. 3014, spur Peer
mien' x corrduaW in mNarec Pith the SaWaIdS fin Pcr6lming aW Repuning on
Pen Rvaywa established by the Peer Ro'icw Rowd ofthe Amnican Inotitae of Certified
Public Accounsanu. As part of our per a„iese. rte ennodned sevieus by regulatory
cntitio, ifvppliezble. in dearmining ]be roam and extern ofour parseedurca. The Grm is
reayonsible for desi,in, o system ntqualiry mnwl nW cnmpllin, Pilo it m p.side tl,c
fat wish ..We maatre of pdannin, anal re,nio, in vonf n nh, nigh applinblc
pn3uianal snrdaNv in all matnial oce ec s. Gm rnponsiality ix to enpms an n,irsc.
n the design of the aysuo, of 4selny ornWl and the firm ono'haae the —ith haled
on our r. the nature, nyo,'OVes. cope, limitasio r; of. real the procedures performed
m a Svsrecm Review are dcsodhcd in tM atardnNsn xnnrv/msum
As "ourd by the o.act rds. ers,,emenls selalM far re,'iew orcluhtl on mgagrnwnt
prfnmeJ uMer Gn,wnmenr Awlir,nR La•daWx.
In our opinion. the stem of quality conrral for the accounting and adiaing practise of l he
Pun Group, LLP in e0an for the year eWW Deamher 31. 2014, has been milably
Jcsigmd aml ,wnpliW n'ith to pravidsathe lint Pith reasonable a of perf nine
and Ieponing in confonony onto applicable psollmional ssandanls io all Itumrial mpcts,
Fimascan acceirea rain, ofpsw, are, u Johdfii,,,(hQ mJhll. the Pun Gai LLP
UP
13.,015
10
CPAMERICA
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
CaICPA
,8W Gse�ay nr..5re ]IIII
Peer Review Program 5,r. wrw.0 9+row
February 4, 2016
Kenneth Hing -Kwong Pun
The Pun Group LLP
200 E Sandpointe Ave
Suite 600
Santa Ana, CA 92707
Dear Mr. Pun:
It is my pleasure to notify you that on January 27, 2016 the California Peer Review Committee
accepted the report on the most recent system peer review of your firm. The due date for your
next review is June 30, 2018. This is the date by which all review documents should be
completed and submitted to the administering entity.
As you know, the report had a peer review rating of pass. The Committee asked me to convey
its congratulations to the firm.
Sincerely. /yam �+
G; 3 '' �e. Ln+..._
Linda McCrone, CPA
Director. Peer Review Program
m: John Lerias
Firm Number: 8102426 Review Number 372240
Al, CPA) PwraavlewftMis
—..µv... p n. 1 n— s.pe[.a T(65o) 522JO941 F: (650) 522�2050 rp..neaerRolrw �•q
Federal or State Desk Review
No federal or state desk reviews or field reviews have been undertaken of any audits performed by the Firm or any
of its partners, managers, or professionals during the past three (3) years.
Disciplinary Action
No disciplinary action has been taken by state regulatory bodies or professional organizations against the Firm or
any of its partners, managers, or professionals during the past three (3) years.
The Firm has no conditions such as bankruptcy, pending litigations, planned office closures, mergers or any
organizational conflict of interest that may affect the ability of the Firm to perform the required duties requested by
the City of Seal Beach.
11
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
SECTION IV — PARTNER, SUPERVISORY AND STAFF QUALIFICATIONS
AND EXPERIENCE
Proposed Engagement Team
The Engagement Team is carefully chosen to provide the City with all the services needed to successfully complete
the audit. The Engagement and Concurring Partners are personally involved in the audit, and the Engagement
Team has significant experience in governmental auditing. Our broad experience and technical capabilities allow us
to provide technical support, interpret findings, and offer effective solutions to any issues that may arise.
The personnel assigned to this engagement are fully qualified to perform an efficient audit of the City, and their
extensive experience will be critical to the audit process. Our professionals are familiar with the complexities of
governmental accounting, auditing, and financial reporting, including but not limited to, all GASB pronouncements,
the Single Audit Act, Uniform Grant Guidance (formerly known as OMB Circular A -133), and fund operations.
If the Firm changes key personnel we will provide the City with a written notification. Engagement personnel will
only be changed with the express prior written permission from the City. Audit personnel may be replaced only by
those with similar or better qualifications and experience.
If the City wishes to extend the annual contract beyond the proposed years, the Firm will accommodate
requests by the City to rotate partners, managers and or supervisors assigned to the City's audit with
personnel with similar or higher qualifications and experience.
12
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Kenneth H. Pun, CPA, CGMA I Engagement Partner
With over fifteen years of public accounting experience, Kenneth Pun is the Assurance Partner and the Partner In-
Charge of the Governmental and Not - for - Profit Practice at the Firm. He specializes in audits and management
consulting for governmental organizations. Ken will actively act as the Engagement Partner with the assigned task
of directly overseeing the Engagement Team. He will be responsible for the speedy delivery of services for the City
of Seal Beach. In addition, he will manage engagement planning and fieldwork, review for quality and approve work
papers and reports.
John ( "Jack ") F. Georger, Jr., CPA, CIA I Engagement Quality Control Reviewer
Throughout his forty years of experience, Jack has worked diligently alongside numerous governmental
municipalities, including cities, counties, and transportation agencies, as well as not - for - profit entities, providing
clients with financial and compliance auditing as well as consultation services. As an Assurance Partner in our
Firm, he advises clients with their complex accounting questions, and supports the engagement team with audit
issues. Jack is responsible for the review of all reports issued by the Firm to ensure the utmost quality and
compliance with professional standards. He is responsible for the final quality- control review within the
engagement.
Gary M. Caporicci, CPA, CGFM, CFF I GASB Implementation Specialist
Gary Caporicci is an appointed member of the State Controller's Retirement Advisory Committee. Mr.
Caporicci will utilize his expertise in providing advice and consultation during the implementation of the new GASB
standards. As an assurance partner with over forty years of experience, Gary has provided financial and
compliance audit and consultation services to governmental clients including cities, counties, transportation
agencies, and school districts, as well as various not - for - profit entities. Gary will be responsible in providing advice
and consultation for the implementation of these new standards.
Frances Kuo, CPA, CGMA I Engagement Manager
Frances Kuo will bring her attention to detail and commitment to delivering a high quality audit to the City of Seal
Beach. Frances will work closely with the Assurance partners directing the audit team in its daily activities and
tasks. She is an Assurance Services /Audit Manager who has extensive experience in auditing local governmental
entities including cities, counties, transportation agencies, special districts, and not - for - profit entities.
Coley Delaney, CPA I Compliance Manager
Working as a Compliance Manager, Coley will direct the audit team in all compliance- related matters. He is an
Assurance Services /Audit Manager in the Firm whose extensive auditing experience includes cities, counties,
special districts, and not - for -profit entities.
Catherine Choi / Sophia Kuo, CPA, MBA I Supervisory Team
Catherine and Sophia will direct the audit staff and coordinate with the City of Seal Beach personnel to create a
seamless transition during the auditing process, and will secure the effective implementation of the audit approach.
Professional Staff
All governmental -audit members are qualified to perform financial and compliance audits of governmental
agencies. This ensures that the staff quality will be consistent throughout the engagement term. Because we
support both staff development and engagement continuity, we encourage senior and staff accountants to take
increased responsibilities on their previous engagements as they advance professionally.
13
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Quality - Control System
Our Firm meticulously monitors the quality and contents of our reports. The Pun Group LLP is 100% committed to
providing only the highest grade of work possible for our clients and for those who rely on our audits. The Firm
strives to exceed professional industry standards because of the continuing respect for our clients and our
emphasis on creating long- lasting relationships. The Pun Group LLP works exclusively with those who share the
same moral integrity and values.
Our quality- control system was crafted with excellence in mind. It not only meets AICPA standards, but also
matches our own elevated standards, which includes the following professional - development activities.
Professional Development
Each Engagement Team member is up -to -date with continuing professional education requirements. The Firm
encourages staff members to participate in the continuing education programs offered by the AICPA and the
CaICPA Education Foundation in order to always keep our staff well versed in the changing field and any new
regulations. These classes include, among others:
• Basic Concepts of Governmental Accounting, Financial Reporting and Auditing
• Government Auditing Standards
• GASB Basic Financial Statements for State and Local Governments
• Single Audits: Uniform Grant Guidance (formerly known as OMB Circular A -133)
• Governmental and Nonprofit Annual Update
• Governmental Accounting and Auditing: The Annual Update
• Auditing Standards: A Comprehensive Review
In addition, the Firm provides comprehensive in -house training for all levels of staff. The program includes seminars
developed by the Firm, educational programs developed by the AICPA and CaICPA, and on- the -job training.
Every year, all professional and administrative staff members receive an annual overview and review of topics such
as these:
• Principles of accounting and financial reporting for state and local governments
• Governmental fund types
• Newly issued U.S. generally accepted auditing standards and government auditing standards
• Internal control evaluation approaches, including COSO Internal Control Framework
• Updates on recent governmental accounting and reporting guidelines and pronouncements
• Single Audit requirements and approaches
• Risk based audit approaches
• Working paper techniques
• Current issues facing the governmental community
These ongoing continuing education activities and training programs ensure that the Engagement Team is always
receiving the most current and pertinent information; we believe that an educated staff is a necessity when
providing the most efficient and effective audit of the City.
Engagement Team Resumes
City of Seal Beach deserves experienced professionals who work as a team. The Pun Group, LLP will provide
qualified employees to perform the audit; no subcontractors will be used. Resumes for key Engagement Team
members follow.
14
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Kenneth H. Pun is the Managing Partner and the Director of the Governmental and Not -
for Profit Practice of the Firm.
Prior to founding his own practice, Ken was employed by Caporicci & Larson, a specialty
CPA firm recognized as one of California's foremost experts in governmental and not-
for-profit accounting, auditing, and advisory service. He started with the firm in 2001 and
was promoted to Partner in 2008. He has performed numerous audits for cities,
counties, transportation agencies, community college districts, other special districts,
and not - for - profit healthcare entities of various sizes.
By leveraging more than fifteen years of public accounting experience with a high level
of expertise, Ken is often engaged by clients as a result of premier level of service he
provides, his commitment, and his innovative methods of increasing operational efficiencies and reducing costs. Ken is a trusted
advisor and a leader of accounting services to governmental and not- for - profit organizations.
In addition to working with clients, Ken provides the audit teams with direction and technical guidance to ensure adherence to
The Pun Group's quality controls, and he assists with the development of the Assurance Services practice. Ken also speaks on
topics related to audits and quality control and shares his expertise with clients through annual educational seminars.
EDUCATION
✓ BS Degree in Business Administration, emphasis in Accounting from the University of California, Riverside
licensed by the State of California
PROFESSIONAL & CIVIC AFFILIATIONS
• Member, American Institute of Certified Public Accountants (AICPA)
• Member, California Society of Certified Public Accountants (CaICPA)
• Member, CaICPA Governmental Accounting and Auditing Committee
• Member, CaICPA Governmental Accounting and Auditing Conference Planning Committee
✓ Member, Government Finance Officers Association (GFOA)
✓ Member, California Society of Municipal Finance Officers ( CSMFO)
✓ Speaker, CSMFO Conference (2014)
✓ Instructor, CaICPA Fall Series (2014) - Long Beach and Orange County Chapter
PROFESSIONAL EXPERIENCE
200 East Sandpointe Avenue, Suite 600, Santa Ana, California 92707
Email: Ken.Pun @pungroup.com I Phone: (949) 777 -8801 1 Fax: (949) 777 -8850
1s
City of Arvin
City of Arcadia
•.
City of Bradbury
City of Calexico
•
City of Carpinteria
City of Cerritos
City of Chula Vista
City of Clearlake
City of Clovis
Town of Danville
City of Desert Hot Springs
City of Encinitas
City of Fairfield
City of Gardena
'City of Hemet
City of Hermosa Beach
City of Huntington Park
City of Indust
City of Lakewood
City of Monterey Park
City of Morro Bay
City of National City
•
City of Placerville
.
City of Poway , .. -:-
•
City of Rid ecrest
City of San Bernardino
- City of Solana Beach'.-
City of Shafter
City of Stockton
Alliance Medical Center
...Anderson
Valley Health Clinic -
.
Centro Medico Community Clinic
Desert Hot Springs Health and Wellness Foundation
Family Health Centers of San Diego
Indust..ConvalescenfHos ital
Marin City Health and Wellness Center - -
McCloud Healthcare Clinic
.
Mountain Valleys Health Centers
Redwood 9Coast 'Medical Services.
Shin IetowmMedical Center
Tulare Community Health Clinic
.
United Health Centers of San Joaquin Valle
200 East Sandpointe Avenue, Suite 600, Santa Ana, California 92707
Email: Ken.Pun @pungroup.com I Phone: (949) 777 -8801 1 Fax: (949) 777 -8850
1s
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
�GOIa[Coast Transit
�NnrthZCounl Transit)Disfrict
San Diego Metropolitan Transit System
Shasta Regional Transportation Agency
�SunLlne TrensltTA enc
Las Vir enes Munici`sQWater District
Las Vir enes - Triunfo Joint Powers Authority
Encinitas Ranch Golf Authority
MFallhrookJRFaalthcare District
�MarinaiCoast Water District
Menlo Park Fire Protection District
Newport Coast Elementary School District
MRi7e—Ria7C3unt y Flood[Con mi and(Water Conservation Disirict
�$outhweatem CommunitiColle�e Dlsldct�
OTHER RELEVANT EXPERIENCE
City of Stockton
The City of Stockton filed a petition for Chapter 9 bankruptcy protection with the United States Bankruptcy Court on June 28,
2012, the largest municipality bankruptcy at the time. The Firm was engaged as audit liaison and advisor in 2012 for the City's
2011 audit. The City also engaged the Firm to help drafting the Comprehensive Annual Financial Report in accordance with U.S.
GAAP and in compliance with GFOA guidelines for the certificate of achievement for excellence in financial reporting program.
With the superb services provided, the City of Stockton also engaged the Firm to provide audit service for the years ending June
30, 2012 through 2015 due to the early termination of the contract from its predecessor firm. Mr. Kenneth H. Pun has been
assigned as the engagement partner who facilitated the audit process since then. The engagement team completed the audit
and issued the audit reports for the year ended June 30, 2012 and 2013 within the one year timeframe.
City of Desert Hot Springs
The City of Desert Hot Springs engaged the Firm to provide professional auditing services since June 30, 2013. During the
audit, certain deficiencies were noted that the City cited as the cause of their financial hardship. The City reduced its overall
workforce resulting in many positions unfilled. However, our firm was still able to complete the engagement in a timely manner
and provide valuable recommendations to the City Council in addressing their deficiencies.
In addition, during the year ended June 30, 2013, the City entered into a very complicated financial arrangement, New Market
Tax Credit financing, for the construction of the Desert Hot Springs Health and Wellness Center. Our firm has provided guidance
to the City in addressing complex accounting issues and helped drafting the stand -alone financial statements to fulfil the addition
reporting requirements under the New Market Tax Credit financing.
San Diego Metropolitan Transit System ( "MTS ")
On January 1, 2003, California Senate Bill 1703 (SB 1703) became effective. SB 1703 required the consolidation of the planning
and programming functions of MTS and the North County Transit District (NCTD) into the San Diego Association of
Governments (SANDAG) in an initial transfer to take place prior to July 1, 2003. SB 1703 also required the consolidation of
certain project development and construction functions of MTS and NCTD into SANDAG in a subsequent transfer to take place
prior to January 30, 2004. The initial transfer occurred on July 1, 2003, and the subsequent transfer occurred on October 13,
2003. With these actions, employees were transferred from MTS and NCTD to SANDAG, and certain planning, development,
and construction functions were also transferred.
After the enactment of SB 1703, Mr. Kenneth H. Pun was able to convert MTS financial model from general - purpose
government to stand -alone business -type activities government under GASB Statement No. 34 in 2007. By doing so, MTS has
significantly improved their financial reporting.
CONTINUING PROFESSIONAL EDUCATION
✓ Various municipal accounting courses offered by the AICPA, CaICPA Education Foundation and local universities
including:
• Governmental and Nonprofit Annual Update
• Government Auditing Standards
• GASB Basic Financial Statements for State and Local Governments
• Single Audits: Uniform Grant Guidance (formerly OMB Circular A -133)
• Financial Accounting Standards Board Annual Updates
• Statement on Standards for Accounting and Review Services Updates
✓ Has met the current CPE educational requirements to perform audits of governmental agencies.
200 East Sandpointe Avenue, Suite 600, Santa Ana, California 92707
Email: Ken.Pun @pungroup.com I Phone: (949) 777 -8801 1 Fax: (949) 777 -8850
16
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Jack Georger is the Partner of the Governmental Division by leveraging more than forty
years of public accounting and auditing experience in the government, agribusiness,
financial services, manufacturing and non - profit sectors. Mr. Georger brings an in -depth
knowledge and practical expertise to each client engagement. Mr. Georger coordinates,
plans, and manages financial audit activities, consulting activities, federal and state
compliance audit activities, performance audits and numerous quality control and
internal control reviews for a broad mix of governmental agencies and programs
throughout the United States.
Jack is a continuing professional education course instructor for the AICPA. Annually, he
instructs over 300 hours on accounting and auditing subjects. He has coauthored
training material in governmental accounting and auditing for the AICPA and is the
technical reviewer of the CCH Knowledge -Based Audits TM of State and Local
Governments with Single Audits.
Mr. Georger is licensed to practice as a certified public accountant in the states of California, New York, Virginia, Maryland,
District of Columbia, Georgia, South Carolina, Missouri, Connecticut (inactive), and Wyoming (inactive), and is a Certified
Internal Auditor (CIA).
EDUCATION
✓ Bachelor of Science, George Mason University Fairfax, Virginia
'Licensed by the State of California, New York, Virginia, Maryland, District of Columbia, Georgia, South Carolina, Missouri and Connecticut
(inactive) and Wyoming (inactive)
PROFESSIONAL 8 CIVIC AFFILIATIONS
✓ Member and Instructor, American Institute of Certified Public Accountants (AICPA)
✓ Member, Institute of Internal Auditors
✓ Member, California Society of Certified Public Accountants (CaICPA)
✓ Member, CaICPA Government Accounting and Auditing Committee
✓ Member, New York Society of Certified Public Accountants (NYSSCPA)
✓ Chairman, NYSSCPA Government Accounting and Auditing Committee
✓ Member, NYSSCPA Auditing Standards Committee
✓ Member, NYSSCPA Financial Accounting Standards Committee
✓ Member, NYSSCPA Not - for - Profit Committee
✓ Member, Missouri Society of Certified Public Accountants (MSCPA)
✓ South Carolina Association of Certified Public Accountants (SCACPA)
✓ Member, Government Finance Officers Association (GFOA) — CAFR Reviewer
KEY CLIENTS
Local Governments:
• Town of Andrews, South Carolina
• County of Isle of Wight, Virginia
• City of Richmond, Virginia
CONTINUING PROFESSIONAL EDUCATION
✓ Instructor of over 300 hours of municipal accounting courses offered by the AICPA
✓ Has met the current CPE educational requirements to perform audits of governmental agencies.
200 East Sandpointe Avenue, Suite 600, Santa Ana, California 92707
Email: Jack.Georger @pungroup.com I Phone: (949) 777 -8804 1 Fax: (949) 777 -8850
17
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
professional services firm, where he was an Audit Manager and gained broad experience in a wide range of industries such as
government, construction, manufacturing, mutual funds, and insurance. Prior to that, Gary held a consultant position with a "Big
Four" practice and was Vice President of a national insurance and financial services company.
In 2015 Gary Caporicci was appointed to the State Retirement Advisory Committee by the State Controller.
EDUCATION
✓ BS Degree in Accounting and Finance from the Armstrong University
'Licensed by the State of California
PROFESSIONAL & CIVIC AFFILIATIONS
✓ Member and Instructor, American Institute of Certified Public Accountants (AICPA)
✓ Member, Author and Instructor, California Society of Certified Public Accountants (CaICPA)
✓ Past Chair, CaICPA Governmental Accounting and Auditing Committee
✓ Chair and Speaker, CaICPA Governmental Accounting and Auditing State Conferences
✓ Member, CaICPA Council
✓ Chair, California Committee on Municipal Accounting (CCMA)
✓ Member, Government Finance Officers Association (GFOA)
✓ Member, California Society of Municipal Finance Officers (CSMFO)
✓ Member, Governmental Accounting Standards Board (GASB),
✓ Member, Deposit and Investment Risks Disclosure Task Force (GASB No. 40)
• National Reviewer and Speaker, Government Finance Officers Association
• Adjunct Professor, National University
✓ Past Member, Texas Governmental Accounting and Auditing Committee
✓ GFOA Certificate for Excellence in Financial Reporting — Reviewer
CONTINUING PROFESSIONAL EDUCATION
✓ Author and instructor of various municipal accounting courses offered by CaICPA Education Foundation and local
universities including:
• Governmental and Nonprofit Annual Update
• Government Auditing Standards
• GASB Basic Financial Statements for State and Local Governments
• Single Audits: Uniform Grant Guidance (formerly OMB Circular A -133)
✓ Has met the current CPE educational requirements to perform audits of governmental agencies.
200 East Sandpointe Avenue, Suite 600, Santa Ana, California 92707
Email: Gary.Caporicci @pungroup.com I Phone: (949) 777 -8802 1 Fax: (949) 777 -8850
18
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Frances Kuo is a Senior Manager in The Pun Group, LLP's Assurance division. Frances
has over ten years of accounting and auditing experience working with governmental
agencies, not - for -profit entities, and employee benefit plans. Frances also has particular
expertise in conducting financial audits under GAO Yellow Book standards and
compliance audits in accordance with Uniform Grant Guidance (formerly OMB Circular
A -133).
Frances has performed audits and other attestation services for several municipalities
throughout California including cities, counties, redevelopment agencies, public financing
authorities, housing authorities, transportation agencies, and special Districts. She has
assisted these clients with publishing their Comprehensive Annual Financial Reports in
compliance with GASB Statement No. 34.
Ms. Kuo is the in -house instructor who provides training, both theoretical and on- the -job training, to lower level staff. She has
developed training materials on the risk based audit approach, GASB Statement No. 34 reporting, Single Audits, and employee
benefit plan audits.
EDUCATION
• BS Degree in Business Administration, Emphasis in Accounting, from the University of California, Riverside
• BA Degree in Economics from the University of California, Riverside
'licensed by the State of California, Arizona and Virginia.
PROFESSIONAL 8 CIVIC AFFILIATIONS
✓ Member, American Institute of Certified Public Accountants (AICPA)
✓ Member, California Society of Certified Public Accountants (CaICPA)
✓ Member, California Society of Municipal Finance Officers (CSMFO)
RELEVANT PROJECT EXPERIENCE
City of Arcadia
City of Bradbury
r-WORY700M
sSCd ,ofCa "r °interia
City of Desert Hot Springs
Cit of Gardena
Cit oftHuntin ton Park
_ Cit TofiHuntin foniBeach
City of Hermosa Beach
City of Hemet
r.wEit ,of Indust
Crt ofiMonlere -1Park
City of Rid ecrest
Cone'o Recreation and Park District
& Las Vi enes Munici allWater District
r.°.' Marnn'aTcZastjWater Dist'ri`ct
Mountains Recreation and Conservation Authority
San Diego Transit Corporation
Retirement Plan
Tulare Gommunil iHealth Clinic
San Di4—go Metio oIi_9-nJTransitTS
stem
s
San Die o Association of Governments
Southwestern Community College District
Valle j8anita District
lf: Sharg90JOJiao-�To' n 1UniversityiF.ou °ndation offAmerica
CONTINUING PROFESSIONAL EDUCATION
✓ Various municipal accounting courses offered by the AICPA, CaICPA Education Foundation and local universities
including:
• Governmental and Nonprofit Annual Update
• Government Auditing Standards
• GASB Basic Financial Statements for State and Local Governments
• Single Audits: Uniform Grant Guidance (formerly OMB Circular A -133)
• Financial Accounting Standards Board Annual Updates
• Statement on Standards for Accounting and Review Services Updates
✓ Has met the current CPE educational requirements to perform audits of governmental agencies.
200 East Sandpointe Avenue, Suite 600, Santa Ana, California 92707
Email: Frances. Kuo @pungroup.com I Phone: (949) 777 -8805 1 Fax: (949) 777 -8850
19
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Coley Delaney is a Senior Manager within The Pun Group, LLP's Assurance division. In
his nine years of accounting and auditing experience, Coley has worked with
governmental agencies, not - for - profit entities and private for -profit entities. Coley
specializes in conducting financial audits under GAO Yellow Book standards and
compliance audits in accordance with Uniform Grant Guidance (formerly known as
OMB Circular A -133).
Coley has performed audits and other attestation services for several governmental
agencies throughout California including cities, counties, redevelopment agencies,
public financing authorities, housing authorities, transportation agencies, and special
districts, and he has helped them publish their Comprehensive Annual Financial
Reports in compliance with GASB Statement No. 34.
Mr. Delaney develops training materials and shares his expertise internally with other Firm professionals. Coley is a frequent
speaker at in -house seminars on topics related to government auditing standards and Single Audits.
EDUCATION
✓ BA Degree in Business Economics Emphasis in Accounting from the University of California, Santa Barbara.
'Licensed by the State of California
PROFESSIONAL & CIVIC AFFILIATIONS
• Member, American Institute of Certified Public Accountants (AICPA)
• Member, California Society of Certified Public Accountants (CaICPA)
RELEVANT PROJECT EXPERIENCE
City of Arvin
City of Arcadia
i =CiTf(Chulal5ista
(=Cit of(Clearlake
City of Clovis
Town of Danville
[=City7ofiFairfield
�CiTflEricinitas
City of Gardena
City of Hermosa Beach
=Cit o Fdust
�Cit ofjMontere Park
City of Poway
City of National City
i =Ci(Tf(SolanalBe'ach
FWCit ofiSan Bernardino
City of Stockton
City of Shatter
=RedwoodWoast "dicaljSeNices
�F.amiliHealfhTGenters of(San Die o
San Die o Metro olitan Transit System
United Health Centers of San Joaquin Valle
C =Sunl!hne Transi7A enc
�NOnhTco —u-n TrasiTDistrict
Fallbrook Healthcare District
Southwestern CommunityColle a Distdct
CONTINUING PROFESSIONAL EDUCATION
✓ Various municipal accounting courses offered by the Al CPA, CaICPA Education Foundation and local universities
including:
• Governmental and Nonprofit Annual Update
• Government Auditing Standards
• GASS Basic Financial Statements for State and Local Governments
• Single Audits: Uniform Grant Guidance (formerly OMB Circular A -133)
• Financial Accounting Standards Board Annual Updates
• Statement on Standards for Accounting and Review Services Updates
✓ Has met the current CPE educational requirements to perform audits of governmental agencies.
6265 Greenwich Drive, Suite 220, San Diego, California 92122
Email: Coley. Delaney @pungroup.com I Phone: (858) 242 -5101 1 Fax: (858) 242.5150
20
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Catherine Choi is a Supervisor of The Pun Group, LLP. She has more than seven (7)
years of governmental experience that ranges from GASB audit/reporting, Internal
Controls /COSO Framework, Single Audit, Corporate Financial Reporting, Data Analysis
and Taxation.
In various engagements, Catherine has been involved in providing significant services to
various governmental entities and actively contributed and participated in the planning
process, implementation of the audit work plan, supervision of staff, compliance testing
for the Single Audit Concept and preparation of the Comprehensive Annual Financial
Reports.
EDUCATION
✓ BS Degree in Accounting from the California Polytechnic University of Pomona.
RELEVANT PROJECT EXPERIENCE
City of Bradbury
City of Cerritos
«Cit ofilndust.
r =CiTofiHemet
City of Desert Hot Springs
Cit of Hermosa Beach
CWi3it�iOf)Eli- entro
�Cii'%fiGardena
City of Morro Bay
Las Vir enes Municipal Water District
(=Cit %flnuntin ton Park
Los An elesiGount Sanita`tionTDisUict�
County of San Diego Intergovernmental Training and
Development Center
Torrance Unified School District
Ill Iflower UnifedlSchooljDistrict
Bev` er{1Hil{lUnified[SchooflDistrict
Monrovia Unified School District
Garvey School District
lr=Rosemead[SchoollDistrict
MMTem IZCit 7U1 Mfied[School(District
Pacoima Charter School
Riverside County Flood Control and Water Conservation
District
CONTINUING PROFESSIONAL EDUCATION
✓ Various municipal accounting courses offered by the AICPA, CaICPA Education Foundation and local universities
including:
• Governmental and Nonprofit Annual Update
• Government Auditing Standards
• GASB Basic Financial Statements for Slate and Local Governments
• Single Audits: Uniform Grant Guidance (formerly OMB Circular A -133)
• Financial Accounting Standards Board Annual Updates
• Statement on Standards for Accounting and Review Services Updates
✓ Has met the current CPE educational requirements to perform audits of governmental agencies.
200 East Sandpointe Avenue, Suite 600, Santa Ana, California 92707
Email: Cathedne.Choi @pungroup.com I Phone: (949) 777 -8813 1 Fax: (949) 777 -8850
21
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Sophia Kuo is a Senior Auditor of The Pun Group, LLP. She has over four years of public
accounting experience including governmental experience that ranges from GASB
audit/reporting, Internal Controls /COSO Framework, Single Audit, Corporate Financial
Reporting, Data Analysis and Taxation.
In various engagements, Sophia has been involved in providing significant services to
various governmental entities and actively contributed and participated in the planning
process, implementation of the audit work plan, supervision of staff, compliance testing for
the Single Audit Concept and preparation of the Comprehensive Annual Financial
Reports.
EDUCATION
✓ MACC Trom Nano state University
• MBA from Idaho Stale University
• BA Degree in International Trade and Finance, emphasis in Finance from Fu Jeri Catholic University
'Licensed by the State of California
PROFESSIONAL & CIVIC AFFILIATIONS
✓ Member, American Institute of Certified Public Accountants (AICPA)
✓ Member, California Society of Certified Public Accountants (CaICPA)
RELEVANT PROJECT EXPERIENCE
City of Arvin
City of Arcadia
I[=CITQCTMt59
�Cll %fil)esen Ho`t[S prih-ti s
City of Gardena
City of Hermosa Beach
i=Ci1 ofjHuntin ton Park
iWCit7ofAo —ntere Park
City of Lakewood
City of Stockton
SLas Vir eves Munici allWater Oistrict
ORVentum CounliTrans orfg-t 3n Commission
Sunt-ine Transit Agency
United Health Centers of the San Joaquin Valle 401 K Plan
«Easter S—ea ls%flSo'uthern Calif6r7tai4C K{Plan
.Tulare CommunisHeallhTCII5c W,1 K{P,laa�
CONTINUING PROFESSIONAL EDUCATION
Various municipal accounting courses offered by the AICPA, CaICPA Education Foundation and local universities
including:
• Governmental and Nonprofit Annual Update
• Government Auditing Standards
• GASB Basic Financial Statements for State and Local Governments
• Single Audits: Uniform Grant Guidance (formerly OMB Circular A -133)
• Financial Accounting Standards Board Annual Updates
• Statement on Standards for Accounting and Review Services Updates
Has met the current CPE educational requirements to perform audits of governmental agencies.
200 East Sandpointe Avenue, Suite 600, Santa Ana, California 92707
Email: Sophia. Kuo @pungroup.com I Phone: (949) 777 -8809 1 Fax: (949) 777 -8850
22
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
SECTION V — SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENT
ENTITIES
The following five clients are examples of some of the engagements that are similar to the requirements in the
City's proposal. Additional references are available upon request. Please feel free to contact these governmental
agencies to learn more about their experiences working with us.
Reference 1
Name of Client: City of Stockton
Service Period: June 30, 2012 to Present
Scope of Work: The Firm has provided professional auditing services to the City of Stockton which
includes the audit of the City's CAFR, Single Audit, and Measure W. In addition, the
firm has performed agreed -upon procedures of the Appropriation Limit.
GFOA Award: Yes
Engagement Partner: Kenneth H. Pun Concurring Partner: Gary M. Caporicci
Engagement Manager: Coley Delaney Compliance Manager: Frances Kuo
Total Hours: Average 2,500 hours per year
Principle Client Contact: Mr. Edwin Gato, Accounting Manager
edwin. gatoostockton. ca.gov
425 N. El Dorado Street
Stockton, CA 95202
(209) 937 -8499
Reference 2
Name of Client: San Diego Metropolitan Transit System
Service Period: June 30, 2005 to Present
Scope of Work: The Firm has provided professional auditing services to the San Diego Metropolitan
Transit System, since 2005, which includes the audit of the CAFR and Single Audit. In
addition, the Firm has performed agreed -upon procedures on the Indirect Cost Rates,
compliance with California Transportation Development Act for NITS, San Diego
Transportation Corporation and San Diego Trolley Incorporated, compliance on
National Transit Database and compliance audit on Public Transportation
Modernization Improvement and Service Enhancement Account.
GFOA Award:
Yes
Engagement Partner:
Kenneth H. Pun I Concurring Partner: Gary M. Caporicci
Engagement Manager:
Coley Delaney I Compliance Manager: Frances Kuo
Total Hours:
Average 1,850 hours per year
Client Contact:
Ms. Erin Dunn, Controller
erin.dunn(a)sdmts.com
1255 Imperial Avenue, Suite 1000,
San Diego, CA 92101
(619) 557 -4536
23
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Reference 3:
Name of Client: City of Desert Hot Springs
Service Period: June 30, 2013 to Present
Scope of Work: The Firm has provided professional auditing services to the City of Desert Hot Springs
which includes the audit of the City's Basic Financial Statements, and Single Audit. In
addition, the firm has performed agreed -upon procedures of the Appropriation Limit
and Transient Occupancy Tax (TOT).
GFOA Award: N/A
Engagement Partner: Kenneth H. Pun Concurring Partner: Gary M. Caporicci
Engagement Manager: Frances Kuo Compliance Manager: Coley Delaney
Total Hours: Average 500 hours per year
Principle Client Contact: Ms. Linda Kelly, Financial Specialist
7
Ikelly tcitvofdhs.org
65 -950 Pierson Blvd.
Desert Hot Springs, CA 92240
(760) 329 -6411 ext. 289
Reference 4
Name of Client: City of Clovis
Service Period: June 30, 2006 to Present
Scope of Work: The Firm has provided professional auditing services to the City of Clovis which
includes the audit of the City's CAFR, Successor Agency and Single Audit. In addition,
the firm has performed agreed -upon procedures of the Appropriation Limit.
GFOA Award:
Yes
Engagement Partner:
Kenneth H. Pun Concurring Partner: Gary M. Caporicci
Engagement Manager:
Coley Delaney Compliance Manager: Frances Kuo
Total Hours:
Average 400 hours per year
Principle Client Contact:
Ms. Jamie Hughson, Finance Director
JamieH (d)ci.clovis.ca.us
1033 Fifth Street
Clovis, CA 93612
(559) 324 -2106
Reference 5:
Name of Client: Town of Danville
Service Period: June 30, 1999 to Present
Scope of Work: The Firm has provided professional auditing services to the Town of Danville which
includes the audit of the City's CAFR, Financing Authority, the Lighting and
Landscaping Assessment District's Basic Financial Statements, and Single Audit. In
addition, the firm has performed agreed -upon procedures of the Appropriation Limit.
GFOA Award: Yes
Engagement Partner: Kenneth H. Pun Concurring Partner: Gary M. Caporicci
Engagement Manager: Coley Delaney Compliance Manager: Frances Kuo
Total Hours: Average 300 hours per year
Principle Client Contact: Ms. Lani Ha, Accounting Manager
LHa(6danville.ca.gov
510 La Gonda Way
Danville, CA 94526
(925) 314 -3358
24
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
SECTION VI — SPECIFIC AUDIT APPROACH
Scope of Work
The City of Seal Beach is requesting an opinion as to the fair presentation of its basic financial statements in
accordance with generally accepted accounting principles (GAAP) and applicable laws and regulations. These
audits are to be performed in accordance with all applicable and generally accepted auditing standards, including,
but not limited to, the following:
• Generally accepted auditing standards as set forth by the American Institute of Certified Public
Accountants.
• The standards applicable to financial audits contained in the most current version of the Generally Accepted
Government Auditing Standards (Yellow Book), issued by the Comptroller General of the United States.
• The provisions of the Single Audit Act as amended in 1996.
• The provisions of U.S. Office of Management and Budget (OMB) Uniform Grant Guidance (formerly known
as Circular A -133), Audits of State and Local Governments and Non - Profit Organizations and the Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
To accomplish this task, the Firm will:
✓ Perform an audit of all funds of the City. The audit will be conducted in accordance with Generally
Accepted Government Auditing Standards. The CAFR will be in full compliance with all current GASB
pronouncements.
✓ Provide assistance in meeting the requirements for the Government Finance Officers Association (GFOA)
"Certificate of Achievement for Excellence in Financial Reporting ".
✓ Prepare a Single Audit Report which will include the following:
• Report on compliance and on internal control over financial reporting based on audit of financial
statements performed in accordance with Government Auditing Standards.
• Report on compliance with requirements applicable to each major program, internal control over
compliance, and on the schedule of expenditures of federal awards in accordance with Uniform
Grant Guidance, OMB Circular A -133, "Audits of State and Local Governments ", and the Single
Audit Act of 1984 (Public Law 98 -502).
• Schedule of Expenditures of Federal Awards.
• Notes to Schedule of Expenditures of Federal Awards.
• Schedule of Findings and Questioned Costs.
• Any other required schedules or reports.
• Prepare the Data Collection Form for Reporting on Audits of States, Local Governments, and Non-
Profit Organizations.
✓ Perform agreed -upon auditing procedures pertaining to the City's GANN Limit (Appropriations Limit) and
render a letter annually to the City regarding compliance.
✓ Prepare and submit the California State Controller's Cities Financial Transaction Report.
✓ Issue a separate "management letter" that includes recommendations for improvements on internal control,
accounting procedures and other significant observations that are considered to be no reportable
conditions. Management letters should be addressed to the Director of Finance /City Treasurer and the City
Manager.
✓ Provide assistance in the implementation of applicable GASB pronouncements not yet in effect.
25
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
The Firm will be available for consultation by phone on accounting and financial issues during the year at no extra
cost. The Firm will also serve as auditor for certain addition projects and studies as may be deemed necessary by
the City.
The Firm will make an immediate written report of all irregularities and illegal acts or indications of illegal acts of
which they become aware.
Supplemental reports, audits, or agreed -upon procedures must be added in a written agreement prior to
commencing audit work. The Firm and the City will discuss and approved the scope and associated costs of these
tasks.
Reports to be Issued
The following reports will be issued at the fiscal year's financial statements completion:
1. Comprehensive Annual Financial Report -40 copies
2. Single Audit Report — 20 copies
3. Management Letter — 15 copies
4. Independent Accountants' Report on Agreed -Upon Procedures Applied to Appropriations Limit Schedule —
15 copies.
Working Paper Retention and Access to Working Papers
The Firm will retain, at its own expense, all working papers and reports for a minimum of (7) seven years, unless
the City notifies the Firm in writing of the need to extend the retention period. Upon request, the Firm will make
working papers available to City of Seal Beach or other governmental agencies included in the federal or state
grant audits. The Firm will comply with reasonable requests from successor auditors and allow them to review
working papers that relate to matters of continuing accounting significance.
Objectives of Our Services
Our primary objective for the proposed audit is to examine the City's financial statements and express our opinion
on their faimess of presentation, in accordance with generally accepted accounting principles. Other objectives that
will benefit the City include the following:
• To offer beneficial observations and recommendations about policies and procedures for accounting and
operating controls
• To identify opportunities to make City operations more efficient and reduce costs
• To perform the audit efficiently and effectively, so disruption to office operations is minimized
• To provide continuing advisory services to help the City implement recommendations
• To meet these objectives at no additional cost to the City
The Engagement Team will perform the audit in accordance with the Firm's quality - control procedures, which
include following standard audit programs, careful planning, using industry- standardized software for auditing and
internal control documentation, and welcoming an objective review of audit work.
The Firm will supply portable computers to the onsite staff members.
Our audit approach emphasizes careful planning, open communication, and proper assignment of responsibilities.
This method ensures that audit requirements will be met with minimal disruption of the City's daily operations, and
that the audit will proceed efficiently with full understanding between the Engagement Team and the City.
26
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Proposed Segmentation of the Engagement and Timeline
The audit will be performed in four phases:
Initial Planning Meeting I During a mutually acceptable time frame, normally May through June of each
year.
The Engagement Partner and Manager will meet with City's Management to get up to speed with City
policies and procedures, establish any specific requirements Management may have, identification of
unique transactions, implementation of new GASB pronouncements, and develop the audit work plan for
the engagement.
Interim I May commence end of May, first week of June of each year.
The Engagement Team — including the Engagement Partner —will assess accounting policies adopted by
the City, obtain an understanding of the City and its operating environment, review internal controls on all
significant transaction classes, perform walkthroughs and /or tests of internal control, perform preliminary
analytical procedures, evaluate Single Audit compliance (if needed), identify any audit issues, and prepare
confirmation correspondence. The Engagement Team and City Management will establish expectations
including responsibilities and assignments for the year -end audit, and will hold a progress status meeting at
the end of the Interim phase.
Year -End I May commence by mid - September of each year.
The Engagement Team — including the Engagement Partner —will conduct audit procedures on account
balances in the general ledger, finish confirmation procedures, perform preliminary analytical procedures,
search for unrecorded liabilities, perform substantive analytical review procedures, complete work on
compliance with Federal Assistance, and conclude fieldwork. The Engagement Team and City
Management will hold an exit conference at the end of the Year -End phase.
Reporting I Draft copies of reports will be provided in by Mid- October of each year; Completed CAFR,
component unit financial statements, Single Audit report and other reports will be delivered by November 16'" of
each year.
The Firm will follow the schedule below:
1. Draft of CAFR and management letter – no later than October 31 s`
2. Final CAFR and management letter– no later than November 16"
3. Final GANN Limit report – no later than November 30"
4. Final Agency's Basic Financial Statements – no later than November 30'"
5. Final Single Audit – no later than December 31s`
The Firm will review and prepare audit reports and perform quality control procedures in accordance with
the Quality Control Standards issued by the AICPA. We will also review reports for compliance with GFOA
reporting guidelines at no additional cost. Any comments will be issued in a letter to Management. At the
City's request, the Engagement Partner and Manager will present the audit to the City's governing body.
The Firm will complete the audit fieldwork and issue all reports within the established timeframe, assuming no
internal City circumstances delay the audit.
Level of Staff and Number of Hours to be Assigned to Each Proposed Segment of the
Engagement
The Pun Group, LLP understands that the City is not only looking to employ our auditing services, but is also
seeking to receive value within that professional relationship. We believe that our value is derived from our in -depth
knowledge, experience, and commitment that our auditing firm employs. We stress and emphasize "employ ",
because all of the knowledge and expertise listed on paper will not benefit you unless it is applied. That is why we
have developed a plan that we feel will accomplish the objectives of the City and your particular needs. Our Firm
will utilize the information that you have shared with us and our experience from our previous audits of this nature,
from various government entities and cities to develop an effective plan for all major areas.
27
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Example of Major Areas (not limited to):
• Audit of the City's financial statements and the related notes to financial statements
• Single Audit procedures and required reporting (if applicable)
• Agreed -upon procedures on Appropriations Limit calculation
• Communication with those charged with governance
• Internal Control and Management Letters (if applicable)
Total Hours:
Staff classification Pertormmg ;�
Work �.�, Estimated Hours
Annually
Total Annual Hours:
470
Sample Size and the Extent to Which Statistical Sampling is to be Used in this
Engagement
In our audit approach, statistical sampling is used in conjunction with our skilled judgment and knowledge of each
situation. The population size and assurance level needed from any given test will determine the sample size used
in our testing.
Type and Extent of Analytical Procedures to be Used in the Engagement
We use analytical procedures during the interim phase to set up expectations for the year -to -date results and
balances and compare them with budgeted and prior -year amounts. This allows us to forecast year -end amounts,
reducing the workload during the year -end phase and allowing us to focus on areas of concern.
We also use trend and ratio analysis to identify any uncertain or unusual events. In order to perform these analysis,
our firm performs a survey of cities and counties and develops benchmarks on certain key financial indicators, such
as cost of services to tax revenues ratios, average general fund balance, capital assets, debt per capital, general
fund unassigned fund balance to total general fund expenditures, etc. Our staff members have previous experience
in successfully implanting analytical procedures to the City's benefit.
28
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Approach to be Taken to Gain and Document an Understanding of the City's Internal
Control Structure
Audit risk assessment will be established by an internal control review, combined with the Engagement Team's
understanding of the City's operations and accounting software. Using the Committee of Sponsoring Organizations
(COSO) Framework, staff members will evaluate the City's processes and identify any control deficiencies. These
diagnostic review procedures allow the Engagement Team to evaluate the City's systems and controls and to
provide constructive feedback to City Management.
The Engagement Team will perform a walkthrough of the City's accounting systems, including processes for
financial reporting, revenue recognition and cash receipts, purchasing /contract management and cash
disbursements, and payroll and related liabilities, etc. Auditors will document the process with a flowchart or
narrative summary.
Approach to be Taken in Determining Laws and Regulations that will be Subject to Audit
Test Work
The Firm stays continually up to date with audit requirements — including new regulations, compliance supplements,
state guidelines, and pertinent contracts —to ensure that we conduct audits in accordance with applicable laws and
regulations. We test transactions for compliance with the Single Audit Act, California Government Code, GANN
Appropriations Limit, provisions of applicable grant guidelines, requirements of local measures, etc.
For example, the Single Audit Act requires that we determine which grants to include in our audit and select
transactions from those grants for detailed testing. While most transactions are tested as part of the Interim phase,
we cannot determine which grants to test for the Single Audit until the Year -End phase of audit.
Our compliance audits of cash, investments, debt covenants, and other areas are performed in accordance with the
California Government code, which has many provisions and regulations covering investments.
Approach to be Taken in Drawing Audit Samples for Purposes of Tests of Compliance
To test compliance, we follow the AICPA's Audit Sampling Considerations of Circular A -133 Compliance Audits.
We will select an appropriate sample size based on our professional judgment and knowledge. Any deviations from
control and compliance requirements will be documented.
GASB Implementation Specialist
Gary M. Caporicci, the Firm's GASB Implementation Specialist, is an appointed member to the State Retirement
Advisory Committee by the State Controller and has tremendous expertise in assisting clients with the
implementation of GASB pronouncements.
For more than 40 years, Mr. Caporicci has successfully provided professional auditing, accounting, financial
reporting and management advisory/consulting services to a broad spectrum of governmental entities.
Caporicci is a leader in the new GASB standards going into effect in the coming years. He will actively assist the
City during the process of implementation and compliance related to new accounting standards.
29
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Client Training Seminar
Every year, the Firm hosts a conference to update governmental clients on new technical accounting and
financial issues. The day -long session —held in Danville, Clovis and Orange County — qualifies for eight hours of
CPE with the California Board of Accountancy.
Participants of this year's training seminar received a high -level examination of numerous technical issues,
including the following:
• Survey of Cities and Counties
• GASB Updates
• Lookback on implementation of GASB 68 and 71
• Single Audit Update – Are you ready for the Uniform Grant Guidance new Audit Requirements?
• The importance of fiscal policies
• The Latest and Greatest on Pensions, OPEB, Bankruptcies, Local Initiatives, and the Future of the Defined
Benefit Plan
GASB 74 and 75 – the New OPEB Standards
Importantly, all of our clients are invited to attend the Pun Group, LLP client training seminar FREE OF CHARGE.
30
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
SECTION VII — IDENTIFICATION OF ANTICIPATED POTENTIAL AUDIT
PROBLEMS
While we do not expect any problems with the audit, we will carefully investigate and monitor the following relevant
accounting issues:
• Investments:
• Compliance with GASB 31 and GASB 34
• Authorization and approval process for City investments
• Controls to assure City's compliance with investment limitations and types of specific investments
• Monitoring by the City of its investments
Financial Reporting:
• CAFR compliance with current reporting and disclosure requirements issued by GASB
• CAFR eligibility for financial reporting conformance awards issued by GFOA
• Compliance with the various GASBs in effect, especially the implementation of GASB 68 and 71
related to pension accounting
• Compliance with infrastructure obligations and regulatory provisions
• Internal Control Structure:
• City's internal control functions and compliance with proper internal control philosophies
• Computer- system processes and controls, and adequacy of the control environment
Over the period of the engagement, several new GASB pronouncements will become effective. The Engagement
Team will pay specific attention to the following new and upcoming pronouncements, and any others that become
effective during the proposal period, in order to determine proper implementation procedures:
• GASB 72 – Fair Value Measurement and Application
• GASB 73 – Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the
Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68
• GASB 74 – Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans
• GASB 75 – Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions
• GASB 76 – The Hierarchy of Generally Accepted Account Principles for State and Local Governments
• GASB 77 – Tax Abatement Disclosures
• GASB 78 – Pensions Provided through Certain Multiple - Employer Defined Benefit Pension Plans
• GASB 79 – Certain External Investment Pools and Pool Participants
• GASB 80 – Blending Requirements for Certain Component Units —an amendment of GASB Statement 14
• GASB 81 – Irrevocable Split - Interest Agreements
• GASB 82 – Pension Issues —an amendment of GASB Statements No. 67, No. 68, and No. 73
31
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
SECTION VIII — COST PROPOSAL
Certification
We are committed to the performance of a high quality audit at the most reasonable fee level possible, both initially
and throughout the engagement. Also, our partners will provide advice and consultation as needed, at no additional
cost to the City of Seal Beach.
Name of Firm: The Pun Group, LLP
Certified Public Accountants and Business Advisors
200 Sandpointe Avenue, Suite 600
Santa Ana. California 92707
Certification: Kenneth H. Pun is entitled to represent the Firm, empowered to submit the bid, and
authorized to sign a contract with the City of Seal Beach.
Kenneth H. Pun, CPA, CGMA I Managing Partner
The Pun Group, LLP
Total All - Inclusive Maximum Price
Following are our total fixed fees the three (3) fiscal years beginning with Fiscal Year Ending June 30, 2017, with
the option to renew for two (2) additional fiscal years.
*Based on the information provided by the City of Seal Beach and our understanding of the engagement, the City
is subject to the Single Audit Act in accordance with OMB Uniform Grant Guidance. The Single Audit fees are
based on (2) two major programs. If the City of Seal Beach applies for additional funding subsequent to the
preparation of this proposal, the fee to audit additional major programs will be $3,000 each. The number of
programs determined to be "major" will be based on OMB Uniform Grant Guidance. The Engagement Team will
discuss this with the City's Management before starting Single Audit work.
32
Optional
City of Seal Beach - Financial Audit
r
$ 38,500
r
$ 39,270
r
$ 40,055
$
40,857
EY 2020-21,
$
41,674
Successor Agency Testing - Financial Audit
$ 4,500
$ 4,590
$ 4,682
$
4,775
$
4,871
Single Audit (2 programs)*
$ 5,000
$ 5,100
$ 5,202
$
5,306
$
5,412
tndependent Accountants' Report on Agreed -
Upon Procedures Applied to Appropriations Limit
Schedule
$ 500
$ 510
$ 520
$
531
$
541
49,470
E 50 459
51
52,498
*Based on the information provided by the City of Seal Beach and our understanding of the engagement, the City
is subject to the Single Audit Act in accordance with OMB Uniform Grant Guidance. The Single Audit fees are
based on (2) two major programs. If the City of Seal Beach applies for additional funding subsequent to the
preparation of this proposal, the fee to audit additional major programs will be $3,000 each. The number of
programs determined to be "major" will be based on OMB Uniform Grant Guidance. The Engagement Team will
discuss this with the City's Management before starting Single Audit work.
32
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Out of Pocket Expenses in the Total Maximum Price and Reimbursement Rates
The Firm's policy is to maintain flexible billing rates in order to meet the needs of clients and help them control
costs. In the interest of starting our long -term relationship, we will absorb all costs required to familiarize ourselves
with the operations and accounting systems, as well as, travel and printing costs. Additionally, our Partners will be
available to provide advice and consultation as necessary to the City of Seal Beach. These costs will also be
absorbed by the Firm.
Rates for Additional Professional Services
Below is the Firm's standard hourly billing rates, delineated by staffing levels:
Auditor's Standard
Hourly
Billing Rates
Partner(s)
$
250
Senior Manager(s)
$
225
Manager(s)
$
200
Supervisor(s)
$
175
SeniorAccountant(s)
$
150
StaffAccountant(s)
$
125
Clerical
$
100
Any supplemental reports, audits, or agreed -upon procedures not covered by this proposal may be added in a
written agreement prior to commencing audit work. The Firm and the City will discuss and approve the scope and
associated costs of these tasks. Any additional work will be performed at the above quoted hourly rates.
Manner of Payment
Engagement Team members are required to maintain timesheets detailing the date, number of hours, and work
performed for every audit task. The Firm will collect these timesheets and bill the City of Seal Beach, at the rates
outlined in the Total All- Inclusive Maximum Price section, in four stages: (1) at the conclusion of the planning
phase, (2) at the conclusion of the interim phase, (3) at the conclusion of the Year -End phase, (4) and after
presentation and acceptance of the final audit reports. Interim billings will cover a period not less than a calendar
month. The billing amounts generally break down as follows:
For Planning 10%
For Interim work 40%
For Year -End work 40%
At Presentation and Acceptance of Final Reports 10%
Total 100%
33
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
Benefits of Choosing The Pun Group, LLP
The Pun Group, LLP is recognized for its professionalism, integrity, and providing clients with effective resolutions
for their unique circumstances and issues. Our Firm prides itself on being able to provide personalized client
services, and with that sentiment in mind, we have carefully chosen our engagement teams. The Pun Group's main
objective is always to provide the City with solutions and directions, led by highly experienced and capable partners
who can successfully implement the work and produce the results you expect. This philosophy and mindset allows
us to provide a superior level of service.
We trust that this proposal has given you the information you need about the Firm, the Engagement Team
members, overall audit approach, cost - saving measures, and audit fees. We are committed to exceeding your
expectations, and we look forward to bringing our experience and expertise to the City of Seal Beach and
providing you with the excellent level of service that you expect and deserve.
Thank You
Thank you for giving us the opportunity to introduce the Firm and submit our qualifications to provide you with audit
services. Please direct inquiries to:
Mr. Kenneth H. Pun, CPA, CGMA
Managing Partner
200 East Sandpointe Avenue, Suite 600
Santa Ana, California 92707
ken.pun @pungroup.com
(949) 777 -8801
Sincerely,
The Pun Group, LLP
Certified Public Accountants and Business Advisors
34
APPENDIX
✓ Proof of Insurance
35
This page intentionally left blank.
36
CITY OF SEAL BEACH
Proposal to Perform Professional Auditing Services
'4 OC R ' CERTIFICATE OF LIABILITY INSURANCE 3/81E 6 Dmrrrrl
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES
BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED
REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WANED, subject to
the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the
certificate holder in lieu of such endorsements .
PRODUCER
Wood Gutmann & ED art
15901 Red Hill Ave., Suite 100
Tustin CA 92780
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INDICATED. NOTWTHSTANUNG ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
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EL. EACH ACOIDEW
ISI.No.OD0
EL. DISEASE EA EMPLOYEE
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51.000.000
E L DISE0.5E POLICY LIMi
I S I,Op0,W0
C
EAO
Reim 1229111
Pending
112016
1112017
3,000.000 a90 1.000.000
OESCRIPIION OF OPERATIONa/ LOLALYJNB I VEHICLES (ACORO 1DI. PBBltimal RBm0A08c00EV10, moy OB eRacf00 R mOry 8000010 rpVIIM)
Proof Of Insurance Only
CERTIFICATE HOLDER CANCELLATION
®1988 -2014 ACORD CORPORATION. All rights reserved.
ACORD 25 (2014101) The ACORD name and logo are registered marks of ACORD
37
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN
Proof Of Insurance Only
ACCORDANCE WITH THE POLICY PROVISIONS.
AUUTTHOOaRRVEDD EPRESENTATNE
fi/ Y-1 I J.L+�
®1988 -2014 ACORD CORPORATION. All rights reserved.
ACORD 25 (2014101) The ACORD name and logo are registered marks of ACORD
37
200 East Sandpointe Avenue, Suite 600, Santa Ana, California 92707
Phone: (949) 777 -8800 1 Fax: (949) 777 -8850 1 www.pungroup.com
l -1-IE 0
I'UN GROUP
ACCOUNTANTS R ADVISORS