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CC - Item 4F - Professional Services Agreement with Lance,Soll and Lunghard, LLP for Auditing ServicesROSEMEAD CITY COUNCIL STAFF REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: BEN KIM, CITY MANAGER DATE: MAY 9, 2023 SUBJECT: PROFESSIONAL SERVICES AGREEMENT WITH LANCE, SOLL & LUNGHARD, LLP FOR AUDITING SERVICES SUMMARY A competitive bid process was conducted to find a certified public accounting (CPA) firm for professional auditing services. The City received three (3) qualified companies' that submitted proposals. Through an analysis of the proposals, a firm has been selected for recommendation to the City Council. An RFP for Professional Audit Services was released on March 7, 2023, via P1anetBids. On March 27, 2023, the City received three (3) proposals via PlanetBids. Staff reviewed each proposal for completeness, understanding of the scope of work, experience, and cost. All three of the qualified firms were invited to interview. The interview panel consisted of Bryan Chua, Finance Director, Mike Bruckner, Assistant City Manager, and Lily T. Valenzuela, Planning and Economic Development Manager, and Tess Anson, Finance Manager. The panel considered factors such as the firm's technical support, size and structure, anticipated support requirements of City's staff, overall experience of firm, audit team's experience, planned audit hours and understanding of the engagement, availability of client -education programs, and overall fit of the firm for Rosemead's needs. As a result of this process, staff selected the firm of Lance, Soll & Lunghard, LLP (LSL), which is the City's current auditor and has been providing audit services to the City for the past 5 years, as representing the best combination of qualifications, experience, credentials, City compatibility. Staff is recommending a continuation of professional audit services with the firm of LSL for an additional three (3) year term, with an option of a two- year extension. AGENDA ITEM 4.F City Council Meeting May 9, 2023 Pape 2 of 3 Pursuant to the City's purchasing policy, professional services providers should not be selected by bid price alone, and they were not. However, for comparison purposes the following illustrates prices bid by the various firms over the three-year term of the agreement: 1. Lance, Soll and Lunghard, LLP $160,449 2. The Pun Group, LLC 153,000 3. Badawi & Associates, LLC 125,970 Staff selected LSL based on their qualification and experience; however, staff requested LSL to lower their overall price as staff felt the cost was too high. LSL agreed to reduce the cost by 10% or $16,045, for a new total not -to -exceed cost of $144,404. STAFF RECOMMENDATION Staff recommends that the City Council: 1. Approve the firm of Lance, Soll & Lunghard, LLP as the City auditor; 2. Approve the attached three-year contract with two additional one-year extensions; and 3. Authorize the City Manager to sign the contract. FISCAL IMPACT The proposed contract is for three years, with a cost of $46,719 for fiscal year 2023, $48,121 for fiscal year 2024, and $49,564 for fiscal year 2025, for a total not -to -exceed cost of $144,404. The contract includes optional extensions for two more years, with a 3% increase each year. Sufficient funds are budgeted every year for this service. However, LSL's best and final offer, quoted fees for years 2024, 2025, and for each year of the two-year extension, could increase based on the higher of 3% or CPI with a maximum CPI adjustment capped at 5% per year. STRATEGIC PLAN IMPACT To achieve Goal 5 Finance, to inform the community about the City's finances. ENVIRONMENTAL REVIEW This item is not defined as a project under the California Environmental Quality Act (CEQA); therefore, the proposed plan is not subject to CEQA. PUBLIC NOTICE PROCESS This item has been noticed through the regular agenda notification process. City Council Meeting May 9, 2023 Page 3 of 3 Prepared by: Bryan Chua Director of Finance Attachment A: RFP No. 2023-03 Attachment B: LSL Proposal Attachment C: Draft Agreement for Services Attachment A Request for Proposal No. 2023-03 City of !Rpsemead, CA REQUEST FOR PROPOSAL NO. 2023-03 REQUEST FOR PROPOSAL FOR PROFESSIONAL AUDIT SERVICES SUBMITTALS: Electronic proposal submittal through the City of Rosemead Vendor Portal hosted by PlanetBids at: https://pbsystem.planetbids.com/portal/54150/portal-home Proposals submitted through PlanetBids Vendor Portal shall be submitted no later than Monday, March 27, 2023, at 10:30 a.m PST. CONTACT PERSON: Bryan Chua, Director of Finance City of Rosemead 8838 E. Valley Boulevard Rosemead, California 91770 (626) 569-2146 PROPOSALS RECEIVED AFTER THE TIME AND DATE STATED ABOVE SHALL NOT BE CONSIDERED. FACSIMILE AND E-MAIL PROPOSAL WILL NOT BE ACCEPTED. INQUIRIES: All questions, technical, commercial, or contractual in nature shall be directed to the Q&A section on the e -Procurement System, PlanetBids. All questions regarding this RFP must be submitted through PlanetBids no later than 2:00 PM PST, March 20, 2023. MODIFICATIONS: Any modification to this Request for Proposal will be provided to vendors who request notification of any modifications. ISSUANCE DATE: March 7, 2023 A. General Information The City of Rosemead ("City") will receive electronic proposals only for qualified certified public accounting firm to provide professional audit services, no later than 10:30 AM on Monday, March 27, 2023. Proposals shall be valid for 180 calendar days after the submission deadline. The City of Rosemead (City) invites proposals from qualified certified public accounting firms to perform its annual independent audit for the fiscal years ending June 30, 2023 through June 30, 2025 with the option of extending the engagement for an additional two years. These audits are to be performed in accordance with generally accepted auditing standards, the standards set forth for financial audits in the Government Auditing Standards as issued by the Comptroller General of the United States, the provisions of the federal Single Audit Act and the U.S. Office of Management and Budget (OMB) Circular A- 133, Audits of State and Local Governments and Non -Profit Organizations. Each proposal shall specify completely each and every item as set forth in these specifications. Any and all exceptions to the original specifications must be clearly stated in the proposal and the failure to set forth any exception shall be grounds for rejection of the proposal. The City reserves the right to reject any and all proposals and to waive any informalities in any proposal and select the proposal that best meets the City's needs. A contract shall be awarded, if at all, to the qualified consultant(s) whose competitive proposals are responsive to this RFP and are in the best interest of the City as determined by the City, a determination to be made solely by the City upon criteria as determined and weighed by the City. The decision of the City shall be final. In its discretion, the City may reject any proposal, abandon the purchase, or re -advertise. The contract will begin when awarded by the City Council. S. Scope of Services The City desires the auditor to express an opinion on the fair presentation of its basic financial statements based on their audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller of the United States. The City also desires the auditor to apply limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America. 1 The project scope of work includes performing an audit of the City's financial statements for the fiscal years ending June 30, 2023, 2024, 2025 with an option to extend the term for two (2) additional years for a maximum of 5 years. These audits are to be performed in accordance with the standards set forth for financial audits by the Governmental Accounting Standards Board (GASB), in the General Accounting Office (GAO), Governmental Auditing Standards, the U.S. Office of Management and Budget (OMB) Circular A-133, Audits of State and Local Governments and Non -Profit Organizations and the provisions of the Single Audit Act, as amended. The City of Rosemead has participated in the Government Finance Officers Association (GFOA) Certificate of Achievement Award for Excellence in Financial Reporting last year. It is anticipated that the City will continue to participate in these programs. The City will be responsible for preparing the introductory section, management discussion and analysis, and statistical sections of the Annual Comprehensive Financial Report (ACFR). The auditor shall prepare the City's ACFR and include an opinion in that report regarding the City's basic financial statements and supplemental financial schedules. It is anticipated that the auditor will provide assistance in meeting the requirements of these programs. The auditor will also prepare a separate Financial and Compliance Report for the Rosemead Housing Development Corporation and include an opinion in that report regarding the basic financial statements. The auditor will also prepare a tax return for the Rosemead Housing Development Corporation. The City also complies with OMB Circular A-133, Audit of State of Local Governments which requires an audit be made by an independent auditor in accordance with generally accepted government auditing standards covering financial and compliance audits. The audit must cover the entire operations of the City including the Successor Agency to the Rosemead Redevelopment Agency and must determine whether: (1) the financial statements present fairly its financial operations in accordance with GAAP, (2) the organization has internal accounting and other control systems to provide reasonable assurance that it is managing Federal financial assistance programs in compliance with applicable laws and regulations and (3) the organization has complied with laws and regulations that may have material effect on its financial statements and on each major Federal Assistance program. Other report that the auditors will be preparing is the State Controller's Report for the City of Rosemead. 2 Following the completion of the audit of the fiscal year's financial statements, the auditor shall issue: 1. A report on the fair presentation of the financial statements in conformity with generally accepted accounting principles. 2. A report on the internal control structure based on the auditor's understanding of the control structure and assessment of control risk. 3. A report on procedures applied to appropriations limit worksheets. 4. A 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 OMB Circular A-133. 5. Any other reports not stated herein but which may be required by the Comptroller General, Government Auditing Standards or U.S. Office of Management and Budget regarding single audits. 6. In the required report(s) on internal controls, the auditor shall communicate any reportable conditions found during the audit. A reportable condition shall be defined as a significant deficiency in the design or operation of the internal control structure, which could adversely affect the organization's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. Reportable conditions that are also material weaknesses shall be identified as such in the report. 7. Non -reportable conditions discovered by the auditors shall be reported in a separate letter to management, which shall be referred to in the report(s) on internal controls. Management is not aware of any unusual circumstances warranting an extended scope beyond that called for above. If in due course of the examination and it is warranted, the auditor shall agree to provide the City with all ascertainable facts relative to such circumstances. An estimate of additional services will be required and the additional cost shall be provided, so contract modifications may be completed before you commence with such extended examination. 3 C. Deliverables The independent auditing firm shall provide a final electronic pdf version of the ACFR to the Finance Department on or before December 15th of each year. Additionally the independent auditing firm shall provide electronic pdf versions of such documents, including GANN Limit, Management Letter, State Controller's Report, and Single Audit Report. The due dates for the final electronic pdf version of the documents are as follows: 1. Annual Comprehensive Financial Report (ACFR)— December 1511 2. Housing Development Corporation Financial Report — December 151h 3. State Controller's Report—January 15th 4. Housing Corporation Tax Return — March 1st 5. Single Audit Report — March 1st D. Information Requested from the Proposer To achieve a uniform review process and obtain the maximum degree of comparability, it is required that proposals be organized in the manner specified below: 1. Title Page a) Show the RFP reference number (RFP 2023-03), RFP subject, the name of the proposer firm, local address, telephone number, name of contact person and date. 2. Table of Contents b) Clearly identify the material by section and page number. 3. Letter of Transmittal (limit of one or two pages) a) Briefly state the proposer's understanding of the work to be done and make a positive commitment to perform the work within the time period. b) Give the names of the persons who will be authorized to make representations for the proposer, their titles, addresses and telephone numbers. 4. Profiles of the Proposer a) State whether the firm is national or international. b) Give the location of the office from which the work is to be done and the number of partners, managers, supervisors, seniors and other professional staff employed at the office. 4 c) Describe the range of activities performed by the local office such as: audit, accounting, tax service or management services. d) Describe the local office's computer capability. e) Describe the firm's participation in the "peer review" program. Provide the date and extent of the local office's last participation. 5. Summary of Proposer's Qualifications (in addition to minimum qualifications). a) Identify the partners, seniors, managers, and supervisors who will work on the audit, including staff from other than the local office. Include the resumes for each supervisory person to be assigned to the audit. The resumes may be included as an appendix. b) Describe recent auditing experience similar to the type of audit requested. Specifically, address experience related to the audit of: i. Municipalities complying with OMB Circular A-133. ii. Federal and State Grant programs. c) Describe the engagement team experience and capabilities to assist government bond reporting requirements. d) Describe the professional activities of your firm or of the staff members who support your commitment to governmental accounting. e) Describe any regulatory action taken against your firm or local office. f) Give names, addresses and telephone numbers of five current and former municipal audit clients served by your local office within the past five years. Include the type of services performed, dates and length of service for each. E. Scope Section Clearly describe the scope of the required services to be provided. In addition to services included for the examination, specific reference must be made to the requirements of OMB Circular A-133. The auditors shall familiarize themselves with and comply with the provision of any and all federal, state and county orders, statutes, ordinances, charters, bond covenants, administrative code and orders, rules and regulations that pertain to the work required in the engagement. 5 F. Submittal of Cost File Submit one digital copy within PlanetBids eProcurement system under the Cost File tab with the following information: 1. Total All -Inclusive Maximum Price The Cost File should contain all pricing information relative to performing the audit engagement as described in this request for proposals. The total all-inclusive maximum price to be bid is to contain all direct and indirect costs, including all out-of-pocket expenses. The City requests that the not -to -exceed fee be provided for all services requested and proposed. The maximum annual fee will remain fixed for the three years covered by the audit engagement agreement. The City will not be responsible for expenses incurred in preparing and submitting the Technical Proposal or the Cost File. Such costs should not be included in the proposal. The first page of the Cost File should include the following information: a. Name of firm. b. Certification that the person signing the proposal is entitled to represent the Firm, empowered to submit the bid, and authorized to sign a contract with the City. C. The audit proposal must include a cost breakdown, in the following format. The annual fee for the audit of each fiscal year 2022-2023, 2023-2024, and 2024- 2025 shall not exceed the following: 2022/23 2023/24 2024/25 City of Rosemead ACFR Audit Successor Agency Audit Housing Corp. Audit Housing Corp. Tax Return Single Audit Report State Controller's Report Appropriations Limit AUP* Gann Limit Review *Agreed Upon Procedure Include percentage modification for the fourth and fifth year, if extended. 2. Rates by Partner, Specialist, Supervisory and Staff Level Times Hours Anticipated for each. The second page of the Cost File should include a schedule of professional fees and expenses, which supports the total all- inclusive maximum price. G. Instructions for Submission of Proposal 1. Registering as a Vendor: Proponents must be registered as a vendor with the City to download the RFP document(s) and to submit a proposal. If not already registered, Proponents may "Register As A Vendor" via the City's website: https://Pbsystem.planetbids.com/portal/54150/portal-home 2. It is the Proponent's sole responsibility to contact the City's online bid management provider (PlanetBids at 818-992-1771) to resolve any technical issues related to electronic bidding, including (but not limited to) registering as a vendor, updating passwords, updating profiles, uploading/downloading documents, submitting an electronic bid/proposal, etc. 3. Submittal of Proposal and Fee Schedule: It is the responsibility of the Proponent to ensure the proposal is delivered on time. Any proposal received afterthe deadline will be disqualified and will not be considered. Proposals sent via facsimile will not be accepted. Documents must be uploaded in PDF format. It is the Proponent's responsibility to ensure their proposal documents are properly uploaded onto the City's online bid management system. Proposals that are missing pages, cannot be opened, etc. may be considered unresponsive. Hard copies submitted to the City, in lieu of electronic copies uploaded onto the system, will not be accepted as a viable proposal. If Proponent has difficulty uploading their response(s) to the PlanetBids system, they shall be solely responsible for contacting PlanetBids at 818-992-1771 for assistance. The City does not have the capability to assist with uploading Proponent documents. 4. Examination of the Content of the RFP: By submitting a proposal, the Proponent represents that it has thoroughly examined and become familiar with the contents of the RFP and that it is capable of performing quality work to achieve the City objectives. The submission of a signed proposal shall be considered an agreement to all the terms, conditions, and specifications provided in the RFP. vA H. Evaluation of Proposals Proposals will be evaluated by City Staff to ascertain which proposer best meets the need of the City. Factors to be considered are: 1) The proposal's responsiveness in clearly stating the understanding of the work to be performed. 2) The firm's technical support. 3) The audit team's experience and professional activities and independence. 4) The firm's size and structure. 5) The anticipated support requirements of City staff showing personnel class and hours expected. 6) Although a significant factor, the audit fee may not be the dominant factor. Cost will be a particularly important factor when all other evaluating criteria are relatively equal. Oral interviews may be arranged anytime during the selection process to assist in making the final decision. The City reserves the right to select a firm on any combination of price, experience in auditing governmental agencies, references and other features that are deemed to be in the best interests of the City. All factors will be considered in the selection process. L Additional Information and Contact 1) The City will not be liable for any costs not included in the proposal and subsequent contracted -for costs. 2) The City reserves the right to conduct personal interviews of any or all proposers prior to selection. 3) The City reserves the right to reject any and all proposals, the right in its sole discretion to accept the proposal it considers most favorable to the City's interest and the right to waive minor irregularities in the procedures. 4) The contracting firm shall make itself available to the City Council and management to answer questions related to audit findings. 5) Compensation for the conduct of audit service will be paid upon submission of progress billings and of a final billing, along with the required reports. 6) The successful proposer will be required to sign the standard City Professional Services Agreement, including meeting the City's minimum insurance requirements, and obtain a business license. 7) City staff requests that, once proposals have been submitted, no unsolicited contact and/or discussions concerning these proposals be made prior to the evaluation of all proposals. 8) The total audit staffing should be at a level sufficient to complete the audit in the 9 time scheduled and specified in the RFP. In addition, the audit staff should remain constant through each year's audit process. At least one staff member from the prior year's audit is to be a member of the subsequent year's audit team. All questions, technical, commercial, or contractual in nature shall be directed to the Q&A section on the e -Procurement System, PlanetBids. All questions regarding this RFP must be submitted through PlanetBids no later than 2:00 PM, March 20, 2023. J. Working Paper Retention All working papers and reports must be retained at the auditor's expense for a minimum of seven (7) years, unless the firm is notified in writing by the City of the need to extend the retention period. The auditor will be required to make working papers available to the City. In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance. II. DESCRIPTION OF THE GOVERNMENT A. Background Information Rosemead is a General Law city which operates under a Council -Manager form of municipal government. The City Council consists of five members elected at large for overlapping four-year terms. The Mayor is selected from the City Council members and serves a one-year term. The City Council appoints the City Manager, City Attorney and City Clerk. In addition, the City Council appoints the members of all advisory Commissions, Boards and Committees. The City Council also acts as the Board of Directors of the Rosemead Housing Development Corporation. The City occupies a land area of 5.2 square miles and serves a population of more than 50,000. The City is a contract city, contracting out services such as police, City Attorney, sanitation, tree maintenance, building and safety, and information technology. Fire prevention and fire suppression services are provided by Los Angeles County. With a total fiscal year 2022-2023 operating budget of $43.3 million, including a General Fund expenditure budget of $27.7 million, the City employs a workforce of 70 full-time employees. The City's fiscal year begins on July 11t and ends on June 30'h City Hall is located at 8838 E Valley Blvd, Rosemead, CA 91770. The telephone number is 626-569-2100. The City's website address is httos://www.citvofrosemead.ora/. The City also has two blended component units: 1) the Rosemead Financing Authority (the Authority) and 2) the Rosemead Housing Development Corporation (RHDC). The City of Rosemead also provides a full range of services, including recreational activities and cultural events. B. Fund Structure Government Funds General Fund 1 Special Revenue Fund 21 Capital Project Fund 1 Total Government Funds 23 Business Type Funds Internal Service Funds 2 Total Business Type Funds 2 Fiduciary Funds Trust Fund 1 Total Fiduciary Funds 1 TOTAL FUNDS 26 C. Pension Plans The City participates in the State of California Public Employees Retirement System (CaIPERS), a cost-sharing multiple -employer public employee defined pension plan. The City has Miscellaneous contracts for Classic and PEPRA members. D. Computer Systems/Financial Software The City uses Tyler Incode software for its financial systems. 10 Attachment B Lance, Soll & Lunghard, LLP Proposal LSL:e':: PREPARED BY Lance, Soll & Lunghard, LLP Certified Public Accountants License Number 2584 TECHNICAL PROPOSAL City of Rosemead Professional Audit Services RFP 2023-03 Date of Submission: March 27, 2023 VALID FOR 180 DAYS Authorized by Ryan Domino, CPA, Partner 203 N. Brea Blvd., Suite 203 Brea. CA 92821 City of Rosemead RFP 2023-03 Professional Audit Services TABLE OF CONTENTS TABLE OF CONTENTS.............................................................................................................1 TRANSMITTAL LETTER............................................................................................................2 PROPOSER PROFILE...............................................................................................................4 FirmHistory & Size..................................................................................................................4 Location...................................................................................................................................4 License to Practice in California...............................................................................................5 Independence..........................................................................................................................5 Government Auditing Standards..............................................................................................5 Training& Seminars................................................................................................................5 OurCore Values......................................................................................................................6 Bestof Accounting Award........................................................................................................6 Benefits of Working with LSL...................................................................................................7 SingleAudit Experience...........................................................................................................7 GFOAAward Program.............................................................................................................8 Desk Review / Disciplinary Action............................................................................................8 PeerReview............................................................................................................................8 QUALIFICATIONS & EXPERIENCE OF PROPOSED PROJECT TEAM.................................11 Engagement Team Resumes................................................................................................11 ContinuingEducation.............................................................................................................11 OrganizationalChart ..............................................................................................................12 Quality of Staff Assurance.....................................................................................................12 SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENT ENTITIES....................................13 ClientReferences..................................................................................................................13 SPECIFIC AUDIT APPROACH................................................................................................16 Work Plan & Specific Audit Approach....................................................................................16 Proposed Segmentation........................................................................................................16 AuditTimeline........................................................................................................................17 Approach to Selecting Sample Sizes.....................................................................................18 Type And Extent Of Analytical Procedures............................................................................18 LSL's Approach to Understanding the City's Internal Control Structure..................................18 Determining Laws And Regulations Subject To Audit Test Work...........................................19 Drawing Audit Samples for Compliance.................................................................................19 Working Papers Retention and Access..................................................................................19 EXHIBIT A — CURRENT LIST OF MUNICIPAL CLIENTS EXHIBIT B — ENGAGEMENT TEAM RESUMES City of Rosemead RFP 2023-03 Professional Audit Services TRANSMITTAL LETTER March 27, 2023 Bryan Chua Director of Finance City of Rosemead 8838 E. Valley Boulevard Rosemead, CA 91770 Dear Mr. Chua, LANCE, SOLL & LUNGHARD, LLP ("LSL CPAs", "LSL") is pleased to present our proposal for auditing services, and we value the opportunity to present our professional qualifications to the City of Rosemead ("City"). This proposal highlights our firm's strength and stability, outlining our demonstrated experience, knowledge, and creative problem -solving capabilities as a leader in the field of governmental auditing. With our comprehensive government experience and our history with the City of Rosemead, we believe you will continue to find that LSL CPAs is the best -qualified accounting firm for the City. LSL understands that the City of Rosemead is seeking a qualified firm to perform the City's financial audit along with its Successor Agency and Housing Corp, Single Audit, and agreed upon audit procedures pertaining to the City's GANN Limit, as well as prepare the State Controller's Report beginning with fiscal year ending June 30, 2023 and the two subsequent fiscal years thereafter, with the option of two (2) one-year extensions, upon review and mutual agreement. LSL understands its responsibilities to perform audits and express opinions on the City's financial statements as well as its fair presentation. These audits will be performed in accordance with GAGAS and generally accepted accounting principles (GAAP), and LSL will assess the internal controls over the programs administering federal financial assistance. We affirm that our proposal is in accordance with all terms, conditions, and requirements contained in the RFP issued March 7, 2023, and that our proposal is a firm and irrevocable offer for one hundred eighty (180) calendar days following the closing date of the receipt of proposals. City of Rosemead RFP 2023-03 Professional Audit Services We invite you to discuss all aspects of this proposal to ensure your satisfaction and preferences are met. Ryan Domino is the assigned Engagement Partner for this proposal and is authorized to make representations on behalf of our firm. He can be reached at (714) 672-0022 and at Ryan. DominoOlslcoas.com. Sincerely, Ryan Domino, CPA, Partner Lance, Soll & Lunghard, LLP 203 N. Brea Blvd., Suite 203 Brea, CA 92821 City of Rosemead RFP 2023-03 Professional Audit Services PROPOSER PROFILE FIRM HISTORY & SIZE LSL CPAs was established in 1929 and has grown as a leader in the government sector. LSL is a full-service accounting firm with offices in Brea, Laguna Hills, Sacramento, and Santa Ana, California as well as in The Woodlands, Texas, with a dynamic team of 14 partners and 135 employees. We provide auditing, accounting, and consulting services to over 100 municipal clients including cities, counties, water and electric utilities, and special-purpose government agencies. Generally, our government sector services break down into the following major classifications: attestation, compliance, consulting, outsourced accounting and reporting, year-end close assistance, interim staffing, strategic planning, and tax services. LOCATION Although we have five physical locations, LSL's virtual footprint for our government team spans across the United States. Our offices regularly share staff and resources to ensure all audits are completed timely and efficiently, giving you access to our entire governmental team. LSL will not be subcontracting any portion of the audits. Our Offices •• Our virtual footprint means we're everywhere you are. But we have physical offices, too! Brea, CA 203 N. Brea Blvd., Suite 203 Brea, CA 92821 Phone: (714) 672-0022 Santa Ana, CA Laguna Hills, CA 24422 Avenida de Is Carlota, Suite 275 Laguna Hills, CA 92653 Tel: (949) 8298299 1611 E. Fourth Street, Suite 200 Santa Ana, CA 92701 Phone: (714) 569-1000 The Woodlands, TX Sacramento, CA 2151 River Plaza Dr., Suite 150 Sacramento, CA 95833 Phone: (916) 503-9691 21 Waterway Avenue, Suite 30089 The Woodlands, 7%77380 Phone: (936) 828-4587 City of Rosemead RFP 2023-03 Professional Audit Services LICENSE TO PRACTICE IN CALIFORNIA LSL CPAs is a Limited Liability Partnership and is not a wholly owned subsidiary of a parent company. LSL is a public accounting firm licensed by the State of California, Department of Consumer Affairs, as a Public Accounting Partnership. As a firm, we are members of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants. All key staff to be assigned to this engagement are or will be licensed by the State of California to practice as Certified Public Accountants. INDEPENDENCE LSL meets the independence requirements as defined by the Government Auditing Standards. Our partners do not own any other business organization that has in the past, or will in the future, be providing services, supplies, materials, or equipment to the City. A listing of our firm's clients is distributed annually to all employees for review and proper documentation of possible independence threats. GOVERNMENT AUDITING STANDARDS LSL understands its responsibilities to perform audits and issue opinions on the City's financial statements as well as its fair presentation. Our financial audits are performed in accordance with the Generally Accepted Government Auditing Standards (GAGAS) issued by the Comptroller General of the United States, and Single Audits are performed in accordance with the requirements of the Uniform Guidance. LSL will also evaluate the adequacy of the City's internal control system and will make the best recommendations for the City's growth and improvement. TRAINING & SEMINARS LSL regularly leads seminars and training courses on introductory governmental accounting, preliminary views on financial reporting, internal control risk assessments, and all GASB updates and best practices, which are made available to our clients for additional information and continued support. These are opportunities that will be made available through our firm to the City for training or continuing professional education credits on current issues or governmental auditing and accounting in general. City of Rosemead RFP 2023-03 Professional Audit Services OUR CORE VALUES As we continue to grow and evolve, we recognized our core values needed to grow and change with us. Our values weren't decided on by management and handed down, every member of the LSL team worked together to share what values matter most to us. The LSL team came up with the following five core values that embody how we approach each other, our work, and our clients. PURSUE EXCELLENCE LOVE WHAT YOU DO LEAD WITH INTEGRITY meg\ ACCOMPLISH MORE FORWARDTHINKING TOGETHER BEST OF ACCOUNTING AWARD LSL CPAs delivers high-quality service and has earned the ClearlyRated Best of Accounting award over the past four years. This exclusive program awards accounting firms who demonstrate high-level service of excellence within the accounting industry and solely leverages statistically validated survey responses from our clients. 0©©©r 4.7 based on 646 ratings City of Rosemead RFP 2023-03 Professional Audit Services BENEFITS OF WORKING WITH LSL LSL is a multi -location firm with formidable resources that provides a personal feel and hands-on client experience. LSL is ranked #12 on the Orange County Business Journal's CPA Firm Book of Lists, which highlights the top accounting firms in Orange County. Ranked 9 12 on the Orange 93 years young and the 14 Partners who are 135 employees (and County Business Journal's wisdom to go with it! dedicated to solving your growing!) CPA Firm Book of Lists issues SINGLE AUDIT EXPERIENCE Our firm has top industry experience in performing Single Audits for local government agencies. We perform Single Audits for many clients under the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, Audit Requirements of Federal Awards (Uniform Guidance), and the United States Office of Management and Budget (OMB). A list of government audit clients is included in Exhibit A noting clients for which a single audit has been performed in the last fiscal year. In addition, the table below and on the following page details a few examples of federal programs that LSL has had recent experience in auditing. U.S. Department or Agriculture 10.557 Special Supplemental Nutrition Program for Women, Infant, and Children U.S. Department of Housing & Urban Development 14.195 Section 8 Housing Assistance Payment Program U.S. Department of Housing & Urban Development 14.218 Community Delelopment Block Grants/Entitlement Grants Community Development Block Grants/State's program and Non -Entitlement U.S. Department of Housing & Urban Delelopment 14.228 Grants in Hawaii U.S. Department of Housing & Urban Development 14.239 HOME Investment Partnerships Program U.S. Department of Housing & Urban Dewlopmend 14.856 Lower Income Housing Assistance Program Section 8 Moderate Rehabilitation U.S. Department of Housing & Urban Development 14.871 Section 8 Housing Choice Vouchers U.S. Department of Transportation 20.106 Airport Improvement Program U.S. Department of Transportation 20.205 Highway Planning and Construction U.S. Department of Transportation 20.507 Federal Transit Formula Grants U.S. Department of Treasury 21.019 Coronamms Relief Fund (CRF) U.S. Department of Treasury 21.027 Comnadms State and Local Fiscal Recovery Funds (SLFRF) City of Rosemead RFP 2023-03 Professional Audit Services U.S. Engronmental Protection Agency 66.458 Capitalization Grants for Clean Water State Revolting Funds U.S. Department of Health and Human Serices 93.563 Child Support Enforcement U.S. Department of Health and Human Services 93.667 Social SeMces Block Grant U.S. Department of Health and Human Sauces 93.676 Unaccompanied Alien Children Program U.S. Department of Health and Human Services 93.778 Medical Assistant Program - Medicaid Cluster U.S. Department of Homeland Security 97.036 Disaster Grants- Public Assistance (Presidentially Declared Disasters) U.S. Department of Homeland Security 97.067 Homeland Security Giant Program GFOA AWARD PROGRAM At LSL, we understand the importance of obtaining and maintaining the Certificate of Excellence in Financial Reporting from the GFOA. We prepare the financial statements and footnote disclosures for most of our local governments that have received the GFOA award. All our governmental partners, managers, and seniors have been closely involved in the preparation of these reports. Exhibit A also notates the clients currently receiving the GFOA award. DESK REVIEW / DISCIPLINARY ACTION There have been no disciplinary actions against our organization since its inception. There have been no litigations against our firm in the past three years. Our Single Audit reports are desk reviewed either by the federal cognizant agency or the State Controller's Office acting as the Oversight Agency. LSL has never had a report rejected by any of these agencies and are highly regarded and recognized by the staff of the State Controller's Office for top-quality reports. 7:1 =1;1;1 ZLVA I ATA Our firm has participated in the Peer Review Program since its inception. All our peer reviews have covered governmental engagements and have received pass ratings. Our peer review for our 2022 fiscal year is currently in progress. Our previous and most recent peer review was conducted by Mark F. Wille, A Professional Accountancy Corporation and is provided on the following pages MARK F WILLE Certified Public Accountant . xvEc� w;ca....,.c• c.,nrawiKx. Report on the Firm's System of Quality Control January 17, 2020 City of Rosemead RFP 2023-03 Professional Audit Services To the Paruters Lance, Solt & Lunghard, LLP and the Pecr Review Committee of the California Society of CPAs We have reviewed the system of quality control for the accounting and auditing practice of Lance, Solt & Lunghard, LLP (the firm) in effect for the year ended May 31, 2019. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants. A summary of the nature, objectives, scope, limitations of, and the procedures performed in a Systcm Review as described in the standards may be found at vvww.alepa.orglprsummM. The summary also includes an explanation of how engagements identified as not performed or reported in conformity with applicable professional standards, if any, are evaluated by a peer reviewer to determine a peer review rating. Firm's Responsibility Ilse firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects_ 'IV firm is also responsible for evaluating actions to promptly rcxnediate engagements da -mW as not performed or reported in conformity with professional standards, when appropriate, and for remediating weaknesses in its system of quality control, if any. Peer Reviewer's Responsibility Engagements selected for review included engagements performed under Gowminent rindiring Standards, including compliance audits under the Single Audit Act and audits of employee benefit plans. Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance therewith based on our review. Required Selections and Considerations As a part of our review, we considered reviews by regulatory entities as communicated by the firm, if applicable, in determining the nature and extent of our procedures. City of Rosemead RFP 2023-03 Professional Audit Services Opinion In our opinion, the system of quality control for the accounting and auditing practice of Lance, Sol] & Lunghard, LLP in effect for the year ended May 31. 2019 has beat suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting inconformity with applicable professional standards in all material respects. Finns can receive a rating ofpass, pass with defrcierxiWes) orfad- Lance, Soil & Lunghard, LLP has received a peer review rating of pass. Nark F Wille A Professional Accountancy Corporation ®■ ■® 1451 Q"a Sueet N9 107 Newport Beach, CaGforma 91610 949.657.10/0 Fax 949.852.1045 mfwcpa.com City of Rosemead RFP 2023-03 Professional Audit Services QUALIFICATIONS & EXPERIENCE OF PROPOSED PROJECT TEAM LSL's Partner, Ryan Domino, is the assigned engagement partner for this proposal and is authorized to make representations on behalf of our firm. Ryan has a strong technical focus and specializes in governmental accounting and auditing. He is an expert on Single Audit planning and execution and holds advanced certification from the AICPA. Ryan provides a competitive advantage as a member of GFOA's Special Review Committee for the Award for Excellence in Financial Reporting. Other key employees who would be assigned to the engagement include Brandon Young, James Butera, and Melissa Gonzalez. The audit team will also consist of an additional 2 to 3 staff auditors for audit fieldwork. The members of our team have extensive experience providing auditing services for cities, counties, and special-purpose government agencies, and all staff assigned to the City will be employed by LSL on a full-time basis. ENGAGEMENT TEAM RESUMES Team resumes are available in Exhibit B, which list their position in the firm, education, and years and types of experience, including continuing education courses taken during the past three years. CONTINUING EDUCATION As a firm policy, all professional government staff meet the requirement of 40 hours of continuing education every year, with at least 24 hours in governmental accounting and auditing in a two-year period. Our educational programs include training from CaICPA, AICPA, Government Audit Quality Center, and GFOA. ORGANIZATIONAL CHART City of Rosemead RFP 2023-03 Professional Audit Services Brandon Young, CPA Ryan Domino, CPA Quality Assurance Partner Engagement Partner Over 12 years of experience Over 11 years of experience James Butera, CPA Audit Manager Over 8 years of experience Melissa Gonzalez Experienced Audit Associate Over 3 years of experience Staff Auditor I ■ Staff Auditor I ■ Staff Auditor QUALITY OF STAFF ASSURANCE LSL will ensure the quality of staffing over the term of the engagement through firm policies that provide for maintaining continuity of engagement teams, except in instances where an employee has left the firm or has been promoted. All other changes in staffing at the Manager position and above will first have the City's expressed written permission. Our focused efforts to obtain and retain quality staff have further enabled us to provide high levels of service to our clients. If changes are required, our extensive team of government auditors provides for qualified replacements. City of Rosemead RFP 2023-03 Professional Audit Services SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENT ENTITIES A current list of municipal clients can be found in Exhibit A, listing LSL's most significant engagements performed within the last five (5) years that are similar to the engagement described in this request for proposal. CLIENT REFERENCES The following reflects a showcase of our experience in providing professional auditing services to other governmental organizations ranked on the basis of total staff hours. Contact Steve Charelian, Finance Director Email Address SCharelian@manhattanbeach.gov Telephone (310) 802-5554 Address 1400 Highland Avenue, Manhattan Beach, CA 90266 Dates of Service 2020 — present Scope of Services City ACFR Audit; Single Audit; Appropriations (GANN) Limit Scope of Services AUP; City Street Report Engagement Partners Ryan Domino; Kelly Telford Total Hours 654 Contact Ken AI -Imam, Chief Financial Officer / City Treasurer Email Address KAlimam@sanjuancapistrano.org Telephone (949) 443-6301 Address 30448 Rancho Viejo Road, San Juan Capistrano, CA 92675 Dates of Service 2021 — present Scope of Services City ACFR Audit; Single Audit; Appropriations (GANN) Limit AUP; CASA Audit Engagement Partners Ryan Domino; Bryan Gruber Total Hours 527 City of Rosemead RFP 2023-03 Professional Audit Services Contact Katrin Bandhauer, Assistant Finance Director Email Address KBandhauer@cityoforange.org Telephone (714) 744-2230 Address 300 E. Chapman Avenue, Orange, CA 92866 Dates of Service 2021 — present City ACFR Audit; Single Audit; Appropriations (GANN) Limit Scope of Services AUP; AQMD Audit; Housing Successor Compliance; Engagement Partners Investment Portfolio AUP Engagement Partners Ryan Domino; Deborah Harper Total Hours 473 Contact Christie Donnelly, Acting Management Services Director Email Address C_Donnelly@ci.lompoc.ca.us Telephone (805) 875-8283 Address 100 Civic Center Plaza, Lompoc, CA 93436 Dates of Service 2021 — present City ACFR Audit; Single Audit; Appropriations (GANN) Limit Scope of Services AUP; Debt Compliance AUP Engagement Partners Ryan Domino Total Hours 476 City of Rosemead RFP 2023-03 Professional Audit Services Contact Jake Rahn, Financial Services Officer Email Address RahnJ@san-clemente.org Telephone (949) 361-8360 Address 910 Calle Negocio, San Clemente, CA 92673 Dates of Service 2020 — present City ACFR Audit; Single Audit; Appropriations (GANN) Limit Scope of Services AUP; CASA Audit Engagement Partners Ryan Domino; Deborah Harper Total Hours 463 City of Rosemead RFP 2023-03 Professional Audit Services SPECIFIC AUDIT APPROACH WORK PLAN & SPECIFIC AUDIT APPROACH We use a governmental audit program that will be tailored to the City's operations to accommodate your specific circumstance and organizational structure. LSL's audit programs are organized by financial statement category, which we believe is the most effective and efficient approach to substantially reduce the risk of omitting important procedures. Our approach is designed to increase audit efficiency by linking financial statement assertions, audit objectives, and procedures that are basic to most governmental audit engagements. Additionally, throughout the year and during the period of this engagement, our team will be available on a day-to-day basis for consultation on accounting and reporting matters related to new government accounting standards and other ongoing auditing needs. Your LSL team will also communicate new state and national developments affecting municipal finance and reporting standards and trends, including changes in federal/state grant program accounting, and other reporting requirements. PROPOSED SEGMENTATION Our audit services will be divided into three segments. Segment 1 - Planning and Obtaining an Understanding LSL will provide an annual audit communication letter, engagement letter, and Government Audit Quality Center Information letter. The audit communication letter is to be provided to the City Council and can be communicated orally to the City Council or audit committee if requested, where we will discuss planning stages, responsibilities of the City Council, Auditors, and Management, and provide an opportunity to communicate with us as the auditors. An entrance conference will be scheduled prior to the agreed-upon week of interim testing to ensure that the transition to new auditors is as seamless as possible. Discussions in this meeting include, but are not limited to, an understanding of reports and key milestones for deliverables, prior audit reportable conditions and issues, and "Prepared by Client" (PBC) schedules. A trial balance is requested for our planning meeting to assist the LSL team in obtaining knowledge of economic conditions, industry elements, and new standards that may affect the City. We will compile a list of PBC items based on our review of the prior year's financial statements and the gathered information that will be provided to the City one month prior to testing or earlier if requested. We operate on a paperless software system City of Rosemead RFP 2023-03 Professional Audit Services and provide a secured cloud -based portal for all clients. The City will have a separate folder that can be customized to organize, and upload requested schedules, support documents, etc. After interim testing, we will hold an exit meeting to discuss potential weaknesses, if any, and provide feedback for improvements or valuable information gathered from any outside clientele that would benefit the City. Segment 2 - Financial Audit Testing Based on the information gathered thus far, we will utilize a customized audit program based on the risk assessment developed during our assessment of the City's internal controls and Government Auditing Standards. The primary benefit of a tailored program is a focused set of procedures to address relevant areas. We believe that this approach is both effective and efficient and is critical to compliance with other material laws and regulations. We will annually compile another customized PBC list for the year-end testing provided at least one month prior or earlier if requested. We will request trial balances from the City for our analytical review to be provided one week before testing is scheduled to commence. Year-end testing will include testing of the balance sheet, revenue and expenditures accounts, confirmation of selected balances, analytical procedures, evaluation of the internal controls, and preparation of reports and letters. Segment 3 — Conclusion Based on our year-end exit meeting we will discuss a plan to finalize the financial statements according to the timetable of the City. We will schedule dates for the initial and final drafts including time for LSL's and the City's review and approval of the financial statements. This period will also account for review by the engagement partner and quality assurance partner. After the review and receipt of the signed Representation Letter from the City, LSL will provide a final report mid-December. AUDIT TIMELINE The LSL team holds a high standard for timely delivery and a high level of communication of key milestones. LSL assumes under the Scope of Work that the City will provide any and all necessary information needed to complete the financial statement and Single Audits. LSL will identify and communicate the status of information pending from the City that will hinder LSL in completing the objectives of the engagement in a timely manner. LSL also assumes that City of Rosemead RFP 2023-03 Professional Audit Services under the Scope of Work, the City will have closed its books and will present LSL with general ledger balances that are auditable prior to the start of fieldwork. APPROACH TO SELECTING SAMPLE SIZES For tests of controls, we use audit sampling. Tests of controls are procedures directed towards determining the effectiveness of the design or operation of an internal structure policy or procedures. Audit sampling is typically used for tests of controls and compliance that involve the inspection of documents and reports indicating the performance of the applicable policy or procedures and compliance with the applicable laws and regulations. Sample sizes vary based on the population and risk-based calculations. TYPE AND EXTENT OF ANALYTICAL PROCEDURES For the audits of the financial statements, we will use analytical procedures as an overall review of the financial information in the preliminary and final stages of the audits. These procedures are designed to assist us in planning our audits and in assessing the propriety of the conclusions reached and evaluating the overall financial statement presentation. The procedures to be utilized consist of determining expectations for changes to significant revenue, expenditure, and balance sheet accounts, reading the financial statements and related notes, reviewing the budget and related material, and focusing on overall relationships within the financial statements. Once determined, these are reviewed to evaluate if the changes appear reasonable or require further analysis. For all significant differences, explanations are obtained as to why the situation occurred and additional substantive procedures may be applied, and related evidence is gathered to resolve concerns and questions. LSL'S APPROACH TO UNDERSTANDING THE CITY'S INTERNAL CONTROL STRUCTURE To gain an understanding of the internal control structure over the financial statements, LSL will perform procedures as required by SAS 122-125 to obtain an understanding of the entity and its environment along with assessing the risks of material misstatements. This review will include the internal control areas of financial reporting, cash, revenues and receivables, utility billing, expenses, and accounts payable, payroll, capital assets, long-term debt, and grant reporting, as applicable. Based on the result of our review, LSL will issue a management letter (SAS 115 Letter) that will identify any significant deficiencies and/or material weaknesses noted as required by the Government Auditing Standards issued by the Comptroller General of the United States. LSL obtains an understanding through a variety of ways throughout the year. We will conduct interviews with the management of finance along with each audit section City of Rosemead RFP 2023-03 Professional Audit Services responsible party to review the processes and controls through observation and discussions. Based on our observations, we will sample transactions as part of a "walk- through" to verify the system of control is working in accordance with policies and procedures. DETERMINING LAWS AND REGULATIONS SUBJECT TO AUDIT TEST WORK The Laws and Regulations that will be subject to audit test work are determined by the applicable laws, regulations, contracts, and grant agreements which we identify through the understanding we obtain of the City and our extensive experience with other governmental entities. DRAWING AUDIT SAMPLES FOR COMPLIANCE The sampling procedures test the operating effectiveness of an internal control structure policy or procedure by determining how the policy or procedure was applied, the consistency with which it was applied during the audit period, and by whom it was applied. We will draw samples for disbursements, receipts, and payroll when applicable. Each document selected will be tested for various attributes that are designed to verify compliance with different aspects of internal controls and applicable laws and regulations. Additionally, each sample item will be tested for coding to the proper accounts and posting to the general ledger. WORKING PAPERS RETENTION AND ACCESS All working papers and reports will be retained at LSL's expense for a minimum of seven (7) years unless otherwise notified in writing by the City of the need to extend that retention period. Upon written request, we will make working papers available to parties designated by the City. Furthermore, we will respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance. City of Rosemead RFP 2023-03 Professional Audit Services EXHIBIT A - CURRENT LIST OF MUNICIPAL CLIENTS Agoura Hills Ms, C. Pinatas, Finance Manager F 7 818-597-7319 Big Bear Lake Ms, K. Ent, Director of Government Services F, S 24 9098665831 Burbank Ms, C. L Giraldo, Financial Services Director 1 11 818-238-5487 Camarillo Mr. M. Unbe, Finance Director F, S 5 805-388-5320 Canyon Lake Mr C. Mann, City Manager F 27 909-244-2955 Cathedral City Mr. K. Biersack, Fiscal Officer F, S 12 7501 Chino Hills M, C. Buhagiar, Finance Director F, S 25 909-364-2600 Chula Vista Ms. S. Schoen, Director o1 Finance F, S 8 619409-3818 Citrus Heights Mr. R. Prasad, Accnuntlng Manager F, S 3 916-7274705 Citrus Heights Water Distract Mr. A. PreGado, Accounting Manager F, U 1 916735-7703 Covered California Mr. J. Watkins, Chief Financial Officer F, S 6 9111 Cypress Ms. D. Mullally, Assistant Finance Director F, S 5 714-2296-700 Diamond Bar Mr. J. Jacobsen. Finance Director F, S 12 9094139-7051 Dinuba Ms. K. Solis, Interim Administrative Services Director F, S 4 559-591-5900 Dixon Ms. K. Zswal Finance Director F, S 7 70M78-7000 Downey Mr. A. Gandhi Finance Director F, S 7 552-904-7265 East Bay Municipal Utility District Ms, A. Miller, Controller F, U 3 510.287-0230 Eastern Municipal Water Distnct Ms, W. Gainz, Controller F, S 1 951-9283777 Fullerton Ms, C. Moynihan, Fiscal Services Manager F. S 11 714-7383133 Galt M, C. Nguyen, Accounting Manager F, S 4 209-366-7140 Georgetown Divas Public Utility District Mr. A. Coyam General Manager F, S 4 5303334356 Grand Terrace Ms, C. Clayton, Senior Accountant F 8 909-8246621 India Mr. R. Rockwell, Assistant City ManagerlDirector of Finance F. S 6 760-3914029 Inglewood Ms. L. Gomez, Accounting Manager F, S 7 310412-5127 Irwindale Ms. J. Duran, Finance Director F 27 626430-2268 Jumpa Community Services Distract Mr. S. Popelar. Director of Finance and Administration F 3 91 Lake Elsinore Ma S. Buckley Finance Manager F, S 5 951-874-3124 Lathrop Mr. T. Hedegard, Deputy Finance Director F. S 1 209-941-7320 Live Oak Mr. J. Ramsey, Finance Director F, S 5 916-9998511 Livingston Ms. V. Portillo, Finance Director/Interim City Manager F, S 1 209394-5550 Lompoc Ms, C. Donnelly, Acting Management Services Erector IF S 1 8058758283 Las Angeles County Development Authonty Mr. M. Fortini, Finance Director F, S 5 626-586-1890 Malibu Ms. R. Feldman, CM Manager F 18 310455-2489 Manhattan Beach Mr. S. Charelian, Finance Director F 17 3104102-5553 Menlo Park Ms, P. Send a, Interim Finance 8 Budget Manager F 3 6503308632 Monrovia M, B. Bullis, Director of Administrative Services F. S 21 626-9325510 Monterey One Water Mr. F. Marsh, Chief Financial Officer F, S, U 7 83160.54623 Monterey Peninsula Airport District Mr T. Berghalz, Deputy Executive Director of Finance and Administration F, S 3 831b 8-7000 x201 Moorpark Mr. P. Gagajena, Finance Director F S _r - -------lilt 4 8055178213 Newark Ms. K. Lee, Finance Director F 3 510.5784280 Oceanside Ms, J. Mays, Accounting Manager F. S 13 7664353887 Ontario International Airport Ms. K. Snow, Finance Manager F, S i 5 714415-9636 Orange Ms. K Bandhauer, Assistant Finance Director F, S 1 714-7445500 Orange County Fire Authority Ms. G. Cheung, Accounting Manager F, S 3 714-5738000 Ordidard Dale Water Distract Mr. R. Richard. Finance Manager F, U 3 562-941-0114 Palm Desert Mr J. Espinoza, Assistant Finance Director F 5 760-346-0611 Pleasanton Ms. T. Died, Finance Director F, S 1 925-931-5402 Rancho Cucamonga Ms. T. Layne, Finance Officer F, S, U 44 909-9831851 Redondo Beach Ms. J. Paul, Finance Director F, S 5 310372-1171x2428 Rialto Ms, K. Stevens, Deputy Director of Finance F, S 1 909-021-7242 Riverside Ms, N. Garcia, Controller F. S, U 3 951826-5466 Rolling Hills Mr. R. Samano, Interim Finance Director F 13 310377-1521 Rosemead Ms. G. Molleda, City Manager F, S 4 626589-2146 Roseville Mr. N. Rasa., Accounting Manager F 1 916-7745314 ' San Bernardino Municipal Water Department Ms. C. Mouser, Director of Finance F 3 909-0535010 ' San Clemente Mr J. Rahn, Finance Director F 4 949-361-8360 ' San Joaquin Council of Governments Ms. G. Oroscc, Manager of Finance F, S 3 209-235-0454 ' San Juan Capistrano Mr K. AI -Imam, Chief Financial Officer F S 1 9494435301 San Marino Mr. M. Siegrned, Controller F 28 626300-0700 ' Santa Clanta Valley Water Agency Ms. A. Aguer, Controller F U 3 661-513-1237 ' Santa Manisa Ms. G. Decevalles48ughes, Finance Director F S 6 310458-8281 ' Shatter Mr R. Sanchez, Adminisirafive Services Director F, S 1 661-746-5043 Six Basins Watennaster Mr. L. Stahlhoefer, Controller F 13 949-420-3030 ' Solana Beach Mr, R. Smith, Finance Director F 10 858-720.2463 Sonoma County Fair 8 Exposition Inc. Mr. M. Mergers, Fair Financial Officer F 3 707573-9342 Sutter County Mr. N. Black, Auditor -Controller F,S 2 530-822-7439 • Three Valleys Water Distnct Mr J. Linthicum, Chief Financial Officer F, U 14 9096215568 ' Union Sanitary District Ms. L, Brenner. Finance 8 Acquisition Services Coach F. U 5 510471-7647 ' Volo County Mr. C. Rinde, Chief Financial Officer F, S 3 530-866-0050 Service Codes: F - Financial Audit S - Single Audit I - Internal Audit U - Utility Agency Participated in the GFOA Award Programs and has received or anticipates receiving outstanding awards City of Rosemead RFP 2023-03 Professional Audit Services EXHIBIT B - ENGAGEMENT TEAM RESUMES LICENSE Certified Public Accountant — California 2014 Texas — pending Advanced Single Audit Certificate — 2018 ENGAGEMENTS Big Bear Fire Authority City of Agoura Hills City of Big Bear Lake City of Canyon Lake City of Chino Hills City of Chula Vista City of Fullerton City of Indio City of Malibu City of Moorpark City of Oceanside City of Pasadena City of Riverside City of Rolling Hills City of Rosemead City of San Clemente City of San Marino City of Santa Monica City of Solana Beach City of Vista Clean Energy Alliance Coachella Valley Association of Gov. Diversified Education Company Inland Empire Utilities Agency L.A. County Development Authority Orange County Fire Authority Rainbow Municipal Water District San Bernardino MWD Six Basins Watermaster Ryan Domino, CPA ENGAGEMENT PARTNER ACHIEVEMENTS Ryan currently serves as a technical reviewer for the Government Finance Officers Association (GFOA). He has been involved with teaching current audit and accounting -related material at LSL's in- house training seminars. CONTINUING EDUCATION 231 total hours over the last three years, 204 of which were in governmental accounting and auditing subjects. Ryan meets the requirements of governmental CPE Government Auditing Standards. EXPERIENCE Ryan has over ten years of experience in governmental auditing including financial statement audits, preparation of Annual Comprehensive Financial Reports, Housing Successor compliance audits, TDA compliance audits, Single Audits, Federal Student Financial Aid audits, and various consulting and agreed-upon procedures projects. Ryan is one of the firm's leaders in ensuring audit quality control and Government Practice training for staff. He has also made several presentations to City Councils, Boards of Directors, and Audit Committees. His work has entailed: • The preparation of the ACFR for entities involved in CSMFO and GFOA in the U.S. and Canada • Audit review and technical assistance throughout the year to deliver the most up-to-date information with current GASB pronouncements • Presentation of audit results to Audit Committees and other authorities charged with governance. MEMBERSHIPS AICPA, CaICPA, CSMFO, GFOA EDUCATION Bachelor of Arts degree in Business Administration with an emphasis in Accounting — California State University, Fullerton, 2012 LICENSE Certified Public Accountant — California 2014 ENGAGEMENTS City of Chula Vista City of Citrus Heights City of Coronado City of Dinuba City of Dixon City of Emeryville City of Galt City of Lathrop City of Live Oak City of Livingston City of Menlo Park City of Newark City of Pasadena City of Pleasanton City of Riverside City of Roseville City of Santa Monica City of Shafter Coachella Valley Water District County of Sutter County of Yolo Covered California East Bay Municipal Utility District GDPUD Inland Empire Utilities Agency Monterey Peninsula Airport District Orange County Water District San Joaquin Council of Gov. Santa Clarita Valley Water Agency Three Valleys Municipal Water Dist. Union Sanitary District Brandon Younq, CPA QUALITY ASSURANCE PARTNER ACHIEVEMENTS Brandon is an expert in Governmental Accounting and Auditing, with over twelve years of experience serving a wide range of clients. He recently was appointed to serve on the prestigious AICPA State and Local Government Expert Panel, with the term beginning in May of 2023, and also has served on the CaICPA Governmental Accounting and Auditing Committee since 2018. CONTINUING EDUCATION 125 total hours over the last three years, 74 of which were in governmental accounting and auditing subjects. Brandon meets the requirements of governmental CPE Government Auditing Standards. EXPERIENCE Brandon has performed all phases of governmental audits with numerous presentations to City Councils, Board of Supervisors, Board of Directors, and Audit Committees over the past twelve years. He routinely presents at CSMFO, local chapter meetings and CaISACA on current accounting and auditing material. He also regularly teaches current audit and accounting -related material at LSL training seminars, webinars, and client education workshops and training events. His work has entailed: • The preparation of the ACFR for entities involved in CSMFO and GFOA in the U.S. • Audit review and technical assistance throughout the year to deliver the most up to date information with current GASB pronouncements • Presentation of audit results to Audit Committees or others charged with governance • Risk assessment and evaluation of internal controls with COSO and Federal Green Book • Single Audits in accordance with new Uniform Guidance MEMBERSHIPS AICPA, AICPA SLG Expert Panel CaICPA, CaICPA State GAA, CSMFO,GFOA EDUCATION Bachelor of Arts degree in Accounting, Magna Cum Laude — Vanguard University, 2012 LICENSE Certified Public Accountant — New York 2015 ENGAGEMENTS Chino Hills Community Foundation City of American Canyon City of Batavia, NY City of Chino Hills City of Chula Vista City of Geneva, NY City of Livingston City of Newark City of Palm Desert City of Pleasanton City of Rialto City of Rochester, NY City of Rosemead County of Genesee, NY County of Sutter County of Yolo Jamestown Board of Public Utilities Rochester City School District James Butera, CPA AUDIT MANAGER ACHIEVEMENTS James was previously a Director of Finance at a regional municipality in New York. He brings his experience in financial audits, Single Audits, ACFR, and financial statement preparation, plus in-depth knowledge of GASB implementation consulting, bookkeeping consulting, and Controller consulting services. CONTINUING EDUCATION 133 total hours over the last three years, 110 of which were in governmental accounting and auditing subjects. James meets the requirements of governmental CPE Government Auditing Standards. James has performed all phases of our government audits, including cities, counties, and special districts for theirACFR and Single Audits. His work has entailed: • Assisting in the preparation of the Annual Comprehensive Financial Report • Performing analytical and substantive audit procedures on account balances • Planning the nature, timing, and extent of procedures involved in the audit process audits in accordance with the provisions of Government Auditing Standards and the provisions of the Single Audit Act and the Uniform Guidance • Assisting clients with the preparation and review of GASB 68, 75, and 84 journal entries • Review of capital assets, debt service, and federal and state award schedules MEMBERSHIPS CaICPA, GFOA EDUCATION Bachelor of Science & MBA in Accounting — St. John Fisher University, 2014 ENGAGEMENTS City of Agoura Hills City of Canyon Lake City of Chula Vista City of Grand Terrace City of Manhattan Beach City of Moorpark City of Pleasanton City of Rancho Cucamonga City of Rosemead City of Roseville City of Santa Monica City of Shafter City of Vacaville City of Woodland County of Yolo East Bay Municipal Utility District Mesa Water District San Joaquin Council of Govts Yolo Habitat Conservancy Yorba Linda Water District Melissa Gonzalez EXPERIENCED AUDIT ASSOCIATE ACHIEVEMENTS Melissa assists with and performs all phases of our governmental audits, including cities, counties, and special districts, ACFR audits, and Single Audits. CONTINUING EDUCATION 40 total hours over the last three years in governmental accounting and auditing subjects. Melissa meets the requirements of governmental CPE Government Auditing Standards. EXPERIENCE Melissa ensures a successful audit by preparing and managing our client's budgets and financial audits. She brings her experience in financial and accounting operations and ensures that the engagement with each client runs smoothly. Her work entails: • Analyzing and reviewing accounting records and financial statements • Evaluating internal accounting control systems, audit risk, materiality, and compliance • Preparation of audit work papers EDUCATION Bachelor of Science degree in Business Administration -Accountancy — California State University, Long Beach, 2020 Master of Science degree in Accounting — California State University, Long Beach, 2021 Attachment C Draft Professional Services Agreement CITY OF ROSEMEAD PROFESSIONAL SERVICES AGREEMENT 1. PARTIES AND DATE. This Agreement is made and entered into this _ day of May, 2023 by and between the City of Rosemead, a municipal organization organized under the laws of the State of California with its principal place of business at 8838 E. Valley Blvd., Rosemead, California 91770 ("City") and Lance, Soll & Lunghard, certified public accountants with its principal place of business at 203 N. Brea Blvd., Suite 203 Brea, CA 92821 ("AUDITOR"). City and AUDITOR are sometimes individually referred to herein as "Party" and collectively as 'Parties." 2. RECITALS. 2.1 AUDITOR. AUDITOR desires to perform and assume responsibility for the provision of certain professional services required by the City on the terms and conditions set forth in this Agreement. AUDITOR represents that it is competent and qualified certified public accountant, duly authorized to practice and licensed as such by the California State Board of Accountancy. 2.2 Project. City desires to engage AUDITOR to render auditing services (`Project') as set forth in this Agreement. 3. TERMS. 3.1 Scope of Services and Term. 3.1.1 General Scope of Services. AUDITOR promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional auditing services necessary for the Project ("Services"). The Services are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations. 3.1.2 Term. The term of this Agreement shall be for a period of three (3) consecutive years, beginning with the fiscal year ending June 30, 2023 with the option to extend for two subsequent years. AUDITOR shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines. UN 3.2 Responsibilities of AUDITOR. 3.2.1 Control and Payment of Subordinates; Independent Contractor. The Services shall be performed by AUDITOR or under its supervision. AUDITOR will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. City retains AUDITOR on an independent contractor basis and not as an employee. AUDITOR retains the right to perform similar or different services for others during the term of this Agreement. Any additional personnel performing the Services under this Agreement on behalf of AUDITOR shall also not be employees of City and shall at all times be under AUDITOR's exclusive direction and control. AUDITOR 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. AUDITOR 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. 3.2.2 Schedule of Services. AUDITOR shall perform the Services expeditiously, within the term of this Agreement, and in accordance with the Schedule of Services set forth in Exhibit "B" attached hereto and incorporated herein by reference. AUDITOR represents that it has the professional and technical personnel required to perform the Services in conformance with such conditions. In order to facilitate AUDITOR's conformance with the Schedule, City shall respond to AUDITOR's submittals in a timely manner. Upon request of City, AUDITOR shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services. 3.2.3 Conformance to Applicable Requirements. All work prepared by AUDITOR shall be subject to the approval of City. 3.2.4 Substitution of Key Personnel. AUDITOR has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, AUDITOR may substitute other personnel of at least equal competence upon written approval of City. In the event that City and AUDITOR cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. As discussed below, any personnel who fail or refuse to perform the Services in a manner acceptable to the City, or who are determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property, shall be promptly removed from the Project by the AUDITOR at the request of the City. The key personnel for performance of this Agreement are as follows: Ryan Domino. 3.2.5 City's Representative. The City hereby designates the Finance Director, or his or her designee, to act as its representative for the performance of this Agreement ("City's Representative"). City's Representative shall have the power to act on behalf of the City for all purposes under this Contract. AUDITOR shall not accept direction or orders from any person other than the City's Representative or his or her designee. A-2 3.2.6 AUDITOR's Representative. AUDITOR hereby designates Ryan Domino, or his designee, to act as its representative for the performance of this Agreement ("AUDITOR's Representative"). AUDITOR's Representative shall have full authority to represent and act on behalf of the AUDITOR for all purposes under this Agreement. The AUDITOR's Representative shall supervise and direct the Services, using his/her best skill and attention, and shall be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the Services under this Agreement. 3.2.7 Coordination of Services. AUDITOR agrees to work closely with City staff in the performance of Services and shall be available to City's staff, AUDITORs and other staff at all reasonable times. 3.2.8 Standard of Care; Performance of Employees. AUDITOR shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. AUDITOR represents and maintains that it is skilled in the professional calling necessary to perform the Services. AUDITOR warrants that all employees and subcontractors shall have sufficient skill and experience to perform the Services assigned to them. Finally, AUDITOR represents that it, its employees and subcontractors have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, including a City Business License, and that such licenses and approvals shall be maintained throughout the term of this Agreement. As provided for in the indemnification provisions of this Agreement, AUDITOR shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the AUDITOR's failure to comply with the standard of care provided for herein. Any employee of the AUDITOR or its sub -AUDITORS who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Project by the AUDITOR and shall not be re-employed to perform any of the Services or to work on the Project. 3.2.9 Laws and Regulations. AUDITOR shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services, including all Cal/OSHA requirements, and shall give all notices required by law. AUDITOR shall be liable for all violations of such laws and regulations in connection with Services. If the AUDITOR performs any work knowing it to be contrary to such laws, rules and regulations and without giving written notice to the City, AUDITOR shall be solely responsible for all costs arising therefrom. AUDITOR shall defend, indemnify and hold City, its officials, directors, officers, employees and agents free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations. 3.2.10 Insurance. 3.2.10.1 Time for Compliance. AUDITOR shall maintain prior to the beginning of and for the direction of this Agreement insurance coverage as specified in Exhibit D attached to and part of this agreement. 3.2.11 Safety. AUDITOR shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the AUDITOR shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions as applicable shall include, but shall not be limited to: (A) adequate life protection and life saving equipment and procedures; (B) instructions in accident prevention for all employees and subcontractors, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or injuries; and (C) adequate facilities for the proper inspection and maintenance of all safety measures. 3.3 Fees and Payments. 3.3.1 Compensation. AUDITOR shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit C attached hereto and incorporated herein by reference. The total compensation shall not exceed $46,719 for fiscal year ending June 30, 2023. The total compensation shall not exceed $48,121 for fiscal year ending June 30, 2024. The total compensation shall not exceed $49,564 for fiscal year ending June 30, 2025. The total compensation shall not exceed $51,052 and $52,583 for the optional fiscal years ending June 30, 2026 and 2027, respectively. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement. 3.3.2 Payment of Compensation. AUDITOR shall submit to City statement which indicates work completed by AUDITOR. Payment to AUDITOR shall be made thirty (30) days after receipt by CITY of invoices from AUDITOR, which shall be rendered not more often than monthly. Special examinations, surveys, or detailed reports of any nature outside the scope of this Agreement shall be billed separately by AUDITOR and must be specifically authorized in writing by CITY in advance of such assitional services proposed to be provided. 3.3.3 Reimbursement for Expenses. AUDITOR shall not be reimbursed for any expenses unless authorized in writing by City. 3.3.4 Extra Work. At any time during the term of this Agreement, City may request that AUDITOR perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. AUDITOR shall not perform, nor be compensated for, Extra Work without written authorization from City's Representative. IMM 3.3.5 Prevailing Wages. AUDITOR is aware of the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 1600, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. If the Services are being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, AUDITOR agrees to fully comply with such Prevailing Wage Laws. City shall provide AUDITOR with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. AUDITOR shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the AUDITOR's principal place of business and at the project site. AUDITOR shall defend, indemnify and hold the City, its elected officials, officers, employees and agents free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. 3.4 Accounting Records. 3.4.1 Maintenance and Inspection. AUDITOR shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. AUDITOR shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. AUDITOR shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. 3.5 General Provisions. 3.5.1 Termination of Agreement. 3.5.1.1 Grounds for Termination. City may, by written notice to AUDITOR, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to AUDITOR of such termination, and specifying the effective date thereof, at seven (7) calender days before the effective date of such termination. Upon termination, AUDITOR shall be compensated for all direct service hours on work -in -progress for those services which have been adequately rendered to City; however, in no event shall the City be obligated to pay more than the total amount of the Contract. AUDITOR may not terminate this Agreement except for cause. 3.5.1.2 Effect of Termination. If this Agreement is terminated as provided herein, City may require AUDITOR to provide all finished or unfinished Documents and Data and other information of any kind prepared by AUDITOR in connection with the performance of Services under this Agreement. AUDITOR shall be required to provide such document and other information within fifteen (15) days of the request. A-5 3.5.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. 3.5.2 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: AUDITOR: Lance, Soll & Lunhard, LLP 203 N. Brea Blvd., Suite 203 Brea, CA 92821 Attn: Ryan Domino CITY: City of Rosemead 8838 E. Valley Boulevard Rosemead, CA 91770 Attn: Bryan Chua Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. 3.5.3 Ownership of Materials and Confidentiality. 3.5.3.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by AUDITOR under this Agreement ("Documents & Data"). AUDITOR shall require all subcontractors to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. AUDITOR represents and warrants that AUDITOR has the legal right to license any and all Documents & Data. AUDITOR makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than AUDITOR or provided to AUDITOR by the City. City shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City's sole risk. AUDITOR's audit workpapers are proprietary in nature and not the ownership of the City. up 3.5.3.2 Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents and Data either created by or provided to AUDITOR in connection with the performance of this Agreement shall be held confidential by AUDITOR. Such materials shall not, without the prior written consent of City, be used by AUDITOR for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to AUDITOR which is otherwise known to AUDITOR or is generally known, or has become known, to the related industry shall be deemed confidential. AUDITOR shall not use City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City. 3.5.4 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. 3.5.5 Attorney's Fees. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney's fees and all other costs of such action. 3.5.6 Indemnification. AUDITOR shall defend, indemnify and hold the City, its officials, officers, employees, volunteers and agents 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 alleged acts, omissions or willful misconduct of AUDITOR, its officials, officers, employees, agents, AUDITORs and contractors arising out of or in connection with the performance of the Services, the Project or this Agreement, including without limitation the payment of all consequential damages and attorneys fees and other related costs and expenses. AUDITOR shall defend, at AUDITOR's own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against City, its directors, officials, officers, employees, agents or volunteers. AUDITOR shall pay and satisfy any judgment, award or decree that may be rendered against City or its directors, officials, officers, employees, agents or volunteers, in any such suit, action or other legal proceeding. AUDITOR shall reimburse City and its directors, officials, officers, 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. AUDITOR's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the City, its directors, officials officers, employees, agents or volunteers 3.5.7 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. A-7 3.5.8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in Los Angeles County. 3.5.9 Time of Essence. Time is of the essence for each and every provision of this Agreement. 3.5. 10 City's Right to Employ Other AUDITORS. City reserves right to employ other AUDITORs in connection with this Project. 3.5.11 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the parties. 3.5.12 Assignment or Transfer. AUDITOR shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the City. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. 3.5.13 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to AUDITOR include all personnel, employees, agents, and subcontractors of AUDITOR, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. 3.5.14 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. 3.5.15 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. 3.5.16 No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. 3.5.17 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. 3.5.18 Prohibited Interests. AUDITOR maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for AUDITOR, to solicit or secure this Agreement. Further, AUDITOR warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for AUDITOR, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. AUDITOR further agrees to file, or shall cause its employees or subAUDITORs to file, a Statement of Economic Interest with the City's Filing Officer as required under state law in the performance of the Services. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. 3.5.19 Equal Opportunity Employment. AUDITOR represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. AUDITOR shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. 3.5.20 Labor Certification. By its signature hereunder, AUDITOR certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's 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. 3.5.21 Authority to Enter Agreement. AUDITOR has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. 3.5.22 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original. 3.6 Subcontracting. 3.6.1 Prior Approval Required. AUDITOR shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. [signatures on next page] CITY OF ROSEMEAD LANCE, SOLL & LUNGHARD, LLP 0 Ben Kim, City Manager Attest: Ericka Hernandez City Clerk Approved as to Form: Rachel Richman City Attorney M Name: Ryan Domino Title: Partner EXHIBIT A SCOPE OF SERVICES A. AUDITOR shall perform an audit of all funds of the City, in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, issued by the Comptroller of the United States, and express an opinion on the fair presentation of the basic financial statements. LSL will assist in the preparation of the Annual Comprehensive Financial Report (ACFR). B. AUDITOR will prepare a report on the internal control structure based on the understanding of the control structure and assessment of control risk. C. AUDITOR will perform agreed-upon procedures related to the annual review of the City's appropriation limit calculations in accordance with Article XIII -13 of the California Constitution and issue a report thereon. D. AUDITOR will prepare a management letter, including appropriate recommendations regarding the City's systems of internal control, accounting procedures, and other significant observations. E. AUDITOR will perform a Single Audit in accordance with the Federal Uniform Guidance during those years when one is required. F. AUDITOR will prepare the annual State Controller Office Financial Transactions Report for the City. G. AUDITOR will assist in the preparation of the Rosemead Housing Corporation financial statement and Form 990, Return of Organization Exempt from Income Tax. A-11 EXHIBIT B SCHEDULE OF SERVICES Complete Interim Audit Field work • Year-end Field work First Drafts of all Audit Reports • MD&A and Transmittal Letters • Final Drafts of all Audit Reports Final Reports issued • State Controller's Report • Housing Corporation Tax Return • Single Audit Report As Completed by July 15 Completed by October 31 Sent by November 7 Sent by November 15 Completed by November 30 Completed by December 15 Completed by January 15 Complete by March 1 Completed by March 1 EXHIBIT C COMPENSATION City of Rosemead ACFRAudit 5 38.120 $ 37204 $ 38.320 $ 39.47D S 40.054 Housing Development Corp. Audit S 3.020 S 3.111 $ 3.204 S 3,300 $ 3.399 State Controller's Report S 3.900 $ 4,099 $ 4,222 $ 4,349 S 4,479 Housing Corporation Tax Return $ 1,050 $ ',700 $ 1,751 $ 1,004 $ 1,858 Successor Agency Audit S 770 $ 793 $ 817 $ 842 S 887 GANN Limit Review S 4D0 $ 412 $ 424 $ 437 S 450 Single Audit^ $ 5.970 $ 8.149 b 6,333 $ 8.523 S 8.719 Out -of -Pocket Expenses rrrioLd lrx*xLd Mchaded krhrAM hrluded Professional Se rvices Discount (10%) S (S 19f) S (5,3M S 13,507) S 15,673) S (5,843' 'The quoted fees above include a standard 3% increase year -ever -year. However, this percentage increase will be compared to the CPl indicator each year and will be adjusted if that amount exceeds 3%. The higher of the 3% or CPl indicator up to a maximum of 5% wid be used each year. "Price includes one major program. Each additional program is S2,000- LSUS STANDARD HOURLY BILLING RATES Partner $340 $360 $380 $400 5420 Senior Manager $260 $270 $280 $290 S300 Manager $220 $230 $240 $250 S260 Supervisor $195 $210 $220 5230 S240 Senior Accountant $170 $180 $190 $200 S210 Experienced Staff $145 $150 $160 $170 $180 Staff Accountant $125 $130 $140 $150 S160 Clerical $90 $100 $110 $120 5130 C-1 EXHIBIT D INSURANCE REQUIREMENTS Commercial General Liability Insurance using Insurance Services Office "Commercial General Liability" policy form CG 00 01 or the exact equivalent. Defense costs must be paid in addition to limits. There shall be no cross liability exclusion for claims or suits by one insured against another. Limits are subject to review but in no event less than $1,000,000 per occurrence. Business Auto Coverage on ISO Business Auto Coverage form CA 00 01 including symbol 1 (Any Auto) or the exact equivalent. Limits are subject to review, but in no event to be less that $1,000,000 per accident. If AUDITOR owns no vehicles, this requirement may be satisfied by a non -owned auto endorsement to the general liability policy described above. If AUDITOR or AUDITOR's employees will use personal autos in any way on this project, AUDITOR shall provide evidence of personal auto liability coverage for each such person. Workers Compensation on a state -approved policy form providing statutory benefits as required by law with employer's liability limits no less than $1,000,000 per accident or disease. Professional Liability or Errors and Omissions Insurance as appropriate shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of the AUDITOR and "Covered Professional Services" as designated in the policy must specifically include work performed under this agreement. The policy limit shall be no less than $1,000,000 per claim and in the aggregate. The policy must "pay on behalf of the insured and must include a provision establishing the insurer's duty to defend. The policy retroactive date shall be on or before the effective date of this agreement. General conditions pertaining to provision of insurance coverage by AUDITOR. AUDITOR and City agree to the following with respect to insurance provided by AUDITOR: 1. AUDITOR agrees to have its insurer endorse the third party general liability coverage required herein to include as additional insureds City, its officials, employees and agents, using standard ISO endorsement No. CG 2010 with an edition prior to 1992. AUDITOR also agrees to require all contractors, and subcontractors to do likewise. 2. No liability insurance coverage provided to comply with this Agreement shall prohibit AUDITOR, or AUDITOR's employees, or agents, from waiving the right of subrogation prior to a loss. AUDITOR agrees to waive subrogation rights against City regardless of the applicability of any insurance proceeds, and to require all contractors and subcontractors to do likewise. D-1 3. All insurance coverage and limits provided by Contractor and available or applicable to this agreement are intended to apply to the full extent of the policies. Nothing contained in this Agreement or any other agreement relating to the City or its operations limits the application of such insurance coverage. 4. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to City and approved of in writing. 5. No liability policy shall contain any provision or definition that would serve to eliminate so-called "third party action over" claims, including any exclusion for bodily injury to an employee of the insured or of any contractor or subcontractor. 6. All coverage types and limits required are subject to approval, modification and additional requirements by the City, as the need arises. AUDITOR shall not make any reductions in scope of coverage (e.g. elimination of contractual liability or reduction of discovery period) that may affect City's protection without City's prior written consent. Proof of compliance with these insurance requirements, consisting of certificates of insurance evidencing all of the coverages required and an additional insured endorsement to AUDITOR's general liability policy, shall be delivered to City at or prior to the execution of this Agreement. In the event such proof of any insurance is not delivered as required, or in the event such insurance is canceled at any time and no replacement coverage is provided, City has the right, but not the duty, to obtain any insurance it deems necessary to protect its interests under this or any other agreement and to pay the premium. Any premium so paid by City shall be charged to and promptly paid by AUDITOR or deducted from sums due AUDITOR, at City option. 8. Certificate(s) are to reflect that the insurer will provide 30 days notice to City of any cancellation of coverage. Contractor agrees to require its insurer to modify such certificates to delete any exculpatory wording stating that failure of the insurer to mail written notice of cancellation imposes no obligation, or that any party will "endeavor" (as opposed to being required) to comply with the requirements of the certificate. 9. It is acknowledged by the parties of this agreement that all insurance coverage required to be provided by AUDITOR or any subcontractor, is intended to apply first and on a primary, noncontributing basis in relation to any other insurance or self insurance available to City. 10.AUDITOR agrees to ensure that subcontractors, and any other party involved with the project who is brought onto or involved in the project by AUDITOR, provide the same minimum insurance coverage required of AUDITOR. AUDITOR agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. AUDITOR agrees that upon request, all agreements with D-2 subcontractors and others engaged in the project will be submitted to City for review. 11.AUDITOR agrees not to self -insure or to use any self-insured retentions or deductibles on any portion of the insurance required herein and further agrees that it will not allow any contractor, subcontractor, Architect, Engineer or other entity or person in any way involved in the performance of work on the project contemplated by this agreement to self -insure its obligations to City. If AUDITOR's existing coverage includes a deductible or self-insured retention, the deductible or self-insured retention must be declared to the City. At that time the City shall review options with the AUDITOR, which may include reduction or elimination of the deductible or selfinsured retention, substitution of other coverage, or other solutions. 12. The City reserves the right at any time during the term of the contract to change the amounts and types of insurance required by giving the AUDITOR ninety (90) days advance written notice of such change. If such change results in substantial additional cost to the AUDITOR, the City will negotiate additional compensation proportional to the increased benefit to City. 13. For purposes of applying insurance coverage only, this Agreement will be deemed to have been executed immediately upon any party hereto taking any steps that can be deemed to be in furtherance of or towards performance of this Agreement. 14. AUDITOR acknowledges and agrees that any actual or alleged failure on the part of City to inform AUDITOR of non-compliance with any insurance requirement in no way imposes any additional obligations on City nor does it waive any rights hereunder in this or any other regard. 15. AUDITOR will renew the required coverage annually as long as City, or its employees or agents face an exposure from operations of any type pursuant to this agreement. This obligation applies whether or not the agreement is canceled or terminated for any reason. Termination of this obligation is not effective until City executes a written statement to that effect. 16. AUDITOR shall provide proof that policies of insurance required herein expiring during the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Proof that such coverage has been ordered shall be submitted prior to expiration. A coverage binder or letter from AUDITOR's insurance agent to this effect is acceptable. A certificate of insurance and/or additional insured endorsement as required in these specifications applicable to the renewing or new coverage must be provided to City within five days of the expiration of the coverages. 17. The provisions of any workers' compensation or similar act will not limit the obligations of AUDITOR under this agreement. AUDITOR expressly agrees not D-3 to use any statutory immunity defenses under such laws with respect to City, its employees, officials and agents. 18. Requirements of specific coverage features or limits contained in this section are not intended as limitations on coverage, limits or other requirements nor as a waiver of any coverage normally provided by any given policy. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue, and is not intended by any party or insured to be limiting or all- inclusive. 19. These insurance requirements are intended to be separate and distinct from any other provision in this agreement and are intended by the parties here to be interpreted as such. 20. The requirements in this Section supersede all other sections and provisions of this Agreement to the extent that any other section or provision conflicts with or impairs the provisions of this Section. 21.AUDITOR agrees to be responsible for ensuring that no contract used by any party involved in any way with the project reserves the right to charge City or AUDITOR for the cost of additional insurance coverage required by this agreement. Any such provisions are to be deleted with reference to City. It is not the intent of City to reimburse any third party for the cost of complying with these requirements. There shall be no recourse against City for payment of premiums or other amounts with respect thereto. AUDITOR agrees to provide immediate notice to City of any claim or loss against AUDITOR arising out of the work performed under this agreement. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City.