City of San Jacintoand the

SuccessorAgency to the Redevelopment Agency of the City of San Jacinto,California

Request for Proposals for Auditing Services

For Fiscal Years Ending 2012, 2013 & 2014

April 3, 2012

PART 1 – AUDIT SPECIFICATIONS

I. INTRODUCTION

The City of San Jacinto is requesting proposals from qualified firms of certified publicaccountants to audit its financial statements for the fiscal years 2011-12, 2012-2013 and 2013-14. At the option of the City, the audit engagement may be extended for two subsequent fiscal years by written amendment. These audits are to be performed in accordance with generally accepted auditing standards, the standards set forth for financial and compliance audits in the U.S. General Accounting Office’s (GAO) Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, the provisions of the Single Audit Act of 1984, as amended in 1996, U.S. Office of Management and Budget (OMB) Circular A-133, Audits of State and Local Governments and Governmental Accounting Standards Board (GASB) Pronouncements.

During the evaluation process, the City of San Jacinto reserves the right, where it may serve the City’s best interest, to request additional information or clarifications fromproposers, or to allow corrections of errors or omissions. At the discretion of the City, firms submitting proposals may be requested to make oral presentations as part of the evaluation process.

The City of San Jacinto reserves the right to retain all proposals submitted and to use any ideas in a proposal regardless of whether that proposal is selected. Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposals, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the City and the firm selected.

To be considered, four (4) copies of a proposal must be received by 5:00 PM, May 2, 2012. Please send proposals to:

City of San Jacinto

Attn: Thomas Prill, Acting Finance Director

P.O. Box 488

San Jacinto, CA 92581

The City of San Jacinto reserves the right to reject any or all provisions submitted and/or waive any irregularity.

Questions about this Request for Proposal should be directed to Thomas Prill at 951-537-6352 or . Michelle Holmes, Senior Accountant-Special Districts may also be contacted at 951-537-6389 or if Mr. Prill is unavailable. Contact with City personnel other than these two named individuals regarding this RFP may be grounds for elimination from the selection process.

Electronic versions of the City’s and Redevelopment Agency’s fiscal year 6/30/11audit reports are available on the City’s website at

It is anticipated the selection of a firm will be completed by May23, 2012.

II. DESCRIPTION OF THE CITY

A. The City of San Jacinto:

San Jacinto is located approximately 85 miles east of the City of Los Angeles and wasincorporated in 1888 as a general law city which operates under the council-manager form of government. The City Council consists of five members who are elected at large serving a staggered term of four years. Each year a Mayor and Vice Mayor are elected among the five Council members. The City provides a full range of municipal services including public works (street maintenance and traffic control, park maintenance, water and sewer services),planning and building, code enforcement, community development, and general administrative activities. The City contracts with the Riverside County Sheriff’s Department for police protection, the Riverside County Fire Department for fire protection, Riverside County Information Technology for network administration, and Tri-Lake Consultants for engineering services.

Additionally, with the elimination of its Redevelopment Agency, the City opted to become the Successor Agency to the Redevelopment Agency of the City of San Jacinto, as well as the San Jacinto Housing Authority. These entitiesare considered component units of the City and their activities are to be blended into the reporting entity.

B. The Finance Department:

The Finance Departmentperforms: general accounting, accounts payable, central cashiering, water/sewer/trash utility billing, business license, payroll,treasury management, budgeting, debt administration, and special districts administration.

The Finance Department is currently staffed by an Acting Finance Director (General Accounting Manager), one Senior Accountant, one Special Districts Administrator, one Accountant, three Account Clerks, and one part-time Business License technician. The full-time Finance staff has been in their current positions for the past eighteen months to six years.

C. Financial Transactions and Banking:

All financial records for the City are centrally located in the Finance Department. Annually, there are approximately 5,200disbursements. Almost all disbursements are made either through accounts payable (3,600) or payroll (1,560), with a minimal amount through wire transfers and the City’s fiscal agent banks. Almost all of the cash receipts are collected at the Finance Department, with some collected at the City’s police station.

The City maintains pooled cash for all departments and funds, held in four accounts with Bank of Hemet, one account with Rabobank, one account with CAMP, and one account with LAIF. Numerous CDs are held with Bank of Hemet and Rabobank, and the City will be contracting with two investment advisors in April. The City also maintains cash with fiscal agents, and several such accounts are held with Union Bank.

D. Computer System:

The City of San Jacinto uses the ASP version of SunGard-HTE software for general ledger,budget, accounts payable and project accounting. InHance is used for utility billing. HDL is used for business licensing. ADP is used for payroll accounting. Accella-Permits Plus is used for permitting.

E. Contact Persons:

The auditor’s principal contacts with the City of San Jacinto will be Thomas Prill, Acting Finance Director or Michelle Holmes, Senior Accountant-Special Districts. These contacts will coordinate the assistance to be provided by the City of San Jacinto to the auditor.

III. SCOPE OF SERVICES REQUESTED:

A. In General:

The auditors will perform a financial and compliance audit to determine (a) whether the combined financial statements of the City fairly present the financial position and the results of financial operations in accordance with generally accepted accounting principles, and (b) whether the City has complied with laws and regulations that may have a material effect upon the financial statements.

B. Internal Control:

The auditors will examine the City’s internal accounting controls and accounting procedures and render written reports of their findings and recommendations to the Finance Director and the City Manager. The examination shall be made and reports rendered in accordance with generally accepted government auditing standards.

In the required reports on internal controls, the auditor shall communicate any reportable conditions found during the audit.

Reportable conditions that are also material weaknesses shall be identified as such in thereport. Non-reportable conditions discovered by auditors shall be reported in a separate letter to management, which shall be referred to in the reports on internal controls.

Irregularities and illegal acts: Auditors shall be required to make an immediate, written report of all irregularities and illegal acts or indications of illegal acts of which they become aware to the following parties:

City Council

City Manager

Acting Finance Director

Prior to issuing their final reports, the auditors will meet with the Acting Finance Director and his designees. All audit reports will be addressed to the City Council.

The auditors may be consulted occasionally throughout the year as an informationresource. The auditors may be asked to provide guidance on implementation of GovernmentAccounting Standards Board (GASB) requirements and specifics of federal and stateregulations as they may affect local government accounting. They may also be asked toassist with the implementation of new pronouncements.

C. Specific Deliverables to the City of San Jacinto:

  • Audit of the general purpose financial statements and prepare CAFR.
  • If applicable, test programs for compliance with the Single Audit Act and applicable laws and regulations and issue the Single Audit Report.
  • If applicable, audit of the financial statements and prepare separate report for the Successor Agency to the Redevelopment Agency of the City of San Jacinto.
  • If applicable, audit of the financial statements and prepare separate report for the San Jacinto Housing Authority.
  • Perform agreed-upon auditing procedures pertaining to the City’s GANN Limit(Appropriations Limit) and render a letter to the City regarding compliance.
  • If applicable, audit of any grant-specific financial statements (e.g. Indian Gaming Grant) and prepare separate report.
  • State Controller’s Report, and whatever reports are later determined to be required for the Successor Agency to the Redevelopment Agency and the Housing Authority.
  • Twenty five copies foreach of the above financial reports need to be delivered by December 1stfor the Successor Agency to the Redevelopment Agency (if filing is required to State by December 31st), and by December 31stfor the City eachyear. In addition, an electronic(word searchable) version of the above reports should also be emailed to the City staff by then.

IV. CITY’S RESPONSIBILITIES

  1. City staff will prepare the final closing of the books and provide the Management’s Discussion and Analysis (MD&A) for the CAFR, as well as the MD&A for the Successor Agency to the Redevelopment Agency and the Housing Authority. The City will provide balance sheets for all funds and groups, statements of revenue and expenditures for all funds as well as detailed subsidiary ledgers. The City will not prepare GASB 34 conversion entries, so the auditor will be required to prepare those.
  1. City staff will produce the confirmation letters that are mailed by the auditors.
  1. City staff currently produces schedules and other backup for most balance sheet accounts at year end (accounts receivable listing, accounts payable listing, compensated absences listing, bank reconciliations, schedule of fixed assets etc.). The auditor is expected to produce any other necessary schedules. City staff will help obtain any necessary information.
  1. The City will provide the auditor with reasonable workspace, desks, and chairs. The auditors will also be furnished access to internet, telephones, facsimile machines, and photocopying machines.

V. BASIS FOR COMPENSATION

  1. The City will pay the auditors for those services described in Section III (Auditor’sResponsibilities) the not-to-exceed amount contained within the agreement. For additional services required after the inception of the agreement, written approval by the City isrequired in advance of such services being rendered, for which a fee will be paid based on the auditor’s quoted hourly rates.
  1. The auditors may submit itemized bills for their services at the end of each calendar month period in which accumulated unbilled charges exceed $1,000.00. The City will promptly review and act upon these bills.
  1. The City shall receive all final opinions and reports for the City of San Jacinto financial statements by Januaryof each year barring any unforeseen City delays. Final reports for grant and Agency programs shall be completed in time to meet required submission dates.

VI. ADDITIONAL INFORMATION

  1. There is no expressed or implied obligation for the City to reimburse proposers for any expenses incurred in the preparation of proposals in response to this request.
  1. The submission of a proposal shall be prima facie evidence that the proposer has full knowledge of the scope, nature, quantity and quality of work to be performed; the detailed requirements of the specifications; and the conditions under which the work is to be performed.
  1. The proposer shall furnish the City such additional information as the City may reasonably require.
  1. The City will not be liable for any costs not included in the proposal.
  1. The City reserves the right to conduct personal interviews of any or all proposers prior to selection. The City will not be liable for any costs incurred by the proposer in connection with such interview.
  1. The City reserves the right to conduct pre-contract negotiations with any, or all, potential proposers in the interest of securing the optimum service at minimum cost.
  1. The City reserves the right to reject any and all proposals and the right, in its sole discretion, to accept the proposal it considers most favorable to the City.
  1. The selected firm shall be required to obtain a business license in the City prior to commencing the first audit, and annually thereafter, for as long as the contract is in effect.

PART 2 - PROPOSAL REQUIREMENTS AND INFORMATION

I. PROPOSAL REQUIREMENTS

  1. Independence

The firm should provide an affirmative statement that it is independent of the City of San Jacintoas defined by generally accepted auditing standards. Moreover, the firm must have no conflict of interest with regard to any other work performed for the entity being audited. It is understood that the services performed by the auditors are in the capacity of independent contractors and not as an officer, agent, or employee of the City of San Jacinto.

  1. License to Practice in California

An affirmative statement should be included indicating that the firm and all assigned key professional staff are properly licensed to practice in California.

C. Firm Qualifications and Experience

  1. The proposal should state the size of the firm, the size of the firm’s governmental audit staff, the location of the office from which the work on this engagement is to beperformed, and the number and nature of the staff to be so employed on a part-time basis. Please indicate whether any members of the audit team assigned to the City are reviewers in the GFOA Certificate of Achievement for Excellence in Financial Reporting program and or the CSMFO Certificate of Award program. (The City does not currently submit for these awards, but may in the future.)
  1. The firm is also required to submit a copy of the report on its most recent external quality control review, with a statement whether that quality control review included a review of specific government engagements.
  1. The firm shall also provide information on the results of any federal or state desk reviews or field reviews of its audits during the past three (3) years. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with state regulatory bodies or professional organizations.
  1. For the firm’s office that will be assigned responsibility for the audit, list the most significant engagements (maximum of 10) performed in the last five years that are similar to the engagement described in this request for proposals.

D. Partner, Supervisory and Staff Qualifications and Experience

The firm shall identify the principal supervisory and management staff, includingengagement partners, managers, other supervisors and specialists, who would be assigned to the engagement and indicate whether each such person is licensed to practice as a certified public accountant in California. The firm also should provide information on thegovernmental auditing experience, including the scope of audit services requested by the City, of each person, and information on relevant continuing professional education for the past three (3) years and membership in professional organizations relevant to the performance of this audit.

E. Specific Audit Approach

The proposal should set forth a work plan, including an explanation of the audit methodology to be followed, to perform the services required in Part I, Section III of this request for proposals.

F. Total All-Inclusive Maximum Price

The bid 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.

G. Insurance Requirements

1.Before signing this agreement, or commencing work on any project, or allowing any subcontractor to commence work, the audit firm shall obtain all insurance required under subsection (b) of this section. Proof of insurance will require approval by the Risk Manager.

2.The audit firm shall provide the following insurance:

a.Workers' Compensation as required by law.

b.Commercial General Liability in the amount of $1,000,000 per occurrence and $2,000,000 in the aggregate naming the City of Riverside as an additional insured and including:

Premises Operations

Products/Completed Operations

Blanket Contractual

Broad Form Property Damage

Independent Contractors

Personal Injury

c.Automobile Liability in the amount of $1,000,000 combined single limit to include owned, hired and non-owned.

d.Professional Liability in the amount of $1,000,000.

Each policy of insurance required by this section shall provide for no less than 30 days advance notice to the City prior to cancellation.

Each policy shall be endorsed to waive all rights of subrogation against the City of Riverside by reason of any payment made for claims under the above coverage.

H. Ownership of City-Related Documents

All property rights, including publication rights of all reports produced by proposer in connection with services performed under this agreement shall be vested in the City of San Jacinto. The proposer selected shall not publish or release any of the results of its examinations without express written permission from the City of San Jacinto.

I. Acceptance of Proposal Contents

After auditors are selected by the City, the contents of the submitted proposal will become a contractual obligation. The successful proposer will be required to execute a standard consultant agreement with the City. Failure of the auditors to agree to include the proposal as part of the contractual agreement may result in cancellation of the award. The City reserves the right to reject those parts that do not meet with the approval of the City.