HomeMy WebLinkAbout6 Auditors 2005 Audit Agenda Item #
TRUCKEE Ds
E-4
Pulic p y D VI
Memorandum
To: Board of Directors
From: Mary Chapman, Administrative Services Manager/Treasurer
Date: August 29, 2005
Subject: Authorization to issue a request for statement of interest and
qualifications to auditing firms for the purpose of selecting auditors to perform
the 2005 annual audit.
It has been three years since the District has changed auditors. Selecting auditors is the
responsibility of the Board. The auditors are hired by and work for the Board.
The approach Peter and I are recommending is the same one we used when the Board
selected KPMG three years ago:
1. Solicit a request for statement of interest and qualifications from audit firms;
the Board would narrow down those who respond to three audit firms based
on qualifications, experience, size, etc.
2. The Board would interview the selected firms to further explore their
experience and qualifications.
3. The Board would issue a request for proposal from the selected firms.
4. The Board would evaluate the proposals and select a firm.
Attached is a request for statement of interest and qualifications which would be sent out
to begin the process. Next, I have attached a list of 34 accounting/auditing firms that
would receive this letter. Some of those on the list may not do audit work. The list is a
compilation of names from our search three years ago, a list provided by the Town of
Truckee and the names of the firms used by all of the other special districts. if the Board
is aware of any other firms that were not included on the list, we could certainly add
them.
The actual request for proposal form is also attached for your review. This request for
proposal form would be sent to those audit firms chosen by the Board at the conclusion
of the interview process.
i
REQUEST FOR
STATEMENTS OF
INTEREST AND
QUALIFICATIONS
Truckee Donner Public Utility District
REQUEST FOR QUALIFICATIONS
AUDITING OF FINANCIAL RECORDS
REQUEST FOR STATEMENTS OF INTEREST AND QUALIFICATIONS
AUDITING OF FINANCIAL RECORDS
Introduction
Truckee Donner Public Utility District (the "District") is requesting Statements of Interest and
Qualifications ("Statements") from certified public accounting firms to audit the District's financial
records and express an opinion on the District's financial statements. The initial audit will be for the
fiscal year ending December 31, 2005, with an option to continue the engagement for each of the two
subsequent years. All audits are to be performed in accordance with generally accepted auditing
standards.
Interested firms should mail eight copies of their Statements to the Board of Directors, Truckee
Donner Public Utility District, P. O. Box 309, Truckee, CA 96160 or by Fed Ex/UPS to 11570 Donner
Pass Road, Truckee, CA 96161. Statements must be received by the District no later than
September 21, 2005 at 5:00 p.m.
Final selection is anticipated to occur on or before November 2, 2005.
The District reserves the right to request additional information, clarifications from firms submitting
Statements, or to allow corrections of errors or omissions. The District assumes no obligation to
reimburse firms for any expenses incurred in responding to this request for Statements.
About the District
The District was formed and operates under the State of California Public Utility District Act. The
District provides electric and water service to portions of Nevada and Placer counties described as
Truckee and Donner Lake. The electric and water service operations are maintained and operated
separately. The electric system distributes electrical energy to approximately 12,430 customers. The
water system is a water distribution system serving approximately 11,142 customers. Most of the
District's customers receive both electric and water service from the District.
The District has received regulatory approvals from Nevada County LAFCo necessary to construct a
fiber to the home broadband system and launch the provision of IP voice, video and data services. To
date, the District's progress has been stalled by Truckee's cable television operator filing a lawsuit
against the District's regulatory agency LAFCo challenging their certification of the District. Once the
lawsuit is settled, the Board of Directors will reevaluate whether or not it will proceed in offering
broadband services to the community. Should the Board decide to proceed, they will begin by
arranging for financing and setting up a new division for accounting purposes. The lawsuit is
expected to be settled in 2006.
The District's year-end is 12/31.
The District follows Governmental Accounting Standards Board (GASB) Statement No. 20 which
requires that governments' proprietary activities apply all GASB pronouncements as well as the
pronouncements of the Financial Accounting Standards Board (FASB) and its predecessors issued on
l
Truckee Donner Public Utility Divt ict
REQUEST FOR QUALIFICATIONS
AUDITINC OF FINANCIAL RECORDS
or before November 30, 1989, unless those pronouncements conflict with or contradict GASB
pronouncements. As allowed by GASB Statement No 20, the District has elected not to implement
FASB Statements and Interpretations issued after November 30, 1989.
The District's financial computer is an HP server system with software provided by National
Information Systems Cooperative (NISC) of Lake St. Louis, Missouri. The NISC software includes
billing, consumer deposits, cash register, e-billing, general ledger accounting, accounts payable,
payroll, inventory, work order accounting, transportation accounting and fixed asset modules. The
District also maintains a personal computer network serving approximately 53 users. Further
information concerning the District is available on request.
Nature of Services Required
The District is requesting audit services for the calendar year 2005 as well as options to extend the
engagement to the following two calendar years. All audit work shall be performed in accordance with
generally accepted auditing standards and must be completed annually within 120 days of year-end.
In addition to the regular audit requirements, the District is required to have an A133 Single Audit
performed for 2005 and 2006. The District's first A133 audit was performed by KPMG for 2004 and
was recently completed. The District is awaiting the final report. The District wishes to have this audit
performed at the same time as the regular District audit.
The auditor shall communicate to the District, in written form, concerning any substantive deficiencies
in design or operation of the District's internal controls and procedures that could adversely affect the
organization's ability to record, process, report on, or safeguard assets. This written communication
should be in the form of a management letter directed to the Board of Directors and should be
submitted along with the audit report. The auditor shall also make immediate written report of any
fraud or illegal acts to the Board of Directors of the District.
The District sold additional special tax bonds for the Community Facilities District No. 04-1 (Gray's
Crossing), Series 2005 in July, 2005. The District may issue revenue bonds during 2006 relating to
the financing of a fiber to the home broadband system and/or the financing of water system
improvements. If the District does issue debt, the auditor may be required to provide additional
professional services. The District may also require minimal tax or accounting advice or other
unforeseen assistance during the year. Fee arrangements for these services will be arranged
separately.
Contact Information
Documents available, on request, to interested firms include the 2003 and 2004 audit reports and
2005 internal unaudited financial statements. District information including the audit reports for 2003
and 2004 are also available on the District's website, www.tdpud.org. Go to District Information and
then Finance. The District's At 33 Single Audit will be posted on the website as soon as it is available.
Inquiries may be directed to Mary Chapman, Administrative Services Manager/Treasurer, P. O. Box
309, Truckee, CA 96160, (530) 582-3906, MgaChai)man@tdpud.org. Responses shall be mailed to
2
Truckee Donner Public Utility District
REQUEST FOR QUALIFICATIONS
AUDITING OF FINANCIAL RECORDS
the Board of Directors at the previously listed address and must be received no later than September
21, 2005 at 5:00 p.m.
Calendar of Key Dates
Following is a list of key dates associated with this request for Statements of Interest and
Qualification:
Request for Statements issued by September 8, 2005
Statements due by September 21, 2005
Firm interviews concluded by October 5, 2005
Sealed bids/price due by October 19, 2005
Final selection of firm November 2, 2005
Statement of Interest & Qualification Submission Requirements
Each firm's response shall include a statement of its interest in providing auditing services to the
District and qualifications of its firm and individual staff, in-charge-of-field-work and above, to be
assigned to the audit. Qualifications shall include information concerning the firm's, and individual
staff assigned, experience with California state public utility districts and/or investor owned utility
audits, including a list of similar engagements performed within the past three years. Also, please
include a list of At 33 Single Audits that your firm has prepared in the past three years.
Firm acceptance to the bond market is important to the District. The Statement should address this
issue. The District would be interested in a listing of the organizations that have issued bonds using
your company's audit report in their official statements.
Respondents should include information concerning the firm's proposed audit methodology. The
District is also interested in firm employee turnover and stability of workforce.
No price quotes/dollar proposals are to be included within the Statement of Interest and
Qualifications submittal package.
Evaluation Procedures
Statement submittals will be evaluated and no more than three firms selected. The District will
schedule interviews with individuals representing the selected firms to further discuss District
operations and firm qualifications. Firm representatives at the interview shall include at least one key
member from the anticipated audit team. Firms will then be assigned a score, based solely on
qualifications.
Subsequent to the interview process, firms shall be asked to submit sealed proposals. These
proposals will be evaluated and will account for a portion of the final evaluation score. The District will
evaluate sealed proposals only from the firms interviewed and does not wish to consider this
information until after the interview process and qualifications are scored. All sealed proposals will be
opened at the same time.
3
LIST OF
ACCOUNTING/AUDIT
FIRMS
..........
Bartig, Basler, & Ray, CPA's Robert McClintock D.H. Scott& Company
1520 Eureka Road, Ste 100 McClintock Accountancy Corp 900 N. Market
Roseville, CA 95661 P. O. Box 6179 Redding, CA 96003
Tahoe City, CA 96145
Ronald Ley Gilbert Accountancy Corporation
Damore, Hamric, &Schneider, Inc Ernst&Young 2880 Gateway Oaks Dr Ste 100
2856 Arden Way, Ste 200 555 Capitol Mall, Suite 650 Sacramento, CA 95833
Sacramento, CA 95825-1379 Sacramento, CA 95814
John L Barnhart, CPA Mike Gibson Johnson, Smith and Associates
3183 Collins Drive Ste B Gibson &Company P.O. Box 160
Merced, CA 95348 1610 Executive Court Lincoln, CA 95648
Sacramento, CA 95864
Tim McCann Macias Gini & C LLP
KPMG LLP Brown Arm Company P Y
4200 Truxtun Avenue, Suite 300 3927 Lennane Drive Ste 200
Portland,
Sd,Fifth Ave, Suite 3800 and, OR 97201 Bakersfield, CA 93309 Sacramento, CA 95834
Steve Sutter Michael T. Doody, CPA
Matson & Isom Grant Thornton y>
P.O100 West Liberty Street, Suite 770 5709 Sandburg Drive
Chi Box 95 Y Sacramento, CA 95819
Chico, CA 95927 Reno, NV 89501
Miers &Miers CPA, LLP
P.O. Box 609 Deloitte&Touche Moss, Levy&Hartzheim CPAs
Barstow, CA 92312-0609 50 Fremont Street 4740 Northgate Blvd, Ste 160
San Francisco, CA 94105 Sacramento, CA 95834
Neal &Tadina Nystrom & Company LLP
P.O. Box 492416 Barnard Vogler & Co 1726 Court Street
Redding, CA 96049-2416 350 So. Center Redding, CA 96001
Reno, NV 89501
R. J. Ricciardi, CPA Richard Lopez
1000 4th St, Ste 725 Conrad and Associates, LLP Vargas Lopez and Co
San Rafael, CA 94901 1100 Main Street, Suite C 959 East Walnut Street Ste 250
Irvine, CA 92614 Pasadena, CA 91106
Searson& Company Inc Steve Northcote
2625 Fair Oaks Blvd Leaf and Cole Smith and Newell
Sacramento, CA 95864 1843 Hotel Circle So. Suite 300 1425 Butte House Road #B
San Diego, CA 92108 Yuba City, CA 95993
Tenney & Company Kafory Armstrong & Co Thompson & Basilio
1130 Civic Center Blvd., Ste C 6140 Plumas Thom sonHat CobbC b Blvd Ste 500
Yuba City, CA 95993 Reno, NV 89509 Torrance, ho e Blvd
Caporicci & Larson Brendon Farrar Vavrinek, Trine, Day and Co
1300 ClayStreet, Suite 600 Matsom & Isom 8270 East Street, Suite 202 Ranc Aspen Street
1255 E
Oakland, CA 94612 Rancho Cucamonga, CA 91730
Reddiing, CA 96099
Pricewaterhouse Coopers LLP
455 Capitol Mall
Sacramento, CA 95814
r
S'IVSOdO?Id
xo3 is�na�x
......................... ........
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
REQUEST FOR PROPOSAL FOR AUDIT SERVICES
I. INTRODUCTION
A. General information
The Truckee Donner Public Utility District is requesting proposals from qualified firms of
certified public accountants to audit its financial statements for the fiscal year ended December
31, 2005, with the option of auditing its financial statements for each of the two (2) subsequent
fiscal years. These audits are to be performed in accordance with generally accepted auditing
standards.
The District has gone through a prescreening process and is now inviting three (3) firms to
submit proposals for audit services.
There is no expressed or implied obligation of the Truckee Donner Public Utility District to
reimburse responding firms for any expenses incurred in preparing proposals in response to
this request.
II. NATURE OF SERVICE REQUIRED
The District desires the auditor to express an opinion on the fair presentation of its general
purpose financial statements in conformity with generally accepted accounting principles. The
auditor should provide one combined financial statement including a Statement of Cash Flows
and Notes to Financial Statement with supplemental exhibits defining the balance sheet and
income statements for each department and community facilities district including disclosing
any eliminating entries. The District will provide the management discussion and analysis
portion of the audit report. The auditor should review the management discussion and
analysis for compliance to existing audit report standards. Please refer to the District's 2003-
2004 audit report for the desired format.
Included in the audit proposal, the auditors should include the cost of performing an A133
Single Audit for the years 2005 and 2006 as a separate line item. The District requires that the
At33 Single Audit be performed at the same time as the regular audit.
Also included in the audit proposal, the auditors will be expected to provide periodic support to
District staff during the year. This support will be in relationship to assisting staff with the
recording of new types of transactions and providing advice on the impacts of new accounting
regulations that affect the District (e.g. GASB 40, GASB 42 and GASB 45).
III. REPORTS TO BE ISSUED
A. A report on the fair presentation of the financial statements in conformity with generally
accepted accounting principles. The District requires 50 bound copies, an e-mailed PDF
copy and one copy for photocopying.
B. A Management Report including a review of the internal control structure based on the
auditor's understanding of the control structure and assessment of control risk.
C. An A133 Single Audit report.
4
2
1
Prior to issuing the final reports, the auditors will present drafts to the District for review at a
regularly scheduled board meeting or a special meeting. Upon review and acceptance of the
draft reports by the Board of Directors, final reports will be issued.
Irregularities and Illegal Acts: The 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 during the audit process to the Board of Directors of the District.
IV. PROPOSAL REQUIREMENTS AND INFORMATION
To be considered, five (5) copies of a proposal must be received by October 19, 2005 at 5:00
p.m. Proposals should be sent by Fed Ex or equivalent carrier and addressed to:
Board of Directors
Truckee Donner Public Utility District
11570 Donner Pass Road
Truckee, CA 96161
The District reserves the right to reject any or all proposals submitted and to waive any
irregularity.
Inquiries concerning the request for proposals should be addressed to:
Mary Chapman, Administrative Services Manager/Treasurer
Truckee Donner Public Utility District
Phone: 530-582-3906
Fax: 530-587-5056
E-mail: MarvChapman@tdf)ud.org
During the evaluation process, the District reserves the right, where it may serve the District's
best interest, to request additional information or clarifications from proposers, or to allow
corrections of errors or omissions.
It is anticipated the selection of a firm will be completed by November 2, 2005.
V. RECAP OF PROPOSAL PROCESS AND CALENDAR
September 28, 2005 —
October 5, 2005 Scheduled interviews with the Board of Directors
October 5, 2005 Request for Proposals mailed &/or faxed
October 19, 2005 Deadline for proposal submission (sealed bids/price due
by date)
November 2, 2005 Board selects audit firm
November 3, 2005 Selection notification
2
IV. PROPOSAL PRICE
A. The proposal 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 proposal should separate out the costs associated with the
A133 Single Audit which will need to be performed for the years 2005 and 2006.
B. Proposal should include the audit price for the first year's audit and each of two
subsequent optional year audits.
C. Proposal should include the proposers price for providing additional accounting
services over and above those included in section 11" above. Stated prices should list
the charge for various staff members who would provide those services.
D. The District is not liable for any cost incurred by a proposer responding to this request
for proposal.
VII. EVALUATION PROCESS
The proposals will be evaluated by the Board of Directors. The results of the interview
process including the Boards evaluation of firm qualifications and the sealed bids will be taken
into consideration in determining the audit firm that will be hired by the District. The District
reserves the right to reject any and all proposals, without prejudice.
Vill. AUDIT TIMELINE
Interim audit work may be scheduled with District staff beginning in November or December.
The actual on-site audit work should be scheduled beginning March 31, 2006, if possible.
Since the firm hired may be new to the District, additional interim work may be required.
IX. WORKING PAPER RETENTION AND ACCESS TO WORKING PAPERS
Upon appointment of a new auditor, the District will immediately contact KPMG to
obtain access to and/or copies of the District's previous work papers.
All working papers and reports must be retained at the auditor's expense, for a minimum of
three (3) years, unless the firm is notified in writing by the District that there is a need to extend
the retention period. The auditor will be required to make working papers available, upon
request, to parties designated by the District.
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.
X. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION
District staff including management personnel will be available during the audit to assist the
firm by providing information, documentation and explanations. The preparation of
confirmations will be the responsibility of the District.
The District will provide the auditor with reasonable work space, work surfaces and chairs.
The auditor will also be provided with access to a telephone, internet access, photocopying
and a fax -machine.
3