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HomeMy WebLinkAbout11 Contract Moss Adams Auditing FirmAgendaItem#11TRUCKEEDONNERI:PublicUtilityDistriJCONSENTTo:BoardofDirectorsFrom:ReginaWiseDate:July17,2019Subject:ConsiderationforContractRenewalwithMossAdamsAuditingFirm1.WHYTHISMATTERISBEFORETHEBOARDDistrictcoderequirestheDistrict’sfinancialresultstobeauditedannually.TheauditfirmishiredbytheBoardandreportsdirectlytotheBoard.2.HISTORYMossAdams,LLPin2019wasthe5thlargestaccountingfirminCalifornia.TheyhavebeenreportingtheauditresultstotheBoardsinceFYi1.AttheJune5,2019Boardmeeting,theBoarddirectedstafftoretainMossAdamsontheBoard’sbehalffortheFYi9audit.3.NEWINFORMATIONMossAdams,LLPproposalforauditservicesisattached(Attachment1).TheproposalcontinuestobecosteffectivefortheDistrictat$53,500forFYi9withtheoptiontorenewfortheFY20andFY21years.Asapointofreference,BakerlillyconductedtheDistrict’sauditsfromFY05throughFYi0andchargedtheDistrictabout$60,000peraudit.4.FISCALIMPACTMossAdamsproposalforcontractrenewalfortheFYi9auditis$53,500andincludedanoptiontorenewforFY20andFY21for$54,500and$55,500,respectfully.Theseamountsincludenottoexceedtravelexpensesof$6,500foreachyear.TheDistrict’sannualbudgetsincludesauditserviceexpenses,theseamountswillbeconsideredintheFY20andFY21Budgetprocess.5.RECOMMENDATIONAuthorizetheBoardPresidenttoexecuteacontractwithMossAdamstoconducttheFY19annualaudit,inanamountnottoexceed$60,000withatwoyearoptionforFY20andFY21.:;M&ReginaWiseMichaelD.HolleyFinance&AccountingManagerGeneralManager Attacflment‘IMOSSADAMSOPPORTUNITYRISINGAUDITSERVICESPROPOSALFORTRUCKEEDONNERPUBLICUTILITYDISTRICTJulIeDesimone,PartnerKeithSimovic,SeniorManagerMossAdamsLLP800SWBroadway,Suite1200Portland,OR97205(503)242-1447 DearBoard:OurteamhasthoroughlyenjoyedworkingwithTruckeeDonnerPublicUtilityDistrict(TruckeeDonnerPUD)andyourstaffovertheyearsandwe’resoPleasedyou’vehadsuchapositiveclientexperiencethatyouaskedustore-proposeonyourauditservices.Whileprovidinggreatserviceandmeetingyourdeadlinesareagoodbasisforarelationship,they’renottheon’ycriteriayoushouMconsiderforcontinuingtoworkwithus.‘Weurgeyutoconsiderthefollowing:June14,2019Ik)ardofi)irectorsTruckeeDonnerPub’icUtilityDistrictI1570DonnerPassRoadTruckee,CA96161.Adeepbenchofexpertise.Withinourtrainedindustrygroup,wehaveprofessionalsreadytobearesourceforyouandyourteam.Wehaveconsistently,andplantocontinueto,periodicallyrotateourstaffsothatyougetfresheyesandanewperspectiveonyourauditsthroughoutourservicetoyou.Throughworkingwithourfirmyou’llalsoaccesstootherspecializedprofessionalsavailableandwillingtoprovideanyconsultingneedsyouhave,includingITconsulting,cybersecurityriskassessments,andperformanceaudits..Communicationthroughouttheyear.MossAdamsisn’tyouronce-a-yearserviceprovider.l)uringtheauditandthroughouttheyear,we’llcontinuetosolicitandencouragecommunicationtomakesurewe’reuptodateonyouroperationsandkeepmanagementapprisedofnewaccountingpronouncements,applicationofaccountingpolicies,andnewaccountingandtaxissues..industryknowledge.Themajorityofourfirm’sprofessionalsdedicatetheircareerstofocusingononeindustry.Yourteamhasdeepexperienceinandknowledgeofthepowerandutilitiesindustry,andthey’repassionateaboutit.TeremaincommittedtokeepingTruckeeDonnerPUDalong-termandextremelysatisfiedclientofMossAdams.OurpersonalpromisetoyouistobesureyoureceivethebestserviceMossAdamsiscapableofproviding.ThisproposalincludesinformationaboutMossAdams,ourapproachtoauditservices,andourfeeestimate.Sincerely,JulieI)esimone,CPAPartner(503)478-2101Iulie.desimone@mossadams.comKeithSimovic,CPASeniorManager(503)478-2284keith.simovic@mossadams.com TableofContentsIExecutiveSummary1OurCommitmenttoCalifornia1Open,Timely,andEffectiveCommunication1PremierClientService1IPower&UtilitiesExpertise2IYourServiceTeam3IClientReferences7IFees8 ExecutiveSummaryOURCOMMITMENTTOCALIFORNIAOurCaliforniaPresenceMossAdamshaslongmaintainedastrongpresenceintheGoldenState.Wecontinuetoaddexpertiseto—ourCaliforniateams,relocatingsenior-levelpractitionersfromOregonandWashingtontobolstertheresourceswecanofferinkeyindustriesandserviceareas.WithitscomplexstateOPEN,TIMELY,ANDEFFECTIVECOMMUNICATIONPartofthevalueweprovidetoyourbusinessisacommitmenttomaintainingcloseandregularcontactwithyouthroughouttheyear.We’renotonce-a-yearauditorswhodisappearformanymonths,onlytoreturnintimeforthenextaudit.We’reaconstantresourceforquestionsandadvicewithaquickresponsetime.Wewantyoutonoticeasuperiorlevelofservicebasedonyourexpectations—notonourassumptions.Fromassistingwithimplementationofnewaccountingstandardstoroutinephonecallsaboutimmediateissuesofconcern,we’rehands-onadvisorswithabiasforaction.Wewon’tkeepyouwaitingorwondering.Instead,we’lltaketheleadinsuggestingmeetingswithyou,settinguptrainingsessionswithyourinternalaccountingstaff,anddeliveringpresentationstomanagementoryourboardofdirectors.Youneedproactivecommunicationsaboutourengagementfindings.We’llraiseanyissuesaswefindthemandnotwhenit’stoolateforyoutoactonthem.We’llalsonotifyTruckeeDonnerPUDrightawayaboutemergingaccounting,tax,andregulatorymattersorconcerns,furtherhelpingtokeepsurprisestoaminimum.PREMIERCLIENTSERVICEYoudeservenoticeablysuperior,value-addedservicesthatmakeadifferencetoyourbottomline.Withaclient-focusedservicemodeldesignedforthelong-termcareofyourbusiness,MossAdamscanhelp.Itstartswithahighlevelofpartnerandseniormanagerinvolvementwitheachengagementandalowstaff-to-partnerratioaveragingaroundsixtoone.Also,you’llseeusmorethanonceayear.We’llstayinclosecontactwithyoutodiscusscomplianceissues;answerquestions;andprovideupdatesonnewaccountingpronouncements,industryreports,andspecialevents,It’sourtopprioritytoreturnyourphonecallsandresolveconcernsasquicklyaspossible.Toperformanengagementasuniqueasyouare,we’llseektounderstandyourpointofview—thehistoryofyourutility,thechallengesyou’vefaced,yourgoals,andthestrategiesthathavehelpedyousucceed.Thisway,wecananticipateneedsandidentifygapsbeforetheybecomeobstaclessoyoucangrow,manage,andprotectyourprosperitywithconfidence.5th145+largestpartnersaccountingfirminCalifornia1,000+professionalsDataaofJanuary2O11andlocaltaxstructureandmazeofregulatoryagencies,Californiapresentsanumberofchallengestobusinessesbasedinthestateandthosehopingtodobusinessthere.MossAdamshastheresources,convenientlylocatedoffices,andtechnicalexpertisetohelpyounavigateyourwaytosuccess..MassAdwnsPi()J)()Sa1ft)!‘IrzickceT)oniwrPublitLTtilthjI)istrit,ti Power&UtilitiesExpertiseOurUtilityServicesOurprofessionalsprovideaccounting,tax,andconsultingservicesforpublicpowergeneration,transmission,anddistributionmarkets;water;wastewater;andsolidwasteutilities.WehaveongoinggeneralauditservicesinOregon,Washington,California,Alaska,Arizona,Colorado,Hawaii,Idaho,Kansas,Montana,andNewMexico,includingcooperativeorganizations,municipalentities,publicutilitydistricts,mutualcorporations,jointpowersentities,andindependentpowerproducers.Ourclientsdealwithmanyofthesameissues,risks,opportunities,andconstraintsyoudo.We’reexperiencedandfamiliarwiththeterrainyouface,andthismakesusmoreeffectiveauditorsandbusinessadvisors.OurutilitypracticeprofessionalsarewellversedintheissuespertainingtoL:largemunicipalutilitiessuchasGASB.t—No62regulatoryaccountingenvironmentalremediationliabilities;largeconstructionprojectsofinfrastructureandrelatedissues,suchasconstructionin-progressaccounting,classificationandtracking,capitalizedinterest,applicationofoverhead,anddepreciation;andbondrelatedaccountssuchasarbitrageliability,debtdefeasanceandrefundings,andcovenantcompliance.Virtuallyallofourlarge,publicutilitiesfacesimilarissues.We’llcontinuetoprovideTruckeeDonnerPUDwithadedicatedteamofutility-specializedprofessionalsonyourengagementthatareuptospeedonallthelatesttrendsandoccurrencesinyourindustry.Inadditiontoourcoreauditandtaxservices,ourconsultingpracticeoffersIT,cybersecurity,businessfeasibility,ratework,restructuringandworkflowdesign,performanceaudits,andstrategicplanning.Ourclientsincludepublicutilitydistricts,regionalutilityplanningassociations,andcooperatives.]WossAdamsIPr(),)()S(1tt(flTTUCkL’€T)()fllwr[UhiwLTti1itj1)istrkt2 YourServiceTeamWorkingwiththerightteamofprofessionalsmakesallthedifferencetoyourengagement.Theteammemberswevethoughtfullyselectedtoserveyourspecificneedshaveyearsofpowerandutilitiesexperience.Butmorethanthat,you’llfindtheybringanoptimisticperspectivefocusedonhelpingTruckeeDonnerPUDexploreandembraceemergingopportunity.YourMossAdamsteamwillpersonallyengagewithyourteamandbringanewlevelofenergyandenterprisetoyourengagement.KeithSirnovic,CPA,SeniorManager-:i9ProfessionalExperienceKeithhaspracticedpublicaccountingsince2007.Heprovidesassuranceservicestoclientsintheenergy,utility,andgovernmentindustries.Keithprimarilyworkswithutilitycompaniesandhassignificantexperienceinadvancedutilityaccounting,derivatives,andpowerhedging.HeisaregularpresenterfortheAmericanPublicPowerAssociationandNorthwestPublicPowerAssociationonsubjectsincludingutilityaccountingandutilitybudgeting.ProfessionalAffiliations.Member,AmericanInstituteofCertifiedPublicAccountantsSMember,OregonSocietyofCertifiedPublicAccountantsEducation.BS,accounting,OregonStateUniversityKeithwillserveasyourengagementreviewer.]W)ssAdamsPr()I)()sa(t()r7itkc’ef)()nflel’IkthHcUtilityI)istrkt3 JulieDesimor;e,CPA,Partner&NationaiPracticeLeader,Power&UtilitiesProfessionalExperienceJulieistheleaderofthefirmsPower&UtilitiesPracticeandhasbeenprovidingauditing,accounting,andconsultingservicessince2000.Sheservesclientsintheenergyandutilityindustry,includingenterprisefundsofgovernments.Someofherspecificareasoffocusinclude:advancedutilityaccounting,regulatoryassetsandliabilities,technicalauditing(includingsingleaudits),contracting,internalcontrolevaluation,litigationsupport,andrelationshipmanagement.Juliecurrentlyservesonthefirm’straininganddevelopmentcommittee,audittaskforce,andrecruitingprogram.Inaddition,sheservesasanAICPApeerreviewerandisaregularspeakerontechnicalandoperationalissuesrelatedtotheenergyandutilityindustry.ProfessionalAffiliations.Member,AmericanInstituteofCertifiedPublicAccountants.Member,WashingtonSocietyofCertifiedPublicAccountants.Boardmember,WashingtonStateUniversityBusinessAdvisory.Boardmember,CampUKANDUEducation;BA,accounting,WashingtonStateUniversityJuliewillserveasatechnicalresourceforyourengagement.P/lossAdamsProposat/nTruckeeDonnerPublictitilityI)istrict4 ScottSimpson,CPA,PartnerScottwillserveasyourqualitycontrolreviewpartner.ProfessionalExperiei;ceScotthaspracticedpublicaccountingsinceI997,includingfouryearsataBigFourfirm.Hisfocusisonauditsofutilityandinsurancecompanies,highereducationinstitutions,researchinstitutes,not-for-profitorganizations,andgovernmentalentities.Scotthasperformedauditsinaccordancewith0MBCircularA-i33aswellasprogramauditsasrequiredbytheDepartmentofEducation.HehaspreparedfinancialstatementsunderGASB,FASB,andstatutorybasisaccounting.Hehasvastexperienceassessing,observing,andtestinginternalcontrolenvironmentsandcompliancewithlaws,regulations,andgrantrequirements.Inadditiontoservinghisclients,Scotthastaughtsessionsattrainingsrelatedtohighereducationandisinvolvedinthefirm’scollegerecruitingprogramandothertrainingprograms.Hepreviouslyservedaspartnerinchargeofthefirm’sEugene,Oregon,officeandhasheldvarioustechnicalleadershiproleswithinthefirm.ProfessionalAffiliations.Member,AmericanInstituteofCertifiedPublicAccountants,Member,OregonSocietyofCertifiedPublicAccountantsEducationSB$,businessadministration(accountingemphasis),NorwichUniversityMelissaRuschefti,CPA,SeniorProfessionalExperienceMelissabeganhercareerwithMossAdamsin20i6.Shehasexperiencewithrecurringauditengagementsandhasmanagedallphasesofanauditincludingplanning,controltesting,fieldwork,andreportpreparation.Shehasexperienceservingavarietyofclientswithintheutility,not-for-profit,andmanufacturingindustries.ProfessionalAffiliations.Member,MontanaSocietyofCertifiedPublicAccountantsEducation.BS,businessandinformationtechnology(accountingandbusinessmanagementoptions,MontanaTechoftheUniversityofMontana.MA,accounting,UniversityofMontanaMelissawillserveasyourengagementseniorstaff?vlossAdwnsProposal/brTrwkee1)onnerPubikITtility1)istikt5 QualjtyServiceandStaffWe’llutilizeauditstaffwhoareknowledgeableaboutgovernmentalaccountingstandardsandmunicipalutilitiesandhavemetand/orexceededcontinuingeducationalrequirements.Weregularlychangethestaffauditorsassignedtoyourengagementandwillcontinuetodosoinordertoprovideyoufresheyesandnewperspectivesfromyourauditteam.Ourstaffandseniorstaffaretrainedinthepowerandutilitiesindustry,soevenwithdifferentstaffrotatingontotheauditengagementfromtimetotime,youcanbeassuredthatthestaffareexperiencedatauditingpublicutilitydistrictsandareuptospeedonthelatesttrendsimpactingtheindustry.AtMossAdams,ourgoalistohireandkeeppeoplewhobelievein,anddemonstrate,asincerepassionforexcellenceintheirwork,andadeepcommitmenttointeractingwitheachandeverycolleagueandclientwithrespect.Thisgoalcannotbeachievedwithoutwell-trained,highlymotivatedpeoplewhoarecontinuallychallengedandgrowingintheirprofessionalabilities.We’veimprovedourcapacityandcapabilitiesbybecomingmoreeffectiveatrecruiting,performancefeedbackandcoachingprograms,retainingourbestpeople,andtraininganewgenerationofleaders.Inrecentyears,we’vemadeprogressasdemonstratedbyaneverincreasingnumberofnewlyadmittedpartnerswhohavespentmanyyearsatMossAdams.Ourfirmvaluesemphasizeabalancebetweenambitiousprofessionalgoalsandawell-livedlife.Weknowthesevalueshavehelpedustoretainqualitystaff,andmakeusdifferentfromotherfirms.P’iossAdamsProposal/in7r’zwkce1)onnerPubiit:UtilityI)isbict6 ClientReferences(541)685-7386(760)339-9345(.503)848-3017I(360)992-34951HearforyourselftheuniqueexperienceourcHentshaveinworkingwithourfirm.Wereconfidentthey’llsharestoriesofhowwemaketheirliveseasier,helpthemidentifyandtakeadvantageofrisingopportunities,andguidethemtoincreasedprosperity.EUGENEWATER&ELECTRICBOARDIMPERIALIRRIGATIONDISTRICTTUALATINVALLEYWATERDISTRICTPUBLICUTILITYDISTRICTNOIOFCLARKCOUNTYSueFaheyBalenValenzuelaPaulMatthewsMelissaAnkenyIIpf()s5AdamsProposatfor7ickcei)Oflhl(TPubhtLTtility1)istrkt feesForourclients,it’saboutmorethanthedollarsyoupayattheendoftheday;it’saboutvalue.Considerboththetangibleandintangiblebenefitsofcontinuingtoworkwithus.Youvereceivedsolidandtimelydeliverables.Butmorethanthat,theexperienceyou’llhaveworkingwithforward-thinking,industry-specializedprofessionalswhoworksidebysidewithyoutoexplorenewpossibilitiesiswhereyou’llseethevalue.Investinyourfutureprosperityandexperienceadifferentstyleofservicewithus.FinancialstatementauditforTruckeeDonner$47,000$48,000$49,000PublicUtilityDistrictforthefiscalyearsendingDecember31Out-of-pocketexpenses$6,500$6,500$6,500Attendanceatboardmeetings,including:Included.Presentationofauditresults.Communicationofinternalcontrolissues.ManagementletterConsulting,asneededHourlyratesFeeDetailsOurproposedfeesarealsobasedonapresumptionthatyourbooksandrecordswillbeingoodconditionandyouraccountingandfinancestaffwillprovidereasonableandcustomaryassistance.Theestimateisalsobasedonaccountingandauditingstandardsthathavebeenissuedasofthedateofthisproposalsubmission,whichcoverarangeofissuesonanauditor’sassessmentofriskandrequiredauditdocumentation.Accountingandauditingstandardscananddochange,soiffuturechangesaresignificantenoughtowarrantit,we’llmodifyourauditapproach,procedures,andscopeofwork.Beforedoingso,however,we’llnegotiateanyadjustmenttoourfeeswithyou.Pvfos.sAdamsIrOpf)SUtf()1fluckeeDonner’PublicUtilityI)Ls’trict8ServiceDescriptionoozoai CostOverrunsDuringthecourseoftheaudft,wellmeasureourprogressagainstourplannedbudget.Ifsituationsarisethataresignificantlydifferentthanourexpectations,we’llbringthemtoyourattentionimmediatelyanddiscussvariousoptionsbeforeweproceed.Wellmeetweeklyduringthecourseoffieldworkwiththeappropriatepartiestoensurethereareopenlinesofcommunicationbetweenourorganizations.ProgressBillingProgressbillingsarebasedonhoursandexpensescompletedatthetimeofbilling.Billsaredueuponreceipt.Wereservetherighttochargeinterestonaccountsover30dayspastdue.RoutinePhoneCallsandOurpolicyistonotchargeforshorttelephonecallsseekingEmailsmiscellaneousadviceunlessthoseconsultationsrequiresignificantadditionalworkorresearch.Ifamatterrequiresfurtherfollow-up,we’lldiscussafeeestimatewithyoubeforeincurringsignificanttime.ExpensesDirecttravelexpenseswillbebilledmonthlyasincurredandwon’t-exceedtheproposedtravelexpenseamountsnotedpreviously.MinorResearchandIfwe’rerequestedtoprovideminorresearchorconsultationservice,Consultationwe’llestimatethenumberofhoursnecessarytoprovidetherequestedservices.We’llthenprovideafeequoteforyourapprovalbeforecommencinganywork.Ourleesfortheseservicesaregenerallyatourstandardbillingrates.Asst1rUflLe,tax,andtvnsttltiiijofferedthrouqhPJossAdamsLLP.Inz’estnwntadvisoryser’it’sIWOSSACIUIflSI4ECZ1thAdvisorsLLC.Investmentbanking(IferedthroughMoss.lclanzsCapitalLLC.?vfossAdamsIl()j)()SUtt()1ttckcei)onnerPubiitTtilitiji)istrkt9SubjectTheDetails