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HomeMy WebLinkAbout17 Attachment 1 Financial Auditors MA TDPUD Proposal Aug 2022 MOSSADAMS 0 P P 0 R T U N I T Y R I S I N G AUDIT PROPOSAL FOR TRUCKEE DONNER PUBLIC UTILITY DISTRICT Keith Simovic, Partner Moss Adams LLP 805 SW Broadway,Suite 1200 Portland,OR 97205 (503)242-1447 M Q S S A D A M S Dear Michael: Thank you for the opportunity to present this proposal to Truckee Donner Public Utility District(Truckee Donner PUD)for audit services.We've enjoyed working with you and your team in the past and are excited about the prospect of working with you again.We hope you find our firm is highly qualified and has vast experience serving entities similar to Truckee Donner PUD.We believe the following identifies us as the best choice to serve you: • Experience with power and utility clients.With over 140 power and utilities clients firmwide,we're deeply familiar with the sector you operate in.Our focus and involvement in your industry means we understand the challenges you face and the best way to address them. • Specialized service offerings.Moss Adams provides a full range of assurance,tax,and consulting services to a significant number of clients that are August 26,2022 similar to Truckee Donner PUD,and we'll leverage all aspects of this experience as necessary to add value to your organization. Michael Salmon 0 Solid relationships.Truckee Donner PUD needs a team dedicated to working CFO closely with management as an essential advisor—a team that's more than a Truckee Donner Public once-a-year service provider.That's why during the engagement and throughout Utility District 11570 Donner Pass Road the year,we'll solicit and encourage communication to facilitate a smooth Truckee,CA 96161 process,and keep management apprised of new accounting pronouncements and industry-related challenges and opportunities. You'll find we offer an exceptional combination of experience and resources to not only meet your needs,but also add value to Truckee Donner PUD at a competitive price.We bring a rare blend of inspiration and technical excellence to help our clients discover and claim the future.Our focus on helping you recognize and take advantage of rising opportunities is what sets us apart from other firms. We commit to continue making Truckee Donner PUD a long-term and extremely satisfied client of Moss Adams.Our personal promise to you is to be sure you receive the best service Moss Adams is capable of providing.We're enthusiastic about the opportunity to serve you,and appreciate your consideration of our firm. Sincerely, Keith Simovic,CPA Partner (503)478-2284 keith.simovicomossadams.com Table of Contents Power& Utilities Expertise 1 Power& Utilities Practice 1 Audit Services 3 Financial Statement Audit Approach 3 Timeline 4 ' Your Service Team 5 Fees 8 About Moss Adams 10 Power & Utilities Expertise POWER & UTILITIES PRACTICE Our professionals provide accounting, tax, and J(_ consulting services to more than 140 public power generation, transmission, and distribution markets; f water; wastewater; and solid waste utilities. We provide ongoing general audit services in Oregon, + power and utilities clients Washington, California, Alaska, Arizona, Colorado, across the nation Hawaii, Idaho, Kansas, Montana, and New Mexico— including cooperative organizations, municipal entities, public utility districts, mutual corporations, joint powers entities, and independent power 2 Q Q+ producers. Our clients deal with many of the same professionals issues, risks, opportunities, and constraints you do. We're experienced and familiar with the terrain you face, and this makes us more effective auditors and ' business advisors. Crater Lake— Our Power& Utilities Practice professionals are well A monument to perseverance,North America's versed in the issues pertaining to large municipal deepest lakefilled to 1,949feet over 72o years. Data as of January 2022 utilities such as: GASB 62 deferral accounting; environmental remediation liabilities; large construction projects of infrastructure and related issues, such as construction-in-progress accounting, classification and tracking, application of overhead, and depreciation; and bond-related accounts such as arbitrage liability, debt defeasance and refundings, and covenant compliance. Virtually all of our large public utilities face similar issues. We'll provide Truckee Donner PUD with a dedicated team of utility- specialized professionals on your engagement who are up to speed on all the latest trends and occurrences in your industry. In addition to our core audit and tax services, our consulting practice offers IT, business feasibility, rate work, restructuring and workflow design, performance audits, and strategic planning. Our clients include public utility districts, regional utility planning associations, and cooperatives. Experience Serving Large Municipal-Owned Utilities and Joint Powers Agencies We currently serve as an independent auditor to many municipal utilities and joint powers agencies. We understand the accounting and operations issues facing these utilities such as accounting for derivatives and energy contracts, and the complexities of accounting for municipal bonds, utility plant, and environmental liabilities. Moss Adams also has experience assisting organizations with receiving and maintaining their GFOA Certificates of Achievement for Excellence in Financial Reporting. Moss Adams I Proposal for Truckee Donner Public Utility District 1 Utility Clients Below is a partial list of our utility and energy clients: Utility Practice Clients(Within the Last Three Years) • Alaska Power and Telephone Company Kirkwood Meadows Public Utility District • Arizona Electric Power Cooperative Klickitat Public Utility District • Benton PUD Lassen Municipal Utility District • Central Electric Cooperative Matanuska Electric Association Inc. • Clackamas River Water District McMinnville Water& Light • Clark Public Utilities New Braunfels Utilities • Clatskanie People's Utility District Northern Lights Inc. • Clean Water Services 9 Okanogan County Electric Cooperative • Commercial Energy of California 0 Pend Oreille County Public Utility District • Cordova Electric Cooperative Inc. 0 Public Utility District No. 1 of Grant County • CORE Electric Cooperative - Public Utility District No. 1 of Lewis County • Douglas Electric Cooperative Seattle Public Utilities • Emerald People's Utility District 9 Southern California Public Power Authority • Energy Keepers Inc. 0 Springfield Utility Board • Eugene Water& Electric Board 0 Tacoma Public Utilities • Gila River Indian Community Utility Authority Truckee Donner Public Utility District • Imperial Irrigation District 0 Tualatin Valley Water District • Kauai Island Utility Electric Cooperative 9 Turlock Irrigation District Moss Adams I Proposal for Truckee Donner Public Utility District 2 Audit Services FINANCIAL STATEMENT AUDIT APPROACH Establish IL •. ® `, Perform Audit Conclude Audit Conduct entrance Learn about the Perform control • Meet with Board of meetings organization procedures Directors Perform risk Apply substantive assessment tests Evaluate transaction Execute analytical flows and controls and data analyses Management Team Risk Assessment and Audit Execution Final Reports Communication Audit Approach Design Truckee Donner PUD will benefit from our customized, risk-based audit approach as well as the timely and effective communication and coordination of our audit activities. With dedicated and ongoing involvement from our partners and senior-level professionals, the audit will be planned and executed by an experienced team that understands your industry. During the audit, your Moss Adams engagement leader, Keith Simovic, will review the work in progress and address any issues with management. This reduces time spent on post-audit procedures and wrap-up. Our emphasis on tailoring an audit to focus on the areas of significant risks allows us to complete the audit in an efficient and effective manner. Our audit will include the following: Plan the engagement based on a thorough understanding of your business risks and transactions Communicate and coordinate activities with management and the audit committee based on an agreed-upon timeline Conduct continuous audit procedures to increase efficiency and reduce the burden on your personnel at year-end Work with management to resolve any complex accounting or reporting issues as early as possible in the audit process Provide recommendations to management for areas of improvement Moss Adams I Proposal for Truckee Donner Public Utility District 3 TIMELINE The following is a proposed engagement schedule for Truckee Donner PUD. We'll discuss any adjustments you may need when we meet with you. Service Description Proposed AUDIT PLANNING Meet with management for pre-audit planning and to obtain an September/October understanding of systems, internal controls, and current-year issues 2022 Provide management with a detailed list of items needed to perform the September/October audit, including the timing of when items are needed 2022 AUDIT FIELDWORK PERFORM INTERIM AUDIT FIELDWORK AND TESTS OF INTERNAL November 2022 CONTROLS Send confirmations of cash, investment, and other accounts as deemed January/February 2023 necessary Perform substantive audit fieldwork March/April 2023 REPORT PREPARATION Present draft of financial statements, audit report, and management letter to April 2023 senior management BOARD COMMUNICATIONS Present final audit report, financial statements, and management letter to May 2023 the board of directors Moss Adams I Proposal for Truckee Donner Public Utility District 4 Your Service Team Working with the right team of professionals makes all the difference to your engagement. The team members we've thoughtfully selected to meet your specific needs have years of relevant experience. But more than that, you'll find they bring an optimistic perspective focused on helping you explore and embrace emerging opportunity. Your Moss Adams team will personally engage with your team and bring a new level of energy and enterprise to your engagement. Keith Simovic,CPA,Partner Professional Experience Keith has practiced public accounting since 2007 and provides assurance services to clients in the local government and utility industries. He has significant experience in advanced accounting topics including capital project cost accounting, pension accounting, and regulatory deferral accounting. He also has a strong track record of evaluating internal controls and providing insightful recommendations to help his clients improve, grow, and thrive. Engagement Reviewer/Partner Keith is a regular presenter for the Oregon Government Finance Officers Association, Oregon Society of Certified Public Accountants, American Public Power Association, Western Energy Institute, and Northwest Public Power Association on subjects including internal controls,fraud, and budgeting. Professional Affiliations Member, American Institute of Certified Public Accountants Member, Oregon Society of Certified Public Accountants Board treasurer, Oregon Repertory Singers Education BS, accounting, Oregon State University (summa cum laude) Moss Adams I Proposal for Truckee Donner Public Utility District 5 Julie Desimone, CPA,Partner,Industry Group Leader for Energy,and National Practice Leader, Power, Utilities&Renewable Energy Professional Experience Julie has provided auditing, accounting, and consulting services for over 20 years. She serves clients in the energy, utility, and renewable energy industries. Some of Julie's focus areas include industry analysis, advanced utility accounting, contracting, internal control evaluation, litigation support, and ^, relationship management. Quality Control Julie participates in the firm's recruiting program and has served on the firm's Reviewer and executive committee and assurance services committee. In addition, she has Partner worked on projects with both the Financial Standards Accounting Board and the Governmental Accounting Standards Board and is a regular speaker on technical, operational and industry related issues. Professional Affiliations Member, American Institute of Certified Public Accountants Member, Washington Society of Certified Public Accountants Board member and treasurer, Grid Forward Board member, Washington State University Business Advisory Board member and treasurer, Camp UKANDU Education BA, accounting, Washington State University Ayde Alvarado,CPA,Senior 1 Professional Experience Ayde performs audits of various organizations in Oregon, including governmental entities. She has a solid foundation of accounting knowledge, r and her duties include identification and understanding of our client's 1 accounting principles as well as completion of audit tasks in assigned areas. She also participates in engagement or project planning and takes ownership of assigned tasks and understands roles in the overall project. Managing budgets and efficiency are part of the duties she performs. Relevant Client Experience Tillamook People's Utility District Midwest Energy& Communications Kaua'i Island Utility Cooperative Southern California Public Power Authority Moss Adams I Proposal for Truckee Donner Public Utility District 6 Ayde Alvarado,CPA,Senior • Central Lincoln People's Utility District • Canby Utility Education • BS, accounting, Warner Pacific University Moss Adams i Proposal for Truckee Donner Public Utility District 7 Fees For our clients, it's about more than the dollars you pay at the end of the day; it's about value. Consider both the tangible and intangible benefits of working with us. You'll get solid and timely deliverables. But more than that, the experience you'll have working with forward-thinking, industry-specialized professionals who work side by side with you to explore new possibilities is where you'll see the value. Invest in your future prosperity and experience a different style of service with us. DescriptionService •22 2023 2024 Financial statement audit for Truckee Donner $52,000 $54,000 $55,000 Public Utility District for the year ending December 31 Travel expenses* $7,000 $7,250 $7,500 Attendance at your Board meetings, including: Included • Presentation of audit results • Communication of internal control issues • Management letter Consulting, as needed Hourly rates Total $59,000 $61,250 $62,500 Fee Details *The proposed travel expenses can be reduced or eliminated completely depending on whether Truckee Donner PUD management chooses on-site or remote audit fieldwork. Our proposed fees are also based on a presumption that your books and records will be in good condition and your accounting and finance staff will provide reasonable and customary assistance. The estimate is also based on accounting and auditing standards that have been issued as of the date of this proposal submission, which cover a range of issues on an auditor's assessment of risk and required audit documentation.Accounting and auditing standards can and do change, so if future changes are significant enough to warrant it, we'll modify our audit approach, procedures, and scope of work. Before doing so, however, we'll negotiate any adjustment to our fees with you. Moss Adams I Proposal for Truckee Donner Public Utility District 8 Subject Progress Billing Progress billings are based on hours and expenses completed at the time of billing. Bills are due upon receipt. We reserve the right to charge interest on accounts over 30 days past due. Expenses Our engagement letter will provide an estimate of the expenses for the services to be provided. Direct travel expenses will be billed monthly as incurred. Moss Adams will include a standard 5% administrative and technology fee as part of standard expenses on all engagements. This fee covers certain costs that some firms bill separately, including tax and report processing charges, confirmation fees, filing fees, technology fees, and administrative billable time. Cost Overruns During the course of the audit,we'll measure our progress against our planned budget. If situations arise that are significantly different than our expectations, we'll bring them to your attention immediately and discuss various options before we proceed. We'll meet weekly during the course of fieldwork with the appropriate parties to ensure there are open lines of communication between our organizations. Routine Phone Calls and Our policy is to not charge for short telephone calls seeking Emails miscellaneous advice unless those consultations require significant additional work or research. If a matter requires further follow-up, we'll discuss a fee estimate with you before incurring significant time. Minor Research and If we're requested to provide minor research or consultation service, Consultation we'll estimate the number of hours necessary to provide the requested services. We'll then provide a fee quote for your approval before commencing any work. Our fees for these services are generally at our standard billing rates. Moss Adams I Proposal for Truckee Donner Public Utility District 9 About Moss Adams y Moss Adams is a fully integrated professional services firm dedicated to growing, managing, and • protecting prosperity. With over 3,800 professionals • across more than 30 locations in the market • capitals of the West and beyond, we work with the world's most innovative, dynamic, and promising clients and markets. Through a full spectrum of ,;; • accounting, consulting, and wealth management services, we bring the deep industry specialization and inspired thinking our mid-market clients seek. L� • Since we put down roots in the Pacific Northwest • more than 100 years ago, we've steadily expanded • to serve clients not only in the West, but also across the nation and globally. Our full range of 30+ • services includes accounting (assurance and tax), locations west of consulting (IT, strategy&operations, transactions, the Mississippi and specialty), as well as individual and institutional wealth management. Moss Adams is one of the 15 largest US accounting and consulting firms and a founding member of Praxity, a global alliance of independent accounting firms providing clients with local expertise in the major markets of North America, South America, Europe, and Asia. Full-Service Capabilities We offer a full range of services and specializations that span accounting, consulting, and wealth management to suit your specific needs. Accounting Consulting Wealth Management STRATEGY & OPERATIONS INSTITUTIONAL TRANSACTIONS INTERNATIONAL Assurance, tax, and consulting offered through Moss Adams LLP. ISO/IEC 27001 services offered through Cadence Assurance LLC, a Moss Adams company. Investment advisory services offered through Moss Adams Wealth Advisors LLC. Moss Adams I Proposal for Truckee Donner Public Utility District io