HomeMy WebLinkAbout9 Virchow Krause Contract Agenda Item # 9
Public Utility District
ACTION
To: Board of Directors
From: Mary Chapman
Date: August 06, 2008
Subject: Consideration of Renewing Virchow Krause's Contract as District
Auditors to Perform the 2008 Through 2010 Audits
1. WHY THIS MATTER IS BEFORE THE BOARD
The auditors are hired by the Board of Directors and report to the Board of Directors.
2. HISTORY
Three years ago, the Board authorized staff to issue a "Request for Statements of
Interest and Qualifications" to auditing firms for the purpose of selecting auditors to
perform the 2005 annual audit. The Board reviewed the qualifications of several firms
that responded and interviewed three of the firms. Each firm was required to provide
their costs for a three year period separately from their proposal. The Board selected
Virchow Krause to perform the District's audit for 2005. The Board made their
selection before checking the quoted prices. As it turned out, Virchow Krause also
had the lowest price of the three firms. Subsequently, the Board appointed Virchow
Krause to perform the 2006 and 2007 audits.
3. NEW INFORMATION
Virchow Krause just completed the third year of the proposed audits. At this time, the
Board needs to decide whether they want to enter into a new contract with Virchow
Krause or whether they want staff to begin the process of issing a "Request for
Statements of Interest and Qualification" which would be followed up by a Request for
Proposal and the interview process.
4. FISCAL IMPACT
Attached is a renewal contract from Virchow Krause to perform the 2008 audit with
options to perform the audits for 2009 and 2010. The prices that they have proposed
are all inclusive and are as follows:
2008 Audit $55,000
2009 Audit $58,000
2010 Audit $60,000
Hiring a new firm would require staff time to deal with the process to hire a new auditor
including preliminary discussions with each firm who might be interested. It would
also require more staff time in educating the new auditors on the District's processes
and operating procedures. The auditors would also incur more expense in transferring
files from the previous auditors and doing their startup work to get ready for the first
year audit.
5. RECOMMENDATION
That the Board consider hiring Virchow Krause to perform the audits for 2008, 2009
and 2010.
Mary Cha n Michael D. Holley
Administrative Services Manager General Manager
Proposal for
Financial Auditing Professional Services
Truckee Donner Public Utility District
Truckee, CA
For the Year Ending
December 31 , 2008
and
Option for Two Additional Years
virchowKrause
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"Providing National Leadership for Public Power Entities"
Ten Terrace Court
P.O. Box 7398
Madison,WI 53707-7398
800.362.7301
virchowkrause.com
Thomas E. Unke,CPA,Partner
608.240.23 94
tunke;'iz vi-cho ki-atise.com
July 30,2008
Table of Contents
LETTER OF TRANSMITTAL
1' FIRM QUALIFICATIONS AND EXPERIENCE.....................................1
About VbobowKruuxe--------------------------- /
Utility Staff Expertise and Resource Commitment...................................... l
AuditQuality Control...................................................................................z
NoDisciplinary Action.................................................................................z
Peer Review Letter(2006)............................................................................3
2. PARTNER, SUPERVISORY& STAFF QUALIFICATIONS &
EXPERNENCE......--..,......--~^^'`~--'~^~^^^'^~~^^^'^^'-^'-^`'~^-'^-'^7
Supervisory Personnel..................................................................................7
Auauomoc of Staff,Continuity and Quality..................................................7
AuditServices Team....................................................................................w
l3
CPE Po�o�--------------------------------.
Qualifications,Capabilities and 2zpezieoce---------------.. 14
Audit Team Qualifications and Experience................................................ l5
3. SIMILAR ENGAGEMENTS-ELECTRIC UTILITIES AND A133
AUDITS.............................................................................................16
4 SPECIFIC AUDIT APPROACH...........................................................18
Segmentation of the Engagement............................................................... lV
AuditSchedule...........................................................................................2l
Sampling Approach/Internal Controls......................................................22
papcdeuAudit Software............................................................................23
Location and Technology ioPerforming Audits........................................23
AoulybouPuocedurex---------------------------z»
Impact oo Audit Procedures for Sudbuueu-Ozley Compliance...................24
5. OTHER KEY INFORMATION.............................................................25
Administrative Items---------------------------.25
Assistance From the District.-----------------------.25
Relationship with Bond Agencies..............................................................25
MuuuQeoeotLetter.....................................................................................26
Technical Resource.....................................................................................2o
6. FORENSIC ACCOUNTING EXPERTKSE,...--.~~.....-.......'..-..:27
VirchowKrause
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LETTER OF TRANSMITTAL
July 30,2008
The Board of Directors
Truckee Donner Public Utility District
11570 Donner Pass Road
Truckee,CA 96161
Dear Board of Directors:
We appreciate the opportunity to submit this proposal to the Truckee Donner Public Utility District(the"District").
Selecting an audit firm that provides quality service and understands the unique operating environment of the public
power industry is important to the continued success of your organization.Our proposal is based on the Request for
Proposal(RFP)and our substantial experience with other similar utilities throughout the United States.
Understanding of the Work
Our proposal includes financial audit services for the District for the year ending December 31,2005,with the
option of auditing the District's financial statements for each of the two subsequent fiscal years at the discretion of
the District through December 31,2010,and to provide technical assistance to the District from December 31,2008
through December 31,2010.The purpose of the audit will be to express an opinion on the fair presentation of the
District's financial statements in conformity with accounting principles generally accepted in the United States of
America and in conformity with the requirements of GASB and FASB
Why Do We Believe that Virchow Krause is the Best Qualified
We know you.Virchow Krause has served as the District's auditor for the last three yers.We understand your
business,your processes,and your needs.
National Recognition.Virchow Krause is nationally recognized in the public utility industry and provides
services to utilities in 38 states.Our largest public power client has six billion dollars of assets and serves 1.1
million customers.We are also sought out by national organizations such as the American Public Power
Association to speak,teach courses,and represent the industry. In addition,we provide expert testimony to
FERC and state agencies.We have assisted with bond issuances for over two billion dollars in financing,
including representation of utilities at S&P and Moody's.
Unsurpassed Industry Specialization.Virchow Krause has a substantial history of utility and joint action
auditing and accounting.Our Public Sector Group includes over 100 full-time employees currently providing
services to over 260 public utilities.As the 15th largest CPA firm in the nation,we also have specialists in
consulting,internal audit,technology,human resources,and other areas available to serve the District.
Comfort with Rating Agencies.We provide significant credibility with rating agencies when placing audit
opinions on financial statements. Recently,we were approved to conduct an audit of another utility,primarily
based on being recognized as having"national recognition in the joint action community"by the public finance
community.
Ten Terrace Court•PO Box 7398•Madison,WI 53707-7398•Tel 608.249.6622•Fax 608.249.8532•www.virchowkrause.com
Virchow, Krause&Company, LLP
Certified Public Accountants&Consultants•An Independent Member of Baker Tilly International
The Board of Directors
Truckee Donner Public Utility District
July 30,2008
Page 2
Team Capability and Chemistry.Our employees are genuinely nice people.Virchow Krause's key strategies
include employing technical experts that people like to work with.We know you have a choice to select
multiple vendors.Wouldn't you like to work with nice people?Our chemistry fits public power entities nicely.
Experience.We understand the needs and pressures facing public power.Our continuing relationship with
hundreds of utilities and other public sector entities provides a strong foundation to meet the District's needs.
We have presented seminars on a variety of public utility financial and management issues at both the national
and regional levels.Our staff comes ready with the experience and creativity to find practical solutions and
provide the District with value for the services we will provide to you.
Depth of Resources.The members of the project team have extensive prior utility experience.Your staff will
not need to spend time explaining the intricacies of the industry.As a team,we are committed to low
engagement turnover.If turnover does occur,we have the team depth to utilize personnel that are equally
experienced in the industry to serve you.The average experience level of the District's engagement team
approaches 15 years.With this level of experience,you can be assured of prompt and knowledgeable
experience.
Relationships.Virchow Krause's philosophy and desire is to build long-term relationships with our clients.We
will take the time to learn and understand your organization and needs.Our goal is to provide valuable service
and contribute to your success by serving as your most valued advisor.We hope that our client service
philosophy,expertise,and reputation for quality will be major factors you consider when evaluating our firm.
In subsequent sections of our proposal we present additional information regarding the audit objectives and
approach,our qualifications and experience,the project team,references regarding similar engagements and other
significant information consistent with your technical requirements.
We appreciate the opportunity to submit this proposal and look forward to hopefully working with the District's
staff and your Board of Directors on this engagement.
Sincerely,
VIRCHOW,KRAUSE&COMPANY,LLP
Thomas E.Unke,CPA,Partner
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Enclosures
1 . Firm Qualifications . • Experience
,ABOUT VIRCHOW KRAUSE
Virchow Krause is one of the largest and oldest certified public accounting firms
in the United States,originating in 1931.Our staff today includes 158 partners
and approximately 1,300 total staff located throughout 9 offices.
The 2007 Public Accounting Report ranked us as the 15th largest certified public
accounting firm in the United States. In 2004,they also rated us as one of the
fastest growing accounting firm in the United States.We have established
ourselves as a comprehensive service provider by not only being proficient in
our core competencies of accounting,auditing and tax,but also with our affiliate
and extended services.
Our mission is to serve as our clients'Most Valued Advisor.We strive to
achieve this by providing value-added advice and guidance throughout many
aspects of your organization.Our goal is to establish an enduring relationship
with you that you will count on for years to come.As a full service accounting
and consulting firm,we have a long history of commitment to our clients and
strive to ensure your complete satisfaction.Our staff responds to your needs by
carefully listening and evaluating your particular situation.We go beyond the
services of a traditional CPA firm to find innovative solutions and offer useful
suggestions to strengthen your organization.
UTILITY STAFF EXPERTISE AND RESOURCE COMMITMENT
Virchow Krause has taken a unique approach to serving public utilities and joint
action agencies. Our firm believes in and is organized around industry
specialization.Virchow Krause has an Energy and Utilities Group,consisting of
over 40 professionals,dedicated entirely to serving utilities.Because of this
specialized focus,our staff understands the issues you face and have the
experience to find effective solutions.All staff assigned to the District's audit
are full-time Virchow Krause staff who are experienced in utility accounting and
auditing.
The staffing for this engagement will be done out of our Madison,Wisconsin
and Minneapolis,Minnesota locations.
Our delivery plan will assign four(4)full-time professionals to the engagement
for audit fieldwork.Our firm doesn't believe in part-time employment to serve
our customers.The District will not have any part-time employees assigned
to this engagement.
VirchowKrau Apk AV
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Valued dvr Most AdvjtQ4 .
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1. Firm 06afiffli cations and Experience
AUDIT QUALITY CONTROL
We are members of the Securities and Exchange Commission Practice Section
(SECPS)and Private Companies Practice Section(PCPS)of the American
Institute of Certified Public Accountants.As members of the SECPS and PCPS,
we have agreed to subject our auditing policies and procedures to an
independent outside review.The peer review is required every three years,and
was successfully completed from 1982 through 2006.Many of the engagements
selected by the peer review team are governmental audits.
A copy of the most recent opinion is reproduced on the next page.As in the past,
we have received a"clean"opinion,the highest level of assurance we can obtain
regarding our audit practice.We did not receive a letter of comments.
In addition to the external peer review,Virchow Krause performs internal office
inspections annually,which ensures that we are maintaining our audit quality at
the highest possible standards.Mr.Kim L.Tredinnick,audit quality control
partner,also performs external peer reviews for numerous CPA firms
throughout the United States.
Utility audit inspections have taken place in every peer review conducted by
Virchow Krause.Since Virchow Krause performs over 200 utility audits
annually,it is an area that is always reviewed during peer reviews.
Virchow Krause's auditing procedures and workpapers are in full compliance
with the applicable federal and state guidelines as indicated elsewhere in this
proposal.Because of the large volume of public sector work we do,and the
numerous single audits we do every year,our workpapers and procedures often
undergo review by regulatory agencies.
We retain all workpapers for a specified period and the District can have access
to those workpapers at its discretion.
O DiSCIPLINARY ACTION
We are pleased to report that we have never had a finding of substandard work
or any disciplinary action against us by the State Board,AICPA or any other
federal or state agency.
The following pages are copies of our most recent peer reviews.
MmhowKrausp
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* Experience
1. Firm QualificationsPEER RE Y 1Ew LETTER TER(2006)
� � f
To the Partners of
Virchow,Krause&Company,LLP
and the Center for Public Company Audit Firms Peer Review Committee
We have reviewed the system of quality control for the accounting and auditing practice of Virchow,Krause&Company,
LLP(the firm)applicable to non-SEC issuers in effect for the year ended March 31,2006.The firm's accounting and
auditing practice applicable to SEC issuers was not reviewed by us since the Public Company Accounting Oversight
Board(PCAOB)is responsible for inspecting that portion of the firm's accounting and auditing practice in accordance
with PCAOB requirements.
A system of quality control encompasses the firm's organizational structure and the policies adopted and procedures
established to provide it with reasonable assurance of conforming with professional standards.The elements of quality
control are described in the Statements on Quality Control Standards issued by the American Institute of Certified Public
Accountants(AICPA).The design of the system,and the firm's compliance with it,are the responsibility of the firm.Our
responsibility is to express an opinion on the design of the system,and the firm's compliance with that system based on
our review.
Our review was conducted in accordance with standards established by the Peer Review Committee of the Center for
Public Company Audit Firms and included procedures to plan and perform the review that are summarized in the attached
description of the peer review process.Our review would not necessarily disclose all weaknesses in the system of quality
control or all instances of lack of compliance with it since it was based on selective tests.Because there are inherent
limitations in the effectiveness of any system of quality control,departures from the system may occur and not be
detected.Also,projection of any evaluation of a system of quality control to future periods is subject to the risk that the
system of quality control may become inadequate because of changes in conditions,or that the degree of compliance with
the policies or procedures may deteriorate.
In our opinion,the system of quality control fof-the accounting and auditing practice applicable to the non-SEC issuers of
Virchow,Krause&Company,LLP in effect for the year ended March 31,2006 has been designed to meet the
requirements of the quality control standards for an accounting and auditing practice established by the AICPA and was
complied with during the year then ended to provide the firm with reasonable assurance of conforming with applicable
professional standards.
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As is customary in a peer review,we have issued a letter under this date that sets forth comments relating to certain
policies and procedures or compliance with them.The matters described in the letter were not considered to be of
sufficient significance to affect the opinion expressed in this report.
Richmond,Virginia
August 25,2006
NhrchowKrauW
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Your Most Value:d. Advisor *Kvirchowhrause.com
1. Firm Qualifications and: Experience
Attachment to the Peer Review Report of Virchow,Krause&Company,LLP
Description of the Peer Review Process
Overview
Firms enrolled in the AICPA Center for Public Company Audit Firms(the Center)Peer Review Program have their
system of quality control periodically reviewed by independent peers. These reviews are system and compliance oriented
with the objectives of evaluating whether:
The reviewed firm's system of quality control for its accounting and auditing practice applicable to non-SEC issuers
has been designed to meet the requirements of the Quality Control Standards established by the AICPA.
The reviewed firm's quality control policies and procedures applicable to non-SEC issuers were being complied
with to provide the firm with reasonable assurance of complying with professional standards.
A peer review is based on selective tests and directed at assessing whether the design of and compliance with the firm's
system of quality control for its accounting and auditing practice applicable to non-SEC issuers provides the firm with
reasonable,not absolute,assurance of complying with professional standards. Consequently a peer review on the firm's
system of quality control is not intended to,and does not,provide assurance with respect to any individual engagement
conducted by the firm or that none of the financial statements audited by the firm should be restated.
The Center's Peer Review Committee(PRC)establishes and maintains peer review standards. At regular meetings and
through report evaluation task forces,the PRC considers each peer review,evaluates the reviewer's competence and
performance,and examines every report,letter of comments,and accompanying response from the reviewed firm that
states its corrective action plan before the peer review is finalized. The Center's staff plays a key role in overseeing the
performance of peer reviews working closely with the peer review teams and the PRC.
Once the PRC accepts the peer review reports,letters of comments,and reviewed firms'responses,these documents are
maintained in a file available to the public. In some situations,the public file also includes a signed undertaking by the
firm agreeing to a specific follow-up action requested by the PRC.
Firms that perform audits or play a substantial role in the audit of one or more SEC issuers,as defined by the Public
Company Accounting Oversight Board(PCAOB),are required to be registered with and have their accounting and
auditing practice applicable to SEC issuers inspected by the PCAOB. Therefore,we did not review the firm's accounting
and auditing practice applicable to SEC issuers.
Planning the Review for the Firm's Accounting and Auditing Practice Applicable to Non-SEC Issuers
To plan the review of Virchow,Krause&Company,LLP,we obtained an understanding of(1)the nature and extent of
the firm's accounting and auditing practice,and(2)the design of the firm's system of quality control sufficient to assess
the inherent and control risks implicit in its practice. Inherent risks were assessed by obtaining an understanding of the
firm's practice,such as the industries of its clients and other factors of complexity in serving those clients,and the
organization of the firm's personnel into practice units. Control risks were assessed by obtaining an understanding of the
design of the firm's system of quality control,including its audit methodology,and monitoring procedures. Assessing
control risk is the process of evaluating the effectiveness of the reviewed firm's system of quality control in preventing
the performance of engagements that do not comply with professional standards.
AhrchowKrausA�
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incations andExperience
Performing the Review for the Firm's Accounting and Auditing Practice Applicable to Non-SEC Issuers
Based on our assessment of the combined level of inherent and control risks,we identified practice units and selected
engagements within those units to test for compliance with the firm's system of quality control. The engagements
selected for review included engagements performed under the Government Auditing Standards,audits performed under
FDICIA and audits of Employee Benefit Plans. The engagements selected for review represented a cross-section of the
firm's accounting and auditing practice with emphasis on higher-risk engagements. The engagement reviews included
examining working paper files and reports and interviewing engagement personnel.
The scope of the peer review also included examining selected administrative and personnel files to determine compliance
with the firm's policies and procedures for the elements of quality control pertaining to independence,integrity,and
objectivity;personnel management;and acceptance and continuance of clients and engagements. Prior to concluding the
review,we reassessed the adequacy of scope and conducted a meeting with firm management to discuss our findings and
recommendations.
VirchowKrau_se
Your • Valued, 6 8 Y
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SUPERVISORY PERSONNEL
In developing our project team to serve the District we have matched the
capabilities of our personnel with your requirements.The following page lists
the key professionals that will serve on your audit.The roles of each of the
individuals are described on the organization chart and their resumes are
included in this proposal.We will not replace any key person without prior
approval by the District.We believe that project team continuity is a must in
order to produce an efficient and effective audit.
The people we have chosen to serve you are experienced personnel who
routinely deal with complex client situations in the utility environment.All key
audit personnel on the District's audit team have extensive experience in serving
public power utilities.They have the knowledge to perform in a responsive and
constructive manner,and bring to the engagement the necessary balance of
technical discipline,creativity and common sense.As a team,they will conduct
a highly coordinated,efficient and cost-effective audit of the District.
A significant reason why many of our clients stay with us for many years comes
down to our people.We care about our clients'business,and it shows in our
people.
The culture of our firm offers flexibility to our employees thus creating positive
work environment allowing us to retain our staff.We will keep the same people
on the job for as long as possible.This allows us to be as efficient as possible
and minimize your staff s time.
Mr.Unke,partner-in-charge,has been with Virchow Krause over 15 years and
the average experience of the District's team approaches 10 years of utility
experience.It is this kind of continuity that gives a firm our size the technical
edge over other firms whose audit staff that is constantly changing and may not
become as specialized.
ASSURANCE OF STAFF, CONTINUITY AND QUALITY
We understand how painful it is for utilities when you feel like a training ground
for new auditors.Our commitment is not to rotate staff without prior written
consent.
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AUDIT SERVICES TEAM
Project
Board of
Directors
Trucker Donner Public
Utility District
Kim Tredinnick,CPA,
Partner,Quality Control
Director
Tom Unke,CPA, Russ Hissom,CPA
Partner in-Charge Concurring Partner
Jodi Dobson,
CPA
Audit Manager
Maryam
Sadeghpour,
Audit Senior
Amanda Neuman
Staff
VirchowKrause
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Partner, aff Q al"f" ti & Experience
2. • su i ica ons
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ENGAGEMENT PARTNER-THOMAs E. UNKE
Tom Unke,Partner in the Energy and Utilities Group,has been with Virchow,
Krause&Company,LLP since 1991.He specializes in serving the financial and
operational needs of the utility industry. Specific focus areas include power
supply planning and negotiations,cost of service studies,unbundling and pricing
£ g of electric services,and strategic plan consulting including financial modeling
and facilitating focus group discussions,shared municipal service negotiations,
0.0
i,R cash flow studies,property records,accounting system design,and
feasibility studies.
x SPECIFIC EXPERIENCE
• Involved with emerging market issues relative to contract or
litigation support.
t. • Involved with the electric energy markets including MISO,NYISO,
and others.
• Develops cost sharing methodologies for cities,townships,and villages
in order to price joint services including wastewater treatment and
water distribution services.
• Develops cost-of-service models and rate design concepts used to
Thomas E. Unke, CPA attract and retain large industrial customers and send proper price
Partner signals necessary to enhance the customer's effectiveness and
efficiency.
608 240.2394 • Prepares econometric forecasts of sales,revenues,expenses,and other
tunke@virchowkrause.com operational components necessary to predict the timing of rate
adjustments,project financing,and cash flow.
• Completes financial evaluations to determine effect upon utility and
city earnings,cash flow,and levy needed when assessing options to
construct,retire,replace,or abandon utility infrastructure.
My promise to the • Develops activity based models used to price utility services including
District: marginal,embedded,incremental,and fully loaded recovery of costs
pricing strategies.
• Facilitates focus group discussions regarding strategic and operational
"l promise to serve initiatives including new business ventures and process change
the District with the or development.
highest level of • Provides expert testimony before state regulatory agencies on electric,
water,and wastewater utility revenue requirements;cost of service;and
service and integrity. rate design issues.
l have a passion for
the energy industry INI�uST�"wr INVOLVEMENT
• AICPA-American Institute of Certified Public Accountants
and feel that it Would • WICPA-Wisconsin Institute of Certified Public Accountants
be an honor to Wort[ • APPA-American Public Power Association
for the District." • Various state utility organizations.
• Frequent speaker both regionally and nationally on pricing of utility
services,financial planning for utilities,creative and innovative
financial reporting tools,rate unbundling,budgeting,and various
accounting topics.
• Authors various articles on topics related to the utility industry.
EDUCATION
V,rCh0WKrau&%0% University of Wisconsin-Eau Claire
Bachelor of Business Administration in Accounting and Business Finance
® s s a a s
9
2. Partner., SuDervisorys StaffQUaIlTicationssExperience
ENGAGEMENT MANAGER -JODI L. DOBSON
Jodi Dobson,Manager in the Energy and Utilities Group,has been with
Virchow,Krause&Company,LLP since 1998. She specializes in serving
municipal utilities,joint action agencies,and not-for-profit organizations. Her
experience includes performing financial audits,agreed-upon procedure
reviews,and fraud investigations as well as preparing rate studies,cost of
service studies,rate designs,and financial forecasts.
, x SPECIFIC EXPERIENCE
3 • Manages audits for municipal utilities,joint action agencies,and not-
,:
for-profit organizations.
x'_ _' • Performs agreed-upon procedure reviews of jointly owned facilities
contractual billings for joint action agencies.
• Prepares utility rate studies including cost of service studies and rate
design options.
• Conducts electric unbundling studies for public utilities and utility
districts.
• Helps governmental units interpret and implement Governmental
Jodi L. Dobson, CPA Accounting Standards including GASB No.34.
Manager • Performs agreed-upon procedure reviews of cable franchise fee
agreements and remittances.
lobs n@vir • Analyzes the financial impact of construction projects on utility
jdobson@virchowkrause.com
customer rates,borrowing needs,and operational results.
• Prepares annual operating budgets and long-range financial forecasts
for electric,water,and wastewater utilities.
• Provides support to municipal utilities contesting wholesale rate
My promise to the increases from power providers.
District: • Leads special projects including chart of account separations,specific
rate designs,departmental cost analysis,development of connection
fees and impact fees,operational benchmarking,and basis of
"My entire career has accounting conversions.
been devoted to • Compiles municipal utility financial statements and annual reports to
regulatory agencies.
utilities. commit t� • Performs compliance audits of state funded programs.
use my experiences . Conducts fraud investigations for municipalities and counties.
to help add value to • Provides various types of accounting assistance.
the District. This
would be a great INDUSTRY INVOLVEMENT
• AICPA-American Institute of Certified Public Accountants
opportunity for me to • WICPA-Wisconsin Institute of Certified Public Accountants
be part of this audit • Speaks on internal controls,fraud prevention,budgeting,and other
team.s' industry topics at management conferences.
• Authors'articles on utility regulation and accounting issues published
nationwide.
• Contributing author in the APPA Advanced Accounting Manual.
EDUCATION
Carthage College
VirchowKrau� Bachelor of Business Administration in Accounting and International Business
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Partner, Supervisory
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MAR YAM AM SADEi.7H1'OUR
Maryam Sadeghpour,Senior Accountant in the Energy and Utilities Group,has
been with Virchow,Krause&Company,LLP since 2006. She specializes in
s providing auditing,accounting,and consulting services to utilities. Maryam
also assists with financial and capital forecasts,rate studies,and impact
fee studies.
Y SPECIFIC EXPERIENCE
�`'_ "wr";' , • Provides financial audits of electric,water,and sewer utilities.
""�" • Analyzes and conducts utility rate and impact fee studies.
"' • Compiles municipal utility financial statements and annual reports to
regulatory agencies.
• Provides consulting services to public utilities.
• Provides various accounting services.
Maryam Sadeghpour EDUCATION
Senior Accountant Edgewood College-Madison,WI
Bachelor of Science in Accounting and Business Finance
608.240.2316
msadeghpour@a v€rchokrause.com
My promise to the
District:
"I promise to upheld
my responsibilities as
the District's auditor
to ensure the highest
duality of service„
ViMhO W.,Yjause
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11
r r ! Staff Qualifications Experience
AMANDA M. NEUMAN
Amanda Neuman,Accountant in the Energy and Utilities Group,has been with
Virchow,Krause&Company,LLP since 2007. She specializes in providing
auditing,accounting,and consulting services.She also assists with financial and
capital forecasts,rate studies,and impact fees.
SPECIFIC EXPERIENCE
• Provides auditing and consulting services to mass transit,water,sewer,and
electric utility clients.
• Compiles financial statements for utility clients.
' • Compiles annual reports for the Public Service Commission.
• Analyzes and conducts utility rate studies.
EDUCATION
University of Wisconsin-Whitewater
Amanda M. Neuman Bachelor of Business Administration in Accounting
Accountant
608.240.2529
aneuman@virchowkrause.com
My promise to the
District:
"I promise to work
Lard and respect all
District employees
and try my hardest to
,promote a relatively
painless audit."
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Partner, o Qualifications sExperience
• �` • s Staff'
CPE POLICY
In order to keep current with industry regulations,our firm requires all
professional staff to obtain a minimum of 120 continuing professional education
credits(CPE)every three years with no less than 20 credits in any given year.
All public sector audit staff attend courses in the accounting and auditing areas
dealing with public sector topics.Some of the recent courses attended include:
• Issues under formation of Regional Transmission Organizations
• Retail/Wholesale Electric Cost of Service and Rate Design
• Sarbanes-Oxley Compliance Testing
• Utility Board Governance
• Advanced Utility Accounting
• Financial Statement Analysis
• Utility Benchmarking
• Accounting for Governmental Units Under GASB 34
• Obtaining Value from Your Audit(Virchow Krause as instructors
for the American Public Power Association)
• Current Issues for Water Utilities
• Determining the Feasibility of Offering Broadband
Communications Services in Your Community(Virchow Krause
instructors for American Public Power Association)
• Virchow Krause staff are instructors for American Public Power
Association Utility Education Courses
Some of our clients use Virchow Krause to provide training to their staff.We
have been very active in the utility training area and annually present topics of
interest to our clients.In addition,our company has hosted seminars on utility
topics for over 20 years and currently serves as instructors for American Public
Power Association courses on:
• Utility Governance
• Advanced Utility Accounting
• Obtaining Value from your Audit
• Performing Electric Cost of Service Studies and Designing Electric
Rates
• The Role of the Board and Management in Utility Operations and
Financial Reporting
• Developing an Internal Audit Function
Vi" Ow Krause
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QUALIFICATIONS, CAPABILITIES AND EXPERIENCE
Our Public Sector Practice Group has a long-standing national tradition of
providing quality auditing,accounting and consulting services to public utilities.
We currently provide audit and consulting services to municipal utilities and
joint action electric agencies nationwide.We give presentations at national
American Public Power Association seminars and many state utility associations
regarding industry issues.
Some of our most recent seminars include:
• "Job Costing and Plant Accounting",September,2005 APPA.
• "Governance and Internal Control Models",September,2004
APPA B&F Workshop.
• "Obtaining Value from Your Audit",September,2003 APPA.
• "Implemented Activity-Based Management for Your Utility",
March 2002 at APPA's Winter Institute.
• "GASB No.34 for Utilities",October 2002,at APPA's Fall
Institute.
• "Advanced Public Utility Accounting",October 2002,at
APPA's Fall Institute.
• "Current Issues in Offering Telecommunications Services",
October 2002,full-day seminar at APPA's Community Broadband
Conference.
• "Strategic Issues Facing Public Power Systems Under
Restructuring",June 2000,a half day workshop at the Minnesota
Municipal Utilities Association Annual Conference.
Our experience includes:
• Virchow Krause is the author of the 2003 Edition of the American
Public Power Association's Advanced Utility Accounting
Guidebook and also presents an ongoing class for APPA's Utility
Education Courses series on advanced utility accounting.
• Virchow Krause is the author of the 2003 Edition of the American
Public Power Association's Telecommunications Guidebook used
by public power systems nationwide in developing financial and
technical feasibility studies and business plans to provide
broadband communication services.
• Regularly giving presentations on the national,regional and state
industry level at a variety of financial and management issues
affecting utilities.
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2.
Partner,
i Supervisory Staff Af a Experience
AUDIT TEAM QUALIFICATIONS AND EXPERIENCE
In developing our audit team,we have carefully matched the capabilities of our
personnel to provide the maximum value to the District for this audit.The
individuals comprising our team routinely deal with complex client situations.
They have the knowledge,and professionalism to develop solid
recommendations by bringing to the District the necessary balance of technical
discipline,creativity and common sense.As a team,they will provide you with
highly coordinated and responsive services.
Of particular importance is the specialized knowledge and experience of our
firm and individuals on our project team in a number of areas including:
• Experience in industry topics,including regulatory asset treatment
under FAS 71,pricing of financial instruments under FAS 133, 138,
and 139,recording of future plant removal costs under FAS 143,
preparation of financial statements under GASB 34 and 38 and others.
• Working knowledge of all aspects of utility operations,including
organizational,operational and work order system issues.
• Experience conducting organizational and operational analyses
designed to improve financial system effectiveness and efficiency.
• Experience conducting complex integrated financial system analysis
and implementation reviews.
• Experience conducting financial and compliance audits of electric
utilities and joint action electric agencies.
• Experience developing performance measures and benchmarking.
VirxhowKrau Aft Aft
15
• a 9 ements� --
Electrid
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SIMILAR ENGAGEMENTS WITH PUBLIC POWER ORGANIZATIONS
Below are current references where Virchow Krause has performed similar
engagements.We urge you to contact any of these clients to get their feedback
and impressions regarding our services to them.That these clients return to us
again and again for service attests to their satisfaction.We urge you to look
deeply into client references.Virchow Krause serves many more clients than the
five listed below.
Client: Lincoln Electric System
Year: Since 2005
Partner: Tom Unke/Russell Hissom
Hours: 500
Project Description: Financial Audit
Contact: Keith Brown,CFO
1040 O Street
Lincoln,NE 68508
402.475.4211
Client: Long Island Power Authority
Year: Since 2002
Partner: Russell Hissom
Hours: 10,000
Project Description: Agreed-upon Procedures—Examination of Contract
Compliance in Connection with Joint Ownership
Generation,Transmission and Distribution Contracts
Contact: Mr. Steven Clark,Finance
333 Earle Orington Boulevard,Suite 403
Uniondale,NY 11553
516.719.8637
Client: Michigan Public Power Agency
Year: Since 1998
Partner: Russell Hissom/Tom Unke
Hours: 900
Project Description: Financial Audit,Contract Compliance Operational
Review in Connection with Jointly-Owned
Generation Facilities
Contact: Mr.Dave Naberhuis,Finance Director
809 Centennial Way
Lansing,MI 48917
517.323.8919
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NOW
a. amiar Engagements tiectric Utilities and A133 Audits
Client: Missouri Basin Power Project
Year: 2004—Present
Partner: Russell Hissom
Hours: 380
Project Description: Financial Audit
Contact: Ms.Pat Sebastian
1717 East Interstate Avenue
Bismarck,ND 58503
701.355.5436
Client: Missouri River Energy Services/Western
Minnesota Municipal Power Agency/Missouri
Basin Electric Cooperative Association
Year: 2004—Present
Partner: Tom Unke
Hours: 350
Project Description: Financial Audit
Contact: Mr.Merlin Sawyer
P.O.Box 88920
Sioux Falls,SD 57109-8920
605.338.4042
Client: Indiana Municipal Power Agency
Year: Since 1993
Partner: Tom Unke
Hours: 150
Project Description: Contract Compliance Operational Review in
Connection with Jointly-Owned Generation Facilities
Contact: Mr.Raj Rao
Mr.Chris Rettig,VP-Finance
11610 N.College Avenue
Carmel,IN 46032
317.573.9955
A133 AUDITS
Client: Multiple
Year: Ongoing
Partner: Multiple
Project Description: Virchow Krause performs hundreds of A133 audits
annually and currently conducts an estimated 15
single audits in the State of California.
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' Audit • • • .
The primary purpose of the audit,unless it is otherwise intended,is to express an
opinion on the financial statements of the entities subject to audit. Such an audit
is subject to the inherent risk that errors or irregularities may not be detected. If
conditions are discovered that lead to the belief that material errors,defalcations
or other irregularities may exist,or if any other circumstances are encountered
that require extended services,Virchow Krause will promptly advise the
District's management.
As independent auditors of the District,our principal objective will be to express
an opinion on the fairness of your financial statements.
Our audit will be made in accordance with Generally Accepted Auditing
Standards(GAAS)as promulgated by the American Institute of Certified Public
Accountants(AICPA),the AICPA audit guide,Audits of State and Local
Governmental Units,Government Auditing Standards issued by the U.S.
General Accounting Office and the Single Audit Act of 1984 and OMB Circular
A-133.
The following reports will be prepared and presented at the completion of the
audit:
• A report on the fair presentation of the combined statements of net
assets,combined statements of revenues,expenses and changes in net
assets and cash flows,in conformity with accounting principles
generally accepted in the United States of America.
• A report to management containing suggestions for improvement of
accounting procedures and internal control.
In the reports on internal controls,we will communicate any significant
deficiency found during the audit.A significant deficiency shall be defined as a
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.Significant deficiencies that are also material weaknesses
will be identified as such in the report.Nonreportable conditions discovered will
be reported in a separate letter to management,which shall be referred to in the
reports on internal controls.
Reports will be completed consistent with the time commitments outlined in the
past.
Irregularities and Illegal Acts-We will make an immediate,written report of
all irregularities and illegal acts or indications of illegal acts of which we
become aware of to the Board of Directors.
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4. ftecITIC Audit Approach
SOMA
Reporting to the Board-We will assure ourselves that the board is informed of
each of the following:
• The auditor's responsibility under generally accepted auditing standards
• Significant accounting policies
• Management judgments and accounting estimate
• Audit adjustments
• Disagreements with management in conducting the audit
• Difficulties encountered in performing the audit
SEGMENTATION OF THE ENGAGEMENT
We have identified nine general work segments of the audit.Those segments,
along with the anticipated audit procedures for each segment,are discussed
below:
I.Engagement Planning and Administration
• Prepare client information forms,obtain signed engagement letters,
complete company independence procedures.
• Review of previous audit reports and reports on internal control.
• Prepare memorandum regarding overall operations for permanent file
records.
• Complete staffing and scheduling summary.
• Hold planning conference among engagement partner and in-charge
auditors.
• Hold entrance and progress conferences with client.
• Obtain all documents and information required for permanent file.
• Read minutes of board meetings.
• Review and evaluate internal controls(includes completion of internal
control questionnaires,flowcharts and other documentation and
statistical testing of revenue,expenditure and payroll systems,as
necessary).
• Interview selected District staff and oversight board members in
accordance with the requirements of SAS 99.
• Develop and approve audit programs(modification of existing standard
programs).
• Accumulate all points to be included in management letter,draft letter
and discuss with management.
• Review regulatory reporting requirements and evaluate compliance
with regulatory reporting and standards.
• Review internal contract compliance reports to determine any impact
on audit procedures and District financial reporting.
• Review workpapers for completeness.
• Undergo partner level workpaper reviews and independent reviews.
• Hold exit conference with key District personnel.
• Make presentation to the Board of Directors.
II.Cash Segment
• Review ledger account entries,compare cash account balances.
• Confirm year-end account balances with depositories and
VirchowKrau+ reconciliations to amounts on the financial records.
Cc • Obtain bank reconciliations and substantiate reconciling items.
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50eCITIC A
uditApproach
• Substantiate cash cutoffs in all departments,interbank transfers and
petty cash balances.
III.Investment Segment
• Test investment transactions,test interest earned and trace to receipts
and ledger accounts.Confirm investment balances.
• Test recording of derivative instruments in compliance with current
procurements.
• Test proper recording of other instruments that are marked to market.
• Test account transactions recording unrealized gains and losses.
• Test compliance with funding requirements of bond resolutions.
• Test compliance in use of accounts in repayment of outstanding debt
• Test recording of derivative instruments and related note disclosures.
IV.Revenue Segment
• Compare revenues to prior year actual and current budget.
• Perform validation procedures.
• Confirm all member accounts receivable and power sales.
• Reconcile other revenues to claims and invoices filed.
V. Expense Segment
• Compare expenses to prior years and budgeted amounts.
• Account analysis of significant variations.
• Review vouchers payable listings as of year-end,determine proper
cutoffs and review for unrecorded liabilities.
• Verify vested vacation and sick pay liabilities.
• Verify other employee retirement obligations
• Determine appropriateness of other liability accounts including accrued
payrolls and related withholdings.
• Test proper recording of billings for operating expenses from 3rd party
joint generation facilities.
• Confirm billings from 3rd party joint generation facility operators.
Determine all costs are properly recorded in general ledger.
• Perform test of transaction sample and walkthrough of selected
transactions to determine effectiveness of controls.
• Select sample of employee reimbursements for testing of controls and
appropriateness of reimbursement to test controls in this area.
VI.Deferred Costs
• Obtain details of the various components of deferred assets.
• Test account transactions.
• Test recording of regulatory assets in compliance with FAS 71.
VII.Property Segment
• Obtain capitalization policy for capital assets and infrastructure.
• Obtain summary schedules of capital assets including additions,
retirements and accumulated depreciation.
• Test the District's capital asset additions and retirements by project.
Virxhow • Determine proper recording of capital asset additions and retirements
��� billed by 3rd party facility operators.
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.4 goecifi Awn AP proach
• Perform test counts or obtain 3rd party confirmation of existence of
inventory balances.
• Test capital asset depreciation calculations.
• Test pricing and quantity of inventories.
• Test recording of nuclear fuel.
• Verify FAS 143 asset retirement obligations.
• Test and verify nuclear decommissioning liability.
VIII.Financing Segment
• Verify bond and note balances owed,information on new issues,if any,
trace transactions to general ledger recompute interest paid.
• Determine nature and appropriateness of other equity balances.
• Test compliance with bond ordinances regarding earnings coverage.
• Determine existence of any off-balance sheet liabilities and record or
disclose if appropriate.
XI.Financial Reporting Segment
• Ascertain that all items of audit significance contained in the minutes
have been considered and cross referenced to the working papers.
• Post any adjusting entries and obtain adjusted trial balance.
• Review client prepared financial statements.
• Review management discussion and analysis(MD&A).
• Perform subsequent events review to date of completion of fieldwork.
• Obtain management and attorney representation letters.
• Draft all required reports.
• Review any past adjustments with financial management.
• Verify commitments and contingencies.
AUDIT SCHEDULE
We plan on following the following audit schedule to meet the report delivery
deadline of each year as follows:
Detailed Audit Plan 12/1
Entrance Conference 4/1
Audit Fieldwork 4/1-4/8
Progress Conference Ongoing
Exit Conference 4/8
Draft Reports 4/22
Final Reports 4/29
Presentation to Oversight Board When requested
This timing can be modified to a more mutually agreeable time, if
desired.
VirchowKraulawloft
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4. SpeciTic • Approach
We estimate the time allotments for the audit by segment are as follows:
Total Hours Include:
Supervisory
Partner Manager Staff Staff Other Total
Planning and Interim Work 24 24 6 54
Cash 4 16 12 32 6 70
Revenues 2 24 16 10 6 58
Expenditures 2 16 24 24 6 72
Property 4 24 32 40 6 106
Financing 4 4 12 8 2 30
Financial Reporting 16 16 22 14 8 76
Total U 12A 11$ 151
SAMPLING APPROACH INTERNAL CONTROLS
We plan to use audit sampling throughout many phases of our audit since we
believe it allows us to perform an audit that is more cost beneficial to our clients.
We have identified the following audit sampling tests that will be used on the
District's audit.They include:
• Substantive tests of details of balance sheet accounts.
• Tests of controls.
After we have documented the District's internal control structure,we will make
decisions on the internal control procedures we intend to test.We will set
parameters regarding the expected error rate,audit risk and tolerable error rate in
order to determine the sample size we will generate.We expect to perform these
procedures in the following areas:
• Cash disbursements/expenditures
• Payroll
• Employee reimbursements
We also plan to use audit sampling to pey form substantive tests of certain
balance sheet accounts,including the inventory testing and recorded vouchers
payable.Our firm plans to use the population proportionate to size(PPS)
approach which encompasses the concept of individually significant amounts.
Since we have not yet gained an understanding of the District's internal control
structure and we have not determined the control procedures we will test,we are
not able to provide the exact sample sizes we will draw.However,similar first
year engagement sample sizes range from 50—115 disbursements tested by use
of sampling techniques and a similar amount of payroll transactions.
VirchOwKrause
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i Approach
PAPERLESS AUDIT SOFTWARE
Our audit tool is a web-based comprehensive software product that combines all
financial audit tasks into an electronic paperless format,including work
programs,trial balances,spreadsheets,workpapers,and the financial statements.
This"paperless"technique results in savings of both time and resources.
Because we are able to obtain the majority of our information electronically,the
District's staff will spend less time copying and printing information for the
audit.
LOCATION AND TECHNOLOGY IN PERFORMING AUDITS
Auditing is evolving into one of true industry specialization.Our paperless audit
software product is web-based,which eliminates locational issues in performing
audit engagements and makes having an office local to your facility not as
critical as it might have been in the past.Using such tools and technologies leads
to greater hour efficiencies in auditing,freeing time to ensure that our teams of
auditors has the latest knowledge to help you implement ever-increasing audit
transactional and disclosure standards.Requiring our audit staff to specialize in
your industry allows us to be on the cutting edge of industry issues and how they
impact the District.
ANALYTICAL PROCEDURES
Our analytical procedures are done in two parts—preliminary and final.
Preliminary procedures are performed using the District's trial balance and
budget reporting.In-charge auditors review the current year information and
compare it to the current year's budget and the prior year's actual amounts.This
is done at various levels of control over revenues and expenditures,and for all
balance sheet accounts.The audit manager and staff are looking for variances
between the figures that exceed a predetermined threshold level,both from a
percentage and a dollar amount perspective.
Those accounts that exceed the variance threshold are highlighted for further
investigation.This investigation includes reviewing detail transactions,
vouching a sample of transactions,discussions with management and validation
techniques.
Final analytical review takes place after all audit entries are posted.The in-
charge auditor and partner review the final financial statements,looking for
variances to prior year actual and current year budget. Explanations of those
variances are documented in our file,with the results used to determine the
extent of any additional audit testing or financial statement disclosures.Our
procedures are in full compliance with SAS No.56.
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° • ! • .
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IMPACT ON AUDIT PROCEDURES FOR SARBANES-OXLEY
COMPLIANCE
We have seen an increasing mind-set and movement on the part of Public Power
Utilities to adopt a Sarbanes-Oxley approach to their governance models and
control structure,even though the standard may not apply to these organizations
for some time.We welcome this mindset as a necessary best practice in
conducting business.
As defined by the Institute of Internal Auditors(The IIA),internal auditing"is
an independent, objective assurance and consulting activity designed to add
value and improve an organization's operations.It helps an organization
accomplish its objectives by bringing a systematic, disciplined approach to
evaluate and improve the effectiveness of risk management, control, and
governance processes .
As auditors of the District under the Sarbanes-Oxley rules,Virchow Krause
could not test or opine on any control structure or procedure that it might
recommend that the District adopt.That being said,Virchow Krause has helped
many organizations develop an internal audit function and recommend
procedures to strengthen internal controls.Our approach to review of risk and
internal audit services is rooted in obtaining a deep understanding of our clients'
objectives and strategic plan. Virchow,Krause&Company,LLP has performed
many Sarbox 404 projects for SEC clients.The staff assigned to those projects
included audit staff from all of our business units so that audit staff and
managers can use that knowledge in serving clients in many industries,
including joint action agencies and utilities.
The foundation for our approach to internal audit and controls is the three
categories defined by COSO:operations,financial reporting and
compliance/regulatory.Our view is that internal audit responsibility extends to
100%of an entity's activities.We express our approach in terms of four areas:
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We train our people in this approach and feel having this knowledge makes for
better auditors.The impact on our audit procedures is to place a greater
emphasis on process mapping key financial procedures in the organization and
evaluating the processes to determine if there are weaknesses in controls and the
potential impact those weaknesses may have on the organization.Doing so also
gives us the insight and opportunity to make recommendations to management
on areas where controls should be strengthened.
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Other5. r Information:
ADMINISTRATIVE ITEMS
We request office space capable of accommodating four(4)auditors on-site at
your facility with internet access.
If additional administrative needs or requirements become apparent during the
audit,we will discuss such requirements with you.It is our intent to require
minimal disruption of your staff or physical facilities.
ASSISTANCE FROM THE DISTRICT
Based on the RFP,we understand that the District staff will provide sufficient
hours to assist in preparation for the annual audit.Our audit plan will not require
any additional increasing in-house audit preparation time.Requested assistance
by the District personnel will include:
• Preparation of detailed schedules.
• Electronic delivery of prepared schedules prior to the start of interim
and final fieldwork.
• Pulling and filing of documents.
• Preparation of confirmations and representation letters.
• Assistance with interviews to discuss and document system process
flows.
• Preparation of financial statements.
Virchow Krause employs a paperless audit approach.We feel that this approach
will help to minimize the time and effort of your staff in attending to the audit
process.It is our intent to minimize any disruptions to your staff and normal
day-to-day business practices.
RELATIONSHIP WITH BOND AGENCIES
Virchow Krause regularly works with bond rating agencies.We field questions
from Moodys and Standard&Poors regarding financial statements.Our
reputation with those firms is excellent.We have also worked with major
underwriting firms,such as Morgan Stanley and Bear,Stearns&Co.in
providing comfort letters and stub financial statements for bond issues.Our
track record in providing these services on a timely basis for other clients has
been outstanding.We have assisted public utilities with bond financings of over
$1 billion.
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MANAGEMENT LETTER
We want you to succeed.
Throughout the course of our auditing work,we will emphasize the
identification of opportunities(not necessarily limited to accounting
considerations)for improving controls,improving operations,or reducing costs
which can be brought to your attention on a timely basis for possible
implementation.Although auditing standards do not require such consideration
of administrative controls and business problems,we consider these matters of
major importance to effective client service.
One of the ways in which we bring such suggestions to the attention of the
District is through our management letter. Recommendations for improvements
or general observations will be discussed informally or included in a
management letter to be presented to the Board of Directors for consideration.
Prior to issuing a management letter,our suggestions are discussed with the
operating personnel directly involved with or responsible for the subject area.
Subsequently,higher levels of management are informed about our
recommendations before they are included in the letter.
Comments resulting from our normal review and evaluation of internal controls
will be communicated to you in various formats,including,in certain situations,
a separate letter report summarizing our overall findings and conclusions.
The content of each of our management letters is determined,of course,by the
nature of the particular engagement,but some of the areas typically covered are
as follows:
• New accounting issues
• Financial status
• Internal control improvements
TECHNICAL RESOURCE
Virchow Krause is committed to providing assistance and answers to its clients
throughout the year.We encourage our clients to contact us as issues arise.Your
audit team will work with our wide variety of specialty groups to provide a
quick response.
As a full service acco»nting and consulting firm we have experts in
governmental and commercial accounting,taxation,IT services,benefit and
insurance consulting and other areas.If your audit team does not have the
expertise required to answer your question,we will contact the proper person
and ensure your needs are met.
In addition,we provide newsletters and other timely mailings to our clients
regarding industry developments.Virchow Krause speaks at various industry,
conferences and hosts seminars related to governmental and utility accounting
issues.
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6, Forensic Accounting Expertise
Forensic accounting is the fastest growing area of accounting today.
Unfortunately,this area of accounting focuses on aspects of the industry aimed
at supporting legal matters such as"Litigation Support".
Forensic accounting represents the factual presentation of accounting issues
used in pending litigation.Virchow Krause has an established forensic
accounting team dedicated to providing litigation support and other forensic
accounting services that usually revolve around legal actions.
The District usually would use these services in connection with activities
surrounding inappropriate business behaviors such as fraud and collusion which
are typically the most extensively used services for forensic accountants.
It is our understanding that there is no pending litigation or inappropriate
business behaviors occurring at the District and as such these services are not
required.However,in the event that these services will ever be required,
Virchow Krause has the skill sets,experience and capabilities to serve you.Our
firm has a fully dedicated and specialized litigation support business unit,which
includes multiple Certified Fraud Examiners(CFE)with experience in both the
public utility and governmental industries.
VirchowKrailce
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ScheduI6 of Professional Fees
Truckee Donner Public Utility District
Truckee, CA
Nature of Service to be Provided: Total Investment:
2008 Financial Audit,Management Letter and Financial Statement Preparation $ 55,000
2009 Financial Audit,Management Letter and Financial Statement Preparation $ 58,000
2010 Financial Audit,Management Letter and Financial Statement Preparation $ 60,000
This proposal is an all-inclusive bid.No additional charges for travel will be passed through to Truckee Donner
Public Utility District during the life of this contract.
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