R2020-134 2020-07-27RESOLUTION NO. R2020-134
A Resolution of the City Council of the City of Pearland, Texas, authorizing the
City Manager or his designee to enter into an audit services contract, with BKD
LLP in the amount of $73,000.00.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That engagement letter for audit services, a copy of which is attached hereto
as Exhibit "A" and made a part hereof for all purposes, is hereby authorized and approved.
Section 2. That the City Manager or his designee is hereby authorized to execute and
the City Secretary to attest an engagement letter for audit services.
PASSED, APPROVED and ADOPTED this the 27th day of July, A.D. 2020.
TOM REID
MAYOR
C AL ROAN, TRMC, CMCPk LA
, O
CITY SECRETARY
APPROVED AS TO FORM:
+u uu
DARRIN M. COKER
CITY ATTORNEY
To: Clay Pearson, City Manager
From: Rhonda Daugherty, Assistant Director of Finance
CC: Jon Branson, Deputy City Manager
John McCarter, Interim Director of Finance
Date: July 20, 2020
Re: Audit Services Contract Award
The purpose of this memorandum is provide background and justification for a recommendation
for award of the Annual Audit Services contract for an initial term of one year, with six optional
one-year extensions.
POLICY/GOAL CONSIDERATION
Texas Local Government Code, Title 4, Subtitle A, Chapter 103, Section 103.001 requires that "a
municipality shall have its records and accounts audited annually and shall have an annual
financial statement prepared based on the audit". Section 103.002 requires that the municipality
shall employ "a certified public accountant who is licensed in this state or a public accountant who
holds a permit to practice from the Texas State Board of Public Accountancy to conduct the audit
and to prepare the annual financial statement."
Excerpt from City's Financial Policy Statements regarding selection of auditors:
A. Selection of Auditors
At least every seven years, the City shall request proposals from qualified firms,
including the current auditors if their past performance has been satisfactory. The
City Council shall select an independent firm of certified public accountants to
perform an annual audit of the accounts and records, and render an opinion on the
financial statements of the City.
It is the City's preference to rotate auditor firms every seven years at the maximum,
to ensure that the City's financial statements are reviewed and audited with an
objective, impartial, and unbiased point of view. The rotation of the audit firm will
be based upon the proposals received, the qualifications of the firm, and the firm's
ability to perform a quality audit.
However, if through the proposal and review process, management and the Audit
Committee select the current audit firm, then, it is the City's preference that the
lead audit partner be rotated as well as the lead reviewer after a maximum of seven
years.
contormance with U.S. generally accepted accounting principles, of the governmental and
business -type activities, the discretely presented component units, each major fund, and the
aggregate remaining fund information, which collectively comprise the basic financial statements
of the City. Scope also includes the City's Federal and State Single Audit reports for expenditures
associated with federal and state grant awards, respectively. The scope also includes reporting
on internal controls and compliance with laws, regulations, and the provisions of contracts or grant
agreements, noncompliance with which could have a material effect on the financial statements
or on each major grant program in accordance with Government Auditing Standards and the
Single Audit Act Amendments of 1996.
BID AND AWARD
In keeping with the City's Financial Management Policy Statements, a Request for Qualifications
(RFQ) process was started in May 2020 with qualifications submitted for review by June 2,
2020. Nine audit firms qualified to practice in the State of Texas submitted by the stated
deadline. Six staff members reviewed and scored the qualification submissions. From theses
scores, the top four were interviewed. The interview panel scored the presentations based on
the following criteria:
Qualifications/ Communication
15 pts
Technical Approach/ Accuracy
15 pts
Work History/Team
5 pts
Presentation
15 pts
The average interview scores of the top two firms were separated by 0.17 points with the highest
score attributable to Whitley Penn, LLP and the next attributable to BKD, LLP. The full bid
tabulation has been attached to this memorandum.
The City has engaged the auditing services of Whitley Penn, LLP and it's ancestor firm, Null-
Lairson for 14 of the last 20 years with the most recent engagement ending with the Fiscal Year
2019 audit.
The last Request for Proposals (RFP) was conducted for FY 2013. The firm of Grant Thornton
was selected as the successor audit firm, but "due to delays in the completion timeline and
subsequent cost increase requests on the part of the selected firm", the staff recommended to
not re-engage that firm for the City's fiscal year 2014 audit. The staff reviewed the RFP
submissions received for the FY 2013 audit period and, due to delays in the completion timeline
and subsequent cost increase requests on the part of the selected firm, staff recommended not
to re-engage that firm for the City's fiscal year 2014 audit. The prior proposals were reviewed
and Whitley Penn, LLP was selected.
The City received nine proposals from qualified audit firms in June, 2020. In recent weeks,
Finance staff has reviewed those proposals and evaluations with consideration to the selection
for an alternative audit firm for fiscal year 2020, and presumably beyond, upon the requisite annual
approval of City Council.
Upon review, staff recommended the firm of Whitley Penn, LLP based on the evaluation scores.
The Audit Committee, consisting of Mayor Tom Reid, Councilman Tony Carbone and Councilman
David Little, met on July 20, 2020 to discuss the staff recommendation. The consensus of the
committee was to pursue the award of the contract to BKD, LLP.
Staff will meet with BKD, LLP to go over the scope of work, timeline preference, as well as
programs for the federal and state single audit, as necessary. The firm submitted a proposed
cost of $81,000 for FY2020 and an additional $9,000 if single audits are determined to be
necessary.
Fiscal Year 2020
2021
2022 J
----_--_- __-_- _-___-- ! ----$73,000* _
— -Est $75,385*
Est $77,775*
*Costs based on two major programs for single audit.
Next Steps
Upon award, the City will engage BKD, LLP in planning for the upcoming Fiscal Year 2020 Audit.
The proposed schedule is as follows:
Action
Date
Audit Committee/Administration approval of
audit firm recommendation
July 20, 2020
Council approval of audit firm contract
July 27, 2020
Audit Kickoff meeting with Audit Committee
August 2020
Planning Meeting with staff
August 2020(following Audit Kickoff meeting)
Start of interim field work
August/September 2020
Interim Exit Conference with staff
September 2020
Start of final field work
November/December 2020
CAFR draft review with staff
January 2021
Draft management and opinion letters review
February 2021
Review Council presentation with staff
February 2021
Council Presentation of CAFR
February/March 2021
Bid # 0520-39 RFQ Audit Services - Interview Recap
Belt Harris Pechacek
BKD, LLP
Weaver and Tidwell, LLP
Whitley Penn, LLP
Qualifications/
Communication 15 pts
13.33
14.33
13.83
15.00
Technical Approach/
Accuracy 15 pts
12.25
14.50
12.67
14.17
Work History/Team
5 pts
3.50
4.33
4.50
4.83
Presentation
15 pts
10.00
14.83
11.33
14.17
39.08
48.00
42.33
48.17
Notes:
Training- annual seminar; online
Weaver Analytics - computerized
WP has been the auditor for
resource center; strong bench
analysis of ERP system
14 of the last 20 years. If
depth; several cities the size of
selected, the engagement
Pearland; Did research on the city
partner will have to change;
prior to the presentation - knew
the remaining staff, Dan
about the total amount of CARES
Hernadez and Alex Chaib will
act funding the city had received
remain.
so far; How many CAFR and budget
awards received; can review
systems to ensure proper internal
controls and offer advise on
mitigating duplications; BKD Lease
Did not hear decisiveness, but
Super impressed. They touched on
overviews. No CPE credits. No one
every area that they can provide
else from his firm was available to
and what we want or anticipate
speak to us.
needing.
Robert Belt & Stephanie Harris both
Presentation was very thorough
Presentation was ok but was pretty
Excellent presentation; very
very experienced in government
and well put together; enjoyed the
short, was more of a brief
experienced partners and
audits; all they do is government
incorporation of COP into all the
overview of RFQ; team has been
team members; only firm to
audits, especially in Houston area;
images; both partners have
with Weaver for a while, very
email us the presentation after
no presentation, just Belt talking
extensive experience; have some
experienced with governmental
the meeting
concerns with Shekita & Rosena
accounting
level of experience with BKD and
with governmental accounting
CONTRACT FOR PROFESSIONAL SERVICES
THIS CONTRACT is entered into upon final execution by and between the City of Pearland
("CITY") and BKD LLP ("CONSULTANT").
The CITY engages the CONSULTANT to perform professional services for a project known and
described as Professional Audit Services ("PROJECT" — RFQ # 0520-39).
SECTION I - SERVICES OF THE CONSULTANT
The CONSULTANT shall perform the following professional services to CITY standards and in
accordance with the degree of care and skill that a professional in Texas would exercise under
the same or similar circumstances:
A. The CONSULTANT shall audit the City's financial statements for the fiscal year
ending September 30, 2020, with the option of auditing its financial statements for
each of the six (6) subsequent fiscal years, compiling the Comprehensive Annual
Financial Report (CAFR), and completion of a Single Audit Report, if
expenditures criteria are met. These audits are to be performed in accordance
with generally accepted auditing standards, the standards set forth for financial
audits in the General Accounting Office's (GAO) Government Auditing Standards
(1994), the provisions of the federal Single Audit Act of 1984 (as amended in
1996), U.S. Office of Management and Budget (OMB) Circular A-133, Audits of
States, Local Governments, and Non -Profit Organizations, and Governmental
Accounting Standards Board (GASB) for the CITY. See Exhibit A BKD
proposal and Exhibit B RFQ specification document for additional contract
documents. The Project and Consultants work hereunder shall also be governed
by the Engagement Letter (Exhibit C) between the City and Consultant dated
_August 21, 2020— (the "Engagement Letter"), which is incorporated herein by
reference and made a part of this contract. To the extent there is any
inconsistency between the terms of the contract and the terms of the Engagement
Letter, the Engagement Letter shall prevail.
B. The CONSULTANT acknowledges that the CITY (through its employee
handbook) considers the following to be misconduct that is grounds for
termination of a CITY employee: Any fraud, forgery, misappropriation of funds,
receiving payment for services not performed or for hours not worked,
mishandling or untruthful reporting of money transactions, destruction of assets,
embezzlement, accepting materials of value from vendors, or consultants, and/or
collecting reimbursement of expenses made for the benefit of the CITY. The
CONSULTANT agrees that it will not, directly or indirectly; encourage a CITY
employee to engage in such misconduct.
C. The CONSULTANT recognizes that all work product generated by the
CONSULTANT under the CONTRACT shall be delivered to the CITY as agreed
per specifications and shall become subject to the Open Records Laws of this
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State, subject to any reasonable objections by Consultant that any work
constitutes trade secrets or is otherwise objectionable from being subject to the
Open Records Laws of Texas. City shall provide Consultant with reasonable
notice for Consultant to raise any objections it may have to production of its work
product prior to the City's response to an Open Records request.
D. The CONSULTANT shall procure and maintain for the duration of this
CONTRACT, insurance against claims for injuries to persons, damages to
property, or any errors and omissions relating to the performance of any work by
the CONSULTANT, its agents, employees or subcontractors under this
CONTRACT, as follows:
(1) Workers' Compensation as required by law.
(2) Professional Liability Insurance in an amount not less than $1,000,000 in
the aggregate.
(3) Comprehensive General Liability and Property Damage Insurance with
minimum limits of $1,000,000 for injury or death of any one person,
$1,000,000 for each occurrence, and $1,000,000 for each occurrence of
damage to or destruction of property.
(4) Comprehensive Automobile and Truck Liability Insurance covering
owned, hired, and non -owned vehicles, with minimum limits of
$1,000,000 for injury or death of any one person, $1,000,000 for each
occurrence, and $1,000,000 for property damage.
Prior to commencing services under this CONTRACT, CONSULTANT shall
furnish CITY with Certificates of Insurance, issued by CONSULTANT'S
insurer(s), as evidence that policies required by this CONTACT are in full force
and effect.
E. The CONSULTANT shall indemnify and hold the CITY, its officers, agents, and
employees, harmless from any third -party claim, loss, damage, suit, and liability
of every kind for which CONSULTANT is legally liable, including all expenses
of litigation, court costs, and attorney's fees, for injury to or death of any person,
for damage to any property, but only to the extent caused by the negligent act or
omission of the CONSULTANT, its officers, employees, agents, or
subcontractors under this CONTRACT.
F. All parties intend that the CONSULTANT, in performing services pursuant to this
CONTRACT, shall act as an independent contractor and shall have control of its
own work and the manner in which it is performed. The CONSULTANT is not to
be considered an agent or employee of the CITY.
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SECTION II - PERIOD OF SERVICE and TIMELINESS OF PERFORMANCE
This CONTRACT will be binding upon execution and shall end on July 27, 2021, with six
additional one-year renewal options available.
SECTION III - CONSULTANT'S COMPENSATION
A. Total annual compensation for the services performed are estimated at $73,000
(see cost fee for breakdown).
B. The CITY shall pay the CONSULTANT based upon required deliverables and
supported by detailed invoices submitted by the CONSULTANT.
C. The CITY shall make any required payment to the CONSULTANT within thirty
(30) days of receipt and approval of a detailed invoice. Invoices shall be
submitted on the basis of completion or identified milestones.
SECTION IV - THE CITY'S RESPONSIBILITIES
A. The CITY shall designate a project manager during the term of this CONTRACT.
The project manager has the authority to administer this CONTRACT and shall
monitor compliance with all terms and conditions stated herein. All requests for
information from or a decision by the CITY on any aspect of the work shall be
directed to the project manager.
B. The CITY shall review submittals by the CONSULTANT and provide responses
to questions and rendering of decisions pertaining thereto within one business
day, to minimize delay in the progress of the CONSULTANT'S work. The CITY
will keep the CONSULTANT advised concerning the progress of the CITY'S
review of the work. The CONSULTANT agrees that the CITY'S inspection,
review, acceptance or approval of CONSULTANT'S work shall not relieve
CONSULTANT'S responsibility for errors or omissions of the CONSULTANT or
its sub-consultant(s) or in any way affect the CONSULTANT'S status as an
independent contractor of the CITY.
SECTION V - TERMINATION
A. The CITY, at its sole discretion and in accordance with the implied covenant of
good faith and fair dealing, may terminate this CONTRACT for any reason --
with or without cause -- by delivering written notice to CONSULTANT
personally. Immediately after receiving such written notice, the CONSULTANT
shall discontinue providing the services under this CONTRACT.
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B. If this CONTRACT is terminated, CONSULTANT shall deliver to the CITY all
reports, estimates and any and all other documents or work product generated by
the CONSULTANT under the CONTRACT, entirely or partially completed,
together with all unused materials supplied by the CITY on or before the 15th day
following termination of the CONTRACT, subject to Consultant's rights under
applicable professional standards.
C. In the event of such termination, the CONSULTANT shall be paid for services
performed prior to receipt of the written notice of termination. The CITY shall
make final payment within sixty (60) days after the CONSULTANT has delivered
to the CITY a detailed invoice for services rendered and the documents or work
product generated by the CONSULTANT under the CONTRACT.
D. If the remuneration scheduled under this contract is based upon a fixed fee or
definitely ascertainable sum, the portion of such sum payable shall be
proportionate to the percentage of services completed by the CONSULTANT
based upon the scope of work.
E. In the event this CONTRACT is terminated, the CITY shall have the option of
completing the work, or entering into a CONTRACT with another party for the
completion of the work.
F. If the CITY terminates this CONTRACT for cause and/or if the CONSULTANT
breaches any provision of this CONTRACT, then the CITY shall have all rights
and remedies in law and/or equity against CONSULTANT. Venue for any action
or dispute arising out of or relating to this CONTRACT shall be in Brazoria
County, Texas. The laws of the State of Texas shall govern the terms of this
CONTRACT. The prevailing party in the action shall be entitled to recover its
actual damages with interest, attorney's fees, costs and expenses incurred in
connection with the dispute and/or action. CONSULTANT and CITY desire an
expeditious means to resolve any disputes that may arise between under this
CONTRACT. To accomplish this, the parties agree to mediation as follows: If a
dispute arises out of or relates to this CONTRACT, or the breach thereof, and if
the dispute cannot be settled through negotiation, then the parties agree first to try
in good faith, and before pursuing any legal remedies, to settle the dispute by
mediation of a third party who will be selected by agreement of the parties.
SECTION VI — ENTIRE CONTRACT
This CONTRACT, along with the Engagement Letter, represents the entire agreement between
the CITY and the CONSULTANT and supersedes all prior negotiations, representations, or
contracts, either written or oral. This CONTRACT may be amended only by written instrument
signed by both parties.
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SECTION VII — COVENANT AGAINST CONTINGENT FEES
The CONSULTANT affirms that they have not employed or retained any company or person,
other than a bona fide employee working for the CONSULTANT to solicit or secure this
CONTRACT, and that they have not paid or agreed to pay any company or person, other than a
bona fide employee, any fee, commission, percentage brokerage fee, gift, or any other
consideration, contingent upon or resulting from the award or making of the CONTRACT. For
breach or violation of this clause, the CITY may terminate this CONTRACT without liability
and in its discretion, may deduct from the CONTRACT price or consideration, or otherwise
recover, the full amount of such fee, commission, percentage brokerage fee, gift, or contingent
fee that has been paid.
SECTION VIII - SUCCESSORS AND ASSIGNS
This CONTRACT shall not be assignable except upon the written consent of the parties hereto.
The parties have executed this CONTRACT this 25th _ day of August, 2020.
Digitally signed by John Mccarter
John Mccarter o—Finance,John carter, o=City of Pearland,
ou=Finance,
email=jmccarter@pearlandbx.gov, -US
Date: 2020.08.2515:42:43 -05'00'
ASSISTANT FINANCE DIRECTOR
CITY OF P AU, AN TEXAS
CIT G IRECTOR
CITY F PE LAND, TEXAS
�,&t-�
CONSULTANT
5 of 5
8-25-2020
DATE
3
DATE
August 25, 2020
DATE
EXHIBIT A
—.=,] I if Ir
The Public Sector Expertise You Need
Professional Auditing Services RFQ # 0520-39
City of Pearland, Texas
Submitted by BKD, LLP
Amanda E. Eaves, CPA I Partner
2700 Post Oak Boulevard I Suite 1500 1 Houston, TX 77056
Phone: 713.499.4600
June 2, 2020
TECHNICAL PROPOSAL
BKO
CPAs & Advisors
BKO
CPAs & Advisors
June 2, 2020
Mr. John McCarter
Interim Director of Finance
City of Pearland
3519 Liberty Drive
Pearland. TX 77581
Dear Mr. McCarter:
2700 Post Oak Boulevard, Suite 1500 1 Houston, TX 77056-5829
713.499.4600 1 Fax 713.499.4699 1 bkd.com
Thank you for the opportunity to propose our services to the City of Pearland, Texas (the City). BKD
CPAs & Advisors works with approximately 500 public sector clients nationwide, including approximately
120 municipalities, giving us a depth of expertise regarding reporting and compliance standards for
municipalities. Our Texas team audits over 200 governments, including cities with populations between
100,000 and 150,000 such as the Cities of College Station, Abilene, Midland and Mesquite as well as City
of Bryan, Texas, City of Phoenix. Arizona, Houston -Galveston Area Council, Harris Health System, and
Parkland Health and Hospital System. We look forward to offering a fresh perspective to your audit
needs.
Providing personal attention and frequent communication to our clients is what drives us—and delivering
value beyond the basic service approach is among our top priorities. We believe BKD is the right choice
because, in addition to our public sector expertise and the benefits described throughout our proposal,
BKD offers the following.
► Texas-based advisors with significant Single Audit experience, as well as a strong
understanding of GASB requirements
► Complimentary CPE and updates on GASB, COVID-19 funding, and City related topics and
emerging issues through a variety of online resources
► Significant Uniform Guidance knowledge and best practice solutions gained through our
experiences as the 411 largest provider of Single Audit services
► Ongoing assistance with evaluating how various actions could affect your organization, as well
as updates on changing guidelines and new regulations related to the COVID-19 pandemic
We understand the City is requesting a Financial Statement Audit in Accordance with Government
Auditing Standards and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements. Cost Principles. and Audit Requirements for Federal Awards (the Uniform Guidance) for
the years ending September 20, 2020 through 2026. We commit to perform the work within the specified
timeframe. This proposal is a firm and irrevocable offer for sixty (60) days.
f`) PRAXITY
Mr. John McCarter
Interim Director of Finance
City of Pearland
We believe our proposal will help you select our firm for timely, efficient and objective services delivered
by experienced professionals. For questions or to further discuss this opportunity, please contact us at
713.499.4600 or by email at the addresses provided below.
Sincerely,
Amanda E. Eaves, CPA
Partner
aeaves@bkd.com
Shekita S. Rawls, CPA
Senior Manager
Brawls@bkd.com
Executive Summary ................................................. 1
Solutions for the City .........................................................
3
Why Choose BKD..............................................................
3
RFQResponse......................................................... 9
Independence....................................................................
9
License to Practice in the State of Texas ..........................
9
Firm Qualifications & Experience ....................................
10
Partner, Supervisory & Staff Qualifications &
Experience......................................................................
15
Prior Engagements with the City of Pearland, Texas ......
29
Similar Engagements with Other Government Entities....
29
Specific Audit Approach ..................................................
33
Identification of Anticipated Potential Audit Problems......
45
ReportFormat.................................................................
47
Appendix................................................................
49
Required Forms...............................................................
51
Example List of Standard Schedules Requested ............
57
AICPA Peer Review Letter ..............................................
60
BKD Peer Review Report ................................................
61
BKD Firm Profile..............................................................
62
Facing Risk with Confidence ...........................................
63
BKD PRIDE Values.........................................................
64
BKD Our acceptance of this engagement is subject to completion of our normal client acceptance procedures. upon
acceptance, the actual terms of our engagement will be documented in a separate letter to be signed by you and us.
The information provided in this proposal is intended for informational purposes only and may not be copied, used or
CPAs & AdVWM modified, in whole or in port, without BKD's prior written approval. All information in this proposal is as of MoY 31,
2019, unless otherwise noted.
BKD
Municipalities face an unwavering stream of scrutiny, not only from the public, but
from regulators and granting agencies as well. Demonstrating fiscal transparency
and accountability of public funds can instill trust from your citizens and garner their
support. In addition, receiving experienced insight on accounting standards
compliance can help relieve uncertainty on changing regulations, as well as on how
to manage new funding streams in response to the COVID-19 pandemic. To help
the City of Pearland, Texas (the City) concentrate on serving your rapidly
expanding community, you need advisors who are knowledgeable of federal and
state funding requirements. Look no further than BKD CPAs & Advisors. Our
approximately 500 public sector clients nationwide rely on BKD to provide high-
quality professional services, and we're ready to use our governmental expertise to
help the City efficiently manage community funds while proactively addressing your
continued growth.
You can expect the following from working with BKD:
► Year-round communication from skilled professionals on upcoming
accounting standards, complex transactions and other common
challenges, as well as guidance on implementing GASB's fiduciary
activities, lease and new financial reporting model standards that will likely
be effective during this contract
► A reputable firm with substantial resources dedicated to the public sector
operating environment, including advisors who can offer best practices
and guidance regarding new accounting standard implementation
► Timely services to help you withstand scrutiny from bond investors,
granting agencies and the public
► A planning process that helps avoid last minute items, as well as focuses
on saving time and interruptions to the City's staff
► Significant partner and senior manager involvement throughout the
engagement, which can help you receive value for your investment
► Staff continuity and tailored solutions from auditors who spend the
majority of your time serving governmental entities
► Experience with Government Finance Officers Association's (GFOA)
Certificate of Achievement for Excellence in Financial Reporting Program
(CAFR Program) submission
► Knowledgeable advisors who can provide industry -specific insight as you
navigate the ongoing effects of the COVID-19 pandemic on your
community and operations
There's a difference between an accountant and a trusted advisor. As accountants,
we're ready to complete your requested services per your established deadlines.
That isn't enough, though—we believe there's more we can offer the City. As trusted
advisors, we want to share pertinent industry and regulatory updates that may
directly affect your bottom line throughout the year and recommend solutions for
challenges yet to be seen. This proactive methodology is a hallmark of our
Unmatched Client Service° standards and what the City can and should expect
from us.
Solutions for the City
The City has requested information and a fee quote for the following professional
services:
► Financial Statement Audit in Accordance with Government Auditing
Standards & Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (the Uniform Guidance)
► Assistance with Preparation of the Comprehensive Annual Financial Report
Please see the Specific Audit Approach section beginning on page 19 for a detailed
explanation of our audit service approach.
Why Choose BKD
Delivering Value
Monitoring expenditures and receiving exceptional value for your investments is
important, but informed consumers understand value is about more than just price.
Value from a professional CPA and advisory firm is about the quality of the work and
the merit of the advice. Expect BKD's work to be accurate and insightful. We stand
behind it. Our Public Company Accounting Oversight Board (PCAOB) inspections
and American Institute of CPAs (AICPA) peer reviews demonstrate the firm's record
of excellence.
As evidenced by our inclusion in the INSIDE Public Accounting Best of the Best
Firms list for the last nine years, we also offer long-term consistency, exceptional INSIDE
performance and a national network of support and resources. BKD is large enough PUBtI(WOUNTING
to help the City address a variety of financial issues. At the same time, we pride BESTBEST EST
ourselves on hard work and low overhead, which keep our fees competitive. With FIRMS
our reputation, size, service and experience, you can consider us a good value.
Commitment to Serving the Public Sector
As part of our commitment to remaining at the forefront of the public sector, leaders
across our national governmental practice created the BKD Public Sector Center of
Excellence. This group of professionals meets regularly to discuss important
developments, legislative updates and challenges affecting governmental entities
similar to the City.
In addition, our public sector involvement has enabled us to establish connections
with numerous regulatory and auditing organizations, including:
► AICPA Governmental Audit Quality Center, as a member
► Government Finance Officers Association (GFOA) CPAJ
► Governmental Finance Officers Association of Texas (GFOAT) Governmental Audit
► Governmental Accounting Standards Board (GASB) Quality Center
► Office of Management and Budget (OMB)
3
► U.S. Government Accountability Office
We look forward to communicating best practices and forward-looking strategies to
help the City thoughtfully consider the areas important to fulfilling your fiduciary
responsibilities.
Texas Governmental Accounting Experience
Our significant Texas footprint means the City can be confident in our
understanding of the financial matters specifically facing governmental entities
across the state. BKD's Texas offices in Houston, Dallas, Fort Worth, San Antonio,
and Austin provide services to approximately 220 governmental entities, including
municipalities and their component units.
Educational Resources for Texas Governments
Our commitment to our Texas public sector clients extends beyond the provision of
accounting services—we provide educational programs across the state on an
annual basis. These include hosting roundtable discussions, and other sessions
for the Government Finance Officers Association of Texas (GFOAT).
BKD's Houston office takes further steps to keep clients abreast of industry
changes and best practices through an Annual Governmental Finance Seminar,
which takes place the first week of June each year. Recent years' topics have
included GASB updates, public corruption presented by a FBI special agent,
combating fraud in the public sector and cybersecurity challenges.
Significant Single Audit Experience
According to data compiled by OMB via the Federal Audit Clearinghouse, BKD is
the fourth-largest provider of Single Audits among CPA firms, performing
approximately 495 annually. With approximately one-third of our not-for-profit
and public sector clients receiving federal funding, we are familiar with the
requirements for allowability of both direct and indirect costs, as well as the ability
for the recipient to charge an administrative cost allowance under many federal
programs.
To help streamline the Single Audit process, we use audit programs and checklists
designed specifically for the federal programs we audit. Our firm maintains a
database of audit programs tailored to the grants and other federal programs
commonly found in governmental entities. Our extensive experience providing
compliance testing in accordance with OMB requirements can help us properly
perform and submit the City's Single Audit on time.
Extensive Experience with the CAFR Program
Participating in GFOA's CAFR Program can help enhance the credibility of a city's
financial statements, particularly with rating agencies. This also is key to
increasing constituent and user confidence in the City's fiscal management practices
and overall financial condition. Whether you currently issue a comprehensive annual
financial report (CAFR) in connection with the CAFR Program, or intend to do so in
BKD
4
the future, BKD can assist you. Hundreds of our clients participate in this program
annually, which means we have the practical knowledge and expertise necessary to
guide you through the process. Numerous BKD professionals, including members of
your proposed engagement team, also serve on the GFOA's Special Review
Committee, providing us with firsthand insight into what GFOA reviewers are looking
for when assessing the required reports.
In addition, with the short window for completing annual audits to meet the GFOA's
established deadlines, we understand timely and accurate professional services are
critical in retaining your certificate. A core standard of BKD's Unmatched Client
Service philosophy is Responsive Reliability, which guides our service process from
initial planning to issuing our final report. You can expect our reports and
communication to be timely and in advance of GFOA's deadlines.
A Fresh Look & Smooth Transition
Changing firms can be a daunting task, but it doesn't have to be. A smooth transition
is not only possible—it should be expected. Our BKD Smooth Transition TM process
places emphasis on quickly becoming familiar with your organization and team. We
will develop a tailored transition plan that meets your timing expectations while
offering a fresh look at your financials. The County should carefully consider the
value that can be gained from a new perspective on your internal reporting,
operations, policies and procedures. Bringing in a new set of eyes can provide ideas
and strategies important to your future success. Our team will work with your current
firm to transfer important financial data quickly and securely. As a result, potential
concerns can be identified and resolved in advance.
Public Sector Involvement
To reinforce our commitment to the governmental sector, our advisors routinely
attend conferences focused on industry issues and trends. They also receive CPE to
stay informed of industry regulatory updates and other general accounting issues,
averaging approximately 70 hours of formal training annually. This dedication also
extends to involvement on national industry committees, such as GASB and the
AICPA.
Chris Telli, a partner in our Colorado Springs office and your proposed concurring
reviewer, has been appointed as an advisor to the Government Finance Officers
Association's Committee on Accounting, Auditing, and Financial Reporting (CAAFR).
This committee works closely with GASB, the AICPA and other organizations and
recommends best practices for effective governmental finance operations.
Partner Lindsey Oakley, who currently serves in BKD's National Office accounting
and auditing department, has been appointed to the Executive Committee of the
AICPA Governmental Audit Quality Center.
Amy Shreck, a director in our Omaha office, completed a two-year term as a practice
fellow at GASB's headquarters, where she helped to formulate standards and
assisted with technical inquiries. BKD now draws on Amy's firsthand experience at
GASB to ultimately help clients better understand GASB standards and the thought
process behind those standards.
5
Danny Martinez, Managing Director in our Dallas office, is the GASB (Zone 3
Chair) on the AICPA's Technical Issues Committee. In this role he provides a voice
for his constituents in the standard setting process. He was the project leader on
the Leases Implementation Guide and Postponement of GASB Pronouncement
projects.
BKD LeaseVision: Assistance with GASB 87
Implementation
GASB 87 is a significant consideration for many entities in the public sector. While
this new rule is intended to provide clarity for users of financial statements, it brings
a host of considerations for both lessors and lessees. BKD LeaseVision can help.
Through our work with hundreds of public sector entities nationwide, BKD has
gained significant experience helping our clients implement complex GASB
standards, including GASB 87. Our approach to assisting clients with this standard
includes the following:
► Creating a detailed implementation roadmap to provide a step-by-step
process to follow with relevant guidance along the way
■ Beyond the nuts and bolts of the necessary lease calculations, this
roadmap can help address issues such as system requirements, changes
to internal controls, required note disclosures and communications to
external users
► Using an Excel -based tool to assist with contract analyses, lessor/lessee
calculations and amortization schedules
► Using artificial intelligence (AI) -based tools to extract key lease terms and
help facilitate a more efficient analysis of hundreds of contracts,
potentially capturing important clauses that could be missed by relying
only on manual review
BKD also stands ready to provide a fourth step in our solution, if needed. If there is
any concern about whether all contracts for which GASB 87 is applicable have
been identified, we can employ our extensive data mining resources and
proprietary tools to search your financial activity for potential leases. We would be
happy to discuss our tools with you in more depth at your convenience.
Thought Leadership
BKD advisors are serious about reinforcing their positions as thought leaders in the
industries they serve. To help keep you informed about emerging issues in your
industry, as well as changes in regulations and accounting and tax methods, we
provide BKD Thoughtware"webinars, seminars, tailored training sessions,
podcasts and articles. Many of these are eligible for continuing professional
education (CPE) credit. Recent topics include:
► 18 -Month Delay for GASB Leases; One Year for All Other Statements
► GASB 87: Breaking Down Implementation for Municipalities
BKD
0
► GASB Rethinking Scope of Fiduciary Rules
► What's the Discount Rate for Government Leases?
► GASB Issues Technical Corrections
► OMB Provides Relief on Single Audit Due Dates
We encourage you to view these and a wide array of other resources available on
bkd.com.
Your BKD COVID-19 Resource Center
As uncertainty persists around the COVID-19 pandemic, BKD is committed to staying
on the forefront of industry -specific challenges affecting municipalities similar to the
City. In light of rapid, unprecedented change, we have developed a COVID-19
resource center to help our clients and friends remain informed of important
developments as we also evaluate potential ways to mitigate the financial effects of
the pandemic. We'll keep you up to date with relevant news, changing guidelines,
new regulations and other pertinent information. Alerts/topics include:
► Municipal Liquidity Facility Application Now Available
► Pricing & Disclosure Details Released on $500 Billion Municipal Liquidity
Facility
► Who CARES: The Importance of Transparency & Oversight of Federal
Relief Funds
► CARES Act Relief for State, Local & Tribal Governments
► Clearing the Air: Quick Updates on Public Sector COVID-19 Changes
For an expanding range of alerts, topics and podcasts that may be relevant to you,
please visit bkd.com/covid-19 or scan the QR code above.
10
.A-1
Unmatched Client Service
You want trusted advisors who will deliver exceptional client service, focus on your
needs and take the time to address your unique challenges. BKD understands.
We take our commitment so seriously, we penned five standards of Unmatched
Client Service and supporting guidelines in The BKD Experience: Unmatched
Client Service, a book that articulates the firm's philosophy and sets expectations
for serving clients. Our five standards are:
Integrity First
We work hard to do what is right for you. You can rely on us to tell you what you
need to hear.
True Expertise
From BKD, you can expect trained, capable staff and a high level of supervision by
partners and experienced personnel.
Professional Demeanor
You can depend on prepared and attentive advisors to help meet your needs and
provide new ideas.
Responsive Reliability
Accurate and thorough work combined with timely delivery is what you require. At
BKD, we do not want it any other way.
Principled Innovation
We want you to succeed. For the City, that means looking for new ideas to
streamline a process, better document work, train your staff and improve your
effectiveness.
BKD
BKD
For your convenience, we have structured our proposal according to the requirements in your RFQ. We believe
our proposal will demonstrate our qualifications to serve the City.
INFORMATION CONTAINED IN BKD'S RFQ RESPONSE, WHICH IT ASSERTS AS CONFIDENTIAL, IS
EITHER BUSINESS AND/OR PROPRIETARY TRADE SECRET INFORMATION NOT SUBJECT TO
DISCLOSURE AS SET FORTH IN THE TEXAS PUBLIC INFORMATION ACT. SUCH CONFIDENTIAL
INFORMATION HAS INDEPENDENT ECONOMIC VALUE TO BKD, IS NOT REASONABLY ASCERTAINABLE
BY THIRD PARTIES AND IS THE SUBJECT OF REASONABLE EFFORTS BY BKD TO MAINTAIN ITS
SECRECY AND/OR CONFIDENTIALITY. SUCH INFORMATION IN THIS PROPOSAL SHALL BE
DESIGNATED WITH AN ASTERISK (`).
Independence
The firm should provide an affirmative statement that it is independent of the CITY OF PEARLAND, TEXAS as
defined by the Generally Accepted Auditing Standards and the U.S. General Accounting Office's Government
Auditing Standards (1994). The firm also should provide an affirmative statement that it is independent of all of
the City's component units as defined by those same standards.
BKD is independent with respect to the City and the City's component units as defined by the Code of
Professional Conduct of the AICPA and the United States Government Accountability Office's Government
Auditing Standards. We are not aware of any relationship that would impair our independence.
The firm should also list and describe the firm's professional relationships involving the City or any of its
component units for the past five (5) years, together with a statement explaining why such relationships do not
constitute a conflict of interest relative to performing the proposed audit.
BKD has had no professional relationships involving the City or any of its component units in the previous five
years.
In addition, the firm shall give the City written notice of any professional relationships entered into with the City or
its component units during the period of this agreement.
We will provide written notice to the City upon entering any professional relationship with the City's component
units during the requested period of services.
License to Practice in the State of Texas
An affirmative statement should be included that the firm and all assigned key professional staff are properly
licensed to practice in the State of Texas.
BKD is properly licensed to practice public accounting in the state of Texas. All key professionals who would be
assigned to your engagement are properly registered/licensed to practice in the state of Texas or able to practice
in the state due to mobility laws, without the requirement to obtain an individual Texas license.
0
Firm Qualifications & Experience
State the size of the firm, the size of the firm's governmental audit staff, the location
of the office from which the work on this engagement is to be performed and the
number and nature of the professional staff to be employed in this engagement on
a full-time basis and the number and nature of the staff to be so employed on a
part-time basis.
Firm Size
BKD is one of the largest CPA and advisory firms in the United States. We have
40 offices located in 18 states. Our approximately 2,900 CPAs, advisors and
dedicated staff serve clients in all 50 states and clients with operations in more
than 40 countries.
Governmental Audit Staff Size
BKD has approximately 130 professionals who spend more than 50 percent of their
billable hours providing audit services to governmental entities.
Location
The City's requested services will be primarily provided by our Houston office.
BKD CPAs & Advisors
2700 Post Oak Boulevard I Suite 1500
Houston, TX 77056
BKD
SII
BKD
Number & Nature of Staff
We anticipate providing one partner, one senior manager, one senior associate,
and two associates on a full-time basis and one partner (concurring reviewer) on a
part-time basis to complete the City's audit.
If the proposer is a joint venture or consortium, the qualifications of each firm
comprising the joint venture or consortium should be separately identified and the
firm that is to serve as the principal auditor should be noted, if applicable.
BKD is not a joint venture or consortium.
The firm is also required to submit a copy of the report on its most recent external
quality control review, with a statement whether that quality control review
included a review of specific government engagements.
BKD is committed to providing quality audit services to our clients. We submit our
work to external reviewers who challenge our approach and findings. We are
proud of the findings from these reviews, which indicate our process works. Our
report contained a rating of "Pass," which is the best peer review rating available
under the current peer review standards. A copy of our most recent AICPA peer
review report is included in the Appendix.
Our peer review included inspection of engagements performed under Government
Auditing Standards.
The firm shall also provide information on the results of any federal or state desk
reviews or field reviews of its audits during the past three (3) years.
From time to time, selected BKD audit engagements are subject to desk review by
federal or other regulators. All such reviews during the past three years have
shown our work to be generally satisfactory, and no disciplinary or other
administrative proceedings have resulted from those reviews.
In addition, the firm shall provide information on the circumstances and status of
any disciplinary action taken or pending against the firm or its staff during the past
three (3) years with state regulatory bodies or professional organizations.
There hasn't been any disciplinary action taken or pending against BKD during the
past three years with state regulatory bodies or professional organizations.
11
CIO
Describe other areas of expertise within the firm that would be available to the City.
In addition to your BKD engagement team, the City can have access to a firmwide network of public sector
resources, including:
► Auditors and internal auditors
► Single Audit professionals
► Tax advisors
► Internal control and risk assessment advisors
► Employee benefit plan audit professionals
► Form 990 and alternative investment tax specialists
► Human resources and fringe benefit advisors
► Finance advisors
► Litigation support professionals
► Forensic advisors
► Strategic planners
► IT professionals
Include the firm's ability to provide technical support throughout the year, including assistance to the City in
interpreting and implementing new accounting standards and regulations as well as determining their impact on
the City.
Year -Round Technical Support
We respond to questions quickly and do so without hidden fees. We do not bill for responses to your day-to-day
questions that require no significant investment of research, time or other costs. Providing a high level of value
for the fees you pay is an integral part of our basic engagement philosophy. If an issue is going to take more than
one hour to research, we will inform you in advance of the estimated hours and fees it will require.
Assistance on New Standards
BKD has developed specific training to assist our clients in adopting new standards. BKD National Public Sector
Group comprises professionals who are active in the governmental industry, so they are able to provide the City
with timely and proactive communication regarding new pronouncements or reforms specific to governmental
entities through our Thoughtware. In addition, when needed, our quality control personnel within the National
Office are available for consultation for certain high-risk or technically complex matters.
BKD's governmental sector professionals have developed strong relationships with the individuals at GASB,
GFOA, state regulatory authorities and various federal funding sources and agencies.
Over the years, BKD partners have served on the Emerging Issues Task Force (EITF), the Accounting Standards
Executive Committee (AcSEC) and the Governmental Technical Standards Committee of the Professional Ethics
Division of the AICPA.
iv
-, i
As part of our commitment to providing year-round solutions for our clients, we frequently provide technical
assistance on interpretations of new and existing pronouncements that may change financial disclosures or affect
financial statements. The audit communication letter provided at the end of each audit routinely includes a
section on applicable new accounting standards. It is our practice to keep our clients up to date on new
accounting and auditing standards.
Also, include any opportunities through your firm available to the City for training or continuing professional
education credits on current issues or governmental auditing and accounting in general.
BKD is serious about accounting thought leadership. We continually look for opportunities to educate others and
share our expertise. For example, we offer complimentary webinars and events, which may be eligible for CPE,
for clients and friends of the firm. Attendees can benefit from our deep industry knowledge and real-world
examples that can help their organizations thrive. Information is communicated in a concise. straightforward
manner by industry -trained professionals to keep you informed of ever-changing regulations. In addition, we may
offer clients tailored training, customized to your specific area of interest. This custom training also may qualify
for CPE upon course approval. To learn more, please visit bkd.com/webinars or discuss a customized training
program for your organization with your BKD advisor.
BKD. LLP is registered with the National Association of State Boards of Accountancy
AiM
(NASBA) as a sponsor of continuing professional education on the National Registry of '
CPE Sponsors. State boards of accountancy have final authority on the acceptance of
individual courses for CPE credit. Complaints regarding registered sponsors may be CPE
submitted to the National Registry of CPE Sponsors through its website:
www.nasbaregistry.org. SPONSORS
State your firm's position on responding to client inquiries – the average turnaround time to respond to questions
or requests.
A successful audit is more than simply an evaluation of your accounting records: it requires frequent coordination
between your key staff and your audit team. BKD's professional standards set the expectation that we respond to
your questions within one business day, and communicate clearly at each step of the process to help limit
duplicative requests for information. In addition, our firm culture emphasizes the importance of proactive
communication. You can expect your engagement professionals to offer ideas, updates and guidance throughout
the year—not just during the active service process. We believe being a trusted advisor includes being prepared
to serve as a sounding board to help clients evaluate how various actions could affect their operations, so they
can execute decisions efficiently and with confidence.
13
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BKD
Partner, Supervisory & Staff Qualifications & Experience
Identify the principal supervisory and management staff, including engagement partners, managers, other
supervisors and specialists, who would be assigned to the engagement. Indicate whether each such person is
registered or licensed to practice as a certified public accountant in the State of Texas. Provide information on the
government auditing experience of each person, including information on relevant continuing professional
education for the past three (3) years and membership in professional organizations relevant to the performance of
this audit.
Provide as much information as possible, including resumes, regarding the number, qualifications, experience, and
training, including relevant continuing professional education, of the specific staff to be assigned to this
engagement. Indicate how the quality of staff over the term of the agreement will be assured.
The most critical factor in providing high-quality service is choosing your engagement team. We take team
selection seriously and have the appropriate team of advisors to meet your needs. As previously mentioned, all
key professionals who would be assigned to your engagement are properly registered/licensed to practice in the
state of Texas or able to practice in the state due to mobility laws, without the requirement to obtain an individual
Texas license.
Engagement Team Experience
Amanda E. Eaves, CPA
Partner
Engagement Role: Lead Engagement Partner
Professional Experience
► Member of BKD National Public Sector Group
► Office Industry Leader — Not -for -Profit, Government and Higher Education
► 20+ years of experience providing audit, consulting and accounting services to Texas
governments, including municipalities and their component units that receive federal and state funding
► Leads BKD's audit team on several public sector clients including City of College Station, City of Bryan,
Bryan Texas Utilities, City of Tomball, and Houston -Galveston Area Council"
► Prior to joining BKD, she spent a year and a half as manager of financial services for a Texas state
agency, where she was responsible for managing investments and compliance with the Texas Public
Funds Investment Act, debt post -issuance compliance, conduit debt obligations, GAAP accounting and
financial reporting, preparation of the comprehensive annual financial report (CAFR) and financial
reporting to the Texas Commission on Environmental Quality
► Serves on the BKD Public Sector Center of Excellence, an internal committee of leaders from across the
firm who deliberate a variety of issues important to governments
► Serves on internal inspection teams
► Previously served as learning and development director for BKD's Houston office, responsible for
establishing, communicating and monitoring continuing education for the Houston office personnel
► Has served on the Special Review Committee of the Government Finance Officers Association (GFOA)
of the United States and Canada, where she reviews submitted CAFRs for GFOA compliance
Professional & Community Involvement
► Member, American Institute of CPAs
15
BKD
► Member, Texas Society of CPAs
► Member, Government Finance Officers Association
► Member, Government Finance Officers Association of Texas
► Board Member, Greater Houston Women's Chamber of Commerce
No. Chair, Greater Houston Women's Chamber of Commerce Bay Area Chapter
Education & Certifications
► Licensed CPA, Texas
► B.B.A. degree in accounting, Lamar University, Beaumont, Texas
► AICPA Advanced Single Audit Certificate, demonstrating expertise in performing single audits at an
advanced level as outlined by in the AICPA Competency Framework: Governmental Accounting.
Continuing Professional Education
Date
CPE Course Completed
Hours
3/9/2020
Proposals, Client Acceptance & Engagement Letters (contracts) — Changing BKD's
1
Process (Self -Study)
3/26/2020
Tax Considerations Surrounding COVID-19 (EW -1900)
1
4/3/2020
BKD COVID-19 Weekly Webinar Series — SBA Loans, Payroll Tax Credits & General
1
Business Planning Considerations (EW -1903)
4/7/2020
Higher Education & the CARES Act (EW -1911)
1
4/14/2020
Facing the Crisis: How Nonprofits Can Respond to COVID-19 (EW -1917)
1.5
4/14/2020
(Spring Forensics Institute Webinar 1) Reducing the Impact of COVID-19: An
1
Overview of Business Interruption Claims & Disaster Assistance Loans (EW -1894)
4/23/2020
En Route to Financial Health? Three Business Drivers to Consider (EW -1874)
1.5
4/30/2020
Clearing the Air: Quick Updates on Public Sector COVID-19 Changes (EW -1930)
1
5/5/2020
2020 Employee Benefit Plan Annual Update (IW -1922)
3
2/12/2019
Accounting for Endowments: What You Need to Know (EW -1387)
1.5
3/5/2019
Higher Education R3 Summit: Risks. Regulations. Reputation. (EL -1398)
4
4/23/2019
GASB Update Training (IL -1355)
3.5
5/17/2019
The 2018 Yellow Book: What Changes Do You Need to Know About? (IW1517)
1
5/17/2019
Student Financial Assistance Basics (IW -1061)
2
5/17/2019
The 2018 Yellow Book: What Changes Do You Need to Know About? (Self -Study)
1
5/17/2019
Materiality Pilot Training — Phase 2 (IW -1541)
1
16
BKD
Date
CPE Course Completed
Hours
6/4/2019
2019 BKD Government Seminar Agenda (EL -1500)
7
6/5/2019
IT Security Awareness — Social Engineering
0
6/5/2019
IT Security Awareness — Mobile Device Security
0
6/5/2019
IT Security Awareness — Browser & Internet Security
0
6/6/2019
Single Audit Basics (IW -1054)
3
6/21/2019
First Southern Bank — A Case Study in Behavioral Ethics (IW -1566)
1
6/21/2019
2019 Single Audit Update (IW -1569)
1.5
6/21/2019
BKD STI: How to Capitalize on Conference & Networking Event Participation (IL-
1
1598)
7/9/2019
Not -for -Profit & Government — Tuesday — Track 4 (LC19)
4
7/9/2019
General Session (LC19)
3
7/10/2019
Not -for -Profit & Government — Wednesday — Track 2 (LC19)
1.5
7/24/2019
Implementing GASB 87: What You Need to Know (EW -1560)
1
8/2/2019
Advanced Topics in Single Audit
6.5
9/26/2019
2019 Fall Tax -Exempt Organization Forum (EL -1620)
2
11/1/2019
2019 A&A Annual Update (IL -1687)
3.5
11/15/2019
Effective Delegation: How Leaders Help Others Grow
1
4/30/2018
IT Security Awareness — Your Role in Protecting Our Clients, the Firm & Yourself
0
5/1/2018
Understanding & Implementing Revenue Recognition: Part 2 (EW -1030)
1.5
5/17/2018
2018 Spring Tax -Exempt Organization Forum (EL -1022)
2
5/25/2018
Student Financial Assistance Basics (IW -1061)
3
6/12/2018
Single Audit Basics (IW -1054)
3
8/17/2018
ASU 2018-08: Clarifying the Scope and the Accounting Guidance for Contributions
1
Received and Contributions Made (IW -1173)
8/17/2018
BKD STI: The Five Skill Sets of the Modern Business Developer (IL -1174)
1
9/20/2018
Fall Tax -Exempt Organization Forum (EL -1200)
2
17
BK1'
Date
CPE Course Completed
Hours
9/28/2018
Personal & Professional Ethics for Texas CPAs
4
10/8/2018
New Leases Standard Training (IL -1185)
5
10/26/2018
GFOAT Fall Conference
7.5
11/9/2018
2018 A&A Annual Update
4
11/13/2018
SKYx
11
11/16/2018
BKD STI: Executive Presence: Hard to Describe But You Know It When You See It
1
(IL -1346)
11/16/2018
Ethics & Fraud Considerations (IW -1347)
1
12/10/2018
2018 Annual AICPA EBP Conference Update (Self -Study)
1
12/10/2018
2018 Employee Benefit Plan Annual Update (Self -Study)
2
otal 1 112
Kevin Kemp, CPA
Partner
Engagement Role: Concurring Reviewer
LProfessional
Experience
► Regional industry leader for BKD National Public Sector Group
No -25+ years of experience providing audit and management consulting services to a client
fbase that includes municipalities and their component units, counties, utilities, state agencies
and numerous service -related entities receiving government assistance
► Helps clients obtain tax-exempt financing, analyze expansion opportunities and improve internal controls
► Has served as primary contact for numerous clients, provided review services for Single Audit
engagements and maintained contacts with regulatory agencies
► Has recruitment and training responsibilities
Professional & Community Involvement
► Member, American Institute of CPAs
► Member, Texas Society of CPAs
► Associate Member, Government Finance Officers Association
► Associate Member, Government Finance Officers Association of Texas
► Member, Government Finance Officers Association Special Review Committee
► Board Member, Junior Achievement of Dallas
► Regional Industry Leader — Not -for -Profit, Government and Higher Education
18
BKQ
Education & Certifications
► Licensed CPA, Arkansas and Texas
► B.B.A. degree in accounting, University of Central Arkansas, Conway
Continuing Professional Education
Date
CPE Course Completed
Hours
1/12/2019
IT Security Awareness - Mobile Device Security
0
2/25/2019
Higher Education R3 Summit: Risks. Regulations. Reputation. (EL -1401)
4
3/8/2019
Ethics & Fraud Considerations (Self -Study)
1
4/23/2019
GASB Update Training (IL -1355)
5
5/17/2019
Materiality Pilot Training - Phase 2 (IW -1541)
1
5/17/2019
The 2018 Yellow Book: What Changes Do You Need to Know About? (IW -1517)
1
6/13/2019
Dallas Public Sector Seminar (EL -1511)
4
6/21/2019
BKD STI: How to Capitalize on Conference & Networking Event Participation (IL-
1
1598)
6/21/2019
2019 Single Audit Update (IW -1569)
1.5
6/21/2019
First Southern Bank - A Case Study in Behavioral Ethics (IW -1566)
1
7/9/2019
General Session (LC19)
3
7/9/2019
Not -for -Profit & Government - Tuesday - Track 1 (LC19)
4
7/10/2019
Annual Partner/Managing Director Business Meeting (LC19)
3
7/10/2019
Not -for -Profit & Government - Wednesday - Track 2 (LC19)
3
7/28/2019
AICPA Peer Review Industry Update: Governmental - Governmental Auditing
3
Standards
10/18/2019
GASB 84 - Fiduciary Activities Update (IW -1717)
1
11/1/2019
2019 A&A Annual Update (IL -1687)
5.5
11/22/2019
Proposals, Client Acceptance and Engagement Letters (contracts) - Changing BKD's
1
Process (IW -1767)
12/13/2019
TeamMate Analytics Overview, Sampling & Journal Entry Testing (IW -1808)
1
1/5/2018
CAQ Fraud Case Study - Kendallville Bank
2.5
1/26/2018
SKY Professional Development Series: The Power of Intentionality: Elevating Your
2
Impact in Your Firm & in Your Career (IL -856)
19
BKD
Date
CPE Course Completed
Hours
2/28/2018
Ethical Challenges and Risk Management Opportunities (Self -Study)
1
3/16/2018
Risk Assessment Series - Planning Meetings (Self -Study)
1
4/29/2018
IT Security Awareness - Your Role in Protecting Our Clients, the Firm & Yourself
0
6/22/2018
BKD STI: Closing: Why Do We Make It So Complicated? (IL -1125)
1
7/1/2018
Personal and Professional Ethics for Texas CPAs (Video)
4
7/12/2018
Not -for -Profit & Government (LC18)
7.5
7/13/2018
General Session (LC18)
4
7/13/2018
Annual Partner/Managing Director Business Meeting (LC18)
3
7/26/2018
IT Security Awareness - Social Engineering
0
8/17/2018
BKD STI: The Five Skill Sets of the Modern Business Developer (IL -1174)
1
8/24/2018
Summer 2018 Governmental Seminar - Little Rock (EL -1116)
3
9/3/2018
Ethics & Risk Management: The Appropriate Use of Emails, Texts and Emojis (Self-
1
Study)
9/19/2018
Charitable Giving Strategies After Tax Reform (EW -1192)
1
10/5/2018
New Leases Standard Training (IL -1185)
5
10/26/2018
New Accounting & Auditing Standards Training (IW -1259)
3
10/26/2018
BKD STI: Building Social Capital to Elevate Relationships & Results (IL -1306)
1
11/2/2018
2018 A&A Annual Update
3.5
11/28/2018
IT Security Awareness - Browser & Internet Security
0
12/25/2018
Arkansas Board Ethics
1
Dtal 89.5
20
BKD
Shekita S. Rawls, CPA
Senior Manager
Engagement Role: Audit Manager
Professional Experience
► 10+ years of experience providing audit, consulting and accounting services to clients in
a variety of industries.
► Emphasis is on not-for-profit and governmental organizations, including higher education
institutions, municipalities, foundations and membership and service organizations.
► Performs audits in accordance with Government Auditing Standards issued by the Comptroller General
of the United States and audits of organizations that receive federal and state funding and require audits
in accordance with the Office of Management and Budget Compliance Supplement and Texas Uniform
Grant Management Standards, as well as agreed-upon procedures in accordance with grantor
requirements.
► Assists clients with preparing financial statements and reports to meet financial reporting and other
regulatory disclosure requirements
► Advises clients on future accounting pronouncements and assists with new standard implementation
Professional & Community Involvement
► Member, American Institute of CPAs
► Member, Texas Society of CPAs
► Member, Government Finance Officers Association
► Member, Government Finance Officers Association of Texas.
► Serves as the Houston office Champion for BKD's SKY initiative, a collaborative program that fosters a
culture that recognizes and supports maximizing the potential of all.
Education & Certifications
► Licensed CPA, Texas
► B.S. degree in accounting and an M.Acc. degree, University of North Texas, Denton Education &
Certifications
Continuing Professional Education (since joining BKD in November of 2019)
Date CPE Course Completed Hours
4/7/2020 Higher Education & the CARES Act (EW -1911) 1
4/13/2020 Facing the Crisis: How Nonprofits Can Respond to COVID-19 (EW -1917) 1.5
4/15/2020 Basics of EBP Audits — Course 1: Intro & Overview (Key Terms, Audit 1
Requirements) & Loans
4/15/2020 Basics of EBP Audits — Course 2: Investments 1
21
.►I
Date
CPE Course Completed
Hours
4/17/2020
Basics of EBP Audits — Course 4: Contributions & Distributions
1
4/17/2020
Basics of EBP Audits — Course 3: Participant Data and Eligibility Testing, Revenues
1
& Expenses
4/18/2020
Basics of EBP Audits — Course 5: Compliance Issues & FS Overview
1
4/19/2020
2019 Annual AICPA Employee Benefit Plan Conference Update (Self -Study)
1
4/20/2020
ESOP Presentation & Disclosure (Self -Study)
1
4/21/2020
2019 Employee Benefit Plan Annual Update (Self -Study)
2.5
4/29/2020
Clearing the Air: Quick Updates on Public Sector COVID-19 Changes (EW -1930)
1
5/5/2020
2020 Employee Benefit Plan Annual Update (IW -1922)
3
11/8/2019
2019 A&A Annual Update (IL -1687)
5
11/22/2019
Proposals, Client Acceptance & Engagement Letters (contracts) — Changing BKD's
1
Process (IW -1767)
11/22/2019
BKD STI: Understanding Client Needs (IL -1768)
1
12/11/2019
BKD Culture — Unmatched Client Service°
1.5
12/11/2019
keynet Training (Self -Study)
1.5
12/13/2019
Independence—Historical Insights & Today's Rules
3
12/13/2019
BKD STI: Leveraging Crucial Conversation to Enhance Client Relationships (IL-
1
1818)
12/13/2019
TeamMate Analytics Overview, Sampling & Journal Entry Testing (IW -1808)
1
12/13/2019
SKY Professional Development Series: 50 Ways to Fight Bias (IL -1746)
2.5
Dtal I 33.5
22
BKD
Rosena D. Startzman, CPA
Senior Associate
Engagement Role: Audit In -Charge
Professional Experience
► Provides audit and attestation services to companies of varying size, structure and
operation with a focus on BKD's public sector clients and their component units, including
municipalities and public power entities.
► Her experience includes Single Audits, and implementation of GASB accounting standards and
governmental auditing standards.
► She serves as a data champion for the BKD Houston office, providing guidance on data analytics, audit
efficiencies and training programs.
► Assists clients with preparing financial statements and reports to meet financial reporting and other
regulatory disclosure requirements
► Advises clients on future accounting pronouncements and assists with new standard implementation
Professional & Community Involvement
► Member. American Institute of CPAs.
Education & Certifications
► Licensed CPA, Texas and Nebraska
► B.B.A. degrees in accounting and finance, College of Business Administration at the University of
Nebraska—Lincoln,
► Graduate of the Master of Professional Accountancy program at the University of Nebraska—Lincoln,
receiving the Federation of Schools of Accountancy award in recognition of superior achievement in
post -baccalaureate accounting education.
Continuing Professional Education
Date CPE Course Completed Hours
1/11/2020 2020 Annual SEC & PCAOB Update (IW -1811) 2.5
4/30/2020 Clearing the Air: Quick Updates on Public Sector COVID-19 Changes (EW -1930) 1
1/2/2019 The 7 Habits of Highly Effective People: Habits 1-3 1
1/6/2019 The 7 Habits of Highly Effective People: Habits 4-7 1
4/27/2019 Business Development for BKD Associates 0.5
4/27/2019 Business Writing Skills 1
5/17/2019 The 2018 Yellow Book: What Changes Do You Need to Know About? (IW -1517) 1
23
Date CPE Course Completed
5/17/2019 2019 Employee Benefit Plan Annual Update (V-1450)
6/21/2019 2019 Single Audit Update (IW -1569)
6/21/2019 First Southern Bank —A Case Study in Behavioral Ethics (IW -1566)
6/26/2019 2019 Audit Level 2
8/16/2019 Personal & Professional Ethics for Texas CPAs
9/23/2019 keynet Training (Self -Study)
11/8/2019 2019 A&A Annual Update (IL -1687)
11/22/2019 Proposals, Client Acceptance & Engagement Letters (contracts) — Changing BKD's
Process (IW -1767)
12/2/2019 2019 Annual AICPA Employee Benefit Plan Conference Update (Self -Study)
12/13/2019 Teammate Analytics (IL -1769)
12/13/2019 TeamMate Analytics Overview, Sampling & Journal Entry Testing (IW -1808)
12/13/2019 SKY Professional Development Series: 50 Ways to Fight Bias (IL -1746)
1/12/2018 2018 Camp BKD — Audit
3/20/2018 Independence—Historical Insights and Today's Rules
4/13/2018 2018 Employee Benefit Plan Annual Update (IL -1039)
5/18/2018 Ethics & Risk Management: The Appropriate Use of Emails, Texts & Emoji (IW -
1073)
5/20/2018 IT Security Awareness — Your Role in Protecting Our Clients, the Firm & Yourself
6/22/2018 New In -Charge Training (Local Office)
9/17/2018 Fraud Series: Common Threads in Financial Statement Frauds
9/17/2018 Fraud Series: Accounting Estimates — Where Fraud May Be Hiding
9/30/2018 Fraud Series: Financial Statement Fraud Detection
9/30/2018 Fraud Series — Using ACL to Detect Financial Statement Fraud
10/4/2018 2018 Audit Level 1
10/19/2018 New Leases Standard Training (IL -1185)
BKD
Hours
2
1.5
1
25
4
1.5
5
1
1
4.5
1
2.5
42.5
2.5
2
1
0
8
1
1
1
1
32
5
24
BKD
Date
CPE Course Completed
Hours
10/26/2018
A&A Government Basics — Session 1
1
11/2/2018
2018 A&A Annual Update
4
11/3/2018
IT Security Awareness — Browser & Internet Security
0
11/16/2018
Income Tax Accounting 101: What You Need to Know (IW -1348)
1
11/16/2018
Ethics & Fraud Considerations (IW -1347)
1
12/5/2018
2018 Annual AICPA EBP Conference Update (Self -Study)
1
12/14/2018
Impact of the New Credit Loss Standard on Financial Institution Series (IW -1365)
1.5
12/14/2018
Accounting Profession Insights with Eric Hansen (IW -1360)
1
12/22/2018
Basics of EBP Audits — Course 1: Intro & Overview (Key Terms, Audit
1
Requirements) & Loans
12/22/2018
Basics of EBP Audits — Course 2: Investments
1
12/23/2018
Basics of EBP Audits — Course 4: Contributions & Distributions
1
12/23/2018
Basics of EBP Audits — Course 3: Participant Data & Eligibility Testing, Revenues &
1
Expenses
12/29/2018
Basics of EBP Audits — Course 5: Compliance Issues & FS Overview
1
12/30/2018
ESOP Presentation & Disclosure (Self -Study)
1
Dtal I 171.5
Additional Resources
Lindsey D. Oakley, CPA
Partner
Professional Experience
/ ► Member of BKD National Public Sector Group
► Serves in BKD's National Office accounting and auditing department, where she provides
technical support to auditors, implements new professional standards and performs
concurring reviews on engagements. She also serves as the firmwide government and not-
for-profit technical coordinator.
► Joined the National Office in 2012 after working in the Springfield, Missouri, office where she provided
audit and consulting services for not-for-profit organizations, governmental entities and real estate
companies.
25
ELI
Professional & Community Involvement
► Member, American Institute of CPAs (AICPA)
► Member, Missouri Society of CPAs.
► Serves on the Executive Committee of the AICPA Governmental Audit Quality Center.
► Lead adopter of the AICPA's Advanced Single Audit Certificate Program. This certificate requires the
ability to evaluate and analyze the core concepts related to client acceptance, engagement planning,
engagement analysis and concluding an engagement as well as guiding principles for Single Audits at
an advanced level as outlined in the AICPA Competency Framework: Governmental Auditing.
Education & Certifications
► Cum laude graduate of Missouri State University, Springfield, with a B.A. degree in accounting, and in
2005 received an M.Acc. degree.
Danny A. Martinez, CPA, CGFM
Managing Director
Professional Experience
► Member of BKD National Public Sector Group
► Provides advisory and consulting services related to a variety of technical accounting
issues and assists clients with implementation of new accounting standards
► Oversees audit engagements for governmental entities, including many that require a
Single Audit in accordance with the Uniform Guidance
► 13+ years of experience providing audit, advisory and training services to a client base that includes
counties, utilities, school districts, municipalities and their component units, state agencies, tribal
governments and other entities that receive federal assistance.
Professional & Community Involvement
► Zone 3 (GASB) chair for the American Institute of CPAs Technical Issues Committee, a group that
provides a voice for its constituents in the standard-setting process.
► Membership director for the Dallas Chapter of the Association of Governmental Accountants.
► Member, Texas Society of CPAs
► Member, New Mexico and New Mexico Society of CPAs
Education & Certifications
► Graduate of the University of Southern California, Los Angeles, with a B.S. degree in accounting
► Licensed CPA, Texas and New Mexico
► Holds the Certified Government Financial Manager® designation
► American Institute of CPAs Advanced Single Audit Certificate
26
BKD
Continuing Professional Education
Our audit professionals are required to receive at least 120 hours of CPE every three years. For auditors involved
with audits performed under Government Auditing Standards, this education includes the hours required to
comply with Government Auditing Standards Yellow Book guidance. All individuals, including specialists
involved in performing fieldwork on Government Auditing Standards audits, are required to obtain at least 24
hours of CPE every two years in subjects directly related to governmental auditing or the governmental
environment. In addition, engagement team members responsible for planning, directing or reporting on
Government Auditing Standards audits who spend more than 20 percent of their time performing Government
Auditing Standards audits also are required to complete a minimum of 80 hours of CPE every two years that
directly enhances their professional proficiency to perform audits.
BKD offers an internal industry update seminar for managers through partners, as well as a seminar for our in -
charge level employees. These seminars include auditing and accounting issues that are specific to
governmental clients, including Government Auditing Standards, Single Audits and accounting standards for
governmental financial reporting. BKD professionals also receive additional training from external sources.
Recognized Learning & Development •
Since 2014, BKD has been ranked among Training magazine's Training Top 125. We also
have received Chief Learning Officer magazine's LearningElite award since 2016, 2019WINNER
including a Gold -level recognition in 2018 and 2019. These programs rank an
organization's excellence in employer-sponsored training and recognize outstanding C HIF:F1. ARNING0HICEti
outcomes in learning and development. LEARNINGELITE
®• r ;
Staff Continuity
Continuity of staff assigned to engagements is one of our primary goals. Whenever possible, we keep a
consistent client service team working for you. This helps reduce the learning curve and saves you the time,
frustration and disruption of dealing with new advisors unfamiliar with your organization. Past experience is a
primary determinant for assigning professionals to your engagement, and we assign individuals who are
experienced in working with municipalities. Though it is impossible for any firm to know the future career paths of
its professionals, many BKD clients have been served by substantially the same BKD engagement team for
years.
Engagement partners, managers, other supervisory staff and specialists may be changed if those personnel leave
the firm, are promoted or are assigned to another office. These personnel may also be changed for other reasons
with the express prior written permission of the City of Pearland, Texas. However, in either case, the City retains
the right to approve or reject replacements.
Consultants and firm specialists mentioned in response to this request for proposal can only be changed with the
express prior written permission of the City, which retains the right to approve or reject replacements.
Other audit personnel may be changed at the discretion of the proposer if replacements have substantially the
same or better qualifications or experience. The City reserves the right to request removal of personnel.
27
In the event we are required to make a change to any key personnel assigned to your engagement, we will
discuss this with you to explain the circumstances and proposed change. Your lead engagement partner,
Amanda Eaves, will be coordinating personnel changes. We generally do not remove key personnel from an
audit once it has begun, but occasionally employee turnover or other events beyond our control require such a
change. If a personnel change is required, we are confident we can provide a qualified replacement to complete
your audit with limited interruption.
We understand engagement team members, consultants and firm specialists mentioned in our response to this
RFQ can only be changed with the prior express written permission of the City, which retains the right to approve
or reject replacements.
28
BKD
Prior Engagements with the City of Pearland, Texas
List separately all engagements within the last five years, ranked based on total staff hours, for the City by type of
engagement (i.e., audit, management advisory services, other). Indicate the scope of work, date, engagement
partners, total hours, the location of the firm's office from which the engagement was performed, and the name
and telephone number of the principal client contact.
As mentioned, BKD has had no professional relationships involving the City or any of its component units in the
previous five years.
Similar Engagements with Other Government Entities
For the firm's office that will be assigned responsibility for the audit, list the most significant engagements
(minimum - 5) performed in the last five years that are similar to the engagement described in this request (similar
in size to Pearland, i.e. population, annual budget). These engagements should be ranked based on total staff
hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number
of the principal client contact. Also, indicate whether the CAFR issued in connection with the audit was awarded
the GFOA's Certificate of Achievement for Excellence in Financial Reporting and if in compliance with GASB 34.
Our clients are our best ambassadors, and we encourage you to contact them about their satisfaction with our
services. The following clients have consented to discussing BKD's services and service delivery with you at your
convenience.
City of College Station, Texas*
Ms. Mary Ellen Leonard
Director of Fiscal Services
979.764.3645
College Station, TX
Scope of work: Financial statement audit, single audit
Dates of engagement(s): 2018 to present
Engagement partner: Amanda Eaves
Total hours: 575
CAFR Program award: Yes
GASB 34 compliance: Yes
City of Mesquite, Texas*
Ms. Debbie Mol
Director of Finance
972.216.6287
Mesquite, TX
Scope of work: Financial statement audit, single audit, agreed upon procedures
Dates of engagement(s): 2015 to present
Engagement partners: Kevin Kemp
Total hours: 672
CAFR Program award: Yes
GASB 34 compliance: Yes
W,
City of Bryan, Texas and Bryan Texas Utilities*
Mr. William Smith
Assistant Finance Director
979.209.5000
Bryan, TX
Scope of work: Financial statement audit, single audit
Dates of engagement(s): 2019 to present
Engagement partner: Amanda Eaves
Total hours: 780
CAFR Program award: Yes
GASB 34 compliance: Yes
Houston -Galveston Area Council*
Ms. Nancy Haussler
Chief Financial Officer
713.993.4510
Houston, TX
Scope of work: Financial statement audit, single audit
Dates of engagement(s): 2019 to present
Engagement partner: Amanda Eaves
Total hours: 510
CAFR Program award: Yes
GASB 34 compliance: Yes
City of Midland, Texas*
Ms. Christy Weakland
Comptroller
432.685.7218
Midland, TX
Scope of work: Financial statement audit, single audit, agreed upon procedures,
assistance with CAFR preparation
Dates of engagement(s): 2017 -present
Engagement partners: Kevin Kemp
Total hours: 900
CAFR Program award: Yes
GASB 34 compliance: Yes
BKD
30
BKD
BKD's Representative Lists of Clients
BKD and your local Texas team is proud to work with a variety of public sector clients nationwide. Please
see below for our sample lists.
Governments and Single Audit Clients located in Texas
City of Abilene, TX^#
City of Balch Springs, TX
City of Bryan, TX^#
City of College Station, TX^#
City of Decatur, TX
City of Hurst, TX
City of Keene, TX
City of Kennedale, TX^
City of Kerrville, TX^
City of Lancaster, TX^
City of McKinney, TX^#
City of Mesquite, TX^#
City of Midland, TX^#
City of Roanoke, TX^
City of South Houston, TX
City of Texarkana, TX^
City of Tomball, TX^
Aliana Management District
Baptist Hospitals of Southeast Texas and
Subsidiaries#
BCFS Health and Human Services#
Brazos Higher Education Authority, Inc.#
Bryan Texas Utilities
Central Harris County Regional Water Authority
Citizens Medical Center#
Dallas County Hospital District DBA Parkland
Health and Hospital System#
Development Corporation of Abilene
EI Centro De Corazon#
Galveston County Health District#
Other Counties & Municipalities
City & County of Denver, CO^#
City of Arvada, CO^#
City of Aurora, CO^#
City of Beatrice, NE#
City of Bellevue, NE#
City of Bentonville, AR A#
City of Colorado Springs, CO^#
City of Conway, AR#
31
Generation Park Management District
Harris County Emergency Services District 60
Harris County Hospital District#
Harris County Industrial Development
Corporation
Houston Food Bank and Subsidiaries#
Houston Galveston Area Council^#
Houston Public Media
Legacy Community Health Centers, Inc.#
Letourneau University#
Lone Star Community Health Center#
Matagorda County Hospital District#
North Channel Water Authority
North Texas Food Bank#
Parker University#
Port Authority of San Antonio#
South Texas College of Law, Houston#
St. Edwards University, Inc.#
Tarrant County Hospital District DBA JPS Health
Network#
Texas Municipal Power Agency
Texas Southern University
Town of Addison, TX^
Town of Highland Park, TX^
University of Dallas#
University of Houston
University of North Texas System
University of St. Thomas#
West Ranch Management District
Wise County Water Supply
City of Fayetteville, AR A#
City of Fishers, IN#
City of Fort Collins, CO#
City of Fort Smith, AR
City of Grand Island, NE#
City of Kansas City, MO^##
City of Lawton, OK$
City of Lincoln, NE A#
City of Little Rock, AR^#
City of Nebraska City, NE
City of Norman, OK#
City of Omaha, NE#
City of Phoenix, AZ^#
City of Pine Bluff, AR#
City of Ralston, NE
City of Springdale, AR#
BKD
City of Texarkana, ARA
City of Westminster, CO^#
Consolidated City of Indianapolis — Marion
County, IN
Douglas County, NE#
Hinds County, MS#
Jackson County, MO#
Sedgwick County, KS#
"Denotes client who earned recognition under the Government Finance Officers Association's (GFOA)
Certificate of Achievement for Excellence in Financial Reporting Program
#Denotes client with single audit requirements
Other Governmental Entities
Airport Authority of the City of Lincoln, NE
Central Arkansas Water
Cherokee Nation and Cherokee Nation
Entertainment
Choctaw Nation Housing Authority
Choctaw Nation of Oklahoma
City Utilities of Springfield
Colorado Water Resources Development &
Power Authority
Community and Economic Development
Association of Cook County, Inc.
Denver Urban Renewal Authority
Fayetteville Public Library
Hinds County Board of Supervisors
Illinois Gaming Board
Other Single Audit Clients
Airport Authority of the City of Lincoln, NE
Allegheny County Airport Authority
American College of Emergency Physicians
Ball State University
Bill and Hillary Clinton National Airport, a
Component Unit of the City of Little Rock, AR
City of Springdale, AR
Community and Economic Development
Association of Cook County, Inc.
Consolidated City of Indianapolis — Marion
County, IN
Fort Smith Regional Airport
Fort Wayne — Allen County Airport Authority
Healing Hands Ministries, Inc.
Hinds County Board of Supervisors
Indianapolis Airport Authority
Kansas City Board of Public Utilities, Kansas
Minneapolis/St. Paul Metropolitan Airports
Commission
Mississippi Department of Corrections
Missouri Department of Transportation
Municipal Energy Agency of Mississippi
Nebraska Lottery
Oklahoma City -County Health Department
Omaha Public Power District
Pikes Peak Library District
San Diego County Regional Airport Authority
State Universities Retirement System of Illinois
Teachers' Retirement System of the State of
Illinois
Housing Authority of the City of Little Rock, AR
Indiana Housing and Community Development
Authority
Indianapolis Airport Authority
Jackson County, MO
Little Rock Water Reclamation Authority
Minneapolis/St Paul Metropolitan Airports
Commission
Mothers Against Drunk Driving
National Math & Science Initiative, Inc.
Parker University
San Diego County Regional Airport Authority
Susquehanna Area Regional Airport Authority
University of Kentucky
University of Missouri System
32
M
Specific Audit Approach
The proposal should set forth a work plan, including an explanation of the audit methodology to be followed, to
perform the services required in Section II of this request.
Financial Statement Audit in Accordance with Government Auditing
Standards & the Uniform Guidance
What is an Audit?
Auditing standards set the technical requirements for our process, culminating with the expression of our opinion
on the presentation of your financial statements. Our audit will be performed in accordance with auditing
standards generally accepted in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United States.
What is an Audit Experience?
While auditor selection should start with evaluating technical competence, it also should extend to your
expectations for a service experience. Your audit experience includes how your engagement is managed, how
you and your team are treated, the quality and timeliness of communication you receive and your confidence in
the results and guidance you receive. We want you to consider our philosophy around independence, integrity
and quality, along with our commitment to Unmatched Client Service and the strength of your proposed
engagement team.
The BKD Differences That Matter
33
Our people are key components of what differentiates a BKD audit. Through intentional training and our
firm culture, our teams integrate a commitment to quality with an appreciation for client needs and
expectations. We also bring relevant industry experience, which means you will not be required to train
our staff.
The engagement executive managing your audit will maintain a high level of involvement with the City by
delegating appropriate tasks to other audit team members as needed while remaining engaged with you
and the audit team. Our engagement executives are on site and participate in the supervision and
delivery of your audit.
Challenging matters or simple misunderstandings can arise, and they shouldn't be ignored. While our
responsibility is to issue an appropriate opinion on your financial statements, it is important for us to help
keep your team informed of issues as they occur and recommend the appropriate solution. Our
philosophy is to be courteous and professional, communicate timely and make reasonable requests. We
are committed to treating you and your team with candor and respect.
Technology plays a growing role in our audit as we adopt new tools to enhance our effectiveness and
efficiency. We have invested heavily in improving dynamic workflows and increasing our audit data
analytics capabilities. Though we use traditional tools such as Excel, we also delve deeper into analytic
tools with TeamMate Analytics and ACL, unstructured data with Kira and artificial intelligence and trend
analysis with Mind Bridge. These technologies, combined with our secure portal, help improve our results,
enhance your experience and increase the insight we can provide.
Onboarding & Project Management
Your BKD audit experience starts as soon as you select us. Our priorities include building rapport with your team,
developing a deeper understanding of your operations and collaborating with you on the design and expectations
of our service relationship. These efforts are part of the BKD Smooth Transition TM approach. The proposal
process has provided us with the basics of your organization, but learning more will help us serve you better.
If not already completed, we will finish the details of client acceptance to confirm what we have learned and verify
confidential information not already obtained, such as litigation history or other sensitive matters.
We will address various elements of project management
with you, including how you will use BKDconnect Client
Sites, our secure portal, to exchange and track information,
the key dates of our processes and refinements to the
details discussed in this proposal. We will schedule the
professionals outlined in this proposal and coordinate with
your team on details, such as timing of visits to your location
and discussions with your leadership.
Proposed Timeline
BKDconnect I Client Sites
Review of Prior Auditor Workpapers July 2020 Partner/Senior Manager
(initial year only)
Detailed Audit Plan and Entrance
Conference with Key Accounting August 2020 Partner/Senior Manager
Personnel
Interim Work and Progress Conference August/September 2020 Partner/Senior Manager
with Assistant and Director of Finance /Associates/IT Specialist
Fieldwork, including Entrance
Conference with Assistant and Director December 2020/January 2021 Partner/Senior Manager/
of Finance at Commencement and Exit Associates
Conferences upon Completion
Draft Reports February 2021 Partner/Senior Manager/
Associates
Conference with City Manager February 2021 Partner/Senior Manager
Conference with Audit Committee February 2021 Partner/Senior Manager
File CAFR with Council/City Secretary February 2021 Partner/Senior Manager
34
BKD
Executing the Audit
Once we have established our overall process and communication plans with you, the detailed work can begin
Key elements of that work include:
Risk Assessment
We will identify and assess risks of material misstatement in your financial statements, including those from
potential fraud. Our work is supported by building a strong understanding of your business environment through
documents you provide and by gathering information through interviews and tests for significant transaction
cycles.
Assessing IT Risks
For clients with complex systems, our risk assessment also includes a more focused evaluation of your IT
systems. Entities with greater IT risk often manage high-volume, automated transactions or otherwise rely heavily
on how systems create and manage data that affects financial statement amounts and disclosures. In your
environment, obtaining a strong understanding of your systems is important, and our feedback may help you
evaluate your own risks. In addition to using our traditional auditors, we may engage professionals from our IT
Risk Services (ITRS) division to assist in that evaluation. These individuals can offer specialized experience with
specific systems or with overall IT matters such as logical security, change management, computer operations
and other areas where risk and fraud relevant to financial reporting can occur.
Audit Design
Based on risks identified, we will design an audit approach specific to your organization. This tailoring takes into
consideration the uniqueness of your operations, the design of internal controls you have implemented and the
nature of financial statement amounts and disclosures. We consider whether matters are truly important
(materiality), as well as obtain input about concerns from the audit committee to design the tests we will perform.
Gathering Evidence
Once the plan is complete, we will execute the audit through a combination of on- and off-site work performed in
accordance with the agreed-upon timeline.
Reviewing the Work
Critical to our process is a review of the team's work by our engagement executive, as well as a quality review by
another executive who is independent from the detailed work. The quality review is designed to improve our
deliverable by providing a fresh perspective and reinforcing quality.
Sharing Our Results
We base our audit opinion on the evidence gathered and then communicate our findings. Professional standards
drive the content of our opinion and the required communication about any deficiencies and other items we may
identify during the audit. Beyond these requirements, we share results formally through our letters and
presentations to the audit committee, as well as opportunities for improvement through conversations during the
audit process.
35
Compliance Audit in Accordance with the Uniform Guidance
BKD performs hundreds of Single Audits annually, focusing on two objectives: first, an audit of your financial
statements and reporting on the Schedule of Expenditures of Federal Awards (SEFA) in accordance with
Government Auditing Standards, and second, a compliance audit for federal awards expended during the fiscal
year in accordance with the Uniform Guidance.
Approximately one-third of our not-for-profit and governmental clients receive federal funding. Our extensive
experience with compliance testing in accordance with OMB requirements can help provide the City with a Single
Audit performed properly and submitted on time.
Our Approach
During our audit procedures of federal award programs, we do not simply look for findings to report. We look for
opportunities to advise you of more efficient ways to comply with federal regulations to reduce the risks of
sanctions or reduced funding. BKD has developed contacts at federal agencies and has been able to work
cooperatively with these agencies to help clients resolve or avoid issues
Entities subject to the Uniform Guidance and Government Auditing Standards will benefit from BKD's specially
designed audit programs, checklists and database of federal audit programs.
Identification and testing of your federal programs will be performed primarily during interim fieldwork, which will
typically be performed before your fiscal year-end. We have found this to be the most efficient manner in which to
perform our audit services when the additional Uniform Guidance requirements are present.
Training Requirements for Single Auditors
The City can have confidence in BKD auditors' experience in testing federal funding subject to the Uniform
Guidance. As mentioned, our audit professionals are required to receive at least 120 hours of CPE every three
years, and for auditors involved with audits performed under Government Auditing Standards, this education
includes the hours required to comply with Government Auditing Standards Yellow Book guidance. Staff
members attend a series of core audit and accounting courses over the first four years of their careers. Staff
subsequently receive additional training on accounting and auditing for the not-for-profit and governmental
environment.
Audit of Federal Programs
BKD routinely provides compliance audits of federally funded programs for public sector entities including
programs funded by the U.S. Environmental Protection Agency, U.S. Department of Homeland Security, U.S.
Department of Housing and Urban Development, U.S. Department of Transportation and many other federal
agencies.
Broad Audit Risk Considerations
Some risk considerations apply across nearly all of our audits. We pay particular attention to the following items:
Significant Accounting Estimates
Nearly all financial statements have significant estimates in amounts and disclosures, even when not readily
apparent. Estimates may include amounts ultimately collectible from third parties, expected losses or costs
occurring at a specific amount and time, etc.
We will gather information supporting management's estimates and challenge key assumptions used to develop
these amounts. We also will test estimates on available data and historical trends and document our conclusions
on the reasonableness of recorded amounts.
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DKD
Risk of Management Override of Controls
When considering fraud, auditing standards require evaluating the risk that management could override existing
controls. We will perform interviews of selected individuals, apply an element of unpredictability in our testing and
brainstorm as a team to evaluate risks and possible actions based on our observations. We also will perform
journal entry testing, review estimates for bias and significant changes and consider the business rationale for
significant unusual transactions.
Procedures & Risks Specific to the Public Sector
Audit procedures can vary, but they often include traditional observation, sampling and testing combined with
more advanced deployment of technology for trend analysis, summarization of documents and assessment of
large data sets.
Our work with hundreds of clients in the public sector means our advisors are very familiar with entities similar to
the City. While no two audits are the same, certain activities are common to governmental entities. Specific risk
areas for the City are likely to include:
Investments
This is a significant audit area due to the risks associated with the proper and timely valuation of investments. We
employ a variety of audit procedures in this area, including the use of third -party confirmations, obtaining an
understanding of management's assessment of fair values, and fair market value testing to published sources. In
addition, we evaluate the disclosure requirements and help determine the adequacy of completeness and
accuracy of the disclosures.
Accounts Receivable & Deferred Inflows of Resources & Unearned Revenue
These areas are often a significant risk due to the subjective nature of the City's estimate for the allowance for
doubtful accounts and the proper recognition of revenue for funds that report using the modified accrual basis of
accounting and the current financial resources measurement focus that is consistent with the City's policy. We
will test the cutoff of various revenue sources, such as taxes, government grants and customer utility accounts,
and review the revenue journal both before and after year-end. We may confirm significant accounts receivable,
as well as a sample of others to test both existence and proper classification, if considered necessary. In
addition, we will test deferred inflows of resources by reviewing subsequent collections and perform various
analytical procedures to test both completeness and proper classification of the balances, consistent with the
City's policy of recognizing revenue on the modified accrual basis of accounting.
Capital Assets
We will audit the capital asset rollforward activity of each opinion unit, focusing on significant additions and
disposals during the year. Current -year additions will be tested to appropriate supporting documentation. A
review of repair and maintenance accounts will be performed to help identify whether material additions have
been capitalized. New lease agreements will be reviewed to identify whether they have been accounted for
properly. Depreciation expense also will be tested for reasonableness, and certain analytical procedures will be
performed on the capital outlay line items for governmental funds associated with the conversion to government -
wide reporting.
37
� C
Long -Term Debt
This is typically a risk due to the presence of one or more significant debt covenants. We review the associated
debt documents to help gain an understanding of the flow of funds prescribed for any pledged revenues. We
review the covenants and obtain evidence through inquiry and other means, including the recalculation of any
financial covenants, to support the conclusion that all covenants have been met and all debt service payments
have been made timely. We also will confirm the annual payment activity and ending balances of certain bonds,
notes and leases payable with trustees. In the case of any refunded debt in the year being audited, we will
recalculate the accounting gain or loss by reviewing trustee statements and bond documents to test for proper
classification and footnote disclosures. We also will inquire about your policy on reviewing each bond and note
for applicable IRS arbitrage requirements, prepare a list of bonds and notes subject to IRS arbitrage requirements
and the most recent arbitrage calculation prepared for each bond and challenge the calculation performed to test
for completeness and obligations of the City.
Net Position/Fund Balances
Procedures we perform in this area include vouching (or cross-indexing to work performed in other areas) of
significant increases and decreases to net position, recalculation of net investment in capital assets for enterprise
funds and governmentwide activities, review of documentation supporting the establishment and classifications of
new accounts and testing of various nonspendable, restricted, committed and assigned fund balance accounts
based on supporting documentation of donor and grantor agreements, enabling legislation, formal actions of city
council, such as ordinances and resolutions and other formal policies.
Revenue Recognition
Professional standards include a rebuttable presumption that for each audit, there is a risk of material
misstatement due to fraud relating to improper revenue recognition. Our approach is to gain an understanding of
the revenue recognition criteria and policies and then perform a variety of inquiry, analytical and substantive audit
procedures to confirm our understanding.
Uniform Guidance Testing
We will discuss with management and review the preliminary SEFA as of an interim date to determine the likely
major programs for testing. We will conduct the majority of our testing prior to year-end and will share our results
with you prior to final fieldwork. During final fieldwork, we will assess whether there are any additional major
programs that would require testing and conclude our compliance and internal control procedures related to
OMB's Uniform Guidance expenditures in agreement with the conclusion of the audit of the financial statements.
Utility Receivables & Unbilled Revenues
We will use several methods to audit your receivables and the estimate of unbilled revenues, including using look -
back reports, reviewing historical collection methods and assessing of the aging and payor mix of your accounts
receivable detail. We will analytically review key ratios such as days in accounts receivable and charge-off rates
compared to industry averages and prior year results to help us reach our audit conclusions. We will work with
your team before year-end on the allowance to see that we understand your methodologies and conclusions.
Finally, we use data analysis software to test subsequent billings and receipts and the accuracy of revenue cutoff
to help validate the year-end accounts receivable balance and any unbilled revenue amounts.
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BKD
Pensions & Other Post -Employment Benefit Obligations
Due to the subjective nature of the estimation processes associated with determining the estimated Other Post -
Employment Benefit (OPEB) obligations liability, we will obtain and test the specific actuarial calculations for the
OPEB liability. First, we will evaluate the professional qualifications and reputation of the actuary. We will read
the actuarial reports to obtain an understanding of the methods and assumptions employed and evaluate the cost
method used and the significant assumptions underlying the actuarial calculations. Select testing of the
underlying data used in the calculation will be performed. We will evaluate the valuation, cost and amortization
methods for consistency. The other significant underlying assumptions such as discount rates, rates of return and
medical cost trends will be compared with independent external studies of assumptions by such noted
organizations as Milliman Medical Index, SEI Pension Accounting Research Series and the Towers Watson
annual health care trend survey.
IT
We will use IT audit professionals and employ audit procedures to test whether the controls within your IT
environment are sufficient to allow us to rely on the information generated by your IT platform. These tests will
include identification of critical internal controls, detailed walkthroughs of transactions, testing the functionality of
the key IT controls identified and review of change management protocols, access controls and overall IT
security.
GASB Issues New Lease Standard
With the upcoming GASB 87, the way leases are handled in public sector accounting is about to change. While
this new rule is intended to provide clarity for users of financial statements, it brings a host of considerations for
both lessors and lessees. Governmental entities will be allowed to transition using the facts and circumstances in
place at the time of adoption, rather than retroactive to the time each lease was begun.
Offerors will be required to provide the following information on their audit approach:
a. Proposed segmentation of the engagement
b. Level of staff and number of hours to be assigned to each proposed segment of the engagement
Risk assessment procedures, including meetings with officials &
staff, preliminary analytics, review minutes & design of audit 40 All Professionals
procedures based on assessed risks
Document & evaluate internal controls 32 Senior Manager &
Associate
Obtain financial policies & procedures, bond documents, leases Senior Manager,
& grants & other items for our permanent file 16 Manager & Associate
Substantive procedures & analytical review techniques 210 All Professionals
CAFR preparation and review 56 All Professionals
39
BKD
Single Audit testing 52 Senior Manager &
Associate
Supervision, review & technical assistance 80 Partner/Senior
Manager
Client conferences & meetings to review audit reports g Partner & Senior
Manager
Reporting — Report to audit committee and city council 4 Partner & Senior
Manager
c. The extent to which statistical sampling is to be used in the engagement, including sampling methods, size and
areas of use.
Although it is not possible to set absolute rules for identifying sample sizes, we apply our professional judgment in
identifying the appropriate sample size. The objective is to test the population to obtain reasonable confidence
that the test objectives have been met. Sample sizes are controlled by the following considerations:
► Tolerable error (precision) — as the expected monetary conclusion becomes more critical, sample size
should increase to tighten the range of the extrapolated estimate
► Significance of the account to the financial statements — as the significance increases, sample size
should increase
► Assessment of internal control risk — as assessed risk is reduced, sample size for substantive tests
should decrease
► Extent of other substantive audit procedures related to same audit objective (tests of detail, as well as
analytical review) — as the extent of other procedures increase, sample size should decrease
► Frequency and magnitude of expected errors — as the frequency and magnitude of expected errors
increase, sample size should increase
► The size of the population to be sampled and whether a sample is appropriate
We anticipate using certain data extraction tools, such as TeamMate Analytics, in selecting and testing samples
or complete populations, where appropriate. These effective tools allow us to efficiently test larger amounts of
data.
d. Extent of use of EDP software in the engagement
Enhancing an Audit with Technology
BKD is a leading firm in working with the development of the AICPA's Dynamic Audit Solution Initiative that
focuses on the audit of the future. We believe technology should do more than just execute an audit, which is
why we're continuing to invest in significant technological enhancements. Our aim is to make the service process
smoother and improve the client experience. We're going beyond simply adapting to an electronic environment—
we're deploying tools that harness data analytics, artificial intelligence and powerful benchmarking solutions, all
while emphasizing the importance of security and confidentiality.
40
BKD
Unstructured Data Analysis
Kira is a data analysis platform that can help accelerate data organization and improve our ability to identify
issues when assessing a large volume of documents. Beyond optical character recognition, Kira allows us to
quickly and effectively process contracts, leases, debt agreements and other documents to extract relevant
information to address disclosures and risk areas sooner.
Data Analytics
Our data analytics capabilities continue to expand. While common platforms such as Excel provide some level of
data query and investigation, we train our personnel on more advanced tools. Tools such as TeamMate Analytics
and ACL help us ingest and normalize various types of reports you might provide and perform sophisticated
analysis on the resulting data. We are piloting the use of artificial intelligence through Mind Bridge, an even more
advanced application that allows us to upload multiple years of general ledger and subledger (receivable and
payable) data. Using these tools, we can run analytics on 100 percent of the City's transaction detail to detect
potential anomalies and patterns that indicate risk.
Direct Data Ingestion
In 2019, we began our first pilot using tools such as Audit Accelerator, powered by Validis, to directly connect to
client systems and securely extract a copy of the general ledger and other accounting records. This allows us to
have the data for more sophisticated analysis and saves you substantial time in creating general ledger and trial
balance reports, as well as reducing other document requests that can be derived from that data, such as aging
details and invoice records. Direct data ingestion is a growing technology space, but the vast variety of systems
that clients use can create some limitations. Current tools are compatible with a handful of major accounting
applications, and we can evaluate whether our tools would be a good fit for the City.
Improving Business Process Workflows
While our industry -tailored forms have been an important differentiator in our practice thus far, we're now moving
to more sophisticated and dynamic checklists and workflows. We believe this new approach will increase
efficiency and improve the data gathering experience for all parties. This evolution is enabling greater use of
electronic signatures for contracts and will be integral to improved data sharing and transparency between BKD
and our clients.
BKDconnect Client Sites
We view project management as having multiple elements, with communication, timeliness and facilitating
efficient exchanging of information among the most key. As mentioned, BKDconnect Client Sites is an innovative
client portal designed to help address the challenges financial engagements present and conveniently connect
you with our advisors.
BKDconnect Client Sites can make it easier to:
► View and manage information about your engagement or project
► Share documents and files with your BKD advisors and project teams
► Organize documents and files for retrieval
► Assign tasks to your team and receive requests for information from BKD
► Track the progress of tasks toward completion
► Access our award-winning, industry -specific articles, webinars, videos and more
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BKD
e. Type and extent of analytical procedures to be used in the engagement
Analytical procedures involve auditing a material assertion or account balance by investigating its relationship to
an expectation such as other accounts, historical trends or other related measures. BKD recognizes that stronger
analytical procedures can help reduce or eliminate other substantive procedures that are usually more time
consuming. We would typically consider:
► Ratio analysis — comparing relationships among account balances, ratios, nonfinancial data, budgets or
industry averages
► Reasonableness tests — using financial and/or nonfinancial data to develop an expectation of an account
balance
Successfully using analytical procedures requires auditors to ask the questions:
► What is the risk of material misstatement?
► How would we find those misstatements?
► Have I gathered enough audit evidence?
When analytical procedures provide sufficient evidence, other substantive audit procedures should not be
necessary. If analytical procedures are not sufficient, some combination of analytical and substantive procedures
is likely to be the preferred approach.
f. Approach to be taken to gain and document an understanding of the City's internal control structure
Understanding your operations and the design of your controls helps create an effective and efficient audit
process. When performing our first audit, this effort is more substantial. There are several data sources we
intend to use, including your prior auditor.
Our first objective is to identify those resources that might advance our understanding without extra effort on your
part. If you have documentation of your organizational structure, control environment (including technology) and
the controls you have in place, along with any testing of those controls, we can often just read and supplement
that information as needed. Even when clients have effective controls, their documentation is often limited, so
additional effort may be required. When starting with limited documentation, we will:
► Perform a risk assessment using your financial statements to identify the relevant areas for documenting
our understanding and related testing. While we want to have an understanding of your operations, it
isn't necessary for us to document every control, particularly when a control is not related to a significant
audit area.
► Ask you to complete industry -specific questionnaires that summarize your control structure. You might
complete these forms directly or we may interview you to guide the process, or some combination of
both. This process includes understanding your information system and related controls.
► Identify who performs or can perform control activities. We can use industry -based assignment of duties
forms to capture those assignments.
► Assess and/or identify key controls you have in place for significant areas of risk. We will look for gaps
in your design and potential overlapping assignments of duties that could or should be segregated.
► Perform limited tests of design effectiveness of control activities. These tests will help us evaluate
whether our documentation matches the activities occurring.
42
l►iJ
► Consider extended tests of controls. In some cases, your information may be so complex or voluminous
that extended control testing is needed to rely on your control and reduce other substantive testing in our
audit.
► Summarize recommendations for your consideration. For minor deficiencies or suggestions, we may
discuss changes during our audit. For others, including significant deficiencies or material weaknesses,
we will prepare written recommendations for your consideration.
► In periods following our first audit, the majority of our understanding and documentation will be complete.
Going forward, we focus on changes that have occurred and continue performing tests of design
effectiveness or expanded testing to evaluate whether control design has remained the same.
g. Approach to be taken in determining laws and regulations that will be subject to audit test work
Identification of applicable laws and regulations will begin with an inquiry of the City as to your understanding of
applicable laws and regulations. In addition, our reviews of various documents, indentures, agreements, etc., will
be designed to encompass known laws and regulations within the scope of the audit. We are experienced in
auditing municipalities in the state of Texas and are familiar with the laws and regulatory environment in which
you operate.
h. Approach to be taken in drawing audit samples for purposes of tests of compliance
The sampling approach anticipated to be used in connection with the various areas of the audit is judgmental in
nature. The size and nature of the population being tested, along with the assessed risk of the associated
financial statement line item affected, will determine the size and approach for selecting a sample. Sample sizes
will be sufficient to meet requirements of the various state and federal laws and regulations. We anticipate using
data extraction tools, such as ACL's data extraction and analysis software, in certain situations in selecting and
testing samples or complete populations, where appropriate.
i. List of standard schedules required to be prepared by client
Please see the example list of standard schedules requested included in the appendix
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BKD
Identification of Anticipated Potential Audit Problems
The proposal should identify and describe any anticipated potential audit problems, and the adoption of new laws
or accounting audit principles that might affect the audit, the firm's approach to addressing these problems and
any special assistance that will be requested from the City.
Communication of Audit Problems
While we do not anticipate significant audit problems, we understand the importance of good channels of
communication with key engagement team members to facilitate the discussion of issues that may arise. Once
we commence final fieldwork, we would ask for management's participation in weekly progress meetings that
would facilitate such communication and allow for timely identification and response to problems that may be
encountered.
Adopting New Standards
New accounting standards and regulations often require significant evaluation prior to implementation. While the
implementation plans and final results are ultimately the client's responsibility, we aim to do the heavy lifting
upfront by helping analyze any new requirements and formulating an appropriate adoption plan. Our active
industry involvement and experience serving hundreds of public sector entities nationwide exposes us to the
latest industry developments, and we have significant experience effectively communicating new standards to
similar clients.
Our Expectations of Your Staff
In working with similar clients, we have developed efficient approaches that aim to avoid wasted effort. Your
participation helps control costs, reduce unnecessary disruptions and meet deadlines.
We need your team to maintain records in good condition, provide the necessary schedules and cooperate with
our audit team. Most clients routinely prepare these records and schedules during their normal monthly or annual
closing process.
Specific assistance from your personnel may include
► Preparing a complete and accurate general ledger trial balance by account, to which very few
adjustments are needed
► Preparing accurate audit schedules to support all significant balance sheet and certain other accounts
► Responding to auditor inquiries
► Preparing confirmation and other letters
► Pulling selected invoices and other documents from files
► Helping to resolve any differences or exceptions noted
► Completing documentation of internal controls
► Completing financial statements and footnote information
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BKD
Report Format
Include sample formats for required reports — examples of similar clients' CAFRs.
Please follow the links below to access example client CAFRs, which include sample formats for required reports.
Fiscal Year 2019 CAM for the Citv of Brvan. Texas
Fiscal Year 2019 CAFR for the City of College Station, Texas
Fiscal Year 2019 CAM for the City of Mesquite, Texas
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Unmatched client service isn't
just a slogan at BKD; it's the
backbone of our culture.
Theodore D. Dickman, CPA
Chief Executive Officer I BKD
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BKD
Required Forms
Guarantees — Appendix C
APPENDIX C
GUARANTEES — PROFESSIONAL AUDIT SERVICES RFQ # 0520-39
The proposer certifies it can and will provide and make available, at a minimum,
all services set forth in Section II, Nature of Services Required.
Signature of Official: f..rw
Name (typed): Amanda E. Eaves, CPA
Title: Partner
Firm: BKD, LLP
Date: June 2, 2020
51
Fa -le 28 of 32
Warranties — Appendix D
WARRANTIES — PROFESSIONAL AUDIT SERVICES RFQ # 0520-39
A. Proposer warrants that it is willing and able to comply with State of Texas laws.
B. Proposer warrants that it has or is willing and able to obtain an errors and
omissions insurance policy providing a prudent amount of coverage for the willful
or negligent acts, or omissions of any officers, employees or agents thereof.
C. Proposer warrants that it will not delegate or subcontract its responsibilities under
an agreement without the prior written permission of the CITY OF PEARLAND,
TEXAS.
D. Proposer warrants that all information provided by it in connection with this
proposal is true and accurate.
Signature of Official: if C, �,--
Name (typed): Amanda E. Eaves; CPA
Title: Partner
Firm: sKa, LLP
Date: June 2, 2020
F'_a_re 29 cf 32
52
ER
Conflict of Interest Questionnaire
CONFLICT OF INTEREST QUESTIONNAIRE FORM CIQ
For vendor doing business with local governmental entity
This questionnaire reflects changes made to the law by H.B. 23, 84th Leg., Regular Session.
OFFICE USE ONLY
This questionnaire is being filed in accordance with Chapter 176, Local Government Code, by a vendor who
Date Received
has a business relationship as defined by Section 176.001(1-a) with a local governmental entity and the
vendor meets requirements under Section 176.006(a).
By law this questionnaire must be filed with the records administrator of the local governmental entity not later
than the 7th business day after the date the vendor becomes aware of facts that require the statement to be
filed. See Section 176.006(a-1), Local Government Code.
A vendor commits an offense if the vendor knowingly violates Section 176.006, Local Government Code. An
offense under this section is a misdemeanor.
1 Name of vendor who has a business relationship with local governmental entity.
2
Check this box if you are filing an update to a previously filed questionnaire. (The law requires that you file an updated
completed questionnaire with the appropriate filing authority not later than the 7th business day after the date on which
you became aware that the originally filed questionnaire was incomplete or inaccurate.)
3 Name of local government officer about whom the information is being disclosed.
Name of Officer
4 Describe each employment or other business relationship with the local government officer, or a family member of the
officer, as described by Section 176.003(a)(2)(A). Also describe any family relationship with the local government officer.
Complete subparts A and B for each employment or business relationship described. Attach additional pages to this Form
CIO as necessary.
A. Is the local government officer or a family member of the officer receiving or likely to receive taxable income,
other than investment income. from the vendor?
Yes F-1 No
B. Is the vendor receiving or likely to receive taxable income, other than investment income, from or at the direction
of the local government officer or a family member of the officer AND the taxable income is not received from the
local governmental entity?
F7 Yes E-1 No
6 Describe each employment or business relationship that the vendor named in Section 1 maintains with a corporation or
other business entity with respect to which the local government officer serves as an officer or director, or holds an
ownership interest of one percent or more.
6
❑ Check this box if the vendor has given the local government officer or a family member of the officer one or more gifts
as described in Section 176.003(a)(2)(B), excluding gifts described in Section 176.003(a-1).
7 ��� /
4flll•-� t, &,—
June 2, 2020
Signature of vendor doing business with the governmental entity Date
Form provided by Texas Ethics Commission www.ethics.state.tx.us Revised 11 30 2015
53
House Bill 89 Verification
House Bill 89 Verification
1, Amanda Eaves (Person name), the undersigned
representative (hereafter referred to as "Representative") of BKD, LLP
(company or
business name, hereafter referred to as "Business Entity"), being an adult over the age
of eighteen (18) years of age, after being duly sworn by the undersigned notary, do hereby
depose and affirm the following:
That Representative is authorized to execute this verification on behalf of Business
Entity;
2. That Business Entity does not boycott Israel and will not boycott Israel during the
term of any contract that will be entered into between Business Entity and the City of
Pearland; and
3. That Representative understands that the term "boycott Israel" is defined by Texas
Government Code Section 2270.001 to mean refusing to deal with, terminating business
activities with, or otherwise taking any action that is intended to penalize, inflict economic
harm on, or limit commercial relations specifically with Israel, or with a person or entity
doing business in Israel or in an Israeli -controlled territory, but does not include an action
made for ordinary business purposes.
Aw-,z �, �,,_
SIGNATURE OF REPRESENTATIVE
SUBSCRIBED AND SWORN TO BEFORE ME, the undersigned authority, on this
2nd day of June 20 20.
Notary Public
CONNIE SUE PELLETIER
Notary Public, State of Texas
Comm. Expires 07-28.2022
Notary ID 6084060
I
54
Insurance Agreement
Cit of Pearland Purchasing Department
City 281.652 1767 or
3519 Liberty Drive 281.652.1790
Pearland TX 77581 Fax 281.652.1738
Contractor Insurance Requirements & Agreement
Requirements
Contractors performing work on City property or public right-of-way for the City of Pearland shall provide the City a
certificate of insurance or a copy of their insurance policy(s) evidencing the coverages and coverage provisions
identified herein. Contractor's insurance will be primary payer. Contractors shall provide the City evidence that all
subcontractors performing work on the project have the same types and amounts of coverages as required herein
or that the subcontractors are included under the contractors policy.
All insurance companies and coverages must be authorized by the Texas Department of Insurance to transact
business in the State of Texas and must be acceptable to the City of Pearland.
Listed below are the types and amounts of insurances required. The City reserves the right to amend or require
additional types and amounts of coverages or provisions depending on the nature of the work.
Certificate of Insurance forms may be emailed to: Purchasing Department at ebids(cbpearlandtx.gov. Questions
regarding required insurance should be directed to City of Pearland Purchasing Department, at
ebidsa.pearlandtx qov.
This form must be signed and returned with your bid/quotation. You are stating that you do have the required
insurance and if selected to perform work for the City, will provide a certificate of insurance, and a copy of
insurance policy with the above requirements to the City. A purchase order will not be issued without
evidence of required insurance.
Agreement
I agree to provide the above described insurance coverages within 10 working days if selected to perform work for
the City of Pearland. I also agree to provide the City evidence of insurance coverage on any and all subcontractors
performing work on the project.
Project/Bid # Professional Auditing ervices / RFQ# 0520-39
Company: BKD, LLP
Signature and Printed Name:IIAMI&�&Amanda E. Eaves, CPA
55
TYPEOFINSURANCE
AMOUNTOFINSURANCE
PROVISIONS
1.
Workers' Compensation
Statutory Limits
City is to be listed as additional
EmployersLiability
5100,000 per occurrence
insured with wavier of
subrogation and 30 day notice of
cancellation or material change in
coverage.
2
Commercial General {Public)
Personal Injury - S1,000,000 per
Liability to include coverage for:
person; Property Damage -
a) Premises/Operations
$1,000,000 per occurrence
b) Products/Completed
General Aggregate - S1;000,000
Operations
c) Independent Contractors
d) Personal Injury
e) Contractual Liability
3.
Business Auto Liability to include
Combined Single Limit -
coverage for.
$1,000,000
a) Owned/Leased vehicles
b) Non -owned vehicles
c) Hired vehicles
Certificate of Insurance forms may be emailed to: Purchasing Department at ebids(cbpearlandtx.gov. Questions
regarding required insurance should be directed to City of Pearland Purchasing Department, at
ebidsa.pearlandtx qov.
This form must be signed and returned with your bid/quotation. You are stating that you do have the required
insurance and if selected to perform work for the City, will provide a certificate of insurance, and a copy of
insurance policy with the above requirements to the City. A purchase order will not be issued without
evidence of required insurance.
Agreement
I agree to provide the above described insurance coverages within 10 working days if selected to perform work for
the City of Pearland. I also agree to provide the City evidence of insurance coverage on any and all subcontractors
performing work on the project.
Project/Bid # Professional Auditing ervices / RFQ# 0520-39
Company: BKD, LLP
Signature and Printed Name:IIAMI&�&Amanda E. Eaves, CPA
55
Non -Collusion Statement
NON -COLLUSION STATEMENT
"The undersigned affirms that they are duly authorized to execute this contract, that this company,
corporation, firm, partnership or individual has not prepared this bid in collusion with any other bidder,
and that the contents of this bid as to prices, terms or conditions of said bid have not been
communicated by the undersigned nor by any employee or agent to any other person engaged in this
type of business prior to the official opening of this bid."
Vendor BKD, LLP
Address 2700 Post Oak Boulevard, Suite 1500 Houston, TX 77056
Phone Number 713.499.4600
Fax Number 713.499.4699
Email Address aeaves@bkd.com q
Bidder (Signature)
Position with Company Partner
Signature of Company
Official Authorizing This Bid
Company Official (Printed Name) Amanda E. Eaves, CPA
Official Position Partner
- XI
56
BKD
Example List of Standard Schedules Requested
Example WT—
Interim PBC llat
NOTE The fallowing s hedules re requested for the year ended September 30, 2020- All schedules should agree tothe general ledger trial balance Please provide all requested items in electronic format (Ecol, Wad,
Adobe, etc) when available.
lcfftqpy
RIB Ref
Kom Requested Exoactd Date Received Notes
Cash,investments, Debt , and Material Receivabler- Confinnadmsfor all accounts held at 9/3020. Neale send listing of snnfu ,s and
account numbers and we will determine 8 paper or electronic _,I.!_ tan be completed.
General
1
8K0 to provide paper template and kzzing ofAoper �rmgnpm tc be prepared after Fsnn9rsprgvded.
General
2
Preliminary FY2020Tnal Balance in Elrod format (by accountnumber)
3
FinalTrial Balance for FY20LO in Eel 1—t (by account number) - first year only
General
a
AWP I80 -Entity 1.acrd Controls -please review and complete for FY2020
General
5
AWP .1please review and complete for FY2020
General
6
AWP 182 -Cash Inflows Controls- please review and mrrpletefor FY2020
Genial
7
AWP183-Cash Outflows Controls - please remew and completion FY2020
General
8
AWP 181- Dayroll Controls - ol— review and complete for FY2020
General
9
AWP 186- Investing and Finance Controls-pleasereview and complete for FY2020
General
10
AWP 187-TMRS Controls - please review and complete for FY2O2O
General
11
AWP 090 -Entity and Environment Questiomaire-pleasereviewandcompletefor FY2020
General
12
AWP LSD-CEmt Nanning Questimnairr- please completefor FY7020
A detail schedule of legalfees incurred showing payee, date, amount and a description of the matter forwhich service was provided. All
General
13
legal invoices should also he available for review.
General
le
Coplesof all agreements and contracts for permanent fie,
Lease agreements (capital leases, operating leases, etc)
Lira of creditornotes payable agreements
Debt policy
Articles of incorporation or by-laws, or other enabling legislation
Investmentmanagement agreements
Investment policy
Employee Vacaton/PTO policy
My other accounting polides/mtnuals
Olherrelated parry agreements
Organizational chart for operations and management of the organization
Pension, Post -Ret & Profit -Sharing Plan Documents and Adoption Agreements
Employee handbook
Tax Abatem ant Agreements
General
15
Copy of GFOA comments from FY2019 CAR
General
16
City's response to G FOA comments
General
17
Coq of FY2019 Audit management letter(SAS Letter)
Schedule of insurance coverage for all insurance policies held by the City- Schedule should include type of coverage, coverage limits,
Insurance 1 deductible, arty claims in emssof insured amounts, major changes during the current yearand name ofthe insurer.
Other Liabilities 1 YTO Payroll Register for l/12019.12/31/2019(Pension Plan Measurement Date is December 31)
Other Liabilities 2 New Hire Listing for all hires for 1/1/2019.12/312019 (Pension Plan Measurement Date is December 31)
Other Uabilmes 3 Termination Ustingfor all employeestermed for l/12019-1221/2019(Pension Plan Measurcrtrm Date is December 31)
Other liabilities aCensus Data Al. as of 12/31/19for both TMRS
Other Liabilities 5 TMRS Authorized user list (to be obtained from TMRS)
Ot
her UabilRies 6 Werethere any Pmsion dienges/Oty Co cl ordinances in 201971f yes, please provide mpies
Other Liabilities 7 Penson reports submitted for 2019
Other Liabilities 8 OPER Census Data File from Actuary for most recent valuation
Budget 1 Copy oftheoriginal budget that agrees to the budget approved bythe Gly Coumnlfor FY2020
Budget 2 Copy of budget adjustm—sthatagreeto approved ordinmcesfor FY3020
Single Audit 1 Scheduleof expenditurel of Federal and State awards Interim Fieldwork date (preliminary)
Single Audit 2 Completed 1120 -SA: Int Cntd OverCompliance-Control Environment and RiskAssessment ICQ
Single Audit 3 Lettersrecdvedlrom stateorfederal agenciesconceming financial orperformanceaudts
57
ERampk Qty, Tem
Final Fieldwork - PBC Lt.
NOTE: The following schedules are requested for the year ended September 30, 2020. All schedules should agree to the general ledger trial balance. Please provide all requested items in electronic format (Excel,
Word. Adobe, etc) when available.
Cab File Ref Ram R.qu.n.d Ex sled Data Received Notn
An electronic exce or to m e of all Journalent es ran sactons for FY 2020 (should include both manual and automate
General 1 entries)
General 2 Preliminary Trial balance for 9/30/20In Excel prior to commencing field work
General 3 Copies of alljoumal entries posted to FY2020 TB after providing preliminary TrialBalance
Copies of any new agreements or mmraets for amendments of existing documentsl not previously provided In any other section or
General 4 du ring interim fieldwork
General
5
List of Payments made to Mayor, Council Members, and Related Parties In FY2020to present. H none, simply send email stating"none"
Cash mcandlladons at 9/30 for all funds/accounts. Reconciliations should have a detail list of outstanding checks by check number and
Cash
1
a detail list of all deposits in transit.
Cash
2
Ftnondliation of pcoled cash by fund
Cash
3
September 30 (Year-end) bank statements for all accounts
Cash
4
October 1 (subsequent to yearend) bank statements for all amounts
Scheduleof all Interfund and Intrafund bank mansferswhhln 5 business days before and 5 business days after 9/30 for all cash and
Cash
5
Investment accounts
Cash
6
Restricted Cash Summary Schedule and reasons for restrictions on cash accounts
Investments
1
September 30(yearend)bank statements for all Investment accounts
Investments
2
Investment Rolifouward- Purchases and sales from 10/1 thru 9/30
Investments
3
Yearend report from bank showing collateral
Investments
4
Schedule of accrued Interest by Investment and (antl total
Schedule of Interest Income by fund reconciled to the Mal balance. f Detall incksdes notes receivable, premium and discount
Investments
5
amortimtion, bank account and Investment earnings, ex.)
Amounts Receivable
I
Property Tax RalHarward
Amounts RecelvaIs
2
Schedule of original charge/assessment of property taxes for current year to be collected In subsequent year.
Accounts Receivable
3
Detail list of delinquent taxes by year levied. Schedule should include historical% collected for minimum of 3 years.
use of current year collectlons of property taxes by year levied and should differentiate between current and delinquent mllectlo—
AmountsReceivable
4
BKD will need to trace and agmethesecollectionsio deposit In the respective bank statements.
List of all subsequent receipts an property taxes after yearend (property taxes relating to current fiscal year, but rust collected until
after year-end). List should Include the amount and the necessary Information to trace and agree to deposit In the respective bank
AmountsReceivable
5
statemets.(Allfunds)
Amounts Receivable
6
Schedule of other tax mlkctlons at 9/30. Schedule should be by fund and Include a list of all subsequent receipts.
Amounts Receivable
7
Court Citations Balance Report from 10/1/19 to 9/3020
Amounts Receivable
g
Court Aging of Open Cases from 10/1/19 to 9/30/20
Amounts Receivable
9
Unavailable Revenue Schedule and Analysis
AmountsReceivable
10
Unbilled W/S Revenue at 9f30/20 Spreadsheet
Amounts Receivable
t
Utllhy System GL Reconciliation Report at 9/30/20
AmountsReceivable
12
Utility Amount Aging Report at 9/30120
Amounts Receivable
13
Utility SubsequentCallectlons Report (October Monthly Transaction Report)
Detail Schedules of all other significant amounts receivable by type and fund at 9/30. Schedule should Include a list of subsequent
Amounts Receivable
14
recelpts to be traced to the respective bank statements.
Inventory
1
Physical Inventory Details for each fund
ALL CAPITAL ASSETS SHOULD BE LISTED BY GOVERNMENTAL -TYPE AND BUSINESS -TYPE ASSETS (COST BASIS AND DEPRECIATION).
IN ADDRION, DEPRECIATION SHOULD BE FURTHER CATEGORISED BY FUNCTION
Capital asset rolforwaid schedules for all capital assets at 9/30/20. Schedules should include beginning cost basis al 9130/19,
additions. deletions and ending cost basis at 9/3020. Additions/deletions should be distinguished from transfers between fund,.
Ca phal Assets
1
Separate rallforward should he prepared for govemnmaI activities and business type activities.
Detail lining of all capital assets purchased and disposed of during the current year. DIW oral list should calculate gain or loss on
Capital Assets
2
disposal, if any. This list is subject to sampling: therefore, purchase invoices and proceeds on sale are subject to examination.
Detail lining of all construction in progress (CTP) at 9/30. Schedule should Include balance of CIP at 9/30/19, additions, deletions and
Capital Assets
3
ending balance of CIP at 9/30/20.
Capital Assets
4
Interest capitalization calculation at 9/30.
A detail schedule of repair and maintenance expense for each such general ledger amount showing vendor, date, amount and a
Capital Assets
5
description efthe repair.
Capital Assets
6
Detail for Developer Contributions for the fiscal year
Capital Assets
7Reconciliation
of capital outlays to capital additions for FY (if available)
Capital Assets
R
Detail of Depreciation Expense by Function
A schedule of prepaid expenses showing description/payer, period covered, beginning balance, payments, expense and ending
Other Assets
1
balance.
Amounts Payable
1
Drta 11/AP Aging Schedule of all accounts payable type amounts at 9130 by amount/fund reconciled to the trial balance
Check register or disbursement journal by fund for all checks/disbursements from the period of 10/1119 through the end of field work.
Amounts Payable
2
(Should Include regular checks. ACH payments, and wire transfers)
W alkforward of long -terra debt. - Roliforward schedule for all general obligation and proprietary fund debt (to Include bonds. capital
leases, notes payable, etc.). Schedule should Include the beginning balance, additions, payments (deletions) and ending balance at
Debt
1
9/30/20. Should also Include Interest expense by debt Issue and fund and any accrued Interest portion at 9/30.
Schedule of debt maturities and Interest by debt Issue for the next 5 years and 5 year Increments starting the 6th year until date
Debt
2
maturity. (For debt foci nom schedule tie owl
Schedule of amonizatlon of band discounts, bond premiums, and any gain/loss on debt refundings by Issue and fund Far year-end
Debt
3
9/30.
Calaslatlon of gain/loss on any bond refundings that occurred In current year. Copy of journal entry to record the refunded debt
Debt
4
Debt
5
Economic gain/loss osculation on refunded debt. (Investment firm handling the refunding usually performs this calculation)
Deist
6
Caples of any arbitrage calculations performed during the current year.
Debt
7
Revenue bond Interest & sinking calculation at 9/30/20
BKD
58
BKD
Debt
8
Revenue bond coseragecalculaIon for the year ended 9/30/10
Summaryschedule of compensated absences w Include ldngeberefts. This schedule should include the current and long term
Other Liabilities
1
portiore by fund. In addition, the schedule should Include the beginning balance, add Mons, deletions and ending balance at 9/30
Detailed reports to support the summary schedule of compensated absences. These reports should Include personnel, number of
Other Liabilities
2
hours sick/vacation accrued and rate of pay at 9/30.
Other IIabIIMes
3
A schedule showing the calculation of accrued salaries and wages payable at year end by account/fund
Other LWhilMes
<
Payroll Pegislerfw last pa y date In FY2020
Other LiabilMes
5
Payroll Register for first pay dateIn FY1020
Other Liabilities
6
Detail of Retainage Payable
Other LIabIIMes
7
Reconciliation of customer deposits between deposit summary report and GIL balance.
Other U.bIIIII
8
Supporting detail for customer deposits outstanding at year-end
Detail schedule of unearned revenue by fund at 9/30, The ability to trace and agree deferred revenue cash receipts -Ned M the
Other Liabgrties
i
emyearto the respective bank statements wlllberequired.
Other Ila bllMes
10
Calculation endsupport for OPER asset/liablllty
Other UabilMes
II
Copy of aclu aria] valuation for OPER
Other Liabi]Mes
12
Detail of material other accrued If, bilities by account/fund at 9/30.
Other llabllides
13
Copy of GASB 68 entryfor Pension pbns and related Calculation schedules
Other Liabilities
14
Copy of GASB 75 entry for OPEB plan and related calculation schedules
Insurance
1
Caples of any current year ordinances amending City's Seit Insured and Rlsk Management programs
Msura nce
2
Workers Comp Detail Usting of Expenditures by Account
Insurance
3
General Liability and Workers Camp IBNR Schemle/Lag Report
In suranm
4
Actuary Report for IBNR
Insurance
5
Estimated Medical Dental SeR4nsunnce Fund WNR Liability Calculation
Insurance
6
Medica] Claims Lag Report from 10/1/18 through 11/3W19
Interfund
1
Schedule of Interfund Transfers
InI rfund
2
Due To Due From Sc hetlule
Fund Balance
1
Summary Schedule of Fund Balance/Net Posh ion classifications by type and turd
Ca]culatlans and support fo classifications of fund balance/ret position for curent year - this includes ordinances, codes, agreements,
Fund:,,lance
2
etc
Fund Balance
3
Detail of Unspent Bond Proceeds at 9/30/20
Fund Balance
4
Calculation of net investment In capital assets
Rev & Exp
1
Detail of all miscellaneous revenue and expense accounts at 9/30.
Rev & Exp
List of all new operating lease commitments entered Into during current year. Ust should Include amount of lease. All lease
2agreements
should be available for review upon seleatiom
Rev &Exp
3
Schedule of Tax Abatement Programs and Amount of Taxes Abated by program
Rry & Exp
4
Copies of new or amended Tax Abatement Agreements for Perm File
Single Audit
1
Schedule of expenditures of Federal and Rate awards through 9/30 (final year end)
Single Audit
2
SEFA to UFR Reconciliation
Single Audit
3
Final Listing of Major Program Expenditures that agrees to SETA
Report Prep
1
Protide calculation of the Internal Service Fund allocation
Report Prep
2
GASB 34 Conversion Calculation
.Pon Prep
3
GASB 34 Program Revenue Schedule
Report Prep
4
Reconciliation of madded accrual statements to full accrual
Report Prep
5
CAFR Financial Schedules (Including cash flavr statements)
.Pon Prep
6
GFR Footnotes
Report Prep
7
CAFR Statisllca' Section
Report Prep
8
CAFR Transmittal and MD&A
59
AICPA Peer Review Letter
AICPA Peer Review Program
Administered by the National Peer Review Committee
October 26. 2017
Theodore Dickman
BKD, LLP
201 N Illinois St Ste 700
Indianapolis, IN 46204 4224
Dear Theodore Dickman.
American Institute of CPAs
220 Leigh Farm Road
Durham, NC 27707-8110
It is my pleasure to notify you that on October 26, 2017, the National Peer Review Committee accepted the
report on the most recent System Review of your firm. The due date for your next review is November 30,
2020. This is the date by which all review documents should be completed and submitted to the
administering entity.
As you know, the report had a peer review rating of pass. The Committee asked me to convey its
congratulations to the firm.
Thank you for your cooperation and support of the profession's practice -monitoring programs.
Sincerely,
��vw
Michael Fawley
Chair - National PRC
nprc@aicpa.org 919-402-4503
National Peer Review Committee
CC: Candace Wright, L Bennett
Firm Number: 900010002800 Review Number: 552103
T: 1.919.407.4502 1 F: 1.919.402.4876 1 nprc@aicpa.org
BKD
60
BKO
BKD Peer Review Report
P &N 8550 United Plaza Blvd , Ste. 1001 — Baton Rouge, LA 70809
225-922-4600 Phone — 225-922-4611 Fax — pncpa.com
Postlethwaite & Nettervitte Postlethwaite & Netterolle and Associates. L.L.C.
Report on the Firm's System of Quality Control
To the Partners of
BKD, LLP
and the National Peer Review Committee
We have reviewed the system of quality control for the accounting and auditing practice of BKD, LLP (the firm)
applicable to engagements not subject to PCAOB inspection in effect for the year ended May 31, 2017. Our peer
review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established
by the Peer Review Board of the American Institute of Certified Public Accountants (Standards).
A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as
described in the Standards may be found at ww•w.aicoa.ore/orsummarv. The summary also includes an explanation
of how engagements identified as not performed or reported in conformity with applicable professional standards, if
any, are evaluated by a peer reviewer to determine a peer review rating.
Firm's Responsibility
The firm is responsible for designing a system of quality control and complying with it to provide the firm with
reasonable assurance of performing and reporting in conformity with applicable professional standards in all material
respects. The firm is also responsible for evaluating actions to promptly remediate engagements deemed as not
performed or reported in conformity with professional standards, when appropriate, and for remediating weaknesses
in its system of quality control, if any.
Peer Reviewer's Responsibility
Our responsibility is to express an opinion on the design of the system of quality control and the finn•s compliance
therewith based on our review.
Required Selections and Considerations
Engagements selected for review included engagements performed under Government Auditing Standards, including
compliance audits under Single Audit Act; audits of employee benefit plans, audits performed under FDICIA, an
audit of carrying broker-dealers, and examinations of service organizations [SOC 1 and SOC 2 engagements].
As part of our peer review, we considered reviews by regulatory entities as communicated to the firm, if applicable,
in determining the nature and extent of our procedures.
Opinion
In our opinion, the system of quality control for the accounting and auditing practice of BKD, LLP applicable to
engagements not subject to PCAOB inspection in effect for the year ended May 31, 2017, has been suitably designed
and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with
applicable professional standards in all material respects. Firms can receive a rating of pass, pass with
defrciency(ies) orfail. BKD, LLP has received a peer review rating of pass.
Baton Rouge, Louisiana
October 6, 2017
61
BKD Firm Profile
BKD CPAs & Advisors can help individuals and businesses realize their goals. Our dedicated professionals offer
solutions for clients in all 50 states and internationally. BKD and its subsidiaries provide a variety of services, combining
the insight and ideas of multiple disciplines in a wide range of industries.
About BKD
Unmatched Client Service'
You want industry expertise delivered by someone who speaks
your language and understands your issues. Someone who
can help you solve problems with a formula that's equal parts
integrity, innovation, excellence and passion. BKD understands.
We're so committed to providing Unmatched Client Service that
we wrote a book about it—The BKD Experience: Unmatched
Client Service.
(P International Solutions
BKD is one of the largest North American members of
Praxity, AisBL•, a global alliance of independent firms serving
clients in approximately 100 countries. We offer multinational
clients a gateway to the global marketplace with services
delivered by alliance firms committed to the highest standards
required in international business.
Professional Affiliations
BKD is a member of the American Institute of CPAs and its
three quality centers: Center for Audit Quality, Employee
Benefit Plan Audit Quality Center and Governmental Audit
Quality Center.
BKD is registered with the Public Company Accounting
Oversight Board, which is required to serve as an independent
auditor of public companies. BKD audits approximately 70 SEC
registrants, including approximately 30 benefit plans.
• Audit & Assurance
• Tax
• Business Succession
Planning
Mission Statement
The mission of BKD is to always strive for excellence in
providing services to clients, create rewarding career
opportunities and maintain sound professional, business
and financial standards.
Quick Facts
• Clients: Individuals and private and publicly traded
businesses in the health care, manufacturing,
distribution, financial services, construction and
real estate industries, as well as not-for-profit and
governmental entities
• Total Personnel: Approximately 2,900
• Partners & Principals: Approximately 300
• Net Revenues: $663 million
• Fiscal Year -End: May 31
• Founded:1923
• Locations: 40 offices serving clients in all 50 states
and internationally
'Praxity. A68L is a global alliance of independent firms. Organised as an
international not-for-profit entity under Belgium law. Praxity has its
executive office in Epsom. Praxity - Global Alliance Limited is a not-for-
profit company registered in England and Wales, limited by guarantee,
and has its registered office in England. As an Alliance, Praxity does
not practice the profession of public accountancy or provide audit, tax,
consulting or other professional services of any type to third parties.
The Alliance does not constitute a joint venture, partnership or network
between participating firms. Because the Alliance firms are independent.
Praxity does not guarantee the services or the quality of services provided
by participating firms.
• Employee Benefit Plans
• Forensics & Valuation Consulting
• Information Technology
• Risk Management
• State, Local & International Tax
• Wealth Management
• And More
BKD
DY
AN
Facing Risk with Confidence
When choosing an audit, tax or other professional services provider, your decision may partly depend on
whether a prospective firm has the resources to go beyond your current needs. At BKD CPAs & Advisors, we're
committed to consistently expanding and enhancing our services, technology and expertise so we can help our
clients with their most pressing concerns, even as those concerns change daily. Beyond our proposed services,
BKD's Risk Advisory Services division can help with an extensive range of risk consulting resources, including:
• Data Analytics Consulting - From identifying important trends and opportunities for operational
improvements to reducing risk and preventing fraud, our experienced data analysts can help you get more
value from your data.
• BKD WhiteHat Services - This monthly subscription offers access to a suite of cybersecurity services,
including cyber awareness training, penetration and social engineering testing, a confidential fraud
hotline and other risk management toots.
• DEFCON CYBER TM - This risk assessment tool delivers a weekly report, which includes a cybersecurity
score to help measure risk and cyber preparedness, as well as steps you can take to help address these
risks and strengthen security.
• Construction Audit - An effective construction audit is designed to function as a cost management toot by
helping to prevent overcharges, contract noncompliance, conflicting charges and other issues common to
construction projects.
• Enterprise Risk Management (ERM) - ERM consulting can help you review existing risk management
activities, develop a unified vision to enhance these activities and more effectively integrate risk
management into your culture and daily operations.
• Forensics & Valuation Services (FVS) - BKD's FVS professionals can help clients with fraud prevention,
detection, response and recovery. With services including I nteg ra Report"', our anonymous fraud reporting
hotline, data analyses and assessments to help identify fraud, as well as investigations, litigation support
and expert testimony, we have the tools and expertise needed to help clients address fraud concerns from
beginning to end.
63
BKD
CPAs & Advisors
BKD PRIDE Values
O WHAT'S IMPORTANT TO YOU?
The rote of trust in business can't be oversold. But a trusted advisor is more
D than someone you lean on for professional expertise. At BKD, we believe
being an advisor who's earned your trust is as much about character as it is
know-how. These are the traits we share.
REM% A PASSION FOR HELPING, LEARNING AND IMPROVING
Our dedication and enthusiasm for making tomorrow better than today can help you make
informed decisions to improve business and financial outcomes.
RESPECT FOR EACH OTHER AND THOSE WE SERVE
Our respect for diversity can provide a variety of skills and talents to meet your needs.
By respecting the lessons of our legacy and yours, we can help you build on the opportunities
that arise from inevitable change.
INTEGRITY TO DO THE RIGHT THING—NO MATTER WHAT
Our trustworthiness and objectivity can help you make smart business decisions. A trusted
advisor tells you what you need to know, not just what you want to hear.
DISCIPLINE TO GET IT RIGHT THE FIRST TIME
Ourwell-established procedures and low-risk approach can help resolve issues and advance
your goals. We're dedicated to getting the job done without cutting corners.
A NO -HOLDS -BARRED STANDARD OF EXCELLENCE
Our ambition and knowledge, along with our commitment to lifelong learning and improving
our technical and analytical skills, will consistently surpass your expectations.
This combination of qualities represents what we strive for every day when helping your
organization move forward with confidence.
BKD
64
Everyone needs
Who's yours?
a trusted advisor.
BKO
CPAs & Advisors
Cost Fee for Professional Auditing
Services
RFQ # 0520-39
City of Pearland, Texas
Submitted by BKD, LLP
Amanda E. Eaves, CPA
2700 Post Oak Boulevard
Phone: 713.499.4600
June 2, 2020
COST PROPOSAL
Partner
Suite 1500 1 Houston, TX 77056
BKO
CPAs & Advisors
i
1. Total All -Inclusive Maximum Price
The sealed dollar cost fee should contain all pricing information relative to performing the audit engagement as
described in this request. The total all-inclusive maximum price proposed is to contain all direct and indirect costs
including all out-of-pocket expenses. The City will not be responsible for expenses incurred in preparing and
submitting the technical proposal or the sealed dollar cost fee.
The first page of the sealed dollar cost fee should include the following information:
a. Name of Firm
BKD, LLP
b. Certification that the person signing the proposal is entitled to represent the firm, empowered to submit, and
authorized to sign a contract with the City.
As a partner of the firm, Amanda Eaves is entitled to represent the firm, empowered to submit and authorized to
contractually bind BKD.
c. A total, all-inclusive maximum price for the Fiscal Year 2020 engagement and a total -cost proposal for each of
the subsequent six (6) years, though will be negotiated annually.
BKD knows our clients do not like fee surprises. Neither do we. Our goal is to be candid and timely, and we want
to answer your questions about fees upfront. We determine our fees by evaluating a number of variables: the
complexity of the work, the project's scope, the time we will spend and the level of professional staff needed.
Our total, all-inclusive maximum price for the fiscal year 2020 engagement is $ 60,000 for the financial statement
audit, $5,000 for the base single audit fee and $4,000 for each major program. For the subsequent six years,
please see our estimated fees in the table below.
For the Years
Ending September 2021 2022 20232 Q25 2026
30
Financial Statement $ 61,950 $ 63,900 $ 65,870 $ 67,825 $ 70,000 $ 72,175
Audit
Single Audit - base $ 5,165 $ 5,325 $ 5,490 $ 5,650 $ 5,835 $ 6,000
fee
Single Audit —fee for $ 4,135 S 4,275 $ 4,390 $ 4,525 $ 4,665 $ 4,825
each major program
Your fees include travel costs, if any, and an administrative fee of 4 percent to cover items such as copies,
postage and other delivery charges, supplies, technology -related costs, such as computer processing, software
licensing, research and library databases, and similar expense items. Our fees may increase if our duties or
responsibilities change because of new rules, regulations and accounting or auditing standards. We will consult
with you should this happen.
1
BKD
Our estimate of fees does not include any time that may be required to address a restatement of the previously
audited financial statements. Accordingly, any such work will be billed based on our quoted hourly rates.
Z
BKO
2. Rates by Partner, Specialist, Supervisory & Staff Level Times
Hours Anticipated for Each.
The second page of the sealed dollar cost fee should include a schedule of professional fees and expenses,
presented in the format provided in the attachment (Appendix E) that supports the total all-inclusive maximum
price.
APPENDIX E
Page 1
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THE FISCAL YEAR 2020 FINANCIAL STATEMENTS
(5
Other (specify): Admin. 2 $100-$200 YUU
Subtotal 434 $60,000
Total for Services
Out-of-pocket expenses: 0
Other (specify): 0
Total all-inclusive maximum price for the Fiscal Year 2020 audit $60,000
Please provide estimate of fees for the following 6 years.
FY2021 $61.950
FY2022 563.900
FY2023 565,870
FY2024 $67,825
FY2025 $70,000
FY2026 $72,175
Note: The rate quoted should not be presented as a general percentage of the
standard hourly rate or as a gross deduction from the total all-inclusive maximum price.
30 32
3
Standard
Quoted
Hourly
Hourly
Hours
Rates
Rates
Total
Partners
40
$340-$450
$270
$10,800
Managers
90
$210-$350
$170
15,300
152
$175-$275
$125
19,000
Supervisory Staff
Staff
140
$150-$200
$100
14,000
(5
Other (specify): Admin. 2 $100-$200 YUU
Subtotal 434 $60,000
Total for Services
Out-of-pocket expenses: 0
Other (specify): 0
Total all-inclusive maximum price for the Fiscal Year 2020 audit $60,000
Please provide estimate of fees for the following 6 years.
FY2021 $61.950
FY2022 563.900
FY2023 565,870
FY2024 $67,825
FY2025 $70,000
FY2026 $72,175
Note: The rate quoted should not be presented as a general percentage of the
standard hourly rate or as a gross deduction from the total all-inclusive maximum price.
30 32
3
APPENDIX E
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THE FISCAL YEAR 2020 FINANCIAL STATEMENTS
SUPPORTING SCHEDULE FOR SINGLE AUDIT
Please provide estimate of fees for the following 6 years.
FY2021 $ 9.300
FY2022 $ 9.600
FY2023 $ 9,880
FY2024 $10,175
FY2025 $10,500
FY2026 $10.825
SUBMIT AS A SEPARATE DOCUMENT FROM THE TECHNICAL STATEMENT
4
Standard
Quoted
Hourly
Hourly
Hours
Rates
Rates
Total
Partners
$
$340-$450
$270
$2,160
Managers
12
$210-$350
$170
2,040
Supervisory Staff
20
$175-$275
$125
2,500
Staff
20
$150-$200
$100
2,000
Other (specify): Admin.
4
$100-$200
$ 75
300
64
$9,000
Subtotal
0
Out-of-pocket expenses:
0
Other (specify):
$9,000
Total price for SINGLE AUDIT:
Please provide estimate of fees for the following 6 years.
FY2021 $ 9.300
FY2022 $ 9.600
FY2023 $ 9,880
FY2024 $10,175
FY2025 $10,500
FY2026 $10.825
SUBMIT AS A SEPARATE DOCUMENT FROM THE TECHNICAL STATEMENT
4
3. Rates for Additional Professional Services
If it should become necessary for the City to request the auditor to perform additional work as a result of the
specific recommendations included in any report issued on this engagement, then such additional work shall be
performed only if set forth in an additional contract between City of Pearland and the firm. Any such additional
work agreed to by the City and the firm shall be performed at the same rates set forth in the schedule of fees and
expenses included in the sealed dollar cost fee.
We understand that additional work requested by the City shall be performed only if set forth in an additional
contract between the City and BKD and such work shall be performed at the same rates set forth in the schedule
of fees and expenses included in our dollar cost fees.
4. Manner of Payment
Progress payments will be made based on hours of work completed during the course of the engagement and out-
of-pocket expenses incurred in accordance with the firm's dollar cost fee proposal. The invoice shall provide detail,
including number of hours completed per individual and billing rate. Interim billing shall cover a period of not less
than a calendar month. Ten percent (10%) will be withheld from each billing pending delivery of the firm's final
report. Final payment will not be made until completion and acceptance of audit.
Our pricing for this engagement and our fee structure is based upon the expectation our invoices will be paid
promptly. We will issue monthly progress billings during the course of our engagement and payment of our
invoices is due upon receipt. Interest will be charged on any unpaid balance after 45 days at the rate of 10
percent per annum.
5. Changes to Scope of Audit
If the audit scope should need to be broadened, the auditor must communicate the existence of such
circumstances to the Director of Finance and Assistant prior to performing work that will result in such fees
exceeding the initial amounts.
BKD understands if the audit scope should need to be broadened, we will communicate the circumstances to the
Director of Finance and Assistant prior to performing the additional work.
Our acceptance of this engagement is subject to completion of our normal client acceptance procedures. Upon acceptance, the actual terms of our engagement will be documented in a separate letter to be
signed by you and us. The information provided in this proposal is intended for informational purposes only and may not be copied, used or modified, in whole or in part, without SKD's prior written
approval. All information in this proposal is as of May 31, 2019, unless otherwise noted.
5
Everyone needs a
Who's yours?
trusted advisor.
BKD
CPAs & Advisors
CITY OF PEARLAND, TEXAS
REQUEST FOR QUALIFICATIONS
FOR
PROFESSIONAL AUDITING SERVICES
RFQ # 0520-39
Due: Tuesday, June 2, 2020 @ 11:00 a.m.
CITY OF PEARLAND
3519 LIBERTY DRIVE
PEARLAND, TEXAS 77581-5416
www.peariandtx.gov
EXHIBIT B
Page 1 of 32
TABLE OF CONTENTS
I. INTRODUCTION
A. General Information 5
B. Term of Engagement 6
C. Subcontracting 6
II. NATURE OF SERVICES REQUIRED
A.
General 6
B.
Scope of Work to be Performed 6
C.
Auditing Standards to be Followed 7
D.
Reports to be Issued 7
E.
Special Considerations 8
F.
Working Paper Retention and Access to Working Papers 9
III. DESCRIPTION OF THE GOVERNMENT
A.
Name of Contact Person and Organization Chart
10
B.
Background Information
10
C.
Fund Structure
11
D.
Budgetary Basis of Accounting
11
E.
Federal and State Financial Assistance Awards
11
F.
Pension Plans
11
G.
Component Units
11
H.
Finance Operations
12
I.
Computer Financial Systems
12
J.
Availability of Prior Audit Reports
12
K.
Equal Employment Opportunity
12
IV. TIME REQUIREMENTS
A. Proposal Calendar 13
B. Date Audit May Commence 13
C. Schedule for the 2013 Fiscal Year Audit 13
D. Entrance Conferences, Progress Reporting and Exit Conferences 14
V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT
PREPARATION
A. Finance Department and Clerical Assistance 14
B. Schedules to be Prepared by City Staff 14
C. Work Area, Telephone, Photocopying and FAX Machines 14
D. Report Preparation 15
Page 2 of 32
VI. PROPOSAL REQUIREMENTS
A. General Requirements 15
1. Pre -proposal Conference
2. Inquiries
3. Submission of Proposals
B. Technical Proposal 16
1. General Requirements
2. Independence
3. License to Practice in State of Texas
4. Firm Qualifications and Experience
5. Partner, Supervisory and Staff Qualifications and Experience
6. Prior Engagements with the City of Pearland
7. Similar Engagements with Other Government Entities
8. Specific Audit Approach
9. Identification of Anticipated Potential Audit Problems
10. Report Format
C. Sealed Dollar Cost Proposal 20
1. Total All -Inclusive Maximum Price
2. Rates by Partner, Specialist, Supervisory and Staff Level Times Hours
Anticipated for Each
3. Rates for Additional Professional Services
4. Manner of Payment
5. Expansion of Audit Scope
VII. EVALUATION PROCEDURES 21
A. Audit Selection Team
B. Review of Proposals
C. Evaluation Criteria
1. Mandatory Elements
2. Technical Qualifications
3. Price Proposal
D. Oral Presentations/Interviews
E. Final Selection
F. Right to Reject Proposals
Page 3 of 32
APPENDICES
A. Organizational Chart 26
B. List of City Officials and Key Personnel 27
C. Proposer Guarantees 28
D. Proposer Warranties 29
E. Format for Schedule of Professional Fees and Expenses 30
to Support the Total All -Inclusive Maximum Price
F. Financial Assistance Grants 32
Page 4 of 32
INTRODUCTION
A. General Information
The CITY OF PEARLAND, TEXAS is requesting proposals from qualified
firms of certified public accountants to audit its financial statements for the
fiscal year ending September 30, 2020, with the option of auditing its
financial statements for each of the six (6) subsequent fiscal years,
compiling the Comprehensive Annual Financial Report (CAFR), and
completion of a Single Audit Report, if expenditures criteria are met. These
audits are to be performed in accordance with generally accepted auditing
standards, the standards set forth for financial audits in the General
Accounting Office's (GAO) Government Auditing Standards (1994), the
provisions of the federal Single Audit Act of 1984 (as amended in 1996),
U.S. Office of Management and Budget (OMB) Circular A-133, Audits of
States, Local Governments, and Non -Profit Organizations, and
Governmental Accounting Standards Board (GASB).
There is no expressed or implied obligation for the CITY OF PEARLAND,
TEXAS to reimburse responding firms for any expenses incurred in,
preparing proposals in response to this request.
To be considered, Offerors should upload required, completed documents
as attachments under the "Response Attachments" tab, respond to the
questions on the "Attributes" tab and enter requested information on the
"Response Submission" tab on the https://peariand.ionwave.net website.
Once all items are complete, click on the "Submit" button on the
Response Submission tab prior to the due date and time. In the event an
Offeror chooses not to respond via the website, an electronic file/flash
drive along with four (4) copies of the proposal document must be
provided to the City of Pearland City Secretary Department at 3519
Liberty Drive by 11:00 a.m. on Tuesday, June 2, 2020. Proposals
received after this time will not be considered and will be returned to the
proposer unopened. The CITY OF PEARLAND, TEXAS reserves the
right to reject any or all proposals submitted and to re -solicit for services.
Submittals will be evaluated by the Finance Department staff and reviewed
with City Management and the City's Audit Committee. The Audit
Committee consists of two Council members, the City Manager, and the
Director of Finance.
During the evaluation process, the City of Pearland reserves the right,
where it may serve the City's best interest, to request additional information
or clarifications from proposers, or to allow corrections of errors or
omissions. At the discretion of the City, firms submitting proposals may be
requested to make oral presentations as part of the evaluation process.
Page 5 of 32
The City reserves the right to negotiate all elements of the proposal to
ensure that the best possible consideration be afforded to all. The City of
Pearland also reserves the right to retain all proposals submitted and to use
any ideas in a proposal regardless of whether that proposal is selected.
Submission of a proposal indicates acceptance by the firm of the conditions
contained in this request for proposal, unless clearly and specifically noted
in the proposal submitted and confirmed in the contract between the City of
Pearland and the firm selected.
PER SECTION VII, C THE FIRM MUST FOLLOW ALL INSTRUCTIONS IN
THIS REQUEST FOR QUALIFICATIONS IN ORDER TO BE
CONSIDERED FURTHER.
It is anticipated the Pearland City Council will award the contract for audit
services on July 13, 2020 or as soon thereafter as possible.
B. Term of Engagement
A seven-year engagement is contemplated, subject to the annual review
and recommendation of the City, the satisfactory negotiation of terms
(including a price acceptable to both the City and the selected firm), the
concurrence of the City Council and the annual availability of an
appropriation.
C. Subcontracting
No subcontracting will be allowed without the express prior written consent
of the City of Pearland, Texas.
II. NATURE OF SERVICES REQUIRED
A. General
The CITY OF PEARLAND, TEXAS is soliciting the services of qualified firms
of certified public accountants to audit its financial statements for the fiscal
year ending September 30, 2020, with annual options to audit the City's
financial statements for each of the six (6) subsequent fiscal years. The
option to engage the firm for each year rests with the City. These audits
are to be performed in accordance with the provisions contained in this
request for qualifications.
B. Scope of Work to be Performed
The City desires the auditor to express an opinion on whether the financial
statements (combining, basic and fund) of the City fairly present the
financial position and the results of financial operations in accordance with
generally accepted accounting principles. The auditor is not required to
audit the supporting schedules contained in the comprehensive annual
Page 6 of 32
financial report. However, the auditor is to provide an "in -relation -to" opinion
on the supporting schedules based on the auditing procedures applied
during the audit of the basic financial statements and the combining and
individual fund financial statements and schedules. The auditor is not
required to audit the introductory section of the report or the statistical
section of the report.
The auditor shall also be responsible for performing certain limited
procedures involving required supplementary information required by the
Governmental Accounting Standards Board as mandated by generally
accepted auditing standards.
The auditor is not required to audit the schedule of expenditures of federal
awards. However, the auditor is to provide an "in -relation -to" report on that
schedule based on the auditing procedures applied during the audit of the
financial statements.
Under the requirements of the Federal Government's program covering a
single audit for all federal grant funds, auditors shall conduct an audit in
accordance with the Single Audit Act Amendments of 1996 and in generally
accepted auditing standards as well as generally accepted governmental
auditing standards.
The auditor shall also be responsible for performing certain limited
procedures on management controls on investments and adherence to the
City's established investment policies as required by state law.
C. Auditing Standards to Be Followed
To meet the requirements, the audit shall be performed and the report
prepared in accordance with generally accepting auditing standards as set
forth by the American Institute of Certified Public Accountants, the
standards for financial audits set forth in the U.S. General Accounting
Office's Government Auditing Standards (1994), the provisions of the Single
Audit Act of 1984 (as amended in 1996) and the provisions of U.S. Office of
Management and Budget (OMB) Circular A-133, Audits of States, Local
Governments, and Non -Profit Organizations, Audits of State and Local
Governments, and Governmental Accounting Standards Board (GASB).
D. Reports to be Issued
Following the completion of the audit of the fiscal year's financial
statements, the auditor shall issue:
A report on the fair presentation of the financial statements in
conformity with generally accepted accounting principles, including
an opinion on the fair presentation of the supplementary schedule of
expenditures of federal awards "in relation to" the audited financial
Page 7 of 32
statements.
2. A report on compliance and internal control over financial reporting
based on an audit of the financial statements
3. A report on compliance and internal control over compliance
applicable to each major federal program.
In the required report[s] on compliance and internal controls, the auditor
shall communicate any reportable conditions found during the audit. A
reportable condition shall be defined as a significant deficiency or material
weakness 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.
Nonreportable conditions discovered by the auditors shall be reported in a
separate letter to management, which shall be referred to in the report[s] on
compliance and internal controls.
The report on compliance and internal controls shall include all material
instances of noncompliance. In addition, these instances, if any, shall be
reported to the Assistant Director of Finance and the Director of Finance
when discovered.
Irregularities and illegal acts. Auditors shall be required to make an
immediate, verbal report of all irregularities and illegal acts or indications of
illegal acts of which they become aware to the City Manager, immediately
followed by a written report to the City Manager and Audit Committee.
Reporting to the Audit Committee. In addition to the above, the auditors
shall assure themselves that the City Manager and the Audit Committee, in
addition to the Deputy City Manager, Assistant Directors of Finance and the
Director of Finance are informed of each of the following:
1. The auditor's responsibility under generally accepted auditing standards
2. Management judgments and accounting estimates
3. Significant audit adjustments
4. Other information in documents containing audited financial statements
5. Disagreements with management
6. Management consultation with other accountants
7. Major issues discussed with management prior to retention
8. Difficulties encountered in performing the audit
E. Special Considerations
1. The City will send its Comprehensive Annual Financial Report
(CAFR) to the Government Finance Officers Association of the
Page 8 of 32
United States and Canada for review in their Certificate of
Achievement for Excellence in Financial Reporting program. The
auditor should be familiar with this program and will be required to
prepare the CAFR in accordance with the requirements of the
program.
2. The City currently anticipates it will prepare one or more official
statements in connection with the sale of debt securities, which will
contain the basic financial statements and the auditor's report
thereon. The auditor shall be required, if requested by the financial
advisor and/or the underwriter, to issue a "consent and citation of
expertise" as the auditor and any necessary "comfort letters."
3. The Schedule of Expenditures of Federal Awards and related
auditor's report, as well as the reports on compliance and internal
controls are not to be included in the CAM but are to be issued
separately. Appendix F contains a list of the City's grants.
4. Throughout the year, the auditors will provide financial advice and
counsel on matters occurring that would affect the annual report.
F. Working Paper Retention and Access to Working Papers
All working papers and reports must be retained, at the auditor's expense,
for a minimum of five (5) years, unless the firm is notified in writing by the
City of the need to extend the retention period. The auditor will be required
to make working papers available, upon request, to the following parties or
their designees:
City of Pearland, Texas
State and Federal granting agencies
U.S. General Accounting Office (GAO)
Parties designated by the federal or state governments or by the City
as part of an audit quality review process
Auditors of entities of which the City is a subrecipient of grant funds
In addition, the firm shall respond to the reasonable inquiries of successor
auditors and allow successor auditors to review working papers relating to
matters of continuing accounting significance, at no additional cost to the
City.
Page 9 of 32
III. DESCRIPTION OF THE GOVERNMENT
A. Name of Contact Person and Organizational Chart
During the audit and field work, the auditor's principal contact with the City
will be Rhonda Daugherty, Assistant Director of Finance, or a designated
representative, who will coordinate the assistance to be provided by the City
to the auditor.
An organizational chart (Appendix A) and a list of key personnel, (Appendix
B) are attached.
B. Background Information
The City of Pearland is a home -rule City operating under a Council -Manager
form of government. The Council is comprised of a mayor and five council
members. The Mayor and all Council members are elected at large. The
Mayor votes only in case of a tie vote. The Mayor and each Council member
shall hold office for a period of three years and until his/her successor is
elected and qualified. Council members shall be limited to two full
consecutive terms of office and there is no limitation on the office of Mayor.
The City Manager is appointed by Council and is responsible for
implementation of Council policy, execution of the laws, and all day-to-day
operations of the City.
The City of Pearland serves an area of 73 square miles with a population of
127,500. The City's fiscal year begins on October 1 and ends on
September 30. The City provides a full array of municipal services to its
citizens and customers, including police and EMS services, parks and
recreation, streets and drainage, community development and public works,
administrative and fiscal services, and an aggressive capital improvement
program. The City owns and operates a water and wastewater system as
well as has several special revenue funds. The City provides fire services
through a fulltime paid fire department. The City contracts with the Brazoria
County Tax Office to bill and collect taxes for the City. The City also has
three component units: a 413 economic development corporation, a tax
increment reinvestment zone, and a local government corporation.
The City's fiscal year 2020 total budget, all funds, is $584.03 million - $86.2
million in the General Fund operating budget, $56.6 million in the
Water/Sewer Fund and $355.7 million budgeted for capital projects. The
budget includes the governmental funds, enterprise funds, and component
units. The budgeted number of FTE employees is approximately 820.
Page 10 of 32
C.
Fol
E
F.
1.0
Fund Structure
The City uses the following fund types in its financial reporting:
Legally
Number
Adopted
of
Annual
Fund Type
Funds
Bud ets
General fund
1
1
Special revenue funds
17
15
Debt service funds
1
1
Capital projects funds
24
1
Enterprise funds
2
2
Internal service funds
4
3
Component Units
3
1
Fixed Assets Account Group
2
Long Term Debt Account Group
3
Budgetary Basis of Accounting
The City prepares its budgets on a basis consistent with generally accepted
accounting principles for the General Fund and Debt Service Fund.
Enterprise funds are budgeted on a cash flow / working capital basis where
capital and principal payments are budgeted, but depreciation is not. The
City adopts project -length budgets for the Capital Project Funds.
Federal and State Awards
During the last fiscal year, the City received financial assistance from
several state and federal agencies. A list is provided in Appendix F
Pension Plans
The City provides pension benefits for all its full-time employees through a
nontraditional, joint contributory, defined benefit plan in the state-wide
Texas Municipal Retirement System, an agent, multiple -employer public
employee retirement system.
Component Units
The City is defined, for financial reporting purposes, in conformity with the
Governmental Accounting Standards Board's Codification of Governmental
Accounting and Financial Reporting Standards, Section 2100. Using these
criteria, the following component units are included in the City's financial
statements.
• PEARLAND ECONOMIC DEVELOPMENT CORPORATION
Page 11 of 32
• PEARLAND TAX INCREMENT REINVESTMENT ZONE #2
• DEVELOPMENT AUTHORITY OF PEARLAND
The component units all have the same fiscal year as the City and through
services agreement; the City handles all administrative needs. The above
component units are to be audited as part of the audit of the City's financial
statements.
H. Finance Operations
The Finance Department is led by the Director of Finance and consists of
40 FTE employees. The principal functions performed, and the number of
FTE employees assigned to each are as follows:
FUNCTION EMPLOYEES
Finance Administration 5
Budget 2
Accounting & Payroll 5
Treasury Management 2
Accounts Payable 3
Utility Billing & Collecting 20
Purchasing 3
I. Computer Financial Systems
The City's ERP system is the Tyler Technologies New World ERP. The
system runs with networked workstations for City Staff. The New World
system includes eSuite, Financial Management, Human Resources and
Utility Management.
J. Availability of Prior Audit Reports
Interested proposers who wish to review the prior year's audit report and
management letter should obtain the reports from the City's website at
www.citvofpearland.com or send an email request to
ebids(a-)-pearlandtx.gov.
K. Equal Employment Opportunity
The proposer agrees that during the performance of its contract, it will treat
all applicants and employees without discrimination as to race, color,
religion, sex, national origin, marital status, age, or disability and identify
itself as an "Equal Opportunity Employer" in all help wanted advertisements
or requests. The proposer shall be advised of any complaints filed with the
City alleging that proposer is not an Equal Opportunity Employer. In
Page 12 of 32
determining whether to terminate any portion of this contract, the City
reserves the right to consider reports from its Director of Human Resources
in response to discrimination complaints. However, the proposer is
specifically advised that no Equal Opportunity Employer complaint will be
the basis for cancellation of this contract.
IV. TIME REQUIREMENTS
A. Anticipated Calendar of events
The following is the proposed schedule for the selection process:
Request for SOQs issued
Due date for proposals
May 13
June 2
Review of proposals; Interviews with June/July
selected firms, if deemed necessary
Council action selecting audit firm July 13
B. Date Audit May Commence
The City will have all records ready for audit and all management personnel
available to meet with the firm's personnel upon mutual agreement.
C. Proposed Schedule
As part of the firm's proposal please complete a proposed schedule for the
2020 Fiscal Year Audit, similar to the one shown below, with proposed
completion dates for each phase.
1. Detailed Audit Plan - to include list of required information and
schedules to be prepared by client
2. Interim Work
3. Fieldwork
4. Draft Reports- Drafts of the audit report and recommendations to
management to be available for review by the Assistant Director and
Director of Finance
5. Conference with City Manager
6. Conference with Audit Committee
7. File CAFR with Council/City Secretary
Page 13 of 32
V.
D. Entrance Conferences, Progress Reporting and Exit Conferences
A similar time schedule will be developed for audits of future fiscal years if
the City exercises its option for additional audits. At a minimum, the
following conferences should be held:
Entrance conference with all
key Accounting personnel
Progress conference with Assistant and
Director of Finance
Entrance conference with Assistant and
Director of Finance to commence fieldwork
Exit conference with Assistant and
Director of Finance
Exit conference with City Manager and
Audit Committee
Prior to Interim Work
Completion of Interim Work
Start of Field Work
End of Field Work
Conclusion of audit
Additional periodic reports or meetings may be held as necessary
throughout the audit to ensure that the audit is on schedule and to
communicate any information deemed relevant to the audit and findings.
ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT
PREPARATION
Finance will prepare the final closing of the books including any auditor
entries as well as provide balance sheets, revenue, expenditure reports for
all funds.
A. Finance Department and Clerical Assistance
The finance department staff and responsible management personnel will
be available during the audit to assist the firm by providing information,
documentation, and explanations. The preparation of confirmation letters
will be the responsibility of the City.
B. PBC - For schedules to be prepared by City Staff, the auditor shall provide
a list at least three weeks prior to interim fieldwork.
C. Work Area, Telephones, Photocopying, Fax Machines, and Internet
access - The City will provide the auditor with reasonable work space,
tables, and chairs. The auditor will also be provided with access to a
telephone, photocopying facilities, fax machines, and internet access.
Page 14 of 32
D. Report Preparation - Preparation of the CAFR, editing, proofing and
printing shall be the responsibility of the auditor. Finance will produce the
transmittal letter, explanations in the MD&A and certain information in the
statistical section of the CAFR, and cover.
The Audit firm will prepare and provide fifteen (15) separate Single Audit
Reports.
VI. PROPOSAL REQUIREMENTS
A. General Requirements
Inquiries concerning the preparation of the statement of qualification
or use of the a -bid system should be emailed to
ebids@pearlandtx.gov.
Contact by any employee or agent of the responding firm with
personnel of the City of Pearland, Texas other than via the above
stated email address regarding this RFQ may be grounds for
elimination from the selection process. Inquiries and answers, if
deemed relevant to all proposers, will be provided via addendum on
lonwave.
2. Submission of documents: The following material is required to be
received by 11:00 a.m. on June 2, 2020 for a firm to be considered.
Documents should be uploaded to the "Response Attachments" tab
in lonwave for this RFQ.
a. Title Page - showing the RFQ name and #; the firm's name; the
name, address and telephone number of the contact person; and
the date of the proposal.
b. Table of Contents
c. Transmittal Letter - A signed letter of transmittal briefly stating the
proposer's understanding of the work to be done, the commitment
to perform the work within the time period, a statement why the
firm believes itself to be best qualified to perform the engagement
and a statement that the proposal is a firm and irrevocable offer
for the period stated.
d. Detailed Technical Proposal — the detailed proposal should follow
the order set forth in Section VI, B.
e. Executed copies of Guarantees and Warranties, attached to this
specification document (Appendix C and Appendix D)
f. Miscellaneous Forms - complete forms included in the
Attachmetns tab of the bid within lonwave.
g. The proposer shall submit a dollar cost fee in a separate file
marked "Cost Fee for Professional Auditing Services". The
separate cost file will not to be provided to the evaluation
Page 15 of 32
committee until the evaluation scoring has concluded. Only the
top ranked firm's pricing will be provided. This price will be used
as the base price for negotiations in order to expedite this
process.
B. Technical Proposal
1. General Requirements
The purpose of the Technical Proposal is to demonstrate the
qualifications, competence and capacity of the firms seeking to
undertake an independent audit of the CITY OF PEARLAND, TEXAS
in conformity with the requirements stated herein. As such, the
substance of proposals will carry more weight than their form or
manner of presentation. The Technical Proposal should
demonstrate the qualifications of the firm and of the particular staff
to be assigned to this engagement. It should also specify an audit
approach that will meet the requested requirements.
THERE SHOULD BE NO DOLLAR UNITS OR TOTAL COSTS
INCLUDED IN THE TECHNICAL PROPOSAL DOCUMENT.
The Technical Proposal should address all the points outlined in the
request for proposals (excluding any cost information, which should
only be included in the separate dollar cost fee). The Proposal
should be prepared simply and economically, providing a
straightforward, concise description of the proposer's capabilities to
satisfy the requirements. While additional data may be presented,
the following subjects, items Nos. 2 through 10, must be included.
They represent the criteria against which the proposal will be
evaluated.
2. Independence
The firm should provide an affirmative statement that it is
independent of the CITY OF PEARLAND, TEXAS as defined by the
Generally Accepted Auditing Standards and the U.S. General
Accounting Office's Government Auditing Standards (1994)]
The firm also should provide an affirmative statement that it is
independent of all of the City's component units as defined by those
same standards.
The firm should also list and describe the firm's professional
relationships involving the City or any of its component units for the
past five (5) years, together with a statement explaining why such
relationships do not constitute a conflict of interest relative to
performing the proposed audit.
Page 16 of 32
In addition, the firm shall give the City written notice of any
professional relationships entered into with the City or its component
units during the period of this agreement.
3. License to Practice in the State of Texas
An affirmative statement should be included that the firm and all
assigned key professional staff are properly licensed to practice in
the State of Texas.
4. Firm Qualifications and Experience
State the size of the firm, the size of the firm's governmental audit
staff, the location of the office from which the work on this
engagement is to be performed and the number and nature of the
professional staff to be employed in this engagement on a full-time
basis and the number and nature of the staff to be so employed on
a part-time basis.
If the proposer is a joint venture or consortium, the qualifications of
each firm comprising the joint venture or consortium should be
separately identified and the firm that is to serve as the principal
auditor should be noted, if applicable.
The firm is also required to submit a copy of the report on its most
recent external quality control review, with a statement whether that
quality control review included a review of specific government
engagements.
The firm shall also provide information on the results of any federal
or state desk reviews or field reviews of its audits during the past
three (3) years. In addition, the firm shall provide information on the
circumstances and status of any disciplinary action taken or pending
against the firm or its staff during the past three (3) years with state
regulatory bodies or professional organizations.
Describe other areas of expertise within the firm that would be
available to the City. Include the firm's ability to provide technical
support throughout the year, including assistance to the City in
interpreting and implementing new accounting standards and
regulations as well as determining their impact on the City. Also,
include any opportunities through your firm available to the City for
training or continuing professional education credits on current
issues or governmental auditing and accounting in general.
State your firm's position on responding to client inquiries — the
Page 17 of 32
average turnaround time to respond to questions or requests.
5. Partner, Supervisory and Staff Qualifications and Experience
Identify the principal supervisory and management staff, including
engagement partners, managers, other supervisors and specialists,
who would be assigned to the engagement. Indicate whether each
such person is registered or licensed to practice as a certified public
accountant in the State of Texas. Provide information on the
government auditing experience of each person, including
information on relevant continuing professional education for the
past three (3) years and membership in professional organizations
relevant to the performance of this audit.
Provide as much information as possible, including resumes,
regarding the number, qualifications, experience, and training,
including relevant continuing professional education, of the specific
staff to be assigned to this engagement. Indicate how the quality of
staff over the term of the agreement will be assured.
Engagement partners, managers, other supervisory staff and
specialists may be changed if those personnel leave the firm, are
promoted or are assigned to another office. These personnel may
also be changed for other reasons with the express prior written
permission of the City of Pearland, Texas. However, in either case,
the City retains the right to approve or reject replacements.
Consultants and firm specialists mentioned in response to this
request for proposal can only be changed with the express prior
written permission of the City, which retains the right to approve or
reject replacements.
Other audit personnel may be changed at the discretion of the
proposer if replacements have substantially the same or better
qualifications or experience. The City reserves the right to request
removal of personnel.
6. Prior Engagements with the City of Pearland, Texas
List separately all engagements within the last five years, ranked
based on total staff hours, for the City by type of engagement (i.e.,
audit, management advisory services, other). Indicate the scope of
work, date, engagement partners, total hours, the location of the
firm's office from which the engagement was performed, and the
name and telephone number of the principal client contact.
7. Similar Engagements with Other Government Entities
For the firm's office that will be assigned responsibility for the audit,
Page 18 of 32
list the most significant engagements (minimum - 5) performed in the
last five years that are similar to the engagement described in this
request (similar in size to Pearland, i.e. population, annual budget).
These engagements should be ranked based on total staff hours.
Indicate the scope of work, date, engagement partners, total hours,
and the name and telephone number of the principal client contact.
Also, indicate whether the CAFR issued in connection with the audit
was awarded the GFOA's Certificate of Achievement for Excellence
in Financial Reporting and if in compliance with GASB 34.
8. Specific Audit Approach
The proposal should set forth a work plan, including an explanation
of the audit methodology to be followed, to perform the services
required in Section II of this request.
Offerors will be required to provide the following information on their
audit approach:
a. Proposed segmentation of the engagement
b. Level of staff and number of hours to be assigned to each
proposed segment of the engagement
NO DOLLARS SHOULD BE INCLUDED IN THE TECHNI
PRnpn.gAI
C. The extent to which statistical sampling is to be used in the
engagement, including sampling methods, size and areas of
use.
d. Extent of use of EDP software in the engagement
e. Type and extent of analytical procedures to be used in the
engagement
f. Approach to be taken to gain and document an understanding
of the City's internal control structure
g. Approach to be taken in determining laws and regulations that
will be subject to audit test work
h. Approach to be taken in drawing audit samples for purposes
of tests of compliance
List of standard schedules required to be prepared by client
Page 19 of 32
9. Identification of Anticipated Potential Audit Problems
The proposal should identify and describe any anticipated potential
audit problems, and the adoption of new laws or accounting audit
principles that might affect the audit, the firm's approach to
addressing these problems and any special assistance that will be
requested from the City.
10. Report Format
Include sample formats for required reports — examples of similar
clients' CAFRs.
NO DOLLARS SHOULD BE INCLUDED IN THE TECHNICAL
PROPOSAL
C. Sealed Dollar Cost Proposal
1. Total All -Inclusive Maximum Price
The sealed dollar cost fee should contain all pricing information
relative to performing the audit engagement as described in this
request. The total all-inclusive maximum price proposed is to contain
all direct and indirect costs including all out-of-pocket expenses.
The City will not be responsible for expenses incurred in preparing
and submitting the technical proposal or the sealed dollar cost fee.
The first page of the sealed dollar cost fee should include the
following information:
a. Name of Firm
b. Certification that the person signing the proposal is entitled to
represent the firm, empowered to submit, and authorized to
sign a contract with the City.
C. A total, all-inclusive maximum price for the Fiscal Year 2020
engagement and a total -cost proposal for each of the
subsequent six (6) years, though will be negotiated annually.
2. Rates by Partner, Specialist, Supervisory and Staff Level Times
Hours Anticipated for Each.
The second page of the sealed dollar cost fee should include a
schedule of professional fees and expenses, presented in the format
provided in the attachment (Appendix E) that supports the total all-
inclusive maximum price.
Page 20 of 32
3. Rates for Additional Professional Services
If it should become necessary for the City to request the auditor to
perform additional work as a result of the specific recommendations
included in any report issued on this engagement, then such
additional work shall be performed only if set forth in an additional
contract between City of Pearland and the firm. Any such additional
work agreed to by the City and the firm shall be performed at the
same rates set forth in the schedule of fees and expenses included
in the sealed dollar cost fee.
4. Manner of Payment
Progress payments will be made based on hours of work completed
during the course of the engagement and out-of-pocket expenses
incurred in accordance with the firm's, dollar cost fee proposal. The
invoice shall provide detail, including number of hours completed per
individual and billing rate. Interim billing shall cover a period of not
less than a calendar month. Ten percent (10%) will be withheld from
each billing pending delivery of the firm's final report. Final payment
will not be made until completion and acceptance of audit.
5. If the audit scope should need to be broadened, the auditor must
communicate the existence of such circumstances to the Director of
Finance and Assistant prior to performing work that will result in such
fees exceeding the initial amounts.
VII. EVALUATION PROCEDURES
A. Audit Selection Team
Qualification statements with proposals submitted will be evaluated by
appropriate City staff to include but not be limited to the Controller, Assistant
Director, and Director of Finance, with a recommendation to be made to
City Management and the Audit Committee.
B. Review of Proposals
A point formula will be used during the review process to score. Each City
staff reviewer will first score each technical proposal by each of the criteria
described in Section VII C below. The staff reviewers will then meet to
review and discuss these evaluations and combine the individual scores to
arrive at a composite technical score for each firm. At that point, the City
may elect to bring in the top 2 or 3 firms for presentation and interview.
Interview scores will be separate from statement of qualifications and
proposal.
Page 21 of 32
Staff will then present recommendation to Management and the Audit
Committee for final review and consideration.
The CITY OF PEARLAND, TEXAS reserves the right to retain all submittals
and use any idea regardless of whether that submittal is selected.
C. Evaluation Criteria
Two sets of criteria will be evaluated. Firms meeting the mandatory criteria
will be evaluated and scored for technical qualifications. Firms that do not
meet all the mandatory elements may not be considered further. The
following represent the principal selection criteria, which will be considered
during the evaluation process.
Mandatory Elements
a. The audit firm is independent and licensed to practice in the State
of Texas.
b. The firm has no conflict of interest with regard to any other work
performed by the firm for the City of Pearland.
c. The audit firm's professional personnel have received adequate
continuing professional education within the preceding two (2)
years to meet the Government Audit Standards.
d. The firm has prepared two or more CAFRs under GASB
Statement 34, which have received the GFOA's Certificate of
Achievement for Excellence in Financial Reporting in each of the
past 2 years.
e. The firm follows all instructions in this request for proposal
on preparing and submitting the proposal.
f. The firm submits a copy of its last external quality control review
report demonstrating a record of quality audit work.
2. Technical Qualifications: (Maximum Points - 100)
a. Expertise and Experience - 55
The firm's experience and performance on comparable
municipal government engagements (size & complexity)
-15
Technical experience and firm's professional
qualification of the personnel to be assigned to the
engagement and the quality of the firm's management
Page 22 of 32
support personnel to be available for technical
consultation - 10
iii. Experience with similar federal and state grant programs
and performance of Single Audits and tests of
compliance with laws and regulations - 10
iv. Experience with the GFOA Certificate of Achievement for
Excellence in Financial Reporting Program - 10
V. The firm's ability to perform additional services and
provide technical support throughout the year, including
assistance to the City in interpreting and implementing
new accounting standards and regulations as well as
determining their impact on the City. Also, any
opportunities available to provide training and CPE
credits on current issues or governmental auditing and
accounting in general. - 10
b. Audit Approach - 45
Comprehensiveness of audit work plan - 10
ii. Adequacy of proposed staffing plan for various
segments of the engagement, including timeline and
ability to meet due dates - 10
iii. Adequacy of sampling techniques & analytical procedures
-10
iv. Adequacy of study and evaluation of internal accounting
and administrative controls. - 10
V. Adequacy of audit plan for electronic data processing
function — 5
D. Oral Presentations/Interviews
During the evaluation process, the City may, at its discretion, request any one
or all firms to make oral presentations. Such presentations will provide firms
with an opportunity to answer any questions the City may have on a firm's
proposal. Not all firms may be asked to make such oral presentations.
E. Final Selection
The City Council will select a firm based upon the recommendation of staff
and the Audit Committee.
Page 23 of 32
It is anticipated that a firm will be selected by July 13, 2020. Following
notification of the firm selected, it is expected a contract will be executed
between both parties shortly thereafter.
F. Right to Reject Proposals
Submission indicates acceptance by the firm of the conditions contained in
this request for qualifications unless clearly and specifically noted in the
submitted documents and confirmed in the contract between the CITY OF
PEARLAND, TEXAS and the firm selected.
The CITY OF PEARLAND, TEXAS reserves the right without prejudice to
reject any or all proposals.
Page 24 of 32
APPENDICES
A. Organizational Chart
B. List of City Officials and Key Personnel
C. Proposer Guarantees
D. Proposer Warranties
E. Format for Schedule of Professional Fees and Expenses to Support the
Total All-inclusive Maximum Price
F. Financial Assistance Grants, Current and Applied For
Page 25 of 32
City of Pearland, Texas
Organizational Chart
Pearland
Economic
Development
Corporation
APPENDIX A
CommunicationsIff Municipal Court
Convention & Parks & Recreation
Visitors Bureau
Finance &
Utility Billing
Police
Organizational chart of departments and selected operation groups for illustrative purposes
Strategic Priorities
• Sustainable Infrastructure
• Fiscally Responsible
Government
• Healthy Local Economy
• Engaged Community
• Safe Community
• Quality Parks, Recreation,
& Events
Page 26 of 32
APPENDIX R
LIST OF CITY OFFICIALS AND KEY PERSONNEL
Elected Officials
Tom Reid
J. David Little
Luke Orlando
Tony Carbone
Gary Moore
Adrian Hernandez
Trent Perez
Wood Owens
Clay Pearson
Jon Branson
Trent Epperson
Darrin Coker
Cynthia Pearson
Matt Buchanan
Letitia Farnie
Clarence Wittwer
Crystal Roan
Michelle Graham
Johnny Spires
Christopher Orlea
Vance Riley
John McDonald
Robert Upton
Vacant
Joshua Lee
Jennifer Huhn
Mayor
Mayor Pro Tem
Councilmember Position Number 1
Councilmember Position Number 2
Councilmember Position Number 3
Councilmember Position Number 4
Councilmember Position Number 5
Councilmember Position Number 7
City Management
City Manager
Deputy City Manager
Assistant City Manager
City Attorney
Director of Finance
President, P.E.D.C.
Municipal Court Judge
Director of Public Works
City Secretary
Director of Human Resources
Police Chief
Director of Parks & Recreation
Fire Chief
Director of Community Development
Director of Engineering and Capital Projects
Executive Director, CVB
Director of Communications
Municipal Court Administrator
Page 27 of 32
APPENDIX C
GUARANTEES — PROFESSIONAL AUDIT SERVICES, RFQ # 0520-39
The proposer certifies it can and will provide and make available, at a minimum,
all services set forth in Section II, Nature of Services Required.
Signature of Official:
Name (typed):
Title:
Firm:
Date:
Page 28 of 32
APPENDIX D
WARRANTIES — PROFESSIONAL AUDIT SERVICES, RFQ # 0520-39
A. Proposer warrants that it is willing and able to comply with State of Texas laws.
B. Proposer warrants that it has or is willing and able to obtain an errors and
omissions insurance policy providing a prudent amount of coverage for the willful
or negligent acts, or omissions of any officers, employees or agents thereof.
C. Proposer warrants that it will not delegate or subcontract its responsibilities under
an agreement without the prior written permission of the CITY OF SUGAR LAND,
TEXAS.
D. Proposer warrants that all information provided by it in connection with this
proposal is true and accurate.
Signature of Official:
Name (typed):
Title:
Firm:
Date:
Page 29 of 32
APPENDIX E
Page 1
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THE FISCAL YEAR 2020 FINANCIAL STATEMENTS
Standard Quoted
Hourly Hourly
Hours Rates Rates Total
Partners
Managers
Supervisory Staff
Staff
Other (specify):
Subtotal
Total for Services
Out-of-pocket expenses:
Other (specify):
Total all-inclusive maximum price for the Fiscal Year 2020 audit
Please provide estimate of fees for the following 6 years.
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
Note: The rate quoted should not be presented as a general percentage of the
standard hourly rate or as a gross deduction from the total all-inclusive maximum price.
Page 30 of 32
MEW=1011Ed=
Page 2
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THE FISCAL YEAR 2020 FINANCIAL STATEMENTS:
SUPPORTING SCHEDULE FOR SINGLE AUDIT
Standard Quoted
Hourly Hourly
Hours Rates Rates Total
Partners
Managers
Supervisory Staff
Staff
Other (specify):
Subtotal
Out-of-pocket expenses:
Other (specify):
Total price for SINGLE AUDIT:
Please provide estimate of fees for the following 6 years.
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
SUBMIT AS A SEPARATE DOCUMENT FROM THE TECHNICAL STATEMENT
Page 31
APPENDIX F
FINANCIAL ASSISTANCE
For the year ended September 30, 2019
Federal Pass -Through
CFDA Entity Identifying Federal
Federal Grantor/Pass-Through Grantor/Program Title Number Number Expenditures
U.S. Department of Housing and Urban Development
Direct:
CDBG - Entitlement Grants Cluster:
Community Development Block Grant 2018
14.218
B -18 -MC -48-0400 $ 138,314
Total CDBG - Entitlement Grants Cluster
138,314
Total U.S. Department of Housing and Urban Development
138,314
U.S. Department of Health and Human Services
Direct:
Office of National Drug Control Policy (ONDCP)
Organized Crime Drug Enforcement Task Force
93.276
N/A 7,278
Total U.S. Department of Health and Human Services
7,278
U.S. Department of Justice
Passed -through Texas Office of the Governor
Victims of Crime Act
16.575
23623-07 114,062
Total U.S. Department of Justice
114,062
U.S. Department of Transportation
Passed -through the Texas Department of Transportation:
Highway Planning and Construction Cluster.
Mykawa Road
20.205
CSJ - 0912-00-543 283,759
Hughes Ranch Road
20.205
CSJ - 0912-31-311 2,051,361
Green Tee Trail
20.205
CSJ - 0912-31-291 55,290
Shadow Creek Ranch
20.205
CSJ - 0912-31-292 61,764
Max Road
20.205
CSJ - 0912-31-273 792,856
Fite Road
20.205
CSJ - 0912-31-272 112,247
Total Highway Planning and Construction Cluster
3,357,277
Total U.S. Department of Transportation
3,357,277
U.S. Environmental Protection Agency
Passed through Texas Water Development Board:
Drinking Water State Revolving Fund Cluster:
Drinking Water State Revolving Fund
66.468
L1000612 4,163,824
Drinking Water State Revolving Loan Fund
66.468
L1000612 4,677,829
Total Drinking Water State Revolving Fund Cluster
8,841,653
Total U.S. Environmental Protection Agency
8,841,653
U.S. Executive Office of the President
Direct:
High -Intensity Drug Trafficking Area (HID TA)
95.001
N/A 16,241
Total U.S. Executive Office of the President
16,241
U.S. Department of Homeland Security
Passed through Texas Department of Public Safety - Division of Emergency Management:
Disaster Grants - Public Assistance (Presidentially Declared Disasters):
Hurricane Harvey Debris Removal- DR -TX -4332 (FEMA Category A)
97.036
039-56348-00 1,347,687
NDRI FEMA Fire Study
97.036
NtA 3,223
Total Disaster Grants - Public Assistance (Presidentially Declared Disasters)
1,350,910
Emergency Management Performance Grants
97.042
EMT -2019 -EP -0005 39,402
Total U.S. Department of Homeland Security
1,390,312
Total Expenditures of Federal Awards
$ 13,865,137
City will also receive TXDOT monies in 2020, 2021 and 2022 for roadwork projects.
Page 32
May 28, 2020
City of Pearland
3519 Liberty Drive
Pearland, Texas 77581
Tel: 281.652.1600
pearlandtx.gov
To All Prospective Respondents
RE: Bid # 0520-39
ADDENDUM NO. 1 — RFQ Audit Services
Specification Changes/Additional Documents:
1. Page 3: Strike. through VI.A.1. "Pre -proposal Conference" as there is not one scheduled.
2. Added the following documents to the Attachments tab:
a. Adjusting Journal Entry Report 2019
b. SAS Comm reports for 2018 and 2019
Vendor Inquiries:
1. Is there a pre -proposal conference for this RFQ? Table of Contents, Section VI. Proposal
Requirements, A. General Requirements, 1. Pre -proposal conference references one, but
this information is not on pg. 15 of the RFQ. No.
2. Any issues or matters of disagreement with prior audit firm? None
3. Please provide a copy of the following from FY 2019 and 2018:
a. SAS Letter — Auditor's Communications with Those Charged with Governance
Included in the annual CAFR
b. Management Letter No Management letter issued for FY18 or FY19
4. How many journal entries were proposed by the audit firm for each of the last two years?
FY 2018 — 24 JEs
FY 2019 — 23 JEs
This includes JEs prepared by the city that were entered after the trial balance was sent
to the auditors.
Page 1 of 5
5. Do you know approximately how many hours the auditors spent in the field for planning,
single audit, and year-end fieldwork (or how many weeks and how many staff)?
Hours are not known.
Interim audit is scheduled for two weeks in the field with approximately 4-6 members of
the audit team on site at various times. Year-end field work is also scheduled for two
weeks with 3-4 members of the audit team on site at various times.
6. What are the audit fees for the past two years?
FY 2018 $80,140
FY 2019 $80,135
7. Describe the City's assessment and readiness for the adoption of GASB Statement No.
84 (Fiduciary Reporting) and 87 (Leases)? Describe if management believes these
statements will have a significant impact on the City's financial statements.
Staff has attended informational sessions regarding statements 84 and 87. Management
does not believe these statements will have a significant impact on the City's financial
statements.
8. Any legal contingencies or fraud matters with significant impact to the financial
statements that have occurred subsequent to the issuance of the FY 2019 audit report?
None
9. Any new bonds or bond refundings expected for FY 2020?
New bonds issuances are planned for FY 2020. These will be funded in the summer
2020 with a potential of closings in early FY2021.
10. Any existing or expected turnover in key positions?
Recent retirement of Finance Director. An interim director has been appointed and a
search for a full-time director will commence in the Fall of 2020.
Recent hire of a new Controller.
11. Do you expect any significant changes to the City's federal or state funding sources that
could significantly impact the number of major program subject to audit in FY 2020? Any
increase in federal awards from the CARES act?
The city expects a similar level of federal and state funding sources as was reported in
FY 2018 and FY 2019.
The city received a wire in the amount of $1,274,801 on 5/21/2020 from the CARES act.
The city expects to receive the final payment of approximately $1.4 million related to
Hurricane Harvey claims in FY2020.
12. Do you expect to early implement any new GASB standards in FY 2020?
No.
Page 2 of 5
13. Could you please provide a copy of the management letter for FY19, if applicable?
See response to # 3.b.
14. How many hours were incurred by the previous audit firm?
Unknown
15. What are the total expected federal awards for FY20?
See response to item #11.
16.What is one improvement you would like to see in the audit process?
No suggestions
17.Why is the City switching? The current contract term will be expiring in July. Were there
any issues with the completion of the audit or with auditor findings? No
18. How many audit entries were proposed in the last audit completed?
See response to item #4.
19. Have there been any management letter findings issued in the last two years?
No
20. What time of year is the audit work typically completed by the prior auditor? What time
frames are preferred?
Audit work is typically completed by the prior auditor in February/March. Field work is
typically completed in December.
Management would like an earlier issued report and is aware of external influences that
may delay an earlier issued report. (i.e., actuarial report for OPEB)
21. Approximately how many days and how many auditors were on site for the prior year
audit?
See response to item #5.
22. Is management open to an interim fieldwork visit before year end?
Yes
23. Is there any current or threatened litigation issues?
No
24. Has there been any fraud at the City in the past two years?
No
25. Has there been significant turnover in upper management in the past two years?
The Director of Finance during the past 4 years has recently retired.
Page 3 of 5
26.Are there any other unusual issues for FY2020 that were not present in FY2019 that we
should be aware of?
None
27. Were there any findings that were communicated to management? If so, please provide
a copy of the communication.
None
28. How many audit adjustments were posted in 2019? If so, please provide a copy of the
audit adjustments.
See response to item #4.
29. Why has the City elected to change auditors?
The current contract term will be expiring in July.
30. Were there any disagreements between management and the previous audit firm? If so,
what were they?
None
31. What were the 2018 & 2019 audit fees for both audits, to date?
See response to item #6.
32. Were there any excess billings from the 2018 and/or 2019 auditor for problem areas? If
so, what were they?
None
33.As compared to the prior year, what changes has the City encountered this fiscal year (if.
any)? Any major changes in management, accounting personnel, and/or staffing?
See response to item #25.
34. Will the City encounter any disciplinary actions from external agencies/entities? If so,
please describe.
None
35. What accounting software does the City use?
Tyler/New World
36. Have you changed accounting software since your last audit?
No
37. How many people did your previous audit firm bring to fieldwork?
See response to item #5.
38. How many days was your previous audit firm at your site for fieldwork?
See response to item #5.
Page 4 of 5
39. Does the City anticipate having federal expenditures in excess of $750,000 for fiscal
years ending 2020, 2021 and/or 2022? If so, how many major programs and
approximately what dollar value?
See response to item #11.
40. Have there been any addendums to the proposal since its issuance? If so — will you
please forward me a copy?
No, this is the first addendum.
41. Has a copy of the city's prior year audit report (FYE 2019) been issued and may we have
a copy emailed?
Copies of the city's annual audit reports are located on the city's web page at this
address: https://www.pearlandtx. og v/departments/finance/financial-transparency/financial-
reports
Sincerely,
Julie Blackmore
Contract Administrator
City of Pearland
Page 5 of 5
BKO
CPAs & Advisors
August 21, 2020
Honorable Mayor Tom Reid
and Members of the City Council
Mr. Clay Pearson, City Manager
Mr. Jon Branson, Deputy City Manager
Mr. John McCarter, Interim Director of Finance
City of Pearland, Texas
3519 Liberty Drive
Pearland, Texas 77581
Exhibit C
2700 Post Oak Boulevard, Suite 1500 1 Houston, TX 77056-5829
713.499.4600 1 Fax 713.499.4699 1 bkd.com
We are pleased to confirm the arrangements of our engagement and the nature of the services we
will provide to City of Pearland, Texas (the City).
ENGAGEMENT OBJECTIVES AND SCOPE
We will audit the basic financial statements of City of Pearland, Texas as of and for the year ended
September 30, 2020, and the related notes to the financial statements.
Our audit will be conducted with the objectives of:
✓ Expressing an opinion on the financial statements
✓ Issuing a report on your compliance based on the audit of your financial statements.
✓ Issuing a report on your internal control over financial reporting based on the audit of your
financial statements.
✓ Expressing an opinion on your compliance, in all material respects, with the types of compliance
requirements described in the U.S. Office of Management and Budget (OMB) Compliance
Supplement that are applicable to each of your major federal award programs.
✓ Issuing a report on your internal control over compliance based on the audit of your compliance
with the types of compliance requirements that are applicable to each of your major federal award
programs.
✓ Issuing a report on your schedule of expenditures of federal awards.
r`) PRAXITV
(�.., EnWew�rin��uun�t�OtoOaily
City of Pearland, Texas
August 21, 2020
Page 2
OUR RESPONSIBILITIES
We will conduct our audit in accordance with auditing standards generally accepted in the United
States of America (GARS), the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States and Title 2 U.S. Code
of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards (Uniform Guidance). Those standards require that
we plan and perform:
✓ The audit of the financial statements to obtain reasonable rather than absolute assurance about
whether the financial statements are free of material misstatement, whether caused by fraud or
error.
✓ The audit of compliance with the types of compliance requirements described in the OMB
Compliance Supplement applicable to each major federal award program to obtain reasonable
rather than absolute assurance about whether noncompliance having a direct and material effect
on a major federal award program occurred.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to error or fraud. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of significant accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
Because of the inherent limitations of an audit, together with the inherent limitations of internal
control, an unavoidable risk that some material misstatements or noncompliance having a direct
and material effect may not be detected exists, even though the audit is properly planned and
performed in accordance with GARS.
In making our risk assessments, we consider internal control relevant to the City's preparation and
fair presentation of the financial statements in order to design audit procedures that are appropriate
in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the
City's internal control. However, we will communicate to you in writing concerning any
significant deficiencies or material weaknesses in internal control relevant to the audit of the
financial statements that we have identified during the audit. Also, in the future, procedures could
become inadequate because of changes in conditions or deterioration in design or operation. Two
or more people may also circumvent controls, or management may override the system.
We are available to perform additional procedures with regard to fraud detection and prevention
at your request, subject to completion of our normal engagement acceptance procedures. The
actual terms and fees of such an engagement would be documented in a separate letter to be signed
by you and BKD.
City of Pearland, Texas
August 21, 2020
Page 3
Amanda Eaves, Partner, is responsible for supervising the engagement and authorizing the signing
of the report or reports.
We will issue a written report upon completion of our audit of City's financial statements. Our
report will be addressed to the Mayor and City Council of Pearland, Texas. You are responsible
to distribute our reports to other officials who have legal oversight authority or those responsible
for acting on audit findings and recommendations, and to others authorized to receive such reports.
We cannot provide assurance that an unmodified opinion will be expressed. Circumstances may
arise in which it is necessary for us to modify our opinion, add an emphasis of matter or other
matter paragraph(s), or withdraw from the engagement. If we discover conditions that may
prohibit us from issuing a standard report, we will notify you as well. In such circumstances,
further arrangements may be necessary to continue our engagement.
We will also express an opinion on whether the combining and individual fund statements and
schedules, and budgetary comparison schedules ("supplementary information") is fairly stated, in
all material respects, in relation to the financial statements as a whole.
YOUR RESPONSIBILITIES
Our audit will be conducted on the basis that management OR, where appropriate, management
and those charged with governance acknowledge and understand that they have responsibility:
1. For the preparation and fair presentation of the financial statements in accordance with
accounting principles generally accepted in the United States of America;
2. For the design, implementation and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error;
3. For identifying and ensuring compliance with the laws, regulations, contracts and
grants applicable to your activities including your federal award programs; and
4. To provide us with:
a. Access to all information of which management is aware that is relevant to the
preparation and fair presentation of the financial statements such as records,
documentation and other matters;
b. Additional information that we may request from management for the purpose
of the audit; and
c. Unrestricted access to persons within the City from whom we determine it
necessary to obtain audit evidence.
City of Pearland, Texas
August 21, 2020
Page 4
As part of our audit process, we will request from management OR, where appropriate,
management and those charged with governance written confirmation acknowledging certain
responsibilities outlined in this engagement letter and confirming:
• The availability of this information
• Certain representations made during the audits for all periods presented
The effects of any uncorrected misstatements, if any, resulting from errors or fraud
aggregated by us during the current engagement and pertaining to the latest period
presented are immaterial, both individually and in the aggregate, to the financial
statements taken as a whole
The results of our tests of compliance and internal control over financial reporting performed in
connection with our audit of the financial statements may not fully meet the reasonable needs of
report users. Management is responsible for obtaining audits, examinations, agreed-upon
procedures or other engagements that satisfy relevant legal, regulatory or contractual requirements
or fully meet other reasonable user needs.
With regard to supplementary information:
• Management is responsible for its preparation in accordance with applicable criteria
• Management will provide certain written representations regarding the supplementary
information at the conclusion of our engagement
• Management will include our report on this supplementary information in any
document that contains this supplementary information and indicates we have reported
on the supplementary information
• Management will make the supplementary information readily available to intended
users if it is not presented with the audited financial statements
OTHER SERVICES
Electronic Submission
We will also complete the auditee portion of the Form SF -SAC (Data Collection Form) through
the Federal Audit Clearinghouse. We will not make the submission on your behalf. You will
review a draft(s) of the submission prior to transmission and agree that you are solely responsible
for approving the final draft for transmission as well as for the auditee submission and certification.
City of Pearland, Texas
August 21, 2020
Page 5
We will provide you with the following nonattest services:
Preparing a draft of the Comprehensive Annual Financial Report
Preparing a draft of the supplementary information, including the schedule of
expenditures of federal awards
Preparation of adjustments from modified accrual to full accrual for government wide
financial statement presentation.
In addition, we may perform other services for you not covered by this engagement letter. You
agree to assume full responsibility for the substantive outcomes of the services described above
and for any other services that we may provide, including any findings that may result. You also
acknowledge that those services are adequate for your purposes and that you will establish and
monitor the performance of those services to ensure that they meet management's objectives. Any
and all decisions involving management responsibilities related to those services will be made by
you, and you accept full responsibility for such decisions. We understand that you will designate
a management -level individual to be responsible and accountable for overseeing the performance
of those services, and that you will have determined this individual is qualified to conduct such
oversight.
ENGAGEMENT FEES
We have estimated the time required by our engagement and agree that our audit services fee will
not exceed $73,000, which includes travel costs and an administrative fee of 4% to cover items
such as copies, postage and other delivery charges, supplies, technology -related costs such as
computer processing, software licensing, research and library databases and similar expense items.
In addition, you will be billed fees for services from other professionals, if any. The fees above
include the audit of two major federal programs in accordance with Uniform Guidance, If you
have additional major federal programs those will be billed at our standard hourly rates.
Our fees are based upon the understanding that your personnel will be available to assist us. Our
estimate of time to perform our audit assumes your personnel are available to assist us without any
substantial problems. Assistance from your personnel is expected to include:
• Preparing audit schedules to support all significant balance sheet and certain other accounts
• Responding to auditor inquiries
• Preparing audit confirmation and other letters
• Pulling selected invoices and other documents from files
• Helping to resolve any differences or exceptions noted
City of Pearland, Texas
August 21, 2020
Page 6
We will provide you with a detailed list of assistance and schedules required and the date such
assistance and schedules are to be provided before the audit begins. All schedules should be
provided in electronic form unless indicated otherwise.
Our timely completion of the audit depends on your timely and accurate schedule and analyses
preparation and on the availability of your personnel to provide other assistance. If there are
inaccuracies or delays in preparing this material, or if we experience other assistance difficulties
that add a significant amount of time to our work, our fees will increase.
Our fees do not consider additional efforts related to the SARS-CoV-2 virus and the incidence of
COVID-19 environment and the impact of accounting and auditing issues such as going concern,
other -than -temporary impairment of investments, collectability of receivables, inventory
valuation, compliance with debt agreements, modification of lease terms and additional major
programs subject to Single Audit. Such amounts will be billed based on time expended.
Our pricing for this engagement and our fee structure is based upon the expectation that our
invoices will be paid promptly. We will issue progress billings during the course of our
engagement, and payment of our invoices is due upon receipt. Interest will be charged on any
unpaid balance after 30 days at the rate of 10% per annum.
Our engagement fee does not include any time for post -engagement consultation with your
personnel or third parties, consent letters and related procedures for the use of our reports in
offering documents, inquiries from regulators or testimony or deposition regarding any subpoena.
Charges for such services will be billed separately.
Our fees may also increase if our duties or responsibilities are increased by rulemaking of any
regulatory body or any additional new accounting or auditing standards.
If our invoices for this or any other engagement you may have with BKD are not paid within 30
days, we may suspend or terminate our services for this or any other engagement. In the event our
work is suspended or terminated as a result of nonpayment, you agree we will not be responsible
for any consequences to you.
IMPLEMENTATION OF FIDUCIARY ACTIVITIES STANDARD
Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities, is effective for
fiscal years beginning after December 15, 2019, with retrospective application in the year the
update is first applied. The Statement is expected to significantly change how entities evaluate
and report fiduciary activities.
If the City would like to early adopt or begin the process of preparing for the retrospective
application of this Statement during the current year's audit, BKD can assist you with this process.
Assistance and additional time as a result of the adoption are not included within our standard
City of Pearland, Texas
August 21, 2020
Page 7
engagement fees. Our fees as a result of the adoption of the Standard will be based on time
expended and will vary based on the level of assistance and procedures required. We will need
input and assistance from the accounting department throughout the process of implementation.
IMPLEMENTATION OF NEW LEASES STANDARD
Governmental Accounting Standards Board Statement No. 87, Leases, is effective for reporting
periods beginning after June 15, 2021. Early application is encouraged.
Statement No. 87 establishes a single model for lease accounting based on the foundational
principle that leases are financings of the right to use an underlying asset. Under this Statement, a
lessee is required to recognize a lease liability and an intangible right -to -use lease asset, and a
lessor is required to recognize a lease receivable and a deferred inflow of resources. Assistance
and additional time as a result of the adoption of the Statement are not included within our standard
engagement fees. Our fees as a result of the adoption of the Statement will be based on time
expended and will vary based on the level of assistance and procedures required, which may
include but are not limited to:
• Assisting the City with the evaluation of its current controls and policies for leases and
recommended enhancements needed to implement the Statement
• Evaluating and documenting new and revised controls and policies for leases under the
Statement
• Assisting the City with the information gathering necessary to implement the Statement
• Assisting the City with the evaluation of its current method for calculating and
recognizing lease payments
• Assisting the City with documenting changes from the previous method needed to
implement the Statement
• Assistance with drafting of the required disclosures
The time it will take to perform the above assistance and our additional audit procedures relating
to the adoption of the Statement, and any time to assist you with the adoption, may be minimized
to the extent your personnel will be available to provide timely and accurate documentation and
information as requested by BKD.
OTHER ENGAGEMENT MATTERS AND LIMITATIONS
BKD is not acting as your municipal advisor under Section 15B of the Securities Exchange Act of
1934, as amended. As such, BKD is not recommending any action to you and does not owe you
a fiduciary duty with respect to any information or communications regarding municipal financial
City of Pearland, Texas
August 21, 2020
Page 8
products or the issuance of municipal securities. You should discuss such information or
communications with any and all internal or external advisors and experts you deem appropriate
before acting on any such information or material provided by BKD.
Our workpapers and documentation retained in any form of media for this engagement are the
property of BKD. We can be compelled to provide information under legal process. In addition,
we may be requested by regulatory or enforcement bodies to make certain workpapers available
to them pursuant to authority granted by law or regulation. You agree that we have no legal
responsibility to you in the event we provide such documents or information.
You agree to indemnify and hold harmless BKD and its personnel from any claims, liabilities,
costs and expenses relating to our services under this agreement attributable to false or incomplete
representations by management, except to the extent determined to have resulted from the
intentional or deliberate misconduct of BKD personnel.
You agree that any dispute regarding this engagement will, prior to resorting to litigation, be
submitted to mediation upon written request by either party. Both parties agree to try in good faith
to settle the dispute in mediation. The American Arbitration Association will administer any such
mediation in accordance with its Commercial Mediation Rules. The results of the mediation
proceeding shall be binding only if each of us agrees to be bound. We will share any costs of
mediation proceedings equally.
Either of us may terminate these services at any time. Both of us must agree, in writing, to any
future modifications or extensions. If services are terminated, you agree to pay us for time
expended to date. In addition, you will be billed travel costs and fees for services from other
professionals, if any, as well as an administrative fee of 4% to cover items such as copies, postage
and other delivery charges, supplies, technology -related costs such as computer processing,
software licensing, research and library databases and similar expense items.
If any provision of this agreement is declared invalid or unenforceable, no other provision of this
agreement is affected, and all other provisions remain in full force and effect.
This engagement letter represents the entire agreement regarding the services described herein and
supersedes all prior negotiations, proposals, representations or agreements, written or oral,
regarding these services. It shall be binding on heirs, successors and assigns of you and BKD.
We may from time to time utilize third -party service providers, e.g., domestic software processors
or legal counsel, or disclose confidential information about you to third -party service providers in
serving your account. We remain committed to maintaining the confidentiality and security of
your information. Accordingly, we maintain internal policies, procedures and safeguards to
protect the confidentiality of your information. In addition, we will secure confidentiality
agreements with all service providers to maintain the confidentiality of your information. In the
City of Pearland, Texas
August 21, 2020
Page 9
event we are unable to secure an appropriate confidentiality agreement, you will be asked to
provide your consent prior to the sharing of your confidential information with the third -party
service provider.
You agree to assume full responsibility for maintaining your original data and records and that
BKD has no responsibility to maintain this information. You agree you will not rely on BKD to
provide hosting, electronic security or backup services, e.g., business continuity or disaster
recovery services, to you unless separately engaged to do so. You understand that your access to
data, records and information from BKD's servers, i.e., BKDconnect, can be terminated at any
time and you will not rely on using this to host your data and records.
We will, at our discretion or upon your request, deliver financial or other confidential information
to you electronically via email or other mechanism. You recognize and accept the risk involved,
particularly in email delivery as the internet is not necessarily a secure medium of communication
as messages can be intercepted and read by those determined to do so.
You agree you will not modify these documents for internal use or for distribution to third parties.
You also understand that we may on occasion send you documents marked as draft and understand
that those are for your review purpose only, should not be distributed in any way and should be
destroyed as soon as possible.
The City may wish to include our report on these financial statements in an exempt offering
document. The City agrees that the aforementioned auditor's report, or reference to our firm, will
not be included in any such offering document without notifying us. Any agreement to perform
work in connection with an exempt offering document, including providing agreement for the use
of the auditor's report in the exempt offering document, will be a separate engagement.
Any exempt offering document issued by the City with which we are not involved will clearly
indicate that we are not involved by including a disclosure such as, "BKD, LLP, our independent
auditor, has not been engaged to perform and has not performed, since the date of its report
included herein, any procedures on the financial statements addressed in that report. BKD, LLP,
also has. not performed any procedures relating to this offering document."
You agree to notify us if you desire to place these financial statements or our report thereon along
with other information, such as a report by management or those charged with governance on
operations, financial summaries or highlights, financial ratios, etc., on an electronic site. You
recognize that we have no responsibility as auditors to review information contained in electronic
sites.
Any time you intend to reference our firm name in any manner in any published materials,
including on an electronic site, you agree to provide us with draft materials for our review and
approval before publishing or posting such information.
City of Pearland, Texas
August 21, 2020
Page 10
BKD is a registered limited liability partnership under Missouri law. Under applicable
professional standards, partners of BKD, LLP have the same responsibilities as do partners in a
general accounting and consulting partnership with respect to conformance by themselves and
other professionals in BKD with their professional and ethical obligations. However, unlike the
partners in a general partnership, the partners in a registered limited liability partnership do not
have individual civil liability, directly or indirectly, including by way of indemnification,
contribution, assessment or otherwise, for any debts, obligations or liabilities of or chargeable to
the registered limited liability partnership or each other, whether arising in tort, contract or
otherwise.
Government Auditing Standards require that we provide you with a copy of our most recent
external peer review report and any letter of comment, and any subsequent peer review reports and
letters of comment received during the period of the contract. Our most recent peer review report
accompanies this letter.
As required by Chapter 2270, Texas Government Code, we represent that we do not boycott Israel
and will not boycott Israel through the term of this engagement. For purposes of this
representation, "boycott Israel' means refusing to deal with, terminating business activities with
or otherwise taking any action that is intended to penalize, inflict economic harm on or limit
commercial relations specifically with Israel, or with a person or entity doing business in Israel or
in an Israeli -controlled territory, but does not include an action made for ordinary business
purposes.
Please sign and return the attached copy of this letter to indicate your acknowledgement of, and
agreement with, the arrangements for our audit of the financial statements including our respective
responsibilities. If the signed copy you return to us is in electronic form, you agree that such copy
shall be legally treated as a "duplicate original' of this agreement.
BKD, LLP
City of Pearland, Texas
August 21, 2020
Page 11
Acknowledged and agreed to on behalf of
City of Pearland, Texas
BY
Honorable Mayor Tom Reid
FIX,
W.
DATE / SL 2- Z O
8550 United Plaza Blvd., Ste. 1001 — Baton Rouge, LA 70809
IP&N225-922-4600 Phone — 225-922-4611 Fax — pncpa.com
Posttethwaite & Netterville PostletMvaite & Netterville and Associates, L.L.C.
Report on the Firm's System of Quality Control
To the Partners of
BKD, LLP
and the National Peer Review Committee
We have reviewed the system of quality control for the accounting and auditing practice of BKD, LLP (the firm)
applicable to engagements not subject to PCAOB inspection in effect for the year ended May 31, 2017. Our peer
review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established
by the Peer Review Board of the American Institute of Certified Public Accountants (Standards).
A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as
described in the Standards may be found at www.aicpa.org/prsummary. The summary also includes an explanation
of how engagements identified as not performed or reported in conformity with applicable professional standards, if
any, are evaluated by a peer reviewer to determine a peer review rating.
Firm's Responsibility
The firm is responsible for designing a system of quality control and complying with it to provide the firm with
reasonable assurance of performing and reporting in conformity with applicable professional standards in all material
respects. The firm is also responsible for evaluating actions to promptly remediate engagements deemed as not
performed or reported in conformity with professional standards, when appropriate, and for remediating weaknesses
in its system of quality control, if any.
Peer Reviewer's Responsibility
Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance
therewith based on our review.
Required Selections and Considerations
Engagements selected for review included engagements performed under Government Auditing Standards, including
compliance audits under Single Audit Act; audits of employee benefit plans, audits performed under FDICIA, an
audit of carrying broker-dealers, and examinations of service organizations [SOC 1 and SOC 2 engagements].
As part of our peer review, we considered reviews by regulatory entities as communicated to the firm, if applicable,
in determining the nature and extent of our procedures.
Opinion
In our opinion, the system of quality control for the accounting and auditing practice of BKD, LLP applicable to
engagements not subject to PCAOB inspection in effect for the year ended May 31, 2017, has been suitably designed
and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with
applicable professional standards in all material respects. Firms can receive a rating of pass, pass with
deficiency(ies) or fail. BKD, LLP has received a peer review rating of pass.
Baton Rouge, Louisiana
October 6, 2017