proposal for independent audit services - napa …...c – resume for ben leavitt, cpa, cfe d –...

Proposal for Independent Audit Services

Napa Valley Community College District Napa, California

For the Fiscal Year Ending June 30, 2014

Submitted on February 18, 2014 by:

John Dominguez, CPA, CFE, CGMA

CWDL, Certified Public Accountants

Corporate Office 5151 Murphy Canyon Road

Suite 135 San Diego, California 92123

Contact Person: John Dominguez, CPA, CFE, CGMA E-Mail: [email protected]

www.cwdlcpa.com Telephone: 858-565-2700

Fax: 858-764-2861

TABLE OF CONTENTS

COVER LETTER ..................................................................................................................................................................................... 1 1. PROFILE

1.1 Location and Overview ................................................................................................................................................. 3 1.2 Range of Activities .......................................................................................................................................................... 3 1.3 Size and Structure of Organization .......................................................................................................................... 4

2. EXPERIENCE 2.1 Specialized Experience .................................................................................................................................................. 5 2.2 List of Assigned Staff ..................................................................................................................................................... 6 2.3 Resumes and Experience of Assigned Staff .......................................................................................................... 6 2.4 Assistance with Financial Statement Preparation & Upcoming Pronouncements ............................... 9

3. ASSURANCES 3.1 Assignment of a Certified Public Accountant .................................................................................................... 10 3.2 Anticipated Calendar of the Work to be Performed ....................................................................................... 10

4. ALL-INCLUSIVE AUDIT FEE

4.1 Schedule of Budgeted Audit Hours ....................................................................................................................... 11 4.2 All-Inclusive Audit Fee Schedule ............................................................................................................................ 12

ATTACHMENTS: A – Peer Review Report B – Resume for John Dominguez, CPA, CFE, CGMA C – Resume for Ben Leavitt, CPA, CFE D – Engagement Letter

COVER LETTER

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February 18, 2014 Napa Valley Community College District Glenna Aguada, Director of Fiscal Services 2277 Napa-Vallejo Highway Napa, CA 94558 Dear Ms. Aguada: CWDL, Certified Public Accountants (“CWDL CPAs”) is pleased to provide a proposal to the Napa Valley Community College District (the “District”) for the annual independent audits of the Napa Valley College District, the Napa Valley College Foundation and the Napa Valley College District Auxiliary Services Foundation for the fiscal year ending June 30, 2014. CWDL CPAs is a regional California CPA firm with 10 professional staff. Our dedicated Local Educational Agency (LEA) audit team is led by partners with extensive K-14 experience and a commitment to proactive communications and the importance of deadlines. Our unique approach and industry specialization enable us to provide the highest quality service while having a minimal impact on District staff. The Partners at CWDL CPAs have led the audits of over 10 community college districts, 50 school districts, 30 Proposition 39 bonds plus over 20 nonprofit organizations. In addition, we have audited the San Diego County Treasurer’s Investment Pool and other municipal entities. We offer the District our expertise in California educational finance. Your engagement team will consist of at least three Certified Public Accountants, two of whom also hold a Certified Fraud Examiner (CFE) credential, which is a level of experience and expertise that sets CWDL CPAs apart. We look forward to the opportunity to discuss our unique approach and establish a long lasting relationship with the Napa Valley Community College District. CWDL CPAs Partners have considerable experience auditing and consulting with LEAs similar to the District. A small sampling of similar K-14 engagements that our partners have managed include:

Sample of Similar Engagements Managed

Audit Services

Enrollment

San Diego CCD District, 2 Prop 39 Bonds, 4 Foundations 131,000 Ohlone CCD District, Prop 39 Bond, Foundation 18,000 Merced CCD District, Prop 39 Bond, Foundation 11,000 Grossmont-Cuyamaca CCD District, Aux Org, Foundation 27,000 Palomar CCD District and Prop 39 Bond 25,000 Cerritos CCD District, 2 Prop 39 Bonds, Foundation 23,500 South Orange County CCD District, 4 Foundations, Retirement Plan 40,000 MiraCosta CCD District and Prop 39 Bond 16,000 San Bernardino CCD District, 2 Prop 39 Bonds, 2 Foundations 23,000

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I have a great deal of interest and commitment to providing excellent auditing services to the District. You can expect that as one of the Partners assigned I would personally be on-site at the District throughout the duration of the audit. I will be joined by Ben Leavitt, CPA, CFE, Joseph Tarantino, CPA and other trained staff auditors, all experienced in California LEA audits. CWDL CPAs is committed to constant communication throughout the engagement to ensure that all requirements and timelines are met. If selected to perform the audit, CWDL CPAs would hold a pre-audit meeting with District staff to set specific work plans and dates all aspects of the audit. CWDL CPAs agrees to enter into a contract under the terms and conditions as prescribed in Attachment D. After reading through our proposal, if you have any questions, please feel free to contact me at (858) 565-2700. I would be happy to meet with District management to discuss further. Sincerely, John Dominguez, CPA, CFE, CGMA Partner CWDL CPAs

1. PROFILE OF CWDL CPAS

Proposal for Independent Audit for Napa Valley Community College District

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1. PROFILE OF CWDL CPAS 1.1 LOCATION AND OVERVIEW:

San Diego Corporate Office 5151 Murphy Canyon Road

Suite 135 San Diego, CA 92123

Telephone: Fax:

(858) 565-2700 (858) 565-7399

CWDL CPAs is a regional firm that serves clients throughout California and Arizona. Due to our specialty in K-14 education audits and related entities we routinely travel throughout California to serve our clients. Our extensive experience allows us to provide an all-inclusive fee (i.e., travel, per diem, etc.) that you will find is extremely competitive. In many cases our fees can be lower than our competitors, while at the same time the level of service and experience we staff our jobs with far exceeds that offered by other firms. 1.2 RANGE OF ACTIVITIES CWDL CPAs is a full service CPA firm offering audit, tax and consulting services. We have two partners who specialize in Local Educational Agency (LEA) audits, which comprise 90% of our governmental audit practice. We also work with non-profit organizations in the area of tax, audit and accounting services. Our firm also offers a diverse array of private industry services including assurance, tax and business management services to clients ranging from startup companies to middle-market private companies, and individuals. Our dedicated governmental team audits LEAs year-round which means we are flexible in scheduling and are always responsive to client needs. Our LEA partners provide direct cell phone numbers to all clients, and pride themselves on being available 24/7 for any client need. In addition, we have two Certified Fraud Examiners on staff who are LEA audit experts. Our CFEs regularly assist our audit clients with forensic services should the need arise. An expert who understands the operations of your District, and is also CFE adds even more to the value that our firm brings to your District. As members of the Government Finance Officers’ Association, we are well versed and trained in the preparation of the Comprehensive Annual Financial Report (CAFR) should the district decide to participate in their Financial Reporting Excellence program. Included in our fee is the annual assistance we provide with GASB 34 conversion entries and reporting. We provide assistance with preparation of the financial statements, and completion of the full annual report.


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1.3 SIZE AND STRUCTURE OF ORGANIZATION CWDL CPAs is a public accountancy corporation that employs 10 professional staff, including 4 partners. Equal Opportunity Employer CWDL CPAs is an equal opportunity employer and always maintains compliance with the Civil Rights Act of 1964. We do not discriminate based on race, ethnicity, age or religion, and are in compliance with all applicable Federal and State laws and regulations relating to equal opportunity employment. Indemnity CWDL CPAs has errors and omissions insurance, property and liability and workers’ compensation insurance and will indemnify and hold harmless the District from and against all losses and claims in the execution of our work or the consequences of any negligence or carelessness on our part. We carry a minimum of $2,000,000 in professional liability insurance. A Certificate of Insurance will be provided if we are selected to perform services for the District. Peer Review Participation As a new partnership, CWDL CPAs has not yet been subject to peer review. However, the general partner of our firm, Mark Wilson CPAs, underwent peer review in September 2013. We are proud to report that the opinion is Pass, the best opinion that a firm can receive. Please see attachment A. Sample Contract Included as Attachment D is a sample of the contract that will be executed for the 2013-2014 audit. Document Retention Policy We will maintain working papers for a minimum of five years. All working papers will be made available upon request from any individuals designated by the agency.

2. EXPERIENCE OF CWDL CPAS


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2. EXPERIENCE OF CWDL CPAS 2.1 SPECIALIZED EXPERIENCE The Partners of CWDL CPAs have extensive experience in K-14 Local Education Agency (LEA) audits. We work hard to ensure that audit reports are submitted in advance of deadlines and ultimately accepted by the client and oversight agencies, including the Office of the State Controller, the California Department of Education and the County office of Education, where applicable. Below is a sample list of the LEA clients our Partners have worked on in either the capacity of Partner or In-charge.

Alameda Unified* Nubia Leadership AcademyAlhambra Unified* Oakland-Alameda Regional Occupational ProgramAnaheim City Elementary Oceanside UnifiedBuena Park Elementary Ohlone Community College District*Centinela Valley Union High* Orange UnifiedCerritos Community College District* Palmdale ElementaryContra Costa County Office of Education Palo Alto Unified*Culver City Unified Palomar Community College District*El Segundo Unified Pittsburg UnifiedEncinitas Union Elementary Poway Unified*Escondido Union High* Redondo Beach Unified*Grossmont Union High School District* San Bernardino Community College District*Grossmont-Cuyamaca Community College District San Diego Community College District*Inglewood Unified* San Diego Unified*Julian Union High San Marcos Unified*La Mesa-Spring Valley Elementary* San Marino UnifiedLennox Elementary Santa Monica-Malibu Unified*Lynwood Unified South Orange County Community College DistrictMagnolia Elementary* South Pasadena Unified*Merced Community College District* South San Francisco UnifiedMiraCosta Community College District Sweetwater Union High*Napa Valley Community College District* Wiseburn Elementary

*Indicates that the engagement includes financial and performance audits of Proposition 39 bonds

Sample of Clients Served by Partners of CWDL CPAs


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2.2 LIST OF ASSIGNED STAFF Partner John Dominguez will be the in-field partner for the audit. Partner Ben Leavitt will serve as the in-field manager on the audit and, along with Mr. Dominguez, will actively perform and oversee all aspects of the engagement. Mr. Dominguez and/or Mr. Leavitt will meet with district administrators; the audit committee, governing board and provide technical advice to the District at any time. Partner Mark Wilson, CPA will serve as the concur/review partner and will monitor and review the audit work performed to ensure adherence to applicable governmental auditing standards. Director Douglas Wilson, CPA will serve as the quality control director on all audits. Mr. Wilson will oversee the preparation of the financial statements in accordance with all applicable reporting standards. All partners, managers, and supervisors assigned to the audit have a minimum of three years of experience performing audits of local education agencies similar to Napa Valley Community College District. The following table lists the names of firm auditing personnel assigned to the audit:

Name Classification Audit RoleJohn Dominguez, CPA, CFE, CGMA Partner In-Field Partner - District and FoundationsBen Leavitt, CPA, CFE Partner In-Field Manager - District and FoundationsDouglas Wilson, CPA QC Partner Quality Control PartnerMark Wilson, CPA Partner Concur/Review Partner - District Audit and TaxJoseph Tarantino, CPA Manager Supervisor on District AuditMeryl Green Staff Accountant Staff Auditor

2.3 RESUMES AND EXPERIENCE OF ASSIGNED STAFF Abbreviated and full resumes for our key management and team members follow: Audit Partner John Dominguez, CPA, CFE, CGMA brings over ten (10) years of accounting and audit experience to CWDL CPA’s including eight (8) years of school district audit experience. Mr. Dominguez specializes in community colleges and K-12 school districts, and leads the LEA audit division of our firm. Mr. Dominguez draws upon his diverse experience having conducted engagements through California and Arizona, including: Pleasanton Unified School District, La Mesa-Spring Valley School District, Pittsburg Unified School District, Napa Community College, Palomar CCD and Grossmont-Cuyamaca CCD over the past five (5) years. Previously, Mr. Dominguez participated in the audits of Chandler Unified School District, Phoenix Elementary School District, Arizona Western College and Mohave County Community College District among many others. As part of the audits, Mr. Dominguez performed all aspects of the engagement including audit planning, field work, financial statement preparation, and presentations.


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2.3 RESUMES AND EXPERIENCE OF ASSIGNED STAFF, CONTINUED Prior to joining CWDL CPA’s, Mr. Dominguez worked for regional CPA firms in California and Arizona, specializing in school districts and city governments. As a certified public accountant, Mr. Dominguez has received over eighty (80) hours of Continuing Education (CE) in the past two years, including at least twenty-four (24) hours that focus on accounting and auditing and eight (8) hours of fraud (CE). In particular, Mr. Dominguez has received over fifty (50) hours of continuing education specific to California school finance during the past two years. This includes in-house training, conferences and seminars of the California Association of School Business Officials, Association of Chief Business Officials, San Diego County Treasury, American Institute of Certified Public Accountants, and Government Finance Officers Association. Mr. Dominguez received a Bachelor of Science in Business Administration-Accountancy from San Diego State University. A full resume for John Dominguez is provided as Attachment B. Audit Partner Ben Leavitt, CPA, CFE specializes in in auditing governmental agencies and nonprofits. His six (6) years of audit experience has particularly focused on A-133 single audits, community colleges, K-12 school districts and proposition 39 bond audits as well as fraud audits and forensic investigations. Mr. Leavitt regularly attends updates and seminars organized by the Chancellor’s Office, the California Department of Education, the Association of Chief Business Officials and others to stay current on new and upcoming changes to state and federal compliance regulations. He has provided audit and forensic consulting services ranging from routine financial audits to implementations of new accounting pronouncements, attendance recapture, organizational internal control analysis, and fixed asset accounting, and presented at workshops for the California Society of Municipal Finance Officers, and the California Municipal Treasurer’s Association, among others. As a certified public accountant, Mr. Leavitt has received over eighty (80) hours of Continuing Education (CE) in the past two years, including at least twenty-four (24) hours that focus on accounting and auditing and eight (8) hours of fraud (CE). In particular Mr. Leavitt has received over fifty (50) hours of continuing education specific to California school finance during the past two years. This includes in-house training, conferences and seminars of the California Association of School Business Officials, Association of Chief Business Officials, San Diego County Treasury, American Institute of Certified Public Accountants, and Government Finance Officers Association. Mr. Leavitt received a Bachelor of Science in Business Administration-Accountancy from California State University San Marcos. A full resume for Ben Leavitt is provided on as Attachment C Concur/Review Partner Mark Wilson, CPA has over nineteen (19) years of experience serving private and public corporations as well as nonprofits and governmental agencies. He has alternatively served as the CFO and CEO of several successful financial service companies and currently leads the audit and management consulting practices of CWDL CPAs. Mr. Wilson is known as an expert in the audit industry. He has recently completed his peer review and is pleased to report the best result possible, a “Pass”. As a certified public accountant, Mr. Wilson has received over eighty (80) hours of Continuing Education (CE) in the past two years, including at least twenty-four (24) hours that focus on accounting and auditing and eight (8) hours of fraud (CE). He enjoys his relationships with his clients and thrives on learning from and sharing best practices with them.


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2.3 RESUMES AND EXPERIENCE OF ASSIGNED STAFF, CONTINUED Quality Control Director Douglas Wilson, CPA brings over twenty-five (25) years of governmental accounting experience to CWDL CPAs, stemming from his extensive service in key roles such as CFO, CEO and board member at various governmental agencies, authorities and special districts throughout Southern California. He is particularly well versed in governmental accounting standards and regularly advises on implementation of new GASB pronouncements. Mr. Wilson serves on the engagement and review committee for CWDL CPAs. In that capacity, he helps ensure high standards of quality control and provides guidance for the firm. Throughout his diverse career Mr. Wilson has obtained invaluable experience that he enjoys sharing with clients. In addition to his extensive governmental experience he was the Vice President in-charge of a local San Diego Country Club, the Fanita Ranch development and was a partner in a locally owned CPA firm. As a certified public accountant, Mr. Wilson has received over eighty (80) hours of Continuing Education (CE) in the past two years, including at least twenty-four (24) hours that focus on accounting and auditing and eight (8) hours of fraud (CE). In particular, Mr. Wilson has received over 50 hours of continuing education specific to governmental entities during the past two years. He is a veteran of the United States Air Force and proudly served his country in Vietnam. Audit Manager Joseph Tarantino, CPA began his auditing career with a midsized CPA firm practicing in the state of Arizona, participating in audits of LEAs, municipal entities, and non-profits. He moved to an auditor position at a regional California firm that also specialized in school district, charter school, county office of education, and non-profit audits throughout the state of California. Mr. Tarantino also has experience as a school District employee specializing in internal accounting and categorical program compliance. Mr. Tarantino brings over six (6) years of school district audit experience to CWDL CPAs. His vast array of knowledge and expertise on California educational issues makes Mr. Tarantino an invaluable asset to all of his clients. Mr. Tarantino regularly attends governmental accounting and school finance conferences, programs conducted by the California Society of CPAs and conferences of the California Association of School Business Officials (CASBO). As a certified public accountant, Mr. Tarantino has received over eighty (80) hours of Continuing Education (CE) in the past two years, including at least twenty-four (24) hours that focus on accounting and auditing and eight (8) hours of fraud (CE). He is a participant in the CASBO CBO Certification program and regularly offers his expertise in training sessions for audit staff members. Mr. Tarantino is a member of the American Institute of Certified Public Accountants, and the California Society of Certified Public Accountants. Audit Senior Meryl Green graduated from San Diego State University with a Bachelor of Science in Business Administration, option Accountancy. Accounting is in her DNA. Her grandfather, father, mother and sister are all CPAs. Ms. Green began her accounting career at M. Green & Company and is currently waiting to receive her CPA license with all parts passed. Ms. Green has two (2) years of school district audit experience. She has served as an engagement team member on numerous LEA audits including the audits of Tulare Joint Union High School District, Hanford Joint Union High School District, Tipton Community School District, Woodlake Unified School District, and Dinuba Unified School District.


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2.4 ASSISTANCE WITH FINANCIAL STATEMENT PREPARATION & UPCOMING PRONOUNCEMENTS The partners, managers and in-charges at CWDL CPAs are thoroughly knowledgeable about GASB 35 and the financial statement preparation of community college districts. Our partners and managers have assisted all of their community college audit clients, as part of the standard engagement (included in the all-inclusive fee) with: GASB 35 conversion entries Review and assistance of the capital asset schedules Review and assistance with the preparation of the Long-Term Debt schedules and conversion

entries Preparation of the Management Discussion and Analysis based upon the final audited figures Compilation of the final financial statements and printed of final bound deliverable reports

CWDL CPAs is well versed in all GASB standards applicable to our clients. Each year we discuss new standards with our clients and help develop a roadmap for implementation that is unique to each District. We always perform this help without any additional fees. As part of our assistance and guidance on upcoming standards, our Partners regularly email clients with helpful information on future accounting and auditing pronouncements, or changes in state and federal compliance requirements. One current topic that we have been regularly advising clients on is the upcoming changes to pension standards, specifically their impact on the California State Teachers’ Retirement System. These GASB Statements include:

Statement 67, Financial Reporting for Pension Plans, effective in fiscal year 2013-14 Statement 68, Accounting and Reporting for Pensions, effective in fiscal year 2014-15

Under the new standards, either the state or school employers along with individual educational entities may be required to carry their proportionate share of CalSTRS’ unfunded liability as a liability for accounting purposes on their books. We are communicating with our clients now, so that they can begin discussion with their stakeholders and show that they are on top of pending issues.

3. ASSURANCES OF CWDL CPAS


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3. ASSURANCES OF CWDL CPAS 3.1 ASSIGNMENT OF A CERTIFIED PUBLIC ACCOUNTANT CWDL CPA’s certifies that we will assign a California licensed certified public accountant as the auditor in charge for each district audit. We also certify that the firm meets the professional independence standards to perform attestation services on behalf of the Napa Valley Community College District. 3.2 ANTICIPATED CALENDAR OF THE WORK TO BE PERFORMED We plan to accomplish approximately half of the audit in the interim phase, and the remaining half at year end (i.e., substantive testing of account balances, preparation of supplementary information and the financial statements). Dividing our work this way allows us to thoroughly test internal controls and compliance, and provide meaningful recommendations to the District on a timely basis. We will communicate with District management throughout the audit and will inform them of progress as well as any comments or findings on a daily basis. The following is an estimate of the audit work to be conducted each month. The final schedule would be arranged based on the preference of the District.

Month Proposed WorkPercentage of

Work DoneMay Pre-Audit Conference 0.5%

May/June (1 week)Audit Planning, Test of Controls, State compliance, Federal compliance, management letter of results 50%

August/September (1 week) Year-end substantive fieldwork 40%September/October Exit conference 0.5%

NovemberReports drafted and provided to management for review by November 1st 8%

Before December 15 Distribution of final audit reports 0.5%December/January Presentation to the Board of Trustees 0.5%

4. ALL-INCLUSIVE AUDIT FEE


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4. ALL-INCLUSIVE AUDIT FEE 4.1 SCHEDULE OF BUDGETED AUDIT HOURS

Audit Work SegmentEstimated Hours of Completion Audit Work Segment

Estimated Hours of

Completion

Planning Substantive TestingPlanning 20 Accounts Payable 8 Audit Programs 6 Accounts Receivable 8 Supervision and Quality Control Review 10 Analytical Review Procedures 6 Contingencies/Subsequent Events 4 General Fund 12 Risk Assessment 16 Other Funds 8 Board Minutes 8 Cash and Investments 12 Correspondence (including Confirmations) 8 Other Revenues 10

Meetings Component Units 6 Entrance Conferences 4 State Apportionment 8 Other Meetings 10 Capital Assets 16 Internal Control Interviews 10 Inventory 2 Meetings with District Board Members 4 Net Position 4 Meetings with Foundation Board Members 4 Long-Term Debt 16

Internal Controls and Compliance Expenses 25 Internal Control Testing and Documentation 40 MOU Testing 10 State and Federal Compliance 80 Tax Preperation 30

Data Processing Review Data Processing Interviews and Documentation 2 Audit Wrap-up

Transactions Audit Reports 60 Cash Disbursements 10 Management Letter 2 Payroll 10 Federal Data Collection Report 2 Cash Receipts 10 Secretarial 24 Bid Procedures & Change Orders 4

Continued next col. Total Time (Hours) 529


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4.2 ALL-INCLUSIVE AUDIT FEE SCHEDULE

Annual District Audit Proposed Fees

Estimated BillingClassification Hours Rates 2013-14

Partner 100 150$ 15,000$ Manager 80 125 10,000 Supervisor 80 80 6,400 Senior 60 60 3,600 Clerical Assistant 20 30 600

Totals 340 35,600

Less Total Courtesy Discount to Quoted Fee (6,464) 29,136$

NVC Foundation Proposed Fees


Partner 60 150$ 9,000$ Manager 25 125 3,125 Senior 20 60 1,200 Clerical Assistant 2 30 60

Totals 107 13,385



Partner 40 150$ 6,000 Manager 40 125 5,000 Supervisor - 80 - Senior - 60 - Clerical Assistant 2 30 60

Totals 82 11,060


Total All-Inclusive Annual Fee 42,341$

Maximum Annual Fee

NVC Auxiliary Foundation Proposed Fees

Maximum Annual Fee

Maximum Annual Fee

ATTACHMENTS A – PEER REVIEW REPORT B – RESUME FOR JOHN DOMINGUEZ, CPA, CFE, CGMA C – RESUME FOR BEN LEAVITT, CPA, CFE D – ENGAGEMENT LETTER

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