HomeMy WebLinkAboutItem No. 11 - Agreement with The Pun Group, LLP for Auditing Services for the Fiscal Years End11)Agreement with The Pun Group, LLP for Auditing Services for the Fiscal Years
Ending June 30, 2023, 2024, and 2025.
Approve and authorize the City Manager to execute a professional services agreement with
an initial annual amount of $56,500, increasing by three percent (3%) annually, with The
Pun Group, LLP., to perform professional auditing services in such final form as approved
by the City Attorney.
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REPORT TO CITY COUNCIL
To:Honorable Mayor and Members of the City Council
From:Jason Simpson, City Manager
Prepared by:Shannon Buckley, Assistant City Manager
Date:April 11, 2023
Subject:Agreement with The Pun Group, LLP for Auditing Services for the Fiscal
Years Ending June 30, 2023, 2024, and 2025.
Recommendation
Approve and authorize the City Manager to execute a professional services agreement with an
initial annual amount of $56,500, increasing by three percent (3%) annually, with The Pun
Group, LLP., to perform professional auditing services in such final form as approved by the City
Attorney.
Background
On Thursday, January 19, 2023, the City posted a Request for Proposal (RFP) for professional
auditing services on Planet Bids, the City’s online bidding/RFP service. Four (4) proposals were
received and opened at 3:00 p.m. on February 20, 2023.
Discussion
The proposals were reviewed and evaluated by staff and presented to the City Treasurer,
Assistant City Manager, Finance Manager, and Finance Administrator. All four firms met the
minimum qualification requirements and were selected for presentations and interviews. Based
upon the Committee’s review, evaluation, and interviews, the team unanimously recommends
The Pun Group, LLP, Certified Public Accountants. The basis for this recommendation is as
follows:
1. The Pun Group won the Best of Accounting Award from ClearlyRated in 2023.
2. They are on CalCPA’s top 150 Firms list.
3. They are Top Ranked Orange County CPA.
4. The Pun Group’s proposal aligns with the City’s current firm.
5. They have several recommendations from other municipal clients in Riverside County.
6. Staff determined that The Pun Group’s proposed team of professionals can meet deadlines,
provide year-long input, and provide technical support to City staff on a wide range of
accounting, tax, and advisory issues out of all the firms evaluated.
Agreement for Professional Auditing Services
April 11, 2023
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Fiscal Impact
The annual audit fees for the fiscal years ending June 30, 2023, 2024, and 2025 under the
proposed contract attached, will be $56,500, $58,195, and $59,941, respectively. The FY 2022-
23 operating budget already incorporates sufficient funds to cover the cost incurred in the current
year. Funding for future years will be included in their respective annual operating budgets.
Attachments
Attachment 1- Agreement
Exhibit A- Proposal
Exhibit B- Fee Schedule
The Pun Group.docx Page 1
AGREEMENT FOR PROFESSIONAL SERVICES
The Pun Group, LLP.
Professional Auditing Services
This Agreement for Professional Services (the “Agreement”) is made and entered into as
of April 11, 2023, by and between the City of Lake Elsinore, a municipal corporation (‘‘City") and
The Pun Group, LLP., a limited liability partnership. ("Consultant").
RECITALS
A. The City has determined that it requires the following professional services:
Professional Auditing Services
B. Consultant has submitted to City a proposal, dated February 20, 2023, attached
hereto as Exhibit A (“Consultant’s Proposal”) and incorporated herein, to provide professional
services to City pursuant to the terms of this Agreement.
C. Consultant possesses the skill, experience, ability, background, certification and
knowledge to perform the services described in this Agreement on the terms and conditions
described herein.
D. City desires to retain Consultant to perform the services as provided herein and
Consultant desires to provide such professional services as set forth in this Agreement.
AGREEMENT
1. Scope of Services. Consultant shall perform the services described in
Consultant’s Proposal (Exhibit A). Consultant shall provide such services at the time, place, and
in the manner specified in Consultant’s Proposal, subject to the direction of the City through its
staff that it may provide from time to time.
2. Time of Performance.
a. Time of Essence. Time is of the essence in the performance of this
Agreement. The time for completion of the professional services to be performed by Consultant
is an essential condition of this Agreement. Consultant shall prosecute regularly and diligently
the professional services contemplated pursuant to this Agreement according to the agreed upon
performance schedule in Consultant’s Proposal (Exhibit A).
b. Performance Schedule. Consultant shall commence the services pursuant
to this Agreement upon receipt of a written notice to proceed and shall perform all services within
the time period(s) established in the Consultant’s Proposal (Exhibit A). When requested by
Consultant, extensions to the time period(s) specified may be approved in writing by the City
Manager.
c. Term. Unless earlier terminated as provided elsewhere in this Agreement,
this Agreement shall continue in full force and effect for a period commencing on April 11, 2023
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and ending June 30, 2026. The City may, at its sole discretion, extend the term of this Agreement
on a 12-month basis not to exceed 2 additional twelve (12) month renewal terms by giving written
notice thereof to Consultant not less than thirty (30) days before the end of the contract term, such
notice to be exercised by the City Manager.
3. Compensation. Compensation to be paid to Consultant shall be in accordance
with the fees set forth in Consultant's Proposal (Exhibit A), which is attached hereto and
incorporated herein by reference. In no event shall Consultant's annual compensation exceed
fifty-nine thousand nine hundred forty-one dollars ($59,941.00) without additional written
authorization from the City. Notwithstanding any provision of Consultant's Proposal to the
contrary, out of pocket expenses set forth in Exhibit A shall be reimbursed at cost without an
inflator or administrative charge. Payment by City under this Agreement shall not be deemed a
waiver of defects, even if such defects were known to the City at the time of payment.
4. Method of Payment. Consultant shall promptly submit billings to the City
describing the services and related work performed during the preceding month to the extent that
such services and related work were performed. Consultant’s bills shall be segregated by project
task, if applicable, such that the City receives a separate accounting for work done on each
individual task for which Consultant provides services. Consultant’s bills shall include a brief
description of the services performed, the date the services were performed, the number of hours
spent and by whom, and a description of any reimbursable expenditures. City shall pay
Consultant no later than forty-five (45) days after receipt of the monthly invoice by City staff.
5. Background Checks. At any time during the term of this Agreement, the City
reserves the right to make an independent investigation into the background of Consultant’s
personnel who perform work required by this Agreement, including but not limited to their
references, character, address history, past employment, education, social security number
validation, and criminal or police records, for the purpose of confirming that such personnel are
lawfully employed, qualified to provide the subject service or pose a risk to the safety of persons
or property in and around the vicinity of where the services will be rendered or City Hall. If the City
makes a reasonable determination that any of Consultant’s prospective or then current personnel
is deemed objectionable, then the City may notify Consultant of the same. Consultant shall not
use that personnel to perform work required by this Agreement, and if necessary, shall replace
him or her with a suitable worker.
6. Suspension or Termination.
a. The City may at any time, for any reason, with or without cause, suspend
or terminate this Agreement, or any portion hereof, by serving upon the Consultant at least ten
(10) days prior written notice. Upon receipt of such notice, the Consultant shall immediately cease
all work under this Agreement, unless the notice provides otherwise. If the City suspends or
terminates a portion of this Agreement such suspension or termination shall not make void or
invalidate the remainder of this Agreement.
b. In the event this Agreement is terminated pursuant to this Section, the City
shall pay to Consultant the actual value of the work performed up to the time of termination,
provided that the work performed is of value to the City. Upon termination of the Agreement
pursuant to this Section, the Consultant will submit an invoice to the City, pursuant to Section
entitled “Method of Payment” herein.
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7. Plans, Studies, Documents.
a. Ownership of Documents. All plans, studies, documents and other writings
prepared by and for Consultant, its officers, employees and agents and subcontractors in the
course of implementing this Agreement, except working notepad internal documents, shall
become the property of the City upon payment to Consultant for such work, and the City shall
have the sole right to use such materials in its discretion without further compensation to
Consultant or to any other party. Consultant shall, at Consultant’s expense, provide such reports,
plans, studies, documents and other writings to City upon written request. City shall have sole
determination of the public’s rights to documents under the Public Records Act, and any third-
party requests of Consultant shall be immediately referred to City, without any other actions by
Consultant.
b. Licensing of Intellectual Property. This Agreement creates a nonexclusive
and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights,
designs, and other intellectual property embodied in plans, specifications, studies, drawings,
estimates, and other documents or works of authorship fixed in any tangible medium of
expression, including but not limited to, physical drawings or data magnetically or otherwise
recorded on computer diskettes, which are prepared or caused to be prepared by Consultant
under this Agreement ("Documents & Data"). Consultant shall require that all subcontractors
agree in writing that City is granted a nonexclusive and perpetual license for any Documents &
Data the subcontractor prepares under this Agreement. Consultant represents and warrants that
Consultant has the legal right to license any and all Documents & Data. Consultant makes no
such representation and warranty in regard to Documents & Data which were prepared by design
professionals other than Consultant or provided to Consultant by the City. City shall not be limited
in any way in its use of the Documents & Data at any time, provided that any such use not within
the purposes intended by this Agreement shall be at City’s sole risk.
c. Confidentiality. All ideas, memoranda, specifications, plans, procedures,
drawings, descriptions, computer program data, input record data, written information, and other
Documents & Data either created by or provided to Consultant in connection with the performance
of this Agreement shall be held confidential by Consultant. Such materials shall not, without the
prior written consent of City, be used by Consultant for any purposes other than the performance
of the services under this Agreement. Nor shall such materials be disclosed to any person or
entity not connected with the performance of the services under this Agreement. Nothing
furnished to Consultant which is otherwise known to Consultant or is generally known, or has
become known, to the related industry shall be deemed confidential. Consultant shall not use
City’s name or insignia, photographs relating to project for which Consultant’s services are
rendered, or any publicity pertaining to the Consultant’s services under this Agreement in any
magazine, trade paper, newspaper, television or radio production or other similar medium without
the prior written consent of City.
8. Consultant’s Books and Records.
a. Consultant shall maintain any and all ledgers, books of account, invoices,
vouchers, canceled checks, and other records or documents evidencing or relating to charges for
services, or expenditures and disbursements charged to City for a minimum period of three (3)
years, or for any longer period required by law, from the date of final payment to Consultant to
this Agreement.
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b. Consultant shall maintain all documents and records which demonstrate
performance under this Agreement for a minimum period of three (3) years, or for any longer
period required by law, from the date of termination or completion of this Agreement.
c. Any records or documents required to be maintained pursuant to this
Agreement shall be made available for inspection or audit, at any time during regular business
hours, upon written request by the City Manager, City Attorney, City Auditor or a designated
representative of these officers. Copies of such documents shall be provided to the City for
inspection at City Hall when it is practical to do so. Otherwise, unless an alternative is mutually
agreed upon, the records shall be available at Consultant’s address indicated for receipt of notices
in this Agreement.
d. Where City has reason to believe that such records or documents may be
lost or discarded due to dissolution, disbandment or termination of Consultant’s business, City
may, by written request by any of the above-named officers, require that custody of the records
be given to the City and that the records and documents be maintained in City Hall. Access to
such records and documents shall be granted to any party authorized by Consultant, Consultant’s
representatives, or Consultant’s successor-in-interest.
9. Independent Contractor.
a. Consultant is and shall at all times remain as to the City a wholly
independent contractor pursuant to California Labor Code Section 3353. The personnel
performing the services under this Agreement on behalf of Consultant shall at all times be under
Consultant’s exclusive direction and control. Neither City nor any of its officers, employees, or
agents shall have control over the conduct of Consultant or any of Consultant’s officers,
employees, or agents, except as set forth in this Agreement. Consultant shall not at any time or
in any manner represent that it or any of its officers, employees, or agents are in any manner
officers, employees, or agents of the City. Consultant shall not incur or have the power to incur
any debt, obligation, or liability whatsoever against City, or bind City in any manner.
b. Notwithstanding any other federal, state and local laws, codes, ordinances
and regulations to the contrary and except for the fees paid to Consultant as provided in the
Agreement, Consultant and any of its employees, agents, and subcontractors providing service
under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any
claims to, any compensation, benefit, or any incident of employment by City, including but not
limited to eligibility to enroll in PERS as an employee of City and entitlement to any contribution
to be paid by City for employer contribution and/or employee contributions for PERS benefits.
10. PERS Eligibility Indemnification. In the event that Consultant or any employee,
agent, or subcontractor of Consultant providing services under this Agreement claims or is
determined by a court of competent jurisdiction or the California Public Employees Retirement
System (PERS) to be eligible for enrollment in PERS as an employee of the City, Consultant shall
indemnify, defend, and hold harmless City for the payment of any employee and/or employer
contributions for PERS benefits on behalf of Consultant or its employees, agents, or
subcontractors, as well as for the payment of any penalties and interest on such contributions,
which would otherwise be the responsibility of City.
11. Interests of Consultant. Consultant (including principals, associates and
professional employees) covenants and represents that it does not now have any investment or
interest in real property and shall not acquire any interest, direct or indirect, in the area covered
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by this Agreement or any other source of income, interest in real property or investment which
would be affected in any manner or degree by the performance of Consultant’s services
hereunder. Consultant further covenants and represents that in the performance of its duties
hereunder no person having any such interest shall perform any services under this Agreement.
Consultant is not a designated employee within the meaning of the Political Reform Act
because Consultant:
a. will conduct research and arrive at conclusions with respect to his/her
rendition of information, advice, recommendation or counsel independent of the control and
direction of the City or of any City official, other than normal agreement monitoring; and
b. possesses no authority with respect to any City decision beyond rendition
of information, advice, recommendation or counsel. (FPPC Reg. 18700(a)(2).)
12. Professional Ability of Consultant. City has relied upon the professional training
and ability of Consultant to perform the services hereunder as a material inducement to enter into
this Agreement. Consultant shall therefore provide properly skilled professional and technical
personnel to perform all services under this Agreement. All work performed by Consultant under
this Agreement shall be in accordance with applicable legal requirements and shall meet the
standard of quality ordinarily to be expected of competent professionals in Consultant’s field of
expertise.
13. Compliance with Laws.
a. Consultant shall comply with all local, state and federal laws and
regulations applicable to the services required hereunder, including any rule, regulation or bylaw
governing the conduct or performance of Consultant and/or its employees, officers, or board
members.
b. Consultant represents that it has obtained and will maintain at all times
during the term of this Agreement all professional and/or business licenses, certifications and/or
permits necessary for performing the services described in this Agreement, including a City
business license.
14. Licenses. Consultant represents and warrants to City that it has the licenses,
permits, qualifications, insurance and approvals of whatsoever nature which are legally required
of Consultant to practice its profession. Consultant represents and warrants to City that
Consultant shall, at its sole cost and expense, keep in effect or obtain at all times during the term
of this Agreement, any licenses, permits, insurance and approvals which are legally required of
Consultant to practice its profession. Consultant shall maintain a City of Lake Elsinore business
license.
15. Indemnity. Consultant shall indemnify, defend, and hold harmless the City and its
officials, officers, employees, agents, and volunteers from and against any and all losses, liability,
claims, suits, actions, damages, and causes of action arising out of any personal injury, bodily
injury, loss of life, or damage to property, or any violation of any federal, state, or municipal law
or ordinance, to the extent caused, in whole or in part, by the willful misconduct or negligent acts
or omissions of Consultant or its employees, subcontractors, or agents, by acts for which they
could be held strictly liable, or by the quality or character of their work. The foregoing obligation
of Consultant shall not apply when (1) the injury, loss of life, damage to property, or violation of
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law arises from the sole negligence or willful misconduct of the City or its officers, employees,
agents, or volunteers and (2) the actions of Consultant or its employees, subcontractor, or agents
have contributed in no part to the injury, loss of life, damage to property, or violation of law. It is
understood that the duty of Consultant to indemnify and hold harmless includes the duty to defend
as set forth in Section 2778 of the California Civil Code. Acceptance by City of insurance
certificates and endorsements required under this Agreement does not relieve Consultant from
liability under this indemnification and hold harmless clause. This indemnification and hold
harmless clause shall apply to any damages or claims for damages whether or not such insurance
policies shall have been determined to apply. By execution of this Agreement, Consultant
acknowledges and agrees to the provisions of this Section and that it is a material element of
consideration.
16. Insurance Requirements.
a. Insurance. Consultant, at Consultant’s own cost and expense, shall
procure and maintain, for the duration of the contract, unless modified by the City’s Risk Manager,
the following insurance policies.
i. Workers’ Compensation Coverage. Consultant shall maintain
Workers’ Compensation Insurance and Employer’s Liability Insurance for his/her
employees in accordance with the laws of the State of California. In addition, Consultant
shall require each subcontractor to similarly maintain Workers’ Compensation Insurance
and Employer’s Liability Insurance in accordance with the laws of the State of California
for all of the subcontractor’s employees. Any notice of cancellation or non-renewal of all
Workers’ Compensation policies must be received by the City at least thirty (30) days prior
to such change. The insurer shall agree to waive all rights of subrogation against City, its
officers, agents, employees and volunteers for losses arising from work performed by
Consultant for City. In the event that Consultant is exempt from Worker’s Compensation
Insurance and Employer’s Liability Insurance for his/her employees in accordance with
the laws of the State of California, Consultant shall submit to the City a Certificate of
Exemption from Workers Compensation Insurance in a form approved by the City
Attorney.
ii. General Liability Coverage. Consultant shall maintain commercial
general liability insurance in an amount not less than one million dollars ($1,000,000) per
occurrence for bodily injury, personal injury and property damage. If a commercial general
liability insurance form or other form with a general aggregate limit is used, either the
general aggregate limit shall apply separately to the work to be performed under this
Agreement or the general aggregate limit shall be at least twice the required occurrence
limit. Required commercial general liability coverage shall be at least as broad as
Insurance Services Office Commercial General Liability occurrence form CG 0001 (ed.
11/88) or Insurance Services Office form number GL 0002 (ed. 1/73) covering
comprehensive General Liability and Insurance Services Office form number GL 0404
covering Broad Form Comprehensive General Liability. No endorsement may be attached
limiting the coverage.
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iii. Automobile Liability Coverage. Consultant shall maintain
automobile liability insurance covering bodily injury and property damage for all activities
of the Consultant arising out of or in connection with the work to be performed under this
Agreement, including coverage for owned, hired and non-owned vehicles, in an amount
of not less than one million dollars ($1,000,000) combined single limit for each occurrence.
Automobile liability coverage must be at least as broad as Insurance Services Office
Automobile Liability form CA 0001 (ed. 12/90) Code 1 (“any auto”). No endorsement may
be attached limiting the coverage.
iv. Professional Liability Coverage. Consultant shall maintain
professional errors and omissions liability insurance appropriate for Consultant’s
profession for protection against claims alleging negligent acts, errors or omissions which
may arise from Consultant’s services under this Agreement, whether such services are
provided by the Consultant or by its employees, subcontractors, or sub consultants. The
amount of this insurance shall not be less than one million dollars ($1,000,000) on a
claims-made annual aggregate basis, or a combined single limit per occurrence basis.
b. Endorsements. Each general liability and automobile liability insurance
policy shall be with insurers possessing a Best’s rating of no less than A:VII and shall be endorsed
with the following specific language:
i. Notwithstanding any inconsistent statement in any required
insurance policies or any subsequent endorsements attached thereto, the protection
offered by all policies, except for Workers’ Compensation, shall bear an endorsement
whereby it is provided that, the City and its officers, employees, servants, volunteers and
agents and independent contractors, including without limitation, the City Manager and
City Attorney, are named as additional insureds. Additional insureds shall be entitled to
the full benefit of all insurance policies in the same manner and to the same extent as any
other insureds and there shall be no limitation to the benefits conferred upon them other
than policy limits to coverages.
ii. This policy shall be considered primary insurance as respects the
City, its elected or appointed officers, officials, employees, agents and volunteers.
Any insurance maintained by the City, including any self-insured retention the City may
have, shall be considered excess insurance only and shall not contribute with it.
iii. This insurance shall act for each insured and additional insured as
though a separate policy had been written for each, except with respect to the limits of
liability of the insuring company.
iv. The insurer waives all rights of subrogation against the City, its
elected or appointed officers, officials, employees or agents.
v. Any failure to comply with reporting provisions of the policies shall
not affect coverage provided to the City, its elected or appointed officers, officials,
employees, agents or volunteers.
vi. The insurance provided by this Policy shall not be suspended,
voided, canceled, or reduced in coverage or in limits except after thirty (30) days written
notice has been received by the City.
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c. Deductibles and Self-Insured Retentions. Any deductibles or self-insured
retentions must be declared to and approved by the City. At the City’s option, Consultant shall
demonstrate financial capability for payment of such deductibles or self-insured retentions.
d. Certificates of Insurance. Consultant shall provide certificates of insurance
with original endorsements to City as evidence of the insurance coverage required herein.
Certificates of such insurance shall be filed with the City on or before commencement of
performance of this Agreement. Current certification of insurance shall be kept on file with the
City at all times during the term of this Agreement.
17. Notices. Any notice required to be given under this Agreement shall be in writing
and either served personally or sent prepaid, first class mail. Any such notice shall be addressed
to the other party at the address set forth below. Notice shall be deemed communicated within
48 hours from the time of mailing if mailed as provided in this section.
If to City: City of Lake Elsinore
Attn: City Manager
130 South Main Street
Lake Elsinore, CA 92530
With a copy to: City of Lake Elsinore
Attn: City Clerk
130 South Main Street
Lake Elsinore, CA 92530
If to Consultant: The Pun Group, LLP.
Attn: Kenneth Pun, CPA, CGMA
200 E. Sandpointe Ave., Suite 600
Santa Ana, CA 92707
18. Assignment and Subcontracting. The parties recognize that a substantial
inducement to City for entering into this Agreement is the professional reputation, experience and
competence of Consultant and the subcontractors listed in Exhibit B. Consultant shall be fully
responsible to City for all acts or omissions of any subcontractors. Assignments of any or all
rights, duties or obligations of the Consultant under this Agreement will be permitted only with the
express consent of the City. Consultant shall not subcontract any portion of the work to be
performed under this Agreement except as provided in Exhibit B without the written authorization
of the City. If City consents to such subcontract, Consultant shall be fully responsible to City for
all acts or omissions of those subcontractors. Nothing in this Agreement shall create any
contractual relationship between City and any subcontractor nor shall it create any obligation on
the part of the City to pay or to see to the payment of any monies due to any such subcontractor
other than as otherwise is required by law.
19. Waiver. Waiver of a breach or default under this Agreement shall not constitute a
continuing waiver of a subsequent breach of the same or any other provision under this
Agreement.
20. Litigation Expenses and Attorneys’ Fees. If either party to this Agreement
commences any legal action against the other party arising out of this Agreement, the prevailing
party shall be entitled to recover its reasonable litigation expenses, including court costs, expert
witness fees, discovery expenses, and attorneys’ fees.
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21. Mediation. The parties agree to make a good faith attempt to resolve any disputes
arising out of this Agreement through mediation prior to commencing litigation. The parties shall
mutually agree upon the mediator and share the costs of mediation equally. If the parties are
unable to agree upon a mediator, the dispute shall be submitted to JAMS or its successor in
interest. JAMS shall provide the parties with the names of five qualified mediators. Each party
shall have the option to strike two of the five mediators selected by JAMS and thereafter the
mediator remaining shall hear the dispute. If the dispute remains unresolved after mediation,
either party may commence litigation.
22. Prohibited Interests. Consultant maintains and warrants that it has not employed
nor retained any company or person, other than a bona fide employee working solely for
Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid
nor has it agreed to pay any company or person, other than a bona fide employee working solely
for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration
contingent upon or resulting from the award or making of this Agreement. For breach or violation
of this warranty, City shall have the right to rescind this Agreement without liability. For the term
of this Agreement, no member, officer or employee of City, during the term of his or her service
with City, shall have any direct interest in this Agreement, or obtain any present or anticipated
material benefit arising therefrom.
23. Equal Opportunity Employment. Consultant represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee or
applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex
or age. Such non-discrimination shall include, but not be limited to, all activities related to initial
employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or
termination.
24. Prevailing Wages. Consultant is aware of the requirements of California Labor
Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8,
Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage
rates and the performance of other requirements on "public works" and "maintenance" projects.
Consultant agrees to fully comply with all applicable federal and state labor laws (including,
without limitation, if applicable, the Prevailing Wage Laws). It is agreed by the parties that, in
connection with the Work or Services provided pursuant to this Agreement, Consultant shall bear
all risks of payment or non-payment of prevailing wages under California law, and Consultant
hereby agrees to defend, indemnify, and hold the City, and its officials, officers, employees,
agents, and volunteers, free and harmless from any claim or liability arising out of any failure or
alleged failure to comply with the Prevailing Wage Laws. The foregoing indemnity shall survive
termination of this Agreement.
25. Severability. If any term or portion of this Agreement is held to be invalid, illegal,
or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this
Agreement shall continue in full force and effect.
26. Controlling Law Venue. This Agreement and all matters relating to it shall be
governed by the laws of the State of California and any action brought relating to this Agreement
shall be held exclusively in a state court in the County of Riverside.
27. Authority to Enter Agreement. Consultant has all requisite power and authority to
conduct its business and to execute, deliver, and perform the Agreement. Each party warrants
that the individuals who have signed this Agreement have the legal power, right, and authority to
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make this Agreement and to bind each respective party. The City Manager is authorized to enter
into an amendment or otherwise take action on behalf of the City to make the following
modifications to the Agreement: (a) a name change; (b) grant extensions of time; (c) non-
monetary changes in the scope of services; and/or (d) suspend or terminate the Agreement.
28. Counterparts. This Agreement may be executed in several counterparts, each of
which shall constitute one and the same instrument and shall become binding upon the parties
when at least one copy hereof shall have been signed by both parties hereto. In approving this
Agreement, it shall not be necessary to produce or account for more than one such counterpart.
29. Entire Agreement; Incorporation; Conflict. This Agreement contains the entire
understanding between the parties relating to the obligations described herein. All prior or
contemporaneous understandings, agreements, representations and statements, oral or written,
are superseded in total by this Agreement and shall be of no further force or effect. Consultant’s
Proposal is incorporated only for the description of the scope of services and/or the schedule of
performance and no other terms and conditions from such proposal shall apply to this Agreement
unless specifically agreed to in writing. In the event of conflict, this Agreement shall take
precedence over those contained in the Consultant’s Proposal.
30. Amendments. This Agreement may be modified or amended only by a written
document executed by both Consultant and City and approved as to form by the City Attorney.
[Signatures on next page]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the
date first written above.
“CITY”
CITY OF LAKE ELSINORE, a municipal
corporation
City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
Assistant City Manager
“CONSULTANT”
The Pun Group, LLP., a limited liability
partnership
By: Kenneth Pun, CPA, CGMA
Its: Managing Partner
Attachments: Exhibit A – Consultant’s Proposal
Exhibit B – List of Subcontractors
EXHIBIT A
EXHIBIT A
CONSULTANT’S PROPOSAL
[ATTACHED]
EXHIBIT B
EXHIBIT B
LIST OF SUBCONTRACTORS
[ATTACHED]
Kenneth H. Pun, CPA, CGMA
Managing Partner
200 E. Sandpointe Ave., Suite 600, Santa Ana, CA 92707
(949) 777-8801 | ken.pun@pungroup.cpa
February 20, 2023
TECHNICAL PROPOSAL
Professional Auditing Services
CITY OF LAKE ELSINORE
The Pun Group LLP is recognized for its professionalism, integrity and for providing clients with practical solutions
unique to their circumstances and issues. You will receive a superior level of service and a quality audit.
Thank You!
Thank you for allowing us to submit our qualifications to provide you with
Professional Auditing Services.
The Pun Group LLP
Certified Public Accountants and Business Advisors
WHY CHOOSE
THE PUN GROUP LLP?
Big firm expertise, small firm values
Personal attention meets technical expertise
A unique firm culture
Innovation embraced
Achievable plans to move your organization forward
The Pun Group’s most
valuable asset is our
people, they and their
deep experience drive our
every interaction with
clients.
“
”
Kenneth H. Pun, CPA, CGMA
Founder & Managing Partner
City of Lake Elsinore
Table of Contents
Letter of Transmittal ....................................................................................... 1
Independence ................................................................................................ 3
License to Practice in California .................................................................... 3
Firm Qualifications and Experience ............................................................... 4
Partner, Supervisory, and Staff Qualifications and Experience ................... 18
Similar Engagements with Other Government Entities ............................... 28
Specific Audit Approach ............................................................................... 30
Identification of Anticipated Potential Audit Problems ................................. 37
“Prepared by Client” PBC List ...................................................................... 38
Let’s Get to Work! ........................................................................................ 45
Appendix A – Available Training ..................................................................... i
Appendix B – Certificate of Insurance ........................................................... ii
The Pun Group Wins
2023 “Best of Accounting” Award
The Pun Group LLP is proud to have won 2023’s Best of
Accounting® award from ClearlyRated for providing superior
service to its clients.
Winners of such awards have proven to be industry leaders in
service quality based entirely on ratings provided by their
clients. On average, clients of 2023 Best of Accounting
winners are 70% more likely to be satisfied than those who
work with non-winning firms.
“I am pleased to introduce the 2023 Best of Accounting
winners alongside their validated service ratings on
ClearlyRated.com,” said ClearlyRated’s CEO, Eric Gregg.
“These firms have demonstrated a remarkable commitment to
delivering amazing experiences, despite another year of
upheaval and macroeconomic uncertainty. Hats off to these
service leaders - it’s truly an honor to recognize and celebrate
their achievements.”
The Pun Group LLP received satisfaction scores of 9 or 10 out
of 10 from 94.1% of their clients, significantly higher than the
industry’s average of 50%.
Our firm excelled in five key areas: Responsiveness, Quality,
Value, Needs Understanding, and Proactive Approach.
About ClearlyRated
Rooted in satisfaction research for professional service
firms, ClearlyRated utilizes a Net Promoter® Score survey
program to help professional service firms measure their
service experience, build an online reputation, and
differentiate on service quality.
“Excellent customer service and staff and
partners are expert in their fields.”
Lani H.
State and Local Government Client
“We started using Pun Group when the
pandemic first started two years ago so
had a little apprehension about doing
everything remotely with a new firm. But
the audit went very well and was
completed on time without problem.”
Kevin W.
State and Local Government Client
“The Firm has consistently exceeded our
expectations as client.”
Clint O.
State and Local Government Client
“An excellent partner and amazing service.”
Jim T.
Private Sector Client
200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
City of Lake Elsinore
Letter of Transmittal
February 20, 2023
City of Lake Elsinore
Administrative Services Department
130 South Main Street
Lake Elsinore, California 92530
Re: RFP for Professional Auditing Services
Dear Sir or Madam:
Please allow us to introduce our Firm and share our qualifications and proposed services plan for the City of Lake
Elsinore (the “City”) according to your Request for Proposals for Professional Auditing Services for the fiscal years
ending June 30, 2023, 2024, and 2025.
The Pun Group LLP (the “Firm”) has the knowledge and experience necessary to become the City’s next public
accounting firm and the work plan to ensure a smooth process.
This letter is an acknowledgment of the Firm’s understanding of the work to be performed. We are offering our
commitment to deliver all of the required work, complete the audit, and issue the necessary auditor’s reports within
the periods outlined by the City. No subcontractors will be utilized for this engagement.
The Pun Group is the right choice for the City of Lake Elsinore because:
We Understand the Demographics and Your Needs. The Pun Group is reputable for its
governmental practice. We are the principal auditors for cities in California such as Bell, Fresno,
Gilroy, Hercules, Lakewood, Madera, Montebello, Monterey, Napa, National City, Palm Springs,
Salinas, San Mateo, Santa Clarita, Stockton, Tracy, and several others. Accordingly, the proposed
engagement team has a deep understanding of the current issues that municipalities are facing,
such as varying demographics, economic environments, and the constantly changing landscape
of laws and regulations.
Recognized Leader in the Governmental Industry. We are a small national Firm with licenses
in the States of California, Arizona, and Nevada and a proven leader in professional services to
the government sector. All key engagement team professionals are licensed to practice as
Certified Public Accountants and meet the Continuing Professional Education requirements under
US GAO’s Government Auditing Standards to perform the proposed audits. The partners and all
employees proposed to perform the requested services do not have a record of substandard audit
work nor have any outstanding claim of substandard practice or unsatisfactory performance
pending with the State Board of Accountancy or other professional organizations. In addition, we
are members of the national AICPA Audit Quality Center.
We strongly believe that part of our success is credited to our professionals’ participation in various
industry-leading organizations. Such affiliations are critical to addressing emerging accounting
and auditing issues within the industry environment.
City of Lake Elsinore
2 | PUNGROUP.CPA
You’ll Work with a Team that Embraces Innovation and Continuous Improvement. Our Firm
is committed to continuous improvement as it relates to service delivery. We embrace innovation
and identify areas of technological enhancements in our audit and project management
approaches. For example:
Secure Data File Transfer System. In order to improve audit efficiency, workflow
management software plays an essential role between your organization and our
engagement team. We employ a secure data file transfer system called Suralink. Suralink’s
dynamic request list is integrated with our secure file hosting system for seamless document-
request coordination, including the upload of large-size files. It means all our requests are in
one place, updated in real-time, and accessible by everyone working on the engagement. Not
only makes the operation more cost-efficient, but it also enables you and your team to spend
your time getting the job done, not reconciling a messy list of outstanding items. In addition,
Suralink’s dashboard allows you to visualize the process of document-request fulfillment.
AI Auditor. The Pun Group leverages the technology and research tools required to provide
excellent services to its clients. With the usage of Artificial Intelligence (AI) technology, the
Firm is capable of issuing all reports requested faster than other audit firms without exposing
the City to unnecessary risks.
Remote Auditing Capability. Remote working arrangements have suddenly become the
“new normal” in these trying times. Our Firm has deployed top-notch technology and fully
transitioned to “remote auditing,” offering our clients the quality services they deserve while
being fully “remote” or operating in a “hybrid” schedule. “On-site” audits are still the Firm’s
preferred method, and we’ll continue to offer and promote those as well.
Knowledge is Shared with You. As part of our pledge to keep you updated on new technical
accounting and financial issues, we implemented our 2023 Virtual Government Accounting
Conference, which qualifies for up to 15 hours of CPE – nearly double what other firms offer. These
online sessions are free of charge and part of the service package provided to you. More details
and dates can be found on the “Client Training Webinars” topic under this proposal.
The Pun Group is proud of its inclusive values and is an avid promoter of equality and diversity. In addition,
the Firm is an equal-opportunity employer and complies with all federal and state hiring requirements. We’re proud
of supporting affirmative-action philosophies and work hard to provide opportunities for self-enhancement to
members of disadvantaged groups.
This proposal is a firm and irrevocable offer valid for sixty (60) days following the closing date for the receipt of all
proposals.
Finally, we would like to emphasize one additional point: We want to earn your trust and your business! We are
confident that the energetic and experienced team we have assembled is the right one for the City.
Our commitment to serving the City of Lake Elsinore cannot be adequately conveyed in a letter, and I look forward
to continuing the discussion with you. I’m assigned as your primary contact for contract negotiations and stand
steadfast to serve as your engagement/lead partner. I’m also authorized to legally bind the Firm. Should you have
any questions or wish to discuss this proposal, please do not hesitate to contact me at (949) 777-8801 or by email
at ken.pun@pungroup.cpa.
Sincerely,
Kenneth H. Pun, CPA, CGMA | Managing Partner | The Pun Group LLP
200 E. Sandpointe Ave., Suite 600, Santa Ana, CA 92707
City of Lake Elsinore
3 | PUNGROUP.CPA
Independence
Independence
The Pun Group LLP requires all employees to adhere to strict independence standards concerning the Firm’s clients.
These independence standards exceed, in many instances, the rules promulgated by the American Institute of
Certified Public Accountants (AICPA).
The Pun Group LLP certifies that it is independent of the City of Lake Elsinore and its component units. The Firm
meets independence requirements defined by the United States Government Accountability Office’s (US GAO’s)
Government Auditing Standards and the American Institute of Certified Public Accountants (AICPA). Based on that,
we have not identified an instance that constitutes a conflict of interest relative to performing the services requested
by the City.
The Firm had no relationship with the City of Lake Elsinore or any of its component units during the past five (5)
years.
The Firm will give the City of Lake Elsinore written notice of any professional relationships entered into during the
period of the engagement.
License to Practice in California
License to Practice in California
The Firm and all key professional staff are licensed by the State of California to practice as Certified Public
Accountants and meet the Continuing Professional Education requirements under US GAO’s Government Auditing
Standards to perform the proposed audits.
Firm Registration:
California State Board of Accountancy Number – PAR 7601
Federal Identification Number – 46-4016990
Insurance
If selected, the Firm will maintain the minimum insurance requirements during the entire execution of the agreement
with the City of Lake Elsinore. Within ten days from the implementation of the contract, we will furnish the City of
Lake Elsinore with satisfactory evidence of the insurance requirements and proof that each carrier is required to give
at least 30 days prior written notice of the cancellation of any policy during the entire period of the agreement. The
City of Lake Elsinore will be named as an additional named insured under the Firm’s policies.
A copy of our current certificate of insurance is presented in the Appendices section of this proposal.
City of Lake Elsinore
4 | PUNGROUP.CPA
Firm Qualifications and Experience
The Pun Group LLP, Certified Public Accountants, and Business
Advisors, founded in 2012, is a limited liability partnership. We are
a full-service accounting firm comprised of fifty professionals
providing auditing, accounting, and advisory services to our
clients.
The Firm has become one of the “Top Accounting Firms” in
Orange County according to the Orange County Business Journal
and is also on the list of CalCPA Top 150 firms.
The combination of our hands-on experience and practical
knowledge exercised by our audit professionals makes the Firm
unique in our field. Our technical expertise and thorough
understanding of current regulations and issues—along with the
Firm’s commitment to hard work, integrity, and teamwork in every
engagement—enable us to help our clients succeed.
Our Partners’ Group—which includes Kenneth Pun, Coley
Delaney, Andrew Roth, Frances Kuo, Vanessa Burke, John
Georger Jr., Gary Caporicci, and Jim Fritzsche — provides
auditing, accounting, and advisory services to numerous
governmental entities throughout the United States. With more
than two hundred years of combined experience in the industry,
we have become a trusted business partner and are well-
respected as leaders in the industry in one of the fastest-growing
firms. With nearly 100 government and not-for-profit audit clients,
our Partners have a real passion for the industry and believe we
are unmatched in our municipal experience. The firm also meets
professional 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.
The Firm’s headquarters are located in Orange County, California,
with five branches in San Diego, Walnut Creek, Sacramento
(California), Las Vegas (Nevada), and Phoenix (Arizona).
The Orange County Office located at 200 E. Sandpointe Ave.,
Suite 600, Santa Ana, CA 92707, will perform the requested
services for the City. However, we may assign additional staff
from our other offices to the engagement at no extra cost to the
City. No subcontractors will be used in this engagement.
Global Capabilities
The Pun Group LLP is an independent member of Allinial Global,
an association of over 100 independent accounting and consulting
firms. Based in North America, Allinial Global offers international
support by connecting its member firms to providers and global
networks of accounting firms worldwide.
OUR
AFFILIATIONS
OUR FIRM
AT A GLANCE
50 full-time auditing,
accounting, tax and
advisory professionals
One of the fastest growing
firms serving California,
Nevada and Arizona
6 offices across
3 states
Client retention rate:
90 – 95%
City of Lake Elsinore
5 | PUNGROUP.CPA
Full-Time Government Auditors
As full-time government auditors, we understand that governmental entities do not
operate independently but in an increasingly complex web of local, state, and
federal relationships. We know how these relationships work, what they mean at
the local level, and how every public organization’s focus on resource management
is critical to success.
Also, while many accounting Firms can provide services, not all can build an
excellent working relationships with their clients. The Pun Group LLP prides itself on
developing lasting, personal relationships with our clients. Our hands-on partner
involvement and low personnel turnover are crucial tools to our success and are
highly beneficial to the City.
Local Office’s Information Technology (IT) Audit Capabilities
The Pun Group LLP continues our efforts to invest in our IT system to enhance our
security further and promote audit efficiency.
Top security for your data is the key to our success. When we have your data
virtualized, our Firm takes all the preventive steps to avoid putting your information
at risk. Our In-House IT administrator maintains our server to ensure our IT
environment is continuously updated with the latest security fixes. Through VPN
and Microsoft Remote Desktop, our In-House network administrator can lock down
files and system access from a single point, limiting the ability of remote sites to
take data from our server.
Access to systems from anywhere and anytime. With more mobility being the
norm rather than the exception, our engagement team needs robust access to the
engagement files when they are working in your office. Accounting and Auditing
Software applications are installed in our “Private” server and can be securely
accessed through VPN and Microsoft Remote Desktop. The Firm uses CCH
ProSystem fx® Engagement for audit documentation, which allows real-time
synchronization of the work papers and instant collaboration quality control review.
Secure Data File Transfer System. In order to improve audit efficiency, workflow
management software plays an essential role between your organization and our
engagement team. We employ a secure data file transfer system called Suralink.
Suralink’s dynamic request list is integrated with our secure file-hosting system for
seamless document-request coordination. It means all our requests are in one
place, updated in real-time, and accessible by everyone working on the
engagement. As a client, you no longer have to manually maintain a spreadsheet
amongst several people, only to repeat the process in a day or two. Not only makes
the operation more cost-efficient, but it also enables you and your team to spend
your time getting the job done, not reconciling a messy list of outstanding items.
The Suralink dashboard, as shown below, allows you to visualize the process of
document-request fulfillment.
BIG FIRM EXPERTISE.
SMALL FIRM VALUES.
Our professional backgrounds at major national
firms showed us how to solve complicated
business and accounting challenges, but the
sense of personal connection was missing.
We launched The Pun Group because we believe
every client deserves to work with experienced
business advisors and CPAs who have the time –
and take the time – to create an authentic
connection. Every client is our top priority!
A UNIQUE CULTURE.
“Personalization” is not just a buzzword – it’s part
of our firm’s culture. We take a personal approach
to everything we do. We collaborate with our
clients, so they’re always part of the process. We
listen to our staff to make sure they have the right
support and resources to do a great job. Getting to
know others and discovering how we can serve
them better is not just a sign of good business
practices; it’s a sign of good people.
INNOVATION EMBRACED.
New ideas keep you ahead of the game. From
leveraging the value of emerging technologies to
further refining trusted processes, we adopt proven
solutions to meet your needs.
WHERE YOU GO, WE GO.
WHERE YOU GROW, WE GROW.
Our success is defined by how you achieve yours.
Partner with accomplished accounting and
financial professionals who are laser-focused on
taking your business to the next level.
City of Lake Elsinore
6 | PUNGROUP.CPA
Our Services
Our partners and seasoned professionals are always available, guiding clients through their periods of rapid growth
as well as difficult times. We are able to do that by offering a portfolio of accounting services that are as diverse as
the jurisdictions and entities themselves. The Pun Group LLP has successfully provided professional auditing,
accounting, financial reporting, and management advisory/consulting services to a broad spectrum of governmental
entities.
ASSURANCE
ADVISORY
OTHER SERVICES
Financial statements audits
Compliance audits
Performance audits
Internal audits
Service organization
controls audits
Operational reviews/risk
advisory services
Forensic investigation
Financial condition
analysis
Organizational structure
review
Cash flow analysis
Debt restructuring
consultation
Litigation restructuring
consultation
Assistance with the
preparation and review of the
Annual Comprehensive
Financial Report
Government property lease
excise tax compliance review
Sub-recipient monitoring
Implementation of new GASB
pronouncements
Audit readiness services
Contract Finance
Director/Accountant services
Cannabis Compliance Services
Many cities have authorized commercial cannabis to operate within their local jurisdiction.
Compliance issues are common in California’s newly regulated cannabis industry, which is
no surprise given the complexity of the state’s regulatory landscape.
The Pun Group LLP has developed a platform to guide government agencies and commercial enterprises through the
new and challenging steps in this emerging market. We have partnered with Simplifya, which has developed a cloud-
based government agency/licensee compliance solution. Simplifya, headquartered in Denver, Colorado, and at the
forefront since legalization in Colorado, has been an industry leader in commercial cannabis compliance since 2016.
This new software allows government agencies to monitor their licensees at every stage of the approval process,
from initial licensing to renewal and continuing disclosure requirements. Your communities demand that these new
cannabis businesses operate based on the ordinances that you have passed. We can help ensure businesses are
working in compliance, and when they are not, your team receives an immediate notification.
The Pun Group LLP has proven itself as a leader in the assurance and advisory field in the government arena. With
the addition of Simplifya to our service offering, we have strengthened our position as a leading firm to help with your
compliance needs and in unconventional areas as they emerge.
City of Lake Elsinore
7 | PUNGROUP.CPA
Peer Review
Being a member of the American Institute of Certified Public Accountants (AICPA), The Pun Group LLP is required to
obtain an independent peer review of our audit and accounting practice every three (3) years. The peer reviewer
assessed the Firm’s quality-control policies, reviewed administrative records, interviewed professional personnel, and
inspected the Firm’s working papers and reports from a representative sample of accounting and auditing
engagements, including governmental audits. The reviewer concluded that the Firm fully complied with the AICPA’s
stringent standards for quality control and issued a peer review rating of “Pass.”
A copy of our most recent peer review is presented.
City of Lake Elsinore
8 | PUNGROUP.CPA
Federal or State Desk Review
No federal or state desk reviews or field reviews have been undertaken of any audits performed by the Firm or any
of its partners, managers, or professionals during the past three (3) years.
Disciplinary Action
State regulatory bodies or professional organizations have taken no disciplinary action against the Firm or any of its
partners, managers, or professionals during the past three (3) years.
The Firm has no conditions such as bankruptcy, pending litigations, planned office closures, mergers, or any
organizational conflict of interest that may affect the ability of the Firm to perform the required duties requested by
the City of Lake Elsinore.
GFOA Award Program
The Pun Group LLP realizes the importance of maintaining the Certificate for Excellence in Financial Reporting from
the GFOA. Our professionals are exceptionally well qualified to assist governments in obtaining and maintaining
their certificates.
The Firm’s commitment and involvement in the development of auditing and accounting standards can be shown in
our active participation in the GFOA’s financial statements certificate programs. 100% of our current clients who
submitted their Annual Comprehensive Financial Report to the GFOA received these awards.
Also, two of our senior partners, Mr. Gary Caporicci and Mr. John F. Georger, are members of the Government
Finance Officers Association and participate in the GFOA Special Review Committee.
City of Lake Elsinore
9 | PUNGROUP.CPA
Firm’s Experience Providing Similar Services
The Pun Group LLP has performed numerous audits of organizations subject to financial and compliance audits. These
audits were performed under auditing standards generally accepted in the United States, Government Auditing
Standards, Uniform Guidance (formerly known as OMB Circular A-133), and its Compliance Supplement (when
applicable), Office of the State Controller’s Minimum Audit Requirements and Reporting Guidelines.
A representative list of our current clients is as follows:
Municipalities Dates Financial
Audit
Single
Audit
GFOA
Certificate
Total
Hours
City of Adelanto 2021 – Present Yes Yes Yes 700
City of Alameda 2019 – Present Accounting and Consulting Services 150
City of Arvin 2013 – Present Yes Yes N/A 400
City of Baldwin Park 2022 – Present Yes Yes Yes 700
City of Bell 2018 – Present Yes Yes Yes 520
City of Bradbury 2012 – Present Yes N/A N/A 150
City of Calexico 2007 – Present Yes Yes N/A 750
City of Clovis 2006 – Present Yes Yes Yes 500
City of Coachella 2017 – Present Yes Yes Yes 410
City of Cottonwood, AZ 2007 – Present Yes Yes Yes 400
City of Corona 2021 – Present Yes Yes Yes 640
Town of Corte Madera 2022 – Present Yes Yes N/A 400
Town of Danville 1999 – Present Yes Yes Yes 400
City of Douglas, AZ 2020 – Present Yes Yes Yes 300
City of Desert Hot Springs 2013 – Present Yes N/A N/A 700
City of Fresno 2022 – Present Yes Yes Yes 1,450
City of Gardena 2007 – Present Yes Yes Yes 700
City of Gilroy 2020 – Present Yes Yes Yes 640
City of Glendora 2017 – Present Yes Yes Yes 430
City of Gustine 2017 – Present Yes N/A N/A 400
City of Hemet 2015 – Present Yes Yes N/A 380
City of Hercules 2020 – Present Yes Yes Yes 450
City of Lakewood 2013 – Present Yes Yes Yes 380
City of Lomita 2020 – Present Accounting and Consulting Services 150
City of Lodi 2018 – Present Yes Yes Yes 760
City of Lake Elsinore
10 | PUNGROUP.CPA
Municipalities Dates Financial
Audit
Single
Audit
GFOA
Certificate
Total
Hours
City of Lynwood 2016 – Present Yes Yes Yes 585
City of Madera 2019 – Present Yes Yes Yes 470
City of Montebello 2022 – Present Yes Yes Yes 600
City of Napa 2019 – Present Yes Yes Yes 750
City of National City 2013 – Present Yes Yes Yes 600
City of Palm Springs 2020 – Present Yes Yes Yes 1,000
City of Patterson 2017 – Present Yes Yes Yes 450
City of Placerville 2008 – Present Yes Yes N/A 400
City of Redlands 2022 – Present Yes Yes Yes 650
City of Ridgecrest 2009 – Present Yes Yes Yes 300
City of Rohnert Park 2020 – Present Yes Yes Yes 700
City of Salinas 2022 – Present Yes Yes Yes 800
City of San Mateo 2021 – Present Yes Yes Yes 900
City of Santa Clarita 2022 – Present Yes Yes Yes 1,200
City of Seal Beach 2017 – Present Yes Yes Yes 410
City of Shafter 2017 – Present Yes Yes Yes 400
City of Stockton 2012 – Present Yes Yes N/A 3,000
City of Tracy 2021 – Present Yes Yes Yes 960
Town of Tiburon 2022 – Present Yes Yes Yes 452
City of Visalia 2021 – Present Yes Yes Yes 650
Imperial County Transportation
Commission 2020 – Present Yes Yes Yes 600
Nevada County Transportation
Commission 2021 – Present Compliance
Services N/A N/A 450
San Diego Metropolitan Transit System 2005 – Present Yes Yes Yes 1,850
Shasta Regional Transportation Agency 2015 – Present Yes N/A N/A 400
Alameda County Water District 2018 – Present Yes Yes N/A 550
Camrosa Water District 2020 – Present Investment
Pool 120
Carmel Area Wastewater District 2022 – Present Yes Yes N/A 150
CAWD/PBSCD Wastewater Reclamation
Project 2022 – Present Yes N/A N/A 150
Central Basin Water District 2018 – Present Yes Yes N/A 400
Las Virgenes Municipal Water District 2014 – Present Yes N/A N/A 400
City of Lake Elsinore
11 | PUNGROUP.CPA
Municipalities Dates Financial
Audit
Single
Audit
GFOA
Certificate
Total
Hours
Los Angeles County Law Library 2020 – Present Yes N/A N/A 180
Marina Coast Water District 2012 – Present Yes N/A Yes 240
Menlo Park Fire Protection District 2015 – Present Yes Yes Yes 240
NALEO Educational Fund and NALEO 2020 – Present Yes N/A N/A 300
Olivenhain Municipal Water District 2019 – Present Yes Yes Yes 200
Padre Dam Municipal Water District 2020 – Present Yes Yes Yes 250
Rancho Murieta Community Services
District 2019 – Present Accounting and Consulting Services 800
Rancho Santa Fe Fire Protection District 2015 – Present Yes N/A N/A 120
San Bernardino County Emergency
Training Center 2020 – Present Yes N/A N/A 50
San Bernardino County Preschool
Services Department 2020 – Present Yes Yes N/A 150
San Bernardino County Fire Protection
District 2016 – Present Yes N/A N/A 200
San Elijo Joint Powers Authority 2016 – Present Yes N/A N/A 146
Santa Fe Irrigation District 2019 – Present Yes N/A N/A 250
Sweetwater Authority 2022 – Present Yes Yes Yes 270
South Bay Cities Council of
Governments 2020 – Present Yes N/A N/A 100
South Orange County Water Authority 2017 – Present Yes Yes Yes 240
South Bay Regional Public
Communications Authority 2015 – Present Yes N/A N/A 100
Southwestern Community College
District 2009 – Present Yes Yes N/A 720
Valley Sanitary District 2015 – Present Yes N/A Yes 140
West Valley Mosquito and Vector Control
District 2016 – Present Yes N/A N/A 100
Zone 7 Water Agency 2020 – Present Yes Yes Yes 400
City of Lake Elsinore
12 | PUNGROUP.CPA
City of Lake Elsinore
13 | PUNGROUP.CPA
Firm’s Experience with Single Audit and Grants
The Pun Group LLP works with numerous organizations that receive extensive governmental funding and are subject
to auditing under Uniform Grant Guidance. This Firm’s specialization helps our audit team understand the procedures’
nuances and execute the engagement accordingly. We also assist in preparing the data collection form and preparing
the reporting package for submission to the federal audit clearinghouse.
The Firm is a member of the AICPA Governmental Audit Quality Center and has demonstrated its commitment to
audit quality, including those performed under Government Auditing Standards and Uniform Guidance. Also, we are
a recipient of the Single Audit Resource Center’s Award for Excellence. This award is based on the positive feedback
result from our clients in an independent survey, demonstrating our Firm’s highest commitment to quality and client
satisfaction.
We utilize standardized audit programs from the federal government’s Compliance Supplement to ensure that our
procedures meet federal standards. Our audit programs are continually updated to reflect the revisions of OMB.
Our Uniform Guidance risk-based approach focuses on areas of higher risk of noncompliance. Such an approach
truly reflects the federal government's intent by concentrating on the following four steps:
1. Planning & Internal control assessment: The engagement team will obtain an understanding of the City and
its operating environment and its internal control over the Schedule of Expenditures of Federal Awards. The
engagement team will perform the major program determination and communicate with the City’s management
before conducting major program testing.
2. Testing & compliance assessment: The engagement team will obtain an understanding of internal control
over compliance on the direct and material compliance requirements for each major program. The engagement
will perform testing on internal controls over compliance to ensure the controls are in place working effectively
and properly and that the City is in compliance with the applicable regulations in administering major programs.
3. Reporting & Review: The engagement team will review and prepare the single audit reports and perform
quality control procedures following the Quality Control Standards issued by the AICPA. Any comments will be
issued to the management or the Charge with Governance, depending on the magnitude of the issues. Upon
obtaining the final approvals from management, the Single Audit report will be issued.
4. Issuance to Clearing House: The engagement team will assist the City in drafting the data collection form
and completing the final submission, including uploading the audit package to the Federal Clearing House.
City of Lake Elsinore
14 | PUNGROUP.CPA
Our Firm has audited hundreds of millions of dollars in federal expenditures, making our engagement team uniquely
experienced in single audits. We are familiar with grantors, such as:
Following are a few examples of the types of federal programs our engagement team has experience auditing:
Assistance
Listings
Child and Adult Care Food Program 10.558
Community Development Block Grants/Entitlement Grants 14.218
Home Investment Partnership 14.239
Housing Vouchers Cluster 14.871
Title XVI Water Reclamation and Reuse Program 15.504
Equitable Sharing Program 16.922
WIA/WIOA Adult Program 17.258
WIA/WIOA Youth Activities 17.259
WIA/WIOA Dislocated Worker Formula Grants 17.278
Airport Improvement Program 20.106
Highway Planning and Construction 20.205
Federal Transit - Capital Investments Grants 20.500
Federal Transit - Formula Grants 20.507
Minimum Penalties for Repeat Offenders for Driving While Intoxicated 20.608
Capitalization Grants for Clean Water State Revolving Funds Cluster 66.458
Special Programs for the Aging - Title III, Part B - Grants for Su pportive Services and Senior Centers 93.044
Special Programs for the Aging - Title III, Part C - Nutrition Services 93.045
Nutrition Services Incentive Program 93.053
Temporary Assistance for Needy Families (TANF) State Programs 93.558
Community Service Block Grant 93.569
Child Care and Development Block Grant 93.575
Child Care Mandatory and Matching Funds of the Child Care and Development Fund 93.596
ARRA - Emergency Contingency Fund for Temporary Assistance for Needy Families (TANF) State Program s 93.714
National Urban Search and Rescue (US&R) Response System 97.025
Homeland Security Grant Program 97.067
Corporation for National and Community Services
Department of Agriculture
Department of Education
Department of Health and Human Services
Department of Housing and Urban Development
Department of Transportation
Environmental Protection Agency
Department of Commerce
Department of Labor
Department of Homeland Security
Department of Justice
Department of Treasury
Executive Office of the President
City of Lake Elsinore
15 | PUNGROUP.CPA
Firm’s Experience with Finance and Community Development Institutions
Our Firm has provided professional services to several Finance Authorities, as well as Community Development
Agencies. Some examples are:
Finance Authorities:
City of Bell Public Finance Authority
City of Desert Hot Springs Financing Authority
City of Hercules Public Financing Authority
City of Lakewood Public Financing Authority
City of Madera Financing Authority
City of Palm Springs Public Financing Authority
City of Patterson Financing Authority
West Patterson Financing Authority
City of Perris Public Financing Authority
City of Pomona Public Financing Authority
Town of Danville Financing Authority
Community Development Agencies:
City of Lodi (Special Purpose Audits – Community Development Block Grant/Home Funds)
Morgan Towers (Multi-Family Program), National City Community Development Commission
National City Community Development Commission
Perris Community Economic Development Corporation
Firm’s Experience with Housing Authorities and Subsidized HUD Programs
The assigned engagement team will count on their experience with numerous financial and compliance audits as
well as agreed-upon procedures to deliver the requested services. Our team has extensive experience with the
following subsidized HUD programs:
Housing Choice Voucher (HCV)
Family Self Sufficiency (FSS)
Shelter Plus Care (SPC)
Housing Opportunities for Persons with AIDS (HOPWA)
Veterans Affairs Supportive Housing (VASH)
Community Development Block Grant (CDBG) – City of Lynwood
HOME Investment Partnership Grant (HOME) – City of Lynwood
In addition, our Firm has provided professional services to several Housing Authorities. Some examples are:
Calexico Housing Authority
Culver City Housing Authority
Douglas Housing Authority, AZ
Encinitas Housing Authority
Glendora Housing Authority
Lakewood Successor Housing Authority
National City Community Development Commission
Napa Housing Authority
Morgan Towers (Multi-Family Program), National City Community Development Commission
Monterey Park Housing Authority
Perris Housing Authority
Pomona Housing Authority
Poway Housing Authority
Housing Authority of the Redding
South Gate Housing Authority
City of Lake Elsinore
16 | PUNGROUP.CPA
Firm’s Expertise and Experience in Governmental Accounting Rules and Regulations, Including
Implementation of new GASB Pronouncements
Changing federal laws, statutes, ordinances, and compliance provisions have created unprecedented complexity in
public accounting today. Our GASB Implementation Specialist, Mr. Gary Caporicci, has helped our clients implement
new standards while adapting to changes within the existing standards. Our partners serve on committees that have
input into how new standards are written. They actively participate in industry associations focused on state and local
governments. By participating in industry associations and activities, we are always up to date on the latest industry
changes and their impact on your operations. We will keep you and our colleagues in the Firm fully informed of these
developments.
Also, our professionals are familiar with the complexities of governmental accounting, auditing, and financial
reporting, including but not limited to all GASB pronouncements, the Single Audit Act, and Uniform Guidance (formerly
known as OMB Circular A-133) and fund operations. They have held positions as professional certified public
accountants and taken on significant roles within and outside government agencies. Such experience brings to our
clients the thought leadership, quality, and level of expertise they require.
The Firm is well versed and experienced in assisting our clients with the implementation of the applicable GASB
pronouncements every year, such as GASB 34, GASB 54, GASB 65, GASB 68, GASB 75, and GASB 84. Mr. Gary
Caporicci, as a chair of the California Committee on Municipal Accounting “CCMA,” wrote “white papers” on each of
these pronouncements.
Throughout the engagement, several new GASB pronouncements will become effective. The Engagement Team will
pay specific attention to upcoming statements that will become effective and work with the City to create a plan to
address new standards before the implementation period. This step will allow the finance department staff the
needed time to be prepared.
Special Attention: GASB Pronouncements Effective for Reporting Year 2023
GASB Statement No. 87, Leases
The objective of this Statement is to better meet the information needs of financial statement users by improving
accounting and financial reporting for leases by governments.
Effective Date: The requirements of this Statement are effective for fiscal years beginning after June 15, 2021,
and all reporting periods thereafter.
GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements
The primary objective of this Statement is to improve financial reporting by addressing issues related to public-
private and public-public partnership arrangements (PPPs).
Effective Date: for fiscal years beginning after June 15, 2022, and all reporting periods thereafter.
GASB Statement No. 96, Subscription-Based Information Technology Arrangements
This Statement provides guidance on the accounting and financial reporting for subscription-based information
technology arrangements (SBITAs) for government end users (governments).
Effective Date: for fiscal years beginning after June 15, 2022, and all reporting periods thereafter.
City of Lake Elsinore
17 | PUNGROUP.CPA
Our Professional’s Experience with Pensions and Other Post-Employment Benefits
Members of our team have experience in providing professional services to the following employee retirement
systems:
California Public Employees' Retirement System (CALPERS)
Culver City Other Postemployment Benefit Plan
Nevada Public Employees Retirement Systems
Sacramento County Employees’ Retirement System
San Francisco Community College District
San Diego County Employees Retirement Association
San Diego City Employees’ Retirement System
San Diego Transit Corporation Employee’s Retirement Plan
San Jose Employee Retirement System
University of California Pension Plans
In addition, our team draws years of expertise reviewing budget documents as well as various pension and other
post-employment benefits (“OPEB”) plan documents, including but not limited to trust agreements, pension, and
OPEB actuarial reports, GASB 68 and 75 reports, as well as GASB 75 reports prepared under Alternative
Measurement Methods. A relevant list of plans includes:
California Public Employees' Retirement System GASB 68 reports
Public Agency Retirement System (“PARS”) GASB 68 reports
San Bernardino County Employees’ Retirement Association (“SBCERA”) GASB 68 reports
PARS GASB 75 reports
Firm's Experience with Tyler Technologies and Their Solutions
Our professionals are extremely familiar with Tyler Technologies and their software solutions. Our team will deploy
such experience to hit the ground running with no downtime. Some examples of our clients who utilize Tyler
Technologies are:
Client Name Office Industry
Madera, City of Santa Ana Local Government
Encinitas, City of San Diego Local Government
Rohnert Park, City of Walnut Creek Local Government
San Elijo JPA San Diego Special District
Shafter, City of Santa Ana Local Government
Lodi, City of Walnut Creek Local Government
Lakewood, City of Orange County Local Government
Culver City, City of Orange County Local Government
Perris, City of Orange County Local Government
Lynwood, City of Orange County Local Government
Gardena, City of Orange County Local Government
Monterey, City of Orange County Local Government
South Gate, City of Orange County Local Government
South Bay Regional Communications Orange County Local Government
City of Lake Elsinore
18 | PUNGROUP.CPA
Partner, Supervisory, and Staff Qualifications and Experience
Who We Are
The engagement team was carefully selected to provide the City with all the services needed to successfully complete
the audit. Your assigned Engagement and Technical Partners will be personally involved in the project, leading a
team that has significant experience in governmental auditing. You can be confident that our broad experience and
technical capabilities will allow us to provide technical support, interpret findings, and offer practical solutions to any
issues that may arise.
About Your Engagement Team
The personnel assigned to this engagement are fully qualified to perform an effective audit of the City, and their
extensive experience will be critical to the audit process. Our professionals are familiar with the complexities of
governmental accounting, auditing, and financial reporting, including but not limited to all GASB pronouncements,
the Single Audit Act, Uniform Guidance (formerly known as OMB Circular A-133), and fund operations. They have
held positions as professional certified public accountants, as well as significant roles within and outside of
government agencies. Such qualities will bring to an entity like the City of Lake Elsinore the thought leadership,
quality, and level of experience it requires.
Because of the “familiarity threat” under the professional audit and independence standards that may exist in long-
term relationships with audit firms, the Firm is committed and has sufficient resources to rotate engagement partners,
managers, and or supervisors assigned to the City’s audit with personnel with similar or higher qualifications and
experience in order to overcome this threat.
If the Firm changes key personnel, we will provide the City with a written notification. Engagement partners,
managers, and specialists will only be changed with the express prior written permission from the City. Audit
personnel may be replaced only by those with similar or better qualifications and experience.
Kenneth H. Pun, CPA, CGMA | Engagement/Lead Partner
Kenneth Pun is the Managing Partner and an Assurance Partner at the Firm. With over
twenty-one years of public accounting experience in the state and local government sector,
he specializes in audits, management, and consulting for governmental organizations. Mr.
Pun served as the Contract Deputy Finance Director for the City of San Marino in 2017. He
has served as the Chair of the California Society of CPAs Governmental Auditing Accounting
Committee. He is a Certified Public Accountant and a Chartered Global Management
Accountant.
Mr. Pun will actively serve as the Engagement/Lead Partner overseeing the Engagement
Team, developing the audit plan, reviewing fieldwork for quality, approving final reports, and
communicating with the Finance Department. He will also be responsible for the timely
delivery of all services for the City.
Coley Delaney, CPA | Technical/Concurring Partner
Coley Delaney is a Partner within The Pun Group LLP’s Assurance division, in his fifteen (15)
years of accounting and auditing experience. He has performed audits and other attestation
services for several governmental agencies throughout California, including cities, counties,
transportation agencies, public financing authorities, housing authorities, redevelopment
agencies, and special districts. He is a Certified Public Accountant.
Mr. Delaney will act as the Technical/Concurring Partner and provide a second partner review
of significant high-risk areas, audit reports, and resolution of significant accounting, auditing,
and reporting matters.
City of Lake Elsinore
19 | PUNGROUP.CPA
Andrew Roth, CPA | Compliance Partner
Andrew Roth is a Partner within the Firm and will serve as the primary point of contact for
your team. He holds an Advanced Certification in Single Audits through the AICPA. Andrew
draws more than a decade of governmental and not-for-profit experience in the areas of
financial audit and reporting under governmental and financial accounting standards,
evaluation of internal controls under the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) Integrated Framework, the performance of Single Audits
under the Uniform Guidance, subrecipient monitoring of Federal Grants, corporate financial
reporting, data analytics, and exempt taxation. He is a Certified Public Accountant.
Mr. Roth will lead the audit team in all compliance-related matters, including the Uniform
Guidance and Single Audit, and reports issued under specific laws and regulations.
John (“Jack”) F. Georger, CPA, CIA, CGMA | Quality Control Reviewer
Throughout his forty years of experience, Mr. Georger has spent many years in the “Big 4”
and national firms. He worked diligently alongside numerous governmental municipalities,
including cities, counties, and transportation agencies, as well as not-for-profit entities,
providing clients with financial and compliance auditing as well as consultation services. Mr.
Georger annually instructs over 300 hours in accounting and auditing subjects and has
authored training material in governmental accounting and auditing for the AICPA. Mr.
Georger is also the technical reviewer of the CCH Knowledge-Based Audits™ of State and
Local Governments with Single Audits, GAAP Guide (FASB), and Governmental GAAP Guide
(GASB), the gold standard for audit firms throughout the United States. As the Chief Quality
Officer in our Firm, he advises clients with their complex accounting questions and supports
the engagement team with audit issues. He is a Certified Public Accountant, a Certified
Internal Auditor, and a Chartered Global Management Accountant.
Mr. Georger is responsible for reviewing all reports issued by the Firm to ensure the utmost
quality and compliance with professional standards and the final quality-control assessment
within the engagement.
Gary M. Caporicci, CPA, CGFM, CFF | GASB Implementation Specialist
Gary Caporicci is an appointed member of the State Controller’s Retirement Advisory
Committee. Mr. Caporicci is a leading expert and has authored and taught several courses
for CalCPA and AICPA on GASB 68, Accounting and Financial Reporting for Pensions, and
GASB 75, Accounting and Financial Reporting for Postemployment Benefits Other than
Pensions. As an assurance partner with over forty years of experience, Mr. Caporicci has
performed financial, compliance audit, and consultation services to government clients,
including cities, counties, transportation agencies, and school districts, as well as various not-
for-profit entities. He is a Certified Public Accountant, a Certified Government Financial
Manager, and Certified in Financial Forensics.
Mr. Caporicci will utilize his expertise in providing advice and consultation during the
implementation of the new GASB standards.
David Siris, CPA | Engagement/Project Manager
David Siris draws more than ten years of governmental accounting experience. Mr. Siris has
successfully performed audits and other attestation services for several governmental and
non-profit agencies. He is a Certified Public Accountant.
Mr. Siris will serve as the primary point of contact for your team and will work to ensure the
services are conducted within the deadlines and will provide updates on our team’s progress
to the partners and you.
City of Lake Elsinore
20 | PUNGROUP.CPA
Continuing Education and Professional Development
Because of our commitment to providing the highest quality of services to the City, we provide our professionals with
technical training to ensure our people stay current on topics within the industry sectors and better equip themselves
to serve our clients.
All professionals are required to obtain continuing education that exceeds the requirements of the American Institute
of Certified Public Accountants (AICPA) and, where applicable, Government Auditing Standards. Our professionals
participate in continuing education programs through the following means:
Governmental Accounting and Auditing Conference sponsored by AICPA.
Webinar sponsored by AICPA Government Audit Quality Center.
Annual Conference sponsored by California Society Municipal Finance Officers.
Governmental Accounting and Auditing Conference sponsored by CalCPA.
The Pun Group in-house training on government-specific topics, including but not limited to: GASB updates,
Government Auditing Standards Revision, Fraud in State and Local Governments, COSO Internal Control-
Integrated Framework, Audit of State and Local Governments, Single Audit, and Mindbridge AI Auditors™.
In 2022, our government professionals received an average of 52 hours of continuing professional
education, compared with the 40 hours of accounting industry requirement.
By expanding our knowledge through these seminars/conferences, we can provide the right solutions to our clients.
Staff Continuity
The Pun Group LLP is committed to maintaining staff continuity throughout audit engagements, and we can assure
you that the partners assigned to this audit will be involved throughout the entire contract term.
While we cannot guarantee that our staff-level members will stay with the Firm, we encourage loyalty by paying
competitive wages, offering opportunities for promotion, using state-of-the-art equipment, and providing excellent
working conditions. Also, we offer benefits, including retirement plans, medical plans, profit-sharing programs, and
continuing education.
Quality-Control System
Our Firm meticulously monitors the quality and contents of our reports. The Pun Group LLP is 100% committed to
providing only the highest grade of work possible for our clients and for those who rely on our audits. The Firm strives
to exceed professional industry standards because of the continuing respect for our clients and our emphasis on
creating long-lasting relationships. The Pun Group LLP works exclusively with those who share the same moral
integrity and values. Our quality-control system has been crafted with excellence in mind. It not only meets AICPA
standards but also matches our own elevated standards, which include following various professional development
activities.
Engagement Team Resumes
The City of Lake Elsinore deserves experienced professionals who work as a team. The Pun Group LLP will provide
qualified professionals to perform the audit. No subcontractors will be utilized to perform the requested services.
Resumes for key engagement team members are presented as follows:
City of Lake Elsinore
21 | PUNGROUP.CPA
EXPERIENCE
Kenneth H. Pun is the Managing Partner and an Assurance Partner at The Pun Group LLP, which he founded
in 2012 after serving in senior-level positions for well-established national and regional firms. Under his
leadership, The Pun Group has become one of the “Top Accounting Firms” in Orange County, according to
the Orange County Business Journal. The Pun Group is also on the list of CalCPA's Top 150 firms.
Prior to founding The Pun Group, Ken served clients in a variety of industries, including small to very large
state and local governmental agencies, insurance companies, not-for-profits, healthcare, technology, and
manufacturing and distribution clients. His career in public accounting was spent primarily with Regional
firms and National firms.
Leveraging more than 21 years of public accounting experience, Ken has earned a reputation of being a
trusted advisor to governmental and Healthcare organizations throughout California and neighboring states.
Municipalities and public agencies engage him because of his premier level of client service, commitment,
and innovative methods of increasing operational efficiencies and reducing costs.
Ken maintains his deep commitment to professional education through his work as an instructor for the
California Education Foundation. He has authored training materials in governmental accounting and
auditing, such as Financial Reporting for State and Local Governments, 2018 Government Auditing
Standards, and Single Audit Fundamentals for California Education Foundation. He is also the technical
reviewer of the CCH Knowledge-Based Audits™ of State and Local Governments with Single Audits. He
advises clients on those topics at influential industry forums. Internally, Ken mentors audit teams by
providing direction and technical guidance to ensure adherence to the firm’s quality controls.
EDUCATION
University of California, Riverside
B.S. Degree – Business Administration, Emphasis in Accounting
LEADERSHIP & AFFILIATIONS
Member, American Institute of Certified Public Accountants (AICPA)
Member, California Society of Certified Public Accountants (CalCPA)
Past Chair, CalCPA Governmental Accounting and Auditing Committee
Member, CalCPA California Committee on Municipal Accounting
Member, CalCPA Governmental Accounting and Auditing Conference Planning Committee
Member Government Finance Officers Association (GFOA)
Member, California Society of Municipal Finance Officers (CSMFO)
Member, CSMFO Professional Standards Committee
Speaker, CSMFO Conference (2014 and 2018)
Instructor, CalCPA Education Foundation
Technical Reviewer, CCH Knowledge-Based Audits™ of State and Local Governments with Single
Audits
RELEVANT EXPERIENCE
City of Stockton City of San Bernardino
City of Palm Springs City of Desert Hot Springs
City of Lakewood City of National City
City of Pomona City of Redding
City of Clovis City of Shafter
CONTINUING PROFESSIONAL EDUCATION
Various courses are offered by the Firm online through Thompson Reuters, AICPA, and CalCPA
Education Foundation, including:
Governmental and Nonprofit Annual Update
Government Auditing Standards
GASB Basic Financial Statements for State and Local Governments
Single Audits: Uniform Guidance (formerly OMB Circular A-133)
Financial Accounting Standards Board Annual Updates
Statement on Standards for Accounting and Review Services Updates
Has met/exceeded the current CPE educational requirements to perform audits of governmental
agencies.
Kenneth H. Pun
CPA, CGMA
Engagement/
Lead Partner
EMAIL
ken.pun@pungroup.cpa
WEBSITE
www.pungroup.cpa
Expertise:
CITIES
COUNTIES
TRANSPORTATION
AGENCIES
ENTERPRISE
OPERATIONS
HIGHER
EDUCATION
NOT-FOR-PROFIT
Licensed to Practice in:
California
City of Lake Elsinore
22 | PUNGROUP.CPA
EXPERIENCE
Coley Delaney is a Partner within The Pun Group LLP Assurance division. In his fifteen (15) years
of accounting and auditing experience, Coley has worked with governmental agencies, not-for-
profit entities, and private for-profit entities. He specializes in conducting financial audits under
GAO Yellow Book standards and compliance audits in accordance with Uniform Guidance
(formerly known as OMB Circular A-133).
Mr. Delaney has performed audits and other attestation services for several governmental
agencies throughout California, including cities, counties, redevelopment agencies, public
financing authorities, housing authorities, transportation agencies, and special districts, and he
has helped them publish their Comprehensive Annual Financial Reports in compliance with
GASB Statement No. 34.
Mr. Delaney develops training materials and shares his expertise internally with other Firm
professionals. Coley is a frequent speaker at in-house seminars on topics related to government
auditing standards and Single Audits.
EDUCATION
University of California, Santa Barbara
B.A. Degree – Business Economics, Emphasis in Accounting
LEADERSHIP & AFFILIATIONS
Member, American Institute of Certified Public Accountants (AICPA)
Member, California Society of Certified Public Accountants (CalCPA)
RELEVANT EXPERIENCE
City of Stockton City of San Bernardino
City of Encinitas City of Escondido
City of Shafter City of National City
City of Fairfield City of Hermosa Beach
City of Industry San Diego Metropolitan Transit System
CONTINUING PROFESSIONAL EDUCATION
Various courses are offered by the Firm online through Thompson Reuters, AICPA, and
CalCPA Education Foundation, including:
Governmental and Nonprofit Annual Update
Government Auditing Standards
GASB Basic Financial Statements for State and Local Governments
Single Audits: Uniform Guidance (formerly OMB Circular A-133)
Financial Accounting Standards Board Annual Updates
Statement on Standards for Accounting and Review Services Updates
Has met/exceeded the current CPE educational requirements to perform audits of
governmental agencies.
Expertise:
CITIES
COUNTIES
TRANSPORTATION
AGENCIES
SPECIAL
DISTRICTS
HIGHER
EDUCATION
NOT-FOR-PROFIT
Licensed to Practice in:
California
Coley Delaney
CPA
Technical/
Concurrent Partner
EMAIL
coley.delaney@pungroup.cpa
WEBSITE
www.pungroup.cpa
City of Lake Elsinore
23 | PUNGROUP.CPA
EXPERIENCE
Andrew Roth is a Partner within The Pun Group LLP. He has more than twelve (12) years of
governmental and not-for-profit experience in the areas of financial audit and reporting under
governmental and financial accounting standards, evaluation of internal controls under the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) Integrated
Framework, the performance of Single Audits under the Uniform Guidance, subrecipient
monitoring of Federal Grants, corporate financial reporting, data analytics, and exempt taxation.
His client portfolio consists of moderate to large municipalities (cities and counties), municipal
transportation districts, water districts, municipal electric utilities, and not-for-profit organizations
whose missions involve building communities. His governmental agency clients have federal
grant expenditures that range from $100 million to $750 million annually.
In various engagements, Andrew has been responsible for leading the service delivery where
he has actively contributed and managed the planning process, implementation of the audit
work plan, supervision of multiple audit teams, and provided yearly team updates on the
changes in compliance testing requirements for the Single Audits, and preparation of all
deliverables including the Annual Comprehensive Financial Reports, the Single Audit,
Compliance Reports, Data Collection Forms, and City Council/Board presentations. He has also
been a guest speaker on topics involving Federal grants, such as updates to Yellow Book
Standards, Compliance Auditing, and Updates to the Uniform Guidance Procurement
Requirements.
EDUCATION
San Diego State University
B.A. Degree – Accounting
LEADERSHIP & AFFILIATIONS
Member, American Institute of Certified Public Accountants (AICPA)
Member, California Society of Certified Public Accountants (CalCPA)
RELEVANT EXPERIENCE
City of San Bernardino City of National City
City of Placerville City of Shafter
City of Beaumont
City of Lodi
Imperial County Local Transportation
Authority
City of Clovis San Diego Metropolitan Transit System
CONTINUING PROFESSIONAL EDUCATION
Various courses offered by the Firm online through Thompson Reuters, AICPA, and CalCPA
Education Foundation, including:
Governmental and Nonprofit Annual Update
Government Auditing Standards
GASB Basic Financial Statements for State and Local Governments
Single Audits: Uniform Guidance (formerly OMB Circular A-133)
Financial Accounting Standards Board Annual Updates
Statement on Standards for Accounting and Review Services Updates
Has met/exceeded the current CPE educational requirements to perform audits of
governmental agencies.
Andrew Roth
CPA
Compliance
Partner
EMAIL
andrew.roth@pungroup.cpa
WEBSITE
www.pungroup.cpa
Expertise:
CITIES
COUNTIES
TRANSPORTATION
AGENCIES
ENTERPRISE
OPERATIONS
HIGHER
EDUCATION
NOT-FOR-PROFIT
Licensed to Practice in:
California
Arizona
City of Lake Elsinore
24 | PUNGROUP.CPA
EXPERIENCE
Jack Georger is the Chief Quality Officer within The Pun Group LLP’s Assurance division. By
leveraging more than forty (40) years of public accounting and auditing experience in the government,
agribusiness, financial services, manufacturing, and nonprofit sectors, Mr. Georger brings in-depth
knowledge and practical expertise to each engagement.
Jack coordinates, plans, and manages financial audit activities, consulting activities, federal and state
compliance audit activities, performance audits, and numerous quality control and internal control
reviews for a broad mix of governmental agencies and programs throughout the United States.
Mr. Georger leads our Peer Review department providing peer review services to other firms under
the practice monitoring program of the AICPA.
Mr. Georger is a continuing professional education course instructor for the AICPA. Annually, he
instructs over 300 hours in accounting and auditing subjects. Jack has authored training material in
governmental accounting and auditing for the AICPA. He is the technical reviewer of the CCH
Knowledge-Based Audits™ of State and Local Governments with Single Audits, GAAP Guide (FASB),
and Governmental GAAP Guide (GASB).
Mr. Georger is licensed to practice as a certified public accountant in the states of California, New
York, Virginia, Maryland, the District of Columbia, Missouri (inactive), Connecticut (inactive), and
Wyoming (inactive). He is a Certified Internal Auditor (CIA).
EDUCATION
George Mason University Fairfax, Virginia
B.S. Degree – Accounting
LEADERSHIP & AFFILIATIONS
Member and Instructor, American Institute of Certified Public Accountants (AICPA)
Member, Institute of Internal Auditors
Member, California Society of Certified Public Accountants (CalCPA)
Member, New York Society of Certified Public Accountants (NYSSCPA)
Chairman, NYSSCPA Government Accounting and Auditing Committee
Member, NYSSCPA Auditing Standards Committee
Member, NYSSCPA Sustainability Committee
Member, NYSSCPA Not-for-Profit Committee
Nevada Society of Certified Public Accountants (NSCPA)
Member, Government Finance Officers Association (GFOA) – Reviewer
Member, Institute of Internal Auditors
CONTINUING PROFESSIONAL EDUCATION
He has instructed over 300 hours of municipal accounting courses offered by the AICPA.
Has met/exceeded the current CPE educational requirements to perform audits of governmental
agencies.
John F. Georger, Jr.
CPA, CIA, CGMA
Quality Control
Reviewer
EMAIL
jack.georger@pungroup.cpa
WEBSITE
www.pungroup.cpa
Expertise:
CITIES
COUNTIES
TRANSPORTATION
AGENCIES
ENTERPRISE
OPERATIONS
HIGHER
EDUCATION
NOT-FOR-PROFIT
Licensed to Practice in:
California
Arizona
Nevada
City of Lake Elsinore
25 | PUNGROUP.CPA
EXPERIENCE
Gary M. Caporicci has more than forty years of diversified business experience, including a
specialization in audit and management consulting for government organizations. Gary’s clients
include public and private universities and colleges, city and county governments, state agencies,
joint power authorities, healthcare agencies, transportation agencies, and special districts. Known for
his expertise in the areas of construction and government, Gary wrote the AICPA audit guides on
these topics, and he has authored many audit and accounting courses for professional groups, as
well as academic institutions. He frequently speaks and lectures at many professional organizations,
governmental seminars, and conferences held by industry associations, other accounting firms, and
universities. Also, he authors white papers for the California Committee on Municipal Accounting.
Before working with the Firm, Gary founded his accounting practice. He also spent eleven years with
a “Big Eight” professional services firm, where he was an Audit Manager and gained broad experience
in a wide range of industries such as government, construction, manufacturing, mutual funds, and
insurance. Gary has held a consultant position with a “Big Four” practice and was Vice President of
a national insurance and financial services company.
In 2015 Gary Caporicci was appointed to the State Retirement Advisory Committee by the State
Controller.
EDUCATION
Armstrong University
B.S. Degree – Accounting and Finance
LEADERSHIP & AFFILIATIONS
Member and Instructor, American Institute of Certified Public Accountants (AICPA)
Member, Author, and Instructor, California Society of Certified Public Accountants (CalCPA)
Past Chair, CalCPA Governmental Accounting and Auditing Committee
Chair and Speaker, CalCPA Governmental Accounting and Auditing State Conferences
Member, CalCPA Council
Chair, California Committee on Municipal Accounting (CCMA)
Member, Government Finance Officers Association (GFOA)
Member, California Society of Municipal Finance Officers (CSMFO)
Member, Governmental Accounting Standards Board (GASB)
Member, Deposit and Investment Risks Disclosure Task Force (GASB No. 40)
National Reviewer and Speaker, Government Finance Officers Association
Adjunct Professor, National University
Past Member, Texas Governmental Accounting and Auditing Committee
GFOA Certificate for Excellence in Financial Reporting – Reviewer
CONTINUING PROFESSIONAL EDUCATION
Author and instructor of various municipal accounting courses offered by the AICPA, CalCPA
Education Foundation, and local universities, including:
Governmental and Non-profit Annual Update
Government Auditing Standards
GASB Basic Financial Statements for State and Local Governments
Single Audits: Uniform Guidance (formerly OMB Circular A-133)
Financial Accounting Standards Board Annual Updates
Statement on Standards for Accounting and Review Services Updates
Has met/exceeded the current CPE educational requirements to perform audits of governmental
agencies.
Gary M. Caporicci
CPA, CGFM, CFF
GASB
Implementation
Specialist
EMAIL
gary.caporicci@pungroup.cpa
WEBSITE
www.pungroup.cpa
Expertise:
CITIES
COUNTIES
TRANSPORTATION
AGENCIES
ENTERPRISE
OPERATIONS
HIGHER
EDUCATION
NOT-FOR-PROFIT
Licensed to Practice in:
California
City of Lake Elsinore
26 | PUNGROUP.CPA
EXPERIENCE
David Siris, CPA, is an Assurance Services Manager at The Pun Group LLP with more than ten
years of experience in providing accounting and audit services, internal control and risk
evaluation, and business consulting to privately held and public companies. Mr. Siris has
worked with clients in a variety of industries, including cannabis, manufacturing and distribution,
large not-for-profits entities, and government entities.
David has been responsible for managing, planning, and performing financial and regulatory
external and internal audits, subrecipient monitoring of Federal Grants, and developing and
conducting internal control procedures and risk assessment evaluations. He has evaluated key
processes within companies to determine areas of operating inefficiencies or potential internal
control weaknesses and developed findings into recommended courses of action and into report
comments and recommendations for resolution.
Mr. Siris has also provided accounting support services to local not-for-profits and governments,
including financial statement analysis and preparation.
EDUCATION
Cal State University Fullerton, California
B.S. Degree - Finance
State of Arizona, Department of Public Safety
Level One Fingerprint Clearance
LEADERSHIP & AFFILIATIONS
Member, American Institute of Certified Public Accountants (AICPA)
Member, California Society of Certified Public Accountants (CalCPA)
RELEVANT EXPERIENCE
County of Santa Cruz City of Santa Barbara
City of Redding City of Cerritos
City of Phoenix Subrecipient Monitoring City of Stockton – Cannabis Audit
City of Santa Clarita Other Commercial Cannabis Audits
City of Stockton City of Stockton – Cannabis Audit
CONTINUING PROFESSIONAL EDUCATION
Various courses offered by the Firm online through Thompson Reuters, AICPA, and CalCPA
Education Foundation, including:
Governmental and Non-profit Annual Update
Government Auditing Standards
GASB Basic Financial Statements for State and Local Governments
Single Audits: Uniform Guidance (formerly OMB Circular A-133)
Financial Accounting Standards Board Annual Updates
Statement on Standards for Accounting and Review Services Updates
Preparation of Tax Returns for Not-for-Profits
Has met/exceeded the current CPE educational requirements to perform audits of governmental
agencies.
Expertise:
CITIES
COUNTIES
TRANSPORTATION
AGENCIES
ENTERPRISE
OPERATIONS
NOT-FOR-PROFIT
Licensed to Practice in:
California
David Siris
CPA
Engagement/
Project Manager
EMAIL
david.siris@pungroup.cpa
WEBSITE
www.pungroup.cpa
Expertise:
CITIES
TRANSPORTATION
AGENCIES
HOUSING
AUTHORITIES
ENTERPRISE
OPERATIONS
NOT-FOR-PROFIT
CANNABIS
COMPLIANCE
Licensed to Practice in:
California
City of Lake Elsinore
27 | PUNGROUP.CPA
Equal Employment Opportunity/Affirmative Action Philosophy
The Firm is an Equal Opportunity employer and complies with all Federal and State hiring requirements. The Firm
also supports Affirmative Action philosophies and works hard to provide disadvantaged groups with opportunities for
self-enhancement.
It is our intent to maintain a work environment that is free of discrimination or retaliation because of age, race, religious
creed (including religious dress and grooming practices), denial of family and medical care leave, color, national
origin (including language use restrictions), ancestry, physical disability (including HIV and AIDS), mental disability,
medical condition (cancer and genetic characteristics), genetic information, marital status, sex (including pregnancy,
childbirth, breastfeeding and/or related medical conditions), gender, gender identity, gender expression, and
transgender (including whether or not you have transitioned or are transitioning), sexual orientation, military or veteran
status, and retaliation for making a complaint about discrimination or participating in an investigation of a complaint
about discrimination or any other status protected by federal, state, or local laws. The policy also prohibits unlawful
discrimination based on the perception that anyone has any of those characteristics or is associated with a person
who has or is perceived as having any of those characteristics. Discrimination can also include failing to reasonably
accommodate religious practices or qualified individuals with disabilities where the accommodation does not pose an
undue hardship. All such discrimination is unlawful.
The Firm is dedicated to the fulfillment of this policy in regard to all aspects of employment, including but not limited
to recruiting, hiring, placement, transfer, training, promotion, rates of pay, and other compensation, termination, and
all other terms, conditions, and privileges of employment.
This commitment applies to all persons involved in Firm operations and prohibits unlawful discrimination by any
employee of the Firm, including supervisors and coworkers, clients or customers or suppliers, or other outside
persons.
Any staff member or applicant for employment who believes he/she has been the subject of unlawful discrimination
or witnessed such discrimination is instructed to submit a written complaint to our supervisor of the Human Resources
Department. Any supervisor receiving any written or other complain is to report any complaints of misconduct to
Human Resources to try to resolve the claim internally and promptly. The complaint should be specific and should
include the names of the individuals involved and the names of any witnesses. If you need assistance with your
complaint, or if you prefer to make a complaint in person, contact Human Resources. Confidentiality about your
complaint will be kept by the Firm to the extent possible, but the investigation cannot be completely confidential. The
Firm will conduct a prompt and thorough investigation of all allegations of discrimination, retaliation, or any violation
of the Firm's Equal Employment Opportunity Policy. The Firm will take appropriate corrective and remedial action if
and where warranted. The Firm prohibits retaliation against any employee who provides information about,
complains, or assists in the investigation of any complaint of discrimination or violation of the Firm's Equal
Employment Opportunity Policy.
We are all responsible for upholding the Firm's Equal Employment Opportunity Policy, and any claimed violations of
that policy should be brought to the attention of your manager and/or human resource personnel.
To comply with applicable laws ensuring equal employment opportunities to qualified individuals with a disability, the
Firm will make reasonable accommodations for the known physical or mental limitations of an otherwise qualified
individual with a disability who is an applicant or an employee unless undue hardship would result. Any applicant or
employee who requires an accommodation in order to perform the essential functions of the job should contact
Human Resources and discuss the need for accommodation. The Firm will engage in an interactive process with the
employee to identify possible accommodations if any, that will help the applicant or employee perform the job.
In addition, The Pun Group LLP is a small business enterprise with receipts of less than $20.5 million/year and can be
classified as a “minority-owned business” as an APA (Asian-Pacific American-Owned Business Enterprise). We also
have a culture of fostering and improving the advancement of women in their careers. Women make up 45% of our
partners and 50% of our managers.
City of Lake Elsinore
28 | PUNGROUP.CPA
Similar Engagements with Other Government Entities
References
The following are examples of some of the engagements with similar requirements as the City of Lake Elsinore’s
proposal. Please feel free to contact these agencies to learn more about their experiences working with us.
Name of Public Agency City of Stockton
Contact Info Mr. Jay Kapoor
(209) 937-5435
jay.kapoor@stocktonca.gov
Total Hours 3,000
Cost $272,000/year
Date of Services 2012 – Present
Scope of Work/Reports Prepared Financial Audit and Compliance Services: Annual Comprehensive Financial
Report, GFOA Award, Single Audit, GANN Limit, Measure A, Measure W,
Measure M, Entertainment Venues, Revenue and Expenditures related to
Downtown Marina, Cannabis License Audits, Review of Major Revenues
required by the Bankruptcy Agreement with Assured Guarantee.
Name of Public Agency San Diego Metropolitan Transit System
Contact Info Ms. Erin Dunn, Controller
(619) 557-4536
erin.dunn@sdmts.com
Total Hours Approximately 1,850 hours
Date of Services 2005 – Present
Dollar Value Contract $225,000/year
Scope of Work/Reports Prepared Financial Audit and Compliance Services: Annual Comprehensive Financial
Report Audit, GFOA Award, San Diego Transit Corporation Employee’s
Retirement Plan, AUP/National Transit Database (NTD): MTS, San Diego
Transit Corp., San Diego Trolley, Inc., AUP/Transportation Development Act
(TDA): MTS, San Diego Transit Corp., San Diego Trolley, Inc., AUP/Indirect
Costs, and Public Transportation Modernization Improvement Service
Enhancement Account (PTMISEA).
Name of Public Agency City of Tracy
Contact Info Ms. Sara Cowell
(209) 831-6862 | sara.cowell@cityoftracy.org
Total Hours 960
Contract Price $96,500/year
Date of Services 2021 – Present
Scope of Work/
Reports Prepared
Financial Audit and Compliance Services: Annual Comprehensive Financial
Report, GFOA Award, Single Audit, GANN Limit, National Transit Database
(NTD), State Controller’s Reports (City, PFA, Operating Partnership JPA, City’s
Transit Operator’s General Services, and Specialized Services)
City of Lake Elsinore
29 | PUNGROUP.CPA
Name of Public Agency City of Desert Hot Springs
Contact Info Mr. Geoffrey Buchheim, Finance Director
gbuchheim@cityofdhs.org
(760) 329-6411
Total Hours 700
Contract Price $75,000/year
Date of Services 2013 – Present
Scope of Work/Reports Prepared Financial Audit and Compliance Services: Annual Comprehensive Financial
Report Audit, GFOA Award, Single Audit, GANN Limit, Desert Hot Springs
Successor Agency, Desert Hot Springs Financing Authority, Desert Hot Springs
Health and Wellness Foundation, New Market Tax Credit Audit (Desert Hot
Springs Health and Wellness Foundation), Annual State Controller’s Reports,
AUP/Transient Occupancy Tax, Utility User Tax, DHS Housing Audits.
Name of Public Agency City of National City
Contact Info Mr. Phillip Davis, Financial Analyst
pdavis@nationalcityca.gov
(619) 336-4246
Total Hours 600
Cost $70,000/year
Date of Services 2013 – Present
Scope of Work/Reports Prepared Financial Audit and Compliance Services: Annual Comprehensive Audit, GFOA
Award, Single Audit, GANN Limit, HUD Single Audit/Morgan Towers, Financial
and Compliance Reports – Kimball Towers, Annual State Controller’s Report.
City of Lake Elsinore
30 | PUNGROUP.CPA
Specific Audit Approach
Scope of Work, Audit Approach, and Methodology
The City of Lake Elsinore is requesting the Firm to perform Professional Auditing Services and issue opinions on the
City’s financial statements. The audits are to be completed in accordance with all applicable and generally accepted
auditing standards, including, but not limited to, the following:
Generally accepted auditing standards as set forth by the American Institute of Certified Public Accountants
(AICPA).
US General Accounting Office’s (GAO) Standard for Audit of Governmental Organizations, Programs,
Activities, and Functions.
Local Governments and Governmental Accounting Standards Board (GASB) Pronouncements.
The standards applicable to financial audits contained in the most current version of the Generally Accepted
Government Auditing Standards (Yellow Book), issued by the Comptroller General of the United States.
The provisions of the Single Audit Act as amended in 1996.
The provisions of the US Office of Management and Budget (OMB) Uniform Guidance (formerly known as
Circular A-133), Audits of State and Local Governments and Non-profit Organizations, and the Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
The Firm will perform the following services:
Financial Statement Audits and issuance of an opinion statement on the Annual Comprehensive Financial
Report of the City of Lake Elsinore. The audit will be conducted in accordance with Generally Accepted
Government Auditing Standards. The report will be in full compliance with all current GASB pronouncements.
The following component units will be audited as part of the audit of the City’s financial statements:
Lake Elsinore Public Financing Authority
Lake Elsinore Recreation Authority
Successor Agency Redevelopment Agency
Lake Elsinore Facilities Financing Authority
In addition, the Firm will assist in meeting the requirements for the Government Finance Officers Association
(GFOA) “Certificate of Achievement for Excellence in Financial Reporting.”
Prepare a Single Audit Report which will include the following:
o Report on compliance and on internal control over financial reporting based on an audit of financial
statements performed in accordance with Government Auditing Standards.
o Report on compliance with requirements applicable to each major program, internal control over
compliance, and on the schedule of expenditures of federal awards in accordance with Uniform
Guidance, “Audits of State and Local Governments,” and the Single Audit Act of 1984 (Public Law
98-502).
o Schedule of Expenditures of Federal Awards.
o Notes to Schedule of Expenditures of Federal Awards.
o Schedule of Findings and Questioned Costs.
o Any other required schedules or reports.
o Prepare the Data Collection Form for Reporting on Audits of States, Local Governments, and Non-
Profit Organizations.
Audit and prepare the financial statements report related to the Successor Agency of the City of Lake
Elsinore.
Test compliance with Proposition 111, Article XIII.B – Review of Appropriation Limit Calculations (GANN).
Issue an Auditor’s Communication Letter with any reportable conditions found during the audit. A
reportable condition will be defined as a material weakness or significant deficiency.
Issue a separate "Management Letter" that includes recommendations for improvements on internal control,
accounting procedures, and other significant observations that are considered to be no reportable conditions.
Provide assistance in the implementation of applicable GASB pronouncements not yet in effect.
City of Lake Elsinore
31 | PUNGROUP.CPA
Provided By Client (PBC) Lists: They will be provided for both interim and final audits according to an agreed-upon
timeline between the engagement team and the City in order to be reasonably prepared for a field audit. The
engagement team will meet with the City’s management during the initial planning stage to discuss audit schedules
and review the prior year's audit findings (if any). We will deliver a list of all documents to be provided by the City’s
staff. Once such materials are agreed upon by the engagement team and City’s finance personnel, no other
schedules will be requested unless new information comes to light in the course of test work.
Attendance at Meetings and Hearings: The engagement team will participate in as many meetings with staff as
needed to perform the work scope tasks, present the audit plan prior to beginning fieldwork, and discuss the draft
audit reports. The team will attend public meetings to present and discuss its findings and recommendations. Once
all issues of discussion are resolved, the completed Financial Reports, Single Audit report (if applicable), and other
reports will be delivered to the City according to the agreed-upon schedule.
Proposed Audit Adjustments: All proposed adjusting journal entries by the Firm will be discussed and explained
in a timely manner with the designated Finance Department personnel. Such proposed adjustments will be in a format
that shows the lowest level of posting detail needed for data entry in the general ledger systems.
Supplemental Reports, Audits, or Agreed-Upon Procedures: Other services, such as agreed-upon procedures,
may be deemed necessary. These services will be performed at agreed-upon rates and will be added to a written
agreement before commencing audit work. The Firm and the City of Lake Elsinore will discuss and approve the
scope and associated costs of these tasks.
Advice and Consultation: Will be provided throughout the year on matters relating to accounting and financial
reporting. Such services do not include any task that entails significant research or a formal report.
GASB Implementation: The Firm will provide technical assistance and training in the implementation of applicable
GASB pronouncements not yet in effect. We have a dedicated partner, Mr. Gary Caporicci, who will be responsible
for providing advice and consultation for the implementation of these new standards. The Firm will advise the City
on the applicability of accounting and reporting standards and other accounting issues and provide guidance on new
note disclosures, GASB implementations, and other reporting requirements. We will also provide training, resources,
and information on topics relevant to the City’s financial reporting and operations. (Based on the scope, additional
charges may apply.)
Report of all Irregularities and Illegal Acts: The Firm will make an immediate written report of all irregularities and
illegal acts or indications of illegal actions of which we may become aware to the City Council, City Manager, Assistant
City Manager, and Finance Manager. The engagement team will also make all communications to the City required
by the audit standards under which the engagement is performed. The Firm will inform the Finance Manager of each
of the following:
The auditor’s responsibility under generally accepted auditing standards.
Significant accounting policies.
Management judgments and accounting estimates.
Significant audit adjustments.
Other information in documents containing audited financial statements.
Disagreements with management.
Management consultation with other accountants.
Major issues with management prior to retention.
Difficulties encountered in performing the audit.
Errors, irregularities, and illegal acts.
City of Lake Elsinore
32 | PUNGROUP.CPA
Working Paper Retention and Access to Working Papers: The Firm will retain, at its own expense, all working
papers and reports for a minimum of three (3) years unless the City of Lake Elsinore notifies the Firm in writing of the
need to extend the retention period. The Firm will make working papers available upon request by the City of Lake
Elsinore to the following parties or their designees:
City of Lake Elsinore;
U.S. Department of Housing and Urban Development;
U.S. General Accounting Office;
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 of Lake Elsinore is a component unit; and
Auditors of entities of which the City is a sub-recipient of grant funds.
Also, we will comply with reasonable requests from successor auditors and allow them to review working papers that
relate to matters of continuing accounting significance.
City of Lake Elsinore
33 | PUNGROUP.CPA
Methodology and Segmentation of Engagement
The Firm’s audit approach consists of six phases: Engagement Acceptance and General Planning, Planning and
Internal Control Evaluation, Fieldwork, Post Fieldwork, Report Preparation and Review, and Final Production.
1. Engagement Acceptance and General Planning: The engagement partner and manager will meet with
City’s management to obtain an update on current City policies and procedures, help identify risk areas and
new operations, and establish any specific requirements they may have. Our team will work on the
identification of unique transactions, implementation of new GASB pronouncements, and develop the audit
work plan for the engagement. Proposed timeline: to commence in April of each year.
2. Planning and Internal Control Evaluation: The engagement team, including the engagement partner, will
assess accounting policies adopted by the City in order to obtain an understanding of its structure and its
operating environment. Also, our team will review internal controls on all significant transaction classes,
perform walkthroughs and/or tests of internal controls, perform preliminary analytical procedures, develop
an initial risk assessment, evaluate Single Audit compliance, identify any audit issues, and prepare
confirmation correspondence. The engagement team and City’s Management will establish expectations,
including responsibilities and assignments for the year-end fieldwork, and will hold a progress status meeting
at the end of the interim phase. Proposed timeline: mid-April to early June.
3. Fieldwork: The engagement team, including the engagement partner, will conduct audit procedures on
account balances in the general ledger, finish confirmation procedures, perform data analysis using our AI
tools, search for unrecorded liabilities, perform substantial analytical review procedures, complete work on
compliance with Federal Assistance, and conclude fieldwork. The engagement team and City’s
Management will hold an exit conference at year-end. Periodic update meetings will be held to communicate
audit progress to management. Proposed timeline: early October of each year.
4. Post Fieldwork: During the phase, the engagement team, including the engagement partner, will review
all documents and evaluate commitments and contingencies. The team will perform an assessment of the
going concern and jointly plan for the next steps. Proposed timeline: immediately upon fieldwork
completion.
5. Report Preparation and Review: The Firm will review and prepare audit reports and perform quality control
procedures following the Quality Control Standards issued by the AICPA. We will also examine reports for
compliance with GFOA reporting guidelines at no additional cost. Any comments will be recorded in a letter
to management. At the City’s request, the engagement partner and manager will present the audit to City’s
Management and other governing bodies. Proposed timeline: Draft financial statements, notes, and all
required supplementary schedules by early November of each year for both ACFR and Successor Agency
Report.
6. Final Production: The final phase of our approach entails obtaining the management representation letter
and final financial statement report, which may include a final presentation to the City’s Management and
other governing bodies (if applicable). Proposed timeline: Provide all recommendations, revisions, and
suggestions for improvements to the ACFR to the Finance Manager by December 1 of each year. Final
reports are printed and delivered to the City no later than December 15 of each year.
The Firm will complete the audit fieldwork and issue all reports within the established timeframe, assuming no internal
circumstances within the City causes delays in the audit.
City of Lake Elsinore
34 | PUNGROUP.CPA
Level of Staff and Number of Hours to be Assigned to Each Segment of the Engagement
The Pun Group LLP understands that the City is not only looking to employ our auditing services but is also seeking
to receive value within that professional relationship. We believe that our value derives from the in-depth knowledge,
experience, and commitment that our auditing firm employs. We stress and emphasize “employ” because all of the
knowledge and expertise listed on paper will not benefit you unless it is applied. That is why we have developed a
plan that we feel will accomplish the objectives of the City and your particular needs. Our Firm will utilize the
information that you have shared with us and our experience from our previous audits of this nature from various
government entities and cities to develop a practical plan for all major areas.
Estimated Total Hours*:
Partner(s)
Director/
Manager
Supervisory
Staff Staff Clerical Total
Engagement Acceptance & General Planning 2 3 5 8 0 18
Planning & Internal Control Evaluation 3 5 7 12 0 27
Fieldwork 14 24 36 60 1 136
Post Fieldwork 10 16 24 40 1 90
Report Preparation & Review 14 24 36 60 1 136
Final Production 5 8 12 20 0 45
Total* 48 80 120 200 4 452
*Does not include CPE hours related to Governmental Webinars and/or optional services.
Sample Size and the Extent to Which Statistical Sampling is to be Used in this Engagement
In our audit approach, random and statistical sampling is used in conjunction with our skilled judgment and knowledge
of each situation. When designing an audit sample, our auditors consider the purpose of the audit procedure and
the characteristics of the population from which the sample will be drawn. We determine a sample size sufficient to
reduce sampling risk to an acceptably low level and select items for such a task in a way that we can reasonably
expect it to be representative of the relevant sample and likely to provide the auditor with a reasonable basis for
conclusions about the population.
Enhancing Auditing Quality with Artificial Intelligence
There are plenty of challenges with established audit practices. Outdated CAAT
tools, sampling practices, and the explosive growth of big data are some of the
examples, and they all present significant barriers to detecting anomalies,
intentional or otherwise, in financial data. The Pun Group deploys a
comprehensive, risk-based approach, complemented by using MindBridge™'s
Artificial Intelligence Platform, to conduct our audit. Through this tool, we can
seamlessly analyze thousands and thousands of financial and operating data
and records, identifying and cataloging significant risks in mere seconds.
The AI Auditor platform works by our side, augmenting our capacity to detect errors or fraud in the collected data not
only by analyzing the entire set but by cross-correlating dozens of testing criteria against pre-established data points
and presenting us with a view of every user, vendor, and transaction, by risk. All are happening within moments of
ingesting analyzed data, which is something standard audit procedures simply cannot accomplish.
We utilize these tools to allow our audit team to increase efficiency in the audit process, enhance the existing quality
of our work, provide directed testing in areas subject to the highest risk, and quickly assimilate large amounts of data
your staff would typically be asked to gather. The tools also help us to meet our professional requirements regarding
fraud and internal control, allowing us to:
Run Benford’s analysis to check for fraud in transactions.
Increase the value of audit findings with complete, 100% data coverage.
Isolate risk and control issues before they impact your operations.
Improve productivity by automating procedures and eliminating manual tasks.
Conduct more direct, efficient, and effective audits to improve overall service quality.
City of Lake Elsinore
35 | PUNGROUP.CPA
Our engagement team easily imports data in a secure environment from the City’s financial software and extracts
useful data for testing and analytical procedures particular to the following areas:
Successful Fraud Test Kickback or Conflict-of-Interest Schemes
Questionable Invoices Dormant Account Schemes
Phantom Vendor Schemes Money Laundering Schemes
Type and Extent of Analytical Procedures to be used in the Engagement
Analytical procedures are one of many financial audit processes that help an auditor understand the client’s operation
and changes in the environment and identify potential risk areas to plan other audit procedures. Such procedures
include a comparison of financial information on prior periods, budgets, forecasts, and industry benchmarks. We use
trend and ratio analysis to identify any uncertain or unusual events. To perform these analyses, our Firm surveys
cities and counties and develops benchmarks on specific vital financial indicators, such as the cost of services to tax
revenues ratios, average general fund balance, capital assets, debt-to-capital, and general fund unassigned fund
balance to total general fund expenditures, etc. Our engagement members have extensive experience in successfully
implanting analytical procedures to the City’s benefit.
Our analytical procedures process is performed during three stages of the audit: (a) at the start, (b) in the middle,
and (c) at the end. These three stages are risk assessment procedures, substantive analytical procedures, and final
analytical procedures:
Risk assessment procedures are used to assist the auditor in understanding the business better and in
planning the nature, timing, and extent of audit procedures.
Substantive analytical procedures are used to obtain evidential matters about particular assertions related
to the account balances or classes of transactions. During the interim phase, our engagement team will set
up expectations for the year-to-date results and balances and compare them with budgeted and prior-year
amounts. This process allows us to forecast year-end amounts, reducing the workload during the year-end
phase and allowing us to focus on areas of concern.
Final analytical procedures are used as an overall review of the financial information in the last review
stage of the audit. The Engagement Partner(s) and Manager(s) will perform a high-level analytical analysis
of the financial information, comparing its data both quantitatively and qualitatively to ensure the amounts
are fairly presented in all material respect in the financial statements.
Approach to be Taken to Gain and Document an Understanding of the Internal Control Structure
Audit risk assessment is established by an internal control review, combined with the engagement team’s
understanding of the City’s operations and accounting software. Using the Committee of Sponsoring Organizations
(COSO) Framework, staff members will evaluate the City’s processes and identify any control deficiencies. These
diagnostic review procedures allow the engagement team to assess the City’s systems and controls and to provide
constructive feedback to management.
During our initial planning phase of the audit, our engagement team, including the engagement Partner and Manager,
will obtain an understanding of the entity and its environment. It is an essential aspect of performing an audit under
generally accepted auditing standards. That understanding establishes a frame of reference within which the auditor
plans the procedures and exercises professional judgment about assessing risks of material misstatement of the
financial statements and responding to those risks throughout the examination.
During the interim phase of the audit, our engagement team will perform a walkthrough of all significant accounting
systems, including processes for financial reporting, revenue recognition and cash receipts, purchasing/contract
management and cash disbursements, payroll and related liabilities, and others. Our auditors will obtain the written
policies and procedures, inquiring accounting personnel, and document the process in either a flowchart or narrative
summary format. After gaining an understanding of the accounting and internal control systems, our auditor will make
a preliminary assessment of control risk, at the assertion level, for each material account balance or class of
transactions.
City of Lake Elsinore
36 | PUNGROUP.CPA
The form and extent of this documentation are influenced by the size and complexity of the entity and the nature of
its accounting and internal control systems. Generally, the more complex the entity’s accounting and internal control
systems and the more extensive the auditor’s procedures, the broader our documentation will need to be.
Approach to be Taken in Determining Laws and Regulations that Will be Subject to Audit Test Work
The Firm stays continually up to date with audit requirements—including new regulations, compliance supplements,
state guidelines, and related contracts—to ensure that we conduct audits under applicable laws and regulations. We
test transactions for compliance with the Single Audit Act, California Government Code, GANN Appropriations Limit,
provisions of applicable grant guidelines, requirements of local measures, and others.
For example, the Single Audit Act requires that we determine which grants to include in our audit and select
transactions from those grants for detailed testing. While most items will be tested as part of the Interim phase, we
cannot determine which grants will be selected for the Single Audit until the year-end/fieldwork stage of the audit.
Our compliance audits of cash, investments, debt covenants, and other areas will be performed following the
California Government Code, which has many provisions and regulations covering investments.
Approach to be Taken in Drawing Audit Samples for Purposes of Tests of Compliance
To test compliance, we will follow the AICPA’s Audit Sampling Considerations of Uniform Guidance Compliance
Audits. We will select an appropriate sample size based on our professional judgment and knowledge. Any deviations
from control and compliance requirements will be documented.
Objectives of Our Services
Our primary objective for the proposed audit is to examine the City’s financial statements and express our opinion on
the fairness of the presentation, following generally accepted accounting principles. Other objectives that will benefit
the City include the following:
To offer beneficial observations and recommendations about policies and procedures for accounting and
operating controls
To identify opportunities to make City operations more efficient and reduce costs
To perform the audit efficiently and effectively. Disruptions to office operations are kept to a minimum
To provide continuing advisory services so the City can implement recommendations
To meet these objectives at no additional cost to the City
The Engagement Team will perform the audit abiding by the Firm’s quality-control procedures, which include following
standard audit programs, careful planning, using industry-standardized software for auditing and internal control
documentation, and welcoming an objective review of audit work. In other words, our client-tailored approach
emphasizes careful planning, open communication, and proper assignment of responsibilities.
The Firm will supply portable computers to the on-site staff members.
City of Lake Elsinore
37 | PUNGROUP.CPA
Identification of Anticipated Potential Audit Problems
While we do not expect any problems with the audit, we will carefully investigate and monitor the following relevant
accounting issues:
Investments:
Compliance with GASB 31 and GASB 34
Authorization and approval process for City investments
Controls to assure the City’s compliance with investment limitations and types of specific investments
Monitoring by the City of its investments
Financial Reporting:
Compliance with current reporting and disclosure requirements issued by GASB
Compliance with the various GASBs in effect
Perform valuations of OPEB benefits to determine the liability for all benefits promised to active, retired, and
inactive plan members as of each valuation date
Compliance with Governmental Accounting Standards Board (GASB) Statements 74 and 75
Compliance with infrastructure obligations and regulatory provisions
Internal Control Structure:
City’s internal control functions and compliance with proper internal control philosophies
Computer-system processes and controls and adequacy of the control environment
City of Lake Elsinore
38 | PUNGROUP.CPA
“Prepared by Client” PBC List
Audit Firm’s Expectations of the Role and Participation of City’s Staff in the Audit Process
The engagement team will meet with the City’s management during the initial planning stage to discuss audit
schedules and review the prior year's audit findings (if any). We will deliver a list of all documents to be provided by
the City’s staff. Once such materials are agreed upon by the engagement team and City’s finance personnel, no
other schedules will be requested unless new information comes to light in the course of test work.
Our goal is to cause the least amount of interruptions to the City’s daily operations; therefore, to the extent possible,
we will use information in the form available from the City’s records.
We believe client/engagement team communication is vital to perform results satisfactorily. With that sentiment in
mind, we will hold regular meetings with the City’s management to determine the status of the audit as well as any
items which will require special attention. Open and frequent communication is critical.
A sample list exemplifying items requested in our PBC lists follows:
INTERIM AUDIT
Name Description
General
Directory Internal directory of City staff (name, position by department, email, phone
number)
Policies New or updated policies and procedures for Finance Department, Human
Resources, Information Technology, and Risk Management in PDF
Manual Copy of accounting manual (if available)
YTD TB Year-to-date Trial Balance as of interim fieldwork (Excel file)
Chart of Accounts Chart of accounts effective for FYXX-XX
Flowcharts Please update the attached flowchart/narrative provided for any changes in effect
in FYXX-XX
MOUs MOUs (if any new in effect for FYXX-XX)
Manual Journal Entries Journal Entry (JE) Report for all manual JEs during the year ended June 30,
20XX (Excel file)
Minutes Minutes -July 1, 20XX, to the most recent
Conflict Code Conflict of Interest Code adopted/applicable during FYXX-XX (PDF File)
Attorneys YTD expense report for all attorney fees the City has paid in FYXX-XX (sorted by
the firm if possible - with a brief description of the type of work performed for the
City)
Form 700s Current CA Form 700s (Statement of Economic Interests) for board members,
VPs, and Directors
Related Parties Listing of active vendors and employees (name and address only - fraud
procedure)
Information Technology
IT Systems List of all financial management applications, name, vendor, version, function
Disaster Recovery Disaster Recovery/Contingency Plans, if any new policies/procedures were
adopted in FYXX-XX
IT Security Copy of IT Logical Security policies and procedures
Information Technology
General Controls
Please see the attached 'Information Technology General Controls
Questionnaire.'
Budget
Adopted Budget The adopted budget for the year ended June 30, 20XX
Budget Resolution Board minutes for adopting the FYXX-XX budget
Budget Amendments Listing of budget amendments for FYXX-XX (through interim date)
Confirmations
Confirmations Please prepare the confirmation letters, and make sure the balances are updated
for 20XX. We will provide you with templates for related party/fraud confirmation
to be sent to the City Council by us.
City of Lake Elsinore
39 | PUNGROUP.CPA
Financial Reporting
Chart of Accounts Chart of accounts effective for FYXX-XX
Fund Roll-Ups Listing of which GL funds are grouped together as financial statement funds
Account Groupings Account roll-ups for the Statement of Net Position and Statement of Revenue,
Expenses, and Changes in Net Position line items, effective for FYXX-XX
Journal Entries Listing of journal entries in FYXX-XX (Excel)
New Accounts List of bank/investment accounts opened/closed during the year - if any, please
provide proof of proper authorization
Cash & Investments
Investment Policy Investment Policy in place for FYXX-XX. Suppose a new policy is adopted
annually, and a copy of the resolution adopting the policy.
Bank Reconciliations Bank reconciliations for September 20XX, November 20XX, February 20XX, and
April 20XX
Accounts Receivable
Loans All new loans/notes agreements in FYXX-XX, if any.
Fee Schedules Fee schedules applicable during FYXX-XX
Resolution Signed resolution adopting any new fee schedules in FYXX-XX
C/R Listing Cash receipts detail for FYXX-XX (most recently available at interim fieldwork)
Accounts Payable
Check Registers Check register for all checks issued in FYXX-XX (most recently available for
interim fieldwork)
Wire Transfers Access to the listing of wire transfers made in FYXX-XX (most recently available
for interim fieldwork)
Payroll
Payroll Registers An electronic copy of payroll registers YTD
Salary Schedules Salary schedule effective for FYXX-XX
EE Listings Copy of employee listing for:
(i) New hires
(ii) Terminations
(iii) Employees with merit pay rate increase in FYXX-XX
Debt
Official Statements Official statements, including debt service schedules for any new debts or capital
leases issued in FYXX-XX, if any. (PDF file)
Journal Entries Journal entry recording proceeds of new debt issuance (if applicable)
Proof of Payment Proof of payment on the principal for all bonds and capital leases according to
debt amortization schedules.
Pension
Hires/Separations Listing of new hires (valuation date) for Pension participants
Census Data Census data for all plans for XXXX valuation date (XXXX measurement date)
Single Audit
Prelim SEFA Preliminary Schedule of Expenditures of Federal Awards (SEFA) for all Federal
grants expended in FYXX-XX
Gann Limit
Calculation Gann Limit calculation worksheets 20XX
Resolution Resolution adopting 20XX Gann Limit
Finance Letter CA Dept of Finance Letter
Successor Agency
ROPS Recognized Obligation Payment Schedules for 20XX
City of Lake Elsinore
40 | PUNGROUP.CPA
YEAR-END AUDIT
Name Description
Trial Balance
Trial Balance Year-to-date Trial Balance as of June 30, 20XX (Excel) with the following
columns:
a) Account number
b) Account name/description
c) Beginning balance (7/1/XX)
d) Ending balance (6/30/XX)
e) Adopted budget
f) Final budget
Client Journal Entries Copy of Journal Entry Posting report with backup attached for all journal
entries posted after unadjusted year-end trial balance was provided to
auditors.
Budget
Budget Amendments Listing of budget amendments for FYXX-XX (entire year)
B-A Revenues Most recent revenues report with Budget and Actual comparison in FYXX-XX.
(Excel file)
B-A Expenses Most recent expense report with Budget and Actual comparison in FYXX-XX.
(Excel file)
Financial Reporting
Chart of Accounts Chart of accounts effective for FYXX-XX
Fund Roll-Ups Listing of which GL funds are grouped together as financial statement funds
Account Groupings Account roll-ups for the Statement of Net Position and Statement of Revenue,
Expenses, and Changes in Net Position line items, effective for FYXX-XX
Journal Entries Listing of journal entries in FYXX-XX (Excel)
New Accounts List of bank/investment accounts opened/closed during the year - if any,
please provide proof of proper authorization
Cash & Investments
List of Accounts List of all bank and investment accounts
June Statements June 20XX statements for all accounts
July Statements July 20XX statements for all accounts
Bank Reconciliations Bank reconciliations for June 20XX for all deposit accounts
O/S Check Listings Outstanding check listings on 6/30/20XX
DIT Listings Deposit in transit listing at 6/30/20XX
Investment Report Investment report for 6/30/20XX
GASB 31 GASB 31 fair market value adjustment for FYXX-XX
Restricted Cash Summary for all restricted cash and investments held by fiscal agents by
trustee account on June 30, 20XX (Excel file)
Investment Statements Trustee statements for all restricted cash and investments held by fiscal
agents on June 30, 20XX (PDF file)
Credit Risk Schedules for investment disclosure:
a) credit rating for each investment
b) maturity dates
Credit Risk Listing of amounts invested in single issuers in excess of 5% of total
investments
Accounts Receivable
A/R Aging An aged detailed listing of all accounts receivable on June 30, 20XX
City of Lake Elsinore
41 | PUNGROUP.CPA
Allowance Calculation of uncollectible accounts on June 30, 20XX, along with a
description of methodology and assumptions used
Accruals Supporting documents (i.e., subsequent receipts) for receivables accrued
post-June 30, 20XX
Grants A detailed listing of grant receivables and backup documents for all accrued
grant payments received (i.e., copies of checks, etc.)
Interest A detailed listing of all interest receivable on June 30, 20XX (include interest
allocation worksheet if applicable)
Taxes/Assessments A detailed listing of all taxes/assessments receivable on June 30, 20XX
NotesLoans Receivable
Roll-forward List beginning balances, additions, deletions, and ending balances for all
loans and notes receivable (separated by type/funding source)
New Loans Copy of check, receipt, deposit slip, bank statement, and loan agreement for
all new loans/notes.
Loan Payments Copy of checks/cash receipts showing payments of principal on all major
loans/notes receivables (selections to be made on a test basis for others)
Disclosures Update listing and description of all loans and notes receivables.
TPA Report Third-party administrator loan portfolio report (if applicable)
Interfund Transactions
Due To/From Reconciliation of all amounts due from/to other funds by the fund. Identify
payable and receivable funds.
Advances Schedule of advances to/from funds & new loan agreements for new
advances
Transfers Reconciliation of transfers in/out of funds by the fund. Identify transferor and
transferee funds and provide a description of the purpose for transfers.
Other Assets
Prepaids Prepaid detail listing as of June 30, 20XX (Excel file)
Inventory A detailed listing of inventory with units on hand, cost, and extended cost as
of June 30, 20XX
Other Other assets detail listing as of June 30, 20XX (Excel file)
Deposits Deposits detail listing as of June 30, 20XX (Excel file)
Capital Assets
Roll-forward Schedule of beginning balances, additions, deletions, and ending balances of
capital assets and accumulated depreciation (Excel file) on June 30, 20XX
Details of Adds/Deletes A detailed listing of all additions and deletions for all capital assets (Excel file)
during FYXX-XX
Depreciation Depreciation Report for depreciation expense for capital assets for FYXX-XX
CIP CIP detail schedule showing by project and with beginning balance,
additions, deletions (capitalized), reclassifications, and ending balance for the
year ended June 30, 20XX (Excel file)
Gain/Loss Calculation of gains and losses for all capital assets disposed of during
FYXX-XX
Donations Listing of amount and description of donated capital assets, if any
Impairments Listing of any impairments of capital assets during FYXX-XX
Inventory Copy of the inventory of capital assets done in FYXX-XX
Property Held for Resale
Listing A detailed listing of property held for resale on June 30, 20XX
Valuation Support for valuation of properties on June 30, 20XX (appraisal, specially
commissioned report, etc.) - lower cost or NRV
City of Lake Elsinore
42 | PUNGROUP.CPA
Additions/Purchases Support for purchases/contributions/donations of land held for resale
Deletions/Sales Support for sales/donations/contributions of land held for resale
Declaration Declaration of intent to sell for City and Successor Agency
Affirmation Council affirmation on a five-year time limit to sell properties
Accounts Payable
Detail A detailed listing of all accounts payable (Excel file) on June 30, 20XX
A/P Aging A/P Aging Report as of June 30, 20XX (by the vendor if possible)
Accrual Detail A/P Accrual detail listing as of June 30, 20XX
Check Registers Accounts payable check registers from July 1, 20XX, through the date of
year-end fieldwork (as close as possible)
Deposits Listing of all deposits payable as of June 30, 20XX (Excel file)
Payroll
Accrual Calculation Detailed listing and calculation of all accrued salaries payable (Excel file) on
June 30, 20XX
Payroll Registers Payroll register(s) for pay period(s) included in accrual at June 30, 20XX
941s Form 941s for FYXX-XX (all quarters) and the reconciliations to the total
annual payroll.
Unearned Revenue
Roll-forward A detailed listing of all unearned revenues for all funds (including beginning
balance, additions, deletions, and ending balances)
Unavailable Schedule of unavailable revenue to be recognized as revenue in the
government-wide financial statement.
Debt
Roll-forward/Amort Long-term Debt Schedule as of June 30, 20XX (Excel file)
Proof of Payment Proof of payment on the principal for all bonds and capital leases according
to debt amortization schedules.
Deferred Charges Amortization of deferred charges (bond premiums and costs of issuance)
schedule
Covenants Supporting documents on the City's compliance with debt covenants.
Compensated Absences
Calculation Calculation of vacation and sick leave payable - by the employee if possible
(hours and rate info by EE)
Roll-forward List beginning balances, additions, deletions, and ending balances by the
fund and by short-term portion and the long-term portion at 6/30/XX
Register June 30 leave balance register
Policies Copies of any new sick leave buy-back policies, new contracts, and changes
in vacation policy.
Pension Year-End
Census data support Additional info for covered payroll, service credits, and period of service for
employees listed on the CalPERS Census Data file
Contributions (Billing and
Payment Summary)
"My CalPERS" billing and payment summary reports for each plan showing
EE and ER contributions made during FYXX-XX
Contributions (Reported Member
Summary Report)
"My CalPERS" reported member summary reports for each plan showing EE
and ER contributions made during FYXX-XX
GASB 68/71 CalPERS GASB 68 valuation reports for each City plan for 6/30/1XX
valuation date (6/30/XX measurement date)
Census data CalPERS GASB 68 census data for each Agent plan
CalPERS Contributions Amount of CalPERS contributions made in FYXX-XX (supporting documents
& calculation) my CalPERS
City of Lake Elsinore
43 | PUNGROUP.CPA
CalPERS Reconciliation Reconciliation of contributions between payroll and CalPERS
Journal Entries Pension journal entries and supporting documents
Covered Payroll Annual covered payroll (CalPERS)
Risk Management
Calculation Liability for current fiscal year claims and changes in estimates for workers'
comp, dental, and general liability (as applicable).
Payments Current year claim payments for workers' comp, dental, and general liability.
Loss Run Reports Loss run reports for workers' comp, dental, and general liability as of June 30,
20XX
Roll-forward List beginning balances, additions, deletions, and ending balances by the
fund and by short-term portion and long-term portion.
Actuarial Study Actuarial study for calculation of workers' comp/general liability (if applicable)
SSAE 16 SSAE 16 ("SOC I, Type 2") report from third-party administrators, if any, for
both WC and GL
Excess Coverage Agreement and declaration of coverage for excess insurance over self-
insured amount (BICEP/CSAC)
Landfill Closure
Calculation The calculation for the remaining landfill closure liability
Deferred Items
Gain/Loss Calculation/amortization schedule for deferred gains/losses on refunding
Equity
GASB 54 Detail of GASB 54 fund balance breakdowns for all governmental funds
(nonspendable, restricted, committed, assigned)
Descriptions Description of restrictions, commitments, and assignments of fund balances
for all governmental funds.
Commitments Board resolutions for any amounts deemed to be "committed."
Deficit Balances Listing and explanation of deficit fund balances and net assets - if any.
Resolution Copy of board resolutions for all commitments of fund balances for
governmental funds as of June 30, 20XX.
Net Position Net position worksheet (for Government-Wide Statements)
Revenue
Detail Sales taxes revenues detail
Detail Local property taxes detail
Detail Other revenues detail
Single Audit Year-End
Final SEFA Single Audit SEFA Schedule (list amount awarded, amount spent - with
indirect costs listed separately from direct costs) - also, please include pass-
through amounts
Grant Docs Award contracts for ALL grants listed on SEFA.
SEFA Reconciliation Expenditure detail (reconciled to the general ledger) for ALL grants listed on
SEFA.
Property Federally funded real property schedule/inventory (by each grant)
Regulators Copies of any regulator/grantor audit/review reports issued during the year
Prior Findings Status of any implementations of corrective action plans for prior year
findings, if applicable
Financial Statements
Transmittal Transmittal letter (if ACFR)
City Officials List of City Officials and Council Members (if ACFR)
City of Lake Elsinore
44 | PUNGROUP.CPA
Org Chart City organization chart (if ACFR)
MD&A Management's Discussion and Analysis
Program Revenues GASB 34 Program Revenues worksheet - Excel FYXX
ISF Allocation Internal service fund allocation
Residual Capital Outlay Allocation of residual capital outlays to functions/programs
Depreciation Allocation of governmental activities depreciation by function/program
Footnotes Footnote supporting schedules (where applicable)
Commitments/Contingencies Listing and description of any commitments and contingencies that are
required for note disclosure (i.e., cost to complete construction)
Subsequent Events Description of subsequent events for note disclosure, if any
PPA Journal entry and all supporting documents for prior period adjustments, if
any
RSI - BtoA RSI - Budget to actual schedules - General Fund and all major special
revenue funds (Excel)
SI - BtoA SI - Supplementary budget to actuals for any funds to be included (Excel)
SI - Agency Funds SI - Additions and deletions for agency funds (Excel)
Stats Section Statistical section schedules (Excel), if applicable
Conversion Entries Support for conversion entries
Water Department
Reconciliations Reconciliation of amounts affected by Water Dept. (interfunds, transfers,
contributions, pension, etc.)
Cash Flows Cash flows worksheet for Water Dept. financials (provided by other auditors)
BFS Copy of audited financial statement Water Dept.
City of Lake Elsinore
45 | PUNGROUP.CPA
Let’s Get to Work!
Benefits of Choosing The Pun Group LLP
The Pun Group LLP is recognized for its professionalism, integrity and for providing clients with practical solutions
unique to their circumstances and issues. Our Firm prides itself on being able to provide personalized client services,
and with that sentiment in mind, we have carefully chosen our engagement teams. The Pun Group’s primary objective
is to continue offering the City of Lake Elsinore solutions and directions led by highly experienced and capable
partners who can successfully implement the work and produce the results you expect. This philosophy and mindset
allow us to provide a superior level of service and a quality audit.
We trust that this proposal has given you the information needed about the Firm, the engagement team members,
the overall audit approach, cost-saving measures, and audit fees. We are committed to exceeding your expectations,
and we look forward to bringing our experience and expertise to the City of Lake Elsinore while providing you with
the excellent level of service that you expect and deserve.
Thank You
Thank you for allowing us to submit our qualifications to provide you with Professional Auditing Services. Please
direct inquiries to:
Kenneth H. Pun, CPA, CGMA
Managing Partner
Email: ken.pun@pungroup.cpa
Phone: (949) 777-8801 | Fax: (949) 777-8850
Sincerely,
The Pun Group LLP
Certified Public Accountants and Business Advisors
City of Lake Elsinore
i | PUNGROUP.CPA
Appendix A – Available Training
Strengthen Your Accounting Knowledge: TPG Client Training Webinars
We pride ourselves in leading the governmental auditing profession nationwide and statewide. Members of our team
have been assigned to the AICPA and State Government Accounting and Audit committees. Our membership with
these two levels of government keeps us current, and such involvement helps our Firm with the constant changes in
accounting and auditing standards, laws and regulations, and compliance provisions, which have created an
unprecedented complexity in public accounting for state and local governments.
Every year, the Firm hosts a conference to update governmental clients on new technical accounting and financial
issues. Since last year, by implementing “Webinars,” we’ve been expanding our horizons and offering our clients 15
hours of Continuing Professional Education (CPE). These sessions are free of charge and part of the service
package provided to our clients.
CPE courses we offer:
City of Lake Elsinore
ii | PUNGROUP.CPA
Appendix B – Certificate of Insurance
ORANGE COUNTY SAN DIEGO BAY AREA LAS VEGAS PHOENIX
www.pungroup.cpa
Kenneth H. Pun, CPA, CGMA
Managing Partner
200 E. Sandpointe Ave., Suite 600, Santa Ana, CA 92707
(949) 777-8801 | ken.pun@pungroup.cpa
February 20, 2023
COST PROPOSAL
Professional Auditing Services
CITY OF LAKE ELSINORE
The Pun Group LLP is recognized for its professionalism, integrity and for providing clients with practical solutions
unique to their circumstances and issues. You will receive a superior level of service and a quality audit.
Thank You!
Thank you for allowing us to submit our qualifications to provide you with
Professional Auditing Services.
The Pun Group LLP
Certified Public Accountants and Business Advisors
WHY CHOOSE
THE PUN GROUP LLP?
Big firm expertise, small firm values
Personal attention meets technical expertise
A unique firm culture
Innovation embraced
Achievable plans to move your organization forward
The Pun Group’s most
valuable asset is our
people, they and their
deep experience drive our
every interaction with
clients.
“
”
Kenneth H. Pun, CPA, CGMA
Founder & Managing Partner
City of Lake Elsinore
Table of Contents
Certification and Total All-Inclusive Maximum Price ...................................... 1
Rates by Partner, Specialist, Supervisory and Staff ...................................... 2
Out of Pocket Expenses ................................................................................ 3
Rates for Additional Professional Services .................................................... 3
Manner of Payment ........................................................................................ 3
The Pun Group Wins
2023 “Best of Accounting” Award
The Pun Group LLP is proud to have won 2023’s Best of
Accounting® award from ClearlyRated for providing superior
service to its clients.
Winners of such awards have proven to be industry leaders in
service quality based entirely on ratings provided by their
clients. On average, clients of 2023 Best of Accounting
winners are 70% more likely to be satisfied than those who
work with non-winning firms.
“I am pleased to introduce the 2023 Best of Accounting
winners alongside their validated service ratings on
ClearlyRated.com,” said ClearlyRated’s CEO, Eric Gregg.
“These firms have demonstrated a remarkable commitment to
delivering amazing experiences, despite another year of
upheaval and macroeconomic uncertainty. Hats off to these
service leaders - it’s truly an honor to recognize and celebrate
their achievements.”
The Pun Group LLP received satisfaction scores of 9 or 10 out
of 10 from 94.1% of their clients, significantly higher than the
industry’s average of 50%.
Our firm excelled in five key areas: Responsiveness, Quality,
Value, Needs Understanding, and Proactive Approach.
About ClearlyRated
Rooted in satisfaction research for professional service
firms, ClearlyRated utilizes a Net Promoter® Score survey
program to help professional service firms measure their
service experience, build an online reputation, and
differentiate on service quality.
“Excellent customer service and staff and
partners are expert in their fields.”
Lani H.
State and Local Government Client
“We started using Pun Group when the
pandemic first started two years ago so
had a little apprehension about doing
everything remotely with a new firm. But
the audit went very well and was
completed on time without problem.”
Kevin W.
State and Local Government Client
“The Firm has consistently exceeded our
expectations as client.”
Clint O.
State and Local Government Client
“An excellent partner and amazing service.”
Jim T.
Private Sector Client
City of Lake Elsinore
1 | PUNGROUP.CPA
Certification and Total All-Inclusive Maximum Price
We are committed to the performance of a high-quality audit at the most reasonable fee level possible, both initially
and throughout the engagement. Also, our partners will provide advice and consultation as needed at no additional
cost to the City of Lake Elsinore.
Name of Firm: The Pun Group LLP – Certified Public Accountants and Business Advisors
Contact Name: Kenneth H. Pun, CPA, CGMA
Contact Email Address: ken.pun@pungroup.cpa
Authorization to Represent the Firm
I, the undersigned, certify I am duly authorized to represent The Pun Group LLP and am empowered to submit this
bid. In addition, I certify I am authorized to contract with the City of Lake Elsinore on behalf of the Firm.
February 20, 2023
_________________________________________ _______________________________
Kenneth H. Pun, CPA, CGMA | Managing Partner Date
The Pun Group LLP
Total All-Inclusive Maximum Price
Our proposed fees for Professional Auditing Services for the fiscal years ending June 30, 2023, 2024, and 2025, are
as follows:
(1) Single Audit fees based on one (1) major program. The fee for auditing additional major programs will be
$5,000 each. The number of programs determined to be “major” will be based on OMB Uniform Guidance.
The Engagement Team will discuss this with the City of Lake Elsinore’ Management before starting Single
Audit work.
Work to be performed: 2022-2023 2023-2024 2024-2025
City of Lake Elsinore Audit 48,000$ 49,440$ 50,923$
Successor Agency 3,000 3,090 3,183
Single Audit Report 5,000 5,150 5,305
Appropriations Limit Review (GANN) 500 515 530
Total All-Inclusive Maximum Price 56,500$ 58,195$ 59,941$
Independent Account's Agreed-Upon Procedures Applied to:
City of Lake Elsinore
2| PUNGROUP.CPA
Rates by Partner, Specialist, Supervisory and Staff
Hours
Standard
Hourly
Rates
Quoted
Hourly
Rates Total
Partners 48 300$ 300$ 14,400$
Director 80 250$ 250$ 20,000$
Supervisory Staff 120 175$ 175$ 21,000$
Staff 200 150$ 150$ 30,000$
Clerical: 4 100$ 100$ 400$
Out-of-Pocket Expenses:Included
Professional Discount:(29,300)$
Total all-inclusive maximum price for FY 2023 56,500$
Hours
Standard
Hourly
Rates
Quoted
Hourly
Rates Total
Partners 48 300$ 300$ 14,400$
Director 80 250$ 250$ 20,000$
Supervisory Staff 120 175$ 175$ 21,000$
Staff 200 150$ 150$ 30,000$
Clerical: 4 100$ 100$ 400$
Out-of-Pocket Expenses:Included
Professional Discount:(27,605)$
Total all-inclusive maximum price for FY 2024 58,195$
Hours
Standard
Hourly
Rates
Quoted
Hourly
Rates Total
Partners 48 300$ 300$ 14,400$
Director 80 250$ 250$ 20,000$
Supervisory Staff 120 175$ 175$ 21,000$
Staff 200 150$ 150$ 30,000$
Clerical: 4 100$ 100$ 400$
Out-of-Pocket Expenses:Included
Professional Discount:(25,859)$
Total all-inclusive maximum price for FY 2025 59,941$
City of Lake Elsinore
3| PUNGROUP.CPA
Out of Pocket Expenses
Out of Pocket Expenses are Included in the Total All-Inclusive Maximum Price and Reimbursement Rates
The Firm’s policy is to maintain flexible billing rates to meet the needs of clients and help them control costs. In the
interest of starting our long-term relationship, we will absorb expenses such as travel and printing costs. Additionally,
our Partners will be available to provide advice and consultation as necessary to the City of Lake Elsinore. The Firm
will also absorb these costs.
Rates for Additional Professional Services
Rates for Additional Professional Services
Below are the Firm’s hourly billing rates, delineated by staffing levels:
Any supplemental reports, audits, or agreed-upon procedures not covered by this proposal may be added to a written
agreement prior to commencing audit work. The Firm and the City will discuss and approve the scope and associated
costs of these tasks. Any additional work will be performed at the above-quoted hourly rates.
Manner of Payment
Manner of Payment
Engagement Team members are required to maintain timesheets detailing the date, number of hours, and work
performed for every audit task. The Firm will collect these timesheets and bill the City of Lake Elsinore at the rates
outlined in the Total All-Inclusive Maximum Price section in four stages: (1) at the conclusion of the planning phase,
(2) at the conclusion of the interim phase, (3) at the conclusion of the Year-End phase, (4) and after presentation and
acceptance of the final audit reports. Interim billings will cover a period not less than a calendar month. The billing
amounts generally break down as follows:
Partner(s) 300$
Director(s) 250$
Senior Manager(s) 225$
Manager(s) 200$
Supervisor(s) 175$
Senior Accountant(s) 150$
Staff Accountant(s) 125$
Clerical 100$
Hourly Billing Rates
Work Performed % of Proposal Amount
Planning 10%
Interim 40%
Fieldwork 40%
Presentation and Acceptance of Reports 10%
ORANGE COUNTY SAN DIEGO BAY AREA LAS VEGAS PHOENIX
www.pungroup.cpa