HomeMy WebLinkAbout2 - Proposal - City of Lake Elsinore 2023 Final Prepared by MLH, LLP CITY OF LAKE ELSINORE
PROPOSAL FOR PROFESSIONAL AUDITING SERVICES
For the Fiscal Years Ending June 30,2023,2024, and 2025
Submitted By:
Moss,Levy&Hartzheim, LLP
5800 Hannum Avenue, Suite E
Culver City, California 90230
Phone: (310) 670-2745
Fax: (310)670-1689
Email: mlhbhgmlhcpas.com
Website: www.mlhcpas.com
Submitted On:
February 20,2023
Contact Person:
Craig A. Hartzheim, CPA: Partner
Hadley Y. Hui,CPA: Partner
Wilson Lam, CPA, CFE, CGFM: Partner
Bin Zeng: Principal
CITY OF LAKE ELSINORE
TECHNICAL PROPOSAL
TABLE OF CONTENTS
TransmittalLetter ..............................................................................................................i
Technical Proposal:
Independence...................................................................................................................... 1
Licenseto Practice.............................................................................................................. I
Firm Qualifications and Experience ................................................................................... 1
Partner, Supervisory and Staff Qualifications,and Experience..........................................5
Similar Engagement with Other Government Entities .......................................................7
SpecificAudit Approach.....................................................................................................8
Identification of Anticipated Potential Audit Problems .....................................................4
Prepared by Clients(PBC)List ..........................................................................................4
Appendices:
Appendix A—License to Practice in California................................................................. 15
Appendix B—Current and/or Recently Completed Governmental Audits......................... 16
Appendix C—Peer Quality Review Report........................................................................ 18
AppendixD—Resumes ...................................................................................................... 19
Appendix E—Segmentation and Budgeted Hours by Segment..........................................25
AppendixF—Insurance......................................................................................................26
Appendix G—Sample PBC List.........................................................................................27
MOSS, LEVY & HARTZHEIM LLP
CERTIFIED PUBLIC ACCOUNTANTS
PARTNERS COMMERCIAL ACCOUNTING&TAX SERVICES GOVERNMENTAL AUDIT SERVICES
CRAIG A HARTZHEIM,CPA 9465 WILSHIRE BOULEVARD,3RD FLOOR 5800 HANNUM AVENUE,SUITE E
HADLEY Y HUI,CPA BEVERLY HILLS,CA 90212 CULVER CITY,CA 90230
ALEXANDER C HOM,CPA TEL: 310.670.2745 TEL: 310.670.2745
ADAM V GUISE,CPA FAX:310.670.1689 FAX: 310.670.1689
TRAVIS J HOLE,CPA www.mlhcpas.com www.mlhcpas.com
WILSON LAM,CPA
Mr. Anthony Martinez
Senior Management Analyst
City of Lake Elsinore
130 South Main Street
Lake Elsinore, CA 92530
Dear Mr. Martinez,
We are pleased to respond to the Request for Proposal of the City of Lake Elsinore(City), including the Successor
Agency of the City, the Public Financing Authority, the Recreation Authority, and the Facilities Financing
Authority, for independent professional auditing services. We have prepared our proposal to address each of the
specifications included in the City's Request for Proposal.
Moss,Levy&Hartzheim is an equal opportunity employer.
After sixty-seven (67) years in public accounting and forty-seven (47) years of performing local governmental
and non-profit audits, it is extremely gratifying to witness the continued growth of Moss, Levy & Hartzheim,
LLP. The firm is a regional full-service public accounting firm with offices in Beverly Hills, Culver City, and
Santa Maria. We and the entire staff are pleased with not only the continuing development of the firm, but also
the progress and economic health of our clients. We understand that governmental accounting is a specialized
industry with its own accounting standards and requirements. This why we strive to constantly improve the
quality of our professional services. Our degree of dedication, coupled with our ability to inform clients of any
new accounting and auditing issues, is paramount to our success.
We feel that our size is such that we are large enough to provide a broad spectrum of services and experience
backed by an in-house training program,professional development courses, and an extensive professional library,
yet not so large as to become impersonal and rigid. Our informal style allows us to be flexible enough to complete
our engagements in a timely manner that is the most convenient for each client. Also, this style allows us to be
more accessible to our clients when our clients have questions or concerns.
At Moss, Levy & Hartzheim, LLP, our commitment to professionalism and timely completion of
engagements sets us apart as the top choice for this audit engagement. Our experienced and knowledgeable
staff, particularly in governmental audits, will bring a wealth of expertise to the table, ensuring a thorough
and efficient audit. With our track record of delivering results and exceptional client service, you can trust
that choosing our firm will be the right decision for your audit needs.
It is our understanding that we will perform an audit of the City's basic financial statements and its component
units (Lake Elsinore Public Financing Authority, Lake Elsinore Recreation Authority, Successor Agency of the
City of Lake Elsinore, and Lake Elsinore Financing Facilities Authority), in accordance with auditing standards
generally accepted in the United States of America as set forth by the American Institute of Certified Public
Accountants,with the objective of expressing an opinion on the fair presentation of the basic financial statements,
which will be in full compliance with the Government Finance Officers Association's(GFOA)Blue Book.
i
OFFICES: BEVERLY HILLS-CULVER CITY-SANTA MARIA
MEMBER AMERICAN INSTITUTE OF C.P.A.'S CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS CALIFORNIA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS
We will express an "in-relation-to" opinion on the government-wide financial statements and the fund financial
statements and supporting schedules based on the auditing procedures applied during the audit of the basic
financial statements We will also perform, if applicable, a single audit on the expenditures of federal grants in
accordance with U.S. Office of Management and Budget (OMB) Title 2 U.S. Code Federal Regulation Part 200,
Uniform Administrative Requirements, Audits of State, Local Governments, and Nonprofit Organizations•, and test
compliance with the Single Audit Act as amended in 1996 and applicable laws and regulations, and provide an
"in-relation-to"report on the schedule of federal financial assistance.
In addition to the procedures deemed necessary to express our opinion on the basic financial statements of the
City, we understand that we will also be responsible for performing certain limited procedures involving the
management's discussion and analysis (MD&A) and the required supplementary information (RSI), as mandated
by auditing standards generally accepted in the United States of America.
Our audit will be conducted in accordance with auditing standards generally accepted in the United States of
America; Government Auditing Standards, issued by the Comptroller General of the United States, including all
applicable auditing standards issued by the American Institute of Certified Public Accountants; the provisions of
the Single Audit Act Amendments of 1996; if applicable; the U.S. Office of Management and Budget (OMB)
Title 2 U.S. Code Federal Regulation Part 200, Uniform Administrative Requirements, Audits of State, Local
Governments, and Nonprofit Organizations; and all relevant Governmental Accounting Standards Board(GASB)
Statements, in accordance with the RFP.
It is our understanding that we will be responsible for issuing the following reports: an independent auditor's
report on the fair presentation of the City's basic financial statements, in conformity with accounting principles
generally accepted in the United States of America; an independent auditor's report on internal control over
financial reporting and on compliance and other matters based on an audit of the basic financial statements of the
City performed in accordance with Government Auditing Standards; an independent auditor's report on
compliance with requirements that could have a direct and material effect on each major program and on internal
control over compliance in accordance with the U.S. Office of Management and Budget(OMB)Title 2 U.S. Code
Federal Regulation Part 200, Uniform Administrative Requirements, Audits of State, Local Governments, and
Nonprofit Organizations; a single audit report which includes a schedule of expenditures of federal awards,
footnotes, findings and questioned costs including significant deficiencies and material weaknesses, if applicable;
an agreed-upon procedures report in compliance with Proposition 111 Article XIII.B of the California State
Constitution and Government Code 7900 on its appropriations limit (GANN limit calculation); and a
Management Letter, including Statement on Auditing Standards No. 114 and No. 115. Additionally, prepare and
submit the State Controller's Report, and the Annual Street Report.
Our firm is open to performing additional work as long this does not impede our independence; this includes any
agreed-upon procedures requested by the City's staff.
We will assist the City to submit the City's Annual Comprehensive Financial Report (ACFR), as requested, for
consideration of recognition for Certificate of Achievement for Excellence in Financial Reporting from the
Government Finance Officers Association(GFOA).
All noncompliance and significant deficiencies found during the audit will be communicated in writing. In the
required reports on compliance and internal controls, we shall communicate any significant deficiencies and
noncompliance issues found during the audit. Significant deficiencies that are also material weaknesses will be
identified as such in the report. Non-reportable conditions discovered will be reported in a separate letter to
management, which will be referred to in the reports on internal controls. All irregularities and illegal acts or
indications of illegal acts of which we become aware of during our audit will be immediately reported, in writing,
to the City Manager,the Finance Manager,City Attorney, and City Council.
ii
We will ensure the City is implementing all the required Accounting Pronouncements, in accordance with the
Governmental Accounting Standards. We will be accessible to the City to discuss any issues or assistance
necessary.
Moss, Levy & Hartzheim, LLP will perform the audit work within the specified time, pending no unforeseen
circumstances which the City imposes on our work.
The percentage of the audit work we expect to accomplish in each month is shown below:
June October Nov/Dec Total
35% 50% 15% 100%
This proposal for auditing services is an irrevocable offer until May 20,2023.
Thank you for your consideration and please do not hesitate to contact the authorized representatives listed below
with any questions,problems, or concerns.
Craig A. Harzheim,CPA -Partner 5800 Hannum Ave. Ste. E
Hadley Y. Hui,CPA - Partner Culver City,CA 90230
Wilson Lam,CPA,CFE,CGFM- Partner (310) 670-2745
Bin Zeng-Principal Mlhbh@mlhcpas.com
Sincerely,
Craig A. Hartzheim, CPA
Partner
Moss,Levy&Hartzheim,LLP is an Equal Opportunity Employer.
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CITY OF LAKE ELSINORE
TECHNICAL PROPOSAL
INDEPENDENCE
Moss, Levy & Hartzheim, LLP is independent of the City of Lake Elsinore and its component units, defined by
auditing standards generally accepted in the United States of America, the U.S. General Accounting Office's
Government Auditing Standards, the U.S. Securities and Exchange Commission, and all other authoritative bodies
with standard or rule making authority over the auditing profession.
Our firm has never provided any professional services for the City or any of its component units.
The firm uses checklists and questionnaires to determine that staff members are independent of the client being
audited. We also have each staff member sign a personal independence declaration prior to commencing work on
an audit client. The partner in charge of the audit reviews all independence work papers prior to staffing each
audit.
LICENSE TO PRACTICE
Moss, Levy & Hartzheim, LLP is a properly licensed certified public accounting firm in the State of California.
All certified public accountants engaged in the audit of the City are licensed to practice in the State of California
and have received at least the minimum number of governmental continuing professional education hours
required by the State Board of Accountancy and Government Auditing Standards to perform governmental audits.
Please see Appendix A—License to Practice in California.
FIRM QUALIFICATIONS AND EXPERIENCE
Moss, Levy & Hartzheim, LLP is a regional firm that performs audits of governmental and non-profit entities
throughout the State of California, from the Oregon border to the Mexico border. For most of our governmental
clients, we also prepare their Annual Comprehensive Financial Report (ACFR). Our firm also performs review
and compilation engagements as well as tax and consulting services to clients throughout the United States. The
firm currently employs twenty-eight(28)professionals, all of whom are trained in governmental auditing, and has
annual gross revenues in excess of $4 million dollars. The firm has three offices in California: Culver City,
Beverly Hills, and Santa Maria.
The audit work will be completed by staff from our Culver City office, located at 5800 Hannum Avenue,
Suite E, Culver City,California 90230.
The Culver City office is currently staffed by five (5) certified public accountants (three partners, two managers,
and one senior accountant). In addition, the Culver City office employs additional managers, senior accountants,
and staff accountants. All certified public accountants, managers, senior accountants, and staff accountants are
part of the governmental and non-profit audit practice.
The City will have one partner, one manager, and one supervising accountant assigned to the audits on a full-time
basis. In addition, one accountant will be assigned to the audit on a full-time basis. These employees will not be
changed except due to unforeseen circumstances.
Our firm offers a comprehensive range of services to meet the needs of our clients, including:
Audits &Attestation:
Governmental(municipalities, school districts, special districts, and single audits)
Non-Profit Organizations
Commercial Business
Compliance Audits
Transient Occupancy Tax
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CITY OF LAKE ELSINORE
TECHNICAL PROPOSAL
FIRM QUALIFICATIONS AND EXPERIENCE (CONTINUED)
Our firm offers a comprehensive range of services to meet the needs of our clients, including: (Continued)
Accounting Services:
Reviews Services
Compilations Services
Management Advisory Services (Non-Audit Clients):
Data Processing Solutions
Business Advisory Services
Pension and Profit-Sharing Plan Consultation
Acquisition and Mergers Support
Income Tax Services:
Preparation and Filling of Tax Returns
Tax Planning and Strategy
Tax Audits and Representation with the Internal Revenue Service and Other Taxing Authorities
Please see Appendix B — Current and/or Recently Completed Governmental Audits for a list of current
governmental audits performed by the firm.
Moss, Levy&Hartzheim, LLP has an extensive background in auditing governmental and non-profit entities with
over forty years of experience in this specialized field. The firm currently performs over thirty (30) city audits,
over seventy-five (75) special district audits, as well as the audit of the County Sanitation Districts of Los Angeles
County (all 25 districts), and twenty-two (22) school district and related audits. We have also recently completed
monitoring of one hundred contractors for the County of Los Angeles, for contract compliance and fiscal
monitoring. Additionally,we are also on the master lists and have signed master contracts with the County of San
Diego and the County of Los Angeles for Compliance and Financial Audits.
The firm's recent local similar auditing experience includes the following:
1. CSMFO and GFOA Award Programs
The firm has or is currently auditing the following entities that have participated in and have
received the CSMFO and/or GFOA Award Programs:
City of Bellflower City of Paso Robles
City of Brawley City of Santa Maria
City of Calabasas City of Scotts Valley
City of Campbell City of Susanville
City of Covina City of Tracy
City of Culver City City of Watsonville
City of El Centro City of Westlake Village
City of Eureka City of Winters
City of Fort Bragg City of Yuba City
City of Indio County Sanitation Districts of
City of Laguna Hills Los Angeles County
City of Lathrop Enema Wastewater Authority
City of Lompoc Los Angeles County Flood Control District
City of Los Alamitos Ross Valley Sanitary District
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CITY OF LAKE ELSINORE
TECHNICAL PROPOSAL
FIRM QUALIFICATIONS AND EXPERIENCE (CONTINUED)
The firm's recent local similar auditing experience includes the following: (Continued)
2. Uniform Guidance
We specialize in conducting compliance audits for our municipal and school district clients,
ensuring that they are in compliance with Title 2 U.S Code of Federal Regulation Part 200,
known as the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards(Uniform Guidance).
3. Federal and State Grant Programs and the Single Audit
Each of our municipal clients, the majority of our Special District clients, and all of our School
District clients receive Federal and State Grants which require compliance audits, including
American Recovery and Reinvestment Act Grants. Some of our most commonly audited
programs are as follows:
Municipal Major Programs:
ARPA Act(2021)
Cares Act Programs
Community Development Block Grant Funds (CDBG)
Federal Emergency Management Act Funds(FEMA)
Law Enforcement Block Grant(LLEBG)
Public Safety Partnership &Community Policing Grant
Section 8 Housing Assistance Payments
Transportation Enhancement Act(TEA)
Airport Improvement Program(AIP)
Economic Development Grants (EDA)
Home Investment Partnerships Program(HOME)
Capitalization Grants for State Revolving Funds
Surveys, Studies,Investigations, and Special Purpose Grants
Home Investment Partnerships Program(HOME)
Capitalization Grants for State Revolving Funds
Surveys, Studies,Investigations, and Special Purpose Grants
Highway Planning and Construction
Other Major Programs:
Senior Nutrition Programs
Child Nutrition Programs
Title I
Title VI
Migrant Education
Vocational Education
Special Education
4. Non-profit Agencies
We have audited numerous non-profit agencies and have also prepared their federal and state tax
returns. Currently, our firm performs audit and/or tax preparation services for sixty non-profit
agencies.
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CITY OF LAKE ELSINORE
TECHNICAL PROPOSAL
FIRM QUALIFICATIONS AND EXPERIENCE (CONTINUED)
The firm's recent local similar auditing experience includes the following: (Continued)
5. State Controller's Report and Street Reports
We have prepared State Controller's Reports, Transit, and Street Reports for numerous Cities,
Special Districts, and Redevelopment Agencies. We feel this experience allows us to assist our
clients in their preparation of the State Controller's Reports or prepare the reports as a separate
engagement for our clients.
6. Investment Compliance
In addition to financial statement audits, we also review our clients' compliance with their
investment policies and examine investment types, including, but not limited to, an evaluation of
maturity dates (short-term or long-term), types and category, and collateral to ensure proper
disclosure of risk in the basic financial statements.
7. Bond Reporting
The firm has assisted several cities in reviewing franchise financial statements as part of
reviewing franchise requests for rate increases. In addition, the firm has performed transient
occupancy audits for ten municipalities and has performed various audits of operating lease
charges (such as use of a sewage treatment plant based on percentage of use by our client and
actual expense as recorded by the treatment plant operator).
8. TOT,Refuse and Other Audits
The firm has recently concluded auditing lease agreements between the County of Los Angeles
and a lessee for a period of 15 years. The firm has assisted several cities in reviewing franchise
financial statements as part of reviewing franchise requests for rate increases. In addition,the firm
has performed transient occupancy audits for ten municipalities and has performed various audits
of operating lease charges (such as use of a sewage treatment plant based on percentage of use by
our client and actual expense as recorded by the treatment plant operator). The firm has also
performed franchise audits of Comcast, AT&T, a local sports park, and others for Municipal
clients who have requested them.
9. School Districts
Currently, our firm audits twenty-two (22) school districts and related schools throughout the
State of California, including three Charter Schools. We have also performed audits of student
bodies for nearly all of our school district clients.
10. Special Districts
Currently, our firm audits in excess of one hundred and seventeen special districts including
sanitary districts, an open space district, the County Sanitation Districts of Los Angeles County
(all 25 Districts), water districts, recreation districts, utility districts, cemetery districts,
community services districts, fire districts, ambulance services districts, airport districts, and
vector control districts.
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CITY OF LAKE ELSINORE
TECHNICAL PROPOSAL
FIRM QUALIFICATIONS AND EXPERIENCE (CONTINUED)
The firm's recent local similar auditing experience includes the following: (Continued)
11. Joint Powers Authorities
We have audited the following Joint Powers Authorities(JPAs):
North Coast Emergency Medical Services
Public Agency Self Insurance System
County of San Diego—Emergency Services Organization
Encina Wastewater Authority
Exclusive Risk Management Authority of California
San Diego Geographic Information System
Santa Barbara County Special Education Local Plan Area Joint Powers Agency
Santa Barbara Water Purveyors Joint Powers Agency
Tracy Area Public Facilities Financing Authority
Transportation Authority of Marin
West Contra Costa Integrated Waste Management Authority
In addition to the joint powers authorities listed above, the vast majority of our governmental clients are members
of joint powers authorities. As such, our firm has experience in reviewing JPA statements and disclosing the
appropriate JPA information in the financial statements for each governmental client.
Culver City Office-Current Municipal Audit Clients
City of Alhambra City of El Centro City of Imperial City of Taft
City of Arcadia City of Eureka City of La Mirada City of Westlake Village
City of Artesia City of Healdsburg City of La Palma City of Wheatland
City of Bellflower City of Holtville City of Lindsay City of Willits
City of Duarte City of Hughson City of San Grabriel
Our firm has never been the object of any disciplinary action from any federal or state regulatory body or
professional organization,nor is there any disciplinary action pending.
Please see Appendix C—Peer Quality Review Report for a copy of our firm's July 16, 2022, quality review report,
which includes a review of governmental and non-profit engagements.
PARTNER, SUPERVISORY AND STAFF QUALIFICATIONS,AND EXPERIENCE
ritv of
_aka Elsinore
C aig A Hartzhein,--PA, Wilson Lam,CPA,CFE,CGFM
Partner(Techriical
Reviewer) Engagement Partner
Terry Robertson,CPA rDavid,ortiz,uterManager ialist
Cody Hartzheim
SenlorAccountant
Staff
Accountant(s)
5
CITY OF LAKE ELSINORE
TECHNICAL PROPOSAL
PARTNER, SUPERVISORY AND STAFF QUALIFICATIONS,AND EXPERIENCE (CONTINUED)
It is the firm's policy to have our partners and managers involved in the managing function of our governmental
audits. Having both the partner and audit manager involved in the engagement allows the City to receive
immediate response to questions about accounting and audit topics, concerns, and findings.
It is expected that Mr. Craig A. Hartzheim, CPA would be the technical (concurring) partner in charge of the
audits of the City. He will be responsible for reviewing the City's basic financial statements and all other required
statements and reports. He may also be responsible for addressing any City questions or concerns that arise during
the year. He has assisted numerous municipal clients and has prepared award-winning ACFRs. Mr. Craig A.
Hartzheim, CPA has 38 years of experience in the governmental auditing and accounting field and has been with
the firm for 38 years.
Mr. Wilson Lam, CPA, CFE, CGFM will be the engagement partner assigned to the audit. As engagement partner,
he will oversee the day-to-day operations of the audits, review all audit areas, and be on-site for a majority of the
fieldwork. He has assisted many municipal clients and has also prepared numerous award-winning ACFRs. This
enables the partner to become acquainted with the City's daily operations and key personnel.
Mr. Terry Robertson, CPA will be the Manager assigned to the audit. He will oversee the day-to-day operations of
the audits and perform more difficult audit sections. Mr. Robertson was the audit Manager for the City of Los
Angeles in his previous firm.
Mr. Cody Hartzheim will be the senior auditor assigned to the audits. As senior auditor, it will be his
responsibility to oversee the staff accountants, do preliminary reviews of audit sections, and perform more
difficult audit sections.
Mr. David Ortiz will be the computer specialist assigned to the audits, when needed. Mr. Ortiz has extensive
knowledge in auditing EDP functions. Mr. Ortiz may also perform the statistical sampling procedures for the audit
and also document and test the internal control structure of the computer systems.
In addition to the supervisory staff listed above, one or two staff accountants will be assigned to the audits. All
staff accountants have degrees from accredited colleges or universities, have received in-house governmental
audit training, and at present, have at least one year of governmental auditing experience. All staff accountants
will be directly supervised by the supervisory accountant and manager assigned to the audits at all times. All
partners, managers, and staff members have worked on numerous governmental engagements together.
Consistently working together will provide the City with a knowledgeable,proficient, and efficient audit team.
Please see Appendix D—Resumes for each individual's qualifications and experience.
The firm conducts an annual firm-wide two-day training seminar to update all governmental auditors on new
pronouncements and improved audit techniques. In addition to this firm sponsored seminar, each governmental
auditor attends the annual governmental accounting conference and many other continuing education courses and
is updated on current accounting/auditing issues through our journals and supplements, which we receive on a
regular basis.
The firm will maintain staff continuity on the engagement throughout the term of the contract, barring any
terminations, illnesses, or other unforeseen circumstances (departure from the firm, promotion, or assignment to
another office). At the written request of the City, any Moss, Levy & Hartzheim, LLP employee assigned to the
audits can be removed and replaced by another qualified employee. The City retains the right to approve or reject
replacements.
6
CITY OF LAKE ELSINORE
TECHNICAL PROPOSAL
SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENT ENTITIES
List of most significant engagements performed in the last five (5)years:
GFOA CERTIFICATION
Fiscal
Total Staff Years Contact and
Governmental Agency Hours Scope of Work Audited Telephone number
City of Bellflower:16600 Civic Center Dr.Bellflower,CA
Basic Financial Statements/ 655 Financial Audit,Single Audit, 2002- Mr.Tae Rhee
Comprehensive Annual Financial Report State Controller's Report,and 2012 Finance Director
prepared in accordance with GAAP GANN Limit,GASB Pronouncements 2017- (562)804-1424
Audit Partner-Craig A.Hartzheim,C.P.A GFOA Certification Present
City of Covina:125 E.College St,Covina,CA 91723
Basic Financial Statements/ 625 Financial Audit,Single Audit, 2014- Anita Agramonte
Comprehensive Annual Financial Report GASB Pronouncements 2018 Finance Director
prepared in accordance with GAAP GFOA Certification (626)384-5400
Audit Partner-Craig A.Hartzheim,C.P.A
City of La NErada:13700 La Mirada Blvd.La Mirada,CA 90638
Basic Financial Statements/ 525 Financial Audit,Single Audit, 2016- Ms.Melissa Pascual
Comprehensive Annual Financial Report GASB Pronouncements Present Finance Manager
prepared in accordance with GAAP GFOA Certification (562)943-0131
Audit Partner-Craig A.Hartzheim,C.P.A
City of Arcadia:240 W.Huntington Dr,Arcadia,CA 91007
Basic Financial Statements/ 500 Financial Audit,Single Audit, 2015- Mr.Henry Chen
Comprehensive Annual Financial Report GASB Pronouncements Present Fiscal Services Manager
prepared in accordance with GAAP CFOA Certification (626)574-5427
Audit Partner-Hadley Y.Hui,C.P.A
City f San Gabriel:425 Mission Dr.San Gabriel,CA 91766
Basic Financial Statements/ 475 Financial Audit,Single Audit, 2020- Ms.Linda Tang
Comprehensive Annual Financial Report GA SB Pronouncements Present Assistant Finance Director
prepared in accordance with GAAP GFOA Certification (626)458-2830
Audit Partner-Craig A.Hartzheim,C.P.A
Moss,Levy&Hartzheim LLP is listed in the Master list of firms for the Counties of Los Angeles and
San Diego,currently we audit various grants and component units of these counties.
EXPERIENCE IN PREPARING ANNUAL COMPREHENSIVE FINANCIAL REPORTS (ACFR)
City Name Contact Name Contact
City of Eureka,CA Lane Millar Imillar@eurekaca.gov
City of Belllflower,CA Tae Rhee trhee@bellflower.org
City of Santa Maria,CA Mary Harvey harvey@cityofsantamaria.org
Note: This is a small list from our clients who have received the GFOA Award.
Please see Appendix B — Current and/or Recently Completed Governmental Audits for a list of current
governmental audits performed by the firm.
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CITY OF LAKE ELSINORE
TECHNICAL PROPOSAL
SPECIFIC AUDIT APPROACH
Overview of the MLH Audit Process
DocumentationAudit Planning -_q
Entrance Con erence
Analytics and Brainstorming
Fraud Risk Assessment
• Before
Control
Assessment of Control Wisk Fiscal
Establish Materiality Levels Year-End
Determination of Sampling
Methods
. Control
Are key controls,policies,
and procedures i n place and
operating effectively? •Before
Audit Program Development Fiscal
lailored Audit;rograrhs and
pproach based on risk Year-End
ssess.e.ts completed for
Client status meetings
Fieldwork
Obtain
UpdateAnalytics •Before
Substantive tests ofaccount
balances Fiscal
Evaluate fairness oftest Year-End
results in comparison with
audit objectives
Reporting
Year-end financial
statements with auditor's
reports •After
Management letters Fiscal
SingleAudit Year-End
Reports on complianoe,
L with internal controls and
�aws and reoulations -A
During the first year of the engagement, we will utilize the prior year's financial statements, the current year's
budget, and our knowledge of the City's systems to determine materiality for the different audit sections. Each
year, we will select a sample of transactions to determine to what extent the systems are functioning as described
to us. The extent of our sample size will depend upon our assessment of the internal control structure and the
results of our assessment in accordance with Government Auditing Standards.
Please see Appendix E— Segmentation and Budgeted Hours by Segment for a schedule of the level of staff and
number of hours to be assigned to each segment of the engagement.
8
CITY OF LAKE ELSINORE
TECHNICAL PROPOSAL
SPECIFIC AUDIT APPROACH(CONTINUED)
The selection of transactions for testing will be made using a combination of random, systematic, and haphazard
sampling techniques. We will identify the strength of the systems upon which we can rely in planning our
substantive tests. Our internal control review will meet all of the following requirements of AICPA: Statement on
Auditing Standards(SAS)No. 55, Consideration of the Internal Control Structure in a Financial Statement Audit,
as amended by SAS No. 78; SAS No. 99, Consideration of Fraud in a Financial Statement Audit; SAS No. 106,
Audit Evidence; SAS No. 107, Audit Risk and Materiality in Conducting an Audit; SAS No. 108, Planning and
Supervision; SAS No. 109, Understanding the Entity and Its Environment and Assessing the Risks of Material
Misstatement; and SAS No. 110,Performing Audit Procedures in Response to Assessed Risks and Evaluating the
Audit Evidence Obtained. SAS.No. 120,Misstatement Due to Fraud.
It is estimated that the sampling size for transaction testing for compliance with systems as actually implemented
would be as follows:
I. Minimum of 40- 60 disbursement items, including automatic and manual checks and bank debits
II. Minimum of 25 — 40 payroll checks, including direct deposits for payroll testing, depending on the
number of employees
III. Minimum of 40—60 receipt items
We have extensive knowledge in auditing computer systems. We have assisted numerous clients with the
implementation of accounting software and database business systems. This assistance has provided our firm with
a thorough background in computer systems with respect to both the software applications aspect and also insight
into auditing such systems. It is our policy to have a computer specialist as part of the audit team and to be used
on an as-needed basis. This individual assists the audit team in documenting the computer system internal control
structure and highlighting strengths and weaknesses relating to the computer structure of the City.
In addition, all of our staff is equipped with networked laptop computers. These computers are equipped with not
only word processing and spreadsheet capabilities, but also various functional software, such as PPC Audit— e-
Tools, Adobe Acrobat, random sampling software, Lacerte Tax Program, and Easy Accounting Software, which
contain amortization programs and depreciation programs, and other applications as well.
We will perform expectation analytics and preliminary analytical review procedures using the prior fiscal year's
audited statements and the current fiscal year's budget. In the preliminary stage, we will adopt ratio analysis
procedures to compare the relationships between account balances and classes of transactions between prior
periods and against budgets and industry statistics. This may include budgets, trial balances, and/or draft financial
statements to help us identify the source of individual fluctuations. We will then adopt trend analysis to compare
current data with prior periods, which is particularly useful for analyzing revenue and expenditures. Any
unexpected trends or deviations will be discussed with relevant City staff to obtain explanations.
9
CITY OF LAKE ELSINORE
TECHNICAL PROPOSAL
SPECIFI AUDIT APPROACH(CONTINUED)
The chart below shows some of MLH's preliminary audit procedures:
None Go over timing and planning with Set meeting
Management
Letter Discuss any matters with predecessor Standard required communications
Internal control memos Set location site visits Visit sites and go through internal controls,such as
parks and recreation,fire,police,transit,etc.
Policies and procedures Review and start risk assessment Set visitation of locations such as Courts,Parks and
Rec,Transit,etc.Cash and other controls testing
Obtain budget and budget Ensure budgetary compliance Analyze budget-to-actual variances.Look at capital
amendments projects,status of property tax assessments as
part of the focus
Obtain grant documents,any service Ensure grant compliance Analyze grants
concession agreements
Obtain policies and procedures Evaluate effectiveness of policies,updates Analyze policies and procedures
and relate to key compliance matters
Obtain client internal control memos Evaluate internal controls Analyze internal controls,including computer
of client if they exist Short interviews of accounting and selected controls
operating personnel for documentation of
process
Obtain prior year financials Determine which items are important for Set preliminary"materiality"limits
testing
Obtain appropriate schedules Ensure effective procedures Testing of cash receipts,cash disbursements,and
payroll transactions
Obtain Council minutes Ensure knowledge of key government Analyze important events highlighted in Council
communication,Look for major agreements meetings,test and inquire as necessary
and key decisions
Draft confirmations—third party Independent verification of selected balances Client to prepare letters and auditor to send
letters for independent verification of letters
cash,property taxes,attorney,etc.for
client to sign and auditor to mail
Develop document request list for To clarify client—auditor requests Meet with client and agree upon document
client to review and agree upon request list for audit
Preliminary trial balance Ensure preliminary results make sense Perform selected testing on balances such as
receipts,disbursements,and payroll
Obtain updates on retirement plans Discuss GASBS and any changes Audit selected components of any new reports
and changes for compliance
Request screen view access only for Minimize client interruptions and view Scan ledgers and accounts for accounting
computer analysis transactions propriety
Consider site visitations on areas Focus on controls where the risk assessment Site visitations
where there are significant cash,card, of material misstatement of cash,card and
deposits and billing controls,internet internet transactions could occur
site controls
Legal bills,key litigation Look for commitments,contingencies,and Discuss with client,prepare attorney letters for
disclosure confirmation and response
Obtain long-term debt Analyze for disclosure and compliance Obtain and prepare long term debt schedules
Commitments and Contingencies Ensure auditing standards are applied for Send legal letters,talk with client,review
proper accrual and disclosure disclosures
10
CITY OF LAKE ELSINORE
TECHNICAL PROPOSAL
SPECIFIC AUDIT APPROACH(CONTINUED)
As part of our audit procedures,we usually request a working trial balance in excel format(if possible) and access
to view general ledger detail directly from the software system.
We will also review the following documents in order to determine compliance with applicable laws and
regulations:
1. Minutes of the governing body with special attention to: indications of new revenue sources,
including federal and state grants; expense authorizations and related appropriations, including
any special or restrictive provisions; appropriation transfers; authorization for bank or other debt
incurred; awards to successful bidders; authorization for new leases entered into; changes in
licenses, fines, or fees; authorization for fund balance commitments or assignments; and
authorization for significant new employees hired.
2. New agreements and amendments to agreements including, but not limited to grant agreements;
debt and lease agreements; labor agreements; joint venture agreements; disposition and
development agreements; and other miscellaneous agreements.
3. Administrative Code
4. Investment Policy
The main extent of our work would be what is required to enable us to express an opinion on the basic financial
statements in accordance with:
1. AICPA Industry Audit Guide for State and Local Governmental Units
2. AICPA Audit Standards
3. National Committee on Governmental Accounting, Auditing and Financial Reporting (Amended)
Publication
4. Laws of the State of California
5. Requirements of Title 2 U.S Code of Federal Regulation Part 200, Uniform Administrative
Requirements, Cost Principle and Audit Requirements for Federal Awards(Uniform Guidance).
6. GAO Standards for Audit of Governmental Organizations, Activities and Functions, the
Guidelines for Financial and Compliance Audits of Federally Assisted Programs
7. Our firm's own additional standards and procedures
The audit will be conducted in accordance with auditing standards generally accepted in the United States of
America. The primary purpose of the audit is to express opinions on the basic financial statements, and such an
audit is subject to the inherent risk that material errors or fraud may exist and not be detected by us. If conditions
are discovered which lead to the belief that material errors, defalcations, or fraud may exist, or if any other
circumstances are encountered that require extended services,we will promptly advise the City.
If convenient for the City's staff,the approximate target dates for the fiscal year 2023 audit would be as follows:
1. Entrance Conference with the City-No later than May 1"
2. Written audit plan and list of schedules for fieldwork—No later than May 15th.
3. Entrance conference and interim fieldwork—Week of June 5th.
4. Progress conference with the City—July 14th.
5. Entrance conference and year-end fieldwork—Week of October 2na.
6. Exit conference—No later than October 13th-
7. Draft management letter, financial statements, and other audit reports—
No later than November 15th.
8. Final management letter, financial statements, and other audit reports—
No later than December 15th.
9. Single Audit Report—No later than January 31 st.
10. Presentation to the Board-Open
11
CITY OF LAKE ELSINORE
TECHNICAL PROPOSAL
SPECIFIIC AUDIT APPROACH(CONTINUED)
On May 15th, we will contact the Finance Manager to provide our detailed audit plan for the audit fieldwork. We
will also discuss with the Finance Manager any matters that may impact our audit procedures or your financial
reporting. Before the year-end fieldwork, we will discuss with the City any assistance the City may need with the
year-end closing.
Our audit would begin when it is convenient for the City's staff. We estimate that in the first week of June, we
will perform interim work. Each year, the partner or manager of the firm will contact the Finance Manager. The
purpose of this contact will be to discuss the scope and timing of the annual audit,to review any accounting issues
known at that time, and to address any of the City's personnel concerns about the impending audit.
We will schedule approximately one, up to two weeks of interim work for the first year. During the first year, we
will prepare narrative flow charts and other documentation of the internal control structure and of the major
systems, such as revenue and cash receipts,purchasing and cash disbursements, payroll and personnel, inventory,
property and equipment, grant compliance, investment activities, and the budget process. We will gain this
information through discussions with appropriate City staff and the review of available documented policies,
organizational charts, manuals, programs, and procedures. Once we obtain this information, we will evaluate the
systems of internal controls and revise our standard governmental audit programs. We will also meet with two
members of the Finance Committee during our interim fieldwork, to discuss our audit procedures and to ascertain
if there are any areas of concern of the Finance Committee members.
Our year-end fieldwork would begin on October 2°d. The year-end audit work would begin with an analytical
review of all significant balance sheet and revenues and expenditures/expense accounts for each fund, which
includes substantive tests on all balance sheet accounts. Analytical procedures will be used to supplement the
substantive tests, not supplant them. We will perform analytical procedures during interim and year-end
fieldwork on all balance sheet and revenue and expense/expenditure accounts.
The primary objective of the year-end audit work is to audit the final numbers that will appear in the City's basic
financial statements. Our fieldwork would also consist of procedures required under SAS No.99 Consideration of
Fraud in a Financial Statement Audit, and SAS.No. 120,Misstatement Due to Fraud.
We will perform procedures such as:
(a) Confirmations by positive and negative circularization including but not limited to all cash and
investment accounts; selected receivable and revenue balances; all bonds, loans, notes payable,
and capital leases; all notes receivable; all insurance carriers; all legal firms employed on the
City's business; and other miscellaneous confirmations deemed necessary
(b) Physical verifications and observations
(c) Analysis and review of evidential material
(d) Interviews and investigative efforts
(e) Electronic data processing testing for computer and software reliability
(f) Numerous other procedures
During the entire engagement, our audit team will be determining whether the audit is in compliance with
Uniform Guidance, and if this is required through review of the City Council minutes, examination of the general
ledger, and discussion with finance personnel. If a compliance audit is required, we would perform tests of:
specific requirements; claims for advances and reimbursements; and amounts claimed or used for matching in
compliance with the Single Audit Act. The compliance audit will be conducted in accordance with auditing
standards generally accepted in the United States of America, the GAO Standards for Audits of Governmental
Organizations, Programs, Activities, and Functions, and the GAO Guidelines for Financial and Compliance
Audits of Federally Assisted Programs.
The year-end fieldwork should be completed no later than October 13th
12
CITY OF LAKE ELSINORE
TECHNICAL PROPOSAL
SPECIFI AUDIT APPROACH(CONTINUED)
The chart below shows some of MLH's final audit procedures:
Document Strategy Procedure
None Set Timing Entrance conference
Obtain updated general ledger Ensure proper closing of books Analyze records and update analytical
procedures
Obtain internal control memos,if there are Re-evaluate internal controls.Assess risk and dollar Update understanding of internal
any changes-all key locations significance,brainstorm,look at IT controls controls and document key changes
Obtain prior GFOA ACFR comments Ensure improvement in financial reporting Implement significant changes in
financial reporting methods
Obtain and further agree upon audit To commence audit properly on final numbers Apply auditing procedures
schedules as agreed upon in the contract
and RFP
Obtain/prior year GASB 34 conversion Ensure that all GASB 34 conversion entries are Work on current year GASB 34
entries/prepare GASB 34 Entries proper presentations
Analyze capital asset ledgers Review or updates from preliminary and analyze Obtain capital asset documents and
for impairment update for impairments
Contracts and agreements Analyze credit agreements Test schedules of credit agreements
Journal entries and post-closing Look for proper accruals and revenue payments Look at selected billings and revenue
agreements
Risk Management Determine coverage Confirm balances and analyze for
proper accruals as necessary
Cost allocations Internal service allocation propriety Discuss and analyze internal service cost
allocations
Allocation agreements Ensure agreement compliance Analyze allocations as necessary from
client calculations and documents
Obtain OPEB and PERS documents Review for any needed updates,GASB 68 and 75 Read documents and necessary update
Bond agreements Bond compliance Test bond compliance and obtain bond
ratings
Contributions Compliance Analyze significant contributions for
compliance
Third party letters Independent verification of accounts Match to year-end books and records
and reconcile to accounts
None Ensure proper audit process Hold timely status meetings with the
client
Adjusting entries,and any possible Obtain client agreement Post as necessary with client
management points
None Compliance with contract and governance Attend finance and board meetings
MD&A,prepare financials,reports and Ensure documents match,are consistent and Read MD&A,prepare financials,reports
supplementary information appropriately completed and read supplementary information
Our firm utilizes a comprehensive library of current American Institute of Certified Public Accountants (AICPA),
Government Finance Officers Association (GFOA), and Governmental Accounting Standards Board (GASB)
publications and pronouncements when preparing and reviewing the financial statements of our governmental
clients. Additionally, the Governmental Accounting, Auditing and Financial Reporting (GAAFR), commonly
referred to as the "Blue Book", issued by the GFOA is often employed as a supplementary tool in our audit
process.
We will issue all of our final audit reports by December 15`h. All our reports are prepared by in-house auditors
(usually the partner or manager) who have worked on the City's engagement, so they are familiar with the City
and the way in which it operates. Our draft reports go through four reviews, including one by a senior auditor for
calculations and footing, one by the technical partner, one by another senior or staff auditor for calculations and
footing, and a final review by the engagement partner.
13
CITY OF LAKE ELSINORE
TECHNICAL PROPOSAL
SPECIFIC AUDIT APPROACH(CONTINUED)
In order to assist our clients in improving their internal control and accounting procedures, we provide
management letters as part of our audit engagements. These letters contain any observations or recommendations
that we feel should be brought to management's attention. Our approach to the management letter is collaborative
and constructive,with the aim of helping, not criticizing. Before issuing the final management letter,we present a
draft to management for open discussion.
The work papers generated during this engagement are the property of Moss,Levy&Hartzheim,LLP and contain
confidential information. In the case of a request from a Cognizant Agency, as authorized by law or regulation,
we may make specific work papers available under the supervision of Moss, Levy & Hartzheim, LLP's staff. On
demand, we can also provide photocopies of selected work papers to the Cognizant Agency. It is possible that the
Cognizant Agency may choose to share the photocopies or information contained therein with other
organizations, including other government agencies.
IDENTIFICATION OF POTENTIAL AUDIT PROBLEMS
We do not anticipate any problems with the audit except for items listed in past management letters. In the event
of a problem, the City Manager, Assistant City Manager ,Finance Manager, and City Attorney will be
immediately notified in writing of any fraud, other illegal acts, or indications of illegal acts found during the
course of our audit work. All other discrepancies or weaknesses in the internal control system that we become
aware of will be communicated to management through discussion, the management recommendation letter,
and/or if it is a significant deficiency, as part of the single audit report, if necessary.
Our firm will comply will all terms and conditions set in the City's RFP.
Our firm will comply with all of the insurance requirements required for this engagement.
Please refer to Appendix-E for our current Insurance Coverage
PREPARED BY CLIENTS PBC LIST
Please see Appendix G—Sample PBC List.
Under penalties of perjury, I declare that I am an authorized signer and that there are no and have never been any
financial interests between any officials or employees of the City of Lake Elsinore, and Moss, Levy&Hartzheim,
LLP.
Respectfully submitted,
Craig A. Hartzheim, CPA
Partner
Moss,Levy&Hartzheim,LLP is an Equal Opportunity Employer
14
CITY OF LAKE ELSINORE
APPENDIX A-LICENSE TO PRACTICE IN CALIFORNIA
Moss, Levy & Harzheim, LLP
BOARD OF ACCOUNTANCY ISSUANCE DATE
LICENSING DETAILS FOR: 6998 JULY28, 2005
NAME:MOSS,LEVY,HARTZHEIM LLP EXPIRATION DATE
LICENSE TYPE:CPA-PARTNERSHIPS JULY 31, 2023
LICENSE STATUS:CLEAR
ADDRESS CURRENT DATE I TIME
9465 WILSHIRE BLVD 3RD FL JANUARY 18 2023
BEVERLY HILLS CA 90212 11:9:21 AM
LOS ANGELES COUNTY
15
CITY OF LAKE ELSINORE
APPENDIX B-CURRENT AND/OR RECENTLY COMPLETED GOVERNMENTAL AUDITS
CITIES AND REDEVII,OPMENT AGENCIES SCHOOL DISTRICTS
Alhambra,CA Acton-Agua Dulce Unified School District
Arcadia,CA Ballard School District
Arroyo Grande,CA Bellflower Unified School District
Artesia,CA Beverly Hills Unified School District
Atascadero,CA Blochman Union School District
Bellflower,CA Bradley Elementary School District
Buellton,CA Buellton Union School District
Brawley,CA Calaveras County Schools
Calabasas,CA Calexico Unified School District
Carmel-by-the-Sea,CA Calipatria Unified School District
Covina,CA Carpinteria Unified School District
Culver City,CA Casmalia School District
Dinuba,CA Castaic Union School District
Duarte,CA Cayucos Elementary School District
El Centro,CA Coast Unified School District
Eureka,CA Cold Springs School District
Greenfield,CA College Elementary School District
Grover Beach,CA Eastside School District
Healdsburg,CA El Segundo Unified School District
Holtville,CA Garvey School District
Hughson,CA Goleta Union School District
Imperial,CA Graves School District
Indio,CA Heber School District
La Canada Flintridge,CA Hughes-Elizabeth Lakes Union School District
La Habra Heights,CA Keppel Union School District
La Mirada,CA Lancaster School District
La Palma,CA Magnolia Union School District
Laguna Hills,CA Manhattan Beach Unified School District
Lindsay,CA Mark Twain Union Elementary School District
Los Alamitos,CA Meadows Union School District
Morgan Hill,CA Mission School District
Ojai,CA Monrovia Unified School District
Paso Robles,CA Montecito Union School District
San Gabriel,CA Mulberry School District
Santa Maria,CA Novato Unified School District
Taft,CA Orcutt Union School District
Watsonville,CA Pacific Unified School District
Westlake Village,CA Palmdale School District
Wheatland,CA Pleasant Valley Union School District
Willits,CA Rosemead School District
Yuba City,CA San Ardo Elementary School District
San Lucas School District
OTHER SCHOOL ENTITIES San Miguel Joint Union School District
Academia Semillas del Pueblo Charter School Santa Maria Joint Union High School District
Albert Einstein Academy Santa Monica-Malibu Unified School District
Antelope Valley Schools Transportation District Shandon Unified School District
Bright Star Secondary Charter Academy Solvang Elementary School District
East Bay Regional Occupational Program Temple City Unified School District
Garr Academy of Mathematics and Entrepreneurial Studies Torrance Unified School District
Pacoima Charter School Vallecito Union School District
Santa Ynez Valley Charter School Westmoreland Elementary School District
The Accelerated Schools Wilsona School District
Southern California Regional Occupational Center PUBLIC FINANCING AUTHORITIES
Stella Middle Charter Academy The majority of our Municipalities issue debt and do
Tri-Valley Regional Occupational Program so through an established Public Financing Authority.
16
CITY OF LAKE ELSINORE
APPENDIX B—CURRENT AND/OR RECENTLY COMPLETED GOVERNMENTAL AUDITS
COUNTIES FIRE PROTECTION DISTRICTS
Los Angeles County,CA(Master List) Cayucos Fire Protection District,CA
San Diego County,CA(Master List) Lakeport Fire Protection District,CA
Orcutt Fire Protection District,CA
SANITATION DISTRICTS
Carpinteria Sanitation District,CA OTHER DISTRICTS
Cayucos Sanitation District,CA Beach Cities Health District
County Sanitation Districts of Los Angeles County,CA County of San Diego Emergency Services Organization
-All 25 Districts County of San Diego First 5 Conirrission
Encina Wastewater Authority,CA County of San Diego In-Home Supportive Services
Montecito Sanitation District,CA Public Authority
Orange County Sanitation District,CA-Internal Audits County of San Diego Health and Human Services Agency
Ross Valley Sanitary District,CA Child Development Program Grant
Triunfo Sanitation District,CA County of San Diego MIOCR Grant
County of San Diego RLETC Grant
UTILITYDISTRICTS County of Los Angeles Delta Sigma Theta,Head Start
Georgetown Divide Public Utility District Program,Inc.
County of San Diego DA Office of Auto his.Fraud
WATER/IRRIGATION DISTRICTS Grant,Urban Auto Fraud Grant,WC Ins Fraud Grant
Aldercroft Heights County Water District,CA Los Angeles County Flood Control District
Foothill Municipal Water District,CA Marin/Sonoma Mosquito and Vector Control District
Main San Gabriel Basin Watermaster,CA Peninsula Health Care District
Marina Water District,CA San Diego Geographic Information Source
North Marin Water District,CA Tracy Area Public Facilties Financing Agency
Sweetwater Springs Water District,CA West Contra Costa Integrated Waste Management
Valley County Water District,CA Authority
Valley of the Moon Water District,CA
TRANSPORTATION DEVELOPMENT ACT
AMBULANCE SERVICES DISTRICT Arroyo Grande,CA
Cambria Community Healthcare District Brawley,CA
North Coast Emergency Medical Services Calexico,CA
El Centro,CA
CFNIFTERYDISTRICTS Grover Beach,CA
Arroyo Grande Cemetery District,CA Holtville,CA
Atascadero Cemetery District,CA Paso Robles,CA
Gridley-Biggs Cemetery District,CA San Luis Obispo County and Cities Area Planning
San Miguel Cemetery District,CA Council:
Santa Maria Cemetery District,CA Local Transportation Fund
State Transit Assistance Fund
COMMUNITY SERVICES DISTRICTS South County Area Transit,CA
Cambria Community Services District,CA South County/San Luis Obispo Transit,CA
Cuyama Community Services District,CA Transportation Agency for Monterey County,CA
Groveland Community Services District,CA Transportation Authority ofMarin
Heritage Ranch Community Services District,CA Association of Monterey Bay Area Governments
Los Alamos Community Services District,CA Santa Cruz Regional Transportation Commission
Nice Community Services District,CA
Rancho Murieta Community Services District,CA
Santa Ynez Community Services District,CA TRANSIENT OCCUPANCYTAX AUDITS
Vandenberg Village Community Services District,CA Represented the following municipalities and/or counties
in the audit of the hotel"bed tax" records:
RECREATION AND PARK DISTRICTS
Conejo Recreation and Park District,CA Arroyo Grande,CA Pismo Beach,CA
Isla Vista Recreation and Park District,CA Bellflower,CA Santa Maria,CA
Mountains Recreation and Conservation Authority,CA Bishop,CA South Lake Tahoe,CA
Rancho Simi Recreation and Park District,CA Calexico,CA Whittier,CA
Hayward Recreation and Park District,CA Carmel,CA Ojai,CA
BUILDING AUTHORITY
County of San Diego Regional Building Authority,CA
17
CITY OF LAKE ELSINORE
APPENDIX C—PEER QUALITY REVIEW REPORT
Our Peer Review included reviews of governmental (including municipalities, school districts, special districts)
and non-profit engagements. In the past three (3) years, our firm has not been required to submit under any
Federal or State desk review or field review of our audits.
Patrick D.Spofford,CPA
SPA F FOR D A N U)L A N D R Yam-P A, Todd C.Landry,CPA
MERE TO MAKE THE cOMri-EX SIMPLE. ucsnrewwcirro•n.wsd...�...u....
Report on the Firm's S%vsicr or Quakily Contrual
To Mass,Levy A liartd eim.1.1.1'
sad the Pear Review Committee of alit California Sootily of C1aAa
%%c have reviewed the system of quality ctintriol for the accounting and auditing practice of Mosu,Lev)&
I lartclieim,Llp(the form)in effect for the year ends el I t-"her 11.2020 1 iu►peer review w•as conducecd
in awurdmsce with tlnc Standards for Performing and Rcptirtmat tie Pam Re%iews established by the Par
Review Board ot'tlic Anuerisan Irutrtuac ofCartified Puhlic 1.oiuMarsla fSaar.darut+�
A sununar") of the nature, objectivd,scope, limitations of. and the procedure% performed in a Systcal
Renew it,,descrlued in the Standard% may be tinned at www awlin iwItfrvusthmary. The sutnmM also
includes an esptwiwio.ni of haw enKia�cments identified as nor performed or reported in conformity with
appliuhle prifessiorhal%■andaid,% d an.,arc c%aluatod by a peer re♦icier to dctcrtnsne a peer rc-.ww rating
Firm**Respos ibilk7
ilia firm as rosptrn■bk for designing a system of quality coasrol and c*er%pfying wit►it ul provide the firm
with rchsc.nahlc aswrance of perf,rming and repo tirtQ in conformity with applecahk prifes",ral tandani.
in all material respcca. The farm is abo respomishle for evaluating action►% to priimptly rcanadiate
eogrgemern deemed as m-A performed or reported in ctmformsy with pnife"tiinaal standards, when
appropriatc.and for remodi itnag we"nestes in as system of quality'doom%.i1 any
Peer Reviewer's Rospesalbillty
()ir resposnitulity w to eapreres an t1mains on the desige of the sysocm of quality conand and the twin'%
:.nnpimnccc therewith based on our re%iew.
Required Nrleeaons and CoasMeratiess
Nagafcrncros.e"Ivd for re%icw un lulod engagehnats paft,rmcd udcr Ouvr•nwhrnr Aattifnnx.tdawf.nn/a,
including compliance audits eider the Single Audit Act
A%a pan of our peer rc%iew',we comidercil re%wvi.by re•gularisn c mkm as communicated by the firm.if
applicable,in dcterniming the nature and natant of our proccd■wea.
iseficicscy LdestiAed is Ibe Firm's Systas of Quality Control
We mAcd the folkiwany dtttclemc-y dining ore rewww-
1 Tlac fwm's qusliq control policies and pomcduros addressing cnRagernenl perft wide
requires a review of ale eaRagernrnt%bite to iswmrx. Although this rcvacw-look place,ttic-
Firit should consider a more thorough re%iew'of the file%pour to ccintOctnrn And k"d.+wn
the% coittriisuted to audit engagerneets performed under Crus+rr/tmwxf AatlnrnnR .[fanJiyds
including compliance audits under the Single Audit Act, net oxrifarmeng It, prntc%%iorual
standardli in all material rvtpc is in Use aruac of audit lid amunr, ins& as ,teem. and
&,cumeMatioin of testinit specific to mane program compliance A simitar firtrl-g .c a, u Icd
on the F irin's pres.cius pew review
Opinion
1. — ..P.nw.. a cope deer rho defic.onry Paa-v i.a..l� .lw.rr.M.t ilsr c�sfrm .if yual.ty :rnen,l fix flit
accounting and auditing,prescuce of Muss,Levy A itawtrheari,1.1.1'in cffmi fur the year ended Dccemher
31.2020,has horn+usably designed and complied with to prwside the fsmh with reas..xiabic a%%iran.e of
perkrminK and reportenK in conformity with applerablc prvfctsional standard% in all material rcnpctits-
Finns can rennin a ratinE ofIvrss,Paris with Lkfiiriesary first/.trffri■/. Moss.I.a"& ltartzhehm_LLP ha,
received a peer revscw rating ofp avi rrh drJlrsrntcy-
Judy 26,2022 CJh
'8e9 iM Redlands Blvd.n 102.RmU ich.Ue 92373 • P O Boa 8847 Redard9 CA S2375 • Tel 909.792 1852 • Gan"792 20'5
18
CITY OF LAKE ELSINORE
APPENDIX D—RESUMES
Craig A.Hartzheim,C.P.A.—(Technical Partner)
• California licensed C.P.A. with 38 years of audit experience with governmental, non-profit, and
commercial entities
• Engagement partner for governmental and non-profit audits (Culver City office) including 25
municipal audits, 40 special district audits (including Los Angeles County Flood Control District
and the County Sanitation Districts of Los Angeles County), and 12 school districts and related
audits
• Has assisted governmental clients with year-end closings, key position interviews, preparation of
award winning Annual Comprehensive Financial Reports, and preparation of State Controller's
Reports
• Has met or exceeded all continuing education requirements including recent courses in the
following:
2022, 2021, and 2020 Governmental Accounting Conference
2022, 2021, and 2020 School District Conference
2022, 2021, and 2020, GARS Update
Single Audits of Governmental Entities
Preparing Governmental Financial Statements
Yellow Book, Government Auditing Standards
GAAS Guide
Other Comprehensive Basis of Accounting(OCBOA)Statements
Audit Standards update
Fraud in Audits
Auditing update
• Bachelor of Science degree in Accounting from Marquette University,was conferred in
1982
• Member of the following:
American Institute of Certified Public Accountants
California Society of Certified Public Accountants
• Knowledgeable in all areas of tax law including non-profit and payroll tax issues
19
CITY OF LAKE ELSINORE
APPENDIX D—RESUMES
Hadley Y.Hui, C.P.A.—Partner
• California licensed C.P.A. with 24 years of audit experience with governmental, non-profit, and
commercial entities
• Partner in charge of 20 municipal audits, 26 special districts audits, 8 special audits for the
County of San Diego, and 20 school districts and related audits
• Partner for the CSS and DPSS Monitoring Projects for Los Angeles County
• Has met or exceeded all continuing education requirements including recent courses in the
following:
2022, 2021, and 2020 Governmental Accounting Conference
2022, 2021, and 2020 School District Conference
2022, 2021, and 2020, GAAS Update
Yellow Book, Governmental Auditing Standards
Fraud in Audits
GAAS Guide
Risk-Based Auditing Part 1, Part 2
Accounting and Auditing Update
Guide to Auditing Control Course 1, Course 2
• Extensive knowledge of database systems,networking, and various accounting software
• Bachelor of Arts degree in Economics with a minor in Accounting from University of California
—Los Angeles,was conferred in 1997
• Member of the following:
American Institute of Certified Public Accountants
California Society of Certified Public Accountants
• Knowledgeable in all areas of tax law including non-profit and payroll tax issues
20
CITY OF LAKE ELSINORE
APPENDIX D—RESUMES
Wilson Lam, CPA, CFE, CGFM—Partner
• California licensed C.P.A. with 14 years of audit experience with governmental and commercial
entities
• Manager for 13 municipal audits,4 special district audits, and 9 school districts audits
• Has met or exceeded all continuing education requirements including recent courses in the
following:
2022, 2021, and 2020 Governmental Accounting Conference
2022, 2021, and 2020 Single Audit Compliance
GASB 34 Training Seminars
Internal Control and Fraud in Governmental Engagements
Government Auditing Standards— Yellow Book
Advanced Fraud Techniques
Risk-Based Auditing Part 1, Part 2
2019 Accounting and Auditing Update
Guide to Auditing Control Course 1, Course 2
• Bachelor of Arts in Accounting and Finance from California State University Fullerton, conferred
in 2005
Bin Zeng—Principal(Manager)
• Manager with 14 years of audit experience with governmental and commercial entities
• Manager for 12 municipal audits and 14 special district audits
• Has met or exceed all continuing education requirements including recent courses in the
following:
2022, 2021, and 2020 Governmental Accounting Conference
2022, 2021, and 2020 Single Audit Compliance
2022, 2021, and 2020,Accounting and Auditing Standards Update:Risk
Assessment Standards
2022 Advanced Audit Standards Workshops: Understanding Risk Assessment
2022, 2021, and 2020, GAAS Update
Auditors'Responsibilities for Detection of Fraud
Internal Control and Fraud in Governmental Engagements
Governmental Auditing Standards- Yellow Book
Implementing SAS 112 & 114
Advanced Fraud Techniques
Grants Management
• Bachelor of Arts Degree in Business Economics from the University of California—Los Angeles,
conferred in 2007
21
CITY OF LAKE ELSINORE
APPENDIX D—RESUMES
Terry Robertson,C.P.A—Manager
• Audit Manager for the City of Los Angeles
• Manager with 19 years of audit experience with governmental, non-profit, and commercial
entities
• Manager for 12 municipal audits, 8 joint power authority audits, and 21 special district audits
• Has met or exceeded all continuing education requirements including recent courses in the
following:
2022, 2021, and 2020 Governmental Accounting Conference
2022, 2021, and 2020 Single Audit Compliance
2022, 2021, and 2020, GAAS Update
GASB 34 Training Seminars
Auditors'Responsibilities for Detection of Fraud
Internal Control and Fraud in Governmental Engagements
Government Auditing Standards— Yellow Book
Implementing SAS 112 & 114
Advanced Fraud Techniques
Grants Management
• Bachelor of Science degree in Accounting from University of Quinnipiac,was conferred in 1998
Cody Hartzheim—Senior Accountant
• Senior Accountant with 8 years of audit experience with governmental, non-profit, and
commercial entities
• Senior Accountant for 16 municipal audits and 6 school district audits
• Has met or exceeded all continuing education requirements including recent courses in the
following:
2022, 2021, and 2020 Governmental Accounting Conference
Governmental Auditing Standards— Yellow Book
2022 Accounting and Auditing Standards Update:Risk Assessment Standards
2022, 2021, and 2020 Single Audit Compliance
• Bachelor of Science in Accounting and Finance from Marquette University, conferred in 2014
22
CITY OF LAKE ELSINORE
APPENDIX D—RESUMES
Xi Long—Staff Accountant
• Has met or exceeded all continuing education requirements including recent courses in the
following:
2022 Governmental Accounting Conference
2022 School District Conference
2022 Sing Audit Compliance
Government Auditing Standards— Yellow Book
• Bachelor of Arts in Business Economics with emphasis in Accounting from University of
California,Los Angeles,was conferred in 2022
Nicholas Fuchs—Staff Accountant
• Accountant with 1 year of audit experience with governmental and commercial entities
• Has met or exceeded all continuing education requirements including recent courses in the
following:
2022 Governmental Accounting Conference
2022 Single Audit Compliance
Government Auditing Standards— Yellow Book
• Bachelor of Science in Business Administration with emphasis in Accounting from California
State University—Dominguez Hills,was conferred in 2021
Don Mojica—Staff Accountant
• Accountant with 1 year of audit experience with governmental and commercial entities
• Has met or exceeded all continuing education requirements including recent courses in the
following:
2022 Governmental Accounting Conference
2022 School District Conference
2022 Single Audit Compliance
Government Auditing Standards— Yellow Book
• Bachelor of Arts in Economics with emphasis in Accounting from University of California,
Riverside,was conferred in 2022
23
CITY OF LAKE ELSINORE
APPENDIX D—RESUMES
Nickolas Hartzheim—Staff Accountant
• Staff Accountant with 2 years of audit experience with governmental and special districts
• Staff Accountant for 6 municipal audits,non-profit, and 4 special district audits
• Has met or exceeded all continuing education requirements including recent courses in the
following:
2022, 2021, and 2020 Governmental Accounting Conference
2022 and 2021 GARS Update
Auditors'Responsibilities for Detection of Fraud
Government Auditing Standards (GAO) Updates and Changes
Internal Control and Fraud in Governmental Engagements
Government Auditing Standards— Yellow Book
Implementing SAS 112 & 114
• Bachelor of Science from San Jose University,was conferred in 2018
David Ortiz—Computer Specialist
• Auditor with 22 years of audit experience with governmental and commercial entities
• Computer specialist—with emphasis in fund accounting software
• Extensive knowledge of database systems,networking, and accounting software
• Bachelor of Science degree in Business Administration with an emphasis in Accounting from
California Polytechnic State University San Luis Obispo,was conferred in 1995
24
CITY OF LAKE ELSINORE
APPENDIX E—SEGMENTATION AND BUDGETED HOURS BY SEGMENT
Estimated Hours
AUDIT SEGMENTS Clerical Staff Senior Manager Partner Total
Planning 2 5 5 3 15
Risk Assessment 1 4 3 2 10
Audit Conferences 4 4 8
(Preliminary,Progress,
and Exit)
Correspondence 2 2 2 6
Review/Documentation of
Internal Controls:
Documentation of systems 15 10 10 1 36
Testing of systems 15 10 10 1 36
Compliance Testing (includes Single Audit) 30 25 15 70
Year End Balances Testing 45 55 25 125
Revenue and Expense
Analysis(Analytical Procedures) 25 25 20 2 72
Preparation,Review,and Findings 12 15 32 25 23 107
GRAND TOTAL* 14 150 168 117 36 485
*-Includes all services required in the RFP,some may not be applicable every fiscal year.
25
CITY OF LAKE ELSINORE
APPENDIX F-INSURANCE
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AC'URO� CERTIFICATE OF LIABILITY INSURANCE 03/0 /2022 rr>
03ro12022
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER THIS
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BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER{S), AUTHORIZED
REPRESENTATIVE OR PRODUCER.AND THE CERTIFICATE HOLDER
IMPORTANT- If the certificate holder Is an ADDITIONAL INSURED.the pollcyfleel must have ADD(T10NAL INSURED provisions or be en001e041
If SUBROGATION IS W'GIYED, subject to the terms and con4Uons of the policy, certain policies may require an endorsement A statement on
this csrttncate does not confer rights to the certificate holder In Ileu of such end0rsertwntisl.
/WANXICER EZOWTACT
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CERTIFICATE HOLDER CANCELLATION
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AJTJIOPIZt:)IrtowtStNTATTIt r
ri 1988-2015 ACORD CORPORATION.All rights reserved.
ACORD 25(2016;03) The ACORD name and logo are registered marks of ACORD
26
CITY OF LAKE ELSINORE
APPENDIX G-SAMPLE PBC LIST
1 Check registers for all accounts for current fiscal year(7/1 to 6/30)
2 Eist of awarded bid contracts for FY22-23
3 Current employee list-full name,position,salary information
4 Payroll register for the month of December and June
5 Any MOU and salary schedules -effective during current fiscal year
6 941 payroll forms and reconciliation between 941 forms and payroll GE expenditures
7 Fee schedules FY22-23
8 Cash receipt journal(7/1 -6/30)
9 Business license cash receipt journal and web transaction report(7/1 -present)
10 Permits report(7/1 -present)
11 Utility billing register-October and April
12 Park&Rec.transaction detail report (7/1 -present)
13 Bank statements for current fiscal year
14 Deposit log for current fiscal year
15 Monthly reporting package and GE details -(7/1 -6/30)
16 Chart of Accounts,in excel
17 Preliminary trial balance showing current year vs.prior year and budget to actual of current year
18 Preliminary detail general ledger,in excel or pdf
19 Final trial balance,in excel
21 Final detail general ledger,in excel or pdf
21 Gann/Appropriations Limit
22 All bank account statements and reconciliations -July 2022 and June 2023
23 All investments and reconciliations -June 30,2023
24 Investment report with FMV-June 30,2023 and support does.
25 Cash held with fiscal agent statements,ifapplicable
26 EAIF information and statements,ifapplicable
27 Cash receipts for periods subsequent to year end
28 Accounts receivable list at year end per fund and supporting does.
29 Utility billing accrual schedule
30 AR aging report-6/30/2023
31 Inventory valuation report 6/30/2023-for all locations
32 Loan/notes receivable documents
33 Lead schedule ofprepaid costs and other assets with supporting documentation
34 Lead schedule ofchanges in capital assets and accumulated depreciation-by type
Combining schedules ofchanges in capital assets and accumulated depreciation-by type
(land,CIP,WIP,building,etc.)with reconciliations to capital outlay and other supporting
35 detail for additions and deletions
36 Capital Asset Disposals Schedule and its backups (invoices and cancelled checks)
37 Capital Asset Depreciation schedule
38 Check registers for all accounts for subsequent period(July-Sept)
39 Accounts payable list at fiscal year-end per fund
40 Supporting schedule ofretentions payable per fund
41 Payroll accrual calculations at fiscal year-end
42 Supporting schedule ofaccrued payroll and benefits
43 Supporting schedule ofuneamed revenue at fiscal year end
44 Supporting schedule ofdeposits payable at fiscal year-end
45 Supporting schedule ofmiscellaneous liabilities
46 New bond/lease/loans documents
47 Bonds Payable schedule at fiscal year end
48 Premium/discount amortization schedules
49 Supporting schedule ofinterest payable
50 Supporting schedule ofclaims payable
51 Capital lease schedule at fiscal year end
52 GASB 68 Valuation Report-6/30/2023 and related census data
53 GASB 75 Valuation Report-6/30/2023 and related census data
54 Census data testing done by the City
55 Compensated absences at year end with year end wage calculation broken out by fund
56 Schedule ofadvances to/from other funds,with corresponding agreements between the funds
57 Schedule of due to/from other funds
58 Schedule oftransfers in/out to/from other funds
59 Schedule of Federal Expenditures
27