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6.7 FORVIS, LLP Audit Agreement
AGENDA SECTION NO: ITEM NO: Page 1 CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 01/23/2023 4:00 P.M. [.1 7 ORIGINATING DEPARTMENT: FINANCE AND ADMINISTRATION BY: Debbie Pack FISCAL APPROVAL: FINAL APPROVAL: 4W ITEM: Authorize the City Manager to execute an agreement between the City of Salina and FORVIS, LLP, Certified Public Accountant for an audit of City records for the years ending December 31, 2022, 2023 and 2024, with (2) one-year possible extensions. BACKGROUND: In December, 2022, the City's current audit firm Gordon CPA LLC, notified staff that after completion of the 2021 fiscal year audit, Gordon CPA would no longer be performing municipal audits. The 2021 fiscal audit has been completed. Staff prepared and put out a request for proposals for professional audit services for the City of Salina in December, 2022. The RFP set out specific qualifications and timelines being sought by the City for their future audits. The RFP was sent directly to twelve (12) local and regional known municipal audit firms, as well as, was posted on the City's website and published in the local paper. It is important to note that multiple firm's responded indicating they no longer do municipal audits. Two (2) firms responded with proposals. An evaluation committee consisting of the Director of Finance, the Deputy Director of Finance, and the Deputy City Manager reviewed both proposals for mandatory qualifications such as independence, no conflict of interest, external quality control and adherence to the RFP and technical qualifications such as municipal audit experience, references, qualification of staff assigned to audit, audit coverage and realistic time estimates for completion of audit. After reviewing the proposals for these criteria, the team then compared costs. After reviewing the proposals and determining that FORVIS had the lowest bid, staff contacted references. FORVIS had very favorable references when asked about the firms' abilities to meet the requirements, working relationships, experience with cities our size and history of providing reports on a timely basis. One specific reference indicated that their size allows for them to be able to provide a wide array of resources on many topics which is becoming more and more valuable with the influx of financing situations that the City becomes involved with. Approval of this agreement at this time allows City staff to schedule interim audit fieldwork which puts the City in a better position to complete the audit within a timeline consistent with industry standards. CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 01/23/2023 4:00 P.M. AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL: NO: BY: ITEM FINANCE AND ADMINISTRATION FINAL APPROVAL: NO: Page 2 BY: Debbie Pack BY: The table below summarizes the bids provided. City of Salina Audit RFP December, 2022 Current RFP Responses Received Gordon CPA FORVIS Hood & Associates Audit $ 42,975.00 $ 64,770.00 $ 61,900.00 STAR included included included Subtotal Audit +STAR $ 42,975.00 $ 64,770.00 $ 61,900.00 Total Est Hours 305 354 Singe Audit (Grants) 1st major* $ 3,500.00 included $ 4,500.00 additional major $ 3,000.00 Total Including Single Audit $ *City had 1 in 2021 Annual Increase Year 1 Year 2 Year 3 FISCAL NOTE: 46, 475.00 $ 64, 770.00 $ 66, 400.00 5.5% 5.0% $ 64,770.00 $ 66,400.00 $ 68, 332.35 $ 69, 720.00 $ 72, 090.63 $ 73, 206.00 The cost of this engagement will be split between the General Fund and the Water and Sewer Fund. AGENDA SECTION NO: ITEM NO: Page 3 RECOMMENDED ACTION: CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 01/23/2023 4:00 P.M. ORIGINATING DEPARTMENT: I FISCAL APPROVAL: BY: FINANCE AND ADMINISTRATION FINAL APPROVAL: BY: Debbie Pack 1. Authorize the City Manager to execute the agreement with FORVIS LLP for audit services for fiscal years ending December 31, 2022, 2023 and 2024. 2. Amend authorization as Commission deems appropriate. 3. Postpone authorization, providing staff with direction on additional information requested to move forward. 4. Deny authorization which would leave the City without an audit engagement for their 2022 audit and could delay the completion of this audit. Cc: Request for Proposal Bidder Responses Bid Evaluation RFP Description: Department: City0f Salina REQUEST FOR PROPOSALS Professional Audit Services Finance and Administration Contact: Debbie Pack, Director Email: debbie.pack@salina.or Phone: (785) 309-5735 Proposal Due: December 30, 2022 at 4:00 PM Copy Requirements: Submit four (4) copies of the proposal plus one electronic copy in PDF format via email to debbie.pacl<@salina.org Submit to Address: City of Salina — Finance and Administration Debbie Pack, Director 300 West Ash, Room 206 Salina, Kansas 67402-0736 1 REQUEST FOR PROPOSAL FOR PROFESSIONAL AUDITING SERVICES TABLE OF CONTENTS I. INTRODUCTION A. General Information B. Term of Engagement C. Subcontracting II. NATURE OF SERVICES REQUIRED A. Scope of Work to be Performed B. Auditing Standards to be Followed C. Reports to be Issued D. Special Considerations E. Working Paper Retention and Access to Working Papers III. DESCRIPTION OF THE GOVERNMENT A. Name of Contact Person B. Background Information C. Budgetary Basis of Accounting D. Pension Plans E. Component Units F. Computer Systems G. Availability of Prior Audit Reports and Working Papers IV. TIME REQUIREMENTS A. Submission Calendar B. Notification and Contract Dates C. Date Audit may Commence D. Schedule for the 2022 Fiscal Year Audit V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department and Clerical Assistance B. Information Technology Assistance C. Statements and Schedules to be prepared by City Staff D. Work Area, Telephone, Photocopying and FAX Machines E. Report Preparation K VI. SUBMISSION REQUIREMENTS A. General Requirements B. Process 1. Inquiries 2. Submission of Responses C. Technical Proposal 1. General Requirements 2. Independence 3. License to Practice in Kansas 4. Firm Qualifications and Experience 5. Partner, Supervisory and Staff Qualifications and Experience 6. Similar Engagements with Other Governmental Entities 7. Specific Audit Approach VII. EVALUATION PROCEDURES A. Audit Services Selection Committee B. Evaluation Criteria 1. Mandatory Elements 2. Technical Proposals 3. Interview C. Oral Presentations D. Final Selection and Fees E. Special Conditions for Submitting a Response VIII. CONTRACT REQUIREMENTS A. General Information ►- W A. Respondent Certificate B. Respondent Certificate C. Schedule of Hours and Expenses 3 REQUEST FOR PROPOSAL FOR PROFESSIONAL AUDITING SERVICES I. INTRODUCTION A. General Information The City of Salina ("City") is inviting proposals from qualified firms of certified public accountants, licensed to practice in Kansas, to audit its financial statements for the calendar years ending December 31, 2022, 2023 and 2024, with the opportunity for two (2), one (1) year options to renew. These audits are to be performed in accordance with the provisions contained in this Request for Proposal ("RFP"). There is no expressed or implied obligation for the City to reimburse responding firms for any expenses incurred in preparing proposals in response to this request. To be considered, all interested firms must follow the submission requirements set forth in this RFP to include the requirement that four (4) paper copies and one (1) electronic copy of a response must be received by the Finance and Administration Department at City/County Building, 300 West Ash Street, Room 206, Salina, Kansas 67402-0736 by 4:00 p.m. on December 30, 2022. The City reserves the right to reject any or all responses submitted. Responses submitted will be evaluated by the City's Finance and Administration Department and the City Manager's office. During the evaluation process, the City reserves the right, where it may serve the City's best interest, to request additional information or clarifications from proposers, or to allow corrections of errors or omissions. At the discretion of the City, firms submitting responses may be requested to make oral presentations as part of the evaluation process. The City reserves the right to retain all responses submitted and to use any ideas in a response regardless of whether that response is selected. Submission of a response indicates acceptance by the firm of the conditions contained in this RFP. It is anticipated a negotiated contract will be presented to the City Commission by January 30, 2023. B. Term of Engagement Subject to annual availability of an appropriation required by the State cash basis law and the requirements of this RFP, a three-year engagement is contemplated with the possibility of two single year extensions, however, not guaranteed. Any engagement for audit work beyond the initial three year contract for auditing the City's financial statements shall be conditioned on an annual contract review and recommendation of the Finance Director, the satisfactory negotiation of terms, including a cost acceptable to 4 the City, and approval of the City's Governing Body. The first year of the contract will commence with the 2022 engagement. C. Subcontracting No subcontracting will be allowed without express prior written consent of the City. II. NATURE OF SERVICES REQUIRED A. Scope of Work to be Performed The City requires the auditor to express an opinion on the fair presentation of the financial position of its governmental activities, business -type activities, each major fund, component units, and the aggregate remaining fund information of the City, as well as on the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the City's General, Special Revenue, Risk funds, in conformity with generally accepted accounting principles (GAAP). The City also desires the auditor to prepare all supporting schedules contained in the comprehensive annual financial report including the required supplemental information. The auditor is not required to audit the introductory or statistical sections. As required as an integral part of an audit, the auditor is expected to obtain an understanding of the internal control structure of the City and whether the internal controls have been placed in operation. In December, 2018, the City of Salina issued Sales Tax Revenue (STAR) Bonds that require a statutory audit of the use of the STAR Bond proceeds. The City would like to incorporate this with the annual audit process. B. Auditing Standards to be Followed The audit must be performed in accordance with the following standards: 1. Generally accepted auditing standards, as promulgated by the American Institute of Certified Public Accountants. 2. The Kansas Municipal Audit Guide publication. 3. The current revision of Government Auditing Standards, issued by the Comptroller General of the United States. 4. GFOA's Governmental Accounting, Auditing and Financial Reporting Publication (GAAFR) 5. The current AICPA industry audit guide titles Audits of State and Local Governmental Units. 6. The Single Audit Act, and all amendments thereto. 5 7. Title 2, CFR Part 200 — Uniform Administration Requirements, Cost Principles and Audit Requirements for Federal Awards. C. Reports to be Issued 1. A report on the fair presentation of the financial statements in conformity with GAAP including an opinion on the fair presentation of the supplementary schedule of expenditures of federal awards in relation to the audited financial statements. 2. A management letter informing the City staff of certain recommendations of the auditor, if any, which, if implemented, would, in the auditor's opinion, increase efficiency, improve internal controls, or enhance management. 3. Provide all Basic Financial Statements, Fund Financial Statements, Notes to Basic Financial Statements and Required Supplemental Information as required by the Governmental Accounting Standards Board. 4. Preparation of a single audit report and submission of all documents and filings (if necessary) in accordance with the OMB Circular A-133 and any supplemental directives with reports provided accordingly. The audit is conducted simultaneously to the audit of the City's financial statements. 5. A report on compliance applicable to each major federal program. 6. Other reports not specified herein, but which are required by currently effective generally accepted auditing standards and by current government auditing standards. In the required reports on compliance and internal controls, the auditor shall communicate with the City any significant deficiencies found during the audit, if any. Insignificant deficiencies discovered by the auditors shall be reported in a separate letter to City management, which shall be referred to in the reports on compliance and internal controls. The reports on compliance shall include all instances of noncompliance. Irregularities and illegal acts. Auditors shall be required to make immediate, written report of all irregularities and illegal acts or indications of illegal acts of which they become aware to both the City Mayor and City Commission. D. Special Considerations 1. By the third year of the contract, the City would like to send its comprehensive annual financial report to the Government Finance Officers N. Association of the United States and Canada for review in its Certificate of Achievement for Excellence in Financial Reporting program. It is anticipated that the auditor will assist the City in reaching that goal and review the CAFR and provide special assistance to the City to meet the requirements of that program. 2. The City currently anticipates that it will prepare one or more official statements in connection with the sale of debt securities which will contain the general purpose financial statements and the auditor's report thereon. The auditor shall be required, if requested by the fiscal advisor and/or the under -writer, to issue a "consent and citation of expertise" as the auditor and any necessary "comfort letters". The City's 2021 CAFR is available on the City's website at http://www.ci.salina.ks.us/Departments/Finance E. Working Paper Retention and Access to Working Papers All working papers and reports must be retained, at the auditor's expense, for a minimum of five (5) years, unless the firm is notified in writing by the City of the need to extend the retention period. The auditor will be required to make working papers available, upon request, to representatives of the City. In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance. Working papers prepared by the City will be provided to the auditors in an electronic format whenever it is feasible. Working papers and other supporting documents generated by the City in paper format may be copied by the auditors, but the original documents are property of the City, shall not be removed from the premises, and shall be returned to the City intact when audit fieldwork is completed. III. DESCRIPTION OF THE GOVERNMENT A. Name of Contact Person The auditor's principal contact with the City will be Rick Welch, Deputy Director of Finance and Administration (785) 309-5735, or a designated representative, who will coordinate the assistance to be provided by the City to the auditor. B. Background Information Detailed information on the government and its finances can be found in the 2021Comprehensive Annual Financial Report and the 2023 Annual Budget document. These documents are available on the City's website at: 7 http://www.ci.saIina.ks.us/Departments/Finance C. Budgetary Basis of Accounting All legal annual operating budgets are prepared using the modified accrual basis of accounting and the current financial resources measurement focus. Under this basis, revenues are recognized in the accounting period in which they become measurable and available. Expenditures are recognized in the accounting period in which the fund liability is incurred, if measurable. D. Pension Plans The City of Salina participates in a multiple -employer pension plan administered by the Kansas Public Employees Retirement System (KPERS). E. Component Units The City of Salina has two discretely presented component units, Salina Airport Authority and Salina Housing Authority and one blended component unit, Salina Field House Qualified Active Low -Income Community Business, Inc. (SFH QalicB). F. Computer Systems Hardware and Software The City utilizes Tyler Technology's MUNIS financial accounting software which allows for on-line inquiries of account balances and transactions. G. Availability of Prior Audit Reports and Working Papers Interested proposers who wish to review prior year's audit reports and management letters should contact Debbie Pack at (785) 309-5735 or debbie.pack@salina.orp. Prior year CAFRs can be found on the City's website at http://www.ci.salina.ks.us/Departments/Finance. The City will use their best effort to make prior audit reports and supporting working papers available to proposers to aid their response to this RFP. IV. TIME REQUIREMENTS A. Submission Calendar The following is a list of key dates up to and including the date responses are due to be submitted: • Request for proposals issued December 9, 2022 • Due date for submissions - 4 p.m. December 30, 2022 B. Notification and Contract Dates • Review of proposals January 3-10,2023 • Begin negotiation of contract for service January 11, 2023 • Contract approved by Governing Body January 23,2023 C. Date Audit may Commence Preliminary work may begin immediately following contract date. D. Schedule for the 2022 Fiscal Year Audit The City will make every effort to have all year-end records ready for the audit and audit schedules prepared by March 30, 2023 The City would like to follow the audit schedule listed in the table below. The City is open to variation in the timing of audit related events as long as the final report can be issued/presented at the last Commission Meeting in June. The final report and ten (10) signed copies should be delivered to: City of Salina Rick Welch, Deputy Director of Finance 300 W. Ash Street, Room 206 Salina, KS 67402-0736 The City also requests an electronic pdf copy. V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department and Clerical Assistance The Finance Department staff and responsible management personnel will be available during the audit to assist the selected firm by providing information, documentation and explanations. The preparation of confirmations will be the responsibility of the City. The auditor is responsible for sending the confirmations, following up on any discrepancies, and preparing and sending any second requests. B. Information Technology Assistance City IT personnel will be available to provide systems documentation and explanations. The Auditor will be provided computer access and the use of City computer hardware and software. It is expected that the auditor will utilize the City's computer system when performing tests of individual transactions. C. Statements and Schedules Prepared by City Staff The City staff has not previously prepared the majority of the report's statements and schedules. It is anticipated that the auditors will prepare the statements and schedules while transitioning this responsibility to City staff. The successful firm should budget additional time to assist in organizing and guiding staff on the first year "prepared by client" work papers and statements and schedules. Working papers and other supporting documents generated by the City in paper format may be copied by the auditors, but the original documents are property of the City, shall not be removed from the premises, and shall be returned to the City intact when the audit fieldwork is completed. D. Work Area, Telephone, Photocopying, Internet and FAX Machines The City will provide the auditor with a reasonable workspace, internet connections, a telephone, and access to a photocopying and fax machine. Long distance and excessive fax costs will be at the auditor's expense. E. Report Preparation Report preparation, initial editing and printing, and the final report in the form of a "camera- ready" copy appropriate for delivery to the printer, shall be the responsibility of the auditor. The auditor shall print, bind, and deliver at least ten (10) copies of the final report to the City. 10 VI. SUBMISSION REQUIREMENTS A. General Requirements Submissions received after the date and time required by and stated in this RFP shall not be considered. Such non -complying submissions shall be returned unopened providing the entity submitting the response is identified on the response envelope. The City reserves the right to reject any or all submissions and to waive any minor informality, technicality or irregularity in any submission. Submissions will be time -stamped upon receipt and held in a secure place until the established due date. Submissions will not be opened publicly or disclosed to unauthorized persons, but will be opened in the presence of two or more City officials. A record of submissions will be established, which will include for all submissions: the name of the entity submitting the response, a description sufficient to identify the services offered, the names of the City officials present and the date and time the submissions were opened. All responses and related reference information submitted in response to this RFP will become the property of the City and will not be returned. Each entity submitting a response waives any right of confidentiality as to the response documents. If an entity submitting a response considers certain material in the response proprietary information, it shall clearly designate those portions of the response it wishes to remain confidential. As a public entity, the City is subject to making records available for public disclosure. The City will attempt to maintain the confidentiality of material marked proprietary; however, it cannot guarantee that information will not be made public. The City reserves the right to (1) accept or reject any and all submissions and to waive any technicalities or irregularities involving any submission and to cancel the RFP process at any time prior to entering into a formal contract for auditing services, (2) not award a contract for any or all of the services that are the subject of this RFP process, (3) negotiate contract terms acceptable to the City with the successful auditor and (4) disregard all nonconforming, non-responsive or conditional submissions. During the evaluation process, the City reserves the right to request additional information or clarifications from those firms submitting responses and to allow corrections of errors and/or omissions. Submission of a response indicates acceptance bythe firm submitting the response of the terms, conditions and specifications contained in this RFP to include the contract requirements set forth herein. 11 The City will not pay for any information herein requested, nor is it liable for any costs incurred by those firms submitting responses. The City reserves the right to select the submission that will best meet the needs of the City. Submissions that do not meet the stated requirements will be considered in non-compliance and will be disqualified unless the City waives such non-compliance. No submission may be withdrawn for a period of thirty (30) days from the date set for the opening thereof. By submission of a response, each entity submitting a response certifies and acknowledges that: It has not paid nor agreed to pay any person, other than a bona fide employee, a fee or a brokerage fee resulting from the award of the contract. The City may, by written notice to the entity submitting the response, reject the RFP or cancel any award under this RFP if it is found by the City that gratuities, in the form of entertainment, gifts or otherwise were offered or given to any representative of the City with a viewtoward securing an order or otherfavorable treatment with respect to this RFP or the entity submitting the response participated in collusion with another entityto restrain or eliminate competition. The contents of this RFP and any clarifications distributed or issued by the City shall become part of the contractual obligation and incorporated by reference into the ensuing contracts as the City deems appropriate. B. Process 1. Inquiries Inquiries concerning the proposal must be made to: City of Salina, Kansas Debbie Pack, Director 300 West Ash Street, Room 206 Salina, KS 67402-0736 (785) 309-5735 debbie.pack@salina.org 12 2. Submission of Responses The following material is required to be received by 4:00 p.m., December 30, 2022, for a proposing firm to be considered: a. In addition to four (4) paper copies, proposal must also be submitted electronically via email. All proposal materials must be submitted in a sealed envelope marked as follows: City of Salina Request for Proposal— Professional Auditing Services Finance Department—Attn: Debbie Pack All submissions shall include the following: i. Title Page Title page showing the request for proposals' subject; the firm's name; the name, address and telephone number of a contact person; and the date of the submission. ii. Table of Contents iii. Transmittal Letter A signed letter of transmittal that briefly states the proposer's understanding of the work to be done, the commitment to performthe work within the time period, a statement whythe firm believes itself to be best qualified to perform the engagement and a statement that the submission is a firm and irrevocable offer for 2022. iv. Detailed Response The detailed response should follow the order set forth in Section VI C of this RFP. V. Executed copies of Respondent Certificates attached to this request for proposals (Appendix A and Appendix B). 13 vi. Schedule of Hours The detailed response should include the number of hours required for each type of employee, (IE. partner, manager, supervisory staff, staff, and other) for each entity to be audited (Appendix C). b. Respondents should send the completed response to the following address: City of Salina Finance Department—Attn: Debbie Pack 300 West Ash, Room 206 Salina, KS 67402 C. Technical Proposal 1. General Requirements The purpose of the technical proposal is to demonstrate the qualifications, competence and capacity of the firms seeking to undertake an independent audit of the City of Salina in conformity with the requirements of this RFP. As such, the substance of proposals will carry more weight than their form or manner of presentation. The Technical Proposal should demonstrate the qualifications of the firm and of the particular staff to be assigned to this engagement. It should also specifyan audit approach that will meet the RFP's requirements. THERE SHOULD BE NO DOLLAR UNITS OR TOTAL COSTS INCLUDED IN THE TECHNICAL PROPOSAL DOCUMENT. The Technical Proposal should address all the points outlined in the request for proposals. The proposal should be prepared simply and economically, providing a straightforward, concise description of the proposer's capabilities to satisfy the requirements of the RFP. While additional data may be presented, Items 2 through 7 must be included. They represent the criteria against which the response will be evaluated. 2. Independence The firm should provide an affirmative statement that it is independent of the CityofSalina as defined by [generally accepted auditing standards/the U.S. General Accounting Office's Government Auditing Standards (2011)]. 14 The firm also should provide an affirmative statement that it is independent of all of the component units of the City of Salina as defined by those same standards. The firm should also list and describe the firm's professional relationships involving the City of Salina or any of its agencies, component units or primary government for the past five (5) years, together with a statement explaining why such relationships do not constitute a conflict of interest relative to performing the proposed audit. In addition, the firm shall give the City written notice of any professional relationships entered into during the period of this agreement. 3. License to Practice in Kansas An affirmative statement should be included indicating that the firm and all assigned key professional staff are properly licensed to practice in Kansas. 4. Firm Qualifications and Experience The response should state the size of the firm, the size of the firm's governmental audit staff, the location of the office from which the work on this engagement is to be performed and the number and nature of the professional staff to be employed in this engagement on a full-time basis and the number and nature of the staff to be so employed on a part-time basis. If the proposer is a joint venture or consortium, the qualifications of each firm comprising the joint venture or consortium should be separately identified and the firm that is to serve as the principal auditor should be noted, if applicable. The firm is also required to submit a copy of the report on its most recent external quality control review, with a statement whether that quality control review included a review of specific government engagements. The firm shall also provide information on the results of any federal or state desk reviews or field reviews of its audits during the past three (3) years. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with state regulatory bodies or professional organizations. 15 5. Partner, Supervisory and Staff Qualifications and Experience The firm should identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement and indicate whether each such person is licensed to practice as a certified public accountant in Kansas. The firm also should provide information on the government auditing experience of each person, including information on relevant continuing professional education for the past three (3) years and membership in professional organizations relevant to the performance of this audit. The firm should provide as much information as possible regarding the number, qualifications, experience and training, including relevant continuing professional education, of the specific staff to be assigned to this engagement. Specifically, the response should state each staff members training and experience in the following areas: a. Governmental Accounting Standards Board Statements 74 and 75 b. Statements on Auditing Standards Statements 104-115 C. Single Audits of municipalities d. General obligation bonds e. Investments in U.S. agencies, Treasury Notes, Treasury Bills, and Kansas Municipal Investment Pool f. STAR Bonds g. Neighborhood Revitalization Plans h. Community Improvement Districts i. Tax Increment Financing Districts j. Pension plans k. Qualified Activity Low -Income Community Business The firm also should indicate how the quality of staff over the term of the agreement will be assured. The proposer should identify the extent to which staff to be assigned to the audit reflect the City's commitment to Equal Opportunity. Engagement partners, managers, other supervisory staff and specialists maybe changed if those personnel leave the firm or are promoted or are assigned to another office. These personnel may also be changed for other reasons with the express prior written permission of the City of Salina. However, in either case, the City retains the right to approve or reject replacements. Consultants and firm specialists mentioned in response to this request for proposalscan 16 only be changed with the express prior written permission of the City, which retains the right to approve or reject replacements. Other audit personnel may be changed at the discretion of the proposer provided that replacements have substantiallythe same or better qualifications or experience. 6. Similar Engagements with Other Government Entities For the firm's office that will be assigned responsibility for the audit, list the most significant governmental engagements (maximum of 5) performed inthe last five years that are similar to the engagement described in this RFP. These engagements should be ranked on the basis of total staff hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact. The City reserves the right to contact the clients listed to perform reference checks. 7. Specific Audit Approach The response should set forth a work plan, including an explanation of the audit methodology to be followed, to perform the services required in Section 11 of this RFP. In developing the work plan, reference should be made to such sources of information as the City of Salina's budget and related materials, organizational charts, manuals and programs, and financial and other management information systems. Proposers will be required to provide the following information on their audit approach: a. Proposed segmentation of the engagement. b. Level of staff and number of hours to be assigned to each proposed segment of the engagement. C. Sample sizes and the extent to which statistical sampling is to be used in the engagement. d. Extent of use of software in the engagement. e. Type and extent of analytical procedures to be used in the engagement. f. Approach to be taken to gain and document an understanding of the City of Salina's internal control structure. 17 g. Approach to be taken in determining laws and regulations that will be subject to audit test work. h. Approach to be taken in drawing audit samples for purposes of tests of compliance. VII. EVALUATION PROCEDURES A. Audit Services Selection Committee Responses submitted will be evaluated by an Audit Services Selection Committee of the City of Salina. The committee will determine which firms, if necessary, will be asked to make an oral presentation. B. Evaluation Criteria Submissions will be evaluated using two sets of criteria. Firms meeting the mandatory criteria will have their submissions evaluated based on technical qualifications. The following represent the principal selection criteria which will be considered duringthe evaluation process. 1. Mandatory Elements a. The audit firm is independent and licensed to practice in Kansas. b. The audit firm's professional personnel have received adequate continuing professional education within the preceding two years. C. The firm has no conflict of interest with regard to any other work performed by the firm for the City of Salina. d. The firm submits a copy of its most recent external quality control review report and the firm has a record of quality audit work. e. The firm adheres to the instructions in this RFP on preparing and submitting the proposal. 0- 2. Technical Proposals: a. Expertise and Experience L Technical experience of the firm to include, but not limited to: a. Recent auditing of municipalities. b. Similar auditing, of the type under consideration, during the last three years. C. References. ii. Membership in the American Institute of Certified Public Accountants' Government Audit Quality Center. iii. Classification of staff (including consultant) to be assigned to the audit. Education, including continuing education courses taken during the past three years, position in the firm, and years and types of experiences will be considered. iv. Determination of the following based on information submitted: a. Qualifications of the audit team. b. Supervision to be exercised over the audit team by the firm's management. C. Technical review of audit reports prior to issuance. v. Size and structure of the firm to include, but not limited to: a. Capability to meet the services required. b. Additional skills and services. 19 b. Audit Approach i. Responsiveness of the submission clearly states an understanding of the work to be performed to include, but not limited to: a. Audit coverage. b. Realistic time estimates of each major segment of the work plan and the estimated number of hours for each staff level, including consultants assigned. 3. Interview The Audit Services Selection Committee may elect to interview Firms submitting responses as part of its screening process. C. Oral Presentations Based on the evaluation process, the Audit Services Selection Committee may, at its discretion, request firms to make oral presentations to the committee. All costs incurred in preparing for and attending the presentation shall be at the respondent's expense. D. Final Selection and Fees During the Audit Services Selection Task Force interviews, firms will be evaluated on the basis of qualifications of the office that will do the work. Following are some of the factors which will be considered: • Experience of the audit team. • Number of current city and other local government clients. • GFOA Certificate of Excellence experience. • Quality control procedures. • Single audit experience. • Compliance with 2011 Yellow Book Standards, (Government Auditing Services) for audits of federal grants. • Participation in governmental organizations such as KLM, EKGFOA and GFOA. • Proof of Professional liability insurance. • References. • Disclosure of any prior sanctions on any of the proposed audit team by any and all state regulatory body. Firms will be asked to submit a fee proposal (Appendix C) for performance of the Audit c Services, to include rates for each type of employee (IE. partner, manager, supervisory staff, staff, and other) and anticipated out-of-pocket expenses. This information should be submitted in a separate sealed envelope attached to the firm's copy of the qualifications section and identified as "Cost Data". It is anticipated that the firm selected to serve as the City's External Auditor will be retained on a yearly basis, with the City holding the option of retaining the same auditor for at least the succeeding two years. For this reason, Firms are asked to state a schedule of fees with a maximum fee specified for the annual audit years of 2022, 2023 and 2024 within the sealed envelope. Negotiations will be subject to the following conditions: a. Negotiations may be conducted in person, in writing, or by telephone. b. Terms, conditions, prices, methodology, or other features of the fee proposal may be subject to negotiation and subsequent revision. As part of the negotiation, the respondent may be required to submit supporting financial, pricing and other data in order to allow a detailed evaluation of the feasibility, reasonableness, and acceptability of the fee proposal. C. The mandatory requirements of the RFP shall not be negotiable and shall remain unchanged unless the City determines that a change in such requirements is in the best interest of the City. In the event the City is unable to negotiate terms it deems acceptable, the City may withdraw its recommendation and select another firm. It is anticipated that fee negotiations will be concluded and a contract for Audit Services will be executed between both parties for approval bythe Governing Bodyof the City by January 31, 2023. Copies of certain standard and required contractual provisions are provided in Section VIII. E. Special Conditions for Submitting a Response 1. Submission of a response indicates acceptance by the firm of the conditions contained in this RFP. 2. Any response, which is not received bythe Finance Department prior to the deadline date and time, will not be considered. 3. The City reserves the right to (1) accept or reject any and all proposals, and to waive any technicalities or irregularities involving any proposal, (2) negotiate contract terms with the successful Consultant, (3) disregard all nonconforming, non-responsive or conditional proposals and (4) reject anyor all proposals. 21 4. During the evaluation process, the City reserves the right to request additional information or clarifications from those submitting proposals, and to allow corrections of errors and/or omissions. 5. Submission of a proposal indicates acceptance by the firm submitting the proposal of the terms, conditions and specifications contained in this RFP, to include the contract requirements set forth herein. 6. The City will not pay for any information herein requested, nor is it liable for any costs incurred by those submitting proposals. The City reserves the right to select the Firm that will best meet the needs of the City. 7. By submission of a proposal the Firm certifies that the City may, by written notice to a Firm, cancel any award as a result of this RFP if it is found bythe City that gratuities, in the form of entertainment, gifts or otherwise were offered or given to any representative of the City with a view toward securing the award of a contract or other favorable treatment with respect to this RFP. 8. The contents of the proposal and any clarifications distributed bythe Cityshall become part of the contractual obligation and incorporated by reference into the ensuing contracts. 9. All proposals become the property of the City and will not be returned to the submitting Firm. VIII. CONTRACT REQUIREMENTS A. General Information The award of any contract for professional auditing services pursuant to this RFP process is contingent upon the firm receiving the award and successfully negotiating a contract for those auditing services with the City. The successful Firm will be required to enter into a contract with the City that will include the terms and provisions set forth by the City. By submitting a response, the Firm acknowledges it has read these provisions and will agree to the contract requirements set forth. The City reserves the right to modify the contract language as it deems necessary to meet the best interests of the City. In the event the selected firm will not execute an agreement that satisfies the contract terms required or the City is unable to negotiate a contract it deems acceptable with the selected firm, the City may withdraw its award for auditing services with the selected firm, and award its auditing services to another firm. 22 APPENDIX A RESPONDENT CERTIFIES The proposer certifies it can and will provide and make available, at a minimum, all services set forth in Section II, Nature of Services Required. Signature of Official: Name (printed): Title: Firm: Date: 23 APPENDIX B RESPONDENT CERTIFIES A. Proposer certifies that it is willing and able to comply with State of Kansas laws with respect to foreign (non -state of Kansas) corporations. B. Proposer certifies that it is willing and able to obtain an errors and omissions insurance policy providing a prudent amount of coverage for the willful or negligent acts, or omissions of any officers, employees or agents thereof. G Proposer certifies that it will not delegate or subcontract its responsibilities under an agreement without the express prior permission of the City of Salina. D. Proposer certifies that all information provided by it in connection with this submission is true and accurate. E. Proposer certifies that it understands it is required to adhere to the Contract requirements set forth in this RFP and all of the requirements of the RFP will be an attachment to the contract. Signature of Official: Name (printed): Title: Firm: Date: M APPENDIX C SCHEDULE OF HOURS AND EXPENSES STAFF ASSIGNED Partners Managers Supervisory staff Staff Other (specify) Subtotal Professional Fees Out-of-pocket expenses: Hours Rate Total Total all-inclusive maximum price for 2022 audit (including STAR Bond audit) Maximum percentage increases for future contract years (all costs) 2023 2024 Hourly Fees for consultation (by staff level): $ Note: The rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the total all-inclusive maximum price. 25 A PROPOSAL FOR / City of Salina REQUEST FOR PROPOSAL - PROFESSIONAL AUDIT SERVICES Submitted by FORVIS, LLP Michael C. Gerber, CPA, 1551 North Waterfront Parkway, Suite 300 Phone: 316.265.2811 Wichita, KS 67206 December 30, 2022 Technical Proposal Partner Transmittal Letter iii Executive Summary 1 The FORVIS Value 1 Proposed Services for the City 1 The FORMS Difference 2 RFP Response 4 Independence 4 License to Practice in Kansas 5 Firm Qualifications & Experience 5 Partner, Supervisory & Staff Qualifications & Experience 7 Similar Engagements with Other Government Entities 13 Specific Audit Approach 15 Appendix 24 Thinking of Your Future 25 AICPA Peer Review Letter 26 BKD Peer Review Report 27 Proof of Professional Liability Insurance 28 Proof of Liability Insurance 29 Exceptions to Terms & Conditions 30 Appendix A 31 Appendix B 32 About FORMS 33 Our acceptance of this engagement is subject to completion of our normal client acceptance procedures. Upon acceptance, the actual tenns of our engagement will be documented in a separate letter to be signed by you and us. The information provided in this proposal is intended for informational purposes only and may not be copied, used, or modified, in whole or in part. without FORVIS' prior written approval. All information in this proposal is as of November 1, 2022, Including projected statistics for FORVIS, unless otherwise noted. FORVIS is a trademark ct FORVIS. LLP, ragistrat.on of which is pending will the U.S Patent and Trademark Office FORWS 1551 North Waterfront Parkway, Suite 300 / Wichita, KS 67206 P 316.265.2811 / F 316.265.9405 forvis.com Transmittal Letter December 30, 2022 Ms. Debbie Pack Finance Director City of Salina 300 West Ash Street, Room 206 Salina, KS 67402 Dear Ms. Pack: The City of Salina (the City) is no stranger to the complex challenges that come with serving the public. Aging infrastructure, constant regulatory updates, and budgetary constraints are just a few of the issues the City has to address as you work to satisfy demand for your services and citizen needs. It's important to have a reputable professional services firm with the nationwide reach and resources to provide the guidance and tools you require. FORVIS is here to help. As a national firm we offer significant public sector experience and resources, including trusted area professionals with industry knowledge and a commitment to client service. We understand the City's request for a Financial Statement Audit in Accordance with Government Auditing Standards and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance) for the years ending December 31, 2022, 2023, and 2024. We are committed to performing this work within the City's requested time period. FORVIS, a new firm combining two established track records of focused accounting and advisory experience, can provide the City with the industry -specific insight and knowledge you deserve. At FORVIS, we have a client -centered service approach and commitment to industry specialization. Our professionals choose the industry they work in and have a passion for it. Your proposed engagement team has experience serving public sector entities, many of which are comparable in size to the City, so you can be confident we understand the complexities of your environment, stay apprised of industry trends to better serve the City, and are qualified to perform this engagement. I appreciated the opportunity to meet with you recently, and based on that conversation I believe our proposal, which is a firm and irrevocable offer for 2022, will help you select our firm for efficient and objective services delivered by experienced professionals. I will call you soon to answer questions you may have about this proposal, or you may reach me at 316.265.2811 or michael.gerber@forvis.com. Respectfully Presented, Michael C. Gerber, CPA Partner FORVIS is a trademark of FORVIS, LLP, regislralion of which is pending with the U.S. Patent and Trademark Office �) PRAXITY" Cly. mpoweinrlu,nes�0loeally The City of Salina (the City) strives to meet the needs of those in your community amid various challenges. Keeping up with regulatory change, properly implementing GASB pronouncements, identifying ways to better serve the public, and demonstrating transparency and accountability are all important. With so many different items needing attention, having knowledgeable advisors by your side to provide guidance and high-quality service can help provide the City the confidence you need to tackle those issues. FORVIS works with hundreds of public sector entities across the country which means our advisors have the experience needed to assist the City as you navigate your operating environment, demonstrate sound fiscal stewardship, and plan for what's ahead. The FORVIS Value The City's choice of an advisor is important. Beyond completing your requested services on time, our goal is to provide you with the technical knowledge and industry intelligence you expect from an experienced team that is focused on your needs both today and tomorrow. While FORVIS is a new name in the marketplace, we bring an established history of performance helping similar clients see improvements to operations, processes, and financial outcomes. With a fresh perspective from FORMS, the City can be confident you are connected to the tools and services you need to thrive and receiving significant value through year-round thought leadership, best practice recommendations, and proactive ideas. In addition, as evidenced by our recognition in the INSIDE Public Accounting 2022 IPA Best of the Best INSIDE list, FORVIS offers value through a strong, reputable network of support and resources. Our national PUUII(WODUM coverage benefits our clients, our people, and the market of the future as we focus on our commitment to BEST OFTHE BEST deliver Unmatched Client Experiences. FIRMS Proposed Services for the City The City has requested information and a fee quote for a Financial Statement Audit in Accordance with Government Auditing Standards and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance). Please see the Audit Approach section for a detailed explanation of our audit service approach. FORVIS Public Sector / 1 FORVIS is a trademark of FORVIS, LLP, registration of which is pending vrith the U.S. Patent and Trademark Office Thinking of Your Future In addition to the City's requested service, FORVIS has an extensive range of service offerings that may be of interest to you now or in the future. If the need arises the following services could benefit the City. ■ Cybersecurity Risk Assessment ■ Assistance preparing the Annual Comprehensive Financial Report (ACFR) If you would like additional information, please contact Michael Gerber at your convenience. The FORVIS Difference Being a top 10 public accounting firm matters, but what sets us apart is our commitment to client service and a forward -thinking mindset focused on innovation. We prioritize investing in new technologies to help clients navigate public sector developments, and we foster a dynamic culture of leadership and professional development. This means the City can work with a public -sector - focused team driven by our forward vision to help you succeed today while helping you prepare for the future. Here's what sets us apart: ■ Accessible professionals offering significant public sector accounting knowledge as well as a client -focused approach. ■ Advisors with extensive Single Audit experience. ■ With a forward vision that drives our Unmatched Client Experiences, FORVIS is driven by a commitment to anticipate what's ahead so that our clients are ready to thrive when it arrives. ■ FORVIS proudly encourages and promotes diversity and an inclusive workplace. With innovative strategies for recruiting, as well as an ongoing focus on the development and implementation of internal inclusion programs, we are committed to identifying opportunities that help each individual to thrive. ■ With the urgency of changing environmental, social, and governance (ESG) requirements and the expectation your organization is prepared for what comes next, our experienced advisors are ready to offer the insights and education you may need to enhance and inform your ESG strategy. Start with our ESG and climate risk FORsightsTm at forvis.com/forsiahts. Commitment to Serving the Public Sector As part of our commitment to remaining at the forefront of the public sector, leaders across our national governmental practice meet regularly to discuss important developments, legislative updates, and challenges affecting governmental entities similar to the City. In addition, our public sector involvement has enabled us to establish connections with numerous regulatory and auditing organizations, including: ■ AICPA Governmental Audit Quality Center, as a memberIt �� ■ Government Finance Officers Association (GFOA) ■ Governmental Accounting Standards Board (GASB) Governmental Audit Quality Center ■ Office of Management and Budget (OMB) ■ U.S. Government Accountability Office We look forward to communicating best practices and forward-looking strategies to help the City thoughtfully consider the areas important to fulfilling your fiduciary responsibilities. FORVIS Public Sector / 2 FORVIS is a trademark of FORMS, LLP, registration of which is pending with the U.S. Patent and Trademark Office FORVIS' Public Sector Practice Hundreds of public sector entities depend on FORVIS as their professional services firm for practical guidance. With dedicated advisors in FORVIS' Public Sector Practice, we have the experience and level of commitment you require as you look for help in identifying ways to deliver services and meet fiduciary and regulatory requirements effectively. Industry Involvement To reinforce our commitment to the governmental sector, our advisors routinely attend conferences focused on industry issues and trends. They also receive continuing professional education (CPE) to stay informed of industry regulatory updates and other general accounting issues, averaging approximately 60 hours of formal training annually. This dedication also extends to involvement on national industry committees, such as GASB and AICPA. Partner Lindsey Oakley, who currently serves in FORVIS' National Office accounting and auditing department, has been appointed to the Executive Committee of the AICPA Governmental Audit Quality Center. Partner Chris Telli, proposed concurring reviewer, serves in our Colorado Springs office and has been appointed as an advisor to the Government Finance Officers Association's Committee on Accounting, Auditing, and Financial Reporting. This committee works closely with GASB, the AICPA and other organizations and recommends best practices for effective governmental finance operations. Amy Shreck, a partner in our Omaha office, completed a two-year term as a practice fellow at GASB's headquarters, where she helped to formulate standards and assisted with technical inquiries. FORMS now draws on Amy's firsthand experience at GASB to help clients better understand GASB standards and the thought process behind those standards. FORVIS' advisors also actively serve as participants, exhibitors, speakers and sponsors in regional and national associations for governmental organizations, including: ■ Airports Council International — North America (ACI -NA) ■ American Association of Airport Executives (AAAE) ■ American Public Power Association (APPA) ■ Association of Airport Internal Auditors (AAIA) ■ Association of Government Accountants (AGA) ■ Government Finance Officers Association (GFOA) ■ National Council of State Housing Agencies (NCSHA) ■ National League of Cities (NLC) ■ Rural Utilities Service (RUS) Significant Single Audit Experience FORVIS is one of the largest providers of Single Audits among professional service firms nationwide. With many of our nonprofit and public sector clients receiving federal funding, we are familiar with the requirements for allowability of both direct and indirect costs, as well as the ability for the recipient to charge an administrative cost allowance under many federal programs. To help streamline the Single Audit process, we use audit programs and checklists designed specifically for the federal programs we audit. Our firm maintains a database of audit programs tailored to the grants and other federal programs commonly found in governmental entities. Our extensive experience providing compliance testing in accordance with OMB requirements can help us properly perform and submit the City's Single Audit on time. FORVIS Public Sector / 3 FORVIS is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office RFP Response For the City's convenience, we have structured our proposal according to the requirements in your RFP. We believe our proposal will demonstrate our qualifications to serve the City. INFORMATION CONTAINED IN FORVIS' RFP RESPONSE, WHICH IT ASSERTS AS CONFIDENTIAL, IS EITHER BUSINESS AND/OR PROPRIETARY TRADE SECRET INFORMATION NOT SUBJECT TO DISCLOSURE AS SET FORTH IN THE STATE OF KANSAS OPEN RECORDS ACT. SUCH CONFIDENTIAL INFORMATION HAS INDEPENDENT ECONOMIC VALUE TO FORVIS, IS NOT REASONABLY ASCERTAINABLE BY THIRD PARTIES AND IS THE SUBJECT OF REASONABLE EFFORTS BY FORVIS TO MAINTAIN ITS SECRECY AND/OR CONFIDENTIALITY. SUCH INFORMATION IN THIS PROPOSAL SHALL BE DESIGNATED WITH THE WORD "PROPRIETARY". Independence The firm should provide an affirmative statement that it is independent of the City of Salina as defined by generally accepted auditing standards/the U.S. General Accounting Office's Government Auditing Standards (2011)]. The firm also should provide an affirmative statement that it is independent of all of the component units of the City of Salina as defined by those same standards. The firm should also list and describe the firm's professional relationships involving the City of Salina or any of its agencies, component units or primary government for the past five (5) years, together with a statement explaining why such relationships do not constitute a conflict of interest relative to performing the proposed audit. In addition, the firm shall give the City written notice of any professional relationships entered into during the period of this agreement. To the best of our knowledge, FORVIS is independent with respect to the City and its component units as defined by: ■ The Code of Professional Conduct of the AICPA ■ U.S. Government Accountability Office's Government Auditing Standards We are not aware of any relationship that would impair our independence. Except as noted below, FORVIS has not had any professional relationship with the City or related entities within the last five (5) years. Between 2020 and 2021 BKD, LLP, predecessor to FORVIS, provided forensic accounting services to the Salina Fire Department. All employees of FORVIS are required to disclose any real or apparent conflicts of interest that they discover or are brought to their attention. A reporting mechanism has been adopted to ensure the independence and objectivity standards are met. When a FORVIS employee believes that they, or a member of their immediate family, might have a real or apparent conflict of interest, the individual will file a notice of disclosure and consult with our chief risk officer to develop an appropriate resolution of the conflict. FORVIS ensures that all employees are made aware of the firm's policy with respect to conflicts of interest. No relationship exists that would constitute a conflict of interest relative to performing the proposed audit. In addition, the firm agrees to give written notice of any other professional relationships involving the City are entered into during the period of this engagement. FORVIS Public Sector / 4 FORVIS is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office License to Practice in Kansas An affirmative statement should be included indicating that the firm and all assigned key professional staff are properly licensed to practice in Kansas. FORVIS is properly licensed to practice public accounting in the state of Kansas. All key professionals who would be assigned to your engagement are properly registered/licensed to practice in the state of Kansas. Firm Qualifications & Experience The response should state the size of the firm, the size of the firm's governmental audit staff, the location of the office from which the work on this engagement is to be performed and the number and nature of the professional staff to be employed in this engagement on a full-time basis and the number and nature of the staff to be so employed on a part-time basis. Firm Size FORVIS is a top 10 public accounting firm in the United States. We serve 72 markets across 28 states, the UK, and Cayman Islands. Our CPAs, advisors, and dedicated staff serve clients in all 50 states, including clients with international operations. Governmental Audit Staff Size FORVIS has hundreds of professionals who spend more than 50% of their billable hours providing services to clients in the nonprofit, governmental, and higher education industries, including audit services to governmental entities. Location The City's requested services will be provided primarily by our Wichita office. FORVIS 1551 North Waterfront Parkway I Suite 300 Wichita, KS 67206 FORVIS Public Sector / 5 FORVIS is a trademark of FORMS, LLP, registration of which is pending vrith the U.S. Patent and Trademark Office Number & Nature of Staff We anticipate providing one partner, and one manager, on a full-time basis as well as one partner (concurring reviewer) on a part-time basis to complete the City's audit. If the proposer is a joint venture or consortium, the qualifications of each firm comprising the joint venture or consortium should be separately identified and the firm that is to serve as the principal auditor should be noted, if applicable. FORVIS is not a joint venture or consortium. The firm is also required to submit a copy of the report on its most recent external quality control review, with a statement whether that quality control review included a review of specific government engagements. FORVIS is committed to providing quality audit services to our clients, and we submit our work to external reviewers who challenge our approach and findings. The AICPAs' peer review program assists us in confirming our process works and identifying potential areas for improvement that could enhance our audit quality. Our legacy firms, BKD, LLP and Dixon Hughes Goodman LLP, regularly participated in these reviews once every three years as required by the AICPA. As the predecessor entity for peer review purposes, a copy of BKD's most recent AICPA peer review report, with the rating of "Pass"—the best rating available under current peer review standards—is contained in the Appendix. This peer review included inspection of BKD's engagements performed under Government Auditing Standards. The firm shall also provide information on the results of any federal or state desk reviews or field reviews of its audits during the past three (3) years. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with state regulatory bodies or professional organizations. From time to time, selected audit engagements are subject to desk review by federal or other regulators. All such reviews during the past three years have shown our work to be generally satisfactory, and no disciplinary or other administrative proceedings have resulted from those reviews. There have been no disciplinary actions taken against FORVIS by the AICPA or any regulatory or licensing agency in the past three years. Please note that FORVIS, LLP was formed on June 1, 2022, through a merger between BKD LLP ("BKD") and Dixon Hughes Goodman LLP ("DHG"). The foregoing responses also apply to BKD and DHG. More information about the merger can be found here, https: //www.forvis.com/news-releases/forvis-begins-serving-clients-newest-top-10-professional-services-firm. FORVIS Public Sector / 6 FORVIS is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office Partner, Supervisory & Staff Qualifications & Experience The firm should identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement and indicate whether each such person is licensed to practice as a certified public accountant in Kansas. The firm also should provide information on the government auditing experience of each person, including information on relevant continuing professional education for the past three (3) years and membership in professional organizations relevant to the performance of this audit. The firm should provide as much information as possible regarding the number, qualifications, experience and training, including relevant continuing professional education, of the specific staff to be assigned to this engagement. Specifically, the response should state each staff member's training and experience in the following areas: a. Governmental Accounting Standards Board Statements 74 and 75 b. Statements on Auditing Standards Statements 104-115 c. Single Audits of municipalities d. General obligation bonds e. Investments in U.S. agencies, Treasury Notes, Treasury Bills, and Kansas Municipal Investment Pool f. STAR Bonds g. Neighborhood Revitalization Plans h. Community Improvement Districts i. Tax Increment Financing Districts j. Pension plans k. Qualified Activity Low -Income Community Business We take team selection seriously and have the appropriate team of advisors to meet your needs. Previous experience is a primary determinant for assigning professionals to your engagement, and we have assigned individuals who are experienced in working with similar public sector entities your engagement. As mentioned, all key professionals who would be assigned to your engagement are properly registered/licensed to practice in the state of Kansas. FORMS Public Sector / 7 FORVIS is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office Michael C. Gerber, CPA 316.265.2811 \ Partner & Lead Engagement Partner michael.gerber@forvis.com Engagement Responsibilities As lead engagement partner, Michael will be responsible for coordinating and overseeing the engagement. Primary Experience Michael is a member of FORVIS' Nonprofit Practice. He has more than 17 years of experience providing audit, accounting, and financial consulting services to colleges, foundations, social service agencies, member organizations, and other nonprofit organizations. He serves as an engagement partner, performs quality control reviews, assists organizations with policy and procedures, performs and oversees audits, assists clients with analysis and strategic direction, and routinely meets with management and boards to discuss technical accounting issues. He is a member of the American Institute of CPAs and KSCPA. He was a member of the 2012 KSCPA "20 up to 40" Leadership Program and the 2017 Emerging Leaders Academy. Michael has presented at various events including the Kansas Independent College Association Business Affairs and Operations Conference, the KSCPA Governmental Nonprofit Accounting & Auditing Conference, and the United Way Finance, Talent & Technology Forum. Michael is involved in the community. He sits on the audit committee for the Girl Scouts of Kansas Heartland and the board of directors for HumanKind Ministries. He also serves in an advisory role to other organizations. He is a graduate of Kansas State University, Manhattan, with an M.Acc. degree. Additional Training & Experience FORVIS requires 120 hours of Continuing Professional Education every three years for professional staff. These trainings cover a variety of topics including items a -k noted above. Christopher J. Telli, CPA, CIA® 719.685.7180 Partner & Concurring Reviewer chris.telli@forvis.com Engagement Responsibilities As concurring reviewer, Chris will be responsible for overseeing Single Audit procedures, approving major program determination, and reviewing the Single Audit report and findings. Experience. Chris is a regional industry leader for the Public Sector Practice and is a member of the firm's Nonprofit, Higher Education, & Public Sector Committee. He has more than 20 years of experience in accounting and auditing, including three years as an internal auditor for a large nonprofit organization. Chris assists governmental entities with audit, compliance, and general business consulting, and works with counties, municipalities, state agencies, airports, school districts, higher education institutions, and public authorities. He routinely writes and speaks on a variety of governmental audit and compliance issues and recently presented the audit update for the 2020 GAAP update for the Government Finance Officers Association of the United States and Canada (GFOA). He has served as an instructor for the firm's internal seminars and trainings and served on the Public Sector Center of Excellence, an internal committee of governmental leaders from across the firm who deliberate a FORVIS Public Sector / 8 FORVIS is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office variety of issues important to governments. Chris routinely serves on both peer review and internal inspection teams. Chris is a member of the American Institute of CPAs, Colorado Society of CPAs (COCPA), GFOA, Association of Government Accountants, The Institute of Internal Auditors, and Association of Certified Fraud Examiners, Inc. He is a former board member of the COCPA, including serving a two-year term as treasurer. Chris also recently completed his second three- year term as an advisor to the GFOA Accounting, Auditing, and Financial Reporting Committee, and currently serves on the GFOA GAAFR Technical Advisory Board, providing advice and technical suggestions on supplements to Governmental Accounting, Auditing, and Financial Reporting (the "Blue Book"). He is active in the community and served for nine years as a board member of the American Red Cross of Southeastern Colorado, including two years as board chair. Chris is a summa cum laude graduate of Regis University, Denver, Colorado, with a B.S. degree in accounting, and a graduate of University of Colorado, Colorado Springs, with an M.B.A. degree in finance. He also holds the Certified Internal Auditor°(CIAO) designation. Additional Training & Experience FORVIS requires 120 hours of Continuing Professional Education every three years for professional staff. These trainings cover a variety of topics including items a -k noted above. Julian Rios, CPA 1316.265.2811 Senior Manager & Audit In -Charge 11 julian.rios@forvis.com Engagement Responsibilities As audit in -charge, Julian will be responsible for managing fieldwork, overseeing engagement staff, and reviewing planning documents, audit programs, workpapers, and reports. Experience Julian Rios is a member of the Wichita team providing assurance services to FORVIS' clients. He has nine years of internal and external audit experience serving clients in different industries such as healthcare, governmental, manufacturing, and financial services. He is a member of the American Institute of CPAs and is a CPA licensed in the State of Kansas and the State of Texas. Julian is a graduate of Emporia State University, Kansas, with a B.S.B. degree in business administration and an M.B.A. degree with an accounting concentration. Additional Training & Experience FORVIS requires 120 hours of Continuing Professional Education every three years for professional staff. These trainings cover a variety of topics including items a -k noted above. FORMS Public Sector / 9 FORVIS is a trademark of FORVIS, LLP, registration of hich is pending with the U.S. Patent and Trademark Office Additional Resources Shauna Woody-Coussens, CFE Managing Director Shauna is the national leader of the Public Sector Advisory practice unit which provides financial, accounting, operational, risk management, forensic, and IT/cybersecurity consulting and advisory services to federal, state, local, and tribal government agencies and entities. She has more than 35 years of experience in forensic consulting and litigation support and was formerly a managing director and the regional leader in the Forensics & Valuation practice unit. Her forensic investigative experience includes fraud investigations for internally identified public sector entities, company matters in response to inquiries by third parties and regulatory bodies, and litigation in various industries. Her services include funds tracing as well as forensics accounting, financial analysis, and forensic interviewing. Shauna has experience with Foreign Corrupt Practices Act (FCPA)/Anti-Bribery & Corruption investigations. Representative engagements involve assisting U.S. companies in conducting due diligence on foreign vendors and participating in multiyear internal investigations of FCPA violations. Shauna has testified before the SEC and U.S. Department of Justice. Her dispute analysis experience includes litigation consulting, trial, deposition and arbitration expert testimony, and pre -litigation financial analysis. She has experience with issues in various litigation types, including proper computation of damages, lost profit calculations, financial compliance with contracts, director and officer liability claims, franchise and exclusive distributor agreement claims, piercing the corporate veil, and class action matters. She has consulted and testified in multiparty actions requiring data coordination and the construction of complex databases and financial models. Shauna is a Certified Forensic Examiner (CFE) and member of the Association of Certified Fraud Examiners, Association of Government Accountants, Government Finance Officers Association, and National Grants Management Association. She is a graduate of University of Missouri, Columbia, with a B.S.B.A. degree in finance and banking, and a summa cum laude graduate of the University of Kansas, Lawrence, with an M.B.A. degree. Johnny L. Sanders, PCI-QSA, CISM®, CISAO, CompTIA Security+ Senior Managing Consultant Johnny has more than 25 years of information technology (IT) experience. Most of his experience was acquired during active duty in the U.S. Air Force, where he was a system administrator over multiple platforms as well as an information security officer. He focuses on cybersecurity, payment card industry audits, IT audits, system security, policy, procedure, business continuity, and disaster recovery reviews and electronic banking review testing for financial institutions and institutions of higher learning. Before joining the firm, Johnny was senior engineer for a large IT company that managed a sizable international project for the U.S. Department of Defense. In addition to leading network and datacenter administration teams, he was responsible for system audits, security, and network accreditation. He also served as the chief operating officer for a regional broadband development company where he directly managed all installation and IT personnel, as well as overseeing network security and product development. Johnny also taught basic and advanced FORVIS Public Sector / 10 FORVIS is a trademark of FORMS, LLP, registration of Mich is pending with the U.S. Patent and Trademark Office network design, network security, and routing administration for Cisco Networking Academy at Arkansas State University. He holds Payment Card Industry Qualified Security Assessor (PCI-QSA), Certified Information Security Manager° (CISM°), Certified Information Systems Auditor° (CISA°), and CompTIA Security+ certifications. Johnny is a graduate of Mid-America Christian University, Oklahoma City, Oklahoma, with a B.S. degree in business management. Continuing Professional Education As previously mentioned, our audit professionals are required to receive at least 120 hours of CPE every three years. FORVIS professionals receive training from an annual internal industry seminar, internal webinars, and other external sources. For auditors involved with audits performed under Government Auditing Standards, this education includes the hours required to comply with Government Auditing Standards Yellow Book guidance. All individuals, including specialists involved in performing fieldwork on Government Auditing Standards audits, are required to obtain at least 24 hours of CPE every two years in subjects directly related to governmental auditing or the governmental environment. In addition, engagement team members responsible for planning, directing, or reporting on Government Auditing Standards audits who spend more than 20% of their time performing Government Auditing Standards audits also are required to complete a minimum of 80 hours of CPE every two years that directly enhances their professional proficiency to perform audits. Recognized Learning & Development Keeping up with the latest industry developments and a rapidly changing regulatory environment requires significant time and resource investments. At FORVIS, we make those investments so you can depend on our professionals for technical knowledge and strategic guidance. In fact, FORVIS has been repeatedly recognized for the outstanding learning and development programs we've designed for our professionals. Training magazine ranked FORVIS as a winner in the 2023 Training APEX Awards (formerly the NO Training Top 100), marking our tenth consecutive year for earning this premier distinction among other 2023 WINNER elite organizations from across the world. In addition, FORVIS has been a recipient of the LearningElite award from Chief Learning Officer magazine for the past seven years, earning Gold or Silver recognition since 2018. The firm also should indicate how the quality of staff over the term of the agreement will be assured. While turnover in CPA firms is natural, the City should expect your engagement team to remain relatively constant throughout the years. Continuity of staff assigned to engagements is one of FORVIS' primary goals. We continually work to attract, develop, and retain bright professionals. We achieve this through formal staff counseling, timely job performance evaluation, direct supervision, client feedback, service philosophy, and commitment to industry specialization. Though it is impossible for any firm to know the future career path of its professionals, we aim to keep a consistent client service team working for you where possible. Doing so helps reduce the learning curve and saves you the time, frustration, and disruption of dealing with new advisors unfamiliar with your organization. We will assign individuals who are experienced in working with public sector clients to your engagement. FORVIS Public Sector / 11 FORVIS is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office The proposer should identify the extent to which staff to be assigned to the audit reflect the City's commitment to Equal Opportunity. FORVIS has an affirmative action plan in place and understands our obligation to comply with all applicable federal, state, and local laws and regulations governing nondiscrimination in the workplace and providing equal employment opportunity. FORVIS prohibits discrimination in employment on the basis of an individual's age, race, color, sex, sexual orientation, gender identity, national origin, religion, genetic information, disability, protected veteran status, and other protected classifications. In addition, our diversity and inclusion policies are designed to ensure equal employment opportunities including, but not limited to, recruiting, hiring, training, promotions, pay practices, benefits, disciplinary actions, and terminations. Engagement partners, managers, other supervisory staff and specialists may be changed if those personnel leave the firm or are promoted or are assigned to another office. These personnel may also be changed for other reasons with the express prior written permission of the City of Salina. However, in either case, the City retains the right to approve or reject replacements. Consultants and firm specialists mentioned in response to this request for proposals can only be changed with the express prior written permission of the City, which retains the right to approve or reject replacements. Other audit personnel may be changed at the discretion of the proposer provided that replacements have substantially the same or better qualifications or experience. In the event we are required to make a change to any key personnel assigned to your engagement, we will discuss this with you to explain the circumstances and proposed change. Your lead engagement partner Michael Gerber will be coordinating personnel changes. We generally do not remove key personnel from an audit once it has begun, but occasionally employee turnover or other events beyond our control require such a change. If a personnel change is required, we are confident we can provide a qualified replacement to complete your audit with limited interruption. We understand engagement team members, consultants and firm specialists mentioned in our response to this RFP can only be changed with the prior express written permission of the City, which retains the right to approve or reject replacements. FORVIS Public Sector / 12 FORMS is a trademark of FORMS, LLP, registration of which is pending with the U.S. Patent and Trademark Office Similar Engagements with Other Government Entities For the firm's office that will be assigned responsibility for the audit, list the most significant governmental engagements (maximum of 5) performed in the last five years that are similar to the engagement described in this RFP. These engagements should be ranked on the basis of total staff hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact. The City reserves the right to contact the clients listed to perform reference checks. References Proprietary We have a track record of helping similar public sector entities and understand our clients are our best ambassadors. Listening to us helps, but hearing directly from your peers can be a meaningful step in your decision-making process. We encourage you to reach out to the following clients to discuss FORVIS' services and capabilities at your convenience. Sedgwick County Total Staff Hours: 1,300 Scope of Work: Audit Date: December 31, 2021 Partner(s): Michael Gerber Ms. Lindsay Poe Rousseau Chief Financial Officer 316.660.7141 City of Park City Total Staff Hours: 150 Scope of Work: Audit Date: December 31, 2021 Partner(s): Michael Gerber Ms. Dee Ann Grunder Finance Director 316.744.2026 City of Haysville Total Staff Hours: 175 Scope of Work: Audit Date: December 31, 2021 Partner(s): Michael Gerber Mr. Will Black Chief Administrative Officer 316.529.5900 FORVIS Public Sector / 13 FORVIS is a trademark of FORMS, LLP, registration of vi iich is pending with the U.S. Patent and Trademark Office Representative Clients Proprietary FORVIS is proud to provide audits for municipalities, including: ■ City & County of Denver, CO^ ■ City of Lubbock, TX^ ■ City of Arvada, CO^ ■ City of McKinney, TX^ ■ City of Aurora, CO^ ■ City of Mesquite, TX^ ■ City of Balch Springs, TX ■ City of Nebraska City, NE ■ City of Bellevue, NE ■ City of Norman, OK ■ City of Bentonville, AR" ■ City of Phoenix, AZA • City of Brookings, SD" ■ City of Ralston, NE ■ City of Colorado Springs, CO ■ City of Roanoke, TX^ ■ City of Conway, AR ■ City of Springdale, AR ■ City of Fort Smith, AR ■ City of Texarkana, AR ■ City of Greenville, TX" ■ City of Westminster, CO^ ■ City of Kerrville, TX^ ■ Consolidated City of Indianapolis — Marion County, IN ■ City of Lancaster, TX ■ Jackson County, MO" ■ City of Lawton, OK ■ Sedgwick County, KS ■ City of Liberty, MOA ■ Town of Addison, TX ■ City of Lincoln, NE ■ Town of Highland Park, TX^ ■ City of Little Rock, AR ^Denotes client who earned recognition under the GFOA's Certificate of Achievement for Excellence in Financial Reporting Program (COA Program). FORVIS Public Sector / 14 FORVIS is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office Specific Audit Approach The response should set forth a work plan, including an explanation of the audit methodology to be followed, to perform the services required in Section II of this RFP. In developing the work plan, reference should be made to such sources of information as the City of Salina's budget and related materials, organizational charts, manuals and programs, and financial and other management information systems. Financial Statement Audit in Accordance with Government Auditing Standards & the Uniform Guidance Auditing standards set the technical requirements for our process, culminating with the expression of our opinion on the presentation of your financial statements. Our audit will be performed in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The FORVIS Audit Experience While auditor selection should start with evaluating technical competence, it also should extend to your expectations for a service experience. Your audit experience includes how your engagement is managed, how you and your team are treated, the quality and timeliness of communication you receive, and your confidence in the results and guidance you receive. FORVIS' philosophy emphasizes independence, integrity, and quality, and we have a strong commitment to providing high quality service, through a knowledgeable engagement team. Onboarding & Project Management Your FORVIS audit experience starts as soon as you select us. Our priorities include building rapport with your team, developing a deeper understanding of your operations, and coordinating with you on the design and expectations of our service relationship. These efforts are part of our smooth transition approach. The proposal process has provided us with the basics of your organization but learning more will help us serve you better. If not already completed, we will finish the details of client acceptance to confirm what we have learned and verify confidential information not already obtained, such as litigation history or other sensitive matters. Proposed Timeline AUDIT ACTIVITY Transition & Onboarding Audit Planning Test of Internal Controls Final Fieldwork Draft Report Provided to Management Final Report Issued Presentation to Commissioners FORMS Public Sector / 15 FORVIS is a trademark of FORMS, LLP, registration of which is pending with the U.S. Patent and Trademark Office Executing the Audit Once we have established our overall process and communication plans with you, the detailed work can begin. Key elements of that work include: Risk Assessment We will identify and assess risks of material misstatement in your financial statements, including those from potential fraud. Our work is supported by building a strong understanding of your business environment through documents you provide and by gathering information through interviews and tests for significant transaction cycles. Assessing IT Risks For clients with complex systems, our risk assessment also includes a more focused evaluation of your IT systems. Governmental entities with greater IT risk often manage high-volume, automated transactions or otherwise rely heavily on how systems create and manage data that affects financial statement amounts and disclosures. In your environment, obtaining a strong understanding of your systems is important, and our feedback may help you evaluate your own risks. In addition to using our traditional auditors, we will engage professionals from our Risk Advisory practice to assist in that evaluation. These individuals can offer focused experience with specific systems or with overall IT matters such as logical security, change management, computer operations, and other areas where risk and fraud relevant to financial reporting can occur. Audit Design Based on risks identified, we will design an audit approach specific to your organization. This tailoring takes into consideration the uniqueness of your operations, the design of internal controls you have implemented, and the nature of financial statement amounts and disclosures. We consider whether matters are truly important (materiality), as well as obtain input about concerns from the Mayor and City Commissioners to design the tests we will perform. Gathering Evidence Once the plan is complete, we will execute the audit through a combination of on- and off-site work performed in accordance with the agreed-upon timeline. Reviewing the Work Critical to our process is a review of the team's work by our engagement executive, as well as a quality review by another executive who is independent from the detailed work. The quality review is designed to improve our deliverable by providing a fresh perspective and reinforcing quality. Sharing Our Results We base our audit opinion on the evidence gathered and then communicate our findings. Professional standards drive the content of our opinion and the required communication about any deficiencies and other items we may identify during the audit. Beyond these requirements, we share results formally through our letters and presentations to the Mayor and City Commissioners, as well as opportunities for improvement through conversations during the audit process. FORVIS FORVIS is a trademark of FORVIS, LLP, registration of Mich is pending with the U.S. Patent and Trademark Office Public Sector / 16 Compliance Audit in Accordance with the Uniform Guidance FORVIS performs hundreds of Single Audits annually, focusing on two objectives: first, an audit of your financial statements and reporting on the Schedule of Expenditures of Federal Awards (SEFA) in accordance with Government Auditing Standards, and second, a compliance audit for federal awards expended during the fiscal year in accordance with the Uniform Guidance. Many of our nonprofit and governmental clients receive federal funding. Our extensive experience with compliance testing in accordance with OMB requirements can help provide the City with a Single Audit performed properly and submitted on time. Our Approach During our audit procedures of federal award programs, we do not simply look for findings to report. We look for opportunities to advise you of more efficient ways to comply with federal regulations to reduce the risks of sanctions or reduced funding. FORVIS has developed contacts at federal agencies and has been able to work cooperatively with these agencies to help clients resolve or avoid issues. Entities subject to the Uniform Guidance and Government Auditing Standards will benefit from FORVIS' specially designed audit programs, checklists, and database of federal audit programs. Identification and testing of your federal programs will be performed primarily during interim fieldwork, which will typically be performed before your fiscal year-end. We have found this to be the most efficient manner in which to perform our audit services when the additional Uniform Guidance requirements are present. Training Requirements for Single Auditors The City can have confidence in FORVIS auditors' experience in testing federal funding subject to the Uniform Guidance. As mentioned, our audit professionals are required to receive at least 120 hours of CPE every three years and, for auditors involved with audits performed under Government Auditing Standards, this education includes the hours required to comply with Government Auditing Standards Yellow Book guidance. Staff members attend a series of core audit and accounting courses over the first four years of their careers. Staff subsequently receive additional training on accounting and auditing for the nonprofit and governmental environment. Broad Audit Risk Considerations Some risk considerations apply across nearly all of our audits. We pay particular attention to the following items: Significant New Accounting Standards Every organization must assess the applicability and effects of new accounting rules. Significant standards with upcoming or recent broad applicability include: Leases FASB Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), is effective for nonpublic entities for annual reporting periods beginning after December 15, 2021. Public entities, other than conduit bond obligors, were required to adopt the new standard for annual reporting periods beginning after December 15, 2018. Conduit bond obligors received a one-year deferral and are required to adopt the new standard for annual periods beginning after December 15, 2019. This guidance changes the presentation of assets and liabilities that arise from leases. In general, lease assets and liabilities will be recognized in the statement of financial position, along with additional disclosures about lease transactions. FORVIS Public Sector / 17 FORVIS is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office Significant Accounting Estimates Nearly all financial statements have significant estimates in amounts and disclosures, even when not readily apparent. Estimates may include amounts ultimately collectible from third parties, expected losses or costs occurring at a specific amount and time, etc. We will gather information supporting management's estimates and challenge key assumptions used to develop these amounts. We also will test estimates on available data and historical trends and document our conclusions on the reasonableness of recorded amounts. Risk of Management Override of Controls When considering fraud, auditing standards require evaluating the risk that management could override existing controls. We will perform interviews of selected individuals, apply an element of unpredictability in our testing, and brainstorm as a team to evaluate risks and possible actions based on our observations. We also will perform journal entry testing, review estimates for bias and significant changes, and consider the business rationale for significant unusual transactions. Procedures & Risks Specific to the Public Sector Audit procedures can vary, but they often include traditional observation, sampling and testing combined with more advanced deployment of technology for trend analysis, summarization of documents and assessment of large data sets. Our work with hundreds of clients in the public sector means our advisors are very familiar with entities similar to the City. While no two audits are the same, certain activities are common to governmental entities. Specific risk areas for you are likely to include: Investments This is a significant audit area due to the risks associated with the proper and timely valuation of investments. We employ a variety of audit procedures in this area, including the use of third -party confirmations, obtaining an understanding of management's assessment of fair values, fair market value testing to published sources and obtaining SOC 1 reports. In addition, we evaluate the disclosure requirements and the adequacy of completeness and accuracy of the disclosures. Accounts Receivable & Deferred Inflows of Resources & Unearned Revenue These areas often are a significant risk due to the subjective nature of the City's estimate for the allowance for doubtful accounts and the proper recognition of revenue for funds that report using the modified accrual basis of accounting and the current financial resources measurement focus that is consistent with the City's policy. We will test the cutoff of various revenue sources, such as taxes, government grants and customer utility accounts, and review the revenue journal both before and after year end. We may confirm significant accounts receivable, as well as a sample of others to test both existence and proper classification, if considered necessary. In addition, we will test deferred inflows of resources by reviewing subsequent collections and perform various analytical procedures to test both completeness and proper classification of the balances, consistent with the City's policy of recognizing revenue on the modified accrual basis of accounting. Capital Assets We will audit the capital asset rollforward activity of each opinion unit, focusing on significant additions and disposals during the year. Current -year additions will be tested to appropriate supporting documentation. A review of repair and maintenance accounts will be performed to help identify whether material additions have been capitalized. New lease agreements will be reviewed to identify whether they have been accounted for properly. Depreciation expense also will be tested for reasonableness, and certain analytical procedures will be performed on the capital outlay line items for governmental funds associated with the conversion to government -wide reporting. FORMS Public Sector / 18 FORVIS is a trademark of FORMS, LLP, registration of which is pending with the U.S. Patent and Trademark Office Long -Term Debt This is typically a risk due to the presence of one or more significant debt covenants. We review the associated debt documents to help gain an understanding of the flow of funds prescribed for any pledged revenues. We review the covenants and obtain evidence through inquiry and other means, including the recalculation of any financial covenants, to support the conclusion that all covenants have been met and all debt service payments have been made on time. We also will confirm the annual payment activity and ending balances of certain bonds, notes, and leases payable with trustees. In the case of any refunded debt in the year being audited, we will recalculate the accounting gain or loss by reviewing trustee statements and bond documents to test for proper classification and footnote disclosures. We also will inquire about your policy on reviewing each bond and note for applicable IRS arbitrage requirements, prepare a list of bonds and notes subject to IRS arbitrage requirements and the most recent arbitrage calculation prepared for each bond and challenge the calculation performed to test for completeness and obligations of the City. Net Position/Fund Balances Procedures we perform in this area include vouching (or cross-indexing to work performed in other areas) of significant increases and decreases to net position, recalculation of net investment in capital assets for enterprise funds and governmentwide activities, review of documentation supporting the establishment and classifications of new accounts and testing of various nonspendable, restricted, committed and assigned fund balance accounts based on supporting documentation of donor and grantor agreements, enabling legislation, formal actions of city commissioners, such as ordinances and resolutions and other formal policies. Revenue Recognition Professional standards include a rebuttable presumption that for each audit, there is a risk of material misstatement due to fraud relating to improper revenue recognition. Our approach is to gain an understanding of the revenue recognition criteria and policies and then perform a variety of inquiry, analytical and substantive audit procedures to confirm our understanding. Uniform Guidance Testing We will discuss with management and review the preliminary SEFA as of an interim date to identify the likely major programs for testing. We will perform the majority of our testing prior to year-end and will share our results with you prior to final fieldwork. During final fieldwork, we will assess whether there are any additional major programs that would require testing and conclude our compliance and internal control procedures related to OMB's Uniform Guidance expenditures in agreement with the conclusion of the audit of the financial statements. Utility Receivables & Unbilled Revenues We will use several methods to audit your receivables and the estimate of unbilled revenues, including using look -back reports, reviewing historical collection methods, and assessing of the aging and payor mix of your accounts receivable detail. We will analytically review key ratios such as days in accounts receivable and charge-off rates compared to industry averages and prior year results to help us reach our audit conclusions. We will work with your team before year end on the allowance to see that we understand your methodologies and conclusions. Finally, we use data analysis software to test subsequent billings and receipts and the accuracy of revenue cutoff to help validate the year-end accounts receivable balance and any unbilled revenue amounts. Pensions & Other Postemployment Benefit Obligations Due to the subjective nature of the estimation processes associated with determining the estimated Other Postemployment Benefit (OPEB) obligations liability, we will obtain and test the specific actuarial calculations for the OPEB liability. First, we will evaluate the professional qualifications and reputation of the actuary. We will read the actuarial reports to obtain an understanding of the methods and assumptions employed and evaluate the cost method used and the significant assumptions underlying the actuarial calculations. Select testing of the underlying data used in the calculation will be performed. We will FORMS Public Sector / 19 FORVIS is a trademark of FORVIS, LLP, registration of which is pending Wth the U.S. Patent and Trademark Office evaluate the valuation, cost, and amortization methods for consistency. The other significant underlying assumptions such as discount rates, rates of return and medical cost trends will be compared with independent external studies of assumptions by such noted organizations as Milliman Medical Index, SEI Pension Accounting Research Series and the Towers Watson annual healthcare trend survey. IT We will use IT audit professionals and employ audit procedures to test whether the controls within your IT environment are sufficient to allow us to rely on the information generated by your IT platform. These tests will include identification of critical internal controls, detailed walkthroughs of transactions, testing the functionality of the key IT controls identified and review of change management protocols, access controls and overall IT security. GASB's Updated Lease Standard With GASB Statement No. 87, Leases (GASB 87), the way leases are handled in public sector accounting has changed. While this rule is intended to provide clarity for users of financial statements, it brings a host of considerations for both lessors and lessees. Governmental entities will be allowed to transition using the facts and circumstances in place at the time of adoption, rather than retroactive to the time each lease was begun. Proposers will be required to provide the following information on their audit approach: a. Proposed segmentation of the engagement. b. Level of staff and number of hours to be assigned to each proposed segment of the engagement. Risk assessment procedures, including meetings with officials & staff, preliminary analytics, review minutes & design of audit procedures 40 All Professionals based on assessed risks, document & evaluate internal controls Obtain financial policies & procedures, bond documents, leases & 10 Senior Manager, grants & other items for our permanent file Manager & Associate Substantive procedures & analytical review techniques 130 All Professionals Review prepared Annual Comprehensive Financial Report (ACFR) 60 All Professionals Single Audit testing 25 Manager & Associate Supervision, review & technical assistance 30 Partner/Manager Client conferences & meetings to review audit reports 5 Partner/Manager Reporting — Report to governance & management advisory 5 Partner comments FORVIS Public Sector / 20 FORMS is a trademark of FORVIS, LLP, registration of Mich Is pending with the U.S. Patent and Trademark Office c. Sample sizes and the extent to which statistical sampling is to be used in the engagement. Although it is not possible to set absolute rules for identifying sample sizes, we apply our professional judgment in identifying the appropriate sample size. The objective is to test the population to obtain reasonable confidence that the test objectives have been met. Sample sizes are controlled by the following considerations: ■ Tolerable error (precision) — as the expected monetary conclusion becomes more critical, sample size should increase to tighten the range of the extrapolated estimate ■ Significance of the account to the financial statements — as the significance increases, sample size should increase ■ Assessment of internal control risk — as assessed risk is reduced, sample size for substantive tests should decrease ■ Extent of other substantive audit procedures related to same audit objective (tests of detail, as well as analytical review) — as the extent of other procedures increase, sample size should decrease ■ Frequency and magnitude of expected errors — as the frequency and magnitude of expected errors increase, sample size should increase ■ The size of the population to be sampled and whether a sample is appropriate We anticipate using certain data extraction tools in selecting and testing samples or complete populations, where appropriate. These effective tools allow us to efficiently test larger amounts of data. d. Extent of use of software in the engagement. Enhancing Our Services with Technology People and their judgement and skills make the biggest difference in our services, but when our teams have access to and leverage technology effectively, we can enhance our delivery results. Ultimately, we work to deploy the right solutions that fit the needs of each client, but that requires a deep bench of technology solutions. Our audit, tax, and consulting teams each have innovation leadership and significant project teams dedicated to advancing our capabilities in these areas. The following are some of those technologies that may impact your services along with discussion demonstrating how FORVIS is a leader in these areas. Getting & Using Data A significant challenge for some clients can be providing the reporting and data required for our services. Solutions we use include: ■ Providing a proprietary online client portal and collaboration site for sharing requests and exchanging documents ■ Using market -leading ingestion software to directly connect with certain general ledger packages to obtain required transaction detail with limited client effort and reduced additional requests Efficient Analysis While still in its infancy, technologies such as artificial intelligence (Al) are being leveraged along with other tools to efficiently analyze increasing volumes of data. Our efforts with data analytics, including Al, include: ■ Training data champions who are using market -leading quantitative data analytics tools to not just ingest data, but to analyze and identify anomalies or unexpected results ■ Leveraging market -leading software that uses language processing and machine learning to help our analysis of written documents, such as leases, contracts, acquisition contracts, and debt agreements ■ Identifying new tools to increase efficiencies FORMS FORMS is a trademark of FORVIS, LLP, registration of wfiich is pending with the U.S. Patent and Trademark Office Public Sector / 21 Workflows & the Cloud Many firms rely on outdated software or manual approaches to executing their work, while FORVIS is building or buying new tools to speed our efforts and better manage our delivery to clients. Our approaches include: ■ Investing significant talent and financial support with the AICPA and a number of other large firms to help build an audit technology designed to transform our practice and our ability to serve our clients in the future ■ Using market leading tools and building our own proprietary solution to deliver a better client experience through cloud - based questionnaires, integrated risk assessment, and response workflows that better enable us to execute our engagements and deliver results to our clients ■ Increasing automation of our workflow and redundant tasks through robotic process automation (RPA) and application programming interfaces (API) e. Type and extent of analytical procedures to be used in the engagement. Analytical procedures involve auditing a material assertion or account balance by investigating its relationship to an expectation such as other accounts, historical trends, or other related measures. FORVIS recognizes stronger analytical procedures can help reduce or eliminate other substantive procedures that are usually more time consuming. We would typically consider: ■ Ratio analysis — comparing relationships among account balances, ratios, nonfinancial data, budgets, or industry averages ■ Reasonableness tests — using financial and/or nonfinancial data to develop an expectation of an account balance Successfully using analytical procedures requires auditors to ask the questions: ■ What is the risk of material misstatement ■ How would we find those misstatements ■ Have I gathered enough audit evidence When analytical procedures provide sufficient evidence, other substantive audit procedures should not be necessary. If analytical procedures are not sufficient, some combination of analytical and substantive procedures is likely to be the preferred approach. f. Approach to be taken to gain and document an understanding of the City of Salina's internal control structure. Understanding your operations and the design of your controls helps create an effective and efficient audit process. When performing our first audit, this effort is more substantial. There are several data sources we intend to use, including your prior auditor. Our first objective is to identify those resources that might advance our understanding without extra effort on your part. If you have documentation of your organizational structure, control environment (including technology), and the controls you have in place, along with any testing of those controls, we can often just read and supplement that information as needed. Even when clients have effective controls, their documentation is often limited, so additional effort may be required. When starting with limited documentation, we will: ■ Perform a risk assessment using your financial statements to identify the relevant areas for documenting our understanding and related testing; while we want to understand your operations, it isn't necessary for us to document every control, particularly when a control is not related to a significant audit area ■ Ask you to complete industry -specific questionnaires that summarize your control structure; you might complete these forms directly or we may interview you to guide the process, or some combination of both; this process includes understanding your information system and related controls FORVIS Public Sector / 22 FORVIS is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office ■ Identify who performs or can perform control activities; we can use industry -based assignment of duties forms to capture those assignments ■ Assess and/or identify key controls you have in place for significant areas of risk we will look for gaps in your design and potential overlapping assignments of duties that could or should be segregated ■ Perform limited tests of design effectiveness of control activities; these tests will help us evaluate whether our documentation matches the activities occurring ■ Consider extended tests of controls; in some cases, your information may be so complex or voluminous that extended ■ Control testing is needed to rely on your control and reduce other substantive testing in our audit ■ Summarize recommendations for your consideration; for minor deficiencies or suggestions, we may discuss changes during our audit; for others, including significant deficiencies or material weaknesses, we will prepare written recommendations for your consideration ■ In periods following our first audit, the majority of our understanding and documentation will be complete; going forward, we focus on changes that have occurred and continue performing tests of design effectiveness or expanded testing to evaluate whether control design has remained the same g. Approach to be taken in determining laws and regulations that will be subject to audit test work. Identification of applicable laws and regulations will begin with an inquiry of the City as to your understanding of applicable laws and regulations. In addition, our reviews of various documents, indentures, agreements, etc., will be designed to encompass known laws and regulations within the scope of the audit. We are experienced in auditing public sector entities in the state of Kansas and are familiar with the laws and regulatory environment in which you operate. h. Approach to be taken in drawing audit samples for purposes of tests of compliance. The sampling approach anticipated to be used in connection with the various areas of the audit is judgmental in nature. The size and nature of the population being tested, along with the assessed risk of the associated financial statement line item affected, will determine the size and approach for selecting a sample. Sample sizes will be sufficient to meet requirements of the various state and federal laws and regulations. We anticipate using data extraction tools in certain situations in selecting and testing samples or complete populations, where appropriate. FORMS Public Sector / 23 FORVIS is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office Appendix Thinking of Your Future As previously mentioned the following service may be a benefit to the City. Cybersecurity Risk Assessment FORMS consultants will work with management to identify areas of business risk arising from potential disclosure, modification, or loss of personally identifiable information (PII) or electronic protected health information (ePHI). In addition, we will identify the maturity level of the City's current cybersecurity processes/controls and assign a high, medium, or low risk rating. Risk severity will be identified by assessing the likelihood of a breach occurring as well as the potential downstream effects. Finally, we will work with management to create a remediation road map and recommended timeline, based on the risk severity identified. This timeline will assist the City's management in effectively allocating financial resources or personnel that may become necessary. Throughout this process, FORVIS consultants will maintain a high level of open and frequent communication with the City's management to better understand your needs and constraints. The City can expect questions and ideas that promote conversation. Your proposed team will work on site and assist in facilitating effective service coordination and schedule flexibility, as well as improving lines of communication. Weekly status meetings are part of our service approach. Our cybersecurity assessment approach comprises four distinct phases. A focus on project management and frequent client communication means the City can be confident engagement objectives are addressed. Assistance Preparing the ACFR Access to Public Sector Reporting Solutions — A Streamlined Process FORVIS is constantly on the lookout for innovative ways to apply technology to make tedious processes more efficient and effective for our clients. FORVIS is now a certified implementor of The Reporting Solution (TRS), a cloud -based tool that can help streamline the report preparation process, which could be a benefit for the City as you work to issue an ACFR and continue your successful history of receiving an award through the GFOA's COA Program. Through TRS, FORVIS and our clients can connect to a cloud -based online platform to prepare the report with print -ready financial statements and a word processor that links to a financial database. In addition, changes can be made and updated in real time for all users to see. This platform allows multiple users to work simultaneously within the financial statement document, thereby creating an efficient, prompt and cost-effective preparation process. Review of ACFR by Knowledgeable Advisors — Trusted Insights We understand the City intends to issue an ACFR and apply for GFOA's COA Program. FORMS can help you through this process by reviewing your reports. This review will include the evaluation of your reports using our independently prepared checklists designed to aid in financial reporting and disclosure accuracy and completeness. Firmwide, we have numerous clients that participate in this program and several team members who serve on the GFOA's Special Review Committee. We will work with you to resolve identified discrepancies and to reduce exceptions when your reports are returned. FORMS Public Sector / 25 FORVIS is a trademark of FORVIS, LLP, registration of Wiich is pending with the U.S. Patent and Trademark Office AICPA Peer Review Letter t40, *,aicPa December 11, 2020 Theodore Dickman BKD, LLP 910 E Saint Louis ST Ste 400 Springfield, MO 65806-2570 Dear Theodore Dickman: National Peer Review Committee It is my pleasure to notify you that on December 11, 2020, the National Peer Review Committee accepted the report on the most recent System Review of your firm. The due date for your next review is November 30, 2023. This is the date by which all review documents should be completed and submitted to the administering entity. As you know, the report had a peer review rating of pass. The Committee asked me to convey its congratulations to the firm. Thank you for your cooperation. Sincerely, Michael Fawley Chair, National PRC +1.919.402.4502 cc: Candace Wright, L Bennett Firm Number: 900010002800 Review Number: 577534 220 Leigh Farm Road, Durham, NC 27707-8110 T: +1.919.402.4502 F: +1.919.419.4713 aicpagiobal.com I cimaglobal.com I aicpa.org I cima.org FORVIS Public Sector / 26 FORVIS is a trademark of FORMS, LLP, registration of which is pending vnth the U.S. Patent and Trademark Office BKD Peer Review Report P &N 8550 United Plaza Blvd., Ste. 1001 — Baton Rouge, LA 70809 7 225-922-4600 Phone — 225-922-4611 Fax — pncpa.com Posllethwaite & Netlervitle Postlethwaite & Nettend le and Associates. L.L.C. Report on the Finn's System of Quality Control To the Partners of BKD, LLP and the National Peer Review Committee We have reviewed the system of quality control for the accounting and auditing practice of BKD, LLP (the firm) applicable to engagements not subject to PCAOB permanent inspection in effect for the year ended May 31, 2020. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board ofthe American Institute of Certified Public Accountants (Standards). A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as described in the Standards may be found at www.aicpa.org//prsummary. The summary also includes an explanation of how engagements identified as not performed or reported in confonnity with applicable professional standards, if any, are evaluated by a peer reviewer to determine a peer review rating. Firm's Responsibility The firm is responsible for designing a system of quality control raid complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. The firm is also responsible for evaluating actions to promptly remediate engagements deemed as not performed or reported in conformity with professional standards, when appropriate, and for remediating weaknesses in its system of quality control, if any. Peer Reviewer's Responsibility Our responsibility is to express an opinion on the design of the system of quality control mid the firm's compliance therewith based on our review. Required Selections and Considerations Bngagemenls selected for review included engagements performed under Government Auditing Standards, including compliance audits under the Single Audit Act; audits of employee benefit plans, audits performed under FDICIA, an audit of a broker-dealer, and examinations of service organizations [SOC 1 and SOC 2 engagements]. As part of our peer review, we considered reviews by regulatory entities as communicated to the firm, if applicable, in determining the nature and extent of our procedures. Opinion In our opinion, the system of quality control for the accounting and auditing practice of BKD, LLP applicable to engagements not subject to PCAOB pennanent inspection in effect for the year ended May 31, 2020, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass wish de iciency(ies) or fail. BKD, LLP has received a peer review rating ofpass. Baton Rouge, Louisiana November 2, 2020 2611161 FORMS Is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office Public Sector / 27 Proof of Professional Liability Insurance FORVIS maintains professional liability insurance coverage to protect us in the unlikely event substantial litigation would ever threaten our financial stability. The firm's Governing Board determines the appropriate amount of coverage, considering the nature of our clientele, the services we perform, and other factors. Our coverage is comparable to or exceeding that of other firms our size and what one might expect of a firm of our size and nature. As a privately held partnership, FORMS does not provide our full insurance policies to outside sources. However, we have provided our professional liability certificate. FORMS Public Sector / 28 FORVIS is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office Proof of Liability Insurance A ® DATE (M."0IYYYY) CERTIFICATE OF LIABILITY INSURANCE 06/,(2/2022 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES 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 pollcy(les) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder In lieu of suchendorsement s). PRODUCER 1-847-385-6800 NAME:C Cathy Kuehl Edgewood Partners Insurance Center Leume, a division of EPICE-MAIL 111 West Campbell PHONE FAX fAIC.847-385-6800 ac No: E -MAIL ._ADDRESS: INSURERS AFFORDING COVERAGE NAICS 4th Floor INSURERA: SWISS Re International BE and Various Arlington Heights, IL 60005 INSURED INSURER B : FORVIS, LLP INSURERC: INSURERD: 14241 Dallas Parkway INSURER E: Suite 1100 Dallas, TX 75254-2961 INSURER F: COVERAGES CERTIFICATE NUMBER: 65707201 REVISION NUMBER: THISIS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF INSURANCE ADDL SUER POLICYNUMBER POLICY EFF MMIDD/YYY POLICY EXP MM/DDIYYYY LIMITS COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE S CLAIMS -MADE F OCCUR DAMTo RM� PREl.IISES Ea ocmaence$ MED EXP (An one Person) $ PERSONAL& ADV INJURY $ LIMIT APPLIES PER: GENERAL AGGREGATE $ n,(ENLAGGREGATE POLICY [ PRO JECT _] LOC PRODUCTS -COMP/OP AGG $ _ $ OTHER AUT OMOBILELIABILITY COMBINED SINGLE LIMIT $ Ea accdent BODILY INJURY (Per person) $ ANY AUTO OWNED SCHEDULED AUTOS ONLY AUTOS BODILY INJURY (Per accident) $ PROPERTY DAMAGE $ Per accident HIRED NON -OWNED AUTOS ONLY AUTOS ONLY $ UMBRELLALIAB OCCUR EACH OCCURRENCE $ AGGREGATE $ EXCE33 UA. CLAIMS -MADE DED RETENTION$ $ WORKERS COMPENSATION AND EMPLOYERS' LIABILITY Y / N ANYPROPRIETORIPARTNER/EXECUTNE PER OTH STATUTE _ _ _ ER_ E.L.EACH ACCIDENT $ OFFICERIMEMBER EXCLUDED? ❑ N f A E.L. DISEASE -EA EMPLOYE $ (Mandatory In NH) if yes, descdbe untler DESCRIPTION OFOPERATIONS beim, E.L. DISEASE -POLICY LIMIT $ A :Professional Liability B057214R229248 06/01/22 06/01/23 Each Claim 10,000,000 Aggregate 10,000,000 DESCRIPTION OF OPERATIONS/ LOCATIONS /VEHICLES (ACORD 101. Additional Remarks Schedule, maybe attached If more apace Is required) CERTIFICATE HOLDER CANCELLATION ©1988.2015 ACORD CORPORATION. All rights reserved. ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD Cheryl.Donohue®lemme.Com_LEH 65707201 FORVIS Public Sector / 29 FORVIS is a trademark of FORVIS, LLP, registration of Hhich is pending with the U.S. Patent and Trademark Office SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE FORVIS, LLP THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. 14241 Dallas Parkway AUTHORIZED REPRESENTATIVE Suite 1100 Dallas, TX 75254-2961 USA ©1988.2015 ACORD CORPORATION. All rights reserved. ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD Cheryl.Donohue®lemme.Com_LEH 65707201 FORVIS Public Sector / 29 FORVIS is a trademark of FORVIS, LLP, registration of Hhich is pending with the U.S. Patent and Trademark Office Exceptions to Terms & Conditions Upon being selected as the successful bidder, FORMS may require modification to the City's contractual terms, which were not included or specifically described in the RFP, to comply with professional standards and/or FORVIS' policies. As FORMS has successfully resolved similar terms and conditions with other municipalities, FORMS is confident the parties can successfully negotiate a mutually acceptable agreement. FORVIS Public Sector / 30 FORMS is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office Appendix A APPENDIX A RESPONDENT CERTIFIES The proposer certifies it can and will provide and make available, at a minimum, all services set forth in Section II, Nature of Services Required. Signature of Official: Name (printed): Michael C. Gerber, CPA Title: Partner Firm: FORVIS, LLP Date: December 30, 2022 FORVIS Public Sector / 31 FORVIS is a trademark of FORVIS, LLP, registration of Mich is pending with the U.S. Patent and Trademark Office Appendix B APPENDIX B RESPONDENT CERTIFIES A. Proposer certifies that it is willing and able to comply with State of Kansas laws with respect to foreign (non -state of Kansas) corporations. B. Proposer certifies that it is willing and able to obtain an errors and omissions insurance policy providing a prudent amount of coverage for the willful or negligent acts, or omissions of any officers, employees or agents thereof. C. Proposer certifies that it will not delegate or subcontract its responsibilities under an agreement without the express prior permission of the City of Salina. D. Proposer certifies that all information provided by it in connection with this submission is true and accurate. E. Proposer certifies that it understands it is required to adhere to the Contract requirements set forth in this RFP and all of the requirements of the RFP will be an attachment to the contract. Signature of Official: Name (printed): Michael C. Gerber, CPA Title: Partner Firm: FORVIS, LLP Date: December 30, 2022 FORMS FORVIS is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office Public Sector / 32 About FORVIS An Enhanced Professional Services Firm What's going to happen tomorrow? You can't predict the future, but you can prepare for it. To thrive in an environment that moves faster every day, business leaders must be able to look ahead and be ready for what comes next. That's where FORVIS can help. Driven by the desire to anticipate what's next in the economic landscape, our goal is to help our clients be ready when the future becomes the present. We're committed to using our exceptional vision to provide each of our clients with an Unmatched Client Experience TM that drives business forward. FORMS was created by the merger of equals between BKD and DHG. We aim to carry on our respective legacies of high -touch personal service delivered with remarkable integrity, care, and innovation—all now backed by the resources of a top 10 U.S. public accounting firm. 99 Forward Vision Drives Our Unmatched Client Experiences With national coverage As a FORMS client, you will benefit from a single organization with the and international presence, enhanced capabilities of an expanded national platform, deepened industry We're stronger: for our experience, greater resources, and innovative advisory services. Our aim is clients, our people, and the to provide assurance, tax,. and advisory services that help clients succeed today while preparing them to forge ahead into a clear future. market of the future. Our eye on the future isn't exclusively directed toward our clients. We want our people—at every level, in every office—to be motivated by engaging career paths that challenge and inspire them to grow personally and professionally. Our partners and staff are the foundation of the firm, and V when they have the opportunity to flourish, the result is Unmatched Client Experiences. `7j We are FORVIS—driven by a commitment to anticipating what's ahead so our clients are ready to thrive when it arrives. Tom Watson Chief Executive 8th 530+ 28 Officer Largest Partners & States + U.K. & U.S. Firm` Principals Cayman Islands" 10+ 5,700+ 72 Industries Team Members Markets ^ ��� �"Y FORVIS is a member of Prawty-, an international alliance of independent accounting fimis that offers multinational clients access to resources around the world. '•I • FORVIS was ranked number eight on Inside Public Accounting's 2022 annual ranking of accounting firms by revenue. �..� m,Pe. a,i,a e�:ma.: mon�uy •• Services outside the United States are provided through our subsidiaries and/or affiliates FORMS Public Sector / 33 FORMS is a trademark of FORVIS, LLP, registration ofwhich is pending with the U.S. Patent and Trademark Office •l: FORMS is a trademark of FORVIS. LLP. registration of which is pending with the U.S. Patent and Trademark Office A PROPOSAL FOR / City of Salina Submitted by FORVIS, LLP 1551 North Waterfront Parkway, Suite 300, Wichita, KS 67206 COST DATA Michael C. Gerber, CPA, Phone: 316.265.2811 December 30, 2022 Partner Your Investment Proposed Fees FORVIS' goal is to be candid, timely, answer the City of Salina's (the City) questions about fees upfront, and avoid fee surprises. We determine our fees by evaluating a number of variables: the complexity of the work, the project's scope, the time we will spend, and the level of professional staff needed. In addition to our quoted fee, you will be billed travel costs and an administrative fee of 5%. This fee covers items such as copies, postage and other delivery charges, supplies, technology -related costs, such as computer processing, software licensing, research and library databases, and similar expense items. Our fees may increase if our duties or responsibilities change because of new rules, regulations, and accounting or auditing standards. We will consult with you should this happen. The fees provided in the following chart do not include any time that may be required to address a restatement of previously audited financial statements. Accordingly, any such work will be billed based on our hourly rates. FORMS Public Sector / 2 FORVIS is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office APPENDIX C SCHEDULE OF HOURS AND EXPENSES STAFF ASSIGNED Partners Managers Supervisory staff Staff other (Admin I Subtotal Professional Fees Out-of-pocket expenses: Meals and lodging Transportation Other (specify Admin fee ) Total all-inclusive maximum price for 2022 audit (including STAR Bond audit) Maximum percentage increases for future contract years (all costs) 2023 5.5 % 2024 5.5 % Hours Rate Total 11 $410 $ 4,510 38 $265 $10,070 87 $226 $19,660 161 $151 $24,300 8 $170 $ 1,360 305 F F-1 $59,900 '1,875 $2,995 $ 64,770 Hourly Fees for consultation (by staff level): $ See above Note: The rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the total all-inclusive maximum price. Our acceptance of this engagement is subject to completion of our normal client acceptance procedures. Upon acceptance, the actual terms of our engagement will be documented in a separate letter to be signed by you and us. The information provided in this proposal is intended for informational purposes only and may not be copied. used, or modified, in whole or In part, without FOR VIS' prior written approval. All information in this proposal is as of November 1, 2022, including projected statistics for FORVIS, unless otherwise noted. FORMS Public Sector / 3 FORMS is a trademark of FORVIS, LLP, registration of which is pending vAth the U.S. Patent and Trademark Office •l: FORVIS is a trademark of FORVIS. LLP. registration of which is pending with the U.S. Patent and Trademark Office CITY OF SALINA, KANSAS •NPFWrSA1"1NA-1K'1S.G0V Proposal for Professional Auditing Services Submitted By: HOOD & ASSOCIATES CPAs, P.C. 7255 W. 98"' Terrace, Suite 100 Overland Park, KS 66212 (913) 378-1100 Contact Person: Michael Keenan, CPA December 30, 2022 TABLE OF CONTENTS A - Letter of Transmittal 1-2 B — Memberships that Enhance our Governmental Practice 3 C — Profile of the Firm 4-5 D — Firm Qualifications and Experience 6-7 E — Specific Audit Approach 8-14 F — Similar Engagements with Other Governmental Entities 15-16 Appendices: A- Respondent Certifies 17 B- Respondent Certifies 18 D- Most Recent Peer Review Report 19-20 E- Resumes and Continuing Professional Education 21-24 Debbie Pack Director of Finance City of Salina, Kansas 300 West Ash Salina, Kansas 67402 Imi AND ASSOCIATES CPAs, PC December 30, 2022 Re: Proposal for Professional Auditing Services Hood & Associates CPAs, P.C. (H&A) is pleased to submit our proposal for auditing services for the City of Salina, Kansas (the City) for the years ending December 31, 2022, 2023 and 2024 with the annual option for the City to engage us to audit the two (2) subsequent fiscal years ending (December 31, 2025, and 2026). It is our understanding the audit will encompass the: • Audit of the City's Annual Comprehensive Financial Statements — ACFR • Single Audit Report • Statutory audit of the use of the STAR Bond proceeds The audit will be performedin accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the provisions of the federal Single Audit Act of 1996, and the provisions of the Uniform Guidance, Audits of States, Local Governments, and Non -Profit Organizations, and the related OMB Compliance Supplement and applicable state and local laws and the Kansas Municipal Audit Guide. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement(s). The audit will include examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. The audit will also include assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. The accounting and reporting principles promulgated by the Governmental Accounting Standards Board will be applied. Upon completion of the engagement, we will issue the following reports: • Audit report on the basic financial statements - Annual Comprehensive Financial Report, • Report on compliance and internal control over financial reporting on the audited financial statements, • The Single Audit report and report on compliance and internal control over compliance applicable to each major federal program, and • Required communications and management letter. A — Letter of Transmittal To conduct an effective and efficient audit, the auditor must possess a full understanding of the City's unique characteristics. Additionally, the professionals assigned to the engagement should have the expertise and creative capability to assist the City in meeting its financial challenges, to suggest innovative ways to improve operations at reduced costs and to assure a clear accountability of the City's financial affairs. As you read this proposal, we are confident you will conclude our audit approach will provide you with a thoroughly effective, and efficient audit at a reasonable cost. We can not only fulfill your independent audit requirements but can additionally provide a variety of consulting skills. To summarize our strengths, the reason why you should select H&A because of: • Our extensive local governmental experience, • Our extensive Single Audit experience, • Our extensive experience in performing cost cert f cation examination engagements for various Tax Increment Financing Plans. • Our experience in assisting governmental entities in obtaining the GFOA Certificate of Achievement, • Our successful experience in assisting local governments in the implementation of Government Accounting Standard Board (GASB) Pronouncements, • Our engagement team's qualifications, • Our ability to perform the audit effectively and efficiently at a high level of technical performance standards, • Our ability to adhere to agreed upon timetable, due dates, and budgets. • Our ability to provide governmental consulting services at a local level, and • Our quality of professional service as demonstrated by our peer review. We are cognizant of the time requirements noted in the Request for Proposal and we possess the necessary resources to provide the requested services within the requested time period. Michael Keenan, CPA is the Engagement Partner of Hood & Associates CPAs, P.C. and is authorized to make representations for the firm as well as bind the firm and enter into a contract to perform the requested services. Our proposal is a firm and irrevocable offer for sixty (60) days after the submittal date. We would be honored to be selected as your auditor and we believe that based on our governmental auditing experience we are best qualified to perform the engagement. We are confident that your needs are well matched with the services we offer and our proactive service delivery approach. It is our sincere intent to serve you with the utmost professional competence, offering the full resources of our firm. The bottom line is we truly want your business. You will receive the best service and attention that our firm has to offer. Very truly yours, Mood & Assoola&If 677s, PC A — Letter of Transmittal 2 MEMBERSHIPS THAT ENHANCE OUR GOVERNMENTAL PRACTICE Governmental �ii Audit Quality Center ® AICPA Governmental Audit Quality Center We are a member of the American Institute of Certified Public Accountants' (AICPA) Governmental Audit Quality Center. To meet the requirements of membership Hood & Associates CPAs, PC. must demonstrate, yearly, that our quality control standards specific to our governmental audit practice complies with the applicable professional standards and other Center membership requirements. As a member we are provided with best practices, guidelines, and tools that we need to perform quality audits and better serve our governmental and not-for-profit clients. Employee Benefit Plan Audit Quality Center AICPA Employee Benefit Plan Audit Quality Center We are a member of the American Institute of Certified Public Accountants' (AICPA) Employee Benefit Plan Audit Quality Center. To meet the requirements of membership Hood & Associates CPAs, PC. must demonstrate, yearly, that our quality control standards specific to our employee benefit plan audit practice complies with the applicable professional standards and other Center membership requirements. Employee benefit plan audits include pension, health and welfare, and 401(k) plans subject to the Employee Retirement Income Security Act (ERISA) under the regulatory authority of the U.S. Department of Labor (DOL). As a member we are provided with the best and up to date practices, guidelines, and tools that are available to perform quality benefit plan audits and better serve our clients. B — Memberships that Enhance our Governmental Practice PROFILE OFHOOD & ASSOCIATES CPAs, P.C. Hood & Associates CPAs, P.C. Phone: 913-378-1100 7255 W. 98t' Terrace, Suite 100 Web Site: www.hoodcpas.com Overland Park, KS 66212 Email: mkeenan(i4hoodcpas.com Hood & Associates CPAs, P.C. has successfully provided professional services primarily throughout Oklahoma, Texas, Missouri, and Kansas since 1993. We began with one office in Bartlesville, Oklahoma. With our hard work and our reputation of providing exemplary services, we pride ourselves in having grown to be one of the larger locally owned certified public accounting firms in Kansas, Missouri, Oklahoma, and Texas. We currently have fourteen (14) offices located throughout Kansas, Missouri, Oklahoma, and Texas. Our office located at 7255 W. 98'x' Terrace, Suite 100, Overland Park, Kansas 66212, will be the office from which the work will be performed. Today Hood & Associates CPAs, P.C. employs approximately two hundred (215) associates, which consist of thirty-six (39) CPA's, one hundred twenty-eight (128) paraprofessionals, and forty-five (48) administrative personnel. On page 7 of this proposal, we list the names of our professional staff that will be assigned to this engagement. LICENSE TO PRACTICE 17V KANSAS Our firm and our key professional staff members of our client service team are properly licensed as Certified Public Accountants in the State of Kansas and hold appropriate permits to practice issued by the State of Kansas Board of Accountancy. INDEPENDENCE Hood & Associates CPAs, P.C. is an independent certified public accounting firm and as such is independent of the City as defined by the American Institute of Certified Public Accountants under generally accepted auditing standards and the provisions of GovernmentAuditing Standards promulgated by the U.S. Government Accountability Office. Hood & Associates CPAs, P.C. is independent of the City of Salina, Kansas as defined by Government Auditing Standards issued by the Comptroller General of the United States. Hood & Associates CPAs, P.C. is licensed to practice in the State of Kansas, registered with the Kansas Accountancy Board, and is the approved government auditor list. We currently have had no professional or other relationship involving the City. Consequently, we do not have any conflict of interest relative to performing the proposed audit. If any professional or other relationship develops, other than performing the audit, we will provide written notice to the City. GOVERNMENTAL SERVICES GROUP CONCEPT To better serve the need of our governmental clients, we established the Governmental Services Group concept. We have implemented this Services Group concept in the performance of our audits. We have a Service Team that includes professionals who have been involved in serving as auditors for local governments for many years. We understand the economic climate and operations of local governments and serve as consultants and knowledgeable advisors to our clients. We emphasize service to our clients, not merely going through the motions to meet the minimum professional requirements. C — Profile of the Firm PROFILE OFHOOD & ASSOCIATES CPAs. P.C. (continued) We have made the commitment to provide the US Government Accountability Office (GAO) required governmental (Yellow Book) continuing professional education to all our audit staff. Consequently, all professionals assigned to this engagement will meet or exceed the GAO training requirements. We will be staffing this engagement with full-time basis professionals. UNIFORMGUIDANCEI SINGLEAUDIT EXPERIENCE The amount of funds provided by the Federal Government to entities for various programs and projects has been an important source of revenues for several years and more recently during the Covid-19 pandemic. We provide audits to numerous governmental and not-for-profit entities which must comply with the Uniform Guidance. We have experience in not only auditing grant programs but assisting clients in obtaining grants, implementing systems and controls to ensure compliance with grant terms and evaluating programs. Single Audit — On average we audit forty to fifty (40 to 50) major programs each year. QUALITYCONTROL POLICIES, PROCEDURESAND PEER REVIEW Hood & Associates CPAs, P.C. adheres to the professional standards policies and procedures of the American Institute of Certified Public Accountants Statement on Quality Control Standards, state CPA societies, state Boards of Accountancy, state statutes and other regulatory agencies where applicable. Additionally, Hood & Associates CPAs, P.C. is a member of the American Institute of Certified Public Accountants' (AICPA) Governmental Audit Quality Center. As a member, we must demonstrate, annually, that our quality control standards specific to our governmental audit practice complies with the applicable professional standards and other Center membership requirements. Membership provides us with the best and up to date practices, guidelines, and tools that are available to perform quality governmental audits and to better serve our clients. In accordance with Government Auditing Standards and applicable professional standards, we participate in an external quality control review program. Hood & Associates CPAs, P.C.'s most recent peer review report received a rating of pass and is included with this proposal. Hood & Associates CPAs, P.C.'s peer review includes the review of our governmental audit practices. C — Profile of the Firm PARTNER, SUPERVISORYAND STAFF OUALIFICATIONSAND EXPERIENCE OFHOOD & ASSOCIATES CPAs. P.C. We have extensive experience in engagements for many cities and other governmental entities of all sizes. As an example of our ability to serve an entity such as yours, we have listed below a few of our clients for which Hood & Associates CPAs, P.C. and acquired firms have served as auditors: o City of Leavenworth, Kansas o City of Emporia, Kansas o City of Olathe, Kansas o City of Leawood, Kansas o City of Overland Park, Kansas o City of Lenexa, Kansas o City of Topeka, Kansas o Emporia Firefighter's Relief Association o City of Pryor, Oklahoma o Town of Salina, Oklahoma o Town of Chelsea, Oklahoma o City of Vinita, Oklahoma o Town of Adair, Oklahoma o Town of Locust Grove, Oklahoma o Town of Beggs, Oklahoma o City of Elgin, Oklahoma o City of Dewey, Oklahoma o City of Joplin; Missouri o City of Joplin MO Firemen and Policemen Pension Fund o City of Monett, Missouri o City of Parkville, Missouri o City of Osage Beach, Missouri o City of Rolla, Missouri o City of Sugar Creek, Missouri o Clay County Public Health Center o Clay County, Missouri o City of St. Joseph, Missouri o City of Branson, Missouri o The Police Department of Kansas City, Missouri o Thirty Ninth Street Transportation Development District o Hawthorne Development Transportation Development District o Fall Creek Community Improvement District 0 32°d Street Place Community Improvement District o Truman's Marketplace Community Improvement District and Transportation District o Fire District No. 1 Leavenworth County, Kansas o Central Interstate Low -Level Radioactive Waste Compact Commission o Mid -Continent Public Library D — Qualifications of the Firm PARTNER. SUPERVISORYAND STAFF QUALIFICATIONS AND EXPERIENCE OFHOOD & ASSOCIATES CPAs, P.C. STAFF CONTINUITY A continuing goal of our firm is the development and maintenance of a long-term relationship. Our clients typically desire to ensure the continuity of key members of the client service team and associated government specialists. As a matter of policy, we do not require systematic staff rotation, eliminating the concern about repeated "learning curves". It is our goal, however, to foster career growth, encouraging staff members to take on increasing levels of professional responsibility within the scope of each engagement. As promotions occur, we maintain assignments at as many other levels as possible, to assure continuity and consistency. We will notify you regarding any change in partner, manager or supervisory staff assigned to the engagement. In the event that turnover occurs, we will ensure the staff assigned has similar experience and the remaining engagement team members will be responsible for ensuring any new team member understands your organization and issues. PROFESSIONAL TRAINING Our firm's primary asset is the experience and capability of our people to render professional services. To ensure the highest level of professional performance, we conduct an extensive recruiting campaign to enable us to employ graduates of high academic achievement and demonstrated leadership qualities. We have made the commitment to provide the U.S. Government Accountability Office (GAO) required governmental (Yellow Book) continuing professional education to all our audit staff. Consequently, all professionals assigned to this engagement will meet or exceed the GAO training requirements. Each individual professional receives over forty (40) hours of formal continuing education guidance on an annual basis. PERSONNEL ASSIGNED TO THIS ENGAGEMENT Because of the number of governmental clients that our firm serves, you can be assured that the following individuals assigned to your engagement have experience working on similar engagements. Michael Keenan, CPA Engagement Partner Warren Herrick, CPA Engagement Manager Alex Wagner Engagement Staff Associate Michael Keenan, CPA, is licensed to practice in Kansas and Missouri. He has over thirty (30) years of auditing experience primarily in governmental auditing. Mr. Keenan is a member and reviewer of the GFOA Certificate of Achievement Review Committee. He will serve as the Engagement Partner and technical specialist, providing his expertise as needed to the engagement team. He will be available to assist in resolving technical issues and perform a review of the reports issued as a result of this engagement. He will work closely with the entire audit team throughout the audit. Warren Herrick, CPA, is licensed to practice in Kansas and Missouri. He has nearly twenty (20) years of public accounting experience, in both the accounting and audit areas. Warren has managed numerous audit engagements for clients in a wide variety of industries including governmental entities, Single Audits, and non- profit organizations. He will work closely with the Engagement Partner and Staff. Alex Wagner has over two (2) years of public accounting audit experience, primarily in auditing governmental and not-for-profit entities. He will work closely with the Engagement Manager. D — Qualifications of the Firm A UDIT PHILOSOPHYAND SPECIFIC A UDIT APPROACH Firin Philosophy Our philosophy in providing audit services is one which has at its core the ultimate purpose of providing parties that place reliance on audit services with reports and financial statements prepared in the highest of professional and ethical standards and presented in accordance with the technical standards of the accounting and auditing profession and in compliance with laws and regulations. To that end, the following goals have been established: • To keep, of utmost importance and concern, the interest of those parties that place reliance on the audit report. • To provide our clients with the highest quality of services at reasonable rates. • To provide timely service. • The firm's partner and engagement manager will always be available to review progress on any engagement and to consult with the client on the status of work. • To, at all times, maintain the highest ethical and technical standards that have been established by the accounting profession. The Firm's philosophy concerning retention of staff places emphasis on the following areas: • To strive to employ and retain quality personnel by the creation of an enjoyable everyday work environment, keeping our employees' interest and career goals near the top of our personnel policies. • To provide all personnel the opportunity for personal growth and achievement. Audit Approach The audit of the financial statements will be performed in phases. The first phase is planning, including staff assignments as well as transition planning. The second phase is the fieldwork audit. The final phase is the wrap-up that will result in the issuance of our report on your financial statements. D — Qualifications of the Firm A UDIT PHILOSOPHYAND SPECIFIC A UDIT APPROACH (CONTINUED) TIMING We would begin our planning of the December 31, 2022, audit immediately upon notification of being awarded the contract. Timetable for the audit of the City of Salina, Kansas: Phase One — Planning Phase • Pre -audit conference and interim work will be performed during January 2023. • Detailed audit plan and list of client prepared schedules will be provided by January 31, 2023. • An entrance conference with the City's Director of Finance the week of February 6, 2023 (or mutually agreed date). Phase Two —Fieldwork Phase • Fieldwork will be completed by May 1, 2023. In addition, audit conferences will be held weekly with key City personnel to update progress on the engagement and resolve technical issues that may arise. An exit conference with the City's Director of Finance will be held the week of April 24, 2023 (or mutually agreed date). • Draft financial statements and required communications will be delivered on or before May 15, 2023. Phase Three — Wrap-up Phase • Final copy of the Annual Comprehensive Financial Report, the Star Bond Agreed Upon Procedures report and required communications will be delivered no later than June 16, 2023, with presentation to the Mayor and City Commissioners at the June 26, 2023 regularly scheduled meeting. E — Specific Audit Approach 9 AUDIT PHILOSOPHYAND SPECIFICAUDITAPPROACH (CONTINUED) We have developed an audit risk model to enable us to perform effective and efficient audits. This model focuses on the significant and high-risk aspects of an entity such as yours and eliminates the typical inefficient tendencies to spend significant time examining transactions that have little or no importance to the financial statements as a whole. Phase One — Planninr Phase In the planning phase, we gain an understanding of your operations, evaluate the reliability of your internal controls, and identify any issues that may have audit significance. This phase includes reviewing the internal controls and risk assessment, including computer programs and computer technology security. Upon review ofthe system, the following additional planning procedures will be performed as required by all the Statements on Auditing Standards issued by the American Institute of Certified Public Accountants and Government Auditing Standards: Document understanding of the external environment. Document understanding of the internal environment. Assess the control structure, including identification of applicable laws and regulations subject to test work. Identify potential accounting, auditing, and reporting problems. Estimate likelihood of material misstatement and establish benchmark for planning materiality. Perform preliminary analytical review procedures. Identify the accounting systems to be documented and evaluated. Assess control and inherent risks. Perform tests of controls using non -statistical sampling. Finalize audit approach. Conduct planning meetings with the City Manager, Director of Finance, and other key Finance Personnel. Coordinate timing of the audit effort. Schedule and conduct weekly status meetings with the Director of Finance. Discuss client assistance with City staff. Finalize time budget, staff plan, and work schedules. E — Specific Audit Approach 10 A UDIT PHILOSOPHYAND SPECIFIC AUDIT APPROACH (CONTINUED) Phase Two — Fieldwork Phase The testing phase of the audit encompasses both tests of controls and substantive tests. Tests of Controls - Test compliance with established control procedures by ascertaining that the significant controls within each system are functioning as described. Particular attention is placed on controls over the processing of information related to the major areas of audit concern. Also, we will test for compliance with applicable laws, regulations, and governmental policies. Substantive Tests - These tests are designed to provide reasonable assurance as to the validity of the information produced by the accounting system, which appears on the financial statements. The extent of our detailed substantive work will be designed by the results of our tests of controls. Phase Three — Wrap-up Phase The wrap-up phase includes overall review and evaluation of the audit results. This consists primarily of- Review £ Review for contingencies Review for subsequent events Evaluate overall audit results Evaluate overall reasonableness of the financial statements using comparative analysis and development of expectations (analytical procedures) Issue and submit to the City Manager and Director of Finance our management letter reporting on internal control and legal compliance, including any management weaknesses observed, and responses by the affected department heads. Meet and report to the City Manager and Director of Finance to review and discuss the City's financial statements before final presentation to the City's Mayor and Commissioners. The audit documentation for this engagement is the property of Hood & Associates CPAs, P.C. and constitutes confidential information. However, pursuant to authority given by law or regulation, we may be requested to make certain audit documentation available to a Cognizant or Oversight Agency or its designee, a federal agency providing direct or indirect funding, or the U.S. General Accounting Office for purposes of a quality review of the audit, to resolve audit findings, or to carry out oversight responsibilities. We will notify you of any such request. If requested, access to such audit documentation will be provided under the supervision of Hood & Associates CPAs, P.C. personnel. E — Specific Audit Approach 11 AUDIT PHILOSOPHYAND SPECIFICAUDITAPPROACH (CONTINUED) Compliance with Changing Regulatory Requirements Hood & Associates CPAs, P.C. is dedicated to insuring that our clients are in full compliance with changing regulatory requirements and other related developments. Our firm has an extensive library of Practitioner Publishing Company (PPC) reference guides specific to governmental accounting and auditing. In addition, we maintain a physical library and have access to online reference materials from Government Accounting Office, the American Institute of Certified Public Accountants, Government Accounting Standards Board and other regulatory bodies, which includes professional standards, official pronouncements, audit guides and reference books specific to governmental accounting and auditing. We are a member of the AICPA's Governmental Audit Quality Center, which allows us access to vast resources and technical expertise which are usually available only from large national firms. Importantly, each organization keeps us up to date on changing regulatory requirements, new pronouncements and compliance rules, emerging issues, audit alerts, etc. Policies and Programs Established to Ensure Client Satisfaction ➢ During the course of our audits, we will conduct - o An entrance conference with the City's Director of Finance, the week of January 6, 2023 (or mutually agreed date). o Weekly progress conferences with City's Director of Finance and other appropriate City staff, and o An exit conference with the City's Director of Finance the week of April 24, 2023 (or mutually agreed date). ➢ We strive to meet the requested target due dates; however, the success of doing so is dependent on the full cooperation and timely delivery of the requested financial data to the auditor by the client. If circumstances beyond our control are encountered, which could cause a delay in meeting the required deadlines, we discuss this during our weekly conferences. If additional time is required to complete the audit, we will notify you in writing. ➢ If we are engaged to audit the City, your management and administrative personnel will have an opportunity for a continuous, year-round dialogue with our governmental specialists. We would suggest that your personnel inform us of potential or existing problems, and we would draw upon our experience with governmental entities to offer advice and counsel in regard to those problems. We would also provide the City with information about and access to the extensive materials we develop each year for governmental entities. Fees for consultation requiring visits to client offices or substantial research would be agreed upon in advance, and at the same rates established in the schedule of fees. E — Specific Audit Approach 12 A UDIT PHILOSOPHYAND SPECIFIC A UDIT APPROACH (CONTINUED) AUDITMANAGEMENTAPPROACHAND SUPERVISION The engagement manager reviews all areas completed by engagement staff as the work is performed, and reviews predetermined areas of audit risk. As the audit progresses, the engagement manager will provide the City staff with weekly status reports to clarify progress on completion of the audit. Also, we will meet weekly to resolve technical issues and to monitor audit performance and compliance. During the final week of fieldwork both the engagement partner and the concurring review partner will perform a detailed analysis and review of the financial statements, footnote disclosures and in -relation -to reports. Draft copies of the basic financial statements required communications, Single Audit report (if required), and compliance reports will be provided to Management during the final week of fieldwork. The engagement partner will review the Annual Comprehensive Financial Report and complete the Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting checklist. Before issuance, our administrative staff will review the report for clarity, grammar, readability, and mechanical accuracy. OTHER VALUE ADDED BEAWFITSAND SERVICES You should expect much more from your auditor than professional auditing services. We want to be your auditor and teammate and here are some reasons why the City should choose Hood & Associates CPAs, P.C. over other responding firms: On-time Services and Governmental Experience • Our mission is to provide you with on-time and outstanding assurance services with the personal attention you desire. • We can utilize our extensive experience and knowledge in governmental accounting and auditing and will tailor that experience to the City. Familiarity with Government Operations • Members of our staff have been engaged as accounting consultants with other local governments and are very familiar with the day-to-day operations of the finance department and reporting to members of governance. • We stay up to date with governmental accounting and auditing standards updates and can provide assistance with the application and implementation of new accounting and auditing guidelines. • We have provided consulting services to governmental entities to optimize opportunities for economic development. These opportunities have included exploring public financing methods such as tax increment financing, neighborhood improvement districts, transportation development districts, and tax abatement programs. Interlocal Cooperation • Our experience in the governmental arena has provided us with extensive background in various methods that local government can partner with private industry, other local governments, educational institutions, financial institutions, and others to better serve the local community. E — Specific Audit Approach 13 AUDIT PHILOSOPHYAND SPECIFICAUDIT APPROACH (CONTINUED) OTHER VALUE ADDED BENEFITSAND SERVICES (continued) Innovative Ways to Improve Operations and Controls • We have the expertise and creativity to assist the City in meeting its financial challenges and to suggest innovative ways to improve operations at a reduced cost and to assure transparent accountability of its financial affairs. • We have communicated to other governments recommendations for improvement in areas such as, cash management, compliance with grant regulations, segregation of duties, physical inventory of capital assets, investment policy, accounting and procedures manual, and various other recommendations to improve operations and controls. Open Mentality to Share Ideas and Information • We have an open mentality to mutually share ideas and work toward a common solution to problems and issues. • We are willing to discretely share information we have learned from our extensive governmental experience to the management of the City which may provide opportunities for improvement to accounting policies and procedures. We are also willing to listen and learn from the management of the City as a means to broaden our governmental knowledge and experience. AUDIT PROCESS— YOUR CHOICE The audit process does not have to be a stressful and time-consuming process. We understand that you probably would rather not interrupt your daily activities to deal with auditors. By planning and preparing we can help the audit process move efficiently and smoothly. There are several items you can focus on to help move the audit process along and help us get in and out without too many disturbances. In fact, with your and our planning, preparation, and today's technology, we are able to approach our audits in several ways: 1) Spend most of the audit time at your office and the remainder at our office, or 2) Spend a little of the audit time at your office and the remainder of time at our office. 3) Do our best with your help, to communicate exactly what we need from you as auditors and when we need it. Then reach a reasonable approach to achieve this most important part of a smooth and timely audit. With today's technology and with your use of our secure client portals, we each can work remotely to achieve results. We can and will be at your office as often as you wish. If selected to be your auditor, we will discuss with you the approach you would like us to take. We will do everything to make your audit process as smooth and efficient as possible under the circumstances — We look forward to and would be honored to be the City's auditor. E — Specific Audit Approach 14 SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENT ENTITIES As previously noted, our firm has substantial experience in providing professional services to cities and other local governmental entities. The following is a list of some of our governmental engagements that are similar to the proposed engagement with the City: Client: City of Emporia, Kansas Services: ACFR, Audit of the financial statements, including Single Audit and Firefighter's Relief Association for the years ended December 31, 2019 to present. Annual Professional Hours: 220 Personnel: Engagement Partner — Michael Keenan, CPA Engagement Senior Manager— Warren Herrick, CPA Staff—Alex Wagner Client Contact: Janet Harrouff, Director of Administrative Services. (913) 343-4286 s, CPA Client: City of Leavenworth, Kansas Services: ACFR, Audit of the financial statements, including Single Audit for the year ended December 31, 2019 to present. Annual Professional Hours: 340 Personnel: Engagement Partner — Michael Keenan, CPA Engagement Senior Manager — Warren Herrick, CPA Client Contact: Roberta Beier, Financial Director (913) 684-0346 Client: City of Joplin, Missouri Services: ACFR, Audit of the basic financial statements, including audit of the Firemen and Policemen Pension Fund, and Single Audit for the years ended October 31, 2004 to present. Annual Professional Hours: 600 Personnel: Engagement Partner — Michael Keenan, CPA Engagement Manager — Warren Herrick, CPA Staff— Alex Wagner Client Contact: Leslie Haase, Director of Finance (417) 624-0820 F- Similar Engagements with other Governmental Entities 15 Client: The Police Department of Kansas City, Missouri Services: Audit of financial statements and Single Audit for the years ended April 30, 2008 to present. Annual Professional Hours: 290 Personnel: Engagement Partner — Michael Keenan, CPA Engagement Senior Manager — Warren Herrick, CPA Client Contact: Margaret Harman, Accounting Supervisor (816) 234-5354 Client: City of St. Joseph, Missouri Services: ACFR, Audit of the financial staternents, including Single Audit, and the City of St. Joseph, Missouri Police and Pension Fund for the year ended June 30, 2021. Annual Professional Hours: 520 Personnel: Engagement Partner — Michael Keenan, CPA Engagement Senior Manager — Warren Herrick, CPA Staff— Alex Wagner Client Contact: Tom Mahoney, Assistant Director Finance (816) 271-4759 F- Similar Engagements with other Governmental Entities 16 APPENDIX A RESPONDENT CERTIFIES The proposer certifies it can and will provide and make available, at a minimum, all services set forth in Section II, Nature of Services Required. Signature of Official: %�re�uc�P�eeiuu' Name (printed): Michael Keenan Title: Engagement Partner Firm: Hood & Associates CPAs, P.C. Date: December 30, 2022 17 APPENDIX 8 RESPONDENT CERTIFIES A. Proposer certifies that it is willing and able to comply with State of Kansas laws with respect to foreign (non -state of Kansas) corporations. B. Proposer certifies that it is willing and able to obtain an errors and omissions insurance policy providing a prudent amount of coverage for the willful or negligent acts, or omissions of any officers, employees or agents thereof. C. Proposer certifies that it will not delegate or subcontract its responsibilities under an agreement without the express prior permission of the City of Salina. D. Proposer certifies that all information provided by it in connection with this submission is true and accurate. E. Proposer certifies that it understands it is required to adhere to the Contract requirements set forth in this RFP and all of the requirements of the RFP will be an attachment to the contract. Signature of Official:���"�' Name (printed): Michael Keenan Title: Engagement Partner Firm: Hood & Associates CPAs, P.C. Date: December 30, 2022 MURETC PALL November 16.2020 Muret CPA, PLLC 3326 F. 2711, Place Tulsa, OK 74114 Phone: 9118-301-1100 Fax: 918-517-3000 wwwanuretcpa_com Tax, Accounting & Financial Services Report on the Fly's System of Quality Control To the Partners of Hood & Associates, CPAs. P.C. and the Peer Rewleww- Committee of the Cil lahoma Society of C:el-tified Public accountants We have reviewed the system of quality control for the accounting and auditing practice of Hood & Associates: CPAs, P.C. in effect for the Near ended December 31, 2019_ Our peer review was conducted in accordance with the Stmdards for Performing and Reporting on Peer Rmiew;^s established by the Peer Review Board of the Anmeric.in Institute of Certified Public Accountants (Standards)_ A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as described in the Standards may be found at u%,%;,.aicpa.orgfprstmimary. The summary also includes an explanation of how engagements identified as not performed or reported in conformity with applicable professional standards. if any, are evaluated by a peer reviewer to determine a peer rmriew rating_ Firm's Responsibility The firm is responsible for designing a system of quality control and complying with it to provide the fruit with reasonable assurance of performing and reporting in conformity %%ith applicable professional standards in all material respects. The fain is also responsible for evaluating actions to promptly remediate engagements deemed as not performed or reported in conformity with professional standards, when appropriate. and for remediating wealmesses in its system of quality control, if any. Peer Reileww•er's Responsibility Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance therewith based on our review. Required Selections and Considerations Engagements selected for review inchrded engagements performed under Government Andiffng Standards and an audit of an employee benefit plan As a part of our peer review, we considered reviews by regulatory entities as communicated by the firm, if applicable, in determining the nature and extent of our procedures. 19 Opinion In our opinion, the system of quality control for the accounting and auditing practice of Hood & Associates, CPAs. P.C. in effect for the year ended December 31. 2019, has been Suitably designed and complied with to provide the finer with reasonable assurance of performing and reporting in conformity with applicable professional stmduds in -,ffl material respects. Firms can receive a rating of pass, pass with dq.fIdency(A?s) or fail. Hood & Associates, CPAs. P.C. has received a peer review rating ofpass- Sincerely, Muret CPA, PLLC 20 MICHAEL D. KEENAN, CPA Engagement Partner Hood & Associates CPAs, P.C. Michael D. Keenan, CPA, will serve as the Engagement Partner. Mr. Keenan graduated from the University of North Carolina, Asheville in 1990 with a B.S. in Accounting. He has worked in public accounting since 1990 and is licensed as a Certified Public Accountant in the States of Kansas, Missouri, and North Carolina. He is a member of the Government Finance Officers Association Special Review Committee, the Eastern Kansas Government Finance Officers Association, and the Government Finance Officers Association of Missouri. Cross-section of Professional Experience • Audit of the City of St. Joseph, Missouri • Audit of the City of Joplin, Missouri • Audit of the City of Monett, Missouri • Audit of the City of Rolla, Missouri • Audit of the City of Branson, Missouri • Audit of the City of Joplin, Missouri • Audit of the City of Parkville, Missouri • Audit of the City of St Joseph, Missouri • Audit of the City of Osage Beach, Kansas • Audit of City of Grandview, Missouri • Audit of Leavenworth, Kansas • Audit of Shawnee, Kansas • Audit of the City of Emporia, Kansas • Audit of the Clay County Public Health Center • Audit of Mid -Continent Public Library • Audit of The Police Department of Kansas City, Missouri • Audit of the Kansas Lottery Commission • Audits of Buchanan County, Missouri; Cass County, Missouri; Clay County Missouri; Shawnee County, Kansas; Wyandotte County, Kansas; Unified Government of Wyandotte County/Kansas City, Kansas; and Leavenworth County, Kansas • Audit of Leavenworth County Fire District No. 1 • Audit of the Kansas Public Employees Retirement System (KPERS) 21 Continuing Education - MICHAEL D. KEENAN, CPA Engagement Partner Hood & Associates CPAs, P.C. 2019 2020 2021 *CPE total: 40 40 44 *GAS total: 24 34 40 2019 Pre -Conference Assurance and Audit Practice Leaders Mtg Successfully Grow Your Outsourced Acc Practice in Changing World Email Marketing - Best Practices Using Marketing Automation Day 1 General Session Proposal Transformation - Engaging Buyers and Converting More Wins Creating an Advisory Practice in Your Firm Government Auditing Standards - Navigate through the New Guidance Leading Under Stress Creating a Learning Culture within Your Firm Closing Session - Keynote Speaker Specialized Accounting of Governmental Entities Ethics: General Standards and Acts Discreditable GASB Pension Standards Overview Governmental Financial Reporting 2020 GAO Standards - Yellow Book Audits of State and Local Governments Accounting and Auditing Issues Related to COVID-19 (Coronavirus) Overview of Governmental Accounting Ethics: General Standards and Acts Discreditable Revenue Recognition - Fundamentals 2021 Independence, Integrity, and Objectivity PPC's Guide to HUD Audits Impact of New Auditor Reporting on Governments Leases — A Whole New World Provider Relief Funds and You Trends in Governmental Accounting Grants Management *CPE = Continuing Professional Education *GAS = Government Auditing Standard 22 WARREN HERRICK, CPA Senior/Manager Hood & Associates CPAs, P.C. Warren Herrick, CPA, will serve as the Senior/Manager. Mr. Herrick graduated from San Diego State University in 1988 with a Bachelor of Science in Accountancy. He is licensed as a Certified Public Accountant in the States of Missouri and California, and he is applying for his permit to practice in Kansas. He is a member of the American Institute of Certified Public Accountants (AICPA) and the California Society of Certified Public Accountants. Mr. Herrick has 2 years' experience with Hood & Associates CPAs and 8 years with other firms. Cross-section of Professional Experience • Audit of Specialty Industries of St. Joseph • Audit of City of Leavenworth, Kansas • Audit of Progressive Community Services • Audit of Truman's Marketplace Community Improvement District • Audit of Truman's Marketplace Transportation Development District • Audit of the City of Grandview, Missouri • Audit of the City of Joplin, Missouri • Audit of the City of St. Joseph, Missouri • Audit of Clay County, Missouri • Audit of City of Monett, Missouri • Audit of City of Parkville, Missouri • Audit of Clay County Public Health Center • Eight years as an Audit Manager, performing financial statement audits, Single Audits, and reviews for governmental and not-for-profit organizations, pension plans and entities in various industries while working for another firm. 23 Continuing Education - WARREN HERRICK, CPA Senior/Manager Hood & Associates CPAs, P.C. 2019 2020 2021 *CPE total: 24 60 41 *GAS total: 0 24 21 2019 199A Deduction: Complete Review Webcast Compilations and Reviews: Risks, Procedures and Fraud Webcast Tax Research Skills 2020 Accounting: FASB Updates for 2020 Government Auditing — Green Book: 1. The Control Environment Government Auditing — Green Book: 2. Risk Assessment and Control Activities Governmental Auditing: Course 1 — Fundamental Principles for Government Auditing A Complete Guide to Yellow Book Financial Statement Fraud Ethics for California Auditing: The Compilation and Review Standards: SSARS No. 21-25 2021 Yellow Book and Single Audit Deficiencies PPC's Guide to Preparing Governmental Financial Statements Government Accounting Principles Accounting and Financial Reporting for PPP Loans Ethics for Missouri Auditing: The Latest Developments - 2021 *CPE = Continuing Professional Education *GAS = Government Auditing Standards 24 CITY OF SALINA, KANSAS SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE YEAR ENDED DECEMBER 31, 2022 AND SUBSEQUENT YEAR'S FINANCIAL STATEMENTS APPENDIX C Number of Total Staff Assigned Hours Rate Price Partners 22 $ 260 $ 5,720 Managers 48 $ 220 10,560 Supervisory staff 104 $ 180 18,720 Staff 180 $ 140 25,200 Subtotal Professional Fees 60,200 Meal, lodging and transportation 1,555 Other (reproduction and printing) 145 Total all-inclusine maximum price for 2022 audit, including STAR Bond audit, but excluding Single Audit) $ 61,900 Price per major program for Single Audit (if necessary) First major program $ 4,500 Each additional major program $ 3,000 Maximum percentage increase for future contract years (all costs) 2023 Audit 5% 2024 Audit 5% Hourly fees fo consultation (by staff level) $ 170 C - Cost Data