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4.05 4 4.5 SERVICES\RFP—Accept—BST-Audit Cash Receipts&Disbursements for Years Ending 2019-23-9-9-19 RESOLUTION AUTHORIZING ENGAGEMENT OF BST & CO., CPAS TO PROVIDE PROFESSIONAL AUDITING SERVICES FOR FISCAL YEARS ENDING DECEMBER 31ST, 2019 - 2023 RESOLUTION NO.: ,2019 INTRODUCED BY: WHO MOVED ITS ADOPTION SECONDED BY: WHEREAS, the Town of Queensbury's Purchasing Agent requested proposals for professional auditing services for the years ending 2019 -2023, and WHEREAS, the Purchasing Agent and Town Budget Officer received, evaluated and ranked the three (3) received proposals and have recommended that the Town Board accept the lowest submitted proposal of BST& Co., CPAs, LLP, NOW, THEREFORE, BE IT RESOLVED, that the Queensbury Town Board hereby authorizes engagement of BST & Co., CPAs, LLP in accordance with BST's September 3, 2019 Proposal to provide professional auditing services to the Town of Queensbury for the years ending December 31, 2019 - 2023 at a cost per year not to exceed: • $32,500—2019 • $33,250—2020 • $34,000—2021 • $34,750—2022 • $35,500—2023 to be paid for from the appropriate account(s) as will be determined by the Town Budget Officer, and BE IT FURTHER, RESOLVED, that the Town Board further authorizes and directs the Town Supervisor to sign any needed documentation and the Town Supervisor, Town Budget Officer and/or Town Purchasing Agent to take any and all action necessary to effectuate the terms of this Resolution. Duly adopted this 9th day of September, 2019, by the following vote: AYES : NOES : ABSENT: FM ACCOUNTING TAX ADVISORY -.:: 4 x } Proposal to Provide Professional Auditing cif , Services: i~ Town of Queensbury, New � --1 :t. _., ,,, .....,,, ,-,, , .-_,.. - York . ,_ __._,-,..,,„.., _ „,,, _..,, .....„. ,--. ,... _.......„,, r __ , „..,_,,,,„.., ,,,,,,...„ „., , _ . :„......., _. ., „.„,,_ 1 I I 1 4 1 * September 3, 2019 Presented by: Paul L. Goetz, CPA, Partner ' 26 Computer Drive West Town LA Alban E'�'ilsbury (518) 459-6700NewYork 12205 •-' . pgoetz@bstco.com www.bstco.com Table of Contents Transmittal Letter Detailed Proposal Independence 2 License to Practice in New York State 2 Firm Qualifications and Experience 2 Commitment to Governmental and Municipal Accounting 3 Partner, Supervisory and Staff Qualifications and Experience 5 Similar Engagements with Other Governmental Entities 6 Similar Engagements and References that Speak to Our Qualifications 8 Specific Audit Approach 9 Statement and Schedules to be Prepared by Town Staff 14 Tentative Schedule of Completion of Audits 14 Report Format 15 Total All-Inclusive Maximum Price 15 Rates for Additional Professional Services 15 Payment Terms 15 Appendices 1. Detailed Engagement Team Resumes 2. Peer Review Report 3. BST Security Overview 4. Statements and Schedules to be Prepared by the Town 5. Sample Reports ID ACCCUMIN' TAX AiXASCAY • F.. - _ ACCOUNTING TAX ADVISORY September 3, 2019 Town of Queensbury, New York Attn: Barbara Tierney, Budget Officer 742 Bay Road Queensbury, New York 12084 Dear Ms. Tierney: BST & Co. CPAs, LLP (BST) is pleased to submit this proposal to provide professional auditing services for the Town of Queensbury, New York (Town) for each of the years ending December 31, 2019, 2020, 2021, 2022 and 2023. BST is a locally owned and operated premiere professional services firm that has a proud history serving governmental organizations throughout New York State. Our prior experience with the Town and other governmental organizations similar to the Town, coupled with the qualifications and experience of our professionals, makes BST highly qualified to provide the auditing and financial compliance services required. Additionally, we have the experience and ability to deliver high quality, value-added services to the Town beyond the required audit and financial services. We believe that BST brings the following unique advantages to the Town: • Locally based firm leadership and office of 100+personnel; • Responsive year-round professional service; • Unmatched technical resources, including on-staff retired State Comptroller and Local Government Finance personnel; • An engagement team that works with you, not against; • Deep understanding of your needs through professional affiliations, including the New York Conference of Mayors (NYCOM)and Government Finance Officers Association (GFOA); • We are teachers; BST personnel are regular presenters at the aforementioned professional associations. As a partner in the Firm, I am authorized to make representations and bind the Firm to statements made within this proposal. We are excited for the opportunity to continue to serve the Town. Our attached proposal describes our extensive experience with government and municipal organizations,our practice, our people, our reputation for quality services, and how we will provide such to the Town. Please contact me with any questions about our firm, our proposal, or to schedule an oral presentation. Very truly yours, BST&Co. CPAs, LLP Paul L. Goetz, Partner 26 Co,Ipuce-Dr ae A bjrv.r.f<12205 T 518459 67CD F 518 459 2492 rt:,rvn I. �uori iba.3v,E N v 'c,rk.ddY 2 e .. �` �e. ACCOUNTING TAX ADVISORY t ° a Executive Summary Throughout this proposal, we identify the many reasons why we feel that the strengths of BST create the optimal model to provide the auditing and financial compliance itk X services required by the Town. We feel the most important of these strengths are as g follows: Client Service- BST is not focused on volume but rather servicing quality clientele that are interested in doing things the right way. A high-quality audit takes time and highly skilled professionals. While many firms can "check the box" for your compliance needs, our objective is to become your trusted advisor. What that means to the Town is the highest level of client service that can be expected from a professional services organization. BST audit clients frequently seek our guidance on various municipal affairs, from competitive procurement, to internal controls and everything in between. We are highly responsive to our client's needs and we strongly encourage you to reach out to our references for input. • The Town is important to BST. As part of our Governmental and Municipal Services Group, you will be serviced by dedicated professionals who will exceed your expectations, provide the Town with the ultimate client service experience,and present additional value that goes beyond the traditional financial statement audit. ® BST has a significant history providing auditing and accounting services to New York State counties, municipalities, and other various governmental entities. The members of our Governmental and Municipal Services Group know the complex issues, regulations, and reporting requirements confronting New York State local governments. We encourage you to contact the references provided relating to their experiences with BST. • Government is a strategic industry for BST. BST's governmental practice represents a significant portion of our practice. Our public-sector experience includes an extensive array of New York State counties, cities, towns, villages, authorities and other local governments. Our firm is a recognized leader in providing services to the public sector in the Capital District and throughout New York State. • Your BST service team. Your proposed engagement partner, Paul L.Goetz, serves as the leader of the firm's A&A Department and the lead partner on some of BST's largest governmental audit and accounting engagements. Paul will ensure the Town is provided with our most experienced professionals. Given the importance of the Town to BST, we are also placing Brendan K. Kennedy, a partner within our Government& Municipal Services Group, on the proposed engagement to ensure your audit needs are met on a timely basis. Both Paul and Brendan serve as Special Reviewers for the GFOA's Certificate of Excellence in Financial Reporting program. Added value beyond the audit. BST has continually differentiated our firm from competitors by providing financial analysis and operational observations in addition to the basic audit services. While many firms provide audit services, our value-added input has helped governmental organizations succeed in times when limited financial resources have challenged service delivery and compliance with laws and regulations. The Town needs a professional 111111 audit and advisory firm that will help develop revenue generating ideas and identify inefficiencies in operational processes so that you can maintain or enhance service delivery to your constituents. We want to be your trusted service provider and afford you that added value beyond the audit. 1IA Proposal to Serve the Town of Queensbury, New York a �, —ACCOUNTING TAX ADVISORY • Touch points with your regulators.Through our participation in professional associations, and years of experience, BST has established strong relationships with regulators such as the New York State Office of the State Comptroller(OSC). In addition, BST employs two retired OSC professionals, who literally"wrote-the-book"when it comes to OSC's accounting and reporting manual. BST has assisted our government clients with the Annual Financial Reporting Update Document (AFRUD or AUD), including resolution of examiner inquiries, responses to OSC audits, and responses to inclusion on the OSC's fiscal stress monitoring list. • Communications. We at BST believe in frequent communication not only during the audit but throughout the year. Our mission is to proactively work with management and those charged with governance to ensure concerns are addressed before they become problems. If we do identify a problem, we will immediately discuss with management and our audit liaison. alleh BST has successful, relevant experience in providing similar audit services to local government organizations throughout New York State. In the following paragraphs,we demonstrate our understanding of the scope of services required by the Town and that our Firm and its professionals have the competence and capacity to meet the needs of the Town. GAO _- Independence 'u°r^� BST is independent of the Town as defined by generally accepted auditing standards and Government Auditing Standards. License to Practice in New York State The Firm and all proposed key professional staff are licensed to practice as Certified Public Accountants in the State of New York. Firm Qualifications and Experience BST is a regional certified public accounting firm, registered to do business in New York State, with 20 partners and a total staff of over 100. With roots tracing back to 1944, BST is recognized as one of the largest accounting and consulting firms in upstate New York. The Firm's headquarters are in Albany, New York. The Firm also maintains an office location in New York City for the convenience of our metro New York clientele. All work on the Town's engagement will be performed from our Albany, New York office. All members of the proposed engagement team are employed on a full-time basis. The firm also employs Senior Government Advisors on a part-time basis, who consist of retired New York State Comptroller's Office personnel and retired municipal finance officials. Such advisors will be available to support both the proposed audit engagement team and the Town. 2 I A Proposal to Serve the Town of Queensbury, New York _ f s ACCOUNTING TAX ADVISORY BST is a full-service firm providing traditional services such as auditing, accounting and tax. In addition, we provide additional services consisting of: • Advisory - profitability enhancement reviews, business succession planning, business financing, internal controls, mergers and acquisitions and operational reviews, and transaction advisory services. • Employee Benefit Plan Administration -third-party administration, benefit plan design. • Valuation -business valuation, economic damage analysis and insurance claim services. • Fraud and Forensic - forensic accounting and fraud, fraud and financial investigations, fraud deterrence, corporate governance services, fraud awareness and deterrence training, expert testimony,fraud hotline, domestic relations services, divorce tools and information. • Wealth Management - estate planning, personal retirement planning, investment management, and risk management. • Outsourcing-outsourced CFO, Comptrollership&Accounting Services, and Human Resources Our philosophy is guided by a common-sense approach utilizing good business judgment. We seek to understand the unique features and economies of our clients. Among the BST resources you can count on: > Professionals who are highly skilled in working with New York State local governments; > Continuous interaction with your management throughout the year. We get involved...and stay involved; ➢ Specialists who can bring forward-looking methods of planning and savings to bear on the Town's financial situation; ➢ Prompt and responsive service. Your needs will be met with a sense of urgency; ➢ A strong and experienced service team supported by top talent in the Firm, and > An outstanding professional track record. We know and understand local government. The foundation of our philosophy includes ongoing communication with our client's financial and operational management team. Our objective is not growth for growth sake, but to work with those organizations that value the highly skilled professionals and additional value they bring to each engagement. Therefore, our goal is to develop a close, long-term relationship with our clients. To strengthen this relationship,we stress continuity of the professionals servicing your account. Staff members assigned to the engagement will operate as a team in providing the required professional services. The primary mission of our Firm, since inception, has always been helping our clients succeed. As business, technology, human resource, and financial climates continue to become more sophisticated and complex, being able to help our clients succeed has meant delivering services targeted to each client's critical needs and industry niche. Commitment to Governmental and Municipal Accounting rOur Governmental and Municipal Services Group is comprised of over 15 staff, all of whom have strong relevant experience and are specially trained to offer a wide range of services from traditional auditing, accounting, and financial consulting to highly diverse and specialized services that meet the needs of our governmental and municipal clients. As opposed to many CPA firms, our proposed service team is not involved with income tax services. Accordingly, the team is available year-round to service the needs of our governmental clients. This service team, as further detailed in this proposal, is comprised of experts and financial specialists in governmental auditing and accounting. 3 1 A Proposal to Serve the Town of Queensbury, New York . ,- , - ..:,,----,J.--,...,,,,., ‘:.-,1,, -,,,,r,s7.-c .,-... .,..,:,:',...--..,,,,,..,,, -ACCOUNTING TAX ADVISORY Our Firm offers in-depth experience and serves a variety of governmental clients, including counties,cities, towns, villages, federal departments and agencies, New York State departments, government funds and programs, fire districts, and authorities (industrial development, water, electric, solid waste, and local development and special purpose corporations). Our services include: • Audits of general purpose financial statements • Program Audits and Single Audits in accordance with OMB Circular A-133/Uniform Guidance • Assistance with GASB accounting standard implementations • Assistance with Certificate of Achievement for Excellence in Financial Reporting Program(CAFR) • Budget reviews • Assistance with preparation of New York State Annual Financial Report Update Documents(AUD) • Risk assessments and analysis • Internal audit plan development and implementation • System and internal control reviews • Utility rate revision studies • Computer needs assessments, conversion plans and implementation • Fraud, defalcation, and malfeasance research and documentation • Assessment of employee benefits alternatives Professional Affiliations AICPA Audit Quality Centers BST is a member of the AICPA Governmental Audit Quality Center (GAQC) . 441,...1) AICPA Membership in the Center demonstrates our Firm's commitment to audit quality in the critical areas of governmental accounting. The GAQC serves as a comprehensive resource provider for member firms in the performance of governmental audits and provides the opportunity to network and exchange information with others within the community of member firms. Government Finance Officers Association The Firm is a member of the Government Finance Officers Association(GFOA). Membership Gin the Association demonstrates our Firm's commitment to quality in governmental financial reporting. Paul Goetz and Brendan Kennedy serve as financial statement reviewers for the F GFOA's Certificate of Excellence in Financial Reporting program. In addition, BST professionals are frequent instructors at GFOA events, including the Annual Meeting, and GFOA Finance/Accounting School. Brendan Kennedy currently serves as an at-large Board member of the New York State GFOA. New York Conference of Mayors and Municipal Finance Officers The Firm is a member of the New York Conference of Mayors and Municipal Finance Officers (NYCOM). NYCOM's mission is to serve as: 1) A powerful advocate for city and village governments and their taxpayers before the state's Legislative, Executive and Judicial branches of government; 2) A readily accessible source of practical information touching upon every area of municipal activity; and 3) The preeminent provider of training for local government officials. BST is represented at both NYCOM's annual meeting in the spring and training school in the fall. In addition, BST is periodically asked to present at NYCOM events. 4 IA Proposal to Serve the Town of Queensbury, New York ACCOUNTING TAX ADVISORY RSM US Alliance RSM US Alliance BST & Co. CPAs, LLP has been a proud member of RSM US Alliance since 1997. RSM US Alliance is a premier affiliation of independent accounting and consulting firms in the RSM United States, with more than 75 members in over 38 states, the Cayman Islands and Puerto Rico. This affiliation gives us access to a full range of national and international capabilities. As a member of RSM US Alliance, BST& Co. CPAs, LLP has access to resources and services RSM US LLP provides its own clients. RSM US LLP is the leading provider of audit, tax and consulting services focused on the middle market, with more than 9,000 people in 86 offices nationwide. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 38,000 people in over 120 countries. RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSMTM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP. Partner. Supervisory and Staff Qualifications and Experience Excellence in service requires stringent attention to a host of quality objectives, not the least of which is the hiring,training, and supervision of our professional advisors. It also involves a high level of quality controls. These include, among other factors, exhaustive AICPA r 1 3 sanctioned peer review procedures and thorough documentation support in all areas of service. The rewards of such a strong commitment to quality and excellence in client service are many. Among them is a high standing among our peers and, most importantly, a satisfied clientele and high rate of client retention. Our professional standards are high. All of our professional staff members have a minimum of a bachelor's degree in accounting from a reputable college or university. Our commitment to quality is also evident in the Firm's policy of continuing professional education (CPE). Each of our professionals must receive a minimum of at least 40 hours of CPE annually, which exceeds the requirements of the AICPA. Focused training in specialized areas is also emphasized. All participants in the Town engagement meet the required continuing professional education requirements of auditing standards generally accepted in the United States of America as defined by the American Institute of Certified Public Accountants and as described in Government Auditing Standards issued by the U.S. Government Accountability Office(GAO). 51 A Proposal to Serve the Town of Queensbury, New York h L ACCOUNTING TAX ADVISORY ,•� _�w„- Our proposed engagement team to serve the Town is described below: Engagement Partner-Paul L. Goetz, CPA will be the Town's primary point of contact and will oversee all services provided and ensure that they are delivered in a timely and efficient manner. He will be responsible for all matters concerning accounting policy and practice, participate in the planning phases of our engagement, review all working papers and reports prepared by the field staff, and attend meetings with management. Paul will be available to consult and review on any auditing and/or accounting questions that may arise. He will participate in a final review of all reports delivered and present final reports to the Town Board. Paul's professional experience includes significant time spent with Cities, Towns and public authorities. Paul will bring his municipal experience to the table while performing the technical partner reviews of BST's audit plan and deliverables. Technical Partner-Brendan Kennedy, CPA is an industry recognized government professional and will be available to assist the proposed engagement team and the Town on any technical matters or issues requiring consultation on. In March 2015, Brendan was elected to the Board of Directors of the New York State Government Finance Officers Association, which consists of more than 1,250 public and private sector government finance professionals. In addition, Brendan is actively involved in the New York Conference of Mayors(NYCOM), and New York State Society of Certified Public Accountants'Government Audit and Accounting Committee. Brendan's technical expertise will be accretive to the Town. Engagement Senior Manager-Jonathan B. Gibbs, CPA will directly supervise the field staff assigned to the Town's audit engagement, the engagement team in the field, and execute the audit plan. Jon brings 7+years of municipal audit experience to the engagement. Jon's experience includes managing municipal audits similar to the size and scope of the Town, including the Towns of Ramapo, Colonie and Halfmoon and the Cities of Rye, Oneonta and Saratoga Springs. In addition to the above key personnel, we will utilize members of our professional team throughout the course of our engagement. The additional team members will be supervised, and their work will be reviewed by the partners and manager described above. All staff members assigned to the engagement will be drawn from the pool of professionals within the Governmental and Municipal Services Group assuring the Town will receive service from experienced personnel on all aspects of the engagement. Similar Engagements with Other Governmental Entities Cly g finpproximately Newcurrent York State provide countiesauditin, citiesand, townsrelated, villagesancial andconsulting other governmentalservicestoa agencies. The 100 a+ We following represents a sample of our current or recent governmental engagements: Counties Albany County* Saratoga County* Fulton County* Essex County* Montgomery County* Hamilton County Cities City of Saratoga Springs* City of Long Beach City of Troy* City of Rye City of Oneonta* City of Mechanicville City of Plattsburgh 61 A Proposal to Serve the Town of Queensbury, New York ACCOUNTING TAX ADVISORY Towns Town of Colonie* Town of Massena- Electric Department Town of Green Island Town of Ballston Town of Halfmoon* Town of Saratoga Town of Queensbury Town of Bethlehem* Town of Southampton- Community Preservation Fund Villages Village of Akron Village of Old Westbury Village of Arcade Village of Penn Yan* Village of Bath Village of Philadelphia* Village of Bergen Village of Penn Yan Village of Churchville Village of Ossining* Village of Dobbs Ferry Village of Ravena Village of Fairport Village of Rockville Center Village of Frankfort Village of Sherburne Village of Green Island Village of Silver Springs Village of Greenport* Village of Smyrna Village of Hamilton* Village of Solvay Village of Holley Village of Spencerport Village of Ilion Village of Stewart Manor Village of Kinderhook* Village of Theresa Village of Lake Placid* Village of Tupper Lake Village of Lynbrook Village of Voorheesville Village of Marathon Village of Watkins Glen Village of Mayville Village of Wellsville Village of Mohawk Village of Westfield State Level Authorities Materials Innovation and Recycling (formerly Connecticut Resource Recovery Authority) New York Local Government Assistance Corporation New York State Higher Education Services Corporation* New York State Housing Trust Fund Corporation/Governor's Office of Storm Recovery New York State Thruway Authority* State University Construction Fund County Level Authorities Greene County Industrial Development Authority Hamilton County Industrial Development Agency Montgomery-Schoharie-Otsego Solid Waste Management Authority Oneida-Herkimer Solid Waste Management Authority Rockland County Solid Waste Management Authority Saratoga County Water Authority Schenectady Metroplex Development Authority City Level Authorities Albany Parking Authority City of Albany-Municipal Water Finance Authority Gloversville-Johnstown Joint Wastewater Treatment Facility 7 I A Proposal to Serve the Town of Queensbury, New York ACCOUNTING TAX ADVISORY City of New York- Fiscal Year 2005 Securitization Corporation City of Troy -Municipal Assistance Corporation City of Troy Capital Resource Corporation City of Troy Industrial Development Agency City of Troy Local Development Corporation City of Newburgh, Industrial Development Town Level Authorities Town of Colonie Industrial Development Agency Town of Colonie Local Development Corporation Town of Islip Community Development Agency* Town of Islip Foreign Trade Zone Authority Town of Islip Housing Development Fund Town of Islip Resource Recovery Agency Town of Green Island - Industrial Development Agency Town of Green Island-Power Authority Town of North Hempstead-Community Development Agency* Village Level Authorities Green Island Power Authority Village of Dobbs Ferry Local Development Corporation Village of Green Island Industrial Development Agency Village of Greenport Housing Authority Village of Sherburne Local Development Corporation *A Federal Single Audit was performed. Similar Engagements and References That Speak to Our Qualifications The following engagements are representative of clients for whom we currently perform professional auditing services that are similar in scope to the work required by the Town (annual audits of U.S. GAAP financial statements). Town of Colonie Town of Milton P.O. Box 508 742 Bay Road Newtonville, New York 12128 Queensbury, New York 12804 Mr. Chris Kelsey, Accounting Director Ms. Barbara Tierney, Budge Director (518)783-2708 (518)761-8240 Town of Halfmoon Town of Saratoga 2 Halfmoon Plaza 12 Spring Street Halfmoon, New York 12065 Schuylerville, New York 12871 Ms. Bonnie Hatter, Director of Finance Mr. Thomas Wood, Supervisor (518) 371-7410 (518)695-3644 Town of Ballston 323 Charlton Road Ballston Spa, New York 12020 Mr. Timothy Szczepaniak, Supervisor (518) 885-8502 81A Proposal to Serve the Town of Queensbury, New York 1 MO --il tri:::-,, ,--4.,,, .,-c,..-,,,,,,A,v-,:m -'.-&-4-44,-.4-0•41.4.5'2:44: '=,8 , 44,-. -—-.: ' 'Sri" nA '����t:-XC b.«niz`no:: ACCOUNT?NG TAX pAOVAORV '"j' '4' Additional references from the client listing provided within the Qualifications and Experience section will be provided at the request of the Town. Specific Audit Approach With an unwavering commitment to accuracy, our audit process is based on a thorough initial planning process, open and honest lines of communication throughout the year, and a specific methodology of analysis and quality review that will ensure a successful audit, as well as a successful relationship with the Town and its professionals year after year. We have developed this successful methodology and are recognized for the quality and thoroughness of our audit process. 3y `w Our four phased audit approach is focused on understanding the Town's transaction Q �,^ , �. . processing cycles, internal controls, business risks, and management strategies. This ;- _ approach enables us to identify key audit components and tailor our procedures to the t_ a, unique aspects of the Town's business. Our audit process is continuous, whereby we � :'4 address and resolve issues, new accounting standards, and changes in your business, throughout the year, not just at year-end. We are committed to providing management with frequent interaction and delivering to the Town a"no-surprises"audit. We have developed a business advisory approach to audit services which looks beyond accounting entries to underlying transactions and business systems. We place substantial emphasis on understanding your operations and business strategies. We do not view your audit as a commodity. Instead, we see it as a tool that you can use to improve your operations. We contribute recommendations about your internal controls, operating and accounting procedures, and other important matters. Our expectation is that you will view your audit as a process that adds value and your auditor as a contributor to the Town. We will develop an audit plan specifically for the Town based on our meetings with management to further our understanding of your business concerns and challenges; understand and document the accounting and information systems;evaluate economic and industry factors affecting operations; identify major areas of audit risk; coordinate the audit process with the Town designated liaison and perform testing on interim balances to minimize the amount of year end testing. Our audit plan will consist of a multi-phased approach focusing on planning, internal control evaluation, fieldwork and reporting. Financial Statement Audit Methodology Audit Methodology Segment II,Planning Segment 1, with priorri •Assess risk at account and •Agreesroon auditor potential error level • fieldwork and •Develop understanding of the deih�eraWe dates I.PrrAudit Activities plan and programs to be •eachseportig segmentt for audded each ete reporting information••, •lethal communications with •Agree on SC scheduleschlity T.a,ndogy those charged with •Agree o,PSC governance •Obtain nt contracts iv.aenotang, 7 u.warming •Design substantive tests and agreements Quality, and Risk Conclusion Assessment •.F;n'euelnee•se.�, Segment fll FiekMrork Segment iV.Reporting •Substantive tests of details •Review subsequent events 14,Audit Fieldwork. •Tests of internal controls and •Obtain engagement reps A 13a Compliance A-133 compliance •Assessengagement chara quality •Evaluate findings •Report to those chargedsith •Write recommendations governance •Status meetings •Obtain feedback from CDPHP rRisk Based Audit Approach 9 1 A Proposal to Serve the Town of Queensbury, New York 02 ACCOXNTING TAX ADVISORY .'. ..� ?. ' ' .,' Our specific plan for Segment III, Fieldwork, includes segmenting out processes by major functional area. Preliminary we plan to approach our audit of the Town as follows: Rnanelat Ong egment Federal/State Single Audits ,was 4 Financial Reporting Segment Revenue and Receivable Segment • Execution of planning activities • Property and other tax items • Interviews with key staff personnel • Departmental income and other general • Walkthroughs of significant classes of government revenues transactions • Intergovernmental charges, interfund • Calculation of preliminary materiality revenues, interfund transfers • Sample selections for fieldwork phase • Financial statement tie-out and review Treasury Segment • Calculation of final materiality • Completion of accounting and disclosure • Cash, investment and debt confirmations checklists • Bond issuances • Final analytics • Debt service Expenditure and Payable/Accrual Segment Payroll and Benefits Segment • Cash disbursements • Payroll expenses • Completeness of accounts payable • Employee benefit expenses • Manual accruals • Self-insured obligations • Review of legal expenses and preparation of • Other postemployment benefits legal letters • Proportionate share of the net pension liability • Other payroll and employ benefit accruals As part of our commitment to you, we have developed a business advisory approach to audit services,which looks beyond accounting entries to underlying transactions and business systems. We place substantial emphasis on understanding your operations and fundamental business strategies. We don't view your audit as a commodity. Instead,we see it as a tool that you can use to improve your operations and service delivery. We contribute recommendations about your internal controls,operating and accounting procedures,and other important matters. These are communicated both orally and in a written management letter. In summary, development of the specific audit plan is accomplished through: • Meeting with Town management to obtain an understanding of your business concerns and challenges; • Thoroughly understanding and documenting the financial management and information systems; • Evaluating economic and industry factors affecting operations; • Identifying major areas of audit risk; ioIA Proposal to Serve the Town of Queensbury, New York ® -1 1 f r 07 \ ?,+ r ACCOUNTING TAX ADVISORY • Coordinating the audit process with the accounting and finance personnel, • Establishing timelines for deliverables, and • Performing testing on interim balances to minimize the amount of year-end testing. Planning Phase The first step of the audit is preplanning, which involves meeting with Town management to clearly identify the lines of communication, perform a risk analysis, discuss audit scopes and alternatives, discuss any concerns, and set expectations. We will also establish a preliminary timetable to ensure a smooth audit process. A thorough understanding of your organization and its operating environment is essential for the development of an audit plan for an efficient,cost effective audit. During this phase,we will meet with appropriate personnel to update and document our understanding of your operations, including business concerns and challenges and, at the same time, give you the opportunity to express your expectations with respect to the services that we will provide. Our work effort will be coordinated so that there will be minimal disruption to your staff. During this phase, we will perform the following activities: • Review the regulatory and statutory compliance requirements within which the Town operates. This will include a review of applicable federal laws, state statutes, ordinances, resolutions, debt instruments,contracts,other agreements,and minutes of meetings of Town management and various committees; • Review major sources of information such as the Town's budgets, organization charts, procedures manuals, financial systems, and management information systems; • Review of the Town's internal control processes; • Review of accounting and information systems; • Consider the methods that the Town uses to process accounting information which influence the design of the internal control. This understanding includes knowledge about the design of relevant policies, procedures,and records,and whether they have been placed in operation by the Town, and • Identify and resolve accounting, auditing, and reporting matters noted during planning. BST will evaluate the Town's system of internal control to assess the extent it can be relied upon to ensure accurate information,to ensure compliance with laws and regulations,and to provide for efficient and effective operations. Our evaluation will include: 1. Review of the system, which is primarily the process of obtaining information about the organization and the procedures prescribed and is intended to serve as the basis for tests of compliance and for evaluation of the system. 2. Tests of compliance, which are made to provide reasonable assurance that the accounting control procedures are being applied as prescribed. The development of our audit plan is dependent on our understanding of your operations and our assessment of current risk factors. This approach requires the careful exercise of professional judgment developed through extensive experience with audits and is based on our assessment of risk of error in the financial statement line items and for the Town as a whole. As a result, we will focus our audit effort in the important, high risk areas and minimize our time in the low risk areas ensuring you of a cost-effective and efficient audit. Fieldwork Phase Fieldwork is the largest part of the audit process and includes both substantive audit tests, such as confirmation work, and analytical review, such as variance examination. Interim fieldwork includes many 3 c IMO ACCOUNTING TAX ADVISORY „ �' ;3 x` ,_ n, xi � -> 'T��^'+sasvt nos planning activities mentioned earlier, including detailed risk assessments, interviews of key employees, and systems documentation. Interim testwork includes testing of controls and preliminary testing on compliance and other areas. We will perform substantive audit procedures tailored to your specific accounts to the extent determined by the results of our evaluation and testing of internal accounting controls. Preliminarily we have identified the following audit areas to be tested: Account/Process Summarized Audit Approach Audit Risks Addressed Cash/Investments • Cash/investment confirmations with • Completeness/accuracy of cash and Treasury custodian. and investment balances. Management • Review of bank account reconciliations and • Compliance with laws/ material reconciling items. regulations. • Investment compliance with NYS Laws and Regulations. Revenues and • Walkthroughs of key revenue processes. • Fraudulent revenue recognition. Receivables • Trace revenues to cash receipts. • Revenue cutoff/completeness. • Evaluate revenue cutoff for completeness. • Collectability of account • Review subsequent cash collections to receivable balances. assess the reasonableness of accounts receivable balances. Capital Assets • Review of capitalized interest, if applicable. • Incomplete capital asset • Evaluate reasonableness of useful lives. listings. • Review of capital asset additions/deletions/ • Improper capitalization whether transfers. due to fraud/error. • Consideration of intangible assets (software, • Unreasonable useful lives. easements, etc.). Accounts Payable • Search for unrecorded liabilities via • Completeness of liabilities/ and Accrued examination of payments made subsequent to expenses. Expenses year-end and review of open payables listing. • Subjective estimation • Review of significant accruals (landfill, processes, including judgment and claims, compensated management bias. absences), including management's estimation process. • Review of OPEB valuation, including inputs (census data), assumptions, and external actuary qualifications. Bonds Payable • Confirmation of debt with external financial • Completeness and presentation and Related organizations. of debt balances. Accounts • Review of interest expense for • Compliance with bond reasonableness. covenants. • Recalculation of premium/discounts, gains/losses on refunding, bond issuance costs. • Review of compliance with bond covenants. Operating • Analytical review of operating expenses, • Appropriateness of Expenses comparing budgets to actuals, examining expenditures reported. unusual fluctuations. • Selection of a sample of cash disbursements and review of underlying documentation (invoices, agreements, etc.). 12 � • ND ACCOUNTING TAX ADVISORY ' r �; � , Account/Process Summarized Audit Approach Audit Risks Addressed Consideration of • Select a sample of journal entries and obtain • Misappropriation of assets. Fraud source documentation. • Fraudulent financial reporting. • Consider need to perform: confirmation of • Corruption negatively impacting payables, examination of cancelled checks, the organization's reputation. and review of authorized signatories. • Periodic involvement of forensic professionals. BST uses sampling in selecting items for testing by compliance and/or substantive tests where it is determined to be cost beneficial to sample the population. Our Firm has an Audit Methodology Manual which contains procedures for the control and evaluation of sampling risk, selection of samples, and evaluation of sample results. Audit sampling will normally be used in audits of governmental units to perform the following tests: • Substantive tests as part of the audit of the governmental unit's basic financial statements; • Compliance tests to provide reasonable assurance that internal control(accounting and administrative) procedures used in administering federal and state financial assistance programs, if any, are being applied as prescribed, and • Substantive tests of compliance with laws and regulations as part of the audit of the basic financial statements and for the purpose of reporting on compliance with laws and regulations as they relate to the schedule of federal and state financial assistance, if applicable. For the audit of the Town's financial statements,we anticipate that our sampling methodology will be used to determine sample sizes for tests of payroll,expenditures,fixed assets additions, and certain revenue sources. Our audit approach requires the use of analytical procedures to assist in planning the nature, timing, and extent of other auditing procedures. The primary focus of analytical procedures employed at the planning stage is the identification of specific risks or errors in the financial statements or of compliance violations. By considering unusual or unexpected balances or relationships, analytical procedures help to direct our attention to areas with the highest potential for material misstatement. Preliminary analytical procedures may also identify unfavorable trends or other matters. Analytical procedures will be performed at both the government-wide and fund level and will include the following, where applicable: • Comparison of original budget(revenue sources and appropriations)to actual amounts. • Comparison of account balances to budgets and forecasts and prior year amounts. Consideration, to the extent applicable, of the certain key financial relationships in relation to preliminary expectations to determine if there are unusual or unexpected balances or unexpected relationships. Reporting Phase Our approach to the audit will include, at a minimum, the following reviews of the financial statements, audit reports, and workpaper files: • Engagement Performance and Administration - review the work of all staff in detail, including workpapers, financial statements, audit report, compliance report, and management letter. 13 � ACCOUNTING TAX ADVISORY • Partner Review-review of the financial statement audit report,compliance reports,management letter, workpaper files for significant and critical areas, and concurrence with conclusions of the engagement team. • Engagement Quality Control Review - review critical audit decisions made by the engagement team and final technical review of all deliverables. At the conclusion of the audit process, we will issue the required opinions. We will communicate any significant deficiencies found during the audit. Significant deficiencies that are also material weaknesses will be identified in the report on internal controls. Deficiencies discovered will be reported in a management letter. In addition, our management letter will be used to communicate other internal control matters or operational deficiencies. We will make an immediate, written report of any irregularities or illegal acts of which we might be made aware and will report such findings immediately to the Town. Our management letter will discuss internal control recommendations and suggestions for procedural improvements we identified as part of the audit. The letter will also include observations about accounting methods and procedures, business and industry practices or issues, operational ideas, and suggestions to further enhance the Town's operations. We will advise you of any new accounting pronouncements that have been or may be issued and indicate their potential impact. Statement and Schedules to be Prepared by Town Staff Proposed statements and schedules to be prepared by the Town to support annual audit efforts are included within the Appendices to the proposal. Tentative Schedule of Completion of Audits Based on our review of your RFP,we propose the following audit schedule: • Detailed Audit Plan -On an annual basis, we will provide the Town both a detailed audit plan and a list of all schedules to be prepared no later than February 28th. • Interim Field Work - Interim fieldwork may be conducted at a mutually agreed-upon time, which we would expect to be performed on an annual basis in April of each year. • Fieldwork-We anticipate performing fieldwork May and June of each year. • Draft Reports - We will conduct our exit conference within two weeks of the end of fieldwork on an annual basis. The exit conference would include drafts of the audit reports and recommendations to management for review with management. • Final Reports - We will issue all final reports, together with the Town's response to any findings reported, and the management letter by the dates established by management and those charged with governance. We expect that we would present the results of our audit to the Town Board at regularly scheduled Board meeting in July or August of each year. We will work with the Town to perform our audit work on a timely, efficient basis. At the end of our engagement, we will meet with those charged with governance to present our reports and letters,and to discuss our audit findings. We will provide a memorandum on business matters,which includes our recommendations for improving your operations, as well as information regarding any new accounting pronouncements, and other issues that impact the Town. We will also be available to meet with you during the year to answer any questions that may arise. 14l . 1:47 r Ilb ACCOUNTING TA,< ADVISORY Report Format Proposed sample reports for the annual audit are included within the Appendices to the proposal. Total All-Inclusive Maximum Price Our proposed, not-to-exceed fees for the annual audit of the Town's financial statements, assistance with preparing the Town's government-wide financial statements, departmental cash transaction audits, annual management letter and required communications are as follows: Not to Exceed Year Ended Fees December 31,2019 $ 32,500 December 31, 2020 $ 33,250 December 31, 2021 $ 34,000 December 31, 2022 $ 34,750 December 31, 2023 $ 35,500 Included within the fee quotes, we will advise the Town on the applicability of accounting pronouncements impacting the Town's financial statements as issued by the Governmental Accounting Standards Board during the period of our engagement. Further our proposed not-to-exceed fees are inclusive of all direct and indirect costs including out-of-pocket expenses. Rates for Additional Professional Services If the Town requests BST to perform any additional services outside of the scope of this proposal, we will discuss the scope of such services and associated fees prior to beginning any work. Such additional work will be performed at rates agreed to between the Town and BST. Payment Terms Our not-to-exceed fees will be invoiced as work progresses. Invoices are due upon submission. 15 � x ACCOUNTING TAX ADVISORY F . ,,*n; z 4. s Results of Reviews and Disciplinary Actions Federal and/or State Desk Audits The U.S Department of Labor(DOL)reviews accounting firms that provide audit services to employee benefit plans covered under the Employee Retirement Income Security Act of 1974 (ERISA). Accounting firms who provide audit services to over 100 plans annually are subject to an annual review. Those firms that audit less than 100 plans are generally reviewed on a three-year cycle. The following engagements were selected by DOL in accordance with their ongoing program: • A benefit plan with the year ended December 31, 2013 was selected for audit by the DOL. This plan was reviewed by the DOL in 2015. The review was finalized without any adverse findings. • in February 2017, the DOL initiated a review of two benefit plans with the fiscal year ended June 30, 2016. BST provided all information requested by the DOL in February 2017. Nothing further has occurred on this matter through the date of this proposal. Excluding the periodic DOL benefit plan reviews, which are pursuant to the DOL's ongoing program, there have been no other Federal of State desk reviews/audits conducted in the past five years. BST would like to emphasize that these are routine desk audits performed by the DOL on a regular basis that all ERISA benefit plan auditors are subject to. 16