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Home My WebLink AboutRes 2019-07-587 Agreement with Weaver & Tidwell, LLP for Audit ServicesCITY OF ANNA, TEXAS RESOLUTION NO. ,;%C ( q - oq -,!5 � rl A RESOLUTION OF THE CITY OF ANNA, TEXAS AUTHORIZING THE CITY MANAGER TO ENTER INTO A PROFESSIONAL SERVICES AGREEMENT FOR AUDIT SERVICES WHEREAS, The City Charter of the City of Anna and Chapter 103 of the Texas Local Government Code require that the City have an annual audit performed by independent certified public accountants; and, WHEREAS, The City of Anna, Texas (the "City") has issued a new request for qualifications (RFQ) for financial services; and, WHEREAS, the committee, after reviewing the proposals submitted in response to the RFQ, believes that an agreement with Weaver and Tidwell, LLP demonstrates the highest qualifications and competence; and, WHEREAS, this contract is to be awarded for a period of two years with three optional years to extend the contract. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS THAT: Section 1. Recitals Incorporated. The recitals set forth above are incorporated herein for all purposes as if set forth in full. Section 2. Authorization The City Council herby authorizes the City Manager to negotiate and execute a professional services agreement with Weaver and Tidwell L.L.P. for audit services in accordance with the proposal from Weaver and Tidwell L.L.P. attached hereto as Exhibit 1. The City Manager is further authorized to execute all documents and to take actions necessary to finalize, act under, and enforce the agreement. PASSED AND APPROVED by the City Council of the City of Anna, Texas on this 23rd day of July, 2019. ATTEST: "`0�Fll%'VED: Carrie L. Smith, City Secretary te4:ik, Mayor RES. PAGE 1 OF 1 Technical Proposal for Independent Financial Audit Services City of Anna (RFP #2019-01) July 3, 2019 Presented by: Sara Dempsey, CPA I Partner -in -Charge, Public Sector Assurance Services Weaver and Tidwell, L.L.P. 1 2300 North Field Street, Suite 1000 1 Dallas, Texas 75201 972.448.6958 1 sara.dempsey@weaver.com weaver Assurance • Tax -Advisory I�e,g '�qo I q , eq -5 S r7 weaver CONTENTS TransmittalLetter.................................................................................................................................................1 FirmProfile............................................................................................................................................................3 Size of the Firm and Location of the Office Performing the Work ......................................................... 3 Size of Governmental Audit Staff................................................................................................................ 3 Auditing Computerized Systems................................................................................................................. 4 PeerReview................................................................................................................................................... 4 FirmsQualifications.............................................................................................................................................5 Similar Engagements with Other Government Entities............................................................................ 5 TeamOrganization....................................................................................................................................... 6 Additional Services Provided to Government Clients........................................................................... 1 1 AuditApproach................................................................................................................................................12 Audit Segmentation, Staffing and Hours................................................................................................. 13 KeyPhases and Activities.......................................................................................................................... 14 Assistance from Personnel......................................................................................................................... 20 weaver,'*�- Assurance• July 3, 2019 City of Anna, Texas Carrie Smith City Secretary 1 1 1 North Powell Parkway Anna, Texas 75409 Austin Conroe I Dallas I Fort Worth Houston Los Angeles Midland ) Neve York City San Antonio RE: Proposal for Independent Financial Audit Services (RFP #2019-01) The City of Anna (the City) continues to experience significant growth. With this growth comes increasing pressure for more and enhanced services for citizens, businesses and employees alike. Delivering these services involves a great deal of budgetary and operational complexity, and one additional priceless commodity: time. Your operations staff simply doesn't have time to be overburdened during the financial audit season. That's where Weaver comes in. With this proposal, Weaver and Tidwell, L.L.P., (Weaver) commits to providing financial auditing services for the fiscal years ending September 30, 2019 and 2020, with the option to audit the City's financial statements for up to three subsequent fiscal years. The insight you need We have the knowledge and insight that comes from auditing more than 40 cities across the state, we have a hands-on understanding of their operations, systems and culture. This blend of experience and insight enables us to facilitate a more efficient audit, to better understand the full spectrum of your reporting requirements and risks, and to provide recommendations that are truly customized to your specific needs, resources and constraints. We will also provide ongoing knowledge transfer and training to help your finance department and staff operate at peak efficiency. As a result, your staff can focus their efforts where they're needed most: serving the City's citizens and businesses. In short, Weaver offers you: Experience in municipal environments. With more than 40 municipal clients, Weaver professionals understand the complexities of governmental accounting, federal and state funding, and the nuances of special reporting. High-quality work and on-time delivery. Weaver's reputation has been built on the quality of our work and our ability to stay on schedule and on budget. We are dedicated to meeting the timelines and other commitments set forth in our proposal. Commitment to ongoing communication. Frequent, effective and honest communication is critical to a successful audit. Your partner and engagement team leadership will remain highly accessible throughout the audit and throughout the year. Weaver and Tidwell, L.L.P. 2300 North Field Street, Suite 1000 ) Dallas, Texas 75201 Main: 972.490.1970 ) Fax: 972.702.8321 CPAs AND ADVISORS I WEAVER.COM we ave r Assurance -Tax • Advisory Giving you more for your audit We understand that you need more value from your annual financial audit than mere compliance. As your auditor, Weaver will help you prepare for changing conditions, streamline processes and identify potential fraud or waste. These are just a few specific examples of ways Weaver can help the City receive extra value from your audit: ► Examining/auditing unusual or complex transactions before fiscal year-end ► Assistance with implementation of new GASB standards or other pronouncements ► Recommending changes in financial reporting models ► Using advanced data analytics capabilities to increase efficiency and identify potential fraud ► Helping to ensure the City's CAFR meets requirements of the GFOA Certificate of Achievement ► Offering free continuing professional education specifically focused on the special concerns of cities and other government agencies, such as regulatory updates and information about emerging technology Ultimately, our goal is to provide you with more than just a financial audit; we want to offer the support you need to maintain world-class financial operations. With my signature below, I certify I am an authorized agent of Weaver, able to contractually bind the firm, and that this proposal is a firm and irrevocable offer for a period of 90 days. Weaver is licensed to practice in the State of Texas, as well as being independent of the City of Anna as defined by Government Auditing Standards issued by the Comptroller General of the United States. If you have any questions regarding this proposal or any other matter, please do not hesitate to contact me directly. I look forward to the opportunity to discuss our proposal, as well as how Weaver can continue to assist the City with achieving its financial reporting objectives and long-term goals. Sincerely, 2� Sara Dempsey, CPA I Partner -in -Charge, Public Sector Assurance Services Direct: 972.448.6958 1 Email: sara.dempsey@weaver.com Weaver and Tidwell, L.L.P. 2300 North Field Street, Suite 1000 1 Dallas, Texas 75201 Main: 972.490.1970 1 Fax: 972.702.8321 CPAs AND ADVISORS I WEAVER.COM weaver Assurance . Tax .Advisory Firm Profile Size of the Firm and Location of the Office Performing the Work Founded in Fort Worth in 1950, Weaver is a nationally recognized firm with approximately 750 professionals and offices in seven major Texas cities: Dallas, Fort Worth, Austin, San Antonio, Houston, Conroe and Midland. We will manage and staff this audit from our Dallas office, which offices: Partner Director/Senior Manager/Manager Senior Associate/Associate 31 43 87 Size of Governmental Audit Staff Weaver's dedicated public -sector audit practice is one of the largest industry practices in the firm, with more than 120 professionals focused on the distinct needs of our government clients. Led by Engagement Partner Sara Dempsey, this deeply experienced group performs annual financial audits for more than 175 public -sector clients each year, including: MEETING YOUR GFOA RECOGNITION NEEDS ► 40 Texas cities ► 24 of the 100 largest cities in Texas, by population ► Approximately 100 entities that receive federal funding sufficient for a single audit ► More than 50 entities that receive the GFOA award for excellence in financial reporting GD Certificate !�chievenient Pin.,nual Rgnring ► 50+ entities currently receiving the GFOA Certificate of Achievement ► Nine Weaver staff on the GFOA Special Review Committee ► Your engagement partner and technical review partner are both members of the GFOA Special Review Committee We are experienced not only with annual ' financial audits, but federal and state single audits, CAFR preparation or review for GFOA recognition, and third -party compliance audits. In addition, we also provide public -sector clients with internal audits (both outsourced and co -sourced), risk assessments, enterprise risk management consulting, business process improvement, IT audits, data analytics and forensic accounting. Technical Proposal for Annual Audit Services I City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. I Page 3 weaver Assurance -Tax .Advisory Auditing Computerized Systems Weaver has significant experience providing auditing and advisory services related to the major financial and business systems used by Texas cities. Our procedures for evaluating the security and integrity of IT systems typically include procedures to validate system settings and user authorizations. Due to the size and scope of your computerized electronic data processing or information technology (IT) function, Weaver's IT Advisory group will assist with our audit. We use multiple frameworks and standards to conduct specific IT application and security audits, selecting the guidelines most appropriate for each case. Our central approach is based on Control Objectives for Information and Related Technology (COBIT), which furnishes a comprehensive methodology to underlie all of our IT audit engagements. We apply the COBIT framework in planning, executing and reporting the results of our IT -related services. Peer Review Weaver has been a member of the AICPA Center for Audit Quality and the Government Audit Quality Center (GAQC) since their inception. Membership in these organizations is voluntary and requires a commitment to the highest standards of professional practice. The strength of Weaver's quality control system for our accounting and auditing practice and our compliance with that system are independently evaluated every three years through a peer review administered by the AICPA National Peer Review Committee (NPRC). Each peer review has included a review of governmental audit engagement, as mandated by AICPA Peer Review standards and GAQC requirements. Weaver has received unmodified reports on every peer review to date. Our latest EideBailly. 11� system Re,Ien Rrpan To the I'arncrs of w'ea,cr and Tidwell, I,.I_P. and the National Peer Reticw Corrine We hate we revied the sweet of quality control for the accounting and auditing practice of Weaver mid Tidwell. LLP. (the "fdmi)applieablc 10 mgagan¢nts not subject to PCA011 permanent impemion in effect for the year ended \lay 11.2016.Ourper review was cmducted in an-ordasce with the Standards for Performing and Repsvtingon leer Reticws established by Ute Peer Review Board of the Anterican Imahuto of Certified Public Accountana..l a psrtofour pwrreticw, we considered rcdews by regulatory entities, ifapplicahle, in Jritmsining We nalurc and ascent of ore pnscodurcs. The lima is rcsporble for Designing a system of quality control and co" spiyiug w firm ith it to provide the tt ith «rama-�wu ble mwt of pcifomsing and reporting in nmfmnsity with applicable professional standards in all material respects. o urraporibility is to espress an opinion on Urc Jes(&s ohhe system of yualiq• ceniml and Ilse fmn's consplianm Werc„its based on our mvia,. 'lice prime, objesliv t. stupe. Iimiialiolu ole ant the pracJuns perf unset in a S) stern Retic,t arc Jescrilxd in the standanls at ww-iticda due brnnima . M required by the standards, cugagoncros selected for retiew included engagements perfomrd older G.—II Smnd „Js, audits of emyee ploIxnefst plans. audits pe,lorawd under FDIC IA, and examination. ursemice o ganintiom (service o gauiralimw Control (SOC') I and 2 cugagemcnt,l. In our opinion, Use system of quality control for die accounting and auditing practice of Weaver and '1idwell 1, LLP. applicable to engagements not subject to PC AOI( pent—rit in pllion in acid for Use year ended Na) )I, 2016, has Isccn suitably Jsigrnd and a+mplieJ wiUt to protide the firs with rexsmsahk auuranco of Iwrfiunung and rcporhtg in vasf writ• wits applicable prormional standards in all material respc ts. Firras cars mwire a raring ofrdass, pau xYrh Jsilde,tcyylu) orfoi(. \\'raver and T'iDwdl, i_I _P. hi rcsivcd a pwr review rating ofp. x74 Fide Willy UP October 7, 2016 Www.0doballiy,00rn lea Medd Has. D. 1= I Vvss e. sal taea.+= 1 Teraal stet I r ana)aa1 I[Gr peer review was accepted by L -- - - the NPRC in October 2016; Weaver received a pass rating, the highest grade possible. Technical Proposal for Annual Audit Services I City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. I Page 4 we ave r - Assuron ce . Tax .Advisory Firms Qualifications Similar Engagements with Other Government Entities As mentioned previously, Weaver performs audit services for approximately 175 public -sector entities annually. Similar engagements performed by the Dallas office within the past five years are listed below, followed by a broader representative list of government audit clients. Technical Proposal for Annual Audit Services i City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. i Page 5 Annual financial Janina Jewell City of and compliance 2015 - Euless audits, including present GFOA 817.685.1444 recognition Sewell@ci.euless.tx.us Annual financial City of and compliance 2013- Rowlett audits, including present Dempsey GFOA recognition Melissa Beard Annual financial John City of and compliance 2008- Wylie audits, including present Steven Ventura GFOA John Chief Financial Officer recognition Annual financial DeBurro Town of and compliance 2014- Fairview audits, including present GFOA recognition Technical Proposal for Annual Audit Services i City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. i Page 5 Janina Jewell Sara Finance Director 500 Dempsey 817.685.1444 Sewell@ci.euless.tx.us Wendy Badgett Sara j Director of Financial Services 400 Dempsey 972.412.6285 wbadgett@rowlett.com Melissa Beard 400 John 972.442.8141 DeBurro finance@wylietexas.gov Steven Ventura John Chief Financial Officer 300 DeBurro 972.562.0522 x4207 sventura@fairviewtexas.org Technical Proposal for Annual Audit Services i City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. i Page 5 weaveance . Tax Advisory Team Organization Serving large, complex municipalities requires specific technical knowledge and industry insight. We invest both time and money to ensure that our public -sector professionals are always at the forefront of best practices, and stay abreast of the latest guidance, regulations and other trends affecting Texas cities. This combined with our prior experience serving the City enables us to provide the most efficient and impactful audit for the City. Your audit team will be organized as illustrated below: Per the RFP instructions, resumes for key resources are provided on the following pages. Technical Proposal for Annual Audit Services I City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. I Page 6 weaver Assurance -Tax -Advisory Qualifications for Key Personnel Sara Dempsey, CPA Partner-in-Charge, Public Sector Assurance Services Experience Summary: Sara has more than 16 years of public accounting experience and currently leads Weaver's Public Sector Assurance Services practice. Her primary emphasis over the course of her career has been accounting and auditing for municipalities, transportation authorities, electric utilities, higher education and school districts. She has deep experience preparing comprehensive annual financial reports, Uniform Guidance single audit reports and state single audit reports for numerous entities that receive the GFOA Certificate of Achievement for Excellence in Financial Reporting. A member of the AICPA State and Local Government Expert Panel, she regularly provides technical guidance on proper accounting for complex transactions and the implementation of new accounting standards. Representative Clients: Sara's clients have included the cities of Irving, Denton, Killeen, Plano, McAllen, Allen, Rowlett, Southlake, University Park and the Town of Highland Park; East Texas Council of Governments and Alamo Area Council of Governments; Dallas ISD, Irving ISD, and HEB ISD. Professional Involvement and Recognition: Sara is highly active in numerous industry and professional organizations, including active membership in the TSCPA, AICPA, GFOA and Women in Public Finance. Key leadership positions include serving on the AICPA State & Local Government Expert Panel, the GFOA Special Review Committee, the Financial Reporting and Regulatory Response Committee of the GFOAT and the Accounting Committee of the Texas Association of School Business Officials (TASBO). Representative Presentations and Publications: Sara regularly presents CPE sessions and speaks at conferences and professional associations. Representative topics include "GASB Accounting & Audit Update," "2018 Nonprofit Update, Including Information on ASU 2016-14, ASU 2016-02, ASU 2014-09 and Recent Tax Law Changes," "Preparing for a Successful Year -End Close" and "Audit Readiness." Education and Certifications: Sara is a Certified Public Accountant in Texas. She earned a Bachelor of Business Administration in accounting from Texas State University. Sara currently meets continuing professional education required by generally accepted government auditing standards and Texas State Board of Public Accountancy. Technical Proposal for Annual Audit Services I City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. i Page 7 weaver Assurance -Tax .Advisory Gaither, CPA Partner, Assurance Services Experience Summary: Jerry has 40 years of experience leading engagement teams in financial audits for the most complex government entities. For 30 years, he led Weaver's public sector assurance practice, during which time he oversaw more than 150 government audits, including entities with government - wide assets up to $1.3 billion and government -wide revenues up to $350 million, as well as four of the 25 largest cities in Texas. As such, he is deeply experienced with municipal auditing, utilities and single audits meeting Uniform Guidance requirements. Representative Clients: Jerry has led audits for more than 20 cities, including: Allen, Azle, Crowley, Desoto, Denton, Duncanville, Frisco, Grand Prairie, Greenville, Haltom City, Highland Village, Irving, Killeen, Lancaster, Lewisville, McKinney, Rockwall, Rowlett and Sachse, as well as the towns of Addison, Highland Park, Little Elm, Trophy Club and Westlake. He has also audited more than a dozen Texas school districts, and numerous councils of government. Professional Involvement and Recognition: Jerry is member of the AICPA, TSCPA and the AICPA's Government Audit Quality Center (GAQC). He is an associate member of the GFOA and has served on the Special Review Committee for more than 30 years. He is also a former member of the Technical Issues Committee of the AICPA as liaison to the Governmental Accounting Standards Board. Education and Certifications: A Certified Public Accountant in Texas, Jerry earned a Bachelor of Business Administration in accounting from Texas Christian University. He currently meets continuing professional education required by generally accepted government auditing standards and Texas State Board of Public Accountancy. As the City continues to grow, so too have your operations and needs evolved and become more complex. As a full- service firm with a wide array of in-house practices, Weaver is able to provide the City access to a wide array of subject matter advisors for everything from risk management to cybersecurity. In short, the full depth and breadth of our resources and services is literally just a phone call away. W 0 Technical Proposal for Annual Audit Services I City of Anna RFP #2019.01 Weaver and Tidwell, L.L.P. I Page 8 weaver Assurance -Tax - Advisory Jeff Wada, CPA Manager, Assurance Services Experience Summary: Jeff has approximately six years of experience in public accounting, with extensive experience in auditing governmental entities, including municipalities, electric utilities, water districts, and public school districts. Jeff performs audits in accordance with the Single Audit Act, Uniform Guidance and generally accepted government auditing standards. Representative Clients: Jeff's clients have included the cities of Irving and Plano, the Town of Fairview and (prior to joining Weaver) the cities of Culver City, Indio, Covina, Yorba Linda and Signal Hill. He has also provided audit services to Dallas ISD and Grand Prairie ISD, Dallas County Reclamation District and North Texas Municipal Water District. Professional Involvement and Recognition: Jeff is a member of the California Society of Certified Public Accountants. Education and Certifications: Jeff is a Certified Public Accountant in California, with reciprocal privileges in Texas. He earned a Master of Science in accountancy from California State University, Fullerton, and a Bachelor of Science in management science from University of California at San Diego. He currently meets continuing professional education required by generally accepted government auditing standards and Texas State Board of Public Accountancy. Tim Hancock, CPA Senior Associate, Assurance Services Experience Summary: Tim has more than four years of experience in public accounting, with extensive experience in auditing private entities, cities, school districts and other government and nonprofit entities. Tim performs audits in accordance with the Single Audit Act, Uniform Guidance and generally ,11L accepted government auditing standards. Representative Clients: Tim's clients have included the City of Southlake, Town of Little Elm, Frisco Independent School District, Lake Cities Municipal Utility Authority and Trinity River Authority. Education and Certifications: Tim is a Certified Public Accountant. He earned a Bachelor of Business Administration in accounting from Baylor University and a Master of Science in accounting from the University of Texas at Arlington. He currently meets continuing professional education required by generally accepted government auditing standards and Texas State Board of Public Accountancy. Technical Proposal for Annual Audit Services I City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. I Page 9 weaver Assurance . Tax .Advisory Brittany George, CISA, CISM, QSA Senior Manager, IT Advisory Services Experience Summary: Brittany has more than 15 years of IT advisory experience, including more than two years of experience in KPMG's Information Technology Advisory practice, and more than two years with TXU/Capgemini Energy. Her current focus includes IT audits, data analytics, information and cyber security, System and Organization Controls (SOC) reporting and regulatory compliance. She has overseen many of Weaver's IT audit services for government clients, as well as some of the firm's most significant IT controls engagements. A k, Representative Clients: In addition to hands-on experience serving the City of Garland, Brittany's clients have included the cities of Greenville, Irving, Plano, and Southlake, and various other entities such as Dallas ISD, Tarrant Appraisal District and Tarrant Regional Water District. Professional Involvement and Recognition: Brittany is an active member and past president of ISACA, a member of AFCOM, the IIA and the Cloud Security Alliance. She is also Tri -Chair of the Cybersecurity Forum of Tech Titans and serves on the Advisory Board for the SecureWorld Dallas Conference. Representative Presentations and Publications: In addition to having been a guest lecturer at the University of Texas at Austin, Brittany regularly presents CPE and conference sessions. Representative topics include "The Road to Cybersecurity is Paved with Good Planning," "Risky Business - Is Your Cybersecurity in Cruise Control," "Cyber Fraud and Your Potential Liability," and "Incident Response Triage: What to do Before Picking up the Phone." Education and Certifications: Brittany is a Certified Information Systems Auditor (CISA), Certified Information Security Manager (CISM), Qualified Security Assessor (QSA) and an SAP -certified Consultant. She earned her Bachelor of Business Administration in management information systems from the University of Oklahoma, and is currently pursuing a Masters in information Management Systems from Harvard University. Staff Continuity and Quality We understand how frustrating it is to get an auditor up to speed only to learn that that particular team member will be rotated off of the engagement. Although no firm is immune to the factors that lead to rotation, Weaver makes engagement team continuity a client service priority. By formal firm policy, Weaver maintains continuity in engagement leadership throughout a client relationship unless client interests indicate otherwise. In rare instances where rotation is necessary, Weaver will discuss with the City in advance any proposed changes in the engagement team. We will provide the resume of the proposed professional and obtain your approval before making the change. With access to all of the firm's resources, including our 120+ public sector audit professionals, we are able to provide replacement resources with commensurate experience and technical skill in order to minimize any potential disruption to the audit. Technical Proposal for Annual Audit Services I City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. I Page 10 weaver Assurance -Tax -Advisory Additional Services Provided to Government Clients As previously mentioned Weaver serves 175 public sector clients through our Advisory, Audit and Tax services. Listing them all would be fair too detailed. Below is a representative list of clients that we provide services for across all service lines. MUNICIPALITES City of Allen*/+ City of Arlington# City of Benbrook* City of Bryan*/+/# City of Cleveland* City of Conroe*/+ City of Coppell*/+ City of Copperas Cove*/+ City of Corpus Christi# City of Denton# City of Euless*/+ City of Fort Worth*/+ City of Frisco*/+ City of Garland*/+ City of Georgetown*/+/# City of Grand Prairie*/+ City of Houston# City of Irving*/+ City of Jasper*/+ City of Keller*/+ City of Killeen*/+ City of League City*/+ City of Lewisville*/+ City of Lubbock*/+/# City of McAllen*/+/# City of Odessa*/+ City of Plano*/+ City of Rowlett+ City of Southlake*/#/+ City of Springtown* City of the Colony+ City of Wortham City of Wylie/+ Town of Fairview+ Town of Little Elm/+ Town of Westlake+ LOCAL/REGIONAL ENTITIES Alliance Airport Authority Bexar County Auditor's Office Brushy Creek Regional Utility District Bryan Texas Utilities# Central Texas Council of Governments*/+ Dallas County Park Cities Municipal Utility District Dallas County Utility and Reclamation District Denton County Transit Authority*/+/# East Texas Council of Governments*/+/# Ector County Appraisal District Ector County Hospital District# Guadalupe County*/+/ # Houston -Galveston Council of Governments# Lake Cities Municipal Utility Authority Lubbock Power and Light Metrocare Services# Metrocrest Hospital Authority Midland -Odessa Urban Transit District Montgomery Central Appraisal District Montgomery County*/+ Montgomery County Hospital District North Central Texas Council of Governments*/#/+ North Texas Municipal Water District#/+ North Texas Tollway Authority# Odessa Housing Authority* Parker County* Pecos County Reeves County Tarrant Appraisal District Tarrant County# Tarrant County Tax Office# Tomball Hospital Authority Trinity Metro Trinity River Authority+ Williamson County */+ SCHOOL DISTRICTS Alvin ISD* Birdville ISD*/+ Bryan ISD* College Station ISD* Conroe ISD*/+ Crowley ISD Cypress -Fairbanks ISD*/+/# Dallas ISD*/+/# Duncanville ISD* Eanes ISD* Fort Worth ISD*/+/# Frisco ISD*/+/# Grand Prairie ISD*/+ Highland Park ISD*/+ Hurst -Euless -Bedford ISD*/+ Irving ISD*/+/# La Porte ISD*/+ McKinney ISD# Mesquite ISD* Montgomery ISD */+ Pasadena ISD*/+ Pflugerville ISD*/+ Plano ISD*/+ Rockwall ISD* Texas City ISD* Tomball ISD*/+ Waco ISD*/# Wichita Falls ISD* EDUCATION SERVICE CENTERS Region 4 ESC*/+ Region 5 ESC* Region 6 ESC* Region 11 ESC*/# Region 13 ESC*/+ STATE GOVERNMENT Cancer Prevention and Research Institute of Texas# Employee Retirement System of Texas# State Bar of Texas Texas Board of Law Examiners Texas Council for Developmental Disabilities# Texas Department of State Health Services Texas Department of Information Resources# Texas Department of Insurance# Texas Department of Licensing and Regulation# Texas General Land Office# Texas Higher Education Coordinating Board# Texas Lottery Commission Texas Municipal Retirement System# Texas Permanent School Fund Texas State Auditor's Office# Texas Windstorm Insurance Assoc.# HIGHER EDUCATION Abilene Christian University# Alamo Colleges# College of the Mainland# Del Mar College# Dallas Baptist University Lamar University Lee College# Lone Star College Tarrant County College# Texas A&M University# Texas Christian University Tyler Junior College University of North Texas System# University of Texas System# University of Texas at Arlington University of Texas at Dallas University of Texas at San Antonio University of Texas Permian Basin * Single Audits I + Recipient of GFOA Award for Excellence in Financial Reporting I # Internal Control and/or IT Audii Technical Proposal for Annual Audit Services i City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. I Page 1 1 weaver)oo- Assurance • Tax • Advisory Audit Approach Working with Weaver Communication Approach Timeliness and continuous communication are critical for ensuring you receive audit results and deliverables in the timeframe you expect, without surprises along the way. To keep work on track, we will hold weekly meetings to inform you of our progress, address issues as they arise, ask about questions we may have and alert you to any potential delays. When we finish interim fieldwork and again at the end of final fieldwork, our team will meet with you to discuss our observations and recommendations relating to internal control, compliance and operational improvements. We will also confirm facts with you before including them in our reports. At the conclusion of the engagement, we will provide detailed written reports and present them to management and interested parties as requested. Discuss Dovolopmonfs in Preparation For Perform Fieldwork Ongoing Monitoring and Walkihroaghs CommunicationContinuous Issue Report, Givo Pr•senlahions In addition to meeting with you on a weekly basis throughout the audit to provide progress updates, we will remain available to you throughout the year to provide timely technical updates, answer routine questions and offer the consultation needed to ensure we meet your changing needs over time. We do not charge you for this ongoing access; we consider it part of our role as your service provider. Protecting Your Information Weaver is always mindful of the responsibility associated with managing confidential personal and financial data, so we have created a comprehensive array of procedures rooted in industry - standard best practices and systems to protect client and firm information. To start, physical security measures include secured doors on all our offices and workstations that lock automatically. Printed documents are also kept in secured areas, and unneeded documents are collected in locked containers for shredding. Non-physical measures include our secure client portal and encrypted laptops, hard drives and email, as well as mandatory encryption of all removable media (such as thumb drives). These are just some examples of the exhaustive procedures we follow to make sure client data remains secure. Additional details regarding our IT and security policies are available upon request. Technical Proposal for Annual Audit Services I City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. I Page 12 weaver Assurance . Tax. Advisory Audit Segmentation, Staffing and Hours At a high level, ours is a big picture approach: we take the time to consider how your operations and accounting processes relate to your internal control systems and the responsibilities of your existing personnel. Throughout the audit, our decisions are guided by two simple goals: what will best serve your needs, and what will produce the highest quality yet most efficient audit. When we evaluate your risks, we focus not only on deepening our understanding of your operations and accounting processes, but also continuing to examine your internal control systems and the responsibilities of your personnel. We will also discuss our planned audit procedures with management, weighing the benefits/efficiency of existing controls to determine the degree to which they can be leveraged to reduce the level of effort without compromising quality. An overview of the key segments of our methodology is provided below; additional details regarding our approach are provided on the pages that follow. PHASE KEY PURPOSE AND ACTIVITIES STAFF TIMING HOURS We will understand your priorities and risks, finalize the audit plan, and compile Partner, Manager Upon award 20 document requests. We will document and test, as applicable, Partner, Manager imentation Internal controls, determine compliance Senior Associate, October 60 for major programs (as applicable) and Associates identify key risks. Final We will perform substantive testing and Partner, Manager, fldwork data analysis, preparework papers and November Senior Associate,Associates communicate any identified Issues. 200 We will compile ourdraft report, perform Partner, nancial technical reviews, confirm findings with Manager, December 'ity management and incorporate feedback, Senior Associate, Control as applicable. Associates We will deliverfinal reports and other Partner, Draft by January30 M deliverables to management, and present Manager, Final by 20 results, as applicable. Senior Associate February 28 Technical Proposal for Annual Audit Services I City of Anna RFP #2019.01 Weaver and Tidwell, L.L.P. I Page 13 weaver)oo- Assurance• Staff Segmentation The chart below summarizes how the above staff will be utilized throughout the engagement. Specialists, such as the Weaver IT Advisory or Analytics teams, will be consulted as needed; their hours will not change the totals shown below. The estimates below also take into account planned assistance from your Internal Audit staff, as with prior years. Partner(s) 8 2 15 10 35 Manager(s) 8 2 25 6 41 Senior 4 - -- -- 40 80 -- 4 - - – 128 Associate (s) Associate(s) -- 16 80 — 96 Total 20 j 60 200 20 300 *Due to the interwoven nature of activities in Phases 4 and 5 of our audit methodology, these phases have been combined for the purposes of depicting hourly segmentation. Key Phases and Activities Phase 1: Planning & Risk Assessment To start, our team will meet with you to identify any changes to your operations and processes since the last audit season, compile our document request list and review our prior -year work papers and your financial statements. We will also identify and confirm potential risks and calculate a preliminary estimate of materiality. Finally, we will develop key parameters for the audit, including: ► Audit objectives ► Staffing and responsibilities, including senior manager and partner supervision ► Application of analytical procedures ► Schedules and hour budgets by audit area ► Materiality levels used for planning ► A risk assessment of internal controls In developing our audit plan, we will consider aspects of your operations that could affect the audit scope and approach, such as: organizational structure; governing laws and regulations; annual budget and sources of revenue; number of employees; and any significant events during the past year that might have affected your financial processes. Technical Proposal for Annual Audit Services I City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. I Page 14 we aver% Assurance -Tax -Advisory Weaver's secure portal enables our team and yours to share, review, store and track all items related to the engagement. We can also download financial data directly into our audit software to prepare trial balances, perform analytical procedures and prepare the financial statements. To further increase efficiency and accuracy, we can even leverage our TECHNOLOGY in-house data analytics team to analyze 100 percent of IN THE AUDIT selected data. As an integral part of our audit planning, we complete annual walkthroughs relating to internal controls, the City's operations and accounting processes. This in-depth understanding of the City's operations and accounting processes is essential for performing a thorough, efficient and effective audit. It also helps us make relevant, valuable management comments, when needed. Phase 2: Control Documentation & Preliminary Fieldwork Understandina Your Internal Control Structure We will examine your internal controls to make sure they are properly designed and functioning as intended. We will ensure an adequate understanding of your internal controls as they relate to the risk assessment, control environment, control activities, information and communication and monitoring. This will be accomplished by: ► Reviewing controls and determining whether they have been placed in operation ► Assessing the materiality of the various account balances and transaction classes ► Evaluating the risk factors that could affect the scope of testing Determining laws and Regulations Subiect to Testing We will consider the effects of laws and regulations that have a direct and material effect on the determination of amounts in the financial statements. To do this, we will: ► Discuss applicable laws and regulations with City representatives and legal counsel ► Utilize information from prior -year work papers ► Review certain grants and contracts ► Obtain written representations from management Technical Proposal for Annual Audit Services I City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. I Page 15 we ave r Assurance • Tax, Advisory Audit Sampling Approach The nature and size of the City's operations will require us to design procedures to include sampling applications. All sampling will be performed in accordance with AU Section 530 and the AICPA audit guide, "Audit Sampling." Sampling applications may be used for these areas: ► Tests of accounting controls ► Tests of controls over compliance requirements of major federal or state programs, as applicable ► Tests of compliance with major federal or state program requirements, as applicable ► Substantive tests of account - balance details The determination of tests of controls for transaction cycles will be determined by our evaluation of the design and effectiveness of your accounting controls. Our approach to tests of accounting controls will use tolerable rates of deviation and a 90 percent confidence level. The number of transactions tested will ultimately be determined by our expected rates of deviation and our control risk assessment. The specific items to be tested will be chosen randomly. Determining Sample Sizes The size of samples cannot be determined in advance for substantive tests of details of account balances. Weaver uses a nonstatistical sampling approach based on statistical theory, as widely used throughout the audit profession. This methodology uses the concepts of tolerable misstatement, risk of material misstatement, other substantive procedure risk, individually significant transactions and account balance in determining the sample size. Application Controls As part of our audit procedures, we will use automated scripts to evaluate critical business application controls within your computer system. When evaluating application controls, we will perform tasks such as reviewing documentation, comparing processes to standard business rules and practices and verifying access control in applications. Technical Proposal for Annual Audit Services I City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. I Page 16 we ave r Assurance . Tax . Advisory Aoolicafion Securifv As part of our application procedures, we will consider system security configuration and functionality. We will perform tasks designed to evaluate the security of your electronic systems, including the supporting infrastructure and processes. Such tasks may include reviewing security measures surrounding applications and sensitive data, reviewing change management controls, reviewing the physical environment and its security and reviewing procedures designed to protect data integrity. While most of the interaction related to IT system controls will be with members of the City's IT department, Weaver will ensure that appropriate members of your finance staff are informed about the timing, nature, extent, status and findings from our IT reviews and evaluations. Phase 3: Final Fieldwork After you complete the year-end closing of accounts, our team will begin final fieldwork. This is the time when we perform most of the substantive tests on your data and prepare our audit work papers. During this time, the auditors will: ► Perform audit tests and complete preparation of audit work papers ► Complete audit programs, procedures and conclusions ► Discuss audit findings and adjusting entries with your in-house auditor ► Obtain attorney letters Throughout this phase — and throughout our entire relationship with you — Weaver will remain in close communication with your management. Our goal is a "no -surprises" audit. Therefore, whenever there is a question or a potential issue, we will immediately bring it to your attention, seek your confirmation of the data and ask about any relevant circumstances. Substantive Procedures Weaver determines the audit approach and the specific procedures performed for various financial statement accounts and transactions (e.g., cash and investments, long-term debt, etc.) based on our experience with similar entities. We tailor these procedures to your specific accounting system and controls in order to perform the audit thoroughly and efficiently. The financial objectives of these procedures are to provide reasonable assurance that you will be able to process, summarize and report financial data consistent with management's assertions. Those assertions cover classes of transactions, year-end account balances and presentation and disclosure of financial data. Technical Proposal for Annual ,Audit Services I City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. I Page 17 weaver Assurance • Tax -Advisory Analytical Procedures During your audit, we examine more than pieces of data in isolation. We also analyze the interrelationships of financial and nonfinancial data. Our extensive use of analytical procedures offers a natural extension to the process of understanding the City operations. As we develop this understanding, we determine what ratios, relationships and internal or external data management tools will be useful in identifying and monitoring risks. The exact analytical procedures performed for the City will be determined during the planning process, after we have examined your accounting systems and operations. Common procedures include trend analysis, ratio analysis and predictive or "reasonableness" tests. For example, depending on the specifics of your data and processes, we may: ► Compare financial information with comparable prior periods, taking into account any known or expected changes. For example, we will compare revenues and expenditures with comparable previous periods and balances, looking for unexpected variations ► Compare actual with anticipated results (for example, budget -versus - actual comparison of revenues and expenditures) ► Evaluate relationships among different elements within the period, such as receivables in relation to billings, or revenues in relation to costs ► Analyze financial information in light of relevant nonfinancial information (growth, political changes, new regulatory requirements, etc.) ► Perform automated data analysis (data mining) using audit command language (ACL) and similar tools Weaver typically pursues analytic procedures at depth in these areas: ► Salaries and benefits ► Depreciation ► Certain revenues and expenditures Any unexpected variations are researched for explanations, and then corroborated by reviewing supporting information. Technical Proposal for Annual Audit Services I City of Anna f2PP #2019.01 Weaver and Tidwell, L.L.P. I Page 18 weaver Assurance -Tax -Advisory Phase 4: Financial Review and Quality Control After fieldwork is complete, the engagement partner will review the entire engagement, with particular attention to significant audit areas. In addition, the draft report and work papers will be reviewed by the technical review partner to determine the completeness with which the engagement has been performed. The auditor's review will determine whether judgments made by others are reasonable in relation to the supporting data 4V and to generally accepted accounting principles, auditing standards, government auditing standards and firm policy. We discuss and confirm our findings with appropriate the City staff whenever we discover an area of potential concern. In addition, we will review draft findings and recommendations with you throughout the engagement. At the reporting stage, there should be no surprises. Review and quality control tasks include: ► Engagement partner review of all work papers to ensure compliance with technical standards ► Technical review of all work papers ► Performing any final analytical procedures ► A client conference to review financial statements, the auditor's opinion and preliminary management letter comments ► Obtaining written representations from management Phase 5: Reporting Throughout the audit, if we become aware of irregularities or illegal acts, we will make an immediate, written report of those acts to management. After our internal reviews have confirmed the audit is complete, you have reviewed the draft reports, and we have incorporated your management responses and related information, Weaver will issue the final audit documents (printed copies and electronic files). Weaver's Audit Insights are designed convey the most essential results of the audit to City Council and stakeholders clearly, without excessive accounting jargon. We also present information on financial trends over time, strengths and opportunities and looming changes. Shonglhs L Accompgshmonb weaver h�inwglumaeo rn rnrrgdcarcviceaca+rob tf°nee)ti n«.ot1M Msmda aaramr > wkoral Audll Rosuns. 'NO ^1p1i� nnondol Slolemenh Weaver sores°. - Upcoming Ch -M 7 Revenue Trends C°mpahon °I [e, anon . Il.`N GfI weaver} Technical Proposal for Annual Audit Services I City of Anna RFP #2019.01 Weaver and Tidwell, L.L.P. I Page 19 weaver)000- Assurance . Tax -Advisory Our final reports on compliance and internal controls will detail any "significant deficiencies" in internal control (as defined by GAGAS) found during the audit. Significant deficiencies that are also material weaknesses will be identified as such in the report. Lesser deficiencies will be reported in a separate letter to management. Reports issued will include: A report on the fair presentation of the financial statements in conformity with U.S. generally accepted accounting principles, including an opinion on the fair presentation of the supplementary schedule of expenditures of federal awards in relation to the audited financial statements A report on the internal control structure based on the auditor's understanding of the internal control and assessment of control risk and/or compliance with laws, regulations, contracts and grant agreements in accordance with government auditing standards Weaver will present our findings to the parties you designate. At that time, we will explain our findings, present practical recommendations for improvement (if needed) and answer your questions. The engagement partner and audit senior manager will also bring these reports to meetings as requested, including finance committees, the City Council or managers and administrators. This provides your leaders with the opportunity to ask questions directly and enables us to explain our recommendations and any unusual findings. We will ensure the City leaders are informed of the following information, as well as any other items required by audit standards: ► The auditor's responsibility under generally accepted auditing standards and government auditing standards, including Uniform Guidance for single audits ► Significant accounting policies ► Management judgments and accounting estimates ► Significant audit adjustments ► Other information in documents containing audited financial statements ► Disagreements with management ► Management consultation with other accountants ► Major issues discussed with management prior to retention ► Difficulties encountered in performing the audit ► Auditor's judgments about accounting principles ► Material written communication ► Independence -related issues between the firm and the City ► Confirmation of independence Assistance from Personnel We understand that your finance staff is in charge of the finances of a large enterprise; our objective is to allocate only those tasks to the City work product that will result in the greatest cost - efficiency overall. The list of schedules you provided] is typical of our requests. For all requests for information, we will give the City staff adequate lead time to prepare the requested materials. We will deliver a request list for our interim fieldwork no later than three weeks in advance of the audit team's scheduled arrival. When we conclude our interim fieldwork in your office, we will deliver a tailored list of schedules for final fieldwork based on our understanding of controls and operations developed during the interim fieldwork. Technical Proposal for Annual Audit Services ;I City of Anna RFP #2019-01 Weaver and Tidwell, L.L.P. i Page 20