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Home My WebLink About05-18-10 Special Called Regular Meeting of Fiscal Affairs Committee 2 MINUTES OF THE SPECIAL CALLED REGULAR MEETING OF THE FISCAL AFFAIRS COMMITTEE May 18, 2010 1. Call to Order The meeting was called to order by Chairman Chuck Engelken at 5:02 p.m. Members of Committee Present: Board Members Chuck Engelken, Louis Rigby, Tommy Moser and Alternate member Daryl Leonard. Members of Committee Absent: None Members of City Council, City Executive Staff and City Employees Present: City Manager Ron Bottoms, City Attorney Knox Askins, Director of Finance Michael Dolby, Assistant City Manager John Joerns and City Secretary Martha Gillett. Others present: Phillip Hoot and Kathryn Aguilar. 2. Consider approval of Minutes of the Special Called Regular Meeting of Fiscal Affairs Committee held May 11, 2010. Motion was made by Committee Member Rigby to approve the minutes as presented. A second by Committee Member Moser. The motion carried. Ayes: Engelken, Rigby and Moser Nays: None Abstain: None Absent: None 3. Discuss possible scope of work of the Five Point projects financial transactions, contractor billing concerns and proposed budget - C. Engelken/K. Askins The Fiscal Affairs Committee discussed possible scope of work of the Five Points Projects, financial transactions, contractor billing concerns and proposed budget. It was the consensus of the committee that an RFQ would be sent out. Purchasing Manager Susan Cream will handle the process. They recommended using a scoring sheet. The RFQ will be sent out by May 21, 2010. The committee will meet on June 15th to open and review the RFQ's. 4. Discuss and determine interview questions for audit firm who will be conducting forensic audit. - C. Engelken The Fiscal Affairs Committee discussed interview questions for audit firm conducting forensic audit. They will be finalized once all the RFQ's are received. Fiscal Affairs Committee - Special Called Regular Meeting - May 18, 2010 2 5. Administrative Reports There were no administrative reports. 6. Committee Comments Matters appearing on agenda A. Recognition of community members, city employee, and upcoming events 8. Inquiry of staff regarding specific factual information or existing policy 7. Adjournment There being no further business to come before the committee, the meeting was adjourned at 5:16 p. m. Respectfully submitted, C-/J( dt~~d/ Martha Gillett, TRMC City Secretary Approved this day of 2010. uUu4 ~ Chuck Engelken, Chairman BIDDERS LIST SPECIAL PURPOSE AUDIT SEALED RFQ #10602 Benken and Associates 1214 Heights Blvd Houston, TX 77008 Attn: Brian Benken Ph: 713-223-4051 Fax: 713-223-4052 benkenandassoc@aol.com Wilson, Cribbs & Goren, PC 2500 Fannin Houston, TX 77002 Attn: Reid Wilson Ph: 713-547-8504 Fax: rwilson@wcqlaw.net Thompson & Horton LLP 711 Louisiana, Suite #2100 South Tower Houston, TX 77002 Attn: Deziree Perez Ph: 713-554-6767 Fax: 713-583-8884 reception@thompsonhorton.com First City Tower 1001 Fannin St Houston, TX 77002 Attn: Barron Wallace Ph: 713-758-2222 Fax: 713-615-5076 bwallace@velaw.com Lemond & Lemond, LLC 723 Main St Suite # 316 Houston, TX 77002 Attn: Scott Lemond Ph: 713-223-2500 Fax: 713-223-2505 c1emond@lemond-law.com Tiller and Company PC 1300 Rolling Brook St Suite #603 Bay town, TX 77521-3863 Attn: Mark Tiller Ph: 281-427-7517 Fax: 281-422-5013 mtiller@tillerco.com Null Lairson 3411 Richmond Ave. Houston, TX 77046-3409 Attn: Christopher Breaux Ph: 713-621-1515 Fax: 713-621-1570 cbreaux@null-Iairson.com McDonald & Sechrist LLP 2277 Plaza Dr Suite # 280 Sugar Land, TX 77479 Attn: Jeanne H McDonald Ph: 281-313-2213 Fax: 281-313-2513 Cell: 281-300-3449 ihmcdonald@jhmlaw.net Belt Harris Pechacek, LLLP 730 N Post Oak Rd. Suite # 401 Houston, TX 77024 Attn: Heather Carlson Ph: 713-263-1123 Fax: 713-263-1550 hca rlson@txauditors.com McGrath & Co., PLLC-CPA PO Box 270148 Houston, TX 77277 Attn: Mark McGrath Ph: 713-882-6572 Fax: mark@mcqrath-co.com 3 CITY OF LA PORTE, TEXAS QyALlFICATIONS FOR SPECIAL PURPOSE AUDIT We are pleased to suhmit this proposal for professional auditing services. -\ - - ... Belt Harris Pechacek is standing hy to help you with all of your attestation needs. June 15,2010 Fiscal Affairs Committee City of La Porte, Texas: Thank you for the opportunity to submit our qualifications for the special purpose audit ofthe City of La Porte (the "City"). Belt Harris & Associates has recently merged with John Pechacek, CPA of Bellville, TX, significantly increasing our audit capabilities within the local government sector. We believe that Belt Harris Pechacek is the perfect firm to perform the special purpose audit of the City as outlined below and as further supported by the balance of this proposal document. Direct Access to K/lmvledgeable Decision iHaker As the City's proposed Engagement Partner, Stephanie Harris, CPA, will be onsite working with your management team on any significant audit decisions. This is in stark contrast to other firms who have multiple layers of managers and partners who are typically located in an out of town or out of state office, without face to face time spent directly with the client. This accessibility and ability to make decisions combined with her personal public accounting experience regarding special purpose audits for city clients makes Belt Harris Pechacek a strong choice for your audit team. To solidify the City's confidence in our team's capabilities, we have included a section of this RFQ that addresses each member's background. The special audit experience of Stephanie Harris, CPA is listed on page 9 of this document. Certified Fraud Em11liners As a service for our special project audits, we make an effort to compose a team with a minimum 20% makeup of Certified Fraud Examiners (CFE). These staff members are licensed through The Association of Certified Fraud Examiners (ACFE), the world's largest anti-fraud organization and premier provider of anti-fraud training and education. As members of this organization, our firm has access to exclusive publications, timely and practical anti-fraud training, and targeted educational events that increases our team's awareness of potential fraud within a government agency. Our fraud team makes a consistent effort to apply cutting-edge knowledge to potential real-life fraudulent activity 100% of the time, and we can ensure that you are receiving a thorough investigation of practices by engaging Belt Harris Pechacek. The proposed audit team for the City includes a licensed CFE for the Senior Auditor and In-Charge Auditor position. 'i:i >-t o <: 0.:. 5' (Jq CJ o ~ >-t ~ 8 ~ ~ ..... $>:l >--' ~ Z o ~ '"'d >-t o ::n ..... >- C 0... ...... ..... '" C/) ~ $>:l >--' ~ 0... ~ ...... ..... ::r ~ n ~ >--' >--' ~ ~ n ~ Houston 730 N. Post Oak Rd., Src. 401 HousTon, TX 77024 7]3.263.1123 Partners Robert Bdt, CPA Stephanie E. Harris, CPA Nathan Krupke, CPA Partner of Counsel John R. Pechacek, CPA Bellville 6100 Windy Hill Lane Bd1v;lIe, TX 774]8 979.86\.3169 Austin 100 Congress Ave., Stc. 2000 Austin, TX 78701 \12.381.0222 All Offices "....W\.... tcxasaudirors.coll1 info@")txaudirors.com 71.1.263.1\\0 fax == Governmental _ Audit Quality Center .. Time(v Completion (~lllre .4lUlil As a part of our performance standards, which are disclosed to every client at the beginning of each engagement, Belt Harris Pechacek ensures a report is issued within 15 business days of the completion of field work. It is our goal to hold ourselves to the highest standard in order to meet the needs of our clients. We are committed to completing your audit in a timely manner so that your information is provided while it is still fresh on your mind and relevant to your decision-making. LTlliq lie Philosophy At Belt Harris Pechacek, we recognize the importance of details. Our goal is to go above and beyond your expectations. We continually evaluate our processes and equip all staff with the newest and fastest techniques and technologies to ensure we are performing at our highest efficiency. We carry this same philosophy to our review of our clients' operations, always being mindful of the best practices and communicating our observations. From this proposal to your final audit, and all of the steps in between, you will recognize our thoughtful attention to details in a unique manner. In short, we are confident in our ability to provide you with unparalleled auditing services. We would be delighted to provide the audit services of the City, and we look forward to the opportunity to work with you. As always, we welcome your questions, so please feel free to contact me or any member of our staff. Sincerely, ~ Robert Belt, CPA, Managing Partner Belt Harris Pechacek, LLLP CITY OF LA PORTE CERTIFICATION BY RESPONDENT City of La Porte Ordinance #98-2217 prohibits any expenditure for goods or services by the City of La Porte from any person, firm, or corporation owing any delinquent indebtedness to the City. The undersigned respondent further certifies that it is in compliance with the requirements of said ordinance. A copy of the ordinance may be obtained by contacting the City of La Porte Purchasing Division at 281-470-5126. If undersigned respondent is not in compliance with Ordinance 98-2217, it hereby assigns to the City of La Porte, the amount of its delinquent indebtedness to the City of La Porte, to be deducted by the City of La Porte from the amounts due the undersigned. Failure to remit this certification with the submittal, or non-compliance with said ordinance, shall be just cause for rejection or disqualification of submittal. fi!i The undersigned hereby certifies that it is in compliance with Ordinance 98-2217. or _ The undersigned assigns to the City of La Porte, the amount of its delinquent indebtedness, to be deducted by the City of La Porte from the amounts due the undersigned. (Initial one of the above) Business Name: Belt Harris Pechacek, LLLP 730 N. Post Oak Rd., Ste. 401 Houston. TX 77024 o {', . J\\ r\~ \0. Address: Printed Name: Robert Belt, CPA r2u-r; + Authorized Signature: Date: June 15,2010 3 L _ _ _ _ __ -- -,-tl Technology plays a vital role in the service, quality, and value that we provide to our clients. Our auditors are prepared with advanced mobile offices allowing them to complete field work more efficiently. OVERVIEW Our firm audits governments exclusively and operates from three locations, an office in Austin, Bellville, and Houston, Texas. Consequently, we audit large entities relative to our total staff size. This sole focus enables us to structure our firm in a way that provides increased value to our audit clients by allowing our staff to gain concentrated expenence. By electing to exclusively serve the needs of governments, we built a reputation of excellence and our firm has maintained a 20% average annual growth rate in new clients, while maintaining one of the highest client retention rates in the industry. We have accomplished this by focusing not only on a specific market segment (government audits) but also on quality clients and exceptional team members for our firm rather than on quantity. A listing of our clientele and contact information is included in the experience section of this proposal. EXPERIENCED STAFF The government experience level of our audit team is unsurpassed, as they are strictly dedicated to this task. Normally, this concentration of talented and experienced personnel could only be found in a firm of 400+ employees but we have found that we can provide the best service, at the lowest possible rate to our clientele, by concentrating our technical and other resources in one area, without the demands of a corporate audit or tax season. After only one year of working for Belt Harris Pechacek, new staff auditors will have expended lOO% of their chargeable time to this area. Contrasted to other firms that will put staff on multiple unrelated projects, our clients benefit from exceptionally skilled auditors. We surpass the government audit capabilities of considerably larger firms. Our staff's knowledge, understanding, and ability to audit a government are unmatched. We attract and retain staff by promoting family values and frowning on excess overtime. The lack of a "tax season" helps ensure our staff stays fresh and focused on auditing 100% of the time. ELEMENTS OF THE BELT HARRIS PECHACEK SEAL OF EXCELLENCE ;, The monument symbolizes our sole dedication to Texas governments. o The leaves represent our continued pursuit of excellence. * The lone star represents independent attestation without compromise. ~~"~~._..,-~ The ribbon represents unwavering blue ribbon customer service. 1he seal represents our commitment to uphold professional standards. Combined, our seal represents the core values of our firm. 5 ~xI RM/ ~.'^;I}.(C1lk YOUR EXPERIENCED AUDIT TEAM Our commitment to serving our government clients is reflected in the caliber of our personnel. Our staff is highly trained and dedicated to serving you. Our staff can offer your organization a new perspective. Our government and nonprofit focus provides us with clearer vision and a comprehensive understanding of your needs. We pride ourselves on having the most courteous auditors who will respect your staff and work environment while being the very best at what they do - auditing governmental entities. We have an unmatched audit team to serve you, and we pledge that if changes to our lineup become necessary, their replacements will be equally qualified and experienced. The proceeding pages provide details regarding experience for the individual team members that are listed in the chart below. 6 EXPERIENCE: Man~ng Partner Belt Harris Pechacek, LLLP . Certified Public Accountants July 1999 to Present Senior Manager White Petrov McHone (now BKD) Certified Public Accountants February 1997 toJuly 1999 Partner Lairson, Stephens & Reimer, LLP. (formerly Earl Lairson & Co., now Null Lairson) Certified Public Accountants January 1989 to February 1997 EDUCATION: Bachelor of Business Administration Stephen F. Austin State University December 1988, Accounting Major ACCOMPLISHMENTS: Recipient of the AICPA's Certification of Educational Achievement in Financial Audits Serve on Government Finance Officers Association (GFOA) Special Review Committee Speaking engagements: Audit and Budget Process Texas Association of Appraisal Districts Compilation and review procedures NCCPAP Compilation and review procedure.. update NCCPAP Financial statement disclosures NCCPAP Introduction to Accountingfor Cities ARTICLES PUBLISHED "I Rotate My Tires, Should 1 Do the Same with My City's Auditors", The Texas Municipal League Official Publication Oct 2006; The Municipal Maryland League Official Publication April 2007 . li)mlerly opt.'fatcd as Belt Harris & AssociUh:S, LLLP ROBERT BELT, CPA EXECUTIVE SUMMARY: 20 years public accounting audit experience Clientele of over 75 mid size to large government and nonprofit entities Named partner at age 29 (with only 8 years experience) Over 900 financial statement audits* Over 100 special projects related to fraud, allegation inquiry, revenue enhancement, and operational review* Over 130 single audits and yellow book audits* Over 120 GFOA award winning reports* Recipient of AICPA's Certificate of Educational Achievement in audits of governments Reviewer in GFOA's Certificate of Achievement in Excellence in Financial Reporting program (special review committee) *prepared or reviewed SPECIAL PROJECTS PERFORMED (PARTIAL LIST): RACIAL DISPARITY STUDY Evaluated racial disparity in the issuance of citations to motorists and the resulting arrests. This study was prompted by an unfavorable article that appeared in the Houston Chronicle. The report issued outlined deficiencies in the way in which data for the article was gathered and disproved the assertions made in the article with regard to racial biased arrest. CITY MANAGER PURCHASES Investigated unusual purchases made by management under allegations of improprieties. OFFICIAL MISCONDUCT OF PUBLIC OFFICIALS Testified regarding audit findings resulting in the successful prosecution ofthe Finance Director and Mayor. MISAPPROPRIATIONS BY UTILITY CLERK Conducted detailed review of utility collections resulting in the resignation of the billing clerk and restitution to the City of misappropriated funds. INTERNAL CONTROL REVIEW Performed detailed analysis of the internal controls and prepared a complete policy and procedures manual. INTERNAL AUDIT FUNCTIONS Conducted a turn-key project to develop and implement an internal auditing function in a rapidly growing city. CAPITAL ASSET SYSTEM Constructed a detailed database of all capital assets complete with bar code reading software (over 15,000 items). CAPITAL ASSET INVENTORY SERVICE PROCUREMENT SERVICE Assisted numerous entities in procuring services for capital asset inventory, preparing RFPs, reviewing bids, negotiating reduced fees, and verifYing work perfonned. CASH AND INVESTMENT MANAGEMENT SYSTEM Designed turn-key cash and management system complete with cash forecasting models and policy and procedures manual for a $30,000,000 portfolio. PUBLIC FUNDS INVESTMENT ACT Wrote and updated numerous investment policies and procedures in compliance with PFIA. LANDFILL MARKET ANALYSIS Performed final review and acted as liaison in a special marketing analysis for a county (client) owned landfill. MUNICIPAL COURT CLERK RETIREMENT Perfonned agreed upon procedures for the municipal court to ensure the proper handling of transactions up to the Court Clerks' retirement, per the request of the municipal court clerk. INVESTIGATION OF ALLEGED IMPROPRIETIES - POLICE DEPARTMENT Performed detailed investigation of eight alleged improprieties regarding the police department's operations. 7 RECOVERY OF CONSULTANT FEE Recalculated a consultant fee in accordance with contract tenns and negotiated a $1,000,000 recovery to the client. DRUG FORFEITURE CASH ACCOUNT Reviewed compilation and handling procedure of drug forfeiture cash account. REVIEWED RISK ASSESSMENT PROCESS Conducted a study of the risk assessment process of the appraisal operation for an organization with a 550,000,000 operating budget. MUNICIPAL COURT OPERATIONS REVIEW Reviewed the operations of municipal court resulting in significant revenue enhancements to the City and increase in efficiencies and management control. SALES TAX ALLOCATION TESTING Performed numerous tests of the Comptrollers' allocation of sales tax to jurisdictions resulting in significant recoveries to clients. HOTEL/MOTEL TAX AUDITS Perfonned numerous tests of hotel/motel tax submissions. CITIZEN SURVEY COMPILATION AND ANALYSIS Compiled and summarized four separate surveys consisting of approximate 3,000 responses per survey. RATE STUDIES Perfonned numerous water and waste water rate studies. FUND BALANCE STUDIES Performed detailed study and report on optimum fund balance amounts for operating and debt service funds for numerous entities. CLIENTS SERVED: Cities City of Alvin City of Baytown City of Bella ire City of Bunker Hill Village City of Clear Lake Shores City of Con roe City of Crocket City of Dayton City of EI Lago City of Friendswood City of Galena Park City of Goodrich City of Hedwig Village City of Hilshire Village City of Hunters Creek City of Humble City ofJacinto City City ofKaty City()f La PQrte City of League City City of Mont Belvieu City of Nassau Bay City of Nederland City of Onalaska City 0 I' Pasadena City of Pearland City of Piney Point Village City of Seabrook City of Shenandoah City of Spring Valley Village City of South Houston City of Splendora City of Sugar Land City of Taylor Lake Village City of Waller City of Webster City of West Lake Hills City of West University Place Village of Bear Creek Cities Other l!overnmental audits manal!ed or in which technical review was oerformed: City of Alvin City of Baytown City of Bellaire City of Bunker Hill Village City of Clear Lake Shores City ofConroe City ofCrocket City of Dayton City of EI Lago City of Friendswood City of Galena Park City of Goodrich City of Hedwig Village City of Hilshire Village City of Hunters Creek City of Humble City of Jacinto City City ofKaty City of La Porte City of League City City of Mont Belvieu City of Nassau Bay City ofNederland City ofOnalaska City of Pasadena City of Pearl and City of Piney Point Village City of Seabrook City of Shenandoah City of Spring Valley Village City of South Houston City of Splendora City of Sugar Land City ofTaylor Lake Village City of Waller City of Webster City of West Lake Hills City of West University Place Village of Bear Creek City of Brookshire Brookshire Municipal Utility District City of Hillcrest County of Galveston City of Manvel Fort Bend County City of Rosenberg Oak Ridge North EDC City of Oak Ridge North Rosenberg Development Corp City of Wallis Town of Beasley Other Governmental Units Alabama-Coushatta Econ. Dev. Auth. Alabama-Coushatta Indian Housing Auth. Alabama-Coushatta Tribe of Texas Angelina and Neches River Authority Austin County Juvenile Probation Dept. Bay town Area Water Auth. Chambers County Appraisal District Grimes County Gulf Coast Waste Disposal Authority Harris County Appraisal District Harris County MUD 50 Harris Co. w.eI.D. Fondren Road IAH Public Facility Corporation Lakeview Police Depattment La Marque Economic Dev. Corp. La Porte Economic Dev. Corp. Liberty County Lone Star Groundwater District Memorial Villages Police Depattment Montgomery County MUD No.2 Northwest Harris Co. MUD No. 19 Pearland Industrial Dev. Corp. Polk Central Appraisal District Polk County San Jacinto County San Jacinto County Headstart Shenandoah Economic Dev. Corp. Sugar Land Economic Dev. Corp. Sunbelt FWSD Tyler County Upper Kirby Management District 258th Judicial District Adult Probation 258th Judicial District Juvenile Probation Participation in nonprofit en~al!ements includes: Annand Bayou Nature Center The Living Bank International Braeswood Assembly of God Neuhouse Education Center Boy's and Girl's Country Onalaska Water Supply Corporation Conroe Vol. Fire Department Pension Fund Spring Branch ISD Education Foundation First Baptist Church of Katy Star of Hope Harris County Mayors' and Councils' Association Texas Paralyzed Veterans Association Katy Vol. Fire Depattment Thyroid Society League City EMS U.S. Atiica Energy Association League City Vol. Fire Department EXPERIENCE: Partner Belt Harris Pechacek, LLLP . Certified Public Accountants September 2004 to Present City Accountant City of Clear Lake Shores, Texas December 2002 to August 2004 EDUCATION: Bachelor ofBusioess Administration University of Houston Clear Lake December 2003 Accounting, Cum Laude PROFESSIONAL ORGANIZA nONS: Government Finance Officers Association, member since September 2004 Association of Certified Fraud Examiners, member since May 2007 American Institute of Certified Public Accountants, member since January 2009 Texas Society of CPA's, member since January 2009 'I< tonllcrly operated as Belt Harris & Associillt.'S, LLLP STEPHANIE E. HARRIS, CPA EXECUTIVE SUMMARY: Since joining the firm in 2004, Stephanie has obtained her license as a Certified Public Accountant and has been promoted from Senior Auditor to Audit Manager to Partner. She is currently in the process of obtaining her certification as a Certified Fraud Examiner. She has OVer 50 governmental audits, many of which received the GFOA Certificate of Reporting Excellence. Special projects include a fraud investigation and compliance analysis with the Texas Commission on Environmental Quality (TCEQ). Prior to joining the firm, she worked as the City Accountant for the City of Clear Lake Shores. While with the City, she was able to reCover over $100,000 in misappropriated sales tax and franchise revenues. SPECIAL PROJECTS: INVESTIGATION OF ALLEGED FRAUD WITHIN CITY ENTITY Reviewed concerns related to the City's financial operations and compliance with laws and regulations; obtained understanding of certain related party transactions, as well as, compliance with laws and regulations in relation to certain contracts. INVESTIGATION OF ALLEGED FRAUD - MUNICIPAL COURT Conducted detailed review of municipal court collections, determined misappropriations had been made, and outlined methods employed. SALES TAX Performed detailed review of sales tax records maintained by the Texas Comptroller's Office which resulted in significant recoveries of misappropriated sales tax dollars for: . City of Bay town . City of Galena Park . City of Hilshire Village . City of Pasadena COMPLIANCE ANALYSIS WITH TCEQ Performed compliance analysis on calculations made by Polk County to demonstrate compliance with the Texas Commission on Environmental Quality's (TCEQ) local government financial assuranCe test as outlined in Title 30 of the Texas Administrative Code Section 37.271 (5) for its municipal solid waste facility for the last three years. CLIENTS SERVED: Cities City of Angleton City of Bay town City of Bellaire City of Bunker Hill Village City of Clear Lake Shores City of Dayton City of El Lago City of Galena Park City of Hedwig Village City of Hilshire Village City of Hunters Creek Village City of Jacinto City City of League City City of Magnolia City of Mont Belvieu City of Nassau Bay City of On alaska City of Oak Ridge City of Palestine City of Piney Point Village City of Pasadena City of Seabrook City of South Houston City of Splendora City of Spring Valley Village City of Webster City of West Lake Hills City of West University Place City of Taylor Lake Village City of Tomball City of Waller Village of Bear Creek 9 CLIENTS SERVED (CONT.): Counties Leon County Chambers County Grimes County Polk County Liberty County San Jacinto County Other Governmental Units Alabama- Coushatta Tribe of Texas Alabama- Coushatta Benefits Plan Bay town Area Water Authority Chambers County Appraisal District Gulf Coast Waste Disposal Authority Harris County Appraisal District 10 Harris County Mayors' and Councils' Assoc. Harris County MUD #50 Harris County W.C.l.D. Fondren Road Lakeview Police Department Living Bank International Memorial Villages Police Department Montgomery County ESD 7 Polk Central Appraisal District Texas Southern University Texas Paralyzed Veterans U.S. Africa Energy Association FJR~/ r" C~J(c/?!~ ?: _j / c/t/t c ADDITIONAL EXPERIENCED TEAM SENIOR MANAGER Tray Moses · 19 years government and non-profit audit experience · More than 200 yellow book/single audits · More than 500 governmental audits with approximately 400 school district audits · Approximately 20 non-profit audits · Approximately 40 agreed upon procedures engagements · Current Treasurer - Austin County Go Texan Committee · Past Treasurer - Bellville Chamber of Commerce · Past Treasurer - Austin County Fair Board · More than 7 years experience as an Audit Manager SENIOR AUDITOR Amanda S. Wilbert, CFE · 3 years of public accounting audit experience · Bachelor of Science in Accounting & Forensic Accounting · Graduate of Edinboro University of Pennsylvania · Summa Cum Laude · Candidate for Certified Public Accountant · Certified Fraud Examiner IN-CHARGE AUDITOR Scott Kohler, CFE · 4 years of Accounting Experience · Bachelor of Science in Accounting · Graduate ofthe University of Houston Clear Lake · Candidate for Certified Public Accountant · Certified Fraud Examiner 11 BELT HARRIS PECHACEK, LLLP Certified Public Accountants HOUSTON 730 NORTH POST OAK ROAD, SUITE 401 HOUSTON, TEXAS 77024 (713) 263.1123 PHONE (713) 263.1550 FAX BELLVILLE 6100 WINDY HILL LANE BELLVILLE, TX 77418 (979) 865.3169 AUSTIN 100 CONGRESS AVENUE, SUITE 2000 AUSTIN, TEXAS 78701 (512) 381.0222 y~~ po-a ftF tlfe ~o-Ftanttp to- /ifeJent o-aF /lFm. Governmental and Nonpro/it Audits Sealed with Excellence CITY OF LAPORTE, TX Governmental Audit Quality Center - SPECIAL PURPOSE AUDIT RFQ #10602 Presented by li'L Null. Lairson CI::RTIFIED PUBUC ACCOUNT/\NTS PROFESSIONAL CORPORATION 3411 Richmond Avenue, Suite 500 Houston, Texas 77046 Telephone: (713) 621-1515 Fax: (713) 621-1570 contact person Christopher Breaux, CPA .. - TABLE OF CONTENTS - Paee - Cover Letter Technical component Firm Qualifications and Experience Project Approach Partner, Supervisory and Staff Qualifications and Experience - 3 5 7 - - Attachments Certification by Respondent - 11 - - - - - - - - - - - J!'L Null&L.airson rnuRDl'UIlUC~ JllU'ESSOIlAl~rn June 10,2010 To the Fiscal Affairs Committee City of La Porte, Texas Weare pleased to submit our qualifications to provide special purpose auditing services for the City of La Porte, Texas as detailed in the City's Request for Qualifications # 10602. The overall strength of services we offer can be stated as follows: ,/ Specialized governmental expertise. Null-Lairson's professional staff has very diverse employment experience, in such varying areas as construction audits, interlocal agreements, fraud investigations, arbitrage compliance, organizational appraisals, technology studies, and related matters involving highly-specialized applications. Also, some have experience as internal governmental auditors and finance directors. Our Firm has been conducting municipal audits for over thirty years. We currently serve as auditors for over 75 governmental entities. Our partners have been recognized for their expertise and regularly conduct seminars on various governmental accounting, auditing and financial reporting topics for the Texas Society of Certified Public Accountants, other CPA firms, the Government Finance Officers Association of Texas, and the Texas Association of School Business Officials. ,/ Communications. Our approach to client service emphasizes communication throughout the year. This is particularly important in the current audit climate of increasingly difficult auditing and reporting requirements. We are easily accessible and available for discussions and assistance as desired. ,/ Null Lairson, P.C., is adequately staffed and we are committed to performing the requested services in a timely manner in order to provide management with sound and objective financial information and advice. Weare committed to performing the services requested within the time period requested. We appreciate the opportunity to serve the City and look forward to meeting with you and discussing further our audit philosophy, approach, and methodology. Sincerely, ~ Jf;;?~/RC Null-Lairson, P.c. 341] Richmond Avenue [Suite 500 I Houston. TX 770461 (P) 713.621.1515 [ (F) 713.621.1570 2000 Loop 197 North 1 Suite 2001 Texas City. TX 77590 [(P) 409.948.44061 (F) 409.948.0364 www.null-lairson.com MEMBERS: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS. TEXAS SOCIETY OF CERTIFlED PUBLIC ACCOUNTANTS CPA ASSOCIA TES INTERNATIONAL. INe. WITH ASSOCIATED OFFICES IN PRINCIPAL u.s. AND INTERNATIONAL CITIES - - - - - - - - - TECHNICAL COMPONENT - - - - - - - - - t,'L 2 - FIRM QUALIFICATIONS AND EXPERIENCE General Null-Lairson, P.c., is composed of approximately 75 professional auditors, financial management consultants, accountants, and support staff committed to the philosophy of providing quality and timely services to our municipal clients. The firm's primary emphasis in providing services is to assist clients in achieving the utmost success in reaching their goals. Providing services since the early 1970s, Null-Lairson, P.c. serves municipalities, school districts, and other governmental clients throughout the Texas Gulf Coast from offices in Houston, Galveston, Texas City, and Sugar Land. We provide all customary services expected of a progressive and proactive accounting firm. The firm's strengths are based on past and ongoing success in helping clients accomplish their individual and organizational goals and objectives. A vailability of Staff Below is a table describing the makeup of our staff both in terms of total staff and staff primarily assigned to governmental auditing functions. Staff Level Total Staff Governmental Audit Partner 10 5 Manager 12 6 Senior 16 8 Staff 22 15 Support 17 10 Totals 77 44 The firm is adequately staffed with professional and support personnel to provide all necessary services and to maintain personalized involvement with each client. The number and nature of the professional staff to be dedicated to the City of La Porte 5-Points project engagement is outlined in the Project Approach section in this document. Each client is actively encouraged to call us any time the need arises. Availability of Expertise We encourage clients to consult with our professionals, some of whom have experience as internal governmental auditors and finance directors, and in such diverse areas as construction audits, interlocal agreements, fraud investigations, arbitrage compliance, organizational appraisals, technology studies, and related matters involving highly-specialized applications. Outside of the government-specific involvement of firm members, we have individuals certified in financial planning and valuation analysis areas (as well as payroll specialists) ready to answer questions and help initiate solutions. li'L 3 - FIRM QUALIFICATIONS AND EXPERIENCE - External Quality Review - As a member of CPA Associates International, a worldwide association of quality-oriented accounting firms, our firm has completed an association peer review performed by members of the group in accordance with the American Institute of Certified Public Accountants' Private Companies Practice Section requirements. This peer review covered the year ended December 31,2007, and resulted in an unqualified opinion and included a review of specific governmental engagements. - - Insurance Coverage - We certify that the Firm carries professional liability and other appropriate insurance in excess of the City's requirements as a normal course of business. If selected, the firm will provide a certificate of insurance attesting to that coverage, if necessary. - Relevant Experience and References - Null Lairson, P.C., has provided core audit services and various forms of consulting services ranging from entity-wide organizational structure studies to detailed review of specific transactions, including developer and construction transactions. - This listing of clients is for the use of the City only in evaluating our proposal and is not to be used for any other purpose and is not to be distributed to anyone outside those persons involved in the selection of auditors for the City. - Below is a partial listing of relevant references. Additional references are available if desired. - - Galveston Island Mr. Steve LeBlanc Redevelopment 409.797.3525 Christopher Breaux 2001-2010 - Authori City Manager Katy Development Mr. Byron Hebert 281.391.4800 Christopher Breaux 2000-2010 Authority Director of Finance - Sugar Land Ms. Linda Symack Christopher Breaux Development Director of Fiscal Services 281.275.2748 Tom Pedersen 2001-2010 Co oration - City of Manvel Ms. Phyllis Smith Herbst 281.369.3150 Christopher Breaux 2001-2010 City Accountant - Malcomson Road Mr. Ron Young 713.915.0800 Helen Duval 2001-2010 Utility District Attorney - - li'L 4 - PROJECT APPROACH We understand the unique organizational structure and operating environment under which cities operate and have developed procedures designed specifically for special purpose audit engagements. We understand the scope of the project as described in the City's RFQ is as follows: . Review all transactions of 5-Points project . Review transactions between the City and the Developer . Review financial real estate transactions . Review URS (vendor) billing as they apply to policies and procedures · Determine whether the funds for the Type B Development Corporation were properly applied to the project Segmentation of Audit and Staffmg Plans Our auditing and consulting service approach includes the most current techniques available. In addition to the heavy involvement of our partners and managers, our staff will also be familiar with the City's operating environment due to their ongoing involvement with other municipal and special purpose audit engagements. A brief overview of the different phases or segments of our audit process is as follows: The Planning Phase Prior to any fieldwork being performed, strategic planning sessions are held both internally and with the City's staff to identify key audit and operational issues, establish communications with critical firm, City staff, and relevant third parties, as well as determining timing and individual responsibility schedules. We will also meet with the Fiscal Affairs Committee to discuss any specific matters of concern. The planning phase will also entail us gaining a thorough understanding of the agreements and contracts in place between the City and Developer, which would include reviewing contracts and agreements to compare with actual transactions in order to verify contract compliance. We will also ascertain the proper use of funds for the Type B Development Corporation as it relates to the 5-Points Project by determining the purpose executed by those charged with governance, which will be compared to actual transactions during audit fieldwork. Fieldwork Our audit programs for the City of La Porte 5-Points project will include procedures related to review and evaluation of its developer and financial real estate transactions, determination of compliance with vendor billing policies and procedures, determination of compliance and proper application of funds dedicated to the project, statistical sampling and analytical procedures designed to determine reasonableness of costs that can lead toward evaluating efficiency and effectiveness in administrative operations. Report Issuance and Closure Report issuance and exit conferences of an audit are often the most critical portions because it is in this phase that most external communications are discussed. Our reports undergo an internal quality control process in which our Quality Control partners review reports to ensure they are meeting firm and general accounting and reporting standards. We also have technical support from our administrative professionals to make certain that reports and other deliverables are meeting high quality standards. The results of our audit will be reviewed with the appropriate level of management, including the Fiscal Affairs' Committee and others charged with governance. This review will also include our audit findings li'L 5 - PROJECT APPROACH - and proposed recommendations, which often lead to a plan of action by City management to make any needed improvements in a manner that is not only theoretically but practically sound. We find this method of exiting on the audit process brings the most value to the City. - .. Level of Staff The level of staffing commitment to complete this engagement segmented by audit phase is as follows: - - Partners-( 1 ) Managers-( 1) Senior Staff-( 1) Totals 5 10 5 20 10 20 60 90 20 20 10 50 35 50 75 160 - - Timeline The following is a sample of the type of timing and planning schedules we would recommend after working closely with the City's administrative staff to formulate and complete the specific timing requirements detailed by the City's management. However, given the sizable amount of staff we have available, Null- Lairson is very flexible and can conduct the audit at a time that is most convenient for the City. - - July 1-16,2010 Audit Coordinators for City and Firm named and mutually agreed upon. - Review of preliminary schedule with the finance department staff. July 19-31, 2010 Entrance conference rior to interim work with the Fiscal Affairs' Committee. Understanding and documenting processes, procedures, and controls involved in the accounting and reporting of the 5-Points project, with specific emphasis on issues raised by the Fiscal Affairs' Committee and management. - - Review of contracts and agreements related to the project. - Detailed review of 5-Points project transactions, including billings, to ensure developer's compliance with agreements and contracts. August 1-10,2010 Evaluation of resources used for the Project to determine if they were properly applied. Review of report draft and recommendations with the Fiscal Audit Committee and Management. - - Issuance of final report. - - li'L 6 - PARTNER, SUPERVISORY AND STAFF QUALIFICATIONS AND EXPERIENCE Experience Areas of Special Knowledge Education Certifications Affiliations /!'L Christopher Breaux, CPA (licensed in the state of Texas) Partner-Audit and Advisorv Services Null-Lairson, PC, Houston, Texas Partner, 1985-present . Expertise in auditing and consulting services to municipalities, school districts, counties, and special districts, as well as a variety of non-profit and private sector clients, a large percentage of whom receive both federal and state funding and/or are subject to specific regulatory reporting requirements. . Provides sound advisory services relating to matters unique to municipalities including capital project expenditures, complex contractual agreements, interlocal agreements, debt transactions, and other transactions · Providing advisory services to municipal clients in the areas of workflow studies, financial compliance systems and reporting, program compliance, and other finance-related legal compliance areas. . Preparation and review of Comprehensive Annual Financial Reports that have been awarded a Certificate of Achievement for Excellence in Financial Reporting. He has been awarded the Certificate of Educational Achievement in Governmental Accounting and Auditing by the AICPA. . Well-respected, active member of local chambers and other business organizations, committed to assisting in the development of the community. Texas A & M University Bachelor of Business Administration, Accounting, 1984 Certified Public Accountant, Texas 1987 Certified Public Accountant, Tennessee 2007 American Institute of Certified Public Accountants Texas Society of Certified Public Accountants Government Finance Officers Association Texas Association of School Business Officials, associate member National Committee for Government Services, CPA Associates International 7 - PARTNER, SUPERVISORY AND STAFF QUALIFICATIONS AND EXPERIENCE - Experience Areas of Special Knowledge Education Certifications Affiliations li'L - - Troylynn Robichaux, CPA, CIA (licensed in the state of Texas) Manager-Audit and Advisory Services - Null-Lairson, pc, Houston, Texas Manager, 2005-present - . Experienced in examining complex transactions such as capital project expenditures, specialized financial arrangements, interlocal agreements, and other specialized governmental transactions. . Provides practical internal control recommendations to clients, resulting in more effective and efficient practices and procedures. . Offers guidance to clientele regarding complex federal program compliance requirements. . Succinctly oversees the execution of audit field work in order to not disrupt the client's customary operations. . Trains staff in a formal group setting and mentors/coaches staff on a one-on-one basis. · Preparation and review of Comprehensive Annual Financial Reports that have been awarded the Certificate of Achievement for Excellence in Financial Reporting. ~ - .... - PricewaterhouseCoopers, Houston, TX September 12000-September /2005 - . Managed audit staff in performing audit tasks including reviewing and testing accounting records and internal controls, performing analytical procedures, and documenting audit results. . Reviewed SEC documents for public corporations and supervised staff in assimilating and reviewing supporting evidence for such reports. . Responsible for the execution of field audit work including preparation of engagement time budgets in order to ensure that adequate resources would be utilized to obtain work effectiveness and efficiency. - - Additional experience includes evaluating control procedures and reporting on issues noted, managing complex federal program audits, presentation of information to upper management and those charged with governance. - Tulane University Bachelor of Science, Management (1996) - University of New Orleans Master of Science, Accounting (2000) Certified Public Accountant, 2001 Certified Internal Auditor, 2003 - American Institute of Certified Public Accountants Texas Society of Public Accountants Institute of Internal Auditors - - 8 - PARTNER, SUPERVISORY AND STAFF QUALIFICATIONS AND EXPERIENCE Experience Areas of Special Knowledge Education Certifications Affiliations li'L Geoffrey Veuleman, CPA (licensed in the state of Texas) Senior-Audit and Advisory Services Null-Lairson, pc, Houston, TX Audit Senior, Present . Manages audit staff in performing audit tasks for governmental engagements including reviewing and testing transactions and internal controls, performing analytical procedures, and documenting audit results. . Evaluates compliance with established rules and guidelines per agreements. . Experienced in specialized construction audits with private entities. . Responsible for the execution of field audit work including preparation of engagement time budgets in order to ensure that adequate resources would be utilized to obtain work effectiveness and efficiency. · Performs control testing to determine risk factors used in executing audit procedures. . Offers guidance regarding complex federal program compliance requirements. . Provides staff training in a formal group setting and mentors/coaches staff on a one-on-one basis. Additional experience includes examining and testing complex federal and state program audits, testing internal controls and providing recommendations for improvement and compiling reports in compliance with GAAP and regulatory guidelines. Lamar University Bachelor of Business Administration (2004) Certified Public Accountant, 2007 American Institute of Certified Public Accountants Texas Society of Public Accountants 9 - .. - - - - - - - ATTACHMENTS - - - - - - - - - 10 - CITY OF LA PORTE CERTIFICATION BY RESPONDENT City of La Porte Ordinance #98-2217 prohibits any expenditure for goods or services by the City of La Porte from any person, firm, or corporation owing any delinquent indebtedness to the City. The undersigned respondent further certifies that it is in compliance with the requirements of said ordinance. A copy of the ordinance may be obtained by contacting the City of La Porte Purchasing Division at 281-470-5126. If undersigned respondent is not in compliance with Ordinance 98-2217, it hereby assigns to the City of La Porte, the amount of its delinquent indebtedness to the City of La Porte, to be deducted by the City of La Porte from the amounts due the undersigned. Failure to remit this certification with the submittal, or non-compliance with said ordinance, shall be just cause for rejection or disqualification of submittal. ---I:ib.... The undersigned hereby certifies that it is in compliance with Ordinance 98-2217. or _ The undersigned assigns to the City of La Porte, the amount of its delinquent indebtedness, to be deducted by the City of La Porte from the amounts due the undersigned. (Initial one of the above) Business Name: Null-lairson. PC Address: 3411 Richmond Ave. Houston. TX 77046 Printed Name: Null-lairson PC Authorized Signature: ~ ..#pl~,I.e c)o/ . f 1'./ t, \ \i \\ Date: June 9. 2010 11