MSL Moore Stephens Lovelace RFP FN-2016-06 Audit Services Proposal from MSLProposal for Professional
Auditing Services
The City of
South Miami
April 15, 2016
PROPOSER
Moore Stephens Lovelace
701 Brickell Avenue, Suite 550
Miami, FL 33131
SUBMITTED BY
William Blend, CPA, CFE
Shareholder
wblend@mslcpa.com
800.683.5401
COPY
TABLE OF CONTENTS
Transmittal Letter
Independence ................................................................................................................................. 1
License to Practice in Florida .......................................................................................................... 2
Firm Qualifications and Experience ................................................................................................ 4
Firm History ................................................................................................................................. 4
Size of the Firm ............................................................................................................................ 4
Location of the Office that Will Oversee Services to the City ..................................................... 5
Relevant Governmental Auditing Experience ............................................................................. 5
Continuing Professional Education in Government Accounting ................................................. 8
Principal Staff Assignments and Experience ............................................................................. 10
Client Reference List .................................................................................................................. 19
Staff Quality and Continuity ...................................................................................................... 19
Prior Engagements with the City of South Miami ........................................................................ 20
Similar Engagements with Other Government Entities ................................................................ 21
Audit Approach ............................................................................................................................. 22
Overview ................................................................................................................................... 22
Standards-Based Audit Approach ............................................................................................. 22
Proposed Segmentation of the Engagement ............................................................................ 22
Level of Staff to be Assigned to Each Proposed Segment of the Engagement. ........................ 28
Samples Size and the Extent to Which Statistical Sampling is to be Used in the Engagement 29
Extent to Use of EDP Software in the Engagement .................................................................. 30
Type and Extent of Analytical Procedures to be Used in the Engagement .............................. 31
Approach to be Taken to Gain and Document an Understanding of the City’s Internal Control
Structure .................................................................................................................................... 32
Approach to Determining Laws and Regulations that will be Subject to Audit Test Work ...... 32
Approach to be Taken in Drawing Audit Samples for Purposes of Tests of Compliance ......... 33
Identification of Anticipated Potential Audit Problems ............................................................... 34
Required Forms ............................................................................................................................. 35
Additional Information ................................................................................................................. 50
Certificate of Achievement for Excellence in Financial Reporting ............................................ 50
External Quality Control Review ............................................................................................... 51
Price Proposal Sheet ..................................................................................................................... 53
April 14, 2016
Maria M. Menendez, CMC
City Clerk
City of South Miami
6130 Sunset Drive
South Miami, FL 33143
RE: RFP #FN-2016-06 – External Audit Services
Dear Ms. Menendez and Members of the Auditor Selection Committee:
Moore Stephens Lovelace, P.A. (MSL), sincerely appreciates the opportunity to provide you with our
credentials and capabilities to serve as the City of South Miami, Florida’s (the City) independent auditors.
Understanding of Municipalities
All members of our engagement team have served municipal clients in the state of Florida. This means we
understand the issues that are unique to the City. Our engagement team members have provided services
to Ft. Lauderdale, Pembroke Pines, Tampa, Vero Beach, Cocoa Beach, and Daytona Beach, just to name a
few. This means we understand the issues unique to a Florida city that will enable us to properly evaluate
the accounting and reporting risks specific to your City, such as: Cash and Cash Equivalents, Debt, including
Bonds, Notes Payable and Capital Leases, and Defined Benefit Pension Plans.
MSL’s Commitment to the City of South Miami
MSL’s commitment to the City is to meet all deadlines and respond to all of your inquiries and requests
promptly. We will communicate with you at every level, including at City Commission meetings. This
communication will include reporting financial results, audit issues, future accounting and reporting issues,
and other issues that impact your financial statements and the audit process. As part of our service, an IT
assessment will be performed each year and will provide (at no additional cost) technical support related to
all new accounting and reporting pronouncements by our nationally recognized experts. During the
engagement, MSL will only assign staff members from our Governmental Practice Group (GPG). This will
ensure that you are always working with an audit team highly experienced in governmental accounting and
auditing.
High-Quality Services at a Value
All of our government clients continue to seek ways to cut costs while obtaining the best professional service.
MSL’s experience and thorough knowledge of Florida municipalities allows us to understand and identify the
accounting and operational risks affecting the City. This enables us to provide the City with a high-quality
audit that meets all of the applicable professional standards at a competitive price.
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INDEPENDENCE
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Independence
As part of our quality control procedures, we ensure the independence of our Firm and the assigned audit
team under AICPA and Government Auditing Standards for every client for whom we perform attest
engagements. This verification process is performed and documented at the start of every audit we
perform. MSL is independent of the City of South Miami and its component units, as defined by generally
accepted auditing standards and the U.S. General Accounting Office’s (GAO) Government Auditing
Standards.
MSL has not had any professional relationships with the City of South Miami for the past five (5) years.
MSL shall give the City of South Miami written notice within five (5) days of any professional relationships
entered into during the period of this agreement.
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LICENSE TO
PRACTICE IN
FLORIDA
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License to Practice in Florida
MSL has been in business continuously for over 42 years. MSL and all assigned professional staff are
properly licensed to practice in Florida. Copies of the relevant licenses follow:
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QUALIFICATIONS
AND EXPERIENCE
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Firm Qualifications and Experience
Firm History
MSL is a Florida corporation that has been in continuous business for over 42 years and has grown to be
one of the largest independently owned and operated firms of certified public accountants in the
Southeast. We are a nationally recognized CPA firm, serving clients in more than 20 states and eight
countries. Many of our shareholders are nationally recognized specialists in their field of practice. The
Firm and all of its CPAs are actively involved with the FICPA and AICPA, as well as the Private Companies
Practice Section of the AICPA. Members of our Governmental Practice Group (GPG) are involved with the
AICPA’s Governmental Audit Quality Center (AICPA GAQC).
Through our association with Moore Stephens North America, Inc. and
Moore Stephens International Limited, we service clients throughout the
world. While we are part of a network that provides us resources when
needed, MSL is an independent Firm associated with Moore Stephens
North America and Moore Stephens International Limited for the
purposes of obtaining national or international resources when
necessary.
This association and the breadth and depth of services available to our clients are equivalent to those
offered by the Big 4 firms. These services are enhanced by a more hands-on, personalized approach to
serving client needs through our local headquarters. Because Moore Stephens North American firms are
independent of one another, the accessibility of multiple professional services can be offered in a “one-
stop shop” approach. Contrast this with the Big 4 firms: under the current regulatory environment, you
would be required to obtain one service from one firm (e.g., attest) and look elsewhere for another firm
to service your other business needs. We have collaborated with many other Moore Stephens firms. Our
access to national and international resources allows us to provide the best local solutions for your
organization.
Size of the Firm
MSL has almost 100 employees located in our four offices in Florida. MSL’s GPG includes 18 dedicated
individuals. This total includes three Shareholders, three Managers, three Supervisors and six Seniors and
Staff. All of the governmental staff assigned to the engagement for the City at the Supervisor level and
above have obtained their CPA licenses. In addition, the GPG utilizes two IT Specialists and is supported
by five Administrative Support personnel.
MSL Staffing Firm GPG
Shareholders 15 3
Managers 11 3
Supervisors 5 3
Seniors & Staff 34 6
IT Specialists 4 2
Support Staff 27 1
Total 96 18
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Location of the Office that Will Oversee Services to the City
The location of our office that services the South Florida area is 701 Brickell Avenue, Suite 550, Miami, FL
33131, and our Central Florida office is located at 255 S. Orange Avenue, Suite 600, Orlando, FL 32801.
We will be utilizing full-time staff from both of these locations to service your engagement.
Relevant Governmental Auditing Experience
MSL is committed to the governmental sector. Our governmental practice accounts for a significant
portion of our Firm’s revenues. Governmental work is not filler work at MSL. Our GPG performs services
for the largest governmental entities in Central Florida. Members of this group dedicate 90% of their time
working with governmental clients. MSL’s GPG has experienced significant growth locally and statewide.
Currently, MSL is providing auditing services to approximately 40 governmental clients.
MSL is proud to share with the City the following representative listing of clients for whom we have
provided auditing services in the last five years. For all clients listed below, all deadlines were met.
Client Name Type Length of
Service
Type of
Services Contact Name, Title
Municipalities
City of Altamonte Springs Public 2005-2015 Annual Audit Mark DeBord, Finance Director
City of Apopka Public 2014-2018 Annual Audit Pam Barclay, Finance Director
City of Casselberry Public 2006-2015 Annual Audit Rebecca Bowman, Finance Director
City of Cocoa Beach Public 2005-2019 Annual Audit Charles Holland, Finance Director
City of Daytona Beach Public 2010-2013 Annual Audit Patricia Bliss, Chief Financial Officer
City of Dunedin Public 2013-2017 Annual Audit Joseph Ciurro, Finance Director
City of Ft. Lauderdale Public 2012-2015 Single Audit Linda Logan-Short, Finance Director
City of Gulfport Public 2006-2010 Annual Audit James O'Reilly, City Manager
City of Indian Rocks Beach Public 2006-2017 Annual Audit Dan Carpenter, Finance Director
City of Kissimmee Public 2005-2015 Annual Audit Amy Ady, Finance Director
City of Leesburg Public 2010-2016 Annual Audit William Spinelli, Finance Director
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Client Name Type Length of
Service
Type of
Services Contact Name, Title
Municipalities (Continued)
City of Mount Dora Public 2015-2019 Annual Audit Mike Sheppard, Finance Director
City of Orlando Public 2013-2017 Annual Audit Rebecca Sutton, Chief Financial Officer
City of Palm Bay Public 2010-2013 Annual Audit Yvonne McDonald, Finance Director
City of Pembroke Pines Public 2010-2016 Commission
Auditor Lisa Chong, Finance Director
City of Sanford Public 2008-2017 Annual Audit Cynthia Lindsay, Director of Finance
City of St. Cloud Public 2009-2011 Annual Audit Javier Gonzalez, Finance Director
City of Tampa – Firefighters
& Police Officers Pension Public 2011-2015 Annual Audit Tiffany Ernst, Plan Administrator
City of Tampa – General
Employee Pension Public 2012-2015 Annual Audit Lee Huffstutler, Chief Accountant
City of Tampa – Single Audit Public 2011-2015 Single Audit Lee Huffstutler, Chief Accountant
City of Tarpon Springs Public 2015-2017 Annual Audit Ron Harring, Finance Director
City of Temple Terrace Public 2015-2019 Annual Audit Angela Atkinson, Finance Director
City of Venice Public 2011-2015 Annual Audit Linda Senne, Interim Finance Director
City of Winter Park Public 2005-2009
2013-2015 Annual Audit Wes Hamil, Finance Director
Counties
Broward County – Aviation
(Component Auditor) Public 2010-2015 Annual Audit
Aviation
Helena James-Rendleman,
Director of Finance
Broward County – Water
(Component Auditor) Public 2010-2015
Annual Audit
Water and
Wastewater
Single Audit
Natalie Otto, Fiscal Manager
Citrus County Public 2010-2018 Annual Audit Angie Snodgrass, Director of Finance
Lake County Public 2006-2015 Annual Audit Kristy Mullane, Chief Deputy Clerk
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Client Name Type Length of
Service
Type of
Services Contact Name, Title
Counties (Continued)
Osceola County Public 2008-2015 Annual Audit Michael Kurek, Comptroller
Seminole County Public 2000-2018 Annual Audit Jenny Spencer, Finance Director
Volusia County - Clerk of the
Circuit Court Public 2005-2015 Annual Audit Bonnie O'Keefe,
Director of Fiscal Operations
School Districts
School District of Brevard
County Public 2014-2017 Annual Audit JoAnn Clark,
Director of Financial Services
School District of Broward
County Public 2007-2011 Annual Audit Patrick Reilly,
Director of Financial Reporting
School District of Escambia
County Public 2012-2016 Annual Audit Terry St. Cyr, Asst Supt -
Finance & Bus Svcs
School District of Manatee
County Public 2014-2018 Annual Audit/
Internal
A Adi
Rebecca Roberts,
Chief Financial Officer
School District of Osceola
County Public 2012-2016 Annual Audit Migdalia Mercado,
Director of Finance
School District of Pasco
County Public 2011-2014 Annual Audit Joann Millovitsch, Finance Director
School District of Seminole
County Public
2010
2012-2013
2015
Annual Audit Todd Seis,
Finance Director
School District of Volusia
County Public
2007-2008
2010-2011
2013-2014
Annual Audit Bertie Trawick, Finance Director
Florida Virtual School Public 2014-2018 Annual Audit John Pavelchak, CFO
Special Districts and Authorities
Barefoot Bay Recreation
District Public 2006-2015 Annual Audit Kimmi Cheng, Finance Director
Central Florida Expressway
Authority Public 2012-2016 Annual Audit Lisa Lumbard,
Chief Financial Officer
East Central Florida Regional
Planning Council Public 2005-2015 Annual Audit Leila Hars, Finance Manager
Early Learning Coalition of
Flagler & Volusia Public 2010–2015 Annual Audit DJ Lebo, Executive Director
Early Learning Coalition of
Hillsborough County Public 2014-2018 Annual Audit Steve Costner, Finance Director
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Client Name Type Length of
Service
Type of
Services Contact Name, Title
Special Districts and Authorities (Continued)
Florida Intergovernmental
Finance Commission Public 2004-2013 Annual Audit Craig Dunlap, President
Greater Orlando Aviation
Authority Public 2015-2019
Annual Audit
Quarterly
Reviews
Hyatt Regency
Audit
Jacqueline Churchill,
Chief Financial Officer
MetroPlan Orlando Public 2005-2015 Annual Audit Harold Barley, Executive Director
Miami-Dade Expressway
Authority Public 2011-2015 Annual Audit Marie Schafer, Chief Financial Officer
North Brevard Hospital
District/Parrish Medical Public 2008-2015 Annual Audit Michael Sitowitz, Controller
Osceola Heritage Park Public 2006-2015 Annual Audit Mary Burd, Director of Finance
Sanford Airport Authority Public 2014-2017
(ext to 2021) Annual Audit Don Poore, Chief Financial Officer
TOHO Water Authority Public 2005-2019 Annual Audit Rodney Henderson, Business Services
Manager
West Volusia Hospital
Authority Public 2004-2014 Annual Audit Eileen Long, Accountant
Continuing Professional Education in Government Accounting
All members of MSL’s governmental team and all audit staff members assigned to
this engagement, regardless of their individual roles of responsibility, are in
compliance with the CPE requirements set forth in GAGAS issued by the
Comptroller General of the United States. In addition, we are in compliance with
the applicable provisions of the Florida Statutes that require CPAs to meet CPE
requirements prior to proposing on governmental audit engagements.
It is our objective to provide our professional staff with at least 50 hours of
comprehensive CPE each year. This is accomplished by attending seminars
throughout the United States and is reinforced through in-house training. Our
training programs are often open to our clients at no charge, so you can also fulfill some of your CPE
requirements throughout the year. Our Firm offers 16-24 hours of CPE during the year to our staff and
clients.
Bill Blend is often asked to speak at training sessions for the FICPA, FGFOA and at various MSL training
events. Bill is one of only a few CPAs in the state who is qualified and teaches the FICPA required ethics
class, including a class specifically developed by the FICPA for governmental ethics. As a Certified Fraud
Examiner, Bill also teaches fraud sessions for the FGFOA, as well as at client training sessions.
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Dan O’Keefe is recognized as one of the top public sector instructors in the state of Florida and is also
well-known on a national level. He has written numerous courses on various subjects related to
governmental accounting and auditing.
Joel Knopp has also been asked to speak at training sessions for the FGFOA, FSFOA, FASBO, and at MSL
training events on topics related to various governmental accounting and auditing issues, including Single
Audit and GASB updates.
All members of the engagement team have properly maintained CPE credits in governmental accounting,
as required by the Florida Board of Accountancy (FBOA).
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Principal Staff Assignments and Experience
MSL’s GPG is highly experienced in auditing Florida municipalities. Bill Blend, your Engagement
Shareholder, has over 23 years of governmental auditing, accounting, and consulting experience in
Florida. Bill serves on the Technical Accounting and Auditing Committees for both the FICPA and FGFOA.
Dan O’ Keefe, your Technical Review Shareholder, has over 40 years of governmental auditing,
accounting, and consulting experience. Dan is regarded as one of the most experienced governmental
auditors in the state of Florida. Joel Knopp, your Engagement Manager, has more than 17 years of
experience serving governmental entities. Eddy Castaneda, the Engagement Supervisor, has over nine
years’ experience. Chris Ghosio and George Grachis, the team’s IT Specialists, each have over 25 years of
experience in evaluating IT operations, including governments. Volney Jackson, your Engagement Senior,
has more than 10 years of experience serving governmental and not-for-profit entities.
Your engagement team has over 125 years of combined experience providing auditing, accounting, and
consulting services to hundreds of Florida municipalities, more than 15 Florida counties, and dozens of
special districts, and authorities. As a result of this collective knowledge and experience, your team is
uniquely suited to provide you with the highest quality auditing services. We guarantee that all members
of your team have municipality experience. You will not need to train our staff.
All of our professional staff, including the auditor in charge of your engagement, meet the educational
requirements set forth under Florida Statutes. Specific details of relevant continuing professional
education and local governmental audit experience are found in each staff member’s résumé.
MSL and all assigned key professional staff are properly registered and licensed to practice in the state of
Florida. In addition, our Firm and all assigned key personnel are in good standing with the FBOA.
MSL does not have a formal policy requiring staff rotation on engagements. We believe, and various
studies have shown, that staff continuity benefits the audit process due to the acquired knowledge of
clients and their operations. However, we respect the concerns that the public has on this issue and, if
requested, the size of our GPG enables us to rotate an experienced governmental audit team during the
course of the City’s contract, should the City request it. This is another factor that separates us from our
competitors that do not have a dedicated GPG team.
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William Blend, CPA, CFE
Engagement Shareholder
Education and Certifications
• B.S. Degree in Accounting, Long Island University
• C.P.A., Certified Public Accountant - Florida
• C.F.E., Certified Fraud Examiner
Professional Memberships and Affiliations
• AICPA
• FICPA
• Florida Government Finance Officers Association
(FGFOA)
• FGFOA Conference Committee
• FGFOA Technical Committee
• Instructor for the FGFOA and develops and teaches
Firm auditing classes
• FICPA Instructor - Ethics for Governmental CPAs in
Florida
• FICPA Technical Committee
• Association of Certified Fraud Examiners (ACFE)
• FICPA State and Local Government Section
• FICPA Compliance Practice Aid Team Member
• FICPA High School Coordinator for Seminole County
• Seminole County Chamber of Commerce
Government Affairs Committee
Listing of Relevant CPE Courses:
2012 – 2015 MSL Governmental Update
Federal and State Single Audit Update (Instructor)
FGFOA Annual Conferences – 2012-2015
Fraud Awareness
Ethics for CPAs: Accounting/Auditing Emphasis (Instructor)
GASB Update 2014 - 2015
AICPA GAQC 2015 Annual Update Webcast
COSO and Internal Control
Municipal Bankruptcies and Fiscal Sustainability
Tax Exempt Debt / Accounting and Auditing Issues
The External Auditor and Fraud (Instructor)
Circular A-133 Audit Sampling Strategies - Webinar
Background - Bill Blend is a member of
the Firm’s Governmental Practice Group.
Bill has over 23 years of public account-
ing, governmental and not-for-profit
experience. He has provided services to
numerous municipalities, counties, and
other governmental entities.
Professional Experience - Bill has
extensive experience in auditing the
governmental financial operations of
municipalities, counties, special districts,
and authorities. He also provides consult-
ing services in the areas of internal
control assessments, litigation support,
fraud remediation, and performance
reviews.
He has authored numerous CPE courses
on governmental accounting and auditing
and has instructed CPE sponsored by the
FGFOA and the FICPA. Bill is one of only a
few CPAs in the state qualified by the
FICPA to teach their government ethics
class, and he is often sought out as a
speaker around the state. He is a two-
time recipient of the FICPA Outstanding
Discussion Leader Award.
Bill is a Certified Fraud Examiner and is
trained in the use of IDEA data-mining
software.
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William Blend, CPA, CFE (Continued)
Engagement Shareholder
Governmental, educational, and other entities served include the following:
*Indicates Single Audit included
Counties Municipalities (Continued) Special Districts and Authorities
Broward* Kissimmee* Barefoot Bay Recreation District
Citrus* Lake Helen Central Florida Expressway Authority
Indian River* Leesburg* East Central Florida Regional Planning Council*
Lake* Maitland* Florida Intergovernmental Finance Commission
Osceola* Mt. Dora* Greater Orlando Aviation Authority (GOAA)*
Seminole* New Smyrna Beach* Hobe Sound Water Management District
Volusia* Oak Hill Memphis-Shelby County Airport Authority
Orlando* MetroPlan Orlando*
Municipalities Palm Bay* Miami-Dade Expressway Authority*
Altamonte Springs Palm Beach Gardens* New Smyrna Beach Utility Authority*
Apopka* Pembroke Pines* Sanford Airport Authority*
Casselberry* Port Orange* TOHO Water Authority*
Cocoa Beach* Sanford* West Volusia Hospital Authority
Coral Springs* St. Cloud*
Davie Tampa* Educational
Daytona Beach* Tarpon Springs* Academie DaVinci Charter School
DeBary* Temple Terrace The Reading Edge Academy
Deltona* Venice* Florida A&M University*
Dunedin* Vero Beach* Florida Virtual School *
Gulfport* Winter Park* School District of Manatee County*
Indian River Shores School District of Broward County*
Indian Rocks Beach School District of Escambia County*
School District of Osceola County*
School District of Pasco County*
School District of Seminole County*
School District of Volusia County*
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Daniel J. O’Keefe, CPA, MBA, CFE
Technical Review Shareholder
Education and Certifications
• M.B.A. Degree in Accounting, Florida State
University
• B.S. Degree in Accounting, Canisius College,
Buffalo, New York
• C.P.A., Certified Public Accountant - Florida
• C.F.E., Certified Fraud Examiner
Professional Memberships and Affiliations
• AICPA
• Served on the AICPA State and Local Government
Expert Panel
• Member of the AICPA National State and Local
Government Conference Committee
• Speaker at the AICPA National State and Local
Government Accounting Conference and the
National Not-for-Profit Conference
• FICPA
• Government Finance Officers Association (GFOA)
• Florida Government Finance Officers Association
• Member of the FICPA Governance Task Force
• Association of Certified Fraud Examiners (ACFE)
• UCF Accounting Advisory Board member
• Past Chairman of the Seminole State College
Foundation
Listing of Relevant CPE Courses:
2012 - 2015 MSL Governmental Update Training
FGFOA Annual Conferences – 2012 – 2015
COSO for State and Local Governments (Instructor)
Federal Financial Reporting
GASB Pension & Financial Reporting
Yellow Book and Green Book
Fraud Waste and Abuse in Government
Municipal Bankruptcies and Fiscal Sustainability (Instructor)
The External Auditor and Fraud
AICPA GAQC 2015 Annual Update Webcast
MSL Governmental Financial Accounting and Reporting
Case Study (Instructor)
Background - Dan O’Keefe has over 40 years of
public accounting, governmental, and not-for-
profit experience. He heads up the Firm’s
Governmental Practice Group, serves on the
Firm’s Board of Directors, and is the Firm’s
Secretary. He has provided services to
numerous municipalities, counties, and other
governmental entities, and is a nationally
recognized expert in the area of governmental
auditing. He is one of the most sought-after
public sector instructors in the state.
Professional Experience - Dan has extensive
experience auditing governmental financial
operations, including services provided to 50
municipalities, 16 counties, four state
agencies, and numerous special districts and
authorities. He also provides consulting
services in the areas of internal control
assessments, litigation support, fraud reme-
diation, and performance reviews.
Dan provides CPE services to clients, peers,
and governmental agencies nationwide. He
has authored numerous CPE courses on
governmental accounting and auditing;
instructed CPE sponsored by the AICPA and
the FICPA; and previously served a four-year
term on the Florida Board of Accountancy CPE
Committee. He is a three-time recipient of the
FICPA Outstanding Seminar Leader Award and
two-time recipient of the AICPA Outstanding
Instructor Award. He is an adjunct Professor at
the University of Central Florida and the
University of West Florida.
Dan is the co-author of A State Lottery: A
Challenge for Auditors; co-author of Auditing
Budget Requirements for Florida’s Local
Governments; and author of the 1996 Single
Audit Requirements. In addition, Dan authored
the Florida Single Audit Act.
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Daniel O’Keefe, CPA, MBA, CFE (Continued)
Technical Review Shareholder
Governmental, educational, and other entities served include the following:
Counties Municipalities (Continued) Special Districts and Authorities
Alachua* Leesburg* Barefoot Bay Recreation District
Broward* Longwood Central Florida Expressway Authority
Citrus* Maitland* Fort Pierce Utilities Authority
Collier* Margate East Central Florida Regional Planning Council*
DeSoto* Mount Dora* Greater Orlando Aviation Authority*
Hillsborough* Ocala Miami-Dade Expressway Authority*
Indian River* Orchid Memphis-Shelby County Airport Authority
Lake* Orlando* MetroPlan Orlando*
Manatee* Ormond Beach Orange County Housing Finance Authority*
Marion* Pahokee Orange County Library District
Okeechobee* Palm Bay* Reedy Creek Improvement District
Orange* Palm Beach VOTRAN*
Osceola* Palm Beach Gardens* TOHO Water Authority*
Martin* Pembroke Park West Volusia Hospital Authority
Seminole* Pembroke Pines*
Volusia* Pomona Park Educational
Port Orange* Academie DaVinci Charter School
Municipalities St. Cloud* Bethune-Cookman College*
Altamonte Springs Sanford* Early Learning Coalition of Flagler/Volusia*
Apopka* Sebring* Florida A&M University*
Belle Isle South Daytona Florida Virtual School*
Bradenton Tamarac Frank Scanga Charter School
Bunnell Tampa* Futures, Inc.
Casselberry* Tarpon Springs * Kissimmee Charter School
Cocoa Beach* Temple Terrace Orlando Lutheran Academy
Coral Springs* Venice* Reading Edge Academy
Crystal River Vero Beach* School District of Brevard County*
Davie Wellington School District of Broward County*
Daytona Beach* West Palm Beach School District of Escambia County*
Daytona Beach Shores Winter Garden School District of Manatee County*
DeBary* Winter Haven School District of Osceola County*
Deltona* Winter Park* School District of Pasco County*
Dunedin* Winter Springs School District of Seminole County*
Green Cove Springs School District of Volusia County*
Gulfport* State Agencies Stetson University
Holly Hill Florida Lottery
Indian Rocks Beach Florida Health Department Other
Kissimmee* Florida Housing Finance Agency Florida Intergovernmental Finance Commission
Lake Mary* Florida Department of Elder Affairs
Lake Park
Lauderdale Lakes
*Indicates Single Audit included
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Joel Knopp, CPA
Engagement Manager
Education and Certifications
• B.S. Degree in Accounting - Eastern University
• C.P.A., Certified Public Accountant - Florida and
Virginia
Professional Memberships and Affiliations
• American Institute of Certified Public Accountants
(AICPA)
• Florida Institute of Certified Public Accountants
(FICPA)
• Florida Government Finance Officers Association
(FGFOA)
• FGFOA Conference Planning Committee
• Leadership Orlando – Class of 89
Listing of Relevant CPE Courses:
2012 - 2015 MSL Governmental Update
FGFOA Annual Conferences – 2012 – 2015
Federal Financial Reporting
GASB Pension & Financial Reporting
Yellow Book and Green Book
Fraud Waste and Abuse in Government
Ethics for CPAs: Accounting/Auditing Emphasis (Instructor)
GASB Update 2014 – 2015
AICPA GAQC 2015 Annual Update Webcast
Municipal Bankruptcies and Fiscal Sustainability
Tax Exempt Debt / Accounting and Auditing Issues
The External Auditor and Fraud (Instructor)
Circular A-133 Audit Sampling Strategies - Webinar
Background - Joel Knopp is a member of
the Firm’s Governmental Practice Group.
Joel has over 17 years of experience in
accounting and auditing and works
primarily with governmental clients.
Professional Experience - Joel has
performed audits on over 40 govern-
mental entities. He has substantial
experience in planning, performing,
supervising, reviewing and preparing
financial statements related to the
audits of governmental entities and not-
for-profit organizations subject to
Government Auditing Standards and
Federal and State Single Audit require-
ments.
As a Manager, Joel is responsible for
scheduling, budgeting, supervising staff,
and coordinating multiple projects
simultaneously. Joel works directly with
clients’ management to develop strong
relationships, resolve issues arising
during audits, and ensures that
engagements are performed in
accordance with applicable professional
standards and in a manner that is
consistent with the clients’ goals.
Joel’s previous experience includes work
as an audit director for a CPA firm in
Virginia, where he managed numerous
audits of Virginia local governmental
agencies and municipalities. Joel also has
extensive experience providing tax
consulting and preparation services at
the federal and state levels for
businesses, not-for-profit organizations,
and individuals.
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Joel Knopp, CPA (Continued)
Engagement Manager
Governmental, educational, and other entities served include the following:
Counties Municipalities Special Districts and Authorities
Broward* Altamonte Springs Barefoot Bay Recreation District
Citrus* Casselberry* Central Florida Expressway Authority
Lake* Coral Springs Early Learning Coalition of Flagler/Volusia Counties, Inc.*
Osceola* Dunedin* East Central Florida Regional Planning Council*
Seminole* Gulfport* Greater Orlando Aviation Authority*
Northampton (VA)* Indian Rocks Beach Lake-Sumter Metropolitan Planning Organization*
Kissimmee* MetroPlan Orlando*
Leesburg* Miami-Dade Expressway Authority*
Orlando* Sanford Airport Authority*
Sanford* Eastern Shore Community Services Board (VA) *
Tampa* Northwestern Regional Juvenile Detention Ctr. Commission (VA)
Tarpon Springs Staunton Industrial Development Authority (VA)
Temple Terrace Valley Community Services Board (VA) *
Venice* Waynesboro Industrial Development Authority (VA)
Staunton (VA) * Winchester Industrial Development Authority (VA)
Town of Iron Gate (VA)
Waynesboro (VA) *
Winchester (VA) *
Educational
School District of Brevard County*
School District of Escambia County*
School District of Manatee County*
School District of Osceola County*
School District of Pasco County*
School District of Seminole County*
School District of Volusia County*
Genesis Alternative Education Program (VA)
Northampton County School Board (VA)
Staunton City School Board (VA)
Waynesboro City School Board (VA)
Winchester City School Board (VA)
*Indicates Single Audit included
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Eddy Castaneda, CPA, MBA
Engagement Supervisor
Education and Certifications
• B.S. Degree in Accounting, University of Central Florida
• Masters of Business Administration in Accounting, Baker College
• C.P.A., Certified Public Accountant – Florida
Professional Memberships and Affiliations
• Florida Government Finance Officers Association (FGFOA)
• Florida Institute of Certified Public Accountants (FICPA)
• American Institute of Certified Public Accountants (AICPA)
Listing of Relevant CPE Courses:
2010 – 2015 Governmental Update
FGFOA Annual Conferences – 2010 – 2015
Ethics for CPAs: Accounting/Auditing Emphasis
Clarity Standards
Governmental Accounting, Reporting and
Auditing Seminar – Texas Tech University
Yellow Book
GASB and GASB Standards Updates
Fraud Waste and Abuse in Government
GAQC 2015 Annual Update
Governmental, educational, and other entities served include the following:
Counties Municipalities Special Districts, Authorities and Associations
Citrus* Apopka* Barefoot Bay Recreation District
Lake* Casselberry* Early Learning Coalition of Flagler & Volusia
Osceola* Cocoa Beach * East Central Florida Regional Planning Council
Volusia* Coral Springs Greater Orlando Aviation Authority (GOAA) *
Kissimmee* Lake-Sumter Metropolitan Planning Organization
Leesburg* Lake-Sumter Emergency Medical Services
Mount Dora* Miami-Dade Expressway Authority*
Pembroke Pines MetroPlan Orlando*
Sanford* Orlando/Orange County Convention & Visitors Bureau
St. Cloud* North Brevard County Hospital District*
Winter Park* TOHO Water Authority*
Educational
Florida A&M University
Pembroke Pines Charter Schools
School District of Volusia County*
Background – Eddy Castaneda is a
member of the Firm’s Govern-
mental Practice Group. Eddy has
over nine years of public
accounting experience and has
experience performing audits,
examinations, reviews, and compli-
ance work for governmental and
not-for-profit entities.
Professional Experience - Eddy has
extensive experience performing
governmental risk-based audits,
examinations, reviews, internal/
operational audits, and compliance
work for governmental entities.
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Volney Jackson, CPA
Engagement Senior
Education and Certifications
• B.S. Degree in Accounting, Montclair State University
• C.P.A., Certified Public Accountant - Florida and
New Jersey
Professional Memberships and Affiliations
• American Institute of Certified Public Accountants (AICPA)
• Florida Institute of Certified Public Accountants (FICPA)
• New Jersey Society of Certified Public Accountants
Listing of Relevant CPE Courses for the Past Three Years:
2015 Cherry Bekaert Governmental Update Training
Yellow Book
Uniform Grant Guidance
GASB 68 – Accounting and Financial Reporting for Pensions
Spotting Fraud in a NFP, Government Environment
Audit Efficiency - Government
Internal Controls/COSO for Government and NFPs
Spot the Error - Government
Common Debt and Equity Instruments
IT Security and HIPAA Update
Compliance Supplement 2015 Update
GASB Pension & Financial Reporting
Governmental, educational, and other entities served include the following:
Counties Municipalities Special Districts, Authorities and Associations
Bergen, NJ West New Work, NJ Plainfield Municipal Utilities Authority, NJ
City of Passaic, NJ Bergen County Utilities Authority, NJ
Township of Washington, NJ North Bergen Municipal Utilities Authority, NJ
Township of Wyckoff, NJ
Borough of Alpine, NJ
City of East Orange, NJ Educational
Township of Montvale, NJ Passaic School, NJ
Wayne Township, NJ East Orange School District, NJ
Borough of Glen Rock, NJ Wyckoff, NJ
Nutley, NJ School Board
Plainfield, NJ
Ridgefield Park, NJ
Carteret, NJ
*Indicates Single Audit included
Background - Volney Jackson is a
Senior at MSL and is a member of the
Firm’s Middle Market and Senior
Housing Practice Groups. She has over
10 years of public accounting
experience and has experience
performing audits and compliance
work for Government and Non-for-
Profit entities.
Professional Experience - Volney has
experience performing governmental
risk-based audits and compliance
work for governmental entities, HUD
Compliance, and Health Care.
Volney has completed over 40 hours
of Continuing Professional Education
(CPE) in the areas of governmental
accounting and auditing annually for
each of the past three years.
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Client Reference List
Please see the section below “Similar Engagements with Other Government Entities” on page 21 for a list
client references and their contact information.
Staff Quality and Continuity
It has always been in the best interest of MSL and our clients to have staff return to an engagement. We
recognize the importance of continuity to both the efficiency and effectiveness of the audit. We will strive
to provide you continuity of staffing. Our turnover is significantly lower than average for firms of our size.
Approximately 25% of our personnel have been with MSL for longer than ten years.
PR
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PRIOR
ENGAGEMENTS
WITH THE CITY OF
SOUTH MIAMI
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Prior Engagements with the City of South Miami
MSL has performed no engagements with the City of South Miami within the last five years.
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SIMILAR ENGAGEMENTS
WITH OTHER
GOVERNMENTAL
ENTITIES
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Similar Engagements with Other Government Entities
Client Name
Scope of Work
Hours
Engagement /
Technical Review
Shareholder
Client Contact Name, Title
Address
Phone and Email
City of Venice
Annual Audit
Single Audit
550 hours
William Blend
Dan O’Keefe
Linda Senne, Interim Finance Director
401 W. Venice Ave., Venice, FL 34285
(941) 486-2626
lsenne@venicegov.com
City of Dunedin
Annual Audit
Single Audit
650 hours
William Blend
Dan O’Keefe
Joseph Ciurro, Finance Director
750 Milwaukee Ave., Dunedin, FL 34698
(727) 298-3066
jciurro@dunedinfl.net
City of Leesburg
Annual Audit
Single Audit
600 hours
William Blend
Dan O’Keefe
Bill Spinelli, Finance Director
501 W. Meadow St., Leesburg, FL 34749
(352) 728-9720
billspinelli@leesburgflorida.gov
City of Sanford
Annual Audit
Single Audit
600 hours
William Blend
Dan O’Keefe
Cynthia Lindsay, Director of Finance
P.O. Box 1788, Sanford, FL 32771
(407) 246-2341
Cynthina.lindsay@sanfordfl.gov
City of Casselberry
Annual Audit
Single Audit
500 hours
William Blend
Dan O’Keefe
Rebecca Bowman, Finance Director
95 Triplet Lake Dr., Casselberry, FL 32707
(407) 262-7700
Rbowman@casselberry.org
City of Altamonte
Springs
Annual Audit
Single Audit
450 hours
Dan O’Keefe
William Blend
Mark DeBord, Finance Director
225 Newburyport Ave., Altamonte Springs, FL 32701
(407) 571-8093
mbdebord@altamonte.org
City of Indian Rocks
Beach
Annual Audit
250 hours
Dan O’Keefe
William Blend
Dan Carpenter, Finance Director
1507 Bay Palm Blvd., Indian Rocks Beach, FL 33785
(727) 517-0204
dcarpenter@irbcity.com
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SPECIFIC AUDIT
APPROACH
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Audit Approach
Overview
We have reviewed the City’s RFP, including the scope of services, in preparing our proposed audit plan.
As part of our preparation, we have reviewed source documents, such as: the 2015 - 2016 City budget,
the City’s prior financial statements, organizational charts, and other information that was available on
the City’s website or Municode.com.
The scope of our audit is directed primarily towards the expression of an opinion on the City’s basic
financial statements. If it becomes evident that an unmodified opinion cannot be rendered on your
financial statements, you will be promptly notified of the circumstances surrounding our findings. If, for
any reason, we are unable to complete the audit or if we determine that we are unable to express an
opinion, we will decline to express an opinion or may not issue a report as a result of the engagement, as
required under the applicable professional standards.
Standards-Based Audit Approach
Overall, we will follow a standards-based audit approach, which is mandated under United States Auditing
Standards Clarified (AU-C) Section 300. In our planning process, we will identify the risks of significant
accounts and transactions related to the financial statements and plan our audit procedures to properly
address those risks at the financial statement assertion level. In addition, we will incorporate AU-C Section
600 - Audits of Group Financial Statements, which relates to the audit approach and related documen-
tation requirements for group audits. Under this standard, we are required to evaluate the City’s
components, as well as business activities, to determine which aspects of the City’s activities are
significant and need to be evaluated separately from a financial accounting and reporting perspective.
Our general audit approach is illustrated on the following page.
Proposed Segmentation of the Engagement
The following section gives an overview of the major audit segments (Planning, Substantive Testing and
Wrap Up), as well as procedures we anticipate will be implemented in these areas. This section is not
intended to provide you with all of the details of our audit steps. It indicates our understanding of the
City, the City’s Pension Plans and the Community Redevelopment Agency, their environment, and the
related internal controls anticipated to be in place.
The overall objective of our audit segmentation and related procedures is to ensure that our audit
opinions are supported by the procedures performed. Procedures are evaluated throughout the audit
process based upon the auditee’s environment, internal controls, and economic condition. In addition,
our audit plan is evaluated throughout the audit and procedures are performed to address any significant
issues identified during the audit process.
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Planning – Internal Controls – Compliance
Engagement Administration and Planning
Evaluation of the City, Its Environment, and Internal Controls
• Obtain and document our understanding
of the City, its environment, its internal
controls, organizational structure, and
operating characteristics.
• Evaluate organization, personnel, and
financial practices.
• Document existing electronic data
processing (EDP) controls, and evaluate
adequacy of the physical security
environment, including business continuity
(disaster recovery) planning.
• Identify specific compliance requirements
related to bond resolutions, ordinances, and
Florida Statutes.
• Perform testing of controls over areas
deemed to have financial significance. These
generally include testing of cash
disbursements, cash receipts, journal
entries, contracts, etc.
Minutes, Contracts, and Resolutions
• Evaluate financial reporting systems and
administrative monitoring capabilities. Design
preliminary tests on controls for compliance
with prescribed systems.
• Review minutes of meetings of the City
Commission and prepare an abstract of
information relevant to the audit of the
financial statements.
• Obtain data concerning outstanding
contractual commitments, if any, for financial
statement disclosure adequacy.
• Design tests of controls for compliance with
applicable laws and regulations and the
Rules of the Auditor General of the State of
Florida.
• Develop a compliance work program and
incorporate it into the overall audit plan.
• Make preliminary assessments of the City, its
environment, and its internal controls.
• Update systems documentation and
permanent file information.
• Review status of the prior-year audit
recommendations or findings, if any, and
ascertain whether they were appropriately
resolved.
• Identify all federal and state financial awards
programs, and evaluate if either a federal or
state Single Audit is required (part of work
plan, but do not anticipate any).
• Document our understanding of all financially
significant laws and regulations, and identify
any new laws or regulations that require audit
testing.
• Identify new or modifications to the existing
inter-local agreements.
• Discuss with management the implementation
of recent GASB pronouncements, and
determine applicability of pending matters.
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Planning – Internal Controls – Compliance (Cont.)
Budgets
• Document budgetary process and confirm
compliance with applicable local ordinances,
procedures, and regulations.
• Review authorization and impact of interim
budget amendments, if any.
Substantive Testing
Cash, Cash Equivalents, and Investments, including Restricted Funds
• Ascertain that cash in the balance sheet is on
hand, in transit, or on deposit with third
parties (trustees) in the name of the City.
• Ascertain that all cash funds of the City are
included in the balance sheet.
• Ascertain that depositories are legally
acceptable, that adequate collateral has
been pledged for the City’s deposits, and
that separate depository accounts are
maintained for each fund for which required.
• Ascertain that the cash balances reflect a
proper cutoff of receipts and disbursements
and are stated at the correct amount.
• Ascertain that cash balances are properly
presented in accordance with related
restrictions and disclosures are adequate.
• Ascertain that investment balances are
evidenced by securities or other
appropriate legal documents, either
physically on hand or held in safekeeping
by others, and include all of the City’s
investments.
• Ascertain that investments are the types
authorized by law, contract, and the
investment policy of the City.
• Ascertain that investment values, incomes,
gains, or losses are correctly stated and
properly allocated to accounts.
• Ascertain that investments are properly
described and classified by fund type in the
combined balance sheet and related
disclosures.
Receivables, Due From, Revenue, and Cash Receipts
• Ascertain that only earned revenues, if any,
in the fiscal year have been recorded, and
amounts uncollected at year-end presented
as receivables are valid. Ascertain that the
City has satisfied the relevant legal
requirements to receive all revenues
recorded.
• Ascertain that the revenues were billed or
charged and recorded at the correct amount
and receivables are stated at the net
realizable amount.
• Ascertain that unbilled service revenues
are appropriately reflected in the proper
accounting period.
• Ascertain that an adequate allowance for
doubtful accounts has been established
and that the related amounts and
disclosures are properly presented in the
financial statements.
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Substantive Testing (Cont.)
Property, Plant, Equipment, and Capital Expenditures
• Ascertain that property and equipment
represent a complete and valid listing of
the capitalizable cost of assets purchased,
constructed, or leased, and that they are
physically on hand.
• Ascertain that capital expenditures
represent a complete and valid listing of
the capitalizable cost of the property and
equipment acquired during the period,
and that capitalizable costs are excluded
from repairs and maintenance and similar
expenditure accounts.
• Ascertain that the capitalized costs and
related depreciation associated with all sold,
abandoned, damaged, or obsolete fixed
assets have been removed from the accounts.
• Ascertain that depreciation charges on all
depreciable assets have been computed on
an acceptable and consistent basis and that
the related allowance accounts are
reasonable.
• Ascertain that capital expenditures and fixed
assets are properly classified and related
disclosures are adequate.
Accounts Payable and Accrued Liabilities, and Due to
• Ascertain that recorded expenses and cash
disbursements are for goods and services
authorized and received.
• Ascertain that expenses incurred for goods
and services and related accounts payable
have all been identified, including any
contingent or contractual liabilities.
• Ascertain that expenses for goods and
services are authorized in accordance with
the budget and other regulations or
requirements.
• Ascertain that payroll disbursements are
made only for work authorized and
performed by authorized personnel.
• Ascertain that payroll is computed using
rates and other factors in accordance with
contracts and relevant laws and regulations.
• Ascertain that expenses and related disburse-
ments and liabilities have been correctly
recorded as to account, budget category,
period, and amount.
• Ascertain that expenses and related liabilities
are properly classified by budget category and
related disclosures are adequate.
• Ascertain that payroll and related liabilities
are correctly recorded as to amount and
period and properly distributed by account
and budget category and disclosures are
adequate.
• Ascertain the status of employee
compensatory benefits for accruals and
disclosure.
Non-current Liabilities and Debt Service Expenditures
• Ascertain that debt is authorized and
properly recorded.
• Ascertain that all indebtedness of the City
is identified, recorded, and disclosed.
• Ascertain that the City has complied with
provisions of indentures and agreements
related to debt, including provisions on
use of proceeds.
• Ascertain that debt service expenditures
(principal and interest payable) are properly
recorded, classified, and disclosed.
• Ascertain that debt and related restrictions,
guarantees, and commitments are properly
presented and related disclosures are
adequate.
• Review arbitrage calculations for
reasonableness.
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Substantive Testing (Cont.)
Risk Management
• Document and evaluate controls over the
City’s risk management processes.
• Review insurance coverage in place to
ensure it is active and applicable for the
City’s risk.
• Ensure proper disclosures related to the
City’s risk management activities.
• Ascertain that cost allocation plans are in
place for the proper allocation of insurance
costs. Ensure that costs are allocated during
the year and recorded correctly as to account,
amount, and period, in accordance with the
City’s plan, as well as applicable policies and
procedures.
Deferred Outflows and Inflows
• Identify the nature and amounts of deferred
outflows of resources and deferred inflows
of resources.
• Compare recorded deferred outflows of
resources and deferred inflows of resources
to the prior period or to other expectations.
• Investigate any unexpected results,
considering known changes in the
government’s activities, economic
conditions, or GAAP requirements.
• Determine whether deferred inflows of
resources, instead of revenue, have been
reported when an asset has been recorded but
the revenue does not meet the availability
criterion.
• Identify the nature and amounts of deferred
outflows of resources and deferred inflows of
resources related to debt, service concession
arrangements, and pensions.
• Compare recorded deferred outflows of
resources and deferred inflows of resources to
the prior period or to other expectations.
Net Position and Fund Balance
• Ascertain that all classifications of net
position and fund balance are recorded and
properly authorized in accordance with
GASB.
• Ascertain that components of net position
and fund balance are determined in
accordance with applicable regulations and
requirements.
• Ascertain that components of net position
and fund balance, including changes in the
net position, are properly computed and are
described, classified, and appropriately
disclosed.
Revenues
• Perform analytical procedures related to
charges for services.
• Design and perform a revenue test to
determine that proper rates are charged.
• Compare revenue data for the current
period and historically to customer
demographics.
• Determine that impact fees are properly
restricted and accounted for.
• Perform testing of various tax and inter-
governmental revenues.
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Substantive Testing (Cont.)
Expenditures and Expenses
• Perform analytical procedures related to
expenses.
• Through testing and observation,
determine that expenses are appropriate
and properly classified.
• Determine that expenses are properly classified
for budgetary purposes.
Pension and Other Post-Employment Benefit Plans (OPEB)
• Evaluate the plan administrator of the plans
and determine what controls we will evaluate
at the administrator level.
• Review the process for contributions,
eligibility, and other areas at the employer
level to ensure the plans are being properly
administered at the employer level.
• As much as possible, incorporate our
evaluation of plan controls as part of our
payroll control evaluation of the City.
• Review allocation of pension expense.
• Review pension plan funding amounts to ensure
expenses and related liability, if any, are
properly recorded.
• Evaluate the OPEB plan and related controls.
• Review OPEB plan information to ensure that
the information reported is related and is
properly reported in the financial statements.
• Review the actuarial report related to the OPEB
plan for consistency with plan information, and
other information utilized to determine the
OPEB liability and related disclosures.
Grants
• Evaluate and test controls over compliance
requirements.
• Ascertain status and resolution of prior-year
findings and questioned costs.
• Test grant revenue through confirmation with
grantor agencies to ascertain appropriateness
of classification.
• Ascertain that grant revenues and expend-
itures charged to grant programs are valid
and complete and, if applicable, indirect costs
are properly allocated.
• Determine threshold for Type A and Type B
programs based on grant expenditures.
• Ascertain that grants are administered and
revenues and expenditures are recorded in
accordance with applicable provisions and
related laws and regulations.
• Ascertain that grant-related amounts are
properly presented and related disclosures
concerning restrictions and compliance are
adequate.
• Identify major federal programs and major state
projects using risk-based approach.
• Evaluate and test controls over direct and
material compliance requirements.
• Ascertain status and resolution of prior-year
findings and questioned costs.
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Wrap-Up and Reporting
• Coordinate review of the Management’s
Discussion and Analysis document for
inclusion in the basic financial statements.
• Complete all financial disclosure checklists.
• Review status of prior-year audit
recommendations and ascertain whether
they were appropriately resolved.
• Provide current-year audit findings and
recommendations for improvement
related to the financial statements,
internal control, accounting, accounting
systems, and compliance with policies and
procedures.
• Prepare preliminary drafts of audit reports, CAFR
schedules and notes, and management letter.
• Meet with management to review drafts prior to
issuance.
• Schedule and attend final meeting with manage-
ment to finalize all financial reporting matters.
• Present financial statements to management
and the City Commission.
Level of Staff to be Assigned to Each Proposed Segment of the Engagement for the City,
Pension Plan and Community Redevelopment Agency (CRA) Audits
The tables below show the applicable segment procedures for the City, the Pension Plans and the
CRA. Included in the applicable tables are engagement staff level to be assigned to the applicable segment
noted.
City Audit - Proposed Segmentation Shareholder Manager /
Supervisor Senior IT
Specialist Staff
Engagement Administration and Planning X X X X X
Evaluation of Entity and Internal Controls X X X X X
Minutes, Contracts, and Resolutions X X X
Budget X X X
Cash, Cash Equivalents, Investments X X X
Receivables and Cash Receipts X X X
PPE and Capital Expenditures X X X
Accounts Payable & Other Liabilities X X X
Payroll and Related Liabilities X X
Long-Term Debt and Debt Service Expenditures X X X X
Pension & OPEB X X X X
Risk Management X X X X
Net Position and Fund Balance X X X
Revenues and Expenditures/Expenses X X X
Grants X X X X
Wrap-Up and Reporting X X X X
Pension Plan Audits - Proposed Segmentation Shareholder Manager /
Supervisor Senior Staff
Engagement Administration and Planning X X X X
Evaluation of Entity and Internal Controls X X X X
Minutes, Contracts, and Resolutions X X X
Cash, Cash Equivalents, Investments X X X
Receivables and Plan Contributions X X X
Accounts Payable & Benefit Payments X X X
Net Position X X X
Wrap-Up and Reporting X X X X
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CRA Audit - Proposed Segmentation Shareholder Manager /
Supervisor Senior Staff
Engagement Administration and Planning X X X X
Evaluation of Entity and Internal Controls X X X X
Minutes, Contracts, and Resolutions X X X
Budget X X X
Cash, Cash Equivalents, Investments X X X
Receivables and Cash Receipts X X X
PPE and Capital Expenditures X X X
Accounts Payable & Other Liabilities X X X
Long-Term Debt and Debt Service Expenditures X X X X
Net Position and Fund Balance X X X
Revenues and Expenditures/Expenses X X X
Wrap-Up and Reporting X X X X
Samples Size and the Extent to Which Statistical Sampling is to be Used in the
Engagement
We will follow the guidance of AU-C section 530, Audit Sampling, in using a non-statistical approach. MSL
uses this guidance, along with our professional judgment, to develop a logical process that includes
assessing inherent risk, control risk, and combined audit risk, to determine where sampling is deemed
appropriate and effective, as well as in the determination of sample sizes.
Sample sizes will vary, depending on the nature of the testing (compliance versus substantive), and the
size of the population being sampled. Our utilization of sampling generally centers on compliance and
controls testing, rather than substantive testing of account balances. Sample sizes for compliance and
controls testing are based upon professional guidance.
Audit sampling is the application of an audit procedure to less than 100% of the items within an account
balance or class of transactions for the purpose of evaluating some characteristic of the balance or class.
Our auditors use extensive sampling procedures to obtain satisfactory audit evidence.
Sampling procedures routinely include statistical and non-statistical sampling based upon:
• the overall objective of the test • the nature of the sample population
• the sample size • the nature of the item(s) being examined
• the anticipated outcome of the sample results • the significance of the results
Ordinarily, the significant portions of the sampling expected to be performed are identified at the onset
of the engagement and are coordinated with the remaining auditing procedures to produce timely and
efficient results.
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We currently expect to perform the following types of sampling:
Attribute Sampling - To test the rate of deviation from a prescribed internal control procedure to
determine whether planned reliance on that control is appropriate. In addition to tests of compliance with
prescribed control procedures, attribute sampling will be used for certain substantive procedures to test
for possible unrecorded transactions and for testing existing account balances.
Variable Sampling - To reach a conclusion about the adequacy or reasonableness of an account balance.
Examples of areas where we will apply sampling strategies include:
• The selection of cash receipts postings to test for
determination of compliance with related
statutory requirements and utility rate schedules
• CRA transactions
• The selection of debt payment transactions to
test for timeliness of, and completeness of,
payments to paying agents for debt costs and
fiscal agent fees
• The selection of cash disbursements and payroll
transactions for compliance testing
• Journal entries
• The selection of other transactions to
determine compliance with laws and
regulations
Extent to Use of EDP Software in the Engagement
Innovative Technology – Computer-Assisted Audit Techniques (CAATs)
To the extent possible, it is our policy to incorporate the use of CAATs in all phases of our audit. Our
Firm understands the efficiencies and effectiveness derived with the proper use of these audit
techniques. We have committed significant Firm resources to provide your audit team with the tools and
training to use these techniques. Our Firm uses IDEA data-mining software. This software enables us to
take virtually any output file format from your financial reporting package and convert it into a usable
data format for our staff to perform CAATs, such as:
• Comparison of employee and vendor addresses to identify employees who are also vendors,
• Analyzing numerical sequences from large populations to identify missing or duplicate checks or
invoices,
• Sorting payments to identify transactions that fall just under financial control or contract limits,
• Unexpected trends in the number of, or amounts of, payments to vendors, and
• Search for false employees by comparing the human resources database with the payroll system
database.
All software utilized by our staff for sampling will be used exclusively on our own computer hardware
brought on-site during the audit. We do not, and will not, install or use any of our proprietary software
systems on your hardware systems.
Electronic Data Processing Techniques and the Paperless Audit
As part of our audit, we routinely perform analyses of our clients’ computer-based financial management
systems. To the extent possible, it is our policy to design our audit procedures to maximize the application
of computer-assisted audit procedures for compliance and substantive testing of your system. We also
utilize the capabilities of our own in-house computer systems to assist us in achieving efficiency in
examining your financial accounting and reporting systems.
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We also have the inherent capability to download certain financial data into our own data processing
systems. This procedure is typically limited to specific applications where it is feasible to do so. Quite
often, our clients’ systems do not provide the ability to download all historical data that we find essential
to perform our analytical procedures and account comparisons. When that occurs, alternative procedures
are employed to build the appropriate database to perform these necessary tasks.
As a routine part of your audit, we will request electronic copies of your financial system’s database files
to allow us access to information in your financial accounting systems. Our Firm uses financial data
extraction and analysis software to assist us in performing your audit. As a primary audit tool, we utilize
this software to read, display, analyze, manipulate, sample, or extract data files from almost any source
within your financial management systems -- mainframe to PC, including reports printed to a file.
Type and Extent of Analytical Procedures to be Used in the Engagement
Analytical procedures are utilized in the planning, substantive testing, and wrap-up phases of all audits.
The extent to which they are utilized is dependent upon our assessment of where the significant audit
risks are. In the planning stage, analytical testing is used as one of many methods to determine “what has
happened” during the audit period. Generally, we will utilize comparisons to prior-year activities. In
addition, to make the information useful in the planning stages, we implement this process on the
financial statement level to give us an overall assessment of changes that have occurred. During the
substantive testing phase of the engagement, we generally utilize analytical procedures on revenue and
expenditure/expense accounts, including, when appropriate, comparisons to prior year, as well as to
budget. We utilize analytical procedures, when reasonable, to compare to operational information. For
example, comparing water production to related revenues and expenses with direct or inverse relation-
ships. In the wrap-up phase of the audit, analytical testing is used to support the testing performed
throughout the audit, as well as to determine that no significant changes occurred outside of our
expectations. The full extent to which analytical procedures are utilized is based upon the auditor’s
professional judgment and the overall risk assessment results.
Substantive procedures include records examination (inspection), confirmation, observation, verification,
inquiry, and analytical procedures, all of which have been discussed above. The extent to which any
procedure is utilized is determined based upon the auditor’s evaluation of the account balance or
transaction being evaluated. The best method utilized is dependent upon the auditor’s risk assessment of
the specific accounting or reporting issue at hand. Which procedures are utilized is carefully evaluated
throughout the audit process and often more than one of these procedures is implemented. In all cases,
the audit team discusses the approach to be taken and evaluates this decision during the audit process to
ensure that the testing performed will provide a reasonable basis for the auditor’s conclusions.
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Approach to be Taken to Gain and Document an Understanding of the City’s Internal
Control Structure
Audit standards require us to gain an understanding of the City, its environment, and its internal controls
in order for us to properly plan our audit to address audit risk at the financial statement assertion level.
While the requirement to gain an understanding of the client, its environment, and its internal controls is
the same on every engagement, the factors affecting this information and the procedures performed to
gain this understanding are not the same for all engagements.
The objective in gaining this understanding is to identify types of potential misstatements, consider factors
that affect the risk of material misstatement, and design tests of controls, when applicable, as well as
substantive procedures. We anticipate evaluation of controls over the following significant areas:
• Cash and investments • Debt • Cash receipts
• Accounts and grants receivable • Financial reporting • Cash disbursements
• Capital assets • Grants • Payroll
• Payables and accrued liabilities • Pensions and OPEB
• Monitoring and risk assessment on an entity-wide level
• Other areas will be evaluated, as deemed necessary
Procedures performed in our initial assessment will include examination of the applicable documentation
(including policies and procedures), contracts, debt agreements, and other documentation necessary to
gain an understanding of the significant accounting and reporting controls in place, as well as our
expectations of what controls should be in place. Once, an understanding has been gained, we will
perform walkthroughs of the controls documented and make inquiries of staff.
The scope of testing performed on controls will be determined based upon our evaluation of both
inherent and control risk, along with our consideration of materiality (qualitative and quantitative) at both
the financial statement and account balance level. This evaluation will be completed during the planning
phase of the audit. The results of our assessment will determine the extent to which we will test controls,
as well as the nature, timing, and extent of substantive audit procedures to be performed.
Approach to Determining Laws and Regulations that will be Subject to Audit Test
Work
A key component in auditing any governmental entity is to determine those laws, regulations, and
contracts that have a significant impact on the financial statements. Our audit approach in this area
involves:
• Review of enabling legislation • Review of federal and state laws
• Review of prior financial statements • Review of grant agreements
• Inquiry of management and staff • Review of contracts and other agreements
Once significant laws and regulations that affect the City have been identified, we will develop compliance
testing to ensure that we address these issues.
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Areas currently identified as significant compliance areas are as follows:
• Debt covenants • Other significant agreements
• City’s investment policy • Federal and state grants
• Pension Plan requirements • Federal tax and wage reporting
Approach to be Taken in Drawing Audit Samples for Purposes of Tests of Compliance
Our auditors use sampling procedures to obtain satisfactory audit evidence. In developing our methods
for sampling, we utilize the methodology referenced in AU-C Sections 315, 330, and 530. Those sampling
procedures routinely include statistical and non-statistical sampling based upon sample population,
nature of the items being sampled, the required sample size, and the anticipated results.
Ordinarily, the significant portions of the sampling expected to be performed are identified at the onset
of the engagement and are coordinated with the remaining auditing procedures to produce timely and
efficient results.
We currently anticipate utilizing both attribute and variable sampling. Examples of areas where we will
apply sampling strategies include:
• the selection of cash receipts postings to test for determination of compliance with related
statutory requirements and utility rate schedules;
• the selection of cash disbursements and payroll transactions for compliance testing;
• the selection of debt payment transactions to test for timeliness and completeness of payments
to paying agents for debt costs and fiscal agent fees; and
• the selection of other transactions to determine compliance with laws and regulations.
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Identification of Anticipated Potential Audit Problems
Based on our review of the City’s prior-year CAFR and other information we have obtained, we do not
anticipate any specific audit problems. However, the public sector is highly regulated, and there are new
laws, regulations, standards, and pronouncements coming out on a regular basis. As these changes
become known, we will evaluate their impact on the City’s financial statements and the effect they might
have on the scope of our engagement. Members of your audit team have been auditing Florida
governments for over a quarter of a century. They are accustomed to change and understand how to deal
with it. As your auditors, we will gain an understanding of the issues at hand, communicate with you, and
help resolve them to our mutual satisfaction.
There are several new government accounting standards becoming effective over the next few years. MSL
will be able to support your staff and help guide them through the appropriate reporting of these new
standards. Our direct relationship with the standard setters will help ensure that we provide appropriate
guidance in the implementation of these new standards. Therefore, we do not anticipate this resulting in
any audit problems, as your audit team will be fully aware of and trained in the applicable accounting
requirements.
Our philosophy, when it comes to new rules, is that you, the client, and we, the auditors, are on the same
page. We believe in working with our clients to obtain all the necessary facts to ensure the correct
decisions are made. We share a common goal: to make certain that the City’s financial reporting is in
compliance with generally accepted accounting principles and federal and regulatory requirements. As a
Firm highly staffed with governmental professionals, we are confident that we are prepared to overcome
any challenges that may arise during the course of our relationship.
At MSL, we pride ourselves on being highly involved in our profession. As you saw in our engagement
team members’ résumés, we are actively involved in local and national professional organizations.
Beyond our commitment to give back to our profession, this involvement enables all of our staff to be
aware of all the issues that face our governmental clients. We encourage our clients, whenever possible,
to early implement accounting standards. Our goal is to work with our clients to ensure that the
implementation process goes smoothly and that the implementation is in accordance with the applicable
standards. We provide support and information to our clients. One way this is accomplished is at our
free, annual governmental training session held in the summer, where all of our clients can come and
discuss the accounting issues that face us all.
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Required Forms
Proof of Professional Liability Insurance
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Proof of Liability Insurance
Note: If MSL is awarded the contract, we will conform to all of the City’s insurance requirements and will
add the City as an Additional Insured to our policies.
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Public Entity Crimes and Conflicts of Interest Affidavit
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Public Entity Crimes and Conflicts of Interest Affidavit (Page 2)
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Public Entity Crimes and Conflicts of Interest Affidavit (Page 3)
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Drug Free Workplace Form
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No Conflict of Interest / Non-Collusion Affidavit
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No Conflict of Interest / Non-Collusion Affidavit (Page 2)
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Acknowledgement of Conformance with OSHA Standards
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Related Party Transaction Verification
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Related Party Transaction Verification (Page 2)
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Related Party Transaction Verification (Page 3)
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Affidavit Concerning Federal and State Vendor Listings
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Affidavit Concerning Federal and State Vendor Listings (Page 2)
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Presentation Team Declaration
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Additional Information
Certificate of Achievement for Excellence in Financial Reporting
Our experience in working with clients who have participated in the Certificate of Achievement for
Excellence in Financial Reporting program is, we believe, second to none. The following (from the 2014
program results, as posted on the Government Finance Officers Association website) are clients who
participate in the program, and with whom we have worked during the past few years:
MSL has the capability and experience to assist the City in continuing to receive the GFOA Certificate of
Achievement for Excellence in Financial Reporting. We will ensure throughout the engagement that the
City keeps current with any new accounting and reporting standards issued by the GASB. This will help to
make certain that the City continues receiving the Certificate of Achievement for Excellence in Financial
Reporting.
MSL Governmental Clients
Municipalities Municipalities (Cont.) Special Districts and Authorities
Altamonte Springs Leesburg Central Florida Expressway Authority
Apopka Orlando Greater Orlando Aviation Authority (GOAA)
Casselberry Pembroke Pines Miami-Dade Expressway Authority
Cocoa Beach Sanford Tohopekaliga Water Authority
Dunedin Tampa
Fort Lauderdale Venice
Indian Rocks Beach Winter Park
Kissimmee
School Districts
Counties Brevard County
Broward Escambia County
Citrus Osceola County
Lake Pasco County
Osceola Seminole County
Seminole Volusia County
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External Quality Control Review
Quality control in any CPA firm can never be taken for granted. It requires a continuing commitment to
professional excellence. We are formally dedicated to that commitment.
Our Firm recognizes the long-term significance of developing a formal quality control program. In an effort
to continue to maintain the standards of working excellence required by our Firm, we are members of the
Private Companies Practice Section (PCPS), the Center for Audit Quality (CAQ), and the Governmental
Audit Quality Center (GAQC) of the AICPA. To be a participating member firm, you must obtain an
independent compliance review of your firm’s quality control policies and procedures every three years
to ascertain compliance with existing auditing standards on the applicable engagements. The scope of the
peer review is comprehensive, in that, it specifically reviews the quality control policies and procedures
of the participating firm’s accounting and auditing practice, including its work product in various client
industries. We believe that our commitment to the program has been rewarding not only to our Firm, but
primarily to our clients.
The external, independent peer review of the elements of our quality control policies and procedures
performed by an independent certified public accountant selected by the AICPA provides both us and our
clients with the assurance that we continue to conform to the standards of the profession in the conduct
of our accounting and auditing practice.
Our Firm has undergone successful peer reviews since participation in the program. We take quality
control seriously. We understand our responsibility in providing you with auditing services that meet or
exceed the professional standards established by the AICPA, U.S. GAO, U.S. OMB, Florida Attorney
General, and Florida Board of Accountancy.
On the following page is our most recent peer review report for the period ended June 30, 2014, which
included a review of specific governmental engagements performed by MSL. It should be noted that no
comments were made as a result of this review.
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Price Proposal Sheet