Marcum LLPProposal for External Audit Services for the
CITY OF SOUTH MIAMI,
FLORIDA
Attn: Maria M. Menendez, CMC, City Clerk
RFP #FN-2016-06
April 15, 2016
MICHAEL D. FUTTERMAN,CPA,Partner
One Southeast Third Avenue | Suite 1100 | Miami, FL 33131
Phone 305.995.9610 | michael.futterman@marcumllp.com
MARCUMLLP.COM
Proposal for External Audit Services
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Letter of Transmittal ......................................................................................................3
1. The Firm................................................................................................................6
2. Independence..........................................................................................................10
3. License to Practice in Florida..................................................................................12
4. Firm Qualifications and Experience..........................................................................14
5. Prior Engagements with the City of South Miami......................................................30
6. Similar Engagements with Other Government Entities..............................................32
7. Specific Audit Approach..........................................................................................34
8. Identification of Anticipated Potential Audit Problems..............................................42
9. Required Forms......................................................................................................44
10. Price Proposal......................................................................................................63
Appendix A: Peer Review Report
Appendix B: Licenses
Appendix C: Certificates of Insurance
Table of Contents
LETTER OF
TRANSMITTAL
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Marcum LLP One Southeast Third Avenue Suite 1100 Miami, Florida 33131 Phone 305.995.9600 Fax 305.995.9601 www.marcumllp.com
April 15, 2016
City of South Miami
Attn: Office of the City Clerk
South Miami City Hall
Marcum LLP (Marcum) is pleased to respond to the request for proposal and to present our experience and
qualifications to provide external audit services to the City of South Miami, Florida (the City).
Effective June 1, 2009, the certified public accounting firm of Rachlin LLP merged with the certified public
accounting firm of Marcum & Kliegman LLP and became Marcum LLP. The Firm has 29 offices throughout the
U.S. making it one of the largest independent public accounting and advisory services firms in the nation.
Over our 60 year history, Marcum has provided professional services to the public sector, including local governments,
community redevelopment agencies,government pension plans, charter schools, counties, special districts and
other governmental entities. In the past year alone, the Florida region of Marcum has performed more than 40
audits of governmental entities. We have extensive experience with the Federal and Florida Single Audit Acts
and OMB Circular A-133 Super Circular.
As outlined in our proposal, we will conduct an audit of the financial statements of the City, for the fiscal years
ending September 30, 2016 and 2017, with the City reserving the right to extend the contract for one (1) additional
one (1) year term. We commit to performthe work within the time period defined in the request for proposal.
Marcum is independent of the City as defined by generally accepted auditing standards and the U.S. General
Accounting Office’s Government Auditing Standards.
THE MARCUM DIFFERENCE
EXPERIENCE IN GOVERNMENT:Marcum’s public sector services is one of its primary sectors and focuses
on local governments like the City, not-for-profit organizations and other governmental entities. We serve more
than 200 of such organizations nationally. In Florida, the public sector practice represents our largest industry
focus where we serve over 100 clients. We are committed to this industry sector.
LOCAL FIRM SERVICE PHILOSOPHY/NATIONAL FIRM RESOURCES:Being a National firm
with 29 offices and approximately 1,500 professionals, we serve as a strategic alternative to the larger firms.
The partnersand managers with whom you will develop relationships, drive all major decisions; possessing
both the appropriate resources and decision making authority. Our local firm approach provides hands-on
service and timely communication, resulting in the City receiving the best of both worlds.
SPECTRUM OF SERVICES:Our spectrum of services include Assurance Services, Advisory Services, Tax
Services and Technology Assurance Services. Marcum is a leader with an outstanding reputation at the national
and regional levels. The Firm does not have a record of substandard audit work, in fact, it is quite the opposite.
Section 4 of our proposal provides further detail of the degree of services as well as the effectiveness of our system
of quality control. Marcum’s commitment to audit quality is demonstrated by the results of our PCAOB
inspection which illustrates a 0% deficiency rate.
TRANSITION EXPERIENCE:Our team offers a great deal of experience with transitioning to new clients and
our process streamlines the transition while minimizing the disruption to you during the auditor change. As a result
of having a new team with a new approach, we offer you a different look at your systems with no pre-disposition
to those systems.
ABILITIES AND EXPERIENCE OF PROFESSIONAL STAFF: For this proposed engagement Marcum has
assembled an audit team whose skills and experience match the requirements of the City. The proposed client
service and audit engagement partner, Michael D. Futterman has extensive experience in performing audits of
governmental entities. Michael is also the partner-in-charge of governmental services for the Florida region of
Marcum. He will be supported by an audit senior manager, Enrique Llerena and a team of professionals. All decisions
that affect the planning, execution and completion of the proposed audit will be made by him. His experience in
conducting audits for other governmental entities brings a wealth of knowledge and gives us the opportunity to be
more efficient and effective to the City. As delineated in our proposal, Mr. Futterman will be supported by a quali-
fied team of professionals.
The issues of audit quality and technical proficiency are important matters for consideration. Equally important
is a firm’s commitment to continuing communications and providing a high caliber of professional service in
a timely manner. Accounting firms, like people, have distinctive personalities. Perhaps the quality that best
describes Marcum is our ability to go beyond the routine, to provide an extra dimension in quality, effort
and service to our clients.Marcum members are always accessible and are sensitive to your needs. We will be
available to answer questions, discuss audit issues, and provide solutions to such issues throughout the year as they
arise. We believe that this commitment and performance, as well as our commitment to ongoing communication
with you, sets Marcum apart from other firms. Although our fees may not be the lowest, our service, our
technical competency, and our value to you will be unparalleled. Our Florida offices are located in Miami,
Fort Lauderdale, West Palm Beach and Orlando. We currently have 180 employees in our four Florida offices,
however the resources of all of our offices are available to us.
Our technical competencies will be essential over the next several years with the implementation of new
significant Governmental Accounting Standards Board pronouncements. This assistance will be provided
at no additional cost to the City.
This proposal is a firm and irrevocable offer for ninety (90) days.
We welcome the opportunity to answer any questions and to provide further information regarding our services
and experience. Thank you for your consideration.
Sincerely,
Marcum LLP
Michael D. Futterman, CPA, Partner
Authorized to represent and contractually bind the Firm
Michael.Futterman@marcumllp.com
1. THE FIRM
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MARCUM
INTRODUCTION
Marcum LLP is one of the largest independent
public accounting and advisory services firms in the
nation. Ranked among the top 15, Marcum LLP offers
the resources of 1,500 professionals, including over
200 partners, in more than 29 offices throughout
the U.S., Grand Cayman and China. Headquartered
in New York City, the Firm’s presence runs deep
with full-service offices strategically located in major
business markets. Marcum is a member of the Marcum
Group, an organization providing a comprehensive
range of professional services spanning accounting
and advisory, technology solutions, wealth management,
and executive and professional recruiting. The Marcum
Group companies include Marcum LLP; Marcum
Technology LLC; Marcum Search LLC; Marcum Financial
Services LLC; Marcum Bernstein & Pinchuk LLP; and
MarcumBuchanan Associates LLC. For a listing of all
of Marcum’s partners, please visit our website at
www.marcumllp.com.
Established in 1951, Marcum is a leader with an
outstanding reputation at the national and regional levels.
Marcum offers an extensive range of professional
services and a high degree of specialization. In
addition to traditional accounting, assurance and tax,
including domestic and international tax planning and
preparation, the Firm’s professional services include
mergers and acquisition planning, family office
services, forensic accounting, business valuation
and litigation support. The Firm has developed several
niche practice areas serving private equity partnerships;
hedge funds; SEC registrants; real estate; government;
public and not-for-profit sectors; manufacturing;
construction; healthcare; and bankruptcies and
receiverships; as well as a China specialty practice.
Marcum professionals combine practical
knowledge with years of experience to provide a level
of understanding and service that is unique among
professional service firms. The Firm takes a team
approach to every engagement, ensuring the highest
degree of technical knowledge, experience and
understanding of current issues and regulatory
matters. In addition, as a founding member of The
Leading Edge Alliance, a worldwide group of large,
independent accounting practices, the Firm’s
professionals have added access to a wide range
of industry and service specialization.
OUR SPECTRUM OF SERVICES INCLUDE:
Assurance Services
Assurance services primarily involve the audit of
financial statements and the issuance of an opinion
on the fairness of the presentation of financial position
and results of operations of an entity.
Our philosophy and practice is to blend technical,
practical and business approaches when conducting
each engagement.
Assurance Governmental services also includes
single audits, compliance audits, forensic audits, IT
audits, internal audits, GASB implementation, financial
statement and CAFR preparation, performance or
operational reviews and a wide range of consulting
services for local governments.
Advisory Services
The Firm’s Advisory services encompass the
analysis of business problems, the evaluation of
the scope of specific situations, as well as the
development of solutions and alternative procedures.
The purpose of this comprehensive endeavor is to
assist clients in solving their management problems.
The scope of an advisory engagement is
determined in large measure by the client, and
depends partially on the extent of involvement of
the client’s own personnel. The Firm aims to provide
clients with “know-how” by using personnel who have
the knowledge and experience to serve clients in a
wide range of functional areas such as accounting
systems, computer systems, financial controls and
organizational structure as well as business valuations
and forensic audits.
Tax Services
The term tax services is sometimes understood
to mean tax return planning and preparation for
companies and individuals; however, all organizations,
including government entities, must understand and
comply with various provisions of the Internal Revenue
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Code. Our service team has the knowledge and
experience to meet our clients’ tax needs.
TECHNOLOGY ASSURANCE SERVICES (TAS)
Marcum’s Technology Assurance Services (TAS)
leverages core strengths in all areas of managing
technology risks into a strategic advantage for virtually
every sector of business and industry. The results are
stronger internal controls; smarter business practices;
and improved efficiencies, productivity and revenue
throughout your organization.
Our TAS team can asses your information risk
management and operational effectiveness. We
can then provide you with privacy, compliance
and technology consulting solutions. Experienced
professionals hold CISA, CISSP, CISM, CRISC, or
CPA accreditations along with many years of experience
in bringing unique solutionsto your business and IT
needs. This unique combination allows us to start with
your business challenges and then tailor IT solutions
to match your needs.
At Marcum, our TAS team helps clients achieve
optimum results in their ability to manage IT risk,
mitigatethose risks, and improve performance with
cost-effective solutions. Our goal is to deliver practical
solutions to the problem of “digital insecurity”, which
means helping to identify the most cost effective
ways to address specific concerns regarding it-related
compliance and control issues relevant to your
environment and needs. In addition,the TAS team
can design and implement ERP solutions that will
integrate your operations more efficiently.
Technology Consulting Insights
Our highly certified, trained technology auditors
and consultants, including CPAs, CISAs, CISSPs,
CISM, CRISC, CITP or SAP certified, understand the
financial reporting requirements of businesses. We are
objective and independent– our only mission is to
recommend the best solution for the client situation
to ensure financial information is accurately reported
and properly protected.
Top-Level Attention
Our Partners and Professionals believe in offering
the highest quality of personal service along with the
delivery of an exceptional product on every engagement.
Personal Service
Our TAS team understands your technology risk
issues. We are able to tailor IT solutions to match your
business needs while maintaining strong internal
controls and advancing smart business practices.
The Marcum TAS Group helps clients achieve
quantum leaps in their ability to manage operations
and improve performance with cost-effective solutions.
We assess how technology drives a client’s business
and create a plan to enable business strategies. The
result: technology solutions that drive your bottom line.
Information Risk Management
n SSAE 16 (SOC 1)
n SOC 2
n SOC 3 (SysTrust, WebTrust)
n Encryption Advisory
n Agreed Upon Procedures
n Readiness Assessment
n Enterprise-Wide Risk Assessment
n Operational Audits
n Technology Audits
n Outsourcing
n Co-Sourcing
Operation Effectiveness
n IT Governance
n Process Improvement
n Business Process Reviews
n Policies, Procedures & Documentation
n Application Controls Reviews
n Project Support Office
n System & Process Implementation
n Performance Monitoring
n Metrics – IT & Operational
n Service Level Agreements
n Infrastructure Monitoring & Analysis
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Privacy & Compliance
n Compliance Function Assessments
n Privacy & Regulatory Compliance
n Sarbanes-Oxley Act (Internal or External)
n General IT Controls
n Application Specific IT Controls
n Gramm-Leach-Bliley Act (Privacy)
n ISO Assistance
n HIPAA Security and Privacy Compliance
n Policies & Procedures
n Dodd-Frank
n OFAC
Technology Consulting
n Attack & Penetration Testing
n Security Strategy & IT Strategy
n MA 201 CMR 17.00
n Enterprise Security Architecture Design
& Implementation
n Network Design, Implementation & Maintenance
n Vulnerability Assessments
n Business Continuity & Disaster Recovery
Planning
RELATED SERVICES FOR GOVERNMENTAL ENTITIES
GFOA Certificate of Achievement Program
We have assisted all of our clients who participate
in the GFOA Certificate of Achievement for Excellence
in Financial Reporting Program. This program is
recognized as the highest award in governmental
financial reporting. The Certificate of Achievement
has been awarded on all of the financial statements
for participating clients, including first time submissions.
Several membersof the Marcum team are special
reviewers for the GFOA Certificate of Achievement
Program. Michael D. Futterman has been a special
reviewer for the Certificate Program since 1992 and
Enrique Llerena is a also a Certificate Program
reviewer.
EXPERIENCE IN FINANCIAL AND SINGLE AUDITS
The Firm, including our Florida offices has more
than 60 years of experience in performing audits of
governmental entities, including preparing governmental
financial statements and performing Federal and
Florida Single Audits. Annually we perform more
than 100 Single Audit engagements.
ADDITIONAL CONSULTING SERVICES
In addition to the regular audit requirements,
additional consulting services or other audit related
matters outside the performance of the annual audit
can be performed at the City’s request. A fee for such
services will be negotiated for each instance that
consulting services are requested by the City.
2. INDEPENDENCE
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INDEPENDENCE
Marcum’s policy is that all professional personnel
be familiar with and adhere to the independence,
integrity, and objectivity rules, regulations, interpretations,
and rulings of the American Institute of Certified Public
Accountants, the state Board of Accountancy and
state CPA societies, relevant statutes, and applicable
regulatory agencies. In addition, all professionals –
from partner to staff auditor – are required to sign
affidavits annually attesting to their independence.
The Firm is independent of the City of South Miami
as defined by Generally Accepted Auditing Standards
and the U.S. General Accounting Office’s Government
Auditing Standards.
Marcum’s quality control document contains
detailed policies related to maintaining independence.
These policies are the most stringent policies adopted by
the AICPA and the various state boards of accountancy.
Engagement team members are required to consider
any possible situations where independence may
be impaired during the acceptance or continuance
process and if any arise during the performance of
an engagement.
Marcum has not had any professional relationships
with the City in the past five (5) years. Marcum shall
provide to the City written notice within five (5) days
of any professional relationships entered into during
the period of this agreement.
3. LICENSE TO PRACTICE
IN FLORIDA
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LICENSE TO PRACTICE IN FLORIDA
We affirm that Marcum LLP is a licensed certified
public accounting firm and is in good standing with
all regulatory agencies. The Firm is a member of the
American Institute of Certified Public Accountants
(AICPA) and the Florida Institute of Certified Public
Accountants (FICPA). All professional staff, upon
successful completion of the CPA exam, become
members of both organizations.The Firm and all
assigned key professional staff are properly licensed
and certified to practice in Florida. The Firm is
registered annually with the Florida Department of
Business and Professional Regulation – Board of
Accountancy.
Applicable licenses are in Appendix B.
4. FIRM QUALIFICATIONS
AND EXPERIENCE
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LOCAL OFFICES
The Florida Division of Marcum has offices in Miami,
Fort Lauderdale, West Palm Beach and Orlando with
18 partners and a staff of 162, including support staff.
The size of our governmental staff is as follows:
The audit partner, Michael D. Futterman, the audit
senior manager, Enrique Llerena, the auditsupervisor,
Branden Lopez and staff auditors from the Florida offices
will be assign ed to this engagement on a full-time basis.
The IT risk specialist/senior manager Jose Antigua will
be assigned to this engagement on a part-time basis
to address IT considerations and evaluations.
QUALITY CONTROL SYSTEM
The quality of the Firm’s professional practice is
of utmost importance to the Firm, to clients and to
the users of our reports. We provide services that
conform to professional standards and consider
the integrity of individuals in determining our
professional relationships.
The Firm participates in an external quality
review program requiring an on-site independent
examination of our Accounting and Auditing practice.
The Firm has consistently received a “clean” opinion
on the quality of the Firm’s audit practice. This is the
highest level of achievement and recognition in the
peer review program. The latest peer review report
for Marcum LLP areincluded in Appendix A. The Firm’s
governmental engagements were included in its
latest review.
The following page illustrates our system of quality
control and its importance to us as a Firm. Even though
the PCAOB inspection, which is much more stringent
than a peer review, applies to public companies, it
demonstrates Marcum’s efforts for effective audits.
Please note Marcum’s 0% deficiency rate.
DISCIPLINARY ACTION
There are no actions as a result of any federal or
state desk reviews or field reviews to the Firm’s audits
or its auditors of governmental entities during the past
three (3) years.
There has been no disciplinary action taken nor
pending against the Firm or any of the professional
staff during the past three (3) years with the State
Board of Accountancy or the Auditor General or any
other regulatory bodies.
ADDITIONAL SERVICES
Marcum posses the ability and experience to
provide additional services which may be requested
by the City. In the past, we have been engaged by
various governmental organizations, some being
our audit clients, to provide services that range from
Internal Control Assessments and Operations Reviews
to Forensic Audits, IT Audits, Performance Audits,
and Compliance Audits.
Marcum Total Governmental
Staff
Partners 18 3
Directors 2 1
Senior Managers 13 1
Managers 12 3
Supervisors 16 3
Seniors 26 11
Staff Accountants 55 22
Operations 40 2
TOTAL 180 46
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Marcum LLP*14 0 0%
BDO USA LLP 22 17 77%
Grant Thornton LLP 36 20 56%
KPMG LLP 51 28 55%
RSM (formerly McGladrey & Pullen LLP)15 7 47%
Crowe Horwath LLP 14 5 36%
Ernst & Young LLP 56 20 36%
PricewaterhouseCoopers LLP 57 17 30%
Deloitte & Touche LLP 52 11 21%
* Includes Marcum Bernstein & Pinchuk
Company
No. of Engagements
Reviewed by PCAOB
No. of Engagements
with One or More
Deficiencies
Deficiency
Rate
PCAOB INSPECTION RANKINGS
Ranked by Deficiency Rate for the Top SEC Audit Practices in the United States
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PARTNERS, SUPERVISORY, AND STAFF QUALIFICATIONS AND EXPERIENCE
TEAM STRUCTURE
Michael D. Futterman, CPA
Client Service and Audit Partner
Staff Auditors
Branden Lopez, CPA*
Supervisor
Enrique Llerena, CPA
Senior Manager
Jose Antigua,
CISA, COBIT, ACDA, ACT
IT Risk Specialist - Senior Manager
The experience of the personnel assigned to the
engagement is critical to providing you with an effective
and efficient audit. Their prior experience will be invaluable
to the engagement. These are the professionals who will
be on the job on a day-to-day basis; they need to be
experienced in auditing governmental entities. These
professionals are familiar with the complexities of
governmental accounting, auditing and financial reporting,
including all GASB pronouncements, the Federal and
Florida Single Audit Acts, OMBCircular A-133/Uniform
Guidance, fund operations, State Laws and Rules of the
Auditor General.
The individuals listed will be assigned to the
engagement. Michael D. Futterman and Enrique Llerena
are designated as the “key” members of the audit team.
The key members assigned to this engagement are
licensed to practice in the state of Florida. Each individual
on the engagement has maintained the required CPE in
governmental accounting and has attended an Ethics
course for CPAs in Florida. The following pages provide
a brief description of each individual’s experience in
governmental audits.
Resumes for the audit team that will be assigned to
this engagement team are on the following pages. Our
commitment to active participation in local governmental
organizations is included in the resumes. The resumes
also include each individual’s educational background,
CPE over the past three years and other pertinent
information.
Since all of Marcum’s governmental audit staff
are qualified to perform financial and single audits
of local governments and other government agencies,
the Firm can assure the quality of staff over the
engagement term.
Engagement partners, managers, other
supervisory staff and specialists may be changed
if those personnel leave the Firm, are promoted or
are assigned to another office. These personnel may
also be changed for other reasons with the express
prior written permission of the City. However, in either
case, the City retains the right to approve or reject
replacements. Our Firm policy is to maintain continuity
of staff assignment on succeeding audits.
Key members mentioned in this proposal can only
be changed with the express prior written permission
of the City, which retains the right to approve or
reject replacements. Other audit personnel may be
changed at the discretion of the proposer provided that
replacements have substantially the same or better
qualifications or experience.
*Licensed in New Hampshire
Quality Control
Review Partner
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QUALIFICATIONS OF KEY STAFF
Michael D. Futterman, CPA
Client Service and Audit Partner
Michael Futterman has more than 25 years
experience in the governmental accounting and
auditing sector and is highly qualified to serve as the
audit engagement partner. Michael Futterman is also
the partner in-charge of governmental services for
the Florida region.
Mr. Futterman will assume full responsibility for
the engagement and will maintain continuous contact
with management of the City. Mr. Futterman will be
available to members of the engagement team and
management as a high-level technical resource. He also
will review the financial statements,related independent
auditors’ reports and other documents to ensure that
industry standards have been adhered to and that the
financial statements are in conformity with Firm and
|authoritative pronouncements regarding disclosure,
format, terminology, etc.
Quality Control Review Partner
Our quality control review department has
extensive experience in the governmental accounting
and auditing sector. The quality control review partner is
responsible for reviewing the form and content of the
audit workpapers and the auditor’s report as well as the
review of the financial statements in accordance with
Firm and professional standards. This partner also
serves as a high level technical resource for the
engagement team as well as management.
Enrique Llerena, CPA
Senior Manager
As the audit senior manager, Mr. Llerena will
be responsible for the planning and direction of
the audit, developing audit programs, selecting
and assigning personnel and reviewing all phases
of the audit. He will also maintain contact with the
City personnel, coordinate ongoing work and advise
management on the status of the engagement.
As the senior manager, Mr. Llerena will also report
to the audit partner. He has 10 years of experience
serving clients in the private and governmental sectors.
Jose Antigua, CISA,COBIT, ACDA, ACT
IT Risk Specialist and Senior Manager
Over the past 9 years Mr. Antigua has worked
with very large organizations, mid-sized organizations,
non-profit organizations, and local governments
providing IT, operational, audit and management
consulting services. His range of experience provides
him the insight to define, develop and implement
scalable, business-valued, cost-efficient solutions that
effectively leverage information technology. Mr. Antigua
is our IT group leader in support of financial audits.
Branden Lopez, CPA*
Supervisor
As the audit supervisor, Mr. Lopez will be
responsible for the supervision of the staff and
will review all workpapers they prepare. He will
be responsible for addressing complex audit
areas and keeping the director and audit partner
informed of the engagement progress. Mr. Lopez
has approximately 6 years of experience serving
clients in the private and governmental sectors.
*Licensed in New Hampshire
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Professional Development
Every year, Marcum provides a minimum of 40
hours of continuing professional education (CPE)
in-house to all professional staff. These seminars
include sessions in governmental accounting,auditing
and financial reporting, including Yellow book, single
audit, IT audits and information systems and other
accounting and auditing issues. In addition to the
in-house training, our partners and professional staff
attend various outside seminars.The number of hours
of specialized training received in the last three years
by supervisory personnel assigned to the audit
engagement in governmental accounting and auditing,
including information technology auditing, is indicated
in each respective resume included in this proposal.
Marcum is also committed to providing professional
development programs to the entire South Florida
community involved in the governmental sector.
For the past 20 years, Marcum has presented an
annual Governmental Symposium,which is an
8 hour accounting and auditing seminar that focuses
on current developments in governmental affairs,
including accounting, legal and operational topics.
We encourage our clients, and non-clients,
at no cost to them, to attend this technical
(CPE) Symposium.
All members of the audit team meet or exceed the
CPE requirements mandated by professional auditing
standards (including Government Auditing Standards)
and all CPAs assigned meet or exceed the CPE
mandated by the State Board Accountancy.
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1. PARTNERS
Partners have the primary responsibility for assuring that the Firm’s commitments to the client are carried out
to the client’s satisfaction.
PARTNERS
Essential Functions
•Responsible for Firm-wide audit practice
•Allocates Firm’s resources to meet client’s needs
•Assumes overall responsibility for audit
•Discusses important aspects of audit with client
•Resolves any audit issues with client
•Reviews the audit documentation to ensure the audit is carried out with due
professional care
•Reviews financial statements, auditor’s reports, and management letter
comments and discusses them with client
•Signs audit reports and management letters
•Meets with management on an as-needed basis
• Communicates progress of the engagement, problems, and resolutions to the client
2. SENIOR MANAGERS
The senior managers oversee the engagement and communicate with the client on a one-on-one basis.
SENIOR MANAGERS
Essential Functions
•Plans, schedules, and staffs the engagement
•Evaluates internal controls and work programs prepared by staff
•Reviews working papers for accuracy and completeness and reviews financial
statements for suitability of presentation and adequacy of disclosures
•Anticipates problem areas of the engagement and questions that will arise
•Keeps partners informed of all important developments on the engagement,
analyzes problems and recommends solutions
•Supervises all staff and reviews workpapers prepared by staff to ensure that they are
prepared in accordance with generally accepted professional and Firm standards
•Resolves accounting and auditing problems as they arise
•Reviews with the partner significant findings or questions that arise involving
accounting principles or statement presentations
•Writes comments for management letters
•Reviews financial statements, notes, schedules, and management letters for later
discussion between the partner and the client
•Communicates the engagement's progress, problems, resolutions, and
other concerns to the client
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3. SUPERVISORS
Supervisors are the liaison between the partners, the manager and the client.
SUPERVISORS
Essential Functions
•Supervises staff and reviews workpapers prepared by seniors and staff to
ensure that they are prepared in accordance with generally accepted
professional and firm standards
•Performs audit procedures as assigned by the manager
•Resolves accounting and auditing problems as they arise
•Studies and evaluates the client’s internal controls
•Reviews with manager significant findings or questions involving accounting
principles or statement presentation
•Writes comments for management letter
•Reviews financial statements, notes, schedules and management letters for
later discussion between the manager and the client
•Communicates the engagement's progress, problems, resolutions and
other concerns to the client
STAFF AUDITORS
Staff Auditors perform a wide variety of diversified assignments under the direction of supervisory professionals.
STAFF AUDITORS
Essential Functions
•Performs less complex audit procedures as assigned by the supervisor
•Performs tests of transactions and accounts
•Prepares and indexes audit documentation
•Tests client accounting and analysis schedules
•Proposes audit adjustments for review by the supervisor
•Assists in preparing confirmation requests for mailing
•Informs the supervisor of audit issues
•Assists in proofing financial statements
CPE (past three years)
Governmental 102
Other (Accounting, Auditing,
Technical and Behavioral)45
Total 147
Page 22
Michael Futterman is the Partner-in-Charge of the Firm’s Miami office
as well as the Partner-in-Charge of the Governmental Services Practice for
the Southeast Region. He focuses much of his work in the local government,
not-for-profit and employee benefit plan sectors. With more than 26 years
of professional experience, primarily in the governmental services sector,
Mr. Futterman provides consulting on accounting, financial reporting and
operational matters. In addition, he conducts peer reviews for large and
mid-size accounting firms.
Within the Firm, Mr. Futterman performs quality control reviews of the
employee benefit plans audit engagements, for governmental entities,
governmental pension plans, and not-for-profit organizations.
Mr. Futterman is actively involved in training for the professional
staff and is responsible for developing internal training programs for the
governmental, not-for-profit, and employee benefit plans sectors as well
as external training for the accounting profession.
Professional & Civic Affiliations
American Institute of Certified Public Accountants (AICPA)
Florida Institute of Certified Public Accountants (FICPA)
Florida Government Finance Officers Association (FGFOA)
Government Finance Officers Association (GFOA)
South Florida Government Finance Officers Association (SFGFOA)
GFOA Certificate of Achievement Program Special Review Committee, Member
Miami-Dade, Broward and Palm Beach Counties Leagues of Cities
Florida Public Pension Trustees Association
Florida Association of Special Districts
AICPA Employee Benefit Plan Audit Quality Center, Designated Audit Partner
AICPA Governmental Audit Quality Center, Designated Audit Partner
Dade Schools Athletic Foundation, Treasurer
Articles, Seminars & Presentations
“GASB Statement No. 72, Fair Value Measurement and Application”, 2016 SFGFOA
“Nuts and Bolts of an Audit”, 2015 FGFOA Annual Conference
“GASB Hot Topics”, FGFOA Webinar Series, 2015
“GASB Statements No. 67 and 68” Marcum 2015 Governmental Symposium
“Risk-Based Approach to Governmental Audits,” Internal Training
Annual Governmental Accounting (GASB) and Government Auditing Standards,
Internal Training
“Federal and Florida Single Audit Acts,” Internal Training
“ERISA Pension Plans,” Internal Training
“The New Risk Assessment Standards,” Annual Internal Training
“GASB Statement No. 34,” Presentation to University of Miami Students
“Preparing a Comprehensive Annual Financial Report,” FICPA Training
“Common Reporting Deficiencies in Governmental Financial Statements,”
Palm Beach Chapter FGFOA, 2012
Michael D. Futterman
ASSURANCE SERVICES
AREAS OF EXPERTISE
Financial Audits
Federal Single Audits
Florida Single Audits
Employee Benefit Plans
Operations or Performance Reviews
Agreed-Upon Procedures
Internal Control Assessments
Consulting Services
Peer Reviews
KEY CLIENTS
Local Governments
Special Districts
Governmental Pension Plans
ERISA Pension Plans
Not-for-Profit Organizations
EDUCATION
Bachelor of Business Administration,
Florida Atlantic University
Michael D. Futterman,CPA*
Partner
*Licensed by the States of Florida and New York
Phone 305.995.9610
michael.futterman@marcumllp.com
www.marcumllp.com
Proposal for External Audit Services
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23
*Bal Harbour Village 8
City of Aventura 3
*City of Boca Raton 6
*City of Coconut Creek 1
*City of Florida City 22
*City of Hallandale Beach 5
City of Hialeah 6
*City of Homestead 8
City of Marathon 5
City of Miami Springs 7
City of Miramar 8
City of North Miami 15
City of North Miami Beach 7
City of Oakland Park 2
*City of Palm Beach Gardens 1
City of Pembroke Pines 9
*City of Sunrise 7
City of Sunny Isles Beach 5
City of Tamarac 3
*City of West Palm Beach 4
*Florida Keys Aqueduct Authority 4
Miami Shores Village 8
*Miami-Dade Water & Sewer Department 10
*Northern Palm Beach County
Improvement District 8
*Town of Bay Harbor Islands 7
Town of Lauderdale-By-The-Sea 6
Town of South Palm Beach 4
*Town of Surfside 6
Village of Golf 7
*Village of Key Biscayne 21
Village of Palmetto Bay 5
*Village of Tequesta 5
Years Includes Single CRA
on Job Pension Audits Audit Audit
CURRENT AND FORMER GOVERNMENTAL CLIENTS
MICHAEL D. FUTTERMAN, CPA
Government Experience
*Current Client
Jose Antigua is a Senior Manager in the Firm's IT & Risk Assurance
Division. In this capacity, he is responsible for the assessment of the internal
controls of Firm clients as they relate to financial audits. Mr. Antigua has
more than nine (9) years of experience working with information technology
for clients in the financial, healthcare, IT services, government and retail
industries. His experience includes IT infrastructure, e-mail systems, backup
and networking. He has assisted with numerous audit engagements,
developing and assessing IT risk over financial reporting, IT security (including
vulnerability assessment, penetration testing and social engineering), IT
Governance, disaster recovery and information systems management.
He is an expert in the use of computerized audit techniques to access
and analyze data to maximize audit efficiency. He has implemented numerous
Continuous Audit (CA) and Continuous Control Monitoring (CCM) projects.
In addition, Mr. Antigua works with Marcum's teams to bridge the gap
between financial audits and internal controls and information systems
auditing. He executes compliance engagements according to various
regulations including SOX, HIPPA, SOC 1, 2, 3, and AML. He identifies
process and control weaknesses, analyzes complex systems and works
with clients to streamline operations within time and resource constraints.
Also he conducts IT Risk Assessments and IT Control Assessments in
numerous vertical markets.
Professional & Civic Affiliations
Information Systems Auditing and Control Association (ISACA)
Institute of Internal Auditors (IIA)
Toastmasters International
Designations & Accreditations
Certified Information Systems Auditor
ACL Certified Data Analyst and Trainer
COBIT 5 Foundations (IT Governance and Management)
Articles, Seminars & Presentations
Risk Management, an Integral Approach: June 2015
Governance, Risk and Compliance (GRC) in practice: November 2014
Internal Control Framework based on COSO 2013: October 2014
Closing the gaps between COBIT 4.1 and COBIT 5: August 2014
IT Audit for CISA exam preparation: July 2014
Information Security for Banking Industry: November 2013
José L. Antigua
ASSURANCE SERVICES
AREAS OF EXPERTISE
IT Audits
Application Reviews
Security Assessments
SOC 1, 2, 3
Internal Control and Risk Management
CAAT (including CA and CCM)
KEY CLIENTS
Financial Services
Government
Healthcare
IT Services
Retail
EDUCATION
Bachelor Degree in
Systems Engineering
Instituto Tecnologico de Santo
Domingo (INTEC)
José L. Antigua,
CISA, COBIT, ACDA, ACT
Senior Manager
Phone 305.995.9600 Ext. 38054
jose.antigua@marcumllp.com
www.marcumllp.com
CPE (past three years)
Information technology related for a
Certified Information Systems Auditor,
including accounting, Auditing, COSO
Total 129
Page 24
Enrique Llerena is a Senior Manager in the Firm’s Assurance Division.
He has more than 10 years of experience in the accounting profession
providing accounting and auditing services to a wide range of clientele
including governments, not-for-profit organizations, employee benefit
plans, and construction.
Mr. Llerena is involved in all phases of the audit process, from planning
and initial risk assessment to ensuring compliance with all State and Federal
laws, and the preparation and review of financial statements. He has extensive
experience in the evaluation of internal controls and ensuring that financial
statements are prepared in accordance with Firm and professional standards.
He is client service driven and is always willing to assist clients with accounting,
auditing and financial reporting issues.
Mr. Llerena also is involved in training initiatives for the Firm’s staff and
also serves on the panel for annual governmental training within the Firm.
Professional & Civic Affiliations
American Institute of Certified Public Accountants (AICPA)
Florida Institute of Certified Public Accountants (FICPA)
Government Finance Officers Association (GFOA)
GFOA Special Review Committee, Active Member
Miami-Dade, Broward and Palm Beach Counties Leagues of Cities,
South Florida Government Finance Officers Association (SFGFOA),
Associate Member
Florida Government Finance Officers Association (FGFOA)
Cuban-American Certified Public Accountants Association Inc., Director
Articles, Seminars & Presentations
“Navigating Through GASB 68”, Author
“GASB Statement No. 72 - Fair Value Measurement and Application”, Author
Internal CPE Training, Instructor
“Governmental Accounting (GASB) and Government Auditing Standards”,
Internal Training
FGFOA Conference Presenter, “Clarified Auditing Standards”
SFGFOA Presenter, “Financial Audit Preparation”
Enrique Llerena
ASSURANCE SERVICES
AREAS OF EXPERTISE
Financial Audits
Federal Single Audits
Florida Single Audits
Employee Benefit Plans
Agreed-Upon Procedures
Attestation Services
Operational & Performance Reviews
Internal Control Reviews
Consulting Services
KEY CLIENTS
Governments
Construction Companies
Not-for-Profit Organizations
Governmental Pension Plans
Employee Benefit Plans
Special Districts Authorities
EDUCATION
Master of Accounting,
Florida International University
Bachelor of Science, Accounting,
Florida International University
Enrique Llerena,CPA*
Senior Manager
*Licensed by the State of Florida
Phone 305.995.9614
enrique.llerena@marcumllp.com
www.marcumllp.com
CPE (past three years)
Governmental 78
Other (Accounting, Auditing,
Technical and Behavioral)56
Total 134
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Proposal for External Audit Services
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Years Includes Single CRA
on Job Pension Audits Audit Audit
ENRIQUE LLERENA, CPA
Government Experience
CURRENT AND FORMER GOVERNMENTAL CLIENTS
Broward County 3
*City of Florida City 1
*City of Homestead 2
City of Hialeah 2
City of Hialeah Gardens 1
City of North Miami 3
City of North Miami Beach 3
*City of Palm Beach Gardens
*City of Sunrise 5
Town of Cutler Bay 1
Indian Creek Village 2
*Village of Key Biscayne 2
City of Plantation 2
City of Dania Beach 1
*Children’s Services Council of Broward County 1
*Town of Bay Harbor Islands 1
*City of Hallandale Beach 3
*City of West Palm Beach 3
*Miami-Dade Water & Sewer Department 3
*Current Client
CPE (past three years)
Governmental 74
Other (Accounting, Auditing,
Technical and Behavioral)78
Total 152
Branden Lopez is a Senior auditor in the Firm’s Assurance Division. He has
approximately 6 years of experience in the accounting profession providing
accounting, and auditing, for local government, and public and private
enterprises across a variety of industries, both domestically and internationally.
He provides services to a wide range of clients within the aforementioned
industries, these include: manufacturing, not-for-profit (museums, charter
schools, etc.), telecommunication, and employee benefit plans. In addition,
Mr. Lopez has significant expertise in performing Federal and Florida Single
Audits in accordance with OMB Circular A-133 and the Florida Single Audit
Act, as well as program-specific compliance audits.
Mr. Lopez is involved in all phases of the audit process, from planning
and initial risk assessment to ensuring compliance with all State and Federal
laws, and the preparation and review of financial statements. He is client
service driven and is always willing to assist clients with accounting, auditing
and financial reporting issues, including but not limited to, implementation
of new accounting pronouncements.
Professional & Civic Affiliations
American Institute of Certified Public Accountants (AICPA)
YMCA Young Professionals, Board Member
Branden A. Lopez
ASSURANCE SERVICES
AREAS OF EXPERTISE
Financial Audits
Federal Single Audits
Florida Single Audits
Program-Specific Compliance Audits
KEY CLIENTS
Local Governments
Not-for-Profit Organizations
(Museum, Charter Schools, Etc.)
Governmental Pension Plans
Special Districts
Wholesale & Retail Distributors
Manufacturers
EDUCATION
Bachelors of Accounting
– Florida State University
Branden A. Lopez,CPA*
Supervisor
Phone 561.653.7300 ext. 9687
branden.lopez@marcumllp.com
www.marcumllp.com
*Licensed by the State of New Hampshire
Page 27
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CURRENT AND FORMER GOVERNMENTAL CLIENTS
Years Includes Single CRA
on Job Pension Audits Audit Audit
BRANDEN A. LOPEZ, CPA*
Government Experience
*Bal Harbor Village 2
*City of Homestead 3
*City of Boca Raton 1
* City of Hallandale Beach 2
*City of Sunrise 2
*City of West Palm Beach 1
*Town of Bay Harbor Islands 2
*Current Client
**Licensed in New Hampshire
Proposal for External Audit Services
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CLIENT NAME OBTAINED GFOA
CERTIFICATE
Miami-Dade County
City of Florida City
City of Homestead
Miami Dade Water & Sewer Department
Bal Harbour Village
Town of Bay Harbor Islands
Town of Surfside
Village of Key Biscayne
Indian Creek Village
Broward County
The Children’s Services Council of Broward County
City of Coconut Creek
City of Hallandale Beach
City of Sunrise
Town of Southwest Ranches
City of Deerfield Beach
Monroe County
Florida Keys Aqueduct Authority
Palm Beach County
City of Boca Raton
City of Greenacres
City of Palm Beach Gardens
City of West Palm Beach
Northern Palm Beach County
Improvement District **
Village of Tequesta
CURRENT AND RECENT ENGAGEMENTS
**This organization does not prepare a CAFR
5. PRIOR ENGAGEMENT WITH
THE CITY OF SOUTH MIAMI
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PRIOR ENGAGEMENT WITH THE CITY OF SOUTH MIAMI
Marcum LLP has not performed any services for the City of South Miami in the last five (5) years.
6. SIMILAR ENGAGEMENTS WITH
OTHER GOVERNMENTAL ENTITIES
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SIMILAR ENGAGEMENTS WITH OTHER ENTITIES
The following represents the most significant engagements performed in the last five (5) years by our Florida
office’s governmental team. Additional references, based on the following page, can be provided upon request.
Agency Name Village of Key Biscayne
Phone 305-365-8903
Contact Name/Title Vivian Parks, Finance Director
Email Address vparks@keybiscayne.fl.gov
Scope of Work Financial Audit
Most Recent Year Audited September 30, 2015
Partner Michael Futterman
Total Hours 400
Agency Name Town of Bay Harbor Islands
Phone 305-866-6241
Contact Name/Title Alan Short, Finance Director
Email Address ashort@bayharborislands.net
Scope of Work Financial Audit
Most Recent Year Audited September 30, 2015
Partner Michael Futterman
Total Hours 450
Agency Name City of Homestead
Phone 305-224-4543
Contact Name/Title Carlos Perez, Finance Director
Email Address cperez@cityofhomestead.com
Scope of Work Financial Audit and Single Audit
Most Recent Year Audited September 30, 2015 (in process)
Partner Michael Futterman
Total Hours 900
Agency Name City of Sunrise
Phone 954-746-3297
Contact Name/Title Wendy Dunbar, Acting Director of Finance
and Administrative Services
Email Address wdunbar@sunrisefl.gov
Scope of Work Financial and Single Audit
Most Recent Year Audited September 30, 2015
Partner Michael Futterman
Total Hours 1,000
Agency Name Miami-Dade Water & Sewer Department
Phone 786-552-8935
Contact Name/Title Josephine Barrios, Assistant Controller
Email Address barrjo@miamidade.gov
Scope of Work Financial Audit and Single Audit
Most Recent Year Audited September 30, 2015 (in process)
Partner Michael Futterman
Total Hours 1,300
7. SPECIFIC AUDIT
APPROACH
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SPECIFIC AUDIT APPROACH
Scope of Services
Based on our understanding of the expectations
and requirements of the City as set-forth in the
request for proposal, the following is a summary of
the scope of our work. All work will be completed in
the timeframe specified in the request for proposal.
Audit of the City’s Financial Statements
The Firm will perform an audit of the financial
statements of the City of South Miami, Florida for the
fiscal years ending September 30, 2016 and September
30, 2017, with the City reserving the right to extend the
contract for one (1) additional one (1) year term. The
objective of the audit is the expression of an opinion
that the financial statements are fairly presented, in all
material respects,and in conformity with accounting
principles generally accepted in the United States.
The Firm will issue the following reports in
accordance with Generally Accepted Auditing
Standards and Government Auditing Standards:
• Report on the fair presentation of the basic
financial statements as a whole in conformity
with accounting principles generally accepted
in the United States.
• Report on internal control over financial
reporting and on compliance with laws and
regulations and other matters based on
an audit of financial statements performed
in accordance with Government
Auditing Standards.
• Management letter in accordance with the
Rules of the Auditor General.
• Independent Accountants Report on
Compliance Pursuant to Section 218.415
Florida Statutes.
As applicable, the Firm will perform a single audit in
accordance with generally accepted auditing standards,
Government Auditing Standards, the Federal Single
Audit Act the provisions of OMB Circular A-133/Uniform
Guidance, the Florida Single Audit Act, and the Rules
of the Auditor General of the State of Florida.
As applicable, the following additional reports
will be issued:
• Report on the schedule of expenditures of
federal awards and state financial assistance.
• Report on compliance and internal control
over compliance applicable to each major
federal awards program and state financial
assistance project.
• Schedule of findings and questioned costs.
We will also provide technical assistance to ensure
the City’s Comprehensive Annual Financial Report
meets all the requirements of the GFOA’s Certificate
of Achievement for Excellence in Financial Reporting.
Each year, we will also review the (AFR) annual
financial report filed by the City with the Department
of Financial Services, pursuant to section 218.32,
Florida Statutes, to verify that it is in agreement with
the audited financial statements.
Required Standards
The Firm’s audit will be performed in accordance
with the following requirements, as applicable:
• Statements on Auditing Standards issued
by the AICPA
• GovernmentAuditing Standards,issued by
the Comptroller General of the United States
• Codification of Governmental Accounting
and Financial Reporting Standards,as
promulgated by the Governmental Accounting
Standards Board
• Audit and Accounting Guide, State and
Local Governments, published by the American
Institute of Certified Public Accountants (AICPA)
• Statements and interpretations issued by
the Financial Accounting Standards Board
• Florida Statutes, Chapter 189 and 11.45
• Florida Statutes, Section 218.39
• Rules of the Auditor General of the State
of Florida, Chapter 10.550
• State of Florida Department of
Financial Services
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• OMB Circular No. A-133, Office of Management
and Budget, Audits of the States, Local
Governments and Non-Profit Organizations
issued by the United States
• United States Single Audit Act of 1996,
as amended
• Florida Single Audit Act, (Section 215.97,
Florida Statutes) and Chapter 270-1, Rules
of the Executive Office of the Governor
• All other applicable provisions of rules,
regulations, statutes or orders which may
pertain to the engagement
Monitoring and Communication
The Firm will report the following information to the
City Commission.
• The auditor’s responsibility under generally
accepted auditing standards and Government
Auditing Standards
• Significant accounting policies
• Management’s judgments and
accounting estimates
• Significant audit adjustments; uncorrected
misstatements
• Other information in documents containing
audited financial statements
• Disagreements with management
• Management consultation with other accountants
• Major issues discussed with management
prior to retention
• Difficulties encountered in performing the audit
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The audit will be conducted in four phases, as shown below. These phases are discussed in more detail on
the following pages.
PHASE I
Strategic
Planning
PHASE II
Execution
of the Audit Plan
PHASE III
Evaluation
of Audit Results
PHASE IV
Completion
& Delivery
Obtain an
Understanding of
the City’s Operations
llll
Evaluate Internal
Controls
llll
Develop Audit Plan
and Strategies
llll
Prepare Audit
Programs
llll
Data Processing
Review
Perform Test
of Controls
llll
Perform Tests
of Transactions
llll
Test Compliance
with Laws, Rules,
Regulations,
and Contracts
Documentation
Reviewed
by Partners
llll
Auditor’s
Conclusions
Documented
llll
Preliminary
Discussion with
Management of
Audit Findings
Prepare Auditor’s
Reports
llll
Review the City’s
Financial Statements
llll
Discuss Final Results
with City Management
llll
Exit Conference
llll
Presentation to the
City Commission
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Phase I: Strategic Planning
A thorough understanding of the Cityand its
operating environment is essential for developing an
efficient, cost-effective audit plan. During this phase,
the engagement partner and key supervisory personnel
will meet with the appropriatepersonnel to update an
understanding of operations. You will also have the
opportunity to express your expectations regarding
the services that we will provide. This effort will be
coordinated so that there will be minimal disruption
to your staff. During this phase we will perform the
following activities:
• Review the current regulatory and statutory
compliance requirements within which the entity
operates. This will include a review of applicable
federal and state regulations; ordinances, bond
covenants, contracts, and other agreements;
meeting minutes of the City Commission.
• Review major sources of information such
as budgets, organization charts, procedures
manuals, financial systems and management
information systems.
• Determine the most practical and effective way to
apply computer-aided audit tools to convert and
analyze data and generate reports.
• Review internal control systems, including
determining an audit risk assessment.
• Consider the methods used to process accounting
information that influence the design of the internal
control system. This includes understanding the
design of relevant policies, procedures, and records
and whether they have been placed in operation.
• Design audit programs to ensure that they
incorporate financial statement assertions, specific
audit objectives and appropriateaudit procedures
to achieve the specified objectives.
• Identify and resolve accounting, auditing and
reporting matters.
• Prepare detailed audit plans, including a list of
schedules to be prepared by the Citypersonnel.
Risk-Based Audit Technologies
The Firm employs a risk-based approach early in
the audit process. This approach considers how the
overall risk identified in the general risk analysis affects
specific account balances. We consider,in part:
• Relative significance of the account to
the financial statements as a whole
• Volume of transactions
• Susceptibility of the account to fraud
• Accounts that have traditionally required
significant adjustments
• Account with complex calculations,
judgment, and accounting issues that
have a high assessed level of inherent risk
Based on these considerations, we assess
the inherent risk and control risk to determine the
overall audit risk. Once this assessment is completed,
the audit procedures to be used are determined.
By redirecting our efforts through a risk-based
approach, audits are significantly enhanced, which
provide greater value to our clients.
The Firm will use several approaches to conduct
the audit engagement. These approaches include
traditional audit techniques and strategies, andan
evaluation of the systems utilized by the City.
Specific Fraud Investigative Techniques
Professional Auditing Standards imposes on auditors
the additional responsibility to “plan and perform
the audit to obtain reasonable assurance about
whether the financial statements are free of
material misstatements due to fraud.”
By redirecting our efforts through a risk-based
approach and additional fraud inquiry techniques,
audits are significantly enhanced.
Phase II: Execution of Audit Plan
The audit team will complete a major portion of
transaction testing and audit requirements during this
phase. The procedures performed during this period
will enable us to identify any matters that may impact
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the completion of our audit work or require the attention
of management. Tasks to be performed in Phase II
include, but are not limited to:
• Apply analytical procedures to assist in planning
the nature, timing and extent of auditing procedures
used to obtain evidential matter for specific account
balances or transaction classes. Analytical proce-
dures are utilized in almost every audit area tested.
• Perform substantive account balance and
transaction tests. Statistical samples will be drawn
from major transaction systems, including cash
disbursements, cash receipts, accounts payable,
and payroll. The size of the samples will be
determined after the review of the internal control
system. There are three types of tests that involve audit
sampling (statistical and non-statistical sampling):
Account Balance Tests
Substantive tests of account balances are
performed on year-end balances. Certain
accounts justify a 100 percent examination,
such as confirming a bank balance, which
does not involve sampling at all.
Transaction and Control Tests
Substantive testing and control tests are often
combined to use one sample to achieve more
than one audit objective. We often test the
controls to verify that the transactions were
properly authorized in accordance with the
City’s procedures. Under the Federal and
Florida Single Audits, we are required to test
internal controls over compliance for each
major program.
Compliance Tests
Compliance tests with laws and regulations
are included with the tests of transactions and
controls. Additional samples are sometimes
necessary to test specific laws and regulations.
Sample sizes for compliance testing are
determined based on the number of transactions
and the significance of the requirement.
The audit team will report on a weekly basis to
Management the status of any potential adjustments
so that Management may have adequate time to
investigate, gather information and respond, if
necessary.
Information Technology Audit Techniques
In accordance with Professional Auditing
Standards, we are required to gain an understanding
of the procedures, both automated and manual, by
which transactions are initiated, recorded, processed
and reported, from their occurrence to their inclusion
in the financial statements. During the planning
stage of our audit, we evaluate the effect information
technology (IT) will have in performing our audit
procedures. This evaluation includes obtaining an
understanding (generally through observations and
inquiries of IT personnel) of internal controls and
identifying those controls that are automated.
When key internal controls are automated, we
use our IT specialist to perform a detailed review of
those automated controls. Our IT specialist will then
communicate to the audit engagement team as to
whether such controls are working as prescribed
by management. With this information, the audit
engagement team determines the extent of their
audit procedures.
In client situations where there is significant
accounting data processed electronically, we use
a state-of-the-art software program (IDEA) to extract
and summarize computerized financial data files.
Some of the uses of this program are:
• Retrieving aged receivables information
• Extracting credit balances in accounts
receivable reports
• Extracting pre-determined sample items
from reports for testing
• Merging files for the purposes of extracting
information that meets predetermined criteria
• Sorting information
• Footing reports
• Searching for anomalies
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This program provides an efficient way for us to
extract and test computerized accounting information,
enabling us to audit through the computer, rather than
around the computer.
Phase III: Evaluation of Audit Results
This phase includes a review of all audit
documentation by the partners to ensure that testing
and documentation support the conclusions reached.
This phase also includes preliminary discussions
with management of the audit findings.
Phase IV: Reporting
In this phase of the audit, the engagement
team will complete the tasks related to the closing
of year-end balances and financial reporting. This will
include final testing in areas including compliance,
balance sheet accounts, revenues and expenditures.
Upon receipt of the draft of the MD&A, statical
section, and transmittal letter, we will turn around a
draft of the CAFR with our comments within seven to
ten days. Final reports will be issued by the agreed
upon date. The audit partner and/or audit manager
will be available to attend the City Commission meeting
to present the audit report.
MANAGEMENT LETTER/FINDINGS
The Firm will prepare a management letter for
the City to identify systemic deficiencies observed.
The letter also may offer recommendations for
changes in accounting and other procedures in
order to improve operations.
As each potential management letter point is
identified in the audit process, the engagement team
will document the condition, our recommendation, and
the benefits of the recommended action. All potential
comments will be reviewed with key staff members
before issuance.
The Firm’s policy is to prepare this report as
a vehicle for suggesting improvements to enhance
efficiency, management effectiveness, and the
degree of internal control.
Findings (material weaknesses and significant
deficiencies and material instances of noncompliance)
are required to be reported in writing and will be included
in the schedule of findings and questioned costs.
FRAUD, IRREGULARITIES AND ILLEGAL ACTS
Marcum will provide immediate written report of
all fraud, irregularities and illegal acts of which we
become aware to the Finance Director, CRA Director,
Pension Board Members, City Manager, and City
Commission as appropriate.
Proposal for External Audit Services
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City of South Miami
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SEGMENTATION
The following is a summary of the proposed hours for the audit services.
City of South Miami, Florida Senior
Partners Manager Supervisor Staff Total
Strategic Planning 8 11 35 24 78
Execution of the Audit Plan 11 18 75 90 194
Evaluate Audit Results 9 13 12 8 42
Reporting 7 8 13 8 36
35 50 135 130 350
City of South Miami, Florida
including the Single Audit, Pension Senior
Plan Audit, and the CRA Audits Partners Manager Supervisor Staff Total
Strategic Planning 14 22 70 48 154
Execution of the Audit Plan 20 26 130 160 336
Evaluate Audit Results 16 26 24 16 82
Reporting 20 16 26 16 78
70 90 250 245 655
8. IDENTIFICATION OF ANTICIPATED
POTENTIAL AUDIT PROBLEMS
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Proposal for External Audit Services
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0416025F
City of South Miami
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IDENTIFICATION OF ANTICIPATED
POTENTIAL AUDIT PROBLEMS
Marcum is proud of its recognition as a technical
resource for accounting and auditing standards. We
keep abreast of emerging technical issues with our
clients and communicate accordingly.
The Firm does not anticipate any potential audit
problems. Our service team understands the industry
issues relevant to the City. The combination of our
Firm’s resources, level of partner involvement and
experienced team members provides an excellent
service team of professionals capable of servicing
your needs.
Regular communication will be ongoing with
City personnel, allowing for timely knowledge
of matters as they arise. When we learn of matters
the City may not be aware of, we will be active in
conveying relevant information.
We understand the audit and accounting
requirements affecting your audit. As with other issues
that may arise, we will work with Management
throughout the year to achieve the appropriate
resolution.
9. REQUIRED FORMS
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10. PRICE PROPOSAL
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APPENDIX A
PEER REVIEW REPORT
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APPENDIX B
LICENSES
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APPENDIX C
CERTIFICATES OF
INSURANCE
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