The URL can be used to link to this page

4.5. SR 10-04-2021City of Qk*l River Request for Action To Item Number Mayor and City Council 4.5 Agenda Section Meeting Date Prepared by Consent October 4, 2021 Lori Ziemer, Finance Director Item Description Reviewed by Proposal for Audit Services with BerganKDV Cal Portner, City Administrator Reviewed by Action Requested Approve, by motion, an agreement for audit services with BerganKDV for the years ending 2021-2025. Background/Discussion The city's contract for auditing services ended with the 2020 audit. Staff issued a request for proposal (RFP) for audit services for the fiscal years 2021 through 2025 and received proposals from four firms. All four firms are well qualified and experienced in government auditing and accounting. Finance staff interviewed and evaluated the four firms on a number of criteria including: audit firm/staff experience, similar government engagement experience, approach to audit quality, communication and responsiveness with city staff, value-added services, and proposed fee. While each firm presented quality proposals, staff recommends BerganKDV based on the criteria listed above. BerganKDV audits over 60 municipalities with many similar engagements to Elk River. BerganKDV's references have indicated a high degree of satisfaction and stated staff members are knowledgeable of any changes and help cities implement these changes. In addition, staff is in communication with city staff and responsive to questions or consulting not just during the audit but throughout the year. Over the five-year term, the audit fee proposal from BerganKDV was the lowest all-inclusive bid of $163,635. The bids ranged from $163,635 to $181,145. Additional fees will apply for a Single Audit should the city expend more than $750,000 of Federal fund in any year. Financial Impact The proposal for city audit services by BerganKDV for the years 2021-2025 is as follows: Year Audit Fee 2021 $30,985 2022 $31,825 2023 $32,700 2024 $33,600 2025 $34,525 Total $163,635 The Elk River Vi ion _-i a1,,e1r0rrrh1, rorrrr71r1111t, ra, M retobrfirrrrrj; P 01 w E e E o ® r Mission/Policy/Goal Ethical, efficient, and responsible Attachments ■ BerganKDV audit proposal for the years 2021-2025 N:APublic Bodies\Agenda Packets\10-04-2021\Fugal\x4.5 sr Auditor selection- BerganIi'DV.docx City 11of Elkl- Ver berganKov CITY OF ELK RIVER, MINNESOTA TECHNICAL PROPOSAL FOR AUDIT SERVICES SEPTEMBER 9, 2021 CONTACT: ANDREW GRICE, CPA 3800 American Boulevard West, Suite 1000 952.563.6873 andrew.grice@bergankdv.com EMPOWEPING PEOPLE and CREATING A WOW EXPERIENCE FOP. OUP CLIENTS. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA TABLE OF CONTENTS Profile of Firm Proposing TransmittalLetter ............................................................................................................................... 2 ExecutiveSummary .................................................................. ......................................................... 4 WhoisBerganKDV?................................................................................................................ .......... 5 Value -Added Services Beyond the Audit ............................................................................................ 8 Certifcatonsand!ndependence----------------------------------.y Qualifications: Client References and Experience .................................................................................................... 10 DedicatedService Team ................................................................................................................... 11 Scope ofServices and Proposed Project Schedule: AuditApproach and Timeline ........................................................................................................... 16 FeeInformation ............................................................................................................................................ 2O Additional information: Peer Review Attachment A — Proposer Warranties 1IPAGE 8ERGANKDV' LTD. |BER8ANKDV.COMIDO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA TRANSMITTAL LETTER Lori Ziemer, Finance Director City of Elk River 13065 Orono Parkway Elk River, Minnesota 55330 Dear Ms. Ziemer, On behalf of BerganKDV, I am pleased to submit this proposal for audit services for the City of Elk River, Minnesota. We appreciate the opportunity to bid these services and your consideration of our firm. The attached proposal addresses the information you requested, including the unique qualifications of BerganKDV, the depth and breadth of the services we will provide your City, and our commitment to providing the highest -quality work through a process that is both efficient and effective. Our services would include, but not be limited to, the following for years ending December 31, 2021 through 2025. 1. Performing an audit of the City in accordance with auditing standards generally accepted in the United States of America, Government Auditing Standards, and other federal, state, and local requirements, as applicable. 2. Providing an opinion on the City's basic financial statements and an "in -relation to" report on the supporting schedules. 3. Providing an opinion on the City's schedule of federal expenditures "in -relation to" the basic financial statements. 4. Reviewing the City's financial statements and related note disclosures, supplemental schedules and Comprehensive Annual Financial Report information. 5. Reviewing, documenting, and providing recommendations on improving the City's internal control and financial operations. 6. Providing verbal and written guidance on new and ongoing Governmental Accounting Standards Board (GASB) Statements. 7. Meeting with City finance personnel and administration to review the financial statements and a draft of our letter of recommendations for improving the internal control and financial operations of the City. 8. Presenting the financial statements and communications letter to the City Council. 9. Providing bound copies of the report to the City for the Office of the State Auditor, including a searchable pdf of the report, and the communications letter. 10. Being available during the year to provide a wide range of consulting services and answer your questions as they arise. Our Government Market team is located throughout BerganKDV offices. These individuals work only on our governmental entity clients. We have outlined your upper management team in the "Qualifications" section. In addition to these individuals, we will utilize associate level individuals. Some of our team members will be on -site to perform portions of your audit. We will use a mix of on -site and remote auditing. As further discussed in the Audit Approach section, we utilize Suralink, a workflow management software that improves efficiency by streamlining our audit request process. 2 1 PAGE BERGANKDV, LTD. I BERGANKDV.COM I DO MORE PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA We will work with your representatives to schedule specific fieldwork dates to ensure we are meeting your deadlines. The undersigned is a partner and is authorized to make representations for the firm. This proposal is a firm and irrevocable offer for the six -year period. Sincerely, Andrew Grice, CPA Partner BerganKDV, LTD 952.563.6862 andrew.grice@bergankdv.com 3 1 PAGE BERGANKDV, LTD I BERGANKDV.COM I DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA EXECUTIVE SUMMARY Here are a few benefits of working with BerganKDV: A Responsive Firm Who is there for You. We believe we are your auditors not just at year-end but throughout the year. This means being there for you when issues arise, available when you need us and being responsive to your requests. We demonstrate this through same -day callbacks and in-depth research to get to the heart of your questions. We take a collaborative approach in all our interactions with you. Effective Communication. BerganKDV has set high internal standards for responding and communicating with our clients. Providing support exactly when and where you need it is the value our team brings. Your time is valuable; we will be clear and efficient in our communications, work to eliminate surprises and meet agreed -upon deadlines. We have a proven track record of performing client's requests based on their preferred timetable and delivering reports to our clients in advance of deadlines. A Personalized Approach to the Audit. Our audit process includes an annual planning meeting with you to discuss any challenges and changes in the City over the past year, and to build future strategies. We enjoy learning about your City and will work to understand your City from an overall operational standpoint. We are not afraid to "roll up our sleeves" and delve into the details of your operations. This allows us to personalize our audit approach each year, bring best practices, and be a resource for you when it comes to GASB and other reporting standards. • Jaiu. �ui i Inne and Fees Invested. Receiving value for your fee investment is critical in City government. In addition to offering highly competitive fees, we work diligently to not incur fee surprises. We encourage frequent calls throughout the year, always at no cost to you. Our goal is to be your first call when you experience organizational challenges, and our current clients report that this has helped them save time, reduce costs, and build confidence when solving issues. Government Finance Expertise. Your audit firm needs to understand how municipalities operate and how the environment in which they function is regulated. Your audit firm also needs to understand the intricacies of these entities and how decisions that are made and affect the community. BerganKDV audit professionals are dedicated to your industry beyond the audit; we strive to be your trusted resource in all areas. • Innovative thinking and solutions driven. When working with BerganKDV, clients find that we focus on earning their trust by being actively involved and focused on helping them be successful in all they do. We solve problems. Whether that problem is technology, financial or operations related, we will find a way to help. 4 1 PAGE BERGANKDV, LTD. I BERGANKDV COM DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA WHO IS BERGANKDV? WE'RE GLAD YOU ASKED! We have an extensive background in tvorking with clients through a strategic approach in all aspects; we do not just keep pace with the trends; we stay ahead of the curve. We explore new ways to reduce costs and operate more i ffieiently. THE BACKSTORY The history of our firm began in 1945, and since the beginning, BerganKDV has been firmly rooted in community. Today we are a Top 100 Firm, we operate in multiple states in nine different offices, employ over 450 experts, and service clients across the country. As we continue to grow, we acknowledge that we are not in the business to provide one -size -fits -all solutions. Every client is different — from business problems to personal preferences. We invest the time to understand your needs and customize our services and solutions to meet them. Our playbook consists of business advisory, tax, assurance and accounting, workforce management, technology, wealth management and turnaround management services. Sure, we offer a robust and competitive service portfolio and notable processes but what really makes us different? OUR PEOPLE..... OUR PEOPLE Relationships are at the core of everything we do, and our products and services are designed to meet the specific needs of our clients. When working with BerganKDV, clients find that we focus on earning their trust by being actively involved and focused on helping them be successful in all they do. PERSONALIZED SERVICE Our philosophy is to provide timely, quality services that exceed the expectations of our clients. Outstanding client service requires a successful team effort within our firm and with our clients. Providing outstanding service involves enthusiastic, dependable, and knowledgeable personnel who are responsible for knowing, understanding, and caring about our clients. Our firm believes that outstanding service is a continual process that is refined and enhanced with each client contact. 5 PAGE BERGANKDV, LTD. I BERGANKDV.COM I DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA ENGAGE° I OUR PROVEN VALUE CREATION PROCESS We have aligned our team around our core values and are driven in our commitment to help clients and team members achieve their potential. We help clients reach their goals by utilizing our value creation process. Results of this process have led to more robust client relationships — deeper trust, enhanced communication, and minimization of time for all. This process is a key component of our strategy in supporting and helping our clients further their organizations. LEARN AND GROW. DELIVERING A WOW CLIENT EXPERIENCE Listen to understand. ,,,,,,,,,,,,,,,,,,,,,,,,,,,,. Define what worked / dicint. WE GO BEYOND SO YOU CAN 00 MORE Next steps. F pr STE' ' h that's yiou! F ' WHAT IS IMPORTANT TO THE CLIENT. Be curious and ask helpful questions. LISTEN Ask to understand. Discover priorities and opportunities, ENGAGE IRNFUL :rTLr:,: r.s — — WHAT CAN WE DO rO MAKE WHAT SEE%IS IMPOSSIBLE, POSSIBLE. Set expecations, goals and deliverables. GO BEYONO Utilize BKDV resources and network. Share and communicate. Be accountable. Deliver above expectations. Share and communicate_ DISCOVERY PROCESS ........................................................... PLANNING SESSIONS THE CLIENT EXPERIENCE EXECUTION Your business is your passion. With every season, regardless of where you are in your LISTEN AND REVIEW journey, you deserve committed, customized, authentic support that is true to you and your business. ENGAGE is the 4-step value creation process developed to ensure consistency, ^ ��, u1 �� comfort and delivery of your desired results. K OUR BUSINESS LINES BerganKDV has a strong bench of resources and expertise available based on needs of the client. This ensures the most effective and efficient results are delivered! BUSINESS TECH WEALTH OUTSOURCED TAX II i�.JDiT U- ,4 _A/IS iR I�`�J(� O0V SON vl��= N..,��;I4 f � �ClUI�1TIf�iC 61 PAGE BERGANKDV, LTD IBERGANKDV.COMIDO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA COMMUNITY SUPPORT At BerganKDV, we believe in giving back. We support the organizations our people and clients are actively involved with. BerganKDV's culture promotes community involvement by providing employees with paid vol unteertime off. 0SION AND WADIES We are powered by people who do business the Midwest way delivering comprehensive business, financial and technology solutions. Our firm consists of highly talented individuals that put relationships before business deals and clients before profits. Our values drive our decisions. FOCUS AND OUR PROMISE We continue to align BerganKDV team member core values and sense of purpose with our firm core values and mission. We hire towards our core values and manage performance through real time feedback corresponding to our core values. We have found that this work results in more open conversations at BerganKDV which impacts employee engagement and client care. 7 1 PAGE BERGANKDV, LTD. I BERGANKDV COM I DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA VALUE-ADDED SERVICES BEYOND THE AUDIT Our goal is to be your first call when you experience organizational challenges. We believe this can occur only when a relationship is developed and nurtured through strong communication and a thorough understanding of your mission, programs, and operations. We are unwavering in our commitment to our clients and make it our mission to ask the right questions, listen actively, understand your expectations, and deliver results. You can expect a partnership with professionals who value trust, integrity, and relationships. Fxtensive Governmental Auditing and Consulting Experience With over 50 years of experience serving the government community, we have a great appreciation for the unique issues and complexities that you face. We currently work with over 150 governmental entities, including cities, charter schools, school districts, colleges and universities, and other governmental entities, providing a wide array of services including accounting, auditing, and consulting services. We are dedicated to keeping informed of significant developments in the government community and the impact of those developments on our clients. We accomplish this through formal training, including annual seminars, workshops and professional sponsored classes on governmental accounting, auditing, and reporting requirements. We are a member of the Governmental Audit Quality Center of the American. Institute of Certified Public Accountants. The Center maintains standards for quality control in governmental audits for CPA firms nationwide. In addition, many employees of our firm are members and have participated as instructors and speakers at seminars. These presentations have included GASB implementations, auditing standards updates, levy process and related accounting, property taxes and general fund budget, budget issues related to the state budget deficit, accounting and finance policies and procedures and fraud. Peer Review Our firm is a member of the Private Companies Section of the AICPA Division for CPA Firms. This Division was founded in 1977 by the AICPA to promote CPA excellence and to provide a voluntary, objective means of monitoring adherence to professional standards. Each member firm is required to periodically subject its audit and accounting practice to a comprehensive quality review by specially trained outside CPAs. Our last such review wasjust performed recently, and we received a clean report on our practices and methods. A copy of our last peer review report is included in the Additional Information. Assistance with Certificate of Achievement Our firm is very familiar with the requirements necessary to obtain the Certificate of Achievement. We currently assist several of our clients with preparation of their comprehensive annual financial report to meet the criteria for GFOA's Certificate of Achievement for Excellence in Financial Reporting. We assisted several of these clients with their initial application, and all were successful on their initial and ali subsequent submissions. 8 1 PAGE BERGANKDV, LTD. I BERGANKDV.COM DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA CERTIFICATIONS AND INDEPENDENCE We recognize when we audit a governmental entity, we are required to be familiar with certain rules, regulations, and requirements and, as a firm we are required to meet certain requirements. In that regard, we make the following affirmations: • Our firm meets the independence requirements relating to the City, its agencies and component units as defined by auditing standards generally accepted in the United States of America and Government Auditing Standards issued by the Comptroller General of the United States. • Our firm and all assigned key professional staff are properly licensed to practice in the State of Minnesota. • Our firm is a member of the American Institute of Certified Public Accountants and the Minnesota Society of Certified Public Accountants. • Our firm has never had a report rejected or classified as substandard by any state or federal agency, or by the Government Finance Officers Association. • Our firm has never had and currently does not have any pending disciplinary actions or investigations for alleged improper, fraudulent, disreputable, or unfair activities against our firm with state regulatory bodies or professional organizations. • We accept the professional obligation concerning the American Institute of Certified Public Accountants Interpretation 501-3 "Failure to Follow Standards and/or Procedures or Other Requirements in Governmental Audits." • Our professional'personnel have received adequate continuing education to follow Government Auditing Standards and have received adequate continuing professional education over the past two years. • Our firm is an equal opportunity employer and does not discriminate in employment of persons upon the basis of race, color, creed, national origin, sex, age, or physical handicap, and have an affirmative action plan in place. • We do not expect any potential audit problems and are not aware of any conflicts of interest about any work performed by the firm for the City. • We acknowledge and have adequate personnel to comply with the audit schedule provided in the request for proposals. 9 1 PAGE BERGANKDV, LTD. I BERGANKDV COM I DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA CLIENT REFERENCES AND EXPERIENCE A few of our municipality clients serviced by your team are listed below and we encourage you to contact them. Gina Smith City of New Brighton, Minnesota 651.638.2105 Audit 230 Hours 2005 to Present Anne Norris City of Crystal, Minnesota 507.531.1140 Audit 205 Hours 2004 to Present Adam Flaherty City of Otsego, Minnesota 763.235.3161 Audit 150 Hours 2013 to Present Over the past year, BerganKDV has served as independent auditor or consultant for many Cities and Townships as listed below. Audit clients awarded the GFOA Certificate of Excellence in Financial Reporting are identified with an asterisk. Population (0-2,000) Bock, MN Clear Lake, MN Clearwater, MN Cyrus, MN Eden Valley, MN Freeport, MN Hilltop, MN Maine Prairie Township, MN Millerville, MN Richmond, MN Silver Bay, MN Watkins, MN Waverly, MN Cities and 'Townships Population (2,001-5,000) Ashland, NE Becker, MN Bennington, NE Cascade,lA Deephaven, MN* Elko New Market, MN Greenfield, MN Hanover, MN Haven Township Park Rapids, MN Princeton, MN Princeton Township, MN Rockford Township, MN Rockville, MN Two Harbors, MN Population (5,001-15,000) Baxter, MN Big Lake, MN Cold Spring, MN Corcoran, MN Dayton, MN Falcon Heights, MN* Fergus Falls, MN* Gretna, NE Independence, IA LeSeuer, MN Mendota Heights, MN Oak Grove, MN Osseo, MN Otsego, MN* Sauk Rapids, MN St. Joseph, MN Wyoming, MN Population (15,001<) Albert Lea, MN Brooklyn Park, MN* Cottage Grove, MN* Crystal, MN* Eden Prairie, MN* Faribault, MN* Forest Lake, MN* Hastings, MN* La Vista, NE* Maplewood, MN* Marshall, MN New Brighton, MN* North Liberty, IA Papillion, NE* Richfield, MN* St. Cloud, MN* Sartell, MN Woodbury, MN* 10 1 PAGE BERGANKDV, LTD I BERGANKDV.COM I DO MORE PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA DEDICATED SERVICE TEAM BerganKDV has a personalized team of professionals to meet your Unique needs. Your BerganKDV team has extensive experience working with governmental organizations. This translates into a greater ability to understand your unique organization. LEADERSHIP TEAM First, all governmental clients will interact with a member of the Government Market's leadership team at least annually. There is no charge to our clients for these meetings. These individuals are instrumental in ensuring that our clients are receiving "WOW" service and having all their needs met. JODI L. WOODWARD, CPA, SHAREHOLDER, GOVERNMENT MARKET LEADER Role and Experience: In her role as Government Market Leader; Jodi is responsible for the government market by managing all aspects of the value creation cycle and will work with the governmental team members throughout the firm to ensure a wow experience is being delivered. Jodi is a CPA with more than 25 years of experience in public accounting, focusing mainly on governmental and nonprofit entities; ERISA plans; commercial real estate, including HUD audits; and colleges & universities. Jodi has a bachelor's degree in accounting from Midland University and is active in the American Institute of Certified Public Accountants where she currently serves on the Employee Benefits Plan Audit Quality Center Executive Committee and is very involved in the Peer Review Program. Jodi is a member of the Nebraska Society of CPAs, CREW Omaha Metro and Omaha Academy of Ballet, where she serves on the board. MICHAEL E. DUSCHER, GOVERNMENT CONSULTING LEADER Role and Experience: Mike serves clients in the government sector. He is responsible for growing the client base in the government market by building relationships with potential clients and working with them to help solve pain points they are experiencing in their business operations. Mike received his bachelor's degree in organizational communication and sociology. He is involved with Northern Voices, a nationally recognized school for deaf and hearing of children and Crescent Cover Respite & Hospice Home for Kids. 11 1 PAGE BERGANKDV, LTD. I BERGANKDV COM I DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA DEDICATED SERVICE TEAM (CONTINUED) ENGAGEMENT TE "-" Below are resumes of the team that will be assigned to your engagement. Your engagement team will consist of an Engagement Partner, a Concurring Review Partner, a Quality Control Partner, an Audit Manager and one to two additional staff auditors. A partner or manager will be on -site for most of the audit to ensure that our staff are provided direction and leadership. ANDREW GRICE, CPA, ENGAGEMENT PARTNER Education: Bachelor of Science in accounting from St. Cloud State University, graduated Cum Laude �E Experience, Professional and Civic Activities: • Thirteen years of experience with financial reporting in accordance with GAAP, CAFR requirements, analysis of internal control, performing audits of financial statements and single audits in accordance with OMB Circulars and Uniform Guidance. • Responsible for the planning, fieldwork and reports for numerous audits of cities, school districts, charter schools, and other government entities. • Attends continuing education, workshops and conferences on city and school district accounting and reporting requirements on an annual basis that qualifies as "yellow book" continuing professional education and on governmental and single audit accounting, auditing and reporting • Extensive use of computer and software applications to assist in the preparation and performance of the audit process. • Presents audit reports, financial statements, and communications letters to management, school boards and city councils. • Instructor for the Minnesota Municipal Clerks Institute Fund Accounting and Budgeting course. • Instructor for the Government Finance Officers Association Intermediate Governmental Accounting course. • Develops internal training for BerganKDV government auditors. • Certified Public Accountant, licensed to practice in the State of Minnesota • Minnesota Society of Certified Public Accountants • American Society of Certified Public Accountants • Minnesota Association of School Business Officials • Government Finance Officers Association 12 1 PAGE BERGANKDV, LTD. I BERGANKDV.COM I DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA DEDICATED SERVICE TEAM (CONTINUED) NANCY SCHULZETENBERG, CPA, QUALITY CONTROL PARTNER Educa`k-=,,. Bachelor of Science in Accounting from Mankato State University, graduated Summa Cum Laude Experience, Professional and Civic Activities: • Twenty-five+ years of experience in auditing governmental and nonprofit entities • Member of the Cluality Control Committee for our firm • Appointed by the Commissioner of Education to serve as a member of the Minnesota Department of Education's Advisory Committee on Financial Management, Accounting and Reporting • Member of the Special Review Committee of the Government Finance Officers Association whose purpose is to review Comprehensive Annual Financial Reports to determine eligibility forthe Certificate of Achievement for Excellence in Financial Reporting • Presenter at the Minnesota Association of School Business Officials Annual Conference, the Central Minnesota Educational Research & Development Council's Annual Conference, the MN Government Finance Officer's Association's Annual Conference, and BerganKDV sponsored seminars • Instructor at the Minnesota Association of School Business Officials Institute and the Minnesota Association of School Business Officials Certification Program • Member of Minnesota Society of Certified Public Accountants, American Institute of Certified Public Accountants, Minnesota Association of School Business Officials, and Government Finance Officers Association • Member of the Finance Committee at Holy Family School, Albany and Seven Dolors Church, Albany • Treasurer of the Albany Dance Team Booster Club 13 1 PAGE BERGANKDV, LTD. I BERGANKDV.COM DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA DEDICATED SERVICE TEAM (CONTINUED) AARON DAHL, CPA, AUDIT MANAGER Education: Bachelor of Arts Degree in accounting and finance from Augsburg University, graduated Cum Laude Experience, Professional and Civic Activities: • Five years of experience with financial reporting in accordance with GAAP, CAFR requirements, analysis of internal control, performing audits of financial statements and single audits in accordance with OMB Circulars and Uniform Guidance. • Seven years of experience as pension analyst with the Minnesota Office of State Auditor examining financial reporting of Minnesota public pensions plans • Responsible for the planning, fieldwork and reports for numerous audits of cities, school districts, charter schools, and other government entities. • Manager for numerous fire relief association audits or agreed upon procedures • Provides consultative guidance and assistance with local government accounting process • Attends continuing education, workshops and conferences on city and school district accounting and reporting requirements on an annual basis that qualifies as "yellow book" continuing professional education • Attends workshops on governmental and single audit accounting, auditing and reporting on an annual basis • Financial statement and communication letter preparation • Extensive use of computer and software applications to assist in the preparation and performance of the audit process • Certified Public Accountant, licensed to practice in the State of Minnesota • Minnesota Society of Certified Public Accountants • American Institute of Certified Public Accountants 14 1 PAGE BERGANKDV, LTD. I BERGANKDV COM I DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA DEDICATED SERVICE TEAM (CONTINUED) Office Performing Audit As mentioned earlier in the Letter of Transmittal, our governmental team is located throughout BerganKDV's offices. This team consists of 4 audit partners, 4 audit directors\managers, 1 director of consulting, 3 supervisors, 3 seniors and 3 associates and 3 interns, all that primarily focus on governmental entities. In addition, we have another partner, a director, a manager, two seniors and five associates that all have experience working on governmental audits. Commitment to Staff Continuity and Training To keep continuity and efficiencies high, we believe that consistent team members are advantageous for both our firm and your organization. We pride ourselves on maintaining the right balance of continuity on each of our engagements to ensure a "fresh" look at the annual audit process. Rotation of senior level staff only occurs after the merits of such rotation have been discussed and approved by your organization. Independence Our firm has no conflict of interest regarding any other work performed by our firm for your organization. Our firm meets the independence requirements relating to your organization as defined by auditing standards generally accepted in the United States of America. We annually review independence related to all our client relationships as part of our internal control compliance process. U$ HIERe. 15 1 PAGE BERGANKDV, LTD IBERGANKDV.COMDO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA AUDIT APPROACH AND TIMELINE OUR GOAL FOR YOU IS TO CREATE VALUE AND TO MINIMIZE SURPRISES. We do this through a specific, well planned audit. What makes BerganKDV unique from other firms is that we continually improve our audit process beyond what is expected by our profession. A few of the BerganKDV advantages: • Collaborative Audit Process. We see the audit process as a joint ........•••••.•.•.••••.... • • ° •. i.•' effort with you and BerganKDV. We want to work together to '`~ Beyond Expectations make it as painless as possible. ' BerganKDV takes a four -phased • A comprehensive view of the City's financial health. Through audit approach that gets results our extensive government experiences, we understand a City's by: health is not only about the finances. The vision, mission and • Leveraging what is working programming provide the blueprint for the City's direction. We well. review this information in relation to the financial statements . Focusing on pre audit and provide our observations based on a comprehensive view planning, collaboration, and of the City's health. communication. • Technology resource on internal controls. Technology experts • Staying accountable to a from the BerganKDV Technology Group can assist in evaluating schedule. your technology controls. Their expert advice has proven to be • Meeting with you and your a valuable resource as they answer technical questions and team to ensure every detail offer specific recommendations. has been finalized and the audit is complete. • Supervisors, managers and partners on -site. The involvement of • Exchanging information our supervisors, managers and partners in the field is essential regarding our performance, to being a trusted partner and delivering an exceptional client opportunities to enhance experience. We believe it is important to be on -site and experiences and future available to answer questions. This also allows our managers .'' strategic opportunities. w and partners to review documentation throughout the process. ...............................•'' Meeting communications. Our presentations are designed to capture information that is useful and meaningful. Our presentations are focused on audit results, trends, and other information relevant to your City and related entities, not details of the financial statement amounts. 16 1 PAGE BERGANKDV, LTD. I BERGANKDV.COM 1 DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA AUDIT APPROACH AND TIMELINE (CONTINUED) Our audits are designed to focus our energy and our audit tests on the areas of your operations that contain the most risk. This equates to a better product for the City. PHASE ONE - INITIAL PLANNING AND PROGRAM DEVELOPMENT Our main objective is to get to know the City as a resident or employee would. We want to understand not only your finances, but also your operational goals and objectives. What makes you City unique? How can that knowledge help us perform the best audit possible? When those questions are answered, we know we achieved our goal for Phase One. During this phase, we gather the information we need to create an effective audit program and make preliminary judgments of materiality. Highlights include: • Reviewing your internal control documents and interviewing your key employees and representatives to gain operational information. • Discussing your goals, objectives, and the current challenges facing your operations; those are then shared across your BerganKDV team and incorporated into our audit plan. • Obtaining population sizes ranging from 25-60 for certain transactions -based finance systems and selecting which transactions we will test for internal control and compliance testing. Selections will be based on our data analysis results, analyzing transactions on a risk -based level. • Obtaining your current financial reports and budgets and perform overall analytical review procedures. • Obtaining applicable City organizational charts, policies, bond documents, leases, and other legal contracts. • Reviewing with your staff our audit documentation requests. We audit and request information that is used internally by your staff to manage operations, we do not require specific templates to be used. We will work with the management team to determine the preferred means of communication, whether phone or email. In addition, we utilize Suralink, a workflow management software that improves efficiency by streamlining our audit request process. The simple interface includes team assignments and deadlines, so there are no misunderstandings on expectations. Our audit process incorporates automated audit tools (Knowledge Coach) and work papers to provide our clients with timely information and effective and efficient audits. In addition, we use CCH's TeamMate Analytics, an Excel add -on used to extract and analyze data quickly and efficiently. We also subscribe to various benchmarking and data analysis providers. Hours: Partner — 4, Manager — 7, Supervisory Staff — 15, Staff — 15 Hours in each section include Single Audit. Your Expected Role: Provide BerganKDV with policies, internal control documents and a preliminary trial balance, provide contact information for all board members and staff so we may set up appointments/interviews with selected representatives, begin to gather documentation for fieldwork. 17 1 PAGE BERGANKDV, LTD, I BERGANKDV COM I DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA AUDIT APPROACH AND TIMELINE (CONTINUED) PHASE TWO - AUDIT PROGRAM EXECUTION Project execution is performing the procedures outlined in your audit plan as developed in Phase One. Our audit procedures will include examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. We will discuss potential ideas and best practices with your personnel relating to our recommendations for improving internal control, procedures and compliance with laws and regulations. Any issues identified, proposed audit adjustments, or other recommendations will be discussed with management throughout the execution of our audit procedures. We perform test work with as little disruption as possible to City staffs regular duties. Highlights of this phase include: • Auditing year-end account balances, testing internal control, assessing compliance to determine if your systems and controls are functioning as designed. • Using sampling techniques to test areas including transactions, internal controls and legal compliance using the scope mandated by the Office of the State Auditor. Sample sizes range from 25-60 based on our risk assessment. • Using IDEAS data mining software, we look for trends and anomalies in your payroll, vendor payment, and cash receipts process. Hours: Partner — 8, Manager — 8, Supervisory Staff — 40, Staff — 85 Your Expected Role: Be available to answer questions during scheduled audit fieldwork, provide audit workpopers or reconciliations with documentation that is reasonable and reviewed during Phase One. PHASE THREE - POST -AUDIT CRITIQUE AND EXIT CONFERENCE This phase of the audit includes reviewing all the components of the financial statements and prepare the communications letter and relevant financial trend data for the Board presentation. Finally, opinions on the financial statements, Government Auditing Standards and Single Audit, if required, will be prepared. We will then present this information to management allowing you time to review the financial statement reporting package including the draft financial statements and any internal control findings or recommendations that arise during the audit. This phase allows you time to assess, discuss and develop a corrective action plan, if needed. Hours: Partner —16, Manager— 20, Supervisory Staff —10 Your Expected Role: Review preliminary reports to provide BerganKDV with input and feedback. 18 1 PAGE BERGANKDV, LTD. 1 BERGANKDV.COM I DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA AUDIT APPROACH AND TIMELINE (CONTINUED) PHASE FOUR - PRESENTATION OF AUDIT REPORT The final phase of the process is the presentation of the reports to the City Council. The presentation provides the governing body with information about the year's financial activity compared to past trends and expected results. We also provide other relevant and interesting observations relating to your financial statistics that will help provide the governing board with a deeper understanding of your operations. We understand all organizations have individual needs and we lookforward to getting your feedback on graphs and statistics. Hours: Partner-5 Professional standards require that we provide you with information regarding the auditor's responsibility under generally accepted auditing standards, significant accounting policies, accounting estimates and management judgments, significant audit adjustments, other information in documents containing audited financial statements, disagreements with management, consultation with other auditors, major issues discussed with management prior to retention as auditors and difficulties encountered in performing the audit. We will provide this information in written form via the communications letter and will discuss with administration during the review of the preliminary audit report. Your Expected Role: Provide BerganKDV with information and feedback for presentation preferences. PANDEMIC RESPONSE Our government audit team has completed it's third full season of predominantly remote auditing for our 12/31/2019, 6/30/2020 and 12/31/2020, and is now entering our fourth. In total our firm has completed several hundred audits using this approach. The Suralnk portal described earlier, provided a secure portal as well as a "scorecard' for all stakeholders to tract audit progress. Microsoft Teams videoconferencing and chat features allowed for communications within the team and with our clients in a way that minimized the loss. of personal interactions. While we look forward to a more "normal" future, at BerganKDV we have the proven tools to ensure no disruption to your audit schedule despite the pandemic -related challenges. 19 1 PAGE BERGANKDV, LTD. I BERGANKDV.COM 1 DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA FEE INFORMATION Our fees for the services are based on the amount of time and the level of experience of the individuals who perform the services. In addition, we assume that the City's accounting personnel will provide the appropriate workpapers, documents, schedules, and clerical assistance and will prepare the financial statements, notes and other comprehensive annual financial report sections, and that we will not encounter any significant or unusual circumstances which will affect the scope of our engagement, and no significant changes to the City's operations will occur. However, if situations arise which affect the scope of the engagement, we will discuss them with you prior to incurring the additional cost. At no time will we bill the City for extra time or charges unless we have verbal communication regarding the issues, your options, and an agreement for additional fees. Billing and Collection Expectations Our fees are due as services progress and are generally billed at the completion of each phase of the audit. These invoices are payable on presentation. Invoices are delinquent if not paid within 60 days. Off-seasor. Communication We encourage questions throughout the year and ask our clients to submit to us their monthly financial statements and board of director minutes, so we can stay abreast of their operations, and identify/resolve any issues prior to year-end. We will not invoice additional amounts unless substantial research or work is required, in which case, we will discuss the scope of any additional work and proceed only after we have reached a mutually agreeable fee arrangement. Out of Scope Professional Services We do not surprise bill. If during our engagement you request additional services which require more than a minimum amount of time, we will provide air engagement letter with the fees and services specified, only after we have verbal communication and agreement. Additional special projects and consulting requested during the year will be billed at an hourly rate commensurate with the level of experience required. 20 1 PAGE BERGANKDV, LTD. I BERGANKDV.COM I DO MORE PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA PEER REVIEW LANDMARK CERTIFIED PUBLIC ACCOUNMANTS Report on the Firm's System of Quality Control March 12, 2021 To the Partners of BerganKDV, LLC and the Peer Review Committee of the Minnesota Society of CPAs. We have reviewed the system of quality control for the accounting and auditing practice of BerganKDV, LLC (the firm) in effect for the year ended March 31, 2020. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants (Standards). A summary of the nature, objectives, scope, limitation of, and the procedures performed in a System Review as described in the Standards may be found at www.aicoa.org/prsummary. The summary also includes an explanation of how engagements identified as not performed or reported in conformity with applicable professional standards, if any, are evaluated by a peer reviewer to determine a peer review rating. Firm's Responsibility The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. The firm is also responsible for evaluating actions to promptly remediate engagements deemed as not performed or reported in conformity with professional standards, when appropriate, and for remediating weaknesses in its system of quality control, if any. Peer Reviewer's Responsibility Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance therewith based on our review. Required Selections and Considerations Engagements selected for review included an engagement performed under Government Auditing Standards, including compliance under the Single Audit Act, and audits of employee benefit plans. As a part of our peer review, we considered reviews by regulatory entities as communicated by the firm, if applicable, in determining the nature and extent of our procedures. Fort Smith I Little Rock I Rogers I Russellville I i_andmarkCPAs.com Accounting. Consulting. in=_ights. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA PEER REVIEW [CONTINUED] •its Part mm, of Berpnl---1d, ELC and Ghe Peer of (pmm Pads Tf eo opinfon ti our apiniffn.11e system of WmLy santrml far the EICCOU ryirnl and-mrdifmc practme of Lerptr XIAI, LLC m a?1fi4a Im the y�t+Si PnYlcvl P.iar•{h .qy, })!Y 11.15 .1 n ampiw- WkIl 10 pr.Po 4?7Nk"% firm with rwsar4bA, assurance of podonnm* and reporimg, in conformHy raft applrcah3c pref• lanal 19-driddrugrs in 211, mate;ial :7e-p Ls Ph im sdn rece6v- a 1aLing of pass; ,c+s� -airh d-fidev" rmij or;Ibv Nerpnk-tW,LLC hai; mcphada Wrrr$d nK-ffat1%alrxfa. jc;—"x j41w 7tFi5•�+5?F tittle kurk. Arkansas Appendix A Proposer Guarantees and Warranties 1. The proposer certifies it can and will provide and make available, as a minimum, all services set forth in the proposal. Proposer warrants that it does not have any conflicts of interest with the City of Elk River, its management staff, or its elected officials. Proposer warrants that it is willing and able to obtain an errors and omissions insurance policy providing coverage for the willful or negligent acts, or omissions of any officers, employees or agents thereof. 4. Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the prior written permission of the City of Elk River. 5. Proposer warrants that all information provided by it in connection with this proposal is true and accurate. ,nature of official: Name stye=ed;: Andrew Grice, CPA Title: En;as.ement Partner Firm: Berr-anKDV Date: September 9, 2021 THANK YOU. BERGANKDV.COM 1952.563.68731 INFO@ BERGANDKV.COM [C ® O in City E CITY OF ELK RIDER, MINNESOTA DOLLAR DID PROPOSAL FOR AUDIT SERVICES CONTACT: ANDREW GRICE, CPA 3800 American Boulevard West, Suite 1000 952.563.6873 andrew.grice@bergankdv.com berganOV EMPOI ERING PEOPLE and CREATING A WOW EXPERIENCE FOR OUR CLIENTS. PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA BERGANKDV, LTD Andrew Grice, CPA, Partner is entitled to represent BerganKDV, LTD, and empowered to submit a bid and authorized to sign a contact with the City of Elk River, Minnesota. 1 1 PAGE BERGANKDV, LTD. I BERGANKDV.COM I DO MORE. Appendix B City Of Elk River Schedule Of Professional Fees And Expenses For The Audits Of The December 31, 2021 - 2025 Standard Quotes Hourly Hourly Position Hours Rates Rates Total Partners 33 $ 300 $ 220 $ 7,260 Managers 35 $ 200 $ 160 $ 5,600 Supervisor 65 $ 150 $ 125 $ 8,125 Staff 100 $ 130 $ 100 $ 10,000 specify Subtotal 233 $ 30,985 Single Audit 20 $ 195 $ 188 $ 3,750 (per major federal program) Audit Fee Annual Report Prep 2021 $ 30,985 $ 3,900 $ 2022 $ 31,825 $ 4,000 $ 2023 $ 32,700 $ 4,110 $ 2024 $ 33,600 $ 4,225 $ 2025 $ 34,525 $ 4,325 $ Total Single Audit 34,885 $ 3,750 35,825 $ 3,850 36,810 $ 3,950 37,825 $ 4,050 38,850 $ 4,150 Appendix B Elk River Fire Relief Association Schedule Of Professional Fees And Expenses For The Audits Of The December 31, 2021 - 2025 Standard Quotes Hourly Hourly Position Hours Rates Rates Total Partners 5 $ 300 $ 220 $ 1,100 Managers 8 $ 200 $ 170 $ 1,360 Supervisor 12 $ 150 $ 120 $ 1,440 Staff 16 $ 130 $ 100 $ 1,600 specify Subtotal 41 $ 5,500 Audit Fee Annual Report Prep Reporting Forms Total 2021 $ 5,500 $ 350 $ 250 $ 6,100 2022 $ 5,650 $ 360 $ 260 $ 6,270 2023 $ 5,800 $ 370 $ 270 $ 6,440 2024 $ 5,950 $ 380 $ 280 $ 6,610 2025 $ 6,110 $ 390 $ 290 $ 6,790 PROPOSAL PREPARED ESPECIALLY FOR CITY OF ELK RIVER, MINNESOTA THANK YOU. BERGANKDV.COM 1952.563.6873 1 INFO@BERGANDKV.COM J) @ (�) o o