Loading...
HomeMy WebLinkAbout7.4 Motion to approve the Auditing Service Agreement with Lauterbach & Amen, LLP for a five-year period from 2020 to 2024.Item Cover Page wubject Motion to approve the Auditing Service Agreement with Lauterbach & Amen,, LLP for a period from0 to 2024. Meeting October • 2020 A' MEETING OF PROSPECT SOA. Fiscal true kollar Amount o:1246,100 Over 5 Years Ludget Source General Fund Operating Budgel �,ategory NEW BUSINESS Action Type Information The Village of Mount Prospect rotates its external auditors after each 5 -year period. - auditor ! • the Village financials from1 r 2019. The Village published a Request for Proposal for auditing services in July 2020 and responses were due in August 2020. There were proposals received from GW Associates,, BKD LLP,, Miller Cooper,, and Lauterbach & Amen,, LLP. An Audit Committee meeting was held to select the Village's External Auditor for a 5 -year engagement from 2020 to 2024. The meeting was conducted on September 24, 2020 at 6:30 pm at the new Police Headquarters. Audit Committee Chair Tim McDermott, Trustee William Grossi, Trustee Richard Rogers, and Audit Committee/Finance Commission member Vincent Grochocinski were present a11 the meeting. Director of - Amit Thakkar and Asst. to the Directorof Jenny Fitzgerald were also in attendance from staff. Based ! attached •ww;staff !.recommendedLauterbachfor wi expertise,year audit engagement. Staff recommended Lauterbach & Amen based on their amountof time proposed • be spent ' • ' audit, ! ` w !' ` prior experience with them, and the costs involved for a 5 -year engagement. The Audit Committee met with representatives of Lauterbach & Amen. The Audit Committee had several questions including independence, audit process, current clientele, fees structure, GASB pronouncements, and their experience with various 1 typesof the auditopinions issu`!. Matt Beran and Tim Gavin from. !. Amen gave satisfactory answers to all the questions. The Audit Committee considered staff"s recommendation,, audit fees involved, references provided and a few other factors. After receiving satisfactory responses and considering the listed factors,,Audit • '' voted, and unanimously auditrecommended Lauterbach & Amen for a 5 -year audit engagement. The first year audit engagement cost will be $46,,300 and the total 5 -year costs for the audit will be $246,,100. After the approval from the Board, the Auditors are expected to start their work including preliminaryauditwork in December 2020.1 formal recommendation from the Audit Committee is attached herewith. Alternatives 1. Approve the Auditing i iauditing it Amen, LLP, with a firsti5-year cost of $246,,100. 2. Action i ion of the Village Board. Staff Recommendation Approve the Auditing i iauditing it Amen, LLP, with a firsti5-year cost of $246,100. Auditing Services Proposal - Lauterbach & Amen.pdf Audit Committee Recomendation for Auditing Service.pdf Audit RFP Responses Summary.pdf 2 ....................... ........... .. .. .. . . . . . . . . ......................................... --- .......... . . . ......... -- ..... . . ......... . --- - - ----- ....................... -- . .............................. . . .......................................... = Village of Mount Prospect, Illinois PROPOSAL For the Years Ending: December 31, 2020 and Optional Years December 31, 20219 2022, 2023, 2024 Due Date August 28, 0 CertifiedPublic 668 N. River Road Naperville, Illinois 60563 Phone: 630.39 3.1483 Fax: lauterbachamen-com ................. ii ............ LAUTERBACHAMEN.COM Ronald J. Amen, Partner ramen@lauterbachamen.com Jamie L. Wilkey, Partner j Wilkey@lauterbachamen. com Village of: ount Prospect, Illinois 1 1 0 LAUTERBACHAMEN.COM J 1 I o1 TABLE, ' rrrlJ�r»,,, rl TransmittalLetter 4 Ow Firm. Profile,...***** 0000eoo*00000 o so ******so $0 000009000#4 0,09,00000 0*0 so*** 1 0 I VO1„ 1 lKey :engagement Personnel....................�.........�.....�..11-14 .1 fAudit Approach...... 00000**O000 00 0400004000004 *so so so* *so o so 1S-20 1 Price and Billin..................................... 21-22 References...............+....../......+M...............................0....................... 23-24 Appendix................................r...l...00...+Ir......rr..r........i.ri..i.............. 25m26 i, Village of Mount Prospect, Illinois 1� 1� � 4,,A 5 Lauterbach & Amen LLP 668 N, RIVER ROAD - NAPERVIL.L.E, IIJ INUS 60563 PHONE 6303931483 - FAX 63Cir 91,2516 WWW,,,IaL]terbz)cliariien.corn August 28, 2020 Village of Mount Prospect 50 South Emerson Street Mount Prospect, Illinois 600541 EXPERTISE • Providing professional audit and consulting services to over 250 local governments on an annual basis, and providing compilation and benefit services to over 250 police and firefighters' pension funds. • Possessing exclusive expertise in the area of local government, as evidenced by our exemplary retention rate of the Certificate of Achievement for Excellence in Financial Reporting for clients with continual submissions to the program. L&A is also in the top ten firms nationally that submit audits to the Certificate of Achievement Program. • Striving to continually be a proven leader in the government accounting industry and assisting our clients on the implementation of new, complex pronouncements and issues affecting local government, including one-on-one assistance with the understanding and implementation of these new pronouncements and issues. We will provide thorough and timely answers to any of your questions or needs. • Maintaining a highly professional staff, each of which possess extensive knowledge in the area of local government, continually broadening their knowledge of local government issues through in-house training, involvement in various local government organizations and through continuing professional education W� =� Engaging in audit planning, preliminary work and continual communication with our clients to ensure an efficient and quality audit process. This also ensures that audit issues will be identified early and solutions will be implemented timely. Village of Mount Prospect, Illinois 1 3 0 1, SERVICE AND QUALITY Allowing our clients to dictate scheduling needs related to the audit process and adhering to those need We continually meet or exceed the deadlines established by our clients. Identifying, communicating and assisting in the implementation of identified opportunities for improvei and more efficient financial or procedural operations. Maintaining a program of continuity for multi-year engagements, including minimal rotation of the team Yllowing for the establishment of efficient working relationships with the Village. Continually promoting communication with management from the beginning of our engagement anq throughout the year. This includes an entrance conference and planning meetings with the Village, weekli meetings with management to review the progress of the engagement, if requested, an exit conference t( discuss our findings and report production issues, meetings with elected officials during the evenings t( answer questions regarding the audit and any other related issues, and continual communication throughou the year. We are committed to listening to your needs and customizing the audit process to meet thos needs. Customizing our audit approach to focus on those areas that represent significant risk to the Village an any of the Village's uniquely complex issues. CLIENT TRAINING OPPORTUNITIES 0 0 • Conducting annual training sessions with our clients in a small group setting covering such topics as: new GASB pronouncements, understanding the financial statements, identification of finance department efficiencies and best practices. • Forming professional resource alliances with other businesses in the areas of human resources, tax and informItion technology so, if required and if permitted by current audit independence standards, we would be able to provide the Village the highest level of service. We currently provide services to the Village's Police and Firefighters' Pension funds and would be excited I bout the opportunity to work with the Village and are committed to providing the Village with quality service and commit to perform the work within the established time period. We believe we have talented people and the appropriate experience to provide you with a quality audit at a fair and competitive price. The Partners that are signing this proposal. are entitled to represent the Firm, empowered to submit the proposal and authorized to sign a contract with the Village. Thi's proposal is a firm and irrevocable offer for 60 days. if you have any questions about this proposal or need to discuss these matters further, please contact us. We look forward to your reply. Ro"a P, 0'4 Ronald J. Amenj P,--,,er Respectfully Submitted, f4ou;a Z, ?pea# Jamie L. Wilkey Partner M LAUTERBACI"MEMCOM FIRM4,',PROFILE Lauterbach & Amen, LLP (L&A) is based in Naperville, Illinois. Founded in 1997 by Sherry Lauterbach and Ron Amen, the firm provides clients with accurate, timely and personalized services that combine large-firm capabilities with small-firm values. Through the years, our services have evolved to meet the growing demands of our clients in the governmental, nonprofit and private sectors. L&A clients can expect unparalleled service from an experienced team of knowledgeable professionals who double as valuable management resources. SERVICES Actuarial Audit Financial Pension Tax 5 Partners J 45+ Managers 115+ Staff Village of Mount Prospect, Illinois 1 5 LAUTERBACHAMEN.COM ........ . . . .... FIRM 'PR 1OFILE A close working relationship with management on a year-round basis is the best way to provide our clients with the benefit of our depth of knowledge. This approach also allows for the timely resolution of questions and problems as they arise rather than after the fact. Through understanding the client's activities and a close working relationship with management, L&A can best respond to and help initiate programs that lead to 0 improved overations and efficiencies. An Audit a Peopleented Endeavor The team at L&A recognizes that we are involved in a people -oriented endeavor. Our goals and objectives, therefore, are centered around this understanding. We strive: • To create an environment that encourages a high level of communication between the client and our team • To provide clients with the highest attainable level of staff capabilities through selective recruiting and creation of a work environment that aids personal growth • To continually improve the quality of our services • To support our financial, business, professional and social communities Firm Philosophy We have a full-time commitment to accounting and financial reporting, with extensive expertise in the government and nonprofit sectors. Through our experience, we are able to help clients anticipate and prepare for changes in their operating environment. The value of our services lies not only in the performance of an efficient audit, but in our detailed review of finance practices, and our extensive knowledge of key topics affecting local governments. With our extensive experience in the field of local governmental accounting and auditing, we have served a substantial number of municipalities, park districts, libraries, special districts, school districts, pension funds, joint ventures, and various other governmental organizations. We have included a partial list of such entities as references, and would encourage you to contact any or all of them for references as to our qualifications and level of service. We have also provided our current client listing as evidence of our expertise in and commitment to governmental accounting and auditing. J 9 F, A IS 7 1. tun lam Helping to share our knowledge and expertise in the governmental industry is one of the greatest values we can bring to our clients. We are committed to continually reviewing our process to ensure an efficient audit, ensuring value add approach to an audit 0 • includes extensive no -cost client training throughout the year." exemplary communication with our clients, and providing education on issues affecting local governments on a year-round basis. This no additional cost education includes annual group training sessions with our clients covering such topics as the implementation of GASB pronouncements., changes to auditing standards, understanding of the financial statements, identification of department efficiencies and best practices, and other statutory or hot topics affecting governments. A Strong Commitment to the Industry *Fur involvement in the local government field includes active membership, support and participation in numerous professional organizations which serve the financial and management teams of local government, including: • Government Finance Officers Association (GFOA) • Illinois Government Finance Officers Association (IGFO►A) • Illinois CPA Society Committees on Governmental Accounting • AICPA Government Audit Quality Center • AICPA Nonprofit Center • American Institute of Certified Public Accountants • Illinois Municipal Treasurers Association (IMTA) • Illinois Association of Park Districts/ Illinois Parks and Recreation Association (IAPD/IP ) • Illinois Association of School Business Officials (IASBO) • Special Review Committee - Certificate of Achievement for Excellence in Financial Reporting (CAFR) - GF OA GFOA • Illinois Library Association • Township Officials of Illinois • Technical Account and Review Committee (T'ARC) - IGFOA (Responds to GASB Pronouncement Exposure Drafts) * Illinois Public Pension Fund Association (IPPFA) * Illinois Department of Insurance—Task Force In addition, we have written articles for publication, instructed training courses and done public presentations for a number of the organizations listed above. "Involvement in our industry's organizations and providing educational support to those groups is a passion of our leadership team." Village of Mount Prospect, Illinois 1 7 im LAUTERBACHAMEN.COM FIRM PROFILE Government Expertise = Extensive Services Available It has been our experience that questions or problems may arise during the year for which a client might call upon us for assistance. The following is a partial list of the services we can provide to our clients: 0 Financial reporting -assistance in the implementation of authoritative pronouncement requirements & Assistance in obtaining or securing the Certificate of Achievement for Excellence in Financial Reporting (CAFE) from the Government Finance Officers Association (GFOA) , funds-analysisforecasting Utility or enterprise rate structure, and consulting services • Federal, state and local grant reporting requirements • Budget -assistance in obtaining the Distinguished Budget Award from the GFOA, appropriation and tax levy documents 0 Personnel Issues -evaluation and executive search 0 Policies and procedures documentation and implementation 0 Temporary staffing and training 0 Pension fund related issues, including benefit calculations ' funding analysis, etc. 0 etc. Human resources -taxability issues, fringe benefits, policies, • Outsourced finance and accounting department functions, including all levels of finance functions • Taxpayer compliance -specialized audits for selected revenue sources Communication is the Key We consider it essential to maintain the lines of communication throughout the year. To attain this, we both formally (via meetings, letters, etc.) and informally (via telephone calls, emails, etc.) keep our clients advised of changes and recent developments related to governments. L116TOMMI"11 "M M11 L&A has not had any federal or state desk reviews of its audits during the last three years. No disciplinary action has been taken against the firm during the last three years by state regulatory bodies or professional associations. We are committed to proving the highest quality audit product to our clients during all phases of the audit. Our Quality Assurance Team is responsible for reviewing all financial statements before issuance, assisting in technical inquiries and reviewing workpapers and reports of all engagements to verify compliance with professional standards and our Firm's policies. At L&A we pride ourselves in providing a quality audit. As such, we are a member of the Private Companies Practice Section (PCPS) of the Division for CPA Firms of the AIPCA, submitting our accounting and auditing practice to quality control reviews of our compliance with professional standards as established by the AICPA. Village of Mount Prospect, Illinois 1 8 LAUTERBACHAMEN.COM FIRM'PROFILE The firm undergoes an independent peer review of our accounting and auditing practice as a condition of membership in the American Institute of Certified Public Accountants (AICPA), the national organization of CPA's in public practice, industry, government and education. Our reports have been reviewed by numerous federal and state oversight agencies as well as other external professional agencies and organizations. Furthermore, there has never been any action taken against our Firm with any state or federal regulatory body or professional organization to which we have submitted our reports. Independence We require that all personnel inform the Firm of any lack of independence with respect to all clients. Specific guidelines to be followed are those set forth in the AICPA's Code of Professional Ethics. Additionally, we are in compliance with the standards established by the General Accounting Office (GAO). More specifically, we are completely independent with respect to the Village of Mount Prospect. Lauterbach and Amen is currently engaged to provide services to the police and fire pension funds. Although we have cleared this practice with AICPA in terms of our obligation to remain independent, we are respectful of our clients' wishes to structure our audit engagements to eliminate any possibility of an independence conflict, even in appearance. With. that in mind, we are providing the option to allow the police and fire pension funds to separately contract their audits with other auditors and provide a corresponding adjustment to our proposed fee. L&A was ranked as the 17th largest -1ccountlng firm in the Chleagoland ared according to an annual survey publishe., by Crain's Chi*cagoBusiness. I Village of Mount Prospect, Illinois 1 9 12 LAUTERBACHAMEN.COM FIRM PROFILE Liceinfie to Practice The Firm and all key personnel are duly licensed to practice in the State of Illinois. Our State of Illinois license number is 066-003655. M19MA Lauterbach and Amen is an independent member of DFK International, a worldwide association of independent accounting and management consulting firms, with locations in over 40 major markets throughout the "United States and representation in over 85 countries worldwide. Our membership in DFK enhances our worldwide reach, provides us with additional resources, and expands the world of opportunity for our clients. We are thrilled to have the opportunity to potentially work with the Village. We truly believe we have a passion for the government industry and a passion for providing a level of service well beyond just issuing you audited financial statements. Our approach to client service includes open year-round communication, a large network of resources to assist with even non -audit related questions, and a dedication to furthering education on our industry technical standards and best practices. At L&A you will be served by partners who are dedicated to the government industry and a group of over 160 L&A employees that share in that passion and spend all twelve months of the year working on government engagements. Village of Mount Prospect, Illinois I 10 13 KEY ENGAGEMENT PERSONNEL LAUTERBACHAMEN.COM M Ronald J. Amen, CPA Managing Partner Mr. Amen has over 31 years of experience serving clients in the governmental sector. He has participated in numerous governmental engagements, including municipalities, park districts, school districts, State and Federal government entities, universities, nonprofits and other 9-MEMUM * University of Nebraska 0 Certified Public Accountant 0 American Institute of Certified Public Accountants 0 Member of Government Finance Officers Association (( FOA) and Illinois GFOA 0 Member of AICPA Government Audit Quality Center 0 Member of Illinois Municipal Treasurers Association (IMTA) 0 Member of Illinois Association of Park Districts/Illinois Parks and Recreation Association (IAPD/IPR.A) • GFOA Special Review Committee for the Certificate of Achievement for Excellence in Financial Reporting • Instructor for IGFOA Training Courses • Instructor for IMT A Training Courses Governmental Accounting and Auditing Experience Mr. Amen has managed numerous governmental engagements during his experience in public accounting. Assignments ranging from audits, single audits, TIF audits, performance reviews, budgeting, strategic planning, and other projects is a brief history of his background. Due to his extensive government background, Mr. Amen is often used as a resource for providing creative solutions to issues affecting local governments. Mr. Amen functions as a working partner, in that he is available and present during each phase of the audit process. Mr. Amen has also participated in the management of some large commercial and nonprofit engagements. This experience includes audits, tax preparation, consulting and strategic planning for both commercial and nonprofit clients. 668 N'. River Road Naperville, Illinois 60563 630.393.1483 ramenCmIauterbachamen.com Village of Mount Prospect, Illinois I 11 14 KFY ENGAGEMENT PERSONNEL Jamie L. Wilkey Technical Partner Ms. Wilkey has over 19 years of professional accounting experience exclusively in the governmental sector. She has participated in numerous governmental engagements, including municipalities, park districts, school districts, libraries,, special districts and various other units of government. 0 Truman State University 0 Northern Illinois University a Member of Illinois Government Finance Officers Association (IGFOA) 0 Member of Technical Accounting Review Committee (IARC) with IGFOA 0 Member of Illinois Municipal Treasurers Association (IMTA) 0 Member of Illinois Association of Park Districts/Illinois Parks and Recreation Association (IAPD/IPRA) 0 GFOA Special Review Committee for the Certificate of Achievement for Excellence in Financial Reporting 0 Instructor for IGFOA Training Courses 0 Instructor for IMTA Training Courses 0 Instructor for IPPFA Training Courses Ms. Wilkey's experience in the governmental sector includes management of numerous units of government. Such assignments include annual audits, single audits, TIF audits, grant specific audits, and other related projects. Ms. Wilkey has been responsible for the management of numerous annual audits for government units, all of which has either received the Certificate of Achievement for Excellence in Financial Reporting (CAFR) Award from the GFOA in the first year of their submittal to the program or maintained their CAFR standing. Ms. Wilkey also has extensive government consulting experience, which includes the responsibility for all financial operations of the government unit, including, but not limited to,, the maintaining of the general ledger, trial balance, balance sheet and consolidated financials. Ms. Wilkey has also assisted numerous clients with payroll processing, budget preparation, supervision of accounts receivable, accounts payable and utilities billing processing, tax levies and related documents, and the recommendation and implementation of various finance/accounting department procedures and policies. LAUTERBACHAMEN.COM Naperville, Illinois 60563 630.393.1483 ext. 227 Jwl ilkey(qfl au terbacha men. com 15 668 N. River Road • Truman State University Naperville, Illinois 60563 Certified Public Accountant 630.393.1483 American Institute of Certified Public Accountants mberan(q_,)1auterbachamen.com • Member of Illinois Government Finance Officers Association (IGFOA) • Member of Illinois Municipal Treasurers Association (IMTA) • Member of Illinois Association of School Board Officials (IASBO) Instructor for ITA Training Courses • Instructor for 1ASBO Training Courses Governmental Accounting and Auditing Experience Mr. Beran's experience in the government sector includes managing numerous governmental engagements. Assignments ranging from audits, single audits, TIF audits, performance reviews, budgeting, strategic planning, and other projects is a brief history of his background. Mr. Beran has been responsible for the training of staff at Lauterbach and Amen. The training includes audit methodology and the specifics of governmental accounting, such as property taxes, debt, and full accrual versus modified accrual accounting. He researches new GASB pronouncements and gains an understanding of the change and how it will affect clients, audit staff, and the audit process. Then Mr. Beran passes along this knowledge to clients to ensure they understand what is changing. Mr. Beran has also been responsible for various agreed-upon procedures including forensic audits. He has been able to observe various municipalities, park districts and libraries and prepare an extensive report on their current internal controls and procedures. Mr. Beran will also then give various suggestions on how to improve internal controls and procedures to improve efficiency and accuracy while still having proper segregation of duties. Village of Mount Prospect, Illinois 1 13 im LAUTERBACHAMEN.COM KE Y ENGAGEMENT PERSONNEL Audit Team Key Personnel �1 Monika Adam ski Monika has I I years of professional accounting experience exclusively in the governmental sector. She is a graduate of DePaul University. Monika is specialized in municipal and state agency audits as well as school districts and nonprofit entities and also specializes in internal. control assessment for all governmental clients: Tim has 14 years of professional accounting experience exclusively in the governmental sector. He is a graduate of Northern Illinois University and is a Certified Public Accountant. Tim is specialized in audits, accounting services and financial reporting. He retains highly specialized skills in. accounting and auditing software. Lia Lopez Lia has 13 years of professional accounting experience exclusively in the governmental sector. She is a graduate of the University of Illinois at Chicago. Lia specializes in Library, Pension and Fire Protection District audits. She excels in internal controls implementation, financial statement preparation and staff training. ,Jennifer Martinson Jen has 8 years of professional accounting experience exclusively in the governmental sector. She is a graduate of the University of Miami and a Certified Public Accountant. Jen specializes in municipal audits, staff training and new hire training. The training includes audit methodology and the speccs of governmental accounting, such as property taxes, debt, and full accrual adjustments. Brad has 6 years of professional accounting experience exclusively in the governmental sector. He is a graduate of University of Saint Francis and a Certified Public Accountant. Brad specializes in staff development and the training and auditing of local governments and park districts. Don has I I years of professional accounting experience, 8 of those years are exclusively in the governmental sector. He is a graduate of Northern Illinois University and is a Certified Public Accountant. Don specializes in municipalities, school districts and Uniform Grant Guidance single audit testing, reporting and submission. Erin has 9 years of professional accounting experience exclusively in the governmental sector. She is a graduate of Missouri State University. Erin specializes in municipal audits and internal controls for all government clients. She has completed various agreed upon procedures for clients and prepared reports on their internal controls. Ann Van Vooren Ann has 11 years of professional accounting experience exclusively in the governmental sector. She is a graduate of Marquette University and is a Certified Public Accountant. Ann specializes in finalizing Comprehensive Annual Financial Reports for our clients - meeting the requirements established by the GFOA. Ann has completed the MCPA's Nonprofit Level I and Level 11 Certificate Program. She specializes in auditing and performing consulting services for municipalities and nonprofits. Village of Mount Prospect, Illinois 14 17 ��,v�.ITAPPROACH LAUTERBACHAMEN.COM Overview We are prepared to meet or exceed all requirements and expectations of the Village. The partners of L&A will be involved in all phases of the audit of the Village as outlined below. L&A does not use statistical sampling in any phase of the audit process. Sample sizes used for testing are in accordance with standards established by the profession and will be determined in the planning phase. Throughout the audit process we will inform management of audit issues as they arise and maintain the highest level of professionalism in the identification and communication of these issues. Discussion of the issues will take place immediately following their discovery and will allow management ample time to rectify any issues. f Phase I Planning January 12 Hours Preliminary Phase 2 February 3 0 Hours Fieldwork Iti Phase 3 Fieldwork I April Y 339 Hours Village of Mount Prospect, Illinois im LAUTERBACHAMEN.COM fNII !f UD' T A PPROACH" GF A. Certificate of Achievement Audit Scope and Standards LSA will issue an opinion on the governmental activities, business -type activities, each major fund and the aggregate remaining fund information, including the notes to the financial statements, which collectively comprise the Village's financial statements, with "in -relation -to"' coverage provided on the combining and individual fund financial statements and on any supplementary information. We will not provide an opinion on the Management Discussion and Analysis, but will provide customary review of this information. Introductory and Statistical sections of the Comprehensive Annual Financial Report, if applicable, will not be audited by US. The audit will be conducted in accordance with generally accepted auditing standards, and, if a single audit becomes necessary, the standards for financial audits contained in Governmental Auditing Standards (2004), issued by the Comptroller General of the United States, and the Single Audit Act of 1996; and the provisions of Uniform Grant Guidance 2CFR-2000/OMB Circular A-133,, Audits of State and Local Governments and Nonprofit Organizations. Village of Mount Prospect, Illinois 1 16 19 IT_ ," LAUTERBACIUMEN.COM Ask Phase 1: Planning -eJanuary AL, A, The purpose of the planning phase is to provide the foundation for the direction that the audit will take. During the planning phase of the audit we will hold an entrance conference with the Village to discuss the audit approach, develop a schedule for completing the audit, and review the areas that we will be focusing on during our audit procedures and testing. The following is an outline of the key steps performed during the planning phase of the audit, • Discussing and agreeing upon report formats to provide information which complies with generally accepted accounting principles. The format should be agreed upon during the planning phase of the audit to ensure timely issuance of the report. Our plan is to adopt a format similar to the previous year. • Discussing availability of accounting records and source documents and developing a detailed list of schedules to be prepared by the Village. • Developing a schedule for completing the subsequent phase of the audit. Phase 2: Preliminary qw� Fieldwork February Preliminary fieldwork is the next phase of the audit process and involves expanding our understanding of the Village and its finances through a review of various documents and through discussions with the Village. During this phase, we will begin the required study and evaluation of internal accounting controls as part of the financial and compliance audit. The purpose of our study and evaluation will be to obtain sufficient knowledge and understanding of the internal accounting and administrative control systems used by the Village for reliance on the system of internal control and the degree of such reliance; or to aid us in designing substantive tests in the absence of such reliance. We will hold progress meetings with key management, as necessary, to keep you apprised of the results of our preliminary review and to discuss the key internal controls to be tested. Village of Mount Prospect, Illinois 1 17 NE AUDITAPPROACH Phase 2.* Preliminary Jrl� Fieldwork (Cont'd) oTNI LAUTERBACHAMEN.COM Our approach to the study and evaluation of the internal accounting and administrative controls will be accomplished through the following techniques: We will perform an in-depth review of internal control documentation and working papers made available by the prior audit firm and the Village. • We will use internal control questionnaires, narratives and/or flowcharting techniques to document key flows of information. Because of our extensive commitment to government, the questionnaires utilized are designed specifically for use on governmental engagements and, therefore, will provide you with the most meaningful information. We will utilize this information and identify key internal control procedures which will be tested in order to warrant reliance on the identified controls. The objectives of such reliance will be to reduce the extent of substantive work performed, resulting in a more cost-efficient audit approach. We will evaluate audit risk for all key financial statement assertions and compliance determinations using the procedures outlined above. Audit risk is the risk that material financial statement misstatements or material noncompliance will not be prevented or will not be detected and corrected in a timely manner. We will evaluate audit risk for all key financial statement assertions and compliance determinations using the procedures outlined above. Audit risk is the risk that material financial statement misstatements or material noncompliance will not be prevented or will not be detected and corrected in a timely manner. Phase 3: Fieldwork April This phase of the audit will consist primarily of substantive testing of year-end balances. If any audit issues come to our attention during the course of our work, we will immediately inform you so that action can be taken before the completion of our fieldwork. We will design our detailed testing procedures to provide both compliance and financial audit coverage where applicable. We utilize custom designed audit programs that are specifically designed for government clients and; therefore, provide for the most efficient and effective approach. 21 LAUTERBACHAMEN.COM AUDIT Ap"'PROACH, Phase 3: Fieldwork April (Cont'd) At a minimum, management is to provide supporting schedules for the following areas once we return for fieldwork: 0 C a to nouns Payable Payro�ll Debt Servi�ce rants anagement For financial audit purposes, we will assess the risk of material misstatement associated with a given objective, and perform substantive and compliance procedures. Our substantive procedures will gather evidence as to the completeness, accuracy, or validity of the information contained in the financial statements. These procedures will include confirmation of year-end balances, vouching documents and analytic reviews. Through our compliance procedures, we will gather evidence related to the existence and effectiveness of specific internal controls. These procedures includes examinations of documents for proper approval and review of procedures for compliance with rules, regulations and Village policies. At the conclusion of fieldwork, workpapers will be reviewed by the engagement partner and we will prepare the Comprehensive Annual Financial Report in accordance with generally accepted accounting principles for government entities. In addition, we will prepare a management letter and other required communication letters that we will review and discuss with the Village during the draft phase of the audit. Our firm has state of the art production hardware and software. We believe the investment to stay on the cutting edge of technology benefits not only in reporting, but also in suggestions and recommendations. Village of Mount Prospect, Illinois 1 19 22 Phase 4: Drafts III VIWMA 11,1111 YMW, LAUTEREACHAMEN.COM Late April The final completion and quality review of the initial draft of the Comprehensive Annual Financial Report will be completed at our office and a draft of the Comprehensive Annual Financial Report and related communication letters will be provided to the Village no later than the date agreed to during the entrance LL conference. The Village will then have a sufficient amount of time to review the draft for question's and/or changes. L will then return to the Village's location for the final draft where we will review the Village's questions and/or changes to the Comprehensive Annual Financial Report as well as the client communication letters and submit a final draft of the Comprehensive Annual Financial Report to the Village. 'Phase 5: Audit 1 Completion May91 Upon approval of the drafts by the Village, we will deliver final, bound financial Comprehensive Annu Financial Reports. At the completion of our audit, we will also provide a the final management lette addressing 111 onditions, if any, and other comments and observations for imp - rovements. Th I management letter will be provided as a separate document. The management letter will contain, as warrante and appropriate: Specific recommendations for improvement of the accounting practice and procedures and the internal accounting and administrative controls. Comments on the design, controls and audit trails of new and redesigned automated systems, along with suggestions to improve processing methods and procedures. Suggestions for operational improvements or cost efficiencies noted during the course of our work. • Findings relative to compliance with the applicable rules and regulations. • Comments regarding compliance with laws. • Other comments or recommendations and best practices that we believe may be relevant. • Upcoming GASB Pronouncements or aung standards that may affect the Village's financial statements in the future. L&A strives for continual communication with Village staff and management as well as the Board. As suc the engagement partner will be available for meetings and/or formal presentations of the Comprehensiv V Annual Financial Report and communication letters with representatives of the Village. I Village of Mount Prospect, Illinois 1 20 23 PRICE AND BILLINGi, Attachment 1 Village of Mount Prospect Request for Proposal Auditing Services Due: August 28, 2020 Fee Structure LAUTERBACHAMEN.COM Copies Description Needed 2020 2021 2022 2023 2024, Opinion on CAFR -Village 20 30,000 X900 31s800 32,800 33,800 Annual Financial Report - Library 20 57000, 51200. 5,400 5,600 5,800 Statement on Auduiting Standards No,,61 Letter 10 Preparation of the Management Letter 10 Tax Increment Financing Opinion 5 300 310.1 320,11, 3310 Single Audit Report (If Necessary) 5 31500 31600 30700 31800 .................. 37900 CYEFR (DATA) Report 5 1 Police Pension Fund - Audit & Report 10 3,500 300 V00„ 37800 31900 Fire Pension Fund - Audit & Report 10 31500 3') 0003,700 37800 37900 Preparation of Comprehensive Annual Fin. Report 20 Preparation of Comptrollers Annual Financial Report 5500 520 540, 56011, 580 Signature of the Authorized Representative Name of the Authorized Representative Title: Managing Partner Firm Name: Lauterbach & Amen, LLP Date: August 28, 2020 Village of Mount Prospect, Illinois 1 21 24 PRICE AND BILLING LAUTERBACHAMEN.COM M In 23 years of providing auditing services, Lauterbach & Amen, LLP has never increased an audit price fro s. what was proposed in the RFP. This includes implementation of all future FASB and GASB pronouncement I Our firm stresses that we are available throughout the year to provide technical accounting and financial reporting assistance to the Village. We encourage clients to contact us with questions that may arise. In addition, we provide no cost client training to introduce new GASB pronouncements and auditing standards that may affect the Village, as well as providing other training topics based on client requests and needs. The proposed annual prices are based upon staff support at all levels from the Village personnel and that the Village will provide adjusted trial balances and support (detailed schedules that reconcile to the trial balance) for all balance sheet accounts. At a minimum, management is to provide supporting schedules for the areas outlined in the Fieldwork Phase of the Audit Approach section of this proposal. Iffl, fl, Should it become necessary for the Village to request us to render additional services to either, supplement the services requested in the RFP or to perform additional work as a result of the specific recommendations included in any report issued on this engagement or new accounting standards, then such additional work will be performed only after discussing with management the level of effort and estimated costs prior to performing any such work. As independence standards have recently become more stringent related to the types of additional services auditors canperform, L&A would review these independence standards and the types of services requested prior to proposing on any additional services. Village of Mount Prospect, Illinois 22 25 REFERENCES LAUTERBACHAMEN.COM We know that our best endorsement comes from satisfied clients. We invite you to contact the following clients who have been serviced by our firm to inquire about their experience and how our services continue to bring value to our clients. Additional references can be provided upon request. Christine Tromp Melissa Gallagher 847.3 5 7.4050 847.870.9041 ctrompgelkgrove.org gal lagherm gcityrm.org 901 Wellington Avenue 3600 Kirchoff Road Elk Grove Village, IL 60007 Rolling Meadows, IL 60008 Jeff Rowitz Jamie Cunningham 847.272.5050 630.620.5916 jeff.rowitz@northbrook.il.us cunninghamj@villageoflombard.org 1225 Cedar Lane 255 E Wilson Avenue Northbrook, IL 60062 Lombard, IL 60148 * Indicates governments who currently hold the GFOA Certificate of Achievement. Village of Mount Prospect, Illinois 1 23 W R", Fl�'FE]UiNCES LAUTERBACHAMEN.COM Additional Clients Served L&A stands by our quality and service. As such, we encourage you to reach out to any of the clients listed below that we serve to learn more about their experience with our firm. Addison Township Cuba Township Hinckley Monee Riverside* Vernon Hills Algonquin Dolton Homewood Montgomery* Rock Island* Volo Antioch* East Dundee* Inverness Morton Grove* R-ockford* Warrenville* Barrington Hills East Hazel Crest Itasca Mount Prospect Rolling Meadows* Wauconda Barrington* Elburn Johnsburg* Naperville Township Rosemont Waukegan Bartlett* Elk Grove Village* Justice Naperville* Round Lake Beach West Chicago* Beach Park* Elwood* Kenilworth New Milford Sandwich Western Springs Berkeley Evanston Kildeer* Town of'Normal* Schaumburg Wheaton* Bloomingdale* Fox River Grove Lake Barrington North Aurora* Shabbona Willow Springs Bradley Frankfort* Lake Bluff North Riverside* Silvis Wilmette* Brookfield* Georgetown Lake Villa Northbrook* Sleepy I-Jol low Winfield Township BufUo Grove* Gilberts* Libertyville* Northfield* South Barrington Wm-n-etka* Burlington Glen Ellyn* Lincolnwood* Northfield Township South Elgin* Woodridge* Burnham. Glencoe* Lindenhurst Palos Park* Stone Park Yorkville* Campton Hills Glenview* Lombard* Park Forest* Streamwood* York Township Carpentersville* Golf Manhattan* Park Ridge Streator Zion. Township I Cary Grayslake Maple Park Pingree Grove* Sugar Grove* Cherry Valley Gurnee* Markham Plano Sugar Grove Cortland Hampshire Mendota Poplar Grove Sycamore* Country Club Hills Harvard Midlothian Princeton Thornton* Crystal Lake Henry County Milton Township Prospect Heights Timberlane Indicates governments who currently hold the GFOA Certificate of Achievement. 0 non ALL jr:7 0 Municipalities Park Districts School Districts Libraries Pension Funds Other Entities AM 4% L�ffl Village of Mount Prospect, Illinois 24 27 APPENDIXLAUTERBACHAMEXCOM ELLIN TUCKER REPORT ON THE FIRM'S SYSTEM OF QUALITY CONTROL To the Partners of Lauterbach & Amen,, LLP and the Peer Review Alliance Report Acceptance Committee We have reviewed the system of quality control for the accounting and auditing practice of Lauterbach & Amen, LLP (Firm) in effect for the year ended June 30, 2019. 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, limitations of, and procedures performed in a System Review rl as described in the Standards may be found at www..-Ii.o �' rsummary. 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 dee med as not performed or reported in conformity with professional standards, when appropriate, and 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 engagements performed under Government Auditing Standards, including compliance audits under the Single Audit Act. As 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. INIIIII III NVI 10 ` ELLINANDTUCKER,COM 1 410,727 5735 ) D"I Village of Mount Prospect, Illinois 1 25 NQ A"P LAUTERBACHAMEN.COM P''I" ENDIX I ELLIN TUCKER OPINION In our opinion, the system of quality control for the accounting and auditing practice of Lauterbach & Amen, LLP in effect for the year ended .lune 30, 2019 has been suitably designed and complied with to provide the Firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with defreiency(ies) or fail. Lauterbach & Amen, LLP has received a peer review rating of pass. 100) 9,4e, -9& jet, ELLIN & TUCKER Certified Public Accountants Baltimore, Maryland December 27, 2019 C Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: VILLAGE PRESIDENT AND BOARD OF TRUSTEES FROM: TIM MCDERMOTT, AUDIT COMMITTEE CHAIR DATE: SEPTEMBER 28, 2020 SUBJECT: 5 -YEAR AUDIT ENGAGEMENT FOR 2020-2024 An Audit Committee meeting was held to select the Village's External Auditor for a 5 -year engagement from 2020 to 2024. The meeting was conducted on September 24, 2020 at 6:30 pm at the new Police Headquarter. Audit Committee Chair Tim McDermott, Trustee William Grossi, Trustee Richard Rogers, and Audit Committee/Finance Commission member Vincent Grochocinski were present at the meeting. Director of Finance Amit Thakkar and Asst. to the Director of Finance Jenny Fitzgerald were also in attendance from the staff. The RFP responses are summarized as below: 2.02&2025 Cui rre nit Service Gam" Associates RKD Mlil[er CoGper Lauiterhaich & Ari Skichi 101Wriilii oiiii o1ii CAF R--,VlHIIII age Gam" Associates 28-11500 $ 371-11500 $ $ 310JUAGID 35,333 ArmuaIIII Firiaiii Repgirt -Libirare 340,$5,710 2,90 6, 20D $ $ 51YODG $ 6, 1,100 St a t, e, ol ig ,A u d t ilii ri g St a ig d a r ids, N ol. 1,14 1,190 $ 120 Seriiitirs $1 1,10 $11,"x:5 x,3'35 Plrepiaratoiiii olf t1l7e, Mariagernem, Letter $ 811) Staff $1 19,5, 1,10,5 T a ��IIII iii c r e, rin e, iii t F iii a iii c rig 10, piilii iii ol 111 - Totail Houirs for Audit 2,1- ZOO $ 750 Mlil[er Cooper 31010 2,1- 300 ,Suis lig VIIIe, A u d alit R e, P, ol rt 22.100 4�.500 4�.,GD5 3J 5,00 $ 3,18,00 CYFER (GATA repoirt.) 24.101) 1,2 50 1 500 1.,.°20D $ - 1,,503 Plolkiice Pleriisiiibiii Fui9dAu&t & Report 25.E 0 3,1000 $ 2,.500 2,.500 P"e,r-foirmhilii,ig,,,Audhilt Prolicedures 31Y.51010 5 Fire Pleasitiiii Fuiiid,Au&it & Report 220.100 3-100,1) $ 2,.500 Accu muIIImilli iii ResuIIts & Repioirtiii 1,710.100 1,186.100 Pli-eplaratioliii olf Fiii Replar 2,1-11500 $ 3,11500 $ 566.100 476.100 5.500 Preplaratioliii olf Firiaiii 435.00 1.1000 1,'20D $ 1 500 $ 5100 1 500 lets Year 3, 50.2 50 61. EGG $ 5,5.4-50 $ 46J,3010 5 6, ODD Hourly Raii, Gam" Associates RKI) Mlil[er Coaper Lailuiterhaich & A Pla rtri ers, 175 340,$5,710 2,90 $ 1510 Maigagers, 1,31,51 52110-.$4-75, 1,190 $ 120 Seriiitirs $1 1,10 $11,"x:5 x,3'35 1 1351 $ 811) Staff $1 19,5, 1,10,5 - Totail Houirs for Audit G1W Associates RKD Mlil[er Cooper Lailuiterhaich & A U iii d ersta iii d ilii iii did e, CII ilii eiii 22.100 BELO 12.00 Uiii derstariidilii iii Irift eriii Coiiiitrol[s 24.101) 30.103 56.100 30.010 Asseg si iii R, iisk 35.100 25.E 0 P"e,r-foirmhilii,ig,,,Audhilt Prolicedures 315.53 2,35.100 220.100 313119.00 Accu muIIImilli iii ResuIIts & Repioirtiii 1,710.100 1,186.100 1,106.100 54.00 Tolt a IIII 566.100 476.100 4-20.100 435.00 Year 2,, '51,175 3-4446 511151-11515047730 J Year 3, 52,553 353 ssj 5),G 49,1610 Ye a r 4, 53,,45D &7, 310 5 55, x°53 Year,5, 54, 350 65, 3, 3o '5 63,'250 2611,7 75 32,71,1036 ,$, 2 3,1,,,53 ,1 Eck 31 Annual Report of Audit Committee — 2018 Activities August 20, 2019 Page 2 Based on the above data, the Staff had recommended Lauterbach & Amen for a 5 -year audit engagement. Staff recommended Lauterbach & Amen based on their expertise, the amount of time proposed to be spent on the audit, the Village's prior experience with them, and the costs involved for a 5 -year engagement. Staff had invited Lauterbach & Amen to attend the Audit Committee meeting. Lauterbach & Amen audit partner Matt Beran and Audit Manager Tim Gavin were in attendance at the meeting. Mett Beran informed the Audit Committee about the history of the Lauterbach & Amen firm. The firm specializes in Government Audits. It is a 20 year old firm and the largest in the Government sector in the State of Illinois. They were the Village Auditors from 2009 to 2013. They have also worked with the Village for many special projects including audit work papers in 2018. The firm has served hundreds of Governmental clients in the State of Illinois. Tim Gavin provided an overall idea about their audit process. The Audit Committee had several questions including independence, audit process, current clientele, fees structure, GASB pronouncements, and their experience with various types of the audit opinions issued. Matt Beran and Tim Gavin gave satisfactory answers to all the questions. Staff also disclosed that the Lauterbach & Amen has another division that serves pension funds, including the Village of Mount Prospect Police and Fire Pension Funds. Matt Beran and Tim Gavin informed the Audit Committee that independence is very important for them and they are taking it very seriously. They are in direct contact with AICPA, who sets the rule for CPAs conducting audits. They have obtained clearance from AICPA to serve pension funds while being the auditor of the Village. The firm is reviewed from the Peer Review Board every three years. All the Peer Review Reports so far have been clean, supporting the conclusion that they have maintained their independence while serving their clients, and that they are allowed to serve as an Auditor of the Village while serving the pension funds. Lauterbach & Amen had several similar engagements in the past and they currently are also serving other clients in the same capacity. At the end of the day, pension funds are separate entities from the Village, and the Village is required to fund them properly. The Audit Committee considered staff's recommendation, audit fees involved, references provided and a few other factors. After receiving satisfactory responses and considering the listed factors, the Audit Committee voted and unanimously recommended Lauterbach & Amen for a 5 -year audit engagement. The first year audit engagement cost will be $46,300 and the total 5 -year costs for the audit will be $246,100. After the approval from the Board, the Auditors are expected to start their audit work including prelim audit work in December 2020. I am submitting this report to the Village Board on behalf of the Audit Committee with a recommendation to approve Lauterbach & Amen for a 5 -year audit engagement. Please contact me if you have any questions or need additional information related to this report or the Audit Committee activities. Respectfully Submitted, Tim McDermott 32 Y m U a CL NO O N •L 4- fD C: CL = E O p U Ln � d N O U- ai cc 0 N V bn � � N •i > a N V) O 0 0 0 O O O M r -I ' ' M 00 Ln ' ' Ln Ln Ln 1.0 N M r -I Ln 14 m O O O O O O O O O ' ' M Ln ' Ln Ln ' Ln I Ln m m m M 00 0 0 0 0 O 00 r- O N Ln Ln ' Ln 00 Ln m -c!)- -ch t!h Vc t/} Vc -ch -cn- -ch ij)- -c!� O O O 00000 Ln N ' ' N Ln Ln Ln M M N rl l0 N r -I N N M c -I M -Ln tn- tn- tn- tn- tn- tn- -Ln tn- tn- tn- O O 0 00 Ln 0 0 0 0 LP1 O ' ' O O N O O Ln O 00 Lqt r -I M r I li N M N N O O O Ln O O m � E 0o s U f6 N 7 m J ih O Ln Ln Ln i 4J CL O O V i N O O c -I l0 Y m tn- O Ln N O Ln m 'u O 0 N Q t7 ih tn� •cn� •cn� •c!� t1)- t/)- •cn- ih •ch tn• I tn• L O 12 U � S✓ LL � L � LL c -I i c C6 c -I Oc aJ+ Q i =3 i p c O O O Q �a Z p �_ > Q v)E Q 0604 0 tj co 0C cn i ' m m i C:� 6 � O -0 Q L +-, c � c � j cn p� 0 Q E E cr-I O O O U C 4- U- Q W U- U U O L U O �= Q p U- O O y 4J +_+ 7n 0: Q O E S Q O O O c L- c " Q a O m O c� C: UJ CD a ca cu — i C = aIj Q— 0A Lu U Q Q [u 3 •Q (o X LL 4J �, O Q (/) m H in U m LL m m H 2 coo Lr) r14 r -I r -I ' O O Ln Ln dl dl M O N r -I r -I r -I V)- V)- V)- qj'� O Lf) Lf) r- r- m L!i lzT M •cn•cn•ch I I I qt � N M N r -I in- ih in - LO LO O LO r- M r -I m r -I r -I r -I tn- •cn- if - ij-k Y m 0.0 O 4-J L c a) OL +, U (31 u U 41 a a +J — OpC C:to � N Q b.0 0 -0 to}�-, � Cai u z5 L L :n L E N U � > > Ln a a a N M Ln M M OM ON CD O O O O N O mI:t O Ln tD M O r- r -I l0 N r -I r -I M ?� Tt M Y O N p It It Ln Ln N -0 " L O CO L L G L7 4- �G p p O Lu Z — O O pC O O O O O O O O O O 00 l0 O l0 O O Ln Ln Ln Ln Lr) Ln r1 r- N r -I M Ln N O N r- N +N-+ � l0 o0 (7 O O Ln Ln Ln O Ol N W Z N � 0 v t O O O p _0 D � j ca U oC 2 a O O O v v v v 0 U c�a 2 V)co > > > m O O O O O O ' O Ln Ln ,6 O lD � r -IO M M M M O M N � N Q)l0 l0 l0 l0 N � Y O M O 0 Lu a� L o LLL N 41 O bD bn r- 4= O p O O ,> m 2 oG d O O O O O w w CIw w U i i 0 0 0 0 0 0 Ln O O O L!) 0 0 0 0 0 L!i u! O 0 l0 rr-I Ln MLn r- N N N M r -I r- M r -I l0 Lf) 4J r -I N M 9t r -I Lli Ln Ln LP) l0 j N 41 O a) >' V3m L U O 4- 4O CO O O OJ C bO 3: > m H U ith 0.0 O 4-J L c a) OL +, U (31 u U 41 a a +J — OpC C:to � N Q b.0 0 -0 to}�-, � Cai u z5 L L :n L E N U � > > Ln a a a N M Ln M M