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IV.8. Approval of Contract for Audit Services; Bishop
October 5, 2021 Council Report 2021-098 Approve Contract for Audit Services Proposed Action. Staff recommends that the Council approve the following motion: Approve contract with Abdo, Eick & Meyers, LLP for audit services for the years 2021-2023 Overview: The City of Hopkins has had the audit firm CliftonLarsonAllen LLP since 2007 and this year decided it was in our best interest to re-bid audit services. A request for proposal (RFP) was prepared and advertised. The RFP was for a three year contract with a two year optional renewal. We received four proposals from quality accounting firms, including our current auditor. All four firms could successfully complete our audit. After careful review, staff is recommending the firm of Abdo, Eick & Meyers, LLP. Factors that influenced our decision were ability to complete the audit and; the qualifications and experience of the firm, partners and personnel. The costs proposed for services are as follows. 2021 2022 2023 2024 (renewal) 2025 (renewal) Financial Statement Audit $38,000 $38,800 $39,500 $40,300 $41,100 Single Audit (if required) $4,300 $4,400 $4,500 $4,600 $4,700 Supporting Information: • Proposal from Abdo, Eick & Meyers, LLP ________________________________________ Nick Bishop, CPA Finance Director Tax | Accounting + Audit | Consulting Proposal for Audit Services for: City of Hopkins 1010 First Street South Hopkins, Minnesota 55343 Proposed by: Brad Falteysek, CPA Partner | Abdo, Eick & Meyers, LLP brad.falteysek@aemcpas.com Direct Line (952) 715-3004 Abdo, Eick & Meyers, LLP Edina 5201 Eden Avenue, Suite 250, Edina, Minnesota 55436 Office: (952) 835-9090 / Fax: (952) 835-3261 Mankato 100 Warren Street, Suite 600, Mankato, Minnesota 56001 Office: (507) 625-2727 / Fax: (507) 389-9139 September 15, 2021 Nick Bishop, Finance Director City of Hopkins 1010 First Street South Hopkins, Minnesota 55343 September 15, 2021 Dear Nick, Thank you for the opportunity to submit this proposal to City of Hopkins (the City) for audit services. We appreciate the opportunity to work with you. Based on our experience with clients like you, we are confident that Abdo, Eick & Meyers, LLP (the Firm) would be a great fit. We work hard for those who matter most -clients, employees, family, and community -and celebrate their successes as our own.Our success has been driven by our philosophy of going beyond the numbers for our clients. This belief is represented through our commitment to people and knowledge, process and you. We will utilize staff that is experienced and dedicated in the area of government. Our process is centered on meeting your needs, exceeding your expectations, and incorporating technology to deliver unparalleled solutions. This includes delivering prompt and effective service of the highest quality to you. The quality of our service allows us an opportunity to be an integral part of your finance team. We believe this investment should make a difference for you, our valued client. We focus on the challenges and needs that are relevant to your City, which allows us to be thoughtful in our approach in providing you with the best solutions, and leaves you assured in the value of our deliverable. The attached proposal will demonstrate to you that we will be a great service provider and partner for your City. We look forward to meeting with you to discuss our proposal and appreciate this opportunity to present our firm for your consideration. We will follow up with you within two weeks to answer any questions or concerns you may have and to provide any further information you may need. Sincerely, Abdo, Eick & Meyers, LLP Brad Falteysek, CPA Partner, Abdo, Eick & Meyers, LLP © Abdo, Eick & Meyers, LLP | September 15, 2021 Contents Top 25 Accounting Firm in Minnesota Forbes Named Top Accounting Firm Nationwide 04 Executive Summary 05 Meet Your Team 16 Government Experience 17 Audit Approach 21 Technology 22 Service Timeline 23 Value 24 What Our Clients Say 25 License & Independence 26 Why Partner with AEM 27 Diversity, Equity & Inclusion 29 Value Added Services Appendix A –Proposer Guarantees & Warranties Appendix B –Peer Review Letter Appendix C –Sample Audit Presentation 3 © Abdo, Eick & Meyers, LLP | September 15, 2021 Executive Summary We are pleased to present our proposal for audit services to the City of Hopkins. We have prepared our proposal based on our understanding of your organization’s needs from the request for proposal we received and the response we received from Mr. Bishop from our questions submitted via email. We understand that the key requirements you have of your selected advisors include: »Great communication during audit fieldwork »Deliver both concise and informative information to the Council »Demonstrate familiarity, knowledge and experience in the industry »Provide a timely and efficient audit completed after April fieldwork We understand that the requested work to be completed includes the following services: »Annual Financial Statement Audit »Single Audit (If applicable) »Management Letter »Presentation to the Council Based on our work with more than 100 local governments similar to yours, we confidently believe we can meet your requirements and exceed your expectations for the reasons listed below and referenced in our proposal. »We provide timely services and currently adhere to an 18-day turnaround time from fieldwork for the delivery of draft reports to the client. »Our Council presentation uses ratios and comparisons of trends that give snapshots of metrics for your Organization through graphs and charts. »We have a dedicated team of 40 partners, managers and staff that serve governments exclusively. »Our government experience extends beyond just audit and compliance. We also provide the following services to government organizations. •Human Resource solutions •Long-term financial planning •One-on-one personalized and group-focused training opportunities •Process improvement-lean process and process evaluation •990 preparation »Integral to our mission is a philosophy that we help organizations reach their maximum potential through open communications and teamwork. We enjoy answering questions any time of the year, and at no cost! We commit to providing an excellent level of client service and helping you move beyond the numbers through communication, support and customized guidance. As you review the details of this proposal, please do not hesitate to contact us with questions or for clarification. We look forward to partnering with the City of Hopkins. 4 © Abdo, Eick & Meyers, LLP | September 15, 2021 Meet Your Team Based on our ability to provide the requested services, our shared core values, and an understanding of your unique needs, we firmly believe we would be a great fit for your city. We have the resources, knowledge, people and services to provide you with the solutions you’re looking for. We have assembled a team with relevant experience who are committed to performing these services to meet the expected deadlines. Each team member is briefly profiled below, and full biographies can be found on the following pages. Brad Falteysek, CPA Partner brad.falteysek@aemcpas.com Direct Line (952) 715-3004 Thomas Olinger, CPA Partner thomas.olinger@aemcpas.com Direct Line (507) 304-6802 Justin Nilson, CPA Senior Manager justin.nilson@aemcpas.com Direct Line (952) 715-3011 Jeff Hines, CPA Senior Associate jeff.hines@aemcpas.com Direct Line (952) 449-6239 Erik Wagner Senior Associate erik.wagner@aemcpas.com Direct Line (952) 715-3012 5 © Abdo, Eick & Meyers, LLP | September 15, 2021 Brad Falteysek, CPA Government Partner MSRB Municipal Advisor Representative (Series 50) brad.falteysek@aemcpas.com Direct Line (952) 715.3004 Brad joined the Firm in 1998. He graduated Cum Laude from Winona State University, and worked for two years with the Minnesota Office of the Legislative Auditor’s Office. He is registered and licensed to practice as a CPA in Minnesota. His work includes audit and accounting for many of the Firm’s governmental clients, including audits regulated under Uniform Guidance. Education »Bachelor of Science in Accounting, Winona State University »Minor in Economics »Graduated Cum Laude »Continuing professional education as required by AICPA and Government Accountability Office Professional Memberships »Minnesota Government Finance Officers Association »Minnesota Society of Certified Public Accountants »American Institute of Certified Public Accountants (AICPA) »Minnesota Association of School Business Officials Qualifications »23 years of experience auditing local governments and schools in Minnesota »Over 90 percent of billable time relates to governmental clients »Experienced in municipal government utility rate studies and long term financial plans »Presented at the Minnesota Association of School Business Officials Annual Conference, the Minnesota Government Finance Officers Association Annual Conference, and the Minnesota Clerks and Finance Officers Association Annual Conference »MSRB Municipal Advisor Representative (Series 50) 6 Completion Date Course Title Sponsor Gov't Audit Technical Non-Technical Ethics Total CPE 07/13/2018 School Import Training Abdo, Eick & Meyers, LLP 1.5 1.5 07/17/2018 Abdo Eick & Meyers Business Transformation Playbook Boomer Consulting 12.5 12.5 08/15/2018 Governmental Accounting and Auditing Update Conference 2018 AICPA 21.5 21.5 08/17/2018 OPEB Overview - Schools Abdo, Eick & Meyers, LLP 1.5 1.5 09/28/2018 MNGFOA Conference - 2018 GFOA 4.5 4.5 10/8/2018 Mental Health in the Workplace Optum 1 1 10/22/2018 Audits of Local Governments Conference MNCPA 7 1 8 10/29/2018 Key Lessons Learned in Identifying. Developing & Retaining Top Performers Upstream Academy 1 1 11/1/2018 Annual Government GAAP Update GFOA 4 4 11/26/2018 The 2018 Yellow Book Revision Surgent McCoy CPE 4 4 11/27/2018 Governmental Standards Updates and Best Practices Seminar Abdo, Eick & Meyers, LLP 6 6 12/14/2018 City Council Presentation Skills Abdo, Eick & Meyers, LLP 4.5 4.5 01/03/2019 AEM All-Firm Connect More Conference Abdo, Eick & Meyers, LLP 5 5 01/21/2019 GASB 75: OPEB Testing for Cities Abdo, Eick & Meyers, LLP 1 1 01/25/2019 Municipal Audit Report Council Presentation Practice Abdo, Eick & Meyers, LLP 2.5 2.5 02/07/2019 Understanding the Preparation for the Annual Audit MASBO 3 3 04/12/2019 GASB 75: OPEB Workpaper for Cities Refresher Abdo, Eick & Meyers, LLP 1 1 04/19/2019 Municipal Quarterly Reporting Abdo, Eick & Meyers, LLP 1.5 1.5 04/26/2019 Municipal Advising Series 50 CPE and Municipal Budgeting Abdo, Eick & Meyers, LLP 2 2 05/03/2019 Arbitrage Reporting: Purpose. Process and People Abdo, Eick & Meyers, LLP 1.5 1.5 06/03/2019 MNCPA School District Audits Conference MNCPA 6.5 1.5 8 06/18/2019 Screencasting 101 - Edina Session 1 Abdo, Eick & Meyers, LLP 1 1 07/22/2019 OPEB Refresher: Schools Abdo, Eick & Meyers, LLP 1 1 07/24/2019 CFO/Director of Accounting/Finance Director: What's the Difference and Why Does it Matter?Abdo, Eick & Meyers, LLP 1 1 08/08/2019 Prolaera Content Creator Training Abdo, Eick & Meyers, LLP 1.5 1.5 09/20/2019 Assessing and Improving your Personal BD Style Upstream Academy 1 1 09/25/2019 Road Map of the Audit Process Abdo, Eick & Meyers, LLP 3 3 10/21/2019 MNCPA Audits of Local Governments Conference MNCPA 5.5 1.5 1 8 10/29/2019 Government Audit: Solving Cash Differences Abdo, Eick & Meyers, LLP 1.5 1.5 11/07/2019 Setting Your 2020 Vision Abdo, Eick & Meyers, LLP 6 6 11/15/2019 UGG! Consistent Time & Effort Reporting for Federal Programs MASBO 1 1 12/05/2019 Annual Governmental GAAP Update GFOA 4 4 12/16/2019 AEM FS Audit Preparation: Day 1 Abdo, Eick & Meyers, LLP 6 6 12/17/2019 AEM FS Audit Preparation: Day 2 Abdo, Eick & Meyers, LLP 6 6 12/18/2019 Audit Risk Assessment and Planning Abdo, Eick & Meyers, LLP 4 4 01/06/2020 AEM 100 All Firm Dliver More Conference Abdo, Eick & Meyers, LLP 4 4 04/17/2020 Managing During a Crisis Upstream Academy 1 1 05/07/2020 Making Sound People Decisions in the Midst of a Crisis Upstream Academy 1 1 05/12/2020 Making Sound Financial Decisions in the Midst of a Crisis Upstream Academy 1 1 05/28/2020 AEM 10- Metro Firms Ethical Webinar Abdo, Eick & Meyers, LLP 4 4 06/11/2020 Encourage Expertise Upstream Academy 1 1 06/24/2020 Benford's Law: A Valuable Audit Tool Business Professionals' Network, Inc.2 2 06/26/2020 Cultivate an Advisory Mindset Upstream Academy 1 1 07/10/2020 Encourage Development of a Leaders Voice Upstream Academy 1 1 07/27/2020 Provide Effective Constructive Feedback Upstream Academy 1 1 08/11/2020 Teach a High Yield Low Maintenance Attitude Upstream Academy 1 1 08/18/2020 Governmental Accounting and Auditing Update Conference 2020 AICPA 8.5 1.5 10 10/01/2020 AEM 200 Upstream Series: Leading Remotely Abdo, Eick & Meyers, LLP 0.5 0.5 10/28/2020 LR3 - Clients Upstream Academy 1 1 10/28/2020 AEM 200 Upstream Series: Leading Remotely Abdo, Eick & Meyers, LLP 0.5 0.5 11/10/2020 LR4 - Growth Upstream Academy 1 1 12/10/2020 OMB Supplement Addendum and the Latest COVID-19 Single Audit Implications AICPA 2 2 12/16/2020 AEM 100: Introduction to AEM Equipping Advisors Academy Abdo, Eick & Meyers, LLP 1 1 01/06/2021 AEM 100: All Firm Event: Managing 2021 Style Abdo, Eick & Meyers, LLP 1 1 01/13/2021 AEM 100: Checkpoint Training for Audit and Tax Abdo, Eick & Meyers, LLP 0.5 0.5 03/01/2021 Risk Assessment Deep Dive: How to Avoid Common Missteps AICPA 3.5 3.5 05/19/2021 AEM 100 Current Issues In Business Ethics Abdo, Eick & Meyers, LLP 4 4 TOTAL 94.5 18 59.5 11.5 183.5 ABDO, EICK & MEYERS MINNEAPOLIS, MINNESOTA CONTINUING PROFESSIONAL EDUCATION ATTENDANCE RECORD FOR BRAD FALTEYSEK 7 © Abdo, Eick & Meyers, LLP | September 15, 2021 Tom Olinger, CPA Government Partner thomas.olinger@aemcpas.com Direct Line (507) 304.6802 Tom joined the Firm in 1995 after graduating from Minnesota State University, Mankato with a B.S. Degree in Accounting. He oversees many of the Mankato office’s municipal, fire relief, insurance, and school district audit engagements as well as Single Audit and nonprofit audits. Education »Bachelor of Science in Accounting, Minnesota State University, Mankato »Continuing professional education Professional Memberships »American Institute of Certified Public Accountants (AICPA) »Minnesota Society of Certified Public Accountants »Minnesota Government Finance Officers Association Qualifications »25 years of experience auditing local governments and schools in Minnesota »Over 90 percent of billable time relates to governmental clients »Experience in municipal long-term financial plans and utility rate studies 8 Completion Date Course Title Sponsor Gov't Audit Technical Non-Technical Ethics Total CPE 01/17/2018 You Are Who You Are: Practical Application of the Kolbe Inventory Abdo, Eick & Meyers, LLP 1.5 1.5 05/25/2018 What Are Your Biggest Paradigms Holding Firms Back Upstream Academy 1 1 06/04/2018 MNCPA School District Audits Conference MNCPA 7 1 8 10/11/2018 Mental Health in the Workplace Optum 1.5 1.5 11/01/2018 Annual Governmental GAAP Update GFOA 4 4 11/27/2018 Governmental Standards Updates and Best Practices Seminar Abdo, Eick & Meyers, LLP 6 6 12/14/2018 City Council Presentation Skills Abdo, Eick & Meyers, LLP 1.5 1.5 01/03/2019 AEM All-Firm Connect More Conference Abdo, Eick & Meyers, LLP 5 5 01/21/2019 GASB 75: OPEB Testing for Cities Abdo, Eick & Meyers, LLP 1 1 02/22/2019 BOOK Club Abdo, Eick & Meyers, LLP 1 1 04/12/2019 GASB 75: OPEB Workpaper for Cities Refresher Abdo, Eick & Meyers, LLP 1 1 04/30/2019 2019 GAQC Annual Update Webcast AICPA 2 2 05/22/2019 2019 Ethics Seminar Abdo, Eick & Meyers, LLP 4 4 06/03/2019 MNCPA School District Audits Conference MNCPA 6.5 1.5 8 06/05/2019 2019 Compliance Supplement and Single Audit Update AICPA 2 2 08/14/2019 BTC 2 Summit Meeting Boomer Consulting 11 11 09/04/2019 Overview of Technology Trends in Accounting Boomer Consulting 1 1 10/21/2019 MNCPA Audits of Local Governments Conference MNCPA 5.5 1.5 1 8 10/29/2019 Government Audit: Solving Cash Differences Abdo, Eick & Meyers, LLP 6 6 10/30/2019 Setting Your 2020 Vision Abdo, Eick & Meyers, LLP 6 6 11/15/2019 AEM 200 Split Sheet: Developing a Beyond the Engagement Mindset Abdo, Eick & Meyers, LLP 1.5 1.5 11/18/2019 Developing and Executing a Personal BD Plan Upstream Academy 1 1 12/02/2019 Data Analytics Workshop Abdo, Eick & Meyers, LLP 8.5 8.5 12/11/2019 Improving Your Personal BD Skill Set Upstream Academy 1 1 12/18/2019 Audit Risk Assessment and Planning Abdo, Eick & Meyers, LLP 4 4 01/06/2020 AEM 100 All Firm Deliver More Conference Abdo, Eick & Meyers, LLP 4 4 05/07/2020 Making Sound People Decisions in the Midst of a Crisis Upstream Academy 1 1 05/12/2020 Making Sound Financial Decisions in the Midst of a Crisis Upstream Academy 1 1 05/28/2020 AEM 10- Metro Firms Ethical Webinar Abdo, Eick & Meyers, LLP 4 4 05/29/2020 Create a Path for Continual Growth Upstream Academy 1 1 06/11/2020 Encourage Expertist Upstream Academy 1 1 06/26/2020 Cultivate an Adivsory Mindset Upstream Academy 1 1 07/27/2020 Provide Effective Constructive Feedback Upstream Academy 1 1 08/25/2020 Build Business Development Skills Upstream Academy 1 1 10/01/2020 LR2 - People Upstream Academy 1 1 10/01/2020 AEM 200 Upsteam Series: Leading Remotely Abdo, Eick & Meyers, LLP 0.5 0.5 10/28/2020 LR3 - Clients Upstream Academy 1 1 10/28/2020 AEM 200 Upsteam Series: Leading Remotely Abdo, Eick & Meyers, LLP 0.5 0.5 11/10/2020 LR4 - Growth Upstream Academy 1 1 02/19/2021 Risk Assessment Deep Dive: How to Avoid Common Missteps AICPA 3.5 3.5 03/11/2021 Uniform Guidance Revisisons: What you need to know AICPA 2 2 05/19/2021 AEM 100 Current Issues in Business Ethics - 2021 Abdo, Eick & Meyers, LLP 4 4 06/21/2021 Exploring the Revised Procurement Standards BPN 2 2 06/23/2021 Common Yellow Book & Single Audit Deficiencies BPN 4 4 TOTAL 43 22 49.5 15.5 130 ABDO, EICK & MEYERS MINNEAPOLIS, MINNESOTA CONTINUING PROFESSIONAL EDUCATION ATTENDANCE RECORD FOR TOM OLINGER 9 © Abdo, Eick & Meyers, LLP | September 15, 2021 Justin Nilson, CPA Senior Manager justin.nilson@aemcpas.com Direct Line (952) 715.3011 Justin joined the Firm in 2012 after graduating from Saint John’s University. His work experience includes assisting in the audits of several municipal, school district and Single Audits. Education »Bachelor of Arts in Accounting, Saint John’s University »Continuing professional education as required by AICPA and Government Accountability Office Professional Memberships »American Institute of Certified Public Accountants (AICPA) »Minnesota Society of Certified Public Accountants »Minnesota Government Finance Officers Association Qualifications »9 years of experience auditing local governments and schools in Minnesota »Over 90 percent of billable time relates to governmental clients »Experienced in municipal government long term financial plans »Experienced in models for various municipal government specific areas such as utility rate, tax levy and debt analysis 10 Completion Date Course Title Sponsor Gov't Audit Technical Non-Technical Ethics Total CPE 07/17/2018 Abdo Eick & Meyers Business Transformation Playbook Boomer Consulting 12.5 12.5 08/06/2018 Charter School Grant Training Abdo, Eick & Meyers, LLP 9 9 08/15/2018 Interview Skills Training Abdo, Eick & Meyers, LLP 1 1 08/17/2018 OPEB Overview - Schools Abdo, Eick & Meyers, LLP 1.5 1.5 10/22/2018 MGMT-Transitioning Leadership Responsibilities Effectively From One Generation to Another CCH 2 2 10/22/2018 Tech-Becoming a Cherished Advisor: Utilizing AI and Machine Learning to Create Human Connections CCH 2 2 10/22/2018 MGMT-The Future-Ready Firm and the Role of Innovation CCH 2 2 10/22/2018 CCH Connections: User Conference 2018 - Opening General Session CCH 1 1 10/23/2018 A&A-Elevate Your Audits with Data Analytics CCH 2 2 10/23/2018 MGMT-Understanding Change Management: Implementing New Technologies and Processes Effectively CCH 2 2 10/23/2018 MGMT-Positioning Yourself to be a Partner - Your Way!CCH 2 2 10/23/2018 MGMT-How to Innovate When Your Boss Says ""No""CCH 2 2 10/24/2018 A&A-Tips for Transforming Your Audit Practice CCH 2 2 10/24/2018 CCH Connections: User Conference 2018 - Closing General Session CCH 1 1 10/29/2018 Key Lessons Learned in Identifying. Developing and Retaining Top Performers Upstream Academy 1 1 11/01/2018 Annual Government GAAP Update GFOA 4 4 11/07/2018 Tax Reform Overview Abdo, Eick & Meyers, LLP 1 1 11/09/2018 Capital Asset Conversion Training Abdo, Eick & Meyers, LLP 2 2 11/14/2018 Government Audit: Taxes and Assessments Section Abdo, Eick & Meyers, LLP 3 3 11/27/2018 Governmental Standards Updates and Best Practices Seminar Abdo, Eick & Meyers, LLP 6 6 11/30/2018 Government Audit: Analytical Review Procedures Abdo, Eick & Meyers, LLP 4.5 4.5 12/20/2018 Driving Change: Finding and Inspiring Your Firm's Change Agents Upstream Academy 1 1 01/03/2019 All AEM All-Firm Connect More Conference Abdo, Eick & Meyers, LLP 5 5 01/21/2019 GASB 75: OPEB Testing for Cities Abdo, Eick & Meyers, LLP 1 1 01/25/2019 Municipal Audit Report Council Presentation Practice Abdo, Eick & Meyers, LLP 2.5 2.5 04/26/2019 Municipal Advising Series 50 CPE and Municipal Budgeting Abdo, Eick & Meyers, LLP 3.5 3.5 05/22/2019 2019 Ethics Seminar Abdo, Eick & Meyers, LLP 2 2 06/03/2019 MNCPA School District Audits Conference MNCPA 6.5 1.5 8 08/20/2019 BOOK CLUB: Leading Through Organizational Transformation Abdo, Eick & Meyers, LLP 1.5 1.5 08/22/2019 Transforming Audit Today: Reimagine Possibilities Boomer Consulting 1 1 08/23/2019 Charter School Audit: Grants Section Abdo, Eick & Meyers, LLP 9 9 09/04/2019 Overview of Technology Trends in Accounting Boomer Consulting 1 1 09/20/2019 Assessing and Improving Your Personal BD Style Upstream Academy 1 1 10/21/2019 MNCPA Audits of Local Governments Conference MNCPA 5.5 1.5 1 8 10/29/2019 Government Audit: Solving Cash Differences Abdo, Eick & Meyers, LLP 2 2 10/30/2019 Setting Your 2020 Vision Abdo, Eick & Meyers, LLP 6 6 12/18/2019 Audit Risk Assessment and Planning Abdo, Eick & Meyers, LLP 4 4 01/06/2020 AEM 100 All Firm Dliever More Conference Abdo, Eick & Meyers. LLP 4 4 02/07/2020 Implementing a Process for Dealing with Your Clients with the Worst Realization Upstream Academy 1 1 05/28/2020 AEM 100 Metro Firms Ethical Webinar Abdo, Eick & Meyers. LLP 4 4 06/11/2020 Encourage Expertise Upstream Academy 1 1 07/10/2020 Encourage Development of a Leader's Voice Upstream Academy 1 1 07/27/2020 Provide Effective Constructive Feedback Upstream Academy 1 1 08/25/2020 Build Business Development Skills Upstream Academy 1 1 08/26/2020 Financial Forecasting Using Excel Wellspring CPE 2 2 10/01/2020 LR2 - People Upstream Academy 1 1 10/01/2020 AEM 200 Upstream Series: Leading Remotely Abdo, Eick & Meyers. LLP 0.5 0.5 10/19/2020 Audits of Local Governments Conference MNCPA 5 2 1 8 12/18/2020 Single Audit Fundamentals Part 3: Compliance Requirements and Internal Control over Compliance AICPA 2 2 12/18/2020 Single Audit Fundamentals Part 4: Overview of Sampling and Single Audit Reporting Requirements AICPA 2 2 01/14/2021 Power BI - Introduction to MS Power BI Tools AICPA 2 2 01/14/2021 Power BI - Prepare Your Data Efficiently to Excel Analysis AICPA 2 2 01/19/2021 Power BI - Create Excel Dashboards for Maximum Impact AICPA 2 2 01/22/2021 Power BI - Analyze Your Data with Excel Pivot Tables AICPA 4 4 02/15/2021 Power BI - Go Beyond Pivot Tables with Power Pivot AICPA 4 4 03/17/2021 Annual Comprehensive Financial Report Review Session BerganKDV 1 1 05/19/2021 AEM 100 Current Issues in Business Ethics - 2021 4 4 06/02/2021 MNCPA Audits of School Districts Conference MNCPA 3 1 1 5 06/17/2021 Finance and UFARS Seminar Arrowhead Regional Computing Consortium 4 4 TOTAL 62 17.5 82.5 14.5 176.5 ABDO, EICK & MEYERS MINNEAPOLIS, MINNESOTA CONTINUING PROFESSIONAL EDUCATION ATTENDANCE RECORD FOR JUSTIN NILSON 11 © Abdo, Eick & Meyers, LLP | September 15, 2021 Jeffery Hines, CPA Senior Associate jeff.hines@aemcpas.com Direct Line (952) 449.6239 Jeffery joined the Firm in 2018 as an Associate after completing his Accounting and Finance degrees from Michigan Technological University. He was a government intern for AEM during the 2018 audit season. Education »Bachelor of Science in Accounting, Michigan Technological University »Bachelor of Science in Finance, Michigan Technological University »Minor in Economics »Master of Accountancy and Professional Consultancy, Villanova University »Continuing professional education Professional Memberships »Minnesota Society of Certified Public Accountants »Government Finance Officers Association Qualifications »Experience in auditing local governments and schools in Minnesota »Over 90 percent of billable time relates to governmental clients »Works extensively with Microsoft Office, as well as accounting software like Banyon and QuickBooks 12 Completion Date Activity Title Sponsor Gov't Audit Technical Non-Technical Ethics Total CPE 07/13/2018 School Import Training Abdo, Eick & Meyers, LLP 3 3 08/06/2018 Charter School Grant Training Abdo, Eick & Meyers, LLP 3 3 08/17/2018 OPEB Overview - Schools Abdo, Eick & Meyers, LLP 1.5 1.5 10/03/2018 Increasing Business Acumen Abdo, Eick & Meyers, LLP 2 2 10/08/2018 Mental Health in the Workplace Optum 1 1 11/01/2018 Annual Government GAAP Update GFOA 4 4 11/01/2018 Asking Better Questions Abdo, Eick & Meyers, LLP 2 2 11/07/2018 Tax Reform Overview Abdo, Eick & Meyers, LLP 1 1 11/09/2018 Capital Asset Conversion Training Abdo, Eick & Meyers, LLP 2 2 11/14/2018 Government Audit: Taxes and Assessments Section Abdo, Eick & Meyers, LLP 3 3 11/14/2018 Government Audit: Understanding Long-Term Municipal Debt Abdo, Eick & Meyers, LLP 3 3 11/28/2018 Helping Clients Get Better Abdo, Eick & Meyers, LLP 2 2 11/29/2018 Municipal Audit: In-charge Responsibilities and Use of SMART Practice to Generate Audit Programs Abdo, Eick & Meyers, LLP 1.5 1.5 11/30/2018 Government Audit: Analytical Review Procedures Abdo, Eick & Meyers, LLP 1.5 1.5 11/30/2018 Governmental Audit: Payroll Auditing & Risk Factors Abdo, Eick & Meyers, LLP 4 4 12/03/2018 Inventory Observation Training Abdo, Eick & Meyers, LLP 0.5 0.5 12/06/2018 Governmental Standards Updates and Best Practices Seminar Abdo, Eick & Meyers, LLP 6 6 12/14/2018 City Council Presentation Skills Abdo, Eick & Meyers, LLP 1.5 1.5 01/03/2019 AEM All-Firm Connect More Conference Abdo, Eick & Meyers, LLP 5 5 01/11/2019 Government Audit XCM Process Training Abdo, Eick & Meyers, LLP 1 1 01/21/2019 GASB 75: OPEB Testing for Cities Abdo, Eick & Meyers, LLP 1 1 01/21/2019 Capital Assets Section Abdo, Eick & Meyers, LLP 3 3 01/26/2019 GASB 68 Workpaper Update Abdo, Eick & Meyers, LLP 2 2 04/12/2019 GASB 75: OPEB Workpaper for Cities Refresher Abdo, Eick & Meyers, LLP 1 1 04/19/2019 Municipal Quarterly Reporting Abdo, Eick & Meyers, LLP 3 3 04/26/2019 Municipal Advising Series 50 CPE and Municipal Budgeting Abdo, Eick & Meyers, LLP 4.5 4.5 05/03/2019 Arbitrage Reporting: Purpose. Process and People Abdo, Eick & Meyers, LLP 1.5 1.5 05/20/2019 Recent Frauds Occurring in Not-for-Profit Entities and Governments MNCPA 4 4 05/22/2019 2019 Ethics Seminar Abdo, Eick & Meyers, LLP 4 4 05/24/2019 QuickBooks Desktop 200 & 300 Abdo, Eick & Meyers, LLP 1.5 1.5 07/22/2019 OPEB Refresher: Schools Abdo, Eick & Meyers, LLP 1 1 08/23/2019 Charter School Audit: Grants Section Abdo, Eick & Meyers, LLP 3 3 10/29/2019 Government Audit: Solving Cash Differences Abdo, Eick & Meyers, LLP 2 2 11/07/2019 Setting Your 2020 Vision Abdo, Eick & Meyers, LLP 6 6 11/13/2019 AEM 200 Split Sheet: Developing a Beyond the Engagement Mindset Abdo, Eick & Meyers, LLP 1.5 1.5 12/16/2019 AEM FS Audit Preparation: Day 1 Abdo, Eick & Meyers, LLP 6 6 12/17/2019 AEM FS Audit Preparation: Day 2 Abdo, Eick & Meyers, LLP 6 6 12/18/2019 Audit Risk Assessment and Planning Abdo, Eick & Meyers, LLP 4 4 01/06/2020 AEM 100 All Firm Dliever More Conference Abdo, Eick & Meyers. LLP 4 4 05/28/2020 AEM 100 Metro Firms Ethical Webinar Abdo, Eick & Meyers. LLP 4 4 06/23/2020 AEM 200 Upstream Career Development Series: Effectively Manging Others, Sessions 1: Understanding Your Role Abdo, Eick & Meyers, LLP 0.5 0.5 06/24/2020 Benford's Law: A Valuable Audit Tool Business Professionals' Network, Inc.2 06/25/2020 Understanding Your Role in Managing Others Upstream Academy 1 07/27/2020 AEM 200 Upstream Career Development Series: Effectively Managing Others Session 2: The Art of Delegation Abdo, Eick & Meyers, LLP 0.5 0.5 08/06/2020 GOV 200: Charter School Grants Training Abdo, Eick & Meyers, LLP 2 2 08/21/2020 Communicate While Managing Upstream Academy 1 1 08/21/2020 AEM 200 Upstream Career Development Series: Effectively Managing Others, Session 3: Communicate While Managing Abdo, Eick & Meyers, LLP 0.5 0.5 09/28/2020 AEM 200 Upstream Career Development Series: Effectively Managing Others, Session 4: Successful Engagements Abdo, Eick & Meyers, LLP 0.5 0.5 12/14/2020 Effetive Goal Setting for Yourself and Others Upstream Academy 1 1 01/06/2021 AEM 100 All Firm Event - Managing 2021 Style Abdo, Eick & Meyers, LLP 1 1 05/19/2021 AEM 100 Current Issues in Business Ethics - 2021 Abdo, Eick & Meyers, LLP 4 4 06/02/2021 MNCPA Audits of Local Governments Conference MNCPA 3.5 3.5 1 8 TOTAL 66.5 16 38 13 133.5 ABDO, EICK & MEYERS MINNEAPOLIS, MINNESOTA CONTINUING PROFESSIONAL EDUCATION ATTENDANCE RECORD FOR JEFF HINES 13 © Abdo, Eick & Meyers, LLP | September 15, 2021 Erik Wagner Senior Associate erik.wagner@aemcpas.com Direct Line (952) 715.3012 Erik joined the Firm in 2019 as an Associate after obtaining his Bachelor’s Degree from Minnesota State University, Mankato. Prior to joining AEM full-time in 2019, Erik was a government intern during the 2017 and 2018 audit seasons. Education »Bachelor of Science in Accounting, Minnesota State University, Mankato »Continuing professional education Qualifications »Experience in auditing local governments and schools in Minnesota »Over 90 percent of billable time relates to governmental clients »Works extensively with Microsoft Office, as well as accounting software like Banyon and QuickBooks 14 Completion Date Activity Title Sponsor Gov't Audit Technical Non-Technical Ethics Total CPE 10/21/2019 MNCPA Audits of Local Governments Conference MNCPA 5.5 1.5 1 8 10/29/2019 Government Audit: Solving Cash Differences Abdo, Eick & Meyers, LLP 2 2 11/07/2019 Setting Your 2020 Vision Abdo, Eick & Meyers, LLP 6 6 11/14/2019 AEM 200 Split Sheet: Developing a Beyond the Engagement Mindset Abdo, Eick & Meyers, LLP 1.5 1.5 12/13/2019 A&A 100 Review Analytics Basics Abdo, Eick & Meyers, LLP 2 2 12/16/2019 AEM FS Audit Preparation: Day 1 Abdo, Eick & Meyers, LLP 6 6 12/17/2019 AEM FS Audit Preparation: Day 2 Abdo, Eick & Meyers, LLP 6 6 12/18/2019 Audit Risk Assessment and Planning Abdo, Eick & Meyers, LLP 4 4 01/06/2020 AEM 100 All Firm Dliever More Conference Abdo, Eick & Meyers. LLP 4 4 05/28/2020 AEM 100 Metro Firms Ethical Webinar Abdo, Eick & Meyers. LLP 4 4 06/23/2020 AEM 200 Upstream Career Development Series: Effectively Manging Others, Sessions 1: Understanding Your Role Abdo, Eick & Meyers, LLP 0.5 0.5 07/27/2020 Master the Art of Delegation Upstream Academy 1 1 07/27/2020 AEM 200 Upstream Career Development Series: Effectively Managing Others Session 2: The Art of Delegation Abdo, Eick & Meyers, LLP 0.5 0.5 08/06/2020 GOV 200: Charter School Grants Training Abdo, Eick & Meyers, LLP 2 2 08/21/2020 Communicate While Managing Upstream Academy 1 1 08/21/2020 AEM 200 Upstream Career Development Series: Effectively Managing Others, Session 3: Communicate While Managing Abdo, Eick & Meyers, LLP 0.5 0.5 09/28/2020 Manage Successful Engagements Upstream Academy 1 1 10/19/2020 Deal With Performance and Behavior Issues Upstream Academy 1 1 10/19/2020 AEM 200 Upstream Career Development Series: Effectively Managing Others, Session 5: Performance & Behavior Issues Abdo, Eick & Meyers, LLP 0.5 0.5 12/14/2020 Effective Goal Setting for Yourself and Others Upstream Academy 1 1 01/11/2021 Avoid the Traps in Managing Others Upstream Academy 1 1 01/11/2021 Effectively Manaing Others Abdo, Eick & Meyers, LLP 0.5 0.5 05/19/2021 Current Issues in Business Ethics - 2021 Abdo, Eick & Meyers, LLP 4 4 TOTAL 21.5 6 21.5 9 58 ABDO, EICK & MEYERS MINNEAPOLIS, MINNESOTA CONTINUING PROFESSIONAL EDUCATION ATTENDANCE RECORD FOR ERIK WAGNER 15 © Abdo, Eick & Meyers, LLP | September 15, 2021 Government Experience You can have confidence in our 57 years of quality auditing services and partnership in the government space. Since 1963, we’ve served cities just like yours. With an unwavering commitment to streamlining processes, training staff, and finding technology-based solutions, we proudly offer excellence in city auditing. Out of our 160-strong, talented staff, over 40 team members are 100% focused on government clients, including services for over 100 cities and various municipalities. By serving cities across Minnesota, we have become experts in the nuances of how to best support your City. Our expertise affords you an audit experience that’s painless. We do this by communicating up front, coming better prepared, and being available throughout the year to support you. Process Our methods are centered around incorporating technology to deliver unparalleled solutions for government organizations. In addition to our audit experience, our firm expertly performs outsourcing for governments giving us a wealth of experience in a finance director role. We don’t believe in a one- size-fits-all mentality, so together we’ll focus on the needs that are relevant to your city and provide the right services to meet them with a tailored audit approach. We’re focused on efficiency and deliver the draft reports within 3 weeks of completing fieldwork is completed bringing you accuracy and value. Focus Through continuous training and growth opportunities, we’ve established an environment with a focus on serving local governments. We spend more than 100 hours training and onboarding to ensure success for our clients. We truly hope that you allow us to be your partner. Together, we’ll go beyond the numbers to best support your City. Our Qualifications »GFOA and MnGFOA Association members »We speak and train on government accounting and auditing topics »Audit services for over 100 cities »We’ve assisted many cities in preparing for the GFOA’s Certificate of Achievement for Excellence awards in financial reporting »Our clients represent top tier governments with 19 municipal clients receiving the GFOA’s Certificate of Achievement for Excellence in Financial Reporting »Audit services for EDA’s and HRA’s 16 © Abdo, Eick & Meyers, LLP | September 15, 2021 Audit Approach Step 1 Step 2 Step 3 Step 4 Client Understanding Audit Strategy Design Audit Plan Execution Audit Completion Audit Services That Move City of Hopkins Beyond the Numbers We deliver auditing services that are more than just a compliance service. We exceed what’s considered “standard audit support,” placing a strong emphasis on a relationship-driven approach that facilitates a partnership with your City. We work together to ensure we have a clear understanding of your City’s needs, challenges and financial information. Together with your City’s team, we’ll help to leverage this information to increase efficiency and effectiveness. Partnership Integral to our mission is a philosophy that we help cities reach their maximum potential through open communication and teamwork. We enjoy answering questions any time of the year, and at no cost! We also believe in: »Consistent, clear, proactive communication that offers suggestions and makes your work easier. »Returning phone calls and questions promptly. »Gathering information through dialog, not checklists. »Conducting listening calls with you outside of the engagement to understand your City, build a long- term relationship with you and learn how we can improve. People Our value comes from our experience and the education we can provide. Our professionals go beyond the required standards to make sure we have a clear understanding of your City. We work with your management team to leverage this information to increase efficiency and profitability. You can learn more about your audit team in the team section. Process While we will audit the financial statements of your City for the years ended December 31, 2021, 2022, 2023, 2024, and 2025, in accordance with the applicable regulatory standards, our process is designed to go far beyond that. Our process enables us to gain a thorough understanding of the processes, procedures, and general operations of your City. 17 © Abdo, Eick & Meyers, LLP | September 15, 2021 Client Understanding Your leadership team plays an important role in your financial reporting. We always begin our process with a face-to-face conversation to gain a thorough understanding of your City, internal controls, processes and procedures. Our experience with cities like yours allows us to develop a customized audit and communications plan. We will prepare an audit timeline detailing significant steps in the audit process from beginning to end. Audit Strategy Design Your City is unique and therefore your audit plan will be tailored to your operations and will include the relevant and appropriate standards. Your audit strategy is based on our understanding of your City. It will also encompass: »Leadership concerns and expectations »Risk Assessment »Testing »Understanding of internal controls Audit Plan Execution Our execution of your audit strategy begins with fieldwork and ends with a presentation of your draft financial statements. Your team, including partners and managers, will be present during fieldwork and we’ll be in continuous communication with your staff. Fieldwork is where we document internal controls, conduct walkthroughs, and obtain audit evidence to support financial statement amounts and disclosures. Our paperless audit approach allows us to do much of the fieldwork from our office. We will discuss your preference for the amount of onsite work and agree on a mutually beneficial schedule. During fieldwork, we will discuss any potential audit adjustments with your staff to ensure we agree on the need for the audit adjustment and amount. We will also address any potential internal control deficiencies to verify our understanding and discuss potential solutions. We want to be problem solvers, not problem reporters. After reviewing the financial statements, notes and supplementary schedules, if any, we will provide any recommendations coming from our internal review. We will also send a list of audit adjustments (if any) noting the reasons for each adjustment. Audit Approach (continued) 18 © Abdo, Eick & Meyers, LLP | September 15, 2021 Audit Completion After the previous segments mentioned are complete, we will be ready to finalize the audit. We will report the results of your audit to the finance committee or any other group desired. We will also deliver a management letter that identifies critical financial trends and recommendations for improvement, provides required communications, and discusses changes in the environment in which your City operates. During this stage we will also complete the following procedures: »Complete subsequent events review procedures and review legal and representation letters »Complete final overall analytical review procedures »Communicate significant deficiencies and material weaknesses »Conduct an exit conference »Issue an audit opinion Additional Approach Details Analytical Procedures Analytical procedures are defined in Statement on Auditing Standards No. 56, “Analytical Procedures” as evaluations of financial information made by a study of plausible relationships around both financial and non-financial data. They are required in the planning and final review stage, but our firm encourages staff to use in substantive testing where possible. Our firm management directs the use of analytical procedures as follows: Planning The objective for analytical procedures at this stage is to direct attention to likely misstatements. We use trend analysis to meet our objective in planning. Examples of trend analysis would be a comparison to the budget for funds that adopt a budget and/or comparison to prior year. We also may consider a comparison among three to five years. Additional testing may result if the expectations established at the start of the trend analysis are not met. Substantive Testing The objective of analytical procedures at this stage is to support or refute financial statement account balances. We have found that analytical procedures are more efficient and can be more effective than tests of details. Depending on the make-up of the account, we will use trend analysis, ratio analysis and/or modeling. Final Review The objective is to review the reasonableness of financial statement account balances. We use trend analysis to meet our objectives. This trend analysis is completed on final audited amounts. Audit Approach (continued) 19 © Abdo, Eick & Meyers, LLP | September 15, 2021 Additional Approach Details (continued) Approach to be Taken to Gain and Document an Understanding of the Organization’s Internal Control Structure Our goal in preliminary fieldwork is to gain a thorough understanding of your internal controls, processes, and procedures. The completion of these elements allows us to minimize the fieldwork required to complete the audit. Approach to be Taken in Determining Laws and Regulations Subject to Audit Test Work We are required to obtain an understanding of the possible financial statement effect of laws and regulations that have a direct and material effect on the determination of financial statement amounts. The determination of laws and regulations are addressed in the planning stage through reading available grant documentation, client inquiries, and a preliminary review of finance system accounts and search of the City Council minutes. We also have a working knowledge of the types of laws and regulations Minnesota governments operate under. Further discussion is provided in the section Firm Qualifications and Experience. In addition, we obtain further information about federal laws and regulations through the Catalog of Federal Domestic Assistance (CFDA) and the U.S. Office of Management and Budget (OMB) Compliance Supplement. Approach to be Taken in Drawing Audit Samples for Purposes of Tests of Compliance Since each program or grant agreement is different, we use a variety of statistical designs in our compliance testing. The size of the sample considers many program factors; size, maturity, complexity, level of oversight and prior audit findings. Ultimately, our professional judgment determines that a representative number of transactions have been selected. You can be confident in our judgment because only senior level (partner, president, manager, and supervisor) staff makes decisions on planned compliance testing. Identification of Anticipated Potential Audit Problems At this time, we do not anticipate any potential audit problems. If problems did arise, we carefully work with the Organization to resolve the matter. Audit Approach (continued) 20 © Abdo, Eick & Meyers, LLP | September 15, 2021 We believe technology should enhance our service offerings, making our work less intrusive, our time with you more productive and everyone’s data more secure. The use of technology in our audit services enables us to streamline our processes and helps to automate certain functions of our work so we are able to spend more time analyzing our results and working directly with you. Through the outbreak of COVID-19, our team has been able to seamlessly move to a completely remote work environment with no loss of productivity, cooperation, or communication. Since March 17, 2020, our staff has been successfully conducting remote audits using the latest video conferencing and secure file sharing technology. Through Zoom, Microsoft Teams, or whatever technology your organization may use, our team will continue to work through normal procedures, including regular meetings with you during the fieldwork phase to ensure effective collaboration with your team. We take the security of our client's data -and our own -very seriously. A number of systems are in place to ensure the safety of your City’s data. We operate in a completely remote hosted environment. This not only allows our staff to securely work from any computer, anywhere, any time, but also provides large-scale, cutting edge technology and security for your data. Your data is housed in a secure data warehouse, not on laptops or local servers which could be stolen or misplaced It also means: »All firm staff use dual authentication to ensure that every login to our remote environment is secure and authorized. »All data is saved on redundant servers so if one server fails, another immediately takes over with no data lost. »All data is backed up continually which means we always have an extra copy for safe-keeping. »All incoming emails and embedded links are scanned for viruses prior to landing in our inbox, which allows us to operate with more protection from phishing emails, malware attacks, and other digital threats. Our remote host vendor works exclusively with public accounting firms like ours and their client base includes approximately 300 firms. They maintain a Service Organization Control 2 (SOC 2) report covering their organizational controls over security, processing integrity, etc. This report is available for your review upon request. Technology 21 © Abdo, Eick & Meyers, LLP | September 15, 2021 Service Timeline We prepare a timeline each year for our audits. Timelines are based on when City staff are able to complete their necessary year-end work. Please see below for an anticipated timeline that identifies what you can expect, and when. Once hired we will work with you on an exact timeline that fits your needs. This is an example of a typical timeline. Additionally, the table below outlines our proposed segmentation of the engagement. October Client Understanding Together, we mutually agree with management on a timeline to perform the audit. December Planning & Interim Fieldwork We will select our sample and provide information requests to management. We will gain an understanding of internal controls. April Year-end Audit & Fieldwork We will conduct fieldwork using our outlined audit approach. We estimate this process to be for 4-5 days. June Reporting We will provide drafted materials and meet with key management, followed by a report presented to the Council in a meeting. Hours Date / Segment Partner Manager Accounting Staff Support Staff Total December Preliminary Fieldwork 4 5 24 1 34 April Fieldwork 18 46 125 3 192 May Report Preparation/Review 3 5 13 6 27 May Exit Conference & Draft Discussion 1 1 --2 June Presentation at Council Meeting 1 1 --2 TOTAL HOURS 27 58 162 10 257 22 © Abdo, Eick & Meyers, LLP | September 15, 2021 Value We at AEM help our clients improve their city and achieve their financial goals. We heard you say that the following factors were important in our relationship: »Completing work in advance of due dates by creating a schedule of work agreed upon by AEM and the City »Providing excellent communication throughout the audit process »Meeting regularly throughout the year to stay on top of industry trends and work together to achieve your goals »Having great managers and partners you can reach out to if any questions come up throughout the year We will provide services that deliver on these factors that are important to you. Our fees range from $100 to $404 per hour based upon the experience and level of the individuals to be assigned to perform the audit. Fees are also based on the assumption that your city’s staff will be assisting us whenever possible with audit schedules. W e will provide a detailed audit plan and prepare a list of requested schedules upon proposal acceptance. We do not believe in charging for phone calls, emails, or routine communications. Instead, we encourage clients to call us for questions, advice, or just update us on what is happening in their city throughout the year. We want to be a resource for you – without any worry about whether or not the meter is running. When our communications identify additional service needs, we’ll discuss these needs with you and provide an additional fee range as needed. We have not anticipated any additional hours for new audit or accounting standards. Accounting or audit standard changes may result in increased hours. A complete summary of professional fees can be found in the separate Dollar Cost Proposal. 23 © Abdo, Eick & Meyers, LLP | September 15, 2021 What Our Clients Say Client References One of the things we enjoy most about our work is developing long-term relationships with our clients and watching their city thrive as we help them to evolve and grow. Our clients listed below serve as a sample of references of those we partner with for their audit services. All have partner, manager or supervisor staffing for the fieldwork process and have received the Certificate of Achievement for Excellence in Financial Reporting Award. Additional references are available upon request. City of White Bear Lake Kerri Kindsvater 651-429-8517 Audit year 2020 –200 Hours (includes Single Audit) Engagement partner: Brad Falteysek City of Inver Grove Heights Amy Hove 651-450-2521a Audit year 2020 –265 Hours (includes Single Audit) Engagement partner: Brad Falteysek City of Savage Julie Stahl 952-882-2691 Audit year 2020 –250 Hours (includes Single Audit) Engagement partner: Brad Falteysek Abdo, Eick & Meyers have been valued service providers and a fantastic resource to the City of Red Wing over the past 10 years. City leadership views Abdo, Eick & Meyers not only as our auditors but as trusted and capable financial advisors and educators. They are staffed with experienced personnel who provide consistent, timely, and excellent service. They have been instrumental in improving the City’s external financial reporting and assisting us in being awarded the GFOA’s Certificate of Excellence in Financial Reporting. The entire team at Abdo, Eick & Meyers have been an integral part of our success at the City of Red Wing. City of Red Wing Marshall Hallock Finance Director 24 © Abdo, Eick & Meyers, LLP | September 15, 2021 License & Independence Licensed to Practice in Minnesota The Firm and its entire CPA staff hold licenses to practice in the state of Minnesota. All licenses are in good standing. The Firm and several partners and staff are licensed in other states and also are in good standing. The Firm’s CPAs are all members in good standing with the Minnesota Society of CPAs and the AICPA. Our professional staff and membership in professional associations indicates that the services we provide to your City will be of the highest quality. Independence Our standards require that we be without bias with respect to your operations. The Firm is independent of the City as defined by auditing standards generally accepted in the United States of America. The Firm has not been engaged by the City or any of its agencies, component units or oversight units for the past five years, except for the Hopkins Fire Department Relief Association. We are engaged as the auditor for the Relief Association. Because the Firm is required to follow GAO independence standards mentioned in the previous paragraph, any prior relationships would not constitute any conflicts of interest relative to performing the proposed audits. Also, the Firm shall give the City written notice of any relevant professional relationships entered into during the period of this agreement. The Firm is a member of the American Institute of Certified Public Accountants Division of Firms and has received an unmodified opinion on its Peer Review. Our Peer Review was completed in 2020 and resulted in a pass rating. A copy of this letter can be found in Appendix B. The Firm has not had any federal or state desk reviews or field reviews of its audits in the last three years. We have had no disciplinary action taken or pending against the Firm during the past three years with state regulatory bodies or professional organizations. We maintain library facilities which include current professional literature and specific information for the industries that we serve. The Firm library is also reviewed as part of the external quality review program. The Firm has in-house training programs specific to the industries we serve in order to maintain a knowledge-base relevant to our unique clients. We also perform auditing and accounting updates for our clients that are organized by our staff. These practices ensure the quality of our staff over the term of engagement. 25 © Abdo, Eick & Meyers, LLP | September 15, 2021 Why Partner with AEM AEM. Your Partner to Financial Success. We're here because our clients need solutions to their challenges--not a commodity product. Through our dedication to teamwork, development and relationships, we help our clients thrive. Our investment into People + Process makes a big difference for you and your City’s future. We focus on the challenges and needs that are relevant to your City. This allows us to be thoughtful in our approach to providing you with the best solutions, and leaves you assured in the value of our deliverable. The Firm, established in 1963, has a professional staff of more than 150 in its Edina and Mankato offices. The two offices serve clients of all sizes and industries. Our services include audits, reviews and compilations, monthly accounting, tax planning and preparation, management advisory services and Human Resources outsourcing. In addition, Abdo, Eick & Meyers is recognized as one of the Top 150 firms in the United States and the 10th largest firm in Minnesota. We Listen. We Engage. We Deliver. You’ll know you’re in the right hands throughout the entire engagement process. And with our commitment to your unique needs, you can be sure that you’ll receive great value that is worthy of your invested time. Active engagement with DFK International and domestic industry associations allows us to provide maximum value to your City. Combining our client-centric approach, our internal expertise and technological resources with what we’ve learned about your City allows us to deliver a solution that exceeds your expectations. City of Hopkins Services That Move Beyond the Numbers 26 © Abdo, Eick & Meyers, LLP | September 15, 2021 At Abdo, Eick & Meyers, LLP, we recognize the need for continuous improvement in diversity, equity and inclusion initiatives throughout our firm and the accounting industry at large. We believe that when we understand each other better, we grow better together. Through our annual Affirmative Action reporting, we identify areas where improvement is needed and take steps to address these areas. Over the past year, we have increased our efforts to promote diversity, equity, and inclusion within our firm and community through implicit/unconscious bias, anti-harassment, and interview training. In 2021, our Diversity, Equity, and Inclusion Committee looks forward to implementing a full scope of ideas, projects, and initiatives to move our firm forward through learning, understanding, and improving on these issues. We have increased our number of women at the highest leadership level in recent years, with the last four additions to our partner group being female. We strive for continued growth in our ability to attract and retain women and people of color within our firm and we are working towards greater equity and diversity for all within our industry. In order to build a more inclusive work environment, the firm has implemented diversity and inclusion education and have required all employees to attend a series of monthly sessions provided by the Greater Mankato Diversity Council. A video training resource on the topic of empathy is also being developed for further employee education and awareness. Additional DEI initiatives are listed on the following page. Please let us know if you have any questions or concerns regarding our DEI activity or have additional ideas on how we can improve diversity, equity, and inclusion at Abdo, Eick & Meyers. 56.8%42.9%10.5% of our Employees are Female of our Management Level Employees are Female of our 2021 Interns were people of color (industry average: 47%) (industry average: 23%) [ Source: AICPA 2019 Trends Report ] Diversity, Equity & Inclusion 27 © Abdo, Eick & Meyers, LLP | September 15, 2021 In 2020, the firm applied to be a co-sponsor for the AICPA PCPS George Willie Ethnically Diverse Student Scholarship & Internship, which allows 10 ethnically diverse accounting students the opportunity to be awarded internships with a firm that has been selected by the AICPA as co-sponsors of the program. Earlier this year, we found out that we were one of 10 firms in the nation to be selected as a co-sponsor for 2022. As a co-sponsor, we will host an ethnic minority accounting student to work alongside our CPAs and advisors during the 2022 internship season. For years, Minnesota State University, Mankato has been the primary university we recruit from for our summer program participants and interns. Recently, we met with the leaders of the newly formed National Association of Black Accountants chapter at Minnesota State University, Mankato and elected to be a sponsor for the 2021- 2022 academic year. We believe this partnership is a starting point towards increasing the diversity of our future summer program participants and interns. We are committed to the continued support and advancement of women in our firm and in our communities and one of the ways we do this is through partnership with YWCA Mankato, an organization that is continually empowering women in our communities to enhance their individual strengths and build leadership skills. In 2020, we were proud to be a sponsor of the Elizabeth Kearney Women's Leadership Program and we continue to be an annual attendee of the Women's Leadership Conference –which was held virtually last year with great success! In 2021, we celebrated International Women's Day with the Edina Chamber of Commerce as the sponsor of the Healing & Moving Forward Together webinar -part of their Women Inspiring Leadership & Learning (W.I.L.L.) series. Attendees heard from Jasmine Stringer -speaker, lifestyle expert, and author -as she guided us through how to communicate, be a better ally, and become connected, informed and engaged in support of our colleagues of color within the workplace and the community. Diversity, Equity & Inclusion –Additional Initiatives 28 © Abdo, Eick & Meyers, LLP | September 15, 2021 Value Added Services When you partner with AEM, you get access to our entire catalog of services. Below is a selection of the services that we believe could be of great value to your City. If you have need of these services, please reach out to us so we can help! Our additional service offerings can be found at www.aemcpas.com. HR & Payroll Services We help employers better support their most valuable resource... their people. Having clear and consistent HR practices that best suit the individuality of your bank is key, even more so in today’s tight employment environment. And because the right policies are just as important, we lend our HR expertise to help you strategically plan for your future. We help cities with: »Employee management and development »Regulatory compliance »Benefits analysis and administration, including the Affordable Care Act (ACA) and workers’ compensation »HR/Payroll software implementation and management »Advisory services such as specialized labor cost analysis, compensation studies, and HR process development and implementation Technology & Data Solutions Empowering you with advanced data analytics & insights. Data is one of your City’s most powerful assets. Using it to your advantage, however, can be a challenge. Our Technology and Data Solutions are designed to give you the information you need—how, when, and where you need it. Our consultants leverage a powerful mix of technology and tools to support you with the data analytics and insights you need. From creating user-friendly dashboards and reports to managing software implementations, we deliver solutions that work for you. We help cities with: »Strategic data analytics »Software solutions: evaluation, selection & implementation »Financial reporting solutions »Automation solutions 29 © Abdo, Eick & Meyers, LLP | September 15, 2021 Value Added Services (continued) Process Solutions “Because we’ve always done it this way” is an easy trap to fall into. But outdated processes or systems rarely get results. Instead, they often lead to redundancies, unreliable outcomes, and frustrated staff. An ineffective process can become your Achilles heel in a crisis. Our customized process improvement solutions will meet you where you are —and guide you to a better tomorrow. Our Process Solutions Services Include: »Process Mapping Documentation --How do transactions and data flow through your City? »AEM ProEval --Removing waste in your processes allows your team members to focus on what they were hired to do—and to spend more time on value-added initiatives. »AEM ProEval -Kaizen --Does the project seem too large, or the change too overwhelming? The Kaizen approach is a pared–down version of our ProEval service. Instead of a full operational review, we’ll focus on one aspect of your operations. »Software Inventory & Assessment –Including recommendations for increasing efficiency and, if possible, reducing software-related costs. 30 Appendix A © Abdo, Eick & Meyers, LLP | September 15, 2021 1.Proposer warrants that it is willing and able to comply with State of Minnesota Laws with respect to foreign (non-State of Minnesota) corporations. 2.Proposer warrants that it is willing and able to obtain an “errors and omissions” insurance policy providing a prudent amount of coverage for the willful or negligent acts, or omissions of any officers, employees or agents thereof. 3.Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the prior written permission of the City of Hopkins, Hopkins Minnesota. 4.The proposer certifies that it can and will provide and make available at a minimum, all services set forth in Section II, Nature of Services Required. 5.Proposer warrants that all information provided in this proposal is true and accurate. Signature of Official Name (typed)Brad Falteysek Title Partner Firm Abdo, Eick & Meyers, LLP Date September 15, 2021 Proposer Guarantees & Warranties Appendix B Appendix C City of Sample 20xx Financial Statement Audit Sample Introduction Audit Opinion and Responsibility General Fund Results Other Governmental Funds Enterprise Funds Ratios 2 Sample Audit Results Auditor’s Opinion Minnesota Legal Compliance 3 Sample Audit Results 2018 Audit Findings •Legal Compliance Finding Liquor Store Transfers 4 Sample General Fund - Fund Balances 50.0%49.4%49.1%51.3%49.4% $12,932,561 $13,406,613 $13,768,216 $14,160,066 $14,456,520 $15,581,996 35%35%35%35%35% $- $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 2014 2015 2016 2017 2018 2019 Unassigned Fund Balance Budget Fund Balance Policy 5 Sample General Fund Budget to Actual Actual Variance with Original Final Amounts Final Budget Revenues 14,255,020$ 14,400,314$ 15,454,557$ 1,054,243$ Expenditures 14,456,520 14,943,984 14,706,435 237,549 Excess of Revenues Over Expenditures (201,500) (543,670) 748,122 1,291,792 Other Financing Sources (Uses) Sale of capital assets 1,500 1,500 2,040 540 Transfers in 200,000 338,000 338,000 - Transfers out - - (740,000) (740,000) Net Change in Fund Balances - (204,170) 348,162 552,332 Fund Balances, January 1 7,452,744 7,452,744 7,452,744 - Fund Balances, December 31 7,452,744$ 7,248,574$ 7,800,906$ 552,332$ Budgeted Amounts 6 Sample General Fund Revenues by Type $- $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 Taxes Licenses and Permits Intergovernmental Charges for services Other 2016 2017 2018 7 Sample General Fund Expenditures by Type $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 General government Public safety Culture and recreation Public works Other 2016 2017 2018 8 Sample Capital Projects Fund Balances $(6,000,000) $(4,000,000) $(2,000,000) $- $2,000,000 $4,000,000 $6,000,000 $8,000,000 Nonspendable Restricted Assigned Unassigned 2016 2017 2018 9 Sample Special Revenue Fund Balances $(1,000,000) $(500,000) $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 Nonspendable Restricted Committed Unassigned 2016 2017 2018 10 Sample Debt Service Funds Total Total Bonds Year of Cash Assets Outstanding Maturity General Obligation Bonds 2006C/2017B Recreation Refunding 408,866$ 412,285$ 1,245,000$ 02/01/2022 2009A G.O. Street Reconstruction/CIP 469,381 524,214 2,275,000 02/01/2025 2010A G.O. Build America Bonds 829,642 881,953 2,505,000 02/01/2026 2010D Improvement and Refunding 558,582 1,243,134 695,000 03/01/2019 2011A G.O. Street Reconstruction/CIP 615,928 734,074 2,990,000 02/01/2027 2012A G.O. Bonds 100,502 361,411 2,440,000 02/01/2028 2013A G.O. Bonds 554,932 781,658 3,565,000 02/01/2029 2013B G.O Refunding 413,227 525,717 248,000 02/01/2021 2014A G.O. Bonds 667,833 773,884 2,345,000 02/01/2030 2014B Advance Refunding 925,313 925,313 4,890,000 02/01/2027 2015A G.O. Obligation 636,157 900,503 3,450,000 02/01/2031 2015B Crossover Refunding 617,699 725,401 1,800,000 02/01/2022 2016A G.O. Street Improvement 389,273 422,562 3,045,000 02/01/2032 2017A G.O. Street Improvement 647,838 1,741,101 3,095,000 02/01/2033 2018A G.O. Street Improvement 435,797 435,797 3,200,000 02/01/2034 2018B G.O. Refunding (2007B/2008A)250,863 378,019 1,220,000 02/01/2024 Capital lease 29,338 29,338 1,385,000 02/01/2029 Debt Service Revolving Fund 802,536 2,407,528 - Total Debt Service funds 9,353,707$ 14,203,892$ 40,393,000$ Total Remaining Interest Payments 7,423,721$ Debt Description 11 Sample Debt Service Funds $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Principal Interest 12 Sample Water and Sewer Fund - Cash Flows from Operations and Cash Balances $- $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 2015 2015 2016 2016 2017 2017 2018 2018 Operating costs Debt payments Operating receipts $8,328,601 $7,240,177 $7,936,293 $6,685,909 $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 2015 2016 2017 2018 Unrestricted Cash Minimum target balance (six months of operating costs plus debt service) 13 Sample Storm Water Fund - Cash Flows from Operations and Cash Balances $- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 $2,000,000 2015 2015 2016 2016 2017 2017 2018 2018 Operating receipts Debt payments (including related transfers)Operating costs $5,815,470 $5,750,497 $5,016,037 $5,405,770 $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 2015 2016 2017 2018 Unrestricted Cash Minimum target balance (six months of operating costs plus debt service) 14 Sample Municipal Liquor Store Fund - Change in Net Position and Cash Balances Total Total Total Sales 3,719,308$ 100.0 %4,794,923$ 100.0 %5,239,748$ 100.0 % Cost of Sales 2,873,784 77.3 3,710,540 77.4 4,105,625 78.4 Gross Profit 845,524 22.7 1,084,383 22.6 1,134,123 21.6 Other Revenue 84,426 2.3 92,865 1.9 101,532 1.9 Operating Expenses (994,530) (26.7) (1,171,384) (24.4) (1,080,836) (20.6) Operating Income (Loss)(64,580) (1.7) 5,864 0.1 154,819 2.9 Nonoperating Revenues 368 - - - - - Nonoperating Expenses (41,963) (1.5) (79,333) (2.1) (12,658) (0.3) Change in Net Position (106,175)$ (3.2) %(73,469)$ (2.0) %142,161$ 2.6 % Cash Balance (55,892)$ (408,095)$ (293,021)$ 2016 2017 2018 Percent Percent Percent 15 Sample Municipal Liquor Store Fund - Comparative Analysis of Operations and Cash Balances Sales 100.0 %100.0 %100.0 % Cost of Sales 74.3 75.6 75.9 Gross Profit 25.7 24.4 24.1 Operating Expenses 17.6 26.1 24.0 Operating Income 8.1 (1.7) 0.1 Nonoperating Revenue (Expense)- (1) (1.6) Income Before Transfers 8.1 %(2.8) %(1.5) % Source: Analysis of Municipal Liquor Store Operations, for the year ended December 31, 2017. Published by the Minnesota Office of the State Auditor of Sales of Sales of Sales 2015 2016 2017 Percent Percent Percent Off Sale Only Stores $(73,707)$(55,892) $(408,095) $(293,021) $(450,000) $(400,000) $(350,000) $(300,000) $(250,000) $(200,000) $(150,000) $(100,000) $(50,000) $- 2015 2016 2017 2018 Cash Balances 16 Sample Street Light Fund - Cash Flows from Operations and Cash Balances $- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 2015 2015 2016 2016 2017 2017 2018 2018 Operating costs Operating receipts $295,016 $332,206 $328,891 $319,692 $- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 2015 2016 2017 2018 Unrestricted Cash Minimum target balance (six months of operating costs) 17 Sample Sports Center Fund - Cash Flows from Operations and Cash Balances $- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 $1,000,000 2015 2015 2016 2016 2017 2017 2018 2018 Operating costs Debt payments (including related transfers)Operating receipts $128,597 $1,454 $4,050 $966 $(10,000) $10,000 $30,000 $50,000 $70,000 $90,000 $110,000 $130,000 $150,000 2015 2016 2017 2018 Unrestricted Cash Minimum target balance (six months of operating costs and debt service) 18 Sample Cash and Investments Balances by Fund Type $48,179,243 $44,146,081 $43,520,280 $- $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 2016 2017 2018 General Fund Capital Projects Funds Special Revenue Funds Debt Service Funds Enterprise Funds Internal Service Fund 19 Sample Key Ratios 2015 2016 2017 2018 43.5%44.0%43.9%N/A 55.2%55.5%55.0%N/A 51.7%49.9%47.8%47.1% 0.0% Class 2 Cities Cities in County City of Sample 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Tax Rates 2015 2016 2017 2018 $502 $519 $542 N/A $527 $536 $559 N/A $560 $559 $565 $567 $- Class 2 Cities Cities in County City of Sample $100 $200 $300 $400 $500 $600 Taxes Per Capita 20 Sample Key Ratios 2015 2016 2017 2018 $1,148 $1,233 $1,208 N/A $2,192 $2,194 $1,978 N/A $2,505 $2,065 $1,952 $1,725 $- Class 2 Cities Cities in County City of Sample $500 $1,000 $1,500 $2,000 $2,500 $3,000 Debt Per Capita 21 Sample Key Ratios 2015 2016 2017 2018 $631 $638 $666 N/A $506 $510 $544 N/A $431 $458 $466 $483 $- Class 2 Cities Cities in County City of Sample $100 $200 $300 $400 $500 $600 $700 Current Expenditures Per Capita 2015 2016 2017 2018 $288 $287 $269 N/A $319 $461 $313 N/A $244 $412 $319 $282 $- Class 2 Cities Cities in County City of Sample $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 Capital Expenditures Per Capita 22 Sample Key Ratios General Government Public Safety Public Works Culture and Recreation Community Development Capital Outlay Transfers Out $106 $280 $103 $97 $40 $269 $123 $131 $232 $81 $79 $17 $313 $211 2017 Class 2 Cities 2017 Cities in County City of Sample $91 $217 $82 $60 $33 $282 $117 $- $50 $100 $150 $200 $250 $300 $350 Expenditures by Program Per Capita Taxes Special Assessments Licenses and Permits Inter- governmental Charges for Services Fines and Forfeitures Interest on Investments Miscellaneous Transfers In $542 $55 $45 $150 $111 $8 $12 $26 $144 $559 $53 $41 $113 $92 $5 $7 $43 $224 2017 Class 2 Cities 2017 Cities in County City of Sample $567 $41 $38 $66 $36 $4 $12 $34 $134 $- $100 $200 $300 $400 $500 $600 Per Capita Revenues by Source 23 Sample Tax | Accounting + Audit | Consulting Dollar Cost Proposal For: City of Hopkins 1010 First Street South Hopkins, Minnesota 55343 Proposed by: Brad Falteysek, CPA Partner | Abdo, Eick & Meyers, LLP brad.falteysek@aemcpas.com Direct Line (952) 715-3004 Abdo, Eick & Meyers, LLP Edina 5201 Eden Avenue, Suite 250, Edina, Minnesota 55436 Office: (952) 835-9090 / Fax: (952) 835-3261 Mankato 100 Warren Street, Suite 600, Mankato, Minnesota 56001 Office: (507) 625-2727 / Fax: (507) 389-9139 September 15, 2021 © Abdo, Eick & Meyers, LLP | September 15, 2021 Schedule of Professional Fees and Expenses for the Audits of the 2021-2025 Financial Statements City of Hopkins Hours Standard Hourly Rates Quoted Hourly Rates Total Partners 27 $ 404 $ 210 $ 5,670 Managers 58 236 153 8,874 Supervisory Staff -0--0--0--0- Staff 164 184 138 22,632 Other People 8 105 105 840 Expenses (4 printed reports)300 Rounding (316) Total all-inclusive maximum price for 2021 audit $ 38,000 Total all-inclusive maximum price for 2022 audit $ 38,800 Total all-inclusive maximum price for 2023 audit $ 39,500 Total all-inclusive maximum price for 2024 audit $ 40,300 Total all-inclusive maximum price for 2025 audit $ 41,100 Single Audit Cost (A-133), if required for 2021 $ 4,300 Single Audit Cost (A-133), if required for 2022 $ 4,400 Single Audit Cost (A-133), if required for 2023 $ 4,500 Single Audit Cost (A-133), if required for 2024 $ 4,600 Single Audit Cost (A-133), if required for 2025 $ 4,700 2