HomeMy WebLinkAboutP-22-017 Hudson Henderson Company Inc..pdf
333 W. Pontiac Way, Clovis, CA 93612 / (559) 600-7110
* The County of Fresno is an Equal Employment Opportunity Employer *
County of Fresno
INTERNAL SERVICES DEPARTMENT
Facilities • Fleet • Graphics • Purchasing • Security • Technology
PROCUREMENT AGREEMENT
Agreement Number P-22-017
January 11, 2022
Hudson Henderson & Company, Inc.
7473 N. Ingram Ave., Suite 102
Fresno, CA 93711
The County of Fresno (County) hereby contracts with Hudson Henderson & Company, Inc. (Contractor) to
provide CAL-ID/RAN Board Financial Statement Audit Services in accordance with the text of this
agreement, Attachment “A”, County of Fresno Request for Quotation No: 22-016 and the attached
contractors response to County of Fresno Request for Quotation No: 22-016 by this reference made a part
hereof.
TERM: This Agreement shall become effective January 1, 2022 and shall remain in effect through
December 31, 2025.
EXTENSION: This Agreement may be extended for two (2) additional one (1) year periods by the mutual
written consent of all parties.
MINIMUM ORDERS: Unless stated otherwise there shall be no minimum order quantity. The County
reserves the right to increase or decrease orders or quantities.
CONTRACTOR'S SERVICES: Contractor shall perform the services as described in Attachment “A”
attached, at the rates set forth in Attachment “A”.
ORDERS: Orders will be placed on an as-needed basis by County of Fresno, Auditor-Controller/ Treasurer-
Tax Collector (ACTTC) under this contract.
PRICES: Prices shall be firm for the contract period. Any pricing changes which may take place during the
life of the contract must be submitted in writing to the County of Fresno Purchasing Manager and received no
less than thirty (30) days prior to becoming effective.
MAXIMUM: In no event shall services performed and/or fees paid under this Agreement be in excess of
forty-eight thousand and nine hundred dollars ($48,900.00).
ADDITIONAL ITEMS: The County reserves the right to negotiate additional items to this Agreement as
deemed necessary. Such additions shall be made in writing and signed by both parties.
DELIVERY: The F.O.B. Point shall be the destination within the County of Fresno. All orders shall be
delivered complete as specified. All orders placed before Agreement expiration shall be honored under the
terms and conditions of this Agreement.
DEFAULT: In case of default by Contractor, the County may procure the articles/services from another
source and may recover the loss occasioned thereby from any unpaid balance due the Contractor or by any
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January 11, 2022
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other legal means available to the County. The prices paid by County shall be considered the prevailing
market price at the time such purchase is made. Inspection of deliveries or offers for delivery, which do not
meet specifications, will be at the expense of Contractor.
INVOICING: An itemized invoice shall be sent to requesting County department in accordance with invoicing
instructions included in each order referencing this Agreement. The Agreement number must appear on all
shipping documents and invoices. Invoice terms shall be Net 45 Days.
INVOICE TERMS: Net forty-five (45) days from the receipt of invoice.
TERMINATION: The County reserves the right to terminate this Agreement upon thirty (30) days written
notice to the Contractor. In the event of such termination, the Contractor shall be paid for satisfactory
services or supplies provided to the date of termination.
LAWS AND REGULATIONS: The Contractor shall comply with all laws, rules and regulations whether they
be Federal, State or municipal, which may be applicable to Contractor's business, equipment and personnel
engaged in service covered by this Agreement.
AUDITS AND RETENTION: Terms and conditions set forth in the agreement associated with the purchased
goods are incorporated herein by reference. In addition, the Contractor shall maintain in good and legible
condition all books, documents, papers, data files and other records related to its performance under this
contract. Such records shall be complete and available to Fresno County, the State of California, the federal
government or their duly authorized representatives for the purpose of audit, examination, or copying during
the term of the contract and for a period of at least three years following the County's final payment under the
contract or until conclusion of any pending matter (e.g., litigation or audit), whichever is later. Such records
must be retained in the manner described above until all pending matters are closed.
LIABILITY: The Contractor agrees to:
Pay all claims for damage to property in any manner arising from Contractor's operations under this
Agreement.
Indemnify, save and hold harmless, and at County's request defend the County, its officers, agents and
employees from any and all claims for damage or other liability, including costs, expenses (including
attorney’s fees and costs), causes of action, claims or judgments resulting out of or in any way connected
with Contractor's performance or failure to perform by Contractor, its agents, officers or employees under this
Agreement, and from any and all costs and expenses (including attorney’s fees and costs), damages,
liabilities, claims, and losses occurring or resulting to any person, firm or corporation who may be injured or
damaged by the performance, or failure to perform, of Contractor, its officers, agents, or employees under
this Agreement.
INSURANCE: Without limiting the COUNTY's right to obtain indemnification from CONTRACTOR or any
third parties, CONTRACTOR, at its sole expense, shall maintain in full force and effect, the following
insurance policies or a program of self-insurance, including but not limited to, an insurance pooling
arrangement or Joint Powers Agreement (JPA) throughout the term of the Agreement:
A. Commercial General Liability: Commercial General Liability Insurance with limits of not less than Two
Million Dollars ($2,000,000.00) per occurrence and an annual aggregate of Four Million Dollars
($4,000,000.00). This policy shall be issued on a per occurrence basis. County may require specific
coverage including completed operations, product liability, contractual liability, Explosion-Collapse-
Underground, fire legal liability or any other liability insurance deemed necessary because of the nature
of the contract.
B. Automobile Liability: Comprehensive Automobile Liability Insurance with limits of not less than One
Million Dollars ($1,000,000.00) per accident for bodily injury and for property damages. Coverage should
include any auto used in connection with this Agreement.
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January 11, 2022
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C. Professional Liability: If Contractor employs licensed professional staff, (e.g., Ph.D., R.N., L.C.S.W.,
M.F.C.C.) in providing services, Professional Liability Insurance with limits of not less than One Million
Dollars ($1,000,000.00) per occurrence, Three Million Dollars ($3,000,000.00) annual aggregate.
D. Worker's Compensation: A policy of Worker's Compensation insurance as may be required by the
California Labor Code.
Additional Requirements Relating to Insurance:
Contractor shall obtain endorsements to the Commercial General Liability insurance naming the County of
Fresno, its officers, agents, and employees, individually and collectively, as additional insured, but only
insofar as the operations under this Agreement are concerned. Such coverage for additional insured shall
apply as primary insurance and any other insurance, or self-insurance, maintained by County, its officers,
agents and employees shall be excess only and not contributing with insurance provided under Contractor's
policies herein. This insurance shall not be cancelled or changed without a minimum of thirty (30) days
advance written notice given to County.
Contractor hereby waives its right to recover from County, its officers, agents, and employees any amounts
paid by the policy of worker’s compensation insurance required by this Agreement. Contractor is solely
responsible to obtain any endorsement to such policy that may be necessary to accomplish such waiver of
subrogation, but Contractor’s waiver of subrogation under this paragraph is effective whether or not
Contractor obtains such an endorsement.
Within Thirty (30) days from the date Contractor signs and executes this Agreement, Contractor shall provide
certificates of insurance and endorsement as stated above for all of the foregoing policies, as required
herein, to the County of Fresno, Auditor-Controller/Treasurer-Tax Collector, 2281 Tulare Street,
Fresno, CA 93721 stating that such insurance coverage have been obtained and are in full force; that the
County of Fresno, its officers, agents and employees will not be responsible for any premiums on the
policies; that such Commercial General Liability insurance names the County of Fresno, its officers, agents
and employees, individually and collectively, as additional insured, but only insofar as the operations under
this Agreement are concerned; that such coverage for additional insured shall apply as primary insurance
and any other insurance, or self-insurance, maintained by County, its officers, agents and employees, shall
be excess only and not contributing with insurance provided under Contractor's policies herein; and that this
insurance shall not be cancelled or changed without a minimum of thirty (30) days advance, written notice
given to County. Certificates of Insurance are to include the contract number at the top of the first
page.
In the event Contractor fails to keep in effect at all times insurance coverage as herein provided, the County
may, in addition to other remedies it may have, suspend or terminate this Agreement upon the occurrence of
such event.
All policies shall be with admitted insurers licensed to do business in the State of California. Insurance
purchased shall be purchased from companies possessing a current A.M. Best, Inc. rating of A FSC VII or
better.
COMING ON COUNTY PROPERTY TO DO WORK: Contractor agrees to provide maintain and furnish
proof of Comprehensive General Liability Insurance with limits of not less than $500,000 per occurrence.
INDEPENDENT CONTRACTOR: In performance of the work, duties and obligations assumed by Contractor
under this Agreement, it is mutually understood and agreed that Contractor, including any and all of
Contractor's officers, agents, and employees will at all times be acting and performing as an independent
contractor, and shall act in an independent capacity and not as an officer, agent, servant, employee, joint
venturer, partner, or associate of the County. Furthermore, County shall have no right to control or supervise
or direct the manner or method by which Contractor shall perform its work and function. However, County
shall retain the right to administer this Agreement so as to verify that Contractor is performing its obligations
in accordance with the terms and conditions thereof. Contractor and County shall comply with all applicable
provisions of law and the rules and regulations, if any, of governmental authorities having jurisdiction over
matters the subject thereof.
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January 11, 2022
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Because of its status as an independent contractor, Contractor shall have absolutely no right to employment
rights and benefits available to County employees. Contractor shall be solely liable and responsible for
providing to, or on behalf of, its employees all legally-required employee benefits. In addition, Contractor
shall be solely responsible and save County harmless from all matters relating to payment of Contractor's
employees, including compliance with Social Security, withholding, and all other regulations governing such
matters. It is acknowledged that during the term of this Agreement, Contractor may be providing services to
others unrelated to the County or to this Agreement.
NON-ASSIGNMENT: Neither party shall assign, transfer or sub-contract this Agreement nor their rights or
duties under this Agreement without the written consent of the other party.
AMENDMENTS: This Agreement constitutes the entire Agreement between the Contractor and the County
with respect to the subject matter hereof and supersedes all previous negotiations, proposals, commitments,
writings, advertisements, publications, Request for Proposals, Bids and understandings of any nature
whatsoever unless expressly included in this Agreement. This Agreement supersedes any and all terms set
forth in Contractor's invoice. This Agreement may be amended only by written addendum signed by both
parties.
INCONSISTENCIES: In the event of any inconsistency in interpreting the documents which constitute this
Agreement, the inconsistency shall be resolved by giving precedence in the following order of priority: (1) the
text of this Agreement (excluding Attachment "A", County's Request for Quotation No. 22-016 and the
Contractor's Quote in response thereto); (2) Attachment "A"; (3) the County's Request for Quotation No. 22-
016 and (4) the Contractor's quotation made in response to County's Request for Quotation No. 22-016.
GOVERNING LAWS: This Agreement shall be construed, interpreted and enforced under the laws of the
State of California. Venue for any action shall only be in County of Fresno.
ELECTRONIC SIGNATURES: The parties agree that this Agreement may be executed by electronic
signature as provided in this section.
A. An “electronic signature” means any symbol or process intended by an individual signing this Agreement
to represent their signature, including but not limited to (1) a digital signature; (2) a faxed version of an
original handwritten signature; or (3) an electronically scanned and transmitted (for example by PDF
document) of a handwritten signature.
B. Each electronic signature affixed or attached to this Agreement (1) is deemed equivalent to a valid
original handwritten signature of the person signing this Agreement for all purposes, including but not
limited to evidentiary proof in any administrative or judicial proceeding, and (2) has the same force and
effect as the valid original handwritten signature of that person.
C. The provisions of this section satisfy the requirements of Civil Code section 1633.5, subdivision (b), in
the Uniform Electronic Transaction Act (Civil Code, Division 3, Part 2, Title 2.5, beginning with section
1633.1).
D. Each party using a digital signature represents that it has undertaken and satisfied the requirements of
Government Code section 16.5, subdivision (a), paragraphs (1) through (5), and agrees that each other
party may rely upon that representation.
This Agreement is not conditioned upon the parties conducting the transactions under it by electronic means
and either party may sign this Agreement with an original handwritten signature.
Please acknowledge your acceptance by returning all pages of this Agreement to my office via email or
USPS.
Please refer any inquiries in this matter to Chanvathei Lonh, Purchasing Technician, at (559) 600-7119 or
clonh@fresnocountyca.gov .
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January 11, 2022
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FOR THE COUNTY OF FRESNO
Gary E. Cornuelle
Purchasing Manager
333 W. Pontiac Way
Clovis, CA 93612
GEC:CL:
PROCUREMENT AGREEMENT NUMBER: P-22-017 Page 6
Hudson Henderson & Company, Inc.
January 11, 2022
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CONTRACTOR TO COMPLETE:
Company:
Type of Entity:
Individual Limited Liability Company
Sole Proprietorship Limited Liability Partnership
Corporation General Partnership
Address City State Zip
TELEPHONE NUMBER FAX NUMBER E-MAIL ADDRESS
Print Name &
Title:
Print Name & Title:
Signature:
Signature:
ACCOUNTING USE ONLY
ORG No.: 9050
Account No.: 7491
Requisition No.: 4102200030
(09/2021)
PROCUREMENT AGREEMENT NUMBER: P-22-017 Attachment Page 1 of
Hudson Henderson & Company, Inc.
January 11, 2022
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017 HUDSON HENDERSON & COMPANY, INC.DOCX
ATTACHMENT "A"
Total All-Inclusive Maximum Price
The total all-inclusive maximum price is to contain all direct and indirect costs including all out-of-pocket
expenses.
Company Name HUDSON HENDERSON & COMPANY, INC.
Total All-Inclusive Maximum Price to perform the audit engagement
as described in this RFQ for Fiscal Year 2020-2021
$ 9,500
Total All-Inclusive Maximum Price to perform the audit engagement
as described in this RFQ for Fiscal Year 2021-2022
$ 9,500
Total All-Inclusive Maximum Price to perform the audit engagement
as described in this RFQ for Fiscal Year 2022-2023
$ 9,500
Total All-Inclusive Maximum Price to perform the audit engagement
as described in this RFQ for Fiscal Year 2023-2024
$ 10,200
Total All-Inclusive Maximum Price to perform the audit engagement
as described in this RFQ for Fiscal Year 2024-2025
$ 10,200
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Contractor’s Response to
County of Fresno
Request for Quotation
No. 22-016
G:\Public\RFQ\FY 2021-22\22-016 CAL-ID Financial Statement Audit Service\22-016 CAL-ID Financial Statement Audit Service.docx
COUNTY OF FRESNO
REQUEST FOR QUOTATION
NUMBER: 22-016
CAL-ID FINANCIAL STATEMENT AUDIT SERVICE
Issue Date: October 21, 2021
Closing Date: NOVEMBER 16, 2021 AT 2:00 PM
All Questions and Responses must be electronically submitted on the Bid Page on Public Purchase.
For assistance, contact Chanvathei Lonh at Phone (559) 600-7110.
BIDDER TO COMPLETE
Undersigned agrees to furnish the commodity or service stipulated in the attached at the prices and terms stated in this RFQ. Bid must be signed and dated by an authorized officer or employee.
Except as noted on individual items, the following will apply to all items in the Quotation Schedule:
• A cash discount of % days will apply. County does not accept terms less than 15 days.
COMPANY
CONTACT PERSON
ADDRESS
CITY STATE ZIP CODE
( )
TELEPHONE NUMBER E-MAIL ADDRESS
AUTHORIZED SIGNATURE
PRINT NAME TITLE
Purchasing Use: CL:st ORG/Requisition: 9050 / 4102200030
HUDSON HENDERSON & COMPANY, INC.
BRIAN HENDERSON
7473 N. INGRAM AVE., STE 102
FRESNO CA 93711
559 412-7576 BHENDERSON@HHCCPAS.COM
BRIAN HENDERSON PARTNER
G:\PUBLIC\RFQ\FY 2021-22\22-016 CAL-ID FINANCIAL STATEMENT AUDIT SERVICE\22-016 ADDENDUM 1.DOCX
COUNTY OF FRESNO
ADDENDUM NUMBER: ONE (1)
RFQ NUMBER: 22-016
CAL-ID FINANCIAL STATEMENT AUDIT SERVICE
Issue Date: November 4, 2021
CLOSING DATE: NOVEMBER 16, 2021 AT 2:00 PM
Submit all Questions and Quotations on the Bid Page at Public Purchase.
For assistance contact Chanvathei Lonh at (559) 600-7110.
NOTE THE FOLLOWING AND ATTACHED ADDITIONS, DELETIONS AND/OR CHANGES TO THE
REQUIREMENTS OF REQUEST FOR QUOTATION NUMBER: 22-016 AND INCLUDE THEM IN YOUR
RESPONSE. PLEASE SIGN AND RETURN THIS ADDENDUM WITH YOUR QUOTATION.
Questions and Answers.
ACKNOWLEDGMENT OF ADDENDUM NUMBER ONE (1) TO RFQ 22-016
COMPANY NAME: (PRINT)
SIGNATURE:
NAME & TITLE: (PRINT)
Purchasing Use: CL:st ORG/Requisition: 9050 / 4102200030
HUDSON HENDERSON & COMPANY, INC.
BRIAN HENDERSON, PARTNER
Original
Quotation To: Quotation No. 22-016
Request for Quotation:
CAL-ID Financial Statement Audit Service
For the Fiscal Year Ending June 30, 2021
and for Four Additional Fiscal Years
November 16, 2021
Submitted by:
HUDSON HENDERSON &
COMPANY, INC.
7473 N. Ingram, Suite 102
Fresno, CA 93711
www.hhccpas.com
Contact:
Brian Henderson, CPA
Partner
Phone: (559) 412-7576
Fax: (559) 493-5325
bhenderson@hhccpas.com
i
TABLE OF CONTENTS
Page
Cover Letter ..................................................................................................................................................... 1
Independence ..................................................................................................................................................... 3
License to Practice in California .......................................................................................................................... 3
Firm Qualifications and Experience .................................................................................................................... 3
Partner, Supervisory and Staff Qualifications and Experience ........................................................................... 4
Prior Engagements with the County of Fresno ................................................................................................... 6
Similar Engagement with Other Government Entities ....................................................................................... 7
Specific Audit Approach ...................................................................................................................................... 8
Identification of Anticipated Potential Audit Problems ...................................................................................... 12
Participation ....................................................................................................................................................... 12
Report Format .................................................................................................................................................... 13
Cost Quotation ................................................................................................................................................... 17
Check List ............................................................................................................................................................ 19
Conclusion ..................................................................................................................................................... 19
Appendix I: Resumes of Key Personnel .............................................................................................................. 20
Appendix II: Peer Review Report ....................................................................................................................... 24
7473 N. INGRAM AVE., SUITE 102 ⬧ FRESNO, CA 93711 _______________________________________________________________________________________________
P (559) 712-7576 ⬧ F (559) 493-5325 ⬧ WWW.HHCCPAS.COM
Cover Letter
November 16, 2021
County of Fresno
Purchasing Division
Hudson Henderson & Company, Inc. (HHC) is pleased to have the opportunity to respond to your request for a
quotation to perform a financial statement audit for the County of Fresno on behalf on the Cal -ID/RAN Board and to
submit its qualifications for the County of Fresno (the County) for the fiscal year ending June 30, 2021, and each of
the subsequent four fiscal years. The financials and audit are to be prepared and conducted in accordance with
generally accepted auditing standards, the standards set forth for financial audits in the Ge neral Accounting Office’s
(GAO) Government Auditing Standards, Governmental Accounting Standard Board (GASB) Pronouncements, and all
other applicable federal, state, local or programmatic financial requirements.
This quotation will highlight the background of the partners and staff assigned to the engagement, summarize our
experience in the governmental special district area, and describe our approach in performing these services. This
quotation demonstrates our ability to perform the necessary accounting services requested by the County on a timely
basis.
We are committed to performing the required work and completing the financials prior to the County’s published
time frames and commit to you that we will perform the work within the time frames required. We understand the
new requirements for the preparation of the Annual State Controllers report and how the audit must be completed
timely to allow sufficient time for accruate prepration of that report. We have experience working with the County
itself, and understand the systems and financial recordings of the County. We believe we are the best qualified to
perform the accounting services because our professional staff includes individuals well versed in governmental and
special district reporting requirements. We will also be responsive to the needs of the County year round, not just
during financial statement preparation time.
We are confident that you will find our firm offers the required expertise, technical knowledge, and business
understanding to perform the required services of the County. Our past experience provides us with a thorough
understanding of the needs and requirements of the County and the Cal-ID financials, as well as the technical
knowledge to perform such services in accordance with the accounting and reporting guidelines as published by the
various authoritative entities. This quotation is a firm and irrevocable offer for 180 days.
I will be the engagement partner assigned to your auditing and financial statement services. I am an authorized
representative of the firm and can be contacted at 7473 N. Ingram Avenue, Suite 102, Fresno, California 93711, or by
telephone at (559) 412-7576, and by email at bhenderson@hhccpas.com.
3
We welcome your inquiries and look forward to further discussions with you.
Sincerely,
HUDSON HENDERSON & COMPANY, INC.
By: Brian Henderson, CPA
Partner
3
INDEPENDENCE
Hudson Henderson & Company, Inc. is independent of the County of Fresno (the County) as defined by the U.S.
General Accounting Office’s Government Auditing Standards. We are unaware of any issues that could impair its
independence with the County both in fact and in appearance.
LICENSE TO PRACTICE
HHC and all key professional staff of the firm are properly licensed to practice public accounting in the State of
California. All licenses are current and in good standing.
FIRM QUALIFICATION AND EXPERIENCE
Hudson Henderson & Company, Inc. (HHC) was founded by Mr. Kip Hudson and Mr. Brian Henderson in 2014 to
bring together their extensive knowledge, broad client background, and expertise in public accounting services. Both
founding partners gained their experience working in large Central Valley regional accounting firms and bring to the
table over 26 years of combined experience. Their main purpose was to create a public accounting firm that is
focused on bringing the quality and depth of knowledge of a large accounting firm combined with the perso nal
relationships and attention that a smaller local firm can provide. Ultimately, the focus is to enhance the relationship
and service provided to their clients. While the name on the letterhead is newer, the experience and knowledge of
the partners who will be performing your audit services are anything but new, and have the expertise to complete
your audit in an exceptional and efficient manner. We currently stand with two Partners, one CPA accounting
supervisor, two professional staff and one administrative/professional staff. All services are performed out of our
one Fresno location.
HHC is a full service public accounting firm providing assurance, tax and bookkeeping services. While both partners
have a depth of assurance and audit experience in various industries, HHC specializes on governmental and non-
profit auditing. HHC is particularly specialized in providing assurance services to special districts and local
governmental agencies. HHC has a vast level of experience, knowledge and history o f performing governmental
audits in accordance with auditing standards generally accepted in the United States of America, governmental
auditing standards, as well as experience in performing audits in accordance with the Single Audit Act Amendments
of 1996 and OMB Circular A-133. We are also current members of the American Institute of Certified Public
Accountants and the California Society of Certified Public Accountants.
We believe that the real value of our audit lies in what level service we can prov ide, the depth of experience of the
audit team actually performing the audit procedures, and other services we can provide while performing the audit.
No sub-consultants or outside services will be used. Other inclusive services include:
- To offer substantive observations and recommendations relating to accounting and operating control
policies and procedures.
- To identify areas for efficiencies and activities for cost reduction opportunities.
- To perform the audit in an efficient and effective manner and minimize the impact and disruption to the
daily office workload that already exists.
- To be available year-round to offer assistance and advice in the running of the agency and
implementation of new accounting standards.
4
PEER REVIEW
Here at HHC, we strongly believe in the Peer Review Program, and the strength and accountability the program
brings to the public accounting field, especially in the realm of performing quality audits in accordance with
standards governing our field and the industries we serve. Our 2019 peer review has been completed and published,
with a rating of pass. See Appendix II for a copy of the report.
No federal or state desk reviews or field reviews have been undertaken of any audits performed by the Firm or any
of its partners or professionals during the past three (3) years.
PARTNER, SUPERVISORY AND STAFF QUALIFICATIONS AND EXPERIENCE
Personnel
HHC has policies and procedures to ensure it hires only qualified people, that it properly supervises them and
provides professional training, that it advances them to responsibilities they are capable of handling, and that it
provides them with necessary technical resources.
Engagement Partner: The Engagement Partner will be Mr. Brian Henderson, CPA. Mr. Henderson has over fourteen
(14) years of governmental audit and accounting experience and he is one of the co -founding Partners of HHC. Brian
obtained the vast majority of his governmental audit experience working as a senior audit manager at Brown
Armstrong Accountancy Corporation, the largest CPA firm in Bakersfield, CA. He will be responsible for the conduct
of fieldwork and the examination and review of the workpapers. He will be charged with the responsibility of the
final quality review of the audit and financials to ensure all firm and applicable standards are met. Mr. Henderson
is licensed as a CPA in the State of California and his CPA license numb er is 104495.
Engagement Co-Partner: The Engagement Co-Partner will be Mr. Kip Hudson, CPA. Mr. Hudson has over twelve (12)
years of governmental audit and accounting experience and he is also one of the co-founding Partners of HHC. Prior
to founding HHC, Kip gained his audit and background working at Baker Peterson & Franklin, the largest accounting
firm in Fresno, CA. He will be responsible for the conduct of fieldwork and the examination and review of the
workpapers. He will also be completing some of the detail audit work performed throughout the engagement. Mr.
Hudson is licensed as a CPA in the State of California and his CPA license number is 112668.
Appendix I of this proposal contains resumes for these audit team leaders detailing their government and nonprofit
auditing experience, continuing education, and membership in professional organizations relevant to the
performance of your audit. Our firm policy is to maintain staffing continuity for all audits. In the unlikely event that
key team members must be replaced, we will only do so with your permission. Any staffing replacements during the
term of the agreement will have the same or better qualifications and experience of the staff which they replace.
The quality of the staff over the term of the agreement will be assured because of our participation in excellent audit
and accounting continuing education classes, and our unexcelled on -the-job training. All members of HHC are very
familiar with the stringent quality control standards established by the AICPA.
5
Continuing Professional Education
HHC is committed to quality training and technical proficiency. With such a large segment of the practice dedicated
to attestation services, including financial and compliance audits, professional training and education in standards
and regulations applicable to auditing and financial reporting are of the utmost importance. Firm standards meet
or exceed professional and governmental standards of training and involve professional staff receiving at least forty
hours of professional continuing education each year. This emphasis on continuing education is served in several
ways.
During the year and prior three years, the professional staff attend various educational sessions sponsored by the
AICPA and California State Society of CPAs, as considered appropriate for the level and need of the individual. These
classes include, among others:
• Governmental Financial Reporting Standards and Practices.
• Yellow Book: Government Auditing Standards.
• Financial Accounting Standards: Comprehensive Review.
• Single Audit.
• Governmental Auditing & Accounting Update.
• Comprehensive Review of Generally Accepted Auditing Standards.
Relevant Experience
We are committed to providing appropriate and related experience, personal involvement, and a broad business
perspective to produce a quality end product within the time frames required.
The Firm provides financial and compliance auditing services to governmental agencies throughout the Central
Valley and throughout California. We are a governmental agency auditing firm that specializes in special district
audits, and our Partners have been performing these services for many years. As a result, our Partners have
performed financial and compliance audits on most, if not all, types of governmental agencies and oper ations
including:
• Cities
• Counties
• Federal & State Grants
• Electrical Utilities
• Special Districts
• Water Districts
• Pension Plans
• Joint Power Authorities
• Investment Activities
• Landfills
• Enterprise Funds
• TDA Operations
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In addition, the vast majority of our Partner experience in municipal auditing included clients that required a Single
Audit also be conducted. We perform our audits in a detailed manner utilizing approaches developed internally that
comply with the authoritative literature currently issued by the AICPA, GASB, FASB, GAO, Single Audit Act, OMB, and
the California State Controller’s Office. And we do this with minimal disruption to our clients and within the time
frame required.
PRIOR ENGAGEMENTS WITH THE COUNTY OF FRESNO
From 2016 through 2019, HHC has assisted the Department of Public Works in preparing and compiling the
financial statements of 33 special districts of the County. In addition, HHC has assisted in completing the Annual
SCO reports for each of the 33 special districts.
In addition, we have been the previous auditor for Cal-ID from 2016 through 2020.
SIMILAR ENGAGEMENT WITH OTHER GOVERNMENT ENTITIES
The following is a list of five similar engagements in which the firm performed an audit in accordance with
Governmental Auditing Standards.
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SPECIFIC AUDIT APPROACH
Our overall approach is simple, and follows the core values of our firm. We want to be efficient in our procedures
and time, to eliminate redundancy and to ease the process and completion of the audit for both our people, but
mostly for our clients. We put great effort and time into planning and preparing for the audit. We look for ways to
efficiently perform tests and we follow our risk based planning approach to properly perform the audit, without
performing excess or non-useful testing. If a single audit is required, we have found efficiencies by correlating our
testing selections of expenditures for the agency audit with our testing of the single audit allowable cost principles
to reduce the number of invoices and items selected for testing.
Our partners not only oversee the audits, they also jump in and help complete the audit; they do not rely solely on
staff and supervisors to perform the detail work necessary to complete the audit. Using their experience and
knowledge gained over the years, there is no on-the-job training of new staff by the client while performing your
audit or major turnover in the audit team from year -to-year. Some firms claim to have “hands on” partners, but
often after the first year, you will never see the Partner during fieldwork, unless it is a contract year. Not here at
HHC.
This not only improves our audit product and gains efficiency with time, but eases the pain of the audit for our clients
who get direct access to the partner to easily take care of any situations and/or questions that arise during the audit.
Our evaluation of internal controls consists of concise interviews, so that we can quickly determine the areas for
control and substantive testing, but also and most importantly to gain a solid understanding of our clients and how
they operate. We look for ways to improve processes and procedures, so that we can consult with our clients and
help them become more efficient and effective in their methods as well.
One of our core values is accountability. We take this very seriously, and when deadlines are set, we make sure they
are met. This is one of the major keys to our success, and that is meeting the expectations and deadlines of our
clients.
We are also aware of the SCO and if applicable, the Single Audit standards and deadlines that must be met for each
of those reports, and will ensure those are met without exception.
The engagement will be conducted within the framework of the Firm's quality control program which includes the
use of audit programs, careful planning, use of computerized audit software and internal control evaluation &
documentation software, and objective review procedures.
We will conduct the necessary audit steps to perform:
- Planning of the engagement, including evaluation of the existing internal control environment to
determine the degree of risk of material misstatement.
- Determination of the degree of compliance with laws, regulations, grants, provisions, and agency
approved policies.
- Assessment of potential fraudulent issues.
- Substantiation of account balances.
- Verification of reasonableness of management estimates.
The audit approach will consist of three phases, with estimated hours as follows:
- Initial Planning & Intro Meeting (December - half day onsite, remainder in office)
- Year End Fieldwork & Internal Control Evaluation (December/January - 5 days in office)
- Reporting
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o Financial Report Drafts – January 20
o Final Financial Reports – January 25
Segment Partner
Manager/
Supervisor
Staff
Accountant Clerical Total Hours
Planning 2 1 6 1 10
Fieldwork 5 14 36 - 55
FS Reports 5 3 6 3 17
Total Hours 12 18 48 4 82
Hours by Proposed Segments
Planning, Understanding and Communication
We will begin the planning of the examination towards the end of the current year. Based on our previous audit
experience, using the budget, organizational charts, manuals and other financial information systems and our
knowledge of how governments and special districts work, we will obtain an updated current insight to the specific
concerns and sensitivities of the agency. Our understanding is updated continuously through our year-round contact
and communication efforts.
We will agree on common audit objectives and expectations with management before audit work begins and,
throughout the audit, will meet regularly with management to discuss audit issues and to gather feedback.
Tasks to be accomplished during this phase include:
- Conference with management to discuss the scope of the examination, availability of your staff,
scheduling, and coordination of our audit efforts with your efforts to produce the required financial
reports. (Initial kick-off meeting, January)
- Conferences with all personnel involved in the engagement to discuss the scope and timing of the
engagement, and anticipated areas of audit emphasis. (Initial kick-off meeting, December)
- Analytical review of year to date financial information. (January)
- Inquiry of your predecessor auditor. (January)
Study and Evaluation of Internal Controls and Systems (Fieldwork - January)
This is the cornerstone of the examination. Evaluating interna l accounting controls is primarily focused on the
procedures and records that are concerned with the safeguarding of assets and reliability of financial records. We
have developed diagnostic reviews which enable us to evaluate your systems and controls, a nd to provide
management with constructive feedback. Combined with our knowledge, understanding and experience with
accounting software, our control review will form the basis of our audit risk assessment. We will utilize the COSO
approach in our evaluation of the agency’s internal processes to identify potential control deficiencies. In future
years, we will update our understanding through similar procedures.
We will begin by preparing documentation matrices to fully describe all significant financial systems. We will then
review the documents to isolate the significant strengths and weaknesses that would affect the extent of substantive
audit procedures to be employed. Each strength is then tested and the results subjected to evaluation. These
evaluations assist us in determining the amount of reliance we can place on those significant strengths we have
identified. At this point we make adjustments to our auditing plan to compensate for the significant strengths and
weaknesses thus identified and substantiated.
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Sample Size and Sampling Techniques (Samples will be provided prior to start of fieldwork to allow ample time for
staff to pull supporting documentation)
Our audit approach will include sampling activities. Population size and the level of as surance to be derived from a
particular test will dictate the sample size. We use sampling in our audit approach to compliment skilled judgment
and knowledge of the particular situation. We look for efficiencies in testing a sample across multiple attribut es to
eliminate the need for multiple samples pulled by your staff. Our sample size will normally range from 25 to 40
items.
Risk-Based Audit Approach (Directly following internal control evaluation - for Final audit procedures)
Our audit approach is tailored to governmental applications. We will use audit programs specifically designed to
address the operational environment of governmental entities. Our approach will identify potential control risks and
the opportunities for risk of material misstatements and fraud. We will evaluate the various risk assessments and
identify the potential risks relating to the basic financial statements of the agency. Our audit procedures will then
be developed to address these risk areas.
Analytical Procedures (Fieldwork)
We use analytical procedures in several aspects of our audit. Extensive knowledge and industry background are
required for effective analytics, and our partners possess the appropriate experience and knowledge for the agency
to benefit from these procedures. We use detailed analytics including predictive tests, ratio analysis, annual trends,
etc. to assist and often reduce the amount of vouching and substantive testing of balances.
Vouching of Balances & Substantive Fieldwork (Fieldwork)
Once our audit procedures are developed, the vouching of balances include tracing to supporting documentation,
confirmation of balances with outside third parties, and performing substantive procedures over ending balances
which ultimately support the conclusion that the financial statements are free of material misstatement will be
performed.
We believe in performing quality analytical procedures, including comparison to prior years, predictive tests, ratio
analysis, and inter-entity account analysis to determine the reasonableness of ending balances. Additional
procedures include subsequent transaction testing of disbursements and receipts to assist in testing completeness
and existence of balances and managements assertions. Expanded audit procedures are performed on high risk
areas, while analytics and limited procedures are performed on lower risk areas.
Transition
We understand that changing audit firms can be a difficult and time consuming task for the entity. Our audit
approach and focused testing on audit risks along with our experienced partners allow for a smoother transition for
the entity and less impact on your staff.
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Information Technology (Fieldwork)
We will evaluate controls over the IT functions to assess control risk. We intend to t est controls for the purpose of
reliance. Our review procedures will evaluate controls over:
- Security Management
- Logical and Physical Access
- Configuration Management
- Segregation of Duties
- Contingency Planning
In addition, we will review controls over:
- Input, processing, output, master data
- Application interface
- Data management system interface
Laws & Regulations Subject to Audit Procedures (continuous throughout audit)
We continuously refer to specific regulations, compliance supplements, state guidelines and contracts currently in
force. We perform the procedures required related to laws and regulations, using inquiries, observations and
sampling techniques. Some of the laws and regulations that we beli eve may be applicable to the agency are the
Single Audit Act and other applicable laws and regulations, including the California Government Code, provisions of
applicable Grant guidelines, governmental special district reporting requirements, requirements of local measures,
and state water requirements.
Adjusting Journal Entries (continuous throughout audit)
We will discuss and explain proposed audit adjusting entries with the agency’s designated finance personnel prior
to recording to ensure all facts are obtained and agreed upon prior to moving forward with the adjustment. Audit
adjusting entries will be provided in a format showing the lowest level of posting detail needed for data entry on the
agency’s general ledger system.
Computer Software
The firm maintains a variety of software packages to be used during the audit and in the financial statement
compilation process, which include MS Office (Word, Excel, etc.), Prosystem Fx Engagement, PPC Checkpoint and
Checkpoint Tools, and SMART e-practice aids tool. We also have the ability to run reports using IDEA (data analysis
software), when needed.
Our audit software enables us to link our audit trial balance to the financial statements, which allows for efficient
financial statement compilation. It also allows us to easily create analytical reports (e.g. year to year comparisons,
budget to actual comparisons, trend analysis, ratio analysis, etc.) to identify any potential issues to be resolved
during fieldwork.
Our research tools are always kept up to date to ensure compliance with accounting and auditing standards, and are
also a resource for us to provide guidance to our clients or research any complex accounting transactions. We are a
paperless firm, which we believe greatly assists us in performing audits efficiently and effectively.
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IDENTIFICATION OF ANTICIPATED POTENTIAL AUDIT PROBLEMS
In our prior engagements with the County, we anticipate there could be a few issues that related to the Cal -ID/RAN
financial statements. The issues mostly arise from the department being separate from the Auditor-Controller’s
office, and this can often lead to certain miscommunications that could come up from that disconnect. Potential
problems include the reliance on the auditor in maintaining the running fund balance figures and not posting aud it
adjustments to the County’s financial accounting software due to the audits being completed after the closure of
the fiscal year. This leads to auditor adjustments in reconciling the ending fund balance per the accounting system
to the prior year audited financial statements. Such adjustments are mostly related to capital assets and accruals,
including accounts receivable and accounts payable. There can also be issues in obtaining the full information from
the County accounting software and providing support for capital asset, specifically construction in progress figures.
We have experience in dealing with the County and the Auditor-Controller’s office, and know how to remediate the
problems to avoid them continuing into future years.
PARTICIPATION
REPORT FORMAT
The following are sample reports that would be issued in conjunction with our audit of the County Cal -ID/RAN
financial statements for the year ended June 30, 2021.
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Audit Report
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Governmental Auditing Standards Report
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COST QUOTATION
The fees for our services for the fiscal year ending June 30, 2021, and for the four subsequent additional years is as
follows:
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STAFF-HOUR ALLOCATION
The following table will list all project tasks, with proposed staff, to detail out the hours and fe e for each, plus project-
related expenses.
COF CAL-ID FINANCIAL STATEMENTS
Standard COF CAL-ID Quoted
Level of Personnel Rate Rate Hours Amount
1 Partners $180 $160 12 $1,920
2 Manager/Supervisor $160 $140 18 $2,520
3 Staff Accountant $110 $100 48 $4,800
4 Clerical $60 $50 4 $200
$60
Total Hours 82
$9,500
Estimated Out of Pocket Expense
ANNUAL FINANCIAL STATEMENT AUDIT
Annual Financial Statement Audit Proposal Price
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CHECKLIST
CONCLUSION
A professional accounting services relationship with the County of Fresno will be of great value to our Firm, and we
are excited and welcome the opportunity to develop a long-term relationship with the County. We are committed
to providing excellent service, advisory value-added benefits to the County, and producing a timely quality end-
product. We would like to express our appreciation to the County for allowing us the opportunity to submit a
quotation for our services. We are available at any time to discuss our quotation with you. Thank you for allowing
us to present our Firm to you.
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APPENDIX I: RESUMES OF
KEY PERSONNEL
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APPENDIX I
RESUMES
Brian Henderson, CPA – Engagement Partner
Kip Hudson, CPA – Engagement Co-Partner
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Brian Henderson, CPA HUDSON HENDERSON
Engagement Partner & COMPANY, INC.
Certified Public Accountants
Academic Background:
California State University Fresno
Bachelor of Science in Business Administration, Option in Accountancy
Professional Experience:(partial listing)
County of Fresno Pixley Public Utility District City of Visalia
County of Stanislaus Fresno Metropolitan Flood City of Mendota
County of Tulare Control District City of Modesto
County of Kings Santa Clara Valley Water District City of Pasadena
County of Kings Visalia USD EDC- Fresno
County of Merced Fresno USD EDC- Kings County
County of Kern Davis Joint USD Rose Bowl Operating
County of Stanislaus San Leandro USD Company
Pasadena Center
Operating Company
Mission Bank Fresno County
Mission National Bank City of Fresno
Premier Valley Bank Fresno Metro MPP Kings County COG
Tulare County City of Modesto
Marin County City of Hanford
Makoil Inc.Fresno Irrigation District MPP City of Corcoran
Orchard Petroleum Inc.
Hunter Edison Oil Dev.
ESK Limited & Subs.Ireland Inc.Tuolumne River
Spiral Technology Searchlight Minerals Modesto Regional Fire
Professional Associations:
American Institute of Certified Public Accountants
California Society of Certified Public Accountants
Recent Continuing Education:Current on Governmental CPE Credits
Governmental Accounting & Auditing Update
SEC & Financial Reporting
GASB Update
Auditing in the Small Business Environment
FASB Review & Update
First 5 Commissions:School Districts:Non-Profits:
Professional Resume
Financial Institutions:Retirement Systems:
Transits:
Business:
PCAOB:Joint Power Auth:
Counties:Special Districts:Cities:
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Kip Hudson, CPA HUDSON HENDERSON
Engagement Co-Partner & COMPANY, INC.
Certified Public Accountants
Academic Background:
California State University Fresno
Bachelor of Science in Business Administration, Option in Accountancy
Professional Experience:(partial listing)
The Arc Fresno/Madera Economic Development Henry Miller Reclamation
Counties Corporation District #2131
Diamond Learning Center Development and Relief Fresno Metropolitan Flood
Ag One Foundation Foundation Control District
Hope Now for Youth Charlie Keyman Armenian Fresno Irrigation District
Quality Group Homes, Inc. Community School Sierra Kings Health Care
Hansel & Gretel Day Care, Inc.Community Housing Council District
Garnett & Sena's, Inc. of Fresno Farmers Water District
Abrazo Foster Family Agency Hope for Youth, Inc.
Chrysalis House, Inc.VDA, Inc.
Target Eight Advisory Council California Teaching Fellows Kings County
Michigan House, Inc. Foundation Table Mountain Rancheria
Panacea Services, Inc.Fresno Metropolitan Museum
Professional Associations:
American Institute of Certified Public Accountants
California Society of Certified Public Accountants
Recent Continuing Education:Current on Governmental CPE Credits
Governmental and Nonprofit Annual Update
Auditing & Assurance Update
Spidell Tax Update
Yellow Book
FASB Review & Update
Accounting and Auditing with Excel
Advanced Audit Standards Workshop: Understanding Risk Assessment
Businesses and Retirement Plans:
Available upon request
Non-Profits:
Professional Resume
Special Districts:
Governments:
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APPENDIX II: PEER REVIEW REPORT
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