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CITY OF FRESNO
PROFESSIONAL AUDIT SERVICES RFP
RFP No: 9317
AGREEMENT FOR PROFESSIONAL AUDIT SERVICES
THIS AGREEMENT is made and entered into effective the 11 day of June, 2015, by and
between the CITY OF FRESNO, a California municipal corporation (hereinafter referred to as "ilTy,,),
and BROWN ARMSTRONG, CPAs (hereinafter referred to as "AUDITOR").
REGITALS
WHEREAS, CITY desires to obtain professional auditing services for the examination of its
financial records and Comprehensive Annual Financial Report - CAFR and Single Audit and Other
Compliance Reports (financial statements) pursuant to and in accordance with Section 1216 of the
Charter of the City of Fresno and the Single Audit Act of 1984 as amended in 1g96, and US. Office of
Management and Budget (OMB) Circular A-133, Audits of State and Local Governments and Non-profit
Organizations as revised in 2003 and 2007; and
WHEREAS, CITY desires to obtain professional auditing services for the examination of the
financial records related to the Fresno City Employees' Health and Welfare Trust - Self-lnsured Medical
Plans, the results of which are include in the CAFR; and
WHEREAS, CITY desires to obtain professional services related to Applying Agreed-upon
Procedures on compliance and internal control over reporting required data to the Federal Transit
Administration (FTA) following standards as required for completion of the Funding Allocation Statistics
form (FFA-10). - Fresno Area Express
WHEREAS, CITY desires to obtain professional auditing services for the examination of the
financial records in accordance with and related to the types of compliance requirements described in the
Passenger Facility Charge Audit Guide for Public Agencies (Guide) issued by the Federal Aviation
Administration applicable to the Airport's Passenger Facility charge (pFc) program; and
WHEREAS, CITY desires to obtain professional agreed-upon procedures applied to
Appropriations Limit Worksheet as recommended by the League of California Cities (League) performed
solely to assist the City in meeting requirements of Section 1.5 of Article XlllB oithe'California
Constitution; and
WHEREAS, AUDITOR is a certified public accounting firm engaged in the business of examining
financial statements in accordance with generally accepted auditing standards, and AUDITOR warranté
and represents that the persons who will be performing the services required by this AGREEMENT are
professionally and legally capable of performing such services, and that the partners of such firms
responsible for the services hereunder, are certified public accountants, and that they are duly authorized
to practice and are licensed in the State of California
WHEREAS, AUDITOR acknowledges that this AGREEMENT is subject to the requirements of
Fresno Municipal Code Section 4-107 and Administrative Order No. 6-19, and
WHEREAS, this AGREEMENT will be administered for the CITY by its Finance
Directory/Controller (hereinafter referred to as "Administrator") or his/her designee.
City of Fresno 0612015 Page 1
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the covenants, conditions, and
premises hereinafter contained, to be kept and performed by the respective parties, it is mutually agreed
as follows:
1. Scope of Services.(a) ln accordance with generally accepted auditing standards, AUDITOR shall audit ClTy'S
Comprehensive Annual Financial Report ("CAFR"), perform a financial and compliance audit of federal
assistance received by CITY, and prepare an audit report for each fiscal year beginning with Fy2O15 and
ending with FY2019. lt is the intent of the City to retain the auditfirm fora period a four (4) years with
three (3) optional one-year extensions. The contract will not exceed seven years and is òúOject to the
review and recommendation of the Finance Director/City Controller, or his/hei designee and tñe amount
of the availability of an appropriation.
Whenever used in this AGREEMENT, "fiscal year" shall mean the twelve month fiscal period of ClTy
which commences on July 1 in every year and ends on the following June 30. AUDITOR shall conductaudits of the financial statements in accordance with generally accepted auditing standards,
"Governmental Auditing Standards" issued by the Comptroller Geneial of tñe United Stãtes and theprovisions of the Single Audit Act of 1984 as amended in 1996, and US. Office of Management and
Budget (OMB) Circular A-133, Audits of State and Local Governments and Non-profit Orgañizations as
revised in 2003 and2007. Such standards, circulars, supplements or guides require ttraitne audits beplanned and performed to obtain reasonable rather than absolute, assurance about whether the financial
statements are free nt whether caused by error, fraudulent financial reporting or
misappropriation of material misstatemeñt, whether caused by error, fraudulent
financial reporting sets, may remain undetected. An audit in-cludes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. As a ,esuì-t,
an audit is not designed to detect errors or fraud that is immaterial to the financial statements. An audit
also includes assessing.the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. AUDITOR'S work shall prãvide a
reasonable basis for its reports on the financial statements and on matters of compliance.
(b) AUDITOR shall audit the financial records of the Fresno City Employees' Health and
Welfare Trust which are included in the CAFR for each fiscal year during the term of tñis AGREEMENT
beginning with FY2015 and ending with FY2019. AUDITOR shall maksthe examination in accordance
with generally accepted auditing standards.
(c) AUDITOR shall apply Agreed-upon Procedures on compliance and internal control over
reporting required data to the Federal Transit Administration (FTA) following standards as required for
completion of the Funding Allocation Statistics form (FFA-10) - Fresno Area Express (FAX) National
Tra¡sit Data Base Report (NTD) for each fiscal year during the term of this AGREEMENT beginning with
FY2015 and ending with FY2019.
(d) For each such fiscal year, AUDITOR shall perform compliance testing in accordance with
and related to the types of compliance requirements described in the Passenger Fãcility Charge Audit
Guide for Public Agencies (Guide) issued by the Federal Aviation Adminisiration applicablð to the
Airport's Passenger Facility Charge (PFC) program.
(e) lt is understood that since AUDITOR'S examinations as described in Subsections.l(a)
through 1(b), above, will be based on the concept of testing the data being examined, there is risk thai
material errors, irregularities, and illegal acts, if they exist, will not be detected. However, AUDITOR shall
immediately notify CITY if any such matters are disclosed or come to AUDITOR'S attention during their
examinations.
City of Fresno 0612015 Page 2
(f) AUD|TOR
performed pursuant to this
amended in 1996, and US.
Local Governments and No
U.S. Department of Transp
not unreasonably refused.
(g) AUDrroR.shail compry with the singre Audit Act of 1984 as us.office of Management and Budget (oMB) circular Á-tge, nuoits of state a andNon-Profit organizations as revised in 20b3 and 2007 in inat ány instances e offederal funds or instances of serious non-compliance with applicaite statutes or regulations which cometo the attention of AU-DlroR during the performance of the särvices hereunder sna'il be reported to FTAand clrY's Finance Director/controller, Audit committee and city Management.
(h) Upon request and written authorization of CITY'S Finance Director/Controller, AUDIToRshall provide assistance in the preparation.of anyleport required by the state oióãlifornia. upon suchrequest and prior to performing the work, AUDITOR shall próvide Fiñance Directo/Controller with its costto prepare the report(s), including the hourly rates in accoidance with Subsectiol ái¡j, ù"tow. AUD¡ToRshall not perform the work unless Financã. Director/controller, after conside¡ng Iíåh cost, authorizesAUDITOR, in writing, to prepare the report(s)
(i) AUDITOR shall issue all reports pursuant to this AGREEMENT in accordance with laws,regulations, and professionalstandards appiicable to the services hereunder.
û) For each fiscal yea
Mayor, Council, Audit Committee
observed by AUDITOR for economi
CITY'S utilization of its resource
applicable, in a separate letter to ClTy'S Finance Di
improvement in the Finance Department. This le
issuance of the CAFR, immediately following the
(k) AUDIToR shall cause said auditing services to be.performed by qualified persons havingexperience suitable to the positions and experiencãspecified in Subsection gtOl, oãiã;-
2-Term.
3. Compensation.
(a) AUDIToR'S sole compensation for satisfactory performance of all services required orrendered pursuant to this AGREEMENT for each fiscal yeai shall be a total fee not to exceed therespective "All-i onal Fee" amount set forth ln Subsection 3(c), below, paid in accordancewith the hourly n subsection 3(b), below, and limited ov irre rrornir set forth for therespective servi 3(c). such totai fee amount includes allexpenses incurred by AUDlroRin performance
City of Fresno 0612015 Page 3
(b) Except for FY2016 through FY2019 services performed pursuant to Subsection '1(h) of
this AGREEMENT, all services shall be paid at the following hourly rates:
Rate Per HourPartner $182.95Manager $1S2.9S
Supervisory staff $102.95Staff $ 72.95
Support Staff $ 42.95
Services performed pursuant to Subsection 1(h) for FY2015 shall be paid at the preceding hourly rates.
Any increase to the hourly rates for such services for subsequent fiscal years shall not exceed five
percent (5%) of the hourly rates for the immediately preceding fiscal year.
(c) ln no event, shall the fee and expenses for the respective audit service(s) exceed the
amounts indicated below:
Services
FY 15 FY 16 FY 17 FY 18
. CAFR & Letters*129,745 $ 132,350 '135,050 $ 137,675
Single Audit
Health & Welfare (no standalone
report)
Fresno Area Express (FAX) NTD
Report
Passenger Facility Charges (PFC)
Airports - billed to Airports
Out of Pocket Expenses**
Total Professional Fees
19,410 19,875 20,300 20,700
6,835
5,295
6,985
5,425
7,125
5,510
7,295
5,595
5,665 5,740 5,865 5,950
3,0s0 3,110 3,120
$170,000 $173,485 $176,970 $180,540
*Letters - Subsection 1O herein.
"* Meals & Lodging, Transportation, Mail/Courier/Delivery Charges.
(d) Statements may be rendered not more than once per month, as the work progresses.
Such statements shall be payable by CITY within 45 days of receipt. ClTy shall not be oblilated to
reimburse any expense for which it has not received a detailed invoice with applicable cıpies of
representative and identifiable receipts or records substantiating such expense.
(e) The parties may modify this AGREEMENT to increase the scope of services or provide
for the rendition of services n_ot required by this AGREEMENT, which modification shall include an agreed
upon increase in AUDITOR'S compensation. Any increase or change in the scope of services must be
made by written amendment to the AGREEIVIENT signed by an authorized representative for each party.
AUDITOR shall not be entitled to any additional compensation if work is performed prior to a signjO
written amendment.
3,325
City of Fresno 0612015 Page 4
4. AdditionalWork or Extraordinarv Services.
The maximum annual "All-inclusive Professional Fee" in Section 3, above, contemplates that
conditions satisfactory to the normal progress and completion of the examinations will be encountered
and CITY accounting personnel will furnish assistance in connection with the preparation of necessary
detail schedules and the production of documents for AUDITOR'S inspection. ln the event that
extraordinary circumstances are encountered making it necessary for AUDITOR to do additional work,
AUDITOR shall report such conditions immediately to CITY'S Finance Director/Controller, prior to
performing the additionalwork, for Finance Director/Controller's written directions. AUDITOR shall not be
entitled to any additional compensation if work is performed prior to CITY'S Finance Director/Controller
providing written authorization for such work and compliance with Subsection 3(e), above. All
AUDITOR'S requests for authorization to perform additional work shall be submitted to the Finance
Director/Controller. Any approved additional work shall be compensated based on the hourly rates in
Subsection 3(b), above.
5. Completion and Number of Audit Reports.
(a) AUDITOR shall issue one original report on the combined general purpose financial
statements to be included in the CAFR. AUDITOR shall issue thirty (30) copies of the single audit reports
and twenty-five (25) copies of all other financial statements and audit reports to be issued in accordance
with Section 1 of this AGREEMENT. AUDITOR agrees to complete and provide all reports for the
respective fiscal year no later than March 28, immediately following, provided that the books and records
are closed for audit, and all account analyses and requested schedule preparation is completed by the
dates, or any extensions, agreed upon by CITY and AUDITOR.
(b) lt is agreed that AUDITOR shall be liable for and shall pay to CITY, as fixed, and agreed,
liquidated damages, and not as a penalty, the sum of $500 per CITY work week for each CITY work week
of delay in providing the reports from the date for completion as specified in Subsection 5(a), above, or in
any written extension of time granted by CITY. CITY may withhold such sum accrued from any payment
due AUDITOR pursuant to this AGREEMENT. For purposes of this subsection, "CITY work week" shall
mean five (5) CITY business days. lf AUDITOR is delayed in performing due to a cause(s) not within its
control, AUDITOR will not be liable for such delay in its performance and the period for performance will
be extended by the same period of such delay. AUDITOR shall notify CITY within 24 hours of any delay
of the cause(s) for such delay. lf CITY and AUDITOR are unable to agree as to the cause of AUDITOR'S
delay herein, the parties agree to submit to non-binding arbitration, before an arbitrator and at a location
agreed upon by both parties, at the earliest practicable date. The cost of arbitration will be shared equally
by both parties.
(c) CITY Finance Director/Controller and his/her staff will provide a minimum of 400 hours of
combined staff support time during the period of June through December of each calendar year of this
AGREEMENT. A Principal AccountanVSenior Accountant-Auditor and/or an Accountant-Auditor and all
other staff as necessary shall be assigned to the audit during such period. Audit schedules to be
prepared by CITY will be provided, following request by AUDITOR, by the date(s) mutually agreed upon
by the parties. Any extensions of time for providing such audit schedules will be mutually agreed upon by
the parties.
(d) Time is of the essence in the performance of this AGREEMENT by both parties.
6. Detection of lrregularities and lllegal Acts.
CITY and AUDITOR acknowledge that the financial statement audits covered by the
AGREEMENT shall be conducted in accordance with generally accepted auditing standards,
"Governmental Auditing Standards" issued by the Comptroller General of the United States and the
provisions of the Single Audit Act, and the OMB Circular A-133 and "OMB's Compliance Supplement
published by the U.S. Office of Management and Budget." Such standards, circulars, supplements or
City of Fresno 06/2015 Page 5
gu¡des require that the audits be planned and performed to obtain reasonable rather than absolute,
assurance about whether the financial statements are free of material misstatement whether caused by
error, fraudulent financial reporting or misappropriation of assets. According, a material misstatement,
whether caused by error, fraudulent financial reporting or misappropriation of assets, may remain
undetected.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. As a result, an audit is not designed to detect errors or fraud immaterial to the
financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation.
AUDITOR'S work shall provide a reasonable basis for its reports on the financial statements and on
matters of compliance.
7. Notification to Citv of lrreqularities / llleqal Acts.
AUDITOR shall make an immediate, written report of any and all irregularities and illegal acts or
indications of illegal acts of which they become aware. Such reports shall be addressed to the following
persons.(a) lf committed by an agent or employee of, or by, CITY Finance Director/Controller;
direct notification to the City Manager, Audit Committee and the City Attorney.
(b) lf committed by an agent or employee of, or by, CITY Chief Administrative
Officer(s), i.e., City Managers or Deputy City Manager; direct notification to the City Council, Audit
Committee and City Attorney.
(c) lf committed by an agent or employee of, or by, the Mayor and/or any Council
Members; direct notification to the City Council, Audit Committee the City Attorney and any other person
or entity as identified under applicable law.
8. Engaqement Letter
At the beginning of each engagement year, the CITY will sign an engagement letter, as required by
industry standards, which summarizes and reaffirms the aspects of the written contract between the
AUDITOR and the CITY, stating both parties' understanding of the professional relationship. The letter
allocates, in the same limiting language as the contract, the responsibilities of the engagement for the
AUDITOR and the CITY, and it's a communication link, providing both parties with a focus and an
opportunity to recall the specifics of the contract.
The letter restates what the engagement entails, ensuring that the AUDITOR and the CITY have the
same point of view as to the intent of the engagement.
The engagement letter will cover:
. the purpose of the engagement;. specifically what the AUDITOR "will and won't do" (the scope);. CITY instructions and responsibilities;. reliance on facts the CITY gives the AUDITOR;. known adverse or negative conditions or circumstances;. billing rates and estimates;. request for the CITY'S signature; and. instructions to return the signed engagement letter.
City of Fresno 0612015 Page 6
ln addition, engagement letters may include:
. warn¡ngs about inadequate internal control;. limitations on distribution of financial statements (what the CITY intends to do with them);. record retention policy.
Any discrepancies and/or inconsistencies between the Engagement Letter and the AGREEMENT will be
superseded by the AGREEMENT.
9. Audit Representation Letter.
During the course of the audit engagement, the parties acknowledge that CITY personnel will
make a variety of oral representations in response to questions raised by AUDITOR. CITY also
acknowledges that Statement of Auditing Standard No. 19 requires that written representation must be
obtained by AUDITOR which confirms the oral representations. While there is no comprehensive list of
items that must be included in a representation letter, SAS No. 19 identifies the following items that will
ordinarily be included:
(a) The City's statement of responsibility for the financial statements(b) The availability of all records including minutes of Council meetings and/or other
meetings as may be appropriate(c) Statement that there are no significant misstatements in the statements and no
unrecorded transactions.(d) Related party disclosures(e) The City's noncompliance with any contracts(Ð Subsequent events(g) lrregularities(h) Restrictive Covenants(i) Noncompliance with reporting requirements of regulatory agenciesÜ) Plans and intentions that affect amounts on the financial statements(k) lnventory representations(l) Losses from sales commitments(m) Title to assets, liens, or pledges as collateral(n) Repurchase agreements(o) Losses from purchase commitments(p) lllegal acts and related loss contingencies(q) Other liabilities and gain or less contingencies(r) Unasserted claims or assessments that counsel feels are likely to be asserted(s) Options, agreements and restrictions on assets(t) Statement that the representation letter pertains to the financial statements
10. Responsibilities of Each PaÉv to the AGREEMENT.
AUDITOR will advise CITY of generally accepted accounting principles applicable to its activities
as a local government unit. However, management of CITY remains responsible for (a) preparation of
accurate financial statements prepared in accordance with generally accepted accounting principles
applicable to governmental units such as CITY; (b) establishing and maintaining effective internal control
over financial reporting and safeguarding of assets; (c) properly recording transactions in the records; and(d) identifying and ensuring that CITY complies with the laws, regulations and generally accepted
accounting principles applicable to its activities.
City of Fresno 0612015 Page 7
11. Reports on Gompliance and Internal Gontrol.
AUDITOR shall issue all reports pursuant to AGREEMENT in accordance with applicable laws,
regulations, and professional standards. AUDITOR's reports on compliance will address material errors;
fraud; violations of compliance requirements and other responsibilities imposed by state and federal
statutes and regulations and assumed by contracts; and any state or federal grant, entitlement or loan
program questioned costs of which AUDITOR becomes aware, consistent with requirements of the
standards and circulars identified in AGREEMENT. AUDITOR's reports on internal control shall include
any reportable conditions and material structural or operational weaknesses in systems of CITY of which
AUDITOR becomes aware as a result of obtaining an understanding of internal control consistent with
requirements of the standards and circulars identified in the AGREEMENT.
12. Circumstances Leadins to Termination of AGREEMENT.
lf circumstances arise relating to the conditions of CITY records, the availability of sufficient,
competent evidential matter, or indications of a significant risk of material misstatement of the financial
statements because of error, fraudulent financial reporting, misappropriation of assets or noncompliance
which are not curable within seven (7) calendar days and which in AUDITOR's professional judgment
prevents AUDITOR from completing the audits; AUDITOR retains the right, upon not less than seven (7)
calendar days written notice to CITY, to take a course of action permitted by professional standards, law,
and in accordance with provisions contained in Subsection 12 (c) of this AGREEMENT.
13. Termination of AGREEMENT.
(a) During any fiscal year, either party may terminate this AGREEMENT without cause, upon
at least one hundred and twenty (120) calendar days prior written notice of termination to the other party
before the end of such fiscal year.
(b) lf, for any reason, CITY determines there is insufficient funding available for any fiscal
yea(s) and the City Council fails to appropriate funds for payment of AUDITOR hereunder, then CITY
may terminate this AGREEMENT immediately without any liability whatsoever of CITY to AUDITOR for
breach of contract, default, detrimental reliance or any other basis in law or equity, upon written notice of
termination to AUDITOR in the manner provided herein.
(c) This AGREEMENT may be terminated immediately by either party upon sixty (60)
calendar days prior written notice should the other party fail substantially to observe, fulfill or perform any
obligation, covenant, term or condition in accordance with this AGREEMENT. A party will have failed
substantially to observe, fulfill or perform any obligation, covenant, term or condition of this AGREEMENT,
if such failure is not cured within such sixty (60) calendar days prior written notice and this shall constitute
a material default and breach of this AGREEMENT.
(d) ln the event of termination not due to the material default of AUDITOR, AUDITOR shall
be paid compensation for services satisfactorily performed prior to the effective date of the notice of
termination. ln the event of termination due to the material default of AUDITOR, CITY may withhold an
amount that would othen¡vise be payable as an offset to, but not in excess of, CITY damages caused by
such failure.
(e) This AGREEMENT shall terminate without any liability of CITY to AUDITOR upon the
AUDITOR'S filing for protection under the federal bankruptcy laws, or any bankruptcy petition or petition
for receiver commenced by a third party against AUDITOR.
(f) lmmediately upon any termination or expiration of this AGREEMENT, AUDITOR shall (i)
immediately stop all work hereunder, (ii) immediately cause any and all of its subcontractors to cease
work; and (iii) return to CITY any and all unearned payments, if any, and all properties and materials in
the possession of AUDITOR that are owned by CITY. Subject to the terms of this AGREEMENT,
City of Fresno 0612015 Page B
AUDITOR shall be paid compensation for services satisfactorily performed prior to the effective date oftermination. AUDITOR shall not be paid for any work or services performed or costs incurred which
reasonably could have been avoided.
(g) ln the event of termination due to failure of AUDITOR to satisfactorily perform in
accordance with the terms of this AGREEMENT, CITY may withhold an amount that would-otñerwise bepayable as an offset to, but not in excess of, CITY's damages caused by such failure. ln no event shall
any payment impair or prejudice any remedy available to the CITY with respect to breach.
(h) ln the event CITY terminates the AGREEMENT pursuant to Subsection 12(c), above, or
upon any breach of the AGREEMENT by AUDITOR, CITY may (i) exercise any right, remedy (in contract,
law or equity), or privilege which may be available to it under applicable laws ôf the State oi California orany other applicable law; (ii) proceed by appropriate court action to enforce the terms of the
AGREEMENT; and/or (iii) recover all direct, indirect, consequential, economic or incidental damages forthe breach of the AGREEMENT. lf it is determined that CITY improperly terminated this AGREE-MENT
for default, such termination shall be deemed a termination for convenience.
(i) AUDITOR shall provide CITY with adequate written assurance of future performance,
upon Administrator's request, in the event AUDITOR fails to comply with any terms or conditions in this
AGREEMENT.
0) AUDITOR shall be liable for default unless nonperformance is caused by an occurrence
beyond the reasonable control of AUDITOR and without its fault or negligence such as, acts of God or thepublic enemy, acts of CITY in it contractual capacity, fire, floods, epidemics, quarantine restrictions,
strikes, unusually severe weather, and delays of common carriers. AUDITOR shall notify Administrator in
writing as soon as it is reasonable possible after the commencement of any excusable delay, setting forththe full particulars in connection therewith, and shall remedy such oócurrence with ãll reasònable
dispatch, and shall promptly give written notice to Administrator of the cessation of such occurrence.
(k) No remedy or election hereunder shall be deemed exclusive but shall, wherever possible,
be cumulative with all other remedies at law or in equity.
14. Confidential lnformation.
Any reports, information, or other data prepared or assembled by AUDITOR pursuant to this
AGREEMENT shall not be made available to any individual or organization by AUDITOR without the prior
written approval of CITY. During the term of this AGREEMENT, and theieafter, AUDITOR shall not,without the prior written consent of CITY, disclose to anyone any Confidential lnformation. AUDITORagrees to comply with Rule 301 of the American lnstitute of Certified Public Accounts Code of
Professional Conduct, Confidential Client lnformation:
A member in public practice shall not drsc/ose any confidentiat client information without the
specific consent of the client.
This rule shall not be construed (1) to relieve a member of his or her professional obtigation s
under rules 202 IET Secfion 202.01] and 203 [ET Section 203.01], (2) to affect in any way the
member's obligation to comply with a validty issued and enforceable subpoena or summons, or
prohibit a member's complic_ate with applicable laws and government regulations' (3) to prohibit
review of a memberb professlonal practice under ATCPA or sfafe CÞA society of Board of
Accountancy authorization, or (4) to preclude a member from initiating a complaint with, or
responding to any inquiry made by, the professional ethics divisions or triat board of the tnstituteor a duly constituted investigative or disciplinary body of a state CPA society or Board of
Accountancy.
City of Fresno 0612015 Page 9
Members of any bodies identified in (4) above and members involved with professional practice
reviews identified in (3) above shall not use fo their own advantage or dlsc/ose any member's
confidential client information that col??es to their attention in carrying out those activities. This
prohibition shall not restrict members'exchange of information in connection with the investigative
or disciplinary proceedings described in (4) above or the professiona/ practice reviews described
in (3) above.
The term Confidential lnformation for the purposes of this AGREEMENT shall include all
proprietary and confidential information of CITY, including but not limited to business plans, marketing
plans, financial information, designs, drawings, specifications, materials, compilations, docLrments,
instruments, models, source or object codes and other information disclosed or submitted, orally, in
writing, or by any other medium or media. All Gonfidential lnformation shall be and remain confidential
and proprietary in CITY.
15. Ownership of Documents.
All work papers of AUDITOR shall remain the property of AUDITOR. ln addition, to the extent
that AUDITOR utilizes any of its property (including, without limitation, any hardware or software of
AUDITOR or any proprietary or confidential information or trade secrets of AUDITOR) in performing the
services hereunder, such property shall remain the property of AUDITOR and CITY shall acquire no right
or interest in such property.
16. Use of Auditor's Report for Other Purposes.
AUDITOR's reports on the financial statements will not be included in an official statement or
other document involved with the sale of debt instruments without AUDITOR's prior consent. Such
consent by AUDITOR will not be required in the event such reports, financial statements and references
to AUDITOR or its audit are a part of any litigation or disclosed by CITY as required by law or order of a
court of competent jurisdiction.
17. ProfessionalSk¡ll.
It is mutually understood and agreed by and between the parties hereto that inasmuch as
AUDITOR and its subcontractors, if any, represents to CITY that AUDITOR is skilled in the profession and
shall perform in accordance with the standards of said profession necessary to perform the work agreed
to be done by it under this AGREEMENT, CITY relles upon the skill of AUDITOR and any subcontractors
to do and perform its work in a skillful manner and AUDITOR agrees to thus perform its work and require
the same of any subcontractors. Acceptance of its work by CITY shall not operate as a release of
AUDITOR or any subcontractors from said standard of care and workmanship.
18. lndemnification.
To the furthest extent allowed by law, AUDITOR shall indemnify, hold harmless and defend CITY
and each of its officers, officials, employees, agents and volunteers from any and all loss, liability, fines,
penalties, forfeitures, costs and damages (whether in contract, tort or strict liability, including, but not
limited to personal injury, death at any time and property damage) and from any and all claims, demands
and actions in law or equity (including reasonable attorney's fees and litigation expenses) that arise out
of, pertain to, or relate to the negligence, recklessness or willful misconduct of AUDITOR, its principals,
officers, employees, agents or volunteers in the performance of this AGREEMENT.
lf AUDITOR should subcontract all or any portion of the work to be performed under this
AGREEMENT, AUDITOR shall require each subcontractor to indemnify, hold harmless and defend CITY
and each of its officers, officials, employees, agents and volunteers in accordance with the terms of the
preceding paragraph.
City of Fresno 06i2015 Page 10
This section shall survive termination or expiration of this AGREEMENT.
19. lnsurance.
Throughout the life of this AGREEMENT, AUDITOR shall pay for and maintain in full force and
effect all insurance as required in Exhibit B which is incorporated into and part of this AGREEMENT, with
an insurance company(ies) either (i) admitted by the California lnsurance Commissioner to do business in
the State of California and rated no less than "A-Vll" in the Best's lnsurance Rating Guide, or (ii) as may
be authorized in writing by CITY's Risk Manager or his/her designee at any time and in his/her sole
discretion. The required policies of insurance as stated in Exhibit B shall maintain limits of liability of not
less than those amounts stated therein. However, the insurance limits available to CITY, its officials,
employees, agent and volunteers as additional insured's, shall be the greater of the minimum limits
specified therein or the full limit of any insurance proceeds to the named insured.
lf at any time during the life of the AGREEMENT or any extension, AUDITOR or any of its
subcontractors fail to maintain any required insurance in full force and effect, all services and work under
this AGREEMENT shall be discontinued immediately, and all payments due or that become due to
AUDITOR shall be withheld until notice is received by CITY that the required insurance has been restored
to full force and effect and that the premiums therefore have been paid for a period satisfactory to CITY.
Any failure to maintain the required insurance shall be sufficient cause for CITY to terminate this
AGREEMENT. No action taken by CITY pursuant to this section shall in any way relieve AUDITOR of its
responsibilities under this AGREEMENT. The phrase "fail to maintain any required insurance" shall
include, without limitation, notification received by CITY that an insurer has commenced proceedings, or
has had proceedings commenced against it, indicating that the insurer is insolvent.
The fact that insurance is obtained by AUDITOR shall not be deemed to release or diminish the
liability of AUDITOR, including, without limitation, liability under the indemnity provisions of this
AGREEMENT. The duty to indemnify CITY shall apply to all claims and liability regardless of whether any
insurance policies are applicable. The policy limits do not act as a limitation upon the amount of
indemnification to be provided by AUDITOR. Approval or purchase of any insurance contracts or policies
shall in no way relieve from liability nor limit the liability of AUDITOR, its principals, officers, agents,
employees, persons under the supervision of AUDITOR, vendors, suppliers, invitees, consultants, sub-
consultants, subcontractors, or anyone employed directly or indirectly by any of them.
Upon request of CITY, AUDITOR shall immediately furnish CITY with a complete copy of any
insurance policy required under this AGREEMENT, including all endorsements, with said copy certified by
the unden¡vriter to be a true and correct copy of the original policy. This requirement shall survive
expiration or termination of this AGREEMENT.
lf AUDITOR should subcontract all or any portion of the work or services to be performed under
this AGREEMENT, AUDITOR shall require each subcontractor to provide insurance protection in favor of
CITY and each of its officers, officials, employees, agents and volunteers in accordance with the terms of
this section, except that any required certificates and applicable endorsements shall be on file with
AUDITOR and CITY prior to the commencement of any work or services by the subcontractor. AUDITOR
and any subcontractors shall establish additional insured status for CITY, its officers, officials, employees,
agents and volunteers by using lnsurance Service Office (lSO) From CG 20 1011 85 or both CG 20 10
10 01 and CG 20 37 10 O1 or by an executed manuscript company endorsement providing additional
insured status as broad as that contained in ISO Form CG 20 10 11 85.
City of Fresno 0612015 Page 11
20. GeneralTerms.
(a) E*.9P!.q9 otherwise provided by law, all notices expressly required of ClTy within thebody of this AGREEMENT, and not otherwise specifically provided foi, shali be òffective onty if signed byCITY'S Finance Director/Controller.
(b) ln performing the work or services to be provided hereu rì\/or retain the services of any person while such person eiiher is employe ;iclrY council, commission, board, committee, or similar clry body. Íh inwriting by clrY's chief Administrative officer (city Manager) if no actual
(c) AUDTTOR agrees that duly authoriz
agency, currently the Department of Transpo
direct cognizant agency, and the Comptroller
three years after final payment under ihis AG
non-proprietary documents prepared in connection
upon reasonable notice to AUDITOR during normal business hours of AUDITOR. As used in thissubsection, non-proprietary documents are doluments, workpapers, and other materials which are not, ordo not contain any of AUDITOR'S proprietary or confidential'information or trade secrets. AUDIToRagrees to retain said non-proprietary documents for auditing purposes for ClTy, ClTy,s federal cognizantagency, and comptroller General of the united states uniil irre expiration är tnr"à years after finalpayment under this AGREEMENT.
Records of AUDITOR'S expenses pertainin
recognized accounting basis and shall be availa
request during regular business hours thr
years after final payment and for any peri
and records of AUDITOR pertaining to
purpose of making audits, examinations, excerpts, and transcriptions for the same period of time.
This Subsection shall survive expiration or termination of this AGREEMENT.
(d) Prior to execution of this AGREEMENT by CITY, AUDITOR shail have provided evidenceto CITY that AUDIToR is licensed to perform the servicel called for by this ncnÈÈvle¡rT. tf AUD¡T9Rshould subcontract all or any portion of the work to be performed un'der this AGREEMENT, AUDIToRshall require each subcontrryJor to provide evidence to cirY that subcontractor is licensed to perform theservices called for by this AGREEMENT (or that no license is required) before neginninj work.
(e) CITY shall give reasonably prompt consideration to all matters submitted to it byAUDITOR for approval to the end that there w¡ti ¡e no substantial delays in AUDIToR'S progr", of work.
(Ð CITY shall provide AUDITOR with reasonable access to all necessary records, placesand adequate working space to perform their duties rereunder as necessary to be done at the location ofthe records. The books and records to be audited are maintained or are located at clTy's finance officeat 2600 Fresno Street, Fresno, California. These books and records will be made available to AUDITORby CITY for their use at said office during "regular" business hours (B a.m. to S p r. Monday throughFriday, except holidays).
21. Conflict of lnterest and Non-Solicitation.
(a) Prior to CITY'S execution of this AGREEMENT, AUDITOR shalt complete a City ofFresno conflict of interest disclosure statement in the form as set forth attached hereto as Exhibit A.During the term of this AGREEMENT, AUDITOR shall have the obtigation ano JuÇ to immeoiatety notifyCITY in writing of any change to the information provided by AUDTTOR on Exhibit A.
City of Fresno 0612015 Page 12
(b) AUDITOR shall comply, and require any of its subcontractors to comply, with all
applicable (i) professional canons and requirements governing avoidance of impermissible client conflicts;
and (ii) federal, state and local conflict of interest laws and regulations including, without limitation,
California Government Code 1090 et. seq., the California Political Reform Act (Government Code Section
87100 et. seq.) and the regulations of the Fair Political Practices Commission concerning disclosure and
disqualification (2 California Code of Regulations Section 18700 et. seq.). At any time, upon written
request of GITY, AUDITOR shall provide a written opinion of its legal counsel and that any subcontractor
that, after a due diligent inquiry, AUDITOR and the respective subcontracto(s) are in full compliance with
all laws and regulations. AUDITOR shall take, and require any subcontractors to take, reasonable steps
to avoid any appearance of a conflict of interest. Upon discovery of any facts giving rise to the
appearance of a conflict of interest, AUDITOR shall immediately notify CITY of these facts in writing.
(c) ln performing the work or services to be provided hereunder, AUDITOR shall not employ
or retain the services of any person while such person either is employed by CITY or is a member of any
CITY council, commission, board, committee, or similar CITY body. This requirement may be waived in
writing by the CITY Manager, if no actual or potential conflict is involved.
(d) AUDITOR represents and warrants that it has not paid or agreed to pay any
compensation, contingent or othenruise, direct or Ìndirect, to solicit or procure this AGREEMENT or any
rights/benefits hereunder.
(e) Neither AUDITOR, nor any of AUDITOR'S subcontractors performing any work
hereunder, shall bid for, assist anyone in the preparation of a bid for, or perform any work pursuant to,
any other AGREEMENT related hereto unless fully disclosed to and approved by the City Manager, in
advance and in writing. AUDITOR and any of its subcontractors shall have no interest, direct or indirect,
in any other AGREEMENT with a third party in connection with these services unless such interest is in
accordance with all applicable law and fully disclosed to and approved by the City Manager, in advance
and in writing. Notwithstanding any approval given by the City Manager under this provision, AUDITOR
shall remain responsible for complying with section 20(b), above.
(Ð lf AUDITOR should subcontract all or any portion of the work to be performed or services
to be provided under this AGREEMENT. AUDITOR shall include the provision of this section 20 in each
subcontract and require its subcontractors to comply therewith.
(g) This Section 20 shall survive expiration or termination of this AGREEMENT.
22. Nondiscrimination.
AUDITOR shall not employ discriminatory practices in the provision of services, employment of
personnel, or in any other respect on the basis of race, religious creed, color, national origin, ancestry,
physical disability, mental disability, medical condition, marital status, sex, age, sexual orientation,
ethnicity, status as a disabled veteran or veteran of the Vietnam era.
During the performance of this AGREEMENT, AUDITOR agrees as follows:
(a) AUDITOR will comply with all laws and regulations, as applicable. No person in the
United States shall, on the grounds of race, religious creed, color, national origin, ancestry, physical
disability, mental disability, medical condition, marital status, sex, age, sexual orientation, ethnicity, status
as a disabled veteran or veteran of the Vietnam era be excluded from participation in, be denied the
benefits of, or be subject to discrimination under any program or activity made possible by or resulting
from this AGREEMENT.
(b) AUDITOR will not discriminate against any employee or applicant for employment
because of race, religious creed, color, national origin, ancestry, physical disability, mental disability,
City of Fresno 0612015 Page 13
medical condition, marital status, sex, age, sexual orientation, ethnicity, status as a disabled veteran orveteran of the Vietnam era. AUDITOR shall take affirmative action to ensure that applicants areemployed, and the employees are treated during employment, without regard to their ràce, religiouscreed, color, national origin, ancestry, physical disability, mental disabilityl medical condition, mãritalstatus, sex, age, sexual orientation, ethnicity, status as a disabled veteran or veteran of the Vietnam era.Such action shall include, but not be limited to, the following: employment, upgrading, demotion ortransfer; recruitment or recruitment advertising; layoff or termination; iates of bãV or other forms ofcompensation; and selection for training, including apprenticeship. AUDITOR agrees to post inconspicuous places,..available to employees and applicants for employment, noticeJ setting forth theprovision of this nondiscrimination clause.
ll, in all solicitations or advertisem
alified applicants will receive cons
national origin, ancestry, phys
age, sexual orientation, ethnicity,
(d) AUDITOR will send to each labor union or representative of workers with which it has acollective bargaining agreement or other agreement or undersianding, a notice advising such labor unionor workers' representatives of AUDITOR'S commitment under this éection and shall post copies of thenotice in conspicuous places available to employees and applicants for employment.
(e) lf AUDITOR should subcontract all or any portion of the services to be performed underthis AGREEMENT, AUDITOR shall cause each subcontiactor to also comply with the requirements ofthis section.
23. Independent Contractor.
(a) ln the furnishing of the services provided for herein, AUDITOR is acting solely as anindependent contractor. Neither AUDITOR, nor any of its officers, agents or employees shall be deemedan officer, agent, employee, joint venturer, partner or associate of ClÍY for any pur[o.". ClTy shall haveno right to control or supervise or direct the manner or method by which nUOifOi shall perform its workand functions' However, CITY shall retain the right to administér this AGREEMENT so as to verify thatAUDITOR is performing its obligations in accordance with the terms and conditions thereof.
(b) The AGREEMENT does not evidence a partnership or joint venture between AUDIT9Rand CITY' Except to the extent othen¡irise provided in this AGREEMEÑT, AUDITOR shall bear its owncosts and expenses in pursuit thereof.
(c) Because of its status as an independent contractor, AUDITOR and its officers, agentsand employees shall have absolutely no right to employment rights and benefits available to -clry
employees. AUDITOR shall be solely liable and responsible for ail payrott and tax withhotding and for
loyee benefits including, without limitation, health,
with its other obligations under this AGREEMENT,
efend and save ClTy harmless from all matters
yment of AUDITOR'S employees, including, without
oyment insurance withholding, payment ofw*hho''s, ;iiiliJ:.?:X"Ëìi9 ffå'å'rï:1,ïiJ:ii,:entitlements' yees of crry whether arising 'by re"ron of anycommon law or other theory. lt is acknowteïgéO that during theterm of this iding services to others unrelatðd to clry or- thisAGREEMEN
City of Fresno 0612015 Page 14
24. Notices.
Any notice required or intended to be given to either party under the terms of this AGREEMENT
shall be in writing and shall be deemed to be duly given if delivered personally, transmitted by facsimile
followed by telephone confirmation of receipt, or sent by United States registered or certified mail, with
postage prepaid, return receipt requested, addressed to the party to which notice is to be given at the
party's address set forth on the signature page of this AGREEMENT or at such other address as the
parties may from time to time designate by written notice. Notices served by United States mail in the
manner above described shall be deemed sufficiently served or given at the time of the mailing thereof.
25. Bindinq.
Subject to Section 25 below, once this AGREEMENT is signed by all parties, it shall be binding
upon, and shall inure to the benefit of, all parties, and each parties' respective heirs, successors, assigns,
transferees, agents, servants, employees and representatives.
26. Assiqnment.
This AGREEMENT is personal to AUDITOR and there shall be no assignment by AUDITOR of its
rights or obligations under this AGREEMENT without the prior written approval of CITY. Any attempted
assignment by AUDITOR, its successors or assigns, shall be null and void unless approved in writing by
CITY.
AUDITOR hereby agrees not to assign the payment of any monies due AUDITOR from CITY
under the terms of this AGREEMENT to any other individual(s), corporation(s) or entity(ies). CITY retains
the right to pay any and all monies due AUDITOR directly to AUD|TOR,
27. Gompliance With Law.
ln providing the services required under this AGREMENT, AUDITOR shall at all times comply
with all applicable laws of the United States, the State of California and CITY, and with all applicable
regulations promulgated by federal, state, regional, or local administrative and regulatory agencies, now
in force and as they may be enacted, issued, or amended during the term of this AGREEMENT.
28.Waiver.
The waiver by either party of a breach by the other of any provision of this AGREEMENT shall not
constitute a continuing waiver or a waiver of any subsequent breach of either the same or a different
provision of this AGREEMENT. No provisions of this AGREEMENT may be waived unless in writing and
signed by all parties to this AGREEMENT. Waiver of any one provision herein shall not be deemed to be
a waiver of any other provision herein.
29. Governing Law and Venue.
This AGREEMENT shall be governed by, and construed and enforced in accordance with, the
laws of the State of California, excluding, however, any conflict of laws rule which would apply the law of
another jurisdiction. Venue for purposes of the filing of any action regarding the enforcement or
interpretation of this AGREEMENT and any rights and duties hereunder shall be Fresno County,
California.
City of Fresno 0612015 Page 15
30. Headinss.
The section headings in this AGREEMENT are for convenience and reference only and shall notbe construed or held_in aly way to explain, modify or add to the interpretation or meaning of theprovisions of this AGREEMENT.
31. Severabilitv.
The provisions of this AGREEMENT are severable. The invalidity or unenforceability of any oneprovision in this AGREEMENT shall not affect the other provisions.
32. lnterpretation.
The parties acknowledge that this AGREEMENT in its final form is the result of the combined
efforts of the parties and that, should any provision of this AGREEMENT be found to be ambiguous in any
way, such ambiguity shall not be resolved by construing this AGREEMENT in favor of or alainst eitherparty, but rather by construing the terms in accordance with their generally accepted meaningl
33. Attornev's Fees.
lf either party is required to comme¡ce any proceeding or legal action to enforce or interpret anyterm, covenant or condition of this AGREEMENT, tre prevailing party in such proceeding or action shaíl
be entitled to recover from the other party its reasonable attorney's fees and legal expenses.
34. Precedence of Documents.
ln the event of any conflict between the body of this AGREEMENT and any Exhibit or Attachment
hereto, the terms and conditions of the body of this AGREEMENT shall control anó take precedence overthe terms and conditions expressed witlrin the Exhibit or Attachment. Furthermore, any terms orconditions contained within any Exhibit or Attachment hereto which purport to modify the allocation of ¡sk
between the parties, provided forwithin the body of this AGREEMENT, shall be nullãnd void.
35. Gumulative Remedies.
No remedy or election hereunder shall be deemed exclusive but shall, whenever possible, be
cumulative with all other remedies at law or in equity
36. Extent of AGREEMENT.
Each party acknowledges that they have read and fully understand the contents of thisAGREEMENT. This AGREEMENT represents the entire and integrated AGREEMENT between theparties with respect to the subject matter hereof and supersedes all piior negotiations, representations oragreements, either written or oral. This AGREEMENT may be modified onìy by written'instrument duly
authorized and executed by both CITY and AUDITOR.
37. Deleqation of Duties.
AUDITOR will not delegate or subcontract its responsibilities under this AGREEMENT without theprior written permission of the City of Fresno.
City of Fresno 0612015 Page 16
38. Recvcling Proqram.
ln the event AUDITOR maintains an office or operates a facility(ies), or is required herein to maintain oroperate same, within the incorporated limits of the City of Fresno, AUDITOR at its sole cost and expense
shall:
(i) lmmediately going recycting program, approved byCity's Solid éach otfice ãnd iacitity. ''Literature
describing C om City's Solid Waste Management
Division and tine at (sso¡ozt_tttt.
(ii) lmmediately_contact City's Solid Waste Management Division at (5s9) 621-1452and
schedule a free waste audit, and cooperate wlth such Division in iheir conduct of the
audit for each office and facility.
(¡¡i) Cooperate with and demonstrate to the satisfaction of City's Solid Waste Management
Division the establishment of the recycling program in þaragraph (i) above a-nO tne
ongoing maintenance thereof.
39. No Third Partv Beneficiaries.
The rights, interests, d$ies and obligations defined within this AGREEMENT are intended for the specificparties hereto as identified in the preamble of this AGREEMENT. Notwithstanding anything stated to thecontrary in this AGREEMENT, it is not intended that any rights or interests ¡n tn¡s ÀCRÉEMENT benefit orflow to the interest of any third parties.
40. Exhibits.
Each exhibit and attachment referenced in this AGREEMENT is, by the reference, incorporated into andmade a part of this AGREEMENT.
City of Fresno 0612015 Page 17
CITY OF FRESNO,
a municipal corporation
Fínance Director/City Controller
lN WITNESS WHEREOF, the parties have executed this AGREEMENT at Fresno, California, the day
and year first above written.
BROWN ARMSTRONG
ACCO U NTANCY CORPORATION
APPROVED AS TO FORM:
DOUGLAS SLOAN
City Attorney
).t**f
?¿¡5 S{Èrùtt€swr
torney
Addresses:
CITY:
City of Fresno
2600 Fresno Street, Suite 21-56
Fresno, CA9372t-3622
Phone: (559) 621-7001
FAX: (ss9)488-4636
Attachments:Exhibit A - Conflict of lnterest Disclosure Form
Exhibit B - lnsurance Requirements
q .?-1.tç
Date
Rosalva Flores, CPA
Principa l/Vice-President
AUDITOR:
Brown Armstrong Accountancy Corporation
7673 North lngram, Suite L01
Fresno, CA 93711
Phone: (559) 476-3592
FAX: (661) 324-4997
Chris M.y'
ATTEST:
YVONNE SPENCE
City of Fresno 06/2015 Page L8
(Submit with Proposal)
Proposer's Name Brown Armstrone Accountancv Corporation
EXHIBIT A
CITY OF FRESNO
AGREEMENT FOR PROFESSIONAL AUDIT SERVICES
RFP No:9317
DISCLOSURE OF CONFLICT OF INTEREST - AUDIT SERVICES
YES*NO
t Are you currently in litigation with the City of Fresno or any of ¡ts
asents?X
2 Do you represent any firm, organization or person who is in
litigation with the Citv of Fresno?X
3 Do you currently represent or perform work for any clients who do
business with the City of Fresno?X
4 Are you or any of your principals, managers or professionals,
owners or investors in a business which does business with the
City of Fresno, or in a business which is in litigation with the City of
Fresno?
X
5 Are you or any of your principals, mangers or professionals,
related by blood or marriage to any City of Fresno employee who
has any significant role in the subject matter of this service?
X
* lf the answer to any question is yes, please explain in full below.
Explanation: We are the current auditors
for the Citv of Fresno Retírement Svstem.
Additional page(s) attached.
Signature
Rosalva Flores
(name)
Brown Armstrong Accountancv Corporation
(company)
7673 North lneram, Suite 10L
(add ress)
Fresno, CA 93711
(city state zip)
City of Fresno
06/1.rl2jrs
Exhibit A Page L
EXHIBIT B
CITY OF FRESNO
AGREEMENT FOR PROFESSIONAL AUDIT SERVICES
BETWEEN THE CITY OF FRESNO (,'C|TY")AND AUDTTOR
RFP No: 9317
MINIMUM SCOPE OF INSURANCE
Coverage shall be at least as broad as:
L The most current version of lnsurance Services Office (lSO) Commercial General Liability
Coverage Form CG 00 01, providing liability coverage arising out of your business
operations. The Commercial General Liability policy shall be written on an occurrence form
and shall provide coverage for "bodily injury," "property damage" and "personal and
advertising injury" with coverage for premises and operations (including the use of owned
and non-owned equipment), products and completed operations, and contractual liability
(including, without limitation, indemnity obligations under the AGREEMENT) with limits of
liability not less than those set forth under "Minimum Limits of lnsurance."
The most current version of ISO "Commercial Auto Coverage Form CA 00 01, providing
liability coverage arising out of the ownership, maintenance or use of automobiles in the
course of your business operations. The Automobile Policy shall be written on an
occurrence form and shall provide coverage for all owned, hired, and non-owned
automobiles or other licensed vehicles (Code 1- Any Auto). lf personal automobile
coverage is used, the CITY, its officers, officials, employees, agents and volunteers are to
be listed as additional insureds.
Workers' Compensation insurance as required by the State of California and Employer's
Liability lnsurance.
Professional Liability (Errors and Omissions) insurance appropriate to AUDITOR'S
profession. Architect's and engineer's coverage is to be endorsed to include contractual
liability.
MINIMUM LIMITS OF INSURANCE
AUDITOR, or any party the AUDITOR subcontracts with, shall maintain limits of liability of not less than
those set forth below. However, insurance limits available to CITY, its officers, officials, employees, agents
and volunteers as additional insureds, shall be the greater of the minimum limits specified herein or the full
limit of any insurance proceeds available to the named insured:
COMMERGIAL GENERAL LIABILITY:
(i) $1,000,000 per occurrence for bodily injury and property damage;(ii) $'1,000,000 per occurrence for personal and advertising injury;(iii) $2,000,000 aggregate for products and completed operations; and,(iv) $2,000,000 general aggregate applying separately to the work performed under the
AGREEMENT.
COMMERCIAL AUTOMOBILE LIABILITY:
$1,000,000 per accident for bodily injury and property damage.
oR*
2
4
City of Fresno
06111t2015
Exhibit B Page 1
PERSONAL AUTOMOBILE LIABILITY insurance with limits of liability not less than:
(i) $100,000 per person;
(¡i) $300,000 per accident for bodily injury; and,(iii) $50,000 per accident for property damage.
WORKERS' COMPENSATION INSURANCE as required by the State of California
with statutory limits.
EMPLOYER'S LIABILITY:
(i) $1,000,000 each accident for bodily inlury;(i¡) $1,000,000 disease each employee; and,(iii) $1,000,000 disease policy limit.
5. PROFESSIONAL LIABILITY (Errors and Omissions):
(i) $1,000,000 per claim/occurrence; and,(ii) $2,000,000 policy aggregate.
UMBRELLA OR EXCESS INSURANCE
ln the event AUDITOR purchases an Umbrella or Excess insurance policy(ies) to meet the "Minimum Limits
of lnsurance," this insurance policy(ies) shall "follow form" and afford no less coverage than the primary
insurance policy(ies). ln addition, such Umbrella or Excess insurance policy(ies) shall also apply on a
primary and non-contributory basis for the benefit of the CITY, its officers, officials, employees, agents and
volunteers.
DEDUCTIBLES AND SELF-INSURED RETENTIONS
AUDITOR shall be responsible for payment of any deductibles contained in any insurance policy(ies)
required herein and AUDITOR shall also be responsible for payment of any self-insured retentions. Any
deductibles or self-insured retentions must be declared on the Certificate of lnsurance, and approved by,
the CITY'S Risk Manager or his/her designee. At the option of the CITY'S Risk Manager or his/her
designee, either:
(i) The insurer shall reduce or eliminate such deductibles or self-insured retentions as
respects CITY, its officers, officials, employees, agents and volunteers; or(ii) AUDITOR shall provide a financial guarantee, satisfactory to CITY'S Risk Manager or
his/her designee, guaranteeing payment of losses and related investigations, claim
administration and defense expenses. At no time shall CITY be responsible for the
payment of any deductibles or self-insured retentions.
OTHER INSURANCE PROVISIONS/ENDORSEMENTS
the foilowing provisions: are to contain' or be endorsed to contain'
1. CITY, its officers, officials, employees, agents and volunteers are to be covered as
additional insureds. AUDITOR shall establish additional insured status for the City and for
all ongoing and completed operations by use of ISO Form CG 20 10 11 85 or both CG 20
10'10 01 and CG 20 37 10 01 or by an executed manuscript insurance company
endorsement providing additional insured status as broad as that contained in ISO Form
cG 20 10 '11 85.
2. The coverage shall contain no special limitations on the scope of protection afforded to
CITY, its officers, officials, employees, agents and volunteers. Any available insurance
proceeds in excess of the specified minimum limits and coverage shall be available to the
Additional lnsured.
City of Fresno
06111t2015
Exhibit B Page 2
3. For any claims related to this AGREEMENT, AUDITOR'S insurance coverage shall be
primary insurance with respect to the CITY, its officers, officials, employees, agents and
volunteers. Any insurance or self-insurance maintained by the CITY, its officers, officials,
employees, agents and volunteers shall be excess of AUDITOR'S insurance and shall not
contribute with it. AUDITOR shall establish primary and non-contributory status by using
ISO Form CG 20 01 04 13 or by an executed manuscript insurance company endorsement
that provides primary and non-contributory status as broad as that contained in ISO Form
cG 20 01 04 13.
The Workers' Compensation insurance policv is to contain, or be endorsed to contain, the following
provision: AUDITOR and its insurer shall waive any right of subrogation against CITY, its officers, officials,
employees, agents and volunteers.
is written on a claims-made form:
1. The retroactive date must be shown, and must be before the effective date of the
AGREEMENT or the commencement of work by AUDITOR.
2. lnsurance must be maintained and evidence of insurance must be provided for at least five (5)
years after completion of the AGREEMENT work or termination of the AGREEMENT,
whichever occurs first, or, in the alternative, the policy shall be endorsed to provide not less
than a five (5) year discovery period.
3. lf coverage is canceled or non-renewed, and not replaced with another claims-made policy
form with a retroactive date prior to the effective date of the AGREEMENT or the
commencement of work by AUDITOR, AUDITOR must purchase "extended reporting"
coverage for a minimum of five (5) years after completion of the AGREEMENT work or
termination of the AGREEMENT, whichever occurs first.
4. A copy of the claims reporting requirements must be submitted to CITY for review.
5. These requirements shall survive expiration or termination of the AGREEMENT.
All poticies of insurance required herein shall be endorsed to provide that the coverage shall not be
cancelled, non-renewed, reduced in coverage or in limits except after thirty (30) calendar days written
notice by certified mail, return receipt requested, has been given to CITY. AUDITOR is also responsible for
providing written notice to the CITY under the same terms and conditions. Upon issuance by the insurer,
broker, or agent of a notice of cancellation, non-renewal, or reduction in coverage or in limits, AUDITOR
shall furnish CITY with a new certificate and applicable endorsements for such policy(ies). ln the event any
policy is due to expire during the work to be performed for CITY, AUDITOR shall provide a new certificate,
and applicable endorsements, evidencing renewal of such policy not less than fifteen (15) calendar days
prior to the expiration date of the expiring policy.
VERIFICATION OF COVERAGE
AUDITOR shall furnish CITY with all certificate(s) and applicable endorsements effecting coverage
required hereunder. All certificates and applicable endorsements are to be received and approved by the
CITY'S Risk Manager or his/her designee prior to CITY'S execution of the AGREEMENT and before work
commences. All non-lSO endorsements amending policy coverage shall be executed by a licensed and
authorized agent or broker. All non-lSO endorsements amending policy coverage shall be executed by a
licensed and authorized agent or broker. Upon request of CITY, AUDITOR shall immediately furnish City
with a complete copy of any insurance policy required under this AGREEMENT, including all
endorsements, with said copy certified by the undenvriter to be a true and correct copy of the original policy.
This requirement shall survive expiration or termination of this AGREEMENT.
City of Fresno
06t11t2015
Exhibit B Page 3
Ao"
COVERAGES CERTIFICATE NUMBER :1s / 1 6 REVISION NUMBER:
.ACO/
\,-'t'CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY)
7 /2L/20t5
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES
BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTTTUTE A CONTRACT BETWEEN THE |SSU|NG TNSURER(S), AUTHORTZED
REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT: If the ce¡tificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. lf SUBROGATION lS WAIVED, sub¡ect to
the terms and conditions of the policy, certain pol¡c¡es may require an endorsement. A statement on this certif¡cate does not confer rights to the
certif¡cate holder in lieu of such endorsement(sl.
PRODUCER
Tolman & f{iker Insurance Services LLC #0E52073
5001 California Ave.
Suite 150
Bakersfield CÀ 93309
HXü11"' ilulie D. Lindsey
lj,t8\t^ ,.". (661) 616-¿700 I I# "^,.
(651) 616-4soo
!-,{f$lt."". j lindsey@tolmanandwiker . com
INSUFEFISì ÂFFOFDING CôVEHÂGE NAIC #
rNsuREFÂ:Hartford Fire Ins Co t9682
INSURED
Brown Àrmstrong Accountancy CorporaÈion
4200 Truxtun Àve. Suite 300
Bakersfield CÀ 93309
rNsuRERB,Hartford Casualtv 29424
rNsuREFc:ItÍin Citv Fire fns Co-294s9
INSURER D:
rNsuReRE;15/16 Renewal Certificates
INSUREF F :
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
IJñTR TYPE OF INSUFANCE Þôt tcv NilMHFF LIMITS
À
GEI
x
'1WNUP373O
/L/20L5 /L/20L6
EACH OCCURRENCE $ 1,000,000
UAMAUts IUHENIEU
PRFMISFS lFâ ô.êrrrrêñ.a\s 300,000
MED EXP (Anv one oerson)s 10,00€
PERSONAL & ADV INJUHY $ 1,000,00C
GENEFAL AGGREGATE $ 2,000,00C
GEN'L AGGREGATE LIMIT APPLIES PER:PRODUCTS - COMP/OP AGG s 2,000,00C
s
À
AU IOMOBILE LIAB¡LITY
ANY AUTO
ALL OWNED
AUTOS
HIRED AUTOS
t1t rrNUP3730 /L/20L5 i/L/20L6
OOMtsINED SINGLE LIMIT ß 1. 000 - OOC
BODILY INJURY (Per person)
BODILY INJURY (Per accident)$
x PROPEFTY DAMAGE $
$
B
x UMBRELLA LIAB
EXCESS LIAB
x OCCUF
ôt ÂtÁrQ_irÂht
'1R¡¡UTMl994
/t/20Ls i/L/20L6
EACH OCCURRENCE $ 13, 000,000
AGGREGATE 13, 000, 000
non I X I orr."t,.,** 10,ooi $
c WORKERS COMPENSATION
aND EMPLOYEFS'LtABtLtTY Yi N
ANY PROPHIETOF/PARTNEFYEXECUTIVE Ti;-.IoFFICER 4EMBER EXCLUDED? I .. I(Mandalory in NH)
ll yes, descr¡be undernFSCRIPTIôN ôF ôPFFATIôNS hal^w
N/
t1l{EL¡1!4741 i/L/20L5 i/L/20L6
v I vYU ù r^ru- I tvr nô lT ÞvtttflTêl I Eo
E L. EACH ACCIDENT s 1. 000 _ ooc
E L. DISEASE - EA EI\,IPLOYE s 1. 000. ooc
E.L DISEASE - POLICY LIIVIIT $ 1. OOO. OOC
DESCRIPTIONOFOPEFATIONS/LOCATIONS/VEHICLES (AttachACORDl0l,AddlllonalRemarksSchedule,llmorespaceisrequlred)City of Fresno, its officers, officials, employees, aftents and volunteers shall be named as additional
insured on the general liability and business automobile insurance with respect to the operat.ions of the
named insured only where required by written contract per page 10 of 18 of endorsement, lûHG0001 06/05. The
general liability insurance is primary and non cont¡ibutory per page 14 of 18 of endorsemenù lüHG0001
06/05. tfaiver of subrogation in favor of the City of Fresno, its officers, offic5.als, employees, agenÈs
and volunteers with regards to the workers compensation insurance per forn *l{C9903038. U¡nbrella policy
FOLLOWS FORM.
CANCELLATION
City of Fresno
2600 Fresno Street, Room 2156
Fresno, CA 9372L-3622
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
THE EXPIFATION DATE THEREOF, NOTICE WILL BE DELIVERED IN
ACCORDANCE WITH THE POLICY PROVISIONS,
AUTHORIZED REPRESEI{TATIVE
ilulie Lindsey/JULIEL >€,-.^æ- -:--
ACORD 25 (20r0/05)
lN5025 (zoroos).ot
@ 1988-2010 ACORD CORPORATION. All rights reserved.
The ACORD name and logo are registered marks ol ACORD
--.aconif CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DDÍYYYY}
0712012015
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES
BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTTTUTE A CONTRACT BETWEEN THE |SSU|NG TNSURER(S), AUTHORTZED
REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT: lf the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endonsed. lf SUBROGATION lS WAIVED, sub¡ect to
ths terms and conditions of the policy, certain policies may require an endorsement. A statêment on this certificate does not confer rights to the
certificate holder in lieu of such endorsement(s).pRoDUcER (847) 385_6800 (847) 385_6801
Lemme, a division of lntegro USA lnc.
111 West Campbell Street
4th Floor
Arlinaton l-.{cinhfe ll 6OnO5 /eA Dôl I ic-#ôC424ÂAl
ixllËî'' Lemme lnsurance Grouo. lnc.
l'ilX\=^ '*u (847) 385-6800 I lËâ n"',1847) 385-6801
dkoenen(@lemme.com
INSURERf SI AFFORDING COVERAGE NAIC #
tNsuRERA: Catlin Soecialtv lnsurance Comoanv I 5989
INSURED
Brown Armstrong Accountancy Corporation
4200 Truxtun Avenue, Suite 300
Bakersfield, CA 93309
INSURER B:
INSI.JRER C :
INSURER D:
INSURER E:
INSURER F:
COVERAGES CERTIFICATE NUMBER:REVISION NUMBER:
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED NOTWTHSTANDING ANY REOUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WTH RESPECT TO I^/I-IICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOIA/N MAY HAVE BEEN REDUCED BY PAID CI.AIMS.
NSRITR rYPE OF INSURANCE NaÞ POLICY NUMBER POLICY EXPIMM/DDIVYYYI LIMITS
GEI IERAL LIABILITY
COMI\iIERCIAL GENERAL LIABILITY
I CLATMS-MADE OCCUR
EACH OCCURRENCE
DAMAGE IOT<ENIÊL)ÞPFMlqFq f Fâ ô.drrañ.al $
lllED EXP lAnv one Derson)ù
PERSONAL & ADV INJURY s
GENERAL AGGREGATE
GEI .I'L AGGREGATE LIMIT APPLIES PER:ÞPônt tcTs - anirÞ/ôÞ ÂGê
s
AU'.OMOBILE LIABILITY
ANY AUTO
ALLo\/NED f__l scHEDULEDAuros I I AurosI I NON-OWNED
IHIREDAUTOS I IAUToSttt
UUMËINtsU UINULT LIMII
BODILY INJURY (Per person)$
BODILY INJURY (Per accident)$
HKUI'IK I Y LJAMAUE $
$
UMBRELLA LIAB
EXCESS LIAB
OCCUR
CLAIIlIS-MADT
EACH OCCURRENCE $
AGGREGATE ù
.r. I I orrr*t,.,r*s
WORKERS COMPENSAÎON
AND EMPLOYERS'LtABtLtTY Y/ N
ANY PROPRIETOR/PARTNER/EXECUTIVE f---l
oFF|CER/MEMBER EXCLUDED? I I(Mandatory in NH)
lf yes, describe under
ñtrêaololl^ñl
^t ^ÞED^11^ñlC
h^l^ur
NIA
I!ArcSTATU. I IOTH.lTñÞvtti¡rrel ltrp
E L EACH ACCIDENT $
E L DISEASE. EA EIUPLOYEI $
F I DTSFASF - pôt tCY r rMr-f $
A Professional Liability
lErrors & Omissionsl
APLO-673049-01 1 5 01t01t2015 o1t0'U2016
$10,000,000 Each Claim
$1 3,000,000 Annual Aggregate
$1 00,000 Aooreqate Retention
DESCRIPnONOFOPERATIONSTLOCAIONSTVEHICLES (AttachACORDl0l,AddfüonalRemarksSchedule,lfmorespacelsEqulGd)
Fresno Street, Room 2156
Fresno, C493721-3622
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN
ACCORDANCE WITH THE POLICY PROVISIONS.
.l
@ 1988-2010 ACORD CORPORATION. All rights reserved.
The ACORD name and logo are registered marks of ACORDACORD 25 (2010/05)
Policy #51UUNUP3730
GOMMERCIAL GENERAL LIABILITY GOVERAGE FORM
Various provisions in this policy restr¡ct coverage. Read
the entire pol¡cy carefully to determine rights, duties and
what is and is not covered.
Throughout this policy the words "youn and "your'' refer to
the Named lnsured shown ín he Declarations, and any
other person or organlzation qualiffing as a Named
lnsured under this policy. The words "we", "us" and "ourn
refer to the stock insurance company member of The
Hartford providing this insurance.
The word "insured" means any person or organization
qualifying as such under Section ll -Who ls An lnsured.
Other words and phrases that appear in quotation marks
have special meanlng. Refer to Section V -Definitions.
SECTION I- COVERAGES
COVERAGE A BODILY INJURY AND PROPERTY
DAMAGE LIABILITY
1. lnsuring Agreement
a. We will pay those sums that the insured becornes
legally obligated to pay as damages because of
"bodily injuff' or "property damagen to which this
insurance applies. We will have the rlght and duty
to defend the lnsured against any "sult" seeklng
those damages. However, we will have no duty to
defend the insured against any "suit" seeking
damages for "bodily lnjury" or nproperty damage" to
which this insurance does not apply. We may, at
our discretion, investigate any noccunence" and
settle any claim or "suitn that may result. But:
(1) The amount we wlll pay for damages is llmlted
as described in Section lll Limits Of
lnsurance; and
(2) Our right and duty to defend ends when we
have used up the applicable limit of insurance in
the payrnent of judgrnents or settlements under
Goverages A or B or medlcal expenses under
Coverage G.
No other obligation or liability to pay sums or
perform acts or seruices is covered unless explicitly
provided for under Supplementary Payments -
Coverages A and B.
b. This insurance applles to "bodily injury" and
"proporty damage" only if:
(1) The "bodily injury" or "property damage" is
caused by an "occunence" that takes place in
the "coverage tenitory";
@ 2005 The Hartford
(lncludes copyrighted material of lnsurance Services Office, lnc. with its permission.)
(2) The "bodily injury" or "properly damage" occurs
during the policy period; and
(3) Prlor to lhe policy period, no insured listed
under Paragraph l. of Section ll - Who ls An
lnsured and no "employee" authorized by you to
glve or receive notice of an "occurrence" or
claim, knew that the "bodily injury" or "property
damage" had occurred, ln whole or in part. lf
such a listed insured or authorized "employee"
knew, prlor to the policy period, that the 'bodily
injury" or "property damage" occurred, then any
contlnuation, change or resumption of such
"bodily injur/' or "property damage" during or
after the pollcy perlod wlll be deemEd to have
been known prior to the policy period.
"Bodily injury" or "property darnage" will be deemed
to have been known to haye occurred at the
earliest time when any insured listed under
Paragraph l. of Section ll - Who ls An lnsured or
any "employee' authorized by you to give or
receive notice of an "occunence" or clairn:
Reports all, or any part, of the 'bodily injury" or
"propeÉy damage" to us or any other insurer;
Recelves a written or verbal demand or.clalm
for damages because of the "bodily injury' or
"property damage"; or
Becomes aware by any other rneans that
"bodily injury' or "property dernage" has
occurred or has begun to occur.
d. Damages because of "bodily injury" include
damages claimed by any person or organization for
care, loss of services or death resultlng at any time
from the "bodily injury".
e. Incidental Medical Malpractlce
(1) "Bodily injury" arising out of the rendering of or
failure to render professional health care
services as a physician, dentist, nurse,
emergency rnedical technician or paramedic
shall be deemed to be caused by annoccurrence", but only lf:
(a) The physician, dentist, nurse, emergency
medical technician or paramedio is
employed by you to provide such services;
and
(b) You are not engaged in the business or
occupation of providing such services.
(1)
(2t
(3)
HG 00 01 06 05 Page I of 18
Policy #5lUUNLIP3730
(2) For the purpose of determining the limits of
ínsurance for incidental medical malpraotice,
any act or omission together with all relatod acts
or omissions in the fumishing of these services
to any one person will be considered onet'occurrencen,
2. Excluslons
This insurance does not apply to:
a. Expected Or lntended lnjury
"Bodily ínjury" or "property damage" expected or
intended from the standpoint of the insured. This
excluslon does not apply to "bodily injury" or
"propefi damage" resulting from the use of
reasonable force to protect persons or propefi.
b. Gontractual Llability
'Bodily injury" or "property damagen for which the
insured is obligated to pay damages by reason of
the assumption of liability in a contract or
agreement, This exclusion does not apply to liability
for damages:
(l) That the insured would have in the absenoe of
the contrac't or agreement; or
(2) Assumed in a contract or agreement that is anninsured contract', provided the "bodily injur/' or
"property damage" occurs subsequent to the
execution of the contract or agreement. Solely
for the purposes of liability assurned ln an
"insured contractn, reasonable attomey fees and
necessary litigation expenses incuned by or for
a party other than an insured are deemed to be
damages because of "bodily injury' or "property
damage", provided:
(a) Liability to such party for, or for the cost of,
that party's defense has also been assumed
in the same "insured contracf'; and
(b) Such attorney fees and litigation expenses
are for defense of that party against a civil or
alternatlve dlspute resolution proceêdlng ln
which damages to which this insurance
applies are alleged.
c. Liquor Llabillty
"Bodily injury" or "property damage" for which any
insured may be held liable by reason of:
(1) Gausing or contributíng to the intoxication of any
person;
(2) The furnishing of alcoholic beverages to a
person under the legal drinking age or under the
influence of alcohol; or
(3) Any statute, ordlnance or regulation relatlng to
the sale, glft, distribution or use of alcoholic
beverages.
This exclusion applies only if you are ln the
business of manufacturing, distributing, selling,
serving or furnishing alcoholic beverages.
Page2 of l8
d. Workers'Gompensation And Simllar Laws
Any obligation of the insured under a workers'
compensation, disability benefits or unemployment
compensation law or any similar law.
e. Employer's Liabllity
'Bodily injury" to:
(1) An "employee" of the insured arising out of and
in the course of:
(a) Employment by the insured; or
(b) Performing duties related to the conduct of
the insured's business; or
(2) The spouse, child, parent, brother or sister ofthat nemployee" as a conseguence of
Paragraph (1) above.
This exclusion applies:
(l) Whether the insured may be llabte as an
employer or in any other capacity; and
(2) To any obllgation to share damages with or
repay someone else who must pay damages
because of the injury.
This exclusion does not apply to llablllty assumed
by the insured under an "ínsured contract".
f. Pollution
(1) "Bodily injury" or "property damage" arising out
of the aotual, alleged or threatened disctrarge,
dispersal, seepage, mígration, release or
escape of "pollutantsn:
(a) At or from any premises, site or locatíon
whlch is or was at any time owned or
occupied by, or ranled or loaned to, any
insured. However, thls subparagraph does
not apply to:
(i) "Bodily injury" if sustained wlthin a
building and caused by smoke, fumes,
vapor or soot produced by or originating
from equipment that is used to heat, cool
or dehumídify the building, or equipment
that ls used to heat water for personal
use, by the building's occupants or their
guests;
(ll) "Bodily injury" or "property damage" for
which you may be held líable, if you are a
contractor and the owner or lessee of
such premises, slte or location has been
added to your policy as an addltlonal
lnsured with respect to your ongoing
operations performed for that additional
insured at that premises, site or location
and such premises, site or location ls not
and never was owned or occupied by, or
rented or loaned to, any insured, other
than that additional insured; or
HG 00 01 06 05
Policy #5lUUNIIP3730
(iii) "Bodily lnjury" or "property damage"
arising out of heat, smoke or fumes from
a "hostile fire";
(b) At or from any premises, site or location
which is or was at any time used by or for
any lnsured or others for the handling,
storage, disposal, processing or treatment of
waste;
(c) Which are or were at any time fansported,
handled, stored, treated, disposed of, or
processed as waste by or for:
(¡) Any lnsured; or
(ii) Any pert¡on or organization for whom you
may be legally responsible;
(d) At or from any premises, site or location on
which any insured or any contractors or
subcontractors working directly or indirectly
on any insured's behalf are performing
operations if the "pollutants" are brought on
or to the premises, site or location in
connection with such operations by such
insured, contractor or subcontractor.
However, thls subparagraph does not apply
to:
(i) "Bodily injury" or "property damage"
arising out of the escape of fuels,
lubricants or other operating fluids which
are needed to perform the normal
electrlcal, hydraulic or mechanical
functions necessary for the operation of
"mobile equipment" or its parts, if such
fuels, lubricants or other operating flulds
escape from a vehlcle part designed to
hold, store or receive them. This
exception does not apply if the "bodily
injury" or "property damage" arises out of
the intentional discharge, dispersal or
release of the fuels, lubricants or other
operating fluids, or if such fuels,
lubricants or other operating fluids are
brought on or to the premises, site or
location with the intent that they be
discharged, dispersed or released as part
of the operations belng performed bysuch insured, contractor or
subcontractor;
(ii) "Bodily injury" or "property damage"
sustained within a building and caused
by the release of gases, fumes or vapors
from materials brought into that buildingin connectlon wlth operations being
performed by you or on your behalf by a
contractor or subcontractor; or
(ill) "Bodily injury" or "property damage"
arising out of heat, smoke or fumes from
a "hostile fire"; or
(e) At or from any premlses, site or location on
which any insured or any contractors or
subcontractors working directly or indirecfly
on any insured's behalf are performing
operations if the operations are to test for,
monitor, clean up, remove, contain, treat,
detoxi! or neutralize, or in any way respond
to, or assess the effects of, "pollutantso.
(2) Any loss, cost or expense arising out of any:
(a) Request, demand, order or statutory or
regulatory requirement that any insured or
others test for, monitor, clean up, remove,
contain, treat, detoxiñ7 or neutralize, or in
any way respond to, or assess the effects of,
"pollutantsn;or
(b) Claim or suit by or on behalf of a
govemmental authority for damages
because of testing for, monitoring, cleaningup, removing, contraining, treatlng,
detoxi$ing or neutralizing, or in any way
respondlng to, or'assessing the effects of,
'pollutants".
However, this paragraph does not apply to
liability for damages because of "property
damage" that the insured would have in the
absence of such request, demand, order or
statutory or regulatory requiremenf or such
claim or "suit" by or on behalf of a govemmental
aufiority.
g, Aircraft, Auto Or Watersraft
"Bodily injury" or "property damage" arlsing out of
the ownershlp, maintenance, use or entrustment to
others of any alrcraft, "auto" or watercraft owned or
operated by or rented or loaned to any insured. Use
includes operation and "loading or unloading".
This exclusion applies even if the claíms against
any insured allege negligence or other wrongdoing
in the suparvision, hiring, employment, training or
monitoring of others by that lnsured, if the
"occurrence" which caused the "bodlly lnJury" or
"property damage" involved the ownership,
maintenance, use or entrustment to others of any
aircraft, "auto" or watercraft that is owned or
operated by or rented or loaned to any insured.
This exclusion does not apply to:
(1) A watercraft while ashore on premises you own
or rent;
(2) A watercraft you do not own that is:
(a) Less than 51 feet long; and
(b) Not belng used to carry persons for a
charge;
(3) Parking an "auto" on, or on the ways next to,
premises you own or rent, provided the "auto" is
not owned by or rented or loaned to you or the
insured;
HG 00 0l 06 05 Page 3 of 18
Policy #51UUNUP3730
(a) Liability assumed under any "insured contracf'
for the ownership, maintenance or use of
aircraft or watercrafÇ
(5) 'Bodlly injury" or "property damage" arising out
of the operation of any of the equipment listed in
Paragraph f.(2) or f.(3) of the definition of
"rnobile equipmenf'; or
(6) An aircraft that is not owned by any insured and
is hired, chartered or loaned with a paid crew.
However, this exception does not apply lf the
insured has any other insurance for such "bodily
injury" or "property damage", whether the other
insurance is prlmary, excess, contlngent or on
any other basis.
h. Mobile Equipment
"Bodlly lnJury" or "properly damage" arising out of:
(f ) The transportation of "mobile equiprnent" by an' "auto" owned or operated by or rented or loaned
to any insured; or
(2) The use of 'mobile equlpment" in, or while in
practice for, or while belng prepared for, any
prearranged racing, speed, demolition, or
stunting activlty.
i. War
"Bodily injury" or "property damage", however
caused, arislng, directly or indirectly, out of:
(l) War, including undeclared or civll war;
(2) Warlike action by a military force, including
actlon in hinderlng or defending against an
actual or expected attack, by any govemment,
soverelgn or other authority using military
personnel or other agenb; or
(3) lnsunection, rebellion, revolutlon, usurped
power, or action taken by governmental
authority in hindering or defending against any
of these.
j. Damage To Property
"Property damage" to:
('l) Properg you own, rent, or occupy, includlng any
costs or expenses lncurred by you, or any other
person, organization or entity, for repair,
replacement, enhancement, restoration or
rnaintenance of such property for any reason,
including prevention of injury to a person or
damage to another's property;
(2) Premlses you sell, give away or abandon, lf the
"property damage" arlses out of any part of
those premises;
(3) Property loaned to you;
(4) Personal property in the care, custody or control
of the insured;
(5) That partícular part of real propedy on which
you or any contractors or subcontractors
working directly or indirectly on your behalf are
performing operations, if the "property damage"
arises out of those operations; or
(6) That particular part of any property that must be
restored, repaired or replaced because "your
work'was incorrectly performed on it.
Paragraphs (f ), (3) and (4) of this exclusion do not
apply to "propefi damage" (oü,ter than damage by
fire) to premises, including the contents of such
premises, rented to you for a period of 7 or fewer
consecutive days. A separate limit of insurance
applles to Damage To Premlses Rented To You as
described ln Section lll - Limits Of lnsurance.
Paragraph (2) of this exclusion does not apply if the
premises are "your work" and were never occupied,
rented or held for rental by you.
Paragraphs (3) and (a) of this exclusion do not
apply to "propedy damage" arising from tho use of
elevators.
Paragraphs (3), (4), (5) and (6) of fhis excluslon do
not apply to liability assumed under a sidetrack
agreement.
Paragraphs (3) and (a) of thls excluslon do not
apply to "property damage" to borrowed equipment
while not being used to perform operatlons at the
job site.
Paragraph (6) of this exclusion does not apply to
"property damage" included in the "products-
completed operations hazard".
k DamageToYourProduct
. nProperty damage" to "your productn arising out of it
or any part of it.
l. Damage To Your Work
nProperty damage" to "yourwork" arising out of it or
any part of it and included. in the nproducts-
completed operations hazatd",
This excluslon does not apply lf the damaged work
or he work out of whlch the damage arises was
performed on your behalf by a subconlractor.
m. Damage To lmpaired Property Or Property Not
Physically lnjured
"Property damagen to "impalred property" or
property that has not been physically injured,
arising out of:
(1) A defect, deflclency, lnadequacy or dangerous
condition in 'your product" or "your work"; or
(2) A delay or failure by you or anyone acting on
your behalf to perform a contract or agreemenl
in accordance with its terms.
This excluslon does not apply to tho loss of use of
other property arising out of sudden and accidental
physical injury to "your product" or nyour work" after
it has been put to its intended use.
Page4oflS HG 00 0t 0605
Policl51UUNUP3730
n. Recall Of Products, Work Or lmpaired
Property
Damages claimed for any loss, cost or expense
incurred by you or others for the loss of use,
withdrawal, recall, inspection, repair, replacement,
adjustment, removal or dlsposal of:
--/ (l) 'Your Product";
(2) 'Your work"; or
(3) "lmpaired property";
if such product, work, or property is withdrawn or
recalled frorn the market or from use by any person
or organization because of a known or suspected
defect, deficiency, lnadequacy or dangerous
condition in lt,
o. PersonalAnd Advertising lnjury
"Bodily injury" arising out of "personal and
advertising inJury".
p. Electronic Data
Damages arlslng out of the loss of, loss of use of,
darnage to, conuptlon of, lnability to access, or
lnability to manipulate electronic data.
As used in this exclusion, electronic data means
inforrnation, facts or programs stored as or on,
created or used on, or bansmitted to or from
computer softvvare, including systems and
applications software, hard or floppy disks, CD-
ROMS, tapes, drlves, cells, data processing
devices or any other media which are used with
electronically controlled equlpment.
q. Employment Related Practlces
"Bodily injury" to:
(l) A person arising out of any "employment-
related practices"; or
(2) The spouse, child, parent, brother or sister of
that person as a consequence of "bodily inJury"
to that person at whom any "employment-
related practices" are directed.
This excluslon applles:
(l) Whether the insured may be liable as an
employer or in any other capaciÇ; and
(2) To any obligation to share damages with or
repay someone else who must pay damages
because of the injury.
r. Asbestos
(1) "Bodily injury' or "property damage" arising out
of the nasbestos hazard".
(2) Any damages, judgments, settlernents, loss,
costs or expenses that:
(a) May be awarded or incurred by reason of
any claim or suit alleging actual or
threatened injury or damage of any nature or
kind to persons or propefi which would not
have occuffed ln whole or ln part but for the
"asbestos hazard";
(b) Arise out of any request, demand, order or
statutory or regulatory requirament that any
lnsured or others test for, rnonitor, clean up,
refnove, encapsulate, contain, treat, detoxiff
or neutralize or in any way respond to or
assess the effects of an "asbestos hazard";
or
(c) Arise out of any clairn or suit for damages
because of testing for, monitoring, cleaning
up, removing, encapsulating, containing,
treating, detoxiñ7lng or neutralizing or in any
way respondlng to or assessing the effects
of an "asbestos hazard".
Damage'To Premises Rented To You - Exception
For Damage By Fire, Llghtnlng Or Explosion
Exclusions c. through h. and j. through n. do not apply
to damage by fire, lightning or exploslon to premises
while rented to you or temporarily ocolpled by you with
permlssion of the owner. A separate limlt of insurance
applies to this coverage as descrlbed in Section lll -
Limits Of lnsurance.
GOVERAGE B PERSONAL AND ADVERTISING
INJURY LIABILITY
1. Insuring Agreement
a. We will pay those sums that the insured becomes
legally obllgated to pay as damages because of
"personal and advertising inJury" to which this
insurance applles. We will ha¡e the right and duty
to defend the lnsured against any nsuif' seeking
those darnages. However, we wlll have no duty to
defend the insured against any "suit" seeking
damages for "personal and advertising injury" to
which this insurance does not apply. We may, at
our discretion, investigate any offense and settle
any clairn or "suif'that may result. But:
(1) The amount we will pay for damages is limitedas descrlbed ln Section lll Llmits Of
lnsurance;and
(2) Our right and duty to defend end when we have
used up the applicable limit of insurance in the
payment of judgments or settlements under
Coverages A or B or medical expenses under
Coverage G.
No other obligation or liability to pay sums or
perform acts or services is covered unless explicitly
provided for under Supplernentary Payments -
Coverages A and B,
b. This insurance applies to "personal and advertising
injury" caused by an offense arising out of your
business but only if the offense was committed ín
the "coverage tenitory" during the policy period.
HG 00 01 06 05 Page 5 of 18
Policy#51UUNUP3730
2. Exclusions
This insurance does not apply to:
a. Knowing Violation Of Rights Of Another
"Personal and advertising injury" arising out of an
offense committed by, at the direction or with the
consent or acquiescence of the insured with the
expectation of inflicting "personal and advertising
injury".
b. Materlal Pubfished Wlth Knowledge Of Falslty
"Personal and advertising injuS' arlsing out of oral,
written or electronic publication of material, if done
by or at the direction of the lnsured with knowledge
of its falslty.
c. Material Published Prior To Pollcy Period
"Personal and advertislng lnjur/' arislng out of oral,
wrltten or electronic publication of material whose
first publication took place before the beginning of
the policy period,
d. GrimlnalActs
"Personal and advertising lnJury" arisíng out of a
crlmlnal act commitred by or at the directlon of the
lnsured.
e. Gontractual Liability
"Personal and advertising injury" for which the
insured has assumed liability in a contract or
agreement, This exclusion does not apply to liability
for damages that the insured would have in the
absence of the contract or agreement,
f. Breach Of Gontract
"Personal and advertising inJury" arising out of a
breadt of contract, except an implied contract to use
another's "advertising idea" in your "advertisemenf'.
g. Quality Or Performance Of Goods - Failure To
Gonform To Statements
"Personal and advertising injury" arising out of the
failure of goods, products or services to conform
wlth any statement of quallty or performance made
in your "advertisementn.
h. Wrong Description Of Prices
"Personal and advertlqlng lnjury" arising out of the
wrong description of the price of goods, products or
services.
l. lnfringement Of lntellectual Property Rights
"Personal and advertising injury'' arising out of any
violation of any intellectual property rights such as
copyright, patent, trademark, trade name, trade
secret, service mark or other deslgnation of origin
or authentlcity.
However, this exclusion does not apply to
infringement, in your "advertisemenf', of:
(l) Copyright;
(2) Slogan, unless the slogan ls also a trademark,
trade name, service mark or other designation
of origin or authenticity; or
(3) Ttle of any literary or artlstic work.
j. Insureds In Media And lnternet Type
Businesses
"Personal and advertising injury" committed by an
lnsured whose buslness ls:
(1) Advertising, broadcasting, publishing or
telecasting;
(2) Deslgnlng or determining content of web sites
for otherst or
(3) An lnternet s€arch, access, content or service
provider.
However, thls excluslon does not apply to
Paragraphs 17.a., b. and c. of "personal and
advertising injury" under the Definitions Section.
For the purposes of this exclusion, placing an
'advertisemenf'for or linking to others on your web
site, by itsell is not considered the business of
advertising, broadcastlng, publishing or telecasting.
k. Electronlc Ghatrooms Or Bulletln Boards
"Personal and advertising injun/: arising out of an
electronic chatroom or bulletln board the insured
hosts, owns, or over whlch the insured exercises
control.
l. Unauthorized Use Of Another's Name Or
Product
"Personal and advertising injury" arising out of the
unauthorÞed use of anothe/s name or product in
your e-mail address, domain namg or metatags, or
any other simllar tactics to mislead another's
potential customers.
m, Pollutlon
"Personal and advertising injury' arising out of the
actual, alleged or threatened discharge, dispersal,
seepage, migration, release or gscape of
"pollutantsn at any time.
n. Pollution.Related
Any loss, cost or expense arlslng out of any:
(l) Request, demand, order or statutory or
regulatory requirement that any insured or
others test for, monitor, clean up, re¡Tove,
contain, treat, detoxiñy or neutralize, or in any
way respond to, or assess the efiects of,
"pollutants"; or
(2) Clalm or suit by or on behalf of a governmental
authority for damages because of testing for,
monitoring, cleaning up, removing, containing,
treating, detoxifying or neutralizing, or in any
way responding to, or assesslng the effects of,npollutiants".
Page 6 of 18 HG 00 0t 06 05
Policl5lUUNUP3730
o. War
"Personal and adveñising injury", however caused,
erísing, directly or indirectly, out of:
(1) War, including undeclared or civilwar;
(2) Warlike action by a military force, íncluding
action in hindering or defending against an
actual or expected attack, by any govemment,
sovereign or other authority using mllitary
personnel or other agents; or
(3) lnsunection, rebellion, revolution, usurped power,
or action taken by governmental authority in
hindering or defending against any of these.
p. lnternet Advertlsements And Gontent Of Others
nPersonal and advertlsing injury" arising out of:
(f ) An "advertisement" for others on your web slte;
(2) Placing a link to a web site of others on your
web site;
(3) Gontent, including lnformation, sounds, text,
graphlcs, or images from a web site of others
dlsplayed within a frame or border on your web
site; or
(4) Computer code, software or programmlng used
to enable:
(a) Your web site; or
(b) The presentation or functionality of an
"advertisement" or other content on your
web site.
q. Rlght Of Privacy Greated By Statute
'Personal and advertising lnJury" arising out of the
violation of a person's rlght of prlvacy created by
any state or federal act.
However, this exclusion does not apply to liability
for damages that the insured would have in the
absence ofsuch state orfederal act.
r. Violation Of Anti-Trust law
nPersonal and advertising injury" arising out of a
violation of any anti-trust law.
s. Securities
nPersonal and advertising injur¡/' arising out of the
fluctuation in price or value of any stocks, bonds or
other securities.
t. Discrimination Or Humiliaiion
"Personal and advertising injury' arising out of
discrimination or humiliatlon cornmltted by or at the
dlrectlon of any "executive officer", director,
stockholder, partner or member of the insured.
u. Employment-Related Practices
"Personal and advertising injury" to:
(l) A person arising out of any "employment-
related practices"; or
(2) The spouse, child, parent, brother or sister of
that person as a consequence of "personal and
advertising injury" to that person at whom any
"employment-related practices" are d irected.
This exclusion applies:
(1) Whether the insured may be liable as an
employer or in any other capacity; and
(2) To any obligation to share damages with or
repay someone else who must pay damages
because of the injury.
v. Asbestos
(1) "Personal and advertlslng lnJury" arislng out of
the "asbestos hazard".
(2) Any damages, judgments, settlements, loss,
costs or expenses that:
(a) May be awarded or incurred by reason of
any claim or suit alleging actual or
threatened injury or damage of any nature or
kind to persons or property which would not
have occurred in whole or ín part but for the
"asbestos hazard";
(b) Arlse out of any request, demand, order or
statutory or regulatory requirement that any
insured or others test for, monitor, c-lean up,
remove, encapsulate, contain, teat, detoxiflr
or neutralize or in any way respond to or
assess the effects of an "asbestos hazardn;
or
(c) Arlse out of any clalm or sult for damages
because of testlng for, monttorlng, cleanlng
up, removing, encapsulating, contalning,
treating, detoxifying or neutralizing or in any
way responding to or assessing tlre effects
of an "asbestos hazard".
COVERAGE C MEDIGAL PAYMENTS
1. lnsuring Agreement
a. We will pay medical expenses as described below
for "bodily injury" caused by an accident:
(f ) On premises you own or rent;
(2) On ways next to premises you own or rent; or
(3) Because ofyour operations;
provided that:
(f) The accident takes place in the "coverage
tenitory" and during the policy period;
(2) The expenses are lncurred and reported to us
within three years of the date of the accldent;
and
(3) The injured person submits to exarnination, at
our êxpense, by physicians of our choice as
often as we reasonably requlre.
HG 00 0l 06 05 Page 7 of 18
Policy #5lUUNUP3730
b. We will make these payments regardless of fault.
These payments will not exceed the applicable limit' of insurance. We will pay reasonable expenses for:
('l) First aid administered at the tlme of an accldent;
(2) Necessary medical, surgical, x-ray and dental
services, including prosthetic devices; and
(3) Necessary ambulance, hospital, professional
nursing and funeral services.
2. Exclusions
We wlll not pay expenses for "bodily injury":
a., Any lnsured
To any insured, except "volunteerworkers".
. b. Hired Person
To a person hired to do work for or on behalf of any
insured or a tenant of any insured.
c. lnjury On Normally Occupied Premlses
To a person injured on that part of premises you
own or rent that the person normally occupies.
d. Workers Gompensatlon And Slmllar Laws
To a person, vuhether or not an 'ernployee" of any
insured, if benefits for the "bodily injur/' are payable
or must be provided under a workers'compensation
or disability benefits law or a similar law.
e. Athletics Activities
To a person injured while practlclng, lnstructing or
participating in any physical exercises or games,
sports, or athletio contests.
f. Products-Completed Operations Hazard
lncl uded within the "products-completed operations
hazard'.
g. Goverage A Exclusions
Excluded under Coverage A.
SUPPLEMENTARY PAYMENTS GOVERAGES
AAND B
1. We wlll pay, with respect to any claim we investigate or
settle, or âny "suit" against an insured we defend:
a. All expenses we incur.
b. Up to $1,000 for cost of bail bonds required
because of accidenls or trafflc law violations arising
out of the use of any vehlcle to which the Bodily
lnjury Liability Coverage applies. We do not have
to furnish these bonds.
c. The cost of appeal bonds or bonds to release
altachments, but only for bond amounts within he
applicable limit of insurance. We do not have to
furnish these bonds.
d. All reasonable expenses incurred by the insured at
our request to assist us in the investigation or
defense of the claim or "suif', including actual loss
of earnings up to $500 a day because of time off
from work.
e. All costs taxed against the insured in the ''suif'.
f. Prejudgment interest awarded against the insured
on that part of the Judgment we pay. lf we make an
offer to pay the applicable limit of lnsurance, we will
not pay any prejudgment interest based on that
period of time after the offer.
g. All interest on the full amount of any judgment that
accrues after entry of the judgment and before we
have paid, offered to pay, or deposited in court the
part of the judgment that is within the applicable
limit of insurance.
These payments will not reduce the llmits of lnsurance.
lf we defend an insured against a "suit" and an
indemnitee of the insured is also named as a party to
the nsuit", we will defend that indemnitee if all of the
following conditions are met:
a. The nsuitn against the indemnitee seeks damages
for which the insured has assumed the llability of
the indemnitee in a contract or agreement that is an
"insured contract";
b. This insurance applies to such llability assurned by
the insured;
c. The obligation to defend, or the cost of the defense
of, that indemnitee, has also been assumed by the
insured in the same'insured contracfl;
d. The allegations in the nsuitn and the information we
know about the ooccurrence" are such that no
conflict appears to exist between the interests of
the insured and the lnterests of the indemnitee;
e. The indernnitee and the insured ask us to conduct
and control the defense of that lndemnltee against
such "suit" and agree that wo oan assign the same
counsel to defend the insured and the indernnitee;
and
f. The indemnitee:
(1) Agrees in writing to:
(a) Cooperate with us in the investlgation,
settlement or defense of the "sult";
(b) lmmediately send us copies of any
demands, notices, summonses or legal
papers received in connectlon wlth the "suit";
(c) Notify any other insurer whose coverage is
available to the indemnitee; and
(d) Cooperate with us with respect to
coordinating other applicable insurance
available to the indemnitee; and
(2) Provides us with written authorization to:
(a) Obtain records and other information related
to the "suit"; and
(b) Conduct and control the defense of the
indemnitee in such "suit".
So long as the above conditions are met, attorneys'
fees incurred by us in the defense of that indemnitee,
Page I of 18 HG 00 0l 06 05
Policy#51UUNLIP3730
necessary litigation expenses incurred by us and
necessary litigation expenses incuned by the
indemnitee at our request will be paid as
Supplementary Payments. Notwithstanding the
provisions of Paragraph 2.b.l2l of Section I -
Coverage A - Bodily lnjury And Property Damage
Liability, such payments will not be deemed to be
damages for "bodily injury" and "property damage" and
will not reduce the limits of insurance.
Our obligation to defend an insured's indemnitee and
to pay for attomeys' fees and necessary litigation
expenses as Supplementary Payments ends when:
a. We have used up the appllcable limit of insurance
ln the payment of judgments or settlements; or
b. The conditlons set forth above, or the terms of the
agreement described in Paragraph f. above, are no
longer met.
SECTION II- WHO IS AN INSURED
- 1. lf you are designated in the Declarations as:
a. An individual, you and your spouse are insureds,
but only with respect to the conduot of a buslness
of which you are the sole owner.
b. A partnership or joint venture, you are an lnsured.
Your members, your partners, and their spouses
are also insureds, but only with respect to the
conduct of your buslness.
c. A limited liability company, you are an insured.
Your members are also insureds, but only with
respect to the conduct of your business. Your
managers are insureds, but only with respect to
their duties as your managers.
d. An organizatlon other than a partnership, joint
venture or limited liability company, you are an
ínsured. Your "executive officers" and directors are
insureds, but only with respect to their duties as
your officers or directors. Your stockholders are
also insureds, but only with respect to their liability
as stockholders.
e. A trust, you are an insured. Your trustees are also
insureds, but only with respect to thelr dutles as
trustees,
2. Each of the following is also an lnsured:
a. Employees and Volunteer workers
Your "volunteer workers" only whlle performing
duties related to the conduct of your business, or
your "employees", other than either your "executive
officers" (if you are an organization other than a
partnership, joint venture or limited liability
company) or your managers (if you are a limited
liability company), but only for acts within the scope
of their employment by you or while performing
duties related to the conduct of your buslness.
However, none of these "employees" or "volunteer
workgrs" are insureds for:
(1) "Bodily injury" or "personal and advertising
injury":
(a) To you, to your partners or rnembers (if you
are a partnership or Joint venture), to your
members (if you are a limited liability
company), to a co-"employee" while in the
course of his or her ernployment or
perfonning duties related to the conduct of
your business, or to your other nvolunteer
workers" whlle performing dutles related to
the conduc't of your business;
(b) To the spouse, child, parent, brother or sister
of that coJ'employee" or that "volunteer
worker" as a consequence of Paragraph
(l)(a) above;
(c) For which there is any obligation to share
damages with or repay someone else who
must pay damages because of the injury
descrlbed in Paragraphs (f )(a) or (b) above;
or
(d) Arising out of hls or her providing or failing to
provide professional health care services.
lf you are not in the business of providing
professional health care services, Paragraph (d)
does not apply to any nurse, emergency
medical technician or paramedic employed by
you to provide such services.
(2) "Property damage" to property:
(a) Owned, occupied or used by,
(b) Rented to, in the care, custody or control of,
or over which physlcal control is being
exercised for any purpose by
you, any of your "employees", "volunteel
workers", any partner or member (if you are a
partnership or joint venture), or any member (if
you are a limited líabllity company).
b. Real Estate Manager
Any person (other than your 'employee" or
"volunteer worke/'), or any organization while
acting as your real estate manager.
c. Ternporary Gustodlans of Your Property
Any person or organization having proper
temporary custody of your property if you die, but
only:
(f) With respect to liability arising out of the
maintenance or use of that property; and
(2) Until your legal representatíve has been
appointed.
d. Legal Representative lf You Die
Your legal representative if you die, but only with
respect to duties as such. That representative will
HG 00 01 06 05 Page 9 of 18
Policl5lUUNUP3730
have all your rights and duties under this Coverage
Part.
e. Unnamed Subsidlary
Any subsidiary, and subsidiary thereof, of yours
which is a legally incorporated entity of which you
own a financial interest of more than 50% of the
voting stook on the effective date of the Coverage
Part'
The insurance afforded herein for any subsidiary
not named in this Coverage Part as a named
insured does not apply to injury or damage with
respect to which an insured under this Coverage
Part is also an insured under another policy or
would bo an insured under such policy but for its
termination or the exhaustion of its limits of
insurance.
3. Newly Acquired or Formed Organlzatlon
lnsured if there is no other similar insurance avallable
to that organizatfon. However:
a. Coverage under this provision is afforded only until
the 180th day after you acquire or form the
organization or the end of the policy period,
whichever is earlier;
b. Coverage A does not apply to "bodily injury" or
"property damage" that occurred before you
acquired or formed the organization; and
c. Coverage B does not apply to "personal and
advertising inJury" arislng out of an offense
committed before you acqulred or formed the
organization.
4. Mobile Equlpment
With respect to "mobile equipment" registered in your
name under any motor vehicle registration law, any
person is an insured while drivlng such equipment
along a public highway with your permission. Any other
person or organization responsible for the conduct of
such person is also an insured, but only with respect to
liability arising out of the operation of the equipment,
and only if no other insurance of any kind is available
to that person or organization for this liability. However,
no peßon or organization is an insured with respect to:
a. "Bodily injury" to a co-"employee" of the person
driving the equipment; or
b. "Property damage" to property owned by, rented to,
in the charge of or occupied by you or the employer
of any person who ls an insured under thls
provision.
5. Nonowned Watercraft
With respect to watercraft you do not own that is less
than 51 feet long and is not being used to carry
persons for a charge, any person is an lnsured while
operatlng such watercraft with your permlssion. Any
other person or organization responsible for the
conduct of such person is also an insured, but only
with respect to liability arising out of the operation of
the watercraft, and only if no other insurance of any
kind is available to that peßon or organization for this
liability.
However, no person or organization is an insured wlth
respect to:
a. "Bodily injury' to a co-"employee" of the person
operating the watercrafi; or
b. "Property damage" to property owned by, rented to,
in the charge of or occupled by you or the employer
The following person(s) or organization(s) are an
additional insured when you have agreed, ln a written
contract, written agreement or because of a permit
issued by a state or polítical subdivision, that such
person or organization be added as an additional
insured on your policy, provided the injury or damage
occurs subsequent to the execution of the contract or
agreement.
A person or organization is an additional lnsured under
this provision only for that period of tlme required by
the contract or agreement.
However, no such person or organization is an insured
under this provlsion lf such person or organlzatlon ls
included as an insured by an endorsement issued by
us and made a part of this Coverage Part.
a. Vendors
Any person(s) or organizatlon(s) (referred to below
as vendor), but only with respect to "bodlly injury"
or "property damage" arising out of "your producb"
which are distributed or sold in the regular course
of the vendo/s business and only if this Coverage
Part provides coverage for "bodily inJury' or
"properly damage" included within the "products-
completed operations hazard".
(1) The insurance afforded the vendor is subject to
the following additional exclusions:
This insurance does not apply to:
(a) "Bodily injury" or "property damago" for
which the vendor ls obligated to pay
damages by reason of the assumption of
llability in a contract or agreement. This
exclusion does not apply to liability for
damages that the vendor would have in the
absence of the contract or agreement;
Any organization you newly acquire or form, other than ¡, )ç
a partnership, ioint venture or limited liabllity company,{f,4fl
and ovsr which you maintain financial interest of more t- 6.
than 50o/o of the voting stoc'k, will qualiñ/ as a Named
Page l0 of 18 HG 00 0l 0605
Policy #5lUUNUP3730
(b) Any express waranty unauthorized by you;
(c) Any physlcal or chemlcal change in the
product made intentlonally by the vendor;
(d) Repackaging, except when unpacked solely
for the purpose of inspection, demonstration,
testing, or the substitution of parts under
instructlons from the manufactt¡rer, and then
repackaged in the original container;
(e) Any failure to make such inspections,
adjustments, tests or servicing as the vendor
has agreed to make or normally undertakes
to make ín the usual course of business, in
connection with the distributlon or sale of the
products;
(f) Demonstration, lnstallation, serulclng or
repair operations, except such operations
performed at the vendor's premíses in
connection with the sale of the product;
(g) Products which, after distrlbution or sale by
you, have been labeled or relabeled or used
as a contafner, part or ingredienl of any
other thing or substance by or for the
vendor; or
(h) "Bodily injury" or "properly damage" arising
out of the sole negligence of the vendor for
its own acts or omissions or those of its
employees or anyone else acting on its
behalf. Howwer, this exclusion does not
apply to:
(l)The exceptions contained in Sub-
paragraphs (d) or (0; or
(li) Such lnspectlons, adjustments, tests or
serviclng as the vendor has agreed to
make or normally undertakes to make in
the usual course of buslness, in
connection with the distribution or sale of
the products.
(2) This insurance does not apply to any insured
person or organization, from whom you have
acqulred such products, or any lngredient, part
or contialner, entering into, accompanying or
containing such products.
b. Lessors of Equlpment
(f) Any person or organization from whom you
lease equipment; but only wlth respect to their
liability for "bodily injuryn, "property damage" or
"personal and advertising injury" caused, in
whole or in part, by your maintenance, operation
or use of equipment leased to you by such
person or organizatíon.
(2) With respect to the insurance afforded to these
additional lnsureds this insurance does not
apply to any "occurrence' which takes place
afier the equipment lease expires.
. c. Lessors of Land or Premises
Any person or organization frorn whom you lease
land or premises, but only with respect to liablllty
arising out of the ownership, maintenance or use of
hat part of the land or prernises leased to you.
With respect to the insurance afforded these
additional insureds the following additional
exclusions apply:
This insurance does not apply to:
l. Any "occurrence" which takes place after you
cease to lease that land; or
2. Structural alterations, new construction or
demolition operations performed by or on behalf
of such person or organization.
d. Architects, Englneers or Surueyors
Any architect, engineer, or surveyor, but only with
respect to liability for "bodíly injury", "property
damage" or npersonal and advertising injury"
caused, in whole or in part, by your aots or
omissions or the acts or omissions of those acting
on your behalf:
(l) ln connection with your premisos; or
(2) ln the performance of your ongoing operations
performed by you or on your behalf.
With respect to the insurance afforded these
additional insureds, the following additional
exclusion applies:
Thls insurance does not apply to "bodlly injury",
'property damage" or "personel and advertising
lnJury" arlslng out of the renderlng of or the failure
to render any professional services by or for you,
including:
l. The preparing, approving, or failing to prepare
or epprove, maps, shop drawings, opinions,
reports, surveys, field orders, change orders or
drawings and specifications; or
2. Supervisory, inspection, architectural or
engineering activities.
e. Perm¡ts lssued By State Or Poilflcal
Subdivislons
Any state or political subdivision, but only with
respect to operations performed by you or on your
behalf for which the state or political subdivision
has issued a permit.
With respect to the insurance afforded these
additional insureds, this insurance does not apply
to:
(1) "Bodlly lnjury", "property damage" or "personal
and advertislng injury" arising out of operations
performed for the state or municipality; or
(2) "Bodily injury" or nproperty damage" included
within the "products-completed operations
hazard".
HG 00 0f 06 05 Page ll of 18
Policy#51UUNUP3730
f. Any Other Party
Any other person or organization who is not an
lnsured under Paragraphs a. through e. above, but
only with respect to liablllty for "bodily injury",
"property damage' or "personal and advertising
injury' caused, in whole or in part, by your acts or
omissions or the acts or omissions of those acting
on your behalf:
(l) ln the performance of your ongoing operations;
(2) ln connectlon with your premises owned by or
rented to you; or
(3) ln connectlon with "your work" and included
within the 'products-completed operations
hazerd", but only if
(a) The written contract or agreenìent requires
you to provide such coverage to such
additional insured; and
(b) This Goverage Part provldes coverage for
"bodily injury" or "property damage" included
within the'products-completed operations
hazard".
With respect to the insurance afforded to these
additional insureds, this insuranca does not apply
to:
"Bodily injury", nproperty darnage" or "personal and
advertising injury" arising out of the rendering of, or
the failure to render, any professional architectural,
engineering or surveying servicas, including:
(f) The preparlng, approving, or failing to prepare
or approve, maps, shop drawings, opinions,
reports, surveys, field orders, change orders or
drawings and speclficatlons; or
(2) Supervisory, inspection, architectural or
engineering activities.
The limits of insurance that apply to additional insureds
under this provision is descrlbed ln Sectlon lll - Limlts
Of lnsurance.
How thls insurance applies when other insurance is
available to the additional insured is described in the
Other lnsurance Condltion ln Sectlon lV - Commerclal
General Liability Conditions.
No person or organization is an lnsured with respect to the
conduct of any current or past partnership, joint venture or
limited liabllity company that is not shown as a Named
lnsured in the Declarations.
SECTION III- LIMITS OF INSURANGE
1. The Most We will Pay
The Limits of lnsurance shown in the Declarations and
the rules below fix the most we will pay regardless of
the number of:
a. lnsureds;
b. Glaims made or "suitsn brought; or
c. Persons or organizations making claims or bringing
"suitstt.
2. General Aggregate Llmit
The General Aggregate Limit is the most we will pay
for the sum of:
a. Medical expenses under Goverage C;
b. Damages under Coverage A, except damages
because of "bodily injury" or "property damage"
included in the "products+ornpleted operations
hazardn; and
c. Damages underGoverage B.
3. Products-Completed Operations Aggregate Llmit
The Products-Completed Operatlons Aggregate Limit
is the most we will pay under Coverage A for damages
because of "bodily injury" and "property damage"
included in the "products-completed operations
hazard".
4. Personaland Advertising lnjury Llmlt
Subject to 2, above, the Personal and Advertlsing
lnjury Limit ls the most we will pay under Coverage B
for the sum of all damages because of all "personal
and advertising injury" sustained by any one person or
organization.
5. Each Occurrence Limlt
Subject to 2. or 3. above, whichever applies, the Each
Occurence Limit is the most we will pay for the sum
of:
a. Damages under Coverage A; and
b. Medical expenses under Coverage C
because of all "bodily injury" and "property darnage"
arising out of any one "occurrencen.
6. Damage To Premises Rented To You Limlt
Subject to 5. above, the Damage To Premises Rented
To You Limit is the most we will pay undor Coverage A
for damages because of "property damagen to any one
premises, while rented to you, or in the case of
damage by fire, lightning or explosion, while rented to
you or temporarily occupied by you with permisslon of
the owner.
ln the case of damage by fire, lightning or explosion,
the Damage to Premises Rented To You Limit applies
to all damage proxirnately caused by the same event,
whether such damage results frorn fire, lightning or
explosion or any combination of these.
7. Medical Expense Limit
Subject to 5. above, the Medical Expense Limit is the
most we will pay under Coverage C for all medical
expenses because of 'bodily lnjury" sustalned by any
one person.
8. How Limits Apply To Additional Insureds
lf you have agreed in a written contract or written
agreement that another person or organlzation be
Page 12 of t8 HG 00 01 06 05
Policy #51UtlNtlP3730
added as an additional insured on your policy, the
most we will pay on behalf of such additional insured is
the lesser of:
a. The limits of insurance specified ln the written
contract or written agreement; or
b. The Limits of lnsurance shown in the Declarations.
Such amount shall be a part of and not in addition to
Limits of lnsurance shown in the Declarations and
described in this Section.
The Limits of lnsurance of thís Coverage Part apply
separately to eacl'r consecutive annual period and to any
remalning period of less than 12 rnonths, starting with the
beginning of the policy period shown in the Declarations,
unless he policy period is ertended after issuance for an
additional period of less than 12 months. ln that case, the
addltlonal period will be deemed part of the last proceding
period for purposes of determining the Limits of lnsurance.
SECTION IV - GOMMERCIAL GENERAL LIABILITY
CONDITIONS
1. Bankruptcy
Bankruptcy or insolvency of the insured or of the
insured's estate will not relieve us of our obligations
under this Coverage Part.
2. Duties ln The Event Of Occurrence, Offense, Claim
Or Suit
a. Notice Of Occurrence Or Offense
You or any additional insured must see to ít that we
are notified as soon as practlcable of an
"occurrenceo or an offense which may result in a
clairn. To the extent posslble, notica should include:
(1) How, when and where the "occurrence" or
offense took place;
(2) The names and addresses of any injured
persons and witnesses; and
(3) The nature and location of any injury or damage
arising out of the "occurrencen or offense.
b. Notice Of Clalm
lf a claim is made or "suit" is brought against any
insured, you or any additional insured must:
(1) lmmediately record the specffics of the claim or
"suit" and the date received; and
(2) Notlfy us as soon as practicable.
You or any additional insured must see to lt that we
recelve written notice of the claim or "sult' as soon
as practicable.
c. Assistance And Cooperation Of The lnsured
You and any other involved insured must:
(l) lmrnediately send us copies of any demands,
notices, summonses or legal papers received in
connectíon with the claim or "suit";
(2) Authorize us to obtain records and other
ínformation;
(3) Cooperate with us in the investigation or
settlement of the claim or defense against thensuit"; and
(4) Assist us, upon our request, in the enforcement of
any right against any person or organization whidr
may bo liable to the insured because of injury or
damage to whictr thls insurance may also apply.
d. Obligations AtThe lnsureds Own Cost
No insured will, except at that insured's own cost,
voluntarily make a payment, assume any
obligation, or incur any expense, other than for first
aid, without our consent.
e. Addltional Insureds Other lnsurance
lf we cover a claim or nsuit" under this Coverage
Part that may also be covered by other insurance
available to an additional insured, such additional
insured must submit such clairn or "suit" to the
other insurer for defense and indernnity.
However, this provision does not apply to the
extent that you have agreed In a written contraot or
written agreement that this insurance is primary
and non-contributory with the additiônal lnsured's
own insurance.
f. Knowledge Of An Occurrence, Offense, Glalm
Or Sult
Paragraphs a. and b. apply to you or to any
additional insured only when such "occunsncen,
offense, claim or "suit' is known to:
(1) You or any additional insured that ls an
individual;
(2) Any partner, if you or an addltional insured is a
partnership;
(3) Any manager, if you or an additional insured is a
limited liabili$ company;
(a) Any "executive officer" or insurance manager, if
you or an additional insured is a corporation;
(5) Any trustee, if you or an addilional insured is a
trust; or
(6) Any elected or appolnted offlclal, lf you or an
additional insured is a poliücal subdlvlslon or
public entity.
This duty applies separately to you and any additional
insured.
LegalAction Against Us
No person or organization has a right under this
Coverage Part:
a. To join us as a party or otherwise bring us into a
"suit" asking for damages from an insured; or
b. To sue us on this Coverage Part unless all of its
terms have been fully complied wlth.
A person or organization may sue us to recover on an
agreed settlement or on a final judgment against an
insured; but we will not be liable for damages that are
not payable under the terms of this Coverage Part or
3.
HG 00 01 06 05 Page 13 of 18
Policy #51UUNUP3730
that are in excess of the applicable limit of insurance.
An agreed settlement means a settlement and release
of liability signed by us, the insured and the claimant or
the claimant's legal representative.
4. Other lnsurance
lf other valid and collectible insurance is available to
the insured for a loss we cover under Coverages A or
B of this Goverage Part, our obligations are limited as
follows:
a. Primary lnsurance' This insurance Is primary except when b. below
applies. lf other lnsurance is also primary, we wlll
share wlth all that other insurance by the method
described in c. below.
b. Excess lnsurance
This insurance is excess over any of the other
insurance, whether primary, excess, contingent or
on any other basis:
(1) Your Work
That ls Flre, Extended Goverage, Builder's Risk,
lnstallation Risk or similar coverage for "your
work";
(2) Premlses Rented To You
That is fire, lightning or explosion insurance for
prernises rented to you or temporarily occupied
by you with permission of the owner;
(3) Tenant Liability
That is insurance purchased by you to cover
your liabiliÇ as a tenant for "property damage"
to prernises rented to you or temporarily
occupied by you with permission of the owner;
(4) Aircraft, Auto Or Watercraft
lf the loss arises out of the maíntenance or use
of aircraft, "autos" or watercraft to the extent not
subject to Exclusion g. of Section I - Coverage
A - Bodily lnjury And Property Damage Liability;
(5) Property Damage to Borrowed Equipment Or
Use Of Elevators
lf the. loss arises out of "property damege" to
borrowed equipment or the use of elevators to
the extent not subject to Exclusion J. of Section I- Coverage A - Bodily lnjury And Property
Damage Liability;
(6) When You Are Added As An Additional
lnsured To Other lnsurance
Any other insurance available to you covering
liability for damages arising out of the premises
or operations, or products and cornpleted
operations, for whlch you have been added as
an additional insured by that insurance; or
When You Add Others As An Additional
lnsured To This lnsurance
Any other insurance available to an additional
insured.
However, the following provisions apply to other
insurance available to any person or
organization who is an additional insured under
this coverage part.
(7)
so,
This insurance is primary if you have agreed
in a written contract or written agreernent
that this insurance be primary. lf other
lnsurance is also prlmary, we will share with
all that other lnsurance by the method
described in c. below.
$,"
lf you have agreed in a wrltten contnact,
written agreement, or permit that this
insurance is primary and non-contributory
wlth the additional insured's own lnsurance,
thls insurance is primary and we will not
seek contribution from that other insurance,
Paragraphs (a) and (b) do not apply to other
insurance to which the additíonal insured has
been added as an additional insured.
When this insurance is excess, we will have no
duty under Coverages A or B to defend the lnsured
agalnst any "sult" lf any other lnsurer has a duty to
defend the lnsured against that 'suif. lf no other
insurer defends, we will undertake to do so, but we
will be entitled to the insured's rights against all
those other insurers.
When this insurance is excêss over other
insurance, we will pay only our share of the amount
of the loss, if any, that exceeds the sum of:
(f) The total amount that all such other insurance
would pay for the loss in the absence of this
lnsurance; and
(2) The total of all deduotible and self-insured
amounts under all that other insurance.
We will share the remainlng loss, if any, wilh any
other insurance that is not described in this Excess
lnsurance provision and was not bought specifically
to apply in excess of the Limits of lnsurance shown
in the Declarations of this Coverage Part.
c. Method Of Sharing
lf all of the other insurance permits contribution by
equal shares, we will follow this method also. Under
this approach each insurer contributes equal
amounts until it has paid its applicable limit of
insurance or none of the loss rernains, whichever
comes first.
Page 14 of l8 HG 00 0f 06 05
Policy #5lUUNUP3730
lf any of the other insurance does not permit
contribution by equal shares, we will contribute by
limits. Under this method, each insurer's share is
based on the ratio of its applicable limit of
insurance to the total appllcable limits of insurance
of all insurers.
5. Premium Audit
a. We will compute all premiums for this Coverage
Part in accordance with our rules and rates.
b. Premium shown in this Coverage Part as advance
prernium is a deposit premium only. At the close of
each audit period we will compute the earned
prernium for that period and send notice to the flrst
Named lnsured. The due date for audit and
retrospective premiums is lhe date shown as the
due date on the bill. lf the sum of the advance and
audit premiums paid for he policy period is greater
than the eamed premium, we will return the excess
to the first Named lnsured.
c. The frst Named lnsured must keep records of the
information we need for premlum oomputatlon, and
send us copies at such tlmes as we may request.
6. Representatlons
a, When You AcceptThls Policy
By accepting this policy, you agree:
(f ) The statements in the Declarations are accurate
and complete;
(2) Those statements ere based upon. representations you made to us; and
(3) We have issued this policy in reliance upon your
representations,
b. Unlntentlonal Fallure To Disclose Hazards
lf unintentionally you should fail to disclose all
hazards relating to the conduct of your buslness
that exist at the inception date of this Coverage
Part, we shall not deny coverage under this
Coverage Part because of such failure.
7. Separatlon Of lnsureds
Except with respect to the Limits of lnsurance, and any
rights or duties specifically assigned ln thls Coverage
Part to the flrst Named lnsured, this insurance applies:
a. As if each Named lnsured were the only Named
lnsured; and
b. Separately to each insured against whom claim is
made or "suif is brought.
8. Transfer Of Rights Of Recovery Agalnst Others To
Us
a. Transfer of Rights Of Recovery
lf the insured has rights to recover all or part of any
payment, including Supplementary Payments, we
have made under this Goverage Part, those rights
are transfened to us. The lnsured must do nothing
after loss to impair them. At our request, the
HG 00 0l 06 05
insured will bring "suifl or transfer lhose rights to us
and help us enforce them.
ïThe ¡nEfëifFwaived any rights of recovery
against any person or organization for all or part of
any payment, including Supplementary Payments,
we have made under this Coverage Part, we also
waive that right, provided the ínsured waived their
rights of recovery against such person or
organization in a contract, agreement or permit that
was executed prlor to the injury or damage.
9. When We Do Not Renew
lf we decide not to renew this Goverage Part we will
mail or deliver to the first Named lnsured shown in the
Declarations wrltten notice of the nonrenewal not less
than 30 days before the expiration date.
Ìf notice ls mailed, proof of mailing will be sufficient
proof of notice.
SECTION V - DEFINITIONS
1. "Advertisement" means the widespread public
dissemination of informatlon or images that has hE
purpose of inducing the sale of goods, products or
services through:
a. (1) Radio;
(2) Television;
(3) Billboard;
(4) Magazine;
(5) Newspaper; or
b. Any other publication that is given widespread
public distribution.
However, "advertisemenf' does not include:
a. The design, printed material, information or images
contained in, on or upon the packaging or labeling
of any goods or producß; or
b. An interactive conversation between or among
persons through a computer network.
2. "Advertising idea" rneans any ldea for annadvertisement".
3, "Asbestos hazard" rneans an exposure or threat of
exposure to the actual or alleged properties of
asbestos and includes the mere presenoe of asbestos
in any form.
4. "Auto" means a land motor vehicle, trailer or semitrailer
designed for travel on public roads, including any
attached machinery or equipment. But oauto" does not
lnclude "mobile equípment".
5. "Bodily injury" means physical:
a. lnjury;
b. Sickness; or
c. Disease
sustained by a person and, if arising out of the above,
mental anguish or death at any time.
Page 15 of 18
Policy #51UUNUP3730
6. "Coverage territory" means:
a. The United States of America (including lts tsrltorles
and possesdons), Puerto Rlco and Canada;
b, lnternatlonal waters or airspace, but only if the
injury or damage occurs in the course of travel or
transportation between any places included in a.
above; or
c. All other parts of the world if the injury or damage
arises out of:
(l) Goods or products made or sold by you in the
territory described in a. above;
(2) The activities of a person whose home is in the
tenitory described in a. above, but is away for a
short time on your business; or
(3) "Personal and advertising injury" offenses that
take place through the lntemet or similar
electronic means of communication
provided the insured's responsibility to pay damages is
determined in he United States of America (including its
tenitories and possessions), Puerto Rico or Canada, in a
"suif'on thE merits according to the substantlve law in
such tenitory or in a settlement we agree to.
7. "Employee" includes a "leased workern. "Employee"
does not include a "temporary worker".
8.'Employment-Related Practices" means:
a. Refusal to employ a person;
b. Termination of a person's employment; or
c. Employment-related practices, policies, æts or
omissíons, such as coercion, demotlon, evaluation,
reassignment, dlscipline, defamatlon, harassment,
humiliation or discrimination dírected at a person.
9. "Executive officef'means a person holdlng any of the
officer posltions created by your charter, constltution,
bylaws or any other similar governing document.
l0."Hostile fire' means one which becomes uncontrollable
or breaks out from where lt was intended to be.
ll."lmpaired property" means tangible property, other
than'your productn or "yourwork", that cannot be used
or is less useful because:
a. lt incorporates "your product" or nyour work" that is
known or thought to be defective, deflclent,
inadequate or dangerous; or
b. You have failed to fulfìll the terms of a conlract or
agreement;
if such property can be restored to use by:
a, The repair, replacement, adjustment or removal of
"your product" or "your work"; or
b. Your fulfillÍng the terms of the contract or agreement.
I 2. "lnsured contracf' rneans:
a. A contract for a lease of premises. However, that
portion of the contract for a lease of premises that
indemnifies any person or organization for damage
by fire, lightning or explosion to premises while
Page l6 of 18
rented to you or temporarily occupied by you with
permÍssion of the owner is subject to the Damage
to Premises Rented To You Limit described in
Section lll - Limits of lnsurance;
b. A sidetrack agreement;
c. Any easement or license agreement, including an
easement or license agreement in connection with
construction or demolition operations on or within
50 feet of a railroad;
d. An obligation, as required by ordinance, to
indernniff a municipality, except in connection with
work for a munlclpality;
e. An elevator maintenance agreement;
f. That part of any other contract or agreement
pertaining to your business (including an
indemnÍfication of a municipality in connection with
work performed for a municipality) under which you
assume the tort liabilÌty of another party to pay for
"bodily injury" or "property damagen to a third
person or organizatlon, provided the "bodily injury"
or "property damage" is caused, in whole or in part,
by you or by lhose actlng on your behalf. Tort
llabllity means a liability that would be imposed by
law in the absence of any contract or agreement.
Paragraph f. includes that part of any contract or
agreement that indemnifies a railroad for 'bodily
injury" or "property damage" arising out of
construction or demolition operations, within 50 feet
of any railroad propefi and affecting any railroad
bridge or trestle, tracks, road-beds, tunnel,
underpass or crossing.
However, Paragraph f. does not include that part of
any contract or agreement:
(1) That indemnifies an architect, engineer or
surveyorfor injury or damage arising out of:
(a) Preparing, approving, or failing to prepare or
approve, maps, shop drawings, opinions,
reports, surveys, field orders, change orders
or drawings and specifications; or
(b) Giving directions or instructions, or failing to
give them, if hat is the primary cause of the
injury ordamage; or
(2) Under which the insured, if an architect, engineer
or surveyor, assumes liabilig for an injury or
damage arising out of the ínsured's rendering or
failure to render professional services, lncluding
those listed in (f ) above and supervisory,
inspection, architectural or engineering activiües.
l3."Leased worker" means a percon leased to you by a
labor leasing firm under an agreement between you
and the labor leasing firm, to perform duties related to
the conduct of your business. "Leased workef does
not include a'temporary workef'.
l4."Loading or unloadlng" means the handling of property:
a. After it is moved from the place where it is accepted
for movement into or onto an aircraft, watercraft orttautott;
HG 00 01 06 05
Policy #51UUNUP3730
b. While it is in or on an aircraft, watercraft or "auto";
or
c. While it is belng moved from an aircraft, watercraft
or "auto" to the place where it is flnally dellvered;
but "loading or unloading" does not include the
movement of property by means of a mechanical
device, other than a hand truck, that is not attached to
the aircraft, watercraft or "auto".
lS."Mobile equipment" means any of the following types
of land vehicles, including any attached machinery or
equipment:
a. Bulldozers, farm machinery, forklifts and other
vehicles designed for use principally off public
roads;
b. Vehicles maintained for use solely on or next lo
. premises you own or rent;
c. Vehlcles ürat travel on crawler treads;
d. Vehlcles, whether self-propelled or not, maintained
prlmarlly to provide mobility to permanently
mounted:
(1) Power cranes, shovels, loaders, diggers or
drllls; or
(2) Road construction or resurfacing equipment
such as graders, scrapers or rollers;
e. Vehicles not described in a., b., c. or d. abcn¡e that
are not self-propelled and are mainlained primarily
to provide mobility to permanently attached
equipment of the following types:
(1) Air compressors, pumps and gênerators,
including spraying, weldlng, building cleaning,
geophyslcal exploratlon, llghting and well
servlclng equlpment; or
(2) Cherry pickers and similar devices used to raise
or lower workers;
f. Vehides not described in a., b., c. or d. above
maintained primarily for purposes other than the
transportation of persons or cargo.
However, self-propelled vehicles with the following
$pes of permanently attached equipment are not
"mobile equipment" but will be consldered "autos":
(1) Equipment, of at least 1,000 pounds gross
vehicle weight, designed primarily for:
(a) Snow removal;
(b) Road maintenance, but not construction or
resurfacing;or
(c) Street cleaning;
(2) Cherry pickers and similar devíces mounted on
automobile or tuck chassis and used to raise or
lower workers; and
(3) Air compressors, pumps and generators,
including spraying, welding, building cleaning,
geophysical exploration, lighting and well
servicing equipment.
HG 00 0l 06 05
16."Occurrence" means an accident, including continuous
or repeated exposure to substantially the same general
harmful conditions.
17.'Personal and advertlsing injury' means lnjury,
including consequential "bodlly injury", arising out of
one or more of the following offenses:
a, False arrest, detention or imprisonment;
b. Maliciousprosecution;
c. The wrongful eviction fom, wrongful entry into, or
invasion of the right of private occupancy of a room,
dwelling or premises that a person occuples,
committed by or on behalf of its owner, landlord or
lessor;
d. Oral, written or electronic publication of material
that slanders or libels a person or organization or
disparages a person's or organization's goods,
products or services;
e. Oral, written or electronic publication of material
that violates a person's right of privacy;
f. Copflng, in your "advertisementn, a person's or
organization's "advertising idean or style of
"advertlsement";
g. lnfingement of copyright, slogan, or title of any
literary or artistic work, in your "advertisemenf'; or
h. Discrimination or humiliation that results in injury to
the feelings or reputation of a natural person.
lS."Pollutants" mean any solid, liquid, gaseous or thermal
irrltant or contaminant, including smoke, vapor, soot,
fumes, aclds, alkalis, chemicals and waste. Waste
includes materials to be recycled, reconditioned or
reclaimed.
I9. "Products-completed operations hazard";
a. lncludes all "bodily injury" and "property darnagen
occuning away from premises you own or rent and
arising out of "your product" or "your worK' except:
(l) Products that are still in your physical
possession; or
(2) Work that has not yet been completed or
abandoned. However, 'your work" will be
deemed completed at lhe earllest of the
followlng times:
(a) When all of the work called for in your
contract has been completed.
(b) When all of the work to be done at the job
site has been completed if your contract
calls for work at more than one job site.
(c) When that part of the work done at a job site
has been put to its intended use by any
person or organlzatlon other than another
contractor or subcontractor worklng on the
same project.
Work that may need service, maintenance,
correction, repair or replacement, but which is
otherwise complete, will be treated as
completed.
Page 17 of l8
Policy #51tlUNUP3730
b. Does not include 'bodily injury" or "property
damage" arising out of:
(1) The transportation of property, unless the
injury or damage arises out of a condition in or
on a vehicle not owned or operated by you,
and that conditíon was created by the "loading
or unloading" of that vehicle by any insured;
(2) The existence of tools, uninstalled equipment
or abandoned or unused materials; or
(3) Products or operations for which the
classification, listed in the Declarations or in a
polioy sohedule, states that products-
completed operations are subject to the
General Aggregate Limit.
20, "Property damage" means:
a. Physical injury to tangible property, including all
resulting loss of use of that property. All such loss
of use shall be deemed to occur at the tirne of the
physical injury that caused it; or
b.. Loss of use of tangible property that is not
physically injured. All such loss of use shall be
deerned to occur at the time of the "occurrence"
that caused it.
As used ln thls deflnltlon, computerlzed or
electronically stored data, programs or software are
not trangible property. Electronic data means
information, facts or progmms:
a. Stored as or on;
b. Greated orused on; or
c. Trensrnitted to orfrom;
computer softìilare, including systems and
applications software, hard or floppy disks, CD-
ROMS, tapes, drives, cells, data processing devices
or any other media which are used with electronically
controlled equipment.
2l."Suit" means a civll proceeding ln whlch damages
because of 'bodlly lnJur/', "property damage" or
'personal and advertising injury" to which this
insurance applies are allaged. "Suit" inoludes:
a. An arbitration proceedlng ln which such damages
are claimed and to which the insured must submit
or does submit with our consent; or
b. Any other altemative dispute resolutlon
proceeding in which such damages are claimed
and to which the insured submits with our
consent.
22."Temporary worker' means a person who is
furnished to you to substitute for a permanent
"employee" on leave or to rneet seasonal or short-
term workload condltlons.
23."Volunteer worke/' means a person who
a. ls not your "employee";
b. Donates his or her work;
c. Acts at the direction of and within the scope of
duties determined by you; and
d. ls not paid a fee, salary or other compensation by
you or anyone else for their work performed for
you.
24.\our product':
a. Means:
(1) Any goods or products, other than real
property, manufactured, sold, handled,
distributed or disposed of by:
(a) You;
(b) Others trading under your namet or
(c) A person or organization whose business
or assets you have acquired; and
(2) Containers (other than vehicles), materials,
parts or equipment furnished in connection
wlth such goods or products.
b. lncludes
(l) Wanantles or representations made at any
tlme wlth respect to the fltness, quality,
durablllty, performance or use of "your
product";and
(2) The providing of or failure to provide warnings
or instructions.
c. Does not include vending machines or other
property rented to or located for the use of others
but not sold.
25."Your work":
a. Means:
(1) Work or operations performed by you or on
your behalf; and
(2) Materlals, parts or equipment fumished in
connection with such work or operations.
b. lncludes
(l) Warranties or representations rnade at any
time with respect to the fitness, quality,
durability, performance or use of nyour work",
and
(2) The provlding of or failure to provide warnings
or inslructions.
Page 18 of 18 HG 00 01 06 05
THIS ENDORSEMENT GHANGES THE POLICY.PLEASE READ IT GAREFULLY.
WORKERS' COMPENSATION BROAD FORM ENDORSEMENT
EXTENDED OPTIONS
Pollcy Number: 51 t{E r,M4z41 Endonement llumber:
Effecüve Date: 06/01/l-s Efüdiw hour is tñe same as strted on he lnformation Page of the pollcy,
llamod ln¡urcd ¡nd Addrccs: BRot¡N ARMsrRoNc AccoulrrÀì¡cy
CORPORATION
4200 TRUXTUN Àl¡E STE 300
BAKERSFIEIJD, CÀ 93309
Sestion I of this endomemEnt expands coverage provlded under WC 00 00 00.
Section ll of this endorsement provides additional coverage usually only provlded by endoæement
Section lll of this endorsem€nt is a Schedule of Govered States.
You may use the index to locats these coverage foah¡rcs quickly:
SUR'ECT
sEcnoil ¡
PARTS ONE end TWO
01 Wê \Mll Also Pay
PART.THREE
02 How This lnEurance Works
PART.SIX
03 Transfer of Your Rþhb and Duties
04 Llberalizatlon
sEcTloN ll
VOLUT{TARY COIIPENSANON IIISURANGE
05 Voluntary Compensation lnsuranceA. How This lnsumncs Applies
B. IÂ/e WiÍ pay
C. Exclusions
D, Bêbrê \,V€ Pey
E. Recovery From OhersF. Employêrs' Liabilþ lnsurance
EHPLOYERS' LIAB¡LITY STOP GAP
ENDORSEiIENT
06 Employers' Liability Stop Gap
Coverage
A. Stop Gap Coverage Llmited to
Montana, North Dakota, Ohio,
Washington, West Virginia and
Wyoming
PAGE I SUBIECT
B. Part One Does Not Apply
C, Applícation of Coverage
D. Addlt¡onal Erclueione
E. Wbet Mrginla
EXTENDED OPNONS
01 Employers' Llability Ineurance
02 Unintentional Fallule to Disclose
Hezards
2
2
2
2
2
2
2
2
2'
2
2
2
3
3
3
3
3
3
4
4
4
4
4
5
5
5
5
5
5
PAGE
3
3
3
3
4
4
4
03
04
Waiwr of Our Right to Recover from
Otherg
Foreign Volunbry Compensation
A. How This RElmbursement Applies
B. lþVvill Reimburse
C. E:tclusions
D, Before We Pay
E. Recovery From Others
F. Reimbursement ForAct¡al Loss
Sustalned
G. Repatrlatlon
H. Endemic Diseese
Longshore and Harbor Workore'
Gompensation Act Covêrage
Enclorsement
3
3
sEcTtoN ill
01 Schedule of Cove¡ad States
Fo¡m WC 99 03 03 B Printed in U.S.A. (Ed. 8/00)
Proce¡¡ Drto: o3/17l15
@ 2000, The Hartbrd
Page I ofo
Pollcy Explnüon Dab: 06/ot/L6
sEcTtoN I
PARTS ONE and TWO
1, WEYYILLALSO PAY
D, We Will Al¡o Pay of Part One (!tORKERS'
COMPENSATON INSURANCE); anO
E. We Wll! Also Pay of P¡ÉTwo (EMPLOYERS'
LIABILITY INSURANCE) is r€ptaced by iho
following:
llle Wll Also Pey
We will also pay these cosF, in addltion to
other amounts payable under this ¡nsurancê,
as part of any clalm, proceeding, or suit we
defend:
1. reasonable €xpenses incunêd at our
request, II{CLUDING toss of eamings;
2, pramluma for bonds to r€lease
aüâchm€nb and for app€al bonds ln bond
amounb up to the limlt of our liabilþ
under this ¡n$urence;
3. litígation cosb bxed against youi
4. lnterest on a judgment as required by law
until we ofrer the amount due under thls
law: and
5. expens€s ws incur.
sEcTtoN il
VOLUNTARY COMPENSATION AI|ID EMPLOYERS'
LIABILITY COVERAGE
5. VoluntaryCompenaatlon lnsurenco
A. How This lnsunnceAppllee
This insurance applies to bodily inlury by
accident or bodily injury by disease. Bodiþ
injury includes resulting death.
1. The bodily injury muot be sustained by any
officer or employee not subJect to $e
workers' compensalion law of any sbte
shown in lt€m 3.4. of üle lnformetion
Page.
2. The bodily injury rnust arise out of and in
the course of employment or incidental to
work in a steûË shown in ltEm 3.4. of fie
lnformation Page,
PART THREE
How Thls ln¡u¡ance Appliec
Paragraph 4. of A. How Thlg ln¡urance Applleo
of Part 3 (Other States lnsurance) ts replaced by
the following:
4. lf you have wok on the êfiêct¡ve date of thls
policy ¡n any stâtê not ¡ist6d in ltem 3.4. of the
lnformatlon Page, cov€tage will not be
afrordEd br that gþts unl€ss wo ar€ notified
wlthÍn S¡xty days.
PART SIX
Transfer (}f Your Rlghte and Dutleg
C. Tnn¡br Of Your Rightr and Dutisc of Part 6
(ConditÍons) is replaced by the follorring:
Your rþhb or duties under this policy may not
be tansbned witror¡t our written consent.
lf you die and we receive notice within slrty
days after your deaü, we wil! cover your legal
rBpresentetivê as insurÊd.
Liberalization
lf u,e adopt a chenge in thie form that would
broaden üre coverage of üris form without e¡<ùa
chårge, the broader coì/€ragg wlll apply to this
policy. lt will apply when üe change becomes
efiective in your state.
The bodily injury must occur in üre Unibd
Stâtee of Arnerica, its tsritories or
poesessions, or Ganada, and may ocorr
elsewherg if the employee is a United
States or Canadian citizen, or otheftviee
legal resident, and legally employed, in the
Unlþd Ståtes or Canada and têrnporarlty
away from those places,
Bodlly lnjury by accident must oocur
during the policy pêriod.
Bodily lnJury by d¡sease must bs caused
or aggravaùed by the condrtions of he
2.
3.
4,
Form WG 99 03 03 B pfinred in u,s.A. (Ed. 8/00)Page 2 of 6
c.
ofñce/s or employee's employment The
offcer's or €mployee's last day of last
exposure to the conditions causing or
aggmvating suû bodily injury by dlseaee
must occur during he policy period.
We Wlll Pay
We will pay an amount equal to the benefiE
that would be required of you as if you and
your employegs w€re subject to the workero'
compensation law of any state shown in ltem
3.4. of the lnformaüon Page. We will pay
thoEa amounts to the persons wtro would be
entiüed to lhem under the law.
Excluslon
Thls ineurencÊ doeg not cover:
1. any obligation imposed by workeæ'
compensation or ocelpaüonal disease law
or any similar law.
2. bodily injury intentionally caused or
aggramted by you,
3. ofrcers or employees who haw elec'ted
not to ba subjed to the state wofters'
cornpensation law.
4. parhers or sole proprietora not covered
undEr the Standerd Sole Proprietors,
Partners, Otrcere and Oüers Corærage
Endorsement
Beforo We Pay
BeforE we pey b€nefite to the persone entiüed
to them, they must
1. Release you and us, in writlng, of all
responsibllity for the injury or death.
2. Transbr to w thoir right to rccowr from
others who may be respons¡ble for the
injury or deaü.
3. Cooperats with us and do everly'hing
necessary to eneblg us to Enforcê the right
to recovet from otñers.
lf the persons entiüed to úre benefib of üris
insurance fail to do thoee things, oür duty to
pay ends at oncs. lf they claim darnages from
you or from us for the ínjury or death, our duty
to pay ends at onc€.
Recovery From Otfieru
lf we make a !êcovery from others, uæ will
keep an amount equal to our expenses of
r€covery and the beneñts we paid, We will
pay the balance to the persons entiüed to it.
lf lle parsons 6nttêd to the benEñts of tiis
insurancE make a rêcovêry from othêrs, ü€y
must reimbunse ug for the benefitr we pakl
them.
F, Employerc' Llabllfi ln¡urance
Part Two (Employers' Uabilþ lnsurance)
applies to bodi¡y lnlury cover€d by this
Endorsement es thongh he State of
Employment was shown in ltem 3.À of the
lnbrmation Paç.
This provision 5. does not apply in New Jersey or
Wsconsin.
EIIPLOYERS' LIABILITY STOP GAP COVERAGE
6. Employertl'Llablllty Stop Gap Govenge
A This corærage only applies Ín Montana, Nortñ
DakotE, Ohlo, Washlngton, WêBt Mrglnia and
lÂlyoming.
B. Paft One (Workers' Compensatlon lnsuranca)
does not apply to wort ln stgtes sho¡vn ln
Paragraph A above.
C. Part Two (Employers' Uabillty lnsurance)
applies in üe states, shown in Paragraph 4.,
as üough they nerc shorn in ltem 3.A, of the
lnfomation Page.
D, Part Two, Sec'tion C. Erclusíons is changed
by adding these excluÊions.
Thie insurâncg doeg not cove[
5. bodily injury intentionally caused or
aggravãt€d by you or in Ohio bodily injury
resulting fom an act whlch ls determined
by an Ohlo court of law to haw been
committed by you wtth the belief üan en
lnJury is substantlally certaln to occur.
Howewr, the cost of defunding aucå
daims or suÍts in Ohio is covered.
13. bodily injury sustained by any member of
the fiying crew of any aircrafr.
14. any delm for bodlly injury wlth resped to
which you are depriried of any deftnse or
defenses or are othenryis€ subjed to
penelty becausE of default ln premlum
under the provieions of the workers'
compensation law or laws of a stats
shown ln Paragraph A,
E. This lnsuranc€ applies to damages br whlch
you ale liable under Wèst Vlrglnia Code Annot.
s23H-2,
D.
Form WC Sg 03 03 B Priritêd in U.S,A. (Ed. S/00)Page 3 of 6
EXTENDED OPTIONS
t.Employerr' Llabllþ lnsur¡nce
lbm 3.8. of +ùo lnformation Page is replaced by
the tullowing:
B. Employerr' Liabllltyln¡urance:
1, Part Two of the policy applies þ work ln
aach stab listed in ltem 3.A.
The Limib of L¡ablllty under Part Two are
the higher ot
Bodlly Infury
by Accldent $500,000 EachAccident
Bodlly lnjury
by Dlsease $ı00,000 Policy Llmlt
Bodlly lnjury
by Dlaease
OR
$500,000 Each Employee
2, The amount shown in the lnfurmation
Page.
Thts provision 1 of EXTENDED OPT|ONS does not
apply in New York bacause the Limits Of Our
LiabiliV are unllmiþd,
ln this provision the limits are changed from
t500,000 to t|,000,000 in California.
Unintentional Failure to Dl¡close Hazards
lf you unintentionally should fail to disclose all
existing ha-ardg at the inc€ption date of your
policy, we shell not deny coverage under this
policy because of such Êailure.
Walvsr of Our Rlght To Recover From Other¡
A. We have the rigtrt to recovêr our payments
from anyone llablê br an injury covered by this
policy, ì/Ve will not enforce our right against
any p€rson or orgenlzåtion for whom you
perbm work under a written conûact tñat
requires you to obtain this agreement from ue.
This agreement shall not operate dlrecüy or
indlredly to benefit anyons not namêd in the
agreemenL
B. This provision 3. does not apply in the etates
of Pennsylvania and Utah.
Fomlgn Voluntary Compenratlon and
Employen' Llablllty Reimbu'lem¡nt
A. How Th¡o ReimbucementAppller
Thls relmbursement provision applies to bodily
injury by accident or bodily injury by disease,
Bodily injury lndudæ reeulting death.
1. The bodily infury must be sustalned by an
ofrcgr or employee.
2. The bodily ínjury must occur in the course
of employment nooessary Ar incideÍbl lo
work in I county not listed ln Exclßlon
C.1. of this provision.
3. Bodi¡y injury by accident must ocÆur
during the pollcy period,
4. Bodily lnjury by disease must be cauEed
or aggravated by the ¿rnditions of your
employment. The officer or employee's
last eryosuæ to those conditions of your
employment must ocflr during the policy
period.
We W¡ll Relmburue
\¡G will r€imþurse you br all amounts paid by
you wheher such amounb arÊ:
1. voluntary paymonts for the bEnefits that
would be rcqulred of you if you and your
oficers or employees were subjec-t to any
wod<ere' componsetion law of the statE of
hire of ûe individual employee.
2, sums to vrtrich Part Two (Employers'
Liabilþ lnsurance) would apply if the
Courrtry of Employment we¡e shown in
Item 3.4. of the lnformaüon Pâge.
Excluslon¡
This insurance does not covel-.
1. any occurencss in the United StaÞs,
Canada, and any country or judsdiction
whiclr is he subjed of bade or economlc
sandions imposed by thE la¡re or
ragulations of the United States of
Amerlcs in efbct as of the lnceptlon date
of tris policy.
2. any obligaüon lmpæed by a workers'
compensation or ocanpational diseâse
law, or similar law.
3. botlily injury inÞntíonally caused or
aggravebd by you.
B.
c.
Form WC 99 03 03 B Printed in U.S.A. (Ed. 8/00)Page tl ol6
D.
4. líability for any consêquenoe, whether
d¡rect or indirect, of war, invasion, act of
Forefgn enemy, hosüllües (whether war be
decfared' or not), civil wer, rebellion,
revolution, insunection or military or
usurped power. No endorsement now or
subsequenüy attached b this policy shall
be consfued as oræniding or waiving this
limitation unless specific reÍErEncE iE
made thercto.
Beforu We Pay
BEfore we rsimburse you fur the bEnEfits to the
p€rsons entiüed to them, you must have them:
1. release you and us, in writing, of all
responslbility for the injury or death,
2, transÈr to us tñeir right to recover from
oüers who may be responsible fur their
inJury or deÊth,
3. cooperate wih us and do errer¡y'hing
necessary lo enable us to enforce the right
to recover fom others.
lf the persons sntiüed to the b€nefits paid fail
to do thss€ things, our duty to reimburse ends
at once. lf hey daim damages from ug br thE
injury or dEath, our duty to reimburse ends at
onæ.
Recovely From Otlrer¡
lf we make e r€covgry fom others. urÊ will
keep an amount equal tro our expenses of
rscovery and the benefits we fsimbursed. \ Je
wifl pay tha balance to the peraons entiüed to
¡t. lf persons entitled to the benefib make a
recov€ry fom other8, they must repay us for
the amounb thet wo haw reimbursed you.
Relmbu¡sement for Actuel Loss Su¡talned
ThiB endoraement provides only fpr
reimbursement for the loss you actuallygustain. ln order for you to recovor logs or
expenses under this reirnbuæement you must
1. actually sustrln and pay the loee or
exp€nsê in money aftEr trial, or
2. secur€r our consent for the payrnent of the
loss or expÊnse.
Repatrlaüon
Our rÞimbursement indudes the addiüonal
expenses of repatriation to the UníÞd States
of America necessarily incured as a dircc-t
result of bodily injury.
Our relmbursement shell be limited as tullows:
1. to the amount by whicfr such expenses
exæed the normal cost of retuming the
ofice¡ or Empfoyêe if in good health, or
2. in the event of death, to the amouñt by
whlch such exp€ns€s o<ceed the normal
cost of rctuming the ofllcer or employee lf
alíve and in good health.
ln no event shall our reimbursement gxc€ed
the bodily lnjury by accident limlt shovrn in
Item 3.8. of tho Informetion Page as respec.ts
any one such oficer or employee wheher
dead or alive.
H. Endemlc D¡so.se
The word "disease" includes any endemlc
die€ases.
The coverage applies es lf endemic diseases
r¡rore induded In the provisione of he workers'
compensation law.
Longshore and Ha¡tor Worke¡¡' Gompenaaüon
Act Covenge
Gene¡¡l Socüon G. Workerg' Gompenradon
Law is replaced by the following:
G. Wortere'Compensaüon Law
Wod<en' Compensation Lew moans the
workers ot wotkers' compensation law and
ocrcupaüonal disêas€ law of each staþ or
tenitory named in ltem 3.A" of tha lnbrmation
Page and tie Longshore and Hartor Wod<ers'
Compensatlon Act (33 USC Sec{ons 901-
950). lt includes any amendmEnb to those
laws that are in Efbct durlng the policT period.
It does not include any oher fpderEl workers
or workerc' compensation law, other Íaderal
occupational disease law or the provisions of
eny law that provide nonoccupational disabilig
benefits.
Part Two (Employers' Liability lnsurance), C.
Exclusions, exclusion 8, does not apply to
work subjed to the Longshore and Harbor
\Àlorkers' Compensation Act.
This coverage does not apply to work subjectto th€ Defence Base Act, üe Outer
Conlinental Shelf Lands Ad, or the
Nonappropdated Fund lnsùumentalities Act,
E.
F.
G.
Form WG 99 03 03 B Printed in U.S.A. (Ed. U00)Page ı of 6
cÀ
sEcTloN m
SCHEDULE OF COI'ERED STATES
A. This endorsement only applies ln the eÞtes
listed in this Schedule of Covered States.
C. Schedule of Covered Stetes:
Count€rs¡gnêd by
lf a cffi. ehown in lt€m 3.A, of the lnbmdion
Page, approws this endorsement afier he
effective datê of thís policy, this endorsoment
will apply to this polÌcy. The coverage will
apply ln tfie new sbte on the effective daþ of
the ¡tate approval.
Form WC 99 03 03 B Pdnþd in U.S.A. (Ed. S/00)
CostProposal
Last Best and Final OfFer
f, tttt!
ul
trl
tf ¡t
iln
iltt
'tN
TT
il
It
t¡
lr
COST PROPOSAL - LAST BEST AND FINAL OFFER
BnOWN AnmSTRoNG
t.F.lã I lr
The total all-inclusive maximum price contains all direct and indirect costs, including all
out-of-pocket expenses. The total all-inclusive maximum prices provided below
constitute our last best and final offer,
a. Summary Fee Schedule for All Audit Components
CITY OF FRESNO
PROFESSIONAL AUDIT SERVICES RFP
RFP No: 93L7
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
HOURS
FY 2015
HOURLY
RATE
TOTAL
FY 2015
lOTAL
FY 2016
TOTAL
Ft 2l¡17
TOTAL
FY 2018
Partners 100 $200 $ 20,000 $ 20,325 $ 20,745 $ 21,025
Managers 200 L70 34,000 34,700 35,425 36,100
Supervisory Staff 4LO t20 49,200 50,235 5L,L25 52,100
Staff 1,020 90 91,800 93,700 95,700 97,700
Other (clerical)30 65 1,950 2,030 2,095 2,150
Subtotal for
Services Described
in RFP
7,760 196,950 200,990 205,080 209,075
Out-of-pocket
Expenses 3,050 3,1 10 3,120 3,325
Discount (30,000)(30,615)(3 1,230)(31,860)
Total All-inclusive
Maximum Price $ 170,000 $ 173,485 ç 176,970 $ 180,540
Certified Public Accountants
Bnow¡r AnusrnoNc Providing Auditing & Accounting
Services for 40 Years
COST PROPOSAL - LAST BEST AND FINAL OFFER
b.
1.
Fee Schedules
CAFR, GANN Limit,
for Various Audit Components
& Management Letter(s)
2. Single Audit (6 major programs)
HOURS
FY 2015
HOURLY
RATE
TOTAL
FY 2015
TOTAL
FY 2016
TOTAL
Ft 2017
TOTAL
FY 2018
Paftners 79 $ 200 $ 15,800 $ 16,100 $ 16,450 $ 16,700
Managers 163 170 27,7t0 28,300 28,900 29,400
Supervisory Staff 305 t20 36,600 37,30O 38,000 38,800
Staff 796 90 7t,640 73,tOO 74,600 76,LOO
Other (clerical)27 65 1,365 1,400 L,430 1,500
Subtotal for
Services Described
iñ EltrEl
r,364 153,115 156,200 159,380 162,500
Out-of-pocket
Exoenses 2,685 2,800 2,820 3,000
Discount (23,370)(23,850)(24,330)(24,825)
Total All-
inclusive
llavim¡¡m Dvi¡a
$ t32,430 $ 135,150 $ 737,870 $ 140,675
HOURS
FY 2015
HOURLY
RATE
TOTAL
FY 2015
TOTAL
FY 2016
TOTAL
Ft 2l¡t7
TOTAL
FY 2018
Partners 10 $ 200 $ 2,000 $ 2,000 ç 2,075 $ 2,125
Managers 16 L70 2,720 2,800 2,900 3,000
Supervisory Staff 56 r20 6,720 6,900 7,000 7,700
Staff t24 90 1 1,160 11,400 11,600 11,800
Other (clerical)4 65 260 300 325 350
Subtotal for
Services Described
in DtrD
2t0 22,860 23,40O 23,900 24,375
Out-of-pocket
Exoenses 140 100 100 t25
Discount (3,450)(3,525)(3,600)(3,675)
Total All-
inclusive
Mlvim¡rm Dri¡a
$ 19,550 $ 19,975 $ 20,400 $ 20,825
Certified Public Accountants
BnowN AnusrnoNc Providing Auditing & Accounting
Services for 40 Years
COST PROPOSAL - LAST BEST AND FINAL OFFER
3. Health & Welfare (no standalone repoft)
HOURS
FY 2015
HOURLY
RATE
TOTAL
FY 2015
TOTAL
FY 2016
TOTAL
Ft 20L7
TOTAL
FY 2018
Paftners 4 $200 $800 $800 $820 $800
Managers B L70 1,360 1,400 r,425 1,500
Supervisory Staff 18 I20 2,t60 2,200 2,225 2,300
Stafl'40 90 3,600 3,700 3,800 3,900
Other (clerical)2 65 130 130 130 100
Subtotal for
Services Described
iñ EltrEt
72 8,050 8,230 8,400 8,600
Out-of-pocket
Exoenses 50 70 100 100
Discount ( 1,215)(1,245)(7,275)(1,305)
Total All-
inclusive
llavim¡¡m D¡i¡a
$ 6,885 $ 7,055 $ 7,225 $ 7,395
4.Fresno Area Express (FAX) NTD Repoft
HOURS
FY 2015
HOURLY
RATE
TOTAL
FY 2015
TOTAL
FY 2016
TOTAL
Ft 2l¡t7
TOTAT
FY 2018
Paftners 3 $200 $600 $600 $600 $600
Managers 6 t70 1,020 1,000 1,000 L,000
Supervisory Staff 16 r20 r,920 2,000 2,000 2,000
Staff 28 90 2,520 2,600 2,700 2,800
Other (clerical)3 65 195 200 200 200
Subtotal for
Services Described
in DtrD
56 6,255 6,400 6,500 6,600
Cut-of-pocket
Exoenses L45 100 100 100
Discount (e60)(s7s)(ss0)(1,005)
TotalAll-
inclusive
lla-ia..r D-i-^
$ 5,440 $ 5,525 $ 5,610 $ 5,695
Certified Public Accountants
BnowN AnusrnoNc Providing Auditing & Accounting
Services for 40 Years
COST PROPOSAL - LAST BEST AND FINAL OFFER
5. Passenger Facility Charge (PFC) Airpofts billed to Airpofts
HOURS
FY 2015
HOURLY
RATE
TOTAL
FY 2015
TOTAL
FY 2016
TOTAL
¡-tt 2lJ17
TOTAL
FY 2018
Paftners 4 $200 $800 $825 $800 $800
Managers 7 t70 1,190 7,200 1,200 t,2oo
Supervisory Staft 15 t20 1,800 1,835 1,900 1,900
Staff 32 90 2,880 2,9OO 3,000 3,100
Other (clerical)65
Subtotal for
Services Described
in DtrD
58 6,670 6,760 6,900 7,OOO
Out-of-pocket
Expenses 30 40
Discount (1,005)(1,020)(1,035)(1,050)
TotalAll-
inclusive
llavin..* D-i¡a
$ 5,695 $ 5,780 $ 5,865 $ 5,950
6. GANN Limit (Appropriations Letter)
Fees for the GANN Limit (Appropriations Letter) are included in item 1 on page 2.
Bnow¡r AnusrnoNc Providing Auditing & Accounting
Services þr 40 Years
4
Certified Public Accountants
lli
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H
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TechnicalPrcpo I
Dtrl'i
J
TABLE OF CONTENTS
BnoWNT ATnSTRoNG
I lç
TABLE OF CONTENTS
Page
Transmittal Letter 1
Detailed Proposal
a" General Requirements. 3i. Firm Qualifications and Experience..."... 3¡i. Joint Venture. ...."..... 4i¡i. Disclosures..... 4iv. Staff Assigned to Engagement 5v. similar Engagements with other Government Entities 1gvi. Subcontracting 19vii. Local Preference ".."" 19
b. Independence..... 19
c. Plan for Audit ZO
d" Discussion of Relevant Accounting Issues 2g
e. Assistance Requested from City Staff Zg
f . Identification of Anticipated Potential Audit problems. 32
g. Additional Information 32
Required Proposer Statements...." 33
Authorized Signature .... 39
Dollar Cost Proposal . 42
EXHIBITS
Exhibit I - External Quality Control Review Report
Exhibit II - Sunnmary of Recent Governmental Audit Experience "."..
ATTACHMENTS
California Jurat with Affiant Statement
Unanimous Written Consent of Board of Directors
Bnowu AnusrnoNc
Certified Public Accountants
44
45
Providing Auditing & Accounting
Services for 40 years
TRANSMITTAL LETTER
BnoWFJ ATnSTRoNG
I !r
Brown Armstrong Accountancy Corporation (Brown Armstrong) is pleased to submit
this proposal to perform professional auditing services for the City of Fresno for the
fiscal years ending June 30, 20L5, 2oL6, 20L7 and 2018. This proposal will
demonstrate to you that our firm is uniquely qualified to serve as your auditors.
We have thoroughly read your request for proposal and feel that we are the best
candidate to meet your needs as listed in the request for proposals. We are
committed to performance and efficient completion of this audit on or before the
dates specified in your request for proposal.
Brown Armstrong is one of the largest regional accounting firms in California. Our
mission is simple, we set out "to exceed expectations and provide opportunities" for
our clients. Our seventy-six (76) employees lead us in achieving this mission by
working with our clients individually to overcome any challenges with a special
combination of knowledge and experience in city audits. We have audited numerous
agencies similar to yours for almost four decades. We are expefts in governmental
accounting and auditing and have assisted numerous clients in receiving the
Ceftificate of Achievement for Excellence in Financial Reporting.
At Brown Armstrong, we understand that your timeframes must be met. As one ofour key strengths, we develop an approach by which specific deliverables are
achieved within set timeframes. We will work with you to develop a timeline that
meets your specific requirements, meeting dates, field work dates, status reporting
dates, and final report dates"
Our firm paftners, managers, and seniors are actively involved in trade associations
such as the Government Finance Officers Association (GFOA) and the California
Society of Municipal Finance Officers (CSMFO), Several of our Partners are pro bono
recognized reviewers for the GFOA Certificate of Achievement Award Committee.
We enthusíastically contribute our time to this Award process because as we review
CAFRs from all across the United States, we maintain current, up-to-date
knowledge of municipal accounting principles.
Beyond the activity in trade associations, we offer our clients the education and
organization to prepare themselves for upcoming regulation and compliance
changes.
Our approach, peoplen commitment to timelines, and dedication to financial
repofting excellence makes Brown Armstrong the best-qualified firm to meet your
needs.
Bnown AnvlsrnoNc
Certified Public Accountants
Providing Auditing & Accounting
Services for 40 years
lR
TRANSMITTAL LETTER
I will be the enEagement partner and primary liaison responsible for all services tothe City of Fresno (the City), and I am entitled to represent the firm, empowered to
submit this bid, and authorized to sign a contract with the City. I can be contacted
at7673 North Ingram, suite 101, Fresno, cA g37Lt, Tel (gg8) 565-1040, Fax (661)
324-4997, or by email, rflores@bacpas,com.
Eric Xin, cPA, MBA, may also be reached at exin@bacpas.com, with the same
address and phone number. Eric is our niche leader for government, and together
we will be the project managers on the engagement.
I confirm that the information provided in this proposal is accurate and that the
terms and conditions of this proposal are a firm and irrevocable offer for ninety (gO)days. Please call me if I can clarify or expand on any item contained ¡il tn¡Á
proposal" We appreciate the opportunity to provide you with the outstanding service
you expect.
Sincerely,
BROWN ARMSTRONG
ACCOU NTANCY CORPORATION
By:
¿frSue$,d¡
Rosalva Flores, CPA
Principal
Bnowu AnnnsrnoNc
Certified Fublic Accountants
Providing Auditing & Accounting
Services for 40 lears
DETAILED PROPOSAL
BnoWN ATnSTRoNTG
I l"
a. General Requirements
The purpose of the proposal is to demonstrate the qualifications, competence andcapacity of the nfqt seeking to undertake an independent audit of the City ofFresno's (the City) financial statement in conformity with the requirements of the
RFP.
Brown Armstrong is a full service regional accounting firm. Our services includeauditing, management advisory and information servicesn tax strategy andpreparation, accounting and bookkeeping services. We base our success on therelationships fostered, and peformance of the best quality service possible. Ourpaftners and staff are not strangers to auditing cities. The team assembled for you
has been specially chosen to fit your needs. From staff accountant to paftner, úhisgroup is trained to understand city audit requirements and carry out the desired
scope of work based on your needs.
Not only is our team of professionals trained to pedorm audits, but all members
have experience auditing cities similar to Fresno. This knowledge and backgroundwill lead to an efficient, timely, and quality audit that will keep your operationrunning smoothly. Our firm has extensive experience in audits of localgovernments, having performed 978 audits of public agencies over the past five (5)years. We are also highly experienced in the preparation of Comprehensive Rnnùai
Financial Repofts in conformance with GAAP.
Our firm had its roots in the late 1960's when founders Peter C" Brown and BurtonH. Armstrong began their public accounting careers with Big Eight international
accounting firms. Brown formed a local accounting firm in Lg74 and was joined in1985 by Armstrong to form a premier public accounting firm" Now, with 7o highly
skilled employees, Brown Armstrong continues its growth by offering auditing, i.*,
accounting, consulting, and assurance services to governmental entities, nonpîofits,
corporations, partnerships and individuals.
Our governmental audit staff is made up of forty-two (42) professionals who are
experts in their field. We have crafted expertise in auditing the public sector sincethe bifth of the company. We offer unmatched customer service, reliabilityn andquality that you can't find in other accounting firms" Through tireless planning,
relationship building, and knowledge of the realm, we are dedicated to serving oürclients and exceeding their needs and expectations. We have four (4) ofuces
located throughout the state of California. Our main office is located in Bakersfield,
California. We have additional offices in Fresno, Pasadena, and Stockton, Californiáto better serve our client's needs. All of the work performed on this engagement
will be from our Fresno and Bakersfield offices"
Bnowlv AnnlsrnoNc
Certified Fublic Accountants
Providing Auditing & Accounting
Services.for 40 years
tF
DETAILED PROPOSAL
The firm now employs 76 people as follows:
Personnel
Sha reholders ( pa rtners)
Managers
Seniors
Staff Accountants
Technicians and Other Support
Total
Total
11
15
7
23
20
76
Government*
8
8
6
20
0
42
* Indicates employees involved in providing services to local governments.
All staff assigned to this engaEement will be employed on a full-time basis.
Our firm policy is to provide staff consistency on engagements; however; having a
large public sector focus allows us to provide options for staff rotation if requesteã.
Joint Venture
We are not proposing as a joint venture or consortium"
DÍsclosures
External Quality Control Reviews
As part of our comnnitment to quality control, our firm is a member of the Centerfor Public Firms Auditors Section (Center) of the American Institute of Certi¡ed
Public Accountants (AICPA). We have completed several External Quality Controlreviews under the AICPA's guidance, all of which included one or moregovernmental audits. Exhibit I of this proposal contains a copy of our most recent
unqualified opinion.
Desk or Field Reviews and Disciplinary Actions
Our firm has been subjected to one field review during the past three years. All ofour repofts are subjected to annual desk reviews by federal and state cognizant
agencies. All of our reports for the past three years were accepted by these
agencies. We have had no disciplinary action taken against the Firm or any of its
members nor do we have any actions pending at the date of this proposal"
Disciplinary Actions
We have had no disciplinary action taken against the firm or any of its members
during the past three years nor do we have any actions pending at the date of this
proposal.
Bnowx AnusrnoNc Froviding Auditing & Accounting
Services for 40 years
4
Certified Fublic Accountants
DETAILED PROPOSAL
Staff Assìøned to Engagement
When you choose Brown Armstrong for your auditing services, you aren't just
choosing an accountant; you're choosing a resource, a friend, and an expert. Voudon't need to dread your upcoming audit, the audit team assigned to your
engagement will not only meet the deadlines you have in place, but will work with
you to keep you current on the latest regulations. Our professional auditing staff is
experienced in working with clients in all levels of the public sector, but the team
we have chosen for you have specific skills that make them the best fit for your
needs"
From our governmental audit staff of forty-two (42), we have assembled an audit
team consisting of members who are extremely qualified to perform your audit. All
team members notated as a CPA are registered or licensed to practice as a certified
public accountant in California.
Below is the proposed engagement team structure. Resumes and continuing
professional education information for these individuals can be found on thé
following pages.
Rosalva Flores, CPA
Eric H. Xin, CPA, MBA
Jian Ou-Yang, CPA
Osvaldo Gutierrez, CPA
Lindsey McGuire, CPA
Mikelle Azevedo
Lisa Rogalsky
Vivi Le
Colin Lo
Rosa Alberto
Keith Campbell
Engagement Paftner
Engagement Partner
Technical Review Paftner
Engagement Manager
Engagement Manager
Engagement Senior
Engagement Senior
Engagement Staff
Engagement Staff
Engagement Staff
Engagement Staff
Bnow¡r AnusrnoNc
Certified Public Accountants
Providing Auditing & Acc ounting
Services for 40 years
DETAILED PROPOSAL
Rosalva Flores, CPA
Rosalva Flores is a principal with over
16 years of experience in governmental
accounting" R.osalva has grown within
the firm serving a diverse client base"
Her expertise ranges frorn municipalentities and special districts to
retirement systems and nonprofit
organizations, She enjoys working
"hands-on" with her clients and will
never be too far awa)/ from ar.¡dit
procedures"
Rosalva has always ensured that we
have the highest level of audit and
consulting services for all of her clients,
She is actively lnvolved ln a riulmber of
professional organizations such as the
American Institute of Certified Fublic
Accountants, the California Society ofCertified Public Accountants, the
California Municipal Finance Officers
Association, and the State Association of
County Retirement Systems"
Education
California State University,
Bakersfield, 1998
Bachelor of Science Degree in
Business Administration,
Concentration in Accounting
Roles and Responsibilities. Overall responsibility for the
audit and delivery of client
service. Approves the overall audit risk
assessment and audit
proced u res. Communicates with executive
management, and members of
the City, regarding audit
planning, fieldwork and
reporting
' Available throughout the year
to ensure proactive issue
identification and service
delivery
Clients Serued
*Only chosen clients are listed
Cities
City of Bakersfield
Clty of Baldwin Park
City of Burlingame
City of Delano
City of Fresno
Clty of Madera
City of Tulare
City of Vlsalia
Rctlrement Systems
Contra Costa County Employees' Retirement Associat¡on
Frcsno City Employees' Retirement System
Kern CounÇ Employees' Ret¡rement Assoclation
Tulare County Employees' Ret¡rement System
Ventura County Employees' Reilrement System
Special Districts
Belridge Water Storage Distrlct
Casitas Municipal Water District
Kern Tulare Water Dlstrlct
Minter Field Airport District
Mojave Public Utility District
Rosamond Community Services Dlstrict
Bnowru AnnlsrnCINc
eefiified Fublic Aceountants
Providing Auditing & Accounting
Services far 40 yeqrs
DETAILED PROPOSAL
Eric H. X¡n, CPA, MBA
Eric Xin is a principal with over 18 yearsof experience in governmental
accounting" Eric has grown within the
firm serving a diverse client base" His
expertise ranges fron'l n'lunicipaI entities
and special districts to school distnicts
and nonprofit orEanizations" N-[e enjoys
working "hands-on" with his clients and
will never be too far away fronn audit
procedures"
Eric has always ensured that we have
the hiEhest level of audit and consulting
services for all of lris clients. [-{e is
actively involved in a nurnber of
professional orEanizations such as the
American Institute of Certified Public
Accountants, the California Society of
Certified Fublic Accountants, and the
California Municipal Finance Officers
Association,
Education
Nankai University, China,
July 1989
8.S., Business
California State University,
Bakersfield, June 1996
Masters of Business
Administration
Roles and Responsibilities. Overall responsibility for the
audit and deiivery of client
servtce. Approves the overall audit risk
assessment and audit
procedures. Communicates with executive
management, and members of
the City, regarding audit
planning, fieldwork and
reporting. Available throughout the year
to ensure proactive issue
identification and service
delivery
Clients Served
*Only chosen clients are listed
Glties
City of Fresno
City of Bakersfleld
Clty of Vlsalla
City of Tulare
City of Santa Barbara
Clty of Modesto
City of Delano
Count¡es
County of Kern
County of Santa Barbara
County of Merced
County of Fresno
CounÇ of Rlverside
County of Stanislaus
County oi Tulare
County of San Joaquin
County of Klngs
Special Districts
Westside Health Care District
Los Osos Community Services District
San Joaquin Valley Air Pollution - Control District
Bnowru AnnnsunoNc Froviding Auditing & Accounting
Sewices for 40 yearseefiified Fublie Aeaountants
DETAILED PROPOSAL
Jian Ou-Yahg, CPA
Jian Ou-Yang, a partner at Brown
Armstrong, will be the Technical R.eview
partner for this engagement. l-le has
over L2 years experience in auditinE
governmental entities and brinEs
expertise in many areas. His primary
audit focus is in cities, counties, and
special distriets"
Not only does he have experience in the
audit process, but he will be an integral
member of the team when it comes to
keeping standards up to date. He is a
reviewer for the GFOA Certificate of
Achievement Program and reviews the
Governmental Accounting Standards
Board (GASB) advisory committees'
latest pronouncements" Jian is actively
involved in a number of professional
organizations such as the American
Institute of Ceftified Public Accountants,
the California Society of Certified Public
Accountants, and the California
Municipal Finance Officers Association"
Education
Cal Poly San Luis Obispo, 2OOz
Bachelor of Science in Economics
Concentration in Accounting
Roles and Responsibilities. Responsible for assisting the
Engagement Partner in
performing the audit risk
assessment and design audit
proced u res,. Assists in audit documentation
review in significant areas.. Reviews financial statements to
ensure they are in conformance
with GAAP and GFOA
requirements.. Advises the audit team regarding
technical matters and provides
concurring approval of financial
statements and audit reports.
Clients Served
*Only chosen clients are listed
Gitics
City of Bakersfleld
City of Burlingame
City of Seaside
City of Tulare
City of Vlsalia
Gounties
County of Kern
CounÇ of San Joaguin
County of Santa Barbara
County of Santa Cruz
County of Stanlslaus
Special Di¡tricts
Kern County Water Agency
San Joaguin Area Flood Control Agency
School Di¡tricts
Visalla Unifled School District
Bnowru AnvlsrnoNc Providing Auditing & Accounting
Services for 40 yearsCIertified Fublic Aeeountants
DETAILED PROPOSAL
Osvaldo Gutierrezt CPA
Osvaldo is the engagement manager of
the project. He has more than 6 years of
governmental auditing experience. He
has been with the firm since 2AA9 and his
primary business focus is governmental
entities audit and accounting" His audit
specialties include special districts,
retirement systems, and cities"
Osvaldo will be highly involved ln the field
work and a face to face presence for
Brown Armstrong. He and the senior
aceountants will be easily accessible for
the City at all times" l-{is ability to
manage an audit has become invaluable
for Brown Armstrong, He is actively
involved in a number of professional
organizations such as the American
Institute of Ceftified Fublic Accountants
and the California Society of Ceftified
Public Accountants.
Education
California State University,
Fresno, 2008
8.S., Business and Public
Administration with a
Concentration in Accounting
Roles and Responsibilities. Reports to the Partners
regarding audit and technical
matters. Assists in the coordination of
planning, fieldwork, and
reporting matters. Reviews audit documentation
for significant audit areas. Is in constant communication
with executive management
and members of the City
regarding audit planning,
fieldwork, and reporting
Clients Serued
*Only chosen cllents are llsted
Gitics
Clty ol'Bakersfield
Clty of Baldwin Park
City of Burllngame
Clty of Delano
City of Seaslde
Clty of Tulare
Gountie¡
County of Kern
County of Kings
CounÇ of Merced
County of San Joaquin
County of Santa Barbara
County of Stanlslaus
County of Tulare
Retirement Syctems
Contra Costa CounÇ Employees Retlrement Associaflon
Fresno County Employees' Retlrement Assoclaflon
Kern County Employees' Ret¡rement Associat¡on
Marln County Employees' Retlrement Assoc¡aüon
Sta n islaus County Employees' Retlrement Associafl on
Tulare County Employees' Retirement Associafl on
Bnow¡s AnusrnoNc Providing Auditing & Accounting
Services for 40 years
IOertified Fublic Accountants
DETAILED PROPOSAT
Lindsey B. McGuire, CPA
Lindsey is the engagement manager of
the project" She has more than 8 years
of governmental auditing experience.
She has been with the firm since
August of 2OI2 and her primary
business focus is governmental entities
audit and accounting. l-ler audit
specialties include special districtso
counties, cities, and retirement
systems.
Lindsey will be highly involved in the
field work and a face to face presence
for Brown Armstrong" She and the
senior accountant will be easily
accessible for the District at all tirnes"
Her ability to manage an audit has
become invaluable for Brown
Armstrong"
Education
Azusa Pacific University, 2006
Bachelors of Science Degree in
Accounting
Roles and Responsibilities. Reports to the Partners
regarding audit and technical
matters. Assists in the coordination of
planning, fieldwork, and
reporting matters. Reviews audit documentation
for significant audit areas. Is in constant communication
with executive management
and members of the District
regarding audit planning,
fieldwork, and reporting
Clients Served
*Only chosen clients are llsted
Special Districts
CounÇ of Riverslde Air Quality Improvement Fund
County of Santa Cruz Sanitation District
Gountie¡
CounÇ of Kern
County of Merced
County of Rlverslde
County of Santa Barbara
County of Santa Cruz
County of Tulare
Citiec
City of Bakersfield
Clty of Visalla
Retirement Systema
Public Employees Retirement System of Nevada
Portfollo
San Joaquin County Employees Retlrement Assoc.
San Luis Obispo County Pension Trust
Enow¡,1 AnusrnoNç
eefiified Fublie Aecountants
Providing Auditing & Acc ownting
Services for 40 Years
10
DETAILED PROPOSAL
Mikelle Azevedo
Education
California State University,
Fresno, 20Lz
Bachelor of Science Degree in
Business Ad min istration,
Accounting
Clients Seryed
*Only chosen clients are listed
Cities
City of Modesto
City of Tulare
Clty of Visalia
City of Pasadena
City of Burlingame
Gountles
County of Fresno
County of Kings
County of Merced
County of Tulare
County of Stanislaus
County of Santa Barbara
Special Districts
Santa Clara Valley Water District
San Joaquin Valley Air Pollution Control District
Mikelle is an audit senior with over
two years of governmental auditing
experience" She has shown excellent
performance in leading fieldwork,
compiling and preparing financial
statements, performing tests and
analytical reviews, as well as
creating strong working relationships
with clients She has executed audits
in the past with little issues and is
great at rnaximizing efficiency while
performing audit work" She is actively
involved in a number of professional
organizations such as the American
Institute of Certified Public Accountants
and the California Society of Certified
Fublic Accountants"
Roles and Responsibilities. Leading fieldwork audit team. Reviews, analyzes, and
documents client internal
controls. Completes complex auoit
proccd u i'es. Researches and performs tests
and analytical reviews on issues
under direction of the
Engagement Manager. Reviews financial statements and
workpapers before sending the
drafts to Engagement Manager
and partners for further review
Bnowm Anv¡srnoNc Providing,Auditing & Acc ounting
Sewices for 40 YearsGertified Fuhlie Aceountants
1t_
DETAILED PROPOSAL
Lisa Rogalsky
Education
California State University,
Fresno, 2011
Bachelor of Science in Business
Administration - Accountancy
Clients Served
*Only chosen cllents are listed
Cities
City of Lindsay
City of Seaside
City of Tulare
Clty of Visalia
Gounties
County of Merced
CounÇ of Riverside
County of Santa Barbara
County of Tulare
Speclal and Transit Districts
Belridge Water Storage District
Los Osos Community Services Distrlct
Retirement Systems
Fresno County Employees' Retírement Association
Los Angeles City Employees'Retirement System
San Mateo County Employees'Retirement Assoc.
Tulare County Employees' Retirement Assoc.
City of Fresno Retirement Systems
Lisa will be the engagernent seniorand has over three years of
governmental auditing experience.
She has shown excellent performance
in leading fieldwork, connpiling andpreparing financial statements,
performing tests and analytical
reviews, as well as creating strong
working relationships witl'l clients, She
has executed audits in the past with
little issues and is great at nnaxirnizing
efficiency while perfonming audit
work, She is actively involved in a
number of professional organizations
such as the A¡-nerican Institute of
Certified Public Accountants and the
California Society of Centified pu¡blic
Accountants"
Roles and Responsibilities. Leading fieldwork audit team. Reviews, analyzes, and
documents client internai
controls. Completes cornplex audit
procedures. Researches and performs tests
and analytical reviews on
issues under direction of the
Engagement Manager. Reviews financial statements
and workpapers before sending
the drafts to Engagement
Manager and partners for
further review
Bnow¡q AxvrsrnoNç
Oertífied Fuhlic Aceountants
Providing Auditing & Accounting
Services for 4A years
L2
Vivi Le
Education
University of California, Santa
Barbara, 2013
Bachelor of Arts Degree in
Economics and Accounting
Clients Serued*Only chosen clients are listed
Cities
City of Modesto
City of Visalia
Counties
County of Fresno
County of Kings
County of Santa Cruz
Special Districts
Fresno Metropolitan Flood Control District
Ioint Powers AuthorlÇ
Modesto Ceres Fire Protection Agenry
Modesto Regional Fire Authority
Retirement Systems
City of Fresno Retirement System
First 5 Commissions
County of Stanislaus
County of Kings
County of Merced
Colin Lo, MA
a.
Education
University of the Pacific, 2014
Bachelor of Science in Accounting
Masters of Accounting
Cllents Served
*Only chosen clients are listed
Cities
City of Burlingame
Counties
County of San Joaquin
County of Stanislaus
First 5 Commissions
County of San Joaquin
Special Districts
Fresno Metropolitan Flood Control District
Retirement Systems
San Mateo County Employees'
Reti rement Association
Fresno County Employees' Retirement
Association
Transit Districts
Central Contra Costa Transit Authority
San Joaquin Council of Governments TDA
Bmowm AnnrsunoNç
0ertified Fu͡lie Accountarrts
Providing Auditing & Accounting
Sewices for 4A years
13
Rosa Albefto
Education
California State University,
Bakersfield,2OL4
Bachelor of Science in Business
Administration, Emphasis in
Accounting
Clients Serued
xOnly chosen clients are listed
Cities
CiÇ of Lindsay
City of Tulare
Counties
County of Fresno
County of Kern
County of San Joaquin
County of Santa Barbara
Retirement Systems
City of Fresno Retirement System
Los Angeles City Employees' Retirement
System
Special Districts
Pixley Public Utilities District
Non-Profits
Community Action Partnership of Kern
San Joaquin Community Hospital
First 5 Kern
Friends of Mercy Foundation Prop 10
Keith
Campbell
Education
California State University, Fresno,
2013
Bachelors of Art Degree in
Business - Accountancy
Clients Served
*Only chosen clients are listed
Cities
City of Baldwin Park
City of Tulare
City of Visalia
Counties
County of Fresno
CounÇ of Merced
County of Riverside
County of San Joaquin
Special Districts
Fresno Metropolitan Flood Control District
Mojave Public Util¡ty District
West Side Health Care District
Hospitals
Kern Medical Center
Riverside Medical Center
San Joaquín General Hospital
School Districts
Saugus Union School District
Taft Union High School District
Visalia Unified School District
Bmownr AnnasunoNç
eeftified Fublåa Aceour¡tants
Froviding Auditing & Accounting
Services.for 40 years
74
Continuing Professional EducationxRelevant Education Listed
Rosalva Flores, CPA
Fraud and the CPA Profession, 2015
Accounting and Auditing Update, 2015
GASB Update,2014
Implementation of New pension Standards, 2014
Accounting and Auditing Update, 2014
School District Conference, 2014
Effective and Efficient Single Audits, 2013
Internal control: Your Number one Defense Against Errors and Fraud, 2013
New AU-C 600/15A 600 Group Audit Standards, 2013
Eric H. Xin
Fraud and the CPA Profession, 2015
Accounting and Auditing Update, 2015
California Frauds, Scams and Scandals,20t4
Government Accounting and Auditing Update, 2014
Accounting and Auditing Update, 2014
PCAOB Training, 2013
The New GASB Pension Standards - An Auditor's perspective, 2013
The 2013 OMB Compliance Supplement and proposed Single Audit, 2013
Internal Control and Fraud Prevention and Detection, 2013
Osvaldo Gutierrez, CPA
Fraud and the CPA Profession, 2015
Accounting and Auditing Update, 2015
Governmental Accounting and Auditing Update, 2014
Accounting and Auditing Update, 2014
Internal Control and Fraud prevent¡on and Detection,2014
California Frauds, Scams and Scandals ,2Ot4
Audit Update, Single Audit and Ethics, 2014
GASB Update, 2014
Advanced Accounting and Auditing Training, 2014
Lindsey McGuire
Fraud and the CPA Profession, 2015
Account¡ng and Auditing Update, 2015
California Frauds, Scams and Scandals,2014
Accounting and Auditing Update, 2014
Performing Effective and Efficient Single Audits,2014
Annual Governmental GAAP Update, 2013
The New Data collection Form and Important clearinghouse system changes, 2013
The 2013 OMB Compliance Supplement and proposed Single Audit, 2013
Audit Update, Single Audit and Ethics, 2013
GASB Update, 2013
PCAOB Training, 2013
The New GASB Pension Standards - An Auditor,s perspective, 2013
Mikelle Azevedo
Fraud and the CPA Profession, 2015
Accounting and Auditing Update, 2015
California Frauds, Scams, and Scandals, ZOI4
Accounting and Audit Update/Fraud, 2014
GASB Update, 2014
Advanced Accounting and Auditing Training, 2014
BnowN AnvrsrnoNc Pr ov iding Audit ing & Ac c ountin g
Services for 40 yearsCertified Public Accountants
15
DETAILED PROPOSAL
Lisa Rogalsky
Fraud and the CPA Profession, 2015
Accounting and Auditing Update, 2015
California Frauds, Scams, and Scandals,20L4
Accounting and Auditing Update, 2014
GASB Update, 2013
Audit Update, Single Audit and Ethics, 2013
Advanced Accounting and Auditing Training, 2013
PCAOB Training, 2013
Vivi Le
Fraud and the CPA Profession, 2015
Account¡ng and Auditing Update, 2015
California Frauds, Scams, and Scandals ,2Ot4
Accounting and Audit Update/Fraud, ZOL4
GASB Update,2014
Advanced Accounting and Auditing Training, 2014
Colin Lo
Fraud and the CPA Profession, 2015
Account¡ng and Auditing Update, 2015
California Frauds, Scams, and Scandals,2Ot4
Accounting and Audit Update/Fraud, 2OL4
GASB Update, 2014
Advanced Accounting and Auditing Training, 2014
Rosa Alberto
Fraud and the CPA Profession, 2015
Accounting and Auditing Update, 2015
GAAP Update, 2014
Keith Campbell
Fraud and the CPA Profession, 2015
Accounting and Auditing Update, 2015
California Frauds, Scams, and Scandals,20L4
Accounting and Auditing Update, 2014
Staff Continuity
The engagement paftner, manager, other supervisory staff, and specialists may be
changed if those personnel leave the firm, are promoted or are assigned to anoiher
office. These personnel may also be changed for other reasonJ only with theexpress prior wr¡tten permission of the City" We understand that the City retainsthe right to approve or reject replacements. Every eftoft will be made to ensurecontinu¡ty of audit personnel and allow for a smoother audit process during the
term of the engagement.
The quality of the staff over the term of the agreement will be assured because ofour aggressive in-house governmental audit and account¡ng continuing education
classes, and our unsurpassed on-the-job training.
BnowN AnnnsrnoNc Providing Auditing & Accounting
Services for 40 years
16
Oertified Fublic Accountants
ur dáys of CFE seminars in Bakersfield(two, two-day sessions covering 32 hours of CPE) for its professional staff andclients' personnel. One of the two-day CPE seminars is in the middle of January. Itcovers accounting and auditing updates relating to for-profit businesses qfÁSa,
PCAOB' and SAS). Another two-day CPE seminar covering primarily governmentai
accounting and auditing updates (GASB, Yellowbook, Singie Audit) is typically inMay. The course material covers emerging issues, current pronouncements,
auditing standards, risk alerts, information systems, repofting issues, and othertopics of interest which concern auditing and accounting with an emphasis ongovernmental issues. Course materials are prepared by professional lecturers, ourpaftners, managers, and seniors based on their own experience, research, and
learning. Last year's attendance included Brown Armstrong professionals and nearly60 clients and their accounting staff" All staff assigned -to governmental entitiei
meets the CPE requirements in accordance with Government Ãudíting Standards.
In-house training is provided to our junior professional staff annually and covers arange of topics from taxation to lnformation systems. These sessions are usually
conducted over several days; both ln spring and late fall" Frequently our clientsrequest that members of their accounting divisions be included in our in-housetraining, and we are happy to help our client's staff achieve their continuing
professional education requirements"
Commitment to Equal Oppoftunity Employment
Our Firm believes that equal opportunity is a fundamental principle in conducting
business, and has promoted this princlple as a basic policy in the-governing of thé
Firm. Our Firm also believes that there are compelling morat, social and eðonomic
reasons for providing equal employment opportunities which go beyond compliance
with legal and contractual requirements.
Our Firm believes that all persons are entitled to equal employment opportunity and
does not discriminate against its employees or applicants based on any protected
category as defined by law, includingo but not limited to: race, color, religion, sex,pregnancy, national origin, ancestry, sexual orientation, age, marital status, gender
identity, physical or mental disability, medical condition, or any other giounds
prohibited by state or federal law. Equal employment oppoftunity will be eitendedto all persons in all aspects of the employer-employee relationship, including
recruitment, hiring, upgrading, traininE, promotion, transfer, discipline, layoff,
recall and termination"
Our policy not to discriminate in employment also includes, but is not limited to, the
following:
1. The Firm will employ those applicants who possess the necessary skills,
education, and experience for the position, without regard to race, color,
religion, sex, pregnancy, national origin, ancestry, sexual orientation, age;marital status, gender identity, physical or mental disability, or medical
condition.
BnowN AnusrnoNc
Certified Fublic Accountants
Providing Auditing & Accounting
Services for 40 years
L7
2. No employee will aid, abet, compel, coerce, or conspire to discharge or causeanother employee to resign because of race, color, religion, sex, pregnancy,
national origin, ancestry, sexual orientation, àgê, mãrital status, genOé;.
identity, physical or mental disability or medical cóndition.
3. The Firm will establish rates of pay and terms, conditions, or privileges ofemployment without regard to race, color, religion, sex, pregnancy, nãtionalorigin, ancestry, sexual orientation, age, marital status, gender' identity,physical or mental disability, or m:dical condition
4. The Firm will use, for job referral purposes, only those employment agenciesthat do not discriminate on the basis of race, color, religion, é"*, pregnancy,
national origin, ancestry, sexual orientation, âg€, mãrital status, genOél
identity, physical or mental disability, or medicar cJondition,
It is the responsibility of all Officers, managers, seniors, supervisors, andemployees to carry out to the fullest extent the purpose and intent of our Firm,spolicy regarding equal employment opportunity" All members of management areresponsible for the implementation of this program as it relates to the¡r ¡nd¡vidual
departments.
Employment decisions shall, therefore, comply with all applicable state and federal
laws prohibiting discrimination in employment.
Our firm has extensive California Governmental experience. We currenuy auditcounties, cities, and numerous other local governments. Exhibit II of this pioposalpresents a summary of our recent governmental experience. We have not haå anycontracts terminated during the past five (5) years.
Following is a list of the most significant engagements performed in the last five (5)years that are similar to your City's engagement" All clients listed below may'Uécontacted as references. All CAFRs listed in the scope of services below wereprepared in conformance with GAAP requirements. Note that an * indicates aGovernment Finance Officers Association Certificate of Achievement in Financial
Repofting winner.
City of Bakersfield*
Scope of Work;
Engagement Paftner:
Total Hours:
Contact:
1990-present
CAFR/Single Audit/GANN Limit/Prop 10/Agreed
Upon Procedures/RDA
Eric H. Xin, CPA, MBA
1,100
Nelson Smith, Finance Director
1600 Truxtun Avenue
Bakersfield, California 93301
(661) 326-3742
nsmith @ ba kersfi eldcity. us
BnowN AnusrnoNc
Certified Fublic Accountants
Providing Auditing & Accouruting
Services for 40 years
1B
City of Burlingamex
Scope of Work:
Engagement Partner:
Total Hours:
Contact:
City of Visalia*
Scope of Work:
Engagement Partner:
Total Hours:
Contact:
2011-Present
CAFR/SIn g le Aud itlTransient Occupancy Tax
AUP/GANN Limit/CAFR Drafting
Rosalva Flores, CPA
800
Carol Augustine, Finance Director
501 Primrose Road
Burlinga me, California 94010- 3997
(6s0) ss8-7222
ca ug usti ne@ bu rlin ga me. org
2004-Present
CAFR/Single AudIt/RDA/TDA/GANN Limit
Eric H. Xin, CPA, MBA
700
Jason Montgomery, Financial Analyst
7O7 W. Acequia Avenue
Visalia, CA 93291
(s59) 7r3-442s
jmontgomery@ci.visalia.ca. us
Subcontractino
!row1 Armstrong will not be using any subcontractors on this engagement as wefeel that our full involvement is necessary to build a relationship wit-h our client.
Local Preference
Brown Armstrong's Fresno office is located within a twenty-five (25) mile radius ofFresno City Hall' We have included the Certification for Local Èrefêrence Form inthe Required Proposer statements section of this proposal.
b. Independence
Our firm, its shareholders and employees are independent of the City of Fresno andits component units, as defined by generally accepted auditing standards and thÀu.s. General Accounting office's Government Auditing standards.
We are the current auditors for the following component units of the City of Fresno:City of Fresno Fire and Police Retirement System, and City of Fresno Employees
Retirement System. We do not have a conffict of interest relative to perform¡ng tfieproposed audit. In the event our firm is to enter into any professional relationãnipiduring the period of our engagement, we wíll provide the City with timely wriftännotice of this fact.
Bnowu AnvrsrnoNc
Certified Public Accountants
Provìding Auditing & Accounting
Services for 40 years
19
c. Plan for Audit
Our audits will be conducted in accordance with auditing standards generally
accepted in the United States of America, Standards for Finañcial Audits r"I fo'tfr ¡nGovernment Auditing Standards issued by the Comptroller General of the UnitedStates, the as amended in 1996 (Single nuOitjand U.S. o MB) 2CFR parr 200 (cùcutãr A_13ti(for fiscal Admínistrative neqùirements, CosiPrinciples ederal Awards (for fiscal year 2015-2016and all future years), the Audits of State and Local Government Únits (Revised -AICPA, and any other applicable federal, state and local laws or regulations.
The methods employed to formulate our auditors' opinions consist of severalfunctions. These functions and the related time requirements, as well as the tirìnöare:
Planning
We will begin the planning of the engagement upon notification of award of thecontract. We will review the City's budget, prior year financial statements,procedural manuals available online, review minutes and other plannin!procedures' From the information we gather, we will develop a preliminary ;rài"tstrategy. _ During planning, we will form an audit risk based on our review. A pre-audit conference will be scheduled during the first day of interim priorto July 2git'.-
Information Technologv within the Financial statement Audit
Brown Armstrong utilizes the risk-based audit approach that recognizes thepervasiveness of Information Technology within business processes and financialtransaction cycles. The first step is determining the level of IT sophistication,ranking entities by high, medium and low sophistication. High and Mediumsophistication requires the assistance of a subject matter expert to evaluate andtest the Information Technology and related controls. Once we have identified therelevant information systems we will test the IT General Controls surrounding thesystem to determine that the system can be relied upon. We will then test relevantapplication controls and integrate that control assessment with our manual controltesting and risk assessment process. We also may utilize various ComputerAssisted Audit Tools to improve both the efficiency and effectiveness of our
su bsta ntive procedures.
In addition to the procedures noted above, we will provide recommendations tomanagement on how to improve or streamline internal controls as they relate toyour deployed Information Technology.
Extent of EDP Software in the Enqagement
Each staff person has access to a personal computer, and has knowledge of CCHPfx Engagement software we have purchased for auditing municipalities ãnO reportwriting. We use this software in the beginning, inputting all prior year actualnumbers, and the client current year budget, including amendments. We theninput year-to-date numbers and run analytical work at the end of the auditcomparing appropriation-expenditure numbers to prior year and budget amounts"
Bnown AnusrnoNc
Certified Fublic Accountants
Providing Auditing & Accounting
Services for 40 years
20
All significant differences are investigated" Our software is capable of completerepoft writing, including combining statements and footnotes.
Identification of Computer Software
Brown Armstrong uses Wíndows Server 2008 virtual servers in a VMWareenvironment hosted on redundant Cisco UCS physical servers. We use MicrosoftExchange Server 2010 for our email, and we have a centralized data storãlãsystem running 9n a Netapp disk array. Our network backbone is compriseO ãfCisco routers and switches and we have WAN connections to our satellite oftices"Our servers are on _protected power and have redundant drive arrays to eliminateany single points of failure. All of our data is backed up using Zeftã.net, which isHIPAA' FINRA, FIRPA, ITAR, SEC 174-4 and SOX compliant. In addition, our ITsystem is reviewed (peer review) by a third-party IT consulting firm on a bi-annual
basis to ensure we are up-to-date on security and efficiency iss-ues.
All key personnel assigned to your audit have computer application skills andexperience in auditing computerized accounting systems. At least two members ofour proposed audit team are considered "power users" with skills above normal
users. In addition, Brown Armstrong contracts with an outside IT consulting firm toperform testing on audit client's EDP and computer logistics on an as-needeã basis.
In 2007, Brown Armstrong switched to paperless audits utilizing CCH pfx
Engagement software. Our staff is equipped with portable computer equipment that
enables them to work effectively from the field. Our laptops have both'hard driveencryption technology and tracking software to help us locate them in the case theyare lost or stolen, and client data is regularly cleared off the local drives after jobs
are finished. The data on each laptop in our main auditing software (CCH pfx
Engagement) is synched both with the central file room in our office and between
each laptop in the field so there are multiple copies of the data available in case alaptop fails' Also, we use ACL software in performing computer assisted auditprocedures. Several of the procedures we have performèd usinE ACL were:
- Selection of warrants for test of control procedures- Test for duplicate payments- Test for potential employee fraud- Transfer of trial balance data to our financiat statement preparation software- Test of inventory pricing
In performing such procedures, our clients were requested to provide us with theirdisbursements, payroll and other modules in either Dbase, ASCI or spreadsheetformats. ACL is able to read such files and perform various data mining functions
such as sorting, recalculating, comparing, etc.
Additionally, Brian Letlow, our IT Director, provides a wide range of computer
suppott to the Firm and its clients. Mr. Letlow is a Certified NetworliEngineer ('Cfrlf)
and Ceftified Network Administrator (CNA).
Bnowu AnusrnoNc
Gertified Public Accountants
Providing Auditing & Accounting
Services for 40 years
2L
This is the cornerstone of the engagement. Internal accounting control generally
comprises the plan of organization and procedures and recor¿s [trat are concernedwith the safeguarding of assets and reliability of financial records.
We will begin by preparing flow chafts and other memoranda to fully describe allfinancial systems. We will then review the documents to isolate the significantstrengths and weaknesses that would affect the extent of substantive auditprocedures to be employed. Each strength is then tested and the results subjectedto evaluation" These evaluations assist us in determining the amount of reliance wecan place on those significant strengths we have identified.
Test of Controls and Compliance
Based on our preliminary assessment of the internal control structure and riskfactors, we anticipate peforming internal control testing in the following areas:
Area
Receipts and revenues;
Disbursements and accounts payable;
Payroll and related liabilities; and
Capital assets additions"
Sample sizes will depend on the extent of reliance placed on the given sample andthe volume of transactions involved. Statistical and random sampling will be usedto ensure that all samples truly represent the population being tested-. We will useexcel and audit command language (ACL) software and your on-site automated
data system on an "inquiry only" basis for purposes of identifying the postings ofitems selected for testing. Findings will be discussed with management for
accuracy and the process of recommendations immediately started"
At this point we make adjustments to our auditing plan to compensate for the
significant strengths and weaknesses thus identified and substantiated.
Substantive Tests
In this pottion of the examination, we obtain sufficient competent evidential matterthrough inspection, observation, inquiries and confirmations to afford a reasonable
basis for an opinion regarding the financial statements under audit. The extent andtiming thereof is determined by the results of our study and evaluation of internal
control.
Compliance Tests
Concurrent with the substantive testing, we perform the compliance tests whichhave been designated to meet the objectives stated by the U.S. Comptroller
General of the Office of Management and Budget and the State Controller's Off¡ce"
Included in this auditing phase are all procedures relating to Federal assistedprograms. These procedures would include:
Bnowx AnusrnoNc
Oertlfied Public Accountants
P r ov iding Audit ing & Ac c o unt ing
Sewices for 40 years
22
Setting of auditing scope with cognizant agency and obtaining approval ofrepofting formats (previously noted under the "planning" discussion-).
Review and testing of internal control, practices and policies designed to provide
reasonable assurance that the City's controls relating to the tlranagement offederal financial assistance programs are functioning añd are in comph:ance withapplicable laws and regulations.
For major federal assistance programs: reviewing cash receipts to asceftainagreement with grant terms; reviewing program funding for matchingrequirements; testing a representative sample of disbursementı for complianceltracing financial data to submitted repofts.
Summarizing financial data for final reports.
Our experience with various municipal audit clients, most with federal or statemonies, has created a reservoir of knowledge of many laws and regulations.
However, by inquiry ancl observation, we will determine all major programs (over
$500,000 annually) participated in by the City. We then consulfthe actual lawì tneFederal Register, Catalogue of Federal programs, or the California State Controllersguide to State and Federal Compliance to obtain understanding of the requirementsof the law. For major programs, w€ specifically test thıse requirements btinspection of documents.
Approach for Drawing Audit Samples for Compliance Tests
Compliance test samples will be drawn usually by statistical sampling techniques.
The universe from which the sample is drawn begins at the beginning of the year
under audit, and ends with the end of that year. If a null is pickéd, it is replaced indraw sequence until sufficient live items comprise the planned sample size.
We will request the City to provide us with all disbursements and payroll data filesfor the year in spreadsheet format from which to draw our samples.
Supervision and Review
The review process is constant throughout the engagement. Each working paperprepared by a staft accountant is reviewed by the engagement managér. Allworking papers are then reviewed by the engagement paftner"
To be eftective, the reviews must be conducted as the engagement progresses andas each important step is completed. Our procedure is for ihe audit manager andpartner to review the work at the conclusion of each significant task through the
engagement as an integral quality control procedure. The financial statements andreport thereon are then reviewed by an audit partner not directly involved in the
engagement for concurrence of opinion prior to release of the report to the City.
Bnowx AnvrsrnoNc
Certified Fublic Accountants
Providing Auditing & Ac counting
Semices for 40 years
23
If conditions are discovered which lead to the belief that material errors,defalcations or other irregularities may exist, or if any other circumstances areencountered that require extended sen ices, we will prompily advise you. N;extended services will be performed unless they are authorized in the cóntractualagreement or in an amendment to the agreement"
Exit Conference with Manaoement
An impoftant process in our audit plan is to hold an exit conference withmanagement. The purpose of the exit conference is to discuss the results of theaudit, communicate to management any reportable conditions identified ¿ur¡ng ouiaudit to allow management to respond to the finding(s) and discuss the Craft rËportand timeline of the final delivery of the repofts.
des a determination as to whether ornot we have a basis to support our conclusion that the financial statements arepresented fairly, in conformity with generally accepted accounting principles applËãon a consistent basis, and that they contain adequate informativJdisclosure. ' '
As a n duct, a management letter is preparedwhich t in the course of our work wiilr resfecito acc rally accepted, deficiencies in internalcontro I if any. At appropriate times operatingpersonnel are consulted to ensure the correctness of
'our understanding. Th¿;Ëfindings are then communicated in writing to management and the goard- togetheiwith our specific recommendations for improvements in accounting pr.ãtià"i,
operating practices and internal control procedures.
As a result of the aforementioned procedures, we will express an opinion as to thefair presentation of the financial statements of the City in accordancä with genéraliyaccepted accounting principles applied on a basis consistent with the ír.i"¿ìnéyear. In addition, we will issue repofts on:
o Fair presentation of supplemental information contained in the repoft in relation
¡hole;
o Auditor's study and evaluation of the City's system of internal accounting controlsas required by generally accepted auditing standards, the Standards foi financiatand compliance audits contained in the U.S, General Accounting Office Standards
andthe provisions of the U.S. Office of Management and Budget's Circular n-fS¡,
; and
We will prepare and provide the Data Collection Form SF-SAC for submission.
Bnowx AnusrnoNc
Certified Public Accountants
Providing Auditing & Accounting
Services for 40 years
City's compliance with laws and regulations regarding federal programs, asidentifiedintheofficeofManagem.entandBudgei,s
24
DETAILED PROPOSAL
The following Audit Schedule provides a detail of the timing a¡rd time requirements
for your audit:
DETAILED ATTDIT SCMDITLE
Time
Period Audit T¡slcs StNtr Hours
May Contract Award
(t)
Hú
,JâHUoúÈ
trH
Ê)
EtiúÊ
Frz-
June/July Planning and AdmÍnistration:
o Pre-auditconference.
o Review and obtain copies of key work papers of prior
audit firm.
o Review and evaluate Cþ's accounting and financial
reporting. Prepare an overall memo of
recommendations, potential issues, and suggestions
for improvements.
o Entrance conference with Management to discuss
audit approach, timing, assistance, and issues. Discuss
SAS-99 approach.
. Prepare overall memo confirming audit procedures,
timing, and assistance.
o Prepare detailed audit work plan and audit programs,
audit budget and staffing schedule. Provide schedules
to City Management.
Internal Control Procedure and Interim Procedures.
Obtain and document our understanding ofthe following
key internal control systems through walkthroughs,
interviews of st¿fi and review of supporting documentation
- all entities:
o Budgeting,
o Revenue, billing, accounts receivable and cash
collections,
o Purchasing, expenditures, accounts payable
and cash disbursements,
o Capital assets andjournal entry procedures,
o Debt authorization, issuance and repayment,o Payroll,
o Understanding of Information Systems, ando Other significant internal control systems as
necessary.
Partner
Manager
Senior
Staff
Clerical
35
70
150
310
l0
Bnown AnvlsrnoNc Providing Auditing & Accounting
Services.for 40 yearseertified Fuhlia Aecountants
25
July lnternal Control Procedure and Interim procedures.
(t)
frlú/âfrlt)oúÈ
Fr-â
J
=liúhl
Frz-
inter-reporting
ong with any
iscuss with the
City any plans for converting allowances for doubtfi¡l
accounts into grants.o Document if any on-behalf payments a¡e made betweenCþ entities (debt, fringe benefits, other items).o Document City's long-term debt søtus (including
general obligation bonds, certificates of participãtion,
etc.).o Test Revenue Recognition at key points - cash
collections for fees, frnes, sewer and parking fees,
license and pennit fees, 3rd party collections. Test
business district tax and other non-property tax
allocations.o Test investment and bank reconciliations for the Cþ.¡ Obtain a preliminary Schedule of Expenditwes of
Federal Awards and sub-recipient disbu¡sements for
. *. latest closed month.
test for compliance with the most recent U.S. Office of
Management and Budger (OMB) 2CFRparr200
(Circular A-133) (for fiscal year2014-2015) and the
Uniform Administative Requirements, Cost
Principles, and Audit Requirements for Federal Awards
(for fiscal year 2015-2016 and all future years).¡ Perfomr participant testing for the Cþ,s Health and
Welfare Trust Plan.¡ GANN LimitationWork-Documentappropriation
limitations.¡ GANN Limitation Work- perform GANN Limit
Calculation and prepare preliminary report.o Review minutes of Council meetings and other key
committees.¡ Coordinate and assist Cþ staffin the preparation of
all appropriate confirrnation requests.o Hold progress confe¡ence with Management.¡ Obtain trial balance for interim analytical procedures.o Detailed audit plan provided to the Cþ, including all
schedules to be prepared by the City.
o Prepare year-end audit plan information list of all
schedules to be prepared by the City.
August
Bnowl AnvrsrnoNç
0ertified Fublic Accountants
Providing Auditing & Accounting
Servicesfor 40 years
26
November-
January Year End Audit Procedures:¡ Entrance conference with Management,o Follow-up on all outstanding confirmations.. Verify and validate account balances by reviewing
invoices, vouchers, resolutions, minutes and othei
documentation, as required.¡ Perform analytical review ofrevenues and
expenditures. Determine reason for all material
differences between budget and actual, test and veri$r
Cþ attestations.o Complete payroll testing from joumals to W-2 amounts
(cross fiscal year). Tie W-2,s to other available
information.¡ Perfonn a search for unrecorded liabilities by reviewing
disbwsements subsequent to June 30, testing terms of
contactual obligations, and interviewing staff.o Perform review at subsequent event discussions with
Management and review of all minutes of City Council
and other key committees.¡ Perfonn procedures for the passenger Facility Charge
@FC) program.
o Performprocedures onthe SuccessorAgencyFund.o Perform agreed upon procedures on the Cþ's Fresno
Area Express.o Complete single audit procedures.o Finalize all potential findings, management letter
comments and audit documentation.
Partner
Manager
Senior
Staff
Clerical
65
130
260
7to
20
o Hold Exit Conference with
rt)
FÉoÈ
tsìÉ
E{HÊ
J
Reporting and Final:
¡ Review City's CAFR and provide suggested changes
and improvements following the CFOA checklist.o Issue drafrreports on:o City CAFRo Internal Control Over Financial Reportingo Management Lettero Single Audito GANN Limito Required Communications under SAS-I 14 and
SAS-I15o Fær NTD Agreed Upon Conditions Report¡ Finalize all reports, findings, and recommendations.o Available to present all reports to City Committees,
Management, and all interested stakeholders and
Citizens.
Bnowu Ann¿srnoNc
Oertified Fublic Aceountants
Providing Auditing & Accounting
Sewices for 40 years
27
DETAILED PROPOSAL
d. Discussion of Relevant Accounting Issues
We take Ereat pride in being our clients' main source and consultants for all things
GASB and GAAP. We are open to consultations throughout the year, and not juit
during the audit period" We provide comprehensive training and CPE opportunities
for ourselves and our clients to gain an understanding and get a jump staft on
implementation of new GASB standards, federal and state regulations, along with
upcoming audit requirements. We also create task force trainings on-site for our
clients in assistance and preparation of upcoming substantial changes, including
recently and on-going a task force training on GASB 67/68" As your auditors', wé
honor our commitment to building a lasting relationship, and in acting, responding
and exceeding your expectations year-round.
e. Assistance Requested from City Staff
Below are examples of our standard "'prepared by client" lists that are provided to
clients during both the interim and final fieldwork phases"
INFORMATION
Pfov¡de in electronic to'7'/,at (if possible) a copy ol lhe fottowing:1 Organizational Chart 07120t152 chart of accounts for 2014l153 GFOA comments from the 2013/14 CAFR, if available at the time of ¡nterim4 Listing of any subaccounts, cost accounting codes, job codes, cost centers, etc. - if ditferent
from prior year
5 Prov¡de all signmcant agreements, contracts, and any amendments entered into during
fiscal vear that have audit significance including:a Debt agreements (including loans, notes and lêases)b Grant agreementsc Employment contracls for management posit¡ons effective during the fiscal year.d Agreements with outside entitites for services such as accounting and support, ¡f any.
e Agreements with banks such as letters of credit, etc, if any.f Joint powers agreeementsg Pension agreements induding OPEB Plans, ifanyh Other agreements or contracts that you're aware of that have a vis¡ble ¡mpact on the
f¡nancial statements.
ô List of each new location (for e.g. component units, enterprise activities, separate
operations) maintained by lhe City, the nature of the activity performed at each, and the
approximate number of employees at each.
7
ldent¡fication of any new locations, departments, or funds with decentralized cash receipts or
disbursements that ultimately are posted to the general ledger. lf none, please so stateI
Brief description of any new unusual compensation anagements. If none, please so state.I Briêf descript¡on of any new vacat¡on and sick pay policies lf stated in writing, provide a
copy.
10 Employee Manual, if different from prior year1'l Accounting policies and procedures manual for investments and treasury function,
budgeting, pruchasing and expenditures, revenue, billing, accounts receiveble, and
collections, capital assets, debt management, payroll, self-insurance.12 Copy of procedures, or documentat¡on of procedures regarding ident¡fying and properly
accounting for related party transactions.13 Mostrecentactuarial studyfortheCity'sSelf lnsurance, if anynewstudiespeformêdsince
the last study.
14 Most recent acluarial valuation for the City's OPEB Plan, if applicable.15 Most recent reports on the City's Landf¡ll. Please also provide any regulatory compliance
Bnowu AnivlsrnoNc Providing Auditing & Acc ounting
Services for 40 YearsCertified Fublic Accountants
28
DETAILED PROPOSAL
19
1ô
17
'18
07106/ls
07lo6t't5
s
h
I
J
K
L
M
Breakdown of legal expense forthe year deta¡ling total amount incunêd, services rendered,
name of firm, name of attomey, and firm address. List must reconcile to the legal expenses
per the fÌnel income statement.
Desqibe the relationship with and serv¡ces provided by any service organizat¡ons used by
the C¡ty for any new relationships entered ¡nto during the f¡scal year 20lO.
e members have chenged s¡nce July 1,2014 please provide: (1)
names and l¡iles, meetings held on an annual basis; and (2)
h meetings for our rev¡ew. lf such a comm¡ttee does not exÌst,
lf manegement is aware of whetherthere are particulartypes of transactions, accounl
balances, fnencial statement cetegories, or component unit, joint venture, or related
organ¡zat¡on transactions where fÍaud risk factors may exist (or be more likêly to exist), or if
management is eware of fraud that has occured, please document these in a memo. lf
none, please so slate.
Provide listing of joumal entries for2014/1S
List of C¡ty employees by department w¡th their e-mail addresses or phone numbers so we
can select a few to conduct fraud interv¡ews.
we will be conducting intèrviews to obtain an update on our understanding of the controls
over key accounting arees. Please prov¡de the name(s) of the individuals we should be
interv¡ewing for the follow¡ng key areas. we will need their aveilab¡lity the weekof 7t2ot2oi5
to schedule appointments.
lnvestments and lhe treasury function
Budgeting
Purchasing end expenditures
Revenue, billing, accounts receivable and collections
Capital assets
Debt management
Payrolll
Self lnsurance
Joumal entries and the clos¡ng process
IT
Health and Welfare and partic¡pant data
FAX oontrols over NTD compliance
PFC general controls
OF CONTROLS-If possible, please prov¡de data in excet from Juty i, 2014 to June 30, 2015.
Payroll check numbers: Beginning and ending number
Cash receipts joumal
Cesh disbursement joumal
L¡sting of cap¡tel assets additons and deletions
lf Ci9 credit card or purchase cards are allowed, please provide a list of employee
cardholders.
AUDIT
Please provide the preliminary schedule offederal expenditures Once we have made the
determination of the programs to test, we will provide en ¡nformation request list on those
progrems.
General ledger listing of expenditures '¡rom7l1l2O14 lo June 30, 2015.
ANDWELFARE
List of members entered ¡nto the Plan lrcm7l1t2014lo June 30, 2015. From this list we wlll
select a sample.
Payroll reg¡sterfor the last pay period ¡n June 2015. From this list we will selecl a Eample.
List of particlpants who terminated from the period July l, 201 4 to June 30, 2Ol 5. From this
list we wlll selecl a sample.
Copies of bylaws and or plan document
IRS determination Letter
Board minutes for comm¡ttees from 7/l/2014 to June 30, 2015.
lnvestment polioies and other relevent policies to the Trust
Access lo professional consultant agreements including trustees, investment advisors, etc.
20
a
b
c
d
e
I
28
29
30
31
32
æ
34
35
27
21
22
23
24
25
RMATIONS - (refer to prior year confrms, templates are attached)
Cash in bank and ¡nvestments held w¡th th¡rd perties
Property tax revenues
Sales tex, franchise tax, and s¡milar revenues
Utility purchases forthe year
Long-term debt (Bond/COP, note payable, loans, capital lease and grant loans)
Related party transactions
Grant entltlements and drawdowns, ¡f applicable.
Grent or contract payments and rece¡vables
Note and loans receivable
Legal representation conf¡rmalion to all in-house and extemal counsel. please prepare one
for each lew firm where legal counsel was sought during the 20l21g fiscal year.
óo
37
38
39
40
41
42
43
M
45
Bnow¡t AnusrnoNc Providing Auditing & Accounting
Services for 40 yearsOertified Fublic Accountants
29
of F¡e¡no
PEP¡rtd ty cllrú scù:tuf pBC)
In'c ilr, ãns
Date year+nd work ls ùo commence ll/g/nls
tldpaE needùB to coûq'letÊ your rudtt
b the ahE ardl¡ble column ar b whm
cwpleb the audtt ln ! dnely frshion, Th6e
serec'aurprec ana røn*u to you o gtve your äffii"
M,eh¿t¿c*croí,,'tålåff ffiffi ",ffi
* r¡--;*.,. Dtie Recelved dty Shtr
AL BALANCE & Fund Statements
1 Adjusted Trial balance by fund to trace to the Fund Statements
Major Fund statements a¡d Non-Major individual fund statemenb as presented in the
Financial statements- If these car be provided a few days in advance of firal fieldwork we
can provide you with our variance analysis to give you time to develop responses.
Budget to actual comparison for all major funds and an aggregate of all the non-major funds
with a budget.
fll\e/ß
_r110elß
ll/0e11þ_
11./jell:_
_lU0e11þ_
11./0211.5_
l]10e11!_
_l1Lee/15
17/02/1.s
11/0efis
11./0e/1.s_
11./0e/15wTF-
A.SI{ AND INVESTMENTS
4 Bank accou¡ts and reconcfüation for all accounts with balances for June 2015 and July 2015
13
1,4
"Reconciliation of Month-end Cash Balance per General Ledger & Barù<" for June 2015
Listing of all depositories, including banks from which certificates of deposit and rreasury
Bills were purchased" with which the city has tansacted during the period under audit.
If the city internally pools its cash accounts, provide documentation to show how the
allocation was performed and that the allocation of internal cash balances and interest
income, if any, is reasonable.
If depository accourts were opened and closed during the period provide the minutes
showing authorization to open or close the account. If there are no minutes, document the
plocess in m'iting and provide supporting documentation for how accounts are opened or
closed.
Provide a listing that identifies the individuat funds that are required by law or contr.actual
agreement to maintain separate bank accomts and ascertain that separate accomts ar.e
maintajned. Provide documentation to support the purpose of the resh.iction
Schedr;Ie of collateral pledged to s (b) name
offina¡rcial institution holding the t of
co1'1afercl at 12 / 31,, 3 / 31, and 6 / 30
eiP business daysthe deposits andled howthey
P¡ovide calculation of uni¡sured funds at yealend and uninsured and uncollateral¿ed furds
at year-end.
Provide documentation to support all balances and ratings included in the cash footnote.
Listing of outstanding checks and access to bank statements to review cancellation dates on
selected outstanding checks.
ESTMENTS
15 Summary or leadsheet for all invesknent accounts.
5
6
7
10
1.2
L6
77
18
79
20
21
22
INVENTOITY AND OTHER, ASSETS
23 Inventory listiag as ofJune 30, 2015
24 List of assets
Iiterest income and GASB 31 allocation schedu.Ie
If the city internally pools its investment accounts, provide documentation to show how the
allocation was performed and tltat the allocation of internal invesünent balances, invesknent
income and gains/losses, if any, is reasonable.
To verify ary impairment of investrnents, please provide the most current statements.
Document review of compìiance with investnent porúolio requirements as noted in tlLe
invesknent policy. Provide support for balarces, ratings, etc used in compliance review,
GASB 31 letter including attached rrarket value appreciation adjustnent schedule.
If the Cþ has securities carried at cost provide documentation to support the City's review
for other than temporary impairment and if it exists, pr.ovide AJE showing how it was
recorded.
Provide supporting documentation for al1 amounts, rating, etc included in the investrnent
fooüìote
Please include description and dollar amount
ffi mowrq ¡.{mß,[s T'm cNG
eertified Fuhlic A,,ccountants
Providing Auditing & Accounting
Services for 4A years
30
25
26
27
28
ABLES
ER LIABILITIES
41
dispositions and adiusünents.
P¡ovide detailed listing of additions that agrees to rollforward. sample may be selected fo¡
additional testing.
Provide detail of all repair and maintenance accounts that agrees to general ledger and
provides detail of individual invoices.
If City took a physical inventory of assets, please a provide a detail of reports issues and
adiusbîents recorded as a result including:
Items determined to be obsolete o¡ dmaged, no longer operable.
Provide detailed listing of dispositions that agrees to ¡ollforward. sa:nple may be selected. for
additional testing.
Provide depreciaiion report showing individual assets, prior year and cu¡Ìent yeat
accunulated depreciatiorç nethod of depreciation, estinated useful lives, current year
depreciation expense and NBV. Highlight any useful lives or methods that changed from the
pnor yea¡.
Provide detail of analysis of potential impairment under GASB 42.
Please provide supporting documentation of any intangible assets under GASB 51, if
applicable.
Sdredule of conskuction in progress by proiect and the status of each proiect.
Provide access to agreements and documentation used to deterorine if leases are capital or
operating leases by providing an example of the most recent lease ente¡ed into and. the
analysis performed to determine its prope¡ accounting.
P¡ovide documentation to suppo¡t capital a,ssets footnote.
P¡ovide documentation to support leases fooürote
ITAND DEBT SERVICE EXPENDITURES
53 P¡ovide ¡ollforward of debt from prior year that agrees to govemment wide finmcials.
Accounts ¡eceivable reconciliation in excel format
Aging schedules for accounts receivables.
P¡ovide documentation to support information provided in any receivable fooûrote.
Water rates effeclive lor 2014/IS
DITI,JRES & ACCOUNTS PAYABLE
Accnred A/P listing as o1 6 / 30 / Is
Provide check registers for all checks written subsequent to year-end. for all accounts, from
JuIy 2015 to August 2015.
to dose year, provide suppo¡tíng docmentation to
ceived but not input into the payables system, note
If appìlcable.
29
30
7U09/\s
77/02/7s
71,/09/7s
77/09/Is
11./09/7s
71./0e/7s
77/09/75
L7/09/15
77/09/L5
77/0e/75
77/0e/Is
L1,/09/75
L7/09/15
17/oe/75
31
36
32 Detail of deposits payable andretentionpayable
YROLL AND RELATED PAYABLES
33 Provide supportingdocumentationfrompayrollsystemforpayroll accrual andpayroll taxes
accrued.
Payroll calendar for 20L4/15
to
Provide supporting documentation for any opEB accruals. Documentation should include
actuarial report.
P¡ovide documentation of allocation of OpEB expenses to individual funds.
P¡ovide documentation regarding city's tenrrination benefits agreement, if any. If none,
please state so,71,/0e/7s
Provide the totalnumber of employees at the beginning of the year and at the end of the year , rr/0g/1s
ASSETS
Provide ¡ollforward of capital assets that agreed to prior year and current year flnancials for
both proprietary and govemmental funds. Rollforwa¡d should include total additioru,
34
35
38
4
4t5
47
48
49
50
51
6t
54
55
56
57
39
40
42
43
46
Rollforwa¡d must include prior year and cunent year balances, proceeds, payments,
adiusünents.
Provide documentation to support all portions of the debt footrote.
For any new debt obtained during the year, provide the official statement and amortization
schedules and copies of the joumal enhies showing how it it was reco¡ded,
Provide minutes showing authorization for obtaining new debt.
sdredule used to compute interest payables and amortization of defened costs, premiums,
and refunding eains/Iosses, if 77/0e/ls
Bnowu AnusrnoNc
Certified Public Accountants
Providing Auditing & Accounting
Sewices for 40 years
31
DETAILED PROPOSAL
rIY/
58 Provide ¡econciliation of fund balance from prior year financials to leadsheet or general
ledger for all funds.
59 Provide explanations for allfunds with a defict find balmce.
60 Provide support for all equity related fookþtes including support for restricted fu¡d bal¡nce,
committed" etc.
F INSURANCE
6l Provide schedrfe of insu¡ance limits, terms, and arrangements.62 Provide documentation and calcr¡lation to support the estimate for reserve fo¡ claim losses
including a list of individual daims.
Provide support for all self insurance and risk footnotes.
P¡ovide schedules and supporting documentation to all self insumce progralns,
BALANCES AND TRANSACTIONS
schedule for due to/due from, adances to/advances fronç transfers in/trânsfers out. please
indicate the purpose of transacHoru.
LTTI AND WELFARE TRUST
66 Detailedquârterlyinvestmentreports
67 Scheduleofinvesbnentmanagementfeesfor20ls
68 SSAE 16 teports for all service providers including custodian andinvesbrents managers
Management fees accrual
Pending Eades receivables and payables as of 6 þ0 /1.5
NTD reporting statistic form
NTD passsenger statistics report for the fiscal year end June 3e 2015.
AIJDIT
Final schedule of federal expenditures by grant number showing all expend.ifures incurred
between July 1, 201.4 to Jme 3Q 2015.
* Please keep in nind that additional infomation might be needed as we
conduct our audit procedures.
63
64
69
70
77/09/rs
77/0e/\s
71./0e/L5
1U0e/15
71./0e/Is
77/0e/ls
77/0e/75
7L
72
73
77/0e/ls
f. Identification of Anticipated Potential Audit problems
We currently do not antic¡pate any aud¡t problems. In the event problems areidentified, we will resolve the problem as follows:
. D¡scussion with aud¡t team.o consultation and discussion with appropr¡ate city personnel". Consultation and discussion with liaison(s).o Resolution with appropr¡ate City personnel.
g. Additional Information
None.
Bnown AnusrnoNc
Certified Public Accountants
Providing Auditing & Accounting
Servicesfor 40 Years
32
BRoWN AnmSTRoNG
l5
I. Ceftification for Local preferenceII. Statement of Proposer Guarantees and WarrantiesIII. Auditing Services Agreementry. Non-Collusion AffidavitV. References
Bnow¡r AnnnsrnoNc
Certified Public Aecountants
Providing Auditing & Accounting
Services for 40 yeqrs
33
CITY OF FRESNO
PROFESSIONAL AUDIT SERVICES RFP
RFP No.9317
CERTIFICATION FOR LOGAL PREFERENCE
[X] We certify that we qualify as a local flrm pursuant to Fresno Municipal Code Section 3-10g.1 .I I We certify that we _qualify as a non-local firm which has formed an association for pecuniary profit
with the local firm listed below for the project being proposed wherein the benefit to tne nðai nimis an amount greaterthan 15% of the total contract price forthe project (as provided ¡n rresno
Municipal Code Section 3-1 09.1).
Location of Proposer,s Business:
(Please provide street address, no pO Box)
Address: 7673 North lnoram, Suite 101
Fresno. CA 93711
Phone: (559) 476-3592
Name and Location of Associated Local Firm's Business:
Name:
(Please provide street address, no pO Box)
Address:
Phoñe:
Primary Office [ ]
Branch Office tXI(Please mark as applicable)
Primary Office [ ]
Branch Office t I(Please mark as applicable)
The undersigned Proposer hereby certifies under penalty of perjury under the laws of the State ofCalifornia that the information contained on this CERTIFICATION Fbti LOCAL PREFERENCE is correctand complete.
The above Statement-is _part o.f the proposal. Signing the proposal shall also constitutesignatur_e of this_ Gertificatlion" Propos"ers-are cautio'ned-that niâfihg-ã fa¡se cJrt¡f¡cãiíö;-äösubject the certifier to criminal prosècution.
BnowN AnnnsrnoNc P r oviding Auditin g & Ac c o untin g
Services for 40 yearsCertified Fublic Accountants
34
REQUIRED PROPOSE R STATEM ENTS
1
CITY OF FRESNO
PROFESSIONAL AUDIT SERVICES RFP
RFP No.9317
STATEMENT OF PROPOSER GUARANTEES AND I'VARRANTIES
Proposer certifies that it can and will provide and make available, as a minimum, all services set
forth in "Section lll" of the RFP, Nature of Services Required.
Proposer warrants that it is willing and able to comply with State of California laws with respect to
foreign (non State of California) corporations.
Proposer warrants that all information provided by it in connection with this proposal is true and
accurate.
signature or or¡.¡ál'lRguLr.- K
Name (typed): Rosalva Flores
Title: Principal
Firm : Brown Armstronq Accou ntancy Corporation
Date: March 2,2015
Bnown AnusrnoNc
Certified Fublic Accountants
Providing Auditing & Acc ounting
Services for 40 years
35
REQUIRED PROPOSER STATEMENTS
(Submit with proposat)
Proposer's Name Brown Armstrono Accountancy Corporation
CITY OF FRESNO
PROFESSIONAL AUDIT SERVICES RFP
RFP No: 9317
AUDITING SERVICES AGREEMENT
Tlfe_ lfqpgqgl shall sign below that the Proposer theAGREEMENT Documents set forth in this RFP. lf t tfreAGREEMENT Documents, such provision(s) shall thatthe Proposer accepts all remaining provisions of th
Note: Any exceptions may render the proposal non-responsive.
[xl AccEPT
t IDONOTACGEPT
lf 'DO NOT ACCEPT" is checked, please list exceptions:
r-R€(hfuh,#=
Signature of Authorized Person
Rosalva Flores
Type or Print Name of Authorized Person
Bnowu AnusrnoNc Providing Auditing & Accounting
Servicesfor 40 Years
36
Certified Public Accountants
REQUIRED PROPOSER STATEMENTS
(Submit with proposat)
Proposer's Name Brown Armstronq Accountancv Corooration
STATEMENT OF ACCEPTANCE OF THE AGREEMENT REQU¡REMENTS
PROFESSIONAL AUDIT SERVIGES
RFP No: 93{7
NON.COLLUSION AFFIDAVIT
L,¡".JS1
or persons as have a partnership or other
The- undersig.ned .Proposer hereby declares under penalty of perjury under the laws of the State ofCalifornia that the information contained on this affidavit is trüe arid cbriect.
The above Non-Collusjgn Nffllayit is _part of the proposal. Signing the proposat shall atsoconstitute signing this Non€ollusion Aff¡dav¡t.
fropo.sers. are cautioned. that making a false representation with respect to non-collusion may subjectthem to criminal prosecution.
BnowN AnusrnoNc
Certified Public Accountants
Providing Auditing & Accounting
Sewices for 40 years
37
REQUTRED PROPOSER STATEMENTS
(Submit with proposat)
Propose/s Name Brown Armstrong Accountancv Corooration
CITY OF FRESNO
PROFESSIONAL AUDIT SERVICES RFP
RFP No: 9317
REFERENCES
Please list at least three references of to whom you currently offer similar types of services, including
governmental agencies, if available.
1. AGENCY/COMPANY NAME: Citv of Bakersfietd
ADDRESS: 1600 Truxtun Avenue. Bakersfield. CA 93301
CONTACT PERSON: Nelson Smith PHONE NUMBER: (661) 326-3740
LENGTH OFAGREEMENT: 25 YEARS
TYPES OF SERVICES PROVIDED: CAFR/Singte Audit/GANN
AGENCY/COMPANY NAME: Citv of Burlingame
ADDRESS: 501 Primrose Road, Burtinoame. C494010-3997
CONTACT PERSON: CarolAugustine PHONE NUMBER: ßSOl SSA-7222
LENGTH OFAGREEMENT: 4 YEARS
TYPES OF SERVICES PROVIDED: GAFR/Sinqte AudiVAUp/c
AGENCY/COMPANY NAME: Citv of Visatia
ADDRESS: 707 W. Acequia Avenue. Visatia, CA 93291
CONTACT PERSON: Jason Montoomery PHONE NUMBER: ($59\7194425
LENGTH OFAGREEMENT: 11 YEARS
TYPES oF SERVIcES PRovIDED: GAFR/sinqte Aud|VRDA/TDA/GANN Limit
2
Bnowu AniusrnoNc
Certified Fublic Accountants
Providing Auditing & Accounting
Services for 40 years
38
AUTHORIZED SIGNATURE
SIGNATURE PAGE
RFP No: 9317
By my signature on this proposal I certify, under penalty of perjury, that the statements contained in thisproposalare true and correct.
for each line, as explained below.)
(8881 565-1040 ß61t 3244997Phır'e
-
C=orpqration lCgl ifornia)(Gorp) (lndividual)
4200 Truxtun Avenue. Suite 300*
(1)
(2)
(3)
(4) By:
Signature of Authorized Person
FederalTax l.D. No.: 95-3109182 Date: March 2,2015
* Address reflects main office location.
Bnowu AnusrnoNc Pr ov i ding Audit ing & Ac c ount ing
Services for 40 yearsCertified Fublic Accountants
39
AUTHORIZED SIGNATURE
INSTRUCTIONS FOR SIGNATURE PAGE
CORPORATIONS: INGLUDE ACKNOWLEDGMENT OF SIGNATURE BY NoTARY ¡N
GORPORATE FORM (See Line 4(a), of next page.)
INDIVIDUALS, PARTNERSHTPS OR JOTNT VENTURES: TNGLUDE
ACKNOWLEDGMENT OF S¡GNATURE BY NOTARY.
LINE 2: ldentify here the character of the name shown under (1), i.e., corporation (including state of
incorporation), individual, partnership, or joint venture.
LINE 3: Enter the address to which all communications and notices regarding the proposal and anyagreement awarded thereunder are to b: addressed.
3å,åi"åi:?'isi1*ïf,li¿',t;o'f i:'nlåfäiJli:
lOl . hg/sle mqst sign the proposal, or if the proposat is signedby I half of the Propıse¡, a'coþy of â power oi attorney müði uèon fi rior to the timd set for the'ópenini¡ of the proposaís oi mustbe s Any signature must be ackn'owled'ged by á ncitary.
(c) lf the Proposer is a partn.ers!ip, lhe proposal must be signed by all general partners; orby a general partne(s) authorized to'siln proposals anî coniracti on beïrãti óaih;partnershþ. evidenced_þy.inclusion -of eithèr a copy of the Partnership ngreement oi ãrecorded Statement of Partnership. All signature(s) iriust be acknowledgeiO Of a notary.
-
(d) lf the Proposer is a joint venture, t
by a joint venturer(s) authorized to s
venture evidenced by inclusion of
recorded Statement of Joint Ventu
partnership signing on behalf of the Joi
respectively. All signature(s) must be a
Where Propo-ser is a partnership or a corporation, the names of all other general partners, orthe names of the president and secretary of the corporation, and their business aOàréiðãs
must be typewritten below:
NAME
Steven R. Starbuck
ADDRESS
4200 Truxtun Ave., Ste. 300, Bakersfield, CA 93309
Andrew J. Paulden 4?99Iruxtun Ave., Ste. 300, Bakersfietd, CA 93309
Chris M. Thornburqh
Eric H. Xin 4200 Truxtun Ave., Ste. 300, Bakersfield, CA 93309
4200 Truxtun Ave., Ste.ffiDiana H. Branthoover
Rosalva Flores 4200 TruxtunAve., Ste. 300, Bakersfield, CA g330g
Connie M. Perez 260 S. Los Robles, Ste. 310, Pasadena, CA 91101
Thomas M. Younq 4200 TruxtuD Ave., Ste. 300, Bakersfield, CA 93309
Ryan L. Nielsen 4200 Truxtun Ave., Ste. 300, Bakersfield, CA g3309
!a50 Claremont nu"., St". @
tg_
Jian Ou-Yang
Diane L. White
NOTE: Alladdresses must be complete with street number, City, State and Zip Code.
Bnowx AnvrsrnoNc
Certified Public Accountants
Providing Auditing & Accounting
Services for 40 years
40
AUTHORIZED SIGNATURE
CERTIFICATION
RFP No:9317
l, Chris M. Thornburgh , certify that I am the secretary of the corporation named herein;
Name
that Rosqlya Flores who signed this proposal on behalf of the corporation, was then
Name
Principal of said corporation; that said proposal is within the scope of its
Title
corporate powers and was duly signed for and on behalf of said corporation by authority of its
governing body, as evidenced by the attached minutes , certified
Name of Corporate Document
to be a true and correct copy; and that such attached document has not been modified
or repealed and is now in fullforce and effect.
By:
Name:
Title:
Date: March 2.2015
Bnowu AnnnsrnoNc Pr oviding Auditing & Accounting
Services for 40 years
4L
eertified Fublic Accountants
BRoWTN AnmSTRoNG
Ir+
Dollar Cost Proposal
Brown Armstrong's sealed dollar cost bid is provided in separate documents but isincorporated herein by this reference.
Bnow¡t AnvrsrnoNc
Certified Public Accountants
Pr oviding Audit in g & A c c ount ing
Servicesfor 4A years
42
EXHIBITS
Bnoww AnnnsrnoNc
Certified Fublic Accountants
Providing Auditing & Accounting
Services for 40 years
43
EXHIBITS
Exh¡b¡t I
External Quality Control Review Report
weave
System Review Report
To the Shareholders of
Brown Armstrong Accountancy Corporation
end the National Peer Review Committee of the AICpA
We have reviewed the system -of quality control for the accounting and auditing practice ofBrown Armstrong Accountancy Corporatio
the year ended October 31, 2012. Our
Standards for Performing and Reporting
Board of the American lnstitute of Certifie
considered reviews by regulatory entilies, if applícabk
our procedures. The firm is responsible for designing
wÍth it to provide the firm with reasonable ass ¡rance
with applicable professional standards in all malerial
an opjnion on the design of the system of quality co
based upon our reviow. The nature, objectives, scope, limitatfons of, and the proceduresperformed in a System Review are describecl in the standaros at www.aicpa.ors/orsummài;.
" --
As -required by the slandards, engagements selected for review included engâgementsperforrned under Goverrtment Auditing Súandarcfs ánd audits of employee benefit pnñJ." - - '"-
ln our opinion, the system of quality control for the accountlng and auditing prac¡ce of BrownArmstrong Accountancy Corporation applicable to non
October 31 , 2012, has been suitably designed and
reasonable aesurance of performing and reporting in
standards in all material respects. Flrms ean receive a
or fafl. Brown Armstrong Accountancy Corporation has
4ú
L.P.
Dallas, Texas
February 8, 2013
Á¡ì rf,{uËPFflDil{t
utivS¡r'Ì 0r nÄItft titlr
È¡¡ ¡ tfiliÉll0lìÁr
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r. fl/2j illfr !!ltr I i97t1 ?07 83?t
Bnown AnnnsrnoNc Providing Auditing & Accounting
Semices for 40 yearseertified Fublic Accountants
44
EXHIBITS
Exh¡b¡t II
sumnnary of Recent Gonernmental Experience
City of Bakersfield
City of Baldwin Park
City of Burlingame
Gity of Delano
City of Lindsay
Gity of Modesto
City of Pasadena
City of Santa Barbara
City of Seaside
City of Tulare
City of Visalia
Contra Costa County Employees'
Fresno City Employees' Retirement System
Fresno County Employees' Retirement Association
lmperial Gounty Employees' Retirement System
Kem County Employees' Retirement Association
Los Angeles Fire and Police Pension System
Los Angeles City Employees' Retirement System
Los Angeles Gounty Employees' Retirement Association
Marin County Employees' Retirement Association
Merced County Employees' Retirement Association
Orange County Employees' Retirement System
San Diego City Employees' Retirement System
San Diego County Employees' Retirement Association
San Joaquin County Employees' Retirement Association
San Mateo County Employees' Retirement Association
Sonoma County Employees' Retirement Association
Tulare County Employees' Retirement Association
Ventura County Employees' Retirement Association
San Francisco Bay Area Rapid Transit District Money
Purchase Plan and Deferred Compensation Plan
San Luis Obispo County Employees' Pension Trust
Pasadena Fire & Police Retirement System
Santa Barbara County Employees' Retirement System
Fresno Metropolitan Flood Control District Pension Plan
and Trust
Bear Mountain Recreation &
District
Delano Mosquito Abatement District
Fresno lrrigation District
Fresno Metropolitan Flood Control
District
Kern Tulare Water District
Kern Water Bank Authority
Kings County Ec¡nomic Development
Corporation
Mojave Public Utility Dishict
Mother Lode Job Training Agency
Riverside County Habitat
Conservation Agency
Pasadena Center Operating
Company
Pixley Public Utility District
Port Hueneme Water Agency
Rosamond Community Services
District
Rose Bowl Operating Company
San Joaquin Area Flood Control
Agency
San Joaquin Valley Air Pollution
ControlDistrict
Stanislaus County Community
Central Contra Costa Transit Authority
Golden Empire Transit District
Kem Council of Governments
Napa Gounty Transportation and
Planning Agency
Riverside Transit Agency
San Joaquin Council of Governments
Santa Cruz Metropolitan Transit District
Solano County Transit
Stanislaus Council of Governments
Tulare County Association of
Bakersfield City School District
Castaic Union School District
Delano Union School District
Kern County Superintendent of Schools
Richgrove Elementary School District
Saugus Union School District
Taft Union High School District
Tehachapi Unified School District
Visalia Unified School District
County of Fresno
County of Kem
County of Kings
Gounty of Merced
County of Riverside
County of San Joaquin
County of San Luis Obispo
County of Santa Barbara
County of Santa Cruz
County of Stanislaus
County of Tulare
Bakersfield ARC
Community Action Partnership of Kern
Community Action Partnership of San Luis Obispo
Goodwill lndustries of South Central California
Kern County Bar Association
Kem County Library Foundation
Missionary Church Westem District
Pasadena Chamber of Commerce
Pasadena CommuniÇ Access Gorporation Tranquil Waters
Guidance Center
Valley Consortium for Medical Education
Kern MedicalCenter
Liberff Health Advantage
Heritage Provider Network
Heritage Califomia Medical Group
Heritage NewYork Medical Group
Southwest Health Care District
West Side Health Care District
Riverside County Regional Medical Center
San Joaquin County General Hospital
Stanislaus Gounty Health Services Agency
Bnowu AnusrnoNc Providing Auditing & Accounting
Services for 40 yearsCertified Publie Accountants
45
CALIFORN¡A JURAT WITH AFFIANT STATETIET{T GOVERNMENT CODE S 8202
See Attached Document (Notary to cross out lines 1-6 below)
See Statement Below (Lines 14 to be completed only by document signer[s], nof Notary)
Signature of Document Signer No. l Signature of Document Signer No. 2 (if any)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of Galifornia Subscribed and sworn to (or affirmed) before me
County at ,!\g e*l
on this "ÂîlA
day of
by Date
,20_ls- ,
Year
s.
Comni¡¡lon o 20ilnîl
llotrry h¡tllc - cdilornlr
Ílm Couüt
() Ka s,t Lu rt FLur¿:>
(and (21 l--^ t:-- u,--
Name(s) of Signe(s)
proved to mgqthe basis of satisfactory evidenceto be tne(fersolr(s) who appeared before me.
Signature
of Notary Public
Sea/
Place Notary SealAbove
OPTIONAL
Though f/¡is section is optional, completing this information can deter alteration of the document or
fraudulent reattachment of this form to an unintended document.
Description of Attached Document C// ,/; F|¿¡*o
Number of Pages: Signer(s) Other Than Named Above:¿t-
@2014 National Notary Association . www.NationalNotary.org . 1-800-US NOTARY (1-800-876-6827) ltem #S910
UNAIIIMOUS \ilRITTEN CONSENT OF
BOARD OX'DIRECTORS OF
BROWN ARMSTRONG ACCOUNTAIICY CORPORATION
A CALIB'ORNIA CORPORATION
The Directors of Brown Armstrong Accountancy Corporation, a Califomia Corporation, do
hereby indicate their written consent in the City of Bakersfield, County of Kern, State of
California, onthe 27ú day of February 2015.
There were present at the meeting:
Directors in attendance:Andy Paulden, Steve Starbuck, Chris Thornburgh, Eric
Xin, Diana Branthoover, Thomas Young, Ryan
Nielsen, Diane'White, Rosalva Flores, Connie Percz
and Jian Ou-Yang
None
Clint Baird
Directors-in-Training absent: None
Guests present: None
1. Citv of Fresno Audit RFP
Rosalva Flores, Principal, is authorized to respond to the Cþ of Fresno's 2015-2019 audit
services RFP and to provide a proposal"
Directors absent:
Directors-in-Training :
CostProposal
H
n ul
trl
rr tt
ilil
ll ll
ryilx
BnoWN Aru¡tSTRoTN
r i Ai tR I !r
a.
1.
General Requirements
l\ame of Firm:
Elrown Armstrong Accountancy Corporation
tr, the undersigned, ceftify that I arn entiiled
subrnit this proposal, and authorized to sign
the audit engagement.
to represent the firm, empowered to
a contract with the City of Fresno for
2.
3.
ÐlgnaEure T¡fle Date
Rosalva Flores
Name (Print)
Total All-Inclusive Maximum price
The total all-inclusive maximum price contains all direct and indirect costsnincluding all out-of-pocket expenses. Th l total all-inclusive maximum price for thefiscal year ended June 30,2O!5, is as follows:
2015
TotalAll-Inclusive Maximum price - 2015 $ 200,000
Bnowu AnusrnoNc
Certified Public Accountants
Providing Auditing & Accounting
Services for 40 years
COST PROPOSAL
4" Schedule of Frofessional Fees and Expenses
The sahedules of professional fees and expenses below provide the staff levelsn
hours assiEned to these levelsn and the assigned hourry rates.
CITY OF FRESNO
PROFESSIONAL AUDIT SERVICES RFP
RFP Nor 93L7
Rates and hours anticipated for the partner, specialist, supervisory and staff levet
individuals assigned to the audits are indicated in the above schedule.
Expenses classified as "out-of-pocket" are indicated in the above schedule. We
agree to be reimbursed at the rates used by the City of Fresno for its employees.
Reimbursements for travel, lodginE, and subsistence will be accepted at the
prevailing City of Fresno rates for its employees"
6.
7.
Bnowu AnvrsrnoNc
Oertified Fuhlic Accountants
Providing Auditing & Accounting
Services þr 40 years
HOURS
FY 2015
HOURLY
RATE
TOTAL
FY 2015
TOTAL
FY 2016
TOTAL
Ft 2017
TOTAL
FY 2018
Partners 100 $200 $ 20,000 $ 20,325 $ 20,745 $ 21,025
Managers 200 L70 34,000 34,70O 35,425 36,100
Supervisory Staff 4LO L20 49,200 50,235 5L,L25 52,100
Staff L,O2O 90 91,900 93,70O 95,700 97,7OO
Cther (clerical)30 65 1,950 2,030 2,095 2,15O
Subtotal for
Services Described
in RFP
t,760 196,950 200,990 205,090 209,075
Out-of-pocket
Expenses 3,050 3,110 3,t20 3,325
Total All-inclusive
Maximum Price $ 200,000 $ 204,100 $ 208,200 + 2t2,4OO
COST PROPOSAL
8. Fee totals for each of the fiscal years 2015, 2OL6, 20L7, and 2018 based on
estimated hours using the hourly rate schedu¡le are as follows:
FY 201s FY 2016 ¡:t 2l¡17 FY 2018
Excluding out-of-pocket expenses $ 196,950 $ 200,990 $ 205,080 $ 209,075
Specifically for out-of-pocket
expenses 3,050 3,1 10 3,120 3,325
Combining all expenses (all-
inclusive maximum price)$ 200,000 $ 204,100 $ 208,200 fi 2L2,4OO
Three (3) references to whom we currently offer similar types of services, are as
follows:
City of Bakersfield - Nelson Smith (66I) 326-3V42
City of Burlingame - Carol Augustine (650) SSB-7222
City of Visalia - Jason Montgomery (559) TL3-442s
Fee Schedules for Various Audit Components
Audit of City's general purpose financial statements including statement
preparation and compliance and internal control reports
9"
b.
1.
HOURS
FY 2015
HOURLY
RATE
TOTAL
FY 2015
TOTAL
FY 2016
TOTAL
Ft 20t7
TOTAL
FY 2018
Partners 79 $ 200 $ 15,800 $ 16,100 $ 16,450 $ to,zoo
Managers 163 L70 27,7L0 28,300 28,900 29,400
Supervisory Staff 305 t20 36,600 37,300 38,000 38,900
Staff 796 90 71,640 73,LOO 74,600 76,100
Cther (clerical)2L 65 1,365 1,400 L,430 1,500
Subtotal for
Services Described
in DtrD
L,364 153,1 1 5 156,200 159,380 162,500
Out-of-pocket
Exoenses 2,685 2,800 2,820 3,000
Total All-
inclusive
l¡l¡vim¡¡m D¡i¡a
$ 155,800 $ 159,000 $ 162,200 $ 165,500
Bnow¡t AnnrsrnoNc
Certified Fublic Accountants
Providing Auditing & Accounting
Services for 40 years
COST PROPOSAL
2. Single Audit including required reporting
3. Audit of the Employee Health and welfare Trust excluding statem
no separate statement prepared
HOURS
FY 2015
HOURLY
RATE
TOTAL
FY 2015
TOTAL
FY 2016
TOTAL
FY 2l¡t7
TOTAL
FY 2018
Paftners 10 $200 $ 2,000 $ 2,000 fi 2,075 $ z,tzs
Managers 16 L70 2,720 2,800 2,900 3,000
Supervisory Staff 56 t20 6,720 6,900 7,000 7,too
Staff L24 90 1 1,160 11,400 11,600 11,900
Other (clerical)4 65 260 300 325 350
Subtotal for
Services Described
in DtrD
2LO 22,860 23,400 23,900 24,375
Out-of-pocket
Exoenses L40 100 100 t2s
Total All-
inclusive
M¡vimrrm Dri¡a
$ 23,000 $ 23,500 $ 24,000 $ 24,500
HOURS
FY 2015
HOURLY
RATE
TOTAL
FY 2015
TOTAL
FY 2016
TOTAL
¡-tt 2l¡17
TOTAL
FY 2018
Partners 4 $200 $ eoo $800 $820 $800
Managers 8 t70 1,360 1,400 L,425 1,500
Supervisory Staff 18 I20 2,160 2,20O 2,225 2,300
Staff 40 90 3,600 3,7OO 3,800 3,900
Cther (clerical)2 65 130 130 130 100
Subtotal for
Services Described
in DtrD
72 8,050 8,230 8,400 8,600
Out-of-pocket
Exoenses 50 70 100 100
Total All-
inclusive $ 8,100 $ 8,300 $ 8,500 $ 8,zoo
BnowN AnusrnoNc Providing Auditing & Accounting
Services þr 40 yearsCertified Fublic Accountants
COST PROPOSAL
4" Audit of Fresno Area Express including statement preparation
HOURS
FY 2015
HOURLY
RATE
TOTAL
FY 2015
TOTAL
FY 2016
TOTAL
itt 2l¡17
TOTAL
FY 2018
Paftners 3 $200 $600 $600 $600 $600
Managers 6 170 1,020 1,000 1,000 1,000
Supervisory Staff L6 t20 1,92O 2,00o 2,000 2,000
Staff 28 90 2,520 2,600 2,700 2,800
Other (clerical)3 65 195 200 200 200
Subtotal for
Services Described
¡n ÞtrD
56 6,255 6,400 6,500 6,600
0ut-of-pocket
ExDenses t45 100 100 100
Total All-
inclusive
llrvimrrm Dri¡a
$ 6,400 $ 6,500 $ 6,600 $ 6,z00
5" Audit and repofting required for the Passenger Facility Charge (PFC) program
HOURS
FY 2015
HOURLY
RATE
TOTAL
Fí 2015
TOTAL
FY 2016
TOTAL
FY 2OL7
IOTAL
FY 2013
Partners 4 $ 200 $800 $ 82s $ eoo $800
Managers 7 t70 1,190 1,2o0 t,2oo t,200
Supervisory Staff 15 I20 1,800 1,835 1,900 1,900
Staff 32 90 2,890 2,900 3,000 3,100
Other (clerical)65
Subtotal for
Services Described
in ÞtrÞ
58 6,670 6,760 6,900 7,000
Out-of-pocket
Exoenses 30 40
Total All-
inclusive
lllvim¡¡m D¡i¡a
$ 6,700 $ 6,800 $ 6,900 $ z,ooo
c. Single Audit Fee Provision
See table 2 at page 4"
Bnowu AnvrsrnoNc
Certifíed Fublic Aecountants
Providing Auditing & Accounting
Services þr 40 Years
d.Rates for Additional Services
We do not anticípate that additional services will be necessary to complete the audit"In the event that additional services are necessary to either supplemént the servicesdescribed in tl'lís Request for Proposaln or to pefform additional work related tospecific recomrnendations presented ln a report issued as a result of thisengagement, then such additional work shall be perforrned only upon execution ofan addendum to the contract between the City and the firm" Any such additional
work agreed to between the City and the firrn shall be performeá at the rates setforth for the specific staff positions in the Schedule of Fees and Expenses.
Local Preference
GITY OF FRESNO
PROFESSIONAL AUDIT SERV¡CES RFP
RFP No.9317
[X] We certify that we qualifu as a local firm pursuant to Fresno Municipal Code Section 3-109.1.t ] We certiñ7 that we qualify as a non-local firm which has formed an as'sociation for pecuniary profitwith
the local firm listed below for the project being proposed wherein the benefit to'the locai i¡rr ir ànamount greater than 15% of the total contract price for the project (as provided in Fresno Municijár
Code Section 3-109.1).
Primary Office [ ]
Branch Office txl(Please mark as applicable)
Primary Office [ ]
Branch Office t l(Flease mark as applicable)
e.
Location of Proposer's Business:
(Please provide street address, no PO Box)
Address: 7673 North lngram. Suite 101
Fresno. CA 9371 I
Phone: (559) 476-3592
Name and Location of Associated Local Firm,s Business:
Name:
(Please provide street address, no PO Box)
Address:
Phone:
The undersigned Proposer hereby certifies under penalty of perjury under the laws of the State of California
that the information contained on this CERTIFICATIOI FOR LOCAL PREFERENCE is correct anO comjtéte.
The above Statement is part of the proposal._ Signing the proposa!shall also constitute signature ofthis Gertification. Proposers are cautioned that making aÏalie certification may subiect tñe ðàriil¡ãrto criminal prosecution.
Bnowu AnusrnoNc
Oertified Fuhlic Accountants
Providing Auditing & Accounting
Services þr 40 years
6
f. Manner of Payment
Brown Armstrong agrees to progress payments on the basis of hours of workcompleted during the course of the engagement and out-of-pocket expenses incurred
in accordance with our dollar cost proposal" xnterim billings shall cover a period of not
less than a calendar month and shall be itemized by staff level and work performeJ
on each pottion of the project. We understand that twenty percent (2To/o) of the totalannual contracted amount will be withheld from each billing pending áelivery anJacceptance of the firm's final audit reports.
Bnowu AnvrsrnoNc
Certified Public Accountants
Providing Auditing & Accounting
Services.þr 40 years
BROWN
ARMSTRONG
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BROWN
ARMSTRONG
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I
ROSALVAA. FLORES, CPA
4100 huxlun Åve',5uite 100
Bokersfield, iÀ 9)ì09
Iel 66l.ll4.49il
tox66l.lì4.4$7
e-moilrf lores@bocPm.com
ERIC H. XIN, CPA, MBA
hirrdpoi
4100 huxtun Ave,,Suite 100
Bokersfield, iÅ 91109
Iel 66ì.14.49n
fox 661.1ì4.4997
e-moil:exin@bocpo.com
OSVALDO GTITIERREZ CPA
Audit I'tonoger
7671 North lnqrom,Suile l0l
hesno. [Ä 9]7ìl
Iel 559.476.1591
4ì00 huxlun Ave.,Suile 100
Bokersfield, tÀ 91109
Iel ó61314.4971 fox 661.114.499/
ogutierrez@bocPos.com
ww.bocpos.com
MIKELLEL, AZEVEDO, CPA
hnior ktounlonl
i67l Norlh lnorom, Suite l0l
fresno, tÅ glIl
Iel 559.476.1591
4100 huxlun Ave.,Suile i00
Bokrsfield. tÅ 91109
Iel 66ì:114/9/l fox ó61.114.4997
mozevedo@bocpos.com
www.bocpos.com
-t
BROWN
ARMSTRONG
(tRIlfltD
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BROWN
ARMSTRONG
trRll iltD
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BROWN ARÌVISTRoNIG
fm r{-;#il mr{ ffin ç h [ iln d\ {\t^ñ n m ür{-* rn{-r--
Our Aud¡t Approach
a specifi
{
.We provide the highest quality audit with
audit approach.
.This approach is non-intrusive to your day to day
operations, but is t'hands-on;' making you feel
comfortable and part of the process.
.Part of our relationship will involve Brown Armstrong
educating employees and advising you on current
requirements and regulations.
.Annual two-day gover
.GASB 67/68 impleme
,Þ
\t
BROWN ARvI.STRoNG
fnrfriFË ar[ ffir n hItn d\ nd*frn il e*frt rn{-r
IT Utilization
.Secu red
electron ic
.Completely paperless audit
environ ment.
portal for uploading rS\information -Nr)
Staff
Exper¡ence
.Our entire engagement team
has been trained and are experts
with the use of this technology.
.IT specialist consultant to
perform IT specific risk
assessment.
complete system analysis and
ests of controls.
Audit Approach mented into Phases
June/uly
Review and obta¡n cop¡es of key work papers of
prior aud¡t f¡rm.
Familiarize ourselves with operating
environment
Perform risk assessment procedures
Determ¡ne planning mater¡al¡ty
Perform preliminary analytical review
Develop aud¡t plan
ldentifo significant aud¡t areas
Determine nature and extent of audit
procedures
Reevaluate the progress of the audit and make
any changes on audit approach and procedures,
if necessary
Confirmation of account balances
Audit Planning
lnterim Field Work
June/uly
Entrance conference with all key Finance
Department personnel to discuss critical dates
to ensure timely completion of the audit and
issuance of CAFR and S¡ngle Aud¡t
Assess ¡nternal control env¡ronment
Perform SAS 99 (Fraud evaluation) procedures,
lnterview of selected staff and members of the
City Council for areas of concern w¡th¡n the City
for additional focus as part of the audit
ldent¡fy ¡nternal control strengths and
weaknesses
Follow up on prior year findings
Eualuate design and implementation of selected
controls
Test controls over financial report¡ng and
administration
Understand account¡ng and report¡ng act¡v¡ties
Hold progress conference with key Finance
Department personnel
Final Field Work
November-January
Entrance conference with all key Finance
[Þpartment personnel
Plan and perform substantive audit procedures
Conduct final analytical review, including
budget vs actual comparison and inquiry of
vanances
Cons¡der audit evidence sufficiently
Conclude on critical accounting matters
Hold exit conference w¡th key F¡nance
Department personnel including discussion of
proposed audit adjustments, internal control
and compliance findings and management
letter. Addit¡onally, ensure we are on schedule
to complete the audit and issue CAFR and
Single Audit by due date
Completion
February
Perform complet¡on procedures
Draft internal control management letter
comments
Draft reports
Review CAFR
lssue auditol's reports and management letter
Presentation to the Cþ Council
-tÉ€f 0!4+l/l4 o^l ñ ÅOt*tlot'le+
\óæ¡.t
,bfq rtlz,phl
e,tnW fc$ú*
BROWNI ARÀASTRONIG
Aud¡t Approach- Risk Based Approach
o Significant Areas- CAFR. Cash and Investmentso fteceivables and Payables. Capital Assets. Operating and Non-Operating Revenueso Salaries and Benefits
o Single Aud¡t
. Determine Major Programs
(^fil-{-;f; âr^l Drr[rlin Anr^.ìrr].r {.=n{-c
Aud¡t Timeline/Critical Dates for City of Fresno
Review of Previous Auditor's workpapers.
City to Provide Auditor with preliminary schedule of Federal Awards for Major Fund determination.
Entrance Conference with City Management.
Auditor to provide City with Preliminary Single Audits to be Performed.
Auditor to provide City with blank Single Audit Questionnaires and Information Requests.
Auditor to provide City with a detailed interim audit plan, Critical Dates List, and an Information
Request List.
City to provide 3/3L/XX City trial balance to Auditor for Preliminary analytics.
Test of control populations on Interim Information Request List due to Auditor.
City to provide populations for single audit sample selections, along with related completed
questionnaires to Auditor. Both the Federal Compliance Information Request List and the Single
Audit Questionnaires were provided to the City by the Auditor on July 6,2015.
June 30, 2015
July 2,2Ot5
July 6, 2015
July 6, 2015
July 6, 2015
July 6, 2015
July 10, 2015
July 13, 2015
July 13, 2015
10
Planning Expected
Completion
Date
BRoWNT ARMSTRoNG
larl-;f; arl D¡ r þr li r A r,\r-r^r r r l-ìl-= nfrc
Aud¡t Ti meline/Critical Dates for City of Fresno
Auditor to provide City with Síngle Audit testing samples.
Test of control samples due to City.
Beginning of interim audit fieldwork. Items on the Interim Information Request List and support
for the Single Audit due to the Auditor.
Weekly conference between Auditor and City Management.
Brown Armstrong to provide City with Potential findings and recommendations memo and
meeting.
July 13, 2015
July 13, 2015
July 2O,2OL5
July 24,2015
July 31, 2015
Interim Fieldwork Date to Be
Completed
T1
BRoWNI AnUSTRoNG
lar#¡f; arl Dr r hlin A îr^r\r | '.r {-= nl-c
Aud¡t Ti meline/Critical Dates for City of Fresno
Final Fieldwork Date to Be
Completed
Beginning of final fieldwork at City's office.
Final fieldwork entrance meeting with City Management.
Status conference meeting between auditor and City Management.
Expected completion date of fieldwork at City's offices.
Auditor to have any adjustments to City for approval.
Auditor to issue a draft management letter to City for review and response.
Final exit conference.
November 9,2OLs
November 9,2OI5
November 27, 2OLs
February 8,2Ot6
February 8,2Ot6
February L5,2Ot6
February 19,2OL6
13
BROWNI ARIVTSTRONG
/-ar{-;f; aÅ Dr r hIin A t^îr^ìr r il{-n nl-n
Aud¡t Ti meline/Critical Dates for City of Fresno
Audit Wrap-up & Presentation Date to Be
Completed
City to provide Auditor with draft of CAFR - lst review
Response from Legal due to Auditor
City to provide responses to draft management letter
Draft copies of all reports due to the City
Auditor to provide City suggested changes and revisions to CAFR - 1st review
2nd request for Legal confirmations with a CC to Auditor
Auditor to provide revised City CAFR comments for approval
Final copies of all reports due to City
City to províde final approval of CAFR
Auditor presentation to the City Audit Committee/City Council
February 15, 2016
February 15, 20L6
February L9,2016
February 19,2016
February 19,2016
February t6,2OL6
February 25,2016
February 25,20L6
February 29,2016
TBD
74
BROWNT ARTVTSTRoI\G
Why Brown Armstrong?
Our People
seminars that clients are always invited to attend
Our Ability to Deliver on Time
appropriately with your staff
1_5
BRoWN ARfutSTRoNIG
fmn{-ãFñ mÆ ffin m hfifin Å trtrftK ft ffi*Fn rn{-r
Why Brown Armstrong?
Our Quality Control
Finally, Our Fee
will deliver to you
t6
BRoWNI ARÀASTRoNG
Questions
Rosalva Flores, CPA
Principal
Main Office:
Eric H. Xin, CPA, MBA
Principa I
Osvaldo Gutierrez, CPA
Ma nager
Fresno Office:
7673 N. lngram, Suite 1-01
Fresno, CA937LL
42OO Truxtun Avenue, Suite 300
Bakersfield, CA 93309
www. bacpas.com
888.565.1040
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