WCS Auditing Services

Proposal to Provide Auditing Services

Town of Capitol Heights, MD

Prepared by

Weyrich, Cronin & Sorra, LLC Certified Public Accountants and Business Consultants 20 Wight Ave • Suite 210 Hunt Valley, MD 21030

Karen Dojan, CPA Principal [email protected]

410-339-6464

April 12, 2021 Ladies and Gentlemen, Thank you for the opportunity to submit this proposal for professional auditing services for the Town of Capitol Heights, Maryland (Town) for the year ending June 30, 2020 and 2021. We understand that the Town requires the audit for June 30, 2020 to be performed as soon as possible. If selected as your auditors, we will commit to begin the transition process no later than May 3rd, by providing a list of required documents to begin our audit. It is our understanding that you require an audit performed each year in accordance with auditing standards generally accepted in the United States of America. We will audit and issue our opinion on the financial statements of the Town. As part of this engagement, we will also prepare and submit the Town’s UFR, and assist the Town with preparation of the financial statements, including the Management Discussion and Analysis and other Required Supplementary Information. At the conclusion of our audit, we will also provide the Town with any recommendations that may strengthen your internal control structure in a separately issued management letter. We will also attend a regularly scheduled meeting of the Town Council to present the results of our audit, if requested. Weyrich, Cronin & Sorra, LLC (WCS) and our Governmental Services Team has significant experience working with various governmental organizations and local municipalities throughout the State of Maryland. Our experience includes not only the audit of these governmental organizations, but also engagements whereby we function as the outsourced accounting staff, and consultations regarding internal control policies and procedures. WCS will be an available resource to the Town throughout the year. The WCS engagement approach provides unparalleled client service. Our technical approach is designed to perform the engagement in strict compliance with professional standards, while being cognizant of the needs of your staff and required deadlines. Efficiency and relevance are always top priorities. Providing a high level of value for the price you pay is integral to our basic engagement philosophy. We trust that you will find our experience and the quoted fee to be competitive. Please feel free to contact me if you have any questions about this proposal, our fee structure or the firm. We look forward to your response,

Karen Dojan, CPA Principal

Table of Contents

Firm Qualifications and Experience ...... 1-3 Audit Team Qualifications and Experience ...... 4-8 Government Engagement Experience ...... 9-10 Specific Audit Approach ...... 11-12 Proposed Fee ...... 13

Firm Qualifications and Experience

WCS, established in 1979, is a regional full service accounting firm that offers a broad spectrum of services, including audit, tax, valuation and consulting WCS stands apart from other services. From the beginning, the goal of the founding partners was to establish accounting firms through the an accounting practice built around proactive client service delivered through personalized attention our “Close Personal Attention”. Over four decades later, the tradition of excellent accountants bring to each client client service continues. engagement both during the According to the Baltimore Business Journal’s annual Book of Lists, WCS is one of course of the engagement and the region’s largest CPA and consulting firms. Currently, the firm has 7 partners, throughout the course of the year. 47 professionals and 10 administrative staff located in three offices (Hunt Valley,

Bel Air and Elkton). If selected as the Town’s auditors, the reports will be issued We provide quality services, offering our clients the highest from our Hunt Valley office. value for their resources. WCS and our Governmental Services Team, consisting of eight full-time staff members, have significant experience in our capacity as both auditors and consultants with other municipalities throughout Maryland. This experience, in conjunction with the firm’s commitment to continuing professional education (CPE), provides our team members with extensive knowledge of the unique municipal financial reporting requirements of the Town. In addition, our hands- on experience with the day-to-day functions of local municipalities provides us

with invaluable real-world experience of best practices.

We operate as distinct practice groups; therefore, staff with specialized industry experience service each of our engagements. The firm currently serves nineteen public organizations. The majority of these organizations are local municipalities who utilize governmental, special revenue, capital projects, enterprise and fiduciary fund accounting. WCS prides itself on the quality services it provides. Accordingly, the firm holds memberships in the following associations: • American Institute of Certified Public Accountants (AICPA) • Maryland Association of Certified Public Accountants (MACPA) • American Institute of Certified Public Accountants Governmental Audit Quality Center (GAQC) • American Institute of Certified Public Accountants Employee Benefit Plan Audit Quality Center • Strategic Corporate Partner of the Maryland Municipal League

Firm Qualifications and Experience

WCS maintains the highest professional standards of excellence and integrity through our voluntary membership in the AICPA and their Governmental Audit Due to the level of quality of our Quality and Employee Benefit Plan Audit Quality Centers. Membership in these services, we have established organizations subjects us to their stringent Peer Review Program requirements. ourselves as a partner to our A copy of the firm’s most recent System Review Report for the year ended municipal clients and have built long- August 31, 2018 can be located on the following page. The report reflects a term relationships. As part of rating of Pass on WCS’s System of Quality Control with no letter of comments. A building that partnership, we also Pass rating is the highest form of assurance that a firm can receive. WCShas participate with the Maryland Municipal League as a Strategic always received this rating since the inception of the program in 1981. Audits Partner. performed under Government Auditing Standards, the Uniform Guidance and government engagements were a significant component of the peer review. WCS affirms that it is independent of the Town under generally accepted auditing standards, and the more stringent requirements of U.S. General Accounting Office’s Government Auditing Standards.

Firm Qualifications and Experience

Audit Team Qualifications and Experience

WCS and assigned key professional staff are all Certified Public Accountants (CPAs) properly licensed to practice in the State of Maryland. Additionally, all individuals specified in this proposal have exceeded the Maryland licensing requirements for Continuing Professional Education (CPE). What distinguishes us from other firms is our people. Our staff has a unique mix of skills, both technical accounting expertise and a wealth of industry specific knowledge regarding governmental organizations. This allows us to focus on effectively and efficiently meeting the needs of our clients. We recognize the value of timely service and have the ability to meet your scheduling needs. We invest significant resources to keep all members of our staff, from Partners to Staff Accountants, abreast of the latest developments related to accounting and auditing pronouncements, including those issued by the GASB and the Office of Management and Budget (OMB) related to Federal awards. Participation in CPE courses are fundamental to maintaining the skills necessary to provide the technical expertise our clients have come to expect. All Governmental Services Team members have received the required training in governmental accounting and maintain their professional proficiencies through a minimum of 80 hours of CPE related to core competencies in accounting and auditing every two years, with a minimum of 24 hours directly applicable to performing audits under Government Auditing Standards. However, many of our staff members receive training which far exceeds this minimum level. A sample of CPE courses attended during the past three years include: • GFOA Annual GAAP Updates • MACPA’s Annual Government & Nonprofit Conferences • GAQC Annual State and Local Government Audit Planning Updates • Maryland GFOA Annual Conferences • GASB Leases: What Preparers and Auditors Need to Know • Fiduciary Activities Implementation Considerations • Understanding the Changes to Yellow Book • Advanced Topics in Single Audit • Fundamentals of Governmental Accounting and Reporting • Cybersecurity Fundamentals and Preventing Cyber Attacks • Association of Certified Fraud Examiners Annual Conferences • Real Frauds Found in Governments

Audit Team Qualifications and Experience

As a member firm of the AICPA’s GAQC, we receive regular updates on topics directly related to pronouncements by the GASB and implementation guidance “The staff is readily available to related to the new standards. This is just one of the ways that we empower our answer our questions, provide us with staff to maintain the resources and knowledge necessary to provide the highest proper instructions, and assist in any quality service and technical expertise to our clients. We as a firm are proud of way possible. Working with a the fact that we provide such resources and opportunities for professional knowledgeable, friendly staff makes growth. my job as Town Administrator easier; At WCS we do not utilize sub-contractors or contract employees to staff our as I am confident that our records are engagements. As such, all members of our team have been trained to meet the accurate, that the required filing high level of quality and technical proficiency that our clients have come to documents are accurate, and that expect. there is always someone available to assist us.” Karen Dojan will serve as the engagement partner, and will have overall responsibility for the engagement, including signing the final reports. Nicole DeJarnette will plan the engagement and work directly with the client throughout the audit. She will be responsible for reviewing audit procedures - Elizabeth Jo Manning and supervising audit staff in the field. This engagement will also be subjected to Town Administrator a quality control review performed by a manager who is independent of the Town of Millington engagement team.

Audit Team Qualifications and Experience

Karen Dojan Certified Public Accountant, Principal

PROFESSIONAL EXPERIENCE Karen Dojan, Principal at Weyrich, Cronin & Sorra, LLC, has over 25 years of public accounting experience. She joined the firm in 2011 as a Senior Manager. Karen is the leader of our Governmental Services Team, with extensive experience regarding audits of governmental and not-for-profit organizations. She also has significant experience performing audits under Government Auditing Standards and the Single Audit Act (Uniform Guidance). As an active corporate partner of the Maryland Municipal League, Karen has provided training for members at their annual summer conference. She has also provided training at the MACPA’s Annual Government and Not-for-Profit Conference, and is a certified trainer for the Certified Nonprofit Accounting Program (CNAP), a nationally recognized certificate program for non-profit financial professionals.

FUNCTIONAL DISCIPLINE Karen has served on all municipal engagements, and those performed under Government Auditing Standards and The Single Audit Act for the firm since 2011, either as a Senior Manager, Quality Control Reviewer or Partner.

CONTINUING PROFESSIONAL EDUCATION Karen has received 156 hours of CPE in the past three years related to core competencies in accounting and auditing. Of these hours, 81 were directly applicable to performing audits under Government Auditing Standards.

PROFESSIONAL AFFILIATIONS • Member of American Institute of Certified Public Accountants • Member of Maryland Association of Certified Public Accountants • Member of Government Financial Officers Association (GFOA) • Member of Maryland GFOA • Certified Nonprofit Accounting Professional (CNAP) Trainer

EDUCATION Bachelor of Business Administration in Accounting, Loyola College of Maryland Licensed CPA, State of Maryland

Audit Team Qualifications and Experience

Nicole DeJarnette Certified Public Accountant, Certified Fraud Examiner, Manager

PROFESSIONAL EXPERIENCE Nicole DeJarnette has over 10 years of public accounting experience. Nicole joined WCS in January 2015, after several years with a smaller accounting practice. Since joining the firm, she has become an important member of our Governmental Services Team, with extensive experience regarding audits and taxation of governmental and not-for-profit organizations. Nicole has served as Manager on numerous engagements, including engagements performed under Government Auditing Standards and the Single Audit Act. Nicole has also achieved the AICPA’s Cybersecurity for Finance and Accounting Certificate and is a Certified Fraud Examiner.

FUNCTIONAL DISCIPLINE Nicole specializes in local governments and not-for-profit organizations along with federal regulations governing organizations receiving federal awards such as OMB Uniform Grant Guidance. Nicole works closely with our clients and supervises junior staff in the field. She also performs detailed reviews of audit work papers.

CONTINUING PROFESSIONAL EDUCATION Nicole has received 158 hours of CPE in the past three years related to core competencies in accounting and auditing. Of these hours, 81 were directly applicable to performing audits under Government Auditing Standards.

EDUCATION Bachelor of Science in Financial Economics and a Certificate in Pre- Professional Studies in Accounting, University of Maryland, Baltimore County Licensed CPA, State of Maryland

Audit Team Qualifications and Experience

Gray Farquharson Senior Accountant

PROFESSIONAL EXPERIENCE Gray Farquharson, Senior Accountant at Weyrich, Cronin & Sorra, LLC, joined the firm in May 2018. Since then, he has become an integral member of our Governmental Services Team, participating on numerous audits and consulting engagements for our municipal clients. In addition, he has also participated in other accounting and auditing engagements, including those performed under Government Auditing Standards and the Uniform Guidance. Gray is actively pursuing his CPA license.

FUNCTIONAL DISCIPLINE Gray specializes in governmental organizations and non-profits receiving federal awards subject to Uniform Guidance. He works closely with our clients, under the direct supervision of a manager in the field performing detailed audit testing procedures.

CONTINUING PROFESSIONAL EDUCATION Gray has received 129 hours of CPE in the past three years related to core competencies in accounting and auditing. These courses included specific training related to the fundamentals of governmental accounting and GASB pronouncements. Of these hours, 56 were directly applicable to performing audits under Government Auditing Standards.

PROFESSIONAL AFFILIATIONS • Member of American Institute of Certified Public Accountants • Member of Maryland GFOA

EDUCATION Bachelor of Business Administration in Accounting, University of South Carolina Currently pursuing his Masters in Accounting and Business Advisory Services, Towson University CPA Candidate

Government Engagement Experience

City of Glenarden, MD

WCS has significant audit experience Robin Jones, City Council President with other governmental entities 8000 Glenarden Parkway throughout the State of Maryland. Glenarden, MD 20706 The following clients are willing to share 301-773-2100 their experiences working with our staff [email protected] and our audit procedures: WCS has performed the annual audit and prepared the UFR for the years ended June 30, 2013-2020. Town of Galena, MD Barbara Shaw, Treasurer 101 S. Main Street Galena, MD 21635 410-648-5151 [email protected] WCS has performed the annual audit and prepared the UFR for the years ended June 30, 2011-2020. A Single Audit was performed for the year ended June 30, 2017. Town of Millington, MD Elizabeth Jo Manning, Town Manager 402 Cypress Street Millington, MD 21651 410-928-3880 [email protected] WCS has performed the annual audit and prepared the UFR for the years ended June 30, 2013-2020.

All of the referenced engagements were performed under the direction of Karen Dojan, the partner on the engagement. In addition, all engagements were issued from our Hunt Valley office.

Government Engagement Experience

In addition to auditing services, WCS has ongoing relationships with several municipal organization where we provide ongoing accounting assistance and have performed reviews of internal control structure. Town of Somerset, MD Matthew Trollinger, Town Manager 4510 Cumberland Avenue Somerset, MD 20815 301-657-3211 [email protected] WCS provides ongoing accounting assistance reconciling monthly bank and investment statements, monitoring account postings and classifications, and assistance with the year end audit process.

Village of Martin’s Additions, MD Niles Anderegg, Village Manager 7013 Brookville Road, Suite B Chevy Chase, MD 20815 301-656-4112 [email protected] WCS performed a review of internal controls for the Village in 2020. As a result of this engagement, WCS provides ongoing accounting assistance reconciling monthly bank and investment statements, monitoring account postings and classifications, and assistance with the year end audit process.

Specific Audit Approach

WCS is committed to meeting your reporting deadlines. The WCS audit approach allows for flexibility in scheduling the audit to accommodate the “Since we’ve started working with schedules of management. As such, our staff will perform the audit according to WCS, the stress of our annual audit is executive management’s schedule, not our staff’s schedule. gradually becoming a thing of the past. Of course, there’s no way to It is the firm’s policy that all audit engagements be properly planned, avoid the additional workload performed, supervised, reviewed, documented, and reported or communicated in accordance with the requirements of professional standards, and regulatory brought on by an audit, but it’s no and legal requirements. longer a dreaded task. WCS has helped to streamline the process and WCS believes that communication is not only essential to ensure a successful has provided exceptional unbiased audit, but to develop a strong and lasting relationship with the Town. As such, expert guidance through a regular updates will be provided to the Town Administrator throughout course complicated merger.” of the engagement. A list of schedules to be prepared by the Town and significant documentation

requests will be made in writing each year (for the 2020 audit, this will occur by

- Jill Cecil May 3rd). You will receive a specific list of documentation requests prior to Director of Finance fieldwork. However, as we progress through our audit procedures, additional and Administration documentation may be requested that was not initially anticipated. Blue Water Baltimore We will schedule a meeting with the Town Administrator upon acceptance of our proposal to establish dates for the 2020 audit, and to discuss any anticipated changes in reporting requirements. Based upon the results of our meeting, we will prepare our detailed audit plan. We anticipate requesting one to two days at the Town offices in May to finalize our audit plan, make inquiries of management and staff, prepare audit confirmations and perform tests of controls and significant transactions. All procedures will be performed by the Manager and Senior Accountant assigned to the audit, under the direct supervision of the Partner. We will communicate with the Town Administrator at the completion of fieldwork to review the current status of any open items, to summarize the results of our audit procedures, and to discuss our proposed auditors’ opinions and any potential findings. However, if during our audit procedures we encounter any irregularities or illegal acts we will immediately make a written report to the Mayor and Town Council. Upon completion of fieldwork, we will require two to three weeks in our office to wrap up any open items, for final reviews of all testing, and to draft the reports and management and governance communications required by auditing

Specific Audit Approach

standards generally accepted in the United States of America and Government Auditing Standards. “They are a very good group of WCS’s System of Quality Control requires that this engagement will be people to work with. They work with subjected to an internal Quality Control Review by an individual independent of us to accomplish our goals and meet the audit team. Accordingly, all workpapers will be reviewed in detail by the our reporting deadlines. Questions Manager on the engagement. The Partner will review significant assumptions are answered thoroughly and in a and key workpapers associated with the audit to ensure that all work has timely manner” conformed to professional standards and the firm’s System of Quality Control, and a final pre-issuance review will be conducted by a qualified member of our Governmental Services Team who is independent of the engagement process. -Donna Zane Draft reports will be made available as soon after our audit procedures as Finance Manager possible, including drafts of the management discussion and analysis. We will be Northbay Education available via teleconference with the Town Administrator, Mayor and Town Council during this draft phase to answer any open comments on the presentation of the financial statements, or content of our reports and communications. Final reports will be issued upon approval of the draft financial statements and receipt of the management representation letter. We will also prepare the Town’s UFR and submit it to the State of Maryland upon finalization of our audit. Our goal is to make the process as streamlined as possible, and to maintain continued and open communication throughout the engagement process. We encourage a two-way dialogue among management, those charged with governance and audit team members during all aspects of the engagement and throughout the year. We find that this communication provides invaluable audit information and allows us to provide timely and relevant feedback throughout the course of the year. WCS stands apart from other accounting firms through the personalized attention our accountants bring to each client engagement both during the course of the engagement and throughout the course of the year. We value the opportunity to provide continuing assistance throughout the year. Many of our clients call us throughout the year to address questions or concerns as they arise, rather than wait until the annual audit to have them addressed. This is one of the ways that we have built ongoing relationships with our clients over the years. If during the year routine technical questions arise, our staff will be available for consultation. We are available bye-mail or phone for matters requiring brief assistance and are available to meet on site for matters not as easily resolved by e-mail or phone. We find that this communication allows us to provide timely and relevant feedback throughout the course of the year.

Proposed Fee

Being sensitive to the challenges local municipalities face, our Governmental Services rate structure is discounted from our normal hourly rates. Fees Thank you for this opportunity to bid presented are all-inclusive and presented on a not to exceed basis. This includes on your audit services. the preparation of all reports, including the Uniform Financial Report, report

production, and other out-of-pocket expenses: To learn more about our firm, please visit our website at:

YEAR ENDING NOT TO EXCEED FEE Wcscpa.com

June 30, 2020 $ 19,000

June 30, 2021 $ 19,000

First year engagement set-up costs, which can be significant, are incorporated in the above quoted fee. It is our understanding that the Town does not require an audit in accordance with the Uniform Guidance, as Federal Award expenditures did not exceed $750,000. Should the Town choose to extend our engagement to future years, typical fee increases range from 2-4% per year.

Current hourly rates by staff level are as follows:

STAFF LEVEL HOURLY RATE

Partner $300

Manager $230

Senior/Staff $105

WCS’s policy is to invoice our clients monthly as work progresses and invoices are due upon receipt. Providing a high level of value for the price you pay is integral to our basic engagement philosophy.