The California Joint Powers Insurance Authority (California JPIA) is requesting written qualifications from firms of certified public accountants to audit its financial statements for the fiscal years ending June 30, 2011, 2012 and 2013, with an option to extend the engagement a fourth and fifth year.

The California JPIA was formed in 1977 with 33 member agencies, under the provisions of California Government Code Section 6500 et seq., to provide a pooled, self-insured general liability program. Since that time, the California JPIA has grown to a present membership of 121 public agencies.  Member agencies of the California JPIA are listed on this page: http://www.cjpia.org/4dcgi/about/directory.shtml.

In addition to providing self-insured liability and workers’ compensation programs, the California JPIA purchases certain forms of insurance on behalf of its members in order to improve efficiency for the members and to take advantage of cost savings available to large purchasers. Purchased insurance currently includes excess general and auto liability, excess workers’ compensation, all risk property & flood, earthquake, pollution legal liability, crime, and tenant/user liability for third parties conducting events on member property.

A Board of Directors, consisting of one elected official appointed by each member, governs the California JPIA. The Board elects a President, Vice President and seven members to the Executive Committee, which meets monthly to supervise and conduct Authority affairs. A full-time staff headed by a Chief Executive Officer, employed by the Executive Committee, handles the day-to-day business of the California JPIA.

The California JPIA places strong emphasis on loss prevention and loss control, conducting on-site risk management inspections and presenting educational workshops and academies to members at regional locations. Additional information may be found on this website.

The California JPIA reserves the right to reject any or all responses to its RFQ and to waive any irregularities or informality in any responses whenever such rejection or waiver is in the interest of the California JPIA. In the event that the California JPIA cannot negotiate a satisfactory contract with the selected firm or said firm does not execute the contract, the California JPIA may give notice to said firm of its intent of negotiating a contract with the next most qualified firm, and so on, or may, if it so chooses, initiate a new RFQ process. 

The California JPIA reserves the right to select the firm that, in the California JPIA’s opinion, will provide services best matching the California JPIA’s needs, not necessarily the lowest bidder.

Relevant dates and documents are included below, and related updates and amendments to the RFP will be posted on this page. Questions regarding this RFQ may be sent to asmith@cjpia.org.

Approximate Schedule of Events
RFP Released	June 13, 2011
Deadline to Submit Questions	June 20 (by 4:00 pm)
Responses to Written Questions	June 23
Proposals Due	June 30 (by 4:00 pm)
Interviews for Selected Respondents	Week of July 11
Anticipated Selection of Finalist	Week of July 18
Commencement of Preliminary Field Work	September
Commencement of Final Audit Work	December
Audit Report to Finance Officers Committee	February 2012
Audit Report to Executive Committee	February 2012

RFP Documents

California JPIA Financial Audit RFQ (PDF)
Exhibit 1 – Summary Sheet (PDF)
Exhibit 2 – California JPIA Audited Financial Statements as of 06/30/10 (PDF)

Audit RFQ - Answers to Questions Submitted

1. Question: How long has Mayer Hoffman McCann been performing the audit?
   Answer: Since 1997
2. Question: Where they invited to bid again?
   Answer: Yes
3. Question: How many auditors did they have on-site for interim and year-end fieldwork, and for how many days/weeks?
   Answer: It varied between two and four auditors on-site at any one time, on most days there were three. Preliminary fieldwork was scheduled for two weeks, but was typically completed several days early.  This two-week period included two days which were spent on-site at Carl Warren & Company, and York Insurance Services.  These are third party claims administrators with offices located in Placentia and Upland. Final fieldwork typically consisted of one full week on-site at the Authority campus. In addition, there was one hour of required meeting attendance by a senior partner of the firm for presentation of the final audit report to the Finance Officers Committee, and one additional hour for presentation on a different day, to the Executive Committee.
4. Question: How many journal entries did the auditors propose for 6/30/10?
   Answer: None
5. Question: How many observations/findings did the auditors report for 6/30/10?
   Answer: No findings, but one recommendation. The recommendation was to explore on-line banking security capabilities more comprehensively, and specifically the possibility of adding a second approver for the creation of new wire transfer templates.
6. Question: Were there any major changes in the engagement requested in the RFQ compared to last year’s engagement?
   Answer: No
7. Question: How many hours did your previous auditors provide for your last audit?
   Answer: The total number of hours is not known because the contract was on a flat fee basis, and this information was not requested.  On-site time consisted of two weeks of preliminary fieldwork, and one week of final fieldwork with two to four auditors present at a time (as well as two hours of presentation time).
8. Question: What were your contract fees for the past three years?
   Answer:
   2007-08 $23,851
   2008-09 $23,851
   2009-10 $23,851
9. Question: What is the budget for current year audit expense?
   Answer: The budget is $26,000.
10. Question: Does the Authority prepare its own Financial Report (including statistical information) or is the auditor responsible for preparation and assembly?
    Answer: Yes, Authority staff prepares its own Financial Report including statistical information, which is typically part of the Management’s Discussion and Analysis. Authority staff also prepares some of the footnotes; however, the auditor will be asked to review and approve all footnotes as well as make recommendations regarding the possible addition of new footnotes or modifications to existing footnotes.
    
    The following footnotes are typically prepared by Authority staff:
    #1 Summary of Significant Accounting Policies
    #5 Retrospective Adjustments
    #6 Excess and Reinsurance Coverage
    #7 Non Risk Sharing Insurance Programs
    #8 Defined Benefit Pension Plan
    #9 OPEB
    #10 Contract Services Provided to Other Agencies
    #11 Contingencies
    
    The following footnotes and required supplementary information is typically prepared by the auditor:
    #2 Cash and Investments
    #3 Capital Assets
    #4 Claims Payable
       A. Reconciliation of Claims Payable by Type of Contract
       B. Schedule of Claim Development Information - Liability
       C. Schedule of Claim Development Information - WC
    
    Final assembly, review and approval of the complete financial statement document are part of a collaborative process between Authority staff and the auditor.
11. Question: What do you like about the service provided by your current auditing firm? What don’t you like?
    Answer: The Authority is currently looking for an auditing firm that is capable of meeting or exceeding desired requirements as defined in the Request for Qualifications, which is posted on this page of the website.
12. Question: Does the Authority have formalized policies and procedures related to its system of internal controls?
    Answer: The Authority has processes and procedures in place related to its system of internal controls.