21-286 Crowe - City of Cupertino Signed EL FS 2021Crowe LLP
Independent Member Crowe Global
650 Town Center Drive, Suite 740
Costa Mesa, CA 92626-7192
Tel 714-668-1234
Fax 714-668-1235
www.crowe.com
April 12, 2021
To the Honorable Mayor and City Council
City of Cupertino, California
10300 Torre Avenue
Cupertino, California 95014
Dear Ladies and Gentlemen:
This letter confirms the arrangements for Crowe LLP (“Crowe” or “us” or “we” or “our”) to provide the
professional services discussed in this letter to City of Cupertino, California (“you”, “your” or “Client”). The
attached Crowe Engagement Terms, and any other attachments thereto, are integral parts of this letter,
and such terms are incorporated herein.
AUDIT SERVICES
Our Responsibilities
We will audit and report on the financial statements of the Client for the year ending June 30, 2021.
We will audit and report on the financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information, including the individual fund
financial statements of the TDA which collectively comprise the basic financial statements of the Client for
the year ending June 30, 2021.
In addition to our report on the financial statements, we plan to evaluate the presentation of the following
supplementary information in relation to the financial statements as a whole, and to report on whether this
supplementary information is fairly stated, in all material respects, in relation to the financial statements as
a whole.
Combining and Individual Fund Financial Statements and Schedules
Schedule of Expenditures of Federal Awards
In addition to our report on the financial statements, we also plan to perform specified procedures in order
to describe in our report whether the following required supplementary information is presented in
accordance with applicable guidelines. However, we will not express an opinion or provide any
assurance on this information due to our limited procedures.
Management’s Discussion and Analysis
Schedule of Changes in Net Pension Liability and Related Ratios
Schedule of Contributions – Miscellaneous Plan
Schedule of Changes in Net OPEB Liability and Related Ratios
Schedule of Contributions – OPEB
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Schedule of Investment Rate of Return – OPEB
The document will also include the following additional information that will not be subjected to the
auditing procedures applied in our audit of the financial statements, and for which our auditor’s report will
disclaim an opinion:
Introductory Section of the Comprehensive Annual Financial Report
Statistical Section of the Comprehensive Annual Financial Report
Community Profile
The objective of the audit is the expression of an opinion on the financial statements. We will plan and
perform the audit in accordance with auditing standards generally accepted in the United States of
America, the standards for financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States, and the audit requirements of Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (Uniform Guidance). Those standards require that we obtain reasonable, rather than
absolute, assurance about whether the financial statements are free of material misstatement whether
caused by error or fraud, and that we report on the Schedule of Expenditures of Federal Awards (as
noted above), and on your compliance with laws and regulations and on its internal controls as required
for a Single Audit. Because of inherent limitations of an audit, together with the inherent limitations of
internal control, an unavoidable risk that some material misstatements may not be detected exists, even
though the audit is properly planned and performed in accordance with applicable standards. An audit is
not designed to detect error or fraud that is immaterial to the financial statements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment including the
assessment of the risks that the financial statements could be misstated by an amount we believe would
influence the financial statement users. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
In making our risk assessments, we consider internal control relevant to the Client’s preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on the effectiveness of the Client’s
internal control. However, we will communicate in writing to those charged with governance and
management concerning any significant deficiencies or material weaknesses in internal control relevant to
the audit of the financial statements that we have identified during the audit. We will communicate to
management other deficiencies in internal control identified during the audit that have not been
communicated to management by other parties and that, in our professional judgment, are of sufficient
importance to merit management’s attention. We will also communicate certain matters related to the
conduct of the audit to those charged with governance, including (1) fraud involving senior management,
and fraud (whether caused by senior management or other employees) that causes a material
misstatement of the financial statements, (2) illegal acts that come to our attention (unless they are clearly
inconsequential) (3) disagreements with management and other significant difficulties encountered in
performing the audit and (4) various matters related to the Client‘s accounting policies and financial
statements. Our engagement is not designed to address legal or regulatory matters, which matters should
be discussed by you with your legal counsel.
We expect to issue a written report upon completion of our audit of the Client’s financial statements. Our
report will be addressed to those charged with governance of the Client. Circumstances may arise in
which it is necessary for us to modify our opinion, add an emphasis of matter or other matter paragraph,
or withdraw from the engagement.
In addition to our report on the financial statements and supplemental information, we plan to issue the
following reports:
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Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government
Auditing Standards — The purpose of this report is solely to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that testing, and not to
provide an opinion on internal control over financial reporting or on compliance. This report is an
integral part of an audit performed in accordance with Government Auditing Standards in considering
the Client’s internal control and compliance. Accordingly, this communication is not suitable for any
other purpose.
Independent Auditor’s Report on Compliance for Each Major Federal Program and Report on Internal
Control Over Compliance -- The purpose of this report on internal control over compliance is solely to
describe the scope of our testing of internal control over compliance and the results of that testing
based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any
other purpose.
We will also perform tests of controls including testing underlying transactions, as required by the Uniform
Guidance, to evaluate the effectiveness of the design and operation of controls that we consider relevant
to preventing or detecting material noncompliance with compliance requirements applicable to each of
your major federal awards programs. We will determine major programs in accordance with the Uniform
Guidance. Our tests will be less in scope than would be necessary to render an opinion on these controls
and, accordingly, no opinion will be expressed. We will inform you of any non-reportable conditions or
other matters involving internal control, if any, as required by the Uniform Guidance.
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we will also perform tests of your compliance with applicable laws, regulations, contracts
and grants. However, because of the concept of reasonable assurance and because we will not perform
a detailed examination of all transactions, there is a risk that material errors, irregularities, or illegal acts,
including fraud or defalcations, may exist and not be detected by us. However, the objective of our audit
of compliance relative to the financial statements will not be to provide an opinion on overall compliance
with such provisions, and we will not express such an opinion. We will advise you, however, of any
matters of that nature that come to our attention, unless they are clearly inconsequential.
The Uniform Guidance requires that we plan and perform the audit to obtain reasonable assurance about
whether you have complied with certain provisions of laws, regulations, contracts and grants. Our
procedures will consist of the applicable procedures described in the United States Office of Management
and Budget (OMB) Compliance Supplement for the types of compliance requirements that could have a
direct and material effect on each of your major programs. The purpose of our audit will be to express an
opinion on your compliance with requirements applicable to major Federal award programs. Because an
audit is designed to provide reasonable assurance, but not absolute assurance, the audit is not designed
to detect immaterial violations or instances of noncompliance.
Our audit and work product are intended for the benefit and use of the Client only. The audit will not be
planned or conducted in contemplation of reliance by any other party or with respect to any specific
transaction and is not intended to benefit or influence any other party. Therefore, items of possible
interest to a third party may not be specifically addressed or matters may exist that could be assessed
differently by a third party.
The working papers for this engagement are the property of Crowe and constitute confidential
information.
However, we may be requested to make certain working papers available to your oversight agency or
grantors pursuant to authority given to them by law, regulation, or contract. If requested, access to such
working papers will be provided under the supervision of our personnel. Furthermore, upon request, we
may provide photocopies of selected working papers to your oversight agency or grantors. The working
papers for this engagement will be retained for a minimum of three years after the date our report is
issued or for any additional period requested by the oversight agency or pass-through entity. If we are
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City of Cupertino, California 4 April 12, 2021
aware that a federal awarding agency, pass-through entity, or auditee is contesting an audit finding, we
will contact the party contesting the audit finding for guidance prior to destroying the working papers.
Government Auditing Standards require that we provide you with a copy of our most recent peer review
report, which accompanies this letter along with the related letter of comment and response thereto.
The Client’s Responsibilities
The Client’s management is responsible for the preparation and fair presentation of the financial
statements in accordance with accounting principles generally accepted in the United States of America.
Management is also responsible for the design, implementation and maintenance of internal control
relevant to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to error or fraud.
The Client’s management is also responsible for complying with applicable laws, regulations, contracts
and grants and such responsibility extends to identifying the requirements and designing internal control
policies and procedures to provide reasonable assurance that compliance is achieved. Additionally, as
required by the Uniform Guidance, it is management's responsibility to follow up and take corrective
action on reported audit findings and to prepare a summary schedule of prior audit findings, which should
be available for our review, and a corrective action plan.
Additionally, as required by the Uniform Guidance, it is management’s responsibility to follow up and take
corrective action on reported audit findings and to prepare a summary schedule of prior audit findings,
which should be available for our review, and a corrective action plan.
Management has the responsibility to adopt sound accounting policies, maintain an adequate and
efficient accounting system, to safeguard assets, and to design and implement programs and controls to
prevent and detect fraud. Management’s judgments are typically based on its knowledge and experience
about past and current events and its expected courses of action. Management’s responsibility for
financial reporting includes establishing a process to prepare the accounting estimates included in the
financial statements and to devise policies to ensure that the Client complies with applicable laws and
regulations.
Management is responsible for providing to us, on a timely basis, all information of which management is
aware that is relevant to the preparation and fair presentation of the financial statements, such as
records, documentation, and other matters. Management is also responsible for providing such other
additional information we may request for the purpose of the audit, and unrestricted access to persons
within the Client from whom we determine it necessary to obtain audit evidence. Additionally, those
charged with governance are responsible for informing us of their views about the risks of fraud within the
Client, and their knowledge of any fraud or suspected fraud affecting the Client.
Management is responsible for adjusting the financial statements to correct material misstatements
related to accounts or disclosures. As part of our audit process, we will request from management written
confirmation concerning representations made to us in connection with the audit, including that the effects
of any uncorrected misstatements aggregated by us during the audit are immaterial, both individually and
in the aggregate, to the financial statements, and to the Client’s compliance with the requirements of its
Federal programs. Management acknowledges the importance of management’s representations and
responses to our inquiries, and that they will be utilized as part of the evidential matter we will rely on in
forming our opinion. Because of the importance of such information to our engagement, you agree to
waive any claim against Crowe and its personnel for any liability and costs relating to or arising from any
inaccuracy or incompleteness of information provided to us for purposes of this engagement.
Management is responsible for the preparation of the supplementary information identified above in
accordance with the applicable criteria. As part of our audit process, we will request from management
certain written representations regarding management’s responsibilities in relation to the supplementary
information presented, including but not limited to its fair presentation in accordance with the applicable
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criteria, the method of measurement and presentation and any significant assumptions or interpretations
underlying the supplementary information. In addition, it is management’s responsibility to include the
auditor’s report on supplementary information in any document that contains the supplementary
information and that indicates that we have reported on such supplementary information. It is also
management’s responsibility to present the supplementary information with the audited financial
statements or, if the supplementary information will not be presented with the audited financial
statements, to make the audited financial statements readily available to the intended users of the
supplementary information no later than the date of issuance by Client of the supplementary information
and the auditor’s report thereon.
Management is responsible for the preparation of the required supplementary information identified above
in accordance with the applicable guidelines. We will request from management certain written
representations regarding management’s responsibilities in relation to the required supplementary
information presented, including but not limited to whether it has been measured and presented in
accordance with prescribed guidelines, the method of measurement and presentation and any significant
assumptions or interpretations underlying the supplementary information.
At the conclusion of the engagement, it is management’s responsibility to submit the reporting package
(including financial statements, schedule of expenditures of federal awards, summary schedule of prior
audit findings, auditor’s reports, and corrective action plan) along with the Data Collection Form to the
designated federal clearinghouse and, if appropriate, to pass-through entities. The Data Collection Form
and the reporting package must be submitted within the earlier of thirty days after receipt of the auditor’s
reports or nine months after the end of the audit period.
OTHER SERVICES
Preparation of the following additional reports on behalf of the Client:
1. State of California Annual State Controller’s Report
Financial Statement Preparation
The Client will provide us with the necessary information to assist in the preparation of the draft financial
statements including the notes thereto. We are relying on the Client to provide us with the detailed trial
balance, note disclosure information and any other relevant report information in a timely fashion and
ensure the data is complete and accurate. Management is solely responsible for the presentation of the
financial statements.
Preparation of the Schedule of Expenditure of Federal Awards
The Client will provide us with the necessary information to prepare the draft schedule of expenditure of
federal awards including the notes thereto. We are relying on the Client to provide us with all information
required by the Uniform Guidance for the schedule, notes and other relevant reporting information in a
timely fashion and ensure the data is complete and accurate. Management is solely responsible for the
presentation of the schedule of expenditures of federal awards.
Data Collection Form input services
We will provide assistance in completing sections of the Data Collection Form (DCF) relative to its federal
award programs pursuant to the requirements of Section §200.512 of the Uniform Guidance that are
promulgated to be completed by the Client. While we may provide this data entry service and assist you
in satisfying your electronic data communication requirements to the Federal Audit Clearinghouse, the
completeness and accuracy of this information remains the responsibility of your management.
With respect to the above other services, we will perform the services in accordance with applicable
professional standards. We, in our sole professional judgment, reserve the right to refuse to do any
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procedure or take any action that could be construed as making management decisions or assuming
management responsibilities. In connection with performing the above other services, you agree to:
assume all management responsibilities including making all management decisions; oversee the service
by designating an individual, preferably within senior management, who possesses suitable skill,
knowledge, and/or experience; evaluate the adequacy and results of the services performed; and accept
responsibility for the results of the services.
BOND OFFERINGS
With respect to any official statements issued by the Client with which Crowe is not involved, the official
statement should indicate that the auditor is not involved with the contents of such official statement. The
disclosure should read as:
“Crowe, our independent auditor, has not been engaged to perform and has not performed, since the
date of its report included herein, any procedures on the financial statements addressed in that report.
Crowe also has not performed any procedures relating to this official statement.”
FEES
Our fees, including out-of-pocket expenses and certain internal charges, are outlined below. Certain
internal technology charges will be billed per hour of professional time or a flat fee. Internal technology
charges reflect our estimate of the costs for technology and related support on this engagement. Our
invoices are due and payable upon receipt. Invoices that are not paid within 30 days of receipt are subject
to a monthly interest charge of one percent per month or the highest interest rate allowed by law,
whichever is less, which we may elect to waive at our sole discretion, plus costs of collection including
reasonable attorneys’ fees. If any amounts invoiced remain unpaid 30 days after the invoice date, you
agree that Crowe may, in its sole discretion, cease work until all such amounts are paid or terminate this
engagement. In addition, our fee assumes one Single Audit major program. If, at fiscal year-end,
additional major programs are calculated on the Schedule of Expenditures of Federal Awards prepared
by the City, the additional fee associated with the testing of each major program will be $7,500 per
program. We will present you with that calculation prior to beginning our year-end audit procedures.
Description of Services Fee Amount
Audit of City of Cupertino, California financial statements for the year ending June
30, 2021 (includes CAFR, TDA, City Investment Policy AUP, Proposition 111 AUP,
City State Controller Report and Report of Internal Controls)
$76,000
Single Audit of City of Cupertino, California $7,500
We will invoice you as our services are rendered.
The fees outlined above are based on certain assumptions. Those assumptions may be incorrect due to
incomplete or inaccurate information provided, or circumstances may arise under which we must perform
additional work, which in either case will require additional billings for our services. Examples of such
circumstances include, but are not limited to:
Changing service requirements
New professional standards or regulatory requirements
New financial statement disclosures
Work caused due to the identification of, and management’s correction of, inappropriate application of
accounting pronouncements
Erroneous or incomplete accounting records
Evidence of material weakness or significant deficiencies in internal controls
Substantial increases in the number of significant deficiencies in internal controls
Regulatory examination matters
Change in your organizational structure or size due to merger and acquisition activity or other events
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Change in your controls
New or unusual transactions
Agreed-upon level of preparation and assistance from your personnel not provided
Numerous revisions to your information
Lack of availability of appropriate Client personnel during fieldwork
Additional audit procedures relating to the impact of COVID-19 on Client or additional regulatory
requirements relating thereto
Additionally, to accommodate requests to reschedule fieldwork without reasonable notice, additional
billings for our services could be required, and our assigned staffing and ability to meet agreed upon
deadlines could be impacted.
We also assume the Client will prepare confirmation letters, the Introductory Section, the MD&A section,
the Statistical section of the report and the Community Profile section of the report.
Due to such potential changes in circumstance, we reserve the right to revise our fees. However, if such a
change in circumstances arises or if some other significant change occurs that causes our fees to exceed
our estimate, we will advise management.
Our fees are exclusive of taxes or similar charges, as well as customs, duties or tariffs, imposed in
respect of the Services, any work product or any license, all of which Client agrees to pay if applicable or
if they become applicable (other than taxes imposed on Crowe’s income generally), without deduction
from any fees or expenses invoiced to Client by Crowe.
The Client and Crowe agree that the Client may periodically request Crowe to provide additional services
for accounting and reporting advice regarding completed transactions and potential or proposed
transactions. The fees for such additional services will be based on Crowe’s hourly billing rates plus
expenses or as mutually agreed upon between the Client and Crowe.
To facilitate Crowe’s presence at Client’s premises, Client will provide Crowe with internet access while
on Client’s premises. Crowe will access the internet using a secure virtual private network. Crowe will be
responsible for all internet activity performed by its personnel while on Client’s premises. In the event
Client does not provide Crowe with internet access while on Client’s premises, Client will reimburse
Crowe for the cost of internet access through other means while on Client’s site.
MISCELLANEOUS
For purposes of this Miscellaneous section, the Acceptance section below, and all of the Crowe
Engagement Terms, “Client” will mean the entity(ies) defined in the first paragraph of this letter and will
also include all related parents, subsidiaries, and affiliates of Client who may receive or claim reliance
upon any Crowe deliverable.
Crowe will provide the services to Client under this Agreement as an independent contractor and not as
Client’s partner, agent, employee, or joint venturer under this Agreement. Neither Crowe nor Client will
have any right, power or authority to bind the other party.
This engagement letter agreement (the “Agreement”) reflects the entire agreement between the parties
relating to the services (or any reports, deliverables or other work product) covered by this Agreement.
The engagement letter and any attachments (including without limitation the attached Crowe Engagement
Terms) are to be construed as a single document, with the provisions of each section applicable
throughout. This Agreement may not be amended or varied except by a written document signed by each
party. It replaces and supersedes any other proposals, correspondence, agreements and understandings,
whether written or oral, relating to the services covered by this letter, and each party agrees that in
entering this Agreement, it has not relied on any oral or written representations, statements or other
information not contained in or incorporated into this Agreement. Any non-disclosure or other
confidentiality agreement is replaced and superseded by this Agreement. Each party shall remain
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City of Cupertino, California 8 April 12, 2021
obligated to the other party under all provisions of this Agreement that expressly or by their nature extend
beyond and survive the expiration or termination of this Agreement. If any provision (in whole or in part) of
this Agreement is found unenforceable or invalid, this will not affect the remainder of the provision or any
other provisions in this Agreement, all of which will continue in effect as if the stricken portion had not
been included. This Agreement may be executed in two or more actual, scanned, emailed, or
electronically copied counterparts, each and all of which together are one and the same instrument.
Accurate transmitted copies (transmitted copies are reproduced documents that are sent via mail,
delivery, scanning, email, photocopy, facsimile or other process) of the executed Agreement or signature
pages only (whether handwritten or electronic signature), will be considered and accepted by each party
as documents equivalent to original documents and will be deemed valid, binding and enforceable by and
against all parties. This Agreement must be construed, governed, and interpreted under the laws of the
State of Illinois, without regard for choice of law principles.
* * * * *
We are pleased to have this opportunity to serve you, and we look forward to a continuing relationship. If
the terms of this letter and the attached Crowe Engagement Terms are acceptable to you, please sign
below and return one copy of this letter at your earliest convenience. Please contact us with any
questions or concerns.
(Signature Page follows)
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ACCEPTANCE
I have reviewed the arrangements outlined above and in the attached “Crowe Engagement Terms,” and I
accept on behalf of the Client the terms and conditions as stated. By signing below, I represent and
warrant that I am authorized by Client to accept the terms and conditions as stated.
IN WITNESS WHEREOF, Client and Crowe have duly executed this engagement letter effective the date
first written above.
Crowe LLP and the Engagement Authorized Signer below are licensed or otherwise
authorized by the California Board of Accountancy.
City of Cupertino, California Crowe LLP
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AUDIT COMMITTEE OR THOSE CHARGED WITH GOVERNANCE APPROVAL:
The Audit Committee or Those Charged with Governance have reviewed the services and Crowe
Engagement Terms described in this letter and evaluated the services pursuant to the Client’s policies.
After considering all relevant factors, the Audit Committee or Those Charged with Governance hereby
approve hiring Crowe to provide the services described above.
Authorized Representative of the Audit Committee or Those Charged with Governance:
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Date
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April 15, 2021
Katherine V. Lai
Partner
Kristina Alfaro
April 15, 2021
Director of Administrative Services
Deborah Feng
April 15, 2021
City Manager
City of Cupertino, California 10 April 12, 2021
Crowe Engagement Terms
Crowe wants Client to understand the terms under which Crowe provides its services to Client and the
basis under which Crowe determines its fees. These terms are part of the Agreement and apply to all
services described in the Agreement as well as all other services provided to Client (collectively, the
“Services”), unless and until a separate written agreement is executed by the parties for separate
services. Any advice provided by Crowe is not intended to be, and is not, investment advice.
CLIENT’S ASSISTANCE – For Crowe to provide Services effectively and efficiently, Client agrees to
provide Crowe timely with information requested and to make available to Crowe any personnel, systems,
premises, records, or other information as reasonably requested by Crowe to perform the Services.
Access to such personnel and information are key elements for Crowe’s successful completion of
Services and determination of fees. If for any reason this does not occur, a revised fee to reflect
additional time or resources required by Crowe will be mutually agreed. Client agrees Crowe will have no
responsibility for any delays related to a delay in providing such information to Crowe. Such information
will be accurate and complete, and Client will inform Crowe of all significant tax, accounting and financial
reporting matters of which Client is aware.
PROFESSIONAL STANDARDS – As a regulated professional services firm, Crowe must follow
professional standards when applicable, including the Code of Professional Conduct of the American
Institute of Certified Public Accountants (“AICPA”). Thus, if circumstances arise that, in Crowe’s
professional judgment, prevent it from completing the engagement, Crowe retains the right to take any
course of action permitted by professional standards, including declining to express an opinion or issue
other work product or terminating the engagement.
REPORTS – Any information, advice, recommendations or other content of any memoranda, reports,
deliverables, work product, presentations, or other communications Crowe provides under this Agreement
(“Reports”), other than Client’s original information, are for Client’s internal use only, consistent with the
purpose of the Services. Client will not rely on any draft Report. Unless required by an audit or other
attestation professional standard, Crowe will not be required to update any final Report for circumstances
of which we become aware or events occurring after delivery.
CONFIDENTIALITY – Except as otherwise permitted by this Agreement or as agreed in writing, neither
Crowe nor Client may disclose to third parties the contents of this Agreement or any information provided
by or on behalf of the other that ought reasonably to be treated as confidential and/or proprietary. Client
use of any Crowe work product will be limited to its stated purpose and to Client business use only.
However, Client and Crowe each agree that either party may disclose such information to the extent that
it: (i) is or becomes public other than through a breach of this Agreement, (ii) is subsequently received by
the recipient from a third party who, to the recipient's knowledge, owes no obligation of confidentiality to
the disclosing party with respect to that information, (iii) was known to the recipient at the time of
disclosure or is thereafter created independently, (iv) is disclosed as necessary to enforce the recipient's
rights under this Agreement, or (v) must be disclosed under applicable law, regulations, legal process or
professional standards.
THIRD PARTY PROVIDER – Crowe may use third-party providers or engage subcontractors in providing
Services to Client or for internal, administrative, or regulatory compliance purposes. Third-party providers
or subcontractors may include Crowe LLP subsidiaries, Crowe Global member firms, or other third-party
providers or subcontractors, in each case within or outside of the United States (each, a “Crowe
Subcontractor”). Client agrees Crowe may share Client confidential information with Crowe
Subcontractors. If Crowe uses a Crowe Subcontractor, Crowe will be solely responsible for the provision
of Services (including those provided by Crowe Subcontractors) and for the protection of Client’s
confidential information. The limitations on Client’s remedies vis-à-vis Crowe, in this Agreement will also
apply to any Crowe Subcontractors. Client will bring any claim for a violation of the obligations in this
Agreement only against Crowe, and Crowe Subcontractors will have no liability or obligations to Client
arising out of this Agreement.
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CLIENT-REQUIRED CLOUD USAGE – If Client requests that Crowe access files, documents or other
information in a cloud-based or web-accessed hosting service or other third-party system accessed via the
internet, including, without limitation iCloud, Dropbox, Google Docs, Google Drive, a data room hosted by
a third party, or a similar service or website (collectively, “Cloud Storage”), Client will confirm with any third
parties assisting with or hosting the Cloud Storage that either such third party or Client (and not Crowe) is
responsible for complying with all applicable laws relating to the Cloud Storage and any information
contained in the Cloud Storage, providing Crowe access to the information in the Cloud Storage, and
protecting the information in the Cloud Storage from any unauthorized access, including without limitation
unauthorized access to the information when in transit to or from the Cloud Storage. Client represents that
it has authority to provide Crowe access to information in the Cloud Storage and that providing Crowe with
such access complies with all applicable laws, regulations, and duties owed to third parties.
DATA PROTECTION – If Crowe holds or uses Client information that can be linked to specific individuals
who are Client’s customers ("Personal Data"), Crowe will treat it as confidential and comply with
applicable US state and federal law and professional regulations (including, for financial institution clients,
the objectives of the Interagency Guidelines Establishing Information Security Standards) in disclosing or
using such information to carry out the Services. The parties acknowledge and understand that while
Crowe is a service provider as defined by the California Consumer Privacy Act of 2018 and processes
Client information pursuant to this Agreement, Crowe retains its independence as required by applicable
law and professional standards for purposes of providing attest services and other services. Crowe will
not (1) sell Personal Data to a third party, or (2) retain, use or disclose Personal Data for any purpose
other than for (a) performing the Services and its obligations on this Agreement, (b) as otherwise set forth
in this Agreement, (c) to detect security incidents and protect against fraud or illegal activity, (d) to
enhance and develop our products and services, including through machine learning and other similar
methods and (e) as necessary to comply with applicable law or professional standards. Crowe has
implemented and will maintain physical, electronic and procedural safeguards reasonably designed to (i)
protect the security, confidentiality and integrity of the Personal Data, (ii) prevent unauthorized access to
or use of the Personal Data, and (iii) provide proper disposal of the Personal Data (collectively, the
“Safeguards”). Client represents (i) that it has the authority to provide the Personal Data to Crowe in
connection with the Services, (ii) that Client has processed and provided the Personal Data to Crowe in
accordance with applicable law, and (iii) will limit the Personal Data provided to Crowe to Personal Data
necessary to perform the Services. To provide the Services, Client may also need to provide Crowe with
access to Personal Data consisting of protected health information, financial account numbers, Social
Security or other government-issued identification numbers, or other data that, if disclosed without
authorization, would trigger notification requirements under applicable law ("Restricted Personal Data"). In
the event Client provides Crowe access to Restricted Personal Data, Client will consult with Crowe on
appropriate measures (consistent with legal requirements and professional standards applicable to
Crowe) to protect the Restricted Personal Data, such as: deleting or masking unnecessary information
before making it available to Crowe, using encryption when transferring it to Crowe, or providing it to
Crowe only during on-site review on Client’s site. Client will provide Crowe with Restricted Personal Data
only in accordance with mutually agreed protective measures. Otherwise, Client and Crowe agree each
may use unencrypted electronic media to correspond or transmit information and such use will not in itself
constitute a breach of any confidentiality obligations under this Agreement. Crowe will reasonably
cooperate with Client in responding to or addressing any request from a consumer or data subject, a data
privacy authority with jurisdiction, or the Client, as necessary to enable Client to comply with its
obligations under applicable data protection laws and to the extent related to Personal Data. Client will
reimburse Crowe for any out-of-pocket expenses and professional time (at Crowe’s then-current hourly
rates) incurred in connection with providing such cooperation. Client will provide prompt written notice to
Crowe (with sufficient detailed instructions) of any request or other act that is required to be performed by
Crowe. As appropriate, Crowe will promptly delete or procure the deletion of the Personal Data, after the
cessation of any Services involving the processing of Client’s Personal Data, or otherwise aggregate or
de-identify the Personal Data in such a way as to reasonably prevent reidentification. Notwithstanding the
forgoing, Crowe may retain a copy of the Personal Data as permitted by applicable law or professional
standards, provided that such Personal Data remain subject to the terms of this Agreement. If Crowe
uses a third-party provider, Crowe will include terms substantially similar to those set forth in this Data
Protection Paragraph in an agreement with such provider.
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City of Cupertino, California 12 April 12, 2021
GENERAL DATA PROTECTION REGULATION COMPLIANCE – If and to the extent that Client provides
personal data to Crowe subject to the European Union General Data Protection Regulation (“GDPR”),
then in addition to the requirements of the above Data Protection section, this section will apply to such
personal data (“EU Personal Data”). The parties agree that for purposes of processing the EU Personal
Data, (a) Client will be the “Data Controller” as defined by the GDPR, meaning the organization that
determines the purposes and means of processing the EU Personal Data; (b) Crowe will be the “Data
Processor” as defined by GDPR, meaning the organization that processes the EU Personal Data on
behalf of and under the instructions of the Data Controller; or (c) the parties will be classified as otherwise
designated by a supervisory authority with jurisdiction. Client and Crowe each agree to comply with the
GDPR requirements applicable to its respective role. Crowe has implemented and will maintain technical
and organizational security safeguards reasonably designed to protect the security, confidentiality and
integrity of the EU Personal Data. Client represents it has secured all required rights and authority,
including consents and notices, to provide such EU Personal Data to Crowe, including without limitation
authority to transfer such EU Personal Data to the U.S. or other applicable Country or otherwise make the
EU Personal Data available to Crowe, for the duration of and purpose of Crowe providing the Services.
The types of EU Personal Data to be processed include name, contact information, title, and other EU
Personal Data that is transferred to Crowe in connection with the Services. The EU Personal Data relates
to the data subject categories of individuals connected to Client, Client customers, Client vendors, and
Client affiliates or subsidiaries (“Data Subjects”). Crowe will process the EU Personal Data for the
following purpose: (x) to provide the Services in accordance with this Agreement, (y) to comply with other
documented reasonable instructions provided by Client, and (z) to comply with applicable law. In the
event of a Crowe breach incident in connection with EU Personal Data in the custody or control of Crowe,
Crowe will promptly notify Client upon knowledge that a breach incident has occurred. Client has
instructed Crowe not to contact any Data Subjects directly, unless required by applicable law. In the event
that a supervisory authority with jurisdiction makes the determination that Crowe is a data controller,
Client will reasonably cooperate with Crowe to enable Crowe to comply with its obligations under GDPR.
INTELLECTUAL PROPERTY - Any Deliverables, Works, Inventions, working papers, or other work
product conceived, made or created by Crowe in rendering the Services under this Agreement (“Work
Product”), and all intellectual property rights in such Work Product will be owned exclusively by Crowe.
Further, Crowe will retain exclusive ownership or control of all intellectual property rights in any ideas,
concepts, methodologies, data, software, designs, utilities, tools, models, techniques, systems, Reports,
or other know-how that it develops, owns or licenses in connection with this Agreement ("Materials"). The
foregoing ownership will be without any duty of accounting.
DATA USAGE AND AGGREGATIONS - Client hereby acknowledges and agrees that Crowe may, in its
discretion, use any Client information or data provided to Crowe to improve Crowe services and Materials,
including without limitation developing new Crowe services and software or other products. Client also
agrees that Crowe may, in its discretion, aggregate Client content and data with content and data from
other clients, other sources, or third parties (“Data Aggregations”) for purposes including, without
limitation, product and service development, commercialization, industry benchmarking, or quality
improvement initiatives. Prior to, and as a precondition for, disclosing Data Aggregations to other Crowe
customers or prospects, Crowe will anonymize any Client data or information in a manner sufficient to
prevent such other customer or prospect from identifying Client or individuals who are Client
customers. All Data Aggregations will be the sole and exclusive property of Crowe.
LEGAL AND REGULATORY CHANGE – Crowe may periodically communicate to Client changes in laws,
rules or regulations. However, Client has not engaged Crowe, and Crowe does not undertake an
obligation, to advise Client of changes in (a) laws, rules, regulations, industry or market conditions, or (b)
Client’s own business practices or other circumstances (except to the extent required by professional
standards). The scope of Services and the fees for Services are based on current laws and regulations. If
changes in laws or regulations change Client’s requirements or the scope of the Services, Crowe’s fees
will be modified to a mutually agreed amount to reflect the changed level of Crowe’s effort.
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City of Cupertino, California 13 April 12, 2021
PUBLICATION – Client agrees to obtain Crowe’s specific permission before using any Report or Crowe
work product or Crowe’s firm’s name in a published document, and Client agrees to submit to Crowe
copies of such documents to obtain Crowe’s permission before they are filed or published.
CLIENT REFERENCE – From time to time Crowe is requested by prospective clients to provide
references for Crowe service offerings. Client agrees that Crowe may use Client’s name and generally
describe the nature of Crowe’s engagement(s) with Client in marketing to prospects, and Crowe may also
provide prospects with contact information for Client personnel familiar with Crowe’s Services.
NO PUNITIVE OR CONSEQUENTIAL DAMAGES – Any liability of Crowe will not include any
consequential, special, incidental, indirect, punitive, or exemplary damages or loss, nor any lost profits,
goodwill, savings, or business opportunity, even if Crowe had reason to know of the possibility of such
damages.
LIMIT OF LIABILITY – Except where it is judicially determined that Crowe performed its Services with
recklessness or willful misconduct, Crowe’s liability will not exceed fees paid by Client to Crowe for the
portion of the work giving rise to liability. A claim for a return of fees paid is the exclusive remedy for any
damages. This limit of liability will apply to the full extent allowed by law, regardless of the grounds or
nature of any claim asserted, including, without limitation, to claims based on principles of contract,
negligence or other tort, fiduciary duty, warranty, indemnity, statute or common law. This limit of liability
will also apply after this Agreement.
INDEMNIFICATION FOR THIRD‑PARTY CLAIMS – In the event of a legal proceeding or other claim
brought against Crowe by a third party, except where it is judicially determined that Crowe performed
Services with recklessness or willful misconduct, Client agrees to indemnify and hold harmless Crowe
and its personnel against all costs, fees, expenses, damages and liabilities, including attorney fees and
any other fees or defense costs, associated with such third‑party claim, relating to or arising from any
Services performed or work product provided by Crowe that Client uses or discloses to others or this
engagement generally. This indemnification is intended to apply to the full extent allowed by law,
regardless of the grounds or nature of any claim, liability, or damages asserted, including, without
limitation, to claims, liability or damages based on principles of contract, negligence or other tort, fiduciary
duty, warranty, indemnity, statute or common law. This indemnification will also apply after termination of
this Agreement.
NO TRANSFER OR ASSIGNMENT OF CLAIMS – No claim against Crowe, or any recovery from or
against Crowe, may be sold, assigned or otherwise transferred, in whole or in part.
TIME LIMIT ON CLAIMS – In no event will any action against Crowe, arising from or relating to this
engagement letter or the Services provided by Crowe relating to this engagement, be brought after the
earlier of 1) two (2) years after the date on which occurred the act or omission alleged to have been the
cause of the injury alleged; or 2) the expiration of the applicable statute of limitations or repose.
RESPONSE TO LEGAL PROCESS – If Crowe is requested by subpoena, request for information, or
through some other legal process to produce documents or testimony pertaining to Client or Crowe’s
Services, and Crowe is not named as a party in the applicable proceeding, then Client will reimburse
Crowe for its professional time, plus out-of-pocket expenses, as well as reasonable attorney fees, Crowe
incurs in responding to such request.
MEDIATION – If a dispute arises, in whole or in part, out of or related to this engagement, or after the
date of this agreement, between Client or any of Client’s affiliates or principals and Crowe, and if the
dispute cannot be settled through negotiation, Client and Crowe agree first to try, in good faith, to settle
the dispute by mediation administered by the American Arbitration Association, under its mediation rules
for professional accounting and related services disputes, before resorting to litigation or any other
dispute-resolution procedure. The results of mediation will be binding only upon agreement of each party
to be bound. Costs of any mediation will be shared equally by both parties. Any mediation will be held in
Chicago, Illinois.
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City of Cupertino, California 14 April 12, 2021
JURY TRIAL WAIVER – FOR ALL DISPUTES RELATING TO OR ARISING BETWEEN THE PARTIES,
THE PARTIES AGREE TO WAIVE A TRIAL BY JURY TO FACILITATE JUDICIAL RESOLUTION AND
TO SAVE TIME AND EXPENSE. EACH PARTY AGREES IT HAS HAD THE OPPORTUNITY TO HAVE
ITS LEGAL COUNSEL REVIEW THIS WAIVER. THIS WAIVER IS IRREVOCABLE, MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND APPLIES TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS WRITTEN CONSENT TO A BENCH TRIAL WITHOUT A JURY.
HOWEVER, AND NOTWITHSTANDING THE FOREGOING, IF ANY COURT RULES OR FINDS THIS
JURY TRIAL WAIVER TO BE UNENFORCEABLE AND INEFFECTIVE IN WAIVING A JURY, THEN
ANY DISPUTE RELATING TO OR ARISING FROM THIS ENGAGEMENT OR THE PARTIES’
RELATIONSHIP GENERALLY WILL BE RESOLVED BY ARBITRATION AS SET FORTH IN THE
PARAGRAPH BELOW REGARDING “ARBITRATION.”
ARBITRATION – If any court rules or finds that the JURY TRIAL WAIVER section is not enforceable, then
any dispute between the parties relating to or arising from this Agreement or the parties’ relationship
generally will be settled by binding arbitration in Chicago, Illinois (or a location agreed in writing by the
parties). Any issues concerning the extent to which any dispute is subject to arbitration, or concerning the
applicability, interpretation, or enforceability of any of this Section, will be governed by the Federal
Arbitration Act and resolved by the arbitrator(s). The arbitration will be governed by the Federal Arbitration
Act and resolved by the arbitrator(s). Regardless of the amount in controversy, the arbitration will be
administered by JAMS, Inc. (“JAMS”), pursuant to its Streamlined Arbitration Rules & Procedures or such
other rules or procedures as the parties may agree in writing. In the event of a conflict between those
rules and this Agreement, this Agreement will control. The parties may alter each of these rules by written
agreement. If a party has a basis for injunctive relief, this paragraph will not preclude a party seeking and
obtaining injunctive relief in a court of proper jurisdiction. The parties will agree within a reasonable period
of time after notice is made of initiating the arbitration process whether to use one or three arbitrators, and
if the parties cannot agree within fifteen (15) business days, the parties will use a single arbitrator. In any
event the arbitrator(s) must be retired federal judges or attorneys with at least 15 years commercial law
experience and no arbitrator may be appointed unless he or she has agreed to these procedures. If the
parties cannot agree upon arbitrator(s) within an additional fifteen (15) business days, the arbitrator(s) will
be selected by JAMS. Discovery will be permitted only as authorized by the arbitrator(s), and as a rule,
the arbitrator(s) will not permit discovery except upon a showing of substantial need by a party. To the
extent the arbitrator(s) permit discovery as to liability, the arbitrator(s) will also permit discovery as to
causation, reliance, and damages. The arbitrator(s) will not permit a party to take more than six
depositions, and no depositions may exceed five hours. The arbitrator(s) will have no power to make an
award inconsistent with this Agreement. The arbitrator(s) will rule on a summary basis where possible,
including without limitation on a motion to dismiss basis or on a summary judgment basis. The
arbitrator(s) may enter such prehearing orders as may be appropriate to ensure a fair hearing. The
hearing will be held within one year of the initiation of arbitration, or less, and the hearing must be held on
continuous business days until concluded. The hearing must be concluded within ten (10) business days
absent written agreement by the parties to the contrary. The time limits in this section are not
jurisdictional. The arbitrator(s) will apply substantive law and may award injunctive relief or any other
remedy available from a judge. The arbitrator(s) may award attorney fees and costs to the prevailing
party, and in the event of a split or partial award, the arbitrator(s) may award costs or attorney fees in an
equitable manner. Any award by the arbitrator(s) will be accompanied by a reasoned opinion describing
the basis of the award. Any prior agreement regarding arbitration entered by the parties is replaced and
superseded by this agreement. The arbitration will be governed by the Federal Arbitration Act, 9 U.S.C.
§§ 1 et seq., and judgment upon the award rendered by the arbitrator(s) may be entered by any court
having jurisdiction thereof. All aspects of the arbitration will be treated by the parties and the arbitrator(s)
as confidential.
NOTIFICATION OF NON-LICENSEE OWNERSHIP (For California Engagements) – Crowe (“the Firm”)
and certain owners of the Firm are licensed by the California State Board of Accountancy. However, the
Firm has owners not licensed by the California State Board of Accountancy who may provide Services
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City of Cupertino, California 15 April 12, 2021
under this agreement. If Client has any questions regarding licensure of the personnel performing
Services under this engagement, please do not hesitate to contact Crowe.
NON‑SOLICITATION – Each party acknowledges that it has invested substantially in recruiting, training
and developing the personnel who render services with respect to the material aspects of the
engagement (“Key Personnel”). The parties acknowledge that Key Personnel have knowledge of trade
secrets or confidential information of their employers that may be of substantial benefit to the other party.
The parties acknowledge that each business would be materially harmed if the other party was able to
directly employ Key Personnel. Therefore, the parties agree that during the period of this Agreement and
for one (1) year after its expiration or termination, neither party will solicit Key Personnel of the other party
for employment or hire the Key Personnel of the other party without that party’s written consent unless
hiring or engaging party pays to the other party a fee equal to the hired or engaged Key Personnel’s
compensation for the prior twelve-month period with the other party.
CROWE AND EQUAL OPPORTUNITY – Crowe abides by the principles of equal employment
opportunity, including without limitation the requirements of 41 CFR 60-741.5(a) and 41 CFR 60-300.5(a).
These regulations prohibit discrimination against qualified individuals based on their status as protected
veterans or individuals with disabilities, and prohibit discrimination against all individuals based on their
race, color, religion, sex, or national origin. Moreover, these regulations require that covered prime
contractors and subcontractors take affirmative action to employ and advance in employment individuals
without regard to race, color, religion, sex, national origin, protected veteran status or disability. Crowe
also abides by 29 CFR Part 471, Appendix A to Subpart A. The parties agree that the notice in this
paragraph does not create any enforceable rights for any firm, organization, or individual.
CROWE GLOBAL NETWORK – Crowe LLP and its subsidiaries are independent members of Crowe
Global, a Swiss organization. “Crowe” is the brand used by the Crowe Global network and its member
firms, but it is not a worldwide partnership. Crowe Global and each of its members are separate and
independent legal entities and do not obligate each other. Crowe LLP and its subsidiaries are not
responsible or liable for any acts or omissions of Crowe Global or any other Crowe Global members, and
Crowe LLP and its subsidiaries specifically disclaim any and all responsibility or liability for acts or
omissions of Crowe Global or any other Crowe Global member. Crowe Global does not render any
professional services and does not have an ownership or partnership interest in Crowe LLP or any other
member. Crowe Global and its other members are not responsible or liable for any acts or omissions of
Crowe LLP and its subsidiaries and specifically disclaim any and all responsibility or liability for acts or
omissions of Crowe LLP and its subsidiaries. Visit www.crowe.com/disclosure for more information about
Crowe LLP, its subsidiaries, and Crowe Global.
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City of Cupertino, California 16 April 12, 2021
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City of Cupertino, California 17 April 12, 2021
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