Financial_Auditing_QA_Final.pdf

California State Lottery

Request for Proposal (RFP) #R005840 Financial Auditing and Related Services Questions and Answers

October 9, 2026

To All Prospective Bidders:

Below are written questions received and the corresponding responses relating to the above referenced Request for Proposal (all references to agencies or personal names have been removed):

Question 1: RFP section II.A. notes “Proposers must not alter the Lottery’s mandatory submittals. Any change made to the forms, including but not limited to exceptions, deletions, and additions, may be the basis for disqualification of a Proposers proposal.”

Please clarify how to respond to forms requirements if space provided is not enough for our response. Is it permissible to edit the forms in MS Word and insert our response, or should we respond in the allotted space and attach additional pages for the remainder of our response?

Answer 1: Yes, it is permissible for vendors to edit the forms in MS Word and insert responses, but original text shall not be modified.

Question 2: RFP sections II.A.3. and 4. note “Proposers must submit an audit plan, in PDF format…”. Please clarify if any of the 14 mandatory submittals from RFP section II.A.

are to be submitted separately as individual files, or if all 14 mandatory submittals are to be submitted in one file.

Answer 2: The Lottery prefers mandatory documents be submitted as individual files, though vendors may combine them if necessary.

Question 3: Are there any plans to replace the Epicor 10 (E10) accounting system currently used for accounting / financial reporting during the period from (FY 2027 – FY 2031)?

Answer 3: The Lottery is continuously evaluating its options for an alternative accounting system, which may be implemented during the referenced time period.

Data Classification: Sensitive

Question 4: Can the Lottery provide a copy of the most recent AUP reports issued certifying that the Lottery has met reporting requirements for Party Lotteries under the Mega Millions and Powerball agreements?

Answer 4: The most recent AUP reports (2025-26) for Mega Millions and Powerball will be posted as separate attachments on the solicitation posting.

Question 5: Can the Lottery share the auditor’s required communications letter to the governing body for FY 2025?

Answer 5: There have not been any required communications letter presented to the governing body (Lottery Commission) for FY 2025 or previous years as there have been no findings.

Question 6: Does the Lottery expect to require the external auditor’s assistance in preparing the ACFR? If so, please elaborate on what assistance would be needed.

Answer 6: No, the Lottery prepares the ACFR. However, we request feedback or recommendations as needed to implement new GASB pronouncements or any GFOA requirements related to the ACFR each year.

Question 7: Page 10 of the RFP (page 14 of the PDF) states, "The required forms are separate documents included with this solicitation." Can the California State Lottery clarify if it prefers proposal responses to be composed of separate PDF files for the 14 (if applicable) stated items? Or would the Lottery prefer a single PDF file of all 14 (if applicable) listed items?

Answer 7: See Answer 2.

Question 8: Page 22 of the RFP (page 26 of the PDF) states, "Proposers’ proposal responses are to be structured in the same format as the RFP, with the same heading, numbering, and bullet format for all sections and subsections, using at least 12-point Arial font, consecutively numbered, and sections clearly marked or labeled." Can the Lottery clarify if proposers are allowed to use their standard proposal response template, as long as the heading structure and numbering/bullet format emulates the RFP and a 12-point Arial font is used?

Answer 8: Yes, proposers may use their standard proposal response template as long as the heading structure and numbering/bullet format emulates the RFP, and a 12-point Arial font is used.

Question 9: Page 22 of the RFP (page 26 of the PDF) states, "Proposers’ proposal responses are to be structured in the same format as the RFP, with the same heading, numbering, and bullet format for all sections and subsections, using at least 12-point Arial font, consecutively numbered, and sections clearly marked or labeled." Can the Lottery clarify if text in graphics, tables, exhibits, and legal fine print is exempted from the 12-point Arial font requirement?

Data Classification: Sensitive

Answer 9: Yes, text in graphics, tables, exhibits and legal fine print may be exempt from the 12-point Arial font requirement.

Question 10: Historically, by what date has the audit been completed?

Answer 10: The Lottery’s fiscal year end is June 30. Audits are usually completed from early to mid-November. The Lottery’s final audited financial statements are due to the State Controller’s Office by the end of November every year.

Question 11: Has audit work historically been performed remotely or onsite?

Answer 11: Audit work in the current contract has been performed remotely.

Question 12: Is the accounting function performed internally, or has it been outsourced to a third party?

Answer 12: All accounting functions are performed internally using the Epicor 10 accounting software.

Question 13: To what extent, if any, have the auditors been involved in the preparation of the financial statements?

Answer 13: The auditors have helped implement new GASB pronouncements in our financial statements. Beyond that, their involvement in preparing the statements has been minimal. However, they provide feedback and recommendations about when changes are needed after reviewing the statements before finalization.

Question 14: How many adjusting entries were noted in the previous two audits?

Answer 14: No adjusting entries were noted by the auditors in the previous two audits.

Question 15: Have there been any significant changes or turnover in management personnel?

Answer 15: The Financial Accounting & Reporting team has experienced minimal staff turnover and only one manager has retired over the past five years.

Question 16: What were the prior-year audit fees?

Answer 16: The prior-year audit has not concluded, however, $186,500.00 was the maximum amount payable for Annual Financial Statement Audit Services and Agreed Upon Procedure Engagements for Mega Millions and Powerball.