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Financial Audit Services RFP # 13-FIN-24-M-01THE CITY OF SCHERTZ TEXAS REQUEST FOR PROPOSAL (RFP) for FINANCIAL AUDIT SERVICES #13- FIN- 24 -M -01 \O�tt'O RATF•9 ,j June14, 2013 SSCHIE RTZ COMMUNITY + SERVICE;, OPPORTUNITY 1400 SCHERTZ PARKWAY, SCHERTZ, TEXAS 78154 CITY OF SCHERTZ INVITATION TO BID The City of Schertz (the "City ") is accepting sealed proposals for "FINANCIAL AUDIT SERVICES % Sealed proposals should be received by the Purchasing Director of the City located at 10 Commercial Place, Building #1, Schertz, Texas 78154 by 10:00 a.m. (CT) on July 11, 2013 via hand delivery. * *No fax or E -mail bids will be accepted. Sealed Proposals must be submitted with one (1) original and eight (8) copies, and one (1) electronic (CD or USB) copy, and be clearly marked in a sealed envelope as "FINANCIAL AUDIT SERVICES. #13- FIN- 24- M -01." Proposals submitted after the aforementioned date and time will not be accepted. A Pre - Submittal conference will be held on Tuesday July 2, 2013 at 10:00 AM (CT) in the City of Schertz Admin. Conference Room, located at 1400 Schertz Parkway, Bldg. #2, Schertz Tx. 78154. Questions in reference to Request for Proposal procedures may be directed to the Purchasing Department, 210- 619 -1160, questions in reference to the technical aspects of the proposal may be directed to Juan Santoya, Finance Director at 210 -619 -1141. All documents, including Addendums to this proposal, will be placed on the City's website at www.schertz.com /Purchasing, Open Bids. The City reserves the right to reject any or all proposals and to select the response deemed in the best interest of the City from among those received. Invitation to Bidders Iv -I 11171.1;94 The City of Schertz is soliciting proposals from qualified firms of certified public accountants to audit the City of Schertz's financial statements and preparation of the Comprehensive Annual Financial Report (CAFR) for three (3) continuous fiscal year(s) ending September 30, 2013, September 30, 2014 and September 30, 2015 with the option of auditing the City of Schertz's financial statements for the two (2) additional fiscal years. Your proposal should contain, but not be limited to the following considerations: 1. Eligibility — licensed by the Texas State Board of Public Accountancy to conduct audits. 2. Experience — minimum of 10 years municipal audit experience of cities of similar size and complexity in relation to the City of Schertz; and include experience with single audit of state and federal grants 3. A list of similar local governments or pertinent accounts served by your firm. 4. Your staff assignments and availability to complete the audit on a timely basis. • Participation of senior audit personnel assigned to the engagement. • Frequency of contact with fiscal personnel. • Availability of staff to respond to questions within the scope of the engagement and the hourly charge, if any, for services outside the scope of the audit. 5. Audit firm staff stability history - what assurances can you provide the City of Schertz regarding the assignment of your permanent personnel to the engagement. 6. Describe capability to audit computerized accounts receivable systems and to audit during the development of a completely computerized bookkeeping system. Describe the experience of the assigned audit staff with INCODE financial software. 7. Procedures used for proposed audit adjusting journal entries with reasons and management recommendations to the Finance Director. 8. Detailed audit plan with a list of all schedules to be prepared by City staff. 9. Your fee proposal to conduct the basic audit function, along with your fee schedule for additional services that may be required beyond the scope of the audit engagement. This is considered an all- inclusive, not -to- exceed fee estimate. The City shall agree to make interim payments of the annual fee based on percentage of work performed. The proposal should also state that any increase in the audit fee will be immediately disclosed to the City of Schertz City Manager through the Finance Director. This disclosure should include an estimation of the increased fees and the reason for the increase. Proposers may be asked to provide additional services. Examples of such services include additional audits or reviews, cost studies, and consulting services. Proposers must use the following standard format for their proposed fees: Year 1 $ Year 2 $ Year 3 $ Year 4 Option $ Year 5 Option $ 10. Estimated number of hours to complete the audit by classification of your employees, i.e. partners, senior, junior. 11. Detail of expenses expected to be incurred, i.e. mileage, Per Diem, telephone, etc. 12. Audit firm to produce statements and to print annual report. 13. Proof that the firm is certified to conduct municipal audits by the State of Texas. A copy of the most recent comprehensive annual financial report and the current City budget can be viewed on the City's website at www.schertz.com The final decision of the selection of the firm to conduct the audit will be made by the City Council. The final agreement will be in the form of a written contract following the standard agreement form used by the selected Certified Public Accountant (CPA) firm. All questions and correspondence should be directed to Rita Duprat -Waldo in writing no later than July 2, 2013, at 10 Commercial Place, Building #1, Schertz, TX 78154, or by email at RDuprat- Waldo( rDschertz.com. Contact with City of Schertz personnel other than Rita Duprat -Waldo or Juan Santoya regarding this RFP may be grounds for elimination from the selection process. II. Audit Proposal Information Sealed audit proposals will be accepted by the Purchasing & Asset Management Department at the City of Schertz until 10:00 a.m., on Thursday, July 11 20, 2013. Please direct proposals to the attention of Purchasing and Asset Management. All proposals become the property of the City of Schertz. Late proposals will be returned unopened. All proposals will become part of the requester's files without obligation. RFP's shall be submitted in sealed envelopes as referenced on the attached solicitation. Eight (8) complete sets and (1) CD of the response are to be submitted. (One (1) original marked "ORIGINAL," and eight (8) copies marked "COPY 1, COPY 2, etc. etc..." of their response, complete with all supporting documentation.) RFP's submitted by facsimile (fax) or electronically WILL NOT be accepted. Submittal of a response to this Request for Proposal (RFP) constitutes an offer by the respondent. Once submitted, RFP's become the property of the City of Schertz and as such the City reserves the right to 0 use any ideas contained in any Proposal regardless of whether that respondent/firm is selected. Submission of a Proposal in response to this solicitation, by any respondent, shall indicate that the respondent(s) has accepted the conditions contained in the RFP, unless clearly and specifically noted in the RFP submitted and confirmed in the contract between the City and the successful respondent. RFP's which do not comply with these requirements may be rejected at the option of the City. RFP's must be filed with the City of Schertz before the deadline day and hour. No late RFP's will be accepted. They will be returned to respondent unopened (if properly identified). Failure to meet RFP requirements may be grounds for declaring your response invalid. III. Scope of Services Required: 1. Audit period will be from October 1, 2012 through September 30, 2013. (One fiscal year) 2. Scope of Work to Be Performed: The auditor is required to express an opinion on the fair presentation of its general - purpose financial statements in conformity with generally accepted accounting principles. The auditor is required to audit the general purpose financial statements, consisting of the combined statements for all fund types and account groups. However, the auditor is to provide an "in- relation -to" statement on the combining and individual fund financial statements and supplementary schedules based on the auditing procedures applied during the audit of the general purpose financial statements. The auditor is not required to audit the statistical section of the report; this section will remain unaudited but should be reviewed. The auditor shall also be responsible for performing certain limited procedures involving required supplementary information required by the Governmental Accounting Standards Board as mandated by generally accepted auditing standards. The auditor is required to audit the information contained in the schedule of federal financial assistance. This information should be subjected to the auditing procedures applied in the audit of the general purpose financial statements and in accordance to Governmental Auditing Standards, the Single Audit Act as amended in 1996, and (OMB) Circular A -133. The auditor is to provide an opinion of the fair presentation of this schedule in relation to the general purpose financial statements taken as a whole. The scope of the City's annual audit, (or of any other work for which the Proposer is Engaged), can only be broadened with the express written consent of the City. The City will have the right to negotiate fees for work related to broadening the scope of any work for which the Proposer is engaged. 0 3. Reports to Be Issued: Following the completion of the audit of the fiscal year's financial statements, the auditor shall issue the Comprehensive Annual Financial Report and all reports currently required by State and Federal grantors and by such as the American Institute of Certified Public Accountants, the Governmental Accounting Standards Board, the Government Finance Officers Association of the United States and Canada, and any other regulatory agencies. The auditor shall likewise issue any other reports subsequently required by these or similar entities following completion of the financial or single audit. The schedule of federal financial assistance and related auditor's reports, as well as the reports on the internal control structure and compliance are not to be included in the CAFR, but are to be issued separately. In the required reports on internal controls, the auditor shall communicate any reportable conditions found during the audit to the Finance Director. A reportable condition shall be defined as a significant deficiency in the design or operation of the internal control structure, which could adversely affect the organization's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. Reportable conditions that are also material weaknesses shall be identified as such in the report. Non - reportable conditions discovered by the auditors shall be reported in a separate letter to management, which shall be referred to in the reports on internal controls. The report on compliance shall include all instances of noncompliance. Auditors shall be required to make an immediate, written report of all irregularities and illegal acts or indications of which they become aware to the City Manager and Finance Director. 4. Preparation of Comprehensive Annual Financial Report (CAFR) The auditor's staff also prepares all information included in the Comprehensive Annual Financial Report (CAFR). The auditor reviews this information with City management prior to printing and will provide the City with an electronic copy and up to 25 printed copies of the CAFR. Because the CAFR must be released within six months after the fiscal year end (March 31) to be eligible for the GFOA Certificate of Achievement, coordination of schedules with the Finance Director will be essential for completing the CAFR before February 28th of each year. A listing of the year end close schedule is as follows: TENTATIVE DATES ACTIVITY OR DESCRIPTION September 30, 2013 Fiscal year ends September 30 to October 18, Preliminary planning meetings and audit plan 6 2013 development November 22, 2013 Interim Audit Fieldwork and prepare year end close December 2, 2013 Year -end system - generated reports available. Staff prepares trial balances and schedules. December 9, 2013 Auditors begin on -site field work January 15, 2014 All audit fieldwork should be virtually completed and auditors should withdraw from the field January 15, 2014 CAFR returned to Finance Director's Office for review. Draft management letter and single audit report due. January 23, 2014 Meeting with City Manager and Executive Directors February 11, 2014 Meeting with Audit Committee February 11, 2014 Meeting with SEDC Executive Director February 25, 2014 Audit reports and CAFR presented to Council February 27, 2014 Audit report presented to SEDC Board March 2014 Assist the Finance Director in submitting response to GFOA 5. Supplementary Audit Reports The auditor will issue supplementary audit reports for use by the governing bodies of discretely presented component units that are part of the main audit. Entities include, but are not restricted to the following: • Schertz Economic Development Corporation 6. Meetings required prior to submission of the completed audit and comprehensive annual financial report with: • Finance Director and his staff • City Manager and Executive Directors • Schertz Economic Development Executive Director • Audit Committee Presentations required after completion of the Audit and Comprehensive Annual Financial Report to: City Council Schertz Economic Development Board 7. Description of Entity and Records to be audited: • The financial reporting entity includes all the funds and account groups of the primary government. The City has the following component units: Schertz Economic Development Corporation The Library Advisory Board • Parks & Recreation Foundation General ledger, general journal, subsidiary records, fixed assets, accounts receivable, accounts payable, cash collections, investments, investment reports, bank reconciliations, payroll, accrual schedules, TMRS and payroll reports, revenues, expenses, and related financial records 8. Available Manuals and Information Sources: • Minutes of City Council meetings • Minutes of the Schertz Economic Development Board • Ordinances • Agreements • Accounting function work description of General Ledger • By -laws. Details of fixed assets are maintained. Fixed assets are based on cost when available otherwise on estimates authorized by the Finance Director. 10. A budget is maintained and is available for examination 11. Staff members will be available to pull and reproduce documents. Legal counsel will be made available with prior staff approval. 12. Work areas will be provided by the City of Schertz in close proximity with the financial records on the premises. 13. Report Requirements: The report will be addressed to the Mayor and City Council of the City of Schertz. State the scope of the examination and that the audit was performed with generally accepted accounting principles and include a statement of opinion as to whether the statements conform to generally accepted accounting principles. Reports of compliance examinations must include a statement that the audit was conducted in accordance with applicable standards. The audit report must state where the examination disclosed instances of significant non - compliance with laws and generally accepted accounting principles. Findings of non - compliance and ineligible expenditures must be presented in enough detail for management to be able to understand them. A management letter will be required. It should contain a statement of audit findings and recommendations affecting financial systems and statements, internal control, legality of actions, other instances of non - compliance with laws and generally accepted accounting principles, and any other material matters. 14. Time Requirements • Proposals will be delivered to the Purchasing Department office at 10 Commercial Place, Building #1 not later than10:00 a.m. on July 11, 2013. • If presentations of possible finalists are necessary, no one with personal bias will interview proposers. • The Schertz City Council has not made a decision as to the date of the award of the audit. All proposers will be notified of the City Council action date in a timely manner through the website at www.Schertz.com /Purchasinq, Open Bids. • Once a contract has been signed, preparatory work may begin immediately to generate the audit in a progressive manner with costs to be billed to the City of Schertz as the charges generated by the proposer in accordance with the original agreement. • Trial Balances will be prepared by City staff by December 1 and sent to the auditors in excel format. • The completed financial report and presentation to city council will be made prior to February 28 th . 15. Report Review Timing and Number of Copies. • Prior to the submission of the completed audit report the audit firm will be required to deliver and review the draft and the proposed management letter with the City of Schertz Management Staff. • Original or Copies required: - Comprehensive Annual Financial Report, 25 bound copies, 1 electronic copy 16. Working Papers The firm selected shall maintain all working papers for a period of at least five years after the fiscal year end. The auditor shall make available all original working papers for examination by authorized representatives of Federal and State agencies, the City's Finance Director, and any other entity to which access has been granted in writing by the City's Finance Director. Before the audit is finalized, the working papers, schedules and worksheets will be sent to Finance Director in excel and /or word format. In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing financial significance. 17. The City of Schertz Reserves the Right: • To reject any and all proposals submitted. • To request additional information from all proposers. IV. Evaluation Process After the deadline for receipt of RFPs, an evaluation committee named by the City Manager will review all proposals utilizing the evaluation criteria noted below. The 9 Mayor and City Council reserve the right to have an outside Consultant review all proposals and make recommendations to the City. V. Selection Process Based on the decision of the Audit Committee, firms may be short- listed for further consideration, and may be required to submit supplemental information. Additionally, after review of the findings of the audit committee, firms may be required to make a formal presentation before a final decision is made by City Council. VI. Evaluation Criteria The following criteria and weight factors will generally be used to evaluate the RFP: Demonstrated municipal audit experience with cities of similar size or larger and with similar operations; qualifications of staff and respective professional activities of the audit team and the firm including municipal experience, technical expertise of supervisory staff available to perform "on- site" work and resources readily available to the firm in key areas for the City. These key areas include experience in municipal and Federal funding auditing (40 points). 2. Total evaluated Audit cost (20 points). 3. Responsiveness of the proposal in clearly stating an understanding of the work to be performed; responsiveness to terms and conditions, including scheduling; completeness and thoroughness of the technical data and documentation. (20 points). 4. Effectiveness in Completing Audits, CAFR and Certificate of Achievement for Excellence in Financial Reporting — because of the importance of having the audit and reporting services completed in a timely manner, firms will be evaluated on their ability to meet audit services and issuance of the CAFR (20 points). • References and contact information on similar audits from other municipalities or governmental agencies will be contacted to assess ability to complete engagements in a timely manner. Proposer must provide number of requests made for Certificate of Achievement for Excellence in Financial Reporting for clients and number of actual Certificates for Achievement for Excellence in Financial Reporting awarded to clients for the past 5 years. Presentations /Interviews may be arranged at the discretion of the evaluation team to assist in making the final selection. Firms invited to make presentations must 10 attend, so it is strongly encouraged for respondents to reserve the week of July 15th. Failure to make a presentation will be grounds for disqualifying the proposal. VII. Additional Information The following Items must be included as part of your RFP Submittals: Executive Summary • List local office(s) and resources. Convey your organizations plan for conferring on a regular basis with the City Finance Department • Overview of services proposed • Proposed work plan • Describe your organization's personnel • Specify the number of full -time employees for firm (not including attorneys) • Identify the personnel who would handle the audit for the City of Schertz • Provide biographies of key management • References • Provide at least two (2) references (entities) for which your firm provides audit services. These references should include the name, address, and phone number of the contact person • Explanation of fees (include a sample contract) • Any other information you consider germane to performing financial audit services VIII. Contract Award The City does not guarantee that a contract (or contracts) will be awarded as a result of this RFP. In the event that a contract award is made, but the contract is not executed, the City does not guarantee that the contract will be re- awarded. IX. Termination This contract may be voided by mutual agreement by the City and the independent auditor with 90 days written notification. X. Response Deadline Responses to the RFP must be addressed to Rita Duprat - Waldo, City of Schertz and received at the Purchasing and Asset Management Department, 10 Commercial Place, Building #1, Schertz, TX 78154, by 10:00 a.m., July 11, 2013 for consideration. Eight (8) complete sets, and one (1) electronic copy (DVD, USB, etc.) of the response must be submitted no later than this date and time in a sealed envelope indicating that its contents are in response to the "Request for Proposal, #13- FIN- 24 -M -01 Financial Audit Services ". 11 RFPs will be accepted in person, by United States Mail, or by private courier service. No RFPs will be accepted by oral communication, telephone, electronic mail, telegraphic transmission, or facsimile transmission. RFPs may be withdrawn prior to the above scheduled time set for closing. Alterations made before RFP closing must be initiated by respondents guaranteeing authenticity. RFP responses received after the deadline will be returned unopened. Hand - deliver Bids: Purchasing & Asset Management Department, 10 Commercial Place, Building #1, Schertz, TX 78154 If using Land Courier (i.e., FedEx, UPS): Purchasing & Asset Management Department, 10 Commercial Place, Building #1, Schertz, TX 78154 Envelopes must be clearly marked: PROJECT # 13- FIN- 24 -M -01 AUDIT SERVICES There is no expressed or implied obligation on the part of the City of Schertz to reimburse responding firms for any expenses incurred in preparing Request for qualifications in response to the request. The City of Schertz reserves the right to refuse and reject any or all responses, and to waive any or all formalities or technicalities, and to accept the RFP to be the best and most advantageous to the City, and hold the responses for a period of 120 days without taking action. Respondents are required to hold their Proposal /RFP's firm for same period of time. XI. Clarification of Requirements All requests for additional information or clarification concerning this RFP must be submitted, in writing, (fax, email or mail), no later than July 2, 2013 and addressed to: Rita Duprat - Waldo, Purchasing & Asset Management 10 Commercial Place, Bldg. #1 Schertz, TX 78154 Email: RDuprat- Waldo @schertz.com Fax (210) 619 -1169 XII. Addenda and Modifications Any changes, additions, or clarifications to the RFP are made by amendments (addenda) or written Q /A's. Any respondent in doubt as to the true meaning of any part of the RFP or other documents may request an interpretation from the Purchasing and Asset Management Department. At the request of the respondent, or in the event the Purchasing and Asset Management Department deems the interpretation to be substantive, the interpretation 12 will be made by written addendum issued by the Purchasing and Asset Management Department. Clarifications to any Questions will be answered online on the City of Schertz website. Addenda will be mailed by to all respondents receiving the original RFP and will become part of the RFP package having the same binding effect as provisions of the original RFP. It shall be the respondent(s) responsibility to ensure that they have received all Addenda in respect to this project. Furthermore, respondents are advised that they must recognize, comply with, and attach a signed copy of each Addendum which shall be made part of their Submittal. Respondent(s) signature on Addenda shall be interpreted as the respondent's "recognition and compliance to" official changes as outlined by the City of Schertz and as such are made part of the original RFP documents. Failure of any respondent to receive any such addendum or interpretation shall not relieve such Respondent from its terms and requirements. Addendums are available online at www.schertz.com /Purchasinq, Open Bids. No verbal explanations or interpretations will be binding. In order to have a request for interpretation considered, the request must be submitted in writing and must be received by the City of Schertz Purchasing and Asset Management Department no later than July 2, 2013 The City does not assume responsibility for the receipt of any addendum sent to respondents. XIII. Request for Proposal Preparation Costs Issuance of this RFP does not commit the City of Schertz, in any way, to pay any costs incurred in the preparation and submission of an RFP. All costs related to the preparation and submission of this RFP shall be borne by the respondent. XIV. Insurance Requirements: The Certificate of insurance should be addressed to the Risk Manager, City of Schertz, 10 Commercial Place, Building #1, Schertz, TX 78154, and should reference the operation. All Certificates of insurance shall be received and approved by the City Risk Manager and /or his /her designated representative prior to the commencement of any work. In the event the insurance coverage expires prior to the completion of this contract, a renewal certificate shall be issued thirty (30) days prior to the expiration date. The City must be notified at least thirty (30) days prior to any material change in and /or cancellation and /or non - renewals of such policies. During the term of the Agreement, the successful respondent/firm shall acquire and maintain, for the duration of the contract period the following insurances: 1. Professional Liability Insurance: coverage of at least $1,000,000 on a "Claims Made Basis ". This coverage shall remain in effect for a two (2) year period following the expiration of the contract with the City. This policy of insurance shall be considered primary to and not contributing with any insurance maintained by the City of Schertz. 13 2. Comprehensive Commercial General Liabilitv: The Respondent/Selected Firm shall provide minimum limits of $1,000,000 each occurrence, $1,000,000 annual aggregate combined single limit for bodily injury and property damage liability. This shall include premises /operations, independent contractors, products, completed operations, broad form property damage, personal and advertising injury, and contractual liability, specifically confirming and insuring the indemnification and hold harmless clause of the contract. This policy of insurance shall be considered primary to and not contributing with any insurance maintained by the City of Schertz and shall name the City of Schertz as an additional insured. The policy of insurance shall be written on an "occurrence" form. This policy of insurance shall be considered primary to and not contributing with any insurance maintained by the City of Schertz and shall name the City of Schertz as an additional insured. 3. Umbrella/ Excess Liability: Respondent /Selected Firm shall provide umbrella /excess coverage with limits of no less than $1,000,000 excess of Commercial General Liability, Employer's Liability and Auto Liability. 4. Workers' Compensation: The Respondent/Selected Firm shall provide and maintain workers' compensation insurance for all employees in the full amount required by statute and full compliance with the applicable laws of the State of Texas. Employer's Liability insurance shall be provided in amounts not less than $1,000,000 per accident for bodily injury by accident; $1,000,000 policy limit by disease; and $1,000,000 per employee for bodily injury by disease." In addition, the contractor for Worker's Compensation Insurance shall provide a Waiver of Subrogation Endorsement. Contractor shall further insure that all of its subcontractors maintain appropriate levels of workers' compensation insurance. 5. Other Insurance Provisions: The City of Schertz is to be specifically included on all certificates of insurance (with exception to Workers Compensation) as additional insured. In addition, a Waiver of Subrogation Endorsement shall be provided by the Respondent/Selected Firm in said policy on all certificates of insurance. 6. Deductible Clause: Respondent/Selected Firm must declare self- insured retention or deductible amounts. All insurance carriers shall be published on A.M. Best Rating Guide. Unless otherwise specified, it shall be the responsibility of the contractor to insure that all subcontractors comply with the same insurance requirements spelled out above. The City may request a copy of the insurance policy according to the nature of the project. City reserves the right to accept or reject the insurance carrier. All Certificates of Insurance shall be provided on the Accord Form 25. All insurance requirements are imposed and must be complied with by any and all sub - contractors, and /or lower -tier sub - contractors. 14 XV. Egual Employment Opportunity Respondent agrees that it will not discriminate in hiring, promotion, treatment, or other terms and conditions of employment based on race, sex, national origin, age, disability, or in any way violate Title VII of 1964 Civil Rights Act and amendments, except as permitted by said laws. XVI. Anti - Lobbying Provision During the period between RFP submission date and the contract award, respondents, including their agents and representatives, shall not directly discuss or promote their RFP with any member of the Schertz Council or City staff except in the course of City- sponsored inquiries, briefings, interviews, or presentations. Violation of this provision may result in the rejection of the respondent's RFP. THE CITY OF SCHERTZ RESERVES THE RIGHT TO REFUSE AND REJECT ANY OR ALL RFP'S, AND TO WAIVE ANY OR ALL FORMALITIES OR TECHNICALITIES, AND TO MAKE SUCH AWARDS OF CONTRACT AS MAY BE DEEMED TO BE THE BEST AND MOST ADVANTAGEOUS TO THE CITY OF SCHERTZ. 15