CITY OF BOERNE, TEXAS

Transcription

1 CITY OF BOERNE, TEXAS REQUEST FOR QUALIFICATIONS AND PROPOSALS (RFQ 17 01) FOR PROFESSIONAL AUDITING SERVICES April 7, E. BLANCO BOERNE, TEXAS 78006

2 TABLE OF CONTENTS I. INTRODUCTION A. General Information 1 B. Term of Engagement 2 C. Subcontracting 2 II. NATURE OF SERVICES REQUIRED A. General 2 B. Scope of Work to be Performed 2 C. Auditing Standards to be Followed 4 D. Reports to be Issued 4 E. Bond Issues and Special Considerations 5 F. Schedule for the 2017 Fiscal Year Audit 6 G. Entrance Conferences, Progress Reporting and Exit Conferences H. Working Paper Retention and Access to Working 7 Papers 6 III. DESCRIPTION OF THE GOVERNMENT A. Finance Dept., Contact Person and Organization Chart 7 B. Background Information 8 C. Fund Structure 9 D. Federal and State Financial Assistance Awards 9 E. Pension Plans 9 F. Component Units 9 G. Finance Operations 9 H. Computer Financial Systems 10 I. Availability of Prior Audit Reports 10 IV. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department and Clerical Assistance 10 B. Prepared by Client Schedules 10 C. Work Area, Telephones, Photocopying, Fax Machines, and Internet Access 10

3 V. PROPOSAL REQUIREMENTS A. Proposal Calendar 11 B. General Requirements Inquiries 2. Submission of Proposals VI. PROPOSAL FORMAT AND SUBMISSION A. Cover Letter 13 B. Table of Contents 13 C. Executive Summary 13 D. Technical Proposal General Requirements 2. Independence 3. License to Practice in State of Texas 4. Firm Qualifications and Experience 5. Partner, Supervisory and Staff Qualifications and Experience 6. Prior Engagements with the City of Boerne 7. Similar Engagements with Other Government Entities 8. Specific Audit Approach 9. Identification of Anticipated Potential Audit Problems 10. Report Format 11. Appendices E. Sealed Dollar Cost Proposal 17 F. Rates for Additional Professional Services 17 G. Contractual Agreement and Manner of Payment 17 VII. EVALUATION PROCEDURES A. B. Review of Proposals Evaluation Criteria Initial Elements 2. Technical Qualifications 3. Price Proposal C. Oral Presentations/Interviews D. Final Selection E. Right to Reject Proposals

4 APPENDICES 21 A. Organizational Chart 22 B. List of City Officials and Key Personnel 23 C (1) Conflict of Interest Questionnaire 24 C (2) Certificate of Interested Parties 25 D. Proposer Guarantees 26 E. Proposer Warranties 27 F Schedule of Professional Fees and Expenses 28 to Support the Total All Inclusive Maximum Price F (2) F (3) G. City s Insurance Requirements 31

5 CITY OF BOERNE, TEXAS REQUEST FOR QUALIFICATIONS AND PROPOSALS I. INTRODUCTION A. General Information The CITY OF BOERNE, TEXAS (City) is requesting proposals from qualified firms of certified public accountants to audit its financial statements for the fiscal years ending September 30, 2017 through September 30, 2019, with the option of auditing its financial statements for each of the two (2) subsequent fiscal years, reviewing the Comprehensive Annual Financial Report (CAFR), and completion of a Single Audit Report, if expenditures criteria are met. These audits are to be performed in accordance with generally accepted auditing standards as set forth by the American Institute of Certified Public Accountants, the standards set forth for financial audits in the General Accounting Office's (GAO) Government Auditing Standards (1994), and the Governmental Accounting Standards Board (GASB). Effective for audits of fiscal years beginning on or after December 26, 2014, the Uniform Guidance issued by the Office of Management and Budget (OMB) consolidated into one regulatory location (2.C.F.R 200) which supersedes OMB Circular A-133, as well as the requirements of the State of Texas Single Audit Circular (State Single Audit) in accordance with Uniform Grants Management Standards of the State of Texas. The City will not reimburse responding firms for any expenses incurred in preparing proposals, clarification of a response, and/or oral presentations which may be, at its discretion, required by the City. To be considered, an original of the technical proposal on a USB drive plus five (5) hard copies of the technical proposal and sealed proposal must be received by the City Purchasing Department at 402 E. Blanco by 3:00 p.m. on Monday, May 2, Proposals received after this time will not be considered and will be returned to the proposer unopened. It shall be the proposer s responsibility to ensure that their proposal is received by Purchasing within the time limit indicated. It is the proposer s responsibility to ensure that they have received any and all addenda related to this proposal. The City reserves the right to reject any or all proposals submitted and to re solicit for services. During the evaluation process, the City reserves the right, where it may serve the City s best interest, to request additional information or clarifications from proposers, or to allow corrections of errors or omissions. At the discretion of the City, firms submitting proposals may be requested to make oral presentations as part of the evaluation process. The City reserves the right to negotiate all elements of the proposal to ensure that the best possible consideration be afforded to all. The City also reserves the right to retain all proposals submitted and to use any ideas in a proposal regardless of whether that proposal is selected. 1

6 The City considers all information contained within the proposal received to be subject to the Open Records Act and non proprietary in nature. Submission of information by the proposer shall not be released by the City during the evaluation process or prior to contract award. Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposal, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the City and the firm selected. PER SECTION VI, A through F; THE FIRM MUST FOLLOW ALL INSTRUCTIONS IN THIS REQUEST FOR PROPOSAL IN ORDER TO BE CONSIDERED FURTHER. City Council will make the final determination of contract award and it is anticipated the Boerne City Council will award the contract for audit services on Tuesday, May 23, 2017 or as soon thereafter as possible. B. Term of Engagement A five year engagement is contemplated, subject to the annual review and recommendation of the City, the satisfactory negotiation of terms (including a price acceptable to both the City and the selected firm), the concurrence of the City Council and the annual availability of an appropriation. C. Subcontracting No subcontracting will be allowed without the express prior written consent of the City. II. NATURE OF SERVICES REQUIRED A. General The City is soliciting the services of qualified firms of certified public accountants to audit its financial statements for the fiscal years ending September 30, 2017 through September 30, 2019, with annual options to audit the City s financial statements for each of the two (2) subsequent fiscal years. The option to engage the firm for each year rests with the City. These audits are to be performed in accordance with the provisions contained in this request for proposals. B. Scope of Work to be Performed 1. Audit: The City Council requires that the City perform an independent annual audit of all City accounts. The audit must be performed by a Certified Public Accountant or a firm of such accountants who have no personal interest, direct or indirect, in the fiscal affairs of City government or any of its officers. 2

7 For each of the fiscal years covered by this RFQ, the audit will: a) Be performed in accordance with generally accepted auditing standards promulgated by the American Institute of Certified Public Accountants and in accordance with the laws of the State of Texas. These standards require that the auditor plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free of material misstatement. b) Include examination, on a test basis, of the evidence supporting the amounts disclosed in the basic financial statements. c) Include expressing an opinion on the fair presentation of its basic financial statements in conformity with generally accepted accounting principles. d) Include the in relation to opinion on the fair presentation of its combining and individual fund financial statements and schedules in conformity with generally accepted accounting principles. The auditor is not required to audit the introductory, statistical or continuing disclosure sections of the report. e) Include certain limited procedures involving required supplementary information required by the Governmental Accounting Standards Board as mandated by generally accepted auditing standards. f) If federal and state grant expenditure criteria is met in a given year, a single audit will be performed in accordance with federal government requirements. g) Possibly include, from time to time, at the City s request the performance of other audits and reviews or additional work not specifically provided for under this section. If such a request is made, the auditor will submit, at the City's request, an estimate of fees and the contract will be amended to reflect the additional fees. The City reserves the right to contract any additional audits or reviews or additional work with whomever they choose. h) Require assistance and consultation in notifying management about, identifying the impact of, educating staff about, and implementation of new GASB ( Governmental Accounting Standards Board ) and FASB ( Financial Accounting Standards Board ) statements at a date to be determined by the City, even if prior to the required effective date. i) Require the review of the City's compliance with requirements of the State of Texas Public Investment Funds Act. 3

8 2. Comprehensive Annual Financial Report ( CAFR ): The CAFR is a report on the fair presentation of the financial statements in conformity with accounting principles generally accepted in the United States. The CAFR will state the scope of the examination that the audit was performed in accordance with generally accepted auditing standards. It will include an opinion as to whether the statement conforms to accounting principles generally accepted in the United States. The CAFR will be prepared in accordance with the following: a. The most recently issued Governmental Accounting Auditing and Financial Reporting ( GAAFR ); b. The standards promulgated by the Governmental Accounting Standards Board ( GASB ); and The CAFR will typically be prepared by City staff and reviewed by the auditors for assurance that it is in the format and with the content necessary to qualify for the Certificate of Achievement for Excellence in Financial Reporting issued by the Government Finance Officers Association of the U.S. and Canada (GFOA). The auditors will also provide any special assistance needed to the City to meet the requirements of this program. In the future, the City may find it necessary for the auditors to prepare the CAFR or portions of the CAFR. C. Auditing Standards to Be Followed To meet the requirements of this request for proposal, the audit shall be performed and the reports prepared in accordance with generally accepting auditing standards as set forth by the American Institute of Certified Public Accountants, the standards set forth for financial audits in the General Accounting Office's (GAO) Government Auditing Standards (1994), and Governmental Accounting Standards Board (GASB). Effective for audits of fiscal years beginning on or after December 26, 2014, the Uniform Guidance issued by the Office of Management and Budget (OMB) consolidated into one regulatory location (2.C.F.R 200) which supersedes OMB Circular A-133, as well as the requirements of the State of Texas Single Audit Circular (State Single Audit) in accordance with Uniform Grants Management Standards of the State of Texas. D. Reports to be Issued Following the completion of the audit of the fiscal year's financial statements, the auditor shall issue: 1. Management Letter: The management letter is a report on the internal control structure based on the auditor's understanding of the control structure and assessment of control risk. The management letter will: a. Detail audit findings and recommendations affecting financial statements, internal controls, accounting, data processing systems, legality of actions, other instances of noncompliance with laws and regulations, and any other material matters. 4

9 b. Be reviewed in draft form with the Finance Director in order to determine that the observations reflect an accurate understanding of the City's systems and procedures. c. Include any significant deficiencies 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 assertions of management in the financial statements. The auditor will report significant opportunities for internal control improvements or increased efficiencies requiring action by City management and/or the City Council. d. Include the immediate, written report to the City Manager of all material irregularities and illegal acts or indications of illegal acts of which the auditor becomes aware. 2. Single Audit Report: The single audit report is a report on compliance with laws and regulations related to major and non-major federal and state financial assistance programs. The auditor will be expected to perform the Single Audit in compliance with terms of Federal Awards generally and terms specific to the grant. The Single Audit report will include the following: a. A statement that the examination was conducted in accordance with applicable auditing standards; b. An opinion on compliance with specific requirements applicable to major federal and state financial assistance programs; c. An indication of compliance with general requirements applicable to major federal and state financial assistance programs and compliance with laws and regulations applicable to non-major federal and state financial assistance program transactions tested; d. The internal control structure used in administering federal financial assistance programs; e. Findings of noncompliance or ineligible expenditures, presented in sufficient detail for management to clearly understand them; and f. The schedule of federal financial and state assistance and related auditor's report, as well as the reports on the internal control structure and compliance will not be included in the CAFR, but are to be issued separately. E. Bond Issues and Special Considerations If the City prepares an official statement in connection with the sale of debt securities which will contain the basic financial statements and the auditor's report thereon, t he auditor shall be required, if requested by the financial advisor 5

10 and/or the underwriter, to issue a "consent and citation of expertise" as the auditor and any necessary "comfort letters." If applicable, the Schedule of Expenditures of Federal Awards and related auditor's reports, as well as the reports on compliance and internal controls are not to be included in the CAFR, but are to be issued separately. This schedule and the notes will be prepared and printed by the auditors. It is not anticipated that a Schedule of Expenditures of Federal Awards will be required for fiscal year Throughout the year, the auditors will provide financial advice and counsel on matters occurring that would affect the annual report. F. Schedule for the 2017 Fiscal Year Audit As part of the firm s proposal, please complete a proposed schedule for the 2017 Fiscal Year Audit, similar to the one shown below, with proposed completion dates for each phase, incorporating the City s targeted deadlines. Detailed Audit Plan to include list of required information and schedules to be prepared by client Interim Work to be completed no later than mid September Fieldwork to begin around or immediately after Thanksgiving holiday and will be completed before the Christmas holiday Draft Reports and Conference with Finance Director Drafts of the audit report and recommendations to management to be available for review by the Finance Director in early February File and Present CAFR to Council in late February/Early March Each year, the auditors will meet with City Finance staff to determine the audit schedule for the year and any special considerations in timing. Dates may be adjusted each year to allow the City appropriate time to prepare all the required year end journal entries, audit schedules, and to close and review the books prior to the auditor s arrival for fieldwork. G. Entrance Conferences, Progress Reporting and Exit Conferences A similar time schedule as noted above will be developed for audits of future fiscal years if the City exercises its option for additional audits. At a minimum, the following conferences should be held: Entrance conference with Finance Director Progress conferences with Finance Director Entrance conference with Finance Director 6 Prior to Interim Work Weekly Interim/Field Start of Field Work

11 Exit conference with Finance Director End of Field Work Progress meetings with the Finance Director or designee will be held throughout the audit to provide assurance that the audit is on schedule and to communicate any information deemed relevant to the audit and findings, and to note achievement and/or problems that have potential effect on the schedule. H. Working Paper Retention and Access to Working Papers All working papers and reports must be retained, at the auditor's expense, for a minimum of five (5) years, unless the firm is notified in writing by the City of the need to extend the retention period. The auditor will be required to make working papers available, upon request, to the following parties or their designees: City of Boerne, Texas State and Federal granting agencies U.S. General Accounting Office (GAO) Parties designated by the federal or state governments or by the City as part of an audit quality review process Auditors of entities of which the City is a subrecipient of grant funds 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 accounting significance, at no additional cost to the City. III. DESCRIPTION OF THE GOVERNMENT A. Finance Department, Name of Contact Person and Organizational Chart The City s accounting function falls within the Finance Department. The Finance Director, who reports to the Deputy City Manager, is responsible for all financial accounting and reporting activities of the City as well as Customer Service and Utility Billing, and Purchasing. In total, there are 19 staff members in the Finance Department, 12 of which are in Customer Service and Utility Billing, and 1 in Purchasing. Staff responsibilities include but are not limited to payroll, accounts payable, purchasing, investments, cash receipts, utility billing and collections, reconciliations, journal entries and financial reporting. During the audit and field work, the auditor's principal contact with the City will be a designated individual who will coordinate the assistance to be provided by the City to the auditor. An organizational chart (Appendix A) and a list of key personnel, (Appendix B) are attached. 7

12 B. Background Information The City of Boerne, Texas, incorporated in 1909, is located in the south-central part of the state just west of the San Antonio metroplex, the Nation s seventh largest city. The City acts as the service center for the surrounding community, providing retail, recreation, and food service to a population of 40,384 people. Similarly, the City serves as the County Seat for Kendall County. The City of Boerne currently occupies a land area of square miles with a population of 14,392. The City has operated under the council-manager form of government since Policymaking and legislative authority are vested in a governing council consisting of the mayor and five other members. The governing council is responsible, among other things, for passing ordinances, adopting the budget, and hiring the City Manager. The City Manager is responsible for carrying out the policies and ordinances of the governing council, for overseeing the day-to-day operations of the government, and for the hiring and firing of employees. The council is elected on a non-partisan basis. Council members serve two-year staggered terms, with three council members elected every year. The City of Boerne provides a full range of services, including: Animal Control Municipal court Cemetery Parks and Recreation Code Enforcement Planning and community Development Dispatch/communications Police protection Emergency Operations Street construction and maintenance Fire protection Visitor Information Center Library In addition, the City provides electric, water, wastewater, reclaimed water, gas and solid waste collection and recycling services to its citizens. The City s fiscal year 2017 total approved expenditure budget is $63.8 million. Expenditure budgets for the City s major operating and debt service funds are as follows: General Fund $15,448,160 Debt Service Fund $ 3,641,189 Electric Utility Fund $17,077,669 Water Utility Fund $ 6,981,833 Wastewater Utility Fund $ 8,138,590 Gas Utility Fund $ 2,423,558 The budgeted number of FTE employees is approximately

13 C. Fund Structure The City uses the following fund types in its financial reporting: Number Legally Adopted Fund Type of Funds Annual Budgets General Fund 1 1 Special Revenue Funds 4 4 Debt Service Fund 1 1 Capital Project Funds 2 2 Enterprise Funds 5 5 Internal Service Fund 1 1 Permanent Fund 1 1 D. Federal and State Financial Assistance Awards During the last fiscal year, the City received minimal financial assistance from state and federal agencies. E. Pension Plans The City provides pension benefits for all full time employees through a nontraditional, joint contributory, defined benefit plan in the state wide Texas Municipal Retirement System, an agent, multiple employer public employee retirement system. F. Component Units The City has no component units. G. Finance Operations The Finance Department is directed by the Finance Director. The principal functions performed and the number of employees assigned to each are as follows: FUNCTION EMPLOYEES Finance Administration 2 Accounting & Payroll 3 Accounts Payable 1 Customer Service &Utility Billing 12 Purchasing 1 9

14 H. Computer Financial Systems The City s accounting software system is through Tyler Technologies Incode. The system runs on a network server with networked workstations for City Staff. The Tyler Technologies modules the City is currently using are: General Ledger Accounts Payable Project Accounting Purchase Orders Fixed Assets Check Reconciliation Inventory Payroll Human Resources Criminal Court Cash Collections Utility Billing Building Projects Cemetery Records The City s Parks Department uses ActiveNet for registration of classes and memberships. ActiveNet requires an interface to Tyler through journal entry or import. I. Availability of Prior Audit Reports Interested proposers who wish to review the prior year s audited financial report(s) can obtain the reports from the City s website at The previous CAFR s will give the reader additional information on the City s reporting entity, fund structure, and financial policies. IV. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION Finance will prepare the final closing of the books including any auditor entries as well as provide balance sheets, revenue, and expenditure reports for all funds. A. Finance Department and Clerical Assistance The Finance Department staff and responsible management personnel will be available during the audit to assist the firm by providing information, documentation, and explanations. The preparation of confirmation letters will be the responsibility of the City. B. Prepared By Client Schedules (PBC) The auditor shall provide a list at least three weeks prior to interim fieldwork of Schedules to be prepared by City Staff. C. Work Area, Telephones, Photocopying, Fax Machines, and Internet Access The City will provide the auditor with reasonable work space, tables, and chairs. The auditor will also be provided with access to a telephone, photocopying facilities, fax machines, and internet access. 10

15 V. PROPOSAL REQUIREMENTS A. Proposal Calendar The following is the proposed schedule for the selection process: Request for proposal issued by City April 7 Clarifying questions due from firms April 17 Due date for proposals to City from firms May 2 3:00 p.m. City review and evaluation of proposals; Interviews with selected firms, if deemed necessary May 10 - May 11 Council action selecting audit firm May 23 6:00 p.m. B. General Requirements 1. Inquiries concerning the request for proposals must be made to: Oliver Mueller, Purchasing Coordinator omueller@ci.boerne.tx.us 402 E. Blanco Boerne, TX CONTACT BY ANY EMPLOYEE OR AGENT OF THE PROPOSING FIRM WITH PERSONNEL OR ELECTED OFFICIALS OF THE CITY OTHER THAN THE ABOVE-NAMED OFFICIAL REGARDING THIS REQUEST FOR PROPOSALS MAY BE GROUNDS FOR ELIMINATION FROM THE SELECTION PROCESS. Inquiries and answers, if deemed relevant to all proposers, will be forwarded to all responders. Any interpretation, corrections or changes to this RFQ will be made by addenda. It is the responsibility of the submitter to ensure receipt of all addenda and to include any changes in the submittal document. 2. Submission of Proposals: The following material is required to be received by 3:00 p.m. on May 2, 2017 for a firm to be considered: a. A USB drive of the Technical Proposal and 5 hard copies to include the following: i. Cover Letter This section should show the request for proposals subject; the firm's name; the name, address, address and telephone number of the contact person; and the date of the proposal. The cover letter must also be signed by a partner authorized to bind the company. ii. Table of Contents 11

16 iii. Executive Summary A summary briefly stating the proposer s understanding of the work to be done, the commitment to perform the work within the time, a statement why the firm believes itself to be best qualified to perform the engagement and a statement that the proposal is a firm and irrevocable offer for the period stated. iv. Technical Proposal the detailed proposal should follow the order set forth in Section VI of this request for proposals. v. Executed copies of Conflict of Interest Questionnaire, Certificate of Interested Parties, Proposer Guarantees and Proposer Warranties, attached to this request for proposal (Appendix C, D and Appendix E) and proof of insurance. b. The proposer shall submit five hard copies of a dollar cost fee in a separate sealed envelope marked as follows: SEALED DOLLAR COST FEE RFQ FOR CITY OF BOERNE, TEXAS FOR PROFESSIONAL AUDITING SERVICE May 2, 2017 c. Proposers should send the completed proposal consisting of the two (2) separate envelopes, by delivery or mail, to the following address: City of Boerne, TX Purchasing Department ATTN: Mr. Oliver Mueller 402 E. Blanco Boerne, TX The City s RFQ Number and title should appear on the submitted envelopes and cover page of the proposal and sealed dollar cost. Submittals cannot be altered or amended after submission deadline. No submittal may be withdrawn after opening time without first submitting a written reason to the Purchasing Coordinator and obtaining the Purchasing Coordinator s approval. 12

17 VI. Proposal Format and Submission A. Cover Letter This section should show the request for proposals subject; the firm's name; the name, address, address and telephone number of the contact person; and the date of the proposal. The cover letter must also be signed by a partner authorized to bind the company. B. Table of Contents C. Executive Summary Prefacing the proposal, an executive summary which gives in brief, concise terms a summation of the proposal. D. Technical Proposal 1. General Requirements The purpose of the Technical Proposal is to demonstrate the qualifications, competence and capacity of the firms seeking to undertake an independent audit of the City in conformity with the requirements of this request for proposals. As such, the substance of proposals will carry more weight than their form or manner of presentation. The Technical Proposal should demonstrate the qualifications of the firm and of the particular staff to be assigned to this engagement. It should also specify an audit approach that will meet the request for proposals requirements. THERE SHOULD BE NO DOLLAR UNITS OR TOTAL COSTS INCLUDED IN THE TECHNICAL PROPOSAL DOCUMENT. The Technical Proposal should address all the points outlined in the request for proposals (excluding any cost information, which should only be included in the sealed dollar cost fee). The Proposal should be prepared simply and economically, providing a straightforward, concise description of the proposer's capabilities to satisfy the requirements of the request for proposals. While additional data may be presented, the following subjects, items Nos. 2 through 9, must be included. They represent the criteria against which the proposal will be evaluated. 2. Independence The firm should: 1. Provide an affirmative statement that it is independent of the City of Boerne as defined by the Generally Accepted Auditing Standards and the U.S. General Accounting Office's Government Auditing Standards (1994)] 2. List and describe the firm's professional relationships involving the City for the past five (5) years, together with a statement 13

18 explaining why such relationships do not constitute a conflict of interest relative to performing the proposed audit. 3. Shall give the City written notice of any professional relationships entered into with the City during the period of this agreement. 3. License to Practice in the State of Texas An affirmative statement should be included that the firm and all assigned key professional staff are properly licensed to practice in the State of Texas. 4. Firm Qualifications and Experience The proposer should: 1. Indicate the size of the firm, 2. Indicate the size of the firm's governmental audit staff, 3. Indicate the location of the office from which the work on this engagement is to be performed, 4. Indicate the number and nature of the professional staff to be employed in this engagement on a full time basis, 5. Indicate the number and nature of the staff to be so employed on a part time basis. If the proposer is a joint venture or consortium, the qualifications of each firm comprising the joint venture or consortium should be separately identified and the firm that is to serve as the principal auditor should be noted, if applicable. 6. Submit a copy of the report on its most recent external quality control review, with a statement whether that quality control review included a review of specific government engagements. 7. Provide information on the results of any federal or state desk reviews or field reviews of its audits during the past three (3) years. 8. Provide information on the circumstances and status of any disciplinary action taken or pending against the firm or its staff during the past three (3) years with state regulatory bodies or professional organizations. 9. Describe other areas of expertise within the firm that would be available to the City. Include the firm s ability to provide technical support throughout the year, including assistance to the City in interpreting and implementing new accounting standards and regulations as well as determining their impact on the City. Also, include any opportunities through your firm available to the City for training or continuing professional education credits on current issues or governmental auditing and accounting in general. 10. State your firm s position on responding to client inquiries the average turnaround time to respond to questions or requests. 14

19 5. Partner, Supervisory and Staff Qualifications and Experience (1) Identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement. (2) Indicate whether each such person is registered or licensed to practice as a certified public accountant in the State of Texas. (3) Provide information on the government auditing experience of each person, including information on relevant continuing professional education for the past three (3) years and membership in professional organizations relevant to the performance of this audit. Provide as much information as possible, including resumes, similar engagements, qualifications, experience, and training, including relevant continuing professional education, of the specific staff to be assigned to this engagement. (4) Indicate how the quality of staff over the term of the agreement will be assured. Engagement partners, managers, other supervisory staff and specialists may be changed if those personnel leave the firm, are promoted or are assigned to another office. These personnel may also be changed for other reasons with the express prior written permission of the City. However, in either case, the City retains the right to approve or reject replacements. Consultants and firm specialists mentioned in response to this request for proposal can only be changed with the express prior written permission of the City, which retains the right to approve or reject replacements. Other audit personnel may be changed at the discretion of the proposer provided that replacements have substantially the same or better qualifications or experience. The City reserves the right to request removal of personnel. 6. Similar Engagements with Other Government Entities For the firm's office that will be assigned responsibility for the audit, list the most significant engagements (minimum 5) performed in the last five years that are similar to the engagement described in this request for proposal (have utilities, similar in size to Boerne, i.e. population, annual budget). These engagements should be ranked on the basis of total staff hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact. Also, indicate whether the CAFR issued in connection with the audit was awarded the GFOA s Certificate of Achievement for Excellence in Financial Reporting. 7. Specific Audit Approach The proposal should set forth a work plan, including an explanation of the audit methodology to be followed, to perform the services required in Section II of this request for proposal. 15

20 Proposers should provide the following information on their audit approach: a. Proposed segmentation of the engagement. b. Level of staff and number of hours to be assigned to each proposed segment of the engagement. NO DOLLARS SHOULD BE INCLUDED IN THE TECHNICAL PROPOSAL c. The extent to which statistical sampling is to be used in the engagement, including sampling methods, size and areas of use. d. Extent of use of Electronic Data Processing software in the engagement and electronic repository of schedules, information, etc. e. Type and extent of analytical procedures to be used in the engagement. f. Approach to be taken to gain and document an understanding of the City s internal control structure. g. Approach to be taken in determining laws and regulations that will be subject to audit test work. h. Approach to be taken in drawing audit samples for purposes of tests of compliance. i. Discussion and approach to the level and amount of Finance staff support necessary to complete the work as outlined in the proposal. Clearly describe the work the firm proposes that City staff perform other than preparation, client prepared schedules, and auditor questions/clarifications. Include information on specific portions of the audit and scope of work including timeframes. j. Comment on the firm s ability to meet the timelines as indicated in the RFQ. Provide any recommended changes to the schedule that you think are required to enhance the timeliness and quality of the engagement. 8. Identification of Anticipated Potential Audit Problems The proposal should identify and describe any anticipated potential audit problems, and the adoption of new laws or accounting audit principles that might affect the audit, the firm's approach to addressing these problems and any special assistance that will be requested from the City. 9. Appendices Executed copies of Conflict of Interest Questionnaire, Certificate of Interested 16

21 Parties, Proposer Guarantees and Proposer Warranties, attached to this request for proposal (Appendix C, D and Appendix E ) and proof of insurance. E. Sealed Dollar Cost Proposal Total All Inclusive Maximum Price The sealed dollar cost fee should contain all pricing information relative to performing the audit engagement as described in this request for proposal. The total all inclusive maximum price proposed is to contain all direct and indirect costs including all out of pocket expenses. The City will not be responsible for expenses incurred in preparing and submitting the technical proposal or the sealed dollar cost fee. Such costs should not be included in the proposal. Use the Schedule of Professional Fees and Expenses located in the Appendix, F. Provide: a. Name of Firm b. Certification that the person signing the proposal is entitled to represent the firm, empowered to submit the bid, and authorized to sign a contract with the City. c. Rates by Partner, Manager, Supervisory and Staff as well as Hours anticipated for each. d. Provide for an amount for other or out of pocket expenses. e. This will result in a total, all inclusive maximum price for the Fiscal Year 2017, 2018, and 2019 engagement and provide an estimated total cost proposal for each of the subsequent two (2) years, which will be negotiated annually. F. Rates for Additional Professional Services If it should become necessary for the City to request the auditor to perform additional work as a result of the specific recommendations included in any report issued on this engagement, then such additional work shall be performed only if set forth in an additional contract between City and the firm. Any such additional work agreed to by the City and the firm shall be performed at the same rates set forth in the schedule of fees and expenses included in the sealed dollar cost fee. G. Contractual Agreement and Manner of Payment The contract to be awarded shall be for the provision of services as requested herein at the estimated fee negotiated for the first 3 years, and if extended, the subsequent years. The contract can be in the form of an engagement 17

22 letter. This is considered an all inclusive, not to exceed fee estimate. The contract or engagement letter shall be prepared by the auditors and shall incorporate all applicable provision of the City s proposal. The City shall agree to make interim progress payments of the annual fee based on the percentage of work performed, with proper documentation of status of work completed attached. Interim billing shall cover a period of not less than a calendar month. Final payment will not be made until completion and acceptance of audit. If the audit scope should need to be broadened, the auditor must communicate the existence of such circumstances to the Finance Director prior to performing work that will result in fees exceeding the proposed amounts. A change order needs to be executed prior to work that would incur additional fees exceeding the proposed amounts. VII. EVALUATION PROCEDURES A. Review of Proposals A point formula will be used during the review process to score proposals. Each City staff reviewer will independently score each technical proposal by each of the criteria described in Section VII below. The staff reviewers will then meet to review and discuss these evaluations and combine the individual scores to arrive at a composite technical score for each firm. The 3 or 4 firms with the top technical scores will then have their sealed dollar cost fee opened and additional points will be added to their technical score. At that point, the City may elect to bring in the top 2 or 3 firms for presentation and interview. Staff will then present recommendation to Management. The City reserves the right to retain all proposals submitted and use any idea in a proposal regardless of whether that proposal is selected. B. Evaluation Criteria Proposals will be evaluated using three sets of criteria. Firms meeting the initial set of criteria will have their proposals evaluated and scored for technical qualifications and price. Firms that do not meet all of the initial elements may not be considered further. The following represent the principal selection criteria, which will be considered during the evaluation process. 1. Initial Elements a. The audit firm is independent and licensed to practice in the State of Texas. b. The firm has no conflict of interest with regard to any other work performed by the firm for the City. 18

23 c. The audit firm s professional personnel have received adequate continuing professional education within the preceding two (2) years to meet the Government Audit Standards. (provide documentation) d. The firm has provided names of entities where they have prepared two or more CAFRs which have received the GFOA s Certificate of Achievement for Excellence in Financial Reporting in each of the past 2 years. e. The firm follows all instructions in this request for proposal on preparing and submitting the proposal. f. The firm submits a copy of its last external quality control review report demonstrating a record of quality audit work. 2. Technical Qualifications: (Maximum Points 85) a. Expertise and Experience 50 i. The firm's past experience and performance on comparable municipal government engagements (size and complexity). ii. iii. iv. Technical experience and firm's professional qualification of the personnel to be assigned to the engagement and the quality of the firm's management support personnel to be available for technical consultation. The firm s past experience with similar federal and state grant programs and performance of Single Audits and tests of compliance with laws and regulations. The firm s past experience with the GFOA Certificate of Achievement for Excellence in Financial Reporting Program. v. The firm s ability to perform additional services and provide technical support throughout the year, including assistance to the City in interpreting and implementing new accounting standards and regulations as well as determining their impact on the City. Also, any opportunities available to provide training and CPE credits on current issues or governmental auditing and accounting in general. b. Audit Approach 35 i. Comprehensiveness of audit work plan. 19

24 ii. iii. iv. Adequacy of proposed staffing plan for various segments of the engagement, including timeline and ability to meet due dates. Adequacy of sampling techniques and analytical procedures. Adequacy of study and evaluation of internal accounting and administrative controls. v. Adequacy of audit plan for electronic data processing function 3. Price Proposal: (Maximum Points 15) As provided by the State Board of Public Accountancy rules, the contract award will not necessarily be made to the firm that provides the lowest cost proposal but to the firm whose proposal and experience best meets the City s requirements. COST WILL NOT BE THE PRIMARY FACTOR IN THE SELECTION OF AN AUDIT FIRM. C. Oral Presentations/Interviews During the evaluation process, the City may, at its discretion, request any one or all firms to make oral presentations. The presentation is worth up to an additional 25 points. Any points earned as a part of this presentation will be added to the points received in the first round of evaluation. Such presentations will provide firms with an opportunity to answer any questions the City may have on a firm's proposal. Not all firms may be asked to make such oral presentations. D. Final Selection The City Council will select a firm based upon the recommendation of City staff. Following recommendation, the recommended firm will be notified so that an engagement letter can be prepared and executed by the firm and included in the agenda item for City Council award. It is anticipated that City Council will award on May 23, Following award by City Council, the City will execute the engagement letter. E. Right to Reject Proposals Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposal unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the City and the firm selected. The City reserves the right without prejudice to reject any or all proposals. 20

25 APPENDICES A. Organizational Chart B. List of City Officials and Key Personnel C. Conflict of Interest Questionnaire and Certificate of Interested Parties D. Proposer Guarantees E. Proposer Warranties F. Schedule of Professional Fees and Expenses to Support the Total All Inclusive Maximum Price G. City s Insurance Requirements a. A Certificate of Insurance evidencing the required insurance shall be submitted with the proposal. Certificate of Interest Parties: Interested party means: (1) a person who has a controlling interest in the business with whom a governmental entity or state agency contracts; or (2) a person who actively participates in facilitating a contract or negotiating the terms of a contract with the governmental entity or state agency, including a broker, adviser, attorney, or intermediary for the business entity. Controlling interest means (1) ownership interest or participating interest in a business entity by virtue of units, percentage, shares, stock, or otherwise that exceeds 10 percent; (2) membership on the board of directors or other governing body of a business entity of which the board or other governing body is composed of not more than 10 members; or (3) service as an officer of a business entity that has four or fewer officers, or service as one of the four officers most highly compensated by a business entity that has more than four officers. You must fill out Form 1295 on the Texas Ethics Commission website, whether you have an interested party claim or not. Then print, sign and notarize, and file with your proposal. There are exemptions to electronic filing. Please read the information provided on the Texas Ethics Commission web site. 21

26 APPENDIX A Deputy City Manager Director of Economic Development Jeff Thompson Mayor City Council City Manager Ronald C Bowman City Attorney Kirsten Cohoon Municipal Judge Ed Phillips Assistant City Manager Linda Zartler Planning & Community Development Laura Talley, Director Economic Development Special Projects Public Works Electric Gas Plants Streets Water Wastewater Michael Mann, Director Police Dispatch James Kohler, Police Chief Fire Doug Meckel, Fire Chief Fire Marshal Mark Mattick, Fire Marshal Convention & Visitors Bureau Larry Woods, Director City Secretary Human Resources Administration Services Lori Carroll Information Technology Mike Raute, Director Special Projects Paul Barwick, Director Animal Services Code Enforcement Communications & Media Library Finance Customer Service & Utility Billing Purchasing Solid Waste Sandra Mattick, Director Municipal Court Parks & Recreation Cemetery Boerne Civic Center Maintenance/Facilities Danny Zincke, Director 22

27 APPENDIX B City of Boerne, Texas List of Principal Officials Title Mayor Mayor Pro Tem District 4 City Council Members District 1 District 2 District 3 District 5 City Manager Deputy City Manager Assistant City Manager Chief of Police City Attorney City Secretary Convention and Visitors Bureau Director Finance Director Assistant Finance Director Fire Chief Information Technology Director Library Director Parks and Recreation Director Planning & Community Development Director Public Relations Coordinator Public Works Director Name Michael D. Schultz Ron Cisneros Joe Anzollitto Nina Woolard Charlie Boyd Craig Colvin Ronald C. Bowman Jeff Thompson Linda S. Zartler James Kohler Kirsten Cohoon Lori Carroll Larry Woods Sandra Mattick, CPA, CGFO Angie Rios, CPA Doug Meckel Mike Raute Kelly Skovbjerg Danny Zincke Laura Talley Pam Bransford Michael Mann, PE 23

28 APPENDIX C (1) 24

29 APPENDIX C (2) 25

30 APPENDIX D PROPOSER GUARANTEES The proposer certifies it can and will provide and make available, at a minimum, all services set forth in Section II, Nature of Services Required. Signature of Official: Name (typed): Title: Firm: Date: 26

31 APPENDIX E PROPOSER WARRANTIES A. Proposer warrants that it is willing and able to comply with State of Texas laws. B. Proposer warrants that it has or is willing and able to obtain an errors and omissions insurance policy providing a prudent amount of coverage for the willful or negligent acts, or omissions of any officers, employees or agents thereof. C. Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the prior written permission of the CITY OF BOERNE, TEXAS. D. Proposer warrants that all information provided by it in connection with this proposal is true and accurate. Signature of Official: Name (typed): Title: Firm: Date: 27

32 APPENDIX F SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE FISCAL YEAR 2017 FINANCIAL STATEMENTS NAME OF FIRM: Standard Quoted Hourly Hourly Hours Rates Rates Total Partners Managers Supervisory Staff Staff Other (specify): Subtotal Total for Services (excluding Single Audit) Out of pocket expenses: Other (specify): Total al inclusive maximum price for the Fiscal Year 2017 audit Additional services that could be requested: Cost to prepare the CAFR Note: Single Audit, if required in future years, would be negotiated at that time. The person signing this proposal is entitled to represent the firm, empowered to submit the bid, and authorized to sign a contract with the City. Printed Name Signature Date 28