ANNVILLE-CLEONA AREA SCHOOL DISTRICT 520 South White Oak Street Annville, PA 17067

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1 ANNVILLE-CLEONA AREA SCHOOL DISTRICT 520 South White Oak Street Annville, PA REQUEST FOR PROPOSAL The Annville-Cleona School District invites qualified vendors to submit proposals for AUDIT SERVICES FOR THE FISCAL YEARS ENDING JUNE 30, 2015, 2016, 2017 AND TWO ONE-YEAR OPTIONS TO ETEND THE AGREEMENT SUBMISSION OF PROPOSALS The vendor shall submit two (2) signed copies (1 original, 1 photocopy) of the completed proposal in a sealed envelope clearly marked "AUDITOR RFP". Proposals are due by 1:00 p.m. - Friday, February 27, 2015 Mail or deliver proposal to the following address: Annville-Cleona School District Attention: Business Manager 520 South White Oak Street Annville, PA TENTATIVE TIME SCHEDULE Initial Review of Proposals-March 2 through March 6 Final Review March 9 through March 13 Contract Awarded by Board-March 19

2 Prospective Audit Representative: Attached is the Annville-Cleona School District's Request for Proposal for Audit Services for the fiscal years ending June 30, 2015, 2016, 2017 and two one-year options to extend the agreement. Qualified firms include those firms with extensive local school district audit experience and who are thoroughly familiar with GASB Statement Number 34 offering client guidance are preferred. There is a meeting scheduled for 1 PM Wednesday, February 18, 2015 in the Boardroom of the Annville-Cleona School District located at 520 S White Oak Street, Annville, PA , for those interested auditors who wish to familiarize themselves with the district's accounting procedures and auditing needs. RFPs are due February 27, The Annville-Cleona School Board will plan to make the audit service award at their public meeting on March 19, You may also call the Business Office with questions until the deadline to submit the RFP. Martha Kew, Business Manager Annville-Cleona School District

3 Annville-Cleona School District 520 S White Oak Street Annville, PA Business Office (717) (717) (fax) 1. Proposal Invitation REQUEST FOR AUDIT SERVICE PROPOSALS The Annville-Cleona School District is soliciting written proposals from area CPA firms for auditing of the school district s financial records, for the school years ending June 30, 2015, 2016, 2017 and two one-year options to extend the agreement. Attached are Section 2 Auditor Specifications and Exhibits A, B, and C, relative to the district s operations. A meeting has been set for 1 PM February 18, 2015 at the Annville-Cleona School District Boardroom for participants to discuss the audit services with the Business Manager. Proposals must be received by Annville-Cleona School District no later than February 27, 2015, at the following address: Annville-Cleona School District Business Manager 520 S White Oak Street Annville, PA Clearly write on the outside envelope: Audit Proposal. It is expected that the Board will take action at its regular meeting on March 19, The Annville-Cleona School District fiscal year ends on June 30. It is expected that the Business Office records will be ready for final audit approximately September 15, Preliminary financial data will be available in mid-july. The first year audit must be completed by October 15, Any questions concerning this request should be directed to: Martha Kew, Business Manager (717)

4 Proposal Specifications A. Term of Agreement The Annville-Cleona School District is requesting audit proposals for a period of three years with the audit to be conducted for 2014/2015, 2015/2016 and 2016/2017 school years. The district is also requesting two additional one-year options to extend the agreement for the fiscal years 2017/2018 and 2018/2019. B. Audit Firm Requirements Proposals will be accepted only from firms that: (1) are free of all obligations and interests that might conflict with the best interests of the Annville-Cleona School District; (2) have successfully complied and are currently in conformity with the membership requirements of the Private Companies Practice Section of the American Institute of Certified Public Accountants quality control program; (or comparable quality control company) (3) have the personnel capacity to provide services on a timely basis; (4) have extensive experience auditing PA School Districts; including a minimum of two (2) Pennsylvania Public School Districts as active audit clients (5) are thoroughly familiar with the Manual of Accounting and related financial procedures of PA School Systems, the PA Public School Code of 1949, as amended; are thoroughly familiar with Federal and State Single Audit Act regulations and guidelines and all recent bulletins and directives related to school finance issued by the PA Department of Education (PDE) and the PA Auditor General s Office. (6) are knowledgeable of the regulations concerning Governmental Accounting Standards Board, particularly GASB Statement Number 34. C. GASB Pronouncements The proposal should address the following tasks and related costs to assist the School District with continuing to implement the requirements of GASB 34 and the subsequent pronouncements: (1) Meeting(s) to review and identify the reconciling items to the government-wide financial statements and provide input as to a fixed asset capitalization policy and maintenance of fixed asset and accumulated depreciation records in future periods. (2) Additional annual work required to prepare the government-wide financial statements, required supplementary information and management discussion and analysis of financial information. 3

5 (3) A plan to address the continuing requirements of GASB Statement 45 Post Employment Benefits other than Pensions. (4) Verification of other GASB Statement compliance to include but not limited to GASB Statement No. 40 Deposits and Investment Risk Disclosure, GASB Statement No. 66 Technical Corrections, GASB Statement No. 67 Financial reporting for Pension Plans, GASB Statement No. 68 Accounting and Financial Reporting for Pensions, and GASB Statement No. 71 Pension Transition for Contributions Made Subsequent to the Measurement Date. Indicate the firm s experience with the implementation of GASB statements with other governmental entities. D. Scope of Audit (1) District funds to be audited include those listed in Exhibit A. The district shall have closed and balanced all accounts and prepared a trial balance for the general fund by September 15. (2) Twenty (20) prescribed copies of the annual audit report shall be submitted. (3) The district contracts with a Food Service Management Company for the administration and operation of its food service program. The audit shall include reasonable tests of the invoices from the food service management company and the supporting documentation to determine that charges are appropriate. (4) The auditors shall observe the adequacy of the systems of internal control. If material weaknesses are noted, appropriate recommendations shall be reviewed with the Business Manager and the Superintendent of Schools and included in a management letter to the Board of School Directors of the Annville-Cleona School District. (5) The audit must be completed by no later than October 15 of each year. (6) At the district s request, copies of any and all of the working papers prepared in conjunction with the audit engagement will be provided at no cost to the District on a timely basis. (7) The audit will comply with the Single Audit Act implemented by the Federal Office of management and the Budget (OMB) in accordance with circular A-128 and any subsequent announcements, where necessary. (8) Audit confirmations will be prepared by the auditor in final form and mailing costs are the responsibility of the auditor. (9) The auditors will present their annual report at the November board meeting at the board s request. 4

6 E. Auditing Standards The examination shall be made in accordance with generally accepted auditing standards, as adopted by the membership of the AICPA, and GASB Number 1, Codification of Auditing Standards and Procedures, for State and Local governments. Auditors shall prepare, at a minimum, the statements, schedules and reports listed in Exhibit C. F. Information Requested from the Proposer To achieve a uniform review process and obtain the maximum degree of comparability, it is required that proposals be organized in the manner specified. (1) Letter of Transmittal Limit to one or two pages. a. Briefly state the proposer s understanding of the work to be done and make a positive commitment to perform the work within the specified time period. b. Give the names of the persons who will be authorized to make representations for the proposer, their titles, addresses, and telephone numbers. (2) Profile of the Proposer a. State whether your audit organization is national, regional or local. b. Indicate the number of people (by experience) located within the local office that will conduct the audit. c. Provide a list of the local office s current and prior public school district audit clients indicating the type(s) of services performed and the number of years served for each. d. Describe your organization s participation in AICPA sponsored quality control programs (see Section B.2.). e. Describe your approach to the audit. This should include at least the following points: (i) (ii) (iii) (iv) (v) Type of audit program used (firm generated, AICPA, standard government or standard commercial). Use of statistical sampling. Indicate the percentage degree of confidence level normally allowable by your firm s audit procedures for various tests. Organization of the audit team and approximate percentage of time spent on audit. Include an estimate of total job hours. Management letter. Typical assistance expected from school district s staff. 5

7 (vi) (vii) Tentative timeline for conducting the audit. Provide a sample planning document that outlines auditor expectations for sampling, reports, spreadsheets, reconciliations, etc. to be provided by the district and related timelines. f. Describe your approach to the preparation of financial statements; specifically what is the firm s position on the district s non-production of the financial statements, and what does the firm require of the district to not receive a finding for the non-production of financial statements. g. Describe your approach to a compliance audit as required by the Single Audit Act. (3) Summary of the Proposer s Qualifications (in addition to minimum qualifications) a. Describe the experience in school audits of person assigned to the audit. Indicate the percentage of time the senior auditor will be on-site. b. Describe the certifications and PA School District auditing experience of each individual assigned to the audit. (4) State the fixed fee quote for the audit for the school year and the two subsequent years. The audit proposal may not be withdrawn for a period of ninety (90) days, from the date the proposals are opened. A sample quote form is enclosed. The district may extend the service agreement an additional two years ( through ) based upon the successful completion of the prior year audit. G. Evaluation of Proposal Proposals will be evaluated in terms of the following criteria: (1) The volume and success of PA School District auditing experience. Success is defined as positive references and no additional fees. (2) The firm s technical experience, as evidenced by sample audit reports of other school districts, which may be submitted with the proposal. (3) The audit team s experience and professional qualifications. (4) The cost of the audit. (5) Other supportive documentation as submitted. H. Additional Information and Contract (1) The district will not be liable for any cost incurred in the preparation of proposals. (2) The submission of a proposal shall be prima facie evidence that the proposer has full knowledge of the scope, nature, quantity and quality of work to be performed; 6

8 the detailed requirements of the specifications; and the conditions under which the work is to be performed. (3) The proposer shall furnish the district such additional information as the district may reasonably require. (4) The district will not be liable and will not pay for any costs not included in the proposal. Specifically, it will not be subject to any fees for extra work. (5) The auditing firm will be responsive to the district s requests for miscellaneous payroll tax form processing information and other general accounting and tax matters throughout the year without additional cost to the district. (6) The district reserves the right to conduct interviews of any or all proposers prior to selection. The district will not be liable for any costs incurred by the proposer in connection with such interviews (i.e., travel, reproduction costs, etc.). (7) The district reserves the right to conduct pre-contract negotiations with any or allpotential proposers. (8) The district reserves the right to reject any and all proposals. It retains sole discretion to accept the proposal it considers most favorable to its interest, and the right to waive minor irregularities in the proposals. The district further reserves the right to reject all proposals and seek new proposals when such a process is in the best interest of the district. (9) Prior year budgets, annual financial reports and local audit reports are available for review on the district website. 7

9 EHIBIT A District Funds & Accounts 2013/2014 Total Annual Expenditure General Fund $20,871,158 Net of Debt Refinancing $20,656,359 Capital Reserve/Project Funds $891,584 Debt Service Fund (payments in General Fund) $0 Enterprise Fund (Food Service) $555,815 Trust Funds (Balance) $64,326 Long Term Debt Service Requirements $31,560,725 Capital Asset Nets $30,802,013 8

10 EHIBIT B Operations Information Annual Budget $20,693,941 Number of Checks Issued General Fund Approximately 275 transactions are ACH in nature Payroll Account Employees paid via direct deposit 3,000 (Approx.) 5,000 (Approx.) Number of Bank Accounts of these are private purpose trust accounts including CDs Number of Employees 174 Includes 1 ½ time teacher & & 3 new positions Most substitutes are subcontracted out only custodial substitutes are district employees (1) Number of W-2 s issued 230 Number of 1099 s issued 5 Number of Tax Collectors 1 Types of taxes levied Real Estate Transfer Per Capita Occupation Flat Rate Occupational Privilege (EMST) Earned Income Yes Yes No No No Yes Federal Projects & Grants Subject to Single Audit With grant threshold change may be below threshold. Tax Anticipation Loan None Bargaining Groups ACEA (Certified Association) Expires 08/31/15 ESPA (Custodial/Maintenance Personnel) Expires 06/30/15 Educational Office Personnel Expires 06/30/17 Administrators (Act 93) Expires 06/30/17 Superintendent Expires 06/30/19 Business Manager Expires 06/30/18

11 EHIBIT C List of Schedules and Reports For Annville-Cleona School District Prepared Prepared DESCRIPTION by by Auditor District 1 Copy of annual budget as originally filed and reconciliation to final budget showing transfers by month 2 General Ledger Trial Balance for general fund 3 Bank Reconciliation s 4 Schedule of investments 5 Schedule of investment income 6 Schedule of delinquent real estate taxes including collection after June 30 th 7 Schedule of payables (payroll, benefits, trade) 8 Schedule of fixed assets and depreciation 10 Schedule of federal assistance 11 State revenue confirmation 12 Schedule of current real estate taxes by locale reconciled from original assessment to net revenues 13 Schedule of interim real estate taxes, and transfer taxes 14 Sundry income and expense account analysis (other income, sale of assets, legal expense) 15 Activity funds bank reconciliations 16 Completion of various internal control questionnaires and single audit act checklist 17 Pennsylvania Department of Education Form PDE Annual Financial Report (Schedules Auditors, General Fund Detail SD) 18 Auditor's Report 19 Notes to Financial Statements 20 Schedule of Federal Financial Assistance for the Single Audit Report 21 All other Schedules and Opinions to be included in the Single Audit Report 22 Annual Report of Revenues and Expenditures for all Special Revenue Funds 23 Schedule of Major/Non-Major Fund Determination 24 Government-wide (Economic Focus) Financial Statements 25 Managements Discussion and Analysis

12 Annville-Cleona School District 520 S White Oak Street Annville, PA Annville-Cleona School District Funds Auditing Fee (without single audit) F.Y.E F.Y.E. F.Y.E. June 30, 2015 June 30, 2016 June 30, 2017 Two One-Year Options to Extend: F.Y.E F.Y.E. June 30, 2018 June 30, 2019 Annville-Cleona School District Funds Single Audit Fee F.Y.E F.Y.E. F.Y.E. June 30, 2015 June 30, 2016 June 30, 2017 Two One-Year Options to Extend: F.Y.E F.Y.E. June 30, 2018 June 30, 2019 Firm: Telephone: Fax: Contact: Authorized Signature 2