CITY OF UVALDE REQUEST FOR PROPOSALS FOR AUDIT SERVICES FY 2014, 2015, 2016 P.O. BOX 799 UVALDE, TEXAS (830)

Transcription

1 CITY OF UVALDE REQUEST FOR PROPOSALS FOR AUDIT SERVICES FY 2014, 2015, 2016 P.O. BOX 799 UVALDE, TEXAS (830)

2 CITY OF UVALDE, TEXAS Request for Proposals Table of Contents I. INTRODUCTION A. General Information B. Terms of Engagement II. III. IV. NATURE OF SERVICES REQUIRED A. General B. Scope of Work to be Performed C. Auditing Standards to be Followed D. Reports to be Issued E. Special Considerations F. Working Paper Retention and Access to Working Papers DESCRIPTION OF THE GOVERNMENT A. Name and Telephone Number of Contact Person B. Background Information C. Fund Structure D. Federal and State Financial Assistance E. Pension Plans F. Finance Operations G. Computer Systems H. Availability of Prior Reports and Working Papers ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department Assistance B. Statements and Schedules to be Prepared by the Staff of the City of Uvalde C. Work Area, Telephone, Photocopying D. Report Preparation V. A. General Requirements 1. Inquiries 2. Submission of Proposals B. Technical Proposal 1. General Requirements 2. Independence 1

3 3. License to Practice In Texas 4. Firm Qualifications and Experience 5. Partner, Supervisory and Staff Qualifications and Experiences 6. Identification of Anticipated Potential Audit Problems C. Sealed Dollar Cost Bid 1. Total All-Inclusive Maximum Price 2. Manner of Payment VI. EVALUATION PROCEDURES A. Review of Proposals B. Evaluation Criteria 1. Mandatory Elements 2. Technical Qualifications 3. Price C. Oral Presentation D. Final Selection E. Right to Reject Proposals 2

4 REQUEST FOR PROPOSALS I. INTRODUCTION A. General Information The City of Uvalde (the City ) is requesting proposals from qualified firms of certified public accounts to audit financial statements for the fiscal years ending September 30, 2014, 2015 and These audits are to be performed in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the provisions of the federal Single Audit Act of 1984 and U.S. Office of Management and Budget (OMB) Circular A-133, Audits of State and Local Governments, and the provisions of the 1994 AICPA Audits of State and Local Governmental Units, as well as follow any additional requirements: examination for compliance with procedures established by Charter, Ordinance or, where applicable, State and Federal Laws or regulations, including the Texas Code of Criminal Procedures. There is no expressed or implied obligation for the City to reimburse responding firms for any expenses incurred in preparing proposals in response to this request. Any inquiries concerning the request for proposals should be addressed to Joe A. Cardenas, Assistant City Manager or LeeAnn Ortiz, Budget Director at (830) Proposal forms may be obtained from Michelle Martinez in the Administration Office located at City Hall, 100 S. Getty, Uvalde, TX, between the hours of 8:00 a.m. to 5:00 p.m. Monday through Friday. To be considered proposals must be submitted by Friday, May 9, 2014 at 3:00 p.m.to Michelle Martinez in the Administration Office in a sealed envelope with the outside clearly labeled as PROPOSAL FOR AUDIT SERVICES. The proposals will be publicly opened during the regular City Council meeting of Tuesday, May 13, 2014, 6:00 p.m. in the City Council Chambers located at City Hall. 3

5 Awards will be made during the regular City Council meeting of June 10, To obtain results you may contact Michelle Martinez at (830) The City reserves the right to retain all proposals submitted and to use any ideas in a proposal regardless of whether that proposal is selected. Submission of a proposal indicates acceptance by the firm of the conditions contained in the request for proposals, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the City and the firm selected. B. TERM OF ENGAGEMENT A three-year contract is contemplated, subject to satisfactory performance, the satisfactory negotiation of terms (including price acceptable to both the City and the selected firm), and the concurrence of the City Council and the annual availability of the appropriation. 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, 2014, 2015 and These audits are to be performed in accordance with the provisions contained in this request for proposals. B. SCOPE OF WORK TO BE PERFORMED The City desires the auditor to express an opinion on the fair presentation of its general-purpose financial statements in conformity with generally accepted accounting principles. The City also desires the auditor to express an opinion on the fair presentation of its combining and individual fund and account group financial statements and schedules in conformity with generally accepted accounting principles. The auditor is required to audit the combining and individual fund and account group financial statements and supporting schedules. However, the auditor is to provide an in-relation-to report on the combining and individual fund financial statements and supporting 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. 4

6 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. On occasion, the City may request the auditor to perform other audits and reviews not specifically provided for under this section. If such a request is made, the auditor shall submit, at the City s request, a separate proposal for completing the engagement, along with a proposed fee schedule. The City reserves the right to contract any additional audits or reviews with whomever they choose. C. AUDITING STANDARDS TO BE FOLLOWED To meet the requirements of the request for proposals, the audit shall be performed in accordance with: Generally accepted auditing standards as set forth by the American Institute of Certified Public Accountants, the standards for financial audits set forth in the U.S. General Accounting Office s (GAO) Government Auditing Standards (1994), the provisions of the federal Single Audit Act of 1984 and the provisions of U.S. Office of Management and Budget (OMB) Circular A-133, Audits of State and Local Governments as well as the following additional requirements: examination for compliance with procedures established by City Charter, City Ordinance or, where applicable, State and Federal Laws or regulations, including the Texas Code of Criminal Procedures. D. REPORTS TO BE ISSUED Following the completion of the audit of the fiscal year s financial statements the auditor shall issue: 1. Auditor s Opinion: The selected firm shall prepare the appropriate written opinions required by law and common practice for inclusion in the audit reports. 2. Management Conference and Letter: The selected firm is to meet with the city manager to discuss the areas in which the city can improve financial operations and reporting. The final recommendations shall be written in letterform and addressed to the Mayor and City Council. Twelve (12) copies of the findings and recommendations observed during the engagement shall be provided with each fiscal year s reports. 5

7 3. Comprehensive Annual Financial Report: The selected firm shall assist in the preparation of the appropriate financial statements, assist in drafting a transmittal letter for the report, and assist in the preparation of the appropriate statistical tables. The Comprehensive Report shall be prepared in accordance with the standards established by the Government Finance Officers Association Certificate of Achievement in Financial Reporting Program. A draft of the Comprehensive Report will be reviewed by the city manager before it is printed. The selected firm shall provide twenty (20) final copies of the Comprehensive Report to the City as well as provide a copy in electronic format. 4. Presentation of Audit and Comprehensive Report: The selected firm at the City s discretion shall present for consideration and acceptance either the audit results and/or the Comprehensive Annual Financial Report to the City Council during the 2 nd regular council meeting in February of each year or a date agreed upon by the auditing firm and city staff due to unforeseen circumstances. The final copies of each year s Comprehensive Annual Financial Report and or CAFR shall be delivered no later than a week prior to said meeting. 5. Single Audit Report: The selected firm shall also complete a single audit report if the City meets the requirements of such. Reporting to the City Council The auditors shall inform the City Council of each of the following: a) The auditor s responsibility under generally accepted auditing standards b) Significant accounting policies c) Management judgments and accounting estimates d) Significant audit adjustments e) Other information in documents containing audited financial statements f) Disagreements with management g) Management consultation with other accountants h) Difficulties encountered in performing the audit Irregularities and illegal acts Auditors shall be required to make an immediate, written report of all irregularities and illegal acts or indications of illegal acts of which they become aware to the city manager. E. SPECIAL CONSIDERATIONS 6

8 1. The City may send its Comprehensive Annual Financial Report to the Government Finance Officers Association of the United States and Canada for review in its Certificate of Achievement for Excellence in Financial Reporting program. It is anticipated that the auditor will be required to provide special assistance to the City to meet the requirements of that program. 2. The auditor shall be required, if requested by the City, to issue a consent and citation of expertise as the auditor and any necessary comfort letters needed from the sale of debt securities which will contain the general-purpose financial statement and the auditor s report thereon. 3. The City has determined that the following are examples of agencies that will function as cognizant agencies in accordance with the provisions of the Single Audit Act of 1984 and U.S. Office of Managements and the Budget (OMB) Circular A-133, Audits of State and Local Government. The U.S. Department of Housing and Urban Development, the U.S. Environmental Protection Agency, the U.S. Department of Justice, the U.S. Department of Homeland Security, the Texas Department of Transportation, the Texas Department of Rural Affairs, and the Texas Commission on Environmental Quality and the Texas Water Development Board. 4. The City will require the auditor s assistance to comply with new reporting requirements mandated by GASB. F. WORKING PAPER RETENTION AND ACCESS TO WORKING PAPERS All working papers and reports must be retained, at the auditor s expenses, 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. In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matter of continuing accounting significance. III. DESCRIPTION OF THE GOVERNMENT A. NAME AND TELEPHONE NUMBER OF CONTACT PERSON The auditor s principal contact with the City will be Joe A. Cardenas, Assistant City Manager or LeeAnn Ortiz, Budget Director at (830) , 7

9 or a designated representative, who will coordinate the assistance to be provided by the City to the auditor. B. BACKGROUND INFORMATION The City has operated under the Manager/Council form of government since The city manager is responsible for carrying out the polices and ordinances of the governing council, for overseeing the day-to-day operations of the city, and for appointing the heads of various departments. The city council is composed of the Mayor and five (5) council members. The Mayor is elected to serve a two-year term and is elected at each biennial, city general election. The Mayor is elected by the entire city population, while the five (5) council members are each elected by their respective district as a result of a special election held in Council members are elected to serve four-year staggered terms, with places 1, 3, 5 and 2 and 4 respectively, alternating every two years on even numbered years. The City serves an area of 7.6 square miles with an estimated population of about 16,000. The City is located at the crossroads of the nations two longest highways: U.S. Hwy 90 and U.S. Hwy 83. The climate in this area is characterized by hot, humid summers and generally mild to cool winters. The City s fiscal year begins on October 1 and ends on September 30. The City provides the following services to its citizens: public safety (police, fire), public works, parks recreation, water, sewer, gas, sanitation services, airport and general administrative services. C. FUND STRUCTURE The City uses the following fund types: a) General Fund b) Proprietary Funds Utility, Sanitation, Airport c) Debt Service Fund d) Capital Projects Fund e) Permanent Trust Funds D. FEDERAL AND STATE FINANCIAL ASSISTANCE During the fiscal years to be audited, the City may or may not have received financial assistance from federal and/or state agencies. E. THE CITY PARTICPATES IN THE FOLLOWING PENSION PLAN Pension benefits for all of its eligible full-time employees are available through a non-traditional, joint contributory, hybrid defined benefit plan in the 8

10 state-wide Texas Municipal Retirement System (TMRS), an agent multipleemployer public employee retirement system. F. FINANCE OPERATIONS The Finance Department is supervised by LeeAnn Ortiz, Budget Director, whom reports directly to the City Manager. The Finance Department consists of four (4) employees. Utility Accountant/Comptroller Payroll Clerk Accounts Payable Clerk Purchasing Agent G. COMPUTER SYSTEMS The City s financial and accounting records are maintained on Tyler Technology s Incode Version X software. The Finance Department uses personal computers that are networked to a windows based server system. H. AVAILABILITY OF PRIOR AUDIT REPORTS AND WORKING PAPERS Interested proposers who wish to review prior years CAFR s and management letters should contact LeeAnn Ortiz, Budget Director at (830) ext The City will use its best efforts to make prior audit reports and supporting working papers available to proposers to aid their response to this request for proposals. IV. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. FINANCE DEPARTMENT 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 confirmations will be the responsibility of the City. Photocopying of any necessary documents to perform the audit, i.e., invoices, bank statements, reports, etc., will be the responsibility of the auditing firm. B. STATEMENTS AND SCHEDULES TO BE PREPARED BY CITY STAFF The finance staff will prepare necessary prepared-by-client (PBC s) working papers normally required for the annual audit. All working papers to be prepared by the City must be submitted, by written list, to the City on or before October 1, of each year together with adequate explanatory detail as to 9

11 the purpose of the working papers as well as method of preparing the work papers. Sufficiency and adequacy of detail will be determined by the City. Most working papers and all schedules are prepared on EXCEL. C. WORK AREA, TELEPHONE, PHOTOCOPYING, AND FAX MACHINES The City will provide the auditor with reasonable workspace, desks and chairs. The auditor will be provided with access to a Wi-Fi connection, one telephone line, photocopying facilities and a fax machine. D. REPORT PREPARATION Audit reports are to be addressed to the Honorable Mayor, City Council and City Manager, City of Uvalde, Texas. V. PROPOSAL REQUIREMENTS A. GENERAL REQUIREMENTS 1. Inquiries Inquiries concerning the request for proposals and the subject of the request for request for proposals must be made to: City of Uvalde Joe A. Cardenas or LeeAnn Ortiz P.O. Box 799 Uvalde, TX (830) CONTACT WITH PERSONNEL OF THE CITY OTHER THAN THE ASSISTANT CITY MANAGER OR BUDGET DIRECTOR REGARDING THIS REQUEST FOR PROPOSALS MAY BE GROUNDS FOR ELIMINATION FROM THE SELECTION PROCESS. 2. Submission of Proposals The deadline for proposals to be submitted is May 9, 2014 at 3:00 p.m. (all proposals must be in the administration office by the deadline). Proposals should be submitted in a sealed envelope with the outside clearly labeled as PROPOSAL FOR AUDIT SERVICES. The City reserves the right to reject any and all proposals, and to award the contract in the best interest of the City. 10

12 B. TECHNICAL PROPOSAL 1. General Requirements The purposed 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. The technical proposal should demonstrate the qualifications of the firms and of the particular staff to be assigned to this engagement. It should also specify the audit approach that will meet the request for proposal 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. 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 proposal. While additional data may be presented, the following subjects, items 2-10, must be included. They represent the criteria against which the proposal will be evaluated. 2. Independence The firm should provide an affirmative statement that it is independent of the City as defined by generally accepted auditing standards and the U.S. General Accounting Office s Government Auditing Standards (1994). The firm also should provide an affirmative statement that it is independent of all the component units of the City as defined by those same standards. The firm should also list and describe the firm s professional relationships involving the City or any of its component units for the past five (5) years, together with a statement explaining why such relationships do not constitute a conflict of interest relative to performing the proposed audit. In addition, the firm shall give the City written notice of any professional relationships entered into during the period of this agreement. 11

13 3. License to Practice in Texas An affirmative statement should be included indicating that the firm and all assigned key professional staff are properly licensed to practice in Texas. 4. Firm Qualifications and Experience The proposal should state the size of the firm, the size of the firm s governmental audit staff, the location of the office from which the work on this engagement is to be performed and the number and nature of the professional staff to be employed in this engagement on a full-time basis and the number and nature of the staff to be so employed on a part-time basis. 5. Partner, Supervisory and Staff Qualifications and Experience The firm should identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement and indicate whether each such person is licensed to practice as a certified public accountant in Texas. The firm should provide as much information as possible regarding the number, qualifications, experience and training, including relevant continuing professional education, of the specific staff to be assigned to this engagement. The firm also should indicate the quality of staff over the term of the agreement will be assured. The proposal should identify the extent to which staff, to be assigned to the audit, reflect the City s commitment to diversity. Audit personnel may be changed at the discretion of the proposed provided that replacements have substantially the same or better qualifications or experience. 6. Identification of Anticipated Potential Audit Problems The proposal should identify and describe any anticipated potential audit problems, the firm s approach to resolving these problems and any special assistance that will be requested from the City. C. SEALED DOLLAR COST BID 1. Total All-Inclusive Maximum Price The cost bid should contain all pricing information relative to performing the audit engagement as described in this request for proposals. The total 12

14 All-Inclusive maximum price to be bid is to contain all direct and indirect costs including all Out-Of-Pocket expenses stated separately. The City will not be responsible for expenses incurred in preparing and submitting the technical proposal or the cost bid. Such costs should not be included in the proposal. a) Name of firm b) A Total All-Inclusive Maximum Price for each of the fiscal years ending September 30, 2014, 2015 and Identify the fee for out-of pocket expenses, if any, separately from the fee for audit services. c) A Total All-Inclusive Maximum Price for preparation of the CAFR. d) A Total All-Inclusive Maximum Price for preparation of the single audit (if required). 2. Manner of Payment Progress payments will be made on the basis of hours of work completed during the course of the engagement and Out-of-Pocket expenses incurred in accordance with the firm s cost bid proposal. VII. EVALUATION PROCEDURES A. EVALUATION CRITERIA Proposals will be evaluated based on three sets of criteria. Firms meeting the mandatory criteria will have their proposals evaluated and scored for both technical qualifications and price. The following represent the principal selection criteria which will be considered during the evaluation process. 1. Mandatory Elements a.) The audit firm is independent and licensed to practice in Texas b.) The audit firm s professional personnel have received adequate continuing professional education with the preceding two years c.) The firm has no conflict of interest with regard to any other work performed by the firm for the City d.) The firm submits a copy of its most recent external quality control review report and the firm has a record of quality audit work e.) The firm adheres to the instructions in this request for proposals on preparing and submitting the proposal 2. Technical Qualifications A. Expertise and Experience 13

15 a.) The firm s past experiences and performance on comparable government engagements b.) The quality of the firm s professional personnel to be assigned to the engagement and the quality of the firm s management support personnel to be available for technical consultation. B. Audit Approach a.) Adequacy of proposed staffing plan for various segments of the engagement b.) Adequacy of analytical procedures 3. Price COST WILL NOT BE THE PRIMARY FACTOR IN THE SELECTION OF AN AUDIT FIRM. B. FINAL SELECTION The City will select a firm based upon the recommendation of City Staff and approval of the City Council. The City anticipates signing an engagement letter no later than June 24, C. RIGHT TO REJECT PROPOSALS The City reserves the right without prejudice to reject any or all proposals. 14

16 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES Standard Quoted Estimated Hourly Hourly Hours Rates Rates Total Partners Managers Supervisory Staff Staff Other (specify): Subtotal: Total for services described in Section II, E of the request for proposals Out-of-Pocket expenses: Meals and Lodging Transportation Other (specify): Total All-Inclusive maximum price for audit $ $ $ $ $ $ $ Note: The rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the total All-Inclusive maximum price. 15