Contract Documents. For. Request for Proposal RFP # Annual Bond Performance Audit Services. December 2016

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1 WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT 1400 Marina Way South Richmond, CA (510) Liz Block Board Member, President Valerie Cuevas Board Member, Clerk Madeline Kronenberg Board Member Tom Panas Board Member Mister Phillips Board Member Matthew Duffy Superintendent of Schools Lisa LeBlanc Associate Superintendent Operations Sheri Gamba Associate Superintendent Business Services Contract Documents For Request for Proposal RFP # Annual Bond Performance Audit Services Nia Rashidchi Associate Superintendent PreK-Adult Educational Services Steve Collins Associate Superintendent SELPA Ken Whittemore Assistant Superintendent Human Resources December 2016 Mary Phillips Chief Technology Officer

2 WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT 1400 Marina Way South, Richmond, CA NOTICE REQUESTING PROPOSALS Notice is hereby given that the governing board ( Board ) of the West Contra Costa Unified School District ( District or Owner ) will receive sealed proposals for RFP # at the office of the Executive Director of General Services, West Contra Costa Unified School District, 1400 Marina Way South, Richmond, CA January 12, 2017 with a non-public opening. General Information West Contra Costa Unified School District is seeking proposals for the following services: RFP # Annual Bond Performance Audit Services Proposals shall be delivered to the Purchasing Office, West Contra Costa Unified School District, 1400 Marina Way South, Richmond, CA Proposals will be received up to the hour of 4:00 p.m. on January 12, 2017 with a non-public opening. Any proposals submitted after this time, shall be non-responsive and returned unopened to the sender. The District reserves the right to reject any and all proposals or portions thereof, or to waive any informality in the RFP process. No proposal or any portion thereof may be withdrawn for a period of ninety (90) calendar days after due date. The successful consultant may be required to comply with Education Code Section The successful consultants and all sub-consultants must identify employees who may come in contact with pupils, and request a Department of Justice (DOJ) fingerprint check of these employees, receive the DOJ report and certify to the West Contra Costa Unified School District that no such employees have been convicted of a felony as defined in Section before allowing any pupil contact with employees. Proposal documents may be obtained at the Purchasing Department, West Contra Costa Unified School District, 1400 Marina Way South, Richmond, California Telephone (510) Only complete sets will be issued. By order of the School Board of the West Contra Costa Unified School District of Contra Costa County, California. 1

3 WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT REQUEST FOR PROPOSAL RFP # ANNUAL BOND PERFORMANCE AUDIT December 2016 NOTICE IS HEREBY GIVEN that West Contra Costa Unified School District, will receive up to but no later than 4:00 p.m. on January 12, 2017, sealed proposal for the award of an agreement for Annual Bond Performance Audit. All proposals shall be submitted in the format specified by West Contra Costa Unified School District. Proposals shall be received at the office of the Executive Director General Services, West Contra Costa Unified School District, 1400 Marina Way South, Richmond, CA Each proposal must conform and be responsive to the RFP instructions. I. INTRODUCTION and BACKGROUND West Contra Costa Unified School District is an urban district operating 35 elementary schools, two K-8 schools, six middle schools, six high schools, adult education, and alternative education campuses. The district s current enrollment averages 27,000 in all grades. The district s General Fund annual budget exceeds $309 million. The goal of the facility improvement program is to ultimately bring all District facilities to a common standard with regard to seismic/structural safety, upgrades to building systems, new classrooms, technology upgrades, and security. The District is in the midst of a $1.63 billion facility improvement program that began in earnest in November 2000 with the approval of 2000 Measure M, a $150 million bond measure that was approved by the voters for the authorization for repair/replacement of the District's elementary schools. In March 2002, the District received approval of the Measure D $300 million authorization for the repair/replacement of the District's secondary schools (Measure D Bond Program). In November 2005 the District received approval of the Measure J $400 million authorization to fund the acquisition, construction, reconstruction and modernization of school facilities. In November 2010 the District received approval of the Measure D $380 million authorization to fund the acquisition, construction, reconstruction and modernization of school facilities. In November 2012 the District received approval of the Measure E $360 million authorization to fund the acquisition, construction, reconstruction and modernization of school facilities. The 2002 Measure D Bond, 2005 Measure J, 2010 Measure D, and the 2012 Measure E Program is subject to the requirements of Proposition 39, which includes annual financial and performance audits. The scope of this RFP is limited to the Performance Audit of the Bond Program, which includes Measure D Bond Program (2010), and Measure E Bond Program (2012). The district is seeking the professional services of a consultant to provide all the necessary and related services for the preparation of an annual Performance (Proposition 39) audit of the district s Proposition 39 bond program. 2

4 II. GENERAL INSTRUCTIONS and SUBMITTAL REQUIREMENTS Submit one original proposal, unbound, and four (4) copies, in a sealed envelope or other sealed packaging, bearing the complete name and return address of the firm. In addition to your complete firm name and address, please annotate the envelope(s) as follows: CONFIDENTIAL: RFP # Request for Proposals for Performance (Proposition 39) Audit Services. Improper identification may result in premature opening of, or failure to consider the material. All requirements must be addressed in your proposal. Non- responsive proposals will not be considered. All proposals, whether selected or rejected, shall become the property of the district and may be subject to the California Public Records Act. The district reserves the right to reject any or all proposals or any part of a proposal. The total number of pages is limited to 15. The proposal shall be concise and to the point; however, it must be sufficiently detailed to allow for a thorough evaluation and comparative analysis. Each proposal must be signed by an authorized representative. Any additions or corrections to the RFP will be addressed in the form of addenda. III. DUE DATE, TIME, and PLACE: Deadline for submission: Due Date January 12, 2017, at 4:00 p.m. Proposals must be delivered on or before the due date and time specified to the attention of David Johnston, Executive Director General Services at the address specified below. Late proposals will not be accepted. Office hours for receipt of proposals prior to Due Date January 12, 2017 are Monday through Friday from 8:30 a.m. to 4:30 p.m., local time, excluding holidays. Mailing and Delivery Address for Proposals West Contra Costa USD Attn: David Johnston Executive Director General Services 1400 Marina Way South Richmond, CA Contact Personnel For information regarding Requests for Proposals: Mark Bonnett Executive Director Bond Finance (510) mark.bonnett@wccusd.net 3

5 IV. SCOPE OF SERVICES The provided scope of services will encompass a wide array of tasks and shall be comprehensive in nature, including all necessary research, documentation, exhibit preparation, legislative analyses, and meeting attendance. Prop 39 Audit The CONSULTANT shall: 1. Audit Measures Measure D 2010; and Measure E 2012 bond expenditures and financial records from July 1, 2016, through June 30, 2017, in accordance with the requirements of Education Code 15286: Consistent with the provisions contained in subparagraph (C) and (D) of paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution, the required annual independent financial and performance audits shall be conducted in accordance with the Government Auditing Standards issued by the Comptroller General of the United States for financial and performance audits. 2. Prepare and provide the District and its Governing Board a status report of the results of the audits; and, 3. Attend meetings of the Governing Board and the Citizens Bond Oversight Committee, if requested by the District. The CONSULTANT Shall: Alternate #1 dollars Alternate Audit Requirement: In accordance with Government Auditing Standards (Yellow Book) for compliance and program effectiveness and results Audit Measures Measure D 2010; and Measure E 2012 bond expenditures and financial records from July 1, 2016, through June 30, 2017, in accordance with Government Auditing Standards (Yellow Book) for compliance and program effectiveness and results. The proposed performance audit objectives for the June 30, 2017 audit are shown below. 1. District and Professional Services Staffing Plan for the Bond Program -Review of the District's staffing plan for an approach to in-house staffing and consultant staffing that includes key metrics such as positions staffed, number of personnel, number of planned projects and dollar value of planned projects utilized by the District to help determine organizational structure alignment with the Bond Program needs as segregated by 4

6 modernization versus new project staffing needs. 2. Design and Construction Schedules Cash Flow Analysis -Review for the use of methods to track the schedule of available revenues and expenditures for all projects and to plan each building project in accordance with the availability of funds. Compare the District's revenues and expenditures cash flow analysis and reporting to Government Financial Officers Association (GFOA) guidance on cash flow reporting and management guidance. Determine whether the District confirms the availability and appropriateness of revenue and cash sources for Bond Program financial management. Assess whether the District measures the adequacy of cash flow in relation to project requirements by timeframe for the local school construction bond. 3. Design and Construction Budget Management-Compare design and construction budget management practices to GFOA standards to measure the effectiveness of controls surrounding Bond-funded projects. Review for the use and reporting of adopted budget, budget-to-actual, budget-to-projected expenditures and revenue and means to clarify Bond Program progress and financial standing (e.g., narratives, graphs, charts, etc.). Analyze the design of budgetary management controls for the documentation and explanation of deviations from the original budget by key construction component for user reference. 4. Bidding and Procurement Procedures-Procurement controls will be evaluated for application of competitive and fair subcontracting practices that prevent excessive expenditures. We will conduct interviews and review relevant policies, example bids and contractor selection files to evaluate the following procurement controls: Application of State of California procurement requirements Procurement requirements approval Competitive bidding practices implementation Process for evaluation of proposed cost support reasonableness and relevance Bidder prerequisites, pre-qualification requirements, and selection criteria Appropriate representation on bid selection committees Work performance/delivery confirmation by appropriate project management personnel Billing approval process with complete supporting documentation requirements checklist Purchase of performance bonds and insurance We will also evaluate controls designed to integrate procurement processes with controls that prevent and/or detect excessive materials costs. Materials processes and activities to be reviewed include the following: Use of the schedule and project status for materials orders Finance purchase order (PO) review and approval Match between schedule of values, installations, and amounts billed Inbound quality inspection and work performance/delivery confirmation Material receipt match to PO and invoice prior to payment Complete recording of materials transactions on project records and the District General Ledger Materials receipt, safeguarding, and issuance controls 5

7 Appropriately secure job site (fencing, guards, restricted access) Materials storage, controls, and inventory counting requirements Validate that support for the use of sole source procurement was documented, cost justification was available, and required approvals were applied. Summarize sole source procurement documentation reviewed and instances where the specifications were narrowly defined to be vendor-specific. For competitive bids, verify compliance with requirements of the California school construction state requirements, Public Contracting Code, and state and other relevant laws and regulations. Evaluate procurement controls for application of competitive and compliant contracting practices. Review contractual pricing and change orders for increases to competitively bid project amounts when then project scope did not change. 5. Procurement Fraud Prevention and Detection Controls -Review to validate that District controls are in place to prevent and detect procurement fraud. Assess the implementation of ethics policy, reporting protocols, staff screening requirement, consequences, training, and escalation procedures to prevent and detect fraud. Analyze controls designed to screen and communicate ethics policy application and reporting requirements to suppliers. Review segregation of duties controls designed and implemented to prevent unauthorized obligations and payments. Assess information systems security and manual process controls designed to ensure fraud prevention controls are operating properly. Review the completeness of monitoring controls implemented to identify, report and address significant procurement anomalies. Verify methods applied to verify key reports used for key construction program management decisions are current, accurate and complete. 6. Bond Program Master Planning and Reporting: a. Master Planning -Review for the design and implementation of a master plan that identifies construction program scope priorities for the use of the local school construction bond funds. Determine whether the plan established prioritization objectives using criteria such as facility safety, longevity, and educational requirements. Assess the support for estimates used for establishing master plan budgets and use of the master plan in priorities in determining the use of Bond Program funds. b. Bond Program Reporting -This includes the evaluation of the effectiveness of communication methods used for managing the bond program. This will include review of periodic board reports, monthly project status reports, budget reports, various logs, information requests, schedule reports safety reports, weekly/monthly project meeting minutes, and payment application approval meeting minutes. Audit procedures will assess the capability of these different communication forums to address District stakeholder needs. This includes comparing and contrasting communication methods with good practices used by other similar organizations to identify any opportunities for improvement. Methods to communicate renovation plans for each site and new construction plans will be reviewed and compared to best practices. This will include review of published plans and discussions with Facilities and site personnel. Responsibility and accountability for site communication project performance and coordination of site activities will be reviewed. Procedures will be performed to review for separate and distinct financial and budgetary reporting for the local school construction bond. Assess whether a 6

8 standalone the local school construction bond report is provided to the Board of Trustees and Public to summarize progress against Bond Program plans with actual and forecasted cost comparison to budgets for planned projects. This includes review of construction change order information reporting to required end users to identify total change order impact for each project with cause and responsibility for the change identified. Additionally, verify the application of Public Contract Code section for supporting documentation of cost and cause analysis applicable to change order approval decisions prior to change order submission to the District Board of Trustees. 7. Cost, Schedule, Budgetary Management, and Reporting Controls Implementation -This analysis will cover measurement, management of cost, schedule, and budgetary reporting. This will include review of the following processes and control activities: Budget variance analysis/cost reporting by cost code detail and summary. This includes analysis of budget, changes, spending, commitments, forecast, and variance to budget. Cumulative earned value and funding reconciliation to timing of goods and service delivery. Project schedule with well-defined milestones that match project requirements. Compliance with project funding legal requirements. Comparison of project and District accounting records. Approved project scope document that matches design requirements. Change control guidelines and senior management approval for initial authorization and scope changes. Cost and schedule, budget, and actual analysis. Documentation of test results and quality inspections. Earned hours/earned units' budget and actual analysis. Billing review and spending variance approvals. Spending review and approval for proper coding. 8. Claim Avoidance and Control Procedures -Review for the implementation of procedures designed to prevent and address claims filed against the District related to construction projects for the period. 9. Materials Specifications -Determine whether the District has and uses a standardized items list and educational specifications for Bond Program materials procurement to identify facilities material requirements. Assess whether District materials requirements are available to project architects and designers and verify whether materials specifications are used in procurements and provided to all bidders during the procurement process. Review for cost- benefit analysis performed in setting materials standards and for District Management approvals required for significant materials specification changes. 10. Cost Benefit and Value Engineering Analyses -Review cost benefit and value engineering analysis procedures and documentation of practices applied. Verify whether analyses conducted to determine if the requirements (e.g., materials, assets, systems, etc.) of the project or equipment purchase could be obtained at a lower price or for a better value, specifically when weighing cost, time, and function. Assess whether value is determined by objective criteria that may include, but need not be limited to, price, 7

9 features, functions, lifecycle costs, and other criteria deemed appropriate by the District. Compare District practices to guidelines recommended by SAVE International. Assess whether the District determined a cost threshold for the application of value engineering in a practical manner. 11. Maintenance of District Assets Funded by the Local Bond and Warranty Conditions Compliance -Review District practices for maintenance of a list for all assets incorporated into school site construction and complete and accurate information regarding warrantied items. Verify the District implementation of controls surrounding the required maintenance of its assets in accordance with warranty terms, application of a formal system of logging this information for inventory purposes, and use of warranties where possible. 12. Implementation of Schedule Quality, Scope, and Performance Management Controls - Review bond program goals and objective statements, how well these have been communicated, their implementation in policy and procedures, and how well District and contractor personnel understand and apply them. This includes review of how reports and communications relate to the bond program objectives. This analysis will cover approvals required before performance of bond program activities and expenditures. We include review procedures to determine whether the District implemented a program delivery model that requires appropriate scope, documented actions and approvals before the design, construction and close-out project phases. The definition of deliverables for each project phase and requirements for approvals will be reviewed. This analysis will include review of tools and support processes for each project phase, comparing them to other efficient projects and good industry practices. 13. Change Order Management and Controls Application -Controls and activities to manage change orders will be evaluated for application of practices designed to prevent unallowable and/or excess costs as well as charges for change orders that are not the District's responsibility. Key change order management and control areas to be reviewed include: Change order review checklist and approvals Independent review of proposed change order costs Change order documentation activities Identification of design and contractor error information architect/engineering records and comparison to proposed change orders Appropriate application of cost codes and accounting practices 14. Contractor Billing Compliance Controls -Processes to review and approve contractor charges will be analyzed to prevent excessive charges and overpayments. Interviews will be conducted to ensure accurate understanding of events, circumstances surrounding construction, and professional service contract compliance. Transaction flow and cost control processes will be covered during these interviews. Documentation and support for billings and change order charges will be examined to evaluate: Charges match with actual performance and work completion Delivery of contracted services Payments in accordance with compensation terms Billing reconciliation to contract terms 8

10 Verification that required lien releases are obtained timely and with each billing 15. Project Close-Out Controls -Evaluate the District's policies, procedures, and practices to close out projects in accordance with contract requirements. This review included analysis of checklists, procedures, retention policies, and contract terms and conditions. Analyze procedures implemented to identify the parameters for contractor performance and compare the District's close-out procedures to good practices applied by similar organizations. This includes review of criteria for all relevant parties to determine whether a project was complete. These procedures also include processes to verify there were controls to obtain unconditional contractor lien release and ensure unresolved claims are not pending prior to final payment. 16. Post-Financing Review -Determine if (1) the District complied with the United States Securities and Exchange Commission Municipalities Continuing Disclosure Cooperation (MCDC) Settlement Agreement, Administrative Regulation (General obligation Bonds Disclosure) and Administrative Regulation 7214 (Post-Issuance Tax Compliance Procedures) when selling bonds and (2) the District complied with Bond pricing requirements established by the District prior to sale. 17. Refunding of Outstanding Bonds -Determine if Bonds refunding plans and actions comply with State and District specified requirements. 18. Arbitrage and Investments - Determine if (1) the District complied with Internal Revenue Service arbitrage requirements for bond sales (2) investment of cash from bond sales meet all legal requirements. 19. Timeliness of Payments -Determine if the District pays vendors within thirty (30) days. 20. Local Participation Requirements -Determine if the District complies with its policies on socioeconomic requirements like local hire and prevailing wage adherence as well as participation by small business firms. 21. CBOC Compliance -Determine if the CBOC and District complied with (I)Board Policy , Citizens' Bond Oversight Committee, and CBOC By- Laws and (2) Proposition 39 requirements to ensure CBOC meetings are held as scheduled, meeting minutes are appropriately taken and approved. 22. Transparency of Bond Program -Evaluate the overall transparency of the District's bond program using the San Diego County Taxpayers Association criteria. 9

11 V. PROPOSAL CONTENT In submitting your firm s response to this Request for Proposals, please include the following information: A. Project Understanding/Executive Summary Present a brief and non-technical narrative describing CONSULTANT S understanding of the requirements and proposed approach. B. Firm s Qualifications/Experience C. Personnel D. Scope of Services Describe your firm s experience with respect to Proposition 39 performance audits. Indicate the number of Proposition 39 performance audits performed by your firm. Include criteria your firm has used to evaluate bond performance for other clients. Identify the CONSULTANT in charge of the project. Designate the individual(s) who will be working on day-to-day activities with District staff. Provide a brief description of their experience. Outline, in detail, the tasks your firm will perform to produce information and services requested under the Scope of Services section. Provide an itemized list of client responsibilities; e.g., information the West Contra Costa Unified School District will need to provide to the CONSULTANT to initiate and complete the audit process. It is the district s intent to receive a price for a Proposition 39 compliance audit with the identified cost of Alternate #1, a Yellow Book compliance, program effectiveness, and result audit as detailed under Alternate #1 found on page 4. Additive/Deductive Alternates: Alternate #1 dollars Alternate Audit Requirement: In accordance with Government Auditing Standards (Yellow Book) for compliance and program effectiveness and results E. Client References (Minimum of 3) Provide the name, title, agency name, and phone number of the contact person(s) for which your firm has provided Proposition 39 performance audit services. 10

12 F. Fee Proposal G. Sub-consultants Provide the total cost by audit for the required scope of services. Provide an hourly rate schedule for any additional services the District may request that are not involved in the normal audit process outlined in the scope of services. List any sub consultant(s) anticipated on this project, along with their specific tasks and references and experience. H. Reporting Requirements The initial contract for the Performance Auditor will be for the three fiscal years July June 30, 2017; July 1, 2017 June 30, 2018; and July 1, 2018 June 30, Performance audits shall be provided as follows: Period Covered Type of Report Due Date July 1, 2016 June 30, 2017 Annual Audit January 31, 2018 July 1, 2017 June 30, 2018 Annual Audit January 31, 2019 July 1, 2018 June 30, 2019 Annual Audit January 31, 2020 I. Insurance Information Be prepared to provide a certificate of your firm s errors and omissions and professional liability insurance coverage upon your firm s selection. J. Failure to Complete Work In the event the Performance Auditor is unable to complete the work as required, the District expressively and specifically reserves the right to terminate the agreement and to engage another Performance Auditor as necessary to complete the work provided by Education Code K. Equal Opportunity It is the policy of the District that in connection with all work performed under contracts, there will be no discrimination against any prospective or active employee engaged in the work because of race, color, ancestry, national origin, religious creed, sex, age, or marital status. Consultant agrees to require like compliance by any sub consultant employed on this project. 11

13 VI. RESPONSE FORMAT Responses are required for Part V, Proposal Content, sections A through K. Responses to each section must be identified by the applicable section title. VII. EVALUATION CRITERIA The committee evaluating the proposal will base the selection on criteria that includes, but is not limited to, the following un-prioritized attributes: Adherence to the specified format; Completeness of the proposal; Acceptable and verifiable references; Level of service and support; Experience, professional, and technical expertise of staff; Proposer s demonstration of project knowledge; and Fee proposal. VIII. SELECTION CRITERIA Following the evaluation of submittals, interviews may be held for some or all firms. If scheduled, we will contact you regarding a specific interview time. For scheduling purposes, please include a contact person and phone number in your written response. The District will evaluate the responses to the RFP, and recommend award of contract to the Board of Education. IX. OTHER PERTINENT INFORMATION CONDITIONS FOR PROPOSAL ACCEPTANCE-This Request for Proposals does not commit the District to award a contract or to pay any costs incurred for any services. The District, at its sole discretion, reserves the right to accept or reject any or all proposals received. All proposals will become the property of the West Contra Costa Unified School District. Any proprietary information contained in the proposal should be clearly identified. *** End of RFP *** 12