REQUEST FOR PROPOSALS FOR AUDIT SERVICES

Transcription

1 REQUEST FOR PROPOSALS FOR AUDIT SERVICES The Town Council of the Town of Chapel Hill (hereinafter called the Town ) invites qualified independent auditors (hereinafter called auditor ) having significant governmental accounting and auditing experience performing audits consistent with the specifications outlined in this Request for Proposal (RFP) to submit a proposal. Type of Audit The audit will encompass a financial and compliance examination of the Town s Comprehensive Annual Financial Report in accordance with the laws and/or regulations of the State of North Carolina, which include requirements for the minimum scope of the audit. The financial and compliance audit will cover federal, state, and local funding sources in accordance with generally accepted auditing standards; Governmental Auditing Standards; the Single Audit Act of 1984; the Single Audit Act Amendments of 1996; the provisions of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, including revisions published in Federal Register June 27, 2003 and June 26, 2007; the State Single Audit Implementation Act; and all other applicable laws and regulations. Time Period The Town intends to continue the relationship with the auditor for no less than five years on the basis of annual negotiation after the completion of the first year contract. Each year after negotiation has taken place an annual contract documenting the terms of the audit will be signed. Since one governing board may not obligate future governing boards, the remaining years of the agreement are subject to annual governing board approval. Requirements July 1, 2016 to June 30, 2017 July 1, 2017 to June 30, 2018 July 1, 2018 to June 30, 2019 July 1, 2019 to June 30, 2020 July 1, 2020 to June 30, 2021 The audit must be conducted in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, including revisions published in Federal Register June 27, 2003 and June 26, 2007; the State Single Audit Implementation Act, and any other applicable procedures for the audit of a government s financial statements prepared in accordance with GAAP. Page 1

2 The Town prefers interim fieldwork be completed in early June. Year-end field work for the audit should be substantially completed by September 30 and the final audit must be completed and reports rendered four months following the fiscal year end (October 31). Forty (40) copies of each audit report, management letter, and other applicable reports must be supplied to the Town within the time frame cited above. In addition, the auditor is responsible for submitting the required two copies to the staff of the Local Government Commission (LGC). Any other copies required will be charged on an as needed basis in addition to the quoted fee. The financial audit opinion will cover the financial statements for the governmental activities, the business-type activities, the financial statements of the aggregate discretely presented component units, each major fund, and the remaining fund information, which collectively constitutes the basic financial statements. The combining and individual financial statements, schedules, and related information are not necessary for fair presentation, but will be presented as additional analytical data. This supplemental information, as required by GASB 34, will be subjected to the tests and other auditing procedures applied in the audit of the basic financial statements, and an opinion will be given as to whether the supplemental information is fairly stated in all material respects in relation to the financial statements taken as a whole. The auditor shall express an opinion on the budgetary comparison information for the general fund, the major funds, and any annually budgeted special revenue funds. An opinion will not be given on the Management Discussion and Analysis. The working papers shall be retained and made available upon request for no less than three years from the date of the audit report. In the event that circumstances arise during the audit that require work to be performed in excess of the original estimates, any additional costs will be negotiated prior to commencement of the work and an amended contract will be approved by the governing board and forwarded to the staff of the LGC for approval. Audit Contract and Payment of Audit Fees The audit contract must be approved by the staff of the Local Government Commission. Invoices are subject to approval by the LGC and the appropriate Grantor Agency, if applicable, prior to processing by the Town. Interim or progress billings will be accepted up to 75% of the total fee prior to submission of the audited financial statements to the staff of the Local Government Commission and their approval of the audited financial statements. Other Services The Town will prepare the Comprehensive Annual Financial Report (CAFR). The auditor will review the CAFR for submission to GFOA s Certificate of Excellence in Financial Page 2

3 Reporting program and offer assistance with technical questions relating to the submission. The auditor will assemble, type and print the audited financial statements. Page 3

4 Description of Selection Process Three (3) copies of each section of the proposal should be submitted at the time and place indicated under the section entitled Time Schedule for Awarding Contract. Proposals will be submitted in two sections. The first section will be comprised of the audit firm s prior experience and qualifications of its personnel in performing governmental audits. The Town will evaluate the auditor on experience and technical qualifications. The top five firms from the first section will have their second section cost proposal opened and evaluated. The firm best meeting the experience, audit approach and cost requirements will be selected. Please keep in mind that cost, while an important factor, will not be the sole determining factor. The lowest bid will not be automatically be awarded preferential consideration. The Town reserves the right to reject any or all bids, waive technicalities, and to be the sole judge of suitability of the services for its intended use and future specifically reserve the right to make the award in the best interest of the Town. Failure to respond to any requirements outlined in the RFP, or failure to enclose copies of the required documents, may disqualify the bid. First Section The first section should address the requested information below. The corresponding responses should begin with the number below for the requested information. 1. Indicate the number of people (by level) located within the local office that will handle the audit. 2. Provide a list of the local office s current and prior government audit clients, indicating the type(s) of services performed, and the number of years served for each. Responsive firms should include any relevant information regarding audits performed on financial statements prepared under the new reporting model. 3. Indicate the experience of the local office in providing additional services to government clients by listing the name of each government, the type(s) of service performed, and the year(s) of the engagement. 4. Describe your audit organization s participation in AICPA-sponsored or comparable quality control programs (peer review). Provide a copy of the firm s current peer review. Page 4

5 5. Describe the professional experience in governmental audits of each senior and higher level person assigned to the audit, the years on each job, and his/her position while on each audit. Indicated the percentages of time each senior and higher-level personnel will be on site. Again, relevant experience with the new reporting model should be clearly communicated. 6. Describe the relevant educational background of each person assigned to the audit, senior level and higher. This should include seminars and courses attended within the past three years, especially those courses in governmental accounting and auditing. 7. Describe the professional experience of assigned individuals in auditing relevant government organizations, programs, activities, or functions (e.g., utilities, solid waste, transit, airports, or health authorities and school systems). 8. Describe any specialized skills, training or background in public finance of assigned individuals. This may include participation in State or national professional organizations, speaker or instructor roles in conferences or seminars, or authorship of articles and books. 9. Provide names, addresses, and telephone numbers of personnel of current and prior governmental audit clients who may be contacted for reference. 10. Describe the firm s Statement of Policy and Procedures regarding independence under Government Auditing Standards (Yellow Book), Amendment 3. Provide a copy of the firm s Statement of Policy and Procedures. 11. Describe the firm s liability insurance coverage arrangements as evidence that the firm is adequately insured to cover claims. 12. Describe any regulatory action taken by any oversight body against the proposing audit organization or local office. Second Section Proposals should include completed cost estimate sheets and any other necessary cost information in a separate, sealed envelope marked Cost Estimate. The Town plans to evaluate the qualifications of all firms submitting proposals before considering the Cost Estimate. This second section should consist of completed cost estimate sheets, which will include the following information: Page 5

6 1. Type of audit program used (tailor-made, standard government, or standard commercial). 2. Use of statistical sampling. 3. Use of computer audit specialists. 4. Organization of the audit team and the approximate percentage of time spent on the audit by each member. 5. Information that will be contained in the management letter. 6. Assistance expected from the Town s staff, if other than outlined in the RFP. 7. Tentative schedule for completing the audit within the specified deadlines of the RFP. 8. Specify costs using the format below for the audit year July 1, 2016 to June 30, For the four audit years which follow, list the estimated costs. The cost for the audit year ending June 30, 2017 is binding, while the four years which follow are estimated costs. A. Personnel costs Itemize the following for each category of personnel (partner, manager, senior, staff accountants, clerical, etc.) with the different rates per hour. 1) Estimated hours categorize estimated hours into the following: onsite interim work, year-end on-site work, and work performed in the auditor s office. 2) Rate per hour. 3) Total cost for each category of personnel and for all manpower costs. B. Travel itemize transportation and other travel costs separately. C. Cost of supplies and material itemize. D. Other costs completely identify and itemize. E. HUD Compliance Separate cost for A-133 audit verification for HUD. 9. Other information the firm may wish to provide. Page 6

7 Time Schedule for Awarding the Contract Proposals signed by authorized officials will be received by Zakia Alam, Purchasing and Contracts Manager via at until May 9, 2017 at 3:00 P.M. The Finance Office will review the proposals and make a recommendation to the Town Council on June 12, 2017, at which time the contract will be awarded. Pre-submittal questions should be submitted via to Amy Oland, Assistant Business Management Director at aoland@townofchapelhill.org by Friday, April 28, 2107 at 5:00 P.M. Responses to all questions received will be published in the form of an addendum on the Town s website on May 2, Page 7

8 Description of the Governmental Entity and Its Accounting System Entity The Town of Chapel Hill is a municipality in North Carolina with a population of 59,753. The governing body consists of a Mayor and eight Council members. The Town provides the following services to its citizens: police protection; fire protection; street maintenance; trash and refuse pickup; planning, inspections and code enforcement; parks and recreation; and library operations. The Town also operates a public housing program, a transit system, parking services and a stormwater fund. Based on the criteria set forth in GASB Statement 14, the Orange Water and Sewer Authority (OWASA) will be included as a discrete component unit in the Town s CAFR. The Town s most recent Comprehensive Annual Financial Reports are available on our website at the following link: Accounting Records & Accounting System The Town maintains all its accounting records at the finance office located in Town Hall at 405 Martin Luther King Jr Blvd, Chapel Hill, NC All accounting journals and subsidiary ledgers are maintained on MUNIS Financial Software. The following major financial applications are on the system: General Ledger Accounts Payable Payroll Revenue/Accounts Receivable Capital Assets Purchasing Budget The detailed tenant accounting records for the public housing operations are maintained on HAB Housing Software Solutions. Funds The town maintains the following funds: Governmental Funds: General Fund Page 8

9 Special Revenue Funds Community Development Entitlement Grant Projects Ordinance Fund Transit Grant Projects Ordinance Fund Public Housing Grant Projects Ordinance Fund Transitional Housing Fund Affordable Housing Fund Affordable Housing Development Reserve Fund Downtown Service District Fund Land Trust Fund Grants Fund Library Gift Fund Debt Service Fund Capital Projects Funds Capital Projects Ordinance Fund Capital Projects Fund Capital Reserve Fund Proprietary Funds: Enterprise Funds Transit Fund Public Housing Operating Fund Parking Services Fund Stormwater Fund Internal Services Funds Vehicle Maintenance Fund Vehicle Replacement Fund Computer Replacement Fund Budgeted revenues for annual funds are estimated at $102,326,252 in fiscal year In addition, the Town has approximately $63.2 million in general debt. Of the $63.2 million, $31.7 million were general obligation bonds. The long term debt also includes approximately $20.2 million in limited obligation bonds, $11.3 million in installment financing for equipment and land. The town maintains its Aaa bond rating from Moody s Investors Service and Standard and Poor s Corporation. The citizens of Chapel Hill approved a $40,300,000 bond referendum in November of A total of $9.0 million of these bonds was sold in February 2017, with a balance of $31.3 yet to be issued. Grants, Entitlements and Shared Revenues Reference should be made to the Town s CAFR for the year ended June 30, 2016 located at for the Schedule of Page 9

10 Expenditures of Federal and State Awards, Summary of Findings and Questioned Costs showing the major programs and Compliance Letters. Budgets The town budgets all funds on the modified accrual basis of accounting as required by North Carolina law. Appropriations are made at the departmental level. The town also maintains an encumbrance system. Both the budgetary and encumbrance systems are integrated with the accounting system to provide easy comparison with actual expenditures. Assistance Available to Auditor The Town will make available to the auditor sufficient help to pull and re-file records and prepare and mail all necessary confirmations. The Town utilizes Munis TCM for electronic document storage for accounts payable and journal entries. A trial balance with budgeted amounts will be made available. The following accounting procedures will be completed and documents prepared by the town s staff no later than September 15. The books of account will be fully balanced. All subsidiary ledgers will be reconciled to control accounts. All bank account reconciliations for each month will be completed. The unit s personnel will prepare the following items: General All normal year-end adjusting entries Working balance sheet for each fund Working statement of Revenues, Expenditures (Expenses), and Changes in Fund Balance (Retained Earnings) for each fund. Working Statement of Cash Flows where required A copy of the final budget as of June 30, the original budget and all amendments A copy of all contracts in force at the statement date A copy of all board policies Cash and Investments All bank reconciliations for all accounts at June 30 th List of outstanding checks, showing check number, payee, date and amount Schedule of all investments for all funds at the audit date Receivables Schedules of accounts, taxes and miscellaneous receivables as of the statement date Page 10

11 Other Assets Schedule of insurance coverage Schedule of inventories Capital Assets Schedule of all capital outlays during the audit year Schedule of all capital dispositions during the audit year Schedule of all contribution-in-aid for transit and public housing Current Liabilities Schedule of accounts payable Schedule of accrued payroll Long-Term Debt Computation of vested vacation payable as of June 30 th Debt schedule for each debt issue and related payments Grants Copies of grant agreements Budgets Financial reports Correspondence with grantor agencies, including any monitoring reports CFDA # and/or pass-through grant # Size and Complexity of the Town Personnel/Payroll a. Number of employees (full and part time) 764 b. Frequency of payroll Weekly 64 Biweekly 700 Property tax (collected by Orange and Durham counties including motor vehicles) Dollar amount of FY 2016 collections $39,638,269 Dollar amount of FY 2016 levy $39,789,825 Page 11

12 Major accounts receivable billings Purchasing Number of bills per year for each major billing activity: Stormwater Fees 1,250 Garbage/Compactor 230 ABC Licenses 170 Number of purchase orders issued per year 1,351 Bank Accounts Number of bank accounts 19 Average Monthly Activity Deposits/ Withdrawals/ Bank Account ACH Checks General Checking Impressed Payroll N/A 125 Investments Money Market 2 2 Investments (Bonds) 1/3 1/3 Housing General 35 2 Housing Security Deposits 4 2 Financing /Escrow Accounts 1/3 1/3 Attached is a sample of the Small Service Contract that will be used for the awarded bid. Page 12

13 STATE OF NORTH CAROLINA COUNTY OF ORANGE CONTRACT FOR {DESCRIPTION OF SERVICES TO BE PROVIDED UNDER THIS CONTRACT} This Contract is made and entered into by and between the Town of Chapel Hill, herein Town, and {Contractor s Full Legal Name}, herein Contractor, for services hereinafter described for the Town of Chapel Hill. This Contract is for {Description of Services to be Provided Under This Contract}. WITNESSETH That for and in consideration of the mutual promises and conditions set forth below, the Town and Contractor agree: 1. Duties of the Contractor: The Contractor agrees to perform those duties described in Exhibit A attached hereto and incorporated herein by reference. 2. Duties of the Town: The Town shall pay for the Contractor s services as set forth in Exhibit A. 3. Fee Schedule and Maximum Sum: Contract amount is not to exceed {insert a not to exceed amount}. Payment shall be made according to Exhibit A. 4. Billing and Payment: The Contractor shall submit a bill to the Town for work performed under the terms of this Contract. The Contractor shall bill and the Town shall pay the rates set forth therein. Payment will be made by the Town within thirty (30) days of receipt of an accurate invoice, approved by the contact person or his/her designee. 5. Indemnification and Hold Harmless: The Contractor agrees to indemnify and hold harmless the Town of Chapel Hill and its officers, agents and employees from all loss, liability, claims or expense (including reasonable attorneys fees) arising from bodily injury, including death or property damage to any person or persons caused in whole or in part by the negligence or willful misconduct of the Contractor except to the extent same are caused by the negligence or misconduct of the Town. 6. Insurance Provisions: The Town requires evidence of Contractor s current valid insurance (if applicable) in the amounts stated below during the duration of the named project and further requires that the Town be named as an additional insured for Comprehensive General Liability and Business Automobile policies. The required coverage limits are: 1) Comprehensive General Liability and Business Automobile - Page 13

14 $1,000,000 per occurrence and 2) Workers Compensation - $100,000 for both employer s liability and bodily injury by disease for each employee and $500,000 for the disease policy limit. 7. Non-Discrimination: The Contractor contractually agrees to administer all functions pursuant to this Contract without discrimination because of race, creed, sex, national origin, age, economic status, sexual orientation, gender identity or gender expression. 8. Federal and State Legal Compliance: The Contractor must be in full compliance with all applicable federal and state laws, including those on immigration. 9. E-Verify: The Contractor shall comply with the requirements of Article 2 of Chapter 64 of the North Carolina General Statutes. Further, should Contractor utilize a subcontractor(s), Contractor shall require the subcontractor(s) to comply with the requirements of Article 2, Chapter 64 of the General Statutes. Pursuant to North Carolina General Statute (c)(2), contracts solely for the purchase of apparatus, supplies, materials, and equipment are exempt from this E-Verify provision. 10. Iran Divestment Act Certification: Pursuant to (a) of the Iran Divestment Act ( Act ), Contractor hereby certifies that, as of the date of this Contract, Contractor is not identified in either the Final Divestment List ( List ) or Iran Parent and Subsidiary Guidance ( Guidance ) created and maintained by the North Carolina State Treasurer ( Treasurer ) as published on the Treasurer s website currently located at Divestment-Act-Resources.aspx. Further, in compliance with (b) of said Act, Contractor certifies that it will not utilize in performing this Contract any subcontractor identified in the List or Guidance. This provision applies only to contracts for which the total amount, including sales tax, is $1,000 or more. 11. Amendment: This Contract may be amended in writing by mutual agreement of the Town and Contractor. 12. Termination: Either party may terminate this Contract at any time by giving the other party thirty (30) days written notice of termination prior to the end of the term as described herein. 13. Interpretation/Venue: This Contract shall be construed and enforced under the laws of North Carolina. The courts and the authorities of the State of North Carolina shall have exclusive jurisdiction over all controversies between the parties which may arise under or in relation to this Contract. In the event of any dispute between the parties, venue is properly laid in Orange County, North Carolina for any state court action and in the Middle District of North Carolina for any federal court action. Contrary to any Page 14

15 provision that may be contained in any exhibit attached hereto the Town shall not consent to 1) resolving any dispute by means of arbitration and/or 2) waiver of a trial by jury. 14. Preference: In the event that the terms of any exhibit attached hereto are not consistent with the terms of this Contract, this Contract shall have preference; provided that where either any exhibit attached hereto or this Contract establishes higher standards for performance by either party, the higher standard, wherever located, shall apply. 15. Severability: The parties intend and agree that if any provision of this Contract or any portion thereof shall be held to be void or otherwise unenforceable, all other portions of this Contract shall remain in full force and effect. 16. Assignment: This Contract shall not be assigned without the prior written consent of the parties. 17. Entire Agreement: This Contract shall constitute the entire agreement of the parties and no other warranties, inducements, considerations, promises, or interpretations shall be implied or impressed upon this Contract that are not expressly addressed herein. All prior agreements, understandings and discussions are hereby superseded by this Contract. 18. Term: This Contract, unless amended as provided herein, shall be in effect until { }, 20{ }. [SIGNATURES ON FOLLOWING PAGE.] Page 15

16 This Contract is between the Town of Chapel Hill and {Contractor s Full Legal Name} for {Description of Services to be Provided Under This Contract}. IN WITNESS WHEREOF, the parties hereto cause this agreement to be executed in their respective names. {CONTRACTOR S FULL LEGAL NAME} SIGNATURE WITNESS PRINTED NAME & TITLE PRINTED NAME & TITLE TOWN OF CHAPEL HILL DEPARTMENT HEAD OR DEPUTY/TOWN MANAGER PRINTED NAME & DEPARTMENT ATTEST BY TOWN CLERK: TOWN CLERK TOWN SEAL Town Clerk attests date this the day of, 20. Approved as to Form and Authorization TOWN LEGAL STAFF This instrument has been pre-audited in the manner required by the Local Government Budget and Fiscal Control Act. FINANCE OFFICER DATE - Page 16