State College Area School District 131 West Nittany Avenue State College, PA REQUEST FOR PROPOSAL RFQ #

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1 State College Area School District 131 West Nittany Avenue State College, PA REQUEST FOR PROPOSAL RFQ # Release of RFQ: April 20, 2015 Due Date: May 12, 2015

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3 REQUEST FOR PROPOSAL AUDIT SERVICES TABLE OF CONTENTS PROPOSAL INSTRUCTIONS... 1 Address Instructions... 1 Delivery... 1 Proposal Format... 1 Decisions Regarding Proposals... 2 Bidder Inquiries...2 RFP Enhancements... 2 Presentations/Interviews....3 Review Criteria... 3 Estimated Time Table... 3 Proposal Validity... 3 Proprietary Information... 4 GENERAL TERMS AND CONDITIONS... 4 Mandatory Requirements... 4 BACKGROUND AND OBJECTIVES Background Objectives QUALIFICATIONS/SPECIFICATIONS.10 SCOPE OF AUDIT SERVICES 11 GENERAL SCOPE OF WORK..11

4 NON-FEDERAL PROGRAMS SCOPE OF WORK...12 TAX COLLECTOR COMPLIANCE 13 FEDERAL PROGRAMS SCOPE OF WORK..13 FEDERAL PROGRAMS OPINION 13 SINGLE AUDIT REPORT PACKAGE.14 RETENTION OF AUDIT WORKING PAPERS..17 ACCESS TO AUDIT WORKING PAPERS 17 TIME LIMIT OF AUDIT 17 COST AND PRICING DATA.17 UNACCEPTABLE WORK.18 AUDIT REPORT DISTRIBUTION.18 FRAUD AND ILLEGAL ACTS. 18 ADVISORY ASSISTANCE...19 PROPOSAL RESPONSE REQUIRED. 18 FEES SCHEDULE..20

5 STATE COLLEGE AREA SCHOOL DISTRICT REQUEST FOR PROPOSAL (RFP) AUDIT SERVICES The State College Area School District, through this request for proposal, is seeking a qualified independent certified public accounting firm, or firms, to provide auditing services for the District encompassing the 2014/15, 2015/16 and 2016/17 fiscal years as defined herein. Proposal Instructions Address Instructions Suppliers should prepare an original written proposal and five (5) copies signed by an officer of the firm who is authorized to bind such by contract. Such proposals should be submitted in a sealed envelope marked Audit Services proposal, RFP #2014/15-02, and addressed to the following: State College Area School District Mary Jenn Dorman, Board Secretary 131 West Nittany Avenue State College, PA Delivery Sealed proposals must be received to the above address no later than 1:30 p.m., prevailing time on Tuesday, May 12, Facsimile transmissions are not acceptable. Proposals submitted or received after that date will not be accepted or considered. Respondents may submit changes or addenda to their response in writing, signed in original ink by the original proposal signatory, and cross referenced clearly to the relevant proposal section, in a sealed envelope, prior to the proposal due date. Such changes/addenda must meet all requirements for the request for proposal. Respondents may not make unilateral changes, to include supplementation, unless specifically requested by the District as part of the evaluation and/or negotiating process as detailed within the Decisions Regarding Proposals paragraph on page 2 of this request for proposal. Proposals may be withdrawn up to 48 hours after the proposal due date. The method of transmittal of the proposal is at the Respondent s risk. Proposal Format Proposals should be prepared simply and economically, providing a straightforward, concise description of the Supplier s ability to meet requirements of the RFP. Responses to questions should be submitted in the same sequence as stated within the RFP. If a question or specification is not applicable, or if there is no response, so state.

6 Decisions Regarding Proposals The State College Area School District (SCASD) reserves the right to: Make all decisions regarding this request for proposal, including, without limitation, the right to decide whether a proposal does or does not substantially comply with the requirements of this RFP. Accept, reject, or negotiate modifications in any terms of Supplier s proposals or any parts thereof. Reject any or all proposals received. Waive any irregularity or technicality within a Supplier s proposal. The SCASD shall not be responsible for any cost incurred by the Supplier in the preparation of this proposal. It must be specifically understood that this RFP does not create any obligation on the part of the SCASD to enter into any contract or undertake any financial obligation with respect to the requirements referred to herein. Any Supplier, who expends time or money prior to award, does so at the Supplier s own risk and expense. The Supplier understands that, if selected, the SCASD reserves the right to provide its opinion publicly and privately regarding the Supplier s performance. Bidder Inquiries No negotiations, decisions, or actions shall be executed by any Supplier as the result of any oral discussions with any SCASD employee. Only those communications that are in writing shall be considered valid. Facsimile inquiries are acceptable at Inquires concerning this RFP shall be submitted to: State College Area School District Mr. Kevin M. Stahl, Director of Purchasing 131 West Nittany Avenue State College, PA kms57@scasd.org Answers to a Supplier s inquiry will be made available in writing to all RFP recipients. Please include a return facsimile number or address to facilitate a response. RFP Enhancements RFP recipients are encouraged to provide the SCASD with useful information that will improve the quality and/or price of all RFPs. In the event that an RFP recipient shares such useful information with the SCASD and such information requires a modification of the specifications, all RFP recipients will be notified of the information and the amendment to the specifications 2

7 and be entitled to modify their RFP, only with respect to the modification of the specifications, within a period of time stipulated by the SCASD. Presentations/Interviews Part of the proposal evaluation process may include a formal presentation by or interview with the selected highest ranking respondent(s). If invited, Suppliers should use this opportunity to provide evaluators with further insight regarding their proposal and to provide clarification and/or understanding of the services being offered. Review Criteria The SCASD will review all valid proposals with particular emphasis on: 1. Evidence that the Supplier clearly understands the scope of the audit services to be performed. 2. Supplier s services offered or proposal content. 3. Cost or fees for services provided to the District. 4. Professional qualifications of individuals assigned to the District. 5. Supplier s conformance to RFP specifications, requirements, terms, conditions, and provisions as outlined within the RFP. 6. Extent of Supplier s technical experience, stability, supporting resources, and management. 7. Flexibility of services. 8. References from other public clients with emphasis on Pennsylvania school districts (3 minimum). Estimated Time Table Issue RFP April 20, 2015 Last Day for Inquiries May 5, 2015 RFP Submittal May 12, 2015 Final Negotiations Late May, 2015 Contract Execution June, 2015 Commence Contract July 1, 2015 Proposal Validity Proposals should be considered valid for at least 180 days from the proposal submission deadline or as mutually agreed between the parties. 3

8 Proprietary Information Information provided in your response to this RFP will be held in confidence and will not be revealed or discussed with competitors. All material submitted becomes the property of the SCASD and may be returned only at the District s option. Proposals submitted become the property of the SCASD and may be reviewed and evaluated by district personnel and/or agents or consultants of the SCASD, except for competitors, at the discretion of the District regardless of statements contained within the Supplier s response to the contrary. The SCASD has the right to use any or all concepts presented in any reply to the RFP. Selection or rejection of a proposal does not affect this right. Information provided by the SCASD to the requesting Supplier for the purpose of providing a response to the RFP is the property of the SCASD. As such, said information is to be kept in strictest confidence and used only for the intended use of this RFP. This RFP shall not be distributed to others without the express written consent of the SCASD. General Terms and Conditions Definitions Contract means the entire written agreement between the parties, including, but not limited to, the request for proposal and its specifications, terms and conditions, solicitation instructions, solicitation addenda, contract amendments, and any SCASD purchase order issued. Supplier means a person or organization with whom the State College Area School District (SCASD) has contracted for the provision of goods and services under a contract, and is synonymous with Vendor, Respondent, Seller, Contractor, Company, Practice, Financial Institution, Bank, Supplier or Audit Firm. Service means all benefits provided to the District from the Supplier. SCASD means the State College Area School District and is synonymous with Buyer, District, or Owner. Mandatory Requirements Contract Term The contract will be for a three (3) year period effective for the 2014/15, 2015/16 and 2016/17 fiscal years with the possibility for two (2) additional 1-year extensions given the mutual consent of both parties. Such desire to extend must be expressed in writing not less than 30 days prior to the expiration of the initial contract. 4

9 Contract Law Any contract resulting from this RFP will be subject to the laws of the Commonwealth of Pennsylvania and the Pennsylvania Department of Education. The total contract shall include this, the Supplier s proposal response, and the negotiated and executed contract between the parties. Contract Assignment No portion of any resulting contract may be sublet, sub-contracted, or otherwise assigned by the Supplier without the prior written consent of the SCASD. Indemnification The work performed by the Supplier shall be at the risk of the Supplier exclusively. To the fullest extent permitted by law, Supplier shall indemnify, defend (at Supplier s sole expense) and hold harmless the Owner, joint ventures, representatives, members, designees, officers, directors, employees, agents, successors and assigns ( Indemnified Parties ) from and against any and all claims for bodily injury, death or damage to property, demands, damages, actions, causes of actions, suits, losses, judgments, obligations and any liabilities, costs and expenses (including but not limited to investigative and repair costs, attorneys fees and costs) ( Claims ) which arise or are in any way connected with the work performed, materials furnished, or services provided under this agreement by Supplier or its agents. These indemnity and defense obligations shall apply to any acts or omissions, negligent or willful misconduct of the Supplier, its employees or agents, whether active or passive. Said indemnity and defense obligations shall further apply, whether or not said claims arise out of the concurrent act, omission or negligence of the Indemnified Parties, whether active or passive. Supplier shall not be obligated to indemnify or defend Owner for claims found to be due to the sole negligence or willful misconduct of Indemnified Parties. Supplier s indemnification and defense obligations hereunder shall extend to claims occurring after this agreement is terminated as well as while it is in force, and shall continue until it is finally adjudicated and any and all actions against the indemnified parties for such matters which are indemnified hereunder are fully and finally barred by applicable laws. Contract Changes During the period of the contract, no changes will be permitted to any of the conditions and specifications unless the Supplier receives written approval through the SCASD for such changes. 5

10 Contract Cancellation Cancellation for cause: The SCASD may terminate this agreement for cause based upon the failure of the Supplier to comply with the terms and/or conditions of the agreement provided that the SCASD shall give the Supplier written notice specifying the Supplier s failure. If within 30-days after receipt of such notice, the Supplier shall not have either corrected such failure and thereafter proceeded diligently to complete such correction, then the SCASD may, at its option, place the Supplier in default and the contract shall terminate on the date specified in such notice. In addition, the SCASD is authorized and empowered to have such other party or parties complete the work in conformance with the specifications, in such manner, as it shall select at the expense of the successful RFP vendor, or to cancel the contract reserving to the district all rights for damages that may be incurred by the SCASD. The District may terminate this agreement immediately should information be received related to the declining credit worthiness of the audit firm. Assignment/Subcontract/Successors Supplier shall not assign, sell, transfer, or subcontract rights, or delegate responsibilities, in whole or in part, without the prior written approval of the SCASD. No such written approval shall relieve the Supplier of any obligations, and any transferee or subcontractor shall be considered the agent of the Supplier. The Supplier shall remain liable to the SCASD as if no such assignment, transfer, or subcontract had occurred. Right to Audit The awarded Supplier is responsible for keeping accurate and reasonable records related to its performance and obligations under any executed agreement. In particular, records will be kept documenting any price, cost or budget computations required under the contract. The Supplier agrees that the SCASD or its duly authorized representative has the right to audit any directly pertinent books, documents, papers and records related to transactions and/or performance of the terms and conditions of any contract. The Supplier shall make available to the SCASD or its agents all such records and documents for audit on the Supplier s premises during regular and reasonable working hours. The Supplier further agrees to disclose within 90 days of receipt, any independent auditors reports, which bear directly on the performance or administration of the contract. The right to audit shall include periodic examinations of records throughout the term of the contract and for a period of seven (7) years after its termination. The right to audit shall also apply to agents and subcontractors hired by the Supplier for the purpose of fulfilling the contract. In the event that audits discover substantive findings related to fraud, misrepresentation or nonperformance, the SCASD may recoup the costs of the audit work from the Supplier. 6

11 Permits, Licenses, Taxes and Certificate of Authority The Supplier shall procure all necessary permits and licenses and abide by all applicable laws, regulations, and ordinances of all federal, state, and local governments under which the contract will be performed. The Supplier must furnish certification of authority to conduct business in the Commonwealth of Pennsylvania as a condition of contract award. Such registration is obtained from the Secretary of State, who will also provide the certification thereof. The Supplier need not be registered as a prerequisite for responding to this request for proposal. The Supplier shall be responsible for any and all taxes and assessments arising out of the operation, but not limited to, payroll and personal property taxes, franchise taxes, sales and use taxes, and income taxes. All prices stated shall be net prices including delivery and exclusive of taxes from which the SCASD is exempt. Exemption certificates will be provided by the SCASD upon request by the awarded Supplier. W-9 Form In accordance with federal law, the awarded Supplier must complete, sign, and return to the SCASD the Internal Revenue Service Request for Taxpayer Identification Number and Certification form. This is commonly referred to as the W-9 form. Payments will not be rendered to the Supplier by the SCASD for services rendered until the completed W-9 form has been received. Insurance Upon execution of an agreement, and prior to the Supplier s commencing any work or services, the Supplier shall carry commercial general liability insurance on ISO form CG (or a substitute form providing equivalent coverage) and the Supplier shall provide the SCASD with a Certificate of Insurance and Additional Insured Endorsement on ISO form CG (or a substitute form providing equivalent coverage) or the combination of ISO forms CG and CG (or a substitute form providing equivalent coverage) naming the SCASD as Additional Insureds thereunder. Additional Insured coverage shall apply as primary insurance with respect to any other insurance afforded to the SCASD. The coverage available to the SCASD, as Additional Insureds, shall not be less than $1 million Each Occurrence, $2 million General Aggregate, $2 million Products/Completed Operations Aggregate, and $1 million Personal and Advertising Injury limits. Such insurance shall cover liability arising from premises, operations, independent contractors, productscompleted operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract). There shall be no endorsement or modification of the Commercial General Liability form arising from pollution, explosion, collapse, underground property damage or work performed by the Supplier. All 7

12 coverage shall be placed with an insurance company duly admitted in the State of Pennsylvania and shall be reasonably acceptable to the SCASD. All Suppliers insurance carriers must maintain an A.M. Best rating of B++ or better. Coverage shall be afforded to the Additional Insureds whether or not a claim is in litigation. The insurance coverage required in the previous paragraph shall be of sufficient type, scope and duration to ensure coverage for the SCASD for liability related to any manifestation date within the applicable statutes of limitation and/or repose which pertain to any work performed by or on behalf of the SCASD. Each Certificate of Insurance shall provide that the insurer must give the SCASD at least 30 days prior written notice of cancellation and termination of the Supplier s coverage thereunder. Not less than two weeks prior to the expiration, cancellation or termination of any such policy, the Supplier shall supply the SCASD with a new and replacement Certificate of Insurance and Additional Insured endorsement as proof of renewal of said original policy. Said new and replacement endorsements shall be similarly endorsed in favor of the SCASD as set forth above. Additionally, and prior to commencement of the work, the Supplier shall provide the SCASD with a Certificate of Insurance showing liability insurance coverage for the Supplier and any employees for Workers Compensation, Employers Liability and Automobile Liability. In the event any of these policies are terminated, Certificates of Insurance showing replacement coverage shall be provided to the SCASD. Coverage limits shall be no less than the following: Workers Compensation and Employers Liability Insurance: As required by law and affording 30 days written notice to the SCASD prior to cancellation or non-renewal. Limits are to be a minimum of $100,000. each Accident; $500,000. Disease policy limit; $100,000. Disease each Employee. Business Automobile Liability Insurance: Written in the amount of not less than $1 million Each Accident. Umbrella Liability Insurance: The coverage shall not be less than $2 million Each Occurrence, $2 million Aggregate. Such insurance shall provide coverage over and above the stated General and Automobile liability limits. 8

13 Discrimination Prohibited According to 62 Pa.C.S.A. 3701, the Supplier agrees that: 1. In the hiring of employees for the performance of work under the contract or any subcontract, no Supplier or any person acting on behalf of the Supplier shall by reason of gender, race, creed or color discriminate against any citizen of this Commonwealth who is qualified and available to perform the work to which the employment relates. 2. No Supplier or any person on their behalf shall in any manner discriminate against or intimidate any employee hired for the performance of work under the contract by reason of gender, race, creed, or color. 3. The contract may be canceled or terminated by the District and all money due or to become due under the contract may be forfeited for a violation of the terms or conditions of that portion of the contract. Human Relations Act The provisions of the Pennsylvania Human Relations Act, Act 222 of October 27, 1955 (P.L. 744) (43 P.S. Section 951, et. seq.) of the Commonwealth of Pennsylvania prohibit discrimination because of race, color, religious creed, ancestry, age, sex, national origin, handicap or disability, by employers, employment agencies, labor organizations, Suppliers and others. The Supplier shall agree to comply with the provisions of this Act as amended which is made part of this specification. Your attention is directed to the language of the Commonwealth s non-discrimination clause in 16 PA. Code Cash Allowances Cash allowances are prohibited. Non-Collusion Affidavit The Supplier, in accordance with Pennsylvania Department of Education requirements, must sign an affidavit of non-collusion which has been enclosed hereto. This document must be signed and returned with your proposal response. Any Supplier that submits more than one proposal in such a manner as to make it appear that one of the proposals submitted is competitive with that of a different respondent, or any two or more Suppliers agree to fix their respective proposals in such a manner as to be awarded the contract shall be disqualified from further consideration of award and shall be subject to any penalties under applicable law. 9

14 Bribery Any Supplier that attempts to influence a district employee to award this contract to such Supplier s financial institution by promising to provide or by providing to such district employee any gratuity, entertainment, commission, or any other gift, in exchange for a promise to award the contract to such financial institution shall be disqualified from further consideration of award and shall be subject to any penalties under applicable law. Conflict of Interest Any financial institution that wittingly knows of any district employee having a material direct or indirect financial interest in such financial institution shall be required to submit a written statement detailing such interest with any proposal submitted. Background The State College Area School District operates its educational program, food services program, athletics program, student activity programs, construction, and capital reserve programs through funds received from local taxpayers, the Commonwealth of Pennsylvania and the United States Federal government. In total, the District has an annual operating budget in excess of $126,000,000 and employs approximately 1,600 individuals, both full-time and part-time. Objectives The objective of this request for proposal is to identify that audit firm, or firms, that can offer the highest quality service at the best value to the District. The audits will cover all programs of the District, including, but not limited to, the general fund, food service fund, athletic fund, student activity funds, capital reserve fund, debt service fund, construction fund and Federal programs. The District, as evidenced by this request for proposal, is interested in obtaining the best mix of services to meet our specific auditing requirements. The District prefers to obtain audit services, included in this request for proposal, from a sole Supplier. However, the District reserves the right to utilize more than one Supplier for service if doing so is in the best interest of the District. Qualifications/Specifications The following constitute the minimum qualifications and/or certifications required for consideration. 1. The auditors assigned to perform the audit must collectively possess adequate professional proficiency for the task at hand. The Commonwealth of Pennsylvania has defined qualified auditors to perform single audits to be Certified Public Accountants (CPA) or Public Accountants (PA) who are: 10

15 a. Registered under Act 140 P.L. 318, May 26, 1947, entitled The CPA Law, as amended by Act 286, P.L. 1280, dated December 8, b. Conforming to the independence requirements and professional standards promulgated by the GAO Audit Standards. 2. Eligible Suppliers shall meet the following specifications: a. Shall have no obligations or interests that conflict with the best interests of the State College Area School District. b. Shall have successfully complied and be 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 program. c. Shall have credible experience auditing Pennsylvania school districts. d. Shall be familiar with the Pennsylvania School Systems Manual of Accounting and Related Financial Procedures of Pennsylvania School Systems, the Pennsylvania Public School Code of 1949, as amended and thoroughly familiar with the Federal and State Single Audit Act regulations and guidelines and recent bulletins and directives related to school finance issued by the Pennsylvania Department of Education (PDE) and the Pennsylvania Auditor General s Office. e. Shall be knowledgeable of the regulations and accounting statements of the Government Accounting Standards Board, including GASB statements No. 34 and No. 45. GASB Statement #34 is of particular importance. f. Shall have at least three (3) Pennsylvania public school districts as clients. g. Shall have the personnel capacity to provide services on a timely basis. Scope of This section describes the services that the District intends to use as an audit customer. General Scope of Work The audit will cover all programs of the District including, but not limited to, the general fund, food service fund, athletic fund, student activity funds, capital reserve fund, debt service fund, construction funds and Federal programs. 11

16 Non-Federal Programs Scope of Work The audit will encompass a financial and internal control audit of the financial records and systems of the District for school years ending June 30 th. The audit report must give an opinion on the fair presentation of the District s general purpose financial statements in accordance with generally accepted accounting principles and must include a review of the internal controls of the District s accounting systems which will include a review of the following, at minimum: a. Board Minutes b. Verification of receipts c. Expenditures d. Journal entries e. Budget transfers f. Payroll system g. Verification of assets and liabilities h. Reconciliation of bank statements and investments i. Subsidiary records including insurance The audit firm shall provide to the District a Management Letter listing recommendations for improvements in school district procedures. The Management Letter will include specific rationale as to why the audit firm is suggesting changes to the District procedures. Interim audits by the audit firm within the audited year are encouraged. The audit firm shall provide to the Board of School Directors a certified audit of the District s financial records encompassing all funds, including the Food Service Fund and the Student Activities Fund. The District s Business Administrator shall determine the number of bonded copies of the report the audit firm must provide. The general purpose financial statements must include: a. Combined balance sheet-all fund types and account groups b. Combined statement of revenues, expenditures and changes in fund balances- All governmental fund types and expendable trust funds. 12

17 c. Statement of revenues, expenditures and changes in fund balances, budgeted and actual-general and special funds revenue funds. d. Combined statement of revenues, expenses and changes in fund balances- All proprietary fund types and non-expendable trust funds. e. Combined statement of changes in financial position- All proprietary fund types and non-expendable trust funds. f. Notes to financial statements. Tax Collector Compliance a. Report on tax collector compliance with 1998 P.L. 1294, No. 169 for the contracted fiscal years. Federal Programs Scope of Work The audit will also encompass a financial and compliance audit as outlined in the Single Audit Act of For a review of each program s compliance, the audit firm will use the Compliance Supplement for Single Audits of State and Local Governments and AICPA Audit and Accounting Guide for Audits of State and Local Government Units, revised 1986 and the PDE audit guidelines for single audit. As required, the Audit Firm shall design its own procedures to supplement existing audit steps in order to form an opinion. In addition to the audit guides, the Audit Firm shall apply its own standards and procedures and those developed by the American Institute of Certified Public Accounts (AICPA), Generally Accepted Auditing Standards, (Statement of Auditing Standards (SAS) Number 1. Codification of Auditing Standards and Procedures) and those developed by the U.S. General Accounting Office (Standards for Audit for Government Organizations, Programs, Activities and Functions and Guidelines for Financial and Compliance Audits of Federally Assisted Programs). Federal Programs Opinion The Audit Firm shall perform sufficient work to issue a report and render an opinion. All audit work which can be performed on existing records must be completed in accordance with the pertinent audit guides. Findings shall be made, costs questioned or recommended for disallowance, corrective measures recommended and a report issued. All reports shall contain the appropriate Opinion or Disclaimer of Opinion in accordance with the Statement of Auditing Standards (SAS) Number 2, Reports on Audited Statement issued by AICPA in October, 1979 (Volume 1, AICPA Professional Standards, Section 509). 13

18 Single Audit Report Package The Single Audit Report Package shall contain a table of contents indicating the following sections by page number. All pages must be numbered. a. Management letter- Includes recommendations and suggestions for changes and improvements in District operations. b. Single Audit Report distribution list- Lists the agencies that will receive the Single Audit Report. c. Transmittal letter containing: - Name of local education agency. - Period covered by the report. - A statement that the audit was done to fulfill requirements of the Office of Management and Budget s Circular A A summary of what the audit examination covered. - A statement as to whether a management letter was prepared. d. Opinion on general purpose financial statements. e. General purpose financial statements. f. Report on compliance based upon an examination of general purpose financial statements performed in accordance with the standards issued by GAO. This report shall include the following: - Disclosure of events of non-compliance that may have a material effect on the financial statements of the District or its future operations. - A statement that the examination was performed in accordance with GAO Standards for Audit of Governmental Organizations, Programs, Activities and Functions. g. Report on internal accounting controls at the general purpose financial statement level. The Report on internal accounting controls of the District shall include the following: 14

19 - Identification of all accounting controls, any material weaknesses found and which controls should not be relied upon. - Audit firm s comments on material control weaknesses. - Other specifications as stated in the Single Audit Act of A statement that the examination was performed in compliance with the GAO Standards for Audit of Governmental Organizations, Programs, Activities and Functions. h. Opinion on the Schedule of Federal Financial Assistance. i. Schedule of Federal Financial Assistance The Schedule of Federal Financial Assistance shall include the following information: - Federal grantor/pass-through grantor/project title. - CFDA number (catalog of Federal domestic assistance number). - Grantor contract number. - Grant period. - Total grant award. - Accrued (deferred) grant revenue as of July 1 st - Total cash received. - Revenue recognized. - Expenditures. - Accrued (deferred) grant revenue as of June 30 th - Source of Federal receipts. - Calculation of the 50% rule. j. Report on internal control (accounting and administrative) at the Federal financial assistance program level. This report shall include the following information: 15

20 - Identification of all accounting controls, any material weaknesses found and which controls should not be relied upon. - Audit Firm comments on material control weaknesses. - Other specifications as stated in the Single Audit Act of A statement that the examination was performed in compliance with the GAO Standards for Audit of Governmental Organizations, Programs, Activities and Functions and OMB Circular A A statement that the complete study and evaluation was performed for at least fifty percent (50%) of total Federal financial assistance, including all major programs. - A statement that a preliminary review was performed for all Federal financial assistance programs. k. Report on Compliance with Laws and Regulations related to Major and Non-Major Federal Financial Assistance Programs This report shall include the following information: - A statement of positive assurance on items tested for compliance. - A statement of negative assurance on items not tested for Compliance. - A statement of all instances of noncompliance with recommendations for corrective action. - Other specifications as stated in the Single Audit Act of A statement that the examination was performed in compliance with GAO Standards for Audits of Governmental Organizations, Programs, Activities and Functions and OMB Circular A A statement which clearly describes the extent of the examination and the responsibilities that the auditor assumes. l. Schedule of findings and questioned costs. This schedule shall identify and quantify the nature and extent of the examination and disclose the dollar impact of all questioned costs cited for noncompliance with terms of agreement or provisions of laws and regulations and effect upon the financial statements whether material or immaterial. Questioned costs are contingencies and are not 16

21 accrued in the financial statements unless the criteria specified in FASB Statement Number 5, Accounting for Contingencies, are met. Each finding shall contain: - Condition, cause, effect, criteria and discussion of supporting facts and analysis and auditor s recommendations. m. A Response and Corrective Action Plan recommendation for each finding and any weaknesses disclosed within the examination. n. Report on the status of prior year s compliance findings and internal control weaknesses. o. Signature - An officer of the Auditing Firm shall sign and date all of the reports. Retention of Audit Working Papers The Audit Firm shall retain all working papers and reports for a minimum of seven (7) years from the date of the audit report. An appropriate Federal or state agency or the District must make audit working papers available upon request. Access to Audit Working Papers The District and any appropriate Federal or state agency shall have free and unrestricted access to the working papers, records, other supporting documentation and reports prepared, or in the process of being prepared, in connection with the audits performed under this proposal. Free and unrestricted access to and the right to require submittal of the documentation to the District or appropriate agency shall exist during the contract term and shall continue for seven (7) years from the date of submission of the final invoice or until litigation, audit or claim have been fully resolved, if later. Time Limit of Audit The Audit Firm shall execute and complete the annual audit between July 1 st and October 1 st of the subsequent fiscal year. The Audit Firm shall complete and have available the audit reports by October 15 th of the subsequent fiscal year. Cost and Pricing Data Proposals must be for a total amount for the audit of both non-federal and Federal programs. Fee structures for staff and costs should be included in the event that the District requests the Audit Firm to accomplish additional tasks. 17

22 Unacceptable Work If the Audit Firm s audit reports are determined to be unacceptable by the District, AICPA standards or the Standards for Audit of Governmental Organizations, Programs, Activities and Functions and Guidelines for Financial Compliance Audit of Federally Assisted Programs, issued by the Auditor General, the Single Audit Act of 1984 and OMB Circular A-133, the Audit Firm may, by written request, be required to re-audit at its own expense and submit a revised acceptable audit report. The District has the right to reject the auditor s audit report for a period of one (1) year after the District has submitted the audit report to state and Federal agencies. If the Audit Firm fails to comply with any of the terms of this proposal, the District may terminate this contract. Audit Report Distribution The Audit Firm shall file, on behalf of the District, the annual auditor s report to the Commonwealth of Pennsylvania, the Bureau of Census and required Federal agencies. The Audit Firm shall provide assistance to the District in completing the annual financial report that must be filed by the District with the Commonwealth. Fraud and Illegal Acts If, during the course of the examination, the auditors uncover indications of possible fraud or other illegal acts, the auditors shall immediately notify the officers of the Board of Education and appropriate state and Federal agencies, in writing. The auditors shall perform sufficient fieldwork to be able to clearly describe and document the infraction(s). Advisory Assistance The Audit Firm shall be available to provide advisory assistance to District administration throughout the school year including, but not limited to, assistance with audits of state and Federal agencies. The District will maintain its financial records and the Audit Firm will advise as may become necessary to enable the District to comply with the requirements of regulatory agencies. The Audit Firm shall provide year-end adjusting journal entries to District business staff, assist in reconciling accounts as needed and assist in the preparation of year-end financial statements and the annual financial report, as needed. 18

23 Proposal Response Required Please provide your written response to the following questions/prompts. 1. Please indicate any and all deviations from the terms and conditions, qualifications/specifications, and scope of audit services as specified within this request for proposal. 2. Please enclose copies of your last three (3) years audited financial statements. The successful Audit Firm shall provide the District with subsequent annual audit reports a they become available. 3. Provide a list of Pennsylvania school districts for which your firm has has successfully provided audit services during the last three (3) years. If you cannot provide such, provide a list of government or other institutional clients for which your firm has provided audit services three (3) references should be provided. Indicate the type of service performed and years of engagement. 4. Letter of Transmittal: Briefly state the Proposer s understanding of the tasks to be accomplished and make a positive commitment to perform the tasks within the required time period. 5. Profile of the Audit Firm: State whether your audit organization is national, regional or local. Indicate the number and qualifications/credentials from the office that would perform the audit. 6. Describe your firm s participation in AICPA sponsored quality control programs. 7. Describe your firm s approach to the audit including, at minimum, the following: a. Type of audit program utilized. b. Use of statistical sampling. c. Use of computer audit specialists. d. Organization of the audit team and the approximate time expected to be spent on the audit. e. Provide a sample management letter. f. Provide a sample of a district information or records request list. 19

24 g. Provide a detailed narrative explaining your approach to this audit. h. Provide a tentative audit activity schedule or timeline for the next school year s audit. i. Assistance expected from District staff. 8. Describe the public school audit experience of each individual to be assigned to the audit. Include the position level held while on each audit. Indicate the time that the senior auditor will be on-site. A resume for each individual is suggested. for Auditing Services First, the undersigned has carefully examined this request for proposal for auditing services in accordance with the specifications and agrees to furnish and perform the specified audit services for the District within the time limits specified and for the stated fees herein. Second, the undersigned agrees to enter into a written contract to furnish such materials and services as stipulated in the request for proposal specifications. Third, the Audit Firm agrees to maintain a record of their audit time by Federal program so that the cost of the audit can be allocated to various Federal programs. Fourth, if services are performed by the Audit Firm in addition to the specified audit services, the Audit Firm shall supply time records and service descriptions to validate any invoiced charges. Fifth, the Audit Firm agrees to perform the auditing services for the fees quoted as follows: Auditing Services for Auditing Services for Auditing Services for Auditing Services for (optional) Auditing Services for (optional) $ $ $ $ $ 20

25 Name of Audit Firm Officer s Title Officer s Name Signature Date 21

26 State College Area School District Organization Chart Business and Accounting Offices TITLE NAME YRS. W/DISTRICT Business Administrator Randy Brown 10 Responsibilities: Member of Superintendent s Cabinet; supervise Assistant Business Administrator and Directors of Physical Plant and Transportation. Business Office Secretary Marie Caster 33 Responsibilities: Provide clerical assistance to Business Administrator and Assistant Business Administrator; invoice for tuition of non-resident students and services provided by our district; generate requests for payment of charter school tuition. Ass t. Business Administrator Donna Watson 3 Responsibilities: Assist in the overall financial and operational management of the school district; supervise director of food service, purchasing manager and printing manager; general supervision of the accounting and payroll departments; serve as liaison between district and various tax collectors; provide information and work papers for annual audit through electronic and hardcopy methods. Accountant Donna Reinhardt less than one Responsibilities: Provide assistance to Assistant Business Administrator in the overall financial management of the school district; bank reconciliations; local, state and federal grant expenditure reports; prepare and post journal entries; assists in preparation of audit requests and work papers. Accounting Clerk Serenity Hess 12 Responsibilities: Provide accounting assistance to Assistant Business Administrator and Accountant; prepare and post journal entries; process payroll and related local, state and federal reports; prepare bank deposit and reconcile accounts receivable. Payroll Clerk Kim Walzer 6 Responsibilities: Process payroll and related local, state and federal reports; prepare bank deposit and reconcile accounts receivable. Accounts Payable Clerk Karen McKinney 14 Responsibilities: Process accounts payable, maintain vendor files, and process district procurement card transactions. Accounts Payable Clerk Penny DeArmitt 7 Responsibilities: Process accounts payable, maintain vendor files, and process district procurement card transactions.