CANBY UTILITY REQUEST FOR PROPOSALS (RFP) AUDIT SERVICES Purpose of RFP: Canby Utility, responsible for the exclusive control and management of electric and water service provided to residential and commercial customers within the city limits of Canby, Oregon, solicits proposals from qualified Certified Public Accountants for annual audit services as required by ORS 297.425. Schedule of Events: Proposal submission deadline: Proposals must be received by 2:00 p.m. Wednesday, March 25, 2015 Timeline: Board Approval April 14, 2015 Contract Signed April 23, 2015 Scope of Services: The firm selected will provide the audit services outlined in Section I of this document. Minimum Qualifications: Respondents to the request shall provide at a minimum those items disclosed in Section II of this document. Contact for Copy of RFP: Carol Sullivan, Finance Manager Phone: 503.263.4306 Email: csullivan@canbyutility.org Submission of Proposals: Three copies of your proposal, in a sealed envelope, must be delivered before 2:00 p.m. on March 25, 2015. Fax or email submissions will not be accepted. Canby Utility Address: Mailing: Street Address for Hand Delivery: P.O. Box 1070 154 N.W. First Avenue Canby, Oregon 97013 Canby, Oregon 97013 RFP Clarifications: Questions due: March 11, 2015 Responses to questions due: March 18, 2015 Any amendments to this RFP will be in writing and issued to all firms who are on record as requesting to receive such information. No proposal will be considered that is not responsive to any issued amendments. Notice of Intent to Award Contract letters will be mailed to all proposers on April 15, 2015. After the 7 day protest has passed, a purchase order and Professional Services Contract will be issued. RFP - Audit Services Page 1 of 5
Overview: Purpose of RFP Canby Utility ( CU ) is soliciting proposals from qualified CPA firms for annual audit services as required by ORS 297.425. The appointment will be for a three-year period beginning with audit fiscal year (FY) 2015 and may be extended for up to an additional three years. Either party may cancel the agreement by written notice delivered prior to December 15 of each year. The utility s objective is to select the firm best qualified to: 1. Examine, audit and express an opinion on CU s annual financial statements. 2. Provide timely professional assistance to CU personnel on accounting and reporting questions. 3. Select the most qualified certified public accounting firm that provides the highest quality service for a competitive cost. Background on Canby Utility CU was established in 1970 to provide electric and water service to the City of Canby s customers. The administration of CU is the responsibility of a five member Board of Directors appointed by the Mayor of the City of Canby and confirmed by a majority of Canby s City Council. The General Manager is appointed by the Board and is responsible for all CU functions. The Finance Manager maintains all financial records. CU employs 24 employees under the direction of the General Manager. CU s fiscal year runs from July 1 to June 30 and operates two funds to account for electric and water revenue, operational and capital expenditures. The total budget for CU s two funds for FY 2015 is $14.1 million revenues and $15.3 million expenditures, including capital acquisitions and depreciation. Auditing Standards to Be Followed The firm ( auditor ) selected will provide an examination of the financial records of CU, on an individual fund basis, in accordance with Generally Accepted Accounting Principals (GAAP) in the United States of America, and the Minimum Standards for Audits of Oregon Municipal Corporations. CU s Annual Financial Report is to be prepared in full compliance with the pronouncements of the Governmental Accounting Standards Board (GASB) and/or the Financial Accountings Standards Board (FASB) as appropriate. CU financial statements will be required to implement GASB 68 and 71 beginning with the year ending June 30, 2015. The auditor s opinion will be directed toward the fairness of presentation of the financial statements in accordance with GAAP. The auditor will also provide compliance reports as required by Federal and State laws. Section I Scope of Services: The scope of the audit should be planned so as to preclude the necessity of exceptions arising from scope limitation and should be sufficient to enable the auditor to issue management letters. Meetings and Progress Reports 1. Pre-audit conference(s) with the Finance Manager will be held no later than May 15 of each year to discuss audit schedules, working paper requirements and report deadlines. In addition, CU would receive a compressive PBC (Prepared by Client) schedule no later than June 1. RFP - Audit Services Page 2 of 5
2. Progress report meetings will be held with key audit firm personnel and CU financial management staff at regular intervals mutually agreed upon. 3. Post audit conferences will be held with key audit firm personnel and CU management at a mutually agreeable date. 4. Attendance of the audit firm management is requested at any Board meetings of CU when matters regarding the audit or related reports are discussed, including the acceptance of the Financial Statements and Supplemental Information by the Board of Directors. 5. CU is an independent subdivision of the City of Canby. The City s audited financial statements are required by law to be submitted to the Secretary of State no later than December 31 after the June 30 fiscal year end. The firm selected will be expected to communicate with the City s auditor when requested or deemed appropriate. CU Responsibilities CU is responsible for closing the books, reconciling all accounts, preparing trial balances, preparing the General Purpose Financial Statements, and performing other management functions. The following information and work-papers will be prepared by CU staff and furnished upon commencement of the onsite examination by the audit team: 1. Reconciliation and listing of all material balance sheet line items. 2. Balance sheet and profit and loss line items that include the current year balance compared to prior year balance by dollar and percentage. 3. Provide individual fund statements of revenues and expenditures on the budgetary basis used for supplemental information in the financial statements. CU is not subject to the local Oregon budget law. 4. Provide evidence of year-end inventory conducted. Auditor may attend if desired. Reports covering examinations of financial statements and management letters will be a matter of public record. The audited financial statements may appear in all official statements or other documents covering the sale of CU securities. Reports Required A. Annual Financial Report Each year no later than the first board meeting in December, the Financial Statements and Supplemental Information shall be presented to the Board. These statements are to include the various operations of CU and auditor comments and disclosures required by the Minimum Standard for Audit of Oregon Municipal Corporations. A report on the examination of the combined financial statements and related notes thereto will be presented. Canby Utility requests 15 hard bound reports as well as an electronic version. B. Management Letter per Financial Report The audit should include recommendations to management, prepared by the audit firm in letter form, addressed to the Board of Directors, which include any findings, observations, opinions, comments or recommendations related to internal control, accounting systems, data processing, compliance with laws, rules and regulations, or any other matters that come to the attention of the auditor during the course of the examination. Such recommendations shall not be construed as special or additional RFP - Audit Services Page 3 of 5
studies, but shall be limited to those usually associated with the study of internal control systems and procedures as a part of an examination of financial statements. The firm shall assist management by providing advice and counsel in implementing those recommendations as required. The recommendations will be discussed with appropriate CU staff prior to publication where deemed appropriate. If the audit firm finds indications of fraud, illegal acts, and /or questioned costs or procedures, immediate direct discussions with the Board Chairman is required and followed up with a separate written report to the Board. C. Federal Single Audit On occasion, CU might meet the need for Uniform Single Audit, OMB Circular A-133 due to receiving government funds. At this time, CU does not meet the dollar threshold requiring a single audit. Section II Proposal Requirements: Mandatory Requirements The audit firm must be properly licensed for public practice as an independent auditor and qualifies as a municipal auditor in the State of Oregon according to ORS 297.670. Proposal Information All proposals must include: 1. Evidence of the firm s qualifications to provide audit services. Describe a detail description of your audit approach and work product delivered on similar engagements. Include proof of the firm s certification. 2. A copy of the firm s most recent peer review report, the related letter of comments, and the firm s response to the letter of comments. 3. Background and experience in audits of nonprofit clients. Must include your firm s experience or knowledge of GASB 68 and 71 to ensure CU is in compliance with GASB. 4. The size and organizational structure of the auditor s firm. Statement of the firm s understanding of the work to be performed. 5. A proposed timeline for fieldwork, onsite work and final reporting. 6. Proposed fee structure for each of the three years of the proposal period, including whatever guarantees can be given regarding increases in future years, and the maximum fee that would be charged. Provide an estimated number of hours to complete the audit by classification of your employees. 7. Describe the billing rates and procedures for technical questions that may come up during the year, or whether these occasional services are covered in the proposed fee structure. 8. Include detail of anticipated expenses to be incurred such as mileage, per diem, telephone or other reimbursements, or whether these occasional services are covered in the proposed fee structure. 9. Provide names of the owner or partners of the firm, audit manager, and field staff who will be assigned to our audit and provide a brief description of their professional experience for each. Explain what assurances your firm can provide regarding the assignment of your permanent personnel to the engagement. Include experience in governmental and/or utility audits. 10. Submit one sample of a management letter that you have recently issued covering an audit that has similar services and comparative size to CU. It should contain a statement of audit findings and recommendations affecting financial systems and statements, internal control, legality of actions, other instances of non-compliance with laws and generally accepted accounting principles and any other material matters. 11. Provide three current auditing clients of comparable size to CU as a nonprofit agency. Include a contact name and phone number for each reference. Each contact provided must be willing to discuss the firm s qualifications directly with Canby Utility staff. RFP - Audit Services Page 4 of 5
12. Proposals should contain provisions for dealing with extraordinary circumstances discovered during the audit that may require an expansion of audit work beyond that which was originally planned. In addition, the audit firm may be requested to perform special projects for CU during the year. Because of variations in the demand for additional services, such work will be contracted for, provided, and billed separately to CU on an hourly basis. Proposals should describe the types of services available from the firm, the professionals who would provide them and the standard hourly fees to be charged for such services. Section III Evaluation of Proposals: Proposals will be evaluated based on the submission requirements listed above to determine which firm best matches the needs of CU. After meeting the mandatory requirements, proposals will be evaluated on the following factors: Quality and comprehensiveness of audit approach. Experience and knowledge with GASB 68 and 71 reporting requirements. Qualifications and experience of the firm and the members assigned to the CU engagement. Audit service costs. References and past experience. Ability to provide a comprehensive range of auditing and financial services. At the discretion of the CU staff and CU s Board of Directors, finalists may be invited to an oral interview. Section IV Proposal Submission: In order to be considered, three copies of your proposals, in a sealed envelope, must be delivered by the due date to the address listed on page 1 of this RFP. Proposals received after the specified time and date will not be considered, and will be returned unopened. In addition, the audit firm selected by CU will be expected to enter into a written contract similar to the form attached to this RFP. The proposal should indicate acceptance of CU s contract provisions or suggest reasonable alternatives that do not substantially impair CU s right under the contract. RFP - Audit Services Page 5 of 5