Loading...
Request for Proposal for Audit Services 2018-2020 City of Rosemead, CA (RFP 2018-12) REQUEST FOR PROPOSALS FOR AUDIT SERVICES Proposal Release Date April 12, 2018 Proposal Submittal Due Date April 30, 2018 REQUEST FOR PROPOSALS FOR AUDIT SERVICES 1 I. INTRODUCTION A. General Information The City of Rosemead (City) invites proposals from qualified certified public accounting firms to perform its annual independent audit for the fiscal years ending June 30, 2018 through June 30, 2020 with the option of extending the engagement for an additional two years. These audits are to be performed in accordance with generally accepted auditing standards, the standards set forth for financial audits in the Government Auditing Standards as issued by the Comptroller General of the United States, the provisions of the federal Single Audit Act and the U.S. Office of Management and Budget (OMB) Circular A- 133, Audits of State and Local Governments. Two (2) copies of the proposal must be submitted to the City Clerk’s Office, City of Rosemead, 8838 E. Valley Boulevard, Rosemead, CA 91770, no later than 10:30 a.m. on April 30, 2018. Each proposal shall specify completely each and every item as set forth in these specifications. Any and all exceptions to the original specifications must be clearly stated in the proposal and the failure to set forth any exception shall be grounds for rejection of the proposal. The City reserves the right to reject any and all proposals and to waive any informalities in any proposal and select the proposal that best meets the City's needs. The City will not be liable for any costs incurred in preparing proposals or associated travel costs. The proposer shall furnish the City with such additional information as the City may reasonably require. The proposals will be evaluated by City staff. During the evaluation process, the City reserves the right, where it may serve the City’s best interest, to request additional information or clarifications from proposers, or to allow corrections of errors or omissions. The contract will begin when awarded by the City Council. B. Scope of Services The City desires the auditor to express an opinion on the fair presentation of its basic financial statements based on their audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller of the United States. The City also desires the auditor to apply limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America. The City of Rosemead has participated in the Government Finance Officers Association (GFOA) Certificate of Achievement Award for Excellence in Financial Reporting last year. 2 It is anticipated that the City will continue to participate in these programs. The City will be responsible for preparing the introductory section, management discussion and analysis, and statistical sections of the Comprehensive Annual Financial Report (CAFR). The auditor shall prepare the City's CAFR and include an opinion in that report regarding the City's basic financial statements and supplemental financial schedules. It is anticipated that the auditor will provide assistance in meeting the requirements of these programs. The auditor will also prepare a separate Financial and Compliance Report for the Rosemead Housing Development Corporation and include an opinion in that report regarding the basic financial statements. The City also complies with OMB Circular A-133, Audit of State of Local Governments, which requires an audit be made by an independent auditor in accordance with generally accepted government auditing standards covering financial and compliance audits. The audit must cover the entire operations of the City including the Successor Agency to the Rosemead Redevelopment Agency and must determine whether: (1) the financial statements present fairly its financial operations in accordance with GAAP, (2) the organization has internal accounting and other control systems to provide reasonable assurance that it is managing Federal financial assistance programs in compliance with applicable laws and regulations and (3) the organization has complied with laws and regulations that may have material effect on its financial statements and on each major Federal Assistance program. Other report that the auditors will be preparing is the State Controller’s Report for the City of Rosemead. Following the completion of the audit of the fiscal year’s financial statements, the auditor shall issue: 1. A report on the fair presentation of the financial statements in conformity with generally accepted accounting principles. 2. A report on the internal control structure based on the auditor’s understanding of the control structure and assessment of control risk. 3. A report on procedures applied to appropriations limit worksheets. 4. A report on compliance with requirements applicable to each major program, internal control over compliance and on the schedule of expenditures of federal awards in accordance with OMB Circular A-133. 5. Any other reports not stated herein but which may be required by the Comptroller General, Government Auditing Standards or U.S. Office of Management and Budget regarding single audits. 3 6. In the required report(s) on internal controls, the auditor shall communicate any reportable conditions found during the audit. A reportable condition shall be defined as a significant deficiency in the design or operation of the internal control structure, which could adversely affect the organization’s ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. Reportable conditions that are also material weaknesses shall be identified as such in the report. 7. Non-reportable conditions discovered by the auditors shall be reported in a separate letter to management, which shall be referred to in the report(s) on internal controls. Management is not aware of any unusual circumstances warranting an extended scope beyond that called for above. If in due course of the examination and it is warranted, the auditor shall agree to provide the City with all ascertainable facts relative to such circumstances. An estimate of additional services required and the additional cost shall be provided, so contract modifications may be completed before you commence with such extended examination. C. Deliverables The independent auditing firm shall provide a final electronic pdf version of the CAFR to the Finance Department on or before December 6th of each year. Additionally the independent auditing firm shall provide electronic pdf versions of such documents as the GANN Limit, Management Letter, and Single Audit Report. D. Information Requested from the Proposer To achieve a uniform review process and obtain the maximum degree of comparability, it is required that proposals be organized in the manner specified below: 1. Title Page a) Show the RFP reference number (RFP 2018-12), RFP subject, the name of the proposer firm, local address, telephone number, name of contact person and date. 2. Table of Contents b) Clearly identify the material by section and page number. 3. Letter of Transmittal (limit of one or two pages) a) Briefly state the proposer's understanding of the work to be 4 done and make a positive commitment to perform the work within the time period. b) Give the names of the persons who will be authorized to make representations for the proposer, their titles, addresses and telephone numbers. 4. Profiles of the Proposer a) State whether the firm is national or international. b) Give the location of the office from which the work is to be done and the number of partners, managers, supervisors, seniors and other professional staff employed at the office. c) Describe the range of activities performed by the local office such as: audit, accounting, tax service or management services. d) Describe the local office's computer capability. e) Describe the firm's participation in the "peer review" program. Provide the date and extent of the local office's last participation. 5. Summary of Proposer's Qualifications (in addition to minimum qualifications). a) Identify the partners, seniors, managers, and supervisors who will work on the audit, including staff from other than the local office. Include the resumes for each supervisory person to be assigned to the audit. The resumes may be included as an appendix. b) Describe recent auditing experience similar to the type of audit requested. Specifically, address experience related to the audit of: i. Municipalities complying with OMB Circular A-133. ii. Federal and State Grant programs. c) Describe the engagement team experience and capabilities to assist government bond reporting requirements. d) Describe the professional activities of your firm or of the staff members who support your commitment to governmental accounting. e) Describe any regulatory action taken against your firm or local office. f) Give names, addresses and telephone numbers of five current and former municipal audit clients served by your local office within the past five years. Include the type of services performed, dates and length of service for each. 5 E. Scope Section Clearly describe the scope of the required services to be provided. In addition to services included for the examination, specific reference must be made to the requirements of OMB Circular A-133. The auditors shall familiarize themselves with and comply with the provision of any and all federal, state and county orders, statutes, ordinances, charters, bond covenants, administrative code and orders, rules and regulations that pertain to the work required in the engagement. F. Audit Fees The City requests that a statement of maximum cost be made for the annual audit as set for the audit scope. All other expenses, including typing, clerical and printing costs, should be included in the total audit fee. Unusually high or low fees may affect ratings. The proposal must be on a fixed fee basis inclusive of all expenses and allocated as follows: 2017/18 2018/19 2019/20 City of Rosemead Successor Agency Housing Corp Single Audit Report State Controller's Report Include percentage modification for the fourth and fifth year, if extended. Include a schedule of hourly charges for principals and staff to be used as a basis for audit costs that are extraordinary to the scope of the proposal. G. Evaluation of Proposals Proposals will be evaluated by City Staff to ascertain which proposer best meets the need of the City. Factors to be considered are: 1) The proposal's responsiveness in clearly stating the understanding of the work to be performed. 2) The firm’s technical support. 3) The audit team's experience and professional activities and independence. 4) The firm's size and structure. 5) The anticipated support requirements of City staff showing personnel class and hours expected. 6 6) Although a significant factor, the audit fee may not be the dominant factor. Cost will be a particularly important factor when all other evaluating criteria are relatively equal. Oral interviews may be arranged anytime during the selection process to assist in making the final decision. The City reserves the right to select a firm on any combination of price, experience in auditing governmental agencies, references and other features that are deemed to be in the best interests of the City. All factors will be considered in the selection process. H. Additional Information and Contact 1) The City will not be liable for any costs not included in the proposal and subsequent contracted-for costs. 2) The City reserves the right to conduct personal interviews of any or all proposers prior to selection. 3) The City reserves the right to reject any and all proposals, the right in its sole discretion to accept the proposal it considers most favorable to the City's interest and the right to waive minor irregularities in the procedures. 4) The contracting firm shall make itself available to the City Council and management to answer questions related to audit findings. 5) Compensation for the conduct of audit service will be paid upon submission of progress billings and of a final billing, along with the required reports. 6) The successful proposer will be required to sign the standard City Professional Services Agreement, including meeting the City's minimum insurance requirements, and obtain a business license. 7) City staff requests that, once proposals have been submitted, no unsolicited contact and/or discussions concerning these proposals be made prior to the evaluation of all proposals. 8) The total audit staffing should be at a level sufficient to complete the audit in the time scheduled and specified in the RFP. In addition, the audit staff should remain constant through each year's audit process. At least one staff member from the prior year's audit is to be a member of the subsequent year's audit team. All inquiries relating to this Request for Proposals (RFP) should be submitted to: Pearl Lieu Director of Finance City of Rosemead 8838 E. Valley Boulevard Rosemead, CA 91770 7 626-569-2146 plieu@cityofrosemead.org I. Working Paper Retention All working papers and reports must be retained at the auditor’s expense for a minimum of seven (7) years, unless the firm is notified in writing by the City of the need to extend the retention period. The auditor will be required to make working papers available to the City. In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance. II. DESCRIPTION OF THE GOVERNMENT A. Background Information The City of Rosemead, incorporated in 1959, is located in the southwestern part of the state. The City occupies a land area of 5.5 square miles and serves a population of more than 55,000. The City has operated under the council-manager form of government since 1959. Policy-making and legislative authority are vested in a governing council consisting of the Mayor and four other members. The governing council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees and commissioners, and hiring the government’s manager, attorney and clerk. The government’s manager is responsible for carrying out the policies and ordinances of the governing council, for overseeing the day-to- day operations of the government, and for appointing the heads of the various departments. The council is elected on a non-partisan basis. The City Council consists of five members elected to four-year staggered terms of office. The Mayor is selected from among the City Council members and serves a one year term. Many of the functions often provided by municipal government are provided by special districts. Examples of some of Rosemead’s special districts, which usually encompass areas larger than the City itself, are the Fire Protection District, the Library District, and the County Flood Control District. Certain other governmental functions are paid for by the City, but performed by a variety of other public and private agencies under contract. Some of the contracts in effect during the fiscal year were for police and street maintenance. The City also has two blended component units: 1) the Rosemead Financing Authority (the Authority) and 2) the Rosemead Housing Development Corporation (RHDC). The City of Rosemead also provides a full range of services, including recreational activities and cultural events. 8 The total city wide budget for FY 2017/18 was $32,385,700 with a General Fund budgeted revenues of $22,173,900 and budgeted expenditures of $22,352,400. The City’s fiscal year begin on July 1 and ends on June 30. B. Fund Structure Government Funds General Fund 1 Special Revenue Fund 14 Capital Project Fund 1 Total Government Funds 16 Business Type Funds Internal Service Funds 2 Total Business Type Funds 2 Fiduciary Funds Trust Fund 1 Total Fiduciary Funds 1 TOTAL FUNDS 19 C. Pension Plans The City participates in the State of California Public Employees Retirement System (CalPERS), a cost-sharing multiple-employer public employee defined pension plan. The City has Miscellaneous contracts for Classic and PEPRA members. D. Computer Systems/Financial Software The City uses Tyler Incode software for its financial systems.