RFP for Audit Services


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RFP for Audit Services

  1. 1. COUNTY OF TRANSYLVANIA Request for Proposals for Audit Services The Board of Commissioners of Transylvania County (hereinafter called the "County") invites qualified independent auditors (hereinafter called “Auditor) having sufficient governmental accounting and auditing experience in performing an audit in accordance with the specifications outlined in this Request for Proposal (RFP) to submit a proposal. There is no expressed or implied obligation for the County to reimburse any expenses incurred in preparing proposals in response to this request. The specific details shown herein shall be considered minimum unless otherwise noted. The specifications, terms, and conditions included with this RFP shall govern in any resulting contract(s) unless approved otherwise in writing by the County. Bidder consents to personal jurisdiction and venue in a state court of competent jurisdiction in Transylvania County, North Carolina. Scope of Work The services to be rendered under the contract shall include internal control, financial, and compliance audits and the preparation of the County's Comprehensive Annual Financial Report (CAFR). The financial and compliance audits will cover Federal, State and local funding sources. All services shall be performed in accordance with and must satisfy the requirements of applicable laws and regulations, generally accepted auditing standards, and generally accepted accounting principles. Period The County intends to continue the relationship with the Auditor for no less than three years, starting with fiscal year ending June 30, 2010. Continuation after the first year will be based on an annual review and recommendation by the Finance Director, satisfactory negotiation of terms (including price), the approval of the Board of County Commissioners, and the availability of an appropriation. Annual extensions may be granted by the County based on the above mentioned criteria and governing board concurrence for two to four additional years or until a determination is made to request new proposals. An annual contract documenting the terms of the audit will be signed by both parties. The County is requesting bids for a three-year period and a five-year period covering the periods July 1, 2010 through June 30, 2012 and July 1, 2010 through June 30, 2014, respectively. Requirements The audit must be conducted in accordance with U.S. generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; the provisions of the Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; the State Single Audit Implementation Act; any other applicable procedures for the audit of a government’s financial statements prepared in accordance with generally accepted accounting principles; any requirements imposed by the Local Government Commission (LGC); and the laws and regulations of the State of North Carolina. Page 1 of 12
  2. 2. 1. The audit will begin with a planning meeting between the Auditor and the County to determine the information that is to be provided by the County and to establish due dates for information to be exchanged between the Auditor and the County. This schedule of information and dates will be recorded in writing, and each party will be expected to adhere to it. If the County fails to provide information to the Auditor by an agreed upon date, the Auditor’s deadline may be extended accordingly; if the Auditor fails to meet a deadline, the County may consider the failure sufficient grounds for not continuing the contract into subsequent years. 2. The audit must be completed, including all single audit compliance work, and all reports provided no later than four months following the fiscal year end, unless the deadline is extended by the Local Government Commission. 3. The Auditor will be responsible for preparing most year-end adjusting journal entries and the corresponding reversing journal entries in the subsequent year’s ledger. 4. The Auditor will prepare all financial statements (basic, combining, and individual), notes to the financial statements, and supplemental schedules - except for Management’s Discussion and Analysis - presented in the Comprehensive Annual Financial Report (CAFR) for FY 09-10. These statements and notes must meet all Governmental Accounting Standards Board (GASB) pronouncements and rulings. Supporting workpapers, such as grouping sheets and an adjusted trial balance, shall also be prepared by the Auditor for at least the first year of the contract. The supporting documentation prepared by the Auditor in subsequent years may be re- negotiated. 5. The financial audit opinion will cover the basic financial statements, consisting of the financial statements for the governmental activities, business-type activities, each major fund, and remaining fund information. The opinion shall indicate whether the statements are accurate in all material respects and reported in such a manner that the financial position and results of the County’s activities are presented fairly. The combining and individual financial statements, related information, and supplemental schedules are not necessary for fair presentation but will be included for analytical purposes. As required by GASB 34, they will be subjected to the same tests and other auditing procedures applied in the examination of the basic financial statements, and an opinion will be given as to whether they are fairly stated in all material respects in relation to the financial statements taken as a whole. The Auditor will also express an opinion on the budgetary comparison information for the general fund, the major funds, and any annually budgeted special revenue funds. 6. The Auditor must submit a preliminary draft of the CAFR and required journal entries, if any, to the Finance Director by October 1st for proofing and reconciliation with the County’s records. The Finance Director will return the draft with proposed revisions within ten working days. 7. The Auditor will issue a management letter to the Finance Director, County Manager, and the Board of Commissioners reporting audit findings and recommending corrective action, if needed. In addition, the Auditor will prepare a letter disclosing and discussing informal/non-material comments not included in the management letter. Page 2 of 12
  3. 3. 8. The Auditor will be responsible for submitting the two required copies of the CAFR to the LGC. The final report will be subject to a quality control review by the LGC prior to acceptance by the County. 9. The Auditor must provide twelve copies of the CAFR and Report on Compliance to the Finance Director by October 31st and up to another fifty copies of each following the LGC’s approval and County’s acceptance. The County will supply the covers and spines for the CAFR’s. If additional copies are needed, the Finance Office staff will prepare them. 10. The Auditor will make a presentation of the financial statements to the Board of County Commissioners no later than the fourth Monday in November. 11. The Auditor shall retain all working papers and supporting documentation related to the County’s audit for no less than five years from the date of the audit report and shall make all such information available to the County upon request. 12. The Auditor may perform interim audit work, as deemed necessary, at any time during the periods covered by the contract. 13.If circumstances arise during the audit that require work to be performed that is beyond the scope of the original contract, any additional fees will be negotiated prior to the commencement of the work, and an amended contract will be submitted for approval by the governing board and forwarded to the LGC for approval. Other Services 1. The Finance Office staff may periodically request the Auditor’s advice on accounting procedures and/or seek guidance on the completion of certain schedules/documents to assure that financial information is determined correctly and reported properly. 2. The Auditor will be responsible for advising the County of new GASB rulings and other reporting requirements that may affect the County’s financial reporting and for offering guidance to the County on complying with new regulations in effect at June 30th year end. 3. The County plans to apply to the Government Finance Officers Association for the Certificate of Achievement for Excellence in Financial Reporting and will need the Auditor’s assistance to do so. 4. The Finance Director will complete the Annual Financial Information Report for the LGC. However, before filing it, the Finance Director may request the Auditor to review it for compliance and reasonableness. 5. If the cost of providing these services is not included in your base cost estimates, please specify in Section II of your proposal how these fees will be determined and charged. New Pronouncements Page 3 of 12
  4. 4. The scope of the audit and the cost estimates presented should include all approved pronouncements at the date of this mailing. Although some pronouncements will not be in effect until after the first year of the audit, estimates for future years should include pronouncements that will become effective during the contract period. Time Schedule for Awarding the Contract 1. Request for Proposal packages will be available beginning February 1, 2010. 2. Please acknowledge the receipt of this RFP and your intent to respond with a proposal by February 5, 2010. 3. A pre-proposal conference will be held on February 10, 2010 at 3:00 p.m. in the conference room of the Transylvania County Administration Building, 21 East Main Street, Brevard, North Carolina. All questions and general background information on the County and its operations will be answered. Information covered at the conference will not be sent to audit firms not attending the conference. 4. Any subsequent questions that arise should be sent in writing prior to February 15, 2010 to the Finance Director at the address above or emailed to gpoor@transylvaniacounty.org. Written responses will be issued within one week to all firms who notified the County of their intent to respond to the proposal. 5. Proposals signed by authorized officials will be received by Gay Poor, Finance Director, at the Transylvania County Administration Building at the above address until 4:00 pm March 8, 2010. NO PROPOSAL RECEIVED AFTER THIS TIME WILL BE ACCEPTED OR CONSIDERED. Late delivery of a bid for any reason, including delivery by the United States mail, shall disqualify the bid. Envelopes containing proposals must be clearly marked "Response to RFP 2010 for Audit Services". 6. The audit committee will review the proposals, and the Finance Director will make a recommendation to the Board of County Commissioners on March 22, 2010. Audit Contract and Payment for Services The audit contract must be approved by the Local Government Commission (LGC). All requests for payments must also be approved by the LGC. Interim invoices equaling up to 75% of the total fee will be paid when due and upon the LGC's approval. The final invoice will not be paid until the CAFR, Report on Compliance, and management letter have been reviewed by the LGC. Description of Selection Process Proposals must be submitted on the forms included with this document and must be properly signed in the spaces indicated. Proposals submitted otherwise will not be accepted. Three copies of the proposal should be submitted. Please provide a clear identification (table of contents) of all material submitted with your proposal by section number and page number. Page 4 of 12
  5. 5. Proposals should be submitted in two sections. The first section should describe the services to be offered to the County and the audit process used by the firm, including the various methodologies employed for testing financial statements. It should also disclose the audit firm's prior governmental experience and qualifications of its personnel in performing governmental audits. The County’s selection committee will evaluate the firm on educational, professional, and technical qualifications. The top firms resulting from the evaluation of the first section will have their second section opened and evaluated. The second section must be separately sealed and should state the cost of audit services outlined in this RFP. The firm best meeting the County's expectations for experience, audit approach, and cost requirements will be selected. The County reserves the right to reject any or all bids, to waive technicalities, and to be the sole judge of suitability of the services for its intended use – and further specifically reserves the right to make the award in the best interests of the County. Failure to respond to any requirements outlined in this RFP or failure to enclose copies of the required documents may disqualify the bid. The first section of the proposal should provide the following information. Scope of Services Clearly describe the scope of services offered to the County. The scope should be defined in terms of an examination of the financial records and statements, a compliance examination for Federal and/or State funds, and preparation of statements, notes, and supplemental information presented in the CAFR and Report on Compliance. Comment on the type of information presented in the Management Letter. Audit Approach Clearly describe your firm's approach to conducting the examination, including use of statistical sampling and automated processes. Indicate what type of audit program is used (tailor-made, standard government, or standard commercial). Provide a tentative schedule for completing the audit within the deadlines specified in this RFP and delineate the assistance expected from the County’s staff, if other than that outlined in the RFP. Profile of the Firm 1. State whether your firm is regional, national or international. 2. Give the location of the office responsible for the proposed services and the number of partners, supervisory staff, seniors and other professional staff employed at that office. 3. Specify the number of people (by level) that will conduct the audit. Describe the organization of the audit team and estimate the percentage of time each senior and higher-level personnel will be on site during the audit. Page 5 of 12
  6. 6. 4. Describe your firm’s participation in AICPA-sponsored or comparable quality control programs. Provide a copy of the firm’s current peer review. 5. Provide confirmation that the Auditor is licensed to perform the audit according to the applicable laws of North Carolina and is considered independent as defined by the Ethical Rules of the AICPA. 6. Note if your firm is an equal opportunity employer. 7. Describe any regulatory action taken by any oversight body against the proposing audit firm within the past 20 years. 8. Describe liability insurance coverage arrangements. Governmental Experience 1. Provide information on your firm's background and experience auditing governmental units. 2. Describe the range of services provided by the local office in the governmental area, such as audit, accounting or management advisory services. You should include activities which demonstrate your commitment to governmental practice. 3. List the local office’s current and prior (up to five years) governmental clients indicating the type(s) of services performed and number of years served for each. 4. Provide names, addresses, and telephone numbers of personnel of current and prior governmental clients who may be contacted for reference. 5. Identify the persons (minimally, the engagement partner and manager) who will work on the County's audit and designate the individual who will be the County’s primary contact with the firm. Describe the specific governmental experience and relevant educational background of each person who may be assigned to the audit. Include any seminars and courses attended within the past three years, especially those related to governmental accounting and auditing. (Since staff continuity is a priority for the County, the firm must notify the County of changes in key audit personnel prior to annual renewal of the contract within the multi-year period so that the County may assess continuity concerns.) 6. Describe any specialized skills, training, or background in public finance of assigned individuals. Include participation in State or national professional organizations, speaker or instructor roles in conferences or seminars, or authorship of articles and books. 7. The County has received the GFOA Certificate of Achievement for Excellence in Financial Reporting twenty-two years. State whether your office has previous experience preparing CAFR’s that have earned this recognition. Page 6 of 12
  7. 7. 8. Note how many local staff are members of GFOA and if they attend any GFOA professional development opportunities. 1. List any specific training or experience your firm has related to new GASB pronouncements and other regulations. 2. Comment on your knowledge of and relationship with the NC Local Government Commission and the Institute of Government at the University of North Carolina at Chapel Hill. Additional Data Give any additional information considered pertinent to this proposal, including involvement in national, state, and other organizations. Publications of your firm, such as directories, articles, or sample newsletters, may be included but should not be voluminous. The County plans to evaluate the qualifications of all firms submitting proposals before considering the Cost Estimate. The second section should be in a separate sealed envelope marked "Cost Estimate” and should consist of completed cost estimate sheets and any other necessary cost information. The costs given for the audit year ending June 30, 2010 will be considered binding, while those presented for subsequent years will be treated as estimates and reviewed annually. Please use the attached forms for your cost estimates. 1. Indicate the basis for the charges in the cost estimates and whether the total is a "not-to-exceed" amount. 2. Provide separate cost estimates for both a three-year contract and a five-year contract. The amount proposed should be a yearly cost figure. 3. Estimate and display separately charges for the financial audit, the compliance audit, and the preparation of the statements (basic, combining, and individual), notes, and supplementary schedules to be presented in the CAFR. 4. Estimate the cost for additional compliance testing in the event additional Federal or State financial assistance is obtained. List the cost per additional program tested. 5. Show charges for other expenses, such as fees for additional accounting services, separately. 6. Note your method of determining annual increases in audit costs, if applicable. Although in the past the Auditor has prepared all the financial statements and supplementary schedules presented in the CAFR, the County anticipates that, at some time in the future, Finance Office staff may wish to prepare these statements and schedules themselves. Therefore, the County is requesting interested firms to provide, as an option, a separately priced bid that would exclude the preparation of these statements and schedules. Page 7 of 12
  8. 8. Description of the Governmental Entity and its Accounting System Entity Transylvania County is located in Western North Carolina and has a population of just over 30,000. For FY 10 the original approved budget for the General Fund was $33.3 million. The County is governed by a five-member board of commissioners. Funds The County maintains seventeen funds in six fund types. Among these is one proprietary fund established to track and record the financial activities of the County’s Solid Waste operations. In addition, the County has two component units - neither of which, however, has financial transactions or account balances. The funds are: • General Fund, including Self Insurance Fund • Special Revenue Funds: CDBG Fund Revaluation Fund Occupancy Tax Fund Fire District Funds Emergency Telephone System Fund • Capital Projects Funds: QZAB Fund General Capital Projects Fund Public Safety Facility Construction Fund • Permanent Funds: Silvermont Reserve Fund • Proprietary Funds: Solid Waste Fund • Fiduciary Funds: Pension Trust Fund Retiree Health Insurance Fund 457 Contribution Fund Agency Funds: Social Services Fund Fines & Forfeitures Fund Grants, Entitlements, and Shared Revenues In FY 09 the County received approximately fifty Federal and State grants, entitlements, and shared revenues, as shown on the attached Schedule of Expenditures of Federal and State Awards. Budgetary Controls The County budgets all funds on the modified accrual basis of accounting as required by North Carolina law. Appropriations are made at the functional, departmental, or object levels within each individual fund. The County also utilizes an encumbrance Page 8 of 12
  9. 9. system, and both the budgetary and encumbrance systems are integrated with the accounting system to allow easy comparison with actual expenditures. Accounting Records Transylvania County stores its most recent (current + two years) accounting records at the Finance Office located at 21 East Main Street, Brevard, NC. Older records are retained in an adjacent building. Information is also accessible online through our financial software, Computer Software Innovations (CSI). Assistance Available to Auditor 1. The County will give the Auditor access to and necessary training on CSI so that the Auditor may review records electronically. 2. The County will also make available to the Auditor sufficient assistance to pull and re-file hard copies of records and issue all necessary confirmations. 3. During the initial planning meeting to be held each year, the Auditor and the County will determine the information that the County will be responsible for providing and the due dates for said information. The necessary accounting procedures will be completed, and agreed upon documents will be prepared by County personnel no later than the dates set at the planning meeting. Finance Office staff will provide, at a minimum, the following: General • Copy of the final budget ordinance as of June 30 th, the original budget ordinance, and all amendments • Copy of all project ordinances and all amendments to active projects during the audit period • General ledger financial statements for revenues, expenditures, and transfers, including budgeted amounts, for all funds as of year-end cut-off date, if requested • General ledger transaction detail report for each account as of year-end cut- off date Cash and Investments • List of bank accounts with a description of the account type and statement balance as of June 30th • All bank reconciliations for each month • List of outstanding checks showing check number, issue date, and amount • Schedule of all investments for all funds as of June 30 th showing book value and estimated market value at the statement date • Copy of semiannual Cash and Investment Reports (LGC 203) Receivables Page 9 of 12
  10. 10. • Aged trial balance of accounts, taxes, and miscellaneous receivables as of the audit date • Reconciliation of subsidiary receivables ledger with the general ledger control accounts Capital Assets • Listing of capital assets by type, department, and fund • Schedule of all capital outlays during the audit period • Schedule of all capital dispositions during the audit period • Schedule of depreciation for capital assets by asset type, department, and fund Current Liabilities • Schedule of accounts payable • Report of encumbrances outstanding at year-end Long-term Debt • Schedule of current balances and principal and interest payments due on each long-term debt • Computation of vested vacation payable as of the year end Size and Complexity of Transylvania County 1. Property Tax: • Number of bills issued: Real & personal property 30,650 Motor vehicles 30,000 approximately • FY 09 Tax Collections $22,248,962 • FY 09 Tax Levy $22,365,367 2. Personnel/Payroll: • Frequency of payroll Bi-weekly • Number of permanent employees 313 • Average number of checks/payroll 367 3. Solid Waste Receivables: • Average number of statements/month 115 4. Purchasing: • Average number of PO’s issued/month 127 5. Accounts Payable: • Frequency of payables Weekly • Average number of checks/week 166 6. Bank Accounts: • Number of bank accounts Page 10 of 12
  11. 11. Checking 4 Money Market 2 NCCMT 5 Lockbox 1 • Monthly Activity in Checking Accounts Central Depository Checks 759 Deposits 129 7. County Departments: There are 26 different functions within the County, as shown in the organizational chart included in the CAFR. A number of the functions contain multiple departments, and some departments are set up to track specific one-time program or grant related expenditures. There are currently 93 departments in the General Fund. 8. Information Technology/Computer Resources: • The County has a separate Information Technology department with a staff of four. In addition to maintaining the County’s website, Intranet, and e- government capabilities; they manage the infrastructure and hardware require to operate and secure the County’s network and the software used by different departments. • There are approximately 300 desktop and laptop computers used throughout the County’s functions and approximately 15 servers. • The Finance Office uses CSI, a Windows-based financial software package on a Citrix platform, for the following applications: General Ledger Budgets Cash Receipts Accounts Payable Payroll Purchasing Solid Waste Billings and Receivables Capital Assets Amazon SweetSoft is used for ambulance billings and receivables. Other departments within the County are authorized to view financial information pertinent to their functions. • The Tax Administrator is in the process of converting from a system that was developed in-house to software offered by Bi-tek for tax assessment and collections applications. 9. Miscellaneous Items: • The County collects property taxes for other local governments and eight fire districts within the County. Page 11 of 12
  12. 12. • The County currently receives and accounts for CDBG funds and North Carolina 911 Board PSAP Funds in Special Revenue funds. Copies of our CAFR, including the Report on Compliance, for the Year Ended June 30, 2009 are available on the County’s website at www.transylvaniacounty.org or, upon request, may be mailed to you. Technical inquiries may be directed to: Gay V. Poor, Finance Director, (828) 884-3104 or gpoor@transylvaniacounty.org. Page 12 of 12