Final 2003 Audit RFP 7-16-03A
Description
CITY OF OVERLAND PARK, KANSAS REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES July 17, 2003 8500 SANTA FE DRIVE OVERLAND PARK, KS 66212-2866 CITY OF OVERLAND PARK, KANSAS REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES TABLE OF CONTENTS Page I. INTRODUCTION A. General Information......................................................................................................4 B. Term of Engagement ....................................................................................................5 II. NATURE OF SERVICES REQUIRED A. General..........................................................................................................................5 B. Scope of Work to be Performed ...................................................................................5 C. Auditing Standards to be Followed ..............................................................................7 D. Reports to be Issued......................................................................................................8 E. Special Considerations.................................................................................................9 F. Working Paper Retention and Access to Working Papers .........................................10 III. DESCRIPTION OF THE CITY OF OVERLAND PARK AND OTHER ENTITIES TO BE CONSIDERED IN RESPONSE TO THIS ...
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CITY OF OVERLAND PARK, KANSAS
REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES
July 17, 2003
8500 SANTA FE DRIVE OVERLAND PARK, KS 66212-2866
CITY OF OVERLAND PARK, KANSAS REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES I. II. III.
IV.
TABLE OF CONTENTS Page INTRODUCTION A. General Information......................................................................................................4 B. Term of Engagement....................................................................................................5 NATURE OF SERVICES REQUIRED A. General..........................................................................................................................5 B. Scope of Work to be Performed...................................................................................5 C. Auditing Standards to be Followed ..............................................................................7 D. Reports to be Issued......................................................................................................8 E. Special Considerations .................................................................................................9 F. Working Paper Retention and Access to Working Papers .........................................10 DESCRIPTION OF THE CITY OF OVERLAND PARK AND OTHER ENTITIES TO BE CONSIDERED IN RESPONSE TO THIS RFP A. Name of Contact Person ............................................................................................ 10 B. Background Information.............................................................................................11 C. Fund Structure ........................................................................................................... 13 D. Budgetary Basis of Accounting ..................................................................................13 E. Federal and State Awards .......................................................................................... 14 F. Pension Plans ..............................................................................................................14 G. Component Unit
. 15 H. Computer Systems
...15 I. Internal Audit Function ..............................................................................................15 J. Availability of Prior Audit Reports and Working Papers...........................................15 TIME REQUIREMENTS A. Proposal Calendar .......................................................................................................16 B. Notification and Contract Dates .................................................................................16 C. Date Audit May Commence .......................................................................................16 D. Schedule for the 2003 Fiscal Year Audit....................................................................16 E. Entrance Conferences, Progress Reporting and Exit Conferences.............................19 F. Date Final Report is Due ............................................................................................19
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Page V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department and Clerical Assistance .............................................................20 B. Internal Audit Staff Assistance...................................................................................20 C. Information Technology Assistance ...........................................................................20 D. Statements and Schedules to be Prepared by “City Staff
.. 20 E. Work Area, Telephone, Photocopying and FAX Machines .......................................20 F. Report Preparation ......................................................................................................20 VI. PROPOSAL REQUIREMENTS A. General Requirements
..20 B. Process 1. Submission of Notification of Interest ..............................................................22 2. Discussion and Question Conference/On-Site Inspections...............................22 3. Inquiries ............................................................................................................23 4. Submission of Proposals ...................................................................................23 C. Technical Proposal 1. General Requirements.......................................................................................24 2. Independence
. 25 3. License to Practice in Kansas
25 4. Firm Qualifications and Experience .................................................................25 5. Partner, Supervisory and Staff Qualification and Experience
.26 6. Similar Engagements with Other Government Entities
..26 7. Specific Audit Approach
.27 D. Sealed Dollar Cost Bid 1. Total All-Inclusive Maximum Price .................................................................27 2. Rates by Partner, Specialist, Supervisory and Staff Level Times Hours Anticipated for Each.................................................28 3. Out-of-pocket Expenses in the Total All-Inclusive Maximum Price .................................................................................28 4. Rates for Additional Professional Services.......................................................28 5. Manner of Payment...........................................................................................29 EVALUATION PROCEDURES A. Audit Committee........................................................................................................29 B. Review of Proposals ...................................................................................................29 C. Evaluation Criteria......................................................................................................30 1. Mandatory Elements .........................................................................................30 2. Technical Qualifications ...................................................................................30 3. Price ..................................................................................................................31 D. Oral Presentations.......................................................................................................31 E. Final Selection ............................................................................................................31 F. Right to Reject Proposals ...........................................................................................32
VII.
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Page VIII. CONTRACT REQUIREMENTS A. General Information....................................................................................................32 B. Required Terms ..........................................................................................................32 1. Termination Rights
. 32 2. Indemnity
33 3. Insurance
34 4. Compliance with Non-Discrimination Requirements
..36 5. Cash Basis Laws
....37 APPENDICES A. Proposer Guarantees B. Proposer Warranties C. Format for Schedule of Professional Fees and Expenses to Support the Total All-Inclusive Maximum Price D. Federal and State Awards
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I.
REQUEST FOR PROPOSALS CITY OF OVERLAND PARK, KANSAS INTRODUCTION A. General Information The City of Overland Park (“City) isrequesting proposals from qualified firms of certified public accountants to audit its financial statements for the calendar year ending December 31, 2003, with the “City option of the selected firm auditing its financial statements for each of the four subsequent fiscal years. These audits are to be performed in accordance with generally accepted auditing standards, the standards set forth for financial audits in the General Accounting Office's (GAO)Government Auditing Standards(1994), the provisions of the federal Single Audit Act of 1984 (as amended in 1996) and U.S. Office of Management and Budget (OMB) Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations, as well as the Kansas Minimum Standard Audit Program. There is no expressed or implied obligation for the “City to reimburse responding firms for any expenses incurred in preparing proposals in response to this request. A discussion and question conference for all the firms interested in submitting a proposal will be held at 9:00 a.m. on July 31, 2003 at the Overland Park City Hall, 8500 Santa Fe Drive, Overland Park, Kansas 66212, in Conference Room #1 to answer questions about the engagement. After this conference, any inquiries concerning the request for proposals should be addressed to David Scott, Manager of Finance & Accounting. All interested audit firms will be provided with a copy of the minutes of the conference. To be considered, all interested firms must follow the submission requirements set forth in this Request For Proposal to include the requirement that ten (10) copies of a proposal must be received by the City Clerk at City Hall, 8500 Santa Fe Drive, Overland Park, Kansas 66212 by 5:00 p.m. on August 15, 2003. The “City reserves the right to reject any or all proposals submitted. Proposals submitted will be evaluated by the “City's Audit Committee with recommendations to the City’s Finance, Administration & Economic Development Committee, which will make a final selection. During the evaluation process, the “City reserves the right, where it may serve the “City’s best interest, to request additionalinformation or clarifications from proposers, or to allow corrections of errors or omissions. At the discretion of the “City, firms submitting proposals may be requested to make oral presentations as part of the 4
evaluation process.
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II.
The “City reserves the right to retain all proposals submitted and to use any ideas in a proposal regardless of whether that proposal is selected. Submission of a proposal indicates acceptance by the firm of the conditions contained in this Request For Proposals,. It is anticipated the selection of a firm will be completed by September 17, 2003. B. Term of Engagement Subject to the annual availability of an appropriation required by the State cash basis law and the requirements of this RFP a five-year engagement is contemplated, however, not guaranteed. Any engagement for audit work beyond the initial one year contract for auditing the City’s financial statements for the calendar year ending December 31, 2003 shall be conditioned on an annual contract review and recommendation of the Finance, Administration & Economic Development Committee, the satisfactory negotiation of terms, including a cost acceptable to the City and the approval of the City’s Governing Body. NATURE OF SERVICES REQUIRED A. General The City of Overland Park is soliciting the services of qualified firms of certified public accountants to audit its financial statements for the year ending December 31, 2003, with a “City option for the selected firm toaudit the “City’s financial statements for each of the four subsequent fiscal years. These audits are to be performed in accordance with the provisions contained in this request for proposals. B. Scope of Work to be Performed The “City requires the auditor to express an opinion on the fair presentation of its basic financial statements and the Municipal Employees Pension Plan in conformity with generally accepted accounting principles. The “City also desires the auditor to expressan opinion on the fair presentation of City combining and individual fund financial statements and schedules in conformity with generally accepted accounting principles. The auditor is not required to audit the supporting schedules contained in the comprehensive annual financial report. However, the auditor is to provide an "in-relation-to" report on the supporting schedules based on the auditing procedures applied during the audit of the basic financial statements and the combining and individual fund financial statements and schedules. The auditor is not required to audit the introductory section or the statistical section of the report. The auditor shall also be responsible for performing certain limited procedures involving required supplementary information required by the Governmental Accounting Standards Board as mandated by generally accepted auditing standards.
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The auditor is not required to audit the schedule of expenditures of federal awards. However, the auditor is to provide an "in-relation-to" report on that schedule based on the auditing procedures applied during the audit of the financial statements. As required as an integral part of an audit, the auditor is expected to obtain an understanding of the internal control structure of the City and whether the internal controls have been placed in operation. Municipal Employees Pension Pla n As an integral component of this Request for Proposal the “City will require the selected auditor to audit its Municipal Employees Pension Plan for the fiscal year ending December 31, 2003. This also includes the “City option to audit the Municipal Employees Pension Plan for each of the four subsequent fiscal years. The “City has elected to have an audit performed on the the Municipal Employee Pension Plan since the accounting records are maintained by the “City. There is no reporting requirement for this pension plan (IRS 5500 - Annual Reporting Employee Benefit Plan). Overland Park Convention & Visitors Bureau While audit work related to The Overland Park Convention & Visitors Bureau will not be a component of the scope of work to be performed by the selected auditor in its contract with the “City, the Overland ParkConvention & Visitors Bureau prefers to use the same auditor as the City. The Overland Park Convention & Visitors Bureau requests interested firms submitting responses to the “City’s Request for Proposals to include a separate cost for auditing the Bureau’s financial statements for the fiscal year ending December 31, 2003. The decision to select a firm to audit the Bureau’s financial statements will be made by the Overland Park Convention & Visitor’s Bureau and not the “City. The Overland Park Convention & Visitor’s Bureau requires auditors to express an opinion on the fair presentation of its financial statements in conformity with generally accepted accounting principles and issue a management letter. In addition, the auditors are expected to prepare the federal and state income tax returns for the Overland Park Convention & Visitors Bureau. It is anticipated, but not guaranteed, that the auditor selected by the “City will also be recommended by the Overland Park Convention & Visitors Bureau to its Board of Directors. Overland Park Convention Center As an integral component of this Request for Proposal the “City will require the selected auditor to conduct an audit of the special purpose financial statements maintained by the Overland Park Convention Center management. The “City requires the auditors to express an opinion on the fair presentation of the Overland Park 2
C.
Convention Center special purpose financial statements and to issue a management letter to the Overland Park Convention Center and the “City. The auditor is expected to obtain an understanding of the internal control structure of the convention center and whether the required internal controls have been placed in operation. The auditors are requested to issue a report on these internal controls.
Overland Park Development Corporation (“Corporation ) The “City and the Overland Park Development Corporation have not yet determined the range of service required by the auditors to be retained for audit of the “Corporation. As an integral componentof the work required by this Request for Proposal, the “City will require the selected auditor to express an opinion on the fair presentation of the Overland Park Development Corporation financial statements in conformity with generally accepted accounting principles. The audit firm engaged by the “City will be requested, at a minimum, toreview the audited financial statements of the Overland Park Development Corporation prepared by the auditor of the “Corporation and include the required information in the comprehensive annual financial report. If additional services are deemed necessary, i.e. an audit and issuance of an opinion for the “Corporation, a separate contractual agreement will be required. Overland Park Fire Department, Inc. As of September 1, 2003, the operations of the Overland Park Fire Department, Inc., previously presented as a component unit in the City’s annual financial report, will merge with the City. Activity for the remainder of 2003 (September December) will be recorded in the City’s existing special revenue fund Fire Service Fund. The Overland Park Fire Department, Inc. and the City will require an audit of the financial statements as of the merger cut-off date of September 1, 2003. They request the auditors to express an opinion on the fair presentation of its financial statements in conformity with generally accepted accounting principles. Itemized costs for the Overland Park Fire Department, Inc. audit should be stated separately from the City’s engagement fees. Auditing Standards to be Followed To meet the requirements of this request for proposals, the audit shall be performed in accordance with generally accepted auditing standards as set forth by the American Institute of Certified Public Accountants, the standards for financial audits set forth in the U.S. General Accounting Office'sGovernment Auditing Standards(1994), the provisions of the Single Audit Act of 1984 (as amended in 1996) and the provisions of U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, Audits of State and Local Governments, as well as the Kansas Minimum Standard Audit Program.
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D.
Reports to be Issued Following the completion of the audit of the “City’s 2003 fiscal year's financial statements and other required work, the auditor shall issue: 1. A report on the fair presentation of the financial statements in conformity with generally accepted accounting principles, including an opinion on the fair presentation of the supplementary schedule of expenditures of federal awards in relation to the audited financial statements. 2. A report on compliance and internal control over financial reporting based on an audit of the financial statements. 3. A report on compliance and internal control over compliance applicable to each major federal program. In the required report[s] on compliance and internal controls, the auditor shall communicate to the “City any reportable conditions found during the audit. In addition, the auditor shall as appropriate communicate to the Overland Park Convention and Visitors Bureau and the Overland Park Convention Center any reportable conditions found during the audit in their respective operations. 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. Nonreportable conditions discovered by the auditors shall be reported in a separate letter to “City management, which shall be referred to in the report[s] on compliance and internal controls. The reports on compliance and internal controls shall include all instances of noncompliance. Following the completion of the audit of the fiscal year's Municipal Employees Pension Plan, the auditor shall issue a report on the fair representation of the financial statements, the financial status of the pension plan and the changes in its financial status for the year ended in conformity with generally accepted accounting principles. Following the completion of the audit of the Overland Park Convention & Visitors Bureau, the auditor shall issue a report on the fair presentation of the financial statements in conformity with generally accepted accounting principles. In addition, the auditor will issue a management letter to the Overland Park Convention & Visitors Bureau Board. Following the completion of the audit of the Overland Park Convention Center, the auditor shall issue a report on the fair presentation of the financial statements in conformity with generally accepted accounting principles. In addition, the auditor will issue a management letter to the “Cityand the Overland Park Convention Center 4
E.
operators. Following the completion of the Overland Park Fire Department, Inc., audit, as of September 1, 2003, the auditor shall issue a report on the fair presentation of the financial statements in conformity with generally accepted accounting principles. The report will be issued to the “City. Irregularities and illegal acts. Auditors shall be required to make an immediate, written report of all irregularities and illegal acts or indications of illegal acts of which they become aware to the following parties: City Manager Finance, Administration & Economic Development Committee Reporting to the Finance, Administration & Economic Development Committee. Auditors shall assure themselves that the City of Overland Park's Finance, Administration & Economic Development Committee is informed of each of the following: 1. The auditor's responsibility under generally accepted auditing standards. 2. Significant accounting policies. 3. Management judgments and accounting estimates. 4. Significant audit adjustments. 5. Other information in documents containing audited financial statements. 6. Disagreements with management. 7. Management consultation with other accountants. 8. Major issues discussed with management prior to retention. 9. Difficulties encountered in performing the audit. Special Considerations 1. The “City will send its comprehensive annual financial report to the Government Finance Officers Association of the United States and Canada for review in its Certificate of Achievement for Excellence in Financial Reporting program. It is anticipated that the auditor will not be required to provide special assistance to the “City to meet the requirements of that program. 2. The “City currently anticipates it will prepare one or more official statements in connection with the sale of debt securities which will contain the general purpose financial statements and the auditor's report thereon. The auditor shall be required, if requested by the fiscal advisor and/or the under-writer, to issue a "consent and citation of expertise" as the auditor and any necessary "comfort letters." 3. The “City has determined that theU.S. Department of Housing and Urban Development will function as the cognizant agency in accordance with the provisions of the Single Audit Act of 1984 and U.S. Office of Management and Budget (OMB) Circular A-133,Audits of States, Local Governments, and Non-5
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