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HomeMy WebLinkAboutSpecifications Scope of WorkRequest for Proposals (RFP) 271251,1 A weof A 3. Specifications 3.1. SPECIFICATIONS/SCOPE OF WORK 3.1 Introduction A. General information The City of Miami, Florida (hereinafter referred to as the "City") is soliciting Proposals from qualified and experienced independent Certified Public Accountants (CPA's) and/or firms licensed to practice in the State of Florida, to audit its financial statements for the fiscal years ending September 30, 2011; 2012 and 2013, with the option of auditing its financial statements for each of the two subsequent fiscal years. The City intends to continue to prepare financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). The annual financial audit is be performed 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 General of the United States. In addition, the audit will be conducted in accordance with the provisions of Chapter 10.550, Rules of the Auditor General, which govern the conduct of governmental audits performed in the State of Florida. The single audit will be performed in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States, the provisions of the Federal Single Audit Act of 1984, OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations, and Chapter 10.550 Rules of the Auditor General. The Government Finance Officers Association (GFOA) awarded the Certificate of Achievement for Excellence in Financial Reporting to the City of Miami for its Comprehensive Annual Financial Reports (CAFR's) for the fiscal years ended September 30, 1999 through 2009. The City's 2010 CAFR has been submitted for program review with the expectation that it will also qualify for a Certificate of Achievement. The City desires to continue its successful participation in the Certificate program. The selected auditing firm, therefore, should be prepared to render any necessary assistance in this regard. B. Term of Engagement A three-year contract is contemplated, with two one-year options to renew. 3.2. Nature of Services Required A. General These audits are to be performed in accordance with the provisions contained in this request for proposal. B. Scope.of Work to be Performed 1. The City desires the independent auditor to express an opinion on the fair presentation of the basic financial statements of the City, in conformity with generally accepted accounting principles. 2. The City also desires the auditor to express an opinion on the fair presentation of its govemment-wide and fund financial statements and schedules in conformity with generally accepted accounting principles (GAAP). 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" opinion on the supporting schedules based on the auditing procedures applied during the audit of the govemment-wide and fund financial statements and schedules. The auditor is not required to audit the introductory section of the report or the statistical section of the report. 3. The auditor shall also be responsible for performing certain limited procedures involving supplementary information, specifically Management's Discussion and Analysis and other required supplementary information as required by the Governmental Accounting Standards Board as mandated by generally accepted auditing standards. 4. The auditor is required to audit the schedule of expenditures of Federal and State awards in accordance with the Federal and Florida Single Audit Act respectively. 5. The auditor is not required to audit the Pension Trust Fund for the General and Sanitation Employees, Firefighters, and Police Officers, as the Trust Funds will be audited by other independent auditors who will fumish their report to the principal Independent Auditor during the engagement. C. Auditing Standards to be Followed Page 3 l of 42 Request for Proposals (RFP) 271251,1 To meet the requirements of this request for proposals, the audit shall be perfonned in accordance with: 1. Generally Accepted Auditing Standards as set forth by the American Institute of Certified Public Accountants; 2. Government Auditing Standards, issued by the Comptroller General of the United States; 3. The provisions of the Federal Single Audit Act of 1984 (as amended in 1996 and subsequently); 4. The Florida Single Audit Act; 5. The provisions of U.S. Office of Management and Budget (OMB) Circular A-133; 6. Audits of State and Local Government Units, and Non -Profit Organizations, Audits of State and Local Governments (Revised), issued by the American Institute of Certified Public Accountants; 7: Regulations of the State of Florida Department of Banking and Finance; 8. Rules of the Auditor General, State of Florida, Chapter 10-550 (Local Government Audits) and Chapter 10-600 (Audits of State Grants and Aids Appropriations under Section 215.97 Florida Statutes); 9. State of Florida Auditor General Selection Guidelines (2007) prepared by the Auditor Selection Task Force; 10. Section 11.45, Florida Statutes; 11. Chapter 218.39 and any other applicable Florida Statutes; 12. Generally accepted governmental accounting standards; 13. Any other applicable federal, state, local regulations or professional guidelines not specifically listed above as well as any additional requirements which may be adopted by these organizations in the future. D. Required Reports Following the completion of the audit of the fiscal year's financial statements for the City, the auditor shall issue; 1. The City's Audit Advisory Committee (AAC), as codified in Section 2-950(4) of the City Code, shall maintain liaison with the selected independent auditor, including but not limited to monitoring of the independent auditor's work progress, and reviewing the preliminary and final reports issued by the independent auditor. 2. A report on the audit of the financial statements for each of the three (3) fiscal years. The report shall contain an expression of the auditor's.opinion as to whether the information contained in the financial statements is presented fairly and in conformance with accounting principles generally accepted in the United States of America. If the auditor cannot express such an opinion, the reasons should be so stated in the report..Further, the auditor's opinion, with respect to the supplemental financial information presented in the combining and individual fund financial statements and schedules shall also make a reference'as to their fairness in all material respects in relation to the basic financial statements. 3. A report on internal control over financial reporting and on compliance and other matters based on an audit of financial statements performed in accordance -with Government Auditing Standards. 4. A report on compliance with requirements applicable to each major Federal program and State projects and on internal control over compliance in accordance with OMB Circular A-133 and Chapter 10.550, Rules of the Auditor General. Sixty (60) copies are required as well as an electronic copy. 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 intemal 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. 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. The reports on compliance shall include all instances of noncompliance. 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 Auditor General Finance Director Page 32 of 42 Request for Proposals (RFP) 271251,1 CFO City Manager Audit Committee Mayor City Commission Reporting to the City Commission. Auditors shall assure themselves that the City Commission is informed through the Audit Committee of each of the following: A. The auditor's responsibility under generally accepted auditing standards B. Significant accounting policies C. Management judgments and accounting estimates D. Significant audit adjustments E. Other information in documents containing audited financial statements F. Disagreements with management G_ Management consultationwith other accountants H. Major issues discussed with management prior to retention I. Difficulties encountered in performing the audit 4. A detailed management letter shall be prepared in each of the three (3) fiscal years for use by the City. It should include a summation of audit findings and recommendations affecting the financial statements, intemal control, accounting, accounting systems, legality of actions, and any other matters. Sixty (60) copies are required as well as an electronic copy. - The auditor's comments in the management letter, which among other matters shall, make special mention of the following material items discovered within the scope of the audit. A. Whether irregularities reported in preceding audit(s) have been corrected; B. Whether recommendations made in preceding audit(s) have been followed, if adopted by the City; C. Whether the financial report filed with the Florida Department of Financial Services pursuant to Section 218.32 is in agreement with the annual audit report for the said period and, if not, specify any significant differences; D. Recommendations to improve the City's present management accounting procedures, and internal control; E. Any violation of the laws, rules and regulations discovered within the scope of the audit; F. Any illegal expenditure discovered within the scope of the financial audit; G. Any improper or inadequate accounting procedures discovered within the scope of the financial audit; H. Any failure to properly record financial transactions discovered within the scope of the audit; I. All other inaccuracies, irregularities, shortages and defalcations discovered within the scope of the financial audit by the Auditor; J. A review of the provisions of Section 218.503(1) Florida Statutes, "Determination of Financial Emergency." K. Compliance with Auditor General's rules. L. A review of compliance to the City's investment policy; specifically the cash flow analysis, liquidity assessment process, benchmarking and written procedures regarding all investments (including those under the management control of the City staff and the Investment (Advisor). E. 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 their Certificate of Achievement for Excellence in Financial Reporting program. It is anticipated that the auditor will be required to provide any special assistance deemed necessary to the City in order 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 City, financial advisor and/or the underwriter, to issue a "consent and citation of expertise" as the auditor and any necessary "comfort letters". Costs Page 33 of 42 Request for Proposals (RFP) 271251,1 associated with such additional work will be based on the hourly rates listed in the auditor's proposal. 3. The auditor will be required to perform program specific audits of certain grants/programs as required by granting agencies. Specifically, the City is required to perform a separate program specific audit of The Children's Trust Programs and the Building Better Communities Bond Projects. These program specific audits are to be considered separate from the City's financial statement audit and fees for said program specific audits will be negotiated separately based on the hourly rates listed in the audit proposal. 4. The auditor may be requested to perform additional agreed upon procedures as required by the City. The agreed upon procedures engagements are to be considered separate from the City's financial statement audit and fees for said engagements will be negotiated separately based on the hourly rates listed in the audit proposal. 5. The auditor may be requested to perform other audit related services as need by the City. Additional services required are to be considered separate from the City's financial statement audit and fees for said engagements will be negotiated separately based on the hourly rates listed in the audit proposal. 6. The auditors will perform a review of the financial report of the City filed with the Department of Banking and Finance, State of Florida, pursuant to Section 218.32, Florida Statutes, to verify that it is in agreement with the financial statements for the year ended September 30, 2011, and all subsequent years covered by this agreement. 7. The auditor shall assist the City in preparing the CAFR. The City shall retain ultimate responsibility for preparation of this document; however, the auditor shall provide the following assistance: A. Proofreading the entire document; B. Verification of the implementation of recommended improvements from the prior year's submission to the GFOA under the Certificate of Achievement program; C. Verification of the implementation of new accounting standards and pronouncements; and, D. Overall review including layout, design and suggested improvements. 8. The auditor must designate two (2) "key" members of the audit team. The City shall reserve the right to approve any substitutions or changes in those staff designated as "key". 9. The auditor shall report to the City, at least weekly, the status of any potential audit adjustments so that the City may have adequate opportunity to investigate, gather information and respond if necessary. 10. At the expense of the City, the auditor agrees to have the audited financial statements of the second year of the contract term submitted as part of their annual peer review program. Additionally, the City reserves the right to request that the audited financial statements of any of the optional extensions of the contract years to also be submitted for peer review. The results of these peer reviews shall be communicated back to the City no later than ten (10) business days thereafter receipt of the completed review process. Additionally, the auditor shall make available to the City a copy of each external quality control review (peer review) conducted during the time period engaged by the City. 11. The auditor will offer, at no expense to the City, an annual government training seminar to the City's accounting staff. This seminar will be offered locally and award eight (8) hours of CPE credits per staff member. 12. The partner in charge of the audit and the audit manager, or other CPA assigned to the audit, shall agree to communicate with the City Manager or designee, the Audit Advisory Committee, the Finance Committee or the City Commission, as deemed necessary. The auditor will attend the City Commission meeting at which time the audit report will be submitted for acceptance. The auditor will be available to present the report and to respond to City Commission questions as needed. F. Working Paper Retention and Access to Working Papers All working papers and reports must be retained, at the auditor's expense, for a minimum of three (3) 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, upon request, to the following parties or their designees: 1. City of Miami 2. General Accounting Office (GAO) 3. Auditor General of the State of Florida 4. Parties designated by the federal or state governments or by the City of Miami as part of an audit quality review process Page 34 of 42 Request for Proposals (RFP) 271251,1 5. Auditors of entities of which the City of Miami is a subrecipient of grant funds. 6. 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. 7. The auditor will agree to notify the City if the Board of Accountancy or any other regulatory agency requests a review of the audit work papers concerning the City or any government client audited by the auditor's local office. 3.3. Description of the Government A. Contact Persons and Organization Chart The auditor's principal contact with the City of Miami will be the Finance Director or designee who will coordinate assistance to be provided. The accounting and financial reporting functions of the City of Miami are centralized in the Finance Department. An organizational chart of the Finance Department is attached as Attachment A. B. Background Information The City of Miami was incorporated July 28th, 1896, and has a population of approximately 399,000 according to 2010.Census information. The City is situated at the mouth of the Miami River where it is a main port of entry into Florida and the county seat for Miami -Dade County, Florida. The City comprises 34.3 square miles of land and 19.5 square miles of water. The City Charter was adopted by the electors of the City of Miami at an election held on May 17th, 1921 and was legalized and validated by Chapter 9024 of the laws of the State of Florida of 1921. During fiscal year 1997,. the residents of the City voted on a referendum that created single -member districts and an Executive Mayor form of government. The City Commission governs and legislates the City of Miami. It has five members elected on a district basis for a four-year term. The policy decisions made by the Commissioners are implemented by the City Manager. The City Manager is appointed by the Mayor.and confirmed by the Commission. The Manager is the head of the administrative branch of City government and is responsible to the Mayor for the proper administration of all City affairs. (Please refer to Attachment B for the City's organizational chart and key personnel.) The City provides the following services as authorized by its Charter: public safety, public works,. community development, economic development, planning and zoning, building inspections, sanitation, parks and recreation, cultural enrichment, public improvements, and general administrative services. The City is organized into 32 departments and 13 agencies for the provision of the same. The accounting and financial reporting functions of the City are centralized within the Finance Depai tment which is headed by Diana M. Gomez, Finance Director and consists of 67 employees. More detailed information on the City's government and its finances can be found at the city's website at www.miamigov.com. Conceming the same, a copy of the City's Comprehensive Annual Financial Report (CAFR) for the year ended September 30, 2010, the Single Audit Report for the year ended September 30, 2009, and the City's approved budget for the year ending September 30, 2011, may be found at the City's website at www.miamigov.com. A copy of the September 30, 2009 Management Letter is attached as Attachment C. For Fiscal Year 2011, the City administers a combined operating budget of approximately $469,798,000. As of September 30, 2010, the City's total payroll is approximately $298,500,000 and covers approximately 4,000 employees. C. Fund Structure The accounts of the City are organized and operated on the basis of funds. The City uses the following fund types and account groups in its internal financial reporting: General Fund Special Revenue Funds (25) Debt Service Funds (3) Capital Project Funds (11) Trust and Agency Funds, (5) Account Groups (2) D. Budgetary Basis of Accounting The City Commission annually adopts an operating budget resolution for all governmental funds of the City, except for the Capital Projects Funds. The Capital Projects Funds are budgeted on a total project basis for which annual budgets are not available. For governmental funds, budgets are prepared on a basis Page 35 of 42 Request for Proposals (RFP) 271251,1 consistent with accounting principles generally accepted in the United States of America. E. Pension Plans The City sponsors the following separate single -employer defined benefit pension plans under the administration and management of separate Boards of Trustees: the City of Miami Fire Fighters' and Police Officers' Retirement Trust (FIPO), the City of Miami General Employees' and Sanitation Employees' Retirement Trust (GESE) and Other Managed Trusts, and the City of Miami Elected Officers' Retirement Trust (EORT). The financial statements for the pension plans are prepared using the accrual basis of accounting. These plans are reported as pension trust funds in the City's financial statements, and none of them reported in the City's CAFR, is audited as part of this engagement. F. Component Units The financial statements of the City include those of the primary government and those of its component units. The City currently has six blended component units and seven discretely presented component units. None of the component units reported in the City's CAFR is audited as part of this engagement, however, the selected auditor may engage with those entities separately to audit their financial statements. G. Joint Ventures The City of Miami does not participate in any joint ventures with other governments. H. Magnitude of Finance Operations The Finance Department is responsible for development of a comprehensive financial management system for the City to include centralized accounting and financial reporting. The Department oversees general ledger functions, accounts payable, project and grants monitoring, fixed asset reporting, treasury, investment and debt management, accounts receivable, customer billing services, cash receipts, business tax receipts (aka, occupational licenses), and payroll administration. The principal functions performed and the number of employees assigned to each is as follows: I. Supporting IT Infrastructure The City of Miami implemented the Oracle E-Business Suite 11 i Enterprise Resource System (ERP) on October 1, 2006. The City is in the process of upgrading to Oracle E-Business Suite 12 during calendar year 2011 and 2012. Specific modules included in the implementation were as follows: - General Ledger - Accounts Payable - Fixed Assets - Accounts Receivable - Projects and Grants - iReceivables - Cash Management - iExpense - iProcurement - iSupplier - Sourcing - Procurement Contracts - Human Resources - Payroll - Benefits With the implementation of the new ERP system, the City changed its chart of accounts. The new chart of accounts was developed consistent with world class best practices as well as the State of Florida's Uniform Accounting System Chart of Accounts. The City's new chart includes the following segments: the Fund, the Organization (Cost Center), the Object (Account) and two future use segments (Futurel, Future2). 3.4. Information on the Records to be Audited The Govemment-wide financial statements are presented on the accrual basis of accounting. The Fund Financial Statements are presented on a modified accrual or accrual basis of accounting, depending on the fund type. The City's budget is incorporated into the general ledger and the encumbrance system is utilized Page 36 of 42 Request for Proposals (RFP) 271251,1 for expenditures. The City currently finances its OPEB on a pay-as-you-go basis. The City implemented GASB 43 and 45 in its fiscal year 2006 financial statements. The previous audit was completed by McGladrey & Pullen, LLP, which has the previous audit work papers available for inspection to the successful proposer at its offices 'at 801 Brickell Avenue, Suite 1050, Miami, FL 33131. Any fees involved for reasonable personnel costs and out-of-pocket expenses associated with the work paper review will be the responsibility of the firm awarded the contract. 3.5.Assistance to be Provided to the Auditor The finance department management personnel and staff will be available during the audit to assist the firm by providing information, documentation and explanations. Administrative help will be available to assist the auditors with preparation of sending confirmations. Clerical assistance will be available to help retrieve documents such as paid checks and invoices, and the accounting staff will be available for the preparation of schedules. The finance department staff will be responsible for preparing all financial statements, notes and other information in the CAFR. The City of Miami will provide the necessary reproduction, report covers, tabs, divider pages and work binding for the Comprehensive Annual Financial Report only. All other required reports must be reproduced and bound by the auditors. The City of Miami will provide the auditors with reasonable work space, desks, and chairs. The auditor will also be provided with access to a telephone, photocopying facilities and FAX when required in the conduct of the annual audit. 3.6. Time Requirements The awarded firm may commence the examination as soon as notification of award has been issued. Each of the following should be completed by the auditors no later than the dates indicated for the fiscal year 2011 audit. City of Miami Financial Statement Audit: 1. Detailed Audit Plan The auditor shall provide the City of Miami Audit Advisory Committee and the Finance Director by August 31 of each year both a detailed audit plan and a list of all schedules to be prepared by the City of Miami. 2. Interim Work The auditor may perform interim work during the summer months with prior coordination with the Finance Director. 3. Fieldwork The auditor shall complete all fieldwork by February 1 of each year. 4. Draft Reports The auditor shall have drafts of the audit reports and recommendations to management available for review by the Finance Director by February 15 of each year. 5. Auditor's Opinion The Auditor's Opinion must be provided no later than March 1st so City staff can proceed with report reproduction efforts and meet the GFOA deadline of March 31 st. City of Miami Single Audit and Management Letter: 1. Detailed Audit Plan The auditor shall provide the City of Miami Audit Advisory Committee and the Finance Director by August 31 of each year both a detailed audit plan and a list of all schedules to be prepared by the City of Miami. 2. Interim Work The auditor may perform interim work during the summer months with prior coordination with the Finance Director. 3. Fieldwork The auditor shall complete all fieldwork by February 15 of each year. 4. Draft Reports Page 37 of 42 Request for Proposals (RFP) 271251,1 The auditor shall have drafts of the Single Audit report and recommendations to management available for review by the Finance Director by February 28 of each year. 5. Final Reports Final reports must be provided no later than March 31 st. The auditor will be required to present the CAFR, Single Audit and Management Letter to the City Commission in May each year. Page 38 of 42 Certifficatijon Certification Staremeut Please quote on thits form, ii" rapplicnb]e, net prices for the item(:,) listed. Renton, sighed criQunal and retain a copy for your files. Prices should include al/ casts, including transportation to destination,. The Ciry reserve_ flie right 1C: ac•cepl or reject all or any Dart of tins submission. Price:: should be- firm for n mininiuin :of 120 days following the time set forclosing of the submissions. In the event of enoft, ui a :terz.iion of totals, the unit prices shall Qcvein in determining the quoted UriceS. We (I) certify that we have read your solicitation, completed the necessary docunn—ir_, and Drp.pose -to furnish .rand ci_live;, F.0,B. DES I IN ,TION, the iteun=. of se :•ice: specified herein, Ttte iundersieoed hereby certifies that De:ther the cont:'ac.tual parr nor any of its .principal OV.11,'2f.f,c' personnel have been convicted of tiny of the ;violations, or debarred or suspeuoe:d as set in section ,o,- Ordinance Nor 12271. All e. ceptions to tills stibinE ion have been Cdoctimallccl in the section beioVi (refer to paratraph and section). We . fIe j1; further certify ,�. � certify that �;I �' and information CCIIC 1llD.Cl in this, :.'11DL'll5510ll 1`.; true; and 's'; that this Submission is mnci without prior uncle.rr;andin.a., agreement, or 'conne.ction with any corporation firm, or ve won. submit -Linz. a submission ICr the same rnnteriaL, . ulna 7� ec1uloDaeni, Or set ice, and is in all lespects fair and without c_o111L-g11 P:' fralld. We (1) ag:ree to :ab1Cle by till temisrtil: conditions of this .solicitation and certify that ;1 am authorized to S:"'.Si t?3_'.5 sulatuission for tli_' aubrnittei', Please print the followiu2 and sip, your name: SUPPLERNzu r• Ernst & Youno LLP rD1DP.F.S's' 201 South Biscayne Blvd, Suite 3000, Miami, FL 33131 pH[]iyr: +1 305 358 4111 gracelyn.hodoe@ey.com 1GN r- i) EY ) �C Coordinating Partner gv;_: +1 3054151411 D .TE: May 20, 2011 FAILI-RE TO COIPLFTE. SJO'?i. AND D RI -I THIS FORM SHALL DISQUALIFY THIS BIT). 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(o)_` iTL'_ _ 9J:L10C 1`::T F =0 irvT�F;1FieF t<itdu 3LT1 OI �4 TLiT .;< �71?0 � ':lid .:{ jo t;(j i v F=.OT1J3s) i,"Oot S.t` Tr '4t3 $C sTi. ct-T.:o.TC. 7: tai=:pun 1;7^c p71y.1 =i .1 3I1" (5') 1E171 S;:jTli 'J :LGCTICCI.- i TT07_ TE lagweJeo = T3 Q :d1E(; IIOT:E1.0 W ; :�J€ j: } �' +0 �'C1i1:J U011e;nOe-1jou01SSoJ.OJd PUe SSoUISnd i0 1UGWJJeQa( 2p1J0id 10 2.1e3S ^57.T;31 L ium 11 icinaarl 8LSST000V _t gtrn 3S:T.DTL E o11:ds1300 !UJeiiy 1'Fi1Q .Ic .` 11%L'o:) 31:CC-RmIpc iltfl t J0 686T :p:>FT'.Iige.s_.I dNsJausped •710-[TGI:OIU<ii0) *'d7C1='.i01LtC^.vie ;10; :L1`.3:31-1:Td :C_I I1rL3 SIEOpU3d1.11.id0 dil r5uno,, jsu.i3 . Description: Provision of external auditing ser rice per the Specifications/Scope of Work section herein. Category: 9 t6'_U-10 Unit ofMea.ure: Dollar Unit Price: $ 440,000 Number ofUnits: 1 otai: S 440,000 rS ( oo/ cop Cuidehtiiii • Ail Right!, Reserved 1=2011 Ernst 1 YUUI1u !LP 3 Fees for services Proposer shall submit a flat fee proposal for the whole of the five (5) year term of the contract. Significant extenuating circumstances may be considered by the City in determining whether any adjustment should be made to the proposed rates for future years. The fee proposal for the initial year (Year 1) shall also provide a breakdown which differentiates the start-up costs associated with the engagement, additional costs associated with the Year 1 audit and the total fee proposed for that year of the engagement. Additionally, provide a fee schedule for the. complete audit and a singular hourly rate to be used for any additional work which the City may request outside the scope of the contract. Discuss any additional services and fees for the same which Proposer can provide and which are not specifically Listed within this RFP. FAILURE TO .SUBMIT A FEE PROPOSAL AS REQUIRED AND IN THE FORMAT DESCRIBED ABOVE SHALL DISQUALIFY PROPOSER FROM CONSIDERATION. ivONVITOTA *11,16.144.0 Reoccurring=auditLfees;i,' ;Start up,costs (Note 5)s rt :Ye gr i $440,000 $440,000 gI' Yea2 $450,000 $450,000 $460,000 $460,000 d+ Year 4i1yt $470, 000 $470,000 $480,000 $480,000 Note 1: Our estimated compensation for providing the services indicated in Section 3.2, nature of services required per the Request for Proposal, is based upon, among other things, the receipt of complete and accurate client assistance, which reconciles to the balances presented in the financial statements, in accordance with the agreed -upon timeline. Note 2: Our proposed reoccurring audit fees include administrative and travel expenses incurred by our firm and the subcontractors while providing audit services to the City. Note 3: Our proposed reoccurring audit fees include the audit of five major grant programs. The fee for each additional program, in excess of five, is $8,500. Note 4: The hourly rate to be used for any additional work, for which the City may request outside the scope of this contract is $175 per hour. Note 5: Start up costs associated with year 1 of the engagement are estimated to be 15% of our reoccurring audit fees. These costs are not included in our tees, since it is our general practice to absorb these costs. Contide^>ntial - All Rights Reserved • (c., 2011 Gl nst Ft Yuking L1..f' 45 MtactmitApe.ir- 6 C ro o tferao't Certification Statement Please quote on this form, if applicable, net prices for the item(s) listed. Return signed original and retain a copy for your files. Prices should include all costs, including transportation to destination. The City reserves the right to accept or reject all or any part of this submission. Prices should be fine for a minimum of 120 days following the time set for closing of the submissions. In the event of errors in extension of totals, the unit prices shall govern in determining the quoted prices. We (I) certify that we have read your solicitation, completed the necessary documents, and propose to furnish and deliver, F.O.B. DESTINATION, the items or services specified herein.. . The undersigned hereby certifies that neither the contractual party nor any of its principal owners or personnel have been convicted of any of the violations, or debarred or suspended as set in section 18-107 or Ordinance No. 12271. All exceptions. to this submission have been documented in the section below (refer to paragraph and section). EXCEPTIONS: With regard to Sections 1.43 and Section 2.9 of the general terms and special terns, the AICPA advises that the indemnification of a client would impair the auditors independence under interpretation 101-1.A and interpretation 101-1.C. The indemnification provisions that were in the prior auditors contract and are not the same as listed in 1.43 and 2.9, and we would like to request the same revision to these terms that the prior auditors requested in order to be in compliance with 'professional standards accordingly and not impair independence. We (I) certify that any and all information contained in this submission is true; and we (I) further certify that this submission is made without prior understanding, agreement, or connection with any corporation, finn, or person submitting a submission for the same materials, supplies, equipment, or service, and is in all respects fair and without collusion or fraud. We (I) agree to abide by all terns arid conditions of this solicitation and certify that I am authorized to sign this submission for the submitter. Please print the following and sign your name: SUPPLIER NAME' Crowe Horwath LLP ADDRESS: 350 East Las Olas Boulevard, Suite 1420, Fort Lauderdale, Florida 33301-4216 PHONE: FAX: 954.202.8600 954.202.8639 EMAIL deborah.garringer@crowehorwath.com BEEPER: SIGNED BY: / ^� Partner May 23, 2011 TITLE• DATE - FAILURE TO COMPLETE SIGN AND RETURN THIS FORM SHALL DISOUALIFY THIS BID. Page 2 of 42 Certifications Legal Name of Finn: Crowe Horwath LLP Entity Type: Partnership, Sole Proprietorship, Corporation, etc. Partnership Year Established: 1942 Office Location: City of Miami, Miami -Dade County, or Other 350 E. Las Olas Blvd. Suite 1420 Broward County, Florida Occupational License Number: Broward County Local Business Tax Receipt # 317-1229 Reg AD65785 Occupational License Issuing Agency: Broward County Occupational License Expiration Date: September 30, 2011 Respondent certifies that (s) he has read and understood the provisions of City of Miami Ordinance No. 10032 (Section 18-105 of the City Code) pertaining to the implementation of a "First Source Hiring Agreement.": (Yes or No) Yes Do you expect to create new positions in your company in the event your company was awarded a Contract by the City? (Yes or No) Yes In the event your answer to question above is yes, how many new positions would you create to perform this work? We will create at least one new senior auditor position as a result of obtaining the contract Please list the title, rate of pay, summary of duties, number of positions, and expected length or duration of all new positions which might be created as a result of this award of a Contract. Senior auditor, performing audit fieldwork duties, perm. position, approx $60-$65,000 Will Subcontractor(s) be used? (Yes or No) Yes Page 3 of 42 Line: l Description: Provision of external auditing services per the Specifications/Scope of Work section herein. Category: 94620-10 Unit of Measure: Dollar Unit Price: $ 2,095,000 Number of Units: 1 Total: 2,095,000 Page 4 of 42 Audit Services City of Miami 58 6. Fees. ,or. Services; Flat Fee for Five Year Term Audit Services for the Fiscal years ending September 30, 2011, 2012, 2013, 2014 and 2015 Year 1 Audit Fee $2,095,000 Audit Services for the Fiscal year ending September 30, 2011 Start-up Costs Additional Expenses TOTAL FEES for 2011 Audit Services for the Fiscal years ending September 30, $399,000 Not Charged Not Charged $399,000 $399,000 $409,000 $419,000 $429,000 $439,000 The amounts billed each year will not exceed the amounts noted above unless unanticipated changes in scope of work are required such as outlined below: • Assumptions used in Determining Price Proposal: Our price takes into account the agreed -upon level of preparation and assistance from your personnel. We will advise management should this not be provided or should any other circumstances arise that may cause our hours to exceed that included in our price proposal. If there is a significant change in your organizational structure or size due to acquisitions or other events, we reserve the right to revise our hours estimate. Our hours budget assumes the same major programs for Single Audit purposes as in place for the 2009 audit (the 2010 Single Audit report was not available at the time the proposal was due). Our estimate also assumes that the City will prepare the CAFR, including the MD&A, footnotes, and SEFA as well as provide assistance throughout the audit with preparing various reconciliation schedules, confirmation requests and locating documents requested during the audit process. We also assume that the City will provide an auditable trial balance with substantially all closing entries posted, all bank and investment accounts will be reconciled and beginning net assets will be reconciled. Crowe Horvath. www.crowehorwath.com @ Copyright 2010 Crowe Horwath LLP Audit Services City of Miami 59 Circumstances may. arise under which we must perform additional work and, thus, require additional billings for our services and which may delay the issuance of our report on the financial statements. Examples of such circumstances include, but.are not limited to: t Changing audit requirements ff Work due to the identification of, and management's correction of, fraud, irregularities, errors or inappropriate application of accounting pronouncements • Erroneous or incomplete accounting records to Evidence of material weaknesses or significant deficiencies in internal controls .. New or unusual transactions • Failure of your staff to prepare information in a timely manner 12 Numerous revisions to audit information Ei Rescheduling of audit fieldwork without reasonable notice (at least a full week in advance) • Results of the SEC investigation which are not known at the time of this proposal but which could have a direct and material effect on the financial statements or the disclosures. To the extent that the amount of time required to provide the services described in this letter increases due to such changes or that additional time is required to complete any new tasks outside the scope of the engagement, required by such changes, we reserve the right to adjust our hours appropriately. We will present you with our estimate of any hours revisions before beginning our work in the impacted area(s). Rates for Additional Professional Services At Crowe, we consider regular contact with our clients to be an important component of our service delivery. Accordingly, our proposed fees include routine accounting, reporting and other compliance assistance and advice for phone calls and in -person meetings. Assistance with more complex questions, issues or projects will be provided at a mutually agreed -upon price based on our hourly billing rates. The single hourly rate to be used for additional services will be $165 and will increase proportionately each year with that of the audit fees for each respective year . The fee schedule utilized in determining the total fees for the audit services is as follows: Partner $228 Manager $175 Senior Staff $125 Staff $110 Additional services that Crowe can provide include the following: Government Services Overview Crowe has been serving the needs of government organizations for more than 40 years. We work with many different types of government organizations, including, municipalities, counties, school and library districts, special service districts, state agencies, and quasi -governmental entities. We have over 125 individuals who serve over 400 state and local governments nationwide. This team of governmental experts — many of whom are former elected or appointed officials — can provide you the thought leadership and technical expertise you need. , \ Crowe Horvath, www.crowehorwath.com ©Copyright 2010 Crowe Horwath LLP Audit Services City of Miami 60 Today's government leaders are charged with delivering superior service in the midst of declining revenues and funding, greater public demand, and increasingly complex regulations. At Crowe, we strive to help governments better serve their communities by providing solutions that improve performance, optimize revenue, and manage risk. Crowe's innovative solutions help address the financial and operational issues most critical to governments in challenging economic times. Our extensive scope of competencies — business process, technology, finance, accounting, fraud investigation, risk consulting, economic development, and performance- allows us to deliver effective, cost-efficient services. imp rove,erForroanci ffi Planfor uccess 3trategic•`Ndvisory�etvii es �'H i€f PlUchce Dperationat i ffiaene; rogram>rffectiveness�Sernce Utffiz vancedTechnolatw: usmess?S ;Senrrces rawa`falented allorldorce 7147,-03 rgan® iiiiiffttranren mlie' even. aximize Fiscal Resource nancial Managemet ailtivateh rtomic honomicDevrlopi r ys.yt ana itigateTmanaal Rb nan©alRiskMNanag BUM' Regilia tc UIat0ry COm ;l7 ontor3limuluslundm wuntabilknask Management' Raked Dat-aiindTedinolo nnTedrnotogy k'Mana—ement}` Improve Performance Optimize Revenue Plan for Success: Strategic Advisory Services Practice Operational Efficiency: Program Effectiveness Services Utilize Advanced Technology: Business System Implementation Services Grow a Talented Workforce: Organizational Effectiveness Services Maximize Fiscal Resources: Financial Management Services Cultivate Economic Growth: Economic Development Services A Crowe Horwath. Strategic Planning Performance Review Shared Services Technology Planning Process Optimization Cross -sector Collaboration Program Management Organizational Change Management Enterprise Systems Enterprise Content Management Constituent Support Systems Web -site Development Performance Management Human Resources Strategy Staffing Assessment and Recruiting Compensation and Rewards __ _ Debt Issuance and Management Financial Management Rate/Revenue Studies Budgeting and Forecasting i3 Tax Increment Financing Fiscal Impact Studies Smart Growth Initiatives www.crowehorwath.com 0 Copyright 2010 Crowe Horwalh LLP Audit Services City of Miami 61 Manage Risk Mitigate Financial Risk, Financial Risk Management Ensure Regulatory Compliance: Regulatory Compliance Risk Management Monitor Stimulus Funding: Accountability Risk Management Protect Data and Technology: Information Technology Risk Management , C", ��0; a LaMIM w, Financial and Single Audit Reporting g,, Forensic Accounting and Fraud Investigation � Arbitrage Rebate E-q Verification `r_ Corporate Governance n Enterprise Risk Management g; Internal Audit n, Federal and State Programmatic _ Compliance �_Fund Monitoring and Reporting �r, Communication m Program Management a Fraud Prevention/Recovery � Benchmarking .a, Data Privacy o Web Services Security nz Vulnerability and Threat Management E, Business Continuity Management /�� Crowe H[]r8aUL vnmv.cmwononvam.com INSURANCE EXHIBIT 2.9. INSURANCE REQUIREMENTS INDEMNIFICATION Bidder shall pay on behalf of, indemnify and save City and its officials harmless, from and against any and all claims, liabilities, losses, and causes of action, which may arise out of bidder's performance under the provisions of the contract, including all acts or omissions to act on the part of bidder, including any person performing under this Contract for or on bidder's behalf, provided that ally such claims, liabilities, losses and causes of such action are not attributable to the negligence or misconduct of the City and, from and against any orders; judgments or decrees which maybe entered and which may result from this Contract, unless attributable to the negligence or misconduct of the City, and from and against all costs, attorneys' fees, expenses and liabilities incurred in the defense of any such claim, or the investigation thereof. The bidder shall furnish to City of Miami, c/o Purchasing Department, 444 SW 2nd Avenue, 6th Floor, Request for Proposals (RFP) 271251,1 Page 26 of 42 Miami, Florida 33130, Certificate(s) of Insurance which indicate that insurance coverage has been obtained which meets the requirements as outlined below: (1) Worker's Compensation A. Limits of Liability Statutory - State of Florida Waiver of Subrogation (2) Commercial General Liability: A. Limits of Liability Bodily Injury and Property Damage Liability - Each Occurrence: $1,000,000 General Aggregate Limit: $2,000,000 Personal and Adv. Injury: $1,000,000. Products/Completed Operations: $1,000,000.00. B. Endorsements Required: City of Miami included as an Additional. insured. Primary Insurance Clause Contigent & Contractual Liability Premises and Operations Liability (3) BusinessAutomobile Liability A. Limits of Liability Bodily injury and property damage liability combined single limits. Owned/Scheduled Autos, including, including hired, borrowed or non -owned autos. Any one accident - $1,000,000 B. Endorsements Required: City of Miami included as an Additional Insured (4) Employer's Liability A. Limits of Liability $100,000 for bodily injury caused by an accident, each accident $100,000 for bodily injury caused by disease, each employee $500,000 for bodily injury caused by disease, policy limit (5) Professional Liability/Errors and Omissions Coverage: A. Limits of Liability Combined Single Limit Each Claim - $1,000,000 General Aggregate Limit - $1,000,000 Deductible - not to exceed 10% BINDERS ARE UNACCEPTABLE. The insurance coverage required shall include those classifications, as listed in standard liability insurance manuals, which most nearly reflect the operations of the bidder. All insurance policies required above shall be issued by companies authorized to do business under the laws of the State of Florida, with, the. following qualifications: The Company must be rated no less than "A" as to management, and no less than "Class V" as to financial strength, by the latest edition of Best's Insurance Guide, published by A.M. Best Company, Oldwick, New Jersey, or its equivalent. All policies and/or certificates of insurance are subject to review and verification by Risk Management prior to insurance approval. Certificates will indicate no modification or change in insurance shall be made without thirty (30) days written advance notice to the certificate holder. NOTE: CITY BID NUMBER AND/OR TITLE OF BID MUST APPEAR ON EACH CERTIFICATE. Compliance with the foregoing requirements shall not relieve the bidder of his liability and obligation under this section or under any other section of this Agreement. Request for Proposals (RFP) 271251,1 Page 27 of 42 —If insurance certificates are scheduled to expire during the contractual period, the Bidder shall be responsible for submitting new or renewed insurance certificates to the City at a minimum of ten (10) calendar days in advance of such expiration. --In the event that expired certificates are not replaced with new or renewed certificates which cover the contractual period, the City shall: (4) Suspend the contract until such time as the new or renewed certificates are received by the City in the manner prescribed in the Invitation To Bid. (5) The City may, at its sole discretion, terminate this contract for cause and seek re -procurement damages from the Bidder in conjunction with the General and Special Terms and Conditions of the Bid. The Bidder shall be responsible for assuring that the insurance certificates required in conjunction with this Section remain in force for the duration of the contractual period; including any and all option terms that may be granted to the Bidder.