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HomeMy WebLinkAboutRFP - P905 AUDITING SERVICESCITY OF FORT COLLINS REQUEST FOR PROPOSALS FOR AUDITING SERVICES P-905 Proposal Date: 3:00 p.m. (our clock) October 24, 2003 1. A report on the fair presentation of the City's basic financial statements in conformity with generally accepted accounting principles. This report will be reproduced by the City in connection with the issuance of its basic financial statements. Reports Included with CAFR 1. A report on the fair presentation of the basic financial statements in conformity with generally accepted accounting principles with "in -relation -to" coverage on combining and individual nonmajor fund financial statements and schedules. Responsibility for other information _contained in the CAM shall be included in the report. Reports Included With Separately -Issued Single Audit Reports for the City and the North Front Range MPO 1. A report on the internal control structure based on the auditors' understanding of the control structure and assessment of control risk. 2. A report on compliance with applicable laws and regulations. 3. An "in -relation -to" report on the Schedule of Expenditures of Federal Awards 4. A report on the internal control structure used in administering federal financial assistance programs. 5. A report on compliance with specific requirements applicable to each major federal financial assistance programs. In the required reports on internal controls, the auditor shall communicate any reportable conditions found during the audit. A reportable condition shall be defined as a significant deficiency in the design or operation of the internal control structure, which could adversely affect the organization's ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements. Reportable conditions that are also material weaknesses shall be identified as such in the report. Nonreportable 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 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 management officials above the level of involvement as well as the City Council or Planning Council of the North Front Range MPO. Report Included With Poudre Fire Authority Financial Statements 1. A report on the fair presentation of the basic financial statements in conformity with generally accepted accounting principles with "in -relation -to" coverage on combining and individual nonmajor fund financial statements and schedules. Report Included With North Front Range MPO Financial Statements 1. A report on the fair presentation of the basic financial statements in conformity with generally accepted accounting principles with "in -relation -to" coverage on combining and individual nonmajor fund financial statements and schedules. Reporting to the Audit Committee. Auditors shall assure themselves that the CITY OF FORT COLLINS Audit 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 E. Special Considerations 1. The CITY OF FORT COLLINS currently anticipates it will prepare one or more official statements in connection with the sale of debt securities which will contain the basic financial statements and the auditor's report thereon. The auditor shall be required, if requested by the fiscal advisor and/or the underwriter, to issue a "consent and citation of expertise" letter as the auditor in connection with these engagements. Please note that the City may wish to issue its basic financial statements with accompanying report of independent accountants for various business reasons including, but not limited to, inclusion in official statements in connection with the sale of debt securities and the City may so do without consent or knowledge of such issuance by the auditor. 2. The CITY OF FORT COLLINS has determined that the United States Department of Transportation 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 -Profit Organizations. 3. The schedule of expenditures of federal awards and related auditor's report, as well as the reports on the internal controls and compliance are not to be included in the comprehensive annual financial report, but are to be issued separately. P 4. The funds of the Downtown Development Authority and General Improvement District No. 1 (component units of the City's reporting entity) and Poudre Fire Authority (a joint venture of the City) are accounted for by the City as if they were funds of the City. However, all of these entities are properly reported in the proper place for financial reporting purposes. Internal control procedures for these entities is therefore substantially the same as for the City. 5. The funds of the North Front Range MPO (a joint venture of the City) are accounted for by the North Front Range MPO and not as if they were funds of the City. Internal control procedures for the North Front Range MPO are the responsibility of their management. 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 FORT COLLINS of the need to extend the retention period. The auditor will be required to make working papers available, upon request, to the parties or their designees listed immediately below. Such requests which are initiated by the City will not be used to compromise the integrity of current or future engagements or to obtain audit programs or other trade secrets which are proprietary to the Auditor. U.S. Department of Transportation U.S. General Accounting Office (GAO) Parties designated by the federal or state governments or by the CITY OF FORT COLLINS as part of an audit quality review process Auditors of entities of which the CITY OF FORT COLLINS is a subrecipient of grant funds 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. III. DESCRIPTION OF THE CITY GOVERNMENT A. Contact Person The auditor's principal contact with the CITY OF FORT COLLINS will be Alan Krcmarik, Financial Officer (also referred to as Finance Director) or a designated representative, who will coordinate the assistance to be provided by the CITY OF FORT COLLINS to the auditor. B. Background Information Background information regarding the City and its finances is found in the City's 2002 Comprehensive Annual Financial Report and the Single Audit Report. More 7 information can be found in the 2002-03 Budget. Copies of these documents as well as the 2002 Management Letter are available for inspection at the Finance Department. Please contact James B. O'Neill II, CPPO, FNIGP Director of Purchasing and Risk Management at (970) 221-6775 to arrange to see these documents. C. Computer Systems Hardware Type: Hewlett-Packard Model: D250 Applications: J.D. Edwards OneWorld - Conference Room Pilot Operating System: HP-UX 10.20 Type: Hewlett-Packard Model: K460 Applications: J.D. Edwards OneWorld - Production system Operating System: HP-UX 10.20 Type: Hewlett-Packard Model: NetServer LH Pro Applications: J.D. Edwards OneWorld - CRP Deployment server Operating System: Microsoft Windows NT 4 Software Vendor: J.D. Edwards Corporate Applications: October 1998: Purchasing, General Ledger, Inventory Management January 1999: Budget, Fixed Assets July 1999: Payroll, Human Resources D. Internal Audit Function According to the City's Charter (Section 22.(j)), the Financial Officer's duties include the responsibility of advising the City Manager of any financial irregularity in any service area. Under this authority, the Financial Officer periodically conducts reviews and audits of financial practices of the City. The CITY OF FORT COLLINS does not maintain a formal internal audit function. E. Availability of Prior Audit Working Papers The City's 1993 through 2002 audits were performed by Bondi & Co, LLP. Audit firms submitting proposals will not be permitted to review prior auditors' working papers during the RFP process. However, the selected successor auditor will be granted access to prior auditors' working papers after the contract is awarded. N IV TIME REQUIREMENTS A. Proposal Calendar The following is a list of key dates up to and including the date oral interviews are conducted: Request for proposal issued Due date for proposals Staff ratings completed; short list developed Interviews; selection of top firm starting at 5:00 p.m. B. Notification and Contract Dates September 26, 2003 October 24, 2003 November 6, 2003 November 12, 2003 Selected firm notified November 14, 2003 Resolution to Council November 18, 2003 Contract date November 25, 2003 C. Date Audit May Commence The CITY OF FORT COLLINS will have all records ready for interim audit work and appropriate management personnel available to meet with the firm's personnel in November after contract negotiations are completed. D. Auditor should provide a work plan to be agreed upon by the City prior to commencement of fieldwork each year. Note: Final opinions must be dated no later than May 31st each year. The work plan should include: Interim Work 2. Detailed Audit Plan The auditor shall provide CITY OF FORT COLLINS by December 1, 2003, both a detailed audit plan and a list of all schedules to be prepared by the CITY OF FORT COLLINS. 3. Reports Drafts of the audit opinions and final opinions are to be dated no later than May 31, 2004 in order to comply with the City's Charter requirement that the audit be completed by May 31. Recommendations to management available for review by the Audit Committee and management. N CAFR The Accounting Division shall complete draft financial statements and notes by about May 10, 2004. The auditor shall provide all recommendations, revisions and suggestions for improvement to the Accounting Division by May 24, 2004. The Accounting Division shall complete the introductory and statistical sections as well as all required supplementary information for its CAFR on or about May 24. It is anticipated that the final report will be delivered to the City's printer on or about June 4th. A signed auditor's opinion will be needed for the report by that date. Single Audits for the City and the North Front Range MPO The Accounting Division and the administrative staff of the North Front Range MPO shall complete preliminary drafts for planning purposes of the Schedule of Expenditures of Federal Awards (EFA) by December 1, 2003. The final Schedule of EFA will be completed by May 14, 2004. The separate Single Audit Report including all applicable opinions and the related Schedule of EFA, shall be typed and printed by the auditor and 25 copies submitted to the City by June 15, 2004. Poudre Fire Authority Financial Statements The Accounting Division shall complete draft financial statements and notes by June 1, 2004. The auditor shall provide all recommendations, revisions and suggestions for improvement to the Accounting Division by June 10, 2004. The Accounting Division shall then make any necessary corrections to the statements and submit the final draft to the auditor for printing and inclusion of the auditor's opinion. The final report should be delivered to the City by June 30, 2004. North Front Range MPO Financial Statements The administrative staff of the North Front Range MPO shall complete draft financial statements and notes by June 1, 2004. The auditor shall provide all recommendations, revisions and suggestions for improvement to the North Front Range MPO by June 10, 2004. The North Front Range MPO shall then make any necessary corrections to the statements and submit the final draft to the auditor for printing and inclusion of the auditor's opinion. The final report should be delivered to the North Front Range MPO by June 30, 2004. 5. Entrance Conferences, Progress Reporting and Exit Conferences (A similar time schedule will be developed for audits of future fiscal years if the CITY OF FORT COLLINS exercises its option for additional audits). In addition, a similar set of audit conferences may be required outside of the City with the management and Planning Council of the North Front Range MPO. 10 At a minimum, the following conferences should be held: a. Entrance conference with key Finance Department personnel The purpose of this meeting will be to discuss prior audit issues and the interim work to be performed. This meeting will also be used to establish overall liaison for the audit and to make arrangements for work space and other needs of the auditor. b. Progress conference with key Finance Department Personnel The purpose of this meeting will be to summarize the results of the preliminary review and to identify the key internal controls or other matters to be tested. C. Progress conference with Audit Committee, if necessary d. Exit conference with key Finance Department personnel, The purpose of this meeting will be to summarize the results of the field work and to review significant findings V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department Assistance The Finance Department staff and responsible management personnel will be available during the audit to assist the firm by providing information, documentation and explanations. The preparation of confirmations will be the responsibility of the CITY OF FORT COLLINS. B. Electronic Data Processing (EDP) Assistance EDP personnel will be available to assist the auditor in performing the engagement. EDP personnel will also be available to provide systems documentation and explanations. The auditor will be provided computer time and the use of the CITY OF FORT COLLINS computer hardware and software. C. Work Area, Telephones, Photocopying and FAX Machines The CITY OF FORT COLLINS will provide the auditor with reasonable work space, desks and chairs. The auditor will also be provided with access to one telephone line, photocopying facilities, and FAX machines subject to the following restrictions: Long-distance telephone calls and faxes shall be made at the auditor's expense. D. Statements, Schedules and Working Papers to be Prepared by Accounting Division Staff 11 The Accounting Division staff prepares all financial statements, schedules, and other information to be included in the CAFR. They also prepare all financial statements for Poudre Fire Authority and the Schedule of Expenditures of Federal Awards to be included in the separately -issued Single Audit Report. Financial statements are generated utilizing the City's JD Edwards Software and final camera-ready copies are generated through customized PC spreadsheets and word processing programs. In addition to preparing all financial statements, the Accounting Division prepares a Master File for each major segment of the City's accounting cycle. The master file serves as a basis for tracing most major balance sheet accounts to working papers for each individual fund. The Accounting Division staff also prepares an "audit package" for each of the City's funds. The audit package consists of draft financial statements, trial balance, year- end adjusting entries, and all supporting working papers. All of the master files and audit packages are copied and made available to the auditor to include in the firm's working papers. The administrative staff of the North Front Range MPO prepares all financial statements, schedules, and other information to be included in the North Front Range MPO's financial statements. E. Accounting Division Profile The Accounting Division consists of 5 professionals: the Accounting & Financial Reporting Manager, the Senior Accountant and 3 Accountants. The Accounting & Financial Reporting Manager is a CPA with 10 years of experience in governmental accounting and has been with the City for 4 years. The Senior Accountant has over 40 years of experience with the City. The 3 Accountants collectively have over 10 years of experience in governmental accounting. F. Report Preparation Preparation of the CAFR, editing and printing shall be the responsibility of the City. The auditing firm shall submit drafts of its reports to the City for typing and collating into the City's documents. 12 VI. PROPOSAL REQUIREMENTS A. General Requirements Inquiries Inquiries concerning the request for proposals and the subject of the request for proposals must be made to: Alan Krcmarik, Financial Officer City of Fort Collins P. O. Box 580 215 North Mason Street, 2nd Floor Fort Collins, CO 80522 (970)221-6788 James B. O'Neill II, CPPO, FNIGP Director of Purchasing and Risk Management P.O. Box 580 215 North Mason Street, 2nd Floor Fort Collins, CO 80522 (970)221-6775 UNLESS OTHERWISE SPECIFIED HEREIN, CONTACT WITH PERSONNEL OF THE CITY OF FORT COLLINS OTHER THAN THE ABOVE REGARDING THIS REQUEST FOR PROPOSALS MAY BE GROUNDS FOR ELIMINATION FROM THE SELECTION PROCESS. 2. Submission of Proposals The following material is required to be received by October 24, 2003, for a proposing firm to be considered: a. Fifteen copies of a Technical Proposal to include the following: i. Title Page Title page showing the request for proposals subject; the firm's name; the name, address and telephone number of the contact person; and the date of the proposal. ii. Table of Contents iii. Transmittal Letter A signed letter of transmittal briefly stating the audit firm's understanding of the work to be done, the commitment to perform the work within the time period, a statement why the firm believes itself to be best qualified to perform the 13 engagement and a statement that the proposal is a firm and irrevocable offer for a five year period beginning with the 2003 fiscal year audit and ending with the 2007 fiscal year audit. iv. Technical Proposal The technical proposal should follow the order set forth in Section VI B, items 2-11 of this request for proposals. V. Dollar Cost Bid The dollar cost bid should follow the order set forth in Section VI C, items 1-3 of this request for proposals. b. Audit firms submitting proposals should send or deliver the completed proposal to the following address: James B. O'Neill II, CPPO, FNIGP Director of Purchasing & Risk Management City of Fort Collins P.O. Box 580 215 North Mason Street, 2Id Floor Fort Collins, CO 80522 B. Technical Proposal General Requirements The purpose of the Technical Proposal is to demonstrate the qualifications, competence and capacity of the firms seeking to undertake an independent audit and additional services for the CITY OF FORT COLLINS in conformity with the requirements of this request for proposals. As such, the substance of proposals will carry more weight than theirform or manner of presentation. The Technical Proposal should demonstrate the qualifications of the firm and of the particular staff to be assigned to this engagement. It should also specify an audit approach that will meet the request for proposals requirements. The Technical Proposal should address all the points outlined in the request for proposals. The Proposal should be prepared simply and economically, providing a straightforward, concise description of the audit firm's capabilities to satisfy the requirements of the request for proposals. While additional data may be presented, the following subjects, items Nos. 2 through 12, must be included. They represent the criteria against which the proposal will be evaluated. 14 City of Fort Collins Administrative Services Purchasing Division REQUEST FOR PROPOSAL CITY OF FORT COLLINS AUDIT SERVICES PROPOSAL NO. P-905 The City of Fort Collins is seeking proposals from qualified firms of certified public accountants to audit the CITY OF FORT COLLINS financial statements for the fiscal year ending December 31, 2003, with a renewal option, at the City's discretion, for up to four subsequent fiscal years. Written proposals, fifteen (15) will be received at the City of Fort Collins' Purchasing Division, 215 North Mason St., 2nd floor, Fort Collins, Colorado 80524. Proposals will be received before 3:00 p.m. (our clock), October 24, 2003. Proposal No. P-905. If delivered, they are to be sent to 215 North Mason Street, 2"d Floor, Fort Collins, Colorado 80524. If mailed, the address is P.O. Box 580, Fort Collins, 80522-0580. Important Notice: Registration: The City of Fort Collins Purchasing Division has implemented an on-line vendor registration system. This system allows vendors to register, view and update their business information and commodities. In the future, vendors will also be able to receive Requests for Proposals (RFP's) through the on-line system. All vendors doing business with the City of Fort Collins are requested to register. The vendor registration system is accessible through the City of Fort Collins Purchasing Department internet webpage at www.fcgov.com/purchasing. The vendor registration form is located by 71M clicking https://secure2.fcqov.com/bso/login.isr) > de➢13> purchasing aarch Note the printable instruction pages link. o,1�F tChStns. EEO W541 Pn 19]0113r-6])5 ads PS Note- Watch for Changen Anyone devmloat lhg City of Fort colll,uAdd Information must author monitor this pagefarany bid OdtlnN . rP9bdAs huffy Purchasing that they have downluaded a bid so such eddendums can be say be m aimed, an them. Bids must cal on 'A. _,tledp_ bNdre the schadubd opening time. S.'.i:Ildeld2X,kuT.h1['i. • w_3C.$PINTI, Dus- ionl ARF•.?I nN VC.M1OVem • Chc.t.ul rgjl;}. TM City of Fat Cohns is implant inA new on Lase - disseminating bids, quotes ano requests for Pm I. you register by going to Ytm J kno o. ydu also do„.nd If you have any difficulty completing the registration process, please call the Purchasing Division at (970)221-6775 for assistance. Questions concerning the scope of the project should be directed to Project Manager Alan Krcmarik, Finance Director, (970) 221-6788. Questions regarding proposals submittal or process should be directed to Director of Purchasing & Risk Management, James B. O'Neill II, CPPO, FNIGP (970) 221-6775. UNLESS OTHERWISE SPECIFIED HEREIN CONTACT WITH PERSONNEL OF THE CITY OF FORT COLLINS OTHER THAN THE ABOVE REGARDING THIS REQUEST FOR PROPOSALS MAY BE GROUNDS FOR ELIMINATION FROM THE SELECTION PROCESS. 215 North Mason Street is 2nd Floor e P.O. Box 580 p Fort Collins, CO 80522-0580 a (970) 221-6775 a FAX (970) 221-6707 2. Independence The firm should provide an affirmative statement that is independent of the CITY OF FORT COLLINS as defined by generally accepted auditing standards, the U.S. General Accounting Office's Government Auditing Standards. The firm also should provide an affirmative statement that it is independent of all of the component units of the CITY OF FORT COLLINS as defined by those same standards including the City of Fort Collins Downtown Development Authority, General Improvement District No. 1, and the City of Fort Collins Urban Renewal Authority. The firm should also provide an affirmative statement that is independent of the Poudre Fire Authority and the North Front Range MPO. The firm should also list and describe the firm's (or proposed subcontractors') professional relationships involving the CITY OF FORT COLLINS or any of its boards, commissions, and agencies or component units and agencies, including Poudre Fire Authority for the past five (5) years, together with a statement explaining why such relationships do not constitute a conflict of interest relative to performing the proposed audit. In addition, the firm shall give the CITY OF FORT COLLINS written notice of any professional relationships entered into during the period of the engagement. 3. License to Practice in Colorado An affirmative statement should be included that the firm and all assigned key professional staff are properly licensed to practice in Colorado. 4. Firm Qualifications and Experience The audit firm should state the size of the firm, the size of the firm's governmental audit staff, the location of the office from which the work on this engagement is to be performed and the number and nature of the professional staff to be employed in this engagement on a full-time basis and the number and nature of the staff to be so employed on a part-time basis. If the audit firm is a joint venture or consortium, the qualifications of each firm comprising the joint venture or consortium should be separately identified and the firm that is to serve as the principal auditor should be noted, if applicable. The firm is also required to submit a copy of the report on its most recent external quality control review, with a statement whether that quality control review included a review of specific government engagements. 15 The firm shall also provide information on the results of any federal or state desk reviews or field reviews of its audits during the past three (3) years. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with state regulatory bodies or professional organizations. 5. Partner, Supervisory and Staff Qualifications and Experience Identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement. Indicate whether each such person is registered or licensed to practice as a certified public accountant in Colorado. Provide information on the government auditing experience of each person, including information on relevant continuing professional education for the past three (3) years and membership in professional organizations relevant to the performance of this audit. Provide as much information as possible regarding the number, qualifications, experience and training, including relevant continuing professional education, of the specific staff to be assigned to this engagement. Indicate how the quality of staff over the term of the agreement will be assured. Indicate how all levels of staff keep "current" in their knowledge of governmental accounting, auditing, and financial reporting as well as federal and state laws and regulations which may have a financial impact on the City. Engagement partners, managers, other supervisory staff and specialists may be changed if those personnel leave the firm, are promoted or are assigned to another office. These personnel may also be changed for other reasons with the express prior written permission of the CITY OF FORT COLLINS. However, in either case, the CITY OF FORT COLLINS retains the right to approve or reject replacements. Consultants and firm specialists mentioned in response to this request for proposal can only be changed with the express prior written permission of the CITY OF FORT COLLINS, which retains the right to approve or reject replacements. Other audit personnel may be changed at the discretion of the proposer provided that replacements have substantially the same or better qualifications or experience. 6. Similar Engagements With Other Government Entities For the firm's office that will be assigned responsibility for the audit, list the most significant engagements (maximum - 5) performed in the last five years that are similar to the engagement described in this request for proposals. These engagements should be ranked on the basis of total staff hours. 16 Indicate the scope of work, date, engagement partner(s), total hours, and the name and telephone number of the principal client contact. Indicate whether or not the client's financial report received the GFOA Certificate of Achievement for excellence in financial reporting. Also indicate if a single audit was involved. A description of other governmental engagements performed by the local office in the past five years may be included as a supplementary schedule in the proposal. 7. Specific Audit Approach The proposal should set forth a work plan, including an explanation of the audit methodology to be followed, to perform the services required in Section II of this request for proposal. Audit firms submitting proposals will be required to provide the following information on their audit approach: a. How you envision understanding and auditing various major segments of the City's accounting system including, but not limited to cash, investments, receivables, fixed assets, long-term debt, payroll, revenues, and expenditures. b. Level of staff and number of hours to be assigned to each proposed segment of the engagement C. Sample size and the extent to which statistical sampling is to be used in the engagement d. Extent of use of EDP software by the firm in the engagement e. Type and extent of analytical procedures to be used in the engagement f. Approach to be taken to gain and document an understanding of the CITY OF FORT COLLINS internal control structure g. Approach to be taken in determining laws and regulations thatwill be subject to audit test work h. Approach to be taken in drawing audit samples for purposes of tests of compliance 8. Identification of Anticipated Potential Audit Problems The proposal should identify and describe any anticipated potential audit problems, the firm's approach to resolving these problems and any special assistance that will be requested from the CITY OF FORT COLLINS. 17 9. Bond Offerings The proposal should indicate the firm's (local office) experience in dealing with bond offering official statements. Also indicate if the local office is authorized to approve all work involved with reviewing bond offering official statements or must such approval be received from a national or regional office? Briefly discuss what the scope of the firm's involvement would be in order to sign a consent letter approving the issuance of the firm's opinion on the City's general purpose financial statements included in a bond offering document; that is, do you read the official statement, verify or audit the City's representations, foot all numerical tables, etc. See Appendix F for additional information. 10. Arbitrage Rebate The proposal should indicate the firm's (local office) experience in calculating and verifying rebatable arbitrage earnings for state and local government entities. Identify staff that would perform this type of service and the types of software utilized. List clients for which this type of service has been performed by the local office and indicate scope of work, date, total hours, and the name and telephone number of the principal client contact. If the local office does not provide this type of service, indicate relevant experience of the firm and how the firm would provide the service to the City. See Appendix F for additional information. 11. Escrow Verification The proposal should indicate if the office that would be assigned to the City's engagement (local office) has experience in escrow verification services for advance refundings of municipal bond issues. Identify staff who perform this type of service and the types of software utilized. List clients for which this type of service has been performed by the local office and indicate scope of work, date, total hours, and the name and telephone number of the principal client contact. If the local office does not provide this service, provide details about the firm's experience and ability to serve the City. See Appendix F for additional information. 12. Agreed Upon Procedures Relating to City's Franchise Agreement with Provider of Cable Television and Other Subscriber Services The proposal should indicate the firm's (local office) experience in performing agreed upon procedures relating to municipal franchise agreements with providers of cable television and other subscriber services. List clients for which this type of service has been performed by the local office and indicate scope of work, date, total hours, and the name and telephone number of the principal client contact. If the local office does not provide this type of service, indicate relevant experience of the firm and how the firm would provide the service to the City. See Appendix F for additional information. 18 C. Dollar Cost Bid Total All-inclusive Maximum Price The dollar cost bid should contain all pricing information relative to performing the audit engagement as described in this request for proposal. The total all-inclusive maximum price to be bid is to contain all direct and indirect costs including all out-of-pocket expenses. The CITY OF FORT COLLINS will not be responsible for expenses incurred in preparing and submitting the technical proposal or the dollar cost bid. Such costs should not be included in the proposal. The first page of the dollar cost bid should include the following information: a. Name of Firm b. Certification that the person signing the proposal is entitled to represent the firm, empowered to submit the bid, and authorized to sign a contract with the CITY OF FORT COLLINS. C. A Total All-inclusive Maximum Price for the 2003 audit engagement. 2. Rates by Partner, Specialist, Supervisory and staff level times hours anticipated for each. The second page of the dollar cost bid should include a schedule of professional fees and expenses, presented in the format provided in the attachment (Appendix A), that supports the total all-inclusive maximum price of performing the 2003 audit. The cost of additional services described Appendix F of this request for proposal should be the third page of the dollar cost bid utilizing the format provided in the attachment (Appendix B). 3. Rates for Other Professional Services If it should become necessary for CITY OF FORT COLLINS to request the auditor to render any other services not specified or requested in this RFP then such other work shall be performed only if set forth in an addendum to the contract between CITY OF FORT COLLINS and the firm. Any such additional work agreed to between CITY OF FORT COLLINS and the firm shall be performed at the rates set forth in the schedule of fees and expenses included in the dollar cost bid indicated using the format in Appendix C. This should be the fourth page of the dollar cost bid. 4. Manner of Payment Progress payments will be made on the basis of hours of work completed during the course of the engagement and out-of-pocket expenses incurred in accordance with the firm's dollar cost bid proposal. Interim billing shall cover 19 a period of not less than a calendar month. Ten percent (10%) will be withheld from each billing pending delivery of the firm's final reports. VII. EVALUATION PROCEDURES Firms will be evaluated using the criteria enumerated below. These criteria will be the basis for review of the written proposals as well as the oral interviews. The rating scale shall be from 1 to 5 for each criterion, with 1 being a poor rating, 3 being an average rating, and 5 being an outstanding rating. Each criterion also has a weighting factor as disclosed below. A. Review of Proposals A Staff Committee will use the point formula during the review process to score proposals. Each member of the Staff Committee will first score each proposal by each of the criteria described in Section B below. B. Evaluation Criteria Proposals are evaluated using three sets of criteria. Firms meeting the mandatory criteria (section 1 below) will have their proposals evaluated and scored for both technical qualifications (section 2) and price. The following represent the principal selection criteria which are considered during the evaluation process. 1. Mandatory Elements a. The audit firm is independent and licensed to practice in Colorado b. The firm has no conflict of interest with regard to any other work performed by the firm for the City of Fort Collins. C. The firm adheres to the instructions in the request for proposal on preparing and submitting the proposal. d. The firm submits a copy of its last external quality control review report and the firm has a record of quality audit work. 2. Technical Quality a. Firm capability --weighting factor = 3.0 i. The firm's past experience and performance on comparable government engagements. ii. The firm's experience in performing Single Audit engagements. The firm's experience and performance in providing timely 20 and relevant management comments and advice to governing boards and staff of similar governmental entities. iv. The firm's experience in being associated with bond offering official statements with other similar governmental entities. V. The firm's capability of providing arbitrage rebate and escrow verification services, and agreed upon procedures relating to City's franchise agreement with provider of cable television and other subscriber services. b. Assigned personnel --weighting factor = 2.0 The quality of the firm's professional personnel to be assigned to the engagement and the quality of the firm's management support personnel to be available for technical consultation. C. Scope of Proposal --weighting factor = 2.0 Adequacy of proposed staffing plan for various segments of the engagement. Adequacy of sampling techniques. iii. Adequacy of analytical procedures. iv. Understanding of the objectives of the audit, including supplemental work to be completed. d. Availability --weighting factor = 1.0 Adequacy of proposed timing of completing all steps involved in the engagement. Availability of the firm's staff to consult with the City on finance -related matters. e. Motivation --weighting factor = 1.0 Interest in completing the work in an effective, efficient, and timely manner. 3. Price and work hours --weighting factor = 2.0 C. Firms to be Interviewed After proposals are evaluated, the Staff Committee develops a list of three firms to be interviewed based on the total point evaluation. After this list is developed, the 21 Audit Committee will review the proposals and the list to determine if it would like to interview any additional firms. D. Background Check A detailed background check will be made of all firms to be interviewed. This will include contact with the Colorado Society of CPAs, Colorado State Board of Accountancy, and references listed in the proposal. In addition, the firm may be contacted regarding other matters of significance noted in the proposal. The results of the background check are utilized by the Audit Committee in ranking the firms during the oral presentation process. E. Oral Presentations During the evaluation process, oral presentations are made. Such presentations will provide firms with an opportunity to answer any questions the City may have on a firm's proposal. During the interviews, the Audit Committee will assign points to the various technical and cost criteria described above. These rankings will be independent of the rankings developed by the staff committee. The rankings will be aggregated and the firm with the top score will be recommended to City Council by the Audit Committee. Please note: Firms selected for interviews should clear their calendars for interviews beginning at 5:00 p.m., November 12, 2003, to meet with the Audit Committee. Interviewed firms should be prepared to bring key staff at all levels to the interview. F. Final Selection The City Council will select a firm based upon the recommendation of the Audit Committee. This is done by Resolution. The Council may approve or reject the Audit Committee's recommendation. It is anticipated that a firm will be selected at the November 18, 2003 City Council Meeting. The recommended firm will be available at this meeting to answer any City Council questions that arise. Following notification of the firm selected, it is expected a contract will be executed between both parties by December 1, 2003. G. Right to Reject Proposals Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposal unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the CITY OF FORT COLLINS and the firm selected. The CITY OF FORT COLLINS reserves the right without prejudice to reject any or all proposals. 22 APPENDICES A. Format for Schedule of Professional Fees and Expenses to Support the Total All - Inclusive Maximum Price B. Format for Schedule of Professional Fees and Expenses for Additional Services Described in Appendix F C. Format for Schedule of Professional Fees and Expenses forAdditional Services Not Specified in Appendix F D. Prior Year's Audit Fees E. Scope of Services F. Additional Services G. Services Agreement 23 APPENDIX A Page 1 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDITS OF THE 2003 CITY, POUDRE FIRE AUTHORITY AND THE NORTH FRONT RANGE MPO FINANCIAL STATEMENTS AND RELATED 2003 SINGLE AUDITS Standard Quoted Hourly Hourly Hours Rates Rates Total Partners Managers Supervisory staff Staff Other (specify): Subtotal Out-of-pocket expenses: Meals and lodging Transportation Other (specify): Total all-inclusive maximum price for 2003 audit Of the Total all-inclusive maximum price for the 2003 audit, please estimate the expected costs for the services related to the North Front Range MPO and the Poudre Fire Authority: North Front Range MPO Poudre Fire Authority 24 A copy of the Proposal may be obtained as follows: Call the Purchasing Fax -line, 970-416-2033 and follow the verbal instruction to request document #30905. 2. Download the Proposal/Bid from the Purchasing Webpage, www.fcqov.com/r)urchasing. 3. Come by Purchasing at 215 North Mason St., 2"d floor, Fort Collins, and request a copy of the Bid. Sales Prohibited/Conflict of Interest: No officer, employee, or member of City Council, shall have a financial interest in the sale to the City of any real or personal property, equipment, material, supplies or services where such officer or employee exercises directly or indirectly any decision - making authority concerning such sale or any supervisory authority over the services to be rendered. This rule also applies to subcontracts with the City. Soliciting or accepting any gift, gratuity favor, entertainment, kickback or any items of monetary value from any person who has or is seeking to do business with the City of Fort Collins is prohibited. Collusive or sham proposals: Any proposal deemed to be collusive or a sham proposal will be rejected and reported to authorities as such. Your authorized signature of this proposal assures that such proposal is genuine and is not a collusive or sham proposal. The City of Fort Collins reserves the right to reject any and all proposals and to waive any irregularities or informalities. Sincerely, ames . O'Neill TI, CPPO FNIGP ire r of Purchasing & Risk Management APPENDIX B Page 1 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR ADDITIONAL SERVICES (SERVICES ARE DESCRIBED IN RFP APPENDIX Fl Nature of Service To Be Provided 2003 Audits of City, Poudre Fire Authority and North Front Range MPO* 2004 Audits of City, Poudre Fire Authority and North Front Range MPO* 2005 Audits of City, Poudre Fire Authority and North Front Range MPO* 2006 Audits of City, Poudre Fire Authority and North Front Range MPO* 2007 Audits of City, Poudre Fire Authority and North Front Range MPO* Issuance of Consent Letter for a Bond Issue Verification of Arbitrage at the End of Each Five -Year Period of a Bond Issue Verification of Bond Escrow for a Bond Issue Agreed Upon Procedures Performed in Relation to City's Cable TV Franchise Agreement with Service Provider * Including Single Audits for the City and the North Front Range MPO. 25 Maximum All -Inclusive Total Price Appendix C Page 1 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR ADDITIONAL SERVICES NOT SPECIFIED IN APPENDIX F: Standard Quoted Hourly Hourly Rates Rates Partners Managers Supervisory Staff Staff Other (specify): Out-of-pocket expenses: Meals and lodging (amount per person per day) Transportation (cents -per -mile) Other (specify): This schedule should reflect the hourly rates for any additional work outside the scope of this RFP if the City requests it. 26 Appendix D Page 1 PRIOR YEARS' AUDIT FEES Fees paid for the performance of the past five year's audits are as follows: 1998 audit $50,500 (includes $2,500 mileage) 1999 audit $51,500 (includes $2,500 mileage) 2000 audit $52,500 (includes $2,500 mileage) 2001 audit $54,500 (includes $2,500 mileage) 2002 audit $56,500 (includes $2,500 mileage) + $15,000 one time charge" Included in the scope of these audits were the audits of the financial statements of Poudre Fire Authority and the City's Single Audits. "" Includes a one-time charge of $15,000 related to converting financial statements to Governmental Accounting Standards Board Statement #34 27 Appendix E Page 1 SCOPE OF SERVICES In connection with, and as part of, the audit engagement, the City has determined specific inquiries, procedures, and reports to be completed by the auditor which extend beyond those required in a financial audit. Such procedures will be performed as a part of each audit engagement and appropriate reports (management letters) submitted to the City or the North Front Range MPO containing such information as is necessary to inform City Council, the City Audit Committee or the Planning Council of the North Front Range MPO about these matters. 1. Provide hourly rate schedule to be used for these services. 2. Critique of financial management and reserve policies set forth in the budget document. a. Review to see if policies are being followed in practice. b. Evaluate reasonableness of assumptions. 3. Review budget document. a. Read the City's printed budget document. b. Comment on noticeable trends --healthy or unhealthy. C. Evaluate reasonableness of significant budgetary assumptions. d. Comment regarding budgetary presentation. 4. Provide a briefing on new statutes or regulations which may have a significant financial impact on the City. 5. Provide highlights of areas in which the City is managing its financial affairs well. a. Indicate notable accomplishments such as the fact that there have been no audit adjustments made. b. Analyze statistical information for positive trends. C. Analyze financial statements for healthy indicators. 6. Compare the City's financial position and results of operations with selected other cities that have characteristics similar to the City. 7. Provide highlights of areas in which the City could improve its financial management. 28 If there are areas of concern which management is already addressing, say so. b. Point out inefficiencies noted. C. Point out problems; recommend solutions. Provide a synopsis of the five most important financial matters which the City needs to address in the coming year. 8. Provide a briefing on the potential impact of new or proposed GASB pronouncements on the City's operations and financial statements. Also point out new auditing standards which may affect the City. 9. Update the progress of previous management letters to the Audit Committee and/or Council. 10. Issue separate management letters for North Front Range MPO and if warranted, for Poudre Fire Authority. 11. In a separate letter, indicate reportable conditions and material instances of noncompliance required by generally accepted auditing standards. 12. Evaluate and address in the management letter, any matters brought to the attention of auditor by the Audit Committee; solicit additional items from the Audit Committee that the firm should address. 13. Auditors should give an hourly rate to complete special studies or give advice to the Audit Committee. Example: Advise the Audit Committee on the reliability of the City tax base and revenue mix. The specifics of each project would be discussed and agreed upon each year in November with the Audit Committee. Mi Appendix F Page 1 ADDITIONAL SERVICES As stated in Section I B of the RFP, the City intends that the term of its engagement with the selected firm will be five years, subject to an annual review and recommendation of the Audit Committee. Firms should include in their proposal an all-inclusive maximum price for the audit of each of the subsequent four years using the form provided in Appendix B. 2. The City periodically asks its auditors to consent to the use of their opinion on the City's financial statements in connection with bond offering official statements. Indicate on Appendix B your firm's all-inclusive maximum price for the issuance of a consent letter in connection with one of the City's bond offering official statements. Examples of recent official statements for City bond issues are available for inspection at the Finance Department. Please contact Alan Krcmarik at (970) 221-6788 to arrange to see these documents. 3. In connection with its bond issues, the City is required to track rebatable arbitrage earnings. The City uses Microsoft Excel to track arbitrage. However, the City relies on outside consultants (as well as bond counsel) to assist with verifying its calculations. Indicate on Appendix B your firm's all-inclusive maximum price for assistance with verifying rebatable arbitrage at the end of each five-year period for one of the City's bond issues. Examples of recent calculations for City bond issues are available for inspection at the Finance Department. Please contact Alan Krcmarik at (970) 221-6788 to arrange to see these documents. 4. In connection with the advance refunding of its bond issues, the City hires independent accountants to verify the sufficiency of refunding escrows. Indicate on Appendix B your firm's all-inclusive maximum price for assistance with verifying the refunding escrow for one of the City's refunding bond issues. Examples of recent verification calculations for City bond issues are available for inspection at the Finance Department. Please contact Alan Krcmarik at (970) 221-6788 to arrange to see these documents. 5. In connection with the agreed upon procedures relating to the City's franchise agreement with the provider of cable television and other subscriber services, the City hires independent accountants to verify accuracy of the franchise payments to the City, analyze the specific revenues included in calculating the franchise fee payment, identify any excluded revenue and reason for exclusion, analyze the subscriber listing to determine that franchise fees are collected from all subscribers within the City limits, and assess financial viability of company providing cable television and other subscriber services. Indicate on Appendix B your firm's all-inclusive maximum price for performing the above agreed upon procedures. Examples of recent agreed upon procedures and related findings from the City franchise agreement with provider of cable television and other subscriber services are available for inspection at the Finance Department. Please contact Alan Krcmarik at (970) 221-6788 to arrange to see these documents. 30 Appendix G Page 1 SERVICES AGREEMENT Attached is a copy of the City's standard Services Agreement. The firm selected in this RFP process should expect to sign a similar agreement, modified for the particulars of the audit and this RFP in order to complete the auditor selection process. 31 PROFESSIONAL SERVICES AGREEMENT THIS AGREEMENT made and entered into the day and year set forth below, by and between THE CITY OF FORT COLLINS, COLORADO, a Municipal Corporation, hereinafter referred to as the "City" and , [insert either a corporation, a partnership or an individual, doing business as ], hereinafter referred to as 'Professional'. W ITNESSETH: In consideration of the mutual covenants and obligations herein expressed, it is agreed by and between the parties hereto as follows: 1. Scope of Services. The Professional agrees to provide services in accordance with the scope of services attached hereto as Exhibit "A", consisting of ( ) page[s], and incorporated herein by this reference. 2. The Work Schedule. [Optional] The services to be performed pursuant to this Agreement shall be performed in accordance with the Work Schedule attached hereto as Exhibit "B", consisting of ( ) page[s], and incorporated herein by this reference. 3. Contract Period. This Agreement shall commence _, and shall continue in full force and effect until _, unless sooner terminated as herein provided. In addition, at the option of the City, the Agreement may be extended for additional one year periods not to exceed _ (_) additional one year periods. Written notice of renewal shall be provided to the Service Provider and mailed no later than ninety (90) days prior to contract end. 4. Early Termination by City. Notwithstanding the time periods contained herein, the City may terminate this Agreement at any time without cause by providing written notice of termination to the Professional. Such notice shall be delivered at least fifteen (15) days prior to the termination date contained in said notice unless otherwise agreed in writing by the parties. PSA 10/97 32 All notices provided under this Agreement shall be effective when mailed, postage prepaid and sent to the following addresses: Professional: City: With Copy to: In the event of any such early termination by the City, the Professional shall be paid for services rendered prior to the date of termination, subject only to the satisfactory performance of the Professional's obligations under this Agreement. Such payment shall be the Professional's sole right and remedy for such termination. 5. Design, Proiect Indemnity and Insurance Responsibility. The Professional shall be responsible for the professional quality, technical accuracy, timely completion and the coordination of all services rendered by the Professional, including but not limited to designs, plans, reports, specifications, and drawings and shall, without additional compensation, promptly remedy and correct any errors, omissions, or other deficiencies. The Professional shall indemnify, save and hold harmless the City, its officers and employees in accordance with Colorado law, from all damages whatsoever claimed by third parties against the City; and for the City's costs and reasonable attorneys fees, arising directly or indirectly out of the Professional's performance of any of the services furnished under this Agreement. The Professional shall maintain commercial general liability insurance in the amount of $500,000 combined single limits, and errors and omissions insurance in the amount of 6. Compensation. [Use this paragraph or Option 1 below.] In consideration of the services to be performed pursuant to this Agreement, the City agrees to pay Professional a fixed fee in the amount of ($ ) plus reimbursable direct costs. All such fees and costs shall not exceed ($ ). Monthly partial payments based upon the Professional's billings and PSA 10/97 33 itemized statements are permissible. The amounts of all such partial payments shall be based upon the Professional's City -verified progress in completing the services to be performed pursuant hereto and upon the City's approval of the Professional's actual reimbursable expenses. Final payment shall be made following acceptance of the work by the City. Upon final payment, all designs, plans, reports, specifications, drawings, and other services rendered by the Professional shall become the sole property of the City. 6. Compensation. [Option 1 ] In consideration of the services to be performed pursuant to this Agreement, the City agrees to pay Professional on a time and reimbursable direct cost basis according to the following schedule: Hourly billing rates: Reimbursable direct costs: with maximum compensation (for both Professional's time and reimbursable direct costs) not to exceed ($ ). Monthly partial payments based upon the Professional's billings and itemized statements of reimbursable direct costs are permissible. The amounts of all such partial payments shall be based upon the Professional's City -verified progress in completing the services to be performed pursuant hereto and upon the City's approval of the Professional's reimbursable direct costs. Final payment shall be made following acceptance of the work by the City. Upon final payment, all designs, plans, reports, specifications, drawings and other services rendered by the Professional shall become the sole property of the City. 7. City Representative. The City will designate, prior to commencement of work, its project representative who shall make, within the scope of his or her authority, all necessary and proper decisions with reference to the project. All requests for contract interpretations, change orders, and other clarification or instruction shall be directed to the City Representative. 8. Project Drawings. [Optional] Upon conclusion of the project and before final PSA 10/97 34 CITY OF FORT COLLINS REQUEST FOR PROPOSALS P-905 Audit Services TABLE OF CONTENTS INTRODUCTION A. General Information B. Term of Engagement C. Subcontracting II. NATURE OF SERVICES REQUIRED A. General B. Scope of Work to be Performed C. Auditing Standards to be Followed D. Reports to be Issued E. Special Considerations F. Working Paper Retention and Access to Working Papers III. DESCRIPTION OF THE CITY GOVERNMENT A. Contact Person B. Background Information C. Computer Systems D. Internal Audit Function E. Availability of Prior Audit Working Papers IV. TIME REQUIREMENTS A. Proposal Calendar B. Notification and Contract Dates C. Date Audit May Commence D. Schedule for the 2003 Fiscal Year Audit 1. Interim Work 2. Detail Audit Plan 3. Fieldwork 4. Reports E. Entrance Conferences, Progress Reporting and Exit Conferences F. Report Due Dates V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Accounting Division Assistance B. Electronic Data Processing (EDP) Assistance IV payment, the Professional shall provide the City with reproducible drawings of the project containing accurate information on the project as constructed. Drawings shall be of archival quality, prepared on stable mylar base material using a non -fading process to prove for long storage and high quality reproduction. 9. Monthly Report. Commencing thirty (30) days after the date of execution of this Agreement and every thirty (30) days thereafter, Professional is required to provide the City Representative with a written report of the status of the work with respect to the Scope of Services, Work Schedule, and other material information. Failure to provide any required monthly report may, at the option of the City, suspend the processing of any partial payment request. 10. Independent Contractor. The services to be performed by Professional are those of an independent contractor and not of an employee of the City of Fort Collins. The City shall not be responsible for withholding any portion of Professional's compensation hereunder for the payment of FICA, Workers' Compensation, other taxes or benefits or for any other purpose. 11. Personal Services. It is understood that the City enters into this Agreement based on the special abilities of the Professional and that this Agreement shall be considered as an agreement for personal services. Accordingly, the Professional shall neither assign any responsibilities nor delegate any duties arising under this Agreement without the prior written consent of the City. 12. Acceptance Not Waiver. The City's approval of drawings, designs, plans, specifications, reports, and incidental work or materials furnished hereunder shall not in any way relieve the Professional of responsibility for the quality or technical accuracy of the work. The City's approval or acceptance of, or payment for, any of the services shall not be construed to operate as a waiver of any rights or benefits provided to the City under this Agreement. 13. Default. Each and every term and condition hereof shall be deemed to be a material PSA 10/97 35 element of this Agreement. In the event either party should fail or refuse to perform according to the terms of this agreement, such parry may be declared in default. 14. Remedies. In the event a party has been declared in default, such defaulting party shall be allowed a period of ten (10) days within which to cure said default. In the event the default remains uncorrected, the party declaring default may elect to (a) terminate the Agreement and seek damages; (b) treat the Agreement as continuing and require specific performance; or (c) avail himself of any other remedy at law or equity. If the non -defaulting party commences legal or equitable actions against the defaulting party, the defaulting party shall be liable to the non -defaulting party for the non -defaulting parry's reasonable attorney fees and costs incurred because of the default. 15. Binding Effect. This writing, together with the exhibits hereto, constitutes the entire agreement between the parties and shall be binding upon said parties, their officers, employees, agents and assigns and shall inure to the benefit of the respective survivors, heirs, personal representatives, successors and assigns of said parties. 16. Law/Severability. The laws of the State of Colorado shall govern the construction, interpretation, execution and enforcement of this Agreement. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision of this Agreement. PSA 10/97 OR 17. Special Provisions. [Optional] Special provisions or conditions relating to the services to be performed pursuant to this Agreement are set forth in Exhibit "_", consisting of ( ) page[s], attached hereto and incorporated herein by this reference. THE CITY OF FORT COLLINS, COLORADO By: John F. Fischbach City Manager By: James B. O'Neill II, CPPO, FNIGP Director of Purchasing & Risk Management DATE: ATTEST: City Clerk APPROVED AS TO FORM: Assistant City Attorney [Insert Professional's name] or [Insert Partnership Name] or [Insert individual's name] Doing business as [insert name of business] By: Title: CORPORATE PRESIDENT OR VICE PRESIDENT Date: ATTEST: (Corporate Seal) Corporate Secretary PSA 10/97 37 EXHIBIT "C" CONFIDENTIALITY IN CONNECTION WITH SERVICES provided to the City of Fort Collins (the "City") pursuant to this Agreement (the "Agreement"), the Contractor hereby acknowledges that it has been informed that the City has established policies and procedures with regard to the handling of confidential information and other sensitive materials. In consideration of access to certain information, data and material (hereinafter individually and collectively, regardless of nature, referred to as "information") that are the property of and/or relate to the City or its customers or suppliers, which access is related to the performance of services that the Contractor has agreed to perform, the Contractor hereby acknowledges and agrees as follows: That information that has or will come into its possession or knowledge in connection with the performance of services for the City may be confidential and/or proprietary. The Contractor agrees to treat as confidential (a) all information that is owned by the City, or that relates to the business of the City, or that is used by the City in carrying on business, and (b) all information that is proprietary to a third party (including but not limited to customers and suppliers of the City). The Contractor shall not disclose any such information to any person not having a legitimate need -to -know for purposes authorized by the City. Further, the Contractor shall not use such information to obtain any economic or other benefit for itself, or any third party, except as specifically authorized by the City. The foregoing to the contrary notwithstanding, the Contractor understands that it shall have no obligation under this Agreement with respect to information and material that (a) becomes generally known to the public by publication or some means other than a breach of duty of this Agreement, or (b) is required by law, regulation or court order to be disclosed, provided that the request for such disclosure is proper and the disclosure does not exceed thatwhich is required. In the event of any disclosure under (b) above, the Contractor shall furnish a copy of this Agreement to anyone to whom it is required to make such disclosure and shall promptly advise the City in writing of each such disclosure. In the event that the Contractor ceases to perform services for the City, or the City so requests for any reason, the Contractor shall promptly return to the City any and all information described hereinabove, including all copies, notes and/or summaries (handwritten or mechanically produced) thereof, in its possession or control or as to which it otherwise has access. The Contractor understands and agrees that the City's remedies at law for a breach of the Contractor's obligations under this Confidentiality Agreement may be inadequate and that the City shall, in the event of any such breach, be entitled to seek equitable relief (including without limitation preliminary and permanent injunctive relief and specific performance) in addition to all other remedies provided hereunder or available at law. PSA 10/97 C. Work Area, Telephone, Photocopying & FAX Machines D. Statements, Schedules, and Working Papers to be Prepared by the Finance Department Staff E. Profile of Accounting Division Staff F. Report Preparation VI. PROPOSAL REQUIREMENTS A. General Requirements 1. Preproposal Conference and On -site Inspections 2. Inquiries 3. Submission of Proposals B. Technical Proposal 1. General Requirements 2. Independence 3. License to Practice in Colorado 4. Firm Qualifications and Experience 5. Partner, Supervisory and Staff Qualifications and Experience 6. Similar Engagements with Other Government Entities 7. Specific Audit Approach 8. Identification of Anticipated Potential Audit Problems 9. Bond Offerings 10. Arbitrage Rebate 11. Escrow Verification 12. Agreed Upon Services Relating to Cable Franchise C. Dollar Cost Bid 1. Total All -Inclusive Maximum Price 2. Rates by Partner, Specialist, Supervisory and Staff Level Times Hours Anticipated for Each 3. Rates for Other Professional Services 4. Manner of Payment VII. EVALUATION PROCEDURES A. Review of Proposals B. Evaluation Criteria 1. Mandatory Elements 2. Technical Quality 3. Price and Work Hours C. Firms to be Interviewed D. Background Check E. Oral Presentations F. Final Selection G. Right to Reject Proposals VA APPENDICES A. Format for Schedule of Professional Fees and Expenses to Support the Total All - Inclusive Maximum Price B. Format for Schedule of Professional Fees and Expenses for Additional Services Described in Appendix F C. Format for Schedule of Professional Fees and Expenses forAdditional Services Not Specified in Appendix F D. Prior Year's Audit Fees E. Scope of Services F. Additional Services G. Services Agreement Exhibit "C" Confidentiality Clause vi CITY OF FORT COLLINS REQUEST FOR PROPOSALS P-905 Audit Services INTRODUCTION A. General Information The CITY OF FORT COLLINS is requesting proposals from qualified firms of certified public accountants to audit its financial statements for the fiscal year ending December 31, 2003, with a renewal option, at the City's discretion, 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, the provisions of the federal Single Audit Act of 1984 and U.S. Office of Management and Budget (OMB) Circular A-133. Such audits shall also be in accordance with the State of Colorado Local Government Audit Law. The CITY OF FORT COLLINS will not reimburse responding firms for any expenses incurred in preparing proposals in response to this request. To be considered, fifteen copies of a proposal must be received by James B. O'Neill II, CPPO, FNIGP at 215 North Mason Street by 3:00 pm on October 24, 2003. The CITY OF FORT COLLINS reserves the right to reject any or all proposals submitted. Proprietary information needs to be identified and placed in separate section of your response. Proposals submitted will be evaluated by either City Council or an Audit Committee appointed by the City Council after an initial evaluation by a staff committee. During the evaluation process, the Audit Committee and the CITY OF FORT COLLINS reserve the right, where it may serve the CITY OF FORT COLLINS' best interest, to request additional information or clarifications from firms submitting proposals, or to allow corrections of errors or omissions. The CITY OF FORT COLLINS 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, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the CITY OF FORT COLLINS and the firm selected. Interviews for the top ranked firms will be held the evening of November 12, 2003. It is anticipated that the selection of a firm will be completed by November 18, 2003. Following the notification of the selected firm it is expected that a contract will be executed between both parties by November 25, 2003. 2 B. Term of Engagement A five-year contract is contemplated, subject to the annual review and recommendation of the Audit Committee, the satisfactory negotiation of terms, and the concurrence of the City Council. C. Subcontracting Firms submitting proposals are encouraged to consider subcontracting portions of the engagement to small audit firms or audit firms owned and controlled by socially and economically disadvantaged individuals. If this is to be done, that fact, and the name of the proposed subcontracting firms, must be clearly identified in the proposal. Following the award of the audit contract, no additional subcontracting will be allowed without the express prior written consent of the CITY OF FORT COLLINS. II. NATURE OF SERVICES REQUIRED A. General The CITY OF FORT COLLINS is soliciting the services of qualified firms of certified public accountants to audit its financial statements for the fiscal year ending December 31, 2003, with a renewal option, at the City's discretion, 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 OF FORT COLLINS desires the auditor to express an opinion on the fair presentation of its basic financial statements in conformity with generally accepted accounting principles. Such opinion shall be included in the City's Comprehensive Annual Financial Report (CAFR). The auditor is not required to audit any combining and individual nonmajor fund financial statements and schedules contained in the CAFR. However, the auditor is to provide an "in -relation -to" opinion on such financial statements and schedules based on the auditing procedures applied during the audit of the basic financial statements. The auditor is not required to audit the introductory or statistical sections of the CAFR. The auditor shall be responsible for performing certain limited procedures involving required supplementary information, including Management's Discussion and Analysis, required by the Governmental Accounting Standards Board as mandated by generally accepted auditing standards. The City issues a separate report to comply with the requirements of the Single Audit Act of 1984. Included in the Single Audit Report is the City's Schedule of Expenditures of Federal Awards. 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. 3 The City acts as agent for the Poudre Fire Authority ("Authority") in providing its accounting and other administrative services. This includes the preparation of the Authority's year-end financial statements. The auditor shall be responsible for issuing an opinion on the Authority's basic financial statements with "in -relation -to" coverage on any combining or individual nonmajor fund statements. The City acts as agent for the North Front Range Transportation and Air Quality Planning Council, hereinafter referred to as the North Front Range MPO, in providing some of its administrative services. The North Front Range MPO is an association of local governments formed to meet local needs and federal transportation and air quality planning requirements. The 2003 budget for the North Front Range MPO was $2.2 million. In 2002, the North Front Range MPO was reported as a discrete component unit of the City of Fort Collins. In 2003, it will be reported as a joint venture on the City's financial statements and will issue its own stand-alone financial statements. The preparation of the North Front Range MPO's year-end financial statements is the responsibility of their administrative personnel. The auditor shall be responsible for issuing an opinion on the North Front Range MPO's basic financial statements with "in -relation -to" coverage on any combining or individual nonmajor fund statements. In addition to the financial statements the North Front Range MPO will also issue a separate report to comply with the requirements of the Single Audit Act of 1984. In connection with, and as part of, the audit engagement, the City has determined specific inquiries, procedures, and reports to be completed by the auditor which extend beyond those required in a financial audit. Such procedures shall be performed as a part of each audit engagement and appropriate reports submitted to the City containing such information as is necessary to inform City Council and the Audit Committee about these matters. See Appendix E for specific procedures to be followed and reports to be provided. C. Auditing Standards To Be Followed To meet the requirements of this request for proposals, the audit shall be performed in accordance with generally accepting 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's Government Auditing Standards, the provisions of the Single Audit Act of 1984 and the provisions of U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments and Non -Profit Organizations. Such audits shall also be in accordance with the State of Colorado Local Government Audit Law. D. Reports to be Issued Following the completion of the audit of the financial statements, the auditor shall issue the following reports: Report on Basic Financial Statements 4