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HomeMy WebLinkAboutRFP - 7516 AUDIT SERVICES (3)RFP 7516 Auditing Services Page 1 of 35 REQUEST FOR PROPOSAL 7516 AUDITING SERVICES The City of Fort Collins is requesting proposals from qualified firms to provide auditing services of the City's financial records and policies. Proposals submission via email is preferred. Proposals shall be submitted in Microsoft Word or PDF format and e-mailed to: purchasing@fcgov.com. If electing to submit hard copy proposals instead, five (5) copies, 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), July 12, 2013 and referenced as Proposal No. 7516. If delivered, they are to be sent to 215 North Mason Street, 2 nd Floor, Fort Collins, Colorado 80524. If mailed, the address is P.O. Box 580, Fort Collins, 80522-0580. The City encourages all disadvantaged business enterprises to submit proposals in response to all requests for proposals and will not be discriminated against on the grounds of race, color, national origin for all proposals for negotiated agreements. Questions concerning the scope of the project should be directed to Project Manager, John Voss at (970) 221-6772 or jvoss@fcgov.com. Questions regarding bid submittal or process should be directed to Gerry Paul, Director of Purchasing Risk Management at (970) 221-6779 or gspaul@fcgov.com. A copy of the Proposal may be obtained as follows: 1. Download the Proposal/Bid from the BuySpeed Webpage, www.fcgov.com/eprocurement The City of Fort Collins is subject to public information laws, which permit access to most records and documents. Proprietary information in your response must be clearly identified and will be protected to the extent legally permissible. Proposals may not be marked ‘Proprietary’ in their entirety. Information considered proprietary is limited to material treated as confidential in the normal conduct of business, trade secrets, discount information, and individual product or service pricing. Summary price information may not be designated as proprietary as such information may be carried forward into other public documents. All provisions of any contract resulting from this request for proposal will be public information. 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, Financial Services Purchasing Division 215 N. Mason St. 2nd Floor PO Box 580 Fort Collins, CO 80522 970.221.6775 970.221.6707 fcgov.com/purchasing RFP 7516 Auditing Services Page 2 of 35 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, Gerry S. Paul Director of Purchasing & Risk Management RFP 7516 Auditing Services Page 3 of 35 REQUEST FOR PROPOSALS 7516 AUDITING SERVICES SECTION 1 – GENERAL SCOPE OF SERVICES A. Scope of Services to be Performed 1. The City of Fort Collins desires the auditor to express an opinion on the fair presentation of its governmental activities, its business-type activities, its aggregate discretely presented component units, each of its major funds, and its aggregate remaining fund information in conformity with generally accepted accounting principles. 2. The City of Fort Collins also desires the auditor to express an opinion on the fair presentation of its combining and individual fund financial statements and schedules in conformity with generally accepted accounting principles. The auditor is not required to audit the supporting schedules contained in the comprehensive annual financial report. However, the auditor is to provide an "in- relation-to" opinion on the supporting schedules based on the auditing procedures applied during the audit of the basic financial statements and the combining and individual fund financial statements and schedules. The auditor is not required to audit the introductory section of the report or the statistical section of the report. 3. The auditor shall also be responsible for performing certain limited procedures involving required supplementary information required by the Governmental Accounting Standards Board as mandated by generally accepted auditing standards. 4. 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. B. Auditing Standards To Be Followed 1. 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. Government Accountability Office's Government Auditing Standards (1994), the provisions of the Single Audit Act of 1984 (as amended in 1996) and the provisions of U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, Audits of State and Local Governments. C. Reports to be Issued Following the completion of the audit of the fiscal year's financial statements, the auditor shall issue: RFP 7516 Auditing Services Page 4 of 35 1. A report on the fair presentation of the financial statements in conformity with generally accepted accounting principles, including an opinion on the fair presentation of the supplementary schedule of expenditures of federal awards in relation to the audited financial statements. 2. A report on compliance and internal control over financial reporting based on an audit of the financial statements 3. A report on compliance and internal control over compliance applicable to each major federal program. In the required report[s] on compliance and internal controls, the auditor shall communicate any significant deficiency or material weakness found during the audit. A significant deficiency shall be defined as a control deficiency, or combination of control deficiencies, that adversely affects the entity’s ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity’s financial statements that is more than inconsequential will not be prevented or detected. A material weakness shall be defined as a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected. Significant deficiencies that are also material weaknesses shall be identified as such in the report. Control deficiencies discovered by the auditors that are neither significant deficiencies nor material weaknesses shall be reported in a separate letter to management, which shall be referred to in the report[s] on compliance and internal controls. A control deficiency shall be deemed to have occurred whenever the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. The report on compliance and internal controls shall include all material instances of noncompliance. All nonmaterial instances of noncompliance shall be reported in a separate management letter, which shall be referred to in the report on compliance and internal controls. 4. 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: Mayor and Council Members of the City of Fort Collins Council Finance Committee City Manager Chief Financial Officer Controller/Assistant Financial Officer 5. Reporting to the Council Finance Committee. Auditors shall assure themselves that the City of Fort Collins's Council Finance Committee is informed of each of the following: RFP 7516 Auditing Services Page 5 of 35 The auditor's responsibility under generally accepted auditing standards Significant accounting policies Management judgments and accounting estimates Significant audit adjustments Auditor’s judgments about the quality of the entity’s accounting principles Other information in documents containing audited financial statements Disagreements with management Management consultation with other accountants Major issues discussed with management prior to retention Difficulties encountered in performing the audit D. Special Considerations 1. The City of Fort Collins 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 not be required to provide special assistance to the City of Fort Collins to meet the requirements of that program. 2. 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 general purpose 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" as the auditor and any necessary "comfort letters." 3. The City of Fort Collins has determined that no specific United States Department functions as the cognizant agencies in accordance with the provisions of the Single Audit Act of 1984 (as amended in 1996) and U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. All federal awards and related expenditures are reported to the Federal Clearinghouse. 4. The Schedule of Expenditures of Federal Awards and related auditor's report, as well as the reports on compliance and internal controls are not to be included in the comprehensive annual financial report, but are to be issued separately. 5. A list of findings and other weaknesses from the City of Fort Collins's most recent financial statement audit, as well as a list of findings from internal audits conducted during the most recent fiscal period to be audited may be found at http://fcgov.com/finance/?departments. E. 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 RFP 7516 Auditing Services Page 6 of 35 make working papers available, upon request, to the following parties or their designees: 1. City of Fort Collins 2. U.S. Government Accountability Office (GAO) 3. Parties designated by the federal or state governments or by the City of Fort Collins as part of an audit quality review process 4. Auditors of entities of which the City of Fort Collins is a subrecipient of grant funds 5. Auditors of entities of which the City of Fort Collins is a component unit 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. F. Schedule for the 2013 Fiscal Year Audit (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). Each of the following should be completed by the dates indicated, unless otherwise approved by both the City and Auditor. 1. Interim Field Work The auditor shall complete interim work by November 15 th . 2. Detailed Audit Plan The Auditor shall provide the City at least 1 month before interim and final field work a detailed audit plan and a list of all schedules to be prepared by the City. 3. Fieldwork The auditor shall complete all fieldwork by May 15 th . 4. City Charter Requirement for Public Notification of Summary Financials In accordance with the City of Fort Collins Charter, Article II, Section 17, a summary of the independent audit of the City’s financial records needs to be published no later than May 31 st . In order to meet this deadline, staff request the auditors complete review of the summary by May 24 th . 5. City Prepared Reports Fund Financial Statements, Notes and Required Supplementary Information - The City shall have drafts ready for auditing on the first day of final field work. Financial Statements – The City shall complete the management’s discussion and analysis, government wide financial statements, fund financial statements, notes, required supplementary information and all elements of a Comprehensive Annual Financial Report by May 15 th . The Auditor shall provide all corrections, suggestions and comments to the City by June 1. RFP 7516 Auditing Services Page 7 of 35 6. Auditor Prepared Reports Opinion Letters, Single Audit Reports, and Management Letter - The auditor shall have drafts of the audit report[s] and recommendations to management available for review by the City by June 1 st . The City shall have all comments and suggestions on these items by June 8 th . The Auditor will print and deliver the final reports by June 15 th . Number of Auditor Reports – For the City of Fort Collins, the Auditor shall print 100 Opinion Letters, 25 Single Audit Reports, and 25 Management Letter Reports by June 15. For the Poudre River Public Library District and the Poudre Fire Authority, the Auditor shall print, for each, 25 Financial Statements, including Opinion Letter, and 25 Management Letter Reports by June 30. The auditor should deliver all reports to the Controller/Assistant Financial Officer at 215 North Mason Street, 2 nd Floor, Fort Collins, CO 80522-0580. 7. Presentation to Governing Bodies The auditor shall present the results of the audit and the management letter to the governing bodies of City of Fort Collins Council Finance and Audit Committee, the Poudre River Public Library District Board, and the Poudre Fire Authority Board by August 31. RFP 7516 Auditing Services Page 8 of 35 SECTION 2 – DESCRIPTION OF THE GOVERNMENT A. Name and Telephone Number of Contact Persons/Organizational Chart/Location of Offices 1. The auditor's principal contact with the City of Fort Collins will be Mike Beckstead, Chief Financial Officer, phone 970-221-6795. However, the designated representative will be John Voss, Controller/Assistant Financial Officer, phone 970-221-6772, who will coordinate the assistance to be provided by the City of Fort Collins to the auditor. 2. An organizational chart and a list of key personnel can be seen in the 2012 CAFR, pages 8-9. Link to the City’s website: http://www.fcgov.com/finance/annual-financial-reports.php B. Background Information 1. The City of Fort Collins serves an area of 51 square miles with a population of 151,000. The City of Fort Collins's fiscal year begins on January 1 and ends on December 31. 2. The City of Fort Collins provides the following services to its citizens:  general government  public safety  streets and highways  cultural opportunities and recreation  transportation  sustainability  planning and development  electric distribution  water treatment and distribution  wastewater collection and treatment  storm drainage  golf 3. The City of Fort Collins has a total payroll of $140 million covering 1,863 FTE employees. $ In millions Entity with Unique Tax ID Gross Pay Benefits Total Payroll FTE City $ 89.7 $ 25.1 $ 114.8 1,522 Downtown Development Authority 0.4 0.1 0.5 5 Poudre Fire Authority 16.4 3.6 20.0 242 Library District 3.8 1.1 4.9 94 TOTAL $ 110.3 $ 29.9 $ 140.2 1,863 RFP 7516 Auditing Services Page 9 of 35 4. The City is organized into 9 service areas and 3 agencies. The accounting and financial reporting functions of the City of Fort Collins are generally centralized with the most significant exception of dedicated personnel in Utilities. 5. More detailed information on the government and its finances can be found in the Budget Document, CAFR’s, and Single Audit Report. See website - http://www.fcgov.com/finance/ C. Fund Structure The City of Fort Collins uses the following fund types in its financial reporting: Individual Fund Type Number of Legally Adopted Funds Number with Annual Budgets General fund 1 1 Special revenue funds 17 17 Debt service funds 2 2 Capital projects funds 3 0 Permanent funds 0 0 Enterprise funds 5 5 Internal service funds 5 5 Private-purpose trust funds 0 0 Investment trust funds 0 0 Pension (and other employee benefits) trust funds 1 1 Agency funds 2 0 D. Basis of Budgeting The City of Fort Collins does not always prepare its budgets on a basis consistent with generally accepted accounting principles. Proprietary funds are budgeted on current financial resources basis. In some of the governmental funds, grants and capital projects are budgeted on a project length basis, rather than annual budgets. E. Federal and State Awards Refer to 2012 single audit report, which is typical in its volume and complexity. F. Pension Plans The City of Fort Collins participates in the following pension plans: Plan Multiple Employer Cost Sharing Agent Single Employer Defined Benefit Contribution General Employees Retirement Program (GERP) X RFP 7516 Auditing Services Page 10 of 35 Money Purchase Plan (401a) X Actuarial services for the GERP plan are provided by Milliman. The defined contribution plan is administered by ICMA-RC. G. Component Units 1. The City of Fort Collins is defined, for financial reporting purposes, in conformity with the Governmental Accounting Standards Board's Codification of Governmental Accounting and Financial Reporting Standards, Section 2100. Using these criteria, component units are included in the City of Fort Collins's financial statements. 2. The management of the City of Fort Collins identified the following component units for inclusion in the City of Fort Collins's financial statements: a) Fort Collins Colorado Downtown Development Authority. The purpose of the DDA is to promote the public health, safety, prosperity, security, and welfare of its inhabitants. Fiscal year ends December 31. Information for DDA Kathy Cardona 19 Old Square, Suite 230 Fort Collins, CO 80524 970-419-4371 (Primary records are located at City Finance Department, 215 N. Mason) This component unit is to be audited as part of the audit of the City of Fort Collins's financial statements. b) Fort Collins Urban Renewal District. This is a blended component unit that is presented in the City’s CAFR as another fund. c) General Improvement District #1. This is a blended component unit that is presented in the City’s CAFR as another fund. d) General Improvement District #15 – Skyview. This is a blended component unit that is presented in the City’s CAFR as another fund. 3. The management of the City of Fort Collins has determined that the following potential component units should not be included in the City of Fort Collins's financial statements for the following reasons: Potential Component Unit Reason for Exclusion Poudre Fire Authority Joint Venture Poudre River Public Library District Completely separate board, we don’t contribute financially, different boundaries RFP 7516 Auditing Services Page 11 of 35 H. Joint Ventures The City of Fort Collins does participate in joint ventures with other governments. NAME OF JOINT VENTURE NAME OF OTHER PARTICIPATING GOVERNMENT(S) TYPE OF SERVICES PROVIDED Fort Collins- Loveland Airport City and City of Loveland Airport Operations North Front Range Transportation & Air Quality 10 Northern CO Cities & Towns& Larimer & Weld Counties Transportation & Air Quality Planning Poudre Fire Authority City & Poudre Valley Fire Prot. Fire Protection Dist. Platte River Power Authority Cities of Fort Collins, Longmont, Loveland & Estes Park Wholesale Power Supply I. Magnitude of Finance Operations Financial services area has 43 people and is headed by Mike Beckstead, Chief Financial Officer for the City. There are 4 departments in Financial Services: Finance Administration, Budget, Purchasing & Risk Management, and Accounting/ Sales Tax/Treasury. The Accounting/Sales Tax/Treasury Department is headed by John Voss, Controller/Assistant Financial Officer. Other Services Areas have positions performing financial work and have dotted line accountability to Financial Services. J. Computer Systems 1. JDE Production Database Server HP ProLiant BL460c G7 2 Six Core Processors 48 GB RAM Operating System: Windows Server 2008 R2 (64 bit) Applications: Oracle DBMS 11.2.0.3 2. JDE Production Web Server HP ProLiant BL460c G7 2 Quad Core Processors 8 GB RAM Operating System: Windows Server 2008 (64 bit) Applications: Oracle WebLogic Server 3. JDE Production Batch Server HP ProLiant BL460c G7 2 Six Core Processors 48 GB RAM RFP 7516 Auditing Services Page 12 of 35 Operating System: Windows Server 2008 R2 (64 bit) Applications: Oracle/JD Edwards Software 4. JDE Software Version Oracle JD Edwards EnterpriseOne 9.0, Tools Release 8.98.4.2 Upgrading to Oracle JD Edwards EnterpriseOne 9.1, Tools Release 9.1.3 in July 2013 5. JD Edwards EnterpriseOne Modules (go live date) Financials, A/P, Purchasing, Budget, Job Costing, (1/1999) Accounts Receivable (12/1999) Human Resources/Payroll (1/2000) Fixed Assets (8/2001) Enterprise Asset Management (12/2003) Self Service Benefits Enrollment (10/2004) Employee and Manager Self Service (10/2006) Crystal Reports for JD Edwards (8/2007) L. Availability of Prior Audit Reports and Working Papers Interested proposers who wish to review prior years' audit reports and management letters should contact Kevin Smith at 4801 Main Street, Suite 400, Kansas City, MO 64112-2543, phone 816-751-4027. The City of Fort Collins will use its best efforts to make prior audit reports and supporting working papers available to proposers to aid their response to this request for proposals. M. Organizational Chart and listing of Key Officials may be found in the CAFR http://fcgov.com/finance/?departments RFP 7516 Auditing Services Page 13 of 35 SECTION 3 - TIME REQUIREMENTS A. Proposal Calendar The following is a list of key dates up to and including the date proposals are due to be submitted: Last day to submit bid questions July 5, 2013 Due date for proposals July 12, 2013 3:00 PM (Mtn) B. Notification and Contract Dates (estimated subject to change) Interviews of finalists August 6, 2013 Selected firm notified August 9, 2013 Contract date September 20, 2013 C. Date Audit May Commence The City of Fort Collins will have all records ready for audit and all management personnel available to meet with the firm's personnel as of October 1, 2013. D. Schedule for the 2013 Fiscal Year Audit (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). Each of the following should be completed by the auditor no later than the dates indicated. 1. Interim Work The auditor shall complete interim work by December 15 th . 2. Detailed Audit Plan The auditor shall provide City of Fort Collins by December 31 st both a detailed audit plan and a list of all schedules to be prepared by the City of Fort Collins. 3. Fieldwork The auditor shall complete all fieldwork by May 15 th . 4. City Charter Requirement for Public Notification of Summary Financials In accordance with the City of Fort Collins Charter, Article II, Section 17, a summary of the independent audit of the City’s financial records needs to be published no later than May 31 st . In order to meet this deadline, staff request the auditors complete review of the summary by May 24 th . 5. Draft Reports The auditor shall have drafts of the audit report[s] and recommendations to management available for review by the Chief Financial Officer and Controller/ Assistant Financial Offer by June 1 st . RFP 7516 Auditing Services Page 14 of 35 F. Date Opinion Letter and Single Audit Report is Due The City staff shall prepare draft financial statements, notes and all required supplementary schedules by May 1 st . The auditor shall provide a draft of all recommendations, revisions and suggestions for improvement to the Chief Fiscal Officer and Controller/Assistant Financial Officer by June 1 st . The final signed opinion letter should be provided electronically for inclusion in the CAFR no later than June 15 th . RFP 7516 Auditing Services Page 15 of 35 SECTION 4 - ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department and Clerical 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 on Auditor approved forms. B. Electronic Data Processing (EDP) Assistance The Enterprise Resource Planning (ERP) personnel will be available to assist the auditor in performing the engagement during normal working hours, with reasonable advanced notice. ERP personnel will also be available to provide systems documentation and explanations. The auditor will be provided reasonable computer time and the use of the City of Fort Collins's computer hardware and software. This will be limited to inquiry and review of accounting records. C. Statements and Schedules to be Prepared by the Staff of the City of Fort Collins The staff of City of Fort Collins will prepare the following statements and schedules for the auditor by the dates indicated: Statement or Schedule Date Fund statements April 15 Notes April 22 MD&A May 1 Government Wide May 1 Statistical, Intro Section May 7 E. 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 lines, photocopying facilities and FAX machines. F. Report Preparation Report preparation, editing and printing shall be the responsibility of the auditor. RFP 7516 Auditing Services Page 16 of 35 SECTION 5 - PROPOSAL REQUIREMENTS A. General Requirements 1. Submission of Proposals The following material is required to be received by July 12, 2013 by 3:00 PM for a proposing firm to be considered: 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 proposer'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 engagement and a statement that the proposal is a firm and irrevocable offer for 60 days. iv. Detailed Proposal The detailed proposal should follow the order set forth in Section 5 B and C of this request for proposals. v. Executed copies of Proposer Guarantees and Proposer Warranties, attached to this request for proposal (Appendix B and Appendix C) B. Technical Proposal 1. 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 of 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 their form 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. THERE SHOULD BE NO DOLLAR UNITS OR TOTAL COSTS INCLUDED IN THE TECHNICAL PROPOSAL DOCUMENT. The Technical Proposal should address all the points outlined in the request for proposals (excluding any cost information which should only be included in the sealed dollar cost bid). The Proposal should be prepared simply and economically, providing a straightforward, concise description of the proposer's capabilities to satisfy the requirements of the request for proposals. While additional data may be presented, the following subjects, items Nos. 2 through RFP 7516 Auditing Services Page 17 of 35 10, must be included. They represent the criteria against which the proposal will be evaluated. 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. Government Accountability Office's Government Auditing Standards (1994)] 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. The City of Fort Collins currently has one component unit, the Fort Collins Downtown Development Authority, whose budget and any issuance of debt requires approval of the Fort Collins’ City Council. 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 component units or joint venture members 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 this agreement. 3. License to Practice in the State of Colorado An affirmative statement should be included that the firm and all assigned key professional staff are properly licensed to practice in the State of Colorado. 4. Firm Qualifications and Experience The proposer 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 proposer 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. 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. RFP 7516 Auditing Services Page 18 of 35 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 the State of 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. The proposer should identify the extent to which staff to be assigned to the audit reflect the City of Fort Collins's commitment to Affirmative Action. 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. Prior Engagements with the City of Fort Collins List separately all engagements within the last five years, ranked on the basis of total staff hours, for the City of Fort Collins by type of engagement (i.e., management advisory services, other). Indicate the scope of work, date, engagement partners, total hours, the location of the firm's office from which the engagement was performed, and the name and telephone number of the principal client contact. 7. 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 proposal. These engagements should be ranked on the basis of total staff hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact. RFP 7516 Auditing Services Page 19 of 35 8. 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. In developing the work plan, reference should be made to such sources of information as City of Fort Collins's budget and related materials, organizational charts, manuals and programs, and financial and other management information systems. Proposers will be required to provide the following information on their audit approach: a. Proposed segmentation of the engagement 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 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's internal control structure g. Approach to be taken in determining laws and regulations that will be subject to audit test work h. Approach to be taken in drawing audit samples for purposes of tests of compliance 9. Identification of Anticipated Potential Audit Problems The proposal should identify and describe any anticipated potential audit problems, the firm's approach to resolving these problem and any special assistance that will be requested from the City of Fort Collins. 10. Report Format The proposal should include sample formats for required reports. C. Dollar Cost Proposal 1. Total All-Inclusive Maximum Price The sealed 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 proposal. Such costs should not be included in the proposal. The first page of the dollar cost proposal should include the following information: RFP 7516 Auditing Services Page 20 of 35 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 2013 engagement and subsequent 4 years (Fill-out Appendix A). 2. Rates by Partner, Specialist, Supervisory and Staff Level Times Hours Anticipated for Each The second page of the dollar cost proposal 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. The cost of special services described in Section I E of this request for proposal should be disclosed as separate components of the total all-inclusive maximum price. 3. Out-of-pocket Expenses Included in the Total All-inclusive Maximum Price and Reimbursement Rates Out-of-pocket expenses for firm personnel (e.g., travel, lodging and subsistence) will be reimbursed at the rates used by the City of Fort Collins for its employees. All estimated out-of-pocket expenses to be reimbursed should be presented on the second page of the sealed dollar cost bid in the format provided in the attachment (Appendix A). All expense reimbursements will be charged against the total all-inclusive maximum price submitted by the firm. In addition, a statement must be included in the sealed dollar cost bid stating the firm will accept reimbursement for travel, lodging and subsistence at the prevailing City of Fort Collins rates for its employees. 4. Rates for Additional Professional Services If it should become necessary for City of Fort Collins to request the auditor to render any additional services to either supplement the services requested in this RFP or to perform additional work as a result of the specific recommendations included in any report issued on this engagement, then such additional 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 same rates set forth in the schedule of fees and expenses included in the sealed dollar cost bid. 5. 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 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. RFP 7516 Auditing Services Page 21 of 35 SECTION 6 – PROPOSAL REVIEW AND ASSESSMENT A. Review and Assessment Professional firms will be evaluated on the following criteria. These criteria will be the basis for review of the written proposals and optional interview session. At discretion of the City, interviews of top rated firms may be held. The rating scale shall be from 1 to 5, with 1 being a poor rating, 3 being an average rating, and 5 being an outstanding rating. WEIGHTING FACTOR QUALIFICATION STANDARD 2.0 Scope of Proposal Does the proposal show an understanding of the project objective, methodology to be used and results that are desired from the project? 2.0 Assigned Personnel & Collaborative Relationship Do the persons who will be working on the project have the necessary skills? Does the firm work well in a collaborative team environment? 1.0 Availability Can the work be completed in the necessary time? Can the target start and completion dates be met? Are other qualified personnel available to assist in meeting the project schedule if required? Is the project team available to attend meetings as required by the Scope of Work? 1.0 Motivation Is the firm interested and are they capable of doing the work in the required time frame? 2.0 Cost and Work Hours Do the proposed cost and work hours compare favorably with the project Manager's estimate? Are the work hours presented reasonable for the effort required in each project task or phase? 2.0 Firm Capability Does the firm have the support capabilities the assigned personnel require? Has the firm done previous projects of this type and scope? RFP 7516 Auditing Services Page 22 of 35 B. Reference Evaluation (Top Rated Firm) The project Manager will check references using the following criteria. The evaluation rankings will be labeled Satisfactory/Unsatisfactory. QUALIFICATION STANDARD Overall Performance Would you hire this Professional again? Did they show the skills required by this project? Timetable Was the original Scope of Work completed within the specified time? Were interim deadlines met in a timely manner? Completeness Was the Professional responsive to client needs; did the Professional anticipate problems? Were problems solved quickly and effectively? Budget Was the original Scope of Work completed within the project budget? Job Knowledge a) If a study, did it meet the Scope of Work? b) If Professional administered a construction contract, was the project functional upon completion and did it operate properly? Were problems corrected quickly and effectively? RFP 7516 Auditing Services Page 23 of 35 SECTION 7 – SAMPLE PROFESSIONAL SERVICES AGREEMENT 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 , hereinafter referred to as "Professional". WITNESSETH: 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 ( ) pages, 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 ( ) pages, and incorporated herein by this reference. 3. Contract Period. This Agreement shall commence , 200 , and shall continue in full force and effect until , 200 , 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 four (4) additional one year periods. Renewals and pricing changes shall be negotiated by and agreed to by both parties. The Denver Boulder Greeley CPIU published by the Colorado State Planning and Budget Office will be used as a guide. Written notice of renewal shall be provided to the Professional 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 RFP 7516 Auditing Services Page 24 of 35 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. All notices provided under this Agreement shall be effective when mailed, postage prepaid and sent to the following addresses: Professional: Attn: City: City of Fort Collins Attn: PO Box 580 Fort Collins, CO 80522 With Copy to: City of Fort Collins Attn: Purchasing Dept. PO Box 580 Fort Collins, CO 80522 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, Project 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 attorney’s fees, arising directly or indirectly out of the Professional's negligent 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 $1,000,000. 6. Compensation. [Use this paragraph or Option 1 below.] In consideration of the services to be performed pursuant to this Agreement, the City agrees to pay Professional a fixed fee in the amount of ($ ) plus reimbursable direct costs. All such fees and RFP 7516 Auditing Services Page 25 of 35 costs shall not exceed ($ ). Monthly partial payments based upon the Professional's billings and 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. [Optional] Insert Subcontractor Clause 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 RFP 7516 Auditing Services Page 26 of 35 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 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, prepared on stable Mylar base material using a non-fading process to provide for long storage and high quality reproduction. "CD" disc of the as-built drawings shall also be submitted to the City in an AutoCAD version no older then the established city standard. 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 RFP 7516 Auditing Services Page 27 of 35 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 element of this Agreement. In the event either party should fail or refuse to perform according to the terms of this agreement, such party 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 party'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. RFP 7516 Auditing Services Page 28 of 35 17. Prohibition Against Employing Illegal Aliens. Pursuant to Section 8-17.5-101, C.R.S., et. seq., Professional represents and agrees that: a. As of the date of this Agreement: 1. Professional does not knowingly employ or contract with an illegal alien who will perform work under this Agreement; and 2. Professional will participate in either the e-Verify program created in Public Law 208, 104th Congress, as amended, and expanded in Public Law 156, 108th Congress, as amended, administered by the United States Department of Homeland Security (the “e-Verify Program”) or the Department Program (the “Department Program”), an employment verification program established pursuant to Section 8-17.5-102(5)(c) C.R.S. in order to confirm the employment eligibility of all newly hired employees to perform work under this Agreement. b. Professional shall not knowingly employ or contract with an illegal alien to perform work under this Agreement or knowingly enter into a contract with a subcontractor that knowingly employs or contracts with an illegal alien to perform work under this Agreement. c. Professional is prohibited from using the e-Verify Program or Department Program procedures to undertake pre-employment screening of job applicants while this Agreement is being performed. d. If Professional obtains actual knowledge that a subcontractor performing work under this Agreement knowingly employs or contracts with an illegal alien, Professional shall: RFP 7516 Auditing Services Page 29 of 35 1. Notify such subcontractor and the City within three days that Professional has actual knowledge that the subcontractor is employing or contracting with an illegal alien; and 2. Terminate the subcontract with the subcontractor if within three days of receiving the notice required pursuant to this section the subcontractor does not cease employing or contracting with the illegal alien; except that Professional shall not terminate the contract with the subcontractor if during such three days the subcontractor provides information to establish that the subcontractor has not knowingly employed or contracted with an illegal alien. e. Professional shall comply with any reasonable request by the Colorado Department of Labor and Employment (the “Department”) made in the course of an investigation that the Department undertakes or is undertaking pursuant to the authority established in Subsection 8-17.5-102 (5), C.R.S. f. If Professional violates any provision of this Agreement pertaining to the duties imposed by Subsection 8-17.5-102, C.R.S. the City may terminate this Agreement. If this Agreement is so terminated, Professional shall be liable for actual and consequential damages to the City arising out of Professional’s violation of Subsection 8-17.5-102, C.R.S. g. The City will notify the Office of the Secretary of State if Professional violates this provision of this Agreement and the City terminates the Agreement for such breach. 19. 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 ( ) pages, attached hereto and incorporated herein by this reference. RFP 7516 Auditing Services Page 30 of 35 THE CITY OF FORT COLLINS, COLORADO By: _________________________________ Gerry S. Paul 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] OR By: __________________________________ Title: _______________________________ CORPORATE PRESIDENT OR VICE PRESIDENT Date: _______________________________ ATTEST: _________________________________ (Corporate Seal) Corporate Secretary RFP 7516 Auditing Services Page 31 of 35 EXHIBIT 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 employees, 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 that which 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. RFP 7516 Auditing Services Page 32 of 35 APPENDIX A SCHEDULE OF PROFESSIONAL FEES & EXPENSES FOR ADDITIONAL SERVICES NATURE OF SERVICE TO BE PROVIDED MAXIMUM ALL-INCLUSIVE TOTAL PRICE 2013 Audits of City, Poudre Fire Authority and Library District $ 2014 Audits of City, Poudre Fire Authority and Library District $ 2015 Audits of City, Poudre Fire Authority and Library District $ 2016 Audits of City, Poudre Fire Authority and Library District $ 2017 Audits of City, Poudre Fire Authority and Library District $ 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 $ Of the Total all-inclusive maximum price for the 2013 audit, please estimate the expected costs for the services related to the Library District and the Poudre Fire Authority: Library District $ Poudre Fire Authority $ Proposer: Signature: Printed: Address: City/State/Zip: Phone: Email: RFP 7516 Auditing Services Page 33 of 35 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES This schedule should reflect the hourly rates for any additional work outside the scope of this RFP if the City requests it. STANDARD HOURLY RATES QUOTED HOURLY RATES Partners $ $ Managers $ $ Supervisory Staff $ $ Staff $ $ Other (specify): $ $ $ $ $ $ $ $ ADDITIONAL COSTS Out-of-pocket expenses: $ Meals and lodging (amount per person per day) $ Transportation (cents-per-mile) $ Other (specify): $ $ $ $ RFP 7516 Auditing Services Page 34 of 35 APPENDIX B PROPOSER GUARANTEES The Proposer certifies it can and will provide and make available all services set forth in Scope of Work and Time Requirements. Signature of Official: Printed: Title: Date: LIST OF PRINCIPALS The names and titles of the Proposer’s principals are: 1. 2. 3. 4. 5. Proposer: Address: City/State/Zip: Phone: Email: RFP 7516 Auditing Services Page 35 of 35 APPENDIX C PROPOSER WARRANTIES A. Proposer warrants that it is willing and able to comply with State of Colorado laws with respect to foreign (non-state of Colorado) corporations. B. Proposer warrants, that if it is awarded the contract it shall obtain and maintain during the Agreement term the following insurance coverage’s with policy limits in accordance with NORA specifications: 1. Errors and omissions coverage for the willful or negligent acts, or omissions of any officers, employees or agents thereof; 2. Professional liability coverage; 3. Comprehensive general liability coverage; 4. Automobile liability coverage, including hired and non-owned vehicles; and 5. Workers’ compensation. Waiver of subrogation and hold harmless agreements will be agreed to for all of the above coverage. The City shall be named an additional insured for all insurance coverage. C. Proposer warrants that it will not delegate or subcontract its responsibilities under the contract without the prior written permission of the City of Fort Collins. D. Proposer warrants that all information provided by it in connection with this proposal is true and accurate. Signature of Official: Name: (Print or type) Title: Firm: Date: