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9.b) Audit Services, Consider Whether to Issue Request for Proposals Meeting Date: 7/20/2010 Agenda item: � / � J City Council Agenda Report City of Scandia 14727 209th St. North Scandia, MN 55073 (651) 433-2274 Action Requested: Consider whether to authorize release of a request for proposals (RFP) for audit services for 2010, 2011 and 2012. Alternatively,the Council could decide to extend the agreement with the current auditor, LarsonAllen. Deadline/ Timeline: N/A Background: • LarsonAllen served as the city's auditor for the 2007, 2008 and 2009 fiscal years. The three-year agreement has ended, and the City will need to secure a new agreement with LarsonAllen or another qualified CPA firm for the 2010 audit. • LarsonAllen has submitted a proposal to continue to provide audit services, for the next five years. The cost quote for the 2010 audit is $22,000, the same as the cost of the 2009 audit. Increases in the succeeding years would be modest; the cost would be $22,500 for 2011 &2012, and $23,000 for 2013 & 2013. • If the Council wishes to obtain proposal from other firms, in order to have a new auditor on board in a timely manner for the 2010 audit, an RFP should be issued soon. A draft has been prepared based on the proposal issued in 2007, which was based on a model from GFOA and examples obtained from other cities. • Staff suggests that an RFP include services for the fiscal years 2010, 2011 and 2012 to avoid having to frequently seek new proposals. • If an RFP is issued,the proposed schedule is as follows: Issue RFP: August 1 Responses due: September 15 (4 p.m.) Review of proposals/interviews September/October Selection of firm by Council: October 19 or November 3 Recommendation: The Council should decide if an RFP should be issued for audit services. If you are satisfied with LarsonAllen's services and the proposed cost, you could choose to extend the agreement with them for one or more years. Page 1 of 2 07/13/10 Attachments/ • Letter dated July 13, 2010 from LarsonAllen Materials provided: • Draft Request for Proposals Contact(s): Prepared by: Anne Hurlburt, Administrator (audit rfp) Page 2 of 2 07/13/10 1 • - 11 • �1 � ,• � 11 �i 1 JUIy 13,2�1� Ms. Anne Hurlburt City Administrator City of Scandia 14727 209"'Street North Scandia, MN 55073 Dear Ms. Hurlburt: Thank you for the opportunity to continue serving as external auditors to the City of Scandia. I and the LarsonAllen service team have enjoyed working with you and everyone at the City of Scandia; and look forward to continuing that relationship. At LarsonAllen, our vision is not to be the largest firm, but to be the best. We achieve this by developing honest, sincere relationships with our clients; expressing our genuine interest in their respective industries; investing heavily in our personnel resources; and providing noticeably different client service. Engagement summary We propose to continue providing the following services: • Perform an audit of the financial statements of City of Scandia for the years ending December 31, 2010 through 2014 in accordance with auditing standards generally accepted in the United States of America (generally accepted auditing standards) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. . Provide a report on compliance and internal control over financial reporting as required by Government Auditing Standards. • Perform and audit of the City's compliance with the State of Minnesota Legal Compliance Manual. • Develop a management letter of our comments and recommendations regarding internal control, planning opportunities and other matters observed during the course of our engagements. • Presentation of audit results to the City Council. • Prepare the City Financial Reporting Form to be submitted to the State of Minnesota Office of the State Auditor • Serve as a resource to your staff and management throughout the year. The value of continuity LarsonAllen prides itself on having staff turnover rates at levels substantially less than industry averages. In the past three years, our nonprofit and government group's turnover rate was less than 10 percent. The accounting industry overall has a turnover rate of approximately 20 percent. Our low staff turnover benefits our clients because we are able to maintain continuity in staffing from year to year and from project to project. � LanaWlkn LLP Is a mcmbv of Ncxia lrm.mational, a warldwide ncawork d indepcndeM accourrong and co�tuhing firmt. INTERNATIOI3AL City of Scandia July 13,2010 Page 2 You'll see continuity in our service team, as follows: Team member Title Years of experience Years serving Scandia Craig Popenhagen, CPA Principal 16 2 Brady Hoffman, CPA Senior 5 3 : i We will add additional staff as necessary for the audit,once exact timing is determined. In the event that turnover happens with any of the people we have committed to serve you, we will provide professional summaries of suggested replacements to you and will discuss reassigned work assignments prior to finalizing. We want you to be comfortable with the assigned staff prior to the start of any work. Proposed fees Fee philosophy We operate under the philosophy of open and direct communication regarding billing. Our professional fees for the services described throughout our proposal are based on the level of expertise of the individuals who will perform the services. We require your assistance in providing the workpapers and supporting documents needed for the audit. Because we believe that a long-term relationship is important for your organization, we commit to this level of fees for the 2010—2014 services, assuming your operations do not change significantly. We believe in ongoing contact as a means of better serving you, and we encourage your questions throughout the year. We include this portion of our overall service to you in our fee quote. You will not be billed separately. Our fee quote for the proposed services is summarized below. Services 2010 2011 2012 2013 2014 City of Scandia j $22,000 � $22,500 � $22,500 ; $23,000 '` $23,000 Serve as a resource Included � Included � Included � Included i Included throughout the year. � i � i Out-of-pocket costs Included � Induded Included ' Inciuded ; Included Total � $22,000 � $22,500 � $22,500 i �23,000 � $23,000 � Based on our discussions with you, we do not anticipate that the City will need an A-133 compliance during the above proposed service period. Also, our proposed fees are not contingent upon extending our relationship for the full five years. Choose the extension range that best fits the City's needs—one year,three years,all five years,or other. City of Scandia July 13,2010 Page 3 Engagement timetable We are committed to meeting your specified timelines and deadlines. The following table outlines the key phases of the engagement and illustrates our tentative schedule to serve you: '. '. '�� '. � �� � ��..�� � ,��,{_ �.b e � ; Planning and Transition ���4= k��`�����,�u:�,y���� k � z�� � � � i Planning and emerging issues meetings. Share client � iassistance letter. j , �_— — ! Risk assessmenUengagement planning i _ ..._............................................_................._. ; Identify and resolve accounting issues and concerns ; I _ ' Develop overall audit approach � __..__ _..___l _______ _.___..-.- ----__.._.__._. ; Fieldwork&Reporting Activit�es . . # ��,, � • ,: _ _ _...,.,_. . ,...,. r..� . _ �� . ��. ' Review data processing activities and controls i .. ; Review detailed audit approach for critical issues ; �' . _. Perform analytical review procedures ; ! Perform year-end substantive procedures ; � i Hold audit exit conference,end of fieidwork I _.___ __._ � Meetings to review reports on financial statements, i i management letters,and other reports __ -_ _ _ , Final issuance and meeting with City Council � , __.._ _---- -- ---------- -------1 - —_ _ Please feel free to call if you have any questions. Sincerely, LarsonAllen LLP . �i// Craig W.Popenhagen Principal 612-397-3087 cpopenhagen@larsonallen.com � � � � l � � � � SC DIA REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES SEPTEMBER, 2010 City of Scandia 14727 209T" St. N. Scandia, Minnesota 55073 Anne Hurlburt, City Administrator Phone (651) 433-2274 Fax (651) 433-5112 a.hurlburt(a�ci.scandia.mn.us www.ci.scandia.mn.us CITY OF SCANDIA REQUEST FOR PROPOSALS TABLE OF CONTENTS I. GENERAL INFORMATION (Page 3) A. Term of Engagement B. Subcontracting II. NATURE OF SERVICES REQUIRED (Page 3) A. General B. Scope of Work to be Performed C. Auditing Standards to be Followed D. Reports to be Issued E. Working Paper Retention and Access to Working Papers III. DESCRIPTION OF GOVERNMENT (Page 5) A. Principal Contacts B. Background Information C. Pension Plans IV. TIME REQUIREMENTS (Page 6) A. Proposal Calendar B. Schedule for 2007 Fiscal Year Audit V. AUDIT RESPONStBILITIES (Page 6) A. City Staff Assistance B. Work Area and Equipment C. Report Preparation D. State Reporting VI. PROPOSAL REQUIREMENTS (Page 7) VII. TECHNICAL PROPOSAL (Page 7) A. General Requirements B. Independence C. License to Practice in Minnesota D. Firm Qualifications and Experience E. Partner, Supervisory and Staff Quatifications and Experience F. Similar Engagements with Other Government Entities G. Specific Audit Approach VIII. DOLLAR COST PROPOSAL (Page 9) A. Total All-Inclusive Maximum Price IX. EVALUATION PROCEDURES (Page 10) A. Review of Proposal B. Evaluation Criteria C. Oral Presentation D. Right to Reject Proposals APPENDICES (Page 12) A. Proposer Guarantees B. Fee Schedule City of Scandia,Request for Proposals 2 Professional Auditing Services,August 2010 CITY OF SCANDIA REQUEST FOR PROPOSAL I. GENERAL INFORMATION The City of Scandia is requesting proposals from qualified firms of certified public accountants to audit its financial statements for the fiscal years ending December 31, 2010, December 31, 2011, and December 31, 2012. These audits are to be performed in accordance with the generally accepted auditing standards and the standards for financial audits set forth in the U.S. General Accounting Office's (GAO) Government Auditing Standards (1988) and State Legal Compliance audit requirements. There is no expressed or implied obligation for the City of Scandia to reimburse responding forms for any expenses incurred in preparing proposals in response to this request. The City of Scandia 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 Scandia and the firm selected. A. Term of Engagement A three-year contract is contemplated, subject to the annual review by the Scandia City Council and the annual availability of an appropriation. B. Subcontracting No subcontracting will be allowed without the express prior written consent of the City of Scandia. II. NATURE OF SERVICES REQUIRED A. General The City of Scandia is soliciting the services of qualified firms of certified public accountants to audit its financial statements for the fiscal years ending December 31, 20010, December 31, 2011, and December 31, 2012. B. Scope of Work to be Performed The City of Scandia desires the auditor to express an opinion on the fair presentation of its general purpose financial statements in conformity with generally accepted accounting principles. The auditor shall also be responsible for performing procedures involving required supplementary information required by the Governmental Accounting Standards Board (GASB) as mandated by generally accepted auditing standards (GAAP). Assistance will be provided to the City for implementing GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets, effective 2010, and Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, effective 2011. City of Scandia,Request for Proposals 3 Professional Auditing Services,August 2010 C. Auditing Standards to be Followed To meet the requirements of this request for proposal, the audit shall be performed in accordance with generally accepted auditing standards as set forth by the American Institute of Certified Public Accountants, the standards for financial audits set forth in the US General Accounting Office's Government Auditing Standards (1994), the provisions of the Single Audit Act of 1996, the provisions of US Office of Management and Budget(OMB) Circular A-133, and the provisions of the MN Legal Compliance Audit Guide for Local Government(pursuant to MN Statute 6.65). D. Reports to be Issued Following the completion of the audit of the fiscal year's financial statements, the auditor shall issue the following reports: 1. A report consisting of the Annual Financial Statements and Supplemental Information. 2. Combined and individual fund statements. 3. A report on the fair presentation of the financial statements in conformity with generally accepted accounting principles. 4. A report on compliance and on internal control over financial reporting based on an audit of financial statements. 5. A report on compliance with applicable laws and regulations. 6. The reports on compliance shall include all instances of noncompliance. 7. Reportable conditions that are also material weaknesses shall be identified as such in the report. 8. Non-reportable conditions discovered by the auditors shall be reported in a separate Letter to Management which shall be referred to in the report(s) on internal controls. Auditors shall assure themselves that the City Administrator and City Council is informed of each of the following: a. The auditor's responsibility under generally accepted auditing standards b. Significant accounting policies c. ManagemenYs judgments and accounting estimates d. Significant audit adjustments e. Other information in documents containing audited financial statements f. Disagreements with management g. Management consultation with other accountants h. Major issues discussed with management prior to retention i. Difficulties encountered in performing the audit j. Legal compliance findings k. Significant deficiencies I. Control deficiencies m. Management recommendations n. Financial analysis o. Update of resolved (and unresolved) issues from prior years City of Scandia,Request for Proposals 4 Professional Auditing Services,August 2010 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 City Administrator and to the City Council. 9. , 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 Scandia of the need to extend the retention period. The auditor will be required to make working papers available, upon request, to the following parties or their designees: City of Scandia, State Auditor, US General Accounting Office (GAO), parties designated by the federal or state governments or by the City of Scandia as part of an audit quality review process. 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 GOVERNMENT A. Principal Contacts The auditor's principal contacts will be the City Administrator(Anne Hurlburt) and City Treasurer (Colleen Firkus)who will coordinate the assistance to be provided by the City of Scandia to the auditor. B. Background Information The City of Scandia is located in Washington County, Minnesota. The City is approximately 39 square miles in area. The most recent official population estimate is 4,195 (2009). Scandia was incorporated on January 1, 2007 from the former New Scandia Township. The city operates under Minnesota Statutes "Plan A"form of government. The City's governing body consists of a Mayor and four Council members, all elected at large. Council members serve overlapping terms of o�ce. The City consists of the following departments: Administration, Zoning/Building Inspections, Public Works, and Fire. The city contracts for police, engineering, legal and planning services, and for the operation of a community sewage system (201 Project) on Big Marine Lake (with Washington County.) The city currently has four full-time employees (Administrator/Clerk, Building/Code Enforcement Official/Public Works Supervisor, Lead Maintenance Worker and Maintenance Worker.) There are five regular part-time employees (Deputy Clerk, Treasurer, Office Assistant, Maintenance Worker and Recreation Program Coordinator.) Various seasonal and temporary employees supplement the staff from time-to-time. The Fire Department is primarily paid on call, with a small stipend paid to officers. The City's fiscal year is the calendar year. Banyon Data Systems software is used for all financial operations. An electronic copy of the most recent audit of the City(New Scandia Township, for the year ending 12/31/09) is available for download on the city's website (www.ci.scandia.mn.us.) City of Scandia,Request for Proposals 5 Professional Auditing Services,August 2010 C. Pension Plans The City of Scandia participates in the following pension plans: Public Employees Retirement Association of Minnesota Statewide Volunteer Firefighter Retirement Plan administered by PERA (effective January 1, 2011) The city's only post-retirement obligation as defined by GASB 45 is the state-directed health coverage retirement options under MN Statutes Chapter 471. IV. 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: August 1, 2010 Request for proposal issued September 15, 2010 Due date for proposals October 2010 Interviews with selected firms October 19 or November 3, 2010 City Council selection B. Schedule for the 2010 Fiscal Year Audit In December 2010 a preliminary meeting will be held to discuss any potential audit problems and the interim work to be performed and to develop a schedule for the audit process. The City of Scandia will have all records ready for audit and all management personnel available to meet with the firm's personnel in February of 2011. The auditor shall complete all field work by March 15, 2011, unless otherwise agreed upon by City Staff. The auditor shall have drafts of the audit report(s)and recommendations to management available for review April 15, 2011, unless otherwise agreed upon by City Staff. City staff will complete their review of the draft reports as expeditiously as possible. It is not expected that this process should exceed two weeks. During that period, the auditor should be available for any meetings that may be necessary to discuss the audit reports. Once all issues for discussion are resolved, the final signed report shall be delivered to the City of Scandia within ten working days, but not later than one week prior to the exit meeting with the City Council. The exit meeting with City Council will be held no later than the first Council meeting in May 2011. City staff and the audit firm may hold a final wrap-up meeting following the Council meeting. This should be held within 30 days following that meeting. A similar time schedule will be developed for audits of future fiscal years. V. AUDIT RESPONSIBILITIES A. City Staff Assistance City staff will be available during the audit to assist the firm by providing information, documentation and explanations. The preparation of confirmations is currently done by city City of Scandia,Request for Proposals 6 Professional Auditing Services,August 2010 staff. If the proposer wishes to handle confirmations, this should be included as an option with the firm's proposal. B. Work Area and Equipment The City of Scandia will provide the auditor with reasonable workspace, tables and chairs. The auditor will also be provided with access to a telephone, photocopier/scanner/FAX machine, and an internet connection. C. Report Preparation Report preparation and editing shatl be the responsibility of the auditor, including any visual presentations for the City Council. The City of Scandia will require an official copy of the final audit report as well as an electronic (i.e. PDF) copy. Ten paper copies shall be produced for the city's use. D. State Reporting The auditor shall complete all forms mandated to be sent to the state for reporting purposes. VI. PROPOSAL REQUIREMENTS The Proposer shall submit ten (10) originals and an electronic copy(emailed) of the completed proposal to: Anne Hurlburt, City Administrator City of Scandia 14727 209th Street N Scandia MN 55073 Email: a.hurlburt a(�.ci.Scandia.mn.us The proposal shall include: 1. Title Page--Title page showing the request for proposal subject; the firm's name, address, email, and telephone number of the contact person; and the date of the proposal. 2. Table of Contents 3. 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. 4. Detailed Proposal--The detailed proposal should follow the order set forth in Sections VII and VIII of this request for proposals. 5. Executed copies of Proposer Warranties (Appendix A). 6. Schedule of Proposed Fees for 2010, 2011 and 2012 audits (Appendix B). The City of Scandia reserves the right, where it may serve the city's best interest, to request additional information or clarifications from the proposers. At the discretion of the City, firms submitting proposals may be requested to make oral presentations as part of the evaluation process. City of Scandia,Request for Proposals 7 Professional Auditing Services,August 2010 VII. TECHNICAL PROPOSAL A. 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 Scandia in conformity with the requirements of this request for proposal. 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 proposal requirements. The Technical 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 proposal. While additional data may be presented, the following subjects, Item Nos. B through G must be included. They represent the criteria against which the proposal will be evaluated. B. Independence The firm should provide an affirmative statement that it is independent of the City of Scandia as defined by generally accepted auditing standards of the US General Accounting Office's Auditing Standards (1994). The firm should also list and describe the firm's professional relationships involving the City of Scandia or any of its agencies for the past five 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 Scandia written notice of any relevant professional relationships entered into during the period of this agreement. C. License to Practice in Minnesota An affirmative statement should be included that the firm and all assigned key professional staff are properly licensed to practice in Minnesota. D. 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 the 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, the number and nature of the staff to be so employed on a part-time basis, and the number and nature of the staff to be so employed on a temporary basis. The firm shall also provide information on the results of any federal or state desk reviews of its audits during the past three 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 years with state regulatory bodies or professional organizations. The firm should provide a list of government-related references that the City can contact. E. Partner, Supervisory and Staff Qualifications and Experience Identify the principal supervisory and management staff, including engagement partner, managers, other supervisors and specialists, who would be assigned to the engagement. Indicate whether each such person is licensed to practice as a certified public accountant in Minnesota. Provide information on the government auditing experience of each person and overall experience of each person. City of Scandia,Request for Proposals $ Professional Auditing Services,August 2010 Provide as much information as possible regarding the number, qualifications and experience of the specific staff to be assigned to this engagement. Indicate how the quality of the staff, over the term of the engagement, will be assured. 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. The City of Scandia must be notified in writing if consultants and firm specialists mentioned in response to this request for proposal would be changed. Notification shall be done prior to any such change. Other audit personnel may be changed at the discretion of the proposer provided that replacements have substantially the same or better qualifications or experience. F. Similar Engagements with Other Government Entities For the firm's office that will be assigned responsibility for the audit, list the most significant engagements (minimum of 3, maximum of 5) performed in the last three 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. For city engagements, indicate whether or not the Comprehensive Annual Financial Report received the GFOA Certificate of Achievement for the most recent audit. G. 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. The proposal should include sample formats for required reports. VIII. DOLLAR COST PROPOSAL A. Total All-Inclusive Maximum Price The dollar cost proposal 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 audit contract is to include telephone inquiries and other assistance related to the audit and future audits requiring a minimum amount of time. The City of Scandia 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: 1. Name of Firm 2. Certification that the person signing the proposal in entitled to represent the firm, empowered to submit the bid, and authorized to sign a contract with the City of Scandia 3. A total all-inclusive Maximum Price for the 2010, 2011 and 2012 engagements. City of Scandia,Request for Proposals 9 Professional Auditing Services,August 2010 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 B) that supports the total all-inclusive maximum price. Any out-of pocket expenses including those for firm personnel for its employees shall be included in the total all-inclusive maximum price submitted by the firm. If it should become necessary for the City of Scandia to request the auditor to render any additional services to either supplement the services requested in the RFP or to perform additional work as a result of the specific recommendation 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 the City of Scandia and the firm. Any such additional work agreed to between the City of Scandia and the firm shall be performed at the same rates set forth in the schedule of fees and expenses included in the dollar cost proposal. Progress payments may be made on the basis of hours of work completed during the course of the engagement incurred in accordance with the firm's dollar cost proposal. Interim billing shall cover a period of not less than a calendar month. Payment of final billing will be held pending delivery of the firm's final reports. Should the selected auditor not make any deadlines set forth in this proposal, payment shall also be held. Detail spreadsheets shall be made available that verify the billing for the period billed. An electronic copy would be preferred. Line items that should be shown on the spreadsheet include: service date and time, employee name, rate, time billed, amount billed, description of work performed, and any miscellaneous expenses associated with the audit. Spreadsheet should also include any hours or expenses that are part of the audit but not billed. IX. EVALUATION PROCEDURES A. Review of Proposal The City of Scandia reserves the right to retain all proposals submitted and use any idea in a proposal regardless of whether that proposal is selected. B. Evaluation Criteria Proposals will be evaluated using three sets of criteria. Firms meeting the mandatory criteria will have their proposals evaluated for both technical qualifications and price. The selection process will include, but not be limited to, the following criteria: 1. Mandatory Elements a) The audit firm is independent and licensed to practice in Minnesota. b) The firm has no conflict of interest with regard to any other work performed by the firm for the City of Scandia. c) The firm adheres to the instructions in this 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) Expertise and Experience City of Scandia,Request for Proposals 10 Professional Auditing Services,August 2010 1) The firm's past experience and performance on comparable government engagements. 2) 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. b) Audit Approach 1) Adequacy of proposed staffing plan for various segments of the engagement 2) Adequacy of sampling techniques 3) Adequacy of analytical procedures 3. Price-- Cost will be a factor in the selection of an audit firm. However, price will not be the sole determining factor in the selection process. C. Oral Presentation During the evaluation process, the City may, at its discretion, request one or all firms to make an oral presentation. Such presentation will provide firms with an opportunity to answer any questions the Finance Department may have on a firm's proposal. Not all firms may be asked to make such oral presentation. D. Right to Reject Proposals The City of Scandia reserves the right without prejudice to reject any or all 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 Scandia and the firm selected. City of Scandia,Request for Proposals 11 Professional Auditing Services,August 2010 � APPENDIX A CITY OF SCANDIA PROPOSER GUARANTEES Proposer warrants that it is willing and able to comply with State of Minnesota laws with respect to foreign (non-state of Minnesota) corporations. Proposer warrants that it is willing and able to obtain an errors and omissions insurance policy providing a prudent amount of coverage for the willful or negligent acts or omissions of any officers, employees or agents thereof. Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the prior written permission of the City of Scandia. The proposer certifies that it can and will provide and make available at a minimum, all services set forth in Section II, Nature of Services Required. Proposer warrants that all information provided in connection with this proposal is true and accurate. Signature of Official: Name (typed or printed): Title: Firm: Date: City of Scandia,Request for Proposals �2 Professional Auditing Services,August 2010 � APPENDIX B CITY OF SCANDIA SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 2010, 2011 AND 2012 FINANCIAL STATEMENTS 2010 2011 2012 Proposed Proposed Proposed Hourly Hourly Hourly Hours Rates Rates Rates Total Partners $ Mana ers $ Supervisory Staff $ Other Personnel S ecif $ Subtotal $ Other: Report Prep/ $ Processing Single Audit Cost (A- 133 $ Prepare Report of Fin Stmts & Su Info $ Process State- mandated Re orts $ Out-of-Pocket Ex enses $ Meals and Lod in $ Transportation/ Milea e $ Other S ecif $ Totals for Audit $ Option: Handle $ Confirmations Option: Audit Scandia Fire Relief $ Fund Total All-inclusive Price for Audit Services $ City of Scandia,Request for Proposals 13 Professional Auditing Services,August 2010