Addendum No. 1 RFP # Annual Independent Audit Services

Transcription

1 Addendum. 1 RFP # Annual Independent Audit Services Prospective Respondents: You are hereby notified of the following information in regard to the referenced RFP: QUESTIONS AND ANSWERS Following are the answers to questions submitted in response to the above referenced RFP as of January 12, All of the questions have been listed verbatim, as received by the Pennsylvania Turnpike Commission. s 1. N/A N/A N/A Why is the Commission soliciting audit requests for proposals? 2. N/A N/A N/A How many years has Zelenkofske Axelrod LLC done the Commission s audit? 3. N/A N/A N/A Is a site visit allowed? The agreement with our current auditor has expired. 6 years Page 1 of 9

2 s V-2 Nature and Scope of the Project The RFP states that the auditor will be responsible for the final word processing of the CAFR. Can you elaborate on what that mean? Is the CAFR given to the auditor in an electronic format that we can use as our starting point? 5. N/A N/A N/A Did the auditors propose any adjusting entries in the prior year? If so how many? 6. N/A N/A N/A Does the Commission anticipate early implementing GASBs 74 and 75? 7. N/A N/A N/A Have there been any disagreements with the current auditors regarding accounting treatment, journal entries, findings or other matters? 8. N/A N/A N/A How many auditors were on site for your 2016 audit and how much time did they spend on site? The Commission will provide a draft Word document (version 2010) of the entire CAFR. Although a final decision has not been made, the Commission anticipates early implementing of GASB Statement 75. The Commission does not plan to early implement GASB 74. Approximately 1 Senior, 1 Staff full time mid-july through end of August; 2 nd staff about half of time; Manager at least once a week; OPEB work was mostly off-site. Page 2 of 9

3 s 9. N/A N/A N/A What were the fees for the FY 2016 audit? 10. N/A N/A N/A Have the current auditors ever billed over their fixed fee and if so what was the reason? 11. N/A N/A N/A Have the prior auditors provided any additional services outside the original audit contract? 12. N/A N/A N/A What are the normal work hours of the Commission and can the auditors stay later than the normal work hours? 13. N/A N/A N/A How many employees are in your accounting department? How many are CPAs? 14. N/A N/A N/A Has there been any turnover in key management positions during the year? $160,465 SERS attestation The Commission will provide building access cards to the primary audit team members allowing them more flexibility. The Commissions Administration building s primary hours are 8am to 5pm. Currently the Commission has 17 fulltime employees and two temporary employees working in the Accounting and Financial Reporting Department. Two members of our full-time staff are CPAs. Page 3 of 9

4 s 15. N/A N/A N/A Are you aware of any fraud or suspicious of any fraud during the May 31, 2017 fiscal year end? 16. N/A N/A N/A What actuary does the Commission use for the OPEB plan? 17. N/A N/A N/A Does the Commission use any outside service organizations for processing transactions? If so what is the name of the service organization and what transactions do they process? 18. N/A N/A N/A How many exit conferences are required? 19. N/A N/A N/A Has the Commission fully adopted the Green Book? Milliman 1) Collections The Commission is using Professional Account Management (Duncan Solutions) for new accounts/receivables. However, there are still accounts in collections with our prior collection agencies (Penn Credit and Linebarger); 2) E-ZPass Transactions TransCore; 3) Employee benefits Highmark, Aetna, United Concordia, Davis Vision; 4) Workers Comp UPMC; 5) OPEB PNC; 6) Liability PMA Companies, Inc. One Page 4 of 9

5 s 20. N/A N/A N/A Does the internal audit department provide any assistance to the auditors? 21. N/A N/A N/A What does inventory consist of and is a physical count done annually? 22. What were the prior year audit fees per deliverable (F/S and OPEB F/S)? 23. How many hours did the most recent audits take to complete? 24. Did any events occur that would make the current year audit significantly different from the prior year? Yes. The Internal Audit department performs audits in the following areas: Cash Disbursements, Investments, Related Parties, Indenture Compliance, Payroll and Unrecorded Liabilities. Audits are also performed throughout the year. Inventory consists of various items used by mechanics for vehicle repairs and maintenance, and also supplies necessary for the Maintenance and Fare Collection Departments to perform their daily activities. Inventory cycle counts are performed monthly. A physical count is performed at year-end on a sample of items. Refer to question 9 Refer to question 8 The Commission is not aware of any events that would make the current year audit significantly different than the prior year audit. Page 5 of 9

6 s 25. Have there been any significant operational changes since the prior year s audit? 26. How many hours of Internal Audit assistance are provided to the auditors? Does Internal Audit perform testing throughout the year that can potentially be relied upon by the auditors? 27. What types of service providers do you utilize? Are there SSAE 16 (SOC 1) reports available for these service providers (e.g., EZPass toll revenue, financial institutions, etc)? 28. Were there any audit misstatements identified (corrected or uncorrected) by the auditors during the most recent audit? If so, what was the amount and nature of the misstatements? 29. Were there any management letters comments, significant deficiencies or material weaknesses in internal control issued by the auditors? If so, what was the nature of those comments or findings? Refer to question 20. See question 12. SSAE 16 reports and a bridge letter are obtained from PNC (OPEB Custodian); SSAE 16 reports are obtained from collection agencies, Highmark and Aetna. There were no management letter comments last year. Page 6 of 9

7 s 30. What is the PA Turnpike Commission's long term plan to address the $4.6 billion deficit in net position as of May 31, 2016? Appendix A Sample Contractual Agreement Would the Commission be open to a negotiation of the language of part of the indemnification clause, to allow our professional liability to apply to this contract if it is awarded? The Commission s Act 44 Financial Plan includes annual toll increases through Also, Act 89 provides long-term debt relief to the Commission beginning in fiscal 2023 when the annual Act 44 payment obligations will be reduced to $50 million (from $450 million). This long-term relief will eliminate the need to issue Subordinate Revenue Bonds and will allow the Commission to reduce its overall leverage. See the Commission s Act 44 Financial Plan at: ness/finance/ptc_fiscal_2017_act_4 4_Financial_Plan.pdf The Commission agrees this would be an item to discuss during contract negotiations. But this does not mean the Commission would be able to agree to your negotiation position. Page 7 of 9

8 s V-3 Time Requirements, Deliverables and Commission Resources V-3 Time Requirements, Deliverables and Commission Resources V-3 Time Requirements, Deliverables and Commission Resources 35. Appendix Appendix CAFR G G 36. Appendix G Appendix G CAFR In the past, how many auditors are onsite during each stage of the audit process, and what is the composition of the audit team? Any significant changes in internal controls, reporting structure or operating strategies from 2016? What were the fees for the audit as of and for the year ended May 31, 2016? Who prepares the financial statements? Are any adjusting journal entries are proposed by the auditors for either entity? If so, how many? Any significant deficiencies or material weaknesses reported? Refer to question 8 Refer to question 25 Refer to question 9 Employees in the Accounting Department prepare the financial statements. Refer to question 5. Page 8 of 9

9 s 37. Appendix Appendix CAFR G G V-2 Nature and Scope of the Project Can we get a copy of any required communications provided by the auditor related to the 2016 audit? Is the Commission required to have a Single audit under Federal compliance regulations? If so, can you provide the 2016 report? All other terms, conditions and requirements of the original RFP dated December 20, 2016 remain unchanged unless modified by this Addendum. Page 9 of 9