Request for Proposals: Auditing Services. Port of Stockton

Transcription

1 Request for Proposals: Auditing Services Port of Stockton March 5, 2018

2 TABLE OF CONTENTS I. Background and Description of the Port and its Accounting System II. Accounting Records III. Accounting Services Assistance Available to Service Provider IV. Submission of Proposals and Time Schedule for Awarding the Contract V. Terms of Agreement VI. Auditing Services Contract and Payment Fees VII. Scope of Work Requested VIII. Description of the Selection Process IX. Exhibits 1

3 Background The Port of Stockton, in Stockton, California (hereinafter called the Port ) is requesting proposals from qualified firm or firms of certified public accountants (Service Provider) having sufficient governmental and auditing experience to audit financial statements of the Port of Stockton in accordance with the specifications outlined in this Request for Proposals (RFP). There is no express or implied obligation of the Port to reimburse any CPA firm for any expenses incurred in preparing proposals in response to this request. I. Description of the Port and its Accounting System The Port is a special governmental district established under the California Harbors and Navigation Code, Sections 6200 through It is governed by a seven-member Board of Port Commissioners. Four commissioners are appointed by the Stockton City Council and three by the San Joaquin County Board of Supervisors. The day-to-day administration of Port operations is under the direction of the Port Director. The District's geographical boundaries are the same as the City of Stockton's, with the exception of an eight-mile long strip extending one-half mile on either side of the Stockton Ship Channel. The Port is a deep-water seaport located seventy-five miles inland from San Francisco, in the agricultural heartland of California in San Joaquin County. The Port owns and operates docks, transit sheds, and warehouses which are used to load and unload cargo from ships, barges, trucks, and railroads, and to store cargos. Cargoes handled by the Port include various dry and liquid bulk commodities, general cargos, and project cargos. Some of the commodities handled at the Port include steel products, rice, bulk cement, sulfur, liquid fertilizer, molasses, and ammonia. The Port also leases land and warehousing facilities to a number of diverse tenants. Port operations are self-supporting and receive no direct tax subsidies. 2

4 The Port is a self-supporting enterprise. Its entire operations are accounted for on an accrual basis in a single proprietary fund and does not receives tax dollars. The Port has a comprehensive methodology of internal controls that encompasses the whole accounting process and its procedures to assure the most accurate distribution of its financial data. The total budget for fiscal year was $52.6 million. II. Accounting Records The Port uses Microsoft Dynamics GP 2015 to process payroll, accounts payable, fixed assets, and core financial data. Billing and accounts receivable are processed in KleinPort, a modular, configurable software solution developed by Saab Technologies, Ltd. KleinPort integrates nightly into our financials platform in Microsoft GP. Financial reports are prepared in Prophix 11. The Port s in-house information technology personnel are responsible for security, backups, and working with accounting staff to install vendor upgrades. III. Accounting Services Assistance Available to the Service Provider The Finance Department staff, consisting of the Director of Finance, Controller, Assistant Accounting Manager, Senior Accountant, Senior Accounting Technicians, and Accounting Technicians III will provide assistance as part of the financial statement preparation process. This includes the preparation of all necessary confirmations, completion of the worksheets, retrieval and return of source documents, preparation of reports and schedules prior and during field work. The Service Provider firm will have access to all printed reports and the computer system to view records and printed reports. Reasonable workspace, tables/desks and chairs will be made available for the Service Provider s fieldwork. Their staff will also be provided with access to telephone lines, photocopying and facsimile machines. 3

5 The Port s fiscal year ends June 30 each year. The Port records additional accruals through July 31. A trial balance, a draft of the basic financial statements and all agreed schedules will be available for the Service Provider s staff prior to the scheduled dates for the actual fieldwork. The Port has received the Government Finance Officers Association s Certificate of Achievement for Excellence in Financial Reporting for the last seven years. The Port submitted its CAFR for fiscal year IV. Submission of Proposals and Time Schedule for Awarding the Contract Timeline: RFP Advertised March 5, 2018 Deadline to Receive Proposals March 29, 2018 Evaluation of Proposals March 30 April 6, 2018 Interview with Commission April 9 April 20, 2018 Commissioner Approval Approximately May 7, 2018 Note: This is the Port of Stockton s desired project schedule. The Port reserves the right to modify the schedule. Port will receive sealed RFP s no later than 4:30 p.m. (Pacific Daylight Time) on March 29, 2018: Please submit RFP s addressed to: Dianna Baker c/o Port of Stockton P.O. Box 2089 Stockton, Ca or Express delivery address: 2201 West Washington Street Stockton, Ca

6 Once the selection period is complete, the Services Agreement will be finalized promptly following the Board of Port Commissioners (Board) approval of a final Selected Service Provider. The Port reserves the right to modify the dates for the preliminary selection and final contract approval based on changes to the regularly scheduled Board meeting dates, unanticipated delays in the selection and/or negotiation process, or any other contingency based on the best interest of the Port. Nevertheless, every effort will be made to be respectful of the time constraints put upon public accounting firms. Any questions should be directed to Dianna Baker, Director of Finance in writing at dbaker@stocktonport.com. Written responses will be available to all interested parties. V. Terms of Agreement This Agreement will be with the selected Service Provider for a three (3) year term, with two (2) additional one (1) year options, to be exercised at the sole discretion of the Port. The total contract term is not to exceed a maximum of five (5) fiscal years. The option periods are subject to the review and recommendation of the Deputy Port Director of Finance & Administration and approved by the Board upon successful negotiation of terms (including a total fee acceptable to both the Port and CPA firm) for each of the last two (2) option periods. The three (3) year term covers financial reporting for the following periods: July 1, 2017 through June 30, 2018 (fiscal year 2018) July 1, 2018 through June 30, 2019 (fiscal year 2019) July 1, 2019 through June 30, 2020 (fiscal year 2020) After the initial first three (3) years of the contract, if the Port chooses to exercise its option(s) the Port and the Service Provider will negotiate the financial terms of 5

7 the contract option. The fee increase for the options shall not exceed the CPI Adjustment percentage from the start of the contract to the start of the option period. All contracts and options are subject to approval of the annual budget by the Board. VI. Auditing Services Contract and Payment Fees Up to 75% of the total fee may be billed through progress payment billings prior to the submission of the final report to the Port. The Service Provider may submit final billings following the Port s approval of the audited financial statements. The Port shall retain 25% of total contract fee until the work is completed satisfactorily. Payments will be a net 30 days. VII. Scope of Work Requested The Service Provider will perform an audit based on GASB requirements issued by the Comptroller General of the United States; Office of Management and Budget Circular A-133, Audits of State and Local Governments; and any other application procedures to meet the audit requirements of the Port s CAFR prepared in accordance with generally accepted accounting principles (GAAP). The Service Provider will review and advise on the issuance of the basic Financial Statements, Notes to Financial Statements, the Management Analysis and Discussion Letter using GASB 34 reporting model, the Supplementary financial information and Statistical data for the CAFR of the Port in accordance with the generally accepted accounting practices and government auditing standards. The Service provider will submit these reports in a suitable format for publication. The Service Provider will advise on the implementation of any future GASB requirements, changes in GAAP procedures, and single audit requirements. A. The CPA firm will perform the audit in accordance with the following:.a.1. Generally Accepted Auditing Standards; 6

8 .A.2. Governmental Accounting Standards Board;.A.3. The Single Audit Act of 1984 and the Single Audit Act Amendments of 1996;.A.4. The provisions of OMB Circular A-133: Audits of Federal, State, and Local Governments; and.a.5. All applicable laws and regulations. B. The Service Provider shall include the following information: significant accounting policies, management judgments and accounting estimates, significant audit adjustments; disagreements with management; difficulties encountered in performing the audit; and other information in documents containing audited financial statements. C. In required reports on compliance and internal controls, the Service Provider shall communicate any reportable conditions found during the audit. A reportable condition shall be defined as a significant deficiency in the design or operation of the internal control structure, which could adversely affect the organization s ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements. D. Reportable conditions that are also material weaknesses shall be identified as such in the report. Non-reportable conditions discovered by the auditors shall be reported in a separate letter to management, which shall be referred to in the report(s) on compliance and internal controls. The reports on compliance and internal controls shall include all instances of noncompliance. E. The Service Provider must submit the preliminary reports in a suitable format for publication and the annual audit, including adjusting journal entries. During this period and the forthcoming audit period, the Service Provider should be available for any meetings that may be necessary to discuss the auditor s concerns, questions and/or reports. The Director of Finance or designee will consult with the Service Provider on any proposed revisions by the auditor before release of the final report. 7

9 F. The Service Provider will provide the final Comprehensive Annual Finance Report in an electronic file in printer ready format. The Service Provider will also provide copies of the single audit and management notes in an electronic format/file and bound copies. They will also file the Federal Clearing House report for the single audit. G. All working papers and reports must be retained, at the Service Provider s expense, for a minimum of five years from the date of the audit reports and will be made available for examination by authorized representatives of any Federal or state audit agency, the U.S. Accounting Office, and the Port. In addition, the Service Provider shall respond to the reasonable inquires of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance. Ownership of Written Product. All reports, data, documents, charts, drawings or other written or tangible material ( written products ) developed, prepared, or assembled by Service Provider in the performance of this Agreement shall be the property of the Port and shall be delivered to the Port in useable electronic and/or written format upon termination or expiration of this Agreement. Service Provider may take and retain copies of the written products as desired, but shall not have copyrights of any written products produced pursuant to this Agreement. H. The Service Provider shall meet with the Director of Finance prior to the commencement of the Fiscal Year 2018 to discuss the preparation and consultation of procedures and to provide a list of schedules to be prepared by Port personnel prior to the beginning of the fieldwork. The Service Provider will provide a proposed timeline or work schedule for the audit. The main audit will start no earlier than September and final product to be completed by December 15 th. I. The Service Provider will assist the Port with implementing any editing adjustments of the finalized audited financial documents of the Government Finance Officers Association s Comprehensive Annual Financial Report 8

10 with the Port s outside printing firm that the Service Provider will produce as part of the audit. VIII. Description of the Selection Process Six (6) copies of the proposal should be submitted at the time and place indicated in Section I. Submission of Proposals and Time Schedule for Awarding Contract. Proposals should be submitted in two sealed envelopes. One envelope should include Section A materials and the other envelope should include Section B material. Section A will be comprised of the Service Provider s experience and qualifications of its personnel in preparing governmental financial statements using GASB 34 module as well as experience in preparing the GFOA Comprehensive Annual Financial Report. Section B is the Service Provider s cost proposal. The Service Provider selection committee will evaluate the proposals. The Port reserves the right to reject any or all proposals if there is good cause: to cancel the solicitations, waive technicalities, request clarifications or additional information and be the sole judge of suitability of the services for its intended use. The Port further specifically reserves the right to make the award and negotiate the final contract in the best interest of the Port considering cost effectiveness. Failure to respond to any requirements outlined in the RFP, or failure to enclose copies of the required documents, may disqualify the bid. The Port reserves the right to retain all submitted proposals. In order to standardize the review process, the Service Provider s proposal must be presented in the following format and include the designated information: Section A: Experience and Other Qualifications The corresponding response should begin with the number of the requested information. 9

11 1. Indicate the location of the offices and the number of people, by level, that will handle the auditing services. 2. Provide a list of the office s current and recent governmental and/or maritime clients, indicating the type(s) of services performed and the number of years served for each. Provide the names, addresses, and telephone numbers of the personnel of current and prior governmental and/or maritime clients who may be contacted by the Port. 3. Describe your CPA organization s participation in AICPA-sponsored or comparable quality control programs (peer review). Provide a copy of the firm s current peer review including management letter responses, if any. Indicate whether the review included governmental/maritime engagements. 4. Describe the professional experience and qualifications in auditing and CAFR preparation of each senior and high-level person assigned to the accounting services outlined above. Information should include: relevant educational background of each person assigned to the accounting services; seminars and courses attended within the past three years, especially courses in governmental accounting and auditing; years on the job and his/her position while on each audit; experiences in preparing these reports and training; licenses; and any participation in State or national professional organizations, speaker or instructor rolls in conferences or seminars, or authorship of articles and books. 5. Identify proposed sub-contractors, if any, and the proportion(s) of the engagement for which they will be used. 6. Describe the Provide a brief resume for each individual who will be assigned to preparation for the Port s financial statements/cafr and training which describes his/her professional qualifications, Describe the firm s specific financial statement and CAFR preparation and training approach in the form of a work plan. The work plan should include an explanation of the methods to be used in assisting the staff. 10

12 7. Identify a tentative schedule for completing the financial package and consulting within the specific deadlines. 8. Describe the liability insurance coverage arrangements to assure that it is sufficient to cover claims. 9. Describe any regulatory action taken by an oversight body against the proposing CPA organization, if any. 10. Identify any potential difficulties, along with the firm s proposed resolution and any additional assistance expected from the Port s staff. 11. Provide any other information you believe relevant to the decision of selection of the best CPA firm for the Port. Section B: Cost Proposal Proposal should include cost estimates and other necessary cost information Include the following information: 1. Using the format in Exhibit A, specify costs for auditing services for the Port for fiscal year ending June 30, 2018; fiscal year ending June 30, 2019; and for fiscal year ending June 30, The cost for services for the first three (3) years is binding, while the costs for the two (2) subsequent years are estimated costs. 2. Include a signed Authorized Signatures and Attestation form (Exhibit B). 3. Identify and describe any other important cost-based information. Selection Process 1. The Audit Service Provider Selection Committee will evaluate the proposals. The Audit Service Provider Selection Committee will be determined by the Port Director and may include members of the Port Board Commission, Port staff, and other non-port individuals with accounting and auditing expertise. The Committee will use a point formula during the review process to score proposals. Each member of the Committee will first score each technical proposal by each of the criteria described below. The individual scores will then be combined to 11

13 arrive at a composite technical score for each firm. At this point, any firm with an unacceptably low technical score will be eliminated from further consideration. 2. After the composite technical score for each firm has been established, the cost proposal will be analyzed and additional points will be added to the technical score based on bid price. The maximum score for price will be assigned to the firm offering the lowest all-inclusive maximum price. Appropriate fractional shares will be assigned to other proposals. 3. The Port reserves the right to retain all proposals submitted and use any idea in a proposal regardless of whether the proposal is selected. 4. Proposals will be evaluated using three (3) sets of criteria. Firms meeting the mandatory criteria will have their proposals evaluated and scored for both technical qualifications and price. The following represents the principal selection criteria, which will be considered during the evaluation process A. Mandatory elements: 1. The CPA firm is independent and licensed to practice in California. 2. The CPA firm has no conflict of interest with regard to any other work performed by the firm for the Port and other entities. 3. The CPA firm adheres to the instructions in this request for proposal on preparing and submitting the proposal. 4. The CPA firm submits a copy of its last quality control review report and the firm has a record of quality CAFR preparation work. B. Technical qualifications (maximum points 70) 1. Expertise and Experience a. The firm s past experience and performance on comparable governmental or maritime related engagements. b. 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. 12

14 2. Financial Reporting/Consulting approach a. Adequacy of proposed staffing plan and work plan for various segments of the engagement. C. Price (maximum points 30) Cost will not be the primary factor in the selection of the CPA firm. 5. Interview Process A. The top CPA firms may be required to give an informal presentation to the Audit Selection Committee and/or selected staff. B. The Audit Selection Committee will select a CPA firm who is deemed to be fully qualified and best suited among those submitting proposals. 6. Reservation of Rights The Port specifically reserves the right, in its sole discretion, to reject any or all proposals, to re-bid, or to waive inconsequential defects in bidding not involving time, price or quality of the work. The Port may reject any and all proposals and waive any minor irregularities in the Bids. 13

15 EXHIBIT A Cost for Services Hourly Rate Estimated Hours On site / CPA Office Estimated Cost FYE Personnel Partner Manager Senior Accountant Staff Accountant Clerical Total Personnel Travel Describe Itemize Cost of Supplies & Materials Other Costs Total Consulting services & Financial Package prep costs

16 RFP Auditing Services Exhibit B Authorized Signature and Attestation I, the undersigned, an authorized representative of, have read and thoroughly understand the specifications, instructions and all other conditions of the RFP Auditing Services issued by the Port of Stockton for Auditing Services for the fiscal years ended June 30, 2018, June 30, 2019 and June 30, Acting on behalf of my accounting firm, which is listed above, I do attest that the services offered by us meet Port of Stockton s specifications in every respect (check one) without exception/ with exception. We, therefore, offer and make this bid to furnish the Port of Stockton the Auditing Services detailed in this proposal, at the price indicated. Date: Signature: Printed Name: Title: