ORDER NO. 30547 PUBLICATION OF RFP FOR PREPARATION OF THE 2006-07 AUDIT Came to be heard this the 28th day of September, 2007, with a motion made by Commissioner Letz, seconded by Commissioner Baldwin. The Court unanimously approved by vote of 4-0-0 to: Authorize the Auditor to publish for RFP's for preparation of the 2006-07 Audit. 3 0.5y7 1 •~ COUNTY OF KERB, TEXAS REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES September 24, 2007 COUNTY AUDITOR'S OFFICE 700 Main, Suite 103 Kerrville, Texas 78028 9/25/2007 1 2:23:27 PM COUNTY OF KERR, TEXAS REQUEST FOR PROPOSALS I. INTRODUCTION A. General Information B. Term of Engagement TABLE OF CONTENTS II. NATURE OF SERVICES REQUIRED A. General B. Scope of Work to be Performed C. Auditing Standards to be Followed D. Reports to be Issued E. Special Considerations F. Working Paper Retention and Access to Working Papers III. DESCRIPTION OF THE GOVERNMENT A. Name and Telephone Number of Contact Persons B. Federal and State Financial Assistance C. Magnitude of Finance Operations D. Computer Systems E. Internal Audit Function F. Availability of Prior Reports and Working Papers IV. TIME REQUIREMENTS A. Proposal Calendar B. Notification and Contract Dates C. Date Audit May Commence D. Schedule for the 2007 Fiscal Year Audit 1. Detailed Audit Plan 2. Fieldwork 3. Draft Reports E. Entrance Conferences, Progress Reporting and Exit Conferences F. Date Final Report is Due V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department and Clerical Assistance B. Internal Audit Staff Assistance C. Electronic Data Processing (EDP) Assistance D. Statements and Schedules Preparation E. Work Area, Telephone, Photocopying and FAX Machines F. Report Preparation 9!25/2007 2 2:23:27 PM VI. PROPOSAL REQUIREMENTS A. General Requirements 1. Submission of Proposals B. Technical Proposal 1. General Requirements 2. Independence 3. License to Practice in Texas 4. Firm Qualifications and Experience 5. Partner, Supervisory and Staff Qualifications and Experience 6. Prior Engagements with the County of Kerr 7. Similar Engagements with Other Government Entities 8. Specific Audit Approach 9. Identification of Anticipated Potential Audit Problems 10. Report Format C. Sealed Dollar Cost Bid 1. Total All-Inclusive Maximum Price 2. Rates by Partner, Specialist, Supervisory and Staff Level Hours Anticipated for Each 3. Out-of-pocket Expenses in the Total All-inclusive Maximum Price and Reimbursement Rates 4. Rates for Additional Professional Services 5. Manner of Payment VII. EVALUATION PROCEDURES A. Evaluation Committee B. Review of Proposals C. Evaluation Criteria 1. Mandatory Elements 2. Technical Qualifications 3. Price Oral Presentations D. Oral Presentations E. Final Selection F. Right to Reject Proposals APPENDICES A. List of Key Personnel, Office Locations and Telephone Numbers B. List of Federal and State Financial Assistance C. Proposer Guarantees D. Proposer Warranties E. Format for Schedule of Professional Fees and Expenses to Support the Total All-inclusive Maximum Price 9/25/2007 3 2:23:27 PM COUNTY OF KERR, TEXAS REQUEST FOR PROPOSALS I. INTRODUCTION A. General Information The COUNTY OF KERB, TEXAS is requesting proposals from qualified firms of certified public accountants to audit its financial statements for the fiscal years ending September 30, 2007 through 2009; with the option by Kerr County to extend contract for one or two additional fiscal years. These audits are to be performed in accordance with (1) generally accepted auditing standards, (2) the standards set forth for financial audits in the U.S. General Accounting Office's (GAO) Government Auditing Standards (1994), (3) the provisions of the federal Single Audit Act of 1984 and the Single Audit Act Amendments of 1996, (4) U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, as well as the requirements of (5) Government Code, Title 10, ~ 2256.023 (d). There is no expressed or implied obligation for the County to reimburse responding firms for any expenses incurred in preparing proposals in response to this request. To be considered, one (1) original and five (5) copies of a proposal must be received by the County Auditors Office at 700 Main Street, Room 103, Kerrville, Texas 78028 by 2:00 PM on October 17, 2007. The County of Kerr reserves the right to reject any or all proposals submitted. Proposals submitted will be evaluated by the County Commissioners Court. During the evaluation process, the County reserves the right, where it may serve the County's best interest, to request additional information or clarifications from proposers, or to allow corrections of errors or omissions. At the discretion of the County, firms submitting proposals may be requested to make oral presentations as part of the evaluation process. The County reserves the right to retain 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 County and the firm selected. It is anticipated the selection of a firm will be completed by October 22, 2007. Following the notification of the selected firm, it is expected a contract will be executed between both parties by October 31, 2007. 9/25/2007 4 2:23:27 PM B. Term of Engagement A one year contract with two additional one year options is contemplated, subject to the annual review and recommendation of the Commissioners Court, the satisfactory negotiation of terms (including a price acceptable to both the County and the selected firm) and the annual availability of an appropriation. II. NATURE OF SERVICES REQUIRED A. General The County of Kerr is soliciting the services of qualified firms of certified public accountants to audit its financial statements for the fiscal year ending September 30, 2007, with the option to audit the County's financial statements for each of the two subsequent fiscal years. These audits are to be performed in accordance with the provisions contained in this request for proposals. B. Scope of Work to be Performed The County 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 County also desires the auditor to express an opinion on the fair presentation of its combining and individual fund and account group 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" report on the supporting schedules based on the auditing procedures applied during the audit of the general purpose financial statements and the combining and individual fund financial statements and schedules. The auditor is not required to audit the statistical section of the report. 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. The auditor is not required to audit the schedule of federal financial assistance. 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. 9/25/2007 5 2:23:27 PM C. Auditing Standards to be followed To meet the requirements of this request for proposals, 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 U.S. General Accounting Office's Government Auditing Standards (1994), the provisions of the Single Audit Act of 1984 and the Single Audit Act Amendments of 1996 and the provisions of U.S. Office of Management and Budget (OMB) Circular A-133, Audits of State, Local Governments and Non-Profit Organizations, as well as Government Code, Title 10, X2256.023 (d), compliance with Government Accounting Standards Board (GASB). D. Reports to be Issued Following the completion of the audit of the fiscal year's financial statements, the auditor shall issue 1. A report on the fair presentation of the financial statements in conformity with generally accepted accounting principles. 2. A report on the internal control structure based on the auditor's understanding of the control structure and assessment of control risk. 3. A report on compliance with applicable laws and regulations. 4. An "in-relation-to" report on the schedule of federal financial assistance. 5. A report on the internal control structure used in administering federal financial assistance programs. 6. A report on compliance with laws and regulations related to major and nonmajor federal financial assistance programs. This report should include an opinion on compliance with specific requirements applicable to major federal financial assistance programs, a report on compliance with general requirements applicable to major federal financial assistance programs, and a report on compliance with laws and regulations applicable to non-major federal financial assistance program transactions tested. In the required report on internal controls, the auditor shall communicate any reportable conditions found during the audit. A reportable condition shall be defined as a significant deficiency in the design or operation of the internal control structure, which could adversely affect the organization's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. Reportable conditions that are also material weaknesses shall be identified as such in the report. Non-reportable conditions discovered by the auditors shall be reported in a separate letter to management, which shall be referred to in the report on internal controls. 9/25/2007 6 2:23:27 PM The report on compliance 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. 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 County Commissioners Court and the County Auditor. Auditors shall assure themselves that the County is informed of each of the following: 1. The auditor's responsibility under generally accepted auditing standards 2. Significant accounting policies 3. Management judgments and accounting estimates 4. Significant audit adjustments 5. Other information in documents containing audited financial statements 6. Disagreements with management 7 Management consultation with other accountants 8. Major issues discussed with management prior to retention 9. Difficulties encountered in performing the audit E. Special Considerations 1. The County has determined that the U.S. Department of Justice will function as the cognizant agency in accordance with the provisions of the Single Audit Act of 1984 and the Single Audit Act Amendments of 1996 and U.S. Office of Management and Budget (OMB) Circular A-133, Audits of State, Local Governments and Non-Profit Organizations 2. The schedule of federal financial assistance and related auditor's report, as well as the reports on the internal control structure and compliance are not to be included in the comprehensive annual financial report, but are to be issued separately. F. Working Paper Retention and Access to Working Papers All working papers and reports must be retained, at the auditor's expense, for a minimum of five (5) years, unless the firm is notified in writing by the County 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: County of Kerr U.S. Department of Justice U.S. General Accounting Office (GAO) Parties designated by the federal or state governments or by the County as part of an audit quality review process Auditors of entities of which the County is a subrecipient of grant funds 9/25/2007 7 2:23:27 PM In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance. III. DESCRIPTION OF THE GOVERNMENT A. Name and Telephone Number of Contact Persons/Organizational Chart/Location of Offices The auditor's principal contact with the County will be Mrs. PAULA J. HARGIS CPA, County Auditor, or a designated representative, who will coordinate the assistance to be pro- vided by the County to the auditor. A list of elected officials and key personnel (Appendix A) is attached. B. Background Information The County serves an area of 1,106 square miles with a population of 47,000 as of September 2007. The County's fiscal year begins on October 1, and ends on September 30. The County provides the following services to its citizens: Administration of Justice Public Safety Health and Welfare Community Service Resource Development Culture and Recreation Public Works The County has an annual payroll of about $8 million covering approximately 300 employees. The County is organized into 68 departments and agencies. The accounting and financial reporting functions of the County are centralized. More detailed information on the government and its finances can be found in the County's Comprehensive Annual Financial Report and Annual Operating Budget and can be obtained by contacting the County Auditor's Office at 700 Main, Room 103, Kerrville, Texas 78028. C. Fund Structure The County uses the following fund types and account groups in its financial reporting: 9/25/2007 8 2:23:27 PM Number of Individual Fund Type/Account Group Funds General fund 1 Special revenue funds 22 Debt service funds 4 Capital projects funds 1 Enterprise funds 0 Internal service fund 0 Agency funds 5 General fixed assets account group 0 General long-term debt account group 0 D. Budgetary Basis of Accounting The County prepares its budgets on a basis consistent with generally accepted accounting principles. E. Federal and State Financial Assistance. A listing (Appendix B) of federal and state financial assistance received by the County during fiscal year 2007 is attached. F. Pension Plans Kerr County participates in the Texas County Retirement System (TCRS). G. Magnitude of Finance Operations The finance department is headed by Mrs. PAULA J. HARGIS CPA, County Auditor and consists of 4 full time employees. The principal functions performed and the number of employees assigned to each is as follows: Function Number of Employees Accounts Payable 2 Budget 2 Grants 1 Internal Audit 2 Payroll 4 Cash and Investments 2 Treasury 2 9/25/2007 9 2:23:27 PM H. Computer Systems The computer systems are centralized and are PC based. The County currently uses Odessy for the payment and recording of collection of fees and Encode for the financial system. I. Internal Audit Function The County has maintained an internal audit function for the past 17 years. The internal audit function reports to the County Auditor and is staffed by 2 employees. All members of the internal audit staff hold a BBA degree. J. Availability of Prior Audit Reports and Working Papers Interested proposers who wish to review prior years' audit reports and management letters should contact Mrs. PAULA J. HARGIS CPA, County Auditor at 700 Main Street, Room 103, Kerrville, Texas 78028 (830)792-2237. The County 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. IV. TIME REQUIREMENT'S A. Proposal Calendar The following is a list of key dates up to and including the date proposals are due to be submitted: Request for proposals issued Due date for proposals September 28, 2007 October 17, 2007 B. Notification and Contract Dates Selected firm notified Contract date C. Date Audit May Commence October 22, 2007 October 31, 2007 November 19, 2007 The County will have all records ready for audit and all management personnel available to meet with the firm's personnel as of November 19, 2007. D. Schedule for the 2007 Fiscal Year Audit (A similar schedule will be developed for audits of future fiscal years if the County exercises its option for additional audits.) The time frame set out in this document may be adjusted as agreed upon by both parties to meet a completion date of no later than April 30, 2008. 9/25/2007 10 2:23:27 PM Each of the following shall be completed by the auditor no later than the dates indicated. 1. Interim Work The auditor will have no interim work for 2007. 2. Detailed Audit Plan The auditor shall provide the County by November 15, 2007 both a detailed audit plan and a list of all schedules to be prepared by the County Auditor. 3. Fieldwork The auditor shall complete all fieldwork by January 31, 2008. 4. Draft Reports The auditor shall have drafts of the audit report and recommendations to management available for review by the County Auditor by April 14, 2008. E. Entrance Conferences, Progress Reporting and Exit Conferences (A similar time schedule will be developed for audits of future fiscal years if the County exercises its option for additional audits.) At a minimum, the following conferences should be held: Entrance conference with County Auditor Entrance conference with all key finance department personnel and department heads of key offices or programs • The purpose of this meeting will be to discuss prior audit problems and the interim work to be performed. This meeting will also be used to establish an overall liaison for the audit and to make arrangements for work space and other needs of the auditor Progress conference with County Auditor and department heads of key offices or programs • The purpose of this meeting will be to summarize the results of the preliminary review and to identify the key internal controls or other matters to be tested Progress conference with County Auditor, key finance department personnel and other department heads of key offices or programs • The purpose of this meeting will be to discuss the year-end work to be performed Exit conference with County and department heads of key offices or programs. • The purpose of this meeting will be to summarize the results of the field work and to review significant findings F. Date Final Report is Due The County Auditor shall prepare draft financial statements, notes, all required supplementary schedules and statistical data by April 1, 2008. 9/25/2007 11 2:23:27 PM The auditor shall provide all recommendations, revisions and suggestions for improvement to the County Auditor by April 1, 2008. A revised report, including draft auditor's reports shall be delivered to the County Auditor by April 14, 2008. The County Auditor will complete their review of the draft report as expeditiously as possible. It is not expected that this process should exceed one week. 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 County Commissioners Court within five (5) working days. It is anticipated that this process will be completed and the final report delivered by Apri128, 2008. The final report and five (5) signed copies should be delivered to the County Commissioners Court. V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department and Clerical Assistance The County Auditor's Office 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 County Auditor. B. Internal Audit Staff Assistance The internal audit staff will be available to assist the auditor. C. Electronic Data Processing (EDP) Assistance EDP personnel will also be available to provide systems documentation and explanations. D. Statements and Schedules to be prepared by the staff of the County Auditor's Office. The staff of the County Auditor will prepare all statements and schedules for the auditor by November 28, 2007. E. Work Area, Telephones, Photocopying and FAX Machines The County will provide the auditor with reasonable workspace, desks and chairs. The auditor will also be provided with access to telephone lines, photocopying facilities and FAX machines. F. Report preparation, editing and printing shall be the responsibility of the auditor. The auditor shall provide the County with 60 copies of the compliance reports. 9/25/2007 12 2:23:27 PM VI. PROPOSAL REQUIREMENTS A. General Requirements 1. Submission of Notification of Interest Firms interested in submitting a proposal must submit by October 17, 2007 their Proposal in the format attached to the letter transmitting this Request for Proposals. Failure to do so will disqualify firms from submitting a proposal. 2. Inquiries Inquiries concerning the request for proposals and the subject of the request for proposals must be made in writing to: Mrs. PAULA J. HARGIS CPA 700 Main Street, Room 103 Kerrville, Texas 78028 Phone: (830) 792-2237 CONTACT WITH PERSONNEL OF THE COUNTY OTHER THAN THE COUNTY AUDITOR REGARDING THIS REQUEST FOR PROPOSALS MAY BE GROUNDS FOR ELIMINATION FROM THE SELECTION PROCESS. 3. Submission of Proposals The following material is required to be received by October 17, 2007 for a proposing firm to be considered: a. A master copy (so marked) of a Technical Proposal and five (5) copies to include the following: i. Title Page Title page showing the request for proposals' subject; the firm's name; the name, address and telephone number of a 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 [PERIOD]. iv. Detailed Proposal The detailed proposal should follow the order set forth in Section VI B of this request for proposals. v. Executed copies of Proposer Guarantees and Proposer Warranties, attached to this request for proposals (Appendix C and Appendix D) b. The proposer shall submit an original and five (5) copies of a dollar cost bid in a separate sealed envelope marked 9/25/2007 13 2:23:27 PM SEALED DOLLAR COST BID PROPOSAL FOR COUNTY OF KERR FOR PROFESSIONAL AUDITING SERVICES (DATE] c. Proposers should send the completed proposal consisting of the two separate envelopes to the following address: COUNTY AUDITOR'S OFFICE 700 MAIN STRET, ROOM 103 KERRVILLE, TEXAS 78028 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 County 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 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 it is independent of the County as defined by generally accepted auditing standards/the U.S. General Accounting Office's Government Auditing Standards (1994). 9/25/2007 14 2:23:27 PM The firm also should provide an affirmative statement that it is independent of the component unit of the County as defined by those same standards. The firm should also list and describe the firm's professional relationships involving the County or any of its agencies or component unit 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 County written notice of any professional relationships entered into during the period of this agreement. 3. License to Practice in Texas An affirmative statement should be included indicating that the firm and all assigned key professional staff are properly registeredllicensed to practice in Texas. 4. Firm Qualifications and Experience The proposal 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. 5. Partner, Supervisory and Staff Qualifications and Experience The firm should identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement and indicate whether each such person is registered/licensed to practice as a certified public accountant in Texas. The firm also should 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. The firm should 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. The firm also should indicate how the quality of staff over the term of the agreement will be assured. 9/25/2007 I S 2:23:27 PM 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 County. However, in either case, the County retains the right to approve or reject replacements. Consultants and firm specialists mentioned in response to this request for proposals can only be changed with the express prior written permission of the County, 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 County The firm should list separately all engagements within the last five years, ranked on the basis of total staff hours, for the County by type of engagement (i.e., audit, management advisory services, other). For each engagement, the firm should 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 of 5) performed in the last five years that are similar to the engagement described in this request for proposals. These engagements should be ranked on the basis of total staff hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact. 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 proposals. In developing the work plan, reference should be made to such sources of information as the County'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 sizes 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 9/25/2007 16 2:23:27 PM f. Approach to be taken to gain and document an understanding of the County'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 problems and any special assistance that will be re- quested from the County. 10. Report Format The proposal should include sample formats for required reports. C. Sealed Dollar Cost Bid 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 proposals. The total all-inclusive maximum price to be bid is to contain all direct and indirect costs including all out-of-pocket expenses. The County will not be responsible for expenses incurred in preparing and submitting the technical proposal or the sealed dollar cost bid. Such costs should not be included in the proposal. The first page of the sealed dollar cost bid should include the following information: a. Name of Firm b. Certification that the person signing the proposal is entitled to represent the firm, empowered to submit the bid and authorized to sign a contract with the County. c. A total All-inclusive Maximum Price for the fiscal year 2007 engagement. 2. Rates by Partner, Specialist, Supervisory and Staff Level Time Hours Anticipated for Each The second page of the sealed dollar cost bid should include schedule of professional fees and expenses, presented in the format provided in the attachment (Appendix E, part 1), that supports the total all-inclusive maximum price. The cost of special services described in Section II E of this request for proposals should be disclosed as separate components of the total all-inclusive maximum price using the format provided Appendix E parts 2 and 3. Out-of-pocket Expenses Included in the Total All-inclusive Maximum Price and Reimbursement Rates 9/25/2007 17 2:23:27 PM Out-of-pocket expenses for firm personnel (e.g., travel, lodging and subsistence) will be reimbursed at the rates used by the County for its employees. All estimated out-of-pocket expenses to be reimbursed should be presented in the sealed dollar cost bid in the format provided in the attachment (Appendix E). 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 County rates for its employees. 4. Rates for Additional Professional Services If it should become necessary for the County to request the auditor to render any additional services to either supplement the services requested in this request for proposals 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 per- formed only if set forth in an addendum to the contract between the County and the firm. Any such additional work agreed to between the County 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 billings 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. VII. EVALUATION PROCEDURES A. Evaluation Committee Proposals submitted will be evaluated by a five member Evaluation and Selection Committee selected by the County Commissioners Court. B. Review of Proposals The Evaluation and Selection Committee will use a point formula during the review process to score proposals. Each member of the Evaluation Committee will first score each technical proposal by each of the criteria described in Section VII C below. The full Evaluation Committee will then convene to review and discuss these evaluations and to combine the individual scores to arrive at a composite technical score for each firm. At this point, firms with an unacceptably low technical score will be eliminated from further consideration. 9/25/2007 18 2:23:27 PM After the composite technical score for each firm has been established, the sealed dollar cost bid will be opened and additional points will be added to the technical score based on the price. The maximum score for price will be assigned to the firm offering the lowest total all-inclusive maximum price. Appropriate fractional scores will be assigned to other proposers. The County reserves the right to retain all proposals submitted and use any idea in a proposal regardless whether that proposal is selected. C. Evaluation Criteria Proposals will be evaluated using three sets of criteria. Firms meeting the mandatory criteria will have their proposals evaluated and scored for both technical qualifications and price. The following represent the principal selection criteria which will be considered during the evaluation process. 1. Mandatory Elements a. The audit firm is independent and licensed to practice in Texas b. The audit firm's professional personnel have received adequate continuing professional education within the preceding two years c. The firm has no conflict of interest with regard to any other work performed by the firm for the County d. The firm submits a copy of its most recent external quality control review report and the firm has a record of quality audit work. e. The firm adheres to the instructions in this request for proposals on preparing and submitting the proposal 2. Technical Qualifications: (Maximum Points - 50) a. Expertise and Experience (Maximum Points - 35) (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 (Maximum Points - 15) (1) Adequacy of proposed staffing plan for various segments of the engagement (2) Adequacy of sampling techniques (3) Adequacy of analytical procedures 3. Price: (Maximum Points - 50) COST WILL NOT BE THE PRIMARY FACTOR IN THE SELECTION OF AN AUDIT FIRM. 9/25/2007 19 2:23:27 PM D. Oral Presentations During the evaluation process, the Evaluation Committee may, at its discretion, request any one or all firms to make oral presentations. Such presentations will provide firms with an opportunity to answer any questions the Selection Committee may have on a firm's proposal. Not all firms may be asked to make such oral presentations. E. Final Selection The County will select a firm based upon the recommendation of the Evaluation Committee. It is anticipated that a firm will be selected by October 24, 2007. Following notification of the firm selected, it is expected a contract will be executed between both parties by October 31, 2007. F. Right to Reject Proposals 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 County and the firm selected. The County reserves the right without prejudice to reject any or all proposals. 9/25/2007 20 2:23:27 PM APPENDIX A LIST OF PRINCIPAL OFFICIALS As of September 30, 2007 Commissioners Court (The Governing Body) Pat Tinley, County Judge H. A. "Buster" Baldwin, County Commissioner, Precinct Number 1 William "Bill" Williams, County Commissioner, Precinct Number 2 Jonathan Letz, County Commissioner, Precinct Number 3 Bruce Oehler, County Commissioner, Precinct Number 4 The Council of Judges Stephen B. Ables, District Judge, 216th Judicial District E. Karl Prohl, District Judge, 198th Judicial District Spencer Brown, County Court at Law Other Principal Officials Rex Emerson, County Attorney Paula J. Hargis, County Auditor Jannett Pieper, County Clerk Mindy Williams, County Treasurer William F. "Rusty" Hierholzer, Sheriff Diane Bolin, Tax Assessor Collector E. Bruce Curry, District Attorney 216th Judicial District Ron Sutton, District Attorney 198th Judicial District Linda Decker, District Clerk Eva Hyde, Personnel Director Phone numbers and addresses can be retrieved from the County Web Site located at www.co.kerr.tx.us 9/25/2007 21 2:23:27 PM filename: audit fed funds 06-07 FEDERAL FUNDS Appendix B CONTRACT NUMBER CONTRACT FUNDS DISPERSED FUNDS RECEIVED AGENCY FUNDS AMOUNT 10/01/05-09/30/06 10/01/05-09/30/06 RECEIVED FROM (32-657) (32-333-100) Office Rural TDCP 722411 $ 250,000.00 $ 60,183.00 $ 60,183.00 Community Affairs PHASE II (CFDA # 14.228) (30-655) (30-335-100) Office Rural TDCP 723095 $ 500,000.00 $ 148,172.00 $ 145,672.00 Community Affairs PHASE III (CFDA # 14.228) (30-656) (30-336-100) Office Rural TDCP 724441 $ 250,000.00 $ 118,980.00 $ 118,980.00 Community Affairs PHASE IV (CFDA # 14.228) (10-560-569) BPV PROGRAM $ - (10-370-665) 2003-AppIID#03018936 $ 11,617.00 $ - $ 1,833.00 O.J.P. (CFDA # 16.607) Dispersed prior yr CRIME VICTIMS RIGHTS COORDINATOR (10-438) (10-370-650) #VA-05-V30-17504-03 $ 53,018.00 $ 13,254.00 $ 13,254.00 STATE COMPT. [07/01 /06-06/30/07] (CFDA # 16.575) -? (10-438) (10-370-650) #VA-05-V30-17504-02 $ 44,177.00 $ 32,291.00 $ 32,291.00 STATE COMPT. [07/01 /06-06/30/07] (CFDA # 16.575) -? SCAPP (10-334-620) $ - $ 12,357.00 $ 12,357.00 State Comptroller Title IV-E Foster Care TJPC $0.00 64,683.00 $ 385,237.00 $ 435,063.00 V.I.N.E. /ictim Information & Notification Everyday $25,473.00 $25,473.00 State Comptroller Total Federal & State $ 410,710.00 $ 460,536.00 APPENDIX C PROPOSER GUARANTEES The proposer certifies it can and will provide and make available, at a minimum, all services set forth in Section II, Nature of Services Required. Signature of Official: Name (typed): Title: Firm: Date: 9/25/2007 22 2:23:27 PM APPENDIX D PROPOSER WARRANTIES A. Proposer warrants that it is willing and able to comply with State of Texas laws with respect to foreign (non-state of Texas) corporations. B. 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. C. Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the express prior written permission of the County. D. Proposer warrants that all information provided by it in connection with this proposal is true and accurate. Signature of Official: Name (typed): Title: Firm: Date: 9/25/2007 23 2:23:27 PM APPENDIX E Part 1 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE FISCAL YEAR 2007 FINANCIAL STATEMENT'S Standard Quoted Hourly Hourly Hours Rates Rates Total Partners Managers Supervisory staff Staff Other (specify): Subtotal Total for services described in Section II E of the request for proposals (Detail on subsequent schedules) $ Out-of-pocket expenses: Meals and lodging Transportation Other (specify): Total all-inclusive maximum price for Fiscal Year 2007 audit $ Note: The rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the total all-inclusive maximum price. $ $ $ 9/25/2007 24 2:23:27 PM APPENDIX E Part 2 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE FISCAL YEAR 2007 FINANCIAL STATEMENTS: COMBINING SCHEDULE-ALL SERVICES DESCRIBED IN THE REQUEST FOR PROPOSALS SECTION II E Nature of Service to be Provided Schedule Total Price Total EACH SERVICE DESCRIBED IN SECTION II E SHOULD BE SUPPORTED BY AN INDIVIDUAL SCHEDULE IN THE FORMAT PROVIDED IN PART 3 OF THIS APPENDIX. 9/25/2007 25 2:23:27 PM APPENDIX E Part 3 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE FISCAL YEAR 2007 FINANCIAL STATEMENTS: SUPPORTING SCHEDULE FOR [NAME OF SERVICE] Standard Quoted Hourly Hourly Hours Rates Rates Total Partners $ $ $ Managers Supervisory staff Staff Other (specify): Subtotal $ Out-of-pocket expenses: Meals and lodging Transportation Other (specify): Total price for [NAME Of SERVICE] ~ Note: The rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the total price. 9/25/2007 26 2:23:27 PM