Audit
The following sample RFP for Library Audit Services was provided courtesy of the Rochester Hills Public Library.
NOTICE OF PROPOSAL The Rochester Hills Public Library is issuing this request for proposal (RFP) for the financial audit of the Library’s financial statements. The contact person regarding this RFP is Christine Lind Hage, who can be reached at the Rochester Hills Public Library, 500 Olde Towne Road, Rochester, MI 48307; (248) 650-7122. The response due date for this RFP is 3:00 PM, Thursday, August 31, 2006. Any proposals received after this date will not be considered. We are requesting (2) copies of your proposal in a sealed envelope. The envelope should clearly indicate it is a proposal for audit services. The audit period under contract is for the fiscal year ended December 31, 2006. It is the intention of the Library to continue its relationship with the auditor for no less than three years.
AUDITING STANDARDS The audit work must be performed in accordance with generally accepted auditing standards as established by the American Institute of Certified Public Accountants as applicable to governmental units.
DESCRIPTION OF ROCHESTER HILLS PUBLIC LIBRARY The Library is a PA 164 or 1877 library serving a growing population of over 90,000. Formed in 1924, the Library directly serves all of the residents of Rochester, Rochester Hills and Oakland Township. The Library is governed by elected library board of six trustees, all residents of Rochester Hills. The primary source of funding for the Library is a one-mill Rochester Hills property tax in perpetuity. Rochester and Oakland Township contribute to the library’s revenue on a one mil basis, but via contracts. A copy of the Library’s most recent audited financial statements is available upon request.
MANDATORY QUALIFICATIONS OF THE AUDITOR The following information must be affirmed in the proposal response: 1. The proposer is properly licensed for public practice as a Certified Public Accountant. 2. The proposer meets the independence requirements of the Standards for Audit of Governmental Organizations, Programs, Activities and Functions published by the U.S. General Accounting Office. 3. The proposer does not have a record of substandard audit work. Please disclose the controls your firm has in place to ensure quality standards have been met. Also, disclose whether your firm is subject to an external quality control review process.
MONITORING To ensure the quality of the audit, the Library may request, from time to time, a report on the progress of the audit. In addition, prior to completion of the fieldwork, an audit exit conference will be held to discuss the results of the audit.
TIME REQUIREMENTS The Library shall receive all proposal responses by 3:00 PM, Thursday, August 31, 2006. Evaluation of each proposal will be made as soon as possible with the award contingent upon approval of the Rochester Hills Public Library Board of Trustees. The Library may elect to interview representatives from selected firms. We anticipate the successful bidder will be notified by September 30, 2005.
WORKING PAPERS The working papers shall be retained for at least five years. The working papers will be available for examination by authorized representatives of the State of Michigan, and, if required, the cognizant federal audit agency and the General Accounting Office.
RIGHT TO REJECT The Library reserves the right to reject any and all proposals submitted and to request additional information from all proposers. Any contract awarded will be made to the independent auditor who, based on evaluation of all responses, applying all criteria and oral interviews if necessary, is determined to be the best qualified to do the audit.
REQUIREMENTS The audit must be complete and final reports rendered two months following the fiscal year end (February 28).
A preliminary draft of the audit and required journal entries must be submitted to the bookkeeper by the by the end of February for proofing and reconciliation to the Library’s records. The auditor shall furnish the Library 15 copies of all required reports. In addition, the auditor shall furnish the requested number of copies to each federal and state agency, as applicable. The auditor should be available to present the preliminary draft of the audit to the finance committee in late February as well as presenting the final audit report to the board of trustees at their March monthly board meeting.
CONTRACTUAL ARRANGEMENTS Invoices for service will be paid when received. The total amount to be invoiced shall not exceed the amount of the bid unless other arrangements have been negotiated with the Library first. The cost of audits for subsequent years will be negotiated each year. The Library reserves the right to terminate the contract for audit at any time.
METHOD OF EVALUATING PROPOSALS Proposals will be evaluated with a strict emphasis on quality. Attributes which will be analyzed include:
Evaluation Worksheet
1. Number of libraries or similar governmental entities audited by office of CPA firm proposing. 2. Firm governmental resources available. 3. Involvement in governmental activity and organizations. 4. Training of personnel in governmental auditing. 5. Quality of staff included in assignment. 6. Reference responses. 7. Internal quality control procedures and external quality control review.
After technical qualities have been evaluated, cost and other considerations will be evaluated. The proposing audit firm should indicate the cost of the audit for the first year and the range or average cost per hour for audit services. Once all factors have been evaluated, the audit firm who is most qualified and reasonable in cost will be selected.
FORMAT OF THE RFP RESPONSE It is suggested the RFP response be formatted as follows:
Title Page The response should identify the RFP subject and the name of the independent auditor, local address, telephone number, name and title of contact person and date of submission. The period which the proposal is effective should also be disclosed.
Table of Contents The table of contents of the proposal should include a clear and completed identification of the materials submitted by section and page number.
Letter of Transmittal The letter of transmittal should contain the following information: • A brief understanding of the audit service to be performed • A positive commitment to perform the service timely. • The names of persons authorized to represent the proposer, their title, address and telephone number. This may be important if different from the individual who signs the transmittal letter.
Profile of the Firm The proposers are requested to provide a profile of general background information. This should include:
1. The organization and size of the proposer, whether it is local, regional, national or international in operations. 2. The location of the office from which the work is to be done and the number of professional staff by staff level employed at that office. 3. A description of the range of activities performed by the local office such as auditing, accounting, tax service or management services. 4. A positive statement that the following mandatory criteria are satisfied: a. An affirmation that the proposer is properly licensed for practice as a certified public accountant. b. An affirmation that the proposer meets the independence requirements of the Standards for Audit of Governmental Organizations, Programs, Activities and Function, published by the U.S. General Accounting Office. c. An affirmation that the proposer does not have a record of substandard work.
Summary of the Proposer’s Qualifications 1. Identify the audit managers, field supervisors, and other staff who will work on the audit, including staff from other than the local office. Resumes including relevant experience and continuing education for auditor in-charge up to the individual with final responsibility for the engagement should be included. (The resumes may be included as an appendix.) 2. Describe the recent local and regional office auditing experience similar to the type of audit requested and give the names and telephone numbers of client officials responsible for three of the audits listed. 3. Other auditors who are participating in the audit are also required to provide similar information.
Proposer’s Approach to the Examination Submit a work plan to accomplish the scope of the audit. The work plan should include time estimates for each significant segment of the work and the staff level to be assigned. Where possible, individual staff members should be named and their titles provided. The planned use of specialists should be specified.
The Library implemented the requirements of GASB 34 during the 2004 fiscal year. It is expected that the firm will have experience and adequate staff available to meet the changes that have been brought forth by GASB 34. The Library expects the successful proposer to review all supplemental schedules and to advise, as necessary, on related accounting and reporting concerns.
TIME REQUIREMENTS If not already adequately covered in the letter of transmittal, the response should detail information on when the audit firm plans to deliver the final reports.
COMPENSATION Provide a not-to-exceed cost of services being offered for the first year of the engagement and the range or average cost per hour of audit services.
ADDITIONAL DATA Provide any additional data the proposer feels may be helpful in the selection process.
