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2000-24139 RESO RESOLUTION NO. 2000-24139 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER TO ENTER INTO AN AGREEMENT FOR ONE-YEAR WITH KPMG FOR AUDITING SERVICES IN AN AMOUNT NOT TO EXCEED $147,500; REJECTING ALL PROPOSALS RECEIVED IN RESPONSE TO REQUEST FOR PROPOSALS (RFP) NO. 113-99/00; AND AUTHORIZING THE ISSUANCE OF A REQUEST FOR PROPOSALS FOR AUDITING SERVICES. WHEREAS, the City's General Purpose Financial Statements of the City Comprehensive Annual Financial Report (CAFR) for fiscal year ending September 30, 2000, must be audited; and WHEREAS, the audit engagement will also include audits of the Miarni Beach Redevelopment Agency and the City's Parking Enterprise Fund, the Fire and Police Retirement System, the General Employees Retirement System and the Unclassified Employees and Elected Official Retirement Systems; and WHEREAS, on June 28, 2000, the Mayor and City Commission adopted a resolution authorizing the issuance of a Request for Proposals (RFP) for auditing services to examine the City's General Purpose Financial Statements of the City's Comprehensive Annual Financial Report (CAFR); and WHEREAS, there did not exist proper and reasonable notice of the Evaluation Committee's meeting, as required by the Government in the Sunshine Law; and WHEREAS, due to the need for an audit of the City's General Purpose Financial Statements of the City Comprehensive Annual Financial Report (CAFR) for Fiscal Year ending September 30, 2000, the Adminstration would recommend that the Mayor and City Commission reject all proposals received in response to RFP No. 113-99/00; and further authorize the Administration to enter into negotiations and contract with KPMG for auditing services for a one-year period, pending the issuance of a new RFP. NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission herein accept the recommendation ofthe City Manager to enter into an agreement for one-year with KPMG for Auditing Services in an amount not to exceed $147,500; rejecting all proposals received in response to Request for Proposals (RFP) No. 113-99/00; and authorize the issuance of a Request for Proposals for Auditing Services. APPROVED AS 10 FORM & LANGUAGE PASSED and ADOPTED this 18th day of October, 2000. & FOR EXECUTION ATTEST: {o~ (3 ~()" ~o. ~A MAYOR CITY CLERK SECTION II . SCOPE OF SERVICES The original engagement shall include such funds and groups of accounts contained in the City's CAFR except for the financial statements of the Miami Beach Redevelopment Agency, The Fire and Police Retirement System, the General Employees Retirement System and the Unclassified Employees and Elected Officials Retirement System. These component units are audited under a separate cover and have been included as additive alternates, subject to their Board's approval, in this RFP. The auditors should express an opinion on the fairness of the presentation of the City financial statements in accordance with generally accepted auditing standards and performed in compliance with Federal, State and City orders, statutes, ordinances, resolutions, bond covenants, rules and regulations which may pertain to the work required in the engagement. The auditors will provide guidance with the implementation of GASB34 and will examine the financial statements as required in conformity with generally accepted accounting prinCiples. An evaluation is to be made of the system of internal control to assess the extent that it can be relied upon to insure accurate information and compliance with laws and regulations and to provide for efficient and effective operation. The study of internal control should include a review of the system and test of compliance. A review is to be made of the information technology operations of the City and controls to assure protection of files and prevention of processing errors. The auditor shall prepare the Report of Independent Certified Public Accountants for inclusion on the CAFR. The auditor shall also submit the following reports for inclusion in the report to the Auditor General: Report of Independent Certified Public Accountants, Report of Independent Certified Public Accountants on Compliance and Internal Controls, Management Letter, and Memorandum of Accounting Procedures and Internal Controls (as needed). The auditor shall prepare the following reports and schedules as required for the Single Audit Report: . Table of Contents for Single Audit . Report of Independent Certified Public Accountants in compliance with requirements applicable to each major program and on internal control over compliance in accordance with OMB Circular A-B3. . Notes to Schedule of Expenditures of Federal Awards . Schedule of Findings and Questioned Cost . Report of Independent Certified Public Accountants on Examination of Management Assertion about Compliance with Specified Requirements of State Financial Assistance . Management Assertion Reports 12 The auditor shall also prepare a management letter which shall contain the audit findings which may include the following material items discovered within the scope of the audit: . Whether errors or irregularities in the preceding audit report have been corrected; . Whether recommendations made in the preceding audit report have been followed; . Recommendations to improve management, accounting procedures, internal controls, and increase efficiency; . Violation of the laws, rules and regulations discovered within the scope of the audit; . Improper or inadequate accounting procedures; . Failure to properly record financial transaction; . Other inaccuracies, irregularities, shortages and defalcations, if any, discovered by the auditor. 13 SECTION IV - EV ALVA nON/SELECTION PROCESS: CRITERIA FOR EV ALUA TION The procedure for proposal evaluation and selection is as follows: I. Request for Proposals issued. 2. Receipt of proposals. 3. Opening and listing of all proposals received. 4. An Evaluation Committee, appointed by the City Manager, shall meet to evaluate each proposal in accordance with the requirements of this RFP. If further information is desired, proposers may be requested to make additional written submissions or oral presentations to the Evaluation Committee. 5. The Evaluation Committee shall recommend to the City Manager the proposal or proposals acceptance of which the Evaluation Committee deems to be in the best interest of the City. Proposals will be evaluated on the basis of the following criteria: * Firm's Experience in Auditing Services * Qualifications of Project Team * Methodology and Approach * Previous Similar Projects * References Provided by Prior Clients * Fees 6. After considering the recommendation(s) of the Evaluation Committee, the City Manager shall recommend to the City Commission the proposal or proposals acceptance of which the City Manager deems to be in the best interest of the City. 7. The City Commission shall consider the City Manager's recommendation(s) in light of the recommendation(s) and evaluation of the Evaluation Committee and, if appropriate, approve the City Manager's recommendation(s). The City Commission may reject City Manager's recommendation(s) and select another proposal or proposals. In any case, City Commission shall select the proposal or proposals acceptance of which the City Commission deems to be in the best interest of the City. The City Commission may also reject all proposals. 18 CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 http:\\ci.miami-beach.fl.us COMMISSION MEMORANDUM NO. ~ 14-00 TO: Mayor Neisen O. Kasdin and Members of the City Commission DATE: October 18,2000 FROM: Jorge M. Gonzalez City Manager ~ SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER TO ENTER INTO AN AGREEMENT FOR ONE-YEAR WITH KPMG FOR AUDITING SERVICES IN AN AMOUNT NOT TO EXCEED $147,500; REJECTING ALL PROPOSALS RECEIVED IN RESPONSE TO REQUEST FOR PROPOSALS (RFP) NO. 113-99/00; AND AUTHORIZING THE ISSUANCE OF A REQUEST FOR PROPOSALS FOR AUDITING SERVICES. ADMINISTRATION RECOMMENDATION Adopt the Resolution. FUNDING $ 99,500 18,000 15,000 15.000 $147,500 General Fund Parking Enterprise Fund Convention Center Enterprise Fund Redevelopment Agency Total ANALYSIS The primary purpose of the audit is to examine the City's General Purpose Financial Statements of the City Comprehensive Annual financial Report (CAFR) for fiscal year ending September 30, 2000. The cDntract will be for a period of one year. This audit engagement will also include audits of the Miami Beach Redevelopment Agency and the City's Parking Enterprise Fund. The Fire and Police Retirement System, the General Employees Retirement System and the Unclassified Employees and Elected Official Retirement Systems are component units and as such, their audits are subject to selection and approval by their respective Boards. FUNDI nd Budget AGENDA ITEM k- I P DATE 10 -I ~- DO RFP No. 113-99/00 Page Two October 18, 2000 ANALYSIS (continued) On June 28, 2000, the Commission adopted a resolution authorizing the issuance of a Request for Proposals (RFP) for auditing services to examine the City's General Purpose Financial Statements of the City's Comprehensive Annual Financial Report (CAFR). Additionally, the Commission requested that the Audit Committee review the RFP prior to the issuance. Since most members of the Audit Committee were out oftown, Audit Committee member Laurie Holtz reviewed the RFP on June 29, 2000, and had neither comments nor changes. On July 7, 2000, the City's Finance Committee accepted Mr. Holtz's review and authorized the RFP to be issued. The RFP was issued July 12,2000, with an opening date of July 31, 2000. DemandStar.com issued notices to 107 firms resulting in the request for ten (10) proposal packages and the receipt of three (3) proposals. Letter to Commission (LTC) number 151-2000, dated August 2, 2000, appointed the following individuals to serve on the Evaluation Committee (the Committee) to evaluate the proposals received: Larry Herrup, CPA, Budget Advisory Committee Jeryl (DeDe) Weithorn, CPA, Budget Advisory Committee Mark Gidney, CPA Patricia Walker, CPA, Finance Director, City ofMiarni Beach James J. Sutter, CPA, Internal Auditor, City of Miami Beach The Committee met on August 7, 2000, and proceeded to review the three proposals received and evaluate the responses in accordance with the criteria listed in the RFP. Two of the firms KPMG, and Ernst & Young made proposals on the CAFR audit along with proposals on the individual component units. The third firm of Rodriguez, Trueba & Co., only made a proposal on the individual component units. The Committee decided to: (I) Separate the RFP; (2) award audit services for CAFR and related CAFR component units; and (3) award audit services for pension component units. The RFP included six (6) evaluation criteria consisting of the following: (I) Firm's Experience in Auditing Services; (2) Qualifications of Project Team; (3) Methodology and Approach; (4) Previous Similar Projects; (5) References Provided by Prior Clients; and (6) Fees. RFP No. 113-99/00 Page Three October 18, 2000 ANALYSIS (continued) Each member ranked the proposals, with the final ranking determined by the committee as follows: I. Awarding of audit services for CAFR and CAFR related component units: 1. KPMG 2. Ernst & Young II. A warding of audit services for pension component units: 1. Ernst & Young 2. KPMG 3. Rodriguez, Trueba & Co. The Committee recommended that the Administration negotiate with the top ranked firm ofKPMG for a consolidated price on the audit services for the CAFR and CAFR related components. The contract should not exceed $147,500 for the fiscal year ending September 30, 2000. If the first ranked firm carmot come to agreement, then the second ranked firm, Ernst & Young will be awarded the contract. Subsequent to the Committee meeting, the following issues were raised: 1. Should all component units be contracted for the Fiscal Year 1999/00 audit? It was confirmed that the pension component units have an existing audit firm contracted to do the Fiscal Year 99/00 audit. Therefore, it is recommended that the action of the evaluation committee for this portion of the award be rejected and not awarded. 2. Was public notice given as required by the Government in the Sunshine Law? No. The Government in the Sunshine Law required that proper and reasonable notice of the committee's meeting be provided. Therefore, it is recommended that all proposals received in response to RFP 113-99/00, be rejected. 3. Should we enter into an engagement with responsible and qualified Auditing firm now or wait for the reissuance of an RFP? We should do this now because of the time constraints of the City's reporting and continuing disclosure requirements. Even an expedited evaluation process would create an extremely short time frame for a new firm to become familiar with the City's financial systems and records, and complete the audit on a timely basis. Additionally, compressing this process would require an extraordinary level of support from the Finance Department during a time when many other priorities must be addressed. RFP No. 113-99/00 Page Four October 18, 2000 ANALYSIS (continued) 4. Should a new RFP for Auditing Services be issued? Yes. Although Section 287.057(1)(1), Florida Statutes, exempts Auditing services from a formal competitive sealed bid process, it is a good practice to competitive select Auditing services. Attached is the proposed Scope of Services and Evaluation Criteria to be used for the re-issuance of the RFP. The Administration expects to pursue this issuance in the spring of 200 I, with an anticipated award date of early summer. Based on the analysis contained herein, and the need for an audit of the City's General Purpose Financial Statements of the City Comprehensive Annual Financial Report (CAFR) for fiscal year ending September 30, 2000, the City Commission should authorize the Administration to enter into negotiations and contract with KPMG for auditing services for a one-year period. JMG:PDW:JJS:G~ 'MV'_W~'"~TI~.-