Amendment No. 1 to PSA Crowe Horwath, LLP &e6/12- 02012 2-'7 9 2--7
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AMENDMENT NO. 1
TO THE PROFESSIONAL SERVICES AGREEMENT
BETWEEN
THE CITY OF MIAMI BEACH, FLORIDA
AND
CROWE HORWATH LLP,
DATED JULY 25,2012
FOR PHASE II SERVICES RELATED TO AUDITING THE PROCESSEESS OF CERTAIN
REGULATORY DEPARTMENTS OR DIVISIONS
This Amendment No. 1 to the Agreement made and entered this 041day of (� ,2012, by
and between the City of Miami Beach,a Municipal Corporation existing under the laws of the State
of Florida (hereinafter referred to as CITY), having its principal offices at 1700 Convention Center
Drive, Miami Beach, Florida 33139, and CROWE HORWATH LLP., an Indiana Limited Liability
Partnership, whose address is 401 E Las Olas Blvd. Suite 1100, Ft. Lauderdale, Florida
33301(hereinafter referred to as Consultant).
RECITALS
WHEREAS,the Mayor and City Commission adopted Resolution No.2012-27927 on June
6, 2012, approving and authorizing the Mayor and City Clerk to execute a Professional Services
Agreement with Consultant for Professional Services for Services Related to Auditing the Processes
of Certain Regulatory Departments or divisions (the Agreement); and
WHEREAS, the Agreement provides for a Phase I and Phase II scope of services; and
WHEREAS,the City and Consultant proceeded with Phase I services(audit planning),in the
amount of$23,000, and now wish to proceed with Phase ll; and
WHEREAS, Section 2.1 of said Agreement states that the scope of services for Phase II of
the Project Plan will be negotiated during Phase I and, if the parties agree to proceed with Phase II,
it shall be done as an amendment to the Agreement.
NOW, THEREFORE, the parties hereto, and in consideration of the mutual promises,
covenants, agreements, terms, and conditions herein contained, and other good and valuable
consideration, the respect and adequacy are hereby acknowledged, do agree as follows:
1. ABOVE RECITALS
The above recitals are true and correct and are incorporated as part of this Amendment No.
1.
2. MODIFICATIONS
The Agreement is amended to include the scope of services for Phase II, which services
(including the fee and timeline(s), for such services, are attached and incorporated as,
respectively, Schedules"A-1", "A-2", and "A-3"to this Agreement.
3. OTHER PROVISIONS.
All other provisions of the Agreement, as amended, are unchanged.
4. RATIFICATION.
The CITY and Consultant ratify the terms of the Agreement,as amended by this Amendment
No. 1.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be
executed in their names by their duly authorized officials as of the date first set forth above.
ATTEST: CITY OF MIAMI BEACH
G Z By
y ,
City Clerk, . a r
Rafael Granado Mattie Herrera Bower
ATTEST: CONSULTANT:
CROWE HORWATH LLP
IWO By ' � �
TITLE: �,-- h� ITLE:
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rint Name Print Name
INCORP ORATED'
2
APPROVED AS TO
FORM& LANGUAGE
&FOR EXECUTION
City Attom Clate
F:\PURC\$ALL\Maria\Contracts\Crowe Horwah LLP\Amendment\Amendment Boiler Plate-September 2012.doc
EXHIBIT A-1
CITY OF MIAMI BEACH PHASE II SCOPE OF SERVICES FOR PROFESSIONAL SERVICES AGREEMENT
SERVICES RELATED TO AUDITING THE PROCESSEESS OF CERTAIN REGULATORY DEPARTMENTS
OR DIVISIONS
The purpose of this project plan is to detail the specific tasks and procedures that will be taken as part of Phase II—
Fieldwork and Reporting of our engagement with the City. The main objectives of phase 2 are:
• For processes that have been given priority(are within scope),gather information and document the current
state of processes using a standard format that uses process maps(diagrams)and narrative descriptions.
• For each process, identify and document control deficiencies and potential improvement opportunities.
Perform verification steps to ensure current processes and control deficiencies are properly understood and
documented.
• Identify best practices, where available, and review applicability to the City.
• Perform analysis of alternative process improvement approaches and create recommendations based on
the analysis. Document recommendations and perform review steps to ensure there is common agreement
that the recommendation adequately addresses the deficiency.
Though, we envision utilizing our standard operational and performance audit approach, as outlined in our
presentation to the City,that approach was designed to be fluid so that changes can be made to meet the specific
needs and goals of the City. Our plan for Phase II is provided below:
Phase II - Fieldwork
Adequate planning, proper supervision and efficient execution are the keys to an effective audit process. We will
issue a status report at the end of each week for the duration of fieldwork that will provide stakeholders with
information into key upcoming milestones and if we are on schedule with those milestones, project
accomplishments, issues, risks and the next steps of our audit. We have provided below a brief outline of
procedures that are common in operational audits.
Process and Internal Control Audit Approach
Our process and internal control audit approach is flexible to match our clients' different environments. This
ensures we will deliver a solution which meets the needs of management and the requirements of the AICPA and
GAGAS, as well as maximizes efficiency in getting there. Crowe's internal control assessment is built upon the
COSO (Committee of Sponsoring Organizations of the Treadway Commission) framework for internal controls.
Figure 1 -COSO Internal Control Model
N AND COMILINICATION
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CONTROL RISK ASSESSMENT
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Utilizing the COSO model will allow us to analyze and test each areas you have requested using a method and
criteria that is deemed the industry standard.
Process Interviews and walkthroughs
Our first task for Phase II is to conduct detailed process interviews with all City staff involved in the process being
analyzed. In addition,we would perform walkthroughs of each process to observe the process as it occurs. These
interviews will be comprehensive in nature and will incorporate as many staff involved in the process as possible to
get input on the process from as many employees as feasible. We will analyze the information communicated to us
and compare to the other interviews for this process and to the walkthroughs to ensure a consistent process is
being communicated. We will note any inconsistencies between the interviews and between our interviews and our
walkthrough. During the interviews, we will request additional information related to the current processes as
deemed necessary.
Documentation Analysis
In order to enhance our understanding of the current processes and internal controls of the processes under audit,
we will analyze the documentation collected at the entrance conference as well as in the interviews and
walkthroughs. Written policies and procedures (if any) will be reviewed during this task along with any forms,
checklists, etc... utilized by staff to assist with the process. These documents will be analyzed for proper controls
and compared to the information provided during our interviews and our walkthroughs to determine any differences
between the documented process and the actual process being performed. The documentation obtained will also
be compared to industry best practice. Based upon the results of our documentation analysis, we may require
limited follow-up interviews to verify information compiled during the documentation analysis stage of the project.
Document the Process
Once we have completed our interviews and reviewed any process documentation, we will draft a high level
process flowchart of each process. This flowchart will include any significant controls that exist in the process.We
envision using Microsoft Visio to complete the process flowcharts.
Process and Control Assessment
We will summarize our assessment of the current controls and processes of the functions under audit. This will
include an identification of the major functions, job responsibilities, and existing internal controls for each of the
areas under analysis. During this section, we will also assess the procedures that exist for each function under
audit and if these procedures appear to be followed. Based on this assessment,we will identify any process gaps
and control weaknesses. In addition, we will identify any repetitive processes or controls that could be leading to
inefficiencies.
Develop Findings and Recommendations
Findings will be developed and written using the standard reporting criteria included in Government Auditing
Standards.
One of the critical steps to ensuring that Miami Beach receives high quality reports is to verify the facts of all
findings that will be presented in our reports. Therefore, before any findings are drafted, we will ensure that the
facts surrounding the process or control are understood and agreed upon by us and the City.
Reporting
Draft Report and Exit Conference
We will develop and issue a draft report to Miami Beach for review. We will then plan to conduct an exit conference
with Miami Beach. At this meeting will walk through our conclusions, internal control assessment and
recommendations to (again) confirm the facts underlying any potential findings.
Final Report' -
F Based on comments fromlthe;Exit Conference and Miami Beach's management revieWof tt e:draft report,we will
revise and finalize the g
; report.We envision our report to include the fol.lowin sections,but:•ace flexible to modify this :� • 'ti
's needs:-. .
-structure to meet the Miami-Beach ,
_ • Executive Summary
• Background
• Objective, Scope and Methodology
• Findings and Recommendations
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EXHIBIT A-3
1. ADDITIONAL SCOPE OF SERVICES
Scope as set forth in Exhibit A-1
2. PAYMENT AND COMPENSATION
The scope of services described in this amendment shall be performed for a not-to-exceed amount of
$127,000. Invoicing shall be as referenced in the original agreement.
Compensation
Original Agreement $23,000
Amendment No. 1 $127,000
Total Revised Agreement $1509000
Table 1
Estimated Cost:
Process Estimate Range
Originally Proposed:
Fire Prevention Division
Inspections (night) $ 15,000
Permitting (new construction) 12,000
Code Compliance Division
Complaints 12,000
Inspections 15,000
Violations/fines 14,000
Parking Enforcement Division
Ticketing 10,000
Tows 12,000
Valet 10,000
Public Works Department
Permitting 12,000
Planning Department
Permitting 12,000
Concurrency/Impact fees 14,000
Special Master Process 14,000
Total Original Fees-Phase 11 $ 152,000
Discount on Originally Proposed Processes (25,000)
Total Original Fees-After Discount $ 127,000