2012-27927 Reso and Agreement RESOLUTION NO. 2012-27927
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, APPROVING AND
AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A
PROFESSIONAL SERVICES AGREEMENT, IN THE AMOUNT OF
$2390009 WITH CROWE HORWATH, LLP, FOR PHASE I SERVICES
RELATED TO AUDITING THE PROCESSES OF CERTAIN
REGULATORY CITY DEPARTMENTS OR DIVISIONS.
WHEREAS, at its regular meeting on May 9, 2012, the City Commission adopted Resolution
No. 2012-27905, waiving, by 5/7ths vote, the competitive bidding requirement and authorizing the City
Manager to negotiate a professional services agreement with a qualified firm for services related to
auditing the processes of certain regulatory departments or divisions in the City; and
WHEREAS, in conjunction with the waiver, the City Commission designated Commissioner
Deede Weithorn to work with the City Administration to develop a scope of work for the aforestated
services; and
WHEREAS, once developed, the City Commission directed that the proposed scope of work be
referred to the Finance and Citywide Projects Committee (the Committee) for further discussion, and
WHEREAS, at its regular meeting on May 17, 2012, the Committee approved upon the
proposed scope of services, and recommended that, notwithstanding the formal waiver of competitive
bidding, the Administration conduct an "informal" solicitation process, and which the Administration did,
by sending out a request for"Expressions of Interest" to certain identified firms; and
WHEREAS, the firm of Crowe Horwath, LLP (Crowe) was deemed to be the most qualified firm
pursuant to the aforestated informal solicitation process and, accordingly, the City and Crowe have
negotiated the attached Professional Services Agreement for Phase I services in the not to exceed
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amount of $23,000, related to auditing the processes for certain regulatory City departments or
divisions.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission approve and authorize the
Mayor and City Clerk to execute a Professional Services Agreement, in the amount of $23,000, with
Crowe Horwath, LLP, for Phase I services related to auditing the processes of certain regulatory City
departments or divisions.
PASSED and ADOPTED this day of �h�- , 2012.
ATTEST:
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* INCORP ORATED.
CITY CLERK � OR AS TO
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PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE.CITY-OF MIAMI BEACH
AND
CROWE HORWATH LLP
.FOR
SERVICES RELATED TO AUDITING THE PROCESSESS OF CERTAIN
REGULATORY DEPARTMENTS OR DIVISIONS
This Professional Services Agreement (Agreement°) is entered into this 25th day of July,
2012 (Effective Date), between the CITY OF MIAMI BEACH, FLORID& a municipal
corporation organized and existing under the laws of the State of'Florida, having its principal
offices at 1700 Convention Center Drive, Miami Beach, Florida, 33139 ("City"), and CROWE
HORWATH LLP., an Indiana Limited Liability Partnership, whose address is 401 -E Las Olas
Blvd. Suite 1100, Ft. Lauderdale, Florida 33301.
SECTION I
DEFINITIONS
Agreement: This Agreement between the City and Consultant, including any
exhibits and amendments thereto.
City Manager. The chief administrative officer of the City.
Consultant: For the purposes of this Agreement, Consultant shall be deemed to be
an independent contractor, and not an agent or employee of the City.
Services: All services, work and actions by the Consultant performed or
undertaken pursuant to the Agreement.
Fee: Amount paid to the Consultant as compensation for Services.
Risk Manager. The Risk Manager of the City, with offices-at 1700 Convention Center
Drive, Third Floor, Miami Beach, Florida :33139: -telephone number
(305)673-7000,Ext. 6435: and fax number.(305)873-7023.
SECTION 2
SCOPE-OF-SE RVICES (SERVICEfiI
2.1 In consideration of the Fee to be paid to Consultant by the City, Consultant shall
provide the work and services .described in Exhibit "X hereto (the Services). The
aforementioned Exhibit A details-only Phase I of the Project Plan.
The,scope of services for Phase 11 of the Project Plan will'be negotiated during Phase
1 and, if parties agree to proceed with Phase Il,-it shall be done as an amendment to
this Agreement.
2.2 Consultant's Services, and any deliverables incident thereto, shall be completed in
accordance with the timeline and/or schedule in Exhibit°A'-hereto.
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SECTION 3
TERM
The term of this Agreement (Term) shall commence upon execution of this Agreement by all
parties hereto, as set forth in the Effective Date on page 1 hereof, and shall terminate six (6)
months from such Effective Date (unless earlier terminated as otherwise provided in this
Agreement in).
Notwithstanding the Term provided herein, Consultant shall adhere to any specific timelines,
schedules, dates, and/or performance milestones for completion and delivery of the
Services, as same is/are set forth in the timeline and/or schedule referenced in Exhibit "A"
hereto.
SECTION 4
FEE
4.1 In consideration of the Services to be rovided Consultant shall be compensated for
P � P
Phase I, in the amount of 23,000, as specified in Exhibit "A" hereto.
-4.2 The fee is to be paid upon completion by Consultant and acceptance by the City, of
the Services in Phase I, as attached in Exhibit "A".
4.3 INVOICING
Upon receipt of an acceptable and approved invoice, payment(s) shall be made
within thirty (30) days for that portion (or those portions) of the Services satisfactorily
rendered (and referenced in the particular invoice).
Invoices .shall include a detailed description of the Services (or portions thereof)
provided, and shall be submitted to the City at the following address:
Attn: Patricia Walker, Chief Financial Officer
1700 Convention Center Drive, 3rd Floor
Miami Beach, Florida 33139
SECTION 5
TERMINATION
5.1 TERMINATION FOR CAUSE
If the Consultant shall fail to fulfill in a timely manner, or otherwise violates, any of the
covenants, agreements, or stipulations material to this Agreement, the City, through
its City Manager, shall thereupon have 'the right to terminate this Agreement for
cause. Prior to exercising its option to terminate for cause, the City shall notify the
Consultant of its violation of the particular term(s) of this Agreement, and shall grant
Consultant seven (7) business days to cure such default. If such default remains
uncured after seven (7) business days, the City may terminate this Agreement
without further notice to
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Consultant. Upon termination, the City shall be fully discharged from any and all
liabilities, duties, and terms arising out of, or by virtue of, this Agreement.
Notwithstanding the above, and subject to 8. below, the Consultant shall not be
relieved of liability to the City for damages sustained by the City by any breach
of the Agreement by the Consultant. The City, at its sole option and discretion,
shall be entitled to bring any and all legal/equitable actions that it deems to be in its
best interest in order to enforce the City's right and remedies against Consultant. The
City shall be entitled to recover all costs of such actions, including reasonable
attorneys'fees subject to the limitation of liability specified in 8. below.
5.2 TERMINATION FOR CONVENIENCE OF THE CITY
THE CITY MAY ALSO, THROUGH ITS CITY MANAGER, AND FOR ITS
CONVENIENCE AND WITHOUT CAUSE, TERMINATE THE AGREEMENT AT ANY
TIME DURING THE TERM BY GIVING WRITTEN NOTICE TO CONSULTANT OF
SUCH TERMINATION; WHICH SHALL BECOME EFFECTIVE FIFTEEN (15)
DAYS FOLLOWING RECEIPT BY THE CONSULTANT OF SUCH NOTICE. IF THE
AGREEMENT IS TERMINATED FOR CONVENIENCE BY THE CITY,
CONSULTANT SHALL BE PAID FOR ANY SERVICES SATISFACTORILY
PERFORMED UP TO THE DATE OF TERMINATION; FOLLOWING WHICH THE
CITY SHALL BE DISCHARGED FROM ANY AND ALL LIABILITIES, DUTIES, AND
TERMS ARISING OUT OF, OR BY VIRTUE OF., THIS AGREEMENT.
5.3 TERMINATION FOR INSOLVENCY
The City also reserves the right to terminate the Agreement in the event the
Consultant is placed either in voluntary or involuntary bankruptcy or makes an
assignment for the benefit of creditors. In such event, the right and obligations for
the parties shall be the same as provided for in Section 5.2.
SECTION 6
INDEMNIFICATION AND INSURANCE REQUIREMENTS
6.1 INDEMNIFICATION
Consultant agrees to indemnify and hold harmless the City of Miami Beach and its
officers, employees, agents, and contractors, from and against any and all actions
(whether at law or in equity), claims, liabilities, losses, and expenses, including, but not
limited to, attorneys'fees and costs, for personal or bodily injury, wrongful death, loss of
or damage to property, which may arise or be alleged to have arisen directly and
proximately from the negligent acts or willful misconduct of the Consultant, its officers,
employees., agents, contractors, or any other person or entity acting under Consultant's
control or supervision during Consultant's performance of the Services pursuant to this
Agreement. To that extent, the Consultant shall pay all such claims and losses and
shall pay all such costs and judgments which may issue from any lawsuit arising from
such claims and losses, and shall pay all costs and attorneys' fees expended by the
City in the defense of such claims and losses, including appeals.
The parties agree that one percent (1%) of the total compensation to Consultant -for
performance of the Services under this Agreement is the specific consideration from the
City to the Consultant for the Consultant's indemnity agreement. The provisions of this
Section 6.1 and of this indemnification shall survive termination or expiration of this
Agreement.
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6.2 INSURANCE REQUIREMENTS
The Consultant shall maintain and carry in full force during the Term, the following
insurance:
1. Consultant General Liability, in the amount of$1,000,000;
2. Consultant Professional Liability, in the amount of$200,000; and
3. Workers Compensation & Employers Liability, as required pursuant to Florida
Statutes.
The insurance must be furnished by insurance companies authorized to do business
in the State of Florida. All insurance policies must be issued by companies rated no
less than "B+" as to management and not less than "Class VI" as to strength by the
latest edition of Best's Insurance Guide, published by A.M. Best Company, Oldwick,
New Jersey, or its equivalent.
Consultant shall give the City at least thirty (30) days written notice prior of
termination, cancellation or reduction in coverage of any insurance policy required
herein.
Original certificates of insurance must be submitted to the City's Risk Manager for
approval (prior to any work and/or services commencing) and will be kept on file in the
Office of the Risk Manager.
The Consultant is also solely responsible for obtaining and submitting all insurance
certificates for any sub-consultants.
Compliance with the foregoing requirements .shall not relieve the Consultant of the
liabilities and obligations under this Section or under any other portion of this
Agreement.
The Consultant shall not commence any work and or services pursuant to this
Agreement until all insurance required under this Section has been obtained and
such insurance has been approved by the City's Risk Manager.
SECTION 7
LITIGATION JURISDICTIONIVENUE/JURY TRIAL WAIVER
This Agreement shall be construed in accordance with the laws of the State of Florida. This
Agreement shall be enforceable in Miami-Dade County, Florida, and if legal action is
necessary by either party with respect to the enforcement of any or all of the terms or
conditions herein, exclusive venue for the enforcement of same shall lie in Miami-Dade --
County, Florida. By entering into this Agreement, Consultant and the City expressly waive '
any rights either party may have to a trial by jury of any civil litigation related to or arising out
of this Agreement.
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SECTION 8
LIMITATION OF CITY'S LIABILITY
Except where it is judicially determined that Consultant acted with bad faith or intentional
misconduct, and subject to the indemnification obligations of Contractor specified in Section
6, neither the City nor Consultant's liability and the liability of their respective personnel shall
not exceed the fees actually paid to Consultant under this Agreement. This limitation of
liability shall apply to the fullest extend allowed by law, and shall apply to any alleged or
actual claim, liability or damages, including without limitation, claims, liabilities or damages
based in negligence or other tort, contract, warranty, fiduciary principles, statute or common
law. This provision shall survive termination of this Agreement in whole or in part.
SECTION 9
[INTENTIONALLY DELETED]
SECTION 10
GENERAL PROVISIONS
10.1 AUDIT AND INSPECTIONS
Upon reasonable verbal or written notice to Consultant, and at any time during normal
business hours (i.e. 9AM — 5PM, Monday through Fridays, excluding nationally recognized
holidays), and as often as the City Manager may, in his/her reasonable discretion and
judgment, deem necessary, there shall be made available to the City Manager, and/or such
representatives as the City. Manager may deem to act on the City's behalf, 'to audit,
examine, and/ or inspect, any and all other documents and/or records relating to all matters
covered by this Agreement. Consultant shall maintain any and all such records at its place
of business at the address set forth in the "Notices" section of this Agreement. Consultant
may retain one copy of all such documents and/or records and work product for up to seven
(7) years from termination or expiration of this Agreement.
10.2 [INTENTIONALLY DELETED]
10.3 ASSIGNMENT. TRANSFER OR SUBCONSULTING
Consultant shall not subcontract, assign, or transfer all or any portion of any work and/or
service under this Agreement without the prior written consent of the City Manager, which
consent, if given at all, shall be in the Manager's sole judgment and discretion. Neither this
Agreement, nor any term or provision hereof, or right hereunder, shall be assignable unless
as approved pursuant to this Se-Qtion, -and any attempt to make such assignment (unless
approved) shall be void.
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10.4 PUBLIC ENTITY CRIMES
Prior to commencement of the Services, the Consultant shall file a State of Florida Form
PUR 7068, Sworn Statement under Section 287.133(3)(a) Florida Statute on Public Entity
Crimes with the City's Procurement Division.
10.5 EQUAL EMPLOYMENT OPPORTUNITY
In connection with the performance of the Services, the Consultant shall not discriminate
against any employee or applicant for employment because of race, color, national origin,
religion, sex, ender identity, sexual orientation, disability, marital and familial status, or
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age.
10.6 CONFLICT OF INTEREST
The Consultant herein agrees -to adhere to and be governed by all applicable Miami-Dade
County Conflict of Interest Ordinances and Ethics provisions, as set forth in the Miami-Dade
County Code, and as may_be amended from time to time; and by the City of Miami Beach
Charter and Code (as some may be amended from time to time); both of which are
incorporated by reference herein as if fully set forth herein.
The Consultant covenants that it presently has no interest and shall not acquire any
interest, direct or indirectly, which could conflict in any manner or degree with the
performance of the Services. The Consultant further covenants that in the performance of
this Agreement, no person having any such interest shall knowingly be employed by the
Consultant. No member of or delegate to the Congress of the United States shall be
admitted to any share or part of this Agreement or to any benefits arising there from.
SECTION 11
NOTICES
All notices and communications in writing required or permitted hereunder, shall be
delivered personally to the representatives of the Consultant and the City listed below or
may be mailed by U.S. Certified Mail, return receipt requested, postage prepaid, or by a
nationally recognized overnight delivery service.
Until changed by notice in writing, all such notices and communications shall be addressed
as follows:
TO CONSULTANT: John Weber
Crowe Horwath LLP
401 .Las Olas Blvd. Suite 1100
Ft. Lauderdale, Florida, 33301
TO CITY: Patricia Walker, Chief Financial Officer
1700 Convention Center Drive, 3rd Floor
Miami Beach, Florida 33139
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Notice may also be provided to any other address designated by the party to receive notice if
such alternate address is provided via U.S. certified mail, return receipt requested, hand
delivered, or by overnight delivery. In the event an alternate notice address is properly provided,
notice shall be sent to such alternate address in addition to any other address which notice
would otherwise be sent, unless other delivery instruction as specifically provided for by the
party entitled to notice.
Notice shall be deemed given on the day on which personally served, or the day of receipt by
either U.S. certified mail or overnight delivery.
SECTION 12
MISCELLANEOUS PROVISIONS
12.1 CHANGES AND ADDITIONS
This Agreement cannot be modified or amended without the express written consent of the
parties. No modification, amendment, or alteration of the terms or conditions contained herein
shall be effective unless contained in a written document executed with the same formality
and of equal dignity herewith.
12.2 SEVERABILITY
If any term or provision of this Agreement is held invalid or unenforceable, the remainder of
this Agreement shall not be affected and every other term and provision of this Agreement
shall be valid and be enforced to the fullest extent permitted by law.
12.3 ENTIRETY OF AGREEMENT
The City and Consultant agree that this is the entire Agreement between the parties. This
Agreement supersedes all prior negotiations, correspondence, conversations, agreements or
understandings applicable to the matters contained herein, and there are no commitments,
agreements or understandings concerning the subject matter of this Agreement that are not
contained in this document. Title and paragraph headings are for convenient reference and
are not intended to confer any rights or obligations upon the parties to this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their appropriate officials, as of the date first entered above.
FOR CITY: CITY OF MIAMI BEACH, FLORIDA
ATTEST:
By:
City Clerk yor
* .INCORP ORATED:
FOR CONSULTANT: �i4G; . CROWE HORWATH LLP
H 26
ATTEST:
.By:
-SEWFetafy �l,/j,t/C/e )d6P!artner
Print Name / 'Print Name
CAUsers\PURCEstM\Desktop\PSA for Crowe Horwath.doc
APPROVED AS TO
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&FOR EXECUTION
City Attom Date
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Exhibit A
The purpose of this project plan is to detail the specific tasks and procedures that will be taken as part
of Phase I —Audit planning of Crowe Horwath LLP's ("Crowe") engagement with the City. The main
objective of phase 1 will be to finalize the scope and objectives for the audit and to develop specific
audit procedures to be performed. Though, Crowe envisions utilizing their standard operational and
performance audit approach, as outlined in their 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. Crowe's
plan for Phase I is provided below:
Phase I—Audit Planning
1. Entrance Conference
The first step of the engagement will be to conduct an entrance conference with City management and
other key project stakeholders. During The entrance conference Crowe will coordinate the project
timing, including scheduled meetings and deliverable due dates. In addition, Crowe will determine the
goals established by management which will be assessed during this project. Finally, during this
meeting, Crowe will present the major tools that they envision using during the engagement including a
project work plan and project management tools so that the City and project stakeholders will stay
abreast of the progress of the project.
2 Finalize Scope and Objectives
In conjunction with Miami Beach, Crowe will finalize the scope and objectives to be audited. Due to
the variable nature of the potential scope and objectives of performance audits, Crowe, and Miami
Beach, need to have an understanding of the nature and profile of the program or process to be
audited and the goals of Miami Beach. A clear definition of the Audit Scope and Audit Objectives will
be the product and deliverable for this step.
Miami Beach provided a listing of processes and departments. Therefore, Crowe have a preliminary
understanding of the areas the City desires to cover. Specifically, Crowe will plan to perform
procedures over the following processes:
• Fire Inspection process
• Fire Prevention Division permitting process
• Public Works Department permitting process
• Special Master process
In addition, to the 4 processes listed above, the City also has other Departments/Divisions that are
desired to be covered for this project. These Departments/Divisions are as follows:
• Code Compliance Division*
• Parking Enforcement Division*
• Planning Department
As part of this task, Crowe will work with the City to ensure that the four processes listed above as
still desired to be part of the project scope. In addition, Crowe will drill down into the Department
and Divisions fisted above to determine what specific process(es), the City desires to cover as part
of this project.
Once the processes have been confirmed, Crowe will work with the City to finalize the project goals
and objectives. The City provided three main objectives for the project. These objectives are listed
below:
• Review organizational structure and functions
• Review department/division processes(including uses of technology)
o Review internal controls
o Review department/division operations
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• Develop recommendations on:process improvement,internal controls,efficiencies,etc.
3. Assess Risk and Significance
Performance audit risk, similar to the risk in financial audits, is the risk that the auditor will not develop
appropriate tests or gather sufficient competent evidential matter to support findings, conclusions or
recommendations,or that there will be intentional misrepresentation or fraud related to the audit scope
or objectives. Crowe will assess risk around the audit scope and objectives to assist in the design of
appropriate audit procedures. To determine significant risks, Crowe will perform initial interviews with
City management and other key project stakeholders to determine what they view as the major issues
or concerns over the processes that part of this engagement. In addition, Crowe will review previous
audit reports (both internal and external)to determine the nature and extent of any findings that relate
to or affect the processes and/or departments covered by this project.
4. Develop Audit Program
In a performance audit, the audit must identify the criteria that will support the assertions to be tested
as well as determine what the appropriate measurement may be for the significant criterion. The last
task of Phase I will be to develop the specific procedures to be performed. Utilizing the scope and
objectives from task 2 and the risks obtained from task 3, Crowe will design procedures to analyze
the overall structure of each process along with a control and operational analysis of each process
covered under this project. Utilizing the risks obtained in task 3 will allow audit steps to be focused in
areas more significant to the objectives of the audit.
Once the audit program is drafted, Crowe will provide a draft of the program to the City for review
and concurrence. Once the plan is approved, Crowe will initiate Phase 2 of the engagement.
Deliverables/Output of Phase 1 will include:
• Project/Communication Plan detailing
• Objectives
• Scope
• Audit program (i.e. procedures to be performed)
• Reporting protocol
• Status report template
• Escalation and issue protocol
• Departmental material request letter
Expected Phase I timeline:
7Phasel ntrance Conference
Determine Scope and Objectives
Assess Risk and Significance _
Develop Audit Program
Fixed Price Cost for Phase I - $23,000
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2.'792-7
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 //"Ploy of 0 ,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 II; 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 Il,
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.
scanned
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 lit 2 By
City Clerk, . a r,
Rafael Granado Mattie Herrera Bower
ATTEST: CONSULTANT:
CROWE HORWATH LLP
By r
TITLE: ITLE:
120 G C� e :::L,.4, -t
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* INCORP ORATED:
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EXHIBIT A-1
CITY OF MIAMI BEACH PHASE 11 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.
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Figure 1 -COSO Internal Control Model
CONTROL
CONTROL RISK AsSESSMENT
•O
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.
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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
I 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
ifacts surrounding the process or control are understood and agreed upon by us and the City.
I
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.
S
Final Report
Based on comments from the Exit Conference and Miami Beach's management review of the draft report,we will
revise and finalize the report. We envision our report to include the following sections, but are flexible to modify this
structure to meet the Miami Beach's needs:
• 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 $150,000
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
Conc u rrency/Im pact fees 14,000
Special Master Process 14,000
Total Original Fees-Phase H $ 152,000
Discount on Originally Proposed Processes (25,000)
Total Original Fees-After Discount $ 127,000