2018-30263 ResolutionRESOLUTION NO.
2018- 30263
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER,
PURSUANT TO REQUEST FOR QUALIFICATIONS NO. 2017 - 290 -WG, FOR CITY WIDE
FRAUD RISK ASSESSMENT; AUTHORIZING THE ADMINISTRATION TO ENTER INTO
NEGOTIATIONS WITH RSM US LLP, AS THE TOP RANKED PROPOSER; FURTHER, IF
THE ADMINISTRATION IS NOT SUCCESSFUL IN NEGOTIATING AN AGREEMENT WITH
RSM US LLP, AUTHORIZING THE ADMINISTRATION TO ENTER INTO NEGOTIATIONS
WITH PLANTE AND MORAN, PLLC, AS THE SECOND RANKED PROPOSER; FURTHER,
IF THE ADMINISTRATION IS NOT SUCESSFUL IN NEGOTIATING AN AGREEMENT WITH
PLANTE AND MORAN, PLLC; AUTHORIZING THE ADMINISTRATION TO ENTER INTO
NEGOTIATIONS WITH BAKER TILLY VIRCHOW KRAUSE, LLP, AS THE THIRD RANKED
PROPOSER; AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE
AN AGREEMENT UPON CONCLUSION OF SUCCESSFUL NEGOTIATIONS BY THE
ADMINISTRATION.
WHEREAS, on July 26, 2017, the Mayor and City Commission authorized the issuance
of Request for Qualifications (RFQ) 2017 - 290 -WG for City Wide Fraud Risk Assessment; and
WHEREAS, on July 27, 2017, RFQ No. 2017 - 290 -WG for City Wide Fraud Risk
Assessment (the RFQ) was issued; and
WHEREAS, on December 22, 2017, the City received proposals from the following nine
-(9) firms: Baker Tilly Virchow Krause, LLP, Berkeley Research Group, LLC, Carr, Riggs and
Ingram, LLC, Exiger LLC, Marsh Minick, P.C., Marcum LLP, Plante and Moran, PLLC, RSM US
LLP and Sierra Forensic Group; and
WHEREAS, Exiger LLC, asked to be withdrawn from further consideration; and
WHEREAS, the Evaluation Committee appointed by the City Manager pursuant to LTC#
056-2018 convened on March 9, 2018, to consider the responsive proposals received; and
WHEREAS, the Committee was provided an overview of the project, information relative
to the City's Cone of Silence Ordinance and the Government Sunshine Law, general information
on the scope of services and a copy of each proposal; and
WHEREAS, the Committee was instructed to score and rank each proposal pursuant to
the evaluation criteria established in the RFQ; and
WHEREAS, the evaluation process resulted in the ranking of proposers as follows: RSM
US LLP, as the top ranked proposer; Plante and Moran, 'PLLC, as the second ranked proposer;
Baker Tilly Virchow Krause, LLP, as the third ranked proposer; Berkeley Research Group, LLC,
as the forth ranked proposer; Marcum LLP, as the sixth ranked proposer; Sierra Forensic
Group, as the seventh ranked proposer; and Marsh Minick P.C., as the eighth ranked proposer;
and
WHEREAS, after reviewing all of the submissions and the Evaluation Committee's
rankings, the City Manager exercised his due diligence and is recommending that the
Administration be authorized to enter into negotiations with RSM US LLP, as the top ranked
proposer; and if unsuccessful in negotiating an agreement with RSM US LLP; authorizing the
Administration to enter into negotiations with Plante and Moran, PLLC, as the second ranked
proposer; and if unsuccessful in negotiating an agreement with Plante and Moran, PLLC;
authorizing the Administration to enter into negotiations with Baker Tilly Virchow Krause, LLP,
as the third ranked proposer; and further authorizing the Mayor and City Clerk to execute an
agreement upon conclusion of successful negotiations.
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 hereby accept the recommendation of the City Manager, pursuant to Request -for
Qualifications No. 2017 - 290 -WG, for City Wide Fraud Risk Assessment; authorize the
Administration to enter into negotiations with RSM US LLP, as the top ranked proposer; further,
if the Administration is not successful in negotiating an agreement with RSM US LLP; authorize
the Administration to enter into negotiations with Plante and Moran, PLLC, as the second
ranked proposer; further, if the Administration is not successful in negotiating an agreement with
Plante and Moran, PLLC; authorize the Administration to enter into negotiations with Baker Tilly
Virchow Krause, LLP, as the third ranked proposer; and further authorize the Mayor and City
Clerk to execute an agreement upon conclusion of successful negotiations by the
Administration.
PASSED AND ADOPTED this 1/ day of Apri 1 2018.
ATTEST:
R FAEL E. GRANA O, CITY CLERK
T:\AGENDA \2016 \01 January\RFQ2017 - 163 -WG Underwriting Services \RFQ2017 - 163 -WG- RESO v2 11 17 17,doc
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
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City Attorney (244, Date
MAM BEA:H
Resolutions - C7 Q
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Jimmy L. Morales, City Manager
DATE: April 11, 2018
SUBJECT A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY
MANAGER, PURSUANT TO REQUEST FOR QUALIFICATIONS NO. 2017- 290-WG,
FOR CITY WIDE FRAUD RISK ASSESSMENT; AUTHORIZING THE
ADMINISTRATION TO ENTER INTO NEGOTIATIONS WITH RSM US LLP, AS THE
TOP RANKED PROPOSER; FURTHER, IF THE ADMINISTRATION IS NOT
SUCCESSFUL IN NEGOTIATING AN AGREEMENT WITH RSM US LLP,
AUTHORIZING THE ADMINISTRATION TO ENTER INTO NEGOTIATIONS WITH
PLANTE AND MORAN, PLLC, AS THE SECOND RANKED PROPOSER;
FURTHER, IF THE ADMINISTRATION IS NOT SUCCESSFUL IN NEGOTIATING
AN AGREEMENT WITH PLANTE AND MORAN, PLLC; AUTHORIZING THE
ADMINISTRATION TO ENTER INTO NEGOTIATIONS WITH BAKER TILLY
VIRCHOW KRAUSE, LLP, AS THE THIRD RANKED PROPOSER; AND FURTHER
AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT
UPON CONCLUSION OF SUCCESSFUL NEGOTIATIONS BY THE
ADMINISTRATION.
RECOMMENDATION
Adopt the Resolution.
ANALYSIS
The City's recent fraud concerning the missing $3.6 million from improper ACH disbursements
triggered a separate audit and fraud assessment of the City's Treasury and ACH disbursements by
an outside firm, BDO Consulting. During their review they identified potential vulnerabilities in other
departments and functions of the City. The consulting firm recommerrfded that in order to fully
understand, identify, assess and evaluate the City's overall fraud risk, that the City should have a
city -wide fraud risk assessment performed and mitigating internal controls, procedures; and policies
should be documented and implemented.
As a result of the report presented to the Audit Committee meeting on May 22, 2017, the Committee
requested the City seek an external auditor (consultant) to perform a City wide risk assessment. The
Audit Committee assisted with the scope preparation and was to participate in the selection process.
The selected consulting firm shall perform City wide fraud risk assessment which should include:
Identifying inherent fraud risks affecting the city operations
Assessing the likelihood and impact of inherent fraud risks
Determining fraud risk tolerance
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• Examining the suitability of existing fraud controls and prioritizes residual fraud risks
• Documenting the city's fraud risk profile.
This assessment was to cover all areas of the City operations with the focus on fraud risks. High risk
areas identified will be used by the internal audit to target the future planning of audits. Additionally,
the deliverables would include a report summarizing the above points and providing the City with
those areas where the City is most vulnerable to fraud and what activities put it at the greatest risk.
To seek proposals for the desired services, the Administration prepared Request for Qualifications
2017- 290 -WG for City Wide Fraud Risk Assessment.
RFQ PROCESS
On July 26, 2017, the Mayor and City Commission authorized the issuance of Request for
Qualifications (RFQ) 2017 - 290 -WG for City Wide Fraud Risk Assessment. RFQ responses were
due and received on July 27, 2017. The Procurement Department issued solicitation notices to 1640
firms utilizing publicpurchase.com. 116 prospective proposers accessed the advertised solicitation.
The City received proposals from the following nine (9) firms: Baker Tilly Virchow Krause, LLP,
Berkeley Research Group, LLC, Carr, Riggs and Ingram, LLC, Exiger LLC, Marsh Minick, P.C.,
Marcum LLP, Plante and Moran, PLLC, RSM US LLP and Sierra Forensic Group.
Subsequent to the receipt of proposals, Exiger LLC, requested its proposal be withdrawn from
consideration.
The Evaluation Committee appointed by the City Manager pursuant to LTC# 056 -2018 convened on
March 9, 2018, to consider the responsive proposals received. The Committee comprised of Mark
Coolidge, Interim Internal Auditor, Office of Internal Audit, City of Miami Beach, Marc Gidney, CPA,
Audit Committee, Bryan Rosenfeld, CPA, Audit Committee, Ronald Starkman, Chair, Audit
Committee, Deede Weithorn, CPA, Audit Committee and John Woodruff, Director, Finance
Department, City of Miami Beach.
The Committee was provided an overview of the project, information relative to the City's Cone of
Silence Ordinance and the Government Sunshine Law. The Committee was also provided with
general information on the scope of services and a copy of each proposal. The Committee was
instructed to score and rank each proposal pursuant to the evaluation criteria established in the RFQ.
The evaluation process resulted in the ranking of proposers as indicated in Attachment A, in the
following order:
1st RSM US LLP
2nd Plant and More, PLLC
3rd Baker Tilly Virchow Krause, LLP
4th Berkeley Research Group, LLC
5th Marcum LLP
6th Carr, Riggs and Ingram, LLC
7th Sierra Forensic Group
8th Marsh Minick P.C.
A brief description of the three top- ranked proposals, as provided in each firm's proposal submittal,
fol lows.
RSM US
RSM is a large audit, tax, and consulting firm which combines local presence and national strength
that assures that the City will receive constructive advice from experienced professionals, prompt
esponses to its needs and questions, and access to a wide array of subject matter experts. Their
TiBublic sector practice is the largest industry group of their Southeast region, serving hundreds of
entities, including counties, cities and authorities, and their component units.
646
As previous external auditors for the City, they have become very familiar with our organization and
culture. This knowledge will enable them to provide meaningful insights while assessing City.
Plante and Moran
Plante Moran, is one of the largest certified public accounting and management consulting firms in
the nation. With a history spanning more than 92 years, their firm provides clients with financial,
human capital, operations improvement, strategic planning, technology selection and implementation,
cybersecurity and risk management services.
Plante Moran has significant experience providing strategic consulting services to municipal
governments in the State of Florida. Through these experiences they have gained strong
understanding as to how municipal operations function and, as a result, a strong understanding of the
underlying business processes that will be critical in assessing associated risks.
Baker Tilly Virchow Krause
Baker Tilly offers the resources of a nationally recognized, full - service accounting and advisory firm.
They offer the City a team of highly experienced fraud, risk and government agency professionals
with the level of technical capability and subject matter expertise required to help the City
successfully guard against fraud risk and improve existing controls.
Between all practice areas, they employ more than 490 qualified professionals who stand ready to
assist the City, of which over 50 are certified fraud examiners (CFEs). Over 100 of those
professionals specialize in government agency fraud risk assessments, with the remainder serving
clients across diverse other industry verticals. With fraud risk assessments and government agencies
being their largest areas of focus.
CONCLUSION
After reviewing all of the submissions and the Evaluation Committee's rankings and commentary, I
concur with the Evaluation Committee and find RSM US LLP to be the best qualified firm for the
project. RSM US LLP presented strong data analytic and fraud assessment capabilities, and
addressed the importance of fraud awareness and avoidance training for City staff and proposed a
team that has first -hand knowledge of the City.
Therefore, I recommend that the Mayor and City Commission approve the Resolution authorizing the
Administration to enter into negotiations with RSM US LLP, as the top ranked proposer; and if
unsuccessful in negotiating an agreement with RSM US LLP; authorizing the Administration to enter
into negotiations with Plante and Moran, PLLC, as the second ranked proposer; and if unsuccessful
in negotiating an agreement with Plante and Moran, PLLC; authorizing the Administration to enter
into negotiations with Baker Tilly Virchow Krause, LLP, as the third ranked proposer; and further
authorizing the Mayor and City Clerk to execute an agreement upon conclusion of successful
negotiations.
KEY INTENDED OUTCOMES SUPPORTED
Strengthen Internal Controls To Achieve More Accountability
FINANCIAL INFORMATION
Grant funding will not be utilized as part of this project.
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Legislative Tracking
Internal Audit/Procurement
ATTACHMENTS:
Description
Aftachment A
Resolution
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RFQ 2018 - 290 -WG for
Citywide Fraud Risk
Assessment
Baker Tilly Virchow Krause, LLF
Berkeley Research Group, LLC
Carr Riggs and Ingram, LLC
Marcum LLP
Marsh Minick P.C.
Plante Moran, PLLC
RSM US LLP
Sierra Forensic Group