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Page 1 COUNTY OF OTSEGO MICHIGAN BUDGET AND FINANCE COMMITTEE REQUEST FOR PROPOSALS (RFP 2025-10) FOR PROFESSIONAL AUDITING SERVICES 225 West Main Street Gaylord, Michigan 49735 ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 2 TABLE OF CONTENTS I. INTRODUCTION A. General Information B. Term of Engagement C. Subcontracting II. NATURE OF SERVICES REQUIRED A. General B. Scope of Work to be Performed C. Auditing Standards to be Followed D. Reports to be Issued E. Special Considerations F. Working Paper Retention and Access to Working Papers III. DESCRIPTION OF THE GOVERNMENT A. Contact Person B. Background Information C. Fund Structure D. Budgetary Basis of Accounting E. Federal Financial Assistance F. Pension Plans G. Component Units H. Joint Ventures I. Magnitude of Finance Operations J. Computer Systems K. Availability of Prior Reports and Working Papers IV. TIME REQUIREMENTS A. Proposal Calendar B. Notification and Contract Dates C. General Timeframe of Audit D. Schedule for the 2024 Fiscal Year Audit 1. Interim Work 2. Detail Audit Plan and Programs 3. Fieldwork 4. Draft Reports ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 3 V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department and Clerical Assistance B. Work Area, Telephone, Photocopying and FAX Machines C. Report Preparation VI. PROPOSAL REQUIREMENTS A. General Requirements 1. Inquiries 2. Submission of Proposals B. Technical Proposal 1. General Requirements 2. Independence 3. License to Practice in Michigan 4. Firm Qualifications and Experience 5. Partner, Supervisory and Staff Qualifications and Experience 6. Prior Engagements with the County of Otsego 7. Similar Engagements with Other Government Entities 8. Specific Audit Approach 9. Identification of Anticipated Potential Audit Problems 10. Report Format C. Sealed Dollar Cost Bid 1. Total All-Inclusive Maximum Price 2. Rates by Partner, Specialist, Supervisory and Staff Level Times Hours Anticipated for Each 3. Out-of-pocket Expenses in the Total All-inclusive Maximum Price 4. Rates for Additional Professional Services 5. Manner of Payment ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 4 VII. EVALUATION PROCEDURES A. Budget and Finance Committee B. Review of Proposals C. Evaluation Criteria 1. Mandatory Elements 2. Technical Qualifications 3. Price D. Final Selection E. Right to Reject Proposals APPENDICES A. Copy of 2022 Audit Report, including Findings and Recommendations B. Proposer Guarantees C. Proposer Warranties D. Format for Schedule of Professional Fees and Expenses to Support the Total All-Inclusive Maximum Price ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 5 COUNTY OF OTSEGO REQUEST FOR PROPOSALS I. INTRODUCTION A. General Information The COUNTY OF OTSEGO is requesting proposals from qualified firms of certified public accountants to audit its financial statements for the fiscal year ending December 31, 2024. This audit is to be performed in accordance with generally accepted auditing standards, the standards set forth for financial audits in the General Accounting Office's (GAO) Government Auditing Standards, the provisions of the federal Single Audit Act of 1984 (as amended in 1996) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance); the OMB Compliance Supplement; the AICPA Audit Guide for Audits of State and Local Governmental Units; and applicable OMB Circulars, audit standards, and audit guides. There is no expressed or implied obligation for the COUNTY OF OTSEGO to reimburse responding firms for any expenses incurred in preparing proposals in response to this request. Any inquiries concerning the request for proposals prior to or after the proposal conference should be addressed to Morgan Kwapis, Finance Director. To be considered, six copies of a proposal must be received by Morgan Kwapis, Finance Director, at 225 West Main Street by 10a.m. on July 14, 2025. Proposals will be opened at 12 (noon), in Room 100, 225 West Main Street. The COUNTY OF OTSEGO reserves the right to reject any or all proposals submitted. Proposals will be evaluated by the Budget and Finance Committee. During the evaluation process, the Budget and Finance Committee and the COUNTY OF OTSEGO reserve the right, where it may serve the COUNTY OF OTSEGO's best interest, to request additional information or clarifications from proposers, or to allow corrections of errors or omissions. At the discretion of the COUNTY OF OTSEGO or the Budget and Finance Committee, firms submitting proposals may be requested to make oral presentations as part of the evaluation process. ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 6 The COUNTY OF OTSEGO reserves the right to retain all proposals submitted and to use any ideas in a proposal regardless of whether that proposal is selected. Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposals, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the COUNTY OF OTSEGO and the firm selected. It is anticipated the selection of a firm will be completed by July 22, 2025. Following the notification of the selected firm it is expected a contract will be executed between both parties no later than July 31, 2025. B. Term of Engagement A one-year contract is contemplated, subject to recommendation of the Budget and Finance Committee, the satisfactory negotiation of terms (including a price acceptable to both the COUNTY OF OTSEGO and the selected firm), and the concurrence of the Board of Commissioners. C. Subcontracting Firms submitting proposals are encouraged to consider subcontracting portions of the engagement to small audit firms or audit firms owned and controlled by socially and economically disadvantaged individuals. If this is to be done, that fact, and the name of the proposed subcontracting firms, must be clearly identified in the proposal. Following the award of the audit contract, no additional subcontracting will be allowed without the express prior written consent of the COUNTY OF OTSEGO. II. NATURE OF SERVICES REQUIRED A. General The COUNTY OF OTSEGO is soliciting the services of qualified firms of certified public accountants to audit its financial statements for the fiscal year ending December 31, 2024.This audit is to be performed in accordance with the provisions contained in this request for proposals. ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 7 B. Scope of Work to be Performed The COUNTY OF OTSEGO desires the auditor to express an opinion on the fair presentation of its basic financial statements in conformity with generally accepted accounting principles. The auditor shall also be responsible for performing certain limited procedures involving required supplementary information required by the Governmental Accounting Standards Board as mandated by generally accepted auditing standards. C. Auditing Standards To Be Followed To meet the requirements of this request for proposals, the audit shall be performed in accordance with generally accepting auditing standards as set forth by the American Institute of Certified Public Accountants, the standards for financial audits set forth in the U.S. General Accounting Office's Government Auditing Standards, the provisions of the Single Audit Act of 1984 (as amended in 1996) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance); the OMB Compliance Supplement; the AICPA Audit Guide for Audits of State and Local Governmental Units; and applicable OMB Circulars, audit standards, and audit guides. D. Reports to be Issued Following the completion of the audit of the fiscal year's financial statements, the auditor shall issue: 1. A report on the fair presentation of the financial statements in conformity with generally accepted accounting principles, including an opinion on the fair presentation of the supplementary schedule of expenditures of federal awards “in relation to” the audited financial statements. 2. A report on compliance and internal control over financial reporting based on an audit of the financial statements 3. A report on compliance and internal control over compliance applicable to each major federal program. ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 8 In the required reports on compliance and internal controls, the auditor shall communicate any reportable conditions found during the audit. A reportable condition shall be defined as a significant deficiency in the design or operation of the internal control structure, which could adversely affect the organization's ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements. Reportable conditions that are also material weaknesses shall be identified as such in the report. Nonreportable conditions discovered by the auditors shall be reported in a separate letter to management, which shall be referred to in the reports on compliance and internal controls. The report on compliance and internal controls shall include all material instances of noncompliance. All nonmaterial instances of noncompliance shall be reported in a separate management letter, which shall be referred to in the report on compliance and internal controls. Irregularities and illegal acts. Auditors shall be required to make an immediate, written report of all irregularities and illegal acts or indications of illegal acts of which they become aware to the following parties: Matt Barresi County Administrator Morgan Kwapis Finance Director Brett McVannel Chairman of the Board Reporting to the audit committee. The Budget and Finance Committee shall serve as the audit committee. The primary contact person shall be Morgan Kwapis, Finance Director. Auditors shall assure themselves that the COUNTY OF OTSEGO's Budget and Finance Committee is informed of each of the following: 1. The auditor's responsibility under generally accepted auditing standards 2. Significant accounting policies 3. Management judgments and accounting estimates 4. Significant audit adjustments 5. Other information in documents containing audited financial statements ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 9 6. Disagreements with management 7. Management consultation with other accountants 8. Major issues discussed with management prior to retention 9. Difficulties encountered in performing the audit E. Special Considerations The Schedule of Expenditures of Federal Awards and related auditor's report, as well as the reports on compliance and internal controls are to be prepared by the auditor and issued as part of the audited financial statements. A copy of the COUNTY OF OTSEGO's most recent financial statement audit, which includes a list of findings and recommendations, is attached to this document (Appendix The COUNTY OF OTSEGO may request that the auditor maintain fixed asset and depreciation schedules. F. Working Paper Retention and Access to Working Papers All working papers and reports must be retained, at the auditor's expense, for a minimum of five years, unless the firm is notified in writing by the COUNTY OF OTSEGO of the need to extend the retention period. The auditor will be required to make working papers available, upon request, to the following parties or their designees: COUNTY OF OTSEGO Federal Cognizant Agency Parties designated by the federal or state governments or by the COUNTY OF OTSEGO as part of an audit quality review process Auditors of entities of which the COUNTY OF OTSEGO is a subrecipient of grant funds In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance. ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 10 III. DESCRIPTION OF THE GOVERNMENT A. Contact Person The auditor's principal contact with the COUNTY OF OTSEGO will be Morgan Kwapis, Finance Director, who will coordinate the assistance to be provided by the COUNTY OF OTSEGO to the auditor. B. Background Information The COUNTY OF OTSEGO serves an area of approximately 527 square miles with a population of approximately 25,000. The COUNTY OF OTSEGO's fiscal year begins on January 1st and ends on December 31st. The COUNTY OF OTSEGO provides the following services to its citizens: General government Public Safety Recreation and Culture Economic Development Transit Services to the Elderly Veterans Housing The COUNTY OF OTSEGO has a total payroll of approximately $6,800,000, covering 175 employees. The COUNTY OF OTSEGO is organized into several different departments and agencies. The accounting and financial reporting functions of the COUNTY OF OTSEGO are centralized, with the exception of the Otsego County Library. More detailed information on the government and its finances can be found in the attached audit report. ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 11 C. Fund Structure The COUNTY OF OTSEGO uses the following fund types and account groups in its financial reporting: Number of Number With Individual Legally Adopted Fund Type Funds Annual Budgets General fund 4 4 Special revenue funds 25 25 Debt service funds 1 1 Capital projects funds 6 6 Enterprise funds 10 10 Internal service funds 4 4 Pension (and other employee benefits) trust funds 1 0 Agency funds 3 0 Discreetly presented component units 3 3 Blended component units 1 1 D. Budgetary Basis of Accounting The COUNTY OF OTSEGO prepares its budgets on a basis consistent with generally accepted accounting principles. E. Federal Awards During the fiscal year to be audited, the COUNTY OF OTSEGO received federal awards that are consistent with the previous fiscal year. F. Pension Plans The COUNTY OF OTSEGO participates in the following pension plan: Municipal Employees Retirement System (MERS), Multiple Employer Defined Benefit Plan, Multiple Employer Defined Contribution Plan and a MERS Hybrid Plan, which combines the features of a defined benefit and a defined contribution plan. ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 12 G. Component Units The COUNTY OF OTSEGO is defined, for financial reporting purposes, in conformity with the Governmental Accounting Standards Board's Codification of Governmental Accounting and Financial Reporting Standards, Section 2100. Using these criteria, component units are included in the COUNTY OF OTSEGO's financial statements. The management of the COUNTY OF OTSEGO identified the following component units for inclusion in the COUNTY OF OTSEGO's financial statements: Audited Name of Entity Fiscal Year End Separately Audit Firm Otsego County Commission on Aging 9/30/24 Yes Dan Smith, CPA Otsego County 12/31/24 No* Otsego County Ambulance Corp. 12/31/24 No* Otsego County Road Commission 12/31/24 Yes Vredeveld Haefner LLC * This component unit is to be audited as part of the audit of the COUNTY OF OTSEGO's financial statements. The auditors of the component units are contractually obligated to provide information needed for the audit of the COUNTY OF OTSEGO. H. Joint Ventures The COUNTY OF OTSEGO participates in joint ventures with other governments, as follows: Northwest Michigan Community Health Agency Michigan Technical Education Center (M-TEC) North Country Community Mental Health ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 13 I. Magnitude of Finance Operations The finance department is headed by Morgan Kwapis and consists of four employees. The County Administrator serves as the Chief Financial Officer. The principal functions performed and the number of employees assigned to each are as follows: Function Number of Employees Finance Clerk 1 Deputy Finance Director 1 Finance Director 1 County Administrator 1 J. Computer Systems The COUNTY OF OTSEGO uses BSA software for its general ledger, accounts payable, and payroll functions. BSA was installed in July 2008. K. Availability of Prior Audit Reports The 2022 audit report is included in this document at Appendix A. Interested proposers who wish to review audit reports from prior years should contact Morgan Kwapis. The COUNTY OF OTSEGO will use its best efforts to make prior audit reports available to proposers to aid their response to this request for proposals. IV. TIME REQUIREMENTS A. Proposal Calendar The following is a list of key dates up to and including the date proposals are due to be submitted: Request for proposal issued July 3, 2025 Due date for proposals July 14, 2025 Proposals evaluated by Budget & Finance Committee July 16, 2025 ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 14 B. Notification and Contract Dates Firm selected by Board of Commissioners July 22, 2025 Selected firm notified July 22, 2025 Contract date no later than July 31,2025 C. General Timeframe of Audit The COUNTY OF OTSEGO will have all records ready for audit and all management personnel available to meet with the firm's personnel no later than August 1, 2025. D. Schedule for the 2024 Fiscal Year Audit Each of the following should be completed by the auditor no later than the dates indicated. 1. Detailed Audit Plan The auditor shall provide the COUNTY OF OTSEGO by August 15, 2025, both a detailed audit plan and a list of all schedules to be prepared by the COUNTY OF OTSEGO. 2. Fieldwork The auditor shall complete all fieldwork by September 30, 2025. 3. Draft Reports The auditor shall have drafts of the audit report[s] and recommendations to management available for review by the Budget and Finance Committee and the County Administrator by October 15, 2025. V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Finance Department and Clerical Assistance The finance department staff and responsible management personnel will be available during the audit to assist the firm by providing information, ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 15 documentation and explanations. The preparation of confirmations will be the responsibility of the COUNTY OF OTSEGO. B. Work Area, Telephones, Photocopying and FAX Machines The COUNTY OF OTSEGO will provide the auditor with reasonable work space, desks and chairs. The auditor will also be provided with access to one telephone lines, photocopying facilities and FAX machines subject to the following restrictions: Use of work space, photocopying, and telecommunications equipment is limited to activity related to the County of Otsego’s audit. C. Report Preparation Report preparation, editing and printing shall be the responsibility of the auditor. VI. PROPOSAL REQUIREMENTS A. General Requirements 1. Inquiries Inquiries concerning the request for proposals and the subject of the request for proposals must be made to: Morgan Kwapis Otsego County Finance Director 225 West Main Gaylord, MI 49735 (989) 731-7527 CONTACT WITH PERSONNEL OF THE COUNTY OF OTSEGO OTHER THAN THE FINANCE DIRECTOR REGARDING THIS REQUEST FOR PROPOSALS MAY BE GROUNDS FOR ELIMINATION FROM THE SELECTION PROCESS. ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 16 2. Submission of Proposals The following material is required to be received by July 14, 2025 by 10 a.m. for a proposing firm to be considered: a. Six copies of a Technical Proposal to include the following: i. Title Page Title page showing the request for proposals subject; the firm's name; the name, address and telephone number of the contact person; and the date of the proposal. ii. Table of Contents iii. Transmittal Letter A signed letter of transmittal briefly stating the proposer's understanding of the work to be done, the commitment to perform the work within the time period, a statement why the firm believes itself to be best qualified to perform the engagement and a statement that the proposal is a firm and irrevocable offer for a one-month period. iv. Detailed Proposal The detailed proposal should follow the order set forth in Section VI B of this request for proposals. v. Executed copies of Proposer Guarantees and Proposer Warranties, attached to this request for proposal (Appendix B and Appendix C) ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 17 b. The proposer shall submit six copies of a dollar cost bid in a separate sealed envelope marked as follows: SEALED DOLLAR COST BID PROPOSAL FOR COUNTY OF OTSEGO FOR PROFESSIONAL AUDITING SERVICES c. Proposers should send the completed proposal consisting of the two separate envelopes to the following address: Morgan Kwapis Otsego County Finance Director 225 West Main Street Gaylord, MI 49735 B. Technical Proposal 1. General Requirements The purpose of the Technical Proposal is to demonstrate the qualifications, competence and capacity of the firms seeking to undertake an independent audit of the COUNTY OF OTSEGO in conformity with the requirements of this request for proposals. As such, the substance of proposals will carry more weight than their form or manner of presentation. The Technical Proposal should demonstrate the qualifications of the firm and of the particular staff to be assigned to this engagement. It should also specify an audit approach that will meet the request for proposals requirements. THERE SHOULD BE NO DOLLAR UNITS OR TOTAL COSTS INCLUDED IN THE TECHNICAL PROPOSAL DOCUMENT. The Technical Proposal should address all the points outlined in the request for proposals (excluding any cost information which should only be included in the sealed dollar cost bid). The Proposal should be prepared simply and economically, providing a straightforward, concise description of the proposer's capabilities to satisfy the requirements of the request for proposals. While additional data may be presented, the following subjects, items Nos. 2 through 10, must be included. They represent the criteria against which the proposal will be evaluated. ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 18 2. Independence The firm should provide an affirmative statement that is independent of the COUNTY OF OTSEGO as defined by [generally accepted auditing standards/the U.S. General Accounting Office's Government Auditing Standards] The firm also should provide an affirmative statement that it is independent of all of the component units of the COUNTY OF OTSEGO as defined by those same standards. The firm should also list and describe the firm's (or proposed subcontractors') professional relationships involving the COUNTY OF OTSEGO or any of its [agencies/ agencies or component units/ agencies, component units or primary government] for the past five years, together with a statement explaining why such relationships do not constitute a conflict of interest relative to performing the proposed audit. In addition, the firm shall give the COUNTY OF OTSEGO written notice of any professional relationships entered into during the period of this agreement. 3. License to Practice in Michigan An affirmative statement should be included that the firm and all assigned key professional staff are properly [registered/licensed] to practice in Michigan. 4. Firm Qualifications and Experience The proposer should state the size of the firm, the size of the firm's governmental audit staff, the location of the office from which the work on this engagement is to be performed and the number and nature of the professional staff to be employed in this engagement on a full- time basis and the number and nature of the staff to be so employed on a part-time basis. If the proposer is a joint venture or consortium, the qualifications of each firm comprising the joint venture or consortium should be separately identified and the firm that is to serve as the principal auditor should be noted, if applicable. ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 19 The firm is also required to submit a copy of the report on its most recent external quality control review, with a statement whether that quality control review included a review of specific government engagements. The firm shall also provide information on the results of any federal or state desk reviews or field reviews of its audits during the past three years. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three years with state regulatory bodies or professional organizations. 5. Partner, Supervisory and Staff Qualifications and Experience Identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement. Indicate whether each such person is registered or licensed to practice as a certified public accountant in Michigan. Provide information on the government auditing experience of each person, including information on relevant continuing professional education for the past three years and membership in professional organizations relevant to the performance of this audit. Indicate the number of hours the principal/supervisory staff will be on- site during audit fieldwork. Provide as much information as possible regarding the number, qualifications, experience and training, including relevant continuing professional education, of the specific staff to be assigned to this engagement. Indicate how the quality of staff over the term of the agreement will be assured. The proposer should identify the extent to which staff to be assigned to the audit reflect the COUNTY OF OTSEGO's commitment to Affirmative Action. Engagement partners, managers, other supervisory staff and specialists may be changed if those personnel leave the firm, are promoted or are assigned to another office. These personnel may also be changed for other reasons with the express prior written permission of the COUNTY OF OTSEGO. However, in either case, the COUNTY OF OTSEGO retains the right to approve or reject replacements. ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 20 Consultants and firm specialists mentioned in response to this request for proposal can only be changed with the express prior written permission of the COUNTY OF OTSEGO, which retains the right to approve or reject replacements. Other audit personnel may be changed at the discretion of the proposer provided that replacements have substantially the same or better qualifications or experience. 6. Prior Engagements with the COUNTY OF OTSEGO List separately all engagements within the last five years, ranked on the basis of total staff hours, for the COUNTY OF OTSEGO by type of engagement audit, management advisory services, other). Indicate the scope of work, date, engagement partners, total hours, the location of the firm's office from which the engagement was performed, and the name and telephone number of the principal client contact. 7. Similar Engagements with Other Government Entities For the firm's office that will be assigned responsibility for the audit, list the most significant engagements (maximum of 5) performed in the last five years that are similar to the engagement described in this request for proposal. These engagements should be ranked on the basis of total staff hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact. 8. Specific Audit Approach The proposal should set forth a work plan, including an explanation of the audit methodology to be followed, to perform the services required in Section II of this request for proposal. In developing the work plan, reference should be made to such sources of information as COUNTY OF OTSEGO's budget and related materials, organizational charts, manuals and programs, and financial and other management information systems. ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 21 Proposers will be required to provide the following information on their audit approach: a. Proposed segmentation of the engagement b. Level of staff and number of hours to be assigned to each proposed segment of the engagement NO DOLLARS SHOULD BE INCLUDED IN THE TECHNICAL PROPOSAL c. Sample size and the extent to which statistical sampling is to be used in the engagement d. Extent of use of EDP software in the engagement e. Type and extent of analytical procedures to be used in the engagement f. Approach to be taken to gain and document an understanding of the COUNTY OF OTSEGO's internal control structure g. Approach to be taken in determining laws and regulations that will be subject to audit test work h. Approach to be taken in drawing audit samples for purposes of tests of compliance 9. Identification of Anticipated Potential Audit Problems The proposal should identify and describe any anticipated potential audit problems, the firm's approach to resolving these problems and any special assistance that will be requested from the COUNTY OF OTSEGO. 10. Report Format The proposal should include sample formats for required reports. NO DOLLARS SHOULD BE INCLUDED IN THE TECHNICAL PROPOSAL ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 22 C. Sealed Dollar Cost Bid 1. Total All-Inclusive Maximum Price The sealed dollar cost bid should contain all pricing information relative to performing the audit engagement as described in this request for proposal. The total all-inclusive maximum price to be bid is to contain all direct and indirect costs including all out-of-pocket expenses. The COUNTY OF OTSEGO will not be responsible for expenses incurred in preparing and submitting the technical proposal or the sealed dollar cost bid. Such costs should not be included in the proposal. The first page of the sealed dollar cost bid should include the following information: a. Name of Firm b. Certification that the person signing the proposal is entitled to represent the firm, empowered to submit the bid, and authorized to sign a contract with the COUNTY OF OTSEGO. c. A Total All-Inclusive Maximum Price for the 2024 engagement. 2. Rates by Partner, Specialist, Supervisory and Staff Level Times Hours Anticipated for Each The second page of the sealed dollar cost bid should include a schedule of professional fees and expenses, presented in the format provided in the attachment (Appendix D) that supports the total all- inclusive maximum price. The cost of special services described in Section I E of this request for proposal should be disclosed as separate components of the total all-inclusive maximum price. 3. Out-of-pocket Expenses Included in the Total All-inclusive Maximum Price All out-of-pocket expenses for travel, meals, lodging, etc, must be factored into the standard hourly rate for each individual and will not be billed separately to the COUNTY OF OTSEGO. ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 23 4. Rates for Additional Professional Services If it should become necessary for COUNTY OF OTSEGO to request the auditor to render any additional services to either supplement the services requested in this RFP or to perform additional work as a result of the specific recommendations included in any report issued on this engagement, then such additional work shall be performed only if set forth in an addendum to the contract between COUNTY OF OTSEGO and the firm. Any such additional work agreed to between COUNTY OF OTSEGO and the firm shall be performed at the same rates set forth in the schedule of fees and expenses included in the sealed dollar cost bid. 5. Manner of Payment Progress payments will be made on the basis of hours of work completed during the course of the engagement and out-of-pocket expenses incurred in accordance with the firm's dollar cost bid proposal. Interim billing shall cover a period of not less than a calendar month. Ten percent (10%) will be withheld from each billing pending delivery of the firm's final reports. VII. EVALUATION PROCEDURES A. Budget and Finance Committee Proposals submitted will be evaluated by the COUNTY OF OTSEGO’S seven (7)-member Budget and Finance Committee, consisting of: Commissioner Dana Wingo, Budget and Finance Committee Chair Commissioner Terra Deming Commissioner Neil Drzewiecki Commissioner Rob Weaver County Administrator Matt Barresi Treasurer Paula Wright Finance Director Morgan Kwapis B. Review of Proposals The Committee will use a point formula during the review process to score proposals. Each member of the Committee will first score each technical proposal by each of the criteria described in Section VII C below. The full ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 24 Committee will then convene to review and discuss these evaluations and to combine the individual scores to arrive at a composite technical score for each firm. At this point, firms with an unacceptably low technical score will be eliminated from further consideration. After the composite technical score for each firm has been established, the sealed dollar cost bid will be opened and additional points will be added to the technical score based on the price bid. The maximum score for price will be assigned to the firm offering the lowest total all-inclusive maximum price. Appropriate fractional scores will be assigned to other proposers. The COUNTY OF OTSEGO reserves the right to retain all proposals submitted and use any idea in a proposal regardless of whether that proposal is selected. C. Evaluation Criteria Proposals will be evaluated using three sets of criteria. Firms meeting the mandatory criteria will have their proposals evaluated and scored for both technical qualifications and price. The following represent the principal selection criteria which will be considered during the evaluation process. 1. Mandatory Elements a. The audit firm is independent and licensed to practice in Michigan b. The firm has no conflict of interest with regard to any other work performed by the firm for the COUNTY OF OTSEGO c. The firm adheres to the instructions in this request for proposal on preparing and submitting the proposal d. The firm submits a copy of its last external quality control review report and the firm has a record of quality audit work. 2. Technical Quality: (Maximum Points - 35) a. Expertise and Experience (1)The firm's past experience and performance on comparable government engagements – a higher score will be assigned to firms that audit other counties The quality of the firm's professional personnel to be ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 25 assigned to the engagement and the quality of the firm's management support personnel to be available for technical consultation The availability of the firm’s upper management staff during audit fieldwork The availability of professional staff throughout the year for assistance with and discussion of technical issues. b. Audit Approach (1)Adequacy of proposed staffing plan for various segments of the engagement (2)Adequacy of sampling techniques (3)Adequacy of analytical procedures 3. Price: (Maximum Points -25) COST WILL NOT BE THE PRIMARY FACTOR IN THE SELECTION OF AN AUDIT FIRM D. Final Selection The COUNTY OF OTSEGO Board of Commissioners will select a firm based upon the recommendation of the Budget and Finance Committee. It is anticipated that a firm will be selected on July 22, 2025. Following notification of the firm selected, it is expected a contract will be executed between both parties no later than July 31,2025. E. Right to Reject Proposals Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposal unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the COUNTY OF OTSEGO and the firm selected. The COUNTY OF OTSEGO reserves the right without prejudice to reject any or all proposals. ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 26 APPENDICES A. Copy of 2022 Audited Financial Statements B. Proposer Guarantees C. Proposer Warranties D. Format for Schedule of Professional Fees and Expenses to Support the Total All-inclusive Maximum Price ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 27 APPENDIX B PROPOSER GUARANTEES I. The proposer certifies it can and will provide and make available, as a minimum, all services set forth in Section II, Nature of Services Required. Signature of Official: Name (typed): Title: Firm: Date: ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 28 APPENDIX C PROPOSER WARRANTIES A. Proposer warrants that it is willing and able to comply with State of Michigan laws and licensing requirements. B. Proposer warrants that it is willing and able to obtain an errors and omissions insurance policy providing a minimum of $1,000,000 coverage for the willful or negligent acts, or omissions of any officers, employees or agents thereof. C. Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the prior written permission of the COUNTY OF OTSEGO. D. Proposer warrants that all information provided by it in connection with this proposal is true and accurate. Signature of Official: Name (typed): Title: Firm: Date: ---PAGE BREAK--- Request for Proposals Professional Auditing Services Page 29 APPENDIX D SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE [YEAR] FINANCIAL STATEMENTS Standard Quoted Hourly Hourly Hours Rates Rates Total Partners Managers Supervisory staff Staff Other (specify): Subtotal Total for services Described in Section II E of the RFP (Detail on subsequent pages) Other (specify): Total all-inclusive maximum price for 2024 audit Note: The rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the total all-inclusive maximum price