HomeMy WebLinkAboutItem 19 Contract Award for Audit Services
AGENDAITEMSUMMARY
SPRINGFIELD
CITY COUNCil
Meeting Date: April 21, 2008
Meeting Type: Regular
Department: Finance
Staff Contact: Mike Crocker'~ "-
Staff Phone No: 726-3791
Estimate Time: 5 minutes
- CONTRACT AWARD FOR AUDIT SERVICES
ITEM TITLE:
ACTION REQUESTED:
The Council is requested to accept the recommendation of the Council's
Finance & Judiciary Committee and approve the selection of Grove,
Mueller & Swank, P.C. as auditors for the City, MWMC, SEDA and
Regional Fiber Consortium and authorize the City Manager to sign a
three year audit services contract in the amounts of $42,000; $43,000
and $44,000.
ISSUE STATEMENT:
Three bids were received for audit services. Contract award is now
necessary to enable work to begin.
ATTACHMENTS:
1. Council Briefing Memo with exhibits
2. Audit Contract
DISCUSSIONI
FINANCIAL IMPACT:
In February of 2008, the Finance Department began the process of
selecting new auditors. An RFP was issue~ and responses were
screened. The auditor selection committee interviewed the two finalist
firms, Merino & Company, and Grove, Mueller & Swank, P.C. Staff has
completed reference checking and grading for both firms. The first year
cost bid by these firms was $50,000, and $42,000 respectively.
The Finance and Judiciary Committee approved the interview committee's
recom mendation.
MEMORANDUM
Date:
April 21, 2008
City of Springfield
COUNCIL
BRIEFING
MEMORANDUM
To:
Finance & Judiciary Committee
Mike Crocker, Accounting & Audit Manager
From:
Subject:
Financial Audit Services RFP for the City of Springfield, MWMC, Regional Fiber Consortium and
SEQA
Background:
Finance Department staff, at the direction of the Council Finance and Judiciary
Committee, has completed the RFP process for financial audit services for the years
2008, 2009, and 2010, to include the City, Metropolitan Wastewater Management
Commission, Regional Fiber Consortium and the Springfield Economic Development
Agency and related internal control reports and federal expenditure audits. The contract
would allow for two,- one year extensions beyond the initial three years.
This selection process has embraced and included all Government Finance Officers
Association audit procurement recommended practices. (see Exhibit B)
The selection process included proposal analysis, a pre-bid meeting, interviews and
reference checking.. (See Exhibit C for summary of results)
The conclusions of the selection committee are to recommend that Grove, Mueller and_
Swank PC CP As (GMS) be awarded the contract for audit services. (See Exhibits E and
F) GMS has a strong background in governmental auditing. Their list of clients, which
can be viewed in exhibit E, and the depth of staff experience they have to offer, easily
made them stand out as a logical choice to continue to provide our auditing services.
Three CP A firms submitted proposals and two were selected by the selection committee
for interviews. One consideration was that GMS would be more likely to enable City
staff to move ahead with the next year end in a smooth, efficient and timely manner.
New audit requirements related to internal control wUI put an additional burden on staff
this year, and changing fmns could extend this process and interfere with timely
reporting. Having the same audit fmn for 3 to 5 years and awarding a second term for a
total of 8 to 10 years with the same audit fInn seems to be common among government
agencIes.
GMS was the subject of a complaint filed with the Board of Accountancy in 2006. This
was addressed by the committee during the firm interviews. The committee has
concluded that the complaint was adequately addressed by the Oregon Board of
Accountancy and GMS and will not hinder them from servicing our contract.
RECOMMENDED
ACTION:
The recommendation of the .auditor selection committee is to award the audit contract,
for the City of Springfield, Metropolitan Wastewater Management Commission,
Regional Fiber Consortium and the Springfield Economic Development Agency, for the
years ending June 30,2008,2009, and 2010, to Grove, Mueller & Swank, P;C. The
contract amounts will be $42,000, $43,000 and $44,000 respectively. The selection
committee requests authorization for the City Manager to sign a three year audit services
contract to include an option for two, one year extensions.
AIS Attachment 1, Page 1 of 21
Exhibit B - GFOA
Recommended Practice
GFOA Recommended Practice
Audit Procurement (1996 and 2002)
Back~round. The Government Finance Officers Association (GFOA) has long recommended
that state and local governmental entities obtain independent audits of their financial statements
performed in accordance 'With the appropriate professional auditing standards. Properly
performed audits playa vital role in the public sector by helping to preserve the integrity of the
public finance functions and by maintaining citizens' confidence in their elected leaders.
Recommendation. GFOA makes the follo'Wi~g recommendations regarding the selection of
auditing services:
· The scope of the independent audit should encompass not only the fair presentation of the
basic financial statements, but also the fair presentation. of the financial staten1ents of
individual funds and component units. The cost of extending full audit coverage to the
financial statements of individual funds and component units can be justified by the
additional degree of assurance provided., Nevertheless, the selection of the appropriate scope
of the independent audit ultimately relnainsa matter of professional judgment. Accordingly,
those. responsible for securing independent audits should make their decision concerning the
appropriate scope of the audit engagelnent based upon their particular government' sspecific
needs and circumstances, consistent -with applicable legal requirements.
8 Governmental entities should require in their audit contracts' that the auditors of their
financial statements confonn to the independence standard promulgated in the General
Accounting Office's Government Auditing Standards even for audit engagements that are not
otherwise. subject to generally acc~pted government auditing standards.
o ,Governmental entities should enter into lTIultiyear agreements of at least five years in
duration when obtaining the services of independent auditors. Such multiyear agreements can
take a va.riety of different forms (e.g., a series of single-year contracts), consistent with
applicable legal requirelnents. Such agreelnents allow for greater continuity and help to
minimize the potential for disruption in connection with the independent audit. Multiyear
agreelTIents can also help to reduce audit COSts by allowing auditors to recover certain I! start-
up" costs over several years, rather than over a single year.
.. Governmental entities should undertake a full-scale competitive process for the selection of
independent auditors at the end of the term of each audit contract, consistent with applicable
legal requirements. Ideally, auditor independence would be enhanced by a policy requiring
that the independent auditor be replaced at the end of the audit contract, as is often the case in
the private sector. Unfortup.ately, the frequent lack of competition among audit firms fully
qualified to perform public-sector audits could make a policy of mandatory auditor rotation
counterproductive. In such cases, it is recommended that a governmental entity actively seek
the participation of all qualified firms, including the current auditors, assuming that the past
performance of the Clli'7ent auditors has proven satisfactory. Except in cases where a
multiyear agreement has taken the form of a series of single-year contracts , a contractual
provision for the automatic renewal of the audit contract (e:g., an automatic second term for
the auditor upon satisfactory performance) is inconsistent with this recormnendation.
AIS Attachment 1, Page 2 of 21
Exhibit B - GFOA
Recommended Practice
- Continued
('I
· Professional standards allow independent ,auditors to perform certain. types of nonaudit
services for their audit clients. .Any significant nonaudit services should always be approved
in advance by a goverinnental entity's audit committee. Furthermore, governmental entities
should routinely explore the possibility of alternative service providers before making .a
decision to engage their independent auditors to perform significant nonaudit services.
.. The audit procurement process should be structured so that the principal factor in the
selection of an independent auditor is the auditor's ability to perform a quality audit. In no
case should price be allowed to serve as the sole criterion for the selection of an independent
auditor.
References:
., Audit Management Handbook, Stephen J. Gauthier, GFOA, 1989.
· An Elected Official's Guide to Auditing, Stephen 1. Gauthier, GFOA, 1992.
· Goven7menta! Accounting, Auditing and Financial. Reporting (CAAFI?), Stephen J.
Gauthier, GFOA.
o Model Audit RFP Diskette, GFOA.
· CPA Audit -Quality: A Framework for Procuring Audi.t Servi.ces, General Accounting
Office, August 1987.
Approved by the COllunittee on Accounting, Auditing a.Tld Financial Reporting
June 15,2002
Adopted by Executive Board, October 25, 2002
AIS Attachment 1, Page 3 of 21
Audit Proposal Evaluations
March 2008
Exhibit C- Summary
of Results
Summary of Results
1. Mandatory Criteria:
Criteria Notes Grove Mueller Merina & Co. I
Swank I
A. The audit firm is independent y y
I B. The auditor and finn are properly licensed
by the Oregon State Board of Accountancy to do Y y
I professional business in Oregon.
C. The auditor, if a sole practitioner; or one of -
the shareholders or partners of the firm have a Y y
current Oregon Municipal Audit license.
D. The firm has no conflict of interest with
iegard to any other work performed by the firm y y
fOi the City of Springfield, MWMC, or RFC.
E. The firm does not have a record of
substandard work, verifiable by communication Grove: one incidence noted Y y
with the Oregon State Board of Accountancy
F. The firm has successfully participated in I y y
the GFOA award program for CAFRs.
.
I
G. The firm has assisted similarly sized Cities : y y
in CAFR preparation.
H. The firm adheies to the instructions in this
request for proposal on preparing and Y y
submitting the proposal. I
2. Selection Criteria:
Criteria I I Possible Average Average
i Points Points Points
I
Continuity at key staff levels 5 4.25 4.5
i
Membership in AICPA peer review program I 10 8 9.75
Quaiity of annual audit and reports to
management as evidenced by sample reports 10 9 10
prepared for other clients I
I
Quality of verbal and written communications 10 I 6.5 9
AIS Attachment 1, Page 4 of 21
Depth of municipal audit experience, particularly
of Oregon governmental units of a similar size 15 13.75 10.5
and complexity
Depth of municipal audit experience performing
Single Audit examinations, particularly audits of 15 13 10.75
grants of similar size and complexity
Number and size of municipal clients receiving I 15 12 10.75
the GFOA
i
I
Depth of experience with computerized systems 15 11 .25 I 12
Size of staff must be large enough to handle an 15 12.5 11.5
audit of this size on a timely basis
Qualifications of key individuals to be assigned
to the audit, especially regarding up-to-date and
conti~iml training and experience in 15 13.25 11.75
~overnmental accountin~. and Single Al:t..di!.
examinations.
Subtotal for Proposal I 103.5 100.5
3. Additional Points
Criteria I I Possible Average I Average
Points Points Points
References I j 15 I 12.33 11.33
I
Cost I 25 23.33 20.50
I "::l~ 32.75 27.25
I nterviews/Presentations ...::J
I I I
Maximum Points I Total Awarded I I 200 . 171.92 159.58 I
AIS Attachment 1, Page 5 of 21
Exhibit D - Interview
Summary from GMS
CITY OF SPRINGFIELD
GROVE, MUELLER & SW ANI(, P.C.
ORAL INTERVIEW
...\'
l\larch 25, 2008
Service Team
Charles A. (Chuck) Swank - Shareholder
Greg Ficek- Audit Senior.
Thomas E. Glogau - Shareholder
Two staff members
Experience in Auditing Oregon Local Governments.
The personnel at Grove, Mueller & Swank have been auditing Oregon local governments and
government related entities for more than twenty years. Currently we audit more than 40 local Oregon
governments, quasi governmental organizations and an equal number of nonprofits. In that group
Cluck Swank and Tom Glogau provide services to all our city clients.
Relevant audit experience includes the cites listed in our proposal. The Cities of Salem, Philomath,
Wilsonville, Tigard, Tualatin and Sweet Home prepare their own comprehensive annual financial
reports. Six of our city clients receive the GFOA award.
Staff Member Qualifications
Chuck Swank, shareholder and director of audit services for the firm, has performed a full range of
audit and consulting services for governmental entities. In addition to providing financial accounting..
and audit services, Chuck anIlUally teaches governmental and nonprofit. accounting and auditing for
the Oregon Society of Certified Public Accountants.
All field work will be directly supervised by Tom Glogau, audit shareholder. Tom has twenty-nine
years of experience in providing services to a large group of cities. Tom works closely with each of
his governmental clients to make the audit a pleasant educational experience.
Fees for Services
The fees for our services are detailed in the proposal. We may not be the lowest fee, but we believe
we bring experience auditing cities that no firm can duplicate.
AIS Attachment 1, Page 6 of 21
Audit Process and Philosophy of Service
Our audit process is not unlike that of other firms. We win use the new audit suite of risk based
standards, identifying the areas of audit risk and concentrating our procedures. The difference
between us and other firms is the delivery. Our experienced professionals are in the field. That means
you are not training our young staff for us.
Partners and Manage~s Available for Consultation
Grove, Mueller & Swank has six licensed municipal auditors. Our experience ranges from fifteen to
thirty years. 1-, addition we have ten other personnel who regularly work on governmental audits.
This large number of knowledgeable personnel facilitate responses to our client's questions. We find
ourselves answering questions related to payroll, pension, deferred compensation and cafeteria plan
questions. Because we are a full service accounting firm we are able to help oUr clients on these issues
as well.' .
As indicated above we answer more questions related to payroll and retirement plans than accounting.
We also offer assistance for accounting, auditing and taxation related to commercial and nonprofit
entities.
What Makes Grove, Mueller & Swank Differentfrom the Other Firms?
1. We use experienced personnel. ,
A. Our personnel average over ten years of public accounting experience.
B. These experienced personnel are in the field.
C. Experienced personnel are better sources of information.
D. We currently audit more than twenty cities.
2. We know municipal accounting. ..
A. Our municipal practice is not a sideline.
B. Chuck Swank teaches municipal accounting.
3 . We provide client service.
A. Our best source of new business is our existing clients.
B. We return the same personnel each year.
C. We are available yeararound, usually without any additional fee.
E. 'rVe work with our clients to make the audit an enjoyable experience.
Ask Our Clients!
AIS Attachment 1, Page 7 of 21
Exhibit E -
Technical
I Proposal
CITY OF SPRI.iVGFIELD,
ORE G01V
PROPOSAL TO PROVIDE
ArffjITING SERVICES
March 20, 2008
GROVE, MUELLER & SWANK, P.C.
Charles A. Swank, CPA
475 Cottage Street NE} Suite 200
Salem, Oregon 97301
(503) 581-7788
FAX (503) 581-0152
AIS Attachment 1, Page 8 of21
TABLE OF CONTENTS
TECHNICAL PROPOS.U
Transmittal Letter
General Requirements
Independence
License to Practice in the State of Oregon
Firm Qualifications and Experience
Partner, Supervisory and Staff Qualifications
and Experience
References
Specific Audit Approach
Identificatiop. of Anticipated Potential Audit
Problems
Report F onnat
Proposer Warranties
Peer Review
AIS Attachment 1, Page 9 of 21
.~ddilllW1111111'1
GROVE, JY1UELLER & SWANK, P.C.
CERTlF1ED PUBUC I"\CCOUNTANTS ,,,ND CONSULTANTS
.~/:'
March 20, 2008
Audit Selection Committee
City of Springfield
225 5th Street
Springfield, Oregon 97477
:i
\
.\,
\Veare pleased to present this propos alto the City of Springfield (the "City") to perform audit services for the
City, Metropolitan Wastewater Commission, Springfield Economic Development Urban Renev..-a.i.Agency
and Regional Fiber Consortium for the fiscal years ending June 30, 2008 through 2010, with possil31e
extension through 2012. Our audits win be performed in accordance with auditing standards generally
accepted in the United States of 4~erica and will include an opinion on the basic financial statements of the
City and the related entities, and "in-relation-to" reports on required and other supplementary statements and
schedules as specified in your Request for Proposal. Specifically, our audit will be a financial and compliance
audit as required by Government Auditing Standards and u.1.e Minimum Standards for Audits of Oregon
Municipal Corporations. Separate management letters will be provided, at a minimum one to the City and one
to the Metropolitan Wastewater Conunission. It is our policy to make recommendations as noted during the
course of our work so that implementation can be expedited.
We understand the City of Springfield's financial statements have been and will continue to be submitted to
the GFOA Certificate of Achit~yement for Excellence in Financial Reporting Program. We are experienced
and prepared to continue assisting the City in the meeting the objectives of th.is progra..lTI.
We have read and understand your request for proposal. \Ve are fully prepared to make a commitment of
personnel and other resources to assure that the work will be done in a timely aIld professional manner. We
will meet all your timD.'"1g requirements. OUf objective is to exceed your expectations.
\Ve are an experienced resource available to the City. Our governmental audit base is predominately cities.
The size of our Firrn,our national affiliation and the years of experience of our personnel are availab1e to you
for various accounting and reporting questions, usually without any fee involved.
Charles A. Swank, shareholder, is authorized to make representations for Grove, Mueller & Swank, p.e. Mr.
Swa..T1k may be contacted at our Salem office, 475 Cottage Street Nt, Suite 200, Salem, Oregon 97301, 503-
581-7788. Mr. SWaJi..k,. as signer of this letter, is also authorized to bind Grove, Mueller & Swank, PC.
www.gmscpa.com
Mailing Address · P.O. Box 2122 · Salem. Oregon 97308-2122
Salem 0 475 Cottage Street NE. SUitidOO · Salem. Ore..pon 97301-3814 · (503) 581-7788 ~ FAX (.503) 581-0152
Albany · 519 S. ~yon Streer\ ~1~t;~ce!]~W;7S!2f?PM.1e4G>f ~r-231S · FAX ()41) 92b-S926
Audit Selection Committee
March 20, 2008
Page 2
Grove, Mueller & Swank,P.C. offers several unique advantages that enable us to best serve the City's
requirements:
. We are much more than municipal auditors. We have extensive governmental experience and technical
skills. Because we are alocal firm, our professionals also have capabilities in other areas of accounting
and general business operations.
. ~Ve coordinate audit efforlS with City staff. We are aware of the workload of City personnel, and pride
ourselves on orderly and smooth audits. We have developed an audit approach that works with existing
accounting records rather than recreations by your staff.
JVe have experience with many similar engagements. We conduct the auditsof a number of Oregon
cities, including Salem, Wilsonville, Tlgard, Milwaukie, Keizer, and Oregon City.
. We understand governmental accounting. We have been advisiIlg goverrunental entities for many years.
We know and understand the accounting, Oregon Local Budget Law and most important, the practical
applications. We generally make this advice available to clients without a fee. .
We make our experience available to you. Our partners and managers are in the field. Our average years
of experience exceed ten years. Our unique approach to auditing is to use experienced personnel. This
results in audit efficiencies for both the client and us. It also makes us accessible to you to ask questions.
and discuss ideas. Our management letters are a direct product of this experience, offering many
beneficial recommendations, well beyond the compliance issues.
Please read our proposal carefully. It has been prepared specifically for you. We believe it answers all the
questions in your request for proposal; however if additional clarification is needed, please call.
This proposal is a firm and irrevocable offer until June 30, 2008.
Very truly yours,
GROVE, .lvfUELLER & SWA.NK, P.e.
CERTIFIE CCOUNTA1VTS .
Shareholder
AIS Attachment 1, Page 11 of 21
GEIVERAL REQ UlREME1VTS
Grove~ Mueller & Swank has the qualifications, competency and capacity to meet the requirements of the.City of
Springfield for audit services. We will perform an audit of the comprehensive annual report of the City of
Spnngpeld, Springfield Economic Development Urban Renewal i).gency, Metropolitan Wastewater Management
C oI1l1T'ission and Regional Fiber Consortium in accordance wit; auditing standards generally accepted in the United
States of America, Government Auditing'Standards, the requirements of the Single Audit Act as amended in 1996
and the Minimum Standards for Audits of Oregon Municipal Corporations.
INDEPENDENCE
.Grove, Mueller & Swank, P.C.is independent of the City of Springfield, Springfield Economic Development Urban
Renewal Agency, Ivfetropoliran \Vastewater Management COrn.n1ission and Regional Fiber consortium.under the
guidelines of the American Institute of Certified Public Accountants and Government Auditing Standards issued by
the Controller General of the United States. Grove, Mueller & Swank, p.e. has been the'independent auditor for
the City of Springfield, Springfield Economic Development Urban Renewal Agency, ~1etropolitan Wastewater
Management Commission and Regional Fiber Consortium for the last four years.
LfCE1VSE TO PRACTICE flV THE STATE OF OREG01V
Grove, ivluel1er & Swank, P.C. is a registered firm of certified public accountants properly licensed to practice and
conduct municipal audits in Oregon. All management personnel assigned to the engagement are certified in the
State' of Oregon and licensed municipal auditors. .
FIRM QUALIFICATIONS AND EXPERIENCE
Grove, ivlueller & Swank, P.C. is a local firm with offices in Salem and Albany. Our home office is located at 475
Cottage Street NE, Suite 200 in Salem; in Albany our office is located at 519 S. Lyon Street. Work would be
performed by personnel from our Salem office.
Grove, Mueller & Swank, P.C. is a firm of thirty-six personnel. Our ei~1.t partners are supported by seven
managers, sixteen accountants and six support personnel. This group contains sixteen certified public accountants,
six of which are licensed municipal auditors. The number of personnel qualified to perform governmental audits
are three partners, three managers and ten. staff accountants. W eanticipate staffing the Citj of Springfield
engagement with three partners and three staff personnel.
\Ve have no correspondence concerning any federal or state desk reviews during the last three years. The Finn is
subject to a Board of Accountancy disciplinary action signed in January 2008. The action results from a June 30,
2003 engagement performed for the Secretary of State, Di'vlsion of Audits. There was fraudulent activity during the
audit period that was not detected by the audit team. The Division of Audits in making the compliant believed the
fraud should have been detected. We agreed as a Finn 10 a fine and specific continuing education. The certified
individual involved received a three month license suspension. That individual has not and .i5 not proposed to
provide services to the City of Springfield. As a Finn we are treating this as a learning experience. We have had
several training sessions concerning fraud detection and have implemented more stringent audit procedures. "\}Iie
have customized the training to focus on implementation of the new audit pronouncements. We believe t..1-jis
experience has improved us as a Finn.
AIS Attachment 1, Page 12 of 21
PART1VER, SUPERVISORY AND STAFF QUALIFICATI01YSA1VD E:':(PERlE1YCE
The audit of the Citywi11be accomplished ~X ~"~p~~tiep~edprofessionals, under the supervision of Charles A.
S-w~nk~ partner and- s-harenold"er.' The field work-will be perfonned .by Tom G logau, partner and shareholder and up
to three staff persons. Tom will havea presence during field work. It is our policy to have our senior personnel be
in the field. The lead individual in the field has five years of experience. We believe their experience is a benefit to
both our finn and the client. Kn.owledgeable personnel in the field result in a more efficient audit. IYfr. Devan Esch
will perform second review and be available for consultation as needed. Each is a certified municipal auditor in
Oregon. All governmental audit experience has been within the State of Oregon. _
...,
Mr. Swank has more than thirty years of experience in auditing municipalities. He is a former member of the
Oregon Society of Certified Public Accountants Board of Directors, and current member (prior chair) of the
Governmental Accounting and Auditing CoInmittee. He is a frequent instructor of governmental accounting.
Chuck has attended the OSCP A Governmental Accounting and Auditing Conference each year for the past twenty
years. Chuck is a grader for GFOA and has been for more than ten years. He reviews the financial statements of
each of the Finn's municipal engag~rnents.
Mr. Glogau has more than twenty-nineyearsof experience auditing municipalities. Tom has-the responsibility for
OUf city governmental engagements. He has attended. the OSCP A Governmental Accounting and Auditing
Conference for the last twenty years.
It is our finnpolicy to have each audit reviewed by a qualifiedpartner prior to its release. This review will be
perfonnedby Devan Esch, partner and shareholder. Devan is not directly associated with the engasement The
purpose is to provide an independent review to "assure quality and consistency.
Grove, Mueller & Swank, P.C.strictlyadheresto the "Y~llbw Book" requirements for governmental audit and
accounting training. This means all audit staff recei ve 80 hours of accounting and audit training ~very two years.
We believe that quality training is of benefit to us as -a Firm and you as our client. All members of olir audit staff
receive this training, not just management.
Our larger governmental clients have complex electronic data processing systems. Our personneLhave received
training on auditing in the electronic environment. Our training is augmented by extensive check lists and testing.
procedures related to the electronic data processing.
(
Grove, Mueller & Swank, P.C. does not have a policy which requires rotation of audit personnel from engagements.
In fact, we believe that it is better to return as many of our people to an engagement as possible. Our Firm has.
experienced minimal turnover; therefore we can return the same individuals year after year. This allows
relationships to develop and our knowledge about your operations to grow. We have worked very hard to create-a
motivating and yet comfortableenvironment, and provide our staff with -challenging professional experience and
educational opportunities generally unavailable inother local firms.
We do not anticipate having to replace any of the members of the management team. If that were to be necessary it
would only be in consultation with City personnel. "
Vie are committed to the principle of affirmative action, and our personnel policies as addressed in our personnel
manual are directed towards providing equal employment opportUnities.
/
AIS Attachment 1, Page 13 of 21
REFEREiVCES
Current governmental audit clients include:
City of Salem * **
City of Dayton
City of Hubbard
City of Keizer *
City of Milwaukie *
City of Monmouth
City of Philomath
City of Tualatin
.. City of Vernonia
Salem-Keizer Schools * *"
Bethel School District * * *
St. Helens Schools * * *
Community Services Consorti~m * **
. Marion County Fire District No.1
Salem Transit
City of Oregon City
City of Aurora
City of Jefferson
City of Lebanon
City of Molalla
City of Mt. Angel **
City.of Sheridan
City of Sweet Home
City of Tigard
.. . Eugene Schools * **
Creswell Schools * *
VemoniaSchools * **
Lane Transit District *
Mid- Willamette COG
Marion County
* GFOA Certification
* * Single Audit
No GFOA submissions were denied.
\Ve last provided services to the City of Eugene for Jun'e 30,2006.
Engagements that are similar to the City of Sptingfield and individuals to contact as references:
1. City of Oregon City, David Winuner (503) 722-3798.
2. CityofEugene, Finn Cronin (541) 682-5394.
3. City ofTigard, Roger Dawes, (503)718-249
4. City of Salem, Dave Hauser, (503) 588-6187.
5.Ciry of Keizer, Susan Gahlsdorf, (503) 390-3700.
Please understand you may contact any client on the list.
Two financial statements are provided, the citi~s of Salem and Keizer. Two management letters are provided,the
cities of Salem and Tigard.
The response to the disciplinary action by the State Board of Accountancy is covered earlier.
AIS Attachment 1, Page 14 of 21
SPECIFIC AUDIT APPROACH
Our overall engagement plan entails significant involvement by Grove, Mueller, & Swank management level
people. Our billing rate sriucture is designed with this concept in mind, and .we believe it lays a foundation for
, audit efficiencies and ~mmediate problem resolution.
An audit is most beneficial if it involves client personnel at all stages. We will meet with appropriate personnel
prior to beginning our procedures to review the audit approach and procedure. We will meet periodically during .
the fieldwork and at the conclusion of fieldwork to make sure that all issues are communicated early. We believe
that communication is a key part of the audit relationship.
Our audit approach i,s completely integrated using governmental audit programs specifically tailored for your
engagement. We will obtain a concise understanding of the requirements. This understanding includes how all
financial and grant required items are processed. We gain this understanding through doc'umenting your systems.
For Federal programs we use our previous familiarity, a careful reading of the grant requirements and
communication with the grantor agency, if required.
The audit will ,involve documentation; study and evaluation of the City's internal control process, followed by tests.. .
of procedures and transactions as appropriate for the circumstances. We will analyze the City's' systems,
procedures, .and control environment for revenues, expenditures, payroll, budgeting, data processing, and grant
compliance. Our internal control study will involve. a cGmbination of existing City documentation of internal
control procedures, our specifically tailored questionnaires and descriptions we generate from discussions with City
,personneL Subject to the results of this St1lqy and evaluation, We anticipate that the audit will be most effectively.
performed in the following manner:
INTERIM FIELDWORK
Pre-audit conference and approval of the aud'it program
Study and evaluation, of the City's intemalcontrol structure
Procedural testing' for revenue, payn:llI and disbursements
Coordinate year end final fieldwork activities with City personnel
Communicate preliminary findingS and recommendations
. FINAL FIELDWORK
Substantive tests.of asset and liability accounts
Substantive tests on revenue, expenditure and capital outlay accounts
final procedures on interim fieldwork activities
Communicate audit findings, recommendations and proposed adjustments
Approval of reports, financial statements and audit findings
Our procedures include reviewing how inforrriation is processed. Using trained personnel we review input and.
output controls, controls over the processing, including software and hardware. This review often results in
recommendations for more efficient processing of financial information.
Statistical sampling will be used for payroll, disbursements and major Federal programs. Sample sizes will be 50 in
accordancewlth Federal guidelines. Sampling softv.rare will be used as a part of this process. Tne actual sample'
determination will vary depending on the most' efficient method to encompass the enti~e population.
AIS Attachment 1, Page 15 of 21
SPECIFIC AUDIT APPROACH (Continued)
FINAL FIELDWORK (Continued) ~
Analytical procedures will be used as part of interim procedures, and for year end comparative procedures. All
accounts are entered into our software which allows for reasonableness comparisons, comparison to budget and
comparison between years.
For our det~nation of compliance with laws and regulations, we will submit a preliminary listing of items which
we feel are appropriate to test, and management may then make additions, within reasonable parameters, if they
desire us to focus our attention towards a specific area. .
I~
Suggestions for improvements are a normal part of our audit. It is our intention to be proac,tive with City
personnel to develop meaningful management . letter points. We believe our e-xperience is a valuable resource
availa~le to the City. We are ready, willing and ableto assist you in the areas that benefit the financial operations of
the City. .
We feel the most persuasive evidence regarding our firm is that which is provided by our current clients. We
- encourage the City to contact our references regarding our audit approach.
IDENTIFICATION OF ANTICIPATED POTENTIAL AUDIT PROBLEMS
"" . . 0._.
We do not anticipate any potential problem areas. Ifduring tne course of our audit pro~edurescirctimstances
disclosed that a more intensive and detailed examination is required in addition to that which would be sufficient
under nOnnal circumstances, we will provide all pertinent facts relating to the extraordinary circumstances tot.he
City. Any fees relating to such extensions,:or examination procedures would be additional fees subject to
negotiation and not included within the scope of services to be performed under this,proposal.
REPORT FORMA T
. We have inc1udedcopies of the financial statements for the cities of Salem and Keizer for your review.'
AIS Attachment 1, Page 16 of 21
APPENDIX C _
. PROPOSER WARRANTIES
A. Proposer warrants that it is willing and able to: comply with State of Oregon laws'
with respect to foreign (non-state of Oregon) corporations.
8. Proposer warrants that it is willing and able to obtain an errors and omissions
insurance policy providing a prudent amount of 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 with.out the prior written permission of the City of Springfield
D.
Proposer warrants that all i
proposal is true and acc
provided by it in conne-ction with this
Signature of Official.:.
Name (typed):
Title: .
Firm:
Oate:
Swank, :PC
(.
2008 RfP for Annual Audit Services
Page 36 of 50
AIS Attachment 1, Page 17 of 21
~
READ & BOSE, PC .
CERTIFIED PUBLiC
ACCOUNTANTS
To the Shareholders
Grove, Mueller & Swank, P.C.
I ~
. "
" .
We have reviewed the system of quality control for theaCcoLinting and auditing practice
of Grove, Mueller & Swank, P.C. in effect for the year ended September 3D, 2004. A.
system of quality control encompasses the firm's organizational structure" and the
policies adopted and procedures established to provide it with reasonabl~ assurance of.
conforming with professional standards. The elements of quality control are described in
. the Statements on Quality Control Standards issued by the American .'nstitute of
Certified Public Accountants (AIGPA). The design of the system and compliance .with it .
are the responsibility of. the firm. Our responsibility .{S to express an opinion Of.1tt1e
design of the system, and the firm's compliance with the .system based on our review. "
. .
Our review was conducted in accordance with standards established by the Peer
Reyiew Board of the AICPA..'n"performing our review, we obtained anunderstanding of
the system of quality control for the .firm'saccounting and auditing practice. In addition,'
we tested compliance with the firm's quality control policies and proceduresto the extent
we c~nsidered appropriate. ." These tests covered the application of the firm's. poliCies
and procedures on selected engagements. " Because ollr review was based on selective
tests, it"would not necessarily disclose all weakness~s in the system of quality control or .
all instances ,of lack of .compliance with it.
Because there are inherent limitations in the effectiveness of any system of quality.
control: departures from the system may occur and not be detected. Also, projection of
any evaluation of a system of quality control to future periods is subject to the risk that
the system of quality control may become inadequate because of changes in conditions,
orbecause the degree of compliance with the policies or procedures may deteriOrate.
In our opinion, the system of quality control for the accounting and auditing practice of
Grove, Mueller & Swank, P.C. in effectfor the year ended September 30,2004. has been.
designed to meet the requirements of the quality control standards for an accounting and
auditing practice established by the AICPA and was c0mplied with during the year then .
ended to provide the firm with reasonable assurance of conforming with professional
standards.
~~ ~ ~~I .pc.
December 9, 2004
215 S.E. DORION. PENDLETON, oR'?~M~~W21t6E~ ~~W4~)1276-6926. www.peer-review.com
&B.
READ & BOSE, PC
CERTIFIED PUBLIC
ACCOUNTANTS
To the Shareholders
. Grove, Mueller & Swank, P.C.
We have reviewed the system of quality control for the.~ccountjng and auditing practice of Grove,
Mueller & Swank, P.C. in effect for the year ended September 30,. 2004, and have issued our
report thereon dated December 9, 2004. That report should .be read in conjunction with the
comments in this letter, which were considered in determining our opinion.
Personnel. Managemen.t
Finding- The firm's quality control poliCies and procedures require professional staff. to
participate. in general and industry-specific continuing professional education and other
. profes$ional development activities,' including .frequent . in-house training sessions.. Firm
personnel are in compliance with professional' education requirements.. However, during our
. review, we' noted thataudit planning docu.mentation'did not fully cqmply with a recent change in
professional standards and that disclosure was incomplete on some of the engagements, which
suggests additional staff training in the use of practice. aids and. disclosure checklists would be
helpful. Through discussion with firm personnel, we satisfied ourseJves that appropriate audit
planning had been performed. The disclosures on engagements conducted in accordance with
governmental auditing standards (Yellow Book) were complete, and none of the' incomplete
disclosure noted on other engagements res~lted in misleading financial statements.
. . Recommendation -- We recommend thatthefirm continue to comply with its policies and
procedures for continuing professional education and ensure that statf trainin.g includes. a review
of proper use of disclosure checklists .and a review of documentation requirements for audit
planning. . .. .
Monitoring
Finding - Although the firm performs monitoring and the firm's policies and procedures require
the documentation of monitoring , the .firm does not have practice aids available t9 assist in
,documenting monitoring. As a result, the firm did not document the results of its monitoring or the
.actions taken in response to the findings. '. .
Recommendation - We recommend that the firm .comply with its policies and procedures to
document monitoring. To assist in this process, the firm may wish to use practice aids. available
from theAICPA or other sources.
\2~ ~ ~~I?~
December 9, 2004
215 S.:. OaR ION · PEN OlETON , ORE'"
(- 1 \ 76-692E. www.peer-review.com
MEMBERS 0.: AME.1ICAN INSTITUTE 0; :ERilFlfCo PUS!.IC ACCOUNTANTS. AICPA OIV!SON fOR CPA fIRMS AIVO-OR€GON SOCieTY Of C!RTmfO PU8L1: ACCOUNTANTS
~~~111111l111 .
Exhibit F - Cost
f!opoSal
GROVE, MUELLER &. SWANK, P.C.
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS .
l,f
March 20, 2008
Audit Selection Committee'
City of Springfield
225 5th Street
Springfield~ Oregon 97477
We are pleased to submit this fee proposal in conjunction with our technical proposal to provide auditing
serVices to the City of Springfield, the Metropolitan .Wastewater Management Commission, and the
Regional Fiber Consortium. .
The total, all-inclusive fee for the year ending June 30, 2008 will be $42,000. Fees for the years ending"
June 30, 2009 and 2010 would be $43,000 and $44,000, respectively. The components of the fee are" City
of Springfield $36,000, Metropolitan Wastewater Management . Commission $4,500, and Regional Fiber
,.,./, Consortium $1,500.
We will accept reimbursement for travel, lodging and subsistence at the. prevailing rate for City of
Springfield employees. We do not antiCipate any lodging or subsistence expenses~
. .
The fee also includes consultation as needed on matters reiated to local budget law, accounting issues~
internal .control and other such issues that we may be of assistance to the City. We believe. this
consultation is a benefit to the City. This gives the City the flexibility to discuss these i~sues without the.
concern that a bill would be sent each time the accountant was contacted. We want our clients to contact
us as often as necessary without fear of being "nickel-arid-dime'd" by fees. . Also included are meetings
with City personnel and Council as requested,
Charles A; Swank, shareholder, is authorized to make representati<;>ns for Grove, Mueller & Swank, P.C.
Mr. Swank may be contacted at our Salem office, 475 Cottage Street NE, Suite 200, Salem, Oregon
97301, (503) 581-7788. Mr. Swank, as signer of this letter, is also authorized to bind Grove, Mueller &
Swank, P.C.
GROVE, MUELLER & SWANK, P.C.
CERTIFIED PU CCOUNTANTS
W\\w.gmscpa.com
Mailing Address · P.O. Box 2122 · Salem. Oregon 97308-2122
Salem · 475 C.ottage Street NE. Suit~ (.JJO · Salhm. O!')gQn ~301-3~~4 ~f(~~~) 581-7788 · FAX (503) 581-0152
Albanv · 519 S. Lyon Street f'Am~'ffie:gprr913~1-2~~ (S~1)-:;J6'-....315 · FAX (541) 926-5926 .
- .. .
Audit Selection Committee
March 20, 2008
Page 2
. The all-inclusive fee for the audit of the financial statements for the year ending June 30, 2008 would be
. .
as follows:
Standard Quoted
Staff Level Rate Rate Hours Extension
Partner $ 225 $ 175 40 $ 7,000
Manager 175 125 100 12,500
Staff 125 75 300 22,500
AU-inclusive fee 440 $ 42 000 i
Ii
'I
;1
I
All out of pocket expenses are included in the billing rates.
We would be pleased to render additional services for the City, if requested. Any additional work would
be contractually agreed to in advance at the above quoted rates.
AIS Attachment 1, Page 21 of 21
CITY OF SPRINGFIELD
INDEPENDENT CONTRACTOR AGREEMENT
(Type 3: For Personal Services Contracts Requiring Professional Liability Insurance)
Dated:
April 21, 2008
Parties:
City of Springfield
225 Fifth Street
Springfield, OR 97477
, (IICJTY")
and
Grove, Mueller & Swank, PC
C'I ndependent Contractor")
Additional Independent Contractor Information:
A~ Type of Entity: - 0 Sole Proprietorship
B. Address:
C. Telephone:
D. Fax No:
E. SSN or Fed. 1.0. No:
F. Professional License(s) No:
G. Oregon Agency Issuing License:
H. Foreign Contractor DYes rzJ No
(Foreign means not domiciled in or registered to do business in Oregon) See Exhibit 8(11).
o Partners.- 0 Limited Liability Company [8J Corporation
P.O. Box 2122, Salem, OR 97308-2122
(503)581-7788
(503)581-0152
93-0874157
CITY Account Number(s) To Be Charged (Include Percentages):
Account Number Percentage or Dollars
611008-100-22000 ** 76%
611008-305-22000 '5%
611008-612-62256 19%
611008-229-22000 $1,500
** Contract allocation equals total contract, less charges associated with fund 229,
times the percent value assiqned.
In consideration of the mutual covenants contained herein, the parties agree to the following terms,
provisions and conditions:
1. Payment by CITY. CITY shall pay Independent Contractor according to the sum and schedule
described on Attachment 1 attached hereto and incorporated herein by this reference and in the
amounts not to exceed $42,000 for the year ending June 30,2008, $43,000 for the year ending June
3D. 2009 and $44,000 for the year ending June 30, 2010.
2. Services to be Performed by Independent Contractor. Independent Contractor shall perform the
services described on Attachment 2, City of Springfield Request for Proposals and as further
described in Attachment 3, Grove. Mueller & Swank Technical Proposal- Specific Audit Approach.
Jan/200B Independent Contractor Agreement for Personal Services Type 3
Page 1 of 8
AIS Attachment 2, Page 1 of 62
3. Term. This Agreement is effective as of the date first set forth above and shall continue until April 21,
20111 unless earlier terminated in accordance with the provisions of this Agreement or by mutual
consent of the parties. This Agreement may be amended annually, to extend the term stated herein,
for not more than two successive one-year periods, upon mutual agreement of the parties. In
addition, at the time of amendment, CITY will set the amount of the contract for the following term of
the Agreement. In negotiating any extension City shall consider the requirements or SMC Section
2.708(3) and each extension shall not be effective until reviewed and approved by the Springfield
Common Council.
4. Independent Contractor Status. By its execution of this Agreement, Independent Contractor
certifies its status as an "Independent Contractor1 as that term is used under the laws of the State of
Oregon, and that aU performance of any labor or servicesrequired to be performed by Independent
Contractor under the terms of this Agreement shall be performed in accordance with the standards set
forth in ORS 670.600, and as more specifically set forthon Exhibit "All attached hereto and
incorporated herein by this reference.
5. Conformance with Oregon Public Contracts Law (ORS Chapter 279). Independent Contractor
shall comply with all applicable provisions of Oregon law for public contracts, including, but not limited
to ORS 279B.220, ORS 2798.225, ORS 2798.230, and' ORS 2798.235, and as more fully set forth on
Exhibits "A" and "B" attached hereto and incorporated herein by this reference.
6. Work Performed. The work to be performed by Independent Contractor includes services generally
performed by Independent Contractor in his/herlits usual line of business.
7. Tax duties and Liabilities. Independent Contractor"shall be responsible for all federal, state and
local taxes, if any, applicable to any payments received pursuant to this Agreement, including but not
limited to income tax, payroll tax, social security and self-employment tax. CITY shall not withhold,
pay, or in any other manner be responsible for payment of any taxes on behalf of Independent
Contractor.
8. Reimbursement Of Expenses. Independent Contractor shall not be entitled to reimbursement by
CITY for any expenses il1curred by Independent Contractor unless otherwise agreed in writing.
9. Materials and Supplies. Independent Contractor shall supply all materials. and supplies needed to
perform the services -required unless otherwise agreed in writing.
10. No Authority To Bind CITY. Independent Contractor shall have no authority to enter into contracts
on behalf of CITY, it's officers, agents and employees. This Agreement shall not create a partnership
or joint venture of any sort between the parties.
11. Federal Emp"loyment Status. In the event payment made pursuant to this Agreement is to be
charged against federal funds, Independent Contractor hereby certifies that it is not currently
employed by the Federal Government and the amount charged does not exceed Independent
Contractor's normal charge for the type of services provided
12. Indemnification and Hold Harmless. Independent Contractor shall defend, indemnify and hold
harmless City from and against all liability or loss and against all claims or actions based upon or
arising out of damage or injury to p~rsons or property caused by or sustained in connection with the
performance of this Contract by Independent Contractor except, pursuant to ORS 30.1401 for losses,
claims: or actions resulting from the sole negligence of City.
The Independent Contractor shall assume all responsibilities for the work, and bear all losses and
damages directly or indirectly resulting to the Independent Contractor, the City; or to others on account
of the character or performance of the work, unforeseen difficulties, accidents, or any other cause
whatsoever. The Independent Contractor shall assume defense of, indemnify and save harmless the.
Jan/2008 Independent Contractor Agreement for Personal Services Type 3
Page 2 of 8
AIS Attachment 2, Page 2 of 62
City, its officials, agents, and employees from all claims, liability, loss, damage and injury of every
kind, nature and description, directly or indirectly resulting from activities jn the performance of the
Contract, the ownership, maintenance or use of motor vehicles in connection therewith, or the acts,
omissions, operations, or conduct of the Independent Contractor or any Subcontractor under the
Contract or any way arising out of the Contract, irrespective of whether any act, omission or conduct
of the City connected with the Contract is a condition or contributory cause of the claim, liability loss,.
damage or injury and irrespective or whether act, omission, or conduct of the Independent Contractor
or Subcontractor is merely a condition rather than a cause of a claim, liability, loss damage or injury.
The Independent Contractor shall not be liable for nor be required to defend or indemnify, the City
relative to claims for damage or damages resulting solely from acts or omissions. of the City, its
officials, agents or employees. The absence of or inadequacy of the liability insurance required in
section 13 below shall not negate Independent Contractor's obligations in this paragraph.
13. Insurance.
13.1. General Insurance. The Independent Contractor shall maintain in force for the duration of this
agreement a Commercial General Liability insurance policy written on an occurrence basis with
limits not less than $1,000,000 per occurrence and $2,000,000 in the aggregate. The policy will
contain a "per project" aggregate endorsement. Automobile Liability (owned, non-owned and
hired) insurance with limits not less than $1,000,000 per occurrence shall be maintained. The
City, its employees, officials and agents will be named as an Additional Insured where .
operations are being conducted related to this contract, on the General Liability policy as
respects to work or services performed under this agreement to the extent that the death or
bodily injury to persons or damage to property arises out of the fault of the Independent
Contractor or the fault 9f the Independent Contractors agents, representatives or
subcontractors. This insurance will be primary over any insurance the City may carry on its
own.
13.2. Professional Liability. Independent Contractor shall maintain in force during the duration of
. this Agreement (and, if it is a claims made policy, for a year following completion of the project)
.a professional liability policy, approved by the City's Risk Manager as to terms, conditions and
limits.
13.3. Asbestos Abatement. (Only applicable to Asbestos Contracts) The Commercial General Liability
policy shall be written on a form that meets the following criteria and must be ASBESTOS
SPECIFIC as follows:
8. A full occurrence form, or
b~ A limited occurrence form with at least a three-year (3) tail, or
c. A claim made form with a three-year (3) tail.
13.4. Workers' Compensation. Independent Contractor shall provide and maintain workers'
compensation coverage for its employees, officers, agents, or partners, as required by applicable
workers' compensation laws. If Independent Contractor is exempt from coverage, a written
statement signed by Contractor so stating the reason for the exemption shall be provided to the
City.
13.5. Evidence of Coverage. Evidence of the required coverages issued by a company satisfactory
to the City shall be provided to the City by way of a certificate of insurance before any work or
services commence. A 30-day notice of cancellation or material change in coverage clause
, shall be included. It is the Independent Contractor's obligation to provide the 30 days notice if
not done so by the Independent Contractor1s insurance company(s). Failure to maintain the
proper insurance shall be grounds for immediate termination of this contract.
13.6. Equipment and Material. The Independent Contractor shall be responsible for any loss,
damage,.or destruction of its own property, equipment, and materials used in conjunction with
~m~ -
13.7. Subcontractors. The Independent Contractor shall require all subcontractors to provide and
maintain general liability, auto liability, professional liability (as applicable), and workers'
compensation insurance with coverage's equivalent to those required of the general contractor in
this contract. The Independent Contractor shall require certificates of insurance from all
subcontractors as evidence of coverage.
Jan/2008 Independent Contractor Agreement for Personal Services Type 3
Page 3 of 8
AIS Attachment 2, Page 3 of 62
13.8. Exception or Waivers. Any exception or waiver of these requirements shall be subject to review
and approval from the City's Risk Manager.
13.9 Railroad Protective Liability Coverage. If work being performed under this agreement is
near railroad tracks or a railroad right of way and the Railroad requires special insurance (for
example: Railroad Protective Liability Coverage) Independent Contractor will be responsible for
meeting the Railroad insurance requirements before any work commences. Any insurance
req uired to be purchased by the Railroad is in addition to the ins~rance required by the City.
14. Termination. The performance of work under this Agreement may be terminated by CITY, in whole or
in part, whenever for any reason GITY shall determine that such termination is in the best interest of
CITY. Any such termination shall be effected by delivery to the Independent Contractor of a Notice of
T erminationspecifying the extent to which performance of the work under the Agreement is
-' terminated and the date on which such termination is effective. Upon delivery to the Independent
Contractor of a Notice of Termination under this paragrapht the Independent Contractor and CITY
'shall. by agreement, make an appropriate written modification to this Agreement governing completion
of portions of the independent Contractor's work and payment therefore by CITY.
15. Rights In Data. All original written material, including programs. card decks, tapes, listings, and othE?r
documentation originated and prepared for CITY pursuant to this Agreement, shall become
eXClusively the property of CITY. The ideas, concepts, know-how, or techniques developed during the
course of this Agreement by Independent Contractor personnel can by used by either party in any way
it may deem appropriate. Material already in Independent Contractors possession, independently
developed by Independent Contractor outside the scope of this Agreement, or rightfully obtained by
Independent Contractor from third parties. shall belong Independent Contractor. This agreement shall
not preclude Independent Contractor from developing materials which are competitive, irrespective of
their similarity to materials which might be delivered to CITY pursuant to this Agreement Independent
Contractor shall not, however, use any written materials developed under this Agreement in
developing materials forotherst except as provided in this section.
16. Confidentiality. During the course of performance hereunder, Independent Contractor or its agent,
employees, or contractors, may receive confidential information. Independent Contractor agrees to
use its best efforts to maintain the confidentiality of such information and to inform each agent and
employee performing services of the confidentiality obligation that pertains to such information.
17. Assignment/Subcontract. Independent Contractor shall not assign~ sell, transfer, subcontract or
sublet rights, or delegate responsibilities under this agreement, in whole or in pan, without the prior
written approval of CITY. No such written approval shall relieve Independent Contractor of any
obligations of this Agreement, and any transferee or subcontractor shall be considered the agent of
Independent Contractor. Independent Contractor shall remain liable as between the original parties to
this Agreement as if no such assignment had occurred.
18. Successors In Interest. The provisions of this Agreement shall be binding upon and shall inure to.
the benefit of the parties to this_Agreement and their respective successors and assigns.
19. Compliance With All Government Regulations. Independent Contractor shall comply with all
Federal, State and local laws, codes, regulations and ordinances applicable to the work performed
under this Agreement. Failure to comply with such requirements shall constitute a breach of contract
and shall be grounds for termination of this Agreement. Damages or costs resulting from
noncompliance shall be the sole responsibility of Independent Contractor.
20. Attorney Fees. In the event a lawsuit of any kind is instituted on behalf of CITY to enforce any
provision of this Agreementt Independent Contractor shall pay such additional sums as the Court may
adjudge reasonable for attorney fees plus all costs and disbursements at trial and on any appeal.
Jan/2008 Independent Contractor Agreement for Personal Services Type 3
Page 4 of 8
AIS Attachment 2, Page 4 of 62
21. Force Majeure. Neither party to this Agreement shall be held responsible for delay or default caused
by fire, riot, acts of God and/or war which is beyond that party's reasonable control. CITY may
terminate this Agreement upon written notice after determining such delay or default will unreasonably
prevent successful performance of the Agreement.
22. Assistance Regarding Patent And Copyright Infringement In the event of any claim or suit
against CITY on account of any alleged patent or copyright infringement arising out of the
performance of this Agreement or out of the use of any material furnished or work or services
performed hereunder, Independent Contractor shall defend CITY against any such suit or claim and
hold CITY harmless from any and all expenses, court costs, and attorney's fees in connection with
such clahn or suit.
23. Severability. If any provision of this Agreement is declared by a court to be illegal or in conflict with
any law, the validity of the remaining terms and provisions shall not be affected; and the rights and
obligations of the parties shall be construed and enforced as if the Agreement did not contain the
particular provision held to be invalid.
24. Access To Records. CITY and its duly authorized representatives shall have access to books,
documents. papers and records of Independent Contractor which are directly pertinent to this
Agreement for the purpose of making audit, examination, excerpts and transcripts.
25. Waiver. Failure of CITY to enforce any provision of this Agreement shall not constitute a waiver or
relinquishment by C.ITY of the right to such performance in the future nor of the right to enforce any
other provision of this Agreement
26. Amendments. The terms of this Agreement shall not be waived, altered, modified, supplemented or
amended in any manner whatsoever, without prior written approval of CITY, No modification of this
Agreement shail bind either party unless reduced to writing and subscribed by both parties, or ordered
by a Court.
27. Nondiscrimination. IndependentContractor shall comply with all applicable requirements of Federal
and State civil rights and rehabilitation .statutes, rules and regulations.
28. Dual Payment. Independent Contractor shall not be compensated for work performed under this
contract from an~ CITY agency other than the agency which is a party to this contract.
29. Remedies. This Agreement shall be governed by and construed in accordance with the laws of the
State of Oregon, and any litigation arising out of this Agreement shall be conducted in the courts of the
State of Oregon, County of Lane. .
30. Entire Agreement. This Agreement signed by both parties is the parties' final and entire Agreement
and supersedes all prior and contemporaneous oral or written communications behNeen the parties,
their agents and representatives. There are no representations, promises, terms, conditions or
obligations other than those contained herein.
IN WITNESS WHEREOF the parties have executed this Agreement to be effective the date first
set forth above.
CITY OF SPRINGFIELD:
INDEPENDENT CONTRACTOR
By: .,
Name:
Title:
Date:
By:
Name:
Title:
Date:
Jan/2008lndependent Contractor Agreement for Personal Services Type 3
Page 5 of 8
AIS Attachment 2, Page 5 of 62
EXHIBIT "A"
CITY OF SPRINGFIELD
INDEPENDENT CONTRACTOR AGREEMENT
Independent Contractor Status
AU 'performance of any labor or services required to be performed by Independent Contractor
shalf be performed in accordance with the standards set forth in ORS 670.600 (2005), and as
follows:
A person is customarily engaged in an independently established business if any three of the
following six requirements are met:
1. The person maintains a business location:
a. That is separate from the business or work location of the person for whom the
services are provided;' or, , .
b. That is in a portion of the person's residence and that portion is used primarily
forthe business.
2. The' person bears the risk of loss related to the business or the provision of servi ces as
shown by factors such as:, . '
a. The person ,enters into fixed-price contracts;
b. The person is required to correct defective work;
c.' The person warrants the services provided; or,
d. The person negotiates indemnification agreements or purchases liability
insurance, performance bonds or errors and omissions insurance.
4. ,The person provides contracted serVices for two or more different persons within a 12-
month period, or the person routinely engages in husiness advertising, solicitation or
other marketing efforts reasonably calculated to obtain new. contracts to provide similar
services.
5. The person makes a significant investment in the businessl through means such as:
a. Purchasing tools or equipment necessary to provide the services;
b. Paying for.the premises or facilities where the services are provided; or
c. Paying for licenses, certificates or specialized training required to provide the
services.
6. The person has the authority to hire other persons to provide or to assist in providing
the services and has the authority to fire those persons.
Jan/200B Independent Contractor Agreement for Personal Services Type 3
Page 6 of 8
AIS Attachment 2, Page 6 of 62
EXHIBIT "Bt,
. ::
City of Springfield
Public Contracts
Conformance with Oregon Public Contractors Laws
Pursuant to Oregon Jaw, every public contract shaJl contain the following conditions:
I) Make payment promptly, as due, to all persons supplying to the conlractor labor or material for the performance of the work provided
for in the contract. ORS 279B.220(1)
2) Pay all contributions or amounts due the Industrial Accident Fund fro.m the contractor or subcontractor incurred in the perfonnance of
the contract. ORS.279B.220(2).
3) Not pennit any lien or claim to be filed or prosecuted against the state or a county, school district, municipnlity, municipal
corporation or subdivision thereof, on account of any labor or material furnished. ORS 279B.220(3).
4) Pay to the Dcparunent of Revenue all sums withheld from employees undcrORS 316.167. ORS 279B.220(4).
5) If the agreement is for lawn and landscape maintenance, it shall contain a condition requiring the contrnctor to salvage. recycle,
compost or mulch yard waste material at an approved site, if feasible and cost-effective. ORS 279B.22S.
6) Promptly, as duc, make payment to any person, copartnership,a5sociation or corporation furnishing medical, surgical and hospital
care services or other needed care nnd attention, incident to sickness or injuT)', to the employees of the contractor, of all sums that the
contractor agrees to pay for the services and all moneys and sums that the contractor collected or deducted from the wages of
employees under any law, contract or agreement for the purpose of providing or paying for the services. All employers shall comply
with ORS 656.017. ORS 279B.230.
7) A person may not be employed for more tlum 10 hours in anyone day, or 40 hours in anyone week, except in cnsesofnecessity,
emergency or when the public policy absolutely requires it. and in such cases, except in cases of conlractS for personal services
designated underORS 279A.055, the employee shall be paid alIeast time and a half pay:
a) For all ovenime in excess of eight hours a day or 40 hours in anyone week when the \vork week is five consecutive
days; or
b) For all overtime in excess of 10 hours in llny one day or 40 hours in anyone week when the work week is four
consecutive days, Monday through Friday; and
c) For all work performed on Saturday and on any legal holiday specified in ORS 279B.020.
An employer must give no lice in writing to employees who work on a public contract, either at the time of hire or before
commcncemcnt of work on the contract, or by posting a notice in a location frequented by employees, of the number of hours per day
and days per week that the employees may be required to work. ORS 2798.235(1)-(2).
8) lftile agreement is for personal services, the contract shall contain a provision that the employee shall be paid at least time and a half
for all overtime worked in excess of 40 hours in anyone week, except for individuals under personal services contracts who arc
cxcludcdunder ORS 653.010 to 653.261 or under 29 V.S.C. 201-209 from receiving ovenime. ORS 279B.235(2)'.
9) Contracts for services must contain a provision thnt requires that persons employed under contracts shnIl receive at least time and half
pay for work performed on the legal holidays specified in a collective bargaining agreement or inORS 279B.020{l)(b)(BHG) and for
. nlltime worke~ in excess of 10 hours in anyone day or in excess of 40 hours in an)' one weck, whichever is greater. Employer shall
give notice in writing toemployecs who work on a contract for services, either at the time of hire or before commencement of work
on the contract, or by posting a notice in a location frequented by employees, of the number hours per day and days per week that Ule
employees may be required to work.. ORS 279B.235(5).
If this llgreement is for a public improvement. the contract shall contain the following conditions:
10) Make payment promptly, llS"due, to all persons supplying to the contractor labor or material for the performance of the work provided
for in the contract. ORS 279C.505(1)(a).
J J) Pay aU contributions or amounts due the Industrial Accident Fund from tbe contractor or subcontractor incurred in the performance of
lhe contract. ,ORS 279C.505(1)(b).
12) Not permit any lien or claim to be filed or prosecuted against the state or a county. school district. municipality, municipal
corporation or subdivision thereof, on account of any labor ormatcrial furnished. ORS 279C.50S(l)(c).
13) Pay to the Department of Revenue nil sums withheld from employees under ORS 316.167. ORS 279C.505(1){d).
14) The contractor shall demonstrnle that an employee drug testing program is in place. ORS 279C.SOS(2).
Jan/2008 Independent Contractor Agreement for Personal Services Type 3
Page 7 of 8
AIS Attachment 2, Page 7 of 62
J 5) If the contractor fails, neglects or refuses to make prompt payment of any claim for labor or services furnished to the contractor or
subcontractor by any person in connection with the public improvement contract as the claim becomes duc, the proper officer or
officers repres<;nting the state or a county, school district. municipality, municipal corporation or subdivision thereof, as the case may
be, may pay such claim to the person furnishing labor or services and charge the amount of the payment against the funds due or to
become due the contract by reason of the contract. If the contrac(or or first-tier subconlractor fails, neglects or refuses to make
payment to a person furnishing labor or materials in connection wilh lhe public improvement contract within 30 days after receipt of
payment from the contracting agency or a contractor, lhe contractor or first-tier subcontractor shall owe the person the amount due
plus interest charges commencing at the end of the I O-dayperiod lhnt payment is due under ORS 279C.580(4) and is subject to a
good faith dispute as defined in ORS 279C.580. If the conlractor or a subcontractor fails, neglects or refuses to make payment to a
person furnishing labor or materials in connection with the public improvement contract, the person may file a complaint w1th the
Construction Contractors Board, unless payment is subject to a good faith dispute as defined in ORS 279C.580. ORS 279C.515.
16) The payment ofa claim does not relieve the contnctor or the contractor's surety from obligation ,vith respect to any unpaid claims.
ORS 279C.515(4).
17) A person may not be emplo)-ed for more than 10 hours in anyone day, or 40 hours in anyone week, except in cases of necessity,
emergency or when the public policy absolutely requires it, and in such cases, except in cases of contracts for personal services
designated under ORS 279C.l 00, the employee shall be paid at least time and a half pay:
a) For all overtime in excess of eight hours a day or 40 hours in anyone week when the work week is five consecutive
days; or,
b) For all overtime in excess of 10 hours in anyone day or 40 hours in anyone week when the work week is four
consecutive days, Monday through Friday; and,
c) For all work perfonned on Saturday and on any legal holiday specified in ORS 2798.020. ORS 279C.520(1).
An employer shall give notice in writing to employees who work on a public contract either at the time of hire or before
commencement of work on the contract, or by posting a notice in a location frequented by employees, of the number of hours pcr day
and days per week that the employees may be required to work. ORS 279B.520(2).
18) If the agreement is for personal services, the contract shall contain a provision that the employee shalt be pa,id at least time and a. half
for all overtime worked in excess of 40 bours in anyone week, except for individuals under personal services conlracts who are
excluded under ORS 653 .()J 0 to 653.261 or under29 V.S.C. 201-209 from receiving overtime. ORS 279C.520(3).
19) Contracts for services must contain a provision that requires that persons employed under contracts shall receive at least time and half
pay for work performed on the legal holidays specified in a collective bargaining agreement or in ORS 279C.540(1)(b)(BHG) and for
all time worked in excess of 10 hours in anyone day or in excess of 40 hours in anyone week, whichever is greater. An employcr
shall give notice in writing to employees who work on a contract for services, either at the time of hire or before commencement of
work on the contract, or by posting a notice in it location frequented by employees, of the number of hours per day and days per week
that the employees may be required to work. ORS 279C.520(5)
20) Solicitation documents for a public improvement contract shall make specific reference to federal, state and local agenci~s that have
cnacted"ordinances, rules or regulations dealing with the prevention of environmental pollution and the preservation of natural
resources thlll affect the perfonnance of the contract. 1\ solicitation document must also, make speci31 reference to known conditions
at the construction site that may require the successful bidder to comply with the ordinances, rules or regulations identified under
ORS 279C.525(1). If the successful bidder encounters a condition not referred to in the solicitation documents..not caused by the
successfut bidder and not discovernblc by a reasonable prebid visual site inspection, and the condition requires compliance wilh the
ordinances, rules or regulations referred to under ORS 279C.525(1), the successful bidder shall immediately give notite of tile
condition to the contracting agency. The successful bidder may not commence work nor incur any additional job site costs in regard
to the condition encountered and described in ORS 279.525(3) without wriuen direction from the contracting agency. ORS
279C.525.
21} Promptly, as due, make payment to any person, copnnnership, association or corporation furnishing medical, surgical and hospital
care services or other needed care and attention, incident to sickness or il\iury, to the employees of the contractor, orall sums that the
contractor agrees to pay for the services and all moneys and sums that the contractor coUected or deducted from the wages of
employees under any law, contract or agreement for the purpose of providing or paying for the services. All employers shall comply
with ORS 656.017. ORS 279C.530.
22) A contract for public works shall contain a provision staling the existing state prevailing rate and wage and, if applicable, the federol
prevailing rate of wage required. Every contract and subcontract shall contain a provision that workers shall be paid not less than the
specified minimum hourJy rate of wage in accordance with ORS 279C.838. ORS 279C-830(1).
If this Ilgreernenris for demolition, rbe contract shnlllllso contain the following conditions:
23) Contractor must salvage or recycle construction and demolition debris, if fCilSible and cost-effective. ORS 279C.51O(l)
Jan/200B Independent Contractor Agreement for Personal Services Type 3
Page 8 of 8
AIS Attachment 2, Page 8 of 62
lYl.\STER COpy.
Attachment 1
. 'ddllllll~ll11111111
GROVE, MUELLER & SWANK, P.C.
aRT1F1ED PUBUC ACCOUNTANTS AND CONSULTANTS
March 20, 2008
Audit Selection Committee
City of Springfield
, 225 5th Street
Springfield, Oregon 97477
. Weare pleased to submit this fee proposal in conjunction with our technical proposal to provide auditing' ,
services to the City of Springfield, the Metropolitan Wastewater Management COmInissior1, and the
. Regional Fiber Consortium.
The total, all-inclusive fee for the year ending June 30, 2008 will be $42,000. Fees for the years ending
June 30, 2009 and 2010 would be-$43,000 and $44,000, respectively. The components of the fee are City
of Springfield $36,000, Metropolitan Wastewater Management Commission $4,500, and Regional Fiber
.consortium $1,500. '
We will accept reimbursement for travef, lodging and subsistence at the prevailing rate for City of
Springfield employees. We do not anticipate any lodging or subsistence expenses.
The Jee also includes consultation as needed on matters related to local budget law, accounting issues,
internal control and other such issues that we may be of assistance to the City. We believe this
consultation is a benefit' to the City. This ,gives the City the flexibility to discuss these issues ~ithout the
concern that a bill would be sent each time the accountant was contacted. We want our clients to contact
us as often as necessary 'without fear of being "nickel-and-dime'd" by fees. Also included are meetings
with City personnel and Council as requested. . - .
Charles A. Swank., shareholder, is authorized to make representations for Grove, Mueller & Swank, P.C.
:Mr. Swank may be contacted at our Salem office, 475 Cottage Street NE, Suite 200, Salem, Oregon
97301,-(503) 581-7788. Mr. Swank, as signer of this letter, is also authorized to bind Grove, Mueller &
Swank, P.C. .
GROV~, MUELLER & SWANK. P.C.
CERTIFIEDPU CCOUNTANTS
By:
, Charles A. Swank, A Shareholder
www.gmscpa.com
Mailing Address · r.o. Box 2122 · Salem. Oregon 97308~2122
Salem · 475 Cottage Street NE, Suite 200 · Salem, Ort;gon 97301-3814 · (503) 581-7788 · FAX (503) 581-0152
Albany · 519 5. ~on StreeN~I~~~81i1~132P-!l1J@ .9{9f1 AA,7-13 IS · FAX (541) 926~S916
Attacnmen'f 1
Audit Selection Committee
March 20, 2008
Page 2
The all-inclusive fee for the audit of the financial statements for the year ending June 30, 2008 would be
- as follows:
Stalldard . Quoted
Staff Level Rate Rate Hours E."dellsioll
Partner $ 225 $ 175 40 $ 7,000
Manager 175 125 100 12,500
Staff 1")- 75 300 22.500
-,
All-inClusive fee 440 $ '42 000
All out of pocket expenses are included in the billing rates.
We would be pleased'to render additiona~ services for the City, if requested. Any additional work would
be contractually agreed to in advance at the above quoted rates.'
AIS Attachment 2, Page 10 of 62
A ttacbmeatZ
'Cityof Springfield
Finance Department
R.EQUEST FOR
PROPOSALS
FOR
PROFESSIONAL AUDITING
SERVICES--
February 28, 2008
AIS Attachment 2, Page 11 of 62
CITY OF SPRINGFIELD -
REQUEST FOR PROPOSALS
PROFESSIONAL AUO'TINGSERVICES
TABLE OF CONTENTS
l. INTRODUCTION
A.
B.
General Information
Term of Engagement
'5
7
II. NATURE OF SERVICES REQUIRED
A.
B.
C.
D.
E.
GeneraL :. "
Scope of Work to be Performed
Reports To Be Issued
Special Considerations
Working Paper Retention and Access to
Working Papers
7
7
8
11
11
III. DESCRIPTION OF THE GOVERNMENT
A. Contact Information
B. Background Information
C. Fund Structure'
D. Budgetary Basis of Accounting
E: Federal and State Financial Assistance
F. Pension Plans
G. Other Post Employment Benefits ,
H. Component Units
I. . Joint Ventures
J. Magnitude of Finance Operations
K.. Accounting Environment
L. Availability of Prior Audit Reports
and Working Papers
12
12
13
15
15-
, 17
17
17
17
18
18
"
18
IV. TIME REQUIREMENTS
A. SchedLJle for Selection Process 18
. B. Audit Schedule for the fiscal year ending 6/30/08 19
C. . Meetings 19
V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR
2008 RFP for Annual Audit Services
Page 2 of 50
AIS Attachment 2, Page 12 of 62
AND R~PORT PREPARATION
A. Finance Department and Clerical Assistcance 19
B. Information Services Assistance 20 -
C. . City Accounting Staff Will Provide 20
D~ Work Area, T~lephone, Photocopying and
FAX Machines 20
VI. PROPOSAL REQUIREMENTS
A.
General Requirements-
20
1. Pre-proposal Conference and On-site 1 nspec~ions 20
2. Inquiries 21
. --- . _. - .....,----~
3. Submission of Proposals 21
B.
Technical Proposal 23
1. General Requirements 23
2.' Independence 23
3. License to Practice in Oregon , 24
4. Firm Qualifications. and E~perience 24
5. Partner, Supervisory and Staff Qualifications
and Experience . 24
6. References 25
7. Specific. Audit Approach 27 .
8. Identification of Anticipated Potential
Audit Problems 27
9. . Report Format 27
Sealed Dollar Cost Bid 28
1. Total All-Inclusive Maximum Price 28
2. Rates by Partner, Specialist, Supervisory
and Staff Level Times Hours Anticipated
for Each 28
3. Out-of-pocket Expenses inthe Total
All-inclusive Maximum Price and
Reimbu rsernent Rates 28
4. Rates for Additional Professional Services 29
5. Manner of Payment 29
C.
VII. EVALUATION PROCEDURES
A.
B.
Auditor Selection Panel
Review of Proposals
30
30
2008 RFP for Annual Audit Services.
Page 3 of 50
AIS Attachment 2, Page 13 of 62
A.
B.
C. Evaluation Criteria 30
1. . Mandatory Elements 30,
2. Selection Criteria 31 ,
D. Oral Presentations 32
E. Final Selection 32
F. Right to Reject Proposals 33
G. Complaints 33
APPENDICES
Findings from Recent External Audits 34
Organizational Chart 35
Proposer Warranties 36
c.
D. 'Format for Schedule of Professional Fees and Expenses
to Support the Total All-Inclusive Maximum Price 37
E. City of Springfield (Draft) Standard Professional Services
Contract ' 40
2008 RFP for Annual- Audit Services
Page 4 of 50
AIS Attachment 2, Page 14 of 62
CITY OF SPRINGFIELD
REQUEST FOR PROPOSALS
PROFESSIONAL AUDITING SERVICES
I. INTRODUCTION
A. General Information
The Gityof Springfield is requesting proposals from qualified firms of
certified public accountants to audit the financial statements of the City of
Springfield, the Metropolitan Wastewater Management Commission
(MWMC), Regional Fiber Consortium (RFc), and the Springfield
Economic Development Urban Renewal Agency (SEDA) for the fiscal
years ending June 3D, 2008, June 3D, 2009 and June 3D, 2010, with the
possibility of Up to two, one year extensions. These audits are 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 (2003 Revision);
· The provisions of the federal Single Audit Act of 1984 (as
. amended in 1996);
· U.S. Office of Management and Budget (OMS) Circular A-
133, Audits of States, Local Governments, and Non-Profit
Organizations;
· Minimu'm Standards for Audits of Oregon Municipal
Corporations as prescribed by the Secretary of State, and .
· All other appricabJe state and federal regulations for the,
purpose of expressing an opinion.
, There is no expressed or implied obligation forthe Cityof Springfield to'
reimburse responding firms for any expenses incurred in preparing
proposals in response to this request.
A pre-proposal conference to answer questions about the engagement
will be held March 7,2008,2:00 PM local time in Library.Meeting Room
#1 at Springfield City Hall 225 Fifth Street, Springfield, OR. Attendees will
be provided a copy of the minutes of the pre-proposal conference by
March 11, 2008. City will also post said minutes on the City website at
www.cLsorinofield.or.us. After the pre-proposal conference, inquiries
concerning the request for proposals should be addressed to Mike
Crocker, Accounting and Audit Manager by email at
mcrockerccv.cLsorinofield.or.us or at (541 )726- 3791.
2008 RFP for Annual Audit Services
Page 5 of 50
'AIS Attachment 2, Page 15 of 62
Six copies of a proposal, clearly marked nRFP.Professional Auditina
Services" and contained in a sealed envelop or box shall be received no
later than 2:00 PM local time, March 20,2008 at the following address:
City of Springfield
Finance Department
Attention: Leslie Wilson, Management Analyst -
225 Fifth Street,
Springfield, Oregon 97477
All proposals shall be valid through June 30, 2008.
Late Proposals Not Considered.
Proposals must be received by the time specified at the addr.ess listed
above. Any proposals received after the deadline will not be. considered.
Addenda To RFP
In the event that it is necessary to amend, revise, or supplement any part
of the RFP, addenda will be provided to all proposers to whom City
provided the initial RFP. This includes the amendment of dates in the
Schedule for Selection Process. Any addenda so issued are to be
considered part of the specifications of the RFP.City is not responsible
for any explanation, clarification, interpretation or approval made or given
in any manner except by written addenda issued by City.
In case of any doubt or differences of opinion as to the services to be
fumishedhereunder, or the interpretation of the provisions of the RFP, tne
decision of City shall be final and binding upon all parties.
The City of Springfield reserves the right to reject any or all proposals
submitted.
The City of Springfield reserves the right to negotiate with one or mor~ of
the proposers to further refine a proposal in order to secure the best
services at an economical price.
Proposals submitted will be evaluated by the Auditor Selection Panel.
During the evaluation process, the Auditor Selection Panel and the City of
Springfield reserve the right, where it may serve the City of Springfield's
best interest, to request additional information or clarifications from
proposers, or to aBow corrections of errors or omissions. Finalist firms
submitting proposals wiJI be interviewed and requested to make oral
presentations as part of the evaluation process.
2008 RFP for Annual Audn Services
Page 6 of 50
AIS Attachment 2, Page 16 of62
The City of Springfield 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 City of Springfield and the firm selected.
It is anticipated the selection of a firm wiJI be completed by April 21, 2008.
Following the notification of the selected firm it is expected a contract will
be executed between both parties by May 1, 2008.
B. Term of Engagement
A three year contract with the possibility of up to two, one year extensions
is contemplated, subjectto"the annual review and recommendation of the
Finance Director, the satisfactory negotiation of terms (including a price
acceptable to both the City of Springfield and the selected firm), the
concurrence of the Springfield City Cpuncil and the annual availability of
an appropriation. .
II. NATU.RE OF SERVICES REQUIRED
A. General
The City of Springfield is soliciting the servic~s of qualified firms of
certified public accountants to audit-the financial statements of the City of
Springfield, the Metropolitan Wastewater Management Commission, the
Regional Fiber Consortium, aF)d the Springfield Economic Development
Urban Renewal Agency (SEDA) for the fiscal years ending June 30, 2008,
June 30, 2009 and June 30, 2010 with the possibility of up to two, one
year extensions. . These audits are to be performed in accordance with the
provisions contained in this request for proposals.' <
B. Scope of Work to be Performed
2008 RFP for Annual Audit Services
Page 7 of 50
AIS Attachment 2, Page 17 of 62
compliance matters contained in the Springfield City Charter, ordinances
and resolutions of the City of Springfield and applicable state and federal
regulations. In addition, the audit must be conducted in accordance with
the standards for financial audits set forth in the U.S. General Accounting
Office's Government Auditing Standards (1994), the provisions of the
Single Audit Act of 1984 (as amended in 1996) and the provisions of U.S.
Office of Management and Budget (OMS) Circular A-133, Audits of
States, Local Governments, and Non-Profit Organizations, the Minimum
Standards for Audits of Oregon Municipal Corporations and with all
applicable local, state and federal laws.
In connection witheachannual audit, the selected CPA firm will also be
required to issue one high-level Management Letter to the City Council .
..-. and one to the Metropolitan Wastewater Managem'ent Commission.
The selected audit firm will be required to make a presentation to the City .
Council, The Springfield Economic Development Urban Renewal Agency"
and to the Metropolitan Wastewater Management Commission. The .
presentation should include an overview of the CAFR or annual ~eport and
the management letter. .
Prior to the governing body presentations, the select~d firm shall meet
with management to review and discuss all presentation materials.
C. 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 basic financial statements of
the City of Springfield (The City) in conformity with generally
accepted accounting principles, including .an opinion on the fair
presentation of the combining and individual fund statements,
budgetary comparison information for non-major funds, other
supplementary information and schedules and the schedule of
expenditures of federal awards "in relation to" the audited financial
statements.
2. A report on compliance and certain items based on an audit of the
financial statements of The City performed in accordance with
Federal and Oregon auditing standards.
3. A report on compliance and internal controls over financial
reporting based on an audit of the financial statements of The City
performed in accordance with Government Auditing Standards.
2008 RFP for Annual Audit Services
Page 8 of 50
AIS Attachment 2, Page 18 of 62
4. A report on The City's compliance with requirements applicable to
each major program and on i'nternal controls over compliance in
accordance with OMS Circular A-133.
5. A report on the fair presentation of the separate comparative
financial statements of the Metropolitan Wastewater Management
Commission (MWMc) in conformity with generally accepted '
accounting principles.
6. A report on compliance and certain items based on an audit of the
financial statements of the MWMC' performed in accordance with
Federal and Oregon auditing standards.
7. Areport on compliance and internal control over financial reporting
based on an audit of the financial statements of MWMC performed
in accordance with Government Auditing Standards.
8. A report on the fair presentation of the separate comparative
financial ~tatements of the Regional Fiber Consortium (RFC) in
conformity with generally accepted accounting principles.
9. A report on compliance and certain items based on an audit of the
financial statements of the RFC pertormed in accordance with
Federal and Oregon auditing standards.
10.. A report on,compliance and 'internal control over financial reporting
based on an audit of the financial statements of the RFc performed
in accordance with Government Auditing Standards.
11. A report on the fair presentation of the separate comparative
financial statements of the Springfield Economic Development
Urban Renewal Agency (SEDA) in conformity with generally
accepted accounting principles.
12. A report on compliance and certain items based on an audit of the
financial statements of SEDA performed in accordance with
Federal and Oregon auditing standards.
13. A report on compliance and internal control over financial reporting
based on an audit of the financial statements of the SEDA
performed jn accordance with Government Auditing Standards.
14. A separate statement of negative assurance on the City of
Springfield's and MWMC's compliance with the covenants,
agreements and conditions contained in bond indenture ~
documents.
2008 RFP for Annual Audit Services
Page 9 of 50
AIS Attachment 2, Page 19 of 62
15. Secretary of State Summary of Revenues and Expenditures shall
be prepared for The City, MWMC, RFC and SEDA.
In the required report[s] on compliance and internal controls, the auditor
shall communicate any reportable conditions found during the audit. A
reportab~e 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 shaH be
identified as such in the report. Non-reportable conditions discovered by
the auditors shall be reported in a separate ,letter to management, which
shall be referred to in the report[s] on compliance and internal controls.
. The reports on compliance and internal controls shall include all instances --
of noncompliance. .
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 funding agency, the
Finance Director, the City Manager and the City Council.
Reporting to the Finance Director: Auditors shall assure themselves that
the City of Springfield-'s Finance Director 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
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
2008 RFP for Annual Audit Services
Page 10 of 50
AIS Attachment 2, Page 20 of 62
D. Special Considerations
1. The financial statements of the Metropolitan Wastewater
Management Commission and those of the Regional Fiber
Consortium are included as component units of the financial .
statements of the City of Springfield. It is required that the auditor
. also. perform the audit for those entities.
2: The Springfield Economic Development Urban Renewal Agency is
- a legally separate body, acting as the urban renewal agency of the
City of Springfield and is reported as a blended component unit for
reporting purposes. It is required that the auditor also issue an
audit report on this entity. '
3. The City has received the Government Finance Officers
Association of the United States and Canada (GFOA) Certificate of
Achievement of Excellence in Fina"ncial Reporting for 26
consecutive years. The City will send its comprehensive annual
financial report to the GFOA for review in each of the years
referenced in this request for proposal. It is anticipated that the
auditor will be required to provide special assistance to City of
Springfield to meet the requirements of the program.
4. The Schedule of Expenditures of Federal Awards and related
auditors report, as well as the reports on compliance and internal
controls are to be issued as part of the comprehensive annual
financial. report.' .
5. The City of Springfield may require the auditor's assistance to .
comply with new GASB requirements, as they are issued.
6. The City may r~quire, and expects to receive from the audit firm,
minor technical assistance during financial statementpreparation
or throughout the year relating to correct implementation of existing
GASB guidance, and answers to accounting, reporting and internal
control questions.
E. 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 from the date of the audit reports and will be
made available for examination by authorized representatives of the
cognizant Federal audit agency. the U.S. General Accounting Office, and
of the City. 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.
2008 RFP for Annual Audit Services
Page 11 of 50
AIS Attachment 2, Page 21 of 62
III. DESCRIPTION OF THE'GOVE~NMENT
A. Contact Information
The auditor's principal contact with the City of Springfield wiIJ be Mike
Crocker, Accounting & Audit Manager. or a designated representative. who
will coordinate the assistance to be provided by the City of Springfield to the'
auditor. The City of Springfield Finance Department is located in City Hall
at 225 Fifth Street, Springfield, Oregon. -
An organizational chart (Appendix B) is attached.
B. Background Information
City of Springfield
The City, located in central Lane County, has an estimated population of
55,320 and an annual budget of approximately $345 million (includinw the'
$187 million MWMC budget). The City's fiscal year begins on July 15 and
ends on June 30th. - . .
The City first incorporated in 1885. It adopted its current charter in 1895
to become a "home rule" City. The Charter governs all local and
municipal matters, except where specifically preempted by State law. .
State laws apply to local matters 'not covered by the Charter or ordinances
of the City.
The City government includes the following departments: City Manager,
Finance, Human Resources, Information Services, Fire & Life" Safety,
Police, Library, Public Works and Development Services.
The City is governed by a six member City Council and Mayor. . They are
elected to four year terms on a staggered basis. 'A Council member is
elected in each of the City'ssix wards and the Mayor is elected at large.
The mayor presides at meetings of the City Council.
Metropolitan Wastewater Management Commission
The Metropolitan Wastewater Management Commission (MWMC) was
established on February 9, 1977 through an intergovernmental agreement
between Lane County and the Cities of Eugene and Springfield. It was
formed to construct, operate and maintain regional sewage facilities.
The Commission is composed of seven voting members from the City of
Eugene, the City of Springfield and Lane County. The MWMc
Commissioners eject a Chairperson and Vice-Chairperson to serve for
one year. The Chairperson presides at meetings of the Commission.
Regional Fiber Consortium
The Regional Fiber Consortium was established on August 1, 1999
through an intergovernmental agreement between the Cities of
2008 RFP for Annual Audit Services Page 12 of 50
AIS Attachment 2, Page 22 of62
Springfield, Lowell, Coburg, Westfir, Oakridge, Chiloquin, Klamath Falls
and Merrill, and Lane and Klamath co~nties. It was formed for the
purpose of taking control of and managing certain fiber optic cable
transferred to the Consortium by Pacific Fiber Link, LCC, now 360
Networks, in consideration of right of way use fees payable to the cities
who are memb~rs of the Consortium. The City of Springfield performs all
administrative duties for the Consortium in accordance with the provrsions
of an intergovernmental agreement between the City of Springfield and
the Regional Fiber Consortium. The Consortium is governed by a ten
member board of directors.
Springfield Economic Development Urban Renewal Agency
The Springfield Economic Development Agency (SEDA) was organized
November 15, 2004 under the provisions of the Oregon Revised Statues,
Chapter 457, to undertake urban renewal projects and activities pursuant
to the Glenwood Urban Renewal Plan. On November 26; 2007, the City
Couhdl adopted an ordinance approving the Downtown Urban Renewal
Plan. The mission of the SEDA is to eliminate blight in areas within the
Agency's jurisdiction. The principal officials are comprised of seven
Springfield Council representatives and two Lane County representatives.
Administration is provided by City staff.
More detailed information on the governments can be found in the City of
Springfield's 2007 Comprehensive Annual Financial Report and the
separate annual financial reports for the Metropolitan Wastewater
Management Commission, Regional Fiber Consortium, and The
Springfield Economic.Development Agency. These wiJI be availab!e for
inspection at the pre-proposal conference or may be mailed upon request
thereafter. .
C. . Fund Structure
The City of Springfield uses the following funds in its financial. reporting:
e General Fund
It Special Revenue Funds
Street Fund
Jail Operations Fund
Special, Revenue Fund
Transient Room Tax Fund
Community Development Fund
Housing Rehab Revolving Fund
River Bend Development Fund
Building Code Fund
SEDA Glenwood General Fund
SEDA Downtown General Fund
200BRFP for Annual Audit Services
Page 13 of 50
AIS Attachment 2, Page 23 of 62
~p.
Fire Local Option Levy Fund
Police Local Option Levy Fund
. Debt Service Funds
Bancroft Redemption Fund -
Bond Sinking Fund
Regional Wastewater Debt Service Fund
SEDA Glenwood Debt Service Fund
SEDA Downtown Debt Service Fund
· Capital Project Funds
Sanitary Sewer Capital Fund .
Regional Wastewater Revenue Bond Capital Projects Fund
Development Assessment Capital Fund
Development Projects Fund
. ,Storm Drainage Capital Fund ."
Police Building Bond Capital Projects' Fund
SEDA Glenwood Capital Projects Fund
SEDA Downtown Capital Projects Fund
Regional Wastewater Capital Fund
Street Capital Fund
Storm Drainage SDc Fund
Sanitary Sewer Reimbursement SDC Fund
Sanitary Sewer Improvement SDC Fund
SDC Regional Wastewater Reimbursement Fund
SDc Regional Wastewater Improvements Fund
SDC Transportation Reimbursement Fund
SDC Transportation Improvement Fund
· Proprietary Funds
Sanitary Sewer Operations Fund
Regional Wastewater Fund
Ambulance Fund
Storm Drainage Operations Fund
Booth-Kelly Fund
Regional Fiber Consortium Fund
· Internal Service
Insurance Fund
Vehicle & Equipment Fund
SDC Administration Fund
· Fiduciary & Other
Agency Fund
Investment Fund
General Fixed Asset Account Gr
General Long Term Debt Account
GAAP Adjustment Fund
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 24 of 62
Fund Summary by Type:
Number of
Funds
General
Special Revenue
Debt Service
Capital Projects
Enterprise
I nt~rnal Service
Agency
1
9
2
5
3
3
1
Funds with
, Adopted
-Budgets
1
13
2
5
9
3
Discretely Presented Component Units
2
The City's accounting system is utilized by MWMc and the Regional Fiber
Consortium with accounting support. services provided by City Finance
Department Staff. In addition to their own separate financial statements,
MWMC and RFC are accounted for as enterprise funds of the City of
Springfield and are included as discreetly presented component units of
the City of Springfield in the Compreh~nsjve Annual Financial Report.
. MWMC consists of three budgeted funds and RFC consists of one
budgeted fund. .
D. Budgetary Basis of Accounting
The City of Springfield prepared its budgets on the modified accrual basis
for fiscal year ending June 3D, 2008.
E. Federal and State Awards
The following is a list of Federal and State Awards the City of Springfield
received in the current year or in previous years~
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 25 of 62
U.S. Department of Justice
Office Of Justice
Bureau of Justice Assistance
Bureau of Justice Assistance
Office of Community Oriented Policing Services
U.S. Department of Housing and Urban Development
HUD HOME Grant
HUD HOME Grant Program Income
EDI Grant
Community Development Block Grant
Community Development Block Grant Program Income
Highway Planning and Construction
Passed through Lane Council of Governments
U.S. Departmentof the Interior'
Passed through State of Oregon Historical Preservation
. Office
Historic Preservation Fund
Historic Preservation Fund
2008 RFP for Annual Audit Services
AIS Attachment 2, Page 26 of 62
CFDA
Number
16.738
16.738
16.710
14.239
.14.239.
14.218'
14.218
14.218
20.205
15.904
15.904
Page 16 of 50
F. Pension Plans
The City of Springfield participates in the following pension plans:
Employees covered by the Springfield Police Association and hired before
April 1, 1996, participate in a defined contribution pension plan. Wells
Fargo Bank is the trustee of this pension plan. Actuarial services for this
plan are provided by Milliman & Robertson, Inc.
Employees in qualified fire public safety positions and certain police public
safety employees hired after April 1, 1996, and all other general service
employees participate in the Oregon Public Employees Retirement
System.
G. Other Post Employment Benefits
The City provides postretirement health benefits for qualified retirees and
their eligible dependents
Further information about the city's other post employment benefits are
presented in the Notes to the Financial Statements of the 2007 CAFRs.
H. Component Units
The City of Springfield 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, two component units are
included in City of Springfield's financial statements.
Metropolitan Wastewater Management Commission .
with a fiscal year beginning on July 15t and ending on June 30th
Regional Fiber Consortium
with a fiscal year beginning on July 1st and ending on June 30th
I. Joint Ventures
The City occasionally participates in ventures with. other legal entities,
resulting in contractual orintergovemmental agreements, as a means to
pool resources, share costs, risks, and the rewards of providing goods or
services to the participants. As an example, the City has an ongoing
financial interest associated with the Oregon Department of Military, the
Bureau of Land Management, and the United States Forest Service for
the construction of an office building. Similarly, the City has entered into
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 27 of 62
an. intergovernmental agreement with' the City of Eugene and Lane Rural
Fire Protection Association for the Firemed marketing campaign.
J. Magnitude of Finance Operations
The finance department is headed by Robert Duey, Finance Director, and
consists of 11.3 FTE. The principal functions performed and the number
of employees assigned to each is as follows:
Function
Number of Employees
Administration
Budget '
Payroll
Accounts Receivable
Accounts Payable
Accounting & Reporting
Purchasing
Total FTE
1.00
2.25
1.25
.80
1.00.
4.00
1.00
11.30
K. Accounting Environment
. The City of Springfield uses client/server and Internet/Intranet
technologies for its accounting and reporting software systems. The City
utilizes PeopleSoft applications for its financial systems, general ledger,
accounts payable, accounts receivable, fixed assets, payroll, and human
resources.
The budgeting process utilizes American Management Systems BRASS
and SBFS for budget preparation, position budgeting, and forecasting.
L. Availability of-Prior Audit Reports and Working Papers
Interested proposers who wish to review prior years' audit reports and
management letters should contact Mike Crocker by email at,
mcrockerCCUcLsorinofielCLor.us or by phone at (541)726-3791. The City of
Springfield will use its best efforts to make prior audit reports and
supporting working papers available to proposers to aid their response to
this request for proposals.
IV. TIME REQUIREMENTS
A. Schedule for Selection Process
The following is a list of key dates up to and including the date proposals
are due:
Proposals Advertised
February 28 & March 4, 2008
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 28 of 62
Pre-:proposal conference
Minutes Posted to Website
Proposals Close
Finalist Presentations!1 nterviews
Notice of J ntent to Award
Contract Awarded
March 7 J 2008, 2:00 PM local time
March 11,2008
March 20,2008,2:00 PM local time
March 25,2008 (approximately)
March 28, 2008 (approximately)
April 21,2008 (approximately)
B. Audit Schedule for the fiscal year ending June 30, 2008:
(A similar time schedule will be developed for audits of future fiscal years
by May 1 of each year, except that in subsequent years, preliminary
fieldwork should be scheduled prior to fiscal year-end.)
Written work plan and schedule
.. Compliance work .
Begi.n fieldwork
First draft to auditors
. Auditor comments due to City
Revised CAFR to auditors
Final CAFRand auditor reports
cAFR to printing
,Management Jetter draft
May/June
May/June
October 6 - 10, 2008
November 19,2008
November 26,2008
December 3, 2008
December 8, 2q08
First week of December
December '
It is critical for the city to meet our target date for submission of the CAFR
to the Secretary of State and the, Government Finance Officers
Association that the dates in this section are achievable and that the
auditors have sufficient staff resources to be responsive during late
November and December.
C. Meetings
The following meetings would be required with the accounting and audit
manager:
Initial planning meeting
Progress meeting during field work phase
Post field work phase progress
May
Weekly
Every 2-3 weeks
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,
documentation and explanations. The finance department staff will be
able to provide electronic copies of ledgers and trial balances. We will
also be able to provide limited access to the financial system so that
certain testing can be done without printing hard-copy reports. The
preparation of confirmations wiJI be the responsibility of the auditor.
2008 RFP for Annual Audit Services Page 19 of 50
AIS Attachment 2, Page 29 of 62
B. ' Information Services Assistance
Paula Guthrie, System Administrator, will be availabie'to-show the'
auditors the physical environment of the computer equipment, describe
access controls, input controls, operator security controls, output controls,
contingency plans, virus protection controls and any other procedures or
. 'processes the City of Springfield has in place to safeguard the electronic
data environment. Paula Guthrie will also be available to review system
documentation with the auditors.
Any contact with Paula Guthrie should be coordinated with the City of
Springfield Accounting & Audit Manager.
C. City Accounting Staff will provide:
1. Prepare all entries for budget basis close and trial balances
2. Prepare all entries for GAAP basis close, year end adjustments
and trial 'balances
3. Prepare aU work papers required by auditors in support of all tria!
balances and financial statements
. 4. Produce complete CAFR draft including .basic financial statements,
notes to basis financial statements,' required supplementary
information, other supplementary information, supplemental
schedules, statistical tables, and schedule of expenditures of
federal awards
D. Work Area, Telephones, Photocopying and FAX Machines
The City of Springfield will provide the auditor with reasonable work
space, desks and chairs. The auditor will also be provided with access to
telephone lines, photocopying facilities and FAX machines subject to the
following restrictions:
Long distance telephone calls will be billed back to the auditors.
VI. PROPOSAL REQUIREMENTS
A. . General Requirements
1. Pre-proposal' Conference
An optional conference for firms interested in submitting proposals
will be held on March 7, 2008, 2:00 PM local time in Library
Meeting Room #1 at the City of Springfield, City Hall, 225 Fifth
Street, Springfield, Oregon.
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page ~O of 62
Both verbal and written questions will be accepted during the
conference. Minutes of the pre-proposal conference will be posted
to the City website at www.cLsorinofield.or,us on or before March
11 t 2008.
2. Inquiries
Inquiries conceming the request for proposals and the subject of
the request for proposals must be made to:
Mike Crocker
Accounting and Audit Manager
City of Springfield
225 5th Street
Springfield, Oregon 97477'
mcrocker@cLspnnqfield . or. us
(541) 726-3791
Contact with other City officials may be grounds for
'disqualification. '
3. Submission of Proposals
Two proposals are required. A "Technical Proposal" (see lIall
below) and a IISealed Dollar Cost Proposal" (see lib" below). Do
not submit any. dollar units or total cost in the IITechnical Proposal." ,
The '~Sealed Dollar" proposal should contain the pricing
information. '
The following material is required and must be received not later
than 2:00 PM local time, March 20, 2008, Attn: Leslie Wilson,
Management Analyst, City of Springfield Finance Dept., for a
proposing firm to be considered:
a. A master copy (so marked) of a Technical Proposal and five
copi~s 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
2008 RFP for Annual Audit Services Page 21 of 50
AIS Attachment 2, Page 31 of 62
Hi. 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 thru June 30, 2008.
iv. Detailed Proposal
The detailed proposal should follow the order set forth
in Section VI 8 of this request for proposals.
v. Executed copies of Proposer Warranties, attached
to this requestfor proposal (Appendix C)
b~ A master copy (so marked) of a Dollar Cost Proposal and five
copies in a separate sealed opaque envelope marked as
follows:
SEALED DOLLAR COST BID
PROPOSAL FOR
PROFESSIONAL AUDITING SERVICES
FOR
CITY OF SPRINGFIELD, OREGON
,METROPOLITAN WASTEWATER MANAGEMENT COMMISSION
SPRINGFIELD ECONOMIC DEVELOPMENT URBAN RENEWAL AGENCY
AND
REGIONAL FIBER CONSORTIUM'
[OA TE]
c. Proposers should send the completed proposal consisting of
the two separate envelopes to the following address:
Leslie Wilson
ManagementAnalyst
City of Springfield
225 Fifth Street
Springfield, Oregon 97477
2008 RFP for Ann'ual Audit Services
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AIS Attachment 2, Pa'ge 32 of 62
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 City of Springfield, the
Metropolitan Wastewater Management Commission and the
Regional Fiber Consortium 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 aJLthe 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 '1 a, must be included. They represent the criteria
against which the proposal will be evaluated;
2. Independence
The firm should provide an affirmative statement that it is
independent of the City of Springfield. the Metropolitan Wastewater
Management Commission, the Springfield' Economic Development
Urban Renewal Agency, and the Regional Fiber Consortium as
defined by the U.S. General Accounting Office's Government
Auditing Standards (1994).
The firm should also list and describe the firm's professional
relationships involving the City of Springfield, the Metropolitan
Wastewater Management Commission, or the Regional Fiber
Consortium for the past five (5) years, together with a statement
explaining why such relationships do not constitute a conflict of
interest relative to performing the proposed audit.
2008 RFPfor Annual Audit Services
Page 23 of 50
AIS Attachment 2, Page 33 of 62
In addition, the firm shall give the City of Springfield written notice
of any professional relationships with any of the above entities
entered into during the period of th.is agreement:
. 3. License to Practice in Oregon
An affirmative 'statement should be included that the firm and all
assigned key professional staff are properly licensed to practice in
Oregon.
You, if you are a sole practitioner, or one of the shareholders or
partners of your firm must have a current Oregon Municipal Audit
license.
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.
The firm is also required to submit a copy of the report on its most
recent external quaJity control review, with a statement whether that ,
quality control review included a review of specificgovemment
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 (3) 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 (3) 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 Oregon. Provide information on the
government auditing experience of each person, including
information on relevant continuing professional education for the
past three (3) years and membership in professional organizations
relevant to the performance of this 'audit.
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 34 of 62
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. '
Provide information on the experience of the specific staff to be
assigned to this engagement with "respect to auditing computerized
accounting systems.
The proposer should identify the extent to which staff to be
assigned to the audit reflect the City of Springfield'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 City of Springfield. However, in either case, the
City of Springfield retains the right to approve or reject
replacements. '
Consultants and firm spedalists mentioned in response to this
request for proposal can only be changed with the express prior
written permission of the City of Springfield, which r~tains 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.
The proposer should indicate their level of commitment to providing
continuity at key staff levels.
6. References
For each of the last two years, list by year, the governmental
entities in Oregon that have been audited by your firm's proposing
office and the name of the key contact person of the entity at that
time, or the current key contact person if known. Each annual list
"should be further subdivided into clients who are currently audit
clients and those which ar~ no longer your clients. Please briefly
describe the scope of each engagement specifically indicating
whether there was a Single Audit examination performed.
A copy of two 6/30/07 CAFRs and management letters which you
issued for a city of comparable size (or a municipality as similar to
the City of Springfield as possible) must also be enclosed with your
proposal.
2008 RFP for Annual Audit Services
Page 25 of 50
AIS Attachment 2, Page 35 of 62
- .."
Please also indicate which of these engagements resulted in the
awarding of a GFOA Certificate of Achievement for Excellence in
-Financial Reporting. The City expects your response to follow the
sample format indicated below.
.2006-07 Governmental CHents
Municipality Client Contact Eamed Single
Certificate? Audit?
. Current ,
clients ,
City A Xxx Y/N Y/N
Description:
City B Xxx I Y/N Y/N
Description:
Not current
clients
City A Xxx Y/N ., Y/N
Description:
City 8 Xxx Y/N Y/N.
Description:
2005-06 Governmental Clients
Municipality- Client Contact Earned Single
Certificate? Audit?
Current
clients
City A Xxx Y/N Y/N
Description: I
City B Xxx Y/N Y/N
Description:
Not current
clients
City A Xxx Y/N Y/N
Description: I
City B Xxx I Y/N Y/N
Description:
Specifically answer uHave there been any disciplinary actions
taken against you or members of your firm by the Board of
Accountancy within the past (5) five years?" If your answer is
yes, please give a detailed explanation and the results of the
disciplinary actions.
2008 RFP for Annual Audit Services
Page 26 of 50
AIS Attachment 2, Page 36 of 62
7. Specific Audit Approach
The Technical 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 the City of Springfield's, MWMC's and
RFC's budget and related materials, council minutes,
organizational charts, manuals and programs, and financial and
other management information systems.
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
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 City of Springfield's MWMC's and
RFC'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
8. 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 City of
Springfield.
9. Report Format
The proposal shoul~ include sample formats for required reports.
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 37 of 62
C. Sealed Dollar Cost Proposal
1.
Total All-Inclusive Maximum Price
The sealed dollar cost proposal 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 proposed is to contain all direct and indirect
costs including all out-of-pocket expenses. The bid should be
stated separately for the City of Springfield, MWMC and RFC.
The City of Springfield 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 subm'it the bid. and
authorized to sign a contract with the City of Springfield.
c. A total. all-inclusive maximum price, for the first year of the
three-year engagement; and a total all-inclusive maximum
price for each of the subsequent two years of the
engagement. or, a basis for determining the total audit cost
for the remaining years (such as the increase in the
Consumer Price Index).
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 an-inclusive maximum price. The cost of special services
described in Section I E of this request forproposal 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 and Reimbursement Rates
Out-of-pocket expenses for firm personnel (e.g.. travel, lodging and
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 38 of 62
food) will be reimbursed at the rates used by the City of Springfield
. for its employees. All estimated out-of-pocket expenses to be
reimbursed should be presented on the second page of the sealed
dollar cost bid in the format provided in the attachment (Appendix
D). All expense reimbursements will be charged against the total.
all-inclusive maximum price submitted by the firm..
In additiont a statement must be included in the sealed dollar cost
bid stating the firm, will accept reimbursement for travelt lodging and
subsistence at the prevailing City of Springfield rates for its
employees.
- 4. Rates for Additional Professional Services
If it should become necessary forthe City of Springfield 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
the City of Springfield and the firm. Any such additional work
agreed to between the City of Springfield 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 (100/0) will be withheld from each
billing pending delivery of the firm's final reports. All retained funds
will be paid upon completion of presentation to the Springfield City
Council and Metropolitan Wastewater Management Commission.
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 39 of 62
VII. EVALUATION PROCEDURES
. A. Auditor Selection Panel
Propo~als submitted will be evaluated by an Auditor Selection Panel.
B. Review of Proposals
A subset of the Auditor Selection Panel will use a'point formula during the
screening process to score proposals. The proposals will be examined to
determine that the firm satisfies the mandatory elements as identified in
section C.1. Firms who do not meet the mandatory elements will be
eliminated from further consideration.
A subset of the Audit Selection Panel will use the selection criteria as
identified in section C.2to score each technical proposal. At this point,
firms with an unacceptably low technical scqre wiIJ be eliminated from
further consideration. . -.
. After the 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.
A group of finalist firms will be selected based on the total technical score.
The finalist firms will be invited to make oral presentations to'the full Audit
Selection Panel.
The City of Springfield reserves the right to retain all proposals submitted'
and use any idea in a proposar 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
selection' criteria and price. The following represent the criteria which will
be considered during the evaluation process.
1. Mandatory elements
a. The audit firm is independent
b. The auditor and firm are properly licensed by the Oregon
State Board of Accountancy to do professional business in
Oregon.
2008 RFPfor Annual Audit Services
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AIS Attachment 2, Page 40 of 62
c. The auditor, if a sole practitioner; or one of the shareholders
or partners of the firm have a current Oregon Municipal
Audit license.
d. The firm has no conflict of interest with regard to any oth.er
work performed by the firm for the City of Springfield,
MWMC, SEDA, orRFC.
e.
The firm does not have a record of substandard work,
verifiable by communication with the Oregon State Board of
Accountancy
f. The firm has successfully participated in the GFOA award
program for CAFRs.
g. The firm has assisted similarly sized Cities in CAFR
preparation.
h. The firm adheres to the instructions in this request for
proposal on preparing and submitting the proposal.
2. Selection criteria
The following criteria will be applied and weighted according to
importance:
Criteria Possible
Points
Continuity at key staff levels 5
Membership in AICPA peer review program 10
Quality of annual audit and reports to 10
management as evidenced by sample
reports prepared for other cliehts
Quality of verbal and written communications 10
Depth of municipal audit experience,
particularly of Oregon governmental units of 15
a similar size and complexity
Depth of municipal audit experience
performing Single Audit examinations, .15
particularly audits of grants of similar size
and complexity
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 41 of 62
Number and size of municipal clients 15
receiving the GFOA
Depth of experience with computerized 15
systems
Size of staff must be large enough to handle
an audit of this size on a timely basis 15
Qualifications of key individuals to be
assigned to the audit, especiaHy regarding
up-to-date and continuing ~aining and
experience in governmental accounting, and ' 15
Single Audit examinations.
References I 15
Cost 25
I nterviews/Presehtations 35
The maximum points available are 200 points.
D. Oral Presentations
After the technical proposals have been evaluqted and finalist firms have
been identified, those firms will be invited to make an oral presentation to
. the Audit Selection Panel. Such presentations will provide firms with an
opportunity to answer any questions the Audit SeJection, Panel may have
on a firm's proposal. '
E. Negotiation of Agreement
City reseNes the right to negotiate a final contract which is in the best
interest of City considering cost effectiveness and quality control. Once a
tentative selection has been made by the evalu~tion committee, Staff will
attempt to negotiate a contract with the preferred candidate. Jf the
negotiations are not successful, staff will negotiate with other qualified
vendors in the order of their respective qualifications until an agreement is
reached or staff decides to terminate the selection process. If contract
negotiations are successful, the contract will be forwarded to the
appropriate City authority for approval.
F. Final Selection
The City of Springfield will select a firm based upon the recommendation
of the Audit Selection Panel with approval by the council Finance Director
and The City of Springfield City Council.
It is anticipated that a firm will be recommended by March 28,2008.
2008 RFP for Annual Audit Services Page 32 of 50
AIS Attachment 2, Page 42 of 62
Following the intent to award notification, it is expected a contract will be
executed between both parties by May 1, 2008.
G. Right to Reject Proposals
Sub.mission 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 City of Springfield and the firm selected.
The City of Springfietd/MWMC reserves the right to reject any or all of the
proposaJs not in. compliance with prescribed public procurement.
procedures, waive minor irregularities not affecting substantial rights, and
may for good cause reject any or all proposals upon a finding by the City
of Springfield and MWMC it is in the public interest to do so.
H. Complaints
Any firm submitting a proposal to the City of Springfield/MWMC, who is
adversely affected by the City's awarding of the contract to another firm,
has 14 days after issuance of the Notice of Intent to Award the Contract,
to submit a written protest of the award to the City of Springfield. Such
right to protest shall confirm to the requirements of Oregon Administrative
Regulations, 137-030-0104 and specify the grounds upon which the
protest is based. An adversely affected firm must exhaust all avenues of
administrative review and relief before seeking judicial review of the City's
contract award. Concerns must be submitted to:
Robert Quey
Finance Director
City of Springfield
225 Fifth St.
Springfield OR 97477
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 43 of 62
APPENDIX A
FINDINGS FROM RECENT EXTERNAL AUDITS
External Audits:
Report
Fi nd ing
No findings.
2008 RFP for Annual Audit Services
AIS Attachment 2, Page 44 of 62
Resolved?
Page 34 of 50
APPENDIX B
Organization Chart
\
Citizens of Springfield
I
I Mayor and City Council I
I
I
-, City Attorney I I City Manager I I Municipal Judge /I
r'
City Manager's Office Development Services
I
I Finance I I Fire and Life Safety I
I
I Human Resources I Information Technology
I
Library Police
I I
I
I Public Works I
r I
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APPENDIX C
PROPOSER WARRANTIES
A. Proposer warrants that it is wiJling and able to comply with State of Oregon laws
with respect to foreign (non-state of Oregon) corporations.
B. Proposer warrants that it is willing and able to obtain an errors and omissions
, insurance policy providing a prudent amount of coverage for the willful or
negligent acts, or omissions of any officers, employees or agents thereof.
i'
C.
Proposer warrants that it will not delegate or subcontract its responsibilities under
an agreement without the prior written permission of the City of Springfield
. 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:
2008 'RFP for Annual Audit Services
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AIS Attachment 2, Page 46 of 62
APPENDIX D
. Page 1
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THE 2008 FINANCIAL STATEMENTS
Hours
Standard
Hourty
Rates
Quoted
Hourly
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)
Out-of-pocket expenses:
Meals and lodging
Transportation
Other (specify):
Total all-inclusive maximum price for 2008 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.
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 47 of 62
APPENDIX D
Page 2
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THE 2008 FINANCIAL STATEMENTS:
COMBINING SCHEDULE - ALL SERVICES
DESCRIBED IN RFP SECTION II E
Nature of Service To Be Provided
Schedule
Total Price
EACH SERVICE DESCRIBED IN RFP SECTION II E SHOULD BE SUPPORTED BY
AN INDIVIDUAL SCHEDULE IN THE FORMAT PROVIDED ON PAGE 3 OF THIS
APPENDIX.
2008 RFP for Annual Audit Services
AIS Attachment 2, Page 48 of 62
Page 38 of 50
Appendix D
Page 3
SCHEDULE OF PROFESSIONAL FEES'AND EXPENSES
FOR THE AUDIT OF THE 2008 FINANCIAL STATEMENTS:
SUPPORTING SCHEDULE FOR [NAME OF SERVICE]
Hours
Standard,
Hourly
Rates
Quoted
Hourly
Rates
Total
Partners
Managers
Supervisory
staff
Staff
Other (specify):
Subtotal
Out-of-pocket expenses:
Meals and"lodging
Transportation
Other (specify):
Total price for [NAME OF SERVICE]
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
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 49 of 62
Appendix E
CITY OF SPRINGFIELD
INDEPENDENT CONTRACTOR AGREEMENT
(Type 3: For Personal Services Contracts Requiring Professional Liability Insurance)
Dated:
Parties:
("CITY')
and
("l ndependent Contractor")
Additional Independent Contractor Information:
A. Type of Entity: 0 Sole Proprietorship 0 Partners 0 Umited Liability Company D Corporation
B. Address:
C. Telephone:
D. Fax No:
E. SSN or Fed. J.D. No:
F. Professional License(s) No:
-'G. Oregon Agency Issuing License:
H. Foreign Contractor DYes D No
(Foreign means not domiciled in or registered to do business in Oregon) See Exhibit 8(11).
CITY-Account Number(s) To Be Charged (Include Percentages):
Account Number
Percentage
In consideration of the mutual covenants contained herein, the parties agree to the following terms,
provisions and conditions:
1. Payment by CITY. CITY shall pay Independent Contractor according to the sum
and schedule described on Attachment 111 II attached hereto and incorporated herein
by this reference and in an amount not to exceed $
2. Services to be Performed by Independent Contractor. Independent Contractor
shall perform the services described on Attachment 1.
3. Term. This Agreement is effective as of the date first set forth above and shall
continue until J unless earlier terminated in accordance with
the provisions of this Agreement or by mutual consent of the parties.
4. Independent Contractor Status. By its execution of this Agreement, lndependent
Contractor certifies its status as an IIlndependent Contractor" as that term is used
2008 RFP for Annual Audit Services Page 40 of 50
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under the laws of the State of Oregon, and that all performance of any labor or
services required to be performed by Independent Contractor under the terms of this
Agreement shall be performed in accordance with the standards set forth in ORS
670.600, and as more specifically set forth on Exhibit lIA" attached t)ereto and
incorporated herein by this reference.
5. Conformance with Oregon Public Contracts Law (ORS Chapter 279).
Independent Contractor shall comply with aU applicable provisions of Oregon law for
public contracts, including, but not limited to ORS 2798.220, ORS 2798.225, ORS
2798.230, and ORS 2798.235, and as more fully set forth on Exhibits "All and u8n
attached hereto and incorporated herein by this reference.
6. Work Performed. The work to be performed by Independent Contractor includes
services generally performed by Independent Contractor in his/herlits usual line of
business.
7. Tax duties and Liabilities. Independent Contractor shall be responsible for all
federal, state and local taxes, if any, applicable to any payments received pursuant
to this Agreement, including but not limited to income tax, payroll tax, social security
and self-employment tax. CITY shall not withhold, pay, or in any other manner be '
responsible for payment of any taxes on behalf of Independent Contractor.
8. Reimbursement Of Expenses. Independent Contractor shall not be entitled to
reimbursement by CITY for any expenses incurred by Independent Contractor
unless otherwise agreed in writing.
9. Materials 'and Supplies. Independent Contractor shall supply all materials and
supplies needed to perform the services required unless otherwise agreed in writing.
10. No Authority To Bind CITY. Independent Contractor shall have no authority to
enter into contracts on behalf of CITY, it's officers, agents and employees. This
Agreement shall notcreate a partnership or joint venture of any sort between the
parties.
11. Federal Employment Status. In the event payment made pursuant to this
. Agreement is to be charged against federal funds, Independent Contractor hereby
certifies that it is not currently employed by the Federal Government and the amount
charged does not exceed Independent Contractor's normal charge for the type of
services provided
12. Indemnification and Hold Harmless. Independent Contractor shall defend,
indemnify and hold harmless City from and against all liability or loss and against all
claims or actions. based upon or arising but of damage or injury to persons or
property caused by or sustained in connection with the performance of this Contract
by Independent Contractor except, pursuant to ORS 30.140, for losses, claims, or
actions resulting from the sole negligence of City.
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The Independent Contractor shall ,assume all responsibilities for the work, and bear
all losses and damages directly or indirectly resulting to the. Independent Contractor,
the City, or to others on account of the character or performance of the work,
unforeseen difficulties, accidents, or any other cause whatsoever. The Independent
Contractor shall assume defense of, indemnify and save harmless the City,its
officials, agents, and employees from all claims, liability, loss, damage and injury of
every kind, nature and description, directly or indirectly resulting from activities in the
performance of the Contract, the ownership, maintenance or use of motor vehicles
hi connection therewith, or the acts, omissions, operations, or conduct of the
Independent Contractor or any Subcontractor under the Contract or any way arising
out of the Contract, irrespective of whether any act. omission or conduct of the-City
connected with the Contract is a condition or contributory cause of the claim, liability
loss, damage or injury and irrespective or whether act, omissioh, or conduct of the
Independent Contractor or Subcontractor is merely a condition rather than a cause
of a claim, liability, loss damage or injury. The Independent Contractor shall not be
Hable for nor be required to defend or indemnify, the City relative to claims for
damage or damages resulting solely from acts or omissions of the City, its officials,
agents or employees. The absence of or inadequacy of the liability insurance.
required in section 13 below shall n~t negate Independent Contractor's obligations
in this paragraph.
13.lnsurance.
13.1. Generallnsurance~ The" Independent Contractor shall' maintain in force for
the duration of this agreement a Commercial General Liability insurance policy
written on an occurrence basis with limits not less than $1,000,000 per
occurrence and $2,000,000 in the aggregate. The policy will contain a "per
project" aggregate endorsement. Automobile Liability (owned, non-owned and
. hired) insurance with limits not less than $1,000,000 per occurrence shall be
maintained. The City, its employees, officials and agents will be named as an
Additional Insured where operations are being conducted related to this
contract. on the General Liability policy as respects to work or services
performed under this agreement to the extent that the death or bodily injury to
persons or damag,e to property arises out of the fault of the Independent
Contractor or the fault of the Independent Contractor's agents, representatives
or subcontractors. This insurance will be primary over any insurance the City
may carry on its own.
13.2. Professional Liability. Independent Contractor shall maintain in force
during the duration of this Agreement (and, if it is a claims made policy, for a
year following completion of the project) a professional liability policy,
approved by the City's Risk Manager as to terms, conditions and limits.
13.3. Asbestos Abatement (Only applicable to Asbestos
Contracts) The Commercial General Liability policy
shall be written on a form that meets the following
criteria and must be ASBESTOS SPECIFIC as follows:
a. A full occurrence form, or
b. A limited occurrence form with at least a
three-year (3) tail, or
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 52 of 62
c. A claim made form with a three'-year (3)
tail.
13.4. Workers' Compensation. Independent Contractor shall provjde and maintain
, workers' compensation coverage for its employees, offic~rs, ageots, or partners,
as required by applicable workers' compensation laws. ff Independent
Contractor is exempt from coverage,. a written statement signed by Contractor
so stating the reason for the exemption shall be provided to the City.
13.5. Evidence of Coverage. Evidence of the required coverages issued by a
, company satisfactory to the City shall be provided to the City by way of a
certificate of insurance before any work or services commence. A 3D-day
notice of cancellation or material change in coverage clause shall be included.
It is the Independent Contractor's obligation to provide the 30 days notice if
not done so by the Independent Contractor's insurance company(s). Failure'to
maintain the proper insurance shall be grounds for immediate termination of
this contract.
13.6. Equipment and Material. The Independent Contractor shall be responsible
for any loss, damage, or destruction of its own property, equipment, and
materials used in conjunction with the work.
13.7. Subcontractors. The lndependent Contractor shall require all subcontractors to
provide and maintain genera/liability, auto liability, professional liability (as
applicable), and workers' compensation insurance with coverage's equivalent to
, those required of the general contractor in this contract. The Independent
Contractor shall require certificates of insurance from all subcontractors as
evidence of coverage.
13.8. Exception or Waivers. Any exception or waiver of these requirements shall
be subject to review and approval from the City's Risk Manager.
13.9 Railroad Protective Liability Coverage. If work being performed under this
agreement is near railroad tracks or a railroad right of way and the Railroad
requires special insurance (for example.: Railroad Protective Liability
Coverage) Independent Contractor will be responsible for meeting the
Railroad insurance requirements before any work commences. Any insurance
required to be purchased by the Railroad is in addition to the insurance
required by the City.
14. Termination. The performance of work under this Agreement may be terminated by
CITY, in whole or in part, whenever for any reason CITY shall determine that such
termination is in the best interest of CITY. Any such termination shall be effected by
delivery to the Independent Contractor of a Notice of Termination specifying the
extent to which performance of the work under the Agreement is terminated and the
date on which such termination is effective. Upon delivery to the Jndependent
Contractor of a Notice of Termination under this paragraph, the Independent
Contractor and CITY shall, by agreement, make an appropriate written modification
to this Agreement goveming completion of portions of the independent Contractors
work and payment therefore by CITY.
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 53 of 62
15. Rights In Data. All original written material, including programs, card decks, tapes,
listings, and other documentation originated and prepared for CITY pursuant to this
Agreement, shall become exclusively the property of CITY. The ideas, concepts,
know-how, or techniques developed during the course of this Agreement by
Independent Contractor personnel can by used by either party in any way it may
deem appropriate. Material already in JndependentContractor's possession,
independently developed by Independent Contractor outside the scope of this
Agreement, or rightfully obtained by Independent Contractor from third parties, shall
belong Independent Contractor. This agreement shall not preclude Independent
Contractor from developing materials which are competitive, irrespective of their
similarity to materials which might be delivered to CITY pu'rsuant to this Agreement.
Independent Contractor shall not, however, use any written materials developed
under this Agreement in developing materials for others, except as.provided in this
section.
16.Confidentiafity. During the course of performance hereunder, Independent
Contractor or its agent, employees, or contractors, may receive confidential
information. Independent Contractor agrees to use its best efforts to maintain the
confidentiality of such information and to inform each agent and employee
performing services of the confidentiality obligation that pertains to such information.
17.AssignmentlSubcontract. Independent Contractor shall not assign, sell, transfer,.
subcontract or sublet rights, or delegate responsibilities under this agreement, in
whole or in part, without the prior written approval of CITY. No such written approval
shall relieve Independent Contractor of any obligations of this Agreement, and any
transferee or subcontractor shall be considered the agent of Independent
Contractor. Independent Contractor shall remain liable as between the original.
parties to this Agreement as if no such assignment had occurred.
18. Successors In Interest.. The provisions of this Agreement shall be binding upon
and shall inure to the benefit of the parties to this Agreement and their respective
successors and assigns.
19.Compliance With All Government Regulations. .Independent Contractor shall
comply with all Federal, State and local laws, codes, regulations and ordinances
applicable to the work performed under this Agreement. Failure to comply with such
requirements shall constitute a breach of contract and shall be grounds for
termination of this Agreement. Damages or costs resulting from noncompliance
shall be the sole responsibility of Independent Contractor.
20.Attorney Fees. In the event a lawsuit of any kind is instituted on behalf of CITY to
enforce any provision of this Agreement, Independent Contractor shall pay such
additional sums as the Court may adjudge reasonable for attorney fees plus all
costs and disbursements at trial and on any appeal.
21. Force Majeure. Neither party to this Agreement shaH be held responsible for delay
or default caused by fire, riot, acts of God and/or war which is beyond that partis
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 54 of 62
reasonable control. CITY may terminate this Agreement upon written notice after
determining such delay or default will unreasonably prevent successful performance
of the Agreement.
22.Assistance Regarding Patent And Copyright Infringement. In the event of any
claim or suit against CITY on account of any alleged patent or copyright.
infringement arising out of the performance of this Agreement or out of the use of
any material furnished or work or services performed hereunder, Independent
Contractor shall defend CITY against any such suit or claim and hold CITY harmless
from any and all expenses, court costs, and attorney's fees in connection with such
claim or suit. .
"\',
23. Severability. If any provision of this Agreement is declared by a court to be illegal
or in conflict with any law, the validity of the remaining terms and provisions shall not
be affected; and the rights and obligations of the parties shall be construed and
enforced as if the Agreement did not contain the particular provision held to be
invalid.
24.Access To Records. CITY and its duly authorized representatives shall have
access to books, documents, papers and records of Independent Contractor which
are directly pertinent to this Agreemerit for the purpose of making audit,
examination, excerpts and transcripts.
25. Waiver. Failure of CITY to enforce any provision of this Agreement shall not
constitute a waiver or relinquishment by CITY of the right to such performance in
the future nor of the- right to enforce any other provision of this Agreement.
26.Amendments. The terms of this Agreement shari not be waived, altered, modified,
supplemented or amended in any manner whatsoever, without prior written approval
of CITY, No modification of this Agreement shall bind either party unless reduced to
writing and subscribed by both parties, or ordered by a Court.
27. Nondiscrimination. Independent Contractor shall comply with all applicable
requirements of Federal and State civil rights and rehabilitation statutes, rules and
regulations. .
28. Dual Payment Independent Contractor shall not be compensated for work
performed under this contract from any CITY agency other than the agency which is
a party to this contract.
29. Remedies. This Agreement shall be governed by and construed in accordance with
the laws of the State of Oregon, and any litigation arising out of this Agreement shall
be conducted in the courts of the State of Oregon, County of Lane.
30. Entire Agreement. This Agreement signed by both parties is the parties' final and
entire Agreement and supersedes aU prior and contemporaneous oral or written
communications between the parties, their agents and representatives. There are
2008 RFP for Annual Audit Services Page 45 of 50
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no representations, promises, terms, conditions or obligations other than those
contained herein.
. IN WITNESS WHEREOF the parties have executed this Agreement to be effective the date
first set forth above.
CITY OF SPRINGFIELD:
INDEPENDENT CONTRACTOR .
By:
Name:
Title:
Date:
By:
Name:
Title:
Date:
2008 RFP for Annual Audit Services
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AIS Attachment 2, Page 56 of 62
EXHIBIT "A"
CITY OF SPRINGFIELD
INDEPENDENT CONTRACTOR AGREEMENT
Independent Contractor Status
All performance of any labor or services required to be performed by Independent Contractor
shall be performed in accordance with the standards set forth in ORS 670.600 (2005), and as
follows: .
. A person is customarily engaged in an independently established business if anv three of the
following six requirements are met:
1. The person maintains a business location:
a. That is separate from the business or work location of the person for whom the
services are provided ; or,
b. That is in a portion of the person/s residence and that portion is used primarily for
the business. .
2. The person bears the risk of loss related to the business or the provision of services as
shown by factors such as:
a. The person enters into fixed-price contracts;
b. The person is required to correct defective work;
c. The person warrants the services provided; or,
d. The person negotiates i!1demnification agreements or purchases liability
insurance, performance bonds or errors and omissions insurance.
4. The person provides contracted services for two or more different persons within a 12-
month period, or the person routinely engages in business advertising, solicitation or
other marketing efforts reasonably calculated to obtain new contracts to provide similar
services.
5. The person makes a significant investment in the business, through means such as:
a. Purchasing tools or equipment necessary to provide the services;
b. Paying forthe premises or facilities where the services are provided; or
c. Paying for licenses, certificates or specialized training required to provide the
services.
6. The person has the authority to hire other persons to provide or to assist in providing the
services and has the authority to fire those persons.
EXHIBIT "B"
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City of Springfield
Public Contracts
Confo~ance with Oregon Public Contractors Laws
Pursuant to Oregon ~aw, every pub~:i.c contract shal.l' contain the fo~~ow.ing concl.i tions:
1) Make payment promptly, as due, to all persons supplying to the contractor labor or
material for the p~rfor.mance of the work provided for in the contract. ORS 279B.220(1)
2) Pay all contributions or amounts due the Industrial Accident Fund from the contractor or
subcontractor incurred in the performance of the contract. ORS 279B.220(2).
3) Not permit any lien or claim to be filed or prosecuted against the state or a county,
school district,. municipality, municipal corporation or subdivision thereof, on account of
any labor or material furnished. ORS 279B.220(3).
4) Pay to the Department of Revenue all sums withheld from employees under ORS 316.167. ORS
279B.220(4).
5) If the agreement is for lawn and landscape maintenance, it shall contain a condition
requiring the contractor to salvage, recycle, compost or mulch yard waste material at an
approved site, if feasible and cost-effective. ORS 279B.225.
6) Promptly, as due, make payment to any person, copartnership, association or corporation
furnishing medical, surgical and hospital care services or other needed care and
attention, incident to sickness or injury, to the employees of the contractor, of all sums
that the contractor agrees to pay.for the services and all moneys and sums that the
contractor collected or deducted from the wages of employees under any law, contract or
agreement for the purpose of providing or pay{ng for the services. All employers shall
comply with ORS 656.017. ORS 2798.230.
7) A person may not be employed for more than 10 hours in anyone day, or 40 hours in anyone
week, except in cases of necessity, emergency or when the public policy absolutely
requires it, and in such cases, except in cases of contracts for personal services
designated under ORS 279A.055, the employee shall be paid at least time and a half pay:
a) For all overtime in excess of eight hours a day or 40 hours in anyone week
when the work week is five consecutive days; or
b) For all overtime in excess of 10 hours in anyone day or 40 hours in any
one week when the work week is four consecutive days, Monday through ,Friday;
and
c) For all work performed on Saturday and on any legal holiday specified in
ORS 279B.020.
An employer must give notice in writing to employees who work on a public contract, either
at the time of hire or before commencement of wor.. on the contract, or by posting a notice
in a location frequented by employees, of the number of hours per day and days per week
that the employees may, be required to work. ORS 279B.235(1)-(2}.
B} If the agreement is for personal services, the contract shall contain a provision that the
employee shall be paid at least time and a half for all overt~e worked in excess of 40
hours in anyone week, except for individuals under personal services contracts who are
excluded under ORS 653.010 to 653.261 or under 29 U.S.C. 201-209 from receiving overtime.
ORS 279B.235(2).
9} Contracts for services must contain a prov~s~on that requires that persons employed under
contracts shall receive at least time and half pay for work performed on the legal
holidays specified in a collective bargaining agreement or in ORS 2793.020(1) (b) (B}-(G)
and for all time worked in excess of 10 hours in anyone day or in excess of 40 hours in
anyone week, whichever is greater. Employer shall give notice in writing to employees
who work on a contract for services, either at the time of hire or before commencement of
work on the contract, or by posting a notice in a location frequented by employees, of the
number hours per day and days per wee}: that the employees may be required to war}:. ORS
2798.235(5) .
I.f thi.s agreement i.s for a pUblic i.mprovement, the contract shaJ.l. contain the followi.ng
condi. t.ions :
10) Make payment promptly, as due, to all persons supplying to the contractor labor or
material for the performance of the work provided for in the contract. ORS
279C. 50S (1) (a).
11) Pay all contributions or amounts due the Industrial Accident Fund from the contractor or
subcontractor incurred in the performance of the contract. ORS 279C.505(1) (b).
2008' RFP for Annual Audit Services
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AIS Attachment 2, Page 58 of 62.
12). Not permit any lien or claim to be filed or prosecuted against the state or a county,
school district, municipality, municipal corporation or subdivision thereof, on account of
any labor or material furnished. ORS 279C.S05(1) (c).
13) Pay to the Department of Revenue all sums withheld from employees under ORS 316.167. ORS
279C. 505 (1) (d) .
14} The contractor shall demonstrate that an employee drug testing program is in place. ORS
279C. 505 (2) .
15) If the contractor fails, neglects or refuses to make' prompt payment of any claim for labor
or 'services furnished to the contractor ,or subcontractor by any person in connection with
the public improvement contract as the claim becomes due, the proper officer or officers
representing the state or a county, school district, municipality, municipal corporation
or subdivision thereof, as the case may be, may pay such claim to the person furnishing
labor or s~rvices and charge the amount of the payment against the funds due or to become'
due the contract by reason of the contract. If the contractor or first-tier subcontractor
fails, neglects or refuses to make payment to a person furnishing labor or materials in
connection with the public improvement contract within 30 days after receipt of payment
from the contracting agency or a contractor, the contractor or first-tier, subcontractor
shall owe the person the amount due plus interest charges commencing at the end of the 10-
day period that paYment is due under ORS 279C.580(4) and is subject to a good faith
dispute as defined in CRS 279C.SBO. If the contractor or a subcontractor fails, neglects
or refuses to make payment to a person furnishing labor or materials in connection with
the public improvement contract, the person may file a complaint with the Construction
Contractors Board, unless payment is SUbject to a good faith dispute as defined in ORS
279C.580. ORS 279C.S15.
16) The payment of a claim does not relieve the contact or or the contractor's surety from
obligation with respect to any unpaid claims. ORS 279C.515(4).
17) A person may not be employed for more than 10 hours in anyone day, or 40 hours in anyone
week, except in cases of necessity, emergency or when the public policy absolutely
requires it, and in such cases, except in cases of contracts for personal services
designated under ORS 279C.lOO, the employee shall be paid at leasttime and a half pay:
a) For all overtime in excess of eight hours a day or 40 hours in anyone week
when the work week is five consecutive days; or,
b) For all overtime in excess of 10 hours in anyone day or 40 hours in anyone
week when the work week is four consecutive days, Monday through Friday; and,
c) For all work performed on Saturday and on any legal holiday specified in
ORS 279B.020. ORS 279C.520(1).
An employer shall give notice in writing to employees who work on a public contract either
at the time of hire or before commencement of work on the contract, or by posting a notice
in a location frequented by employees, of the number of hours per day and days per wee}:
that the employees may be required to work. ORS 279B.520(2).
18) If the agreement is for personal services, the contract shall contain a provision that the
employee shalf be paid at least time and a half for all overtime worked in excess of 40
hours in anyone week, except for individuals under personal services contracts who are
excluded under ORS 653.010 to 653.261 or under 29 U.S.C. 201-209 from receiving overtime.
ORS 279C.520(31. .
19) Contracts for services must contain a provision that requires that pers9ns employed under
contracts shall receive at least time and half pay for work performed on the legal
holidays specified in a collective bargaining agreement or in ORS 279C.540(1) (b) (B)-(G)
and for all time worked in excess of 10 hours in anyone day or in excess of 40 hours in
anyone week, whichever is greater. An employer shall give notice in writing to employees
who work on a contract for services, either at the time of hire or before commencement of
work on the contract, or by posting a notice in a location frequented by employees, of the
number of hours per day and days per week that the employees may be required to work. ORS
279C.520(5)
20) Solicitation documents for a public improvement contract shall make specific reference to
federal, state and local agencies that have enacted ordinances, rules or regulations
dealing with the prevention of environmental pollution and the preservation of natural
resources that affect the perfor.mance of the contract. A solicitation document must also
make special reference to Y~own conditions at the construction site that may require the
successful bidder to comply with the ordinances, rules or regulations identified under ORS
279C.525(1). If the successful bidder encounters a condition not referred to in the
solicitation documents, not caused by the successful bidder and not discoverable by a
reasonable prebid visual site inspection, and the condition reauires compliance with the
ordinances, rules or regulations referred to under ORS 279C.52S(1), the successful bidder
shall immediately give notice of the condition to the contracting agency. The successful
bidder may not commence work nor incur any additional job site costs in regard to the
condition encountered and described in ORS 279.525(3) without written direction from the
2008 RFP for Annual Audit Services
Page 49 of 50
AIS Attachment 2, Page 59 of 62
contracting agency. ORS 279C.525.
21) Promptly, as due, make payment to any person, copartnership, association or corporation
furnishing medical, surgical and hospital care services or other needed care and
attention, incident to sickness or injury, to the employees of the contractor, of all sums
that the contractor agrees to pay for the services and all moneys and sums that the
contractor collected or deducted from the wages of employees under any law, contract or
agreement for the purpose of providing or paying for the services. All employers shall
comply withORS 656.017. ORS 279C.530.
22) A contract for public works shall contain a provision stating the existing state
prevailing rate and wage and, if applicable, the federal prevailing rate of wage required.
Every contract and subcontract shall contain a provision that workers shall be paid not
less than the specified minimum hourly rate of wage in accordance with ORS 279C.838. ORS
27 9C . 830 ( 1) .
Xf this agreement is for demolition, the contract sha.1.l a.1.so contai.n the followUlg conditions:
23) Contractor must salvage or recycle construction and demolition debris, if feasible and
cost-effective. ORS 279C.SIO(1}
2008 RFP for Annual Audit Services
Page 50 of 50
AIS Attachment 2, Page 60 of 62
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Attachment 3 ,
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SPECIFIC AUDIT APPROACH
Our overall engagement plan entails significant involvement by Grove, ivfuelIer, '-& Swank management level
'people. Our billing rate structure is designed with this concept in mind, and we believe it lays a foundation for
audit efficiencies and immediate problem resolution.
An audit is most beneficial if it involves client personnel at all stages. We will meet with appropriate personnel
prior to beginning our procedures to review the audit approach and procedure. We will meet periodically during
the fieldwork and at the conclusion of fieldwork to make sure that all issues are communicated early. We believe
that communication is a key part of the audit relationship.
Our audit approach is completely integrated using governmental audit programs specifically tai19red for your
engagement. We will obtain a concise understanding of the requirements. This understanding includes how all
financial and grant r~quired items are processed. We gain this understanding through documenting your systems.
For Federal programs we use our previous familiarity, a careful reading of the grant requirements and
communic~~~9x:a with the grantor agency, if requ!red.e
The audit will involve documentation, .study and evaluation of the City's internal control process, followed by tests
of procedures and transactions as appropriate for the circumstances. We will analyze the City's systems,
procedures, and control environment for revenues, expenditures, payroll, budgeting, data processing, and grant
compliance. , Our internal control study will involve a combination of existing City documentation of internal
control procedures, our specifically tailored questionnaires and descriptions we generate from discussions with City
personnel. Subject to the results of this study and evaluation, we anticipate that the audit will be most effectively
performed in the !ollowing manner:
INTERllvl FIELD 1J10RK
Pre-audit conference and approval of the audi~ program
Study and evaluation of the City's internal control Structure
Procedural testing for revenue, payroll and disbursements
Coordinate year end final fieldwork activities with City personnel
Communicate preliminary findings and recommendations
FliYAL FIELD1VORK
Substantive tests of asset and liability accounts
Substantive tests on revenue, expenditure and capital outlay accounts
Final procedures on interim fieldwork activities
Communicate audit findings, recommendations and proposed adjustments
Approval of reports, financial statements and audit findings
Our procedures include reviewing how information is processed. Using trained personnel we review input and
output controls) controls over the processing, including software and hardware. This review often results in
recommendations for more efficient processing of financial infonnation.
Statistical sampling will be used for payroll, disbursements and major Federal programs. Sample sizes will be 50 in
accordance with Federal guidelines. Sampling software will be used as a part of this process. The actual sample
determination will vary depending on the most efficient method to encompass the entire population.
AIS Attachment 2, Page 61 of 62
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A:ttrt,chmerit 3
SPECIFIC AUDIT APPROACH (Continued)
FINAL FIELDWORK (Continued) ,
Analytical procedures will be used as part of interim procedures, and for year end comparative procedures. All
accounts are entered into our software which allows for reasonableness comparisons, comparison to budget and
comparison between years.
For our determination of compliance with laws and regulations, we will submit a preliminary listing ofitems which
we feel are appropriate to test, and management may then make additions, within reasonable parameters, if they
desire us to focus our attention towards a specific area.
Suggestions for improvements are a norma/part oj our audit It is our intention to be proactive with City
personnel to develop meaningful management letter points. We believe our experience is a valuable resource
available to the City. We are ready, willing and able to assist you in the areas that benefit the fmancial operations of
the City.
We feel the most persuasive evidence regarding our firm is that which is provided by our current clients. JVe
encourage the City to contact our references regarding our audit approach.
IDENTIFICA TION OF ANTICIPA TED POTENTIAL AUDIT PROBLElJ;/S
We do not anticipate any potential problem areas. If during the course of our audit procedures circumstances
disclosed that a more intensive and detailed examination is required in addition to that which would be sufficient
under normal circumstances, we will provide all pertinent facts relating to the extraordinary circumstances to the
City. Any fees relating to such extensions or examination procedures would be additional fees subject to
negotiation and not included within the scope ~f services to be perfonned under this proposal.
REPORT FORk/AT
We have included copies of the financial statements for the cities of Salem and Keizer' for your review.
AIS Attachment 2, Page 62 of 62