HomeMy WebLinkAboutIR 9866 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9866
March 29, 2016
To the Mayor and Members of the City Council
Pagel of 2
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rrn SUBJECT: REQUEST FOR PROPOSAL (RFP) — INDEPENDENT EXTERNAL
AUDIT SERVICES
The Department of Financial Management Services is currently preparing a Request for Proposal
(RFP) for External Audit Services. Services provided under this engagement allow the City to
ultimately publish our Comprehensive Annual Financial Report. Properly performed audits play a
vital role in the public sector by helping to preserve the integrity of public finance functions
through maintaining citizens' confidence in their elected leaders and local governments. The audit
will include evaluating the appropriateness of accounting polices used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements. The audit will also include tests of the City's compliance
with certain provisions of laws, regulations, contracts, and grant management.
The City's last RFP (#10-0401) process for external audit services was conducted in May of
2010. Deloitte and Touche, LLP was awarded this engagement and currently provides all external
audit services for the City. The current contract with Deloitte and Touche, LLC began for the fiscal
year ending 2010 and expires with the completion of the fiscal year 2015 engagement. Costs
associated with these services are approximately $1.4 million per year.
Both state law and the City Charter require an annual audit of the City. In addition to financial
matters, the Charter requires that the audit include certification of all statements required under
the Charter provision that governs the Annual Appropriations Ordinance.
The City's Independent Auditors will also evaluate the City's compliance with the Public Funds
Investment Act (the Act). The Act regulates the investment activities of State agencies and local
governments. Material instances of non-compliance will be noted by the auditors and reported to
City management and our elected officials
The scope of the independent audit will encompass not only the fair presentation of the basic
financial statements, but also the fair presentation of the financial statements of individual funds.
The cost of extending full audit coverage to the financial statements of individual funds and
component units will be reviewed for reasonableness based upon the additional degree of
assurance provided.
As recommended by the Government Finance Officers Association (GFOA), the City will
undertake a full-scale competitive process for the selection of independent auditors. Auditor
independence is 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. Although the City does not
have a formal policy in place requiring the external auditors to be replaced after each term, staff
concurs with the recommendation to do so. The audit procurement process will be structured so
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9866
March 29, 2016
To the Mayor and Members of the City Council page 2 of 2
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�i7 Y
* *a
rrn SUBJECT: REQUEST FOR PROPOSAL (RFP) — INDEPENDENT EXTERNAL
AUDIT SERVICES
that the principal factor in the selection of an independent auditor is the auditor's ability to perform
a quality audit.
The Department of Financial Management Services has selected a review panel consisting of the
CFO, the Assistant Director of Finance - Accounting, the Assistant Director of Finance - Financial
Reporting, the Internal Auditor (or her designee), and two representatives from departments. The
review panel is responsible for reviewing all bids received and will develop a recommendation to
City Council based upon the services needed and the scope of the RFP.
CALENDAR FOR RFP
The timeframe for the new RFP process is as follows:
• Development: March 14, 2016 —April 6, 2016
• Advertising: April 6, 2016 — May 5, 2016
• Selection: May 5,2016 — May 30, 2016
• Negotiations and Council Approval: May 30, 2016 — June 21 , 2016
• Auditor start date — July 1, 2016
The standard communication process for advertising RFPs is as follows:
• Advertise in local newspaper for a minimum of 28 days
• Place the RFP information on the City's website
• Send out electronic communication to the vendors that are registered with the City
If you have any questions, please call Aaron Bovos, Chief Financial Officer, at 817-392-8517.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS