HomeMy WebLinkAboutContract 39162-A1CITY SECRETARY CONTRACT NO. '31A k (,O - P \
AMENDMENT NO. 1 TO
CITY SECRETARY CONTRACT NO, 39162
PROFESSIONAL SERVICES AGREEMENT
This Amendment No. 1 ("Amendment") is entered into by and between the City of Fort
Worth (hereafter "City"), a home rule municipal corporation situated in portions of Tarrant,
Denton and Wise Counties, acting by and through its duly authorized Assistant City Manager,
and Crowe Horwath, LLP (hereafter "Consultant") acting by and through its duly authorized
representative.
WHEREAS, the parties have previously entered into City of Fort Worth City Secretary
Contract No. 39162 (the "Contract"), which was executed on September 22, 2009; and
WHEREAS, the Contract involves consulting services for the purpose of completing the
City's Comprehensive Annual Financial Report (CAFR); and
WHEREAS, the original term of the Contract expired on September 30, 2010; however
the City had the option to renew the Contract for two additional one year terms for services for
the City's 2010 and 2011 CAFRs; and
WHEREAS, the City and Consultant now wish to renew the term of the Contract for
continued services for the 2011 CAFR pursuant to the original Contract.
NOW, THEREFORE, City and Consultant, acting herein by the through their duly
authorized representatives, enter into the following agreement to amend the contract:
1.
Section 1, Scope of Services. The Scope of Services is hereby amended to include
services for Consultant to provide services for the City's FY 2011 CAFR, as set forth in Exhibit
'AA," Statement of Work, which is attached hereto and incorporated into this Contract for all
purposes.
10-26-11 P
OFFICIAL RECORD
CITY SECRETARY
2 T. WORTH TX
Section 2, Term. The term of the Contract is hereby amended to extend the term to
expire September 30, 2012, unless terminated earlier in accordance with the Contract.
3.
Section 39 Compensation. Compensation is hereby amended to pay Consultant an
amount not to exceed $1,130,000.00, amended amount in accordance with the provisions of this
Amendment and the attached Exhibit `B-1Payment Schedule, which is incorporated herein for
all purposes.
4.
All other provisions of the Contract which are not expressly amended herein shall remain
in full force and effect.
Executed on this the Z.lo day of OG�%�D �i
CITY OF FORT WORTH:
By:
Tom Higgins
City Manager
Date:
2011.
CROWE HARWATH LLP:
�-.�--
Kevin mith
Partner
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ATTEST: I00
j' Contract Authorization:
By:
City SecrE
Marty
APPROVED AS TO FORM AND LEGALITY:
B. Farmer
Assistant City Attorney
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Date Approved: lS �
OFFICIAL RECORD
CITY SECRETARY
F�: WORTH, TX
EXHIBIT A-1
STATEMENT OF WORK
1. Oversee and direct the efforts of one City accounting staff, and provide additional
governmental accountants, as needed, to produce and publish the Fiscal Year (FY) 2011
Comprehensive Annual Financial Report (CAFR) by March 20, 2012. The Consultant
will not be required to bear the responsibility for the audit opinion. The Consultant shall
make every effort to provide timely and accurate information that would result in an
unqualified opinion.
2. The services provided by the Consultant for the 2011 CAFR shall include:
(a) Reconcile Required Balance Sheet Accounts across Funds to complete PBC
schedules
(b) Review Capital Asset Additions, Deletions, and Depreciation schedules prepared
by the City for accuracy and completeness and report any errors or concerns to the
appropriate City representative to resolve.
(c) Revenue and Expenditure Variance Analyses across Funds
(d) Prepare and deliver to the City one printed copy and one electronic version of the
CAFR Draft
(e) Finalize and Prepare Auditor Required PBC Schedules
(f) Respond to Auditor Questions and Requests for Additional Information
(g) Finalize, and deliver to the City one printed copy and one electronic version of
the Final CAFR
(h) Deliver to the City electronic copies of PBC schedules and supporting
documentation
3. Project Phases
(a) Phase 1 -Plan the Project (organize the effort)
i. Task 1 -Entrance Conference
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ii. Task 2 - Project Plan Development
iii. Deliverable: Project Plan with Engagement Timeline
(b) Phase 2 - 2011 CAFR Preparation
i. Task 1 -Posting of GASB 34 and Consolidating Entries
ii. Task 2 -Creation of CAFR document and Related Single Audit Report
schedules
iii. Deliverables:
1. Draft 2011 CAFR
2. Single Audit Schedules
3. Draft Schedule of Expenditures of Federal Awards (SEFA)
4. PBC Schedules
5. Audit -related Lead Schedules and Working papers
(c) Phase 3 -Audit Support and Management, 2011 CAFR
i. Task 1 —Audit Readiness Assessment
ii. Task 2 —Preparation of Supporting Audit Documents
iii. Task 3 —Audit Process Assistance
iv. Task 4 —Audit Resolution Documents
v. Deliverables:
1. PBC Schedules
2. Audit -related Lead Schedules and Working Papers
3. Audit Documentation
4. Audit Finding Responses
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Amendment No. 1 to CSC No. 39162
5. Fina12011 CAFR
4. City Responsibility
(a) The City agrees to make all management decisions and perform all management
functions; designate an individual who possesses suitable skill, knowledge, and
for experience, preferably within senior management to oversee the Consultant's
services; evaluate the adequacy and results of the services performed; accept
responsibility for the results of the services; and establish and maintain internal
controls, including monitoring ongoing activities.
(b) The City agrees to provide the Consultant timely with information requested and
to make City employees available for the Consultant's questions. The City will
provide at least one assigned City employee who will work closely with the
Consultant during this engagement. The assigned employee for the 2011 CAFR is
Anthony Rousseau and the expected amount of hours available to the Consultant
will be approximately 1,000 hours annually, during the term of the contract. If the
assigned City employee is unavailable the City will replace that employee with
someone of similar skills and experience, with the acceptance by the Consultant
of the replacement employee, such acceptance will not be unreasonably withheld
by the Consultant. The assigned City employee will report to Jennifer Fung,
Assistant Finance Director during this engagement. The assigned City employee,
for the 2011 CAFR, will assist the Consultant with various tasks, including but not
limited to the following:
i. Obtain data from the City's accounting system including data mining
activities,
iv. Prepare and enter adjusting journal entries into the City's accounting and
financial reporting systems,
v. Assistance in resolving auditor questions related to audit exceptions and
findings,
vi. Obtaining auditee responses and corrective action plans for findings and
management comments from the Auditor.
The City also agrees to provide additional staffing to assist the Consultant with certain activities.
The additional staffing will be provided by Jerry Murrish who will assist the City and the
Consultant by performing the following tasks:
00
vii. Preparation of CAFR schedules including the Budgetary Schedules,
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viii. Preparation of the Statements of Cash Flows for the Proprietary Fund
Types and Business Activity Funds,
Preparation of the Appropriation (Budget) Mayor &Council
Communication (M & C) for City Council approval related to budgetary
changes, and
(c) The City will provide the Consultant's personnel with access to the Internet.
Consultant agrees to execute the City's Network Access Agreement, attached as
Exhibit "C" to this contract in order to gain access to the Internet while working
on this project.
(d) The City will have all bank reconciliations prepared on a current basis with
appropriate reconciling items and all corrections made to the City's general
ledger. The City will also ensure that all cash basis transactions are accounted for
and recorded in the City's general ledger. The Consultant is not expected to
compile information for unrecorded cash transactions. The City maintains bank
account, investment account and subsidiary ledgers in a format that can be
audited and that can support the transactions in the City's general ledger.
(e) The City will assist the consultant by gathering relevant information, including:
source documents, financial transactions from MARS, information from
contractors, actuarial studies, arbitrage calculations, escrow verifications,
economic gains or losses, grant agreements and grant documentation. All original
source documentation is available in order to prepare reconciliations, audit
schedules and the CAFR. If original source documentation is not available,
the City assumes responsibility to resolve the issue. City staff will cooperate with
requests for information such as explanation of account activity and changes in
account activity from one year to the next.
(f) City staff will record all adjusting journal entries into the City's general ledger.
The Consultant shall assist in identifying affected fund account centers (in
accordance with the City's Chart of Accounts) and the dollar amounts of entries
needed. The Consultant shall provide written explanations for entries needed and
supporting documentation.
(g) The City is responsible for the completeness of the accounting records and the
underlying supporting documentation. The City shall ensure the regular
transactions of the City have been posted to the ledgers and that the trial balances
are complete and accurate and are provided to the Consultant, with underlying
supporting documentation, by November 6th of each year. The City will be
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responsible for closing the year end records and reviewing the trial balances for
completeness and accuracy, through a Trial Balance Scrub" process. The trial
balance scrub process will help ensure completeness, accuracy and the agreement
of the trial balances to underlying records and will include, but is not limited to,
the following activities:
i. Bank account reconciliations are complete and investment ledger roll
forward information is complete and updated
ii. Property taxes, gas lease transactions and other receivables, deferrals and
corresponding revenues are properly recorded in the correct fund and 2011
schedules of activity are prepared, including property tax allocation
schedules, gas lease schedules, and schedules maintained by the City's
Departments that were provided during the 2011 CAFR preparation
process,
iii. Prepaid accounts have proper supporting documentation,
iv. Inventory analysis is prepared by the City's Internal Audit Department and
is properly recorded in the accounting records,
v. Accounts, retainage, escrow and other payable accounts are complete
through search for unrecorded liabilities procedures and detail
departmental records are obtained and reconciled to general ledger
activity,
vi. Accrued payroll, uncompensated absences and other related liabilities are
supported by detailed schedules and are in agreement with the trial
balance,
All debt related transactions, including cash, investment, issuance costs,
premium or discount, escrow fees and other related activity is recorded
and the related amortization schedules are prepared,
All interfund and intrafund activities are reconciled and in balance by
fund,
ix. All unnatural balances are analyzed and properly adjusted or reconciled
with proper supporting justification, and
x. All funds reported in the trial balance are in balance (debits/credits equal
zero).
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(h) Beginning fund equity amounts will be reconciled to prior year audited ending
fund equity.
EXHIBIT B-1
PAYMENT SCHEDULE
Payments shall be made by my on a net 30 days basis following receipt of a valid invoice
from the Consultant according to the following schedule. Payment items noted with an asterisk
(*) will be invoiced to the City on a monthly basis until the deliverable is completed. Invoices
shall be computer -generated or typewritten and shall include the City's contract number, the
release purchase order number, the deliverable item provided, proof of acceptance of the
deliverable by the City in the form of Exhibit "D" attached hereto and the proper dollar amount
for that item.
1. City acceptance of Deliverable: Project Plan with Engagement Timeline -
$50,000.00 for the 2011 CAFR,
2. City acceptance of Deliverables: Phase 2 - 2011 CAFR, including Draft CAFR,
Single Audit Schedules, Draft Schedule of Expenditures of Federal Awards
(SEFA), PBC Schedules, Audit -related Lead Schedules and Working papers -
$775,000.00, divided as follows.
a. PBC Schedules, Audit -related Lead Schedules and Working papers
$550,000*
b. Single Audit Schedules $100,000*
c. Draft Schedule of Expenditures of Federal Awards (SEFA) $25,000
d. Draft CAFR $100,000
3. City acceptance of Deliverables: Phase 3 -Audit Assistance 2011 CAFR
including Final 2011 CAFR and Audit Documentation, Audit Finding Responses
- $305,000.00, divided as follows:
a. Audit Documentation $175,000*
b. Audit Finding Responses $30,000
c. Final 2011 CAFR $100,000
4. Additional Services
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a. In the event that the City is unable to meet the date prescribed for the delivery
of a complete reconciled trial balance or if the City is unable to complete the
trial balance scrub activities (pursuant to Exhibit A4 ); if the City is unable
to provide staff to complete the Grant Schedules and Workbooks (pursuant
to Exhibit A); or if the City is unable to provide assistance as outlined as the
City Responsibility (pursuant to Exhibit A4) the Consultant and the City
shall negotiate additional service needs.
b. In the event additional services are required, the parties shall execute a
written Amendment to this Amendment specifically setting forth the
additional services and the resulting change in compensation, if any, to be
received for the services.
c. The Consultant will be entitled to bill the City for the additional services at a
professional hourly rate of $160.00 per hour for the 2011 CAFR. The City
and Consultant will arrive at a mutually agreed upon rate and estimated
hours prior to the commencement of such additional services.*
5. Renewal Options
There are no renewal options under this Amendment.
* Designated payment item is available for monthly billing.
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City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL_ ACTION: Approved on 9/15/2009 -Ord. No. 18820-09-2009
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DATE: Tuesday, September 15, 2009
LOG NAME: 13CROWE 2009 CAFR
REFERENCE NO.: C-23778
SUBJECT:
Authorize the Execution of a Contract for Professional Consulting Services with Crowe Horvath, LLP, for
the Purpose of Completing the City's 2009 Comprehensive Annual Financial Report for the Financial
Management Services Department for a Cost Not to Exceed $1,300,000.00 and Adopt Appropriation
Ordinance
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached supplemental appropriation ordinance increasing appropriations in the General
Fund by $1,300,000.00 and decreasing the unreserved, undesignated fund balance by the same amount;
and
2. Authorize the City Manager to enter into a contract with Crowe Horvath, LLP, for professional
consulting services for the purpose of completing the City's 2009 Comprehensive Annual Financial Report
for the Financial Management Services Department at a cost not to exceed $1,300,000.00; and authorize
the contract to include two one year options for completion of the 2010 Comprehensive Annual Financial
Report and the 2011 Comprehensive Annual Financial Report.
DISCUSSION:
This contract will provide additional staff and professional consulting services to the Financial
Management Services Department (FMS) to assure the timely production and completion of the
Comprehensive Annual Financial Report (CAFR) and Single Audit Report for Fiscal Year 2009 and
includes two one-year renewal options for the Fiscal Year 2010 and Fiscal Year 2011 CAFR's and Single
Audit Reports. This staff augmentation is necessary to allow City staff to focus on the ERP Phase II
Financials project implementation while ensuring timely completion of the CAFR. ERP Phase II has a
tentative completion date of October 2012 and requires the dedication of City staff for the implementation
work of general ledger cleanup, system requirements definition, software selection, and system
implementer assessment and selection as well as full system implementation efforts. As with Phase I
(HR/Payroll) implementation the ERP financials implementation will require dedicated FMS Department
and other City resources through its completion and go -live in October 2012.
In July 2008, the City issued a Request for Proposal (RFP) for the preparation of the Fiscal Year 2007 and
Fiscal Year 2008 CAFR's. An evaluation panel made up of representatives from the Audit and Finance
Advisory Committee, the City Manager's Office, the Financial Management Services Department, the
City's financial advisor and the Minority Women Business Enterprise (M/WBE) Office, evaluated proposals
submitted in response to the RFP. Proposal evaluation factors included background and relevant
experience of the firms, personnel qualifications, references, contract costs and M/WBE
participation. Crowe Horvath, LLP, was determined to be the best evaluated firm for the contract. Crowe
Horvath, LLP, performed professional services for the City in accordance with the terms of the contract
http://apps. cfwnet. org/ecouncil/printmc. asp?id=1223 9&print=true&DocType=Print 10/20/2011
executed based on the selection under the aforementioned RFP process for the 2007 and 2008
CAFR's. The cost of those services was $1,443,280.00.
Due to its prior performance on the Fiscal Year 2007 and Fiscal Year 2008 CAFR's, Crowe Horvath, LLP,
has been determined to be the firm that is most capable of performing the services for the 2009 CAFR
preparation process. The Fiscal Year 2007 and Fiscal Year 2008 contract with Crowe Horvath, LLP
required the City dedicate four resources to the external audit, the CAFR and Single Audit Report
preparation. The hours worked by City staff was approximately 7,740. For this contract the number of
dedicated City staff is reduced to one employee or 1,290 hours. This contract requires the consultant to
absorb the reduction of hours for City staff and assume expanded responsibilities for the financial audit
and preparation of the Comprehensive Annual Report (CAFR).
This contract will include options to complete the 2010 CAFR and the 2011 CAFR at a cost of
$1,380,000.00 for each year.
Funding for this contract is a supplemental appropriation of the General Fund's fund balance. Funding
was originally included as part of the City Manager's 2009-2010 Budget. The use of fund balance yields a
corresponding Fiscal Year 2010 budget savings of $1,300,000.00.
If approved, this contract shall begin on September 21, 2009, and shall remain in effect until all services
have been provided under the Agreement.
M/WBE -Crowe Horvath, LLP, is in compliance with the City's M/WBE Ordinance by committing to 10
percent M/WBE participation on this project. The City's M/WBE goal on this project is 10 percent.
FISCAL INFORMATION /CERTIFICATION:
The Financial Management Services Director certifies that upon approval of the above recommendations
and adoption of the attached supplemental appropriation ordinance, funds will be available in the current
operating budget, as appropriated, of the General Fund. Upon approval, the unreserved, undesignated
fund balance of the General Fund will exceed the minimum reserve as outlined in the Financial
Management Policy Statements.
FUND CENTERS:
TO Fund/Account/Centers FROM Fund/Account/Centers
GG01 531200 0901000 �1,300,000.00
CERTIFICATIONS:
Submitted for City Manager's Office b� Karen Montgomery (6222)
Originating Department Head: Lena Ellis (8517)
Additional Information Contact: Walter Peoples (6217)
ATTACHMENTS
1. 13CROWE 2009 CAFR AO.doc (Public)
2. 13CROWE 2009 CAFR MWBE.pdf (CFW Internal)
3. m&cfundlog.pdf (CFW Internal)
http://apps.cfwnet.org/ecouncil/printmc.asp?id=12239&print=true&DocType=Print 10/20/2011