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ORD 40191 - Contract with BKD LLP for independent annual audit 0) � �ophAHA,n,Eg�' C E I v *. " �s7 R E V E Li Finance Department � Omaha/Douglas Civic Center z T�l�t'� gild .^.:iN 1819 Farnam Street,Suite 1004 A®i.r*.4 a 2014 N� �3 r M �� Omaha,Nebraska 68183-1004 PAV ro (402)444-5416 oR��En aaBRA4� Teletax(402)546-1150 CITY P, Stephen B. Curtiss City of Omaha N E B R A S 14 t. Jean Stothert,Mayor A Finance Director Allen Herink October 29, 2014 City Comptroller Honorable President and Members of the City Council, Submitted and attached for your approval is an ordinance approving a contract with BKD LLP to conduct the City's multi-year audit covering years 2014 through 2018. The City of Omaha evaluation committee reviewed all proposals and conducted interviews with the top rated firms. Upon completion of the selection process, the evaluation committee unanimously recommended BKD LLP to perform auditing services for the City of Omaha. We urge your favorable consideration of this ordinance. Respectfully submitted, Referred to the City Council for Consideration: isf.__ .,d(„zt___,/oz„,/, 1A/ (tf Step n B. Curtiss DateMayor's Office Date Finance Director P:/FIN/10 29vq1 ORDINANCE NO. .w/9/ AN ORDINANCE approving a Contract between the City of Omaha, a Municipal Corporation, and BKD, LLP, to approve and execute an Independent Annual Audit Agreement as provided in Section 2.21 of the Home Rule Charter of the City of Omaha, 1956, as amended, involving the payment of money from appropriations of more than one year as provided in Section 5.17 of the Home Rule Charter of the City of Omaha, 1956, as amended, for the performance of an audit examination of all City funds and accounts, for the fiscal years ending December 31, 2014, December 31, 2015, December 31, 2016, December 31, 2017 and December 31, 2018, made in accordance with the Official Proposal submitted on September 24, 2014, by BKD, LLP; and to provide the effective date hereof. WHEREAS, the City of Omaha Nebraska, advertised for proposals from independent certified public accountants licensed to practice in the State of Nebraska to perform the financial audits of the City funds and accounts and/or other specialized audit services as necessary; and, WHEREAS, an audit evaluation committee for the City of Omaha has been formed to review the proposals submitted in response to the Request for Proposal; and, WHEREAS, the membership of this committee shall consist of four representatives from the City: the Finance Director, the City Comptroller, the Accounting Manager and a representative from the City Council; and, WHEREAS, the evaluation committee reviewed all proposals and conducted interviews with the top rated firms and, upon completion of the selection process the evaluation committee unanimously recommended BKD, LLP to perform auditing services for the City of Omaha; and, ORDINANCE NO. yZ21// Page 2 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF OMAHA: Section 1. The Mayor is hereby authorized to execute, and the City Clerk to attest, the attached Contract between the City of Omaha and BKD, LLP. Section 2. This ordinance, not being legislative in character, shall be in full force and take effect immediately upon its passage. The Finance Department is authorized to pay the cost of the 2014 to 2018 audits from the General Fund 11111, General Expense/Insurance 119014. INTRODUCED BY COUNCILMEMBER APPROVED BY: TLC__ MAYOR OF THE CITY OF OMAH II/AVAT PASSED NOV 2 5 2014 -9 ATTEST: ITY CLERK O THE CITY OF OMAHV0901 APP'OV• P A • FORM: V/I L./4-utP4/ -/ cipelyci TORNEY DATE REQUEST FOR PROPOSAL TITLE RELEASE DATE Audit Services for the City of Omaha Wednesday, September 3, 2014 OPENING DATE AND TIME PROCUREMENT CONTACT Wednesday, September 24, 2014 11:00am CDT Eric Carlson, Buyer On behalf of the City of Omaha's Finance Department, the Douglas County Purchasing Agent is issuing this Request for Proposal to solicit proposals from qualified contractors/consultants to provide auditing services for the City of Omaha. The purpose of this Request for Proposal is to select an auditor to provide auditing services for the City of Omaha as described below. Written questions are due no later than 4:00 p.m. CDT, Friday, September 12, 2014, and should be sent to Eric Carlson, Buyer, at eric.carlson@douglascounty-ne.gov. Questions should be plainly labeled "Questions for Audit Services for the City of Omaha". The response to questions or any other clarifications will be provided solely through addendum posted on the Douglas County Purchasing Department's web site www.douglascountypurchasing.org by approximately Friday, September 19, 2014. NOTE SCHEDULE OF EVENTS IN RFP FOR ACTIVITY DATES AND TIMES. Contractor should submit one (1) original, five (5) copies and one (1) electronic copy (CD or flash drive, editable format) of their entire proposal. Proposals, including CD/flash drive, must be submitted and received in the Omaha City Clerk's Office by the proposal opening date and time. All attachments must be completed and returned with proposal. Bid Submission Sheet A must be completed and returned with proposal. PROPOSALS MUST MEET THE FOLLOWING REQUIREMENTS TO BE CONSIDERED VALID. PROPOSALS WILL BE REJECTED IF NOT IN COMPLIANCE WITH THESE REQUIREMENTS. 1. Proposals must be received in: Office of the Omaha City Clerk 1819 Farnam Street,LC1 Omaha,Nebraska 68183 by the date and time of proposal opening indicated above. No late proposals will be accepted. No fax or emai led proposals will be accepted. 2. Proposals must meet all specifications,terms and conditions of this Request for Proposal (RFP). 3. The contractor's proposal MUST be manually signed, in ink, and returned by the proposal opening date and time along with any other requirements as specified in the RFP in order to be considered for an award. 4. Proposals must be in a sealed envelope/container and marked "Audit Services for the City of Omaha". Container(s) utilized for original documents must be clearly marked ORIGINAL DOCUMENTS. 5. A proposal may not be altered after opening. The proposal must stay in effect throughout the term of the contract. City of Omaha Audit Services 2014 1 I. STANDARD CONDITIONS AND TERMS SCOPE: These standard conditions and terms of the Request for Proposal (RFP) and acceptance apply in like force to this inquiry and to any subsequent contract resulting there from. SPECIFICATIONS: Contractors must submit a proposal in accordance with the terms and conditions in this Request for Proposal. ALTERNATE TERMS AND CONDITIONS: The City of Omaha (CITY), at its sole discretion, may entertain alternative terms and conditions which deviate from the Request for Proposal Requirements. Alternative terms and conditions may be considered if overall contract performance would be improved but not compromised, and if they are in the best interest of the CITY. Alternative terms and conditions must be submitted with the proposal and must be clearly identified and detailed in such a way that allows such deviations to be fully evaluated. Alternative terms and conditions are discouraged and unless explicitly accepted by the CITY, are deemed to be rejected. INSURANCE: Unless otherwise specified, for CITY projects where the scope of work will be less than $200,000, the following levels of insurance will be required: The successful contractor shall provide a certificate of insurance indicating (1) adequate workers' compensation(statutory); (2) commercial liability in an amount not less than $250,000 for injuries including accidental death to any person and subject to the same limit to each person in an amount not less than $5,000,000 where more than one person is involved in any one accident; and (3) property damage insurance in an amount not less than $500,000; and naming the City of Omaha an additional insured for the term of the agreement. Unless otherwise specified, for CITY projects where the scope of work will exceed $200,000, the following levels of insurance will be required: The successful contractor shall provide a certificate of insurance indicating (1) adequate workers' compensation(statutory); (2) commercial liability in an amount not less than $1,000,000 for injuries including accidental death to any person and subject to the same limit to each person in an amount not less than $5,000,000 where more than one person is involved in any one accident; and (3) property damage insurance in an amount not less than $500,000; and naming the City of Omaha an additional insured for the term of the agreement. AWARD: All purchases, leases, or contracts which are based on competitive proposals will be awarded according to the provisions in the Request for Proposal. The CITY reserves the right to reject any or all proposals, wholly or in part, or to award to multiple contractors in whole or in part. The CITY reserves the right to waive any deviations or errors that are not material, do not invalidate the legitimacy of the proposal, and do not improve the contractor's competitive position. All awards will be made in a manner deemed in the best interest of the CITY. PERFORMANCE AND DEFAULT: The CITY reserves the right to require a performance bond from the successful contractor, as provided by law, without expense to the CITY. Otherwise, in case of default of the contractor, the CITY may contract the service from other sources and hold the contractor responsible for any excess cost occasioned thereby. NONDISCRIMINATION: See Exhibit"C" DRUG POLICY: Contractor certifies that contractor maintains a drug free work place environment to ensure worker safety and workplace integrity. Contractor agrees to provide a copy of its drug free workplace policy at any time upon request by the CITY. City of Omaha Audit Services 2014 2 NEW EMPLOYEE WORK ELIGIBILITY STATUS (Neb.Rev. Stat. §4-108-114) The contractor is required and hereby agrees to use a federal immigration verification system to determine the work eligibility status of new employees physically performing services within Nebraska. A federal immigration verification system means the electronic verification of the work authorization program authorized by the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, 8 U.S.C. 1324a, known as the E-Verify Program, or an equivalent federal program designated by the United States Department of Homeland Security or other federal agency authorized to verify the work eligibility status of a newly hired employee. If the contractor is an individual or sole proprietorship,the following applies: 1. The contractor must complete the United States Citizenship Attestation Form, available on the Department of Administrative Services website at www.das.state.ne.us . 2. If the contractor indicates on such attestation form that he or she is a qualified alien, the contractor agrees to provide the US Citizenship and Immigration Services documentation required to verify the contractor's lawful presence in the United States using the Systematic Alien Verification for Entitlements(SAVE)Program. 3. The contractor understands and agrees that lawful presence in the United States is required and the contractor may be disqualified or the contract terminated if such lawful presence cannot be verified as required by Neb. Rev. Stat. § 4-108. The contractor understands and agrees that lawful presence in the United States is required and the contractor may be disqualified or the contract terminated if such lawful presence cannot be verified as required by Neb. Rev. Stat. § 4-108 PAYMENT: Payments to be made by the City of Omaha (CITY) will be made by the responsible department. The CITY may request that payment be made electronically instead of by CITY warrant. COLLUSIVE BIDDING: The contractor's signature on submitted Proposal is a guarantee that the prices quoted have been arrived at without collusion with other eligible contractors and without effort to preclude the CITY from obtaining the lowest possible competitive price. City of Omaha Audit Services 2014 3 II. SCOPE OF THE REQUEST FOR PROPOSAL A. SCOPE The Douglas County Purchasing Department, on behalf of the City of Omaha (CITY) is interested in receiving proposals from qualified vendors to enter into a contract for audit services for the CITY. The contractor will be responsible for all requirements and successful performance of this contract. B. TERM The agreement which results from this RFP will be a contract for a period of five (5) years. The CITY may terminate the agreement by providing sixty (60) days written notice prior to the end of the CITY'S fiscal year, December 31 st. C. NON-EXCLUSIVE Any agreements awarded shall be non-exclusive. The CITY reserves the right to enter into multiple agreements from this RFP. D. INQUIRIES Any explanation desired by a contractor regarding the meaning or interpretation of any RFP provision or questions must be submitted in writing via email to Eric Carlson, Buyer, no later than 4:00 p.m. CDT, Friday, September 12,2014 and clearly marked "Questions for Audit Services for the City of Omaha". Questions should be sent via email to: eric.carlson@douglascounty-ne.gov The response to questions or clarifications will be provided solely through addendum posted on the Douglas County Purchasing Department's web site www.douglascountypurchasing.or;. E PERFORMANCE BOND The successful Contractor will be required to supply a performance bond in the amount of line hundred percent (II1O%) of the annual contract price, executed by a corporation authorized to contract as surety in Nebraska payable to the City of Omaha. The bond will guarantee that the selected Contractor will enter into a contract with the CITY, and will insure the faithful performance of the contract. The Contractor will be required to submit the performance bond within twenty (20) calendar days after written notification of award. The Bond should be provided to the department prior to the initiation of any work or service. Failure to comply shall be grounds for forfeiture of the check or bond. The amount of forfeiture will be determined by the agency based on loss to the CITY. The bond or certified check will be returned when the service has been completed. F. PRIME CONTRACTOR RESPONSIBILITIES The contractor will be required to assume responsibility for all contractual services offered in this proposal whether or not the contractor performs them. Further, the CITY will consider the contractor to be the sole point of contact with regard to contractual matters, including payment of any and all charges resulting from the anticipated contract. G. TERMINATION 1. The CITY may terminate the contract at any time if the contractor fails to carry out the terms or fails to make substantial progress toward the fulfillment of the contract obligations. In such event, the CITY shall provide the contractor with thirty (30) days written notice of conditions which endanger contract performance. If after such notice the contractor fails to City of Omaha Audit Services 2014 4 remedy these conditions, the CITY may send a certified letter to the contractor for immediate cancellation of the contract. In such event, the CITY would receive a pro-rated portion of the value of the performance bond depending on the value of the remaining portion of the contract. 2. The CITY will give the contractor sixty (60) days written notice of termination of contract if appropriations cease. H. SCHEDULE OF EVENTS The CITY expects to adhere to the tentative procurement schedule shown below. It should be noted, however, that some dates are approximate and subject to change. ACTIVITY DATE/TIME 1. Release Request for Proposal Wednesday, September 3, 2014 2. Friday, September 12, 2014 Deadline to submit written questions by 4:00 p.m. CDT 3. CITY'S response to written questions posted Friday, September 19, 2014 Wednesday, September 24, 2014 4. Deadline for submitting proposal(closing) 11:00 a.m. CDT Proposal Opening Location: Legislative Chambers LC-4 Wednesday, September 24 at 11:00 a.m. 5 1819 Farnam Street CDT Omaha,Nebraska 68183 6. Evaluation Committee Review September 25—October 10,2014 7. Interviews for selected firms October 15 - 17, 2014 8. Final recommended selection October or November City of Omaha Audit Services 2014 5 III. PROCUREMENT PROCEDURES A. GENERAL INFORMATION The Request for Proposal (RFP) is designed to solicit proposals from qualified contractors/consultants who will be responsible for providing audit services to the City of Omaha. Proposals that do not conform to the mandatory items as provided in the proposal instructions will not be considered. CITY reserves the right to reject all proposals, and, at its discretion, may withdraw or amend this RFP at any time. If, in the opinion of the CITY, revisions or amendments will require substantive changes in proposals, the due date may be extended. B. COMMUNICATION WITH STAFF From the date the RFP is issued until a determination is announced regarding the selection of the Contractor, contact regarding this project between potential contractors and individuals employed by CITY is restricted to only written/email communication with the person designated as the point of contact for this RFP. Once a Contractor is preliminarily selected that Contractor is restricted from communicating with CITY staff/employees until a contract is signed. The following exceptions to these restrictions are permitted: 1. Written communication with the person designated as the point of contact for this RFP or procurement; 2. Contacts made pursuant to any pre-existing contracts or obligations; 3. CITY staff/employees and/or Contractor staff present at a Pre-Proposal Conference when recognized by CITY staff facilitating the meeting for the purpose of addressing questions; and, 4. CITY staff/employees designated to negotiate, discuss or finalize a contract. Violation of these conditions may be considered sufficient cause to reject a Contractor's proposal and/or selection irrespective of any other condition C. PROPRIETARY INFORMATION All information and data contained in the proposal becomes the property of the CITY and becomes public information upon opening the proposal. If the Contractor wishes to have any information withheld from the public, such information must fall within the definition of proprietary information contained within Nebraska's Public Record statutes. (Neb. Rev. Stat. §§ 84- 712 through 84-712.09) All proprietary information the contractor wishes the CITY to withhold from the public must be submitted in a sealed package, which is separate from the remainder of the bid. The separate package must be clearly marked PROPRIETARY on the outside of the package. Contractors may not mark their entire RFP as proprietary. Contractor's cost proposals may not be marked as proprietary information. Failure of the Contractor to follow the instructions for submitting proprietary and copyrighted information may result in the information being viewed by other contractors and the public. D. REFERENCE CHECKS CITY reserves the right to check any reference(s), regardless of the source of the reference information, including but not limited to, those that are identified by the company in the proposal, those indicated through the explicitly specified contacts, those that are identified during the review of the proposal, or those that result from communication with other entities involved with similar projects. City of Omaha Audit Services 2014 6 Section 1 —Proposal Description and Scope of Service 1. INTRODUCTION The Home Rule Charter of the City of Omaha, 1956, as amended, provides as follows: "Section 2.21 Independent Annual Audit: Prior to the end of each fiscal year, the Council shall contract wit h a certified public accountant to make, as of the end of the fiscal year, an independent audit of all the City funds and accounts. Such accountant shall have no personal interest, direct or indirect, in the fiscal affairs of the City government or any of its officers. Three copies of the annual report, when received, shall be immediately filed in the City Clerk's Office as a public record." The CITY has a population of approximately 421,570, approximately 2,575 full-time employees, and a combined 2014 operating, debt service, and capital budget of$792,551,654. The CITY is seeking proposals from independent certified public accountants licensed to practice in the State of Nebraska to perform the financial audits of the CITY funds and accounts and/or other specialized audit services as necessary. It is preferred the selected accounting firm have a local presence in the City of Omaha. Any explanation desired by a contractor regarding the meaning or interpretation of any RFP provision or questions must be submitted in writing to Eric Carlson, Buyer, no later than 4:00 p.m. CDT on Friday, September 12, 2014. The submission must be clearly marked "Questions for Auditing Services for the City of Omaha". Questions should be sent via email to: Eric Carlson, Buyer Email: eric.carlson@douglascounty-ne.gov 2. CURRENT SYSTEM The CITY'S financial statements are prepared in accordance with generally accepted accounting principles, established by the American Institute of Public Accountants (AICPA), and follow the standards established by General Accounting Office(GAO) Government Auditing Standards(1994). The CITY'S statements are prepared in accordance with the provisions of the federal Single Audit Act of 1984 (as amended in 1996) and the U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States and Local Governments, and Non- Profit Organizations. The accounting records for the General Fund, Special Revenue, Capital Project, Debt Service, Permanent, Trust, Agency, and Pension Funds are maintained using the modified accrual method of accounting. The accounting records for the Enterprise and Internal Service Funds are maintained in the full accrual method. The CITY maintains approximately 111 separate governmental funds and 15 enterprise funds. At year end, all of the funds reported on the modified accrual basis are restated using full accrual, per GASB 34. Budgeted revenues and appropriations are determined using the basis of accounting appropriate to the fund involved. The Omaha City Council annually approves the budgeted amounts for the CITY. Encumbrance accounting is employed as a means for budgetary control. The CITY utilizes the Oracle Enterprise Resource Planning system for its financial applications. The Oracle application is R12 version 12.1.3 and runs on the Oracle 11.2.0.3.0 database. The application and database are hosted by CedarCrestone, an application service provider. The application and database are hosted in a data center in Atlanta, Georgia. The system is accessed through a web-based browser("thin client"). The connection to the system is a private and secure T1 frame relay line. Several hundred users access this system. City of Omaha Audit Services 2014 7 The CITY currently uses the INFOR.SOLUTIONS (HCM) personnel/payroll system. The HCM system is a web based application that is hosted and run by the Douglas Omaha Technology Commission. Employee time is entered by centralized timekeepers and approved prior to processing. . The CITY's Budget staff consists of one full-time Fiscal Specialist and one full-time Applications Analyst, under the direction of the Budget Manager, Mr. Andrew Brott. The CITY's accounting staff consists of ten (10) full-time experienced Accountants and Grant Writers, under the direction of the Accounting Manager, Mr. Scott Winkler. These divisions are responsible for the preparation and control of the annual budget, general accounting, year-end closing and financial statement preparation, along with reviewing and appraising the soundness, adequacy and application of accounting, financial and other operating controls to promote effective control at reasonable cost, as well as ascertaining the extent of compliance with established plans and procedures. The Revenue Division is directed by MS. Donna Waller City Treasurer, and consists of ten (10) full-time employees. This division is responsible for all functions associated with revenue including forecasting, billing, collections and policy enforcement. 3. REQUIRED SERVICES The CITY desires a complete and comprehensive audit examination of the financial statements for each of the entity's funds, accounts, account groups, as well as all federal assistance programs and grants for which the CITY is a recipient. Auditors will be responsible to assist with the preparation and production of a Comprehensive Annual Financial Report (CAFR), which also includes supplemental statistical data. The City will provide trial balances,certain statistical data and other reports as required for the basis of the report. The final draft audit examination, accountant's report and management letter for each fiscal period ending December 31 shall be completed, filed and available for review by the CITY by May 15 of the following fiscal period for each of the CITY funds included in this RFP. The final audit examination, accountant's report (including the OMB Circular A-133 Single Audit Report) and management letter should be filed and available for distribution by the CITY by June 30. The auditors will assist the CITY in compiling the consolidated Governmental and Entity Wide statements and completion of the Comprehensive Annual Financial Report(CAFR), including supplemental statistical data. The audit examinations will be made in accordance with generally accepted auditing standards; the standards for financial audits contained in the Government Auditing Standards issued by the Comptroller General of the United States issued by the U.S. General Accounting Office, the Single Audit Act, and the provisions of the OMB circular A-133, Audits of State, Local Governments and Non-Profit Organizations, and all revisions and compliance supplements. The audit will also include a study and evaluation of the system of internal accounting controls of the CITY to evaluate the system as required by generally accepted auditing standards and the standards for financial and compliance audits contained in the U.S. General Accounting Office Government Auditing Standards issued by the Comptroller General of the United States. The audit examination for the CITY will include a test for compliance with applicable laws and regulations of the Omaha City Charter, the Omaha City Code, the Omaha City Council, and pertinent laws and regulations of the State of Nebraska governing the accounting and financial management of cities of the metropolitan class. The audits should each be an annual compliance audit covering the entire operations of the CITY and shall include: an executive summary, a report cover, index or table of contents, auditor's report, appropriate financial statements and supporting schedules, informative disclosures, auditor's report on the study and evaluation of the systems of internal control and auditor's report of compliance with laws and regulations. This reporting includes the production of the Comprehensive Annual Financial Report (CAFR) and supplemental statistical data. The City of Omaha Audit Services 2014 8 audit reports should be typed on letter size pages. Management letters which include recommendations affecting the financial statements, internal control, accounting systems and legality of actions and other matters considered appropriate are to be considered as an integral part of the audit reports. The CITY'S audit report will consist of a master report that is not punched, unbound and is camera ready for duplicating, and thirty-five (35) printed reports, bound and ready for distribution. These audit reports must also be submitted in electronic format to the Finance Department. Following direct delivery of the audit reports to CITY elected officials(Mayor and seven Council members) by the firm, all remaining reports are to be delivered to the Office of the Finance Director, Suite 1004, Omaha/Douglas Civic Center, 1819 Farnam Street, Omaha, Nebraska 68183. 4. INTERNAL ASSISTANCE The Manager of Accounting, previously identified, along with available staff as needed, will render all possible assistance, will respond promptly to requests for information and will provide opportunities to inspect the physical facilities and records as requested to help you adequately prepare for your proposal. The previous audit of the CITY and its various funds and federal assistance and grant-in-aid programs was conducted by KPMG, Certified Public Accountants. Copies of the audit reports are available for inspection at the Office of Stephen B. Curtiss, Finance Director, Room 1004, Omaha/Douglas Civic Center, 1819 Farnam Street, Omaha, Nebraska 68183. Copies of the audit reports for years 2005 through 2013 are also available on the City of Omaha website. http://www.cityofomaha.org/finance/ The Division of Accounting of the CITY'S Finance Department will provide detailed trial balances, supporting schedules and financial statements for your use. Prior year's working papers are available for your inspection, in the Accounting Division, Suite 1004, Omaha/Douglas Civic Center, 1819 Farnam Street Omaha, Nebraska 68183. Data Processing for all financial accounting is under the direction of the Douglas Omaha Technology Commission (DOT.Comm). DOT.Comm is a governmental entity formed by an Interlocal Agreement between Douglas County(COUNTY)and the CITY. The purpose of this entity is to increase the cooperative efforts of the COUNTY and the CITY in connection with electronic information, voice, and data communication services for governmental operations and public services. The CITY'S Legal Counsel will be available to the selected auditing firm on an as needed basis in relation to the audit. The City Attorney, Mr. Paul Kratz, will issue a representation letter concerning the status of legal action in progress, threatened litigation and actual or contingent liabilities. The Finance Director will issue a representation letter and will address unrecorded liabilities, pledged assets, contingencies and liabilities. The CITY will provide adequate physical facilities to the selected auditing firm for the duration of the audit, in their respective offices. Access to the internet, a copier machine and facsimile (fax) machine will be available for use in connection with the audits at no charge for audit related purposes. 5. ADDITIONAL PROVISIONS A. INCREASE OF FEES The parties hereto acknowledge that, as of the date of the execution of an Agreement, Section 10- 142 of the Omaha Municipal Code provides as follows: Any amendment to contracts or purchases which taken alone increase the original fee as awarded(a)by ten percent, if the original fee is one hundred fifty thousand dollars ($150,000) or more, or (b) by seventy-five thousand dollars($75,000) or more, shall be approved the City Council in advance of the acceptance of any purchase in excess of such limits. However, neither contract nor purchase amendments will be split to avoid advance approval of the City Council. City of Omaha Audit Services 2014 9 B. NON DISCRIMINATION- See Exhibit"C" C. INTEREST OF THE CITY Pursuant to Section 8.05 of the Home Rule Charter, no elected Official or any officer or employee of the City shall have a financial interest, direct or indirect, in any City Agreement. Any violation of this section with the knowledge of the person or corporation contracting with the CITY shall render the Agreement voidable by the Mayor or Councils. SECTION 2—PROPOSAL STANDARDS AND OPERATING PROVISIONS 1. AGREEMENT ARRANGEMENTS The agreement will be for a five year period with the option that the CITY may cancel in any of the years subsequent to the first year by providing a sixty (60) day notice is given prior to the fiscal year end, December 315f Prior to submission of the accountant's report and management letter, the selected auditing firm will be required to review draft copies with the President of the City Council, City Finance Director, City Comptroller and the Manager of the Accounting Division. The selected auditing firm must retain the audit working papers for a period of at least seven (7) years and further, the working papers must be made available for examination by authorized representatives of the cognizant Federal audit agency, the General Accounting Office, and the City's Finance and/or Law Departments. The CITY reserves the right to reject any and all proposals submitted and to request additional information from all service bidders. Any award made will be made to the firm who, based on evaluation of all responses, in the opinion of the Omaha City Council is professionally qualified to perform all of the requirements contained in this RFP after due consideration to the proposed cost of audit service fee. Firms submitting proposals subcontracting portions of the engagement to other audit firms must clearly identify the subcontractor in the proposal. Following the award of the audit contract, no additional subcontracting will be allowed without the express prior written consent of the CITY. No extended services will be performed unless they are authorized in the contractual agreement or in an amendment to the agreement. The selected auditing firm shall be required to submit prorated monthly invoices based upon the satisfactory execution of audit work performed. 2. TENTATIVE TIME LINE The following time considerations and requirements concerning the selection process and annual audit work are for your information and should be taken under consideration as you prepare your proposal. Dates and times are firm unless waived by the City Finance Director or his designee due to unforeseen circumstances A. Request for Proposals postcards mailed to qualified audit firms on or about September 3, 2014. City of Omaha Audit Services 2014 10 B. Public notice proposals from qualified audit firms published in the official Newspaper of the City of Omaha on or about September 3, 2014. C. Deadline for submission and receipt of questions is September 12th, 2014 at 4:00 PM CDT. D. Responses to questions posted on the Douglas County Purchasing Department's web site by September 19, 2014. E. Submission of proposals is due by 11:00 AM on Wednesday, September 24, 2014, in accordance with Section 3 of this Request for Proposal. F. Written proposals will be evaluated in accordance with Section 4 of the Request for Proposal on or about September 25, 2014 through October 10,2014. G. Firms selected for interviews in accordance with Section 4 will be scheduled for interviews from October 15, 2014 through October 17, 2014. H. Final selection will be made during the months of October or November, 2014. I. Upon final selection, the Finance Department will prepare the necessary Council documents for Council action on the next available Council date. J. Preliminary audit work is expected to begin upon Council approval. 3. REPORT REQUIREMENTS The audit report, executive summary and management letter shall be addressed to the Omaha City Council, City of Omaha and shall include all the financial statements in the same format and content as the audit reports received by the CITY for the previous fiscal year. This must include all reports to facilitate submission of the CAFR to the Government Finance Officers Association (GFOA) for the annual Certificate of Achievement for Excellence in Financial Reporting. Copies of these audit reports will be available for inspection at the office of Stephen B. Curtiss, Finance Director, Suite 1004, Omaha/Douglas Civic Center, 1819 Farnam Street, Omaha, Nebraska 68183, during the CITY'S regular business hours. The audit reports shall include the auditor's report of compliance applicable to each major program and internal control compliance in accordance with OMB Circular A-133. The auditor's report on compliance shall include the completion of the data collection form reporting on Audits of States, Local Governments and Non-Profit Organizations(Form SF-SAC). The audit reports shall include the auditor's opinion report on the financial statements and on a Schedule of Expenditures of Federal Awards, showing total expenditures for each Federal assistance program as identified in the Catalog of Federal Domestic Assistance, and all other Federal programs and grants which have not been assigned catalog numbers. The audit reports shall include the auditor's report on compliance and on internal control over financial reporting based on an audit of financial statements prepared in accordance with government auditing standards. The audit report shall include an auditor's report on compliance, which contains: A. A statement of positive assurance with respect to those items tested for compliance including compliance with laws, rules and regulations pertaining to non-major programs and other items which could have a material effect on financial reports and claims for advances and reimbursements. In addition, the report must disclose any compliance with laws and regulations that may have a material effect on each major federal assistance program. B. A statement of negative assurance on those items not tested. C. A summary of all instances of noncompliance, and D. An identification of total amounts of costs questioned, if any, for each Federal Assistance award as a result of noncompliance. The management letters required shall include statements of audit findings and recommendations affecting the financial statements, internal control, general accounting, accounting systems including data processing interface, legality of actions and other material matter. City of Omaha Audit Services 2014 11 Any instances of fraud, waste or illegal acts, or indications of such, including all questioned costs must be covered by separate written reports to the Federal department or agency which provided the Federal assistance funds. 4. AUDIT MANAGEMENT If, during the performance of the audit, the auditing firm concludes that there are irregularities or an unqualified opinion cannot be issued, the auditing firm must immediately notify the President of the City Council, Mayor, City Council members, the Finance Director and the City Comptroller of all matters which preclude issuance of an unqualified opinion. In order to enable the CITY to maintain a high level of accounting and auditing experience, the selected firm will be expected to assist and advise concerning mandatory or recommended modifications to the accounting system in their annual statements. The final exit conferences will be held with the President of the City Council, Finance Director, City Comptroller, and the Manager of Accounting. SECTION 3—SUBMITTAL REQUIREMENTS Those firms interested in responding to this RFP are required to submit their proposal in the following format: Those submitting sealed proposals should indicate on the outside of the envelope in the lower left hand corner that it is a sealed proposal for"Audit Services for the City of Omaha". The name of the firm submitting the proposal should also be indicated on the outside of the envelope. One (1) original, five (5) bound and sealed copies and one(1)electronic copy(CD or flash drive) are to be delivered to: Office of the Omaha City Clerk LC-1 Civic Center 1819 Farnam Street Omaha,NE 68183-0011 Proposals must be received by 11:00am, Wednesday, September, 24, 2014. Proposals received after 11:00 a.m. CDT on that date will not be considered. Oral, telephone, telegraphic or other electronic medium proposals will not be considered. 1. TITLE PAGE Present the subject of your proposal, the name of your firm, local address of the office that will be performing the work, name of the contact person and the date. All proposals submitted are to remain in effect throughout the award. 2. TABLE OF CONTENTS Present a clear and comprehensive identification of the contents of your proposal by section and by page number. 3. LETTER OF TRANSMITTAL A brief letter of transmittal is required. Within this letter include statements to the following: A. Your firm's understanding of the work to be accomplished. B. That upon the award of this contract, your firm will make a positive commitment to perform the audit work within the scheduled time period. C. A summary of the cost of service fee(s)to be charged for the work, and a statement that these fees are fixed, complete and inclusive(See Bid submission Sheet A). D. The name of the individuals who will be authorized to make representations for your firm, their titles, addresses, and telephone numbers. E. That the signatory of the transmittal letter has the authority to bind your firm. 4. COMPANY PROFILE City of Omaha Audit Services 2014 12 A A profile of your firm is required. Within the profile statement, at a minimum, present the following: 1) Whether your firm is local,regional,national or international. 2) The location of the office from which the engagement is to be performed and a brief narration of the number of professional staff(i.e. partners, managers, supervisors, etc.) employed at that office. 3) Describe the range of services provided by the office performing the engagement (e.g. auditing, tax. consulting). 4) A listing of other similar governmental auditing performed by your firm within the Eastern Nebraska/Western Iowa regional area, and a listing of audit engagements, with dates and contact person(s),for other major cities. 5) Affirmation that your firm is licensed to practice as certified public accountants in Nebraska. 6) Affirmation that your firm meets the independence requirements of the Government Auditing Standards issued by the Comptroller General of the United States. 7) Affirmation that your firm does not have a record of substandard audit work. 8) Affirmation that your firm is in compliance with the City of Omaha Contract Compliance regulations and have or will have a completed form CC-1 on file with the City's Human Relations Department. For information contact Rhonda Uher at 402-444-5067. 9) Affirmation that your firm shall maintain during the life of this contract, Professional Liability Insurance, naming and protecting the CITY against claims for damages resulting from the firm's errors, omissions, or negligent acts. Such policy shall contain a limit of liability not less than two million dollars. The insurance shall be written by a company duly authorized and licensed to do business in the State of Nebraska and shall be maintained until all auditing work has been completed and accepted by the CITY. A certificate of insurance evidencing policies shall be furnished to the CITY and such certificate shall specifically indicate that insurance policies shall give the CITY at least thirty (30) days written notice in the event of cancellation of or material change in any of the policies. B. SUMMARY OF YOUR FIRM'S QUALIFICATIONS A summary of your firm's qualifications is required. Include in the summary the identity of all senior administrative staff that will be assigned to this audit(i.e. partner, manager). Identify those individuals at the supervisory and staff levels that will be assigned to this engagement. For the supervisory and staff level personnel, including any that might be from offices other than the engagement office, include resumes detailing relevant experience and continuing education. Include these resumes as an appendix to your proposal. 5. APPROACH TO THE EXAMINATION A statement of Approach to the Examination is required. Within this statement, present your firm's plan to complete the scope of services defined in Section 1, Proposal Description and Scope of Services, of this RFP. Incorporate into this plan, estimates of the amount of time to accomplish each significant segment of the engagement and the staff levels to be assigned to these segments. Where specialists are to be utilized indicate such. Include total of the work hours required to complete the scope of services. A. FINANCIAL AUDIT 1). Include statements that the examination will be performed in accordance with generally accepted auditing standards. 2). The primary purpose of the examination is to express an opinion on the financial statements and that such an examination is subject to the inherent risk that errors and irregularities may not be detected. State that if conditions are discovered which lead to the belief that material errors, defalcations, or other irregularities may exist, or if any City of Omaha Audit Services 2014 13 other circumstances are encountered that require extended services, the auditor will promptly advise the Finance Director and/or the City Comptroller. And finally, state that no extended services will be performed unless they are authorized in the contractual agreement or in an amendment to the agreement. B. COMPLIANCE AUDIT State that in accordance with the auditing standards of the cognizant federal, state and municipal agencies or in accordance with other applicable standards, your firm will select the necessary procedures to test compliance and to disclose noncompliance with specified laws, regulations and contracts. C. WORK SCHEDULE Audit work should begin on or about December 1, and conclude by June 30 of the following year with the issuance of the completed audit and all reporting schedules. State law requires audit reports to be submitted six months after the end of the fiscal year. The City fiscal year ends on December 31. 6. PROPOSED COST OF AUDIT SERVICE FEE A proposed Cost of Audit Service Fee is required. The Cost of Audit Service Fee is to be fixed, complete and all- inclusive. It is to include all of the costs, prices, charges, inflation, expenses, overhead, labor, fringe, taxes, margin, markup, add-ons and any other fees you incur in completion of the Audit Engagement. Complete Bid Submission Sheet A and submit it with your proposal. Prepare on an additional page a similarly formatted schedule of any proposed itemized additional services your firm would like to have considered by the Audit Evaluation Committee. SECTION 4 EVALUATION METHOD 1. An audit evaluation committee for the CITY has been formed to review the proposals submitted in response to this RFP. The membership of this committee shall consist of the three representatives: the City Finance Director, the City Comptroller, and a representative from the City Council. Additional members may be added at the request of the Finance Director. Use Bid Submission Sheet A to bid on the CITY'S audit services. The CITY'S committee members will review the proposals independently and then meet to form a consensus rating of all proposals received. The top rated firms will be invited to participate in a two staged interview process. The first stage of this process will consist of a twenty-minute oral presentation of your firm. The second stage of the process will consist of a question and answer period conducted by the audit evaluation committee. The entire interview process is expected to be completed in the forty to forty-five minute range. The CITY'S Audit Evaluation Committee will consider the results of the interviews and formulate a recommendation. The Audit Committee of the Omaha City Council will then forward the recommendation to the full Omaha City Council who is ultimately responsible for the selection of the auditing firm to perform the annual financial audit. City of Omaha Audit Services 2014 14 BID SUBMISSION SHEET A COSTS OF AUDIT SERVICES FOR CITY OF OMAHA CONTRACTOR NAME: Bid Submission Sheet A is mandatory for firms submitting a City proposal. 2014 2015 2016 2017 2018 Proposal for the audit of all CITY of Omaha $ $ $ $ $ general funds and accounts for the fiscal year ending December 31, Proposal for the audit of the CITY'S federal and $ $ $ $ $ state financial assistance programs required by the Single Audit Act for the fiscal year ending December 31, TOTALS It is understood that the fees for the services set above shall be reimbursed at the following hourly rates: Information for each year must be included (if there is a variance). CLASSIFICATION ESTIMATED HOURS HOURLY RATE Partner Manager Staff Total The CITY requires that the firm will present a monthly bill for services. The last 20% will be retained by the CITY until all deliverables are received. Payment shall be made within 15 days of receipt of invoice. Firm Name: Authorized Representative, Title: Date Submitted: City of Omaha Audit Services 2014 15 EXHIBIT"C" EQUAL EMPLOYMENT OPPORTUNITY CLAUSE During the performance of this Agreement, "Contractor"agrees as follows: (1) Contractor shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, age, sexual orientation, gender identity, disability or national origin. Contractor shall ensure that applicants are employed and that employees are treated during employment without regard to their race, religion, color, sex, sexual orientation, gender identity, or national origin. As used herein, the word "treated" shall mean and include, without limitation, the following: recruited, whether by advertising or by other means; compensated; selected for training, including apprenticeship; promoted; upgraded; demoted; downgraded; transferred; laid off; and terminated. Contractor agrees to and shall post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officers setting forth the provisions of this nondiscrimination clause. (2) Contractor shall, in all solicitations or advertisements for employees placed by or on behalf of Contractor, state that all qualified applicants will receive consideration for employment without regard to race, religion, color, sex, sexual orientation, gender identity,or national origin, age, disability. (3) Contractor shall send to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding a notice advising the labor union or worker's representative of Contractor's commitments under the Equal Employment Opportunity Clause of the City and shall post copies of the notice in conspicuous places available to employees and applicants for employment. (4) Contractor shall furnish to the City Contract Compliance Officer all Federal forms containing the information and reports required by the Federal government for Federal contracts under Federal rules and regulations, and including the information required by Sections 10-192 to 10-194, inclusive, and shall permit reasonable access to his records. Records accessible to the City Contract Compliance Officer shall be those which are related to Paragraphs (1) through (7) of this Exhibit and only after reasonable advance written notice is given to Contractor. The purpose for this provision is to provide for investigation to ascertain compliance with the program provided for herein. (5) Contractor shall take such actions as the City may reasonably direct as a means of enforcing the provisions of Paragraphs (1)through (7) herein, including penalties and sanctions for noncompliance; however, in the event Contractor becomes involved in or is threatened with litigation as the result of such directions by the City, the City will enter into such litigation as necessary to protect the interests of the City and to effectuate the provisions of this division; and in the case of contracts receiving Federal assistance, Contractor or the City may request the United States to enter into such litigation to protect the interests of the United States. (6) Contractor shall file, if any, compliance reports with Contractor in the same form and to the same extent as required by the Federal government for Federal contracts under Federal rules and regulations. Such compliance reports shall be filed with the City Contract Compliance Officer. Compliance reports filed at such times as directed shall contain information as to the employment practices, policies, programs and statistics of Contractor. (7)The Contractor shall include the provisions of Paragraphs (1)through (7) of this Section, "Equal Employment Opportunity Clause", and Section 10-193 in every subcontract or purchase order so that such provisions will be binding upon each sub-Contractor or vendor. City of Omaha Audit Services 2014 16 BID SUBMISSION SHEET B COSTS OF AUDIT SERVICES FOR CITY OF OMAHA CONTRACTOR NAME: BKD,LLP 2014 2015 2016 2017 2018 Proposal for the audit of all CITY of Omaha general $123,200 $127,500 $132,000 $136,750 $141,750 funds and accounts for the fiscal year ending December 31, (including report production) with a completion date no later than June 30 of the following year. Proposal for the audit of the CITY'S federal and state $26,800 $27,750 $28,750 $29,750 $30,750 financial assistance programs required by the Single Audit Act for the fiscal year ending December 31, (including report production) with a completion date no later than June 30 of the following year. TOTALS $150,000 $155,250 $160,750 $166,500 $172,500 Fees for the Single Audit include auditing up to three major programs each year. Additional programs will be billed at$8,500 per program. It is understood that the fees for the services set above and fees for additional services shall be reimbursed at the following hourly rates. Information for each year must be included(if there is a variance). CLASSIFICATION ESTIMATED HOURS HOURLY RATE Partner 65 $245 Manager 120 $150 Staff 1,115 $100 Total 1,300 The CITY requires that the firm will present a monthly bill for services. The last 20%will be retained by the CITY until all deliverables are received. Payment shall be made within 15 days of receipt of invoice. Firm Name: BKD,LLP Authorized Representative, Title: Robyn A. Devore,CPA, Partner Signature of authorized representative: a, Date Submitted: /O/'3 //'� City of Omaha Audit Services 2014 1 CITY ACCEPTS THE AUDIT PROPOSAL OF BKD LLP FOR 20014 TO 2018 ATTEST: CITY OF OMAHA A By: I CLERK F HE CITY OF M A MAYOR APP OV D • TO FORM: ap, CITY ATTORNE DATE City of Omaha Audit Services 2014 2 / ORDINANCE NO. -/e5N/ • AN ORDINANCE approving a Contract between the City of Omaha, a Municipal Corporation, and BKD LLP, to approve and execute an Independent Annual Audit Agreement as provided in Section 2.21 of the Home Rule Charter of the City of Omaha, 1956, as amended, involving the payment of money from appropriations of more than one year as provided in Section 5.17 of the Home Rule Charter of the City of Omaha, 1956, as amended, for the performance of an audit examination of all City funds and accounts, for the fiscal years ending December 31, 2014, December 31, 2015, December 31, 2016, December 31, 2017 and December 31, 2018, made in accordance with the Official Proposal submitted on September 24, 2014, by BKD PRESENTED TO COUNCIL LLP; and to provide the effective date hereof. The Finance Department is 1st adi g NOV — 4 2014 �ji authorized to pay for the 2014 to 2018 audits /j s' y /r u�� `- l"x�x �"'/ from the General Fund 11111, General ��'�77/_/f r PUBLICATIONS Expense/Insurance 119014. Heari g V 1 8 2014 - P:\FIN 1029vg1 �/y PUBLICATION OF HEARING Date //r(— 7- 171 Final Reading „.,NOV 2 5 2014 Passed - PUBLICATION OF ORDINANCE ) ° Date I,, --,3_ 1+ BUSTER BROWN City Clerk