HomeMy WebLinkAboutC2005-280 - 6/14/2005 - Approved PROFESSIONAL AUDITING SERVICES CONTRACT BETWEEN
CITY OF CORPUS CHRISTI TEXAS AND COLLIER, JOHNSON & WOODS
'INs Professional Auditing Services Agreement ("Agreement") is entered into by and between the
City of Corpus Christi, a mulficipal corporation ("City"), and Collier, Johnson & Woods,
("Contractor") effective for all purposes upon execution by the City Manager.
WHEREAS, City desires to have financial stalements audited for fiscal year ended July 31, 2005.
NOW, THEREFORE, Contractor and City agree as follows:
1. SERVICES TO BE PERFORMED.
The Contractor agrees to provide professional auditing services to audit City's financial statements
fi~r the fiscal year ending July 3 ], 2005. At the request of the City Manager, Contractor may
perform annual auditing of the financial statements for up to four additional one-year periods.
These audits are to be performed in accordance with auditing standards generally accepted in the
1 r nited S rotes of America, the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States, the provisions of the
federal Single Audit Act of 1984 (as amended in 2003) and U.S. Office of Management and Budget
(()MB) Circular A- 133, Audits Q/'Slale& Local Governments. and Von-Profit Organizations.
I1. SCOPE OF SERVICES.
Contractor shall perform the professional auditing services in accordance with the Request for
Proposals (RFP) dated February 25, 2005, as amended, attached as Exhibit "A," Contractor's
proposal dated March 24, 2005. attached as Exhibit "B", and Contractor's engagement letter dated
June 8, 2005. attached as Exhibit "C". In the event of conflict between Contractor's proposal and
thc terms of this Agreement. this Agreement shall control.
III. CONTRACT ADMINISTRATOR.
The parties agree perlbrmance of the work shall commence upon authorization to proceed by the
City Contract Administrator. The Director of Financial Services is designated as the Contract
Administrator responsible for all phases of pcrlbrmance and operations under this Agreement,
including authorizations for payment. All notices or communications regarding this Agreement
shall be directed to the Contract Administrator.
IV. TERM.
The term of this Contract shall be lbr twelve months, with an option to extend for up to four
additional twelve-month periods sulqject to the approval of the Contractor and the City Manager or
his designee.
2005-280
06/14/05
M2005-188
(oilier, Johnson &Woods
¥. FEE FOR SERVICES.
'[otal ['ecs for all services provided by Contractor under this Agreemem for the initial term shall not
exceed $126,000 unless expressly authorized by written amendment to this Agreement.
estimated fees for subsequent terms are:
Year ended July 31, Estimated Fees
2006 $128,000
2007 $132.000
2(t08 $136,000
2009 $140.000
Progress payments shall 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 Contractor's proposal.
Interim billing shall cover a period of not less than a calendar month.
VI. TERMINATION OF CONTRACT.
The City may, at any time, with or without cause, terminate this Contract upon thirty days written
notice to the Contractor at 555 N. Carancahua, Suite 1000, Corpus Christi, Texas 78478-0052.
VII. APPROPRIATION OF FUNDS.
All parties recognize that the continuation of any contract after the close of any fiscal year of City,
which fiscal year ends on July 31 of each year, shall be subject to appropriations and budget
approval providing for covering such contract item as an expenditure in said budget. City does not
represent that the budget item will be actually adopted, said determination being within the sole
discretion of the City Council at the time of adoption of such budget.
Vlll. ASSIGNABILITY.
The Contractor shall not assign, transfer, or delegate any of his obligations or duties in this Contract
to any other person without the prior written consent of the City, except for routine duties delegated
to field assistants and clerical helpers. The performance of this Agreement by Contractor is the
essence of this Agreement and City's right to withhold consent to such assignment shall be within
thc sole discretion of the City on any grounds whatsoever.
IX. INDEPENDENT CONTRACTOR.
Contractor shall perlbrm all professional services as an independent contractor and shall furnish
such services in its own manner and method, and under no circumstances or conditions shall an
agent, servant, or employee of the Contractor be considered an employee of the City.
X. SUBCONTRACTORS.
( ontractor may use subcontractors in connection with the work performed under this Agreement.
When using subcontractors, however, Contractor must obtain prior written approval from the City.
In using subcontractors, Contractor agrees to be responsible for all their acts and omissions to the
same extent as if the subcontractor and its employees were employees of the Contractor. All
requirements set forth as part of this Agreement shall be applicable to all subcontractors and their
employees to the same extent as if the Contractor and its employees had performed the services.
Xi. VENUE AND APPLICABLE LAW.
This Agreement shall be subject to all Federal, State and local laws. All duties of the parties shall
be performed in the City of Corpus Christi, Texas. The applicable law for any legal disputes arising
out of this Agreement shall be the law of Texas and such forum and venue for such disputes shall be
the appropriate district, county, or justice court in and For Nueces County, Texas.
XII. INDEMNIFICATION.
Contractor agrees to indemnify and save harmless City, its agents, servants, and employees from
any and all liabilities, losses, damages, or expenses, including attorney's fees resulting from
Contractor's negligence or willful acts or omissions while in performance of this Agreement.
XIII. INSURANCE.
Contractor agrees to provide insurance in accordance with the Exhibit "D".
XIV. NO WAIVER.
No waiver of any covenant or condition, or the breach of any covenant or condition of this
Agreement, constitutes a waiver of any subsequent breach of the covenant or condition of the
Agreement
XV. AMENDMENTS OR MODIFICATIONS.
No amendments or modifications to this Agreement may be made, nor any provision waived, unless
in writing signed by a person duly authorized to sign agreements on behalf of each party.
XVI. RELATIONSHIP OF PARTIES.
In performing this Agreement, both the City and Contractor shall act in an individual capacity, and
not as agents, representatives, employees, employers, partners, joint-venturers, or associates of one
another. The employees or agents of either party may not be, nor be construed to be, the employees
or agents of the other party, for any purpose.
XVII. CAPTIONS.
The captions in this Agreement are for convenience only and are not a part of this Agreement. The
captions do not in any way limit or amplify the terms and provisions of this Agreement.
XVIlI. SEVERABILITY.
If for any reason, any section, paragraph, subdivision, clause, provision, phrase or word of this
Agreement or the application of this Agreement to any person or circumstance is, to any extent,
held illegal, invalid, or unenfbrceable under present or future law or by a final judgment of a court
of competent jurisdiction, then the remainder of this Agreement, or the application of the term or
provision to persons or circumstances other than those as to which it is held illegal, invalid, or
unenfurceable, will not be affected by the law or judgment, for it is the definite intent of the parties
to this Agreement that eveu' section, paragraph, subdivision, clause, provision, phrase, or word of
this Agreement be given full force and effect for its purpose. To the extent that any clause or
provision is held illegal, invalid, or unenforceable under present or future law effective during the
term of this Agreement, then the remainder of this Agreement is not affected by the law, and in lieu
o1' an)' illegal, invalid, or unenforceable clause or provision, a clause or provision, as similar in
terms to the illegal, invalid, or unenforceable clause or provision as may be possible and be legal,
valid, and enforceable, will be added to this Agreement automatically.
IXX. NOTICES.
Notices provided shall be in writing and delivered Lo:
On behalf of the City:
City of Corpus Christi
Director of Financial Services
P.O. Box 9277
Corpus Christi, TX 78469-9277
On behalf of the
Contractor:
Collier, Johnson & Woods
555 N. Carancahua, Suite 1000
Corpus Ckristi, Texas 78478-0052
XX. SOLE AGREEMENT.
This Agreement constitutes the sole agreement between the City and Contractor. Any prior
agreements, promises, negotiations, or representations, verbal or otherwise, not expressly stated in
this Agreement, are of no force and effect.
EXECUTED IN DUPLICATE, each of which shall be considered an original, this 6/17(day of
~ .2005.
ATTEST: CITY OF CORPUS CHRISTI
Armando Chapa
City Secretary
APPROVED THIS ti DAY OF ,J~
By:
Assistant Ci~__~ttoruey
For City Attorney
Name:
Title:
Date:
,2005
City Manager
Attachments: Exhibit "A," City of Corpus Christi Request for Proposal
Exhibit "B," Collier, Johnson & Woods, Proposal
Exhibit "C," Collier, Johnson & Woods, Engagement Letter
Exhibit "D." Insurance Requirements
EXHIBIT "D"
INSURANCE REOUIREMENTS
AUDITOR'S INSURANCE
Auditor must not commence work under this agreement until all insurance required
herein have been obtained and the City has approved such insurance. Auditor must not
allow any subcontractor to commence work until all similar insurance required of the
subcontractor has been obtained.
B Auditor must furnish to the City's Risk Manager, two (2) copies of Certificates of Insurance,
showing the following minimum coverage by insurance company(s) acceptable to the City's
R~sk Manager. The City must be named as an additional insured for the General and
Automobile liability policies and a blanket waiver of subrogation is required on all
applicable policies.
TYPE OF INSURANCE MINIMUM INSURANCE COVERAGE
30-Day written notice of non-renewal,
termination or material change and 10 day
written notice of cancellation is required on all
certificates
COMMERCIAL GENERAL LIABILITY
including:
1. Commercial Form
Premises - Operations
3. Products/Completed Operations Hazard
4. Contractual Liability
Bodily Injury and Property Damage
Per occurrence aggregate
$1,000,000 COMB1NED S1NGLE LIMIT
AUTOMOBILE LIABILITY $1,000,000 COMBINED SINGLE LIMIT
1 OWNED, NON-OWNED AND RENTED
WORKERS COMPENSATION
EMPLOYERS LIAB IL[FY
PROFESSIONAL LIABILITY including:
Coverage provided must cover officers, directors,
employees and agents
ERRORS and OMISSIONS
Which complies with the Texas Workers'
Compensation Act and Section II of this exhibit
$500,000/$500,000/$500,000
$1,000,000 COMBINED SINGLE LIMIT
C. In the event of accidents of any kind, Auditor must furnish the Risk Manager with copies of
all reports of such accidents within 10 days of any accident.
Il
ADDITIONAL REQUIREMENTS
Auditor must obtain workers' compensation coverage through a licensed insurance company
obtained in accordance with Texas law. The contract for coverage must be written on a
policy and endorsements approved by the Texas Department of Insurance. The coverage
provided must be in amounts sufficient to assure that all workers' compensation obligation
incurred by the Auditor will be promptly met.
B. Certificate of Insurance:
The City of Corpus Christi must be named as an additional insured on the General
Liability policies and a blanket waiver of subrogation is required on all applicable
policies.
If your insurance company uses the standard ACORD form, the cancellation clause
(bottom right) must be amended by adding the wording "changed or" between "be"
and "canceled", and deleting the words, "endeavor to", and deleting the wording
after "left". In the alternative, verification of endorsement to the applicable policy is
acceptable.
c. The name of the project must be listed under "Description of Operattons"
d At a minimum, a 30-day written notice of non-renewal termination or material
change and a 10-day written notice of cancellation is required.
C. If the Certificate of Insurance does not show on its face the existence of the coverage
required by items 1.B (1)-(4), an authorized representative of the insurance company must
include a letter specifically stating whether items lB. (1)-(4) are included or excluded.
City of
Corpus
Christi
CITY OF CORPUS CHRISTI, TEXAS
FINANCIAL SERVICES DEPARTMENT
REQUEST FOR PROPOSAL
FOR
PROFESSIONAL AUDITING SERVICES
FEBRUARY 25, 2005
1201 LEOPARD STREET
CORPUS CHRISTI, TEXAS 78401
BI-0081-05
Professional Auditing Services
Table of Contents
Section 1.0 Notice of Request for Proposal
1.1 Request For Proposal
1.2 Submission of Proposal
1.3 Tentative Schedule
Section 2.0 Conditions Governing the Procurement
2.1 Acceptance of General Requirements
2.1.2
2.1.3
2.1.4
2.1.5
2.1.6
2.1.7
2.1.8
2.1.9
2.1.10
2.1.11
2.1.12
2.1.13
2.1.14
2.1.15
2.l.16
2.1.17
2.] ,18
2.1.19
2.1 20
2.1.21
2.1.22
2.1.23
2.1.24
2.1.25
2.1.26
2.1.27
2.1.28
2.1.29
2.1.30
2_1.31
2.1.32
2.1.33
RFP Notice Requirement
RFP Procedural and Content Questions
Basis for Proposal
Closing of Proposals
Proposer Tcims and Conditions
Disclosure of Proposal Contents
Late Proposals
Signing of Proposals
Cost of Proposal
Disclosure of Interest
Equal Employment Opportunity
Ownership of Proposals
Disquahfication or Rejection of Proposals
Right to Waive Irregularities
Withdrawal of Proposals
Amending of Proposals
Proposal Offer Firm
Proposer Qualifications
Exceptions to RFP Specifications
Consideration of Proposals
Termination of RFP
Contract
Governing Law
No Obligation
Contract Deviations
Sufficient Appropriation
Recommendation to City Council
Award of Contract
Execution of Contract
Contract Payment
Disputes
Change in Contractor Representatives
2.1.34
2.1.35
2.1.36
2.1.37
2.1.38
Section 3.0
3.1
3.2
3.3
3.4
3.5
3.6
3.6.1
3.6.2
3.6.3
3.6.4
3.6.5
3.6.6
3.6.7
3.6.8
3.6.9
3.7
3.7.1
3.7.2
3.7.3
3.7.4
Change Requests
Tumfination of Contract
Right to Publish
Proposer's Ethical Behavior
Scope of Work
Nature of Services Required
Auditing Standards to be Followed
Reports to be Issued
Special Considerations
Subcontracting / Joint Ventures
Description of the City
Fund Structure
Budgetary Basis of Accounting
Federal and State Awards
Pension Plans
Component Units
3.6.5.1 Blended Component Units
3.6.5.2 Discretely Presented Component Units
Related Organizations and Jointly Governed Organizations
Magnitude of Financial Operations
Computer Systems
Working Papers
Assistance to be Provided to the Auditor and Report Preparation
Financial Services Department
Statements and Schedules to be Prepared by the City of Corpus Christi Staff
Work Area, Telephones, Photocopying and Fax Machines
Report Preparation
Section 4.0
4.1
4.2
4.2.1
4.2.2
4.2.3
4.2.4
Proposal Format and Organization
General Instructions
The Proposal Format
Transmittal Letter
Table of Contents
Information Requested
General Questionnaire
4.2.4.1
4.2.4.2
4.2.4.3
4.2.4.4
4.2.4.5
4.2.4.6
4.2.4.7
4.2.4.8
4.2.4.9
Program System Concept and Solution
Program - Technical
Project Management Structure
Firm Background, Personnel and Prior Experience
Understanding of the City's Commitment to Plan Preparation
Other Pertinent Information as Reqmred
Authorized Negotiator
Local Participation
Concluding Remarks
ii
Sec~on 5.0
5.1
5.2
5.3
5.4
Attachments
Exhibit A.
Exhibit B.
Exhibit C.
Exhibit D.
4.2.3
Cost of Services
4.2.3.1 Out-of-pocket Expanses
4.2.3.2 Rates by Partner, Specialist, Supervisors and Staff
4.2.3.3 Additional Professional Services
Proposal Evaluation
Committee
Evaluation Criteria
Additional Evaluation
Recommendation of the Committee
Disclosure of Interest
Exception Page
Sample Contract
Organizational Chart
iii
Section 1.0 Notice of Request for Proposal
The City of Corpus Christi, hereinafter referred to as the "City", seeks proposals in response to
the request from qualified firms of certified public accountants to audit its financial statements
lbr the fiscal year ending July 31, 2005, with the option of auditing its financial statements for
each of the four subsequent fiscal years. These audits are to be performed in accordance with
generally accepted auditing standards, the standards set forth for financial audits in the General
Accountmg Office's (GAO) Government Auditing Standards (2003), the provisions of the federal
Single Audit Act of 1984 (as amended in 2003) and U.S. Office of Management and Budget
(OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizattons.
The City has designated Cindy O'Bnen, Director of Financial Services, as Project Manager with
overall project responsibility for adm~mstration of the project. The Project Manager will serve as
the Technical Project Coordinator responsible for day-to-day administration and coordination of
project activities:
Cindy O'Brien
Director of Financial Services
City of Corpus Christi
P.O. Box 9277
Corpus Christi, Texas 78469-9277
Phone: (361) 880-3610
Fax: (361) 880-3601
~Io facilitate the RFP process, the Project Manager has designated Michael Barrera as RFP
Project Coordinator to serve as the City's single point of contact throughout the proposal,
evaluation and award process. All inquiries or requests regarding tiffs RFP must be submitted, in
writing, to the RFP ProJect Coordinator as indicated below. Other employees do not have the
authority to respond for the City in writing, and the attempt to question other employees
regarding this RFP may result in the Proposer's disqualification. Only written responses fi-om
the RFP ProJect Coordinator will be binding with regard to inquiries requesting clarifications or
additional information. 32ne RFP Project Coordinator's written responses will be forwarded
simultaneously to all prospective Proposers.
Michael Barrera
Procurement & General Services Manager
City of Corpus Christi
P.O. Box 9277
Corpus Christi, Texas 78469-9277
Phone: (361) 880-3169
Fax: (361) 880-3174
The Proposer must submit six (6) copies of the response to this RFP to the City of Corpus Chnst~
as specified below. All responses must be complete and accurate and must be on City approved
lbrms and in City approved format.
The City will review and evaluate the written responses to this RFP. The City may conduct
additional interviews with selected Proposers for the purpose of further exploring and clarifying
the Proposer's response. The City will rank the Proposers based on the suggested evaluation
criteria set forth in the Evaluation Model of this RFP. The City will then negotiate the applicable
terms and conditions into the final form of the Professional Services Agreement with the first
ranked Proposer for the completion of required work for the project. If contract negotiations are
not successful w~th the selected Proposer, the City will begin negotiations with the next Proposer
on the list. Award(s) will be placed by best overall value to the C~ty.
RFP responses will be evaluated to ascertain which Proposer best meets the needs of the City.
The City intends to utilize an Evaluation Model specifically designed for this analysis. The
Evaluation and Selection process will be based upon R~sk, Strategic Need, Technical Solution,
and Cost parameters. The weightings of these parameters will be designated by the Evaluation
Committee.
Proposals should be returned in a sealed envelope marked with the Proposer's name, address and
the file number corresponding to this RFP. The Proposals will be received until Thursday,
March 24, 2005 at 12:00 noon.
-[he Proposer can mail the Proposal to the following address:
City of Corpus Christi (6 copies)
Purchasing Division
P.O. Box 9277
Corpus Christi, Texas 78469-9277
OR, The Proposer may deliver the Proposal in person to the following addresses:
City of Corpus Christi (6 copies)
Purchasing Division
4~h Floor, City Hall
1201 Leopard Sr
Corpus Christi, Texas 78401-2825
Proposer shall comply with the additional detailed instructions regarding submission of
Proposals found in Section 4.0 of this RFP.
A final report will be prepared by the Evaluation Committee documenting the Proposer's
capabilities based on the merits of the Proposal.
The/rbllowing is a tentative schedule of project evaluation and selection activities:
D ate
¼February 19, 2005
7-~M~!h 8, 2005
March 24, 2005
I April 8, 2005
DApnl 19, 2005
~April 26, 2005
!~No~ember 30, 2005
Project Activity
Advertisement in Local Paper.
Deadline for questions 5:00 pm CST.
Proposals due by 12:00 noon CST.
Proposal Evaluation Complete.
Selection and Award Conlzact(s) by City Council.
Alternate date for Selection and Award Contract(s) by
City Council.
Comprehensive Annual Financial Report (CAFR) due
Section 2.0 Conditions Governing the Procurement
Fhe Proposer must accept the project requirements by paragraph number contained within
Sections 2.0, Conditions Governing the Procurement and 3.0, Scope of Work~ in the transmittal
letter as set forth in Section 4.2.1 of th~s RFP.
Notice of Request for Proposal shall be published in the Corpus Christi Caller-Times once a
week for two consecutive weeks. The date of the first publication will be at least fourteen (14)
days prior to the Proposal due date.
,&ny Proposer requiring further clarification of the Request for Proposal procedures cont/med
herein should submit specific questions in writing to the RFP Project Coordinator at the address
set out in Section 1.1 on page 1 of this RFP.
During a review of this RFP and preparation of the Proposal, certain errors, omissions, or
ambiguities may he discovered. If so, or if there are doubts or concerns about the meaning of
any part of this RFP, written questions should be submitted by March 8, 2005 to the RFP
Project Coordinator at the address set out in Section 1.1 on page l of this RFP. This will allow
time to answer the questions and distribute them so that all potential Proposers wil] have the
benefit of the revised information.
Only information supplied by the City in writing through the RFP Project Coordinator in this
RFP should be used in the preparation of Proposer's Proposal(s).
Proposals should be returned in a sealed envelope marked with the Proposer's name, address
and file number BI-0096-04. The Proposals shall be received until March 24, 2005 at 12:00
noon. Proposals must be mailed or delivered in accordance with the instructions and to the
addresses set out in Section 1.2 of this RFP.
The Purchasing Division will record and time stamp receipt of the Proposal and forward it to the
Project Manager. The official time for closing of this RFP will be 12:00 noon CST per the
Purchasing Division's date/time stamp on March 24, 2005. A tbrrnal opemng of the Proposals
will not occur.
II
l'he Proposer must submit, with each copy of the Proposal, a complete set of any additional
terms and conditions that they propose to have included in a Contract negotiated with the City.
RFP responses will be opened in a manner that avoids disclosure of the contents to competing
Proposers and keeps the RFP responses secret during negotiations. All RFP responses are open
tbr public inspection after the contracts are awarded, but trade secrets and confidential
information in the RFP responses are not open for public inspection. It is specifically prov/ded;
however, that each Proposer must identify any information contained in its RFP response, which
it asserts, is either a trade secret or confidential information. Such material must be identified
conspicuously by marking each page containing such information as "confidential" or
"proprietary". If such material is not conspicuously identified, then by submitting its RFP
response, a Proposer agrees that such material shall be considered public information.
Proposals must be returned in sufficient tn-ne to be received and date/time stamped in the
Purchasing Division on or before the published Proposal date and time specified in Section 1.2,
herein. Any Proposal received after the time and date set for receipt of Proposals is late and shall
not be considered. Any proposal received late shall be returned to the Proposer unopened by
certified mail, return receipt requested.
Fhe submission and signature of a Proposal shall indicate the intention of the Proposer to adhere
to the provisions described in this RFP.
4
Proposals, which are signed tbr a partnership, shall be signed in the Proposer's name by
at least one partner or in the Proposer's name by an attorney-in-fact. If signed by an
attorney-in-fact, there should be attached to the Proposal a Power of Attorney evidencing
authority to sign Proposals, dated the same date as the Proposal, and executed in
accordance with the legal requirements of the Proposer.
Proposals, which are signed tbr a corporation, shall have the correct corporate name
thereon and a signature of thc president or a vice-president manually written below the
corporate name. Any other signature must be accompamed by a resolution of the Board
of Directors authorizing such signature to contract in the corporation's name. The title of
the office held by the person signing for the corporation shall appear below the signature
of the officer.
This Request for Proposal does not commit the City to pay any costs incurred by a Proposer for
preparation and/or submission of a Proposal or for procunng or contracting for the items to be
furnished under this RFP. All costs directly or indirectly related to preparing and responding to
this RFP, including all costs incurred for supplementary documentation, shall be borne solely by
lhe Proposer.
The Proposer agrees to bear all risks for loss, injury, or destruction of goods and materials
ordered or supplied, in anticipation of the eventual contract, which might occur prior to delivery
lo the City; and such loss, injury, or destruction shall not release the Proposer fi.om any
obligations under this RFP or any resulting contract.
I
The City of Corpus Christi Code of Ordinances, Section 2-349, as amended, requires all persons
or Proposers seeking to do business with the City to provide the Disclosure of Interest
information on the City supplied form included as Exhibit A herein. Every question must be
answered. If the question is not applicable, answer with N/A. Proposers are obligated to provide
updated information concerning the disclosure of interests, as warranted, throughout the time the
Proposals are being considered.
Proposers are expected to comply with the Affirmative Action Policy Statement of the City, on
file with the Human Relations Department, with respect to its provisions concerning Proposers.
Any complaints filed with the City alleg/ng that a Proposer is not an Equal Opportumty
Employer, due to activities arising during a previous City contract, will be referred to the Human
Relations Commission ("Commission") of the City for the purpose of review and
reco~nmendation.
Sununaries of reports by the Human Relations Administrator or the cormTnssion may be
considered in any future bid awards by the City. The City expressly reserves the right to consider
such reports in determining the best Proposal.
&ll documents submitted in response to this Request for Proposal and timely received shall
become the property of the City of Corpus Christi.
I
Proposals may be rejected if they show any alteration of words or figures, additions not called
tbr. conditional or uncalled-tbr alternate Proposals, incomplete Proposals, erasures, or
irregularities of any kind. Proposals tendered or delivered after the official time designated for
receipt of Proposal shall not be considered and will be returned to the Proposer as set out in
Section 2.1.8.
Proposers may be disqualified for any of the following reasons: · There is reason to believe that collusion exists among the Proposers;
· The Proposer is involved in any litigation against the City;
· The Proposer is m arrears on an existing contract or has defaulted on previous contracts
with the City;
· The Proposer lacks financial stability;
· The Proposer has failed to perform under previous or present contracts with the City;
· The Proposer has tailed to use the City's approved forms:
· The Proposer has failed to adhere to one or more of the provisions established in this
RFp;
· The Proposer has tailed to submit its Proposal in the format specified herein;
· The Proposer has failed to submit its Proposal on or before the deadline established
herein;
· The Proposer has failed to adhere to generally accepted ethical and professional
principles during the Proposal process; or,
· The Proposer has failed to provide a detailed cost summary in the Proposal.
Proposals shall be considered as being "irregular" if they show any admissions, alterations of
tbrm, additions or conditions not called for, unauthorized alternate Proposals, or irregularities of
any kind.
Vhe RFP Project Coordinator reserves the right to waive m~nor irregularities and mandatory
requirements, provided that all responsive Proposals failed to meet the same mandatory
requirements and the failure to do so does not otherwise materially affect the procurement. This
right shall be exercised at the sole discretion of the RFP Project Coordinator.
6
Proposals may be withdrawn by written or telegraphic notice received by the City's Purchasing
Division prior to the exact hour and date specified for receipt of Proposals. A Proposal may be
withdrawn (in person) by a Proposer or his/her authorized representative, provided his/her
:dentity is made known and he/she signed a receipt for the Proposal, but only if the withdrawal
~s made prior to the exact hour and date set for the receipt of Proposal.
A Proposer may submit an amended Proposal; however, such amended Proposal must be
received prior to the deadline, must be complete replacement of a previously submitted
Proposal, and, furthermore, such amended Proposal must be clearly identified as such in the
transmittal letter. The City will not merge, collate, or assemble Proposal materials for a
Proposer.
II
Responses to this RFP will be considered firm for ninety (90) days after the due date for receipt
of Proposals.
The Committee, as set out in Section 5.1 of this RFP, may make such investigations as
necessary to det~xmine the ability of the Proposer to adhere to the requirements specified within
the RFP. The RFP Project Coordinator will reject the Proposal of any Proposer who is not a
responsible Proposer.
II
Although the specffications in the following sections represent the City's anticipated needs, there
may be instances in which it is in the City's interest to permit exceptions to specifications and
accept alternatives.
It is extremely important that the Proposer make very clear where exceptions are taken to the
specifications and how the Proposer will provide alternatives. See Exhibit B.
Therefore, exceptions, conditions, or qualifications to the provisions of the City's
.~peciJications must be clearly identified as such, together with reasons for taking exception
and inserted in the Proposal at that point In addition, the Proposer must provide responses
on the "Exceptions'" page to address any and all items found in all bid documents that the
Proposer cannot meet or provide. If the Proposer does not make clear that an exception is
being taken, the City will assume the Proposer, in the received Proposal, is' responding to and
will meet the specifications as written.
7
Discussions may be conducted with responsible Proposers capable of being selected for award
for the purpose of clarification to assure full understanding of, and responsiveness to, the
solicitation requirements. In discussions, there shall not be disclosure of any information derived
from Proposals submitted by competing Proposers. Until award of the Contract is made by the
City, City reserves the right to reject any or all Proposals, to waive teclmicalities, to re-advertise
tbr new Proposals, or to proceed with the work in any manner as may be considered in the best
interest of the City.
Response to this RFP is the first step in a series of evaluation steps that will be conducted by the
Committee. The City may elect to conduct any or all of the following additional activities with
any Proposers who are not eliminated based on response to the RFP:
· Reference Checking
· Post submission, pre-award conferences with potential Proposers as needed.
The City reserves the right to cancel the RFP at any time. The City reserves the right to reject
any or all Proposals submitted in response to this RFP.
The contract ("Contract") will consist of a cover document containing many of the provisions
outlined in this RFP, and the Proposer's response to this RFP. Exhibit C is a sample agreement
substantially in the form which the successful proposer will be expected to execute. Failure of
Contractor to accept this obligation may result in the cancellation of any award. Any damages
accruing to the City as a result of the Contractor's fadure to contract may be recovered from the
Contractor.
Pne laws of the State of Texas will govern the Contract. All duties of both parties shall be
pertbrmed in Nueces County, Texas, where the contract will be executed. The applicable law for
legal d~spute arising out of the Contract shall be the law of the State of Texas.
This procurement in no manner obligates the Clty or any of its agencies to the eventual services
offered until confirmed by an executed written Contract approved by the City Council.
Any additional terms or conditions, which may be the subject of negotiation, will be discussed
only between the City and the qualified Proposer.
Any Contract awarded as a result of this RFP process may be terminated if sufficient
appropriations or authorizations do not exist. Such termination will be effected by sending
written notice to the Proposer. The City's dec~sion as to whether sufficient appropriations and
authorizations are available must be accepted by the Proposer as final.
Ire City Manager will recommend to the City Council that award be made to the Proposer
whose Proposal is determined by the City to be the most advantageous ("Best Value") to the
City.
IIII
The City reserves the fight to withhold final action on Proposals for a reasonable time not to
exceed ainety (90) days after the date of opening Proposals.
The award of the Contract, if an award if made, will be to the most responsible and responsive
Proposer whose Proposal meets the requirements and criteria set forth in the Request for
Proposal. The City reserves the fight to abandon, without obligation to the Proposer, any part of
the project or the entire project, at any time before the Proposer begins any work authorized by
the issuance of a fully executive Professional Services Contract by the City, as set out in Section
2.1 30 herein.
The City Council shall authorize award of the Contact to the successful Proposer and shall
designate the successful Proposer ("Contractor") as the City's Provider. The City will require
the Contractor to sign the necessary documents entering into the required Contract with the City
and to provide the necessary evidence of insurance as required under the Contract documents.
No contract for tlus project may be signed by the City without the authorization of the City
Council. No contract shall be binding on the City until it has been approved as to form by the
City Attorney or his designee, and executed by the City Manager or his designee.
The City's offimal representative, during this procurement process, is the RFP Project
Coordinator or his designee. After signing of the Contract, the City will be represented by the
Project Manager.
9
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
pricing proposal. Interim billing shall cover a period of not less than a calendar month.
In the case of any doubt or difference of opinion with regard to the items to be furnished by a
Proposer or the interpretation of the provisions of this RFP, the decisions of the City shall be
final and binding upon all parties.
The City reserves the right to negotmte a change in Contractor representatives if the assigned
rc'presentatives are not, in the opinion of the City, meeting the needs of the City adequately.
The t~m~ of the agreement shall be for one year with option to extend for up to four additional
one year periods. The contract to be awarded shall be for the provision of services as requested
and described in th/s RFP at the estimated fees submitted in the proposals for a one-year tumL,
and, if extended by the City, the second (2) through fifth (5) year of the contract. This is
considered an all-inclusive, not-to-exceed fee estimate for each of the five (5) years.
The City reserves the right, without impairing the Contract, to order changes or alterations in the
work to be performed by the Contractor under the Contract including additions and deletions to
the work. In case any orders or instructions, either oral or written, appear to the Proposer to
involve extra work for which he should receive compensation, he shall give notice of such need
to the Project Manager. However, such requests for compensation for extra required work shall
be lnailed or delivered to the Project Manager prior to beginning such work. If the Contractor
performs extra work without the prior written approval of the ProJect Manager, the Contractor
shall not be entitled to compensation for such extra work.
The Contract time and/or Contract price may only be changed by an amendment to th/s Contract
executed in writing by the City and the Contractor and approved by the City Council. A request
fk~r an extension for the Contract time or adjustment of the Contract price by the Contractor shall
only be considered if such request, with supporting data, is received by the City in writing ten
(10) working days prior to the event giving rise to the request. Failure of the Contractor to
comply with these requirements shall be considered grounds for determination by the City that
the Contractor is failing to perform the work with such diligence as will ensure its completion
under the trines specified.
10
'l'he City may terminate the Contract at any time and for any cause or no cause by written notice
of cancellation by certified mail, return receipt requested, to the Contractor. Upon receipt of
such notice, the Contractor shall immediately discontinue all services and work and the placing
~f all orders or the entering of contracts for supplies, assistance, facilities and material in
connection with the performance of the Contract and shall proceed to cancel all existing
contracts insofar as they are chargeable to this Contract between the City and the Contractor.
if the City terminates its Contract under the tbregoing paragraph, the City shall pay the
Contractor for services actually performed prior to such termination, less such payments as have
been previously made. Contractor shall not be entitled to any further compensation for work
performed by Contractor or anyone under its control or direction from date of receipt of notice of
cancellation including any and all costs related to the transferring of any files to another
Contractor or any costs related to the electronic transfer of any information including but not
limited to tape transfers, downloads, uploads, CD, etc.
Upon termination of the Contract, the Contractor shall provide the City reproduc/ble copies of all
completed work or partially completed documents prepared under the Contract, all such
documents thereinafier being owned by the City within thirty (30) days of such termination at the
Contractor's expense.
5hroughout the duration of the procurement process and Contract term, potential Proposers and
Contractors must secure from the City written approval prior to the release of any information
that pertains to the potential work or activities covered by the RFP or the subsequent Contract.
Failure to adhere to this reqmrement may result in disqualification of the Proposer's Proposal or
termination of the Contract.
Proposer must indicate through written documentation that Proposer's officers, employees, or
agents will not attempt to lobby or influence a vote or recommendation related to the Proposer's
RFP response; directly or indirectly, through any contact with the City Council members or other
City officials between the RFP submission date and approval for Award Date by the City
Council. Such behavior will be cause for rejection of the Proposer's RFP at the discretion of the
City Manager or his designee.
Section 3.0 Scope of Work
The City of Corpus Christi desires the Proposer to express an opinion on the fair presentation of
its basic fmancial statements in conformity with auditing standards generally accepted in the
United States of America and Government Auditing Standards issued by the Comptroller
11
General of the United States. The Proposer is required to perform tests of compliance and
internal control based on the audit of the basic financial statements and is also required to audit
the compliance of the City with the types of comphance requirements described in the U.S.
O{]:ice of Management and Budget (OMB) Circular A-133 Compliance Supplement that are
applicable to each of its major Federal programs The Proposer is not required to audit the
statistical section of the report.
The Proposer is required to issue an independent auditor's report on compliance and internal
controls based on an audit of the basic financial statements performed in accordance with
¢iovernment Auditing Standards, as well as an independent auditor's report on compliance with
requirements applicable to each major program and internal control over compliance in
accordance with OMB Circular A- 133.
The City seeks proposals in response to the Request from qualified firms of certified public
accountants to audit its financial statements for the fiscal year ending July 31, 2005, with the
option of auditing its financial statements for each of the four subsequent fiscal yea.rs. These
audits are to be performed in accordance with auditing standards generally accepted in the
Umted States of America, the standards applicable to financial audits contained in Government
,4 uditing Standards issued by the Comptroller General of the United States, the provisions of the
Federal Single Audit Act of 1984 (as amended in 2003) and U.S. Office of Management and
Budget (OMB) Circular A-133, Audits q[' States, Local Governments, and Non-Profit
Organtzattons.
Following the completion of the audit of the fiscal year's financial statements, the Proposer shall
issue:
A report on the fair presentation of the financial statements in conformity with the
accounting principles generally accepted in the United States of America, including an
opinion on the fair presentation of the supplementary schedule of expenditures of federal
awards in relation to the audited financial statements.
A report on compliance and internal control over financial reporting based on an audit of
the basic financial state~nents.
A report on compliance and internal control over compliance applicable to each major
federal program.
4
The auditor shall communicate in a letter to managemen! any reportable conditions found
dunng the audit. A reportable condition shall be defined as a significant deficiency in the
design or operation of the ~ntemal 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.
12
The report on compliance and internal controls shall include all material instances of
noncompliance. All nonmaterial instances of noncompliance shall be reported in a
separate management letter, which shall be referred to in the report on compliance and
internal controls.
Irregularities and Illegal Acts. The Auditor 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 City Manager who will report to the City Council.
The Auditor shall assure themselves that the City Manager is informed of each of the
following:
· The auditor's responsibility under generally accepted auditing standards
· Significant accounting policies
· Management judgments and accounting estimates
· Significant audit adjustments
· Other information in documents containing audited financial statements
· Disagreements with management
· Management consultation with other accountants
· Major issues discussed with management prior to retention
· Difficulties encountered in performing the audit
The City of Corpus Christi will send its comprehensive annual financial report to the
Government Finance Officers Association of the United States and Canada for review in
their Certificate of Achievement for Excellence in Financial Reporting program. It is
anticipated that the Proposer will be required to provide special assistance to the City of
Corpus Christi to meet the requirements of that program.
The City of Corpus Christi currently anticipates it will prepare one or more official
statements in connection with the sale of debt securities which will contain the
government-wide financial statements and the auditor's report thereon. The auditor shall
be required, if requested by the financial advisor and/or the underwriter, to issue a
"consent and citation of expertise" as the auditor and any necessary "comfort letters."
The City of Corpus Christi has determined that the United States Department of Health
and Human Services will function as the cognizant agency in accordance with the
provisions of the Single Audit Act of 1984 (as amended in 2003) and U.S_ Office of
Management and Budget (OMB) Circular A-133, Audits of States, Local Governments,
and Non-Profit Organizations.
The Schedule of Expenditures of Federal Awards and related auditor's report, as well as
the reports on compliance and ~ntemal controls, are to be issued as part of the
comprehensive annual financial report.
13
5
A list of findings and other internal control weaknesses fi.om the City of Corpus Christi's
financial statement audit is to be issued.
Difficulties may be anticipated in implementing and complying with specffic reporting
requirements recently mandated by GASB Statements No. 40, 44, and 45, and any
subsequent GASB statements. The City of Corpus Christi may require the Auditor's
assistance to comply with these reporting requirements.
Firms submitting proposals are encouraged to consider subcontracting portions of the
engagement to local audit firms or audit firms owned and controlled by socially and
economically disadvantaged individuals. If this is to be done, that fact, and the name of the
proposed subcontracting firms, must be clearly identified in the proposal. Following the award
of the audit contract, no additional subcontracting will be allowed without the express prior
written consent of the City of Corpus Christi.
The City of Corpus Christi serves an area of 504 square miles with an estimated population of
287,290. The City of Corpus Christi's fiscal year begins on August 1 and ends on July 31.
The City of Corpus Christi operates under a Council-Manager form of government and provides
such services as are authorized by its charter to advance the welfare, health, morals, comfort,
safety, and convenience of the City and its inhabitants.
The City of Corpus Christi provides the following services to its citizens:
· Public Safety (police and fire protection, building inspection, street lighting and
traffic signals, and civil defense)
· Public Services (water, wastewater collection and disposal, gas, garbage
collection and disposal, maintenance of streets, and storm water drainage)
Community Enrichment (libraries, parks, recreational facilities, marina, mtmicipal
beaches, golf courses, swimming pools, tennis courts, baseball and softball
diamonds, and senior citizen centers)
· Airport
· Preventive Health Facilities
The City of Corpus Christi had a total payroll of $121,745,107 in Fiscal Year 03-04 covering
3,317 full time employees.
14
The City of Corpus Christi is organized into 35 departments and agencies. See Exhibit D for an
organization chart. The accounting and financial reporting functions of the City of Corpus
Christi are centralized.
More detailed ~nformation on the government and its finances can be found at the City's website
located at ww,~'.ccte.,x~s.com, as well as in the following documents:
· City of Corpus Christi Adopted Budget located in Office of Management and Budget
· Official Statements located in Financial Services Department
· Comprehensive Annual Financial Report located in Financial Services Department
The City of Corpus Christi uses the following fund types and account groups in its financial
reporting:
Fund Type/Account Grouv
General fund
Special revenue funds
Debt service funds
Capital projects funds
Enterprise funds
Internal service funds
Expendable trust funds
Number of Number With
Individual Legally Adopted
Funds Annual Budgets
1 1
13 9
4 4
15 0
5 5
5 5
2 0
Discretely Presented Component Units:
Predominantly Proprietary
2 N/A
Annual budgets are legally adopted on a basis consistent with generally accepted accounting
principles for all governmental funds except the Federal/State Grant Fund, capital project funds,
community enrichment fund, infrastructure fund, the Corpus Christi Community Improvement
Corporation Fund (CCCIC), the Corpus Christi Housing Finance Corporation Fund (CCHFC),
the Corpus Chnst~ Industrial Development Corporation Fund (CC1DC), and the Corpus Christi
Health Facilities Development Corporation (CCHFDC). The Federal/State Grant Funds and the
capital projects funds adopt project-length budgets. Budgets were not adopted for the CCCIC,
('CHFC, CCIDC, and the CCHFDC. All appropriations lapse at fiscal year end.
Dur/ng the fiscal year to be audited, the City of Corpus Christi received Federal and State
awards.
15
The City participates in funding two retirement plans: (1) all City employees, except firefighters,
are provided benefits through a non-institutional, joint contributory, defined benefit plan in the
state-wide Texas Municipal Retirement System (TMRS), an agent multiple-employer public
employee retirement system; and (2) all firefighters are covered by the Fire Fighters Retirement
System of Corpus Christi, a s~ngle-employer defined benefit pension plan.
Management of the City of Corpus Christi has addressed all potential component units for which
the City may be financially accountable and, as such, have been included within the City's
financial statements. The City (the primary government) is financially accountable if it appoints
a voting majority of the organization's governing board and (1) it is able to impose its will on the
organization, or (2) there is a potential ibr the organization to provide specific financial benefits
to or burdens on the City. In doing so, management has considered other orgarfizations for which
the nature and sigluficance of their relationship with the City of Corpus Christi are such that
exclusion would cause the City of Corpus Christi's financial statements to be misleading or
incomplete.
~ae fbllowing entities have been identified as blended component units due to their closeness of
their relationship with the City of Corpus Christi: Corpus Christi Community Improvement
Corporation, Corpus Christi Housing Finance Corporation, Corpus Christi Industrial
Development Corporation, Corpus Christi Crime Control and Prevention District, Corpus Christi
Business and Job Development Corporation, Tax Increment Zone No. 1, and the North Padre
Island Development Corporation.
The Corpus Christi Community Improvement Corporation was formed to provide
financing for the rehabihtat~on of residential property in the City. The City manages the
day-to-day operations of this corporation, and the Mayor and Council Members are
directors of the corporation
The Corpus Christi Housing Finance Corporation promotes business development and
issues housing revenue bonds. The City manages the day-to-day operations of th/s
corporation, and the Mayor and Council Members are directors of the corporation.
The Corpus Christi Industrial Development Corporation promotes business
development and issues industrial development bonds. The City manages the day-to-day
operations of this corporation, and the Mayor and Council Members are directors of the
corporation.
16
The Corpus Christi Crime Control and Prevention District (District) is a public non-
profit corporation created under State law to provide funding for public safety programs.
Although the District is legally separate from the City, the District is reported as if it were
part of the primary government because it is a financing mechanism for the City to
provide public safety to the citizens of the City.
The Corpus Christi Business and Job Development Corporation (CCBJDC) is a public
non-profit corporation created by State law to provide funding of voter approved capital
improvement programs. The City Council appoints the Board and has financial
accountability Although it is legally separate from the City, CCBJDC is reported as if it
were part of the primary government because its primary purpose is to issue revenue
bonds to finance major capital improvements on behalf of the City.
Tax Increment Zone No. I (Zone No. D was established during 1984 to provide funds
for development and improvement projects within the zone's boundaries. The receipt of
post-1984 incremental property taxes from taxing umts within the boundaries of the zone
provides the funding for its projects. The Mayor and Council Members are a voting
majority of the board. The City, in addition to managing the day-to-day operations of
Zone No. 1, is directly responsible for the repayment of debt ~ssued by Zone No. 1 to the
extent of the taxes attributable to it. Zone No. 1 was dissolved effective March 1, 2004,
after the last debt payment was made.
North Padre Island Development Corporation (NPID) was created by the City pursuant
to the Tax Increment Financing Act to facilitate development of the land within the
boundaries of the tax increment zone, namely Packery Channel. NPID became effective
on November 14, 2000, and will t~rmmate on December 31, 2022. The receipt of post-
2000 incremental property taxes from taxing units with property within the boundaries of
the zone provides the funding for its projects. The Mayor and Council Members are a
voting majority of the board, and the City manages ~ts day-to-day oporat~ons.
The blended component units are included in the government fund statements as non-major
government funds.
The tbllowing entities have been identified as discretely presented component umts: the Coastal
Bend Health Facilities Development Corporation and the Corpus Christi Convention and Visitors
Bureau The component unit column in the government-wide financial statements includes the
financml data of the City's other component units for which the City Council appoints the
majority of the Board and has financial accountability.
The Coastal Bend Health Facilities Development Corporation (CBHFDC) is a public,
non-profit corporation created by the City under State law to facilitate financing and
development of health and health-related facilities. The CBHFDC is presented as a
governmental fund type
17
The Corpus Christi Convention and Visitors Bureau (V'tsitors Bureau) is a private
Texas nonprofit corporation organized for the purpose of promoting convention and
visitors' activity in the Corpus Christi Bay area. The Visitors Bureau has been presented
as a governmental fund type.
Related organizations and jointly governed organizations provide s~rvices within the City that
are administered by separate boards or comrmssions, but the City is not financially accountable,
and such organizations are therefore not component units of the City, even though the City
Council may appoint a voting majority of an organization's board members. Consequently,
financial information for the Coastal Bend Council of Governments, the Regional Transit
Authority, the Corpus Christi Housing Authority, and the Corpus Christi Regional Economic
Development Corporation are not included in the City's financial statements.
The City of Corpus Christi does not participate in joint ventures with other governments.
The financial services department is headed by Cindy O'Bri~n, Director of Financial Services,
and consists of 131 employees. The principal functions performed and the number of employees
assigned to each are as follows:
Number of
Function Employees
Finance Administration
Accounting
Treasury
Utilities Business Office
Purchasing/Inventory
4
33
15
65
14
Total
131
HARDWARE
T¥oe of Equipment
PeopleSoft Series
H.T.E. S~rver
Number
Make of Equipment
HP7410
AS400
Networked
Yes
Yes
18
SOF'I'WARE
Make
PeopleSofl, Inc.
PeopleSoff, lnc.
H.T.E., Inc.
Vendor
PeopleSoft Financials
PeopleSoft HR/Payroll
H.T E., Inc
DATABASES
Type Uses
ORACLE PeopleSoft
DB2 H.T.E.
Major Applications
General Ledger, Accounts
Payable, Asset Management,
Purchasing, Inventory &
Budget
Human Resources, Benefits
Admirdstration, e-Reeruit &
Payroll
Utility Systems:
Customer Information
Land Management
Work Orders
Financials:
Accounts Receivable
Cash Receipts
Neighborhood Services:
Building P~xmits
Business Licenses
Code Enforcement
All working papers and reports must be retained, at the au&tor's expense, for a minimum of three
(3) years, unless the firm is notified in writing by the City of Corpus Christi of the need to extend
the retention period. Thc auditor will be required to make working papers available, upon
request, to the following parties or their designees:
· U.S. Depa,tment of Health and Human Services,
· U.S. General Accounting Office (GAO),
· Parties designated by the federal or state governments or by the City of Corpus Christi as
part of an audit quality review process, and
19
· Auditors of entities of which the City of Corpus Christt is a subrecipient of grant funds.
In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow
successor auditors to review working papers relating to matters of continuing accounting
significance.
Interested Proposers who wish to review prior years' audit reports and management letters should
contact the Project Manager. The City of Corpus Christi will use its best efforts to make prior
audil reports and supporting working papers available to Proposers to aid their response to this
request for proposals.
The Financial Services' staff and responsible management personnel will be available during the
audit to assist the firm by providing information, documentation and explanations. The
preparation of confirmations will be the responsibility of the City of Corpus Christi.
The staff of the City of Corpus Christi is responsible for the preparation of all statements and
schedules.
The City of Corpus Christi will provide the auditor with reasonable work space, desks and
chairs. The auditor will also be provided with access to one telephone line, photocopying
thcilities and fax machines.
Report preparation, editing and printing shall be the responsibility of the City of Corpus Christi.
Section 4.0 Proposal Format and Organization
Tkis section provides specific instructions on format and organization of the Proposal to be
submitted by the Proposer. Each Proposer may submit only one Proposal in a totally self-
supporting format without reference to any other Proposals.
To provide for ease and uniformity and to aid in the evaluation of Proposals, it is required that all
responses comply with the sequence outlined herein. Failure to comply may result in rejection of
the response. The Proposal is to be completed in sections, which are described below. For ease
20
m handling, please submit the Proposal on 8.5" x 11" paper (larger paper is permissible for
charts or spreadsheets) and place in binders with tabs delineating each section.
The Proposer shall provide six (6) identical copies of their Proposal to the location specified in
Section 1.2 on or before the closing date and time for receipt of Proposals. Oral, teleohone,
electronic, or facsimile Prooosai will not be considered.
This section outlines the minimum requirements for preparation and presentation of a response.
The Proposer shall define the capabilities of their organization to supply and maintain the
services as requested in this RFP. The response should be specified and completed in every
detail, prepared in a simple and straightforward manner.
Proposers are expected to examine the entire RFP including all specifications, standard provision
and instructions. Failure to do so will be at the Proposer's risk. Proposers should provide their
best pricing on each type of service.
The Ixansmittal letter shall indicate the intention of the Proposer to adhere to the provision
described in the RFP without modification. The letter of transmittal MUST:
Be presented on company letterhead;
Identify the submitting organization;
Explicitly indicate acceptance of the requirements as described in the RFP
Requirements;
Acknowledge receipt of any amendments to this RFP;
Reference the City of Corpus Christi Disclosure of Interest form which has been
completed and follows the transmittal letter; and,
Identify, by name and title, and be signed by the person authorized by the
organization to obligate the organization contractually.
A table of contents, listing titles, sections, and major sub-sections shall follow the Disclosure of
Interest form referenced above. All pages shall have a unique identifier and be numbered
sequentially within each section.
· Using the format outlined below, the Proposer should provide three current client references
tbr which the same services have been provided. References should be based on the office
21
that will be providing services to the City. This information will be used to determine the
extent to which the Proposer is able to provide services to an entity the size of the City of
Corpus Christi as well as the degree of Customer Service exhibited by the Proposer.
Reference 1
Organization name:
Address:
Effective date of contract:
Description of services provided:
Reference 2
Organization name:
Address:
Effective date of contract:
Description of services provided:
Reference 3
Organization name:
Address:
Effective date of contract:
Contact and title:
Phone number:
Number of employees:
Contact and title:
Phone number:
Number of employees:
Contact and t~tle:
Phone number:
Number of employees:
Description of services provided:
22
SPECIAL NOTE: All responses to questions herein must be answered in accordance with
providing services as specified in this RFP.
Define in detail your understanding of the problem presented in Section 3.1, Nature of Services
Required, of this request for proposal and your system solution. Provide all details as reqtdred in
Section 3.1 in addition to those facts you deem necessary to evaluate your proposal.
Describe your technical plan for accomplishing required work. Include such time-related
display, graphs, and charts as necessary to show tasks, sub-tasks, milestones, and decision points
related to the Statement of Work and your plan for accomplishment. Specifically indicate:
Work program by tasks. Detail the steps to be taken in proceeding from the first
to the last task.
B
The technical factors that will be considered in Section A above, and the depth to
which each will be treated.
C. The points at which written, deliverable reports will be provided.
Provide a g~neral explanation and chart which specifies project leadership and reporting
responsibilities. If use of subcontractors is proposed, identify their placement in the primary
management structure, and provide internal management desc'nption for each subcontractor.
This section should state key personnel of the local office of your firm (and other firms, if
applicable). State the location of the office from which the work is to be done and key persormel
of that office. Provide resumes for all key personnel listed.
This section should also descTibe the range of services performed by your office, and should
include a discussion of nationwide resources available to your firm in performing the
aforementioned services and providing technical advice. Provide the number of years your firm
has provide similar services. The maximum page length for this section is two (2) pages (not
includmg resumes).
23
i- .... I III!11 ----'7 ............
Clearly describe the resources and information you expect to be provided by the City in the
course of your work and at any other time throughout the contract term. The maximum page
length for this section ~s one (1) page.
Since data not specifically requested must not be included in the foregoing proposal sections,
give any additional information considered essential to the proposal in this section. If there is no
additional information to present, state in this section, "There is no additional information we
wish to present." The maximum page length for this section is two (2) pages.
Include name, address, and telephone number of person in your organization authorized to
negotiate contract terms and render hinding decisions on contract matters.
lndicate whether a local office will be performing the work including the place of business and
telephone numbers.
'Il
This section shall contain any final remarks or elaboration which the Proposer believes is
important to a clear understanding of the proposed services and/or the Proposer's capabilities.
The maxtmum page length for this section is two (2) pages.
The pricing proposal should contain all pricing information relative to performing the audit
engagement as described in this request for proposals. The total all-inclusive maximum price to
be submitted is to contain all direct and indirect costs including all out-of-pocket expenses.
The City of Corpus Christi will not be responsible for expenses incurred in preparing and
submitting the technical proposal or the pricing proposal. Such costs should not be included in
the technical proposal.
Out-of-pocket expenses tbr firm personnel (e.g., travel, lodging and subsistence) will be
reimbursed at the rates used by the City of Corpus Christi for its employees. All estimated out-
of-pocket expenses to be reimbursed should be presented on the second page of the pricing
24
proposal in the format provided in the attachment. All expense reimbursements will be charged
against the total all-inclusive maximum price submitted by the firm.
In addition, a statement must be included in the pricing proposal stating the firm will accept
reimbursement for travel, lodging, and subsistence at the prevailing City of Corpus Christi rates
lbr its employees.
The pricing proposal should include a schedule of professional fees and expenses.
If ~t should become necessary for City of Corpus Christi 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 City of Corpus Christi and the firm. Any such additional work agreed to
between City of Corpus Christi and the firm shall be performed at the same rates set forth in the
schedule of fees and expenses included in the pricing proposal.
Section 5.0 Proposal Evaluation
The City of Corpus Christi will conduct a comprehensive, fair and impartml evaluation of all
Proposals received in response to this RFP. Each Proposal will first be analyzed to detcmdne
overall responsiveness and completeness as defined in Section 4.0 Proposal Format and
Organization and Section 5.2 Evaluation Criteria. Fatlure to comply with the instructions or to
submit an incomplete Proposal that does not satisfy Section 4.0 and 5.2 will deem a Proposal
non-responsive and may, at the discretion of the Committee, as defined in Section 5.1 below, be
ehmlnated from further consideration.
A Committee ("Committee") has been established to assist the City in the selection of a
qualified Proposer. The Committee is comprised of representatives from Financial Services and
Purchasing. The Committee will determine the responsiveness and acceptability of each
Proposal. The Committee will then engage in a detailed review of each Proposal to evaluate the
response ~n relation to the Ibm (4) major evaluation factors identified in Section 5.2.
37ne Proposal evaluation and selection process will be based upon the following major factors:
Risk, Strategic Need, Technical Solution and Cost. Some of the criteria contained within this
model may look s~milar to the following Proposed Evaluation Model. Each Proposer is to
provide detailed responses including reference to any existing "in house" procedures,
25
policies, etc. as they reference all requirements of this RFP. Evaluation Criteria will
include but not necessary he limited to the following RFP paragraghs to allow the
Committee to determine "Best Value."
Proposed Evaluation Model
Professional Auditing Services
experience and
professional; activities
of the firm
10%
Risk ; Strategic Need Technical Cost Total
Solution
20 % 20 % 20 % 40 % 100%
l~em-0n~[;ated U~idersianding (~ ~it} need'
proposed solution Expertise of
10 % staff available
: to perform
"on-site"
work
20 %
Personnel Evidence of good
qualifications organization and
10 % management practices
5 %
Utilization of local
businesses
5 %
Failure by the Proposer to provide information relative to the above criteria may deem a Proposal
non-responsive and may, at the discretion of the Committee, as defined in the paragraphs above,
be eliminated from further consideration. The Evaluation Committee reserves the fight to
conduct other evaluation and measurements of Proposer responses as may be required in order to
make an informed decision.
The Committee will determine whether the Proposal attempts to modify any mandatory Contract
provision applicable to the RFP. Proposers are cautioned [hat by submitting a Proposal, they are
agreeing to the general requirement provisions of the RFP, wkich relate to their Proposal.
The Committee will make a final recommendation to the City Manager who will place the item
on the City Council Agenda for selection and award of the Contract.
26
EXHIBIT A
CITY OF CORPUS CHRISTI
DISCLOSURE OF INTEREST
City of Corpus Christi Ordinance 17112 as amended, requires all persons or Proposers seeking to
do business with the City to provide the following information. Every question must be
answered. If the question is not applicable, answer with "N/A." See the following page for
definitions.
PROPOSER
NAME:
ADDRESS: CITY ZIP
PROPOSER is: I. Corporation ( ) 2. Partnership ( ) 3. Sole Owner ( )
4. Association ( ) 5. Other ( )_
DISCLOSURE QUESTIONS
If additional space ~s necessary, please use the reverse side of this page or attach a separate sheet.
1 State the names of each "employee" of the City of Corpus Christi having an "ownership
interest" constituting 3% or more of the ownership in the above named "Proposer."
Job Title and City Department (if known)
2. State the names of each "official" of the City of Corpus Christi having an "ownership
interest" constituting 3% or more of the ownership in the above named "Proposer."
3 State the names of each "board member" of the City of Corpus Christi having an "ownership
interest" constituting 3% or more of the ownership in the above named "Proposer."
Name:
Board, Commission, or Committee
27
4 State the names of each employee or officer of a '~consultant" lbr the City of Corpus Christi
who worked on any matter related to the subject of this contract and has an "ownership interest"
consntuting 3% or more of the ownership in the above named "Proposer."
Consultant
CERTIFICATE
I certify that all infbrmation provided is true and correct as of the date of this statement,
that I have not knowingly w~thheld d~sclosure of any information requested; and that
supplemental statements will be promptly submitted to the City of Corpus Christi, Texas as
changes occur.
Codifying
Person: Title:
Signature of
Certifying Person:
Date:
DEFINITIONS
a. "Board member." A member of any board, commission, or committee appointed by the City
Council of the City of Corpus Christi, Texas.
b. "Employee." Any person employed by the City of Corpus Christi, Texas either on a full or
part-time basis, but not as an independent contractor.
c "Proposer." Any entity operated for economic gain, whether professional, industrial or
commercial, and whether established to produce or deal with a product or service, including but
not hmited to, entities operated in the form of sole proprietorship, as a self-employed person,
partnership, corporation, joint stock company, joint venture, receivership or trust, entities which
for purposes of taxation are treated as non-profit organizations.
d. ~'Offic~al." The Mayor, members of the City Council, City Manager, Deputy City Manager,
Assistant City Managers, Department and Division Heads, and Municipal Court Judges of the
City of Corpus Christi, Texas.
c. "Ownership interest." Legal or equitable interest, whether actually or constructively held. In
a Proposer, including when such interest is held through an agent, trust, estate, or holding entity.
"Constructively held" refers to holdings or control established through voting trusts, proxies, or
special t~m~s of venture or partnership agreements"
1~ "Consultant." Any person or Proposer, such as engineers and architects, h~red by the City of
Corpus Christi for the purpose of professional consultation and recommendation.
28
EXHIBIT B
EXCEPTIONS
Proposer:
Document Exceotions
Proposer shall clearly state the exception. Proposer shall describe each item and state clearly any
phce consequences.
Important Note: The Proposer must fill this page in all submitted copies to the City. If the
Proposer has no option or exception he should indicate None on this page.
Proposer Authorized Signature
Name of Proposer' s Authorized Representative
{ Print)
Telephone Number (_ _ )
Date: / /
29
EXHIBIT C
THE STATE OF TEXAS
COUNTY OF NUECES
PROFESSIONAL AUDITING SERVICES
This Professional Auditing Services Agreement ("Agreement") is entered into by and between
the City of Corpus Christi, a municipal corporation ("City"), and
I"Consultant") effective for all purposes upon execution by the City Manager or City Manager's
designee.
WHEREAS, the City desires to have its financial statements audited for the fiscal year ended
July 31,2005.
NOW, THEREFORE, Consultant and City agree as follows:
I. SERVICES TO BE PERFORMED:
The Consultant agrees to provide professional auditing services to audit City's financial
statements for the fiscal year ending July 31, 2005. At the request of the City, Consultant shall
perform annual auditing financial statements for up to four (4) subsequent fiscal yea.rs. These
audits are to be performed in accordance with auditing standards generally accepted in the
[)nited States of America, the standards applicable to financrial audits contained in Government
,~uditing Standards issued by the Comptroller General of the United States, the provisions of the
federal Single Audit Act of 1984 (as amended in 2003) and U.S. Office of Management and
Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit
Orgamzations.
II. SCOPE OF SERVICES
Consultant shall perform the professional auditing services in accordance with the Request for
Proposals (RFP) dated attached in Exhibit "A,' Consultant's proposal
dated , attached in Exhibit "B', and Consultant's engagement letter
dated , as attached in Exhibit "C." In the event of conflict between
Consultant's proposal and the terms of this Agreement, thts Agreement shall control.
Re partms agree performance of the work shall coma-hence upon authorization to proceed by the
City. The Director of Finance is designated as the Contract Administrator responsible for all
phases of performance and operations under this Agreement, including authorizations for
payment. All notices or communications regarding this Agreement shall be directed to the
Contract Administrator.
3O
111. FEE FOR SERVICES
Total cost for all services provided by Consultant under this Agreement shall not exceed
$ unless expressly author/zed by written amendment to this Agreement.
IV. TERMINATION OF CONTRACT
The City may, at any time, with or without cause,
written notice to the Consultant at
terminate this Contract upon thirty days
V_ APPROPRIATION OF FUNDS
All parties recognize that the continuation of any contract afier the close of any fiscal year of
City, which fiscal year ends on July 31 of each year, shall be subject to appropriations and
budget approval providing for coveting such contract item as an expenditure in said budget. City
does not represent that the budget item will be actually adopted, said determination being within
the sole discretion of the City Council at the time of adoption of such budget.
VI. ASSIGNABILITY
The Consultant shall not assign, transfer, or delegate any of his obligations or duties in this
Contract to any other person without the prior written consent of the City, except for routine
duties delegated to field assistants and clerical helpers. The performance oft.his Agreement by
Consultant is the essence of this Agreement and City's right to withhold consent to such
assignment shall be within the sole discretion of the City on any grounds whatsoever.
VII. INDEPENDENT CONTRACTOR
Consultant shall perform all professional services as an independent contractor and shall furnish
such services in its own manner and method, and under no circumstances or conditions shall an
agent, servant, or employee of the Consultant be considered an employee of the City.
VIII. SUBCONTRACTORS
Consultant may use subcontractors in connection with the work performed under this
Agreement. When using subcontractors, however, Consultant must obtain prior written approval
from the City. In using subcontractors, Consultant agrees to be responsible for all their acts and
omissions to the same extent as if the subcontractor and its employees were employees of the
Consultant. All requirements set forth as part of this Agreement shall be applicable to all
subcontractors and their employees to the same extent as if the Consultant and its employees had
performed the services.
31
IX. VENUE AND APPLICABLE LAW
This Agreement shall he subject to all Federal, State ~nd local laws. All duties of the parties
shall be performed in the City of Corpus Christi, Texas. The applicable law for any legal
disputes arising out of this Agreement shall be the law of Texas and such forum and venue for
such disputes shall be the appropriate district, county, or justice court in and for Nueces County,
Texas.
X. WAIVER
No waiver of any breach of any term, or condition of this Agreement, shall be construed to waive
any subsequent breach of the same.
XI. DISCLOSURE OF INTERESTS
Consultant further agrees, in compliance with City of Corpus Christi Ordinance No. 17112, to
complete, as part of this Contract, the Disclosure of Interest form provided to Consultant.
Xll. INDEMNIFICATION
Consultant agrees to indemnify and save hanxfiess City, its agents, servants, and employees fi-om
any and all liabilities, losses, damages, or expenses, including a~tomey's fees resulting fi-om
Consultant's negligence or willful acts or omissions whtle in performance of th~s Agreement.
XIll. INSURANCE
Consultant agrees to provide insurance in accordance with Exhibit "D."
XIV. NO WAIVER.
No waiver of any covenant or condition, or the breach of any covenant or condition of this
Agreement, constitutes a waiver o£ any subsequent breach of the covenant or condition of the
Agreement.
XV. AMENDMENTS OR MODIFICATIONS.
No amendments or modifications to this Agreement may be made, nor any provision waived,
unless in writing signed by a person duly authorized to sign agreements on behalf of each party
XVI. RELATIONSItlP OF PARTIES.
In performing this Agreement, both the City and Consultant shall act in an individual capacity,
and not as agents, representatives, employees, employers, partners, joint-venturers, or associates
of' one another. The employees or agents of either party may not be, nor be construed to be, the
employees or agents of the other party for any purpose.
32
XVIi. CAPTIONS.
The captions in this Agreement are for convenience only and are not a part of tiffs Agreement.
The captions do not in any way limit or amplify the t~m~s and provisions of this Agreement.
XVIII. SEVERABILITY.
If for any reason, any section, paragraph, subdivision, clause, provision, phrase or word of this
Agreement or the application of this Agreement to any person or circumstance is, to any extent,
held illegal, invalid, or unenforceable under present or future law or by a final judgment of a
court of competent jurisdiction, then the remainder of this Agreement, or the application of the
term or provision to persons or c~rcumstances other than those as to which it is held illegal,
invalid, or unenforceable, will not be affected by the law or judgrnent, for it is the definite intent
of the parties to this Agreement that every section, paragraph, subdivision, clause, provision,
phrase, or word of this Agreement be given full force and effect for its purpose. To the extent
that any clause or provision is held illegal, invalid, or unenforceable under present or future law
effective during the term of this Agreement, then the remainder of this Agreement is not affected
by the law, and in lieu of any illegal, invalid, or unenforceable clause or provision, a clause or
provision, as similar in terms to the illegal, invalid, or unenforceable clause or provision as may
be possible and be legal, valid, and enforceable, will be added to this Agreement automatically.
IXX. NOTICES.
Notices provided shall be in writing and delivered to:
On behalf of the City:
City of Corpus Christi
Director of Financial Services
P.O. Box 9277
Corpus Christi, TX 78469-9277
On behalf of the
Consultant:
XX SOLE AGREEMENT.
'Fhis Agreement constitutes the sole agreement between the City and Consultant. Any prior
agreements, promises, negotiations, or representations, verbal or otherwise, not expressly stated
in this Agreement, are of no force and effect.
33
EXECUTED IN DUPLICATE, each of which shall be considered an original, this day of
,2005.
ATTEST:
CITY OF CORPUS CHRISTI
Armando Chapa
City' Secretary
APPROVED THIS DAY OF
By:
Assistant City Attorney
For City Attorney
George K. Noe
City Manager
,2005
CONSULTANT:
By:
Name:
Title:
Date:
Attachments: Exhibit "A," City of Corpus Christi Request for Proposal
Exhibit "B," __ ..... Proposal
Exhibit "C," __ , Engagement Letter
ExhtNt "D," Insurance Requirements
34
INSURANCE REQUIREMENTS
AUDITOR'S INSURANCE
A Auditor must not commence work under this agreement until all insurance required
herein have been obtained and the City has approved such insurance. Auditor must
not allow any subcontractor to commence work until all similar insurance required
of the subcontractor has been obtained.
Auditor must furnish to the City's Risk Manager, two (2) copies of Certificates of
Insurance, showing the following m~nimum coverage by insurance company(s)
acceptable to the City's Risk Manager. The City must be named as an additional insured
for the General and Automobile liability policies and a blanket waiver of subrogation is
required on all applicable policies.
TYPE OF INSURANCE
MINIMUM INSURANCE COVERAGE
30-Day written notice of non-renewal,
termination or material change and 10 day
written notice of cancellation is required on all
certificates
COMMERCIAL GENERAL LIABILITY
including:
1. Commerctal Form
2 Prernises- Operations
3. Products/Completed Operations Hazard
4. Contractual Liability
Bodily Injury and Property Damage
Per occurrence aggregate
$1,000,000 COMBINED SINGLE LIMIT
AUTOMOBILE LIABILITY $1,000,000 COMBINED SINGLE LIMIT
1 OWNED, NON-OWNED AND RENTED
WORKERS COMPENSATION
EMPLOYERS LIABILITY
PROFESSIONAL LIABILITY including:
Coverage provided must cover officers, directors,
employees and agents
1. ERRORS and OMISSIONS
Which complies with the Texas Workers'
Compensation Act and Section Il of this exhibit
$500,000/$500,000/$500,000
$1,000,000 COMBINED SINGLE LIMIT
35
( In the event of accidents of any kind, Auditor must furnish the Risk Manager with copies
of all reports of such accidents within 10 days of any accident.
11
ADDITIONAL REQUIREMENTS
Auditor must obtain workers' compensation coverage through a licensed insurance
company obtained in accordance with Texas law. The contract for coverage must be
written on a policy and endorsements approved by the Texas Department of Insurance.
The coverage provided must be in amounts sufficient to assure that all workers'
compensation obligation incurred by the Auditor will be promptly met.
B. Certificate of Insurance:
The City of Corpus Christi must be named as an additional insured on the
General Liability policies and a blanket waiver of subrogation is required on all
applicable policies.
If your insurance company uses the standard ACORD form, the cancellation
clause (bottom right) must be amended by adding the wording "changed or"
between "be" and "canceled", and deleting the words, "endeavor to", and deleting
the wording after "left". In the alternative, verification of endorsement to the
apphcable policy is acceptable.
The name of the project must be listed under "Description of Operations"
At a minimum, a 30-day written notice of non-renewal termination or material
change and a 10-day written notice of cancellation is required.
If the Certificate of Insurance does not show on its face the existence of the coverage
required by items 1.B (1)-(4), an authorized representative of the insurance company
must include a letter specifically stating whether items 1.B. (1)-(4) are included or
exclude
36
Municipal Court Judicial
ttonomble Rudolfo Tamez. 886-252(I
Assistant to the City Manager
JoAnn Hooks, 880-3003
EXHIBIT D
CITIZENS
City Organizational Chart
CITY COUNCIL
880-3105
CITY MANAGER
George K. "Skip" Noe 880-3222
Asslatant to the City Manager
Yvonnc Haag, 880-3234
Libraries
H~rh Canales, 880-7070
Municipal Court Administrative
Rene Mtmdiola, 886-2515
City Se~remry
Armando Chapa 850-3105
Aviation
Dave Hamrick, 289-0171
City Attorney
Mary Kay Fischer, 880-3360
Fire
J. J. Adame, 880-3932
Police
Pete Alvarez, 886-2603
Public Information
Cheryl Sow~rd, 880-3211
ASSISTANT CITY MANAGER
Ron Massey, 880 3218
ASSISTANT CITY MANAGER
Margie C. Rose, 880-3232
ASSISTANT CITY MANAGER
Oscar Marfinez, 826-3897
Engineering
'Angel Escobar, 980-3506
Klm McGuire, 8802,060
Gas
Debbie Marroquin. 885-6024
Storm Water
Vale'fie Gray, 857-188I
StreetN & Solid Waate
Jeff Kaplan. 857-1970
Wastewater
Foster Crowel], 857-1800
Water
Ed Garafia. 857-1881
Convention Facilities
SMG Marc Soils, 8264171
Development Services
Barbara Bailey Holly, 826-3560
Health
Annette Rodriquez, Acting 851-7203
Human Relations
kconid~ B~zar. 880-3196
Museum
Rick Stryker. 826~660
Neighborhood Services
Jon Wagner, Acting 880-3017
Code Enforcement
Yvonne Haag, 880-3234
Parks & Recrention
Sally Gavlik, 826-346d
Budget
Vacank 880-3235
Economic Development
Oscar Marfinez, 826-3897
E-Government
Susan Cable, 8264091
Financial Servlcea
Cindy O'Br/en, 880-3613
General Services
Jim Da.As. 880-1909
Human Re~ource~
Cynthia Gm-cia. 880-3315
Information Services
Ogilv/e Gerike, 880-3740
37
CITY OF CORPUS CHRISTI. TEXAS
BI-0081
PROFESSIONAL AUDITING SERVICES
PROPOSAL
(;oilier, Johnson & Woods P.C.
555 N. Carancahua, Suite 1000
Corpus Christi, TX 78478-0052
F. John Shepherd
(361) 884-9347
March 24, 2005
('oilier, Johnson
( crl[licd Public Accountanl~
555 N Carancahua- ~mtc 1!)((!
March 24, 2005
Michael Barrera,
Procurement & General Services Manager
City of Corpus Christi
P.O. Box 9277
Corpus Christi, TX 78469-9277
Dear Mr. Barrera:
Collier, Johnson & Woods P.C. is pleased to present our proposal for
auditing services for the City of Corpus Christi, Texas (City) for the year ended
July 31, 2005, with the option of auditing its financial statements for four
subsequent years, and our qualifications to perform those services.
We received Amendment No. I to the RFP and a copy of the signed
amendment follows this transmittal letter.
We accept the Conditions Governing the Procurement in Section 2 of the
Request for Proposal (RFP) and the Scope of Work in Section 3 of the RFP
including Amendment No. I to the RFP.
The completed City of Corpus Christi Disclosure of Interest statement
follows this transmittal letter.
We have attached exceptions to the RFP and they follow this transmittal
letter.
The Collier, Johnson & Woods, P.C. representative is F. Jol'm Shepherd,
our address is 555 N Carancahua, Suite 1000, Corpus Christi, Texas 78478, our
phone number is (361) 884-9347. Collier, Johnson & Woods, P.C. is a
professional corporation and a resolution of the Board of Directors authorizing Mr.
Shepherd to contract in the corporation's name follows this transmittal letter.
City of Corpus Christi
March 24, 2005
Page -24
Collier, 3olmson & Woods, P.C. is prepared to provide copies of
Certificates of Insurance showing mimmum insurance coverage outlined in the
City's "Insurance Requirements" and nmning the City as an additional insured for
general and automobile liability and a blanket waiver of subrogation if selected as
auditors.
Collier, Johnson & Woods, P.C. shareholders and employees (we have no
agents) will not attempt to lobby or influence a vote or recommendation related to
this RFP response; directly or indirectly, through any contact with the City Council
members or other City official between March 24, 2005 (RFP submission date) and
approval for Award Date by the City Council.
The following pages contain more information regarding our Firm and our
proposed audit plan for the City of Corpus Christi. Please call F. John Shepherd if
you have any questions or/fi can help you in a_ny way.
Very truly yours,
COLLIER, JOHNSON & WOODS
A. Professioni~
F~ Jo~h~herd, TreaSurer
REQUEST FOR PROPOSAL AMENDMENT
CITY OF CORPUS CHRISTI
PURCHASING DIVISION
Request for Proposal No. BI-0081-05 Amendment No. l
Date March 14, 2005
In relbrence to the above request for proposal for Professional Auditing Services, the following responses to
questions are submitted:
I Question: Are there any professional disagreements with the current auditor concerning the application of
accounting principles or financial statement presentation'?
Response: No.
2 Question: How many audit adjustments did the CPA firm propose during the July 31, 2004 audit
engagement?
Response: None.
Question: How many years has the current CPA firm been engaged as the City's external auditor?
Response: lO years
4~ Question: What were the audit fees for the July 31, 2004 audit engagement?
Response: $130,000
5. Question: On what date, approximately, will the books be closed and City staffready for the CPA firm
to begin audit fieldwork procedures?
Response: Augu.~l 19, 2005 is the date thai Accounts Payable will be closed for fiscal year 2004-
2005. At that point, the City's accountants begin closing each of the funds, and the external auditors
can begin audit fieldwork.
2
Request for Proposal No. BI-0081-05 Amendment No.
Date March 14, 2005
6. Question: The RFP specifies that the CAFR for the year-end July 31, 2005 is due November 30, 2005,
however it was noted that the end of fieldwork date for the July 31, 2004 audit engagement was December
23, 2004 What changes have occurred to allow for the narrower time frame in the issuing of the July 31,
2005 financial statement report?
Response: The City staff is more experienced in closing funds, and they know what is expected of
them during year end. Additionally staff has been "cleaning" up the funds lhroughout FY 04-05
which should expedite the closing of the funds at year end.
7. Question: On what date was the July 3 I, 2004 financial report presented to the City Council?
Response: The financial report was delivered to the City Council members in the City Manager
packet on January 7, 2005.
"ALL OTHER TERMS AND CONDITIONS REMAIN THE SAME"
Procurement & General Services Manager
ACKNOWLEDGED BY:
FIRM N3tME
One copy must be returned to the Purchasing Division prior to the RFP closing or with your sealed
proposal.
EXBIBIT A
CITY OF CORPUS CHRISTI
DISCLOSURE OF INTEREST
City of Corpus Christi Ordinance 17112 as mended, requires all persons or Proposer'a seeking to
do business with the City to provide the following information. Every question must be
answered. If the question is not applicable, answer with "N/A." See the following page for
definitions.
PROPOSER
NAME:
ADDRESS:
Collier. Johnson &Woods& P.C.
555 N. Carancahua
Suite 1000 CITY Corpus Christi, Texas
ZIP 70~7B-0052
PROPOSER is: 1. Corporation (x) 2. Partnership ( ) 3. SoleOw'ner ( )
4. Association ( ) 5. Other ( )
DISCLOSURE QUESTIONS
If additional zpace iz ncczss."..W, please use the reverse side of this page or attach a separate sheet.
I. State the names of each ~employee" of the C~ty ot Corpus Cia- stt having an own rship
interest" constituting 3% or more of the ownership in the above named "Proposer."
Job Title and City Department (if known)
NONE
2. State the names of each "official" of the City of Corpus Christi having an "ownership
interest" constituting 3% or more of the ownership in the above named "Proposer."
State the names of each "board member" of the City of Corpus Christi having an "ownership
interesl" constituting 3% or more of the ownership in the above named "Proposer."
Bom& Commission, or Committee
NONE
27
4. State the names of each employee or officer of a "consultant" for the City of Corpus Christi
who worked on any matter related to the subject of this contract and has an "ownership interemt"
constituting 3% or more of the ownership in the above named "Proposer."
Consultant
NONE
CERTIFICATE
I certify that all information provided is true and correct as of the date of this statement,
that I have not knowingly withheld disclosure of any information requested; and that
supplemental statements will be promptly submitted to the City of Corpus Christi, Texas as
changes occur.
Certify/ng
Person: F. John Shepherd Title: Treasurer
Signature of ~ ~ J~ tO
a. "Board member." A member of any board, commission, or committee appointed by the City
Council of the City of Corpus Christi, Texas.
b. "Employee." Any person employed by the City of Corpus Ctmsti, Texas either on a full or
part-time basis, but not as an independent contractor.
c. ~'Proposer.' Amy entity operated for economic gain, whether professional, industrial or
commercial, and whether established to produce or deal with a product or serv/ce, including but
not limited to, entittes operated in the form of sole proprietorship, as a self-employed person,
partnership, corporation, joint stock company, joint venture, receivership or trust, ~ntities which
for purposes of taxation are treated as non-profit organizations.
d. "Official." The Mayor, members of the City Council, City Manager, Deputy City Manager,
Assistant City Managers, Department and Division Heads, and Municipal Court Judges oft. he
City of Corpus Christi, Texas.
e. "Ownership interest." Legal or equitable interest, whether actually or constructively held. In
a Proposer, including when such interest is held through an agent, trust, estate, or holding entity.
"Constructively held" refers to holdings or control established through voting trusts, proxies, or
special terms of venture or partnership agreements."
[ "Consultant_" Any person or Proposer, such as engineers and architects, hired by the City of
Corpus Christi for the purpose of professional consultation and recommendation.
28
EXHIBIT B
EXCEPTIONS
Proposer: Gollier~ Johnnon & Woods~ P.C.
Doc~ment Exceptions
Proposer shall clearly state the exception. Proposer shall describe each item and state clearly any
price consequences.
Im~ol-tlmt 1No~: The Proposer must fill this page in all submitted copies to the City. If the
Pmpos~ ha~ no option or exception he should indicate None on this page.
SEE ATTACMED SCHEDULE
OF EXCEPTIONS
(Print) F. John Shepherd
Telephone Number (,~6_1_) §8~_-_93_qJ_Date:
03 04 / 2005
29
Schedule of Excel~tions
Section 2.1.23 Contract
Exhibit C is a sample agreement substantially in the form which successful
proposer will be expected to execute. Professional standards require the auditor to
establish an understanding with the auditee regarding services to be performed_
The understanding should include the objective of the engagement, management' s
responsibilities, the auditor's responsibilities and the limitations of the
engagement. In the past we have had an engagement letter signed by the City
detailing these understandings. Attached is a copy of the 2004 engagement letter.
Although the RFP covers some of the understanding, there are other areas we
would include in the contract~ The 2004 engagement is the basically the same
engagement letter used for the audit engagement for the past ten years. We see no
problems incorporating the provisions of both documents in a final agreement.
Section 2.1.34 Term
The estimated fees submitted in the proposals are for a one-year term, and, if
extended by the City, the second (2) through fifth (5) year of the contract. This is
considered an all-inclusive, not-to-exceed fee estimate for each of the five (5)
years. Because we can not predict inflation, changes in accounting standards,
changes in audit requirements or changes in the City's operations, including the
numar and amounts of tederal grants, over flus extendea penocl ol tune we are not
able to comrmt to an all-inclusive, not-to-exceed fee estimate for four (4) additional
years. Our estimated fees for the option period are based on 3 % inflation and the
exact same operations and grants as 2004. As in the past ten years, Collier,
Johnson & Woods, P.C. prepares a new engagement letter including fees which
have been agreed to and approved by the City Council. We see no problems in
negotiating the scope of worlc and fee each yem-. Our history with the Cit3' has
shown we are fair in our charges and the only significant increases have been when
there have been changes in accounting standards.
Section 3.0 Scope of Work
In 2004, the American Bank Center Arena Fund was audited by other auditors, and
Collier, Johnson & Woods, P.C. based our opinion on the reports of the other
auditors. This proposal has been prepared assuming the American Bank Center
Arena Fund is audited by other auditors
(Continued)
Schedule of Exceptions (Continued)
Section 3.4 Special Considerations
If we are requested by the City's financial advisor ancot underwriter, to issue
~consent and citation of expertise" as the auditor and any necessary "comfort
letters' we will do what is required. However, because we do not know the scope
of the request, it is not included m our fee estimate and it will be billed at our
standard hourly rates We have provided this information in the past and see no
problems in the future.
Section 3.6.5.2 Discretely Presented Component Units
The scope of our audit includes the Coastal Bend Health Facilities Development
Corporation but does not include the Corpus Christi Convention and Visitors
Bureau. The Corpus Christi Convention and Visitors Bureau has been audited by
other auditors in the past and our audit report refers to the other auditors. We have
assumed that this will be the same situation in the future.
RESOLUTION OF BOARD OF DIRECTORS
The board of directors of Collier, Johnson & Woods, P.C. authorizes F. John
Shepherd to negotiate and contract in the name of the corporation. This twenty-third
day of March 2005.
(Jo_fin E. Porche, President
rigid VLK2ook, Secretary
CITY OF CORPUS CHRISTI, TEXAS
PROPOSAL FOR PROFESSIONAL AUDITING SERVICES
TABLE OF CONTENTS
PAGE
Information Requested
A References ................................................................................................... 1
General Questionnaire
B Program- System Concept and Solution ............................................................ 2-4
C. Program - Technical Plan .......................................................................... 5-7
D. Project Management Structure ......................................................................... 8
E Firm Background, Personnel, and Prior Experience ............................................ 9-10
Y~
Understanding of the City's Commitment to Plan Preparation .................................... 1
Other Pertinent Informatiov~
H Authorized Negotiator ............................................................................ 13
I Local Participation .................................................................................... 14
J Concluding Remarks .......................................................................... 15-16
K Cost of Services .................................................................................. 17
L Out-of-pocket Expenses ............................................................................... 18
M. Rates by Partner. Specialist, Supervisor and Staff ................................................. 19
N. Additional Professional Services ...................................................................... 20
O Peer Review ......................................................................................... 21
P. Personnel Profiles .................................................................................... 22-24
Q 2004 Engagement Letter ............................................................................ 25-32
Reference 1
Orgmizafion name:
Corpus Christi Independent
School D~strict
Address'.
801 Leopard Street
Cnrpus Christi. Texa~ 78401
Effective date of contract:
1999-2004
Description of services provided:
ludl~ of CAFR, Single Audit
Reference 2
OrgamZation name:
Port of Corpus Christi Authority
Address:
222 Power Street
Corpus Christi, Tel~as 78401
Effective date of contract:
1995-2004
DesCription of services provided:
Audit of CAFR, Single Audit
Reference 3
Organization name:
Nueee8 County Hospital District
Address:
555 N. Carancahua, Ste. 950
Corpu~ Christi, Texas 78478
Effective date of contract:
1997-2004
Descnption of services provided:
Audit of financial statements
Contact and title:
Donna Hohn, Comptroller
Phone number:
361-886-9168
Number of employees:
5,350
Contact and title:
Danny Hodgkins, Director of Finance
Phone number:
361-885-5633
Number of employees:
158
Contact and title:
Jesse Hale, Comptroller
Phone number:
361-808-3304
Number of emp|oyees:
34
SYSTEM CONCEPT AND SOLUTION
Scope of Work
We will audit the financial statements of the governmental activities, the business-type
activities, each major fund and the aggregate remaining fund information of the City of Corpus
Christi, Texas (City) as of and for the year ended July 31, 2004, which collectively comprise the
City's basic financial statements. Our audit will be performed in accordance with auditing standards
generally accepted in the United States of America, the requirements contained in the Government
Auditing Standards issued by the Comptroller General of the United States; the Single Audit Act as
amended in 1996; and the provisions of OMB Circular A-133, "Audits of States, Local Governments
and Non Profit Organizations". We understand that the financial statements will be presented in
accordance with the financial reporting model described in GASB Statement No. 34.
The document you submit to us will include Management's Discussion and Analysis and
Other Required Supplementary Information. We will apply limited procedures to these documents
which will consist principally of inquiries of management regarding the methods of measurements and
presentation. We will not express an opimon on these documents.
The document you submit to us will include statistical information that will not be subject to
the auditing procedures applied in our audit of the basic financial statements, and for which our
auditor's report will disclaim an opinion
Auditing procedures used by us will:
extend to the combining financial statements and supporting schedules. We will
express an opinion on whether such information is fairly presented ia all material
respects in relation to the basic financial statements taken as a whole.
include tests of compliance with laws, regulations, contracts and grants applicable to
the City of Corpus Christi in accordance with auditing standards generally accepted in
the United States of America and Government Auditing Standards and evaluation and
testing of the City's internal control over financial reporting in accordance with
auditing standards generally accepted in the United States of America and
Governmental Auditing Standards. The results of our procedures will be summarized
in a report in accordance with those standards. Any reportable conditions or reportable
conditions considered to be material weaknesses in internal control over financial
reporting will be included in this report.
2
include tests of compliance with the types of compliance requirements described in the
U.S. Office of Management and Budget (OMB) Circular A-133 Compliance
Supplement applicable to each major program and evaluation and testing of the City's
internal control over compliance in accordance with OMB Circular A-133. The results
of our evaluation and testing will be summarized in a report in accordance with those
standards. Any reportable conditions or reportable conditions considered to be
material weaknesses in internal control over compliance will be included in this report.
This report will also include an opinion on the Schedule of Expenditure of Federal
Awards in relation to the basic financial statements take as a whole.
Each of the above independem auditor's reports will be addressed to the Mayor and City
Council. In the event we issue an opinion that is less than unqualified, we will communicate to the
Mayor and City Council our reasons for such in writing.
During the audit, our experienced auditors will be alert for constructive ways in which the City
can improve controls or accounting procedures. We will inform the appropriate personnel of our
suggestions as the work progresses and summarize all significant suggestions in a management letter
addressed to the Mayor and City Council Our experience has indicated that management letters play
a significant role in implementing improvements and in keeping the Mayor, City Council and staff
informed of potential problems If conditions exist which would require us to expand the scope of our
audit, we would advise management promptly. If we become aware of material errors and fraud, we
would make an Uamediate and written report to management.
We understand that the City intends to sell bonds from time to time and this may require the
audited financial statements and Auditors opimon to be included in the Official Statements and that
certifications may be requested as part of these bond sales. We provide these services to many of our
governmental clients and will work w~th the City to facilitate these requirements in the most efficient
and economical manner These services are not included in the scope of the services provided in the
annual fee, but will be billed at our standard hourly rates based on the scope of the procedures and
certifications requested.
Moreover, we are available year-round for consultation on financial, operating, budgeting and
reporting matters as requested. We would consider occasional questions regarding appropriate
bookkeeping or accounting procedures to be part of our audit engagement. We anticipate that the
implementation of GASB Statement No 40 and 44 will be part of this engagement. GASB Statement
No. 45, as we discussed in the Management Letter, dated December 23, 2004, has significant
implication to the City and may require significant time to determine the implications and implement.
Consultation on specific accounting problems or financial and operating matters would be considered
separate engagements and billed at our standard hourly rates based on the scope of work required.
Options on Future Years
If the City exercises its option to extend our contract, the procedures and reports described
above will also apply for the years ended July 31, 2006, 2007, 2008 and 2009, unless there are
changes in standards or other requirements.
4
TECHNICAL PLAN
· Planning
Our audit planning involves a review of the City's operations, including its primary activities,
programs, and services. We will review the City's organi?ation and personnel structure to begin our
assessment of the control environment. Minutes, contracts, and laws will be reviewed to determine
their impact on the audit.
As soon as possible after selection as auditors, we will meet with the Director of Financial
Services and her management group to review recommendations concerning CAFR preparation we
included in the Management Letter dated December 23, 2004. Additionally, we will assist in
developing a work schedule that will allow completion of the CAFR by the November 30 deadline
Working with the management group, we will develop a continuing education course for City
staff. We have entered into an agreement with the Texas State Board of Public Accountancy to meet
the requirements of CPE rules covering maintenance of attendance records, retention of program
outlines, qualification of instructors, program content, physical facilities and length of class hours.
This program will qualify for CPE hours. In 2004, we developed an 8 hour course and found that it
enhanced the quality and efficiency of the CAFR process.
· Evaluation of Accounting Controls
Our audit will study and evaluate the internal accounting controls and report on them as a part
.:f x~ .~:,anc:.:.2 audits, as rcquirzd by Gcve,,-r. ment Auditing Standc.-fis. Th~ zmdy and e-,'z2xzt'.~z, cf
internal controls establish a basis for determining the extent of auditing procedures to be used in
forming an opinion on the Financial statements. We will concentrate on those accounting and
administrative controls that have a direct bearing on the reliability of the financial statements. Each
audit area will be assessed to determine control risk and whether audit testwork will be substantive in
nature or if tests of controls will be performed_ Considering the influence of the environment and the
nature of the items comprising an account balance, we will then assess inherent risk and the possible
occurrence of material misstatements. We use a variety of checklists and questionnaires which have
proven to be efficient and practical tools in the audit process.
· Testing of Controls
If accounting controls can be relied upon and substantive tests can be reduced, we will perform
tests to ascertain that the controls actually function. The audit areas where reliance on accounting
controls is anticipated include:
'Revenues, Receivables, and Receipts
Expenditures for Goods and Services and Accounts Payable
Payroll and Related Liabilities
Property, Equipment, and Capital Expenditures
Debt and Obligations under Capital Leases
· Analytical Procedures
We will apply preliminary analytical procedures to the financial information to determine areas
of audit concern where additional procedures may be necessary and final analytical procedures to
assist in assessing the propriety of conclusions reached in the overall financial statement presentation.
Analytical procedures focus on overall relationships within the financial statements and comparisons
with budgets and prior year results.
· Audit Sampling
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the basic financial statements. Since it is not practicable to examine every transaction, audit
sampling comprises an important part of an efficient audit. Sampling allows us to test a reduced
number of transactions and project the results to the entire balance or class of transactions. We will
use sampling in the following types of audit tests:
Substantive Tests of Balances - Confirmation of Receivables
Substantive Tests of Transactions - Vouching of Expenditures
Compliance Tests of Controls - Test of Performance of Control Procedures
Single Audit Test of Compliance with Laws and Regulations - Test of Procurement
Procedures
Based on the level of control risk, sample sizes for tests of controls will range from 25 to 60.
Sample sizes for substantive tests of transactions or balances are based on assessment of appropriate
level of tolerable misstatement, risk of material misstatement, other procedure risk and the estimated
population balance after removal of items to be examined 100%.
· Use of Computers
Every member of the audit team has a laptop computer available for use at the client's location.
Employees are encouraged to use these computers to efficiently plan and perform audits. We are
constantly upgrading our software and hardware to keep up with new improvements in technology.
We use GoSystem Audit software, Microsoft Excel and Word. We use computers to perform
analytical review, generate random number samples for statistical sampling, process large spreadsheet
calculations, document internal control procedures and produce trial balances, lead sheets and financial
statements. We use downloads directly from the City's accounting system to efficiently accumulate
necessary information.
· Final Procedures
At year end, we will confirm cash balances, receivables, selected revenues, investments and
debt. When year end accounting is completed, we will finalize our audit procedures. We will request
and evaluate responses from legal counsel to audit inquiries. We will review commitments and
contingencies, as well as subsequent events that may have a material impact on the City's financial
statements. A representation letter, confirming financial and compliance information provided to us is
complete and accurate, from the City Manager, Director of Financial Services and Controller will be
required to complete the audit.
6
· Report
We will review the prepared draft of the CAFR and make recommendations to management in
a management letter. The final signed report should be delivered before November 30.
Work Program by Task
TASK
Evaluation of Controls
Test of Cona-ols
CordTan~tions of Cash, lnvesWn~nts,
Receivables, Grants, Payables, Debt
Testwork and Audit Procedures Relat~g to:
Cash
Investments
Receivables
Capital Assets
Older Assets
Payables
Accrued Expenses
Debt
Ot~gr I ,labilities
SingJe Audit Procedures
Review of Closing F ok]ers
Search for Unrecorded Liabilities
Review of CAFR Statements and Notes,
Tie M to Audited Balances
Review MD&A
F~aal Audit Procedures
Deliver Auditor's Reports
Deliver Draft Management Letter
Deliver Management Letter
SCF[EDULE
Pre-Year End
Pre-Year End
Early August
Early August
As Completed by
As Completed by City
As Completed by City
AS Completed by City
As Completed by City
AS Completed by City
As Completed by City
As Completed by City
A~ Completed hv (?it3,
When Schedule of Federal Expenditm'es
is Completed
As Completed by C~
After Closing of Accotmts Payable
Through End of Field Work
Need Two Weeks from C~y's Completion
of CAFR
Need Two Days from City's Completion
of MD&A
While Reviewn~g CAFR
At Completion ofFir~al CAFR
Two Weeks after Fhaal CAFR
Alier Review w~h Management and Receipt
of City's Responses
PROJECT MANAGEMENT STRUCTURE
We anticipate the following personnel will comprise your project leadership:
F. John Shepherd, CPA-Engagement Shareholder
The engagement shareholder is responsible for all aspects of the audit. He will direct and review
fieldwork and report preparation. John has been the engagement shareholder for the past ten years.
Brigid W. Cook, CPA-Concurring Reviewer
The concurring reviewer provides additional technical expertise to the engagement. She resolves any
technical disagreements and assists the engagement shareholder in completing the audit. Brigid has
been the concurring reviewer for the past ten years.
Timothy McKay, CPA, CITP-Audit Manager
The audit manager is responsible for planning, directing and conducting substantial portions of the
fieldwork, as well as report preparation. Tim has been the audit manager on the job for the past five
years and was a senior or staff on the engagement for four years before advancing to the manager
position.
Each of the above are in full compliance with the professional education requixements in the
GAO's Government Auditing Standards. A list of relevant continuing professional education is
included on their resumes The educational background and professional licenses held by each are
also included on their resumes.
involvement by management facilitate atlainmg our staffing goals. Our experience has clearly
demonstrated the mutual benefits derived from using the same personnel each year for your audit. We
believe familiarity with your operations results in efficiently performed work, Jimited disruption of
your operations and equitable fees. We plan to staff the City's audit with the same personnel each
year to the maximum extent possible as we have in the past.
Reporting Responsibilities
John Shepherd aod Tim McKay will be the primary contacts for the project manager. They
will work with the project manager to determine scheduling and organization of the engagement and
be available to answer questions and deal with issues as they may arise_
Collier, Johnson & Woods, P.C. has the necessary resources in-house and thus no
subcontractor will be used on the engagement.
FIRM BACKGROUND, PERSONNEL, AND PRIOR EXPERIENCE
Collier Johnson & Woods, P.C. is a local firm own, operated and staffed by local residents.
Our only office is in Corpus Christi at 555 North Carancahua.
Collier, Johnson & Woods was formed in December 1946 in Corpus Christi and has served the
South Texas community since then Our members have been instrumental m shaping the area business
and civic community. Throughout our history, we have been represented on civic organizations and
advisory boards and have performed accounting services for many businesses, governments and
individuals
Personnel Profiles
Following is a summary of our Firm's personnel:
NUMBER CPAs
Shareholders 4 4
Managers 4 4
Staff Accountants 5 1
Total Professionals 13 9
Other Support St,ff
TOTAL PERSONNEL
16 9
We are proud of our high shareholder-to-staff ratio and our high ratio of CPAs to total
professionals. Our staff accountants are required to have accounting degrees from accredited
universities and to pursue certification as CPAs.
Resumes of the project leadership, described in the previous section, are included on pages 22
through 24.
Governmental Experience
We have audited numerous governmental units and governmental grant contracts for fifty-eight
years. Our current governmental clients include the Port of Corpus Christi Authority, Corpus Christi
Independent School District, Del Mar College District, Nueces County Hospital District and the
Coastal Bend Council of Governments. Our experience gives us expertise m governmental accounting
and auditing and fund accounting in a budgetary environment. Our experience includes Single Audit
Act reporting; combined and combining statements; governmental, fiduciary and proprietary fund
types; financial and compliance auditing; 'and compliance with reporting requh-ements, promulgated by
a wide variety of agencies and standard-setting groups.
We have committed significant time and resources to developing our governmental services.
All of our audit staff attend governmental audit training. We have expanded our library of reference
materials and devoted considerable study to governmental issues. As part of our commitment to
governmental accounting, we put on seminars for our clients and other local governmental officials on
new accounting pronouncements such as GASB 34-.
When it comes to nationwide resources available to our firm in providing technical advise, we
go directly to the Governmental Accounting Standards Board (GASB), the Governmental Financial
Officer Association (GFOA) or the American Institute of Certified Public Accountants (AICPA).
Experience has proven that the best results are obtained by thoroughly researching an issue,
developing our conclusions and then confirming our conclusions with the above standard setting
organizations. Additionally, we actively communicate with grantor agencies regarding reporting
requirements and are experienced in channels of consultation to resolve problems. We actively
cormnent as a firm on governmental reporting requtrements.
The best example of our governmental expertise is in the implementation of GASB 34. This
was the most complex change in governmental accounting standards. We con'unitted the recourses to
researching and understanding the issues in order to facilitate our clients' implementation of the new
reporting model. In addition, we put on seminars for clients and other local government accounting
personnel to help them deal with the implementation issues.
Our audit practice focuses on large sophisticated governn~ents and corporations. This focus
allows us to concentrate on complex issues and emerging accounting and auditing pronouncements. In
the past ten years, we have dealt with these complex issues and responded to the City with timely and
accurate advise. More importantly we continually monitor accounting literature and communicate
with our clients to assure they are forewarned about upcoming pronouncements that could have
dramatic impact on their financial statements.
10
UNDERSTANDING OF THE CITY'S COMMITMENT TO PLAN
PREPARATION
The City is responsible for making all financial records and related information available to us.
We understand that you will provide us with such reformation required for our audit and that you are
responsible for the accuracy and completeness of that information. We will advise you about
appropriate accounting principles and their application and will assist in the preparation of your
financial statements, including the schedule of expenditures of federal awards, but the responsibility
for the financial statements remains with you. That responsibility includes the establishment and
maintenance of adequate records and effective internal control over financial reporting and
compliance, the selection and application of accounting principles, and the safeguarding of assets. The
City is responsible for adjusting the financial statements to correct material misstatements and for
confirming to us in the representation letter that the effects of any uncorrected misstatements
aggregated by us during the current engagement and pertaining to the latest period presented are
immaterial, both individually and in the aggregate, to the financial statements taken as a whole_
Additionally, as required by OMB Circular A-133, it is the City' s responsibility to follow up and take
corrective action on reported audit findings and to prepare a summary schedule of prior audit findings
and a corrective action plan.
During our detailed planmng, we will review the detailed audit work plan and schedule with
the project manager prior to commencing the audit assignment each year. We anticipate that it will be
to our mutual benefit to utilize assistance from the project manager during the planning phase. We
understand that City employees will prepare all cash, accounts receivable, or other confi .r?~tir~,,s w-
request and will locate any invoices selected by us for testing. We will use City employees to explain
procedures and resolve potential audit exceptions if encountered. We anticipate requesting selected
workpapers to be prepared by City staff; such requests will be conrdinated with the project manager.
The City will prepare the Comprehensive Annual Financial Report.
11
OTHER PERTINENT INFORMATION AS REQUIRED
The Firm is and has been a member of the Private Companies Practice Section of the American
Institute of Certified Public Accountants' Division for Firms for more than sixteen years. Members of
this group voluntarily subject themselves to periodic review of their system of quality controls by
specially trained CPAs from other firms. Results of these reviews, called peer review reports, are
available to the public. Membership in the Private Companies Practice Section and submission to
periodic peer reviews indicates our commitraent to the highest standards of professionalism_ Our last
peer review was dated September 24, 2004 (a copy of our unqualified peer review report is included
on page 21)
There have been no disciplinary actions taken, and ~ere are none pending againsttheFirrn.
12
AUTHORIZED NEGOTIATOR
F. John Shepherd is authorized to negotiate contract terms and render binding decisions on
contract matters. Our address is 555 N. Carancahua Suite 1000, Corpus Christi, Texas 78478, our
phone number is (361) 884-9437.
13
LOCAL PARTICIPATION
Collier, Johnson & Woods P.C. has one office located in at 555 N. Carancahua Suite 1000,
Corpus Cltristi, Texas 78478. Our phone number is (361) 884-9437. All work will be performed by
this local office by our staff of local residents. Years ago when the last of the national accounting frrrns
abandoned Corpus Christi we decided it was important to the community to have a professional fu-m to
handle audit requirements of local governments. We have created a fn'm of professionals to provide
these services locally and as a result have been able to offer local college graduates an oppormmty to
pursue a career in public accounting here in Corpus Christi.
!,4
CONCLUDING REMARKS
We believe certain attributes set us apart from our competition and allow us to offer the City an
association with a professional accounting fn'm that can fulfill its auditing and accounting needs.
Collier, Johnson & Woods has been the City's auditors for the past ten years. During these
ten years, the City has received the Government Finance Officers' Association (GFOA) Certificate of
Achievement for Excellence in Financial Reporting We assistc'd the City in implementing the GASB
34 reporting model which was the biggest change in governmental accounting standards in history.
The worksheets we created in 2002, including the CAFR financial statements, were successfully used
by the City to prepare the government-wide financial statements in 2003 and 2004.
The City made major improvements in the CAFR process last year. We believe that with our
help, including the training seminar, the City's accounting staff has gained the experience and
knowledge necessary complete the CAFR in a timely and efficient manner. This is ilinstrated by the
fact that in 2004 no out side consultants were used in the process saving the City thousands of dollars.
Because of the improvements, we have reduced our audit fee by nearly 5% in 2005. Presenting
seminars designed specifically to improve the knowledge of the City's staff is unique to our frrm and
sets us apart from our competition.
We understand the complexities of the CAFR process, and we know that time constraints
become critical at the end of the process. We have always worked with the staff to review the final
CAFR as quickly as possible at the end of the process. When evaluating proposal, the City should
assure itself that other proposals are as accommodating as Collier, ~ohnson & Woods has been over
,~he past ten ycars.
Throughout our tenure as auditors, we have used substantially the same professionals on the
engagement. The advantage of this continuity is that we know the City's systems and are able to
perform the audit efficiently without causing significant interruptions to the accounting staffs' regular
duties.
One attribute offered by Collier, Johnson & Womts that no other firm can offer is our in depth
understanding of the City's operation we have gained over the past ten years. Combine that
experience and our expertise in governmental accounting and auditing we believe we are the firm to
provide the quality service the City deserves.
Collier, Johnson & Woods is a local firm with all of our owners and employees making this
community our home. Our objective has been to provide the community with a professional
accounting firm that can service the local governments and businesses and provide opportunities for
the graduates of our local college and university. Providing auditing services to the City for the past
ten years has helped us to achieve our objective, and we hope to continue to provided the services and
opportunities in the future.
The auditor must maintain a professional and independent relationship with their clients.
Those relationships requires a delicate balance between workang closely with management to
efficiently and effectively perform the audit according to professional standards and our responsibility
15
to independently report to the Mayor, City Council and the public that may rely on our reports. In the
normal course of performing our job as auditors, we sometimes become aware of weaknesses or
inefficiencies in the financial reporting process which we reported in the form of a management letter_
We have always tried to make recommendations to assist management in their continuous
~mprovement efforts of the financial reporting process
The past ten years has been a great opportunity to work with the City and hopefully improve
the community we all live and work in. We hope we can continue this professional relation for years
to come.
16
COST OF SERVICES
The total all-inclusive maximum price for the scope of work detailed on pages 2 and 3 oft. his
proposal for the year ended July 31, 2005 is $126,000_ This is nearly a 5% decrease over the prior
year because we believe the experience and rebuilding of the fmanee department staff will allow the
audit process to be more efficient.
The estimated fees the second (2) through fifth (5) year of the contract if extended by the City
are as follows:
YEAR ENDED JULY 31, ESTLMEATED FEES
2006 128,000
2O07 132,000
2008 136,000
2O09 140,000
Because we can not predict inflation, changes in accounting stardards, changes in audit
requirements or changes in the City's operations, including the number and mounts of federal grants
over this extended period of time, we are not able to commit to an all-inclusive, not-to-exceed fee
estimate for four (4) additional years. Our estLmated fees for the option period are based on 3 %
inflation and the exact same operations and grants as 2004, As in the past ten years, Collier, Johnson
& Woods, P C. prepares a new engagement letter including fees each year which have been agreed to
and approved by the City Council We cee no prahlem~ in negotiating the sc?e o¢,~,~,rv a~d fee e~c?
year. The 2005 proposed fee is nearly 5% less than the 2004 fee because of improvements made by
the finance department. Our history with the City has shown we are fair in our charges and the only
significant increases have been when there have been changes in accounting standards.
17
OUT-OF-POCKET EXPENSES
Although the cost of services does not include any travel, lodging and subsistence, we will
accept reimbursement for such cost at the City's prevailing rates for its employees should they arise_
The $160 of out-of-pocket expenses includes stationary for reports, return postage for confirmations
and other supplies and expenses.
18
RATES BY PARTNER, SPECIALIST, SUPERVISOR AND STAFF
Our charges are based on direct expenses, plus time expended at rates based on level of
experience of personnel involved. The fee estimate is based on anticipated cooperation fi.om your
personnel and the assumption that unexpected circumstances will not be encountered during the audit.
If significant additional time ts necessary, we will discuss it with you and arrive at a new fee estimate
before we incur the additional costs. Billings for work performed will be made monthly and payment
is expected upon receipt of billings.
Rate Hours Total
Shareholder 160 230 36,800
Manager 100 280 28,000
Staff 65 75 870 60,900
Clerical 35 4 140
1.38_4 125,840
Out-of-Pocket Expenses 160
126,090.
19
ADDITIONAL PROFESSIONAL SERVICES
We would consider occasional questions regarding appropriate bookkeeping or accounting
procedures to be part of our audit engagement. Consttltation on specific accounting problems or
financial and operating matters would be considered separate engagements and would be negotiated at
our standard hourly rates quoted on page 19 based on the scope of work.
We understand that the City intends to sell bonds from time to time and this may require the
audit financial statements and Auditors opinion to be included in the Official Statements and that
certifications may be requested as part of these bond sales. We have provided these services to the
City in the past and will work with the City to facilitate these requirements m the most efficient and
economical manner. These services will be billed at our standard hourly rates based on the scope of
the procedures and certifications requested.
2O
Robert/Vi. Mc. Adams, CPA
Rober~ L Lewis, CPA
Franldln W. Burk, CPA
Paul Roth-F, off~, CPA
Carneiro,Chumney&Co., LC
CERTIFIED PUBLIC ACCOUNTANTS
J. Lowell Goode, CPA
Julia C. Norton, CIA
5,andra J. C.,ePl~rt. CPA
Ai[~n E. Robertson, Jr., CPA.
September 24, 2004
To the Shareholders
Collier, Johnson & Woods, P.C.
We haw mviev~d the system of quality control for the aco,~nflng and auditing practice of
Collier, Johnson & Woods, P.C. (the rrm) In effect for the year ended June 30; 2004. A system
of quality contn:d encompasses the firm's organizational stru~ and the policies adopted and
IxUCedures estsbished to provide It wt~ reasonable assurance of ca~orm~ wl~
standards. The elements of quality conth:fl are described In the Statements on QuaJlty Co, trul
Standards Issued by the American Institute of Certified Public .a,,:~dntanta [AICPA). The
design of the system and compliance with It are the responsibility of the firm. Our responsibility
is to express an opinion on the design o1' the system, and the firm's compliance with the
Our review was conducted in accordance with standards established bythe Peer Revtew Board
of the AICPA. In performing our review, we obtaJned an understanding of the s/stem of quallt~
conical for the firm's accounting and auditing prac-Uce. In addition, ~e tested compliance with
the firm's qua~y conlml policies and procedures to the extent we considered apprOpriate.
These tests covered the application of the firm's polk;les and procedures o~ selected
engagements. Because our review was based o~ selective tests, it would not nec~ssarily
disclose all weaknesses in the system of cluallty cont. roJ or all instances of lack of ,~a,Oliarme
wllh IL
Because there are inherent limitations in the effectiveness of any system of quality contmt,
departures from the system may occur and not be detected. Also, projection of any evaluation
of a systam of quality control Io future pedods is subject to ~ dsk that the system of quality
control may become inadequate because of changes in conditions, or because the degree of
compliance with the policies or procedures may detedorale.
In our opinion, the system of quality control for/he accounting and auditing practice of Collier,
Johnson & Woods, P.C. in effect for the year ended June 30, 2004, has been designed to meet
the requirements of the quality control standards {~or an accounting and auditing practice
established by the AICPA and was complied with dudng the year then ended to provide the firm
with reasonable assurance of conforming with professional standards.
"He~pi~g C3er, ts S~ kx rncxe ~ 75 Ye,us'
40 N.E. Loop 410, Suite 200 · San Ana3flJo, Te~as 7~Zl 6-S876
12tO) ~l,Z-~000 · Fa~ (ZI0{ 34Z-(I~66
E-m~l: ca~neiro~c,trnelro.com · www.carnet[o.com
An Independent A4ernber o~le B~() 5ddrnan Ail/atica
F. JOHN SHEPHERD
Certified Public Accountant
Education
B.B.A. Accounting, Texas A & M University, 1973
Experience
John is a shareholder and the Director of auditing at Collier, Johnson & Woods. Before joining Collier,
Johnson & Woods in 1978, he spent five years in the Corpus Christi office of KPMG, formerly Peat,
Marwick & Mitchell. He has been auditing and consulting businesses and organizations in South Texas
for his entire professional career.
John's industry experience includes financial institutions, governmental entities, broadcasting, not-for-
profit organizations, manufacturing and construction companies. He is currently engage'merit
shareholder of the audits of the City of Corpus Christi, Texas, Corpus Christi Independc'nt School
District, the Port of Corpus Christi Authority, the Coastal Bend Council of Govermnents and the
Regional Transit Authority and the concurring reviewer on the audit of Nueces County Hospital District
and Del Mar College District.
John has done extensive consulting with clients related to mergers, acquisitions, public offerings, aale of
debt securities, accounting systems, financial projections and budgeting and computer system selection
and implementation.
John has spent the past several years researching and attending seminars relating to the
implementation of GASB 34. He is a regular speaker at area GFOA meetings discussing
implementation issues.
Governmental Continuin~ Professional Education
Collrsc
Audit Issues Related to Cities
Planning Governmental Audit Engagements
Governmental Audit Programs and Reports
Single Audit Sampling and Other
Texas Schools Accounting and Auditing
Governmental Accounting and Financial Reporting Update
Governmental Accounting and Financial Reporting Update
GASB Statement No. 34
Governmental Accounting and Financial Reporting Update
Date Hours
8/19/2004 8
7/20/2004 8
7/19/2004 8
7/18/2004 8
7/14/2004 8
6/10/2004 8
6/05/2003 8
6/18/2003 8
6/13/2002 8
Membershio in Professional and Civic Or£anizations
American Institute of Certified Public Accountants (AICPA)
Texas Society of Certified Public Accountants (TSCPA)
Corpus Christi Chapter Texas Society of Certified Public Accountants
Leademhip Corpus Christi Class XIX
Consumer Credit Counseling
Coastal Bend Commumty Foundation Trustee
22
BRIGID W. COOK
Certified Public Accountant
Edncation
B.S. Accounting, Oral Roberts University, Tulsa, Oklahoma, 1980
ExDerienee
Brigid is a shareholder at Collier, Johnson & Woods. Prior to joining Collier, Johnson & Woods in
she was with the national accounting firm of Fox & Co
Brig~d has performed consulting projects for the City of Corpus Christi, Nueces CountyMHMR and the
Housing Authority of Corpus Christi. Bfigid currently is the engagement shareholder on the audit of
Nueces County Hospital District and Del Mar College and concumng reviewer on the audits of the City
of Corpus Christi, Texas, Corpus Christi Independent School District, the Port of Corpus Christi
Authority, the Coastal Bend Council of Governments and the Regional Transit Authority. Brigid also
was a speaker at a Continuing Education course given by the Firm for several of our governmental
clients on the topic of Management's Discussion and Analysis and Budgeting.
Brigid's industry specialization includes governmental, banking and manufacturing. Brigid has
designed financial accounting systems and has assisted in the development of budgets and financial
projections for a number of large commercial organizations She also provides consulting services
relating to the performance of due diligence work in regard to mergers and acquisitions.
Guverllmeatai Continuine l:ruressional Education
Course
Audit Issues Related to Cities
Managing Governmental Audit Engagements
Governmental Accounting and Financial Reporting Update
Texas School District Accounting and Auditing Update
Goverm~ental Accounting and Financial Reporting Update
GASB Statement No. 34
Governmental Accounting and Financial Reporting Update
Texas School District Accounting and Auditing Update
Membership in Professional and Civic Organizations
American Institute of Certified Public Accountants (AICPA)
Texas Society of Certified Public Accountants (TSCPA)
Corpus Christi Chapter Texas Society of Certified Public Accountants
Myers-Briggs Personality Type Tester
Date Hours
8/19/2004 8
8/31/2004 8
6/10/2004 8
6/23/2004 8
6/5/2003 8
6/18/2003 8
6/13/2002 8
6/25/2002 8
23
TIMOTHY C. McKAY
Certified Public Accountant
Certified Information Technology Professional
Education and Awards
BB.A. Accounting, with Highest Honors, Texas A&M University Corpus Ckristi, 1996
Post-Baccalaureate Certificate in Management Information Systems, Texas A&M University, Corpus
Christi, 2000
Recipient of the Texas Society of CPA's 1996 Accounting Excellence award
Exl~erlence
Tim joined Collier, Johnson & Woods in 1996 and is an audit manager. He has experience in auditing
governmental entities, wholesale companies and auto dealerships. Currently, T~m is the manager of the
audit staff on the audits of the City of Corpus Christi, Texas, Corpus Christi Independent School District,
Nueces County Hospital District, the Port of Corpus Christi Authority, Del Mar College and the Coastal
Bend Council of Governments.
Tim has passed the Information Systems Audit and Control Association's Certified Information Systems
Auditor Examination and his certification is pending. He has experience with LAN management,
systems needs assessments, contingency/disaster recovery planning and systems reviews.
Governmental Continuing, Professional Education
Course Date Hours
City Government - What's Going On 11/12/2004 I
Scb"ol Finance of Texa,$ 0/24/2004 !
Accounting & Audit Policies and Procedures 8/25/2004 2
Audit Issues Related to Citrus 8/19/2004 8
Audits of Looal Governments 7/22-25/2004 24
Governmental Audit Programs, Concluding the Audit 6/19/2004 8
Single Audit Sampling 6/19/2004 8
Pre-Engagement Activities and Planning Governmental Audits 6/19/2004 8
Texas School District Audit & Accounting Update 6/23/2004 8
Governmental Accounting and Financial Reporting Update 3710/2004 8
Governmental Accounting and Financial Reporting Update 6/05/2003 8
GASB Statement No 34 6/18/2003 8
Governmental Accounting, Reporting & Auditing Update 2002 6/10-12/2002 24
Membershio and Involvement in Professional and Civic Organizations
American Institute of Certified Public Accountants (AICPA)
Texas Society of Certified Public Accountants (TSCPA)
Corpus Christi Chapter of TSCPA Vice President
Information Systems Audit and Control. Association (ISACA)
Finance Committee - Coastal Bend Blood Center
CPA's Helping Schools Mcntoring Program
24
June 24, 2004
Colher. Johnson
&Woods
Cenified Publi* Acc0unlanl.
555 N Caranc~bua - S uile 100[I
Corpus Cl~Jsli, Tcx~s
78478-0052
(3611884-9~47
lAX (3611 gg4-9422
George K. Noe, City Manager
City of Corpus Clmsti
P. O. Box 9277
Corpus Christi, Texas 78469-9277
Dear Mr. Noe:
We are pleased to confirm our understanding of the services we are to
provide for the City of Corpus Christi (City) for the year ended July 31, 2004_ We
will audit the basic financial statements of the City of Corpus Christi as of and for
the year ended July 31, 2004. We understand that the financial statements will be
presented in accordance with the financial reporting model described in GASB
Statement No. 34. Also, the document you submit to us will include the following
additional information that will be subjected to the auditin~ l~rocedures applied in
our audit of the basic financial statements:
1. Management's Discussion and Analysis.
2. Budgetary Comparison Schedules.
3. Infrastructure Information.
4. Schedule of Expenditures of Federal Awards.
The document will also include statistical information that will not be subject to the
auditing procedures applied in our audit of the basic financial statements, and for
which our auditor's report will disclaim an opinion.
Audit Obiectives
The objective of our audit is the expression of an opinion as to whether
your basic financial statements are fairly presented, in all material respects,
in conformity with accounting principles generally accepted in the United
States of America and to report on the fairness of the additional information
referred to in the fi~st paragraph when considered in relation to the basic
financial statements taken as a whole. The objective also includes reporting
25
George K. Noe, City Manager
June 24, 2004
Page -2-
Internal control related to the financial statements and compliance with laws,
regulations, and the provisions of contracts or grant agreements, noncompliance
with which could have a material effect on the financial statements in
accordance with Government Auditing Standards.
Internal control related to major programs and an opinion (or disclaimer of
opimon) on compliance with laws, regulations, and the provisions of contracts or
grant agreements that could have a direct and material effect on each major
program in accordance with the Single Audit Act Amendments of 2003 and
OMB Cimular A-133, Audits of States, Local Governments, and Non-Profit
Organizations.
The reports on internal control and compliance will each include a statement
that the report is intended for the information and use of the Honorable Mayor and
Members of the City Council, mauagement, federal awarding agencies, and if
applicable, pass-through entities.
Our audit will be conducted in accordance with auditing standards generally
accepted in the United States of America; the standards for financial audits contained
in Government Auditing Standards, issued by the Comptroller General of the United
States; the Single Audit Act Amendments of 1996; and the provisions of OMB
Circular A-133, and will include tests of accounting records, a determination of
major programs in accordance with Circular A-133, and other procedures we
consider necessary to enable us to express such an opinion and to render the required
reports If our opinion on the basic financial statements or the Single Audit
compliance opinion is other than unqualified, we will fully discuss the reasons with
you in advance. If, for any mason, we are unable to complete the audit or are unable
to form or have not formed an opinion, we may decline to express an opinion or to
issue a report as a result of this engagement.
Management Responsibilities
Management is responsible [or establishing and maintaimng internal control
and for compliance with the provisions of contracts, agreements, and grants. In
fulfilling this responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of the controls. The objectives of
internal control are to provide management with reasonable, but not absolute,
assurance that assets are safeguarded against loss from unauthorized use or
disposition, that transactions are executed in accordance with managernent's
authorizations and recorded properly to permit the preparation of basic fmancinl
statements in accordance with generally accepted accounting principles, and that
federal award programs are managed in compliance with applicable laws and
regulations and the provisions of contracts and grant agreements.
26
George K. Nee,
June 24, 2004
Page -3
City Manager
Management is responsible for making all financial records and related
information available to us. We understand that you will provide us with such
information required for our audit and that you are responsible for the accuracy and
completeness of that information. We will advise you about appropriate accounting
principles and their application and will assist in the preparation of your financial
statements, including the schedule of expenditures of federal awards, but the
responsibility for the financial statements remains with you. That responsibility
includes the establishment and maintenance of adequate records and effective
internal control over financial reporting and compliance, the selection and application
of accounting principles, and the safeguarding of assets. Management is responsible
for adjusting the financial statements to correct material misstatements and for
confirming to us in the representation letter that the effects of any uncorrected
misstatements aggregated by us during the current engagement and pertaining to the
latest period presented are immaterial, both individually and in the aggregate, to the
financial statements taken as a whole. Additionally, as required by OMB Circular A-
133, it is management's responsibility to follow up and take corrective action on
reported audit findings and to prepare a summary schedule of prior audit findings and
a corrective action plan.
Audit Procedures--General
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements; therefore, our audit will involve judgment
about the number of transactions to be examined and the areas to be tested. We will
plan and perform the audit to obtain reasonable rather than absolute assurance about
whether the financial statements are fi-ce of material misstatement, whether caused by
error or fraud. As required by the Single Audit Act Amenclinents of 1996 and OMB
Circular A-133, our audit will include test of transactions related to major federal
award programs for compliance with applicable laws and regulations and the
provisions of contracts and grant agreements. Because an audit is designed to provide
reasonable, but not absolute assurance and because we will not perform a detailed
examination of all transactions, there is a risk that material misstatements (whether
caused by errors or fi-aud), illegal acts, or noncompliance may exist and not be
detected by us. In addition, an audit is not designed to detect immaterial
misstatements, immaterial illegal acts, or illegal acts that do not have a direct effect
on the financial statements or major programs. However, we will inform you of any
material errors and any fraud that comes to our attention. We will also inform you of
any ether illegal acts that come to our attention, unless clearly inconsequential. We
will include such matters in the reports required for a Single Audit. Our responsibility
as auditors is limited to the period covered by our audit and does not extend to
matters that might arise during any later periods for which we are not engaged as
auditors.
27
George K Noe, City Manager
June 24, 2004
Page 4.-
Our procedures will include tests of documentary evidence supporting the
transactions recorded in the accounts, and may include tests of the physical existence
of inventories, and direct confirmation of receivables and certain other assets and
habilities by correspondence with selected individuals, creditors, and financial
institutions. We will request written representations from your attorneys as part of the
engagement, and they may bill you for responding to this inquiry. At the conclusion
of our audit, we will also require certain written representations from you about the
financial statements and related matters.
Audit Procedures--Internal Controls
In planning and performmg our audit, we will consider the intemal control
sufficient to plan the audit in order to determine the nature, timing, and extent of our
auditing procedures for the purpose of expressing our opinions on the City's basic
financial statemenls and on its compliance with requirements applicable to major
programs.
We will obtain an understanding of the design of the relevant controls and
whether they have been placed in operation, and we will assess control risk. Tests of
controls may be perfommd to test the effectiveness of certain controls that we
consider relevant to preventing and detecting errors and fraud that are material to the
basic financial statements and to preventing and detecting misstatements resulting
from illegal acts and other noncompliance matters that have a direct and material
effect on the basic financial statements. Tests of controls relative to the basic
financial statements are required only if control risk is assessed below the maximum
level. Our tests, if performed, will be less in scope than would be necessary to render
an opinion on internal control and, accordingly, no opinion will be expressed in our
report on internal conla-ol issued pursuant to Government Auditing Standards
As required by OMB Circular A-133, we will perform tests of controls to
evaluate the effectiveness of the design and operation of controls that we consider
relevant to preventing or detecting material noncompliance with compliance
requu-ements, applicable to each major federal award program. However, our tests
will be less in scope than would be necessary to render an opinion on those controls
and, accordingly, no opimon will be expressed in our report on internal control
issued pursuant to OMB Circular A-133.
28
George K Noe,
June 24, 2004
Page-5-
City Manager
An audit is not designed to provide a~surance on internal control or to identify
reportable condinons. However, we will inform the Honorable Mayor and Members
of the City Council and City management of any matters involving internal control
and its operation that we consider to be reportable conditions under standards
established by the American Institute of Certified Public Accountants. Reportable
conditions involve matters coming to our attention relating to significant deficiencies
in the design or operation of the internal control that, ~n our judgment, could
adversely affect the entity's ability to record, process, summarize, and report financial
data consistent with the assertions of management in the basic financial statements.
We will also inform you of any nonreportable conditions or other matters involving
internal control, if any, as required by OMB Circular A-133.
Audit Pro~edur es-- Compliance
Our audit will be conducted in accordance with the standards referred to in
the section titled Audit Objectives_ As part of obtaining reasonable assurance about
whether the basic financial statements are free of material misstatement, we wilt
perform tests of the City's compliance with applicable laws and regulations and the
provisions of contracts and agreements, including grant agreements. However, the
objective of those procedures will not be to provide an opinion on overall compliance
and we will not express such an opinion in our report on compliance issued pursuant
to Government Auditing StandardJ.
OMB Circular A-133 requires that we also plan and perform the audit to
obtain reasonable assurance about whether the anditee has complied with applicable
laws and regulations and the provisions ofcontrants and grant agreements applicable
to major programs. Our procedures will consist of the applicable procedures
described in the OMB Circular A-133 Compliance Supplement for the types of
comphance requirements that could have a direct and material effect on each of the
City's major programs. The purpose of those procedures will be to express an
opinion on the City's compliance with requirements applicable to major programs in
our report on compliance issued pursuant to OMB Circular A-133.
Audit Administration, Fees, and Other
We understand that your employees will prepare all cash, accounts receivable,
or other confirmations we request and will locate any invoices selected by us for
testing.
At the conclusion of the engagement, we will complete the appropriate
sections of and sign the Data Collection form that summarizes our audit findings.
29
George K. Noe, City Manager
June 24, 2004
Page
We will provide copies of our reports to the City; however, it is
management's responsibility to submit the reporting package (including financial
statements, schedule of expenditures of federal awards, summary schedule of prior
audit findings, auditors' reports, and a corrective action plan) along with the Data
Collection Form to the designated federal clearinghouse and, if appropriate, to pass-
through entities. The Data Collection Form and the reporting package must be
submitted w~thin the earlier of 30 days after receipt of the auditors' reports or nine
months after the end of the audit period, unless a longer period is agreed to in
advance by the cognizant or oversight agency for audits. At the conclusion of the
engagement, we will provide information to management as to where the reporting
packages should be submitted and the number to submit.
The workpapers for this engagement are the property of Collier, Johnson &
Woods P.C. and constitute confidential information. However, we may be requested
to make certain workpapers available to cognizant or grantor agencies pursuant to
authority g~ven to them by law or regulation. If requested, access to such workpapers
will be provided under the supervision of Collier, Johnson & Woods P.C. personnel.
Furthermore, upon request, we may provide photocopies of selected workpapers to
cognizant or grantor agencies. The cognizant or grantor agencies may intend, or
decide; to distribute the photocopies or information contained therein to others,
including other governmental agencies.
The workpapers for this engagement will be retained for a mimmum of three
years after the date the auditors' report is issued or for any additional period
requested by the cognizant agency, oversight agency for audit, or pass-through entity.
If we are aware that a federal awarding agency, pass-through entity, or auditee is
contesting an audit finding, we will contact the parties contesting the audit finding for
gmdance prior to destroying the workpapers.
We expect to begin our audit in August.
Our fees for these services will be based on the actual time spent at our
standard hourly rates, plus travel and other out-of-pocket costs such as report
production, typing, postage, etc. Our standard hourly rates vary according to the
degree of responsibility involved and the experience level of the personnel assigned
to your audit.
30
George K. Noe, City Manager
June 24, 2004
Page -7-
We estimate that our fees for the engagement cover the following task:
Financial Audit of the City
Compliance Audit
99,000
31,000
TOTAL 130,000
We do not anticipate the fee to exceed $130,000 for the above services, unless
unforeseen circumstances arise. Such circumstances will be discussed when, and
if, encountered. Our invoices for these fees will be rendered as work progresses
and will be payable within 30 days of receipt and work will cease if fees are not
paid. We acknowledge that no fees for the tasks outlined above that exceed
$130,000 in the aggregate are authorized by this agreement, without the prior
written authorization of the Director of Financial Services. Expenses will be
iten'uzed and will be 1Lrnited to reasonable and customary charges
The City is obligated to pay such fees under this agreement as may lawfully
be made from funds budgeted and appropriated for that purpose during the current
fiscal year. Should the City fail to budget and appropriate funds for the audit in the
subsequent fiscal year this agreement shall be terminated
We appreciate the opporturfity to be of service to the City of Corpus Christi
and believe this letter accurately summarizes the significant terms of our engagement.
If you have any questions, please let us know. If you agree with the terms of our
engagement as described in this letter, please sign the enclosed copy and return it to
US
Very truly yours,
COLLIER, JOHNSON & WOODS
A Professional Corporation
F. John Shepherd
31
George K. Noe, City Manager
June 24, 2004
Page 8
RESPONSE:
This letter correctly sets forth the understanding of the City of Corpus Christi.
George K. Noe, City Manager
Date:
Armando Chapa, City Secretary
Date:
Motion No.:
32
( ollit,r, Jolmson
&V bods
June 8, 2005
George K. Noe, City Manager
City of Corpus Christi
P. O. Box 9277
Corpus Christi, Texas 78469-9277
Dear Mr. Noe:
We are pleased to confirm our understanding of the services we are to provide
for the City of Corpus Christi (City) for the year ended July 31,2005. We will audit
the basic financial statements of the City of Corpus Christi as of and for the year
ended July 31,2005. We understand that the financial statements will be presented
in accordance with the financial reporting model described in GASB Statement No.
34. Also, the document you submit to us will include the following additional
information that will be subjected to the auditing procedures applied in our audit of
the basic financial statements:
1. Management's Discussion and Analysis.
2 Budgetary Comparison Schedules
3. Infrastructure Information.
4. Schedule of Expenditures of Fedcral Awards.
The document will also include statistical infomiation that will not be subject to the
auditing procedures applied in our audit of the basic financial statements, and for
which our auditor's report will disclaim an opinion.
Audit Objectives
The objective of our audit is the expression of an opinion as to whether your
basic financial statements are fairly presented, in all material respects, in conformity
with accounting principles generally accepted in the United States of America and to
report on the fairness of the additional information referred to in the first paragraph
when considered in relation to the basic financial statements taken as a whole. The
objective also includes reporting on:
Internal control related to the financial statements and compliance with laws,
regulations, and the provisions of contracts or grant agreements, noncompliance
with which could have a ~naterial effect on the financial statements in accordance
with Government Auditing Standards.
George K. Noe, City Manager
June 8, 2005
Page -2-
Internal control related to major programs and an opinion (or disclaimer of
opinion) on compliance with laws, regulations, and the provisions of contracts or
grant agreements that could have a direct and material effect on each major
program in accordance with the Single Audit Act Amendments of 2003 and
OMB Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations
The reports on internal control and cmnpliance will each include a statement
that the report is intended for the information and use of the Honorable Mayor and
Members of the City Council, management, federal awarding agencies, and if
applicable, pass-through entities.
Our audit will be conducted in accordance with auditing standards generally
accepted in the United States of America; the standards for financial audits contained
in Government Auditing Standards, issued by the Comptroller General of the United
States; the Single Audit Act Amendments of 1996; and the provisions of OMB
Circular A-133, and will include tests of accounting records, a determination of
major programs in accordance with Circular A-133, and other procedures we
consider necessary to enable us to express such an opinion and to render the required
reports. If our opinion on the basic financial statements or the Single Audit
compliance opinion is other than unqualified, we will fully discuss the reasons with
you in advance. If, for any reason, we are unable to complete the audit or are unable
to form or have not formed an opinion, we may decline to express an opinion or to
issue a report as a result of this engagement.
Management Responsibilities
Management is responsible 1hr establishing and maintaining internal control
and for compliance with the provisions of contracts, agreements, and grants. In
fulfilling this responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of the controls. The objectives of
internal control are to provide management with reasonable, but not absolute,
assurance that assets are safeguarded against loss from unauthorized use or
disposition, that transactions are cxecuted in accordance with management's
authorizations and recorded properly to permit the preparation of basic financial
statements in accordance with generally accepted accounting principles, and that
federal award programs are managed in compliance with applicable laws and
regulations and the provisions of contracts and grant agreements.
George K Noe, City Manager
June 8, 2005
Page -3-
Management is responsible for making all financial records and related
information available to us. We understand that you will provide us with such
information required for our audit and that you are responsible for the accuracy and
completeness of that information. We will advise you about appropriate accounting
principles and their application and will assist in the preparation of your financial
statements, including the schedule of expenditures of federal awards, but the
responsibility for the financial statements remains with you. That responsibility
includes the establishment and maintenance of adequate records and effective
internal control over financial reporting and compliance, the selection and application
of accounting principles, and the safeguarding of assets. Management is responsible
for adjusting the financial statements to correct material misstatements and for
confirming to us in the representation letter that the effects of any uncorrected
misstatements aggregated by us during the current engagement and pertaining to the
latest period presented are immaterial, both individually and in the aggregate, to the
financial statements taken as a whole. Additionally, as required by OMB Circular A-
l 33, it is management's responsibility to follow up and take corrective action on
reported audit findings and to prepare a summa~ schedule of print audit findings and
a corrective action plan.
Audit Procedures General
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements; therefore, our audit will involvejudgrnent
about the number of transactions to be examined and the areas to be tested. We will
plan and perform the audit to obtain reasonable rather than absolute assurance about
whether the financial statements are free of material misstatement, whether caused by
error or fraud. As required by the Single Audit Act Amendments of 1996 and OMB
Circular A-133, our audit will include test of transactions related to major federal
award programs for compliance with applicable laws and regulations and the
provisions of contracts and grant agreements. Because an audit is designed to provide
reasonable, but not absolute assurance and because we will not perform a detailed
examination of all transactions, there is a risk that material misstatements (whether
caused by errors or fraud), illegal acts, or noncompliance may exist and not be
detected by us. In addition, an audit is not designed to detect immaterial
misstatements, immaterial illegal acts, or illegal acts that do not have a direct effect
on the financial statements or major programs. However, we will inform you of any
material errors and any fraud that comes to oor attention. We will also inform you of
any other illegal acts that come to our attention, unless clearly inconsequential We
will include such matters in thc reports required for a Single Audit. Our responsibility
as auditor is limited to the period covered by our audit and does not extend to matters
that might arise during any later periods for which we are not engaged as auditors.
George K. Noe, City Manager
June 8, 2005
Page -4-
Our procedures will include tests of documentary evidence supporting the
transactions recorded in the accounts, and may include tests of the physical existence
of inventories, and direct confirmation of receivables and certain other assets and
liabilities by correspondence with selected individuals, creditors, and financial
institutions. We will request written representations from your attorneys as part of the
engagement, and they may bill you for responding to this inquiry. At the conclusion
of our audit, we will also require certain written representations from you about the
financial statements and related matters.
Audit Procedures~lnternal Controls
In planning and performing our audit, we will consider the internal control
sufficient to plan the audit in order to determine the nature, timing, and extent of our
auditing procedures for the purpose of expressing our opinions on the City's basic
financial statements and on its compliance with requirements applicable to major
programs.
We will obtain an understanding of the design of the relevant con=ols and
whether they have been placed in operation, and we will assess control risk. Tests of
controls may be performed to test the effectiveness of certain controls that we
consider relevant to preventing and detecting errors and fraud that are material to the
basic financial statements and to preventing and detecting misstatements resulting
from illegal acts and other noncompliance matters that have a direct and material
effect on the basic financial statements. Tests of controls relative to the basic
financial statements are required only if control risk is assessed below the maximum
level. Our tests, if per formed, will be less in scope than would be necessary to render
an opinion on internal control and, accordingly, no opinion will be expressed in our
report on internal control issued pursuant to Government Auditing Standards
As required by OMB Circular A-133, we will perfi~rm tests of controls to
evaluate the effectiveness of the design and operation of controls that we consider
relevant to preventing or detecting material noncompliance with compliance
requirements, applicable to each major federal award program. However, our tests
will be less in scope than would be necessary to render an opinion on those controls
and, accordingly, no opinion will be expressed in our report on internal control issued
pursuant to OMB Circular A-133.
George K. Noe, City Manager
June 8, 2005
Page -5-
An audit is not designed to provide assurance on internal conn-ol or to identify
reportable conditions. However, we will inform the Honorable Mayor and Members
of the City Council and City management of any matters involving internal control
and its operation that we consider to be reportable conditions under standards
established by the American Institute of Certified Public Accountants. Reportable
conditions involve matters coming to our attention relating to significant deficiencies
in the design or operation of the internal control that, in our judgment, could
adversely affect the entity' s ability to record, process, summarize, and report financial
data consistent with the assertions of management in the basic financial statements.
We will also inforn~ you of any noareportable conditions or other matters involving
internal control, if any, as required by OMB Circular A- 133.
Audit Procedures--Compliance
Our audit will be conducted in accordance with the standards referred to in
the section titled Audit Objectives. As part of obtaining reasonable assurance about
whether the basic financial statements are free of material misstatement, we will
perform tests of the City's compliance with applicable laws and regulations and the
provisions of contracts and agreements, including grant agreements. However, the
objective of those procedures will not be to provide an opirfion on overall compliance
and we will not express such an opinion in our report on compliance issued pursuant
to Government Auditing Standards.
OMB Circular A-133 requires that we also plan and perform the audit to
obtain reasonable assurance about whether the auditee has complied with applicable
laws and regulations and the provisions of contracts and grant agreements applicable
to major programs. Our procedures will consist of the applicable procedures
described in the OMB Circular A-133 Compliance Supplement for the types of
compliance requirements that could have a direct and material effect on each of the
City's major programs. The purpose of those procedures will be to express an
opinion on the City's compliance with requirements applicable to maj or programs in
our report on compliance issued pursuant to OMB Circular A-133.
Audit Administration, Fees, and Other
We understand that your employees will prepare all cash, accounts receivable,
or other confirmations we request and will locate any invoices selected by us for
testing.
At thc conclusion of the engagement, we will complete the appropriate
sections of and sign the Data Collection form that summarizes our audit findings.
George K. Noe, City Manager
June 8, 2005
Page -6-
We will provide copies of our reports to the City; however, it is
management's responsibility to submit the reporting package (including financial
statements, schedule of expenditures of federal awards, summary schedule of prior
audit findings, auditors' repons, and a corrective action plan) along with the Data
Collection Form to the designated federal clearinghouse and, if appropriate, to pass-
through entities The Data Collection Form and the reporting package must be
submitted within the earlier of 30 days after receipt of the auditors' reports or nine
months after the end of the audit period, unless a longer period is agreed to in
advance by the cognizant or oversight agency for audits. At the conclusion of the
engagement, we will provide information to management as to where the reporting
packages should be submitted and the number to submit.
The workpapers for this engagement are the property of Collier, Johnson &
Woods P.C. and constitute confidential information. However, we may be requested
to make certain workpapers available to cognizant or grantor agencies pursuant to
authority given to them by law or regulation. If requested, access to such workpapers
will be provided under the supervision of Collier, Johnson & Woods P.C. personnel.
Furthermore, upon request, we may provide photocopies of selected workpapers to
cognizant or grantor agencies. The cognizant or grantor agencies may intend, or
decide; to distribute the photocopies or information contained therein to others,
including other governmental agencies.
The workpapcrs for this engagement will be retained for a minimum of three
years after the date the auditors' report is issued or for any additional period
requested by the cognizant agency, oversight agency for audit, or pass-through entity.
If we are aware that a federal awarding agency, pass-through entity, or auditee is
contesting an audit finding, we will contact the parties contesting the audit finding for
guidance prior to destroying the workpapers.
We expect to begin our audit in July.
Our tees for these services will be based on the actual time spent at our
standard hourly rates, plus travel and other out-of-pocket costs such as report
production, typing, postage, etc. Our standard hourly rates vary according to the
degree of responsibility involved and the experience level of the personnel assigned
to your audit.
George K Noe, City Manager
June 8, 2005
Pa§e -7-
We estimate that our fees for the engagement cover the following task:
Financial Audit of the City
Compliance Audit
95,000
31,000
TOTAL 126,000
We do not anticipate the fee to exceed $126,000 for the above services, unless
unforeseen circumstances arise Such circumstances will be discussed when, and if,
encountered. Our invoices for these fees will be rendered as work progresses and will
be payable within 30 days of receipt and work will cease if fees are not paid. We
acknowledge that no fees for the tasks outlined above that exceed $126,000 in the
aggregate are authorized by this agreement, without the prior written authorization of
the Director of Financial Services. Expenses will be itemized and will be limited to
reasonable and customary charges
The City is obligated to pay such fees under this agreement as may lawfully
be made from funds budgeted and appropriated for that purpose during the current
fiscal year. Should the City fail to budget and appropriate funds for the audit in the
subsequent fiscal year this agreement shall be terminated.
We appreciate the opportunity to be of service to the City of Corpus Christi
and believe this letter accurately summarizes the significant terms of our engagement.
If you have any questions, please let us know. If you agree with the terms of our
engagement as described in this letter, please sign the enclosed copy and return it to
US.
Very truly yours.
COLLIER, JOHNSON & WOODS
A Professional Corporation
F. Jo
George K. Noe. City Manager
June 8, 2005
Page -8-
RESPONSE:
This letter correctly sets forth the understanding of the City of Corpus Christi.
~~oe, City Manager
Date: kc[ z-Z { o$
Armando Chapa, Cit~Secretary
Date: ~ {'7_ ~> Io 'G
Motion No.: ~ Ct.~ / cd; ~:,