INVITATION TO BID ANNUAL FINANCIAL AUDIT

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1 INVITATION TO BID ANNUAL FINANCIAL AUDIT NOTICE OF PROPOSAL The Lake Linden-Hubbell Public Schools (LLHPS) is issuing this request for proposal (RFP) for the audit of the LLHPS, in accordance with the Michigan Department of Education requirements, Governmental Auditing Standards, OMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, and generally accepted auditing standards. The contact person regarding this RFP is Craig Sundblad, Superintendent, and can be reached at 601 Calumet Street, Lake Linden, MI 49945, or at (906) , ext The response due date for this RFP is June 9, 2016, 4:00 p.m. EDT. Any proposals or modifications to proposals received after this date will not be considered. No faxed proposals will be accepted. We are requesting only one copy of your proposal in a sealed envelope. The envelope should clearly indicate it is a proposal for audit services and should be mailed to the Superintendent s Office, Lake Linden-Hubbell Public Schools, 601 Calumet Street, Lake Linden, MI Also complete and include with your proposal the AUDIT PROPOSAL FORM included with the RFP. All proposals shall be irrevocable for a period of forty-five days from the response due date. Questions from proposing firms and the related answers will be communicated to all bidders. The audit period under contract is for the year ended June 30, 2016, and may be extended at the discretion of the Board of Education for the Lake Linden-Hubbell Public Schools, but the term of the engagement shall end: 1. When the audit contract has been violated. 2. When the quality of the audit is unacceptable. DESCRIPTION OF LLHPS AND RECORDS TO BE AUDITED 1. Geographically, the Lake Linden-Hubbell Public Schools lies in two counties (Houghton and Keweenaw) and is made up of all or part of four townships (Torch Lake, Schoolcraft, Sherman and Calumet). 2. The Lake Linden-Hubbell Public Schools is a Local Educational Agency that provides general and special education to the District s roughly 500 students. Additional details concerning the district can be found on our website at: 3. The School District currently has a Taxable Valuation of $56,987,677. Millage rates are 18.0 General Operation and 5.2 Debt Service. 4. Below are the School District s Funds and related operating budgets for the year ended June 30, 2015: General Fund 4,359,301 Debt Service Fund 574,237 Food Service Fund 278,558

2 5. A copy of the prior year audited statements is also available on our website at or in pdf format upon request. 7. Our financial records and client prepared workpapers for the year ended June 30, 2015, are expected to be available. Assistance will be provided by the Business Manager, as necessary, to facilitate the timely completion of the audit. NATURE OF SERVICES REQUIRED Should you be selected as our auditors, you will be required to report on the General Purpose Financial Statements and for Federal programs under the Single Audit Act and OMB Circular A-133. Report on the general purpose financial statements. Report on internal accounting control based solely on a study and evaluation made as part of the audit of the general purpose financial statements and on compliance with laws and regulations that may have a material effect on the financial statements. Provide a report on the supplementary schedule of our Federal award programs showing total expenditures for each Federal assistance program. Report on internal controls and on compliance used in administering Federal award programs, identifying all findings of noncompliance, internal controls and questioned costs as required by OMB Circular A-133. If applicable, a report on fraud, abuse or an illegal act or indications of such acts. A written report to the Board of Education on audit results, suggestions, etc., (i.e. management letter). The format of the audit report should be similar to the report received in the past, see our website at: Your examination under the Single Audit Act will be conducted in accordance with the standards for financial and compliance audits contained in the Government Auditing Standards Standards for Audit of Governmental Organizations, Programs, Activities and Functions, issued by the U.S. General Accounting Office, the Single Audit Act and the provisions of the Office of Management and Budget s (OMB) Circular A-133, Audits of State and Local Governments, Michigan School Auditing Manual, and any other tests of the accounting records and such other auditing procedures you consider necessary in the circumstances. In addition, the following services are/may be required: If requested, a personal presentation of the final report to the Board of Education by a member of the firm who worked on site on the audit. Engagement team members must have extensive experience in school district audits. Key engagement team members must be knowledgeable in all aspects of school district auditing, accounting and reporting. The Firm must provide ready access to school district specific consulting services.

3 MANDATORY QUALIFICATIONS OF THE AUDITOR The following must be affirmed in the proposal response: 1. The proposer is properly licensed for public practice as a certified public accountant. 2. The proposer meets the independence and continuing professional education requirements of the Government Auditing Standards Standards for Audit of Governmental Organizations, Programs, Activities and Functions, 1994 revision published by the U.S. General Accounting Office. 3. The respondent does not have a record of substandard audit work. Please disclose the controls your firm has in place to ensure quality standards have been met. Also, disclose whether your firm is subject to an external quality control review process. If the firm s most recent external quality control review was qualified, please disclose the reasons for the qualification. 4. The proposer has an unqualified Peer Review Report. If the firm s most recent report was qualified, please disclose the reasons for the qualification. 5. The proposer must have a significant and ongoing commitment to serving school districts and involvement in the school district industry. 6. The proposer must have trained qualified staff and partners. MONITORING To ensure the quality of the audit, the District may request, from time to time, a report on the progress of the audit. In addition, prior to completion of the fieldwork, an audit exit conference will be held to discuss the results of the audit. TIME REQUIREMENTS The Lake Linden-Hubbell Public Schools shall receive all proposal responses by June 9, 2016, at 4:00 p.m. EDT. We anticipate the successful bidder will be notified by June 16, The timetable for starting and completing the audit must allow LLHPS to meet all State, Federal and grantor reporting requirements. WORKING PAPERS The working papers shall be retained for at least three years. The working papers will be available for examination by authorized representatives of the cognizant Federal audit agency, the State of Michigan Department of Education, the General Accounting Office and the school district. RIGHT TO REJECT Although cost will be an important factor in awarding the contract, the school district is not obligated by any statute or regulation to award the purchase of audit services solely on the basis of cost. The school district reserves the right to use other subjective criteria, and will award the contract to the firm which will serve the best interests of the district. The school district also reserves the right to waive any informalities or irregularities in any proposal and to reject any or all proposals.

4 CONTRACTUAL ARRANGEMENTS AND REMEDIES FOR VIOLATIONS The total amount to be invoiced shall not exceed the amount of the bid for the first year unless other arrangements have been negotiated with the school district first. The school district reserves the right to terminate the contract for the audit at any time. Should a Federal or State agency or the school district reject the audit as deficient, the school district may withhold payment for services until the audit deficiency is corrected. Should the audit firm fail to correct the audit deficiency, the audit firm will be barred from further engagements with the school district for a period of five years. METHOD OF EVALUATING PROPOSALS Proposals will be evaluated with a strict emphasis on quality. The Federal government has the authority to review the audit report and audit workpapers to ascertain the quality of the audit. In response to a deficient audit, the cognizant agent or its designees of the Federal government can disallow the cost of the audit as an allowable cost of the Federal grants. Furthermore, the citizens are expecting quality stewardship of all available resources. As such, the primary emphasis of procuring an audit will be the quality of technical factors of the audit firm. Attributes that will be analyzed include: 1. Number of school districts audited by office of CPA firm proposing. 2. Training of personnel in governmental and Federal grant auditing. 3. Quality of staff included in assignment. 4. Reference responses. 5. Internal quality control procedures and external quality control review. 6. Ability to communicate audit results in an effective manner. 7. Ability to respond to the district s current and future professional service needs. After the technical qualities have been evaluated, cost and other considerations will be evaluated. The proposing audit firm should indicate the cost of the audit for the year.

5 LLHPS AUDIT PROPOSAL FORM Please complete and return this proposal form with any additional information you feel is necessary to help us evaluate your firm. Proposals are due by June 9, 2016, at 4:00 p.m. EDT. Qualifications 1. Location of the office that will be performing the audit for the Lake Linden-Hubbell Public School District: 2. Number of Michigan school district audits that your firm conducted in each of the last three years. Please attach a list of school districts. Year ending June 30, 2013 Year ending June 30, 2014 Year ending June 30, Number of other governmental (fund accounting) audits your firm has conducted in each of the last two years. Last Year Prior Year 4. Please list specific school district audit training supplied to your staff in the last two years. 5. Number of total audit staff. Do not include tax, consulting services or clerical personnel. Number of Audit Staff Number of Audit Staff with CPA Certification 6. Number of staff as defined in the question above who were directly involved in a significant portion of the audit of a school district in the last two years: 7. Of your staff assigned in school audits, how many years of experience have they had performing school audits (total and with your firm). Staff with the highest number of years: Next staff with the highest number of years: Average number of years school audit staff: School Audits With Your Firm School Audits With Your Firm School Audits With Your Firm Services 8. What type of consultation would you provide to the school district on an annual and ongoing basis at no additional cost?

6 9. Provide a synopsis of other management consulting services available to the school district. Fees 10. Base audit cost for the year ending June 30, 2016: Cost for Alternate Services: Preparation of FID for the Michigan Department of education (plan on having prepared by the school district.) Hourly rates for consulting services beyond the scope of the ordinary consultation services included in number 9 above. Name of Firm: Address: _ Telephone: (Please Type or Print) Name of Person in Charge of Audit Title Signature Date

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