INDEPENDENT AUDIT OF FINANCIAL STATEMENTS REQUEST FOR PROPOSAL FOR PROFESSIONAL SERVICES

Transcription

1 INDEPENDENT AUDIT OF FINANCIAL STATEMENTS REQUEST FOR PROPOSAL FOR PROFESSIONAL SERVICES

2 INTRODUCTION The Fort Worth Employees Retirement Fund ( FWERF ) seeks the services of an external, independent auditor to administer an examination of FWERF s financial statements beginning with its fiscal year ending September 30, FWERF has issued this request for proposals ( RFP ) to solicit and evaluate proposals from qualified financial services providers. The selected auditor will be awarded a five (5) year contract and such contract shall provide at FWERF s sole option the right to terminate the contact, or any portion thereof, at any time. BACKGROUND The City of Fort Worth created FWERF as a singular, unitary defined benefit retirement system that serves all of its general employees, uniformed firefighters (civil Service), and uniformed police officers (civil service) (the City Plan ). In 2007, the Texas State Legislature enacted 6243i of Title 109 of the Texas Revised Civil Statutes which, among other things, placed the City Plan under the exclusive management of FWERF s Board of Trustees for the purposes of managing its assets and administering its benefits. The FWERF s Board of Trustees authorized and established a defined benefit retirement plan to serve the employees of FWERF (the Staff Plan and together with the City Plan, the Plans ). Although the two Plans are separate and distinct, both Plans share similar provisions and provide retirement, disability, and death benefits to their respective members and survivors. Both Plans are funded through a combination of investment returns and employee/employer contributions and both Plans constitute qualified retirement plans under section 401(a) of the Internal Revenue Code. The City Plan serves approximately 6,400 employees and 4,400 retirees and the Staff Plan currently serves eighteen (18) employees. FWERF S retirement investments have a total market value of $2.1 billion. The assets of both Plans are comingled for investment purposes and both Plans are administered by the FWERF Board of Trustees. A copy of FWERF s 2015 Comprehensive Annual Financial Report ( CAFR ) and additional information about FWERF, including this RFP, can be found on the FWERF website at MINIMUM QUALIFICATIONS The selected auditor must satisfy all of the requirements detailed below and submit all required documentation before the proposal submission deadline to be considered for award of a contract for audit services. 1. The senior auditing team members must be properly licensed to practice in the state of Texas; 2. The audit(s) must be performed in accordance with Generally Accepted Auditing Standards ( GAAS ) as set forth by the American Institute of Certified Public Accountants ( AICPA ); 3. The auditor must conform to the standards of independence promulgated by the U.S. General Accounting Office, even for audits conducted that are not otherwise subject to generally accepted government auditing standards; 4. The auditor must be a professional financial services provider in the business of providing auditing services for a minimum of five (5) years; 5. The auditor must have provided financial auditing services to at least three (3) public retirement systems or corporate pension plans similar to FWERF; 6. The auditor s technology system must be capable of providing verifiable security for all FWERF data, including providing a secure means of data transmission to and from FWERF and providing data encryption using no less than 128-bit Key encryption; and 7. The auditor must not seek to unreasonably limit its liability for negligence. Page 2 of 8

3 SCOPE OF SERVICES FWERF is issuing this RFP for audit services to conduct an independent examination and audit of FWERF s financial statements, including review of its CAFR for the five separate years, each ending September thirtieth (30th), of 2017, 2018, 2019, 2020 and The scope of the audit services shall include the following: 1. Audit of Financial Statements The selected auditor shall provide an examination of the financial statements of all FWERF financial accounts for the fiscal year ending September 30, Such examination shall be made in accordance with GAAS as promulgated by the AICPA and in accordance with the laws of the state of Texas. FWERF will provide the on-site space necessary for the selected auditor to conduct its examination. All information, data, schedules, reports and records necessary for carrying out the audit services will be furnished to the selected auditor and FWERF will cooperate in every reasonable way to ensure timely completion of the audit services. The selected auditor will provide twenty (20) bound copies of each such audit report after the completion of each annual audit. 2. Auditor Opinion The selected auditor shall express a professional opinion on the fair presentation of FWERF s financial statements, and such opinion will state the scope of the auditor s examination and that the audit was performed in conformity with GAAS. In addition, the auditor shall provide an opinion on any supplementary financial information provided in relation to the financial statements in accordance with the current guidance from AICPA. 3. Management Letter The selected auditor shall provide a management letter at the conclusion of its audit services and such management letter shall include a statement of audit findings and recommendations associated with the financial statements, internal controls, accounting and/or information systems, and other related matters of material concern to FWERF. The management letter will also detail any legality of actions, instances of noncompliance with laws and regulations, any material irregularities and/or illegal acts or indications of illegal acts, or any other material matters. The selected auditor will report any significant deficiencies in the design or operation of FWERF s internal controls that could adversely affect FWERF s ability to record, summarize and report financial data consistent with the assertions in its financial statements. In addition, the selected auditor will report any difficulties encountered in performing its audit services or significant opportunities for internal control improvements or increased efficiencies. If the selected auditor finds no reportable conditions after its audit, it will state such within its management letter. The selected auditor will provide twenty (20) copies of each such management letter after the completion of each annual audit. Page 3 of 8

4 4. Annual Audit Schedule September 30 th October 1 31 st October 31 st November 27 th January 9 th March 2 nd Fiscal year end date Conduct participant testing (can be done prior to October) Close of accounting process at custodial bank Begin on-site fieldwork Deadline to provide audit report of financial statements to FWERF Deadline to provide report of review of CAFR to FWERF 5. Additional Services FWERF may request the selected auditor to perform other services not specifically provided within this RFP. Upon such request, the auditor shall submit a separate proposal for completing additional services including a proposed fee schedule. FWERF reserves the right to contract any additional audit services with any party of its choice and in its sole discretion. PROPOSAL CONTENT The selected auditor will provide the content listed in each of the following categories in its proposal for audit services. Qualification and Experience The selected auditor will provide the following details related to its organization and operation details: Background: 1. The auditor s name and physical address and its contact s name, title, telephone number and e- mail address; 2. A general description of the auditor s organization and its history, including the length of time providing audit services, organization size, governmental audit staff size, and experience evaluating actuarial data; 3. The number and description of audits completed per year including the range of audit activities and the percentage of professional services performed such as auditing, accounting, tax service or management advisory services; 4. A list of engagements with other retirement systems or public plans similar to FWERF performed by the auditor in the last three (3) years including the scope of work, date, number of years served and the manager assigned; and 5. References from three (3) public sector organizations for which the auditor has completed audits and the name and telephone number of the associated client contacts. Audit Team: 6. A statement attesting that all senior auditing team members and/or supervisors are properly licensed to practice in the state of Texas; 7. The name, role and biography of each professional staff member to be assigned to or involved with conducting audit services for FWERF, including supervisory and management staff or other specialists and their experience conducting public sector audits and meeting the requirements of the Government Finance Officer s Association ( GFOA ); 8. A statement attesting that the auditors(s) assigned to provide services to FWERF meet the continuing professional education requirements of the Generally Accepted Government Auditing Standards (GAGAS); Page 4 of 8

5 9. A description of the backup procedures to be used in the event the auditor s key personnel should no longer be available to provide audit services to FWERF; and 10. A disclosure whether the auditor will engage subcontractors for the provision of its services and, if so, the subcontractor name(s), the service(s) to be subcontracted and how the auditor will control cost, quality, timeliness and confidentiality of its audit services. Provision of Services: 11. A description of whether and how the minimum qualifications enumerated in this RFP are met; 12. A sample public sector audit the auditor has recently completed; 13. A step-by-step work plan and project time line including initial meeting(s), preliminary field work, receipt of data, final audit and management report distribution, and presentation of audit findings; 14. A description of the secure data transmission process to and from FWERF; 15. A statement regarding the information or resources required from FWERF to ensure a successful and timely audit; and 16. A description of how the auditor will safeguard all FWERF data and a statement that such data will be secured to at least the same extent as the auditor safeguards proprietary information relating to its own business. Auditor Quality Control and Standard of Conduct The selected auditor will provide the following details related to its quality of audit services and professional ethics: 1. A copy of the auditor s most recent external quality control review report, including a statement whether such quality control review included a review of specific government engagements and any information on the circumstances and status of any disciplinary action taken or pending during the past three (3) years involving state regulatory bodies or professional organizations; 2. A statement regarding how the auditor will notify FWERF of relevant changes in audit or accounting standards during the year prior to the audit. 3. The identification of any allegations of ethical lapses within the auditor s organization in the past five (5) years, any ongoing investigation by any regulatory agency, or any pending litigation matters involving the auditor; 4. A list and description of any professional relationships involving FWERF or its staff for the past five (5) years, together with a statement explaining why any such relationships do not constitute a conflict of interest relative to performing the proposed audit; and 5. A statement of any potential conflicts of interest should the auditor be selected to perform audit services for FWERF. Requirements The selected auditor will provide the following items related to its performance of audit services: 1. Certificate of Insurance showing the effective dates and the maintenance of a Comprehensive or Commercial General Liability policy at the minimum of $2,000,000 and at the auditor s own expense. 2. A signed letter of intent briefly stating the auditor's understanding of the work to be done and a commitment to perform the work within the required time period and that its submission of a response to this RFP is an irrevocable offer through August 31, Page 5 of 8

6 3. All work materials and reports related to an audit of FWERF shall be retained, at the auditor's expense, for a minimum of five (5) years unless FWERF notifies the auditor in writing of the need to extend such retention period. The auditor shall make work materials and reports available upon the request of representatives of federal and state agencies and of FWERF. In addition, the auditor will respond to reasonable inquiries of successor auditors and allow successor auditors to review work materials relating to matters of continuing accounting significance. Auditor Pricing Auditors should submit a not to exceed cost proposal that includes an itemized fee schedule for all services and materials described in this RFP for each of the five (5) annual audits, including hourly rates for any personnel that may provide work that is outside the scope of the services described in this RFP. The proposal must completely provide all costs and pricing options associated with the requested audit services including billing terms. The auditor is solely responsible for the accuracy and completeness of its cost proposal. Additionally, the auditor should provide the following details related to its cost of its services: 1. Description of how the auditor controls the costs of its services; 2. Any estimated cost savings or year-to-year expense reductions; 3. An estimate of FWERF accounting staff time related to the auditor s preparation for services and include whether increased FWERF staff time will result in substantially lower costs; and 4. An itemized breakdown of all estimated auditor travel expenses. FWERF shall have the right, at its sole option, to renew the contract for audit services for four (4) additional one-year periods, or any portion thereof. In the event of a contract renewal, all terms, conditions and provisions of the contract shall remain the same and apply during any renewal period subject to applicable contract clauses. PROPOSAL SUBMISSION The selected auditor will provide its completed audit services proposal using the submission instructions provided below. Proposal Submission Instructions A proposal submission should include complete and detailed responses to the items enumerated under each section of this RFP and should include an understanding of the services to be provided and a commitment to perform such services within the time frames outlined within this RFP. Nonconformance with any submission requirement(s) may result in rejection of the proposal and FWERF shall not be liable for any costs incurred in connection with this RFP, including any expense that is in any way related to a proposal submission. Should additional information be required to respond to this RFP, please contact Robert Hulme, Deputy Director of Investments and Operations via robert.hulme@fwretirement.org. Submissions must be ed to rfp@fwretirement.org and three (3) written copies must be mailed in a sealed envelope labeled Proposal for Independent Audit of Financial Statements bearing the name and address of the auditor and signed by its authorized official. Submissions shall be mailed to: Page 6 of 8

7 Fort Worth Employees Retirement Fund 3801 Hulen Street, Suite 101 Fort Worth, TX ATTN: Robert Hulme Proposals must be received on or before the close of business (5:30 pm CDT) on April 24, Failure to meet the proposal receipt deadline may result in rejection of the proposal. Submitted proposals become the property of FWERF and will not be returned. Any information included in a proposal that the auditor considers proprietary or confidential must be so marked. Such marking, however, is not determinative as to whether the information is considered confidential under Texas law. Changes or addenda to a submitted proposal must be provided in writing and prior to the proposal receipt deadline, signed in original ink by an authorized official of the auditor, cross-referenced clearly with the relevant proposal section(s), and provided in a clearly marked sealed envelope. A submitted proposal may be withdrawn by mailing a written notice of withdrawal, signed in original ink by an authorized official of the auditor, that is received by FWERF before the proposal receipt deadline. All proposals will be considered valid offers for acceptance for a period of 120 days following the earlier of the proposal receipt deadline or the award of the contract. Proposal Submission Timeline* March 13, 2017 RFP released to auditors and posted on the FWERF website April 3, 2017 Deadline for question submission from proposers April 10, 2017 Deadline for FWERF s responses to questions April 24, 2017 Deadline for proposal submissions June 12, 2017 FWERF decision on award of contract for audit services *All Deadlines are 5:30 p.m. CDT Submission of a response to the RFP indicates acceptance of the conditions contained in this RFP unless clearly and specifically noted in the response submitted and confirmed in any subsequent contract between FWERF and the selected auditor. SELECTION PROCESS FWERF will evaluate audit services proposals pursuant to timeliness, completeness and compliance with the requirements set forth in this RFP. Failure to meet all requirements, or substantial deviations from the requirements, may result in the rejection of the entire proposal without further consideration. FWERF will review all proposals and auditor qualifications to determine rankings. FWERF, in its sole judgment and discretion and without the need to state any reason or justification, may reject any or all proposals. FWERF may accept any offer and award any business in its sole discretion and without a discussion of best or final offers. The award of an election services contract shall be made to the auditor whose proposal is deemed, in FWERF s sole discretion, most advantageous and of best value to FWERF. The factors to be utilized by FWERF in evaluating the proposals will be weighted as follows: Page 7 of 8

8 Ability to perform the audit services requested in this RFP; the clarity, completeness and content of the proposed work plan and deliverables; and the ability to meet FWERF s timetable: 35% Cost: 25% Experience with public pension plans: 25% References with preference given to specific experience with the auditor s proposed staff: 15% FWERF may contact auditor references during the initial evaluation or at any stage of its evaluation process. FWERF may request that potential auditors make in-person presentations as part of its evaluation process. In all interviews held with FWERF, the auditor partner and/or manager for the audit services and the individual who will have on-site responsibility for the audit services provided to FWERF must be present. RIGHTS RESERVED TO FWERF FWERF reserves the right to reject any and all proposals, in whole or in part, and to waive any irregularities, omissions and defects if it finds in its judgment that it serves the best interest of FWERF. FWERF may also discontinue this RFP process at any time and without any obligation or liability to any potential auditor. FWERF reserves the right to require additional information from proposers and to conduct necessary investigations, including onsite due diligence, to determine the responsibility of proposers and/or to determine the accuracy of proposal information. FWERF reserves the right to request additional information or address minor issues of completeness or compliance with respect to a proposal. However, other than contact initiated by FWERF and the allowable submissions as set forth above, no respondent may contact any member of the FWERF Board or staff during the proposal period, which begins on March 13, 2017 and ends June 12, FWERF reserves the right to negotiate the terms and conditions of any proposed contract with the selected auditor. Page 8 of 8