11-Specifications.pdf

SPECIFICATIONS

SCOPE

Harris County is seeking a professional firm with experience, capabilities, credentials and qualified available staff to perform the annual external audit services for Harris County and related entities for one (1) year beginning approximately August 1, 2026.

PRE-SUBMITTAL CONFERENCE

A pre-submittal conference is scheduled on June 9, 2026, at 9:00 a.m. CST. Attendance is not mandatory, but all vendors should attend in order to have a better understanding of the requirements of this RFQ. Should you wish to attend, you must RSVP to Jeremy Woodard at jeremy.woodard@harriscountytx.gov by June 5, 2026, no later than 12:00 p.m. CST. By RSVP request, you will be provided with the conference line number and access code to dial in to attend the meeting. People with disabilities requiring special accommodation should contact the Office of the Purchasing Agent at (713) 274-4400 at least two (2) days prior to the conference.

It is the responsibility of each firm to examine the entire RFQ, seek clarification in writing, and review their submittal for accuracy before submitting. Once the submission deadline has passed, all submissions will be final.

Questions relating to the bid must be submitted in writing and submitted though Bonfire at https://harriscountytx.bonfirehub.com/. The deadline for submission of questions relating to this bid is listed on the Event Schedule in Bonfire. All questions submitted in writing prior to the deadline will be compiled and answered in writing. A copy of all questions and answers will be released as a Public Notice to all firms through Bonfire. The County will not be bound by any information conveyed verbally.

RENEWAL OPTIONS

Harris County may consider four (4) one-year renewal options, based upon the same terms, conditions and pricing as the original year. Renewal is subject to approval by Harris County Commissioners Court. Once renewal options are exhausted, the contract must be rebid. Harris County reserves the right to rebid at any time as it is in its best interest and is not automatically bound to renew.

SPECIFICATION

Harris County is the third largest county in the United States and is a southeast Texas county and a major component of the Houston Primary Metropolitan Statistical Area. The County's population was estimated to be approximately 4.7 million as of 2020 according to the Bureau of the Census estimates, Harris County Appraisal District data and historical trends. The County provides a vast array of services which include public safety, administration of justice, health and human services, culture and recreational services, public improvements, flood control and general administration.

The audit of Harris County includes Harris County, the Harris County Flood Control District and related single audits and a management letter. Texas Local Government Code, Section 114,025 requires that the Auditor's Management letters shall be addressed to the Commissioners Court A separate audit report on the Harris County Toll Road Authority is also part of the reporting requirements.

Texas County and District Retirement System (TCDRS) require an audit of Harris County contributions and actuarial data. The Uniform Guidance requires a federal single audit from organizations with federal grant expenditures of $1,000,000 or more in a fiscal year. The Texas Grant Management Standards (TxGMS) prescribed by the Texas Comptroller of Public Accounts require a state single audit from organizations which expend state grants of $1,000,000

External Audit Services for Harris County, the Harris County Flood Control District, and Related Entities or more in a fiscal year. Harris County and Harris County Flood Control District audits shall be completed one hundred and eighty (180) days after fiscal year end. Harris County's current fiscal year shall end September 30th.

AUDIT REQUIREMENTS

The following services are required:

1. Harris County is required to have an independent annual audit of the combined financial statements of the County and related entities. The Uniform Guidance 2 CFR 200 requires a federal single audit from organizations which expend federal grants of $1,000,000 in a fiscal year. TxGMS prescribed by the Texas Comptroller of Public Accounts requires a state single audit from organizations which expend state grants of $1,000,000 in a fiscal year.

2. An examination for compliance of procedures as established by the standards set for financial audits in the Government Auditing Standards issued by the Comptroller General of the United States, and the provisions of 2 CFR 200 Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance).

3. A communication to those charged with governance setting forth any weaknesses or opportunities for improvement in the Harris County operations and procedures shall be provided as a result of the auditor's study and evaluation of the County's system of internal accounting controls, legality of actions, other instances of non-compliance with laws and regulations, and any other significant or material matters in accordance with the requirements of Government Auditing Standards and 2 CFR 200 Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance).

4. A single audit of programs requiring audit in accordance with 2 CFR 200 Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance).

5. The County may experience a change in the number of major programs subject to audit due to federal funding received for natural disasters that may occur during the contract period.

6. TCDRS requires an audit of Harris County contributions and actuarial data.

7. Harris County and the Harris County Flood Control District audits must be completed with one hundred and eighty (180) days after fiscal year end. Harris County and the Harris County Flood Control District present Annual Comprehensive Financial Reports.

8. A separate audit report on the Harris County Toll Road Authority. The Harris County Toll Road Authority presents basic financial statements.

9. Reports necessitated by public offering document. From time to time, the County may issue tax exempt bonds through a public offering. If the County issues tax exempt bonds, it would require a consent to include the most current audited financial statements in the offering document and issuance of an agreed upon procedures report for any unaudited interim financials included in the Official Statement.

REPORT REQUIREMENTS

1. Audit reports shall be addressed and contain information as follows:

a. A report on the County combined statements addressed to the Commissioners Court of Harris County.

The report must state the scope of the examination and that the audit was performed in accordance with generally accepted auditing standards and must include an opinion as to whether the statements are presented fairly, in all material respects, in conformity with generally accepted accounting principles.

b. Reports required under the 2 CFR 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance).

i. A report addressed to the Commissioners Court of Harris County on compliance with the County's schedule of expenditures of Federal and State awards. The report shall include a statement that the examination was conducted in accordance with applicable auditing standards.

The report must state whether the examination disclosed instances of significant non-compliance with laws and regulations. Findings of ineligible expenditure shall be presented.

ii. A report on compliance and on internal control over financial reporting shall be addressed to the Commissioners Court of Harris County.

c. A report addressed to the Commissioners Court of Harris County expressing an opinion on Harris County's contributions and actuarial data regarding the TCDRS plan.

2. Communication to those charged with governance, addressed to the Commissioners Court of Harris County is required, which shall include a statement of audit findings and recommendations affecting the financial statements, internal accounting controls, data processing systems, legality of actions, other instances of non-compliance with laws and regulations and any other material matters. Recommendations must be discussed with Harris County staff during the field work for immediate implementation as required.

AUDIT PERIODS

The periods to be audited shall be Harris County’s fiscal years ending September 30, 2026, through September 30, 2030, subject to the Commissioners Court approval for each fiscal year.

BASIS OF ACCOUNTING

Funds are classified into three categories: Governmental, Proprietary, and Fiduciary. The major funds of the County are noted within each category. Changes in major and non-major funds due to changes in the financial reporting entity are presented in accordance with Governmental Accounting Standards Board (GASB) Statement No. 100.

In accordance with Statement No. 34 of the GASB 34, Basic Financial statements and Management Discussion and Analysis- for State and Local Governments, the County's financial statements include a statement of net position and a statement of activities at the government-wide level, as well as the balance sheet and a statement of revenues, expenditures and changes in fund balances at the fund level.

The government-wide financial statements are prepared using the economic resources measurement focus and the accrual basis of accounting. Fund financial statements are prepared on the modified accrual basis of accounting. All proprietary funds, including the enterprise and internal service funds, and fiduciary funds are accounted for using the accrual basis of accounting.

Harris County's accounting policy is to apply all Financial Accounting Standards Board (FASB) Statements and Interpretations issued after November 30, 1989, except for those which would conflict with or contradict GASB pronouncements.

The combined financial statements are to include the accounts of Harris County and the Harris County Flood Control District. All significant intra-entity accounts and transactions are eliminated.

ACCOUNTING SYSTEM

Harris County facilities are all centralized into one accounting and finance department with consistent internal controls.

Harris County's financial reporting and accounting system is PeopleSoft. The following PeopleSoft modules are installed:

1. General Ledger

2. Accounts Payable

3. Fixed Assets

4. Materials Management

5. Purchasing

6. Payroll and Human Resources

7. Grants

Please refer to Major Systems with Financial Impact located in Public Files.

HARRIS COUNTY ASSISTANCE (RESOURCES) MADE AVAILABLE TO EXTERNAL AUDITORS

1. The Harris County Auditor's Office staff prepares all financial statements and assists with preparing necessary work papers.

2. Harris County personnel shall be available to the external auditors for the purpose of pulling invoices, directing external auditors to the proper files, or for explaining procedures.

3. Access to Harris County Universal Services (Information Technology Department) personnel for systems documentation.

4. Access to former external auditors.

5. Access to Harris County senior management.

6. Work areas shall be made available for external auditors.

TIMING OF AUDITOR REPORTS

As it relates to financial statements for Harris County, the Harris County Flood Control District, and the Harris County Toll Road Authority, audits must be completed and reports issued no later than March 25 for September 30 year-end).

Any timing deviation in the issuance of other reports is discussed previously.

NON-APPROPRIATION PROVISION

The County may cancel the contract should the present or any future Harris County Commissioners Court not appropriate funds in any fiscal year for the payments required by the resulting agreement. No penalty shall be applied in the event of any such non-appropriation. In the event of non-appropriation, the County shall give the external auditor advance written notice before cancellation of the Agreement resulting from this RFQ, and the County shall not be obligated to make any payments beyond the end of the fiscal year.

EQUAL EMPLOYMENT OPPORTUNITY

Firm shall agree that during the performance of its services it shall:

1. Treat all applicants and employees without discrimination as to race, color, religion, sex, national origin, marital status, age, or handicap.

2. Identify itself as an "Equal Opportunity Employer" in all help wanted advertising or request.

AUDIT FEES

1. Fee shall be proposed as a fixed, not-to-exceed fee for audit services for Fiscal Year September 30, 2026.

2. Billing rates by staff level and estimated hours for the audit engagement must be provided.

3. If additional work is required due to an expanded scope of audit fieldwork, the fee for the additional work must be agreed upon and approved prior to beginning the work.

4. Expenses must be proposed as a fixed, not-to-exceed amount. Any unusual or unexpected expenses must be agreed upon, approved prior to the beginning of work, and must be billed in detail and supported by receipts.

5. There must be reconciliation at the conclusion of the audit as to hours incurred, rates per hour, total fees and expenses.

6. Audit fee for each of the following must be stated and invoiced separately:

7. Financial Statements of the governmental activities, business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Harris County, Texas, as of and for the year ending September 30, 2026.

8. Financial Statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Harris County Flood Control District, a component unit of Harris County, as of and for the year ending September 30, 2026.

9. Single Audit Component - Reports on Federal and State Award Programs for Harris County and the Harris County Flood Control District

10. Financial Statements of the Harris County Toll Road Authority Enterprise Fund of Harris County, Texas, as of and for the year ending September 30, 2026.

11. The fee for the fiscal year ending September 30, 2026, shall be as it is stated in firm's response

12. If the firm does not agree to maintain the same fee as fiscal year 2026 for subsequent fiscal years, the firm must include a maximum percentage for the increase in fee for subsequent fiscal years.

FEES FOR OTHER SERVICES

From time to time, the County may issue tax-exempt bonds through a public offering. Provide pricing to provide the following services:

1. Consent to include the most current audited financial statements in the bond offering Official Statement

2. Issuance of agreed-upon procedures report for any unaudited interim financials that are to be included in the

Official Statement