25-48 Request for Proposal Audit Services.pdf

TOWN OF WESTERLY

REQUEST FOR PROPOSAL

25-48

AUDIT AND AGREED-UPON PROCEDURES

SERVICES

FISCAL YEAR ENDING 06/30/2025

RFP# 25-48

April 17, 2025

WESTERLY TOWN HALL

45 BROAD STREET

WESTERLY, RI 02891

FOR AUDIT AND AGREED UPON PROCEDURES

For the fiscal year ending June 30, 2025

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Contents

GENERAL INFORMATION

TERM OF ENGAGEMENT

SCOPE OF WORK TO BE PERFORMED

AUDITING STANDARDS TO BE FOLLOWED

REPORTS TO BE ISSUED

SPECIAL CONSIDERATIONS

ADDITIONAL WORK

DOCUMENTATION RETENTION AND ACCESS TO AUDIT DOCUMENTATION

NATURE OF AGREED-UPON PROCEDURES SERVICES REQUIRED

DESCRIPTION OF GOVERNMENT

FUND STRUCTURE

BUDGETARY BASIS OF ACCOUNTING

DATE FINAL REPORT IS DUE

GENERAL REQUIREMENTS

CRITERIA

FINAL SELECTION

APPENDIX A - FORM FOR PROPOSER GUARANTEES

APPENDIX B – FORM FOR PROPOSER WARRANTIES

APPENDIX C – FORM FOR SCHEDULE OF PROFESSIONAL FEES AND EXPENSES

APPENDIX D - UCOA ANNUAL COMPLIANCE TESTING REQUIREMENTS

EXHIBIT 1 – Sample Reporting Template ................................................................... ……………………………………… 32

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GENERAL INFORMATION

The Town of Westerly is seeking quotes from qualified firms of certified public accountants to audit its financial statements for the fiscal year ending June 30, 2025, with the option of auditing its financial statements for each of the 2 subsequent years. Continuation beyond the initial fiscal year of the three-year contract will be at the discretion of the Town. These audits are to be performed in accordance with generally accepted auditing standards, established by the American Institute of Certified Public Accountants, and the standards for financial audits set forth in Government Auditing Standards issued by the Comptroller General of the United States.

These audits are to be performed in accordance with the provisions of the Federal Single Audit Act of 1984 as amended by the Single Audit Act Amendments of 1996 and U.S. Office of Management and Budget (OMB) Guidance 2 CFR part 200

– Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards (OMB Uniform Guidance) – Subpart F- Audit Requirements.

The minimum standards as required by the Office of the Auditor General of the State of Rhode Island and the Department of Education of the State of Rhode Island should also be followed.

The Town of Westerly School Department implemented a Uniform Chart of accounts (UCOA). The auditors engaged to perform the annual audit shall also be engaged to report on their tests of compliance with the school UCOA requirements in the agreed-upon procedures compliance attestation format.

There is no expressed or implied obligation for the Town of Westerly to reimburse responding firms for any expenses incurred in preparing quotes in response to this request.

Bids are due and must be submitted no later than 2:00 pm on May 8, 2025. Bids must be in sealed envelopes and addressed to Eileen Cardillo, Purchasing Agent, Westerly Town Hall, 45 Broad Street, Westerly RI 02891 and be clearly marked with the name and address of the Bidder, bid due date, time, RFP number, and title. Bidders must include an original and two copies along with a digital for public use copy on a flash drive. Questions regarding the bids must be emailed and received by the Purchasing Agent no later than 12:00 pm April 30, 2025. Questions with responses will be posted on the Town of Westerly website at www.westerlyri.gov as an addendum to the solicitation. Bids will be opened on May 8, 2025 at 2:00 pm at The Town of Westerly, Town Hall, Council Chambers, 45 Broad Street, Westerly, RI, 02891.

The Town of Westerly reserves the right to reject any quotes submitted.

The Town reserves the right to request additional information or clarifications or to allow corrections of minor errors or omissions. The Town of Westerly reserves the right to retain all quotes submitted and to use any ideas in a quote regardless of whether that quote is selected. Submission of a quote indicates acceptance by the firm of the conditions contained in this request, unless clearly noted in the quote and confirmed in the contract between the firm and the Town of Westerly.

It is anticipated that the selection of a firm will be completed by May 23, 2025. Following the notification of the selected firm, it is expected that a contract would be executed between both parties by June 1, 2025. Copies of the Town’s ACFR for previous years can be found at http://www.westerlyri.gov/515/Annual-Reports-CAFRs.

http://www.westerlyri.gov/ http://www.westerlyri.gov/515/Annual-Reports-CAFRs

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TERM OF ENGAGEMENT

A three-year contract is anticipated, subject to annual review and recommendation of the Director of Finance in conjunction with the Town of Westerly Town Council and the Town Manager.

SCOPE OF WORK TO BE PERFORMED

The Town of Westerly requires the auditor to express an opinion on the fair presentation of its basic financial statements which will include government-wide financial statements, and fund financial statements and notes to the financial statements in conformity with generally accepted accounting principles.

The auditor shall also be responsible for performing certain limited procedures, as required by generally accepted auditing standards, involving required supplementary information mandated by the Governmental Accounting Standards Board.

Required Supplementary Information shall include:

• Management’s Discussion and Analysis

• Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual

• Schedules related to defined benefit pension plans and OPEB plans, if applicable

The Town also desires the auditor to express an "in-relation-to" opinion on the supplementary financial statements and schedules based on the auditing procedures applied during the audit of the basic financial statements.

Supplementary financial statements, schedules and information shall include:

• Combining fund financial statements shall be presented as supplementary information for all non-major governmental funds. Each non-major fund (included within the Special Revenue Funds, Capital Projects Funds, Debt Service Funds, and Permanent Funds) shall be presented as separate columns in the combining fund financial statements. Similarly, combining financial statements shall also be presented for each of the other fund types when there is more than one internal service fund, enterprise fund, and fiduciary fund.

• Combining financial statements shall be presented for the General Fund when separate funds are maintained within the accounting system, but the funds do not qualify as special revenue funds, in accordance with generally accepted accounting principles, and are merged with the General Fund for financial reporting purposes.

If applicable, an audit of major programs shall be performed in accordance with the criteria outlined in OMB Guidance 2 CFR part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (OMB Uniform Guidance) - Subpart F – Audit Requirements.

• The auditors shall audit major programs as required by OMB Guidance 2 CFR part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (OMB Uniform Guidance) - Subpart F

– Audit Requirements and express an opinion on compliance for each major program.

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• Major programs shall be determined in accordance with guidance provided in OMB Guidance 2 CFR part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (OMB Uniform Guidance) - Subpart F – Audit Requirements.

• The auditor is not required to audit the supplementary schedule of expenditures of federal awards. However, the auditor is to provide an “in-relation-to” report on that schedule based on the auditing procedure applied during the audit of the financial statement.

Other schedules may be required by the Town and/ or the State of Rhode Island Director of Revenue, Auditor General, and Department of Education or as required by the applicable section of the general laws such as, Rhode Island General Law Section (RIGL) 45-10-6 (Contents of Audit Report).

• The Tax Collector’s Annual Report shall be presented within Other Supplementary Information to meet the requirements of RIGL 45-10-6 for additional information to the basic financial statements. The Tax Collector’s Annual report should be presented in accordance with the revised format requirements of the RI Department of Revenue – Division of Municipal Finance (contact the Division for the most current template). The auditors engaged to audit the municipality’s financial statements shall also report on the Tax Collector’s Annual Report, as supplementary information (“fairly presented in relation to the municipality’s basis financial statement”).

• Municipal Transparency Portal (MTP) - Enacted legislation amended Rhode Island General Laws §45-12-22.2 and §44-35-10 to improve required reporting by creating the Municipal Transparency Portal (MTP) which will represent a centralized location for municipal financial information. Each municipality shall include their Annual Supplemental Transparency Report, MTP2, within their annual audited financial statements. This requires one schedule that includes (1) municipal reportable government services and (2) all school services (consistent with RIDE UCOA requirements). The Annual Supplemental Transparency Report, MTP2, included within the annual audit report shall also include reconciliation to the amounts included in the fund level financial statements.

The auditors engaged to audit the municipality’s financial statements shall also report on the Annual Supplemental Transparency Report (including reconciliations), MTP2, as supplementary information (“fairly presented in relation to them municipality’s basic financial statement”).

Auditors are not required to opine on the municipality’s determination of “reportable government services” (RGS) as defined in Section 2.1 of the Municipal Transparency Portal Implementation Guidance. The municipality will make the determination of “reportable government services” for inclusion in the various reports required to be submitted through the municipal transparency portal. However, auditors will be expected to review the reconciliations as part of the Annual Supplemental Transparency Report, MTP2, (required for inclusion in the audited financial statement as supplementary information) to assess the inclusion of amounts reported which are not within the municipality’s or schools’ general fund.

The format of the required MTP schedules and related reconciliations, as well as the typical timeline for filing of the annual municipal data report and coordination with annual financial statement audit, are detailed in the MTP Implementation Guidance (available on the RI Division of Municipal Finance website: Municipal Transparency

Portal | RI Division of Municipal Finance).

https://municipalfinance.ri.gov/municipal-transparency https://municipalfinance.ri.gov/municipal-transparency

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The Independent Auditor’s Report shall include reference to the Annual Supplemental Transparency Report, MTP2, as supplementary information. See the Municipal Transparency Portal Implementation Guidance for additional information.

AUDITING STANDARDS TO BE FOLLOWED

The Audit shall be performed in accordance with Generally Accepted Audited Standards as set forth by the American Institute of Certified Public Accountants, the standards for financial audits set forth in Government Auditing Standards issued by the Comptroller General of the United States, and the provisions of the Single Audit Act of 1984 as amended by the Single Audit Act Amendments of 1996 and the provisions of U.S. Office of Management and Budget (OMB) Guidance 2 CFR part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (OMB Uniform Guidance) – Subpart F – Audit Requirements.

REPORTS TO BE ISSUED

Following the completion of the audit of the fiscal year’s financial statements, the auditor shall report on:

1. The fair presentation of the financial statements in conformity with generally accepted accounting principles based upon an audit performed in accordance with generally accepted auditing standards and Government Auditing Standards. The auditor shall also refer to, but not opine on, required supplementary information consistent with reporting guidance in the applicable AIPCA Audit Guide.

2. Supplementary financial statements, schedules and information, are fairly stated in all material respects in relation to the basic financial statements as a whole.

• The supplementary information shall include combining fund financial statements (and if applicable, General Fund combining financial statements), the Annual Supplementary Transparency Report (MTP2, including the reconciliations), and the Tax Collector’s Annual report.

3. Internal control over financial reporting and on compliance and other matters based upon an audit of financial statements performed in accordance with Government Auditing Standards.

• In the required reports on internal controls, the auditor shall communicate any significant deficiencies found during the audit. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis.

• Significant deficiencies that are also material weaknesses shall be identified as such in the report. Other matters, for example, control deficiencies that are not significant deficiency or material weaknesses discovered by the auditor shall be reported in a separate letter to management. The report on compliance shall include all material instances of noncompliance. All nonmaterial instances of noncompliance shall be reported in a separate management letter.

4. Reports and summaries related to federal financial assistance as required by OMB Guidance (the auditor should refer to applicable OMB guidance in effect and the applicable AICPA Audit Guide for reporting guidance) and

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6 | P a g e complete SF-SAC Data Collection Form to be submitted in accordance with the current method of submission for Single Audit report packages (per OMB Public Notice), to the Federal Audit Clearinghouse Internet Data Entry System.

5. The supplementary schedule of expenditures of federal awards (SEFA) - the auditor is to provide an "in-relation-to" opinion on the SEFA, based on the auditing procedures applied during the audit of the financial statements.

6. Other reports that may be requested by the Director of Revenue and/or Auditor General or as required by the applicable sections of the general laws.

The management letter should include comments, and/or recommendations beyond those included in the reports described above, on such matters as:

1. Policies, procedures and practices employed by the municipality and by the School Department,

2. Weakness in the internal controls that are not “significant deficiencies,”

3. Use of resources to provide a governmental service in a reasonable, judicious, economical, and efficient manner, and

4. Compliance with state laws pertaining to the municipality and with rules and regulations established by the municipality.

Upon completion of the audit, the management letter will be submitted to the Director of Finance of the Town of Westerly, with copies to the Director of Revenue and the Auditor General.

A copy of the final written correspondence, The Auditor’s Communication with Those Charged with Governance, shall also be delivered to the State Auditor General.

Fraud and illegal acts. Auditors shall be required to make an immediate, written report of all fraud and illegal acts of which they become aware to the following parties:

1. Town Manager

2. Town Council

SPECIAL CONSIDERATIONS

1. Draft copies of all audit reports and management letters shall be submitted to the Director of Finance of the Town and Director of Finance of the School prior to the exit conference so that there will be adequate time for review.

2. The supplementary schedule of expenditures of federal awards and related auditor’s report, as well as the reports on internal control and compliance, are to be issued as part of the annual comprehensive financial report.

3. Difficulties may be encountered in implementing and complying with specific reporting requirements managed by the GASB. The auditor will be responsible to work with the Directors of Finance to ensure proper implementation and compliance with any new pronouncements effective during the contract.

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ADDITIONAL WORK

1. Any amendments to the contract for additional work will be negotiated in good faith. If the parties cannot mutually agree on additional work to be performed and the cost of the work, then the Town, at its option may rescind the option period. All potential additional work outside of the scope of the contract will be discussed in advance of work being completed. Any such amendments must have a written estimate to include the number of hours and dollar amounts required to complete the task and must be submitted to the Director of Finance and Operations, Westerly Public Schools and to the Director of Finance, Town of Westerly.

2. Any additional work agreed to between the Town of Westerly/Westerly Public Schools and the firm shall be performed at the same rates set forth in the schedule of fees and expenses include in the quote.

3. If the firm provides non-audit services, in accordance with Government Auditing standards, it must evaluate whether providing those service creates independence impairment with response to the audit of the Town of Westerly.

DOCUMENTATION RETENTION AND ACCESS TO AUDIT DOCUMENTATION

All audit documentation and reports must be retained, at the auditor's expense, for a minimum of five (5) years, unless the firm is notified in writing by the Town of Westerly of the need to extend the retention period. The auditors will be required to make copies of all audit documentation requested by the Directors of Finance.

In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review audit documentation relating to matters of continuing accounting significance.

As required by Section 45-10-4 of the RI General Laws, it is understood that the contract between the municipality and the audit firm shall require the auditor or the audit firm to release all information obtained during the engagement to the Rhode Island State Auditor General (or his designee). This information includes but is not limited to financial data, analysis, audit documentation, and memorandums. Audit documentation of the independent auditors shall be made available to the Auditor General (or his designee) upon request. The request for such information by the Auditor General shall be responded to promptly. Failure to provide this information shall constitute a breach of contract, and the contract shall give the Auditor General standing in a court of competent jurisdiction to enforce this provision.

NATURE OF AGREED-UPON PROCEDURES SERVICES REQUIRED

The Town of Westerly School Department implemented a Uniform Chart of Accounts (UCOA) as promulgated by the Auditor General and Commissioner of Education in accordance with Rhode Island General Law 16-2-9.4. Each municipal school district, regional school district, collaborative, or charter school, which is required to adopt the UCOA, shall have additional compliance testing procedures designed to assess compliance with UCOA requirements and the entity’s effectiveness of internal control over compliance with those requirements.

See Appendix D for the agreed-upon procedures. Please note that the agreed-upon procedures may be subject to subsequent modification.

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Twenty copies of the final agreed-upon procedures report on the School Department’s compliance with the Uniform Chart of Accounts shall be delivered to the Directors of Finance.

Auditors should have performed the test work necessary to complete the UCOA Agreed-Upon Procedures before issuing the audit report. The district must provide the agreed-upon procedures report to the Rhode Island Department of Education and the Office of the Auditor General at the end of the annual audit or the revised timeline established by the Rhode Island Department of Education and the Office of the Auditor General.

DESCRIPTION OF GOVERNMENT

Background Information

The Town of Westerly, established in 1669, is in the southwest corner of the State of Rhode Island, bounded on the west by the Town of Stonington, Connecticut; on the north by the Towns of North Stonington, Connecticut and Hopkinton, Rhode Island; on the east by the Town of Charlestown, Rhode Island; and on the south by the Atlantic Ocean. Covering 32.5 square miles, Westerly is located approximately 42 miles from Providence, Rhode Island, 60 miles from Hartford, Connecticut, 80 miles from Boston, Massachusetts, and 130 miles from New York City, New York.

According to the 2020 U.S. Census, the Town has an estimated population of 23,539, an increase of 2.51% from 2010.

In 2019, the Town’s median household income was $70,784. Not reflected in the Census average income statistics is the above-average income of the more than 17,000 summer inhabitants of the Town and an additional 25,000 summer day-trippers who contribute to the Town’s economy.

The Town operates under a Home Rule Charter adopted in 1968, which provides for a council/manager form of government. The Town Council, which is comprised of seven members who are elected at large, and serve two-year terms, is vested by the Charter with all legislative powers of the Town. The Charter grants to the Town Council all powers to enact, amend, or repeal ordinances relating to the Town's property, affairs, and government. The Council also has the power to authorize the issuance of bonds or notes by resolution, subject to approval by a majority of electors voting who are qualified to vote on financial matters of the Town.

The general administration of the Westerly Public Schools is directed by a seven-member School Committee that is elected at large for staggered four-year terms. The School Committee is responsible for all policies affecting the public schools in the Town and appoints a Superintendent as its chief administrative agent.

Contact Phone Numbers

Eileen Cardillo

Purchasing Agent Town of

Westerly/Westerly Public Schools ecardillo@westerlyri.gov

401-348-2559 mailto:dbaker@westerlyri.gov

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FUND STRUCTURE

The Town of Westerly account groups included in its financial reporting include, but are not limited to the following:

Fund Type

Number of Individual Funds

Number with Legally Adopted Annual

Budgets

General Fund 1 1

Special Revenue 65 1

Capital Projects 5

Enterprise Funds 3 4

Fiduciary Funds- Private Purpose

Custodial Funds

Internal Service Funds

BUDGETARY BASIS OF ACCOUNTING

The Town of Westerly prepares its budgets on a basis consistent with generally accepted accounting principles with two exceptions. Major encumbrances at year-end are expenditures for budgetary purposes but not for GAAP purposes. The use of fund balance designated for operations is recognized as a revenue on a budgetary basis.

COMPUTER SYSTEMS

The Town uses Tyler/MUNIS application software for all financial applications.

PROPOSED CALENDAR

Request for Proposal Issued April 17, 2025

Due date for Proposal May 8, 2025

Notification of award May 23, 2025

Contract Date June 1, 2025 Audit Planning June 22, 2025

Fieldwork October 10, 2025

Draft Reports November 15, 2025

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DATE FINAL REPORT IS DUE

The Finance Directors shall prepare preliminary trial balances, and all required supplementary schedules by October 3, 2025. The auditor shall provide all recommendations, revisions and suggestions for improvement to the Finance Directors by October 17, 2025. A draft auditor’s report shall be delivered to the Finance Directors by November 15, 2025.

The Finance Directors will complete a review of the draft report as expeditiously as possible. During that period, the auditor should be available for any meetings that may be necessary to discuss the audit reports of the Town and School.

Once all issues for discussion are resolved, the final signed report shall be delivered to the Finance Directors. It is anticipated that this process will be completed, and the final report delivered by November 30, 2025.

The final report, 20 signed copies, and an electronic version of the full report in ‘pdf’ format suitable for posting on the

Town’s website and for the Town of Westerly’s submission to the Auditor General and the state Director of Revenue should be delivered to the Finance Directors at 45 Broad Street, Westerly, RI 02891.

GENERAL REQUIREMENTS

Questions relevant to the preparation of a competitive quote must be submitted in writing to the Purchasing Agent, Eileen Cardillo, Town of Westerly via email ecardillo@westerlyri.gov no later than 12:00 p.m. on April 30, 2025.

Submission of Quotes

The following material (sealed bids submitted to the Purchasing Agent, Westerly Town Hall, 45 Broad St., Westerly, RI 02891) is required to be received by 2:00 p.m. on May 8, 2025, for a proposing firm to be considered:

General Requirements

The quote should demonstrate the qualifications, competence and capacity of the firms seeking to undertake an independent audit of the Town of Westerly in conformity with the requirements of this request for quotes. As such, the substance of quotes will carry more weight than their form or manner of presentation. The quote should demonstrate the qualifications of the firm and of the staff to be assigned to this engagement. It should also specify an audit approach that will meet the request for quotes requirement.

The quote should address all the points outlined in the request for quotes. The quote should be prepared simply and economically, providing a straightforward, concise description of the proposer's capabilities to satisfy the requirements of the request for quotes.

Independence

The firm should provide an affirmative statement that it is independent under the requirements of the American Institute of Certified Public Accountants and Government Auditing Standards.

The firm should also list and describe the firm's professional relationships involving the Town of Westerly or any of its agencies or component units for the past five (5) years, together with a statement explaining why such relationships do mailto:ecardillo@westerlyri.gov

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Licensed to Practice in Rhode Island

An affirmative statement should be included indicating that the firm and all assigned key professional staff are properly licensed to practice in Rhode Island.

Firm Qualifications and Experience

The quote should state the size of the firm, the size of the firm's governmental audit staff, the location of the office from which the work on this engagement is to be performed and the number and nature of the professional staff to be employed in this engagement on a full-time basis and the number and nature of the staff to be so employed on a part-time basis.

Representation that the private auditor has an appropriate internal quality control system in place and has participated in an external quality control review program as required by Government Auditing Standards is required. The firm is also required to submit a copy of the report on its most recent external quality control review report and submit the results of any subsequent review performed during the term of the contract, as required by Government Auditing Standards, with a statement whether that quality control review included a review of specific government engagements. The firm will provide the Auditor General with a copy of its most recent external quality control review report and submit the results of any subsequent review performed during the term of the contract.

Representation that the private auditor is familiar with generally accepted accounting principles for state and local government units and with the generally accepted auditing standards promulgated by the American Institute of Certified Public Accountants; the standards for financial audits set forth in Government Auditing Standards issued by the Comptroller General of the United States; the Single Audit Act of 1984 as amended in July 1996 and the provisions of OMB Guidance 2 CFR part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (OMB Uniform Guidance) - Subpart F – Audit Requirements. The private auditor will conduct the audit and report in accordance with those standards.

The firm shall also provide information on the results of any federal or state desk reviews or field reviews of its audits. In addition, the firm shall list any professional complaints pending or resolved against the firm or any of its partners and provide information on the circumstances and status of any disciplinary action taken or pending against the firm or its partners with state regulatory bodies or professional organizations.

The firm must provide information regarding any lawsuits or claims against the firm, pending or resolved.

An affirmative statement should be included indicating that the firm meets the continuing educational requirements of Government Auditing Standards.

Partner, Supervisory and Staff Qualifications and Experience

The firm should identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement and indicate whether each such person is licensed to practice as a certified public accountant in Rhode Island. The senior accountant in charge of the fieldwork shall be a certified public accountant. The firm also should provide information on the government auditing experience of each person, including information on meeting continuing professional education requirements of Government

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Auditing Standards for the past three (3) years and membership in professional organizations relevant to the performance of this audit.

The firm should provide as much information as possible regarding the number, qualifications, experience and training, including relevant continuing professional education, of the specific staff to be assigned to this engagement. The firm also should indicate how the quality of staff over the term of the agreement will be assured. The firm should identify any sub-contractors or other entity that will be used to provide the professional services sought by the request for quote.

Engagement partners, managers, other supervisory staff and specialists may be changed if those personnel leave the firm, are promoted or are assigned to another office. These personnel may also be changed for other reasons with the express prior written permission of the Town of Westerly. However, in either case, the Town of Westerly retains the right to approve or reject replacements.

Consultants and firm specialists mentioned in response to this request for quotes can only be changed with the express prior written permission of the Town of Westerly, which retains the right to approve or reject replacements.

Other audit personnel may be changed at the discretion of the proposer if replacements have substantially the same or better qualifications or experience. However, the Town of Westerly retains the right to approve or reject replacements.

Similar Engagements with Other Government Entities

For the firm's office that will be assigned responsibility for the audit, list the most significant engagements (maximum of

5) performed in the last five years that are like the engagement described in this request for quote. These engagements should be ranked based on total staff hours.

Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact.

Specific Audit Approach

The quote should set forth a work plan, including an explanation of the audit methodology to be followed, to perform the services required in this request for quotes.

Proposers will be required to provide the following information on their audit approach:

1. Proposed segmentation of the engagement, level of staff and number of hours to be assigned to each proposed segment of the engagement and expected completion date of the audit,

2. Sample sizes and the extent to which statistical sampling is to be used in the engagement,

3. Extent of use of software in the engagement,

4. Type and extent of analytical procedures to be used in the engagement, approach to be taken to gain and document an understanding of the Town of Westerly's internal control structure,

5. Approach to be taken in determining laws and regulations that will be subject to audit test work

6. Approach to be taken in drawing audit samples for purposes of test compliance

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Identification of Anticipated Potential Audit Problems

The quote should identify and describe any anticipated potential audit problems, the firm's approach to resolving these problems and any special assistance that will be requested from the Town of Westerly.

Report Format The quote should include sample formats for required reports. A sample ACFR must be enclosed for the Town's review.

Engagement Quote

The quote should contain all pricing information relative to performing the audit and agreed-upon procedures engagements as described in this request for quotes. The quote should specifically identify the fee for the audit services and the fee for the agreed-upon procedures. The total all-inclusive maximum price to be quote is to contain all direct and indirect costs including all out-of-pocket expenses.

The Town of Westerly will not be responsible for expenses incurred in preparing and submitting the technical quote or the sealed quote. Such costs should not be included in the quote.

The first page of the sealed quote should include the following information:

1. Name of Firm

2. Certification that the person signing the quote is entitled to represent the firm, empowered to submit the quote and authorized to sign a contract with the Town of Westerly.

3. A Total All-inclusive Maximum Price for the 2025 engagement.

4. A schedule of professional fees and expenses presented in the format provided in the attachment (Appendix C) that supports the total all-inclusive maximum price.

5. Out-of-pocket Expenses Included in the Total All-inclusive Maximum Price and Reimbursement Rates

All expense reimbursements will be charged against the total all-inclusive maximum price submitted by the firm.

Rates for Additional Professional Services

If it should become necessary for the Town of Westerly to request the auditor to render any additional services to either supplement the services requested in this request for quotes or to perform additional work because 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 the Town of Westerly and the firm. Any such additional work agreed to between the Town of Westerly and the firm shall be performed at the same rates set forth in the schedule of fees and expenses included in the sealed quote. Firms may quote different prices for certain times of the year.

Manner of Payment

Progress payments will be made based on hours of work completed during the engagement and out-of-pocket expenses incurred in accordance with the firm's quote. Interim billings shall cover a period of not less than a calendar month.

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EVALUATION PROCEDURES

CRITERIA

Quotes will be evaluated using three sets of criteria. Firms meeting the mandatory criteria will have their quotes evaluated and scored for both technical qualifications and price. The following represent the principal selection criteria, which will be considered during the evaluation process.

Mandatory Elements

• The audit firm is independent and licensed to practice in Rhode Island.

• The audit firm's professional personnel have received adequate continuing professional education within the preceding two years.

• The firm has no conflict of interest about any other work performed by the firm for the Town of Westerly.

• The firm submits a copy of its most recent external quality control review report, and the firm has a record of quality audit work.

• The firm adheres to the instruction in this request for quotes on preparing and submitting the quote.

• The firm’s capacity to meet required deadlines (e.g., staffing levels and other government engagements with similar due dates).

• The firm’s track record for meeting contractual deadlines for completion of audits.

• The firm’s experience in producing Annual Comprehensive Financial Reports for municipal clients that have subsequently received a Government Finance Officers Association ‘s Certificate of Achievement Award for their ACFRs.

Technical Qualifications

• General Qualifications and Experience

• Governmental Expertise and Experience

• The firm's experience and performance on comparable government engagements including the issuance of an annual comprehensive financial report.

• The quality of the firm's professional personnel to be assigned to the engagement and the quality of the firm's management support personnel to be available for technical consultation.

Audit Approach

• Adequacy of proposed staffing plan for various segments of the Engagement.

• Adequacy of sampling techniques.

• Adequacy of analytical procedures.

• Adequacy of number of hours proposed for engagement

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Price

COST WILL NOT BE THE PRIMARY FACTOR IN THE SELECTION OF AN AUDIT FIRM.

An evaluation committee will be comprised of individuals knowledgeable about auditing and financial reporting matters.

Quotes will be evaluated using the following scoring weights resulting in a maximum score of 100 points:

Maximum Points

Overall qualifications and experience of the firm and the specific engagement personnel to be assigned focusing on experience with governmental entities and specific line of business or services provided by the Town of Westerly

Overall audit approach and audit strategy and firm capacity to perform engagement Within the specified timeframe (prior experience of the firm in meeting timelines should be factored in here)

Audit Fees – See formula for points awarded for audit fees (*) 30 30

Maximum 100

* Evaluation technique – audit fees

Audit fee score = (lowest qualified bid/bid for firm being evaluated) X 30 points

Example: Assuming 3 bids received were: (firm A) - $40,000, (firm B) - $46,000, (firm C) - $50,000

Firm A (the lowest bidder) awarded 30 points $40,000/$40,000 X 30 points = 30

Firm B awarded 26 points $40,000/$46,000 X 30 points = 26 Firm C awarded 24 points $40,000/$50,000 X 30 points = 24

An evaluation grid will be prepared summarizing the scoring by each member of the evaluation committee and the composite ranking. If any firm is disqualified and therefore not evaluated, the reason for such action shall be documented.

FINAL SELECTION

The Town Council will select a firm based on the recommendation of the Town Manager in conjunction with the Finance Directors and approval by the Rhode Island Auditor General’s Office.

RIGHT TO REJECT QUOTES

The Town of Westerly reserves the right without prejudice to reject any or all proposals.

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APPENDIX A - FORM FOR PROPOSER GUARANTEES

I. The proposer certifies it can and will provide and make available, at a minimum all services set forth in Scope of Work to be Performed, Auditing Standards to be Followed, Reports to be Issued, and Nature of Agreed-Upon Procedures Required.

Signature of Official:

Name (typed):

Title:

Firm:

Date:

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APPENDIX B – FORM FOR PROPOSER WARRANTIES

A. Proposer warrants that it is willing and able to comply with State of Rhode Island laws, with respect to foreign

(non-state of Rhode Island) corporations.

B. Proposer warrants that it will maintain in full force at all times professional liability to include errors and omissions in the minimum amount of $1 million per occurrence and supply evidence of the same to the Town, listing the Town as additional insured. In addition, the proposer shall also supply evidence of Workers Compensation insurance at the

State of RI minimum required levels.

C. Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the express written permission of the Town of Westerly.

D. Proposer warrants that any sub-contractors, co-proposers, or any other entity providing professional services under the engagement will be subject to, and will have met, all the same applicable requirements as the proposer.

E. Proposer warrants that all information provided by it in connection with this proposal is true and accurate.

Proposer further understands that any representations made with the submission will be relied upon and if proven to be false will be grounds for termination of the contract, if awarded. False representations will also be grounds for forfeiture of all payments under the contract. This will not limit the municipality from seeking any other legal or equitable remedies.

F. Proposer warrants that there are no client conflicts that would inhibit the ability to perform the audit in accordance with professional standards.

G. Proposer warrants that it is independent under the requirements of the American Institute of Certified Public Accountants and Government Auditing Standards.

Signature of Official:

Name (typed):

Title:

Firm:

Date:

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APPENDIX C – FORM FOR SCHEDULE OF PROFESSIONAL FEES AND EXPENSES

Town Hours

School Hours

Federal Award Hours

School

UCOA

Agreed- Upon

Procedures

Total Hours

Standard Hourly Rates

Quoted Hourly Rates

Total

Partners

Managers

Senior

Staff

Other (specify):

Subtotal

Out of Pocket Expenses

Total all-inclusive maximum price for FY2025 $

Town $

School $

School UCOA Agreed-Upon Procedures $

Total all-inclusive maximum price for FY2026

School School UCOA Agreed-Upon Procedures

Total all-inclusive maximum price for FY2027

School School UCOA Agreed-Upon Procedures

Note: The rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the total all-inclusive maximum price.

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APPENDIX D - UCOA ANNUAL COMPLIANCE TESTING REQUIREMENTS

EXECUTIVE SUMMARY:

The Office of the Auditor General (OAG) and the RI Department of Education (RIDE) agree to and acknowledge that the procedures (enclosed herein) are appropriate to meet our purposes. The agreed-upon procedures (AUP) that were effective for fiscal 2023 engagements will continue to be effective for fiscal 2024 engagements. Please note, the only revision made to this document was an update to the RIDE contact information below. The reconciliation template is only applicable for school districts that do not have a fiscal year end of June 30, 2024, charter schools, collaboratives. This reconciliation is not applicable for school districts that present a three-way reconciliation (i.e., financial statements/municipal transparency portal/UCOA) in the audited financial statements as supplementary information.

Please submit a copy of the UCOA Agreed-Upon Procedures Report to both the OAG and RIDE:

OAG RIDE

lori.gelfuso@rioag.gov Santiago.Guerrero@ride.ri.gov

Lori Gelfuso Santiago Guerrero, Ph.D.

Office of the Auditor General RI Department of Elementary & Secondary Education

33 Broad Street, Suite 201 255 Westminster Street Providence, RI 02903 Providence, RI 02903

(401) 222-2435 (401) 222-8953 mark.dunham@ride.ri.gov

Mark Dunham RI Department of Elementary & Secondary Education 255 Westminster Street Providence, RI 02903

(401) 222-4647 mailto:lori.gelfuso@rioag.gov mailto:Santiago.Guerrero@ride.ri.gov mailto:mark.dunham@ride.ri.gov

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OVERVIEW:

Each municipal school district, regional school district, collaborative, State school, or charter school, which is required to adopt the Uniform Chart of Accounts (UCOA), shall have additional compliance testing procedures designed to assess compliance with UCOA requirements and the entity’s effectiveness of internal control over compliance with those requirements. The auditors engaged to perform the annual audit of the entity shall also be engaged to report on their tests of compliance with UCOA requirements in an agreed-upon procedures compliance attestation format.

A minimum sample of transactions shall be selected and tested for compliance with UCOA provisions. Additionally, selected UCOA compliance requirements shall be included within the agreed-upon procedures compliance work program.

The municipal school district, regional school district, collaborative, State school, or charter school shall provide the agreed-upon-procedures report along with the entity’s audited financial statements to the Rhode Island Department of Education (RIDE) and the Office of the Auditor General by December 31 or at the conclusion of the annual audit if an extension has been approved by the Auditor General. For school districts, regional school districts, collaboratives, State schools, or charter schools which have adopted a fiscal year end other than June 30, the agreed upon procedures report shall also be provided by December 31 for the activity related to the year ended on the preceding June 30.

COMPLIANCE TESTING REQUIREMENTS:

Auditors shall follow the guidance included in the AICPA Codification of Statements on Standards for Attestation Engagements– AT- C Section 105, Concepts Common to All Attestation Engagements; AT-C Section 215, Agreed-Upon Procedures Engagements; and AT- C Section 315, Compliance Attestation. The auditors shall comply with the 2018 Revision of Government Auditing Standards requirements for agreed-upon procedures engagements; specifically, paragraphs 7.78 through 7.85.

1. A minimum sample of randomly selected expenditure transactions for the municipal school district, regional school district, collaborative, State school, or charter school shall be tested for compliance with UCOA coding requirements.

Select a sample of 35, 45, or 60 (see below) transactions from the universe of all expenditures in the final UCOA format upload file for the fiscal year as reported to the Rhode Island Department of Education (RIDE). A detailed transaction level file should be obtained from the entity’s accounting system to correspond with the final UCOA upload file provided to RIDE for the preceding fiscal year. RIDE will provide a Validation Totals Report to each school district, collaborative, State school, and charter school to confirm the final upload file information. The sample of transactions to be tested for compliance with UCOA coding shall be selected randomly from the detailed transaction file for the fiscal year.

Alternatively, the auditor may obtain a preliminary fiscal year file from the reporting entity’s accounting system for purposes of selecting a sample of transactions to test. When a preliminary file is used for selecting the sample, the auditor will be required to reconcile changes from the preliminary file to the final validated upload file and determine the significance of any changes and assess the validity of the sample.

Sample size shall be determined as follows:

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Smaller school districts, regional school districts, collaboratives, State schools, or charter schools having aggregate fiscal year expenditures of less than $5 million shall utilize a minimum sample size of 35 transactions to be tested for UCOA coding compliance.

School districts, regional school districts, collaboratives, State schools, or charter schools, having aggregate fiscal year expenditures greater than $5 million but less than $50 million, shall utilize a minimum sample size of 45 transactions to be tested for UCOA coding compliance provided there are no significant deficiencies and material weaknesses in internal control over financial reporting related to the accounting and financial reporting practices as reported in the current and prior audit.

School districts, regional school districts, collaboratives, State schools, or charter schools with expenditures greater than $5 million which also have significant deficiencies and material weaknesses in internal control over financial reporting related to the accounting and financial reporting practices as reported in the current and prior audit shall utilize a minimum sample size of 60 transactions.

School districts, regional school districts, collaboratives, State schools, or charter schools, having aggregate fiscal year expenditures greater than $50 million, shall utilize a minimum sample size of 60 transactions to be tested for UCOA coding compliance.

Examine supporting vendor invoices, journal entries, and other supporting documentation to determine if the expenditure has been appropriately classified based upon UCOA classification requirements included in the Uniform Chart of Accounts guidance for the fiscal year.