Calhoun Falls Forensic.pdf

Request for Proposal Forensic Accounting Services Town of Calhoun Falls, South Carolina

Introduction

The SC Office of the State Auditor (OSA) is requesting proposals for forensic accounting services for the Town of Calhoun Falls, South Carolina. Interested firms should submit a proposal by August 30, 2024.

Questions regarding this request for proposal should be directed to

George Kennedy State Auditor South Carolina Office of the State Auditor gkennedy@osa.sc.gov

Background

The Town of Calhoun Falls, South Carolina is located in Abbeville County, near Lake Russell and the state border with Georgia. A town of approximately 1,700 residents, it has been experiencing financial issues for several years.

Financial reporting has not been timely, and the Town is in arrears in its payments to vendors, including those critical to its ability to continue to provide services such as water and sewer. The Town has not issued audited financial statements for fiscal year 2020 through 2023 as required by State law, making it difficult to determine how or why the Town is experiencing financial issues. There are also concerns about the effectiveness of financial processes and controls.

The South Carolina legislature adopted a proviso in its fiscal year 2025 budget that directed the State Auditor, in coordination with the State Inspector General, to contract for a forensic engagement of the Town of Calhoun Falls.

Scope

Conduct a forensic accounting engagement on the financial activity of the Town of Calhoun Falls for fiscal years ended June 30, 2020 through June 30, 2024 to determine why the Town is experiencing financial difficulties, including investigating:

a. The completeness and accuracy of the books and records

b. Completeness, accuracy and timeliness of financial reporting, including to the mayor and Town council

c. Adherence to documented financial policies and procedures, including procurement of goods and services

d. Proper expenditure of revenues restricted as to use

e. Appropriateness or allowability of expenditures, including those made by purchasing card

f. Purpose and propriety of transfers between the general fund and the proprietary fund

g. The extent to which the Town is in arrears to vendors and why

h. Any other material drivers of the Town’s financial issues

The report resulting from this engagement should include findings and recommendations for corrections to the Town’s books and records and/or other actions necessary to ensure completeness and accuracy of financial information, including recommendations for controls or procedures to be considered for implementation.

Town Resources

The Town employs a town clerk and also contracts with third parties for assistance with monthly financials and budgeting. Adoption of a budget, processing of financial information, and issuance of internal and audited financial reports has not been timely.

Status Meetings

Meetings with the State Auditor and Inspector General to discuss the engagement status will take place on a schedule determined at the beginning of the engagement.

Interim and Final Report

Interim reports should be provided to the State Auditor on a mutually agreed basis. A final report is due no later than June 1, 2025. The successful proposer may also be requested to present the results of their engagement to the Town’s governing body and/or other stakeholders.

Proposal Requirements

Please provide the following information in a response:

1. Profile of the proposer

2. Summary of proposer’s experience and qualifications, including a description of at least three recent engagements similar in scope

3. Identification of the proposed engagement team with experience and background of each member

4. A planned approach to the engagement, including use of technology

5. Descrip on of any forensic accoun ng engagement that the firm was unable to complete within the last three years and why

6. A descrip on of business li ga on brought against the firm or any of its officers or principals by any en ty for fraud, malprac ce, misrepresenta on, negligence, or similar cause of ac on within the last three years

7. Name and contact information of three current or former clients who have used the firm for similar forensic services. To the extent possible, include those served by members of the proposed engagement team.

8. The hourly rate by staff classifica on proposed for the engagement team, and an es mated total maximum fee to accomplish the items in the Scope. Include out of pocket expenses such as travel or technology costs in the total es mated fee.

Proposal Submission

Firms interested in responding to this RFP should submit a proposal electronically (in PDF format) no later than 5:00 PM (Eastern) to officeofstateauditor@osa.sc.gov. Proposals must include responses to the information requested in the Proposal Requirements section of this RFP.

Terms and Conditions

Requirements to which all offerors must agree By submitting a proposal, offeror agrees to or confirms the following:

a) A contract resulting from this RFP will be subject to South Carolina law.

b) A contract resulting from this RFP will not be subject to binding arbitration.

c) Neither the State of South Carolina nor its agencies indemnify, defend, or pay attorneys’ fees on behalf of any party with which the State or its agencies contract.

d) Offeror does not discriminate in the employment of persons upon the basis of race, color, creed, national origin, sex, age, or physical handicap.

e) Offeror will provide a drug free workplace during the term of this contract in accordance with the South Carolina Drug Free Workplace Act, SC Code 44‐107‐10.

Compliance with S.C. State Ethics Act Offerors are required to comply with applicable provisions of the South Carolina State Ethics Act.

Subcontractors Offeror must fully disclose any proposed subcontracting of any of the required services.

Billings and Payment The Office of the State Auditor is responsible for payment of engagement fees. All invoices are to be submitted to OSA. Services that may increase the fee above the maximum must have prior written approval of OSA.

Progress billings should be based on costs incurred. Final payment will not be made until contractual obligations have been met, including delivery of final reports. OSA reserves the right to hold progress billings should issues arise in the delivery of services or if there is a reason to believe billings are being submitted in advance of work being completed. A federal Employer Identification Number (EIN) must be provided with each invoice.

Proviso

117.200. (GP: Town of Calhoun Falls Audit) Of the funds appropriated in this act and/or carried forward from the previous fiscal year, the Office of the State Auditor, in coordination with the Office of the Inspector General, is directed to contract a firm to conduct a forensic audit on the finances of the Town of Calhoun Falls from Fiscal Year 2019‐20 through Fiscal Year 2023‐24. The State Auditor shall oversee the auditing process and provide interim and final reports to the Town of Calhoun Falls, the Abbeville County Delegation, the Chairman of the Senate Finance Committee, and the Chairman of the House Ways & Means Committee upon completion.