ESBD_399396_1740605760094_RFQ Audit.pdf

Request for Qualifications

Annual Financial Audit Services

(RFQ #25-001)

Table of Contents

1. GENERAL OVERVIEW OF CENTER ISD

2. SCOPE OF WORK AND BACKGROUND INFORMATION………………………….………… 3

3. STATEMENT OF QUALIFICATIONS CONTENT

4. STATEMENT OF REQUIREMENTS……………………………………………………………..10

5. PROPOSAL EVALUATIONS

6. BOARD OF TRUSTEES APPROVAL…………………………………………………………….11

7. PROPOSAL SUBMISSION INSTRUCTIONS

CENTER INDEPENDENT SCHOOL DISTRICT

107 PR 605

Center, TX 75935

1. GENERAL OVERVIEW OF CENTER ISD

Center ISD is a K-12 public education school district set in the heart of the East Texas Piney Woods.

Located at the geographical center of Shelby County, Center is the county seat and Center ISD is the largest school district in the county. Rated a Conference 4A district in UIL athletic and academic competition, Center ISD has 5 campuses and over 2500 students.

For additional information about Center ISD, including demographics and other facts and figures, please refer to the District’s website at www.centerisd.org.

2. SCOPE OF WORK AND BACKGROUND INFORMATION

2.1. BACKGROUND INFORMATION

Auditing requirements for Texas' public-school Districts are contained in the Texas Education Agency (TEA) Financial Accountability System Resource Guide (FASRG), which is the authoritative document, adopted by reference as a rule of the State Board of Education, through 19 Texas Administrative Code, Section 109.41.

The District’s 2024-2025 adopted budgeted expenditures for the General, Food Service, and Debt Service Funds is $32,388,240. The District expends federal financial assistance for numerous programs, including but not limited to the National School Lunch Program, School Breakfast Program, ESEA Title I Part A - Improving Basic Programs, ESEA Title II Part A - Supporting Effective Instruction, Title IV, Part A, ESEA Title III Part A – ELA, IDEA-Part B Formula and Preschool, and Perkins V: Strengthening Career and Technical Education for the 21st Century. The total expenditures of federal awards for the year ended August 31, 2024 was $2,103,829.

For financial transactions, the District utilizes Ascender software.

The District received a Superior (A) rating by the Texas Education Agency’s Schools FIRST (Financial Integrity Rating System of Texas) program for the 2022-2023 fiscal year, the most current rating year.

http://www.centerisd.org/

More detailed information concerning Center Independent School District and the District’s Comprehensive Annual Financial Report for the fiscal year ended August 31, 2024 can be found on the District’s website at www.centerisd.org.

2.2. PURPOSE OF THE AUDIT

The purpose of the Request for Qualifications is to obtain the services of a public accounting firm for the annual audit for fiscal year ending August 31, 2025. The organization-wide audit will encompass the financial statements as required by GASB Statement No. 34 and the FASRG for the District for the fiscal year ending August 31, 2025. The audit is to be performed in accordance with generally accepted auditing standards and generally accepted government-auditing standards contained in the FASRG.

The financial statement audit is to determine whether (1) the financial statements present fairly the financial position, results of operations, and cash flows or changes in financial positions in accordance with generally accepted accounting principles, and (2) whether the District has complied with laws and regulations for those transactions and events that may have a material effect on the financial statements. The financial related audit will also include determining whether

(1) financial reports and related items are fairly presented, (2) financial information is presented in accordance with established or stated criteria, and (3) the school district has adhered to specific financial compliance requirements.

As a part of the audit of the basic financial statements, the annual audit will also include obtaining an understanding of the school district's internal control and reporting any significant deficiencies or material weaknesses relating to the internal control systems coming to the attention of the auditors. To comply with 2CFR, Subpart F2, CFR, Subpart F, a study and evaluation of internal control will include internal accounting and administrative controls for all major federal financial assistance programs, in accordance with standards for risk assessment for major federal financial assistance. Any material weakness noted during the study and evaluation of internal accounting and administrative controls and other kinds of noncompliance and questioned costs will be reported in compliance with the Single Audit Act.

As part of the audit of the financial statements, transactions and records pertaining to federal programs will be tested for material compliance with federal laws, rules, and regulations and all instances of noncompliance will be reported to the school district.

The audit will include the performance of certain audit procedures for the purpose of reviewing the accuracy of fiscal information provided by the District through the Public Education Information Management System (PEIMS/TSDS), as required by the Texas Education Code (TEC), Section 44.008(b).

http://www.centerisd.org/

The audit will include procedures applicable to compensatory education funds as required by Version 19 of the FASRG, if required.

2.3. OTHER REQUIREMENTS

2.3.1. It is requested that the interested accounting firm include a detailed description of each step in the audit approach that will be taken in the audit engagement including estimated hours for each.

2.3.2. The firm upon being awarded this engagement will be expected to review the detailed audit work plan and schedule with the Chief Financial Officer prior to commencing the audit assignment each year.

2.3.3. The firm, as part of the audit engagement, will assist the District with nonattest services related to the pension and OPEB-related government-wide journal entries and note disclosures.

2.3.4. All working papers 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 District of the need to extend the retention period. The auditor will be required to make working papers available, upon request, to auditors from the TEA, the U.S. Government Accountability Office, or other applicable governmental agencies; they are not otherwise considered to be records open to the general public.

2.3.5. The District intends to sell bonds from time to time, which may require the audited financial statements and Auditors opinion to be printed in total or as a part of the section of or addendum to the official statement for bond issues. Also, certification may be required for interest and sinking fund reserve balances as a point in time other than year-end.

2.3.6. The accounting firm should provide an annual audit report in a form acceptable to the TEA and within the time frame stipulated in the TEC, 44.008(d), of 150 days subsequent to the close of the fiscal year (January 28th for August 31st fiscal year) for which the audit was made.

2.4. INDEPENDENT AUDITOR

The interested accounting firm must demonstrate the capability to perform the annual audit in accordance with generally accepted government auditing standards and state board of education auditing rules. Public accounting firms that have performed annual audits for similar entities are encouraged to file a proposal.

2.5. TERM OF THE AUDIT ENGAGEMENT

The contract for audit services based upon Board approval of the selected responder will be for the fiscal year ending August 31, 2025. The contract will begin upon award by the Board of Trustees.

The District may annually request to extend this agreement for up to four additional years through fiscal year ending August 31, 2029, following satisfactory delivery of the services specified in the proposal and engagement letter.

2.6. DISPUTE RESOLUTION

Disputes concerning the terms of contracted services that cannot be resolved will be brought before an independent mediation center, whose decision will be binding upon both parties.

3. STATEMENT OF QUALIFICATIONS CONTENT

3.1. COVER LETTER

See conditions for submission of proposal in Section 3.5.

3.2. TECHNICAL COMPONENT

To describe clearly the public accounting firm's understanding of the work to be done, the interested accounting firm will:

1. Provide a definition of the term "generally accepted government auditing standards" with clear distinctions between these standards and generally accepted auditing standards for nongovernmental engagement;

2. Explain the accounting firm's approaches to performing an annual audit, including the methodology, nature, timing and extent of audit procedures to be performed;

3. Describe how the approach to performing the audit will be affected if this were a multiyear contract; and,

4. Make a statement concerning the independence of the interested accounting firm, including direct and indirect financial interest, and the relationship of the proposed audit team to employees of the District and any of the board members.

3.3. MANAGEMENT COMPONENT

The interested accounting firm will furnish satisfactory evidence of capability to provide in a professional and timely manner the services stated in the Request for Qualifications. To meet this requirement:

1. Provide the name of the external quality control review organization of which the interested accounting firm is a member and the interested accounting firm's length of membership; state the review organization's planned frequency of peer reviews.

2. State whether the firm has received a peer review and whether in the most recent review an unqualified report was issued.

3. State whether the interested accounting firm is a national, regional, or local public accounting firm.

4. Provide evidence that the interested accounting firm has experience in performing Texas public school district/governmental entity audits; list current and past audit clients and number of years of audit services were provided; state the average daily attendance of the public schools on the list.

5. State whether the interested accounting firm is currently under the terms of a public or private reprimand by the Texas State Board of Public Accountancy and licensing boards of other states.

6. Describe the interested accounting firm’s level of participation in and communication with such organizations as the Texas Education Agency (TEA) and Texas Association of School Business Officials (TASBO).

7. Describe the proposed audit team, in terms of job positions in the firm.

8. List names of staff member(s) who will direct the overall audit throughout the duration of the engagement, as well as, those staff members who will be responsible for supervisory, planning, directing, and conducting substantial portions of the fieldwork or reporting on this audit engagement. Include the educational background of all staff members named, professional licenses held, and number of years of experience in audits of governmental organizations and Texas public schools.

9. Describe continuing professional education in governmental accounting and auditing received by the proposed audit team during the last four years.

10. Provide the names and qualifications of any needed outside specialists and consultants that will assist the interested accounting firm's staff members.

11. Describe the level of assistance that will be expected from District personnel, including internal audit staff. The District will provide the trial balance and prepare supporting schedules for auditor review prior to the interim audit fieldwork and after the close of the fiscal year, as requested by the auditors.

12. Provide evidence of the firm’s ability to provide the services outlined in this Request for

Qualifications.

3.4. TASK/ACTIVITY PLAN & ESTIMATED FEE

The interested accounting firm will specify budgeted hours, time lines and sequence for audit procedures, and names of staff to be assigned. Work performed below the audit senior level may be referred to by title rather than name in the task/activity plan.

Estimated fees – state the estimated fees for the annual audit for the fiscal year ending August 31, 2025. Also, state the estimated fees for the subsequent four years, under current conditions, if the District exercises the extension of the contract. Describe any normal process for evaluating the fee from year to year.

Fiscal Year Audit Fee Estimate

3.5. CONDITIONS FOR SUBMISSIONS OF PROPOSAL

All qualifications in response to this request must meet the following conditions to be considered:

1. Qualifications must include a cover letter clearly stating the name of the firm and the name, address, and telephone number of the interested accounting firm's representative.

2. Qualifications must address each of the audit requirements as stated in this Request for Qualifications.

3. The District reserves the right to reject any and all qualifications, and to negotiate portions thereof. Qualifications that address only part of the requirements contained in this Request for Qualifications will not be considered.

4. The District reserves the right to select any proposal, considering the quoted estimated fee and other factors.

5. The interested accounting firm shall furnish such additional information that the District may reasonably require.

6. The District will not be liable for any cost incurred in the preparation of qualifications.

7. The District may ask interested accounting firms to send a representative for an oral interview prior to Board of Trustee approval of a proposal. The District will not be liable for the costs incurred by the interested accounting firm in connection with such interview.

8. The District and interested accounting firms may enter into discussions and revisions of proposal, as necessary. Discussions/negotiations may be conducted with interested accounting firms who are deemed to be within the final competitive range. However, the District reserves the right to award a contract without discussions/negotiations. The best and final proposal may be required as early as 24 hours after completion of negotiations/discussions.

9. Qualifications must be signed by an authorized individual to contractually bind their firm when submitting the qualifications. Failure to sign the qualifications will be considered as a “mistake in qualifications,” and the qualifications will be rejected as “non-responsive.”

10. By submitting a proposal, the interested accounting firm affirms that its company, corporation, firm, partnership, or individual has not prepared this proposal in collusion with any other bidder and that the contents of this proposal as to prices, terms, or conditions have not been communicated by the undersigned or by any employee or agent to any other person or firm engaged in this type of business prior to the official opening of this proposal.

11. Upon notification of potential selections for award, the person or entity submitting this proposal must give notice to the District if the person or an owner or operator of the business entity has been convicted of a felony. The notice must include a general description of the conduct resulting in this conviction of a felony (this requirement does not apply to a publicly held corporation).

In the event that any one or more of the provisions contained in this Request for Qualifications (or resulting purchase order) shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, such provisions shall not affect any other provision hereof, and this Request for Qualifications (or any resulting purchase order) shall be construed as if the invalid, illegal, or unenforceable provision(s) had never been contained herein.

4. STATEMENT OF REQUIREMENTS

1. The independent auditor will provide one (1) copy in PDF format of the audit opinion letter and the Single Audit Report.

2. The independent auditors will review the District’s ACFR and provide interpretations of the Government Finance Officers Association of the United States (GFOA) and the Association of School Business Officials (ASBO) requirements for the Certificate of Excellence in Financial Reporting awards. The preparation of the ACFR and the required TEA Annual Financial Report and data submission shall be the responsibility of the District.

3. The independent auditor will be expected to present the audit report to the Board of Trustees at the December meeting of the board of trustees or sooner.

4. The independent auditor is strongly encouraged to provide a management letter containing comments oriented toward constructive improvements. Copies of selected audit working papers will be provided as requested by the District and as provided for in the engagement letter.

5. PROPOSAL EVALUATIONS

This is a request for qualifications, and as such, award will be made to the accounting firm best qualified to serve the District. The District shall rank the responses it deems to be in the best interest of the District through an evaluation process, subsequently negotiating the terms and conditions for a contract arrangement.

The District anticipates that the evaluation process may include multiple levels of evaluation, as an example, but not limited to:

• Step 1: Initial review of the Qualification responses by the District’s Evaluation Team;

• Step 2: Interview(s) and/or presentation(s) of top two ranked Qualification response(s) from Step

1, if necessary; and

• Step 3: Administrative/Reference review of finalist(s) from Step 2.

The District’s evaluation team will include but is not limited to the Chief Financial Officer, Assistant Superintendent, and Superintendent.

It should be understood that while the total score is a significant factor, the evaluation team may consider other factors in making the final selection.

5.1. Step 1 Evaluation: Step 1 entails the evaluation of written responses submitted by Providers meeting the requirements referenced in this Solicitation. In Step 1, each vendor’s response will be reviewed for completeness and adherence to the submission requirements and will be ranked based on the evaluation criteria referenced in the table below. The District will be the sole judge of the quality of responses and reserves the right, at its own discretion, to disqualify any vendor that submits a response that is incomplete, does not properly adhere to the solicitation requirements, and/or clearly does not meet the needs of the District. A Vendor’s response that is disqualified will not be scored nor ranked.

Criteria used to evaluate the interested accounting firm's qualifications are shown in Attachment A.

Step 1 Evaluation Criteria

Description Points Technical experience of the firm 25 Characteristics of the staff to be assigned 30 Clear understanding of the work to be performed 15 Prior experience with District staff and current/past customer satisfaction

Total points available for Step 1 100

5.2. Step 2 Evaluation: (Top two ranked responses, if necessary) The District, at its sole discretion, may select the top two ranked responders to participate in an on-site (or remote) interview process to clarify various aspects of a provider’s responses and/or to further evaluate the qualifications and experience of the Responder.

Step 2 Evaluation Criteria

Description Points Presentation/Interview Assessment, best connection/relationship. (Top Two Ranked Responders, if necessary)

Total points available for Step 2 10

6. BOARD OF TRUSTEE APPROVAL

The Board of Trustees expects to engage an audit firm for five years. However, the Board of Trustees expressly reserves the right to reject all bids, to review the relationship on an annual basis, and to formally approve each year’s extension. The Center Independent School District reserves the right to cancel any contract resulting from this Request for Qualifications at any time, for any reason (or for no reason) with a thirty-day (30) written notice to the firm. The firm may cancel any resulting contract, at any time for any reason, or for no reason with a sixty-day (60) written notice. Any notice required or permitted to be delivered to the firm shall be deemed to be delivered when mailed by registered or certified mail, return receipt requested, postage prepaid, and addressed to the bidder’s address appearing on the face of the Request for Qualifications (or as subsequently revised or changed). Any compensation due the firm will be limited to items received and/or services performed and accepted by the District. It is possible that the board could terminate the relationship at any time. However, the Board of Trustees does not desire or expect that to be the case and assumes that a long and satisfactory relationship will be the experience

7. PROCEDURES FOR SUBMITTING PROPOSALS

A. Delivery

Responses to the Request for Qualifications should be addressed to:

Valerie Moore Chief Financial Officer Center Independent School District

107 PR 605

Center, TX 75935

(936) 598-5642

Qualifications must be received no later than 9:00 a.m., March 5, 2025. Qualifications received at the CISD Business Office after the time and date specified above will not be considered and will be filed unopened.

Oral or telegraphic qualifications transmitted via the district’s facsimile machine are not acceptable.

Qualifications must be submitted to the district in a sealed envelope.

DO NOT FAX OR EMAILYOUR QUALIFICATIONS!

B. Number of Copies of Qualifications

Submit FOUR (4) copies of the qualifications. The qualifications are to be bound and sealed.

-- End of Solicitation document -- Attachment A referenced in Section 5.1 above is included in the following page. —

Attachment A

Evaluation Criteria

PROFESSIONAL QUALIFICATIONS

The evaluation of professional qualifications of the interested accounting firms will be based on the following criteria.

I. Mandatory Criteria

Qualifications will not be considered for further evaluation unless there is compliance with all of the following criteria. The interested accounting firm:

1. Must be an independent auditor properly licensed for public practice.

2. Must meet the independence standards of Government Auditing Standards, U.S.

Government Accountability Office (GAO).

3. Must have experience in the annual financial audit and the preparation of financial statements for governmental entities that meet the requirement of statements issued by the Governmental Accounting Standards Board.

4. Must not have a record of substandard work.

5. Must submit a proposal meeting all the requirements of the Request for Qualifications.

II. Technical Criteria

Qualifications, which have met each of the criteria in Section I above, will be evaluated on the following criteria:

A. Technical experience of the firm:

1. Auditing experience in Texas public schools. (0-15 points)

2. Auditing experience in government entities. (0-5 points)

3. Level of participation in and communication with such organizations as the Texas

Education Agency and Texas Association of School Business Officials. (0-5 points)

B. Characteristics of the staff, including consultants to be assigned to the audit:

1. Size and structure of the firm, including audit staff positions. (0-5 points)

2. Qualifications of supervisory personnel, consultants, and the field audit team. (0-15 points)

a. Education, including continuing education courses taken during the past two years.

b. Years and types of experience.

3. General direction and supervision to be exercised over the audit team by the firm's management personnel. (0-10 points)

C. Clear understanding of the work to be performed:

1. Comprehensiveness of the audit work plan. (0-5 points)

2. Realistic time estimates of each major segment of the work plan, and the estimated number of hours for each staff level including consultants. (0-10 points)

D. Prior Experience and Customer Satisfaction

1. Prior experience conducting the District’s annual audit. (0-5 points)

2. Current and or past customers of the firm satisfaction with the level of service provided, per references. (0-25 points)

III. Presentation/Interview (If Necessary)

1. Interview. (0-10 points)