ESBD_491664_1773678301160_Addendum 1 5510000821 TAFA.pdf

Texas Department of Agriculture

Addendum Number: 1 Dated: 03/16/2026

Solicitation Number: 5510000821

Solicitation Title: TAFA Financial Audit

Due Date/Deadline: 03/20/2026

Purchaser: Alfredo Aguirre Jr.

PURPOSE OF ADDENDUM: Questions and Answers

Except as provided herein, all terms and conditions of the document referenced herein, remain unchanged and in full force and effect. The following are specifications to this solicitation. This Addendum may be attached to and form a part of the referenced solicitation document and any resulting awarded contract and may be considered in your response.

1. Questions and Answers

Respondent’s Question Answer

1 Will the auditor be responsible for preparing and editing the financial statements and schedules?

Yes

2 If the auditor is to prepare the financial statements, please expand on how TDA provides the auditor the information for preparation of the financial statements.

TDA will provide all the needed/requested files/information for the CPA firm to prepare the financial statements.

3 Please provide a copy of the Authority’s most recent audited financial statements and the report/communication of any prior year findings.

This will need to be requested through the public information office.

https://texasagriculture.gov/Home/Site- Policies/Public-Information-Policy

4 The Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial

In prior years, the Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in

Statements Performed in Accordance With Government Auditing Standards covers internal control over financial reporting.

Has this report been provided in the past for purposes of the “written review of the Authority’s accounting system and financial procedures as well as an evaluation of its financial reporting internal controls”? If not, could you please elaborate on the scope and reporting requirements for this written review?

Accordance with Government Auditing Standards has been issued as part of the annual financial statement audit. That report addresses the auditor’s consideration of internal control over financial reporting and compliance as required under Government Auditing Standards.

The reference in the scope of work to a “written review of the Authority’s accounting system and financial procedures as well as an evaluation of its financial reporting internal controls” is intended to align with, and not expand beyond, the procedures typically performed as part of the Government Auditing Standards audit.

5 Since the Department maintains the books and records for the Authority, please clarify if the review of the Authority’s accounting system is intended to be a review of CAPPS.

See Section I, Subsection 5 Scope of Work/Specifications.

The audit will include sample reviews of all transactions recorded in the books and records of the Authority covering all accounts and resolutions for the active programs of the Authority for the period beginning September 1 and ending August

31. To include CAPPS system data.

6 The Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards covers internal control over financial reporting.

Has this report been provided in the past for purposes of the “written review of the Authority’s accounting system and financial procedures as well as an evaluation of its financial reporting internal controls”? If not, could you please elaborate on the scope and reporting requirements for this written review?

Examples of information that may be requested include, but are not limited to:

Schedules or summaries of program revenues, expenditures, or loan activity associated with the Authority’s programs

Details related to outstanding loans, guarantees, or other financial assistance administered by the Authority

Supporting schedules necessary for inclusion in CAFR notes or statistical tables

Confirmation of balances or program activity that must be reported in the Authority’s annual financial reporting

The intent is to provide any supplemental data required for CAFR preparation and reporting that is not already contained within the Authority’s independently audited financial statements.

7 The stated deliverables include a statement of functional expenses and a statement of investments, temporarily restricted assets, fixed assets, and contributions receivable”. Since these

The Authority operates as a governmental entity and prepares its financial statements in accordance with governmental accounting standards applicable to proprietary funds. As noted, statements such as a statement of functional expenses and schedules related to statements are not typically associated with proprietary funds of a governmental agency, please clarify if these statements are applicable.

temporarily restricted assets and contributions receivable are typically associated with nonprofit organizations reporting under FASB standards rather than governmental entities reporting under GASB.

These items were included in the initial list of deliverables as part of a broader template and are not applicable to the Authority’s financial reporting structure. The Authority’s financial statements are expected to include the standard proprietary fund statements required under GASB, such as:

Statement of Net Position

Statement of Revenues, Expenses, and Changes in Net Position

Statement of Cash Flows

Notes to the Financial Statements and any required supplementary information

To the extent the scope references statements related to functional expenses, temporarily restricted assets, or contributions receivable, those items should be considered not applicable unless specifically required for supplemental reporting purposes.

8 Please specify the HUB utilization goal for this RFQ.

The goal is 20% or higher for the VetHUB utilization on contracts valued over $100,000.00

9 When does the TDA/Authority expect interim and final fieldwork to take place?

As soon possible, but no later than mid-summer. Once a Purchase Order is dispatched and a kickoff meeting is held with the vendor and TDA work can begin.

10 Would the TDA/Authority be open to having most of the audit being performed remotely?

Yes. All records are electronic.

11 Is most of the supporting documentation maintained electronically (e.g. PDF), such as checks, vendor invoices, cash receipts, timecards, personnel files?

Yes. All records are electronic.

12 What type of documentation does the Authority have related to internal controls by segment and by assertion?

The Authority maintains internal control documentation through a combination of written policies, procedures, and operational guidance that support its financial reporting and program administration activities. While controls may not be formally documented strictly by segment and assertion, the Authority maintains documentation that supports the key internal control components relevant to financial reporting.

Examples of documentation that support internal controls include:

Accounting policies and procedures that outline financial processes, approval authorities, and documentation requirements

Program and grant administration procedures, including eligibility review, award approval, reimbursement processing, and monitoring activities

Segregation of duties and approval workflows within financial and grant management systems

Financial reporting procedures, including reconciliations, review processes, and supervisory approvals

System controls and user access controls within the Authority’s financial and grant management systems

Supporting documentation for transactions, such as invoices, contracts, grant agreements, and payment approvals

13 Does the Authority use service organizations? Examples include payroll processors, workers’ compensation or medical claims processors, hosted data centers, cloud service providers, and managed security providers. If so, approximately how many and for which transaction cycles?

The Authority utilizes CAPPS and a grants management software/online system. The Authority also uses external legal counsel and a financial advisor when necessary. No other external service organizations are used to support administrative, financial, and information technology functions.

14 What IT systems do the Texas Agriculture Finance Authority (TAFA) use?

CAPPS and an independent third-party system for grant management.

15 Do you have any new system implementations planned over the next 5 years?

None at the moment.

16 Have you had any recent system implementations?

No.

17 What financially significant service providers exist? Are SOC reports received?

The Authority relies primarily on statewide systems and service providers administered through the State of Texas to support key financial processes. Financially significant service providers includes CAPPS and grant management software. System and Organization Controls (SOC) reports are received and maintained.

18 Would the TAFA please identify if the incumbent is permitted to bid on this scope of work?

All respondents listed on the CMBL will be allowed to bid.

19 What were the audit fees paid for the two most recent audits?

https://texasagriculture.gov/Home/Site- Policies/Public-Information-Policy

20 Have there been any material weaknesses, significant deficiencies, or deficiencies you received one over the last 2 years. If so, could you please provide the report to management?

21 Can you provide Historical Hours by Audit Area? Historical audit hours incurred for TAFA, by major audit area (or comparable categorization), for FY 2025 and prior years available.

https://texasagriculture.gov/Home/Site- Policies/Public-Information-Policy

22 Would the TAFA please clarify whether the engagement may be performed in a hybrid manner (i.e., on-site visits, scheduled as needed for the engagement, and the remainder performed virtually)? This clarification will assist us in providing a more accurate proposal of our Proposed Fee

Engagement may be performed in a hybrid manner.

23 We understand TAFA received an additional $100 Million in funding to strengthen existing programs and create new opportunities for farmers and ranchers. How does TAFA anticipate this impacting the scope of the audit i.e. any new grant programs, significant new

TAFA did receive additional funding to expand existing programs and support the development of new opportunities for farmers and ranchers. At this time, the Authority anticipates that the additional funding will primarily increase the scale of existing financial assistance programs rather than significantly change the nature of its operations.

purchases, significant increases in headcount, etc.?

The anticipated impacts include:

Expansion of existing loan and financial assistance programs, resulting in an increase in loan activity, guarantees, and related financial transactions.

Implementation of new or enhanced agricultural financing initiatives, which may introduce additional programmatic activity but will generally follow existing administrative and financial management frameworks.

Increased program disbursements and monitoring activities, which may increase the overall transaction volume reviewed during the audit.

At this time, TAFA does not anticipate significant capital purchases or major changes to staffing levels as a direct result of the additional funding. Program administration will largely continue through existing staff and established financial and grant management systems.

From an audit perspective, the primary impact is expected to be an increase in financial activity within existing programs, rather than the introduction of substantially different accounting treatments or operational structures. Any new programs implemented will follow applicable state financial management policies and internal control procedures similar to those already in place.

24 We understand TAFA received an additional $100 Million in funding to strengthen existing programs and create new opportunities for farmers and ranchers. Was any of this funding from Federal sources which could trigger Single Audit requirements?

25 If an oral presentation is required, will this be done remotely or on-site? Additionally, do have an estimate of when the oral presentations would occur?

TDA will discuss with the respondents if the oral presentation can be completed remotely or On-site. There is no current date for the oral presentation.

26 Were there any material scope changes or extraordinary items in the most recent year that significantly affected fees or hours? If so, please describe.

27 Did the incumbent auditor utilize a subcontractor?

End of Addendum