FY 25-27 Audit Specifications 040225 (FINAL).pdf

City of Central Falls

Auditing Services- Fiscal Year 2025, 2026 & 2027 Bid 2025-0013

City of Central Falls Page 2 of 16 Bid 2025-0013- Auditing Services

Invitation to Bid

The City of Central Falls is requesting bids for the following services:

1) Auditing Services- Bid Number 2025-0013

Specifications and Instructions to bidders available on our website at www.centralfallsri.gov or at the Office of the City Clerk/Purchasing Agent 580 Broad St. Central Falls, Monday - Thursday between the hours of 8:30 A.M- 4:30 P.M. and Friday between the hours of 8:30 A.M. – 1:30 P.M.

It is the responsibility of bidder to check the website for any addendums. It is the responsibility of the bidder to ensure compliance with all federal, state and local laws and regulations.

The City of Central Falls reserves the right to accept or reject any and all bids/proposals in the best interests of the City. The City also reserves the right to waive any formalities.

All bids shall be sealed in envelopes with the project name and number clearly marked in the lower left-hand corner of the envelope and must be received by 12:00 P.M. in the Office of the Purchasing Agent on April 25, 2025. NO BIDS WILL BE ACCEPTED AFTER 12:00 P.M. Bids will be publicly opened and read on April 25, 2025, at 1:00pm in the City Hall Council Chambers, 580 Broad St., Central Falls, R.I. 02863.

Ad to Appear: City of Central Falls website and Valley Breeze

Alberto DeBurgo Purchasing Agent/City Clerk

Dated April 8 2025

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Auditing Services- Bid Number 200150006

GENERAL INSTRUCTIONS

1. Receipt and Opening of Proposals Sealed bids (proposals) will be accepted in the office of the Purchasing Agent, City Hall, Central Falls, Rhode Island, until the time indicated on the attached advertisement for bids, for the commodities, equipment or services listed in the specifications, and will be then publicly opened and read at the prescribed time in the City Hall Council Chambers.

2. Form of Bid Proposals shall be submitted in duplicate, with supplemental information, drawings, warranties and other required documentation, literature and material to be provided, with the bid.

3. Submission of Bids

a. Envelopes containing bids must be sealed and addressed to the Purchasing Agent, City Hall, 580 Broad Street, Central Falls, RI 02863 and must be marked with the name and address of the bidder, date and hour of opening, and name of bid item.

b. The Purchasing Agent will indicate in the advertisement when the bids will be opened and no bid received thereafter will be considered.

c. Any bidder may withdraw his bid by written request at any time prior to the advertised time for opening. Telephone bids, amendments, or withdrawals will not be accepted.

d. Unless otherwise specified, no bid may be withdrawn for a period of thirty (30) days from time of bid opening.

e. Negligence on the part of the bidder in preparing the bid confers no rights for the withdrawal of the bid after it has been opened.

f. Proposals received prior to the time opening will be securely kept, unopened. No responsibility will be attached to an officer or person for the premature opening of a proposal not properly addressed and identified.

g. Any deviation from the specifications must be noted in writing and attached as a part of the bid proposal. The bidder shall indicate the item or part with the deviation and indicate how the bid will deviate from specifications.

4. Rhode Island Sales Tax The City is exempt from the payment of the Rhode Island Sales Tax under the 1956 General Laws of the State of Rhode Island, 44-18-30, Paragraph 1, as amended.

5. Federal Excise Taxes The City is exempt from the payment of any excise tax or federal transportation taxes. The price bid must be exclusive of taxes and will be so construed.

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6. Qualifications of Bidders The City may make such investigations as it deems necessary to determine the ability of the bidder to perform the work. The bidder shall furnish the City with all such information and date for the purpose as may be requested.

7. Addenda and Interpretations No interpretation on the meaning of the plans, specifications or other contract document will be made to any bidder orally. Every request for such interpretations should be in writing addressed to the City of Central Falls, Office of the Purchasing Agent, 580 Broad Street, Central Falls, RI 02863 and to be given consideration must be received at least seven (7) days prior to the date fixed for the opening of the bids.

8. Delivery All bids are to be FOB to the City Clerk’s Office, delivery to be supplied with the Purchase Order.

No extra charges for delivery, handling or other services will be honored. Only inside delivery and set-up, where required, will be accepted. TAILGATE DELIVERIES WILL BE REFUSED.

The vendor must notify the City of Central Falls 24 hours prior to delivery. All claims for damage in transit shall be the responsibility of the successful bidder. The City will not make payment on damaged goods, they must be replaced or adjustments made at the option of the city. The City of Central Falls is only represented by the Purchasing Agent in these matters and that division, or its appointed representative or agent, shall be the only entity to negotiate any settlements. Deliveries must be made during normal working hours.

Bid price, where applicable, is to include the cost of uncrating and setting in place. Bid price, where applicable, is to include installation.

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BID SPECIFICATIONS

Notice to all bidders:

The Rhode Island General Laws (Section 45-10-4) require the approval of the Auditor General prior to the employment of private auditors by Rhode Island municipalities.

Overview:

Rhode Island General Laws (Section 45-10-5) require that an annual audit be completed and final audit reports (inclusive of all audit communications) related to the financial statements be delivered to the municipality, State Auditor General and State Director of Revenue within six months after the close of the fiscal year for each year. For the City of Central Falls, with a fiscal year ending June 30, the reports must be filed by December 31 of each year.

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.

Due date for completion of Audit and delivery of reports:

Description For the Fiscal Year

Ending June 30 Due Date Basic Financial Statements and Supplementary Information and Federal Single Audit

2025 December 31, 2025

Basic Financial Statements and Supplementary Information and

2026 December 31, 2026

Basic Financial Statements and Supplementary Information and

2027 December 31, 2027

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Qualifications of Auditor

1. The firm selected for the audit shall be a firm of certified public accountants holding a valid permit in the State of Rhode Island or from another state having equal professional standards.

2. The private auditor must meet the independence requirements of the American Institute of Certified Public Accountants and the independence requirements of Government Auditing Standards.

3. The senior accountant in charge of the fieldwork shall be a certified public accountant.

4. The audit organization and the individuals responsible for planning, directing, conducting substantial portions of the fieldwork, or reporting on government audits shall meet the continuing educational requirements of Government Auditing Standards issued by the Comptroller General of the United States.

5. The audit organization shall have an appropriate internal quality control system in place and participate in an external quality control review program as required by Government Auditing Standards.

6. The audit organization shall provide a copy of their most recent external quality control review report to the City prior to any engagement and also submit the results of any subsequent review performed during the term of the contract.

7. The audit organization shall identify any sub-contractors, co-proposers, or other entity that will be used to provide the professional services sought by the request for proposal.

Bid Requirements:

Scope of Audit

1. Federal Awards. The City of Central Falls occasionally expends federal awards, therefore an audit may also meet the requirements of the Single Audit Act and OMB Guidance 2 CFR part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (OMB Uniform Guidance) - Subpart F – Audit Requirements. Circumstances could change between fiscal years regarding the expenditure of federal awards and therefore the applicability 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 must be made each year.

2. Central Falls School District. The Central Falls School District is a component unit of the State of Rhode Island. An annual audit of the financial records for this entity is conducted separately and thus shall not be part of the proposed engagement with the City of Central Falls.

3. Financial Statements. The City desires the auditor to prepare a draft of the financial statements, based on trial balances prepared and provided by the City. All statements referenced in Number 4 (below) of bid requirements.

4. Financial Statements. The City desires the auditor to express an opinion on the fair presentation of its basic financial statements, which will include government-wide

City of Central Falls Page 7 of 16 Bid 2025-0013- Auditing Services financial statements, fund financial statements, and notes to the financial statements in conformity with generally accepted accounting principles.

a. Financial statements, schedules and information, including:

i. Government-wide Financial Statements

1. Statement of Net Position

2. Statement of Activities

ii. Fund Financial Statements for Governmental Funds

1. Balance Sheet

2. Statement of Revenues and other financing sources, Expenditures and other financing uses, and Changes in Fund Balances

3. Reconciliation of the Statement of Revenues, Other Financing

Sources, Expenditures other financing uses and Changes in Fund Balances of Governmental Funds to the Statement of activities

iii. Fiduciary Funds

1. Statement of Net Position

2. Statement of Changes in Net Position

iv. Notes to Financial Statements

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 - Management’s Discussion and Analysis shall be prepared by the City’s Deputy Finance Director and approved by the Finance Director.

• 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 City 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.

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• 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.

• 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 procedures applied during the audit of the financial statements.

Other schedules may be required by the City 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 basic financial statements”).

• 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 municipal reportable government services. 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 the reconciliations), MTP2, as supplementary information (“fairly presented in relation to the municipality’s basic financial statements”).

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 statements as supplementary information) to assess the inclusion of amounts reported which are not within the municipality’s general fund.

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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).

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.

The auditor shall also make work papers relative to the audit available to the City for review.

Audit Contract

1. The audit contract may cover one, two or three fiscal years. Each year must be treated as a separate audit. The contract period shall not exceed three years.

2. Audit contracts covering more than one year shall specify an audit fee for each year. The audit fee shall be inclusive of all expenses.

3. Continuation beyond the initial fiscal year of the three-year contract will be at the discretion of the City of Central Falls.

4. Any representations made by the audit firm 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.

Audit Standards

1. The audit shall be conducted in accordance with generally accepted auditing standards established by the American Institute of Certified Public Accountants.

2. The audit shall be conducted in accordance with the standards for financial audits set forth in Government Auditing Standards issued by the Comptroller General of the United States.

3. The audit shall be conducted in accordance with the standards contained in the amended (July 1996) Single Audit Act of 1984 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.

Audit Reports

1. Draft copies of all audit report(s) and the management letter shall be submitted to the City’s Finance Director, prior to the exit conference so that there will be adequate time for review.

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

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

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

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b. Supplementary financial statements, schedules and information being 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 Supplemental Transparency Report (MTP2, including the reconciliations), and the Tax Collector’s Annual Report.

c. 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.

d. Reports required under trust agreements, loan agreements, etc., if any.

e. Reports and summaries related to federal financial assistance (as appropriate in the circumstances) 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 a complete SF-SAC Data Collection Form to be submitted in accordance with the current method of submission for Single Audit reporting packages (per OMB public Notice), to the Federal Audit Clearinghouse Internet Data Entry System.

f. 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.

g. Other reports requested by the municipality and/or the Director of Revenue and/or the

Auditor General or as required by the applicable section of the general laws.

Management Letter

1. Upon completion of the audit the auditor shall submit a management letter to the City’s

Finance Director, with copies to the City Council, Director of Revenue and the Auditor General.

2. The management letter should include audit firm’s comments and/or recommendations on such matters as:

a. policies, procedures and practices employed by the municipality;

b. immaterial weaknesses in the internal controls that are not “significant deficiencies;”

c. use of City resources to provide governmental services in a reasonable, judicious, economical, and efficient manner;

d. compliance with any and all state laws pertaining to the City of Central Falls and also with local rules and regulations established by the municipality; and

e. management’s responses to the auditor’s comments and/or recommendations.

Additional Information to be provided in a written representation by the audit firm to the City shall include:

1. The current status of the professional license of the firm, partner-in-charge, and senior accountant in charge of the fieldwork;

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2. Staffing information including:

a. firm size,

b. number of staff allocated to the audit job,

c. qualifications/experience of each person assigned to the audit job;

3. The amount and type of professional liability coverage. The audit firm shall have at the time of proposal, and throughout the period of engagement, professional liability insurance coverage of not less than $1 million;

4. A list of any professional complaints pending or resolved against the firm or any of its partners with the state boards of accountancy, or any self- regulatory, professional or government authority including but not limited to the AICPA, or Rhode Island Board of Accountancy;

5. Information regarding any lawsuits or claims against the firm, pending or resolved;

6. The auditor shall provide a statement of relevant experience including a list of municipal or other governmental audits performed in the last five years;

7. The auditor shall furnish an estimated total number of hours for the engagement and estimated completion for the final audit report;

8. The auditor shall include a statement that there exists no client conflicts which would inhibit the ability to perform the audit in accordance with professional auditing standards;

9. A representation that the auditor is independent under the requirements of the American

Institute of Certified Public Accountants and Government Auditing Standards;

10. A representation 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.

11. The auditor shall meet the continuing educational requirements of Government Auditing

Standards and furnish evidence thereto;

12. The auditing firm shall have an internal quality control system in place and furnish written evidence that the firm has participated in an external quality control review program as required by Government Auditing Standards.

13. The firm will also provide the Auditor General with a copy of its most recent external quality control review report and also submit the results of any subsequent review performed during the term of the contract;

14. The auditor shall represent that the audit and subsequent reporting shall be in accordance with:

a. generally accepted accounting principles for state and local government units;

b. generally accepted auditing standards promulgated by the American Institute of Certified Public Accountants

c. the standards for financial audits set forth in Government Auditing Standards issued by the Comptroller General of the United States;

d. the Single Audit Act of 1984 as amended in July 1996, and

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e. 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 will report in accordance with the standards listed above.

Access to Audit Information As required by Section 45-10-4 of the RI General Laws, it is understood that any resulting contract between the City of Central Falls and the audit firm shall require the auditor or the audit firm to release any and all information obtained in the course of the engagement to the Rhode Island State Auditor General (or his designee). This information includes but is not limited to financial data, analysis, work papers, and memorandum. Audit work papers 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.

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Selection:

An evaluation committee will be comprised of individuals knowledgeable about auditing and financial reporting matters. The City of Central Falls will consider the following information as part of the approval process:

• the audit firm’s qualifications and responses relative to the RFP;

• the audit firm’s municipal experience (with Rhode Island municipalities);

• professional experience and resumes of senior partner(s) and the on-site project manager assigned to the proposed engagement(s)

• the audit firm’s capacity to meet the required deadline (e.g. staffing levels and other government engagements with similar due dates);

• the audit firm’s track record for meeting contractual deadlines for the timely completion of audits;

• the audit firm’s fee structure for proposed engagement(s) of up to one (1), two (2) and/or three (3) years; and

• recommendation(s) from the Purchasing Board and/or the Finance Director.

Proposals 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 experiences with governmental entities and the specific line of business or services provided by the entity to be audited.

Overall audit approach and audit strategy described/outlined in the proposal and firm capacity to perform the 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 evaluation points 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

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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.

In accordance with Government Auditing Standards, if the firm provides non-audit services, it must evaluate whether providing the services creates independence impairment with respect to the audit of the City of Central Falls.

The City of Central Falls reserves the right to reject the lowest bidder(s) if the City deems that the firm(s) does not possess the personnel, experience and other resources to complete the audit in accordance with the audit specifications. The City may also opt to reject all bids. In either case, the reason for the City’s action shall be documented.

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Auditing Services- Bid Number 2025-2025-0013

Bid Response

Name of company: __________________________________________________

Business Address: __________________________________________________

Telephone: _____________________ Fax: ___________________

Contact Person: _________________________________________________

Email: ___________________________________________________

Please complete:

Total Fixed Fee, including expenses, for 2025 Audit $_______________

Total Fixed Fee, including expenses, for 2026 Audit $_______________

Total Fixed Fee, including expenses, for 2027 Audit $

Total Bid Price $_______________

Payment Terms:

Please discuss what type of assistance you will expect from the City of Central Falls accounting staff during the audit engagement(s):

Name of person authorized to submit proposal Signature

Title Date

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References:

Please provide a minimum of three (3) client references.

(1)

Name: __________________________________________________

Title: __________________________________________________

Address: __________________________________________________

Telephone # _____________________ Email _____________________

(2)

Title: __________________________________________________

Address: __________________________________________________

(3)

Title: __________________________________________________

Address: __________________________________________________