Colorado Office of the State Auditor 1

A Request for Proposals for an Audit of Colorado Sports Betting

October 2, 2026

2 Colorado Office of the State Auditor

Table of Contents

Section I Administrative Information

Section II Information That Must Be Included in Proposal

Section III Proposal Evaluation Process

Section IV Supplemental Information

Colorado Office of the State Auditor 3

Section I Administrative Information

A. Issuing Office

This request for proposals (RFP) is issued by the Colorado Office of the State Auditor (OSA).

The terms OSA, State Auditor, State, and State of Colorado are used interchangeably throughout this RFP. As an agency within Colorado’s Legislative Branch, the OSA and this solicitation are exempt from the State Procurement Code and State Procurement Rules [see Section 24-101-

105(1)(a), C.R.S.].

All communications regarding this RFP must take place directly with the OSA’s assigned contract monitor listed in Section I(E)–Inquiries and Section I(F)–Submission of Proposals.

B. Background Information

The OSA is soliciting proposals from qualified organizations to conduct a performance audit of the Colorado Sports Betting Program and Fund, which is overseen by the Department of

Revenue’s Division of Gaming and the Colorado Limited Gaming Control Commission. This performance audit will be conducted pursuant to Section 44-30-1510, C.R.S., which requires an audit of the Sports Betting Fund; Section 2-3-103, C.R.S, which authorizes the OSA to audit all departments, institutions, and agencies of state government; and Section 2-7-204(5)(c), C.R.S.

[the SMART Government Act], which requires OSA to review the overall cost and effectiveness of audited programs in achieving legislative intent and performance goals.

In 2018, the Supreme Court overturned the 1992 Professional and Amateur Sports Protection

Act (Murphy v. NCAA), allowing states to legalize and regulate sports betting. In 2020, Colorado voters approved Proposition DD, which legalized sports betting and allowed for wagers to be placed in person at a licensed Colorado casino or online through a licensed internet sports betting platform, and created a tax on net sports betting proceeds.

The Division of Gaming and the Colorado Limited Gaming Control Commission are responsible for regulating and maintaining the integrity of sports betting, as well as limited gaming (e.g., casino-style gambling in Black Hawk, Cripple Creek, and Central City), and fantasy contests. Regarding sports betting, the Division of Gaming’s primary regulatory activities include collecting sports betting taxes, fees, fines, and penalties from licensed sports betting operations;

issuing licenses for sports betting operations; and conducting compliance and other investigations and audits to enforce sports betting laws and regulations and ensure licensed operators meet requirements set by the Colorado Limited Gaming Control Commission.

Sports Betting Operator Tax Revenue

Sports betting operators are required to pay a 10 percent tax on net sports betting proceeds. In years prior to Fiscal Year 2025, operators were allowed to calculate their tax liability based on

4 Colorado Office of the State Auditor defining “net sports betting proceeds” as the total amount of all bets placed, excluding free bets

(i.e., bets made using non-cashable vouchers and other promotions provided by operators), less all payments to players, and less a 0.25 percent federal excise tax. These free bet exclusions started to be phased out beginning in Fiscal Year 2025, as a result of House Bill 25-1311, with free bet exclusions being eliminated altogether by Fiscal Year 2027. The remainder of the tax liability calculations remains the same as prior years.

Sport betting operators are required to submit monthly tax payments to the Department of

Revenue, along with documentation to support the payments. The Division also receives activity reports that each operator uploads to the Division’s database (Python) daily that include aggregate wagers on bets placed in each sport and patron payments. Beginning in February 2028, as a result of Senate Bill 26-131, operators will also be required to provide data for individual transactions. Division staff are responsible for reviewing this information, using a combination of manual and automated processes, to reconcile the tax payment with the supporting documentation.

Under Section 44-30-1509(2), C.R.S., revenue generated from sports betting operator taxes and fees are deposited into the Sports Betting Fund, which is used to pay for:

• Division of Gaming operations and the expenses of regulating sports betting.

• Transfers to the Hold Harmless Fund, which allows recipients of limited gaming revenue

(e.g., gaming cities, community colleges, state historical fund) to recoup any limited gaming tax revenue that they can demonstrate they lost, due to the expansion of sports betting.

These potential beneficiaries of the Hold Harmless Fund must complete an application process that demonstrates their revenue was impacted by the expansion of sports betting and receive approval by the Colorado Limited Gaming Control Commission for distributions from this fund. In Fiscal Year 2026, the Division transferred $1.74 million to the Hold Harmless Fund. As of September 2026, no disbursements have been made from the Hold Harmless Fund since its creation in 2021.

• Transfers to the Colorado Water Plan Implementation Cash Fund, used to award grants to improve Colorado’s water infrastructure. This Fund receives the vast majority of sports betting revenue—for Fiscal Year 2026 it received $33.5 million.

Initially, total sports betting tax revenue was capped at $29 million; in November 2024 voters approved a ballot initiative that removed the tax revenue cap (House Bill 24-1436). Sports betting tax revenue has grown every year since Fiscal Year 2021, the first full year of operations following the program’s launch, as shown in Exhibit 1.

Colorado Office of the State Auditor 5

Exhibit 1: Sports Betting Tax and Licensing Revenue, Fiscal Years 2021 through 2026

2021 2022 2023 2024 2025 2026

Sports Betting Tax $8,146,362 $12,445,448 $25,613,575 $30,440,341 $36,817,573 $47,204,466

License Fees and Fines1

$2,045,642

$2,499,327

$2,477,006

$2,369,650

$1,880,963

$1,568,517

Other Revenue2 $28,566 $(117,860) $(529,899) $624,453 $832,267 $243,707

Total $10,220,570 $14,826,915 $27,560,682 $33,434,444 $39,530,803 $49,016,689

Source: Colorado Operations Resource Engine financial data for the Sports Betting Fund.

1 Includes operator fees, license fees, background investigation reimbursements, and fines.

2 Includes revenue such as interest income, unrealized gains and losses, future lease component payments, and operating transfers from the Department of Revenue.

As of August 2026, there were 15 casinos that hold a sports betting master license. Of these, 9 host an onsite sports betting operation in the casino and 12 have contracts with an internet sports betting app for a total of 21 licensed sports betting operations within the 15 casinos. This number has decreased from the 39 licensed operations in March 2022. The Division of Gaming has noted possible reasons for this decrease, such as the industry maturing or operators leaving the state-regulated sports betting market to become prediction markets. Prediction markets are federally-regulated companies that offer contracts on the outcome of events including sporting events. There is ongoing litigation regarding the legality of prediction markets due to their similarity to sports betting operators.

Sports Betting Operator Regulation and Monitoring

In addition to monitoring sports betting operations through a review of daily wager activity and monthly sports betting tax liability, the Division of Gaming works to ensure the integrity of sports betting through various investigations and inspections. For example, sports betting operations that apply for licenses undergo extensive background investigations, and all licensed operators receive at least one compliance inspection each year. Additionally, the Division investigates complaints made against operators to address specific allegations of non-compliance with laws intended to protect sports betting patrons, such as operator adherence to prohibitions on marketing to individuals who ask to be placed on a “no contact” list.

In accordance with Section 44-30-1510, C.R.S., the OSA completed a Sports Betting performance audit in April 2022 that looked at the State’s first year of regulating sports betting and found deficiencies in the Division of Gaming’s processes to investigate operators for temporary licenses, and to collect sufficient documentation to demonstrate the operators’

6 Colorado Office of the State Auditor monthly tax filings were accurate. The Division reported that the audit recommendations to address these deficiencies had been implemented as of July 2024.

In recent years, the General Assembly has enacted legislation that impacts how sports betting taxes are calculated and that includes new requirements intended to protect sports betting patrons. House Bill 25-1311 phased out the ability for sports betting operators to deduct free bets placed by players when calculating net proceeds for tax purposes, with total elimination of this deduction beginning in Fiscal Year 2027. Senate Bill 26-131, effective August 2026, prohibits operators from accepting credit cards for sports betting wagers and sending patrons push notifications, and places a cap on daily deposits. These requirements are in addition to existing restrictions such as that sports betting patrons must be over the age of 21 and geographically located within Colorado. People who are prohibited from participating in sports betting include sports team players and staff, owners of sports betting operations, Division staff and commissioners who regulate the industry, and individuals who have requested to be placed on the State’s sports betting self-exclusion list. The Division of Gaming conducts compliance inspections routinely, and investigates complaints to monitor operators in these and other areas.

C. Services Required

The OSA is soliciting proposals from qualified organizations to conduct a performance audit to assess the Division of Gaming’s regulation of Colorado’s Sports Betting Program and Fund.

Subject to oversight and direction provided by the OSA, the engaged firm (Contractor) will be responsible for planning and conducting the audit to obtain sufficient, appropriate evidence necessary to conclude on the audit’s objectives, develop complete written findings, write the audit report, and present the audit report to the Legislative Audit Committee (LAC), as well as to other legislative committees or oversight bodies, if requested and approved.

The Contractor will conduct this performance audit in accordance with generally accepted government auditing standards, issued by the U.S. Comptroller General. The Contractor will be required to conduct, and provide the OSA results of background checks and fingerprinting for all personnel assigned to the engagement, as well as attestations of agreement that neither they nor any member of their household will participate in sports betting activities for the duration of the engagement. Additionally, confidential and protected data (e.g., sports betting patron information, tax and financial data, investigative and regulatory records) will be required to complete the audit objectives; the Contractor must ensure that all information and data is handled and maintained by assigned personnel at all times in accordance with applicable federal and Colorado privacy and information security laws and standards.

Audit Objectives, Scope, and Methodology

The purpose of this performance audit is to evaluate the Division of Gaming’s regulation of the

Colorado Sports Betting Program and Fund through a review of its processes for ensuring the accuracy of sports betting tax revenue, conducting compliance inspections and complaint

Colorado Office of the State Auditor 7 investigations, and through assessing usage of the Hold Harmless Fund. The objectives of the audit will include the following:

Objective 1 – Determine whether the Division of Gaming’s processes for reviewing sports betting taxes ensure that operators remit taxes in the correct amounts. This should include:

• Understanding and testing the Division’s manual and automated processes for collecting and reviewing sports betting operator taxes and related supporting documentation for accuracy.

This should include determining if there are any gaps or deficiencies in the processes that could result in the Division not identifying sports betting operators that have not properly reported and submitted all required sports betting taxes.

• Evaluating the propriety of any free bet tax deductions claimed by operators during Fiscal

Years 2026, and 2027 to date, based on House Bill 25-1311 (i.e., in calculating monthly net proceeds for tax purposes, operators may deduct no more than 2 percent of total free bets placed in July – December 2025; no more than 1 percent of bets placed in January – June

2026; and no deductions for bets placed beginning July 2026).

• Identifying sports betting operators that were formerly licensed in Colorado who have now shifted to prediction market offerings for sports event contracts, and as possible, quantify the impact on sports betting tax revenue.

Objective 2 – Evaluate the effectiveness of the Division’s compliance inspection, and background and complaint investigation processes for monitoring operator compliance with laws and regulations intended to protect sports betting patrons and the integrity of the industry.

This should include:

• Understanding the statutes and rules regarding patron protections, including minimum age requirements, prohibitions on the use of credit cards for wagers, prohibitions on push notifications, the cap on daily deposits, and betting location requirements.

• Reviewing and testing the Division’s processes for monitoring operator compliance with these laws and regulations through compliance inspections and complaint investigations.

• Evaluating whether the 21 sports betting operators that are currently licensed have received complete background investigations.

Objective 3 - Determine whether the Hold Harmless Fund is serving its purpose and is necessary. This should include:

• Reviewing the statutory history of the Hold Harmless Fund and understanding how it has been used, including reviewing information provided to potential beneficiaries, applications

8 Colorado Office of the State Auditor and/or inquiries received and reviewed, and available financial data and reports on the fund’s use.

• Surveying potential beneficiaries to determine if they are aware of the fund, and if there are factors that have prevented them from requesting disbursements from the fund.

• Reviewing trends in revenue and other financial data as applicable to compare and assess profit/loss of the potential beneficiaries of the fund, over the years the Sports Betting program has collected tax revenue.

The Contractor should plan for its work to include, at a minimum, reviewing pertinent statutes, regulations, and policies; making inquiries of Division management and staff, as well as other entities as relevant to the audit objectives; reviewing data, reports, and other documentation as relevant to the audit objectives; and testing a selection of reconciled tax submissions, compliance inspections, and background and complaint investigations, against Division processes and requirements.

Deliverables and Timelines

The OSA expects the Contactor to satisfy the project deliverables and timelines outlined in

Schedules A and B in this RFP to produce a final report that adheres to standards outlined in

Exhibit H of the OSA’s standard contract, no later than April 30, 2027, which will be publicly released at a June 2027 Legislative Audit Committee hearing date. The Contractor must attend the Legislative Audit Committee hearing in person to present the final audit report.

Work for this project is estimated to begin about November 5, 2026. However, work could begin sooner or later depending on how long it takes to route and execute the contract after selection of the successful proposal. No billable work can begin on this project until the effective date of the contract.

Work Location

Depending on the needs of the engagement and the nature of work being performed, most work for this engagement may be able to be completed using email, phone, virtual file-sharing using a secure file portal system, and remote meeting technologies. However, some amount of in-person or on-site work in Colorado may be required. The Contractor will work directly with the

Division of Gaming during the engagement, and the OSA contract monitor as needed, to determine an appropriate work location necessary to complete the services requested and the various related work tasks to meet the project objectives.

Colorado Office of the State Auditor 9

Planning and Fieldwork

The planning and fieldwork phases of this project are expected to take place from approximately

November 5, 2026 through March 1, 2027 and include the project deliverables and timelines shown in Schedule A. The engagement for this audit, and Entrance Conference with an in-house audit team, took place on July 7, 2026. At the start of the contract, the Contractor, with assistance from the OSA contract monitor, will be responsible for coordinating with the OSA in-house team to transition audit information and documentation, ensuring assigned personnel understand and apply all applicable federal and Colorado privacy and information security laws and standards, which may include completing necessary training.

Schedule A: Fieldwork Tasks and Deadlines

Task Details Completed by

Planning Meeting with OSA

Meet with the OSA to review the contract terms, including the scope of work, key project deliverables and deadlines, project status reporting, communications with the Division of Gaming, data security requirements, and other topics as needed. The OSA contract monitor and staff will provide the Contractor information and documentation collected from the Division during initial audit planning work conducted July – September 2026.

11/5/2026

Introductory / Transition Meeting

Hold an introductory meeting with appropriate Division of Gaming personnel to discuss the audit, timeline, and logistics, including the transition of the audit from OSA’s in-house team to the Contractor. The OSA contract monitor and other staff, and Deputy State Auditor, will attend this meeting. The

Contractor is responsible for scheduling this meeting with the assistance of the OSA contract monitor.

11/7/2026

Fieldwork

Fieldwork involves obtaining and reviewing documentation, interviewing Division personnel and others as appropriate, and analyzing data. Fieldwork should ensure the Contractor develops a clear understanding of Sports Betting Program operations and data, and gathers and evaluates sufficient information to draw conclusions on the objectives.

The Contractor is responsible for quality review of its work to ensure that the findings and report are based on complete, accurate, relevant, and objective information and analyses. This should include, at a minimum, verifying all numeric data, calculations, and legal/regulatory information pertinent to the conclusions, and clearing any discrepancies with the Division of

Gaming. The Contractor will be required to attest that the information and conclusions in the final report have undergone quality control procedures prior to the report’s release.

Beginning

11/7/2026

OSA Updates Provide routine written and verbal updates to the OSA contract monitor that include:

• Information on the overall progress of the work, Throughout the Project

10 Colorado Office of the State Auditor

Task Details Completed by

• Preliminary conclusions on the objectives, and

• Written drafts of conclusions and findings as identified.

The schedule for updates will be determined jointly by the OSA and the Contractor, but should occur at least every two weeks.

The Contractor should notify the contract monitor immediately of any problems or delays in gathering information, completing the work, or communicating with the Division of Gaming.

Adjustments to the work may occur based on these updates.

Division of Gaming

Briefings

Hold regular briefings with the Division of Gaming to:

• Proactively inform them of the results of the work, any issues/problems identified, and potential conclusions, findings, and recommendations.

• Obtain relevant input and information.

• Clear issues or exceptions identified.

The Contractor is responsible for setting up these meetings, in coordination with the Division of Gaming, and with the assistance of the OSA contract monitor if needed. The OSA contract monitor should be included in these meetings.

Adjustments to the work may occur based on these briefings.

Throughout the

Project

Draft Written

Findings

Draft and provide to the OSA detailed written findings reflecting completion of all the work required to address the objectives. The findings must adhere to the format in “Exhibit G – Developing and Presenting Findings” of the OSA’s standard contract.

The OSA has a rigorous findings review process that includes review and revision at multiple levels of the OSA as well as review and comment by the Division of Gaming. Prospective bidders should take this into consideration when preparing a proposed calendar and budget. The OSA will provide both verbal and written feedback on the findings. The OSA contract monitor will involve the Deputy State Auditor and State Auditor as appropriate. As needed, the OSA contract monitor and Contractor will meet to discuss the findings.

January 22, 2027

Revise Findings Revise the findings to address questions, clarify information, and otherwise address the OSA’s feedback, and submit to the

OSA.

February 12, 2027

Findings to the

Division of Gaming

Once the OSA has approved the findings, work with the OSA contract monitor to submit them to the Division of Gaming.

The findings must be provided to the Division at least 1 week before the Clearing Meeting.

February 19, 2027

Clearing Meeting Meet to discuss the findings with the Division of Gaming. The clearing meeting allows the agencies to provide feedback on the conclusions and findings, the accuracy of the information, the reasonableness of the recommendations, and to offer additional context and relevant documentation.

March 1, 2027

Colorado Office of the State Auditor 11

Task Details Completed by

The clearing meeting will include the OSA contract monitor and the Deputy State Auditor.

Reporting

The OSA has a rigorous report review process, which includes review and revisions at multiple levels of the OSA as well as review and comment by the Division of Gaming. Consultation/ discussion with the OSA contract monitor will occur throughout the reporting process for guidance, preliminary review, and feedback, as needed.

The final report must adhere to the standards outlined in “Exhibit H–Reporting Requirements and Format for Separately Issued Reports” of the OSA’s standard contract. The standard contract is attached in Section IV–Supplemental Information, which also provides links to examples of recent reports issued by the OSA as well as the OSA’s 2022 Sports Betting

Performance Audit report. Prospective bidders should review the example reports to gain an understanding of the OSA’s expectations in terms of form and presentation and, more importantly, the quality of the evidence needed to substantiate the findings and conclusions.

Prospective bidders should take into consideration the report review process when preparing a proposed calendar and budget.

The reporting phase of this project is expected to take place from approximately March through

June 2027, and includes the project deliverables and timelines shown in Schedule B. It is important to note that the report must be finalized and printed no later than April 30, 2027, as required by statute.

Schedule B: Reporting Tasks and Deadlines

Tasks Details Completed By

Draft Report to

OSA

Based on the Clearing Meeting, and in consultation with the

OSA, use the findings to prepare a draft report. This should include the Contractor reviewing any new information or documentation supplied by the Division of Gaming and incorporating it, as appropriate, into a draft report. The draft report must adhere to the requirements outlined in “Exhibit H–

Reporting Requirements and Format for Separately Issued

Reports” of the OSA’s standard contract (attached).

Submit the draft report to the OSA contract monitor. The OSA will provide both verbal and written feedback on the draft report.

The OSA contract monitor will involve the Deputy State Auditor and State Auditor.

March 12, 2027

12 Colorado Office of the State Auditor

Tasks Details Completed By

Revise Draft Report

Revise the draft report to address questions, clarify information, and otherwise address the feedback provided by the OSA. Submit the revised draft to the OSA.

The process of review by the OSA and revisions by the Contractor will most likely be iterative, involving the OSA contract monitor, Deputy State Auditor, and State Auditor.

Further, addressing the OSA’s feedback on the draft report may require the Contractor to obtain and analyze additional information from the Division of Gaming.

March 29, 2027

Draft Report to the Division of

Gaming

Once the draft report is approved by the OSA, coordinate with the contract monitor to submit it to the Division of Gaming for review and comment. The draft report must be provided to the Division at least 1 week before the Exit Conference.

April 2, 2027

Exit Conference And

Report Revisions

Meet with the Division of Gaming to discuss the draft report and obtain feedback and planned responses to the findings. The

Contractor is responsible for scheduling this meeting with the assistance of the OSA contract monitor. The OSA contract monitor, Deputy State Auditor, and State Auditor will participate in this meeting.

In consultation with the OSA, revise the draft report, as appropriate, to address comments, concerns, or new information from the Division of Gaming. All report changes must be reviewed and approved by the OSA. If revisions are substantive, once approved by the OSA, provide the revised draft to the Division of Gaming.

April 9, 2027

Obtain Written

Responses

Coordinate with the OSA contract monitor to obtain and review written responses to the findings from the Division of Gaming.

Work with the OSA to revise the report narrative, provide feedback to the Division of Gaming regarding the responses, and prepare Auditor’s Addenda, as needed.

April 16, 2027

Final Report

Review and Approval for Print

Prepare a final report with (1) any approved changes to the draft report, (2) final responses to the findings, and (3) any Addenda.

Review the final report to ensure the accuracy of all information and submit Contractor QC Review Attestation Form to OSA.

Submit the Final Report, in print-ready format, for final review and approval by the OSA contract monitor, Deputy State

Auditor, and State Auditor.

April 23, 2027

Final Electronic

Report File and

Printed Hard Copies to the OSA

Once the State Auditor has approved the final report, provide the

OSA contract monitor with:

• An electronic copy of the final report file in unprotected PDF format.

• Up to 50 hard copies of the bound and printed report. The exact number of copies will be determined by the OSA at the time of report finalization. Acceptable binding formats are limited to spiral, comb, and glued; 3-ring bindings are not acceptable.

No later than

April 30, 2027

Colorado Office of the State Auditor 13

Tasks Details Completed By

The OSA will distribute the final report to the Legislative Audit Committee and Division of Gaming.

Dry Run of Report

Presentation

Coordinate with the OSA contract monitor on the format and content of the Legislative Audit Committee presentation. This includes providing the OSA with a written script of the presentation and conducting two practice sessions with the OSA to practice and incorporate suggested revisions.

Early May 2027

Legislative Audit

Committee Hearing

Provide in-person testimony to the Legislative Audit Committee summarizing the report’s findings, conclusions, and recommendations, and responding to questions from Committee members. Hearings typically last roughly 1 to 2 hours. Note – this hearing must be attended in person.

June 2027

D. RFP and Contract Schedule

The following schedule will apply with respect to this RFP:

• RFP available to prospective bidders Friday, October 2, 2026

• Prospective bidders’ inquiry deadline (5:00 p.m. MT) Tuesday, October 13, 2026

• OSA response to inquiries deadline Friday, October 16, 2026

• Proposal submission deadline (5:00 p.m. MT) Monday, October 26, 2026

• Approximate bid selection date Friday, October 30, 2026

• Approximate contract date Thursday, November 5, 2026

E. Inquiries

Prospective bidders may make written inquiries about this RFP for clarification of requirements.

Inquiries must be submitted via email to Vickie Heller, Contract Monitor, at vickie.heller@ coleg.gov. No inquiries will be accepted after 5:00 p.m. MT on October 13, 2026.

F. Submission of Proposals

Proposals must be submitted via email to Vickie Heller, Contract Monitor, at vickie.heller@coleg.gov. No proposals will be accepted after 5:00 p.m. MT on October 26, 2026.

All proposals become the property of the OSA upon receipt and will not be returned to the bidder. The OSA shall have the right to use all ideas, or adaptations of ideas, contained in any proposal received in response to this RFP. Selection or rejection of the proposal will not affect this right.

G. Acceptance of Proposal

This RFP does not commit the OSA to award a contract, to pay any costs incurred in the preparation of a bid submitted in response to this request, or to procure or contract for services

14 Colorado Office of the State Auditor or supplies. The OSA reserves the right to accept or reject, in part or in its entirety, any or all bids received as a result of this RFP if the OSA determines that it is in the best interest of the

State to do so. The lowest cost proposal will not necessarily be selected. The OSA also reserves the right to engage in further negotiation of the project scope of work, price, and contract terms after selection of the Contractor if the OSA determines that it is in the best interest of the State to do so.

H. Addendum or Supplement to Request for Proposals

The OSA reserves the right to issue amendments to this RFP prior to the closing date for submission of proposals. In the event that it becomes necessary to revise any part of this RFP, an addendum to this RFP will be provided to each known prospective bidder.

I. Award Without Discussion

The OSA reserves the right to make an award without further discussion of proposals received.

Therefore, proposals must be submitted in the most complete terms possible from both the technical and cost standpoint.

J. Award Information to Unsuccessful Firms

The OSA will notify all unsuccessful bidders after the award. No information will be released after the proposal submission deadline until an award has been made.

K. Joint Ventures

No joint venture proposals will be accepted. However, this requirement does not preclude the use of outside special consultants if deemed necessary by the Contractor.

L. OSA Contract Monitor

The OSA will assign a contract monitor to serve as the Contractor’s primary point of contact and liaison throughout the project. The contract monitor will attend all key Department/agency meetings during the engagement (e.g., entrance/exit conferences, findings clearing meetings, briefing meetings with management or boards/commissions, Legislative Audit Committee hearing); assist the Contractor in understanding the OSA’s requirements, processes, and expectations; and facilitate the OSA’s review of project deliverables, including providing guidance and feedback for revisions.

M. Award of Bid

The contract will be awarded to the bidder whose proposal the OSA determines to be the most advantageous to the State of Colorado.

Colorado Office of the State Auditor 15

N. Submission of Invoices

The Contractor must submit monthly invoices for audit work completed. The OSA will withhold payment for 10 percent of the total contract amount pending satisfactory completion of the contract scope of work, which typically occurs after the Legislative Audit Committee hearing when the final report is publicly released.

16 Colorado Office of the State Auditor

Section II Information That Must be Included in the Proposal

A. Proposal Sections

Proposals must include the following information. Failure to provide all required information may result in disqualification of the proposal.

1. Title Page

Identify the RFP being responded to and the responding organization’s name, local address, telephone number, contact person, and date.

2. Table of Contents

List the material included in the proposal by section and page number.

3. Transmittal Letter

Include a transmittal letter to no more than two pages. The transmittal letter must include the names of the individual(s) authorized to make representations for the organization and their title(s), mailing address(es), email address(es), and telephone number(s).

4. Profile of the Organization

This section of the proposal must:

a. State whether the organization is local, national, or international.

b. Give the location(s) of the office from which the work will be done and number of partners, shareholders, and managers and other professional staff employed at that office.

c. Describe the range of activities performed by the office from which the work will be done, including descriptions of or links to prior work products that demonstrate experience and expertise providing the services described in this RFP.

d. Describe any and all work that (i) is currently being performed for the Colorado

Department of Revenue or any of its divisions, (ii) was performed for the Department of

Revenue or any of its divisions, or the State of Colorado within the past 2 years (i.e., October 2024 – 2026), and (iii) is planned for the Colorado Department of Revenue (or any of its divisions) or the State of Colorado (i.e., proposals submitted for work that has not yet been awarded or contracted).

e. Affirm that the organization is independent for this audit. Prior, current, or planned work disclosed pursuant to Item #4(d) may create a threat to independence. In affirming the organization’s independence, the proposal must include an explanation of why the

Colorado Office of the State Auditor 17 prior, current, or planned work does not impair the organization’s independence, or create the appearance of an impairment, in performing this engagement.

f. Affirm that the organization does not have any past history of substandard work (e.g., a prior engagement has been terminated for poor performance).

g. Provide information on any past, current, or anticipated claims (i.e., knowledge of pending claims) on respondent contracts; explain the litigation, the issue, and its outcome or anticipated outcome.

h. Provide a copy of the results of the organization’s most recent external peer review, if the organization will conduct this audit in accordance with generally accepted government auditing standards.

i. Provide no more than three references for similar work performed.

5. Qualifications of Assigned Personnel

Describe the proposed audit team’s relevant experience and areas of expertise. The proposal must identify the principal staff (i.e., principals, managers, and supervisors/in-charges) who will work on the audit, including any specialists or subcontractors to be used. The proposal must include a resume of all principal staff highlighting their professional qualifications and similar audit work that they have performed. Resumes must be included in an appendix.

The OSA requires the Contractor to conduct a background check and fingerprinting on personnel assigned to the engagement and provide the results to the OSA. The OSA also requires attestation from all Contractor assigned personnel that neither they nor any member of their household will participate in sports betting activities for the duration of the engagement.

6. Organization’s Approach to the Engagement

Include a description of the proposed work plan for the engagement, including proposed procedures, steps, methodologies, approaches, tools, and resources to (a) conduct the work,

(b) ensure fully developed findings, and (c) conclude on the project objectives based on sufficient, appropriate evidence.

The proposal must indicate that the organization will conduct the project in accordance with generally accepted government auditing standards, as well as any other applicable professional standards to which the organization will adhere.

7. Contract Terms and Conditions

The OSA expects the successful bidder to execute and adhere to the terms and conditions in the OSA’s standard contract and its related exhibits (see Section IV–Supplemental

Information). As such, bidders must identify and describe any issues with the terms

18 Colorado Office of the State Auditor and conditions in the OSA’s standard contract and its related exhibits as part of their proposal, including suggested alternative language to address the issues, if appropriate. The OSA will consider this information when evaluating proposals and making the contract award.

8. Compensation and Staff Hours

This section of the proposal must:

a. State the number of professional staff hours estimated to complete the work by staff level, the associated hourly rate, and the resulting total cost. Travel costs incurred in the performance of projects are reimbursable only as a part of the hourly rate and must be covered under said rate and will not be separately reimbursed.

b. Break out total hours estimated to (i) complete each issue/objective, (ii) write findings, and (iii) write and finalize the audit report.

c. State the total inclusive maximum fee for which the work requested will be done.

d. Affirm that all prices, terms, and conditions will be held firm for at least 90 days after the bid opening.

9. Delivery Schedule

Include a detailed proposed schedule of the audit work to be performed and deliverable due dates for the project milestones discussed in Section I(C)–Services Required.

10. Additional Data

Include additional information that is considered essential to the proposal but has not otherwise been provided in response to a specific item in this section.

B. Separate Redacted Proposal for Proposals Containing Proprietary Information

All proposals submitted to the OSA in response to this RFP are subject to the Colorado Open

Records Act (CORA). In accordance with CORA, bidders may request that the OSA withhold proprietary information (i.e., trade secrets) in their proposals from public disclosure pursuant to a CORA request.

Bidders requesting that the OSA withhold proprietary information in their proposal from public disclosure pursuant to a CORA request must submit a separate redacted copy of the proposal to the OSA. In no event may an entire proposal be classified as proprietary information. The OSA will review any designations of proprietary information for reasonableness and appropriateness. If the OSA does not agree with the bidder’s designation of proprietary information, the bidder will be notified and asked to provide additional explanation.

The bidder may be asked to revise its designation of proprietary information and submit a revised redacted proposal.

Colorado Office of the State Auditor 19

Section III Proposal Evaluation Process

A. General

An OSA evaluation team will judge the merits of proposals received in accordance with the evaluation criteria defined below.

During the evaluation process, the evaluation team may, at its discretion, request any one or all bidders to make oral presentations or answer questions about their proposals. Not all bidders may be asked to make such oral presentations.

The OSA will select the bidder whose proposal is most responsive to the State’s needs while being within available resources. The specifications within this RFP represent the minimum performance necessary for response.

B. Mandatory Criteria

• The organization and assigned personnel are independent for the audit engagement and must not hold a substantial financial interest in, or be engaged as counsel, a consultant, a representative, or an agent of Colorado sports betting operators.

C. General Criteria

• Adequacy and completeness of the proposal with respect to the information required by

Section II of the RFP.

• Qualifications and experience of personnel, including any subcontractors, specialists, or consultants, assigned to the audit team.

• Comprehensiveness and appropriateness of the proposed work plan.

• Proposed hours and cost.

• Acceptance of the OSA’s standard contract and its related exhibits without significant revision.

20 Colorado Office of the State Auditor

Section IV Supplemental Information

Attached to this RFP are the following documents:

• Standard OSA contract and related exhibits. See Section II(G) of the RFP for discussion.

The State is developing the standard OSA contract document in an accessible format and in compliance with the state's accessibility rules. The State will provide an accessible version of the standard OSA contract document to the Contractor after the State has completed development of the standard OSA contract document in an accessible format. The accessible OSA contract document will not change or amend any substantive terms of the standard OSA contract that is attached to this RFP.

Note: To view the contract template, please be sure to download the RFP, save the pdf, and then open the saved file in Acrobat. You should be able to see the contract template and the exhibits as attachments. If you cannot see the attachments, click the paperclip icon. You will not see linked attachments in a pdf preview.

The following web links provide additional information that may be useful to potential bidders as they prepare their proposals:

• Colorado Office of the State Auditor o Home page: https://www.colorado.gov/auditor o 2022 Sports Betting Audit: https://content.leg.colorado.gov/content/sports-betting o Recent audit of program costs and fees:

https://content.leg.colorado.gov/sites/default/files/documents/audits/2460p_health_f acility_licensing_program_and_cash_funds_final-accessible.pdf

• Colorado Revised Statutes establishing the Gaming Division and Commission: Colorado

Legal Resources | Statutes Document Page (44-30-101) and the Sports Betting Program

Colorado Legal Resources | Statutes Document Page (44-30-1501)

• Sports betting regulations: Code of Colorado Regulations (1 CCR 207-2)

• Colorado Division of Gaming o Sports Betting Website: https://sbg.colorado.gov/gaming/sports-betting https://www.colorado.gov/auditor https://content.leg.colorado.gov/content/sports-betting https://content.leg.colorado.gov/sites/default/files/documents/audits/2460p_health_facility_licensing_program_and_cash_funds_final-accessible.pdf https://content.leg.colorado.gov/sites/default/files/documents/audits/2460p_health_facility_licensing_program_and_cash_funds_final-accessible.pdf https://advance.lexis.com/documentpage/?pdmfid=1000516&crid=9e66340a-5bbe-4e4c-981e-059e88c374de&nodeid=ABUAAGAABAACAAB&nodepath=%2FROOT%2FABU%2FABUAAG%2FABUAAGAAB%2FABUAAGAABAAC%2FABUAAGAABAACAAB&level=5&haschildren=&populated=false&title=44-30-101.+Short+title.&config=014FJAAyNGJkY2Y4Zi1mNjgyLTRkN2YtYmE4OS03NTYzNzYzOTg0OGEKAFBvZENhdGFsb2d592qv2Kywlf8caKqYROP5&pddocfullpath=%2Fshared%2Fdocument%2Fstatutes-legislation%2Furn%3AcontentItem%3A61P5-X0F1-DYDC-J4MV-00008-00&ecomp=6gf59kk&prid=18683b2d-6776-4dff-a52d-ca76fc19efe5 https://advance.lexis.com/documentpage/?pdmfid=1000516&crid=9e66340a-5bbe-4e4c-981e-059e88c374de&nodeid=ABUAAGAABAACAAB&nodepath=%2FROOT%2FABU%2FABUAAG%2FABUAAGAAB%2FABUAAGAABAAC%2FABUAAGAABAACAAB&level=5&haschildren=&populated=false&title=44-30-101.+Short+title.&config=014FJAAyNGJkY2Y4Zi1mNjgyLTRkN2YtYmE4OS03NTYzNzYzOTg0OGEKAFBvZENhdGFsb2d592qv2Kywlf8caKqYROP5&pddocfullpath=%2Fshared%2Fdocument%2Fstatutes-legislation%2Furn%3AcontentItem%3A61P5-X0F1-DYDC-J4MV-00008-00&ecomp=6gf59kk&prid=18683b2d-6776-4dff-a52d-ca76fc19efe5 https://advance.lexis.com/documentpage/?pdmfid=1000516&crid=47063d0f-f15b-419b-ab34-3dd95b5f594d&nodeid=ABUAAGAABAAQAAB&nodepath=%2FROOT%2FABU%2FABUAAG%2FABUAAGAAB%2FABUAAGAABAAQ%2FABUAAGAABAAQAAB&level=5&haschildren=&populated=false&title=44-30-1501.+Definitions+-+rules.&config=014FJAAyNGJkY2Y4Zi1mNjgyLTRkN2YtYmE4OS03NTYzNzYzOTg0OGEKAFBvZENhdGFsb2d592qv2Kywlf8caKqYROP5&pddocfullpath=%2Fshared%2Fdocument%2Fstatutes-legislation%2Furn%3AcontentItem%3A65S1-0K33-CGX8-00H5-00008-00&ecomp=6gf59kk&prid=e98e69da-fbc5-4e35-85b0-5c548085f6ff https://www.sos.state.co.us/CCR/DisplayRule.do?action=ruleinfo&ruleId=3320&deptID=19&agencyID=45&deptName=Department%20of%20Revenue&agencyName=Division%20of%20Gaming%20-%20Rules%20promulgated%20by%20Gaming%20Commission&seriesNum=1%20CCR%20207-2 https://sbg.colorado.gov/gaming/sports-betting

Colorado Office of the State Auditor 21 o Monthly Sports Betting Reports: https://sbg.colorado.gov/sports-betting-monthly-reports

• Recent Legislative Acts related to Sports Betting:

o Senate Bill 26-131 Sports Betting Protections o House Bill 25-1311 Deductions for Net Sports Betting Proceeds https://sbg.colorado.gov/sports-betting-monthly-reports https://sbg.colorado.gov/sports-betting-monthly-reports https://leg.colorado.gov/bills/SB26-131 https://leg.colorado.gov/bills/HB25-1311

Routing # 2027-XX

STATE OF COLORADO

State Auditor and

Legislative Audit Committee

Performance Audit Contract for the Audit of the

INSERT NAME OF ENTITY

With

INSERT NAME OF CONTRACTOR

TABLE OF CONTENTS

A. Parties

B. Effective Date and Notice of Nonliability

C. Recitals

D. Definitions

E. Term and Early Termination

F. Statement of Work

G. Payments to Contractor

H. Reporting - Notification

I. Contractor Records

J. Work Product-Confidential Information-State Records

K. Conflicts of Interest

L. Representations and Warranties

M. Insurance

N. Dispute Resolution

O. Breach of Contract

P. Remedies

Q. Notices and Representatives

R. Rights in Workpapers

S. Statewide Contract Management System - Exemption

T. General Provisions

U. Colorado Legislative Branch Special Provisions

V. Signature Page .............................................................................................. Error! Bookmark not defined.

W. Exhitib A - Statement of Work ..................................................................................................... Exhibit A-1

X. Exhibit B - Request for Proposal ................................................................................................... Exhibit B-1

Y. Exhibit C - Modificatiions to Contractor's Proposal ...............................................................Exhibit C-1

Z. Exhibit D - Contractor's Proposal................................................................................................ Exhibit D-1

AA. Exhibit E - Information Security Policy for Contractors.......................................................Exhibit E-1

BB. Exhibit F - Compensation and Procedures for Billing ........................................................... Exhibit F-1

CC. Exbibit G - Developing and Presenting Performance Audit Findings ............................. Exhibit G-1

DD. Exhibit H - Reporting Requirements and Format for Separately Issued Reports ........ Exhibit H-1

EE. Exhibit I - Safeguarding Requirements for Federal Tax Information............................... Exhibit I-1

A. Parties

This Contract (“Contract”) is entered into by and between insert contractor’s name

(“Contractor”), and the STATE OF COLORADO (the “State”) acting by and through and for the use and benefit of the State Auditor and the Legislative Audit Committee. Contractor and the State agree to the following terms and conditions specified in this contract.

B. Effective Date and Notice of Nonliability

Effective Date of this Contract is the date on which this Contract has been approved and signed by all of the Parties, including on behalf of the State, the State Auditor or the State Auditor’s designee and the Chair of the Legislative Audit Committee, and also signed, after legal review, by the Director of the Office of Legislative Legal Services or the Director’s designee. This Contract is not effective or enforceable before the Effective Date, and the State is not liable to pay or reimburse Contractor for any Work performed or costs or expenses incurred by the Contractor before the Effective Date or after the expiration or other termination of this Contract.

C. Recitals

1. Authority, Appropriation, And Approval

Authority to enter into this Contract exists in §2-3-103(1), C.R.S., funds have been budgeted, appropriated, and otherwise made available pursuant to Fund 1000, Appropriation Code

MGFCC4010, Contract Encumbrance Number 20XX-XX, and a sufficient unencumbered balance of the funds remains available for payment. Required approvals, clearance, and coordination have been accomplished from and with appropriate agencies.

2. Consideration

The Parties acknowledge that the mutual promises and covenants contained in this Contract, including the Exhibits attached to and incorporated by reference in this Contract are sufficient and adequate to support this Contract.

3. Purpose

The State is engaging Contractor to render professional auditing services as specified in this

Contract, including the Exhibits attached to and incorporated by reference into this

Contract.

D. Definitions

The following terms shall be construed and interpreted as follows:

1. Audit Report

“Audit Report” means the final performance audit report due to the State in accordance with this Contract.

2. Audited Agency

“Audited Agency” means the insert department/agency name.

3. Business Day

“Business Day” means any day on which the State is open and conducting business, but does not…