RFP_Audit and Agreed Upon Procedures.pdf

TOWN OF SOUTH KINGSTOWN

REQUEST FOR PROPOSAL

FOR

AUDIT AND AGREED-UPON PROCEDURES SERVICES

for the fiscal year ending June 30, 2025, with the option of auditing its financial statements for each of the 2 subsequent fiscal years

April 18, 2025

180 HIGH STREET

WAKEFIELD, RI 02879

Bid Reference #SK0034FD

Town of South Kingstown

Request for Proposals

Auditing and Agreed-Upon Procedures Services

April 18, 2025 Page 2

TABLE OF CONTENTS

I. INTRODUCTION

A. General Information B. Term of Engagement

II. NATURE OF AUDIT SERVICES REQUIRED

A. General B. Scope of Work to be Performed C. Auditing Standards to be followed D. Reports to be Issued E. Special Considerations F. Additional Work G. Documentation Retention and Access to Audit Documentation

III. NATURE OF AGREED-UPON PROCEDURES SERVICES REQUIRED

IV. DESCRIPTION OF GOVERNMENT

A. Contact’s Phone Numbers B. Background Information C. Fund Structure D. Budgetary Basis of Accounting E. Computer Systems F. Availability of Prior Year Audit Reports and Documentation

V. TIME REQUIREMENTS

A. Proposal Calendar B. Notification and Contract Dates C. Date Audit May Commence D. Schedule for Fiscal Year 2025 Audit E. Date Final Report is Due

VI. ASSISTANCE TO BE PROVIDED AND REPORT PREPARATION

A. Finance Department and Clerical Assistance B. Information Technology Assistance C. Statement and Schedule Preparation D. Work Area, Telephones and Photocopying E. Report Preparation

VII. PROPOSAL REQUIREMENTS

A. General Requirements B. Technical Proposal C. Sealed Dollar Cost Bid

VIII. EVALUATION PROCEDURES

A. Evaluation Criteria B. Oral Presentations C. Final Selection D. Right to Reject Proposals

Appendices

APPENDIX A - FORM FOR PROPOSER GUARANTEES

APPENDIX B – FORM FOR PROPOSER WARRANTIES

APPENDIX C – FORM FOR SCHEDULE OF PROFESSIONAL FEES AND EXPENSES

APPENDIX D - UCOA ANNUAL COMPLIANCE TESTING REQUIREMENTS

April 18, 2025 Page 3

I. INTRODUCTION

A. General Information

The Town of South Kingstown is requesting proposals from qualified firms of certified public accountants to audit its financial statements for the fiscal year ending June 30, 2025, with the option of auditing its financial statements for each of the 2 subsequent fiscal years. Continuation beyond the initial year of the three-year contract will be at the discretion of the Town of South

Kingstown. These audits are to be performed in accordance with generally accepted auditing standards, established by the American Institute of Certified Public Accountants, and the standards for financial audits set forth in the Government Auditing Standards issued by the Comptroller

General of the United States.

These audits are also to be performed in accordance with the provisions of the federal Single Audit

Act of 1984 as amended by the Single Audit Act Amendments of 1996 and U.S. Office of

Management and Budget (OMB) Guidance 2 CFR part 200 - Uniform Administrative

Requirements, Cost Principles, and Audit Requirements for Federal Awards - Subpart F – Audit

Requirements.

The minimum standards as required by the Office of the Auditor General of the State of Rhode

Island and the Department of Education of the State of Rhode Island should also be followed.

The South Kingstown School Department implemented a Uniform Chart of Accounts (UCOA).

The auditors engaged to perform the annual audit of the District shall also be engaged to report on their tests of compliance with the School UCOA requirements in an agreed-upon procedures compliance attestation format.

There is no expressed or implied obligation for the Town of South Kingstown to reimburse responding firms for any expenses incurred in preparing proposals in response to this request.

To be considered, three copies of a proposal must be received by Julie A. Mason, Procurement

Administrator at 180 High Street, Wakefield, RI 02879 by 10:00 AM on May 2, 2025, at which time they will be opened. The Town of South Kingstown reserves the right to reject any or all proposals submitted.

During the evaluation process, the Town reserves the right, where it may serve the Town of South

Kingstown's best interest, to request additional information or clarifications from proposers, or to allow corrections of minor errors or omissions. At the discretion of the Town of South Kingstown, firms submitting proposals may be requested to make oral presentations as part of the evaluation process.

The Town of South Kingstown reserves the right to retain all proposals submitted and to use any ideas in a proposal regardless of whether that proposal is selected. Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposals, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the

Town of South Kingstown and the firm selected.

April 18, 2025 Page 4

It is anticipated that the selection of a firm will be completed by May 27, 2025. Following the notification of the selected firm it is expected a contract will be executed between both parties by

June 4, 2025.

B. Term of Engagement

A three-year contract is contemplated, subject to the annual review and recommendation of the

Finance Director with the concurrence of the South Kingstown Town Council and the Chief

Financial Officer of the South Kingstown School Department.

II. NATURE OF AUDIT SERVICES REQUIRED

A. General

The Town of South Kingstown is soliciting the services of qualified firms of certified public accountants to audit its financial statements for the fiscal year ending June 30, 2025 with the option to audit the Town of South Kingstown's financial statements for each of the two subsequent fiscal years. These audits are to be performed in accordance with the provisions contained in this request for proposals.

B. Scope of Work to be Performed

The Town of South Kingstown desires the auditor to express an opinion on the fair presentation of its basic financial statements, which will include government-wide financial statements, fund financial statements, and notes to the financial statements in conformity with generally accepted accounting principles.

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

• 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 Town 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:

April 18, 2025 Page 5

• 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.

• 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

• 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.

The auditor is not required to audit the statistical section of the report.

Other schedules may be required by the Town 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”).

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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 (1) municipal reportable government services and (2) all school services (consistent with RIDE UCOA requirements). 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 or school’s general fund.

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.

C. Auditing Standards to be followed

To meet the requirements of this request for proposals, the audit shall be performed in accordance with:

Generally accepted auditing standards as set forth by the American Institute of Certified Public

Accountants, the standards for financial audits set forth in the Government Auditing Standards issued by the Comptroller General of the United States, and the provisions of the Single Audit Act of 1984 as amended by the Single Audit Act Amendments of 1996 and the provisions of U.S.

Office of Management and Budget (OMB) Guidance 2 CFR part 200 - Uniform Administrative

Requirements, Cost Principles, and Audit Requirements for Federal Awards - Subpart F – Audit https://municipalfinance.ri.gov/municipal-transparency

April 18, 2025 Page 7

D. Reports to be Issued

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

1. The fair presentation of the financial statements in conformity with generally accepted accounting principles based upon 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,

2. Supplementary financial statements, schedules and information being fairly stated in all material respects in relation to the basic financial statements as a whole.

a. 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.

3. Internal control over financial reporting and on compliance and other matters based upon an audit of financial statements performed in accordance with

Government Auditing Standards,

a. In the required reports on internal controls, the auditor shall communicate any significant deficiencies found during the audit. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis.

b. Significant deficiencies that are also material weaknesses shall be identified as such in the report.

c. Other matters, for example, control deficiencies that are not significant deficiencies or material weaknesses discovered by the auditor shall be reported in a separate letter to management.

d. The report on compliance shall include all material instances of noncompliance. All nonmaterial instances of noncompliance shall be reported in a separate management letter.

4. Reports and summaries related to federal financial assistance as required by

OMB Guidance (the auditor should refer to applicable OMB guidance in effect

April 18, 2025 Page 8 and the applicable AICPA Audit Guide for reporting guidance) and 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.

5. 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.

6. Other reports that may be requested by the Director of Revenue and/or Auditor

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

The management letter should include comments, and/or recommendations beyond those included in the reports described above, on such matters as:

1. Policies, procedures and practices employed by the municipality and by the

School Department,

2. Weaknesses in the internal controls that are not “significant deficiencies,”

3. Use of resources to provide a governmental service in a reasonable, judicious, economical, and efficient manner, and

4. Compliance with state laws pertaining to the municipality and with rules and regulations established by the municipality.

Upon completion of the audit the management letter will be submitted to the Finance Director of

South Kingstown, with copies to the Director of Revenue and the Auditor General.

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.

Fraud and illegal acts. Auditors shall be required to make an immediate, written report of all fraud and illegal acts of which they become aware to the following parties:

1. Town Manager

2. Town Council

E. Special Considerations

Outlined below are certain additional requirements, which the Town requires. The cost of providing these services should be included in the all-inclusive maximum price.

April 18, 2025 Page 9

1. The Town of South Kingstown will send its Annual Comprehensive Financial

Report (ACFR) to the Government Finance Officers Association of the United

States and Canada for review in its Certificate of Achievement of Excellence in

Financial Reporting program. While all supplemental information including the

Letter of Transmittal and the Statistical Section will be prepared by the Finance

Department, the auditor will be responsible for the final preparation and printing of the financial statements to meet the necessary guidelines of the program. Copies of prior year ACFRs can be found under the Finance section:

https://www.southkingstownri.gov/DocumentCenter.

2. Draft copies of all audit reports and management letters shall be submitted to the Finance Director of the Town prior to the exit conference so that there will be adequate time for review.

3. The supplementary schedule of expenditures of federal awards and related auditor's report, as well as the reports on internal control and compliance, are to be issued as part of the annual comprehensive financial report.

4. Difficulties may be encountered in implementing and complying with specific reporting requirements mandated by the GASB. The auditor will be responsible to work with the Finance Director to ensure proper implementation and compliance with any new pronouncements effective during the contract.

F. Additional Work

1. Any amendments to the contract for additional work will be negotiated in good faith. Provided, however, in the event that the parties cannot mutually agree on additional work to be performed and the cost for said work, then the Town, at its option may rescind the option period. All potential additional work outside of the scope of the contract will be discussed in advance of work being completed. Any such amendments must have a written estimate to include the number of hours and dollar amounts required to complete the task to be submitted to the School Department and to the Director of Finance.

2. Any such additional work agreed to between the Town of South Kingstown and the firm shall be performed at the same rates set forth in the schedule of fees and expenses included in the sealed dollar cost bid (See Section VII, C. Sealed

Dollar Cost Bid, Section 4, Rates for Additional Professional Services).

3. 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 South Kingstown.

April 18, 2025 Page 10

G. Documentation Retention and Access to Audit Documentation

All audit documentation and reports must be retained, at the auditor's expense, for a minimum of five (5) years, unless the firm is notified in writing by the Town of South Kingstown of the need to extend the retention period. The auditors will be required to make copies of all audit documentation requested by the Finance Director and the Director of Administrative Services.

In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review audit documentation relating to matters of continuing accounting significance.

As required by Section 45-10-4 of the RI General Laws, it is understood that the contract between the municipality 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, audit documentation, and memorandums. Audit documentation 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.

III. NATURE OF AGREED-UPON PROCEDURES SERVICES REQUIRED

The South Kingstown School Department implemented a Uniform Chart of Accounts (UCOA) as promulgated by the Auditor General and Commissioner of Education in accordance with Rhode

Island General Law 16-2-9.4. Each municipal school district, regional school district, collaborative, or charter school, which is required to adopt the UCOA, shall have additional compliance testing procedures designed to assess compliance with UCOA requirements and the entity’s effectiveness of internal control over compliance with those requirements.

See Appendix D for the agreed-upon procedures. Please note that the agreed-upon procedures may be subject to subsequent modification.

Twenty copies of the final agreed-upon procedures report on the School Department’s compliance with the Uniform Chart of Accounts shall be delivered to the Director of Finance.

Auditors should have performed the test work necessary to complete the UCOA Agreed-Upon

Procedures before issuing the audited financial statements. The District must provide the agreed-upon procedures report to the Rhode Island Department of Education and the Office of the Auditor

General at the conclusion of the annual audit or the revised timeline established by the Rhode

Island Department of Education and the Office of the Auditor General.

April 18, 2025 Page 11

IV. DESCRIPTION OF GOVERNMENT

A. Contact’s Phone Numbers (401-789-9331)

Brian Silvia Finance Director Ext. 1206

Rosalie Bouchard Deputy Finance Director Ext. 1210

Rachel Klensch School Accounting Manager (401-360-1305)

Ryan Kilpatrick Chief Financial Officer (401-360-1324)

B. Background Information

The Town of South Kingstown serves an area of 62.3 square miles with an estimated population of 31,931. The Town of South Kingstown's fiscal year begins on July 1 and ends on June 30.

The accounting and financial reporting functions of the Town of South Kingstown, with the exception of the School department, are centralized within the Finance department.

C. Fund Structure The Town of South Kingstown will use the following fund types and account groups in its financial reporting for the fiscal year ending June 30, 2025:

Fund Types/Account Groups Number of Number

Individual with Legally

Funds Adopted Budgets

Governmental Funds

Major Funds

General Fund including School Unrestricted Fund 1 2

School Trust Fund 1

Debt Service Fund 1 1

Non-Major Government Funds

Special Revenue Funds

Town Funds 22 4

School Funds 3

Capital Project Funds 17

Permanent Funds

Proprietary Funds

Major Funds

Enterprise Funds

Water 1 1

Wastewater 1 1

Solid Waste 1 1

School Cafeteria 1

April 18, 2025 Page 12

* The total number of funds, in each category is subject to change throughout the term of the contract.

D. Budgetary Basis of Accounting

The Town of South Kingstown prepares its budgets on a basis consistent with generally accepted accounting principles with two exceptions. Major encumbrances at year-end are considered to be expenditures for budgetary purposes but not for GAAP purposes. In addition, use of fund balance designated for operations is recognized as a revenue on a budgetary basis.

E. Computer Systems

The Town has migrated its Tyler/MUNIS applications to Tyler’s SaaS hosted platform in May

2022. All financial applications are processed through this system.

F. Availability of Prior Year Audit Reports and Documentation

Interested proposers who wish to review prior years' audit reports should go to the Town’s website https://www.southkingstownri.gov/DocumentCenter or for prior management letters, contact

Rosalie Bouchard at rbouchard@southkingstownri.gov. The Town of South Kingstown will use its best efforts to make supporting audit documentation available to proposers to aid their response to this request for proposals.

Fund Types/Account Groups Number of Number

Individual with Legally

Funds Adopted Budgets

Internal Service Funds 1

Computer Replacement Fund 1

Health Care Management Fund 1

Compensated Absences 1

Employee Training Fund 1

Employee Claims & Settlements 1

Fiduciary Funds

Cemetery Care Private Purpose Trust Fund 1

OPEB Trust Fund 1

60 10

April 18, 2025 Page 13

V. TIME REQUIREMENTS

A. Proposal Calendar Request for proposals issued April 18, 2025

Pre-proposal Questions – 4PM April 25, 2025

Due date for proposals– 10AM May 2, 2025

B. Notification and Contract Dates Notification of Award May 27, 2025

Contract date June 3, 2025

C. Date Audit May Commence

The Town of South Kingstown will have records ready for audit and available by

September 30, 2025.

D. Schedule for Fiscal Year 2025 Audit

The following shall be completed by the auditor no later than the dates indicated.

(Note: A similar schedule will be developed for audits of future fiscal years if the

Town of South Kingstown exercises its option for additional audits.)

1. Interim Work:

The auditor shall complete all interim work by July 15, 2025.

2. Detailed Audit Plan:

The auditor shall provide the Town of South Kingstown by June 16, 2025, both a detailed audit plan and a list of all schedules to be prepared by the Town of

South Kingstown.

3. Fieldwork:

The auditor shall complete all fieldwork by October 29, 2025.

4. Draft Reports:

The auditor shall have drafts of the audit report(s) and recommendations to management available for review by the Finance Director by December 1, 2025.

E. Date Final Report is Due

The Finance Director shall prepare preliminary trial balances, and all required supplementary schedules by September 30, 2025. The auditor shall provide all recommendations, revisions and suggestions for improvement to the Finance Director by

April 18, 2025 Page 14

September 30, 2025. A draft auditor's report shall be delivered to the Finance Director by

December 1, 2025.

The Finance Director will complete a review of the draft report as expeditiously as possible.

During that period, the auditor should be available for any meetings that may be necessary to discuss the audit reports of the Town and School. Once all issues for discussion are resolved, the final signed report shall be delivered to the Finance Director. It is anticipated that this process will be completed and the final report delivered by December 9, 2025.

The final report, 20 signed copies, and an electronic version of the full report in “pdf” format suitable for posting on the Town’s website and for the Town of South Kingstown’s submission to the Auditor General and the state Director of Revenue should be delivered to the Finance Director at 180 High Street, Wakefield, RI 02879.

VI. ASSISTANCE TO BE PROVIDED AND REPORT PREPARATION

A. Finance Department and Clerical Assistance

The Finance department staff and responsible management personnel will be available during the audit to assist the firm by providing information, documentation and explanations. The preparation of confirmations will be the responsibility of the Town of

South Kingstown based on information requested by the auditor.

B. Information Technology Assistance

The IT Staff will be available to provide systems documentation and explanations.

C. Statement and Schedule Preparation

The staff of the Town of South Kingstown Finance Department will prepare the statements and schedules requested by the auditor by September 30, 2025.

D. Work Area, Telephones and Photocopying

The Town of South Kingstown will provide the auditor with reasonable workspace, desks and chairs. The auditor will also be provided with access to Town facilities and equipment, if required.

E. Report Preparation

April 18, 2025 Page 15

Report preparation, based on trial balances and information prepared and provided by the

Town of South Kingstown, editing and printing shall be the responsibility of the auditor.

ACFR sections in the report will be prepared by the Town and delivered to the auditor for printing. The Management Discussion and Analysis (MD&A) section of the report will require that some pages are printed in color. Please review the 2024 audit report for current requirements. Future changes to the MD&A section may require additional color printing.

VII. PROPOSAL REQUIREMENTS

A. General Requirements

1. Pre-proposal Questions

Questions relevant to the preparation of a competitive proposal must be submitted in writing to the below noted contact persons by email no later than 4:00 p.m. on

April 25, 2025. Responses to all written questions will be emailed to registered vendors of the Town’s bidder notification system that is located on the Town’s

Website:https://www.southkingstownri.gov/165/Invitations-to-Bid , followed by the selection of link to “Enter Vendor Notification System”.

Questions related to this RFP must be submitted on the Procurement website.

2. Submission of Proposals

The following material is required to be received by 10:00 a.m. on May 2, 2025, for a proposing firm to be considered:

a. A master copy (so marked) of a Technical Proposal and two copies to include the following:

i. Title Page

Title page showing the request for proposals' subject; the firm's name; the name, address and telephone number of a contact person; and date of the proposal.

ii. Table of Contents

iii. Transmittal Letter

A signed letter of transmittal briefly stating the proposer's understanding of the work to be done, the commitment to perform the work within the time period, a statement why the firm believes itself to be best qualified to perform the engagement and a statement that the proposal is a firm and irrevocable offer for a three year period.

iv. Detailed Proposal

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The detailed proposal should follow the order set forth in Section

VII, B of this request for proposals.

v. Executed copies of Proposer Guarantees and Proposer Warranties, attached to this request for proposals (Appendix A and Appendix B)

b. The proposer shall submit an original and 2 copies of a dollar cost bid

(Appendix C) in a separate sealed envelope marked as follows:

SEALED DOLLAR COST BID PROPOSAL FOR

FOR

PROFESSIONAL AUDITING

AND AGREED-UPON PROCEDURES SERVICES

c. Proposers should send the completed proposal consisting of the two separate envelopes to the following address:

JULIE A. MASON, PROCUREMENT ADMINISTRATOR

180 HIGH STREET

WAKEFIELD, RI 02879

B. Technical Proposal

1. General Requirements

The purpose of the technical proposal is to demonstrate the qualifications, competence and capacity of the firms seeking to undertake an independent audit of the Town of South Kingstown in conformity with the requirements of this request for proposals. As such, the substance of proposals will carry more weight than their form or manner of presentation. The technical proposal should demonstrate the qualifications of the firm and of the particular staff to be assigned to this engagement. It should also specify an audit approach that will meet the request for proposals requirement.

THERE SHOULD BE NO DOLLAR UNITS OR TOTAL COSTS INCLUDED IN THE

TECHNICAL PROPOSAL DOCUMENT.

The technical proposal should address all the points outlined in the request for proposals

(excluding any cost information which should only be included in the sealed dollar cost bid.) The proposal should be prepared simply and economically, providing a straightforward, concise description of the proposer's capabilities to satisfy the requirements of the request for proposals.

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While additional data may be presented, the following subjects, items Nos. 2 through 9, must be included. They represent the criteria against which the proposal will be evaluated.

2. Independence

The firm should provide an affirmative statement that it is independent under the requirements of the American Institute of Certified Public Accountants and Government Auditing Standards.

The firm should also list and describe the firm's professional relationships involving the Town of

South Kingstown or any of its agencies or component units for the past five (5) years, together with a statement explaining why such relationships do not constitute a conflict of interest relative to performing the proposed audit.

3. License to Practice in Rhode Island

An affirmative statement should be included indicating that the firm and all assigned key professional staff are properly licensed to practice in Rhode Island.

4. Firm Qualifications and Experience

The proposal should state the size of the firm, the size of the firm's governmental audit staff, the location of the office from which the work on this engagement is to be performed and the number and nature of the professional staff to be employed in this engagement on a full-time basis and the number and nature of the staff to be so employed on a part-time basis.

Representation that the private auditor has an appropriate internal quality control system in place and has participated in an external quality control review program as required by Government

Auditing Standards is required. The firm is also required to submit a copy of the report on its most recent external quality control review report and also submit the results of any subsequent review performed during the term of the contract, as required by Government Auditing Standards, with a statement whether that quality control review included a review of specific government engagements. The firm will 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.

Representation that the private auditor is familiar with generally accepted accounting principles for state and local government units and with the generally accepted auditing standards promulgated by the American Institute of Certified Public Accountants; the standards for financial audits set forth in Government Auditing Standards issued by the Comptroller General of the United

States; and the Single Audit Act of 1984 as amended in July 1996 and the provisions of OMB

Guidance 2 CFR part 200 - Uniform Administrative Requirements, Cost Principles, and Audit

Requirements for Federal Awards - Subpart F – Audit Requirements. The private auditor will conduct the audit and report in accordance with those standards.

The firm shall list 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.

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The firm shall also provide information on the results of any federal or state desk reviews or field reviews of its audits. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm or its partners with state regulatory bodies or professional organizations.

The firm must provide information regarding any lawsuits or claims against the firm, pending or resolved.

An affirmative statement should be included indicating that the firm meets the continuing educational requirements of Government Auditing Standards.

5. Partner, Supervisory and Staff Qualifications and Experience

The firm should identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement and indicate whether each such person is licensed to practice as a certified public accountant in

Rhode Island. The senior accountant in charge of the fieldwork shall be a certified public accountant. The firm also should provide information on the government auditing experience of each person, including information on meeting continuing professional education requirements of

Government Auditing Standards for the past three (3) years and membership in professional organizations relevant to the performance of this audit.

The firm should provide as much information as possible regarding the number, qualifications, experience and training, including relevant continuing professional education, of the specific staff to be assigned to this engagement. The firm also should indicate how the quality of staff over the term of the agreement will be assured. The firm should identify any sub-contractors, co-proposers, or other entity that will be used to provide the professional services sought by the request for proposal.

Engagement partners, managers, other supervisory staff and specialists may be changed if those personnel leave the firm, are promoted or are assigned to another office. These personnel may also be changed for other reasons with the express prior written permission of the Town of South

Kingstown. However, in either case, the Town of South Kingstown retains the right to approve or reject replacements.

Consultants and firm specialists mentioned in response to this request for proposals can only be changed with the express prior written permission of the Town of South Kingstown, which retains the right to approve or reject replacements.

Other audit personnel may be changed at the discretion of the proposer provided that replacements have substantially the same or better qualifications or experience. However, the Town of South

Kingstown retains the right to approve or reject replacements.

6. Similar Engagements with Other Government Entities

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For the firm's office that will be assigned responsibility for the audit, list the most significant engagements (maximum of 5) performed in the last five years that are similar to the engagement described in this request for proposal. These engagements should be ranked on the basis of total staff hours.

Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact.

7. Specific Audit Approach

The proposal should set forth a work plan, including an explanation of the audit methodology to be followed, to perform the services required in Section II of this request for proposals.

NO DOLLARS SHOULD BE INCLUDED IN THE TECHNICAL PROPOSAL

Proposers will be required to provide the following information on their audit approach:

a. Proposed segmentation of the engagement,

b. level of staff and number of hours to be assigned to each proposed segment of the engagement and expected completion date of the audit,

c. sample sizes and the extent to which statistical sampling is to be used in the engagement,

d. extent of use of software in the engagement,

e. type and extent of analytical procedures to be used in the engagement,

f. approach to be taken to gain and document an understanding of the

Town of South Kingstown's internal control structure,

g. Approach to be taken in determining laws and regulations that will be subject to audit test work, and

h. Approach to be taken in drawing audit samples for purposes of test compliance

8. Identification of Anticipated Potential Audit Problems

The proposal should identify and describe any anticipated potential audit problems, the firm's approach to resolving these problems and any special assistance that will be requested from the

Town of South Kingstown.

9. Report Format

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The proposal should include sample formats for required reports. A sample ACFR must be enclosed for the Town's review.

C. Sealed Dollar Cost Bid

1. Total All-inclusive Maximum Price

The sealed dollar cost bid should contain all pricing information relative to performing the audit and agreed-upon procedures engagements as described in this request for proposals. The dollar cost bid should specifically identify the fee for the audit services and the fee for the agreed-upon procedures. The total all-inclusive maximum price to be bid is to contain all direct and indirect costs including all out-of-pocket expenses.

The Town of South Kingstown will not be responsible for expenses incurred in preparing and submitting the technical proposal or the sealed dollar cost bid. Such costs should not be included in the proposal.

The first page of the sealed dollar cost bid should include the following information:

a. Name of Firm

b. Certification that the person signing the proposal is entitled to represent the firm, empowered to submit the bid and authorized to sign a contract with the Town of

South Kingstown.

c. A Total All-inclusive Maximum Price for the 2025 engagement.

2. Rates by Partner, Manager, Senior and Staff Level Times Hours Anticipated for Each

The second page of the sealed dollar cost bid should include a schedule of professional fees and expenses, presented in the format provided in the attachment (Appendix C) that supports the total all-inclusive maximum price.

3. Out-of-pocket Expenses Included in the Total All-inclusive Maximum

Price and Reimbursement Rates

All expense reimbursements will be charged against the total all-inclusive maximum price submitted by the firm.

4. Rates for Additional Professional Services

If it should become necessary for the Town of South Kingstown to request the auditor to render any additional services to either supplement the services requested in this request for proposals or to perform additional work as a result of the specific recommendations included in any report issued on this engagement, then such additional work shall be performed only if set forth in an

April 18, 2025 Page 21 addendum to the contract between the Town of South Kingstown and the firm. Any such additional work agreed to between the Town of South Kingstown and the firm shall be performed at the same rates set forth in the schedule of fees and expenses included in the sealed dollar cost bid. Firms may quote different prices for certain times of the year.

5. Manner of Payment

Progress payments will be made on the basis of hours of work completed during the course of the engagement and out-of-pocket expenses incurred in accordance with the firm's dollar cost bid proposal. Interim billings shall cover a period of not less than a calendar month.

VIII. EVALUATION PROCEDURES

A. Evaluation Criteria

Proposals will be evaluated using three sets of criteria. Firms meeting the mandatory criteria will have their proposals evaluated and scored for both technical qualifications and price. The following represent the principal selection criteria, which will be considered during the evaluation process.

1. Mandatory Elements

a. The audit firm is independent and licensed to practice in Rhode Island.

b. The audit firm's professional personnel have received adequate continuing professional education within the preceding two years.

c. The firm has no conflict of interest with regard to any other work performed by the firm for the Town of South Kingstown.

d. The firm submits a copy of its most recent external quality control review report and the firm has a record of quality audit work.

e. The firm adheres to the instruction in this request for proposals on preparing and submitting the proposal.

f. The firm’s capacity to meet required deadlines (e.g. staffing levels and other government engagements with similar due dates).

g. The firm’s track record for meeting contractual deadlines for completion of audits.

h. The firm’s experience in producing Annual Comprehensive Financial

Reports for municipal clients that have subsequently received a

Government Finance Officers Association‘s Certificate of Achievement

Award for their ACFRs.

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2. Technical Qualifications:

a. General Qualifications and Experience

b. Governmental Expertise and Experience

1. The firm's past experience and performance on comparable government engagements including the issuance of an annual comprehensive financial report.

2. The quality of the firm's professional personnel to be assigned to the engagement and the quality of the firm's management support personnel to be available for technical consultation.

c. Audit Approach

1. Adequacy of proposed staffing plan for various segments of the

Engagement.

2. Adequacy of sampling techniques.

3. Adequacy of analytical procedures.

4. Adequacy of number of hours proposed for engagement

3. Price

COST WILL NOT BE THE PRIMARY FACTOR IN THE SELECTION OF AN AUDIT FIRM.

An evaluation committee will be comprised of individuals knowledgeable about auditing and financial reporting matters.

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 100 100

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* 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

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.

B. Oral Presentations

During the evaluation process, the Town may, at its discretion, request any one or all firms to make an oral presentation. Such presentation will provide firms with an opportunity to answer any questions the Town may have on a firm's proposal. Not all firms may be asked to make such oral presentations.

C. Final Selection

The Town Council will select a firm based upon the recommendation of the Town’s

Administrative staff and approval by the Rhode Island Auditor General’s Office.

It is anticipated that a firm will be selected by May 27, 2025. Following notification of the firm selected, it is expected a contract will be executed between both parties by June 3, 2025.

D. Right to Reject Proposals

Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposals unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the Town of South Kingstown and the firm selected.

The Town of South Kingstown reserves the right without prejudice to reject any or all proposals.

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Appendices

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APPENDIX A - FORM FOR PROPOSER GUARANTEES

I. The proposer certifies it can and will provide and make available, at a minimum all services set forth in Section II, Nature of Audit Services Required and Section III, Nature of Agreed-

Upon Procedures Required.

Signature of Official:______________________________________

Name (typed):_______________________________________________

Title:______________________________________________________

Firm:_______________________________________________________

Date:_______________________________________________________

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APPENDIX B – FORM FOR PROPOSER WARRANTIES

A. Proposer warrants that it is willing and able to comply with State of Rhode Island laws with respect to foreign (non-state of Rhode Island) corporations.

B. Proposer warrants that it will maintain in full force at all times professional liability to include errors and omissions in the minimum amount of $1 million per occurrence and supply evidence of the same to the Town, listing the Town as additional insured. In addition, the proposer shall also supply evidence of Workers Compensation insurance at the State of RI minimum required levels.

C. Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the express written permission of the Town of South Kingstown.

D. Proposer warrants 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.

E. Proposer warrants that all information provided by it in connection with this proposal is true and accurate. Proposer further understands that any representations made 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.

F. Proposer warrants that there are no client conflicts that would inhibit the ability to perform the audit in accordance with…