TOWN OF FOREST HEIGHTS

REQUEST FOR PROPOSALS - GRANT PROGRAM AUDIT SERVICES

RFP-FY27-0002

Issue Date: Thursday, October 8, 2026 Proposal Due Date: Thursday, October 22, 2026, at 5:00 PM

All proposals shall be submitted electronically in PDF format. No hard copies will be accepted or received by the Town. Proposals must be received by the stated deadline. The Town reserves the right to reject proposals received after the deadline.

Town of Forest Heights 5508 Arapahoe Drive Forest Heights, Maryland 20745

Attn: Clate D. Jackson, MPA, JM Town Administrator

Email: info@forestheightsmd.gov

1. Purpose

The Town of Forest Heights (“Town”) is soliciting proposals from qualified independent certified public accounting firms, governmental auditing firms, or other qualified professional organizations with demonstrated experience conducting municipal, governmental, nonprofit, grant-program, compliance, and financial audits. (See Scope of Services)

2. Audit period

The audit shall examine grant activity occurring during the following periods:

January 10, 2023, through April 10, 2023, & May 17, 2024, through January 15, 2025.

The selected auditor may examine records outside these dates when reasonably necessary to establish the origin, administration, payment, reporting, modification, closeout, or final disposition of a grant or project occurring within the audit periods.

3. Background and objective

The Town seeks an independent review of its grant administration activities during the identified periods. The engagement is intended to provide the Town with a complete and traceable accounting of grant activity and an assessment of whether grant programs were administered in accordance with applicable Town requirements, grant terms, governing mailto:info@forestheightsmd.gov agreements, funding restrictions, and generally accepted principles of governmental accountability.

The auditor shall develop sufficient understanding of the Town's grant administration process to determine how grant opportunities were identified and communicated, how applications were received and evaluated, how award decisions were made and documented, how funds were authorized and disbursed, and how recipients were monitored following award.

The auditor shall not limit the engagement to a review of financial transactions. The audit shall examine the relationship between the application, award, project, payment, supporting documentation, and required performance or financial reporting so that the Town can determine whether each grant can be traced from its initial application through its final disposition.

4. Scope of services

The auditor shall examine, cross-check, and verify all available records associated with grants administered during the identified audit periods. This shall include, as applicable, grant announcements, applications, application attachments, eligibility documentation, scoring or evaluation materials, review committee records, staff recommendations, award determinations, approvals, grant agreements, amendments, correspondence, invoices, receipts, payment records, cancelled checks or electronic payment records, financial reports, project reports, correspondence with grant recipients, monitoring records, closeout documentation, and other records reasonably necessary to complete the engagement.

The auditor shall identify each grant opportunity and project falling within the audit period and prepare a comprehensive grant inventory. For each grant or project, the audit should identify the name and nature of the project, the funding source, the applicable grant program, the date the opportunity was announced or made available, the parties that submitted applications (including contracts that were issued as ‘sole-sourced), the applicants' requested amounts, the awardees, the amount requested, the amount awarded, the amount actually paid, the dates of payments, and the current reporting or closeout status.

The auditor shall independently reconcile the grant inventory to the Town's financial records. This reconciliation shall include comparison of award amounts against actual disbursements and, where appropriate, comparison of payment records against bank records, general ledger entries, accounts payable records, purchase orders, invoices, contracts, receipts, or other supporting documentation.

The auditor shall examine whether grant awards were supported by appropriate authorization and whether the Town maintained documentation demonstrating the basis for the award. Where an application review, scoring process, eligibility determination, recommendation, approval, or other selection process was required, the auditor shall determine whether the available records demonstrate that the applicable process was followed.

The auditor shall review grant payments to determine whether disbursements were made to the approved recipient or authorized entity, whether payments were consistent with the approved award, whether payments were supported by appropriate documentation, and whether the timing and amount of each payment can be reconciled to the applicable grant agreement, award documentation, invoice, reimbursement request, or other authorized basis.

The auditor shall review whether awarded funds were used for the stated purpose of the grant or project to the extent that supporting documentation permits such a determination.

Where grant recipients were required to submit invoices, receipts, progress reports, financial reports, certifications, photographs, project documentation, or other evidence of performance, the auditor shall determine whether those records were received and whether they appear sufficient to support the reported use of funds.

The auditor shall examine the status of all required reporting and closeout obligations.

Each grant should be categorized, as applicable, as fully reported and closed, active or pending reporting, partially reported, overdue, unsupported by sufficient documentation, or otherwise unresolved. The final report shall clearly identify grants for which required reporting or closeout documentation could not be located.

The auditor shall also review the Town's internal controls surrounding grant administration.

This review should consider the separation of responsibilities among individuals involved in application intake, review, award recommendation, approval, payment authorization, accounting, monitoring, and closeout. The auditor shall identify circumstances in which inadequate separation of duties, insufficient documentation, lack of supervisory review, manual processes, or other control weaknesses may have increased the risk of error, inappropriate payment, duplicate payment, unauthorized award, or inadequate monitoring.

Where applicable, the auditor shall review whether individuals involved in the grant process disclosed or appropriately managed actual, potential, or apparent conflicts of interest. The auditor shall examine available conflict-of-interest disclosures, recusals, certifications, attestations, or other documentation when such requirements existed.

The auditor shall examine whether grant awards and payments were consistent with applicable federal, State of Maryland, Prince George's County, Town, or other funding-source requirements when such requirements applied. The auditor shall identify the governing requirement and describe any material exceptions or compliance concerns identified during the engagement.

The auditor shall identify duplicate, inconsistent, unexplained, unsupported, or potentially erroneous transactions. Where the auditor identifies a discrepancy, the auditor shall trace the transaction through the available records and determine whether the discrepancy can be resolved through additional documentation or explanation.

The auditor shall examine amendments, extensions, reallocations, changes in scope, supplemental awards, reductions, cancellations, refunds, returned funds, or other modifications to grant awards and determine whether such changes were appropriately authorized and documented.

Where a grant involved multiple payments, the auditor shall prepare or provide a transaction-level reconciliation sufficient to demonstrate the relationship among the approved award, individual payments, cumulative payments, and any remaining balance.

The auditor shall review records relating to grants that were approved but not fully paid, paid but not fully reported, reported but not formally closed, cancelled after award, or otherwise left incomplete. The auditor shall identify the present status of each such grant and, where possible, the action necessary to resolve the matter.

5. Required grant audit database or schedule

As part of the final work product, the auditor shall provide the Town with a comprehensive grant schedule in an electronic format that can be maintained and updated by the Town.

At a minimum, the schedule shall identify the grant or project, funding source, application date, applicant name, project description, amount requested, amount awarded, award date, payment dates, amounts paid, payment method or reference, reporting requirements, reporting received, current reporting status, closeout status, and audit findings or exceptions.

The Town may request additional fields during the engagement if necessary to reconcile the auditor's findings to Town financial or administrative records.

6. Records and access

The Town will make available records reasonably necessary to conduct the engagement, subject to applicable law, confidentiality requirements, records-retention requirements, attorney-client privilege, and other legal restrictions.

The selected auditor shall be responsible for identifying additional records necessary to complete the engagement and shall promptly notify the Town of missing, incomplete, inconsistent, or unavailable records.

The auditor shall maintain appropriate confidentiality over all Town records and information obtained during the engagement and shall not disclose confidential or protected information except as authorized by the Town or required by law.

7. Audit approach and methodology

The proposal shall describe the firm's proposed audit methodology, including its approach to document review, transaction testing, reconciliation, sampling, internal-control evaluation, compliance testing, recipient verification, and identification of exceptions.

The Town anticipates that the engagement will involve a combination of comprehensive review and risk-based testing. The auditor shall explain any sampling methodology proposed and shall identify the population from which samples are selected. The Town may require review of specific transactions or grant recipients in addition to the auditor's proposed sample.

The auditor shall maintain sufficient working papers to support the conclusions presented in the final report. The Town reserves the right to request reasonable documentation supporting significant audit findings and conclusions.

8. Interviews and factual verification

The auditor may interview current or former Town officials, employees, grant administrators, financial personnel, applicants, awardees, vendors, or other persons reasonably necessary to understand the grant process or verify information contained in the records.

The auditor shall distinguish between documented facts, information obtained through interviews, and professional observations or conclusions. Where records conflict with an individual's recollection or explanation, the auditor shall identify the discrepancy and evaluate it based upon the available evidence.

9. Deliverables

• The selected firm shall provide the Town with a draft audit report for review and factual comment before issuance of the final report.

• The final report shall provide a clear description of the audit scope and methodology, the grants and projects examined, the applicants and awardees identified, the amounts requested and awarded, payments made, reporting and close-out status, material exceptions, internal-control observations, compliance findings, and recommendations for corrective action.

• The final report shall distinguish between matters that were verified through supporting documentation and matters for which documentation was unavailable or insufficient.

• The auditor shall also provide an electronic copy of the comprehensive grant schedule and supporting schedules in a format reasonably usable by the Town.

• If the audit identifies unsupported or questionable expenditures, the auditor shall identify the transaction, amount, recipient, applicable grant or project, supporting documentation reviewed, nature of the exception, and the basis for the auditor's conclusion.

• If the audit identifies a matter requiring further investigation but the available records are insufficient to reach a conclusion, the report shall clearly identify the matter as unresolved and describe the additional information that would be necessary to resolve it.

10. Audit findings and recommendations

The auditor shall provide practical recommendations addressing material deficiencies identified during the engagement. Recommendations may address grant application procedures, eligibility verification, award documentation, approval authority, payment controls, financial reconciliation, recordkeeping, recipient monitoring, reporting, closeout, conflict-of-interest controls, segregation of duties, and other aspects of grant administration.

Where appropriate, each finding should identify the condition observed, the applicable requirement or expected control, the effect or risk associated with the condition, the underlying cause to the extent reasonably determinable, and a recommended corrective action.

The auditor shall prioritize findings based upon the nature and significance of the issue rather than assigning arbitrary rankings.

11. Auditor qualifications

The Town seeks a firm with demonstrated experience conducting governmental audits, grant compliance audits, municipal financial reviews, nonprofit grant audits, or substantially similar engagements.

Proposals shall identify the firm's relevant experience, the qualifications of the individuals who will perform the engagement, the proposed engagement manager or partner, applicable professional certifications, experience with municipal or governmental entities, and at least three professional references for comparable work.

The proposal shall disclose any actual, potential, or apparent conflict of interest involving the firm, its principals, employees, subcontractors, or proposed engagement personnel.

12. Proposal requirements

Proposals shall include a cover letter, firm qualifications and relevant experience, proposed audit methodology, description of the proposed scope and approach, identification of key personnel, project schedule, deliverables, references, proposed professional fees, reimbursable expenses if any, and any assumptions or limitations affecting the proposed engagement.

The firm shall clearly identify whether the proposed fee is fixed, hourly, not-to-exceed, or based upon another compensation structure. Any anticipated additional costs shall be identified in the proposal.

13. Evaluation criteria

Proposals will be evaluated based upon the firm's experience and qualifications, demonstrated understanding of the Town's requested scope, proposed audit methodology, qualifications of assigned personnel, experience with governmental or grant-related audits, quality and usefulness of proposed deliverables, project schedule, references, and proposed cost.

The Town may request clarification, conduct interviews, request additional information, or negotiate with one or more respondents as permitted by applicable law and Town procurement requirements.

14. Contract terms and notice to proceed

Following selection, passed Resolution, and execution of a professional services agreement, the Town will issue a written Notice to Proceed. The auditor shall be prepared to commence work within ten (10) calendar days following issuance of the Notice to Proceed unless an alternative schedule is mutually agreed upon in writing.

The anticipated term of the engagement shall continue until completion and acceptance of the final audit report and all required deliverables. The Town may establish specific interim deadlines following award.

15. Independence and professional standards

The selected auditor shall conduct the engagement independently and in accordance with applicable professional standards governing the services being performed.

The auditor shall disclose any circumstance that could reasonably impair the auditor's independence or objectivity. The auditor shall promptly notify the Town of any actual or potential conflict that arises during the engagement.

16. Insurance and Licensing

Prior to commencement of services, the selected firm shall provide evidence of insurance and licensing reasonably appropriate for the professional services being performed and as required by the Town's contract.

At a minimum, the Town may require professional liability/errors and omissions coverage appropriate to the engagement, commercial general liability coverage, workers' compensation coverage as required by Maryland law, and any other coverage determined necessary by the Town.

The Town of Forest Heights shall be named as an additional insured on applicable policies where appropriate.

17. Indemnification

The selected firm shall indemnify, defend, and hold harmless the Town of Forest Heights, its elected officials, officers, agents, and employees from and against claims, damages, losses, liabilities, and expenses arising out of or resulting from the firm's negligent performance of the services, to the extent permitted by applicable law and the executed professional services agreement.

18. Ownership of work product

Unless otherwise provided in the executed professional services agreement, reports, schedules, audit matrices, and other work products specifically prepared for the Town under this engagement shall become the property of the Town upon payment for the services.

The auditor shall retain its professional working papers in accordance with applicable professional standards and legal requirements.

19. Public records and confidentiality

Records created, received, or maintained by the Town may be subject to the Maryland Public Information Act and other applicable laws. Nothing in this RFP or resulting agreement shall require the Town to withhold records that are required to be disclosed by law.

The auditor shall take reasonable measures to safeguard confidential, proprietary, personally identifiable, financial, and other protected information obtained during the engagement.

20. Reservation of rights

The Town reserves the right to reject any or all proposals, waive informalities, request clarification or additional information, cancel or modify the RFP, negotiate with one or more respondents, or award a contract in the best interest of the Town, subject to applicable law and Town procurement requirements.

Issuance of this RFP does not obligate the Town to award a contract or reimburse respondents for costs incurred in preparing or submitting proposals.