S00B6600041 - HFA Financial Audit Services - Q&A 1.pdf

WES MOORE

Governor

ARUNA MILLER

Lt. Governor

JACOB DAY

Secretary

JULIA GLANZ

Deputy Secretary

MARYLAND DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT

7800 Harkins Road ● Lanham, MD 20706 ● dhcd.maryland.gov

301-429-7379 ● 1-800-756-0119 ● TTY/RELAY 711 or 1-800-735-2258

Questions and Answers 1

Solicitation No. S00B6600041

HFA Financial Audit Services

The following questions regarding the subject TORFP have been submitted by vendors. The answers provided by DHCD are intended to clarify the TORFP’s requirements and do not constitute an amendment.

Question Answer

1) Prior-year audited financial statements / workpapers access: Is there an incumbent auditor for the CDA and MHF audits, and if so, will prior-year audited financial statements and workpapers be made available to the awarded Master

Contractor?

The incumbent auditor is CliftonLarsonAllen, LLP.

The prior-year audited financial statements are publicly available on the DHCD website. Regarding the prior-year audit workpapers, DHCD will provide the predecessor auditor with the necessary written consent to communicate with DHCD and, if the predecessor auditor so determines, to provide access to its workpapers to the successor auditor. The extent of any access to the copies of the workpapers is at the sole discretion of the predecessor auditor and is outside

DHCD’s control. Any such access may be subject to the predecessor auditor’s policies, including execution of an appropriate acknowledgement letter by the successor auditor.

2) Format of required meetings: Can the Department confirm the Entrance/Exit Conferences, Kick-Off

Meeting, and stakeholder presentations may all be conducted virtually, consistent with Section 1.8?

Confirmed. Entrance/Exit Conferences, Kick-Off

Meeting, and stakeholder presentations may all be conducted virtually.

3) Historical hours / Not-to-Exceed range: Can the

Department share the approximate NTE value or total labor hours used under the current or most recently expired task order for these CDA/MHF audits?

The current contract has an NTE range of $635,000 over 5 years.

4) If questions are answered just before the proposal due date, with the due date be extended?

Yes.

Questions and Answers 1

S00B6600041 – HFA Financial Audit Services

5) How many references are required?

Professional references are not strictly required as part of an offeror’s technical proposal. However, references (or their absence) may impact the technical ranking of the proposal.

6) Please provide a typical timeline for prior audits, including: (1) interim work, (2) year-end fieldwork, (3) draft financial statements, (4) final issuance, and (5) any required presentations.

What is the earliest that final fieldwork can typically begin (i.e., how soon after year-end are the books closed and available for audit)?

An Entrance Conference to discuss the current year engagement is typically held in early to mid-April. The interim audit, covering the eight months from July through February, is typically conducted during mid-to late May. Planning fieldwork has historically been performed during the last week of July. Final fieldwork generally begins during the second week of August

(CDA) and continues through mid-September. Draft

Financial Statements are typically available beginning the first week of September. Final audited financial statements and the Independent Auditor’s Report are generally issued between September 27 and September

30, subject to satisfactory completion of the audit. No formal presentations are required. A Closing

Conference to discuss the audit results may be held in

October, if requested.

Final fieldwork can typically begin during the second week of August. Due to CDA’s multiple bond indentures, the timing of the financial close varies by program. Certain indentures are generally closed and available for audit by the second week of August, while the CDA’s largest and most complex indentures typically require additional time and are generally available by the end of the third week of August. Audit work may begin as information becomes available and proceed on a rolling basis.

7) What is the anticipated budget for the financial statement audits for the year ended June 30, 2026?

DHCD does not disclose fee-related information on its commercial contracts.

8) Have you performed any analysis of the impact of

GASB 103 and other new pronouncements effective for the year ended June 30, 2026?

Yes. DHCD has performed a preliminary assessment of the impact of GASB Statement No.103 and other

GASB pronouncements effective for the fiscal year ended June 30, 2026. Based on the preliminary assessment completed to date, no material impact on the DHCD’s financial statements is anticipated. DHCD will continue to monitor the implementation of newly effective GASB standards and will work with the selected audit firm to evaluate and address any additional disclosure or reporting requirements identified during the audit process.

9) How has the auditor–DHCD relationship functioned in previous engagements, and are there any particular areas in which the DHCD is seeking improvement (e.g., communication, timing, management letter content)?

The working relationship between DHCD and the incumbent auditor has been productive and professional. DHCD is not seeking any specific improvements to the auditor-client relationship.

However, DHCD expects open, proactive, and timely communication throughout the engagement. Any audit issues, significant findings, potential concerns, or delays that could affect the audit or financial reporting process should be communicated to management as soon as they are identified, rather than being deferred until the conclusion of fieldwork. DHCD also values timely updates on audit progress, clear communication regarding technical accounting matters, and practical, constructive recommendations in the management letter, when applicable.

10) Under what conditions has DHCD historically not renewed audit contracts?

DHCD does not disclose information regarding its historical contract renewal decisions.

11) Are you looking for a change from the incumbent?

DHCD is satisfied with the current incumbent’s performance but will issue an award for this TORFP in line with the award factors codified in the TORFP.

12) Has there been any turnover in key financial or accounting personnel at the DHCD in the past year?

DHCD does not disclose personnel-related information, including turnover of key financial and accounting personnel.

13) Are there any known challenges or planned changes related to the DHCD’s accounting systems or internal controls that the auditor should be aware of?

CDA is aware of planned modernization efforts by

Emphasys (formerly AOD), the CDA’s accounting software provider. CDA will continue to monitor any system changes and evaluate potential impacts on accounting operations and internal controls. At this time, CDA is not aware of any significant challenges related to its accounting systems or internal controls.

14) Does the DHCD use any third-party service providers (e.g., payroll processing, or other significant financial processes), and if so, for which functions?

CDA does not use third-party service providers for payroll processing, accounting functions, or other financial reporting processes. CDA does utilize

Dovenmuehle Mortgage, Inc., subservicer of our single-family mortgage loan program, and AmeriNat, subservicer of SHOP, business development and other loans. CDA also engages external financial advisors and bond counsel in connection with bond issuances, debt-related matters, and interim eMMA disclosures.

These service providers do not perform CDA’s accounting or financial reporting functions.

15) Are there specific expectations regarding onsite versus remote work for the audit, or may the auditor exercise discretion so long as the DHCD’s expectations are met?

No. DHCD does not have specific requirements regarding onsite versus remote work arrangements.

The auditor may exercise professional discretion in determining the appropriate approach to performing the audit, provided that all DHCD expectations, audit requirements, and deliverables are satisfactorily met.

16) Does the DHCD regularly consult with any other

CPA firms on accounting, reporting, or compliance matters?

No. Other than consulting with the current independent audit firm, as needed, CDA does not regularly consult with other CPA firms on accounting, reporting, or compliance matters.

17) Please indicate whether any major system changes or upgrades are planned during the contract term.

CDA does not currently anticipate any major system changes or upgrades during the contract term.

18) Please confirm whether a current or prior-year provided-by-client (PBC) list can be made available to the successful offeror.

Yes. A current and/or prior-year Provided-by-Client

(PBC) list will be made available to the successful offeror, as appropriate, to support audit planning and coordination.

19) Were there any disagreements with the prior auditor related to accounting principles, proposed adjustments, audit scope, audit procedures, or other significant matters. If so, please provide.

There have not been any material disagreements with the current auditors.

20) Were there any material audit adjustments identified during the prior year’s audit? If so, please provide.

No material audit adjustments were identified during the prior year’s audit.

21) Please provide the most recent Financing

Adjustment Factor (FAF) triennial review report referenced in Section 1.4.1.1(9)(b), including any auditor work programs, findings, management comments, or recommendations associated with that review.

The most recent FAF Triennial Review Report

(FY2024) is not included with the TORFP materials.

The report will be made available to the selected successor firm following contract award. There were no auditor work programs, findings, management comments, or recommendations associated with the review.

22) Please provide any HUD correspondence, review comments, monitoring reports, requests for additional information, or corrective action plans

There has been no HUD correspondence, review comments, monitoring reports, requests for additional information, or corrective action plans related to the

FAF program during the past five fiscal years.

related to the FAF program during the last five fiscal years.

23) Please provide a copy of the FAF Refunding

Agreement referenced in Section 1.2, together with any amendments, modifications, or successor agreements currently governing the use and reporting of FAF funds.

The FAF Refunding Agreement is not included with the TORFP materials. It will be made available to the selected successor firm following contract award.

24) For the triennial review due for the fiscal year ending June 30, 2027, please provide the approximate number of projects, activities, funding transactions, and households/beneficiaries expected to be included in the review population.

The following estimates are based on the information available as of the date of this response and may change before the FY2027 triennial review:

-approximately 15 projects

-one activity transaction

-no funding transactions

25) Please clarify whether the FY2027 triennial FAF review is expected to be: (a) a standalone report,

(b) incorporated within the annual audit report, (c) submitted directly to HUD, or (d) provided solely to CDA management.

Option D. The auditor provides the report to CDA management, and CDA submits the report to HUD.

26) Please provide the number of hours incurred by the incumbent auditor, if available, for the most recent triennial FAF review. If hours are unavailable, please provide the approximate level of effort incurred.

Approximately 30 hours.

27) Section 1.4.1.1(9)(a) references additional information that may be requested by HUD. Please provide examples of HUD requests received during the last five fiscal years and the resulting auditor procedures required to satisfy those requests.

No such requests were received during the past five years.

28) Please provide: ending FAF fund balance, number of active FAF-assisted projects, number of FAF-funded transactions during FY2026, and number of households/persons assisted during the most recently completed review period for planning and pricing purposes.

Based on information available as of the date of this response, the ending FAF fund balance is approximately $609K. There are 15 active FAF-assisted projects, and no FAF-funded transactions during FY2026.

29) Have any FAF-related audit findings, compliance findings, questioned costs, reportable conditions, significant deficiencies, material weaknesses, or

HUD compliance findings been reported during the past five fiscal years? If so, please provide copies.

None.

30) Please provide the number of Underwriter

Inclusion Letters, Consent Letters, and interim financial statement review engagements requested from the incumbent auditor during FY2024, FY2025, and FY2026.

The auditors issue two (2) Underwriter Inclusion

Letters for both CDA and MHF for each public bond issuance. CDA historic bond issuance activity can be found on our website:

https://dhcd.maryland.gov/Investors/Pages/OfficialStat ement.aspx

Underwriter Inclusion Letters are not required for private placement bond issuances. CDA has not utilized Letters of Consent for the past 10 years.

31) Under what standard does HUD expect the triennial review to be performed, a financial audit, an agreed-upon-procedures engagement, or a program-performance/compliance review?

The triennial review is performed as an agreed-upon-procedures engagement, with the auditor issuing an

Independent Accountants’ Report on Applying

Agreed-Upon Procedures.

32) What are the mandatory requirements for the

Master Contractor to be able to submit a proposal in response to the Task Order. For example, does the Master Contractor (not the MBE) need to be registered by a certain certifying agency?

The main limiting factor determining who may bid as

Prime Contractor for this TORFP is that the Offeror must already be a Master Contractor on DGS’ Audit

Services Master Contract. A list of those firms can be found here:

https://dbm.maryland.gov/contracts/Pages/statewide-contracts/ASC2020AwardInformation.aspx

Other restrictions apply, for example: DHCD cannot make an award to debarred companies, companies that are not registered in eMMA, or companies that are not in good standing with MD SDAT.

33) The TORFP refers to Labor Category Summary

Sheet for Proposed Personnel (Appendix 3) but it does not appear to be included. Can you please provide this?

See Amendment 1 and separate file:

S00B6600041 - HFA Financial Audit Services -

Appendix 3 - Labor Category Summary Sheet

34) Section 4.3.3.1 states, “The proposed work plan shall provide a detailed discussion of capabilities and approach to address this TORFP’s requirements outlined in Section 3, General

TORFP Requirements, and Section 1, Scope of

Work. All tables must be totaled.” Could you please clarify whether firms should instead address the TORFP requirements outlined in Section 2, General Requirements, rather than Section 3, as

Section 3 of the TORFP contains the Procurement

Instructions?

There appears to be a typo in Section 4.3.3.1. The

TORFP’s General Requirements are, in fact, outlined in Section 2, rather than Section 3.

https://dhcd.maryland.gov/Investors/Pages/OfficialStatement.aspx https://dhcd.maryland.gov/Investors/Pages/OfficialStatement.aspx

35) Regarding the Master Contact Information Sheet, could you please clarify whether firms should submit the completed Appendix 2 immediately following the cover letter and before the table of contents, or whether it should be included in an appendix section along with the other required forms?

Either is fine, but including the Master Contractor

Information Sheet immediately following the cover letter is preferred.

36) Section 1.4.1.1, part 9 references a review and issuance of a separate report over the Financing

Adjustment Factor (FAF) proceeds, however, the

Financial TOR form does not include a section for the FAF report. Should we include the costs of this review as part of the CDA audit fee?

The potential costs of providing additional information reasonably requested by CDA beyond the FAF report as described in Section 1.4.1.1(9) should be included as part of the CDA audit fee.

Paul Dickman 7/28/26

Paul Dickman Date

Procurement Officer