Utah State Auditor

Office of the

Utah State Auditor

September 23, 2013

Dear CPA:

Attached is a request for proposal for audit services for the Utah Communications Agency Network for the year ending June 30, 2013 and the succeeding four years.

Three hard copies and one electronic copy of your proposal must be submitted to Jon Johnson, Audit Director, Office of the Utah State Auditor, Utah State Capitol Complex, East Office Building, Suite E310, P.O. Box 142310, Salt Lake City, Utah, 84114-2310, no later than5:00 pm on October 7, 2013. Selection of the CPA firm will be made by October 21, 2013.

To be considered in the bidding process, the proposing CPA firm must meet the following minimum criteria:

1.The firm must meet the Government Auditing Standards'continuing professional education, independence,peer review, and licensing requirements.

2.The firm must have had significant experience in governmental auditing. The experience must have been on an entity-wide basis, and an opinion must have been issued.

3.The firm must be able to meet the reporting deadlines described in the Request for Proposal.

We look forward to working with you as we continue our commitment to quality audits in a timely and professional manner by utilizing the excellent services the CPA profession has to offer.

Sincerely,

Jon Johnson, CPA
Audit Director
801-538-1359

Utah State Capitol Complex, East Office Building, Suite E310 • P.O. Box 142310 • Salt Lake City, Utah 84114-2310 • Tel: (801) 538-1025 • Fax: (801) 538-1383

REQUEST FOR PROPOSAL

UTAH COMMUNICATIONS AGENCY NETWORK

PURPOSE OF REQUEST FOR PROPOSAL (RFP)

The purpose of this request for proposal is to enter into a contract with a qualified firm to provide audit services. It is anticipated that this RFP may result in a contract award to a single contractor.

This RFP is designed to provide interested offerors with sufficient basic information to submit proposals meeting minimum requirements, but is not intended to limit a proposal's content or exclude any relevant or essential data. Offerors are at liberty and are encouraged to expand upon the specifications to evidence service capability under any agreement.

BACKGROUND

The Office of the Utah State Auditor (OSA) is required by law (Utah Code63C-7-211) to audit or contract for audits of:

Utah Communications Agency Network (“the Entity”)
5360 S. Ridge Village Dr.
Salt Lake City, Utah 84118

This requirementincludes a financial statement audit in accordance with generally accepted auditing standards and Government Auditing Standards and, depending on levels of federal funding, may include a Single Audit in accordance with the Single Audit Act and OMB Circular A-133. (See Attachment B for Background and Overview of the Entity.)

SUBMITTING YOUR PROPOSAL

NOTICE: By submitting a proposal in response to this RFP, the offeror is acknowledging that the requirements, scope of work, and the evaluation process outlined in the RFP are fair, equitable, not unduly restrictive, understood and agreed to. Any exceptions to the content of the RFP must be protested to the OSA prior to the closing date and time for submission of the proposal.

Proposals must be received by the posted due date and time. Proposals received after the deadline will be late and ineligible for consideration.

Three hard copies and one electronic copy of your proposal must be submitted no later than 5:00 pm, on October 7, 2013 to:

Jon Johnson, Audit Director
Office of the Utah State Auditor
Utah State Capitol Complex
East Office Building – Suite E310
Salt Lake City, Utah, 84114-2310

Selection of the CPA firm will be made by October 21, 2013.

LENGTH OF CONTRACT

The audit contract will cover the annual audits for each of the fiscal years ending June 30, 2013 through June 30, 2017 (“audit period”), subject to an annual performance evaluation, legislative appropriation, and the needs of the Entity and OSA.

The OSAreserves the right to review the contract on a regular basis regarding performance and cost analysis and may negotiate price and service elements during the term of the contract.

STANDARD CONTRACT TERMS AND CONDITIONS

Any contract resulting from this RFP will include but not be limited to the Standard Terms and Conditions (see Attachment A). Exceptions and or additions to the Standard Terms and Conditions are strongly discouraged.

Exceptions and additions to the Standard Terms and Conditions must be submitted with the proposal response. Exceptions, additions, service level agreements, etc. submitted after the date and time for receipt of proposals will not be considered. Website URLs, or information on website URLs must not be requested in the RFP document and must not be submitted with a proposal. URLs provided with a proposal may result in that proposal being rejected as non-responsive. URLs are also prohibited from any language included in the final contract document.

The OSAretains the right to refuse to negotiate on exceptions should the exceptions be excessive, not in the best interest of theOSA, negotiations could result in excessive costs to theOSA, or could adversely impact existing time constraints.

Wherever the term bid, bidder, bidding or quote appears in this solicitation or reference is made to a bid, bidder, or quote, it shall be interpreted to mean offeror, as defined in 63G-6a-103(30), RFP, or Request for Proposals, as defined in 63G-6a-103(38) and the procurement shall be conducted subject to the provisions of 63G-6a-701-711.

DISCUSSIONS WITH OFFERORS (ORAL PRESENTATION)

An oral presentation by an offeror to clarify a proposal may be required at the sole discretion of theOSA. However, the OSAmay award a contract based on the initial proposals received without discussion with the offeror. If oral presentations are required, they will be scheduled after the submission of proposals. Oral presentations will be made at the offerors’ expense.

PROTECTED INFORMATION

The Government Records Access and Management Act (GRAMA), Utah Code, Subsection 63G-2-305, provides in part that:

the following records are protected if properly classified by a government entity:

(1)trade secrets as defined in Section 13-24-2 if the person submitting the trade secret has provided the governmental entity with the information specified in Section 63G-2-309 (Business Confidentiality Claims);

(2)commercial information or non-individual financial information obtained from a person if:

(a)disclosure of the information could reasonably be expected to result in unfair competitive injury to the person submitting the information or would impair the ability of the governmental entity to obtain necessary information in the future;

(b)the person submitting the information has a greater interest in prohibiting access than the public in obtaining access; and

(c)the person submitting the information has provided the governmental entity with the information specified in Section 63G-2-309;

* * * * *

(6)records, the disclosure of which would impair governmental procurement proceedings or give an unfair advantage to any person proposing to enter into a contract or agreement with a governmental entity, except . . . that this Subsection (6) does not restrict the right of a person to have access to, after the contract or grant has been awarded and signed by all parties, a bid, proposal, or other information submitted to or by a governmental entity. . . ;

GRAMA provides that trade secrets, commercial information or non-individual financial information may be protected by submitting a Claim of Business Confidentiality.

To protect information under a Claim of Business Confidentiality, the offeror must:

1. Provide a written Claim of Business Confidentiality at the time the information (proposal) is provided to the OSA,
2. Include a concise statement of reasons supporting the Claim of Business Confidentiality (Subsection 63G-2-309(1)), and
3. Submit an electronic “redacted” (excluding protected information) copy of your proposal response. Copy must clearly be marked “Redacted Version.”

A Claim of Business Confidentiality may be appropriate for information such as client lists and non-public financial statements. Pricing and service elements may not be protected. The Claim of Business Confidentiality must be submitted with your proposal on the form which may be accessed at:

An entire proposal cannot be identified as “PROTECTED”, “CONFIDENTIAL” or “PROPRIETARY” and may be considered non-responsive if marked as such.

All materials submitted become the property of the OSA. Materials may be evaluated by anyone designated by the OSAas part of the proposal evaluation committee. Materials submitted may be returned only at the OSA's option.

SCOPE OF REQUIRED SERVICES

A.STANDARDS AND PERIOD TO BE AUDITED

The auditor shall perform a financial audit and, depending on levels of federal funding, a single audit of the Entity for each fiscal year of the audit period in accordance with the following:

Auditing standards generally accepted in the United States of America, as promulgated by the American Institute of Certified Public Accountants (AICPA);

GovernmentAuditing Standards, 2011 revision, published by the U.S. Government Accountability Office;

For single audits, the Single Audit Act, OMB Circular A-133 Audits of States, Local Governments, and Non-Profit Organizations and related OMB A-133 Compliance Supplement (as applicable);

B.REPORT REQUIREMENTS

1.Financial Report –The auditor shall audit the financial statements and records of the Entityand shall issue an auditor's opinion on those financial statements. Such financial statements shall be prepared in conformity with accounting principles generally accepted in the United States of America.

2.Report on Internal Control Over Financial Reporting and on Compliance and Other Matters– The auditor shall issue a report on internal control over financial reporting and on compliance and other matters in accordance with Government Auditing Standards.

The following sections of the Utah Code have been determined to be significant compliance requirements by the OSA and should be considered in determining the Entity’s compliance with applicable laws and regulations:

63C-7-210(2) requires the the Entity Board of Directors to adopt budgetary procedures, accounting, procurement, and personnel policies substantially similar to those noted in 63C-7-210(1), and 63C-7-211(2) requires that the annual audit determine whether the Board has complied with the requirements found in 63C-7-210(2).

3.Reports Required for the OMB Circular A-133 Audit – If OMB Circular A-133 is applicable, the auditor shall prepare all necessary audit reports and schedules required by OMB Circular A-133.

4.Management Letter – As appropriate, the auditor shall prepare a comprehensive management letter including the auditor's findings and recommendations relative to the internal control over financial reporting, compliance with laws and regulations, as applicable, and adherence to generally accepted accounting principles.

The auditor shall request written responses from entity officials for each recommendation and shall include such responses in the report or management letter. If the entity declines the opportunity to respond, the auditor shall so state in his report.

5.Reporting Deadlines – Audit reports must be delivered by December 15 following each fiscal year end. The deadlines are critical since the Entity is being summarized and included in statewide reports.

PROPOSAL REQUIREMENTS AND CPA FIRM QUALIFICATIONS

Interested certified public accounting firms should include the following information in their proposal to perform the audits for each of the fiscal years of the audit period.

A.Profile of the Independent Auditor

The profile of the offerershould provide general background information. This should include:

1.The organization and size of the offerer, whether it is local, regional, national or international in operations.

2.The location of the office from which the work is to be done and the number of professional staff, by staff level, employed at that office.

3.A positive statement that the following mandatory criteria are satisfied:

(a)An affirmation that the offerer is properly licensed for practice as a certified public accountant in the State of Utah.

(b)An affirmation that the offerer meets the independence requirements of the AICPAand the Government Auditing Standards.

(c)An affirmation that the CPA firm meets the continuing professional education requirements contained in the Government Auditing Standards.

4.A copy of the CPA firms' most recent peer review report.

B.Offerer's Qualifications

1.Identify the audit partners, audit managers, field supervisors and other staff who will work on the audit, including staff from other than the local office. Resumes including relevant experience and continuing professional education for the staff auditors up to the individual with final responsibility for the engagement should be included.

2.Describe the recent local office auditing experience similar to the type of audit requested.

3.If other auditors are to participate in the audit, those auditors should be required to provide similar information.

C.Offerer's Approach to the Engagement

Submit a general audit work plan to accomplish the scope defined in these guidelines. The audit work plan should demonstrate theofferer's understanding of the audit requirements and the audit tests and procedures to be applied in completing the audit plan. The plan should detail the expected number of audit hours for the financial audit and single audit separately, assuming minimal single audit testwork, on an annual basis for five years. The single audit will likely not be required each year. For 2013, it is anticipated the single audit will include one Type A program with very few transactions. The proposal should also identify the breakdown of total hours between staff, in-charge, and higher levels. The planned use of specialists, if any, should also be specified.

D.Time Requirements

Detail how the reporting deadline requirements of the audit will be met.

E.Comprehensive Not-To-Exceed Fee

Supply the billing rates, estimated number of billable hours, other billable expenses and a comprehensive "not-to-exceed" fee for the financial audit and single audit separately, inclusive of travel, per diem and all other out-of-pocket expenses. The not-to-exceed fee information requested above should be provided for each of the five years of the audit period.

CONTRACTUAL ARRANGEMENTS

A.Significant Contract Provisions

As part of the contract to be awarded, the CPA firm will be required to:

1.Deliver two hard copies and an electronic copy of all reports to the OSA and up to fifty copies to the auditee.

2.Make available all working papers, audit programs, and time control records associated with the audit during performance of the audit and/or at the completion of the audit for review by the OSA and for a verification of key personnel obligated in the proposal, or other reasonable and valid purposes.

3.Furnish copies of its audit programs and working papers upon request and retain all working papers and reports for a minimum of five years from the audit report release date.

4.Immediately inform the OSA regarding any indication of errors, irregularities or illegal acts that may come to their attention in connection with the audit.

5.Notify the OSA of all opening and exit conferences between the auditee and the CPA firm, as well as all significant conferences concerning audit exceptions, accounting issues, internal control findings, or scope limitations. An exit conference with the CPA firm and the auditee shall be required.

6.Notify the OSA, in writing, prior to entering into a contract for auditing or non-auditing engagements with the auditee or any other State agency, department or division.

7.Notify the OSA, in writing, prior to changes of partner, manager, supervisor or senior personnel obligated in the bid proposal.

8.Confirm that the CPA firm is independent of the audit entity as defined in the AICPA'sRule 101 and inGovernment Auditing Standards.

B.Compensation for Services

1.Separate progress billings are allowed for time and expense incurred during the audit with the stipulation that progress billings cannot exceed 75% of the fees stated above. A statement of the current and cumulative hours incurred shall be submitted with each billing.

2.Final payment shall be made upon completion of the audit; receipt of the required reports and any other information requested by the OSA; completion of a review of the working papers by the OSA, where deemed necessary; and receipt of a statement of actual hours incurred and final billings.

3.Payments by the OSA are expressly subject to legislative appropriation therefore, and in the absence thereof, the agreement may be terminated.

EVALUATION OF PROPOSALS

The criteria listed below will be considered when making an evaluation of the proposals. Mandatory requirements will include appropriateness of licensing, independence, CPE, peer review, and ability to meet audit deadlines.

A.Technical Experience of the Firm (20% of scoring weight) – Considering governmental audit experience, as well as size and structure of CPA firm.

B.Qualifications of Staff (20% of scoring weight)

C.Responsiveness of the proposal in clearly stating an understanding of the audit services to be performed (25% of scoring weight):

(1)Appropriateness and adequacy of proposed procedures.

(2)Reasonableness of time estimates and total audit hours.

(3)Appropriateness of assigned staff levels.

D.Cost of the Audit (35% of scoring weight)

Right to Reject – The OSA reserves the right to reject any and all proposals submitted and to request additional information from all proposing firms. Any contract awarded will be made to the independent CPA firm who, based on evaluation of all responses (applying all criteria and oral interviews if necessary), is determined to be the best to perform the audit.

ADDITIONAL INFORMATION

The following individuals can be contacted for information. However, we request you review the financial statements and auditor's reports before making contact.

Office of the State Auditor:

Jon Johnson, Audit Director (801-538-1359)

Utah Communications Agency Network:

Steve Proctor, Executive Director (801-840-4201)

5360 S. Ridge Village Dr.

Salt Lake City, Utah 84118

Prior year reports for the Utah Communications Agency Network can be found on the OSA'swebsite at:

1

Attachment A

Standard Contract Terms and Conditions for Professional Services

State of Utah, State Cooperative Contract

(With deletions/additions by the Office of the Utah State Auditor for items specific to this contract)

1.AUTHORITY: Provisions of this contract (“Contract”) are pursuant to the authority set forth in 63G-6, Utah Code Annotated, 1953, as amended, Utah State Procurement Rules (Utah Administrative Code Section R33), and related statutes which permit the State to purchase certain specified services, and other approved purchases for the State.