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HomeMy WebLinkAbout14 2002 Annual Audit Agenda Item # 14 ! ! • rNNER ` Public I MEMORANDUM To: Board of Directors From: Mary Chapman Date: August 2, 2002 Subject: Authorization to issue a Request for Qualifications to auditing firms for the purpose of selecting auditors to perform the 2002 annual audit. It has been a long time since the District has changed auditors. Selecting auditors is the responsibility of the Board. The auditors are hired and work for the Board. Peter and I have talked about an approach that could be taken to hire new auditors to replace Arthur Andersen, Inc. The approach that we suggest is as follows: 1. Solicit a Request for Qualifications from audit firms; the Board or a board selected committee would narrow down those who respond to three audit firms. 2. The Board or board selected committee would interview the three selected firms to further explore their qualifications. 3. Solicit proposals/bids from the three firms. 4. The Board would evaluate the proposals and select a firm or the board committee would evaluate the proposals and make a recommendation to the whole board. Attached is a draft of a Request for Qualifications which could be sent out to begin the process. The actual proposal/bid form is in the process of being developed. We will submit a draft of the document as soon as it is complete for your review. Truckee Donner Public Ulilitt,District REOUEST FOR QUALIFICATIONS AUDITING OF FINANCIAL RECORDS x� REQUEST FOR QUALIFICATIONS AUDITING OF FINANCIAL RECORDS Introduction Truckee Donner Public Utility District (the District) is requesting Statements of Qualifications from certified public accounting firms to audit the District's financial records and express an opinion on the District's financial statements. The initial audit will be for the fiscal year ending December 31, 2002, with an option to continue the engagement for each of the two subsequent years. All audits are to be performed in accordance with United States generally accepted standards. Interested firms should mail five copies of their proposal to Mary Chapman, Administrative Services Manager/Treasurer, P. O. Box 309, Truckee, CA 96160 or by Fed Ex/UPS to 11570 Donner Pass Road, Truckee, CA 96161. All proposals must be received in the District offices no later than August 21, 2002 at 5:00 p.m. Final selection is anticipated to occur on or before October 2, 2002. The District reserves the right to request additional information, clarifications from firms submitting Statements of Qualifications, or to allow corrections of errors or omissions. The District reserves the right to reject any and all proposals, without prejudice. The District assumes no obligation to reimburse firms for any expenses incurred in responding to this request for qualifications. About the District The District was formed and operates under the State of California Public Utility District Act. The District provides electric and water service to portions of Nevada and Placer counties described as Truckee and Donner Lake. The electric and water service operations are maintained and operated separately. The Electric System distributes electrical energy to approximately 11,500 customers. The Water System is a water distribution system serving approximately 10,800 customers. Most of the District's customers receive both electric and water service from the District. The District is in the process of seeking regulatory approval to install a fiber optic communications infrastructure in order to provide voice, video and high speed data services to its customer base. The District year-end is 12/31. The District follows Governmental Accounting Standards Board (GASB) Statement No. 20 which requires that governments' proprietary activities apply all GASB pronouncements as well as the pronouncements of the Financial Accounting Standards Board (FASB)and its predecessors issued on or 1 Truckee Donner Public Utility Disirict REOUEST FOR QUALIFICATIONS AUDITING OF FINANCIAL RECORDS before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements. As allowed by GASB Statement No 20, the District has elected not to implement FASB Statements and Interpretations issued after November 30, 1989. The District is required to adopt GASB No. 34 beginning in fiscal 2003. The District's financial computer is an Alpha system with software provided by MSC (National Information Systems Cooperative) of St Peters, Missouri. The District also maintains a personal computer network serving approximately 45 users. Further information concerning the District is available on request. Nature of Services Required The District is requesting audit services for the calendar year 2002 as well as options to extend the engagement to the following two calendar years. All audit work shall be performed in accordance with generally accepted auditing standards and must be completed annually within 120 days of year-end. The auditor shall communicate to the District, in written form, concerning any substantive deficiencies in design or operation of the District's internal controls and procedures that could adversely affect the organization's ability to record, process, report on, or safeguard assets. The auditor shall also make immediate written report of any fraud or illegal acts to the District. The District does not currently anticipate issuing any revenue bonds during calendar year 2002, or the subsequent two years. However, if circumstances change and the District does issue debt, the auditor may be required to provide additional professional services. The District may also require minimal tax or accounting advice such as on GASB No. 33 and GASB No. 34, or other unforeseen assistance during the year. Fee arrangements for these services will be arranged separately. Contact Information Documents available, on request, to interested firms include the 2000 and 2001 financial statements. District information is also available on the District's website,www.tdpud.org. Inquiries may be directed to Mary Chapman, Administrative Services Manager/Treasurer, P. O. Box 309, Truckee, CA 96160, (530) 582-3906, MaryChapman@tdpud.org. Responses shall be mailed to Mary Chapman at the previously listed address and be received no later than August 21, 2002 at 5:00 p.m. 2 Truckee Donner Public Utility District REQUEST FOR QUALIFICATIONS AUDITING OF FINANCIAL RECORDS Calendar of Key Dates Following is a list of key dates associated with this request for qualification. Request for Qualifications Issued August 8, 2002 Qualifications Due By August 21, 2002 Firm Interviews Concluded By September 6,2002 Sealed Bid/Price Due By September 20,2002 Final Selection of Firm October 2,2002 Qualifications Submission Requirements Each finn's response shall include qualifications of firm and individual staff, in-charge-of-field-work and above, to be assigned to the audit. Qualifications shall include information concerning the firm's, and individual staff assigned, experience with California State public utility districts and/or investor owned utility audits, including a list of similar engagements performed within the past three years. An affirmative statement should be included that the firm and all assigned key professional staff are properly licensed to practice in California. Finn acceptance to the bond market is important to the District. The qualifications letter should address this issue. Respondents should include information concerning the firm's proposed audit methodology including a list of firm's audit responsibilities and District staff responsibilities. The District is also interested in firm's employee turnover and stability of workforce. No price quotes/dollar bids are to be included within the qualifications submittal package. Evaluation Procedures Qualifications submittals will be evaluated and no more than three firms selected. The District will meet with individuals representing the selected firms to further discuss District operations and firm qualifications. Firm representatives at the meeting shall include at least one key member from the anticipated audit team. Firms will then be assigned a score, based solely on qualifications,which shall be 2/3 of the final evaluation. Sealed Bids Subsequent to the interview process, the three firms selected shall be asked to submit sealed bids. The format for the bids will be provided to the three audit firms after the interviews. These bids will be evaluated and will account for 1/3 of the final evaluation score. The District will evaluate sealed bids only from the firms interviewed and does not wish to consider this information until after the interview process and qualifications are scored. The deadline for submitting bids will be September 20, 2002 at 5:00 p.m. All sealed bids will be opened at the same time. 3