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HomeMy WebLinkAboutRES.1894.06-16-2003BILL NO. 03-99 RESOLUTION NO. qL A RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO A CONTRACT FOR AUDITING SERVICES WITH BEUSSINK, HEY, ROE, SEABAUGH & STRODER, L.L.C. BE IT RESOLVED BY THE COUNCIL OF THE CITY OF CAPE GIRARDEAU, MISSOURI, AS FOLLOWS: SECTION 1. The City Manager, for and on behalf of the City of Cape Girardeau, Missouri, is hereby authorized to enter into a Contract for Auditing Services with Beussink, Hey, Roe, Seabaugh & Stroder, L.L.C. A copy of said Contract is attached to this Resolution and made a part hereof. PASSED AND ADOPTED THIS_ DAY OF 2003. �i ATTEST: Gayle J. Conrad, City Clerk 0 CONTRACT FOR AUDITING SERVICES This Contract entered into on the day of , 2003, by and between BEUSSINK, HEY, ROE, SEABAUGH & STRODER, L.L.C., Certified Public Accountants, hereinafter referred to as "Beussink" and the CITY OF CAPE GIRARDEAU, MISSOURI, hereinafter referred to as "City". 1. The parties hereto agree that Beussink will provide basic auditing services to the City in accordance with the requirements of the "City of Cape Girardeau Auditing Services Request for Proposal". Said Request for Proposal is marked Exhibit A and attached hereto and incorporated herein by reference as though fully set out. 2. The parties hereto agree that the above referenced Request for Proposal and Beussink's "Audit Proposal for City of Cape Girardeau, Missouri" marked Exhibit B attached hereto and made part hereof by reference as though set out herein shall constitute the agreement between the parties with respect to the provision of auditing services to the City by Beussink. 3. The parties agree that the City shall provide compensation to Beussink for the services as provided in the Auditing Services Request for Proposal. 4. The obligations of the parties pursuant to this Contract shall continue for the fiscal year ending June 30, 2003. THIS AGREEMENT shall be binding upon the successors and assigns of the parties. ATTEST: [Typed Name & Title of Signer] BEUSSINK, HEY, ROE, SEABAUGH, STRODER, L.L.C. Typed Name & Title of Signer CITY OF CAPE GIRARDEAU, MISSOURI Douglas K. Leslie, Interim City Manager ATTEST: Gayle L. Conrad, City Clerk RFP NO. 03-01 EXHIBIT A CITY OF CAPE GIRARDEA U P0BOX 617 401 INDEPENDENCE CAPE GIRARDEAU, MO 63702-0617 REQUEST FOR PROPOSAL May 21, 2003 Sealed proposals, subject to the instruction and General Conditions listed below and any special conditions set forth herein, will be received by the Division of Purchasing, 401 Independence, Cape Girardeau, MO, until 3:00 P. M., June 9, 2003 for furnishing the City of Cape Girardeau the material and/or list of materials, supplies, equipment or services shown on the attached sheets. Di inion qf Purchasing - Finance Department REQUEST FOR PROPOSAL INSTRUCTIONS AND GENERAL CONDITIONS 1. Offerors must use the RFP forms provided for that purpose in submitting proposals, must return all forms comprising this bid, and sign all proposals. Use the label provided or otherwise identify your offer by the RFP number, and date of the opening. If you do not care respond to the proposal, please return the RFP and note your reason. 2. Do not include Federal Excise Tax or Sales and Use Taxes in proposal prices, as the City is exempt from them by law. State of Missouri tax exemption certificate will be furnished if required. 3. It is the intent and purpose of the City of Cape Girardeau that the Request for Proposal permits free and open competition. However, it shall be the offer's responsibility to advise the City of Cape Girardeau, Division of Purchasing if any language, requirements, etc., or any combination thereof, inadvertently restricts or limits the requirement to a single source of otherwise prohibits the submission of a proposal. Notification must be written and must be received by the Division of purchasing at least S days before the proposal close date and time. 4. Offerors are strongly encouraged to read the RFP carefully. Failure to comply with requirements and procedures set forth in the RFP may result in the rejection of the proposal. S. The City of Cape Girardeau reserves the right to officially P-odify (or cancel) a Request for Proposal after issuance. Such a modification will be identified as an amendment and numbered in a sequential order as issued. RFP NO. 03-01 May 21, 2003 6. Any question related to an RFP must be directed in writing to the Division of Purchasing. Any correspondence related to an RFP should refer to the appropriate RFP number, page, and paragraph number, etc. However, do no mark the RFP number on the outside of an envelope containing questions as it will be identified as a sealed envelope and will not be opened until after the close date and time. 7. A proposal submitted by an offeror must (1) be manually signed by the offeror on the RFP form, (2) contain all information required by the RFP, (3) be priced as required, (4) be attached to a security deposit if required, (5) be sealed in and envelope or container, and (6) be delivered to the Division of Purchasing, Finance Office, 401 Independence no later than the exact time on the date specified in the RFP. 8. It is the offeror's sole responsibility to ensure that his or her proposal is physically received by the Division of Purchasing in its offices no later than the official proposal close date and time. Late proposals will not be opened. 9. Shortly after the expiration of the official proposal close date and time, proposals will be opened. The proposals will be read and preliminary evaluation will determine if additional information or clarification of proposal is needed before final evaluation is completed. Information received in the RFP will not be made public until after formal award of RFP. 10.The award of a contract of purchase order resulting from a Request for Proposal shall be based on the lowest and best proposal received in accordance with the evaluation criteria published in the RFP documents. In the evaluation of price(s), the City of Cape Girardeau shall assume that a unit price is correct in the cases of a discrepancy between the unit price and an extension when the RFP solicits a price for a specific unit of measure. The City of Cape Girardeau, Missouri, Reserves the right to reject any and all proposals, waive informalities, or accept that proposal deemed the most advantageous by the City for the City of Cape Girardeau. The City also reserves the right to make multiple awards when deemed necessary. 11.The proposal shall be considered awarded with a contract is executed and signed by proposer and City Manager or when a purchase order is issued with authorized signature. RFP NO. 03-01 CITY OF CAPE GIRARDEA U, MISSOURI Request for Proposal May 21, 2003 This document constitutes a request for sealed proposals, including prices, from qualified individuals and organizations to furnish those services and/or items a described herein. Proposals must be mailed to the Division of Purchasing, P.O. Box 617, 401 Independence, Cape Girardeau, Missouri 63702-0617 or hand delivered to the ,Finance Office, Division of Purchasing, 401 Independence, Cape Girardeau, Missouri 63703. Proposals will be received until 3:00 p.m., Monday, June 9, 2003. The City of Cape Girardeau is soliciting proposals for Auditing Services per the attached requirements. All offerors re advised to carefully read the complete document and comply with all requirements tn he considered as a responsive proposer. Questions regarding technical aspects of the proposal should be directed to John Richbourg at 573-334-7146. All other questions should be directed to Nancy D. Poston, Purchasing Agent at (573) 334-7146. The proposer hereby agrees to provide the services and/or items, at the prices quoted, pursuant to the requirements of the RFP document upon award of contract and/or purchase order. Company Name: Mailing Address: City: Telephone: SS# or FID# Proposer's Signature: Proposer's Title: tate: Zip: Fax: CITY OF CAPE GIRARDEAU AUDITING SERVICES REQUEST FOR PROPOSAL The City of Cape Girardeau invites qualified CPA firms to submit proposals for the providing of auditing services as described in the attached specifications. Written proposals will be received until 3:00 P.M. on June 9, 2003 at the City Finance Department, City Hall, 401 Independence Street, Cape Girardeau, Missouri 63703. Conditions Qualifyine a CPA Firm to Propose 1. Required Affirmations, Each proposer must make the following affirmations in its proposal: a. The proposer is properly licensed for public practice as a certified public accountant. b. The proposer meets the independence requirements of the Standards for Audit of Government Organizations, Programs, Activities, and Functions, 1994 revision, published by the U.S. General Accounting Office. c. The proposer has not been the object of any disciplinary action during the past three years. 2. Other Qualifications Each proposer must include a narrative in its proposal that demonstrates the following: a. The proposer has a staff that is knowledgeable of current governmental auditing standards and accounting principles as they relate to perforrning the services outlined in this Request for Proposal (RFP). The proposer should at a minimum address the following in its discussion: 1. Prior governmental audits performed. 2. The main individuals to be involved in the audit. 3. The continuing education in governmental accounting and auditing received by those listed in item 2 within the last two years. b. The proposer has a formal program that insures it maintains a staff that is knowledgeable of current governmental auditing standards and accounting principles as they relate to performing the services outlined in this request for proposal for future years. c. The proposer will also provide the following items: 1. The results of peer reviews received within the last two years. 2. A copy of the latest quality control review report for the firm. 3. A listing of any restrictions placed on the firm by governmental agencies or state boards of accountancy which would affect performance of the audit or acceptance of the audit report. 1 Procedural Instructions 1. Sealed Proposals A proposal must be submitted in a sealed envelope or package bearing the title "City of Cape Girardeau Auditing Services" along with the proposer's name and address. The Proposer shall return two (2) copies of the completed proposal no later than June 9, 2003, at the City Finance Department, City Hall, 401 Independence Street, Cape Girardeau, Missouri 63703. It is the proposer's responsibility to ensure that the proposal arrives on time at the right place. Any proposals received after the above time may be' disqualified. Each proposal must state the basis on which fees are to be calculated and the basis on which fees for any additional audit work outside the Audit's scope are to be calculated. 2. Public Information All submitted proposals and information included with the request for proposal shall become public record upon their delivery to the City Finance Department. 3. Responses to Proposer's Questions A proposer may only submit written questions for further clarification of items included in this request for proposal. The proposer's question and the City's answer will become public records and will be shared with all proposers to whom the request for proposal has been sent. 4. City's Contact Person The City's Finance Director shall be the contact person with any aspects of this request for proposal. John Richbourg can be reached at the Finance Department (573) 334-7146. 5. Right to Request Additional Information The City reserves the right to request additional information it deems appropriate from any proposer after reviewing the proposals. 6. Right to Reject Proposals The City reserves the right to reject any or all proposals. 7. Execution of Agreement If the selected firm does not execute an agreement within twenty (20) days after being notified of selection, the City may give notice to the firm of the City's intent to select the next most qualified proposing firm or call for new proposals, whichever the City deems most appropriate. E Selection Process 1. Criteria for Selection Each proposer will be judged on the abilities of its staff and its demonstration of a commitment to maintaining a staff that is knowledgeable of current auditing standards and accounting principles as they relate to the performance of services requested in this request for proposal. Cost of services will be a secondary factor. 2. Advisory Committee The following City staff will judge the proposals: Finance Director and Internal Auditor. They will recommend to the City Council the proposer they feel is best qualified to perform the services at a reasonable cost to the City. The City Council will make the final selection decision. Contract Terms 1. Contract Period The selected firm shall perform the City's annual audit as described later in this request for proposal for the fiscal year ending June 30, 2003. 2. Award of Contract The City of Cape Girardeau Auditing Services Contract is expected to be awarded at the City Council meeting on June 16, 2003. Description of City and Records to be Audited 1. General Information The City of Cape Girardeau operates under a charter that was adopted in 1981. The City Charter provides for a non-partisan municipal government consisting of a mayor, six council members, and a City Manager. The City Manager operates as the administrative head of the City. The City provides the following services financed from general fund revenue: street maintenance and construction, police and fire protection, transit, engineering and planning, building inspections, and parks and recreation. ' The City currently owns and operates several enterprise and internal service operations. The sanitary sewers, water, solid waste, golf course, and Shawnee Softball Complex are financed by usage charges that are intended to be self-sustaining. The fleet and data processing operations provide service to all City departments and charges these departments amounts sufficient to cover their operations. The Employees' Benefit Fund and Risk Management Fund provide for the accounting of the City's self-insured health and workmen's compensation plans respectively. Both funds charge other city funds premiums based on actuarially determined expected claims. The Equipment Replacement Fund buys and leases equipment to other city funds. The City health and library services are financed through their own tax levies. The Cape Girardeau Public Library has its own board of directors which is appointed by the City Council. It issues its own annual financial statements. The Library is treated as an agency fund of the City. The City organized in 1988 the Cape Girardeau Public Facilities Authority (CGPFA) under the general not-for-profit corporation law of the State of Missouri. The purpose of the CGPFA is to issue bonds to finance City capital expenditures under lease purchase agreements between the City and the CGPFA. The CGPFA has two outstanding bond issues in the total amount of $1,450,000. The CGPFA is treated as a blended component unit of the City and its results are presented on a combined basis with the financial statements of the City. The City operates a Municipal Court office, which is a division of the General Fund. This division is to be audited as a separate entity. This division consists of the Court Clerk, two full-time employees, and one part-time employee. The Court Clerk maintains a municipal court appearance bond checking account. In addition, a petty cash account is maintained at the office. The Municipal Court monitors the receipt of all fines and court costs which are deposited daily. 2. City Accounting Fund Structure The following is a listing of current fund types used by the City's accounting system with an indication of the accounting basis used by each type and funds included under each type. Audit work to be done is to be completed at the fund level. GENERAL FUND -uses modified accrual basis General SPECIAL REVENUE FUND -uses modified accrual basis Convention and Tourism 4 Airport Downtown Business District Parks and Recreation Health Motor Fuel Tax Capital Improvement Sales Tax — Flood Control Project Capital Improvement Sales Tax — Water Projects Capital Improvement Sales Tax — Sewer System Improvements Flood Protection Vision 2000 Transportation Sales Tax — I Trust Fund Transportation Sales Tax — II Trust Fund DEBT SERVICE FUND -uses modified accrual basis Debt Service CAPITAL PROJECTS FUND -uses modified accrual basis General Capital Improvement Army Corp of Engineer Flood Control Project Street Improvement FAU Street Grant Community Development Block Grant Park Improvement Water Improvement Projects (This fund has a project length budget.) ENTERPRISE FUND -uses accrual basis Sewer Water Solid Waste Golf Course Softball Complex INTERNAL SERVICE FUND -uses accrual basis Data Processing Fleet Management Employees' Benefit Risk Management Equipment Replacement TRUST AND AGENCY FUND -uses modified accrual Library Arena Improvement Deferred Compensation Park Development Foundation ACCOUNT GROUPS General Fixed Assets General Long-term Debt 3. Accounting System -Software The City currently uses software developed by Government E -Management Solutions Inc., of St. Louis, Missouri for the following: a. General ledger including four years of on-line transaction detail b. Financial reporting including comparison to budgeted data c. Sewer, water, and solid waste billing d. Sewer, water, and solid waste receivable e. Accounts payable entry, payment, reporting, and automatic updating of the general ledger accounts f. Fixed asset entry, depreciation, reporting, and automatic updating of the general ledger accounts for depreciation g. Budgetary control including encumbrance accounting h. Payroll disbursement, distribution, reporting, and automatic updating of the general ledger for payroll disbursement i. Business license billing and receivable j. Miscellaneous billing and receivable In addition the following software is being used by the city for the following purposes: a. Special assessment billing and receivable — uses an access database b. Gasoline inventory and usage distribution - Phoenix c. Parts and labor distribution for fleet services — CFA Fleet Management d. Hotel/motel and restaurant tax billing and receivable — uses an access database e. Parks and recreation billing and scheduling — Class Systems All software is currently being run on a Unisys E -Commerce Server with Windows 2000 operating system. The majority of the software has been operational since July 1998. Real estate and personal property taxes after 1986 have been billed and collected by the county. The county sends monthly reports and cash distributions to the City. Real estate and personal property tax receivables before 1986 are collected by the City and maintained on a manual system. 4. Accounting System -Other The City accounting records are maintained almost entirely by two divisions within the Finance Department. The City Collector's division consisting of the City Collector and six full-time employees perform the following functions: cashier, bank deposit, utility billing and collection, business license billing and collection, and other miscellaneous billing and collection. The Finance Director's division, consisting of the Finance Director and six full-time employees, perform the 0 following functions: cash receipts posting, grant reimbursement administration, payroll audit, account reconciliation, distribution of internal service funds' charges, investment administration, all journal entry preparation and posting, month-end journals' support schedule preparation, bank reconciliation, verification of the county's tax collections, monthly statement preparation for the City Council, purchasing, accounts payable, and budget preparation. In additions to these two divisions, various other divisions within the City perform the cashier function. The payroll function is currently being performed under the Personnel/Risk Management division by one full-time employee. The City's cashiers receive cash and checks and produce documentation for posting to the general ledger. Actual posting to the general ledger is done by the Finance Director's division. The City's accounts payable system is an encumbrance system and uses purchase orders and receiving reports. Purchase orders are reviewed to determine they are in budget compliance before being approved for payment. The City has a written procedure manual for the purchasing function, but does not have any written procedures manuals for any of the other accounting functions. The City maintains the following bank accounts at Commerce Bank of Cape Girardeau: cash operating account, payroll account, health claims, overnight repurchase account, and an account for each of the 3 community development block grant projects. The cash operating account is used to receive all City deposits except community development block grant receipts. The operating account is a zero balance account with any collected funds being used to purchase overnight repurchase agreements. The community development bank accounts are used to receive all community development block grant receipts and to make disbursements to the City cash operating account to reimburse the City for qualifying expenditures. All bank statements are reconciled monthly. 5. Budgetary System The City currently has a 41 million -dollar budget for the current year. The City prepares a budget annually for all funds, which is adopted at the department level by a budget ordinance. The City does not maintain a system of budgetary accounts that is formally integrated into the accounting system. Budgetary control is maintained through the accounting software, which allows each account to reflect a budgeted, and an encumbered amount. The accounting reports produced show budgeted to actual comparisons and amounts available to be spent for expenses and amounts uncollected for revenues. 6. Transaction Statistics The following is the approximate volume of accounting activity experienced by the City: a. 15,400 sewer, water, and solid waste utility bills per month b. 2,000 business licenses per year c. 386 building permits per year d. 1,279 electrical, plumbing, excavation permits per year e. 2,500 bank deposits per year f. 19,500 expense and payroll checks per year 7 7. GASB 34 The City will prepare its financial statements according to GASB 34, including prospective reporting of general infrastructure assets. No retroactive reporting of major general infrastructure assets will be made at this time. Required Services 1. Financial and Compliance Audits under the Single Audit Act The proposer shall adhere to all audit standards, complete all audit procedures, produce all reports, and issue any opinions that are required by the Single Audit Act Amendments of 1996 and The Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non -Profit Organizations. 2. Financial Audit The proposer shall make an examination of the general-purpose financial statements and the related combining fund and account group statements in accordance with generally accepted governmental auditing standards adopted by the American Institute of Certified Public Accountants. The proposer shall issue an opinion on the above statements and present a bid to represent this examination. The proposer shall also examine the general-purpose financial statements of the Cape Girardeau Public Library in accordance with generally accepted auditing standards and issue an opinion on them. A separate bid will be proposed for the examination of the Cape Girardeau Public Library. The proposer, as a separate bid, will examine the general-purpose financial statements of the Municipal Court of the City in accordance with generally accepted auditing standards and issue an opinion on them. The proposer, as an alternate bid, will perform the following procedures on the financial records of the Municipal Court: a. Vouch year end bank reconciliation to bank and financial statements; b. Test representative sample of violations (tickets) for proper disposition -collection, deposit, etc; c. Test representative sample of checks written for proper disposition -approval, etc; d. Test representative sample of bond received for proper disposition -deposit, forfeiture, refunding. 3. Period of the Audit The year for which services are requested for the City, Cape Girardeau Public Library, and Municipal Court is the fiscal year ending June 30, 2003. 4. Report Requirements The City will require fifty copies of the City's audit report, fifteen copies of the Cape Girardeau Public Library's audit report, and ten copies of the Municipal Court's audit report. Included with this request for proposal is a table of contents of the previous year's audit reports of the City, Cape Girardeau Public Library, and the Municipal Court. They should be used as a guideline of the required contents of each audit report with the exception of any additional statements that may be required in the future as a result of new accounting pronouncements or the establishment of additional funds by the City. The audit reports of previous years will be available upon request at the City Finance Department. 5. Time Requirements The selected firm may begin preliminary fieldwork any time after an audit contract has been signed and work until June 30, 2003. Post closing fieldwork may begin September 15, 2003 or earlier if the City consents. All fieldwork should be substantially complete by October 31, 2003. The preliminary drafts of the audit should be available for discussion with the City by November 17, 2003 and the final audit reports should be formally submitted to the City Council at their first study session in the month of December 2003. Assistance Available to Proposers 1. General Information The audit report of the previous year has been issued by Beussink, Hey, Roe, Seabaugh & Stroder, L.L.C. of Cape Girardeau, Missouri. For the year ending June 30, 2002 an unqualified opinion was issued. 2. Assistance to be provided by the City Copies of the audit working papers of the previous years provided by staff are on record with the City and can be viewed at request. The City staff will be available to provide the following assistance: a. Prepare audit workpapers as requested. This includes but is not limited to the following: receivable and payable reconciliation, income reasonability test and reconciliations, ratio analysis, cash and investment reconciliation, and production of trial balances in requested format. b. Prepare the management discussion and analysis, entity wide statements, combined balance sheet, combined statement of revenue, expenditures, and changes in fund balance/retained earnings, and all combining, individual fund and account group statements and schedules. c. Prepare confirmations and other necessary letters. d. Retrieving source documentation as requested. 0 e. Produce reports and provide information in a variety of formats through the data base application of our data processing system. All financial statements are prepared by City staff in a presentable, standard reporting format for use in the firm's audit report and the City's comprehensive annual financial report. The cash flow statements are the only statements that are prepared by the firm and shall be prepared using the direct method. The City staff will produce those statements in a reporting format. The firm prepares the notes to the financial statements but the City staff provides clerical assistance in final presentation for the audit report and comprehensive annual financial report. The opinions are the responsibility of the firm. CITY OF CAPE GIRARDEAU AUDITING SERVICES REQUEST FOR PROPOSAL This document constitutes a request for sealed proposals, including prices, from qualified individuals and organizations to furnish auditing services and/or items per the specifications described herein. Proposals must be mailed or hand delivered to the City Finance Department, City Hall, 401 Independence, Cape Girardeau, Missouri 63703. CONTRACT PERIOD: One fiscal year The offeror hereby agrees to provide auditing services at the prices quoted, pursuant to the requirements of this document upon award of the contract and/or purchase order. Date Company Name_ Mailing Address_ City Telephone Offeror's Signature. State Zip Code SS# of FID# Title RFP NO. 03-01 EXHIBIT B May 21, 2003 CITY OF CAPE GIRARDEA U, MISSOURI Request for Proposal This document constitutes a request for sealed proposals, including prices, from qualified individuals and organizations to furnish those services and/or items a described herein. Proposals must be mailed to the Division of Purchasing, P.O. Box 617, 401 Independence, Cape Girardeau, Missouri 63702-0617 or hand delivered to the ,Finance Office, Division of Purchasing, 401 Independence, Cape Girardeau, Missouri 63703. Proposals will be received until 3:00 p.m., Monday, June 9, 2003. The City of Cape Girardeau is soliciting proposals for Auditing Services per the attached requirements. All offerors are advised toref ul 1 y read the complete document um n and comply with all r_ reMliements to h onsi der -d as a responsive ro nger. Questions regarding technical aspects of the proposal should be directed to John Richbourg at 573-334-7146. All other questions should be directed to Nancy D. Poston, Purchasing Agent at (573) 334-7146. The proposer hereby agrees to provide the services and/or items, at the prices quoted, pursuant to the requirements of the RFP document upon award of contract Land/or purchase order. Company Name: etAss) , n Hey Zo Q S�tbwj4k 4- 54md-1Pg L • . C Mailing Address: _i6 So. S-,hprS�nncPi Roa d CQ IJ e G rc, rc/eo, V .NID tS ?O 3 City: State: Zip: Telephone: S7S'� �3y- 797 Fax 23' SS# or FID# 6V- Proposer's Signature: °Y Proposer's Title: AV4kek BEUSSINK, HEY, ROE, SEABAUGH & STRODER, L.L.C. Certified Public Accountants 4018 Sycamore 16 So. Silver Springs Road pe 105 So. Ho Cairo, Illinois 62914 Cape Girardeau, Missouri 63703 Jackson, Missouri 63755 Telephone (618) 734-3300 Telephone (573) 334-7971 Telephone (573) 243-3991 Facsimile (618) 734-3303 Facsimile (573) 334-8875 Facsimile (573) 243-3186 Audit Proposal For City of Cape Girardeau, Missouri I. FIRM BACKGROUND Description of Firm and Audit Approach Beussink, Hey & Roe, P.C. was founded on January 31, 1986. In February 2002, David D. Seabaugh, CPA and Jeffrey C. Stroder, CPA became Partners and Beussink, Hey, Roe, Seabaugh & Stroder, L.L.C. was formed. We perform a wide variety of professional services for our clients; including audit, tax, write-up, management advisory services, and fraud investigation work. We specialize in governmental and nonprofit audits. We conducted the audit for the City of Cape Girardeau, Missouri as of and for the year ended June 30, 2002. We believe in continuity when assigning personnel to audit clients. We believe the Partner in charge of the engagement should be a recurring member of your audit team. David D. Seabaugh would continue to be the Partner in -charge of the audit. Other audit team members may be rotated as scheduling requires, but we believe the continuity at the top end of the staff promotes audit efficiency and provides a better service to you. Currently, our firm has six Certified Public Accountants and other five staff that are available for audit purposes. II. CONDITIONS QUALIFYING OUR CPA FIRM A. Required Affirmations 1. Our firm and all Certified Public Accountants are licensed by the Missouri State Board of Accountancy to practice as certified public accountants. 2. Each year, all employees complete a form indicating any potential problems meeting the independence requirements of the Standards for Audits of Government Organizations, Programs, Activities, and Functions, 1994 revision. Our firm and all employees have no problems with meeting the independence requirements with respect to the City of Cape Girardeau, Missouri. City of Cape Girardeau, Missouri Page 2 June 9, 2003 Our firm and all employees have not been the object of any disciplinary action during the past three years. B. Other Qualifications Each year we perform more than 100 audits in accordance with auditing standards generally accepted in the United States of America and approximately 30 of those audits are conducted in accordance with Government Auditing Standards issued by the Comptroller General of the United States. Of those audits, approximately 15 are performed each year in accordance with the Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non - Profit Organizations. The following is a partial list of local governments that we have performed audits for in the past year: City of Jackson, Missouri Mary Waller, City Clerk (573) 243-3568 City of New Madrid, Missouri Furgeson Hunter, City Administrator (573) 748-2866 Callaway County, Missouri Rosemary Ganaway, County Auditor (573) 642-0727 All of our professional staff are current on their continuing professional education requirements for both annual total hours, as well as their specialized governmental training. All of our audit engagements are conducted from our Cape Girardeau office. We have five partners and six staff accountants assigned to the Cape Girardeau office. Your audit team will consist of one or more partners and several staff auditors. A Partner will serve as the in -charge auditor during fieldwork for your engagement. Throughout the year, these individuals will be available for consulting services as needs arise. City of Cape Girardeau, Missouri Page 3 June 9, 2002 David D. Seabaugh and Jeffrey C. Stroder will be the main individuals involved in the audit. All of their continuing education has been in governmental accounting and auditing. The most recent seminar attended was the 2 -day Governmental Accounting Conference sponsored by the Missouri Society of Certified Public Accountants. Additional CPE has related to audits of school districts, Single Audit issues, GASB 34 issues, Audits of U.S. Department of Housing and Urban Development (HUD) projects, Governmental Financial Statements, and Not -For -Profit organizations. Additional staffing will depend on the timing and scheduling of other audits. The other staff will possess experience with governmental audits. Our firm has adopted a written quality control manual. This manual focuses on five elements of quality control; independence, integrity and objectivity; personnel management; acceptance and continuance of clients and engagements; engagement performance; and monitoring. Our policies and procedures are subject to peer review conducted in conformity with standards established by the Peer Review Board of the American Institute of Certified Public Accountants (AICPA). The firm has a system of quality control that encompasses the firm's organizational structure and policies adopted and procedures established to provide reasonable assurance of conforming to professional standards established by the American Institute of Certified Public Accountants. Government Auditing Standards — 1994 Revision requires that we provide you with a copy of our most recent quality control review report. Government Auditing Standards require quality control reviews every three years. Beussink, Hey, Roe, Seabaugh & Stroder, L.L.C. was formed in 2002 and has not received its first quality control review report. This review is scheduled to be completed in 2003. However, Beussink, Hey & Roe, P.C. has received an unqualified opinion on its last two quality control review reports. Beussink, Hey, Roe, Seabaugh & Stroder, L.L.C. utilizes the same internal quality control structure as does Beussink, Hey & Roe, P.C. There are no restrictions placed on our firm by any governmental agencies or state boards of accountancy which would affect performance of the audit or acceptance of the audit report. City of Cape Girardeau, Missouri Page 4 June 9, 2003 III. COST INFORMATION The cost of the audits will be as follows: For the Year Ended June 30, 2003 Amount City of Cape Girardeau $35,000 Cape Girardeau Public Library $ 1,800 Municipal Court Procedures $ 1,000 This fee is based on anticipated cooperation and assistance from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. In addition, all known adjustments to the financial statements must be made prior to initiation of audit fieldwork. If the financial statements are adjusted after fieldwork commences, this may impact the estimated completion and delivery dates. The stated delivery date is also contingent upon management's successful completion of GASB 34 financial statement presentation. If the delivery date cannot be met for these are other reasons, we will fully discuss the matters with you in advance. If significant additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the additional costs. All audit staff hours will be applied at an average hourly rate of $80 per hour. Our consulting fees will be billed at that rate for any significant management advisory services that the City would request to be performed at any time in addition to the audit. IV. ADDITIONAL INFORMATION Any additional information or questions concerning this bid proposal may be directed to Mr. David D. Seabaugh, CPA at (573) 334-7971. Yours truly, BEUSSINK, HEY, ROE, SEABAUGH & STRODER, L.L.C. David D. Seabaugh A DDS:aw Enclosures 6011