Emerald People’s Utility District (EPUD) is requesting proposals from qualified accounting firms to perform its annual audit. These proposals will be expected to contain technical and fee specifications, and any expected out-of-pocket expenses. The Board of Directors will enter into a six-year contract for auditing services beginning with calendar year ending December 31, 2019.
The enclosed information will give you a summary of the audit objectives, a description of the utility, the assistance available to the auditing firm, and the technical qualifications required of the firm.
Firms interested in submitting a proposal may request a copy of the most recent audit report. Interviews with staff or inspections of our accounting records must be made by appointment. Fee quotations for audit services and reports with regard to our Federal Financial Assistance Programs (in accordance with Government Auditing Standards and OMB Circular A-128) should be separately identified within the proposal. Six copies of the proposals, signed by your firm’s managing partner, must be received no later than 5 p.m. on Wednesday July 31, 2019. You are encouraged to submit additional, relevant information as outlined in the enclosed document. All information submitted would be held in strictest confidence.
The selection of the auditing firm will be made based on the proposed audit plan and methodology, the technical qualification of the audit staff, the depth of the firm, and the fee quotations. Interviews with audit firm finalists may be scheduled as part of the selection process. Staff will make a recommendation to the Board on August 27, 2019. The Board will make a final selection at the meeting to be held Tuesday, September 10, 2019, at 5:30 p.m. at 33733 Seavey Loop Road, Eugene, Oregon 97405. Please contact Sara Cline, CFO at (541) 744-7446 for any additional information.
AUDIT OBJECTIVES AND SCOPE OF SERVICES
Emerald People’s Utility District is requesting proposals for financial and compliance audit services beginning with the audit of calendar year ending December 31, 2019 and ending with the audit year of 2024 done in 2025. The audit must determine whether the financial statements present fairly the financial position and results of financial operations in conformance with generally accepted accounting principles (GAAP) and whether the utility has complied with laws and regulations that may have a material impact on the statements.
The annual financial reports should be prepared to conform fully with generally accepted accounting principles (GAAP) and to be in full compliance with the pronouncements of Federal Energy Regulatory Commission (FERC) and the Governmental Accounting Standards Board (GASB) and/or the financial Accounting Standards Board (GASB) and/or the Financial Accounting Standards Board (FASB), as appropriate. In addition, financial and compliance audit services and reports are expected to be required with regards to Federal Financial Assistance Programs, in accordance with Government Auditing Standards issued by the Comptroller General of the United States, and with the Office of Management & Budget (OM) Circular 128. On occasion, the District will need a Uniform Single Audit, OMB Circular A-133 due to receiving government funds.
The audit firm will be required to have all audit reports completed and available for presentation to the Board at each April board meeting beginning with the April 8, 2020 meeting. Prior to completion of the field work, a report to management will also be submitted, prepared by the audit firm in letter form, which will include any findings, observation, opinions, comments or recommendations relating to internal control, accounting systems, data process, compliance with laws, rule and regulations, or any other matters that come to the attention of the auditor during the course of the examination and, in the opinion of the auditor, warrant the attention of management. Such recommendations shall not be construed as special or additional studies, but shall be limited to those usually associated with the study of internal control systems and procedures as a part of an examination of financial statements.
The audit firm shall conduct an examination of and have issued its opinion on the financial statements, including auditor comments and disclosures required by the Minimum Standards for Audits of Oregon Municipal Corporations.
DESCRIPTION OF UTILITY AND ACCOUNTING SYSTEM
Emerald People’s Utility District is a municipal corporation with an annual budget of $54 million. The District’s service area includes a portion of the incorporated city of Veneta, and the unincorporated communities of Dexter, Elmira, Marcola, Pleasant Hill, Jasper, Noti Creek, Vaughn, as well as portions of Goshen, Springfield and Eugene. The municipalities of Junction City, Cottage Grove, Creswell and Coburg are surrounded by the District, but are not part of the District (except areas annexed after the boundaries of the District were fixed).
The governance of the District is provided through a five-member Board of Directors (the “Board”), elected by the registered voters in the District at elections held in November of even numbered years, in conjunction with the General Election. Members are elected from five sub-districts in staggered four-year terms. Elections are non-partisan, and members are paid a nominal fee for their services. Officers of the Board include President, Vice-President and Treasurer. The rotation of officers occurs annually.
The majority of the financial records are processed on an in-house computer using National Information Solutions Cooperative accounting software (NISC) for its approximately 25 users. This software includes all accounting applications as well as customer service and billing applications.
TECHNICAL QUALIFICATIONS AND PROPOSAL DETAILS
A. In order to promote both continuity and variation of perspective in the audit process, Emerald shall conduct a competitive request for auditing proposal process no longer than every six years. The current auditor may not submit a competitive request unless they have a concurring partner rotation.
B. The audit firm should have a current utility client or have performed a utility audit of comparable size or characteristics with the last three years. The partner in charge of the audit must be listed in the State Roster of Accountants authorized to conduct municipal audits in Oregon. The proposal must include a list of client references and a statement affirming the qualifications of the partner in charge.
C. The accountant in charge should have a minimum experience of three utility audits, the last of which must have been within the last three years. The proposal must describe the training and experience in utility accounting of the accountant in charge. Also indicate the percentage of time this person will be on-site to supervise the audit.
D. The partner and accountant in charge should be proficient in power hedging and swap entries.
E. Be available to assist staff throughout the year when questions or issues arise.
F. The staff assigned to the audit must have knowledge and prior experience auditing computer based financial systems. The proposal must describe the relevant education and background of each individual assigned to the audit. This should include related seminars and courses attended within the past three years. In addition to the training, describe related work experience of the staff in utility accounting.
G. Please comment in depth on the approach, plan and methodologies to be taken on this audit, indicating the number of people who will be assigned to the engagement, and when and how long the preliminary work and validation work will be performed.
H. List any additional services your firm could provide to the Utility.
I. Discuss whether subcontracting will be used and to what extent.
J. Provide the names and contact information for other, similarly sized clients of the partner and manager that will be assigned to our organization for reference purposes.
K. Describe how and why your firm is different from other firms being considered, and why our selection of your firm as our independent accountants is the best decision we could make.
L. Include a copy of your firm’s most recent peer review report, the related letter of comments and the firm’s response to the letter of comments.
ASSISTANCE AVAILABLE TO THE FIRM
In an effort to control the audit fee, the majority of the audit work papers will be prepared by the Utility’s Accounting Department. A list of work papers prepared by the staff for past audits is available on request. Additional work papers may be developed, depending on complexity and availability of staff.
Materials and working papers developed during the engagement will be maintained for a minimum of three years from the date of the audit reports and will be made available for examination by authorized representatives of the appropriate audit and compliance agencies.
Generally the books are closed and a substantial number of work papers are done by the end of the first week of February. The utility would like the final field work to be scheduled between mid-February and early March in order to meet the April presentation deadline.
AUDIT SELECTION TIMELINE
Request for Proposal Released July 1, 2019
Closing Date (last day to submit proposals to EPUD by 5:00 pm) July 31, 2019
Responses Evaluated August 27, 2019
Intent to Award Contract September 10, 2019
Contact Awarded September 11, 2019
Anticipated Project Schedule February 2020
(See Assistance Available To The Firm Section)