REQUEST FOR PROPOSALS

AUDITING SERVICES

MARCH 27, 2019

CITY OF ITHACA

129 W EMERSON STREET

ITHACA MI 48847

989-875-3200

1 | P a g e

CITY OF ITHACA, MICHIGAN

REQUEST FOR PROPOSAL

AUDITING SERVICES

The City of Ithaca, Michigan is requesting proposals from qualified firms of Certified Public

Accountants for professional services to audit the City’s annual financial statements and

records for the purpose of rendering an Independent Auditors’ Report and for performance of

a federal Single Audit, should one be required, for the fiscal years ending June 30, 2019, June

30, 2020 and June 30, 2021 with an option of an extension for June 30, 2022 and 2023.

QUALIFICATIONS OF AN AUDITING FIRM TO PROPOSE:

The following information must be affirmed in the proposal response:

1. The auditing firm is properly licensed for public practice in the State of Michigan as a certified public

accountant.

2. The firm meets the independence requirements of the Governmental Auditing Standards published by

the U.S. General Accounting Office.

3. The firm does not have a record of substandard audit work. Please disclose the controls your firm has

in place to ensure quality standards have been met. Also disclose whether your firm is subject to an

external quality control review process and internal quality control procedures.

CONTRACT TERMS AND ARRANGEMENTS:

1. The selected firm shall be designated as the City’s auditing and financial consulting firm for a period

of three years to include financial audits for the fiscal years ending June, 2019, 2020 and 2021. An

optional extension for fiscal year’s 2022 and 2023 is also being requested.

2. If the selected firm performs satisfactorily for all three audited years, the City may extend the term for

additional years as requested. If extended and the selected firm performs satisfactorily for the

additional years, the City may extend the term of service, with the subsequent years of services cost to

be negotiated.

3. The City reserves the right to terminate the contract for audit at any time.

4. The City reserves the right to accept or reject any or all proposals, to waive informalities or errors in

the proposal process, and to accept any proposal deemed in the best interest of the City, including

proposals that are not the lowest amount.

5. The City of Ithaca is expected to award a contract for auditing services at the City Council meeting to

be held on May 7, 2019.

6. There is no expressed or implied obligation for the City of Ithaca to reimburse responding firms for

any expenses incurred in preparing proposals in response to this request.

2 | P a g e

7. In the event of a merger of the audit firm with another firm of certified public accountant or the change

of partners to the audit firm, this contract will be transferable to the successor firm if approved by the

City of Ithaca City Council.

8. The contract will not be assigned or transferred without the written approval of the City of Ithaca as

approved by its City Council.

9. The City will have staff and responsible management personnel available during the audit to assist the

firm by providing information, documentation and explanations. The preparation of the confirmations

will be the responsibility of the Auditor.

DESCRIPTION OF THE CITY:

The City of Ithaca is a community of approximately 3,000 residents and is the County Seat of Gratiot County,

located in the center of Michigan’s Lower Peninsula. The City is a leading partner in community collaboration

with the schools, county, local municipalities and townships. The City’s base economy is stable with continued

growth and diversification in the surrounding agricultural and manufacturing sectors. The City of Ithaca has

two Michigan Certified Business Parks, one Michigan Tax-Free Renaissance Agricultural Sub Zone and one

professional office park which offer plenty of opportunity for growth. Ithaca is located within the university

corridor of Central Michigan University, Alma College and Michigan State University. The City of Ithaca has

seen growth in the industrial, agricultural, and commercial sectors and has approved several tax abatements to

aide in this growth.

The City of Ithaca is a Council-Manager form of government. The City Council is a non-partisan Council

made up of seven members (Mayor and six Councilpersons) elected at-large. The City Manager, Clerk-

Treasurer, Fire Chief, and Department Heads are appointed officers of the City. The City is a full-service city

with water and sewer utilities. The City employs 13 full-time, 5 part-time, 2 seasonal and 18 Paid Volunteer

Fire-Rescue personnel. The City contracts for its Police Services and Building Permit Operations with the

County of Gratiot and Assessing Services with the City of Clare. The City contracts out its Fire and First

Responder services to six neighboring townships.

The City of Ithaca maintains a conservative approach to spending and is able to provide many services to

residents. The City maintains thirteen individual governmental funds. Major funds include: General (including

Cemetery), Major Street, Local Street, Library, and Fire. Non-Major include: Economic Development,

Caldwell Memorial, Gibbs Memorial, First Responder, Cemetery Sinking, Fire & Rescue Sinking, Grant

Projects and Cemetery Perpetual Care.

In addition, the City maintains three Proprietary funds; a Water/Sewer Enterprise fund and two Internal Service

Funds – Equipment and Materials. The City of Ithaca also has Fiduciary funds for funds held by the City in

an Agency capacity for Property Taxes and Payroll Deductions.

The City has one Component Unit, the Downtown Development Authority. The DDA no longer operates a

Tax Increment Finance Plan since the expiration of the plan in 2017.

The City currently has one debt issuance for Unlimited Tax General Obligation Bonds which were refinanced

in 2016. (Moody’s Annual Issuer Comments are included).

The City currently utilizes BS&A software for all financial processing and reporting including General Ledger,

Accounts Payable, Cash Receipting, Payroll, Utility Billing, Miscellaneous Accounts Receivable, Cemetery

Management, Assessing and Property Tax including Delinquent Personal Property Tax.

Additional information, including financial, may be found on the City’s website at www.ithacami.com .

3 | P a g e

PROFILE OF THE INDEPENDENT AUDITOR

The respondents are requested to provide a profile of general background information which should include:

1. The organization and size of the respondent, 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. Positive statements, as listed in the Qualifications of Auditing Firms to Propose, that the mandatory

criteria are satisfied.

PROPOSER’S INFORMATION AND QUALIFICATIONS:

Experience: Identify the audit managers, field supervisors and other staff who will work on the audit, including

staff from other than the local office. Profiles including relevant experience for the auditor in–charge up to the

individual with final responsibility for the engagement should be included.

References: Provide four references for local and regional audits similar to the type of audit being requested.

Conflict of Interest: List and describe the firm’s professional relationships with the City or any of its agencies

for the past five years (if any) and include a statement as to why such relationship does not constitute a conflict

of interest relative to performing the proposed audit.

Other: Include any other information that would be helpful in allowing the City to make an informed decision

in the selection process.

PROPOSERS’ APPROACH TO EXAMINATION/SCOPE OF SERVICES

Submit a work plan to accomplish the audit. The work plan should include time estimates for each significant

segment of the work. Please include a listing of all schedules expected to be prepared by City staff.

Firms will not be allowed to subcontract any portion of the engagement to other firms.

The plan should also detail information on when the audit firm plans to deliver the draft and final reports.

The firm must compile the information necessary to comply with, and put into appropriate format, all financial

statements with all required footnote disclosures, within the audited financial statements in accordance with

generally accepted auditing standards (GAAS) as set forth by the American Institute of Certified Public

Accountants (AICPA), the standards applicable to financial audits contained in Government Auditing

Standards as issued by the U.S. Government Accountability Office (GAO), the provisions of the U.S. Office

of Management and Budget (OMB) Circular A-133, and all other applicable State of Michigan or federal

standards. The City of Ithaca desires the auditor to express an opinion on the fair presentation of its financial

statements in conformity with generally accepted accounting principles (GAAP).

These audits will need to address the requirements of and be in compliance with all of the following:

Applicable State of Michigan requirements

Applicable Federal Requirements

Applicable requirements under GAAP

Any other applicable requirements

4 | P a g e

COMPENSATION/COST:

The cost proposal should include:

1. A cost of services being offered for audit for the City of Ithaca and its Component Unit, with a separate

cost listed for a single audit should one be required as requested: (Please use Attachment A)

A. Fiscal Year Ending June 30, 2019 and Single Audit

B. Fiscal Year Ending June 30, 2020 and Single Audit

C. Fiscal Year Ending June 30, 2021 and Single Audit

Optional Extension:

D. Fiscal Year Ending June 30, 2022 and Single Audit

E. Fiscal Year Ending June 30, 2023 and Single Audit

2. Estimate of any other costs such as mileage, travel, clerical time, etc. not included in the audit cost.

3. Additional costs, if not included with audit cost, associated with implementing and assisting the City

with any new or existing accounting principles required by GASB, or as required by State or Federal

law.

4. The firm will be available to answer questions that may arise during the term without additional cost

to the City. If not in agreement to this practice, please note exceptions and quote cost for this additional

service.

WORKING PAPER RETENTION AND ACCESS:

Records and documents pertaining to the City of Ithaca audit will become the property of the City. All

working papers and reports must be retained at the firm’s expense for a minimum of five years after

completion of the audit. The firm will be required to make all working papers available, upon request, to

the City of Ithaca.

The firm shall provide to the City, all audit adjustments including supporting documents and will meet

with staff to discuss these final adjustments.

AUDIT REPORTING, REPORTS AND COPIES:

The Firm shall prepare and present the Annual Audit to the City Council during a regular or special meeting

of the Council or Committee of the Whole work session. These meetings generally fall in the evening on

the first and third Tuesdays of each month, but are subject to change.

The Firm shall furnish the City with five (5) paper copies and one electronic version of each annual audited

financial statements.

The Firm will be responsible for filing the Annual Audit Report with the State of Michigan by the filing

deadline.

5 | P a g e

PROPOSAL DUE DATE:

Proposals will be accepted through Monday, April 22, 2019. All proposals must be valid until July 31,

2019. The City expects to make its decision at the City Council Meeting on May 7, 2019.

Due to time considerations, electronic versions of the proposal will be accepted and may be sent to

bfandell@ithacami.com.

CONTACT INFORMATION:

Please address any questions regarding this RFP to:

Barbara Fandell, Clerk-Treasurer

City of Ithaca

129 W. Emerson Street

Ithaca, Michigan 48847-1017

Phone: 989-875-3200 x 305

Email: bfandell@ithacami.com

6 | P a g e

ATTACHMENT A

REQUEST FOR PROPOSAL

AUDITING SERVICES

Firm Submitting Proposal:

Proposed Fee for Services:

Fiscal

Year Audit &

Reports

Single Audit

(if needed)

Component

Unit

Additional Fees

(attach detail)

Total

2019

2020

2021

2022

2023

Signature of Authorized Representative Date

Print Name

Title