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FY2011 02/15/2012 ContractDANNYL. KOLHAGE CLERK OF THE CIRCUIT COURT DATE: February 23, 2012 TO: Tina Boan, Sr. Budget Director ATTN: Penny Kipp, Sr. Budget Analyst FROM: Isabel C. DeSantis, D.C. At the February 15, 2012, Board of County Commissioners meeting, the Board approved the following: Item C5 Task Authorization between Monroe County andOPMGno update the Fiscal Year 2011 Full Cost Allocation Plan and the 2 CFR Part 225 (formerly OMB Circular A-87) Cost Allocation Plan. Enclosed is a fully -executed duplicate original of the subject document for your handling. Should you have any questions, please do not hesitate to contact my office. cc: County Attorney Finance File cf Task Authorization Florida Department of Management Services, Consulting Services Contract# 973-001-06-1 February 6, 2012 Engagement Objective and Scope Monroe County Board of County Commissioners (County) has two engagement objectives. The first objective is the completion of the Full Cost Allocation Plan based on actual expenditures for the fiscal year ended September 30, 2011. The second objective is completion of the 2 CFR Part 225 (formerly OMB Circular A-87) Plan (the Regulation) based on actual expenditures for the fiscal year ended September 30, 2011. KPMG will assist the County with the following: Objective #1: Full Cost Plan The first plan will be a "full -cost" plan for use in allocating indirect costs to enterprise funds, internal service funds, and certain special revenue funds. Objective #2: OMB CircularA-87 Cost Plan The second plan will be prepared in accordance with the Federal Office of Management and Budget Circular A-87, Cost Principles for State and Local Governments (relocated to Title 2 in the Code of Federal Regulations, Subtitle A, Chapter Il, Part 225) and may be used in allocating indirect costs to the County's federal grant programs. The Regulation does not require most local governments to submit its cost allocation plan for negotiation and approval unless specifically requested by its federal cognizant agency. The County is responsible for submitting its cost allocation plan for negotiation and approval if requested by its federal cognizant agency. Terms and Conditions KPMG is proposing to assist the County using the State of Florida Management Consulting Services Contract # 973-001-06-1. The contract terms and conditions used in this document are managed by the Florida Department of Management Services and are located in the State Contracts, Agreements and Price Lists. The Management Consulting Service Contract # 973-001-06-1 is incorporated herein by reference and maintained in the contract manager's file. Work Plan Approach KPMG is prepared to initiate the project within two weeks from the receipt of the signed task authorization. We estimate that an elapsed calendar time of up to 120 calendar days from the date of commencement would be required,to assist you in the development of the final reports. The time -frame is dependent upon the timeliness of requested information furnished by the County. The County will be responsible for the collection of all statistical information used as allocation bases, as well as all decisions regarding allocation statistics, cost pools, and receiving departments used in the cost allocation plan. KPMG's role will be to advise the County and complete the indirect cost plans after the County has made key decisions. To achieve the engagement objectives, KPMG proposes the following tasks: Page 1 Task Authorization Florida Department of Management Services, Consulting Services Contract# 973-001-06-1 February 6, 2012 Task Activity Work Product Deliverable 1. Project Initiation The project team will conduct a project initiation Information Request List meeting with the County's project sponsor and other Project Charter County management to confirm the scope and - Communications Plan deliverables for the project. The meeting will help - Risk Register facilitate a project schedule within the framework of the County's normal work routines. 2. Issue Status KPMG will issue monthly status reports to County Monthly Status Report Reports management that details the progress of the project and list issues that could affect the project timeline. 3. Gather & Assess Conduct interviews with staff and collect data Data pertaining to the CAPs. 4. Analyze Data Work with the County to identify expenditures by cost pool and services performed. Analyze allowable and unallowable costs and assist the County to identify allocation bases. The County assumes responsibility for the assumptions used in the development of the. Full CAP and the OMB A-87 CAP prior to KPMG issuing the deliverables. 5. Submit Draft KPMG will submit the report as a "draft" for the Report County's management initial review. KPMG's will use expenditures for the year ending September 30, 2011 in developing the draft reports. 6. Issue Final KPMG will respond to the County's feedback and will Full Cost CAP Report revise the draft reports as necessary. KPMG will then OMB A-87 CAP issue the reports in final form to the County. KPMG has developed a project timeline that identifies our sequence of tasks coinciding with the County's needs. The following chart depicts the project timeline. PROPOSED PROJECT TIMELINE Task Mar-12 ADr-12 Mav-12 Jun-12 1. Project Kick Off 2. Issue Status Reports 3. Gather and Assess Data 4. Analyze Data 5. Submit Draft Report 6. Issue Final Report *As part of Task 1, KPMG will work with the County's staff to finalize the timeline. Page 2 Task Authorization Florida Department of Management Services, Consulting Services Contract# 973-001-06-1 February 6, 2012 Other Considerations Our analysis will be prepared under the Consulting Standards issued by the American Institute of Certified Public Accountants (AICPA) and does not constitute an examination, compilation or agreed upon procedures in accordance with the standards established by the AICPA. This analysis will be prepared based on information received from the County. No independent verification of this information will be made by KPMG and we assume no responsibility for the accuracy or reliability of the information provided to us. The analysis is intended solely for the use of the County, may be provided to any third party with the consent of KPMG, and should not be relied upon for any other purposes. In rendering the regulatory -related services described in this task authorization, we will consider the applicable technical literature, laws, regulations and guidelines provided by the regulators. This regulatory guidance is subject to change or modification, retroactively or prospectively, by varying interpretation and by subsequently issued pronouncements, legislation, and regulatory, administrative, or judicial decisions. We cannot guarantee that the regulatory authorities would agree with our analysis or that our engagement would foreclose or limit any potential regulatory action or criticism. The scope of our assistance does not constitute an audit of compliance with any regulation or regulatory requirement nor does it constitute an audit of regulatory matters. Accordingly, we will not express an opinion or conclusion or provide any form of assurance on any regulatory matters related to the areas covered in this engagement. Certain aspects of the specific requirements to be applied under the Regulations may currently be uncertain either because they still remain in draft and subject to consultation processes or because there is uncertainty in their interpretation or because they remain subject to Office of Management and Budgets' discretion or policy in how they are implemented. The requirements are therefore subject to change, potentially in significant ways, in the future. Any amendment to this task authorization, including but not limited to, the scope of KPMG's services hereunder, shall only be effective if the same is in writing and executed by the County and KPMG. As stated in the task authorization the parties acknowledge and agree that: (a) KPMG shall not provide legal services hereunder, and (b) nothing herein shall be deemed by the County that KPMG has provided such legal services hereunder. It has been our experience that the County's participation is necessary for this type of engagement to be successful. It is imperative that we receive timely cooperation regarding requested data for effective use of KPMG and County resources. Our assumptions for the engagement are as follows: The County will provide data for central service departments at division / department / fund level (or their equivalent) summaries that provide a reasonable basis for allocating each function's activity to the benefiting department/division. • If KPMG receives the requested information from the County by April 15, 2012, we will issue the draft reports to the County by May 15, 2012. If we do not receive the information by April 15, 2012, KPMG will issue the draft reports within 30 days of receipt of the requested data. KPMG is amenable to accelerating the project timeline if acceptable to the County KPMG requests the County review the draft reports and provide comments to KPMG within 15 days of receiving the draft report. KPMG will issue the final reports within 15 days of receiving the County's comments. Should the County not provide written comments or request an extension for Page 3 Task Authorization Florida Department of Management Services, Consulting Services Contract# 973-001-06-1 February 6, 2012 the review of the draft reports, KPMG will consider the draft reports as finalized and issue the reports in final form. • The County will provide relevant operational, technical, and background information as required by the engagement team. • The County will provide assistance to help KPMG achieve the successful completion of the engagement. Such assistance may include: ■ Assistance in gaining timely access to documentation, systems, and key personnel ■ Timely feedback at key decision points ■ Active participation to facilitate the timely resolution of project -related issues • The County will provide a common office space adequate for up to 2 KPMG personnel. • The County will provide meeting space as needed to conduct interviews and work sessions throughout the project. KPMG Project Team Mr. David L. Dennis, a partner in KPMG's Orlando, Florida office, will serve as the engagement partner. Mr. David Jahosky, a senior manager in KPMG's Orlando office, will serve as the engagement manager and will serve as the KPMG primary point of contact for this engagement. Mr. Chris Krepcho, a manager in KPMG's Orlando office and Ms. Kristen Kearney, a senior associate in KPMG's Orlando office, will supervise KPMG project team members during the course of the engagement. Project Budget Actual work effort may vary, but KPMG's fees and expenses will not exceed $29,500 without the prior approval of the County. Our fees for professional services include professional staffing, administrative support, report production and travel costs. KPMG will invoice for actual fees and expenses monthly. All invoices are due upon receipt. If unforeseen circumstances cause us to believe that our total hours or fees will exceed the estimate provided, we will discuss this situation with you and agree upon an appropriate course of action. We will invoice the County monthly and invoices are due upon receipt. If unforeseen circumstances cause us to believe that our professional fees will exceed the estimate provided above, we will discuss this situation with you and agree upon an appropriate course of action. Our fees are based on time and materials for personnel involved in the engagement at hourly rates commensurate with the professional's level and experience as outlined in the State of Florida Term Contract 973-001-06-1. KPMG's hourly rates per these agreements are as follows: Principal David L. Dennis 275 1$175 David G. Jahosky Senior Consultant Chris Krepcho Kristen Kearney Sara Kaiser Consultant Thomas Eaton Megan Taylor $125 Hasting Westphal Page 4 Task Authorization Florida Department of Management Services, Consulting Services Contract# 973-001-06-1 February 6, 2012 County Responsibilities By accepting this task authorization, the County's management accepts responsibility for the substantive outcomes of this engagement and, therefore, has a responsibility to be in a position in fact and appearance to make an informed judgment on the results of this engagement and that the County will comply with the following: • Designate a qualified management -level individual to be responsible and accountable for overseeing the engagement. • Establish and monitor the performance of the engagement to ensure that it meets management's objectives. • Make any decisions that involve management functions related to the engagement and accept full responsibility for such decisions. • Evaluate the adequacy of the services performed and any findings that result. Approved: Monroe County Board of County Commissioners, Florida By: Ja- V ice 19. , Ge.e. a r ya /Ox Signature: Dated: � — / 5 — / 2J KPMG LLP By: David L. Dennis. Partner Signature. q�e 0'$�� Dated: February 6. 2012 TES T�DANNY L. KOLHAnu GE, CLERK 4. 1 R �ji� �•IZ r - `° J EfPUTY CLERK "DEC -' CUNTY A7 9^ A VED AS UZA ENE A. UTTON r�Jil'iY ;r1CP�1�y — M O a y_a01 09 r r� 0 M c-,) 0 O Page 5