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FY2013 Task Authorization 05/21/2014AMY REAVILIN, CPA CLERK OF CIRCUIT COURT &COMPTROLLER MoxnoE cwxn, FLORIDA DATE: June 24, 2013 TO: Tina Boan, Director Office of Budget & Management ATTN. • Penny Kipp FROM: Vitia Fernandez, D. At the May 21, 2014 the Board of County Commissioner's granted approval and authorized execution of Item C15 Task Authorization with KPMG to update the Fiscal Year 2013 Full Cost Allocation Plan and the 2 CFR Part 225 (formerly OMB Circular A -87) Cost Allocation Plan based on actual expenditures for the fiscal year ended September 30, 2013. Enclosed is a duplicate original of the above - mentioned for your handling. Should you have any questions, please feel free to contact our office. cc: County Attorney Fin nc File y 500 Whitehead Street Suite 101, PO Box 1980, Key West, FL 33040 Phone: 305- 295 -3130 Fax: 305 -295 -3663 3117 Overseas Highway, Marathon, FL 33050 Phone: 305 - 289 -6027 Fax: 305 - 289 -6025 88820 Overseas Highway, Plantation Key, FL 33070 Phone: 852 -7145 Fax: 305- 852 -7146 Task Authorization Florida Department of Management Services, Management Consulting Services Contract# 973 - 000 -14 -01 April 1, 2014 Engagement Objective and Scope Monroe County (County) has two engagement objectives. The first objective is the completion of the Full Cost Allocation Plan (CAP) based on actual expenditures for the fiscal year ended September 30, 2013. The second objective is completion of the 2 CFR Part 225 (formerly OMB Circular A -87) Cost Allocation Plan (the Regulation) based on actual expenditures for the fiscal year ended September 30, 2013. 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 Circular A -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 ll, 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 - 000- 14 -01. 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 - 000 -14 -01 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, Management Consulting Services Contract#973-000-14-01 April 1, 2014 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, 2013 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 -2 CFR Part 225 issue the reports in final form to the County. CAP 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 June-14 July-14 Auci-14 Sept-14 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, Management Consulting Services Contract# 973 - 000 -14 -01 April 1, 2014 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. The deliverables 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 deliverables will be intended solely for the use of the County and may not be provided to any third party without the written consent of KPMG and should not be relied upon for any other purposes, and will so be marked. We disclaim any intention or obligation to update or revise the observations whether as a result of new information, future events or otherwise. Should additional documentation or other information become available which impacts upon the observations reached in our deliverables, we reserve the right to amend our observations and summary documents, including deliverables, accord. KPMG retains all ownership rights in any proprietary methodologies, methods, processes, or procedures of KPMG that pre -exist or were developed outside the scope of this Contract. If any such property of KPMG is contained in any of the deliverables hereunder, KPMG grants to the County a royalty -free, paid - up, non - exclusive, perpetual license to use such KPMG intellectual property in connection with the County's use of the deliverables. Page 3 Task Authorization Florida Department of Management Services, Management Consulting Services Contract# 973 - 000 -14 -01 April 1, 2014 The County acknowledges that KPMG uses third party service providers within and without the United States to provide at KPMG's direction administrative and clerical services to KPMG. These third party service providers may in the performance of such services have limited access to information, including but not limited to confidential information, received by KPMG from or at the request or direction of the County. KPMG represents to the County that each such third party service provider has agreed to conditions of confidentiality with respect to the County's information to the same or similar extent as KPMG has agreed to pursuant this Contract. KPMG has full responsibility to cause these third party service providers to comply with such conditions of confidentiality and KPMG shall be responsible for any consequences of their failure to comply. Accordingly, the County consents to KPMG's disclosure to a third party service provider and the use by such third party service provider of data and information, including but not limited to confidential information, received from or at the request or direction of KPMG for the purposes set forth herein. The County agrees that any claim relating to the services under the Contract may only be made against KPMG and not any third party service provider referred to above. The County acknowledges and agrees that KPMG's services may include advice and recommendations; but all decisions in connection with the implementation of such advice and recommendations shall be the responsibility of, and made by, the County. KPMG will not perform management functions or make management decisions for the County. KPMG may communicate with the County by electronic mail or otherwise transmit documents in electronic form during the course of this engagement. The County accepts the inherent risks of these forms of communication (including the security risks of interception of or unauthorized access to such communications, the risks of corruption of such communications and the risks of viruses or other harmful devices). The County agrees that the final hardcopy version of a document, including a deliverable, or other written communication that KPMG transmits to the County shall supersede any previous versions transmitted electronically by KPMG to the County unless no such hard copy is transmitted. In the instance the County shall request to conduct or use a third party to conduct security assessments to verify KPMG's compliance with security requirements, KPMG will make reasonable effort to be responsive to such inquiries for security assessments, but reserves the right to limit disclosure of details and nature of procedures, if it determines, in its sole judgment, that such disclosure would put at risk the confidentiality, availability or integrity of its own or its other clients' data. 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 July 15, 2014, we will issue the draft reports to the County by August 15, 2014. If we do not receive the information by July 15, 2014, 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 4 Task Authorization Florida Department of Management Services, Management Consulting Services Contract# 973 - 000 -14 -01 April 1, 2014 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 Jahosky, a managing director in KPMG's Government practice, will serve as the engagement managing director. Ms. Heather Lane, a manager in KPMG's Government practice, will serve as the engagement manager and will serve as the KPMG primary point of contact for this engagement. 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 labor and expenses will not exceed $30,000 without the prior approval of the County. Our fees for professional services include professional staffing, administrative support, and report production and travel costs. KPMG will invoice the County monthly for incurred costs. All invoices are due upon receipt. If unforeseen circumstances cause us to believe that our total fees will exceed the estimate provided, we will discuss this situation with you and agree upon an appropriate course of action. Our estimated fees are based on our current understanding of the work to be performed and the assumptions as stated within this task authorization letter. Should your needs differ from our assumptions or understanding of the work, KPMG is willing to discuss those differences and make changes accordingly. 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 - 000- 14 -01. KPMG understands that the County's decision to hire a professional services firm is based on several considerations and not solely based on cost. KPMG's team further understands it is a question of value and return on investment. We have seen lower cost selections end -up costing clients much more in the end, because of the re -work due to a provider who simply does not understand the technical requirements and cannot provide the depth or breadth of experienced team members similar to the team KPMG has assembled to serve you. Where KPMG is reimbursed for expenses, KPMG's policy is to bill clients the amount incurred at the time the good or service is purchased. If KPMG subsequently receives a volume rebate or other incentive Page 5 Task Authorization Florida Department of Management Services, Management Consulting Services Contract# 973 - 000 -14 -01 April 1, 2014 payment from a vendor relating to such expenses, KPMG does not credit such payment to its clients. Instead, KPMG applies such payments to reduce its overhead costs, which costs are taken into account in determining KPMG's standard billing rates and certain transaction charges that may be charged to clients. 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, Florida KPMG LLP By: Sign Dated: /' (,�w 2"11 2_01q By: David Jahoskv Managing Director Signature: <:::;; —�– Dated: April 1, 2014 C t2» CD ..� C C.) W •• C#7 sa. COUNTY ATTORNEY MONROE APPR VED AS TO FORM: C7 •� V C - V" N �W CHRISTIN M. t IMBERT- BARROWS COUNTY AT C3 jC) ASSISTANT 3 % Date �— U. .._ . P X: Page 6