Item C38
Revised 3/99
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: January 19, 2000
Division: Manaaement Services
Bulk Item: Yes X No 0
Department: OMS
AGENDA ITEM WORDING: Approval of a contract with the accountina firm KPMG to
conduct an efficiencv analvsis of the Countv transportation proaram and recommend
activity based costina measures (performance measures) to monitor the efficiency and
effectiveness of this proaram,
ITEM BACKGROUND: The County provides transportation services to citizens. paid for
bY local option aasoline taxes, The Fiscal Year 2000 budaet for these services is
$1.088.841 and includes approximately 19 full-time employees, The contract with
KPMG is part of a state-wide Florida Division of Manaaement Services neaotiated
contract.
PREVIOUS RELEVANT BOCC ACTION: At the December 8.1999 meetina. the SOCC
voted to neaotiate an updated contract for the transportation efficiency study with
KPMG,
STAFF RECOMMENDATION: Approval.
TOTAL COST: Not to Exceed $30.000
BUDGETED: Yes X No 0
COST TO COUNTY: Not to Exceed $30.000
REVENUE PRODUCING: Yes 0 No X
AMOUNT PER MONTH
YEAR
APPROVED BY: COUNTY A TTY 0 OMS/PURCHASING 0 RISK MANAGEMENT 0
DMSIONDIRECTORAPPROVAL:- -::/...----L:;J-4....,(
DIVISION DIRECTOR NAME: James L. Roberts
DOCUMENTATION: INCLUDED: ~ FOllOW: It NOT REQUIRED: 0
DISPOSITION:
AGENDA ITEM #:
/-w/
MONROE COUNTY BOARD OF COUNTY COMMISSIONERS
CONTRACT SUMMARY
Contract #State Contract 973-572-99-1
Contract with:KPMG Effective Date:
Expiration Date:
Contract PurposelDescription:Conduct an efficiency analysis of the County Transportation
program and recommend activity based costing measures (performance measures) to monitor the
effiiciency of this program,
Contract Manager:John Carter
(Name)
4482
(Ext. )
OMB/STOP 1
(Department) / Courier Stop
for BOCC meeting on 1/19/00
Agenda Deadline: 1/5/00
CONTRACT COSTS
Total Dollar Value of Contract: $30,000,00 Current Year Portion: $30,000.00
Budgeted? Yes[8J No D Account Codes: _-_ _ _
Grant: $N/A 001-00101-530340-
-- -
County Match: $N/A __
ADDITIONAL COSTS
Estimated Ongoing Costs: $N/A/yr For: N/A
- -
(Not included in dollar value above) (eg, maintenance, utilities, janitorial, salaries, etc,)
CONTRACT REVIEW
OMB Form Revised 12/13/99
Changes
Date In Needed ~ Re~
Division Director ~ YesDN~,-./~~--...
.~. YesD NoD (U.J(kr~ ~~
J/tPIf# YesDN00 ~, ? /
County Attorney / /; ~0~) Y es~D
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Proposal
to provide consulting services to
Monroe County, Florida
for
Costing and Efficiency Consulting
Services
January 7, 2000
Table of Contents
I. Letter of Transmittal
II. Qualifications and Experience
Ill. Professional References
IV. Cost Proposal
V. Scope of Work
iPMGJ
Table of Contents
I. Letter of Transmittal
II. Qualifications and Experience
III. Professional References
IV. Cost Proposal
V, Scope of Work
KPMt.
' I
ee
-.........J _ Ju .___'
450 East Las Olas Boulevard
Fort Lauderdale, FL 33301
Telephone 954 524 6000
Fax 954 462 4765
January 7,2000
PRlV A TE
Mr. John Carter
Director, OMB
Monroe County, Florida
5100 College Road
Key West, Florida 33040
Dear Mr, Carter:
KPMG LLP (KPMG) is pleased to provide this Request for Proposal to partner Monroe County (the "County") in
analyzing the operations of the Social Services Transportation program of the County, We have assembled a
project team comprised of senior individuals from our Public Services line of business in order to provide the
service the County desires,
Our Approach
Our approach to this engagement will be to utilize our six phase governmental ABC methodology including our
Activity Based Costing software for processing, modeling, and reporting of cost infonnation for the County's
Social Services Transportation program, We have found that ABC studies to be most successful when KPMG and
the client have teamed together and work closely in collecting and analyzing cost information,
Once a fully loaded cost model has been determined, we would then proceed to calculate the avoidable and
unavoidable costs to facilitate managed competition and privatization considerations, This allows the County to
determine the economic feasibility and cost consciousness of the County directly operating the Social Services
Transportation program,
Critical Success Factor
For this project to be successful. County management and Social Services Transportation personnel must be
involved in the development of the ABC methodology, Throughout the engagement, we will work closely with
County pcIICIIIDe1 to easure tbey are becon\il'l &nn1i-r with the 1I1etbodo1oay UIOCiaIed with the develclp-.... of
the wortiaa ABC model We have utilized this bauds-on training technique, in addition to the formal traiaing
course, at severa1locations and the results have been exhclDCly positive.
Why KPMG ?
When it comes to ABC, KPMG is the pioneer. We were the first firm to successfully transfer a concept that has
proven successful in manufacturing to the public sector. Just as important, because government service is one of
the firm's national lines of business, you can be sure that the people assisting you are knowledgeable of
gOVernment organizations and operations - - and are totally committed to meeting your needs.
Weare also at the forefront of providing efficiency consulting services to the Public Sector, Such services include
review of operational processes and supporting financial systems, assistance with establishing performance
measures, assistance with managed competition and privatization issues ( e,g., identifying unavoidable and
avoidable costs) and we also assist governments with cOmparing responses to requested proposals. Most. if not aI,
of these services include an ABC component to assess the cost structure of a process, component. or deparnnent.
.... 'O','Gnc.C"G
-_:: -' S r- '~a !ldOlllr\/ :::a"~e''S''''o 'S
.""~d'C~d " :;.'. ~~
South Florloa BUSIness Unit
Mr. John Carter
Momoe County, Florida
January 7. 2000
Page 2
This assessment of current costs is vital because a government can not determine with great confidence where it
will end up tomorrow without first better assessing where it is today. This is where ABC and our other services
could help.
Over the past six years. we have implemented the KPMG public sector ABC methodology throughout various
governments and public sector institutions (i,e" school boards, spons authorities, etc,) across the nation, most
notably the City of Indianapolis, School District of Martin County, City of Coral Springs, City of Cape Coral, and
Escambia County, to assist them in the identification of what services are being provided to citizens and the cost of
performing these services,
KPMG wants to team with the County in this effort because we stand Committed to government improvement. Our
fInn's long-term commionent to public sector reinvention gives us a head start in meeting your needs, Based on
our years of experience working with state and local governments _ from North Carolina and Louisiana to
Indianapolis, New York City, and Marion County - KPMG's Public Services Practice has developed our
proprietary Performance Accountability System™ (PAS), which includes such tools as Activity Based Costing
(ABC), A unique set of products that can be effectively used individually or as a package, PAS gives you the tools
to turn the latest management theories into practice and equips your organization to do more for less,
In this proposal process, other finns will make claims of experience in serving government. We believe the County .
is best served by a firm that not only has served many of the nation's largest governments, but has been involved in
some of the most innovative initiatives in government. such as the development of models for performance
budgeting, the privatization of various municipal services and leading the nation in helping to reinvent government.
Our Commitment
Should you award the services to KPMG, the County will be supported by some of the best professionals KPMG
has to offer located in South Florida and Orlando, thus assuring local involvement and the ability to be highly
responsive to your needs. The team for this project will be assembled based on the technical requirements to
complete this project successfully. The individuals selected to serve the County have the experience gleaned &om
working with other clients in both the public and private sectors, You can rely on these prof---" ' eo be
inDovative, creative, and raponsjve in beJpina the Couuty improve operations and ~:...:~.ov efticieDcy,
We deeply appreciate that this effort is important to the future of the County, and we are eager to join you u you
move toward improved services. We appreciate being considered for this important engagement and usun: you
that, with our selection. Monroe County will receive the finest professional effort and services available on . timely
basis. Attached please find our proposal, a firm and inevocab1e offer for ninety (90) days subject to the SUOI:oeuflll
completion of our prospective client evaluation. The County is a client we would be proud to service. We offer
you a team with significant governmental experience.
Again, on bebaIf of the firm, we are excited about this opportunity to become a member of the County's team in
order to help you meet the continuing challenges facing you as we approach the twenty-fust century, If you have
questions or need additional information regarding any of the information presented in the attached proposal, please
Mr, John Caner
Monroe County, Florida
January 7, 2000
Page 3
feel free to contact me at (954) 847-3962.
Very truly yours,
KPMG LLP
'--------
--- "
,<--i~\ ~ J-~~--
Kenneth F. Deon
Partner
Qualifications and Experience
Firm Profile
KPJ/G is ah!e ((I hring
tOl:etha {ocu! und national
resources to address each
l holt ',\ s!'eCltic needs
KPMG is comprised offtve
nationa!lines of husiness
--__ni'"
KPM(;J
This section presents KPMG LLP's (KPMG) protile and qualifications to Monroe
County, Rorida (the "County") for providing the consulting services it has
requested. Our experience and structure sets KPMG apart from the competition
and makes us highly qualified to meet the County's needs,
As the County moves forward into the future of more accountability, the County
will require business advisors who share that vision, More imponantly, however,
those business advisors must have the qualifications to help achieve the promise
of the vision. With the KPMG team you can be assured of innovative services
which will help bring the County's aspirations to fruition.
KPMG LLP is the United States member firm of KPMG International, In the US,
KPMG partners and professionals deliver a wide range of value-added
consulting, assurance, tax, and process manag~r;lent services. Established in
1897, KPMG is today a major professional servIces firm employing more than
15.200 professionals directed by more than lA-3D panners, We operate out of
130 geographic locations throughout the country. including the South Rorida
Business Unit. In addition, we normally utilize professionals from other
geographic offices around the country to work with our local office service
providers to present the most qualified team to assist our clients.
KPMG recognizes that each of our clients operates in a unique business
environment requiring products and services tailored to their needs, Our clients
need innovative solutions that will help steer their organizations through
challenging and uncenain times to reach their business objectives. To respond to
our clients' needs and the dynamics of each market/industry segment. we have
organized our firm to focus resources in fi ve specialized Lines of Business
(LOB). each of which repons directly to the Chairman, All of the firm's partners
and management professionals are assigned to one of these practice areas and
spend their time providing services to clients within that industry or area of
expenise. The tive LOBs include:
. Public Services
. Health Care
. FinaDcial Services
. Consumer Markets
· Information. Communication & Entertainment
KPJ/G /ws Implemented
market speciali::atirm lfl order
[0 !ocus our etj()f"ts and
prnl"ide the highest (IUulit\'
sen'lces und products to our
c/ienr.~
Public Services
Practice (PS)
KP,HG's Puhlic Sen'ices
pmctice is recogni::ed as a
leading prol"ida of
professional services to the
puhlic seUor
KP,HG "nlllllili::e senior
Lldl"lSOn' sen'ice I'rnfessiot1uls
from our Puhlic Sen'ices
Practice
~
As a result of this LOB structure, we are bener able to deliver industry-focused
business solutions and services specitically to governments and other public
sector clients. We were the tirst professional services tirm to reorganize by
market-focused, integrated teams, We have found that by dedicating our people
to a particular industry or market they are able to direct their skills and
capabilities to bener serve our client's requirements, Consequently, we are able
to deliver trained professionals who understand their clients' business, Our
structure's value is evidenced by our continually high client satisfaction
assessments and by KPMG being the only Big Five accounting firm ranked as
one of the Top 200 federal agency contractors by Government Executive,
Unlike the other Big Five tirms. KP~G has made government a key focus of our
business and our future, KP~G is a leader among government consulting and
assurance tirms, and KPMG's Public Services (PS) Practice is one of the fastest
growing of our five lines of businesses, The PS Practice has been working with
United States federal. state. and local governments for over 80 years. and is today
serving more than 2.300 clients and providing a wider range of consulting
services than any other accounting and consulting firm, This practice consists of
110 partners and over 1,000 professional staff members who devote their full-
time energies to providing a comprehensive set of services to our public sector
clients. Our government and public sector clients rely on our financial.
technological. and advisory capabilities to achieve increasing levels of
operational and program effectiveness. KPMG professionals assist government
and public sector clients by providing superior performance enhancement
services, assurance assessments, and systems implementation services and
software products,
Working exclusively and extensively with public sector organizations, the
professionals in KPMG's PS Practice are well aware of the need for public
scrutiny of, and deliberation on, our analyses, Therefore, we seek to assist
government decision makers in the preparation and presentation of infonnation
used in decision making, Our professionals are often called upon to present our
evaluations. studies, and repon conclusions to commissions, legislatures, and
otber stakebolden. Knowing that our work will be thoroughly reviewed by the
public. we are meticulous about maintaining worlcpapers and records so that our
analyses and findings are well supported and documented.
2
Performance
Accountability
Services
\V/! ht'/i/!I'/! rlwr KP,\1G is rhe
()niYjirm which is Lleril't'l\'
umduering ABC srudiesf()r
puhlic sector insritutions und
has developed u methodology
to facilitate the success nl
rhese en~u~ements.
KPMG team members have
extensi~'e experience in
performing ABC studies for
public sector institutions (i.e..
governments),
~
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! . . : i
The imponance of performance accountabiliry in the public environment cannot
be over emphasized, In 1974, the Cnited States Comptroller General told
auditors to move beyond financial audits and begin to evaluate the performance
of public sector institutions. He urged auditors to respond to the public's demand
for information about results achieved with public funds, KPMG has led the
pack in developing budget and accountabiliry systems to do just that -_ measure
the performance of public sector institutions.
Twenry years ago. the evaluation of the results of public sector spending was a
radical idea. Today, it is common place within KP\1G. We have developed
systems that help public sector officials understand what activities drive budgeted
amounts. as well as facilitate the evaluation of departments' activities. Our
system and process is called Activiry Based Costing, or ABC.
The Common Problem
While public sector institutions are often very familiar with "big picture" issues
(such as how much various departments' budgets increase annually), they
rypically lack accurate information about the specifics. Public sector institutions'
systems have not traditionally been designed to determine the cost of providing
specific services and performing single activities.
Public sector institutions need a way to determine the true cost of providing given
services, as well as to assess how resources are consumed and where to focus.
improvement effons, ABC provides these answers,
KPMG's Solutions
KPMG has applied ABC principles to activities of public sector institutions many
times -- in ways that demonstrate savings and real long-term paybacks far in
excess of the costs incurred,
To capture the information needed. we work closely with personnel in various
departments. Together we define activities and outputs, We then collect and
analyze appropriate costs and allocation methods. With the help of ABC, public
sector institutions can accurately measure the cost of every service deU~ and
use that information to increase efficiency,
3
KPMG Project
Team
~
KP\1G's Project Team will consist of Public Service professionals from our
\forth and South Florida offices, Both practices have extensive experience with
implementing activity based costing methodologies for governmental
organizations and reviewing cost allocation plans, as well as the federal cost
principles and procedures contained in OMB Circular A-8? This Team will also
include professionals with extensive experience in process review and
performance measurements,
Our project team reflects the level of importance we place on this engagement
Our team brings to the County an unsurpassed combination of technical skills and
broad. relevant experience in evaluating methodologies for cost identification and
implementation, The persons selected to serve the County have the professional
experience and specialized skills necessary to provide the highest possible caliber
of engagement service,
The key members of our project team are identitied in the organization chart on
the following page. Their names and titles are listed below, Resumes for key
members of the project team. which describe relevant experience, are also
provided at the end of this section. The team will be comprised of the following
individuals:
~~~'
, .' " " ' . " Client Service and Technical
. " Resource
Ken Deon
Engagement Partner
Ken Carey
Engagernent~anag
.t
KPMG Client Service Organization Chart
Client Service
Responsibilities
Client Services and Technical
Resource Partner
EngagementPanner
~
The following paragraphs provide a description of the responsibilities of each of
the individuals as a pan of the key project team,
Dave Dennis will serve as the client service and technical resoun:e partner,
Dave will be responsible for providing lecbnical assistance to tile project Ieam'
related to activity based costing and performance measure issues encountered
during the project.
Ken Deon will serve as the engagement partner. Ken will have primary
responsibility for the development of the overall project plan and selection of
tools and techniques to be used, He will make final policy and technical
decisions as well as perform the review and sign all repons. He will receive
project status reports from the engagement manager.
5
En !:U'..;ement J!unu!:e!"
Project
Management
Key to
Completion
Our project structure ensures
rimely superior services
.--:CJJQn
KPiviGJ
Ken Carey will serve as the engagement manager and provide direct oversight in
leading our services to the County. Ken will work closely with County personnel
to ensure that all of the County's needs are met effectively and efficiently. Ken
will coordinate aU communications with County representatives and lead all
progress meetings to update the County on the status of the engagement. Ken
will be on site on a daily basis performing the work plan procedures in order to
fulfill the objectives of the project. He will also serve as technical resource
manager,
Ken will be supported by other staff members from our South Rorida office,
The key to a successful relationship is timely service, which is both proactive and
responsive and provided by knowledgeable and committed professionals. KPMG
has ex.tensive ex.perience with Activity Based Costing and Performance
Measurements, We also have proven project management techniques to
complete projects on schedule.
As defined above, Ken Carey will be responsible for the management of the
project, including the planning, scheduling, and execution of aU tasks. The
project manager directly participates in key tasks and reviews all deliverables for
completeness and quality, Ken will serve as the primary liaison with County's
personnel.
KPMG is committed to ensuring our projects are completed in a timely manner
and adequately documented, Part of the role of the project manager is to manage
the engagement. The manager will be responsible for ensuring that working
papers are kept on the engagement. The working papers are a collection of
engagement documentation that includes correspondence, work plans, results and
reports, These working papers provide a historical summary of the work
provided, They also provide a valuable source of lessons learned.
Additionally, the engagement partner will be reviewing the working papers on a
timely basis to ensure the project is proceeding as scheduled.
Ii
Prn/ecr Stat/in ~
Each member of the engagement team is responsible for specific aspects of the
engagement, The depth and breadth of the experience of the personnel selected
for the engagement team cannot be matched by any other firm, They have
devoted their careers to serving governmental and public sector clients, This
experience is illustrated in each individual's resume which follows.
-r-r--
~
7
Resumes
Ken Deon
Parrner, KPJfG LLP
En::ugttmttnt Purtner
MJ', Deon is an Assurance Based Advisory Service (ABAS) panner in the Public
Services practice for the South Rorida Business Unit.
Representative Accomplishments
Ken is a government services professional who has more than 15 years of
professional experience providing consulting and assurance services to numerous
state and local government entities, including the States of South Carolina, New
York and Vermont.
Ken has devoted his entire career to serving government. focusing primarily on
financial statement attestation. the direction of financial and perfonnance audits
performed in accordance with Government Auditing Standards, assessment of
accounting and management reponing systems. user fee and rate study analysis,
evaluation of internal controls, and recommendations for process improvement.
Ken currently serves. or has previously served. on the audits and/or consulting
projects of the foHowing entities:
· School Board of Broward County, Florida
. City of Coral Springs, Florida
. City of Hallandale. Rorida
. State of South Carolina
. State of New York
. State of Vermont
. City of Miami. Florida
. City of Rock Hill. South Carolina
. City of GreenvilIe, South Carolina
. The County of Wake. North Carolina
. Broward County, Florida
. Miami-Dade County, Rorida
. Gwinnett County, Georgia
Professional Activities and Other Responsibilities
Ken bas served u an instructor in several of the Fum's local. Iqioaal,. and
national go~ment training programs and seminars. He also served on the
Firm's professional practice and quality assurance committee, perfonning
technical reviews on various engagements in other offices throughout the United
States,
Ken is a certified public accountant and a member of the Florida Association of
Cenified Public Accountants. and the American Institute of Certified Public
Accountants, He is also a member of the Government Finance Officers
Association.
Education
Ken received a Bachelor of Science Degree in accounting from the State
University of New York at Plattsburgh,
~--, r-"' r----
~
8
Dave Dennis
Parrner, KP.HG LLP
Client Ser\"ice and Technical
Resource Partner
~LS=L
~
David L. Dennis. a punner in KP\1G' s Public Services Practice, has 19 years of
professional experience in government services, Mr. Dennis joined the firm in
the Dallas office in 1979. transferred to the Executive Office in New York in
1984. and then to Orlando in 1985. \;fr, Dennis' primary market focus in the
public sector practice,
Representative Accomplishments
Served As Eneaeement Partner For Cost Allocation Services For:
. Cities
· City of Gulf Breeze. Rorida
Fon Walton Beach, Florida
. Counties
Bay County. Florida
Escambia County, Rorida
Horry County. South Carolina
· Palm Beach County, Florida
· Polk County, Rorida
. State Agencies and Authorities
· State of Florida Department of Children and Families
State of Florida Department of Health
· Tri County Transit Authority (L YN'X)
Served As Eneaeement Partner on Performance Aut/ifs For:
. Schools
· Orange County Public Schools
· Hernando County School Board - Finance Department
· Hernando County School Board - Purchasing, Operations
& MainteoalK:e I>epanmeut
· Hernando County School Board - Transportation
Department
. State & Local Government
· Hiilsborougb County - Library Services Department
· HiUsborough County - Health and Social Services
Department
· Hillsborough County Library Services Department
· Tampa Pon Authority
· Tampa Sports Authority
<)
. Federal Government
· Cnited States House of Representatives - Chief
Administrati ve Officer
United States House of Representatives - Clerk
United States House of Representatives - Sergeant-At-
Arms
Served As The Enflaeemenl Partner On Manaflement And ODerationaJ Studies
For:
Alliance For Aging Area Agency on Aging
Area Agency on Aging - Pinellas County
Area Agency on Aging of Broward County. Inc
· \1id-Florida Area Agency on Aging
Tampa Pon Authority
· Orange County School Board - Transportation Department
Served As Audit Panner/Audit Manaeer For The Followinfl Governmental
Clients
· City of Lake Mary
· City of OcaJa
City of Winter Park
· Orange County Convention Concessionaire
Hillsborough County
Pinellas County
· Orlando/Orange County Expressway Authority
· Villages Center Development District
· Devils Garden Water Control District
· Collins Slough Water Control District
Florida Department of Highway Safety and Motor
Vehicles
Otar hokeD
· Conducted an Activity Based Costing Study for the City of Cape Coral. We
were engaged to prepare an ABC analysis of the engineering and the
facilities departments. We also provided the training to pennit the City staff
to update the ABC study for these and other departments,
~~""I'
: .1
" I
10
· Conducted a costing study for Escambia County Department of Solid Waste,
The Purpose of the Study was to I) determine the full cost of services
provided by the landfill and other solid waste operations, 2) determine the
avoidable cost of services by the landfill and other solid waste operations, 3)
make recommendations to improve operational efficiencies, and 4) provide
funding alternatives for the County to cover the current level of service. As
a result of our study. the County adopted a revised franchise tax and
implemented operational changes which provided for a full funding of costs
related to landtill and other solid waste operations.
· Selected to serve as the Acting Chief Financial Officer of the United States
House of Representatives from December. 1996 until July, 1997, Duties
included overseeing the finance operations for the entire U. S, House and
reponed directly to the Chief Administrative Officer, Functional areas
included preparing the 1998 budget for the Appropriations Subcommittee for
Legislative Affairs. The 1998 budget was a .~6% decrease from the prior
year, The first such decrease in four years. Also, oversaw the continued
implementation of the House's first fully integrated dual entry accounting
information system: began the process to complete the needs analysis and
requirements definition for a Year 2000 payroll system; presented a
reorganization of Finance Office operations. Assisted in the selection
process of the new Chief Financial Officer (Associate Administrator _
Finance),
· Serving as the engagement partner on a budget. costing and planning study to
assist the State of Rorida "Work And Gain Economic Self-sufficiency"
(W AGES) program, The program was established by the Rorida Legislature
and formed out of programs taken from the Florida Department of Labor and
Employment Services and the Florida Department of Children and Family
Services, We are assisting WAGES in developing an implementation of the
devolution of services from state agencies to local coalitions operated
agencies who are part of the local communities, We are also assisting
W AGES in establishing a costing structure and budgeting process for the
new entities.
· Participated in a study for the Florida Department of Slate to .....,. me best
way to resttucture and re-engineer- the Departmedt of Highway Safety IDd
Motor Vehicles. The goal of the study was to re-engineer the operations of
the Drivers License and Motor Vehicles and fold those operations into the
Department of State. The Department of State also considered outsourcing
and privatization alternatives.
~
II
· Conducted a strategic planning slUdy for the EMS Depanmem of Orange
Coumy. Rorida, The EMS Depanmem is a member of the EMS Steering
Committee for Orange Coumy. which includes municipalities in Orange
County, health care providers (hospitals), and other emergency service
providers (ambulance services), The purpose of the slUdy was to review,
analyze and prepare a report of recommendations that provides the Coumy
with viable strategic EMS plan for the next ten years. The strategic plan will
ensure Orange County residents will receive the highest level of care at the
appropriate cost
Background and Education
Mr. Dennis graduated magna cum laude from Indiana University where he
received a bachelor of science degree in business. He is a past president and
currently treasurer of the Indiana University Alumni Club of Central Rorida, He
earned the Elijah Watt Sells award for his performance on the uniform Certified
Public Accountam examination, As a licensed certified public accountam in
Florida. he is a member of the American Institute of Certified Public Accountants
and the Rorida InstilUte of Certified Public Accountants (FlCPA), Mr, Dennis
currently serves on the Legislative Policy Committees of the FlCPA and has
served as a member of the Board of Governors of the FlCP A since 1996, Mr,
Dennis is a member of the Governmem Finance Officers Association (GFOA)
where he serves on the Special Review Committee, He is a member of the
Florida Government Finance Officers Association (FGFOA) and is a member of
the Central Rorida Chapter of the FGFOA where he has been a frequem speaker
on government operational issues, He is also a trustee and past president of the
Leukemia Society of Central Florida. a member of the investment committee of
The Rorida Catholic i'Iewspaper. and member of the School Board for the
Annunciation Catholic Academy,
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12
Ken Carey
Huna<.:er, KPJ/G LLP
Enl!al!l:ml:nt J1ana<:er
~
\;fr. Carey is a \'tanager with KP~G's Public Services Practice in the Fort
Lauderdale. Rorida office, He has over eight years of professional experience in
indirect cost allocation and governmental accounting and auditing, He has
prepared Full Cost and OMB Circular A-87 Cost Allocation Plans for 40 cities,
counties, and state agencies throughout the United States, These assignments
included conducting workshops for clients in order to enhance their
understanding of the cost allocation process. as well as successfully negotiating
these plans for approval by federal cognizant agencies, His audit experience
includes school boards. community colleges. state agencies. universities, non-
profit. banking, high technology, retail. and real estate clients,
Representative Accomplishments
Successfully defended the Florida Department of Children and Families
(formerly HRS) cost allocation plan before the Division of Cost Allocation of the
V,S, Department of Health and Human Services and negotiated rates developed
in the plan for use in Federal grants,
Conducted workshops for Broward County to enhance the enterprise funds'
understanding of cost allocation charges assessed by the County,
Reorganized the Hillsborough County Cost Allocation Plan towards a "fund-
oriented" methodology, resulting in greater indirect cost recoveries from the
special revenue and enterprise funds.
Recommended conversion of the City of Hialeah's insurance program to an
internal service activity, resulting in increased cost recoveries to the City's
General Fund from the Community Development Block Grant program,
Identified new areas of indirect cost in the City of Miami's non-departmentaJ
accounts. thus increasing the City's recovery of indirect costs from the
Community Development Block Grant and Job Training Partnership Act
programs,
Designed attaiaing manual to assist auditors in their audit of f'IoricILA & M
Uniwnity', fi~ aid program, resulting in completion of die IIIdit IIDdet-
budget.
.,;,:=...-<'-...
Qualified to perform Yellow Book audits.
Currently serves as chairperson of the Management and Budget sub-commiaee of
the Florida Government Finance Officers Association's Conference Program
Committee and was the immediate past chairperson of the Accounting and
Auditing sub-commiuee.
Serves on the State and Local Government Committee of the Rorida Institute of
Certified Public Accountants,
lJ
. Representative Client List
Cities
Coconut Creek
Ft. Walton Beach
Gulf Breeze
Hialeah
Hollywood
Homestead
Jacksonville
Miami
Pensacola
Tallahassee
Tamarac
San Francisco, CA
Counties
Bay
Broward
Escambia
Hardee
Hendry
Hillsborough
Horry,SC
Leon
Manatee
Miami-Dade
Monroe
Okaloosa
Palm Beach
Pinellas
Polk
Sarasota
Wayne, MI
Background and Education
State Agencies
Florida Depanment of Children and Families
Florida Depanment of Elder Affairs
Florida Depanment of Health
Missouri Depanment of Transportation
Mr. Carey graduated with a B.S, and Masters degree in Accounting from the
University of Florida. As a licensed certified public accountant in Florida. he is a
member of the American Institute of Certified Public Accountants and die Florida
lnatitulie of Certified Public AccounranIL He is also a member' of Ibe Florida-
GoWllnm..ut Finance Officers AssociaIion.
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14
Professional References
KPMG has assisted multiple public sector institutions with the implementation of performance accountability
systems by sening standards and performance objectives. measuring performance against these standards and
communicating the results. The depth of our knowledge is illustrated by the number and variety of our
experience. Below is a partial listing which outlines the scope and our experience with numerous clients across
the country,
I ___ ___ __ _ _ __~___ ____ _ __ _ ___~__ __~ '__ ~~_____
City of
Indianapolis
· Developed an ABC methodology for the City which
included the development of training programs for
all City employees. Training programs varied from
high level training for Council members and upper
level management to hands-on training for front line
employees. Worked dosely with selected City
employees (ABC L:oordinators) to dew lop a "train
the trainers" l:ourse.
· Performed ABC studies in all major City
departments: depanments included Publk Works,
Capital Asset Management. Parks and Rel:reation.
Metropolitan Development. Fleet Management and
Fire, The results of the ABC studies were used as a
basis for managed competition, user lee suppon,
budget justification. pay-for-performance and
pcrformance mcasurement. The implementation of
the ABC mcthodology has lead to dramatil: savings
for the City,
· Assisted the City in implementing their managed
competition effons, Responsibilities included
assisting employees in competitive bid preparation
and training in the bid process, The development of
competitive bids included an analysis of avoidablel
unavoidable overhead costs, Worked with selected
depanments. such as the bus company, to develop
the RFP and analyzing bids received from the private
sector,
· AasiIted the City in the ~ of perfOl'llllllCe
IDeIIUIa for ftIiouaeity depMmeats by ch:1opina
and facilitating a three-day workshop for each City
depanment
· Assisted in the development of the popular budget
which "married" the ABC and performance
measurement methodologies,
· Assisted the City in the development of a
pay-for-performance system which rewards
employees for their roles in attaining the city's goals.
Mayor Stephen Goldsmith
City of Indianapolis
(3 \7) 327-7977
Deb Norman
Direl:tor of Parks and
Recreation
(317) 327-7084
Steve Fantauzzo
AFSCME President
(317) 632-1432
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15
Professional References
~.
-- - - - - - - -- - - - - -- - -- - -- -- - - - - -
School District
or Martin
County. Florida
· Performed ABC studies in the area of transportation
and lleet services, Assisted the District in analyzing
solicited. competitive responses to RFP for
pri vatization of the transportation and !leet services
activities,
Douglas Griflins
School District Attorney
(56!) 219-1235
t.r: , '_ .
U> ,
=~- - - - -- - - - -- ~ - ~ - - -- - -- -- - - - - - - ~-- - - - - - --- -
Esaunbia
County
· Performed a costing and competition study of the
Solid Waste department. The results of the project
have been used to explore opponunities for
privatization.
David Gregory
Director of Public Works
(850) 968-6628
I
r- -
City 01 Cape
Coral
· Performed ABC studies in the areas of facilities
management and design/draft engineering, The
results of the study have been used to identify areas
to impro~ efIkieocy and a basis (or possible
IIUIUlpd c:ompeIith)u.
Howard Kunik
Director of Finance
(941) 574-0481
KPMGJ
16
Professional Fees
Fee Schedule
"'II each area, \,()1I have done
more than we were hoping
c'flllld he done,
YOll have he en the reason 1<\'e
have moved forn..ard. "
The Honnrahle Henson 1', Barnes.
hmner I'r,:sldem Pro Tempore of
the :-.iol1h Carolina Senate
~
Our fees are based on our estimate of hours required to complete the engagement
at the appropriate State approved billing rates under conttact number 973-572-99-
I for the individuals involved to ensure high quality service, Each of the team
members has an assigned billing rate directly related to that person's level of
responsibility and experience. As an indication of our commitment to both the
County and the govemmentlnon-protit industry. our fees for this engagement
represent a substantial discount from our standard rates. However, our average
rate may appear a little higher than others due to the mix of more experienced
professionals assigned to serve the County.
The following price infonnation includes built-in efficiencies from having a
thorough knowledge of the County's existing cost structure and indirect cost
allocation methodology:
Social Services TransDortation Proeram
Maximum all-inclusive cost: _$30.000
Total estimated billable hours:
152
Cost per billable hour:
$197
Estimated time to complete:
90 Days
't~4~-~;;: \:'
17
The out-of-pocket expenses included in the total all-inclusive maximum price
above includes administrative support. travel expenses, report production, and
similar expenditures. Any additional areas requested by the County would be
costed according to the hourly rates as noted below.
The average rate to be charged, including a breakdown of overhead and protit is
shown below:
Hourly
Rate
Partner
Senior Manager
Manager
Senior
Staff
$375
250
230
190
150
We believe that our fees are fair and reasonable considering the quality of our
professional staff and the extensive service we provide. However. we would not
willingly allow a minor fee differential to impact our ability to serve the County,
We are. therefore, prepared to discuss the impact of varying levels of County
assistance and other factors on the fee calculation process. and work with the
County to minimize fees in every way possible,
KPMG will submit monthly progress billings based on the hours worked and the
out-of-pocket expenses incurred, Interim billings will be based on hours worked
and will be due and payable within 30 days upon receipt.
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18
Scope of Work
Engagement
Objectives
Work Plan
Approach
\
~
Currently, the County does not have the necessary information available to
determine all of the activities or services being provided by the Social Service
Transportation program nor the related cost of providing such services, As such,
our engagement team will be focused on the following guiding project objectives:
· Providing an initial briefing to County senior management regarding
implementation of an Activity Based Costing (ABC) system;
· Identifying the activities performed by the Social Services Transportation
program, separating the activities into core and non-core;
· Identifying the "true" direct and indirect cost associated with each activity by
utilizing existing management information systems to the extent possible;
· Calculating the avoidable and unavoidable costs for use in evaluating
privatization proposals and exploring managed competition initiatives;
· Evaluating the cost efficiency of the Social Services Transportation program.
specifically the dispatch software utilized;
· Assistance with establishing performance measures that can be utilized by
the County in the future to determine how well a program is achieving its
goals;
· Providing any recommendations concerning improvements to the Social
Services Transportation Program that could result in greater efficiencies and
economies; and
· Providing an exit briefing to the senior management regarding findings and
all pertinent documentation generated from the consulting services.
The project is a "joint effort" by both the County and KPMG, and for the results
to be effective, involvement by the County is necessary, The representatives
from the County to be included in this project should be from all levels within the
County .
Once engaged to provide the services described in the RFP, we will work with
the County to create a more specific work plan, The guiding project objectives
and the County's input will enable us to create a specific work plan approach
designed to meet the County's needs.
Our ~W-1' I\.fw___Ac:co-,11tIbiIity S)'IIaD 1M (PAS) beIp.~
',.".~,~~l, ,[.rt~"''',of die .... .....lbeirc:ontrol.- ~,:-,;
',' ."C08tS;peito.~ planning, budgeting and reporting - to deH_~""""""<:'" ,
citizens and residents demand and deserve, The tools that make up PAS put the
reins back in the hands of those elected or hired to manage government's
business. With these resources. you can define goals and objecti~ target
performance IDe8SUl'eS. assess costs and make infonned choices, We will use
some of the tools of PAS to complete the requirements of this project.
19
KPMG's ABC
Methodology
Phaserl :,
\
CC'.fJCl
KPiwr;J
The success of meeting the stated objectives and timetable of this engagement is
subject to the timely availability and accessibility of information, During the
course of the engagement. we will meet with and request clarification.
documentation, and information from County personnel. Provided reasonable
notice is given to the parties. it will be necessary for personnel to make
themselves available. respond to requests. and provide requested information. In
addition, the County will be responsible for all assumptions made and the
allocations of data.
The remaining part of this section will describe our approach to completing the
scope of the work defined in the RFP and has been developed to promote the
successful completion of each project phase. KPMG considers a successful
project to be one that meets or exceeds the stated objectives and is delivered on
time and within budget. Our proposed work plan has been successfully used on
numerous similar engagements by our proposed project team, The work plan has
been proven to obtain the desired results.
As mentioned previously, KPMG will be using ABC methodology to quantify the
actual cost of the respective programs. KPMG has developed a methodology to
implement ABC within various government organizations and departments, As
government/public sector institutions needs are different than private sector
needs. our methodology was developed while working with various governments
across the coumry in order to ensure government needs were met.
Below is an overview of KPMG's approach to activity based costing
engagements performed for our governmental clients, This flexible approach
allows us to modify or add tasks, as appropriate. as well address specific needs
during the planning phase.
Denne objectives and establish services/activities and outputs
:'~ - ;..;:....~.; ;"t.~~}-v~~-.:.,
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· How to go about selecting an activity/service to cost;
· What is the next step once an activity/service cost has been identified; and
. Should an activity/service be privatized.
20
In addition to the kickoff meeting, we will conduct a meeting with the Social
Services Transportation Program employees to explain our ABC process. We
will investigate and determine the most effective means of identifying the
"activities" - the products/services provided by the Social Services Transportation
Program - and outputs. We will work closely with County personnel. and
together we will finalize the list of activities that will serve as the foundation for
the ABC model developed in the subsequent phases. The following specific tasks
will be performed in Phase I.
Define proiect obiectives. We will hold and attend meetings with County
personnel to more clearly detine objectives. establish contacts and answer
employee questions.
Define activities and outputs. We will meet with Social Services Transportation
Program personnel to finalize activities and outputs which will be utilized in the
ABC model.
Assess available resources. After we have defined the activities and outputs. we
will assess the availability of source documents and determine the most effective
means of accumulating and utilizing existing data maintained within the Program.
Phase 2
Determine methods of collection for current direct and indirect costs and
consumption information
In order to more accurately capture cost pool information, we will work with the
County to identify the most effective methods for cost data collection and
allocation.
)
Collect cost data. Based on discussions with personnel and reports provided by
the Social Services Transportation Program. we will assist in the collection of
cost information. as defined in Phase I. resulting in a complete list of all activities
performed within the Program and their associated costs.
DetermiM cost allocation methods. After completion of the accumulation of cost
information, we will develop appropriate cost drivers for the activities defined in
~l~... Addiliaallly. we will ~--Ibe ID08t ~.~~.\>.';
meaMiDa"'~ou"",,, defiaed in PbaIe 1. . .' ."c..... ,'~~ .
'", . ~.' 1!$7;':... '. ,*:....,,/... . .~ .~ l~~'i,
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Phase 3
Determine the aUocadon method of costs within the model
After services/activities bave been identified. and data on costs and COlt driven
have been accumulated, KPMG will work with the County in determining how
the distribution of costs are best performed to result in the most accurate
representation of costs. This phase is the key phase in bringing together the work
performed in the previous phases and results in the "map" used in Pbaae 4 to
actually execute the model.
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21
Our methodology utilizes a two-tier approach for allocating costs to the activities.
The tirst tier concentrates on a review of all costs applicable to the activities. The
second tier allocation drives the costs of the indirect costs to individual activities
in the model.
Activity cost pools will be balanced to the general ledger to ensure that all cost
information will be captured. In cases where the records are not complete.
KPMG, with the assistance of the County personnel. will gather information from
various sources to construct the financial records. KPMG will meet with County
management to determine if such data is reasonable and agree on how to use the
information in the ABC model.
Develop and run ABC models
Using the information accumulated in the previous phases. KPMG will work with
the County in developing the ABC models. analyzing data. and running the
reports.
We will use KPMG's Governmental ABC System r\l to drive the activity cost
pools to each output. For each output, we anticipate the following detail cost data
will be tracked:
. Personnel costs
. Supply/material costs
. Overhead costs
. Equipment costs
. Facility costs
. Other costs
This ABC system was specifically designed to assist governmental entities in the
analysis of costs using the firm's ABC methodology. The System, which runs on
IBM compatible microcomputers. is proprietary to KPMG and available for client
use under a Standard Licensing Agreement. KPMG also provides technical
support services related to the System which is also available for client use under
an ABC Support Services Agreement.
ABC costing is facilitated in the ABC System through the identification of source
data from the entity's financial systems and various manual records. Standard
reportS generated by the ABC System include:
. Cost PoolIDriver Report
· General Ledger Cost Report
· Reconciliation of GIL to Costs
. Total Cost Allocation Report
· Consumption Table
· Cost Adjustment Report
· Allocation Detail Report
· Unit Cost Allocation Report
-
Analyze results and summarize cost information in a report
After the models are run, we will assist the County in analyzing the results of the
ABC costing. We will work with Social Services Transportation personnel to
develop and perform comparisons of the results between communities to
highlight those areas which can be targeted for efficiency improvements,
streamlining or identification of best practices to migrate to other sites. We will
look at the mix and number of personnel at each location and determine the
"
impact on the per unit activity costs, The ABC results are based on assumptions.
allocations and information furnished by County personnel. We will rely solely
on the assumptions. allocations and information provided to us and will not make
any independent study or evaluation of them, We will not issue an auditors'
report in accordance with AICPA standards. or express an accountants "opinion"
on the data used or the reasonableness of the assumptions or allocations but will
issue a letter discussing our observations.
Phase 6
Utilizing report to evaluate possible cost savings
Upon completion of the cost summary report described above. we will then
discuss with County management the projected cost savings that would exist if
the County either ceases to operate the Special Services Transportation program
and/or contracts these services or some portion t'1ereof to a third party contractor.
Phase 7 Development of performance measures
In conjunction with the Activity Based Costing efforts discussed above, a list of
services provided by the Social Services Transportation progam will be
identified. including any mandates that require the service (optional). In the
absence of a specitic mandate. the purpose and historical requirement for the
program may be identified. The goals and objectives for the program will be .
identified. and workload quantities will be developed, These workload quantities
may either be in the form of inputs or outputs. Where appropriate and available.
these service levels will be compared to other agencies,
Phase 8 Analysis of billing and dispatch systems
As part of our review of the activities performed by the Social Services
Transportation program, an analysis of the program's current billing and dispatch
systems will be performed to determine whether improved efficieDciea may be
incorporated by the County to improve service delivery.
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