Item C05BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date.- FebrqM.. 15.., 2012
Bulk Item-. Yes X No
Division-. Bud et &..Finance
Department-, OMB
Staff Contact Person/Phone #--, Penn _.&i.pp X4470
.....................
...........
...........
AGENDA ITEM WORDING: Approval of a Task Authorization with KPMG to update the Fiscal
Year 2011 Full Cost Allocation Plan and the 2 CFR Part 225 (formerly OMB Circular A-87) Cost
Allocation Plan.
. . . . . ................
ITEM. BACKGROUND: Full Cost Allocation reduces ad valorem taxes by recovering indirect costs
from non -ad valorem revenue funds and corrects for indirect cost subsidy to special taxing districts.
This cost allocation plan will be based on expenditures incurred for the fiscal year ended September 30,
2011. KPMG is currently contracted with the State of Florida Department of Management Services
(Consulting Services for Management Skills, Contract number 973-001-06-1) so that Monroe County
may use in lieu of a formal request for proposal.
.............
PREVIOUS RELEVANT BOCC ACTION: On November 18, 2009, the BOCC approved the
execution of a Letter of Engagement to update the Fiscal Year 2009 Full Cost Allocation Plan. and the
OMB A-87 Cost Allocation Plan. On June 20, 2007, the BOCC approved the execution of a Letter of
Engagement to update the Fiscal Year 2005 and 2006 Cost Allocation Plans. The BOCC approved
implementation of a full cost allocation plan to be completed by KPMG beginning with Fiscal Year
1998.
..........
CONTRACT/AGREEMENT CHANGES: N/A
STAFF RECOMMENDATIONS: With the complexity in the plan preparation and with familiarity
of previous Monroe County's Cost Allocation Plan's (1998-2009) by this accounting firm, staff
recommends approval of this item, as it is in the best interest of the County.
TOTAL COST: $29,500.00 INDIRECT COST: BUDGETED.* Yes X No
0
COST TO COUNTY. $29 500.0o SOURCE OF FUNDS: General Funds
REVENUE PRODUCING: Yes No X AMOUNT PER MONTH Year
APPROVED BY.- County Att OMB/Purchasing Risk Management
DOCUMENTATION: Included — X Not Required
DISPOSITION.
AGENDA ITEM
MONROE COUNTY BOARD OF COUNTY COMMISSIONERS
CONTRACT SUMMARY . . ................... -
Contract #
Contract with: KPMG-, LLC Effective Date-,
Expiration Date-, 120 dUs from date of
commencement
Contract Purpose/Description: Approval of a Task Authorization with KPMG to update the
Fiscal Year 2011 Full Cost Allocation Plan and the 2 CPR Part 225 (formerly OMB Circular A-
8.7) Cost Allocation Plan.
Contract Manager: Penny KiviD X4470 OMB #1
(Name) (Ext.) (Department/Stop #)
for BOCC meeting on 2/15/2012 Agenda Deadline: 1/31/2012
CONTRACT COSTS
Total Dollar Value of Contract: $ ' 29,500 Current Year Portion-. $29 500
Budgeted`? Yes X No Account Codes- 001-00101-530340-
Grant
County Match:
ADDITIONAL COSTS
Estimated Ongoing Costs: $ /vr For:
(Not included in dollar value above) (eg. maintenance, utilities, janitorial., salaries etc.)
. . . ........... N10110 �r
CONTRACT REVIEW
Changes Date Out
D ten Neededevie�vr
'e p
E(o-
D*vis*on Director YesE:1 No
Risk ManageTent YesE] No
.............
...........
N -
O.M.B./Pusing
Yes[] No Ll
County Attorney //3,
Yes[:] NoLl""
"
�""' . . . . .................. ............ ...... . .. .
Comments-,
MAD 17ner, D,,.,,'n�A "'I 111�7 /A I x Af",qrs lie-%
. �. & � It w t ..AA V A.a%" %a w , 1.1::o I 1 V 1 1'V-L%_r- ttl—
Task A uthofization
January
xx,
2012
. ..................................................................................................................................................................................................
.................................................................... ..... ............................... .
..................
................................ .
.................................. .
...................................
Engagement ObJecflve 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 80, 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 80, 2011. KP 1iIG will assist the County with the following:
0je „% Ft. `, st Flee
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.
bie ive #fax OMB Crrct,da .. A- 7 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
I PMG is proposing to assist the County using the State of Florida Management Consulting Services
Contract # 973-001-00-1. 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
l' PMG 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.
PMG"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
Rorida Departaent or Management Services, Consulting Services Cor7tract# 973-001 µ06-1
Jar?[nary xx, 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.
0. 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 '. _ Ar r-1 Mav-1 Jun-1
1, Prr)iect Kick Off
. 1ssue Siatus Reports —
Gather and Assess Data
4 - Analyze ato
ubmin, Craft Pert
*As part of Task 1, KPMG will work with the County's staff to finalize the timeline.
Page 2
Task Authorization
............................................................................................................................................. January �� , 2n �liiiV
. . .... . ..
Other Considerations
In rendering the regulatory -related services described in this task authorization, we will consider the
applicable technical literature, laves, 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 i department i 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. KPIVIG 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 Depadment of Managemer7t Services, Consrrttrr g Services Cootraet# 973-001-06-1
Jaorrary xx, 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 Tear
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 µ06-1.
KPMG's hourly rates per these agreements are as follows:
Se��ior Cons-J t nt
Consui t.a rit s
David L. Dennis $275
David G. Jahosky
Chris Krepcho
Kristen Kearney $1 75
Sara Kaiser
Thomas Eaton
Megan Taylor $1 25
Hastinq Westohal
Page 4
Task Authofization
Flc,�richci Depalftnent of Marlagernent Senlices'. Cor�sufting Services Cor7trz.,icH+!- 973-001-06-'1
............................. .. . . ..... ....................................... . .. ... .......................................... ... . .... Jar�uary xx-, 2012
....................................................................... . ....................... . ... . . . .. . . . .... ........ I ............................... ... . . . .. ................................ ..... ...............................
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 KPMG LLP
By:
Signature:
Dated:
By: David L. Dennis, Partner
Signature:
Dated: Januaa xx, 2012
Page 5