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Item F25BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY Meeting Date: November 18, 2009 Division: County Administrator Bulk Item: Yes X No Department: OMB Dept. Contact: Tina Boan 4472 AGENDA ITEM WORDING: Approval of a contract with KPMG to update the Fiscal Year 2009 Full Cost Allocation Plan and the OMB 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, 2009. KPMG is currently contracted with the State of Florida Department of Management Services (Consulting Services for Management Skills, Contract Number 973-001-06-1) that Monroe County may use in lieu of a formal request for proposal. PREVIOUS REVELANT BOCC ACTION: On June 20, 2007 the BOCC approved approval for the execution of a Renewal Letter of Engagement to update the Fiscal Year 2005 and Fiscal Year 2006 Cost Allocation Plans. The BOCC approved implementation of full cost allocation preparation to be completed by KPMG beginning with Fiscal Year 1998. CONTRACT/AGREEMENT CHANGES: N/A STAFF RECOMMENDATIONS: With the complexity in the preparation of these plans and with familiarity of Monroe County's Cost Allocation previous fiscal year's (1998-2007) plans by this accounting firm, staff recommendation is for approval, as it is in the best interest of the County. TOTAL COST: $29,500 BUDGETED: Yes X No COST TO COUNTY: $29,500 SOURCE OF FUNDS: General Funds REVENUE PRODUCING: Yes No X AMOUNT PER MONTH Year APPROVED BY: County Atty _ /Purchasing Risk Management DOCUMENTATION: Included X To Follow Not Required DISPOSITION: AGENDA ITEM # F - 2 (.p Revised 2/27/01 '6 f MONROE COUNTY BOARD OF COUNTY COMMISSIONERS CONTRACT SUMMARY Contract with: KPMG LLP Contract # Effective Date: Expiration Date: Contract Purpose/Description: Approval to update the Fiscal Year 2009 Full Cost Allocation Plan and the OMB A-87 Cost Allocation Plan Contract Manager: Tina Boan X4472 OMB # 1 (Name) (Ext.) (Department/Stop #) for BOCC meeting on Il IRio Agenda Deadline: 3/m CONTRACT COSTS Total Dollar Value of Contract: $ 29,500 Current Year Portion: $ Budgeted? Yes® No ❑ Account Codes: 001-00101-530340- Grant: $ - - - County Match: $ - - - Estimated Ongoing Costs: $_ (Not included in dollar value above ADDITIONAL COSTS /yr For: utiliti 29,500 iitorial, salaries, etc. CONTRACT REVIEW Changes Date Out Division Director Date In %/�f1 �' Needed Revi wer Yes❑ No Risk Mana ement Yes❑ NoQ O.M.B./PurchSing 1�� Yes[] No[ v County Attorney�, �, � Yes[-] No Comments: OM13 Norm Revised 2/27/01 MCP #2 MAr,a?Tv1 KPMG LLP Suite 1600 111 North Orange Avenue PO Box 3031 Orlando, FL 32802 October 29, 2009 Ms. Tina Boan Monroe County Government Budget Director 1100 Simonton Street Suite 2-213 Key West, FL 33040 Dear Ms. Boan: Telephone 407 423 3426 Fax 407 648 8557 Internet www.us.kpmg.com OCT 3 0 2009 G : i KPMG LLP (KPMG) is pleased to submit this engagement letter to Monroe County, Florida (County) to provide professional advisory services. This letter confirms our understanding of the services desired by the County. KPMG is proposing to assist the County utilizing 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. The County is requesting assistance with the preparation of a Full Cost Allocation Plan and a 2 CFR Part 225 (formerly OMB Circular A-87) Plan based on actual expenditures for the fiscal year ended June 30, 2008. KPMG will assist the County with the following: • 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. 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 H, part 225) and may be used in allocating indirect costs to the County's federal grant programs. The County is responsible for submitting its cost allocation plan for negotiation and approval if requested by its federal cognizant agency. Please note, current OMB Circular A-87 regulations do not require the County to submit its cost allocation plan for negotiation and approval unless specifically requested by its federal cognizant agency. By accepting this engagement letter, County 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: KPMG LLP, a U.S limited habAtty partnership, is the U S. member firm of KPMG International, a Swiss cooperanve. 7 Letter to Monroe County, Florida October 29, 2009 Page 2 • 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. KPMG Project Team Mr. David 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. Ms. Heidi Powell, a senior associate with KPMG's Government practice, will serve as the lead staff and will supervise other project staff during the course of the engagement. Engagement Objectives The objective of this engagement is to assist the County in developing the indirect cost allocation plan (CAP). To meet this objective, KPMG proposes to assist the County with the preparation of the CAPs based on County -provided data. The plans will be prepared based on statistical data and expenditures incurred for the fiscal year ended September 30, 2009. Work Plan Approach KPMG is prepared to initiate the project within two weeks from the receipt of the signed engagement letter or executed contract. We estimate that an elapsed calendar time of 90 calendar days from the date of commencement would be required to assist you in the development of the final reports. This 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. Mn Letter to Monroe County, Florida October 29, 2009 Page 3 To achieve the objective outlined above, the project team will undertake a four -phased process as summarized in the table below. Phase Key Tasks Work Products 1. Project Initiation Meet with County personnel to confirm the project objectives and timeline. List of information needs Project Charter Communications Plan Develop a list of information needs. Conduct a kick-off meeting with all relevant stakeholders. Risk Register Develop an understanding of the County's current indirect cost recovery 2. Analysis of the County's strategy. Identify indirect cost centers and Current Indirect Cost Approach classify services performed. Interview County staff to understand the impact of the planned changes. Monthly Status Reports to the County Work with County to identify expenditures by cost pool and services 3. Data Collection and performed. Identify allowable and unallowable Analysis costs. Work with County staff to identify allocation bases that are representative of the costs being allocated. Where applicable, prepare adjustments to distribute direct and indirect costs. Full Cost Allocation Plan 4. Issue the County's Cost Issue the draft report to the County. Allocation Plans OMB Circular A-87 Cost After the County's review and written feedback on draft report, KPMG will Allocation Plan issue the final reports. Letter to Monroe County, Florida October 29, 2009 Page 4 KPMG has developed a project timeline that identifies our phased sequence of tasks that coincide with the County's time frame. The following chart depicts a view of project timing by phase. PROJECT TIMELINE BY PHASE Phase Dec-09 Jan-10 Feb-10 Mar-10 t Project Initiation' 2 Analysis of County's Current Indirect Cost Approach 3. Data Collection and Analysis P 4. Issue County's Cast Allocation Plans ; ; i e *As part of Phase I, KPMG will work with the County's staff to finalize the timeline. Project Budget Our fees for professional services include professional staffing, administrative support, report production, and travel costs. Total fees will not exceed $29,500. 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. 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 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. 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. KPMG requests that information provided by the County to be summarized and subtotaled by Department/Division (or equivalent) for the General Fund and by Fund for non General Fund activities. Information requested by KPMG should be provided in both electronic and hard copy formats. Letter to Monroe County, Florida October 29, 2009 Page 5 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. • KPMG will issue a draft report to the County by February 28, 2010. Should KPMG not receive the requested information from the County by February 15, 2010, we will issue the draft reports within 30 days of receipt of financial, statistical and allocation data. • The County is requested to review the draft reports and provide comments to KPMG within 30 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 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 will 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. ******************* Letter to Monroe County, Florida October 29, 2009 Page 6 We look forward to working with you and your staff in the performance of these services, and would be pleased to discuss this letter with you at any time. For your convenience in confirming these arrangements, we enclosed a copy of this letter. Please sign it and return it to me. Very truly yours, KPMG LLP David L. Dennis Partner State and Local Government Advisory Sector Leader R�Ivi3��:..%`� '.�i!i.rE I \� I`'ii i uiil�tEY ACCEPTED BY THE COUNTY:, Authorized Signature Title Date Amendments - Amendment 9 (2 June 2009) / Amendments / Management Consulting Ser... Page 1 of 6 Rate this Contract View Survey Results Amendment 9 (2 June 2009) June 2, 2009 MEMORANDUM NO.: (973-001-06-01) -9 TO: Department Addressed / User Agency FROM: Director, State Purchasing SUBJECT: Contract No. 973-001-06-01 Amendment 9 TITLE: Management Consulting Services The above mentioned Contract is renewed for three (3) years effective May 31, 2009 until May 31, 2012 with the following contractors: 21st Century Research & Evaluations, Inc. Accenture, LLP Achieveglobal ADG Business and Governmental Consultants (A) Advanced Systems Design, Inc. (ASD) Advent Group Inc. American Government Services Corporation Ariel Business Group, Inc. Avineon, Inc. BCP International, Ltd. Brandt Information Services, Inc. Brown and Caldwell Burger, Carroll, & Associates, Inc. CedarCrestone, Inc. CMA Enterprise Inc. Crawford Marketing & Consulting Inc dba CMC & Associates Communication Applications, Inc. Community Synergy Group, Inc. Community Trust Corporation Dauntless Consulting Group Deloitte Consulting Disasters, Strategies and Ideas Group, LLC Donald J. Craig, CPA http : //dms. my florida. comlbusine ss_operations/state—Purchasinglvendor_infonnationIstate... 10/26/2009 Amendments - Amendment 9 (2 June 2009) / Amendments / Management Consulting Ser... Page 2 of 6 DWB & Associates Dye Management Group, Inc. Electronic Training Solutions, Inc. Enterprise Technology Partners EMA, Inc. EquaTerra Public Sector LLC Evergreen Solutions, LLC EW Bryant Associates LLC(M) Faircloth Information Technology Systems, Inc. First Data Government Solutions, Inc. Fiscal Management Solutions, Inc. FL IT Centers of Excellence Focused Energy, LLC Foley & Lardner LLP Forefont Consulting LLC FOX Systems, Inc. General Physics Corporation Harvey, Covington & Thomas, LLC HDR Engineering, Inc Heron Bay Group, Inc. Hornby Zeller Associates IBM Corporation ICATT Consulting, Inc.(N) Identity Theft Solutions Corporation I. S. Consulting (B) Information Engineering Services, Inc. Information Systems of Florida, Inc. (I) Integrated Computer Solutions Jacobs Technology Inc James Moore & Co PI JRD & Associates Inc Justice Research Center, Inc KMR Consultants LLC ulting, Inc. KPMG LLP amp erbert Consultants, Inc. Law, Redd, Crona & Munroe, P.A.(A) Levings & Associates, Inc.(I) Lytmos Group, LLC Mary Key & Associates, Inc. (M) MAXIMUS, Inc. Mercer Health & Benefits, LLC MGT of America, Inc. (A) Milliman, Inc Moten Tate, Inc. http://dms.myflorida. comfbusiness_operations/state—Purchasinglvendor_informationIstate... 10/26/2009 Amendments - Amendment 9 (2 June 2009) / Amendments / Management Consulting Ser... Page 3 of 6 Northrop Grumman Information Technology, Inc Critical Incident Solutions, LLC dba OGARA Paul Consulting, Inc. PKV Management Consulting, Inc. (A) PMA Consultants, LLC Program Planning Professionals (Pcubed) Progressive Engineering & Construction, Inc. Public Consulting Group Inc Quality Management International Rothenbach Research and Consulting, LLC Science Applications International Corporation Sharpton, Brunson & Company, P.A(H) The IPL Group The Management Edge, Inc The North Highland Company (A) Thomas Howell Ferguson P.A. Village Architects Incorporated Any questions or problems in delivery or service that may arise regarding this contract should be directed to the Contract Administrator Holly Merrick at hollmerrick@dms.myflorida.com or PH 850-488-7804. Management Consulting Amendment9-06.04._09_doc (35.50 kB) 10/26/2009 Manaaement Consulting -Services • Price Sheets - Category 1 • Price Sheets-_ Category 2 • Price Sheets —Category 3 • Price Sheets - Category 4 & 5 • Price Sheets - Complete Pricing S readsheet • Contractors - 21st Century Research _& Evaluations, Inc • Contractors - Accenture LLP • Contractors_- Achieveglobal,_In_c._ • Contractors-- ADG Business And Governmental Consultants . Contractors - Advanced Systems Design,_ Inc. • Contractors - Advent Group_Inc • Contractors __American Government_ Services Corporation • Contractors - Arie(_Business Group, Inc. • Contractors - Avineon, Inc. • Contractors - BCP International Limited ___C_orp__ • Contractors - Brandt Information Services, Inc. . Contractors - Brown and Caldwell http://dms.myflorida.com/business_operations/state purchasing/vendor—information/state... 10/26/2009 Amendments - Amendment 9 (2 June 2009) / Amendments / Management Consulting Ser... Page 4 of 6 • Contractors - Burger, Carroll, &_Associates, Inc. • Contractors-CedarCrestone�_Inc. • Contractors - CMA Enterprise Inc._ • Contractors - CMC & Associates • Contractors - Communication Applications, Inc. • Contractors - Community Syne�Group, Inc • Contractors - Community -Trust Corporation_ • Contractors - Dauntless Consulting -Group • Contractors - Delo_itte Cons_ulti�LP • Contractors _Disasters, Strategies, and Ideas Group LLC • Contractors_ Donald James Cr a gCPA • Contractors - DWB & Associates • Contractors - Dye Management Group, Inc. • Contractors - Electronic Training Solutions, Inc. • Contractors - EMA, Inc. • Contractors -_Enterprise Technology Partners • Contractors - EWaTerra Public Sector LLC • Contractors _Ev_ergreen Solutions,-LLC • Contractors - EW Bryant Associates • Contractors - Faircloth Information Technology Systems, Inc. • Contractors - First Data Government Solutions Inc. (formerl�GovConnect)_ • Contractors - Fiscal Management Solutions, Inc. • Contractors - FL IT Centers of Excellence • Contractors - Focused Energy, LLC • Contractors - Foley& Lardner LLP • Contractors __Forefront, LLC • Contractors - FOX Systems Inc. • Contractors - General Physics Corporation • Contractors - Harvey, Covington & T_homas, LLC • Contractors - HDR Engineerinn ,, Inc • Contractors - Heron Bay Group, Inc. • Contractors - Hornbv Zeller Associates • Contractors - IBM Corporation • Contractors - ICATT Consulting, Inc • Contractors - Identi Theft Solutions Cor oration • Contractors - I S Co_nsultin B)- • Contractors - Information Engineeri_n_g_Services, Inc. • Contractors - Information Systems -Of Florida • Contractors - Integrated Solutions • Contractors - Jacobs Technology Inc • Contractors_ -James Moore & Co PI . Contractors - JRD & Associates Inc . Contractors - Justice _Research Center,___Inc . Contractors - KMR Consultants LLC • Contractors - KLCConsulting, Inc. http://dms.myflorida. com/business_operations/state_purchasing/vendor_ information/state... 10/26/2009 Amendments - Amendment 9 (2 June 2009) / Amendments / Management Consulting Ser... Page 5 of 6 • Contractors - KPMG LLP • Contractors - Lampl Herbert Consultants, Inc. • Contractors -_Laws Redd, Cro_n_a & Munroe Pa • Contractors -Levings & Associates�Inc. • Contractors - Lvtmos Groin LLC • ContractorsMary Key _&_Associates • Contractors__- Maximus Inc. • Contractors - Mercer Health &_ Benefits_, LLC (AA • Contractors - MGT of America Inc • Contractors - Milii_man_Inc • Contractors - Moten Tate, Inc. • Contractors - Northrop Grumman Information Technology, Inc • Contractors_- O'Gara Training & Services LLC • Contractors- Paul Consulting, Inc. • Contractors - PKV_Management Consulting, In(:;,__ A) • Contractors - PMA Consultant I -LC A • Contractors - Program Planning Professionals . Contractors - Progressive Engineering & Construction, Inc. • Contractors - Project Management Solutions, Inc • Contractors - Public Consu_Itin Grour) Inc • Contractors —Oualitv Management International • Contractors — Rothenbach Research and Consulting, LLC • Contractors — Science Applications International Corporation SAIC • Contractors - Sharpton, Brunson & Company, P.A. • Contractors - The IPL Groff • Contractors - The_Manapement Edae_, Inc • Contractors - The North _Highland Comma_ n_y__jnc. • Contractors - Thomas Howell Fer uson_P.A. • Contractors - Villa e Architects Incorporated • Amendments o Amendments - Amendment 9 (2 June 2009) o Amendments - Amendment 8 (30 January 2009j o Amendments - Amendment. 7. 02 December 081 o Amendments - Amendment 6 6 October_2008 o Amendments -_ Amendment 5 29 July 07J o Amendments - Am_endment_4.(29 August 06}. o Amendments - Amendment 3_(29 August 06) o Amen dments-_Amendment 1__(_15 June_06). o Amendments - Amendment 2_115 June__06� • Com_plete Contract - Microsoft Word • Complete Contract - PDF • MvFI_oridaMarketPlace__Users Return to State Contracts,_ Agreements and Price Lists http://dms.myflorida.comlbusiness_operations/state_purchasing/vendor informationIstate... 10/26/2009 Amendments - Amendment 9 (2 June 2009) / Amendments / Management Consulting Ser... Page 6 of 6 Terms and Conditions I Privacy Statement I Accessibility I Copyright ©2009 Department of Management Services - State of Florida http://dms.myflorida.comlbusiness operationslstate_purchasinglvendor_informationIstate... 10/26/2009 Kipp -Penny From: JahoskyJr., David G [djahoskyjr@kpmg.com] Sent: Tuesday, October 27, 2009 4:35 PM To: Kipp -Penny Subject: Cost Allocation Plan Penny, It was a pleasure speaking with you today. As we discussed, I will forward an engagement letter utilizing Florida State Term Contract 973-001-06 by the end of the week. I believe we can reduce some of the work effort compared to what we provided in the FY 2005/2006 cost allocation plans. For the FY 09 plan, I have estimated 188 hours compared to 230 hours for the FY 2006 plan, and reduced the project budget from $34,000 for FY 2006 to $29,500 for FY 2010. One item I forgot to ask. What is the requested start date and timeframe? Thank you for calling us and we look forward to working with you on this important project. Sincerely, Dave David )ahosky, Sr. Manager KPMG LLP 111 North Orange Ave Suite 1600 Orlando, FL 32801 407-563-3376 office 407-264-6190 fax djahoskyjr akpmg.com *********************************************************************** The information in this email is confidential and may be legally privileged. It is intended solely for the addressee. Access to this email by anyone else is unauthorized. If you are not the intended recipient, any disclosure, copying, distribution or any action taken or omitted to be taken in reliance on it, is prohibited and may be unlawful. When addressed to our clients any opinions or advice contained in this email are subject to the terms and conditions expressed in the governing KPMG client engagement letter. 1