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Addendum #3 December 21, 2010Final RFP: Financial Audit Services Hillsborough County Aviation Authority HILLSBOROUGH COUNTY AVIATION AUTHORITY Addendum #3 Financial Audit Services Tampa International Airport Request for Proposals (RFP) #11-311-011 A copy of this signed Addendum #3 must be included with all submissions. Clarification Questions/Answers 1. QUESTION: On page 5 of the RFP it states as follows: The selected Firm will also be responsible for report preparation and the printing and binding of a minimum of 50 copies of the audited financial statements, as well as a complete electronic PDF version. Please clarify that the Airport will prepare the initial draft of the financial statements and footnotes and MDA and SEFA and that the firm is merely typing and reproducing and binding the financial statements. ANSWER: Yes, the Authority will prepare the initial draft of the financial statements including footnotes, MDA and SEFA. The firm adds its reports, reproduces and binds the financial statements 2. QUESTION: Does the Authority expect any major changes in the amount of Federal or State Financial Assistance in 2010/2011 or will the number of major programs change for the Federal/State Single Audit? ANSWER: No. There are no expected major changes. 3. QUESTION: Attachment 2-Agreement 8.1 and 8.2, can these provisions apply to both parties to the agreement? ANSWER: No. 4. QUESTION: Attachment 2-Agreement-Can a “Stop Work Provision” be included in this agreement so that if there is an amount in dispute and it is unpaid, can work be stopped on that portion of the disputed work until resolved? ANSWER: No. The Authority has not had any “stop work” conditions in the past nor has there been any amount in dispute under previous contracts. Also, the annual fees are fixed. This is trial version www.adultpdf.com Addendum #3 December 21, 2010Final RFP: Financial Audit Services Hillsborough County Aviation Authority 5. QUESTION: Attachment 2-Agreement Article 21-can the following be added to this article “provided, however, that (the firm) shall not be liable for any delays caused by the Authority or its personnel” ANSWER: No. This is standard language. 6. QUESTION: Attachment 2-Agreement-can a mediation provision be added to the agreement? ANSWER: Any Firm proposing dispute resolution procedures should include a copy of the procedures with its proposal. The Authority reserves the right to negotiate or reject terms of any proposed dispute resolution procedures. 7. QUESTION: Attachment 2-Agreement-with regard to the hold harmless and indemnification provisions: The AICPA advises that the indemnification of a client would impair the auditors independence under interpretation 101-1.A and interpretation 101-1.C. Therefore, only to the extent caused by the Firm’s gross negligence or intentional misconduct, would a firm be able to agree to indemnify and hold the Authority harmless for claims, actions, damages, and liabilities asserted by you or third parties against you and which result from the services performed by the firm pursuant to this engagement. Would this change to the proposed Agreement language present a problem to the Authority? ANSWER: The current contract contains the same Indemnification language as in Attachment 2, Agreement, to the RFP. The Authority does not intend to modify this language as requested above. 8. QUESTION: Attachment 2-Agreement-is the Authority willing to negotiate any other provisions of this agreement? ANSWER: It is the Authority’s intent to have the selected Company execute the Agreement without material modifications. 9. QUESTION: Would you consider the following changes to the “Financial Audit Services Agreement” which are highlighted in yellow: (QUESTION – Part 1) ARTICLE 6 - QUALITY ASSURANCE Company shall be solely responsible for the quality of all work performed by Company, its employees or its subcontractors under this Agreement. All services furnished by Company, its employees or its subcontractors shall be performed in accordance with the applicable professional standards, in a timely manner, and shall be fit and suitable for the purposes This is trial version www.adultpdf.com Addendum #3 December 21, 2010Final RFP: Financial Audit Services Hillsborough County Aviation Authority intended by Authority. Company's services and deliverables shall conform with all applicable federal and State laws, regulations and ordinances. (ANSWER – Part 1) Yes. (QUESTION – Part 2) 8.2 Authority’s Remedies In the event of any of the foregoing events of default enumerated in Section 8.1, Authority, may immediately terminate Company’s rights under Agreement and Company shall remain liable for all damages suffered by Authority. The exercise of this remedy does not preclude the exercise of any other remedies provided by law. Prior to such default determination, the Authority will provide reasonable written opportunity to cure any deficiency that forms the basis for such default termination. (ANSWER – Part 2) No, this is standard contract language. (QUESTION – Part 3) ARTICLE 9 - INDEMNIFICATION Company agrees to protect, defend, reimburse, indemnify and hold Authority, its agents, employees, and officers and each of them, free and harmless at all times from and against any and all claims, liability, expenses, losses, costs, fines and damages (including reasonable attorney fees) and causes of action of every kind and character (this is to the extent allowed by law except to the extent caused by Authority’s negligence) by reason of any claim for infringement of any patent, copyright, trademark, trade secret or other intellectual property rights, any damage to tangible property or the environment or bodily injury (including death) incurred or sustained by any party hereto, any agent or employee of any party hereto, or any other person whomsoever, or any governmental agency, arising out of or incident to or in connection with Company’s performance under this Agreement, Company’s use of the Airport, Company’s acts, omissions or operations hereunder or the performance, nonperformance or purported performance of Agreement or any breach of the terms of this Agreement. Company recognizes the broad nature of this indemnification and hold harmless clause, and voluntarily makes this covenant and expressly acknowledges the receipt of $10.00 and such other good and valuable consideration provided by Authority in support of this indemnification in accordance with laws of the State of Florida. This clause shall survive the termination of this Agreement. Compliance with the insurance requirements as attached hereto shall not relieve Company of its liability or obligation to indemnify Authority as set forth in this Article. The Company’s obligation to indemnify shall not extend or apply to any claim alleging that the Authority’s financial statements are inaccurate or incomplete or were not prepared in accordance with generally accepted accounting principles. The Company has no obligation to indemnify the This is trial version www.adultpdf.com Addendum #3 December 21, 2010Final RFP: Financial Audit Services Hillsborough County Aviation Authority Authority from any claims resulting from the acts or omissions of the Authority; and in no event would any indemnification provided under this section be effected by the Company if doing so would violate the AICPA or other independence obligations. (ANSWER – Part 3) No. The purpose of the engagement is for the Company to opine on the accuracy of the financial statements in accordance with generally accepted accounting principles. (QUESTION – Part 4) ARTICLE 10 - INSURANCE 10.1 Insurance Terms and Conditions The following minimum limits and coverages will be maintained by Company throughout the term of this Agreement. In the event of default on the following requirements, Authority reserves the right to take whatever actions deemed necessary to protect its interests. Liability and property policies, other than Workers’ Compensation/Employer’s Liability, Automobile and Professional Liability, will provide that Authority is an additional insured. 10.2 Required Coverage’s – Minimum Limits B. Business Automobile Liability The minimum limits of Business Auto Liability insurance (inclusive of any amounts provided by an umbrella or excess policy) covering all owned, hired and non-owned vehicles are: Each Occurrence – Bodily Injury and Property Damage Combined $1,000,000 (ANSWER – Part 4) No. This is standard contract language. 10. QUESTION: Would it be possible to obtain the “Operating Directive” which is being referred to in the following section of the agreement. 10.3 Conditions of Acceptance This Agreement incorporates by reference Authority’s Operating Directive concerning contractual insurance terms and conditions in effect as of the date of this Agreement as may be amended from time to time. ANSWER: Yes. The Insurance Operating Directive is attached to this addendum as Attachment 1. 11. QUESTION: When was the last time that the Law Enforcement or Canine grants were tested as a major federal program for Single Audit purposes? ANSWER: The Law Enforcement grant was last tested as a major federal program in FY 2008. The Canine grant has not been tested as a major federal program as the amounts received do not exceed the $300,000 threshold. This is trial version www.adultpdf.com Addendum #3 December 21, 2010Final RFP: Financial Audit Services Hillsborough County Aviation Authority 12. QUESTION: How many people and at what levels did the current auditor (including the MWBE, if applicable) use on your engagement? ANSWER: All levels and a MWBE were used on the engagement. It is difficult to quantify the number of people, as some were here for only certain portions of fieldwork. See Addendum #2, Question #3 for the number of hours to perform the audit. 13. QUESTION: We would like to request that the following be added to the end of the first sentence under “Indemnification” in the Financial Services Audit Agreement: “to the extent caused by the Company’s actions.” We make this request in order to avoid exposure to claims that our beyond the control, actions or responsibility of our firm in serving the Authority. ANSWER: No. The Indemnification language already includes “except to the extent caused by the Authority’s negligence”. 14. QUESTION: How long has the Authority been using the current audit firm (E&Y)? What, if anything, would you like to see done differently during the audit process? ANSWER: The Authority has been with the current firm for five years. Under Authority policy, a RFP must be issued after either three or five years, if the two one-year options to the agreement are exercised. The Authority expectations are for an on-going continuation of the performance of the audit in an efficient, timely manner. 15. QUESTION: What attribute does your organization consider to be most important when looking for a professional services provider, such as your audit firm? ANSWER: See evaluation criteria as listed in Section 3.0 of the RFP. 16. QUESTION: How many major programs or Type A programs does the Authority anticipate having for fiscal year 2011? How many major projects or Type A projects does the Authority anticipate for the State SingleAudit? Do you expect grant activity to be significantly different in fiscal years 2012 or 2013? ANSWER: The Authority does not anticipate any changes in major programs or Type A programs as it relates to the Single Audit. The Authority does not anticipate grant activity to be significantly different in the next few fiscal years. However, should new sources of funding becomes available, the Authority may apply for such funding. An example of this was the ARRA funding in FY2009, of which the Authority received $8,000,000. This is trial version www.adultpdf.com Addendum #3 December 21, 2010Final RFP: Financial Audit Services Hillsborough County Aviation Authority 17. QUESTION: Did the Authority obtain any significant new debt during fiscal year 2010 in addition to the $3.6M obtained through its commercial paper program? If so, please describe. ANSWER: No. 18. QUESTION: Did the Authority enter into any significant new lease contracts during fiscal year 2010? If so, please describe. ANSWER: No. The Authority has not entered into any significant new lease contracts during fiscal year 2010 that would impair its financial position. The Authority as a landlord does routinely enter into leasing agreements with tenants at the airport and on Authority property. 19. QUESTION: Does the Authority anticipate any significant new debt during fiscal year 2011? ANSWER: Landesbank Baden-Württemberg (LBBW), the holder of the Letter of Credit facility for the Authority’s commercial paper program, has verbally notified the Authority of their intention to exercise all of the early termination options under their public finance portfolio. Under the Authority’s reimbursement agreement with LBBW, the next available early termination date is July 12, 2011. During November 2010, the Authority, working with its Financial Advisor began the process of evaluating the most economic alternatives to our commercial paper program, with $85 million currently outstanding under the program. Management anticipates a smooth transition to a replacement facility or other form or short term debt. A conversion to long term fixed rate debt for a portion of the outstanding amount will also be evaluated. 20. QUESTION: The Scope of Services outlined in Section 5 of the RFP indicates the selected firm will be responsible for report preparation and printing & binding. To clarify, will the Authority prepare and provide the financial statements or do you wish for the audit firm to assist in this process? ANSWER: The Authority will prepare the initial draft of the financial statements including footnotes, MDA and SEFA. The firm adds its reports, reproduces and binds the financial statements 21. QUESTION: RFP Page 16, Item A.2, Information documenting that the Firm has four years of experience since October 1, 2005 performing financial statement audits of governmental entities in accordance with GAS, including experience under the Single Audit Act and Circular A-133 Requirements: HOW MANY CLIENTS WOULD YOU LIKE SO SEE INCLUDED? ANSWER: The minimums that were included in the RFP were established by the This is trial version www.adultpdf.com Addendum #3 December 21, 2010Final RFP: Financial Audit Services Hillsborough County Aviation Authority Audit Committee. The listing should be comprehensive enough to demonstrate that the Company has sufficient experience to qualify under the RFP. 22. QUESTION: RFP Page 16, Item B.3, Information documenting that the Principal Auditor has three years of experience since October1, 2005 as the Principal Auditor performing financial statement audits of governmental entities, in accordance with GAS including experience under the Single Audit Act and Circular A-133 Requirements: HOW MANY CLIENTS WOULD YOU LIKE TO SEE INCLUDED? ANSWER: The minimums that were included in the RFP were established by the Audit Committee. The listing should be comprehensive enough to demonstrate that the Company has sufficient experience to qualify under the RFP. 23. QUESTION: Please identify the primary applications that impact the financial statement reporting processes. Indicate if the application is licensed software or custom developed, and whether the applications is web-based or accessible via the Internet. A. General Ledger B. Accounts Payable C. Accounts Receivable D. Capital Assets E. Payroll F. Utility billing G. Other ANSWER: The Authority has the following primary applications that impact the financial statements:  Oracle eBusiness Suite v 11.5.10.2 for General Ledger, Payables, Projects, Purchasing, Inventory and Receivables. Oracle was implemented in 1999 and currently utilizes Oracle Enterprise Edition 11.2.0.1; Web-based application, but not internet facing  PropWorks v 5.3.1.0 is used for tenant billing and utilizes Oracle for database management; Web-based application, but not internet facing  Sage FAS Gov 500 Asset Accounting v 2010.1 is used for fixed assets and currently utilizes a SQL server for database management; Client install program  Paychex (Preview) v 7.3 is the third party payroll system; Client install program  Stromberg v 4.1.641 is the time management software; Web-based application, but not internet facing  ScanNet v 6.2.1 is the parking system (Federal APD); Client install program This is trial version www.adultpdf.com Addendum #3 December 21, 2010Final RFP: Financial Audit Services Hillsborough County Aviation Authority 24. QUESTION: Please indicate if significant changes to the above referenced software applications are currently contemplated. ANSWER: As noted in the answer to question #6 in Addendum #2, the Authority anticipates upgrading Oracle from its current version to R12 in either FY 2012 or FY 2013. There are no other significant changes anticipated by the Authority to current financial software applications. REMINDERS: The deadline for submissions for this RFP is Wednesday, January 19, 2011, no later than 2:00 p.m., EST. I _____________________________ acknowledge receipt of this Addendum #3. _________________________________ _______________________ Proposer's signature Date This is trial version www.adultpdf.com . December 21, 2010Final RFP: Financial Audit Services Hillsborough County Aviation Authority HILLSBOROUGH COUNTY AVIATION AUTHORITY Addendum #3 Financial Audit Services Tampa International. version www.adultpdf.com Addendum #3 December 21, 2010Final RFP: Financial Audit Services Hillsborough County Aviation Authority intended by Authority. Company's services and deliverables shall conform with. December 21, 2010Final RFP: Financial Audit Services Hillsborough County Aviation Authority 12. QUESTION: How many people and at what levels did the current auditor (including the MWBE,