Real County RFP
You are a relatively new CPA in the second year after starting your own CPA firm (“hanging out
your shingle”) as a sole-practitioner.
In previous years, while working for a local Houston CPA firm for seven years, you worked on
business and individual tax returns during the tax season, and during the Summer and Fall months
you worked on each of the local government audits for the audits of the City of Pearland, League
City, the City of Angleton, the City of Friendswood, the City of Sealy, City of Victoria, Brazoria
County, and Montgomery County.
You left the firm on such good terms with the firm’s partners and each of your fellow employees,
they gave you a modest party as a send-off. Furthermore, your terms were so good that most of the
firm members came to your office’s grand opening and gave you an “office warming” gift.
One evening before going home, in your internet search for government auditing work, you learned
about the request for proposal (RFP) solicited by Real County, Texas. Up to this point, you have not
established any political ties through your community engagement, volunteer and networking efforts.
You check the map and find that Real County is quite a distance (more than 100 miles) from the
Houston metropolitan area. Since you had a 3-year limited-term non-compete agreement with you
previous firm, all of your governmental and non-profit audit work must be sought from local
governmental bodies at least 100 miles outside the Houston metropolitan area. Any of your audit
work for corporations however, is only limited by your inability to solicit work directly from the
previous employer firm’s clients for three years after leaving the firm. Otherwise, you are free to
generally market to all businesses and individuals.
Requirement:
1. Before preparing and submitting your bid, familiarize yourself with the following terms:
a. Texas Commissioners’ Court,
b. County Judge,
c. Power of the Purse, and
d. Audit Independence.
2. Review the Irving Texas example, especially the Sample Contract included in our Course
(MBA6316) Blackboard Content section.
3. Prepare your bid with all necessary disclosures.
4. Only one concern is that shortly after preparing your bid for submitting it to Real County,
you learned that, coincidentally, the County Judge for that county is the cousin of one of the
partners from your previous firm.
a. If necessary, decide if and how you should address this issue.
b. Decide if any modifications to your bid will be necessary under the circumstances.
5. Submit your bid with all necessary disclosures.
Edited and Adapted for Educational Purposes CB Lloyd May 2016, 2017, 2018, 2019 Group Project MBA6316
REAL COUNTY, TEXAS
REQUEST FOR PROPOSALS FOR
INDEPENDENT PROFESSIONAL AUDIT SERVICES
FISCAL YEAR ENDING SEPTEMBER 30, 2019
146 South U.S. Hwy 83
Leakey, TX 78873
(830) 232-5304
Edited and Adapted for Educational Purposes CB Lloyd May 2016, 2017, 2018, 2019 Group Project MBA6316
REAL COUNTY
REQUEST FOR PROPOSAL
COVER SHEET
INDEPENDENT PROFESSIONAL AUDIT SERVICES
BIDDERS NOTE:
1. Carefully read all instructions, requirements andspecifications
2. Submit bid with all appropriate supplements and/orsamples.
3. All prices must be typewritten or written ink.
Ensure that the return envelope is securely sealed and labeled “PROPOSAL FOR AUDIT SERVICES. Bids
that are not properly sealed and marked will NOT be considered.
RETURN BID TO:
Real County Judge PO Box
446
Leakey, TX 78873
FOR ALL QUESTIONS PERTAINING TO THE PROPOSAL/BID CONTACT REAL COUNTY TREASURER (830)
232-6627.
Vendor must sign below in INK; failure to sign will DISQUALIFY the offer.
Company Name:
Company Address:
City, State, Zip:
Taxpayer Identification Number(T.I.N.):
Telephone: Fax:
Print Name:
Signature:
(Vendor’s signature attests to the vendor’s offer to provide the goods and/or services in this bid according to the
published provisions of the job. When an award letter is issued, it will become part of the contract.)
APPROVED
REJECTED
Commissioners Court Date
County Judge
DUE DATE: June 25, 2019 NO LATER THAN 3:00 PM. BIDS RECEIVED AFTER THE DATE AND TIME
SPECIFIED WILL NOT BE CONSIDERED.
Edited and Adapted for Educational Purposes CB Lloyd May 2016, 2017, 2018, 2019 Group Project MBA6316
REQUEST FOR PROPOSAL FOR
INDEPENDENT PROFESSIONAL AUDIT SERVICES
I. INTRODUCTION:
A. GENERAL INFORMATION
The County of Real (the “County”) is requesting proposals from qualified firms of certified public
accountantsto audit financialstatementsforthe fiscal year ending September 30, 2019 with the option
of auditing its financial statements for each of the two subsequent fiscal years ending September 30,
2018 and September 30, 2019.
There is no expressed or implied obligation for the County to reimburse responding firms for any
expenses incurred in preparing proposals in response to this request.
Proposal forms may be obtained from the Real County Treasurer located at 193 S. US Hwy 83, Leakey,
TX 78873, during the hours of 8:00 a.m. to 12:00 p.m. and 1:00 p.m. to 5:00 p.m. Monday through
Friday. The forms may also be accessed on the County’s website at www.co.real.tx.us or by calling the
County Treasurer at 830-232-6627.
Proposals must be submitted in a sealed envelope with the outside clearly labeled “PROPOSAL FOR
AUDIT SERVICES”, in the office of the County Judge no later than 3:00 p.m., Friday, June 21, 2019.
Proposals will be publicly opened during the regular session of Commissioners Court at 9:00 a.m.,
Monday, June 24, 2019, in the Courtroom located in the Real County Courthouse, 146 S. US Hwy 83,
Leakey, TX 78873.
The bid may be awarded during the regularsession of Commissioners Court at 9:00 a.m., Tuesday, June
25, 2019. Bidders are welcome to attend.
The County reserves the right to request additional information or clarifications from bidders, or to
allow corrections of errors or omissions.
The County reserves the right to retain all proposals submitted and to use any ideas in a proposal
regardless of whether that proposal is selected. Submission of a proposal indicates acceptance by the
firm of the conditions contained in the request for proposal, unless clearly and specifically noted in the
proposal submitted and confirmed in the contract between the County and the firm selected.
B. TERM OF ENGAGEMENT
A one-year contract is contemplated with the option of two extensions of one year each, subject to
satisfactory performance, the satisfactory negotiation of terms (including price acceptable to both the
County and the selected firm), and the concurrence of the Commissioners Court of Real County. The
initial term of the contract shall be for the period beginning July 1, 2019 and ending August 31, 2020.
Edited and Adapted for Educational Purposes CB Lloyd May 2016, 2017, 2018, 2019 Group Project MBA6316
II NATURE OF SERVICESREQUIRED
A. SCOPE OF WORK TO BE PERFORMED
The County desires the auditor to express an opinion on the fair presentation of its basic financial
statements in conformity with generally accepted accounting principles in the United States of
America.
The County also desires the auditor to provide an “in-relation-to” opinion on the supplementary
information based on the auditing procedures applied during the audit of the basic financial
statements.
The auditor shall also be responsible for performing certain limited procedures involving required
supplementary information required by the Governmental Accounting Standards Board as mandated
by generally accepted auditing standards.
A single audit of grants must be performed in conjunction with the financial audit if grant assistance
exceeds the threshold.
B. REPORTS TO BE ISSUED
Following the completion of the audit of the fiscal year’s financial statements the auditor shall issue:
1. Annual Financial Report: The selected firm shall prepare the annual financial statement for
the audited fiscal year.
2. Internal Controls Letter: The auditor shall communicate any material weaknesses in the
County’s internal controls.
3. Management Comments Letter: If applicable, the auditor shall prepare a letter to the County
of recommendations for consideration concerning the accounting and financial records of the
County as observed during the audit.
C. WORKING PAPER RETENTION AND ACCESS TO WORKINGPAPERS
All working papers and reports must be retained, at the auditor’s expense, for a minimum of five (5)
years, unless the firm is notified in writing by the County of the need to extend the retention period.
The auditor will be required to make working papers available upon request to the County.
In addition, the firm shall respond to the reasonable inquiries ofsuccessor auditors and allow successor
auditors to review working papers relating to matters of continuing accounting significance.
II. DESCRIPTION OF THEGOVERNMENT
A. NAME AND TELEPHONE NUMBER OF CONTACTPERSON
The audit firm’s principal contact with the County will be Mairi Gray, County Treasurer, 830-232-6627,
who will coordinate the assistance to be provided by the County to theauditor.
B. BACKGROUNDINFORMATION
The Texas State Legislature created Real County in June 1913. The County serves an area approximately
699.2 square miles located in the Hill Country of South Central Texas with an estimated population of
Edited and Adapted for Educational Purposes CB Lloyd May 2016, 2017, 2018, 2019 Group Project MBA6316
3,350. Real County is empowered to levy a property tax on both real and personal properties located
within its boundaries.
The County is governed by a five-member Commissioners Court, consisting of four County
Commissioners and the County Judge presiding. All members of the Commissioners Court are elected
to four-year terms.
Real County provides a full range of services, including District, County and Justice of the Peace courts,
law enforcement, county road construction and maintenance, and general administration. The County
administers various licensing and permits forvehicles.
The annual budget serves as the foundation for Real County’s financial planning and control.
Beginning in July, departments present their budget requests to the County Judges who uses the
requests as a basisfor developing a proposed budget. The Commissioners Court holds a public hearing
on the proposed budget, then adopts the property tax rate and the budget in September for the
beginning of the new fiscal year on October 1.
The appropriated budget is prepared by fund, department and line item. The Commissioners Court
approves all line item, department and fund transfers. During the course of the year, the
Commissioners Court may, in response to an emergency, increase the overall Count budget as long as
funds are available to satisfy the expenditures. The County also maintains an encumbrance accounting
system as a technique of accomplishing budgetary controls. Encumbered amounts lapse at each fiscal
year.
C. FUND STRUCTURE
The County maintains the following individual governmental funds:
1. General Fund
2. Sheriff Forfeiture
3. Records Archive
4. Records Management and Preservation
5. Road and Bridge
6. Lateral Roads
7. Flood Plain Coordinator
8. Grants
9. Pre-Trial Diversion
10. Technology Fund
D. FEDERAL AND STATE FINANCIALASSISTANCE
During the year to be audited, the County may or may not have received financial assistance from
federal and/or state agencies.
E. PENSION PLANS
Benefits for the County’s eligible full-time and part-time employees are provided through the Texas
County and District Retirement System.
F. FINANCE OPERATIONS
The County Treasurer provides the accounting, purchasing, payroll, accounts receivable and accounts
payable functions. The department consists of the Treasurer and one (1) full-time Deputy Treasurer.
Edited and Adapted for Educational Purposes CB Lloyd May 2016, 2017, 2018, 2019 Group Project MBA6316
G. COMPUTER SYSTEMS
The County’s financial and accounting records are maintained on Hill Country Software and Support
IADT version software. Personal computers are used and networked to each other.
H. PRIOR AUDIT REPORTS AND WORKING PAPERSAVAILABILITY
Interested firms wishing to review prior year annual financial reports and management letters should
contact Mairi Gray, Real County Treasurer at (830) 232-6627. Annual financial reports may also be
found on the Real County website at www.co.real.tx.us. The County will use its best efforts to make
prior audit reports and supporting working papers available to aid in any interested firm’s response to
this request for proposals.
I. ADDITIONAL INFORMATION
1. The majority of the field work for the County’s independent audit will be conducted in the Real
County Courthouse. The County Treasurer will coordinate the audit for the County. Workspace for
audit staff will be provided as instructed by the Real CountyTreasurer.
2. It has been the practice of the County Treasurer’s office to assist the independent auditors by
preparing audit schedules and work papers. The auditor will provide a list of required schedules
and work papers with adequate explanatory detail as to the purpose of the work papers as well as
method of preparation. Most work papers and schedules are prepared using MicrosoftExcel.
3. The County’s FY2019 budget is $3,001,377.07. The County’s budget, prior year financial statements
and other financial data are posted on the County’s website atwww.co.real.tx.us.
III. PROPOSAL REQUIREMENTS
A. GENERAL REQUIREMENTS
1. INQUIRIES
Inquiries concerning the request for proposals and the subject of the request for proposals must
be made to Real County Treasurer, Mairi Gray, (830) 232-6627, mairi.gray@co.real.tx.us.
2. SUBMISSION OF PROPOSALS
The deadline for proposals to be submitted is June 21, 2019 at 3:00 p.m. Proposals should be
submitted in a sealed envelope with the outside clearly labeled as “PROPOSAL FOR INDEPENDENT
AUDIT SERVICES”. The County reserves the right to reject any and all proposals, and to award the
contract in the best interest of the County.
3. Completed proposals should be sent to the followingaddress:
Real County Judge
PO Box 446
Leakey, TX 78873-0446
B. AUDIT PROPOSAL
1. GENERAL REQUIREMENTS
The purpose of the proposal is to demonstrate the qualifications, competence and capacity of the
firms seeking to undertake an independent audit of the county in conformity with the
requirements of this request for proposals. As such, the substance of proposals will carry more
weight than their form or manner of presentation. The proposal should demonstrate the
qualifications of the firm and of the particular staff to be assigned to this engagement. It should
also specify an audit approach that will meet the request for proposalsrequirements.
Edited and Adapted for Educational Purposes CB Lloyd May 2016, 2017, 2018, 2019 Group Project MBA6316
2. INDEPENDENCE
The firm should provide an affirmative statement that it is independent of the County as defined
by the generally accepted auditing standards and the U.S. General Accounting Office’s Government
Auditing Standards.
3. LICENSE TO PRACTICE INTEXAS
An affirmative statement should be included indicating that the firm and all assigned key
professional staff are properly licensed to practice in Texas.
4. FIRM QUALIFICATIONS ANDEXPERIENCE
The proposal should state the size of the firm, the size of the firm’s governmental audit staff, the
location of the office from which the work on this engagement is to be performed and the number
and nature of the professional staff to be employed in this engagement on a full-time basis and on
a part-time basis.
5. PARTNER, SUPERVISORY AND STAFF QUALIFICATIONS ANDEXPERIENCE
The firm should identify the principal supervisory and management staff, including engagement
partners, managers, other supervisors and specialists, who would be assigned to the engagement.
Indicate whether each such person islicensed to practice as a certified public accountant in Texas.
Audit personnel may be changed at the discretion of the firm provided that replacements have
substantially the same or better qualifications or experience.
6. SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENTENTITIES
The firm shall provide a list of the most significant engagements performed in the last three (3)
years that are similar to the engagement, in particular counties, described in this request for
proposal.
7. IDENTIFICATION OF ANTICIPATED POTENTIAL AUDITPROBLEMS
The proposal should identify and describe any anticipated potential audit problems, the firm’s
approach to resolving these problems and any special assistance that will be requested from the
County.
C. SEALED DOLLAR COST BID
1. TOTAL ALL-INCLUSIVE MAXIMUM PRICE
The cost bid, Attachment A, should contain all pricing information relative to performing the audit
engagement as described in this request for proposals. The total all-inclusive maximum price is to
include all direct and indirect costs including all out-of-pocketexpenses.
The County will not be responsible for expensesincurred in preparing and submitting the proposal.
Such costs should not be included in the proposal.
2. MANNER OF PAYMENT
The firm’s invoice for the completed audit should be mailed to:
Real County Treasurer
PO Box 69
Leakey, TX 78873
Edited and Adapted for Educational Purposes CB Lloyd May 2016, 2017, 2018, 2019 Group Project MBA6316
Payment will be processed upon approval of the invoice during the next regularly scheduled
meeting of Commissioners Court after receipt of the invoice.
IV. EVALUATIONPROCEDURES
A. EVALUATIONCRITERIA
Proposals will be evaluated based on three sets of criteria. Firms meeting the mandatory criteria will
have their proposals evaluated and scored for both technical qualifications and price. The following
represent the principal selection criteria, which will be considered during the evaluation process.
1. MANDATORY ELEMENTS
a. The audit firm is independent and licensed to practice inTexas.
b. The audit firm’s professional personnel have received adequate continuing professional
education within the preceding two (2) years.
c. The firm has no conflict of interest with regard to any other work performed by the firm for
the County.
d. The firm submits a copy of its most recent external quality control review report, including
any letter of comments, and the firm has a record of quality auditwork.
e. The firm adheresto the instructions in thisrequest for proposals on preparing and submitting
the proposal.
2. TECHNICALQUALIFICATIONS
a. The firm exhibits expertise based on past experience and performance on comparable
government engagements.
b. The quality of the firm’s professional personnel to be assigned to the engagement and the
quality ofthe firm’s managementsupport perso