Item Coversheet

Resolutions - C7  F




COMMISSION MEMORANDUM

TO:Honorable Mayor and Members of the City Commission 
FROM:Jimmy L. Morales, City Manager 
DATE:June  5, 2019
 



SUBJECT:

A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER, PURSUANT TO REQUEST FOR PROPOSALS (RFP) 2019-092-JC, FOR AUDITING SERVICES; AUTHORIZING THE ADMINISTRATION TO ENTER INTO NEGOTIATIONS WITH RSM US LLP, ONE OF TWO FIRMS TIED AS THE TOP-RANKED PROPOSER; FURTHER, IF THE ADMINISTRATION IS NOT SUCCESSFUL IN NEGOTIATING AN AGREEMENT WITH RSM US LLP, AUTHORIZING THE ADMINISTRATION TO NEGOTIATE AN AGREEMENT WITH CROWE LLP, THE NEXT TOP-RANKED PROPOSER; AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT UPON CONCLUSION OF SUCCESSFUL NEGOTIATIONS BY THE ADMINISTRATION.


RECOMMENDATION

Adopt the Resolution.

ANALYSIS

The City of Miami Beach (the City) is required to have an annual audit performed on the City’s Comprehensive Annual Financial Report (CAFR) in accordance with Florida Statutes 218.39. Other audits are required to be conducted in accordance with the U.S. Office of Management and Budget (OMB) Circulars, Bonded Debt Covenants, Performance Management and/or Grant Agreements. Each audit herein must be conducted by an independent audit firm.

In 2014, the City of Miami Beach entered into a professional services agreement with Crowe Horwath, LLP, for Auditing Services, pursuant to RFP 2014-276-LR, for three (3) years with two (2) optional one (1) year renewal periods, with costs ranging from $228,000 to $248,600 on a per year basis. In consideration of the approaching expiration of the current contract with Crowe Horwath, the Administration is requesting a replacement contract for the continuation of the annually required auditing services.

Pursuant to the above requirements, the City is required to procure auditing services to examine the City’s Basic Financial Statements included in the City’s Comprehensive Annual Financial Report (CAFR), Federal grant programs and State projects (OMB A-133 Single Audit) and the financial statements of the Miami Beach Redevelopment Agency’s (RDA) , the Parking Systems Fund’s (PSF) , the Miami Beach Visitor and Convention Authority’s (VCA), the Miami Beach Convention Center (MBCC), as managed by Global Spectrum (GS), the Safe Neighborhood Parks and Bond Program (SNP), Children Trust (CT) and Building Better Communities (BBC). Therefore, by way of RFP 2019-092-JC, the City seeks to fulfill this statutory requirement.

The solicitation was reviewed and approved by the Audit Committee with the addition of a provision at least two senior auditors for the duration of the engagement. Auditing services shall provide the City with an annual audit on the City’s Comprehensive Annual Financial Report (CAFR), in accordance with Florida Statutes 218.39. Additionally, it is important to note that, pursuant to Section 218.39, Florida Statutes, the evaluation committee for this project shall be the City's Audit Committee.

On February 13, 2019, the City Commission approved the issuance of the RFP No. 2019-092-JC, Auditing Services, which was issued on February 14, 2019. The Procurement Department issued solicitation notices to 513 firms utilizing www.publicpurchase.com.  60 prospective proposers accessed the advertised solicitation. A voluntary pre-proposal conference to provide information to the proposers submitting a response was held on February 25, 2019. RFP responses were due and received on April 8, 2019. The City received a total of nine (9) proposals from the following firms:

·       Carr, Riggs & Ingram, CPAs & Advisors

·       Cherry Bekaert LLP

·       Clifton Larson Allen LLP

·       Crowe LLP

·       Keefe McCullough

·       Marcum LLP

·       Mauldin & Jenkins, LLC

·       Moore Stephens Lovelace, P.A.

·       RSM US LLP

 

The Evaluation Committee was approved via Commission Memorandum on February 13, 2019. The Evaluation Committee, comprised of Audit Committee members as required by Florida Statutes, convened on May 1, 2019, to consider proposals received. The Committee was comprised of the following: Bryan Rosenfeld, Audit Committee Member, City of Miami Beach; Ronald Starkman, Audit Committee Member, City of Miami Beach; Patricia Valderrama, Audit Committee Member, City of Miami Beach; and, Deede Weithorn, Audit Committee Member, City of Miami Beach.

 

The Committee was provided an overview of the project, information relative to the City’s Cone of Silence Ordinance and the Government Sunshine Law. The Committee was also provided with general information on the scope of services and a copy of each proposal.  The Committee was instructed to score each proposal pursuant to the qualitative evaluation criteria established in the RFP. The RFP stipulated that points for cost would be added to the qualitative scores established by the Evaluation Committee to determine an overall ranking for all proposals evaluated. The evaluation process (qualitative and quantitative, as stipulated in the RFP) resulted in the ranking of proposers as indicated in Attachment A, in the following order:

 

1st  –  Crowe LLP (tied)

1st –  RSM US LLP (tied)

3rd –  Marcum LLP

4th –  Carr, Riggs & Ingram, CPAs & Advisors

5th –  Keefe McCullough

6th –  Moore Stephens Lovelace, P.A.

7th –  Clifton Larson Allen LLP

8th –  Mauldin & Jenkins, LLC

9th –  Cherry Bekaert LLP

 

CONCLUSION

In reviewing the proposals received, I find that the City is fortunate to have received nine (9) responses to the RFP from well qualified firms. In reviewing the results of the Evaluation Committee process, I note that the process resulted in a tie for top ranking between Crowe LLP (“Crowe”) and RSM US LLP (“RSM”). Both firms appear to be very well qualified; and, in fact, Crowe is the City's current audit firm, since being awarded in October 2014, and RSM has served as the audit firm prior to Crowe. Either firm can perform the required services without any concerns.

 

However, I find the RSM proposal offers the City two primary benefits over the Crowe proposal. First, RSM provided a lower overall cost to the City for the required services which is $27,500 lower than Crowe’s proposal. Second, I believe it is good practice to rotate audit firms periodically to make sure the City’s audits are benefiting from a fresh perspective every couple of years. While there are differences of opinion regarding the issue of rotating auditors, the Government Finance Officers Association (GFOA), in its best practices for audit procurements, has opined that "governmental entities should undertake a full-scale competitive process for the selection of independent auditors at the end of the term of each audit contract." In cases where fully qualified firms are not available to compete for an agency's audit contracts, GFOA believes that contract rotations may be counterproductive. However, that is not the case here with two fully qualified firms available to serve the City.

 

Therefore, I recommend that the Mayor and City Commission authorize negotiations with RSM US LLP first. If the Administration is unable to successfully negotiate an agreement with RSM US LLP, I recommend negotiations with Crowe LLP. Finally, I recommend that the Mayor and City Clerk be authorized to execute the agreement with the selected firm.

KEY INTENDED OUTCOMES SUPPORTED
Strengthen Internal Controls To Achieve More Accountability

Legislative Tracking
Finance/Procurement

ATTACHMENTS:
Description
Resolution