FY2022-34 Auditing Services With Altman, Rogers And Co., For The Kodiak Island Borough And The Kodiak Island Borough School District For Fiscal Years 2022-2026AGREEMENT
FOR
AUDIT SERVICES FOR THE
KODIAK ISLAND BOROUGH
This Agreement made and entered into this 12th day of April, 2022, by and between the
Kodiak Island Borough, hereinafter "Borough", a general law municipality and a Borough of the
second class, whose address is: 710 Mill Bay Road Kodiak, Alaska 99615, and Altman, Rogers &
Co., whose address is 3000 C Street, N., Suite 201, Anchorage, AK, 99503 and licensed and
qualified to do business within the State of Alaska, hereinafter called "Contractor."
RECITALS
A. The Borough desires the performance, provision, and accomplishment of the work,
services and materials described and set forth in Part 1, Section 2.
B. Contractor represents that it is ready, able and qualified to perform, and will perform,
in all respects, all of the work, services, and materials, and to otherwise perform all
of the terms, covenants, conditions and provisions of the agreement in the manner,
at the times, and for the consideration hereafter provided.
Now, Therefore, for and in consideration of the terms, covenants, conditions, and provisions
contained herein, and/or attached and incorporated herein and made a part hereof, the parties
hereto agree as follows. This contract consists of:
A. Part I, consisting of eighteen (18) sections of General Provisions.
B. Part II, consisting of six (6) sections of Special Provisions.
PART
GENERAL PROVISIONS
Section 1: Agreement to Perform. The Borough hereby agrees to engage the Contractor,
and the Contractor hereby agrees to perform, complete, provide and furnish, in a timely and proper
manner, and pursuant to and in accordance with all of the terms, covenants, conditions and
provisions of this agreement, all of the work, services, labor and materials required to accomplish all
of the work described in Section 2 hereof at the times, in the manner, and for the consideration and
payments hereinafter set forth.
Section 2: Description of Work. The Contractor shall perform, supply, and provide all of the
work, services and materials; hereinafter collectively referred to as "work", as set forth and
described on Attachment A and included in Attachment D, attached hereto and incorporated
herein by this reference. If there is a conflict between This Agreement, Attachment A and
Attachment B, this Agreement shall prevail first, then Attachment A shall prevail over Attachment B.
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Section 3: Time for Commencement and for Completion of Work.
(a) Commencement. Contractor shall commence the work called for in this agreement
upon the giving of a Notice to Proceed by the Borough.
(b) Completion. Upon giving of Notice to Proceed, the work called for in this agreement
shall be performed starting May 1, 2022, and completed by the dates indicated in Exhibit A for the
prior year audit ending June 30, 2023. For renewal years the commencement of each annual audit
shall be July 1 of each year for the prior fiscal year ending the prior June 30 and shall be completed
by the reporting dates corresponding to the dates listed in the Scope of Work, Attachment A for
the relevant fiscal year. Unless earlier terminated as provided for in this agreement, the Borough
shall reserve the right to renew this agreement for a maximum of two (2) extensions of two (2) years
each not to exceed a total of five (5) years. The renewal option shall be solely at the discretion of
the Borough.
Section 4: Financial Terms.
(a) Compensation and Payment. For and in consideration of the timely and proper
performance of work authorized as provided herein, the Borough shall pay the Contractors for audit
services an amount not to exceed a maximum for each year of service in accordance with the Cost
Proposal Schedule listed in Attachment B. Additional non -audit consulting of up to 60 hours per
year shall be billed at the rates in Attachment C which is appended to this contract and
incorporated herein by reference. Services shall be invoiced no more frequently than monthly.
(b) No Additional Work. Additional work, identified as additional engagements, shall be
estimated, billed, and paid based upon the rates in Attachment C which is appended to this
contract and incorporated herein by reference. No claim for additional work, services or materials,
not specifically and expressly requested and authorized as provided for in this agreement, or by a
written amendment thereto signed by both parties, done or furnished by the Contractor, will be
allowed or paid by the Borough and Contractor expressly waives any claim therefore.
(c) Availability of Funds. This contract is subject to the availability of funds lawfully
appropriated for its performance.
Section 5: Borough's Contracting Officer. For purposes of this agreement, the Borough's
contracting officer shall be the Borough Finance Director or such other person as is designated in
writing by the Borough Manager.
Section 6: Contractor Qualified. The Contractor expressly represents and warrants it is now
and shall continue to be at all times during the performance of this agreement, the holder of all
required or necessary professional, business or other licenses or permits and is qualified and
capable of performing all of the work covered or called for by this agreement and is presently ready,
able and willing to undertake and perform all of such work and services, and to supply all necessary
materials and equipment, at the times, and in a non -negligent professional and workmanlike
manner, and pursuant to the terms, conditions and provisions, and for the compensation and
payments as herein provided.
Section 7: Termination.
(a) By Consent. This agreement may be terminated in whole or in part by the mutual
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consent of the parties. Such consent shall be in writing.
(b) Termination for Cause. This agreement may be terminated in whole or in part in writing
by Borough in the event of failure by Contractor to fulfill any of the terms and conditions of this
agreement upon the giving of not less than five (5) calendar days prior written notice of intent to
terminate in the manner provided in Part 1, Section 10, hereof.
(c) Termination for Convenience of Borough. This agreement may be terminated in whole
or in part in writing by the Borough for Borough's convenience provided the Contractor is given not
less than thirty (30) calendar days prior written notice of intent to terminate in the manner provided
in Part 1, Section 10, hereof.
(d) In the event termination by the Borough is effected pursuant to (b) above, the Contractor
shall not be entitled to receive any further payment until the work is completed, or the Borough
elects to not proceed further with the project. Upon completion of the work, or termination of the
project in the event the Borough elects to not proceed with the project, the Contractor shall be paid
as follows:
1) In the event the costs and expense of taking over, re -advertising and completing
the project or the costs of closing out the project if the Borough elects to not proceed with
the project (hereinafter referred to as "close out costs"), exceed the remaining unpaid
amount of this agreement, any amount which was otherwise due and unpaid to Contractor
at the time of termination shall be applied to such increased costs in taking over, re -
advertising and completing the project, (or applied to close out costs) and the remaining
amount of such costs, if any, shall be paid by the Contractor to the Borough.
2) In the event said costs and expense of taking over, re -advertising and completing
the project, (or close out costs) are less than the total amount which was otherwise due and
unpaid to the Contractor at the time of termination, the increased costs of taking over and
completing the project (or the close out costs) shall be deducted from the amounts due the
Contractor and the balance, if any, paid to the Contractor without interest.
(e) Upon receipt of a termination notice pursuant to paragraphs (b), (c), or (d) above, the
Contractor shall promptly discontinue all services (unless the notice directs otherwise), and deliver
or otherwise make available to the Borough all data, drawings, notes, specifications, reports,
estimates, summaries, work in progress, and any and all other information and/or materials as may
have been accumulated by the Contractor in performing this agreement, whether completed or in
process, and free and clear of any mechanics or other liens or claims in favor of Contractor or any
other person.
(f) Upon termination pursuant to paragraphs (b), (c), or (d) above, the Borough may, but
shall not be required to, take over the work and prosecute the same to completion by agreement
with another person or otherwise, may elect to complete the work itself, or to not proceed further
with the work and project.
(g) If, after termination by the Borough pursuant to (b) above, it is determined that the
Contractor had not so failed, the termination shall be deemed to have been effected for the
convenience of the Borough. In such event, adjustment of the amounts to be paid to Contractor for
termination shall be made as provided in paragraph (f) of this section.
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(h) No other damages, whether for lost profits or otherwise, other than the amounts allowed
and computed as provided for in this Section 7 shall be due or payable to Contractor in the event of
termination.
Section 8: Conflict of Interest. The Contractor covenants, warrants and represents that the
Contractor has no interest and shall not acquire any interest, direct or indirect, which would conflict
in any manner with the subject matter or the performance of this agreement. The Contractor further
covenants, warrants and represents that in the performance of this agreement, no person having
any such interest shall be employed.
Section 9: Assignment and Subletting Prohibited. The Contractor shall not assign, transfer,
convey, pledge, hypothecate, sublet, subcontract, or otherwise dispose of or encumber this
agreement, or the rights thereunder, nor shall the Contractor delegate any of his/her/its duties
hereunder without the prior written consent of the Borough. Any such attempted assignment,
transfer, conveyance, pledge, hypothecation, subletting, or other disposition, or the attempted
assignment, disposition or delegation of duties or rights shall be null and void and of no force or
effect and shall be grounds and cause for immediate termination of this agreement without liability
by and at the option of the Borough.
Section 10: Notice. (a) Any notice, demand, request, consent, approval, or other
communication that either party desires or is required to give to the other party or any other person
shall be in writing and either served personally or sent by prepaid, first-class mail at the address set
forth below. Either party may change its address by notifying the other party of its change of
address in writing. Notice shall be deemed to have been duly made and given when delivered if
served personally, or upon the expiration of twenty-four (24) hours after the time of mailing if mailed
as provided in this section.
Borough: The Borough Manager's Office
710 Mill Bay Road
Kodiak, Alaska 99615
Contractor: Altman, Rogers & Co.
3000 C Street, N., Suite 201
Anchorage, AK 99603
(b) The performance and administration of this program and this agreement will be
monitored by the Borough and such other agencies as may be required or authorized pursuant to
the terms of any grant to the Borough. Necessary reports, in proper form, will be required as a
prerequisite to any payment to the Contractor.
(c) All project records shall be maintained by the Contractor for not less than three (3) years
after completion and final acceptance of all work by the Borough and shall be subject to inspection
and copying by the Borough or any funding agency during said period.
Section 11: Status of Parties.
(a) Independent Contractor. The Contractor shall perform its obligations hereunder as an
independent contractor of the Borough. The Borough may administer the contract and monitor the
Contractor's compliance with its obligations hereunder. The Borough shall not supervise or direct
the Contractor other than as provided in this section.
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(b) Relationship of the Parties. Nothing herein contained shall be deemed or construed by
the parties hereto, nor by any third party, as creating the relationship of principal and agent or of
partnership or of joint venture between the parties hereto, it being understood and agreed that
neither method of computation of payment nor any other provision contained herein, nor any acts of
the parties hereto, shall be deemed to create any relationship between the parties hereto other than
the relationship of Borough and an independent Contractor.
Section 12: Hold Harmless and Indemnity.
(a) The Contractor shall indemnify, defend, save and hold the Borough, its officers,
employees and agents harmless from any and all claims, lawsuits, liabilities, penalties, or fines,
including attorney's fees and costs, allegedly arising out of, in connection with, or incident to any
loss, damage or injury to persons or property occurring as a result of the Contractor's or any
subcontractor's intentional misconduct or negligent acts, errors or omissions in its performance
pursuant to this contract.
(b) Contractor further agrees to appear and defend, and to indemnify and save free and
harmless the Borough and its officers, employees and agents from and against any of the foregoing
claims, liabilities, penalties, fines or damages, whether or not valid, and for any cost and expense,
including reasonable attorney's fees, incurred by the Borough, its officers, employees or agents on
account of any claim therefore, including claims by reasons of any defects in any plans, drawings,
specifications, computer programs, technical reports, or other work product of Contractor prepared
for or submitted to the Borough pursuant to this agreement provided said claim is not based upon a
use of said plans, drawings, specifications or other work product for other than the purposes for
which such data was prepared and submitted to the Borough.
Section 13: No Third -Party Beneficiaries. Nothing in this agreement shall be construed to
give any person other than the Borough and the Contractor any legal or equitable right, remedy or
claim under this agreement, but it shall be held to be for the sole and exclusive benefit of the
Borough and the Contractor.
Section 14: Compliance with Laws and Regulations. Contractor shall, at ContractorMs sole
cost and expense, comply with all of the requirements of all local, state, or federal laws, ordinances,
or regulations now in force, or which may hereafter be in force, pertaining to this agreement, or the
project or work to be performed, and shall faithfully observe in the performance of this agreement,
all local, state, and federal laws, ordinances and regulations now in force or which may hereafter be
in force. When a change in laws, ordinances or regulations results in additional costs, the
Contractor may request a change order to cover those costs. Any such change order shall be
limited to the ContractorMs actual additional costs as a result of the change. The Contractor shall
pay all taxes pertaining to its performance under this contract.
Section 15: Successors and Assigns. Except as otherwise provided herein, the covenants,
agreements and obligations herein contained shall extend to bind and inure to the benefit not only
of the parties hereto but their respective personal representatives, heirs, successors and assigns.
Section 16: Miscellaneous.
(a) Terminology. Whenever herein the singular number is used, the same shall include the
plural, and the masculine gender shall include the feminine and neuter genders.
(b) Law Applicable. The laws of the State of Alaska shall govern the construction, validity,
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performance and enforcement of this agreement. Venue as to any action, claim, or proceeding
arising out of, or based upon this agreement, including, but not limited to, any action for declaratory
or injunctive relief, shall be the appropriate Court sitting in the City of Kodiak, Third Judicial District,
Alaska.
(c) Paragraph Headings. The headings of the several sections and subsections contained
herein are for convenience only and do not define, limit or construe the contents of such sections
and subsections.
(d) Terms Construed as Covenants and Conditions. Every term and each provision of this
agreement performable by Contractor shall be construed to be both a covenant and a condition.
(e) Time of the Essence. Time is of the essence of each term, condition, covenant and
provision of this agreement.
(f) Severability. In the event any provision of this agreement is adjudicated or held to be
invalid or unenforceable, the remaining provisions shall remain in full force and effect.
(g) Nonwaiver. No delay or omission of the right to exercise any power by either party shall
impair any such right or power, or be construed as a waiver of any default or as acquiescence
therein. One or more waivers of any covenant, term or condition of this agreement by either party
shall not be construed by the other party as a waiver of a subsequent breach of the same covenant,
term or condition. The consent or approval by either party to any act by the other party of a nature
requiring consent or approval shall not be deemed to waive or render unnecessary consent to or
approval of any subsequent similar act.
Section 17: Amendment.
(a) This contract shall only be amended, modified or changed by writing, executed by
authorized representatives of the parties.
(b) For the purpose of any amendment modification or change to the terms and conditions
of this contract, the only authorized representatives of the parties are.
1) Kodiak Island Borough, Borough Manager
2) Altman, Rogers & Co, Principal
(c) Any attempt to amend, modify, or change this contract by either an unauthorized
representative or unauthorized means shall be void.
Section 18: Entire Agreement. This agreement and any schedules, appendices or exhibits
attached hereto sets forth all the covenants, promises, agreements, conditions and understandings
between the parties hereto, and there are no covenants, promises, agreements, conditions or
understandings, either oral or written, between them other than as herein set forth. Except as
herein otherwise expressly provided, no contemporaneous or subsequent agreement,
understanding, alteration, amendment, change or addition to this agreement, or any schedule,
appendix, exhibit or attachment thereto shall be binding upon the parties hereto unless reduced to
writing and signed by both parties. This agreement constitutes a final, complete, and exclusive
statement of the agreement between the parties.
PART II
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SPECIAL PROVISIONS
Section 1 : Insurance.
(a) During the entire period of the project or work, the Contractor shall provide the
following types of insurance. The Borough shall be insured as additional insured on all insurance
policies required under subsection (a)(4) of this section. All policies shall have a thirty (30) day
cancellation clause except in the event of cancellation due to non-payment of premium, when
notification to Contractor is ten (10) days.
1. Professional liability insurance covering errors and omissions at $1,000,000 per
claim.
2. Valuable papers and electronic data processing (EDP) coverage in an amount
sufficient to reconstruct the work done under this contract, but in no event less than
$10,000 is required.
3. Workers' compensation as required by law and employer's liability coverage at a
minimum of $1,000,000.
4. Commercial general liability insurance - $1,000,000 per occurrence and
$2,000,000 aggregate.
(b) The Borough shall have the right at any time to require higher limits for public liability
and property damage insurance. In any such event, the additional premium or premiums
payable solely as the result of such additional insurance shall be added by amendment to
the contract price.
(c) Each policy of insurance required by this section shall provide for no less than thirty
(30) days' advance notice to the Borough prior to cancellation except in the event of cancellation
due to non-payment of premium, when notification to Contractor is ten (10) days. Insurance
certificates will be required to be submitted for review by the Borough's Finance Director before the
Borough will issue a notice to proceed. Failure to maintain coverage is a material breach and
grounds for termination of the contract.
Section 2: Equal Employment Opportunity.
(a) The Contractor shall not discriminate against any employee or applicant for employment
because of race, color, religion, disability, national origin, ancestry, age, or sex. The Contractor will
take affirmative action to insure that applicants are employed and that employees are treated during
employment without regard to their race, color, religion, disability, national origin, ancestry, age or
sex. Such action shall include, but not be limited to, the following: employment, upgrading,
demotion, or transfer; recruitment or recruitment advertising; layoff or termination, rates of pay or
other forms of compensation; and selection for training, including apprenticeship. The Contractor
agrees to post in conspicuous places, available to employees and applicants for employment,
notices setting forth the provisions of this nondiscrimination clause.
(b) The Contractor shall state in all solicitations or advertisements for employees to work on
contract jobs to be let in the performance of this agreement, that all qualified applicants will receive
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consideration for employment without regard to race, color, religion, disability, national origin,
ancestry, age, or sex.
(c) The Contractor agrees to fully cooperate with the office or agency of the State of Alaska which
seeks to deal with the problem of unlawful or invidious discrimination, and with all other State efforts
to guarantee fair employment practices under this agreement, and said Contractor will comply
promptly with all requests and directions from the State Commission of Human Rights or any of its
officers or against relating to prevention of discriminatory employment practice.
(d) Full cooperation as expressed in the foregoing clause (c) shall include, but not be limited
to, being a witness in any proceeding involving questions of unlawful or invidious discrimination if
such is deemed necessary by any official or agency of the State of Alaska, permitting employees of
said Contractor to be witnesses or complainants in any proceeding involving questions of unlawful
or invidious discrimination, if such is deemed necessary by any official or agency of the State of
Alaska, or the Borough, participating in meetings, submitting periodic reports on the equal
employment aspects of present and future employment, assisting in inspection of relevant facilities,
and promptly complying with all State directives deemed essential by any office or agency of the
State of Alaska, or the Borough, to insure compliance with all federal and state laws, regulations,
and policies pertaining to the prevention of discriminatory employment practices.
(e) Failure to perform any of the above agreements pertaining to equal employment
opportunities shall be deemed a material breach of the contract and sufficient grounds for
termination of this agreement for cause without liability.
Section 3: Contractor Responsible for Personnel.
The Contractor has or will secure, at Contractor's own cost and expense, all personnel required to
perform this agreement in a timely and proper manner. The parties hereto agree and understand
that such personnel shall in no event be deemed to be, and are not, employees, agents, or
representatives of the Borough and such persons shall have no contractual or other relationship
with the Borough, and the Borough shall have no responsibility or liability whatsoever to any of said
persons, or for the acts or omissions of any of such persons.
Section 4: Personnel Suaervision.
Contractor agrees that all work and services required or provided under this agreement shall
be performed personally by the Contractor, unless otherwise authorized in writing by the Borough's
contracting officer, and in such event all personnel engaged in any such work shall be fully qualified,
and shall be licensed and authorized under applicable state, federal and local laws to perform such
services.
Section 5: Corporate Authority.
If Contractor is a corporation Contractor shall deliver to the Borough at the time of execution
of this agreement a certified copy of a resolution of its board of directors authorizing the execution
of this agreement and naming the officers that are authorized to execute this agreement on behalf
of the corporation.
Section 6: Additional Terms and Conditions.
This agreement is subject to each of the additional terms, covenants, conditions and
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provisions set out in the RFP, attached hereto as Attachment D which are hereby expressly
referred to and incorporated herein as though set forth in full.
Wherefore the parties have entered into this agreement the date and year first above written
at the City of Kodiak, Alaska.
KODIAK ISLAND BOROUGH:
Date:�� Z,2, i By.
Roxanne Murphy
Borough Manager
V
OWPA 0i
� 12
Date'. /7
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ATTES
B -
Nova Javier
Interim Borough Clerk
Sci jBra • - richten
Borough Attorney
10101,11
By:
(Print -Name/Position)
BOROUGH ACKNOWLEDGMENTS
STATE OF ALASKA
FIRST JUDICIAL DISTRICT
THIS IS TO CERTIFY that on this day of , 2022, before me, the
undersigned, a notary public in and for the State of Alaska, duly commissioned and sworn,
personally appeared Roxanne Murphy to me known to be the Borough Manager of the Kodiak
Island Borough, a municipal corporation, the corporation which executed the above and foregoing
instrument; who on oath stated that she was duly authorized to execute said instrument on behalf of
said corporation; who acknowledged to me that she signed the same freely and voluntarily on
behalf of said corporation for the uses and purposes therein mentioned.
WITNESS my hand and official seal the day and year in the certificate first above written.
(Seal)
STATE OF ALASKA )
)SS.
FIRST JUDICIAL DISTRICT 1
NOTARY PUBLIC FOR ALASKA
My Commission Expires:
THIS IS TO CERTIFY that on this day of 2022, before me, the
undersigned, a notary public in and for the State of Alaska, duly commissioned and sworn,
personally appeared Alise Rice to me known to be the Borough Clerk of the Kodiak Island
Borough, a municipal corporation, the corporation which executed the above and foregoing
instrument; who on oath stated that she was duly authorized to execute said instrument on behalf of
said corporation; who acknowledged to me that she signed the same freely and voluntarily on
behalf of said corporation for the uses and purposes therein mentioned.
WITNESS my hand and official seal the day and year in the certificate first above written.
(Seal)
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NOTARY PUBLIC FOR ALASKA
My Commission Expires:
ACKNOWLEDGMENT
LIMITED LIABILITY COMPANY
STATE OF ALASKA
) SS.
FIRST JUDICIAL DISTRICT
I, , a Notary Public, in and for the State of , hereby
certify that , whose name as
manager/member of LLC., is signed to the foregoing
instrument and who is known to me, acknowledged before me on this day that, being informed of
the contents of the instrument, he or she, as such officer and with full authority, executed the same
voluntarily for and as the act of said limited liability company.
WITNESS my hand and official seal the day and year in this certificate above written.
NOTARY PUBLIC FOR,
My Commission Expires:
(Seal)
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EXHIBIT A
SCOPE OF WORK
The Borough desires the auditor to express an opinion on the fair presentation of its basic financial
statements in conformity with generally accepted accounting principles.
The Borough presents all major funds with budgetary comparisons as part of its basic financial
statements.
The auditor is not required to audit the combining and individual fund financial statements and
supporting schedules. However, the auditor is to provide an "in -relation -to" report on the combining
and individual fund financial statements and supporting schedules based on the auditing
procedures applied during the audit of the basic financial statements. The auditor is not required to
audit the statistical section of the report.
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.
1. Auditina Standards to be Followed
To meet the requirements of this request for proposals, the audit must be performed in
accordance with generally accepted auditing standards as set forth by the American
Institute of Certified Public Accountants, the standards for financial audits set forth in the
U.S. General Accounting Office's Government Auditing Standards, the provisions of the
Single Audit Act of 1984 as amended, the provisions of U.S. Office of Management and
Budget (OMB) Circular A-133, and the AICPA Guide Audits of State and Local
Governmental Units and the State of Alaska Single Audit Regulation 2 AAC 45.010.
2 Financial Statements and Compliance Statements - Borough
2.1 SCOPE OF WORK TO BE PERFORMED
The Kodiak Island Borough desires the auditor to express an opinion on the
fair presentation of its general-purpose financial statements in conformity
with generally accepted accounting principles.
The Borough also desires the auditor to express an opinion on the fair
presentation of its combining and individual fund and account group financial
statements and schedules in conformity with generally accepted accounting
principles. The auditor is not required to audit the supporting schedules
contained in the Annual Financial Report. The auditor is not required to
audit the statistical section of the report.
The auditor is required to report on compliance with applicable state and
with applicable federal laws and regulations and on internal controls over
financial reporting that could have a material effect on the fair presentation of
the financial statements.
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The auditor is required to test internal controls and compliance, as described
in the U.S. Office of Management and Budget (OMB) Circular A-133
Compliance Supplement that are applicable to each of the Borough's major
federal programs. The auditor is also required to test internal controls and
compliance, as described in the State of Alaska Audit Guide and
Compliance Supplement for State Single Audits that are applicable to each
of the Borough's major state programs. The auditor must report on
compliance and internal control over compliance applicable to each major
federal and to each major state program.
The auditor is not required to audit the schedules of expenditures of federal
and state awards.
The auditor is required to report any findings or questioned costs found in
the course of the work described above. Findings must be reported in three
separate categories: 1) those affecting financial reporting, 2) those affecting
major federal programs, and 3) those affecting major state programs.
Recommendations for corrective action should be included.
The auditor shall also be responsible for performing certain limited
procedures, for Management's Discussion and Analysis and for other
Required Supplementary Information required by the Governmental
Accounting Standards Board, as mandated by generally accepted auditing
standards.
2.2 AUDITING STANDARDS TO BE FOLLOWED
To meet the requirements of this request for proposal, the audit shall be
performed in accordance with generally accepted auditing standards as set
forth by the American Institute of Certified Public Accountants, the standards
for financial audits set forth in the U.S. General Accounting Office's
Government Auditing Standards, the provisions of U.S. Office of
Management and Budget (OMB) Circular A-133, Audits of States, Local
Governments, and Non -Profit Organizations, and the provisions of the State
of Alaska Single Audit Regulation (2AAC 45.010), to include the State of
Alaska Audit Guide and Compliance Supplement for State Single Audits.
2.3 REPORTS TO BE ISSUED
Reports shall be written in accordance with generally accepted auditing
standards as set forth by the American Institute of Certified Public
Accountants, the standards for financial audits set forth in the U.S. General
Accounting Office's Government Auditing Standards, the provisions of U.S.
Office of Management and Budget (OMB) Circular A-133, Audits of States,
Local Governments, and Non -Profit Organizations, and the provisions of the
State of Alaska Single Audit Regulation (2 AAC 45.010), to include the State
of Alaska Audit Guide and Compliance Supplement for State Single Audits.
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Following the completion of the audit of the fiscal year's financial statements,
the auditor shall issue:
• A report on the fair presentation of the financial statements in conformity
with generally accepted accounting principles.
• For federal purposes, a report on compliance and on internal control
over financial reporting based on an audit of the financial statements
performed in accordance with Government Auditing Standards.
• An "in -relation -to" report on the Schedule of Expenditures of Federal
Awards, along with a report on compliance with requirements applicable
to each major program and on internal control over compliance in
accordance with OMB Circular A-133.
• A Schedule of Findings and Questioned Costs summarizing auditor
results for a federal single audit, along with recommendations for
corrective action.
• Accounting assistance will be required for preparation of the Annual
Comprehensive Financial Report (ACFR). This will be included in the
lump sum cost for audit services.
In the required state and federal reports on compliance and on internal
controls over financial reporting and on the state and federal reports on
compliance with requirements applicable to each major program, the auditor
shall communicate any reportable conditions found during the audit. A
reportable condition shall be defined as a significant deficiency in the design
or operation of internal control, which could adversely affect the Borough's
ability to record, process, summarize, and report financial data consistent
with the assertions of management in the financial statements.
Reportable conditions that are also material weaknesses shall be identified
as such in the report.
Nonreportable conditions discovered by the auditors shall be reported in a
separate letter to management, which shall be referred to in the report on
internal controls.
The report on compliance with requirements to each major assistance
program shall include all material instances of noncompliance. All
nonmaterial instances of noncompliance shall be reported in a separate
management letter, which shall be referred to in the report on compliance.
Fraud and Illegal Acts. Auditors shall be required to make an immediate,
written report of all irregularities and illegal acts or indications of illegal acts
of which they become aware. This notification should be made in
accordance with Statements of Auditing Standards No. 54 and No. 99, and
with the U.S. General Accounting Office's Government Auditing Standards.
Auditing Services for the
Kodiak Island Borough
Page 14
2.4 REPORT DEADLINES
The opinion on the financial statements of the Borough for the fiscal years
ending June 30 is to be submitted by November 15 for each year of the
engagement, unless adjusted by mutual agreement.
The reports required for the federal Single Audit Act, as amended in 1996,
and the state single audit regulation are to be submitted by December 15 for
each year of the engagement, unless adjusted by mutual agreement.
2.5 SPECIAL CONSIDERATIONS
The Kodiak Island Borough will send its Annual Comprehensive Financial
Report to the Government Finance Officers Association for review in its
Certificate of Achievement for Excellence in Financial Reporting program.
The auditor may be required to provide limited special assistance to the
Kodiak Island Borough to meet the requirements of that program. Any fees
for this assistance are outside the scope of the audit and will be billed as
additional engagement work at the rates in Attachment C.
The Kodiak Island Borough may prepare one or more official statements in
connection with the sale of debt securities, which may contain the general-
purpose financial statements and the auditor's report thereon. The auditor
shall be required, if requested by the financial advisor and/or the underwriter,
to issue a "consent and citation of expertise" as the auditor and any
necessary "comfort letters".
The schedules of expenditures of federal and state awards the related
auditor's reports, as well as the federal and state reports on compliance and
on internal control over financial reporting and on compliance with
requirements applicable to each major program and on internal control over
that compliance are not to be included in the Annual Comprehensive
Financial Report but are to be issued separately.
2.6 WORKING PAPER RETENTION AND ACCESS TO WORKING PAPERS
All working papers and reports must be retained, at the auditor's expense,
for a minimum of three (3) years from the end of the audited period, unless
the firm is notified in writing by the Borough of the need to extend the
retention period. The auditor will be required to make working papers
available, upon request, to the following parties or their designees:
• Kodiak Island Borough
• Parties designated by the federal or state governments or by the Kodiak
Island Borough as part of an audit quality review process
• Auditors of entities of which the Kodiak Island Borough is a sub recipient
of grant funds
Auditing Services for the
Kodiak Island Borough
Page 15
In addition, the firm shall respond promptly and fully to the reasonable
inquires of successor auditors. The firm shall allow successor auditors to
review working papers, including documentation of planning, internal control,
audit results, and other matters of continuing accounting and auditing
significance.
3. Financial Statements and Compliance Statements — School District
3.1 SCOPE OF WORK TO BE PERFORMED
The Kodiak Island Borough School District desires the auditor to express an
opinion on the fair presentation of its general-purpose financial statements in
conformity with generally accepted accounting principles.
The School District also desires the auditor to express an opinion on the fair
presentation of its combining and individual fund schedules in conformity
with generally accepted accounting principles (i.e., a "full -scope" audit). The
auditor is not required to audit the supporting schedules contained in the
Annual Comprehensive Financial Report. The auditor is not required to audit
the statistical section of the report.
The auditor is required to report on compliance with applicable state and
with applicable federal laws and regulations and on internal controls over
financial reporting that could have a material effect on the fair presentation of
the financial statements.
The auditor is required to test internal controls and compliance as described
in the U.S. Office of Management and Budget (OMB) Circular A-133
Compliance Supplement that are applicable to each of the School District's
major federal programs. The auditor is also required to test internal controls
and compliance, as described in the State of Alaska Audit Guide and
Compliance Supplement for State Single Audits that are applicable to each
of the School District's major state programs. The auditor must report on
compliance and internal control over compliance applicable to each major
federal and to each major state program.
The auditor is not required to audit the schedules of expenditures of federal
and state awards.
The auditor is required to report any findings or questioned costs found in
the course of the work described above. Findings must be reported in three
separate categories: 1) those affecting financial reporting, 2) those affecting
major federal programs, and 3) those affecting major state programs.
Recommendations for corrective action should be included.
The auditor shall also be responsible for performing certain limited
procedures, for Management's Discussion and Analysis and for other
Required Supplementary Information required by the Governmental
Accounting Standards Board, as mandated by generally accepted auditing
standards.
Auditing Services for the
Kodiak Island Borough
Page 16
3.2 AUDITING STANDARDS TO BE FOLLOWED
To meet the requirements of this request for proposal, the audit shall be
performed in accordance with generally accepted auditing standards as set
forth by the American Institute of Certified Public Accountants, the standards
for financial audits set forth in the U.S. General Accounting Office's
Government Auditing Standards, the provisions of U.S. Office of
Management and Budget (OMB) Circular A-133, Audits of States, Local
Governments, and Non -Profit Organizations, and the provisions of the State
of Alaska Single Audit Regulation (2AAC 45.010), to include the State of
Alaska Audit Guide and Compliance Supplement for State Single Audits.
3.3 REPORTS TO BE ISSUED
Reports shall be written in accordance with generally accepted auditing
standards as set forth by the American Institute of Certified Public
Accountants, the standards for financial audits set forth in the U.S. General
Accounting Office's Government Auditing Standards, the provisions of U.S.
Office of Management and Budget (OMB) Circular A-133, Audits of States,
Local Governments, and Non -Profit Organizations, and the provisions of the
State of Alaska Single Audit Regulation (2 AAC 45.010), to include the State
of Alaska Audit Guide and Compliance Supplement for State Single Audits.
Following the completion of the audit of the fiscal year's financial statements,
the auditor shall issue:
• A report on the fair presentation of the financial statements in conformity
with generally accepted accounting principles.
• For federal purposes, a report on compliance and on internal control
over financial reporting based on an audit of the financial statements
performed in accordance with Government Auditing Standards.
• An "in -relation -to" report on the Schedule of Expenditures of Federal
Awards, along with a report on compliance with requirements applicable
to each major program and on internal control over compliance in
accordance with OMB Circular A-133.
• A Schedule of Findings and Questioned Costs summarizing auditor
results for a federal single audit, along with recommendations for
corrective action.
• For state purposes, a report on compliance and on internal control over
financial reporting based on an audit of the financial statements
performed in accordance with Government Auditing Standards.
Auditing Services for the
Kodiak Island Borough
Page 17
An "in -relation -to" report on the Schedule of Expenditures of State
Awards, along with a report on compliance with requirements applicable
to each major program and on internal control over compliance in
accordance with the State of Alaska Audit Guide and Compliance
Supplement for State Single Audits.
The auditors must send out these reports for the School District:
• A report on fund balance compliance requirements, in accordance with
AS 14.17.505. A report on the fair presentation of the tuition rate report,
in accordance with Alaska Department of Education and Early
Development instructions for Form 05-00-014.
• One copy of the General -Purpose Financial Statement for each state
agency listed on either the schedule of state financial assistance or
Federal Awards should be sent to the Statewide Single Audit
Coordinator, Office of Management & Budget.
• One copy of the General -Purpose Financial Statement should be sent to
the State of Alaska, Department of Administration, Division of Finance.
Their report should also include the Tuition Rate Report and
Management Letter
• Two copies of the General -Purpose Financial Statement will be sent to
the Federal Audit Clearing House. It will also include the Data Collection
Form for Reporting on Audits of States, Local Governments and
Nonprofit Organizations (Form SF -SAC) which the auditors have
prepared.
Five additional copies each of the General -Purpose Financial Statement,
Management Letter, Letter to the School Board and two (2) copies of the
Tuition Rate Report sent to the School District along with an electronic
version of all reports.
In the required state and federal reports on compliance and on internal
controls over financial reporting and on the state and federal reports on
compliance with requirements applicable to each major program, the auditor
shall communicate any reportable conditions found during the audit. A
reportable condition shall be defined as a significant deficiency in the design
or operation of internal control, which could adversely affect the School
District's ability to record, process, summarize, and report financial data
consistent with the assertions of management in the financial statements.
Reportable conditions that are also material weaknesses shall be identified
as such in the report.
Nonreportable conditions discovered by the auditors shall be reported in a
separate letter to management, which shall be referred to in the report on
internal controls.
Auditing Services for the
Kodiak Island Borough
Page 18
The report on compliance with requirements to each major assistance
program shall include all material instances of noncompliance. All
nonmaterial instances of noncompliance shall be reported in a separate
management letter, which shall be referred to in the report on compliance.
Fraud and Illegal Acts. Auditors shall be required to make an immediate,
written report of all irregularities and illegal acts or indications of illegal acts
of which they become aware. This notification should be made in
accordance with Statements of Auditing Standards No. 54 and No. 99, and
with the U.S. General Accounting Office's Government Auditing Standards.
3.4 REPORT DEADLINES
Opinions on the financial statements of the School District and on reports
required by the Alaska Department of Education and Early Development for
the fiscal years ending June 30 are to be submitted by October 1 for each
year of the engagement, unless adjusted by mutual agreement.
The reports required for the federal Single Audit Act, as amended in 1996,
the state single audit regulations, and the applicable state statutes and
regulations of the Alaska Department of Education and Early Development
are to be submitted by October 1 for each year of the engagement, unless
adjusted by mutual agreement.
3.5 WORKING PAPER RETENTION AND ACCESS TO WORKING
PAPERS
All working papers and reports must be retained, at the auditor's expense,
for a minimum of three (3) years from the end of the audited period, unless
the firm is notified in writing by the or School District of the need to extend
the retention period. The auditor will be required to make working papers
available, upon request, to the following parties or their designees:
• Kodiak Island Borough and Kodiak Island Borough School District
• State Department of Education and Early Development and U.S.
Department of Education
• Parties designated by the federal or state governments or by the
Borough or School District as part of an audit quality review process
• Auditors of entities of which the Kodiak Island Borough School District is
a subrecipient of grant funds
In addition, the firm shall respond promptly and fully to the reasonable
inquires of successor auditors. The firm shall allow successor auditors to
review working papers, including documentation of planning, internal control,
audit results, and other matters of continuing accounting and auditing
significance.
4. Peer Reviews
Auditing Services for the
Kodiak Island Borough
Page 19
The firm shall provide copies of their peer reviews as they are performed during the
term of the contract.
5. Management Letters
The auditor shall observe the adequacy of the systems of internal control,
accounting procedures, and other significant matters. Upon the request any
appropriate recommendations may be reviewed with management and included in
separate letters to the Borough Manager and Assembly, and to the Superintendent
and School Board.
Interim management letters on improvements in controls and procedures for the
Borough and School District will be submitted within three weeks of interim fieldwork
for each year. Final management letters for the Borough and School District will be
submitted by December 15 and September 30, respectively, of each year, unless
adjusted by mutual agreement. The auditor will meet at least semi-annually with the
Assembly and School Board, or with designated Committee(s), for the purpose of
reviewing the interim and/or final management letters.
6. Presentations
As early as possible after the statements have been printed, the appropriate
financial reports, compliance reports, and the management letters are to be
reviewed with a designated committee of the School District and with the Borough's
audit committee. Then they are to be presented to the School Board and to the
Assembly at a regular meeting, respectively. The audit partner assigned to the
engagement should be in attendance, if requested to be present.
Auditing Services for the
Kodiak Island Borough
Page 20
COST PROPOSAL SCHEDULE
KODIAK ISLAND BOROUGH
710 Mill Bay Road
Kodiak, AK 99615
EXTERNAL AUDIT SERVICES FOR KODIAK ISLAND BOROUGH AND
KODIAK ISLAND BOROUGH SCHOOL DISTRICT
2022 2023 2024 2025 2026
Borough
Annual Comprehensive
Financial Report
Federal Single Audit
State Single Audit
Consultation
Total
$ 99,890
104,500
108,000
112,500
117,500
5,000
5,000
5,500
5,500
5,500
4,000
4,000
4,500
4,500
4,500
4,500
4,500
4,500
4,500
4,500
$113 390
118.000
122 0
127.000
132,000
School District
Financial Statements, Statements
of Compliance (Alaska Statutes
and Department of Education and Early
Development, Reimbursable Expenditures
for School Construction, and
Tuition Rate Report $ 41,910
Federal Single Audit 4,500
State Single Audit 4,500
Consultation 3,000
Total $ 53,910
GRAND TOTAL $ !Q 7300
44,000
45,000
47,000
48,500
4,500
5,000
5,000
5.500
4,500
5,000
5,000
5,500
3,000
3,000
3,000
3,000
56,000
58,000
60 00
62,00
174 000
180,500
1 7 0
194,500
RATE SCHEDULE FOR POTENTIAL ADDITIONAL ENGAGEMENT(S)
KODIAK ISLAND BOROUGH
710 Mill Bay Road
Kodiak, AK 99615
EXTERNAL AUDIT SERVICES FOR KODIAK ISLAND BOROUGH AND
KODIAK ISLAND BOROUGH SCHOOL DISTRICT
Staff Category
2022
2023
2024
2025
2026
Partner
210
215
215
220
220
Manager
185
190
190
195
195
Supervisor
175
180
180
185
185
Senior
150
155
155
160
160
In -Charge
125
130
130
135
135
Staff
110
115
115
120
120
SUBMITTAL DEADLINE:
TIME: 3:00 p.m.
DATE: March 30, 2022
DELIVER PROPOSALS TO:
Kodiak Island Borough
Managers Office
710 Mill Bay Road
Kodiak AK 99615
COVER SHEET
THIS IS NOT AN ORDER
ISSUE DATE
PROJECT:
March 9, 2022
EXTERNAL AUDIT SERVICES
THE ATTACHED TERMS & CONDITIONS SHALL BECOME PART OF ANY
CONTRACT RESULTING FROM THIS REQUEST FOR PROPOSAL.
PROPOSALS SHALL BE SUBMITTED IN THE PROPER FORMAT
AND MUST HAVE ORIGINAL SIGNATURES ON THE FORMS PROVIDED.
FOR VENDOR USE ONLY: PLEASE RETURN THIS ORIGINAL. MAKE A COPY FOR YOUR FILES.
DATE OF PROPOSAL:
BUSINESS LICENSE NUMBER:
BUSINESS NAME:
MAILING ADDRESS:
PHYSICAL LOCATION:
TELEPHONE NUMBER:
FACSIMILE NUMBER:
BY:
Print Name Signature
TABLE OF CONTENTS
1.
INSTRUCTIONS FOR RESPONDENTS........................................................................................................3
2.
GENERAL INFORMATION...........................................................................................................................4
3.
PROPOSAL SUBMISSION REQUIREMENTS............................................................................................5
4.
LOBBYING....................................................................................... ERROR! BOOKMARK NOT DEFINED.
5.
ALTERNATE PROPOSALS............................................................................................................................6
6.
FAX OR EMAIL SUBMITTAL NOT ACCEPTABLE.................................................................................6
7.
WITHDRAWAL, MODIFICATION, OR CORRECTION...........................................................................6
8.
LATE PROPOSALS..........................................................................................................................................6
9.
RESPONSIBILITY TO KEEP INFORMED..................................................................................................6
10.
PRICES..............................................................................................................................................................6
11.
VENDOR TAX ID NUMBER..........................................................................................................................7
12.
FIRM OFFER...................................................................................................................................................7
13.
EXTENSION OF PRICES...............................................................................................................................7
14.
PROPOSAL PREPARATION COSTS...........................................................................................................7
15.
CONTRACT FUNDING..................................................................................................................................7
16.
RIGHT TO REJECT AND NOT AWARD....................................................................................................7
17.
EQUAL OPPORTUNITY................................................................................................................................7
18.
CONFLICTS OF INTEREST PROHIBITED .............................. ERROR! BOOKMARK NOT DEFINED.
19.
SUBMITTAL FORMAT REQUIREMENTS................................................................................................8
20.
CONTRACT NEGOTIATION......................................................................................................................11
21.
INSURANCE REQUIREMENTS.................................................................................................................11
22.
CONTRACT SPECIFICATIONS.................................................................................................................12
23.
CURRENT AND FUTURE ENVIRONMENT............................................................................................12
24.
ADDITIONAL INFORMATION..................................................................................................................16
25.
ENGAGEMENT REQUIREMENTS...........................................................................................................16
26.
POTENTIAL ADDITIONAL ENGAGEMENT(S).....................................................................................25
27.
ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION.................26
28.
EVALUATION CRITERIA...........................................................................................................................27
29.
SELECTION PROCESS................................................................................................................................28
ATTACHMENTA....................................................................................................................................................31
ATTACHMENTB....................................................................................................................................................32
EXTERNAL
AUDIT SERVICES FOR THE KODIAK ISLAND BOROUGH AND THE KODIAK ISLAND
BOROUGH SCHOOL DISTRICT..........................................................................................................................32
ATTACHMENTC....................................................................................................................................................33
ATTACHMENTD....................................................................................................................................................34
Page 2 of 34
KODIAK ISLAND BOROUGH
REQUEST FOR PROPOSAL (RFP)
GENERAL INFORMATION
TITLE
CONTACT FOR QUESTIONS
EXTERNAL AUDIT SERVICES
Dora Cross, Finance Director
Telephone: (907) 486-9320
Email: dcross@kodiakak.us
1. INSTRUCTIONS FOR RESPONDENTS
SUBMIT PROPOSALS ONLY TO
RFP SUBMITTAL DEADLINE
Kodiak Island Borough
Managers Office Rm 125
710 Mill Bay Rd
Kodiak, Alaska 99615
March 30, 2022, 3 PM local time
NUMBER OF COPIES TO BE SUBMITTED: Four (4) complete and signed copies
of your proposal package along with an electronic version.
1.1. Deliver proposal copies (number specified above) only to the address above
before the submittal deadline. Proposals received by the Manager's Office
after the submittal deadline will be returned to the proposer upon receipt of
written request or retained unopened in the proposal file.
1.2. QUESTIONS, OBJECTIONS, OR COMMENTS
Proposers are requested to carefully review this Request for Proposal (RFP),
without delay, for defects and questionable or objectionable matter. Questions,
objections, or comments should be made in writing and received by the
Question Contact no later than 10 calendar days prior to the proposal submittal
deadline, so that any necessary amendments may be published and distributed
to proposers to prevent the opening of a defective proposal. Proposers'
protests based upon any omission or errors, or the content of the RFP will be
disallowed if not made known prior to the proposal submittal deadline.
1.3. Address all auestions. obiections. or comments to: Borouah Finance Director
Dora Cross, 710 Mill Bay Road, Kodiak, Alaska 99615, or by email at
dcross kodiakak.us.
1.4. The Kodiak Island Borough (the Borough) assumes no responsibility for any
interpretation or representations made by any of its officers, agents, or
employees unless interpretations or representations are incorporated in a
written amendment to the RFP.
Page 3 of 34
2. GENERAL INFORMATION
2.1. The Kodiak Island Borough and its component unit, the Kodiak Island Borough
School District (School District), are seeking financial auditing services, for their
fiscal years ending June 30, to result in audit opinions rendered on each
entity's financial statements (which are prepared by the Borough and the
School District) and on the Borough's and School District's compliance with
state and federal single audit reporting requirements. Furthermore, the scope
of the engagement must also include non -audit consulting time up to 60 hours
annually at fixed hourly rates set in the agreement, and which is in addition to
the fixed fee work. The engagement will be for a fixed fee and cover a period
of one year with two, two-year renewal options based on satisfactory
performance in the first and through the third years. The fixed fee is to include
all audit expenses. Also see 25.1.5 "Special Considerations" on page 18-19.
2.2. In addition, the Borough and School District are requesting fixed hourly rate
quotes for each staff category of the proposer. The non -audit consulting time
and any additional engagements outside of the non -audit consulting time
arising during the five years shall be estimated, billed, and paid based on these
rates.
2.3. The Kodiak Island Borough was incorporated September 23, 1963 as a Second
Class Borough under the provisions of the state of Alaska Borough Act (1963),
as amended. The Borough operates under an Assembly -Manager form of
government and has the following powers:
Area wide: public education and public schools; general administration and
finance; assessment and collection of taxes; debt service; planning and zoning
in the entire Borough.
Community Health: this is restricted to Hospital and Mental Health services
on an area wide basis.
Non areawide: Parks and Recreation, Economic Development and Animal
Control.
Enterprise activities: Solid Waste Disposal & Collection District; E-911;
KFRC; Hospital; Long Term Care Center; and Research Court Apartments.
Service Area: road construction and maintenance, fire protection, tide gate
and streetlights on a neighborhood or community basis.
All funds of the Borough are accounted for in accordance with generally
accepted accounting principles.
2.4. The Kodiak Island Borough School District operates a public school system
under an elected school board pursuant to Alaska Statutes, Title 29.35.160. All
funds of the School District are accounted for in accordance with generally
accepted accounting principles and the requirements of the State of Alaska,
Department of Education and Early Development.
Page 4 of 34
2.5. The Borough intends to follow the schedule of activities described below during
the procurement process. The Borough reserves the exclusive right to alter the
schedule.
Activity
Release of RFP
Proposal Due Date
Notice of Intent to Award
Final Selection
Date
March 9, 2022
March 30, 2022
March 31, 2022 (tentatively)
April 7, 2022
3. PROPOSAL SUBMISSION REQUIREMENTS
Each respondent must submit its complete proposal divided into 2 parts:
Part One: Proposal Exclusive of Price Proposal Component
Part One consists of the complete proposal exclusive of the price -proposal component. Part
One must be signed and dated by a person who is authorized to bind the respondent. Failure to
properly sign and date the proposal will be grounds for rejection.
Important note: The Part One Proposal and copies of Part One Proposal must exclude all
price proposal information.
Part Two: Price Proposal Component
Submit 1 set of the Part Two price proposal component enclosed in a separate sealed envelope
placed within the sealed envelope or box containing the Part One proposal.
The Part Two Price Proposal Component shall be submitted on the forms included as
Attachment B, Cost Proposal Schedule, and Attachment C, Rate Schedule, provided in
this RFP for the specified project.
Failure to include the Part Two Price Proposal Component in a separate sealed envelope inside
the sealed envelope or box containing the Part One proposal will be grounds for rejection.
The Part One Proposal shall be in the format called for in section 17 and shall include all
required contents. It shall be submitted in the following form:
3.1. A completed page one (1) shall be the face document of each Part one
proposal.
3.2. Submit four (4) complete and signed copies of your Part one proposal package
along with an electronic version.
3.3. Neither the Borough nor its officers, agents, or employees shall be responsible
for the premature opening of, or the failure to open, a proposal not properly
addressed and identified.
Page 5 of 34
3.4. The manager's office is located at 710 Mill Bay Road, room 125, Kodiak,
Alaska, and is open for business from 8:00 a.m. to 5:00 p.m., Monday through
Friday. Acceptance of Special Delivery mail is not available Saturday, Sunday,
or holidays. It shall be the responsibility of the proposer to assure that his
proposal is delivered to the Manager's Office prior to the submittal deadline.
4. ALTERNATE PROPOSALS
4.1. Alternate proposals will not be considered unless specifically requested and
approved.
5. FAX OR EMAIL SUBMITTAL NOT ACCEPTABLE
5.1. Fax or email submittal of a proposal is not acceptable.
6. WITHDRAWAL, MODIFICATION, OR CORRECTION
6.1. After depositing a proposal, a proposer may withdraw, modify, or correct his
proposal, providing the Manager's Office receives the request for such
withdrawal, modification, or correction before the time set for submittal
deadline. The original proposal, as modified by such written communication,
will be considered as the proposal. No proposer will be permitted to withdraw
his proposal after the time set for submittal deadline.
7. LATE PROPOSALS
7.1. Late proposals are proposals received after the time and date set for submittal
deadline. Proposals will be received during the period and at the place stated
on the RFP Cover Sheet. It is the sole responsibility of the proposer to see that
his proposal is submitted in time. Any proposal received after the scheduled
opening time will not be considered, but will be held unopened in the file,
unless other disposition is requested or agreed to by the proposer. Other
disposition will not take place until after award.
8. RESPONSIBILITY TO KEEP INFORMED
8.1. It is the potential proposer's responsibility to keep informed. Failure to do so
may result in a proposal being declared non-responsive.
9. PRICES
9.1. The proposer shall state prices in terms of estimated hours and the applicable
rate on this RFP. Prices quoted for services must be in U.S. funds and include
applicable duties, fees, and costs so that the services can be provided, without
further cost. Prices quoted in proposals must be exclusive of federal, state and
local taxes. If the proposer believes that certain taxes are payable by the
Borough, the proposer may list such taxes separately, directly below the price
for the affected item.
Page 6 of 34
10. VENDOR TAX ID NUMBER
10.1. If services procured through this RFP must be included on a 1099 -NEC tax
form, as described in the Internal Revenue Code, a valid taxpayer identification
number must be provided to the Borough before payment will be made.
11. FIRM OFFER
11.1. Offers made in response to this RFP must be good and firm for a period of
ninety (90) days from the date of submittal deadline.
12. EXTENSION OF PRICES
12.1. In the case of error in the extension of prices in the proposal, the unit price will
govern.
13. PROPOSAL PREPARATION COSTS
13.1. The Borough is not liable for any costs incurred by the proposer in proposal
preparation.
13.2. The Borough shall not be liable for any cost incurred by any firm in response to
this solicitation.
14. CONTRACT FUNDING
14.1. Borough funds are in the proposed budget for FY 2023. Payment and
performance obligations for this work and/or contract renewals are subject to
the availability and appropriation of funds.
15. RIGHT TO REJECT AND NOT AWARD
15.1. The Borough may acceptor reject any and all proposals.
15.2. The Borough reserves the right to not award the proposed agreement, if it is in
the Borough's best interest.
16. EQUAL OPPORTUNITY
16.1. The Borough is an Affirmative Action/ Equal Opportunity Employer.
16.2. The Borough, and all contractors, vendors, and suppliers, agree and certify that
they shall comply with the requirement of all pertinent Federal and State laws
relating to equal opportunity in contracting and procurement activities.
Page 7 of 34
17. SUBMITTAL FORMAT REQUIREMENTS
17.1. Proposers are advised that, notwithstanding any instructions or inferences
elsewhere in this Request for Proposal, only the documents shown in this
section need be submitted with and made part of their proposal. Other
documents may be required after the submittal deadline, but prior to award.
Proposers are advised that failure to submit the documents shown in this
section and return the forms in the condition indicated SHALL RENDER THE
PROPOSAL NON-RESPONSIVE.
17.2. To achieve a uniform review process and obtain the maximum degree of
comparability, proposals will not be considered if the following documents
and/or attachments are materially deficient or not provided in the condition
indicated, and organized in the manner specified below:
Title Page/Cover Sheet: Complete the first page of this RFP. Be sure all
blanks are filled and accurate. Show the name of your firm, local address,
telephone number, name of contact person and date. Signature must be
original.
Table of contents: Clearly identifies the material in your proposal by section
and page number.
Acknowledgments: Use the form supplied in Attachment A. Signature must
be original and the acknowledgment form must be properly filled out.
Letter of transmittal: Limit to one or two print pages. Briefly state your firm's
understanding of the work to be done and of the organization and its accounting
environment. Give the names of the persons who will be authorized to make
representations for your firm, their titles, addresses, and telephone numbers.
Letter of intent for insurance coverage: Submit a letter of intent indicating
how you will meet the insurance and/or bonding requirements of this RFP
(section 19). Failure to provide a detailed description, or acceptable coverage,
may result in the proposal being declared non-responsive
Profile of the audit organization, technical qualifications, and approach:
Firms submitting proposals must have an Alaskan decision-making office.
Please state whether your audit organization is national, regional, or local.
Indicate the number of people (by level) located within the Alaskan office that
will handle the audit.
Provide a list of the Alaskan office's current and prior government audit clients
(borough and school district accounts, other local governments, federal and/or
state single audits, grant compliance audits), including telephone number and
contact person's name, indicating the type(s) of services performed, and the
number of years served for each.
Indicate the Alaskan office's experience in providing additional services to
government clients by listing the name of each government, the type(s) of
service performed, and the year(s) of engagement.
Page 8 of 34
Describe your audit organization's quality control program for audits and
whether your audit organization has been the object of any disciplinary action
during the past three years. Include a copy of the report on the results of your
most recent peer review with your proposal.
Describe your approach to the audit. This should include at least the following
points:
• Type of audit program used (tailor-made, standard government, or
standard commercial)
• Use of statistical sampling
• Use of analytical procedures
• Approach for obtaining your understanding of internal control and for
assessing control risk
• Approach for determining which laws and regulations should be tested for
compliance and how samples will be drawn
• Use of computer audit specialists
• Organization of audit team and approximate percentage of time spent on
audit at each staff level
• Management letter (provide a sample letter)
• Typical assistance expected from the Borough and School District staff
• Tentative timetable outline for completing the audit within specified
deadlines of the RFP
Summary of the proposer's individual audit staff technical qualifications
Identify the partners, managers, and supervisors/seniors who will work on the
audit, including any staff from other than the Alaskan office. Include resumes
for each supervisory person to be assigned to the audit. (The resumes may be
included as an appendix.) Describe the experience in local government audits,
including federal and state single audits, and grant compliance audits of each
senior and higher-level person assigned to the audit, including years on each
job and their position while on each audit. Indicate the percentage of time the
senior and supervisor/manager will be on-site.
Describe your program to ensure staff maintains professional proficiency
through continuing education and training. Describe the relevant educational
background of each individual assigned to the audit. This should include
seminars and courses attended within the past three years and any
governmental accounting and auditing during the last two years.
Explain your policies on notification of changes in key personnel
Page 9 of 34
Cost proposals All proposals shall include the following for both the Borough
and the School District:
• Number of audit person days by level (Person Day = 8 Hours)
• Cost per person day
• Total person days cost
• Travel cost
• Other cost, if any
• Total cost
Cost proposals must be summarized by filling in each line for the Cost Proposal
Schedule, Attachment B, and all proposals shall follow the format on the Cost
Proposal Schedule with respect to price quotations.
Award will be influenced by the sum of the total cost for the five years but will
also be based on factors outlined in section 26, Evaluation Criteria.
Prices shall be firm and open for acceptance by the Borough for a period of not
less than ninety (90) calendar days from the date the proposal is due. Prices
proposed shall be firm for the audited years June 30, 2022 through June 30,
2026. All prices and quotations shall be written legibly by printer or pen and
ink. A proposal shall be rejected if it contains a material alteration or erasure
which is not initialed by the signer of the proposal.
Rate schedule for potential additional engagement(s): Proposers must fill in
each line on the Rate Schedule for Potential Additional Engagement(s),
Attachment C.
Prices shall be firm and open for acceptance by the Borough for a period of not
less than ninety (90) calendar days from the date the proposal is due. Prices
shall be firm for the period June 30, 2022 through June 30, 2026. All prices and
quotations shall be written legibly by computer or pen and ink. A proposal shall
be rejected if it contains a material alteration or erasure which is not initialed by
the signer of the proposal.
References: Proposers must submit references as outlined in section 28,
Evaluation Criteria.
17.3. Erasures or other changes made to the proposal must be initialed by the
person signing the proposal. "White Out" or other liquid correction methods
must be initialed.
17.4. All amendments that require acknowledgment shall be acknowledged in the
space provided on a copy of Attachment A by original signature.
Acknowledgment of amendments must be submitted prior to the submittal
deadline.
Page 10 of 34
18. CONTRACT NEGOTIATION
18.1. The Borough, consistent with KIBC 3.30.110(E) may choose to clarify
proposals through negotiation with qualified proposers or may offer the contract
to the highest ranked proposer without further clarification. If the top ranked
proposer fails to enter into the contract, the Borough may proceed to the next
highest ranked proposer. The contract shall be substantially in the form
attached as Attachment D. Proposers shall note any exceptions to the
proposed contract form,
19. INSURANCE REQUIREMENTS
If you are unsure if your firm will be able to provide the insurance described in this
section, please contact your insurance broker or agent before you submit your proposal.
A letter of intent to meet insurance requirements must be included in the proposal
(section 17.2).
19.1. Before beginning work on a contract awarded as a result of this RFP, the
contractor shall obtain all required insurance and the Borough shall receive and
review the certificates of insurance. If the contractor is a joint venture, then the
joint venture itself must have insurance as specified below. All insurance
companies providing coverage must be rated "Superior" or "Excellent" by A.M.
Best Company.
19.2. The contractor shall assure that there is insurance in force, which provides
protection for the Borough from any claim, which might arise from the
contractor's work under the contract. This insurance shall provide protection
whether the work is performed by the contractor, by any sub -contractor, or by
their employees, agents, successors, or assigns.
19.3. Workers' compensation insurance as required by law.
19.4. Commercial general liability insurance with a limit of not less than $1,000,000
per occurrence is required. The contractor shall add the Borough as an
additional insured in the contractor's commercial general liability policy.
19.5. Valuable papers and electronic data processing (EDP) coverage in an amount
sufficient to reconstruct the work done under this contract, but in no event less
than $10,000 is required.
19.6. Professional liability insurance in the amount of $1,000,000 is required.
19.7. The Borough shall have the right at any time to require higher limits for public
liability and property damage insurance. In any such event, the additional
premium or premiums payable solely as the result of such additional insurance
shall be added by amendment to the contract price.
Page 11 of 34
19.8. The contractor shall furnish the Borough with Certificates of Insurance in a form
acceptable to the Borough to certify insurance coverage. The contractor shall
cause the insurance policies referred to therein to include a provision that while
the contract shall remain in force, no such policy shall be canceled, not
renewed, or materially altered until at least thirty (30) days written notice
thereof has been given to the Borough.
20. CONTRACT SPECIFICATIONS
20.1. This request for proposal, including any amendments, and the technical and
cost proposals shall become a part of the contract.
20.2. Proposals are requested for the following contract period:
• Contract will end with the completion of the 2025-2026 fiscal years' audit,
but not later than January 15, 2027.
20.3. After the initial one-year award, this contract may be renewed for two additional
two-year periods at the Borough's discretion.
20.4. The Borough requires that the entire audit engagement be a fixed fee contract
to include all expenses. No additional fees or costs will be allowed unless
requested as part of the 60 hours of non -audit consulting time or additional
engagements in accordance with section 244, Potential Additional
Engagement(s).
20.5. Any additional fees/costs so authorized for additional financial work must be
expressed as a fixed hourly rate for each fiscal year subject to audit, quoted for
each staff category of the proposer (see Attachment C) and that the detail of
the costs be disclosed.
20.6. A separate purchase order will be issued for each fiscal year's audit. Payment
will be made upon receipt of monthly invoices, billed on a percentage -of -
completion basis, less 15% retainage, with final payment to be rendered upon
receipt and final invoice for the contracted services. Costs must be detailed for
1) the Borough audit, 2) the Borough single audit requirements, 3) the School
District audit and Department of Education and Early Development compliance
requirements, 4) the School District single audit requirements, 5) Borough non -
audit consultation, and 6) School District non -audit consultation.
20.7. For any additional engagements, a separate purchase order shall be issued for
each. Payment will be made upon receipt of monthly invoices, with final
payment to be rendered after satisfactory completion of the engagement and
upon receipt and final invoice for the additional engagement services.
21. CURRENT AND FUTURE ENVIRONMENT
21.1. Current Accounting Environment —Borough
Page 12 of 34
21.1.1. GOVERNMENTAL FUNDS
General Fund The general fund is the general operating fund of the
Borough. It is used to account for all financial resources except those
required to be accounted for in another fund.
Special Revenue Funds Special revenue funds are used to account for
the proceeds of specific revenue sources (other than major capital
projects) that are legally restricted to expenditures for specified purposes.
There are currently 18 Special Revenue Funds.
Of the 18 Special Revenue funds, there are 11 service areas that have
been established by certain communities or neighborhoods within the
Borough for purposes of providing certain services not otherwise
exercised on an area wide or non -area wide basis. These services are:
road maintenance and construction, fire protection, tide gate, and
streetlights. The revenues for these services are provided by local
taxation and state shared revenue. The Borough is restricted from using
area wide revenues for service area expenditures.
Debt Service Fund The debt service fund is used to account for the
accumulation of resources for, and the payment of, principal, interest, and
related costs for the Borough's general obligation bonds. Debt service
requirements are funded by property tax revenues and by state funded
reimbursements for school construction debt.
Capital Projects Funds Capital projects funds are used to account for
financial resources to be used for the acquisition or construction of major
capital facilities and equipment.
21.1.2. PROPRIETARY FUNDS
Enterprise Funds Enterprise funds are used to account for operations
that are financed and operated in a manner similar to private business
enterprises: a) where the intention of the governing body is that the costs
of providing goods or services to the general public on a continuing basis
be financed or recovered primarily through user charges, or b) where the
governing body has decided that periodic determination of revenues
earned, expenses incurred, and/or net income is appropriate for capital
maintenance, public policy, management control, accountability, or other
purposes. The Borough has six (6) enterprise funds: Solid Waste
Disposal & Collection, Hospital, Long -Term Care, Kodiak Fisheries
Research Center, Research Court Apartments, and 911 Service.
Page 13 of 34
21.2. Current Data Processing Equipment and Software - Borough
The Information Technology department is responsible for the computer
systems that process all financial transactions of the Borough. The Borough
employees have Windows 10 computers networked together with a 1 Gbps
switched Ethernet network utilizing the TCP/IP protocol. Remote sites are
linked through fiber -optics, metro -Ethernet or VPN connections. Our financial
system runs on Windows x64 servers, hosted in a virtualized environment. We
use New World Systems/Tyler Technologies' Logos.NET software for our
financial software. Our tax accounting software is PACS, from True
Automation/Harris Software. We currently use Microsoft Office 365 for our
productivity software.
21.3. Assessing Department's Real Property Appraisal System
PACS Appraisal software was acquired through its parent company True
Automation, Inc. The license became active July 1, 2008 and systems use
began in January of 2009. Vendor support is purchased on a year-to-year
basis, and the PACS software is updated when applicable.
PACS Appraisal maintains real and personal property ownership,
assessments, exemptions and attributes. PACS Collection software works in
conjunction with PACS Appraisal and is the software used in the Finance
Department for tax accounting and collections.
21.4. The Internet
The Borough has an internet web site. Our site currently contains a page of
information for each of our departments and functions. One of the most
popular areas of the site is the Map Center, which includes GIS information. In
addition, the site contains the Borough's Codes, Assembly Agendas,
Newsletters, and Meeting Minutes. Our current site can be viewed at
http://www.kodiakak.us.
21.5. Current PC -Based Financial Systems - Borough
21.5.1. BUDGET
The Borough's budget is prepared using the .NET version of New World
Systems financial system. All statistical data presented to the public is
available in Microsoft Excel. Workbooks are developed at the department
level and linked to create a summary level budget. At the summary level,
the budget can be presented by fund or for the Borough as a whole.
Textual portions of the budget are done in Microsoft Word. The public
may request to be given a copy or it can be found on our web site.
21.5.2. FINANCIAL STATEMENTS
The Borough's financial report is prepared using the .NET version of New
World Systems financial system. The public may request to be given a
copy.
Page 14 of 34
21.6. Current Accounting Environment - School District
21.6.1. GOVERNMENTAL FUNDS
General Fund This is the School District's general operating fund and is
used to account for all financial transactions except those required to be
accounted for in another fund. Major revenue sources include the
Borough's contribution to education, the State of Alaska public school
foundation program, and other state and federal revenues. Expenditures
are authorized in the annual budget and are made for such activities as
student instruction, administration, and maintenance.
Special Revenue Funds These funds are used to account for the
proceeds of specific revenue sources that are legally restricted to
expenditures for specified purposes. The School District maintains a
separate cost center for each federal and state grant program. These
cost centers are assigned to the appropriate special revenue funds based
on their purpose and funding source.
Capital Projects Funds These funds are used to account for those
financial resources to be used for acquisition, construction, and major
maintenance of facilities and equipment. The Borough accounts for most
acquisition, construction, and major maintenance projects of school
facilities. The School District accounts for projects related to the
acquisition of furnishings and equipment.
21.6.2. FIDUCIARY FUND
Agency Fund This fund is used to account for the assets held by the
School District as an agent for various student organizations.
21.7. Current Data Processing Equipment and Software - School District
The School District currently runs the financial system Infinite Visions
which is accessed through the cloud. No servers are housed onsite.
Infinite Visions is comprised of integrated financial, human resources,
payroll, purchasing, warehouse, and fixed asset applications. Designed
specifically for schools, Infinite Visions is a true K-12 multi -fund, modified
accrual accounting system, both GAAP and GASB compliant
• EMS (employee management system)
• Payroll
• FAS (fixed assets system)
• Equipment inventory
• WHS (warehouse inventory system)
• Receiving & Issues
• Central stores supplies, Food services & USDA
commodities inventories.
• FMS (financial management system)
Page 15 of 34
• General Ledger
• Accounts Payable
• Cash Disbursements
• Purchase order processing
• Cash receipts
• Report writers
21.8. Current PC -Based Financial Systems - School District
21.8.1. BUDGET
All budget reports are generated through Infinite Visions but can be
exported to excel.
21.8.2. FINANCIAL STATEMENTS
All financial reports are generated through Infinite Visions but can be
exported to excel.
22. ADDITIONAL INFORMATION
22.1. Copies of the following documents of each entity will be available:
KIB 2020-2021 Annual Comprehensive Financial
Report
KIB 2020-2021 Single Audits and other compliance
reports
KIB 2020-2021 Approved Budget
KIBSD 2020-2021 Annual Comprehensive Financial
Report, including single audits and
other compliance reports
KIBSD 2020-2021 Approved Budget
23. ENGAGEMENT REQUIREMENTS
23.1. Financial Statements and Compliance Statements - Borough
23.1.1. SCOPE OF WORK TO BE PERFORMED
The Kodiak Island Borough desires the auditor to express an opinion on
the fair presentation of its general-purpose financial statements in
conformity with generally accepted accounting principles.
Page 16 of 34
The Borough also desires the auditor to express an opinion on the fair
presentation of its combining and individual fund and account group
financial statements and schedules in conformity with generally accepted
accounting principles. The auditor is not required to audit the supporting
schedules contained in the Annual Financial Report. The auditor is not
required to audit the statistical section of the report.
The auditor is required to report on compliance with applicable state and
with applicable federal laws and regulations and on internal controls over
financial reporting that could have a material effect on the fair
presentation of the financial statements.
The auditor is required to test internal controls and compliance, as
described in the U.S. Office of Management and Budget (OMB) Circular
A-133 Compliance Supplement that are applicable to each of the
Borough's major federal programs. The auditor is also required to test
internal controls and compliance, as described in the State of Alaska
Audit Guide and Compliance Supplement for State Single Audits that are
applicable to each of the Borough's major state programs. The auditor
must report on compliance and internal control over compliance
applicable to each major federal and to each major state program.
The auditor is not required to audit the schedules of expenditures of
federal and state awards.
The auditor is required to report any findings or questioned costs found in
the course of the work described above. Findings must be reported in
three separate categories: 1) those affecting financial reporting, 2) those
affecting major federal programs, and 3) those affecting major state
programs. Recommendations for corrective action should be included.
The auditor shall also be responsible for performing certain limited
procedures, for Management's Discussion and Analysis and for other
Required Supplementary Information required by the Governmental
Accounting Standards Board, as mandated by generally accepted
auditing standards.
23.1.2. AUDITING STANDARDS TO BE FOLLOWED
To meet the requirements of this request for proposal, the audit shall be
performed in accordance with generally accepted auditing standards as
set forth by the American Institute of Certified Public Accountants, the
standards for financial audits set forth in the U.S. General Accounting
Office's Government Auditing Standards, the provisions of U.S. Office of
Management and Budget (OMB) Circular A-133, Audits of States, Local
Governments, and Non -Profit Organizations, and the provisions of the
State of Alaska Single Audit Regulation (2AAC 45.010), to include the
State of Alaska Audit Guide and Compliance Supplement for State Single
Audits.
Page 17 of 34
23.1.3. REPORTS TO BE ISSUED
Reports shall be written in accordance with generally accepted auditing
standards as set forth by the American Institute of Certified Public
Accountants, the standards for financial audits set forth in the U.S.
General Accounting Office's Government Auditing Standards, the
provisions of U.S. Office of Management and Budget (OMB) Circular A-
133, Audits of States, Local Governments, and Non -Profit Organizations,
and the provisions of the State of Alaska Single Audit Regulation (2 AAC
45.010), to include the State of Alaska Audit Guide and Compliance
Supplement for State Single Audits.
Following the completion of the audit of the fiscal year's financial
statements, the auditor shall issue:
• A report on the fair presentation of the financial statements in
conformity with generally accepted accounting principles.
• For federal purposes, a report on compliance and on internal control
over financial reporting based on an audit of the financial statements
performed in accordance with Government Auditing Standards.
• An "in -relation -to" report on the Schedule of Expenditures of Federal
Awards, along with a report on compliance with requirements
applicable to each major program and on internal control over
compliance in accordance with OMB Circular A-133.
• A Schedule of Findings and Questioned Costs summarizing auditor
results for a federal single audit, along with recommendations for
corrective action.
• Accounting assistance will be required for preparation of the Annual
Comprehensive Financial Report (ACFR). This will be included in the
lump sum cost for audit services.
In the required state and federal reports on compliance and on internal
controls over financial reporting and on the state and federal reports on
compliance with requirements applicable to each major program, the
auditor shall communicate any reportable conditions found during the
audit. A reportable condition shall be defined as a significant deficiency in
the design or operation of internal control, which could adversely affect
the Borough's ability to record, process, summarize, and report financial
data consistent with the assertions of management in the financial
statements.
Reportable conditions that are also material weaknesses shall be
identified as such in the report.
Nonreportable conditions discovered by the auditors shall be reported in a
separate letter to management, which shall be referred to in the report on
internal controls.
Page 18 of 34
The report on compliance with requirements to each major assistance
program shall include all material instances of noncompliance. All
nonmaterial instances of noncompliance shall be reported in a separate
management letter, which shall be referred to in the report on compliance.
Fraud and Illegal Acts. Auditors shall be required to make an
immediate, written report of all irregularities and illegal acts or indications
of illegal acts of which they become aware. This notification should be
made in accordance with Statements of Auditing Standards No. 54 and
No. 99, and with the U.S. General Accounting Office's Government
Auditing Standards.
23.1.4. REPORT DEADLINES
The opinion on the financial statements of the Borough for the fiscal years
ending June 30 is to be submitted by November 15 for each year of the
engagement, unless adjusted by mutual agreement.
The reports required for the federal Single Audit Act, as amended in
1996, and the state single audit regulation are to be submitted by
December 15 for each year of the engagement, unless adjusted by
mutual agreement.
23.1.5. SPECIAL CONSIDERATIONS
The Kodiak Island Borough will send its Annual Comprehensive Financial
Report to the Government Finance Officers Association for review in its
Certificate of Achievement for Excellence in Financial Reporting program.
The auditor may be required to provide limited special assistance to the
Kodiak Island Borough to meet the requirements of that program. Any
fees for this assistance are outside the scope of the audit and will be
billed as additional engagement work at the rates in Attachment C.
The Kodiak Island Borough may prepare one or more official statements
in connection with the sale of debt securities, which may contain the
general-purpose financial statements and the auditor's report thereon.
The auditor shall be required, if requested by the financial advisor and/or
the underwriter, to issue a "consent and citation of expertise" as the
auditor and any necessary "comfort letters".
The schedules of expenditures of federal and state awards the related
auditor's reports, as well as the federal and state reports on compliance
and on internal control over financial reporting and on compliance with
requirements applicable to each major program and on internal control
over that compliance are not to be included in the Annual Comprehensive
Financial Report but are to be issued separately.
Page 19 of 34
23.1.6. WORKING PAPER RETENTION AND ACCESS TO WORKING PAPERS
All working papers and reports must be retained, at the auditor's expense,
for a minimum of three (3) years from the end of the audited period,
unless the firm is notified in writing by the Borough of the need to extend
the retention period. The auditor will be required to make working papers
available, upon request, to the following parties or their designees:
• Kodiak Island Borough
• Parties designated by the federal or state governments or by the
Kodiak Island Borough as part of an audit quality review process
• Auditors of entities of which the Kodiak Island Borough is a sub
recipient of grant funds
In addition, the firm shall respond promptly and fully to the reasonable
inquires of successor auditors. The firm shall allow successor auditors to
review working papers, including documentation of planning, internal
control, audit results, and other matters of continuing accounting and
auditing significance.
23.2. Financial Statements and Compliance Statements — School District
23.2.1. SCOPE OF WORK TO BE PERFORMED
The Kodiak Island Borough School District desires the auditor to express
an opinion on the fair presentation of its general-purpose financial
statements in conformity with generally accepted accounting principles.
The School District also desires the auditor to express an opinion on the
fair presentation of its combining and individual fund schedules in
conformity with generally accepted accounting principles (i.e., a "full -
scope" audit). The auditor is not required to audit the supporting
schedules contained in the Annual Comprehensive Financial Report. The
auditor is not required to audit the statistical section of the report.
The auditor is required to report on compliance with applicable state and
with applicable federal laws and regulations and on internal controls over
financial reporting that could have a material effect on the fair
presentation of the financial statements.
The auditor is required to test internal controls and compliance as
described in the U.S. Office of Management and Budget (OMB) Circular
A-133 Compliance Supplement that are applicable to each of the School
District's major federal programs. The auditor is also required to test
internal controls and compliance, as described in the State of Alaska
Audit Guide and Compliance Supplement for State Single Audits that are
applicable to each of the School District's major state programs. The
auditor must report on compliance and internal control over compliance
applicable to each major federal and to each major state program.
Page 20 of 34
The auditor is not required to audit the schedules of expenditures of
federal and state awards.
The auditor is required to report any findings or questioned costs found in
the course of the work described above. Findings must be reported in
three separate categories: 1) those affecting financial reporting, 2) those
affecting major federal programs, and 3) those affecting major state
programs. Recommendations for corrective action should be included.
The auditor shall also be responsible for performing certain limited
procedures, for Management's Discussion and Analysis and for other
Required Supplementary Information required by the Governmental
Accounting Standards Board, as mandated by generally accepted
auditing standards.
23.2.2. AUDITING STANDARDS TO BE FOLLOWED
To meet the requirements of this request for proposal, the audit shall be
performed in accordance with generally accepted auditing standards as
set forth by the American Institute of Certified Public Accountants, the
standards for financial audits set forth in the U.S. General Accounting
Office's Government Auditing Standards, the provisions of U.S. Office of
Management and Budget (OMB) Circular A-133, Audits of States, Local
Governments, and Non -Profit Organizations, and the provisions of the
State of Alaska Single Audit Regulation (2AAC 45.010), to include the
State of Alaska Audit Guide and Compliance Supplement for State Single
Audits.
23.2.3. REPORTS TO BE ISSUED
Reports shall be written in accordance with generally accepted auditing
standards as set forth by the American Institute of Certified Public
Accountants, the standards for financial audits set forth in the U.S.
General Accounting Office's Government Auditing Standards, the
provisions of U.S. Office of Management and Budget (OMB) Circular A-
133, Audits of States, Local Governments, and Non -Profit Organizations,
and the provisions of the State of Alaska Single Audit Regulation (2 AAC
45.010), to include the State of Alaska Audit Guide and Compliance
Supplement for State Single Audits.
Following the completion of the audit of the fiscal year's financial
statements, the auditor shall issue:
A report on the fair presentation of the financial statements in
conformity with generally accepted accounting principles.
• For federal purposes, a report on compliance and on internal control
over financial reporting based on an audit of the financial statements
performed in accordance with Government Auditing Standards.
Page 21 of 34
• An "in -relation -to" report on the Schedule of Expenditures of Federal
Awards, along with a report on compliance with requirements
applicable to each major program and on internal control over
compliance in accordance with OMB Circular A-133.
• A Schedule of Findings and Questioned Costs summarizing auditor
results for a federal single audit, along with recommendations for
corrective action.
• For state purposes, a report on compliance and on internal control
over financial reporting based on an audit of the financial statements
performed in accordance with Government Auditing Standards.
• An "in -relation -to" report on the Schedule of Expenditures of State
Awards, along with a report on compliance with requirements
applicable to each major program and on internal control over
compliance in accordance with the State of Alaska Audit Guide and
Compliance Supplement for State Single Audits.
The auditors must send out these reports for the School District:
• A report on fund balance compliance requirements, in accordance
with AS 14.17.505. A report on the fair presentation of the tuition rate
report, in accordance with Alaska Department of Education and Early
Development instructions for Form 05-00-014.
• One copy of the General -Purpose Financial Statement for each state
agency listed on either the schedule of state financial assistance or
Federal Awards should be sent to the Statewide Single Audit
Coordinator, Office of Management & Budget.
• One copy of the General -Purpose Financial Statement should be sent
to the State of Alaska, Department of Administration, Division of
Finance. Their report should also include the Tuition Rate Report and
Management Letter
• Two copies of the General -Purpose Financial Statement will be sent
to the Federal Audit Clearing House. It will also include the Data
Collection Form for Reporting on Audits of States, Local Governments
and Nonprofit Organizations (Form SF -SAC) which the auditors have
prepared.
Five additional copies each of the General -Purpose Financial Statement,
Management Letter, Letter to the School Board and two (2) copies of the
Tuition Rate Report sent to the School District along with an electronic
version of all reports.
Page 22 of 34
In the required state and federal reports on compliance and on internal
controls over financial reporting and on the state and federal reports on
compliance with requirements applicable to each major program, the
auditor shall communicate any reportable conditions found during the
audit. A reportable condition shall be defined as a significant deficiency in
the design or operation of internal control, which could adversely affect
the School District's ability to record, process, summarize, and report
financial data consistent with the assertions of management in the
financial statements.
Reportable conditions that are also material weaknesses shall be
identified as such in the report.
Nonreportable conditions discovered by the auditors shall be reported in a
separate letter to management, which shall be referred to in the report on
internal controls.
The report on compliance with requirements to each major assistance
program shall include all material instances of noncompliance. All
nonmaterial instances of noncompliance shall be reported in a separate
management letter, which shall be referred to in the report on compliance.
Fraud and Illegal Acts. Auditors shall be required to make an
immediate, written report of all irregularities and illegal acts or indications
of illegal acts of which they become aware. This notification should be
made in accordance with Statements of Auditing Standards No. 54 and
No. 99, and with the U.S. General Accounting Office's Government
Auditing Standards.
23.2.4. REPORT DEADLINES
Opinions on the financial statements of the School District and on reports
required by the Alaska Department of Education and Early Development
for the fiscal years ending June 30 are to be submitted by October 1 for
each year of the engagement, unless adjusted by mutual agreement.
The reports required for the federal Single Audit Act, as amended in
1996, the state single audit regulations, and the applicable state statutes
and regulations of the Alaska Department of Education and Early
Development are to be submitted by October 1 for each year of the
engagement, unless adjusted by mutual agreement.
23.2.5. WORKING PAPER RETENTION AND ACCESS TO WORKING PAPERS
All working papers and reports must be retained, at the auditor's expense,
for a minimum of three (3) years from the end of the audited period,
unless the firm is notified in writing by the or School District of the
need to extend the retention period. The auditor will be required to make
working papers available, upon request, to the following parties or their
designees:
• Kodiak Island Borough and Kodiak Island Borough School District
Page 23 of 34
• State Department of Education and Early Development and U.S.
Department of Education
• Parties designated by the federal or state governments or by the
Borough or School District as part of an audit quality review process
• Auditors of entities of which the Kodiak Island Borough School District
is a subrecipient of grant funds
In addition, the firm shall respond promptly and fully to the reasonable
inquires of successor auditors. The firm shall allow successor auditors to
review working papers, including documentation of planning, internal
control, audit results, and other matters of continuing accounting and
auditing significance.
23.3. Peer Reviews
The firm shall provide copies of their peer reviews as they are performed during
the term of the contract.
23.4. Management Letters
The auditor shall observe the adequacy of the systems of internal control,
accounting procedures, and other significant matters. Upon the request any
appropriate recommendations may be reviewed with management and included
in separate letters to the Borough Manager and Assembly, and to the
Superintendent and School Board.
Interim management letters on improvements in controls and procedures for the
Borough and School District will be submitted within three weeks of interim
fieldwork for each year. Final management letters for the Borough and School
District will be submitted by December 15 and September 30, respectively, of
each year, unless adjusted by mutual agreement. The auditor will meet at least
semi-annually with the Assembly and School Board, or with designated
Committee(s), for the purpose of reviewing the interim and/or final management
letters.
23.5. Presentations
As early as possible after the statements have been printed, the appropriate
financial reports, compliance reports, and the management letters are to be
reviewed with a designated committee of the School District and with the
Borough's audit committee. Then they are to be presented to the School Board
and to the Assembly at a regular meeting, respectively. The audit partner
assigned to the engagement should be in attendance, if requested to be present.
23.6. Non -Audit Consultation Time
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24.
The scope of the audit must also include consulting time up to 60 hours annually
on subjects such as reviewing official statements for general obligation bond
sales or other financial matters. It is anticipated that these hours would be at the
level of a partner or manager. (This is in addition to consultations on matters
directly relating to the audit and reports which should be included in the audit
portion of the proposer's fixed fee.) Hours for non -audit consultation must be
approved in advance (see section 23.7) and must be shown separately on
invoices (see section 20.6).
23.7. Coordination Required
The Borough requires that the external auditors coordinate their work with
Borough and School District personnel as follows:
• All work will be coordinated with the Borough Finance Director and the
School District Chief Financial Officer or their designated appointee to
facilitate staff scheduling and year-end closing.
• The external auditors will develop schedules for the work required for the
conduct of the audit. The Borough schedule will be coordinated with the
Borough Finance Director. The School District schedule will be coordinated
with School District Chief Financial Officer. The schedules will outline the
requirements for the Borough and/or School District and external audit staff.
• By March 31 (School District) and by April 30 (Borough), a tentative time
schedule for conduct of interim and year-end fieldwork and for other
engagement aspects shall be delivered to each entity for their approval.
These dates may be adjusted by mutual agreement.
• Progress reports will be provided on a biweekly basis during the conduct of
the fieldwork and until all opinions, reports, and management letters are
delivered. The reports should be addressed and sent to the Borough Finance
Director and the School District Chief Financial Officer. The reports should
indicate any problems encountered or foreseen, deficiencies in work being
performed by Borough or School District staff, disagreements of the
application of accounting principles, and other items, which would result in
delay of the audit work or in additional work.
By June 30 (School District) and July 31 (Borough) each year, establish in
writing, an example format of each audit work paper and the financial and
compliance statements to be required for each entity. These dates may be
adjusted by mutual agreement.
Use of the 60 non -audit consultation hours must be approved, in writing, in
advance by the Chief Financial Officer (School District) or by the Finance
Director (Borough).
POTENTIAL ADDITIONAL ENGAGEMENT(S)
24.1. The Borough and/or School District may request additional services over the
course of the contract. The additional engagement(s) will be approved and
billed separately.
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Consultation hours in excess of the 60 hours, described at section 23.6 will
be considered an additional engagement.
• Each additional engagement must be approved, in writing, in advance by:
School District
1. Superintendent, or
2. Chief Financial Officer, or
3. their designee
Borough
1. Manager, or
2. Finance Director, or
3. their designee
25. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION
25.1. The Borough Finance Department staff, the School District Business Office
staff, and responsible management personnel will be available during the audit
to assist the auditor by providing information, documentation, and explanations.
The preparation of confirmations and legal letters will be the responsibility of
the Borough and School District, respectively.
25.2. The Borough and School District will prepare standard audit work papers,
electronically if requested, in formats agreed upon with the external auditors.
25.3. The auditor will have on-line, inquiry access to the primary financial systems of
each entity, if requested.
25.4. The Borough and School District will provide the auditor with reasonable
workspace, desks, and chairs. The auditor will also be provided with access to
a telephone, internet, photocopying facilities, and facsimile machine.
25.5. Long distance use of the telephone and FAX machine will be limited to work on
this engagement. Usage for other clients must be reimbursed by the auditor to
the Borough or School District, as appropriate.
25.6. Preparation, editing, and printing of the drafts and final Annual Comprehensive
Financial Reports, Single Audit Reports, and other compliance reports will be
the responsibility of the auditors.
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26. EVALUATION CRITERIA
The Borough will review proposals to provide the services through evaluation of
requirements defined as mandatory and as desirable. These requirements are intended
to aid the Borough in assessing a proposer's technical, administrative, and historical
abilities to provide similar quality services in a timely manner.
26.1. Mandatory Requirements
Alaska CPA Firm The firm must be authorized to use the term "Certified Public
Accountants" or "CPA" as set forth by the Accountancy Act (AS 08.04).
Expertise Requirements Firm personnel must have experience and expertise in
governmental accounting and state and federal single audit requirements.
Timely Performance The Borough is interested in both the firm's ability to, and
history of, conforming to deadline requirements on significant engagements.
Therefore, the Borough has the following two requirements:
Firm Size - The firm must be of a sufficient size that the audit can be
conducted in a timely manner, including any escalation because of a one -
to -three-week delay in the Borough's or School District's schedule for
providing materials.
Firm Adherence to Deadline Requirements - The firm must have a
history of conforming to deadline requirements on significant
engagements. Therefore, the Borough will require submission of
references with contact names and phone numbers for client
engagements of over 700 hours served by the proposer within the last
three years. These references should be persons who can and will
comment on performance in this area. These people will be contacted to
verify the firm's performance in meeting audit submission deadlines.
EDP Expertise Due to the significance of the computerized accounting
processes currently used at the Borough and School District, an ability to
evaluate computer systems and the level of reliance to be placed thereon is a
requirement of the Borough's external auditors. A mandatory requirement is
experience and expertise in performing such evaluations.
Conformance with Fixed Fee
Projected Hours - In order to determine the proposer's ability to conform
to the fixed fee set forth, the Borough requires that the hours of audit work
for each major segment of the work, by staff level, be disclosed in the
technical proposal. This is to aid in determining that the engagement has
been reasonably planned and therefore, that the fixed fee can be
reasonably adhered to by the proposer.
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Firm's Adherence to Fixed Fee Contracts - The Borough is interested
in the firm's history in conforming to fixed fee contracts and therefore,
requires references with contact names and telephone numbers for client
engagements served by the proposer within the last three years who can
and will comment on such performance. These people will be contacted
to verify the firm's performance in meeting proposed fee amounts, and the
incidence of billing for additional fees.
26.2. Desirable Criteria
Quality of Management Letter Comments - The Borough is interested in
receiving meaningful and pertinent comments in the management letter produced
in conjunction with the financial statements. In order to determine if a firm
provides comments of the nature desired by the Borough, firms desiring to
receive additional consideration for performance in this area should provide
references for clients served during the past three years who can and will
respond to queries Borough and School District staff would make in this area.
Routine Additional Information Support - The Borough is interested in the
support provided and routinely available to the proposing firm's clients by being
notified of changes in governmental accounting and reporting, as well as in
association with management issues. A firm desiring to receive an additional
consideration for services provided in this area should describe how it routinely
provides such information to its clients. If this information is provided through
issuance of a newsletter or similar materials, the Borough encourages firms
seeking consideration in this area to provide samples of these materials.
Firm Philosophy for Interaction with Client Management - The Borough is
interested in the proposing firm's philosophy of its interaction with client
management in the resolution of audit issues and routine audit administration
matters. This would cover areas such as dealing with reporting issues and
discussing and coordinating audit schedule changes. Although these areas are
resolved prior to issuance of an audit opinion, ease of interaction and flexibility on
routine engagements between the proposing firm and the client's administrative
management is desirable. In order to evaluate a firm's philosophy for interaction
with clients, firms desiring additional consideration should describe their
philosophy and provide references for clients served during the past three years
who can and will respond to queries Borough and School District staff would
make regarding a firm's performance in this area.
Approach to Client -Prepared Financial Statements - The Borough is
interested in the approach the proposer uses in performing audit work on client -
prepared financial statements. In order to evaluate a firm's approach to client -
prepared financial statements, firms desiring additional consideration for
performance in this area should provide references for clients served during the
past three years who can and will respond to queries Borough and School
District staff would make in this area.
27. SELECTION PROCESS
27.1. Proposals will be evaluated in a multi -stage process consisting of the following
steps:
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• Initial review and rating of the mandatory requirements.
• Evaluation and rating of desirable criteria.
• Review and rating of Cost Proposal.
• Overall rating and final selection.
The Borough reserves the option to conduct oral interviews, in Kodiak, of firms.
If oral interviews are conducted, firms will be re -rated for mandatory requirements
and desirable criteria.
27.2. Maximum of 25 points each component, with a maximum for this section of 100
points:
• The firm's understanding of the work to be performed.
• The individual audit staffs technical qualifications and experience.
• The firm's experience with local government, federal and state grants and
assistance, and electronic data processing (EDP); firm's adequacy as to size.
• Performance, including timeliness, adherence to fixed fees, and sufficiency of
projected hours.
27.3. Maximum of 10 points each component, with a maximum for this section of 50
points:
• Quality of management letter comments.
• Routine additional information support.
• Firm philosophy for interaction with client management.
• Approach to client -prepared financial statements.
• Local office (Alaska).
27.4. Cost Proposals Will Be Evaluated As Follows:
Lowest total cost of
all proposals submitted X 50 = Cost Score
Total cost of this firm's proposal
Total cost is defined as the sum of the five years' fixed fees.
27.5. The firm with the highest total point scores (mandatory requirements, desirable
criteria, and cost score — maximum 200 points) will be recommended for
selection.
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28. Confidentiality of Proposals. Proposal contents, and tabulation of ratings, shall remain
confidential until a Notice of Intent to Award is issued. After a Notice of Intent to Award is
issued proposers may, upon request, receive copies of the tabulation summary and
proposals received and evaluated.
29. Notice of Intent to Award and Protests.
29.1 Notice of Intent to Award. The Borough will issue a notice of intent to award to the
successful Proposer.
29.2 Protest Period. An aggrieved bidder may file a protest of the award within ten (10)
calendar days after Notice of Intent to Award the contract is mailed. A protest may be made by
delivery of a letter of protest to the Borough Manager's Office. Protests will only be accepted
based on error in process. If/when a protest is received, an administrative review process will
begin. The protestor can expect a final administrative decision by the Kodiak Island Borough
Manager within 30 working days of the receipt of protest.
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ATTACHMENT A
KODIAK ISLAND BOROUGH
710 Mill Bay Road
Kodiak, AK 99615
ACKNOWLEDGMENTS
I certify that I am a duly authorized representative of the firm listed below and that
information and materials enclosed with this proposal accurately represent the
capabilities of the office listed below for providing the services indicated. The Borough is
hereby authorized to request any owner identified in this proposal to furnish any
pertinent information deemed necessary to verify information provided or regarding
reputation and capabilities of the firm.
AMENDMENTS
The proposer represents to the Borough that it has relied upon no oral representations
from the Borough in the preparation of this proposal. If any amendments are issued to
this RFP, the proposer must acknowledge the receipt of such amendments in the space
provided on the line below or by signing the amendment and submitting it before the
submittal deadline, unless the amendment states otherwise. Proposals, which fail to
acknowledge receipt of amendments, shall be considered non-responsive and will not be
evaluated.
Amendment Acknowledgment Number(s)
ORIGINAL SIGNATURE
Acknowledgment sheet must be manually (original signature) signed. A proposal shall
be rejected when the proposal is not signed by hand.
Signature of Representative
Date:
Name:
Title:
Firm:
Type of Firm (check one)
Individual
Corporation in the State of:
Other (Specify):
Partnership
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Office address for which this
submittal is made:
Street:
P. O. Box:
City, State, Zip:
Telephone:
AK Business License No.
ATTACHMENT B
KODIAK ISLAND BOROUGH
710 Mill Bay Road
Kodiak, AK 99615
EXTERNAL AUDIT SERVICES FOR THE KODIAK ISLAND BOROUGH AND
THE KODIAK ISLAND BOROUGH SCHOOL DISTRICT
COST PROPOSAL SCHEDULE
Borough
Annual Comprehensive
Financial Report
Federal Single Audit
State Single Audit
Consultation
Total
School District
Financial Statements,
Statements of Compliance
(Alaska Statutes and
Department of Education and
Early Development,
Reimbursable Expenditures
for School Construction, and
Tuition Rate Report
Federal Single Audit
State Single Audit
Consultation
Total
GRAND TOTAL
2022 2023 2024 2025 2026
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ATTACHMENT C
KODIAK ISLAND BOROUGH
710 Mill Bay Road
Kodiak, AK 99615
EXTERNAL AUDIT SERVICES FOR THE KODIAK ISLAND BOROUGH AND
THE KODIAK ISLAND BOROUGH SCHOOL DISTRICT
RATE SCHEDULE FOR POTENTIAL ADDITIONAL ENGAGEMENT (S)
Staff Category * 2022 2023 2024 2025 2026
Partner
Senior Manager
Manager
Senior
Advanced Staff
Staff
* Please adjust the staff categories to reflect those of the proposer's firm.
Page 33 of 34
ATTACHMENT D
Form Contract
Page 34 of 34
AGREEMENT
FOR
AUDIT SERVICES FOR THE
KODIAK ISLAND BOROUGH
This Agreement made and entered into this day of , 2022, by and
between the Kodiak Island Borough, hereinafter "Borough", a general law municipality and a
Borough of the second class, whose address is: 710 Mill Bay Road Kodiak, Alaska 99615, and
, whose address is and licensed
and qualified to do business within the State of Alaska, hereinafter called "Contractor."
RECITALS
A. The Borough desires the performance, provision, and accomplishment of the work,
services and materials described and set forth in Part 1, Section 2.
B. Contractor represents that it is ready, able and qualified to perform, and will perform,
in all respects, all of the work, services, and materials, and to otherwise perform all
of the terms, covenants, conditions and provisions of the agreement in the manner,
at the times, and for the consideration hereafter provided.
Now, Therefore, for and in consideration of the terms, covenants, conditions, and provisions
contained herein, and/or attached and incorporated herein and made a part hereof, the parties
hereto agree as follows. This contract consists of:
A. Part I, consisting of eighteen (18) sections of General Provisions.
B. Part II, consisting of six (6) sections of Special Provisions.
PART
GENERAL PROVISIONS
Section 1: Agreement to Perform. The Borough hereby agrees to engage the Contractor,
and the Contractor hereby agrees to perform, complete, provide and furnish, in a timely and proper
manner, and pursuant to and in accordance with all of the terms, covenants, conditions and
provisions of this agreement, all of the work, services, labor and materials required to accomplish all
of the work described in Section 2 hereof at the times, in the manner, and for the consideration and
payments hereinafter set forth.
Section 2: Description of Work. The Contractor shall perform, supply, and provide all of the
work, services and materials; hereinafter collectively referred to as "work", as set forth and
described on Attachment A and included in Attachment D, attached hereto and incorporated
herein by this reference. If there is a conflict between This Agreement, Attachment A and
Attachment B, this Agreement shall prevail first, then Attachment A shall prevail over Attachment B.
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Section 3: Time for Commencement and for Completion of Work.
(a) Commencement. Contractor shall commence the work called for in this agreement
upon the giving of a Notice to Proceed by the Borough.
(b) Completion. Upon giving of Notice to Proceed, the work called for in this agreement
shall be performed starting June 1, 2022, and completed by the dates indicated in Exhibit A for the
prior year audit ending June 30, 2023. For renewal years the commencement of each annual audit
shall be July 1 of each year for the prior fiscal year ending the prior June 30 and shall be completed
by the reporting dates corresponding to the dates listed in the Scope of Work, Attachment A for
the relevant fiscal year. Unless earlier terminated As provided for in this agreement, the Borough
shall reserve the right to renew this agreement for a maximum of two (2) extensions of two (2) years
each not to exceed a total of five (5) years. The renewal option shall be solely at the discretion of
the Borough.
Section 4: Financial Terms.
(a) Compensation and Payment. For and in consideration of the timely and proper
performance of work authorized as provided herein, the Borough shall pay the Contractors for audit
services an amount not to exceed a maximum of $ for each year of service in accordance
with the Cost Proposal Schedule listed in Attachment B. Additional non -audit consulting of up to 60
hours per year shall be billed at the rates in Attachment C which is appended to this contract and
incorporated herein by reference. Services shall be invoiced no more frequently than monthly.
(b) No Additional Work. Additional work, identified as additional engagements, shall be
estimated, billed, and paid based upon the rates in Attachment C which is appended to this
contract and incorporated herein by reference. No claim for additional work, services or materials,
not specifically and expressly requested and authorized as provided for in this agreement, or by a
written amendment thereto signed by both parties, done or furnished by the Contractor, will be
allowed or paid by the Borough and Contractor expressly waives any claim therefore.
(c) Availability of Funds. This contract is subject to the availability of funds lawfully
appropriated for its performance.
Section 5: Borough's Contracting Officer. For purposes of this agreement, the Borough's
contracting officer shall be the Borough Finance Director or such other person as is designated in
writing by the Borough Manager.
Section 6: Contractor Qualified. The Contractor expressly represents and warrants it is now
and shall continue to be at all times during the performance of this agreement, the holder of all
required or necessary professional, business or other licenses or permits and is qualified and
capable of performing all of the work covered or called for by this agreement and is presently ready,
able and willing to undertake and perform all of such work and services, and to supply all necessary
materials and equipment, at the times, and in a non -negligent professional and workmanlike
manner, and pursuant to the terms, conditions and provisions, and for the compensation and
payments as herein provided.
Section 7: Termination.
(a) By Consent. This agreement may be terminated in whole or in part by the mutual
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consent of the parties. Such consent shall be in writing.
(b) Termination for Cause. This agreement may be terminated in whole or in part in writing
by Borough in the event of failure by Contractor to fulfill any of the terms and conditions of this
agreement upon the giving of not less than five (5) calendar days prior written notice of intent to
terminate in the manner provided in Part 1, Section 10, hereof.
(c) Termination for Convenience of Borough. This agreement may be terminated in whole
or in part in writing by the Borough for Borough's convenience provided the Contractor is given not
less than thirty (30) calendar days prior written notice of intent to terminate in the manner provided
in Part 1, Section 10, hereof.
(d) In the event termination by the Borough is effected pursuant to (b) above, the Contractor
shall not be entitled to receive any further payment until the work is completed, or the Borough
elects to not proceed further with the project. Upon completion of the work, or termination of the
project in the event the Borough elects to not proceed with the project, the Contractor shall be paid
as follows:
1) In the event the costs and expense of taking over, re -advertising and completing
the project or the costs of closing out the project if the Borough elects to not proceed with
the project (hereinafter referred to as "close out costs"), exceed the remaining unpaid
amount of this agreement, any amount which was otherwise due and unpaid to Contractor
at the time of termination shall be applied to such increased costs in taking over, re -
advertising and completing the project, (or applied to close out costs) and the remaining
amount of such costs, if any, shall be paid by the Contractor to the Borough.
2) In the event said costs and expense of taking over, re -advertising and completing
the project, (or close out costs) are less than the total amount which was otherwise due and
unpaid to the Contractor at the time of termination, the increased costs of taking over and
completing the project (or the close out costs) shall be deducted from the amounts due the
Contractor and the balance, if any, paid to the Contractor without interest.
(e) Upon receipt of a termination notice pursuant to paragraphs (b), (c), or (d) above, the
Contractor shall promptly discontinue all services (unless the notice directs otherwise), and deliver
or otherwise make available to the Borough all data, drawings, notes, specifications, reports,
estimates, summaries, work in progress, and any and all other information and/or materials as may
have been accumulated by the Contractor in performing this agreement, whether completed or in
process, and free and clear of any mechanics or other liens or claims in favor of Contractor or any
other person.
(f) Upon termination pursuant to paragraphs (b), (c), or (d) above, the Borough may, but
shall not be required to, take over the work and prosecute the same to completion by agreement
with another person or otherwise, may elect to complete the work itself, or to not proceed further
with the work and project.
(g) If, after termination by the Borough pursuant to (b) above, it is determined that the
Contractor had not so failed, the termination shall be deemed to have been effected for the
convenience of the Borough. In such event, adjustment of the amounts to be paid to Contractor for
termination shall be made as provided in paragraph (f) of this section.
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(h) No other damages, whether for lost profits or otherwise, other than the amounts allowed
and computed as provided for in this Section 7 shall be due or payable to Contractor in the event of
termination.
Section 8: Conflict of Interest. The Contractor covenants, warrants and represents that the
Contractor has no interest and shall not acquire any interest, direct or indirect, which would conflict
in any manner with the subject matter or the performance of this agreement. The Contractor further
covenants, warrants and represents that in the performance of this agreement, no person having
any such interest shall be employed.
Section 9: Assignment and Subletting Prohibited. The Contractor shall not assign, transfer,
convey, pledge, hypothecate, sublet, subcontract, or otherwise dispose of or encumber this
agreement, or the rights thereunder, nor shall the Contractor delegate any of his/her/its duties
hereunder without the prior written consent of the Borough. Any such attempted assignment,
transfer, conveyance, pledge, hypothecation, subletting, or other disposition, or the attempted
assignment, disposition or delegation of duties or rights shall be null and void and of no force or
effect and shall be grounds and cause for immediate termination of this agreement without liability
by and at the option of the Borough.
Section 10: Notice. (a) Any notice, demand, request, consent, approval, or other
communication that either party desires or is required to give to the other party or any other person
shall be in writing and either served personally or sent by prepaid, first-class mail at the address set
forth below. Either party may change its address by notifying the other party of its change of
address in writing. Notice shall be deemed to have been duly made and given when delivered if
served personally, or upon the expiration of twenty-four (24) hours after the time of mailing if mailed
as provided in this section.
Borough: The Borough Manager's Office
710 Mill Bay Road
Kodiak, Alaska 99901
Contractor:
(b) The performance and administration of this program and this agreement will be
monitored by the Borough and such other agencies as may be required or authorized pursuant to
the terms of any grant to the Borough. Necessary reports, in proper form, will be required as a
prerequisite to any payment to the Contractor.
(c) All project records shall be maintained by the Contractor for not less than three (3) years
after completion and final acceptance of all work by the Borough and shall be subject to inspection
and copying by the Borough or any funding agency during said period.
Section 11: Status of Parties.
(a) Independent Contractor. The Contractor shall perform its obligations hereunder as an
independent contractor of the Borough. The Borough may administer the contract and monitor the
Contractor's compliance with its obligations hereunder. The Borough shall not supervise or direct
the Contractor other than as provided in this section.
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(b) Relationship of the Parties. Nothing herein contained shall be deemed or construed by
the parties hereto, nor by any third party, as creating the relationship of principal and agent or of
partnership or of joint venture between the parties hereto, it being understood and agreed that
neither method of computation of payment nor any other provision contained herein, nor any acts of
the parties hereto, shall be deemed to create any relationship between the parties hereto other than
the relationship of Borough and an independent Contractor.
Section 12: Hold Harmless and Indemnity.
(a) The Contractor shall indemnify, defend, save and hold the Borough, its officers,
employees and agents harmless from any and all claims, lawsuits, liabilities, penalties, or fines,
including attorney's fees and costs, allegedly arising out of, in connection with, or incident to any
loss, damage or injury to persons or property occurring as a result of the Contractor's or any
subcontractor's intentional misconduct or negligent acts, errors or omissions in its performance
pursuant to this contract.
(b) Contractor further agrees to appear and defend, and to indemnify and save free and
harmless the Borough and its officers, employees and agents from and against any of the foregoing
claims, liabilities, penalties, fines or damages, whether or not valid, and for any cost and expense,
including reasonable attorney's fees, incurred by the Borough, its officers, employees or agents on
account of any claim therefore, including claims by reasons of any defects in any plans, drawings,
specifications, computer programs, technical reports, or other work product of Contractor prepared
for or submitted to the Borough pursuant to this agreement provided said claim is not based upon a
use of said plans, drawings, specifications or other work product for other than the purposes for
which such data was prepared and submitted to the Borough.
Section 13: No Third Party Beneficiaries. Nothing in this agreement shall be construed to
give any person other than the Borough and the Contractor any legal or equitable right, remedy or
claim under this agreement, but it shall be held to be for the sole and exclusive benefit of the
Borough and the Contractor.
Section 14: Compliance with Laws and Regulations. Contractor shall, at ContractorMs sole
cost and expense, comply with all of the requirements of all local, state, or federal laws, ordinances,
or regulations now in force, or which may hereafter be in force, pertaining to this agreement, or the
project or work to be performed, and shall faithfully observe in the performance of this agreement,
all local, state, and federal laws, ordinances and regulations now in force or which may hereafter be
in force. When a change in laws, ordinances or regulations results in additional costs, the
Contractor may request a change order to cover those costs. Any such change order shall be
limited to the ContractorMs actual additional costs as a result of the change. The Contractor shall
pay all taxes pertaining to its performance under this contract.
Section 15: Successors and Assigns. Except as otherwise provided herein, the covenants,
agreements and obligations herein contained shall extend to bind and inure to the benefit not only
of the parties hereto but their respective personal representatives, heirs, successors and assigns.
Section 16: Miscellaneous.
(a) Terminology. Whenever herein the singular number is used, the same shall include the
plural, and the masculine gender shall include the feminine and neuter genders.
(b) Law Applicable. The laws of the State of Alaska shall govern the construction, validity,
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performance and enforcement of this agreement. Venue as to any action, claim, or proceeding
arising out of, or based upon this agreement, including, but not limited to, any action for declaratory
or injunctive relief, shall be the appropriate Court sitting in the City of Kodiak, Third Judicial District,
Alaska.
(c) Paragraph Headings. The headings of the several sections and subsections contained
herein are for convenience only and do not define, limit or construe the contents of such sections
and subsections.
(d) Terms Construed as Covenants and Conditions. Every term and each provision of this
agreement performable by Contractor shall be construed to be both a covenant and a condition.
(e) Time of the Essence. Time is of the essence of each term, condition, covenant and
provision of this agreement.
(f) Severability. In the event any provision of this agreement is adjudicated or held to be
invalid or unenforceable, the remaining provisions shall remain in full force and effect.
(g) Nonwaiver. No delay or omission of the right to exercise any power by either party shall
impair any such right or power, or be construed as a waiver of any default or as acquiescence
therein. One or more waivers of any covenant, term or condition of this agreement by either party
shall not be construed by the other party as a waiver of a subsequent breach of the same covenant,
term or condition. The consent or approval by either party to any act by the other party of a nature
requiring consent or approval shall not be deemed to waive or render unnecessary consent to or
approval of any subsequent similar act.
Section 17: Amendment.
(a) This contract shall only be amended, modified or changed by writing, executed by
authorized representatives of the parties.
(b) For the purpose of any amendment modification or change to the terms and conditions
of this contract, the only authorized representatives of the parties are.
1)
2)
Kodiak Island Borough, Borough Manager
(c) Any attempt to amend, modify, or change this contract by either an unauthorized
representative or unauthorized means shall be void.
Section 18: Entire Agreement. This agreement and any schedules, appendices or exhibits
attached hereto sets forth all the covenants, promises, agreements, conditions and understandings
between the parties hereto, and there are no covenants, promises, agreements, conditions or
understandings, either oral or written, between them other than as herein set forth. Except as
herein otherwise expressly provided, no contemporaneous or subsequent agreement,
understanding, alteration, amendment, change or addition to this agreement, or any schedule,
appendix, exhibit or attachment thereto shall be binding upon the parties hereto unless reduced to
writing and signed by both parties. This agreement constitutes a final, complete, and exclusive
statement of the agreement between the parties.
PART II
Auditing Services for the
Kodiak Island Borough
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SPECIAL PROVISIONS
Section 1 : Insurance.
(a) During the entire period of the project or work, the Contractor shall provide the
following types of insurance. The Borough shall be insured as additional insured on all insurance
policies except professional liability contracts. All policies shall have a thirty (30) day cancellation
clause.
Professional liability insurance covering errors and omissions at $1,000,000 per
claim.
2. Valuable papers and electronic data processing (EDP) coverage in an amount
sufficient to reconstruct the work done under this contract, but in no event less than
$10,000 is required.
3. Workers' compensation as required by law and employer's liability coverage at a
minimum of $1,000,000.
4. Commercial general liability insurance - $1,000,000 per occurrence and
$2,000,000 aggregate.
(b) The Borough shall have the right at any time to require higher limits for public liability
and property damage insurance. In any such event, the additional premium or premiums
payable solely as the result of such additional insurance shall be added by amendment to
the contract price.
(c) Each policy of insurance required by this section shall provide for no less than thirty
(30) days' advance notice to the Borough prior to cancellation. Insurance certificates will be
required to be submitted for review by the Borough's Finance Director before the Borough will issue
a notice to proceed. Failure to maintain coverage is a material breach and grounds for termination
of the contract.
Section 2: Equal Employment Opportunity.
(a) The Contractor shall not discriminate against any employee or applicant for employment
because of race, color, religion, disability, national origin, ancestry, age, or sex. The Contractor will
take affirmative action to insure that applicants are employed and that employees are treated during
employment without regard to their race, color, religion, disability, national origin, ancestry, age or
sex. Such action shall include, but not be limited to, the following: employment, upgrading,
demotion, or transfer; recruitment or recruitment advertising; layoff or termination, rates of pay or
other forms of compensation; and selection for training, including apprenticeship. The Contractor
agrees to post in conspicuous places, available to employees and applicants for employment,
notices setting forth the provisions of this nondiscrimination clause.
(b) The Contractor shall state in all solicitations or advertisements for employees to work on
contract jobs to be let in the performance of this agreement, that all qualified applicants will receive
consideration for employment without regard to race, color, religion, disability, national origin,
ancestry, age, or sex.
Auditing Services for the
Kodiak Island Borough
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(c) The Contractor agrees to fully cooperate with the office or agency of the State of Alaska which
seeks to deal with the problem of unlawful or invidious discrimination, and with all other State efforts
to guarantee fair employment practices under this agreement, and said Contractor will comply
promptly with all requests and directions from the State Commission of Human Rights or any of its
officers or against relating to prevention of discriminatory employment practice.
(d) Full cooperation as expressed in the foregoing clause (c) shall include, but not be limited
to, being a witness in any proceeding involving questions of unlawful or invidious discrimination if
such is deemed necessary by any official or agency of the State of Alaska, permitting employees of
said Contractor to be witnesses or complainants in any proceeding involving questions of unlawful
or invidious discrimination, if such is deemed necessary by any official or agency of the State of
Alaska, or the Borough, participating in meetings, submitting periodic reports on the equal
employment aspects of present and future employment, assisting in inspection of relevant facilities,
and promptly complying with all State directives deemed essential by any office or agency of the
State of Alaska, or the Borough, to insure compliance with all federal and state laws, regulations,
and policies pertaining to the prevention of discriminatory employment practices.
(e) Failure to perform any of the above agreements pertaining to equal employment
opportunities shall be deemed a material breach of the contract and sufficient grounds for
termination of this agreement for cause without liability.
Section 3: Contractor Responsible for Personnel.
The Contractor has or will secure, at Contractor's own cost and expense, all personnel required to
perform this agreement in a timely and proper manner. The parties hereto agree and understand
that such personnel shall in no event be deemed to be, and are not, employees, agents, or
representatives of the Borough and such persons shall have no contractual or other relationship
with the Borough, and the Borough shall have no responsibility or liability whatsoever to any of said
persons, or for the acts or omissions of any of such persons.
Section 4: Personnel Supervision.
Contractor agrees that all work and services required or provided under this agreement shall
be performed personally by the Contractor, unless otherwise authorized in writing by the Borough's
contracting officer, and in such event all personnel engaged in any such work shall be fully qualified,
and shall be licensed and authorized under applicable state, federal and local laws to perform such
services.
Section 5: Corporate Authority.
If Contractor is a corporation Contractor shall deliver to the Borough at the time of execution
of this agreement a certified copy of a resolution of its board of directors authorizing the execution
of this agreement and naming the officers that are authorized to execute this agreement on behalf
of the corporation.
Section 6: Additional Terms and Conditions.
This agreement is subject to each of the additional terms, covenants, conditions and
provisions set out in the RFP, attached hereto as Attachment D which are hereby expressly
referred to and incorporated herein as though set forth in full.
Auditing Services for the
Kodiak Island Borough
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Wherefore the parties have entered into this agreement the date and year first above written
at the City of Kodiak, Alaska.
Date:
KODIAK ISLAND BOROUGH:
By:
Roxanne Murphy
Borough Manager
ATTEST:
By:
Borough Clerk
APPROVED AS TO FORM:
By:
Scott A. Brandt -Erichsen
Borough Attorney
CONTRACTOR:
Date: By:
(Print Name/Position)
Auditing Services for the
Kodiak Island Borough
Page 9
BOROUGH ACKNOWLEDGMENTS
STATE OF ALASKA
FIRST JUDICIAL DISTRICT
THIS IS TO CERTIFY that on this day of , 2022, before me, the
undersigned, a notary public in and for the State of Alaska, duly commissioned and sworn,
personally appeared Roxanne Murphy to me known to be the Borough Manager of the Kodiak
Island Borough, a municipal corporation, the corporation which executed the above and foregoing
instrument; who on oath stated that she was duly authorized to execute said instrument on behalf of
said corporation; who acknowledged to me that she signed the same freely and voluntarily on
behalf of said corporation for the uses and purposes therein mentioned.
WITNESS my hand and official seal the day and year in the certificate first above written.
(Seal)
STATE OF ALASKA )
)SS.
FIRST JUDICIAL DISTRICT 1
NOTARY PUBLIC FOR ALASKA
My Commission Expires:
THIS IS TO CERTIFY that on this day of 2022, before me, the
undersigned, a notary public in and for the State of Alaska, duly commissioned and sworn,
personally appeared Alise Rice to me known to be the Borough Clerk of the Kodiak Island
Borough, a municipal corporation, the corporation which executed the above and foregoing
instrument; who on oath stated that she was duly authorized to execute said instrument on behalf of
said corporation; who acknowledged to me that she signed the same freely and voluntarily on
behalf of said corporation for the uses and purposes therein mentioned.
WITNESS my hand and official seal the day and year in the certificate first above written.
(Seal)
Auditing Services for the
Kodiak Island Borough
Page 10
NOTARY PUBLIC FOR ALASKA
My Commission Expires:
ACKNOWLEDGMENT
LIMITED LIABILITY COMPANY
STATE OF ALASKA
) SS.
FIRST JUDICIAL DISTRICT
I, , a Notary Public, in and for the State of , hereby
certify that , whose name as
manager/member of LLC., is signed to the foregoing
instrument and who is known to me, acknowledged before me on this day that, being informed of
the contents of the instrument, he or she, as such officer and with full authority, executed the same
voluntarily for and as the act of said limited liability company.
WITNESS my hand and official seal the day and year in this certificate above written.
NOTARY PUBLIC FOR,
My Commission Expires:
(Seal)
Auditing Services for the
Kodiak Island Borough
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EXHIBIT A
SCOPE OF WORK
The Borough desires the auditor to express an opinion on the fair presentation of its basic financial
statements in conformity with generally accepted accounting principles.
The Borough presents all major funds with budgetary comparisons as part of its basic financial
statements.
The auditor is not required to audit the combining and individual fund financial statements and
supporting schedules. However, the auditor is to provide an "in -relation -to" report on the combining
and individual fund financial statements and supporting schedules based on the auditing
procedures applied during the audit of the basic financial statements. The auditor is not required to
audit the statistical section of the report.
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.
1. Auditina Standards to be Followed
To meet the requirements of this request for proposals, the audit must be performed in
accordance with generally accepted auditing standards as set forth by the American
Institute of Certified Public Accountants, the standards for financial audits set forth in the
U.S. General Accounting Office's Government Auditing Standards, the provisions of the
Single Audit Act of 1984 as amended, the provisions of U.S. Office of Management and
Budget (OMB) Circular A-133, and the AICPA Guide Audits of State and Local
Governmental Units and the State of Alaska Single Audit Regulation 2 AAC 45.010.
2 Financial Statements and Compliance Statements - Borough
2.1 SCOPE OF WORK TO BE PERFORMED
The Kodiak Island Borough desires the auditor to express an opinion on the
fair presentation of its general-purpose financial statements in conformity
with generally accepted accounting principles.
The Borough also desires the auditor to express an opinion on the fair
presentation of its combining and individual fund and account group financial
statements and schedules in conformity with generally accepted accounting
principles. The auditor is not required to audit the supporting schedules
contained in the Annual Financial Report. The auditor is not required to
audit the statistical section of the report.
The auditor is required to report on compliance with applicable state and
with applicable federal laws and regulations and on internal controls over
financial reporting that could have a material effect on the fair presentation of
the financial statements.
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Kodiak Island Borough
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The auditor is required to test internal controls and compliance, as described
in the U.S. Office of Management and Budget (OMB) Circular A-133
Compliance Supplement that are applicable to each of the Borough's major
federal programs. The auditor is also required to test internal controls and
compliance, as described in the State of Alaska Audit Guide and
Compliance Supplement for State Single Audits that are applicable to each
of the Borough's major state programs. The auditor must report on
compliance and internal control over compliance applicable to each major
federal and to each major state program.
The auditor is not required to audit the schedules of expenditures of federal
and state awards.
The auditor is required to report any findings or questioned costs found in
the course of the work described above. Findings must be reported in three
separate categories: 1) those affecting financial reporting, 2) those affecting
major federal programs, and 3) those affecting major state programs.
Recommendations for corrective action should be included.
The auditor shall also be responsible for performing certain limited
procedures, for Management's Discussion and Analysis and for other
Required Supplementary Information required by the Governmental
Accounting Standards Board, as mandated by generally accepted auditing
standards.
2.2 AUDITING STANDARDS TO BE FOLLOWED
To meet the requirements of this request for proposal, the audit shall be
performed in accordance with generally accepted auditing standards as set
forth by the American Institute of Certified Public Accountants, the standards
for financial audits set forth in the U.S. General Accounting Office's
Government Auditing Standards, the provisions of U.S. Office of
Management and Budget (OMB) Circular A-133, Audits of States, Local
Governments, and Non -Profit Organizations, and the provisions of the State
of Alaska Single Audit Regulation (2AAC 45.010), to include the State of
Alaska Audit Guide and Compliance Supplement for State Single Audits.
2.3 REPORTS TO BE ISSUED
Reports shall be written in accordance with generally accepted auditing
standards as set forth by the American Institute of Certified Public
Accountants, the standards for financial audits set forth in the U.S. General
Accounting Office's Government Auditing Standards, the provisions of U.S.
Office of Management and Budget (OMB) Circular A-133, Audits of States,
Local Governments, and Non -Profit Organizations, and the provisions of the
State of Alaska Single Audit Regulation (2 AAC 45.010), to include the State
of Alaska Audit Guide and Compliance Supplement for State Single Audits.
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Kodiak Island Borough
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Following the completion of the audit of the fiscal year's financial statements,
the auditor shall issue:
• A report on the fair presentation of the financial statements in conformity
with generally accepted accounting principles.
• For federal purposes, a report on compliance and on internal control
over financial reporting based on an audit of the financial statements
performed in accordance with Government Auditing Standards.
• An "in -relation -to" report on the Schedule of Expenditures of Federal
Awards, along with a report on compliance with requirements applicable
to each major program and on internal control over compliance in
accordance with OMB Circular A-133.
• A Schedule of Findings and Questioned Costs summarizing auditor
results for a federal single audit, along with recommendations for
corrective action.
• Accounting assistance will be required for preparation of the Annual
Comprehensive Financial Report (ACFR). This will be included in the
lump sum cost for audit services.
In the required state and federal reports on compliance and on internal
controls over financial reporting and on the state and federal reports on
compliance with requirements applicable to each major program, the auditor
shall communicate any reportable conditions found during the audit. A
reportable condition shall be defined as a significant deficiency in the design
or operation of internal control, which could adversely affect the Borough's
ability to record, process, summarize, and report financial data consistent
with the assertions of management in the financial statements.
Reportable conditions that are also material weaknesses shall be identified
as such in the report.
Nonreportable conditions discovered by the auditors shall be reported in a
separate letter to management, which shall be referred to in the report on
internal controls.
The report on compliance with requirements to each major assistance
program shall include all material instances of noncompliance. All
nonmaterial instances of noncompliance shall be reported in a separate
management letter, which shall be referred to in the report on compliance.
Fraud and Illegal Acts. Auditors shall be required to make an immediate,
written report of all irregularities and illegal acts or indications of illegal acts
of which they become aware. This notification should be made in
accordance with Statements of Auditing Standards No. 54 and No. 99, and
with the U.S. General Accounting Office's Government Auditing Standards.
Auditing Services for the
Kodiak Island Borough
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2.4 REPORT DEADLINES
The opinion on the financial statements of the Borough for the fiscal years
ending June 30 is to be submitted by November 15 for each year of the
engagement, unless adjusted by mutual agreement.
The reports required for the federal Single Audit Act, as amended in 1996,
and the state single audit regulation are to be submitted by December 15 for
each year of the engagement, unless adjusted by mutual agreement.
2.5 SPECIAL CONSIDERATIONS
The Kodiak Island Borough will send its Annual Comprehensive Financial
Report to the Government Finance Officers Association for review in its
Certificate of Achievement for Excellence in Financial Reporting program.
The auditor may be required to provide limited special assistance to the
Kodiak Island Borough to meet the requirements of that program. Any fees
for this assistance are outside the scope of the audit and will be billed as
additional engagement work at the rates in Attachment C.
The Kodiak Island Borough may prepare one or more official statements in
connection with the sale of debt securities, which may contain the general-
purpose financial statements and the auditor's report thereon. The auditor
shall be required, if requested by the financial advisor and/or the underwriter,
to issue a "consent and citation of expertise" as the auditor and any
necessary "comfort letters".
The schedules of expenditures of federal and state awards the related
auditor's reports, as well as the federal and state reports on compliance and
on internal control over financial reporting and on compliance with
requirements applicable to each major program and on internal control over
that compliance are not to be included in the Annual Comprehensive
Financial Report but are to be issued separately.
2.6 WORKING PAPER RETENTION AND ACCESS TO WORKING PAPERS
All working papers and reports must be retained, at the auditor's expense,
for a minimum of three (3) years from the end of the audited period, unless
the firm is notified in writing by the Borough of the need to extend the
retention period. The auditor will be required to make working papers
available, upon request, to the following parties or their designees:
• Kodiak Island Borough
• Parties designated by the federal or state governments or by the Kodiak
Island Borough as part of an audit quality review process
• Auditors of entities of which the Kodiak Island Borough is a sub recipient
of grant funds
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Kodiak Island Borough
Page 15
In addition, the firm shall respond promptly and fully to the reasonable
inquires of successor auditors. The firm shall allow successor auditors to
review working papers, including documentation of planning, internal control,
audit results, and other matters of continuing accounting and auditing
significance.
3. Financial Statements and Compliance Statements — School District
3.1 SCOPE OF WORK TO BE PERFORMED
The Kodiak Island Borough School District desires the auditor to express an
opinion on the fair presentation of its general-purpose financial statements in
conformity with generally accepted accounting principles.
The School District also desires the auditor to express an opinion on the fair
presentation of its combining and individual fund schedules in conformity
with generally accepted accounting principles (i.e., a "full -scope" audit). The
auditor is not required to audit the supporting schedules contained in the
Annual Comprehensive Financial Report. The auditor is not required to audit
the statistical section of the report.
The auditor is required to report on compliance with applicable state and
with applicable federal laws and regulations and on internal controls over
financial reporting that could have a material effect on the fair presentation of
the financial statements.
The auditor is required to test internal controls and compliance as described
in the U.S. Office of Management and Budget (OMB) Circular A-133
Compliance Supplement that are applicable to each of the School District's
major federal programs. The auditor is also required to test internal controls
and compliance, as described in the State of Alaska Audit Guide and
Compliance Supplement for State Single Audits that are applicable to each
of the School District's major state programs. The auditor must report on
compliance and internal control over compliance applicable to each major
federal and to each major state program.
The auditor is not required to audit the schedules of expenditures of federal
and state awards.
The auditor is required to report any findings or questioned costs found in
the course of the work described above. Findings must be reported in three
separate categories: 1) those affecting financial reporting, 2) those affecting
major federal programs, and 3) those affecting major state programs.
Recommendations for corrective action should be included.
The auditor shall also be responsible for performing certain limited
procedures, for Management's Discussion and Analysis and for other
Required Supplementary Information required by the Governmental
Accounting Standards Board, as mandated by generally accepted auditing
standards.
Auditing Services for the
Kodiak Island Borough
Page 16
3.2 AUDITING STANDARDS TO BE FOLLOWED
To meet the requirements of this request for proposal, the audit shall be
performed in accordance with generally accepted auditing standards as set
forth by the American Institute of Certified Public Accountants, the standards
for financial audits set forth in the U.S. General Accounting Office's
Government Auditing Standards, the provisions of U.S. Office of
Management and Budget (OMB) Circular A-133, Audits of States, Local
Governments, and Non -Profit Organizations, and the provisions of the State
of Alaska Single Audit Regulation (2AAC 45.010), to include the State of
Alaska Audit Guide and Compliance Supplement for State Single Audits.
3.3 REPORTS TO BE ISSUED
Reports shall be written in accordance with generally accepted auditing
standards as set forth by the American Institute of Certified Public
Accountants, the standards for financial audits set forth in the U.S. General
Accounting Office's Government Auditing Standards, the provisions of U.S.
Office of Management and Budget (OMB) Circular A-133, Audits of States,
Local Governments, and Non -Profit Organizations, and the provisions of the
State of Alaska Single Audit Regulation (2 AAC 45.010), to include the State
of Alaska Audit Guide and Compliance Supplement for State Single Audits.
Following the completion of the audit of the fiscal year's financial statements,
the auditor shall issue:
• A report on the fair presentation of the financial statements in conformity
with generally accepted accounting principles.
• For federal purposes, a report on compliance and on internal control
over financial reporting based on an audit of the financial statements
performed in accordance with Government Auditing Standards.
• An "in -relation -to" report on the Schedule of Expenditures of Federal
Awards, along with a report on compliance with requirements applicable
to each major program and on internal control over compliance in
accordance with OMB Circular A-133.
• A Schedule of Findings and Questioned Costs summarizing auditor
results for a federal single audit, along with recommendations for
corrective action.
• For state purposes, a report on compliance and on internal control over
financial reporting based on an audit of the financial statements
performed in accordance with Government Auditing Standards.
Auditing Services for the
Kodiak Island Borough
Page 17
An "in -relation -to" report on the Schedule of Expenditures of State
Awards, along with a report on compliance with requirements applicable
to each major program and on internal control over compliance in
accordance with the State of Alaska Audit Guide and Compliance
Supplement for State Single Audits.
The auditors must send out these reports for the School District:
• A report on fund balance compliance requirements, in accordance with
AS 14.17.505. A report on the fair presentation of the tuition rate report,
in accordance with Alaska Department of Education and Early
Development instructions for Form 05-00-014.
• One copy of the General -Purpose Financial Statement for each state
agency listed on either the schedule of state financial assistance or
Federal Awards should be sent to the Statewide Single Audit
Coordinator, Office of Management & Budget.
• One copy of the General -Purpose Financial Statement should be sent to
the State of Alaska, Department of Administration, Division of Finance.
Their report should also include the Tuition Rate Report and
Management Letter
• Two copies of the General -Purpose Financial Statement will be sent to
the Federal Audit Clearing House. It will also include the Data Collection
Form for Reporting on Audits of States, Local Governments and
Nonprofit Organizations (Form SF -SAC) which the auditors have
prepared.
Five additional copies each of the General -Purpose Financial Statement,
Management Letter, Letter to the School Board and two (2) copies of the
Tuition Rate Report sent to the School District along with an electronic
version of all reports.
In the required state and federal reports on compliance and on internal
controls over financial reporting and on the state and federal reports on
compliance with requirements applicable to each major program, the auditor
shall communicate any reportable conditions found during the audit. A
reportable condition shall be defined as a significant deficiency in the design
or operation of internal control, which could adversely affect the School
District's ability to record, process, summarize, and report financial data
consistent with the assertions of management in the financial statements.
Reportable conditions that are also material weaknesses shall be identified
as such in the report.
Nonreportable conditions discovered by the auditors shall be reported in a
separate letter to management, which shall be referred to in the report on
internal controls.
Auditing Services for the
Kodiak Island Borough
Page 18
The report on compliance with requirements to each major assistance
program shall include all material instances of noncompliance. All
nonmaterial instances of noncompliance shall be reported in a separate
management letter, which shall be referred to in the report on compliance.
Fraud and Illegal Acts. Auditors shall be required to make an immediate,
written report of all irregularities and illegal acts or indications of illegal acts
of which they become aware. This notification should be made in
accordance with Statements of Auditing Standards No. 54 and No. 99, and
with the U.S. General Accounting Office's Government Auditing Standards.
3.4 REPORT DEADLINES
Opinions on the financial statements of the School District and on reports
required by the Alaska Department of Education and Early Development for
the fiscal years ending June 30 are to be submitted by October 1 for each
year of the engagement, unless adjusted by mutual agreement.
The reports required for the federal Single Audit Act, as amended in 1996,
the state single audit regulations, and the applicable state statutes and
regulations of the Alaska Department of Education and Early Development
are to be submitted by October 1 for each year of the engagement, unless
adjusted by mutual agreement.
3.5 WORKING PAPER RETENTION AND ACCESS TO WORKING
PAPERS
All working papers and reports must be retained, at the auditor's expense,
for a minimum of three (3) years from the end of the audited period, unless
the firm is notified in writing by the or School District of the need to extend
the retention period. The auditor will be required to make working papers
available, upon request, to the following parties or their designees:
• Kodiak Island Borough and Kodiak Island Borough School District
• State Department of Education and Early Development and U.S.
Department of Education
• Parties designated by the federal or state governments or by the
Borough or School District as part of an audit quality review process
• Auditors of entities of which the Kodiak Island Borough School District is
a subrecipient of grant funds
In addition, the firm shall respond promptly and fully to the reasonable
inquires of successor auditors. The firm shall allow successor auditors to
review working papers, including documentation of planning, internal control,
audit results, and other matters of continuing accounting and auditing
significance.
4. Peer Reviews
Auditing Services for the
Kodiak Island Borough
Page 19
The firm shall provide copies of their peer reviews as they are performed during the
term of the contract.
5. Management Letters
The auditor shall observe the adequacy of the systems of internal control,
accounting procedures, and other significant matters. Upon the request any
appropriate recommendations may be reviewed with management and included in
separate letters to the Borough Manager and Assembly, and to the Superintendent
and School Board.
Interim management letters on improvements in controls and procedures for the
Borough and School District will be submitted within three weeks of interim fieldwork
for each year. Final management letters for the Borough and School District will be
submitted by December 15 and September 30, respectively, of each year, unless
adjusted by mutual agreement. The auditor will meet at least semi-annually with the
Assembly and School Board, or with designated Committee(s), for the purpose of
reviewing the interim and/or final management letters.
6. Presentations
As early as possible after the statements have been printed, the appropriate
financial reports, compliance reports, and the management letters are to be
reviewed with a designated committee of the School District and with the Borough's
audit committee. Then they are to be presented to the School Board and to the
Assembly at a regular meeting, respectively. The audit partner assigned to the
engagement should be in attendance, if requested to be present.
Auditing Services for the
Kodiak Island Borough
Page 20
Altman, Rogers
CERTIFIED
PUBLIC
C6. ACCOUNTANTS
May 12, 2022
Audit Committee or Borough Assembly
Kodiak Island Borough
710 Mill Bay Road
Kodiak, AK 99615
Dear Audit Committee or Borough Assembly,
You have requested that we audit the financial statements of the governmental activities, each major
fund, and the aggregate remaining fund information of Kodiak Island Borough, as of June 30, 2022, and
for the year then ended, and the related notes to the financial statements, which collectively comprise
Kodiak Island Borough's basic financial statements as listed in the table of contents.
In addition, we will audit the entity's compliance over major federal and state award programs for the
period ended June 30, 2022. We are pleased to confirm our acceptance and our understanding of this
audit engagement by means of this letter. Our audits will be conducted with the objectives of our
expressing an opinion on each opinion unit and an opinion on compliance regarding the entity's major
federal and state award programs. The objectives of our audit of the financial statements are to obtain
reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a
guarantee that an audit conducted in accordance with auditing standards generally accepted in the
United States of America (GAAS) and in accordance with Government Auditing Standards, will always
detect a material misstatement when it exists. Misstatements, including omissions, can arise from fraud
or error and are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the financial
statements.
The objectives of our compliance audit are to obtain sufficient appropriate audit evidence to form an
opinion and report at the level specified in the governmental audit requirement about whether the entity
complied in all material respects with the applicable compliance requirements and identify audit and
reporting requirements specified in the governmental audit requirement that are supplementary to GAAS
and Government Auditing Standards, if any, and perform procedures to address those requirements.
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis, budgetary comparison schedules, and schedules of proportionate share of the
net pension and OPEB liabilities and contributions be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or historical
context. As part of our engagement, we will apply certain limited procedures to the required
supplementary information (RSI) in accordance with auditing standards generally accepted in the United
States of America.
3000 C Street N. Suite 201 Anchorage, Alaska 99503 Phone 907-274-2992 Fax 907-274-2993
Offices in Juneau and Soldotna A Professional Corporation
Kodiak Island Borough
Page 2 of 10
These limited procedures will consist primarily of inquiries of management regarding their methods of
measurement and presentation, and comparing the information for consistency with management's
responses to our inquiries. We will not express an opinion or provide any form of assurance on the RSI.
The following RSI is required by accounting principles generally accepted in the United States of America.
This RSI will be subjected to certain limited procedures but will not be audited:
1) Management's discussion and analysis.
2) Budgetary comparisons schedules.
3) Schedules of proportionate share of the net pension and OPEB liabilities and contributions.
Supplementary information other than RSI will accompany Kodiak Island Borough's basic financial
statements. We will subject the following supplementary information to the auditing procedures applied in
our audit of the basic financial statements and certain additional procedures, including comparing and
reconciling the supplementary information to the underlying accounting and other records used to prepare
the financial statements or to the financial statements themselves, and additional procedures in accordance
with auditing standards generally accepted in the United States of America. We intend to provide an opinion
on the following supplementary information in relation to the financial statements as a whole:
1) Combining schedules.
2) Schedule of expenditures of federal awards.
3) Schedule of state financial assistance.
Schedule of Expenditures of Federal and State Awards
We will subject the schedule of expenditures of federal and state awards to the auditing procedures applied
in our audit of the basic financial statements and certain additional procedures, including comparing and
reconciling the schedule to the underlying accounting and other records used to prepare the financial
statements or to the financial statements themselves, and additional procedures in accordance with auditing
standards generally accepted in the United States of America. We intend to provide an opinion on whether
the schedule of expenditures of federal and state awards are presented fairly in all material respects in
relation to the financial statements as a whole.
Data Collection Form
Prior to the completion of our engagement, we will complete the sections of the Data Collection Form that
are our responsibility. The form will summarize our audit findings, amounts and conclusions. It is
management's responsibility to submit a reporting package including financial statements, schedule of
expenditure of federal awards, summary schedule of prior audit findings and corrective action plan along
with the Data Collection Form to the federal audit clearinghouse. The financial reporting package must be
text searchable, unencrypted, and unlocked. Otherwise, the reporting package will not be accepted by the
federal audit clearinghouse. We will assist you in the electronic submission and certification. You may
request from us copies of our report for you to include with the reporting package submitted to pass-through
entities.
The Data Collection Form is required to be submitted within the earlier of 30 days after receipt of our
auditors' reports or nine months after the end of the audit period, unless specifically waived by a federal
and state cognizant or oversight agency for audits. Data Collection Forms submitted untimely are one of
the factors in assessing programs at a higher risk.
Kodiak Island Borough
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Audit of the Financial Statements
We will conduct our audits in accordance GARS, the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States of America; the
audit requirements of Title 2 U.S. Code of Federal and state Regulations (CFR) Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal and state Awards
(Uniform Guidance), and the State of Alaska Audit Guide and Compliance Supplement for State Single
Audits). As part of an audit of financial statements in accordance with GAAS and in accordance with
Government Auditing Standards, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. However, we will communicate to you in writing
concerning any significant deficiencies or material weaknesses in internal control relevant to the
audit of the financial statements that we have identified during the audit.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
• Conclude, based on the audit evidence obtained, whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about Kodiak Island Borough's ability to
continue as a going concern for a reasonable period of time.
Because of the inherent limitations of an audit, together with the inherent limitations of internal control, an
unavoidable risk that some material misstatements or noncompliance may not be detected exists, even
though the audit is properly planned and performed in accordance with GAAS and Government Auditing
Standards of the Comptroller General of the United States of America. Please note that the determination
of abuse is subjective and Government Auditing Standards does not require auditors to detect abuse.
Our responsibility as auditors is limited to the period covered by our audit and does not extend to any other
periods.
We will issue a written report upon completion of our audit of Kodiak Island Borough's basic financial
statements. Our report will be addressed to governing body of Kodiak Island Borough. Circumstances may
arise in which our report may differ from its expected form and content based on the results of our audit.
Depending on the nature of these circumstances, it may be necessary for us to modify our opinions, add
an emphasis -of -matter or other -matter paragraph(s) to our auditor's report, or if necessary, withdraw from
the engagement. If our opinions on the basic financial statements are other than unmodified, we will discuss
the reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to
form or have not formed opinions, we may decline to express opinions or to issue a report as a result of
this engagement.
Kodiak Island Borough
Page 4 of 10
In accordance with the requirements of Government Auditing Standards, we will also issue a written report
describing the scope of our testing over internal control over financial reporting and over compliance with
laws, regulations, and provisions of grants and contracts, including the results of that testing. However,
providing an opinion on internal control and compliance over financial reporting will not be an objective of
the audit and, therefore, no such opinion will be expressed.
Audit of Major Program Compliance
Our audit of Kodiak Island Borough's major federal and state award program(s) compliance will be
conducted in accordance with the requirements of the Single Audit Act, as amended; Uniform Guidance,
and the State of Alaska Audit Guide and Compliance Supplement for State Single Audits, and will include
tests of accounting records, a determination of major programs in accordance with the Uniform Guidance
and the State of Alaska Audit Guide and Compliance Supplement for State Single Audits and other
procedures we consider necessary to enable us to express such an opinion on major federal and state
award program compliance and to render the required reports. We cannot provide assurance that an
unmodified opinion on compliance will be expressed. Circumstances may arise in which it is necessary for
us to modify our opinion or withdraw from the engagement.
The Uniform Guidance and the State of Alaska Audit Guide and Compliance Supplement for State Single
Audits requires that we also plan and perform the audit to obtain reasonable assurance about whether
material noncompliance with applicable laws and regulations, the provisions of contracts and grant
agreements applicable to major federal and state award programs, and the applicable compliance
requirements occurred, whether due to fraud or error, and express an opinion on the entity's compliance
based on the audit. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing
Standards, and the Uniform Guidance and the State of Alaska Audit Guide and Compliance Supplement
for State Single Audits will always detect material noncompliance when it exists. The risk of not detecting
material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Noncompliance with the compliance requirements is considered material if there is a substantial likelihood
that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the
report on compliance about the entity's compliance with the requirements of the federal and state programs
as a whole.
As part of a compliance audit in accordance with GAAS and in accordance with Government Auditing
Standards, we exercise professional judgment and maintain professional skepticism throughout the audit.
We also identify and assess the risks of material noncompliance, whether due to fraud or error, and design
and perform audit procedures responsive to those risks.
Our procedures will consist of determining major federal and state programs and, performing the applicable
procedures described in the U.S. Office of Management and Budget OMB Compliance Supplement and
the State of Alaska Compliance Supplement for the types of compliance requirements that could have a
direct and material effect on each of the entity's major programs, and performing such other procedures as
we considers necessary in the circumstances. The purpose of those procedures will be to express an
opinion on the entity's compliance with requirements applicable to each of its major programs in our report
on compliance issued pursuant to the Uniform Guidance and the State of Alaska Audit Guide and
Compliance Supplement for State Single Audits.
Kodiak Island Borough
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Also, as required by the Uniform Guidance and the State of Alaska Audit Guide and Compliance
Supplement for State Single Audits, we will obtain an understanding of the entity's internal control over
compliance relevant to the audit in order to design and perform tests of controls to evaluate the
effectiveness of the design and operation of controls that we consider relevant to preventing or detecting
material noncompliance with compliance requirements applicable to each of the entity's major federal and
state award programs. Our tests will be less in scope than would be necessary to render an opinion on
these controls and, accordingly, no opinion will be expressed in our report. However, we will communicate
to you, regarding, among other matters, the planned scope and timing of the audit and any significant
deficiencies and material weaknesses in internal control over compliance that we have identified during the
audit.
We will issue a report on compliance that will include an opinion or disclaimer of opinion regarding the
entity's major federal and state award programs, and a report on internal controls over compliance that will
report any significant deficiencies and material weaknesses identified; however, such report will not express
an opinion on internal control.
Management's Responsibilities
Our audit will be conducted on the basis that management and, when appropriate, those charged with
governance acknowledge and understand that they have responsibility:
1. For the preparation and fair presentation of the financial statements in accordance with accounting
principles generally accepted in the United States of America;
2. For the design, implementation, and maintenance of internal control relevant to the preparation and
fair presentation of financial statements that are free from material misstatement, whether due to
fraud or error;
3. For identifying, in its accounts, all federal and state awards received and expended during the
period and the federal and state programs under which they were received;
4. For maintaining records that adequately identify the source and application of funds for federal and
state funded activities;
5. For preparing the schedule of expenditures of federal and state awards (including notes and
noncash assistance received) in accordance with the Uniform Guidance and the State of Alaska
Audit Guide and Compliance Supplement for State Single Audits;
6. For designing, implementing, and maintaining effective internal control over federal and state
awards that provides reasonable assurance that the entity is managing federal and state awards
in compliance with federal and state statutes, regulations, and the terms and conditions of the
federal and state awards;
7. For identifying and ensuring that the entity complies with federal and state laws, statutes,
regulations, rules, provisions of contracts or grant agreements, and the terms and conditions of
federal and state award programs, and implementing systems designed to achieve compliance with
applicable federal and state statutes, regulations, and the terms and conditions of federal and state
award programs;
8. For disclosing accurately, currently, and completely the financial results of each federal and state
award in accordance with the requirements of the award;
Kodiak Island Borough
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9. For identifying and providing report copies of previous audits, attestation engagements, or other
studies that directly relate to the objectives of the audit, including whether related recommendations
have been implemented;
10. For taking prompt action when instances of noncompliance are identified;
11. For addressing the findings and recommendations of auditors, for establishing and maintaining a
process to track the status of such findings and recommendations and taking corrective action on
reported audit findings from prior periods and preparing a summary schedule of prior audit findings;
12. For following up and taking corrective action on current year audit findings and preparing a
corrective action plan for such findings;
13. For submitting the reporting package and data collection form to the appropriate parties;
14. For making the auditor aware of any significant contractor relationships where the contractor is
responsible for program compliance;
15. To provide us with:
a. Access to all information of which management is aware that is relevant to the preparation and
fair presentation of the financial statements including the disclosures, and relevant to federal
and state award programs, such as records, documentation, and other matters;
b. Additional information that we may request from management for the purpose of the audit;
c. Unrestricted access to persons within the entity from whom we determine it necessary to obtain
audit evidence;
16. For adjusting the financial statements to correct material misstatements and confirming to us in the
management representation letter that the effects of any uncorrected misstatements aggregated
by us during the current engagement and pertaining to the current year period(s) under audit are
immaterial, both individually and in the aggregate, to the financial statements as a whole;
17. For acceptance of nonattest services, including identifying the proper party to oversee nonattest
work;
18. For maintaining adequate records, selecting and applying accounting principles, and safeguarding
assets;
19. For informing us of any known or suspected fraud affecting the entity involving management,
employees with significant role in internal control and others where fraud could have a material
effect on compliance;
20. For the accuracy and completeness of all information provided;
21. For taking reasonable measures to safeguard protected personally identifiable and other sensitive
information; and
22. For confirming your understanding of your responsibilities as defined in this letter to us in your
management representation letter.
Kodiak Island Borough
Page 7 of 10
With regard to the schedule of expenditures of federal and state awards referred to above, you acknowledge
and understand your responsibility (a) for the preparation of the schedule of expenditures of federal and
state awards in accordance with the Uniform Guidance and the State of Alaska Audit Guide and Compliance
Supplement for State Single Audits, (b) to provide us with the appropriate written representations regarding
the schedule of expenditures of federal and state awards, (c) to include our report on the schedule of
expenditures of federal and state awards in any document that contains the schedule of expenditures of
federal and state awards and that indicates that we have reported on such schedule, and (d) to present the
schedule of expenditures of federal and state awards with the audited financial statements, or if the
schedule will not be presented with the audited financial statements, to make the audited financial
statements readily available to the intended users of the schedule of expenditures of federal and state
awards no later than the date of issuance by you of the schedule and our report thereon.
You are also responsible for the preparation of the other supplementary information, which we have been
engaged to report on, in conformity with U.S. generally accepted accounting principles. You agree to include
our report on the supplementary information in any document that contains, and indicates that we have
reported on, the supplementary information. You also agree to include the audited financial statements with
any presentation of the supplementary information that includes our report thereon OR make the audited
financial statements readily available to users of the supplementary information no later than the date the
supplementary information is issued with our report thereon. Your responsibilities include acknowledging
to us in the written representation letter that (1) you are responsible for presentation of the supplementary
information in accordance with GAAP; (2) you believe the supplementary information, including its form and
content, is fairly presented in accordance with GAAP; (3) the methods of measurement or presentation
have not changed from those used in the prior period (or, if they have changed, the reasons for such
changes); and (4) you have disclosed to us any significant assumptions or interpretations underlying the
measurement or presentation of the supplementary information.
As part of our audit process, we will request from management and, when appropriate, those charged with
governance, written confirmation concerning representations made to us in connection with the audit.
We understand that your employees will prepare all confirmations we request and will locate any documents
or invoices selected by us for testing.
If you intend to publish or otherwise reproduce the financial statements and make reference to our firm, you
agree to provide us with printers' proofs or masters for our review and approval before printing. You also
agree to provide us with a copy of the final reproduced material for our approval before it is distributed.
Nonattest Services
With respect to any nonattest services we perform, including preparation of the financial statements and
federal data collection form. We will not assume management responsibilities on behalf of Kodiak Island
Borough. However, we will provide advice and recommendations to assist management of Kodiak Island
Borough in performing its responsibilities.
Kodiak Island Borough's management is responsible for (a) making all management decisions and
performing all management functions; (b) assigning a competent individual to oversee the services; (c)
evaluating the adequacy of the services performed; (d) evaluating and accepting responsibility for the
results of the services performed; and (e) establishing and maintaining internal controls, including
monitoring ongoing activities.
Kodiak Island Borough
Page 8 of 10
Our responsibilities and limitations of the nonattest services are as follows:
• We will perform the services in accordance with applicable professional standards.
• The nonattest services are limited to the preparation of the financial statements and federal data
collection form. Our firm, in its sole professional judgment, reserves the right to refuse to do any
procedure or take any action that could be construed as making management decisions or
assuming management responsibilities.
Other
Grant Todd is the engagement partner for the audit services specified in this letter. His responsibilities
include supervising Altman, Rogers & Co.'s services performed as part of this engagement and signing or
authorizing another qualified firm representative to sign the audit report.
The estimated fee for our services will be $113,390 including out-of-pocket costs. This fee is based on three
federal and four state programs selected as major programs for compliance purposes. Each additional
compliance program will increase the fee by $2,000. This estimate is based upon anticipated cooperation
from your personnel, your preparation of the financial statements, the assumption that unexpected
circumstances will not be encountered and that significant deficiencies or material weaknesses will not be
discovered during the audit. Additionally, if significant deficiencies or material weaknesses are found, our
fees developing and writing deficiencies are estimated between $500 and $1,000 for each. If significant
additional time is necessary, we will discuss it with you and arrive at a new fee before we incur the additional
costs. Preparation of the Data Collection Form for the Federal Audit Clearinghouse is included in this fee.
Our standard hourly rates vary according to the degree of responsibility involved and the experience level
of the personnel assigned to your audit. Our invoices for these fees will be rendered each month as work
progresses and are payable on presentation. In accordance with our firm policies, work may be suspended
if your account becomes 30 days or more overdue and may not be resumed until your account is paid in
full. If we elect to terminate our services for nonpayment, our engagement will be deemed to have been
completed upon written notification of termination, even if we have not completed our report(s). You will be
obligated to compensate us for all time expended and to reimburse us for all out-of-pocket costs through
the date of termination. The above fee is based on anticipated cooperation from your personnel and the
assumption that unexpected circumstances will not be encountered during the audit. If significant additional
time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the additional
costs.
During the course of the engagement, we may communicate with you or your personnel via fax or e-mail,
and you should be aware that communication in those mediums contains a risk of misdirected or intercepted
communications.
Regarding the electronic dissemination of audited financial statements, including financial statements
published electronically on your Internet website, you understand that electronic sites are a means to
distribute information and, therefore, we are not required to read the information contained in these sites or
to consider the consistency of other information in the electronic site with the original document.
Professional standards prohibit us from being the sole host and/or the sole storage for your financial and
non-financial data. As such, it is your responsibility to maintain your original data and records and we cannot
be responsible to maintain such original information. By signing this engagement letter, you affirm that you
have all the data and records required to make your books and records complete.
Kodiak Island Borough
Page 9 of 10
The audit documentation for this engagement is the property of Altman, Rogers & Co. and constitutes
confidential information. However, we may be requested to make certain audit documentation available to
federal and state agencies and the U.S. Government Accountability Office pursuant to authority given to it
by law or regulation, or to peer reviewers. If requested, access to such audit documentation will be provided
under the supervision of Altman, Rogers & Co.'s personnel. Furthermore, upon request, we may provide
copies of selected audit documentation to these agencies and regulators. The regulators and agencies may
intend, or decide, to distribute the copies of information contained therein to others, including other
governmental agencies. We agree to retain our audit documentation or work papers for a period of at least
five years from the date of our report.
Further, we will be available during the year to consult with you on financial management and accounting
matters of a routine nature.
During the course of the audit, we may observe opportunities for economy in, or improved controls over,
your operations. We will bring such matters to the attention of the appropriate level of management, either
orally or in writing.
We agree to retain our audit documentation or work papers for a period of at least five years from the date
of our report.
You agree to inform us of facts that may affect the financial statements of which you may become aware
during the period from the date of the auditor's report to the date the financial statements are issued.
At the conclusion of our audit engagement, we will communicate to those charged with governance the
following significant findings from the audit:
• Our view about the qualitative aspects of the entity's significant accounting practices;
• Significant difficulties, if any, encountered during the audit;
• Uncorrected misstatements, other than those we believe are trivial, if any;
• Disagreements with management, if any;
• Other findings or issues, if any, arising from the audit that are, in our professional judgment,
significant and relevant to those charged with governance regarding their oversight of the financial
reporting process;
• Material, corrected misstatements that were brought to the attention of management as a result of
our audit procedures;
• Representations we requested from management;
• Management's consultations with other accountants, if any; and
• Significant issues, if any, arising from the audit that were discussed, or the subject of
correspondence, with management.
In accordance with the requirements of Government Auditing Standards, we have attached a copy of our
latest external peer review report of our firm for your consideration and files.
Please sign and return the attached copy of this letter to indicate your acknowledgment of, and agreement
with, the arrangements for our audit of the financial statements compliance over major federal and state
award programs including our respective responsibilities.
Kodiak Island Borough
Page 10 of 10
We appreciate the opportunity to be your financial statement auditors and look forward to working with you
and your staff.
Sincerely,
Altman, Rogers & Co.
Grant R. Todd, CPA
Principal
RESPONSE:
This letter correctly sets forth our understanding.
Acknowledged and agreed on behalf of Kodiak Island Borough by:
Name:
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Date: 5 11 (O I -12