Financial Auditing Services Issuance Date: November 22, 2011 Submission Due Date: December 20, 2011_part1 doc

5.10 Required Reports: 5.10.1 Following the completion of the review, the Contractor shall issue a draft report for recommendations and comments and subsequent final report on the fair

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6751 Columbia Gateway Drive Columbia, Maryland 21046 Telephone (410) 313-6318 FAX (410 )313-6064

REQUEST FOR PROPOSALS

(HCHC RFP No 01-11-2011)

Howard County Housing Commission

6751 Columbia Gateway Drive, Third floor

Columbia Maryland 21046

Financial Auditing Services

Issuance Date: November 22, 2011 Submission Due Date: December 20, 2011

Issued by:

Howard County Housing Commission

Stacy L Spann, Executive Director

Thomas P Carbo, Deputy Director

For additional information contact:

Samit Paul

Contracts Manager

6751 Columbia Gateway Drive, Third Floor

Columbia, MD 21046

410-313-6337

spaul@howardcountymd.gov

This is trial version www.adultpdf.com

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6751 Columbia Gateway Drive Columbia, Maryland 21046 Telephone (410) 313-6318 FAX (410) 313-6064

1.1 It is the intent of the Howard County Housing Commission (the

“Commission”) to enter into a contract with a qualified certified public accountant (CPA) firm (the “Contractor”) to provide financial auditing services and tax preparation services for the fiscal year for the Commission (July 1 thru June 30) and the calendar year for two other entities - The Residences at Ellicott Gardens, LLC and Monarch Mills, LP

as set forth in this Request for Proposals The Commission reserves the right to withdraw from the scope of the contract any services to be provided for Monarch Mills, LP or The Residences at Ellicott Gardens, LLC before the Contractor begins performance of such services The withdrawal shall be effective upon written notice by the Commission to the Contractor

1.2 The Commission shall be obligated during the period of the contract to

purchase all of its normal requirements of the services specified herein from the Contractor and the Contractor shall be obligated to supply the services required for operation

The contract period shall be for one year commencing on or about June 30, 2012, after approval and proper execution of the contract documents, with a renewal option for three additional years in one-year increments, exercisable at the sole discretion of the Commission

Organized in 1990, the Commission is an independent State-chartered Public Housing Authority The mission of the Commission is to provide safe, quality, affordable, and sustainable housing opportunities for low- and moderate-income families in Howard County, Maryland (the “County”) and to assist them in moving toward economic independence The Commission pursues this mission through open, efficient, innovative, and accountable processes

The Commission’s Board of Commissioners consists of seven members, each appointed by the County Executive and approved by the County Council The Commission develops and manages housing resources to benefit low- and moderate-income residents of the County In addition to owning and managing residential property, the Commission develops housing opportunities through cooperative efforts with developers, government entities, and private investors Additionally, the Commission operates the federally funded Housing Choice Voucher and Public Housing Programs for the County

4.1 All Contractors must be certified public accountants and must have been

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engaged in the business of providing government audit and review services specific to a public housing authority for a period of no less than five years Additionally, Contractor must have experience preparing audited financial statements and tax returns for tax credit and bond

financed properties

4.2 The Contractor must be licensed and in good standing to provide

government audit and review services under Maryland law

4.3 The Contractors shall have a proven record of providing the services

required

4.4 All Contractors shall complete the Contractor’s Qualification Information

Sheet

4.5 The Commission reserves the right to perform investigations as may be

deemed necessary to insure that competent personnel and management

will be utilized in the performance of the contract

5.1 Conduct a review of the Commission’s financial statements, financial

activities, and adherence to policy and procedures as dictated by the Commission’s bylaws and state and federal requirements for each fiscal year, in accordance with the provisions contained in this Request for

Proposals

5.2 Conduct a review of grant funds in accordance with generally accepted

auditing standards, the standards set forth for a financial review in the General Accounting Office's (GAO) most current Government Auditing Standards, the provisions of the federal Single Audit Act of 1984 and the Single Audit Act Amendments of 1996, and the provisions of U.S Office

of Management and Budget (OMB) Circular A-133, Audits of States,

Local Governments, and Non-Profit Organizations

5.3 Conduct a review of the Commission’s financial statements, receipt and

disbursement of funds, recording of funds, adherence to financial policies

and procedures, and financial investment of funds

5.4 Evaluate all of the Commission’s financial activities The agreed-upon

procedures contract is to be performed in accordance with standards

established by the American Institute of Certified Public Accountants

5.5 Perform review procedures for all financial contracts entered into with, or

on behalf of, the Commission that include:

5.5.1 Obtaining a trial balance on all projects, completing an analytical

review, and investigating any significant variances;

5.5.2 Tracing cash, accounts receivable from the Commission and

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supporting schedules;

5.5.3 Identifying and reviewing the internal controls related to all cash

receipts and cash disbursements;

5.5.4 Reviewing supporting details for restricted accounts;

5.5.5 Reviewing daily cash receipts, and comparing them to the cash

receipts recorded in the electronic register and classification of such receipts;

5.5.6 Reviewing comments from the prior year agreed-upon financial

statements and determining whether policies, procedures, and recommendations were followed The agreed-upon procedures are

to be performed in accordance with standards established by the

American Institute of Certified Public Accountants;

5.5.7 Expressing an opinion on the fair presentation of its basic financial

statements, in conformity with (GAAP) generally accepted accounting principles; and

5.5.8 Providing assistance in the drafting of financial statements and

footnotes

5.6 The Contractor shall conduct a review of the Commission’s financial

institution deposits and investment instruments This review shall also be

conducted in accordance with the Commission’s Bylaws and the County Code The Contractor shall ascertain the degree of reliability of accounting and financial data developed within the Commission’s concerning funds received as payment of rent, security deposits, and damage claims The Contractor shall determine if the receipt and booking

of these funds are consistent with applicable law and regulations The review shall be conducted in accordance with generally accepted accounting principles and in appropriate scope for the Contractor to express an opinion as to whether the Commission’s records reasonably reflect the funds received, costs incurred, and the classification of those

costs

5.7 The Contractor’s partners, managers, other supervisory staff and

specialists may be changed if those personnel leave the Contractor, are promoted or assigned to another office These personnel may also be changed for other reasons with the express prior written permission of the Commission In either case, the Commission retains the right to approve

or reject replacements

5.8 Consultants and contract specialists mentioned in response to this Request

for Proposals can only be changed with the express prior written permission of the Commission, which retains the right to approve or reject

replacements

5.9 Other audit personnel may be changed at the discretion of the Contractor

provided the replacements have substantially the same or better

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qualifications or experience

5.10 Required Reports:

5.10.1 Following the completion of the review, the Contractor shall issue

a draft report (for recommendations and comments) and subsequent final report on the fair presentation of the Financial Statements and financial activities in conformity with generally accepted accounting principles in the United States and Government Auditing Standards In addition, the audit must be in compliance with the Office of Management and Budget (OMB) Circular A133, “Audits of States, Local Governments, and

Non-Profit Organizations.”

5.10.2 In addition, along with the review of grant funds, the Contractor

shall prepare the required reporting package including the:

5.10.2.1Financial Statements and Schedule of Expenditures of

Federal Awards;

5.10.2.2Summary schedule of prior audit findings;

5.10.2.3Contractor’s reports:

5.10.2.3.1 A report which provides an opinion on the

Financial Statements;

5.10.2.3.2 A report which provides supplemental data on

each Commission-owned housing project (including partnership projects), financial statements on each project, a financial data schedule, supporting data required by HUD and CDA, project compilations where required, and

an opinion on the adherence to policy and

procedures;

5.10.2.3.3 A report which discusses the consideration of

internal control and compliance with laws and regulations as a part of the review of the

Financial Statements;

5.10.2.3.4 A report which discusses the consideration of

internal controls used in administering state and federal programs, provides an opinion on major program compliance and provides an “in relation to” opinion on the Schedule of Expenditures of Federal Awards including a

Single Audit Report;

5.10.2.3.5 Assisting with the preparation and electronic

submission of the annual financial information under the uniform annual financial reporting standards for HUD’s Public Housing, Housing Choice Voucher housing, and assisted housing

and multifamily insured housing programs; and

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5.10.2.3.6 Proposing journal entries

5.10.2.4Schedule of findings and questioned costs; and

5.10.2.5Corrective action plan

5.10.3 Irregularities and illegal acts: The Contractor shall make an

immediate written report of all irregularities, illegal acts and

indications of illegal acts to the Commission’s Executive Director

5.10.4 Reporting to the Commission’s Executive Director: The Contractor

shall ensure the Executive Director is informed of each of the

following:

5.10.4.1The Contractor's responsibility under generally accepted

auditing standards;

5.10.4.2Significant accounting policies;

5.10.4.3Other information in documents containing audited

financial statements;

5.10.4.4Management judgments and accounting estimates;

5.10.4.5Disagreements with management;

5.10.4.6Major issues discussed with management prior to

retention; and

5.10.4.7Difficulties encountered in performing the audit

5.10.5 Due Dates for Final Reports:

5.10.5.1The Contractor's report shall be delivered to the

Commission’s Executive Director by September 7, 2012

5.10.5.2The Contractor shall print and bind 20 copies of the audit

review report and submit an electronic version to the

Commission’s Executive Director

5.11 Working Paper Retention and Access to Working Papers:

5.11.1 All working papers and reports must be retained, at the

Contractor's expense, for a minimum of three years, unless the Contractor is notified in writing by the Commission to extend the retention period The Contractor shall make working papers

available, upon request, to the following parties or their designees:

5.11.1.1The County Government;

5.11.1.2U.S General Accounting Office;

5.11.1.3Parties designated by the Federal or State Governments or

by the County as part of an audit quality review process;

5.11.1.4Auditors of entities of which the County or the

Commission is a sub-recipient of grant funds; and

5.11.1.5In addition, the Contractor shall respond to the reasonable

inquiries of successor Contractors and allow successor Contractors to review working papers relating to matters

of continuing accounting significance

5.12 Availability of Prior Audit Reports: Interested Contractors who wish to

review prior years’ Audit Reports and management letters shall contact the

Commission to make a request

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5.13 The Contractor shall perform the following tax preparation services:

5.13.1 Prepare Maryland Personal Property Returns for: (1) HCH Partners

I, LLC; (2) HCH Partners II, LLC; (3) HCH Partners III, LLC; (4) HCH Partners IV, LLC; (5) The Residences at Ellicott Gardens,

LLC; and (6) Monarch Mills, LP

5.13.2 Prepare U.S Returns of Partnership Income and Maryland

Pass-Through Entity Income Tax Returns with all required schedules for: (1) The Residences at Ellicott Gardens, LLC; and (2) Monarch

Mills, LP

5.14 For The Residences at Ellicott Gardens, LLC (the “LLC”), the Contractor

shall:

5.14.1 By February 1, prepare and submit to the Commission for approval

a first draft of the federal and state tax returns for the previous calendar year with all accompanying schedules and all work papers used by the Contractor to calculate the amount of tax credit to be claimed by the LLC under the Low Income Housing Tax Credit Program Accountant’s work papers shall include but not be limited to the actual amount of Tax Credit to be claimed by the LLC for each year of the Credit Period, with supporting schedules

to show qualified occupancy, and a detailed depreciation schedule for all fixed assets After the Commission approves the first draft,

a final draft shall be prepared and sent to all members of the LLC

by no later than February 15

5.14.2 By February 1, prepare and submit to the Commission for approval

a first draft of the calculation of the distribution of annual net cash flow in accordance with the operating agreement of the LLC This includes calculating the amount of the deferred developer fee After the Commission approves the first draft, a final draft shall be prepared and sent to all members of the LLC by no later than

February 15

5.14.3 By February 10, prepare and submit to the Commission for

approval a first draft of the statements and report listed in Sections 5.14.3.1 thru 5.14.3.3 of this Request for Proposals After the Commission approves the first draft, a final draft shall be prepared

and sent to all members of the LLC by no later than March 1

5.14.3.1Audited financial statements, which shall include a

tax/GAAP reconciliation, for the most recent calendar year

in accordance with generally accepted accounting

principles and prepare an auditor’s report containing:

5.14.3.1.1 the Contractor’s opinion on the financial

statements;

5.14.3.1.2 a balance sheet and income statement with

supporting schedules or exhibits which shall

include an itemized listing of any loans payable;

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5.14.3.1.3 a disclosure of the fees and other remuneration

and reimbursed expenses from the LLC to the

managing member or its affiliate;

5.14.3.1.4 a statement of the equity of the members of the

LLC; and

5.14.3.1.5 a statement of cash flow

5.14.3.2An audited financial statement for the managing member

and each guarantor as of the end of the previous calendar year including, but not limited to, a balance sheet and

income statement with supporting schedules and exhibits

5.14.3.3An annual report of the balance in the Initial Operating

Reserve Account of the LLC and any other reserve account maintained by or on behalf of the LLC, as well as all

disbursements thereform during the prior year

5.14.4 By September 15, prepare and submit to the Commission for

approval a first draft of an estimate of each investor member’s respective share of distributions, tax credits, net cash flow, and net profit or loss and, if applicable, net profit from sale, net loss from sale and net proceeds from sale, of the LLC for income tax purposes for the current calendar year After the Commission approves the first draft, a final draft shall be prepared and sent to

all members of the LLC by no later than October 1

5.15 For Monarch Mills, LP (the “LP”), the Contractor shall:

5.15.1 By March 15, prepare and submit to the Commission for approval

a first draft of the audited financial statements of the LP for the previous calendar year including the balance sheet, related statement of operations, statement of changes in the capital accounts of the partners of the LP, statement of cash flows, and disclosure of any compensation paid to or for the benefit of the Commission or its affiliates with the report of the Contractor to the effect that such statements present fairly the financial position for the year then ended in conformity with generally accepted accounting principles applied on a consistent basis After the Commission approves the first draft, a final draft shall be prepared and sent to all members of the LLC by no later than March 31 5.15.2 By March 15, prepare and submit to the Commission for approval

a first draft of all information necessary for the preparation of the federal income tax return of the sole limited partner of the LP in respect of income, gains, losses, deductions, credits, the allocation thereof to each partner of the LP, including Form K-1 (or other comparable form subsequently required by the IRS), and a copy of the federal “Partnership Return” and any state or local Partnership tax return required to be filed by the LP After the Commission approves the first draft, a final draft shall be prepared and sent to

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all members of the LLC by no later than March 31

5.16 Perform any services not explicitly stated herein that the Commission and

Contractor agree upon at a later date

6.1 The Contractor shall purchase and maintain, during the term of the

contract, including any renewals thereof, such policies of insurance acceptable to the Commission as will protect the Contractor and the Commission from claims or losses, regardless of whether such claims or losses result from the Contractor's actions or omissions or those of a subcontractor or those of anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable The following coverages are mandatory but may not be all-inclusive, based on the

parameters of the proposal:

6.1.1 Worker's Compensation Insurance with limits of coverage as

follows:

6.1.1.1Coverage A: Statutory, covering Maryland jurisdiction; and

6.1.1.2Coverage B: Employer’s Liability coverage of at least

$100,000.00

6.1.2 Automobile Liability Insurance with combined single limits of

liability of at least $1,000,000.00 per occurrence

6.1.3 Commercial General Liability Insurance with combined single

limits of $1,000,000.00 per occurrence, naming “Howard County Government, Office of Risk Management” and “Howard County Housing Commission” as an additional insured Unless deemed unnecessary by the County or Commission, the policy shall contain, but not be limited to, the following coverage

endorsements:

6.1.3.1Contractual Liability, including Subcontractors;

6.1.3.2Personal and Advertising Injury;

6.1.3.3Products and Completed Operations; and

6.1.3.4Broad Form Property Damage

6.2 All policies of insurance shall be underwritten by companies licensed to

do business in the State of Maryland

6.3 The Contractor shall assure that all subcontractors performing services in

accordance with this solicitation carry identical insurance coverage as required of the contract, either individually or as an Additional Insured on the policies of the Contractor Exceptions may be made only with the written approval of the Commission Contractor shall indemnify the Commission for any uninsured losses relating to contractual services

involving subcontractors, including workers' compensation claims

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6.4 The Contractor shall not commence work under the contract until the

Commission receives evidence of all required coverage Further, the Contractor shall not reduce, cancel, or change any of the required

coverages without 60 days notice of such change to the Commission

6.5 The Contractor will not hold the County or Commission liable for any

injuries to the employees, servants, agents, subcontractors or assignees of the contract arising out of or during the course of services relating to this

agreement

6.6 The providing of any insurance required herein does not relieve the

Contractor of any of the responsibilities or obligations assumed by the Contractor in the contract awarded or for which the Contractor may be

liable by law or otherwise

6.7 Failure to provide and continue in force such insurance as required above

shall be deemed a material breach of the contract for which the

Commission may terminate the contract

7.1 The Contractor shall indemnify and hold the Commission harmless from

and against all liability and expenses, including attorney's fees, howsoever arising or incurred, alleging damage to property or injury to, or death of, any person arising out of or attributable to the Contractor's performance of the contract awarded, provided that the Contractor shall not be responsible for acts of negligence or willful misconduct committed by the Commission, its employees, agents and officials

7.2 Any property or work to be provided by the Contractor under this contract

will remain at the Contractor's risk until written acceptance by the Commission; and the Contractor will replace, at Contractor's expense, all property or work damaged or destroyed by any cause whatsoever

8.1 This Request for Proposals requires the return of the attached Document

A (Technical Proposal Signature Cover Page, Price Proposal Cover Page, and Schedules of Professional Fees and Expenses), Document B (Contractor’s Qualification Information), Document C (Affidavit), and any exceptions the Contractor may take (on company letterhead) Failure

to return required documents may be cause for rejection of proposal

8.2 Contractors shall submit one original, clearly marked as such, and five

copies of the complete proposal The cost of preparing proposals is the responsibility of Contractors Neither the Commission nor the County may photocopy your proposal documents for the purpose of complying with this provision requiring a pre-determined number of duplicate copies

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