Okaloosa County BOCC — May 17, 2016 — May 6 Minutes Audit Meeting Signed — reading text

Audit Selection Committee May 6, 2016 A meeting of the Audit Selection Committee was called to order at 9:10 a.m. in the 3" Floor Conference Room at the Brackin Building, located in Crestview. Members present were: J. D. Peacock II, Clerk of Circuit Court Paul Lux, Supervisor of Elections Benjamin F. Anderson, Tax Collector Nathan Boyles, Board of County Commissioners Doug Gaylord, representing Sheriff Larry Ashley Also in attendance were Gary Stanford, Finance Director; Kay Godwin, Deputy County Administrator; Zan Fedorak, Purchasing Manager; Keri Holguin, Tax Collector’s Office; and Shirley Young, Supervisor of Elections Office Mr. Peacock welcomed everyone to the second 2016 Okaloosa County Audit Selection Committee meeting. Mr. Boyles made motion, seconded by Mr. Gaylord, to approve the minutes for March 22, 2016. 5 yeas. Mr. Peacock stated the purpose of today’s meeting was to go over the vendor rankings to determine if personal presentations from the vendors were needed. Mrs. Fedorak reiterated the purpose of the meeting and further stated if the Committee is prepared to rank the vendors, the rating sheets will be required to be submitted today. If it’s decided presentations are needed, the ranking sheets can be submitted after presentations are completed. Mr. Peacock stated he was prepared to rank the vendors but opened the floor for a discussion on the matter. Mr. Gaylord said his understanding was the committee members would rank the vendors and determine where they ranked at today’s meeting, which Mr. Peacock stated that was his understanding as well, but he wanted to get a consensus from the Committee. Mr. Boyles said he was prepared to rank the vendors today without personal presentations. Audit Selection Committee May 6, 2016 In response to Mr. Lux’'s concerns, Mrs. Fedorak stated 1if the committee members have minor questions regarding the proposals, they could present them to her and she would follow up with the firms for clarification. Mr. Lux said the ranking sheet reflects similar information in category two (Ability, capacity, and skill of the proposer to perform the services on a timely basis), three (Experience of the business & individual members of the Dbusiness in accomplishing similar services) and next to last (References & recent, current, and projected workload capacity of proposing auditors). He stated they all have a wealth of experience and their number of staff and hours are almost identical. He further stated he is aware the committee is not allowed to use price as the sole determining factor and the prices varied widely but several of the lowest numbers are out of county/state vendors. Mr. Lux asked if the firm traveled to Okaloosa County unprepared and had to return at a later date, how would it affect the price submitted--would the County be invoiced for the price submitted or a different price as a result of exceeding the allotted hours? He further noted local firms can return the following day versus an out-of-county firm. Mr. Peacock said he assumes travel was factored into their responses to the Requests for Proposal (RFP) and that would be a negotiation conversation. If selected, they can be held to the price they bid; however, that’s a discussion Purchasing would initiate. Mr. Anderson shared Mr. Lux’s concerns and further stated one distinction between those two firms are they had the smallest number of hours allocated (Warren Averett 1960 hours and Carr, Riggs, & Ingram (CRI) over 2000 hours). When factoring the number of hours allocated and their gross amount, they have the lowest gross amount but the highest per hour cost, approximately $450.00 per hour. He said there’s the possibility of them requesting additional monies after proposing the lowest amount. Mr. Peacock expressed his concern as well and stated upon his reference review that he noted work in a Florida county similar in size to Okaloosa County, whereas the other firms did not 2 Audit Selection Committee May 6, 2016 reflect a county similar 1in size. He felt they won’t have knowledge of Okaloosa County’s workload and tends to look at Warren Averett’s numbers for reference. Mr. Gaylord agreed with Mr. Anderson’s assessment of the lowest bidder and assumes the local vendor has a realistic assessment based on this area versus the out of county/state firms. Discussion ensued regarding the lowest bid and hours claimed. Mr. Boyles stated the engagement partner (Mr. Stephen C. Riggs IV) for Carr Riggs Ingram is also a voting member on the Triumph Gulf Coast Board. As a result, Mr. Boyles said he did not score them because he feels it’s a conflict of interest. He further discussed a letter he received from the engagement partner approximately six to nine months earlier “Yeffectively excoriating Okaloosa County" in certain things it needed to do if the county expects to be competitive once he was making decisions on Triumph dollars. Mr. Boyles said he doesn’t feel Mr. Riggs can sit in a non-judgmental capacity as the County’s auditor. Mr. Peacock questioned whether it was noted in their Independence, which 1s the purpose of the commentary. Mr. Boyles reiterated they would receive a zero rating from him. Per Mr. Gaylord’s inquiry, Mr. Boyles provided a brief overview of Triumph Gulf Coast. Mr. Boyles further stated it could be his intention to abstain from voting at the Triumph level as the perceived resolution to the conflict, but he finds it as damaging for Okaloosa County as not abstaining. Mr. Anderson disagreed with Mr. Boyle’s comments and stated CRI could reappoint a lead auditor 1if there is a conflict. He further stated they have more than one person qualified so if there is a need for clarification as to how he considers the two roles and whether there’s a conflict, they deserve the right to be heard. He stated he could have planned to resign from the Triumph Board. He said that matter should have been provided to staff for follow-up. Mr. Boyles stated this process is not one where they are allowed to change their proposals to be the best and further stated it’s a competitive process. Extended discussion ensued between Mr. Boyles and Mr. Anderson regarding the perceived conflict of interest. Mr. Peacock said a perceptive auditing is a healthy skepticism of the processes as well as the outcomes and in this case, if applied, would 3 Audit Selection Committee May 6, 2016 cause him to get closer to Mr. Boyles’ position. He further asked if CRI 1is not selected, does it harm the County or if selected, 1s the County helped. He asks if CRI should be scheduled for a presentation and 1if so, how do we determine which wvendors will provide a presentation. He further stated there are enough questions today to consider presentations. Mrs. Fedorak asked if Mr. Riggs would audit monies provided by Triumph to Okaloosa County. Mr. Peacock said the primary concern would be whether he would be auditing for Okaloosa County or as a Triumph member. Mr. Boyles said the beauty of the process is all members have an opportunity to score individually and his choice is to rate CRI with =zeros. Mr. Gaylord said if he had been aware of the potential conflict with CRI, it would have affected the way he rated them and 1s concerned there 1is a perceived conflict of interest. Mr. Anderson said the matter should be addressed with CRI but Mr. Peacock stated rewriting the rules after-the-fact is not a matter he would support; however, severing their relationship with Triumph Gulf Coast is different. Mr. Anderson questioned whether there are any conflicts with Warren Averett being a member of the local community (as with the others in their community). However, he wasn’t aware of any conflicts but feels background checks could resolve the matter. Mr. Boyles said 1f CRI had elected to divulge it’s engaging partner was on the Triumph Gulf Coast Board, his decision would have been different. He further stated his decision will not change. Mr. Peacock confirmed Mr. Riggs as being a member of Triumph by reviewing the Triumph Gulf Coast minutes. In response to Mr. Peacock’s suggestion to entertain a motion to rank the firms and discuss the need for presentations, Mr. Anderson stated he questioned the wvalidity of the committee since one committee member is rating one of the firms with zeros across the board which he feels eliminates one of his top considerations. Following discussion about the calculation of scores, Mr. Boyles said upon conclusion, the committee is not compelled to be bound by the math. Mrs. Fedorak concurred. Mr. Boyles made motion to Audit Selection Committee May 6, 2016 tally the scores and reconvene discussion. For lack of a second, Mr. Peacock said the motion dies. Again discussion ensued regarding Mr. Boyles decision to rate CRI with zeros and the rating process. Mrs. Fedorak said the calculations are tools to aid in getting the best firm for the job. Mr. Peacock said the desire of Purchasing 1is to create a numeric value to utilize for making a decision. Mr. Anderson questioned whether the firms could be rated 1-4 individually for consensus, to which Mr. Gaylord agreed. Mr. Peacock said we will see if there is a consensus from the committee by rating them individually based on a 1-4 rating scale, the lowest number being the best and provide scoring sheets to Mrs. Fedorak to tally. Mr. Anderson made motion, seconded by Mr. Gaylord to individually rate each firm based on a 1-4 rating scale, the lowest number being the best. 5 yeas. Mrs. Fedorak said the score sheets are used to show auditors the committee members effectively went through a process to review the documents ensuring the most qualified vendor by consensus is chosen. RECESS - The meeting was recessed at 10:06 a.m. and reconvened at 10:20 a.m. Mr. Peacock said Mrs. Fedorak tallied the score sheets per direction of the Committee. Mrs. Fedorak stated the vendor ranking No. 1 was Warren Averett scoring 7 points; Carr, Riggs, & Ingram and Moore, Stephens, Lovelace tied for No. 2 scoring 12 points; and No. 3 was Mauldin & Jenkins scoring 19 points. Mr. Boyles made motion, seconded by Mr. Gaylord, to accept the rankings and to designate this committee’s recommendation as Warren Averett. Per Mr. Anderson’s request, Mrs. Fedorak restated the rankings and sald they were based on the committee’s recommendation to rank the vendors on a grading scale of 1-4, the low score wins. She further stated Warren Averett’s ratings were 1,1,1,2,2. In response to Mr. Lux’s question regarding the next step, Mr. Peacock said the tallying is complete and a motion 1is on the floor. Mr. Boyles stated the point of his motion was to note Audit Selection Committee May 6, 2016 there is enough distance between the No. 1 and No. 2 rankings to preclude further discussion. Mrs. Fedorak stated the ratings for Carr, Riggs, & Ingram was 2,3,2,4,1 and Moore, Stephens, & Lovelace was 3,1,3,2,3 (The rating for Mauldin & Jenkins was not stated.) Mr. Peacock said he feels the purpose of the meeting was to ensure each committee members’ vote counted and there’s a healthy respect for individual components of the presentations given in response to the RFP. He said he feels the process of utilizing the individual rankings as our own individual score tally we are able to find consensus out of what had worked well in past committees and feels it gives the committee members a way to apply the metrics as well knowing their vote counted equally. Mr. Peacock, in response to Mr. Lux’s inquiry, said he believes the committee 1is able to function in the absence of a member (Mr. Pete Smith, Property Appraiser) and sees no reason not to proceed. Mr. Gaylord concurred with Mr. Peacock and stated his vote would not have impacted the outcome. 5 yeas. Mr. Peacock stated the minutes will be transcribed by Tuesday, May 10, 2016 and copies will be provided. He said absent responses, he would generate a letter with the committee’s