TEXAS LOTTERY COMMISSION REQUEST FOR PROPOSALS FOR ANNUAL FINANCIAL ...

[Pages:5]TEXAS LOTTERY COMMISSION REQUEST FOR PROPOSALS FOR ANNUAL FINANCIAL AUDIT SERVICES

#362-2019-0002

RESPONSES TO PROPOSERS' QUESTIONS

February 13, 2019

REQUEST FOR PROPOSALS FOR

ANNUAL FINANCIAL AUDIT SERVICES RESPONSES TO PROPOSERS' QUESTIONS

Note to All Prospective Proposers:

The following responses include questions submitted in writing by the RFP deadline. In its answers to the following questions, the Texas Lottery has attempted to provide both accurate and thorough responses. Some answers may clarify or modify the RFP, and every Prospective Proposer is on notice of each answer's content. Answers that modify the RFP are so noted. Answers apply only to the facts as presented in each specific question. Proposers shall review all sections of the RFP along with this document to ensure a complete understanding of the requirements. Any exceptions to the RFP shall be noted in the proposal, as required under Section 2.7 of the RFP. Please note: Any questions regarding the HUB Subcontracting Plan (HSP) are in a separate document that will be updated throughout the procurement process.

PRE-PROPOSAL CONFERENCE QUESTIONS AND RESPONSES ? January 29, 2019

No prospective proposers attended the Pre-Proposal Conference, therefore, the conference was canceled.

WRITTEN QUESTIONS RECEIVED BY February 7, 2019 @ 4 P.M.

1. Why is the Lottery going out for audit?

RESPONSE: Texas Government Code ?466.017 requires an annual independent audit of the Commission. The current financial audit contract ends March 31, 2019.

2. What reconciliation procedures are performed between the different investment managers and custodian and how often?

RESPONSE: The Commission's investments are held by the Texas Treasury Safekeeping Trust Company. These accounts are reconciled by the Commission throughout the year and annually.

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3. Are there going to be any significant changes to the system that would significantly change its investment vehicles or benefits provided? If so, what are they? RESPONSE: The Texas Lottery does not anticipate significant changes at this time, nor is aware of any legislative proposals that would result in significant changes.

4. What are the key qualities that the Lottery is expecting from their auditors? RESPONSE: Please refer to RFP Section 4.1 and Part 6.

5. Were there any issues with the current auditor? RESPONSE: No.

6. Were there any journal entries discovered by the auditors during the 2018 audit process? RESPONSE: No.

7. How many auditors and how many days were the auditors in the field for interim and final fieldwork? RESPONSE: Hours billed for the previous 3 fiscal years were:

FY 2016 audit period ? 578.5 hours FY 2017 audit period ? 493.0 hours FY 2018 audit period ? 576.0 hours

8. How soon after year end can the auditors be in the field?

RESPONSE: It is preferred that field work begin no sooner than the third full week in October.

9. When will the financial statements available to the auditors for review?

RESPONSE: Historically, the trial balances have been available for audit by the end of the third full week in October. In the past couple of years, however, the Commission has not been able to update those trial balances and related notes with pension and other post-employment benefit (OPEB) information until later in the process pending receipt of the data from the Employees Retirement System. Please refer to RFP Section 6.7.5.

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10. What is the Lottery's preferred timing for the audit? RESPONSE: The preference for interim work is late July or early August. It is preferred that field work begin no sooner than the third full week in October. Please refer to Section 6.7 of the RFP for additional timeline requirements.

11. Outside of the audit process, what does the Lottery find/define value from its auditors? RESPONSE: The Texas Lottery declines to answer.

12. Were there any major audit issues identified for 2018? Any anticipated ones for 2019? RESPONSE: No.

13. What part of the audit process would the Lottery like to improve over the past audits? RESPONSE: The Texas Lottery declines to answer.

14. What transition issues would the Lottery be concerned about if the audit is awarded to new auditors? RESPONSE: The Texas Lottery has no concerns about transitions for this contract and has transitioned this work successfully from one vendor to another in previous years.

15. Have there been any significant changes in key staff in the past year that would affect the 2019 audit? RESPONSE: No.

16. Are there any significant changes in federal funding anticipated for 2019? RESPONSE: The agency does not receive federal funding.

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17. What were the fees for the prior year audits for the Lottery? RESPONSE: The total not-to-exceed contract amount for FY 2018 was $71,976.

18. Upon review of liquidated damages section of the RFP, Section 3.48, it appears that TLC is preassigning a dollar amount for liquidating damages. If this is indemnification of a liability of TLC's, we believe this may impair independence. Could you please address how your current auditors have navigated this section of your Contract? RESPONSE: Liquidated Damages are required for all Texas Lottery contracts under the Texas Government Code ?466.102, and have been included in prior audit contracts. If you have any specific exceptions to the RFP, please refer to RFP Section 2.7.

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