Questions/Answers for DFS AD RFP 10/11-02 Recovery Auditing Services 1. Is payment to the contractor be exclusively based as a contingency fee? In other words, the auditor (contractor) needs to find some overpayments, and the vendor remit back to DFS in order to get paid? Yes. The fee will be based on a percentage of the amount deposited by the Department of Financial Services (DFS) as a result of the services performed by the Contractor. 2. Have the regulatory aspects on contingent fees under Rule 61H1-21.005, and Rule 61H1-21.003, Florida Administrative Code, been addressed? It is recommended the proposers who anticipate using CPAs for services confer with an attorney to advise if CPAs are legally precluded from participation in an arrangement such as is contemplated by the RFP. 3. In other words, would a CPA undertake this assignment under the "contingent fees" prohibition under these rules? Please see response to Question #2. 4. We are qualified to respond; however, not unless this method of payment is allowed under Chapter 473.319, Contingent fee, Florida Statutes, and Chapter 61H1, FAC, it may not be allowed for CPAs to be paid based on a contingency. Please see response to Question #2. 5. When an apparent overpayment is identified by contractor and paper and electronic backup confirms the claim is valid, would the contractor be required to gain acknowledgement or some sort of approval from the State of Florida, before presenting the claim to a vendor? If so, please specify the approval criteria, process steps and the timing of the process steps? Yes. The Contractor must seek approval from DFS before presenting the claim to a vendor. DFS will validate documentation provided by the Contractor to determine the accuracy of the claim by reviewing available internal information. Timing of the process may vary depending upon the type of claim submitted and the level of detailed documentation provided to support the claim. 6. Will the State of Florida provide a letter and claim template for the contractor to communicate with and document the specifics of a claim, to a vendor who received overpaid funds? The Contractor shall develop letters and/or claim templates and will seek prior approval from DFS before their use. See Attachment C., 2.3.1. 1, RFP Questions Answers 20100927 (2)
7. Will a vendor credit memo or signed acknowledgement be sufficient for the State of Florida to recoup the overpaid funds, by taking a deduction against amounts currently owed the vendor? 8. Would the contractor identified valid claim amount, be reduced by funds (current or past) owed by the State of Florida to the vendor (resulting in a reduced recovery fee)? 9. Would the contractor be paid a recovery fee on a valid claim of overpayment, if a vendor disputes the overpayment claim for refund, because the admitted overpayment was applied to another invoice(s)? 10. Reference Question # 9 above, if a vendor makes the above claim and the funds were applied to another invoice without written approval, or if the invoice was cleared by application of overpaid funds by the vendor, but the cleared invoice was paid on another check, would the contractor be paid a recovery fee for the original claim amount? 11. Will the State of Florida take a deduction from future payments due a vendor, if the vendor disputes a valid claim of funds due the State of Florida? This RFP covers recovered funds (deposits to Treasury) only. 12. Will the State of Florida take a deduction from future payments, even if disputed by a vendor, after a certain period of time from claim date? Please note: Medicare uses a time certain mandatory deduction. Please see response to Question #11. 13. If the State of Florida no longer does business with a vendor who refuses to refund overpayment, what action will the State take to recover the State s overpaid funds? The Contractor shall make an attempt to collect the overpayment from the vendor. If the vendor refuses to refund the overpayment, DFS may pursue collection using an existing debt collection agreement available for all agencies of the state. 2, RFP Questions Answers 20100927 (2)
14. If a valid claim is presented to a vendor prior to the end of the contract year, but the State of Florida is not repaid the overpaid funds before the end of the contract, would the claim be treated as in Question # 12 above and carried over and the contractor paid a recovery fee for its work performed during the contract year? To the extent that the claim is not disputed by the vendor, payment must be recovered and received (i.e. deposited) by DFS during the contract term in order for the Contractor to receive compensation. DFS has no control over when the vendor will make payment. 15. (Two Part) Are there any circumstances the State of Florida would not insist overpaid funds be refunded to the State? Would the State of Florida pay the contractor a recovery fee for the fully documented valid claim amount, despite for any reason, not insisting the overpaid funds be repaid? (1) There are not any circumstances where DFS would not require a non-state (i.e. not a state agency) vendor to refund the overpayment. (2) DFS will pay a recovery fee for overpayments received from non-state vendors as a result of the Contractor s actions. 16. Will there be any vendors excluded from the three fiscal year purchase and payment record examination leading to recovery of State of Florida overpaid funds? There are no non-state vendors excluded from the three fiscal year purchase and payment record examination leading to recovery of State of Florida overpaid funds. 17. As a result of this contract, could it be modified allowing access by other State of Florida agencies or local municipalities as DFS Management Consulting Services contract 973-001- 06-1 allows? No, the conditions of the time period covered and payments eligible for review are unique to DFS and are too selective to be used by other departments or units of government. 18. Is CBE certification submitted with bid? Other than tie-breaking are there any other CBE provisions in the bid considerations? The Certified Minority Business Enterprise (CMBE) certification must be submitted with the Proposal to be considered in the event of a tied score. See Attachment B, Identical Tie Response Certification. There are no other considerations available. 19. Would the State of Florida consider expanding the recovery audit to include a recovery audit for Medicaid? The Patient Protection and Affordable Care Act of 2010 expanded the CMS Recovery Audit Contractor (RAC) Program to State Medicaid Programs. The program mandates the use of recovery audit contractors and requires States to have a plan in place for a recovery audit by December 31, 2010. CMS will maintain oversight of the program; however, the States will contract directly with the contractors rather than through CMS. This program is entirely separate from the Medicaid Integrity Audit Programs that are now in place. By expanding the audit to include Medicaid, you would be able to meet the Medicaid 3, RFP Questions Answers 20100927 (2)
requirements with one audit. Also, it would make the recovery audit more attractive to recovery auditors. See response to Question #17. 20. We would be very interested in parenting with a larger vendor to work on your project. Is there a way we can contact vendors responding to your RFP to explore possible partnership opportunities? Yes, you may partner with the successful proposer, but DFS has no control over this. Bid tabs are available upon request after the proposal opening which would indicate the vendors responding to the RFP. 21. For the period covered by this RFP, have all accounts payable for the 12 Divisions been processed from one location? Are all processed vendor paper records, subject to this RFP, currently stored at this same location? How many team members process the 12 Division accounts payables? All payments were processed in Tallahassee at two locations. Documentation for payments is maintained in multiple divisions in Tallahassee. Approximately 15 team members are involved in the accounts payable process for DFS. 22. Are all State vendor invoices and related accounts payable documents filed alphabetically or by another method? Invoices are attached to voucher schedules [many to one] and are filed by voucher number. 23. SECTION 1: INTRODUCTORY SECTION 1.21 Purpose - Reads in part as follows: The requested Services include the analysis of Department provided documentation, detection, confirmation, and recovery requests for inadvertent overpayments made by the Department to vendors resulting from. ATTACHMENT C 2. TECHNICAL SPECIFICATIONS, Requirements 2.3.2 Reads as follows: The Contractor has the sole responsibility for collection of overpayments. The Contractor shall work with the vendors to secure payments that are owed to the Department as a result of the review conducted by the Contractor. State of Florida PUR 1000 General Contract Provisions section 20. (page 8) para. 2, setoff provision, which reads in part: The State and Customer (state agency) may, in addition to other remedies available to them retain such monies from amounts due Contractor (vendor). Since the setoff provision noted immediately above, is included in and applies to all State vendors, this provision naturally applies to all overpayment refund requests issued to vendors, especially to those who dispute or refuse to refund overpaid State funds in a timely 4, RFP Questions Answers 20100927 (2)
fashion? Would this provision be included in Contractor or State written and verbal communications, which request refunds of overpayments, issued to the vendors? In general no, however if the underlying contract or agreement contains the provision for which the claim is presented, set off may be an option. 24. ATTACHMENT C 2. TECHNICAL SPECIFICATIONS, Requirements 2.3.3 Reads as follows: The Contractor must solicit the Department s opinion about whether a detected overpayment should be recovered. The Department shall use its discretion when determining whether a payment should be recovered. SECTION 2: TECHNICAL SPECIFICATIONS AND SCOPE OF WORK 2.1 SCOPE - Reads in part as follows: The Chief Financial Officer has the responsibility, pursuant to Section 17.04, Florida Statutes, to settle accounts of persons who may be indebted or accountable to the state, and require them to pay such moneys to the state treasury. Reference ATTACHMENT C 2. TECHNICAL SPECIFICATIONS, Requirements 2.3.3, could the precise intention and consequence of discretion be stated: a) what discretion means in this context, b) when discretion could apply, c) under what specific circumstances could discretion be applied, d) what person could apply discretion and what could be the applied result of discretion? DFS is committed to collecting moneys due the Department. However, circumstances may dictate another approach is appropriate. DFS needs the latitude to pursue other options with its vendors. 25. Are there specific circumstances discretion, advanced in ATTACHMENT C 2. TECHNICAL SPECIFICATIONS, Requirements 2.3.3, could be in conflict with the Chief Financial Officer F.S. section 17.04 responsibilities noted in 2.1 SCOPE referenced above? See response to Question #24. 26. Has discretion by the State been previously applied as in Question # 24 above? Please cite an actual example, that would not conflict with confidentiality provisions. DFS attempts to collect on all overpayments, and those that are uncollectible are referred to a collection agent. 27. As a matter of routine business policy or practice, has the State, through its own resources, when or if it has realized it has made an inadvertent overpayment to a vendor, does or has the State immediately proceeded to recoup the overpaid funds by setoff against current amounts owed a vendor? No, not for DFS. 5, RFP Questions Answers 20100927 (2)
28. Will all the filed State documents, the basis for purchasing a product or service, control and be deemed conclusive? Vouchers with their supporting documentation were used as the basis for the initial payment. However, there is no legal authority for documentation to be deemed conclusive. 29. On what date did each the 12 State Divisions begin scanning vendor accounts payable documents into a backed-up retrievable electronic format? For all three fiscal years, the majority of vouchers schedules and backup documentation are in an electronic format; the remainder are available in hard copy. 30. Will all State Purchase Order & vendor transaction detail documents that are available in a backed-up scanned electronic format, be made available for remote access via a secure VPN? What sign-in provisions would be involved? No, access to this information will be available onsite in Tallahassee. To be finalized during initial meetings. 31. Will the State accounts payable system be made available to the Contractor on an INQUIRY ONLY identifiable, track able and accountable sign-in basis, available for remote access via a secure VPN? What sign-in provisions would be involved? The state s accounts payable system will not be available; Contractor will be provided data files pursuant to Attachment C, 3.3.1. 32. In addition to a fundamental electronic historical transaction report, will the State provide additional relevant electronic reports as requested by the Contractor? Should additional relevant electronic data report request(s) be part of the Bid Proposal? 1 - Yes, DFS may provide additional relevant electronic reports as required, but it will depend on the level of effort necessary to obtain the requested information. 2 The Proposer may do so, if desired. It is not a requirement of this RFP. 33. The State of Florida PUR 1000 General Contract Provisions section 28. Advertising. (page11), is restrictive. Just as the State would want their information and Contractor work product held in the strictest of confidence, other clients also maintain like proprietary limitation. In the spirit of respecting client confidentially, is there a manner to provide reference information, which would not become part of the public record/domain or can the references be submitted to the State for the sole purpose of this RFP response, preventing persons other than the State RFP evaluators from viewing the reference information? If not, will the State remove this requirement? The request will not be removed. All materials submitted will be subject to public disclosure pursuant to Chapter 119, Florida Statutes unless exempted by statute. Refer to Section 3.4.4 for more information. 6, RFP Questions Answers 20100927 (2)
34. Technical Bid/Proposal Content Proposal Section 1 - Section 1 Tab 2 Management Summary, asks Proposer to include information confidential client information, which states in part: including dollar amounts and percentage of recovery. Will the State remove the above specific requirements from the bid proposal, respecting client privileged information as in Question 33 above? See response to Question # 33. 35. As a result of an RFP bid Proposal submission, will Contractor financial records become accessible by any person and become part of the public record/domain or can the records be submitted to the State for the only purpose of this RFP response, preventing persons other than the State RFP evaluators from viewing the Contractor financial records of a private company? If not, will the State remove this requirement from the bid proposal? The (financial) record cannot be submitted for the sole purpose of this RFP response. See response to Question # 33. 36. How many business days are allocated for the Project Liaison (DFS) designee to evaluate Contractor submissions of proof of overpayment, make determination and confirm in writing back to Contractor (via email), agreement with Contractor s overpayment finding? Timing of the evaluation will vary depending upon the type of claim submitted and the level of detailed documentation provided to support the claim. 37. In the event the Contractor does not currently utilize an on-line system, would a weekly electronic submission of an up to date spreadsheet in a Microsoft Excel format, emailed to the Project Liaison designee, thus achieving internal access control by the designee, be sufficient to meet the State Requirement for the Contractor to create an ad-hoc report by an independent system or software and provide access to this system by which the Departmental support services representatives can monitor the project and have the ability to filter, select fields, sort, group and summarize system standard reports? In the alternative, would an on-line system created exclusively for this project, with authorized State designee sign-in, containing the referenced excel spreadsheet information, meet the purpose and intention of this requirement? Can the State provide an explanation of financial benefit to the State for this on-line requirement? 1 Yes; however, preference will be given to those respondents with an online system with consideration given to the extent in which the online system provides DFS with research capabilities. 2 Yes 3 Provides DFS with additional research capabilities to identify potential patterns of overpayments. 7, RFP Questions Answers 20100927 (2)
38. Has there been an accounting system upgrade/conversion during the period to be examined and what were the date(s)? No, all records have been maintained in the same systems for the entire period. 39. For a small business, the minimum insurance amounts required by the RFP to be provided, may be burdensome and unwarranted, given the type of work to be performed. Will the State reduce the amounts as a result of this matter being raised and in consideration of the substance of work and location of the work to be performed? Would CBE status be a supplementary factor on this subject? DFS is willing to reduce the minimum insurance amounts to the following: a) Commercial general liability, bodily injury, property damage: $750,000 per occurrence/ $1,500,000 aggregate. b) Automobile liability coverage, bodily injury, property damage: $750,000 Combined Single Limits. 40. Will all individual (responsive and non-responsive) RFP submissions, in their entirety, be made available to view on-line, at what internet address and on what date? The records will be available for inspection, pursuant to Chapter 119 Florida Statutes, but they will not be available online. 41. Please define Lowest Responsive fee rate and Evaluated fee rate as used in SECTION 3: SPECIAL CONDITIONS - EVALUATION PROCESS 3.3.5 Evaluation Criteria COST PROPOSAL D. Lowest responsive fee rate: the lowest fee rate among the Proposers who meet the minimum qualifications for evaluation. Evaluated fee rate: the fee rate of the Proposer being considered / scored. 42. Is this audit strictly recovery base? Yes. Refer to Section 2.1 Scope, of the RFP. 43. Is the recovery the only basis for compensation? Yes. 44. Are there other pricing structures? If so, please provide examples. 45. Is there a possibility of breaking down the contract for Accounting and Collections? 8, RFP Questions Answers 20100927 (2)
46. What type and how many applications will be involved for the analysis across 12 divisions? DFS has a database containing financial transaction history and a scanning application that contains payment information (e.g., vouchers, invoices, supporting documentation) in a scanned format. 47. Can you provide the systems within each department for general ledger and all systems required to issue payments including version? For example, general ledger Oracle Financials 11.5. The only GL system and most payables are processed using the Florida Accounting Information Resource (FLAIR), the State s enterprise legacy financials system. It is a predominantly on-line transaction processing system originally developed using ADABAS. STARS (SQL server application) is used by the Division of Risk Management for claims administration. Version 9.3 MyFloridaMarketPlace (MFMP) The State of Florida s on-line procurement system owned and managed by Department of Management Services. Contractor could get a report, would then need a state staff to perform specific inquiry to the documents. 48. Have any recovery audits been provided in any of the proposed years in scope? Can you provide the name of the form that provided these services? Not for DFS. 49. What are the controls in place to prevent inappropriate overpayments by division? Generally, Program areas (divisions) approve original invoices based on 3-way match (receipt of goods and services, inspection and approval of goods and services, receipt and approval of invoice) Contractual service agreements and procurement system-generated purchase orders are encumbered against current available budget Invoices for payments under an executed contract are validated against the contract for appropriateness. Program areas prepare partial pay documentation when entire agreement is not paid with a single payment Most DFS procurements are initiated in MyFloridaMarketPlace which has functionality to prevent overpayments and duplicate payments when invoices are submitted for payment by the vendors. DFS utilizes a Purchasing Card as a payment mechanism for discretionary type purchases. DFS performs a monthly reconciliation for all PCARD purchases to ensure appropriateness. 9, RFP Questions Answers 20100927 (2)
Requests for payment are forwarded to dedicated payables staff in DFS Division of Administration accounting office who reviews the request for sufficiency and appropriateness and enter the payment information into FLAIR. DFS Accounting Supervisors also review requests for payment to ensure appropriateness prior to entry into FLAIR. Payments are vouchered and are subject to pre-audit sample by DFS, Division of Accounting & Auditing. Vouchers are posted and paid by Division of Accounting and Auditing. Warrants are returned to DFS accounting office for mailing. 50. What are the number of invoices and purchase order lines included in the payment numbers? This level of detail is not available. FLAIR does not maintain this level of detail. 51. What format will the data be provided? DFS has a database containing financial transaction history which can be downloaded into an Excel format. See Response to Question #47 re. MFMP. 52. How long will the data extract take? Financial transaction history will be provided upon execution of the contract and then by the 5 th business day of the month following for subsequent months. 53. What are the preferred formats the data will be provided in? Contractor shall provide data in an Excel format. See 2.1.4.3. 54. What percentage of spend is under contract? This level of detail is not maintained, and would be difficult to determine accurately. 55. What format are the contracts and purchasing agreements in? Have these documents already been collected and will be provided at the onset of the project? 1 - Contracts are maintained in PDF format. Purchase Agreements are maintained in MFMP. 2 - No, they will be available on request. 56. Will we have read only access to systems to perform validation? Read-only access will be provided where this functionality exists. 57. How much time can we expect to have on a weekly basis from a project liaison? The Project Liaison, or designee will be available to assist the Contractor, however, the amount of time on a weekly basis has not been set. 10, RFP Questions Answers 20100927 (2)
58. What State entities are included in the scope of the proposed audit procedures? Department of Financial Services, not including the Financial Services Commission. See Section 2.1. 59. Has the organization undertaken any specific internal audit or other audit procedures to review the payment activity contemplated by the RFP? If so, what was the result of those procedures? No, not for DFS. 60. Has the organization been subject to a similar audit project in the past? If so: how long did the project last? when was that project conducted? how much was recovered? what was the fee rate? No, not for DFS. 61. Are capital projects maintained separately from expense purchases? Are capital appropriation requests and supporting documentation available for review? DFS has not received appropriations for Capital projects during the period outlined in Section 2.1. 62. What percentage of the vendor invoicing is paper-based and available locally? The Division of Administration maintains scanned documents of invoices. The Division of Risk Management and the Division of Workers Compensation Special Disability maintains paper invoices. All DFS invoices are located in Tallahassee. 63. Are invoices filed electronically (scanned)? See response to question # 62. 64. If so, what percentage of the invoices are available electronically? DFS does not have this information. See response to question # 62. 65. Will the organization allow access to the invoice images remotely (i.e., from consultant s office location)? See Attachment C.2.7. 11, RFP Questions Answers 20100927 (2)