REQUEST FOR PROPOSAL
Independent Third Party Forensic Financial Audit
Issued by: The City of Benton Harbor, Michigan
Date Of Issuance: October 22, 2026
Proposal Submission Deadline: November 12, 2026, 4:00 PM (Eastern Time)
The City of Benton Harbor is seeking an independent firm to examine suspected or identified discrepancies involving city-issued credit cards and to investigate money, transactions, records, controls, and other financial matters within the authorized scope. The engagement may expand when credible evidence identifies related financial irregularities.
1. Introduction
The City of Benton Harbor, Michigan (City) invites proposals from qualified, independent certified public accounting firms or forensic accounting firms (Respondents) to perform an independent third-party forensic financial audit. The engagement will examine City-issued credit card activity and any related or other financial discrepancies, irregularities, misuse, waste, fraud, abuse, control failures, or unsupported transactions identified within the authorized review period and scope.
This solicitation is intended to obtain an objective, evidence-based examination that protects public funds, establishes a reliable factual record, identifies control weaknesses, quantifies questioned or unsupported amounts when practicable, and provides corrective recommendations. The selected firm must remain independent of City management, employees, officials, vendors, and other persons or entities whose conduct or records may be reviewed.
The City may reject any or all proposals, waive informalities, request clarification, negotiate scope or terms, cancel or reissue this RFP, and select the proposal determined to provide the best value. The City is not required to select the lowest-cost proposal.
2. Background and Purpose
2.1 City Overview
The City is a Michigan municipal corporation located in Berrien County. Its departments and offices receive, safeguard, authorize, spend, transfer, account for, and report public funds through credit cards, bank accounts, purchasing systems, payroll, accounts payable, cash-handling operations, grants, revenue systems, and other financial processes.
2.2 Purpose
The City seeks a firm capable of following the evidence beyond an initial credit card review. The investigation is not limited to credit cards, cash, or any single account, person, department, vendor, funding source, or transaction type. Subject to the engagement agreement and written City authorization, the selected firm shall examine related financial activity necessary to determine the nature, extent, cause, responsible control points, and financial effect of discrepancies.
2.3 Objectives
• Determine whether transactions were authorized, supported, accurately recorded, for a valid public purpose, and compliant with applicable law and City policy.
• Identify indicators or instances of fraud, misuse, diversion, waste, abuse, concealment, conflicts of interest, or circumvention of controls.
• Trace questioned funds from initiation through authorization, payment, deposit, transfer, reimbursement, accounting, and ultimate disposition when records permit.
• Quantify confirmed, questioned, unsupported, duplicate, unauthorized, or otherwise irregular amounts when practicable.
• Evaluate the design and operation of relevant internal controls and identify root causes and responsible control failures.
• Preserve and document evidence in a manner suitable for administrative, civil, insurance, regulatory, or criminal referral if later required.
• Provide practical recommendations, prioritized by risk and urgency, and present findings to the City Commission.
3. Scope of Services
3.1 Review Period
The initial review period shall be for the twelve (12) month period immediately preceding the date of engagement (the “Audit Period”). The exact start and end dates shall be confirmed upon execution of the engagement agreement.
3.2 Initial Credit Card Examination
• Identify all City-issued or City-paid cards, cardholders, account administrators, approving officials, and current and former authorized users.
• Reconcile issuer statements, general ledger entries, receipts, invoices, purchase orders, approvals, reimbursements, credits, returns, disputes, and business-purpose documentation.
• Test transactions for personal or prohibited purchases, missing support, duplicate charges, split purchases, altered records, unusual merchants, cash-equivalent purchases, spending-limit overrides, weekend or travel anomalies, and purchases made before or after authorization or employment.
• Review card issuance, custody, limit changes, monitoring, reconciliation, approval, suspension, cancellation, and employee separation practices.
• Identify merchants, approvers, departments, locations, dates, amounts, and patterns requiring further examination.
3.3 Broader Financial Examination
When relevant to the objectives or supported by credible indicators, the review may include, without limitation:
• Bank accounts, deposits, withdrawals, electronic transfers, wires, ACH activity, checks, reconciliations, dormant accounts, and authorized signers.
• Cash receipts, collections, deposits, petty cash, refunds, voids, adjustments, write-offs, shortages, and other cash-handling activity.
• Accounts payable, vendor setup and changes, invoices, purchase orders, bid and purchasing records, payments, credits, duplicate payments, and related-party indicators.
• Payroll, overtime, stipends, allowances, reimbursements, advances, benefits, time records, deductions, direct-deposit changes, and payments to current or former personnel.
• Revenue, taxes, fees, permits, fines, grants, restricted funds, program income, interfund transfers, journal entries, suspense accounts, and year-end adjustments.
• Contracts, change orders, professional services, procurement cards, fuel cards, fleet expenses, travel, meals, lodging, gift cards, and cash equivalents.
• General ledger, subsidiary ledgers, financial statements, budgets, audit adjustments, system access logs, audit trails, deleted or altered entries, and relevant electronic communications.
• Any other money, asset, liability, account, transaction, record, relationship, or financial discrepancy reasonably connected to a finding or necessary to complete the authorized investigation.
3.4 Required Procedures
• Develop a risk-based work plan and data request after an initial scoping meeting.
• Secure, inventory, preserve, and analyze relevant paper and electronic records; document sources, custody, transformations, and limitations.
• Use full-population data analysis where reasonably available and explain any sampling method, threshold, exception logic, and limitations.
• Conduct interviews of relevant current or former personnel and other witnesses, coordinated with the City’s designated legal or administrative contact.
• Corroborate significant findings through independent records or multiple evidence sources whenever practicable.
• Maintain a schedule of findings showing criteria, condition, cause, effect, evidence, questioned amount, responsible control point, and recommendation.
• Notify the City promptly of evidence requiring immediate preservation, loss prevention, regulatory notice, insurer notice, or legal review.
• Coordinate with the City Attorney or other designated counsel when attorney-client privilege, work-product protection, employee rights, or referral considerations are implicated.
3.5 Scope Expansion and Optional Services
The selected firm shall not materially expand billable work without prior written authorization. If evidence indicates a related matter outside the initial scope, the firm shall submit a written scope-change request describing the issue, proposed procedures, estimated hours and cost, schedule effect, and urgency. The City may authorize a task order, amendment, or not-to-exceed amount. The City may also request litigation support, expert testimony, recovery assistance, control remediation, follow-up testing, or referral support at negotiated rates.
4. Professional Standards and Independence
4.1 Applicable Standards
The Respondent shall identify the professional standards that will govern each component of the work. Procedures shall be performed under applicable AICPA, ACFE, GAGAS, or other recognized professional standards, as appropriate to the nature of the engagement. The proposal and resulting reports must clearly state whether the work constitutes an audit, examination, agreed-upon procedures engagement, consulting engagement, or forensic investigation and must not imply assurance beyond the procedures performed.
4.2 Independence
The selected firm and assigned personnel must be independent in fact and appearance. The Respondent shall disclose all current or prior relationships with the City, its component units, elected or appointed officials, employees, unions, vendors, contractors, financial institutions, outside auditors, and other parties reasonably relevant to the engagement. The City may disqualify a Respondent or require mitigation or replacement of personnel.
4.3 Data Security and Confidentiality
• Use City information only for this procurement and engagement, restrict access to personnel with a need to know, and apply reasonable administrative, technical, and physical safeguards.
• Encrypt sensitive information in transit and at rest; prohibit use of City data in public generative artificial intelligence systems or other unapproved third-party services.
• Notify the City without undue delay, and no later than twenty-four hours after discovery, of any suspected loss, unauthorized access, disclosure, or security incident involving City data.
• Return or securely destroy City information as directed, subject to lawful professional retention obligations and any litigation hold.
• Acknowledge that proposals and engagement records may be subject to the Michigan Freedom of Information Act, MCL 15.231 et seq.; clearly identify claimed exempt material and provide the legal basis without marking the entire proposal confidential.
5. Deliverables and Minimum Requirements
Engagement and Data Request Plan: Scope, standards, staffing, milestones, data sources, access needs, preservation steps, and communication protocol.
Periodic Status Reports: Work completed, records outstanding, emerging risks, budget-to-actual status, decisions needed, and schedule changes.
Immediate Risk Notices: Prompt written notice of urgent loss, evidence- preservation, security, legal, insurance, or regulatory concerns
Draft Report: Executive summary; scope and limitations; methodology; findings; evidence basis; questioned amounts; control analysis; and prioritized recommendations.
Final Report: Finalized report addressing factual comments without compromising independence, provided in accessible electronic PDF and editable format, plus a printed copy.
Supporting Schedules: Transaction-level schedules and cross-references sufficient to understand and reproduce material findings, subject to legal restrictions.
Management Letter: Control and proves recommendations not requiring inclusion in the public-facing report, if appropriate.
City Commission Presentation: Presentation of methods, findings, financial effect, limitations, and recommendations, with responses to questions.
Workpapers: Complete workpapers retained for at least seven years and made available to the City to the extent permitted by law and professional standards.
The firm shall distinguish confirmed findings, questioned or unsupported items, allegations, and matters that could not be resolved. Names or sensitive details shall be handled consistently with applicable law, due process, privilege, and City direction. The City retains responsibility for disciplinary, recovery, referral, and policy decisions.
6. Proposal Requirements
Proposals should be concise, complete, and organized in the following order:
1. Signed cover letter identifying the authorized representative and confirming proposal validity for at least ninety days.
2. Firm profile, ownership, office locations, size, and description of forensic accounting and Michigan municipal experience.
3. Signed conflict-of-interest and independence certification addressing the relationships described in Section 4.2 and any proposed safeguards.
4. Qualifications of the proposed team, including engagement partner, project manager, CPAs, CFEs, data specialists, interviewers, and any subcontractors.
5. At least three comparable public-sector engagements completed within the past five years, including scope, dates, outcomes where disclosable, and client references.
6. Technical approach addressing scoping, preservation, data analytics, transaction testing, interviews, corroboration, documentation, reporting, quality control, and handling of potential scope expansion.
7. Work plan and proposed timeline showing milestones, staffing availability, City dependencies, and risks to timely completion.
8. Detailed fee proposal stating a fixed fee or not-to-exceed amount for the base scope; hours and rates by classification; assumptions; expenses; optional-service rates; and proposed invoicing schedule.
9. Description of data-security practices, incident response, secure transfer methods, retention, destruction, and use of subcontractors or cloud services.
10. Evidence of required insurance and confirmation of ability to meet the City’s contract terms.
11. Signed confidentiality acknowledgment agreeing to the requirements in Section 9.2.
12. Disclosure of litigation, regulatory findings, disciplinary matters, or claims within the past five years that may bear on the firm’s ability to perform.
13. Any requested exceptions to this RFP or proposed agreement, clearly identified in a separate section.
7. Minimum Qualifications
• A firm duly organized and authorized to provide the proposed services, with any Michigan licensure required for services represented as public accounting or attest work.
• At least three relevant public-sector financial audit, forensic accounting, fraud examination, or investigative engagements within the past five years.
• At least one active CPA and one active Certified Fraud Examiner assigned in substantive roles; equivalent credentials may be considered when accompanied by a clear explanation.
• Demonstrated capability in financial data analysis, evidence preservation, interviewing, internal-control evaluation, and plain-language reporting.
• Good standing with applicable professional and regulatory bodies and no disqualifying conflict of interest.
• Sufficient staff and availability to meet the approved schedule.
8. Evaluation and Selection
Technical approach, methodology, and understanding of scope: 30%
Forensic and public-sector experience; qualifications of assigned team: 25%
Independence, objectivity, and conflict assessment: 15%
Work plan, responsiveness, capacity, and timeline: 10%
Data security, evidence handling, and quality control: 10%
Cost and overall value: 10%
_______________________________________________________________________
100%
The City may verify references, request written clarifications, require oral interviews or presentations, examine sample reports or anonymized work products, negotiate with one or more Respondents, and consider information relevant to responsibility and best value. Submission of a proposal does not create a right to award or reimbursement.
9. Contract Terms and Conditions
9.1 Conflict of Interest
Each Respondent shall certify that neither the Respondent nor any of its principals, partners, officers, employees, subcontractors, or proposed team members has any financial interest in, business relationship with, or other connection to the City, its elected or appointed officials, employees, agents, unions, vendors, contractors, financial institutions, outside auditors, or other relevant parties that could constitute an actual or potential conflict of interest or create the appearance of a conflict with respect to this engagement.
The proposal shall fully disclose any current or prior relationship that could reasonably bear on the Respondent’s independence, objectivity, or ability to investigate any person, transaction, account, department, or entity within the scope. The Respondent shall describe any proposed safeguards but shall not determine unilaterally that a disclosed conflict is immaterial. The City will determine, in its sole discretion, whether a conflict may be waived or mitigated or whether it disqualifies the Respondent or a proposed team member.
If an actual or potential conflict arises or becomes known after proposal submission, the Respondent shall promptly disclose it in writing to the City. The selected firm shall remain independent in fact and appearance throughout the engagement. Discovery of an undisclosed conflict may result in disqualification, removal of personnel, withholding of work, or immediate termination of the agreement.
9.2 Confidentiality
All information provided by the City or obtained in connection with this RFP or the resulting engagement—including financial records, credit card statements, banking information, employee records, interview information, investigative leads, internal policies, system data, legal communications, and other nonpublic information—shall be treated as confidential to the extent permitted by law.
Each Respondent and the selected firm shall:
• Keep confidential information secure and not disclose it to any third party without the City’s prior written consent, except as required by law.
• Use confidential information solely to prepare the proposal and, if selected, to perform the authorized engagement.
• Limit access to personnel and approved subcontractors who have a need to know and who are bound by confidentiality obligations at least as protective as these terms.
• Use reasonable administrative, technical, and physical safeguards, including encryption of sensitive information in transit and at rest.
• Not enter City information into public generative artificial intelligence systems or other unapproved third-party platforms.
• Notify the City without undue delay, and no later than twenty-four hours after discovery, of suspected loss, unauthorized access, disclosure, or a security incident involving City information.
• Return or securely destroy confidential information at the City’s request or upon completion or termination of the engagement, subject to lawful professional retention requirements and any litigation hold.
If disclosure is required by law, regulation, subpoena, court order, or other legal process, the Respondent shall, to the extent legally permitted, provide prompt written notice to the City and reasonably cooperate in seeking a protective order or other remedy. These confidentiality obligations shall survive completion or termination of the procurement and engagement for five years, except that obligations concerning information protected for a longer period by law shall continue for that longer period.
9.3 Michigan Freedom of Information Act
Respondents are advised that proposals and records submitted to or held by the City may be subject to disclosure under the Michigan Freedom of Information Act, MCL 15.231 et seq. The City will determine its disclosure obligations and cannot guarantee that material designated confidential will be exempt from disclosure.
A Respondent claiming that a portion of its proposal is exempt shall clearly mark only the specific material claimed to be confidential or a trade secret and provide a written explanation of the legal basis for the claimed exemption. Marking the entire proposal confidential is not acceptable and does not bind the City.
9.4 Insurance Requirements
• Professional liability/errors and omissions: not less than $1,000,000 per claim and $2,000,000 aggregate.
• Commercial general liability: not less than $1,000,000 per occurrence and $2,000,000 aggregate.
• Workers’ compensation: statutory Michigan requirements, with employer’s liability as required by the City.
• Automobile liability: $1,000,000 combined single limit when vehicles are used in performance.
• Cyber/privacy liability: not less than $1,000,000 per claim or incident and in the aggregate.
The City may adjust requirements during contract negotiation. The selected firm shall provide certificates before work begins and name the City as an additional insured where applicable.
9.5 Indemnification
To the fullest extent permitted by law, the selected firm shall indemnify, defend, and hold harmless the City and its officers, employees, agents, and elected and appointed officials from claims, liabilities, damages, losses, costs, and expenses, including reasonable attorney fees, arising out of or relating to the firm’s performance, acts, omissions, breach, or misconduct, except to the extent caused by the City’s own gross negligence or willful misconduct. Final language will be established in the engagement agreement.
9.6 Right to Reject Proposals
The City reserves the right, in its sole discretion, to reject any or all proposals; waive informalities, irregularities, or technicalities; request correction, clarification, or additional information; investigate qualifications and verify references; conduct interviews; negotiate with one or more Respondents; award all, part, or none of the work; cancel, suspend, amend, or reissue this RFP; and take any other action determined to be in the City’s best interest. The City is not obligated to select the lowest-cost proposal.
9.7 No Reimbursement of Proposal Costs
The City will not reimburse any Respondent for costs incurred in preparing, submitting, clarifying, presenting, or negotiating its proposal, regardless of whether the City makes an award or cancels this RFP.
9.8 Non-Collusion
By submitting a proposal, each Respondent certifies that its proposal is genuine and independently developed; it is not made in collusion with another Respondent or party; the Respondent has not attempted to induce another person or entity to submit or refrain from submitting a proposal; and the Respondent has not engaged in conduct that would violate federal or state antitrust law in connection with this procurement.
9.9 Compliance with Laws
The selected firm shall comply with all applicable federal, state, and local laws, regulations, and ordinances and with applicable professional and ethical requirements. These include, as applicable, the Michigan Uniform Budgeting and Accounting Act, MCL 141.421 et seq.; the Michigan Elliott-Larsen Civil Rights Act; Michigan public-records requirements; and the City’s purchasing policies and ordinances.
9.10 Additional Contract Terms
• No subcontractor may perform material work without prior written City approval; the selected firm remains fully responsible for all work.
• The selected firm shall promptly disclose actual or potential conflicts arising during the engagement and maintain independence throughout.
• The agreement shall address ownership and permitted use of deliverables, access to supporting records, record retention, confidentiality, data security, termination, payment, and scope changes.
• The City may terminate for cause or convenience as provided in the final agreement and will pay only for accepted work properly performed through the effective termination date.
10. Submission Instructions
Proposals must be received no later than November 12, 2026 at 4:00pm Eastern Time. Late submissions may be rejected. Submit proposals as follows:
• Electronic submission: one searchable PDF sent to tmoore@bhcity.us.
• Hard-copy submission, if required: Four (4) bound copies in a sealed package marked “RFP Forensic Financial Audit – DO NOT OPEN.”
• Fee proposal: Submitted separately in a sealed envelope clearly marked “Forensic Fee Proposal – DO NOT OPEN”.
Delivery address: Tiffany Moore, City Clerk, City of Benton Harbor, 200 East Wall Street, Benton Harbor, Michigan 49022, unless revised by addendum.
A Respondent may modify or withdraw its proposal by written notice received before the deadline. Proposals shall remain valid for ninety days after the deadline.
11. Questions and Communications
Direct all questions in writing to Alex Little, City Manager, alittle@bhcity.us, 269-204-2776 by the deadline in Section 9. From issuance through selection, Respondents shall not communicate about this procurement with other City officials, employees, consultants, or agents except as authorized by the designated contact. Material interpretations or changes will be issued by written addendum.
12. Reservation of Rights
• Reject any or all proposals or portions of proposals.
• Waive minor informalities or request correction or clarification.
• Investigate qualifications and verify information and references.
• Negotiate scope, schedule, staffing, price, deliverables, and contract terms.
• Award all, part, or none of the work and authorize later task orders or scope amendments.
• Cancel, suspend, amend, or reissue the solicitation without liability for proposal costs.
13. Governing Law
13.1 Applicable Law
This RFP and any agreement resulting from it shall be governed by and construed under Michigan law, without regard to conflict-of-law principles.
13.2 Venue
Any legal action or proceeding arising from this RFP or the resulting agreement shall be brought in the courts of Berrien County, Michigan, or the United States District Court for the Western District of Michigan, as applicable. By submitting a proposal, each Respondent consents to the jurisdiction of those courts.
13.3 Michigan Procurement Standards
The City intends to conduct this procurement in a fair, open, and competitive manner consistent with applicable Michigan public-procurement requirements and the City’s purchasing policies.
14. Authorization
Issued by authority of the City Commission of the City of Benton Harbor, Michigan, subject to completion of the procurement information and approvals required by the City.