The criteria and definitions established in this rule will be used by the Applicants Ranking Committee to evaluate and rank the qualifications of applicants.

1. (1) Experience in Florida tax law. This term means working directly with the Florida Statutes (tax law), Department rules, and the interpretative decisions, opinions, and rulings relevant to the subject tax. The type of experience can either be:

   1. (a) Audit – performing Department tax compliance audits; or,
   2. (b) Preparation – assisting a taxpayer in, or preparing tax returns for, clients, or representing clients or others with respect to audit issues during the Department’s tax compliance audit process.
   3. (c) Experience means the combined years of experience of the firm members named in the application who will work on the audits. “Working” means performing on-site tax compliance audit work, supervising audit work, reviewing audit work papers, or serving as the engagement partner. The following methodology will be used to score experience:

   4. (d) Audit Experience = Score

      1 to 4 years = 2

      5 to 8 years = 3

      9 or more years = 5

      Points awarded for experience are based on the sum of the experience of individual team members. For team members who have previously worked on section 213.28, F.S., contracts, one year of audit experience is awarded for each contract worked on.

   5. (e) Preparation Experience = Score

      3 to 5 years = 1

      6 to 9 years = 2

      10 or more years = 3

   6. (f) If an applicant has both types of experience, the applicant will be scored on the type resulting in the highest score.

2. (2) Knowledge of Florida tax law. This is textbook/academic knowledge of the application, concepts and issues concerning the statutes, Department rules, and rulings and decisions in administrative and court cases relevant to the subject tax. It is the combined knowledge (i.e., courses attended) of the firm members named in the application who will work on the audits. The methods by which the applicant may have gained this knowledge are:

   1. (a) Attended and, where applicable, successfully passed a course that is designed specifically to teach audit applications for the Florida revenue law.
   2. (b) Successfully completed a Department course in the Florida revenue laws (each of the Department’s contract audit program and certified audit program courses meet this criterion).

   3. (c) The methodology for determining the Knowledge score is:

      Courses Attended and Passed = Score

      1-2 courses = 1

      3-4 courses = 2

      5-6 courses = 3

      7 or more courses = 4

3. (3) Experience in Federal tax law. This is experience in working directly with the Federal Statutes, Internal Revenue Service rules and court cases relevant to the subject tax. It is the combined experience of the firm members named in the application who will work on the audits. The type of experience can either be:

   1. (a) Audit – performing tax compliance audits; or
   2. (b) Preparation – assisting a taxpayer in or preparing Federal tax returns for clients or representing clients on audit issues during the I.R.S. tax compliance audit process in the practice of public accounting.
   3. (c) The evaluation of the relative experience levels for a firm for this factor is accomplished using the definitions and the same scoring methodology used under subsection (1) above.
   4. (d) If the applicant has both types of experience, the applicant will be scored on the type resulting in the highest score.

4. (4) Results of On-site Quality Review or Peer Review.

   1. (a) The written report on an on-site quality review will indicate the scope of the review, including any limitations thereon; description of the general characteristics of a system of quality control; an opinion on whether the system of quality control for the accounting and auditing practice of the reviewed firm met the objectives of quality control standards established by the American Institute of Certified Public Accountants and was being complied with during the years reviewed, and a description of the reason(s) for any modification of the opinion.
   2. (b) A Letter of Comments is required to be issued in connection with an on-site quality review when there are matters that resulted in modification(s) to the standard form of the report or when there are matters that the review team believes resulted in conditions being created in which there was more than a remote possibility that the firm would not conform with professional standards on accounting and auditing engagements. Such a letter should provide reasonably detailed recommendations for remedial, corrective actions by the reviewed firm.
   3. (c) The reviewed firm has the right to prepare a Letter of Response, which then becomes part of the report.
   4. (d) Peer review reports follow the same format as on-site quality review reports.
   5. (e) Off-site Quality Reports. Off-site quality reports will not be considered in the ranking process.

   6. (f) The methodology for scoring this category shall be:

      Report Opinion = Score

      Adverse = 0

      Qualified = 1

      Unqualified = 4

5. (5) Advanced Degrees in Taxation.

   1. (a) These are qualifications above those of an undergraduate accounting degree specifically, masters or doctoral degrees in taxation. Advanced business, accounting, or law degrees with a stated major in taxation will be scored as a master’s degree in taxation. Possession of a law degree without a stated concentration in taxation does not qualify for receiving advanced degree points. The score will be based on the combined number of advanced degrees, if any, of the firm members named in the application who will work on the audits.
   2. (b) The Score for these qualifications is as follows: One point for each masters degree in taxation and two points for each doctoral degree in taxation, not to exceed five points total.

6. (6) Certified Minority Business Enterprises.

   1. (a) This term means C.P.A. firms, including sole proprietorships, certified as a “minority business enterprise” under section 288.703, F.S. Each applicant’s assertion of being a certified minority business enterprise will be verified by the Contract Manager against the certified list provided by the Purchasing Section prior to the ranking of applicants process.
   2. (b) The score awarded to a C.P.A. firm which is a certified minority business enterprise is 5 points. A non-certified firm is awarded zero points.

7. (7) Performance Evaluation.

   1. (a) The Contract Manager or his/her designee will complete a Performance Evaluation Form for each contract audit completed, excluding surveys, when the General Tax Administration program has completed the review of the subject audit. The contract C.P.A. firm will be evaluated in four areas:

      1. Communication:

      a. Kept the Department informed of all relevant developments on a timely basis.

      b. Conducted effective entrance and exit conferences with the taxpayer.

      c. Understood the nature and scope of the audit assignment and the Department’s procedures.

      d. Communicated ideas and information effectively, both orally and in writing.

      e. Provided the taxpayer with all the information and documentation necessary to allow the taxpayer to determine whether or not to agree to the proposed audit adjustments.

      f. Responded in a timely and effective manner to all taxpayer questions regarding any Florida tax laws (taxpayer education).

      2. Knowledge of Florida Tax Law:

      a. Identified all potential audit issues.

      b. Determined what audit adjustments, if any, were necessary for compliance with Florida tax law.

      c. Performed the audit without an unusual amount of Department technical assistance. The amount considered usual will be a function of both the difficulty level of the audit and the firm’s relative experience level in performing contract audits for the tax.

      d. Knew current technical developments and applied them to the audit.

      3. Preparation of Audit File:

      a. Prepared sufficient, competent supporting documentation for all audit adjustments made and all potential adjustments not made.

      b. Complied with Department’s procedures for audit files, including content and order.

      c. Properly completed all administrative paperwork: time summary, expense report, etc.

      4. Professional Conduct:

      a. Represented the Department in accordance with professional standards of the highest quality.

      b. Provided prompt and complete answers to any taxpayer questions on Florida tax law.

      c. Used good judgment in planning, conducting and reviewing the audit.

      d. Complied with the contractual terms established between the firm and the Department.

      e. Responded promptly and effectively to all instructions provided by the Department.

   2. (b) Reviewer’s Memorandums received, if any, will be considered in developing the subject ratings.
   3. (c) The Contract Manager will perform a special performance evaluation at any point, based on the contract firm’s actions as discussed in subparagraphs 1. through 3. The special performance evaluation will be weighted at 10 percent of the total hours used as the denominator in the calculation discussed in this subsection and will be included in the ranking process.

   4. (d) 1. The Contract Manager or his/her designee will rate the subject firm on each of the line items for the four criteria discussed in this subsection (Communication, Knowledge of Florida Tax Law, Preparation of Audit File, and Professional Conduct) and then determine an overall score for each evaluation completed.

      2. Each individual line item in the performance evaluation will be rated as “Below Performance Standards,” “Achieves Performance Standards,” or “Exceeds Performance Standards.” The ratings will carry the following numerical ratings:

      a. “Below Performance Standards” equals 0;

      b. “Achieves Performance Standards” equals 3.0;

      c. “Exceeds Performance Standards” equals 5.0.

      The individual line item scores for each performance evaluation will be totaled and divided by the number of line items rated. The resulting average will be the overall rating for that performance evaluation.

      3. The Contract Manager or his/her designee will provide supporting comments for any area rated anything other than “Achieves Performance Standards.” All evaluations require Contract Manager approval prior to becoming final.

   5. (e) The methodology for scoring this category is determined as follows:

      Performance Evaluation Overall Weighted Rating = Ranking Equation Points

   6. (f) 1. The performance evaluation points awarded a firm will be determined using the weighted total of the overall ratings for performance evaluations.

      2. For a performance evaluation to be considered in a ranking process, the associated audit must have been:

      a. Assigned and completed by the cut-off date provided in Rule 12-25.005, F.A.C. (if applicable);

      b. And the Performance Evaluation must be dated no earlier than the two immediately preceding program funding years; and

      c. Not included in any previous ranking process.

      3. The weight assigned to each included performance evaluation will be the ratio which the incurred audit hours, up to the approved budget, in the subject audit bear to the total of the hours for all audits for all included performance evaluations.

      4. An example of the calculation for any C.P.A. firm is as follows:

      Step 1: For example – A firm has two Performance Evaluations eligible for the subject ranking process. The firm received two “Below Performance Standards”, 12 “Achieves Performance Standards” and four “Exceeds Performance Standards” on the Performance Evaluation for audit #1, which had a 900 hour budget. The overall rating for that Performance Evaluation would be 3.1 (56 total points divided by 18 line items). The firm received six “Achieves Performance Standards” and 12 “Exceeds Performance Standards” on the Performance Evaluation for audit #2, which had a 100 hour budget. The overall rating for the second Performance Evaluation would be 4.3 (78 total points divided by 18 line items.)

Step 2: 3.2 points for Performance Evaluations would be used in the subject weighted ranking equation.

Any points resulting from performance evaluations accrue only to the legal entity with which the Department entered into the contract.

1. (8) Other.

   1. (a) Items (1)-(5) in the applicant ranking process address an applicant’s technical qualifications. Including the category “other” in the weighted equation allows the applicant to receive credit for additional qualifications that would make a significant contribution to the applicant’s performance other than the technical qualifications in items (1)-(5). One example would be the applicant’s possession of computer hardware, software, and associated proficiency on such hardware and software, which is above the normal level for C.P.A. firms.
   2. (b) The score for this item can range from 1 to 5 points, as judged individually by the members of the Applicants Ranking Committee.

2. (9) Fee Proposal. Each applicant is required to submit a single, blended per hour rate as part of their application. The submitted fee proposal will be a line item in the weighted equation, and will be given a weight of 25 percent.

   1. (a) The score for each fee proposal will be determined through an evaluative calculation, as illustrated below:

      (Low Fee Proposal/Subject Fee Proposal) x 5.0 = Score

   2. (b) 1. The term “Low Fee Proposal” means the lowest per hour rate(s) submitted out of the applications selected to be ranked in the respective contract size pool.

      2. The term “Subject Fee Proposal” means the specific fee proposal being evaluated during the applicant ranking process. All fee proposals for applications selected for ranking will be evaluated.

      3. The term “Score” means the product of the described evaluative calculation, carried to four decimal places. The score will then be assigned a weight of 25 percent, and included in the weighted equation.

3. (10) Efficiency Calculation.

   1. (a) 1. The efficiency calculation will measure how C.P.A. contract firms used the resource of time in completing an audit for the contract auditing program. This calculation will be performed after the subject invoice is approved by the Contract Manager. The calculation will determine the percentage difference, if any, between total billed professional staff hours and the adjusted total audit hours budget.

      2. If the adjusted budget is greater than the billed hours, then the calculated difference will be divided by the adjusted budget, and the product of that division will be the achieved efficiency percentage.

   2. (b) The Department reserves the right to adjust the total audit hours budget for the purpose of the efficiency calculation. Such an adjustment is warranted, for example, if the original audit hours budget was based on the premise that five tax years would be audited but it was actually necessary to audit only three years. In this event, the original audit hours budget would be adjusted down for the purpose of the efficiency calculation.

   3. (c) 1. This calculation is meant to promote an efficient, cost effective completion of contract audits. In order for a C.P.A. contract firm to be eligible for the efficiency calculation, the tax compliance audit must first be completed to the Department’s express satisfaction.

      2. The total efficiency calculation for a subject firm will be used to score the firm for this category. The total efficiency calculation will include all audits completed at the postmark date of the subject application, and no earlier than the two immediately preceding fiscal years.

   4. (d) Example: Adjusted budget = 1000 hours

      Billed hours = -900 hours

      Difference = 100 hours

      100 hours divided by 1000 hours equals a 10 percent achieved efficiency.

   5. (e) The methodology for scoring this category is:

      Efficiency Calculation = Score

      5% to 10% Achieved Efficiency = 1

      11% to 15% Achieved Efficiency = 2

      16% to 20% Achieved Efficiency = 3

      21% to 25% Achieved Efficiency = 4

      26% or greater Achieved Efficiency = 5

      Any points resulting from Efficiency Calculations accrue only to the legal entity with which the Department entered into the contract.

4. (11) Exclusion from Ranking Process. An applicant will be excluded from the ranking process for the subject fiscal year if:

   1. (a) The applicant has been found guilty in a Board of Accountancy disciplinary action within the last three years.
   2. (b) There are two or more disciplinary actions taken by the Division of Consumer Services, Department of Agriculture and Consumer Services, or similar agency in the applicant firm’s state of domicile.
   3. (c) The applicant misrepresents any material fact affecting the applicant’s weighted score.
   4. (d) The applicant has any currently unpaid Florida state tax liability or has filed to comply with Florida revenue laws.

5. (12) Criteria and Weighted Equation.

   1. (a) The criteria and associated weights provided in this section, in conjunction with the provisions of subsections (1) through (9) of this rule section, will be employed in the applicant ranking process whenever a Request for Information has been published. The information used in applying the described criteria will primarily be provided by the applicants’ responses to the Request for Information. Other sources are described in this section.
   2. (b) Weighting is accomplished by multiplying the scores for each criterion by an assigned percentage, with the sum of the percentages equaling 100 percent, as follows:

Rulemaking Authority 213.06(1), 213.28(4) FS. Law Implemented 213.28 FS. History–New 3-20-94, Amended 10-30-96, 7-31-00.