Gepf 03/2017 Internal Audit Services: Government Employees Pension Fund

GEPF 03/2017 INTERNAL AUDIT SERVICES: GOVERNMENT EMPLOYEES PENSION FUND

Confidential

INVITATION TO TENDER

FOR INTERNAL AUDIT SERVICES

FOR

GOVERNMENT EMPLOYEES PENSION FUND

Table of Contents

BID SPECIFICATIONS…

1.1.INTRODUCTION AND BACKGROUND

1.2.OVERVIEW OF THE GEPF INTERNAL AUDIT FUNCTION

1.3.THE OBJECTIVE OF THE REQUEST FOR PROPOSAL

1.4.PURPOSE OF THE REQUEST FOR PROPOSAL

1.5.Scope of services

1.6.INDEPENDENCE AND OBJECTIVITY OF STAFF

1.7.TIME FRAMES

1.8.CONTRACTUAL OBLIGATIONS

1.9.BIDDER SELECTION

1.10.BIDDER ENQUIRIES

EVALUATION CRITERIA

GUIDE TO RESPONSES
ANNEXURE B
SPECIAL CONDITIONS OF CONTRACT

INTERNAL AUDIT TENDER

1.BID SPECIFICATIONS

1.1.INTRODUCTION AND BACKGROUND

The Government Employees' Pension Fund is Africa’s largest pension fund, with 1 269 948 active members and 423 130 pensioners and beneficiaries as at 31 March 2016. We have R1.6 trillion in assets under management and are the single largest investor in Johannesburg Stock Exchange-listed (JSE) companies. We have significant holdings in government bonds and invest in unlisted equity and property.

Our core activity, governed by the Government Employees' Pension Law (1996), is to manage and administer pensions and other benefits for government employees in South Africa. We endeavour to give members and pensioners peace of mind about their financial security after retirement and during situations of need by ensuring that all funds in our safekeeping are responsibly invested and accounted for and that benefits are paid out efficiently, accurately and on time.

Currently the GEPF has more than 320 participating employers, including all national and provincial government departments and the South African National Defence Force and Intelligence Community. The GEPF has a footprint in all 9 provinces within South Africa, and is committed to the effective and efficient provision of benefits to members, pensioners and beneficiaries.

Further background information on the GEPF can be found in the annual reports and annual financial statements which are available on the website www.gepf.gov.za.

To strengthen governance and oversight of the Fund, the structure of the GEPF was changed in 2010 such that the Administration of funds was outsourced to the Government Pension Administration Agency (GPAA) and the Investments were also separated from the Fund to be outsourced to the Public Investment Corporation (PIC) formed in 2003/2004 financial year.

This is in line with internationalretirement fund best practices.

The above then has an impact on the risk matrix of the Fund, as some of the Fund’s risks and controls are sitting at the service providers who are separate legal entities and are managed through the Service Level Agreement and the Investment mandate. Since the Fund provides the overall oversight in terms of the above organisations as the outsourced processes have a bearing on the Fund’s reputation, the Fund therefore developed Liaison Committees and also drafted a Combined Assurance Framework to ensure that assurance processes are integrated and efforts are not duplicated

1.2.OVERVIEW OF THE GEPF INTERNAL AUDIT FUNCTION

The GEPF internal audit function currently has 2 resources internally, which includes the Internal Audit Manager who has a Senior Internal Auditor reporting to her. The Internal Audit Manager reports administratively to the Principal Executive Officer and functionally to the Finance and Audit Committee of the Board.

The GEPF’s Internal Audit function places reliance on the work conducted by the PIC and GPAA internal auditors.

1.3.THE OBJECTIVE OF THE REQUEST FOR PROPOSAL

The objective of this Request for Proposal is to invite parties, in good tax standing, to submit proposals for consideration to be appointed to assist the Fund through providing internal audit services in execution of the internal audit coverage plan.

The Terms of Reference are intended to define the purpose, scope of work and deliverables of the required service for the GEPF for which the appointment of a service provider is required.

1.4.PURPOSE OF THE REQUEST FOR PROPOSAL

Government Employees Pension Fund (GEPF), being the largest pension fund in Africa, is looking to appoint a reputable and well-established independent Internal Audit firm to assist GEPF with augmenting the capacity within GEPF Internal Audit on a co-sourced basis for a period of 3 years.These internal audit activities are required to be conducted in accordance with the internal audit charter and combined assurance framework developed by the Finance and Audit Committee (FA-C) in line with accepted best practices in corporate governance and the professional standards of the Institute of Internal Auditors.

1.5.Scope of services

The scope of work covers the provision of internal audit services for the period of 3 years. The 80/20 principle will be applied in terms of the planned versus unplanned projects. The estimated hours for the purposes of this proposal will be 1000 hours per annum.

The scope of planned projects will include, inter alia, the following projects:

Performing specialised internal audit projects such as:
Investment, Actuarial and Environmental, Social and Governance (ESG)reviews;
Information and Communication Technology (ICT) Reviews;
CAATs on Contributions, Benefits and S-Cases ( Appearances and disappearances);
Data Analytics on Pensioner Maintenance and to verify accuracy of Active Member Data;
Disaster Recovery and Business Continuity Review;
Corporate Governance, IT Governance,Sustainability and Integrated Reporting Review;
Mandates Review ( SLA with GPAA and PIC); and
Performance Management Review
Compliance (with relevant Laws, Rules and Policies) Reviews;
Review of ISAE 3402 (SAS 70) reports of major service providers and assessment of the effectiveness of combined assurance, including internal audit, at the major service providers
Perform Consulting Engagements as per management requests;
Evaluate and identify weaknesses in the Risk Management processes within the GEPF and make appropriate recommendations;
Review the existing Internal Audit Strategic Documentation and ensure that it is aligned with IIA Standards and Best Practice;
Conducting annual peer review according to the GEPF’s Quality Assurance and Improvement Programme;
Prepare relevant reports for Finance And Audit Committee and Board including recommendations for the enhancement or improvement of processes through which the fund’s objectives are met, its assets are safeguarded and its values are maintained;
Attend Finance And Audit Committee meetings and other meetings as and when required; and
Augment internal capacity and transfer skills to the GEPF internal audit resources.

The successful bidder will be the one that will complement our culture and assist us in maintaining a strong control environment within the GEPF.

1.6.INDEPENDENCE AND OBJECTIVITY OF STAFF

The internal audit service provider to the GEPF and its staff through whom it delivers the service to the GEPF need to be and remain independent of the GEPF and all of its significant service providers such as the Government Pensions Administration Agency (GPAA) and the Public Investment Corporation (PIC).

In carrying out the work, the internal audit service provider must ensure that their staff maintains proper objectivity by remaining independent of the activities that they audit.

1.7.TIME FRAMES

The term of the contract is expected to be three years.

1.8.CONTRACTUAL OBLIGATIONS

The service provider will enter into a contractual agreement with GEPF. No other contract relating to the services of the GEPF will be entered into between the service provider and any other third party unless such contract is approved by the GEPF.

Payment will be made within 30 days on presentation of the invoice by the service provider. Such invoice will be accompanied by the timesheet detailing the nature and time spent on the work performed.

1.9.BIDDER SELECTION

The GEPF reserves the right to select the appropriate service provider(s) based on its requirements. The decision of the evaluation panel and the Board of Trustees of the GEPF will be final.

1.10.BIDDER ENQUIRIES

For Technical enquiries:

Thandiwe Fongoqa

Telephone: (012) 424 7304

Email:

For Supply Chain-related enquiries:

William Ramoroka

Telephone: (012) 319 3476

Email:

2.EVALUATION CRITERIA

Item No. / Evaluation Criteria Item :
70/30 Principle(Phase 2) / Weight
A / Administrative requirements/compliance (Phase I) / N/A
A1. It will be ascertained whether bids:
a.Include original tax clearance certificates;
b.All standard bidding documents have been properly completed and signed off (SBD1, SBD3.1, SBD4, SBD6.1, SBD8 and SBD9); and
c.Bidders attended the compulsory briefing session.
d.Technical proposal; and
e.Price proposal.
Bidders who don’t comply with the above will be disqualified
B / Functionality (Phase II) / 100
B.1
B.2
B3
B.4
B.5 / Relevant Skills and Experience (Competency):
Company profile including demonstrated experience in providing internal audit services

to entities of a similar nature and significant size,( 10)
in the pension fund and Investment and Actuarial industries (10)

Team experience in providing services of the required nature ( See under scope):

Director- 15 years Working Experience in the Auditing (Internal and External) Field ,(5)
Manager- 8 years Working Experience in the Auditing (Internal and External) Field; ( 10)and
Field Staff - Minimum of 2 Field Staff should have 5 years Working Experience in the Auditing (Internal and External) Field (5)

Qualifications of the team members in a similar context:

2 CA (SA) or 2 Certified Internal Auditors (CIA) at Director Level (5),
2 x Internal Audit Manager/Assistance Audit Manager-Post Article Experience + B Com (Hons) (10),
5 x Trainees- Min B Com (5)

A detailed proposed project plan in executing these projects and methodology
References letters, relevant to this tender, from previous clients:

More than 6 reference letters (5),
6 reference letters (4) ,
5 reference letters (3 ),
4 reference letters (2 ),
3 reference letters (1).

/ 20
20
20
20
20
Total / 100
For this bid, a two-stage bidding procedure will be used, under which first un-priced technical proposals on the basis of a conceptual design or performance specifications are invited. The price proposal will only be considered after the technical proposal has been confirmed as being competent and compliant.
NB: Minimum qualifications of 70% on functionality

C

BBBEE

Price

Total / 100

3.GUIDE TO RESPONSES

Phase I

Fully completed Tender Documents (SBD1; 3.1; 4; 6; 8; 9) must be submitted with the following technical responses, along with the original and valid tax clearance certificate.Compliance to these above requirements will be evaluated in the first phase, all companies who do not submit the above documents will be disqualified.

Phase II

Evaluation of the technical proposal according to the Evaluation Criteria table above will be conducted. B.1 – B.4 (See some weights for each item of the Evaluation Criteria table above, e.g. A1 Company profile: Weight 20; B.2 Team experience: Weight 20, etc. and respond accordingly)

B.1 Company profile

This refers to the details of the company (Supplier) and the services on offer.

Specific details required are as follows:

The nature and location of the company, its history and when it was registered ( Supplier must indicate)
The company’s core business e.g. provision of internal audit services preferably in the retirement/pension fund or financial services industry( Supplier must indicate)

B.2 Team and experience

Specific details required here are:

The consultant’s internal audit experience preferably in the pension fund or financial services environment;
At least five years of experience;
Reference from at least 3 largest clients;
Capacity to service the GEPF; and

B.3 Qualifications of the team members

Qualifications of the team members and specify the relevant experience of key team members (especially lead auditors/ managers /directors).

B.3 Project plan and methodology

Specific details required here are:

Project plan and methodology;
Include sample of internal audit reports;
Use of electronic internal audit software to perform audits (CAATs; ACL etc.)
Demonstrate understanding of the requirements of GEPF (Scope of work 1.5)

B.4 Reference letter

At least 3 reference letters from a large pension fund or financial service organisation of significant size must be provided.

C.1 BBBEE Status

Companies must indicate and submit a valid BBBEE contributor level status certificate.

D.1 Price

Companies must submit a separate price proposal that is broken down in details.

Internal audits are generally based on hourly rates and typically detailed audit budgets can only be drawn up once the appointed auditor has been able to assess the likely extent of each particular audit project. Accordingly, financial proposals will be compared on the basis of hourly rates inclusive of overheads and VAT which bidders must supply in the form of the table set out below.

Item (where applicable) / Hourly Rate (including overheads and VAT)
Engagement Partner / R
Partner / R
Senior Manager / R
Manager / R
Assistant Manager / R
Supervisor / R
Senior Auditor / R
Trainee Auditor / R
Specialists (e.g. IT, other technical) / R

It is recognised that it is difficult for a prospective bidder to be firm about the extent of the work based solely on the terms of reference. However, to assist with assessments, a firm must provide a typical distribution of time for members of the audit team on a job of this nature. This should be expressed in percentages of the total person-hours billed on a typical job (see table below, which is indicative only and not binding on the firm).

Item (where applicable) / Typical Percentage of Total Hours on Project
Engagement Partner / %
Partner / %
Senior Manager / %
Manager / %
Assistant Manager / %
Supervisor / %
Senior Auditor / %
Trainee Auditor / %
Specialists / %
TOTAL / 100

Annexure A

(GEPF)

SCM

Standard Bid Document

SBD1

INVITATION TO BID

YOU ARE HEREBY INVITED TO BID FOR REQUIREMENTS OF GOVERNMENT EMPLOYEES PENSION FUND (GEPF)

BID NUMBER: GEPF 03/2017CLOSING DATE: 03 MAY 2017 CLOSINGTIME: 12:00 p.m.

DESCRIPTION: INTERNAL AUDIT SERVICES

THE SUCCESSFUL BIDDER WILL BE REQUIRED TO FILL IN AND SIGN A WRITTEN CONTRACT

BID DOCUMENTS MUST BE DEPOSITED IN THE BID BOX SITUATED AT GEPF and ADDRESSED TO:

Government Pensions Administration Agency (GPAA)

34 HAMILTON STREET

ARCADIA

PRETORIA

0001

Bidders should ensure that bids are delivered timeously to the correct address. If the bid is late, it will not be accepted for consideration. The bid box is generally open 8 hours a day between 08:00 to 17:00, Monday to Fridays.

ALL BIDS MUST BE SUBMITTED WITH THE STANDARD FORMS – (NOT TO BE RE-TYPED)

THIS BID IS SUBJECT TO THE GENERAL CONDITIONS OF CONTRACT (GCC) AND, IF APPLICABLE, ANY OTHER SPECIAL CONDITIONS OF CONTRACT

THE FOLLOWING PARTICULARS MUST BE FURNISHED (FAILURE TO DO SO MAY RESULT IN THE BID BEING DISQUALIFIED) ALL STANADARD BIDDING DOCUMENT AS ATTACHED

NAME OF BIDDER……………………………………………………………………………………………….....

POSTAL ADDRESS…………………………………………………………………………………………………………....

STREET ADDRESS…………………………………………………………………………………………………………....

TELEPHONE NUMBER CODE……………NUMBER……………………………………………......

CELLPHONE NUMBER…………………………………………………………………………………………

FACSIMILE NUMBERCODE ………… NUMBER…………………………………......

VAT REGISTRATION NUMBER …………………………………………………………………………......

HAS A TAX CLEARANCE CERTIFICATE BEEN SUBMITTED (SBD2)?YES/NO

SIGNATURE OF BIDDER ……………………………………………………......

DATE……………………………………………………......

CAPACITY UNDER WHICH THIS BID IS SIGNED……………………………………………......

SBD 2

TAX CLEARANCE CERTIFICATE REQUIREMENTS

It is a condition of bid that the taxes of the successful bidder must be in order, or that satisfactory arrangements have been made with South African Revenue Service (SARS) to meet the bidder’s tax obligations.

1 In order to meet this requirement bidders are required to complete in full the attached form TCC 001

“Application for a Tax Clearance Certificate” and submit it to any SARS branch office nationally. The Tax Clearance Certificate Requirements are also applicable to foreign bidders / individuals who wish to submit bids.

2 SARS will then furnish the bidder with a Tax Clearance Certificate that will be valid for a period of 1 (one) year from the date of approval.

3 The original Tax Clearance Certificate must be submitted together with the bid. Failure to submit the original and valid Tax Clearance Certificate will result in the invalidation of the bid. Certified copies of the Tax Clearance Certificate will not be acceptable.

4 In bids where Consortia / Joint Ventures / Sub-contractors are involved, each party must submit a separate Tax Clearance Certificate.

5 Copies of the TCC 001 “Application for a Tax Clearance Certificate” form are available from any SARS branch office nationally or on the website

6 Applications for the Tax Clearance Certificates may also be made via e-Filing. In order to use this provision, taxpayers will need to register with SARS as e-Filers through the website

SBD3.1

PRICING SCHEDULE – FIRM PRICES

NOTE:ONLY FIRM PRICES WILL BE ACCEPTED. NON-FIRM PRICES (INCLUDING PRICES SUBJECT TO RATES OF EXCHANGE VARIATIONS) WILL NOT BE CONSIDERED

IN CASES WHERE DIFFERENT DELIVERY POINTS INFLUENCE THE PRICING, A SEPARATE PRICING SCHEDULE MUST BE SUBMITTED FOR EACH DELIVERY POINT

Name of bidder…...... Bid number: GEPF 03/2017
Closing Time 12:00 pm on 03 May 2017

OFFER TO BE VALID FOR 120 DAYS FROM THE CLOSING DATE OF BID.

ITEMNO / QUANTITY / DESCRIPTION / BID PRICE IN RSA CURRENCY
(INCLUDING VAT)
1 / 1 / Internal Audit Services fee year 1 (VAT Inclusive) / R
2 / 1 / Internal Audit Services fee year 2 (VAT Inclusive) / R
3 / 1 / Internal Audit Services fee year 3 (VAT Inclusive) / R
Total for three years(VAT Inclusive) / R

For the purpose of standardising the completion of the above table, bidders must assume a total time commitment of 1000 hours in each year.

Required by:GEPF

GPAA

At:34 HAMILTON STREET

ARCADIA

PRETORIA

0001

Does offer comply with specification?*YES/NO

If not to specification, indicate deviation(s)………………………………….

SBD 4

DECLARATION OF INTEREST

1.Any legal person, including persons employed by the state¹, or persons having a kinship with persons employed by the state, including a blood relationship, may make an offer or offers in terms of this invitation to bid (includes a price quotation, advertised competitive bid, limited bid or proposal). In view of possible allegations of favouritism, should the resulting bid, or part thereof, be awarded to persons employed by the state, or to persons connected with or related to them, it is required that the bidder or his/her authorised representative declare his/her positionin relation to the evaluating/adjudicating authority where-