REQUEST FOR QUALIFICATIONS ANNUAL FINANCIAL PLEASANTON INDEPENDENT SCHOOL DISTRICT

RFQ# 2013-02

The Pleasanton Independent School District is requesting qualifications from public firms to perform the annual audit for 2013.

I. BACKGROUND INFORMATION

Auditing requirements for Texas' public school districts are contained in the Texas Education Agency Financial Accountability System Resource Guide, which is the authoritative document, adopted by reference as a rule of the State Board of Education, through Title 19, Texas Administrative Code, Section 109.41.

Pleasanton Independent School District (“the District”) has an enrollment of 3,412 in grades Pre-Kindergarten through 12, on 5 campuses. The 2012- 2013 budgeted expenditures for the General, Food Service and Debt Service Funds is $31,931,847. The school district expended federal financial assistance for several programs including but not limited to National School Lunch, School Breakfast Programs, ESEA Title I Part A - Improving Basic Programs, ESEA Title II, Part A – Teacher & Principal Training & Recruiting, Carl D. Perkins Basic Formula Grant, IDEA B Formula, and IDEA B Preschool. We have several competitive Grants – Smart Start Counseling and Safe School Healthy Students – all ending in 2012-2013 SY. Our district is the fiscal agent for the Atascosa-McMullen County Special Education Co-operative.

The District’s Comprehensive Annual Financial Report for the year ended August 31, 2012 has been included with this Request for Qualifications.

The District has received a clean audit for the last several years. We believe that our current accounting practices continue to conform with requirements of these programs.

A. Purpose of the Audit

The purpose of the Request for Qualifications is to obtain the services of a public accounting firm for the annual audit for fiscal year 2012-2013. The -wide audit will encompass the financial statements as required by GASB Statement No. 34 and the Texas Education Agency Financial Accountability System Resource Guide for the District for the fiscal year ending August 31, 2013. The audit is to be performed in accordance with generally accepted auditing standards and generally accepted government auditing standards contained in the Texas Education Agency Financial Accountability System Resource Guide.

The audit is to determine whether (1) the financial statements present fairly the financial position, results of operations, and flows or changes in financial positions in accordance with

1 generally accepted accounting principles, and (2) whether the District has complied with laws and regulations for those transactions and events that may have a material effect on the financial statements. The financial related audit will also include determining whether (1) financial reports and related items are fairly presented, (2) financial information is presented in accordance with established or stated criteria, and (3) the school district has adhered to specific financial compliance requirements.

As a part of the audit of the basic financial statements, the annual audit will also include obtaining an understanding of the school district's internal control and reporting any significant deficiencies or material weaknesses relating to the internal control systems coming to the attention of the auditors. To comply with Office of and Circular A-133, a study and evaluation of internal control will include internal accounting and administrative controls for all major federal financial assistance programs, in accordance with standards for risk assessment for major federal financial assistance. Any material weakness noted during the study and evaluation of internal accounting and administrative controls and other kinds of noncompliance and questioned will be reported in compliance with the Act.

As part of the audit of the financial statements, transactions and records pertaining to federal programs will be tested for material compliance with federal laws, rules, and regulations and all instances of noncompliance will be reported to the school district.

The audit will include the performance of certain audit procedures for the purpose of reviewing the accuracy of fiscal information provided by the district through the Public Education Information Management System (PEIMS), as required by Section 44.008(b) of the Texas Education Code.

The audit will include procedures applicable to compensatory education funds as required by Module 9 of the Financial Accountability System Resource Guide, if required.

B. Other Requirements

1. The accounting firm should provide an annual audit report in a form acceptable to the Texas Education Agency and within the time frame stipulated in TEC 44.008 (d) of 150 days subsequent to the close of the fiscal year for which the audit was made.

2. The Finance and Audit Committee would expect to meet with the auditor(s) at least annually. The meeting would be called by the Executive Director of Administrative Services.

3. Due to limited staff, the District can provide partially completed financial statements and supporting schedules for auditor review at the close of the fiscal year. Attachment B includes a listing of audit schedules that the District has prepared.

4. The District intends to sell bonds from time to time, which may require the audited financial statements and Auditors opinion to be printed in total or as a part of the section of or addendum to the

2 Official Statement for bond issues. Also, certification may be required for Interest and Sinking Fund Balances as a point in time other than year end.

5. It is requested that the interested accounting firm include a detailed description of each step in the audit approach that will be taken in the audit engagement including estimated hours for each.

6. The firm upon being awarded this engagement will be expected to review the detailed audit work plan and schedule with the Executive Director of Administrative Services prior to commencing the audit assignment each year.

7. Financial statements developed by the Auditor must be in a form that complies with the requirements for the GFOA Certificate of Achievement, the ASBO Certificate of Excellence, and the Texas Education Agency.

8. All working papers and reports must be retained, at the auditor’s , for a minimum of five (5) years, unless the firm is notified in writing by the District of the need to extend the retention period. The auditor will be required to make working papers available, upon request, to auditors from the Texas Education Agency, The Government Accountability Office, or other applicable governmental agencies, they are not otherwise considered to be records open to the general public.

B. Independent Auditor

The interested accounting firm must demonstrate the capability to perform the annual audit in accordance with generally accepted government auditing standards and state board of education auditing rules. Public accounting firms that have performed annual for similar entities are encouraged to file a proposal.

C. Term of the Audit Engagement

The contract for audit services based upon Board of Trustees approval of the proposal will be for the fiscal year ending August 31, 2013. The Pleasanton Independent School District may request to extend this agreement for another four years through fiscal year August 31, 2017, following satisfactory delivery of the services specified in the proposal and engagement letter.

D. Dispute Resolution

Disputes concerning the terms of contracted services that cannot be resolved will be brought before an independent mediation center, whose decision will be binding upon both parties.

3 II. PROPOSAL CONTENT

A. Cover Letter

See conditions for submission of proposal in Section III.

B. Technical Component

To describe clearly the public accounting firm's understanding of the work to be done, the interested accounting firm will:

1. Provide a definition of the term "generally accepted government auditing standards" with clear distinctions between these standards and generally accepted auditing standards for nongovernmental engagements;

2. Explain the interested accounting firm's approaches to performing an annual audit, including the methodology, nature, timing and extent of audit procedures to be performed;

3. Describe how the approach to performing the audit would be affected if this were a multiyear contract; and

4. Make a statement concerning the independence of the interested accounting firm, including direct and indirect financial interest, and the relationship of the proposed audit team to employees of the district and any of the board members.

C. Management Component

The interested accounting firm will furnish satisfactory evidence of capability to provide in a professional and timely manner the services stated in the Request for Qualifications. To meet this requirement:

1. Provide the name of the external quality control review organization of which the interested accounting firm is a member and the interested accounting firm's length of membership. Also, state the review organization's planned frequency of peer reviews;

2. State whether the firm has received a peer review and whether in the most recent review an unqualified report was issued;

3. State whether the interested accounting firm is a national, regional or local public accounting firm;

4. Provide evidence that the interested accounting firm has experience in performing school district/government audits. List current and past audit clients along with the names and telephone numbers of contact persons and number of years audit services were provided. State the average daily attendance of the public schools on the list;

4 5. State whether the interested accounting firm is currently under the terms of a public or private reprimand by the Texas State Board of Public Accountancy and licensing boards of other states;

6. Describe the proposed audit team, in terms of job positions in the firm;

7. List names of staff member(s) who will direct the overall audit throughout the duration of the engagement as well as those staff members who will be responsible for planning, directing, and conducting substantial portions of the fieldwork or reporting on this audit engagement. Include the educational background of all staff members named and professional licenses held;

8. Describe continuing professional education in and auditing received by the proposed audit team during the last four years;

9. Provide the names and qualifications of any needed outside specialists and consultants that will assist the interested accounting firm's staff members;

10. Describe staff rotation plans for audit team members if this is to be a multiyear contract;

11. Describe the level of assistance that will be expected from District personnel, including staff; and

12. Provide evidence of the ability to comply with the requirements in Sections II and VI of the Request for Qualifications.

D. Task/Activity Plan

The interested accounting firm will specify budgeted hours, time lines and sequence for audit procedures, and names of staff to be assigned.

E. Evaluation

Criteria used to evaluate the interested accounting firm's methodologies, products, and services are shown in Attachment A.

5 III. CONDITIONS FOR SUBMISSIONS OF PROPOSAL

All qualifications in response to this request must meet the following conditions to be considered:

A. Qualifications must include a cover letter clearly stating the name of the firm and the name, address, and telephone number of the interested accounting firm's representative;

B. Qualifications must address each of the audit requirements as stated in this Request for Qualifications;

C. The Pleasanton Independent School District reserves the right to reject any and all qualifications, and to negotiate portions thereof. Qualifications that address only part of the requirements contained in this Request for Qualifications will not be considered;

D. The Pleasanton Independent School District reserves the right to select any proposal, considering the quoted estimated fee and other factors;

E. The interested accounting firm shall furnish such additional information that the District may reasonably require;

F. The Pleasanton Independent School District will not be liable for any incurred in the preparation of qualifications; and

G. The Pleasanton Independent School District may ask interested accounting firms to send a representative for an oral interview prior to Board of Trustee approval of a proposal. The Pleasanton Independent School District will not be liable for the costs incurred by the interested accounting firm in connection with such interview.

H. The Pleasanton Independent School District and interested accounting firms may enter into discussions and revisions of proposal, as necessary. Discussions/negotiations may be conducted with interested accounting firms who are deemed to be within the final competitive range; however, Pleasanton Independent School District reserves the right to award a contract without discussions/negotiations. The best and final proposal may be required as early as 24 hours after completion of negotiations/discussions.

I. Qualifications must be signed by an authorized individual to contractually bind their firm when submitting the Qualifications. Failure to sign the Qualifications will be considered as a “mistake in Qualifications”, and the Qualifications will be rejected as “non- responsive”.

J. By submitting a proposal, the interested accounting firm affirms that its company, corporation, firm, or individual has not prepared this proposal in collusion with any other bidder and that the contents of this proposal as to prices, terms, or conditions have not been communicated by the undersigned or by any employee or agent to any other

6 person or firm engaged in this type of prior to the official opening of this proposal.

K. Upon notification of potential selections for award, the person or entity submitting this proposal must give notice to the district if the person or an owner or operator of the business entity has been convicted of a felony. The notice must include a general description of the conduct resulting in this conviction of a felony (this requirement does not apply to a publicly held corporation).

L. In the event that any one or more of the provisions contained in this Request for Qualifications (or resulting purchase order) shall be held by a court of competent jurisdiction to be invalid, illegal or unenforceable, such provisions shall not affect any other hereof, and this Request for Qualifications (or any resulting purchase order) shall be construed as if the invalid, illegal or unenforceable provision(s) had never been contained herein.

IV. PROCEDURES FOR SUBMITTING PROPOSALS

A. Delivery

Responses to the Request for Qualifications should be addressed to:

Pleasanton Independent School District Attention: Tracie Moos 831 Stadium Drive Pleasanton, Texas 78064

Please allow adequate mailing time for your response.

Proposals must be received no later than 2:00 p.m., April 12, 2013. Proposals received at the Pleasanton ISD Business Office after the time and date specified above will not be considered and will be filed unopened. Envelopes must be clearly marked “RFQ #2013-02 Annual Financial Audit”.

It is the interested accounting firm’s responsibility to read and comply with the information provided. Failure to complete and submit this RFQ according to the information and instructions may result in disqualification.

Oral or telegraphic proposals transmitted via the District’s facsimile machine are not acceptable. Proposals must be submitted to the District in a sealed envelope. DO NOT FAX YOUR PROPOSALS!

B. Number of Copies of Qualifications

Submit three (3) copies of the qualifications. The qualifications are to be bound and sealed.

7 V. ASSISTANCE TO PROPOSERS

Any person wishing to obtain additional information about the Request for Qualifications or about the operations of the District may contact:

Tracie Moos Executive Director of Administrative Services [email protected]

The District will only respond to questions submitted via email.

VI. STATEMENT OF REQUIREMENTS

A. The independent auditor will provide one (1) camera ready copy of the final comprehensive annual financial report that meets the requirements of Texas Education Agency Financial Accountability System Resource Guide, the requirements for the GFOA Certificate of Achievement, and the ASBO Certificate of Excellence and a copy in .pdf format.

B. The independent auditor will be required to submit 20 copies of the final compensatory education audit, if applicable.

C. A preliminary draft of the audit report(s) will be presented to the District prior to submission of the final draft. Timing of the submission must allow District personnel sufficient time to review the report.

D. Satisfactory delivery of the services specified by the Request for Qualifications and the engagement letter shall be accomplished no later than the January meeting of the Board of Trustees for the financial audit.

E. The independent auditor will be required to present the audit report to the Board of Trustees no later than the December meeting of the Board of Trustees.

E. The independent auditor is required to provide a management letter containing comments oriented toward constructive improvements. Copies of selected audit working papers will be provided as requested by the District and as provided for in the engagement letter. If a management letter is issued, the auditor will provide the District twenty (20) copies.

F. The auditor will prepare and provide one (1) copy of the Data Collection Form for Reporting on Audits of States, Local Governments and Nonprofit .

VII. PROPOSED SCHEDULE

Qualifications Timing

Qualifications due to the District April 12, 2013

Approval of firm by Board of Trustees May 14, 2013

8 Audit Timing (subject to change)

Start Interim field work July 22, 2013

Start final field work October 14, 2013

Draft financial statements and management letter November 27, 2013 due to Finance Department for review

Presentation of issued financial statements December 10, 2013 to the Board of Trustees on or before

VIII. BOARD OF TRUSTEE APPROVAL

The Board of Trustees expects to engage an audit firm for five years. However, the Board of Trustees expressly reserves the right to reject all bids and to review the relationship on an annual basis and to formally approve each year’s extension. The Pleasanton Independent School District reserves the right to cancel any contract resulting from this Request for Qualifications at any time, for any reason (or for no reason) with a thirty (30) day written notice to the firm. The firm may cancel any resulting contract, at any time for any reason, or for no reason with a sixty (60) day written notice. Any notice required or permitted to be delivered to the firm shall be deemed to be delivered when mailed by registered or certified mail, return receipt requested, postage prepaid, and addressed to the bidder’s address appearing on the face of the Request for Qualifications (or as subsequently revised or changed). Any compensation due the firm will be limited to items received and/or services performed and accepted by the District. It is possible that the Board could terminate the relationship at any time. However, the Board of Trustees does not desire or expect that to be the case and assumes that a long and satisfactory relationship will be the experience.

XI. OTHER INFORMATION

A. Auditors will be allowed to work on site after 5:00 p.m. and on weekends if necessary and desirable. However, it cannot be guaranteed that Staff will be available to answer questions at those times. Arrangements should be made in advance if these after-hours periods are necessary.

B. The Board of Trustees will pass a resolution accepting the written proposal as the understood agreement for services performed and other commitments.

9 Attachment A

EVALUATION WORKSHEET

This worksheet is to be used to document the District's evaluation of the interested accounting firms' qualifications. Points within the ranges specified are to be assigned to the below-listed criteria as a means for quantifying the relative strengths and weaknesses of the various qualifications.

In the event that oral interviews are necessary to break a tie or for making final clarification in the evaluation process, additional points may be awarded. It should be understood that while the total score is a significant factor, the requester of the services reserves the right to consider other factors in making a final selection.

PROFESSIONAL QUALIFICATIONS

The evaluation of professional qualifications of the interested accounting firms will be based on the following criteria:

I. Mandatory Criteria

Proposals will not be considered for further evaluation unless there is compliance with all of the following criteria. The interested accounting firm:

A. Must be an independent auditor properly licensed for public practice.

B. Must meet the independence standards of Government Auditing Standards, United States Government Accountability office (GAO).

C. Must not have a record of substandard work.

D. Must submit a proposal meeting all of the requirements of the Request for Qualifications.

II. Technical Criteria POINTS

Proposals which have met each of the criteria in Section I above will be evaluated on the following criteria:

A. Technical experience of the firm:

1. Auditing experience in Texas public schools (0-25)

2. Auditing experience in government entities (0-5)

B. Characteristics of the staff, including consultants to be assigned to the audit:

1. Size and structure of the firm, including audit staff positions (0-10)

10 2. Qualifications of supervisory personnel, consultants, and the field audit team (0-25)

. Education, including continuing education courses taken during the past two years

. Years and types of experience

3. General direction and supervision to be exercised over the audit team by the firm's management personnel (0-20)

C. Clear understanding of the work to be performed:

1. Comprehensiveness of the audit work plan (0-5)

2. Realistic time estimates of each major segment of the work plan, and the estimated number of hours for each staff level including consultants assigned (0-10)

Total Technical Points (100 possible) ______

III. Oral Interviews (If Necessary)

Interview Points Awarded (0-15)

Total Points ______

11

Attachment B

Audit Schedules That Have Been Prepared By the District

GENERAL FUND

1. : , Liabilities, Fund , and Expenditures

2. Detail of Actual Expenditures by function and object code (and budget amounts, if applicable)

3. Revenues by Source

INTERNAL SERVICE FUND

4. Trial Balance: Assets, Liabilities, Retained Earnings, Revenues and

5. Statement of Revenues Expenses and Changes in Retained Earnings

6. Statement of Cash Flows (by fund and in total)

7. TASB Workers’ Compensation Report - Actuarial Study (if one has been performed this year)

AGENCY FUNDS

8. Trial Balance: Assets, Liabilities, Fund Equity and Statement of Changes in Assets & Liabilities

9. Trial Balance - Escrow

SPECIAL FUNDS

10. Trial Balance: Assets, Liabilities, Fund Equity and Combining Statement of Revenues, Expenditures and Changes in Fund Balance (both by function and Budget vs. Actual)

11. Schedule of Expenditure of Federal Awards

12. Schedule of Expenditures for Computation of Indirect Cost

12 CAPITAL PROJECT FUNDS

13. Trial Balance: Assets, Liabilities, Fund Equity, Revenues and Expenditures

14. Summary of Rebatable Arbitrage

FIXED ASSETS

15. Summary of Changes

16. Schedule by Function and Source

17. Schedule by Function and Activity

18. Schedule of Changes in General Fixed Assets by Function and Activity

19. Summary of Construction in Progress

20. Construction in Progress Schedule

21. Major Commitments for Construction in Progress

DEBT SERVICE FUND

22. Trial Balance: Assets, Liabilities, Fund Equity, Revenues and Expenditures

DEBT

23. Bond Payment Schedules

24. Trial Balance:

25. Bond Schedule for CAFR

26. Bond Schedule (Debt Service Requirements through Maturity)

27. Schedule of Leases Payable (Current Year through Total Future Payments)

28. Schedule of Refunded Debt Outstanding

MISCELLANEOUS

29. Summary of Bank Reconciliations

30. Interbank Transfers

31. Test of Accrued Interest

13

32. Schedule of Delinquent Taxes Receivable

33. Schedule of Prepaid Insurance

34. Inter-fund Receivables/Payables (Due To/From)

35. Sick Leave Pay

36. Outstanding Purchase Order Listing

37. TRS Schedule

38. Interest and Income Average Yield

39. Detail of Other Sources (Uses)

40. Combined Balance - All Fund Types and Groups

41. Combined Statement of Revenues, Expenditures and Changes in Fund Balances-All Governmental Fund Types

42. Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget (GAAP Basis) and Actual - All Governmental Fund Types

43. Budget Amendments

STATISTICAL SECTION (ITEMS #44 - 55)

44. Property Tax Levies and Collections

45. Ratio of Net General Bonded Debt to Assessed Value

46. Computation of Legal Debt Margin

47. Ratio of Annual Debt Service for General Bonded Debt to Total General Expend

48. Demographic Statistics

49. Construction and Property Value

50. Principal Taxpayers

51. Miscellaneous Statistics

52. General Governmental Expenditures by Function

53. General Governmental Revenues By Source

54. Assessed Taxable Value By Type of Property

55. Property Tax Rates - Direct and All Overlapping Governments

14

56. Computation of Direct and Overlapping Debt

57. Property Value, Construction and Bank Deposits

58. Schedule of Test of Property Tax Allocation

59. Optimum Fund Balance Calculation Schedule

60. PEIMS report

61. Final Financial report-All funds-Revenues & Expenditures

MISCELLANEOUS

62. Various Confirmations

63. Board Minutes - through the date of report issuance

15 Form W-9 Request for Taxpayer Give Form to the (Rev. December 2011) requester. Do not Department of the Treasury Identification Number and Certification send to the IRS. Internal Revenue Service Name (as shown on your income tax return)

Business name/disregarded entity name, if different from above

Check appropriate box for federal tax classification: Individual/sole proprietor C Corporation S Corporation Partnership Trust/estate

Exempt payee Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=partnership) ▶

Other (see instructions) ▶ Print or type Address (number, street, and apt. or suite no.) Requester’s name and address (optional)

City, state, and ZIP code See Specific Instructions on page 2. List account number(s) here (optional)

Part I Taxpayer Identification Number (TIN) Enter your TIN in the appropriate box. The TIN provided must match the name given on the “Name” line Social security number to avoid backup withholding. For individuals, this is your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other – – entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN on page 3. Note. If the account is in more than one name, see the chart on page 4 for guidelines on whose Employer identification number number to enter. – Part II Certification Under penalties of perjury, I certify that: 1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and 2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or , or (c) the IRS has notified me that I am no longer subject to backup withholding, and 3. I am a U.S. citizen or other U.S. person (defined below). Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions on page 4.

Sign Signature of Here U.S. person ▶ Date ▶ General Instructions Note. If a requester gives you a form other than Form W-9 to request your TIN, you must use the requester’s form if it is substantially similar Section references are to the Internal Revenue Code unless otherwise to this Form W-9. noted. Definition of a U.S. person. For federal tax purposes, you are Purpose of Form considered a U.S. person if you are: A person who is required to file an information return with the IRS must • An individual who is a U.S. citizen or U.S. resident alien, obtain your correct taxpayer identification number (TIN) to report, for • A partnership, corporation, company, or association created or example, income paid to you, real estate transactions, mortgage interest organized in the United States or under the laws of the United States, you paid, acquisition or abandonment of secured property, cancellation • An estate (other than a foreign estate), or of debt, or contributions you made to an IRA. • A domestic trust (as defined in Regulations section 301.7701-7). Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN to the person requesting it (the Special rules for . Partnerships that conduct a or requester) and, when applicable, to: business in the United States are generally required to pay a withholding tax on any foreign partners’ share of income from such business. 1. Certify that the TIN you are giving is correct (or you are waiting for a Further, in certain cases where a Form W-9 has not been received, a number to be issued), partnership is required to presume that a partner is a foreign person, 2. Certify that you are not subject to backup withholding, or and pay the withholding tax. Therefore, if you are a U.S. person that is a 3. Claim exemption from backup withholding if you are a U.S. exempt partner in a partnership conducting a trade or business in the United payee. If applicable, you are also certifying that as a U.S. person, your States, provide Form W-9 to the partnership to establish your U.S. allocable share of any partnership income from a U.S. trade or business status and avoid withholding on your share of partnership income. is not subject to the withholding tax on foreign partners’ share of effectively connected income. Cat. No. 10231X Form W-9 (Rev. 12-2011) Form W-9 (Rev. 12-2011) Page 2

The person who gives Form W-9 to the partnership for purposes of Certain payees and payments are exempt from backup withholding. establishing its U.S. status and avoiding withholding on its allocable See the instructions below and the separate Instructions for the share of from the partnership conducting a trade or business Requester of Form W-9. in the United States is in the following cases: Also see Special rules for partnerships on page 1. • The U.S. owner of a disregarded entity and not the entity, Updating Your Information • The U.S. grantor or other owner of a grantor trust and not the trust, and You must provide updated information to any person to whom you claimed to be an exempt payee if you are no longer an exempt payee • The U.S. trust (other than a grantor trust) and not the beneficiaries of and anticipate receiving reportable payments in the future from this the trust. person. For example, you may need to provide updated information if Foreign person. If you are a foreign person, do not use Form W-9. you are a C corporation that elects to be an S corporation, or if you no Instead, use the appropriate Form W-8 (see Publication 515, longer are tax exempt. In addition, you must furnish a new Form W-9 if Withholding of Tax on Nonresident Aliens and Foreign Entities). the name or TIN changes for the account, for example, if the grantor of a Nonresident alien who becomes a resident alien. Generally, only a grantor trust dies. nonresident alien individual may use the terms of a tax treaty to reduce Penalties or eliminate U.S. tax on certain types of income. However, most tax treaties contain a provision known as a “saving clause.” Exceptions Failure to furnish TIN. If you fail to furnish your correct TIN to a specified in the saving clause may permit an exemption from tax to requester, you are subject to a penalty of $50 for each such failure continue for certain types of income even after the payee has otherwise unless your failure is due to reasonable cause and not to willful neglect. become a U.S. resident alien for tax purposes. Civil penalty for false information with respect to withholding. If you If you are a U.S. resident alien who is relying on an exception make a false statement with no reasonable basis that results in no contained in the saving clause of a tax treaty to claim an exemption backup withholding, you are subject to a $500 penalty. from U.S. tax on certain types of income, you must attach a statement to Form W-9 that specifies the following five items: Criminal penalty for falsifying information. Willfully falsifying certifications or affirmations may subject you to criminal penalties 1. The treaty country. Generally, this must be the same treaty under including fines and/or imprisonment. which you claimed exemption from tax as a nonresident alien. Misuse of TINs. If the requester discloses or uses TINs in violation of 2. The treaty article addressing the income. federal law, the requester may be subject to civil and criminal penalties. 3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions. Specific Instructions 4. The type and amount of income that qualifies for the exemption Name from tax. 5. Sufficient facts to justify the exemption from tax under the terms of If you are an individual, you must generally enter the name shown on the treaty article. your income tax return. However, if you have changed your last name, for instance, due to marriage without informing the Social Security Example. Article 20 of the U.S.-China income tax treaty allows an Administration of the name change, enter your first name, the last name exemption from tax for scholarship income received by a Chinese shown on your social security card, and your new last name. student temporarily present in the United States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in If the account is in joint names, list first, and then circle, the name of the United States exceeds 5 calendar years. However, paragraph 2 of the person or entity whose number you entered in Part I of the form. the first Protocol to the U.S.-China treaty (dated April 30, 1984) allows Sole proprietor. Enter your individual name as shown on your income the provisions of Article 20 to continue to apply even after the Chinese tax return on the “Name” line. You may enter your business, trade, or student becomes a resident alien of the United States. A Chinese “doing business as (DBA)” name on the “Business name/disregarded student who qualifies for this exception (under paragraph 2 of the first entity name” line. protocol) and is relying on this exception to claim an exemption from tax Partnership, C Corporation, or S Corporation. Enter the entity's name on his or her scholarship or fellowship income would attach to Form on the “Name” line and any business, trade, or “doing business as W-9 a statement that includes the information described above to (DBA) name” on the “Business name/disregarded entity name” line. support that exemption. Disregarded entity. Enter the owner's name on the “Name” line. The If you are a nonresident alien or a foreign entity not subject to backup name of the entity entered on the “Name” line should never be a withholding, give the requester the appropriate completed Form W-8. disregarded entity. The name on the “Name” line must be the name What is backup withholding? Persons making certain payments to you shown on the income tax return on which the income will be reported. must under certain conditions withhold and pay to the IRS a percentage For example, if a foreign LLC that is treated as a disregarded entity for of such payments. This is called “backup withholding.” Payments that U.S. federal tax purposes has a domestic owner, the domestic owner's may be subject to backup withholding include interest, tax-exempt name is required to be provided on the “Name” line. If the direct owner interest, dividends, broker and barter exchange transactions, rents, of the entity is also a disregarded entity, enter the first owner that is not royalties, nonemployee pay, and certain payments from fishing boat disregarded for federal tax purposes. Enter the disregarded entity's operators. Real estate transactions are not subject to backup name on the “Business name/disregarded entity name” line. If the owner withholding. of the disregarded entity is a foreign person, you must complete an You will not be subject to backup withholding on payments you appropriate Form W-8. receive if you give the requester your correct TIN, make the proper Note. Check the appropriate box for the federal tax classification of the certifications, and report all your taxable interest and dividends on your person whose name is entered on the “Name” line (Individual/sole tax return. proprietor, Partnership, C Corporation, S Corporation, Trust/estate). Payments you receive will be subject to backup Limited Liability Company (LLC). If the person identified on the withholding if: “Name” line is an LLC, check the “Limited liability company” box only and enter the appropriate code for the tax classification in the space 1. You do not furnish your TIN to the requester, provided. If you are an LLC that is treated as a partnership for federal 2. You do not certify your TIN when required (see the Part II tax purposes, enter “P” for partnership. If you are an LLC that has filed a instructions on page 3 for details), Form 8832 or a Form 2553 to be taxed as a corporation, enter “C” for 3. The IRS tells the requester that you furnished an incorrect TIN, C corporation or “S” for S corporation. If you are an LLC that is disregarded as an entity separate from its owner under Regulation 4. The IRS tells you that you are subject to backup withholding section 301.7701-3 (except for employment and excise tax), do not because you did not report all your interest and dividends on your tax check the LLC box unless the owner of the LLC (required to be return (for reportable interest and dividends only), or identified on the “Name” line) is another LLC that is not disregarded for 5. You do not certify to the requester that you are not subject to federal tax purposes. If the LLC is disregarded as an entity separate backup withholding under 4 above (for reportable interest and from its owner, enter the appropriate tax classification of the owner accounts opened after 1983 only). identified on the “Name” line. Form W-9 (Rev. 12-2011) Page 3

Other entities. Enter your business name as shown on required federal Part I. Taxpayer Identification Number (TIN) tax documents on the “Name” line. This name should match the name shown on the charter or other legal document creating the entity. You Enter your TIN in the appropriate box. If you are a resident alien and may enter any business, trade, or DBA name on the “Business name/ you do not have and are not eligible to get an SSN, your TIN is your IRS disregarded entity name” line. individual taxpayer identification number (ITIN). Enter it in the social security number box. If you do not have an ITIN, see How to get a TIN Exempt Payee below. If you are exempt from backup withholding, enter your name as If you are a sole proprietor and you have an EIN, you may enter either described above and check the appropriate box for your status, then your SSN or EIN. However, the IRS prefers that you use your SSN. check the “Exempt payee” box in the line following the “Business name/ If you are a single-member LLC that is disregarded as an entity disregarded entity name,” sign and date the form. separate from its owner (see Limited Liability Company (LLC) on page 2), Generally, individuals (including sole proprietors) are not exempt from enter the owner’s SSN (or EIN, if the owner has one). Do not enter the backup withholding. Corporations are exempt from backup withholding disregarded entity’s EIN. If the LLC is classified as a corporation or for certain payments, such as interest and dividends. partnership, enter the entity’s EIN. Note. If you are exempt from backup withholding, you should still Note. See the chart on page 4 for further clarification of name and TIN complete this form to avoid possible erroneous backup withholding. combinations. The following payees are exempt from backup withholding: How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form SS-5, Application for a Social Security 1. An organization exempt from tax under section 501(a), any IRA, or a Card, from your local Social Security Administration office or get this custodial account under section 403(b)(7) if the account satisfies the form online at www.ssa.gov. You may also get this form by calling requirements of section 401(f)(2), 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer 2. The United States or any of its agencies or instrumentalities, Identification Number, to apply for an ITIN, or Form SS-4, Application for 3. A state, the District of Columbia, a possession of the United States, Employer Identification Number, to apply for an EIN. You can apply for or any of their political subdivisions or instrumentalities, an EIN online by accessing the IRS website at www.irs.gov/businesses and clicking on Employer Identification Number (EIN) under Starting a 4. A foreign government or any of its political subdivisions, agencies, Business. You can get Forms W-7 and SS-4 from the IRS by visiting or instrumentalities, or IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676). 5. An international organization or any of its agencies or If you are asked to complete Form W-9 but do not have a TIN, write instrumentalities. “Applied For” in the space for the TIN, sign and date the form, and give Other payees that may be exempt from backup withholding include: it to the requester. For interest and dividend payments, and certain 6. A corporation, payments made with respect to readily tradable instruments, generally you will have 60 days to get a TIN and give it to the requester before you 7. A foreign central bank of issue, are subject to backup withholding on payments. The 60-day rule does 8. A dealer in securities or required to register in the not apply to other types of payments. You will be subject to backup United States, the District of Columbia, or a possession of the United withholding on all such payments until you provide your TIN to the States, requester. 9. A futures commission merchant registered with the Note. Entering “Applied For” means that you have already applied for a Futures Trading Commission, TIN or that you intend to apply for one soon. 10. A real estate investment trust, Caution: A disregarded domestic entity that has a foreign owner must 11. An entity registered at all times during the tax year under the use the appropriate Form W-8. Investment Company Act of 1940, Part II. Certification 12. A common trust fund operated by a bank under section 584(a), To establish to the withholding agent that you are a U.S. person, or 13. A financial institution, resident alien, sign Form W-9. You may be requested to sign by the 14. A middleman known in the investment community as a nominee or withholding agent even if item 1, below, and items 4 and 5 on page 4 custodian, or indicate otherwise. 15. A trust exempt from tax under section 664 or described in section For a joint account, only the person whose TIN is shown in Part I 4947. should sign (when required). In the case of a disregarded entity, the person identified on the “Name” line must sign. Exempt payees, see The following chart shows types of payments that may be exempt Exempt Payee on page 3. from backup withholding. The chart applies to the exempt payees listed above, 1 through 15. Signature requirements. Complete the certification as indicated in items 1 through 3, below, and items 4 and 5 on page 4. IF the payment is for . . . THEN the payment is exempt 1. Interest, dividend, and barter exchange accounts opened for . . . before 1984 and broker accounts considered active during 1983. You must give your correct TIN, but you do not have to sign the Interest and dividend payments All exempt payees except certification. for 9 2. Interest, dividend, broker, and barter exchange accounts Broker transactions Exempt payees 1 through 5 and 7 opened after 1983 and broker accounts considered inactive during through 13. Also, C corporations. 1983. You must sign the certification or backup withholding will apply. If Barter exchange transactions and Exempt payees 1 through 5 you are subject to backup withholding and you are merely providing patronage dividends your correct TIN to the requester, you must cross out item 2 in the certification before signing the form. Payments over $600 required to be Generally, exempt payees You must sign the certification. You may 2 3. Real estate transactions. reported and direct sales over 1 through 7 cross out item 2 of the certification. $5,000 1 1 See Form 1099-MISC, Miscellaneous Income, and its instructions. 2 However, the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments, attorneys' fees, gross proceeds paid to an attorney, and payments for services paid by a federal executive agency. Form W-9 (Rev. 12-2011) Page 4

4. Other payments. You must give your correct TIN, but you do not Note. If no name is circled when more than one name is listed, the have to sign the certification unless you have been notified that you number will be considered to be that of the first name listed. have previously given an incorrect TIN. “Other payments” include payments made in the course of the requester’s trade or business for Secure Your Tax Records from Identity Theft rents, royalties, goods (other than bills for merchandise), medical and Identity theft occurs when someone uses your personal information health care services (including payments to corporations), payments to such as your name, social security number (SSN), or other identifying a nonemployee for services, payments to certain fishing boat crew information, without your permission, to commit fraud or other crimes. members and fishermen, and gross proceeds paid to attorneys An identity thief may use your SSN to get a job or may file a tax return (including payments to corporations). using your SSN to receive a refund. 5. Mortgage interest paid by you, acquisition or abandonment of To reduce your risk: secured property, cancellation of debt, qualified tuition program • Protect your SSN, payments (under section 529), IRA, Coverdell ESA, Archer MSA or HSA contributions or distributions, and pension distributions. You • Ensure your employer is protecting your SSN, and must give your correct TIN, but you do not have to sign the certification. • Be careful when choosing a tax preparer. If your tax records are affected by identity theft and you receive a What Name and Number To Give the Requester notice from the IRS, respond right away to the name and phone number For this type of account: Give name and SSN of: printed on the IRS notice or letter. If your tax records are not currently affected by identity theft but you 1. Individual The individual think you are at risk due to a lost or stolen purse or wallet, questionable 2. Two or more individuals (joint The actual owner of the account or, credit card activity or credit report, contact the IRS Identity Theft Hotline account) if combined funds, the first 1 at 1-800-908-4490 or submit Form 14039. individual on the account For more information, see Publication 4535, Identity Theft Prevention 3. Custodian account of a minor The minor 2 (Uniform Gift to Minors Act) and Victim Assistance. 4. a. The usual revocable savings The grantor-trustee 1 Victims of identity theft who are experiencing economic harm or a trust (grantor is also trustee) system problem, or are seeking help in resolving tax problems that have b. So-called trust account that is The actual owner 1 not been resolved through normal channels, may be eligible for not a legal or valid trust under Taxpayer Advocate Service (TAS) assistance. You can reach TAS by state law calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 5. Sole proprietorship or disregarded The owner 3 1-800-829-4059. entity owned by an individual Protect yourself from suspicious emails or phishing schemes. The grantor* 6. Grantor trust filing under Optional Phishing is the creation and use of email and websites designed to Form 1099 Filing Method 1 (see Regulation section 1.671-4(b)(2)(i)(A)) mimic legitimate business emails and websites. The most common act is sending an email to a user falsely claiming to be an established For this type of account: Give name and EIN of: legitimate enterprise in an attempt to scam the user into surrendering 7. Disregarded entity not owned by an The owner private information that will be used for identity theft. individual 8. A valid trust, estate, or pension trust Legal entity 4 The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request personal detailed information through email or ask 9. Corporation or LLC electing The corporation taxpayers for the PIN numbers, passwords, or similar secret access corporate status on Form 8832 or Form 2553 information for their credit card, bank, or other financial accounts. 10. Association, club, religious, The organization If you receive an unsolicited email claiming to be from the IRS, charitable, educational, or other forward this message to [email protected]. You may also report misuse tax-exempt organization of the IRS name, logo, or other IRS property to the Treasury Inspector 11. Partnership or multi-member LLC The partnership General for Tax Administration at 1-800-366-4484. You can forward 12. A broker or registered nominee The broker or nominee suspicious emails to the Federal Trade Commission at: [email protected] 13. Account with the Department of The public entity or contact them at www.ftc.gov/idtheft or 1-877-IDTHEFT Agriculture in the name of a public (1-877-438-4338). entity (such as a state or local Visit IRS.gov to learn more about identity theft and how to reduce government, school district, or your risk. prison) that receives agricultural program payments 14. Grantor trust filing under the Form The trust 1041 Filing Method or the Optional Form 1099 Filing Method 2 (see Regulation section 1.671-4(b)(2)(i)(B))

1 List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that person’s number must be furnished. 2 Circle the minor’s name and furnish the minor’s SSN. 3 You must show your individual name and you may also enter your business or “DBA” name on the “Business name/disregarded entity” name line. You may use either your SSN or EIN (if you have one), but the IRS encourages you to use your SSN. 4 List first and circle the name of the trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.) Also see Special rules for partnerships on page 1. *Note. Grantor also must provide a Form W-9 to trustee of trust.

Privacy Act Notice Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the IRS to report interest, dividends, or certain other income paid to you; mortgage interest you paid; the acquisition or abandonment of secured property; the cancellation of debt; or contributions you made to an IRA, Archer MSA, or HSA. The person collecting this form uses the information on the form to file information returns with the IRS, reporting the above information. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation and to cities, states, the District of Columbia, and U.S. possessions for use in administering their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to enforce civil and criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your TIN whether or not you are required to file a tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to the payer. Certain penalties may also apply for providing false or fraudulent information.