CR 99-30 Contract For Information Technology Assessment
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February 11, 1999 ~ Council Report 99-030
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. CONTRACT FOR INFORMATION TECHNOLOGY ASSESSMENT
Proposed Action
Staffrecommends adoption of the following: Move to enter into a contract for information
teclmology assessment.
Adoption of this motion will result in staff entering into a contract with Peat Marwick for
consulting services to review the city's current technology environment and assess the services
required now and in the future.
Overview
One of the goals set forth in the 1998 budget was to resolve the city's teclmology issues by
determining exactly what the issues were and then deciding on the best way to solve them. The
decision was made to hire an outside consultant to come in and review our teclmology systems and
give us some advice as to what approach the city should take, if any, to help with our current and
future teclmology status.
Originally we interviewed computer consultants to see what type of analysis services they could
provide us. The general response was that they would analyze the city and then determine that we
needed to contract with them for computer services.
e To achieve a more objective opinion we decided to interview Peat Marwick. They are our current
auditors, but in addition to audit, they have special consulting areas that handle specific client needs.
After our interview we determined that they would provide us with the information we desired about
our technology status, without the bias.
The earliest date they are available is March 1 sl of 1999. Finance has requested a budget transfer of
the funds necessary to pay for the consultants. The estimated fees and expenses are $15,000.
Primary Issues to Consider
. The city is in need of some direction in regards to teclmology needs and issues, specifically how
to manage our information technology services.
. We budgeted for this item in 1998 and requested this unspent budget to be carried over into
1999.
Staff Recommendation
Finance recommends entering into an agreement with Peat Marwick to provide consulting services
for information technology analysis.
.
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KPMG Peat Marwick LLP
. 4200 Norwest Center Telephone 612 305 5000 Telefax 612 305 5039
90 South Seventh Street
Minneapolis. MN 55402
August 17, 1998
Ms. Lori Yager
Finance Director
City of Hopkins
] 010 First Street South
Hopkins, MN 55343
Dear Lori:
In response to our recent conversation with you and Jeff Norris ofKPMG, we would like
to present our understanding of the work to be performed and the related fees for the
review of your information technology function.
. Understanding ofthe Work to be Performed
Based on our discussions with you, we understand that the proposed project relates to an
assessment of controls and services for the information technology function. The work is
to review the CUlTent control structure, the information teclmology services required
currently and in the future to support the City of Hopkins. The proposed scope includes
the following:
. Conduct twelve interview sessions 011 the current information technology
concerns, cunent requirements and future requirements for informatioll
technology services for the City of Hopkins.
. Perform an analysis of the information technology function to obtain an
overview of the what, where and how the services are to he performed.
- Perform an analysis of the information technology function to obtain an
overview of the current requirements for the City of Hopkins.
. Perform an analysis of the information technology function to determine the
near term and future requirements for the City of Hopkins.
.
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KPMG Peat Marwick LLP
. Ms. Lori Yager
August 17, 1998
Page 2
. Perform a gap analysis concerning the control structure for the information
technology function.
. Review any comments with you on improvements to security and access
controls and procedures for the information technology function that we
discover as a result of this engagement
Project Approach
The following presents an overview of our project steps:
1. Project Initiation
. During this step we verifY and tailor the project's scope and objectives to
ensure they will meet your needs and expectations. Together we will
. develop an approach that fits into your business needs, most ef1iciently
utilizes your resources, both human and financial, and accurately responds
to the specific issues YOll want to address.
. Conduct twelve interview sessions together the current concerns, current
and future requirements for information technology services for the City of
Hopkins.
. Review available documentation of the organizational structure and
selected documentation of the information technology function.
. Develop more detailed work plans and communicate the results to you.
2. Complete the Procedures
. Perform the review of the information technology hardware, software,
applications and services.
. Perform the review of the necd of cOlU1ectivity between business unit
locations.
. Perform an analysis of the requirements for services regarding the
information technology function.
. Perform a review of the security requirement regarding the infi.xmation
technology function.
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KPMG Peat Marwick LLP
. Ms. Lori Yager
August 17, ] 998
Page 3
3. Develop the Report
. Based on completing the work plan above, we will issue a report to you
summarizing our observations and recommendations.
Timing
The work outlined above is expected to start at a mutually convenient date in September
and October of 1998 and will be completed by October 30, 1998. It is estimated that our
on site procedures will require approximately two to three weeks to complete.
Staffing
John Grondahl will be the professional responsible for conducting this engagement.
Mr. Grondahl is a senior manager with KPMG's Information Risk Management practice
and has over 16 years of computer audit experience, including 10 years in supervisory
. and managerial audit positions for Fortune 500 banking and manufacturing companies,
and has been responsible for analysis of Year 2000 projects at several KPMG clients.
As a partner of KPMG's Midwest Information Risk Management Practice, I will ensure
the adequacy of the scope and extent of our project procedures, and the appropriateness of
our recommendations based on the observations. Other senior KPMG professionals may
be consulted for this project as appropriate.
Estimated Fees and Expenses
We estimate the professional fees related to the work outlined above will not exceed
$15,000, unless there are agreed-upon changes in the scope of the work. It is our practice
to submit progress bills every two weeks. In addition, out-of-pocket expenses will be
billed at cost and we estimatc that such expenses will not exceed $300. Our professional
fees are calculated at rate of $] 60 per hour for 90 hours. It is an assumption that this
engagement will be completed with the SUPPOlt of the City of Hopkins personnel to assist
in the data collection efforts.
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KPMfl Peat Marwick Ll.P
. Ms. Lori Yager
August 17, 1998
Page 4
KPMG's maximum liability to the City of Hopkins arising for any reason relating to
services rendered under this letter shall be limited to the amount of fees paid for these
services. City of Hopkins will indemnify and hold harmless KPMG Peat Marwick LLP
and its personnel from any claim, liabilities, costs, and expenses resulting from our
services under this letter, except to the extent determined to have resulted from the
intentional or deliberate misconduct of KPMG personnel.
I will call you next week to disGUSS our proposaL In the meantime, please feel free to
contact me at 612-305-5480 or John Grondahl at 612-305-5314 should you have any
questions.
Very truly yours,
KP 10.1(; Peal Marwick LLP
. ~ ~
Scott Moser, Partner
Information Risk Management
cc: Steve Laible - KPMG
Jeff Norris - KPMG
Accepted on behalf of
CITY OF HOPKINS:
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