HomeMy WebLinkAboutRES 94-188 RESOLUTION NO.
BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF BEAUMONT:
THAT the firm of Cook Shaver Parker & Williams, PC, CPA's, be and they are
hereby, designated as independent auditors for the City of Beaumont for the fiscal
period ending September 30, 1994; and,
BE IT FURTHER RESOLVED that the City Manager is hereby authorized to enter
into a contract with Cook Shaver Parker & Williams, PC, CPA's. The contract is
substantially in the form attached hereto as Exhibit "A".
PASSED BY THE CITY COUNCIL of the City of Beaumont this the
6*1 day of _ , 1994.
- Mayor -
Pro—'Tefn
AUDITING SERVICES AGREEMENT
This agreement made this day of August, 1994 by and between the City of
Beaumont, a municipal corporation of the County of Jefferson, State of Texas, hereinafter
called ("City"), and Cook, Shaver, Parker & Williams, PC, CPA's, a partnership doing
business in the State of Texas, hereinafter called ("Auditor").
WHEREAS, the Firm of Cook Shaver Parker & Williams, PC, CPA's, has been duly
selected by the City as the Auditor to provide auditing services to the City of Beaumont for
the fiscal year ending September 30, 1994; and,
WHEREAS, it is agreed that Auditor will provide audits in accordance with generally
accepted auditing standards that result in opinions on the various financial statements of the
City of Beaumont;
NOW, THEREFORE, for and in consideration of the mutual covenants, promises and
agreements contained herein, Auditor and City do hereby covenant and agree as follows:
1. It is agreed that the Auditor will conduct an examination of the financial statements
containing all funds and account groups maintained by the City for its fiscal year
ending September 30, 1994. The combined financial statements prepared by the
City will be in accordance with pronouncements of the Government Accounting
Standards Board and also in compliance with the Single Audit Act of 1984, Public
Law 98-502, as implemented by the United States Office of Management and Budget,
Circular A-128, Audits of State and Local Governments.
2. The Auditor will audit the City's financial statements as of and for the year ended
September 30, 1994, in accordance with generally accepted auditing standards and
the standards for financial audits contained in Government Auditing Standards issued
by the Comptroller General of the United States. The objective of an audit is the
expression of the Auditor's opinion concerning whether the financial statements
present fairly,in all material respects, the financial position, results of operations, and
changes in financial position of the City in conformity with generally accepted
accounting principles.
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As a part of the Auditor's audit, they will consider the City's internal control structure
and assess control risk, as required by generally accepted auditing standards, for the
purpose of establishing a basis for determining the nature, timing, and extent of
auditing procedures necessary for expressing the Auditor's opinion concerning the
financial statements and not to provide assurance on the internal control structure.
The management of City is responsible for establishing and maintaining an internal
control structure. In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs for
internal control structure policies and procedures. The objectives of an internal
control structure are to provide management with reasonable, but not absolute,
assurance that assets are safeguarded against loss from -unauthorized use or
disposition, and that transactions are executed in accordance with management's
authorization and recorded properly to permit the preparation of financial statements
in accordance with generally accepted accounting principles. Because of inherent
limitations in any internal control structure, errors or irregularities may nevertheless
occur and not be detected. Also, projection of any evaluation of the structure to
future periods is subject to the risk that procedures may become inadequate because
of changes in conditions or that the effectiveness of the design and operation of
policies and procedures may deteriorate.
The Auditor will prepare a separate written report on their understanding of the
City's internal control structure and the assessment of control risk made as part of
the financial statement audit. The Auditor's report will include: (1) the scope of their
work in obtaining an understanding of the internal control structure and in assessing
the control risk, (2) the City's significant internal controls or control structure
including the controls established to ensure compliance with laws and regulations that
have a material impact on the financial statements, and (3) the reportable
conditions, including the identification of material weaknesses, identified as a result
of their work in understanding and assessing the control risk.
The audit will include procedures designed to provide reasonable assurance of
detecting errors and irregularities that are material to the financial statements. The
City is aware, however, there are inherent limitations in the auditing process. For
example, audits are based on the concept of selective testing of the data being
examined and are, therefore, subject to the limitation that such matters, if they exist,
may not be detected. Also, because of the characteristics of irregularities, including
attempts at concealment through collusion and forgery, a properly designed and
executed audit may not detect a material irregularity.
Similarly, in performing the audit, the Auditor will be aware of the possibility that
illegal acts may have occurred. However, it should be recognized that the audit
provides no assurance that illegal acts generally will be detected, and only reasonable
assurance that illegal acts having a direct and material effect on the determination
of financial statement amounts will be detected. Compliance with laws, regulations,
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contracts, and grants applicable to the City is the responsibility of City's management.
As part of obtaining reasonable assurance about whether the financial statements are
free of material misstatement, the Auditor will perform tests of the City's compliance
with certain provisions of laws, regulations, contracts and grants. However, the
Auditor's objective is not to provide an opinion on overall compliance with such
provisions.
The Auditor will prepare a separate written report on their tests of compliance with
applicable laws and regulations. This report will contain a statement of positive
assurance on those items which were tested for compliance, negative assurance on
those items not tested, and a description of all material instances of noncompliance.
At the conclusion of the engagement, the City's management will provide to the
Auditor a representation letter that, among other things,will confirm management's
responsibility for the preparation of the financial statements in conformity with
generally accepted accounting principles, the availability of financial records and
related data, the completeness and availability of all minutes of the City Council and
committee meetings, and the absence of irregularities involving management or those
employees who have significant roles in the control structure. Additionally, the
City's management will request that the City's attorney provide the auditors, prior to
issuance of any audit opinions, in written form, a detail of all significant claims,
including known contingencies, against the City.
The Auditor understands that their reports on the internal control structure as part
of the financial audit and on compliance with laws and regulations are intended for
the information of the audit committee, management and others within the
organization and City Council. This restriction is not intended to limit the
distribution of this report, which is a matter of public record.
3. The Auditor agrees to select the necessary procedures to test the City's compliance
with laws and regulations related to Federal financial assistance programs.
Additionally, the Auditor agrees to perform a study and evaluation of the City's
internal accounting and administrative controls used in administering Federal financial
assistance programs. The Auditor will prepare reports expressing an opinion on the
City's compliance with laws and regulations related to Federal financial assistance
programs and the City's internal accounting and administrative controls used in
administering Federal financial assistance programs. The Auditor will also be
available to meet with the City's Federal cognizant audit agency.
4. The Auditor agrees to maintain a dialogue with the management of the City in order
to provide business advice and solutions to problems as reasonably requested by the
City in connection with the audit.
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5. The City agrees to make available its internal auditor to assist in the annual audit.
Time requirements will be agreed with the Internal Auditor, but will be at least 500
man hours per year.
6. In consideration of the services to be performed by the Auditor, the City agrees to
compensate the Auditor for the services rendered based upon a fee computed at
85% of the Auditors standard rates for the time incurred, plus out-of-pocket
expenses, for an amount not to exceed $104,000.00,with, the following exception: In
the event that the deadlines set for the City are not met, as outlined in Fxhibit "A"
(attached), and/or appropriate assistance is not provided by the City, the additional
time required by the Auditor to complete the services agreed to herein would be
charged at the rates for additional services set forth below. The City and the
Auditor will negotiate in good faith whether the deadlines and assistance have been
meet and provided. Such assistance includes responding promptly to structured
requests for information, answering questions, providing detailed supporting
schedules that agree to the general ledgers, accurate account reconciliations,
individual and combined trial balances by fund or account group, posting all adjusting
entries to the trial balances, drafting the Comprehensive Annual Financial Report
and drafting the Federal financial assistance program reports and required schedules.
The rates for additional services, if any, requested by the City will be as follows:
a) Partner $115
b) Manager 70
c) Staff accountants 50
d) Administrative staff 30
7. The Auditor agrees to provide two hundred (200) copies of its opinions on its
letterhead to the City to be included as part of the financial statements of the City.
8. Upon written request of the Auditor, the City shall grant time extensions: a) to the
extent of any delays caused by the City or other agencies with whom the work must
be coordinated and over whom the Auditor has no control (but only to the extent
that the exercise of due diligence and care on the part of the Auditor within the
scope of its work under this contract could not have avoided such delays), and b) to
the extent of any delay caused by an act of God or any other occurrence whatsoever
which is beyond the control of the parties hereto.
9. The Auditor is to maintain professional liability insurance coverage in connection with
the work to be performed on behalf of the City under this contract.
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10. Should the City at any time decide that the Auditor's performance under this
agreement is not in accordance with the terms and conditions thereof, the City may
terminate this agreement by giving the Auditor thirty (30) days written notice of said
termination. The City shall be the sole judge as to whether the performance of the
Auditor is in accordance with the terms and conditions of this Agreement. The
Auditor will be compensated for work performed to date of termination.
11. The Auditor may terminate this agreement by giving the City thirty (30) days written
notice of said termination. The Auditor must provide to the City Council of the City
of Beaumont probable justification for the termination of this agreement. The
Auditor will be sole judge as to the probable justification for the termination of this
agreement. The Auditor will be compensated for work performed to date of
termination.
12. Any notices to be given hereunder by either party to the other may be effected by
personal delivery in writing or by registered or certified mail, postage prepaid with
return receipt requested. Mail notices shall be addressed to the addresses of the
parties as follows:
City Manager
City of Beaumont
P.O. Box 3827
Beaumont, Texas 77704
Cook Shaver Parker & Williams, PC
Ted Williams, Partner
3560 Delaware, Suite 202
P.O. Box 7343
Beaumont, Texas 77726
13. The failure of the City to insist upon the performance of any term or provision of this
agreement or to exercise any right herein conferred shall not be construed as a
waiver or relinquishment to any extent of the City's right to assert or rely upon any
such term or right on any future occasion.
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IN WITNESS WHEREOF, the City and the Auditor have executed this agreement on the
date and year first above-written.
CITY OF BEAL)MONT
BY:
Ray 4y
City fyipnager
COOK SHAVER PARKER & WILLIAMS
BY:
Ted Williams
Partner
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EXHIBIT "N'
Deadlines
Final trial balances completed and ledgers closed 10/24/94
Completion of all support schedules, working trial
balances, and supporting documentation requested
as detailed in correspondence from auditors 11/28/94
Draft of pro forma CAFR including restatements,
if necessary, of any prior year balances 12/05/94
Schedule of Federal Financial Assistance 12/23/94
Final draft of CAFR to auditor for review 01/09/95
Meet with Audit Committee for exit conference 01/16/95
Presentation by Auditor of CAFR to Council 01/24/95