Loading...
HomeMy WebLinkAboutRES 95-190 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, 1995; 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 -day of :� , 1995. - Mayor - AUDITING SERVICES AGREEMENT This agreement made this day of August, 1995 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, 1995; 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, 1995. 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, 1995, in accordance with generally accepted auditing standards and the standards for financial audits contained in Government Auditina 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. 1 EXHIBIT "A" 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, contracts, and grants 2 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. 3 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 Exhibit "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 4 work to be performed on behalf of the City under this contract. 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. 5 IN WITNESS WHEREOF, the City and the Auditor have executed this agreement on the date and year first above-written. CITY OF BEAUMONT BY: Ray Riley City Manager COOK SHAVER PARKER & WILLIAMS BY: Ted Williams Principal 6 EXHIBIT "A" Deadlines. Final trial balances completed and ledgers closed 10/20/95 Completion of all support schedules, working trial balances, and supporting documentation requested as detailed in correspondence from auditors 11/17/95 Draft of pro forma CAFR including restatements, if necessary, of any prior year balances 12/01/95 Schedule of Federal Financial Assistance 12/15/95 Final draft of CAFR to auditor for review 12/29/95 Meet with Audit Committee for exit conference 01/08/96 Presentation by Auditor of CAFR to Council 01/16/96