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Res 153-88 7/19/1988REBOLU[lON NO. RESOLUTION PROVIDlNG FOR THE ANNUAL AUDIT FOR FISCAL YEARS ENDING 9-30-8c, 9-30-9@ AND AND AUTHOPIZING THE CITY MANAGER TO EXECUTE WIl|{ MATHIS, WEST AND HUFFINESE',. BE lT RESOLVED BY THE (7TTY COUNCIL OF THE f--TTY OF WTCH7TA FALL5~ TEXAS. THAT: That certain contract. a copv of which is attached hereto, between the City of iJichita Falls and Mathis, West and Huffines, for the indeoenuient audif of the City of Wichita Falls for a three—year period, is hereby approxed, and the Citv Manager is authcrize to e*ecute the samp for the City of Wichita Falls. PASSED AND APPROVED pth dav of July, l988, ATTEST: CITY CLERK CONTRACT I. NAME OF CONTRACTING PARTIES Page 1 This Contract is entered into oni _ /i•,- / ll > between the City of Wichita Falls, State of Texas, here ter called the City and Mathis, West, Huffines & Co., P.C., hereafter called the Auditor. The City as referred to in this Contract shall mean the City Council or its designee. The parties hereto agree as follows: II. NAMED INDIVIDUALS A. Assignment of Named Individuals The Auditor shall assign each year before work is to be started the following in charge and senior level individuals to the pro- ject described in this Contract. Resumes of these individuals are attached. B. Changes in Staff The Auditor agrees that if additional in charge and senior level personnel are to be used in performing the Contract that the Auditor will provide the City with their resumes and that if any of those persons are replacements of persons initially assigned that they will have qualifications equal to or exceeding those originally assigned. III. SCOPE OF WORK A. Audit Scope The examination shall be made of all funds and account groups of the City of Wichita Falls, Texas which the City has direct or maintenance responsibility including the appropriate GASB statements and interpretations as applicable. B. Audit Survey Prior to performing the audit, the Auditor will survey the City's accounting system to facilitate preparing a detailed audit program. C. Audit Standards and procedures The examination shall be made in accordance with generally accepted auditing standards (GARS) as prescribed by the American Institute of Certified Public Accountants (AICPA), the Governmental Account- ing Standard Board (GASB), the General Accounting Office (GAO), and the provisions of OMB Circulars A -102 and A -128. Page 2 Statements of Auditing Standards (SAS) shall be adhered to by the Auditor at all times during the term of this Contract. Prior to commencing the audit field work, the Auditor will meet with the City Manager to discuss any areas or issues that the City Manager desires the Auditor to be aware of. D. Auditing Procedures The examination shall be made in accordance with generally accepted auditing procedures as prescribed by Governmental Accounting Stand- ards Board (GASB) and by the American Institute of Certified Public Accountants (AICPA) and statements of auditing standards shall be adhered to and performed accordingly by the Auditor at all times during the term of this Contract. E. Statements and Records To Be Provided by Local Government Staff 1. The City staff and related departments shall have closed and balanced all accounts by fund for all funds to be examined by the Auditor by November 25 of each year. 2. A trial balance at the individual fund level will be de- livered to the Auditor on or before November 25 of each year. The Auditor shall use these trial balances as a basis for their preparation of the financial reports and supporting schedules. Merging and grouping entries will be prepared by the Auditor in the report preparation. F. Certificate of Achievement The Auditor's staff shall develop and prepare the additional finan- cial and statistical information, not subject to examination by the Auditor, but necessary to substantially conform to the principles and standards of public financial reporting prescribed by GASB. The Auditor shall prepare the financial report each year in a manner that will enable the City to seek the Certificate of Achievement for Excellence in Financial'Reporting. G. Management Letter The Auditor shall observe the adequacy of the system of internal con- trol. If weaknesses are noted, appropriate recommendations should first be reviewed with the appropriate public official and then in- cluded in a separate management letter issued to the City Manager and City Council. H. Disclosure of Irregularities The City authorizes the Auditor to disclose immediately all findings of suspected fraud or embezzlement to the City Council or appropriate law enforcement agency. Page 3 I. Unqualified Opinion The Auditor shall express an unqualified opinion on the financial statements of all funds and account groups. If unable to express an unqualified opinion, the Auditor should state the reasons for qualification, disclaimer, or adverse opinion. J. Audit Report The Auditor shall provide 150 copies of the Comprehensive Annual Financial Report and 30 each of all other reports which should be printed on regular letter -size (8 1/2" x 1111) paper, using both sides of the paper whenever possible. Fold out sheets will not be acceptable nor will split sheets be acceptable. Report covers for the Comprehensive Annual Financial Report will be provided by the City, all other report covers will be provided by the Auditor at his cost. The City will pay for printing work on the financial pages of the report. Page appearance, font style, and report layouts will be selected by the City. The report shall be made to the Mayor and City Council by sending copies to them at City Hall. The print ready draft copy of the report shall be delivered no later than January 15 of each year. IV. WORK SCHEDULE The Auditor shall conduct an examination of the records, accounts, and procedures of the City for the fiscal periods ending in 1989, 1990, and 1991. The Auditor will meet with the City as requested or as needed to keep the City informed as to audit progress and procedures performed. V. COMPENSATION AND TERMS OF CONTRACT A. The total payment to the Auditor for audit services to be rendered under this Contract shall not exceed $162,000 for the period with maximum annual payments as follows: Fiscal Comprehensive Single UMTA Year City Audit Audit Sec. 15 Total 1989 41,500 12,500 Included in 54,000 1990 41,500 12,500 Single Audit 54,000 1991 417500 12,500 Fee 54,000 Total 124,500 37,500 N.A. 162,000 B. Periodic billings shall be submitted as work progresses, but not more often than monthly. The Auditor shall submit hours worked by staff level, i.e.: partner, senior, junior, etc. and hours by categorical summary, i.e.: planning audit, evaluation of internal control, using the reporting format provided by the City. C. City participation in delivery of rep, hourly rate (based in Section V. The if the draft ready City by January 15 Page 4 beyond those addressed in Section VI and delay Drt will result in reduction in billings at upon cumulative hours) billed for fiscal year City reserves the right to withhold payments copy of the report has not been delivered to the of each year. D. It is anticipated that other accounting or consulting services may be requested by the City Council during the term of this Contract. Such services, if needed, are not within the scope of this Con- tract and are not within the compensation outlined in V A above. E. The Auditor has been informed that substantial changes to the City's accounting system could be implemented during the term of this Contract. Should such changes require a significant change in the number of man hours required to perform the annual audit, the Contract fee may be renegotiated by the Auditor or by the City. VI. LIMIT OF SERVICE FURNISHED TO THE AUDITOR The City's Department of Accounting /Finance will address questions pertaining to accounting procedures as addressed through the Director of Finance. The City's assistance shall be limited to providing location and filing sequence of information for all permanent records for audit sampling and replacement of records by the Auditor. All computer printed information will be made available for use by the Auditor. The City staff will pro- vide account analysis from the existing transaction history files for any and all accounts selected for inquiry by the Auditor in the form of com- puter printout analysis. The City staff is not obligated to prepare audit" workpapers or obligated to perform audit assistance beyond what is outlined herein. The City Clerk shall keep on file, properly indexed for ready reference, all ordinance records, minutes records, contracts, leases and agreements. Records of this type will be available through that office. The City Attorney's staff will be available to provide legal counsel per- tinent to the annual audit. A separate work space for three -five people will be made available for the Auditor in close proximity to accounting records. Additional space can be provided as needed. VII. TERMINATION OF THE CONTRACT A. For Cause If through any cause, the Auditor shall fail to fulfill in timely and proper manner the obligations under this Contract, the City shall have the right to terminate this Contract by specifying the date of termination in written notice to the Auditor at least 30 J Page 5 working days before the termination date or at City's option adjust billings as discussed in Section V.C. In this event, the Auditor shall be entitled to just and equitable compensation for any sat- isfactory work completed. B. Termination by Either Party This Contract may be terminated by either party by giving written notice to the other party no later than 30 working days before the termination date. In this event, the Auditor shall be entitled to just and equitable compensation for any satisfactory work completed. CONFLICT OF INTEREST No elected official or employee of the City who exercises any responsi- bilities in the review, approval, or carrying out of this Contract shall participate in any decision relating to this Contract which affects his or her direct or indirect personal or financial interest. VIII. COMPLETENESS OF THE CONTRACT This document contains all terms and conditions of this Contract, and any alteration shall be invalid unless made in writing, signed by both parties, and incorporated as an amendment to this Contract. There are no understandings, representations, or agreements, written or oral, other than those incorporated herein. IN WITNESS WHEREOF, the parties have signed this Contract as of the day and year first above written and agree to its terms. By: Title City of Wichita Falls Mayor City Manager ATTEST: