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Res 090-2002 8/20/2002RESOLUTION NO. GO- dcf`c)_)_ RESOLUTION AUTHORIZING THE CITY MANAGER TO EXTEND THE CONTRACT FOR INDEPENDENT FINANCIAL AUDITING SERVICES WITH MATHIS, WEST, HUFFINES, & COMPANY FOR TWO ADDITIONAL YEARS; FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS RESOLUTION WAS PASSED WAS OPEN TO THE PUBLIC AS REQUIRED BY LAW. WHEREAS, the City entered into a four year contract in September 1998 with Mathis, West, Huffiness, & Company, P.C., for independent financial auditing services; and WHEREAS, the City desires to extend this contract for an additional two -year term under the same terms and conditions; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS, THAT: SECTION 1. A contract extension of two fiscal years for independent financial auditing services with Mathis, West, Huffiness, & Company, P.C., a copy of which is attached hereto and made a part of this resolution, is hereby approved. SECTION 2. It is hereby officially found and determined that the meeting at which this resolution was passed was open to the public as required by law. PASSED AND APPROVED this the 20th day of August 2002. ATTEST: CAW City Clerk �� U1 . L" — MAYOR Pro Tem CONTRACT EXTENSION NAME OF CONTRACTING PARTIES This contract is entered into on , between the City of Wichita Falls, Texas, hereafter 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 to the project each year before work is to be started the individuals in- charge and senior level auditors. Once these individuals are assigned to the project, resumes of those individuals shall be submitted to the City. 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 audit 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. The Auditor shall express an opinion of the fair presentation of the City's general purpose financial statements in conformity with generally accepted accounting principles. The Auditor is not required to audit the combining and individual fund and account group financial statements and supporting schedules. However, the Auditor is to provide an "in- relation -to" report on the combining and individual fund financial statements and supporting schedules based upon the auditing procedures applied during the audit of the general purpose financial statements. The Auditor is not required to audit the statistical section of the report. The Auditor shall be responsible for performing certain limited procedures involving required supplementary information required by the Governmental Accounting Standards Board as mandated by generally accepted auditing standards. The Auditor is not required to audit the schedule of federal financial assistance. However, the Auditor is to provide an "in- relation -to" report on that schedule based on the auditing procedures applied during the audit of the general purpose financial statements. 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 audit shall be made in accordance with generally accepted auditing standards (GARS) as prescribed by the American Institute of Certified Public Accountants (AICPA), the standards for audits set forth in the U.S. General Accounting Office's Government Auditing Standards, the Governmental Accounting Standards Board (GASB), and in accordance with the Single Audit Act Amendments of 1996, and the provisions of OMB Circular A -133. D. 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 December 15th of each year. 2. A trial balance at the individual fund level, general ledger, subsidiary ledgers, payroll registers, and bank reconciliations will be delivered to the Auditor on or before December 15th of each year. The Auditor shall use these reports 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. 3. A fixed asset report will be delivered to the Auditor on or before January 15th of each year. E. Certificate of Achievement The Auditor's staff shall develop and prepare the additional financial 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. The Auditor shall provide assistance to the City in meeting the requirements of that program. F. Management Letter The Auditor shall observe the adequacy of the system of internal control. If weaknesses are noted, appropriate recommendations should first be reviewed with the appropriate public official and then included in a separate management letter issued to the City Manager and City Council. G. 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. H. 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. Audit Report The Auditor shall provide 2 print -ready copies of the Comprehensive Annual Financial Report and 30 copies of all other reports which should be printed on regular letter -size (8 -1/2" x 11 ") 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 perform or pay for printing the financial pages of the report. Page appearance, font style, and report layouts will be selected by the City. The print -ready copies of the Comprehensive Annual Financial Report and all other reports shall be delivered no later than March 20th of each year. IV. WORK SCHEDULE The Auditor shall conduct an audit of the records, accounts, and procedures of the City for the fiscal periods ending in 2002 and 2003. 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 $59,225 for 2002. Total payment for 2003 shall not exceed $59,225 unless sufficient justification for the increase, satisfactory to the City, is provided to the City by the Auditor by no later than May 31, 2003. 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.: shareholder, senior, junior, etc. and hours by categorical summary, i.e.: planning audit, evaluation of internal control, etc., using the reporting format provided by the City. C. City participation beyond those addressed in Section VI and delay in delivery of report will result in reduction in billings at hourly rate (based upon cumulative hours) billed for fiscal year in Section V. The City reserves the right to withhold payments if the draft ready copy of the report has not been delivered to the City by March 20th 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 contract and are not within the compensation outlined in V.A. above. E. Major revisions to the City's accounting system or other events that would change the scope could occur 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. F. Workpapers prepared by Mathis, West, Huffines & Co., P.C. during the audit will be the sole property of Mathis, West, Huffines & Co., P.C. However, the Auditor will furnish the City with copies of selected workpapers, as requested by the City. Furthermore, the workpapers will be made available for review upon the request of the City's cognizant agency, the Regional Office of Inspector General, and other appropriate governmental agencies, or when legal proceedings order their release. These workpapers shall be retained by Mathis, West, Huffines & Co., P.C. for a period of not less than three years. 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 and /or his designated representative. 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 provide account analysis from the existing transaction history files for any and all accounts selected for inquiry by the Auditor in the form of computer 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 ordinances, resolutions, minutes of Council meetings, 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 pertinent to the annual audit. A separate work space for three to five people will be made available for the Auditor in close proximity to the accounting records. Additional space will be provided as needed. VII. TERMINATION OF THE CONTRACT A. For Cause If through any cause, the Auditor shall fail to fulfill in a 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 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 satisfactory 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. VIII. CONFLICT OF INTEREST No elected official or employee of the City who exercises any responsibilities 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. IX. CONTRACT AND OTHER INCORPORATED DOCUMENTS 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. The following documents listed in order of precedence, are incorporated by reference as forming an integral part of this agreement. They represent the basis for all mutual understandings and communications between the Auditor and the City. In the event terms and conditions of two or more documents conflict, the terms of the documents having higher precedence will control. 1. This contract 2. Engagement letter 3. Auditor's response to the City's RRP 4. City's RFP IN WITNESS WHEREOF, the parties have signed this contract as of the day and year first above written and agree to its terms. CITY OF WICHITA FALLS By: , Mayor By: , City Manager MATHIS, WEST, HUFFINES & CO., P.C. By: Title: ATTEST: Title: