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HomeMy WebLinkAbout2001 01 22 Consent B Audit Servces Contract , COMMISSION AGENDA ITEM B CONSENT X INFORMATIONAL PUBLIC HEARING REGULAR Meeting MGR~IDEPT ctJ--. Authorization January 22,2001 REQUEST: The Commission authorize the City Manager to execute a 3 year contract for Audit Services with the firm of McDirmit, Davis, Puckett & Company, P.A.. Contract fees for the base audit are $25,000, $22,000 and $22,700 for FY 2000, 2001 and 2002, respectively. Optional CAFR preparation fees are $3,000, $3,100 and $3,200, respectively. The Single Audit Fee, if applicable, is $3-4,000 per year. Assistance with the GASB 34 implementation will be at standard hourly rates, if necessary. PURPOSE: To authorize the City Manager to execute a contract for Audit Services. CONSIDERATIONS: . On December 11, 2000 the Commission authorized the formation of a 3 member Audit Selection Committee, authorized the City Manager to issue an RFP for Audit Services in compliance with the Competitive Auditor Selection Procedures set forth in the Florida Statutes Section 11.45(3)(a) 6 and 7 (Competitive Negotiations Act) and authorized the City Manager to negotiate a contract for Audit Services for review and approval by the Commission. . The 3 member Audit Selection Committee has performed the Auditor Selection Procedures set forth in the Florida Statutes and recommends the Number 1 ranked firm ofMcDirmit, Davis, Puckett & Company, P.A. as the City's Auditors. . The City Manager subsequently received and negotiated an acceptable fee proposal from the Number 1 ranked firm ofMcDirmit, Davis, Puckett & Company, P.A.. FUNDING: FY 2000 budgeted audit fees adequately cover the FY 2000 anticipated audit fee of$25,000 for the base audit and $3,000 for the CAFR preparation. In addition, FY 2000 budgeted audit fees will also cover the costs associated with the Single Audit if it is applicable. RECOMMENDATION: The City Manager recommends the City Commission authorize the City Manager to execute a 3 year contract with the firm ofMcDirmit, Davis, Puckett & Company, P.A.. ATTACHMENTS: . Written Fee Proposal as proposed and negotiated from the firm ofMcDirmit, Davis, Puckett & Company, P.A. . Written Proposal from the firm ofMcDirmit, Davis, Puckett & Company, P.A. COMMISSION ACTION: MCDIRMIT, DAVIS, PUCKETT & COMPANY, P.A. CERTIFIED PUBLIC ACCOUNTANTS AND qONSULT~NTS 605 E, Robinson Street, Suite 635 Post Office Box 1185 Orlando, Florida 32802-1185 Telephone: (407) 843-5406 Fax: (407) 649.9339 E-Mail: info@mdpcpa.com January 17, 2001 City of Winter Springs, Florida Fee Quote for Auditing Services . , :...... i ~, ..$ ~~('( Sr'.J q,~ -~. .:/ ", '/"1/-=> , Fiscal Year 1999-2000 2000-2001 2001-2002 Base Audit Fe~_ -.......... Optional CAFR Preparation 29;800(~"~~'-' ~~ 30 700 ~ ;h.~~ a ,)fV\~ ~ . ./ .'\:7':"Z:'t1tJ:3 ,~ ..> 31 '700::~ ~-';'-/..o-;;.' 6Ao~:: I .".J 1 ~_~ ...t-=>-- I The City may exercise an option to prepare its own CAFR in any year and eliminate the CAFR preparation fee. !n addition, if in any year, the city receives federal grant funds and is required to issue a single audit, the additional fee will be: Minor programs only Additional fee if one or more Major programs $3,000 -<- ) r"''-'? ~ '7 l ('J'" 1,000 $4.00Q Services outside the scope of the audit and inquiries that require significant research time will be charged on a per diem basis with the following hourly rates: Audit Stockholder Audit Manager Audit Senior Audit Staff $135 115 80 58 1'7'-<- rF J I" ('/ McDirmit, Davis, Puckett & Co., PA C~~,-.c,;ncCt~, Elden G. McDirmit,CPA ~ Members: Private Companies Practice Section' American Institute of Certified Public Accountants' Florida Institute of Certified Pu'blic AccountanlS REQUEST FOR PROPOSAL - RFP #003-01/LF - AUDITING SERVICES TO THE CITY OF WINTER SPRINGS, FLORIDA FOR THE FISCAL YEARS ENDING SEPTEMBER 30, 2000, 2001 and 2002 SUBMITTED JANUARY 5, 2001 McDIRMIT, DAVIS, PUCKETT & COMPANY, P. A. CERTIFIED PUBLIC ACCOUNTANTS 605 EAST ROBINSON STREET SUITE 635 ORLANDO, FLORIDA 32801 (407) 843-5406 CONTACT: ELDEN G. McDIRMIT, C.P.A. PROPOSAL TO PROVIDE AUDITING SERVICES TO THE CITY OF WINTER SPRINGS, FLORIDA TABLE OF CONTENTS .eage Letter of Transmittal 1-2 Audit Approach 3-4 Profile of the Firm 5-8 Resumes 9-12 Affidavit of Non-Collusion and of Non-interest of City Employees 15 Governmental References 13-14 Required Submittals: LETTER OF TRANSMITTAL 605 E. Robinson Street, Suite 635 Post Office Box 1185 Orlando, Florida 32802-1185 Telephone: (407) 843-5406 Fax: (407) 649-9339 E-Mail: info@mdpcpa.com " MCDIRMIT, DAVIS, PUCKETT & COMPANY, P.A. CERTIFIED PUBLIC ACCOUNTA!iJTS AND CO~SULTAN1S January 5, 2001 Audit Selection Committee City of Winter Springs Winter Springs, Florida Thank you for the opportunity to submit our qualifications and experience to serve as independent auditors of the City of Winter Springs, Florida. The accompanying proposal will provide you detailed information regarding the scope of services to be provided, as well as a profile of the firm, the individuals who will serve you, our qualifications and experience, and representative clients, including specific references. It is our understanding that we will provide the following services: 1. Financial audit as defined in Sec. 11.45(1)(b), Florida Statutes, of the general-purpose financial statements of the City of Winter Springs, Florida for the fiscal years ending September 30, 2000, 2001 and 2002. 2. The audit will be performed in accordance with generally accepted auditing standards, Governmental Auditing Standards (1994), the Rules of the Auditor General of the State of Florida, and regulations of State of Florida, Department of Banking and Finance. We believe we are the best-qualified firm to perform the engagement for the following reasons: o We presently audit eight municipalities and have an excellent working knowledge of local laws and requirements. o We have assisted four municipalities in receiving the GFOA "Certificate of Achievement for Excellence in Financial Reporting". Elden McDirmit is active as a national review team member of the GFOA's "Certificate of Achievement for Excellence in Financial Reporting" program. As a review team member, Mr. McDirmit reviews and evaluates financial reports submitted by cities and counties to determine whether the financial reports meet the stringent requirements to receive the GFOA'S prestigious award. Participating as a review team member, Mr. McDirmit has demonstrated his expertise in governmental accounting and auditing. ~ ~ Members: Private Companies Practice Section' American Institute of Certified Public Accountants' Florida Institute of Certified Public Accountants o We have recent and continuous experience, and have devoted a great deal of our continuing education to the governmental auditing and accounting field. Our firm meets the independence and education requirements of the Government Auditing Standards issued by the Comptroller General of the United States. o We have significant experience in municipalities issuing debt securities and the required disclosures and comfort letters issued to underwriters. o We have considerable experience in performing utility tax and franchise fee audits, as well as water and wastewater rate studies. o We believe in continuing client contact throughout the year, not just during the audit. We encourage on-going client contact by nut charging any fee for phone calls. o We are members of the American and Florida Institutes of Certified Public Accountants and an Associate member of the Governmental Finance Officers Association. Our firm is active in governmental organizations throughout Central Florida and serves on governmental committees of the Florida Institute of CPA's. o We are a local firm with personnel committed to quality and professional performance, accustomed to providing a high level of client satisfaction. We believe that our firm is part of a team effort to assist the City in developing the best financial reporting possible. o We have a history of continuity of personnel assigned to the engagement. Our single office firm and low personnel turnover assures uninterrupted services from our stockholders and staff. Because of our unique qualifications and a philosophy based on complete dedication to client service, we feel confident that we can provide you with responsiveness and a range of experience that will best serve your needs. Mr. Elden G. McDirmit, stockholder, is authorized to represent the firm and may be contacted at 605 East Robinson Street, Suite 635, Orlando, Florida 32801-2040, or phone (407) 843-5406. We would consider it a privilege to serve as independent auditors for the City of Winter Springs, Florida. Sincerely, McDIRMIT, DAVIS, PUCKETT & COMPANY, P.A. (S1;~,,- (,.. A" l)~ Elden G. McDirmit, C.P.A. 2 AUDIT APPROACH PROPOSAL TO PROVIDE AUDITING SERVICES TO THE CITY OF WINTER SPRINGS, FLORIDA AUDIT APPROACH We will perform audits of the general purpose financial statements of City of Winter Springs, Florida in accordance with: Generally accepted auditing standards Government Auditing Standards, issued by the Comptroller General of the United States (yellow book - 1994 revision) Rules of the Auditor General of the State of Florida AICPA Audit and Accounting Guide, Audits of State and Local GovernmentallJnits Florida Statutes, including Section 11.45 Regulations of the State Department of Banking and Finance Single Audit Act of 1984 The audit will be conducted at the combined statement level with an in-relation-to report on the combining and individual fund statements. Our audit will include tests of the accounting records and other procedures we consider necessary to enable us to express an unqualified opinion that the financial statements are fairly presented, in all material respects, in conformity with generally accepted accounting principles. If our opinion is other than unqualified, we will fully discuss the reasons with you in advance. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, creditors, and financial institutions. We will request written representations from your attorneys as part of the engagement. At the conclusion of our audit, we will also request certain written representations from you about the financial statements and related matters. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. Also, we will plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Our firm strives to be sensitive to the individual needs of each client and we realize that no two clients are the same. Therefore, before we begin our audit tests, we perform a comprehensive internal control study and evaluation to gain a good understanding of our clients unique system. We interview various employees as part of obtaining an understanding of the City's internal, control structure. Then we randomly select a sample of cash receipts and disbursements and perform tests to determine that the City's accounting system provides reasonable 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 general purpose financial statements in accordance with generally accepted accounting principles. We then tailor our audit program, based on our findings, from the test of controls. We usually perform this phase of the audit prior to year-end. 3 PROPOSAL TO PROVIDE AUDITING SERVICES TO THE CITY OF WINTER SPRINGS, FLORIDA AUDIT APPROACH - ContinlJp.d In conjunction with obtaining an understanding of the City's internal control structure, we will also determine laws and regulations that will be subject to testing. Because of our experience with other governmental entities, we have a working knowledge of Florida Statutes dealing with municipalities. For example, we will test for compliance with property tax millage setting procedures, competitive bidding and other purchasing requirements, City travel policies, and tangible personal property requirements. Our firm uses a nonstatistical approach to audit sampling. Some of our testing for compliance with laws and regulations will be performed at the same time as our testing of control procedures determined during our study of the City's internal control structure. Planning and evaluation of internal control are two important factors in conducting a successful audit engagement.. Analytical procedures will be used in the planning stage to identify audit areas for increased attention. Analytical procedures usually include comparisons of account balances between accounting periods as well as comparisons of budget and actual amounts. Also, ratio and trend analysis can help improve our understanding of the City's operations and may identify critical audit areas. Our audit plan will consist of various phases with specific objectives for each phase. A detailed audit program will be tailored for each objective. We would start performing these procedures as soon as the accounting department has closed the books for the year. Testing will be conducted at the combined financial statement level, with an "in-relation-to" report on the combining and individual fund statements and supplemental schedules based on the auditing procedures applied during the audit of the general purpose financial statements. After completion of all audit procedures, we will submit, a draft of the management letter, which shall identify weaknesses observed in the system of internal accounting controls, assess their effect on the system and propose steps to eliminate such weaknesses. A tentative schedule for performing the key phases of the audit is as follows: Planning, Tests of Controls and Legal Compliance Immediately after execution of contract Substantive Testing First 2 weeks of February Preparation of Financial Statements and/or Reports First week of March We agree to meet or exceed Performance Specifications listed in Section B of the Request for Proposal. We will provide technical assistance to help the City meet the requirements for the GFOA Certificate of Achievement for Excellence in Financial Reporting. The stockholder in charge of the audit and the audit manager will be available to attend public meetings for discussion of the financial report. 4 PROFILE OF THE FIRM [ PROPOSAL TO PROVIDE AUDITING SERVICES TO THE CITY OF WINTER SPRINGS, FLORIDA PROFII E OF THE FIRM ~ Description and History of Audit Firm McDirmit, Davis, Puckett & Company, P.A. was incorporated in the State of Florida in August 1984 and serves Central Florida from its centrally located office in Orlando, Florida. The stockholders have over 50 years of combined experience in public accounting, and our firm has grown to be ranked as one of the top 20 accounting firms in Central Florida by the Orlando Business Journal. Our firm now consists of the following staff: Stockholders 3 Managers 3 Staff Accountants/Paraprofessionals 6 Support Staff 2 14 We are members of the American and Florida Institutes of Certified Public Accountants and an associate member of the Governmental Finance Officers Association. Our firm has a wide range of clients providing both goods and services in the Central Florida area. Our practice encompasses auditing, accounting, management advisory and tax services. A list of all governmental clients audited by us for the fiscal years 1990-2000 is as follows: · City of Ocoee, Florida · City of Longwood, Florida · City of Lake Mary, Florida · City of Belle Isle, Florida · City of Mascotte, Florida · City of Tavares, Florida · Town of Windermere, Florida · City of Palm Coast, Florida · Sanford Airport Authority We have performed special audits of utility taxes and franchise fees for several of the above cities, as outlined on Governmental References on pages 13 and 14. We have also performed water and wastewater rate studies as detailed on Governmental References. We have prepared the Comprehensive Annual Financial Report for six of the above municipalities and assisted four of the municipalities in obtaining the Certificate of Achievement. 5 · These entities are presently clients of McDirmit, Davis, Puckett & Company, P.A. PROPOSAL TO PROVIDE AUDITING SERVICES TO THE CITY OF WINTER SPRINGS, FLORIDA PROFILE OF THE FIRM - Continued Experience The following supervisory people will work on the audit: Elden G. McDirmit, C.P.A., audit stockholder Kelly D. Leary, C.P.A., audit manager All of the above people have considerable experience on governmental audit engagements. Resumes detailing their experience follow on pages 9 through 12. The professional staff of our firm have been conducting governmental audits in the Central Florida area for the past twenty years. We are experienced auditors in a variety of industries and offer experience in auditing federal grants under the Single Audit Act and performing compliance audits of state grants. The professional staff of our firm also includes an EDP consultant, Charles Puckett. He has assisted clients for over twenty five years with computer hardware and software selection and installation. License to Practice in Florida Our firm and all professional staff are properly licensed to practice in the State of Florida. Also, the firm and all professional staff meet the independence and education requirements of the Government Auditing Standards issued by the Comptroller General of the United States. Quality Control Our firm has been a member of the Private Companies Practice Section of the American Institute of Certified Public Accountants since 1985. Member firms are required to adhere to quality control standards established by the AICPA Quality Control Standards Committee and to submit to peer reviews of the firm's accounting and audit practice. Peer reviews are intensive reviews of a firm's quality control system. Our firm has had five peer reviews performed by the American Institute of Certified Public Accountants. Each peer review has included a review of a local governmental entity. We received an unqualified opinion on each review which represents the best opinion that a firm can receive. We have ~ been subject to any litigation or disciplinary actions by a client, the State or any professional organization for substandard field work. A copy of our firm's most recent unqualified opinion follows this page. 6 ~~~B H k' ~liIkI er~an, op Ins ~~(i1 Wnght, Arnold CJII{;j) & LaHam LLP , James A. Wright, Jr, James S. LaHam CERTIFIED PUBLIC ACCOUNTANTS BUSINESS CONSULTANTS. PROFIT ADVISORS John R. Hopkins Ross A, Whitley Lewis H. Berman (retired) Emily E. Arnold (retired) August 28, 1998 To the Owners McDirmit, Davis, Lauteria, Puckett, Vogel & Co., P.A. We have reviewed the system of quality control for the accounting and auditing practice of McDirmit, Davis, Lauteria, Puckett, Vogel & Co., P.A. (the "firm") in effect for the year ended June 30, 1998. Our review was conducted in conformity with standards established by the Peer Review Board of the American Institute of Public Accountants (AICPA). We tested compliance with the firm's quality control policies and procedures to the extent we considered appropriate. These tests included a review of selected accounting and auditing engagements. In performing our review, we have given consideration to the quality control standards issued by the AICPA. These standards indicate that a firm's system of quality control should be appropriately comprehensive and suitably designed in relation to the firm's size, organizational structure, operating policies and the nature of its practice. They state that variance in individual performance can affect the degree of compliance with a firm's quality control system and, therefore, recognize that there may not be adherence to all policies and procedures in every case. In our opinion, the system of quality control for the accounting and auditing practice of McDirmit, Davis, Lauteria, Puckett, Vogel & Co" P.A. in effect for the year ended June 30, 1998, met the objectives of quality control standards established by the AICPA, and was being complied with during the year then ended to provide the firm with reasonable assurance of conforming with professional standards in the conduct of that practice. Berman) fl-opkinj) Wright) -Arnold & Jafl-am) c1c1P .4,>77;'\\ ~, .. ...~u 320 FORTENBERRY ROAD .:. MERRITT ISLAND, FL 32952.3621 .:. (407) 453-2020 <00 FAX # (407) 459.1026 307 EAST NEW HAVEN AVENUE, SUITE 1 .:. MELBOURNE, FL'32901.4576 -> (407) 727-2353'" FAX # (407) 676.3923 ~ I"Jtit..tr Or ProCitAd...i.or. PROPOSAL TO PROVIDE AUDITING SERVICES TO THE CITY OF WINTER SPRINGS, FLORIDA PROFII E OF THF FIRM - Continued Management Advisory Services Our experience in governmental auditing has led to the development of efficient procedures that provide various client benefits. Our services provide our clients with a wide range of knowledge, confidence, and helpful management advice. In addition, our firm is experienced with system analysis, both manual and automated. As a result of the size and variety of our clients, we are continually in contact with both manual and automated accounting systems. We have provided management advisory services to a number of our clients to their satisfaction. Our management advisory services have included the following: 1. Utility and franchise tax revenue audits. 2. Bond financing and comfort letters. 3. Water and wastewater rate studies. 4. Arbitrage calculations. 5. Assistance in selection, implementation and operation of computer systems. 6. Fixed asset accounting. 7. Consultation and analysis in valuation for sale or purchase of water and wastewater utilities. 8. Detailed internal control studies and evaluations of accounting systems. 9. Assistance in preparation of Comprehensive Annual Financial Reports for recognition by the Government Finance Officers Certificate of Achievement Program. 10. Office procedure and efficiency reviews. Continuing Education McDirmit, Davis, Puckett & Company, P.A. is committed to the personal and professional growth of its staff. Our firm requires an annual minimum of 40 hours of continuing professional education for each staff member. Our governmental audit staff complies with the continuing education requirements of the State of Florida and the U.S. General Accounting Office Guide, Governmental Auditing Standards (yellow book). As a result of our governmental experience, our staff has taught classes or lectured on various topics. We offer "in-house" education courses for our staff, which at times, our clients have attended. In addition, we would be happy to teach seminars for the benefit of the City's accounting staff. 8 RESUMES RESUME OF ELDEN G. McDIRMIT, C.P.A. AUDIT STOCKHOLDER Mr. McDirmit received his Bachelor of Science degree with a major in accounting from the University of Central Florida. During the last eighteen years, Mr. McDirmit has received 400 hours of formal training from the AICPA or AICPA-sponsored organizations in the governmental area. His experience has included planning, supervision, final review responsibilities and report preparation of various federal grant and governmental audit engagements. Mr. McDirmit is active as a national review team member for the GFOA's "Certificate of Achievement for Excellence in Financial Reporting" program. As a review team member, Mr. McDirmit reviews and evaluates financial reports submitted by cities and counties to determine whether the financial reports meet the stringent requirements to receive the GFOA's prestigious award. Participating as a review team member, Mr. McDirmit has demonstrated his expertise in governmental accounting and auditing. Mr. McDirmit has also received the American Institute of CPA's prestigious "Certificate of Educational Achievement". This program consists of attending 64 hours of classroom education related to governmental accounting and auditing and successfully passing 4 examinations. Mr. McDirmit is also qualified to perform quality reviews of other CPA firms in accordance with standards established by the American Institute of Certifie'd Public Accountants. Mr. McDirmit served for the past eight years as Chairman of the Orange County Housing Finance Authority (the Housing Authority) which has the authority to issue revenue bonds to address the housing needs of Orange, Seminole, Lake and Osceola counties. The Housing Authority has approximately $800 million in assets. Because of this involvement, Mr. McDirmit has an excellent understanding of local government operations and bond financing. Mr. McDirmit is a member of the American Institute of Certified Public Accountants and the Florida Institute of Certified Public Accountants, an associate member of the Governmental Finance Officers Association, and is active as a board member in other charitable and civic organizations. His specific government assignments have included: City of Ocoee, Florida City of Longwood, Florida City of Tavares, Florida City of Belle Isle, Florida City of Lake Mary, Florida City of Mascotte, Florida Town of Windermere, Florida City of Palm Coast, Florida City of Winter Park, Florida Federal Summer Food Program City of Orlando, Florida Community Development Block Grant Program Osceola County Housing Financing Authority 9 RESUME OF ELDEN G. McDIRMIT, C.P.A. AUDIT STOCKHOLDER - Continued In the past three years, Mr. McDirmit has attended the following governmental continuing professional education courses: Course Title Credit Hours Government Accounting & Auditing Update Governmental Accounting Principles & Financial Reporting Advanced Governmental Auditing Compliance Auditing GASB 34 Accounting Conference 8 16 16 4 8 In addition to the above specific governmental courses, he has attended courses sponsored by both the American and Florida Institutes of Certified Public Accountants relative to audit sampling, audit workpapers, review of auditing pronouncements, and various federal tax seminars. 10 RESUME OF KELLY D. LEARY, C.P.A. AUDIT MANAGER Ms. Leary received her Bachelor of Science degree with a major in accounting from the University of Hawaii. She has twenty years of experience in public accounting, primarily in auditing. Ms. Leary presently serves on the State and Local Government Committee for the Florida Institute of CPA's. As a committee member, Ms. Leary is chairman of the subcommittee that has revised Compliance Auditing in Florida, an FICPA Practice Aid. Ms. Leary is also qualified to perform quality reviews of other CPA firms in accordance with standards established by the American Institute of Certified Public Accountants and she has performed quality reviews of CPA firms performing governmental audits. Ms. Leary has been a speaker for the past few years at the FICPA State and Local Government Conference. Ms. Leary has also recently had several articles published in the Florida CPA Today relating to state and local governments, including an article on Single Audits in the May 1998 issue, and an article on pension plans in the July 1999 issue. Ms. Leary is also a director and treasurer on the Board of Directors of the Fairwinds Credit Union (formerly known as Navy Orlando Federal Credit Union), a nonprofit organization with over $600 million in assets. Ms. Leary's governmental background includes eight years of experience on the Brevard County, Florida audit. She managed the Brevard County audit for several years. She also worked on the audits of the following municipalities and governmental entities: City of Ocoee, Florida City of Longwood, Florida City of Tavares, Florida City of Lake Mary, Florida City of Belle Isle, Florida City of Mascotte, Florida Town of Windermere, Florida City of Palm Coast, Florida City of Melbourne, Florida City of Cocoa, Florida City of Indian Harbour Beach, Florida Town of Indialantic, Florida Ms. Leary has performed Single Audits for several of the governmental entities listed above. In addition, she has considerable experience auditing computer systems that use HTE software since several of the above municipalities use HTE. 11 RESUME OF KELLY D. LEARY, C.P.A. AUDIT MANAGER - Continued During the past three years, Ms. Leary has attended the following governmental continuing professional education courses: Course Title Credit Hours Intermediate Auditing of Federal, State and Local Compliance Requirements Governmental Accounting Principles & Financial Reporting Florida GFOA Annual Conference State & Local Government Accounting Conference 8 16 16 32 Because of her expertise, Ms. Leary has also taught several governmental courses on Single Audit, long-term debt, and arbitrage. In addition to the above specific governmental courses, she has attended courses sponsored by both the American and Florida Institute of Certified Public Accountants relative to workpaper preparation and review, accounting and auditing update, supervisory skills, and various federal tax seminars. 12 GOVERNMENTAL REFERENCES PROPOSAL TO PROVIDE AUDITING SERVICES TO THE CITY OF WINTER SPRINGS, FLORIDA GOVERNMENTAL RFFERENCES References of Governmental Accounting Experience: Principal Client Contact Audited: Ms. Wanda Horton, Fin. Dir. City of Ocoee, Florida 150 Lakeshore Drive Ocoee, FL 34761 Ms. Monica Mitchell, Fin. Dir. . City of Longwood, Florida 175 W. Warren Avenue Longwood, FL 32750 (407) 260-3475 Ms. Jackie Sova, Fin. Dir. City of Lake Mary, Florida 100 N. Country Club Road Lake Mary, FL 32749 (407) 324-3000 Ms. Janise Bennett City Clerk City of Mascotte, Florida 529 East Myers Boulevard Mascotte, FL 34753 (352) 429-3393 Scope of Work . Annual Financial & Compliance Audit (Single Audit) and preparation of CAFR . Received GFOA's "Certificate of Achievement" . Utility and Franchise Tax Audits Annual Financial & Compliance Audit . Received GFOA's "Certificate of Achievement" . Water & Wastewater Valuation Study . Annual Financial & Compliance Audit . Received GFOA's "Certificate of Achievement" . Annual Financial & Compliance Audit 13 Total Hours 500 200 Engagement Stockholder Years Elden G. McDirmit 1985 to Present Elden G. McDirmit 1991 to 1993 & 1997 to Present 230 Elden G. McDirmit 1997 to Present 200 Elden G. McDirmit 1999 to Present PROPOSAL TO PROVIDE AUDITING SERVICES TO THE CITY OF WINTER SPRINGS, FLORIDA GOVERNMENTAL REFERENCES References of Governmental Accounting Experience: Scope of Total Engagement Principal Client Contact Work Hours Stockholder Years Audited: Mr. Glenn Irby, Fin. Dir. . Annual Financial & 250 Elden G. McDirmit 1988 to City of Tavares, Florida Compliance Audit Present P.O. Box 1068 (Single Audit) and Tavares, FL 32778-1068 preparation of CAFR (904) 742-6220 . Received GFOA's "Certificate of Achievement" . Utility and Franchise Tax Audits . Water & Wastewater Rate Evaluation Ms. Be Bateman . Annual Financial & 100 Elden G. McDirmit 1993 to City of Belle Isle, Florida Compliance Audit Present 1600 Nela Avenue and preparation of Belle Isle, FL 32809 CAFR (407) 851-7730 . Monthly Compiled Financial Statements Oel Wingo, Ph.D. City of Palm Coast, Florida P.O. Box 354610 Palm Coast, FL 32135-4610 (904) 447-4255 . Annual Financial & Compliance Audit and preparation of CAFR 250 Elden G. McDirmit 2000 to Present Other Governmental References' Martha Haynie Orange County Comptroller 201 South Rosalind Avenue Orlando, Florida 32801 (407) 836-5690 14 REQUIRED SUBMITTALS AFFIDAVIT OF NON-COLLUSION AND OF NON-INTEREST OF CITY EMPLOYEES Description of Contract: AUDIT SERVICES FOR THE CITY OFWINTER SPRINGS, FLORIDA STATE: COUNTY OF: FLORIDA SEMINOLE McDirmit, Davis, Puckett & Company, P.A. Name of company responding Elden G. McDirmit Name of authorized individual signing being the first duly sworn, deposes and says that he/she is the respondent in the above proposal, that the only person or persons interested in said proposal are named therein; that no officer, employee or agent of the City of Winter Springs or of any other party is interested in said request for proposal; and that affiant makes the above proposal with no past or present collusion with any other person, firm or corporation. McDirmit, Davis, Puckett & Company, P.A. Company /"' \ C I" · \"1'" 9clc:L_ ,~ . (/1 C '- -' "- .:'\ \ Signature Sworn and subscribed before me this !5~ day of :r~NUAr-~ ' . .:Joo \ ,in the State of Florida, County of C\.- ~""'\~... 0,C',^ ~ '--0' ~~r", L", Notary Public My Commission Expires: ..:......5"'-~~~.,. ...;,~"..~(. .,~<........'...: .,,t ':' ."""~<.:i....."'I;"l. '. r;l.P\~l'~F I. HC:~.JU:R . . M:'Z~~:;~:~';:c;;;\i:"r/~~'~~';)2 t (!"p;-r..'t'.' ~ . . .. ....". . '.- , .. ....,;.:;.:'1..- : 15 .- ... MEMORANDUM TO: Mayor and Commission FROM: Mr. Anthony A. Garganese, City Attomey~. SUBJECT: Audit Engagement Letter DATE: January 22,2001 I have reviewed the attached audit engagement letter from McDirmit, Davis, Puckett & Company, P.A. and found it to be consistent with the provisions of Consent Agenda Item "B", and sufficient for Commission approval. ~~ Cc MCDIRMIT, DAVIS, PUCKETT & COMPANY, P.A. CERTlFIEQ PUBLIC ACCOUNTANTS AND ICONSULTANTS 605 E. Robinson Street, Suite 635 Post Office Box 1185 Orlando, Florida 32802-1185 Telephone: (407) 843-5406 Fax: (407) 649-9339 E-Mail: info@mdpcpa.com January 18, 2001 City of Winter Springs, Florida 1126 East State Road 434 Winter Springs, FL 32708-2799 We are pleased to confirm our understanding of the services we are to provide the City of Winter Springs, Florida for the years ended September 30, 2000, 2001 and 2002. We will audit the general purpose financial statements of the City of Winter Springs as of and for the years ended September 30,2000,2001 and 2002. Audit Objectives The objective of our audit is the expression of an opinion as to whether your general purpose financial statements are fairly presented, in all material respects, in conformity with generally accepted accounting principles. Our audit will be conducted 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, and will include tests of the accounting records of the City of Winter Springs and other procedures we consider necessary to enable us to express such an opinion. If our opinion on the general purpose financial statements is other than unqualified, we will fully discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to form or have not formed an opinion, we may decline to express an opinion or to issue a report as a result of this engagement. We will also provide reports (that do not include opinions) on internal control related to the financial statements and compliance with laws, regulations, and the provisions or grant agreements, noncompliance with which could have a material effect on the financial statements as required by Government Auditing Standards. Management Responsibilities Management is responsible for establishing and maintaining intemal control and for compliance with laws, regulations, contracts, and agreements. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of the controls. The objectives of internal control are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorizations and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. ~ Members: Private Companies Practice Section' American Institute of Certified Public Accountants' Florida Institule of Certified Public Accountants (~ :< City of Winter Springs Engagement Letter January 18, 2001 Page Two Management Responsibilities - (Continued) Management is responsible for making all financial records and related infonnation available to us. We understand that you will provide us with such infonnation required for our audit and that you are responsible for the accuracy and completeness of that infonnation. We will advise you about appropriate accounting principles and their application and will assist in the preparation of your financial statements, but the responsibility for the financial statements remains with you. That responsibility includes the establishment and maintenance of adequate records and effective internal control over financial reporting, the selection and application of accounting principles, and the safeguarding of assets. Management is responsible for adjusting the financial statements to correct material misstatements and for confinning to us in the representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the general purpose financial statements taken as a whole. Audit Procedures - General An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. We will plan and perfonn the audit to obtain reasonable rather than absolute assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud. Because an audit is designed to provide reasonable, but not absolute assurance and because we will not perfonn a detailed examination of all transactions, there is a risk that a material misstatement may exist and not be detected by us. In addition, an audit is not designed to detect immaterial errors, fraud or other illegal acts or illegal acts that do not have a direct effect on the general purpose financial statements. However, we will infonn you of any material errors and any fraud that comes to our attention. We will also inform you of any other illegal acts that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not extend to matters that might arise during any later periods for which we are not engaged as auditors. Our procedures will include tests of documentary evidence supporting the transactions recorded in' the accounts, and may include tests of the physical existence of inventories, and direct confinnation of receivables and certain other assets and liabilities by correspondence with selected individuals, creditors, and financial institutions. We will request written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will also require certain written representations from you about the financial statements and related matters. Identifying and ensuring that the City of Winter Springs complies with laws, regulations, contracts, and agreements is the responsibility of management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we will perfonn tests of the City of Winter Springs' compliance with applicable laws and regulations and the provisions of contracts and agreements. However, the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an opinion. 14 .. City of Winter Springs Engagement Letter January 18, 2001 Page Three Audit Procedures - Internal Controls In planning and performing our audit, we will consider the internal control sufficient to plan the audit in order to determine the nature, timing, and extent of our auditing procedures for the purpose of expressing our opinion on the City of Winter Springs' general purpose financial statements. We will obtain an understanding of the design of the relevant controls and whether they have been placed in operation, and we will assess control risk. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the general purpose financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the general purpose financial statements. (Tests of controls are required only if control risk is assessed below the maximum level.) Our tests, if performed, will be less in scope than would be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed. An audit is not designed to provide assurance on internal control or to identify reportable conditions. However, we will inform the governing body or audit committee of any matters involving internal control and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements. Audit Administration, Fees, and Other We understand that your employees will prepare all cash or other confirmations we request and will locate any invoices selected by us for testing. We expect to begin our audit on approximately February 1, 2001 and to issue our reports no later than March 20,2001. Our fees for the year ending September 30,2000,2001 and 2002 are as follows: Fiscal Year 1999-2000 2000-2001 2001-2002 Base Audit Fee $25,000 22,000 22,700 CAFR Preparation $3,000 3,100 3,200 '< City of Winter Springs Engagement Letter January 18, 2001 Page Four Audit Administration, Fees, and Other - (Continued) In addition, if the city receives federal or state grant funds subject to single audit requirements, the additional audit fee will be $3,000 if there are minor programs only or $4,000 if there is a major program. Due to the major impact that GASB 34 will have on municipal financial statements, it is understood that all services rendered by us to plan and implement this pronouncement will be additional fees. These additional services will be billed at the following hourly rates: Audit Stockholder Audit Manager Audit Senior Audit Staff $135 115 80 58 It is understood that if our audit manager, Kelly Leary, leaves the firm during the three year period, the City of Winter Springs may terminate this contract if they do not feel her replacement is qualified. We appreciate the opportunity to be of service to the City of Winter Springs and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. Very truly yours, McDirmit, Davis, Puckett & Company, P.A. (~Ocl~.__ C- . fJ1 c0~~ J C ('-A_ RESPONSE: This letter correctly sets forth the understanding of the City of Winter Springs. By: Title: Date: ,/" MCDIRMIT, DAVIS, PUCKETT & COMPANY, P.A. CERTifiED PUBLIC ACCOUNTANTS AND CONSULTANTS 605 E. Robinson Street, Suite 635 Post Office Box 1185 Orlando, Florida 32802-1185 Telephone: (407) 843-5406 Fax: (407) 649-9339 E-Mail: info@mdpcpa.com January 18, 2001 City of Winter Springs, Florida 1126 East State Road 434 Winter Springs, FL 32708-2799 We are pleased to confirm our understanding of the services we are to provide the City of Winter Springs, Florida for the years ended September 30, 2000, 2001 and 2002. We will audit the general purpose financial statements of the City of Winter Springs as of and for the years ended September 30, 2000, 2001 and 2002. Audit Objectives The objective of our audit is the expression of an opinion as to whether your general purpose financial statements are fairly presented, in all material respects, in conformity with generally accepted accounting principles. Our audit will be conducted 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, and will include tests of the accounting records of the City of Winter Springs and other procedures we consider necessary to enable us to express such an opinion. If our opinion on the general purpose financial statements is other than unqualified, we will fully discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to form or have not formed an opinion, we may decline to express an opinion or to issue a report as a result of this engagement. We will also provide reports (that do not include opinions) on internal control related to the financial statements and compliance with laws, regulations, and the provisions or grant agreements, noncompliance with which could have a material effect on the financial statements as required by Government Auditing Standards. Management Responsibilities Management is responsible for establishing and maintaining internal control and for compliance with laws, regulations, contracts, and agreements. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of the controls. The objectives of internal control are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorizations and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. ~ ~ Members: Private Companies Practice Section' American Institute of Certified Public Accountants. Florida Institute of Certified Public Accountants "--'---~-~.r"',,~r "'''"-:' .~_._~......,:: - City of Winter Springs Engagement Letter January 18, 2001 Page Two Management Responsibilities - (Continued) Management is responsible for making all financial records and related information available to us. We understand that you will provide us with such information required for our audit and that you are responsible for the accuracy and completeness of that information. We will advise you about appropriate accounting principles and their application and will assist in the preparation of your financial statements, but the responsibility for the financial statements remains with you. That responsibility includes the establishment and maintenance of adequate records and effective internal control over financial reporting, the selection and application of accounting principles, and the safeguarding of assets. Management is responsible for adjusting the financial statements to correct material misstatements and for confirming to us in the representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the general purpose financial statements taken as a whole. Audit Procedures - General An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. We will plan and perform the audit to obtain reasonable rather than absolute assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud. Because an audit is designed to provide reasonable, but not absolute assurance and because we will not perform a detailed examination of all transactions, there is a risk that a material misstatement may exist and not be detected by us. In addition, an audit is not designed to detect immaterial errors, fraud or other illegal acts or illegal acts that do not have a direct effect on the general purpose financial statements. However, we will inform you of any material errors and any fraud that comes to our attention. We will also inform you of any other illegal acts that corne to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not extend to matters that might arise during any later periods for which we are not engaged as auditors. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, creditors, and financial institutions. We will request written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will also require certain written representations from you about the financial statements and related matters. Identifying and ensuring that the City of Winter Springs complies with laws, regulations, contracts, and agreements is the responsibility of management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we will perform tests of the City of Winter Springs' compliance with applicable laws and regulations and the provisions of contracts and agreements. However, the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an opinion. City of Winter Springs Engagement Letter January 18, 2001 Page Three Audit Procedures - Internal Controls In planning and performing our audit, we will consider the internal control sufficient to plan the audit in order to determine the nature, timing, and extent of our auditing procedures for the purpose of expressing our opinion on the City of Winter Springs' general purpose financial statements. We will obtain an understanding of the design of the relevant controls and whether they have been placed in operation, and we will assess control risk. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the general purpose financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the general purpose financial statements. (Tests of controls are required only if control risk is assessed below the maximum level.) Our tests, if performed, will be less in scope than would be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed. An audit is not designed to provide assurance on internal control or to identify reportable conditions. However, we will inform the governing body or audit committee of any matters involving internal control and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements. Audit Administration, Fees, and Other We understand that your employees will prepare all cash or other confirmations we request and will locate any invoices selected by us for testing. We expect to begin our audit on approximately February 1, 2001 and to issue our reports no later than March 20, 2001. Our fees for the year ending September 30, 2000, 2001 and 2002 are as follows: Fiscal Year 1999-2000 2000-2001 2001-2002 Base Audit Fee $25,000 22,000 22,700 CAFR Preparation $3,000 3,100 3,200 ---:_~,;--'I";:,:,.,,--------" City of Winter Springs EngagenlentLetter January 18, 2001 Page Four Audit Administration, Fees, and Other - (Continued) In addition, if the city receives federal or state grant funds subject to single audit requirements, the additional audit fee will be $3,000 if there are minor programs only or $4,000 if there is a major program. Due to the major impact that GASB 34 will have on municipal financial statements, it is understood that all services rendered by us to plan and implement this pronouncement will be additional fees. These additional services will be billed at the following hourly rates: Audit Stockholder Audit Manager Audit Senior Audit Staff $135 115 80 58 It is understood that if our audit manager, Kelly Leary, leaves the firm during the three year period, the City of Winter Springs may terminate this contract if they do not feel her replacement is qualified. We appreciate the opportunity to be of service to the City of Winter Springs and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. Very truly yours, McDirmit, Davis, Puckett & Company, P.A. (j)ct-~_~ C- . )11 c()~ (' (-A J RESPONSE: This letter correctly sets forth the understanding of the City of Winter Springs. By: ;?~/u ~ -? Title: r~~ Date: 1- 02. I) - - 6/ MEMORANDUM TO: Mayor and Commission Mr. Anthony A Garganese, City Attomey~ Audit Engagement Letter FROM: SUBJECT: DATE: January 22, 2001 I have reviewed the attached audit engagement letter from McDirmit, Davis, Puckett & Company, P.A. and found it to be consistent with the provisions of Consent Agenda Item "B", and sufficient for Commission approval.