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HomeMy WebLinkAbout Auditors-Coopers and Lybrand 1990C(� QQ certified public accountants 501 North Orange Avenue i in principal areas of the world oo G r5 Orlando, Florida 32801.1397 &Ly rand � � telephone (407) 843.1190 t ► �, i MAR 23 1590 CITY of WIN I LN SPRINGS D47 �=.. MANAGER March 23, 1990 D47 rIA) Mr. Richard Rozansky City Manager City of Winter Springs, Florida 1126 East State Road 434 Winter Springs, Florida 32708 Dear Mr. Rozansky: Enclosed is our standard engagement letter relating to the audit of the City of Winter Springs for the year ended September 30, 1990. As we discussed in our meeting with you and Mr. Martin, we are proposing a fee cap of $26,000. We realize that this represents an increase over your previous fee of $20,000. However., we believe that this increase is justified based on the following: The City is undergoing growth, as indicated in your 1990 budget compared to your 1989 budget. We estimate that this will account for. approximately $1,500 of our proposed increase. The City is in the process of acquiring a utility system. The auditing procedures required to ensure that the acquisition of this system and any related debt are properly accounted for and the impact of auditing its operating results we estimate will cost approximately $2,500. The Governmental Accounting Standards Board has imposed a new requirement relating to the presentation of a cash flow statement. This will require additional analysis of financial data not necessary in previous years. We have already implemented this on some of our existing clients, and we estimate that the cost to comply with this requirement for the City of Winter Springs will be approximately $1,000. Like the City, we deal with ongoing inflationary pressures due to the nature of our business. A 5% provision for effects 'of inflation accounts for $1,000 of our proposed increase. ` r',_. Mr. Richard Rozansky March 23' 1990 Page 2 These additional costs that we propose do not reflect a significant additional cost that we plan to absorb. That cost is the time associated with auditing an organization for the first time. We estimate that initial year start -up costs often run as high as 20 %. The City of Winter springs will be an important client to us and therefore worth this investment. we appreciate the opportunity to present our qualifications to serve the City and are proud to have been selected on that basis. we look forward to a long -term relationship, and would welcome entering into a three -year contract renewable at the City"s option, with fees for the second and third years to be negotiated at the conclusion of our first year. If you have any questions regarding our proposal, please do not hesitate to call us. PJK:mah Enclosure Very truly yours, Patrick J. Knipe Managing Partner &Ly�rand codified public accountants I Mr. Richard Rozansky City Manager City of Winter Springs, Florida 1126 East State Road 434 Winter Springs, Florida 32708 Dear Mr. Rozansky: 501 North Orange Avenue Orlando, Florida 32801 -1397 telephone (407) 843 -1190 March 23, 1990 In principal areas of the world This letter confirms the nature and scope of our engagement to audit the financial statements of the City of Winter Springs for the year ended September 30, 1990. Our audit of your financial statements will be made in accordance with Government Auditing Standards and the Rules of the Auditor General of the State of Florida and will include such tests of the accounting records and such other auditing procedures as we con- sider necessary in the circumstances. The objective of such an audit is the expression of our opinion concerning whether the general purpose financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. As a part of our audit, we will consider the City's internal con- trol structure, as required by generally accepted auditing stan- dards, for the purposes of establishing a basis for determining the nature, timing, and extent of auditing procedures necessary for expressing our opinion on the financial statements. Our audit will include procedures designed to detect errors and irregularities that would have a material effect on the financial statements. However, as you are aware, there are inherent limita- tions in the auditing process; for example, such audits are based on the concept,of selective testing of the data being examined and -area; therefore, subject *to the inherent limitation that such matters, if they exist, may not be detected. Also, because of the characteristics of irregularities, including attempts at conceal- ment through collusion and forgery, a properly designed and exe- cuted audit may not detect a material irregularity. Mr. Richard Rozansky City Manager City of Winter Springs, Florida March 23, 1990 Page Two Similarly, in performing our audit we will be aware of the possi- bility that illegal acts may have occurred. However, it should be recognized that our 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 determina- tion of financial statement amounts will be detected. We will inform you with respect to illegal acts or material errors and irregularities that come to our attention during the course of our audit. You recognize that the financial statements and the establishment and maintenance of an internal control structure are the responsi- bility of the City's management. Appropriate supervisory review procedures are necessary to provide reasonable assurance that adopted policies and prescribed procedures are adhered to and to identify errors and irregularities or illegal acts. As part of our aforementioned consideration of the City's internal control struc- ture, we will inform the appropriate levels of the City's manage- ment and the City Commission of matters that come to our attention that represent significant deficiencies in the design or operation of the internal control structure. At the conclusion of the engagement, the City's management will provide to us 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 City Commission meetings, and the absence of irregularities involving management or those employees who have significant roles in the control structure. Our fees for this engagement will not that no unusual or unknown circumstance the agreed -upon assistance from City render progress billings on a monthly performed, with a final billing at th e ment. Invoices are due upon receipt. exceed $26,000 and assumes s arise, and that we receive staff. Our policy is to basis as the work is being completion of the engage- Mr. Richard Rozansky City Manager City of Winter Springs, Florida March 23, 1990 Page Three We appreciate the opportunity to be of service to you. If the foregoing is acceptable to your please acknowledge by signing this letter in the space provided. C ��y,►�/za��oG Ack owledged: CI OF WIN SPRINGS, FLORIDA 4 Richard Rozans City Manager t CITY OF WINTER SPRINGS, FLORIDA 1126 EAST STATE ROAD 434 WINTER SPRINGS, FLORIDA 32708 Telephone (407) 327 -1800 CERTIFIED P 480 326 224 August 31, 1990 Mr. Patrick J. Knipe Coopers & Lybrand 501 N. Orange Ave. Orlando, FL 32801 Re: Annual Audit of the City of Winter Springs Dear Mr. Knipe: Over three weeks ago I have had numerous conversations with Dana Lenox and Christine Hill concerning certain questions I had about the City's recent purchase of Seminole Utilities. Both of them were very cooperative and more than willing to look into my concerns during the course of our annual audit. Both agreed that my concerns were reason- able and could be addressed as part of the annual audit. Then, in my opinion, when I found out that an associate with your firm is married to an associate of our City Attorney and Bond Counsel, attitudes changed and Mr. Scott Packert was the only person I could talk to. The spirit of cooperation that existed, disappeared. On August 30th and again today I had a conversation with Mr. Packert who seemed to be defending the acquisition and not objectively answering all my questions. Mr. Packert refused to answer all my questions because he said it was not in your scope of work and I would have to obtain the permission of the City Manager to pay your firm for additional time. Mr. Knipe, when the City spends in excess of $13,000,000 of the tax- payers money I take it seriously. I do not think I should have to knock down "brick walls', "sift through smoke screens" and renegotiate our contract to get answers from a professional hired by the City. I would appreciate if you can objectively and without prejudice, answer my concerns about full and complete compliance of F.S. 218.385, F.S. 218.386, F.S. 180.301, F.S. 286.23 and F.S. 166.045 in regards to the acquisition of Seminole Utilities. I trust you will approach my request with complete independence, and the issue can be resolved at this level. r Mr. Patrick J. Knipe Aug. 31, 1990 Page 2 The citizens of the City of Winter Springs have every right to know why we spent $13,050,000, who received the money, why we didn't know about the parks and if we were in complete compliance of the law. Sincerely, CITY OF W] / i� W liam A. Commissior P.S. Under F.S. 119 please provide me with all copies of your work papers addressing the acquisition. cc: Scott Packert WAJ /mn i. FAX LETTER: DATE 9/4/90 CITY OF WINTER SPRINGS, FLORIDA 1126 EAST STATE ROAD 434 WINTER SPRINGS, FLORIDA 32708 Telephone (407) 327 -1800 TO: Attorney Frank Kruppenbacher FAX NO.: 1- 407 - 648 -1155 FROM: City Manager Richard Rozansky NUMBER OF PAGES (INCLUDING COVER SHEET): 3 REGARDING: Letter to Auditor COMMENTS: PLEASE NOTIFY US IMMEDIATELY IF NOT RECEIVED PROPERLY: (407) 327 -1800 TRANSMITTING FROM: dex450 Kf�llE & f�SSOCIATES CERTIFIED PUBLIC ACCOUNTANTS 6AHY D. KANE CHHISI -INE T. FiENN5 BARBARA V.HENNAHD DALLY A.SCALA MALIM LN BAN5l- JOAN ;JCIILO'I I MAN June 18, 1990 City Commissioners, Mayor and City Manager City of Winter Springs 1126 E. State Road 434 Winter Springs, FL 32708 Dear Commissioners, Mayor and City Manager: We are pleased to confirm our understanding of the services we are to provide for the City of Winter Springs for the period of August 22, 1985, through September 30, 1989. We will audit the financial statements of the Florida Department of Environmental Regulation Grant No. 767040 as of and for the period ending September 30, 1989. Our audit will be made in accordance with generally accepted auditing standards and will include tests of the accounting records of the Florida Department of Environmental Regulation Grant No. 767040 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 assets. At the conclusion of our audit, we will also request certain written representations from you about the financial statements and related matters. An audit is based primarily on the selective testing of accounting records and related data; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. Because we will not perform a detailed examination of all transactions, there is a risk that material errors, irregularities, or illegal acts, including fraud AIEJVIBCI? ANC rNCAN LNSTITUTc.- OF ('LRTIfIED ACCOUNTANTS •FLORIDA INSTITUTL_UF CERTIFIED PUBLIC ACCOUNTANTS _' WL.ST GONISIOGK IWI =NUL - SUIVE 200 • WINTER PAliK, FLORDA 3278}) • 1=1071 644 60 ) FAX (4071 X44-6825 City Commissioners, Mayor and City Manager City of Winter Springs June 18, 1990 Page Two or defalcations, may exist and not be detected by us. We will advise your, however, of any matters of that nature that come to our attention. 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. We understand that you will provide us with the basic 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. This responsibility includes the maintenance of adequate records and related controls, the selection and application of accounting principles, and the safeguarding of assets. Our audit is not specifically designed and cannot be relied on to disclose reportable conditions, that is, significant deficiencies in the design or operation of the internal control structure. However, during the audit, if we become aware of such reportable conditions or ways that we believe management practices can be improved, we will communicate them to you in a separate letter. We expect to begin our audit on approximately June 27, 1990, and to issue our report no later than July 2, 1990. Our fees for these services will be based on the actual time spent at our standard hourly rates, plus travel and other out -of- pocket costs such as report production, typing, postage, etc. Our standard hourly rates vary according to the degree of responsibility involved and the experience level of the personnel assigned to your audit. Based on our preliminary estimates, the fee should approximate $1,000. This estimate is based on the assumption that unexpected circumstances will not be encountered during the audit. If significant additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the additional costs. KAnE & ASSOCIATES r T. x �r City Commissioners, Mayor and City Manager City of Winter Springs June 18, 1990 Page Three We appreciate the opportunity to be Winter Springs and believe this letti significant terms of our engagement. please let us know. If you agee with as described in this letter, please return it to us. Very truly yours, Ka e & Associates of service to the City of :r accurately summarizes the If you have any questions, the terms of our engagement sign the enclosed copy and RESPON E This l4iPer correc y set forth the understanding of the City of Winter :riAgs. fl BY: TITLE: DATE: KAnE&ASSOCIATES CERTIFIED PUBLIC ACCOUNTANTS Coopers &Lybrand certified public accountants 501 North Orange Avenue Orlando, Florida 32801 -1397 Mr. Richard Rozansky City Manager City of Winter Springs, Florida 1126 East State Road 434 Winter Springs, Florida 32708 Dear Mr. Rozansky: telephone (407) 843 -1190 May 31, 1991 in principal areas of the world M- i A vile vi dIitri *R SPR1NGj CITY M MAGER Enclosed please find the engagement letter for the audit of the City of Winter Springs for the years ending September 30, 1991 and 1992. This engagement letter reflects a proposed fee of $32,500 and $36,800 for 1991 and 1992, respectively, plus out -of- pocket expenses. While this fee proposal represents an increase over the September 30, 1990 audit fee of $26,000, we believe that there are valid reasons to justify such an increase. The follow- ing matters were considered by Coopers & Lybrand while developing the current year fee proposal. All the items listed were previ- ously discussed with you and with Mr. Harry Martin, Finance Director of the City. Last year was Coopers & Lybrand "s first year audit of the City of Winter Springs. We had previously estimated that performing the audit would require approximately 600 hours to complete on an on -going basis. However, having completed the audit, we have determined that, due to the size of the City, the complexity of the financial transac- tions, and the level to which we must opine (i.e., the auditors report must be addressed to the individual fund or account group level), 700 hours is closer to the amount of time that is required to perform a proper and complete audit of the City. Last year Coopers & Lybrand made a decision to absorb the excess time required to audit the City for the first time. Our investment in the City was expected to be approxi- mately a 209 increase over a recurring budget of 600 hours. However, due to a variety of circumstances, actual time incurred to perform the audit exceeded 1,000 hours. This represents a start -up investment of over 70 %. eo Mr. Richard Rozansky May 31, 1991 Page Two The City is continuing to grow as compared to previous year's budget. As the City grows, so will the need to increase our audit scopes and procedures to properly audit the City. The City completed in the prior year. first full year of require additional for the testing pei of the utility. the acquisition of a new utility system This current fiscal year will be the operations of the utility which will auditing procedures and expanded scopes ^formed to properly audit the operations As with any other business or governmental agency, costs of doing business are increasing. We are facing the same inflationary pressures as the City and need to increase our fees to cover our increasing costs of providing services. The City recently refinanced its out Utility system. We will need to agreements and perform additional specific covenants within the bond's as well as ensure that the bonds are the financial statements of the City. standing bonds on the review the new bond procedures to test official statements, properly recorded on I believe you can see from this letter that Coopers & Lybrand has already made a significant investment in the City of Winter Springs. This investment reflects the importance of the City as a client to Coopers & Lybrand, and our desire to continue and to expand our good relationship with the City. Therefore, please find a draft of the proposed engagement letter for audit services for the City of Winter Springs. We wish to continue our profes- sional services to the City for an additional two years at the fee levels indicated in the letter. The increases requested reflect the actual time incurred to audit the City with increases for anticipated City growth, inflation, new requirements of our profession dictated by the Federal Government, the State of Florida and the accounting profession, and new transactions which the City is entering into. We have been proud to serve the City over the last year and are pleased to be able to continue to serve you this year with a team of individuals already familiar with your operation. We believe as you do that this is very important in order to minimize disruption of the day -to -day activities and perform an efficient and effective audit of the City. 06 � it Mr. Richard Rozansky May 31, 1991 Page Three We look forward to continuing our relationship, and are committed to providing the City with the highest level of professional service. Very truly yours, Christine E. Hill CEH /klc Enclosure CITY OF WINTER SPRINGS, FLORIDA 1126 EAST STATE ROAD 434 WINTER SPRINGS, FLORIDA 32708 Telephone (407) 327 -1800 November 5, 1990 CERTIFIED CEP 858 930 588 Mr. Stephen W. McKessy Deputy Chairman of Regional Operations Coopers & Lybrand 1251 Avenue of the Americas New York, New York 10020 Re: Refusal to.answer letter of August 31, 1990 and Oct. 9, 1990 Dear Mr. McKessy: This is my third request for a written answer to my letter dated August 31, 1990. I'm sure you are aware that my term of office will expire on 12/3/90. However, rest assured I will not go away or stop my investigation until I get answers to my questions. The public and taxpayers have a right to know the truth. I am enclosing a copy of a page out of the "AICPA Professional Standards" Volume I as of 6/1/90 backing up my repeated attempt to your firm for a response. May I please have the courtesy of a reply. Sincerely, CITY OF W PR William A. J ob , Commissioner Enc. cc: Mr. Knipe LAW OFFICES HONIGMAN MILLER SCHWARTZ AND COHN A PARTNERSHIP INCLUDING PROFESSIONAL ASSOCIATIONS 390 NORTH ORANGE AVENUE SUITE 1300 FRANK KRUPPENBACHER, P.A. ORLANDO, FLORIDA 32801 -1677 DIRECT DIAL NUMBER TELEPHONE(407)648-0300 (407) 649 -7405 TELECOPIER (407) 648 -1155 M E M O R A N D U M TO: John Govoruhk FROM: Frank Kruppenbacher RE: Auditors Letter of March 25, 1993 DATE: April 6, 1993 ER, 5 _ , APR 12 1993 CITY of WINTER SPRINGS CITY MANAGER WEST PALM BEACH, FLORIDA TAMPA, FLORIDA DETROIT, MICHIGAN LANSING, MICHIGAN HOUSTON, TEXAS LOS ANGELES, CALIFORNIA I have reviewed the attached letter from Coopers & Lybrand. It is approved for your execution with the handwritten amendment I made to page three. Please sign the agreement, initial the change and request the auditors to forward back to you an initialed change. 02856d R '° Coopers &Lybrand certified public accountants 501 North Orange Avenue Orlando, Florida 32801 -1397 Mr. John Govoruhk Acting City Manager City of Winter Springs, Florida 1126 East State Road 434 Winter Springs, Florida 32708 Dear Mr. Govoruhk: telephone (407) 843 -1190 March 25, 1993 in principal areas of the world �i�j�6gIIC�7j �� 1�1 MAR 31 ly93 CITY of WINTER SPRINGS CITY MANAGER This letter confirms the nature and scope of our engagement to audit the financial statements of the City of Winter Springs for the years ending September 30, 1993, 1994 and 1995. Our audit of your financial statements will be made in accordance with Government Auditing Standards and the Rules of the Auditor General of the State of Florida and will include such tests of the accounting records and such other auditing procedures as we con- sider necessary in the circumstances. The objective of such an audit is the expression of our opinion concerning whether the general purpose financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. As a part of our audit, we will consider the City's internal con- trol structure, as required by generally accepted auditing stan- dards, for the purposes of establishing a basis for determining the nature, timing, and extent of auditing procedures-necessary for expressing our opinion on the financial statements. Our audit will include procedures designed to detect errors and irregularities that would have a material effect on the financial statements. However, as you are aware, there are inherent limita- tions in the auditing process; for example, such audits are based on the concept of selective testing of the data being examined and are, therefore, subject to the inherent limitation that such matters, if they exist, may not be detected. Also, because of the characteristics of irregularities, including attempts at conceal- ment through collusion and forgery, a properly designed and exe- cuted audit may not detect a material irregularity. i i 4 Mr. John Govoruhk Acting City Manager City of Winter Springs, Florida March 25, 1993 Page Two Similarly, in performing our audit we will be aware of the possi- bility that illegal acts may have occurred. However, it should be recognized that our 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 determina- tion of financial statement amounts will be detected. We will inform you with respect to illegal acts or material errors and irregularities that come to our attention during the course of our audit. You recognize that the financial statements and the establishment and maintenance of an internal control structure are the responsi- bility of the City's management. Appropriate supervisory review procedures are necessary to provide reasonable assurance that adopted policies and prescribed procedures are adhered to and to identify errors and irregularities or illegal acts. As part of our aforementioned consideration of the City's internal control struc- ture, we will inform the appropriate levels of the City's manage- ment and the City Commission of matters that come to our attention that represent significant deficiencies in the design or operation of the internal control structure. Our Firm, as well as all other major accounting firms, participates in a "peer review" program, covering our audit and accounting prac- tices. This program requires that once every three years we subject our quality assurance practices to an ,,examination by another accounting firm. As part of the process, -the other firm will review a sample of our work. It is possible that the work we perform for you may be selected by the other firm for their review. If it is, they are bound by professional standards to keep all information confidential. If you object to having the work we do for you reviewed by our peer reviewer, please notify us in writing. At the conclusion of the engagement, the City's management will provide to us a representation letter that, among other things, will confirm management's responsibility for the preparation of the financial statements in conformity with generally accepted account- ing principles, the availability of financial records and related data, the completeness and availability of all minutes of City Commission meetings, and the absence of irregularities involving management or those employees who have significant roles in the control structure. `s Mr. John Govoruhk Acting City Manager City of Winter Springs, Florida March 25, 1993 Page Three Our fees for the 1993 engagement will be based on actual hours incurred, not to exceed $36,000, plus actual out -of- pocket expenses not to exceed $1,500. This fee assumes that no unusual or unknown circumstances arise, and that we receive the agreed -upon assistance from City staff. Our policy is to render progress billings on a monthly basis as the work is being performed, with a final billing at the completion of the engagement. Invoices are due upon receipt. The composite hourly rate of $60 for 1994 and 1995 will be adjusted by the consumer price index. Either the City or the auditors may cancel this agreement by written notice to the other party not later than March 31 of each year. The City agreep that such cancellation on its part shall be only after appr priate discussions with lot fhe 4adthrs ef�ch oe_ We appreciate the opportunity to be of service to you. If the foregoing is acceptable to you, please acknowledge by signing this letter in the space provided. OR Acknowledged: CITY OF WINTER SPRINGS, FLORIDA Coo ers Coopers & Lybrand L.L.P. 200 South Orange Avenue telephone (407) 843 -1190 20th Floor &LyErand Orlando, Florida 32801 facsimile (407) 244 -7601 a professional services firm MTq Nov 2 2 1994 October 31, 1994 CITY OF WINTER SPRINGS City Manager Mr. John Govoruhk City Manager City of Winter Springs, Florida 1126 East State Road 434 Winter Springs, Florida 32708 Dear Mr. Govoruhk: This letter of arrangement between the City of Winter Springs (the "City") and Coopers & Lybrand L.L.P. sets forth the nature and scope of the services we will provide, the City's required involvement and assistance in support of our services, the related fee arrangements and other terms and conditions designed to ensure that our professional services are performed to achieve the mutually agreed upon objectives of the City. We will audit the financial statements of the City as of and for the period ending September 30, 1994, in accordance with generally accepted auditing standards and the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The objective of an audit is the expression of our opinion concerning whether the financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows of the City in conformity with generally accepted accounting principles. In addition, we will issue a separate report to the City Commission and City Manager regarding any matters which come to our attention in connection with our audit that caused us to believe that the City failed to comply with requirements for maintenance of the Sewerage System Capital Improvement account in accordance with Section 17- 501.610(2)(b) of the Florida Administrative Code insofar as they relate to accounting matters. We expect to deliver our report on or about January 31, 1995. The engagement will be led by: ■ Pat Knipe, partner, who will be responsible for assuring the overall quality, value, and timeliness of our services to you. ■ Tim Baker, manager, who will be responsible for managing the delivery of our services to you. Jim Lane will serve as the concurring partner and will be available in the absence of the engagement partner. This team will have access to a full range of specialists to assist as necessary. Coopers & Lybrand is a member firm of Coopers & Lybrand (International) a City of Winter Springs, Florida October 31, 1994 Page 2 Our audit will include procedures designed to provide reasonable assurance of detecting errors and irregularities that are material to the financial statements. As you are 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 errors and irregularities, 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 our audit we will be aware of the possibility that illegal acts may have occurred. However, it should be recognized that our 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. We will inform you with respect to material errors and irregularities, or illegal acts that come to our attention during the course of our audit. You recognize your responsibility for reporting illegal acts in accordance with Government Auditing Standards, Compliance with laws, regulations, contracts, and grants applicable to the City is the responsibility of the City's management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of the City's compliance with certain provisions of laws, regulations, contracts, and grants. However, our objective is not to provide an opinion on overall compliance with such provisions. As required by Government Auditing Standards, we will prepare a separate written report on our 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. As a part of our audit, we will consider the City's internal control structure, as required by generally accepted auditing standards and Government Auditing Standards. These standards require us to obtain an understanding of the control structure and assess risk as a basis for determining the nature, timing, and extent of auditing procedures necessary for expressing our opinion on the financial statements. You recognize that the financial statements and the establishment and maintenance of an internal control structure are the responsibility of management. Appropriate supervisory review procedures are necessary to provide reasonable assurance that adopted policies and prescribed procedures are adhered to and to identify errors and irregularities or illegal acts. As part of our consideration of City's internal control structure, we will inform you of matters that come to our attention that represent significant deficiencies in the design or operation of the internal control structure. City of Winter Springs, Florida October 31, 1994 Page 3 As required by Government Auditing Standards, we will prepare a separate written report on our understanding of the City's internal control structure and the assessment of control risk made as part of the financial statement audit. Our report will include (1) the scope of our work in obtaining an understanding of the internal control structure and in assessing control risk; (2) the City's significant internal control structure policies and procedures, including the controls established to ensure compliance with laws and regulations that have a material impact on the general purpose financial statements, and; (3) the reportable conditions, including the identification of material weaknesses, identified as a result of our work in understanding and assessing control risk. We are prepared at your request to perform a more in -depth assessment of the City's internal control structure, and report our findings and recommendations, or to conduct an examination engagement on the effectiveness of your internal control structure. We would be pleased to discuss fees for these services, which depend on their scope. At the conclusion of the engagement, the City's management will provide to us 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 Commission and committee meetings, management's responsibility for the entity's compliance with laws and regulations, the identification and disclosure to the auditor of all laws and regulations that have a direct and material effect on the determination of financial statement amounts and, to the best of their knowledge and belief, the absence of irregularities involving management or those employees who have significant roles in the control structure. Additionally, representations will be requested as to the financial reporting entity's financial statements to be audited; the inclusion of all component units, and the disclosure of all joint ventures and other related organizations; the proper classification of funds and account groups; the proper approval of reserves or designations of fund equities; compliance with laws and regulations, including budget laws or ordinances; compliance with any tax or debt limits, including any related debt covenants; representations relative to GASB - required supplementary information; and identification of all federal assistance programs and compliance with all related grant requirements. As part of this engagement we will ensure that certain additional matters are communicated to the appropriate members of management. Such matters include (1) the initial selection of and changes in significant accounting policies and their application; (2) the process used by management in formulating particularly sensitive accounting estimates and the basis for our conclusions regarding the reasonableness of those estimates; (3) audit adjustments that could, in our judgment, either individually or in the aggregate, have a significant effect on your financial reporting process; (4) any disagreements with management, whether or not satisfactorily resolved, about matters that individually or in the aggregate could be significant to the financial statements or our report, (5) our views about matters that were the subject of management's consultation with other accountants about auditing and accounting matters; (6) major issues that were discussed with management in connection with the retention of our services, including, among other matters, any discussions regarding the application of accounting principles and auditing standards; and (7) serious difficulties that we encountered in dealing with management related to the performance of the audit. i City of Winter Springs, Florida October 31, 1994 Page 4 As part of our ongoing process of assessing the quality of our services, you may receive questionnaires from us and/or visits from senior partners not directly involved in providing services to you. We appreciate the attention that you give to these and value your commentary. Additionally, if you have questions or concerns about our services, you may contact Jim Maxwell, the Business Assurance Partner -In- Charge responsible for the engagement team serving you. TERMS AND CONDITIONS SUPPORTING FEE As a result of our planning process, the City and Coopers & Lybrand L.L.P. have agreed to an approach aimed at achieving objectives for an agreed upon fee, subject to the following conditions. To facilitate meeting our mutual objectives, the City will provide in a timely manner audit schedules and supporting information, including timely communication of all significant accounting and financial reporting matters, as well as working space and clerical assistance as mutually agreed upon and as is normal and reasonable in the circumstances. When and if for any reason the City is unable to provide such schedules, information and assistance, Coopers & Lybrand L.L.P. and the City will mutually revise the fee to reflect additional services, if any, required of us to achieve these objectives. Such revisions will be set forth in the form of the attached "Amendment to Letter of Arrangement." In providing our services, we will consult with the City with respect to matters of accounting, financial reporting or other significant business issues. Accordingly, time necessary to effect a reasonable amount of such consultation is reflected in our fee. However, should a matter require research, consultation or audit work beyond that amount, Coopers & Lybrand L.L.P. and the City will agree to an appropriate revision in services and fee. Such revisions will also be set forth in the form of the attached "Amendment to Letter of Arrangement." Except for any changes in fees which may result from the circumstances described above, our fees will be limited to those set forth below. EU Our fees for the audit services described above as they pertain to the 1994 engagement will be based on actual hours incurred, not to exceed $37,000 plus out -of- pocket expenses not to exceed $1,550 subject to the terms and conditions above. Such expenses will include all travel and an allocation of office charges in support of our services including computer usage, telephone, facsimile transmission, postage, photoreproduction and similar expenses. The fees for the special report regarding the Sewerage System Capital Improvement account will be based on actual hours incurred, not to exceed $2,600. Our policy is to render billings on a monthly basis as the work is being performed, with a final billing at the completion of the engagement. Invoices rendered are due and payable upon receipt. The composite hourly rate of $62 has been adjusted by the increase in the consumer price index from September 30, 1993 to September 30, 1994. 1. City of Winter Springs, Florida October 31, 1994 Page 5 ACCESS TO WORKING PAPERS The working papers for this engagement are the property of Coopers & Lybrand L.L.P. and constitute confidential information. Except as discussed below, any requests for access to our working papers will be discussed with you prior to making them available to requesting parties. Our Firm, as well as all other major accounting firms, participates in a "peer review" program, covering our audit and accounting practices. This program requires that once every three years we subject our quality assurance practices to an examination by another accounting firm. As part of the process, the other firm will review a sample of our work. It is possible that the work we perform for you may be selected by the other firm for their review. If it is, they are bound by professional standards to keep all information confidential. If you object to having the work we do for you reviewed by our peer reviewer, please notify us in writing. However, as required by applicable provisions of laws and regulations, we are required to make certain working papers available certain agencies upon request for their regulatory oversight purposes. Access to the requested working papers will be provided to federal and state regulatory agencies under the supervision of Coopers & Lybrand L.L.P. audit personnel and at a location designated by our firm. In addition, the workpapers shall be maintained for a period of time to satisfy legal and administrative requirements. If the foregoing is in accordance with your understanding, please sign the copy of this letter in the space provided and return it to us. If you have any questions, please call Pat Knipe at (407) 843 -1190. Very truly yours, Attachment cc: Mr. Harry Martin, Finance Director TITLE //- ,23 -9� DATE AMENDMENT #_ TO LETTER OF ARRANGEMENT [Date] Mr. John Govoruhk City Manager City of Winter Springs, Florida 1126 East State Road 434 Winter Springs, Florida 32708 The letter of arrangement dated October 31, 1994 between Coopers & Lybrand L.L.P. and the City of Winter Springs is hereby amended to reflect the following: Estimated Description of /Causes for Amendment Fees Impact Total this amendment Previous fee estimate Revised fee estimate Please sign the copy of this letter in the space provided and return it to us. If you should have any questions, please call Pat Knipe at (407) 843 -1190. Very truly yours, cc: Mr. Harry Martin, Finance Director SUBMITTED BY ACCEPTED BY TITLE DATE Cooers MyErand certified public accountants I 200 South Orange Avenue Orlando, Florida 32801 May 18, 1994 Mr. Harry Martin City of Winter Springs, Florida 1126 East State Road 434 Winter Springs, FL 32708 Dear Mr. Martin: telephone (407) 843 -1190 facsimile (407) 244 -7601 This letter of arrangement sets forth the nature and scope of the services we will provide, the required involvement and assistance in support of our services, the related fee arrangements and other terms and conditions designed to assure that our professional services are performed to achieve our mutually agreed upon objectives. SUMMARY OF SERVICES As you have requested, we will perform the following services: • Compute the aggregate amount of rebate required on the $9,000,000 Improvement Refunding Revenue Bonds for the City of Winter Springs, Florida, Series 1989 (the Bonds) for the period May 25, 1989 through May 25, 1994 • Prepare the Arbitrage Rebate and Penalty in Lieu of Arbitrage Rebate Form (Form 8038 -T) We expect to complete this work on or before June 20, 1994. To facilitate our work, you will need to provide us for the above bond: • Detail cash and asset balance at the beginning of the bond year • Monthly bank statements 0 Computer disk containing detail of interest income and expenditures Coopers & Lybrand is a member firm of Coopers & Lybrand (International) Mr. Harry Martin City of Winter Springs, Florida May 18, 1994 Page 2 TERM AND CONDITIONS SUPPORTING FEE ESTIMATE Our fee is based on the time of partners and staff assigned. Such factors as the condition of your records, the timely compilation by your staff of any information you have agreed to provide us by June 7, 1994 as noted above, the continuity of your personnel, and their availability may have a bearing on the amount of time required to complete the engagement. Should any unanticipated issues arise during the engagement wherein additional professional time may have to be expended and /or if you are unable to provide the information requested, we will mutually revise the estimated fee to reflect additional services, if any, required of us to meet our deadline. Such revisions will be set forth in the form of the attached "Amendment to Letter of Arrangement". FEE ESTIMATE Our fees for the services listed above will bee-bbetween $3,750 and Q 4,2.50, subject to the terms and conditions above. You will be billed upon completion of the calculation. REPRESENTATIONS FROM TAXPAYER It is the taxpayer's responsibility to make available the financial records and related data needed to prepare the arbitrage rebate calculation. The taxpayer represents that the information provided is complete and, to the best of their knowledge and belief, absent of irregularities involving management or those employees who have significant roles in the control structure. The arbitrage rebate calculation will be prepared from data and other information submitted by you, without audit verification by us. ACCESS TO WORKPAPERS Except as discussed below, any requests for access to our work papers will be discussed with you prior to making them available to requesting parties. Mr. Harry Martin City of Winter Springs, Florida May 18, 1994 Page 3 Our Firm, as well as all other major accounting firms, participates in a "peer review" program, covering our audit and accounting practices. This program requires that once every three years we subject our quality assurance practices to an examination by another accounting firm. As part of the process, the other firm will review a sample of our work. It is possible that the work we perform for you may be selected by the other firm for their review. If it is, they are bound by professional standards to keep all information confidential. If you object to having the work we do for you reviewed by our peer reviewer, please notify us in writing. If you have any questions regarding the contemplated scope of our services or our estimated fees, please call Andrew J. Copa at (407) 244 -7556. Please indicate your acceptance of the arrangements described herein by signing and returning the enclosed acknowledgment copy of this letter. We appreciate your continued confidence in the services provided by Coopers & Lybrand. Accepted for City of Winter Springs, Florida By: i Very truly yours, Coopers & Lybrand 4 L 4k-�, Date: r r." AMENDMENT ## Mr. Harry Martin City of Winter Springs, Florida 1126 East State Road 434 Winter Springs, FL 32708 Dear Mr. Martin: TO LETTER OF ARRANGEMENT Date Our letter of arrangement dated May 18, 1994 ended to reflect the following: Description of /Causes for Amendment Total this Amendment Previous fee estimate Revised fee estimate Estimated Fee Impact Please sign the copy of this letter in the space provided and return it to us. If you should have any questions, please call Andrew J. Copa at (407) 244 -7556. SUBMITTED BY ACCEPTED BY TITLE Very truly yours, /s/ Coopers & Lybrand (Partner's signature)