Loading...
HomeMy WebLinkAbout2003 03 10 Consent C FY 2003 Audit COMMISSION AGENDA ITEM C REGULAR CONSENT XX INFORMATIONAL M;:]rch 10, 2001 Meeting MGR ~ /DEPT. ----f'j_ Allthorization REQUEST: The Finance Department recommends that the City Commission designate McDirmit Davis as the Cities auditors for the FY 03 audit. PURPOSE: To designate an audit firm for the FY 03 audit. CONSIDERATIONS: . The City is implementing GASB 34 with the FY 02 audit. . The Cities three-year contract with our current audit firm, McDirmit Davis, expires after completion of the FY 02 audit. . Given the complexities associated with the implementation of GASB 34, a continuation with the current audit firm is desired for FY 03. . The City charter, Section 4.12 Independent Audits, requires that the Commission designate an audit firm annually or for a period not exceeding three years. . Per an opinion of the Auditor General, no bid or RFP is required by municipalities as long as they perform competitive selection procedures, however, the City did elect to do a RFP two years ago. . Our current audit firm is willing to charge the City $1,700 less for the FY 03 audit as compared to the amended amount charged for the FY 02 audit. Fees are as follows: FY Base CAFR Single Audit Total 02 22,700 10,000 4,000 36,700 03 24,300 6,700 4.000 35,000 ATTACHMENT: City charter, Section 4.12 Independent Audits RECOMMENDATION: The Finance Department recommends that the City Commission designate McDirmit Davis as the Cities auditors for the FY 03 audit at the proposed FY 03 fee. COMMISSION ACTION: ~ 4.08 WINTER SPRINGS CODE authorized by law or forfeiture of his office, or in the event no one is elected to the office of mayor or commission member. .' (b) Forfeiture of office. A commissioner or mayor shall forfeit his office if he: (1) Lacks at any time during his term of office any qualifications prescribed by this Char- ter or by law; or (2) Knowingly and willfully violates anyex- press prohibition of this Charter; or . (3) Is convicted of a felony; or (4) Fails to attend three (3) consecutive reg~ ular meetings of the commission without being duly excused by the commission. (c) Filling of vacancies. A vacancy in a commis- sion member's seat shall be filled until the next regular election to be held for the office of the commissioner from that seat by a majority vote of all its remaining members. Section 4.09. Judge of qualifications. The commission shall be the judge of the elec- tion and qualifications of its members and of the grounds of forfeiture of their office and for that purpose shall have power to subpoena witnesses, administer oaths and require production of evi- dence. A member charged with conduct constitut- ing grounds for forfeiture of his office shall be so notified by certified mail and shall be entitled to a p~blic hearing .'ondemand, and notice of such heanng: . shall be published in one or more news- papers of a general circulation in the city at least one week in advance of the hearing. Decisions made by the commission under this section shall be subject to review by the courts. Section 4.10. City clerk. (a) The city commission, after receiving a nom- ination from either the mayor or a commission member(s) shall, by a vote of not less than four (4) commission members, appoint an officer of the city who shall have the title of city clerk. The city clerk shall give notice of commission meetings to its members and the public, keep the journal ofits Supp. No.2 proceedings and perform such other duties as are provided by this Charter, by the commission or by law. (b) The city clerk may be removed by a vote of not less than four (4) commission members. Section 4.11. Investigations. The commission may make investigations into the affairs of the city and the conduct of any city department, office or agency and for this purpose may subpoena witnesses, administer oaths, take testimony and require the production of evidence. Any person who fails or refuses to obey a lawful order issued in the exercise of these powers by the commission shall be guilty of a misdemeanor and punishable by a fine of not more than five hun- dred dollars ($500.00) or by imprisonment for not more than ninety (90) days or both. Section 4.12. Independent audits. The commission shall provide for an indepen- dent audit of all city accounts and may provide for such more frequent audits as it deems necessary. Such audits shall be- made by a certified public accountant or firm of accountants who have no personal interest, direct or indirect in the fiscal affairs of the city government or any of its officers. The commission may designate such accountant or firri1 annually or for a period not exceeding three (3) years provided that the designation for any particular fiscal year shall be made no later than six (6) months after the beginning of such fiscal year. If the state makes such an audit the commission may accept it as satisfying the re- quirement of this section. ) Section 4.13. Procedure. (a) Meetings. The commission shall meet reg- ularly at least once every month at such times and places as the commission may prescribe by rule. Special meetings shall be held on the call of the mayor or three (3) or more members and whenever practicable, upon no less than twelve (12) hours' notice to each member. All meetings shall be public. 6 ..:. ~ MCDIRMIT DAVIS PUCKETT March 13, 2003 City of Winter Springs, Florida 1126 East State Road 434 Winter Springs, FL 3270~-2799 We are pleased to confirm our understanding of the services we are to provide the City of Winter Springs, Florida for the year ended September 30,2003. We will audit the financial statements of the City of Winter Springs as of and for the year ended September 30,2003. We understand the financial statements will be presented in accordance with GASB Statement No. 34. Audit Objectives The objective of our audit is the expression of an opinion as to whether your financial statements are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America. Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America 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 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 financial statements in accordance with accounting principles generally accepted in the United States of America. MCDIRMIT DAVIS PUCKETT & COMPANY, LLC CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS 605 E. ROBINSON STREET, SUITE 635' ORLANDO, FLORIDA 32801 TELEPHONE 407-843-5406 . FAX 407-649-9339 . EMAIL: INFO@MDPCPA.COM MEMAERS: PRIVATE COMPANIES PRACTICE SECTIO>:' AMERICA" INSTITUTE OF CERTJrIED PUBLIC ACCOUNTANTS' FLORIDA '>:STITUTE OF CERTIFIED PUBLIC ACCOUNTANTS '';' ~ City of Winter Springs Engagement Letter March 13, 2003 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 from errors, fraudulent financial reporting, misappropriation of assets, or violations of laws or governmental regulations that are attributable to the entity or acts by management or employees acting on behalf of the entity. 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 misstatements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements. However, we will inform you of any material errors that come to our attention and we will inform you or any fraudulent financial reporting or misappropriation of assets that comes to our attention. We will also inform you of any violations of laws or governmental regulations 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 laterperiqqs 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. 'A: :f City of Winter Springs Engagement Letter March 13, 2003 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' 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 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 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 December 10, 2003 and to issue our reports no later than March 20, 2004. Our fee for the year ending September 30, 2003 is as follows: Sase Audit Fee $24,300 CAFR Preparation $6,700 ~.. City of Winter Springs Engagement Letter March 13, 2003 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. Also, if we are requested to perform any additional services, these additional services will be billed at the following hourly rates: Audit Stockholder Audit Manager Audit Senior Audit Staff $150 125 90 70 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, LLC ~Glf/1C~ RESPONSE: . This le~ sets forth the ~nderstanding of the City of Winter Springs. By: ." V~ /"3 Title: (;~ 1:~r '-(-d/- ()~ Date: