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HomeMy WebLinkAbout1991-030-02/19/1991-1990 AUDIT AGREEMENT PRICE WATERHOUSE PROFESSIONAL SERVICES RESOLUTION 91-30 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROVING MODIFICATIONS TO THE PROFESSIONAL SERVICES AGREEMENT WITH PRICE WATERHOUSE FOR AUDITING SERVICES FOR THE 1990 AUDIT WHEREAS, on October 28, 1988, the City entered into a Professional Services Agreement with Price Waterhouse for auditing services; and WHEREAS, at the City's request, Price Waterhouse has proposed to expand the scope of services outlined in said Agreement at no additional cost to the City; and WHEREAS, the Finance Committee has reviewed and approved the proposed changes to the scope of services outlined in said Agreement and recommends that they be incorporated into the work plan for the 1990 audit. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that the City Council hereby approves the modification of the Scope of Services of the Professional Services Agreement, dated October 28, 1988, between the City and Price Waterhouse to include those items specified in the letter to Councilmember Bob Winokur dated November 14, 1990, which is attached hereto and made a part hereof. Passed and adopted at a regular meeting of the City Council held this 19th day of February, A.D. 1991 . Mayor ATTEST: CI,A City Clerk FEE 31 tC : :0' ': M FW—HL'LIT F'i GE . 7:0'� ss .e,ec ert Screet "aoe3n3 s 3'0 awte 25c^ Dervar 3CZ02 Prig K&erhouse \`ovember 14, 1990 Mr. Bob Winokur Chairman, Finance Committee City of Fort Collins 300 l,a Porte Avenue P.O. Box .380 Fort Collins, CO 80522 Dear Bob: As Mike Partain discussed with ycu and the other members of the finance committee on October 25, 1990, this letter is being written to summarize additional agreed- upon audit procedures we will perform in connection with our audit of the City s financial statements for the year ending December 31, 1990. We have included only those procedures which were discussed and have not attempted to summarize all procedures contemplated in a financial audit. Accordingly, we will incorporate the following additional audit procedures into our 199() audit plan at no additional charge to the City: 1. Evaluation of cash flow for two selected special improvement districts including: a. Evaluation of significant assumptions for reasonableness. b. Potential problems caused by defaults by property owners. c. Cash-flow problems relating to the tax sale process. U. Recommended solutions to potential cash flow problems. e. Evaluation of the sufficiency of the reserve fund. 2. Critique of financial management and reserve policies set forth in the budget document. a. Review to sec if policies are being followed in practice. FEF 13 ' 31 16 : 03 -'OM FtJ-AUDIT FAGE . 0'.=�3 November 14, 1990 Mr, Bob Winokur Page 2 b. Evaluate reasonableness of assumptions. 3. Review budget document. a. Comment on noticeable trends -- healthy or unhealthy. b. Evaluate reasonableness of significant budgetary assumptions. 4. Provide a briefing on new statutes or regulations of which we are aware that may have a significant financial impact on the City. 5. Provide highlights of areas in which the City is managing its affairs well. a. Indicate notable accomplislvnents such as the fact that there have been no audit adjustments made. b. ?analyze statistical informaticn for positive trends. c. Analyze financial statements for healthy indicators. 6. Compare the City's financial position and results of operations with selected other cities that have characteristics similar to the City. 7. Provide highlights of areas to which the City could improve its financial management. a. If there arc areas of concern which management is already addressing, say so. b. Point out inefficiencies noted. c. Point out problems; recommend solutions. 8. Provide a briefing of' the Potential impact of new or proposed GA513 pronouncements on the City's operations and financial statements. 9. Update the progress of previous management letters. FEE 13 ' 91 1E : 09 DM FI,I-RIJDIT FREE . 004 November 14, 1990 Mr. Bob Winokur Page 3 10. Issue separate management letters, if warranted, for Poudre Fire Authority and Poudre Valley Fire Protection District. All of the matters noted above will be addressed in our year-end management letter related to the December 31, 1990 audi.t. We will meet with the finance committee to discuss the progress of our audit fmid-April 1991) and, following the completion of our audit, to discuss the final comprehensive annual financial report and a draft of our management letter (end of May 1991). We appreciate the opportunity to continue to be of service to the City of Fort Collins. If the foregoing adequately reflects your understanding of our agreement, please sign a copy of this letter and return it to us iq the enclosed envelope. If you have any questions, do not hesitate to call me or Mike Partain. Yours very truly, PRICE WATERHOUH Bv: ames G. Nussbaum, Partner Acknowledged and accepted for City of Fort Collins By: Chairman, Finance Committee /rcl [EXISTING PROFESSIONAL SERVICES AGREEMENT] EXHIBIT A SCOPE OF SERVICES 1 . General Services. The purpose and scope of the Professional ' s services under this Agreement will be to perform an examination of general purpose financial statements in accordance with Statements on Auditing Standards promulgated by the American Institute of Certified Public Accountants and to perform a financial and compliance audit in accordance with the provisions of the Single Audit Act of 1984 and Office of Management and Budget Circular A-128, entitled "Audits of State and Local Governments" for the City of Fort Collins, Colorado, as of and for the year ended December 31 , 1988, and an examination of financial statements for Poudre Fire Authority as of and for the year ended December 31, 1988. The Professional 's examination will be made in accordance with generally accepted auditing standards, promulgated by the American Institute of Certified Public Accountants, and Standards for Audit of Governmental Organizations, Programs, Activities and Functions, promulgated by the Comptroller General of the United States (as these standards pertain to financial and compliance audits) . Accordingly, the Professional will selectively test the accounting records of the City and related data, and will perform other auditing procedures by methods and to the extent deemed appropriate and necessary by the Professional to accomplish the purposes of this Agreement. As part of the Professional 's examination, a letter of representation will be requested from the City confirming (a) any representations made orally during the Professional 's examination that are not reflected in the City' s books of account or other records and (b) any other representations implicit in the books and records maintained by employees of the City. Said letter of representation will deal with matters such as City management's acknowledgment of its responsibilities for the fair presentation of the financial statements and compliance with laws and regulations, information concerning related party transactions, plans or intentions that may affect the carrying value or classification of assets and liabilities, and similar matters. The Professional will advise the City promptly if it discovers conditions which suggest that material errors or defalcations or other irregularities may exist. 2. Illegal Acts. The Office of Management and Budget Circular A-128 provides the following in connection with illegal acts or irregularities: "If the auditor becomes aware of illegal acts or other irregularities, prompt notice shall be given to recipient management officials above the level of involvement. The recipient, in turn, shall promptly notify the cognizant agency of the illegal acts or irregularities and of proposed and actual actions, if any. Illegal acts and irregularities include such matters as conflicts of interest, falsification of records or reports, and misappropriations of funds or other assets. " Consequently, in cases of illegal acts or other irregularities involving high-level City officials, the Professional must reserve the right to communicate directly with State and Federal officials after first notifying the City Council . 3. Reports. At the conclusion of its examination, the Professional will submit the following reports addressed to City Council and the Governing Board of Poudre Fire Authority as applicable: A. A report to be included in the City's Comprehensive Annual Financial Report (CAFR) on the general purpose financial statements of the City of Fort Collins with at least "in-relation-to" responsibility for the other contents of the financial section of the CAFR. Said report must include (a) a title that includes the word "independent"; (b) a statement that the financial statements identified in the report were audited; (c) a . statement that the financial statements are the responsibility of the City's management and that the auditor's responsibility is to express an opinion on the financial statements based on his audit; (d) a statement that the audit was conducted in accordance with generally accepted auditing standards; (e) a statement that generally accepted auditing standards require that the auditor plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement; (f) a statement that an audit includes: (1) examining on a test basis evidence supporting the amounts and disclosures in the financial statements, (2) assessing the accounting principles used and significant estimates made by management, (3) evaluating the overall financial presentation; (g) a statement that the auditor believes that his audit provides a reasonable basis for his opinion; (h) an opinion as to whether the financial statements present fairly, in all material respects, the financial position of the City as of December 31, 1988, and the results of its operations and changes in financial position of its proprietary and similar trust fund types for the year then ended, in conformity with generally accepted accounting principles; (i ) the manual or printed signature of the firm; and (j) the date of the audit report. B. The professional will furnish the City with a sufficient number of printed, bound copies of a separate Single Audit Report required under the Single Audit Act of 1984 to allow distribution as required by Circular A-128. The following are to be included with the Single Audit Report: - A report on the City's schedule of Federal assistance. - A copy of the City's schedule of Federal assistance. - A report on the Professional 's study and evaluation of internal control systems designed to provide reasonable assurance that Federal programs are being managed in compliance with laws and regulations. This report will identify any material weaknesses that come to the Professional ' s attention. - A report on the City's compliance with laws and regulations, including a summary of all instances of noncompliance and total amounts questioned for each Federal assistance award. - Comments on findings, questioned costs and recommendations, including any plans for corrective action, along with any comments provided by City officials. C. A report to be included with the general purpose financial statements of the Poudre Fire Authority, with at least "in-relation-to" responsibility for combining and individual fund financial statements and schedules. Instances of fraud, abuse or illegal acts, if any, which come to the Professional 's attention, will be covered in a separate written report, as will any findings containing information protected by privacy regulations. In accordance with Office of Management and Budget Circular A-128, the Professional will maintain its working papers prepared under this Agreement for at least three years and make them available at its nearest office during normal business hours for review by the City, the City's cognizant agency, its designee or the General Accounting Office. 4. Management Letter. At or before the conclusion of the examination, the Professional agrees to submit to the City Manager and City Council a management letter including a statement of audit findings, recommendations affecting the financial statements, internal control , accounting, accounting systems, legality of actions, program and financial performance, financial policies, and any other material matters. Prior to final submission of the final management letter, the Professional agrees to review a draft of the proposed letter with persons named by the City's representative. 5. Planning and Exit Conferences. The Professional agrees to attend any planning and exit conferences deemed necessary by City Council before, during, and at the conclusion of the examination conducted by the professional .