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HomeMy WebLinkAboutCC RESO 14,962RESOLUTION NO. 14,962 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE A CONTRACT FOR AUDIT SERVICES BETWEEN THE CITY OF NATIONAL CITY AND ARTHUR YOUNG & COMPANY BE IT RESOLVED by the City Council of the City of National City, California, that the Mayor is hereby authorized to execute, on behalf of the City, a contract for audit services between Arthur Young & Company and the City of National City. PASSED and ADOPaED this 27th day of May, 1986. ATTEST: Ion Campbell, City CYerk APPROVED AS TO FORM: by the GFOA's Committee cn Reporting as follows: May TO: 20, City of National City Department of Finance 1243 National City Blvd., National City, CA 92050-4397 (619) 477-1181 1986 Mayor and City Council FROM: A Caloza Director of Fiance . f'✓ is ^t: " c ‘ .c -r i.:,.,".,. e...•-�" Arnold Peterson Executive Director - CDC SUBJECT: Recommendation for Award of Audit Services Contract In order to comply with the Single Audit Act of 1984 and Statement No. 3 promulgated by The National Council on Governmental Accounting requiring that all governmental entities over which the City Council exercises oversight responsibility be included in the City's combined financial statements, City Council directed that the accounting records of the City and CDC be audited by a single auditor. City Council further directed that a Request for Proposal (RFP) be prepared to select an auditor for the combined audit commencing in fiscal year 1985-86. Pursuant to Councii's directive, the Finance Department, in coordination with CDC, prepared a RFP for a three-year combined annual audit for the City and CDC and related agencies. RFP copies were sent to a total of fifteen (15) audit firms including the Big Eight firms (8), the present auditor (1), firms recommended by CDC (2), and all firms that requested RFP copies (4). Proposals were received from a total of five (5) audit firms, including 2 Big Eight firms (Touche Ross and Arthur Young & Co.), the present auditor (Diehl, Evans & Co.) and 2 of the firms that requested RFPs (Melvin Thomas and Peterson & Co.) The proposals were then evaluated following the procedures prescribed Accounting, Auditing, and Financial 1. All five (5) proposals were evaluated based on qualifications and experience in performing city audit (irrespective of bid amount) and then ranked accordingly. 2. The three (3) most qualified audit firms were selected and further evaluated based on bid amount as follows: Bid Amount Auditor 1985-36 1986-87 1987-88 Total Arthur Young & Co. 21,000 22,000 23,000 66,000 Touche Ross 23,500 25,500 28,500 77,500 Diehl, Evans & Co. 28,475 30,250 32,375 91,100 RECOMMENDATION. Based on the lowest bid amount among the three most qualified audit firms, we recommend that the contract for audit services be awarded to Arthur Young & Co. and that the Mayor be authorized to execute, on behalf of the City, a contract for audit services between the City and the said auditor. C AGREEMENT THIS AGREEMENT is made and entered into this 1986, by and between the 27th day of May CITY OF NATIONAL CITY, a municipal corporation, hereinafter referred to as "CITY", AND ARTHUR YOUNG & COMPANY, Certified Public Accountants, hereinafter referred to as "AUDITORS" W I T N E S S E T H. WHEREAS, it is the intention and desire of CITY to avail of auditing services; WHEREAS, such auditing services are of a type and complexity requiring the services of a professional and technical character and are of a temporary nature; and WHEREAS, AUDITORS are licensed Certified Public Accountants and are competent in performing auditing services. NOW, THEREFORE, the parties hereto agree as follows: 1. CITY does hereby engage AUDITORS to perform an Audit of the CITY's financial statements for each of the three fiscal years ending June 30, 1986, June 30, 1987 and June 30, 1988. 2. AUDITORS hereby accept said engagement and agree to provide the following audit services for each of the three fiscal years of the contract. (It is understood that the initial audit of the Housing Authority will be for the two year period ending June 30, 1986.) a. AUDITORS will perform a full scope audit of all funds and account groups of the City of National City, Community Development Commission, Housing Authority, Morgan Towers, National City Nutrition Project and Parking Authority. These entities will be included in the CITY's comprehensive annual financial report together with the audit opinion on the combined financial statements therein. AUDITORS will print the comprehensive annual financial report and provide the CITY with 25 copies thereof no later than November 30 following the end of each contract fiscal year, provided the CITY meets its deadlines for requested information. C b. AUDITORS will perform the financial and compliance audit procedures necessary in accordance with the provisions of OMB Circular A-128 and the Single Audit Act of 1984 (Public Law 98-502), which includes all compliance procedures necessary for Revenue Sharing funds, and will prepare the single audit report. AUDITORS will provide the CITY with 25 copies thereof (in addition to any number of copies required for submission to Regulatory Agencies) no later than November 30 following the end of each contract year. c. AUDITORS will perform full scope audits of the separate financial statements of the Community Development Commission, Housing Authority, Morgan Towers, National City Nutrition Project and Parking Authority. AUDITORS will print each of these separate financial reports and provide the CITY with 25 copies of each no later than November 30 following the end of each contract year. d. AUDITORS will prepare CITY's annual reports to the State Controller, including Report of Financial Transactions, Street Report, and Gas Taxes and TDA Puna Reports. e. AUDITORS will assist the CITY in its effort to obtain the CSMFO "Outstanding Award" and the GFOA "Certificate of Conformance." f. AUDITORS will prepare a management letter for each audited entity stating findings/observations and recommendations relating to the financial statements, internal control, accounting system, legality of actions, instances of non- compliance with laws and regulations, and any other material weaknesses. The letter will be presented to the CITY within 30 days after the completion of the audit. 3. AUDITORS' examination of CITY's financial statements shall be in accordance with generally accepted auditing standards as defined by the American Institute of Certified Public Accountants and the National Council on Governmental Accounting and, accordingly, include such tests as considered necessary in the circumstances. An audit is based on the concept of testing the data being examined; therefore, there is risk that material errors, irregularities and illegal acts, if they exist, will not be detected. Unless unusual conditions not now foreseen make it impracticable to do so, we will submit a report on our examination of these financial statements which will express an opinion as to the fairness of their presentation in conformity with generally accepted accounting principles. If conditions are discovered which lead AUDITORS to believe that material errors, defalcations, or other irregularities may exist or if any other circumstances are encountered that require extended services, AUDITORS shall promptly advise CITY. No extended services will be performed unless authorized in writing by CITY. Page 2 4. AUDITORS will conduct compliance audits in accordance with the standards of the applicable federal agency or other appropriate authority. AUDITORS will select the necessary procedures to test compliance and disclose instances of non-compliance with specified laws, and contracts. 5. AUDITORS agree to keep their working papers and other data developed during the conduct of their examination on file in legible form for a period of at least four (4) years and make them available to CITY's authorized representatives upon request, subject to AUDITORS' policy relating to audit working papers. A copy of this policy statement shall be made available by AUDITORS to CITY upon request. CITY will maintain a file of duplicate copies of selected workpapers from year to year. 6. All services to be performed by AUDITORS shall be directed by professional accountants certified by the California State Board of Accountancy, and all personnel engaged in the work shall be experienced and competent in their respective fields. AUDITORS' Coordinating Principal in this engagement will be Harold E. Kaplan unless a change is approved by CITY. 7. CITY shall pay AUDITORS as complete consideration for the work performed pursuant to this Agreement a fee not to exceed the guaranteed maximum all-inclusive fees contained in the attached Exhibit 1 which is made an integral part of this Agreement. 8. Payment for services rendered hereunder shall be made upon invoices submitted by AUDITORS as the work progresses. It is understood that said invoices shall not be submitted to CITY more often than once a month. CITY agrees to pay promptly such fees for services rendered by AUDITORS. 9. Neither CITY nor AUDITORS shall assign or transfer each one's interest in this Agreement without the written consent of the other. 10. CITY reserves the right to terminate this Agreement at ,the conclusion of each year of service within the contract period by reason of the AUDITORS' unsatisfactory performance under this Agreement as determined by CITY. 11. In the performance of the Agreement, AUDITORS shall abide by and conform to any and all applicable laws of the United States, State of California, and ordinances, regulations and policies of the City of National City. 12. The performance of AUDITORS' services hereunder shall be in the capacity of an independent contractor and not as an officer, agent or employee of the CITY. Page 3 13. Contract documents shall consist of this Agreement, CITY's Request for Proposal to Provide Audit Services dated April 3, 1986 and Proposal to the City of National City submitted by Arthur Young and Company on April 23, 1986. Any work called for in one of these documents not mentioned in the other(s), or vice versa, is to be performed as if mentioned in all said documents. IN WITNESS WHEREOF, the parties hereto have executed, or caused to be executed, this Agreement on the day and year first hereinabove written. APPROVED AS TO FORM: City Attorney CITY OF NATIONAL CITY, a municipal corporation By ARTHUR YOUNG & COMPANY Certified Public Accountants By Partner "AUDITORS" Page 1 CITY OF NATIONAL CITY PROPOSED FEE SCHEDULE City of National City Community Development Commission Section 8 Housing Program National City Nutrition Program Morgan Towers Parking Authority Total * Fees include compliance audit of federal grants under the Single Audit Act FY 86* $11,000 2,500 2,000 1,500 2,000 2,000 S21.000 Exhibit 1 FY 87* FY 88* $11,500 2,750 2,250 1,500 2,000 2,000 $22,000 $12,000 3,000 2,500 1,500 2,000 2,000 $23,000.