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HomeMy WebLinkAbout1991-05-29 91-223 ORDERData 5-29-91 91 „V" Item No. 91-223 Item/Subject: Appointment of City Auditor FY1991 Responsible Department. Finance Commentary: Although Brooks 6 Carter, CPA's extended engagement concluded one year ago, and was extended for the audit of FY90 - we are requesting another single year extension of the engagement for the audit of FY91 and production of financial statements. This extension would allow the city to continue its correction of prob- lems and weaknesses wit��ppout bringing a new audit firm up to speed on the city's process And systems or losing ready access to the historical information in the B b C files. The terms are $25,000 for the audit; $5;000 for the federal Single -Audit Act report; conclusion of .field work and draft financials by 10/31/91 and periodic meetings of the auditors with the Finance Committee= Accounting Services would be provided at $45.00/hr for professional staff and $25.00/hr for para -professional staff. (May 15, 1991 Letter and May 16, 1991 Letter of Engagement) DIP11111M Hard Manager's Comments: I'� l_'r'a`�'Atf/�Va^NM'MllX4L/sN�"� s c;y,w,axe. Associated Information:Q�ga a Budget Approval FY 1992 Legal Approval D/ - /}ac .City s=;;.;tar Introduced For ®Passage Ll First First Reading Page — of ❑ Referral BY the City Coe W of As qty K8an0or ORDERED, MT The City Manager is authorized to engage the services of Brooks and Carter, CPA, 84 Harlow Street, Bangor, dor auditing the city's books and records for the fiscal year ending June 30, 1991 per the terms and conditions specified in the May 16, 1991 Letter of Engagement and the May 15, 1991 Letter Cutlining the Understanding of terms and conditions. 91-333 Aeeipied b Cowulw Cohen, any 29, 1991 d CITY OF BANGOR (TITLE) (Orba Appointment of City Auditor for By 1991 BY the City Coe W of As qty K8an0or ORDERED, MT The City Manager is authorized to engage the services of Brooks and Carter, CPA, 84 Harlow Street, Bangor, dor auditing the city's books and records for the fiscal year ending June 30, 1991 per the terms and conditions specified in the May 16, 1991 Letter of Engagement and the May 15, 1991 Letter Cutlining the Understanding of terms and conditions. SN City Cooncil Nay 29,1991 qa&g stp Amerdea 7 Yes 1 No Voting Yes Baldacci,Bragg, Cohsn,Prankel,Saxl,Stone, Sullivan Voting No Soemud AbseM Sswyer Amended as Follows CAP OF 545,000.00 ON ACCOUNTING SERVICES THE ACCOUNTING FIRM WILL BE MUMM W CONE BACK 113 PULL COUNCIL TO SPED MORE ACCOUNTM FIRM WILL SUBMIT A BILL HONTMLY TO THE FJWANCE COtUITTEE FOR REVIEW u�==•SP � c K L City Clerk 91-223 e R D E R Title, Appointment. of ...................................... City Auiditor for fy 1991 .................. e................... . �A%''/Aeeiged tto' .......MHT! -Wit!'-'!` .............. (uunCiNan Certified Public Accountants May 15, 1991 Mr. John Quartararo Pinna a Director City of Bangor 73 Barlow Street Bangor, NB 04401 Dear Mr. Quartararo: 91-223 Pursuant with our discussion today, this letter Sate forth our understanding of matters reviewed at lunch. Brooke and Carter will Perform the fiscal year June 30, 1991 audit of the general porpoce financial Statements of the City of Bangor for a fee of $25,000 in accordance with the term set forth inwor Standard a gagement letter, which is Attached. We will also mmeinthe schedule of federal financial assistruce untlss the Bingle Audit Act for an Additional fee of $5,000. Brooks and Carter will also provide aces nting assistance tc the City of Bangor an reelected by the City for a rate of $45 Per Professional staff hour and $25 per para -professional staff hour. The accounting Services will be conducted under the joint Supervision of m Brooks and Carter m nageent red the finance director of the City.t e ordering of these accounting 60xvidwe Brooks And Carter will require rtain degree of echaduling flexibility, which we understand is acceptable to the City. Not withstanding tha need for certain flexibility in the Scheduling of staff, we will make every effort to comply with the city -0 achaduli:g needs, and if necessary we will make provisions to assign certain staff full tied. Professionals aacigned to the City of Bangor audit engagement will include the following: Vaughn I. Mersey, Jr. CPA Brunagescat Partner Joseph I. deny CPA Quality Control Partner Rebecca 0. Phillipe CPA Senior Auditor Deborah A. Cyr CPA Senior Auditor other professional staff including a istants will be assigned as needed. The accounting services will be performed by Rebeeca Phillipe and supported by other professional staff as necessary. In Addition, para -professional staff will be utilized where feasible and as agreed to by the finance director. Bangor, Maine 04401 (20])94]-8568 Mr. John guartararo Page 1 May 15, 1991 As part of our engagement, we mould request that appropriate mambare of the enyagment teem, together with the finance director, meet periodically during the course of the a,yegment with the finance coupittea. The purpose of these meetings would As to inform the finance committee of the Statue of the engagamant(e) and issues identified which may need council resolution. On aaral o aeionS we have discussed deficiencies that exist within the City's Accounting System including the Overall structure of that System, duplication and patmKlal inefficiencies that may Saint within the eyStm's design, and interface of the City's general accmntin4 records with those Of the varlwe departments and enterprise operations. As you know, Brcoko and Carter's work paper files contain extensive informatim aWut the City'B accounting eyBtm. Bananas of Our knowledge of the Systm it might, therefore, be advisable to give consideration to a project designed Bpecifically to recommend and implment changes needed to improve that system. This project would be a separate eugagment, but would draw upon the knowledge base already Contained in our files and make eaxlmum use of your expertim. The extent Of the ecgogment would need to be defined based on the City'a objectives --ie complete Systems Study and modification r limited ecoPo as determined by the City. Brcoka and Carte[ would Perform Ouch an eagagement for a fixed [ate per hour. We look forward to providing Services to the City of Bangor and working with you to improve the City's accounting and management information vystms. After reviewing the contents of this letter, planes call with any questions that you, M Barrett, or measure of Council may have. Very Wt✓rru)l(/yXOure, Vaughn L. Harney 1 Certified Public Accountants any 16, 1991 Honorable Members of Council City of Bangor City Mall, 73 Earlier street Bangor, Maine 04401 We are pleased to Confirm our understanding of the mervicas we are to provide for the City of assignor, Maine for the year ended Are 30, 1991. Ge will audit the general purpose financial statements of the City of Bangor Mauve ee of and for the year ended June 30, 1991. our audit will be made in accordance with generally accepted auditing standards and will include [ of the accounting records of the City of eangur, Maine and other procedures we Consider necommary to enable us to express an unqualified opinion that the financial statements Are fairly presented, in all material reaps[., in conformity with generally accepted accounting principles. If our opinion is ether than u,pualified, we will fully dieaee the reasons with you in advance. Car procedures will include Geste of documentary evidence supporting the transactions recorded in thea counts, and may include teats of the physical existesa of inventories, and direct confirmation of ram ivables awl Certain aslant aerate and liabilities by correspondemme with selected individuals, creditors, Audi financial institutions. We will request written representations free year attorneys as part of the myagemeM. At the conclusion of our audit, era will also request certain written representations free you about the financial statemeate and related mattera. An audit includes examining, ona test basis, evidence supporting the nervous end dieCloeurae is thefinsuriel statements; therefore, Car audit will involve judgment about the banner of transactions to be examined and the Areas to be tested. Also, we will plan and perform the audit to obtain reasonable asouranne, about whether the financial statements are free of material misstatement. rose ves, becomes of the Concept of reasonable assurance and because we will not pazform a detailed examination of all transactions, there to a risk that material errors, irregularities, or illegal Acte, including fraud or defalratione may exist and not be detected by us. We will advice you, however, of any matters of that nature that rows to nor attention. Bangor, Maine 04401 (20])94]-8588 aureeponelbility as auditors is limited to the Period covered by ou dd dit adome not extend to matters that might grime during any later periods for which we are act engaged as auditors. We understand that you will provide us with the basic information requirad for me audit and that you ar responsible for the accuracy and completeness of that information. we will advise you about appropriate eountLp principles and their application and will assist in the preparation of your financial statement, but the responsibility for preparation of the financial statements remains with you. This responsibility includes the maintansom of adequate records and related internal control structure Policies and proceduree, the selection and application of amm sting principles, and the safeguarding of Meseta. We understand that year ®ployeee will type all cash or Other confirmations we request god will Innate any Invoices selected by us for testing. We will provide a list of schedules, prepared by client (PRC), that year accounting department will be expected to prepare for our staff. Our audit is not specifically designed and cannot be called on to disclose reportable conditions, that in, significant deficiemies in the design o Operation of the internal central structure. however, during the audit, if we become aware of Both reportable conditions or ways that we believe management practices can be improved, we will ecammunicate them to you in a separate letter. r fees for these services will be basad an the actual time spent at our standard hourly rates, plus Other out-of-pocket mete such as typing, postage, etc. Our standard hourly rates very according to the degree of responsibility involved and the experience level of the person]. assigned to your audit. Our imricae for theme fund will be raMered as work programmes and are Payable on presentation. In a mrdame with our firm Policies, work may be suspended if your account becomes 30 days o mom overdue add may not be redumad until your Become is paid in full. Based an Our Preliminary estimates, the fee should approximate $25,000. This estimate is boded on anticipated commration from your Personnel and the assumption that mempmted circumstances will not be encountered during the audit. The PBC schedules mentioned amore ars not imluded in e anticipated audit fee, and should we be required to prepare these Schedules, it will be billed separately at our standard hourly rates. If significant additional time in necessary to easier you with closing the fiscal year or Performing the audit, we will disease It with you before we Lour additional torts. NB appreciate the opportunity to he of service to the city of Bangor. Maine and believe this letter accurately soomeriaee the significant toren of oor engagement. If you have any questions, plea" 1X us an e. If you agree with the terms of our engagement as deemIDed in this latter, please sign the enclosed copy and return it to us. very truly yours, Aw&-� "SPONSE: This letter Currently sets forth the understanding of the City of Bangor, Maine.