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99-050 RESOLUTION NO. 99-50 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF AVENTURA, FLORIDA, RETAINING THE FIRM OF RACHLIN COHEN & HOLTZ TO PERFORM INDEPENDENT AUDITING SERVICES FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1999; AUTHORIZING THE CITY MANAGER TO EXECUTE THE ATTACHED ENGAGEMENT LETTER; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, in 1996, the City of Aventura followed procedures contained in state law to select a firm to perform independent auditing services, and; WHEREAS, at the conclusion of that process the firm of Rachlin Cohen & Holtz was selected to perform independent auditing services for the City of Aventura for a period of up to five years and has performed said services for the fiscal years ended September 30, 1996, 1997 and 1998, and; WHEREAS, Rachlin Cohen & Holtz has proposed to continue to provide said services for the fiscal year ended September 30, 1999, and; WHEREAS, City staff has reviewed the proposed engagement letter and associated fees and recommends approval of same. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF AVENTURA, FLORIDA, THAT: Section 1: The firm of Rachlin Cohen & Holtz is hereby retained to perform independent auditing services for the City of Aventura for the fiscal year ending September 30, 1999. Section 2: The City Manager of the City of Aventura, Florida, is hereby authorized to execute the Engagement Letter, attached hereto as Exhibit "A" for auditing services by and between the City and Rachlin Cohen & Holtz. Resolution No. 99-50 Page 2 Section 3: This resolution shall become effective immediately upon its adoption. The foregoing resolution was offered by Commissioner Beskin who Rogers- moved its' adoption. The motion was seconded by CommissionerLiberc and upon being put to a vote, the vote was as follows: Commissioner Arthur Berger yes Commissioner Jay R. Beskin yes Commissioner Ken Cohen Commissioner Harry Holzberg yes Commissioner Jeffrey M. Perlow yes Vice Mayor Patricia Rogers-Libert Mayor Arthur I. Snyder yes PASSED AND ADOPTED THIS 7th day of September, 1999. ~MAYO'~R ATTEST: ' TERESA a. SOR~,KA, CMC/AAE CITY CLERK ~ APPROVED AS TO LEGAL SUFFICIENCY: CITY AT-~'O RNEY CITY OF AVENTURA 2999 N.E. 19 I ST STREET SUITE S00 September 23, 1999 JEFFREY [VI. PERLOW Mr. G. Jerry Chiocca PATRICIA ROGERS-LIBERT Rachlin Cohen & Holtz ERIC NI. $OROKA One Southeast Third Avenue, Tenth Floor c,~, M^,^~e, Miami, FL 33131 Re: Engagement Letter Dear Jerry: Enclosed are two executed originals of the engagement letter for the 1998/99 fiscal year audit of the City of Aventura. As we discussed, the fee portion of the letter was changed pursuant the City Commission motion. Since there was a pen and ink change, I need you to initial page 4. After initialing page 4, please forward one original of the entire document to me for the City's records. Please feel free to call me at (305) 466-8920 with any questions or concerns. Harry M. Kilgore ~ Director Finance Support Services HMK/mn FSS413-99 cc:Teresa M. Soroka, CMC/AAE City Clerk PhONe: 305-466-8900 ' FAX: 305-466-8939 Rachlin Cohen & Holtz LLP Certified Pub c Accountants & Consultants August 13, 1999 Mr. Eric Soroka, City Manager City of Aventura 2999 N.E. 191st Street Aventura, Florida 33180 Dear Mr. Soroka: We are pleased to confirm our understanding of the services we am to provide the City of Aventura, Florida (the City). We will audit the general purpose financial statements of the City as of and for the fiscal year ended September 30, 1999. The objective of our audit is thc expression of an opinion as to whether your general purpose financial statements are fairly presented, in all material respects, in conformity with generally accepted accounUng principles and Our audit will bc conducted 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, and will include tests of the accounting records of the City and other procedures we consider necessary to enable us to express such an opinion. If our opinion on the general purpose financial statements is other than unqualified, xve 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 grm~t agreements, noncompliance with, ~vhich could have a material effect on the financial statements as required by Government ,'tuditing ,5'landards. Managemcat 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 arc 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 usc or disposition, that transactions are executed in accordance with ~nanagement's authorizations and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles 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 arc 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 thc safeguarding of assets. One Southeast Third Avenue, Tenth Floor, Miami, Florida 33131 0 'Ib1305-377 4228 0 Fax 305-377-8331 700 Southeast Th2rd Avenue, Third Floor, Ft. Lauder&b, Florida 33316 o Tel 954-525-1040 · Fax 954-525-2004 47(/Columbia Drive, Suite D-201, W~,st Palm Beach, Florida 33409 0 Tel 561-686-0200 ° Fax 5t, 1-(,86 0248 www rchcpa.com Mr. Eric Soroka, City Manager August 13, 1999 Page 2 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 caused by error or fraud. Because of the concept of reasonable 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 errors, fraud, or other illegal acts that are immaterial to the general purpose financial statements. However, we will inform you of any material errors and any fraud that comes to our attention. We will also inform you of any other illegal acts 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 later periods for which we are not engaged as auditors Our procedures will includc tests of documentary evidcnce supporting the transactions recorded in thc accounts, and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondcnce 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 complies with laws, regulations, contracts, and agreements is the responsibility of management. As part of obtaining reasonable assurance about whether thc general purpose financial statements are free of material misstatement, we will perform tests of the City's compliance with applicable laws and regulations and the provisions of contracts and agreements. Ho~vever, the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an opinion. Because many computerized systems use only txvo digits to record the year in date fields (for example, the year 1998 is recorded as 98), such systems may not be able to process dates accurately in the year 2000 and after. The effects of this problem will vary from system to system and may adversely affect an cntity's operations as well as its ability to prepare financial statements. An audit of financial statements conducted in accordance with generally accepted auditing standards is not designed to detect whether an entity's computerized hardware, sozeo,vare, equipment containing, or affected by embedded computer chips, or other systems will bc able to accurately process dates containing "9's" in the fields, containing four digits, pertaining to the ycar 2000 and bcyond or to recognize February 29, 2000 as a leap year day', (collectively, '~Year 2000 Compliant"). Further, we have no responsibility with regard to the City's efforts to diagnose, test or make its information systcms, or any other systems, Year 2000 Compliant or provide assurance on whether the City has addressed or will be able to address all of thc Mr. Eric Soroka, City Manager Au[mst 13, 1999 Page 3 affected systems on a timely basis. Management acknowledges that it is responsible for assessment and mmediation of issues concerning the Year 2000, including assessing the extent that thc City's vendors, suppliers, customers and any other third parties might experience computer or other related problems that could affect the City's operation. If not addressed timely, the City recognizes that its operation and ability to prepare financial statements would be adversely affected. 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's general purpose financial statcmcnts. 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 general purpose 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 general purpose 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 intcrnal control and, accordingly, no opinion will be expressed. An audit is not designed to provide assurance on internal control or to idcntifi,., 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 Atnerican 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. We understand that your employees xvill prepare all cash or other confirmations we request and will locate any invoices selected by us for testing. Thc workpapers for this cngagement are the propcrty of Rachlin Cohen & Holtz LLP and constitute confideutial information. However, we may be requested to make certain workpapcrs available to regulatory agencies pursuant to authority given to it by law or regulation. If requested, access to such workpapers will be provided under the supervision of Rachlin Cohen & Holtz LLP personnel. Furthermore, upon request, we may provide photocopies of selected workpapers to the regulatory agency. The regulatory agency may intend, or decide, to distribute the photocopies or information contained therein to others, including other govcrnmental agencies. Mr. Eric Soroka, City Manager August 13, 1999 Page 4 ' ' Our fees for these services .... sti,,-:ated to, ra,~,~ b~t~,,~,~ $22,500 i act is renewable on a yearly basis at the option of the City of Aventura. Our standard hourly rates vary according to the degree of responsibility' involved and the experience level of the personnel assigned to your audit. Our invoices for these fees will be rendered as the work progresses and are payable on presentation. Thc above fee is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. If significant additional time is necessm3', we will discuss it with you and arrivc at a new fee estimate before we incur the additional costs. If additional time is necessa~ due to an increase in the number of funds (i.e., increase in level of services providcd by the City), significant changes in Governmental Accounting Standards Board Pronouncements and other similar matters that are not contemplated by this letter, wc will discuss these matters with you prior to commencement of the work. If the City is required to have a Single Audit pcrfonned in accordance with generally accepted auditing standards; the standards for financial audits contained iu Government Auditing Standards, issued by the Comptroller General of the United States; the Single Audit Act Amcndments of 1996; and the provisions of OMB Circular A-133, Audits c~/'States, Local Governments, and Nor~-Prqfit Organizations, during thc periods covered by this letter, we will prepare an addendum to this letter indicating the additional services and fees necessary to complete the engagement. If additional services arc rcquired or requcstcd as a result of the City receiving grant funds under the Florida Appropriations Act, we will prepare an addendum to this letter indicating the additional services and fees neccssary to complete thc engagement. We appreciate the opportunity to be of continued service to you 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 rctum it to us. Sincerely, C~Jer'~Ch~ C PA~ Director - Miami Enclosure Mr. Eric Soroka, City Manager Augnst 13, 1~99 Page 5 APPROVED: This letter correctly sets forth the understanding of thc City of Aventura, Florida. Title: C '~ 99X88~88360~engagement let~er