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HomeMy WebLinkAboutResolution - 2003-R0311 - Contract For Audit Services - KMPG LLP - 08_06_2003 (2)Resolution No. 2003 RO311 August 6, 2003 Item No. 34 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock, a Contract for audit services per RFQ #080-03NK, by and between the City of Lubbock and KMPG LLP of Dallas, Texas, and related documents. Said Contract is attached hereto and incorporated in this resolution as if fully set forth herein and shall be included in the minutes of the City Council. Passed by the City Council this 6th day of August , 2003. ATTEST: rQQ Rebe ca Garza, City Secretary APPROVED AS TO CONTENT: C�AM Tommy Go r alez, In rim ity Manager APPROVED AS TO FORM: �. <z:- Richard K. Casner, First Assistant City Attorney gs/ccdocs/Res-Contract-Audit Services.res Aug 4, 2003 Resolution No. 2003—RO311 August 6, 2003 Item No. 34 THE STATE OF TEXAS AGREEMENT COUNTY OF LUBBOCK THIS AGREEMENT made and entered in this 6th day of August, 2003, between the CITY OF LUBBOCK, Lubbock County, Texas, hereinafter referred to as "CITY", and KMPG LLP, Dallas, Texas hereinafter referred to as "KPMG". WITNESSETH: THAT for and in consideration of the mutual covenants and promises hereinafter contained, it is agreed between the parties hereto as follows: KPMG will audit the CITY'S basic financial statements in accordance with generally accepted accounting principles; generally accepted auditing standards and the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the Single Audit Act Amendments of 1996; and the provisions of OMB Circulars, including but not limited to A-133, Audits of State and Local Govemments and Non -Profit Organizations. The audit conducted by KPMG, and any reports generated pursuant thereto, shall be in conformity with, and meet all requirements of, all applicable state, federal and local laws, regulations, statutes, rules, ordinances and policies. Said examination shall cover the fiscal year period from October 1, 2002 to September 30, 2003. The term of this Agreement shall be renewed for two (2) successive one (1) year terms, unless canceled by either party hereto by notice to the non -terminating party given no later than fifteen (15) days prior to the expiration of the applicable fiscal year. Fees for such services are as referenced in Section X. City may terminate contract (for any reason) upon 120 days written notice to KPMG. AGREEMENT -CITY & KPMG Page 1 Whenever notice from KPMG to City or City to KPMG is required or permitted by this Agreement and no other method of notice is provided, such notice shall be given by (1) actual delivery of the written notice to the other party by hand, (2) facsimile, or other reasonable means (in which case such notice shall be effective upon delivery), or (3) by depositing the written notice in the United States mail, properly addressed to the other party at the address provided in this article, registered or certified mail, return receipt requested, in which case such notice shall be effective on the third business day after such notice is so deposited. KPMG'S address and numbers for the purposes of such notice are: Attn: Bill Hanley KMPG LLP 717 North Harwood Street, Suite 3100 Telephone: (214) 840-2228 Fax: (214) 840-2174 The City's address and numbers for the purposes of such notices are: Attn: Chief Financial Officer City of Lubbock P.O. Box 2000 Lubbock, Texas 79457 Or physical address: 1625 13'�' Street Lubbock, Texas 79401 Telephone: (806) 775-2002 Facsimile: (806) 775-2051 Either party may change its address or numbers for purposes of notice by giving written notice to the other party, referring specifically to this Agreement, and setting forth such new address or numbers. The address or numbers shall become effective on the 15'h day after such notice is effective. AGREEMENT -CITY & KPMG Page 2 IV. KPMG'S management letter will include any reportable conditions and material structural or operational weaknesses identified in the system of which KPMG becomes aware as a result of obtaining an understanding of internal control and performing tests of internal control consistent with requirements of the standards and circular identified above. KPMG'S report on compliance will address errors, fraud, violations of compliance requirements and other responsibilities imposed by state and Federal statutes and regulations and assumed by contracts; and any state or Federal grant, entitlement of loan program questioned costs of which KPMG becomes aware, consistent with requirements of the standards and circulars identified above. V. KPMG shall make a prompt written report of all illegal acts or indications of illegal acts of which they become aware to the Audit Committee Chairman, the City Manager, Chief Financial Officer, and Director of Internal Audit for City of Lubbock. KPMG will notify City promptly if circumstances relating to the condition of City records and/or the availability of sufficient competent evidential matter were to arise during the course of KPMG'S work which in KPMG'S professional judgment prevents them from completing the audit. In such a situation, KPMG retains the unilateral right to take any course of action permitted by professional standards, including withdrawal from the engagement. VI. The City understands the financial statements and compliance matters are the responsibility of the City's management. Management has the primary responsibility for properly recording transactions in the records, for safeguarding assets, for preparing reliable financial statements and for complying with statutory, regulatory and contractual requirements. At the conclusion of the audit, KPMG will request certain written AGREEMENT -MY & KPMG Page 3 representations from the City as to the fairness of the presentation of the financial statements and all matters related thereto as well as compliance with Federal, state and contractual requirements. VII. In addition to KPMG'S reports on the City's financial statements, KPMG will also issue the following reports or types of reports as specified in OMB Circular A-133: • A report on the City's schedule of expenditures. • Reports on internal control related to the financial statements and major programs. • Reports on compliance with laws, regulations, and the provision of contracts or grant agreements. KPMG will report on any noncompliance, which could have a material effect on the financial statements, and any noncompliance which could have a direct and material effect on each major program. • A schedule of findings and questioned costs. KPMG shall make available a Partner or Manager to make a presentation and answer questions related to the audit in Lubbock to the City of Lubbock City Council, if requested by City, of the audit results. Vill. The component units whose financial statements are to be combined with and included as part of the City's general purpose financial statements are listed below: City Transit Management, Inc. dba Citibus Civic Lubbock, Inc. Marketing Entertainment Travel Tourism and Sports, Inc. Market Lubbock Economic Development Corporation dba Market Lubbock, Inc. KPMG understands that these engagements will be engaged and billed separately and are not considered to be covered by this engagement. AGREEMENT -CITY & KPMG Page 4 Ix. The working papers for this engagement are the property of KPMG. KPMG will be required to make working papers available upon request to City and to respond to reasonable inquiries of successor auditors and to allow successor to review working papers relating to matters of continuing audit significance. City also acknowledges and grants assent that representatives of the cognizant or oversight agency or their designee, other government audit staffs and the U.S. General Accounting Office shall have access to the audit working papers upon their request; and that KPMG shall maintain the working papers for a period of at least three years after the date of the report, or for a longer period if KPMG is requested to do so by the cognizant or oversight agency. During the course of KPMG'S engagement, KPMG may accumulate records containing data which should be reflected in the City's books and records. City will determine that all such data, if necessary, will be so reflected. Accordingly, City will not expect KPMG to maintain copies of such records in KPMG'S possession. X. The assistance to be supplied by City personnel, including the preparation of schedules and analyses of accounts, will be discussed and coordinated with the Director of Finance and/or Chief Accountant. The timely completion of this work will assist KPMG in performing the work efficiently. Accounting records will be ready for audit on a mutually agreed upon start date. KPMG'S fees are: Fiscal Year Anticipated Hours Not to Exceed Amounts 2003 1,240 $146,000 2004 1,240 $153,000 2005 1,240 $160,500 AGREEMENT -CITY & KPMG Page 5 KPMG's estimated out-of-pocket expenses are: Expenses Airfare $8,000 Hotel $8,500 Rental car $2,000 Meals, per diem $4,000 Miscellaneous typing & printing $2,500 Total Not to Exceed Expenses: $25,000 KPMG total compensation for each year of this Contract shall be a total of the not to exceed fee amounts above and the actual out of pocket expenses above; however, the expenses shall not exceed $25,000 each of the contract years. XI. In the event KPMG is requested or authorized by City of Lubbock, Lubbock, Texas or is required by government regulation, subpoena, or other legal process to produce KPMG'S documents or KPMG'S personnel as witnesses with respect to KPMG'S engagements for the City will, so long as KPMG is not a party to the proceeding in which the information is sought, reimburse for KPMG professional expenses, as well as the fees and expenses of KPMG'S counsel, incurred in responding to such requests. XI1. It is agreed by the City and KMPG LLP or any successors in interest that no claim by or on behalf of either party arising out of services rendered pursuant to this agreement shall be asserted more than three years after the date of the audit report or one year after the date of termination of KMPG LLP's services. XIII. The timeline of required schedules and audit work shall be jointly agreed -upon prior to the beginning of the fiscal year for which the audit is scheduled. XIV. This Agreement shall be governed by and construed in accordance with the laws AGREEMENT -CITY & KPMG Page 6 of the State of Texas. The parties hereto hereby irrevocably consent to the exclusive jurisdiction and venue of the courts of the State of Texas, County of Lubbock, for the purposes of all legal proceedings arising out of or relating to this Agreement or the actions that are contemplated hereby. XV. For a period of three years following final payment to KPMG under this engagement, KPMG shall maintain records that are necessary to substantiate the services provided by KPMG under this engagement, and shall make these records available upon request to the City of Lubbock. City. XVI. KPMG may not assign this Agreement without the prior written approval of the XVII. This Agreement binds and inures to the benefit of the City, KPMG, and their respective successors, legal representatives, and permitted assigns. XVIII. If any provision of this Agreement is ever held to be invalid or ineffective by any court of competent jurisdiction with respect to any person or circumstances, the remainder of this Agreement and the application of such provision to persons and/or circumstances other than those with respect to which it is held invalid or ineffective shall not be affected thereby. XIX. No amendment, modification, or alteration of the terms of this Agreement shall be binding unless such amendment, modification, or alteration is in writing, dated subsequent to this Agreement, and duly executed by KPMG and the City. AGREEMENT -CITY & KPMG Page 7 XX. This Agreement contains the Entire Agreement between KPMG and the City, and there are no other written or oral promises, conditions, warranties, or representations relating to or affecting the matters contemplated herein. CITY OF LUBBOCK ' `MARC OUAL, MAYOR ATTEST: m Rebecca Garza, City Secretary APPROVED AS TO CONTENT: KMPG LLP BY: BILL HANLElOrPARTNER WITNESSED BY: 4 44 j6mvLv64 Tommy Gonialez, Inferin-Obty Manager APPROVED AS TO FORM: n Smith, Engagement Senior Partner 6 Richard K. Casner, First Assistant City Attorney AGREEMENT -CITY & KPMG Page 8