HomeMy WebLinkAboutResolution - 3444 - Contract - Coopers & Lybrand CPA- Auditing Services - 09_13_1990Resolution 0 3444 .
September 13, 1990
Item #26
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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
financial services by and between the City of Lubbock and Coopers & Lybrand,
Certified Public Accountants, attached herewith, which shall be spread upon
the minutes of the Council and as spread upon the minutes of this Council
shall constitute and be a part of this Resolution as if fully copied herein
in detail.
Passed by the City Council this
ATTEST:
, city z)ecre-cary
APPROVED AS TO CONTENT:
Robert Massengale, As istant City
Manager for Financial Services
APPROVED AS TO FORM:
Dona m u. vanuiver, FirSt ASsistan
City Attorney
1.3th day of Septeber , 1990.
AB. McMINN, 14AYOR
THE STATE OF TEXAS §
COUNTY OF LUBBOCK §
THIS AGREEMENT made and entered into this fifth day of
September 1990, between the City of Lubbock, Lubbock County,
Texas, hereinafter referred to as City, and Coopers & Lybrand,
Certified Public Accountants, Lubbock, Texas, hereinafter referred
to as C&L.
WITNESSETH:
THAT for and in consideration of the mutual covenants and
promises hereinafter contained, it is agreed between the parties
hereto as follows:
I.
C&L will audit the City of Lubbock's general purpose
financial statements 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, the Single Audit Act of
1984 and the provisions of OMB Circular A-128, Audits of State and
Local Governments. The objective of an audit is the expression of
an opinion concerning whether the financial statements present
fairly, in all material respects, the financial position of the
City of Lubbock, and the results of its operations and cash flows
of its Proprietary Funds in conformity with generally accepted
accounting principles.
II.
Said examination shall cover the fiscal year period from
October 1, 1989 to September 30, 1990 with the exception of the
Lubbock Firemen's Relief and Retirement Fund, which will cover the
twelve-month period from January 1, 1990 to December 31, 1990.
The auditing services shall be extended for an additional four
periods, as stated above, unless cancelled by either party
hereto. Fees for such services will be mutually agreed to
annually. In the event of cancellation, notice shall be given to
the other party on or before May 15 of the year cancellation is to
be effective.
t
As a part of their audit, C&L will consider the City of
Lubbock's internal control structure over financial transactions
and assess control risk, as required by generally accepted
auditing standards, for the purpose of establishing a basis for
determining the nature, timing and extent of auditing procedures
necessary for expressing C&L's opinion concerning the financial
statements and not to provide assurance on the internal control
structure. C&L will also, as discussed later, consider and test
the City of Lubbock's internal control structure policies and
procedures used in administering federal financial assistance
programs. The management of the City of Lubbock is responsible
for establishing and maintaining an internal control structure.
In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs for internal control structure policies and
procedures. The objectives of an internal control structure are
to provide management with reasonable, but not absolute, assurance
that assets are safeguarded against loss from unauthorized use or
disposition, and that transactions are executed in accordance with
management's authorization and recorded properly to permit the
preparation of financial statements in accordance with generally
accepted accounting principles. Because of the inherent
limitations in any internal control structure, errors or
irregularities may nevertheless occur and not be detected. Also
projection of any evaluation of the structure to future periods is
subject to the risk that procedures may become inadequate because
of changes in conditions or that the effectiveness of the design
and operation of policies and procedures may deteriorate.
IV.
As required by government auditing standards, C&L will
prepare a separate written report on C&L's understanding of the
City of Lubbock's internal control structure and the assessment of
control risk made as part of the financial statement audit. The
report will include: (1) the scope of C&L's work in obtaining an
understanding of the internal control structure and in assessing
the control risk, (2) the City of Lubbock's significant internal
controls or control structure including the controls established
to insure compliance with laws and regulations that have a
material impact on the general purpose financial statements, and
(3) the reportable conditions, including the identification of
material weaknesses, identified as a result of C&L's work in
understanding and assessing control risk.
V.
C&L's audit will include procedures designed to provide
reasonable assurance of detecting errors and irregularities that
are material to the general purpose financial statements. As City
management is aware, however, there are inherent limitations in
the auditing process. For example, audits are based on the
concept of selective testing of the data being examined and are,
therefore, subject to the limitation that such matters, if they
exist, may not be detected. Also, because of the characteristics
of irregularities, including attempts at concealment through
collusion and forgery, a properly designed and executed audit may
not detect a material irregularity.
Similarly, in performing their audit C&L will be aware of the
possibility that illegal acts may have occurred. However, it
should be recognized that C&L's audit provides no assurance that
illegal acts generally will be detected, and only reasonable
assurance that illegal acts having a direct and material effect on
the determination of general purpose financial statement amounts
will be detected. C&L will inform the City with respect to
illegal acts or material errors that come to C&L's attention
during the course of their audit.
VI.
Compliance with laws, regulations, contracts, and grants
applicable to the City of Lubbock is the responsibility of the
City of Lubbock's management. As part of obtaining reasonable
assurance about whether the financial statements are free of
material misstatement, C&L will perform tests of the City of
Lubbock's compliance with certain provisions of laws, regulations,
contracts, and grants. However, except for major federal
financial assistance programs, C&L's objective is not to provide
an opinion on overall compliance with such provisions.
VII.
As required by government auditing standards, C&L will
prepare a separate written report on their test of compliance with
applicable laws and regulations. This report will contain a
statement of positive assurance on those items which were tested
for compliance, negative assurance on those items not tested, and
a description of all material instances of noncompliance.
VIII.
As required by OMB Circular A-128 C&L will consider and test
the City of Lubbock's internal control structure policies and
procedures used in administering federal financial assistance
programs. Based on this consideration and these tests, C&L will
assess risk and determine the nature, timing, and extent of
testing compliance with requirements that, if not complied with,
could have a material effect on a major federal financial
assistance program. Also, in connection with C&L's audit of the
financial statements or C&L's consideration of the internal
control structure over federal financial assistance programs, if
C&L selects a transaction for testing that is applicable to a
nonmajor program, C&L will also test it generally for compliance
with laws and regulations.
In accordance with OMB Circular A-128, C&L will prepare the
following separate written reports:
Schedule of Federal Financial Assistance
Internal Control Structure Relevant to Federal
Financial Assistance Programs
Compliance with Specific Requirements of Major
Federal Financial Assistance Programs
Compliance with General Requirements of Major Federal
Financial Assistance Programs
Compliance with Requirements of Nonmajor Federal
Financial Assistance Programs for Items Tested and
Negative Assurance about Items Not Tested
IX.
C&L will also issue separate reports on Civic Lubbock,
Inc., Lubbock Board of City Development, Lubbock Firemen's Relief
and Retirement Fund and the City's Electrical Enterprise Fund.
X.
At the conclusion of the engagement, the City of
Lubbock's management will provide to C&L a representation letter
that, among other things, will confirm management's responsibility
for the preparation of the financial statements in conformity with
generally accepted accounting principles, the availability of
financial records and related data, the completeness and
availability of all minutes of the City of Lubbock meetings, and
absence of irregularities involving management or those employees
who have significant roles in the control structure.
XI.
C&L understands that their reports on the internal
control structure as part of the financial audit and on compliance
with laws and regulations are intended for the information of the
management and others within the organization. This restriction
is not intended to limit the distribution of this report which is
a matter of public record.
XII.
Coopers & Lybrand, as well as all other major accounting
firms, participates in a "peer review" program, covering their
auditing and accounting practices. This program requires that
once every three years C&L subjects their quality assurance
practices to an examination by another accounting firm. As part
of the process, the other firm will review a sample of C&L's
work. It is possible that the work C&L performs for the City may
be selected by the other firm for their review. If it is, they
are bound by professional standards to keep all information
confidential. If the City objects to having the work done for the
City reviewed by the peer reviewer, the City will notify C&L in
writing.
XIII.
Coopers & Lybrand's fee, including out-of-pocket
expenses, will be $78,000 for the 1990 audit of the City of
Lubbock's general purpose financial statements and for performance
of the Single Audit of Federal Financial Assistance Programs for
the period specified in II above. Monthly progress billings will
be generated on the basis of hours of work completed.
XIV.
It is further agreed between the parties that for the
purposes of determining the place of the agreement and the law
governing the same, that this agreement is entered into in the
City and County of Lubbock, State of Texas, and shall be governed
by the laws of the State of Texas.
CITY OF LUBBOCK
. C. McMinn
Mayor
COOPERS & LYBRAND
-'el.fw of 4�
John W. Burdette
Partner
ATTEST: WITNESSED BY:
- Ra ette Boyd Ben F. Robinson
City Secretary Partner
APPROVED AS TO CONTENT:
o ert Massengale
Assistant City Manager for
Financial Services
APPROVED AS TO FORM:
al�GVandi;er
First Assistant City Attorney