HomeMy WebLinkAboutReso 2007-1106
RESOLUTION NO. 2007- II O~
A RESOLUTION OF THE CITY OF SUNNY ISLES BEACH,
FLORIDA, AWARDING RFP NO. 07-04-01 TO AND
ENTERING INTO AN AGREEMENT WITH RACHLIN
COHEN & HOL TZ FOR PROFESSIONAL AUDITING
SERVICES, FOR A THREE (3) YEAR PERIOD, IN THE
AMOUNTS OF $41,250.00 FOR FISCAL YEAR 2006/2007;
$42,488.00 FOR FISCAL YEAR 2007/2008; AND $43,763.00
FOR FISCAL YEAR 2008/2009, ATTACHED HERETO AS
EXHIBIT "A", BASED ON THE PRICING, TERMS, AND
CONDITIONS LISTED IN THE BID RESPONSE, ATTACHED
HERETO AS EXHIBIT "B"; AUTHORIZING THE MAYOR
TO EXECUTE SAID AGREEMENT; AUTHORIZING THE
CITY MANAGER TO DO ALL THINGS NECESSARY TO
EFFECTUATE "'HE TERMS OF THE AGREEMENT;
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, Section 4.10 of the Sunny Isles Beach Charter ("Charter") requires an
independent audit of the City accounts on at least an annual basis; and
WHEREAS, Rachlin Cohen & Holtz (RCH) has provided professional auditing services for
the City, wherein the current agreement with RCH expired upon completion of the audit for Fiscal
Year 2005/06; and
WHEREAS, in accordance with industry best practices as established by the Government
Finance Officers Association (GFOA), the City issued Request for Proposals No. 07-04-01 for
Professional Audit Services, for which five (5) responses were received; and
WHEREAS, staff reviewed all the proposals received and have determined that the bid
response from Rachlin Cohen & Holtz, attached hereto as Exhibit "B", is the lowest most responsive
responsible bid on terms of municipal experience in the State of Florida; and
WHEREAS, the City wishes to enter into an agreement with RCH to provide annual auditing
services for a three (3) year period, in the amounts of $41,250.00 for Fiscal Year 2006/2007,
$42,488.00 for Fiscal Year 2007/2008, and $43,763.00 for Fiscal Year 2008/2009, attached hereto as
Exhibit "A", and exclude the single audit fee which is not being approved at this time.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF SUNNY ISLES BEACH, FLORIDA, AS FOLLOWS:
Section 1. Incorporation of Recitals. The recitals set forth in this resolution are incorporated
herein by reference as if fully set forth herein.
R2007- Auditor Rachlin Cohen Holtz.Doc
Section 2. Award of RFP and Approval of Agreement. The City Commission hereby awards
RFP No. 07-04-01 to and enters into an agreement with Rachlin Cohen and Holtz, LLP, for
professional auditing services for a three (3) year period, in the amounts of $41 ,250.00 for Fiscal
Year 2006/2007, $42,488.00 for Fiscal Year 2007/2008, and $43,763.00 for Fiscal Year 2008/2009,
attached hereto as Exhibit "A", based on the pricing, terms, and conditions listed in the bid response,
attached hereto as Exhibit "B". Excluding the single audit fee, which is not being approved at this
time.
Section 3
Authorization ofMavor. The Mayor is hereby authorized to execute said Agreement.
Section 4 Authorization of City Manager. The City Manager is hereby authorized to do all
things necessary to effectuate the terms of the Agreement.
Section 5.
Effective Date. This Resolution is effective upon passage.
PASSED AND ADOPTED this 21 st day of June 2007.
ATTEST: .
.&:~.~~
Jim,e A. Hines, C~C, City Clerk
. .
Moved by: C -OW\ ~~ GOOt:;,M'PrAl
Seconded by: Co~ 6R~21 tJ
Vote: S-D
Mayor Edelcup
Vice Mayor Thaler
Commissioner Brezin
Commissioner Goodman
Commissioner Iglesias
~(Yes)
V (Yes)
V(Y es)
~(Yes)
~(Yes)
_(No)
_(No)
_(No)
_(No)
_(No)
R2007- Auditor Rachlin Cohen Holtz.Doc
2
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CITY OF SUNNY ISLES BEACH
RACHLIN COHEN & HOLTZ CONSULT ANT AGREEMENT
CONTRACT NO: C0607-093
THIS CONTRACTU~L AGREEMENT (hereinafter referred to as the "Agreement")
is made in triplicate, this -:2. \ ~ day of ~u. to ~ , 2007, by and between the CITY OF
SUNNY ISLES BEACH, Florida, (hereinafter referred to as "City"), and RACHLIN COHEN
& HOL TZ, LLP, (hereinafter referred to as "Consultant") whose Federal 1.0. # is
RECIT ALS
WHEREAS, the City is in need of a professional auditing consultant to audit the basic
financial statements of the City as of and for the fiscal years ending September 30, 2007, 2008
and 2009 and to provide an opinion on the conformity of this material with accounting principles
generally accepted in the United States, ("Services); and
WHEREAS, the Consultant will also provide additional documentation, including
reporting on internal control, that will be subject to the auditing procedures applied in the audit
of the basic financial statements, ("Services"), as more fully described in Attachment "A"; and
WHEREAS, the Consultant will provide these auditing Services for the City for the
years ended September 30, 2007, 2008 and 2009, as more fully described in Attachment "A";
and
WHEREAS, the Consultant represents that it' has expertise to perform these Services;
and
WHEREAS, the City desires to retain Consultant to continue to perform these Services
which Consultant provided to the City for the fiscal years 2007, 2008 and 2009.
NOW THEREFORE, in consideration of the foregoing and for the mutual covenants,
representations and warranties and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties agree as follows:
1. RECITALS. The Recitals set forth above are hereby incorporated into this Agreement
and made a part hereof for reference.
2. CONSULTING SERVICES. Consultant shall audit the basic financial statements of the
City as of and for the fiscal years ending September 30, 2007, 2008 and 2009 and will
provide additional documentation to the City, as more fully described in Attachment "A",
attached hereto and made a part hereof.
C0607-093 Rachlin Cohen & Holtz Consultant Agreement
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City of Sunny Isles Beach
18070 Collins Avenue, Sunny Isles Beach, Florida 33160
(305) 947-0606 phone (305) 949-3113 Fax
3. TERM. Subject to the provisions relating to the termination of this Agreement as set forth
in Paragraph 8 hereunder, the term of this Agreement shall begin upon the execution of this
Agreement and shall end upon the completion of Services described in Attachment "A", and
may be extended as necessary, in writing by the parties hereto.
The required Schedule for the 2007 Fiscal Year Audit will be for the firm to submit Twenty-
five (25) copies of the audit report no later than February 28, 2008. A representative will
present the findings at the March commission meeting. For subsequent audits, the audit
copies shall be delivered no later than January 31 and the findings presented at the February
commission meeting.
4. COMPENSATION. Payment to Consultant for all charges under this Agreement shall be
in accordance with this Agreement and a schedule of charges reflected in Attachment "A".
The estimated fees for this engagement will be $41,250.00 for fiscal year 2007, $42,488.00
for fiscal year 2008, and $43,763.00 for fiscal year 2009 (excluding Federal or Florida Single
Audit Act requirements - as reflected in Attachment "A")
5. STAFFING CHANGES. Engagement partners, managers, other supervisory staff and
specialists initially assigned to this Agreement between City and Consultant may be changed
if those personnel leave the firm, are promoted or are assigned to another office. These
personnel may also be changed for other reasons with the express written permission of the
City of Sunny Isles Beach. However, in either case, the City of Sunny Isles Beach retains the
right to approve or reject replacements who are subsequently assigned to this Agreement
between the City and Consultant.
6. INDEPENDENT CONTRACTOR RELATIONSHIP. The Consultant is an independent
contractor and shall be treated as such for all purposes. Nothing contained in this Agreement
or any action of the parties shall be construed to constitute or to render the Consultant an
employee, partner, agent, shareholder, officer or in any other capacity other than as an
independent contractor other than those obligations which have been or shall have been
undertaken by the City, Consultant shall be responsible for any and all of its own expenses in
performing its duties as contemplated under this Agreement. The City shall not be
responsible for any expense incurred by the Consultant. The City shall have no duty to
withhold any Federal income taxes or pay Social Security services and that such obligations
shall be that of the Consultant, other than those set forth in this Agreement. Consultant shall
furnish its own transportation, office and other supplies as it determines necessary in carrying
out its duties under this Agreement.
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C0607-093 Rachlin Cohen & Holtz Consultant Agreement
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City of Sunny Isles Beach
18070 Collins Avenue, Sunny Isles Beach, Florida 33160
(305) 947-0606 phone (305) 949-3113 Fax
7. OWNERSHIP OF DOCUMENTS AND EQUIPMENT. All documents prepared by
the Consultant pursuant to this Agreement and related Services to this Agreement are
intended and represented for the ownership of the City only. Any other use by Consultant or
other parties shall be approved in writing by the City. If requested, Consultant shall deliver
the documents to the City within fifteen (15) calendar days.
8. INDEMNIFICATION. Consultant agrees to indemnify and hold harmless, the City,
its officers, agents, and employees from, and against, any and all claims, actions, liabilities,
losses and expenses including, but not limited to, attorney's fees for personal, economic or
bodily injury, wrongful death, loss of or damage to property, at law or in equity, which may
arise or may be alleged to have risen from the negligent acts, errors, omissions or other
wrongful conduct of the Consultant, agents or other personal entity acting under Consultant's
control in connection with the Consultant's performance of Services pursuant to that
Agreement and to that extent the Consultant shall pay such claims and losses and shall pay
all such costs and judgments which may issue from any lawsuit arising from such claims and
losses including wrongful termination or allegations of discrimination or harassment, and
shall pay all costs and attorneys' fees expended by the City in defense of such claims and
losses including appeals. The parties agree that ten percent (10%) of the total compensation
is a specific consideration from the City to the Consultant for this indemnity.
9. TERMINATION.
A. If, through any cause within reasonable control, the Consultant shall fail to fulfill
in a timely manner or otherwise violate any of the covenants, agreements or
stipulations material to this Agreement, the City shall have the right to terminate
the Services then remaining to be performed. Prior to the exercise of its option to
terminate for cause, the City shall notify the Consultant of its violation of the
particular terms of the Agreement and grant Consultant ten (10) days to cure such
default. If the default remains uncured after ten (10) days the City may terminate
this Agreement.
(i.) In the event of termination, all finished and unfinished documents, data and
other work product prepared by Consultant (and sub consultant(s)) shall be
delivered to the City and the City shall compensate the Consultant for all
Services satisfactorily performed prior to the date of termination, as provided
in Paragraph 4 herein.
(ii.) Nothwithstanding the foregoing, the Consultant shall not be relieved of
liability to the City for damages sustained by it by virtue of a breach of the
Agreement by Consultant and the City may reasonably withhold payment to
Consultant for the purposes of set-off until such time as the exact amount of
damages due the City from the Consultant is determined.
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C0607-093 Rachlin Cohen & Holtz Consultant Agreement
S\Y>
City of Sunny Isles Beach
18070 Collins Avenue, Sunny Isles Beach, Florida 33160
(305) 947-0606 phone (305) 949-3113 Fax
I
B.
Termination for Convenience of City. The City may, for its convenience and
without cause terminate the Services then remaining to be performed at any time
by giving Consultant ten (10) days written notice. The terms of Paragraphs A(i)
and A(ii) shall be applicable hereunder.
C. Termination for Insolvency. The City also reserves the right to terminate the
remaining Services to be performed in the event the Consultant is placed either in
voluntary or involuntary bankruptcy or makes any assignment for the benefit of
creditors.
1 O. ARBITRATION. It is the intention of the parties that whenever possible, if a dispute or
controversy arises hereunder then such dispute or controversy shall be settled by arbitration
in accordance with the procedures, rules and regulations of the American Arbitration
Association. The decision rendered by the Arbitrator shall be final and binding upon the
parties and judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction. Arbitration shall be held in Miami-Dade County, Florida. All costs of
arbitration and attorneys' fees incurred by the parties shall be paid by the non-prevailing
party or, if neither party prevails on the whole, each party shall be responsible for a portion
of the costs of arbitration and their respective attorneys' fees as may be determined by the
court on confirmation.
11. WAIVER OF RIGHT TO JURY TRIAL. Each of the parties hereto hereby knowingly,
voluntarily and intentionally, waive the right which any may have to a jury trial in respect of
any action, proceeding, litigation or counterclaim based hereon or arising out of, under, on or
in connection with this agreement or any course of conduct, course of dealing, statements
(whether verbal or written) or actions of either of party.
12. CONFIDENTIAL INFORMATION. The Consultant shall not, either during the term of
this Agreement or any time for a period of TEN (10) years subsequent to that date upon
which the Consultant shall leave the employment of the City for any reason whatsoever,
disclose to any person or entity, other than in the discharge of the duties of the Consultant
under this Agreement, any information which the City designates in writing as "confidential."
As a violation by the Consultant of the provisions of this Section could cause irreparable
injury to the City and there is no adequate remedy at law for such violation, the City shall
have the right, in addition to any other remedies available to it at law or in equity, to enjoin
the Consultant in a court of equity for violating such provisions.
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C0607-093 Rachlin Cohen & Holtz Consultant Agreement
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Ii
City of Sunny Isles Beach
18070 Collins Avenue, Sunny Isles Beach, Florida 33160
(305) 947-0606 phone (305) 949-3113 Fax
13. NOTICES. All notices and communications hereunder shall be in writing and shall be
deemed given when sent postage prepaid by registered or certified mail, return receipt
requested and, if intended for City to A. John Szerlag, City Manager with a copy to Hans
Ottinot, City Attorney, at City of Sunny Isles Beach, 18070 Collins A venue, Sunny Isles
Beach, Florida 33160, and if intended for the Consultant, shall be addressed to G. Jerry
Chiocca, CPA, Rachlin Cohen & Holtz, LLP, One Southeast Third Avenue, Tenth Floor,
Miami, FL 33131, Telephone (305) 377-4228. Fax (305) 377-8331.
14. GOVERNING LAW. This Agreement shall be governed by and construed in accordance
with the laws of the State of Florida. Venue shall be in Miami-Dade County, Florida.
15. AUDIT. The Consultant shall make available to the City or its representative all required
financial records associated with the Agreement for a period of THREE (3) years.
16. NON-DISCRIMINATION. The Consultant agrees to comply with all local and state civil
rights ordinances and with Title VI of the Civil Rights Act of 1984 as amended, Title VIII of
the Civil Rights Act of 1968 as amended, Title 1 of the Housing and Community
Development Act of 1974 as amended, Section 504 of the Rehabilitation Act of 1973, the
Americans with Disabilities Act of 1990, the Age Discrimination Act of 1975, Executive
Order 11063, and with Executive Order 11248 as amended by Executive Orders 11375 and
12086.
The Consultant will not discriminate against any employee or applicant for employment
because of race, color, creed, religion, ancestry, national origin, sex, disability or other
handicap, age, marital/familial status, or status with regard to public assistance. The
Consultant will take affirmative action to insure that all employment practices are free from
such discrimination. Such employment practices include but are not limited to the following:
hiring, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff,
termination, rates of payor other forms of compensation, and selection for training, including
apprenticeship. The Consultant agrees to post in conspicuous places, available to employees
and applicants for employment, notices to be provided by the City setting forth the provisions
of this non-discrimination clause.
The Consultant agrees to comply with any Federal regulations issued pursuant to compliance
with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 708), which prohibits
discrimination against the handicapped in any Federally assisted program.
17. CONFLICT OF INTEREST. The Consultant agrees to adhere to and be governed by the
Miami-Dade County Conflict of Interest Ordinance Section 2-11.1, as amended; and by the
City of Sunny Isles Beach Ordinance No. 99-82, which are incorporated by reference herein
as if fully set forth herein, in connection with the Agreement conditions hereunder.
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C0607-093 Rachlin Cohen & Holtz Consultant Agreement
SIB
City of Sunny Isles Beach
18070 Collins Avenue, Sunny Isles Beach, Florida 33160
(305) 947-0606 phone (305) 949-3113 Fax
The Consultant covenants that it presently has no interest and shall not acquire any interest,
direct or indirectly which should conflict in any manner or degree with the performance of
the Services. The Consultant further covenants that in the performance of this Agreement, no
person having any such interest shall knowingly be employed by the Consultant. No member
of, or delegate to the Congress of the United States shall be admitted to any share or part of
this Agreement or to any benefits arising therefrom.
18. CONFLICTING PROVISIONS. The terms and conditions in this Agreement supersede
any other conflicting provisions that are contained in any other document.
19. ENTIRE AGREEMENT. This Agreement and Attachment "A", which is expressly
incorporated herein by reference, contain the entire agreement of the parties, and may be
amended, waived, changed, modified, extended or rescinded only by a writing signed by the
party against whom any such amendment, waiver, change, modification, extension and/or
rescission is sought.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in triplicate
on the day and year first written above.
WITNESSES:
RACHLIN COHEN & HOLTZ, LLP
BY: ~ ~ eJ.~
lJ. Jt] y Chi cca, CPA, Partner
.
.~~~~E,~!-:Q:' , .A . 1 '
~ BY~ '~~'M ~
~. Jane A,'Hines, CMC, City Clerk
TO FORM AND
CY
t, City Attorney
6
C0607-093 Rachlin Cohen & Holtz Consultant Agreement
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Cnhen
&Holtz
Accountants Advisors
May 25, 2007
Honorable Mayor ,City Commissioners
City of Sunny Isles Beach
18070 Collins Avenue
Sunny isles Beach, FL 33160
We are pleased to confirm our understanding of the services we are to provide the City of Sunny Isles
Beach for the years ended September 30, 2007, 2008 and 2009 with an additional 2 year option. We will
audit the financial statements of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information, which collectively comprise the entity's basic financial
statements, of the City of Sunny Isles Beach as of and for the years ended September 30, 2007, 2008 and
2009. Accounting standards generally accepted in the United States provide for certain required
supplementary information (RSI), such as management's discussion and analysis (MD&A), to accompany
the City of Sunny Isles Beach's basic financial statements. As part of our engagement, we will apply
certain limited procedures to the City's RSI. These limited procedures will consist principally of inquiries
of management regarding the methods of measurement and presentation, which management is
responsible for affirming to us in its representation letter. Unless we encounter problems with the
presentation of the RSI or with procedures relating to it, we will disclaim an opinion on it. The following
RSI is required by generally accepted accounting principles and will be subjected to certain limited
procedures, but will not be audited:
1. Management's Discussion and Analysis.
2. Schedule of Funding Progress.
3. Schedule of Employer Contributions.
Supplementary information other than RSI, such as combining and individual fund financial statements,
also accompanies the City of Sunny Isle Beach's basic financial statements. We will subject the following
supplementary information to the auditing procedures applied in our audit of the basic financial
statements and will provide an opinion on it in relation to the basic financial statements:
1. Schedule of Expenditures of Federal Awards.
2. Schedule of Expenditures of State Financial Assistance.
3. Combining Fund Financial Statements.
The following additional information accompanying the basic financial statements will not be subjected
to the auditing procedures applied in our audit of the financial statements, and for which our auditor's
report will disclaim an opinion.
1. Introductory Section.
2. Statistical Section.
rB
~
Rachlin Cohen & Holtz LlP
One Southeast Third Avenue. Tenth Floor. Miami, Florida 33131 · Phone 305.377.4228 · Fax 305.377.8331 · www.rachlin.com S \ B
An Independent Member of Baker Tilly lniernational
Honorable Mayor, City Commissioners
City of Sunny Isles Beach
May 25, 2007
Page 2
Audit Objectives
The objective of our audit is the expression of opinions as to whether your financial statements are fairly
presented, in all material respects, in conformity with U.S. generally accepted accounting principles and
to report on the fairness of the additional information referred to in the first paragraph when considered in
relation to the financial statements taken as a whole. The objective also includes reporting on-
. Internal control related to the financial statements and compliance with laws, regulations,
contracts, agreements, and grants, noncompliance with which could have a material effect
on the financial statements in accordance with Government Auditing Standards.
. Internal control related to major programs and an opinion (or disclaimer of opinion) on
compliance with laws, regulations, and the provisions of contracts or grant agreements that
could have a direct and material effect on each major program in accordance with the
Single Audit Act Amendments of 1996 and OMB Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations and the Florida Single Audit Act and Chapter
10.550, Rules of the Auditor General of the State of Florida.
The reports on internal control and compliance will each include a statement that the report is intended for
the information and use of the commission, management, specific legislative or regulatory bodies, federal
awarding agencies, and if applicable, pass-through entities and is not intended to be and should not be
used by anyone other than these specified parties.
Our audit will be conducted in accordance with U.S. generally accepted auditing standards; 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 Circular A-
133, the Florida Single Audit Act and Chapter 10.550, Rules of the Auditor General of the State of
Florida, and will include tests of accounting records, a determination of major program(s) in accordance
with Circular A-133, and the Florida Single Audit Act, and other procedures we consider necessary to
enable us to express such an opinion and to render the required reports. If our opinions on the financial
statements or the Single Audit compliance opinions is other than unqualified, we 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 opinions, we may decline to express opinions or to issue a report as a result of this
engagement.
Management Responsibilities
Management is responsible for establishing and maintaining internal controls, including monitoring
ongoing activities; for the selection and application of accounting principles; for the fair presentation in
the financial statements of the respective financial position of the governmental activities, the business-
type activities, , each major fund, and the aggregate remaining fund information of the City of Sunny Isles
Beach and the respective changes in financial position and, where applicable, cash flows in conformity
with U.S. generally accepted accounting principles; and for federal award program compliance with
I II
· C:Oherl
&l-loltz
~\~
Honorable Mayor, City Commissioners
City of Sunny Isles Beach
May 25, 2007
Page 3
applicable laws and regulations and the provisions of contracts and grant agreements. Management is
responsible for the basic financial statements and all accompanying information as well as representations
contained therein.
You are responsible for management decisions and functions. As part of the audit, we will assist with the
preparation of the draft of your financial statements, schedule of expenditures of federal awards and state
financial assistance, and related notes. In accordance with Government Auditing Standards, you will be
required to review and approve those financial statements prior to their issuance and have a responsibility
to be in a position in fact and appearance to make an informed judgment on those financial statements.
Further, you are required to designate a qualified management-level individual to be responsible and
accountable for overseeing our services.
Management is responsible for making all financial records and related information available to us,
including any significant vendor relationships in which the vendor has the responsibility for program
compliance and for the accuracy and completeness of that information. Management's responsibilities
include adjusting the financial statements to correct material misstatements and for confirming to us in the
representation letter that the effects of any uncorrected misstatement aggregated by us during the current
engagement and pertaining to the latest period presented are immaterial, both individually and in the
aggregate, to the financial statements taken as a whole.
You are responsible for the design and implementation of programs and controls to prevent and detect
fraud, and for informing us about all known or suspected fraud or illegal acts affecting the government
involving (1) management, (2) employees who have significant roles in internal control, and (3) others
where the fraud or illegal acts could have a material effect on the financial statements. Your
responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud or
illegal acts affecting the government received in communications from employees, former employees,
grantors, regulators, or others. In addition, you are responsible for identifying and ensuring that the entity
complies with applicable laws, regulations, contracts, agreements, and grants. Additionally, as required by
OMB Circular A-133 and Chapter 10.550 rules of the Auditor General, it is management's responsibility
to follow up and take corrective action on reported audit findings and to prepare a summary schedule of
prior audit findings and a corrective action plan.
Management is responsible for establishment and maintenance of a process for tracking the status of audit
findings and recommendations. Management is also responsible for identifying for us previous audits or
other engagements or studies related to the objectives discussed in the Audit Objectives section of this
letter. This responsibility includes relaying to us corrective actions taken to address significant findings
and recommendations resulting from those audits or other engagements or studies. You are also
responsible for providing management's views on our current findings, conclusions, and
recommendations, as well as your planned corrective actions, and the timing and format related hereto.
Cohen,
.&f-ioltz
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Honorable Mayor, City Commissioners
City of Sunny Isles Beach
May 25, 2007
Page 4
Audit Procedures-General
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 from
(1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or
governmental regulations that are attributable to the entity or to acts by management or employees acting
on behalf of the entity.
Because an audit is designed to provide reasonable, but not absolute assurance and because we will not
perform a detailed examination of all transactions, there is a risk that material misstatements or
noncompliance may exist and not be detected by us. In addition, an audit is not designed to detect
immaterial misstatements or violations of laws or governmental regulations that do not have a direct and
material effect on the financial statements or major programs. However, we will inform you of any
material errors and any fraudulent financial reporting or misappropriation of assets that comes to our
attention. We will also inform you of any violations of laws or governmental regulations that come to our
attention, unless clearly inconsequential. We will include such matters in the reports required for a Single
Audit. 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 include tests of documentary evidence supporting the transactions recorded in the
accounts, and may include tests of the physical existence of inventories, and direct confirmation of
receivables and certain other assets and liabilities by correspondence 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.
Audit Procedures-Internal Controls
Our audit will include obtaining an understanding of the entity and its environment, including internal
control, sufficient to assess the risks of material misstatement of the financial statements and to design the
nature, timing, and extent of further audit procedures. 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 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 financial
statements. Our tests, if performed, will be less in scope than would be necessary to render an opinion on
internal control and, accordingly, no opinion will be expressed in our report on internal control issued
pursuant to Government Auditing Standards.
As required by OMB Circular A-133 and Chapter 10.550 Rules of the Auditor General, we will perform
tests of controls over compliance to evaluate the effectiveness of the design and operation of controls that
we consider relevant to preventing or detecting material noncompliance with compliance requirements
II J : I I ; I , COhen
\1 ,I lll.::&Holtz
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Honorable Mayor, City Commissioners
City of Sunny Isles Beach
May 25,2007
Page 5
applicable to each major federal award program. However, our tests will be less in scope than would be
necessary to render an opinion on those controls and, accordingly, no opinion will be expressed in our
report on internal control issued pursuant to OMB Circular A-133 and Chapter 10.550 Rules of the
Auditor General.
An audit is not designed to provide assurance on internal control or to identify significant deficiencies.
However, during the audit, we will communicate to management and those charged with governance
internal control related matters that are required to be communicated under professional standards,
Government Auditing Standards, OMB Circular A-133, and Chapter 10.550 Rules of the Auditor General.
Audit Procedures-Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we will perform tests of City of Sunny Isles Beach's compliance with applicable laws and
regulations and the provisions of contracts and agreements, including grant agreements. However, the
objective of those procedures will not be to provide an opinion on overall compliance and we will not
express such an opinion in our report on compliance issued pursuant to Government Auditing Standards.
OMB Circular A-133 and Chapter 10.550 Rules of the Auditor General require that we also plan and
perform the audit to obtain reasonable assurance about whether the auditee has complied with applicable
laws and regulations and the provisions of contracts and grant agreements applicable to major programs.
Our procedures will consist of test of transactions and other applicable procedures described in the OMB
Circular A-i33 Compliance Supplement for the types of compliance requirements that could have a direct
and material effect on each of the City of Sunny Isles Beach's major programs. The purpose of those
procedures will be to express an opinion on the City of Sunny Isles Beach's compliance with
requirements applicable to each of its major programs in our report on compliance issued pursuant to
OMB Circular A-133 and the Florida Single Audit Act.
Audit Administration, Fees, and Other
We may from time to time, and depending on the circumstances, use third-party service providers in
serving your account. We may share confidential information about you with these service providers, but
remain committed to maintaining the confidentiality and security of your information. Accordingly, we
maintain internal policies, procedures, and safeguards to protect the confidentiality of your personal
information In addition, we will secure confidentiality agreements with all service providers to maintain
the confidentiality of your information and we will take reasonable precautions to determine that they
have appropriate procedures in place to prevent the unauthorized release of your confidential information
to others. In the event that we are unable to secure an appropriate confidentiality agreement, you will be
asked to provide your consent prior to the sharing of your confidential information with the third-party
service provider. Furthermore, we will remain responsible for the work provided by any such third-party
service providers.
We understand that your employees will prepare all cash, accounts receivable, or other confirmations we
request and will locate any documents selected by us for testing.
,1111 GJherz
· l.'II.1 :&J-{O!tz
~\~
Honorable Mayor, City Commissioners
City of Sunny Isles Beach
May 25, 2007
Page 6
At the conclusion of the engagement, we will complete the appropriate sections of and sign the Data
Collection Form that summarizes our audit findings. We will provide our reports to the City of Sunny
Isles Beach; however, it is management's responsibility to submit the reporting package (including
financial statements, schedule of expenditures of federal awards, summary schedule of prior audit
findings, auditors' reports, and a corrective action plan) along with the Data Collection Form to the
designated federal clearinghouse and, if appropriate, to pass-through entities. The Data Collection Form
and the reporting package must be submitted within the earlier of 30 days after receipt of the auditors'
reports or nine months after the end of the audit period, unless a longer period is agreed to in advance by
the cognizant or oversight agency for audits. At the conclusion of the engagement, we will provide
information to management as to where the reporting packages should be submitted and the number to
submit.
The audit documentation for this engagement is the property of Rachlin Cohen & Holtz LLP and
constitutes confidential information. However, pursuant to authority given by law or regulation, we may
be requested to make certain audit documentation available to the City of Sunny Isles Beach or its
designee, a federal agency providing direct or indirect funding, or the U.S. Government Accountability
Office for purposes of a quality review of the audit, to resolve audit findings, or to carry out oversight
responsibilities. We will notify you of any such request. If requested, access to such audit documentation
will be provided under the supervision of Rachlin Cohen & Holtz LLP personnel. Furthermore, upon
request, we may provide copies of selected audit documentation to the aforementioned parties. These
parties may intend, or decide, to distribute the copies or information contained therein to others, including
other governmental agencies.
The audit documentation for this engagement will be retained for a minimum of five years after the report
release or for any additional period requested by the the City of Sunny Isles Beach. If we are aware that a
federal awarding agency, pass-through entity, or auditee is contesting an audit finding, we will contact the
party(ies) contesting the audit finding for guidance prior to destroying the audit documentation.
We estimate that our fees for this engagement will be $41,250 for $2007; $42,488 for 2008 and $43,763
for 2009 (excluding Federal or Florida Single Audit Act requirements - see below). Our hourly rates vary
according to the degree of responsibility involved and the experience level of the personnel assigned to
the audit. The above fee is based on anticipated cooperation from your personnel and the assumption that
unexpected circumstances will not be encountered during the audit. If additional time is required because
of unexpected circumstances or for changes in the requirements of the Governmental Accounting
Standards Board or our professional auditing standards or changes in the funds structure of the City, we
will discuss these circumstances with you and arrive at a new fee estimate before we incur the additional
costs.
In addition, if the City is required to undergo an audit in accordance with the Federal Single Audit Act
and OMB Circular A-133, Audits of States, Local Governments, and Not-for-Profit Organizations
Receiving Federal Awards during any year of this contract, the additional fee will be $6,500 for the year
ended September 30, 2007; $6,500 for the year ended September 30,2008 and $7,000 for the year ended
September 30,2009. This fee is dependent on the number of federal programs that have to be tested as a
. !. GJherl
." 1, : ~ I ~~'I&rloltz
s\~
, ,
Honorable Mayor, City Commissioners
City of Sunny Isles Beach
May 25, 2007
Page 7
major program in accordance with the requirements of the Federal Single Audit Act and OMB Circular
A-133. If there is more than one (1) program to be tested as a major program, as determined under the
requirements ofOMB Circular A-133, we will discuss the additional fees with you.
In addition, if the City is subject to the Florida Single Audit Act, the additional fee will be $6,500 for the
year ended September 30, 2007; $6,500 for the year ended September 30, 2008 and $7,000 for the year
ended September 30, 2009 This fee is dependent on the number of state programs that have to be tested
as a major program in accordance with the requirements of the Florida Single Audit Act. If there is more
than one (1) program to be tested as a major program, as determined under the requirements of the Florida
Single Audit Act, we will discuss the additional fees with you.
Our invoices for these fees will be rendered as the work progresses, and are payable on presentation. In
accordance with our firm policies, should any invoices remain unpaid for more than thirty days, we
reserve the right to defer providing any additional services until all outstanding invoices are paid. A late
payment charge of I % per month will be added to all unpaid balances after thirty days. You agree that
we are not responsible for the impact on the City of any delay that results from such non-payment by you.
We acknowledge your right to terminate our services at any time, and you acknowledge our right to
resign at any time (including instances where in our judgment, our independence has been impaired or we
can no longer rely on the integrity of management), subject in either case to our right to payment for
charges incurred to the date of termination or resignation.
It is our goal to maintain a constructive and positive relationship with you. If for any reason you are
dissatisfied with the quality or costs of our services, please let us know so we can discuss and, hopefully,
rectify the problem. Should we be unable to amicably resolve any such dispute, we believe a prompt and
fair resolution, without the time and expense of formal court proceedings, would be in our mutual
interests. To this end, we both agree that any controversy (including fee disputes and malpractice claims)
we may have shall be submitted to binding arbitration to be conducted in Florida before the American
Arbitration Association (AAA) in accordance with the Commercial Arbitration Rules of the AAA. We
both waive any right to bring a court action, or to have a jury trial, and agree that the party prevailing in
any arbitration shall be entitled to recover from the non-prevailing party its reasonable attorney's fees and
costs, including fees and costs which might be incurred in litigation related to the arbitration. In
accordance with our firm's policy, the terms of this engagement letter are subject to approval by our
internal Client Acceptance Committee.
Government Auditing Standards require that we provide you with a copy of our most recent external peer
review report and any letter of comment, and any subsequent peer review reports and letters of comment
received during the period of the contract. Our most recent peer review report has been provided to you.
: Coherl
I i ': &Holtz
s,<o
^ _,._,.,.. .-,." .....I-~. A .-J...r:" ._-"44"
Honorable Mayor, City Commissioners
City of Sunny Isles Beach
May 25, 2007
Page 8
It is our intention to present the financial statements to the City Commission during the meetings in
February.
In addition, the City has the right to approve changes in the staffing of the engagement throughout the
time of the engagement.
This contract is renewable at the option of the City. We appreciate the opportunity to be of continued
service to the City of Sunny Isles Beach 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 return it to us.
Sincerely,
il.LAAJ a.-.-..:.
~~ Chiocca, CPA
Partner
RESPONSE:
This letter correctly sets forth the understanding of the City of Sunny Isles Beach
By:
Title:
Date:
F:\07\11680 Single Audit Engagement Letter
. I~ I I I GJhen
h. ~\ ~ JllI11 &Holtz
~\~
^ ._.. " .-~....... ._.~.....~. ,-, A ..-1,-,; C'.......rl:"
City of Sunny Isles Beach
18070 Collins Avenue
Sunny Isles Beach, Florida 33160
(305) 947-0606 City Hall
(305) 949-3113 Fax
(305) 947-2150 Building Department
(305) 947-5107 Fax
City Commission
Norman S. Edelcup, Mayor
Lewis J. Thaler, Vice Mayor
Roslyn Brezin, Commissioner
Gerry Goodman, Commissioner
Danny Iglesias, Commissioner
A. John Szerlag, City Manager
Hans Ottinot, City Allorney
Jane A. Hines, City Clerk
MEMORANDUM
TO: The Honorable City Commission
Via: A. John Szerlag, City Manager
FROM: Douglas Haag, Assistant City Manager-Finance
DATE: June 21, 2007
RE: PROPOSALS FOR AUDIT SERVICES
RECOMMENDATION:
Approve the attached resolution and agreement with Rachlin Cohen & Holtz for annual auditing
services for the next three years - beginning with FY 2006-07. There is an option for an
additional two years for a total of five. However, the City has the option of renewing each year.
f:.."",a,{ \.11\\ \)~ Clp~\-Op~~J \~ ~ ZOOl-()Q) \.;uJ'it.t tOY' aeet \(}-SI3 - 53;1..OY)WlIf-'
BACKGROUND:
In accordance with industry best practices as established by the Government Finance Officers
Association (GFOA), in April, 2007 the City issued an RFP for auditing services. The current
agreement with Rachlin Cohen & Holtz expired upon completion of the audit for FY 2005-06.
The following five firms submitted proposals:
Keefe, McCullough & Co., LLP
Alberni Cabarello & Castellanos
BKR Garcia & Company
Grau & Associates
Rachlin Cohen & Holtz
Each of the firms submitted quality proposals and are licensed to do business in the State of
Florida. All firms are deemed independent and having no conflict of interest that would impeded
their ability to issue an audit on behalf of the City. All firms demonstrated an adequate audit
approach and methodology as well as producing professional management letters and some
CAFR experience.
However, of the five firms, one firm stood out in terms of municipal experience in the State of
Florida. The City's existing auditors - Rachlin Cohen & Holtz - performed 27 municipal audits
Page 2
in 2006. For these 27 clients, Rachlin Cohen & Holtz has performed a total of 215 audits. The
next closest firm was Keefe, McCullough & Co., LLP with 12 municipal audit clients and a total
of 81 audits for those clients. The total municipal audit hours for Rachlin Cohen & Holtz in
2006 was 19,560 as compared to 4,815 for Keefe, McCullough & Co., LLP.
The other firms responding to the RFP had 6 or less municipal clients in 2006.
Following is a summary of the scoring criteria that was used in evaluating the five proposals:
EVALUATION OF AUDIT PROPOSALS
CRITERIA MAX KMC ACC BKR GRAU RCH
1 Mandatory
a) FL Licensed &
independent 0 0 0 0 0 0
b) No conflict 0 0 0 0 0 0
c) Followed format 0 0 0 0 0 0
d) External QC report 0 0 0 0 0 0
2 Technical Quality
a) Expertise & experience
(1) FL local govt
experience 30 15 10 5 10 25
(2) Quality 30 20 15 10 15 25
b) Audit approach
(1) Adequacy 25 15 20 20 20 20
(2) Mgmt letter 10 10 10 10 10 10
(3) CAFR experience 5 5 5 5 5 5
TOTAL 100 65 60 50 60 85
Total no. city audits 12 6 3 5 31
Total no. County audits incl above incl above incl above incl above incl above
Total no. GAS audits last year 90 26 31 220 55
GFOA member? Y Y Y Y Y
Top 100 firms? Y
Total staff 50 27 24 15 140
Boca
Location Fort Laud Coral Gables Miami Raton Fort Laud
Years in business 35 30 52
Page 3
Following is a tabulation of the annual audit fees, estimated audit hours and hourly rates
proposed by each firm:
TABULATION OF AUDIT PROPOSALS
YEAR AVERAGE KMC ACC BKR GRAU RCH
2007 $40,190 $37,500 $28,500 $62,000 $31,700 $41,250
2008 $42,390 $40,000 $30,000 $65,000 $32,800 $44,150
2009 $44,490 $42,500 $32,000 $67,000 $33,700 $47,250
TOTAL $127,070 $120,000 $90,500 $194,000 $98,200 $132,650
HOURS AVERAGE
2007 340.8 450 269 380 210 395
2008 348.4 475 282 380 210 395
2009 353.6 500 283 380 210 395
RATE AVERAGE
2007 $121.56 $83.33 $105.95 $163.16 $150.95 $104.43
2008 $125.92 $84.21 $106.38 $171.05 $156.19 $111.77
2009 $130.90 $85.00 $113.07 $176.32 $160.48 $119.62
KMC - Keefe, McCullough & Co., LLP
ACC - Alberni Cabarello & Castellanos
BKR - BKR Garcia & Company
GRAU - Grau & Associates
RCH - Rachlin Cohen & Holtz
Page 4
Finally, The following local government client information was provided by Rachlin Cohen &
Holtz:
LOCAL GOVERNMENT AUDIT CLIENTS -
RCH
2000
TYPE NAME # YEARS POPULATION HOURS
City North Miami Beach 28 35,000 900
City North Miami 12 50,000 800
Town Bal Harbour 5 3,000 300
Village Key Biscayne 15 9,000 300
City Dania Beach 3 20,000 600
City Hialeah 10 188,000 1,200
City Homestead 15 27,000 810
City Lake Worth 2 35,000 1,020
City Marathon 4 10,000 300
City Miami 3 359,000 2,000
City Miami Gardens 3 101,000 260
City Miramar 10 73,000 700
City Sunny Isles Beach 10 12,000 390
City Indian Creek Village 5 33 220
County Miami-Dade 4 407,600 1,415
Water & Sewer
Department
16
City Miami Shores Village 15 10,000 500
Town Lauderdale-By- The-Sea 8 3,000 300
Town South Palm Beach 5 1,000 150
Village Golf 10 228 150
Village Palmetto Bay 5 25,000 200
Village Pinecrest 12 19,000 270
Village Tequesta 6 5,000 350
Village Wellington 4 38,000 500
City Florida City 12 8,800 475
Town Cutler Bay 1 37,000 200
Town Bay Harbor Islands 3 5,200 350
Town Lantana 5 9,526 400
TOTALS 27 215 1,491,403 15,060
AVG 8 55,237 558
District Northern Palm Beach 10 N/A 750
County Improvement
District
County Broward County 2 N/A 4,500
County Broward County Sheriff's 2 N/A 350
Office
(separate report)
County Broward County Property 2 N/A 150
Appraiser's Office
(separate report)
Citv of Sunnv Isles Beach
Bid Opening
Request for Proposal No. 07-04-01
Professional Auditing Services
18070 Collins Avenue, 4th floor, Sunny Isles Beach, FL 33160
Opening Date and Time: Friday, May 4th, 2007, 10:00 a.m.
PRESENT: Jane A. Hines, CMC, City Clerk
Linda Dosal, Assistant Finance Director
5 responses to Bid No. 07-03-02 were received: (Fee for single audit would he
negotiated. )
1.
BKR Garcia & Company
Attn: Pablo Llerena, CPA &
Manuel M. Garcia, CPA
1110 Brickell Avenue, Suite 901
Miami, Florida 33131
Phone No.: 305-373-0123
( 1 original and 4 copies received)
Base Bid Amount 2007: $62.000.00
Base Bid Amount 2008: $65.000.00
Base Bid Amount 2009: $67.000.00
2. Keefe, McCullough & Co., LLP . ( 1 original and 4 copies received)
Attn: Cynthia L. Calvert, CPA/Partner & Base Bid Amount 2007: $37.500.00
William G. Benson, CP A/Partner Base Bid Amount 2008: $40.000.00
6550 North Federal Highway, Suite 410 Base Bid Amount 2009: $42.500,00
Ft. Lauderdale, Florida 33308
Phone No.: 954-771-0896
5.
3.
Rachlin, Cohen & Holtz
Attn: G. Jerry Chiocca, CPA
One Southeast Third Avenue, 10th Floor
Miami, Florida 33131
Phone No.: 305-377-4228
4.
Grau & Associates
Attn: Antonio Grau, Jr., CPA
2700 North Military Trail, Suite 350
Boca Raton, Florida 33431
Phone No.: 561-994-9299
Alberni Caballero & Castellanos, LLP
Attn: Nestor Caballero, CPA
4649 Ponce de Leon Blvd, Suite 404
Coral Gables, Florida 33146
Phone No.: 305-662-7272
Submitted by: I r"....
~::A~
Jane A. Hines, CMC, City Clerk
( 1 original and 4 copies received)
Base Bid Amount 2007: $41.250.00
Base Bid Amount 2008: $44.150.00
Base Bid Amount 2009: $47.250.00
( 1 original and 4 copies received)
Base Bid Amount 2007: $31.700.00
Base Bid Amount 2008: $32.800.00
Base Bid Amount 2009: $33.700.00
( 1 original and 4 copies received)
Base Bid Amount 2007: $28.500.00
Base Bid Amount 2008: $30.000.00
Base Bid Amount 2009: $32.000,00
City of Sunny Isles Beach
18070 Collins Avenue
Sunny Isles Beach, Florida 33 160
City Commission
Norman S. Edelcup, Mayor
Lewis J. Thaler, Vice Mayor
Roslyn Brezin, Commissioner
Gerry Goodman, Commissioner
Danny Iglesias, Commissioner
(305) 947-0606 City Hall
(305) 947-2150 Building Department
(305) 949-3113 Fax
A. John Szerlag, City Manager
Hans Ottinot, City Attorney
Jane A. Hines, CMC, City Clerk
August 6, 2007
G. Jerry Chiocca, CPA
Rachlin Cohen & Holtz, LLP
1 SE 3 rd A venue, 10th floor
Miami, Florida 33131
Re: Agreement with Rachlin Cohen & Holtz, LLP for Auditing Services
Dear Mr. Chiocca:
At its regular meeting of June 21, 2007, the Sunny Isles Beach City Commission adopted
Resolution No. 2007-1106, which approved an agreement with Rachlin Cohen &.Holtz, LLP, for
auditing services for a three-year period. Enclosed is a copy of the approving resolution and an
original Agreement for your files.
Please contact Assistant City Manager/Finance Doug Haag (305) 792-1701 regarding
performance of this agreement.
Thank you.
Very truly yours,
~l\~
Jane A. Hines, CMC
City Clerk
Enclosures
c: A. John Szerlag, City Manager
Hans Ottinot, City Attorney
Doug Haag, Assistant City Manager/Finance