HomeMy WebLinkAboutReso 2005-758
RESOLUTION NO. 2005- '758
A RESOLUTION OF THE CITY OF SUNNY ISLES BEACH,
FLORIDA, APPROVING AN AGREEMENT WITH RACHLIN
COHEN & HOLTZ FOR PROFESSIONAL AUDITING
SERVICES, ATTACHED HERETO AS EXHIBIT" A", IN THE
AMOUNTS OF $34,000.00 FOR FISCAL YEAR 2004;
$35,700.00 FOR FISCAL YEAR 2005; AND $37,500.00 FOR
FISCAL YEAR 2006; AUTHORIZING THE CITY MANAGER
TO NEGOTIATE AND EXECUTE THE AGREEMENT
ATTACHED AS EXHIBIT "A"; 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, via Resolution No. 98-81, the City Commission accepted staffs ranking and
contracted Rachlin Cohen & Holtz (RCH) to provide professional auditing services for the City; a.nd
WHEREAS, via Resolution No. 2001-401 the City again contracted with RCH for auditing
services for the City; and
WHEREAS, RCH has submitted a Letter Agreement to provide auditing services for the
City, attached hereto as Exhibit "A".
NOW THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF SUNNY ISLES BEACH, FLORIDA, AS FOLLOWS:
Section 1. Approval of Agreement. The Agreement from Rachlin Cohen and Holtz, LLP, for
professional auditing services in the amount of$34,000.00 for fiscal year 2004; $35,700.00 for fiscal
year 2005; and $37,500.00 for fiscal year 2006, attached hereto as Exhibit "A," be, and the same, is
hereby approved.
Section 2 Authorization of City Manager. The City Manager is hereby authorized to execute the
Letter Agreement attached hereto as Exhibit "A", and to do all other things necessary to effectuate
the intent ofthis Resolution.
Section 3.
Effective Date. This Resolution is effective upon passage.
PASSED AND ADOPTED this 13th day of January 2005.
R200S-Rachlin Cohen Holtz Auditor Agreement.Doc
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Moved by: ~~\~~ (OY\J€tf... 0=;oo~mA-Al
Seconded by: CYt\~!\O~Le 6~E.21AJ
Vote: S-o
Mayor Ede1cup
Vice Mayor Thaler
Commissioner Brezin
Commissioner Goodman
Commissioner Iglesias
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FIRST ADDENDUM TO AGREEMENT BETWEEN CITY OF SUNNY ISLES BEACH
AND RACHLIN COHEN & HOLTZ
THIS ADDENDUM, EXECUTED THIS I ~ DAY OF ~PrNU A-R.. 'f , 2005,
shall be an integral part of the service agreement. In the event that any terms or conditions contained
herein conflict with the basic agreement, the terms and conditions of this addendum shall prevail.
1. Rachlin Cohen & Holtz ("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, 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. The parties agree that ten percent (10%) of the total
compensation is a specific consideration from the City to the Consultant for this indemnity.
IN WITNESS WHEREOF, the parties hereto have executed this document as of the date mentioned
above.
WITNESS:
RACHLIN COHEN & HOLTZ
By:
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li. J Chi ca, CP A, Partner
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Print Name: J;fd/~w r:erMQya
ATT~ST:
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CITY OF SUNNY ISLES BEACH,
a municipal corporation ofthe State of Florida
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. "'JaneA. Hines, City Clerk
By:
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Addendum to Rachlin Cohen & Holtz.
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RECEIVED
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City 0' Sunny Isl88 Seach
Office 0' the City Manager
March 15,2004
Mr. Christopher Russo, City Manager
City of Sunny Isles Beach
17070 Collins Avenue, Suite 250
Sunny Isles Beach, FL 33166
Dear Mr. Russo:
As part of our continuing engagement with the City of Sunny Isles Beach, Florida (the City), we are
pleased to confirm our understanding of the services we are to provide to the City for the fiscal year
ended September 30, 2004, 2005 and 2006. We will audit the basic financial statements of the City as of
and for the fiscal year ending September 30, 2004, 2005 and 2006. The document we submit to you will
include the following additional information that will be subjected to the auditing procedures applied in
our audit of the basic financial statements.
1. Management's Discussion and Analysis
2. Combining and individual fund statements and schedules
3. Required Supplementary Information.
4. Schedule of expenditures of federal awards and state financial assistance.
Audit Objectives
The objective of our audit is the expression of an opinion as to whether your basic financial statements are
fairly presented, in all material respects, in conformity with accounting principles generally accepted in
the United States 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, and the
provisions of contracts or grant agreements, 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-B3, 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 City Commission, management, specific legislative or regulatory bodies,
federal and state 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 auditing standards generally accepted in the United
States; 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
Rachlin Cohen & Holtz UP
One Southeast Third Avenue . Tenth Floor . Miami, Florida 33131 . Phone 305.377.4228 . Fax 305.377.8331 . www.rachlin.com
An Independent Member of Baker Tilly International
S I E
MIAMI · FORT LAUDERDALE. WEST PALM BEACH. STUART
Mr. Christopher Russo, City Manager
City of Sunny Isles Beach
March 15,2004
Page 2
ofOMB Circular A-133, the Florida Single Audit Act and Chapter 10.550, Rules of the Auditor General,
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 opinion on the financial statements or
the Single Audit compliance opinion 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 an opinion, we may decline to express an opinion or to issue a report as a result of this
engagement.
Management Responsibilities
Management is responsible for establishing and maintaining internal control and for compliance with the
provisions of contracts, agreements, and grants. In fulfilling this responsibility, estimates and judgments
by management are 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 use or disposition, that transactions are executed in
accordance with management's authorizations and recorded properly to permit the preparation of
financial statements in accordance with generally accepted accounting principles, and that federal award
programs are managed in compliance with applicable laws and regulations and the provisions of contracts
and grant agreements.
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 are
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,
including the schedule of expenditures of federal awards and state financial assistance, 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
and compliance, the selection and application of accounting principles, and the safeguarding of assets.
Management is responsible for adjusting the financial statements to correct material misstatements and
for confirming to us in the representation letter that the effects of any uncorrected misstatements
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 affecting the City involving (a) management, (b)
employees who have significant roles in internal control, and (c) others where the fraud could have a
material effect on the financial statements. You are also responsible for informing us of your knowledge
of any allegations of fraud or suspected fraud affecting the City received in communications from
employees, former employees, regulators, or others. In addition, you are responsible for identifying and
ensuring that the entity complies with applicable laws and regulations. Additionally, as required by OMB
Circular A-133 and Chapter 10.550 Rules of the Auditor General, it is management's responsibility to
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Mr. Christopher Russo, City Manager
City of Sunny Isles Beach
March 15,2004
Page 3
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.
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
errors, fraudulent financial reporting, misappropriation of assets, or 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. As required by the Single Audit Act Amendments of 1996 and OMB Circular A-B3 and the
Florida Single Audit Act and Chapter 10.550 Rules of the Auditor General, our audit will include test of
transactions related to major federal and state award programs for compliance with applicable laws and
regulations and the provisions of contracts and grant agreements. 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
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 opinions on the City of Sunny Isles Beach, Florida's basic financial statements and on its compliance
with requirements applicable to major programs.
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Mr. Christopher Russo, City Manager
City of Sunny Isles Beach
March 15,2004
Page 4
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 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. Tests of
controls relative to the financial statements 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 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-B3 and Chapter 10.550 Rules of the Auditor General, we will perform
tests of controls to evaluate the effectiveness of the design and operation of controls that we consider
relevant to preventing or detecting material noncompliance with compliance requirements 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-I33 and Chapter 10.550 Rules of the Auditor
General.
An audit is not designed to provide assurance on internal control or to identify reportable conditions.
However, we will inform the City Commission and management of any matters involving internal control
and its operation that we consider to be reportable conditions under standards established by the
American 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 financial statements. We will also inform you of
any nonreportable conditions or other matters involving internal control, if any, as required by OMB
Circular A-B3 and Chapter 10.550 Rules of the Auditor General.
Audit Procedures-Compliance
Our audit will be conducted in accordance with the standards referred to in the section titled Audit
Objectives. As part of obtaining reasonable assurance about whether the financial statements are free of
material misstatement, we will perform tests of the 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-B3 and Chapter 10.550 Rules of the Auditor General requires 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.
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Mr. Christopher Russo, City Manager
City of Sunny Isles Beach
March 15, 2004
Page 5
Our procedures will consist of the applicable procedures described in the OMB Circular A-133
Compliance Supplement for the types of compliance requirements that could have a direct and material
effect on each of the City's major programs. The purpose of those procedures will be to express an
opinion on the City's compliance with requirements applicable to 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 understand that your employees will prepare all cash, accounts receivable, or other confirmations we
request and will locate any invoices selected by us for testing.
At the conclusion of the engagement, we will complete the appropriate sections of and sign the Data
Collection Form (required under Federal Single Audit Act only) 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 workpapers for this engagement are the property of Rachlin Cohen & Holtz LLP and constitute
confidential information. However, we may be requested to make certain workpapers available to a
regulatory or grantor agency 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 a regulatory or grantor
agency. The regulatory or grantor agency may intend, or decide, to distribute the photocopies or
information contained therein to others, including other governmental agencies.
The workpapers for this engagement will be retained for a minimum of three years after the date the
auditors' report is issued or for any additional period requested by the regulatory or grantor agency. 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 workpapers.
SIB
Accountants " Advisors
Mr. Christopher Russo, City Manager
City of Sunny Isles Beach
March 15,2004
Page 6
Our fees for these services are estimated to be as follows:
September 30, 2004
September 30, 2005
September 30,2006
$34,000
$35,700
$37,500
If applicable, and 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 Rules of the Auditor
General, Chapter 10.550 and the Florida Single Audit Act, Section 215.97, Florida Statutes, if the City is
required to have an audit of federal award programs or state financial assistance projects, we will discuss
the fees for the additional services before providing those services. Generally, those services would be
$5,500 for each major federal or Florida single audit act testing and reporting.
Over the next several years, the City will be required to implement new GASB statements, including the
recording of infrastructure assets as well as other post employment benefits. The fees for those additional
procedures will be billed at mutually agreed amounts.
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 significant additional time is
necessary, we will discuss it with you and arrive at a new fee estimate before we incur the additional
costs. Our hourly billing rates for this service and any other services required or requested by the City are
as follows and vary according to the degree of responsibility involved and the experience level of the
personnel assigned:
Partner $325
Supervisor $150
Senior $120
Staff $100
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 1 % 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.
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Mr. Christopher Russo, City Manager
City of Sunny Isles Beach
March 15,2004
Page 7
In the event that we determine to resign, and you seek damages allegedly resulting from such resignation,
our maximum liability to you in the event we are held liable because of such resignation shall be limited
to the fees actually paid to us to the date of resignation.
This contract is renewable at the option of the City of Sunny Isles Beach. We appreciate the opportunity
to be of continued service to the City of Sunny Isles Beach, Florida 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,
bcca~
Partner
RESPONSE:
This letter correctly sets forth the understanding of the City of Sunny Isles Beach, Florida.
BY:~7~
Title: C \""l't' r'V\At\)~E.e
Date:
F:\04\11680\Engagement Letter
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