HomeMy WebLinkAboutBKR Garcia & Co.
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PROPOSAL TO PROVIDE
AUDITING SERVICES
FOR THE
CITY OF SUNNY ISLES BEACH.
FLORIDA
FOR THE FISCAL YEARS ENDING
SEPTEMBER 30, 2007, 2008 and 2009
DUE: May 4, 2007 10:00 a.m.
- -
BKR GARCIA & COMPANY
~ certified public accountants
Contact Persons: Pablo Llerena, CPA
Manuel M. Garcia, CPA
1110 BRICKELL AVENUE SUITE 901
MIAMI, FL 33131
(305) 373-0123
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CITY OF SUNNY ISLES
BEACH. FLORIDA
TABLE
OF CONTENTS
PAGE
LETTER OF TRANSMITTAL............................................................................................................... 1-5
COMMUNITY INVOLVEMENT................................................................................................................ 6
SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
1 . G EN ERAL REQU I R EMENTS..................................................................................................... 7
2. IN DEPEN DENCE ....................................................................................................................... 7
3. LICENSE TO PRACTICE IN THE STATE OF FLORIDA ........................................................... 7
4. FIRM QUALIFICATIONS AND EXPERIENCE ...................................................................... 7-10
5. PARTNERS, SUPERVISORY STAFF QUALIFICATIONS AND EXPERIENCE................. 11-23
6. PRIOR ENGAGEMENT WITH THE CITY OF SUNNY ISLES BEACH, FLORIDA .................. 24
7. SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENTAL ENTITIES......................... 24-26
8. SPECIFIC AUDIT APPROACH ...........................................................................................27-38
9. IDENTIFICATION OF ANTICIPATED AUDIT PROBLEMS ..................................................... 39
10. WORKING PAPER RETENTION AND ACCESS TO WORKING PAPERS ............................ 39
COST PROPOSAL................................................................................................................... 40
CONCLUSiON..................................................................................................................... 41-42
APPENDIX I - LICENSES TO PRACTICE IN FLORIDA
APPENDIX II - QUALITY CONTROL REVIEW
APPENDIX III - MANAGEMENT LETTERS
ATTACHMENT 1- SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
ATTACHMENT 11- PROPOSER'S CERTIFICATION
ATTACHMENT 111- NON-CONCLUSIVE AFFIDAVIT
ATTACHMENT IV - PROPOSER'S SWORN STATEMENT
) ~KR~~.~~
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) ~KR~~u~~~~
1110 Brickell Avenue' Suite 901
Miami, Florida 33131-3132
(305) 373-0123' (800) 330-4728
Fax (305) 374-4415
www.bkr-qarcia.com
...
May 4, 2007
Jane A. Hines, CMC
Office of the City Clerk
City of Sunny Isles Beach
18070 Collins Avenue
Sunny Isles Beach, FL 33160
Re: Proposal to Provide Auditing Services to the City of Sunny Isles Beach, Florida
Dear Ms. Hines:
BKR Garcia & Company, PLLC, ("BKR Garcia") (formerly Grau & Company, Miami office) appreciates the
opportunity to respond to the City of Sunny Isles Beach, Florida (the "City") Request for Proposal (RFP) #
07-04-01 for professional auditing services for an initial three (3) year period beginning with the fiscal
ending September 30, 2007. BKR Garcia fully understands the scope of professional services and work
products requested in this RFP (as described later in this transmittal letter). We are a 24 member South
Florida professional Limited Liability Company licensed Certified Public Accounting firm based out of
Miami and have provided auditing services in South Florida for the past 30 years under our former name,
Grau & Company. Effective on January 1, 2006, the Miami office of Grau & Company became BKR
Garcia & Company, PLLC. BKR Garcia & Company, PLLC, is a member of the American Institute of
Certified Public Accountants and Florida Institute of Certified Public Accountants.
BKR Garcia commits to perform the audit within your specified time period. In addition, we will hold an
entrance conference with key personnel no later than September 1, each year and will hold progress
reports with the Finance Department personnel, and keep them appraised throughout the entire audit
process. We will discuss all significant findings with City Administration, the Director of Finance and
Department Heads.
[{'I BKR Garcia's Municipality Experience in the past two years -
> City of T AMARAC - financial and single audit (CAFR)
> City of MARGA TE - financial and single audit (CAFR)
> Town of MIAMI LAKES - financial audit
y City of LAUDERHILL - financial and single audit (CAFR)
, Town of SOUTHWEST RANCHES - financial and state single audit (CAFR)
y City of PEMBROKE PINES(Joint Venture~ financial and single audit (CAFR)
y City of OAKLAND PARK (Joint Venture) - financial and single audit (CAFR)
,)~KR~~.~~
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City of Sunny Isles Beach, Florida
May 4, 2007
Page 2
WHY IS BKR GARCIA BEING
A WARDED and ENTRUSTED
WITH SUCH MUNICIPAL AUDIT WORK?
[{'I BKR Garcia has an IMPECCABLE REPUTA TION:
.:. BKR Garcia has never been involved in any litigation, proceeding or disciplinary action
.:. BKR Garcia has never been charged with or convicted of a public entity crime
.:. BKR Garcia will communicate all reportable and nonreportable conditions and will make an
immediate written report of all irregularities, fraud, illegal acts or indications of illegal actions to
the City Manager and City Commission.
[{] BKR Garcia understands GFOA CERTlFICA TE OF ACHIEVEMENT
reporting/submittal requirements:
BKR Garcia is proud to have assisted all 16 of our past and present participating GFOA Certificate of
Achievement for Excellence in Financial Reporting Program (CAFR) clients qualify for this award.
BKR Garcia will provide special assistance and technical advice to City of Sunny Isles Beach's
professional staff to assist the City obtain the Certificate of Achievement for Excellence and
Financial Reporting regarding it's CAFR submittal to the GFOA. Again, the Certificate of
Achievement has been awarded on all of the financial statements we have reported in the certificate
program.
This certificate program is the highest award in governmental financial reporting.
[{'I BKR GARCIA'S FOCUS on GOVERNMENTAL AUDITS/ ESTABLISHED LOCAL
PRESENCE:
.:. We are a 24 member Miami based licensed Certified Public Accounting firm and have provided
governmental auditing services in South Florida for the past 30 years
.:. Last year, BKR Garcia performed:
o 31 audits under Governmental Auditing Standards, including 30 Single Audits
o In excess of 9,000 hours of services for our governmental and non-profit clients
.:. BKR Garcia currently provides governmental auditing / accounting services to over 30 Public
Sector Clients
)~KR~~.~~
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City of Sunny Isles Beach, Florida
May 4, 2007
Page 3
[{'I BKR Garcia provides Personalized Services and Immediate Responsiveness:
Offers a "Client-Friendly Approach": We will work with the City to resolve any issues and open the
lines of communication, so there will be no surprises. Along these lines, our Engagement Partner
will report frequently and consistently of any potential audit adjustments, to allow the City
appropriate time to respond and research.
Always Only a "Phone Call Away": We are always accessible to Clients regarding any comments /
questions / concerns (we will provide KEY team members' cell phone numbers to the City).
Stays "Involved" the Entire Year - We will make suggestions to improve the City's Performance /
Procedures / Controls:
Because our team does not fall into the accepted "ticking and tying" mentality, we understand
the "big picture" and think beyond the traditional auditor's perspective.
Throughout the entire year, we will update, advise and educate the City as to all new and/or
revised reporting requirements, to assure the City's compliance with same.
[{'I BKR Garcia's Large & Experienced Engagement Teams:
Please note BKR Garcia is assigning the following firm Engagement Team Members to your City's
Engagement:
2 Partners
1 Audit Manager
1 Supervisor / Senior Accountant
4 TOTAL TEAM MEMBERS
We humbly ask you to compare our Engagement Team of 4 members to our peer competitors'
assigned teams. We are confident you will not see another firm assigning as large and as
experienced a team to your engagement.
[{'I Experienced Personnel On-the-Job - Our Management Team:
. has many years of governmental experience
. has a very low staff turnover (Unlike auditors from most firms, our professionals focus the
majority of their time working exclusively with governmental entities)
NET RESULT: Our Management has been working together for may years as a TEAM and is
comprised of experienced Firm Management (Partners, Managers, Supervisor/Senior) whom will
constitute 100 percent of total engagement resources.
[{'I BKR Garcia aets involved in the Local Community:
BKR Garcia believes in participating and becoming involved in the local community. Reference
page 6 for a listing of just some of the local groups / community-based organizations we are either
involved with, members of and/or have supported.
J BKR?:;~.~E~
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City of Sunny Isles Beach, Florida
May 4, 2007
Page 4
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We recognize the City of Sunny Isles Beach is an important entity in Miami-Dade County and its
responsibilities create a challenging and dynamic organization. We are confident our firm is eminently
qualified to meet the challenges of this engagement and deliver quality audit services to the City. The
City of Sunny Isles Beach would be a valued client of our firm and we pledge to commit all firm
resources to provide the high level and quality of services (as described below) which both fit the City's
needs and exceed the City's expectations.
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BKR Garcia will perform an audit of the basic financial statements and related funds financial statements
for the fiscal years ending September 30, 2007, 2008 and 2009, in order to express an opinion on the fair
presentation of the City's financial statements in conformity with accounting principles generally accepted
in the United States of America. Our audit will be conducted under auditing standards generally accepted
in the United States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States; the Office of Management
and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and
Chapter 10.550 Rules of the Auditor General. Our audit will include procedures to determine whether the
operations of the City are properly conducted in accordance with legal, regulatory, grant and contractual
requirements, including Florida Statutes, Federal Laws and the City Commission's policies and
procedures.
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We will provide an "in relation to" report on the combining and individual fund financial statements and
supporting schedules based on the auditing procedures applied during the audit of the basic financial
statements, and perform certain limited procedures involving required "Management's Discussion and
Analysis" and supplementary information required by the Governmental Accounting Standards Board.
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We will also:
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Determine the financial report the City filed with the Florida Department of Financial Service is in
agreement with the financial statements for each fiscal year.
~ Assist the City in complying with the requirements of the Auditor General regarding the City's
assessment of its financial condition.
Prepare a management letter pursuant to the requirements of the Auditor General of the State of
Florida.
~ Assist with the preparation of the schedule of state and federal awards.
Prepare data collection form.
~ Assist with the preparation of the Comprehensive Annual Financial Report (CAFR) for
submission to the Government Finance Officers Association (GFOA) of the United States and
Canada for consideration in obtaining the Certificate of Achievement for Excellence in Financial
Reporting.
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The firm will issue the following reports in accordance with applicable rules and standards no later than
February 28, 2008 for fiscal year 2007 and by January 31 of each subsequent fiscal year:
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y Report on an audit of the financial statements conducted in accordance with auditing standards
generally accepted in the United States of America and the standards applicable to financial
audits contained in Government Auditing Standards, issued by the Comptroller General of the
United States.
~ Report on Internal Control over Financial Reporting and Compliance and Other Matters based
on an audit of Financial Statements in Accordance with Government Auditing Standards.
~ Report on Compliance and Internal Control over Compliance Applicable to each Major State and
Federal Programs in accordance with OMB Circular A-133.
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J ~KR~~.~~~
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City of Sunny Isles Beach, Florida
May 4, 2007
Page 5
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We certify this proposal is made without previous understanding, agreement or connection either with any
previous firms or corporations offering a proposal for the same items or with the City. We also certify our
proposal is in all respects fair, without outside control, collusion, fraud, or otherwise illegal action, and
were prepared in good faith. Furthermore, this proposal remains in effect for ninety (90) days from the
date of the proposal, May 4, 2007. Only the person(s), company or parties interested in the project as
principals are named in the proposal.
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Pablo Llerena, CPA and Manuel M. Garcia, CPA, Partners, are authorized to make representations for
and to bind the firm. They can be reached at (305) 373-0123. Their e-mail addresses are lIerena@bkr-
Qarcia.com and qarcia@bkr-qarcia.com, respectively. Our Federall.D. Number is 20-3157326. Please
do not hesitate to call if you have any questions about the information provided in this proposal. We
thank you for considering our firm's qualifications and experience and look forward to serving you.
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Very truly yours,
BKR Garcia & Company, PLLC
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Pablo R. Llerena, CPA
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J~KR~.~~~
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COMM UNITY INVOL VEMENT
BKR Garcia and its principals/employees have historically been very involved in the South
Florida community as a civic participant. Just some of the wonderful groups and community
based organizations we are/ have been involved with as Board Members, Volunteers, and/or
Philanthropic contributors are:
.. Broward League of Cities - TRUSTEE MEMBER
.... The Children's Fund
. Children Mac Lemore Center
... City of Hope
... Miami-Dade County League of Cities
... Palm Beach County League of Cities
..;, Florida Firefighters Fund
... Big Brother I Big Sister of Broward County
.. American Cancer Society
... Hospice Care of Southeast Florida
..;, AID to Victims of Domestic Abuse
... Avon Breast Cancer 3-D
... Broward Community College Foundation
... Broward Alcohol and Drug Abuse Advisory Council
... Broward County Housing Authority
... Broward School Board District Advisory Council
.. Broward County Land Preservation Advisory Board
... Hope Outreach, Inc.
... E.A.S.E. Foundation
.. Project Stable
.... Juvenile Justice Voluntary Advisory Board
... Leukemia & Lymphoma Society
.... Mae Volen Senior Center
.. March of Dimes
... Lauderdale Lakes Alzheimer's Association
.... Children's Home Society
. National Multiple Sclerosis Society
... Pembroke Pines Police Athletic League
.. Saint Coleman's Catholic Church
.. Our Lady of Lourdes
.. Special Olympics
... Boys & Girls Club
... Hispanic Unity of Florida
.; Dade County School Board I Role Model for African American Youths, Lillie C. Evans Community
School
. University of Miami
... Camillus House
.... Tamarac Bulldogs
.... Miami-Dade Community College Foundation
.... Memorial Hospital West
J~~.~~~
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
1. GENERAL REQUIREMENTS
BKR Garcia agrees to address all points outlined in your request for proposal. BKR Garcia
agrees to adhere to the instructions for preparing and subm itting the proposal.
2. INDEPENDENCE
BKR Garcia affirms we meet the independence requirements of the Standards for Audit of
Governmental Organizations Programs, Activities and Functions published by the U.S.
Government Accounting Office, Governmental Auditing Standards (GAGAS) issued by the
Comptroller General of the United States and the Laws and Rules of Florida Board of Accounting
or any subsequent amendments or superseding revisions. As defined by auditing standards
generally accepted in the United States of America and the U.S. Government Accounting Office's
Government Auditing Standards, we are independent of the City of Sunny Isles Beach and its
component units.
BKR Garcia has never performed any professional services for the City of Sunny Isles Beach, or
any component units thereof.
3. LICENSE TO PRACTICE IN THE STATE OF FLORIDA
BKR Garcia is a properly registered/licensed State of Florida professional association, and our
assigned key professional staffs are properly registered/licensed to practice in the State of Florida
and are qualified to perform nonprofit and governmental audits (ref. Appendix I).
4. FIRM QUALIFICATIONS AND EXPERIENCE
BKR GARCIA: GOVERNMENT INDUSTRY FOCUS
BKR Garcia is an accounting firm (South Florida professional Limited Liability Company)
providing comprehensive financial and compliance auditing, attestation, accounting and other
management consulting and tax services. The firm has provided professional services for the
past 30 years under the name of Grau & Company.
By focusing our expertise on governmental entities, we provide the highest level of financial and
compliance auditing and consulting services to our Public Sector Clients.
[{'I Last year, BKR Garcia performed:
, In excess of 9,000 hours of services to our Public Sector Clients
, 31 Audits under Governmental Auditing Standards (GAS)
,. 30 Single Audits
The office of BKR Garcia performing the audit is located at 1110 Brickell Avenue,
Suite 901; Miami, FL 33131.
Telephone: (305) 373-0123, Fax (305) 374-4415.
.) BKR~~.:~~
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Colltilll/ed)
4. FIRM QUALIFICATIONS AND EXPERIENCE (COl/lil/lIed)
STAFF
BKR Garcia, has a total of 24 employees, 20
professional staff, including 4 Partners and 16 80%
professionals who specialize in providing auditing,
accounting and consulting services to the Public
Sector. The number of professional staff by
employee classification is as follows:
. GOVERNMENTAL AUDITS
. OTHER AUDITS
20%
TOTAL PUBLIC SKILLED
PROFESSIONAL TOTAL SECTOR IN
STAFF CPA'S STAFF COMPUTERS
Partners 4 4 4 4
Manager 1 1 1 1
Supervisor / Seniors 7 0 6 7
Staff accountants 8 1 5 8
Total 20 6 16 20
ALL FULL TIME EMPLOYEES
National Firm Resources With Local Firm Personalized Service Philosophv
With the equally important goals of serving our clients' best interest while remaining locally owned and
autonomous, our firm has chosen to be affiliated with BKR International. BKR International is an
association of independent CPA firms that provides a worldwide net work of accounting and business
advisors from 112 accounting firms in 65 countries. This affiliation gives us access to 56 CPA firms in the
United States with expertise in governmental accounting, auditing and information technology.
J~~~.:~
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(CO/lti/ll/cd)
4. FIRM QUALIFICATIONS AND EXPERIENCE (Col//il/lied)
BKR Garcia's IMPECCABLE REPUTATION
ESTABLISHED OVER 30 YEARS
o BKR Garcia, its Partners and its employees have never
been involved in any litigation, proceeding or disciplinary
action in any manner related to our professional
activities.
o BKR Garcia, its Partners and its employees have never
been charged with or convicted of a public entity crime.
o BKR Garcia is not aware of any complaints being filed
with the Florida Department of Business and
Professional Regulations regarding our firm, its Partners
and its Employees
o Neither BKR Garcia or any of its partners, employees,
members or agents who are active in the management of
the entity, have ever been charged with, or convicted, of
a public entity crime.
,)~~.~~
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Continued)
4. FIRM QUALIFICATIONS AND EXPERIENCE (Coli/iI/lied)
Qualitv Control and Confidentialitv
BKR Garcia participates in an external quality review program requiring an
on-site independent examination of our accounting and auditing practice.
BKR Garcia has consistently received an unqualified opinion on the
quality of our audit practice, including our firm's last external quality
control review (for the year ended June 30, 2004). Reference copy of the
report on the firm's most recent quality review in Appendix II. Note: our
firm's quality control review included a review of specific governmental
engagements.
In addition to scheduled Peer Reviews, our firm continually monitors
performance to ensure the highest quality of services. Under the
supervision of the Audit Partners, an Audit Manager is responsible for
monitoring quality control of all appropriate engagements.
Only professional staff that works on an engagement has access to client
information. It is our policy to obtain from each staff a signed client confidentiality
agreement.
Results of State and Federal Reviews
All state and federal reviews of the firm's reports and working papers have been
accepted without change or revision to issued reports.
.)~~.~~
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Co/lti/lued)
5. PARTNERS, SUPERVISORY STAFF QUALIFICATIONS AND EXPERIENCE
BKR Garcia would assign the following firm Engagement Team
Members to your City's Engagement:
2 Partners
1 Audit Manager
1 Supervisor / Senior Accountant
4 TOTAL TEAM MEMBERS
o We are confident your City will not see another firm
assigning as large and as experienced a team to your
engagement.
Thus, our Entire Engagement Team brings the City extensive
experience and true Engagement Team depth.
J~R~~.~~
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
( COlltillllCd)
5. PARTNERS, SUPERVISORY STAFF QUALIFICATIONS AND EXPERIENCE (Col/til/I/cd)
QUALITY AND EXPERIENCE OF FIRM'S ASSIGNED AUDITING PERSONNEL
Enqaqement Partner - "KEY" MEMBER
The engagement will be under the direct supervision of a Partner. The Engagement Partner has
direct responsibility for engagement policy, direction, supervision, quality control, security and
communication with City personnel. The Engagement Partner will be responsible for the quality
control, supervision and confidentiality of information of the engagement and will participate
extensively during the various stages of the engagement, via:
[{] directing the development of the overall audit approach and plan;
[{] performing an overriding review of work papers;
[{] resolving technical accounting and reporting issues;
[{] reviewing, approving and signing reports, management letters, and other audit engagement
products;
[{] supervising staff; and
[{] responding to telephone calls and specific inquiries on a day-to-day basis as primary point of
contact.
PABLO LLERENA, CPA will be the Engagement Partner and a designated Engagement
"KEY" MEMBER. Mr. Llerena has extensive experience in governmental audits, and has
performed them for the last 25 years. He will devote a substantial part of his time to the
completion of the work.
Concurrinq Review & Advisorv Partner
A Concurring Review and Advisory Partner will assist the Engagement Partner and be available
as a sounding board to advise in those areas where problems are encountered. He will perform a
second review of all reports to be issued by BKR Garcia, and will also be available in those
instances in which the Engagement Partner is not available.
MANUEL M. GARCIA, CPA will be the Concurring Review and Advisory Partner. Mr.
Garcia has been involved in performing governmental audits for 25 years, and is the Concurring
Review and Advisory Partner of all the governmental and non-profit audits of the firm.
J~R~~.:~
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Co/lti/lued)
5. PARTNERS. SUPERVISORY STAFF QUALIFICATIONS AND EXPERIENCE (Colltilll/ed)
QUALITY AND EXPERIENCE OF THE ASSIGNED FIRM MANAGEMENT
SUPPORT PERSONNEL
Audit ManaQer - "KEY" MEMBER
The Audit Manager will be assigned full time and will work closely with the Partners. He will be
responsible for the overall review of the work and compliance with the firm's and regulatory
compliance requirements. He will ensure that the financial statements and all other reports are
prepared in accordance with professional standards and firm policy.
He will be responsible for all phases of the field work and will be:
[{] supervising staff;
[{] planning the audit;
[{] preparing or modifying audit programs, as needed;
[{] evaluating the internal control of the computer department;
[{] evaluating internal control and assessing risk;
[{] reviewing work papers for compliance with audit requirements and completeness;
[{] communicating with the City and the partners the progress of the audit; and
[{] reviewing financial statements and all reports issued by the firm for accuracy, completeness
and verifying they are prepared in accordance with professional standards and firm policy.
ANDRE CHAMMAS, CPA will be the Audit Manager and a designated "KEY"
MEMBER. Mr. Chammas was selected because of his experience in governmental and public-
sector audit engagements. He will devote 100% of his time to the completion of the work. He
has performed public sector audits for 5 years.
J~R~~.:,~
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Continued)
5. PARTNERS. SUPERVISORY STAFF QUALIFICATIONS AND EXPERIENCE (Continl/ed)
Supervisor I Senior Accountant
A Supervisor/Senior Accountant will be assigned full-time to the engagement. The
Supervisor/Senior accountant will perform complex audit procedures and assist the Partners and
Manager in the actual performance of the engagement.
WILBERT SANTOS will be the Supervisor / Senior Accountant. Mr. Santos has served
such clients as City of Margate, City of Tamarac, City of Lauderhill, City of Oakland Park, Village
of Biscayne Park and Town of Miami Lakes. He is well versed in the uniqueness of
Governmental audits and will devote 100% of his time to the completion of the work. He has
performed public sector audits for 3 years.
'" ;':'i
J BKR~~.~~~
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Contin/led)
5. PARTNERS. SUPERVISORY STAFF QUALIFICATIONS AND EXPERIENCE
(Continued)
BKR GARCIA's AUDIT ENGAGEMENT TEAM
MEMBERS' YEARS
GOVERNMENTAL AUDITING EXPERIENCE
&
YEARS WORKING TOGETHER as a TEAM
PABLO LLERENA, CPA (Engagement Partner):
. 25 YEARS of TOTAL GOVERNMENTAL AUDITING EXPERIENCE
MANUEL M. GARCIA, CPA (Concurring Partner):
. 25 YEARS of TOTAL GOVERNMENTAL AUDITING EXPERIENCE
ANDRE CHAMMAS, CPA (Audit Manager):
. 5 YEARS of TOTAL GOVERNMENTAL AUDITING EXPERIENCE
WILBERT SANTOS (Supervisor I Senior Accountant):
. 3 YEARS of TOTAL GOVERNMENTAL AUDITING EXPERIENCE
58 TOTAL YEARS, GOVERNMENT AUDITING EXPERIENCE
J~~.~~
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Col/til/lled)
5. PARTNERS, SUPERVISORY STAFF QUALIFICATIONS AND EXPERIENCE (Co/ltinued)
PHILOSOPHY TO SERVICE CLIENTS /
DEVELOP BUSINESS RELA TIONSHIPS
COMPOSITION OF ENGAGEMENT TEAM
BKR Garcia affirms that the Certified Public Accountants (Engagement Partner;
Concurring Review Partner; Audit Manager) assigned to perform the engagement
have at least five years of nonprofit and governmental auditing experience.
In contrast to the majority of both national and local firms, our proposed
engagement team is comprised of an exceptionally large percentage of high-level
audit professionals. This gives us the ability to quickly recognize problems and
be more efficient as a result of our experience
Our professionals have a wide variety of experience in providing auditing,
accounting and advisory services to public-sector entities and have audited
Cities. In addition to their experience and knowledge, the members of the Audit
Team have the functional and technical skills to ensure a comprehensive audit.
Unlike other firms these individual spend most of their time working with
90vernmental entities. This means that they will not be wasting your time asking
Irrelevant questions and indeed, will be a valuable resource to your orqanization.
J~~.~~~
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Continl/ed)
5. PARTNERS. SUPERVISORY STAFF QUALIFICATIONS AND EXPERIENCE (Colllilllled)
Continuity
of Staff
and Audit
Team
BKR Garcia's engagement team's work load is organized in such a way
that additional activities brought about by this engagement will not impact
our current commitments to our clients. We have sufficient staff capacity
to integrate these professional services for the City into our present
operations, while continuing to maintain the highest standards of quality
and time lines for our clients.
Qualitv of the Staff Over the Term of the EnQaQement
Despite the current market, BKR Garcia has a very low turnover of employees. The Engagement
Partner and Audit Manager will be designated "KEY' MEMBERS". We pledge to the City they
will be returned to the audit each year of the engagement. In the unlikely event that it does
become necessary to replace any of the Partners, Manager or Supervisor/Senior Accountant, we
will first attain the City's express prior written permission to do so. We understand the City's right
to accept or reject replacements. In addition to the engagement team members proposed herein,
we also have other, well-qualified professionals who stand ready to serve the City's needs, if
required.
BKR Garcia can assure the highest professional qualifications of the staff we will utilize for the
City's engagement.
In addition to our governmental focus, it is BKR Garcia's policy that all professional employees
earn more than the minimum CPE credits required for governmental audits. Further, because we
are a growing firm, we have an ongoing recruitment program that seeks only those accountants
with a proven record of academic success. When we recruit at the senior and manager level, we
select CPAs with proven governmental accounting and auditing experience.
,J~~~.~~
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Co/lti/lued)
5. PARTNERS. SUPERVISORY STAFF QUALIFICATIONS AND EXPERIENCE (Co/lti/ll/ed)
PABLO R. LLERENA, CPA
e-mail: lIerena@bkr-garica.com
Position
Engagement Partner - "KEY" MEMBER
Education
Bachelor Degree, Business Administration, 1980 Florida International
University
Professional
History
· CPA, in Florida since 1982, Certificate NO.1 0158
· Partner of BKR Garcia since 1995
· Audit manager, senior accountant and staff of BKR Garcia
· from 1982 to 1 995
. Auditor with local accounting firm from 1980 to 1982
Clients
Served
Mr. Llerena performs the concurring review and advises on all the
governmental audits of the firm. A partial list of public sector audit clients
served follows:
· City of Tamarac (5 years) (Financial/Utility Audit)
· City of Margate (1 year)(Financial/Utility Audit)
· City of Pembroke Pines (2 year) (Financial/Utility Audit)
· City of Oakland Park (5 years) (Financial/Utility Audit)
· City of Lauderhill (5 years) (Financial/Utility Audit)
· Town of Southwest Ranches (5 years) (Financial Audit)
· Town of Miami Lakes (5 years) (Financial Audit)
. Village of Biscayne Park (5 years) (Financial Audit)
. City of Dania Beach (2 years) (Financial/Utility Audit)
· City of Lauderdale Lakes (3 years) (Financial/Utility Audit)
· City of Miami Springs (2 years) (Financial/Utility Audit)
· City of South Miami (1 year) (Financial/Utility Audit)
· City of Miami (2 years) (Financial/Utility Audit)
· Hialeah Housing Authority (2 years)
· Tampa Housing Authority (2 years)
. Miami-Dade County School Board (10 years)
· Miami-Dade County (5 years)
· Housing Authority of the City of Miami Beach (5 years)
· Broward County Housing Authority (4 years)
. Bayfront Park Management Trust (2 years)
· Department of Offstreet Parking of the City of Miami (12 years)
· Downtown Development Authority of the City of Miami (10 years)
Professional Educational courses taken during the last three (3) years.
Education
Course
Government Accounting and Auditing
Accounting, auditing and other
Total Hours
Hours
124
--.lQ
154
j~~~.~~
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Col/til/lled)
5. PARTNERS. SUPERVISORY STAFF QUALIFICATIONS AND EXPERIENCE (Colltilllled)
PABLO R. LLERENA, CPA (Continued)
e-mail: lIerena@bkr-Qarcia.com
Other
Qualifiations
As a member of the Government Finance Officers Association Special
Review Committee, Mr. Llerena has participated in the review process for
awarding the GFOA Certificate of Achievement in Financial Reporting, and
has reviewed over 40 reports during the past five years. In addition, Mr.
Llerena was the team captain for the Quality Review of the Office of
Management Audits of Miami-Dade County School Board.
Professional
Associations
. Member, American Institute of Certified Public Accountants
. Member, Florida Institute of Certified Public Accountants
. Member, Florida Government Finance Officers Association
. Member, Government Finance Officers Association
. Member, Cuban American Certified Public Accountants Association
J!R~.~~~
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Col/til/lIed)
5. PARTNERS. SUPERVISORY STAFF QUALIFICATIONS AND EXPERIENCE (Continued)
MANUEL M. GARCIA, CPA
e-mail: Qarcia@bkr-Qarcia.com
Position
Education
Professional
History
Clients
Served
Professional
Education
Professional
Associations
,)~~~.:~
Concurring! Advisory Partner
Bachelor of Science, Majoring in Accounting, 1970, Florida Atlantic University
· CPA, in Florida since 1976, Certificate No. 5784
· Partner of BKR Garcia since 1983
· Owner of local practice, 1975 to 1982
. Staff for national accounting firm, 1971 to 1974
Mr. Garcia is the client service! advisory partner on several governmental
audits. A partial list of public sector audit clients served follows:
· City of Miami Springs (2 years) (Financial! Utility Audit)
· City of Lauderdale Lakes (3 years) (Financial/Utility Audit)
· City of Oakland Park (5 years) (Financial/Utility Audit)
· City of Dania Beach (2 years) (Financial/Utility Audit)
· Town of Southwest Ranches (5 years) (Financial Audit)
· Town of Miami Lakes (5 years) (Financial Audit)
· Village of Biscayne Park (5 years) (Financial Audit)
· Housing Authority of the City of Miami Beach (5 years)
· Broward County Housing Authority (4 years)
· Miami-Dade County School Board (10 years)
· Department of Offstreet Parking of the City of Miami (12 years)
. Downtown Development Authority of the City of Miami (10 years)
Educational courses taken during the last three (3) years.
Course
Hours
Government Accounting and Auditing 96
Accounting, auditing and other ~
Total Hours 126
. Member, American Institute of Certified Public Accountants
· Member, Florida Institute of Certified Public Accountants
· Member, Cuban American Certified Public Accountants Association
· Member, Association of Certified Fraud Examiners
· Ex-member and former Chairman of the Board of Governors of the Florida
Joint Underwriter Association
. Ex-member of the Audit Committee of Miami-Dade County School Board
. Ex-Chairman of the Audit Committee of the City of Miami
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Co/lti/ll/cd)
5. PARTNERS, SUPERVISORY STAFF QUALIFICATIONS AND EXPERIENCE (Contin/led)
ANDRE N. CHAMMAS, CPA
e-mail: achammas@bkr-garcia.com
Position
Education
Professional
History
Clients
Served
Professional
Education
Professional
Associations
J~R~~.~~
Manager
Bachelor of Business Administration, Majoring in Accounting, 1992,
St. Thomas University
· CPA in Georgia since 1996, Certificate No. 16966
· CPA in Massachusetts since 2001, Certificate 21010
· CPA in Florida since 2005 Certificate No. 37602
· Manager of BKR Garcia & Company. since 2002
· Senior Accountant of Massachusetts firm, 1999 to 2002
. Staff for local accounting firm, 1996 to 1999
Mr. Chammas is the engagement or concurring manager on several nonprofit
and governmental audits. A partial list of audit clients served follows:
.
Miami Beach Housing Authority (Financial Audit) - (2 years)
Hialeah Housing Authority (Financial Audit) - (1 year)
Tampa Housing Authority (Financial Audit) - (2 years)
8 Peninsula Housing Programs - (5 years)
Codec. Inc. - (3 years)
City of Miami - (2 years)
City of Lauderdale Lakes - (1 year)
City of Dania Beach - (1 year)
Village of Biscayne Park - (5 years)
City of Tamarac - (2 years)
City of Lauderhill - (2 years)
.
.
.
.
.
.
.
.
.
Educational courses taken during the last three (3) years.
Course
Hours
Government Accounting and Auditing 56
Accounting, auditing and other 74
Total Hours 130
· Member, American Institute of Certified Public Accountants
· Member, Florida Institute of Certified Public Accountants
Member, Massachusetts Society of Certified Public Accountants
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(ConTinued)
5. PARTNERS, SUPERVISORY STAFF QUALIFICATIONS AND EXPERIENCE
(Colltilllled)
WILBERT SANTOS
e-mail: wsantos@bkr-garciacpa.com
Position
Supervisor I Senior Accountant
Bachelor Degree, Accounting, 1994, Angeles University Foundation
Education
Professional
History
· Certified Public Accountant - Philippines
· 5-years experience from Staff to Senior Accountant level -
PricewaterhouseCoopers
Clients
Served
A partial list of public sector audit clients served follows:
· City of Tamarac - (Financial and Utility Audit) - CAFR (3 years)
· City of Margate - (Financial and Utility Audit) - CAFR (1 year)
· City of Lauderhill - (Financial and Utility Audit) - CAFR (2 years)
· City of Oakland Park (Financial and Utility Audit) - CAFR (2 years)
· Town of Miami Lakes(Financial Audit) - (3 years)
· Village of Biscayne Park (Financial and Governmental Audit) - (1 year)
· Department of Off Street Parking - City of Miami (Component Unit) - (1 year)
(Other experience include non-profit organization, mining, publicly-traded
Company, construction, telecommunication, manufacturing, trading and
medical services)
Professional
and
Business
Affiliations
Associate, American Institute of Certified Public Accountant
Associate, Florida Institute of Certified Public Accountant
Continuing
Professional Total CPE Credits
Education
124 Hours
J~~~.~~
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Co//ti//ucd)
I
5.
PARTNERS. SUPERVISORY STAFF QUALIFICATIONS AND EXPERIENCE (Co/lti/lued)
TRAINING COURSES / MEMBERSHIPS
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Compliance with Government Education Requirements
In order to maintain our high level of technical competence, we provide continuing professional
education programs for all partners and professional staff members which exceed national and
state standards. All of the audit professionals of BKR Garcia exceed the education
requirements as set forth in Government Auditing Standards, published by the
Comptroller General of the United States.
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Our continuing professional education programs ensure that all audit staff members meet the
requirements to participate in audits of government agencies.
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Professional Staff TraininQ
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Partners - All of our partners are CPA's and have in excess of 20 years of diversified public
accounting experience. They are responsible for overall engagement performance, policy,
direction and quality control. They have far exceeded minimum CPE requirements (reference
previous pages).
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ManaQers - Our audit managers is a CPA's who have a minimum of 8 years of diversified public
accounting experience. He has demonstrated ability to plan audit engagements, supervise
personnel and maintain frequent contact with clients. He continually upgrades his skills through
the firm's continuing education programs and courses sponsored by the AICPA, FICPA and
GFOA. He has far exceeded minimum CPE requirements (reference previous pages).
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Supervisor / Senior Accountants - All of our supervisor/senior accountants have a minimum of
3 years of diversified public accounting experience. They perform audits, evaluate staff, review
findings and prepare audit reports. They posses the potential for upward mobility. They have far
exceeded minimum CPE requirements (reference previous pages).
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Staff Accountants - All of our staff accountants are graduates of an accredited university with
major course work in accounting and have achieved above average grades. They assist in
performing audit engagements and continue to expand their skills through job training and
continuing education programs.
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Memberships
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All of the firm's CPA's are properly licensed as CPA's and members in good standing of both the
American Institute of Certified Public Accountants and the Florida Institute of Certified Public
Accountants. In addition, certain firm professionals are members of the following professional
groups:
. Florida Government Finance Officers Association
. Technical Resource Committee of the Government Finance Officers Association
. Special Review Committee of the Government Finance Officers Association
. BKR International Committee on Governmental and Non-Profit Accounting and Auditing
. Florida Institute of CPA Non-Profit Conference Committee
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J~KR~.~~
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
( Continued)
6. PRIOR ENGAGEMENT WITH THE CITY OF SUNNY ISLES BEACH, FLORIDA
BKR Garcia has never performed any professional services for the City of Sunny Isles
Beach, or any component unit thereof.
7. SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENTAL ENTITIES
BKR Garcia's Municipality Experience - We currently audit the following
municipalities:
>- City of TAMARAC - financial and single audit (CAFR)
>- City of MARGA TE- financial and single audit (CAFR)
>- City of PEMBROKE PINES(Joint Venture)-financial and single audit (CAFR)
>- City of OAKLAND PARK (Joint Venture)- financial and single audit (CAFR)
>- Town of MIAMI LAKES - financial audit and single audit
Also, we have audited the following municipalities during the past three (3) years:
>- City of LAUDERHILL - financial and single audit (CAFR)
>- Town of SOUTHWEST RANCHES - financial and single audit (CAFR)
>- Village of BISCA YNE PARK - financial audit
>- City of NORTH LAUDERDALE - financial and single audit (CAFR)
>- City of DANIA BEACH - financial and single audit (CAFR)
>- City of SOUTH MIAMI- financial and single audit (CAFR)
>- City of MIAMI SPRINGS - financial and single audit (CAFR)
>- City of LAUDERDALE LAKES - financial and single audit
WHY IS BKR GARCIA BEING
AWARDED and ENTRUSTED
WITH SUCH GOVERNMENTAL AUDIT WORK?
J~~.~~
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Co/lti/lued)
7. SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENTAL ENTITIES (Continued)
SIMILAR ENGAGEMENTS
As one can see from the following references, our enclosed Peer Review Report, our firm
history of never having litigation and our extensive Client Listing, BKR Garcia can
confidently assert and proclaim our record of quality work with Florida Municipal
Governments.
'0
Q) III
> ...
... ::I
Q) 0
en J:
CLIENT INFORMATION III :'.::
...
ca '0
Q) ::I
> <C
City of Tamarac
CAFR, Financial Audit, Governmental Audit, Federal and State Single Audit, Utility Audit
Years Served: Since 2002 5 800
Contact: Jeffrey Miller, City Manager, (954) 597-3510
Partners: Pablo R. Llerena
Manuel Garcia
City of Margate
CAFR, Financial Audit, Governmental Audit, Federal and State Single Audit, Utility Audit
Years Served: Since 2006 1 800
Contact: Gail P. Gargano, Finance Director, (954)-972-6454
Partners: Pablo R. Llerena
Manuel Garcia
City of Oakland Park
CAFR, Financial Audit, Governmental Audit, Utility Audit
Years Served: Since 2002 4 600
Contact: Catherine Graham, Finance Director, (954) 630-4300
Partner: Pablo R. Llerena
Manuel Garcia
Town of Miami Lakes
Financial Audit, Governmental Audit, Federal and State Single Audit
Years Served: Since 2001 5 300
Contact: Alfredo Acin, Finance Director, (305) 364-6100
Partners: Pablo R. Llerena
Manuel Garcia
J BKR~.~~
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Continl/ed)
7. SIMILAR ENGAGEMENTS WITH OTHER GOVERNMENTAL ENTITIES (Continued)
GFOA CERTIFICA TE OF ACHIEVEMENT
We are proud to have assisted all of our clients who participate in the GFOA Certificate of
Achievement for Excellence in Financial Reporting Program (CAFR) qualifies for this award.
This certificate program is recognized as the highest award in governmental financial
reporting. The Certificate of Achievement has been awarded on all of the financial
statements we have reported in the certificate proqram. We have performed this service for
our clients the last 16 years.
We have assisted all 16 of our past and present reportinq qovernment clients obtain the past
Certificate of Excellence on their CAFR from the Government Finance Officers Association
(GFOA).
CURRENT CAFR CLIENTS SERVED:
,. City of Tamarac
,. City of Margate
,. City of Oakland Park
,. City of Pembroke Pines (Joint Venture)
OTHER CAFR CLIENTS PREVIOUSL Y SERVED:
,. City of Lauderhill
.,. City of Pompano Beach (Joint Venture)
,. Town of Southwest Ranches
.,. City of Dania Beach
,. City of South Miami
,. City of Miam i Springs
,. Broward County School District (Joint Venture)
,. Palm Beach County School District (Joint Venture)
,. City of Miami (Joint Venture)
,. Miami-Dade County School District (Joint Venture)
,. Miami-Dade County Aviation Department (Joint Venture)
8. SPECIFIC AUDIT APPROACH
SCOPE I WORK PRODUCTS I RESULTS
We recognize the City of Sunny Isles Beach is an important entity in Miami-Dade County and its
responsibilities create a challenging and dynamic organization. We are confident our firm is
eminently qualified to meet the challenges of this engagement and deliver quality audit services to
the City. The City of Sunny Isles Beach would be a valued client of our firm and we pledge to
commit all firm resources to provide the level and quality of services (as described below) which
both fit the City's needs and exceed the City's expectations.
,) ~KR~~.~~
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Continlled)
I
8.
SPECIFIC AUDIT APPROACH
SCOPE I WORK PRODUCTS I RESULTS
I
BKR Garcia will perform an audit of the government-wide financial statements and related
governmental funds financial statements for the fiscal years ending September 30, 2007, 2008 and
2009, in order to express an opinion on the fair presentation of the City's financial statements in
conformity with accounting principles generally accepted in the United States of America. Our audit
will be conducted under Auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States; the Office of Management and Budget Circular A-
133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550
Rules of the Auditor General. Our audit will include procedures to determine whether the
operations of the City are properly conducted in accordance with legal, regulatory, grant and
contractual requirements, including Florida Statutes, Federal Laws and the City Commission's
policies and procedures.
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We will provide an "in relation to" report on the combining and individual fund financial statements
and supporting schedules based on the auditing procedures applied during the audit of the general-
purpose financial statements, and perform certain limited procedures involving required
"Management's Discussion and Analysis" and supplementary information required by the
Governmental Accounting Standards Board.
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We will also:
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~ Determine the financial report the City filed with the Department of Banking and Finance is in
agreement with the financial statements for each fiscal year.
~ Assist the City in complying with the requirements of the Auditor General regarding the City's
assessment of its financial condition.
>- Prepare a management letter pursuant to the requirements of the Auditor General of the State of
Florida.
>- Assist with the preparation of depreciation schedules for government-wide statements.
>- Assist with the preparation of schedule of state and federal awards.
>- Prepare data collection form.
>- Assist with the preparation of the Comprehensive Annual Financial Report (CAFR) for submission
to the Government Finance Officer Association (GFOA) of United Sates and Canada for
consideration in obtaining the Certificate of Achievement for Excellence in Financial Reporting.
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The firm will issue the following reports in accordance with applicable rules and standards no later
than February 28, 2008 for fiscal year 2007 and by January 31 of each subsequent fiscal year:
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~ Report on an audit of the financial statements conducted in accordance with auditing standards
generally accepted in the United States of America, and the standards applicable to financial
audits contained in Government Auditing Standards, issued by the Comptroller General of the
United States.
~ Report on Internal Control over Financial Reporting and Compliance and Other Matters based on
an audit of Financial Statements in Accordance with Government Auditing Standards.
~ Report on Compliance and Internal Control over Compliance Applicable to each Major State and
Federal Programs in accordance with OMB Circular A-133.
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Co/ltill/led)
8.
SPECIFIC AUDIT APPROACH (Colltillued)
SCOPE I WORK PRODUCTS I RESULTS (Colltillued)
The firm will prepare a management letter in accordance with the requirements of the Auditor
General of the State of Florida and will include material and other reportable conditions as follows:
,. Whether errors, irregularities reported in the preceding audit report have been corrected;
,. Whether recommendations made in the preceding audit report have been implemented;
,. If applicable, whether any errors or irregularities reported by or any recommendations made by
the preceding auditor concerning the preceding fiscal year have been corrected or
implemented;
,. Violation of the laws, rules and regulations discovered within the scope of the audit;
,. Illegal expenditures discovered within the scope of the audit;
,. Improper or inadequate accounting procedures;
,. Failure to properly record financial transactions;
,. Other inaccuracies, irregularities, shortages, fraud or defalcations, if any, discovered by the
firm;
,. Recommendations to improve management, accounting procedures and internal controls and
to increase efficiency.
Our approach to developing the report on our findings is particularly important given the increasing
financial pressures and public scrutiny facing today's public officials. Our report will include
pertinent findings, cause, effect, recommendations for improvement, and suggestions for
recommendation implementation, as appropriate. It will also include written response from
management.
We will make suggestions to improve the City's performance, procedures, and controls.
Any recommendations for operational improvement will be reasonable and constructive. If your
management has already identified a relevant issue, our report will reflect this fact. Further, items
included in our report will withstand the basic tests of corrective action:
,. recommendations must be cost effective;
,. recommendations must be straightforward and reasonable to implement;
,. recommendations must address the core issue, not just the symptom; and
,. the corrective action must consider why the deficiency occurred;
,. where applicable and feasible, we will quantify the effect of our recommendations.
To ensure full agreement with the circumstances, we will fully discuss each item with the
appropriate City personnel prior to the final exit conference. We will discuss pertinent issues only
after preliminary communication with the responsible City personnel. This policy means there will
be no "surprises" in the report and fosters a professional, cooperative atmosphere.
Because we wish to assist you in identifying and solving problems before they become critical, we
will provide feedback on more than just the items identified in the report. Our report will,
communicate reportable conditions or other instances of non-compliance and will also recommend
suggestions for improving operational efficiency, including decreasing costs, improving
management information effectiveness, protecting assets, etc.
,) ~KR~.:~
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(ContinI/cd)
8. SPECIFIC AUDIT APPROACH (Col//il/lled)
AUDIT METHODOLOGY AND WORK PLAN
Depending on if City staff responds to our audit team's requests for information in a timely fashion with
complete, well-supported and accurate work product and accounting records, the following audit plan
timeline would be followed:
INTERIM WORK
Interim work will be performed throughout the year, as considered necessary, and will be completed by
September 15 of each year.
PLANNING STAGE
Entrance conference with the City Manager, all key Finance Department personnel and Department
Heads will be held in August of each year. A detailed plan and a list of audit schedules will be submitted
to the City Director of Finance and Administration by August 31 of each year.
FIELD WORK ST AGE
Field work will commence in November and be completed in December 31 of each year.
REPORTING STAGE
A draft and recommendation to Management will be submitted to the City by January 15 of each year.
We will discuss all significant findings with the City Manager, Finance Director and Department Heads.
An exit conference will be held with the Finance Director, key Finance Department personnel and the City
Manager before the final report is issued. The final report will be prepared as soon as the draft conversion
report has been reviewed by Management and will be submitted no later than February 28,2008 for fiscal
year 2007 and by January 31 of each subsequent fiscal year. We will attend the next City Commission
meeting to discuss the report and make a final presentation.
PROGRESS CONFERENCES THROUGHOUT THE AUDIT
An entrance and exit conference will be held. Progress conferences will be held throughout the audit with
the City's Staff, or at any time it appears: scheduled completion dates may be in jeopardy; the audit
detects apparent violations of law or apparent instances of misfeasance, malfeasance or nonfeasance by
an employee; information is discovered that indicates that defalcations may reasonably be anticipated;
material weaknesses in internal controls are detected.
YEAR ROUND INVOLVEMENT
We will provide period reports throughout the year assessing the impact of any significant regulatory
changes; i.e. accounting or reporting developments proposed and/or adopted by Government Accounting
Standards Boards/Financial Accounting Standards Board or any other significant financial/accounting
matters that may affect the City. Furthermore, we will respond to any question or inquiries within two (2)
working days. Emergency requests will be addressed within eight (8) business hours.
) ~KR~"~~
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Colltilllled)
8. SPECIFIC AUDIT APPROACH (CuI/IiI/lied)
I
SEGMENTATION OF THE PROJECT
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Our approach to the audit engagement integrates the best of traditional auditing techniques with a
total systems concept. We will consider the methods used by the City to process accounting
information when planning our audit. We will include your specific requirements.
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Phase 1 - Preliminarv PlanninQ
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A thorough understanding of the City's service objectives and operating environment is essential for
the development of an audit plan and for an efficient, cost-effective audit. During this phase, we will
meet with appropriate personnel to obtain and document our understanding of your operations and
service objectives and, at the same time, give you the opportunity to express your service
expectations. Our work effort will be coordinated so that there will be minimal disruption to your
staff.
Appropriate Planning and Resulting Effective Utilization of City Staff
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BKR Garcia understands the significance and necessity of proper planning as it relates to
performance of a successful and timely audit. An important aspect of proper planning is our
Engagement Partner's advance coordination with and specific instruction to the Finance
Department, resulting in an efficient utilization of staff regarding both preparations of supporting
schedules and reconciliations in addition to essential document! record gathering.
The reason we can confidently assert the aforementioned is due to our firm's 30 years of
governmental auditing experience and applicable total five decades of governmental auditing
experience of assigned Management-level team members.
During this phase we will perform the following activities:
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., Meet with staff to obtain knowledge of operations.
,. Review the work papers of the prior auditor
., Prepare an audit planning memorandum for review and approval. This memorandum will
include, among other things, audit objectives, deliverables, scope and approach.
,. Analytical procedures are applied in this stage of the audit to assist in planning the auditing
procedures to be used to obtain evidential matter for specific account balances or classes of
transactions.
,. Review the regulatory, statutory and compliance requirements governing the City. We will
review applicable federal laws, grant requirements, state statutes, resolutions, contracts, other
agreements, your specific requirements and minutes of meetings of Commission applicable to
its operation and various committees.
,. Review major sources of information such as budgets, organization charts, procedures
manuals, financial systems, and management information systems.
,. Obtain an understanding and document the City's internal control over Environment / Data
Processing.
Consider the methods the City's uses to process accounting information. This consideration
includes obtaining adequate knowledge about the design of relevant policies, procedures, and
records, and whether they have been placed in operation by the City.
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Co/lti/lued)
8. SPECIFIC AUDIT APPROACH (Col//il/lled)
SEGMENTATION OF THE PROJECT
(Continued)
After obtaining an understanding of your controls, service objectives, deliverables and your
expectations, we will identify specific areas of risks and develop pertinent audit programs to perform
required test work.
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The activities are as follows:
y Assess risk
y Determine the appropriate testing procedures and develop corresponding audit programs
, Identify and resolve pertinent auditing issues
Phase /I - Perform Audit Plan
The audit team will complete a major portion of testing during this phase. The procedures
performed will enable us to identify matters that may affect our work or require the attention of your
management.
During this phase we will perform the following activities:
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, Perform tests of controls and performance test work. Appropriate test work will encompass all
major transaction cycles, including cash receipts, revenues, cash expenditures, procurement,
and payroll
, Perform tests of compliance with laws, regulations, contracts and the City's policies
, Perform analytical procedures
Review test results and preliminary conclusions.
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Phase 11/ - Completion and Delivery
In this phase of the audit, we will complete the tasks related to the closing of year-end balances and
financial reporting. This will include final testing in the areas of compliance, balance sheet
accounts, revenue and expenditures, among others. All reports will be reviewed with management
before issuance, and the partners will be available to meet with Management, and the City
Commission to discuss our report and address any questions they may have.
We enhance our presentations to the Board by preparing financial highlights analysis. This
brochure makes extensive use of graphs and charts to communicate some of the more important
trends and activities occurring in the financial area.
Our report will include the requirements of Government Auditing Standards and will include the
following:
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y Audit objectives, scope and methodology
., Audit findings containing the elements of criteria, condition, effect and cause
Recommendations for actions to correct problems and to improve operations
, Audit was made in accordance with generally accepted auditing standards and Government
Auditing Standards
., All significant instances of non-compliance, abuse and illegal acts
, Our work on management and data processing controls and significant weaknesses found
, Management response to our findings and recommendations
") ~KR~~.:~
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
( COI//il/lIed)
8. SPECIFIC AUDIT APPROACH (Colltillued)
LEVEL OF STAFF AND NUMBER OF HOURS
To achieve the proper balance between the ability to recognize problems and the cost in performing
the services, a significant portion of the engagement will be performed by our Management Team.
We emphasize utilizing our highest experienced personnel because of their experience, training
and education and corresponding abilities to recognize problems and deal with them expediently.
SUBSEQUENT
YEARS
PROCEDURES
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PRELIMINARY PLANNING
Preliminary discussions - entrance meetings ,/
Obtain understanding of service objectives ,/
Perform Interim work / prepare audit planning memorandum ,/
Review minutes and other agreements ,/
Identify significant issues, review, evaluate and document internal controls ,/
Assess risk ,/
PERFORM AUDIT PLAN
Develop detailed audit programs ,/
Test internal controls ,/
Test compliance with laws, regulations, contracts, grants and the Town's policies ,/
Substantive test of revenues, expenditures, procurement, payroll, etc. ,/
COMPLETION AND DELIVERY
Complete review for subsequent events and obtain management representations ,/
Prepare reports ,/
Review draft of all reports for subsequent events and obtain management representations ,/
Issue report on findings and management letter ,/
Attend meetings with Management and Commission, as required ,/
Preliminary Planning: The Partners will complete approximately 40% of this segment
The Managers will complete approximately 40% of this segment
The Supervisor/Senior Accountant will complete approximately 20% of
this segment
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Continued)
8. SPECIFIC AUDIT APPROACH (Co/llilllledj
LEVEL OF STAFF AND NUMBER OF HOURS (continued)
Performing Audit
Plan Segment:
The Partners will complete approximately 10% of this segment
The Managers will complete approximately 45% of this segment
The Supervisor/Senior Accountant will complete approximately 20% of
this segment
Completion/Delivery:
Segment:
The Partners will complete approximately 40% of this segment
The Managers will complete approximately 30% of this segment
The Supervisor/Senior Accountant will complete approximately 30% of
this segment
SAMPLE SIZES AND STATISTICAL SAMPLING
Our professionals will utilize sampling methodologies designed to ensure effective audit procedures
are applied in the most efficient manner.
Samplinq Techniques
We will utilize representative audit sampling procedures with respect to tests of transactions and
tests of controls, where a sample of documentation is to be tested as the principal evidence of a
control. During tests of controls, the tests will generally consist of a combination of corroborative
inquiry and either observation, examination of documents or re-performance. We will use attribute
sampling to test documentary evidence as documentation will be the prime corroborative evidence
of identified controls.
Statistical and Non-statistical Samplinq
Tests of transactions and tests of controls can be performed using either statistically or non-
statistically based techniques. Statistical approaches will be based on our calculation of risk
factors. If a non-statistical approach is deemed appropriate, we will design our procedures to
obtain levels of assurance that we judge to be equivalent to those required when using statistically
based techniques.
Sample Sizes
For tests of controls, sample size will be based on the planned or supported assessed level of
control risk and the number of planned or actual deviations expected. For transactions test work,
sample size will be a function of population, materiality, and risk factors.
USE OF EDP SOFTWARE IN THE PROJECT
We are actively committed to using computer-based audit techniques. Our knowledge of
information systems (IS) and the use of personal computers yield significant savings in the time
required to complete an audit.
Today's marketplace provides firms, large and small, national and local, with sophisticated
computer-aided audit tools necessary to perform data analysis and report generation. Software
products, such as Audit Command Language (ACL) for Windows, are used to analyze data and
produce reports.
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Continl/ed)
8. SPECIFIC AUDIT APPROACH (Continued)
USE OF EDP SOFTWARE IN THE PROJECT
(Continued)
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A client's IS environment influences the nature, timing, and extent of planned auditing procedures.
Because most of our clients utilize computerized accounting systems, our professional team is
experienced with various IS systems. As computers have become more integral to the financial
management system, we have met the challenge by incorporating new audit techniques into the
audit process. Staff members are trained on new software and are skilled in a wide variety of
computerized applications.
Each member possesses their own laptop computer equipped with pertinent audit-related software.
We will utilize Prosystem FX for Windows, ACL for Windows, database programs and spreadsheet
applications for auditing purposes.
An important component of our audit is the review of IS general controls. We understand that the
effectiveness of many client control procedures is dependent on reliable computer-generated data
which result from proper IS general controls. Therefore, we will analyze these controls to determine
the adequacy of the internal control environment.
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Our IS expertise, combined with extensive auditing and consulting experience means that we
understand the technical intricacies of complex information systems in the context of real-world
application.
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Utilizing this expertise we will be able to:
,. evaluate IS general controls within the computer environment;
,. document critical transaction processing systems;
,. identify key processes and controls within these transaction processing systems;
,. evaluate the effectiveness of identified controls;
,. advise the audit team on results of the evaluation and effect on planned audit procedures;
,. design, develop and execute computer-assisted audit techniques using computer audit
software packages;
,. assess the internal controls
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ANALYTICAL PROCEDURES
Statement of Auditing Standards on Analytical Procedures, provides guidance on the use and
extent of analytical procedures in all audits. Analytical procedures are required in the planning and
overall review stages of the audit, and are used in the following areas:
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Audit Planning
Analytical procedures can provide great insight in planning an audit. These analyses can enhance
our understanding of the City's transactions and events that may have occurred during the year
under audit. We compare the current balances to the prior year and to the current budget.
Isolating significant differences can identify areas that may require additional attention during the
field work. For example, such a review could identify a new revenue source for which we would
need to obtain documentation supporting the authority for collecting such monies.
J BKR~.~~~
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Co/lti/ll/ed)
8. SPECIFIC AUDIT APPROACH (Continued)
ANAL YTICAL PROCEDURES
(Continued)
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Substantive Tests
Analytical procedures can be used as effective substantive tests in certain circumstances, for
example, testing certain payroll related expenditures, such as payroll taxes, which are a specific
percent of wages.
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Overall Review
Analytical procedures used at the conclusion of the audit are designed to assess the conclusions
reached and evaluate the overall financial statement presentation.
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INTERNAL CONTROLS
The internal control segment is the foundation for the entire audit and involves an extensive
understanding and evaluation of the City's operating and management information systems and all
related internal controls. The results of this evaluation will influence the nature, timing and extent of
our substantive audit procedures. This approach ensures that we achieve maximum efficiency and
provides valuable feedback to management regarding the effectiveness of controls being relied
upon throughout the year.
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A thorough understanding of the internal control structure of an organization is critical in planning
our audit procedures and providing useful comments and recommendations to the City. BKR
Garcia utilizes a standardized control overview document which assists us in identifying key
elements within internal control, such as the entity's risk assessment process, the control
environment, information and communication systems, and general monitoring and control
activities.
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Our evaluation of internal control includes considering the individual components noted above and
then considering the effectiveness of internal control as a whole. We will obtain our understanding
of each of the elements through the following procedures:
;... Meeting with the City personnel to discuss operations; and
;... Reviewing internal assessment of internal control
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The control overview document helps to ensure that all elements of internal control are considered.
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Subsequently, for significant internal control structure categories, we will obtain an understanding of
the design of relevant policies and procedures, determine whether such procedures have been
placed in operation and assess control risk. This review begins by holding interviews with data
processing and accounting personnel and evaluating your internal system and accounting
documentation. We will then prepare documentation of the major systems. To the extent it is
available; we will also use internal control documentation currently available. This review is
organized into major accounting cycles.
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Colltilllled)
8. SPECIFIC AUDIT APPROACH (Co/1ti/1l1ed)
INTERNAL CONTROLS
(Continued)
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We have found through our experience that there are two primary methods to test controls.
Documented controls - Tested by reviewing a sample of transactions for evidence that the
control was being performed.
y Undocumented controls - Tested through inquiry and observation procedures with
appropriate department personnel.
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LAWS AND REGULATIONS
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Statement on Auditing Standards from the American Institute of Certified Public Accountants,
establishes standards for testing and reporting on compliance with laws and regulations. In all
financial statement audits, the auditor must consider laws and regulations that have a direct and
material effect on the financial statements. Further, the auditor designs audit procedures to provide
reasonable assurance that the financial statements are free of material misstatements resulting
from violations of these laws and regulations that have a direct and material impact on the financial
statements. For governmental entities, this requirement is even more important given the variety of
legal and contractual considerations typical of the government environment.
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Identifying applicable laws and regulations is fundamental to fulfilling the responsibility of
understanding their effects. We will obtain this knowledge through the following sources:
;... Discussion of compliance requirements with the City officials, including legal counsel.
;... Identification of compliance matters in statutes, financial ordinances, City policies, contracts,
grants and debt agreements.
y Review of City Commission meeting minutes.
Inquiries of the program administrator of the governmental entities that provided grants about
restrictions, limitations, terms and conditions under which such grants were provided including
review of the OMB Circular A-133 Compliance Supplement and the Florida Single Audit Act.
;... Our existing knowledge of federal and state laws.
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AUDIT SAMPLES FOR TESTS OF COMPLIANCE
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Tests of compliance with laws and regulations are included with the tests of transactions and
controls, when practical. Additional samples are sometimes necessary to test specific laws and
regulations. Sample sizes for compliance testing are determined based on the number of
transactions and the significance of the requirement.
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Col/tilll/ed)
8.
SPECIFIC AUDIT APPROACH (Col/til/I/ed)
CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING
We will assist the City in obtaining the Certificate of Achievement for Excellence in Financial
Reporting to the full extent possible that will not comprise our independence based on the guidance
provided by GAAS and GAGAS.
We will help you in drafting the components of the basic financial statements and will review the
City's Comprehensive Annual Financial Report (CAFR) using the most recent GFOA review
committee checklist to ensure that all applicable requirements were satisfactorily covered.
In addition, we will ensure compliance with the submission deadline of no later than six (6) months
after the end of fiscal year by completing the CAFR and submitting all required audit reports before
February 28, 2008 for fiscal year 2007 and every January 31 of the succeeding fiscal year.
MANAGEMENT LETTER
As an integral part of the our audit, we will prepare a report on all matters which come to our
attention where improvements could be made with respect to the internal accounting structure and
management controls and operating and administrative efficiency.
These matters will be discussed with the affected departmental representatives, City Manager and
Finance Director to obtain their views and observations. These reports can help protect assets and
provide meaningful information to guide management decisions. This approach enables us to
provide recommendations to our clients who are practical and relevant to their operations.
The types of recommendations and observations we would include in our report are as follows"
y Recommendations arising from current evaluation of the internal control structure.
y Recommendations made during previous audits not implemented which warrant
considerations.
y Exceptions to policy directives, rules and regulations.
y Accounting performance suggestions where we believe accounting performance could be
improved.
y Other matters which we believe should be brought to the attention of the Commission.
y Our experienced team will be alert to areas operation, where revenues can be increased,
cost reduced. Or controls improved. Although the City is a governmental entity, its
responsibilities and objectives are comparable to those of a business enterprise. Because
of our "businessman's approach" to auditing and our interest on your business, we are not
only able to meet your audit needs but also to provide you with valuable ideas for your
assistance in increasing the efficiency of your operations, developing more useful
management information, and improving the use of your resources. We will issue
suggestions on these and other matters that will receive your prompt attention. Our
recommendations will be made on an informal basis during the audit and also in a letter
report accompanying the audit report after the audit's completion.
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Colltillued)
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8.
SPECIFIC AUDIT APPROACH (COIl/illlled)
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MANAGEMENT LETTER
(Continued)
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Application of this approach to developing our management letter is particularly important given the
increasing financial pressures and public scrutiny facing today's public officials. In our experience,
no audit finding is complete unless it contains three fully developed areas. These are observations,
background, and recommendations. Audit findings are described as an "observation" or "condition",
and these conditions are measured against criteria or "what should be". We determine the
"background" or the cause for the condition, its effect both in quantitative and qualitative terms.
After the determination of the condition, cause and effect, recommendations including solutions
when appropriated, are developed for the client to consider in deciding on improvements or
corrective action. In our judgment, it is insufficient to make an observation or a problem or a
recommendation which simply says "don't do that". Recommendations should full consider who
could implement them, how it could be done and when.
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In Appendix III, we included copies of three recent management letters we issued in connection
with our local government audits.
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FRAUD
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During the course of the audit we will follow the requirements of SAS No. 99, Consideration of
Fraud in a Financial Statement Audit. We will gather information needed to identify risk of material
misstatement due to fraud by making inquiries of the City's management and employees about
fraud or suspicion of fraud, assess the risk after taking into account an evaluation of the City's
program and control, and design audit procedures to identify fraud. If any fraud is identified as a
result of the inquiries or audit procedures, these will be properly communicated to the appropriate
level of management.
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QUALITY CONTROL AND CONFIDENTIALITY
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BKR Garcia participates in an external quality review program requiring an on-site independent
examination of our accounting and auditing practice. BKR Garcia and Company has consistently
received an unqualified opinion on the quality of our audit practice. During our firm's last external
quality control review, seven audits were reviewed, including six government audits. A copy of the
report on the firm's most recent quality review is included in Appendix II.
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In addition to scheduled Peer Reviews, BKR Garcia continually monitors performance to ensure the
highest quality of services. Under the supervision of three audit partners, an audit manager is
responsible for monitoring quality control of all appropriate engagements.
Only professional staff that works on an engagement has access to client information. It is our
policy to obtain from each staff a signed client confidentiality agreement.
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Continued)
9. IDENTIFICATION OF ANTICIPATED AUDIT PROBLEMS
We are aware of the uniqueness of the City and will anticipate any issues by addressing them at
their early stages.
We do not know of any potential audit problems. If requested, BKR Garcia can be involved
throughout the entire year, at no extra cost, by providing assistance in current and new evolving
issues.
Smooth Transition
BKR Garcia's transition will be smooth, with minimal disruption of the City's staff and operations.
We can make this assurance because we are experienced in transitioning a number of
governmental engagements. Our transition process assures the City that:
>- only staff with directly relevant experience and genuine interest in serving the City will be
assigned;
>- all of our staff will be thoroughly oriented to the City, its activities, organization and
management;
>- our staff, at all levels, will familiarize themselves with the City's responsible staff and the
areas in which they operate, and ensuring our staff will be immediately available to serve the
City; and
>- the City realizes benefits right from the start including a fresh look at the City's control and
systems.
10. WORKING PAPER RETENTION AND ACCESS TO WORKING PAPERS
All working papers will be retained in accordance with requirements and procedures set forth by the
General Records Schedule for Local Governmental Agencies as promulgated by the Division of
Archives, History and Records Management (a division of the Florida Department of State) at BKR
Garcia's expense. Furthermore, working papers will be available for review, upon request, to the
following parties or their designees:
>- City of Sunny Isles Beach,
>- U.S. Government Accountability Office (GAO),
>- Auditors of entities of which the City of Sunny Isles Beach is a sub-recipient of grant funds,
>- Parties designated by the federal or state governments or by the City of Sunny Isles Beach
as part of an audit quality review process,
>- Successor auditors.
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL
(Co/lti/ll/ed)
COST PROPOSAL
Our proposed fees to perform financial audit for fiscal years ending September 30, 2007, 2008, and
2009 for City of Sunny Isles Beach are as follows:
Financial Statements CAFR Single
Fiscal year Audit Fees Assistance Audit
2007 47,500 15,000 7,500
2008 50,000 15,000 8,000
2009 52,500 15,000 8,500
Our hourly rates to perform other services are outlined below:
Partner
Manager
Senior Accountant
Staff
$ 250
190
130
100
) !!?~~.~~~
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SECTION VI.S - REQUIREMENTS OF THE TECHNICAL
PROPOSAL
(Continued)
Conclusion
BKR GARCIA IS THE "RIGHT"
CHOICE FOR
CITY OF SUNNY ISLES
BEACH
BKR GARCIA PLEDGES THE FOllOWING
GUARANTEES:
We will:
Q Provide a qualified and experienced audit team possessing
knowledge of the operation and administration of the City of
Sunny Isles Beach' compliance and legal requirements, and
accounting and reporting for operations pursuant to auditing
standards and legal requirements
o Demonstrate our commitment to quality client service
through:
) ease of accessibility
)> prompt response to questions, comments, or requests
.> insight and suggestions regarding internal controls,
management, and operation, as proper, for both
financial and compliance considerations
Q Provide value and services above and beyond
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SECTION VI.B - REQUIREMENTS OF THE TECHNICAL
PROPOSAL (ContinI/I'd)
Conclusion
(Continued)
CI Coordinate with the City of Sunny Isles Beach' personnel, to
ensure minimum disruption and maximum contribution of City
staff
CI Develop and maintain open lines of communication with the City
to help expedite the audit process and avoid awkward end-of-
engagement "surprises"
The partners and staff of BKR Garcia are committed to
providing the City of Sunny Isles Beach with our resources
and specialized expertise. We vow to work closely with the
City's staff to accomplish not only those minimum
requirements set forth in your Request for Proposal, but to
exceed these expectations.
~ ~KR~.~~
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APPENDIX I - LICENSE TO PRACTICE IN FLORIDA
l......
AC'
ST ATE OF FLORIDA
DEPARTMENT OF BUSINESS ~ PROFESSIONAL RBGULATIOH
BOARD OF ACCOUNTANCY SEQ#Lo5100&OOSSl
; . LI CENSE NBR
10 06 2005 050297883 AD64298
The ACCOUNTANCY CORPORATION
Hamed below IS LICENSED
Under the provisions of Chapter 473 FS.
Expiration dat.: DEC 31, 2007
BKR GARCIA & COMPANY PLLC
1110 BRICKELL AVENUE
SUITE 901
MIAMI FL 33131
JEB BUSB
GOVERNOR
SIMONE MARSTILLER
SECRBTARY
OISPLAY AS REQUIRED BY LAW
AC;
STATE OF FLORIDA
DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION
BOARD OF ACCOUNTANCY SEO#L06102S0047i
__LICENSE NBR
IloJ4$jaQ061Q~0261.392 IACOOI0158
The CERTIFIED PUBLIC ACCOUNTANT
Namod below IS LICENSED
under the provisions of Chapter 473 FS.
Expiration datel DEe 31, 2008
i ~ ::
LLERENAl PABLO RAMON
111 NE .L STREET
5TH FLOOR
MI~ FL 33132
JEB BUSH
GOVERNOR
DISPLAY AS REQUIRED BY LAW
SIMONE MARSTILLER
SECRETARY
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APPENDIX I - LICENSE TO PRACTICE IN FLORIDA
") I .,
ACI c.. ">.1 .'
STATE
DEPARTMENT OF BUSINESS AlTD PROFESSIONAL REGULATION SEQ#L05110l00538
BOARD OF ACCOUNTANCY
1 . LICENSE NBR
11 03 2005 058022369 AC37602
The CERTIFIED PUBLIC ACCOUNTANT
Named bolow IS LICENSED
Onder the provisions ot Chapter 473 PS.
Expiration date: DEC 31, 2007
CIIAXMAS, ANDRE NESTOR
9124 S.W. 65 STREBT 33173
MIAM~ PL
JEB BUSH
GOVERNOR
SIMONE MARSTILLER
SECRETARY
DISPlA Y AS REQUIRED BY LA~__
STATE OF FLORIDA
DBPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION
BOARD OF ACCOUNTANCY SEQ#L0610:lS00H1
LICENSE NBR
10 25 2006 060261392 ACOOOS784
The CERTIPIED PUBLIC ACCOUNTANT
Named below IS LICENSED
Under the provisions of Chapter
Expiration date: DEC 31, 2008
AC~ ) ~J i -. ;':'-}
473 FS.
GARCIA, MANUEL
111 NE 1ST ST 5TH FLOOR
MIAMI PL 33131
JEB BUSH
GOVERNOR
SIMONE MARSTILLER
SECRETARY
DISPLAY AS REOUIRED BY LAW
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APPENDIX 11- QUALITY CONTROL REVIEW
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~CPA
~ASSOCIATES
Certified Public Accountants
and Consult.1nts
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September 30, 2004
To the Shareholders
Grau & Company, P.A.
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We have reviewed the system of quality control for the accounting and auditing practice of Grau
& Company, P.A. (the firm) in effect for the year ended June 30, 2004. A system of quality
control encompasses the firm's organization structure and the policies adopted and procedures
established to provide it with reasonable assurance of confonning with professional standards.
The elements of quality control are described in the Statements on Quality Control Standards
issued by the American Institute of Certified Public Accountants (the AICPA). The design of the
system, and compliance with it, are the responsibilities of thc firm. Our responsibility is to
express an opinion on the design of the system, and the firm's compliance with that system based
on our review.
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Our review was conducted in accordance with standards established by the Peer Review Board
of the Alep A. In performing our review, we obtained an understanding of the system of quality
control for the firm's accounting and auditing practice. In addition, we tested compliance with
the firm's quality control policies and procedures to the extent we considered appropriate. These
tests covered the application of the firm's policies and procedures on selected engagements.
Because our review was based on selective tests, it would not necessarily disclose all weaknesses
in the system of quality control or all instances of lack of compliance "lth it.
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Because there are inherent limitations in the effectiveness of any system of quality control,
departures from the system may occur and not be detected. Also, projection of any evaluation of
a system of quality control to future periods is subject to the risk that the system of quality
control may become inadequate because of changes in conditions, or because the degree of
compliance with the policies or procedures may deteriorate.
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In our opinion, the system of quality control for the accounting and auditing practice of Grau &
Company, P.A. in effect for the year ended June 30, 2004, has been designed to meet the
requirements of the quality control standards for an auditing practice established by the AICPA
and was complied with during the year then ended to provide the firm with rea<;onable assurance
of conforming with professional standards.
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CPA Associates
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Memb<iors; . Arn~rican In:l-tituh.' n(C~'rt.ifit"(l Public A('I"Ountall~ . SJ.:C t,"actiN' ~('tioll . Private Complluit'o\! Pwctil'l' St,dion . FIQrida (nHtiLut..- ofC\,r\ifh.d Public Accl"luntflnts
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APPENDIX 111- MANAGEMENT LETTERS DEVELOPED AND
ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
BKR GARCIA & COMPANY
~,,'.
ce r I ifi ed p uhf i C IICCO U n I II n ts
MANAGEMENT LETTER PURSUANT TO THE RULES OF
THE AUDITOR GENERAL FOR THE STATE OF FLORIDA
To the Honorable Mayor, City Commissioners
and City Manager
City of Lauderhill, Florida
We have audited the basic financial statements of the City of Lauderhill, Florida, as of and for the year ended
September 30, 2005 and have issued our report thereon dated May 4, 2006. We did not audit the financial
statements of the City's Pension Trust Funds, which represents 100% of the assets, revenues and deduction
of the fiduciary fund totals. Those financial statements were audited by other independent auditors whose
reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for the
Pension Trust Funds, are based solely on the report of the other independent auditors.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States, OMS Circular A-133, Audits of States. Local Governments.
and Non-Profit Organizations and Chapter 10.550, Rules of the Auditor General. We have issued our
Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other
Matters, Independent Auditor's Report on Compliance and Internal Control over Compliance Applicable to
each Major Federal Awards and State Financial Assistance Projects in Accordance with OMS Circular A-133
and Chapter 10.550, Rules of the Auditor General, Summary Schedule of Prior Audit Findings, and Schedule
of Findings and Questioned Costs. Disclosures in those reports and schedules, which are dated May 4,
2006, should be considered in conjunction with this management letter.
The purpose of this letter is to comment on those matters described in Rule 10.554(1)(h) as required by the
Rules of the Auditor General for the State of Florida. Accordingly, in connection with our audit of the basic
financial statements of the City of lauderhill, Florida, as described in the first paragraph, we report the
following:
I. Current year fIndings and recommendatIons.
II. Status of prior year findings and recommendations.
III. Compliance with the ProvisIons of the Auditor General of the State of Florida.
This report is intended for the information of the City of Lauderhill, Florida's. management and the Auditor
General of the State of Florida and is not intended to be and should not be used by anyone other than these
specified parties.
We wish to thank the City of Lauderhill, Florida, and the personnel associated with it, for the opportunity to be
of service to them in this endeavor as well as future engagements and the courtesies extended to us.
BK P- G~ f Co"t"i
May 4. 2006 ~
PlLC
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
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CURRENT YEAR FINDINGS AND RECOMMENDATIONS
05-1
Monthly Reconciliation of Subsidiary Ledger with General Ledger
Condition
We noted during our audit that there was no formal reconciliation of Utility Accounts
Receivable subsidiary ledger with general ledger resulting in various adjustments at year-
end.
In addition, we also noted that the City did not perform monthly reconciliation of statement of
accounts for its investments with the general ledger control accounts.
Reconciliation and related verification ensures validity and integrity of the accounting system
and these must be regularly and consistently performed to assure proper performance of
internal control responsibilities designated to accounting personnel.
Recommendation
We recommend that the City perform a monthly reconciliation of the receivable subsidiary
ledger balance with general ledger control accounts and any differences noted be
investigated and resolved immediately to ensure that the financial reports are fairly stated
and reliable for decision-making at any given time.
We also recommend that the monthly statement of accounts received from the investment
agency be reconciled with the general ledger to ensure that all transactions made in the
investment portfolio are properly reflected and accounted in the accounting records.
ManaQement Response
Management is currently reviewing all utility accounts on a bi-monthly basis as part of our
billing process. Based on the fact that our accounts are registered in the owner of the
property's name, there is less of a need to review the utility accounts; because this is an
unrecorded lien that we collect, in full, upon any change in ownership. In addition, we provide
bi-monthly bills and delinquent notices to all delinquent account holders.
Due to the limited number of transactions in our investment accounts, a quarterly
reconciliation of the investment accounts was sufficient. However, since we received funding
for the Great Neighborhood Bond in August 2005, the number of transactions in our
investment account has increased; therefore, we have started reconciling our investment
accounts on a monthly basis.
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
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CURRENT YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
05-2 Fixed Assets System
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Condition
During our audit, we noted several issues associated with the internal control over fixed
assets as follows:
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a) No formal detailed record of assets is maintained. Currently, the Finance Director has a
summary of fixed assets on an Excel spreadsheet to facilitate calculation and recording
of the depreciation expense. However, we cannot ascertain its completeness to ensure
that all fixed assets owned by the City are included in the list.
b) Not all City properties were tagged as City's property.
c) No periodical physical inventory of fixed assets is performed.
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Internal control over fixed assets is essential in helping the City to ensure that its fixed assets
are being properly accounted for and that misappropriation or other inappropriate activity is
not occurring. By not having the controls in place, the City is exposed to possible loss. In
addition, the City cannot ensure that it is meeting its fiduciary responsibility over
administration of public resources.
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Recommendation
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We recommend that the City develop and adopt written policies and procedures to ensure
fixed assets are properly monitored and accounted for. In addition, management should take
steps to ensure that these policies are adhered to and properly applied.
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ManaQement Response
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Management will update its current policy to ensure that all fixed assets are accounted for
and tagged with a City property control tag. In addition, the management has purchased an
automated fixed asset program to receive, tag and depreciate all new and existing fixed
assets.
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05-3 Bond Covenant
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Condition
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During our test of the City's compliance on bond covenants, we noted that the City is not in
compliance with the reserve requirement provisions of the Water and Sewer Revenue Bond
Ordinance. Bond covenant requires maintenance of reserve account in an amount
equivalent to the lesser of 10% of bonds proceeds or 125% of the average annual debt
service. Our audit disclosed that the reserve account was under funded by approximately
$200,000 as of September 30,2005.
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
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CURRENT YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
05.3
Bond Covenant (Continued)
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Recommendation
We recommend that the City immediately fund the deficiency in the reserve account and
perform regular reviews to ensure compliance with provisions of the bond ordinance at all
times.
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ManaQement Response
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Due to the unusual event of the funding of the City's first General Obligation Bond in the last
quarter of the fiscal year and the depreciation in value of existing bonds, the carrying value of
the reserve account was not sufficient. However, funds were available as of September 30,
2005, in the City's operating account. Management has transferred the required funds to the
reserve account as of the date of this report and will implement a quarterly review of said
accounts to ensure sufficient reserves.
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05-4 Review of Bank Reconciliation Statements
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Condition
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The City reconciled its cash accounts on a monthly basis however, on the cash reconciliation
selected for testing, there was no evidence that a review was performed by supervisory
personnel.
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Review of the bank reconciliation statement by designated responsible staff will provide
assurance on propriety of the reconciling items and that cash transactions were completely
and timely recorded in the accounting records.
Recommendation
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We recommend review of bank reconciliation statements on a monthly basis and signing of
each reconciliation as evidence of supervisory approval.
Manaoement Response
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Currently bank reconciliations are reviewed by our Accounting Manager; however, going
forward, all reconciliations will be signed by the Finance Director.
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
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CURRENT YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
05-5 Report Submissions
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Condition
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Our test of compliance with laws, regulations, contracts and grant agreements disclosed that
the City failed to submit the following reports on a timely manner:
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Report
Annual Report of Property Presumed
Abandoned 2004
Project Specific Audit Report
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Home Grant Monthly Progress Report
Reference Due Date
Florida Statute
717.117 April 30,2005
State Revolving
Fund Loan No. May 10, 2005
894025
Interlocal Within 30 days
Agreement with after each month
Broward County -
Home Grant
Date Submitted
Not submitted as
of April 26. 2006
January 19. 2006
No monthly
reports have been
submitted
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Recommendation
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We recommend that the City develop a tracking system in order to comply with the reporting
requirements and their due dates and designate a responsible employee to monitor timely
submissions of reports.
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Manaqement Response
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Management will implement the auditors' recommendation; as for the HOME Grant. due to
the amount of time required to make the requested repairs it is not feasible for us to submit
monthly reports. This issue has been addressed with Broward County and they have agreed
to allow us to submit reports within 30 days of each completed rehabilitation job.
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05-6 Aging Analysis for Utility Accounts Receivable
Condition
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We noted during our audit that the City did not generate aging reports for Utility accounts
receivable during the year.
The aging analysis report provides a tool for management to investigate problematic. unusual
and long-outstanding customer accounts and helps the City to take timely action to recover
overdue payments and avoid bad debts.
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Recommendation
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We recommend that the City generates and reviews on a monthly basis all aging reports of
the Utility accounts receivable to maximize cash inflows to support the operation of the Utility
department.
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CURRENT YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
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05-6 Aging Analysis for Utility Accounts Receivable (Continued)
Manaoement Response
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We disagree with this finding. Management currently reviews all utility accounts on a bi-
monthly basis. This review is in conjunction with the utility billing cycle. We review past due
accounts and ensure that their accounts do not reflect any usage. In addition, bi-monthly
statements and late notices are mailed to all current and delinquent customers. Furthermore;
we have reduced the allowed outstanding balance to further induce payment, thus increasing
cash flows.
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05-7 Credit Card Policy
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Condition
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Existing credit card policies and procedures of the City do not provide limitations and
restrictions as to nature of expenditures that may be charged using the credit card. We noted
the following control weaknesses during our review of credit card transactions:
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a) We noted several charges pertaining to purchase of flowers, gift cards and donations and
these types of expenditures are prohibited expenditures using state fund as stated under
the provisions of State Department of Financial Services' Reference Guide for State
Expenditures.
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b) We also noted several credit card purchases where the purpose of the disbursement
cannot be ascertained due to lack of documentation to substantiate the charges.
Examples of these credit card charges are purchases of grocery and similar items from
various retail store chains.
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Recommendation
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We recommend that the City revise its existing policies and procedures on credit card
purchases and provide a more stringent process to limit the possibility of misuse and
misappropriation of the City's fund for personal benefits.
Manaoement Response
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Management disagrees with the auditors' interpretation of the Florida State Statue as to the
use of credit cards. The referenced policy refers to State agencies and departments, while
we believe that Home Rule allows us to implement our own policy. Management is in the
process of updating our current credit card policy and procedures to better address the
allowed uses.
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II. STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS
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04-1 Credit Card Purchases
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Condition
We randomly selected twenty-eight (28) credit card statements for testing and noted the
following exceptions:
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(a) Three (3) credit card purchases exceeding the maximum limit of $1,000 per individual
transaction.
(b) Four (4) transactions with no supporting documents attached to substantiate the nature of
purchase made.
(c) Multiple invoices issued by the same vendor on the same date for purchases of materials
and supplies; aggregate amount of these invoices exceeded $1,000.
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Recommendation
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We recommend that the City comply with the purchasing procedures as stated in the Code of
Ordinance Section 2-140 (b) requiring solicitation of at least three (3) quotations on
purchases exceeding $1,000 and refrain from overriding the established internal control
surrounding the procurement process and credit card transactions to mitigate possible usage
of credit cards for any unauthorized purposes.
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The City policy manual requires submission of weekly reports using the "credit card receipt
form". The credit card receipt form must be used to log all credit card activities and has to be
submitted to the Finance Department on a weekly basis for review and reconciliation with the
billing statement received from the Credit Card Service Provider before any payment is to be
made. Compliance with this reporting procedure should be observed to ensure that all
payments made to credit card companies are valid and authorized by the management.
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Current Year Status
We still noted similar exceptions during the year. This comment will be repeated.
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Manaqement Response
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Management is in the process of revising the current credit card policy and procedures
relating to the use of City credit cards.
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II.
STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
04-02 Travel Expenses
Condition
We tested twenty (20) travel expenses and related costs in accordance with the provisions
stated on Section 112.061 of the Florida Statute. Our review noted ten (10) disbursements
with no supporting travel authorization form attached indicating the approval of the City
Manager or any authorized Department Head.
Recommendation
Florida Statute Section 112.061 (3)(a) provides that all travel must be authorized and
approved by the head of the agency or his designated representative from whose funds the
traveler is paid. It further states that the head of the agency shall not authorize or approve
such request unless it is accompanied by a signed statement by the traveler's supervisor
stating that such travel is on the official business of the City and also stating the purpose of
such travel. We recommend that the City comply with the above provisions of the law.
Further, we recommend that the management consider attaching the approved travel form on
the check vouchers to facilitate review and future reference.
Current Year Status
The City had implemented the recommendation and no similar finding was noted during the
year. This comment will not be repeated.
04-3
Report Submission
Condition
The City failed to submit the 2003 report on abandoned properties with the Department of
Banking and Finance due on May 1, 2004, as required by Section 717.117 of the Florida
Statute. Failure of timely submission of the report may result in payment of penalties of $10
per day up to a maximum amount of $500.
Recommendation
We recommend that the City comply with the provisions of the law and submit reports on a
timely basis.
Current Year Status
The City has not submitted the 2004 report as of April 26, 2006. This comment will be
repeated.
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II. STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
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04-3 Report Submission (Continued)
Manaqement Response
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Management has drafted the required reports for FY 2004 and 2005 will submit to the State
immediately. Going forward, we assigned this task to a responsible staff member.
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04-4 Disbursement Process
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Condition
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We reviewed the control procedures surrounding the disbursement processes and noted the
following weaknesses:
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(a) Posting of vendor invoices in the accounts payable ledger is not properly segregated
from the check preparation activities.
(b) The system allows for posting of non-purchase order invoices in the accounts payable
ledger and to be processed for payment more than once.
(c) There are inadequate receiving and verification procedures for the purchase of goods
and services. Currently, the City processes invoices for payment based solely on the
approval of Department Heads without verifying that the goods and services were
actually received.
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Recommendation
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(a) We recommend that the City establish written policies and procedures that provide
proper segregation of duties and responsibilities in the Accounts Payable Function.
Personnel involved in the posting of invoices in the Accounts Payable Ledger should be
separated from the check preparation functions.
(b) We also recommend that paid vendor invoices and check vouchers be stamped "PAID"
as mitigating control to prevent possibility of processing vendor invoice for payment twice.
(c) We further recommend that the City develop policies and procedures on receiving
activities to verify and reconcile invoice details with the actual receipt of goods or services
before any payment is made.
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Current Year Status
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The City did not implement any of the recommendations during the Fiscal Year 2005. This
comment will be repeated.
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II. STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
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04-4 Disbursement Process (Continued)
Manaqement Response
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a. Management disagrees and feels that we have sufficient segregation of duties to ensure
internal control. For example, the person responsible for posting invoices does not have
the ability to print or sign checks. The entire accounts payable process involves a
minimum of four employees. which we feel provides sufficient separation of duties.
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b. Management disagrees: our current system will not allow double payment of the same
invoice. Under our current system, non purchase order purchase (check requests) is
required to submit an original invoice for payment. Our current computer system will not
allow the payment of a single invoice twice. In addition. all invoices are signed by the
accounts payable clerk to signify payment of the invoice and a copy of the check is
attached to the invoice after processing.
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c. Management will revise current purchasing and receiving policies and procedures to
ensure adequate receiving procedures. Currently, the department director for the
department of the received merchandise is required to approve all invoices to signify that
they have received merchandise and to authorize payment.
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04-5 Delinquent Accounts
Condition
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Our review of the Account Receivables Aging Analysis disclosed the existence of various
accounts that have been delinquent for more than a year. Currently, the City has no
established written policy in calculating its exposure for possible losses from uncollectible
accounts.
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Recommendation
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We recommend that written policies and procedures be established to properly compute the
allowance for doubtful accounts to ensure that amount reported in the general ledger for
accounts receivable fairly states the financial position of the City. Also. we recommend that
the management develop systematic and aggressive method of collecting these delinquent
accounts to maximize resources of available funds to support the City's operations.
Current Year Status
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Recommendation has not been implemented, this comment will be repeated.
ManaQement Response
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Currently, accounts such as lot clearing and code violations are reviewed periodically, to
address any outstanding balances. As an administrative policy, all accounts that are more
than one (1) year past due are forwarded to a collection agency to further our collection
efforts. In addition, the City records all outstanding debt that is associated with lot clearing
and code violations as a lien against the property to ensure collection upon change of
ownership.
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II. STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
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04-6 Excess of expenditures over budgeted amount
Condition
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Florida Statutes Section 166.241 (2) states that"... the budget must regulate expenditures of
the municipality, and it is unlawful for any officer of a municipal government to expend or
contract for expenditures in any fiscal year except in pursuance of budgeted appropriations."
As at September 30, 2004, we noted that the following department of the City exceeded their
expenditures over appropriated budget as approved by the Commission:
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Department
Environmental and engineering services
Police
Fire and rescue
Parks and recreation
Excess
Expenditures over
Budqet
$ 81,199
949,102
504,306
359,760
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Recommendation
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We recommend that the City comply with the provisions of Section 116.241 of the Florida
Statutes.
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Current Year Status
We noted similar findings during fiscal year 2005. This comment will be repeated.
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Manaqement Response
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Management disagrees with the auditor's interpretation of Florida Statutes Section
166.241 (2). Management's interpretation, which is supported by our City Attorney, is that the
State Statute applies to the overall City budget, which for Fiscal Year 2005 resulted in an
increase to the General Fund balance of $832,407. More specifically, general revenues
exceeded general expenditures by $832,407 for the fiscal year ending September 30, 2005.
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III. COMPLIANCE WITH THE PROVISIONS OF THE AUDITOR GENERAL OF THE STATE OF
FLORIDA
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1. Recommendations, except for those addressed in the Schedule of Findings and
Recommendations, made in the preceding annual report have been addressed.
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2. The City of Lauderhill complied with Section 218.415, Florida Statutes, regarding the investment
of public funds.
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3. There were no violations of laws, regulations, and contractual provisions or abuse, that were not
clearly inconsequential, that have occurred, or were likely to have occurred, that were
discovered within the scope of the audit except as disclosed in the Schedule of Findings and
Recommendations.
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4. There were no illegal or improper expenditures that were not clearly inconsequential, discovered
within the scope of the audit that may not materially affect the financial statements except as
disclosed in the schedule of findings and recommendations.
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5. There were no deficiencies in internal control that are not reportable conditions, including, but
not limited to, improper or inadequate accounting procedures, failure to properly record financial
transactions or other inaccuracies, shortages, defalcations, or instances of fraud discovered by,
or that came to the attention of the auditor except for finding 05-1, 05-2, 05-4, 05-5, 05-6 and 05-
7.
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6. The City of Lauderhill, Florida, was incorporated in accordance with the laws of the State of
Florida Chapter 61-2650. The City has two (2) component units namely Lauderhill Community
Redevelopment Agency incorporated in accordance with Section 163 of the Florida Statutes and
Lauderhill Housing Authority incorporated in accordance with Section 421 of the Florida
Statutes.
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7. The City of Lauderhill has not met one or more of the conditions described in Section
218.503(1 )(a), Florida Statutes.
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8. The financial report filed with the Florida Department of Financial Services pursuant to Section
218.32(1) (a), Florida Statutes agrees with the September 30,2005 financial audit report.
9. We applied financial condition assessment procedures pursuant to Rule 10.556 (8) to assess the
financial condition of the City. While the City is not currently in a state of financial emergency as
defined in Section 218.503, Florida Statutes, we believe that the results of the financial
indicators shows that the City's overall financial condition is showing signs of deterioration
which, if not corrected, could result in a future financial emergency. Eighteen (18) financial
ratios are applicable to the City, of which eight (8) were unfavorable, seven (7) were inconclusive
and three (3) were favorable. Two significant factors that contributed to the deteriorating
financial condition are the excess of expenditures over revenues for the total governmental
funds in the current and previous years and significant increase in the debt service due to
issuance of general obligation and several revenue bonds during the year. This increase in debt
service increased both the debt service expenditure and ratio of debt service to the City's
population. During the year ended 2005, eleven of the financial indicators are beginning to show
a favorable trend, however, it is only for one year and it is not sufficient to determine if this is the
beginning of a favorable trend for the City or a change for the current year only.
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CTION WITH LOCAL GOVERNMENT AUDITS
APPENDIX 111- MANA~T ~TTERS DEVELOPED AND ISSUED IN CONNE 1110 Brickell Avenue, Suite 901
.. JjJ\.K lIAReIA & COMPANY Miami, Florida 33131-3132
. . . Ph: (305) 373-0123 · (800) 330-4728
..."~. certIfIed publIc accountants Fax: (305) 374-4415
www.bkr-garcia.com
MANAGEMENT LETTER IN ACCORDANCE WITH THE RULES OF
THE AUDITOR GENERAL OF THE STATE OF FLORIDA
Honorable Mayor, Vice Mayor, Commissioners and City Manager
City of Oakland Park, Florida
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We have audited the basic financial statements of the City of Oakland Park, Florida (the City) as of and
for the fiscal year ended September 30, 2004, and have issued a report thereon dated March 15, 2005.
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We conducted our audit in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States and OMB Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations; and Chapter 10.550, Rules ofthe Auditor General. We have
issued our Independent Auditor's Report on Compliance and Internal Control over Financial Reporting.
Independent Auditor's Report on Compliance and Internal Control over Compliance Applicable to each
Major Federal Awards Program and Schedule of Findings and Questioned Costs. Disclosures in those
reports and schedule, which are dated March 15, 2005, should be considered in conjunction with this
management letter.
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The purpose of this letter is to comment on those matters described in Rule 10.554(1 )(g) as required by
the Rules of the Auditor General for the State of Florida. Accordingly, in connection with our audit of the
basic financial statements of the City of Oakland Park, Florida, as described in the first paragraph, we
report the following:
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J. Current year findings and recommendations.
II. Status of prior year findings and recommendations.
III. Compliance with the Provisions of the Auditor General of the State of Florida.
We previously reported on the City's compliance and internal control over financial reporting and
compliance in our reports dated March 15, 2005.
This report is intended for the information of the Mayor, City Commission, City Manager and
management of the City of Oakland Park, Florida, and the Auditor General of the State of Florida and is
not intended to be and should not be used by anyone other than these specified parties.
We wish to thank the City of Oakland Park, Florida, and the personnel associated with it, for the
opportunity to be of service to them in this endeavor as well as future engagements and the courtesies
extended to us.
*-- i COl':-;f-
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March 15, 2005
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
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CITY OF OAKLAND PARK, FLORIDA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004
(CONTINUED)
I.
CURRENT YEAR FINDINGS AND RECOMMENDATIONS
NONE
II.
STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS
Findinq/Recommendation
Implemented
Not
Implemented
02-4.
01-1.
01-2.
Rate Studies
Business and Technology Review
Utility System
X
X
X
02-4.
Rate Studies
During FY2002, outside consultants completed the "Water and Wastewater Capital Improvements
Program and Rate Study". The Study outlined several goals over the next five years for the City's Water
and Sewer Master Plan, summarized as follows:
Water system projects were identified based on three primary goals:
Goal 1- Reduce unaccounted-for water loss to a maximum of 12% of water purchased and raise
revenues by increasing measured water usage.
Goal 2- Improve/upgrade the water system to improve water pressure and fire hYdrant water flow
to the City's customers.
Goal 3- North Andrews Gardens- The Study recommended that the City removed this capital
project from its plans, as it was not considered cost feasible.
Sewer system projects were identified based on two primary goals:
Goal 1- Reduce inflow and infiltration that increases the volume of wastewater treated at the
Sroward County and City of Fort Lauderdale Wastewater Treatment Plants.
Goal 2- Upgrade the City's pump stations from the existing "can type" to the modern "submersible
pumps" .
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
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CITY OF OAKLAND PARK, FLORIDA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004
(CONTINUED)
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II.
STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
02-4.
Rate Studies (Continued)
Managements' Response:
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As noted in the previous year's comments, the City formally implemented a 5-year capital improvement
program in fiscal year 2002, with one fund, Public Utilities, specifically created for improvements to the
water and sewer systems of the City. As progress has been made on the systems over the past three
years, and there is a formal adopted capital improvement program for public utilities in place that includes
the study's findings, it is believed the water study concerns have been addressed by the City. The City,
similar to other municipalities, will continue to address the ongoing need for infrastructure improvements
through its adopted 5-year capital improvement program, which is formally reviewed annually in
conjunction with the City's operating budget. Following is an update to the specific issues noted above:
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Water system projects update:
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Goal 1: The water loss has been reduced to 12% or less (industry standard) of water purchased,
which has resulted in increased revenues through higher, more accurately measured water
usage.
Goal 2: The water system has been undergoing improvements/upgrades for three consecutive
years and will continue to be improved/upgraded under the public utilities capital program.
Goal 3: - North Andrews Gardens- the City removed this capital project from its plans.
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Sewer system projects update:
Goal 1: Through the ongoing CIP program, the City continues to reduce inflow and infiltration that
has previously increased the volume of wastewater treated at the Broward County and City of
Fort Lauderdale Wastewater Treatment Plants.
Goal 2: The two lift stations earmarked for renovations during fiscal year 2004 have been
renovated. Under the capital improvement program lift stations will continue to be earmarked for
renovations as needed.
01-1. Business and Technology Review
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During fiscal year 2001, the City hired the Florida League of Cities, Inc. to perform a review of the City's
business and technology processes and procedures. Through this review the City was provided with
suggestions in order to improve their procedures. Some of the suggestions that affect the finances of the
City are as follows:
· The Finance Department should be divided into two separate departments, the Finance
Department and the Office of Management and BUdget. The Office of Management and Budget
would handle budget, grants, bond issues, annexations, implementations of new laws and
regulations, the Renaissance Project, and be proactive in other issues related to the budget and
rate studies.
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CITY OF OAKLAND PARK, FLORIDA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004
(CONTINUED)
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II. STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
01-1. Business and Technology Review (Continued)
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· In order to properly use the software the City purchased several years ago, it was recommended
that the City obtain a significant amount of additional training on all levels. This includes the
information systems personnel as well as the finance, customer service and personnel
departments.
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· The City currently has a large balance of other accounts receivables related to various properties
that they feel they will collect when the properties are sold. Although the City has an allowance
for these accounts, the City should perform a thorough examination of the accounts and write off
all amounts that will not be collected.
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· Preparing a formal disaster recovery plan.
· The review contained many other recommendations that related to staffing levels, cash
procedures and accounts payable processes.
Management Response
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As noted in the previous year's comments, the City implemented in prior years the recommendations
suggested by the Florida League of Cities except for two, review of accounts receivable and the penalty
charge for delinquent utility accounts. The implementation process began in late fiscal year 2002 for both
recommendations, however, due to the sizeable scope of these projects, this required a multi-year
approach. The City has completed an examination of the miscellaneous accounts receivable noted in the
report and has written off those accounts that will not be collected. The penalty charge for delinquent
utility accounts has not been instituted this year due to a system issue. Depending on the system
capabilities, penalties mayor may not be instituted during fiscal year 2005. As the major
recommendations generated by the Florida League of Cities report have been reviewed, and where
possible implemented, management believes this finding has been sufficiently addressed.
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01-2, Utility System
During the prior auditor's examination of the revenues and expenses of the utility system, they noted that
there were variances between the number of gallons of water purchased versus the number of gallons of
water sold and the number of gallons of sewage processed versus the number of gallons billed. This
could be caused by various factors including the City's meters or meters owned by the City of Fort
Lauderdale or Broward County.
Managements' Response
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This finding is directly related to Finding 02-4, Rate Studies, noted earlier - water loss. As noted above,
the City formally implemented a 5-year capital improvement program in fiscal year 2002, with one fund,
Public Utilities, specifically created for improvements to the water and sewer systems of the City. As
progress has been made on the water/sewer system over the past three years, and there is a formal
adopted capital improvement program for public utilities in place that includes the study findings, it is
believed the water/sewer concerns have been addressed by the City. The City, similar to other
municipalities, will continue to address the ongoing need for infrastructure improvements through its
adopted 5-year capital improvement program, which is formally reviewed annually in conjunction with the
City's operating budget.
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SECTION III.
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CITY OF OAKLAND PARK. FLORIDA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004
(CONTINUED)
COMPLIANCE WITH THE PROVISIONS OF THE AUDITOR GENERAL OF THE
STATE OF FLORIDA
1. Unless otherwise required to be reported in the auditor's report on compliance and on internal
controls, the management letter shall include, but not be limited to a statement as to whether or
not corrective actions have been taken to address significant findings and recommendations
made in the preceding annual financial audit report. Recommendations, except for those
addressed in the Schedule of Findings and Recommendations, made in the preceding annual
report have been addressed. There were no significant findings and recommendations made in
the annual financial audit report for the fiscal year ended September 30, 2004.
2. The City of Oakland Park complied with Section 218.415, Florida Statutes, regarding the
investment of public funds.
3.
There were no violations of laws, rules, regulations, and contractual provisions or abuse, that
were not clearly inconsequential, that have occurred, or were likely to have occurred, that were
discovered within the scope of the audit except for the excess of expenditures over
appropriation disclosed on page 48.
4.
There were no illegal or improper expenditures, that were not clearly inconsequential,
discovered within the scope of the audit that may not materially affect the financial statements.
5.
There were no deficiencies in internal control that are not reportable conditions, including, but
not limited to, improper or inadequate accounting procedures, failure to properly record
financial transactions or other inaccuracies, shortages, defalcations, or instances of fraud
discovered by, or that came to the attention of, the auditor.
6.
The City of Oakland Park, Florida was incorporated in accordance with the laws of the State of
Florida Chapter 61-2650. There are no component units to the City.
7.
The City of Oakland Park has not met one or more of the conditions described in Section
218.503(1), Florida Statutes.
8.
The financial report filed with the Florida Department of Financial Services pursuant to Section
218.32(1 )(a), Florida Statutes agrees with the September 30,2004 financial audit report.
9.
We applied financial condition assessment procedures pursuant to Rule 10.556 (8) and no
deteriorating financial conditions were noted. It is management's responsibility to monitor
financial condition, and our financial condition assessment was based in part on
representations made by management and the review of financial information provided by
same.
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
MANAGEMENT LETTER IN ACCORDANCE WITH THE RULES
OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA
Honorable Mayor and Town Council
Town of Southwest Ranches, Florida
We have audited the basic financial statements of the Town of Southwest Ranches, Florida, (the "Town")
as of and for the fiscal year ended September 30, 2005, and have issued a report thereon dated March
24, 2006.
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America; the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States; OMS Circular A-133, Audit of States, Local
Governments, and Non-Profit Organizations: and Chapter 10.550, Rules of the Auditor General. We
have issued our Independent Auditors' Report on Internal Control over Financial Reporting and on
Compliance and Other Matters, Independent Auditor's Report on Compliance and Internal Control over
Compliance Applicable to each Major Federal Awards Program and State Financial Assistance Project,
Summary Schedule of Prior Audit Findings and Schedule of Findings and Questioned Costs.
Disclosures in those reports and schedules which are dated March 24, 2006, should be considered in
conjunction with this management letter.
The purpose of this letter is to comment on those matters described in Rule 10.554(1 )(h) required by
the Rules of the Auditor General for the State of Florida. Accordingly, in connection with our audit of
the basic financial statements of the Town, as described in the first paragraph, we report on the
following, which is included on pages 9 through 19.
J.
II.
III.
Current year findings and recommendations.
Status of prior year findings and recommendations.
Compliance with the Provisions of the Auditor General of the State of Florida.
We previously reported on the Town's compliance and internal control over financial reporting and
compliance in our reports dated March 24, 2006.
This report is intended for the information of the Mayor, Town Council, Town Manager and
management of the Town of Southwest Ranches, Florida, and the Auditor General of the State of
Florida and is not intended to be and should not be used by anyone other than these specified parties.
We wish to thank the Town of Southwest Ranches, Florida, and the personnel associated with it, for the
opportunity to be of service to them in this endeavor as well as future engagements and the courtesies
extended to us.
8l<R G~ ~ CO""f~ PLlC.
March 24, 2006
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
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TOWN OF SOUTHWEST RANCHES, FLORIDA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
SEPTEMBER 30, 2005
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SECTION 1- CURRENT YEAR FINDINGS AND RECOMMENDATIONS
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2005-1 Significant Audit Adjustments
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Condition: While performing audit procedures, we noted that the Town erroneously recorded a
significant number of transactions. These included, but are not limited to, improper recording of revenues
and receivables. prior year audit adjustments, loan proceeds & repayments, inventory of trees. interfund
transactions, accounts payable and expenditures, deposit reimbursements, etc.
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Cause of Condition: The increased complex nature of the types of transactions for 2005 and
incomplete follow through on prior year receivables, accounts payables and audit adjustments.
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Effect of Condition: Transactions as recorded do no reflect the actual result of the activities of the Town.
Therefore balances reflected in the books during the year are misstated.
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Recommendation: We recommend the Town record transactions in the accounting system to the
proper accounts to reflect the actual activities of the Town throughout the year.
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Management's Response: Management would agree with the recommendation of the finding and will
utilize additional accounting services to provide necessary input, oversight and follow through.
2005-2: Incorrect Bank Reconciliations
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Condition: While performing procedures for cash, we noted that reconciled book balances per the bank
reconciliations did not agree to cash balances per the general ledger. Furthermore, there were
reconciling items in transit outstanding for more than six months that have not been addressed by the
Town.
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Cause of Condition: Adjustments are made to the books subsequent to the preparation of the bank
reconciliations.
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Effect of Condition: By not preparing bank reconciliations that properly reconcile with the Town's cash
account, the Town increases the risk that amounts may be processed and not be accounted properly in
the general ledger. In addition, the lack of control over the deposit in transit and outstanding checks
increases the potential for errors and the risk for misappropriation of assets.
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Recommendation: We recommend the Town develop written policies and procedures over reconciling
items outstanding for more than six months. In addition, steps should be taken to identify the reasons for
the differences and corrective action taken as warranted. Town policies should dictate that monthly bank
reconciliations are properly reconciled with the associated general ledger amount.
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
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TOWN OF SOUTHWEST RANCHES, FLORIDA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
SEPTEMBER 30, 2005
(CONTINUED)
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SECTION 1- CURRENT YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
2005-2: Incorrect Bank Reconciliations (Continued)
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Management's Response: Management provides a monthly bank reconciliation balanced with the Town
records. The reconciliation is completed prior to the presentation of the monthly financial report. Verified
copies of the reconciliation are maintained in Town records as required. The 2005 financial system had a
system flaw that allows transactions to be placed in a prior month. This occurs even after the books are
reconciled with the bank statement and creates what would appear to be an out of balance situation. This
situation occurred as a part of the September 30, 2005 closed books that was turned over for the audit.
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In 2006, the new financial system does not allow for adjustments that will produce the situation described
by the audit.
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Management will provide for a process that will address items in transit to provide for the
recommendations from the audit.
2005-3: Sales taxes payable
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Condition: While performing procedures for sales of trees from the Fishing Hole Nursery, it was noted
that the sales tax collected from customers was being improperly included as revenue, and it has not
been remitted to the Florida Department of Revenue on a monthly basis. As a result, the Town is not only
liable for the amount of sales taxes collected, but it may be liable for related penalties and interest.
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Cause of Condition: The amount received from the nursery for the sale of trees is not being properly
classified between sales revenue and sales tax.
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Effect of Condition: The revenues for the sales of trees are overstated. Also, there is no liability to
record the sales tax which the Town should have submitted to Florida Department of Revenue, and the
Town might be liable for penalty and interest on the unsubmitted amount.
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Recommendation: We recommend that the Town record cash receipts submitted from the sale of trees
net of sales taxes collected and properly reflect sales taxes collected as a liability. Furthermore. we
recommend that the Town submit sales taxes collected within a month by the 20th day of the following
month to Florida Department of Revenue.
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Management's Response: Management agrees with the recommendation of the audit and will
implement the recommendations.
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
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TOWN OF SOUTHWEST RANCHES, FLORIDA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
SEPTEMBER 30, 2005
(CONTINUED)
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SECTION 1- CURRENT YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
2005-4: Inventory of Trees
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Condition: While performing audit procedures on revenues from the sale of trees from the Fishing Hole
Nursery, we noted that the Town did not calculate and record the cost of trees sold and reduce the trees
inventory accordingly. Furthermore, we noted that the Town did not take a physical inventory count of the
trees at the end of the year.
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Cause of Condition: The Town administration was unaware that inventory needed to be kept on the
Fishing Hole nursery and cost of trees sold recorded as expenditures; therefore, reducing inventory.
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Effect of Condition: There is no accurate count of the tree inventory at year end. By not maintaining and
reconciling the inventory with the trees that were sold or moved to another location the Town increases
the risk that amounts may be processed and not be accounted properly in the general ledger. In addition,
the lack of controls over the trees increases the potential for errors and the risk for misappropriation of
assets.
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Recommendation: We recommend the Town take a physical inventory count of trees at the end of each
fiscal year, record the cost of trees sold and reconcile the trees sold or moved to another location with the
ending inventory in order to be able to have proper internal control over the inventory of trees.
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Management's Response: Management initially classified the nursery trees as a capital asset and had
a full physical inventory completed. Nursery operations provide for weekly sales of trees and shrubs
under our contracted management program. All sales include specific identification of the number and
type of trees on invoices submitted to the Town. Management did not treat this acquisition as an
inventory item until it was identified while audit was being conducted.
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Management would agree that under an inventory classification at least one annual physical inventory
shall be conducted at end of the fiscal year and updated inventory records shall be maintained monthly.
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2005-5 Budget Amendments
Condition: Florida Statute 166.241 states that no amendment could be made to the budget after 60 days
of the year end. While performing audit procedures, we noted that the Town made budget amendments
more than 60 days following the end of the fiscal year.
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Cause of Condition: Budget amendments were considered necessary after 60 days following the end
of the fiscal year.
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Effect of Condition: The Town is not in compliance with Florida Statute 116.241.
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
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TOWN OF SOUTHWEST RANCHES. FLORIDA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
SEPTEMBER 30, 2005
(CONTINUED)
SECTION 1- CURRENT YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
2005-5 Budget Amendments (Continued)
Recommendation: We recommend the Town make all necessary budget adjustments within 60 days
following the end of the fiscal year.
Management's Response: Management presented budget amendments to Town Council for approval
to provide proper budget management. In the future, budget adjustments will be made within the 60 days
following the end of the fiscal year.
2005-6: Missing Supporting Documentation For Debit Card Purchases
Condition: While performing disbursement testing, we noted that purchases with the debit card lacked
the proper documentation. Two out of the ten disbursements tested did not have the support for the
purchase.
Cause of Condition: Either failure to provide proper documentation/receipts to the accounting
department for purchases made or misplacement of documentations/receipts by the accounting
department.
Effect of Condition: Purchases made with the debit card lack the proper support.
Recommendation: We recommend that the Town obtain and properly file the supporting
documentation for all purchases.
Management's Response: Management does not believe that this finding is material and does not merit
a finding comment. During 2005, there were 58 transactions totaling $9,219 conducted through the use
of the debit card and credit card. The transactions range from a low of $5 to $1,099. Of the 10
transactions tested 2 lacked the proper support; these 2 were not typical of this type of transaction and
represented transactions valued at $248 and $222. Management will make every effort to obtain
documentation on this type of transaction in the future.
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TOWN OF SOUTHWEST RANCHES, FLORIDA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
SEPTEMBER 30, 2005
(CONTINUED)
SECTION 11- STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS
The following is a summary of the status of prior year findings and recommendations with the details
directly below the summary:
Non- Compliance
2004-5 Nepotism
2004-9 Audited Financial Statements
2001-3 Expenditures Incurred Over Appropriations
Findinq
Not
Implemented Implemented
X
X
X
X
X
X
X
X
X
X
X
X
Reportable Conditions
2004-1 Out of Sequence Checks
2004-2 Missing Supporting Documentation for Journal Entries
2004-3 Invoice Date Per Accounting System is Different than
Actual Invoice Date
2004-4 Individual Funds not in Balance
2004-6 Capital Assets
Other Matters
2004-7 Conflict of Interest
2004-8 Accounting Records
2001-8 Investment of Surplus Funds
2001-9 Accounting Software
2004-1: Out of sequence checks
Condition: While performing cut-off procedures for cash we noted that checks issued were out of
sequence. Several instances were noted where the numerical sequence of the checks and the dates of
the checks were out of order. In addition, we noted that several checks were dated prior to the date of
the corresponding invoice.
Recommendation: We recommend that management of the Town contact the software vendor to
determine if the problem is caused by the program, and take necessary control measures whereby at
certain time intervals check sequences are reviewed.
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
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TOWN OF SOUTHWEST RANCHES, FLORIDA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
SEPTEMBER 30, 2005
(CONTINUED)
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SECTION 11- STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
2004-1: Out of sequence checks (Continued)
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Status: The Town corrected the problem as soon as the problem was discovered by the auditors.
However, since this problem was still present for most of the year 2005, this comment will be repeated.
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Management's Response: The new financial system implemented in October 2005 will prevent this
system design flaw from happening again.
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2004-2: Missing supporting documentation for Journal Entries
Condition: During the audit we noted that management of the Town did not have available the
documentation supporting the journal entries recorded during the year. The Management of the Town
does not maintain a paper copy of the journal entries that were prepared during the year. Journal entries
are posted directly to the accounting system without keeping a hard copy of the entry. Therefore, the
documentation supporting the journal entry is not attached and the signature of the person authorizing the
transaction is not documented. In addition, there are several instances of journal entries with no
description of the reason for the journal entry.
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Recommendation: We recommend that all journal entries be filed in chronological order with proper
documentation supporting the entry attached.
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Status: We noted that the Town has not fully implemented this recommendation. This finding will be
repeated.
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Management's Response: We agree with the recommendation and will fully implement and maintain a
centralized journal entry file.
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2004-3: Invoice date per accounting system is different than actual invoice date
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Condition: While performing our search for unrecorded liabilities, we noted several instances where the
invoice dates entered in the accounting system and the actual invoice date did not correspond. The date
entered in the accounting system was a date subsequent to the date of the actual invoice.
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Recommendation: We recommend that management of the Town contact the software vendor to
determine if the errors occur as a result of the program not being utilized correctly or the program is not
set up properly. We also recommend that control measures be implemented whereby the Invoice Dates
are reviewed and corrected in a timely manner before the checks are printed.
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TOWN OF SOUTHWEST RANCHES, FLORIDA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
SEPTEMBER 30, 2005
(CONTINUED)
SECTION 11- STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
2004-3: Invoice date per accounting system is different than actual invoice date (Continued)
Status: The Town corrected the problem as soon as the problem was discovered by the auditors.
However, since this problem was still present for most of the year 2005, this comment will be repeated.
Management's Response: The new financial system implemented in October 2005 will prevent this
system design flaw from happening again.
2004-4: Individual funds not in balance
Condition: The individual fund balance of the different funds of the Town in the trial balance provided to
the auditors at the beginning of the audit was not in balance. In addition, the fund balance did not agree
to the audited financial statements for the year ended September 30, 2003.
Recommendation: We recommend that the person in charge of recording transactions review the
propriety of the transaction and adjust the due to/from accounts for transactions affecting more than one
fund. We also recommend that upon receipt of the list of audit adjusting journal entries adjustments be
recorded in the Town's accounting system. The accounting year should not be closed unless account
balances and fund balance/deficit per the accounting system agree to amounts per the financial
statements. Furthermore, once the accounting year is closed, fund balances per the accounting system
should be compared to fund balances per the financial statements.
Status: The trial balance provided to the auditors for the September 30, 2005 audit did not reflect the
proper beginning balance (September 30, 2004 audit balance) for two of the funds included in the trial
balance. This comment shall be repeated.
Management's Response: Management agrees with the recommendation that all adjusting entries
should be posted and that the individual funds should be in balance. We will review the fund balances on
a regular basis.
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
TOWN OF SOUTHWEST RANCHES, FLORIDA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
SEPTEMBER 30, 2005
(CONTINUED)
SECTION 11- STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
2001-3 Expenditures Incurred Over Appropriations
Condition
In accordance with the 2001 Florida Statutes Title XII Chapter 166.241 (3) and the Town Charter Section
3.09, a municipality's budget must regulate expenditures and it is unlawful for any officer of a municipal
government to expend or contract for expenditures in any fiscal year except in pursuance of budgeted
appropriations. The Town's expenditures exceeded appropriations by approximately $3.6 million in the
general fund.
Recommendation
We recommend that the Town comply with the Florida Statutes regarding compliance with budgeted
appropriations. If expenditures exceed appropriations, then the Town should amend the budget for
supplemental appropriations by ordinance or resolution, as appropriate.
Status
The Town has not implemented this recommendation. This comment will be repeated.
Management's Response
Management included $53,215 within the 2006 adopted budget to provide for the increased funding for
BSO Law Enforcement services related to 2005. This appropriation was fully anticipated and budgeted.
An adjusting journal entry as a result of the audit has created the situation identified in this finding.
Management has not incurred and expenditure over appropriations on this item.
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
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TOWN OF SOUTHWEST RANCHES, FLORIDA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
SEPTEMBER 30, 2005
(CONTINUED)
SECTION 11- STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
2001-8 Investment of Surplus Funds
Condition
During our testing of cash, we noted that the Town currently deposits a large amount of excess cash with
a local bank, which currently provides the Town with 0.20% to 0.25% return on those deposits. There are
other options permitted under Section 218.45 of the Florida Statutes for the investment of the Town's
excess cash which could provide a higher return, with the same level of security and liquidity.
Recommendation
The Town should review its current investment of excess cash and possibly invest in other types of
investments permitted under Section 218.45 of the Florida Statutes.
Status
The Town not has implemented this recommendation during 2005. This comment will be repeated.
Management's Response
We will monitor this situation in the future for investment considerations.
2001-9 Accounting Software
Condition
The Town is currently using Quickbooks Pro 2001 to record and report the Town's transactions. This
software is not designed for fund accounting. The Town currently has one special revenue fund, one
capital projects fund, two account groups and the general fund. As the Town grows and the number of
funds increase the current software will be inadequate to maintain all the different funds.
The Town segregates the funds in Quickbooks by class; however, we noted that although the trial
balance for the Town was in balance, when segregated by individual funds, it did not balance. The trial
balances did not balance because the due to/from accounts were not adjusted for the transactions that
affected each individual fund.
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
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TOWN OF SOUTHWEST RANCHES, FLORIDA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
SEPTEMBER 30, 2005
(CONTINUED)
SECTION 11- STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED)
2001-9 Accounting Software (Continued)
Recommendation
We recommend that the Town research and test different accounting software suitable for fund
accounting in order to adequately record and maintain all of the Town's funds. If the Town continues to
use Quickbooks, then the fund trial balances should be segregated by class to ensure that all funds
balance and the due to/from's are properly adjusted.
Status
Although the Town acquired the accounting software suitable for fund accounting, it did not implement
this recommendation during 2005. The new accounting software is used as of October 1, 2005. This
comment will be repeated.
Management's Response
The new financial software system was implemented effective October 1, 2005 for fiscal year 2006.
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APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS
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TOWN OF SOUTHWEST RANCHES, FLORIDA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
SEPTEMBER 30, 2005
(CONTINUED)
SECTION III. COMPLIANCE WITH THE PROVISIONS OF THE AUDITOR GENERAL OF THE
STATE OF FLORIDA
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10.
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1. Recommendations, except for those addressed in the schedule of findings and
recommendations, made in the preceding annual financial audit report have been addressed.
2.
The Town was in compliance with Section 218.415, Florida Statutes, regarding the
investment of public funds.
3.
Recommendations to improve the Town's present financial management, accounting
procedures and internal controls are accompanying this report in the schedule of findings and
recommendations.
4.
There were no violations of laws, regulations, and contractual provisions or abuse, that were
not clearly inconsequential, that have occurred, or were likely to have occurred, that were
discovered within the scope of the audit, except as disclosed in the schedule of findings and
recommendations.
5.
There were no illegal or improper expenditures that were not clearly inconsequential,
discovered within the scope of the audit that may not materially affect the financial statement
except as disclosed in the schedule of findings and recommendations.
6.
There were no deficiencies in internal control that are not reportable conditions, including, but
not limited to improper or inadequate accounting procedures, failure to properly record
financial transactions or other inaccuracies, shortages, defalcations, or instances of fraud
discovered by, or that came to the attention of the auditor, except as disclosed in the
schedule of findings and recommendations.
7.
The Town of Southwest Ranches, Florida, was incorporated in accordance with House Bill
No. 1777 on June 6, 2000.
8.
The Town has not met one or more of the conditions described in Section 218.503(1 )(a),
Florida Statutes.
9.
The annual financial report for the fiscal year ended September 30, 2005, has been filed with
the Department of Banking and Finance pursuant to Section 218.32(1), Florida Statutes and
is in agreement with the annual financial audit report for the fiscal year ended September 30,
2005.
During the course of our audit, we applied financial condition assessment procedures
pursuant to Rule 10.566(8). It is management's responsibility to monitor the Town's financial
condition, and our financial condition assessment, which was performed as of the Town's
fiscal year end, was based on representations made by management and the review of
financial information provided by the Town The overall rating of the Town based on the
procedures applied were inconclusive.
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ATTACHMENT I
BKR GARCIA AND COMPANY, PLLC
CERTIFICATION
This is to certify that the person signing the proposal is entitled to represent the
firm, empowered to submit the bid, and authorized to sign a contract with the City
of Sunny Isles Beach, Florida.
Our proposed total all-inclusive not-to-exceed price fees to perform financial audit
and assistance with the CAFR for the fiscal years ending September 30, 2007,
2008 and 2009 for City of Sunny Isles Beach are as follows:
Fiscal year
2007
2008
2009
$62,000
65,000
67,000
Our hourly rates to perform other services are outlined below:
Partner
Manager
Senior/Supervisory Staff
Staff
$ 250
190
130
100
Pablo R. Llerena (?oJ.J..a {~
BKR Garcia and Company
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SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
FOR THE AUDIT OF THE FY 2007 FINANCIAL STATEMENTS
Partners
Standard
Hourly
Hours Rates Total
60 $ 250 $ 15,000
70 190 13,300
150 130 19,500
100 100 10,000
380 $ 57,800
4,200
$ 62.000
Managers
Supervisory staff
Staff
Computer Consultants, Clerical and others
Total not-to-exceed price for FY2007 audit
without the single audit
FOR THE AUDIT OF THE FY 2008 FINANCIAL STATEMENTS
Partners
Standard
Hourly
Hours Rates Total
60 $ 250 $ 15,000
70 200 14,000
150 135 20,250
--1.QQ 110 11 ,000
380 $ 60,250
4,750
$ 65.000
Managers
Supervisory staff
Staff
Computer Consultants, Clerical and others
Total not-to-exceed price for FY2008 audit
without the single audit
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FOR THE AUDIT OF THE FY 2009 FINANCIAL STATEMENTS
Partners
Standard
Hourly
Hours Rates Total
60 $ 60 $15,600
70 210 14,700
150 140 21,000
-1.QQ 110 11,000
380 $ 62,300
4,700
$ 67,000
Managers
Supervisory staff
Staff
Computer Consultants, Clerical and others
Total not-to-exceed price for FY2009 audit
without the single audit
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APPENDIX E
PROPOSER GUARANTEES and WARRANTIES and STANDARD TERMS & CONDITIONS
1.
The proposer certifies it can and will provide and make available, as a minimum, all services set forth in
Section II, Nature of Services Required.
2.
Proposer warrants that it is willing and able to obtain an errors and omissions insurance policy providing a
minimum of $1 million of coverage for the willful or negligent acts, or omissions of any officers, employees
or agents thereof.
3.
Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the
prior written permission of the City of Sunny Isles Beach.
4.
Proposer warrants that all information provided by it in connection with this proposal is true and accurate.
Signature of Official: ~ o.hL. ~
Name (typed):
PABLO LLERENA
Title:
VICE PRESIDENT
Firm:
BKR & COMPANY, PLLC
MAY 3, 2007
Date:
4/3/2007
29
City of Sunny Isles Beach: Request for Proposal - Audit Services
I_-
ACORD
I ~--~---=----=-==- 1M
PRODlJC[I1
ISETNOR BYER INSURANCE & RISK/PHS
1228945 P: (866)467-8730 F: (877)538-8526
II PO BOX 2Cj611
! 91Ar~ LQr~~~ _ ~~~_~~~2 9_______
CERTIFICATE OF LIABILITY INSURANCE
DATE
10-27-2006
I THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION
I ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE
I HOLDER. THIS CERTIFICATE DOES NOT AMEND. EXTEND OR
1__~!:J!~-.!':l~Q~~RA.QLAiFOI!.DEDB..'!'-.!.':l~~Q.~~!ES _~~LO~---,-_ ____
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!
INSURERS AFFORDING COVERAGE
.__--.J
IIA
I:
I BODll Y IN.lURY
I Per .1,.( fdent l
PHOPERTY DAMAGE
I Per aCClllent)
AUTO ONL Y - t A ACCIDENT I >
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OTHER THAN
AUTO ONLY:
EA Ace, >
AGG S
, $2 , 00 0, 0 Q~
'$2,000,000
i CLAIMS MADE
21 SBA RM5294
, I
;01/01/07101/01/08
I EACH vCCURRENCE
I EXCESS LIABILITY
r-
~ OCCUR !
AGGREGA TE
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I I OTHER
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! I
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i DESCRIPTION OF OPERATlONS/lOCATIONStVEHICLES/EXCLUSIONS ADDED BY ENDORSEMENT/SPECIAL PROVISIONS
~Those usual to the Insured's Operations. City of Tamarac is
I:Additional Insured per the Business Liability Coverage Form
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L__ j DEDUCTIBLE 1
I X i RETENTION $1 0 , 0 0 0 L-.-
, WORKERS COMPENSA nON AND I
: EMPLOYERS' LIABILITY
, $
, WC STA ru-
'_~!ORY LIMITS'
. E.L. EACH ACCIDENT
: $
orH-,
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--~------_:
~~[ASE' U, EMPLOYtE I $
E.L. DISEASE - POliCY LIMIT i $
named as
SS0008.
I~CEKfIRCAfE-HOlDEir -=-F~A~DITIOr;-~';;~i:D-:-I~iuR~LETIii~-=-.Q~~!:I&.!QN-- ---------------------- i
I ISHOULD ANY OF THE ABOVE DESCHIBED POLICIES BE CANCEU ED BEFORE HIE
I f-XPIRA1ICJN DATE THEREOF, THE ISSUING INSURER WILL lNDEAVOR TO MAIL
I! I:JO DAYS WHITTEN NOTICE (10 DAYS FOR NOtJPAYMEN1j 10 THE CEH11FICATE
I. Ci ty 0, f Tarnarac lillO, LDER NAMW TO THE LEFT, BUT FAILURE TO DO SO SHALL IMPOSE NO
I - h om IGA110tJ OR LIABILITY OF ANY KIND UPON THE INSURER IlS AGEtJTS OR
17525 NW B8t St. RFPFllSE.lJlATlVES. .
I; Tamarac, FL 33321 I-u
:____._________________ I A~~~_
ACORD 25.S (7/97)' ACORD CORPORATION 1988
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Appendix H
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NON-COLLUSIVE AFFIDAVIT
State of FLORIDA )
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C\lunty of MIAMI -DADE
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PABLO LLERENA
being first duly sworn. deposes and says that:
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( I) He/she is the (Owner, Partner, Officer, Representative or Agent) of the Bidder that has
submitted the attached Bid;
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12) He/she is fully informed respecting the preparation and contents of the attached Bid and of all pertinent
circumstances respecting such Bid;
(3) Such Bid is genuine and is not a collusive or sham Bid:
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(.:1-) Neither the said bidder nor any of its officers. partners, owners. agents. representatives. employees or parties in
interest. including this affiant. have in any way colluded, conspired. connived or agreed. directly or indirectly, with any
other Bidder. firm, or person to submit a collusive or sham Bid in connection with the Work for which the attached Bid
has been submitted; or to refrain from bidding in connection with such Work; or have in any manner. directly or
indirectly. sought by agreement or collusion. or communication. or conference with any Bidder. firm. or person to tix the
price or prices in the attached Bid or of any other Bidder. or to tix any overhead, profit. or cost elements of the Bid price
or the Bid price of any other Bidder, or to secure through any collusion. conspiracy, connivance. or unlawful agreement
any advantage against the City of Sunny lsles Beach. or any person interested in the proposed Work:
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(5) The price or prices quoted in the attached Bid are fair and proper and are not tainted by any collusion,
conspiracy, connivance, or unlawful agreement on the part of the Bidder or any other of its agents, representatives.
owners, employees or parties in interest. including this Affiant.
~~~
SIGNATURE OF AFFIANT
PAB LO LLERENA
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(Printed or Typed Legal Name of Affiant)
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State of FLORIDA County of MIAMI -DADE
Sworn to and subscribed before me this 3RD day of
MAY
, 2007 by
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V\~\~ \,() ~K\~~YA-
Notar~Name Printed. Stamped or Typed
Notary Seal:
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Personally Known:
v
or Produced ldentitication
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Identification Produced
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-1-/3/2007
City of Sunny Isles Beach: Request for Proposal - Audit Services
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Appendix G
SWORN STATEMENT PURSUANT TO SECTION 287.133(3)(a)
FLORIDA STATUTES, ON PUBLIC ENTITY CRIMES
THIS FORNI MUST BE SIGNED AND SWORN TO IN THE PRESENCE OF A NOTARY PUBLIC OR OTHER OFFICIAL
AUTHORIZED TO ADMINISTER OATHS.
I. This sworn statement is submitted to CITY OF SUNNY ISLES BEACH
by
BKR GARCIA & COMPANY, PLLC
AUDIT SERVICES
1110 BRICKELL AVENUE, SUITE 901
for
whose business address is
MIAMI,
FLORIDA 33131
and (if applicable) its Federal Employer Identification Number (FEIN) is 20-3157326
(IF the entity had no FEIN, include the Social Security Number of the individual signing this sworn statement:
2. I understand that a "public entity crime" as defined in Paragraph 287 . I 33(l)(g), Florida Statutes, means a violation of any state
or federal law by a person with respect to and directly related to the transaction of business with any public entity or with an
agency or political subdivision of any other state or of the United States, including, but not limited to, any bid or contract for
goods or services to be provided to any public entity or an agency or political subdivision of any other state or of the United
States and involving antitrust, fraud, theft, bribery, collusion, racketeering, conspiracy, or material misrepresentation.
3. I understand that "convicted" or "conviction" as defined in Paragraph 287 .133(l)(b), Florida Statutes means a finding of
guilt or a conviction of a public entity crime, with or without an adjudication of guilt, in any federal or state trial court of
record relating to charges brought by indictment or information after July I, 1989, as a result of ajury verdict, nonjury trial,
or entry of a plea of guilty or nolo contenders.
4. I understand that an "affiliate" as defined in Paragraph 287. I 33(l)(a), Florida Statutes, means:
a. A predecessor or successor of a person convicted of a public entity crime; or
b. An entity under the control of any natural person who is active in the management of the entity and who has been
convicted of a public entity come. The term "affiliate" includes those officers, directors, executives, partners,
shareholders, employees, members, and agents who are active in the management of an affiliate. The ownership by one
person of shares constituting a controlling interest in another person, or a pooling of equipment or income among
persons when not for fair market value under an arm's length agreement, shall be a prima facie case that one person
controls another person. A person who knowingly enters into ajoint venture with a person who has been convicted of a
public entity crime in Florida during the preceding 36 months shall be considered an affiliate.
5. I understand that a "person" as defined in Paragraph 287 . I 33(l)(e), Florida Statutes, means any natural person or entity
organized under the laws of any state or of the United States with the legal power to enter into a binding contract and which
bids or applies to bid on contracts for the provision of goods or services let by a public entity, or which otherwise transacts
or applies to transact business with a public entity. The term "person" includes those officers, directors, executives,
partners, shareholders, employees, members, and agents who are active in management of any entity.
eo..W.o (~ PABLO LLERENA
SIGNATURE OF AFFIANT (Printed or Typed Legal Name of Affiant)
State of FLORIDA County of MIAMI -DADE
Sworn to and subscribed before me this 3RD day of
MAY
, 2007 by
Notary Seal:
Personally Known:
v'
or Produced Identification
4/3/2007
City of Sunny Isles Beach: Request for Proposal - Audit Services