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HomeMy WebLinkAboutKeefe, McCullough & Co. I I I I I I I I I I I I I I I I I I I MAY 0 ~ 2007 lO'O CllY of sunny !elM Beech ()lfk:e ollhe CI~ KEEFE, McCULLOUGH & CO., LLP CERTIFIED PUBLIC ACCOUNTANTS PROPOSAL FOR AUDITING SERVICES RFP 07-04-01 FOR CITY OF SUNNY ISLES BEACH i II I I :1 I I I I I I I I I I I I I I I KEEFE, McCULLOUGH & CO., LLP CERTIFIED PUBLIC ACCOUNTANTS PROPOSAL FOR AUDITING SERVICES RFP 07 -04-01 FOR CITY OF SUNNY ISLES BEACH SUBMITTED ON MAY 4,2007 KEEFE, MCCULLOUGH & CO., LLP, C.P.A.'S 6550 NORTH FEDERAL HIGHWAY SUITE 410 FT. LAUDERDALE, FLORIDA 33308 954- 771-0896 FIRM CONTACT PERSONS: Cynthia L. Calvert, C.P.A., Partner William G. Benson, C.P.A., Partner I II I I I I I I I I I :1 I I i I I I I I I KEEFE, McCULLOUGH & CO., LLP CERTIFIED PUBLIC ACCOUNTANTS PROPOSAL FOR AUDITING SERVICES RFP 07-04-01 FOR CITY OF SUNNY ISLES BEACH TABLE OF CONTENTS SECTION Letter of Transmittal I II III IV V VI Detailed Proposal Service Team Member Profiles Peer Review Documents Dollar Cost Bid and Schedule of Professional Fees Proposer Warranties I I I I I I I :1 II I I I I I I I I I I KEEFE, McCULLOUGH & CO., LLP CERTIFIED PUBLIC ACCOUNTANTS LETTER OF TRANSMITTAL Section I I il II I I I I I I I I I I I I I I I I I I ~ KEEFE. McCULLOUGH & CO.. LLP CERTIFIED PUBLIC ACCOUl"TAI"TS CHARLES K. RUMPF. C.P.A. ISRAEL J. GOMEZ, C.P.A. JAMES R. LARAWAY. C.P.A. ROSS S. GOTTHOFFER. C.P.A. IIILLARY B. DAIGLE. C.P.A. 6550 NORTH FEDERAL HIGHWAY SUITE 410 FORT LAUDERDALE, FLORIDA 33308 (954) 77]-0896 FAX: (954) 938-9353 E-MAIL: kmc@kmccpa.com JOliN R. KEEFE. C.P.A. JOliN E. McCULLOUGII. C.P.A. (RETIRED) THOMAS T. CARPENTER, C.P.A. PAUL B. SNEIDER. C.PA. (RETIRED) STEVEN H. WOODS. C.P.A. DAVID T. WILLIAMS. C.P.A. JOSEI'll D. LEO. C.P.A. WILLIAM G. BENSON, C.P.A. BRIAN D. PINNELL. C.P.A. (RETIRED) KENNETH G. SMITH. C.P.A. LOUIS R. PROIETTO. C.P.A. CYNTHIA L. CALVERT. C.P.A. May 2, 2007 Mr. Doug Haag, Assistant City Manager - Finance City of Sunny Isles Beach 18070 Collins Avenue Sunny Isles Beach, Florida 33601 Dear Mr. Haag: We are pleased to propose to perform auditing services for the City of Sunny Isles Beach (the "City"). It is our understanding that our proposal covers the annual financial and compliance audit of the various funds and account groups of the City for the fiscal years ending September 30, 2007, 2008 and 2009. Our examination of the City's financial statements will be conducted in accordance with; 1. Generally accepted auditing standards as set forth by the American Institute of Certified Public Accountants; 2. The standards for financial audits set forth in the U.S. General Accounting Office's Government Auditinf.! Standards (1994) issued by the U.S. General Accounting office; 3. The provisions of the Single Audit Act of 1984 (as amended in 1996); 4. U.S. Office of Management and Budget (OMB) Circular 133 Audits of States, Local Governments and Non-Profit Organizations, and; 5. The State of Florida, Rules of the Auditor General. Keefe, McCullough & Co., LLP, C.P.A. 's is committed to performing the auditing services within the prescribed time frame as outlined in the City I S request for proposal number 07-04-01 beginning with the fiscal year ending September 30, 2007. The following individuals are authorized to make representations for the firm: Cynthia L. Calvert, C.P.A., Partner William G. Benson, C.P.A., Partner Keefe, McCullough & Co., LLP, C.P.A. 's 6550 North Federal Highway, Suite 410 Ft. Lauderdale, Florida 33308 954- 771-0896 i I I I I I I I I I I I I I I I I I I I City of Sunny Isles Beach -2- May 2,2007 We believe our firm to be best qualified to perform your audit engagement based on substantial governmental experience obtained over the entire period of our firm I s existence, our firm 's commitment to continue to provide the necessary continuing professional education to qualify all of our professional accounting staff in this specialized area, our absolute dedication to excellence and quality in our practice and our unique service philosophy which has created a dedicated and satisfied clientele over many years. We hereby attest to our authority to submit this proposal and to individually bind Keefe, McCullough & Co., LLP, C.P.A. 's to perform this audit in accordance with the resulting contract agreement should the firm be selected. This proposal is a firm and irrevocable offer for ninety (90) days from the date of the proposal. Regards, KEEFE, McCULLOUGH & CO., LLP .~ William G. Benson, \ C/PI .P.A. I I I I I I I I I I I I I I I I I I I KEEFE, McCULLOUGH & CO., LLP CERTIFIED PUBLIC ACCOUNTANTS DETAILED PROPOSAL Section II I I I I I I I I I I I I I I I I I I I DET AILED PROPOSAL 1. General Requirements. Keefe, McCullough & Co., LLP, C.P.A. 's has existed as a firm for over thirty-five years and we are located in Fort Lauderdale to serve the South Florida area. Our office consists of nine partners, approximately fifty (50) professional accounting staff members and administrative support personnel. We have the capacity to handle the City's auditing needs and significant experience representing Broward municipalities, All of the firm I s professional accounting staff are a part of the governmental audit staff. Weare members of the American Institute of Certified Public Accountants and the Florida Institute of Certified Public Accountants. Our practice includes audit engagements, management advisory services, tax planning and tax return preparation, and consulting services. We believe our growth can be attributed to our ability to give each client, regardless of size, personalized and timely service of the highest quality. Our service philosophy is based on the premise that every engagement receives personal overall supervision from a firm partner or partners. This approach guarantees that the same person will be in charge of your audit year after year. In addition, while the primary purpose of our auditing services is completing the audit of your financial statements and rendering an opinion on their fairness, we pride ourselves in continually looking for, and communicating by management letter or informal discussion, recommendations that may result in more efficient operations, stronger accounting and administrative controls or cost savings to our clients. Our firm's attention does not cease when your financial statements have been completed. We will be accessible to you throughout the year to provide answers to questions and consulting services, as needed. Our firm presently provides auditing services for a number of governmental entities, community mental health centers, employee benefit plans, not-for- profit organizations, and other entities. We are very proud to have served as independent auditors for governmental units similar to yours and numerous not-for-profit organizations. We have listed several of these entities for your reference as part of this detailed proposal. We believe that engagement tenure is indicative of the quality and continuity of our service, our flexibility in handling growth situations, and dealing with changing management and personnel. We feel that we excel in dealing with our clients on an individual basis and tailoring our service to meet their specific requirements. We have substantial experience in the area of compliance auditing in accordance with Government Auditing Standards ("The Yellow Book") and the OMB Circulars "Audits of State and Local Governments" and "Audits of Institutions of Higher Education and Other Nonprofit Organizations." We have many clients with substantial grant revenue that require Federal Single Audit and Florida Single Audit procedures, Due to the concentration of this type of work in our practice, we provide each member of our professional accounting staff with eighty hours of continuing professional education every two years. Of this total, twenty-four hours directly relate to governmental or other "Yellow Book" type engagements. I I I I I I I I I I I I I I I I I I I DET AILED PROPOSAL 1. General Requirements (continued). Our firm participates in the American Institute of Certified Public Accountants Quality Review Program and we received an unqualified opinion on our last four quality reviews. We have included documentation relating to the most recent review in Section IV. Our firm recognizes that the most important product we can provide to a client is prompt and effective service of the highest quality. All our efforts, as a firm are directed toward achieving that goal. Weare confident we can serve you to your complete satisfaction and we are committed to utilizing the highest level of skills available in our firm to accomplish that very important responsibility. 2. Independence. The firm should provide an affirmative statement that it is independent of the City of Sunny Isles Beach as defined by the U.S. General Accounting Office's Government Auditing Standards (1994). In addition, the firm should provide an affirmative statement that it is independent of the component unit of the City of Sunny Isles Beach as defined by those same standards. We are independent of the City as set forth in the United States General Accountability Office (GAO) Governmental Auditing Standards and as outlined in the State of Florida Department of Professional Regulation Laws and Rules of the State of Florida Board of Accountancy and the American Institute of Certified Public Accountants. The firm should also list and describe the firm's professional relationships involving the City of Sunny Isles Beach or any of its agencies for the past five (5) years, together with a statement explaining why such relationships do not constitute a conflict of interest relative to performing the proposed audit. The firm has had no previous professional relationships involving the City or any of its agencies for the past five (5) years. The firm will provide the City written notice of any professional relationships entered into during the period of this agreement. 3. License to practice in Florida. An affirmative statement should be included that the firm and all assigned key professional staff are properly licensed to practice in Florida. Keefe, McCullough & Co., LLP, is properly licensed in the State of Florida by the Department of Professional Regulation. Our license number is AD 0010282. Further, all members of the firm that are designated as Certified Public Accountants are properly licensed in the State of Florida. I I I I I I I I I I I I I I I I I I I TECHNICAL PROPOSAL 4. Firm qualifications and experience. The proposer should state the size of the firm, the size of the firm's governmental audit staff, the location of the office from which the work on this engagement is to be performed and the number and nature of the professional staff to be employed in this engagement on a full-time basis and the number and nature of the staff to be so employed on a part-time basis. Keefe, McCullough & Co., LLP, C.P.A. 's has existed as a firm for over thirty-five years and we are located in Fort Lauderdale to serve the South Florida area. Our office consists of nine partners, approximately fifty professional accounting staff members and administrative support personnel. The number and level of full-time and part-time staff to be assigned to the engagements would be discussed and approved by client finance personnel, We have listed additional information regarding a proposed staffing plan in number 5. We have substantial experience in the areas of internal control and compliance auditing in accordance with "Government Auditing Standards" ("The Yellow Book"), Federal Single Audits in accordance with OMB Circular A-133 "Audits of States, Local Governments, and N on- Profit Organizations", the Florida Single Audit Act, and the Rules of the Auditor General of the State of Florida. Due to the concentration of this type of work in our practice, we provide each of our Governmental and non-profit accounting staff members with at least eighty hours of continuing professional education every two years. Our governmental audit staff consists of twenty-five professionals. In addition, the firm belongs to the AICP A, FICP A, AICP A Governmental Audit Quality Center, the Government Finance Officers Association and the Broward County League of Cities. Indicate the range of activities performed by the firm, such as auditing, accounting, tax service or management services. Also, whether your organization is local, regional, national or international in operations. Our practice includes audit engagements, management advisory services, tax planning and tax return preparation, and consulting services. Keefe, McCullough & Co., LLP is a local firm with our office in Fort Lauderdale, Florida. The firm is also required to submit a copy of the report on its most recent external quality control review, with a statement whether that quality control review included a review of specific government engagements. Our firm participates in the American Institute of Certified Public Accountants Peer RevIew Program and we have received unmodified opinions on all of our previous peer reviews. We have provided the most recent quality control review documentation for your reference in Section IV. This quality control review included a specific review of the City of Weston and the City of Margate audit workpapers, financial statements and reports. The firm shall also provide information on the results of any Federal or state desk reviews or field reviews of its audits during the past three (3) years. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with state regulatory bodies or professional organizations. Because our firm performs a substantial number of "Yellow Book" type engagements, we routinely receive desk reviews from various State of Florida departments (DCF, FDOT or DOEA). We have had no field reviews during the last three years, and we are not aware of any disciplinary action ever taken or now pending against our firm or any of our professional accounting staff. , I I I I I I I I I I I I I I I I I I I 5. TECHNICAL PROPOSAL Partner, Supervisory and Staff qualifications and experience. Identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement. Indicate whether each such person is registered or licensed to the practice as a certified public accountant in Florida. Provide information on the government auditing experience of each person, including information on relevant continuing professional education for the past three (3) years and membership in professional organizations relevant to the performance of this audit. Our proposed audit team is comprised of the following principal supervisory and management staff: William G. Benson, C,P.A., Engagement Partner Cynthia L. Calvert, C.P.A., Second Review Partner Steve A. Akins, Senior Accountant Field Leader We would have additional staff accountants accompanying the field leader throughout the preliminary and final audit field work as needed. Provide as much information as possible regarding the number, qualifications, experience and training, including relevant continuing professional education ofthe specific staff to be assigned to this engagement. Indicate how the quality of staff over the term of the agreement will be assured. A profile of each audit team member is included in Section III, which lists specific governmental experience, qualifications and continuing professional education. Due to our firm's concentration of governmental and not- for-profit clients, we sponsor continuing professional education courses annually regarding a variety of governmental subjects, including Governmental Accounting Standards Board Statement Number 34 (GASB 34) and other current GASB pronouncements. One eight-hour governmental seminar is offered to our governmental clients. In addition, our entire professional governmental accounting staff takes a significant number of "governmental qualified" continuing education courses every year. Other audit personnel may be changed at the discretion of the proposer provided that replacements have substantially the same or better qualifications or experience. We have experienced very low turnover of our professional accounting staff members and our firm philosophy emphasizes direct partner involvement in each engagement including various phases of the audit fieldwork and review processes. Such involvement positively impacts engagement staff continuity. We will communicate with City finance personnel in the event of staff turnover and promptly identify a mutually agreeable and governmentally qualified replacement team member. However, we understand that the City retains the right to approve or reject replacements. 6. Prior Engagements with the City of Sunny Isles Beach. The Firm has had no previous professional relationships involving the City for the past five (5) years. I I I I I I I I I I I I I I I I I I I TECHNICAL PROPOSAL 7. Similar engagements with other Government Entities. For the firm's office that will be assigned responsibility for the audit, list the most significant engagements (maximum of 5) performed in the last five years that are similar to the engagement described in this request for proposal. These engagements should be ranked on the basis of total staff hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact. Also, include the experience in assisting other municipal clients in obtaining the CFOA Certificate of Achievement for Excellence in Financial Reporting and implementation of GASB 34 All municipalities listed below have received the Certificate of Achievement for Excellence in Financial Reporting on their Comprehensive Annual Financial Reports (CAFR) with the exception of one city that elects not to participate in the program. Mr. Robert Lange, Director of Finance City of North Bay Village 7903 East Drive North Bay Village, FL 33141 305-756-7171 Scope of work: Annual financial and compliance audits of the City Assistance in helping the City obtain the Certificate of Achievement for Excellence in Financial Reporting issued by the Government Finance Officers Association Assistance in helping the City comply with the requirements of Governmental Accounting Standards Board Statement Number 34 (GASB 34) and related pronouncements Date of work: 2002 through 2006 Engagement partner(s): Kenneth G. Smith, C.P.A. Approximate number of hours: 450 Ms. Judith C. Kilgore, Finance Director City of Parkland, Florida 6500 Parkside Drive Parkland, FL 33067 954-753-5040 Scope of work: Annual financial and compliance audits of the City Assistance in helping the City obtain the Certificate of Achievement for Excellence in Financial Reporting issued by the Government Finance Officers Association Assistance in helping the City comply with the requirements of Governmental Accounting Standards Board Statement Number 34 (GASB 34) and related pronouncements Date of work: 1995 through 2006 Engagement partner(s): Kenneth G. Smith, C.P.A. Approximate number of hours: 425 I I ,I I I I I I I I I I I I I I I I I 7. TECHNICAL PROPOSAL Similar engagements with other governmental entities. (continued) Mr. Herbert Herriman, Finance Director City of Plantation, Florida 400 N.W. 73rd Avenue Plantation, FL 33317 954-797-2202 Scope of work: Annual financial and compliance audits of the City and its blended component units Assistance in helping the City comply with the requirements of Governmental Accounting Standards Board Statement Number 34 (GASB 34) and related pronouncements Date of work: 1994 through 2006 Engagement partner(s): William G. Benson, C.P.A. Approximate number of hours: 800 Mr. John R. Flint, City Manager City of Weston, Florida 2500 Weston Road, Suite 101 Weston, FL 33331 954-385-2000 Scope of work: Annual financial and compliance audits of the City Assistance in helping the City obtain the Certificate of Achievement for Excellence in Financial Reporting issued by the Government Finance Officers Association Date of work: 2004 through 2006 Engagement partner(s): Cynthia L. Calvert, C.P.A. Approximate number of hours: 1,000 8. Ms. Maria Camacho, Finance Director Town of Golden Beach One Golden Beach Drive Golden Beach, FL 33160 305-932-0744 Scope of work: Annual financial and compliance audits of the City Assistance in helping the City obtain the Certificate of Achievement for Excellence in Financial Reporting issued by the Government Finance Officers Association Date of work: 2002 through 2006 Engagement partner(s): Kenneth G. Smith, C.P.A. Approximate number of hours: 400 All of the municipalities listed above have implemented Governmental Accounting Standards Board (GASB) Statement Number 34. Specific audit approach. The proposal should set forth a work plan, including an explanation of the audit methodology to be followed, to perform the scope of services to be provided as defined in Section II of this request for proposal. In developing the work plan, reference should be made to such sources of information as the City of Sunny Isles Beach budget and related materials, organizational charts, manuals and programs, and financial and other management information systems. I I II I I I I I I I I I I I I I I I I TECHNICAL PROPOSAL Specific audit approach. (continued) Proposers will be required to provide the following information on their audit approach/plan: a) proposed segmentation of the engagement; b) level of staff to be assigned to each proposed segment of the engagement; c) sample size and extent to which statistical sampling is to be used in the engagement; d) extent of use of EDP software in the engagement; e) type and extent of analytical procedures to be used in the engagement; f) approach to be taken to gain and document an understanding of the City of Sunny Isles Beach's internal control structure; g) approach to be taken in determining laws and regulations that will be subject to audit test work, h) approach to be taken in drawing audit samples for purposes of tests of compliance; i) assistance to be provided in meeting the requirements of the "Certificate of Excellence in Financial Reporting"; j) process to produce a meaningful "management letter." (Include three recent "management letter" developed in connection with local government audits.); k) and internal quality control procedures and external quality control review. Keefe, McCullough & Co., LLP, C.P.A. 's anticipated approach to the examination of the financial statements of the City is summarized below: General Work Plan: 8. We have provided below a preliminary engagement work plan to perform the financial and compliance audits which involve the General Fund, Stormwater Fund, Capital Improvement Fund, Police Forfeiture Fund, and general fixed assets and long-term debt account groups of the City. In performing the financial and compliance audits for the City we will follow a very detailed and comprehensive audit program. Further, it is our policy to utilize the talents of our client I s personnel wherever and whenever it is feasible to do so in the course of any engagement in order to most efficiently perform the engagement. The following is a summary of the general work plan: Preliminary Work: Audit Area Obtain an understanding of the City's accounting and management systems including documentation of the system of internal control through conferences with the various key finance department personnel. Obtain an understanding of the various funds and account groups utilized by the City. Review the City's grants, contracts and various revenue sources and complete "Single Audit" checklist for determination of compliance audit requirements and reporting requirements for both Federal and State guidelines. Review of bond covenants and pertinent ordinances for determination of compliance audit requirements. Assess control risk and determine extent of testing. Responsible Professional Cynthia L. Calvert Cynthia L. Calvert Steve A. Akins Cynthia L. Calvert Steve A. Akins Steve A. Akins Cynthia L. Calvert I I I I I I I I I I I I I I I I I I I I DETAILED PROPOSAL 8. Specific audit approach. (continued) Responsible Professional Review and perform certain transaction and procedural tests which will include the examination of source documents. These tests of the system will include tests of cash receipts and disbursements, sales and utility billing, compliance, and payroll. Audit samples will be determined based on transaction size and number of total transactions. Steve A. Akins Staff Accountant Perform preliminary analytical review procedures. Steve A. Akins Review commission and other pertinent minutes. Cynthia L. Calvert Perform compliance audit procedures where necessary Steve A. Akins Coordinate preparation of confirmation requests. Staff Accountant Working paper review. William G. Benson Plan the financial audit procedures with the Director of Finance including a list of schedules and working papers that could be prepared by the City personnel. Selection and planning of certain confirmations to be prepared. Cynthia L. Calvert Final Work: Perform various tests and validation procedures on selected asset and liability accounts in all funds and account groups. Cynthia L. Calvert Steve A. Akins Examine certain revenue and expenditure accounts in all funds and account groups. Steve A. Akins Staff Accountant Send confirmations where applicable. Steve A. Akins Send correspondence to attorneys as necessary. Steve A. Akins Perform final compliance testing as necessary. Steve A. Akins Perform final analytical procedures. Steve A. Akins Working paper review and proposed journal entry approval. William G. Benson Exit conference with City Manager and the Director of Finance Cynthia L. Calvert William G. Benson I I I I I I I I I I I I I I I I I I I 8. DET AILED PROPOSAL Specific audit approach. (continued) Sample sizes in the various phases of the engagement would be determined based on population sizes, audit objectives and nature of transaction and\or account. We have standardized software that assists in the selection of samples. Additionally, we would utilize both "statistical" and" non-statistical" methods to select certain test transactions. We will also utilize various forms of analytical procedures to accomplish certain objectives. We anticipate areas of concentration subject to analytical procedures to be services revenue and expenditures. We retain the right to use judgement as to the extent of analytical procedures to be used based mainly on results of other testing completed. Keefe, McCullough & Co., LLP provides auditing services to a number of organizations with computerized accounting and other management information systems. All members of our firm are involved daily in the usage of a local area network (LAN) and have proficient "hands on" computer skills. We have certified network engineers on staff to assist in client matters when appropriate. Our professional accounting staff members have taken various college level educational courses and have participated in various continuing education courses on computer science, data processing systems, and other related subjects. Reports: Preparation of Report on the General Purpose Financial Statements. Preparation of Reports on Internal Controls and Compliance. Preparation of Schedules of Federal and State Financial Assistance along with the preparation of the "in-relation to" report on the schedules. (if necessary) Cynthia L. Calvert Steve A. Akins Cynthia L. Calvert Preparation of the management letter. Review of the financial statements and other information. Cynthia L. Calvert William G. Benson Cold review of the financial statements and other information. Kenneth G. Smith Due to the fact that our firm presently represents several local municipalities and many governmental taxing districts, we have substantial experience in providing other consulting services to the City. We have experience in franchise fee auditing, internal control, systems reviews, audit work in connection with bond underwriting and also consulting projects which the City may consider. 9. Identification of Potential Audit Problems. C. At this time we are not aware of any potential audit problem areas. If selected, we will communicate any potential problem areas we become aware of during the audit. At that time, we would outline our approach to resolving such problem areas and the level of assistance necessary from the City's personnel. Not-to-Exceed Dollar Cost Bid. We have included the requested dollar cost bid information in Section V. I I I I I I I I I I I I I I I I I I I KEEFE, McCULLOUGH & CO., LLP CERTIFIED PUBLIC ACCOUNTANTS AUDIT TEAM MEMBER PROFILES Section III ,I I I ,I il II I I I I I I i II I I I I :1 I KEEFE McCULLOUGH & CO. LLP CERTIFiED PUBLIC ACCOUNTANTS SERVICE TEAM MEMBER PROFILE Cynthia L. Calvert, C.P.A. Partner Education Florida Atlantic University Auburn University B BA degree BA degree Major - accounting Major - political science Career Experience Keefe, McCullough & Co., LLP, C.P.A.'s Engagement Experience Keefe, McCullough & Co., LLP, C.P.A.'s Audit Engagements: * Amelia National Community Development District * Arbor Greene Community Development District * Baywinds Community Development District * Beaux Arts of Museum of Art, Inc. * The Benjamin Private School, Inc. * Big Brothers / Big Sisters Association of Florida, Inc. * Big Brothers / Big Sisters of Broward, Inc. * Bobcat Trail Community Development District * Bonnet Creek Resort Community Development District * Briger Community Development District * Broward Adjustment SerVIces, Inc. * Broward County Chapter - American National Red Cross * Broward County League of Cities, Inc. * Broward House, Inc. * Broward Risk Management Association * Caroch Properties * Center for rndependent Living of Broward, Inc. * Central and South American World Sector, Inc. * Championsgate Community Development District * Child Protection Team of Palm Beach, Inc. * City of A ventura, Florida * City of A ventura Police Officers Retirement Plan * City of Margate, Florida * City of Parkland, Florida * City of Plantation, Florida * City of Weston, Florida * City of Wilton Manors, Florida * The Clinton Mortgage Network, Inc. * Colonial Inn at Heritage Park, LLLP * Community Television Foundation of South Florida, Inc. * Community Television Foundation of South Florida, Inc. Money Purchase Thrift Plan * Community Television Foundation of South Florida, Inc. Retirement Plan * Coral Springs Improvement District * Deer Island Community Development District * Downtown Development Authority * East Homestead Community Development District * Episcopal Church of St. Mark the Evangelist * FIrefighters Charitable Foundation, Inc. * Florida Atlantic University Foundation, Inc. * Florida International Academy, Inc. * Fogmaster Consolidated, Inc. * Habitat Community Development District * Hamal Community Development District * Harbourage on Braden River Community Development District Partner 12 years 'I I I I I I I I I I I I I I I I I I I * The Haven, Inc. * Heritage Greens Community Development District * Heritage Harbour South Community Development District * Heritage Home Health, Inc. * Heritage Park, LLLP 401 (k) Salary Reduction Plan and Trust * Heritage Park, LLLP * Heritage Park of West Delray, LLLP * Hugs for Kids * Islamorada, Village of Islands, Rorida * Julington Creek Plantation Development District * Jupiter Marine International, Inc. * Ki1lamey Community Development District * Lake Powell Community Development District * Lakewood Ranch Community Development District * Lexington Oaks Communtiy Development District * Margate Community Redevelopment Agency * Meaaow Pines Community Development District * Meadow Pointe Community Development District * Mediterra North Community Development District * Mediterra South Community Development District * Messianique Training Center & Institute, Inc. * Midtown Miami Community Development District * Miromar Lakes Community Development District * Mitigating Circumstances SKS Contractors, Inc. * Monterra Community Development District * Narcoossee Community Development District * Northwest Focal Point Senior Center * Northwood Community Development District * OCO Partnership, Inc. * Oakwood Center of the Palm Beaches, Inc. * Old Palm Community Development District * Orchid Grove Community Development District * OSRrey Health Care, Inc. * PPGM Foundation, Inc. * Palm Bay Community Development District * Palm Glades Community Development District * Parklands West Community Development District * Pine Air Lakes Community Development District * Pine Crest Preparatory School, Inc. * Place of Hope Foundation, Inc. * Place of Hope Holdings, Inc. * Place of Hope, Inc. * Planned Parenthood of Greater Miami & Rorida Keys, Inc. * Plaza South Association, Inc. * Renaissance Community Development District * SKS Engineering & Planning, Inc. * SOS ChIldren's Village of Fforida, Inc. * St. Mark's EpiscQpal School * Saxon Business Systems, Inc. * Saxon Business Systems of North Florida, Inc. * Security Mortgage Group, Inc. * Severn Trent Services * South County Foundation for Mental Health, Inc. * South County Mental Health Center, Inc. * South Dade Venture Community Development District * Southeast Mechanical Contractors, Ltd. * The South Rorida Church of Christ, Inc. * Spicewood Community Develo}Jment District * Stevens Plantation Community Development District * Stonegate Community Development District * StoneLake Ranch Community Development District * Sunburst Sanitation CorporatIon (Franchise audit) * Tomoka Community Development District * The Town Foundation, Inc. * Town of Pembroke Park, Rorida * Town of Southwest Ranches, Rorida * University Square Community Development District * V erandah West Community Development District * Village of Sea Ranch Lakes, Florida * WPBT Communication Foundation, Inc. * Westchase Community Development District * Westchase East Community Development District I I I I I I I I I I I I I I I I I I I * Westwind Contracting, Inc. Other Experience Attended numerous seminars and courses dealing with accounting and audit problems and reporting and disclosure issues (these include accounting and reporting for nonprofit organizations, governmental entities and the Federal and Rorida Single Audit Acts) Experienced and qualified with respect to "Yellow Book", OMB Circular A-133 and Rules of the Auditor General of the State of Flonda compliance auditing and reporting Past President of Plantation Junior Woman's Club Founding Board member of the Make-A- Wish Foundation of South Rorida, Inc. Past Director of DALI's, auxiliary of Young At Art Past Director of Friends of Gilda's Club of South Rorida Participant in State of Rorida Auditor General seminar for local governments and nonprofits regarding the Rorida Single Audit Act Experience in dealing directly with the State of Florida Department of Children and Families concerning various compliance, audit and other issues Graduate of, and continuing involvement in, the Leadership Broward Program Member of the Leadership Broward Foundation, Inc. Treasurer of Junior League of Ft. Lauderdale Participated in various seminars and in-house trainin~ programs concerning the requirements of GASB-34, Basic Financial Statements-and Management s Discussion and Analysis-for State and Local Governments (the Financial Reporting Model) Assisted municipalities and other governmental entities in planning for and implementing GASB-34, Basic Financia Statements-and Management's DiscussIOn and Analysis-for State and Local Governments (the Financial Reporting Model) I I I I I I I I I I I I I I I I I I I c~flf~~irrf~Bkt~Uf~ct>il~T kkfs SERVICE TEAM MEMBER PROFILE William G. Benson, C.P.A. Marketing Partner Education Washington and Lee University BS degree Career Experience Keefe, McCullough & Co., LLP, C.P.A.'s Partner Coopers & Lybrand, C.P.A.'s Senior Engagement Experience Keefe, McCullough & Co., LLP, C.P.A.'s Audit Engagements: * AIr-Conditioning & Refrigeration Wholesalers * Alzheimer's Family Center, Inc. * American Eldercare, Inc. * Arbor Greene Community Development District * Bonita Springs Charter School * Bonnet Creek. Resort Community Development District * Broward County League of Cities, Inc. * Cape Coral Charter 5chool * Carnahan, Proctor and Cross, Inc. (DOT overhead audit) * Caroch Properties * Center for Family and Child Enrichment, Inc. * Championsgate Community Development District * Charter Schools USA, Inc. * Charter Schools USA 40 I (k) Plan * City of Margate, Florida * City of Plantation, Florida * City of Weston, Florida * Colonial Inn at Heritage Park, LLP * Community Asphalt Corp. * Coral Springs Improvement District * County SanItation} Inc. * Delray Youth EnrIchment Development Center, Inc. * Deer Island Community Development District * The Downtown Miami Charter School, Inc. * Driftwood Beach Club Association, Inc. * East Homestead Community Development District * Ecological Technologies, LLC * Falls at Marina Bay, Ltd. * First Presb)'terian Continuing Church of Coral Springs, Inc. * Fogmaster Consolidated, Inc. and Subsidiaries * Gateway Charter High School * Gateway Charter Scnool * HBC, Inc. (Hillsboro Bay Club Apartments) * Habitat Community Development District * Hamal Community Development District * Henderson Mental Health Center, Inc. * Heritage Greens Community DeveloQment District * Heritage Harbour South Community Development District * Heritage Home Health, Inc. * Heritage Park, LLLP * Heritage Park, LLLP 40 I (k) Salary Reduction Plan and Trust * Heritage Park of West Delray, LLLP * Heritage Park Retirement Communities, LLC * HilIsboro Inlet District Major - accounting 20 years 2 years I I I I I I I I I I I I I I I I I ,I I * Hollywood Academy of Arts & Science * The Homestead Charter Foundation, Inc. * Islamorada, Village of Islands, Rorida * Junior Achievement of South Rorida, Inc. * Lake Powell Community Development District * Lakewood Ranch Community Development District * Lewis Marine Supply, Inc. Profit SharIng Plan * Liberty Inn, LLC * Meadow Pointe Community Development District * Mediterra North Community Development District * Mediterra South Community Development District * Midtown Miami Community Development District * Miromar Lakes Community Development District * Narcoossee Community Development District * North Broward Academy of Excellence * North County Charter School * North Pompano Baptist Church Holding Company, Inc. * Northeast Academy * Northwood Community Development District * Oakwood Center of the Palm Beaches, Inc. * Orchid Grove Community Development District * Palm Bay Community Development District * Parklands West Community Development District * Petmed EXRress Inc. * Pine Air Lakes Community Development District * Plaza South Association, Inc. * Regency Tower Association, Inc. * Renaissance Charter School, Inc. * Renaissance Community DeveloRment District * Retirement Plan for Employees of Oakwood Center of the Palm Beaches, Inc. * South County Foundation for Mental Health, Inc. * South County Mental Health Center, Inc. * Southern Specialties, Inc. * Spicewood Community Development District * Starlink Telecommunication Technologies, Inc. * Stonegate Community Development DIstrict * The Town Foundation, Inc. * University Square Community Development District * Verandah West Community Development District * W. Jackson & Sons Construction Co. * Westwind Contracting, Inc. Other Experience Attended seminars and courses dealing with accounting and audit problems, reporting and disclosure issues (these courses include accounting and reporting for nonprofit organizations, governmental entities and the Federal and Florida Single Audit Acts) III 2003 and 2004 Experienced and qualified with respect to "Yellow Book", OMB Circular A-133 and Rules of the Auditor General of the State of Florida compliance auditing and reporting Attended numerous seminars and courses dealing with accounting, auditing and taxation of employee benefit plans Litigation support services in the areas of business valuations, business losses, contract settlements and divorce Issues Experience in dealing directly with the State of Florida Department of Children and Families concerning various compliance, audit and other issues Special consulting partner regarding the acquisition of manufacturing companies Worked with underwriters regarding various certifications required in connection with the Rorida Community Provider Pooled Loan Program Assisted the First Presbyterian Continuing Church of Coral Springs, Inc. in restructuring their existing bond indenture Past President and Treasurer of the Executives of Broward Graduate of, and continuing involvement in, the Leadership Broward Program I. I I II I :1 I I I I I I I I I I I I I I I Member of the Leadership Broward Foundation, Inc. Member and Officer in Knights of Columbus Appointed to the Broward County, Florida Homeless Initiative Partnership Partner in charge of special audit procedures engagement of a Emergency Medical Services Company Partner in charge of special audit procedures regarding various county franchise reports for waste hauling compames Partner in charge of due diligence procedures in connection with potential mergers and acquisitions Special consultant to Seventeen City Coalition (a Partnership of seventeen Broward municipalities) regarding special audit procedures of Broward County's Emergency Medical System records and negotiatIOns with Broward County management Extensive experience regarding accounting and tax issues of Limited Liability Companies (LLC's) Treasurer of St. Gregory the Great Catholic School Member of St. Gregory the Great Catholic School Advisory Board Member of St. Gregory the Great Catholic School Home School Association Experience in the development of annual operating budgets for churches and schools Member of the Board of Directors of St. Thomas Aquinas High School Consulting partner on State of Florida Broward County Health Department audit Experience in assisting clients in dealings with financial institutions Experience in assisting clients with the development of business plans, financial planning and proforma financial statements Consulting assistance in the analysis of potential investment oPRortunities in a variety of industries. The analysis included due diligence procedures on both historical financial information and projected future financial results I I I I I I !I I I I ,I I I I I I I I I KEEFE McCULLOUGH & CO. LLP CERTIFiED PUBLIC ACCOUNTANTS SERVICE TEAM MEMBER PROFILE Steven A. Akins Senior Education University of Central Florida BSBA Degree Career Experience Keefe, McCullough & Co., LLP, C.P.A.'s Gables Residential, Inc. Majors - accounting and finance Senior 3 years Property Accountant -Intern I year Engagement Experience Keefe, McCullough & Co., LLP, c.P.A.'s Audit Engagements: * A.axon Holdings, Inc. * Amelia National Community Development District * Big Brothers/Big Sisters of Broward, Inc. * Big Brothers/Big Sisters Association of Florida, Inc. * Bnger CommunIty Development District * Broward County Chapter - American National Red Cross * Broward County Citizens Safety Council, Inc. * CTI Construction Testing & Inspection, Inc. * ChamRionsgate Community Development District * City of A ventura, Florida * City of Plantation, Florida * City of Weston, Florida * Colonial Inn at Heritage Park, LLLP * Coral Springs Improvement District * Deer Island Community Development District * FDL Holdings, Inc. * First Presbyterian Church of Coral Springs, Inc. * Gold Coast Jazz Society, Inc. * Hamal Community Development District * Harbourage on Braden River Community Development District * The Haven, Inc. * Heritage Harbour South Community Development District * Heritage Home Health, Inc. * heritage Park, LLP * Heritage Park of West Delray, LLP * Heritage Park Retirement Communities, LLC * Islamorada, Village of Islands, Florida * Lake Powell Community Development District * Lakewood Ranch Community Development District * Liberty Inn, LLC * Meadow Pines Community Development District * Miromar Lakes Community Development District * Narcoossee Community Development District * Parklands West Community Development District * Pine Air Lake Community Development District * Pine Crest Preparatory School - Money Purchase Plan * Russell Engineering, Inc. * South County Mental Health Center, Inc. - Pension Trust * Spicewood Community Development District * Tomoka Community Development District * The Town Foundation, Inc. * Town of Pembroke Park, Florida I I I I I I I I I I I I I I I I I I I Other Experience Attended numerous seminars and courses dealing with accounting and auditing II -- i II 'I I I I I I I I I I I I I II I I I I KEEFE, McCULLOUGH & CO., LLP CERTIFIED PUBLIC ACCOUNTANTS PEER REVIEW DOCUMENTS Section IV I I I I I I I I I I I I I I I I I I I AJeK Abbott, JordanG&Koon, LLC CERTIFIED PUBLIC ACCOUNTANTS To the Partners Keefe, McCullough & Co., LLP P,O. Box 6090405 Second Street 0 Manchester, GA31816 (706) 846-8401 0 Fax (706) 846-3370 We have reviewed the system of quality control for the accounting and auditing practice of Keefe, McCullough & CO" LLP (the firm) in effect for the year ended August 31, 2005. A system of quality control encompasses the firm's organizational structure and the policies adopted and procedures established to provide it with reasonable assurance of conforming with professional standards. The elements of quality control are described in the Statements on QU2lity Co!:tro! St2nc2rds issl..!ed by the AtT!erican !~stitute of C8rtifisd Public Accountants (AICPA). The firm is responsible for designing a system of quality control and complying with it to provide the firm reasonable assurance of conforming with professional standards in all material respects. Our responsibility is to express an opinion on the des;~J/l of the system of quality control and the firm's compliance with its system of quality control based on our review. Our review was conducted in accordance with standards established by the Peer Review Board of the AICPA. During our review, we read required representations from the firm, interviewed firm personnel and obtained an understanding of the nature of the firm's accounting and auditing practice, and the design of the firm's system of quality control sufficient to assess the risks implicit in its practice. Based on our assessments I we selected engagements and administrative files to test for conformity with professional standards and compliance with the firm's system of quality control. The engagements selected represented a reasonable cross-section of the firm's accounting and auditing practice with emphasis on higher-risk engagements. (The engagements selected included among others, audits of Employee Benefit Plans and engagements performed uncler Government Auditing Standards. Prior to concluding the review, we reassessed the adequacy of the scope of the peer review procedures and met with firm management to discuss the results of our review. We believe that the procedures we performed provide a reason8h1e basis for our opinion. In performing our review, we obtained an understanding of the system of quality control for the firm's accounting and aud.iting 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. Our review was based on selected tests therefore it would not necessarily detect ClII weaknesses in the system of quality control or all instances of noncompliance with it. There are inherent limitations in the effectiveness of any system of quality control and therefore noncompliance with the system of quality control may occur and not be detected. PrCljection of any evaluation of a system of quality control to future periods is subject to the ri~k that the system of quality control may become inadequate because of changes in conrliticns, or because the degree of compliance with the policies or procedures m,IY deteriorate. MEMBERS OF PRIVATE COMPANIES PPACTICE SECTION OF THE AMERICAN INSTiTUTE OF CERTIFIED PUBLIC ACCOUNTANTS GEORGIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS I I I I I I I I I I I I I I I I I I I Page 2 of 2 In our opinion, the system of quality control for the accounting and auditing practice of Keefe, McCullough & Co., LLP in effect for the year ended August 31, 2005, has been designed to meet the requirements of the quality control standards for an accounting and auditing practice established by the AICPA and was complied with during the year then ended to provide the firm with reasonable assurance of conforming with professional standards. /~jJ~ ~A V~ Manchester, Georgia December 2,2005 AJ&K I FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 325 WEST COLLEGE AVENUE. P.O. BOX 5437.TALLAHASSEE. FLORIDA 32314 TELEPHONE (850) 224-2727. FAX (850) 222-8190 I April 24, 2006 I Joseph D. Leo, CPA Keefe, McCullough & Co., LLP 6550 N Federal Hwy Ste 410 Fort Lauderdale, FL 33308-1417 I I Dear Mr. Leo: I It is my pleasure to notify you that on April 24, 2006 the Florida Peer Review Committee accepted the report on the most recent peer rev lew of your firm. The due date for your next review is February 7. 8, 2009. This is the date by which all review documents should be completed and submitted to the administering entity. Since your firm's due da te falls between January and April, you may arrange' to have your review a few months earlier to avoid having a review during tax season. I I As you know, the reviewer's opinion was unmodified. The Committee asked me to convey its congratulations to the firm. I Sincerely, I ~/Z~~ I Paul N. Brown Peer Review Director of Technical Services I cc: David C Jordan, CPA Firm Number: 10036786 Review Number: 227614 I I I I I I:J: D.t :E ct: ~ ~ o ~ Q. s: bJ I&Il > IJJ n: It IJJ fit 0.. @ 'R Ci'l 'R ~ ~ '-8 ~ (p ~ (p ~ ~ u ~ '-8 ..... ~ >"j ~ ~ d; ~ g o~ ~ o~ ~ ~ g Q ~ ~ ~ g ~ ~ ~ ~ ~ Q oFi ~ orl ~ ~ ~ U ~ '-8 ~ ~ ~ ~ " o U ~ ~ eI) = o ~ ~ :s U u ~ r0- C.) ~ 0.) Q,) ~ ... b ~ "" ~ . ~ CJ) ...., "\j 0/) ... ;;:: b ..... "\j ... ;;:: ~ b - "\j ...., 5 l: ~ ~ :- -:: .;: b \,) C ~ ;;:: ~ ~ ~'~ ~ ...., ..... CJ) ... ..... - ~ ... - r-, '.:... ..... b ;::< 0 ~ ~ t:: ~ \,)b<0R.. '';:; ~ \,) ~ \,) ... CJ) ...., b ~ b ..... ... ......... ~ ~ R.. 0 ~ 0/) 0/) CJ) \,) ;;:: ;;:: ..., ..... ..... ..... ;;:: ~ f: ...., ~ ~ ... "\j f: <2. ~ ~"lj;;:: b ..... ;;:: 0 "lj~b\,) ;;:: b<...... ......... b ~ 6:: 0 O/)~u~ .~ ~ ~ ~ ~ ~ ~ rj ;;:: ~ ~ ... ~ ~ ..., ~ 8f:?)i2 \,) o...c b b....,"lj~ CJ) - ~ - ...., ~......c ..... "" ..... b ... ;;:: .~ ;;:: 0/)- ",,0 ..... ...c 0 ...... CJ) .... CJ) - ~ ~ b E"\jCJ)~ ...., ;;:: ~ ... ;;:: ~ ~ ~ o ~ \,) ...., \,) ...c '';:; ?) CJ) \,) ~ .;: b ~ f: C; ~ R..'~ ~ ~ l:l.Q......... b<.~ ;;:: ~ ......... ~'';:; ...., o 8 ..... ~ f: ~ "lj "lj ~ ~ ~ ..... ...., ~ b ;:;, CJ) C\l "lj 0 ~ "' ;;:: ... b ~ b 6- b.t)~ ~~ ;;:: ~ ..... ~ . ~ 0/) ...., "lj b ~ ;;:: ... ~ ~ 5 ~ ... "lj \,) ;;:: r? ~ \,) ~ ""'I"\j b~ ;;:: ;;:: ...., ~ b ... <2. CJ) "lj ... ... b b ~ "\j ?) ;;:: ~ b ~ ~ ...., ~ .;::. ~ ~ 0 ~t:Q U ;:s 0' .~ .J:: ;:::, I~ .... ~ a' 5~C) ~....C'\:j . ~ ~~ .~ ~ Q~ ~ 't> <II ;s ... <II U o :!.! II I I I I I I I I I I I I I I I I I I KEEFE, McCULLOUGH & CO., LLP CERTIFIED PUBLIC ACCOUNTANTS DOLLAR COST BID AND SCHEDULE OF PROFESSIONAL FEES Section V I I II II I il I I I I I I I I I I I I I I CITY OF SUNNY ISLES BEACH REQUEST FOR PROPOSAL DOLLAR COST BID FOR THE AUDIT OF THE 2007,2008 AND 2009 FINANCIAL STATEMENTS Keefe, McCullough & Co., LLP certifies that William G. Benson, C.P.A, is entitled to represent the firm, empowered to submit the bid and authorized to sign a contract with the City. Our fee for services rendered will be based upon the difficulty of your engagement and the time and skill level of our personnel assigned. Work is assigned, according to its complexity, to the appropriate member of our staff. Our proposed fees for the audit of the financial statements for the years ended September 30, are: 2007 2008 2009 $ 37,500 $ 40,000 $ 42,500 Our firm commits to these "total all-inclusive maximum fees" for each of the audit years. We hav~ included a schedule which details the hours anticipated by staff classification for each of the audit servIces. We agree to the City's proposed method of interim billings based on hours of work completed during the course of the engagement. We have included below a chart which reflects our firm's standard hourly rates which would apply for any services outside the scope of the audit engagement. These types of requests will be negotiated at the following rates: Partner Manager Supervisory staff Senior accountant Staff $ $ $ $ $ 215 180 140 85 65 I I I :1 I I 'I I I I I I I I I I I I I I I CITY OF SUNNY ISLES BEACH REQUEST FOR PROPOSAL SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 2007 FINANCIAL STATEMENTS Standard Hours Partners 20 70 100 130 130 450 Managers Supervisory staff Senior accountant Staff Subtotal Out-of-pocket expenses: Meals and lodging Transportation Other - report printing Total all-inclusive maximum fees Standard Quoted Hourly Quoted Hourly Rate Hours Rate $ 215 20 $ 160 180 70 120 140 100 95 85 130 70 65 130 55 $ 150 37 ,500 FOR FEDERAL AND STATE SINGLE AUDIT PROCEDURES (IF REOUIRED) The City has not been required to prepare Federal and state single audit reports in the previous year. We would propose a $ 2,500 fixed fee which would apply only in years when single audit procedures are required. I I I I I I I I I I I I I I I I I I I CITY OF SUNNY ISLES BEACH REQUEST FOR PROPOSAL SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 2008 FINANCIAL STATEMENTS Standard Hours Partners 25 75 Managers Supervisory staff 105 135 Senior accountant Staff 135 475 Subtotal Out-of-pocket expenses: Meals and lodging Transportation Other - report printing Total all-inclusive maximum fees Standard Quoted Hourly Quoted Hourly Rate Hours Rate $ 215 25 $ 160 180 75 120 140 105 95 85 135 70 65 135 55 150 $ 40.000 FOR FEDERAL AND STATE SINGLE AUDIT PROCEDURES (IF REQUIRED) The City has not been required to prepare Federal and state single audit reports in the previous year. We would propose a $ 2,500 fixed fee which would apply only in years when single audit procedures are required. II I I I I I I I I I I I I I I I I I I CITY OF SUNNY ISLES BEACH REQUEST FOR PROPOSAL SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE 2009 FINANCIAL STATEMENTS Standard Hours Partners 30 Managers 75 115 Supervisory staff Senior accountant 140 140 500 Staff Subtotal Out-of-pocket expenses: Meals and lodging Transportation Other - report printing Total all-inclusive maximum fees Standard Quoted Hourly Quoted Hourly Rate Hours Rate $ 215 30 $ 160 180 75 120 140 115 95 85 140 70 65 140 55 275 $ 42,500 FOR FEDERAL AND STATE SINGLE AUDIT PROCEDURES (IF REQUIRED) The City has not been required to prepare Federal and state single audit reports in the previous year. We would propose a $ 2,500 fixed fee which would apply only in years when single audit procedures are required. I I I I I I I I I I I I I I I I I I I KEEFE, McCULLOUGH & CO., LLP CERTIFIED PUBLIC ACCOUNTANTS PROPOSER WARRANTIES Section VI I :1 I I I I I I I I I I I I I I I I I 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 missions 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. 4. Proposer warrants that all information provided by it in connection with this proposal is true and accurate. Signature of Official: Name (typed): Title: Firm: Date: ~ Partner Keefe, McCullough & Co., LLP May 2, 2007 I APPENDIX G I SWORN STATEMENT PURSUANT TO S287.133(3)(a) FLORIDA STATUTES, ON PUBLIC ENTITY CRIMES THIS FORM MUST BE SIGNED AND SWORN TO IN THE PRESENCE OF A NOTARY PUBLIC OR OTHER OFFICIAL AUTHORIZED TO ADMINISTER OATHS. I I 1. This sworn statement is submitted to: by: for: whose business address is: City of Sunny Isles Beach, Florida. William G. Benson, C.P.A., Partner Keefe, McCullough & Co., LLP 6550 North Federal Highway, Suite 410 Fort Lauderdale, Florida 33308 I and (if applicable) its Federal Identification Number (FEIN) is: 59-1363792 I 2. I understand that a "public entity crime" as defined in Paragraph 287.133(1)(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 with 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 or any other state or of the United States and involving antitrust, fraud, theft, bribery, collusion, racketeering, conspiracy or material misrepresentation. I 3. I understand that "convicted" or "conviction" as defined in Paragraph 287. 133(1)(b), Florida Statues means a finding of guild or a conviction of a public entity crime, with or without an adjudication of guild, 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 a jury verdict, non-jury trial. or entry of a plea of guilty or nolo contendre. I I 4. In understand that an "affiliated" as defined in Paragraph 287.133(1 )(a), Florida Statutes means: a. A predecessor or successor of a person convicted of a public entity crime; or I 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 crime. 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 a joint 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. I understand that a "person" as defined in Paragraph 287 . 133(1)(e), Florida Statutes, means any natural person or any 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 led 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 an entity. I I 5. I I I I State of Florida) ) ss. County of Broward) BEFORE ME, this 2nd day of May, 2007, by William G. Benson. "" "It, ~*,!;r;1.....~.. Beth C. Anderton .~')~ C ;:\ .: ommlaslon" 00411838 ~ .,/ l Expires October 1 200i , .i" AaR'" fli, ,.~ IA'WflftU 1116 _f~li I I Notary Seal: I Personally Known X or Produced Identification Identification produced I I I I I I I I I I I I I I I I I I I APPENDIX H NON-COLLUSION AFFIDAVIT State of Florida) ) ss. County of Broward) William G. Benson, being first duly sworn, deposes and says that: 1. He is the Partner of Keefe, McCullough & Co., LLP, of the Bidder that has submitted the attached bid; 2, He 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; 4. Neither the 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 person to fix the price or prices in the attached Bid or of any other Bidder, or to fix 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 Isles Beach, or any person interested in the proposed work; 5. The price of 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. tr~ I State of Florida) ) ss. County of Broward) BEFORE ME, this 2nd day of May, 2007, by William G. Benson. 6P/-th (', ' ~\0{\e~ Notary's Name Printed, Stamped or yped Notary Seal: Personally Known L or Produced Identification _ Identification produced ",tU'JI ,,~t'!\!...U-,,; Beth C ~~A"~~ A d -.. ;~ Com . n &rton '~~.".ck:;'': Exp' miSSion # 00471639 'Ifill"'" "- T~~~ OctOber " 2009 ~;I~~1IJf~ II II I I I I I I I I I I I I I I I I I SAMPLE CLIENT ENGAGEMENT LETTER May 2, 2007 Client Contact Client Name Client Address Dear Client Contact: Weare pleased to confirm our understanding of the services we are to provide to Client Name for the years ended June 30, 2007, 2008 and 2009. We will audit the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information, which collectively comprise the entity I s basic financial statements, of each of the above-mentioned schools as of and for the year ended June 30,2005. Also, the document we submit to you will include the following additional information that will be subjected to the auditing procedures applied in our audit of the financial statements which includes: 1. Management's discussion and analysis. 2. Budgetary comparison schedules AUDIT OBJECTIVE The objective of our audit is the expression of an opinion as to whether your financial statements are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America and to report on the fairness of the additional information referred to in the first paragraph when considered in relation to the financial statements taken as a whole. Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America and the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and will include tests of the accounting records and other procedures we consider necessary to enable us to express such an opinion. If our opinion on the financial statements is other than unqualified, we will fully discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to form or have not formed an opinion, we may decline to express an opinion or to issue a report as a result of this engagement. We will also provide a report (that does not include an opinion) on internal control related to the financial statements and compliance with laws, regulations, and the provisions of contracts or grant agreements, noncompliance with which could have a material effect on the financial statements as required by Government Auditing Standards. This report will include a statement that the report is intended solely for the information and use of the Board of Directors, management, and specific legislative or regulatory bodies and is not intended to be and should not be used by anyone other than these specified parties. I I I I I I I I I I I I I I I I I I I Client Name -2- May 2,2007 MANAGEMENT RESPONSIBILITIES Management is responsible for establishing and maintaining internal control and for compliance with laws, regulations, contracts and agreements. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of the controls. The objectives of internal control are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorizations and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting princip les. Management is responsible for making all financial records and related information available to us. We understand that you will provide us with such information required for our audit and that you are responsible for the accuracy and completeness of that information. We will advise you about appropriate accounting principles and their application and will assist in the preparation of your financial statements, but the responsibility for the financial statements remains with you. As part of our engagement, we may propose standard, adjusting, or correcting journal entries to your financial statements. You are responsible for reviewing the entries and understanding the nature of any proposed entries and the impact they have on the financial statements. That responsibility includes the establishment and maintenance of adequate records and effective internal control over financial reporting the selection and application of accounting principles, and the safeguarding of assets. Management is responsible for adjusting the financial statements to correct material misstatements and for confirming to us in the representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud affecting the government involving (a) management, (b) employees who have significant roles in internal control, and (c) others where the fraud could have a material effect on the financial statements. You are also responsible for informing us of your knowledge of any allegations of fraud or suspected fraud affecting the government received in communications from employees, former employees, regulators, or others. In addition, you are responsible for identifying and ensuring that the entity complies with applicable laws and regulations, and for taking appropriate steps to remedy any fraud, illegal acts, or violations of contracts or grant agreements that we may report. AUDIT PROCEDURES - GENERAL An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. We will plan and perform the audit to obtain reasonable rather than absolute assurance about whether the financial statements are free of material misstatement, whether from errors, fraudulent financial reporting, misappropriation of assets, or violations of laws or governmental regulations that are attributable to the entity or to acts by management or employees acting on behalf of the entity. Because an audit is designed to provide reasonable, but not absolute, assurance and because we will not perform a detailed examination of all transactions, there is a risk that material misstatements may exist and not be detected by us. In addition, an audit is not designed to detect immaterial misstatements, or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements. However, we will inform you of any material errors that come to our attention, and we will inform you of any fraudulent financial reporting or misappropriation of assets that come to our attention. We will also inform you of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not extend to matters that might arise during any later periods for which we are not engaged as auditors. I I I I I I I I I I I I I I I I I I I Client Name -3- May 2,2007 Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, creditors, and financial institutions. We will request written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will also require certain written representations from you about the financial statements and related matters. Identifying and ensuring that each ofthe above-mentioned schools comply with laws, regulations, contracts, and agreements is the responsibility of management. As part of obtaining reasonable assurance about whether the financial statement are free of material misstatement, we will perform tests of each of the above-mentioned school I s compliance with applicable laws and regulations and the provisions of contracts and agreements. However, the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an opinion. AUDIT PROCEDURES - INTERNAL CONTROL In planning and performing our audits, we will consider the internal control sufficient to plan the audit in order to determine the nature, timing, and extent of our auditing procedures for the purpose of expressing our opinion on each of the above-mentioned school I s financial statements. We will obtain an understanding of the design of the relevant controls and whether they have been placed in operation, and we will assess control risk. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the financial statements. Tests of controls are required only if control risk is assessed below the maximum level. Our tests, if performed, will be less in scope than would be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to Government Auditing Standards. An audit is not designed to provide assurance on internal control or to identify reportable conditions. However, we will inform the government body or audit committee of any matters involving internal control and its operations that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. We will also inform you of any nonreportable conditions or other matters involving internal control, if any, as required by Government Auditing: Standards. AUDIT ADMINISTRATION, FEES, AND OTHER We understand that your employees will prepare all cash or other confirmations we request and will locate any invoices selected by us for testing. The audit documentation for this engagement is the property of Keefe, McCullough & Co., LLP and constitutes confidential information. However, pursuant to authority given by law or regulation, we may be requested to make certain audit documentation available to the appropriate County School Board or its designee, a Federal agency providing direct or indirect funding, or the U.S. General Accounting Office for purposes of a quality review of the audit, to resolve audit findings, or to carry out oversight responsibilities. We will notify you of any such request. If requested, access to such audit documentation will be provided under the supervision of Keefe, McCullough & Co., LLP personnel. Furthermore, upon request, we may provide copies of selected audit documentation to the aforementioned parties. These parties may intend, or decide, to distribute the copies or information contained therein to others, including other governmental agencies. II I I I I I I I I I I I I I I I I I I Client Name -4- May 2, 2007 We estimate our fee for these services to be $ for each of the schools. Our fee for services rendered will be based upon the difficulty of your engagement, the anticipated cooperation of your personnel, the time and skill level of our personnel assigned and the assumption that unexpected circumstances will not be encountered during the engagement. Work is assigned, according to its complexity, to the appropriate member of our staff. An invoice for the services provided will be presented at the completion of the engagement or at the end of each semi-monthly billing period, whichever occurs first. Payment of our invoice is due when rendered. Government Auditing Standards require that we provide you with a copy of our most recent quality control review report. Our 2005 peer review report accompanies this letter. We appreciate the opportunity to be of service to Client Name and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. Very truly yours, KEEFE, McCULLOUGH & CO., LLP Signature of Partner RESPONSE: This letter correctly sets forth the understanding of Client Name. Officer's Signature Title Date II I I I I I I I I I I I I I I I I I I CITY OF WESTON, FLORIDA REPORT TO MANAGEMENT September 30, 2006 1 ~ Ii.EEFE. McCULLOUGH &. CO.. LLP !I < 'EH'I'I FI ED Pl 'BLH' AC< 'Ol ;"'TA"'T~ CHARLES K. RUMPF. C.P.A. ISRAEL J. GO~IEZ. C.P.A. JAMES R. LAR,\WAY, C.P.A. ROSS S. GOTI'HOFFER. C.PA HILLARY B. DAIGLE. C.P.A. 6550 NORTH FEDERAL HIGHWAY SUITE410 FORT LAUDERDALE. FLORIDA 33308 (954) 77 1-0896 FAX: (954) 938-9353 E-MAIL: kmc@kmccpa,colll I HJIIN R. KEEFE. C.P.A. JOliN E. McCULLOUGH. C.P.A. <RETIREDI THOt\IAS T. CARPENTER. C.P.A. PAUL B. SNEIDER. C.PA (RETIRED) STEVEN II. WOODS, C.P.A. DAVID T. WILLIAMS, C.P.A. JOSEPIID. LEO, CPA WILLIAM G. BENSON, C.P.A. BRIAN D. PINNELL. C.PA (RETIRED) KENNETII G. SMITII. C.P.A. LOUIS R. PROIETro, C.P.A. CYNTIIIA L CALVERT. C.P.A. 1 1 1 1 To the Honorable Mayor, City Commission and City Manager City of Weston, Florida Weston, Florida I ,I In planning and performing our audit of the financial statements of City of Weston, Florida (the "City"), for the year ended September 30, 2006, we considered the City's internal controls to determine our auditing procedures for the purpose of expressing an opinion on the financial statements and not to provide assurance on the internal controls. 1 However, during our audit we became aware of certain matters that represent opportunities for you to strengthen your internal controls and operating efficiencies. The list that accompanies this letter summarizes our comments and recommendations. This letter does not affect our separate report dated December 21, 2006 on the financial statements of City of Weston, Florida. None of the enclosed comments are intended to reflect on the honesty, integrity or competence of the personnel of the City, but are mentioned only to aid you in improving existing procedures and internal controls. I I After you have had an opportunity to consider our comments and recommendations, we would be happy to discuss them with you at your convenience. I 1 KEEFE, McCULLOUGH & CO., LLP 1 Fort Lauderdale, Florida December 21, 2006 I 1 1 I II I I I I I I I I I I I I I I I I I I CITY OF WESTON, FLORIDA INTERNAL CONTROL COMMENTS AND RECOMMENDATIONS September 30,2006 CURRENT YEAR INTERNAL CONTROL COMMENTS AND RECOMMENDATIONS: Building Department - Countv and State Fees · Building Code Administrators and Inspectors Fund: Pursuant to Florida Statute 468.631 the City must assess this fee at the rate of one-half cent per square foot of under-roof floor space permitted, including new construction, renovations and alterations; and remit to the Florida Department of Business and Professional Regulation (DBPR) on a quarterly basis, for the preceding quarter. During our audit, we noted that this fee was not included in the City's Schedule of Fees for fiscal year ending September 30,2006. In addition, it appears that the surcharge was not being consistently assessed as mandated by the State of Florida and monies assessed had not been remitted to the DBPR. · Florida Homeowners' Construction Recovery Fund: Pursuant to Florida Statute 489.140 this recovery fund is funded out of the receipts deposited in the Building Code Administrators and Inspectors Fund, as discussed above. During our audit, we noted that the City had been mistakenly assessing this surcharge. In addition, funds had not been refunded to the clients and/or remitted to the DBPR. · Radon Fee: Pursuant to Florida Statute 553.721 the City must assess this fee at the rate of one-half cent per square foot of under-roof floor space permitted. The surcharge for additions, alterations, or renovations to existing buildings shall be computed on the basis of the square footage being added, altered, or renovated. The fees should be remitted to the Florida Department of Community Affairs (DCA) on a quarterly basis, for the preceding quarter. During our audit, we noted that fees assessed had not been remitted to the DCA. Based on our audit findings, we recommend that the City revise its Schedule of Fees to include all applicable County and State fees. In addition, the City should consult with their legal advisor to determine clear guidelines as to when these surcharges will be assessed. Finally, the City should immediately reimburse and/or remit all assessed fees to the appropriate parties. Management Response: With the adoption of Resolution No. 2006-139, the City has revised its schedule of fees for fiscal year 2006-2007 to include the county and state fees noted above. During fiscal year 2006-2007 the City will remit to the appropriate parties all county and state fees previously collected but not remitted. In addition, the City has established guidelines for assessing these fees and has implemented procedures to ensure future compliance with collecting and remitting fees as required by Florida statute. Detai led cash receipt reports - credit cards During our audit, we noted that credit card receipts are entered into the cash receipts journal in monthly totals only, without a full reconciliation against the source (location/revenue category/ merchant account) of the receipts. We recommend, that the City's IT consultants develop a cash receipt report with sufficient detail as to its revenue category and merchant account which will facilitate month-end bank statement reconci I iations. Management Response: The City is aware of the need for improved cash receipt reporting and intends on developing the required reports as part of the City's anticipated conversion to a new accounting system platform. II I I ,I I I I I I I I I I I I I I I I CITY OF WESTON, FLORIDA INTERNAL CONTROL COMMENTS AND RECOMMENDATIONS September 30, 2006 CURRENT YEAR INTERNAL CONTROL COMMENTS AND RECOMMENDATIONS (continued): Site plan and other deposits held During our audit, we noted that various deposit accounts contain transactions that in certain cases date back several years. We recommend that the City's engineers periodically review the lists of deposits held and determine which projects/jobs have been completed so that appropriate action may be initiated by the accounting department to collect additional funds, refund unused monies or mark the project/job as completed in the City's database. Management Response: The City will review the status of all site plan and other deposits recorded on the City's database. In addition, the City has implemented procedures to ensure communication with the City engineers to periodically review the outstanding projects and to undertake the appropriate action as required. Accounting department staffing We recommend that the City establish procedures to cross-train employees. Cross-trained employees should be sufficiently trained to perform all accounting and recordkeeping functions to allow for improvements in the following areas: Adjust encumbrances on a monthly basis in order to provide an accurate picture of expenditures versus budget. Journal entries, accompanied by a full explanation and supporting documentation, should be initialed by the preparer and reviewer and stored in a journal entry book. Bank reconciliations should be signed and dated by both the preparer and reviewer. Every invoice accompanied by a purchase order, resolution and/or additional documentation, should be reviewed and initialed by a designated individual for properfund/expense coding before being recorded into the City's accounting system. Management Response: The City has employed an additional accountant and intends on implementing for fiscal year 2006- 2007 the recommendations noted. In addition, both City accountants will be trained in all aspects of the City's recordkeeping, accounting and financial reporting to obtain assurance that the accounting function is adequately staffed. I I I I I I I I I I I I I I I I I I I CITY OF PARKLAND, FLORIDA REPORT TO MANAGEMENT September 30, 2006 I ~ REEFE. McCULLOUGH & CO.. LLP I CEHTI FI ED PUBLIC ACC()l;l"TAl"TS CHARLES K. RUMPF. C.P.A. ISRAEL J. GOMEZ. C.P.A. JAMES R. LARAWAY. C.P.A. ROSS S. G<JlTHOFFER, C.P.A. HILLARY B. DAIGLE, C.P.A. 6550 NORTH FEDERAL HIGHWAY SUITE 410 FORT LAUDERDALE, FLORIDA 33308 (954) 771-0896 FAX: (954) 938-9353 E-MAIL: kmc@kmccpa.com I JOH:-I R. KEEFE, C.P.A. JOHN E. McCULLOUGH. C.P.A. 'RETIRED) THOMAS T. CARPENTER. C.PA PAUL B. SNEIDER. C.P.A. (RETIRED) STEVEN H. WOODS, C.P.A. DAVID T. WILLIAMS, C.P.A. JOSEPH D. LEO, C.P.A. WILLIAM G. BENSON. C.P.A. BRIAN D. PINNELL C.P.A. (RETIRED) KENNETH G. SMITII, C.P.A. LOUIS R. PROIETTO, C.P.A. CYNTHIA L. CALVERT, C.P.A. I I I I I To the Honorable Mayor, City Commission and City Manager City of Parkland, Florida Parkland, Florida I In planning and performing our audit of the financial statements of City of Parkland, Florida (the City), for the year ended September 30,2006, we considered the City's internal controls to determine our auditing procedures for the purpose of expressing an opinion on the financial statements and not to provide assurance on the internal controls. I I However, during our audit we became aware of certain matters that represent opportunities for you to strengthen your internal controls and operating efficiencies. The list that accompanies this letter summarizes our comments and recommendations, This letter does not affect our separate report dated February 7, 2007 on the financial statements of City of Parkland, Florida. I None of the enclosed comments are intended to reflect on the honesty, integrity or competence of the personnel of the City, but are mentioned only to aid you in improving existing procedures and internal controls. I After you have had an opportunity to consider our comments and recommendations, we would be happy to discuss them with you at your convenience. I I KEEFE, McCULLOUGH & CO., LLP I I Fort Lauderdale, Florida February 7, 2007 I I I I I I I I I I I I I I I I I I I I I CITY OF PARKLAND, FLORIDA INTERNAL CONTROL COMMENTS AND RECOMMENDA nONS September 30, 2006 PRIOR YEAR INTERNAL CONTROL COMMENTS AND RECOMMENDATIONS: Implemented or No Longer Applicable Not Implemented Adopt formal EDP Disaster Recovery Plan x Establish purchase order/integrated accounts payable system x Establish a purchase order/integrated accounts payable system: In the past and for the current year end, the City has used a spreadsheet program to manually report and track their accounts payable, As the City has grown over the last several years, we believe that the additional volume and significance of day to day transactions would be more efficient if the City were to utilize a fully functioning purchase order and accounts payable system that is integrated with the general ledger and cash disbursement procedures. The purpose of a purchase order system is to control spending of City resources and to help ensure that the City pays only for items that are actually received. The system should provide for approval of purchases, including establishment of reasonable limitations on approval authority of specific individuals. A purchase order would be issued to a vendor for a specified item at a certain price to be delivered at or by a designated time. Prices and other terms would be included on purchase orders for use injob cost control (if applicable) and in the payment process. Purchase orders should flow into the general ledger to aid the City in monitoring amounts ordered and paid in comparison to the budget line items. Purchase orders should be matched to vendor invoices to assure that only agreed upon prices are paid. Managements' response: With respect to the Accounts Payable and Purchase Order systems of the Financial Software: The City will be requesting proposals for new and more powerful financial software with a plan to implement the conversion before the end of the FY 2006-2007. This will resolve the issues posed in the management suggestions. CURRENT YEAR INTERNAL CONTROL COMMENTS AND RECOMMENDATIONS: NONE I I I : II I II I I I I I I I I I I I I I TOWN OF PEMBROKE PARK, FLORIDA REPORT TO MANAGEMENT September 30, 2006 I ~ KEEFE, McCULLOUGH &. CO.. LLP II ('EHTIFIED PUBLIC ACCOU~TA~TS CIIARLES K. RUMPF. C.P.A. ISRAEL J. GOMEZ. C.P.A. JAMES R. LARAWAY, C.P.A. ROSS S. GOTTIIOFFER, C.P.A. HILLARY B. DAIGLE, C.P.A. 6550 NORTH FEDERAL HIGHWAY SUITE410 FORT LAUDERDALE, FLORIDA 33308 (954) 771-0896 FAX: (954) 938-9353 E-MAIL: kmc@kmccpa.com I JOliN R. KEEFE. C.P.A. JOHN E. 1vkCULLOUGH. C.P.A. (RETIRED) THOMAS T. CARPENTER, C.P.A. PAUL B. SNEIDER. C.P.A. (RETIRED) STEVEN H. WOODS, C.P.A. DAVIIJ T. WILLIAMS. C.P.A. JOSEPII D. LEO. C.P.A. WILLIAM G. BENSON. C.P.A. BRIAN D. PINNELL. C.P.A. (RETIRED) KENNETH G. SMITH. C.P.A. LOUIS R. PROIETTO, C.PA CYNTHIA L. CALVERT, C.P.A. I I I I I To the Honorable Mayor, Town Commission and Town Manager Town of Pembroke Park, Florida Pembroke Park, Florida I In planning and performing our audit of the financial statements of Town of Pembroke Park, Florida (the Town), for the year ended September 30, 2006, we considered the Town's internal controls to determine our auditing procedures for the purpose of expressing an opinion on the financial statements and not to provide assurance on the internal controls. I I However, during our audit we became aware of certain matters, which do not have a material effect on the financial statements, that represent opportunities for you to strengthen your internal controls and operating efficiencies. The list that accompanies this letter summarizes our comments and recommendations. This letter does not affect our separate report dated December 21, 2006 on the financial statements of Town of Pembroke Park, Florida. I N one of the enclosed comments are intended to reflect on the honesty, integrity or competence of the personnel of the Town, but are mentioned only to aid you in improving existing procedures and internal controls. I I After you have had an opportunity to consider our comments and recommendations, we would be happy to discuss them with you at your convenience. I KEEFE, McCULLOUGH & CO., LLP I I Fort Lauderdale, Florida December 21, 2006 I I I I I I I I I I I I I I I I I I I I I TOWN OF PEMBROKE PARK, FLORIDA INTERNAL CONTROL COMMENTS AND RECOMMENDATIONS September 30, 2006 PRIOR YEAR INTERNAL CONTROL COMMENTS AND RECOMMENDATIONS STILL APPLICABLE IMPLEMENTED ORNO LONGER RELEVANT Employee files are not being properly maintained x Daily bank deposit is prepared by someone with general ledger access. x Emplovee Files: During our review of employee personnel files, we noticed instances in which files were missing certain required documentation or were otherwise incomplete, Employee files should contain properly completed 1-9 and W-4 forms. Additionally, personnel action reports, the form on which salary increases are listed, should be signed off as being approved. Including these items will ensure , that employee personnel files are properly maintained. Management's Response: The Human Resources Department will stress that employee files include the required documents and ensure that they are properly completed and up to date. CURRENT YEAR INTERNAL CONTROL COMMENTS AND RECOMMENDATIONS: Bank Reconciliations: During the year, the operating bank account was reconciled by the accounts payable clerk, who also processes vendor invoices and has check writing responsibilities. Inasmuch as this is difficult because of the small number of office employees, we recommend that test reconciliations be made from time to time by another office staff member. In addition, the finance director should review, approve, and sign the bank reconciliation each month. Management's Response: month. The finance director will test, review, approve, and sign the bank reconciliations every