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HomeMy WebLinkAboutReso 1987-13035 RESOLUTION NO. 13035 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND THE ACCOUNTING FIRM OF TOOCHE ROSS FOR AUDITING SERVICES FOR FISCAL YEARS 1986-87, 1987-88 AND 1988-89 AND AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT The City Council of the City of Chula Vista does hereby resolve as follows: NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista that that certain agreement between THE CITY OF CHULA VISTA, a municipal corporation, and the accounting firm of Touche Ross for auditing services for three fiscal years 1986-87, 1987-88, and 1988-89 dated the 19th day of May , 1987 , a copy of which is attached hereto and incorporated herein, the same as though fully set forth herein be, and the same is hereby approved. BE IT FURTHER RESOLVED that the Mayor of the City of Chula Vista be, and he is hereby authorized and directed to execute said agreement for and on behalf of the City of Chula Vista. Presented by Approved as to form by L an Christopher, Director of Finance 0374a ADOPTED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF CMULA VISTA, CALIFORNIA, this 19th day of May 19 87 , by the following vote, to-wit: AYES: Councilmembers Malcolm, ~,~cCandl~_ss, Cox, Moore, Nader NAYES: Councilmembers None ABSTAIN: Councilmembers ABSENT: Counci 1 members None ~Vista ATTEST ~" _ City Clerk ::~:!. S ,'E OF CALIFORNIA ) COUNTY OF SAN DIEGO ) ss. CITY OF CHULA VISTA ) l, JENNIE M. FULASZ, CMC, CITY CLERK of the City of Chula Vista, California, DO HEREBY CERTIFY that the above and foregoing is o full, true and correct copy of RESOLUTION N0. 15035 ,and that the same has not been amended or repealed. DATED  City Clerk CfW OF CHULA VISTA CC-660 AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND THE ACCOUNTING FIRM OF TOUCHE ROSS TO PROVIDE AUDITING SERVICES THIS AGREEMENT, made and entered into this ~h day of May , 1987, by and between THE CITY OF CHULA VISTA, a municipal corporation, hereinafter called "City" and TOUCHE ROSS, hereinafter cal 1 ed "Audi tot"; WITNESSETH: WHEREAS, Section 1017 of the City Charter of the City of Chula Vista requires an annual independent audit of all funds, financial records, and the inventories of the City; and WHEREAS, on April 6, 1987, the City invited auditing firms to submit proposals for auditing the City's financial records for the next three-year period; and WHEREAS, City staff has recommended that the auditing firm of TOUCHE ROSS be contracted with to provide auditing services to the City. NOW, THEREFORE, IT IS MUTUALLY AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS: A. DEFINITIONS: "City" shall mean the City of Chula Vista; "Auditor" shall mean the accounting firm of Touche Ross. B. AFFIRMATIVE ACTION: Auditor shall promote equality of opportunity and prohibit discrimination in employment practices as mandated by Federal and State laws. C. GENERAL REQUIREMENTS: 1. The audit examination should not include a detailed audit of all of the transactions recorded in the accounts of the City, unless otherwise herein specified, but will be based upon tests of accounting records and other supporting evidence for selected periods during the fiscal year under review sufficient to enable the Auditor to express an informed written opinion on: a. The financial position of the various funds of the City. b. The propriety of accounting principles followed. c. Compliance with applicable laws. d. The financial accountability of officers and employees. 2o The contracting independent Auditor shall review the financial records and all the various funds of the City and prepare all the schedules and financial statements in conformance with public financial reporting including generally accepted accounting principles promulgated by the National Council on Governmental Accounting. 3. The contracting independent Auditor shall include in the audit report: a. An outline of the general scope and extent of the audit. b. An opinion on the financial statements of the City as to their conformity to generally accepted accounting principles and whether the statements present fairly the financial position of the City of Chula Vista. c. Any other opinions or comments the firm wishes to make. d. A report of any defects in the City's accounting system that make it difficult to perform an adequate independent audit. e. Recommendations for improvements in the accounting system or in internal control. 4. The standards and procedures for the audit engagement shall be in accordance with the latest statements published by the National Committee on Governmental Accounting, to the extent that such procedures are applicable under the charter, ordinances and other statutory provisions governing the City of Chula Vista. 5. Forty copies of each final audit report will be delivered to the Director of Finance no later than November 30 of each year. D. SPECIFIC REQUIREMENTS 1. Budget: In accordance with provisions of the Charter of the City of Chula Vista, it is the duty of the City Manager to prepare and submit to the Council the annual budget and such reports as may be required by that body. The independent Auditor shall examine the final budget document as approved by the City Council and compare the estimated revenues and appropriations as shown in the budget document with the entries recorded on the revenue ledger and the appropriation ledger maintained by the Finance Director's office. 2. Funds: The Auditor shall examine the City Charter, ordinances or resolutions, and minutes of the City Council pertaining to all funds of the City to determine the purpose of each fund and the proper disposition of all funds revenues, expenditures, and year-end balances. -2- 3. Verification of Cash and Securities: a) The Auditor shall count all cash and checks in the Finance Department as of June 30. The Auditor shall subsequently be satisfied that all items counted and verified are deposited in the City's depository bank. Investment securities owned by the City and held in safekeeping by the City's various banks and savings and loan associations shall be verified as to their existence as of June 30. Written confirmation shall be obtained from all City depositories of balance on hand at June 30. b. Surprise Cash Counts: The Auditor shall make, during the year, at least two surprise cash counts of the funds in the Finance Department in cooperation with staff members. c. Collateral Pledged for Funds on Deposit: The Auditor shall examine the records of pledged collateral and make such tests of depository bank pooled collateral operations as may be necessary to express an opinion as to the legal sufficiency of the collateral to safeguard the City of Chula, Vista's bank deposits. d. Accountin~ Records: The Auditor shall examine the City's internal accounting controls to determine that accounting procedures are adequate to safeguard assets and provide reasonable assurance of proper recording of financial transactions. 4. Assets: a. Cash and Fund Balances: The Auditor shall examine the various fund transactions and balances in each fund and prepare the appropriate financial statements for the audit report. 5. Inventory - Stores: The Auditor shall make, during the year, sufficient test counts of the central 'stores inventory and central garage inventory to enable them to determine the accuracy of the inventory records. The auditor shall review the accounting procedures employed for the recording of stores received and issued, test check stock inventory transactions and test the pricing extensions and footings of the stores inventory at June 30. -3- 6. Investments: The City's investments are in the custody of the Finance Director. The Auditor shall compare the total of investments found in the custody of the Finance Director with the sum of the funds in the general ledger maintained by the Finance Director. 7. Fixed Assets: The Auditor shall examine the procedure for recording the acquisition of and the disposal of property owned by the City. The auditor shall compare the annual inventories of property with the controls maintained by the Finance Department. The Auditor shall review the transactions involving fixed assets to the extent necessary to assure that accountability for fixed assets is maintained. 8. Liabilities a. Accounts Payable: The Auditor shall make a sufficient examination of accounts payable to enable them to determine that, in general, they bear evidence of verification and approval with supporting documents such as purchase orders, vendors invoices, receiving reports, transportation bills, contracts and other documents where necessary. The Auditor shall also be satisfied that the claims were charged against the proper departmental appropriations and that funds were available at the date the purchase was made. b. Bonded Debt: The Auditor shall review the amount of bonded debt of the City and examine bonds and interest coupons paid during the year whether directly by the City or by various fiscal agents, the outstanding debt determined by the Auditor should be reconciled to the accounting records of the City by fund and amount outstanding on June 30. c. Reserves for Uncompleted Purchase Orders and Encumbrances: The Auditor shall examine documents supporting reserves for uncompleted purchase orders and encumbrances to determine that such reserves are adequate and properly recorded. d. Other Liabilities and Deferred Credits: The Auditor shall be satisfied as to the fairness of the accounts representing other liabilities and deferred credits. -4- 9. Fund Balances: The Auditor shall examine revenues and expenditures by funds and analyze the changes in fund balances for the financial statement of each fund in the audit report. lO. Single Audit Act: The independent Auditor shall perform a financial and compliance audit under the Single Audit Act of 1984. The audit shall be made in accordance with the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, issued by the U. S. General Accounting Office, and the provis~on~ of the U. S. Office of Management and Budget (OMB) Circular A-128, Audits of State and Local Governments. Chula Vista's cognizant agency is U. S. Housing and Urban Development (HUD). The City currently receives federal assistance through Community Development Block Grant, Revenue Sharing, and Area Agency on Aging. E. CITY OF CHULA VISTA REDEVELOPMENT AGENCY: 1. All general and specific requirements as delineated for the Independent Audit of the City of Chula Vista will also apply as appropriate to the Independent Audit of the City of Chula Vista Redevelopmerit Agency. 2. The Auditor shall perform such examinations of the Agency's financial records sufficient to enable them to render an opinion of compliance with the "Guidelines for Compliance Audits of California Redevelopment Agencies." 3. The Auditor shall verify compliance with all pertinent sections of the California Redevelopmerit Law. F. TERM: The audit engagement will include Fiscal Years 1986-87, 1987-88, and 1988-89 beginning July 1 and ending June 30 of each year. G. PROFESSIONAL FEES: 1. Audit services for the City of Chula Vista wil~ be performed by qualified personnel having grades and hourly rates as follows: Partner $159 Manager 67 Senior 43 Staff 34 -5- 2. The fee for the audit of fiscal year 1986-87 will not exceed the following ; amounts. City of Chula Vista Audit $14,830 Redevelopment Agency of Chula Vista 2,200 Housing Agency Report (compilation) 1,070 Single Audit Report 2,800 The above fees for the two succeeding fiscal years of 1987-88 and 1988-89 will each be adjusted based on the annual change in the Consumer Price Index All Urban {December to December) and may extend to, but not exceed, a maximum of 7% in any one year. Therefore, the maximum fee for 1987-88 will be $22,363 and for 1988-89 will be $23,928. 3. Progress payments in 25% increments {of the maximum annual fees) will be made by the City based on billings from the Auditor. The final 25% will be paid on receipt of the final audit reports. 4. Fees for any requested special projects and services will be billed separately from the above audit fees. The cost of these services depends on the scope of the engagement and will be based on the time incurred calculated at customary rates for the people who perform the services. Before beginning such a project, the City will be provided with a detailed plan of action, the expected time requirement and the estimated cost. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed the day and year first hereinabove set forth. CITY OF CHULA VISTA TOUCHE ROSS Mayor ~ pA~.T~LL Approved as to form by T~ut ~ ~- L WPC 0420G -6-