HomeMy WebLinkAbout87-26 - Auditing Services AgreementRESOLUTION NO. 87 -26
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH AUTHORIZING THE MAYOR AND
CITY CLERK TO EXECUTE AN AGREEMENT BETWEEN THE
CITY AND KING, HENSLEE & JACKSON, INC.
• CONCERNING AUDITING SERVICES FOR FISCAL YEARS
1986 -87, 1987 -88, AND 1988 -89
C
WHEREAS, there has been presented to the City Council of
the City of Newport Beach a certain agreement between the City
and King, Henslee & Jackson, Inc., Certified Public Accountants,
in connection with auditing services for the City for fiscal
years 1986 -87, 1987 -88, 1988 -89; and
WHEREAS, the City Council has reviewed the terms and
conditions of said Agreement and found them to be fair and
equitable.
NOW, THEREFORE, BE IT RESOLVED by the City Council of
the City of Newport Beach that the Agreement described above, a
copy of which is attached hereto as Exhibit "A," be and hereby is
approved; and
BE IT FURTHER RESOLVED, that the Mayor and City Clerk be
and hereby are authorized and directed to execute same on behalf
of the City of Newport Beach.
ADOPTED this 9th day of February. 1987.
•
AGREEMENT FOR INDEPENDENT AUDIT
THIS AGREEMENT is made and entered into this day
of , 1987, by and between THE CITY OF NEWPORT BEACH, a
Municipal Corporation and Charter City, hereinafter referred to
• as "City" and KING, HENSLEE & JACKSON, INC., Certified Public
Accountants, hereinafter "Accountant" with respect to the
following facts, the materiality and existence of which are
agreed to between the parties:
1. Accountant hereby agrees, at such time or times as
it .shall determine, to.make an audit and examination of the
books, records, inventories and reports of all officers and
employees of the City who receive, handle or disburse public
funds, for fiscal year 1986 -87, commencing July 1, 1986; for
fiscal year 1987 -88 commencing July 1, 1987; and for fiscal year
1988 -89, commencing July 1, 1988, pursuant to Section 1117 of the
City Charter, in order to express an opinion on City's financial
statements. The audit shall embrace all funds of the City,
including the 1911 Act Improvement Bond Funds. The audit shall
be conducted in accordance with generally accepted auditing
standards and shall include, among other things, such tests of
City's accounting records and other auditing procedures which
will enable Accountant to express an opinion on City's financial
statements. Should circumstances be encountered which, in the
-1-
0 0
judgment of Accountant, prevent the expression of an unqualified
opinion on City's financial statements taken as a whole, such
opinion shall be qualified or omitted; however, Accountant's
report shall contain a statement of the reasons for the
• qualification or omission. To the extent applicable, the audit
shall include the audit procedures recommended in the booklet
entitled "Checklist for the Audit of Financial Records of a
California City," published by The League of California Cities
and The California Society of Certified Public Accountants.
2. Accountant agrees to render a report, on the
results of its audit of City's financial statements for the
fiscal years to which this contract applies, together with
condensed financial statements. Accountant shall also present a
short form report which shall accompany the completed financial
statements submitted by the Finance Director. Accountant's
reports shall include a qualified or unqualified opinion, or
disclaimer of opinion, on the status of City's financial
statements, according to the circumstances encountered and
described in paragraph 1 hereof. A total of 12 copies of said
report shall be submitted as follows: Six copies to the City
Council, one copy to the City Manager, one copy to the Finance
Director, one copy to the City Attorney, and 3 additional copies
which shall be placed on file in the Office of the City Clerk for
-2-
public inspection. In addition to the final report, Accountant
shall advise the City Council, not later than May 13th of each
respective fiscal year, as to the conditions found to exist.
This interim report shall consist of a short discussion on the
performance of the accounting procedures, and any other matters,
• Accountant believes should be called to the attention of the City
Council. Accountant agrees to render a Management Letter at the
close of each respective fiscal year, setting forth the problems
and recommended solutions to those problems as they relate to the
internal controls of City's accounting system, as well as any
other matters which, in Accountant's opinion, should be brought
to the attention of City.
3. Compensation to be paid Accountant for auditing
services for fiscal years 1986 -87, 1987 -88, and 1988 -89 shall be
in the amount of Fourteen Thousand Dollars ($14,000.00), payable
one half on May 1st, and the balance upon delivery of
Accountant's report, following the close of the fiscal year.
4. The audit and examination referred to herein and
the fees agreed to contemplate that conditions satisfactory to
normal progress and completion of said audit and examination will
be encountered. In the event that actual conditions encountered
are not compatible with usual and expected progress, and, in
-3-
order to discharge the contractual obligations herein, in the
opinion of Accountant, it is necessary to perform additional
work, or to expend additional amounts of time not contemplated by
this contract, due from but not limited to: (a) Incompleteness
• of records; (b) Abnormal errors; (c) Misappropriation of funds;
(d) Lack of cooperation from City employees; or (e) Any other
justifiable reasons then and in that event Accountant, after
reasonable demonstration of the existence of such conditions,
shall be entitled to reapply to the City Council for supplemental
compensation for such additional services payable at the
prevailing rates per hour for respective grades of staff members
and partners used in the performance of such work or services.
5. The audit and examination specified in Paragraph 1
hereof shall be based on tests and samples of the accounting
records and transactions of City, sufficient to satisfy
Accountant of the fairness of the presentation of the financial
condition and operating results of City and is not intended to
comprise a detailed examination of all City transactions. It is
further understood that owing to the test of character of the
examination, reliance must be placed on the adequacy of the
system of internal "checks and controls" as the principal
safeguard against defalcations and other irregularities of the
same general nature. Further, Accountant will attempt to detect
-4-
0
any defalcations, or similar irregularities, however, Accountant
does not assume any responsibility therefor.
6. It is contemplated that Accountant may be requested
• to perform additional services over the usual audit services
referred to herein, such as advising City of changes in
accounting methods used or in personnel required to assist: in
accomplishing any changes of the method of recording or reporting
used; the investigation of lease compliance by lessees within
terms of City leases; performing special examinations of audits
at the request of the City Council at times not otherwise
scheduled for audits, or of officers, employees or departments
who do not receive, handle or disburse public funds and other
similar services. In such circumstances, the City Council, City
Manager, or his designated representative may authorize
Accountant to perform such work, or render services, in addition
to those which are usual and customary in making an audit and
examination of the accounts and records of City, and Accountant
shall receive payment at the prevailing rates, per hour, for
respective grades of staff members and partners used in
performing such work or services.
7. Termination: City reserves the right to terminate
this Agreement in the event Accountant fails to perform any of
-5-
the duties required by this Agreement. City shall give
Accountant written notice of its intent to terminate at least
thirty (30) days prior to the effective date of termination.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
ATTEST:
Giry l:1erK
n
APPROVED AS TO FORM:
CiIty Attorney
CITY OF NEWPORT BEACH
a Municipal Corporation
By:
Mayor
KING, HENSLEE &
JACKSON, INC.
Certified Public Accountants
By:
And:
-6-