HomeMy WebLinkAboutC-2254 - Auditing Services for Fiscal Years 89-90, 90-21 & 91-92CITY OF NEWPORT BEACH
OFFICE OF THE CITY CLERK
P.O. BOX 1768, NEWPORT BEACH, CA 92658 -8915
(714) 644 -3005
/ - z 2 - jC
FROM: CITY CLERK
DATE: January 22, 1990
SUBJECT: Contract No. C -2254
Description of Contract Agreement for Independent Audit for the
City for fiscal years 1989 -90, 1990 -91, and 1991 -92.
Effective date of Contract January 22, 1990
Authorized by Minute Action, approved on January 8, 1990
Contract with Moreland and Associates, Inc.
Address
Amount of Contract (See Agreement)
"1� 4f 4fe
Wanda E. Raggio
City Clerk
WER:pm
Attachment
3300 Newport Boulevard, Newport Beach
AGREEMENT FOR INDEPENDENT AUDIT
This Agreement is made and entered into this 92-A Cday of
, 1990, by and between the CITY OF NEWPORT
ACH, a unicipal corporation, hereinafter referred to as
( "CITY ") and MORELAND AND ASSOCIATES, INCORPORATED, Certified
Public Accountants, hereinafter referred to as ( "AUDITOR"
NOW, THEREFORE, in consideration of the promises and the
agreements, covenants and conditions hereinafter contained and to
be kept and performed by the respective parties hereto, it is
agreed as follows:
1. AUDITOR hereby agrees, at such time or times as
he 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 the
Fiscal Year 1989 -90, beginning July 1, 1989, and ending June 30,
1990, for the Fiscal Year 1990 -91, beginning July 1, 1990, and
ending June 30, 1991, and for the Fiscal Year 1991 -92, beginning
July 1, 1991, and ending June 30, 1992, in accordance with Section
1117 of the City Charter, in order to express an opinion upon the
financial statements of the CITY. The audit shall embrace all
funds of the CITY, including the 1911 Act Improvement Bond Funds.
If circumstances are encountered which, in the judgment of
AUDITOR, prevent the expression of an unqualified opinion on the
financial statements taken as a whole, such opinion shall be
qualified or omitted, but AUDITOR's report shall contain a
statement of the reasons for the qualification or omission. To
the extent applicable, the audit will be performed in accordance
with generally accepted auditing standards as adopted by the
American Institute of Certified Public Accountants (AICPA) , and
shall conform with the guidelines set forth in the AICPA's
Industry Audit Guide, Audits of State and Local Governmental
1
9
E
Units, and shall include such tests of the accounting records and
such other auditing procedures applicable in the circumstances as
to enable AUDITOR to express an opinion on the financial
statements of the CITY. Also, each audit will comply with the
standards for financial and compliance audits contained in
Governmental Auditing Standards, issued by the U.S. General
Accounting Office, in order to meet the requirements of the Single
Audit Act of 1984.
2. AUDITOR agrees to render a report on his audit
of the CITY for the Fiscal Years to which this contract applies,
accompanied by condensed financial statements, and also to present
a short form report to accompany the complete financial statements
submitted by the Finance Director. These reports will include an
unqualified or qualified opinion or a disclaimer of opinion on the
financial statements, according to the circumstances encountered,
as described in Paragraph 1. The reports shall be submitted to
the City Council with a copy for each member and one for the City
Manager, Finance Director and City Attorney, and three additional
copies to be placed on file in the Office of the City Clerk for
public inspection. In addition to the final report, AUDITOR shall
advise the Council not later than May 13, of the Fiscal Year, as
to the conditions found to exist. This interim report shall
consist of a short discussion of the performance of the accounting
procedures and any other matters AUDITOR believes should be called
to the attention of the Council. AUDITOR agrees to render a
Management Letter at the close of the Fiscal Year, setting forth
the problems and recommended solutions to those problems as they
relate to the internal controls of the CITY's accounting system,
as well as any other matters which in the AUDITOR's opinion should
be brought to the attention of the CITY.
`A
follows:
•
3. Compensation shall be paid to AUDITOR as
A. For the audit engagement for the Fiscal
Year 1989 -90, in the amount of Twenty Thousand Dollars
($20,000.00), payable one half on May 1, 1990 and the balance upon
delivery of AUDITOR's report following the close of the Fiscal
Year 1989 -90.
B. For the audit engagement for the Fiscal
Year 1990 -91, in the amount of Twenty -One Thousand Three Hundred
Dollars ($21,300.00), payable one half on May 1, 1991, and the
balance upon delivery of AUDITOR's report following the close of
the Fiscal Year 1990 -91.
C. For the audit engagement for the Fiscal
Year 1991 -92, in the amount of Twenty -Two Thousand Six Hundred
Dollars ($22,600.00), payable one half on May 1, 1992, and the
balance upon delivery of AUDITOR's report following the close of
the Fiscal Year 1991 -92.
D. CITY'S obligation to pay AUDITOR for future
fiscal years is contingent on the availability of funds and an
appropriation of funds by the City Council.
4. The audit and examination specified herein and
the fees stipulated contemplate that conditions satisfactory to
the normal progress and completion of said audit and examination
will be encountered. In the event that actual conditions met are
not compatible with the usual and expected progress of the work,
and if in order to discharge its contractual obligation hereunder,
in the opinion of AUDITOR it would be necessary to do additional
work or to expend unreasonable amounts of time not contemplated by
this contract because of the (a) incompleteness of records, (b)
abnormal errors, (c) misappropriation of funds, (d) lack of
3
cooperation from CITY employees, or (e) any other justifiable
reasons, AUDITOR, upon reasonable demonstration of the existence
of such conditions, shall be entitled to apply to the City Council
for supplemental compensation at the rates specified in Paragraph
6 hereof.
5. The audit and examination shall be based upon
tests and samples of the accounting records and transactions
sufficient to satisfy AUDITOR of the fairness of presentation of
the financial condition and operating results of the CITY, and is
not to comprise a detailed examination of all transactions. It is
understood that, owing to the test of character of the
examination, reliance must be placed on the adequacy of the
systems of internal check and control as to the principal
safeguard against defalcation and other irregularities of the same
general nature, and, although AUDITOR will attempt to detect any
defalcations or similar irregularities, AUDITOR does not assume
the responsibility for doing so.
6. It is contemplated that AUDITOR may be requested
to perform services additional to the usual audit work, such as
advising upon changes in the accounting methods or the personnel,
assisting in accomplishing changes in the recording or reporting,
investigating the compliance of lessees with the terms of CITY
leases, making special examination or audits at the request of the
City Council at times he would not otherwise be conducting the
audit or of offices, employees or departments who do not receive,
handle or disburse public funds and other similar services. In
such circumstances, the City Council or City Manager may authorize
AUDITOR to perform such work or render serves in addition to those
which are usual and customary in making an audit and examination
of the accounts and records of the CITY, and AUDITOR shall receive
payment at the following rates per hour for respective grades of
staff members and partners used in performing such work or
services:
4
Plus out -of- pocket expenses as cost.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
APPROVED AS TO FORM:
1 1, � 4
Q'` City Attorney
Ili
v
AUDIT.AGT
1/9/90
CITY OF NEWPORT BEACH
A Municipal Corporation
By: A idiom
Mayor
MORELAND AND ASSOCIATES,
INCORPORATED
Certified Public Accountants
By: !� ., ;Ve5x
By:
�1
1989 -90
1990 -91
1991 -92
Partner /Officer
$105
$111
$118
Manager
85
90
95
Senior Accountant
53
56
59
Assistant Accountant
48
51
54
Clerical
21
22
23
Plus out -of- pocket expenses as cost.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
APPROVED AS TO FORM:
1 1, � 4
Q'` City Attorney
Ili
v
AUDIT.AGT
1/9/90
CITY OF NEWPORT BEACH
A Municipal Corporation
By: A idiom
Mayor
MORELAND AND ASSOCIATES,
INCORPORATED
Certified Public Accountants
By: !� ., ;Ve5x
By:
�1
0 0
Y COUNCIL
,,"r m_ „n�
._.V..
JAN 8 1990
APPROVED
TO: City Council
CITY OF NEWPORT BEACH
FINANCE DEPARTMENT
FROM: George Pappas, Finance Director
SUBJECT: ANNUAL AUDIT CONTRACT
Council
Agenda No
F -3(d)
January 8, 1989
Council Police A -14 reads, "Commencing in 1980, and every three years thereafter,
the City shall obtain written proposals from interested auditors to conduct
auditing services, and from these proposals the Council shall select an auditor
to perform the work. However, upon satisfactory completion of the work performed
during each of the first three years the City Council may extend the auditing
services agreement an additional three years without obtaining written
proposals.”
The firm of Moreland & Associates, Inc. has performed the annual audit for the
City of Newport Beach more than satisfactorily. Therefore, the staff recommends,
in accordance with Council Policy, the Council authorize the Mayor and City Clerk
to enter into an Agreement for Auditing Services with Moreland & Associates, Inc.
for the next three years.
The fee for 1988 -89 was $19,000 and the firm proposes maximum annual fees of
$20,000, $21,300, and $22,600 for fiscal years 1989 -90, 1990 -91, and 1991 -92
respectively.
GP:dp
CITY OF NEWPORT BEACH
P.U. BOX 1768, NEWPORT BEACH. CA 92663 -3884
OFFICE OF THE CITY CLERK
(714) 640 -2251
TO: FINANCE DIRECTOR
FROM: CITY CLERK
DATE: November 28, 1983
SUBJECT: Contract No. C -2254
Description of Contract Auditing Services for the City for
fiscal years 1983 -84 & 1984 -85 & 1985 -86
Effective date of Contract November.23, 1983
Authorized by Minute Action, approved on November 14, 1983
Contract with Simonis Moreland Accountants, Inc.
Address .610 Newport Center Drive
Suite 1325
Newport Beach, CA 92660
Amount of Contract (See Agreement)
Wanda E. Andersen
City Clerk
WEA :lr
attach.
3300 Newport Boulevard, Newport Beach
.!
TO
FROM
SUBJECT
• • �`�� -aasy
(: u
CITY OF NEWPORT BEACH
FINANCE DEPARTMENT Couneil Agenda No. F -2 -(b)
.November 9, 1983
BY THE CITY COUNCIL
City Council CITY OF NEWPORT BEACH
George Pappas, Finance Director NOV 14 3
ANNUAL AUDIT CONTRACT
��� Q
Council Policy A -14 reads, "Commencing in 1980, and every three
years thereafter, the City shall obtain written proposals from interested
auditors to conduct auditing services, and from these proposals the Council
shall select an auditor to perform the work. However, upon satisfactory
completion of the work performed during each of the first three years the
City Council may extend the auditing services agreement an additional three
years without obtaining written proposals."
The firm of - Simonis and Moreland have performed, more than satis-
factorily, the annual audit for the City of Newport Beach the past three
years. Therefore, the staff recommends, in accordance with Council Policy,
the Council approve the Resolution authorizing the Mayor and City Clerk to
enter into the Agreement for Auditing Services with Simonis and Moreland
for the next three years.
GP /bib
RESOLUTION NO. 3-) I
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH AUTHORIZING THE MAYOR & CITY
CLERK TO EXECUTE AN AGREEMENT BETWEEN THE CITY
AND SIMONIS MORELAND ACCOUNTANTS, INC.
CONCERNING AUDITING SERVICES FOR FISCAL YEARS
1983 - '84, 1984 - 185, AND 1985 - '86
WHEREAS, there has been presented to the City Council
of the City of Newport Beach a certain agreement between the City
and Simonis Moreland Accountants, Inc., Certified Public
Accountants, in connection with auditing services for the City
for fiscal years 1983 - 184, 1984 - '85 and 1985 - '86; 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. n`
ADOPTED this 1444) day of K)01}p )aQ„ , 1983.
Narfi
Mayor
ATTEST:
AradkrsQl')
City Clerk
RSP /Auditor
9
AGREEMENT FOR INDEPENDENT AUDIT
THIS AGREEMENT is made and entered into this O?Z&Y
of , 1983, by and between THE CITY OF NEWPORT BEACH,
a Municipal Corporation and Charter City, hereinafter referred to
as "City" and SIMONIS MORELAND ACCOUNTANTS, 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
he 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 1983 - 184, commencing July 1, 1983 and
ending June 30, 1984; for fiscal year 1984 - 185, commencing
July 1, 1984 and ending June 30, 1985; for fiscal year 1985 -
'86, commencing July 1, 1985 and ending June 30, 1986, 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
EXHlB1
• 0
accepted auditing standards and shall include, among other
things, such tests of City's accounting records and other audit-
ing procedures which will enable Accountant to express an opinion
on City's financial statements. Should circumstances be
encountered which, in the 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 his 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
2
0 0
statements, acccording 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
public inspection. In addition to the final report, Accountant
shall advise the City Council, not later than November 15th of
each respective fiscal year, and a second time, not later than
May 13th of each respective fiscal year, as to the conditions
found to exist. These interim reports 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 year 1983 - 184, shall be in the amount of
Thirteen Thousand Dollars ($13,00.00), payable half on May 1,
9
0 0
1984, and the balance upon delivery of Accountant's report,
following the close of fiscal year 1983 - '84.
4. Compensation to be paid Accountant for auditing
services for fiscal year 1984 - 185, shall be in the amount of
Fourteen Thousand Dollars ($14,00.00), payable half on May 1,
1984, and the balance upon delivery of Accountant's report
following the close of fiscal year 1984 - '85.
5. Compensation to be paid Accountant for auditing
services for fiscal year 1985 - 186, shall be in the amount of
Fifteen Thousand Dollars ($15,00.00), payable half on May 1,
1985, and the balance upon delivery of Accountant's report
following the close of fiscal year 1985 - '86.
6. The audit and examination referred to herein and
the fees agreed on 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
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;
a
0 0
(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 re -apply 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.
7. 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
any defalcations, or similar irregularities, however, Accountant
does not assume any responsibility therefore.
8. It is contemplated that Accountant may be requested
5
9 0
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 leesees within
terms of City leases; performing special examinations or 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.
r
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written,
ATTEST:
C�
City Clerk
APPROVED AS TO FORM:
e
i y Attor ey
AGB /Auditor
7
CITY OF NEWPORT BEACH
A Municipal Corporation
By �_
ayor
SIMONIS MORELAND ACCOUNTANTS, INC.
Certified Public Accountants
•
September 29, 1983
The Honorable City Council
of the City of Newport Beach
3300 Newport Boulevard
Newport Beach, California 92663
The Honorable City Council:
c ..5 y
610 NEWPORTCENTER DRIVE. SUITE 1325 �` li l; N
NEWPORT BEACH, CALIFORNIA 92660 \ !'S t)
17147 640 -1333
BY THE CITY COUNCIL
CITY Of NEWPORT BEACH
OCT 24 1983
We have recently completed our examination of the financial statements of the
City of Newport Beach for the year ended June 30, 1983. The purpose of this
letter is to provide you with our suggestions for improvements to the systems
of internal control and accounting procedures which came to our attention during
our examination. Since our examination is based �n tests of data supporting
financial transactions, you will appreciate that substantial reliance must be
placed on the systems of internal control.
UPDATING OF POLICIES AND PROCEDURES DOCUMENTATION
The Finance Department utilizes a policies and procedures manual which was
developed over five years ago. We again recommend the manual be reviewed and
updated where there have been changes in policies and procedures subsequent
to its development.
COMPLIANCE AUDITING
The City receives a significant amount of monies as the result of franchise
agreements, rental agreements and transient occupancy taxes. Last year we
suggested City staff perform tests of compliance with these agreements or taxes,
and tests were made of compliance with several agreements. We again recommend
City staff review the records of selected hotels or motels paying transient
occupancy taxes to the City.
N
The Honorable City Council Page 2
of the City of Newport Beach
September 29, 1983
PRIOR YEAR RECOMMENDATIONS
We were pleased to note that all of the recommendations contained in our letter
to you dated September 24, 1982 have been implemented, except for our comments
on updating policies and procedures documentation which we discussed above.
We would like to express our appreciation for the courtesy and assistance
extended to us by the Finance Director, his staff and the other employees of
the City.
We would be pleased to discuss with you at your convenience the matters con-
tained in this letter or any other matters which you wou'- like to discuss.
Very truly yours,
CITY OF NEWPORT BEACH
OFFICE OF THE CITY MANAGER
TO: Mayor and City Council
FROM: City Manager
SUBJECT: CONTRACT COMPLIANCE AUDITS
C_
i YID P
�.� � L AGENDA
No., -.17-f
February 14, 1983
A"RO V ED
FEB 14 1963
my irJ *Af YVVI4C4L
C" OF NrIMMpKP MAW
The City receives a significant amount of monies as a result of lease
and rental agreements. It has been several years since the City's auditors
performed any test of compliance with these agreements by a review of
records of those making payments to the City.
There are sufficient funds budgeted to perform audits of the Balboa
Bay Club, American Legion, and Corona del Mar Beach concession. There-
fore, the staff recommends that Council approve the City's auditors,
Simonis - Moreland, proceed with the audits.
ROBERT L. WYNN
City Manager
RLW:GP:dp
September 24, 1982
The Honorable City Council
of the City of Newport Beach
3300 Newport Boulevard
Newport Beach, California 92663
The Honorable City Council:
M C -may
610 NEWPORT CENTER DRIVE. SUITE 1325
NEWPORT BEACH. CALIFORNIA 92660
(714) 640 -1333
We have recently completed our examination of the financial statements of the
City of Newport Beach for the year ended June 30, 1982. The purpose of thi
letter is to provide you with our suggestions for improvements to the systems
of internal control and accounting procedures which came to our attention during
our examination. Since our examination is based on tests of data supporting
financial transactions, you will appreciate that substantial reliance must be
placed on the systems of internal control.
COMPLIANCE AUDITING
The City receives a significant amount of monies as the result of franchise
agreements, rental agreements and transient occupancy taxes. It has been
several years since City staff performed any tests of compliance with these
agreements or taxes by a review of the records of those making payments to
the City. We recommend City staff develop policies and procedures for per-
forming compliance audits of the records of those making payments to the City
under such agreements and taxes. The policies and procedures should provide
for the development of written audit programs, the criteria for selection for
audit and the frequency of audit. We believe these compliance audits should
be performed periodically throughout the year.
UPDATING OF POLICIES AND PROCEDURES DOCUMENTATION
The Finance Department utilizes a policies and procedures manual which was
developed about five years ago. We recommend the manual be reviewed and
updated where there have been changes in policies and procedures subsequent
to its development.
§r�
1 0 0
% The Honorable City Council Page 2
of the City of Newport Beach
September 24, 1982
PERFORMANCE BONDS (DEPOSITS)
For the past two years, there has been procedures to investigate and return
performance bonds that are no longer required by the City. The City still has
a number of deposits over two years old which should be investigated and
returned if no longer required.
PRIOR YEAR RECOMMENDATIONS
We were pleased to note that all of the recommendations contained in our letter
to you dated September 25, 1981 have been implemented.
We would like to express our appreciation for the courtesy and assistance
extended to us by the Finance Director, his staff and the other employees of
the City.
We would be pleased to discuss with you at your convenience the matters con-
tained in this letter or any other matters which you would like to discuss.
Very truly yours,
0
September 24, 1982
The Honorable City Council
of the City of Newport Beach
3300 Newport Boulevard
Newport Beach, California 92663
The Honorable City Council;
C - x,25 y
610 NEWPORT CENTER DRIVE. SUITE 1325
NEWPORT BEACH. CALIFORNIA 92660
(710) 640 -1333
We have recently completed our examination of the financial statements of the
City of Newport Beach for the year ended June 30, 1982. The purpose of this
letter is to provide you with our suggestions for improvements to the systems
of internal control and accounting procedures which came to our attention during
our examination. Since our examination is based on tests of data supporting
financial transactions, you will appreciate that substantial reliance must be
placed on the systems of internal control.
COMPLIANCE AUDITING,
The City receives a significant amount of monies as the result of franchise
agreements, rental agreements and transient occupancy taxes. It has been
several years since City staff performed any tests of compliance with these
agreements or taxes by a review of the records of those making payments to
the City. We recommend City staff develop policies and procedures for per-
forming compliance audits of the records of those making payments to the City
under such agreements and taxes. The policies and procedures should provide
for the development of written audit programs, the criteria for selection for
audit and the frequency of audit. We believe these compliance audits should
be performed periodically throughout the year.
UPDATING OF POLICIES AND PROCEDURES DOCUMENTATION
The Finance Department utilizes a policies and procedures manual which was
developed about five years ago. We recommend the manual be reviewed and
updated where there have been changes in policies and procedures subsequent
to its development.
'___1
��
The Honorable City Council
of the City of Newport Beach
September 24, 1982
PERFORMANCE BONDS (DEPOSITS)
Page 2
For the past two years, there has been procedures to investigate and return
performance bonds that are no longer required by the City. The City still has
a number of deposits over two years old which should be investigated and
returned if no longer required.
PRIOR YEAR RECOMMENDATIONS
We were pleased to note that all of the recommendations contained in our letter
to you dated September 25, 1981 have been implemented.
We would like to express our appreciation for the courtesy and assistance
extended to us by the Finance Director, his staff and the other employees of
the City.
We would be pleased to discuss with you at your convenience the matters con-
tained in this letter or any other matters which you would like to discuss.
Very truly yours,
.M
CITY OF NEWPORT BEACH
OFFICE OF THE CITY CLERK
(714) 640 -2251
DATE Dec. 21 7 1981
TO: FINANCE DIRECTOR
FROM: City Clerk
SUBJECT: Contract No. C -2254
Description of Contract Agreement for Independent
Effective date of Contract March 12. 1981
Authorized by Resolution No. 9995 r adopted on
Contract with Simonis Moreland Accountants. Inc.
Address 610 Newport Center Drive
Newport Beach, CA 92660
Amount of Contract$ See Agreement
/s/ Wanda E. Andersen
WANDA E. ANDERSEN
City Clerk
WEA:lr
March 9, 1981
City Hall • 3300 Newport Boulevard, Newport Beach, California 92663
5 -81
;�- qq.
By it— cli'f COU+a :iL
CITY OF ' gPOP,T B': ACh
TO: City Council
CITY OF NEWPORT BEACH
FINANCE DEPARTMENT
FROM: George Pappas, Finance Director
SUBJECT: 1980 -81 AUDIT
M
COUNCIL AGENDA NO
March 8, 1981
The staff and the City Manager, has solicited proposals from two
accounting firms to conduct the 1980 -81 fiscal year audit for the Ctiy
Council. These firms and the suggested .fee are as follows:
Firm Audit Fee
Main Hurdman & Cranstoun $ 11,500
Simonis Moreland Accountants Inc. $ 10,000
It was noted that the present auditor, plain Hurdman & Cranstoun, has
serviced the City for five years and has performed satisfactorily. The
staff believes, however, that there is justification in periodically
changing auditing firms.
The staff recommends the firm of Simonis Moreland Accountants Inc.
for the audit services.
GP:dp
F-2(i)
AGREEMENT FOR INDEPENDENT AUDIT
This Agreement is made and entered into this 1' &L
day of 2 d-X— 1981, by and between the CITY
OF NEWPORT BE CH, a municipal corporation, hereinafter referred
to as "CITY," and SIMONIS MORELAND ACCOUNTANTS, INCORPORATED,
Certified Public Accountants, hereinafter referred to as "AUDITOR."
NOW, THEREFORE, in consideration of the promises and
the agreements, covenants and conditions hereinafter contained
and to be kept and performed by the respective parties hereto,
it is agreed as follows:
1. AUDITOR hereby agrees, at such time or times as he
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 the
Fiscal Year 1980 -81, beginning July 1, 1980, and ending June 30,
1981, for the Fiscal Year 1981 -82, beginning July 1, 1981, and
ending June 30, 1982, and for the Fiscal Year 1982 -83, beginning
July 1, 1982, and ending June 30, 1983, in accordance with Section
1117 of the City Charter, in order to express an opinion upon the
financial statements of the CITY. 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 such tests of the accounting
records and such other auditing procedures applicable in the
circumstances as to enable AUDITOR to express an opinion on the
financial statements of the CITY. If circumstances are encountered
which, in the judgment of AUDITOR, prevent the expression of an
unqualified opinion on the financial statements taken as a whole,
such opinion shall be qualified or omitted, but AUDITOR'S report
shall contain a statement of the reasons for the qualification or
omission. To the extent applicable, the audit shall include the
n
n
L�
audit procedures recommended in the booklet entitled "Check
List for the Audit of the Financial Records of a California
City," which was published by the League of California Cities
and the California Society of Certified Public Accountants.
2. AUDITOR agrees to render a report on his audit
of the CITY for the Fiscal Years to which this contract applies,
accompanied by condensed financial statements, and also to
present a short form report to accompany the complete financial
statements submitted by the Finance Director. These reports will
include an unqualified or qualified opinion or a disclaimer of
opinion on the financial statements, according to the circumstances
encountered, as described in Paragraph'l. Said report shall be
submitted to the City Council with a copy for each member and
one for the City Manager, Finance Director and City Attorney, and
three additional copies to be placed on file in the Office of the
City Clerk for public inspection. In addition to the final report,
AUDITOR shall advise the Council not later than November 15, and
a second time not later than May 13, of the Fiscal Year, as to
the conditions found to exist. These interim reports shall consist
of a short discussion of the performance of the accounting pro-
cedures and any other matters AUDITOR believes should be called
to the attention of the Council. AUDITOR agrees to render a
Management Letter at the close of the Fiscal Year, setting forth
the problems and recommended solutions to those problems as they
relate to the internal controls of the CITY'S accounting system,
as well as any other matters which in the AUDITOR'S opinion
should be brought to the attention of the CITY.
3. Compensation shall be paid to AUDITOR for the audit
engagement for the Fiscal Year 1980 -81, in the amount of Ten
Thousand Dollars ($10,000.00), payable fifty percent (50 %) on
May 1, 1981, and fifty percent (50%) upon delivery of AUDITOR'S
report following the close of the Fiscal Year 1980 -81.
-2-
4. Compensation shall be paid to AUDITOR for the audit
engagement for the Fiscal Year 1981 -82 in the amount of Eleven
Thousand Dollars ($11,000.00), payable twenty -five percent (25 %)
on January 1, 1982, twenty -five percent (25 %) on May 1, 1982, and
fifty percent (50 %) upon delivery of AUDITOR'S report following
the close of the Fiscal Year 1981 -82.
5. Compensation shall be paid to AUDITOR for the audit
engagement for the Fiscal Year 1982 -83 in the amount of Twelve
Thousand One Hundred Dollars ($12,100.00), payable twenty -five
percent (25 %) on January 1, 1983, twenty -five percent (25%) on
May 1, 1983, and fifty percent (50 %) upon delivery of AUDITOR'S
report following the close of the Fiscal Year 1982 -83.
6. The audit and examination specified herein and the
fees stipulated contemplate that conditions satisfactory to the
normal progress and completion of said audit and examination will
be encountered. In the event that actual conditions met are not
compatible with the usual and expected progress of the work, and
if in order to discharge its contractual obligation hereunder,
in the opinion of AUDITOR it would be necessary to do additional
work or to expend unreasonable amounts of time not contemplated
by this contract because of the (a) incompleteness of records,
(b) abnormal errors, (c) misappropriation of funds, (d) lack of
cooperation from CITY employees, or (e) any other justificable
reasons, AUDITOR, upon reasonable demonstration of the existence
of such conditions, shall be entitled to apply to the City Council
for supplemental compensation at the rates specified in Paragraph 7
hereof.
7. The audit and examination specified in Paragraph 1
hereof are to be based upon tests and samples of the accounting
records and transactions sufficient to satisfy AUDITOR of the
fairness of presentation of the financial condition and operating
-3-
results of the CITY, and is not to comprise a detailed examina-
tion of all transactions. It is understood that, owing to the
test of character of the examination, reliance must be placed on
the adequacy of the systems of internal check and control as the
principal safeguard against defalcation and other irregularities
of the same general nature, and, although AUDITOR will attempt
to detect any defalcations or similar irregularities, AUDITOR
does not assume the responsibility for doing so.
8. It is contemplated that AUDITOR may be requested
to perform services additional to the usual audit work, such as
advising upon changes in the accounting methods or the personnel,
assisting in accomplishing changes in the recording or reporting,
investigating the compliance of lessees with the terms of CITY
leases, making special examinations or audits at the request of
the City Council at times he would not otherwise be conducting
the audit 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 or City Manager
may authorize AUDITOR 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 the CITY, and
AUDITOR shall receive payment at the following rates per hour for
respective grades of staff members and partners used in performing
such work or services:
Staff Assistants - - - - -
- - - $30.00
per
hour
Senior Accountants - - - -
- - - $37.00
per
hour
Managers - - - - - - - - -
- - - $50.00
per
hour
Partners - - - - - - - - -
- - - $70.00
per
hour
-4-
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
CITY OF NEWPORT BEACH
A Municipal Corporation
ATTEST:
City Clerk
APPROVED AS TO FORM:
SIMONIS MORELAND ACCOUNTANTS,
INCORPORATED
Certified Public Accountants
City Attorney
BY
BY
3/10/81
-5-
0 0
RESOLUTION NO. 9 99 5
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH AUTHORIZING THE MAYOR AND
CITY CLERK TO EXECUTE AN AGREEMENT BEETWEEN
THE CITY OF NEWPORT BECH AND SIMONIS MORELAND
ACCOUNTANTS, INCORPORATED, CERTIFIED PUBLIC
ACCOUNTANTS, IN CONNECTION WITH AUDITING
SERVICES FOR THE FISCAL YEARS 1980 -81, 1981 -82
and 1982 -83
WHEREAS, there has been presented to the City Council of
the City of Newport Beach a certain agreement between the City of
Newport Beach and Simonis Moreland Accountants, Incorporated,
Certified Public Accountants, in connection with auditing
services for the fiscal years 1980 -81, 1981 -82 and 1982 -83
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 said agreement above described is
approved, and the Mayor and City Clerk are hereby authorized and
directed to execute the same on behalf of the City of Newport
Beach.
ADOPTED this 9th day of March, 1981.
Mayor
ATTEST:
City Clerk
pr
030381