ANNUAL AUDIT (2)
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AGREEMENT
THIS AGREEMENT, made and entered into this 4th day of June,
1992 by and between the CITY OF CLEARWATER, FLORIDA, a municipal
corporation, hereinafter referred to as "City," and Coopers &
Lybrand, a firm of certified Public Accountants, located at 101
E. Kennedy Blvd., suite 1500, Tampa, Florida 33602-5194,
hereinafter referred to as "Contractor;"
WITNESSETH
WHEREAS, the City is required by Article II, section
2.01(c) (3) of the City Charter to provide for an annual audit of
its financial accounts; and
WHEREAS, the City participates in Community Development
Block Grant and other Federal Assistance programs which require
independent financial and compliance audits in accordance with
rules established by the u.S. Department of Housing and Urban
Development and other agencies; and
WHEREAS, the City maintains a self-insurance program and is
desirous of having an actuarial analysis performed on all of its
liability accruals, including a projection of a reasonable
"catastrophe" loss reserve; and
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WHEREAS, the Contractor is in the business of public
accounting and providing casualty actuarial services, is fully
qualified to meet the requirements of applicable City, state and
Federal law, and desires to perform the necessary services:
NOW, THEREFORE, the parties agree as follows:
1. This agreement relates specifically to the City's fiscal
year ending September 30, 1992. It is anticipated that this
agreement will be extended for the three additional fiscal years
ending 9/30/93, 9/30/94, and 9/30/95. City Charter Section
2.01(c) (3) currently prohibits any single audit firm from being
employed for more than five consecutive years. The fees for
subsequent years are not expected to increase over the amounts
stated herein except for: (1) Unanticipated significant changes
in the City's future activities, financial requirements, or
actuarial analysis requirements and (2) a factor which recognizes
the impact of inflation on the Contractor's cost of providing the
specified services. The extension of this contract for
subsequent years will be based upon satisfactory services
provided by the Contractor, the determination of which will be at
the City's sole discretion.
2. The Contractor shall be responsible for preparing all
necessary year end adjustments, accruals, and closing entries,
beginning from the unadjusted pre-closing general ledger provided
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to the Contractor by the City. This includes preparation of all
required schedules, confirmation letters, workpapers, and other
supporting documentation, which will remain the property of the
City. The Contractor shall leave either the originals or legible
copies of all such documents with the City upon completion of the
engagement.
3. The Contractor will draft the annual report in
conformity with Generally Accepted Accounting Principles (GAAP),
and in compliance with applicable requirements of the certificate
of Achievement for Excellence in Financial Reporting Program
sponsored by the Government Finance Officers Association. The
annual report will include at least all disclosures and other
information included in the 1991 annual report, unless otherwise
agreed to by the City or modified by changes in GAAP. The
Contractor will provide the City with one copy ready master of
the annual report in a format acceptable to the City on or before
the completion date referenced in item #9 below.
4. The Contractor shall express an opinion on the fair
presentation of the City'S general purpose financial statements
in conformity with generally accepted accounting principles, for
the fiscal year ended September 30, 1992. The Contractor shall
also express an opinion on the fair presentation of the City'S
combining and individual fund and account group financial
statements and schedules in conformity with generally accepted
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accounting principles. The Contractor is not required to audit
the supporting schedules contained in the comprehensive annual
financial report, however, the Contractor shall provide an "in-
relation-to" report on the supporting schedules based on the
audit procedures applied during the audit of the general purpose
financial statements and the combining and individual fund
financial statements and schedules. The Contractor is not
required to audit the statistical section of the report.
The Contractor shall also perform the required financial and
compliance audits associated with the Community Development Block
Grant and other Federal Assistance programs in accordance with
the Single Audit Act of 1984 (PL 98-502).
5. In performing the services described in #4 above, the
Contractor shall comply with the following:
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generally accepted auditing standards
the standards set forth for financial audits in
the u.s. General Accounting Office's (GAO)
Government Auditinq Standards (1988),
the provisions of the federal Single Audit Act of
1984, and
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u.s. Office of Management and Budget (OMB)
Circular A-128, Audits of State and Local
Governments,
o
section 11.45 Florida Statutes,
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regulations of the state Department of Banking and
Finance,
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Rules adopted by the State of Florida Auditor
General for form and content of governmental unit
audits,
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Audits of state and Local Governmental units
(Revised) - AICPA, and
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Chapter 73-600 of the Florida statutes referring
to Fire District Audit requirements.
6. Following the completion of the audit, the Contractor
shall issue the following reports:
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A report on the fair presentation of the financial
statements in conformity with generally accepted
accounting principles.
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A report on the internal control structure based
on the auditor's understanding of the control
structure and assessment of control risk.
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A report on compliance with applicable laws and
regulations.
o
A report on the internal control structure used in
administering federal assistance programs.
o
A report on compliance with laws and regulations
related to major and non major federal financial
assistance programs.
o
A supplementary management letter if required to
comply with the regulations of the state of
Florida Auditor General.
o
A report summarizing the findings of the actuarial
analysis of the Central Insurance Fund, including
the analysis of a reasonable "catastrophe" loss
reserve.
7. The Contractor shall retain all working papers for a
minimum of three (3) years, unless notified in writing by the
City of the need to extend the retention period. The Contractor
shall make working papers available, upon request, the following
parties or their designees:
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o
City of Clearwater
o u.s. Department of Housing and Urban Development
o u.s. General Accounting Office (GAO)
o Parties designated by the federal or state
governments or by the City of Clearwater as part
of an audit quality review process
o Auditors of entities of which the City of
Clearwater is subrecipient of grant funds
In addition, the Contractor shall respond to the reasonable
inquiries of successor auditors and allow successor auditors to
review working papers relating to matters of continuing
accounting significance.
8. The Contractor shall perform an actuarial analysis of
the City's general, automobile, and Workers Compensation
liability accruals, currently accounted for as a part of the
City's self insurance fund. The analysis will include, but not
necessarily be limited to, a computation of the "IBNR" (incurred
but not reported) liabilities as of September 30, 1992. The
Contractor will also provide an analysis indicating a reasonable
"catastrophe" loss reserve. The Contractor will include in the
annual report all disclosures necessary to comply with GASB
statement Number 10.
9. The Contractor shall complete performance under this
contract by March 15, 1993.
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10. The Contractor shall bill the City and the City shall
pay the Contractor for the performance of the services under this
contract on the basis of the Contractor's normal and customary
charges for such services, plus ordinary out-of-pocket expenses
customarily stated separately by the Contractor in his general
practice, the same to be separately stated and itemized. The
total amount of this contract including out-of-pocket expenses
shall not exceed $139,500, consisting of $84,500 for the required
financial and compliance audits, $14,000 for the actuarial
analysis of the City's Self-Insurance Fund, and $41,000 to
complete the required year end closing entries and to prepare the
annual report document. The City may, by amendment of this
agreement, increase these maximum fees and/or extend the
completion date upon the Contractor's showing evidence of
conditions which require substantially more time than would
generally be required to perform the prescribed services.
Progress paYments will be made periodically for work completed to
date based on invoices submitted by the Contractor. The sum of
such progress paYments shall not exceed 90% of the maximum
specified above. The final paYment will be made within 30 days
of receipt of the final audit reports.
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IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be executed the day and year first above written:
1 a Garvey
Mayor-Commissioner
CITY OF CLEARWATER, FLORIDA
By:
Approved as to form
and correctness:
Attest:
M.A. Galbra1th,
City Attorney
witnesses:
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COOPERS & LYBRAND
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Attest: r~
By:
My Collar"" EUfUS 1/20/93
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