AUDITING SERVICES AGREEMENT
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AUDITING SERVICES AGREEMENT
THIS AGREEMENT, made and entered into this 7'*--day of Oc~k ,1996 by and
between the CITY OF CLEARWATER, FLORIDA, a municipal corporation, whose mailing
address is P. O. Box 4748, Clearwater, Florida, 34618-4748, hereinafter referred to as "City,"
and Ernst & Young LLP, a firm of Certified Public Accountants, located at 100 North Tampa
Street, Suite 2200, Tampa, Florida 33602, 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, State and County 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 Contractor is in the business of public accounting, is fully qualified to
meet the requirements of applicable City, State and Federal law, and desires to perform the
necessary services:
WHEREAS, City has selected contractor to provide Auditing Services pursuant to
Request for Proposal #167-96 which is incorporated herein by reference.
NOW, THEREFORE, the parties agree as follows:
1. Term. This agreement relates specifically to the City's fiscal years ending
September 30, 1996 thru September 30, 2000. This agreement may be terminated by the
City on the basis of unsatisfactory performance with written notice at least six months prior to
the September 30 fiscal year-end. City Charter Section 2.01 (c)(3) currently prohibits any
single audit firm from being employed for more than five consecutive years.
2. Scope of Services. Contractor agrees to perform the Scope of Services described
in Request for Proposal #167-96. The Contractor shall read the City's comprehensive annual
financial report for compliance with GAAP and the applicable requirements of the Certificate of
Achievement for Excellence in Financial Reporting program of the Government Finance
Officers Association and assist the City in complying with new or existing requirements. The
(!J! : ~ shall express an opinion on the fair presentation of the City's general purpose
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financial statements in conformity with generally accepted accounting principles, for the fiscal
years ending September 30, 1996 thru September 30, 2000. 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
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, State, and
County Assistance programs in accordance with the Single Audit Act of 1984 (PL 98-502) and
rules of other agencies.
3. Auditing Standards. In performing the services described in #2 above, the
Contractor shall comply with the following:
o generally accepted auditing standards
o the standards set forth for financial audits in the U.S. General Accounting
Office's (GAO) Government Auditing Standards (1994 Revision)
the provisions of the federal Single Audit Act of 1984
U.S. Office of Management and Budget (OMB) Circular A-128, Audits of
State and Local Governments
Section 11.45 Florida Statutes
regulations of the State Department of Banking and Finance
Rules adopted by the State of Florida Auditor General for form and
content of governmental unit audits
Audits of State and Local Governmental Units (Revised) - AICPA
Chapter 73-600 of the Florida Statutes referring to Fire District Audit
requirements
o
o
o
o
o
o
o
o
Rules adopted by the State of Florida Auditor General for audits of state
grant and aid appropriations.
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As a part of the audit, the Contractor will consider the City's internal control structure, as
required by generally accepted auditing standards and Government Auditing Standards.
4. Reports. Following the completion of the audit, the Contractor
shall issue the following reports:
o
A report on the fair presentation of the financial statements in conformity
with generally accepted accounting principles.
o
A report on the internal control structure based on the auditor's
understanding of the control structure and assessment of control risk.
o
A report on compliance with applicable laws and regulations, including
those relating to funds received form a State of Florida grants and aid
appropriation pursuant to a grant or contract.
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 on compliance with general compliance requirements as required
by the Single Audit Act of 1984 and OMB Circular A-128.
5. Public Records. The Contractor shall retain all working papers for a minimum of
five (5) 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, to the following parties or
their designees:
o
City of Clearwater
U.S. Department of Housing and Urban Development
U.S. General Accounting Office (GAO)
o
o
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Parties designated by the federal or state governments or by the City of
Clearwater as part of an audit quality review process
Auditors of entities of which the City of Clearwater is subrecipient of grant
funds
o
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.
6. Annual Financial Reports. The Contractor shall assist the City in scheduling the
Comprehensive Annual Financial Report to be completed and issued no later than February 1,
succeeding each fiscal year. Contractor/City meetings will be held at least once per month
until completion of this contract. Weekly status meetings shall be held while the Contractor is
working at the City. The Contractor shall complete performance under this contract by March
15 succeeding each fiscal year.
7. Professional Fees. The Contractor shall bill the City and the City upon Finance
Director's approval 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:
Fiscal Year 1996
Fiscal Year 1997
Fiscal Year 1998
Fiscal Year 1999
Fiscal Year 2000
$79,000
82,000
85,000
88,000
92,000
The City may, by amendment of this agreement, increase this maximum fee and/or
extend the completion date upon the Contractor's showing evidence of conditions which
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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. Payment for professional fees shall be paid according
to the Florida Prompt Payment Act. F.S.218.70.
8. Indemnification and Insurance. Contractor agrees to defend and indemnify, save and
hold the City harmless from any and all claims, suits, judgments, and liability for death, personal
injury, bodily injury, or property damage arising directly or indirectly from the performance by the
Contractor, its employees, subcontractors, or assigns, including legal fees, court costs, or other
legal expenses. Without limiting its liability under this Agreement, Contractor, at its expense
shall secure and provide to the City professional liability insurance in an amount of at least
$1,000,000.00 per occurrence. This provision shall survive the termination of this Agreement.
9. Conflict of Interest. It is understood by the City and Contractor that Contractor is not
aware of any clients of the firm that currently present any conflict between the interests of the
City and other clients of Contractor. If any potential conflict of interest arises during the time
Contractor is representing the City, Contractor will promptly inform the City. The City is under no
obligation to agree to permit the conflict representation.
10. Construction and Amendments. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida. This Agreement may be amended only by a
writing duly entered into by the City and Contractor.
11. Attorneys fees. In the event that either party seeks to enforce this Agreement
through attorneys at law, then the parties agree that each party shall bear its own costs and
attorney's fees, and that jurisdiction for such an action shall be in a court of competent
jurisdiction in Pinellas County, Florida.
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(SIGNATURE PAGE FOR AUDITING SERVICES AGREEMENT BETWEEN
CITY OF CLEARWATER AND ERNST & YOUNG LLP)
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed the day and year first above written:
Countersigned:
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Approved as to form and legal
sufficiency:
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Witnesses:
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CITY OF CLEARWATER, FLORIDA
By: ti'" ~
Elizabe . Dep, la, City Manager
Attest:
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Cy thia E. Gouaeau, City Cle~k.'"
ERNST & YOUNG LLP
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