R09-120
r ~",--....-.,~"~~"......,...~_..."..,.~,,,.--..._ """""'~,'l<""_''''c_''~''" ..
I
I
!
1
2
3 RESOLUTION NO. R09-j UJ
4
5 A RESOLUTION OF THE CITY OF BOYNTON
6 BEACH, FLORIDA, AMENDING THE FIVE YEAR
7 CONTRACT FOR FINANCIAL AUDITING
8 SERVICES WITH NOWLEN, HOLT & MINER, P.A.;
9 AUmORIZlNG THE CITY MANAGER TO
10 EXECUTE AN ENGAGEMENT LETTER; AND
11 PROVIDING AN EFFECTIVE DATE.
12
13 WHEREAS, on June 20~ 2006 the City Commission approved a Five Year
14 Contract for Financial Auditing Services with Nowlen, Holt & Miner, P.A.; and
15 WHEREAS, the original contract recognizes that the original scope of services
16 and compensation are predicated upon the audit requirements imposed by laws,
17 regulations and professional standards relating to such services and that the New
18 Statements of Auditing Standards were not applicable when the City Commission awarded
19 the Contract in 2006; and
20 WHEREAS, upon recommendation of staff, the City Commission of the City of
21 Boynton Beach does hereby approve the amendment to the Five Year Contract for
22 Financial Auditing Services with Nowlen, Holt & Miner, P.A. of West Palm Beach,
23 Florida via Engagement Letter dated June 8~ 2009.
24 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION
25 OF THE CITY OF BOYNTON BEACH, FLORIDA, THAT:
26 Section 1. The foregoing "Whereas" clauses are hereby ratified and confirmed as
27 being true and correct and are hereby made a specific part of this Resolution upon adoption
28 hereof.
29 Section 2. The City Commission of the City of Boynton Beach, Florida,
S:\CA\RESO\Agreementa\Bid Awards\Amend 5 Yr Contract- Financial Services 081809.doc
f ~._~...",t'>""~~_'N.~,"""""~.,,,~~_h'_'''- "-,' .j'-"",'" I
1 I hereby approves the amendment to the Five Year Contract for Financial Auditing Services
2 to Nowlen~ Holt & Miner~ P.A.~ via Engagement Letter dated June 20~ 2006~ a copy of
3 which is attached hereto as Exhibit "A".
4 Section 3. That the City Man~er is hereby authorized and directed to execute
5 the Engagement Letter dated June 8, 2009~ between the City of Boynton Beach and
6 Nowlen~ Holt & Miner~ P.A~ a copy of which shall be made an Exhibit to the Original Five
7 Year Contract for Financial Auditing Services.
8 Section 4. That this Resolution shall become effective immediately.
9 PASSED AND ADOPTED this Ie day of Augus~ 2009.
10
11
12
13
14
15
16 ~L.H
17
18
19 Commissioner - Ronald Weiland
20
21
22
23
24
25
26
27 ATIEST:
28
29
30
31
32
33
34
35
36
\Bid Award8\Amend 5 Yr Contract- Financial Services 081809.doc
..........."'+-... ......-,........ __._....,----.M.,-.~"..;~~",.,.._,..,.. .".........'....,"'",~_~_,~_'r._'-"'_"'_..,____~_.........".,...~....' ,.........,.,.,-'...._......."~..,
N H NOWLEN, HOLT & MINER, P.A. lGoq - /;JcJ
-
a M CERTIF1ED PUBUC ACCOUNTANTS EVERETT B. NOWLEN 1.....'_1, c;".
EDWARO t HOLT, c;".
WIU.IAM B. MINER, eM
WEST IW.M BEACH OFFICE ROBERT W. HENOAIX. JR.. eM
JANET R. IIARICEV1CH. eM
215 RFTH STREET, SUITE 200 -
POST OFFICE 80)( 347
WEST IW.M BEACH, FlClAIOA 33402-0347
TElEPHONE (561) 1159-3060 KAlMt.EEN A. lINER. eM
FAX (561) B35.Q82B ROBIRTW.~. eM
TERRV L. MORTaN, JR.. eM
N. ROtW.IlIlENNETT, c;".
J. -.a. lTEVENS. eM
DANlEI. A. KIROlMAN, eM
ALEXIA G. YAAGA, CRI\
June 8~ 2009 BRIAN J.1IREllCIA, CFplI, CRI\
lWlIEL I. 'IOUNG, eM
KARA D. PETERSON. eM
BElle GLADE OFFICE
333 S. E. 2nd STREET
City of Boynton Beach POST OFFICE BOX 338
BELLE GlADE. FLORIDA 33430-0338
100 East Boynton Beach Boulevard TELEPHONE (561) 9ll8-5612
FAX (561) 9ll8-8248
Boynton Beac~ FL 33425-0310
Gentlemen:
Weare pleased to confirm our understanding of the services we are to provide the City of
Boynton Beach~ Florida for the years ended September 30~ 2008~ 2009~ and 2010. We will audit
the financial statements of the governmental activities~ the business-type activities~ each major
fund, and the aggregate remaining fund informatio~ which collectively comprise the basic
financial statements, of the City of Boynton Beac~ Florida as of and for the years ended
September 30~ 2oo8~ 2009~ and 2010. We will not audit the financial statements of the
Community Redevelopment Agency (the blended component unit of the City)~ the Municipal
Police Officers' Retirement Fund and the Firefighters' Pension fund (two fiduciary funds of the
City). Those financial statements will be audited by other auditors whose reports will be
furnished to us~ and our opinion~ insofar as it relates to the amounts included for the Community
Redevelopment Agency~ the Municipal Police Officers' Retirement Fund~ and the Firefighters'
Pension Fund~ will be based solely on the reports of other auditors.
Accounting standards generally accepted in the United States provide for certain required
supplementary information (RSI), such as management's discussion and analysis (MD&A)~ to
accompany the City of Boynton Beach~ Florida's basic financial statements. As part of our
engagemen~ we will apply certain limited procedures to the City of Boynton Beach, Florida's
RSI. These limited procedures will consist principally of inquiries of management regarding the
methods of measurement and presentation~ which management is responsible for affirming to us
in its representation letter. Unless we encounter problems with the presentation of the RSI or
with procedures relating to it~ we will disclaim an opinion on it. The following RSI is required by
generally accepted accounting principles and will be subjected to certain limited procedures~ but
will not be audited:
1) Management's Discussion and Analysis.
2) Schedule of Funding Progress for the Pension Plans
3) Schedule of Contributions for the General Employees~ Pension Fund
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS.FLORIDA INSTlTIJTE OF CERTIAED PUBLIC ACCOUNTANTS.CPAMERICA INTERNATIONAL
.....~. "e"'_"._-."~~.., ..,-..-....--"""".... _,.,._"_"f...._',..'.........'.~..'...~..._"'"."....,....""-,,.-'.~".....e...""-~"'~_____. ,,_---..-.-_.._.,~~.......,~__~."~"'..
Supplementary information other than RSI also accompanies the City of Boynton Beach
Florida's basic financial statements. We will subject the following supplementary information to
the auditing procedures applied in our audit of the basic financial statements and will provide an
opinion on it in relation to the basic financial statements:
1) Schedule of Expenditures of Federal Awards and State Financial Assistance
2) Combining and Individual Fund Financial Statements and Schedules
The following additional information accompanying the basic financial statements will not be
subjected to the auditing procedures applied in our audit of the financial statements~ and for
which our auditor's report will disclaim an opinion.
1) Introductory Section
2) Statistical Section
Audit Objectives
The objective of our audit is the expression of opinions as to whether your basic financial
statements are fairly presented~ in all material respects~ in conformity with U.S. generally
accepted accounting principles and to report on the fairness of the additional information referred
to in the first paragraph when considered in relation to the basic financial statements taken as a
whole. The objective also includes reporting on-
. Internal control related to the financial statements and compliance with laws, regulations~
and the provisions of contracts or grant agreements~ noncompliance with which could
have a material effect on the financial statements in accordance with Government
Auditing Standards.
. Internal control related to major programs and an opinion (or disclaimer of opinion) on
compliance with laws~ regulations~ and the provisions of contracts or grant agreements
that could have a direct and material effect on each major program in accordance with the
Single Audit Act Amendments of 1996 and OMB Circular A-l33, Audits of States, Local
Governments, and Non-Profit Organizations.
The reports on internal control and compliance will each include a statement that the report is
intended solely for the information and use of management~ the body or individuals charged with
govemance~ others within the entity specific legislative or regulatory bodies~ federal awarding
agencies~ and if applicable~ pass-through entities and is not intended to be and should not be used
by anyone other than these specified parties.
Our audit will be conducted in accordance with auditing standards generally accepted in the
United States of America; the standards for financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; the Single Audit Act
Amendments of 1996; the provisions of OMB Circular A-l33; and the provisions of Chapter
10.550~ Rules of the Florida Auditor General~ and will include tests of accounting records~ a
determination of major program(s) in accordance with OMB Circular A-133, and other
2
.,-~" ..""....,.""'___~""'..'~,__-~.....,....._.____~_~...._..--" .,.~_..._,_""."",.-...,,,,-....,.,,"', ^",..".........>"'~. ""._. ,."c'''''~'''''''_'_''_~"'_ ..._....'...,,__._~_"""...."^'~.y_....~'
procedures we consider necessary to enable us to express such opinions and to render the
required reports. If our opinions on the financial statements or the Single Audit compliance
opinions are other than unqualified~ we will fully discuss the reasons with you in advance. If~ for
any reason, we are unable to complete the audit or are unable to form or have not formed
opinions~ we may decline to express opinions or to issue a report as a result of this engagement.
Management Responsibilities
Management is responsible for the basic financial statements and all accompanying information
as well as all representations contained therein. Management is also responsible for preparation
of the schedule of expenditures of federal awards in accordance with the requirements of OMB
Circular A-133. As part of the audit, we will assist with preparation of your financial statements~
schedule of expenditures of federal awards~ and related notes. You are responsible for making all
management decisions and performing all management functions relating to the financial
statements~ schedule of expenditures of federal awards, and related notes and for accepting full
responsibility for such decisions. You will be required to acknowledge in the management
representation letter our assistance with preparation of the financial statements and the schedule
of expenditures of federal awards and that you have reviewed and approved the financial
statements~ schedule of expenditures of federal awards~ and related notes prior to their issuance
and have accepted responsibility for them. Further~ you are required to designate an individual
with suitable skill~ knowledge~ or experience to oversee any non-audit services we provide and
for evaluating the adequacy and results of those services and accepting responsibility for them.
Management is responsible for establishing and maintaining effective internal controls, including
internal controls over compliance~ and for monitoring ongoing activities~ to help ensure that
appropriate goals and objectives are met. You are also responsible for the selection and
application of accounting principles; for the fair presentation in the financial statements of the
respective financial position of the governmental activities~ the business-type activities~ the
aggregate discretely presented component units~ each major fund~ and the aggregate remaining
fund information of the City of Boynton Beach, Florida and the respective changes in financial
position and~ where applicable~ cash flows in conformity with U.S. generally accepted
accounting principles; and for compliance with applicable laws and regulations and the
provisions of contracts and grant agreements.
Management is also responsible for making all financial records and related information
available to us and for ensuring that management and financial information is reliable and
properly recorded. Your responsibilities also include~ includiIig identifying significant vendor
relationships in which the vendor has responsibility for program compliance and for the accuracy
and completeness of that information. Your responsibilities include adjusting the financial
statements to correct material misstatements and confirming to us in the representation letter that
the effects of any uncorrected misstatements aggregated by us during the current engagement
and pertaining to the latest period presented are immaterial~ both individually and in the
aggregate~ to the financial statements taken as a whole.
3
_ ,,,,,~,_,,,,,,,~~,___,~~""_~_"',,",,,,,,,,__,,,,,~"_,__,,,,'_"_*-"'1___-..._,..,.~'__''''''''.'''_'o..'~'''''''''''''_'''''''''___''~''''''_~_''''''''''''''''~''''''''_ ....."""----..,.,.,.
You are responsible for the design and implementation of programs and controls to prevent and
detect fraud~ and for informing us about all known or suspected fraud or illegal acts affecting the
government involving (1) TJlana.gemen~ (2) employees who have significant roles in internal
control, and (3) others where the fraud or illegal acts could have a material effect on the financial
statements. Your responsibilities include informing us of your knowledge of any allegations of
fraud or suspected fraud affecting the government received in communications from employees~
former employees, grantors~ regulators~ or others. In additio~ you are responsible for identifying
and ensuring that the entity complies with applicable laws~ regulations~ contracts~ agreements~
and grants. Additionally~ as required by OMB Circular A-133~ it is management's responsibility
to follow up and take corrective action on reported audit findings and to prepare a summary
schedule of prior audit findings and a corrective action plan.
Management is responsible for establishing and maintaining a process for tracking the status of
audit findings and recommendations. Management is also responsible for identifying for us
previous financial audits~ attestation engagements, performance audits~ or other studies related to
the objectives discussed in the Audit Objectives section of this letter. This responsibility includes
relaying to us corrective actions taken to address significant findings and recommendations
resulting from those audits~ attestation engagements, performance audits, or studies. You are also
responsible for providing management's views on our current findings~ conclusions~ and
recommendations, as well as your planned corrective actions~ for the report, and for the timing
and format for providing that information.
Audit Procedures-General
An audit includes examining~ on a test basis~ evidence supporting the amounts and disclosures in
the financial statements; therefore~ our audit will involve judgment about the number of
transactions to be examined and the areas to be tested. We will plan and perform the audit to
obtain reasonable rather than absolute assurance about whether the financial statements are free
of material misstatemen~ whether from (1) errors, (2) fraudulent financial reporting~ (3)
misappropriation of assets, or (4) violations of laws or governmental regulations that are
attributable to the entity or to acts by management or employees acting on behalf of the entity.
Because the determination of abuse is subjective~ Government Auditing Standards do not expect
auditors to provide reasonable assurance of detecting abuse.
Because an audit is designed to provide reasonable~ but not absolute assurance and because we
will not perform a detailed examination of all transactions~ there is a risk that material
misstatements or noncompliance may exist and not be detected by us. In additio~ an audit is not
designed to detect immaterial misstatements or violations of laws or governmental regulations
that do not have a direct and material effect on the financial statements or major programs.
However~ we will inform you of any material errors and any fraudulent financial reporting or
misappropriation of assets that come to our attention. We will also inform you of any violations
of laws or governmental regulations that come to our attention~ unless clearly inconsequential.
We will include such matters in the reports required for a Single Audit. Our responsibility as
auditors is limited to the period covered by our audit and does not extend to any later periods for
which we are not engaged as auditors.
4
,.. '"~,."-'~'-' ,.,-...... -~ , ~ ",__,",~""~_",.",#",",...""".,_.".,-..';~;t<..,....__,_....""___",,,,,,"___.....,...."...
Our procedures will include tests of documentary evidence supporting the transactions recorded
in the accounts~ and may include tests of the physical existence of inventories~ and direct
confirmation of receivables and certain other assets and liabilities by correspondence with
selected individuals~ funding sources~ creditors~ and financial institutions. We will request
written representations from your attorneys as part of the engagemen~ and they may bill you for
responding to this inquiry. At the conclusion of our audit~ we will require certain written
representations from you about the financial statements and related matters.
Audit Procedures-Internal Controls
Our audit will include obtaining an understanding of the entity and its environmen~ including
internal control~ sufficient to assess the risks of material misstatement of the financial statements
and to design the nature~ timing~ and extent of further audit procedures. Tests of controls may be
performed to test the effectiveness of certain controls that we consider relevant to preventing and
detecting errors and fraud that are material to the financial statements and to preventing and
detecting misstatements resulting from illegal acts and other noncompliance matters that have a
direct and material effect on the financial statements. Our tests, if performed, will be less in
scope than would be necessary to render an opinion on internal control and, accordingly~ no
opinion will be expressed in our report on internal control issued pursuant to Government
Auditing Standards.
As required by OMB Circular A-133~ we will perform tests of controls over compliance to
evaluate the effectiveness of the design and operation of controls that we consider relevant to
preventing or detecting material noncompliance with compliance requirements applicable to each
major federal award program. However~ our tests will be less in scope than would be necessary
to render an opinion on those controls and, accordingly~ no opinion will be expressed in our
report on internal control issued pursuant to OMB Circular A-133.
An audit is not designed to provide assurance on internal control or to identify significant
deficiencies. However~ during the audit~ we will communicate to management and those charged
with governance internal control related matters that are required to be communicated under
AICPA professional standards~ Government Auditing Standards~ and OMB Circular A-133.
Audit Procedures--Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of
material misstatement~ we will perform tests of the City of Boynton Beac~ Florida~s compliance
with applicable laws and regulations and the provisions of contracts and agreements, including
grant agreements. However~ the objective of those procedures will not be to provide an opinion
on overall compliance and we will not express such an opinion in our report on compliance
issued pursuant to Government Auditing Standards.
5
"-._~ --....--.-
._~_ _'''''."'''.''''_'.__.I_~_...__~,,,,,,,,,,,...-~...-._..~,,,,___,,_.._j<....._..,...,,,,,..,..,..<~__...._.,"._.,.~.-"_"..-"'''~.....'.'"'''_-~...,..''''''"'''~~",_..._".__,,_.......~.~""""'_.,,~,_._~....__.w,____..."..<.."
OMB Circular A-133 requires that we also plan and perform the audit to obtain reasonable
assurance about whether the auditee has complied with applicable laws and regulations and the
provisions of contracts and grant agreements applicable to major programs. Our procedures will
consist of tests of transactions and other applicable procedures described in the OMB Circular
A-I33 Compliance Supplement for the types of compliance requirements that could have a direct
and material effect on each of the City of Boynton Beac~ Florida's major programs. The
purpose of these procedures will be to express an opinion on the City of Boynton Beac~
Florida's compliance with requirements applicable to each of its major programs in our report on
compliance issued pursuant to OMB Circular A-133.
Engagement Administration, Fees, and Other
We understand that your employees will prepare all cas~ accounts receivable~ or other
confirmations we request and will locate any documents selected by us for testing.
At the conclusion of the engagement~ we will complete the appropriate sections of the Data
Collection Form that summarizes our audit findings. It is management's responsibility to submit
the reporting package (including financial statements~ schedule of expenditures of federal awards,
summary schedule of prior audit findings, auditors' reports~ and corrective action plan) along
with the Data Collection Form to the federal audit clearinghouse. We will coordinate with you
the electronic submission and certification. If applicable~ we will provide copies of our report for
you to include with the reporting package you will submit to pass-through entities. The Data
Collection Form and the reporting package must be submitted within the earlier of 30 days after
receipt of the auditors' reports or nine months after the end of the audit period, unless a longer
period is agreed to in advance by the cognizant or oversight agency for audits.
The audit documentation for this engagement is the property ofNowlen~ Holt & Miner~ P.A. and
constitutes confidential information. However~ pursuant to authority given by law or regulation~
we may be requested to make certain audit documentation available to a Grantor Agency
pursuant to authority given to it by law or regulation. We will notify you of any such request. If
requested~ access to such audit documentation will be provided under the supervision of No wI en,
Holt & Miner, P.A. personneL Furthermore~ upon request~ we may provide copies of selected
audit documentation to the aforementioned parties. These parties may intend~ or decide~ to
distribute the copies or information contained therein to others~ including other governmental
agencies.
The audit documentation for this engagement will be retained for a minimum of five years after
the report release or for any additional period requested by a Grantor Agency . If we are aware
that a federal awarding agency~ pass-through entity~ or auditee is contesting an audit finding~ we
will contact the party(ies) contesting the audit finding for guidance prior to destroying the audit
documentation.
6
---------------_.._.~----~------~-_..__. -~_.._.._---_.__..._--~,-~.~~----._--,---_.~-~-- ,.- .-- .~-_._-_._-----~_.~_..-
"r..........,_._.__....I_..___......._ .~.___-"'""_~~.."_-.,~"_~..."'""""".,,..,~_....,~~,,.,.,.......,_,.'"~"'_.<,,.,.._.~.._......-..~.. -~".--,...~...-
Edward T. Holt is the engagement partner and is responsible for supervising the engagement and
signing the reports or authorizing another individual to sign them. Our fee for these services will
be in accordance with the attached Schedule 1. Our invoices for these fees will be rendered each
month as work progresses and are payable on presentation. In accordance with our firm policies,
work may be suspended if your account becomes overdue and may not be resumed until your
account is paid in :full. If we elect to terminate our services for nonpayment~ our engagement will
be deemed to have been completed upon written notification of terminatio~ even if we have not
completed our report(s). You will be obligated to compensate us for all time expended and to
reimburse us for all out-of-pocket costs through the date of termination. The attached fee
schedule is based on anticipated cooperation from your personnel and the assumption that
unexpected circumstances will not be encountered during the audit. If significant additional time
is necessary~ we will discuss it with you and arrive at a new fee estimate before we incur the
additional costs.
Government Auditing Standards require that we provide you with a copy of our most recent
external peer review report and any letter of commen~ and any subsequent peer review reports
and letters of comment received during the period of the contract. Our 2006 peer review report
accompanies this letter.
You may request that we perform additional services not contemplated by this engagement letter.
If this occurs~ we will communicate with you regarding the scope of the additional services and
the fees for additional services. We also may issue a separate engagement letter covering the
additional services. In the absence of any other written communication from us documenting
such additional services~ our services will continue to be governed by the terms of this
engagement letter.
This agreement may be terminated by either party without cause. Written notice from the
terminating party to the other party should be provided no later than seven (7) calendar months
(February 28) prior to the end of the fiscal year next subject to audit.
We appreciate the opportunity to be of service to the City of Boynton Beach, Florida and believe
this letter accurately summarizes the significant terms of our engagement. If you have any
questions~ please let us know. If you agree with the terms of our engagement as described in this
letter~ please sign the enclosed copy and return it to us.
Very truly yours~
~u.P'TthfJ
Nowlen~ Holt & Miner. P.A.
.
7
- _____.____n.___ -" .~._--~._---_.__..._-- ---
~~,,....~.._,,,,.---,,.~..-,,.,..~.....,..,- ,_...-,_,."."_.-.....7"'..~".........-~,,___......_~~___~_~.,~_.,_..___~.~_.....--
. ' .
SCHEDULE 1
City of Boynton Beach
Total Price for Auditing Services
NOTE: The prices presented below assume that no significant audit adjustments will be
necessary and no reportable conditions or non-compliance will be noted in the Single Audits.
Original Adjusted
Price Adiustment. Price
Year 1 - 2006 $86,000
Year 2 - 2007 $89,000
Year 3 - 2008 $92,000 $7,000 $ 99,000
Year 4 - 2009 $95,000 $7,000 $102,000
Year 5 - 2010 $98,000 $7,000 $105,000
. These price adjustments reflect the increased costs due to implementation of the following
Statements on Auditing Standards (SAS) that are applicable beginning with the fiscal year
ending September 30, 2008:
. SAS No. 104, Amendment to Statement on Auditing Standards No.1, Codification of
Auditing Standards and Procedures ("Due Professional Care in the Performance of
Work")
. SAS No. 105, Amendment to Statement on Auditing Standards No. 95, Generally
Accepted Auditing Standards
. SAS No.1 06, Audit Evidence
. SAS No. 107, Audit Risk and Materiality in Conducting an Audit
. SAS No. 108, Planning and Supervision
. SAS No. 109, Understanding the Entity and its Environment and Assessing the Risks
of Material Misstatement
. SAS No. 110, Performing Audit Procedures in Response to Assessed Risks and
Evaluating the Audit Evidence Obtained
. SAS No. 111, Amendment to Statement on Auditing Standards No. 39, Audit
Sampling
. SAS No. 113, Omnibus- 2006
. SAS No. 114, The Auditor's Communication with Those Charged with Governance