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HomeMy WebLinkAbout2020 Contract ExtensionM11 SE�T�N HOME OF PBKAN ISIAND CITY COUNCIL AGENDA TRANSMITTAL FORM COUNCIL MEETING DATE: May 02020 AGENDA ITEM TITLE: Continuation of Financial Auditing Services. Recognize that the Request for Proposal Process for Financial Auditing Services has been Deferred and an Engagement Letter Rehmann Robson has been Secured. BACKGROUND: Staff had initiated the process of requesting proposals from interested auditing firms to perform the City's annual audit. At the February 12, 2020 City Council Meeting we had obtained approval for the appointment of the Mayor to serve as the chair of an evaluation committee in accordance with the selection process required by State Statute 218.391. Last month, we became concerned about attempting to pursue this with the limitations on group meetings that we felt would make it difficult for potential participants and staff to fully judge which firms might be the best fit for this important work. On April 13�, we contacted Rehmann Robson and requested they provide financial auditing services for another year. Attached is the Engagement Letter signed by both parties for this purpose. IF AGENDA ITEM REQUIRES EXPENDITURE OF FUNDS: N/A Administrative Services Department/CFO Review: 1 ATTACHMENTS: Engagement Letter /with Rehmann Robson City Manager Authorization: Date: ana C HONE OF PEUCAN SWD March 6, 2020 Rehmann Robson 5070 North Highway AtA, Suite 250 Vero Beach, Florida 32963 This representation letter Is provided In connection with your audit of the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund Information of City of Sebastian, Florida (the "City"), as of and for the year ended September 30, 2019, and the related notes to the financial statements, for the purpose of expressing opinions on whether the basic financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows, where applicable, and the respective budgetary comparison for the General Fund and each major special revenue fund of the City in conformity with accounting principles generally accepted for governments in the United States of America (U.S. GAAP). Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they Involve an omission or misstatement of accounting Information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement. We confirm that, having made such inquiries as we considered necessary for the purpose of appropriately Informing ourselves as of March 6, 2020: Financial Statements 1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated March 22, 2018, for the preparation and fair presentation of the financial statements of the various opinion units referred to above in accordance with U.S. GAAP. We have reviewed, approved, and taken responsibility for the financial statements and related notes. 2. We have reviewed and approved the various adjusting journal entries that were proposed by you for recording to our books and records and reflected in the financial statements. 3. We acknowledge our responsibility for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 4. We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud. 5. Significant assumptions used by us In making accounting estimates, Including those measured at fair value, are reasonable. 6. Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP. For the purposes of this letter, related parties mean members of the governing body; board members; administrative officials; immediate families of administrative officials, board members, and members of the governing body, and any companies affiliated with or owned by such individuals. Rebmann Robson Page 2 of 5 7. All events subsequent to the date of the financial statements and for which U.S. GAAP requires adjustment or disclosure have been adjusted or disclosed. 8. The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP. 9. With regard to Items reported at fair value: a. The underlying assumptions are reasonable and they appropriately reflect management's intent and ability to carry out Its stated courses of action. b. The measurement methods and related assumptions used in determining fair value are appropriate In the circumstances and have been consistently applied. c. The disclosures related to fair values are complete, adequate, and in conformity with U.S. GAAP. d. There are no subsequent events that require adjustments to the fair value measurements and disclosures included in the financial statements. 10. All funds and activities are properly classified. 11. All funds that meet the quantitative criteria in GASB Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis —for State and Local Governments, and GASB Statement No. 37, Basic Financial Stotements—and Management's Discussion and Analysis —for State and Local Governments: Omnibus, for presentation as major are Identified and presented as such and all other funds that are presented as major are considered important to financial statement users. 12. Alt components of net position and fund balance classifications have been property reported. 13. Alt revenues within the statement of activities have been properly classified as program revenues, general revenues, contributions to term or permanent endowments, or contributions to permanent fund principal. 14. All expenses have been property classified in or allocated to functions and programs In the statement of activities, and allocations, if any, have been made on a reasonable basis. 15. All Interfund and intra-entity, transactions and balances have been properly classified and reported. 16. Deposit and investment risks have been properly and fully disclosed. 17. Capital assets, including infrastructure assets, are properly capitalized, reported, and if applicable, depreciated. 18, Ail required supplementary information is measured and presented within the prescribed guidelines. 19. We believe that the actuarial assumptions and methods used to measure pension liabilities and costs for financial accounting purposes are appropriate in the circumstances. Information Provided 20. We have provided you with: a. Access to all information, of which we are aware that is relevant to the preparation and fair presentation of the financial statements of the various opinion units referred to above, such as records, documentation, meeting minutes, and other matters; b. Additional information that you have requested from us for the purpose of the audit; and c. Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence. 21. All transactions have been recorded in the accounting records and are reflected in the financial statements. 22. We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud. Rehmann Robson Page 3 of 5 23. We have no knowledge of any fraud or suspected fraud that affects the entity and involves: a. Management; b. Employees who have significant rotes in internal control; or c. Others where the fraud could have a material effect on the financial statements. 24. We have no knowledge of any allegations of fraud, or suspected fraud, affecting the entity's financial statements communicated by employees, former employees, vendors, regulators, or others. 25. We have disclosed to you all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements and we have not consulted legal counsel concerning litigation or claims. 26. We have disclosed to you the identity of the entity's related parties and all the related party relationships and transactions of which we are aware. 27. There have been no communications from regulatory agencies concerning noncompliance with or deficiencies in accounting, internal control, or financial reporting practices. 28. The government has no plans or Intentions that may materially affect the carrying value or classification of assets and liabilities. 29. We have disclosed to you all guarantees, whether written or oral, under which the government is contingently liable. 30. We have identified and disclosed to you the laws, regulations, and provisions of contracts and grant agreements that could have a direct and material effect on financial statement amounts, including legal and contractual provisions for reporting specific activities in separate funds. 31. There are no: a. Violations or possible violations of laws or regulations, or provisions of contracts or grant agreements whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, Including applicable budget laws and regulations. b. Unasserted claims or assessments that our lawyer has advised are probable of assertion and must be disclosed in accordance with GASB-62, Codification of Accounting and Finandal Reporting Guidance Contained in Pre -November 30, 1989 FASB and AICPA Pronouncements. c. Other liabilities or gain or loss contingendes that are required to be accrued or disclosed by GASB- 62. 32. The government has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset or future revenue been pledged as collateral, except as disclosed to you. 33. We have complied with all aspects of grant agreements and other contractual agreements that would have a material effect on the financial statements in the event of noncompliance. 34. We have disclosed to you all significant estimates and material conrentrations known to management that are required to be disclosed in accordance with GASB-62. Significant estimates are estimates at the balance sheet date that could change materially within the next year. Concentrations refer to volumes of business, revenues, available sources of supply, or markets or geographic areas for which events could occur that would significantly disrupt normal finances within the next year. Supplementary Information in Relation to the Financial Statements as a Whole 35. With respect to the supplementary information accompanying the financial statements: a. We acknowledge our responsibility for the presentation of the supplementary information in accordance With accounting principles generally accepted in the United States of America. b. We believe the supplementary information, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America. c. The methods of measurement or presentation have not changed from those used in the prior period. d. We believe the significant assumptions or interpretations underlying the measurement or presentation of the supplementary information, and the basis for our assumptions and interpretations, are reasonable and appropriate in the circumstances. Rehmann Robson Page 4 of 5 Required Supplementary Information 36. With respect to the required supplementary information accompanying the financial statements: a. We acknowledge our responsibility for the presentation of the required supplementary information in accordance with accounting principles generally accepted in the United States of America. b. We believe the required supplementary information, including Its form and content, is measured and fairly presented in accordance with accounting principles generally accepted in the United States of America. c. The methods of measurement or presentation have not changed from those used in the prior period. d. We believe the significant assumptions or interpretations underlying the measurement or presentation of the required supplementary information, and the basis for our assumptions and interpretations, are reasonable and appropriate In the circumstances. Uniform Guidance (2 CFR 200) 37. With respect to federal awards, we represent the following to you: a. We are responsible for understanding and complying with and have complied with the requirements of the Uniform Guidance. b. We are responsible for the preparation and presentation of the schedule of expenditures of federal awards in accordance with the Uniform Guidance. c. We believe the schedule of expenditures of federal awards, including Its form and content, is fairly presented in accordance with the Uniform Guidance. d. The methods of measurement or presentation have not changed from those used in the prior period. e. We believe the significant assumptions or interpretations underlying the measurement or presentation of the schedule of expenditures of federal awards, and the basis for our assumptions and interpretations, are reasonable and appropriate in the circumstances. I. We are responsible for including the auditor's report on the schedule of expenditures of federal awards in any document that contains the schedule and that indicates that the auditor has reported on such information. g. When the schedule of expenditures of federal awards Is not presented with the audited financial statements, management will make the audited financial statements readily available to the intended users of the schedule of expenditures of federal awards no later than the date of issuance by the entity of the schedule of expenditures of federal awards and the auditor's report thereon. h. We have, In accordance with the Uniform Guidance, identified in the schedule of expenditures of federal awards, expenditures made during the audit period for all awards provided by federal agencies In the form of grants, federal cost -reimbursement contracts, loans, loan guarantees, property (including donated surplus property), cooperative agreements, Interest subsidies, food commodities, direct appropriations, and other assistance. I. We are responsible for complying with the requirements of laws, regulations, and the provisions of contracts and grant agreements related to each of our federal programs and have identified and disclosed to you the requirements of laws, regulations, and the provisions of contracts and grant agreements that are considered to have a direct and material effect on each major federal program; and we have complied, in all material respects, with these requirements. j. We have provided to you our interpretations of any compliance requirements that have varying interpretations. k. We are responsible for establishing and maintaining effective Internal control over compliance requirements applicable to federal programs that provide reasonable assurance that we are managing our federal awards in compliance with laws, regulations, and the provisions of contracts and grant agreements that could have a material effect on our federal programs. Also, no changes Rehmann Robson Page 5 of 5 have been made in the internal control system to the date of this letter that might significantly affect internal control, including any corrective action taken with regard to significant deficiencies, including material weaknesses, reported In the schedule of findings and questioned costs. I. We have made available to you all contracts and grant agreements (including amendments, if airy) and any other correspondence with federal agencies or pass -through entities relating to federal programs. m. We have received no requests from a federal agency to audit one or more specific programs as a major program. n. We have identified and disclosed to you all amounts questioned and any known noncompliance with the requirements of federal awards, including the results of other audits or program reviews. We also know of no instances of noncompliance occurring subsequent to the end of the period audited. o. We have charged costs to federal awards in accordance with applicable cost principles, including amounts claimed or used for matching determined in accordance with relevant guidelines in the Uniform Guidance. p. We have made available to you all documentation related to the compliance requirements, including information related to federal program financial reports and claims for advances and reimbursements. q. Federal program financial reports and claims for advances and reimbursements are supported by the books and records from which the basic financial statements have been prepared (and are prepared on a basis consistent with the schedule of expenditures of federal awards). r. The copies of federal program financial reports provided to you are true copies of the reports submitted, or electronically transmitted, to the respective federal agency or pass -through entity, as applicable. s. We are responsible for and have accurately prepared the summary schedule of prior audit findings to include all findings required to be included by the Uniform Guidance, and we have provided you with all information on the status of the follow-up on prior audit findings by federal awarding agencies and pass -through entities, including all management decisions. t. We have disclosed to you the findings received and related corrective actions taken for previous audits, attestation engagements, and Internal or external monitoring that directly relate to the objectives of the compliance audit, including findings received and corrective actions taken from the end of the period covered by the compliance audit to the date of the auditor's report. u. We are responsible for and have accurately completed the appropriate sections of the Data Collection Form as required by the Uniform Guidance, and we are responsible for preparing and implementing a correction action plan for each audit finding. v. We have disclosed all contracts or other agreements with service organizations and disclosed to you all communications from these service organizations relating to noncompliance at the organizations. w. We have reviewed, approved, and taken responsibility for the financial statements and related notes. x. We have disclosed to you the nature of any subsequent events that provide additional evidence with respect to conditions that existed at the end of the reporting period that affect noncompliance during the reporting period. I l Carps rA' l _ Kenneth Kilgore, A ministra ve a ces Director