Res. No. 199-97-10169RESOLUTION NO.199-97-10169
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF SOUTH MIAMI,FLORIDA AUTHORIZING THE CITY
MANAGER TO SIGN THE ENGAGEMENT LETTER RECEIVED FROM
SHARPTON,BRUNSON &COMPANY,P.A.CERTIFIED PUBLIC
ACCOUNTANTS,TO PROVIDE INDEPENDENT AUDIT SERVICES FOR
FISCAL YEAR ENDING SEPTEMBER 30,1997.
WHEREAS,Article IV,Section3E of theCityCharter of southMiamirequires
theCityCommissionto designate a qualified independent Certified Public Accountant
to review,examine andreportonallfiscalmatters;and
WHEREAS,pursuant toResolution#132-95-9681 authorization wasgivento
theCity Manager to enter intoan agreement with Sharpton,Brunson and Co.who
currentlyprovideindependentauditingservices.
WHEREAS,theCity Manager hasreceivedanengagementletterfrom
Sharpton,Brunson and Co.forthe current year audit,and requests authorization from
the City Commission to sign theletter.
NOW THEREFORE BE IT RESOLVED BY THE MAYOR AND CITY
COMMISSION OF SOUTH MIAMI,THAT:
Section 1.Thattheattachedengagementletterdated August 21,1997,ismadea
part of thisResolution.TheCity Manager is authorized tosigntheengagementletter
forfiscalyearendingSeptember30,1997auditserviceswithSharpton,Brunsonand
Company,P.A.
PASSED AND ADOPTED this 16th day of September 16,1997.
layor
CITY CLERK,Rondtta7 Taylor
READ AND APPROVED AS TO FORM:
CITY ATTORNEY,Earl Gallop
COMMISSION VOTE:5-0
Mayor Price:Yea
Vice Mayor Robaina:vYea
Commissioner Oliveros:Yea
Commissioner Bethel:Yea
Commissioner Young:Yea
To:
From:
CITY OF SOUTH MIAMI
INTER-OFFICE MEMORANDUM
and City Commission
L.Dennis Whitt
CityManager
Date:September 12,1997
Re:Agenda Item #_
Comm.Meeting 9-16-97
Independent Audit Services
Sharpton,Brunson &Co.
The attached Resolution authorizes the City Manager to sign and agreement letter with Sharpton,
Brunson &Company,CPA,to provide independent audit services forthe purpose of auditing the
financial statements oftheCityforthe fiscal year October 1,1996 through September 30,1997.
I recommend approval.
MyDocuments/Memo-Mayor &Comm/Resolution-Audit-97
SHARPTON,BRUNSON &COMPANY,P.A.
CERTIFIED PUBLIC ACCOUNTANTS
ONE SOUTHEAST THIRD AVE..SUITE 2100 ONE EAST BROWARD BLVD..SUITE 1110
MIA.VK.FLORIDA 3313 I FORI'LAUDERDALE.FLORIDA 33301
TELEPHONE:(305)374-1574 /FAX:(305)372-8161 TELEPHONE:(954)467-5490/FAX:(954)467-6184
E-MAIL:sbc@netranner.net
August 21,1997
AUG 1 9 1997
L.Dennis Whitt,City Manager £0!MANAGER'S 0FFicr
CITY OF SOUTH MIAMI
6130 Sunset Drive
South Miami,Florida 33143
Dear Mr.Whitt:
This letter sets forth our understanding of the terms and objectives of our
engagement,the nature and scope of the services we will provide,and the related fee
arrangements.
We will audit the Cityof South Miami's (City)financial statements as of and for the
year ended September 30,1997,in accordance with generally accepted auditing
standards,and the standards forfinancial audits contained in Government Auditing
Standards,issued by the Comptroller General of the United States and OMB Circular A-
128,"Single Audits of State and Local Governments";as well as AICPA standards and
procedures and requirements offederaland state agreements and statutory requirements
totheextentrequiredbyapplicableauditing standards.The audit services providedshall
comprisethe preparation oftheComprehensiveAnnualFinancialReportforthe City.
Asa part of our audit,we will consider the City's internal control structure and
assess control risk,as requiredby generally accepted auditing standards,forthe purpose
of establishing abasisfor determining the nature,timing andextentofauditing procedures
necessary for expressing ouropinion concerning the financial statements and notto
provide assurance on the internal control structure.
We will prepareaseparate written report onourunderstandingofthe City's internal
control structureandthe assessment of control riskmade as partof the financial statement
audit.Our report will include:(1)thescopeofour work in obtaining an understanding of
the internal control structureand in assessingthe control risk,(2)the City's significant
internalcontrols or controlstructure including thecontrols established to ensure
compliance with lawsand regulations thathavea material impact onthe financial
statements,and(3)thereportableconditions,includingtheidentificationofmaterial
weaknesses,identified asa result of our work in understanding andassessing control risk.
SHARPTON,BRUNSON &COMPANY,PA.
Page Two
Compliance withlaws,regulations,contracts,and grants applicable to the Cityis the
responsibility of the City's management.Aspartof obtaining reasonable assurance about
whether the financial statements are free of material misstatements,we will perform tests
of City's compliance with certain provisions oflaws,regulations,contracts,and grants.
However,our objective isnottoprovideanopiniononoverall compliance with such
provisions.
We will prepare a separate writtenreportonour test of compliance with applicable
laws and regulations.Thisreport will containa statement ofpositive assurance on those
items which were tested for compliance,negative assurance on those itemsnot tested,and
a description ofall material instances of noncompliance.
At the conclusion of the engagement,the City's management will provide tousa
representative letterthat,amongotherthings,will confirm management's responsibility for
the preparation of the financial statements inconformitywithgenerally accepted
accounting principles,the availability offinancial records and related data,the
completeness and availabilityofallminutesofboardofdirectorsandcommitteemeetings,
and the absence of irregularities involving management or those employees who have
significant roles in the control structure.
We understand that our reports on the internal control structure as part of the
financial audit and on compliance withlaws and regulations are intended for the
information of the audit committee,management,and others withinCityof South Miami.
This restriction is not intended tolimit the distribution of this report,which isa matter of
public record.
A timetable to complete the engagement should be discussed and agreed upon as
soon as possible.We will require between three tofour weeks to complete fieldwork.A
draft of our report will be rendered within ten business days following completion offield
work.Final reports shall be issued no later than ten business days following our review of
the preliminary draft of the financial statements unless unexpected factors are
encountered.
This estimate may not be achievable if problems are encountered with regard to the
condition of the accounting records or their completeness.If such problems are
discovered,we will discuss the matter withyou immediately in order that we can reach an
agreement as to the resolution of the situation.
SHARPTON,BRUNSON &COMPANY,P.A.
Page Three
Our fee for the above services will be $28,000,plus out-of-pocket costs not to
exceed $600.The Cityof South Miami will be billed monthly as the work progresses with
payment due upon presentation.This Agreement shall commence as of the date first
written above,for the purpose of auditing the financial statements of the Cityfor the fiscal
year October 1,1996 through September 30,1997 with the City reserving the rightto
extend this Agreement on an annual basis for four (4)additional fiscal years subject to
mutual agreement by the Auditor and the City.
May we remind you that the responsibility for the preparation of financial statements
including adequate disclosure is that of the management of the company.This includes
the maintenance of adequate accounting records and internal controls,the selection and
application of accounting policies,and the safeguard of the assets of the company.As part
of our audit process,we will request from management written confirmation concerning
representation made tousin connection with the audit.
Welookforwardto full cooperation from your staff and we trust that they will make
available to us whatever records,documentation and other information requested in
connection with our audit.
Please sign and return the enclosed copy of this letter to indicate that itisin
accordance with your understanding of the arrangements for our audit of the financial
statements.
Accepted:
Title:q////,rv^jr ra «
Date:|//J/V
Yours verytruly,
SHARPTON,/BRUNSON &COMPANY,P.A.
Anthony fi,CPA
SHARPTON,BRUNSON &COMPANY P.A.
FEE EXPLANATION AND AGREEMENT
A.Fee Structure
Fromtimetotime,weget inquiries concerning ourmethod of charging fees.Thisis
understandablesinceeachCPA firm handles feesalittledifferentlyandsomenewclientsmay
not have used a CPA before.This letter is our toolfor communicating our fee structure to
our clients and other interested parties.
B.Basics
Alltimespentbypartners of Sharpton,Brunson&Companyortheir staff membersonyour
matters including,butnotlimitedto(a)accounting;(b)reviewwork;(c)conferences;(d)
report preparation;(e)research;(f)telephone calls;(g)settlement negotiations;(h)
consulting;or(i)taxpreparationandresearchwillbebilledattheapplicablehourlyrates.
Each staff member maintainsaccuratetimerecords,andclientsarebilled based onactualtime
spentontheirbehalf.Sincewesellno products andacceptnocontingentfees,ourtimeand
expertise is our only source of income.
C.Hourly Rates
A standard hourlyrateissetforeachstaffmemberbasedonthecriteria of experienceand
ability.If noextenuating circumstances exist,clients arebilledusingstandardhourlyrates
multipliedbytheactualhoursworked.
Hourly ratesvary substantially among staff members —currently fromalowof$55toa high
of $165perhour.Accordingly,it makes sensetouseless experienced staff members to
performroutineaccountingproceduresto achieve thelowesthourlyrate.
D.Out-of-Pocket Expenses
Basicoverheadcostsare included inthe hourly rates.Expenses specifically onbehalfofa
client ischargedtothem.Travel,postage,copies,longdistance calls,courier services,etc.
are included inthiscategory.
E.Billings
Billingswill be made monthly,but less frequent for limited activity,and are payable
in full upon request.If the account has not been paid within 30 days from the date
of invoice,a finance/interest charge of 10%per annum on the unpaid balance could
be charged.It is understood that Sharpton,Brunson &Company has the rightto
defer rendering further services until payment is received on past-due billings.If
action is instituted to collect accountant's fees and cost pursuant to this Agreement,
the undersigned client agrees to pay such sum as the court may fix as attorney's
fees and costs.
Retainer
A retainer in the sum of $5,000 isto be paid before work proceeds.Initial services
rendered are to be first applied to the retainer fee.
Termination
It is understood between the parties that this Agreement could be terminated for
good cause by either party upon thirty days of written notice.
SHARPTON,BRUNSON &COMPANY,P.A.
By:.Dated:
r.Arithony Brunson
4jTj_
The undersigned acknowledges readingand understanding the foregoing Fee Explanation
and Agreement,agrees tothe terms thereof,and acknowledges receiving a copy thereof.
CITY OF SOUTH MIAMI
Dated
Mr.L.Dennis Whitt