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CR 93-183 Designate Auditors 0. I ! " 1 Y !' \ 0 0 ,l:- I I i '. October 27, 1993 o P K \ ~ Council Report #93 -183 -', DESIGNATE AUDITORS FOR THE YEAR 1993 ProDosed Action. Staff recommends adoption of the following motion: Move that KPMG Peat Marwick be 'designated as the City's auditors for the reporting year 1993, ' ' , Adoption of this motion now will allow the audit firm to begin preliminary reviews and prepare audit schedules and confirmations beginning in November, 1993. Overview. The Council has designated Peat Marwick as the City's auditors since 1983. Our working relationship has been very good over the past years, The audits have been thorough and different areas of the City's financial records have received emphasis in succeeding years. Primary Issues to Consider. 0 Has the City's required audit function beenwell served by Peat Marwick? . 0 Are the proposed fees reasonable? 0 An option exists to issue specs and bid the service, SUDportiDl~ Information. 0 Peat Marwick engagement letter. Jo . J . Designate Auditors For The Year 1993 Report 93-183 - Page 2 Analvsis of Issues The initial basic audit fee of $10,500 has risen $7,400 over nine years to the proposed fee of $17,900 for 1992. The proposed fee for 1993 is the same as 1992. In addition, fees totaling $2,200 for special audits or mandated audit work brings the total proposed fee to $20,100. HRA Audit $1,500 Single Audit $ 700 (F ederal mandate) . . . .. '~',~:~~~.":r ~ :,1 . .~1 '. r ~'~C~l . KPMG: Peat Marwick Certified Public Accountants . . 4200 Norwest Center Telephone 612 3412222 Telefax 612 341 0202 90 South Seventh Street' October 22,. 1993 Minneapolis. MN 55402 Mr. John E. Schedler Finance Officer City of Hopkins .' 1010 South First Street . Hopkins, MN 55343 Dear John: We are pleased to submit our engagement letter for the audit of the general purpose financial statements of the City of Hopkins for the year ended December 31, 1993. We will conduct our audit in accordance. with generally accepted auditing standards with the' objective of expressing an opinion on the City's general purpose financial statements as of and for the year ending December 31, 1993. It should be understood that these financial statements are the responsibility of management. In conducting our audit, we will perform tests of the accounting records and such other procedures as we consider necessary in the circumstances to provide a reasonable basis for our opinion on the general purpose financial statements. We will examine, on a test basis, . evidence, supporting the amounts and disclosures in the general purpose financial statements. We will also assess the accounting principles used and significant estimates made by management, as well as evaluate the overall financial statement presentation. We understand that all records, documentation, and information we request in connection with . our audit will be made available to us. . . An audit is designed to provide reasonable assurance of detecting errors and irregularities that are material to your general purpose financial statements. Your internal accounting control structure should provide reasonable assurance, although not absolute assurance, against the possibility of. such errors or irregularities. We will furnish to you . recommendations about your internal control structure we note during our audit. We will also furnish our recommendations about other aspects of your operations in which we observe opportunities for improvement. . Our fees, which will be billed as the work progresses, are based on our standard hourly rates plus reimbursement of our expenses. The following)s a summary of our not to exceed fees for 1993: Billing Date Amount . December 7,' 1993 $5,000 March 21,1993 5,000 April 4, 1994 5,900 April 29, 1994 2.000 Fees and Expenses for Financial $17,900 Statement Audit Single Audit $700 . . HRA Audit 1,500 Member Firm of Klvnveld Peat Marwick, Goerdeler Kp'MG)Peat Marwick Mr. John E. Schedler . October 22, 1993 Page Two '-- . City personnel will prepare required account analyses and pertinent audit schedules in accordance with our prescribed formats and locate documents by agreed upon times. We will provide you in advance with a detailed listing of the information we will need. All schedules, computer listings, etc. will tftie~outtf, be accurately footed, etc. . No significant changes in .the City's operations will occur or unusual accounting problems will arise that would impact the .1993 financial statements. . . New arrangements which the City has entered in 1993 wil1be analyzed for appropriate accounting considerations under generally accepted accounting principles and clearly supported with detailed workpapers. . City personnel will draft the financial statements and footnotes and provide such drafts. to us by an agreed upon date. .. . The City will have available those individuals necessary to answer questions, prepare analyses, etc., that will arise during the course of the work. . Our proposal contemplates that no additional work will be required to satisfy ourselves on significant accounting problems that may. unexpectedly arise during. the course of our . examination. Should such a situation arise, we would discuss it with you before undertaking any additional work. We appreciate ~is opportunity to serve you and will be happy to review this letter with you at your convemence. Please indicate your acceptance and understanding of the contents of this letter by signing and returning the enclosed copy. Very truly yours, SWL:ccb cc: Ms. Caroline Kornmann . .~~ ' " ' "" <'".