CR 92-222 Designate Auditors For The Year
1 Y
o
G
,r
.
November 2, 1992
o P K \ '"
Council Report #92-222
DESIGNATE AUDITORS FOR THE YEAR 1992
Proposed Action.
Staff recommends adoption of the following motion: Move that KPMG Peat Marwick be designated as
the City's auditors for the reporting year 1992.
Adoption of this motion now will allow the audit firm to begin preliminary reviews and prepare audit
schedules and confirmations beginning in November, 1992.
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 been well served by Peat Marwick?
o Are the proposed fees reasonable?
o An option exists to issue specs and bid the service.
SUDDortine- Information.
o Peat Marwick engagement letter.
~l~~
John E. Schedler, Finance Director
.
.
.
.
Designate Auditors For The Year 1992
Report 92-222
Page 2
Analvsis of Issues
The initial basic audit fee of$IO,500 has risen $7,400 over eight years to the proposed fee of$17,900 for
1992. This is a 2.9% increase over last year.
In addition, fees totaling $2,200 for special audits or mandated audit work brings the total proposed fee
to $20,100.
lIRA Audit
Single Audit
(Federal mandate)
$1,500
$ 700
. .,
KPMG Peat Marwick
.
Certified Public Accountants
4200 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402
Telephone 612 341 2222
Telecopier 612341 0202
October 26, 1992
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
nnancial statements of the City of Hopkins for the year ended December 31, 1992.
We \viU 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
an9- for the year ending December 31, 1992. 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 fmaneial 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 finaneial statement presentation. We
und~rstand 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.
OUf fees, 'Which will he billed as the work :progresses, are based on our standard hourly
rates plus reimbursement of our expenses. The following is a summary of our not to
exceed fees for 1992:
.
Billing Date
Decem ber 7, 1992
March 22, 1993
April 2, 1993
April 30, 1993
Total Fees and Expenses
Single Audit (Optional)
HRA Audit
Amount
$ 5,000
$ 5,000
$ 5,900
$ 2,000
$17,900
--
$ 700
$ 1,500
"-"r"'~'''''~7:'i''''''''''
'. ~'~~j.{~'2~l..t]. ,::"':J ~'~~v~7~ ~~~I ~arwlc" Gosfdewr
.
.
e
, """I'"''''''
KPMGJpeat Marwick
Mr. John E. Schedler
October 26, 1992
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 "tie-out", be accurately footed, etc.
No significant changes in the City's operations will occur or unusual accounting
problems will.mse that would impact the 1992 [mandaI statements.
· New arrangements which the City has entered in 1992 will be analyzed for appropriate
accounting considerations under generally accepted accounting principles and clearly
:ruprfL~Tt~~d \vith detailed v/crkp2.pers.
· 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.
OUf 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 this opportunity to serve you and will be happy to review this letter with you
at your convenience.
Please indicate your acceptance and understanding of the contents of this letter by signing
and returning the enclosed copy.
Very truly yours,
~~
Steven W. Laible, Panner
SWL:tef:cc
cc: Ms. Caroline Kornmann