CR 91-210 Designate Auditors•
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September 23, 1991 P K
DESIGNATE AUDITORS FOR THE YEAR 1991
Provosed Action.
Council Report #91 -210
Staff recommends adoption of the following motion: Move that KPMG Peat Marwick be
designated as the City's auditors for the reporting year 1991.
Adoption of this motion now will allow the audit firm to begin preliminary reviews
and prepare audit schedules and confirmations beginning in November, 1991.
Overvi W.
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.
o 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.
Supporting Information.
o Peat Marwick engagement letter.
Jo E. Schedler, Finance Director
Designate Auditors For The Year 1991
Report 91 -210
Page 2
Analysis of Issues
The initial basic audit fee of $10,500- has risen $6,900 over eight
years to the proposed fee of $17,400 for 1991. This is a 5.5%
increase over last year.
In addition, fees totaling $2,100 for special audits or mandated audit
work brings the total proposed fee to $19,500.
HRA Audit $1,500
Single Audit $ 600
(Federal mandate)
•
MRN Peat Marwick
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Certified Public Accountants
4200 Norwest Center Telephone 612 341 2222 Telecopier 612 341 0202
90 South Seventh Street
Minneapolis, MN 55402
August 1, 1991
Mr. John E. Schedler
Finance Officer
City of Hopkins
1010 South First Street
Hopkins, Minnesota 55343
Dear John:
We are pleased to submit our engagement letter for our audit of the general purpose
financial statements of the City of Hopkins for the year ended December 31, 1991.
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, 1991 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 and 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 is a summary of our
not to exceed fees for 1991:
Billing Date
December 5, 1991
April 9, 1992
April 23, 1992
May 7, 1992
Total Fees and Expenses
Single Audit (Optional)
HRA Audit
Amount
$ 4,000
5,000
5,400
3,000
1 4
$ 600
$ 1,500
Member Firm of
KP/11l `Peat Marwick
Mr.. John E. Schedler
August 1, 1991
Page Two
Our fee proposal is based upon the following:
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 arise that would impact the 1991 financial
statements.
New arrangements which the City has entered in 1991 will be 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 this opportunity to serve you and will be happy to review this letter
with you or members of the City Council at your convenience.
Please indicate your acceptance and understanding of the contents of this letter by
signing and returning the enclosed copy.
SWL:emh
Enclosures
cc: Kelli Bourhis
Very truly yours,
KPMG Peat Marwick
� � r
Steven W. Laible, Partner