8.4 Agr 1990 Audit CITY OF SALINA
REQUEST FOR COMMISSION ACTION DATE TIME
10/15/1990 4:00 P.M.
AC_z~F~N_DA SECTION: Administration ORIGI~_ATING DEPARTMENT: APPROVED FOR
NO.- 8 Department of Finance AGENOA:
ITEM
By: Robert K. Biles ~ BY: ~
Resolution Number 90-4240, authorizing the Mayor to execute an agreement
between the City of Salina and Kennedy and Coe, Certified Public Accountants,
for an audit of City records for the year ending December 31, 1990.
Kennedy and Coe has presented the City with a proposal to audit the 1990
financial statements. As you will note, two amounts are given; one if City staff
prepares the financial statements, $24,000, and another if Kennedy and Coe
prepares the financial statements, $26,500. Due to the price differential and the
desire on our part to be directly involved in the formal financial statement
presentation, we plan to put in the extra work needed to prepare the financial
statements; however, due to the extra work involved, it may be better to
authorize the higher amount with the understanding that staff will plan to meet
the lower amount. The attached resolution has been prepared with the higher
amount.
We are in the process of determining the exact nature and time requirements of
the additional audit work needed to upgrade our financial statement presentation
to standards established by the Governmental Accounting Standards Board. This
audit work would concentrate on establishing a December 31, 1990 balance sheet
which will give us a good beginning point for meeting the reporting standards
with the 1991 financial statements. We anticipate having those details worked out
and a separate proposal available for your consideration at the November 5th
Commission Meeting.
Recommended action I
Accept the proposal from Kennedy and Coe to audit the 1990 financial statements
and adopt Resolution Number 90-4240, authorizing the Mayor to sign the contract.
COMMISSION ACTION
MOTION BY SECONO BY
TO:
KENNEDY aND COE
R. MICHAEL BEATTY. C.P.A. CERTIFIED PUBLIC ACCOUNTANTS R MICHAEL BEATTY. C.P.A.
MANAGING PARTNER PARTNER-iN-CHARGE
PO. BOX 1100. BALINA. KB B7402-1100 UNITED BUILDING P. O. BOX 1100
SALINA, KANSAS 67402-1 1 O0 ROBERT D. WILBUR. C.P.A.. PARTNER
OFFICES DON P. DIEDERIC,. C.P.A.. PARTNER
913 - 825-1561
KANSAS: SCOTT CITY ALLEN WEBBER. C.P.A., PARTNER
ANTHONY SMITH CENTER FAX 913-825-5371 GERALD L HUNTER, C.P.A., PARTNER
COLBY WICHITA KURTIS G. SIEMERS. CPA, PARTNER
CONCORDIA NEBRASKA: DALE A. HEUSZEL. C,P A. PARTNER
GARDEN CITY MCCOOK SHANNON L. BUCHANAN. C.P.A.. PARTNER
GOODLAND OKLAHOMA: October 11, 1990 B.^RO... SM,T..C.PA.. RART.ER
GREAT BEND
ALVA
MABYSVILLE COLORADO: R. BARTON FARMER. PRINCIPAL
GARY L. RODGERS. J.D.C.P.A.. PRINCIPAL
PRATT LAMAR
DAVID J. MILLS. C.P.A.. PRINCIPAL
SALINA WESTMINSTER
WRAY
RALPH E. REITZ. C.P A (RETIRED)
JOHN W. POOS. C.P.A. {RETIRED)
The Honorable Mayor E.T. SHEA. C.P.A. (RETIRED)
and ~he City Commissioners L.M. ME.TZ. C.P.A.<RET,REB,
PAUL A. MOTT. C.P.A. (RETIRED)
City of Saline ADLEY e. JOHNSON. C.P.A. (RETIRED,
Salina, Kansas
We propose to audit the financial statements of the City of Saline, Kansas,
for the year 1990 listed on Appendix A. Our audits will be made in accordance
with generally accepted auditing standards adopted by the American Institute
of Certified Public Accountants, the Kansas Minimum Standard Audit Program and
the requirements of Office of Management and Budget Circular A-128, and will
include our examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. In addition, supplemental
information (as listed in Appendix A), presented for the purpose of additional
analysis and not a required part of the basic financial statements, will be
subjected to the audit procedures applied in the audit of the basic financial
statements.
It is our understanding that the funds subject to OMB Circular A-128
requirements for 1990 are 1) Wastwater Grant (subject to grant award and 1990
drawdow~ is expected to be $150,000) and 2) Community Development Block Grant
Small Cities Program - Housing Rehabilitation.
The scope of our audit will include all funds of the City except:
Salina Arts Commission
Saline Housing Authority
Salina- Saline County Board of Health
Saline County - City Building Authority
Salina Airport Authority
Firemen's Relief Association
Saline Public Library
It is our understanding that the above organizations have contracted for
separate audits of their operations.
The objective of our engagement is the completion of the foregoing audits and,
upon their completion and subject to their findings, the rendering of our
MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND
SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE
SECTION OF THE AICPA DIVISION FOR CPA FIRMS
The Honorable Mayor
and The City Commissioners
City of Salina
October 11, 1990
Page 2
reports. As you know, the financial statements are the responsibility of the
management of the City who are primarily responsible for the data and
information set forth therein, as well as for the maintenance of an appropriate
internal control structure (which includes adequate accounting records and
procedures to safeguard the City's assets.). Accordingly, as required by
generally accepted auditing standards, our procedures will include obtaining
written confirmation from management concerning important representations which
we will rely upon.
As also required by generally accepted auditing standards, we will plan and
perform our audit to obtain reasonable, but not absolute, assurance about
whether the financial statements are free of material misstatement.
Accordingly, any such audit is not a guarantee of the accuracy of the
financial statements and is subject to the risk that errors, irregularities,
or illegal acts, if they exist, might not be detected. If we become aware of
any such matters during the course of our audit, we will bring them to your
attention. Should you then wish us to expand our normal auditing procedures,
we would be pleased to work with you to develop a separate engagement for that
purpose.
Our fee for services rendered for the engagement described in the preceding
paragraphs will be computed at our standard billing rates. However, our fee
for this engagement will not exceed the applicable maximum fee amount shown
below.
Financial statements, notes
and supplemental information Maximum
drafted by Fee Amount
A. Kennedy and Coe $26,500
B. Director of Finance of the City $24,000
If our charges at standard rates are less than the applicable fee, you will be
charged the lesser amount. Billings will be rendered for payment on a monthly
basis so that you may readily relate our charges to the work performed. Both
maximum fee amounts are based on the assumption that the City will obtain the
appropriate waiver from financial statements and reports prepared in
accordance with generally accepted accounting principles for the year ending
December 31, 1990. In the event laws are enacted or the State Municipal
Accounting Board makes changes in the audit requirements for Kansas
municipalities, which in our judgment materially increases the time required
to perform the services set forth in this contract, we reserve the right to
renegotiate the maximum fee with the City Commissioners.
In order to facilitate the efficient conduct of our work, we will provide the
Director of Finance our requirements for audit documentation, schedules and
analyses, and develop a schedule for when such information is to be available.
The Honorable Mayor
and The City Commissioners
City of Salina
October 11, 1990
Page 3
We will be happy to discuss any aspects of this proposal with you at your
convenience. If you are in agreement with the terms of this letter, please
sign the original and return it for our files. The copy is for your files. We
appreciate the opportunity to continue to work with you.
Very truly yours,
certified Phblic Accountants
Accepted this ~ day of , 1990
Mayor City of Salina, Kansas
City Clerk - City of Salina, Kansas
CITY OF SALINA
SALINA, KANSAS
Appendix A
FINANCIAL STATEMENTS TO BE AUDITED BY KENNEDY AND ¢OE
FOR THE YEAR ENDED DECEMBER 31, 1990
I. THE FOLLOWING FINANCIAL STATEMENTS KRE PRESENTED ON THE CASH BASIS,
MODIFIED BY RECORDING EXPENDITURES INCURRED BUT NOT PAID AND PURCHASE
COMMITMENTS
SUMMARY STATEMENT OF RECEIPTS, EXPENDITURES, AND BALANCES BY FUNDS AND
COMPARISON OF CASH BALANCES WITH ENCUMBRANCES
STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH
BALANCES COMPARED WITH BUDGET
NOTES TO FINANCIAL STATEMENTS
II. SUPPLEMENTAL INFORMATION TO THE BASIC FINANCIAL STATEMENTS LISTED ABOVE
COMPOSITION OF ENDING CASH BALANCES
COMPARISON OF GROSS CASH BALANCES WITH DEPOSITORY SECURITY
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
III. THE FOLLOWING FINANCIAL STATEMENTS ARE PRESENTED IN CONFORMITY WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
SEPARATE FINANCIAL STATEMENTS WATER
AND SEWERAGE DEPARTMENT
BALANCE SHEET
STATEMENT OF INCOME
STATEMENT OF CONTRIBUTED CAPITAL AND RETAINED EARNINGS
STATEMENT OF CASH FLOWS
NOTES TO FINANCIAL STATEMENTS