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kennedy and coe 1994RL MICHAEL BEAM. C.P.A. CHIEF EXECUTIVE OFFICER P.O. BOX 1100. SAMNA. KS 117 O 4100 OFFICES KANSAS: ANTHONY COLEY CONCORDIA GARDEN CRY OOOOI A D GREAT BEND MMYSVILLE OVERLAND PARK PRK7 RALINA SCOTT CRY SMITH CENIEN TOPEKA WICHITA COLORADO: LAMAR WRAY MONTE VISTA OKLAHOMA NEBRASKA: ALVA M00001L KENNEDY AND COE., LLC CERTIFIED PUBLIC ACCOUNTANTS UNITED BUILDING P.O. BOX 1100 SALINA, KANSAS 87002.1100 PHONE: (9131828-1881 FAX: (913) 828-8371 The Honorable Mayor and The City Commissioners City of Salina Salina, Kansas September 21, 1994 KUMIS U. SEMENS C.P.A. MEMBOH"HARGE ALLEN WEBRER, C.P.A, MEMBER GERALD L HUNTER CAA.. MEMBER DALE A MWEL CPA., MEMBER SHANNON L. MICHANAN, C.P.A. MEMBER SHARON K. SMITH. C.P.A.. MEMBER GAM L RINGERS J.D.- C.P.A.. MEMBER DAVID J. MILLS C.P.A.. PRINCIPAL JOHN W. POOR, C.P.A. IRETHIGH L.M. MEM, C.P.A. IREVRDH PAULA MITT, C.PA (RETRED) MLEY E. JCHNS C.PA(RETIRED) CON P. DIEDERMK CDA (RETIRED) ROBERT D. WILBUR. C.PA(RERRED) We propose to audit the general purpose financial statements of the City of Salina, Kansas as of and for the year ended December 31, 1994. Also, the financial statements document will include the following additional information that will be subjected to the auditing procedures applied in our audit of the general purpose financial statements. 1. Schedule of Receipts, Expenditures, and Changes in Unencumbered Cash Compared with Budget (Statutory Basis) - By Fund 2. Combining and Individual Fund and Account Group Statements - By Fund Type 3. Schedule of Federal Financial Assistance We understand the Finance Department will prepare a Comprehensive Annual Financial Report (CAFR) for the City for the year 1994. Such report would include, in addition to the general purpose financial statements and additional information described above, certain statistical information and an introductory section. Such statistical information and the introductory section will not be subjected to auditing procedures. The scope of our audit will include all funds of the City except: Salina Airport Authority Salina Housing Authority Salina - Saline County Board of Health Saline County - City Building Authority It is our understanding that the above organizations have contracted for separate audits of their operations. The Salina Airport Authority and the Salina Housing Authority are considered component units of the City for financial reporting purposes under the provisions of Statement No. 14 of the Governmental Accounting Standards Board, 'The Financial Reporting Entity." Accordingly, the financial information of the Salina Airport Authority and the Salina Housing Authority will be included in the City's CAFR for the year 1994. Since these organizations have contracted for separate audits, we will make reference to the reports of the other auditors in our opinion on the City's financial statements. MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 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 September 21, 1994 Page 2 Salina -Saline County Board of Health and Saline County -City Building Authority are joint ventures under the provisions of Statement No. 14. Accordingly, appropriate disclosures are to be included in the notes to financial statements regarding these entities. In addition, the Salina Public Library, is considered a related organization under the provisions of Statement No. 14 which will require additional disclosures in the notes to financial statements. Our audit will be a Single Audit conducted in accordance with generally accepted auditing standards; the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the Single Audit Act of 1984; the provisions of OMB Circular A-128, "Audits of State and Local Governments;' and the Kansas Municipal Audit Guide, and will include tests of the accounting records of the City of Salina and other procedures we consider necessary to enable us to express an opinion as to whether the financial statements are fairly presented, in all material respects, in conformity with generally accepted accounting principles and to report on the Schedule of Federal Financial Assistance and on the City's compliance with laws and regulations and its internal controls as required for a Single Audit. It is our understanding that the funds subject to OMB Circular A-128 requirements for 1994 are (1) Environmental Protection Agency Grant - Construction Grant for Wastewater Treatment Works, (2) Community Development Block Grant - Small Cities Program, (3) Economic Development Administration Grant - Boundary Roads at KSU-Salina, (4) Certain Police Grants, (5) Fair Housing Assistance, and (6) National Endowment for the Arts - Museum. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, creditors, and financial institutions. At the conclusion of our audit, we will also request certain written representations from management about the financial statements and related matters. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. Also, we will plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. As required by the Single Audit Act of 1984, our audit will include tests of transactions related to federal assistance programs for compliance with applicable laws and regulations. However, because of the concept of reasonable assurance and because we will not perform a detailed examination of all transactions, there is a risk that material errors, irregularities, or illegal acts, including fraud and defalcations, may exist and not be detected by us. We will advise you, however, of any matters of that nature that come to our attention, and will include such matters in the reports required for a Single Audit. We understand that you will provide us with the basic information required for our audit and that you are responsible for the accuracy and completeness of that information. We may advise you about appropriate accounting principles and their application and may assist in the preparation of your financial statements, but the responsibility for the financial statements remains with you. This responsibility includes the maintenance of adequate records and related internal control structure policies and procedures, the selection and application of accounting principles, and the safeguarding of assets. The Honorable Mayor and The City Commissioners City of Salina September 21, 1994 Page 3 We anticipate that management and employees will cooperate in any way reasonable in furnishing information, contracts, and other documents, preparing schedules and other analyses, and locating supporting documents in connection with the audit. 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. We also understand that the Finance Department will prepare the financial statements and supplemental information, complete with applicable notes to financial statements, in a format suitable for publication. Management has asked us to give you a maximum fee for the audit of the financial statements for the year ended December 31, 1994, based on the assumption that no accounting or bookkeeping services are required in connection with the engagement and our services are comprised of auditing the financial statements as prepared by the Finance Department. We anticipate that the financial statements and supplemental information will be ready for publication, complete with appropriate footnotes and other disclosures required by generally accepted accounting principles for governments as of April 15, 1995, at which time we will commence our final field work. 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 $25,000. In the event that circumstances would arise that would cause management to request additional services in connection with the audit (such as preparation of requested schedules or analyses, preparation of estimates required for the financial statements and related adjustments, application of accounting principles, drafting of individual financial statements or notes to financial statements), such services will be provided at our standard hourly rates; the average hourly rate charged for such requested services will not exceed $75.00. We will give the assistance needed to help the Finance Department personnel perform any of these types of tasks; however, such assistance will be considered outside the maximum audit fee. We appreciate the opportunity to be of service to the City of Salina and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. Very truly yours, Certified Pu c Accountants os The Honorable Mayor and The City Commissioners City of Salina September 21, 1994 Page 4 This letter correctly sets forth the understanding of the City of Salina, Kansas. Accepted this day of 1994. STATE OF KANSAS DEPARTMENT OF ADMINISTRATION DIVISION OF ACCOUNTS AND REPORTS July 14, 1994 KENNEDY & COE LLC PO BOX 1100 SAL -INA KS 67402-1100 In regard to the audit of: CITY OF SALINA The following described audit report has been filed as a public record in the office of the Director of Accounts and Reports as required by K.S.A. 75-1124. Audit Period (Year Ended): 931231 Date Received in This Office: 940714 Certified Public Accountant in Charge of Audit: DAVID J MILLS CPA ID (Cert") No.. 2682 Very truly yours, James R. Cobler, Director Division of Accounts and Reports by Chief, Municipal Accounting Section This copy to be attached to voucher and filed with clerk of municipality. AR -102 (10~1^-87) R. MCDMET. BEATR, C.PA MEF EXECUTIVE OFFIMR P.O. BOX 1100, $AUNk 0 67�1100 OFFICES IORmS D. BEARERS, C.PA KANSAS ANRIDIIY CONCORDM COIHY OMOFNOm OOO BEND 1AUNAVILLE U NNTT PRATT SAUNA SDOROm PARER TOPEKA WCHM WICHITA COLORADO: U WR w y MONTE VISTA OKLAHOMA NEBRASKA: kVA MCCOCK KENNEDY AND COE, LLC CERTIFIED PUBLIC ACCOUNTANTS IORmS D. BEARERS, C.PA UNITED SUILOINO P.O. BOX 1100 MEMBERi3QMROE SAUNA, KANSAS 87402-1100 PHONE: (913) 825-1581 ALLEN WEBBER CRA, MEMBER FAX: (313) 825-5371 OEMLD L MINTER. C.PA. MEMBER DLLE A I&ig7fl, C.P.A, MEMBER RIVN(ONL BU . OPAC.PA,MEMBER K BJTIH, MEMBER GARYSINRL GARY L ROWERS. J.D., C.PA, MEMBER . JO.. R. BARTON FARMER, PRINCIPAL DAWDJ. MILLS, C.PA. PRBCIPAL July 12, 1994 _ JOHN W. PC;O C.PA (RETIRED) LAL MBR¢, C.PA (RETIRED) PILL& MOR, C.PA (RETIRED) ADLEY E. JOWSON CAA (RETIRED) DON P. 0190MCR C.PA (RETIRED) ROBERT D. WILBUR, C.PA(RETIRED) Municipal Accounting Section Department of Administration Division of Accounts and Reports Room 253, Landon State Office Bldg. Topeka, KS 66612-1248 �'nPV Enclosed please find two copies of the Comprehensive Annual Financial Report of the City of Salina, Kansas, for the year ended December 31,.1993, and our reports thereon. We understand one copy of the CAFR will be forwarded to the National Clearinghouse for Single Audit Reports. Very truly yours, Certified Public Accountant f �dL� /LiI7��kY��ILii7[tiC(T Enc. Copy: Mr. Robert K. Biles Director of Finance 300 West Ash Salina, KS 67401 MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS AGENDA SECTION: NO. 8 CITY OF SALMA REQUEST FOR COMMISSIONACTION ATING DEPARTMENT: Finance 4:00 P.M. ITEM: NO. Robert K. Biles 2 BY: ,F'� BY Resolution Number 94-4798, 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, 1994. Kennedy and Coe has presented the City with a proposal to audit; the 1994 financial statements. The proposal "reflects the work required for Kennedy. and Coe to give an opinion on - our financial statements when presented. -in accordance with generally accepted accounting principles (GAAP). Under' this proposal, City staff will be responsible for the preparation of :numerous workpapers for the auditors. City staff will also be responsible for the preparation of GAAP and statutory basis financial statements and the accompanying footnotes. The proposal establishes a maximum fee of $25,000. Should city staff require 10 assistance in preparation of some schedules or footnotes, Kennedy and Coe will perform the work at a rate not ,to exceed $75 per hour. As this is outside the audit fee, we will do our best to minimize the time required. Kennedy and Coe's proposal is attached. Kennedy and Coe representatives will be in attendance to discuss their proposal. Recommended Action Adopt Resolution Number 94-4798, authorizing the Mayor to execute an agreement between the City of Salina and Kennedy and Coe for an audit of ,the ,+ 1994 financial statements in an amount not to exceed $25,000. MOTION BY - COMMISSION ACTION SECOND BY RESOLUTION NUMBER 94-4798 U A RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE AND THE CITY CLERK TO ATTEST AN AGREEMENT BETWEEN THE CITY OF SALINA, ! KANSAS AND KENNEDY AND COE, CERTIFIED PUBLIC ACCOUNTANTS, FOR, AN AUDIT OF CITY RECORDS FOR THE YEAR ENDING DECEMBER 31, 1994,; ,I FOR A COST NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS ($25,000). it BE IT RESOLVED by the Governing Body of the City of Salina, Kansas: r , Section 1. That the Mayor and City Clerk of the City of Salina, Kansas are hereby authorized to execute an agreement between the City ofj I� Salina, Kansas and Kennedy and Coe, Certified Public Accountants, for ani Ii audit of city records for the year ending December 31, 1994, at a cost not tol exceed twenty-five thousand dollars ($25,000). Adopted by the Board of Commissioners and signed by the Mayor this! 26th day of September, 1994. n LJ (SEAL) ATTEST: Judy D. Long, City Clerk h ;I u I 0 Joseph A. Warner, Mayor 0. MX11416 EEATT V. C.P.A. EKECUIIVE OMKIR •CMEE P.O. BOK 1100. SAUMA. RE E1E01.1100 OFFICES KANSAS: ANTgMY COLEY CONCORDIA GAIOEM CTI GOOOUMB GREAT WHO MARYSMS OVERLAND PAIR PRATT SAUNA SCOTt CRY SYNN CEM W TOM" WRSMA COLORADO IAMAA WRAY MOMS VISTA OKLAHOMA: NEBRASKA &VA MCCOOK KENNEDY AND COE, CERTIFIED PUBLIC ACCOUNTANTS UNITED BUILDING P.O. BOK 1100 SAUNA, KANSAS 47407-1100 PHONE: 01171475.1561 FAX : 14/51475.5571 The Honorable Mayor and The City Commissioners City of Salina Salina, Kansas September 21, 1994 LLC RUM1 D. SUNK C.PA MEMBRLINCNAMB ALL FN LYDERL C.P.A. MEMI Nt GERALD L HUNTER, CJA.. MEMSM DALE A. MRIGM C.P.A.. MEMSR SNANNRI L. MICHARM, C.P.A.. MEMBER SIMRDN E. SMNII. CAA., MEMBER GARY L. RODGM J.D., C.PA. MEMMR DAVID J. MAZE. C.P.A., PMNCIPAL JOHN W. POOL C.PA. RETIER L.M. MERTE. C.P.A. IREnRRX PAULA MOT. C.PA (MVREC( ADM E. JOHMWK, CAA (RE1RW) CON P. REGERICH. C.PA (RETOIER ROSEM D. WILRIII. C.PA (MITRED) We propose to audit the general purpose financial statements of the City of Salina, Kansas as of and for the year ended December 31, 1994. Also, the financial statements document will include the following additional information that will be subjected to the auditing procedures applied in our audit of the general purpose financial statements. Schedule of Receipts, Expenditures, and Changes in Unencumbered Cash Compared with Budget (Statutory Basis) - By Fund • 2. Combining and Individual Fund and Account Group Statements - By Fund Type 3. Schedule of Federal Financial Assistance We understand the Finance Department will prepare a Comprehensive Annual Financial Report (CAFR) for the City for the year 1994. Such report would include, in addition to the general purpose financial statements and additional information described above, certain statistical information and an introductory section. Such statistical information and the introductory section will not be subjected to auditing procedures. The scope of our audit will include all funds of the City except Salina Airport Authority Salina Housing Authority Salina - Saline County Board of Health Saline County - City Building Authority It is our understanding that the above organizations have contracted for separate audits of their operations. The Salina Airport Authority and the Salina Housing Authority are considered component units of the City for financial reporting purposes under the provisions of Statement No. 14 of the Governmental Accounting Standards Board, 'The Financial Reporting Entity." Accordingly, the financial information of the Salina Airport Authority and the Salina Housing Authority will be included in the City's CAFR for the year 1994. Since these organizations have contracted for separate audits, we will make reference • to the reports of the other auditors in our opinion on the City's financial statements. MEMBERS OF: AMERICAN INSTrrVrE OF CERTIFIED PUBLIC ACCOUNTANTS SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DNISION FOR CPA FIRMS The Honorable Mayor and The City Commissioners • City of Salina September 21, 1994 Page 2 Salina -Saline County Board of Health and Saline County -City Building Authority are joint ventures under the provisions of Statement No. 14. Accordingly, appropriate disclosures are to be included in the notes to financial statements regarding these entities. In addition, the Salina Public Library, is considered a related organization under the provisions of Statement No. 14 which will require additional disclosures in the notes to financial statements. Our audit will be a Single Audit conducted in accordance with generally accepted auditing standards; the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the Single Audit Act of 1984; the provisions of OMB Circular A-128, "Audits of State and Local Governments;" and the Kansas Municipal Audit Guide, and will include tests of the accounting records of the City of Salina and other procedures we consider necessary to enable us to express an opinion as to whether the financial statements are fairly presented, in all material respects, in conformity with generally accepted accounting principles and to report on the Schedule of Federal Financial Assistance and on the City's compliance with laws and regulations and its internal controls as required for a Single Audit. It is our understanding that the funds subject to OMB Circular A-128 requirements for 1994 are (1) Environmental Protection Agency Grant - Construction Grant for Wastewater Treatment Works, (2) Community Development Block Grant - Small Cities Program, (3) Economic Development Administration Grant - Boundary Roads at KSU-Salina, (4) Certain Police Grants, (5) Fair Housing • Assistance, and (8) National Endowment for the Arts - Museum. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, creditors, and financial institutions. At the conclusion of our audit, we will also request certain written representations from management about the financial statements and related matters. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. Also, we will plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. As required by the Single Audit Act of 1984, our audit will include tests of transactions related to federal assistance programs for compliance with applicable laws and regulations. However, because of the concept of reasonable assurance and because we will not perform a detailed examination of all transactions, there is a risk that material errors, irregularities, or illegal acts, including fraud and defalcations, may exist and not be detected by us. We will advise you, however, of any matters of that nature that come to our attention, and will include such matters in the reports required for a Single Audit. We understand that you will provide us with the basic information required for our audit and that you are responsible for the accuracy and completeness of that information. We may advise you about appropriate accounting principles and their application and may assist in the preparation of your financial statements, but the responsibility for the financial statements remains with you. This responsibility includes the maintenance of adequate records and related internal control structure policies and procedures, the selection and application of accounting principles, and the safeguarding 0 of assets. The Honorable Mayor and The City Commissioners • City of Salina September 21, 1994 Page 3 We anticipate that management and employees will cooperate in any way reasonable in furnishing information, contracts, and other documents, preparing schedules and other analyses, and locating supporting documents in connection with the audit. 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. We also understand that the Finance Department will prepare the financial statements and supplemental information, complete with applicable notes to financial statements, in a format suitable for publication. Management has asked us to give you a maximum fee for the audit of the financial statements for the year ended December 31, 1994, based on the assumption that no accounting or bookkeeping services are required in connection with the engagement and our services are comprised of auditing the financial statements as prepared by the Finance Department. We anticipate that the financial statements and supplemental information will be ready for publication, complete with appropriate footnotes and other disclosures required by generally accepted accounting principles for governments as of April 15, 1995, at which time we will commence our final field work. 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 $25,000. •In the event that circumstances would arise that would cause management to request additional services in connection with the audit (such as preparation of requested schedules or analyses, preparation of estimates required for the financial statements and related adjustments, application of accounting principles, drafting of individual financial statements or notes to financial statements), such services will be provided at our standard hourly rates; the average hourly rate charged for such requested services will not exceed $75.00. We will give the assistance needed to help the Finance Department personnel perform any of these types of tasks; however, such assistance will be considered outside the maximum audit fee. We appreciate the opportunity to be of service to the City of Salina and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. Very truly yours, Certified Pub is Accountants 0 The Honorable Mayor and The City Commissioners • City of Salina September 21, 1994 Page 4 This letter correctly sets forth the understanding of the City of Salina, Kansas. Accepted this _ day of 1994. Mayor - City of Salina, Kansas City Clerk - City of Salina, Kansas • 0