HomeMy Public PortalAbout2002-06 Authorizing Agreement with Rachlin, Cohen and Holtz, LLP for Auditing ServicesRESOLUTION NO. 2002-6
A RESOLUTION OF THE VILLAGE OF KEY BISCAYNE,
FLORIDA; AUTHORIZING THE VILLAGE MANAGER TO
APPROVE THE ATTACHED AGREEMENT ON BEHALF OF
THE VILLAGE WITH RACHLIN, COHEN & HOLTZ, LLP
FOR AUDITING SERVICES; PROVIDING FOR AN
EFFECTIVE DATE.
NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF KEY
BISCAYNE AS FOLLOWS:
Section 1. Rachlin, Cohen & Holtz, LLP will audit the general purpose financial
statements of the Village as of and for the fiscal years ended September 20, 2002.
Section 2. That the objective is to provide management with reasonable, but not absolute,
assurance that assets are safeguarded against loss from unauthorized use of disposition, that
transactions are executed in accordance with management's authorization and recorded properly to
permit the preparation of general purpose financial statements in accordance with generally accepted
accounting principles.
Section 3. That the Village Manager is hereby authorized to execute the attached
Agreement, on behalf of the Village, with Rachlin Cohen & Holtz, LLP, Certified Public
Accountants & Consultants in a letter dated
Section 4. That the Agreement, in substantially the form attached, is hereby approved
and the Village Manager, Village Clerk and the Village Attorney, in their respective capacities are
authorized and directed to execute the Agreement on behalf on the Village and are authorized to take
any and all action necessary to immediately implement all of the purposes and intent of this
Resolution and attached Agreement and are authorized to make revisions to such agreement as are
deemed necessary and proper for the best interests of the Village.
,Section 5. This resolution shall take effect immediately upon adoption.
PASSED AND ADOPTED this 12th day of February , 2002.
T:
CONCHITA H. ALVAREZ, CMC, VILLAGE
APPROVED AS TO FORM AND LEGAL S
RICHARD JAY WEISS, VILLAGE ATTORNEY
MAYOR JOE I. RASCO
02/07/2002 10:57 3053776331
RACHLIN COHEN HOLTZ PAGE 02
Rachlin Cohen & Holtz LLP
Certified Public Accountants dr Consultants
February 5, 2002
Mr. Sam Kissinger, Village Manager
Village of Key Biscayne
85 West McIntyre Street
Key Biscayne, Florida 33149
Dear Sam:
We are pleased to confirm our understanding of the services we are to provide to the Village of Key
Biscayne, Florifa (the Village) for the year ended September 30, 2002. We will audit the financial
statements of the Village as of and for the year ended September 30, 2002. We understand that the
financial statements will be presented in accordance with the financial reporting model in effect prior to
that described in GASH Statement No. 34. Also, the document we submit to you 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 expenditures of state financial assistance.
Audit Objectives
The objective of our audit is the expression of an opinion as to whether your financial statements are
fairly presented, in all material respects, in conformity with accounting principles generally accepted in
the United States and to report on the fairness of the additional information referred to in the first
paragraph when considered in relation to the financial statements taken as a whole. The objective also
includes reporting on -
• Internal control related to the financial statements and compliance with laws, regulations, and the
provisions of contracts or grant agreements, noncompliance with which could have a material
effect on the financial statements in accordance with Government Auditing Standards.
• Internal control related to major programs and an opinion (or disclaimer of opinion) on
compliance with laws, regulations, and the provisions of contracts or grant agreements that could
have a direct and material effect on each major program in accordance with the Florida Single
Audit Act and Chapter 10.550, Rules of the Auditor General.
The reports on internal control and compliance will each include a statement that the report is intended for
the information and use of the Village Council, management, specific legislative or regulatory bodies,
state awarding agencies, and if applicable, pass -through entities.
Our audit will be conducted in accordance with auditing standards generally accepted in the United
States, the standards for financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; the Florida Single Audit Act and Chapter 10.550, Rules of the
Auditor General, and will include tests of accounting records, a determination of major program(s) in
accordance with the Florida Single Audit Act, and other procedures we consider necessary to enable us to
One Southeast Third Avenue, Tenth Floor, Miami, Florida 33131 • Tel 305-377-4228 • Fax 305-371-8.331
Offices in: Miami • Ft. Lauderdale • Boca Raton • West Palm Beach • Stuart
www.rchcpa.com -. ....
Menbti 01ZiUtnink InttfalitiOndl A+stKiatC;c. Inc. with AIM In peincip*1 cities throughout tht world
Mumbet of the Nieman Institute of t.:twlied AcCountinlr aid member tg the Smith Intititult of (wilted Public ARwntants
02/01/2002 10:57 3053778331
RAC LIN C OHEN HOLTZ PAGE 03
Rachlin Cohen & Holtz LLF
Certified Public Accountants & Consultants
Mr. Sam Kissinger, Village Manager
Village of Key Biscayne
February 5, 2002
Page 2
express such an opinion and to render the required reports. If our opinion on the financial statements or
the Single Audit compliance opinion is other than unqualified, we will fully discuss the reasons with you
in advance. If, for any reason, we are unable to complete the audit or are unable to form or have not
formed an opinion, we may decline to express an opinion or to issue a report as a result of this
engagement.
Management Responsibilities
Management is responsible for establishing and maintaining internal control and for compliance with the
provisions of contracts, agreements, and grants. In fulfilling this responsibility, estimates and judgments
by management are required to assess the expected benefits and related costs of the controls. The
objectives of internal control are to provide management with reasonable, but not absolute, assurance that
assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in
accordance with management's authorizations and recorded properly to permit the preparation of
financial statements in accordance with generally accepted accounting principles, and that federal award
programs are managed in compliance with applicable laws and regulations and the provisions of contracts
and grant agreements.
Management is responsible for making all financial records and related information available to us. We
understand that you will provide us with such information required for our audit and that you are
responsible for the accuracy and completeness of that information. We will advise you about appropriate
accounting principles and their application and will assist in the preparation of your financial statements,
including the schedule of expenditures of state financial assistance, but the responsibility for the financial
statements remains with you. That responsibility includes the establishment and maintenance of adequate
records and effective internal control over financial reporting and compliance, the selection and
application of accounting principles, and the safeguarding of assets. Management is responsible for
adjusting the financial statements to correct material misstatements and for confirming to us in the
representation letter that the effects of any uncorrected misstatements aggregated by us during the current
engagement and pertaining to the latest period presented are immaterial, both individually and in the
aggregate, to the financial statements taken as a whole. Additionally, as required by the Florida Single
Audit Act, it is management's responsibility to follow up and take corrective action on reported audit
findings and to prepare a summary schedule of prior audit findings and a corrective action plan.
Audit Procedures -General
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. We will plan and perform the audit to obtain reasonable rather than
absolute assurance about whether the financial statements are free of material misstatement, whether
caused by error or fraud. As required by the Florida Single Audit Act, our audit will include test of
One Southeast Third Avenue, Tenth Floor, Miia iu, Florida 33131 • Tel 305-377-4228 • Fax 305.377-8331
Offices in: Miami • Ft. Lauderdale • Boca Raton • West Palm Beach • Stuaxt
- _ . • www.rchcpa.com -. • -••••- •••
Member of Summit blknwrth•wl Assowwc, Inc. with ofkaiM pnncip I cities wnwghpuI thr work)
Mtolbox of the AmeriCAR IA:dhow of Certified I'•blic Acc•vfllNli and *umber of the Rotid, ItKlltuk of Celified Pobik Accotuuinb
02/0'7/2002 10:57 3053778331
RACHLIN COHEN HOLTZ PAGE 04
Mr. Sam Kissinger, Village Manager
Village of Key Biscayne
February 5, 2002
Page 3
transactions related to major state financial assistance programs for compliance with applicable laws and
regulations and the provisions of contracts and grant agreements. Because an audit is designed to provide
reasonable, but not absolute assurance and because we will not perform a detailed examination of all
transactions, there is a risk that material misstatements (whether caused by errors or fraud), illegal acts, or
noncompliance may exist and not be detected by us. In addition, an audit is not designed to detect
immaterial misstatements, immaterial illegal acts, or illegal acts that do not have a direct effect on the
financial statements or major programs. However, we will inform you of any material errors that come to
our attention and any fraud that comes to our attention. We will also inform you of any illegal acts that
come to our attention, unless clearly inconsequential. We will include such matters in the reports required
for a Single Audit. Our responsibility as auditors is limited to the period covered by our audit and does
not extend to matters that might arise during any later periods for which we are not engaged as auditors.
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. We will request written representations from your attorneys as part of the
engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will
also require certain written representations from you about the financial statements and related matters.
Audit Procedures -Internal Controls
In planning and performing our audit, we will consider the internal control sufficient to plan the audit in
order to determine the nature, timing, and extent of our auditing procedures for the purpose of expressing
our opinions on the Village of Key Biscayne's financial statements and on its compliance with
requirements applicable to major programs.
We will obtain an understanding of the design of the relevant controls and whether they have been, placed
in operation, and we will assess control risk. Tests of controls may be performed to test the effectiveness
of certain controls that we consider relevant to preventing and detecting errors and fraud that are material
to the financial statements and to preventing and detecting misstatements resulting from illegal acts and
other noncompliance matters that have a direct and material effect on the financial statements. Tests of
controls relative to the financial statements are required only if control risk is assessed below the
maximum level. Our tests, if performed, will be less in scope than would be necessary to render an
opinion on internal control and, accordingly, no opinion will be expressed in our report on internal control
issued pursuant to Government Auditing Standards.
As required by the Florida Single Audit Act, we will perform tests of controls to evaluate the
effectiveness of the design and operation of controls that we consider relevant to preventing or detecting
material noncompliance with compliance requirements applicable to each major federal award program.
However, our tests will be less in scope than would be necessary to render an opinion on those controls
02/07/2002 10:57 3053776331
RACH..IN CORN HOLTZ PAGE 05
KC1
Mr. Sarn Kissinger, Village Manager
Village of Key Biscayne
February 5, 2002
Page 4
and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to the
Florida Single Audit Act.
An audit is not designed to provide assurance on internal control or to identify reportable conditions.
However, we will inform the Village Council and management of any matters involving internal control
and its operation that we consider to be reportable conditions under standards established by the
American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our
attention relating to significant deficiencies in the design or operation of the internal control that, in our
judgment, could adversely affect the entity's ability to record, process, summarize, and report financial
data consistent with the assertions of management in the financial statements. We will also inform you of
any nonreportable conditions or other matters involving internal control, daily, as required by the Florida
Single Audit Act and Chapter 10.550, Rules of the Auditor General.
Audit Procedures -Compliance
Our audit will be conducted in accordance with the standards referred to in the section titled Audit
Objectives. As part of obtaining reasonable assurance about whether the financial statements are free of
material misstatement, we will perform tests of the Village's compliance with applicable laws and
regulations and the provisions of contracts and agreements, including grant agreements. However, the
objective of those procedures will not be to provide an opinion on overall compliance and we will not
express such an opinion in our report on compliance issued pursuant to Government Auditing Standards.
The Florida Single Audit Act and Chapter 10.550, Rules of the Auditor General requires that we also plan
and perform the audit to obtain reasonable assurance about whether the auditee has complied with
applicable laws and regulations and the provisions of contracts and grant agreements applicable to major
programs. Our procedures will consist of the applicable procedures described in the Florida Single Audit
Act Compliance Supplement for the types of compliance requirements that could have a direct and
material effect on each, of the Village's major programs. The purpose of those procedures wiU be to
express an opinion on the Village's compliance with requirements applicable to major programs in ow
report on compliance issued pursuant to the Florida Single Audit Act and Chapter 10.550, Rules of the
Auditor General.
Audit Administration
We understand that your employees will prepare all cash, accounts receivable, or other confirmations we
request and will locate any invoices selected by us for testing.
It is management's responsibility to submit the repotting package including financial statements, schedule
of expenditures of state financial assistance, summary schedule of prior audit findings, auditors' reports,
and a corrective action plan to the appropriate state agencies and to the Auditor General of the State of
" 0 2 / 0 7 / 2 0 0 2 1 0 : 5 7 3 0 5 3 7 7 6 3 3 1
R A C H L I N C O H E N H O L T Z P A G E 0 6
M r . S a m K i s s i n g e r , V i l l a g e M a n a g e r
V i l l a g e o f K e y B i s c a y n e
F e b r u a r y 5 , 2 0 0 2
P a g e 5
F l o r i d a . T h e r e p o r t i n g p a c k a g e m u s t b e s u b m i t t e d w i t h i n t h e e a r l i e r o f 4 5 d a y s a f t e r r e c e i p t o f t h e
a u d i t o r s ' r e p o r t s o r t w e l v e m o n t h s a f t e r t h e e n d o f t h e a u d i t p e r i o d .
T h e w o r k p a p e r s f o r t h i s e n g a g e m e n t a r e t h e p r o p e r t y o f R a c h l i n C o h e n & H o l t z L L P a n d c o n s t i t u t e
c o n f i d e n t i a l , i n f o r m a t i o n . H o w e v e r , w e m a y b e r e q u e s t e d t o m a k e c e r t a i n w o r k p a p e r s a v a i l a b l e t o c e r t a i n
r e g u l a t o r y o r g r a n t o r a g e n c i e s p u r s u a n t t o a u t h o r i t y g i v e n t o i t b y l a w o r r e g u l a t i o n . I f r e q u e s t e d , a c c e s s
t o s u c h w o r k p a p e r s w i l l b e p r o v i d e d u n d e r t h e s u p e r v i s i o n o f R a c h l i n C o h e n & H o l t z L L P p e r s o n n e l .
F u r t h e r m o r e , u p o n r e q u e s t , w e m a y p r o v i d e p h o t o c o p i e s o f s e l e c t e d w o r k p a p e r s t o c e r t a i n r e g u l a t o r y o r
g r a n t o r a g e n c i e s _ T h e r e g u l a t o r y o r g r a n t o r a g e n c i e s m a y i n t e n d , o r d e c i d e , t o d i s t r i b u t e t h e p h o t o c o p i e s
o r i n f o r m a t i o n c o n t a i n e d t h e r e i n t o o t h e r s , i n c l u d i n g o t h e r g o v e r n m e n t a l a g e n c i e s .
O u r f e e f o r t h e s e s e r v i c e s w i l l b e a t o u r s t a n d a r d h o u r l y r a t e s p l u s o u t - o f - p o c k e t c o s t s i f a n y . O u r f e e s f o r
t h e s e s e r v i c e s w i l l b e $ 4 2 , 5 0 0 ( S 3 7 , 5 0 0 f o r t h e a u d i t o f t h e g e n e r a l p u r p o s e f i n a n c i a l s t a t e m e n t s a n d
$ 5 , 0 0 0 f o r t h e F l o r i d a S i n g l e A u d i t A c t ) . T h i s f e e i s t h e s a m e a s t h e p r i o r y e a r . O u r s t a n d a r d h o u r l y r a t e s
v a r y a c c o r d i n g t o t h e d e g r e e o f r e s p o n s i b i l i t y i n v o l v e d a n d t h e e x p e r i e n c e l e v e l o f t h e p e r s o n n e l a s s i g n e d
t o y o u r a u d i t . O u r 1 4 1 V 0 1 C C S f o r t h e s e f e e s w i l l b e r e n d e r e d a s w o r k p r o g r e s s e s a n d a r e p a y a b l e o n
p r e s e n t a t i o n . I n a c c o r d a n c e w i t h o u r f i r m p o l i c i e s , w o r k m a y b e s u s p e n d e d i f y o u r a c c o u n t b e c o m e s 3 0
d a y s o r m o r e o v e r d u e a n d m a y n o t b e r e s u m e d u n t i l y o u r a c c o u n t i s p a i d i n f u l l . I f w e e l e c t t o t e r m i n a t e
o u r s e r v i c e s f o r n o n p a y m e n t , o u r e n g a g e m e n t w i l l b e d e e m e d t o h a v e b e e n c o m p l e t e d e v e n i f w e h a v e n o t
c o m p l e t e d o u r r e p o r t . Y o u w i l l b e o b l i g a t e d t o c o m p e n s a t e u s f o r a l l t i m e e x p e n d e d a n d t o r e i m b u r s e u s
f o r a l l o u t - o f - p o c k e t c o s t s t h r o u g h t h e d a t e o f t e r m i n a t i o n . T h e a b o v e f e e i s b a s e d o n a n t i c i p a t e d
c o o p e r a t i o n f r o m y o u r p e r s o n n e l a n d t h e a s s u m p t i o n t h a t u n e x p e c t e d c i r c u m s t a n c e s w i l l n o t b e
e n c o u n t e r e d d u r i n g t h e a u d i t . I f s i g n i f i c a n t a d d i t i o n a l t i m e i s n e c e s s a r y , w e w i l l d i s c u s s i t w i t h y o u a n d
a r r i v e a t a n e w f e e e s t i m a t e b e f o r e w e i n c u r t h e a d d i t i o n a l c o s t s .
G o v e r n m e n t A u d i t i n g S t a n d a r d s r e q u i r e t h a t w e p r o v i d e y o u w i t h a c o p y o f o u r m o s t r e c e n t q u a l i t y
c o n t r o l r e v i e w r e p o r t . O u r 2 0 0 1 p e e r r e v i e w r e p o r t a c c o m p a n i e s t h i s l e t t e r .
T h i s a g r e e m e n t m a y b e e x t e n d e d a t t h e o p t i o n o f t h e V i l l a g e o f K e y B i s c a y n e , F l o r i d a .
T h e V i l l a g e w i l l b e r e q u i r e d t o i m p l e m e n t G o v e r n m e n t a l A c c o u n t i n g S t a n d a r d s B o a r d S t a t e m e n t N o . 3 4 ,
B a s i c F i n a n c i a l S t a t e m e n t s a n d M a n a g e m e n t ' s D i s c u s s i o n a n d A n a l y s i s F o r S t a t e a n d L o c a l
G o v e r n m e n t s , f o r t h e f i s c a l y e a r e n d i n g S e p t e m b e r 3 0 , 2 0 0 3 . Y o u r a u d i t o r s n e e d t o b e i n v o l v e d i n t h e
i m p l e m e n t a t i o n p r o c e s s . A s a r e s u l t , t h e r e w i l l b e c o n s u l t a t i o n a n d c o m m u n i c a t i o n b e t w e e n t h e V i l l a g e
a n d R a c h l i n C o h e n & H o l t z r e g a r d i n g i m p l e m e n t a t i o n e f f o r t s . W e e s t i m a t e t h a t f e e s f o r t h e s e s e r v i c e s
w i l l r a n g e f r o m $ 2 , 0 0 0 t o $ 3 , 0 0 0 d e p e n d i n g o n t h e d e g r e e a n d n a t u r e o f t h e c o n s u l t a t i o n r e q u e s t e d b y t h e
V i l l a g e . O u r f e e s f o r t h i s e n g a g e m e n t w i l l b e b a s e d o n t h e n u m b e r o f h o u r s a t o u r s t a n d a r d b i l l i n g r a t e s
r e q u i r e d t o p e r f o r m t h e s e s e r v i c e s .
02/07/2002 10:57 3053778331
RACHLIN COHEN HOLTZ
PAGE 07
Mr. Sam Kissinger, Village Manager
Village of Key Biscayne
February 5, 2002
Page 6
We appreciate the opportunity to be of continued service to the Village of Key Biscayne, Florida 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.
Sincerely,
. Jerry Chiocca, CPA
Director — Miami
RESPONSE:
This letter correctly sets forth the understanding of the Village of Key Biscayne, Florida.
By:
Title:
Date: