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HomeMy Public PortalAbout19-9613 Execute a 3rd Amendment with Anthony Brunson for Certified Public Accountant Services Sponsored by: City Manager RESOLUTION NO. 19-9613 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF OPA-LOCKA, FLORIDA, AUTHORIZING THE CITY MANAGER TO EXECUTE A 3RD AMENDMENT TO THE AGREEMENT WITH ANTHONY BRUNSON, P.A., FOR CERTIFIED PUBLIC ACCOUNTANT SERVICES, IN A FORM ACCEPTABLE TO THE CITY ATTORNEY; PROVIDING FOR INCORPORATION OF RECITALS; PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Opa-locka ("City") solicited quotes from the Miami-Dade County Management Consulting Services Pool for Certified Public Accountant Services pursuant to Resolution 17-9369 (Exhibit A) passed by the City Commission on May 24, 2017; and WHEREAS, the City Commission entered into an Agreement with Anthony Brunson, P.A. to provide audits of Fiscal Years 2015 and 2016 in the amount of$85,000.00; and WHEREAS, the City Commission approved a first Amendment to the Agreement with Anthony Brunson, P.A. via Resolution 18-9490 (Exhibit B) because the actual hours to complete the 2015 audit alone exceeded the estimate by four-hundred (400) hours; and WHEREAS, the actual hours to complete the 2016 audit will exceed the estimate by 325-375 hours; and WHEREAS, Anthony Brunson, P.A. desires to amend its Agreement to charge the City a flat fee of$12,000.00 to address the additional time expended to complete the audit; and WHEREAS, the City Commission finds that it is in the best interest of the City to approve the 3rd Amendment to Anthony Brunson, P.A.'s Agreement. NOW THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF OPA-LOCKA, FLORIDA: Section 1. RECITALS ADOPTED. The recitals to the preamble herein are incorporated by reference. Section 2. AUTHORIZATION The City Commission hereby authorizes the City Manager to execute a 3rd Amendment to the Agreement with Anthony Brunson, P.A., in a form acceptable to the City Attorney, for Certified Public Accountant Services. Resolution No. 19-9613 Section 3. SCRIVENER'S ERRORS. Sections of this Resolution may be renumbered or re-lettered and corrections of typographical errors which do not affect the intent may be authorized by the City Manager, or the City Manager's designee, without need of public hearing, by filing a corrected or re-codified copy of same with the City Clerk. Section 4. EFFECTIVE DATE. This Resolution shall take effect immediately upon adoption and is subject to the approval of the Governor or his designee. PASSED AND ADOPTED this 27th day of February, 2019. Mayor Matthew A. Pigatt Attest to: Approved as to form and legal sufficiency: l Jo.I a Flores THE BROWN LAW GROUP, LLC Cit Clerk City Attorney Moved by: COMMISSIONER BURKE Seconded by: COMMISSIONER KELLEY Commissioner Vote: 5-0 Commissioner Burke: YES Commissioner Kelley: YES Commissioner Bass: YES Vice-Mayor Davis: YES Mayor Pigatt: YES ova City of Opa-Locka Agenda Cover Memo Department Department Director: _ Director Signature: Finance Director: Bryan Hamilton FD Signature: Department City Manager: Newall J. Daughtrey CM Signature: Commission Item Type: Resolution Ordinance Other Meeting Date: X 02.27.19 (EnterX in box) Fiscal Impact: Ordinance Reading: 1st Reading 2°d Reading (Enter X in box) Yes No (Enter X in box) X Public Hearing: Yes No Yes No (EnterX in box) X X Funding Source: (Enter Fund& Advertising Requirement: Yes No Account#: Dept) (Enter X in box) Ex: 61-513320 17-513320 Contract/P.O. Yes No RFP/RFQ/Bi#: Required: (Enter X in box) Strategic Plan Yes No Strategic Plan Priority Area: Strategic Plan Obj./Strategy: Related X Enhance Organizational (list the specific objective/strategy this (Enter X in box) Bus.&Economic Dev El item will address) Public Safety Quality of Education Qual.of Life&City Image 0 Communication 0 _ Sponsor Name City Manager Department: City Manager Short Title: A RESOLUTION AUTHORIZING THE CITY MANAGER TO PAY ANTHONY BRUNSON P.A.TWELVE THOUSAND DOLLARS ($12,000.00) FOR THE COMPLETION OF THE 2016 AUDIT. Staff Summary: STAFF RECOMMENDS THE PAYMENT OF TWELVE THOUSAND DOLLARS ($12,000) IN ORDER FOR ANTHONY BRUNSON P.A.TO FINALIZE THE CITY'S 2016 AUDIT.THIS AUDIT IS VERY CRITICAL FOR THE CITY TO PRESENT TO THE JLAC COMMITTEE BY THE DEADLINE DATE. Proposed Action: APPROVING THE RESOLUTION WILL ALLOW THE FIRM TO COMPLETE THE 2016 AUDIT. Attachment: , . .. . ( ,,,, ANTHONY BRUNSON P.A. �� CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS January 22,2019 ADDENDUM Mr.Newall J.Daughtrey, City Manager City of Opa-locka 780 Fisherman Street Opa-locka,FL 33054 REF: Audit Fee Adjustment Due to Engagement's Unexpected Circumstances Letter dated April 17,2018(attached hereto) Dear Mr. Daughtrey, This letter is warranted to request a fee correction for the fiscal year end audit period of September 30, 2016. Similar to the circumstances experience in the 2015 audit, significant efforts were incurred completing the 2016 audit. As a result of testing the prior information presented to our team and change in the core working trail balance (WTB); ABPA will be required to re-start the engagement with entirely new numbers and the supporting documents for a large volume of audit adjustments prepare by your Staff. Hence, ABPA requires a fee correction of $35,000 representing 325-375 hours to complete the 2016 engagement. Alternatively, a disclaimer opinion could be issued similar to the 2015 audit examination for a fee of$12,000 representing approximately 120 hours effort. The first scenario does not ensure that an unmodified opinion will be issued,although all efforts will be made to do so. Please advise of the selected course of action as soon as time permits. Sincerely Yours, ANTHONY BRUN N P.A. C1/7//1---'' Anthon Brinson Miramar Office y7-43 Miami Office 3350 SW 148t''Avenue{ Suite 110 801 Brickell Avenue I Suite 900 Miramar,Florida 33027 C� ����V �'�'rt ► u: sor oVioti DRIVEN. Miami,Florida 33131 (954)874-1721 info @abcpasolutions.com (305)789-6673 ANTHONY BRUNSON P.A. k( I f €I'T .N"IS & B1 ,f�0aIT`- April 17,2018 Mr. Newall J. Daughtrey, City Manager City of Opa-locka 780 Fisherman Street Opa-locka,FL 33054 REF:Audit Fee Adjustment Due to Engagement's Unexpected Circumstances. Dear Mr.Daughtrey: This letter serves to highlight the facts and circumstances which warrant an audit fee adjustment for the September 30 2016 audit engagement. Unexpected circumstances occurred in performing the FYE 2015 audit engagement which will be highlighted in this letter. First, let's discuss the basis for the original engagement letter and related fees. An initial fee of$85,000 was agreed upon based upon a strategy to concurrently perform the FYE 2015 engagement and significant segments of the FYE 2016 engagement in an effort to save audit costs. This strategy was developed with the initial management and accounting team of the City of Opa Locka (City).The team comprised City Manager Harrell and accounting team members Parchment and Stephenson. This team was supported by staff members of Account temps and Miami-Dade County. We originally anticipated incurring around 800-850 hours for both years and an audit completion date no later June 30,2017. UNEXPECTED CIRCUMSTANCES The actual audit completion date for the FYE 2015 audit was February 28, 2018. The actual audit costs were$125,780 based upon 973 hours incurred.As a result the engagement easily exceeded the original budget by 400 hours for FYE 2015. 1. Additional hours incurred result from working with three different management groups representing the City. Although, the original team made their best efforts, they simply did not have the experience or skill set to meet the challenge of the City's poor accounting records and systems.This point is best evidenced by the volume of audit and/or accounting adjustments. A contractual team was brought in under the leadership of Tri-Merge accounting services and thereafter the City hired internal staff under the leadership of Bryan Hamilton. Audit progress began with the new groups; yet, inefficiencies occurred as a result of their learning curves and change in approaches to address the City's accounting deficiencies in its system. Fort Lauderdale Office ( Miami Office 333 Las Olas Way CU 4 801 Brickell Avenue Suite 900 Fort Lauderdale,FL 33301 cr n:\E E0ut +:n: s�iI,a r1f�� 1>>Z�� a: Miami,FL 33131 T: (954)361-6571 E: info @abcpasolutions.com T: (305)789-6673 e ' Mr.Newell J.Daughtrey April 17,2018 Page 2 2. Due to complications and deficiencies in the accounting environment, higher staff level members from my Firm executed the audit than originally anticipated. As a result, an average higher hourly rate incurred than originally budgeted. 3. Simply,the conditions of the City's books and records represent the core issue of additional time spent to complete the FYE 2015 audit.The audit concluded with 70 audit adjustments covering seventeen pages to correct historical accounting issues. Moreover,the audit evaluation of the City's internal control system and environment resulted in material weaknesses and significant deficiencies which required additional audit procedures and hours thereto. The fee adjustment makes an effort to maintain annual audit costs at$65,000 each year even though my Firm is exposed to another audit cycle of additional write offs. If you required additional information,do not hesitate to contact me. Very Truly Yours, ANTHONY BRUNSON P.A. C Anth y�,runson AB/kp Cc: Bryan Hamilton /1B Sponsored by: City Manager RESOLUTION NO. 18-9490 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF OPA-LOCKA, FLORIDA, AUTHORIZING THE CITY MANAGER TO EXECUTE AN AMENDMENT TO THE AGREEMENT WITH ANTHONY BRUNSON, P.A., FOR CERTIFIED PUBLIC ACCOUNTANT SERVICES, IN A FORM ACCEPTABLE TO THE CITY ATTORNEY; PROVIDING FOR INCORPORATION OF RECITALS; PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Opa-locka ("City") solicited quotes from the Miami-Dade County Management Consulting Services Pool for Certified Public Accountant Services pursuant to Resolution 17-9369 passed by the City Commission on May 24, 2017; and WHEREAS, the City Commission entered into an Agreement with Anthony Brunson, P.A. to provide audits of Fiscal Years 2015 and 2016 in the amount of$85,000.00; and WHEREAS, the actual hours to complete the 2015 audit alone exceeded the estimate by four-hundred (400) hours; and WHEREAS, Anthony Brunson, P.A. desires to amend its Agreement to change the fee amount from $85,000.00 to $125,780.00 to address the additional time expended; and WHEREAS, the City Commission finds that it is in the best interest of the City to approve the Amendment to Anthony Brunson, P.A.'s Agreement. NOW THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF OPA-LOCKA, FLORIDA: Section 1. RECITALS ADOPTED. The recitals to the preamble herein are incorporated by reference. Section 2. AUTHORIZATION The City Commission authorizes the City Manager to execute an amendment to the Agreement with Anthony Brunson, P.A., in a form acceptable to the City Attorney, for Certified Public Accountant Services. Section 3.SCRIVENER'S ERRORS. Sections of this Resolution may be renumbered or re-lettered and corrections of typographical errors which do not affect the intent may be authorized by the City Manager, or the City Manager's designee, without need of public hearing, by filing a corrected or re-codified copy of same with the City Clerk. Resolution No. 18-9490 Section 4. EFFECTIVE DATE. This Resolution shall take effect immediately upon adoption and is subject to the approval of the Governor or his designee. PASSED AND ADOPTED this 9th day of May, 2018. of M a L. Tay or .lbf5yor Attest to: Approved as to form and legal sufficiency: �4 `\ a V� anna Bores The Brown Law Group, LLC ty Clerk City Attorney Moved by: COMMISSIONER RILEY Seconded by: VICE MAYOR KELLEY Commissioner Vote: 5-0 Commissioner Holmes: YES Commissioner Riley: YES Commissioner Pigatt: YES Vice Mayor Kelley: YES Mayor Taylor: YES ANTHONY BRUNSON P.A• CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS April 9,2018 Mr. Ed Brown,City Manager City of Opa-locka 780 Fisherman Street Opa-locka, FL 33054 REF:Audit Fee Adjustment Due to Engagement's Unexpected Circumstances. Dear Mr. Brown: This letter serves to highlight the facts and circumstances which warrant an audit fee adjustment for the September 30 2016 audit engagement. Unexpected circumstances occurred in performing the FYE 2015 audit engagement which will be highlighted in this letter. First, let's discuss the basis for the original engagement letter and related fees. An initial fee of$85,000 was agreed upon based upon a strategy to concurrently perform the FYE 2015 engagement and significant segments of the FYE 2016 engagement in an effort to save audit costs. This strategy was developed with the initial management and accounting team of the City of Opa Locka (City). The team comprised City Manager Harrell and accounting team members Parchment and Stephenson. This team was supported by staff members of Account temps and Miami-Dade County. We originally anticipated incurring around 800-850 hours for both years and an audit completion date no later June 30,2017. UNEXPECTED CIRCUMSTANCES The actual audit completion date for the FYE 2015 audit was February 28, 2018. The actual audit costs were$125,780 based upon 973 hours incurred. As a result the engagement easily exceeded the original budget by 400 hours for FYE 2015. 1. Additional hours incurred result from working with three different management groups representing the City. Although, the original team made their best efforts, they simply did not have the experience or skill set to meet the challenge of the City's poor accounting records and systems.This point is best evidenced by the volume of audit and/or accounting adjustments. A contractual team was brought in under the leadership of Tri-Merge accounting services and thereafter the City hired internal staff under the leadership of Bryan Hamilton. Audit progress began with the new groups; yet, inefficiencies occurred as a result of their learning curves and change in approaches to address the City's accounting deficiencies in its system. Fort Lauderdale Office Miami Office 333 Las Olas Way I CU 4 801 Brickell Avenue I Suite 900 Fort Lauderdale, FL 33301 it \ � � U( I I I):So I.t I U)\ ����I% 4 \ Miami, FL 33131 T: (954)361-6571 E: info @abcpasolutions.com T: (305) 789-6673 Mr. Ed Brown April 9,2018 • Page 2 2. Due to complications and deficiencies in the accounting environment, higher staff level members from my Firm executed the audit than originally anticipated. As a result, an average higher hourly rate incurred than originally budgeted. 3. Simply,the conditions of the City's books and records represent the core issue of additional time spent to complete the FYE 2015 audit. The audit concluded with 70 audit adjustments covering seventeen pages to correct historical accounting issues. Moreover, the audit evaluation of the City's internal control system and environment resulted in material weaknesses and significant deficiencies which required additional audit procedures and hours thereto. The fee adjustment makes an effort to maintain annual audit costs at $65,000 each year even though my Firm is exposed to another audit cycle of additional write offs. If you required additional information,do not hesitate to contact me. Very Truly Yours, ANTHONY BRUNSON P.A. ii / Anthony Brunson AB/kp E N 143F () ( t S E: D 5 O I. I T I O N D R I V t N Sponsored by: Mayor Taylor RESOLUTION NO. 16-9273 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF OPA-LOCKA, FLORIDA, AUTHORIZING THE CITY MANAGER TO PIGGYBACK OFF OF THE MIAMI GARDENS EXTERNAL AUDITING SERVICES AGREEMENT WITH ANTHONY BRUNSON, P.A.; PROVIDING FOR INCORPORATION OF RECITALS; PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, The City received a letter date November 3, 2016, from The Florida Legislature Joint Legislative Auditing Committee on or about November 14, 2016 (EXHIBIT "A"); and WHEREAS, The Annual Financial Report and the Annual Financial Audit Report required for Fiscal Year 2014-2015 are past due; and WHEREAS, The City is subject to State action if the reports are not filed and a response is not give as to why they are past due; and WHEREAS, Time is of the essence to avoid State action and to mitigate the potential penalties associated with any prolonged failure to provide the required reports; and WHEREAS, The annual financial report and annual financial audit report for fiscal years 2014-2015 and 2015-2016 are necessary to meet the requirements under the City's bond covenants and other obligations; and WHEREAS, The City finds that it is in Its best interest to piggyback off of the City of Miami Gardens' external auditing agreement with Anthony Brunson, P.A., and to enter into an agreement (EXHIBIT "B") with Anthony Brunson, P.A. for external auditing services. NOW THEREFORE BE IT RESOLVED THAT THE CITY COMMISSION OF THE CITY OF OPA LOCKA, FLORIDA: Section 1. The recitals to the preamble herein are incorporated by reference. Section 2. The City Commission of the City of Opa-locka hereby authorizes the City Manager to piggyback off of the City of Miami Gardens' external auditing services agreement with Anthony Brunson, P.A., and to enter into an agreement (EXHIBIT "B") with Anthony Brunson, P.A. for external auditing services. Section 3. This Resolution shall take effect immediately upon adoption, and is subject to the review of the State of Florida Financial Oversight Board for the City of Opa-locka, FL. PASSED AND ADOPTED this 17th day of November, 2016. .„„„,",...a r Myr: L. aylor Mayor • , est to: Approved as to form and legal sufficiency: l■ Jo. a Flores Vincent T. Brown, Esq. City Clerk The Brown Law Group, LLC City Attorney Moved by: COMMISSIONER RILEY Seconded by: COMMISSIONER SANTIAGO Commissioner Vote: 3-1 Commissioner Kelley: NO Commissioner Riley: YES Commissioner Santiago: YES Vice Mayor Holmes: NOT PRESENT Mayor Taylor: YES ANTHONY BRUNSON P.A• CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS December 14,2016 Ms.Yvette Harrell City Manager City of Opa-Locka 780 Fisherman Street Opa-Locka,FL 33054 Dear Ms.Harrell: We are pleased to confirm our understanding of the services we are to provide the City of Opa-Locka (the"City")for the years ended September 30,2015 and 2016.We will audit the financial statements of the governmental activities, the business-type activities,each major fund, and the aggregate remaining fund information, including the related notes to the financial statements, which collectively comprise the basic financial statements, of the City as of and for the year ended September 30, 2015 and 2016. Accounting standards generally accepted in the United States of America provide for certain required supplementary information(RSI),such as management's discussion and analysis(MD&A),to supplement the City's basic financial statements. Such information, although not a part of the basic financial statements, Is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic,or historical context.As part of our engagement,we will apply certain limited procedures to the City's RSI in accordance with auditing standards generally accepted in the United States of America.These limited procedures will consist of inquiries of management regarding the methods of preparing the information and comparing the information{for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We will not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.The following RSI is required by generally accepted accounting principles and will be subjected to certain limited procedures,but will not be audited: 1. Management's Discussion and Analysis 2. Budgetary Comparison Schedule 3. Schedule of Employer Contributions to Pension Plans 4. Schedule of the City's Proportionate Share of Net Pension Liability Florida Retirement System Pension Plan 5. Schedule of City's Contribution Florida Retirement System Pension Plan 6. Schedule of the City's Proportionate Share of Net Pension liability, Health Insurance Subsidy Plan 7. Schedule of City's Contribution-Health Insurance Subsidy Pension Plan 8. Schedule of Funding Progress for Other Post-Employment Benefit Plan Fort Lauderdale Office Miami Office.AE3 333 Las Olas Way I CU 4 801 Brickell Avenue I Suite 900 Fort Lauderdale,FL 33301 CLIENT FOCUSED: SOLUTION DRIVEN Miami,FL 33131 T: (954)361-6571 E: info @abcpasolutions.com T: (305)789-6673 Ms.Yvette Harrell,City Manager December 14,2016 Page 2 We have also been engaged to report on supplementary information other than RSI that accompanies the City's financial statements.We will subject the following supplementary information to the auditing procedures applied in our audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves,and other additional procedures in accordance with auditing standards generally accepted in the United States of America, and we will provide an opinion on it in relation to the financial statements as a whole, in a report combined with our auditor's report on the financial statements: 1. Schedule of expenditures of federal awards and state financial assistance,as applicable. 2. Combining and individual fund statements and schedules. The following other information accompanying the financial statements will not be subjected to the auditing procedures applied in our audit of the financial statements, and our auditor's report will not provide an opinion or any assurance on that other information. 1. The introductory section of the comprehensive annual financial report. 2. The statistical section of the comprehensive annual financial report. Audit Objectives The objective of our audit is the expression of opinions as to whether your financial statements are fairly presented,in all material respects,in conformity with U.S.generally accepted accounting principles and to report on the fairness of the supplementary information referred to in the second paragraph when considered in relation to the financial statements as a whole.The objective also includes reporting on: • Internal control related to the financial statements and compliance with the provisions of laws, regulations,contracts,and grant agreements, noncompliance with which could have a material effect on the financial statements in accordance with Government Auditing Standards. Internal control over compliance related to major programs and an opinion(or disclaimer of opinion)on compliance with federal statutes,regulations,and the terms and conditions of federal awards that could have a direct and material effect on each major program in accordance with the Single Audit Act Amendments of 1996 and Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).Also, the requirements described in the Department of Financial Services' State Projects Compliance Supplement that are applicable to each of its major state projects. The Government Auditing Standards report on internal control over financial reporting and on compliance and other matters will include a paragraph that states that(1)the purpose of the report is solely to describe the scope of testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance,and (2) the report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance.The Uniform Guidance report on internal control over compliance will include a paragraph that states that the purpose of the report on internal control over compliance is solely to describe the scope of testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance and etc113(' I, I I? \ I 1, i) t' l ti 11 1) S U I. 1; 1 0 \1 I) H I V` I? \ Ms.Yvette Harrell,City Manager December 14,2016 Page 3 Audit Objectives-Continued Chapter 10.550, Rules of the Auditor General.Both reports will state that the report is not suitable for any other purpose. Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America;the standards for financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States;Section 10.557 Rules of the Auditor General for Local Governmental Entity Audits the Single Audit Act Amendments of 1996; and the provisions of the Uniform Guidance, and will include tests of accounting records,a determination of major program(s) in accordance with the Uniform Guidance, and a determination of state major project(s) in accordance with Chapter 10.550, Rules of the Auditor General and other procedures we consider necessary to enable us to express such opinions.We will issue written reports upon completion of our Single Audit. Our reports will be addressed to the Mayor and members of the City Council of the City of Opa-Locka. We cannot provide assurance that unmodified opinions will be expressed. Circumstances may arise in which it is necessary for us to modify our opinions or add emphasis-of-matter or other-matter paragraphs. If our opinions are other than unmodified,we will 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 opinions,we may decline to express opinions or issue reports,or may withdraw from this engagement. 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 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 from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets,or(4)violations of laws or governmental regulations that are attributable to the government or to acts by management or employees acting on behalf of the government. Because the determination of abuse is subjective, Government Auditing Standards do not expect auditors to provide reasonable assurance of detecting abuse. Because of the inherent limitations of an audit, combined with the inherent limitations of internal control, and because we will not perform a detailed examination of all transactions,there is a risk that material misstatements or noncompliance may exist and not be detected by us,even though the audit is properly planned and performed in accordance with U.S. generally accepted auditing standards and Government Auditing Standards. In addition, an audit is not designed to detect immaterial misstatements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements or major programs. However,we will inform the appropriate level of management of any material errors, any fraudulent financial reporting, or misappropriation of assets that come to our attention. We will also inform the appropriate level of management of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential,and of any material abuse that comes to our attention.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 any later periods for which we are not engaged as auditors. L i O t (' ,, (_ U i) R I \ i�, N Ms.Yvette Harrell,City Manager December 14,2016 Page 4 Audit Procedures—General-Continued 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, funding sources, 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 require certain written representations from you about your responsibilities for the financial statements;schedule of expenditures of federal awards;federal award programs; compliance with laws, regulations, contracts, and grant agreements; and other responsibilities required by generally accepted auditing standards. Audit Procedures—Internal Control Our audit will include obtaining an understanding of the government and its environment, including internal control,sufficient to assess the risks of material misstatement of the financial statements and to design the nature,timing,and extent of further audit procedures.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.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 Uniform Guidance,we will perform tests of controls over compliance 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 and,accordingly,no opinion will be expressed in our report on internal control issued pursuant to the Uniform Guidance. An audit is not designed to provide assurance on internal control or to identify significant deficiencies or material weaknesses. However, during the audit, we will communicate to management and those charged with governance internal control related matters that are required to be communicated under AICPA professional standards,Government Auditing Standards,and the Uniform Guidance. Audit Procedures—Compliance As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of the City's compliance with provisions of applicable laws, regulations, 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. lF t) ( t 4 I.: I) 5 O I t i I O ti 1) It I \ F: �. Ms.Yvette Harrell,City Manager December 14,2016 Page s Audit Procedures—Compliance-Continued The Uniform Guidance requires that we also plan and perform the audit to obtain reasonable assurance about whether the auditee has complied with federal statutes, regulations, and the terms and conditions of federal awards applicable to major programs. Our procedures will consist of tests of transactions and other applicable procedures described in the OMB Compliance Supplement for the types of compliance requirements that could have a direct and material effect on each of the City's major programs.The purpose of these procedures will be to express an opinion on the City's compliance with requirements applicable to each of its major programs in our report on compliance issued pursuant to the Uniform Guidance. Management Responsibilities Management is responsible for (1) establishing and maintaining effective internal controls, including internal controls over federal awards, and for evaluating and monitoring ongoing activities, to help ensure that appropriate goals and objectives are met; (2) following laws and regulations; (3) ensuring that there is reasonable assurance that government programs are administered in compliance with compliance requirements; and (4) ensuring that management and financial information is reliable and properly reported. Management is also responsible for implementing systems designed to achieve compliance with applicable laws, regulations,contracts,and grant agreements.You are also responsible for the selection and application of accounting principles;for the preparation and fair presentation of the financial statements,schedule of expenditures of federal awards,and all accompanying information in conformity with U.S. generally accepted accounting principles; and for compliance with applicable laws and regulations (including federal statutes) and the provisions of contracts and grant agreements (including award agreements). Your responsibilities also include identifying significant contractor relationships in which the contractor has responsibility for program compliance and for the accuracy and completeness of that information. Management is also responsible for making all financial records and related information available to us and for the accuracy and completeness of that information. You are also responsible for providing us with (1) access to all information of which you are aware that is relevant to the preparation and fair presentation of the financial statements, (2) access to personnel,accounts, books, records, supporting documentation,and other information as needed to perform an audit under the Uniform Guidance, (3) additional information that we may request for the purpose of the audit, and (4) unrestricted access to persons within the government from whom we determine it necessary to obtain audit evidence. Your responsibilities include adjusting the financial statements to correct material misstatements and confirming to us in the management 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 as a whole. L I O ( i_ ; L I) S O 1. 1 1 1 0 �A I) R I \ I�. �A Ms.Yvette Harrell,City Manager December 14,2016 Page 6 Management Responsibilities-Continued You are responsible for the design and implementation of programs and controls to prevent and detect fraud,and for informing us about all known or suspected fraud affecting the government involving(1) management, (2) employees who have significant roles in internal control, and (3) others where the fraud could have a material effect on the financial statements.Your responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud affecting the government received in communications from employees, former employees, grantors, regulators, or others. In addition, you are responsible for identifying and ensuring that the government complies with applicable laws, regulations, contracts, agreements, and grants. Management is also responsible for taking timely and appropriate steps to remedy fraud and noncompliance with provisions of laws, regulations, contracts, and grant agreements,or abuse that we report.Additionally,as required by the Uniform Guidance, it is management's responsibility to evaluate and monitor noncompliance with federal statutes,regulations, and the terms and conditions of federal awards; take prompt action when Instances of noncompliance are identified including noncompliance identified in audit findings; promptly follow up and take corrective action on reported audit findings;and prepare a summary schedule of prior audit findings and a separate corrective action plan.The summary schedule of prior audit findings should be available for our review. You are responsible for identifying all federal awards received and understanding and complying with the compliance requirements and for the preparation of the schedule of expenditures of federal awards (including notes and noncash assistance received) in conformity with the Uniform Guidance.You agree to include our report on the schedule of expenditures of federal awards in any document that contains and indicates that we have reported on the schedule of expenditures of federal awards.You also agree to [include the audited financial statements with any presentation of the schedule of expenditures of federal awards that includes our report thereon OR make the audited financial statements readily available to intended users of the schedule of expenditures of federal awards no later than the date the schedule of expenditures of federal awards is issued with our report thereon]. Your responsibilities include acknowledging to us in the written representation letter that (1) you are responsible for presentation of the schedule of expenditures of federal awards in accordance with the Uniform Guidance; (2) you believe the schedule of expenditures of federal awards, including its form and content, is stated fairly In accordance with the Uniform Guidance;(3)the methods of measurement or presentation have not changed from those used in the prior period (or, if they have changed, the reasons for such changes); and (4) you have disclosed to us any significant assumptions or interpretations underlying the measurement or presentation of the schedule of expenditures of federal awards. You are also responsible for the preparation of the other supplementary information, which we have been engaged to report on,in conformity with U.S.generally accepted accounting principles.You agree to include our report on the supplementary information in any document that contains, and indicates that we have reported on, the supplementary information. You also agree to [include the audited financial statements with any presentation of the supplementary information that includes our report thereon OR make the audited financial statements readily available to users of the supplementary information no later than the date the supplementary information is issued with our report thereon). A( I_ l l V' i' 1 O ( i 'N I i) ti O 1, iI i i O \ !) I \ : \ Ms.Yvette Harrell,City Manager December 14,2016 Page 7 Management Responsibilities-Continued Your responsibilities include acknowledging to us in the written representation letter that (1) you are responsible for presentation of the supplementary information in accordance with GAAP; (2)you believe the supplementary information, including its form and content, is fairly presented in accordance with GAAP;(3)the methods of measurement or presentation have not changed from those used in the prior period (or, if they have changed, the reasons for such changes); and (4) you have disclosed to us any significant assumptions or interpretations underlying the measurement or presentation of the supplementary information. Management is responsible for establishing and maintaining a process for tracking the status of audit findings and recommendations. Management is also responsible for identifying for us previous financial audits, attestation engagements, performance audits, or other studies related to the objectives discussed in the Audit Objectives section of this letter. This responsibility includes relaying to us corrective actions taken to address significant findings and recommendations resulting from those audits,attestation engagements, performance audits, or studies. You are also responsible for providing management's views on our current findings, conclusions, and recommendations, as well as your planned corrective actions,for the report,and for the timing and format for providing that information. With regard to using the auditor's report, you understand that you must obtain our prior written consent to reproduce or use our report in bond offering official statements or other documents. You agree to assume all management responsibilities relating to the financial statements, schedule of expenditures of federal awards,and related notes,and any other nonaudit services we provide.You will be required to acknowledge in the management representation letter our assistance with preparation of the financial statements, schedule of expenditures of federal awards, and related notes and that you have reviewed and approved the financial statements,schedule of expenditures of federal awards, and related notes prior to their issuance and have accepted responsibility for them. Further,you agree to oversee the nonaudit services by designating an individual, preferably from senior management, with suitable skill,knowledge,or experience;evaluate the adequacy and results of those services;and accept responsibility for them. Engagement Administration,Fees,and Other We understand that your employees will prepare all cash, accounts receivable, or other confirmations we request and will locate any documents selected by us for testing. At the conclusion of the engagement,we will complete the appropriate sections of the Data Collection Form that summarizes our audit findings. It is management's responsibility to submit the reporting package(including financial statements,schedule of expenditures of federal awards, summary schedule of prior audit findings,auditors'reports,and corrective action plan)along with the Data Collection Form to the federal audit clearinghouse. We will coordinate with you the electronic submission and certification. If applicable, we will provide copies of our report for you to include with the reporting package you will submit to pass-through entities. The Data Collection Form and the reporting package must be submitted within the earlier of 30 days after receipt of the auditors' reports or nine months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audits. l ( 1. 1 1. :y 1 1 i) t ( h I I) S O I L i I t) \ I) 12 1 1': Ms.Yvette Harrell,City Manager December 14,2016 Page 8 Engagement Administration,Fees,and Other-Continued In connection with this engagement,we may communicate with you or others via email transmission.As emails can be intercepted and read, disclosed, or otherwise used or communicated by an unintended third party, or may not be delivered to each of the parties to whom they are directed and only to such parties,we cannot guarantee or warrant that emails from us will be properly delivered and read only by the addressee.Therefore,we specifically disclaim and waive any liability or responsibility whatsoever for interception or unintentional disclosure of emails transmitted by us in connection with the performance of this engagement. In that regard, you agree that we shall have no liability for any loss or damage to any person or entity resulting from the use of email transmissions, including any consequential, incidental, direct, indirect, or special damages, such as loss of revenues or anticipated profits, or disclosure or communication of confidential or proprietary information. You are responsible to notify us in advance of your intent to reproduce our report for any reason, in whole or in part, and to give us the opportunity to review any printed material containing our report before its issuance. Such notification does not constitute an acknowledgement on our part of any third party's intent to rely on the financial statement. With regard to the financial statement published electronically on your internet website,you understand that electronic sites are a means to reproduce and distribute information. We are not required to read the information contained in your sites,or to consider the consistency of other information in the electronic site with the original document. The audit documentation for this engagement is the property of Anthony Brunson P.A.(Vendor) and constitutes confidential information.However,pursuant to authority given by law or regulation,we may be requested to make certain audit documentation available to regulatory agencies or its designee, a federal or state agency providing direct or indirect funding, or the U.S. Government Accountability Office for purposes of a quality review of the audit,to resolve audit findings, or to carry out oversight responsibilities or pursuant to Chapter 119, Florida Statues, Florida's public records law.We will notify you of any such request. If requested, access to such audit documentation will be provided under the supervision of Anthony Brunson P.A. personnel. Furthermore,upon request,we may provide copies of selected audit documentation to the aforementioned parties.These parties may intend, or decide, to distribute the copies or information contained therein to others,including other governmental agencies. We will also make the audit documentation for this engagement available to the City upon request and reasonable notice. It is our policy to retain engagement documentation for a period of five years after the report release date or for any additional period requested by any regulatory agency.lf we are aware that a federal or state awarding agency,pass-through entity,or auditee is contesting an audit finding,we will contact the party(ies)contesting the audit finding for guidance prior to destroying the audit documentation. To the extent we accumulate any of your original records during the engagement,those documents will be returned to you promptly upon completion of the engagement,and you will provide us with a receipt for the return of such records. The balance of our engagement file, other than the reporting package (including financial statements, schedule of expenditures of federal awards,summary schedule of prior audit findings,auditors'reports, and corrective action plan), which we will provide to you at the conclusion of the engagement, is our property, and we will provide copies of such documents at our discretion and if compensated for any time and costs associated with the effort. 1) 14 Ms.Yvette Harrell,City Manager December 14,2016 Page 9 Engagement Administration,Fees,and Other-Continued The City will indemnify Anthony Brunson P.A.,its principal and employees and hold them harmless from any claims, liabilities, losses and costs arising in circumstances where there has been a knowing misrepresentation by a member of the City's management.Any such indemnification will be pursuant to the provisions of and within the limitations of Section 768.28,Florida Statute. Pursuant to the requirements of the City, Anthony Brunson P.A. maintains $1,000,000 in commercial general liability insurance; $1,000,000 professional liability coverage, and Workers' Compensation coverage as required by law.Certificates are attached as Exhibit A. In the event either party claims a breach of any term of this engagement, the dispute first shall be submitted to voluntary mediation. If this is unsuccessful, then the dispute will be brought to binding arbitration conducted under the rules then prevailing of the American Arbitration Association in the City where this agreement is signed, and the judgment or award of the arbitration shall be binding and conclusive upon the parties and may be entered in any court having proper jurisdiction. The cost of voluntary mediation shall be borne equally by both parties. With respect to binding arbitration,the prevailing party shall recover reasonable attorney's fees and costs. Anthony Brunson is the engagement partner and is responsible for supervising the engagement and signing the reports or authorizing another individual to sign them. We estimate that our audit fee for the fiscal year ended September 30, 2015 and 2016 will be$85,000 which includes an audit in accordance with the Uniform Guidance and/or the Florida Single Audit Act,if the City of Opa-locka is required to undergoduring any year of this contract.Our hourly rates vary according to the degree of responsibility involved and the experience level of the personnel assigned to the audit.The above fee is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. If additional time is required because of unexpected circumstances or for changes in the requirements of the Governmental Accounting Standards Board or our professional auditing standards or changes In the funds structure of the City,we will discuss these circumstances with you and arrive at a new fee estimate before we incur the additional costs. Our invoices for these fees will be rendered as the work progresses,and are payable on presentation. In accordance with our firm policies, should any invoices remain unpaid for more than thirty days, we reserve the right to defer providing any additional services until all outstanding invoices are paid.You agree that we are not responsible for the impact on the City of any delay that results from such non- payment by you. Anthony Brunson P.A. recognizes that all amounts received from the City are income and is solely responsible for declaration of those amounts to the Internal Revenue Service and any other applicable taxing authorities. Anthony Brunson P.A. (and its employees) shall not be eligible to participate in any benefit programs that the City maintains for its employees. C l; 6, 1,. Ms.Yvette Harrell,City Manager December 14,2016 Page 10 Engagement Administration,Fees,and Other-Continued We acknowledge your right to terminate our services at any time for nonperformance, and you acknowledge our right to resign at any time (including instances where in our judgment, our Independence has been impaired or we can no longer rely on the integrity of management),subject in either case to our right to payment for charges Incurred to the date of termination or resignation. This letter is effective for the fiscal year ending September 30,2015 and 2016.Additionally,the City has agreed to grant a three year extension for fiscal years ending September 30,2017,2018, and 2019 pursuant to the terms and objectives of this agreement based upon an annual audit fee of$65,000.We appreciate the opportunity to be of service to the City 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. Sincer • -R � ,P.A. rfl 41F An / •ny . AB/kp RESPONSE:This letter correctly sets forth the understanding of the City of Opa-Locko. // ' 1 / elf / 108// 7 Harrel V Manager r, of Opa-locka,FL Approved for Legal Sufficiency \ /2Z/2A Vincent T.Brown,Esq. Date The Brown Law Group,LLC City of Opa-locka,FL Office of the City Attorney A (-sted to by the City Clerk k a 1Q3 a ,� Jo; na Flores Date A"):1\B ANTHONY BRUNSON P.A. FEE EXPLANATION AND AGREEMENT A. Fee Structure From time to time,we get inquiries concerning our method of charging fees.This is understandable since each CPA firm handles fees a little differently and some new clients may not have used a CPA before. This letter is our tool for communicating our fee structure to our clients and other interested parties. B. Basics All time spent by partners of Anthony Brunson P.A. or their staff members on your matters including, but not limited to (a) accounting; (b) review work; (c) conferences; (d) report preparation; (e) research; (f) telephone calls; (g) settlement negotiations; (h)consulting; or(i) tax preparation and research will be billed at the applicable hourly rates. Each staff member maintains accurate time records, and clients are billed based on actual time spent on their behalf. Since we sell no products and accept no contingent fees, our time and expertise are our only source of income. C. Hourly Rates A standard hourly rate is set for each staff member based on the criteria of experience and ability. If no extenuating circumstances exist, clients are billed using standard hourly rates multiplied by the actual hours worked. Hourly rates vary substantially among staff members -- currently from a low of$75 to a high of $325 per hour. Accordingly, it makes sense to use less experienced staff members to perform routine procedures to achieve the best value for our clients. D. Out-of-Pocket Expenses Basic overhead costs are included in the hourly rates. Expenses specifically on behalf of a client are charged to them.Travel, postage,copies, long distance calls, courier services,etc. is included in this category. E. Billings Billings will be made monthly, but less frequent for limited activity, and are payable in full upon request. If the account has not been paid within thirty (30) days from the date of invoice, a finance/interest charge of 1%per month on the unpaid balance could be charged. It is understood that Anthony Brunson P.A. has the right to defer rendering further services until payment is received on past-due billings. If action is instituted to collect accountant's fees and cost pursuant to this Agreement,the undersigned client agrees to pay such sums as the court may fix as attorney's fees and costs. F. Termination It is understood between the parties that this Agreement could be terminated for good cause by either party upon thirty days of written notice.