HomeMy WebLinkAboutContract 48167 � �ooyyO�`? CITY SECRETARY
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Assurance.Tax•Advisory
August 4, 2016
David Cooke, City Manager
City of Fort Worth, Texas
1000 Throckmorton Street
Fort Worth, TX 76102
Dear Mr. Cooke:
You have requested that we provide independent audit services in accordance with Appendix
"B", Scope of Services, which includes an audit of the financial statements of the governmental
activities,the business-type activities,the discretely presented component units, each major fund,
and the aggregate remaining fund information of the City of Fort Worth, Texas (the City)as of
September 30, 2016 and for the year then ended, and the related notes to the financial statements,
which collectively comprise the City's basic financial statements as listed in the table of contents
in the City's Comprehensive Annual Financial Report(the "CA—FW'). In addition, we will audit
the City's compliance over major federal and state award programs for the period ended
September 30, 2016. We are pleased to confirm our acceptance and our understanding of this
audit engagement by means of this letter.
The initial term of this engagement letter will commence upon the last date executed by both
parties ("Effective Date") and will expire on August 3,2019,unless terminated earlier in
accordance with the provisions of this engagement letter. Thereafter, this engagement for audit
services may be renewed for up to two (2) one (1)year successive terms, each a"Renewal
Term."You must provide us with written notice of your intent to renew at least thirty(3 0) days
prior to the end of each term.
This engagement letter shall consist of the following documents plus appendices:
- This Engagement Letter
- Appendix A—General Terms and Conditions
- Appendix B—Scope of Services
- Appendix C— Payment Schedule
- Appendix D—Communications with the Audit Committee
- Appendix E—Verification of Signature Authority
- Business Associate Agreement
- Network Access Agreement
Accounting principles generally accepted in the United States of America require that
management's discussion and analysis, and budgetary comparison information, among other
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City of Fort Worth, Texas
August 4, 2016
Page 2
items, be presented to supplement the 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 required supplementary information
(RSI) in accordance with auditing standards generally accepted in the United States of America.
These limited procedures will consist primarily of inquiries of management regarding their
methods of measurement and presentation, and comparing the information for consistency with
management's responses to our inquiries. We will not express an opinion or provide any form of
assurance on the RSI. The following RSI is required by accounting principles generally accepted
in the United States of America. This RSI will be subjected to certain limited procedures but will
not be audited:
1. Management's Discussion and Analysis
2. Budgetary Comparison Schedule—General Fund
3. Employees' Retirement Fund—Schedule of Funding Progress
4. Employees' Retirement Fund—Schedule of Fort Worth's Contributions to the
Retirement Fund—Last Ten Fiscal Years
5. Employees' Retirement Fund—Projected Recognition of Deferred Outflows/(Inflows)
6. Employees' Retirement Fund Schedule of Changes in Net Pension Liability—Last Ten
Fiscal Years
7. Other Postemployement Benefits—Schedule of Funding Progress
8. Other Postemployment Benefits—Schedule of Employer Contributions
Supplementary information other than RSI will accompany the City's basic financial statements.
We will subject the following supplementary information to the auditing procedures applied in
our audit of the basic financial statements and certain additional procedures, including
comparing and reconciling the supplementary information to the underlying accounting and
other records used to prepare the financial statements or to the financial statements themselves,
and additional procedures in accordance with auditing standards generally accepted in the United
States of America. We intend to provide an opinion on the following supplementary information
in relation to the financial statements as a whole:
1. Schedule of Expenditures of Federal and State Awards
2. Combining and hidividual Fund Financial Statements and Schedules
Also, the CAFR we submit to you will include the following other additional information that
will not be subjected to the auditing procedures applied in our audit of the financial statements:
City of Fort Worth, Texas
August 4, 2016
Page 3
1. Introductory Section
2. Statistical Section
Audit Objectives
The objective of our audit is the expression of opinions as to whether your basic financial
statements are fairly presented, in all material aspects, in conformity with generally accepted
accounting principles and to report on the fairness of the supplementary information referred to
above 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 GoverninentAuditing
Standards; and 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 and states 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) and Texas Governor's Office
of Budget and Planning, Uniform Grant Management Standards which include the State of
Texas Single Audit Circular(UGMS). We cannot provide assurance that an unmodified opinion
will be expressed. Circumstances may arise in which it is necessary for us to modify our
opinions, add emphasis-of-matter, or other-matter paragraphs. If our opinions on the financial
statements or compliance are other than modified, 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 withdraw from this engagement.
Auditor Responsibilities
We will conduct our audit in accordance with auditing standards generally accepted in the United
States of America(U.S. GAAS), the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States of
America; and the provisions of the Uniform Guidance and UGMS. Those standards and the
Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance
about whether the basic financial statements are free from material misstatement. An audit
involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including
the assessment of the risks of material misstatement of the financial statements,whether due to
error, fraudulent financial reporting, misappropriation of assets, or violations of laws,
governmental regulations, grant agreements, or contractual agreements. An audit also includes
City of Fort Worth, Texas
August 4, 2016
Page 4
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.
Because of the inherent limitations of an audit, together with the inherent limitations of internal
control, an unavoidable risk that some material misstatements or noncompliance may not be
detected exists, even though the audit is properly planned and performed in accordance with U.S.
GAAS and GovernrnentAuditing Standards issued by the Comptroller General of the United
States of America. 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. However, we will inform the appropriate level of management of any
material errors,fraudulent financial reporting, or misappropriation of assets that comes 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. Our
responsibility as auditor's 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.
In making our risk assessments, we consider internal control relevant to the City's preparation
and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control. However, we will communicate to you in writing
concerning any significant deficiencies or material weaknesses in internal control relevant to the
audit of the financial statements that we have identified during the audit.
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 certain provisions of
laws, regulations, contracts, and grants that could have a direct and material effect on the
determination of financial statement amounts. However,providing an opinion on compliance
with those provisions is not an objective of our audit, and accordingly, we will not express such
an opinion.
Our audit of the City's major federal and state award program(s) compliance will be conducted
in accordance with the requirements of the Single Audit Act, as amended; and the provisions of
the Uniform Guidance and UGMS; and will include tests of accounting records, a determination
of major programs in accordance with the Uniform Guidance and UGMS, as well as other
procedures we consider necessary to enable us to express such an opinion on major federal and
state award program compliance and to render the required reports. We cannot provide assurance
that an unmodified opinion on compliance will be expressed. Circumstances may arise in which
it is necessary for us to modify our opinion or withdraw from the engagement.
City of Fort Worth, Texas
August 4, 2016
Page 5
The Uniform Guidance and UGMS requires that we also plan and perform the audit to obtain
reasonable assurance about whether the City has complied with applicable laws and regulations
and the provisions of contracts and grant agreements applicable to major federal and state award
programs. Our procedures will consist of determining major federal and state programs and
performing the applicable procedures described in the U.S. Office of Management and Budget
OMB Compliance Supplement and UGMS 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 those
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.
Also, as required by the Uniform Guidance and UGMS, 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
of the City's major federal and state award programs. However, our tests will be less in scope
than would be necessary to render an opinion on these controls and, accordingly,no opinion will
be expressed in our report.
We may from time to time, and depending on the circumstances, use third-party service
providers in serving your account. We may share confidential information about you with these
service providers,but remain committed to maintaining the confidentiality and security of your
information. Accordingly, we maintain internal policies,procedures, and safeguards to protect
the confidentiality of your personal information. In addition, we will secure confidentiality
agreements with all service providers to maintain the confidentiality of your information and we
will take reasonable precautions to determine that they have appropriate procedures in place to
prevent the unauthorized release of your confidential information to others. In the event that we
are unable to secure an appropriate confidentiality agreement, you will be asked to provide your
consent prior to the sharing of your confidential information with the third-party service
provider. Furthermore, we will remain responsible for the work provided by any such third-party
service provider.
Management's Responsibilities
Our audit will be conducted on the basis that management acknowledge and understand that they
have responsibility:
a. For the preparation and fair presentation of the financial statements in accordance with
accounting principles generally accepted in the United States of America;
City of Fort Worth, Texas
August 4, 2016
Page 6
b. For the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material
misstatement, whether due to error, fraudulent financial reporting, misappropriation of
assets, or violations of laws, governmental regulations, grant agreements, or contractual
agreements;
c. For safeguarding assets;
d. For identifying all federal and state awards expended during the period including federal
awards and funding increments received prior to December 26, 2014, and those received
in accordance with the Uniform Guidance generally received after December 26, 2014;
e. For preparing the schedule of expenses of federal and state awards (including notes and
noncash assistance received) in accordance with the Uniform Guidance and UGMS;
f. For the design, implementation, and maintenance of internal control over compliance;
g. For identifying and ensuring that the City complies with laws,regulations, grants, and
contracts applicable to its activities and its federal and state award programs;
h. For following up and taking corrective action on reported audit findings from prior
periods and preparing a summary schedule of prior audit findings;
i. For following up and taking corrective action on current year audit findings and
preparing a corrective action plan for such findings;
j. For submitting the reporting package and data collection form to the appropriate parties;
k. For making the auditor aware of any significant vendor relationships where the vendor is
responsible for program compliance;
1. To provide us with:
i. Access to all information of which management is aware that is relevant to the
preparation and fair presentation of the financial statements, and relevant to federal
and state award programs, such as records, documentation, and other matters;
ii. Additional information that we may request from management for the purpose of the
audit; and
iii. Unrestricted access to persons within the City from whom we determine it necessary
to obtain audit evidence.
in. For including the auditor's report in any document containing financial statements that
indicates that such financial statements have been audited by the City's auditor;
n. For 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
current year under audit are immaterial, both individually and in the aggregate,to the
financial statements as a whole;
o. For confirming your understanding of your responsibilities as defined in this letter to us
in your management representation letter;
City of Fort Worth, Texas
August 4, 2016
Page 7
p. With respect to any nonaudit/nonattest services we perform, including the preparation of
financial statements, for(a)making all management decisions and performing all
management functions; (b) assigning an individual with suitable skills, knowledge, and
experience to oversee the services; (c) evaluating the adequacy of the services performed;
(d)evaluating and accepting responsibility for the results of the services performed; and
(e) establishing and maintaining internal controls, including monitoring ongoing
activities. These nonaudit/nonattest services do not constitute an audit under Government
Auditing Standards and such services will not be conducted in accordance with
Government Auditing Standards.
q. With regard to the supplementary information referred to above: (a)for the preparation of
the supplementary information in accordance with the applicable criteria; (b)to provide
us with the appropriate written representations regarding supplementary information;
(c)to include our report on the supplementary information in any document that contains
the supplementary information and that indicates that we have reported on such
supplementary information; and (d)to present the supplementary information with the
audited consolidated financial statements, or if the supplementary information will not be
presented with the audited consolidated financial statements, to make the audited
financial statements readily available to the intended users of the supplementary
information no later than the date of issuance by you of the supplementary information
and our report thereon.
Government Auditing Standards require that we document an assessment of the skills,
knowledge, and experience of management, should we participate in any form of preparation of
the basic financial statements and related schedules or disclosures as these actions are deemed a
nonaudit/nonattest service.
During the course of our engagement,we will request information and explanations from
management regarding the City's operations, internal controls, future plans, specific transactions
and accounting systems and procedures. At the conclusion of our engagement, we will require,
as a precondition to the issuance of our report,that management provide certain representations
in a written representation letter. The City agrees that as a condition of our engagement to
perform an audit that management will,to the best of its knowledge and belief, be truthful,
accurate, and complete in all representations made to us during the course of the audit and in the
written representation letter. The procedures we perform in our engagement and the conclusions
we reach as a basis for our report will be heavily influenced by the written and oral
representations that we receive from management. False or misleading representations could
cause us to expend unnecessary efforts in the audit; or, worse, could cause a material error or a
fraud to go undetected by our procedures. Thus, the City agrees that we will not be liable for any
damages or otherwise responsible for any misstatements in the City's financial statements that
City of Fort Worth, Texas
August 4, 2016
Page 8
we may fail to detect as a result of false or misleading representations that are made to us by
management. Moreover,to the extent permissible by law, the City agrees to release and
indemnify us from all claims, liabilities, and reasonable expenses relating to our services under
this engagement letter that are attributable to any false or misleading representations made to us
by any member of the City's management.
Responsibility of the Audit Committee
We acknowledge that the Audit Committee of the City Council ("Audit Committee") and the
City Council are directly responsible for the appointment, compensation, and oversight of our
work, and accordingly, except as otherwise specifically noted, we will report directly to the
Audit Committee. We further acknowledge that services to be performed under this engagement
letter, including,where applicable, the use of subcontractors in connection with this engagement,
must be approved by the Audit Committee in accordance with the City Council's established
preapproval policies and procedures.
Communications with the Audit Committee
Appendix "D" describes various matters that we are required by the Auditing Standards, UGG,
and UGMS to communicate with the Audit Committee and management.
Reporting
We will issue a written report upon completion of our audit of the City's basic financial
statements. Our report will be addressed to the governing body of the City.
In accordance with the requirements of Government Auditing Standards,we will also issue a
written report describing the scope of our testing over internal control over financial reporting
and over compliance with laws, regulations, and provisions of grants and contracts, including the
results of that testing. However, providing an opinion on internal control and compliance over
financial reporting will not be an objective of the audit and,therefore, no such opinion will be
expressed.
We will issue a report on compliance that will include an opinion or disclaimer of opinion
regarding the City's major federal and state award programs, and a report on internal controls
over compliance that will report any significant deficiencies and material weaknesses identified;
however, such report will not express an opinion on internal control.
City of Fort Worth, Texas
August 4, 2016
Page 9
Other
We understand that your employees will prepare all confirmations we request and will locate any
documents or invoices selected by us for testing.
In the unlikely event that circumstances occur which we, in our sole discretion, believe could
create a conflict with either the ethical standards of our firm or the ethical standards of our
profession in continuing our engagement, we may suspend our services until a satisfactory
resolution can be achieved or we may resign from the engagement. We will notify you of such
conflict as soon as practicable, and will discuss with you any possible means of resolving them
prior to suspending our services.
If you intend to publish or otherwise reproduce the financial statements and make reference to
our firm, you agree to provide us with printers' proofs or masters for our review and approval
before printing. You also agree to provide us with a copy of the final reproduced material for our
approval before it is distributed.
During the course of the engagement, we may communicate with you or your personnel via fax
or e-mail, and you should be aware that communication in those mediums contains a risk of
misdirected or intercepted communications.
Kevin A. Sanford is the engagement partner for the audit services specified in this letter.His
responsibilities include supervising our services performed as part of this engagement and
signing or authorizing another qualified firm representative to sign the audit report. We expect to
begin our fieldwork in September 2016 and issue our final report in February 2017.
Our fee will be paid in accordance with the agreed upon hourly rate of our personnel who
perform services under this engagement letter in accordance with the provisions of this
engagement and the Payment Schedule attached as Appendix"C,"which is incorporated for all
purposes herein; however, total payment made under this engagement for all services shall not
exceed $2,340,000.00 during the initial term. We shall not perform any additional services for
you not specified by this engagement letter unless you request and approve in writing the
additional costs for such services. You will not be liable for any additional expenses we
encounter that are not specified by this engagement letter unless you first approve of such
expenses in writing. The fee is based on anticipated cooperation from your personnel and the
assumption that unexpected circumstances will not be encountered during the audit. If significant
additional time is necessary, we will discuss it with you and arrive at a new fee estimate before
we incur the additional costs. Our invoices for these fees will be rendered each month as work
progresses and are payable on presentation. Our fee is based upon the complexity of the work to
City of Fort Worth, Texas
August 4, 2016
Page 10
be performed and the tasks required. Fees for our services are due upon receipt of our invoice.
For bills not paid within 60 days of the billing date, a late charge will be added to the outstanding
balance. The late charge will be calculated using the then current"prime rate" charges
commercial customers by Bank of America, up to a maximum annual percentage of.5%.
The audit documentation for this engagement is the property of Weaver and Tidwell, L.L.P. and
constitutes confidential information. However,we may be requested to make certain audit
documentation available to regulators and federal or state agencies and the U.S. Government
Accountability Office pursuant to authority given to it by law or regulation, or to peer reviewers.
If requested, access to such audit documentation will be provided under the supervision of
Weaver and Tidwell, L.L.P.'s personnel. Furthermore, upon request, we may provide copies of
selected audit documentation to these agencies and regulators. The regulators and agencies may
intend, or decide, to distribute the copies of information contained therein to others, including
other governmental agencies. We agree to retain our audit documentation or work papers for a
period of at least five years from the date of our report.
It is expected that prior to the conclusion of the engagement, sections of the Data Collection
Form will be completed by our firm. The sections that we will complete summarize our audit
findings by federal grant or contract. Management is responsible to submit the reporting package
(defined as including financial statements, schedule of expenditures of federal awards, summary
schedule of prior audit findings, auditor's reports, and corrective action plan) along with the Data
Collection Form to the federal audit clearinghouse. The instructions to the Data Collection Form
require that the reporting package be an unlocked, unencrypted, text searchable portable
document file (PDF) or else it will be rejected by the Federal Audit Clearinghouse. We will be
available to assist management in creating the PDF if needed.
We will coordinate with you the electronic submission and certification upon the reporting
package completion. If applicable,we will provide copies of our report for you to include with
the reporting package if there is a need to submit the package to pass-through entities.
The Data Collection Form and the reporting package must be submitted within the earlier of
30 days after receipt of our reports or nine months after the end of the audit period.
During the course of the audit, we may observe opportunities for economy in, or improved
controls over, your operations. We will bring such matters to the attention of the appropriate
level of management, either orally or in writing.
In accordance with the requirements of Government Auditing Standards, we have attached a
copy of our latest external peer review report of our firm for your consideration and files.
City of Fort Worth, Texas
August 4, 2016
Page 11
Please sign and return the last page of this letter to indicate your acknowledgment of, and
agreement with,the arrangements for our audit of the financial statements compliance over
major federal and state award programs including our respective responsibilities.
We appreciate the opportunity to be your financial statement auditors and look forward to
working with you and your staff.
Yours truly,
WEAVER AND TIDWELL, L.L.P.
KAS:em
This engagement letter, including the schedule of appendices attached hereto and any documents
incorporated herein by reference, contains the entire understanding and agreement between the
City and Weaver and Tidwell, L.L.P., their assigns and successors in interest, as to the matters
contained herein. Any prior or contemporaneous oral or written agreement is hereby declared
null and void to the extent in conflict with any provision of this engagement.
The persons signing this engagement letter hereby warrant that he/she has the legal authority to
execute this engagement letter on behalf of the respective party, and that such binding authority
has been granted by proper order, resolution, ordinance or other authorization of the entity. This
engagement letter and any amendment hereto, may be executed by any authorized representative
of Auditor whose name, title and signature is affixed on the Verification of Signature Authority
Form, which is attached hereto as Appendix `B" and incorporated herein by reference. Each
party is fully entitled to rely on these warranties and representations in entering into this
engagement letter or any amendment hereto.
City of Fort Worth, Texas
August 4, 2016
Page 12
RESPONSE:
This letter correctly sets forth the understanding of the City of Fort Worth, Texas by:
Signature: /
Title: W
Date:
Recommended By:
Signature:
Name: Aaron Bovos
Title: Chief Financial Services Officer, Financial Manaizement Services
Contracting Authority
M&C: C-C-27844
Date: August 2, 2016
Form 1295 Certification No. 2016-87232
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CITY SECRETARY
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City of Fort Worth, Texas
August 4, 2016
Page 13
Appendix A
General Terms and Conditions
This Appendix "A" is part of the engagement letter to which these terms are attached (the
engagement letter, including its appendices, the "engagement letter"), between Weaver and
Tidwell, L.L.P. (the "Auditor") and the City of Fort Worth.
1.Independent Contractor. It is expressly understood and agreed that Auditor shall operate as
an independent contractor as to all rights and privileges and work performed under this
engagement letter, and not as agent, representative or employee of the City. Subject to and in
accordance with the conditions and provisions of this engagement letter, Auditor shall have the
exclusive right to control the details of its operations and activities and be solely responsible for
the acts and omissions of its officers, agents, servants, employees, contractors and
subcontractors. Auditor acknowledges that the doctrine of respondeat superior shall not apply as
between the City, its officers, agents, servants and employees, and Auditor, its officers, agents,
employees, servants, contractors and subcontractors. Auditor further agrees that nothing herein
shall be construed as the creation of a partnership or joint enterprise between City and Auditor. It
is further understood that the City shall in no way be considered a Co-employer or a Joint
employer of Auditor or any officers, agents, servants, employees or subcontractors of Auditor.
Neither Auditor, nor any officers, agents, servants, employees or subcontractors of Auditor shall
be entitled to any employment benefits from the City. Auditor shall be responsible and liable for
any and all payment and reporting of taxes on behalf of itself, and any of its officers, agents,
servants, employees or subcontractors.
2. Survival. The agreements and undertakings of the City contained in the engagement letter will
survive the completion or termination of this engagement.
3. AssiEnment and Subcontracting. Except as provided below in section 4, Auditor shall not
assign or subcontract any of its duties, obligations or rights under this Agreement without the
prior written consent of the City. If the City grants consent to an assignment, the assignee shall
execute a written agreement with the City and the Auditor under which the assignee agrees to be
bound by the duties and obligations of Auditor under this Agreement. The Auditor and Assignee
shall be jointly liable for all obligations of the Auditor under this Agreement prior to the
effective date of the assignment. If the City grants consent to a subcontract, the subcontractor
shall execute a written agreement with the Auditor referencing this Agreement under which the
subcontractor shall agree to be bound by the duties and obligations of the Auditor under this
Agreement as such duties and obligations may apply. The Auditor shall provide the City with a
fully executed copy of any such subcontract.
City of Fort Worth, Texas
August 4, 2016
Page 14
4. MBE GOAL. Auditor agrees to comply with Fort Worth City Code Chapter 20, Article 10,
governing Minority and Women Business Enterprises (M/WBE). Auditor acknowledges its
commitment to meet or make "good faith" effort to meet the City of Fort Worth's goal of fifteen
percent (15%) for minority business enterprises (MBE) participation in City contracts. MBE
participation was part of the evaluation criteria used in the award of this Contract; therefore,
failure to comply will result in a breach of this Contract. Such breach may result in being
debarred from City work for a period of not less than one (1)year. Auditor further acknowledges
that any misrepresentation of facts (other than a negligent misrepresentation) and/or the
commission of fraud by Auditor may result in the termination of this agreement and debarment
from participating in City contracts for a period of time of not less than three (3) years. Auditor
agrees to furnish documentation of MBE participation deemed proper by the City of Fort Worth.
Further, upon request of the M/WBE Office, Auditor shall submit such other documentation as
may be reasonably required to verify proof of payments. Failure to submit these reports and other
requested information, if any, as required shall authorize the city to withhold payment from the
Auditor until such compliance is attained.
5.Disclosure of Conflicts and Confidential Information. Auditor hereby warrants to the City
that Auditor has made full disclosure in writing of any existing or potential conflicts of interest
related to Auditor's services under this Agreement. In the event that any conflicts of interest arise
after the Effective Date of this Agreement, Auditor hereby agrees immediately to make full
disclosure to the City in writing. Auditor, for itself and its officers, agents and employees, agrees
that it shall treat all information provided to it by the City as confidential and shall not disclose
any such information to a third party without the prior written approval of the City or as required
by law or court order. Auditor shall store and maintain City Information in a secure manner and
shall not allow unauthorized users to access, modify, delete or otherwise corrupt City
Information in any way. Auditor shall notify the City immediately if the security or integrity of
any City information has been compromised or is believed to have been compromised, in which
event, Auditor shall, in good faith, use all commercially reasonable efforts to cooperate with the
City in identifying what information has been accessed by unauthorized means and shall fully
cooperate with the City to protect such information from further unauthorized disclosure.
6. Right to Audit. Auditor agrees that the City shall, until the expiration of three (3) years after
final payment under this contract, or the final conclusion of any audit commenced during the said
three years, have access to and the right to examine at reasonable times any directly pertinent
books, documents, papers and records of the Auditor involving transactions relating to this
Contract at no additional cost to the City. Auditor agrees that the City shall have access during
normal working hours to all necessary Auditor facilities and shall be provided adequate and
appropriate work space in order to conduct audits in compliance with the provisions of this
section. The City shall give Auditor reasonable advance notice of intended audits. Auditor
City of Fort Worth, Texas
August 4, 2016
Page 15
further agrees to include in all its subcontractor agreements hereunder a provision to the effect
that the subcontractor agrees that the City shall, until expiration of three (3) years after final
payment of the subcontract, or the final conclusion of any audit commenced during the said three
years have access to and the right to examine at reasonable times any directly pertinent books,
documents, papers and records of such subcontractor involving transactions related to the
subcontract, and further that City shall have access during normal working hours to all
subcontractor facilities and shall be provided adequate and appropriate work space in order to
conduct audits in compliance with the provisions of this paragraph. City shall give subcontractor
reasonable notice of intended audits.
7.Liability and Indemnification. AUDITOR SHALL BE LIABLE AND RESPONSIBLE
FOR ANY AND ALL PROPERTY LOSS, PROPERTY DAMAGE AND/OR PERSONAL
INJURY, INCLUDING DEATH, TO ANY AND ALL PERSONS, OF ANY KIND OR
CHARACTER, WHETHER REAL OR ASSERTED, TO THE EXTENT CAUSED BY
THE NEGLIGENT ACT(S) OR OMISSION(S), MALFEASANCE OR INTENTIONAL
MISCONDUCT OF AUDITOR, ITS OFFICERS, AGENTS, SERVANTS OR
EMPLOYEES. AUDITOR HEREBY COVENANTS AND AGREES TO INDEMNIFY,
HOLD HARMLESS AND DEFEND THE CITY, ITS OFFICERS, AGENTS, SERVANTS
AND EMPLOYEES, FROM AND AGAINST ANY AND ALL CLAIMS OR LAWSUITS
OF ANY KIND OR CHARACTER, WHETHER REAL OR ASSERTED, FOR EITHER
PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS TO
AUDITOR'S BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR
PERSONAL INJURY, INCLUDING DEATH, TO ANY AND ALL PERSONS, ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT, TO THE EXTENT
CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS OR MALFEASANCE OF
AUDITOR, ITS OFFICERS,AGENTS, SERVANTS OR EMPLOYEES.
8. Insurance. Auditor shall carry insurance in the types and amounts for the duration of this
engagement, including any renewal terms, and furnish certificates of insurance as evidence
thereof. Coverage and Limits: Commercial General Liability - $1,000,000 Each Occurrence;
$1,000,000 Aggregate. Automobile coverage shall be on any vehicle used by Auditor, its
employees, agents, representatives in the course of providing services under this engagement.
"Any vehicle" shall be any vehicle owned, hired and non-owned. Amounts shall be as follows:
$1,000,000 each occurrence on a combined single limit basis. Worker's Compensation shall be
the statutory limits. Professional Liability(Errors & Omissions): $1,000,000 each claim limit:
$1,000,000 aggregate limit. Professional Liability coverage may be provided through an
endorsement to the Commercial General Liability (CGL) policy, or a separate policy specific to
Professional E&O. Either is acceptable if coverage meets all other requirements. Coverage shall
be claims-made, and maintained for the duration of the contractual agreement and for two (2)
City of Fort Worth, Texas
August 4, 2016
Page 16
years following completion of services provided. An annual certificate of insurance shall be
submitted to the City to evidence coverage. Certificates of Insurance (COI) evidencing that the
Auditor has obtained all required insurance shall be delivered to the City prior to Auditor
proceeding with any work pursuant to this engagement. The commercial general liability and
automobile liability policies shall be endorsed to include the City as an additional insured
thereon, as its interests may appear. The term City shall include its employees, officers, officials,
agents, and volunteers in respect to the contracted services. Any failure on the part of the City to
request required insurance documentation shall not constitute a waiver of the insurance
requirement. Auditor shall endeavor to provide a minimum of thirty (30) days' written notice of
cancellation of coverage to the City. Ten (10) days' written notice shall be acceptable in the
event of non-payment of premium. Notice shall be sent to the Risk Manager, City of Fort Worth,
1000 Throckmorton, Fort Worth, Texas 76102, with copies to the City Attorney at the same
address.
9. Termination.A)For Convenience. The City or Auditor may terminate this engagement at any
time and for any reason by providing the other party with 30 days' written notice of termination.
B) For Cause. The City may terminate this engagement if Auditor fails to cure a material breach
within thirty (30) calendar days of receipt of written notice being given of such material breach.
If more than thirty (30) calendar days are required to cure such material breach, a reasonable
time in excess of said days may be established, provided both parties agree in writing as to the
time period. In the event such material breach is not cured within the specified time, the City
shall have the right terminate this engagement immediately upon expiration of the specified time
and upon written notice to Auditor. In the event that this engagement is terminated prior to the
expiration date, Auditor shall immediately discontinue all services or the entering into contracts
in connection with the performance of this engagement and shall return all records of the City
that have been submitted to Auditor for purposes of completion of the then current audit. The
City shall pay Auditor for services actually rendered and expenses incurred up to the effective
date of termination and Auditor shall continue to provide the City with services requested by the
City and in accordance with this engagement up to the effective date of termination. Auditor
shall not be entitled to lost or anticipated profits should the City choose to exercise its option to
terminate. Auditor may terminate this engagement at any time, immediately upon written notice
to the City if Auditor determines that the performance of any part of the services under this
engagement letter would be in conflict with law, or applicable independence or professional rules
or standards. In such case, the City shall compensate Auditor under the engagement letter for
services provided and expenses incurred up to and including the effective date of termination.
10. Non-appropriation of Funds. In the event no funds or insufficient funds are appropriated by
the City in any fiscal period for any payments due hereunder, City will notify Auditor of such
occurrence and this Agreement shall terminate on the last day of the fiscal period for which
City of Fort Worth, Texas
August 4, 2016
Page 17
appropriations were received without penalty or expense to the City of any kind whatsoever,
except as to the portions of the payments herein agreed upon for which funds have been
appropriated.
11. Compliance with Laws, Ordinances, Rules and Regulations. Auditor agrees that in the
performance of its obligations hereunder, it will comply with all applicable federal, state and
local laws, ordinances, rules and regulations and that any work it produces in connection with
this agreement will also comply with all applicable federal, state and local laws, ordinances,
rules and regulations. If the City notifies Auditor of any violation of such laws, ordinances,
rules or regulations, Auditor shall immediately desist from and correct the violation.
12. Non-Discrimination Covenant. Auditor, for itself, its personal representatives, assigns,
subcontractors and successors in interest, as part of the consideration herein, agrees that in the
performance of Auditor's duties and obligations hereunder, it shall not discriminate in the
treatment or employment of any individual or group of individuals on any basis prohibited by
law. If any claim arises from an alleged violation of this non-discrimination covenant by
Auditor, its personal representatives, assigns, subcontractors or successors in interest, Auditor
agrees to assume such liability and to indemnify and defend the City and hold the City harmless
from such claim.
13. Notices.Notices required pursuant to the provisions of this engagement shall be conclusively
determined to have been delivered when (1) hand-delivered to the other party, its agents,
employees, servants or representatives, (2) delivered by facsimile with electronic confirmation of
the transmission, or (3) received by the other party by United States Mail, registered, return
receipt requested, addressed as follows:
To the CITY: To Auditor:
City of Fort Worth Weaver and Tidwell, L.L.P.
Attn: Susan Alanis, Assistant City Manager Attn: Kevin Sanford, Partner
1000 Throckmorton 2821 West Seventh Street, Suite 700
Fort Worth TX 76102-6311 Fort Worth, TX 76107
Facsimile: (817) 392-8654 Facsimile: (817)429-5936
With Copy to the City Attorney
at same address
14. Solicitation of Employees. Neither the City nor Auditor shall, during the term of this
agreement and additionally for a period of one year after its termination, solicit for employment
or employ, whether as employee or independent Auditor, any person who is or has been
City of Fort Worth, Texas
August 4, 2016
Page 18
employed by the other during the term of this agreement, without the prior written consent of the
person's employer. Notwithstanding the foregoing, this provision shall not apply to an employee
of either party who responds to a general solicitation of advertisement of employment by either
party.
15. Governmental Powers/Immunities. It is understood and agreed that by execution of this
Agreement,the City does not waive or surrender any of its governmental powers or immunities.
16. No Waiver. The failure of the City or Auditor to insist upon the performance of any term or
provision of this Agreement or to exercise any right granted herein shall not constitute a waiver
of the City's or Auditor's respective right to insist upon appropriate performance or to assert any
such right on any future occasion.
17. Governing Law/Venue. This engagement shall be construed in accordance with the laws of
the State of Texas. If any action, whether real or asserted, at law or in equity, is brought pursuant
to this engagement, venue for such action shall lie in state courts located in Tarrant County,
Texas or the United States District Court for the Northern District of Texas, Fort Worth Division.
18. Severability. If any provision of this engagement is held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired.
19. Force Maieure. The City and Auditor shall exercise their best efforts to meet their
respective duties and obligations as set forth in this Agreement, but shall not be held liable for
any delay or omission in performance due to force majeure or other causes beyond their
reasonable control, including, but not limited to, compliance with any government law,
ordinance or regulation, acts of God, acts of the public enemy, fires, strikes, lockouts, natural
disasters, wars, riots, material or labor restrictions by any governmental authority, transportation
problems and/or any other similar causes.
20. Headings Not Controlling. Headings and titles used in this engagement are for reference
purposes only, shall not be deemed a part of this engagement, and are not intended to define or
limit the scope of any provision of this engagement.
21. Review Of Counsel. The parties acknowledge that each party and its counsel have reviewed
and revised this engagement and that the normal rules of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed in the
interpretation of this engagement or exhibits hereto.
City of Fort Worth, Texas
August 4, 2016
Page 19
22. Amendments.No amendment of this engagement shall be binding upon a party hereto
unless such amendment is set forth in a written instrument, which is executed by an authorized
representative of each party.
23. Warranty Of Services. Auditor warrants that its services will be of a professional quality
and conform to generally prevailing industry standards. City must give written notice of any
breach of this warranty within thirty (30) days from the date that the services are completed. In
such event, at Auditor's option, Auditor shall either (a) use commercially reasonable efforts to
re-perform the services in a manner that conforms with the warranty, or (b) refund the fees paid
by the City to Auditor for the nonconforming services.
24. Informal Dispute Resolution. Except in the event of termination pursuant to section 9, if
either City or Auditor has a claim, dispute, or other matter in question for breach of duty,
obligations, services rendered or any warranty that arises under this Agreement, the parties shall
first attempt to resolve the matter through this dispute resolution process. The disputing party shall
notify the other party in writing as soon as practicable after discovering the claim, dispute, or
breach. The notice shall state the nature of the dispute and list the party's specific reasons for such
dispute. Within ten (10) business days of receipt of the notice, both parties shall commence the
resolution process and make a good faith effort, either through email, mail, phone conference, in
person meetings, or other reasonable means to resolve any claim, dispute, breach or other matter in
question that may arise out of, or in connection with this Agreement. If the parties fail to resolve the
dispute within sixty(60) days of the date of receipt of the notice of the dispute,then the parties may
submit the matter to non-binding mediation in Tarrant County, Texas, upon written consent of
authorized representatives of both parties in accordance with the Industry Arbitration Rules of the
American Arbitration Association or other applicable rules governing mediation then in effect. The
mediator shall be agreed to by the parties. Each party shall be liable for its own expenses,
including attorney's fees; however, the parties shall share equally in the costs of the mediation. If
the parties cannot resolve the dispute through mediation, then either party shall have the right to
exercise any and all remedies available under law regarding the dispute. Notwithstanding the fact
that the parties may be attempting to resolve a dispute in accordance with this informal dispute
resolution process, the parties agree to continue without delay all of their respective duties and
obligations under this Agreement not affected by the dispute. Either party may, before or during
the exercise of the informal dispute resolution process set forth herein, apply to a court having
jurisdiction for a temporary restraining order or preliminary injunction where such relief is
necessary to protect its interests.
25. Ownership Of Work Product. City shall be the sole and exclusive owner of all reports,
work papers, procedures, guides, and documentation, created, published, displayed, and/or
produced in conjunction with the services provided under this Agreement, collectively, "Work
City of Fort Worth, Texas
August 4, 2016
Page 20
Product" Ownership of the Work Product shall inure to the benefit of the City from the date of
conception, creation or fixation of the Work Product in a tangible medium of expression
(whichever occurs first). Each copyrightable aspect of the Work Product shall be considered a
"work-made-for-hire" within the meaning of the Copyright Act of 1976, as amended. If and to
the extent such Work Product, or any part thereof, is not considered a "work-made-for-hire"
within the meaning of the Copyright Act of 1976, as amended, Auditor hereby expressly assigns
to City all exclusive right,title and interest in and to the Work Product, and all copies thereof,
and in and to the copyright, patent, trademark, trade secret, and all other proprietary rights
therein, that the City may have or obtain, without further consideration, free from any claim, lien
for balance due, or rights of retention thereto on the part of the City.
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City of Fort Worth, Texas
August 4, 2016
Page 21
Appendix B
Scope of Services
This Appendix "B" is part of the engagement letter between Weaver and Tidwell, L.L.P. (the
"Auditor") and the City of Fort Worth.
1. As stated herein, the Auditor shall be responsible for performing certain procedures involving
required Management's Discussion and Analysis and the required supplementary information
required by the Government Accounting Standards Board as mandated by Generally Accepted
Auditing Standards (GAAS).
2. Auditing Standards to Be Followed
The audit shall be performed in accordance with the following auditing standards:
• Generally Accepted Auditing Standards and Audits of State and Local Governmental Units as
issued by the American Institute of Certified Public Accountants (AICPA).
• Government Auditing Standards, as issued by the Comptroller General of the United States.
• Uniform Grant Guidance (UGG).
• The provisions of the Federal Single Audit Act(as amended).
• The provisions of the Texas Single Audit Circular(Uniform Grant Management Standards).
• Rules and State of Texas Department of Banking and Finance Regulations.
• Other applicable federal, state and local laws or regulations or professional guidance not
specifically listed above as well as any additional requirements, which may be adopted by these
organizations in the future.
3. Reports to Be Issued
Following the completion of the audit of the fiscal year's financial statements, the Auditor shall
issue the following:
City of Fort Worth, Texas
August 4, 2016
Page 22
• A report on the fair presentation of the City of Fort Worth's basic financial statements, in
conformity with Generally Accepted Accounting Principles.
Reports required by the Single Audit Act of 1996 and Uniform Grant Guidance shall include:
• A report on compliance and on internal controls over financial reporting based on an audit of
financial statements performed in accordance with Government Auditing Standards.
• A report on compliance with requirements applicable to each major federal program and on
internal control over compliance in accordance with Uniform Grant Guidance.
• A schedule of findings and questioned costs.
• A report on compliance with requirements applicable to each major State Program in accordance
with Uniform Grant Management Standards.
• Irregularities and illegal Acts. Auditor shall be required to make an immediate, written report of
all irregularities and illegal acts of which they become aware to the Director of Finance,the City
Manager and City Council as appropriate.
4. TCEQ Letter-Reviewed and Confirmed
Special Considerations and Services
• The City of Fort Worth will send the Comprehensive Annual Financial Report (CAFR) to the
Government Finance Officers Association (GFOA) of the United States for review in the
Certificate of Achievement for Excellence in Financial Reporting Program. The auditor will be
required to review the compliance of the CAFR with GFOA requirements and provide
recommendations.
• The Auditor will ensure that the City remains compliant with changes in any reporting
requirements to remain in conformity with GAAP.
• The City owns the Southeast landfill and must satisfy the State's requirements of financial
assurance for closure, post closure, or corrective action by establishing a local government
financial test. The auditor will be required to perform certain agreed-upon procedures to assist
the City and the Texas Commission on Environmental Quality (TCEQ) evaluation of the City's
City of Fort Worth, Texas
August 4, 2016
Page 23
compliance with the local government financial test requirements under Texas Administrative
Code Title 30, Chapter 37, Rule 37.271 ("TAC 30, Chapter 37, section 37.271"), on an annual
basis.
5. Public Funds Investment Act Compliance
Auditors will evaluate the City's compliance with the Public Funds Investment Act (the Act).
The Public Funds Investment Act regulates the investment activities of State agencies and local
governments in the State of Texas. Certain sections of the Act apply to State agencies and local
governments in Texas. A compliance checklist is to be used for testing compliance with the Act
in local governmental entities only. Material instances of non-compliance will be noted in a
separate report published by the external auditors regarding the City's compliance with laws and
regulations.
6. City Charter Requirements—Appropriations
Chapter X, Section 11 of the City Charter states that the duties of the independent auditor(s) shall
include the certification of all statements required under section 2 of Chapter 10 of the City
Charter which governs the Annual Appropriations Ordinance.
8. City Charter Requirements—Financial Reporting
In addition, the Charter requires the review and publication of a balance sheet, exhibiting the
assets and liabilities of the City, supported by departmental schedules, and schedules for each
utility publicly owned or operated; summaries of income and expenditures, supported by detailed
schedules; and also comparison, in proper classification, with the last previous year. The report
of such auditor(s) for the fiscal year shall be printed and a copy thereof shall be furnished to each
member of the Council, City Manager, and to each citizen who may apply therefor. The original
report of the said auditors shall be kept among the permanent records of the City. The City's
Comprehensive Annual Financial Report along with the external auditor's report to management
(regarding the City's internal control structure and compliance with applicable laws and
regulations) serve to satisfy these requirements.
9. Working Paper Retention and Access To Working_Papers
All working papers and reports must be retained, at the Auditor's expense, in accordance with
requirements and procedures set forth by section 6 of Appendix "A" in accordance with the City
Charter. Auditor is also required to make working papers available, upon request, to the
following parties or their designees:
City of Fort Worth, Texas
August 4, 2016
Page 24
*City of Fort Worth
•U.S. General Accounting Office (GAO)
•Cognizant Agency
®Parties designated by the federal or state governments or by the City of Fort Worth as part of an
audit quality review process.
• Auditors of entities of which the City of Fort Worth is sub-recipient of grant funds.
10. In addition, Auditor shall respond to the reasonable inquiries of successor auditors and allow
successor auditors to review working papers relating to matters of continuing accounting
significance. As requests for copies of working papers are fulfilled, Auditor will be required to
notify the Director of Finance of the request, as appropriate.
11. Assistance Paper To Be Provided To The Auditor And Report Preparation
v Finance Department
The Finance Department staff and responsible management personnel will be available during
the audit to assist the firm by providing information, documentation and explanations. The
preparation of confirmations will be the responsibility of the City of Fort Worth.
® Information Technology (IT)Assistance
Certain IT personnel will be available to assist the auditor in performing the engagement. IT
personnel will also be available to provide systems documentation and explanations. The Auditor
access to the City's Network will be in accordance with a separately executed Network Access
Agreement.
*Work Area,Network, Telephones, Photocopying and Fax Machines
The City of Fort Worth will provide the auditor with reasonable workspace, desk and chairs.
City of Fort Worth, Texas
August 4, 2016
Page 25
The auditor will also be provided access to telephone lines, photocopying facilities and facsimile
machines for the on-site audit staff.
12. AUDIT SCHEDULE
Auditor will work with the City to comply with the following Audit Schedule:
TASK ISCHEQUILE
PLANNING
Entrance Conference The Fourth Week Of July
Client Service Planning Meeting The Last Week Of August
Present Audit Plan To City Representatives The Last Business Day Of
August
INTERIM FIELDWORK
On-Site Interim Fieldwork August Through October
Present Interim Findings And To-Date The Second Week of
Management Letter Listing to City Representatives November
YEAR-END FIELDWORK
Coordination of Year End Fieldwork Status With November Through February
The Finance Department
On-Site Year-End Financial Statement Fieldwork November Through February
REPORTS
General City Work Plan August 31, 2016
Compliance Report on City's Annual Appropriation December 31, 2016
Ordinance
Compliance Report On City's Investment Policy December 31, 2016
And The Texas Police and Fireman Insurance
Association (PFIA)
Compliance Report-TCEQ Local Government February 15, 2017
Financial Test.
Single Audit Report February 15, 2017
Comprehensive Annual Financial Report Opinion — February 15, 2017
City
Report to Management—City February 15, 2017
City of Fort Worth, Texas
August 4, 2016
Page 26
Appendix C
Payment Schedule
This Appendix"C" is part of the engagement letter between Weaver and Tidwell, L.L.P. and the
City of Fort Worth.
Total All-Inclusive Maximum Price
The parties agree that the total all-inclusive maximum price contains all direct and
indirect costs including all out-of-pocket expenses. The parties further agree that total
payment made under this Agreement during the initial term shall not exceed
$2,340,000.00.
Rates by Partner, Specialist, Supervisor and Staff Level Times/Hours Anticipated for
each are contained in the tables provided below.
Out-Of-Pocket Expenses Included in the Total All-Inclusive Maximum Price and
Reimbursement Rates
Auditor has allocated an engagement team that is a Fort Worth-based team. Auditor
therefore expects to incur minimal travel costs in the performance of the engagement. In
the event other team members are brought in from other Auditor's locations to assist in
the engagement Auditor will incur these costs. Additionally Auditor will not charge for
other out-of-pocket expenses such as report preparation or production.
Rates for Additional Professional Services
The standard hourly rates reflected below serve as a guide for estimating fees associated
with additional professional services. However, fees for any given engagement are
ultimately determined based upon the timing of the work, its nature and associated risk.
The rates shown below reflect approximately a 30% discount to Auditor's standard rates.
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City of Fort Worth, Texas
August 4, 2016
Page 27
All-Inclusive Maximum Price FY2016 FY2017 0 :
Annual audit of the financial statements for City of Fort $770,000 $770,000 $800,000
Worth for the fiscal year ending September 30
Hourly Fees
Staff Level Hours Hourly Rate Total
Partners 750 $215 $161,250
Senior Managers 1,000 165 165,000
Senior Associates 2,775 110 305,250
Associates 1,475 95 140,125
Expenses — 0 0
Raw Total 61000 — $771,625
(rounding) ($ 1,625)
Total Fee 6,000 $770,000
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City of Fort Worth, Texas
August 4, 2016
Page 28
Appendix D
Communications with Audit Committee
This Appendix "D" is part of the engagement letter to which these terms are attached (the
engagement letter, including its appendices, the "engagement letter"), between Weaver and
Tidwell, L.L.P. and the City of Fort Worth.
We are responsible for communicating with the Audit Committee significant matters related to
the audit that are, in our professional judgment, relevant to the responsibilities of the Audit
Committee in overseeing the financial reporting process.
In connection with the foregoing, we will communicate to the Audit Committee any fraud we
identify or suspect that involves (1) management, (2) employees of the City who have significant
roles in internal control, or (3) other employees of the City when the fraud results in a material
misstatement of the financial statements. In addition, we will communicate with the Audit
Committee any other matters related to fraud that are, in our professional judgment, relevant to
their responsibilities. We will communicate to management any fraud perpetrated by lower-level
employees of which we become aware that does not result in a material misstatement of the
financial statements; however, we will not communicate such matters to the Audit Committee,
unless otherwise directed by the Audit Committee.
In addition, as required by generally accepted government auditing standards, our report on the
City's internal control over financial reporting and on its compliance with certain provisions of
laws, regulations, contracts, and grant agreements and other matters will include any findings of
material noncompliance of such provisions, fraud, and material abuse that we have identified
during our audit.
We will also communicate, in writing, to management and the Audit Committee any significant
deficiencies or material weaknesses in internal control (as defined in generally accepted auditing
standards) that we have identified during the audit, including those that were remediated during
the audit.
We will also communicate certain matters to management and the Audit Committee, including
our responsibilities for testing and reporting on the City's internal control over financial reporting
and on its compliance with certain provisions of laws, regulations, contracts or grant agreements,
both for the financial statement audit and UGG and UGMS audit. In addition, we will
communicate to management and the Audit Committee the following matters, if any are
identified during our audit: material noncompliance with provisions of laws, regulations,
City of Fort Worth, Texas
August 4, 2016
Page 29
contracts or grant agreements related to major federal and state programs; certain known
questioned costs; known fraud affecting federal and state awards; abuse that is material to a
federal and state program; and other federal and state award audit findings as required by
generally accepted government auditing standards and UGG and UGMS.
We are not required to design procedures for the purpose of identifying other matters to
communicate with the Audit Committee. However, we will communicate to the Audit
Committee matters required by the Auditing Standards and UGG and UGMS.
We may also communicate to management and the Audit Committee on internal control,
compliance, or other matters we observe and possible ways to improve the City's operational
efficiency and effectiveness or otherwise improve its internal control or other policies and
procedures.
[This section intentionally left blank]
City of Fort Worth, Texas
August 4, 2016
Page 30
Appendix E
Verification of Signature Authority
This Appendix"E" is part of the engagement letter between Weaver and Tidwell, L.L.P. and the
City of Fort Worth.
Weaver and Tidwell, L.L.P.
2821 West 7t' Street, Suite 700
Fort Worth, Texas 76107
Auditor hereby agrees to provide the City with Independent audit basic financial statements, but
also the fair presentation of the financial statements of individual funds.
Execution of this Signature Verification Form ("Form") hereby certifies that the following
individuals and/or positions have the authority to legally bind the Company and to execute any
agreement, amendment or change order on behalf of Company. Such binding authority has been
granted by proper order, resolution, ordinance or other authorization of Company. The City is
fully entitled to rely on the warranty and representation set forth in this Form in entering into any
agreement or amendment with Company. Company will submit an updated Form within ten (10)
business days if there are any changes to the signatory authority. The City is entitled to rely on
any current executed Form until it receives a revised Form that has been properly executed by
the Company.
LName: Kevin A. Sanford
Positi : artner
Signature
Name: John J. Mackel III
Srgi-latfre of President/CEO
Date: 9/22/16
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M&C Review Page 1 of 2
Official site of the City of Fort Worth,Texas
CITY COUNCIL AGENDA FURTWflRT1I
COUNCIL ACTION: Approved on 8/2/2016
REFERENCE 13P16-0197 AUDIT
DATE: 8/2/2016 NO.: C-27844 LOG NAME: SERVICES CBR FMS
CODE: C TYPE: NON- PUBLIC CONSENT HEARING: NO
SUBJECT: Execution of Professional Services Agreement with Weaver and Tidwell, L.L.P., d/b/a
Weaver, for Independent External Audit Services in the Amount of$2,340,000.00 for a
Three-Year Initial Term (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council authorize execution of a Professional Services Agreement with
Weaver and Tidwell, L.L.P., d/b/a Weaver, to provide independent external audit services for the City of
Fort Worth in an amount up to $2,340,000.00 for a three-year initial term.
DISCUSSION:
The Financial Management Services Department (FMS)will use the Professional Services Agreement with
Weaver and Tidwell, L.L.P., d/b/a Weaver(Weaver), to obtain independent external auditor services for the
City. Services will include review of the City's financial statements to ensure conformity with generally
accepted accounting principles, examination of compliance with requirements established by state law and
the City Charter and Ordinances and certain limited procedures involving supplementary information
required by the Governmental Accounting Standards Board (GASB). All services will provided in
accordance with generally accepted auditing standards as set forth by the American Institute of Certified
Public Accountants and Government Auditing Standards.
The Request for Proposals (RFP)was advertised in the Fort Worth Star-Telegram on April 6, April 13, April
20 and April 27, 2016. The evaluation criteria focused on experience and performance for comparable
government engagements, implementation of GASB Statements, quality of professional personnel,
availability of technical consultation, proposed staffing plan, techniques, analytical procedures, DBE
participation and price. The responding firms were:
Crowe Horwath, LLP
Deloitte &Touche, LLP
Grant Thornton, LLP
KPMG, LLP
Padgett, Stratemann & Co. LLP
Weaver &Tidwell, L.L.P. d/b/a Weaver
The evaluation committee was comprised of employees from FMS, Code Compliance, Transportation &
Public Works, Economic Development and the M/WBE Office. All responding firms were invited to give a
presentation and participate in an interview process. Based on ratings received in both processes, Weaver
was ranked the highest. Staff agrees the recommended firm meets specifications and that its price is fair
and reasonable.
PRICING ANALYSIS - Weaver's proposed three-year pricing is approximately 10 percent lower than the
next lowest offer and approximately 33 percent lower than the proposed three-year prices offered by the
current contractor. The pricing for each year is as follows:
Year One - $770,000.00
Year Two - $770,000.00
Year Three - $800,000.00
Years Four and Five-Negotiable
http://apps.cfwnet.org/council_packet/mc review.asp?ID=22619&councildate=8/2/2016 9/27/2016
M&C Review Page 2 of 2
M/WBE OFFICE -Weaver and Tidwell, L.L.P. is in compliance with the City's BDE Ordinance by committing
to 15 percent MBE (AA) participation. The City's MBE (AA) goal on this project is 15 percent.
ADMINISTRATIVE CHANGE ORDER -An administrative change order or increase may be made by the
City Manager in an amount of up to $50,000.00 and does not require specific City Council approval as long
as sufficient funds have been appropriated.
RENEWAL OPTION - This Agreement may be renewed after the initial three-year term, for up to two
additional one-year terms. This action does not require City Council approval provided sufficient funds
have been appropriated.
This Agreement will serve ALL COUNCIL DISTRICTS.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that funds are available in the current operating budget of the Financial
Management Services Department and that, prior to an expenditure being made, the Financial
Management Services Department has the responsibility to validate the availability of funds.
TO
Fund Department Account Project Program Activity Budget Reference# Amount
ID ID Year (Chartfield 2)
FROM
Fund Department Account Project Program Activity Budget Reference# Amount
ID ID Year Chartfield 2
10100 0132050 5330500 $10,000.0
Submitted for City Manager's Office by: Susan Alanis (8180)
Originating Department Head: Aaron Bovos (8517)
Additional Information Contact: Jack Dale (8357)
ATTACHMENTS
16-0197 1295 Form.pdf
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=22619&councildate=8/2/2016 9/27/2016
�- -rlS44
CERTIFICATE OF INTERESTED PARTIES
FORM 1295
101`1
Complete Nos,1-4 and 6 if there are interested parties. OFFICE USE ONLY
Complete Nos.1,2,3,5,and 6 if there are no interested parties. CERTIFICATION OF FILING
1 Name of business entity filing form,and the city,state and country of the business entity's place Certificate Number:
of business. 2016-87232
Weaver and Tidwell, L.L.P.
Fort Worth,TX United States Date Filed:
2 Name of governmental entity or state agency that is a party to the contract for which the form is 07/19/2016
being filed.
City of Fort Worth Date ged:
3 Provide the identification number used by the governmental entity or state agency to track or identify the contract,and provide a
description of the services,goods,or other property to be provided under the contract.
RFP 16-0197
Independent External Audit Services
Nature of interest
4
Name of Interested Party City,State,Country(place of business) (check applicable)
Controlling I Intermediary
5 Check only if there is NO Interested Party.
X
6 AFFIDAVIT I swear,or affirm,under penalty of perjury,that the above disclosure is true and correct.
aunu
'�'Fr►y:, ERICA MARTINEZ
Notary Public,State of Texas
My Commission Expires
March 04, 2017
Signature of authooKed agent of contracting business entity
AFFIX NOTARY STAMP/SEAL ABOVE
Sworn to and subscribed before me,by the said 1., P.L)1 n :�s lJ�(�this the !C�day of
20to certify which,witness my hand and seal of office.
-!� 110 iartmo7
ignalure o officer administering oath Printed name of officer administering oath Title of officer administering oath
Forms provided by Texas Ethics Commission www.ethics,state.tx.us Version V1.0.277