HomeMy WebLinkAboutOrdinance 17584-06-2007Ordinance No. 17584-06-2007
AN ORDINANCE INCREASING APPROPRIATIONS IN THE GENERAL FUND IN
THE AMOUNT OF $84,950 AND DECREASING THE UNRESERVED,
UNDESIGNATED FUND BALANCE BY THE SAME AMOUNT, FOR THE
PURPOSE OF FUNDING AN ADDITIONAL INCREASE IN AUDIT FEES TO
DELOITTE & TOUCHE, LLP FOR THE COMPLETION OF THE FISCAL YEAR
2004-2005 AUDIT; PROVIDING FOR A SEVERABILITY CLAUSE; MAKING THIS
ORDINANCE CUMULATIVE OF PRIOR ORDINANCES IN CONFLICT
HEREWITH; AND PROVIDING AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH,
TEXAS:
SECTION 1.
That in addition to those amounts allocated to the various City departments for Fiscal Year 2006-
2007 in the Budget of the City Manager, there shall.also be increased appropriations in the General
Fund in the amount of $84,950 and decreasing the unreserved, undesignated fund balance by the
same amount, for the purpose of funding an additional increase in audit fees to Deloitte & Touche,
LLP, for completion of the Fiscal Year 2004-2005 Audit.
SECTION 2.
That should any portion, section or part of a section of this ordinance be declared invalid,
inoperative or void for any reason by a court of competent jurisdiction, such decision, opinion or
judgment shall in no way impair the remaining portions, sections, or parts of sections of this
ordinance, which said remaining provisions shall be and remain in full force and effect.
SECTION 3.
That this ordinance shall be cumulative of Ordinance No. 17142 and all other ordinances and
appropriations amending the same except in those instances where the provisions of this ordinance
are in direct conflict with such other ordinances and appropriations, in which instance said
conflicting provisions of said prior ordinances and appropriations are hereby expressly repealed.
SECTION 4.
ADOPTED AND EFFECTIVE: June 5 2007
This ordinance shall take effect upon adoption.
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 6/5/2007 -Ordinance No. 17584-06-2007
DATE: Tuesday, June 05, 2007
LOG NAME: 13ADDPAYFY05AUD REFERENCE NO.: G-15745
SUBJECT:
Authorize Additional Compensation to be Paid to Deloitte &Touche, LLP, for FY2005 Audit and
Adopt Supplemental Appropriation Ordinance
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached supplemental appropriation ordinance increasing appropriations in the General Fund
in the amount of $84,950 and decreasing the unreserved, undesignated fund balance by the same amount;
and
2. Authorize an additional $84,950 for independent auditing services to Deloitte &Touche, LLP for the
Fiscal Year 2005 Single Audit and Comprehensive Annual Financial Report, establishing the FY2005 audit
fee at $1,025,760.
DISCUSSION:
The purpose of this Mayor and Council Communication is to authorize additional appropriations for
services rendered by the external auditor Deloitte &Touche, LLP in completion of the FY2005
Comprehensive Annual Financial Report (CAFR) and Single Audit which were issued on April 25, 2007.
On April 6, 2004, (M&C C-20025) the City Council authorized a five year contract with Deloitte &Touche,
LLP for audits of Fiscal Years 2004-08. The fees proposed for the FY2004 and FY2005 audits were
$272,000 and $285,600, respectively.
The FY2004 audit required a significant amount of work due primarily to material weaknesses related to
the cash reconciliation, accounting for capital assets and financial accounting and reporting
weaknesses. The audit required extensive cash reconciliation work from FY1998 through FY2004 and
major updating of fixed assets inventories. The significant amount of additional auditing work, review of
accounts and required testing resulted in a cost increase of $267,000. Increases authorized by M&Cs C-
21083, G-15121 and G-15466 combined with the originally proposed fee resulted in a FY2004 authorized
audit fee of $542,500. The final actual fee for this audit was $539,000.
Due to the findings of the FY2004 Audit and the anticipated overlap of these issues into the FY2005 Audit,
Deloitte &Touche submitted a revised fee estimate for the FY2005 Audit from $285,600 to $541,200. The
need to address these overlapping issues, combined with extensive cash reconciliations, capital assets
accounting, depreciation and testing and the significant amount of component units recording and
validation has required a significant amount of additional work by the external auditor. The review,
research testing and validation of a number of accounts, and auditing transactions, contract agreements
and capital assets has resulted in a total and final fee of $1,025,760 for the FY2005 CAFR and Single
Audit.
Logname: 13ADDPAYFYOSAUD Page 1 of 2
Listed below is a summary by fiscal year of estimated audit fees, budgeted audit fees and actual
expenditures for the FY2005 audit:
Estimated FY05 Budgeted FY05 Actual FY05
Audit Fees Audit Fees Audit Fees
Fiscal Year 2005 $285,600.00 $285,600.00
Fiscal Year 2006 $255,600.00 $508,710.00 $253,110.00
Fiscal Year 2007 $484,560.00 $146,500.00 $772,650.00
Additional Appropriation $84,950.00
Totals $1,025,760.00 $1,025,760.00 $1,025,760.00
In addition to the external auditor, the City directly engaged in professional services of Emma Walker, a
CPA and certified MWBE spending $131,512 for internal support for the FY2004-2005 CAFR.
M/WBE: A M/WBE goal was established on the original 2005 Audit of 20 percent. The resulting M/WBE
participation on the original fee amount is approximately 25 percent. Due to extenuating circumstances in
the Finance Department, as explained above, additional work was required of the audit firm that has
resulted in the 25 percent equating to 7 percent M/WBE participation of the final amount requested via this
M&C.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that upon approval of the above recommendations and adoption of the
attached supplemental appropriation ordinance, funds will be available in the current operating budget, as
appropriated, of the General Fund. Upon approval, the unaudited, unreserved, undesignated fund balance
of the General Fund will be $6,081,478, which is the amount available above the minimum reserve fund
balance of $46,845,951 required by the City's Financial Management Policy Statements (i.e., 10 percent of
the current-year adopted budget expenditures less the annual transfer from the General Fund to the Debt
Service Fund).
TO Fund/Account/Centers FROM Fund/AccountlCenters
GG01 53120D 0901000 $84.950.00
Submitted for City Manager's Office b~ Karen Montgomery (6222)
Originating Department Head: Richard Zavala (Acting) (8313)
Additional Information Contact: Mae Gray-Rossi (8325)
Logname: 13ADDPAYFYOSAUD Page 2 of 2