HomeMy WebLinkAboutContract 43808 (2)eloitte
i
August 1, 2012
Deloitte & Touche LLP
Suite 1501
201 Main Street
Fort Worth, TX 76102-3134
USA
Tel: +1 817 347 3300
Fax: +1 817 336 2013
www.deloitte.com
City Secretary Contract No. k
CITY OF FORT WORTH
DELOITTE & TOUCHE LLP
INDEPENDENT AUDIT ENGAGEMENT
Chair, Audit and Finance Advisory Committee
City of Fort Worth, Texas
1000 Throckmorton
Fort Worth, Texas
Ms. Darlene Allen
City Auditor
City of Fort Worth, Texas
1000 Throckmorton
Fort Worth, Texas
Dear Ms. Allen:
Deloitte & Touche LLP ("D&T" or "we" or "us") is pleased to serve as independent auditors for
City of Fort Worth (the "City" or "you" or "your"), each individually referred to as a "party,"
collectively referred to as the "parties." Mr. Terry Kile, Lead Client Service Director, will be
responsible for the services that we perform for the City hereunder, hereafter referred to as the
"engagement."
In addition to the audit services we are engaged to provide under this engagement letter, we
would also be pleased to assist the City on issues as they arise throughout the year. Hence, we
hope that you will call Mr. Terry Kile whenever you believe D&T can be of assistance.
This engagement letter shall consist of the following documents plus appendices:
This Engagement Letter
Appendix A — Description of D&T's Responsibilities and an Audit Under Generally
Accepted Auditing Standards, Generally Accepted Government Auditing Standards, US
Office of Management and Budget (OMB) Circular A-133 Compliance Supplement
("OMB Circular A-133"), and the State of Texas Governor's Office of Budgets and
Planning Uniform Grant Management Standards ("UGMS')
- Appendix B — Management's Responsibilities
Appendix C — Communications with the Audit and Finance Advisory Committee
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Appendix D — Coordination of the Audit
Appendix E — Circumstances Affecting Timing and Fee Estimate
Appendix F — General Business Terms
Appendix G — Dispute Resolution Provision
All appendices are attached hereto, incorporated by reference herein and made a part of this
engagement letter for all purposes. The services to be performed by D&T pursuant to this
engagement are subject to the terms and conditions set forth herein and in the accompanying
appendices. Such terms and conditions shall be effective as of the date of the commencement of
such services.
Audit of Basic Financial Statements and Other Reporting
Our engagement is to perform an audit in accordance with (1) auditing standards generally
accepted in the United States of America ("generally accepted auditing standards") and (2) the
standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States ("generally accepted government auditing
standards"). The objectives of an audit conducted in accordance with the aforementioned
standards are to:
• Express an opinion on the fairness of the presentation of each opinion unit of the City's
basic financial statements, and to disclaim an opinion on the required supplementary
information for the year ending September 30, 2012, in conformity with accounting
principles generally accepted in the United States of America ( `generally accepted
accounting principles"), in all material respects, except for the Employees' Retirement
Fund of the City of Fort Worth and the Villas of Eastwood Terrace LLC which are
audited by other auditors
• Express an opinion on whether the supplementary information that accompanies the
basic financial statements including the schedule of expenditures of federal awards, are
presented fairly, in all material respects, in relation to the basic financial statements
taken as a whole
• 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
for the year ending September 30 2012, based on an audit of financial statements
performed in accordance with the standards applicable to financial audits contained in
generally accepted government auditing standards
• Report on the City's compliance with requirements applicable to each major program
and on internal control over compliance in accordance with the OMB Circular A-133 and
UGMS.
Appendix A contains a description of our responsibilities and an audit under generally accepted
auditing standards, generally accepted government auditing standards and OMB Circular A-133
and UGMS.
Our ability to express any opinion and the wording thereof will, of course, be dependent on the
facts and circumstances at the date of our reports. If, for any reason, we are unable to complete
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the audit or are unable to form or have not formed any opinion, we may decline to express any
opinion or decline to issue any report as a result of this engagement. If we are unable to complete
our audit or if any report to be issued by D&T as a result of this engagement requii es
modification, the reasons therefor will be discussed with the Audit and Finance Advisory
Committee, the City's management, and as necessary, the City Council
Our reports on (1) 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 and (2)
the City's compliance with requirements under each major program and internal control over
compliance will state and the City agrees that such reports are intended solely for the information
and use of the City Council, the Audit and Finance Advisory Committee, management, federal
awarding agencies, and pass -through entities and that such reports are not intended to be and
should not be used by anyone other than these specified parties.
Management's Responsibilities
Appendix B describes management's responsibilities for (1) the basic financial statements and all
accompanying information, (2) representation letters, (3) the process for obtaining preapproval of
services, (4) independence matters relating to providing certain services, and (5) independence
matters relating to hiring
Responsibility of the Audit and Finance Advisory Committee
As independent auditors of the City, we acknowledge that the Audit and Finance Advisory
Committee and the City Council ale 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 and Finance Advisory Committee. You have advised us that the services to
be performed under this engagement letter, including, where applicable, the use by D&T of
affiliates or related entities, and the use by D&T of selected Minority and Women Business
Enterprises ("MWBE") subcontiactors in connection with this engagement, have been approved
by the Audit and Finance Advisory Committee in accordance with the City Council's
established preapproval policies and procedures.
Term of the Engagement
This engagement shall begin upon the last day executed by both parties ("Effective Date") and
shall expire upon completion of the engagement for the year ended September 30, 2012. This
engagement shall be renewed on an annual basis for the following two (2) consecutive years
upon the parties execution of an annual engagement letter in a form substantially similar to this
engagement letter. This is the second of four renewals. Following the expiration of the fourth
renewal, the City shall have the sole option to renew this engagement for each of the five (5)
following consecutive years upon the parties' execution of an annual engagement letter in a form
substantially similar to this engagement letter.
Communications with the Audit and Finance Advisory Committee
Appendix C describes various matters that we are required by generally accepted auditing
standards and generally accepted government auditing standards to communicate with the Audit
and Finance Advisory Committee and management.
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Fees
Our fees for the audit of the City's financial statements will be based on personnel assigned and
actual hours incurred plus expenses. Based on our anticipated levels of participation, we
estimate our blended hourly rates, audit hours, and total costs for the audit of the City's basic
financial statements for fiscal years 2010 -2014 to be as follows:
Year
2012
2013
2014
Estimated
Normal Hours
6,000
6,000
6,000
Estimated
Additional
Hours Required
1,600
1,600
1,600
Blended Rate Estimated Total
Cost
$143.00
$150.00
$158.00
$1,086,800.00
$1,140,000.00
$1,200,800.00
The fees above assume six major programs in the federal and state single audits. An additional
$10,000 will be billed for each major program that is required to be tested in excess of six
Should the required leverage model change (i.e. more experienced personnel time be required
than expected) these rates may change. If any such situation occurs, we will promptly notify
you and discuss with you the need to adjust our rates. Should the City reduce or eliminate all
control weaknesses that are classified as significant deficiencies and material weaknesses, the
number of additional hours to complete the audits may be reduced; thereby lowering the
estimated total costs accordingly. Invoices shall be sent monthly, and payments are due within
thirty (30) days of receipt of the invoice.
Non -appropriation of Funds
D&T and the City agree that all payments due hereunder shall be subject to the City Council's
appropriation of funding foi this engagement. In the event no funds or insufficient funds are
appropriated by the City for any payments due hereunder, during this engagement, or any
renewal term, the City will notify D&T of such occurrence and the City shall have the right to
terminate this engagement without penalty or expense to the City of any kind whatsoever.
Notwithstanding the above, the City shall pay D&T for services actually rendered and expenses
incurred up to the effective date of termination.
Our continued service on this engagement is dependent upon payment of our invoices in
accordance with these terms To the extent that certain circumstances affecting time and fee
estimate, as listed in Appendix E arise during this engagement, our fee estimate also may be
significantly affected, and additional fees may be necessary. We will notify you promptly of any
circumstances we encounter that could significantly affect our estimate and discuss with you any
additional fees, as necessary. Additional services provided beyond the scope of services
described herein will be billed separately as approved by the City Council as necessary.
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Additional services requested beyond the scope of services described herein would be subject to
the mutual agreement of the City and D&T at such time as D&T is engaged to perform the
services and would be described in a separate engagement letter.
Access to Working Papers by Regulators
In accordance with the requirements of generally accepted government auditing standards, we are
required to make all audit -related documents, including auditors' reports, working papers, and
management letters available to a federal agency or the Comptroller General of the United States
upon their request for their regulatory oversight purposes. If such a request is made, we will
inform you pi for to providing such access. The working papers for this engagement are the
property of D&T and constitute D&T's confidential information. We may request confidential
treatment of D&T information. If we are requested to make photocopies of audit -related
documents, we will maintain control over duplication of all information. City of Fort Worth
hereby giants us permission to provide access to and to make and permit others to make
photocopies of all audit -related documents, including auditors' reports, working papers and
management letters, to representatives of the United States Government Accountability Office
(GAO) or othei appropriate government audit staffs. D&T may require its personnel to supervise
the photocopying of audit -related documents and may specify the location at which such
documents may be photocopied. The working papers relating to this audit will be retained by us
for a minimum of three years from the dates of the reports issued or such longer period as
required to satisfy legal and administrative requirements.
Inclusion of D&T Reports or References to D&T in Other Documents or Electronic
Sites
If the City intends to publish or otherwise reproduce in any document any report issued as a
result of this engagement or otherwise make reference to D&T in a document that contains other
information in addition to the audited basic financial statements (e.g. in a periodic filing with a
regulator, in a debt or equity offering circular, or in a private placement memorandum), thereby
associating D&T with such document, the City agrees that its management will provide D&T
with a draft of the document to read and obtain our approval for the inclusion or incorporation by
reference of such reports, or the reference to D&T, in such document before the document is
printed and distributed. The inclusion or incorpoiation by reference of any of our reports in any
such document would constitute the reissuance of such reports. The City also agrees that its
management will notify us and obtain our approval prior to including any of our reports on an
electronic site.
Our engagement to perform the services described herein does not constitute our agreement to be
associated with any such documents published or reproduced by or on behalf of the City. Any
request by the City to reissue any report issued as a result of this engagement, to consent to any
such report's inclusion or incorporation by reference in an offering or othei document, or to
agree to any such report's inclusion on an electronic site will be considered based on the facts
and circumstances existing at the time of such request. The estimated fees outlined herein do not
include any services that would need to be performed in connection with any such request; fees
for such services (and their scope) would be subject to the mutual agreement of the City and
D&T at such time as D&T is engaged to perform the services and would be described in a
separate engagement letter. Our fee for this additional work is $5,000 per bond issuance. Should
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the City require agreed -upon procedures related to revenue bond coverage, our fee would be
increased to $7,500 per bond issuance.
Notwithstanding the foregoing, D&T understands and acknowledges that the City is a public
entity under the laws of the State of Texas, and as such, all documents and data held by the City
are subject to disclosure under Chapter 552 of the Texas Government Code the Texas Public
Information Act (the "Act'). If the City is required to disclose any documents that may reveal any
D&T proprietary information to third parties under the Act, or by any other legal process, law,
rule or judicial order by a court of competent jurisdiction, the City will, unless otherwise
prohibited by law or regulation, notify D&T prior to disclosure of such documents. The City
shall not be liable or responsible in any way for the disclosure of information not clearly marked
as `Proprietary/Confidential Information' or if disclosure is required by the Act or any other
applicable law or court order In the event there is a request for such information under the Act, it
will be the responsibility of D&T to submit reasons objecting to disclosure. A determination on
whether such reasons are sufficient will not be decided by the City, but by the Office of the
Attorney General of the State of Texas, or by a court of competent Jurisdiction.
2013 Annual Audit
The parties acknowledge and agree that each performance of an annual audit or issuance of any
report by D&T on the City's basic financial statements, the City's internal control over financial
reporting and its compliance with certain provisions of laws, regulation, contracts, and grant
agreements, and the City's compliance with requirements under OMB Circular A-133 and
UGMS is a separate engagement that is expected to be performed under the terms of a separate
mutually agreed upon engagement letter. If the City requests and we agree to commence
performing any such separate engagement pi for to the execution of a separate mutually agreed
upon engagement letter specific to such engagement, our performance of such engagement shall
be governed by terms identical to the terms hereof unless and until a separate engagement letter
specific to such engagement has been entered into by the parties.
This engagement letter, including Appendices A through G attached hereto and made a part
hereof, constitutes the entire agreement between the parties with respect to this engagement and
supersedes any other prior or contemporaneous agreements or understandings between the
parties, whether written or oral, relating to this engagement.
If the above terms are acceptable and the services described are in accordance with your
understanding, please sign the copy of this engagement letter in the space provided and return it
to us.
[Signature Page Follows]
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ACCEPTED AND AGREED:
L L P
Deloitte & Touche LLP
ACCEPTED AND AGREED:
City of Fort Worth, Texas
By: VA-berzintee.
Charles W. Daniels, Assistant City Manager
Date: /0a ZS. /Z
APPROVAL RECOMMENDED:
By:
Darlene Allen, City Auditor
APPROVED T RM A LEGALITY:
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Maleshia B. : rmer
Senior Assistant City Attorney
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ATTEST:
By:
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Mary KayseryCity Secretary xitetztettia#cr
Contract Authorization:
M&C: C-24442: Approved 9/14/2010
OFFICIAL RECORD
7
CM`[17 SECRETARY
FT. WORM TX
APPENDIX A
DESCRIPTION OF D&T'S RESPONSIBILITIES AND AN AUDIT UNDER GENERALLY
ACCEPTED AUDITING STANDARDS, GENERALLY ACCEPTED GOVERNMENT
AUDITING STANDARDS, AND OMB CIRCULAR A-133 AND UGMS
This Appendix A is part of the engagement letter dated August 1, 2012 between Deloitte &
Touche LLP and City of Fort Worth.
Our Responsibilities
Our responsibilities under generally accepted auditing standards and generally accepted
government auditing standards include:
• Forming and expressing an opinion about whether the basic financial statements that
have been prepared by management with the oversight of the Audit and Finance
Advisory Committee are presented fairly, in all material respects, in conformity with
generally accepted accounting principles
• Reporting on the scope and results of testing of the City's internal control over financial
reporting and its compliance with certain provisions of laws, regulations, contracts, and
grant agreements
The audit of the basic financial statements does not relieve management or the Audit and Finance
Advisory Committee of their responsibilities.
Components of an Audit in Accordance With Generally Accepted Auditing
Standards, Generally Accepted Government Auditing Standards, and OMB
Circular A-133 and UGMS
An audit includes the following:
• Obtaining an understanding of the City and its environment, including internal control,
sufficient to assess the risks of material misstatement of the basic financial statements
and to design the nature, timing, and extent of further audit procedures
• Consideration of internal control over financial reporting, as a basis for designing 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 over financial
reporting
• Consideration of internal control and compliance over major federal programs, as a basis
for determining the City s internal control over compliance with federal laws and other
laws and regulations
• Examining, on a test basis, evidence supporting the amounts and disclosures in the basic
financial statements
• Inquiring directly of the Audit and Finance Advisory Committee regarding its views
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about the risks of fraud and whether the Audit and Finance Advisory Committee has
knowledge of any fraud or suspected fraud affecting the City
• Assessing the accounting principles used and significant estimates made by management
• Evaluating the overall basic financial statement presentation
• Determining which federal programs should be considered major programs and thus be
included within the scope of the compliance audit
• Evaluating the overall presentation of the schedule of expenditures of federal awards in
relation to the basic financial statements taken as a whole
• Evaluating the items to be included in the schedule of findings and questioned costs and
the reasonableness of the summary schedule of prior -year findings
• Obtaining and reporting the views of responsible officials concerning the findings,
conclusions, and recommendations, as well as their planned corrective actions
• Preparing a schedule of findings and questioned costs
• Completing the auditor -prepared sections of and signing the OMB Data Collection Form
that summarizes our audit findings.
We will also perform tests of the City's compliance with certain provisions of laws, regulations,
and the provisions of contracts and grant agreements. However, it is not our objective to provide
an opinion on overall compliance with those provisions, and accordingly, we will not express
such an opinion.
As part of our audit of the City's compliance with the requirements of major federal programs,
we will obtain an understanding of the City's internal control related to administering major
federal programs and we will assess risk as required by OMB Circular A-133 and UGMS for the
purpose of establishing the nature, timing, and extent of auditing procedures necessary for
expressing an opinion concerning compliance with laws and regulations related to major federal
award programs.
In planning the audit, we will follow up on known significant findings and recommendations
from previous financial audits attestation engagements, performance audits, or other studies that
directly relate to the objectives of the current audit to determine the effect on our risk assessment
and audit procedures.
Generally accepted accounting principles provide for certain required supplementary information
(RSI), such as a management's discussion and analysis, to accompany the City's basic financial
statements. As part of our engagement, we will apply certain limited procedures to the City's
RSI. Those limited procedures will consist principally of inquiries of management regarding the
methods of measurement and presentation, which management will affirm to us in its
representation letter. Unless we have unresolved doubts with the presentation of the RSI or we
are unable to complete our procedures, we will disclaim an opinion on the RSI.
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Supplementary information other than RSI, such as the schedule of expenditures of federal
awards, and statistical data, also accompany the City's basic financial statements. We will
subject all supplementary information that is financially oriented to the audit procedures applied
in our audit of the basic financial statements and render our opinion on whether that information
is fairly presented, in all material respects, in relation to the City's basic financial statements
taken as a whole. We will disclaim an opinion on supplementary information that comprises
nonaccounting information or accounting information not directly related to the basic financial
statements. We will also make specific inquiries of management about supplementary
information, which management will affirm to us in its representation letter.
Reasonable Assurance
We will plan and perform our audit to obtain reasonable assurance about whether the basic
financial statements for each opinion unit are free of material misstatement whether caused by
error or fraud, and we will perform tests of the City s compliance with certain provisions of laws,
regulations, contracts, and grant agreements However, because of the characteristics of fraud, a
properly planned and performed audit may not detect a material misstatement or material
noncompliance. Therefore, an audit conducted in accordance with generally accepted auditing
standards and generally accepted government auditing standards is designed to obtain reasonable,
rather than absolute, assurance that the basic financial statements are free of matei ial
misstatement and that the City is in compliance with the applicable specific requirements. An
audit is not designed to detect error or fraud that is immatei ial to the basic financial statements or
to detect immaterial instances of noncompliance, nor is it designed to provide assurance on
internal control or to identify deficiencies in internal control.
We will also plan and perform our audit to obtain reasonable assurance about whether
noncompliance with the types of compliance requirements that are applicable to the City's major
federal programs could have a direct and material effect on each of its major federal programs
An audit of compliance includes examining, on a test basis, evidence about the City's
compliance with those requirements and performing such other procedures as we consider
necessary in the circumstances. Our audit does not provide a legal determination on the City's
compliance with those requirements.
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APPENDIX B
MANAGEMENT'S RESPONSIBILITIES
This Appendix B is part of the engagement letter dated August 1, 2012 between Deloitte &
Touche LLP and City of Fort Worth.
Financial Statements, Internal Control, and Compliance
The overall accuracy of the basic financial statements and all accompanying information and
their conformity with generally accepted accounting principles is the responsibility of the City's
management. In this regard, management has the responsibility for, among other things:
• Selecting and applying the accounting policies
Establishing and maintaining effective internal control over financial reporting and
compliance with laws, regulations, and provisions of contracts or grant agreements
• Designing and implementing programs and controls to prevent and detect fraud
• Identifying and ensuring that the City complies with the laws and regulations applicable
to its activities and the provisions of contracts or grant agreements, and informing us of
any known material violations of such laws, regulations, or provisions
• Adjusting the basic financial statements to correct material misstatements
• Making all financial records and related information available to us
• Taking timely and appropriate steps to remedy fraud illegal acts, violations of provisions
of contracts or grant agreements, or abuse that we report
• Having a process to track the status of audit findings and recommendations
• Identifying for us previous financial audits, attestation engagements, performance audits,
or other studies related to the objectives of our audit and the corrective actions taken to
address significant findings and recommendations
• Providing its view on our current findings, conclusions, and recommendations, as well as
management's planned corrective actions, for our reports. The corrective action plan that
the City develops for its OMB Circular A-133 and UGMS reporting package may fully
or partially satisfy this responsibility
Submitting the reporting package and OMB Data Collection Form to the Federal Audit
Clearinghouse.
•
•
• Providing D&T with (1) access to all information of which management is aware that is
relevant to the preparation and fair presentation of the financial statements, such as
records, documentation, and other matters (2) additional information that we may
request from management for the purpose of our audit, and (3) unrestricted access to
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personnel within the City from whom we determine it necessary to obtain evidence
Representation Letters
We will make specific inquiries of the City's management about the representations
(1) embodied in the basic financial statements and all accompanying information, (2) regarding
the effectiveness of internal control, and (3) regarding the City's compliance with laws
regulations, and the provisions of contracts and grant agreements. Additionally, we will request
that management provide to us the written representations the City is required to provide to its
independent auditors under generally accepted auditing standards and generally accepted
government auditing standards. As part of our audit procedures, we will request that management
provide us with a representation letter that includes, among other things:
• Acknowledgment of management's responsibility for the preparation of the basic
financial statements, all accompanying information and for compliance with laws and
regulations applicable to federal award programs
• Acknowledgment of management's responsibility for the design and implementation of
programs and controls to prevent and detect fraud
• Affirmation of management's knowledge of any fraud or suspected fraud affecting the
City involving management, employees who have significant roles in internal control,
and others where the fraud could have a material effect on the basic financial statements
• Affirmation of management's knowledge of any allegations of fraud or suspected fraud
affecting the City
• Affirmation of management's belief that the effects of any uncorrected financial
statement misstatements aggregated by us during the current audit engagement and
pertaining to the latest period presented are immaterial, both individually and in the
aggregate, to the basic financial statements taken as a whole for the applicable opinion
units.
We will also request that management confirm certain representations made to us during our
audit. The responses to those inquiries and related written representations of management
required by generally accepted auditing standards and generally accepted government auditing
standards are part of the evidential matter that D&T will rely on in forming its opinion on the
City's basic financial statements. Because of the importance of management s representations,
the City agrees to release and indemnify D&T its subcontractors, and their respective personnel
from all claims, liabilities, and expenses relating to our services under this engagement letter
attributable to any misrepresentation by management.
Independence Matters Relating to Providing Certain Services
In connection with our engagement, D&T, management, and the Audit and Finance Advisory
Committee will assume certain roles and responsibilities in an effort to assist D&T in
maintaining independence. Management of the City will ensure that the City has policies and
procedures in place for the purpose of ensuring that the City will not act to engage D&T or
accept from D&T any service that under American Institute of Certified Public Accountants
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(AICPA), generally accepted government auditing standards, or other applicable rules would
impair D&T's independence. All potential services are to be discussed with the Lead Client
Service Director.
Independence Matters Relating to Hiring
Management will coordinate with D&T to ensure that D&T's independence is not impaired by
hiring former or current D&T partners principals, or professional employees in a key position, as
defined in the AICPA Code of Professional Conduct, that would cause a violation of the AICPA
Code of Professional Conduct generally accepted government auditing standards, or other
applicable independence rules. Any employment opportunities with the City for a former or
current D&T partner, principal, or professional employee should be discussed with Mr. Kile
before entering into substantive employment conversations with the former or current D&T
partner, principal, or professional employee.
For purposes of the preceding two paragraphs, "D&T" shall mean Deloitte & Touche LLP and its
subsidiaries; Deloitte Touche Tohmatsu Limited its member firms the affiliates of Deloitte &
Touche LLP, Deloitte Touche Tohmatsu Limited, and its member firms; and, in all cases, any
successor or assignee.
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APPENDIX C
COMMUNICATIONS WITH THE AUDIT AND FINANCE ADVISORY COMMITTEE
This Appendix C is part of the engagement letter dated August 1, 2012 between Deloitte &
Touche LLP and City of Fort Worth.
Significant Matters
We are responsible for communicating significant matters related to the audit that are, in our
professional judgment, relevant to the responsibilities of the Audit and Finance Advisory
Committee in overseeing the financial reporting piocess.
Fraud and Illegal Acts
We will report directly to the Audit and Finance Advisory Committee any fraud of which we
become aware that involves senior management and any fraud (whether caused by senior
management or other employees) of which we become aware that causes a material misstatement
of the basic financial statements. We will report to senior management any fraud perpetrated by
lower -level employees of which we become aware that does not cause a material misstatement of
the basic financial statements; however, we will not report such matters directly to the Audit and
Finance Advisory Committee, unless otherwise directed by the Audit and Finance Advisory
Committee
We will inform the appropriate level of management of the City and determine that the Audit and
Finance Advisory Committee is adequately informed with respect to illegal acts that have been
detected or have otherwise come to our attention in the course of our audit unless the illegal acts
are clearly inconsequential.
Internal Control Matters
We will communicate, in writing, to management and the Audit and Finance Advisory
Committee all significant deficiencies and material weaknesses identified during the audit as
required by AICPA AU 325, Coininunicating Intel nal Control Related Matters Identified in an
Audit, and generally accepted government auditing standards. Our written communication will
identify those matters considered by D&T to be significant deficiencies and those that are
considered by D&T to be material weaknesses.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that
is less severe than a material weakness, yet important enough to merit attention by those charged
with governance A material weakness is a deficiency, or combination of deficiencies, in internal
control, such that there is a reasonable possibility that a material misstatement of the City's
financial statements will not be prevented, or detected and corrected on a timely basis.
We will also communicate certain matters to management and the Audit and Finance Advisory
Committee, including our responsibilities for testing and reporting on the City's internal control
over financial reporting and on its compliance with laws regulations, and provisions of contracts
or grant agreements both for our financial statement audit and our compliance audit of major
federal programs.
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Other Matters
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 findings of material
violations of such provisions, fraud and material abuse. In addition, we will communicate to
management and the Audit and Finance Advisory Committee the following matters, if any are
identified during our audits: material noncompliance with laws, regulations, and provisions of
contracts or grant agreements related to major programs' certain known questioned costs; fraud
affecting federal awards; abuse that is material to a federal program; and other federal award
audit findings as required by generally accepted government auditing standards and OMB
Circular A-133 and UGMS.
As part of our audit, we will be alert to situations or transactions that could be indicative of abuse
as defined by generally accepted government auditing standards, which involves behavior that is
deficient or improper when compared with behavior that a prudent person would consider
reasonable and necessary business practice given the facts and circumstances. Abuse also
includes misuse of authority or position for personal financial interests or those of an immediate
or close family member or business associate. The determination of abuse is subjective; generally
accepted government auditing standards do not require us to provide reasonable assurance of
detecting abuse, and we will not design the audit to detect abuse. However, if we become aware
of abuse that could be quantitatively or qualitatively material to the basic financial statements,
we will apply procedures specially directed to ascertain the potential effect on the basic financial
statements or other financial data significant to the audit objectives. Under generally accepted
auditing standards and generally accepted government auditing standards, we may be required to
directly report fraud illegal acts, violations of provisions of contracts or grant agreements, and
abuse to outside parties.
Generally accepted auditing standards and generally accepted government auditing standards do
not require us to design procedures for the purpose of identifying other matters to communicate
with the Audit and Finance Advisory Committee. However, we will communicate to the Audit
and Finance Advisory Committee matters required by AICPA AU 380, The Auditor's
Communication with Those Charged with Governance.
We may also communicate to management and the Audit and Finance Advisory 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.
15
APPENDIX D
COORDINATION OF THE AUDIT
This Appendix D is part of the engagement letter dated August 1, 2012 between Deloitte &
Touche LLP and City of Fort Worth.
We will plan the performance of our audit in accordance with the following estimated timetable:
Audit Performance Schedule:
Planning
Interim audit procedures
Year-end audit procedures
Estimated to Targeted for
Begin Completion
August
2012
August
2012
December
2012
the Audit and Finance Advisory Committee
Communications:
Report on audit, including communications required
by AICPA AU 380
Communication of control -related matters (as
required by AICPA AU 325)
Report on the City's internal control over financial
reporting and on compliance with certain provisions
of laws, regulations, contracts, and grant agreements
Report on the City's compliance with requirements
applicable to each major program and on internal
control over compliance as required by OMB
Circular A-133 and UGMS
October
2012
November
2012
March
2013
March 2013
March 2013
March 2013
March 2013
16
APPENDIX E
CIRCUMSTANCES AFFECTING TIMING AND FEE ESTIMATE
This Appendix E is part of the engagement letter dated August 1, 2012 between Deloitte &
Touche LLP and City of Fort Worth.
The fees quoted for our services are based on certain assumptions. Circumstances may arise
during the engagement that may significantly affect the targeted completion dates or our fee
estimate. As a result, changes to the fees may be necessary. Such circumstances include but are
not limited to the following:
Audit Facilitation
1. Changes to the timing of the engagement at the City's request. Changes to the timing of the
engagement usually require reassignment of personnel used by D&T in the performance of
services hereunder. However, because it is often difficult to reassign individuals to other
engagements, D&T may incur significant unanticipated costs.
2. All audit schedules are not (a) provided by the City on the date requested, (b) completed in a
format acceptable to D&T, (c) mathematically correct, or (d) in agreement with the
appropriate City records (e g general ledger accounts). D&T will provide the City with a
separate fisting of required schedules information requests, and the dates such items are
needed.
3. Significant delays in responding to our requests for information, such as reconciling
variances or providing requested supporting documentation (e.g., invoices, contracts, and
other documents).
4. Deterioration in the quality of the City's accounting records during the current -year
engagement in comparison with the prior -year engagement.
5. A completed trial balance, referenced to the supporting analyses and schedules and basic
financial statements, is not provided timely by the City's personnel.
6. Draft basic financial statements with appropriate supporting documentation are not prepared
accurately and timely by the City's personnel.
7. Electronic files in an appropriate format and containing the information requested are not
provided by the City on the date requested for our use in performing file interrogation. D&T
will provide the City with a separate listing of the required files and the dates the files are
needed.
8. The engagement team while performing work on the City s premises, is not provided with
high-speed access to the Internet via the City s existing network or through a T1, DSL, or
cable connection for purposes of conducting the engagement.
17
Significant Issues or Changes
9. Significant deficiencies or material weaknesses in the design or operating effectiveness of
the City s internal control over financial reporting or internal control over federal programs
are identified during our audit that result in the expansion of our audit procedures.
10. A significant level of proposed audit adjustments is identified during our audit.
11. A significant number of drafts of the basic financial statements are submitted for our review,
or we identify a significant level of deficiencies in the draft basic financial statements.
12. Significant new issues or changes as follows:
a. Significant new accounting issues.
b. Significant changes in accounting policies or practices from those used in prior years.
c. Significant events or transactions not contemplated in our budgets.
d. Significant changes in the City's financial reporting process or Information Technology
systems.
e. Significant changes in the City's accounting personnel, their responsibilities, or their
availability.
f. Significant changes in auditing standards.
g. Significant changes in the City's use of specialists, or the specialists or their work
product does not meet the qualifications required by generally accepted auditing
standards for our reliance upon their work.
13. The procedures necessary to adopt any new Statements of Government Accounting
Standards have not been completed by the City's personnel.
14. Changes in audit scope caused by events that are beyond our control.
Payment for Services Rendered
15. Without limiting its rights or remedies, D&T may halt or terminate its services entirely if
payment is not received within 30 days of the date of the invoice.
18
APPENDIX F
GENERAL BUSINESS TERMS
This Appendix F is part of the engagement letter to which these terms are attached (the
engagement letter, including its appendices, the "engagement letter") dated August 1, 2012
between Deloitte & Touche LLP and City of Fort Worth.
1. Independent Contractor. D&T is an independent contractor and D&T is not, and will not be
considered to be, an agent, partner, fiduciary, or representative of the City or the Audit and
Finance Advisory Committee. D&T shall have exclusive control of and the exclusive right to
control the details of the work performed hereunder by its employees, officers, personnel and
subcontractors and shall be solely responsible for the acts and omissions of its employees,
officers, personnel and subcontractors. Nothing herein shall be construed as creating a
partnership or joint venture between the City and D&T, and the doctrine of respondent
superior shall have no application as between the City and D&T.
2. Survival. The agreements and undertakings of the City contained in the engagement letter
will survive the completion or termination of this engagement.
3. Assignment and Subcontracting Except as provided below, neither party may assign any of
its rights or obligations hereunder (including, without limitation, interests or claims relating
to this engagement) without the prior written consent of the other party. The City hereby
consents to D&T subcontracting a portion of its services under this engagement to any D&T
affiliate, whether located within or outside of the United States. Professional services
performed hereunder by any of D&T's affiliates or related entities shall be invoiced as
professional fees, and any related expenses shall be invoiced as expenses, unless otherwise
agreed. In addition, the City also hereby consents to the use by D&T of minority
subcontractors if required, which may be located outside of the United States, as a
subcontractor in connection with this engagement; professional services performed
hereunder by the subcontractor and any related expenses shall be invoiced as expenses
unless otherwise agreed. D&T shall be responsible for its subcontractors' performing
services in connection with this engagement to the same extent that D&T would be if it
were performing such services.
4. Severabilitv. If any term of the engagement letter is unenforceable such term shall not
affect the other terms, but such unenforceable team shall be deemed modified to the extent
necessary to render it enforceable, preserving to the fullest extent permissible the intent of
the parties set forth herein.
5. Force Maieure. No party shall be deemed to be in breach of the engagement letter as a
result of any delays or non-performance directly or indirectly resulting from circumstances
or causes beyond its reasonable control, including, without limitation fire, epidemic or
other casualty act of God, strike or labor dispute, war or other violence, or any law, order or
requirement of any governmental agency or authority.
6. Dispute Resolution. Any controversy or claim between the parties arising out of or relating
to the engagement letter or this engagement (a ` Dispute' ) shall be resolved as set forth in
the Dispute Resolution Provision attached hereto as Appendix G and made a part hereof.
19
7. Amendments. This engagement letter may not be amended, changed or otherwise modified
without the prior written consent of both parties.
8. Insurance. D&T 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: $1,000,000 each occurrence on a combined
single limit basis. Automobile coverage shall be on any vehicle used by D&T, its
employees, agents, representatives in the course of the providing services under this
engagement. "Any vehicle" shall be any vehicle owned, hired and non -owned. Worker's
Compensation: statutory limits. Professional Liability (Errors and 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
engagement and for two (2) years following completion of services provided, if
commercially available. An annual certificate of insurance shall be submitted to the City to
evidence coverage
Certificates. Certificates of Insurance evidencing that D&T has obtained all required
insurance shall be delivered to the City prior to D& T proceeding with any work pursuant to
this engagement The commercial general l i abi l i ty and automobile l i abi l i ty 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, agent and volunteers in respect
to the contracted services. Any failures on the part of the City to request required insurance
documentation shall not constitute a waiver of the insurance requirement. D&T will
endeavor to provide a minimum of thirty (30) days notice of cancel l ati on of coverage to the
City. Ten (10) days 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. The City may terminate this engagement if D&T 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 requned 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 D&T. The City may terminate this
engagement for any reason, with or without cause, upon ninety (90) days written notice to
D&T. In the event that this engagement is terminated prior to the expiration date, D&T
shall immediately discontinue all services or the entering into contracts in connection with
the pei formance of this engagement and shall return all records of the City that have been
submitted to D&T for purposes of completion of the then current audit. The City shall pay
D&T for services actually rendered and expenses incurred up to the effective date of
termination and D&T 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 D&T
shall not be entitled to lost or anticipated profits should the City choose to exercise its option
to terminate.
20
D&T may terminate this engagement at any time, immediately upon written notice to the
City if D&T 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 D&T under the
engagement letter for services provided and expenses incurred up to and including the
effective date of termination.
10. INDEMNIFICATION / LIABILITY. D&T SHALL INDEMNIFY AND HOLD THE CITY
AND ITS OFFICERS, AGENTS AND EMPLOYEES HARMLESS FROM AND AGAINST
ALL LIABILITY, EXPENSE, INCLUDING REASONABLE DEFENSE COSTS AND
REASONABLE LEGAL FEES, AND CLAIMS FOR DAMAGES, IN EACH CASE
SOLELY FOR BODILY INJURY, DEATH OR DAMAGE TO REAL OR TANGIBLE
PERSONAL PROPERTY TO THE EXTENT DIRECTLY AND PROXIMATELY
CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF D&T WHILE
ENGAGED IN THE PERFORMANCE OF SERVICES HEREUNDER; PROVIDED,
HOWEVER, THAT IF THERE ALSO IS FAULT ON THE PART OF THE CITY OR ANY
ENTITY OR INDIVIDUAL INDEMNIFIED HEREUNDER OR ANY ENTITY OR
INDIVIDUAL ACTING ON THE CITY'S BEHALF, THE FOREGOING
INDEMNIFICATION SHALL BE ON A PROPORTIONATE RESPONSIBILITY BASIS.
ACCORDINGLY THE CITY SHALL NOTIFY D&T PROMTLY, IN WRITING, OF ANY
CLAIM OR ACTION FOR WHICH INDEMNITY SHALL BE SOUGHT IN CONNECTION
WITH THIS PARAGRAPH 10. ON SUCH NOTIFICATION D&T SHALL PROMPTLY
ASSUME RESPONBILITY FOR AND DEFEND OR SETTLE ANY AND ALL CLAIMS
OR ACTIONS DESCRIBED ABOVE WITH COUNSEL OF ITS OWN CHOOSING. THE
CITY SHALL COOPERATE IN ALL REASONABLE RESPECTS WITH D&T IN
CONNECTIONS WITH ANY SUCH CLAIM
11. Disclosure of Conflicts and Confidential Information. D&T hereby represents to the City that
to the knowledge of the engagement leader providing services hereunder, it has made full
disclosure of any existing conflicts of interest related to D&T's services under this
engagement. In the event that any conflicts of interest arise after the Effective Date, D&T
hereby agrees promptly to make full disclosure to the City. D&T further 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.
Notwithstanding the foregoing, the City hereby consents to D&T disclosing such
information (1) to its subcontractors, whether located within or outside of the United States,
that are providing services in connection with this engagement and who have agreed to be
bound by confidentiality obligations similar to those in this paragraph; (2) as may be
required by law regulation, judicial or administrative process, or in accordance with
applicable professional standards or rules, or in connection with litigation pertaining hereto;
or (3) to the extent such information (i) shall have otherwise become publicly available
(including, without limitation, any information filed with any governmental agency and
available to the public) other than as the result of a disclosure in breach hereof (ii) becomes
available to D&T on a non -confidential basis from a source other than the City that D&T
believes is not prohibited fiom disclosing such information to D&T by obligation to the
City, (iii) is known by D&T prior to its receipt from the City without any obligation of
confidentiality with respect thereto, or (iv) is developed by D&T independently of any
disclosures made by the City to D&T of such information. In satisfying its obligations
21
under this paragraph, D&T shall maintain the City's trade secrets and proprietary or
confidential information in confidence using at least the same degree of care as it employs
in maintaining in confidence its own trade secrets and proprietary or confidential
information, but in no event less than a reasonable degree of care.
12. Right to Review. D&T agrees that the City shall, until the expiration of three (3) years after
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 and records of D&T involving
transactions relating to this engagement at no additional cost to the City. D&T agrees to
provide the City with copies of all such documentation at D&T s sole cost and expense.
The City shall give D&T reasonable advance notice of intended reviews. The City's right
above shall be limited to only to those books and records that are necessary to substantiate
D&T's invoices hereunder and D&T shall have the right to redact such books and records to
the extent it deems necessary to protect its proprietary and confidential information and
address any privacy concerns.
13. Compliance with Laws. D&T 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 engagement will also
comply with all applicable federal, state and local laws ordinances, rules and regulations.
14. Non-discrimination Covenant. D&T agrees that in the performance of its 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.
15. 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:
City of Fort Worth
Attn: Darlene Allen, City Auditor
1000 Throckmorton
Fort Worth TX 76102-6311
Facsimile (817) 392-6133
Deloitte and Touche LLP
Attn Terry Kile
201 Main Street, Suite 1501
Fort Worth, Texas 76102
Facsimile: 817-336-2013
16. Governing Law / Venue. This engagement shall be construed in accordance with the laws
of the State of Texas. In the event that the parties do not agree to resolve a Dispute through
binding arbitration, venue for any action, whether real or asserted, at law or in equity,
brought pursuant to this engagement 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.
17. Review of Counsel. The parties acknowledge that each party and its counsel have reviewed
and revised this engagement letter 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 letter or exhibits hereto.
22
APPENDIX G
DISPUTE RESOLUTION PROVISION
This Appendix G is part of the engagement letter dated August 1, 2012 between Deloitte &
Touche LLP and City of Fort Worth.
This Dispute Resolution Provision sets forth the dispute resolution process and procedures
applicable to the resolution of Disputes and shall apply to the fullest extent of the law, whether in
contract, statute, tort (such as negligence), or otherwise.
Mediation. All Disputes shall be first submitted to nonbinding confidential mediation by written
notice to the parties, and shall be treated as compromise and settlement negotiations under the
standards set forth in the Federal Rules of Evidence and all applicable state counterparts,
together with any applicable statutes protecting the confidentiality of mediations or settlement
discussions. Mediation shall be held in Tarrant County, Texas and the parties shall make a good
faith effort to agree on a mediator. If the parties cannot agree on a mediator, the International
Institute for Conflict Prevention and Resolution ("CPR"), at the written request of a party, shall
designate a mediator.
Arbitration ProceduresI If a Dispute has not been resolved within 90 days after the effective date
of the written notice beginning the mediation process (or such longer period, if the parties so
agree in writing) the mediation shall terminate and, upon written consent of an authorized
representative of both parties the Dispute shall be settled by binding arbitration to be held in
Tarrant County, Texas. The arbitration shall be solely between the parties and shall be conducted
in accordance with the CPR Rules for Non -Administered Arbitration that are in effect at the time
of the commencement of the arbitration, except to the extent modified by this Dispute Resolution
Provision (the "Rules").
The arbitration shall be conducted before a panel of three arbitrators. Each of the City and
Deloitte & Touche LLP shall designate one arbitrator in accordance with the "screened
appointment procedure provided in the Rules and the two party -designated arbitrators shall
jointly select the third in accordance with the Rules. No arbitrator may serve on the panel unless
he or she has agreed in writing to enforce the terms of the engagement letter (including its
appendices) to which this Dispute Resolution Provision is attached and to abide by the terms of
this Dispute Resolution Provision. Except with respect to the interpretation and enforcement of
these arbitration procedures (which shall be governed by the Federal Arbitration Act), the
arbitrators shall apply the laws of the State of Texas (without giving effect to its choice of law
principles) in connection with the Dispute. The arbitrators shall have no power to award punitive,
exemplary or other damages not based on a party s actual damages (and the parties expressly
waive their right to receive such damages). The arbitrators may render a summary disposition
relative to all or some of the issues, provided that the responding party has had an adequate
opportunity to respond to any such application for such disposition. Discovery shall be
conducted in accordance with the Rules.
All aspects of the arbitration shall be treated as confidential, as provided in the Rules. Before
making any disclosure permitted by the Rules a party shall give written notice to all other parties
and afford such parties a reasonable opportunity to protect their interests. Further, judgment on
the arbitrators' award may be entered in any court having jurisdiction.
23
Costs: Each party shall bear its own costs in both the mediation and the arbitration however, the
parties shall share the fees and expenses of both the mediators and the arbitrators equally.
24
M&C Review
DATE.
CODE:
SUBJECT:
COUNCIL ACTION: Approved on 9/14/2010
9/14/2010 REFERENCE NO.: C-24442 LOG NAME.
C TYPE
NON- PUBLIC
CONSENT HEARING:
Page 1 of 2
Official site of the City of Fort Worth, Texas
FORT WORTH
13P10-0401 AUDIT
S ERVICES MJ
N O
Authorize a One -Year Contract in an Amount Up to $1,051,200.00 with Deloitte and
Touche LLP, for Independent Audit Services for Fiscal Year 2010 Comprehensive
Annual Financial Report and Single Audits with Options to Renew the Contract for Up to
Four One -Year Periods
RECOMMENDATION:
It is recommended that the City Council authorize a one-year contract in an initial amount up to
$1,051,200.00 with Deloitte and Touche LLP, for independent audit services for Fiscal Year 2010
Comprehensive Annual Financial Report and Single Audits with options to renew the contract for up to four
one-year periods.
DISCUSSION:
The City of Fort Worth (City) Internal Audit Department will use the professional services agreement with
Deloitte & Touche LLP (D&T) to serve as independent auditors for the City's financial statements to ensure
conformity with generally accepted accounting principles. D&T will examine the City's compliance with
procedures established by the City Charter and City Ordinances. D&T will also perform certain limited
procedures involving required supplementary information by the Governmental Accounting Standards
Board (GASB) as mandated by generally accepted auditing standards as set forth by the American Institute
of Certified Public Accountants and Government Auditing Standards.
The Purchasing Division issued a Request for Proposals (RFP) on April 7, 2010 soliciting qualified firms of
certified public accountant firms to audit the City's financial statements for Fiscal Years 2010, 2011 2012,
2013 and 2014. The evaluation factors included past experience and performance on comparable
government engagements, specific implementation of GASB Statement No. 34, the quality of the firms'
professional personnel to be assigned to the engagement, the quality of personnel to be available for
technical consultation, the adequacy of the firms proposed staffing plan, sampling techniques, analytical
procedures to be used on the engagement, contract costs, and M/WBE participation.
An evaluation panel was made up of representatives from the Financial Management Services Department
and the Internal Audit Department. Five proposals were received in response to the RFP Proposals were
received from BKD LLP, Deloitte & Touche, LLP Grant Thornton, KPMG LLP and Weaver and Tidwell
LLP. The recommended service provider, Deloitte & Touche LLP, was deemed the most qualified to
perform the services. The recommendation was presented to the Audit and Finance Advisory Committee on
July 28, 2010. The committee is in favor of this action.
ADVERTISEMENT - This RFP was advertised in the Fort Worth Star -Telegram on April 7, 2010, April 14,
2010, April 21, 2010 and April 28, 2010.
PRICE ANALYSIS - Fees under the recommended agreement are approximately 8.5 percent less than
those under the 2009 Agreement due to a reduction of estimated hours Estimated hours decreased due to
the City's improved internal controls Prices for each year's audit are estimated as follows:
•
•
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nTr-‘__iflnico_as +-fl/1A/7fllfl
1N1A/717
M&C Review
Page 2 of 2
Year Estimated Initial
Cost
2010
2011
2012
2013
2014
5 Year Total
$988,000.00
$1,041,200.00
$1,086,800.00
$1,140,000.00
$1,200,800.00
$5,456,800.00
Estimated
Contingency
Funds
$63,200.00
$60,000.00
$60,000.00
$60,000.00
$50,000 00
$293,200.00
Estimated Total
Cost
$1,051 200.00
$1,101 200.00
$1,146 800.00
$1,200 000.00
$1,250 800.00
$5,750,000.00
ESTIMATED CONTINGENCY FUNDS — The estimated contingency fund dollars are based upon 450 — 480
additional audit hours for unanticipated issues that may arise
AGREEMENT TERMS - Upon City Council's approval, the Agreement will begin upon execution and expire
eptember 30, 2011, unless terminated earlier in accordance with its terms.
RENEWAL OPTIONS - This Agreement may be renewed for up to four successive one-year terms at an
annual amount not to exceed $1,250,800.00 for each renewal year. This action does not require specific
City Council approval provided that the City Council has appropriated sufficient funds to satisfy the City's
obligation during each renewal term
M/WBE - Deloitte and Touche, LLP, is in compliance with the City's M/WBE Ordinance by committing to 15
percent M/WBE participation. The City's goal on this project is 15 percent
FISCAL INFORMATION/CERTIFICATION.:
The Financial Management Services Director certifies that funds are available in the current operating
budget, as appropriated, of the General Fund The Financial Management Services Director also certifies
that funds will be included in the City Manager's Proposed 2010-2011 Budget of the General Fund.
TO Fund/Account/Centers FROM Fund/Account/Centers,
GG01 531200 0101000 $1.051.200.00
Submitted for City Manager's Office bv:
Originating Department Head:
Additional Information Contact:
ATTACHMENTS
Karen Montgomery (6222)
Darlene Allen (6132)
Jack Dale (8357)
Marilyn Jackson (2059)
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nrn ,ten, in11 A/7n1n
1 n/1 0/7f12