HomeMy WebLinkAboutO-2002-2570
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ORDINANCE NO. 2002- J.S'10
AN ORDINANCE APPROVING AND AUTHORIZING AN AGREEMENT BETWEEN THE
CITY OF LA PORTE AND TILLER AND COMPANY, CERTIFIED PUBLIC
ACCOUNTANTS, TO PROVIDE INDEPENDENT AUDITING SERVICES,
APPROPRIATING NOT TO EXCEED $15, 000 . 00 , TO FUND SAID CONTRACT,
MAKING VARIOUS FINDINGS AND PROVISIONS RELATING TO THE SUBJECT,
FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW, AND PROVIDING AN
EFFECTIVE DATE HEREOF.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE:
Section 1. The City Council hereby approves and authorizes
the contract, agreement, or other undertaking described in the
title of this ordinance, in substantially the form as shown in the
document which is attached hereto and incorporated herein by this
reference. The Mayor is hereby authorized to execute such document
and all related documents on behalf of the City of La Porte. The
City Secretary is hereby authorized to attest to all such
signatures and to affix the seal of the City to all such documents.
City Council appropriates the sum not to exceed $15,000.00 from the
City of La Porte General Fund Auditing Account No. 001-6141-515-
5001 to fund said contract.
Section 2. The City Council officially finds, determines,
recites, and declares that a sufficient written notice of the date,
hour, place and subject of this meeting of the City Council was
posted at a place convenient to the public at the City Hall of the
City for the time required by law preceding this meeting, as
required by the Open Meetings Law, Chapter 551, Texas Government
Code; and that this meeting has been open to the public as required
by law at all times during which this ordinance and the subject
matter thereof has been discussed, considered and formally acted
upon.
The City Council further ratifies, approves and confirms
such written notice and the contents and posting thereof.
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ORDINANCE NO. 2002 - if. S '1'0
P1V3E 2
Section 3. This Ordinance shall be effective from and after
its passage and approval, and it is so ordered.
PASSED AND APPROVED, this 12th day of August, 2002.
CITY OF LA PORTE
BY'~~
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Mayor
ATTEST:
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Mar a A. Gillett
City Secretary
APP~ v)
Knox W. Ask/ins
City Attorney
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TillER ANd COMPANY
A PROFESSIONAL CORPORATION OF
CERTIFIED PUBLIC ACCOUNTANTS
August 1, 2002
Chuck Engelken
City Council Audit Committee Chairman
City of LaPorte, Texas
We are pleased to confirm our understanding of the nature and limitations of the services we are
to provide the City of LaPorte, Texas,
We will apply the agreed-upon procedures which the City of LaPorte has specified, listed in the
attached schedule, to the documentation related to certain expenditures of the City of LaPorte for
the six years ended June 30, 2002. This engagement is solely to assist the City of LaPorte in
evaluating the propriety of certain American Express and Visa credit card expenditures and the
related adequacy of documentation and to evaluate compliance with internal controls over,
American Express and Visa credit card expenditures, Our engagement to apply agreed-upon
procedures will be conducted in accordance with attestation standards established by the .
American Institute of Certified Public Accountants, The sufficiency of the procedures is solely
the responsibility of those parties specified in the report. Consequently, we make. no
representation regarding the sufficiency of the procedures described in the attached schedule
either for the purpose for which this report has been requested or for any other purpose. If, for
any reason, we are unable to complete the procedures, we will describe any restrictions on the
performance of the procedures in our report, or will not issue a report as a result of this
engagement.
Because the agreed-upon procedures listed in the attached schedule do not constitute an
examination, we will not express an opinion on the financial impact the reviewed transactions
had or might have on the City's financial condition, In addition, we have no obligation to
perform any procedures beyond those listed in the attached schedule.
We will submit a report listing the procedures performed and our findings, This report is
intended solely for the use of the City of LaPorte, and should not be used by those who did not
agree to the procedures and take responsibility of the sufficiency of the procedures for their
purposes, Our report will contain a paragraph indicating that had we performed additional
procedures, other matters might have come to our attention that would have been reported to
you,
We plan to begin our procedures on approximately August 6, 2002, and unless unforeseeable
problems are encountered, the engagement should be completed on or around August 31, 2002,
We plan to review a draft of our report with the City's audit committee prior to issuance of our
final report. At the conclusion of our engagement, we will require a representation letter from
key management that, among other things, will confirm management's responsibility for
presenting to us all documentation they believe to be related to the expenditures in question and
1300 ROLLlNGBROOK / POST OFFICE BOX 563/ BAYTOWN, TEXAS 77522.0563/ (281) 427-7517/ FAX (281) 422-5013
MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS - THE TEXAS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
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a statement indicating they have informed us of all significant events and circumstances related
to the reviewed expenditures that might influence their proper analysis. Our fees for these
services will be billed at $95 per hour and we estimate the hours required to complete the
engagement to range from 120 to 180 hours. You will also be billed for out-of-pocket costs such
as report production, typing, postage, etc, Additional expenses are estimated not to exceed
$80.00. The fee estimate is based on anticipated cooperation from your personnel and the
assumption that unexpected circumstances will not be encountered during the engagement. If
significant additional time in necessary, we will discuss it with you and arrive at a new hour
estimate before we incur the additional costs. Our invoice for these fees will be rendered each
month as work progresses and are payable on presentation.
We appreciate the opportunity to assist you and believe this letter and related schedules
accurately summarizes the significant terms of our engagement. If you have any questions,
please let us know, If you agree with the terms of our engagement as described in this letter,
please sign the enclosed copy and return it to us. If the need for additional services arises, our
agreement with you will need to be revised. It is customary for us to enumerate these revisions in
an addendum to this letter. If additional specified parties of the report are added, we will require
that they acknowledge in writing their responsibility for the sufficiency of procedures.
v;ti:;L
Mark R. Tiller
Tiller and Company
A Professional Corporation of
Certified Public Accountants
This letter correctly sets forth the understanding of the City of LaPorte.
CW,~
Chuck Engelken
City Council Audit Committee Chairman
Date
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~an ~one
Mayor
Date
11/ fAi 07'
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Attest:
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M a illett
City Secretary
Date
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SCHEDULE OF AGREED-UPON PROCEDURES
1. Review historical information surrounding City use of credit cards (American
Express and VISA) leading to request for special agreed-upon procedures
engagement.
2. Discuss specific engagement needs related to credit cards with Audit Committee
Chairman,
3. Review relevant written City policies, procedures, manuals, employment
contracts, ordinances and department directives that might govern the handling
and payment of City credit card expenditures.
4. Determine adequacy of written policies and procedures related to City credit card
expenditures based on review of documents outlined in number 3 above.
5, Interview relevant City personnel to determine if written policies and procedures
were being followed and, if not, what procedures were followed. In addition, our
interviews might be used to confirm our understanding of certain credit card
expenditures detailed in the monthly credit card statements.
6. Review existing support behind paid City credit card statements for the six year
period for all City credit cards and categorize expenditures by type/nature and
level of attached support.
7. Interview certain individuals related to the City to determine if additional support
for credit card expenditures exists outside the official City payment/disbursement
records.
8. Review all paid per diem travel and expense requests during the audit period that
might relate to the expenditures paid by City credit cards.
9. Review relevant City documents related to reimbursements made to the City by
cardholders for items or services purchased by City credit cards,
10. Summarize the information reviewed which will include our related analysis, for
purposes of inspection, review, and analysis by the Audit Committee.
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REQUEST FOR CITY COUNCIL AGENDA ITEM
Appropriation
Agenda Date Requested: Au ust 12 2002
Requested By:
Source of Funds: General Fund
Department: FiAllAce
Account Number: 001-6146-515-5001
Report:
Resolution:
Ordinance:
x...x
Amount Budgeted: 46,000
Exhibits:
Engagement Letter
Amount Requested: 15,000
Exhibits:
Ordinance
Budgeted Item: YES NO
Exhibits:
SUMMARY & RECOMMENDATION
On July 30, 2002, the La Porte Audit Committee interviewed auditing firms for the purpose of selecting a
consultant to audit credit card transactions. After defining a Scope of Services, nine firms were
considered, and four were selected for interviews. The interviewees were:
Tiller and Company, of Baytown, Texas (represented by Mark Tiller);
Sanderson, Knox and Belt of Sugarland, Texas (represented by Robert Belt);
Patillo, Brown & Hill, of Waco, Texas (represented by James Curry); and
Mosher, Siefert, and Co. (represented by Ken Siefert).
Although all firms were well qualified, Tiller & Company was selected. A brief synopsis of the Scope of
Services is: to perform a comprehensive audit of American Express and Visa credit card transactions for
the past six years; to review credit card purchases and determine if the expenditure was undertaken for
official City business; and to determine whether expenditures complied with City purchasing and travel
policies, and any employment contract in effect at the time of the expenditure. We expect this review to
cost no more than $15,000.
Action Required bv Council:
Adopt Ordinance approving and authorizing a Contract with Tiller and Company, a Professional
Corporation of Certified Public Accountants, for an Agreed Upon Procedures engagement regarding the
review of American Express and Visa credit card transactions for a six year period.
John E.
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