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HomeMy WebLinkAbout1982-05-20 - City Commission Workshop Meeting MinutesMAIL REPLY TO: P.U. BOX 25010 TAMARAC, FLORIDA 33320 5811 N0I'THVVEST 88I'll AV ENL)E T A M A1-1AG, F L 0 R � D A 3:3:321 TELEPHONE (305) 722-6,g00 May 17, 1982 NOTICE OF WORKSHOP MEETING CITY COUNCIL Please be advised that the City Council will hold a Workshop Meeting on May 20, 1982 at 10:30 A.M., in the West Conference Room at City Hall, 5811 N. W. 88th Avenue. The purpose of the Meeting is to interview Auditors in connec- tion with proposals that have been submitted to Council for consideration. The City Council may discuss such other items as may come before it. The Public is invited to attend. Marilyn Berthol / 7 City Clerk ' /lc 5/17/82 CITY OF TAMARAC, FLORIDA CITY COUNCIL WORKSHOP MEETING MAY 20, 1982 AUDITORS INTERVIEWS CALL TO ORDER: Mayor Walter W. Falck called the meeting to order at 10:30 A.M. on Thursday, May 20, 1982 in the West Conference Room at City Hall. ROLL CALL: PRESENT: Mayor Walter W. Falck Councilman Irving M. Disraelly Councilman Philip B. Kravitz. Councilman David E. Krantz ABSENT AND EXCUSED: Vice Mayor Helen Massaro This Workshop Meeting is for the purpose of interviewing prospective auditors: 1. Charles Shaw and Phyllis Cruz of Coopers & Lybrand. 2. Mike Davis and Hugh Cooper of Deloitte Haskins & Sells 3. Keith Cobb and Mary Woods of Peat, Marwick & Mitchell & Co. 4. Robert Moody and Rick Hutchinson of Ernst & Whinney 5. Jason Israel and Richard Dea of Price Waterhouse 6. Bill Turner and David Sarbey of Spear, Safer & Co. 7. Burt Emmer and Charles Dolci of Alexander Grant & Co. Mayor Falck introduced Charles Shaw and Phyllis Cruz to Council members. Mayor Falck said Council is interested in the municipalities in the area which their firm represents and knowing the amount of lead time that would be required to prepare for the audit. Charles Shaw, managing partner of Coopers & Lybrand,Fort Lauderdale office, introduced Phyllis Cruz, Audit Manager in the Fort Lauderdale office. Mr. Shaw said he is present as representative of the office and Phyllis Cruz will be in a position to answer any questions in regard to their municipal experience and governmental experience in general. Mr. Shaw said their office has been in Fort Lauderdale since 1954 and they have the largest firm in Broward County with approximately 60 professional personnel which demonstrates their ability to be successful. Mr. Shaw said their major governmental client is Broward County itself which they have been auditing for a number of years. At the present time, Mr. Shaw said, they are auditing Boca Raton and Hillsboro Beach. Mayor Falck asked the amount of lead time they would require. Ms. Cruz said because of the size of their office and the number of clients that they have,there is a very large governmental auditing staff ,and they would need very Little lead time. Mayor Falck asked about the follow up after the Audit Report was completed and Mr. Shaw said there are two primary products that are beingaddressed and one is the opinion on the Financial Statement, the other would be the Management Letter. Mr. Shaw said the approach as to the delivery of the Report and the Management Letter is set by leadership from the Council. If the Council wants them to appear before them they will, If they prefer to have the opinion on the Financial Statement and Management Letter early, then this will be done. C/M Disraelly asked if there would be a follow up of the suggested correc- tions and Mr. Shaw said at a minimum they will follow up on it the following year. In some cases, depending upon the significance of the item that is in the Management Letter,Council may choose to ask them, on an interim basis, to follow up. Mr. Shaw said they will continue to cite those items in a letter if they have not been corrected satisfactorily. Ms. Cruz said they would come in before the end of the year and do their interim work and she likes to issue a Management Letter right after that,before the end of the year, so that if there are any recommendations that Council can implement 1 - 5/20/82 /pm to make the Audit or the City's.records more efficient, then, they can see how well this has been implemented when they come in for the year end work. This way there is not a 6 or 8 month lag between the time the problem is noticed and the time the City Council discovers the problem. C/M Kravitz asked if they have any set work papers for their municipal audits of this type or do they go according to the individual city? Ms. Cruz said they probably have a combination of both. There are a number of work papers that lend themselves to very standardized headings and can be easily prepared either by the City's staff or by their staff. Ms. Cruz said it helps the City's staff to have a standardized format; however, they do try to keep them very flexible so that what they see as important items in the City's Financial Statements,what they want to audit,will be audited and the work papers will reflect those rather than having just a standardized audit program that may not be relative to the audit. C/M Kravitz asked if they would go into.the City Code to see that the Finance Department is adhering to the Developers Agreements, etc. Ms. Cruz said they have to because there could be unrecorded liabilities or areas where the City was not in compliance that could affect the numbers. C/M Kravitz asked if this would be a complete audit or just a test check and Ms. Cruz said most of the work is done on just a test check. C/M Kravitz asked how deeply the audit goes into internal control. Ms. Cruz said this is done very heavily. C/M Kravitz asked if they were engaged by the City ,would they go by what was done in the past by previous auditors or.use their own system? Ms. Cruz said they do not go by what the previous auditors did, If there is Systems Analysis here that they can read or flow charts or narratives of what the systems are,they will use those to form a basis,for their own work. Mr. Shaw said they will review the other auditors work papers. C/M Kravitz asked, in connection with inventories, would they take the City's figures or take their own inventories? Ms. Cruz said the normal procedure, assuming that the Council does not have a special interest in it, would be to be present when the physical inventory is taken at the end of the year and then they would take test counts of it. C/M Disraelly asked if in the Boca Raton and County audits they also do the utilities and Mr. Shaw said they do the utilities in both cases. Mr. Shaw said in the City of Boca they also do the retirement plans? which are separate functions,as well as performing pre-empting auditing of their Data Systems before they are implemented .to make sure it had the inherit controls in the Computer Systems. C/M Disraelly said that Tamarac is just beginning to implement a Computer System and Mr. Shaw said their firm is one of the few firms that approach the subject,of auditing computers in this unique manner. C/M Krantz asked what the population of Boca is and Ms. Cruz said it is around 50,000 to 60,000 and their total assets are about $60,000,000 or $70,000,000. C/M Kravitz asked if the City would get a Certificate of Conformance on this and Ms. Cruz said she would certainly recommend it. The City of Boca applied for one last year, which was a joint effort, and they did get it. She said this was the first time they applied for it and they got it,which is very unusual. Mayor Falck thanked both Mr. Shaw and Ms. Cruz for coming in. Mayor Falck introduced members of Council to Mike Davis and Hugh Cooper, representatives of Deloitte Haskins & Sells. Mayor Falck asked which local municipalities they are dealing with at the present time, hbw much lead time might be required and what follow up procedures they might have. Mr. Davis said he is a partner in the Fort Lauderdale office and Hugh Cooper is a Manager in the Fort Lauderdale office and they would be responsible for running the engagement. Mr. Davis said, in terms of lead time, they are prepared to begin the initial planning phase of the audit as soon as they are advised that they have been selected. Mr. Davis said the planning phase is the critical element in any audit process. ` 2 - 5/20/82 /pm Mr. Davis said this planning phase is critical in the initial year and in following years as well. He said the minute an auditor becomes com- placent with a client,a proper job will not be done. He said one of the first things that they do is to sit with the people in a planning session to try to identify the needs of the Council, City Manager and all of the interested people and determine the audit on their perception of those needs. When this planning process is completed,then the audit is ready to begin. Mr. Cooper said he would like to emphasize the team effort they use. He said in addition to Mike Davis and himself they will assign the MAS Consultant in charge of the Fort Lauderdale office who will meet with the City regularly. Mr. Davis said running a City is like running any business and they would treat it as such. He said they are very proud of the association they have had with the City of Hollywood since 1973, whereby they have maintained a Certificate of Conformance since 1975 and he is very proud of his participation in their report►particularly in the last couple of years where they have had to implement a new set of financial statements. Mr. Davis said he has been involved professionally with the FICPA in Broward County and assisted in instructing local government on FICPA statements 1 and 2. Mr. Davis said currently he is Chairman of a Committee with relation to the local government and they serve Broward County Hollywood Housing Authority. Mr. Davis said in serving Tamarac they would be able to draw not only on their Fort Lauderdale office but Miami and Palm Beach offices as well. Mr. Davis said they try to not only talk about internal accounting matters but are on the lookout for things that might be of an administra- tive nature to improve the efficiency and effectiveness of the City's management information system. Mr. Davis said as the audit is performed they identify everything early and discuss it with all the important people that this might affect, including the Finance Department and Council or the Utilities,if necessary. This assures them that their comments are accurate and practical; their goal is not to render a constructed service letter full of minor comments but rather to draw a balance between what is important to communicate and what is practical to implement. Mr. Davis said as far as lead time, they are ready to respond immediately and would plan a meeting at once. Mr. Davis said he had provided Council with a sample copy of the type of planning schedule they use and this would be worked out with Steve Wood of the Finance Department; this would identify what assistance he could provide and what their requirements are and _formulate a schedule. Mr. Davis said the City of Hollywood has probably the earliest report in the State of Florida; it has been rendered before the end of October. He said the report is probably sometime around the end of November but the audit work has been completed and the report date has been prior to the end of October. Mr. Davis said they try to emphasize interim planning. C/M Krantz asked what the budget is in the City of Hollywood and Mr. Davis said the General Fund is approximately $33,000,000, and the population is approximately 125,000 to 150,000. C/M Disraelly questioned when the report would be ready and Mr. Cooper said the date of the report on the Financial Statement would be by October 30.. The City of Hollywood prepares their own report. The published report would be sometime at the end of November. Mr. Davis said this year would be a transition because Steve Wood told him that in the past Alexander Grant & Co. prepared the report but the new system will probably give the City the capability of preparing it themselves. Mr. Davis said this would change the process somewhat and this would be worked out during the summer with Steve Wood. Mr. Cooper said in order for them to respond to the City's needs they must determine what the needs are early in the engagement so that they can allocate their resources to meet the City's needs. The Finance Department can gear their schedules to meet the reporting deadline that is established by the Council to meet whatever financing needs or public reporting needs that exist for the City. - 3 - 5/20/82 /pm ape C/M Disraelly asked if Hollywood was the only city within Broward County that they audit and they said yes. Mr. Davis said the written report to the Auditor General would be dictated by whatever the City's requirements are and whether they or the City will be publishing this. He said when the City gives them a date they will meet that date. Mr. Davis said his ex- perience is that the timing of the Management Letter would require a response within 20 days to the Auditor General and the City's position would be to include that with their Report as required under the law. C/M Disraelly asked if they normally follow up the Management Letter to find out what corrections have been made and Mr. Davis said typically most of the comments are identified before the end of the year and are corrected. Mr. Davis said he brought along samples of the brochure from the National Industry Director for Government Services and their National MAS Director for Government Services. Mr. Davis said they feel the City should be run as a business and they have a publication that covers legislation in Washington, accounting and management matters, a section on personal tax thoughts for personal tax planning opportunities and Mr. Davis distributed a sample of this publication to each Council member. He said, regardless of the outcome of this situation, if Council finds -this publication informative, he would add them on his mailing list. C/M Kravitz asked how deeply they go into internal controls and Mr. Davis said there must be an evaluation to determine how much they are going to allow so they can determine whether they are sufficient to rely on and whether they are in compliance with those procedures that are significant. There would be a complete review of internal control which would be done each year. Mr. Cooper said he would expect to spend somewhere in the neighborhood of 100 hours in their preliminary survey of Tamarac's system. This would entail a specialized questionnaire for internal control, in- depth float charting of the system and preparing of numerous narratives describing the system. Mayor Falck thanked both Mr. Davis and Mr. Cooper for their time. Mayor introduced Ms. Mary Woods and Mr. Keith Cobb of Peat, Marwick & Mitchell & Co. to Council. Mayor Falck asked about their experience as it relates to other municipalities and Mr. Cobb said they have been auditors for the City of Fort Lauderdale for 11 years, the City of Coral Springs, the City of Dania, Wilton Manors and the town of Davie. In addition, Mr. Cobb said, they are the auditors for the Broward County School Board and are one of the three auditors for the Broward Employment Training Admin- istration. Mr. Cobb said they have never lost a municipal client in this County which demonstrates the quality of service that they give to their clients. Ile said he would invite Council to call and talk to each of these references about their qualifications. Mr. Cobb said they have about 40 professional people in their Fort Lauderdale office and another 100 in Miami so the ability is there. He said they have made it a policy over the last 5 years as they work with these clients to rotate the responsibility around the office so that virtually everyone in the office has had some in -charge responsibility with municipalities. Mr. Cobb said they like to identify the problems of each municipality up front in a concentrated planning process. He said probably 1/3 of the work will be done before the year end. Ile said part of the work is to review the system of internal controls, review the Accounting system, learn how it works, see what is happening and then perform tests of the transactions that have taken place during that year. Mr. Cobb said they will commit to to City that they will deliver a report by the end of December with a proviso that they get complete cooperation with respect to printing, etc. Mr. Cobb said they make it a policy to have the report ready by December whether the City requires it or not. C/M Disraelly asked in what time frame they normally follow up those items that are criticized in the Management Letter they submit. Mr. Cobb said they usually follow up at the interim phase of the next year. The Manage- ment Letter would be presented to Council at a meeting and the comments _ 4 - 5/20/82 /pm would be explained and then it would be up to the City Manager or someone to implement those recommendations and they would come in for the initial phase of the following year's examination checking to see if these weakness- es had been corrected from the previous year. Mr. Cobb said he has been in governmental auditing for 19 years and Mary Woods handles the City of Dania and Wilton Manors and has been the Senior Accountant on the School Board for three years. Mayor Falck asked what kind of lead time would be required and Mr. Cobb said they would like to be in as soon as possible. C/M Kravitz said he noticed in their brochure there are people on their staff that are non -certified. C/M Kravitz asked if they send those persons to audit the cities and Mr. Cobb said probably not here. These are people right out of school and if they were assigned they would be directly supervised by a C.P.A. Mayor Falck thanked Mr.Cobb and Ms. Woods for their presentation. Mayor Falck introduced Robert Moody and Rick Hutchinson,of Ernst & Whinney, to Council members. Mayor Falck asked them to tell Council something about their work with local municipalities. Mr. Moody said they serve individual clients to SCC clients but from a government standpoint there are: North Lauderdale, Boynton Beach, West Palm Beach, North Palm Beach, City of Tampa, Lake Worth. Mr. Moody pointed out that the Cities of West Palm Beach, Boynton Beach and Juno Beach have their Certificates of Conformance. Mr. Moody said he is a member of the M.F.Q.A.,as is Rick Hutchinson,and he is on the Certificate of Conformance Review Committee. Mr. Moody said they have been serving the City of North Palm Beach for 21 years, the City of West Palm Beach for 12 years. Mr. Moody said it is important to point out that when they first became the auditors for the City of West Palm Beach they had a rotation policy and they changed that when the first period was up and they received a Certificate of ,Conformance. Mr. Moody said the record of long service with these various governments indicates that they are providing good service. Mr. Moody said on Page 27 of the brochure that was given to Council, there was a list of references and he urged Council to call them. The Mayor asked how much lead time they require with an engagement and Mr. Moody said ideally they would like to have started about a month ago doing preliminary work. Mr. Moody said they feel they could have approximately 55% to 60% of the work done prior to the end of the year, allowing them to work around the City's budget. C/M Disraelly asked if they would have come in around May 1 and Mr. Moody said maybe even earlier depending on what works best with the City's schedule. Mayor Falck asked what the timing would be for completion and Mr. Moody said this depends on when the books are closed and when they are ready for them to audit. Mr. Moody said in West Palm Beach there is a large complex and though their accounting staff is very efficient they have to wait for confirmations to come down from banks in New York. He said they normally need about 10 days from the point where they are told that the City is finished and they have 10 days to finish their work. Mr. Moody said most of their clients do not do their own printing and the first year it normally takes a little longer because of the adjustments involved. C/M Kravitz asked if they have had any experience with the water utilities and Mr. Moody said yes and can give some names of references for that if needed. Mr. Hutchinson said several of the municipalities that they serve have utilities. C/M Kravitz asked how deeply they go into internal control on their audit and Mr. Hutchinson said this is the first thing that they would do when engaged,• Based on that, they would put some tests together to test the City's system and prepare some standard balance sheet tests. There were no further questions and Mayor Falck thanked both Mr. Moody and Mr. Hutchinson for their time. Mayor Falck introduced Jason Israel and Richard Dea of Price Waterhouse. Mr. Israel said he is a Senior Audit Manager with Price Waterhouse and Mr. Dea said he is the Manager in charge of the Management Advisory Services. - 5 - 5/20/82 /pm Mayor Falck asked them about lead time required, how long it takes to get the audit done, etc. Mr. Israel said there would be a planning process prior to actually doing the field work. This planning process should be done in the early summer before the year end closes and then interim testing and transaction testing before the year end closes; this would limit the year end work to areas that are not subject to trans- action type or testing at that point, which would cut down the lead time. Mr. Israel said their local practice in the Fort Lauderdale areas is taken from the Fort Lauderdale office where they have 3 departments, audit, tax and MAS. He said in the MAS area they are different from other firms. Mr. Dea said he has about 10 years municipal experience here in South Florida. The department was started in October, 1981 and they now have 6 people on the MAS staff with 11 other MAS staff in the Miami office. He said they also have plans to add another 20 people in this area. Mr. Dea said their practice is broken up into 4 major areas: tirst, fin- ancial planning control pertaining to the audit -related areas particularly in accounting systems. Secondly, they have EDP specialty practices. He said Price Waterhouse has developed a financial reporting system called Action and this is marketed on a national basis to municipalities all over the country. Mr. Dea said they also have Operations Planning and Control which is really industrial engineering in the big area of productivity. He said they also have Quantitative Analysis capabilities with an in-house IBM computer and there is capability for bond issuance and bond refinancing. C/M Krantz asked which cities they are currently servicing and Mr. Israel said the City of Hallandale, Broward County Courts, Dade County and a number of cities around Orlando, the cities of Miami Springs and Sweetwater. C/M Disraelly said they indicated that they could start at any time and Mr. Israel said this is correct; the initial phase would begin immediately and the report to Council would be ready by December. C/M Disraelly asked if they would review the things in the Management Letter as they happened and Mr. Israel said those things that are of any significant consequence they would address immediately and less significant things such as material weaknesses would normally go directly to the Council. C/M Kravitz asked if they handle the utilities in the City of Hallandale and Mr. Israel said they do. Mr. Kravitz asked Mr. Dea if he were a C.P.A. and he said no. C/M Kravitz asked if he would come in on the City audit and Mr. Dea said he would be responsible for the EDP review. C/M Kravitz asked if Price Waterhouse goes in for municipal accounting more - in New York than in Florida? Mr. Israel said no, there are more municipalities in this area and more opportunity to get involved in doing the auditing. There were no more questions and Mayor Falck thanked Mr. Dea and Mr. Israel for their time. Mayor Falck introduced Burt Emmer and Charles Dolci of Alexander Grant & Co. to Council and Mr. Emmer said Charles Dolci is the partner in charge of the Fort Lauderdale office and is ultimately responsible for the company's relationships in this area. Mr. Emmer said he would like to address the question of rotation of auditors and there is only one authoritative position which is by the American Institute of Certified Public Accountants. He said the profession has taken a strong stand saying that they do not believe that rotation of auditors is beneficial. He said the position that they have taken is if a firm handles a publicly -held company, a company registered with the Securities and Exchange Commission, the firm is not rotated but the partner, the key person responsible for the company is rotated every seven years. Mr. Emmer said he has been the partner responsible for the City for three years and he would expect to be the partner for at least another two years if the City desires that. Mr. Emmer said this year they are also proposing to bring in a new person to be in charge of the field work. He said another factor to be considered when a change in auditors occurs is that there are ape significant costs that will be incurred by the internal staff for the City 3 in order to educate the new auditors. Mr. Emmer said there are several local communities that have the same auditors for several years: Fort Lauderdale- 12 years, Pompano Beach-10 years, Plantation-16 years, Hollywood-9 years, and Broward Countv-9 vear_s. - 6 - 5/20/82 /pm Mr. Emmer said normally governmental units do not change if the service is satisfactory. Mr. Dolci said they have a total of 50 personnel in South Florida and they have rotated people. He said Tamarac is a very significant client and they are proud to have the City as a client. He said they have assigned the proper people in the past and would continue in the future. C/M Krantz asked how many years they have been with Tamarac and Mr. Emmer said the firm has audited the City for 8 years and he personally has been handling it for 3 years. C/M Krantz asked if they have anything to do with the bond issue and the transition of Tamarac Utilties. Mr. Emmer said they work on the preparation and the official statement. C/M Krantz asked if they could give some of the cities they currently audit and Mr. Emmer said there is a list on Pages 10, 11 and 12 of the proposal of the municipalities that they service. C/M Krantz asked if they are familiar with the City's computer system ana Mr. Emmer said they performed the study in helping the City staff analyze various computers and decide which to purchase and they helped implement it. C/M Krantz asked if they had anything to do with the refund from the Tamarac Utilities and Mr. Emmer said they designed, with the City, the procedures utilized to make the refunds and they handled the auditing of the refunds once they toer_ e made. Mayor Falck said his comments would concern the differences they have had about the reporting on the surplus. Mayor Falck said Council feels they have done a good job and they are criticized by the press as doing too good a job. Mr. Emmer said Alexander Grant was consulted when this was prom- ulgated and they did not say whether it was good or bad and they never gave their judgment on that. Mr. Emmer said their position was that they felt they had knowledge of the provision and they interpreted in a certain fashion. He said they have now given it to the City Attorney, as indicated by the letter they have just sent to the City, asking Mr. Ruf to give them an opinion on the application of that provision and how it should be applied. Mr. Emmer said he spent a great deal of time speaking to Mr. Birken about this and he said in many ways he concurred with Alexander Grant's inter- pretation of it but it should be analyzed and Mr. Emmer suggested it would be in the best interests of the City to get a firm interpretation on that before the 1982/83 budget. Mr. Dolci said that was not an easy situation in terms of taking the stance that they took but they felt it was necessary. Mayor Falck said the Council's contention is that Council tries to work continually to effect improvements that could show up favorably but at the same time, when viewed in the light of an audit, they are adverse. Mayor Falck referred to the Workmens' com- pensation Insurance where the City received notification from the carrier that the City's charge for the year beginning October, 1982 will be. $162,000.00, the City budgeted $162,000.00 for Workmens' Comp; there was no alternative.. Mayor Falck said during the course of the next 60 days when the City actually received the premium statement for the year, the City took exception and as a result the mod was improved from 2.01 down to 1.91 which meant that from $162,000 it was dropped to $97,000. He said this would reflect in expenses compared with budget and people get the wrong impression. Mayor Falck said it is Council's primary job to save money and anytime the Council can do so they should. C/M Disraelly said the federal government says if the money is not spent by June 29th it is lost and on June 28th 1,000 purchase orders to out and they clean up their money but this City does not operate that way. C/M Disraelly said, for example, they have budgeted some $40,000 for Police vehicles but they cannot get them delivered now because they are not available to the next year. He said at this moment that $40,000 will be left over unless they go out and buy vehicles that they do not want. Mr. Emmer said he understands the problem and he would have some suggestions in this area. Mayor Falck thanked Mr. Emmer and Mr. Dolci for their time. Mayor Falck introduced Bill Turner and David Sarbey of Spear, Safer & Co. to Council. Mayor Falck asked about the lead time required, handling of the Management Letter, when the audit would be completed, etc. - 7 - 5/20/82 /pm Mr. Sarbey said they have been in South Florida for a long time and have offices in Miami and a new office in the Landmark Building. They have 65 professional personnel and they have experience and talent with respect to governmental units. Mr. Sarbey said he was, at one time, engaged to design an audit plan for the State of New York. Mr. Sarbey said he has been the Manager responsible for the audit of Dade County for three years and in that capacity he was responsible for all of the audit work for the County including public offerings, special studies of the Finance Dept. which resulted in complete reorganization of the Finance Dept. Mr. Sarbey said also included were special audits for the seaport and some of their enterprise funds. He said this is one of the most interesting areas of the accounting profession now. Mr. Sarbey said he designed and supervised the plan for the audit of the County of Los Angeles and there were approximately 32,000 manhours involved in that examination. He said because of that experience he feels he brings much to this field and there are other people who also have substantial experience. He said Alice Jones, who is one of their top people,is involved with several of their government-relatea clients. He said they perform services for the cities of Hollywood, Miami Beach, and Surfside. Mayor Falck asked what type of services they perform for the City of Hollywood and Mr. Sarbey said they do both the police and -firemens'pension funds and he has been involved as advisor in the audit as well. Mayon Falck a.skec? tl e amnurt nf_ time .it would take to complete the audit and Mr. Sarbey said they are prepared and would like to start as soon as possible.' He said every year a review of the internal control system has to be made and this is a requirement of generally accepted auditing standards and is the basis upor_ which a standard teGt uln ld. bp r.eri_vec9. Mr. Sarbey said this procedure has a number of benefits: it is convenient to an interim period and will bring to light any problem situation early to avoid the eleventh hour hassle and it permits dealing with these situations before it is too late. Mr. Sarbey said they will render n,ore than one Management Letter when they can spread the work out over an interim period. lie said they will do a study of internal control at the initiation of the audit. Based on that study, there might be comments to submit to Mr. Sarbey said they would conduct their audit procedures and at the close of the audit they might again render a second letter on any additional findings and perhaps a summary of actions that were taken on any earlier findings. He said depending on how much work they are able to do on a preliminary basis,they would be able to finish an audit very quickly after year end. Mayor Falck asked if there is a follow-up procedure after the Management Letter is released and Mr. Sarbey said yes. Their letter is designed to include their findings and recommendations and the client's comments or reaction to it. Mr. Sarbey said they will include this in their report and this is effective because it puts everyone on record. Mayor Falck asked Mr. Sarbey if it would be possible for them to send him a copy of the style that they use and they agreed. There were no further questions and Mayor Falck thanked both Mr. Sarbey and Mr. Turner for their time. Mayor Falck requested memoranda from Council members as soon as possible concerning their comments on this meeting. Mayor Falck adjourned the meeting at 1:30 P.M. ASSISTANT CITY CLERK This public document was promulgated at a cost of � or /,_;2-� per copy, to inform the general public and public officers and employees about recent opinions and considerations by the City Council of the City of Tamarac. - 8 - 5/20/82 /Pm