HomeMy WebLinkAboutAgenda Report - June 17, 1981 (40)J
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CITY COUNCIL HENRY A. GLAVES, 1R
City Ma" Or
LAMESA. T . MURPY, Ma". MAV CITY O F LO D I ALICE M. RE IMCHE
ROBERT C. MURPHY, Mayos Pro Tem
RICHARD L HUGHES CRY ClerkCITY HALL, 221 WEST PINE STREET
WALTER KATNICH POST OFFICE BOX 220 RONALD M. STEIN
JAMES W. PINKERTON. Jr. LODI. CALIFORNIA 95241 City Attom"
(209) 334-5634
I
June 19, 1981
Ernst and Whinney
555 Capitol Hall
Suite 650
Sacramento, CA 95814
Gentlemen:
Please be advised that your June 5, 1981 letter
summarizing the scope of your services and fee
estimate regarding your engagement to examine the
financial statements of the City of Lodi for the year
ended June 30, 1981 was presented to the Lodi City
Council at its regular meeting of June 17, 1981.
By motion action Council authorized the retaining
of your firm pursuant to the provisions and fees,
including Revenue Sharing Compliance Audit, outlined
in your June 5, 1981 letter.
The City Council did express concern that the audits
the past two years have not been received in a "timely"
manner. I trust if problems arise which preclude
having an audit and management letter on had by
October 1, 1981 that we will be so notified.
AR: dg
Very truly yours,
A
Alice M. Reimche
City Clerk
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stOrrWl linnet' 553 Capitol Mail, Suite 650
Sacramento, California 95814
9`16/447-3237
June 5, 1981
City Council
City of Lodi
221 West Pine Street ,
Lodi, California 95240
Attention Hr. Jerry L. Glenn
Dear Hr. Glenn:
The purpose of this letter is to summarize the scope of our services and fee
estimate regarding our engagement to examine the financial statements of the
City of Lodi for the year ended June 30, 1981.
As in the past, we will perform the examination and issue our report thereon
in accordance with generally accepted auditing standards approved by the
American Institute of Certified Public Accountants. These standards
contemplate, among other things, that we will make a study and evaluation of
your system of internal control as a basis for reliance on the accounting
records and for determining the extent of our audit tests.; and that we will
be able to obtain sufficient competent evidential matter, with respect to
the accounts, to afford a reasonable basis for our opinion regarding the
financial statements. However, it should be understood that our report
will, necessarily, be governed by the findings developed in the course of
our examination, and that we could be required, depending upon the
circumstances, to modify our reporting from the typical unqualified opinion.
We will advise you, as our examination progresses, if any developments
indicate that we will be unable to express an unqualified opinion.
Since our examination will be performed generally on a test basis, including
sampling techniques, it will not necessarily disclose irregularities, if
any, that may exist. However, any irregularities which our examination does
disclose will be reported to you promptly.
At the completion of the engagement, we will provide a letter to management
containing recommendations for any significant changes which we believe
would improve the accounting or management procedures, or strengthen
internal controls.
Our fees will be based upon our customary rates for the various personnel
involved, plus out-of-pocket expenses.
Jill 10 1981
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_-City Council
City of Lodi -2- June 5, 1981
Me expect to use your staff as much as possible to prepare analysis schedules,
provide supporting documentation, and otherwise assist in minimizing our
audit time and resultant fees. In that connection, our fee estimate this
year is based upon the continued usage of accounting department personnel to
the extent of approximately 60 hours during 1981 and their preparation of
analyses and corrections to fund balance accounts, in addition to drafts of
the financial statements.
Our fees for services rendered in the examination of the financial statements
will not exceed $13,500. Should any significant or unusual circumstances be
encountered, we will advise you prior to altering our scope of services or
examination -
In addition, we are pleased to respond regarding the examination of the City's
Federal.Revenue Sharing audit needs. The revenue sharing audit guide requires
a financial and a compliance audit to.be completed once every three years.
As we have performed the financial audit for each of the last two years and
anticipate performing the audit for the year ending June 30, 1981, it will
only be necessary for us to perform additional compliance procedures. Our
fee for this service for the year ended June 30, 1978 was $1,700 and we
anticipate that our fee for this service for June 30, 1981 will not exceed
$1,900.
We look forward to the opportunity to again serve the City of Lodi.
very truly yours,