Background

The City is required by State law to have its records and accounts audited annually by an independent professional auditor and shall have an annual financial statement prepared based on the audit.  The audit shall be performed by a certified public accounting (CPA) firm, licensed to practice in the State of Texas.   The audit firm shall also provide a Single Audit of Federal and State grants, when necessary. 

The objective of the ordinary audit of financial statements by the independent auditor is the expression of an opinion on the fairness with which they present, in all material respects, financial position, results of operations, and its cash flows in conformity with generally accepted accounting principles. The auditor has a responsibility to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud. The financial statements are management's responsibility. The auditor's responsibility is to express an opinion on the financial statements.

The Financial Management Policy Statements (FMPS) direct the City Council to designate a Finance/Audit Committee.  The role of the Committee is to review and guide financial policy and strategic financial issues as needed and determined by the City Manager or City Council.   

The Finance/Audit Committee responsibilities related to the audit will include but not be limited to:

• Recommendation to the City Council on selection of the independent audit firm through a Request for Proposal process.
• Overview of the planning and timeline of the audit and risk assessment.
• Final audit review, results, findings, management letter as well as major audit adjustments as identified under Sarbanes-Oxley Act of 2002.
• Meet as soon as practical and appropriate after final audit review to assess the status of issues addressed in the management letter, if warranted.
• Meet during the course of the audit regarding any major issues/concerns/findings that may arise. 

In accordance with the FMPS and best practices, the City is required to solicit proposals from qualified firms to select an independent firm of certified public accountants to perform an annual audit every five years.  As such, the City received 8 proposals on March 19, 2020, in response to RFP 2020-15 for Professional Audit Services.  In accordance with the City’s FMPS, the Council Finance/Audit Committee serves as the evaluation committee for the process, ultimately charged with making a recommendation to the City Council for award of the contract. Evaluators rated the proposals based on technical qualifications - including expertise and experience - and audit approach, with Purchasing assigning minimal points for pricing. 

After evaluation of the proposals, the committee conducted interviews with the top ranked firms in late April. After the interviews, the Committee recommended that the City should enter into an engagement with Weaver and Tidwell,  L.L.P. for the Fiscal Year 2020-2024 audit cycles.

Weaver’s presentation clearly addressed the City’s questions along with timely discussion on issues affecting the City, such as COVID-19.  Their presentation laid out a clear transition plan and has proposed a robust plan to utilize technology for data analytics. 

The fiscal year 2021 budget includes funding to cover the audit. The proposed fee structure for the five-year engagement is shown below:

A follow-up discussion was held with the Finance/Audit Committee at their May 7th meeting and, the Committee recommends the Council approve the engagement with Weaver and Tidwell, L.L.P. for professional audit services for Fiscal Year 2020. 

Recommendation

The City Council Finance/Audit Committee recommends the City enter into an engagement with Weaver and Tidwell, L.L.P. for professional audit services in an amount of $137,500 for the fiscal year 2020. Engagement letters for subsequent year audits will be considered by City Council annually for approval.