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Exhibit 1 - Agenda Information Sheet - Amendment 1City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement ACM: Cassey Ogden DATE: May 2, 2023 SUBJECT Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the approval of a first amendment to a Professional Services Agreement between the City of Denton and Weaver and Tidwell, L.L.P., amending the contract approved by the City Council on July 28, 2020, in the not-to-exceed amount of $354,500.00; said first amendment to provide external audit services for the City of Denton’s fiscal year 2022-23, including an audit of the financial statements and single audit for the year ending September 30, 2023, and an agreed-upon procedures report for the Texas Commission on Environmental Quality as managed by the City Auditor’s Office; providing for the expenditure of funds therefor; and providing an effective date (RFQ 7284 – providing for an additional first amendment expenditure amount not-to-exceed $123,500.00, with the total contract amount not-to-exceed $478,000.00). STRATEGIC ALIGNMENT This action supports Key Focus Area: Pursue Organizational Excellence and Collaborative and Respectful Leadership. INFORMATION/BACKGROUND At the end of each fiscal year, the City of Denton undergoes a financial audit performed by an independent auditing firm. The objective of this financial audit is to form and express an opinion about whether the financial statements (i.e. the Annual Comprehensive Financial Report) prepared by City staff are presented fairly in all material respects.1 The external auditor also performs the “Single Audit,” which is required if state or local governments expend more than $750,000 in federal dollars annually. As part of this engagement, the external auditor provides an opinion on the fair presentation of the Supplementary Schedule of Expenditures of Federal and State Awards per the applicable regulations. Finally, the external auditor performs an agreed-upon procedures engagement as required by Texas Administrative Code, Chapter 37, and agreed upon by the City of Denton and the Texas Commission on Environmental Quality. This engagement evaluates City management’s assertions about compliance with the financial test option concerning the sanitary landfill and landfill gas recover facility. In order to further ensure the external audit firms' independence from management, the City has elected to have the City Auditor administer the annual external audit contract including, leading solicitation efforts, coordinating with staff on vendor evaluation, and reviewing and paying invoices. In 2020, an evaluation 1 Materiality is a term used in auditing and accounting that relates to the importance or significance of an amount, transaction, or discrepancy. A material matter is ultimately a matter of professional judgement and depends upon factors such as the volume of an organization’s revenues and expenses. City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com team made up of Finance Department and City Auditor’s Office staff selected Weaver & Tidwell L.L.P. based on a Request for Qualifications and executed a three year contract with a one year option. The contract was executed with a do not exceed amount to only cover the first three years of service. A history of the contract pricing by audited fiscal year is shown in Table 1. Table 1: Historical Contract Price Audited Year Contract Price FY2020 $116,500 FY2021 $117,500 FY2022 $120,500 FY2023 (Proposed) $123,500 The contract amendment will extend the contract for the fourth year and increase the do not exceed amount to allow the vendor to receive payment based on a price quoted in March 2023. PRIOR ACTION/REVIEW (Council, Boards, Commissions) On July 28, 2020, City Council approved a contract with Weaver & Tidwell L.L.P., in the not-to-exceed amount of $354,500 (Ordinance 20-1304). RECOMMENDATION Award Amendment No. 1 with Weaver & Tidwell, L.L.P., to continue to provide external audit services for the City of Denton’s fiscal year 2022-23, including an audit of the financial statements and single audit for the year ending September 30, 2023, and an agreed-upon procedures report for the Texas Commission on Environmental Quality as managed by the City Auditor’s Office, in a not-to-exceed amount of $123,500, for a total amended contract amount of $478,000. PRINCIPAL PLACE OF BUSINESS Weaver and Tidwell, L.L.P. Dallas, TX ESTIMATED SCHEDULE OF PROJECT This contract expires on July 28, 2024. Fieldwork to audit the Fiscal Year 2022-23 Annual Comprehensive Financial Report will begin in the fall of 2023 and should be complete by March 2024. FISCAL INFORMATION These services will be funded from the General Fund account 105001.7852. A new Purchase Order will be entered to encumber the first amendment amount of $123,500. The total amended amount of this contract is $478,000. EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Original Ordinance and Contract Exhibit 3: Ordinance and Amendment 1 Respectfully submitted: Lori Hewell, 940-349-7100 Purchasing Manager For information concerning this acquisition, contact: Madison Rorschach, 940-349-7228. Legal point of contact: Marcella Lunn at 940-349-8333.