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HomeMy WebLinkAboutPR 21097: AUTHORIZE THE CITY MNAGER TO NEGOTIATE A CONTRACT FOR AUDITING SERVICES City of W ort rthu Texas www.PortArthurTx.gov INTEROFFICE MEMORANDUM Date: 9/30/19 To: The Honorable Mayor and City Council Through: Ron Burton, Interim City Manager From: Kandy Daniel, Interim Director of Finance RE: PR No 21097 Authorize the City Manager to negotiate a contract for auditing services Introduction: The intent of this Agenda Item is to seek the City Council's approval for the City Manager to negotiate a contract with Weaver and Tidwell, LLP for auditing services for fiscal year 2019 with an option to renew for four subsequent years. Background: According to Article XII, Section 17 of the Charter of the City of Port Arthur, a CPA firm must be engaged annually to perform an audit of all accounts of the City. However the same firm may not conduct the independent audit for more than five (5) consecutive years. Whitley Penn, LLP has performed the audit for the past 5 fiscal years,which requires a new firm to be selected for FY2019. The City of Port Arthur advertised for Request for Qualifications (RFQ's) for auditing services on August 30 and September 6,2019. The scope of services provides for the audit of the general purpose financial statements including the accounts of the Economic Development Corporation, and the Single Audit reports in accordance with Federal requirements. Five (5) proposals were received on September 18, 2019. The RFQ evaluation committee reviewed the proposals using the published evaluation criteria which included firm qualification and experience, personnel qualifications, project approach and quality of response. Weaver and Tidwell, LLP scored the highest based on the criteria. They are a national firm located in Houston Texas and have performed audits for over 40 Texas Cities. They stressed on time and on budget delivery with large firm resources and small firm service. The firm's personnel are also experienced in governmental audits and meet all continuing education and quality review requirements. The "Remember,we are here to serve the Citizens of Port Arthur" P.O.Box 1089 X Port Arthur,Texas 77641-1089 X 409.983.8101 X FAX 409.982.6743 City of __..._ ,... 1 ort rthu Texas www.PortArthurTx.gov evaluation matrix and the RFQ submitted by Weaver and Tidwell, LLP are attached as Exhibit A and B to the proposed resolution. Budget Impact: Funds for auditing services are budgeted in the Finance Department account number 001- 1031-515-54-00. Once a contract is negotiated,the results will be submitted to Council for approval. Recommendation: The attached Proposed Resolution No. 21097 authorizes the City Manager to negotiate a contract with Weaver and Tidwell, L.L.P. for auditing services for fiscal year 2019 with an option to renew for four subsequent years and we recommend that the City Council approve it as presented. "Remember,we are here to serve the Citizens of Port Arthur" P.O.Box 1089 X Port Arthur,Texas 77641-1089 X 409.983.8101 X FAX 409.982.6743 P.R. NO. 21097 KD 9/30/2019 RESOLUTION NO. A RESOLUTION AUTHORIZING THE CITY MANAGER TO NEGOTIATE A CONTRACT BETWEEN THE CITY OF PORT ARTHUR AND WEAVER AND TIDWELL, LLP AS INDEPENDENT AUDITOR FOR THE CITY OF PORT ARTHUR FOR FISCAL YEAR 2019 WITH THE OPTION TO RENEW FOR FOUR SUBSEQUENT YEARS. WHEREAS, the City of Port Arthur advertised for Request for Qualifications (RFQs) for auditing services on August 30 and September 6, 2019; and, WHEREAS, the City of Port Arthur received qualifications statements from five (5) certified public accounting firms; and, WHEREAS, the RFQ evaluation committee, having reviewed said statements and having used the published evaluation criteria, recommends Weaver and Tidwell, LLP for these auditing services; and, WHEREAS, the City Council finds it to be in the best interest of the citizens of Port Arthur to negotiate a contract for the providing of these services; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: THAT,the facts and opinions in the preamble are true and correct; and, THAT,the City Manager is hereby authorized and directed to negotiate a contract on behalf of the City of Port Arthur with Weaver and Tidwell,LLP for an independent audit of all accounts of the City and the Port Arthur Economic Development Corporation for the 2019 fiscal year with an option to renew for four subsequent years. THAT,a copy of the caption of this Resolution shall be spread upon the Minutes of the City Council. READ,ADOPTED,AND APPROVED, this day of October 2019 AD,at a Regular Meeting of the City Council of the City of Port Arthur. Texas by the following vote: AYES:Mayor: Councilmembers: NOES: Thurman"Bill"Bartie. Mayor ATTEST: Sherri Bellard, City Secretary APPROVED AS TO FORM: D it 1 th1F al T ie City ttorney APPROVED FOR ADMINISTRATION: Ron Burton, Interim City Manager Dc Kandy Danie Interim Director of Finance Exhibit A -< H (-) p > '.> 9 '0 -' 1. '-r1 n tC o- w •11 --3 C., ' `- 3 C fes) fwi n e+ 3 ^ 7 n N ,' y C A © CA 7 -^ rt n 0 0 0 b v 0 " O A, 07 c o ? oo a 5->' cn 1 o VI a r. a c ,7, -. n o X O ft 5 '� n 0 ^ p 0 iC�x r^n X r L. O ''. �' N - - 't7 - -- R 0 "J n D''. C) 9 n n 0 - " v, a cf D, a, ,� N n AD a a B 0 0 0 . 74 R. > w+ 0- n " N 0 ° = rt 0 Cr y9 an v> y < O ea H n w v n w n X v N 4 F A Or) a O N o O o 0, 0 0 0 c Co : 0 n 0 2. c_) CI w n - Wc.n V^ 440 a r b e 5' a -0 0 .. 0 7 Z..., A"' N n 0• 00R N nr 0. O ti O N e l dC1 W A N -. n Ct1 , 0 O N k e g C N R' O_ _ C.0 ,.-, y O n m O 00 0 -4 - ? t-+ ;-d go v W .... 00 oc '-' o 0 A W .-+ O N -; W �C EO a o E n w ? 0 N G1 A a r n rr ' P„ 111:4D o ' Exhibit B la , Request for Qualifications for Auditing Services City of Port Arthur ( RFQ P19-098) Se otem oer 1 l , 2019 Presented by: Greg Peterson, CPA I Partner, Assurance Services Weaver and Tidwell, L.L.P. 124 Greenway Plaza, Suite1800 I Houston, Texas 77046 936.494.4126 I greg.peterson@weaver.com weaverf- Assurance•Tax Advisory we averAustin Conroe ( Dallas Fort Worth Houston Los Angeles 1>tidland I New York City I San Antonio Assurance•Tax•Advisory September 11, 2019 Clifton Williams Purchasing Manager City of Port Arthur P.O. Box 1089 Port Arthur, TX 77641 RE: Request for Qualifications for Auditing Services (RFQ P19-098) Dear Mr. Williams: In today's environment,the City of Port Arthur (the City) faces increasing pressure from all sides: citizens, businesses and employees alike all have 175+ demands for enhanced access and services;taxpayers are pushing for added transparency; and oversight bodies continue to change and public-sector audit expand reporting requirements. Meeting all of these pressures involves a clients annually great deal of budgetary and operational complexity, plus one nearly priceless commodity:time. Often tasked with trying to do more and12 more with less, your financial operations staff simply don't have time to be overburdened by your annual audit. public-sector audit professionals That's where Weaver comes in. With nearly 70 years of experience meeting the audit and advisory 100 needs of Texas public-sector entities,we understand the operational complexities of municipal financial operations, the challenges and risks entities receiving a specific to various municipal environments, and nuanced financial single audit reporting requirements all cities must meet. But our commitment to you doesn't stop there: our goal is to help you meet your operational challenges with ease by providing you with real value beyond mere "check the box" compliance. In addition to GFOA award completing your audit on time and with the fewest possible demands on recipients your staff, we will also work to help you navigate changes in guidance and best practices, and lay the foundation for achieving your longer term operational and strategic objectives. Key benefits of selecting Weaver include: Texas cities ► Experience in municipal environments. With more than 40 municipal clients, Weaver professionals understand the complexities of governmental accounting, federal and state of the 100 largest funding, electric utilities and the nuances of special Texas cities reporting for TCEQ, HUD, revenue bond debt service coverage, National Transit Database and more. Weaver and Tidwell, L.L.P. 24 Greenway Plaza, Suite 1800 I Houston, Texas 77046 Main: 713.850.1673 ) Fax: 713.850.1673 CPAs AND ADVISORS ) WEAVER.COM weaver - Assurance•Tax•Advisory ► High-quality work and on-time delivery. Weaver's reputation has been built on the quality of our work and our ability to stay on schedule and on budget.We are dedicated to meeting the timelines and other commitments set forth in our proposal. ► Commitment to ongoing communication. Frequent, effective and honest communication is critical to a successful audit. Your partner and engagement team leadership will remain highly accessible throughout the audit and throughout the year. ► Large-firm resources,small-firm service. With Weaver, you never get lost in the crowd. As a Texas-based firm, we provide local, hands-on, year-round service. But local doesn't mean limited:we have 120+ public-sector audit professionals with extensive knowledge,so we can tackle even the most complex audits and aggressive timelines. We focus on providing real value beyond mere compliance, leveraging the full breadth of our experience to your benefit.Throughout our service to you, we will work to make the audit as easy as possible for City staff and work to ensure our suggestions for improving the efficiency and effectiveness of your financial processes remain practical and relevant to your broader, long-term objectives. Should you have any questions regarding this proposal or any other matter, please do not hesitate to contact me directly. I look forward to the opportunity to discuss our proposal, as well as how Weaver can assist the City with achieving its financial reporting objectives and long-term goals. Sincerely, 1 ,/i Greg P- e son, CPA I Pa n- , - urance Services Direc1 16.494.4126 I Email: greg.peterson@weaver.com weaver Assurance-Tax•Advisory B . TABLE OF CONTENTS A) Firm Qualifications & Experience 5 B) Personnel Qualifications 9 C) Project Approach 15 Appendix A: Required Forms 29 weaver-- Assurance.Tax•Advisory A) Firm Qualifications & Experience Size of the Firm The Firm of Texas Founded in Fort Worth in 1950, Weaver is a nationally recognized Weaver is the largest independent accounting firm based in Texas,and in firm with approximately 750 professionals and offices in seven the Southwest—as well as a Top 40 firm major Texas cities: Houston, Conroe, Dallas, Fort Worth, Austin, nationwide. San Antonio and Midland. Although we serve clients across the U.S., the firm's primary focus since its inception has been meeting the assurance, advisory and tax needs of clients in our home state—with a strong emphasis on government and other public Fort Wolin**Dan= sector entities. Our broad and sustained experience enables us Mid to take a particularly thoughtful approach, balancing your short- Con1Oe term reporting needs with your long-term objectives. Austin* * *Houston San Antonio Size of the Governmental Audit Staff Weaver's dedicated public-sector audit practice is one of the largest industry practices in the firm,with more than 120+ 7 Ttewe 100+ professionals focused on the distinct needs of our government Empbyees oe and nonprofit clients.This deeply experienced group performs annual financial audits for more than 175 public-sector clients each year, including: MEETING YOUR GFOA AWARD Certificate ► 40 Texas cities Achietrmem ► 24 of the 100 largest cities in Texas, by RECOGNITION NEEDS FAMINtisd population ► 50+entities currently receiving the ► Approximately 100 entities that receive GFOA Certificate of Achievement federal funding sufficient for a single audit ► Nine Weaver staff on the GFOA ► More than 50 entities that receive the GFOA Special Review Committee award for excellence in financial reporting We are experienced not only with annual financial audits, but federal and state single audits, CAFR preparation or review for GFOA recognition, grant compliance and third-party grant compliance audits. In addition,we also provide public-sector clients with internal audits (both outsourced and co-sourced), risk assessments, enterprise risk management consulting, business process improvement, IT audits, data analytics and forensic accounting. Location of the Office Performing the Work This engagement will be managed and staffed with resources from our Houston office,which has significant resources at the ready to deliver timely, comprehensive services for the City. In addition, all of Weaver's professionals work collaboratively across locations, so we are able to draw upon additional resources and in-house subject matter advisors as needed,should engagement needs dictate. With this leveraged model, Weaver is able to offer you a scalable and customized team that can adjust dynamically and quickly to meet your needs throughout all stages of the audit season, and our contract with you. Request for Qualifications for Auditing Services I City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 5 weaver Assurance•Tax•Advisory Peer Review Weaver has been a member of the AICPA — Center for Audit Quality and the Government Audit Quality Center (GAQC) EideBailly. since their inception. Membership in these organizations is voluntary and requires a commitment to the highest standards of professional practice. The strength of R"kuR`"" Weaver's quality control system for our To the Pum..of Wase,and rdneR.LLP. accounting and auditing practice and our ��'"r IPM R" w`aa n" compliance with that system are N<hose mwewd the'snot,ofy on.:totem!for the a[a+agng and audaulg practice of Weinernd 7dw<IL LLP.1dmlinlggl lcnmgageme,4MwyealoPC:011pcm.w,fmpn,.no<a,fKm<,ew coded May 71.:016.(lar pea re,wv was•included in accordance with the Standrde k Performing ad independently evaluated every three Reputing on Pm Rrvims arable,`.6 N<Peer Review Board ofthe Anammn batmde of Certified Public Acewaiaa As a part Nes P•rr mien,ne considered mires by reEalaun magi..if applamble.in years through a peer review administered determining lyingature n°`r'onf"r"k°""'n`�u'urance``°'`mi"""'®tinginof qual" ncwl+rnd complying..rpt•lo proeiJ<dKf nth r<�arble avruae of performing and reporting in euaf rmas unit applicable prefemiaW standard%P all mains]repel,One ruR+Mil.hl.e m eapr. ail by the AICPA National Peer Reviewn ��ignofthe,,,rmofwalk remm� funk>compl�.-etre ithbredon«.mi. ,he masc.object...scope,limily0 d dand Ise proeeduo performed ai a Timm Reties.are daaibed in Committee (NPRC). th<standar*alnun Pena lira moan:mars. As remand be the slandank engagcmeaia selected for mien included ngagemmu performed under Go nment Audrong Savulartdo.man of employee benefit pi.p a.dat perfumed under FDICIt and eornmaiwm of sere.agmvaiiva ISmice ug ruat.m Control(S(7CI I cod'engegemcwl. Each peer review has included a review of In our,orai„rt,e maim of waists mount for the,c n gma,,11mts%pr,,;e ofumm and DeiseR pp 1_I_P apph.ablc to=paganism ma subject to PCA011 permanent inspection in ea t for dna sear ended Sln governmental audit engagements, as 31.2016. been notably deeipud and complied mth to Protide dr fnm with rmsornblr instanced perlrmmg and reporting in emfwmin w m applkable profmwwl standards to all umlaut minuets.Puma em mandated by AICPA Peer Revieweea ruing ofpus,fun rah clfneanrl<el orjml.Wearer�Tdwe0.1_LP. merited mien ruing aporr standards and GAQC requirements. r° Bus Weaver has received unmodified reports Octtide ober 7.1016 on every peer review to date. Our latest peer review was accepted by the NPRC in October 2016; Weaver received a pass rating, the highest grade possible. Weaver's next peer review is scheduled for — - _ the summer of 2019. Disciplinary Action and Reviews We are not aware of any federal or state desk reviews that have been performed on our audits in the last three years. No findings have been reported to us. And although the firm and certain partners have been the subject of reprimand/censure decisions in past three (3) years, there has been no such action taken with regard to our public-sector audit practice, and none of the decisions have limited the firm's public-sector audit practice in any way. Request for Qualifications for Auditing Services I City of Port Arthur(RFQ P19-098) weaver and Tidwell L.L.P. I Page 8 weaAssurance•Tax ver - rtsery B ) Personnel Qualifications Team Organization Serving large, complex municipalities requires specific technical knowledge and industry insight. We invest both time and money to ensure that our public sector professionals are always at the forefront of best practices, and stay abreast of the latest guidance, regulations and other trends affecting Texas cities. Your audit team will be organized as illustrated below: Greg Peterson, CPA Laura Lambert, CPA Engagement Partner Reema Parappilly, CISA Technical Review Partner IT Advisory Partner Jason Vatenzuela, CPA Manager Justin Herbert Senior Associate • Audit Associates Additional staff and/or subject matter advisors, as needed Weaver and all licensed CPAs are licensed to practice in the state of Texas. Qualifications for key team members, including information regarding continuing professional education, are provided on the following pages. Request for Qualifications for Auditing Services r City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 9 weaver Assurance•Tax•Advisory Qualifications for Key Personnel Greg Peterson, CPA Partner, Assurance Services Role: Greg will serve as the engagement partner for the City. In this role, he will serve as the primary point of contact with City management. He will also provide hands-on guidance and oversight to the audit team from initial planning through - the final report. Experience Summary: Greg has 14 years of experience in public accounting,with experience providing financial statement audits for clients in the public sector industry. He has extensive experience managing complex audits, including those with single audits over federal and state funds, as well as performing accounting research for complex transactions and assisting in implementing new accounting standards. He also oversees the preparation of CAFRS that meet the requirements of the Government Finance Officers Association. Representative Clients: Greg's clients have included the cities of Bryan, Odessa and League City, the counties of Tarrant and Williamson and many ISDs, including Houston, Conroe and Cypress- Fairbanks. Professional Involvement and Recognition: Greg is a member of the Texas Society of Certified Public Accountants (TXCPA), the American Institute of Certified Public Accountants (AICPA), and is a former auditor of the year at Weaver. He is actively involved in industry organizations, including serving on TXCPA School District Committee. Representative Presentations and Publications: Greg is a regular author of materials for continuing professional education courses. Past topics have included "Financial Statement Audits-Are You Ready?" and "Single Audit Preparation." Education and Certifications: Greg is a Certified Public Accountant in Texas. He earned a Bachelor of Science degree in finance from Tarleton State University. With 150.7 hours of CPE within the past three years, he currently meets continuing professional education required by generally accepted government auditing standards and Texas State Board of Public Accountancy. Weaver is well resourced to perform the City's audit services within the timeframe required, without sacrificing quality. All of the firm's 750+ professionals — including our 120+ public-sector audit professionals — work collaboratively across locations, so if engagement needs dictate we are able to draw upon additional resources and in-house subject matter advisors. With this leveraged model, Weaver is able to offer you a customized team that can scale dynamically and quickly to meet your needs throughout all stages of the audit season. It also enables us to provide an efficient, effective audit with added innovation, thought-leadership and insight. Request for Qualifications for Auditing Services I City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. 1 Page 10 weaver Assurance-Tax Adwsory Laura Lambert, CPA Partner, Assurance Services Role: Laura will serve as the technical review partner for the City's audit. In this role, she will review work papers and deliverables for accuracy and quality.She will also oadvise on technical accounting issues, as needed. Experience Summary: Laura has 14 years of experience in public accounting. Laura focuses on providing audit, review, compilation, attestation and business advisory consulting in the government, broker-dealer and investment management/hedge fund industries.She also has significant experience with Sarbanes-Oxley consulting, internal controls assessments and data mining for transaction analysis and fraud detection. Representative Clients: Laura's clients have included the cities of League City, Tomball and Bryan, Bryan Texas Utilities, Northside ISD,Texas Permanent School Fund, Texas General Land Office and Travis Central Appraisal District. Professional Involvement and Recognition: Laura is an active member of the TXCPA, AICPA and the Texas Hedge Fund Association, as well as a member of the Government Finance Officers Association (GFOA) Special Review Committee. Education and Certifications: A Certified Public Accountant in Texas, Laura earned a Master of Business Administration, concentration in finance, and a Bachelor of Science in business, accounting and finance, from Write State University. Laura has 125.4 hours of CPE within the past three years. We consistently look for ways to bring a valuable perspective 4110%*0491 to be sure that we're adjusting to lessons learned, changes in your operations, industry trends and the evolution of best practices. Throughout our service to you, we will always look for ways to balance efficiency and innovation to bring you the best audit experience possible. Request for Qualifications for Auditing Services I City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 11 weaver Assurance•To •Advisory Reema Parappilly, CISA Partner, IT Advisory Services Role: Reema will lead work related to IT risk evaluation and, as needed, data analytics Experience Summary: She has more than 12 years of experience leading IT risk assessments and executing IT internal audit plans over performance and capacity management, disaster recovery and data privacy. Her focus includes IT audits, regulatory Compliance, System and Organization Controls (SOC) reporting, and data analytics. She also leads carious compliance engagements, including annual documentation of controls design and testing. Representative Clients: Reema's clients have included the cities of League City, Houston, Bryan and University Park, as well as Williamson County and Montgomery ISD. Professional Involvement and Recognition: Reema is an active member of numerous industry associations, including ISACA, the Institute of Internal Auditors (IIA), and AFCOM International, for which she also served as secretary for the Greater Houston chapter Education and Certifications: A Certified Information Systems Auditor, Reema earned a Master of Science degree in information systems technology and a Bachelor of Business Administration in finance and information systems from George Washington University. Jason G. Valenzuela, CPA Manager, Assurance Service 5Role: Jason will serve as manager for the City's audit. In this role, he will provide Y, hands-on oversight for audit staff and procedures, facilitate effective ' communication between staff and management, and provide quality review for thwork papers and deliverables. Experience Summary: For more than five years, Jason has audited Texas municipalities, school districts and other public sector clients. He is skilled in applying single audit, GAGAS, and GAAS guidelines, as well as preparing financial statements and CAFRs. Representative Clients: Jason's clients have included the cities of League City, Shepherd and Splendora, the counties of Midland, Pecos and Reeves, and many ISDs including Houston, Laredo, La Porte, Conroe and Waco. Professional Involvement and Recognition: He is an active member of the AICPA and TXCPA, as well as a board member of the Harris County Municipal Utility District 157. Education and Certifications: Jason is a Certified Public Accountant. He earned a Master of Science in accounting and a Bachelor of Business Administration in accounting from the University of Texas Rio Grande Valley. Jason has 100.9 hours of CPE within the past three years. Request for Qualifications for Auditing Services I City of Port Arthur(RFQ P1 9-098) Weaver and Tidwell, L.L.P. I Page 12 weaver Assurance•Tax•Advisory Key Phases and Activities Phase 1: Planning & Risk Assessment To start, our team will meet with you to identify any changes to your operations and BEYOND THE AUDIT processes since the last audit season, compile our document request list, set up your access to our client portal and review What makes Weaver different? We strive to provide ongoing value beyond mere "check prior-year work papers and financial the box"compliance, including: statements. We will also identify and confirm potential risks and calculate a preliminary ► A knowledgeable engagement team estimate of materiality. Finally,we will that can alert you to pending changes develop key parameters for the audit, and coach you through them including: ► Professionals at every level who understand government auditing ► Audit objectives standards and the special requirements ► Staffing and responsibilities, including of cities manager and partner supervision ► Year-round access to consultation and ► Application of analytical procedures advice from well-informed industry ► Schedules and hour budgets by audit leaders area I. Free admission to Weaver's annual day ► Materiality levels used for planning of continuing professional education ► A risk assessment of internal controls designed specifically for our public sector clients In developing our audit plan, we will ► Confidence in the results of your audit consider aspects of your operations that could affect the audit scope and approach, such as: organizational structure; governing laws and regulations; annual budget and sources of revenue; number of employees; and any significant events during the past year that might have affected your financial processes. Weaver's secure portal enables our team and yours to share, review, store and track all items related to the engagement. We can also download financial data directly into our audit software to prepare trial balances, perform analytical =ZS procedures and prepare the financial statements. To further increase efficiency and accuracy, we can even leverage our TECHNOLOGY in-house data analytics team to analyze 100 percent of IN THE AUDIT selected data. As an integral part of our audit planning, we complete annual reviews of internal controls, the City's operations and accounting processes. This in-depth understanding of the City's operations and accounting processes is essential for performing a thorough, efficient and effective audit. It also helps us make relevant, valuable management comments. Request for Qualifications for Auditing Services I City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 17 weaver' Assurance•Tax•Advisory Phase 2: Control Documentation & Preliminary Fieldwork Understanding Your Internal Control Structure We will examine your internal controls to make sure they are properly designed and functioning as intended. We will ensure an adequate understanding of your internal controls as they relate to the risk assessment, control environment, control activities, information and communication and monitoring.This will be accomplished by: ► Reviewing controls and determining whether they have been placed in operation ► Assessing the materiality of the various account balances and transaction classes ► Evaluating the risk factors that could affect the scope of testing Determining Laws and Regulations Subject to Testing PREPARED BY CLIENT (PBC) We will consider the effects of laws and REQUESTS regulations that have a direct and material effect on the operations of the City.To do We recognize that the City's staff this,we will: manages finances of a multimillion-dollar ► Discuss applicable laws and enterprise; our objective is to allocate to regulations with the City you only those tasks that will result in the greatest cost-efficiency overall. representatives and legal counsel, if indicated For any and all requests for information,we ► Utilize information from prior-year will give the City adequate lead-time for work papers their preparation. We will deliver a request ► Review certain grants and contracts list for our interim fieldwork no later than ► Obtain written representations from three weeks in advance of the scheduled management arrival for interim fieldwork. Audit Sampling Approach When we conclude our interim fieldwork in The nature and size of the City's operations your office,we will deliver a tailored list of will require us to design procedures to schedules for final fieldwork based on our include sampling applications. All sampling understanding of controls and operations will be performed in accordance with AU developed during the interim fieldwork. Section 530 and the AICPA audit guide, We do not utilize standard templates; "Audit Sampling." Sampling applications rather, whenever possible we will work with may be used for these areas: schedules already prepared by management. ► Tests of accounting controls ► Tests of controls over compliance requirements of major federal or state programs, as applicable ► Tests of compliance with major federal or state program requirements, as applicable ► Substantive tests of account-balance details The determination of tests of controls for transaction cycles will be determined by our evaluation of the design and effectiveness of your accounting controls. Our approach to tests of accounting controls will use tolerable rates of deviation and a 90 percent confidence level.The number of transactions tested will ultimately be determined by our expected rates of deviation and our control risk assessment. The specific items to be tested will be chosen randomly. Request for Qualifications for Auditing Services I City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 18 weaver}- Assurance•Tax•Advisory Determining Samole Sizes The size of samples cannot be determined in advance for substantive tests of details of account balances. Weaver uses a nonstatistical sampling approach based on statistical theory, as widely used throughout the audit profession.This methodology uses the concepts of tolerable misstatement, risk of material misstatement, other substantive procedure risk, individually significant transactions and account balance in determining the sample size. Single Audit Testing For the single audit, we will consider additional internal control categories for which testing is required in accordance with Uniform Guidance and Uniform Grant Management Standards. Areas addressed by these additional categories include: ► Transactions are properly recorded and calculated to » Permit the preparation of reliable financial statements and federal and state reports >> Maintain accountability over assets » Demonstrate compliance with laws, regulations, and other compliance requirements ► Transactions are executed in compliance with » Laws, regulations,and the provisions of contracts or grant agreements that could have a direct and material effect on a federal or state program » Any other laws and regulations identified in the Compliance Supplement or grant agreement ► Funds, property, and other assets are safeguarded against loss from unauthorized use or disposition ► Specific requirements for major federal financial assistance programs » Activities allowed or unallowed • Allowable costs/cost principles » Cash management » Eligibility » Equipment and real property management » Matching, level of effort, earmarking » Period of performance » Procurement and suspension and debarment » Reporting requirements • Subrecipient monitoring » Special tests and provisions Internal controls over the compliance requirements of major federal financial assistance programs will also be evaluated and tested as described above. Federal and state programs with expenditures exceeding calculated thresholds will be evaluated for risk. Programs considered "high risk" will be selected for testing. Request for Qualifications for Auditing Services I City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 19 weaver Assurance•Tax•Advisory After examining internal controls over compliance requirements for major programs, Weaver will test each program's compliance in • order to offer an opinion regarding the City's compliance with each major program. Auditing Computerized Systems Weaver has significant experience providing auditing and advisory services related to the major financial and business systems used by Texas cities. Our procedures for evaluating the security and integrity of IT systems typically include procedures to validate system settings Use of Technology in the Audit and user authorizations. Due to the size and scope of your computerized electronic data Weaver uses cutting-edge electronic processing or information technology (IT) technology to improve our efficiency function, Weaver's IT Advisory group will assist throughout the audit process.We were one with our audit. of the first CPA firms to adopt the paperless environment. Now, over years of practice, We use multiple frameworks and standards to we have organized our system to create the conduct specific IT application and security most efficient workflow. Our audit file audits, selecting the guidelines most appropriate software, CCH engagement, is used to store, for each case. Our central approach is based on share, review and track all items related to Control Objectives for Information and Related the engagement. Technology (COBIT), which furnishes a comprehensive methodology to underlie all of As our client,you will have access to a portal our IT audit engagements. We apply the COBIT system to exchange files—no matter how framework in planning, executing and reporting large—in a secure environment. Our portal the results of our IT-related services. allows both our team and yours to store files for instant, secure access, creating a virtual Application Controls network where the audit team can As part of our audit procedures, we will use collaborate with you. automated scripts to evaluate critical business application controls within your computer system. Weaver auditors also leverage instant When evaluating application controls, we will messaging and screen sharing tools among perform tasks such as reviewing documentation, the team, which enables team members to comparing processes to standard business rules look at documents together or review findings no matter where they are physically and practices and verifying access control in applications. working. Application Security As part of our application procedures, we will consider system security configuration and functionality. We will perform tasks designed to evaluate the security of your electronic systems, including the supporting infrastructure and processes. Such tasks may include reviewing security measures surrounding applications and sensitive data, reviewing change management controls, reviewing the physical environment and its security and reviewing procedures designed to protect data integrity. Request for Qualifications for Auditing Services I City of Port Arthur(RFQ P19-098) Weaver and Tidwell. L.L.P. I Page 20 weaver 71'Fr Assurance•Tax•Advise— Phase 3: Final Fieldwork After you complete the year-end closing of WEAVER ANALYTICS accounts, our team will begin final fieldwork. This is the time when we perform most of the During financial audits,Weaver substantive tests on your data and prepare our Analytics can analyze 100 percent of audit work papers. During this time,the auditors selected data in the areas of journal will: entries, payroll and disbursements.We can identify potential risk areas that ► Perform audit tests and complete may require further investigation by the preparation of audit work papers audit team. ► Complete audit programs, procedures and conclusions During previous engagements, our ► Discuss audit findings and adjusting team has identified items such as bid entries with your management splitting and nepotism, as well as ► Obtain attorney letters opportunities to improve efficiencies in Throughout this phase—and throughout our the disbursement process. Examples of entire relationship with you—Weaver will key findings from other data analyses remain in close communication with your performed by Weaver Analytics include: management. Our goal is a "no-surprises" audit. }} Duplicate vendors in the master Therefore,whenever there is a question or a vendor file potential issue,we will immediately bring it to }} Duplicate invoice payments your attention, seek your confirmation of the }} Concentrations in vendors and data and ask about any relevant customers that may indicate circumstances. fraud Substantive Procedures » Payroll checks paid in the incorrect amounts Weaver determines the audit approach and }} Payroll checks paid to former the specific procedures performed for various employees financial statement accounts and transactions }} Employee addresses that match (e.g., cash and investments, long-term debt, vendor addresses etc.) based on our experience with similar }} "Ghost" employees and entities.We tailor these procedures to your vendors specific accounting system and controls in }} Unusual overtime patterns order to perform the audit thoroughly and efficiently. By adding fraud detection and The financial objectives of these procedures are operational compliance, as well as to provide reasonable assurance that you will computer data acquisition and analysis, be able to process, summarize and report Weaver can provide insights on the best financial data consistent with management's ways to improve the efficiency and assertions.Those assertions cover classes of effectiveness of your processes. transactions, year-end account balances and presentation and disclosure of financial data. Request for Qualifications for Auditing Services I City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 21 weave r Assurance•Tax•Advisory Analytical Procedures During your audit, we examine more than pieces of data in isolation. We also analyze the interrelationships of financial and nonfinancial data. Our extensive 0011 use of analytical procedures offers a natural extension to the process of understanding the City operations. As we develop this understanding,we 0101 determine what ratios, relationships and internal or external data management tools will be useful in identifying and monitoring risks. The exact analytical procedures performed for the City will be determined during the planning process, after we have examined your accounting systems and operations. Common procedures include trend analysis,ratio analysis and predictive or"reasonableness" tests. For example, depending on the specifics of your data and processes,we may: ► Compare financial information with comparable prior periods, taking into account any known or expected changes. For example,we will compare revenues and expenditures with comparable previous periods and balances, looking for unexpected variations ► Compare actual with anticipated results (for example, budget-versus-actual comparison of revenues and expenditures) ► Evaluate relationships among different elements within the period, such as receivables in relation to billings, or revenues in relation to costs ► Analyze financial information in light of relevant nonfinancial information (growth, political changes, new regulatory requirements, etc.) ► Perform automated data analysis (data mining) using audit command language (ACL) and similar tools Weaver typically pursues analytic procedures at depth in these areas: ► Salaries and benefits ► Depreciation ► Certain revenues and expenditures Any unexpected variations are researched for explanations, and then corroborated by reviewing supporting information. Phase 4: Financial Review and Quality Control After fieldwork is complete, the engagement partner will review the entire engagement, with particular attention to significant audit areas. In addition, the draft report and work papers will be reviewed by the technical review partner to determine the completeness with which the engagement has been performed.The auditor's review will determine whether judgments made by others are reasonable in relation to the supporting data and to generally accepted accounting principles, auditing standards, government auditing standards and firm policy. Request for Qualifications for Auditing Services I City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 22 weaver Assurance•Tax•Advisory We discuss and confirm our findings with appropriate City staff whenever we discover an area of potential concern. In addition, we will review draft findings and recommendations with you throughout the engagement. At the reporting stage, there should be no surprises. Review and quality control tasks include: ► Engagement partner review of all work papers to ensure compliance with technical standards ► Technical review of all work papers ► Performing any final analytical procedures ► A client conference to review financial statements, the auditor's opinion and preliminary management letter comments ► Obtaining written representations from management Phase 5: Reporting Throughout the audit, if we become aware of irregularities or illegal acts,we will make an immediate,written report of those acts to management. After our internal reviews have confirmed the audit is complete, you have reviewed the draft reports, and we have incorporated your management responses and related information, Weaver will issue the final audit documents (printed copies and electronic files). We will issue all reports currently required by State and Federal grantors,American Institute of Certified Public Accountants, Governmental Accounting Standards Board, Government Finance Officers Association of the United States and Canada and any other regulatory agencies, as well as issue any other reports subsequently required by these or similar entities following completion of the financial or single audit. We will make an immediate,written report of all irregularities and illegal acts of which they become aware to the City Manager and Director of Finance. Our final reports on compliance and internal controls will detail any "significant deficiencies" in internal control (as defined by GAGAS) found during the audit.Significant deficiencies that are also material weaknesses will be identified as such in the report. Lesser deficiencies will be reported in a separate letter to management. Weaver will present our findings to the parties you designate. At that time,we will explain our findings, present practical recommendations for improvement (if needed) and answer your questions.The engagement partner and audit senior manager will also bring these reports to meetings as requested, including finance committees, the City Council or managers and administrators.This provides your leaders with the opportunity to ask questions directly and enables us to explain our recommendations and any unusual findings. Request for Qualifications for Auditing Services I City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 23 weaver � Y. e Assurance-Tax-Advis . - Weaver's Audit Insights are designed to ShenyMntAcaompblvnenls weavery >w.•�aaeao.rawgd a conatiaroe ...Os I w*yet can�vice henin_d_lla.lesUnCic convey the most essential results of the i °�°�' Audll te.aits 'MO 1"a1 financial Slalemenh weaver: .._-. llai audit to City Council and stakeholders � Mca pcoming Ch .".•°"••''•, ,, clearly, without excessive accounting -- GASB 75: Revenue Trends waver} jargon. It also presents information on F„�.c,;,e 0 ICI per cvs D. financial trends over time, strengths and cea��rii-9 L - c, opportunities and looming changes. °;,5,z°” We will ensure the City leaders are informed of the following information, as well as any other items required by audit standards: ► The auditor's responsibility under generally accepted auditing standards and government auditing standards, including Uniform Guidance for single audits ► Significant accounting policies ► Management judgments and accounting estimates ► Significant audit adjustments ► Other information in documents containing audited financial statements ► Disagreements with management ► Management consultation with other accountants ► Major issues discussed with management prior to retention ► Difficulties encountered in performing the audit ► Auditor's judgments about accounting principles ► Material written communication ► Independence-related issues between the firm and the City ► Confirmation of independence Anticipated Potential Audit Problems Given our understanding of your systems, reporting requirements, staff and goals, Weaver does not anticipate any audit problems. We work to preemptively identify potential sources of delay through a comprehensive planning process, including an initial meeting with management to: . Prepare a comprehensive document itemizing significant timelines and milestones ► Delineate responsibilities ► Prepare the PBC list With early planning and partner involvement from the start, we have found that we can plan preventive measures and plan potential workarounds if necessary before work even begins. We also communicate frequently so that any unexpected issues or delays that arise during the course of the engagement, are addressed immediately. Our integrated firm organization also enables partners to draw staff from other offices when needed to keep audits on schedule or address difficult technical challenges. Request for Qualifications for Auditing Services) City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L?. I Page 24 weaver Assurance•Tax-Advisory Throughout the audit—and throughout our entire relationship with you —Weaver will remain in close communication with your management team. Our philosophy is a "no-surprises" audit. Therefore, whenever there is a question or a potential issue, we will immediately bring it to your attention, seek your confirmation of the data and ask about any relevant circumstances. Assistance from City Personnel Based on the information provided in the City's RFP,we anticipate no issues with regards to assistance required. For all requests for information,we will give the City staff adequate lead time to prepare the requested materials. We will deliver a request list for our interim fieldwork no later than three weeks in advance of the audit team's scheduled arrival. When we conclude our interim fieldwork in your office,we will discuss and provide you a list of items needed for final fieldwork based on our understanding of controls and operations developed during the interim fieldwork. We can utilize the schedules you have developed, or we can provide you with templates to meet the needs for the items requested. Year-Round Support In our work with you, it will be our goal to not only help you achieve your immediate engagement objectives, but to also be a technical resource.To that end,we provide much more than oversight and accountability during the engagement—we will remain available to you throughout the year to answer questions. Unless those questions involve in-depth research, you will not be charged for routine inquires;in fact,we welcome your questions as an opportunity for us to gain insight into your operations, challenges and strategies, further easing the year-end audit process. We provide timely technical updates to ensure that you have the guidance and services necessary to help meet your changing needs over time. Industry Training Serving public sector organizations requires specialized knowledge, and Weaver works to ensure that our public sector-focused audit and advisory professionals are always at the forefront of industry best practices. Our partners and professionals are knowledgeable about the latest rules, regulations, technical developments and industry trends affecting public sector entities.This means you will be served by a highly experienced team of CPAs who have dedicated their careers to serving entities with auditing, accounting and operational situations similar to yours. Training for Your Staff Weaver provides an annual complimentary public sector CPE-accredited event for our public sector clients.The daylong event includes breakout sessions so you can customize your CPE day to your most critical needs. We are also available to provide updates and other CPE-accredited training to your staff upon request. In addition,we routinely conduct free webinars (typically occurring over the lunch hour) which offer a way for you to remain plugged in to the industry updates and trends,without leaving your office. Request for Qualifications for Auditing Services l City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 25 weaver Assurance•Tax•Advisory Samole Reports Independent Auditor's Report The HonasLle Mvror.Mernben of the Gy Council end City Manger City of CITY.texas P ope3 accordance with adding standards generaty accepted n the United Slates of Ar etica In as canto.the accornpanyeg combining and iuivsdsd hind financial statements and sentare'kited in the table of content,are fdly sided it dl mania respects in relation to the basic',normal sediment:a a whole. The inroaucfory ration and stotshcd section have not been subjected to the auditing nocedues arted in the audit of the bone financial statement and accordingy.we do not express a opnion of provide any=summit on'Tern Omer Reporting Readied by Government Aediliq Standards 'n 0000ti�nle Wyp ...tem..rr,.n.r,v,. ,..Mw,.ten Lu rA n.+Tenn 1 ./f newt,v.our. 4.,,*,nr—re,. tfetrd conker ovei agreements ands and corrofaxe That report e an int Canal Cvel frac The Honorable Mora.Member of the City Canal and City Manager City of Ott.Texas WEAVER.AND TIDY Pope 2 Dane..Texas Opiebris (DATE] el our carnal.based on cu audit and the report of other auditors.the financial statements referred to atone present forty.in of material rezech.the respective fisatr d position atria gowrrrtenta achvA-rs.the buuwu-type°ander the discretely presented component unit each major fund and the aggregate retaining hard information of the City.as of(DAT.%and the reopechve changes in rnascia potion and where oppdcable.cash Rows thereof la the yea then ended in=Cadence wall ocean dig amides generally accepted int*Urnted Sties i Americo. Giber Mane° Required Supplementary mtoonoflat Aeaurdrg pi-navies general',accepted in the Urised Stale:of America recce*that Management's DaMsicn and Ar,oIys and me Required Supprme Wary rr',amort al ax fisted in fee MN*of content,he presented to supptemcnt the basil fine:mai stefemen o Such information.athough not a pat of file basic loaded statements it readied by the Gdverttmentd Accounting Standard'.goad who eo-aiaen a lobe an euenhd pat of inane repafrg for placing the ease fro'dstdeanenh n an ceprecride ope.otiAnot economic. C.h0100c01 context We have =riled cenah rented procaine,to the malted elpplemenhAy information in OOCaderYe wtm miasma ttatdads generic paten,ehCi dd gthe ttaterhen . any misusOnCe Austin Conroe - Dam fort Worm FWudon . ... .. • provide any� we aver Los Angeles Midand • New Yoh City San Anterio Otterbdamator>{ Independent AuMds!egad Our audt was c I financial stotemel end the nrtrodud To the honorable Maya.Member,of the City COWnci and City manger fevncat decent' City of(can Texas The accatrgarrfi Repot on the Maas d Sfalemee6 of management ddrtmenhs Sudn' We have audited the occomroanynnat g tciof statemerds of the goverrcnennd activities.the bushed-type ata ides the dectetey c idn ndaricpresented component Wit each major tend and the aggregate remanng fund nformaion of the City of CRY Irate City).as of and for 'cards vied to the year ended(DATE),and the retried notes to the fnancid statement,,which celiac-11.4h comprise the Cry's basic financial statemenn no listed its the table of contents Manpgemenfs ResporsAlsiy ler the r-eanciaf Syafemenh TYe C'.t mOCgn"erd a:es:.cnrbte Ica to pre-.a:at-on and he presentation of these fnatcid statements it accordance weft =awning pnttocles genera,/accepted in the United Slates of America this naivetes the design,inplementofion and maintenance l - _' - - external caned relevant to the preaactien and far prexntaton of financial statements that Ole he*horn material misstatement,whether due to baud or eaor. AuAor's lespotetbiy Cur respaatiy is to empress options on these financial statements based on our aril.We conducted OW audit in accordance with ardtitg standards gen-eraly accepted its the United States of Americo and the stoldods appicable to financial audhs contained in Government Au?dsp Standard.hoed by the Corrohcde•Genets of the United States.Those standards require that we plan and perform the oust to obtain reasonable assurance about wthethei the financial statements we herr from materiel misstatement. Al,audt involves petarring procedures to obtain audit evidence about the amounts and dacbotes in the financial cdements The procedsees selectee depend on the auditor's judgment.including the assessment of the i,ks of material misstatement of the financial statements.wheltner ale to baud a era.In making those.1st assessment,.the auditor considers nfem el control relevant to the entity', arepaaaon and lair a enation of the financial statements is order to design aunt poleaxes that ore appropriate its tie circumstances. but not for the plxpase kit exprestng an opinion an the effectiveness of the entity's item!canal.Acccrdtigh.we...dies:no such opinion.An alb dcx-rattles evaluating to appropriateness Of accounting Dollies used and the reasoneb.eneu of sianTico,t =canting estimates:node by management.as well kis emdta*1g the overd presentation o1 the tna+cid%laeemanh.we befeve that the audt evidence we nave obtained ft sufficient and eppropriate to provide a bas's fen ea oat opinions_ Wearer end fowl LLP. °_!'00 None Flea steer.suee toad pctt tear 7/131 titin:971491t970 faxe72,?0263$t A in 000:SCA WEA re>cor Request for Qualifications for Auditing Services I City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 26 weaAssurance Tax vier�- sory Report on Compliance and Internal Control Over Financial Reporting City of ICITYI,Texas Notes to Schedule of Expenciilures of Federal and Slate Awards Yea Ended[DATE] However.providing an opinion on con-piano*with those provisions was not an objective al our audit. and accorWgry.we do not tinges such on opinion.The results of our tests disclosed no Instances of noncompliance a other matters that on narked to be reported undor Government Auditing Standards unmet of Nie legal The purpose of this report is solely to detcrbe the scope of our testing of interna canna and Compliance and the results Of Mat testing.and not to provide On opinion M the effectiveness Of the entity's internal control a on compliance the moan is an Head pent of an audit patormed In OOCOrdant,with Government AUdflna StandoMs in comidenng Me enlhy's Internal cantiol and compliance ACcordngty.this Cammun'icahon is not suitable for any other purpose YrEAVER AND T1ONEEI. Dallas.Texas (DATE) weaverAuitin I Houston lot Angeles Midland CM'idland i New York City Worth anA Onix A.rn,Mr e..cr.Arrow. { Independent Avatar Repot on Internal Control over Intonate'Reporting and on Compliance and Other Matters Based on an Audit of tbanciel Statements Pedomned in Ac cadence Wth Government Audding S./endow., to the Honorable Mayor.Members of the City Counci and Cry Monogel City of(CRY;texas We have oudted.n accordance with he auditing standards generally accepted in the United States of America and the stordads applicable to fnanclal audits contained et Oovemmenr Auditing Standards issued by the Comphoter General of the United States.the Mania statements at the governmental activities.the busness.type activities.the discretely presented component unit,each major fund.and the aggregate remaining fund information of the City of(CITY,(the City).as of and tot Me year ended PATE!.and the retried notes to the hnancbt statements which concavely comprise the City's basic!hamlet statements,and have hued out report thereon doted IDATEI.Our report includes a teterance to other auditors who audited the financial statements of the(CRY(. Internal Control over Financial terming In psorning and pen arming our audit of the Manciot statements,we considered the City's interna control over financial reporting (Internal control( to determine the audt procedures Mal me appropriate in the circumstances la the purpose of expressing our opinions on the fesanciol dotements, ( but not for the purpose of expressing an opinion on Nee effectiveness of the City's intend control Accordingly.we do not express an opinion on the effectiveness of the City's internal control I # A deficiency in internal control exists when the design or operation of a control does not clow management or employees.er the normal course of pertormng thee assigned functions.to prevent or detect and correct.misstatements on a timely base. A metertol weaknea is a deficiency.or a combination of deficiencies.in internal canto!.such that there is a reasonable paublity Mata material - - - - — misstatement of the entity's financial statements we not be prevented,or detected and coaected on a timely born.A rpniecanIdehciency it a deficiency.or a combination of deficiencies.in internal conhW that is less severe than a material weakrness yet important enough to mere attention by Mose charged with governance. Our consideration of internal control was fa the Smiled purpose described in the test paagaoh of this section and was not designed to Identity all deficiencies ix Inlernd control Mat might be maned weaknesses or significant deficiencies.Given these Imitations.dung our audit we did not Ideally arty deficiencies in the City's interna control that we consider to be material weakrwsses.However,material weaknesses may east Mat have not been Identified. Compliance and Other Matteis Al pat of obtaining reasonable assurance about whether the City's Ikorncid statements are free from material misstatement we performed tests tett,compliance with certain provisions of lows regulations, conhacts.and pont agreements.noncomplance with which could have a died and material effect on the detennnasion of financial statement amounts. Weever and Bowel.LLP. 2700 North NAM Skeet,Svc.1000 I Darns.twat75201 Main:972.490.te,0 Face7270271521 CFA,AND ADVISORS I WEAVER COM Request for Qualifications for Auditing Services i City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. Page 27 weaver Assurance•Tox•Advisory Report on Compliance (Single Audit) The hlormation has been subjected to the axdeng procedwer carded is the oudt of the financial statements and certain additional procedures.ncbrdng comparing and recanting such IMotmaion directly to the slndettying aceounting and other records used to prepare the basic financial statements or to the basic financial statements thernsehes.and 01Mt addttond procedures In accordance with waling standards generals/accepted h me United States of Americo In our opinion Me tahedJe of expenditures of federal and shote awards it lahly stated h alt material respects In relation to the baric rnancid tleAemer-s or 0 while. WEAVER AND INDWELL,L LP Dotal,Texas (DATE' IM Honorable Mayor,Mernbles of the City Council and Cly Manager City of fatt{,Term Report on mired Control Ova Compianee Management of the alk is respanible for establhhisg and maintaining elfecti.•Intend control own complance will the types of compliance requiernents referred to above.In planing and peddm ing our audit of carnplarrc•.we cornidered tsar Cly's internal control noes camptance with the types of requirements that could have a direct and material effect on each mulls federal program to deterrldrse the auddng procedures That de appropriate h the circumstances for the purpose of expressing on opinion on compliance for each major federal lrxpr,o�g�-rlm--aInternal to tett and report on Intnm control over complce n Ote0ldance with the Undorm Guidance,but not lot the purpose of expressing an opinion on the effectiveness of;mooned control aver comptance.Accord ugly.war 0o not express an option on the enochvonoss of the City's internal control over comptance A deficiency or internal control over eampA+nx.....t•win...1e *r,....n n.InrvI...r..�....r„v,..,.. compliance does not allow nwnagemerl assigned functions,to prevent or 0eleci r umphrnenl os a ttcen program co as al Weave r>- Austin I Conroe 1 Daws I Fort Worth I Houston cOmplkhnce h a deficiency.or Conlblrgllt Los Angeles ' Midland { New Yoh City I San Antonio that there h a Ieasonabte possibility requiemenl of a ledad pogrom will not A slgn[kont deficiency In Infernal Cann! deficiencies.In infernal cannot over canp program that h less severe than a melena independent Auditor's Report onrCompfiana lar enough to merit attention by Mote etatg Each Major Federal Program and Report on Internal Control Over Compliance In Accordance elm Uniform Guidance,and on the Osn conliderakon of incisal control over Schedule of Expenditures d Federal and Slate Awards paragraph of This section end was not c compliance that might c beret material wed To int Mendable Mayor,Members of the Cly Councl and Crty Manager deficiencies we k etses control over cornni City of(CIM1'j.lima material weaknesses may exht that have rel Purpose.of this report Nepal on Compiasa for Each Major federal Program the purpose of the report an Internal co we have audited be City of(CITY) the Cityj's comphanco with the types of comperance requirements losing Of Infernal control over cOMpRonc described In the U.S Office of Management and Budget(OMB)Compliance Supplement that cored n+•UnMnm Guidance Accadihpty.nest have a direct and material effect on each of the City's major federal programs for the year ended (DATE).the Cory's major federal programs are identified is the summary of auditor's results section of to Report an Schedule d Expenditures of fed accompanying schedule of findng,and questioned cosh. We ham malted the financial statemen Management's t.9poMlNWy the discretely preremod component u • hformalon of the City.as of and for the management a responskle for compliance wen federal statutes legulafant and the terms and statements.which collectively comprise condhons of its leaned awards apptcoble to its lederd progans. thereon dated(DA1Ej.which conkined Auditors fesportdhitly incl uded a reference to other auditors. the financial statements that coteclNeN Dur r,sponnbSYy h to express an opinion on complanc•for each of the City's major federal programs tie responsrbriy of management and based on our weir of thetypes of fonts re accounting and other ecoids used to proamp q h retuned to above.we conducted our audit of comdiarrce In accordance with auditing standards generally accepted In the United States of Am•rioa,the standards apptcabre to fnanciol wilts contained in Government Auditing Standards. issued by the Compholer Genera of to United Slates:and the audit requhemenls at Title 2 U.S.Code of Federal Regulations(CFR)Pod 2 C Unions Administrative Requirements Cost Flinctplet and Audit Requiemenh la Fedenor Awards(Uniform Guidance'.those standards and the Uniform Guidance require that we don and perform the audit to obtain reasonable assurance about whether noncompliance with Me types of comptance requirements maenad to above Mat could hove a Sect and material effect on a masa federal program occurred.An audit includes exanining.on a lest base. evidence°bout the City's compliance with hose requhemenh and performing such other procedures as we comlde-ed necessary in the circumstances. we believe treat our audit provides a reasonable bah la our opinion on corrolance for each major federal program.However.on,oudt does not provide a legal determination of the Coy's complance. Opinion on Each Major Federal Program In our opinion.the Cory complied.In at material respects.with the types of compliance requirements referred to above'that could have a diect and material effect on each of its mala federal programs for the year ended fDAtEj. wear..,and naive(LLP. 2500 Nenn Fall Ske•r.Wee lana Dodos.leas 16201 Men;972.N0.1970 Fax:972.702d5S1 oleo AND AovuaeS I wtAY le COM Request for Qualifications for Auditing Services l City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 28 _. . weaver -- Assurance•Tax•Advisory B. Non-Collusion Affidavit APPENDIX B CITY OF PORT ARTHUR,TEXAS NON-COLLUSION AFFIDAVIT CITY OF PORT ARTHUR § § STATE OF TEXAS § By the signature below, the signatory for the bidder certifies that neither he nor the firm, corporation, partnership or institution represented by the signatory or anyone acting for the firm bidding this project has violated the antitrust laws of this State, codified at Section 15.01, et seq., Texas Business and Commerce Code, or the Federal antitrust laws, nor communicated directly or indirectly the bid made to any competitor or any other person engaged in the same line of business, nor has the signatory or anyone acting for the firm, corporation or institution submitting a bid committed any other act of collusion related to the development and submission of this bid proposal. Signature: Printed Name: Gre eterson. CPA Title: Partner,Assurance Services Company: Weaver and Tidwell, L.L.P. Date: September 4, 2019 ,� Sl,1BiBCRIBED nd sworn to befor ,`me by the above named ��17u'�YU 'x on this the day of • fflbe(,20 j . 03... ...\_4c/ g"7';',S +?gy ROB81 BANKS ` Notary Public in and for the •`7_Notary Public,State of Texas State of Texas -..-.4,:;.r4/4.!,; Comm.Expires 07-31.2023 ' °;,a`'s Notary ID 130316282 11- 1 My commission expires: Page 19 of 24 Request for Qualifications for Auditing Services I City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 30 weaver®- Assurance•Tax C. Affidavit APPENDIX C AFFIDAVIT All pages in Offeror's Responses containing statements, letters,etc.,shall be signed by a duly authorized officer of the company whose signature is binding. The undersigned offers and agrees to one of the following: X I hereby certify that I do not have outstanding debts with the City of Port Arthur. I further agree to pay succeeding debts as they become due. I hereby certify that I do have outstanding debts with the City of Port Arthur and agree to pay said debts prior to execution of this agreement. I further agree to pay succeeding debts as they become due. I hereby certify that I do have outstanding debts with the City of Port Arthur and agree to enter into an agreement for the payment of said debts. 1 further agree to pay succeeding debts as they become due. Weaver and Tidwell,L.L.P. 09/04/2019 Firm Name Date Partner,Assurance Services Auth ' ed Signature Title Greg Peterson,CPA 936.494.4126 Name(please print) Telephone greg.petersonAAweaver.com Email STATE: Texas COUNTY: Harris y SUBSCRIBED AND SWORN to before me by the above named ANL( on this the t`" day of SQ.p Lk nb./,20 i . ` ""•. ROBBI BANKS = Notary Public.State of Texas Notary Pu lie �;%4 *� Comm.Expires 07-31-2023 .r,°;,n" Notary ID 130316282 RETURN THIS AFFIDAVIT AS PART OF THE PROPOSAL Page 20 of 24 Request for Qualifications for Auditing Services City of Port Arthur (RFQ P19-098) Weaver and Tidwell, L.L.P. Page 31 weaver Assurance•Tax-Advisory D. Conflict of Interest Questionnaire APPENDIX D CONFLICT OF INTEREST QUESTIONNAIRE FORM CIQ For vendor doing business with local governmental entity This questionnaire reflects changes made to the law by H.B.23,Sam Leg.,Regular Session. OFACEUSE ONLY This quesiornaire is being filed in accordance with Chapter 178.Local Government Code,by a vendor who Dar„acan.„ has a business relationship as defined by Section 176.001(1-a)with a local governmental entity and the vendor meets requirements under Section 176.008(a). By law this quesdonnaire must be filed with the records adriniseator of the local governmental entity not later than the 7th business day eller the date the vendor becomes swine of facts that require the statement to be filed. See Section 178.003(0-1j,Local Government Code A vendor commits an offense h the vendor knowingly violates Section 178.008,Local Government Code.M offense under this section is a misdemeanor .1.1 Name of vendor who has a business relationship with local governmental entity. N/A I I Check this box if you are filing an update to a previously filed questionnaire.(The law requires that you file an updated completed questionnaire with the appropriate filing authority not later than the 7th business day atter the date on which you became aware that the originally filed questionnaire was incomplete or inaccurate.) J Name of local government officer about whom the Information Is being disclosed. N/A Name of Officer J Describe each employment or other business relationship with the local government officer,or a family member of the officer,as described by Section 176.003(ax2XA).Also describe arty family relationship with the local government officer. Complete subparts A and B for each employment or business relationship described.Attach additional pages to this Form CIO as necessary. N/A A. Is the local government officer or a family member of the officer receiving or likely to receive taxable Income. other than investment income,from the vendor? Yes No B Is the vendor receiving or likely to receive taxable income.other than investment income from or at the direction of the local government officer or a family member of the officer AND the taxable income is not received from the local governmental entity? n Yes n No J Describe each employment or business relationship that the vendor named in Section 1 maintains with a corporation or other business entity with respect to which the local government officer serves as an officer or director.or holds an ownership interest of one percent or more. N/A ▪ riCheck this box if the vendor has given the local government officer or a family member of the officer one or more gifts as described in Section 176 003(a)(2)(13),excluding gifts described in Section 176 003(3-11 J + 09.'04'2019 Signaturd of vender doing busnass with ha govemmenrat enoty Data Form provided by Texas Ethics Commission www ethicsstate ter us Revised 11:30.2,515 Request for Qualifications for Auditing Services City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 32 weaver Assurance•Tax•Advisory E. House Bill 89 Verification APPENDIX E House Bill 89 Verification I, Greg Peterson. CPA (Person name),the undersigned representative (hereafter referred to as "Representative") of Weaver and Tidwell, L.L.P. (company or business name, hereafter referred to as "Business Entity"), being an adult over the age of eighteen (18) years of age, after being duly sworn by the undersigned notary, do hereby depose and affirm the following: 1. That Representative is authorized to execute this verification on behalf of Business Entity; 2. That Business Entity does not boycott Israel and will not boycott Israel during the term of any contract that will be entered into between Business Entity and the City of Port Arthur;and 3. That Representative understands that the term "boycott Israel" is defined by Texas Government Code Section 2270.001 to mean refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations specifically with Israel, or with a person or entity doing business in Israel or in an Israeli-controlled territory,but does not include an action made for ordinary business purposes. SIGNA RE OF REPRESENTATIVE SlpSCRIBED AND SWORNO BEFORE ME, the undersigned authority, on this COCA day of c.(CyY,l�l ,20 Ill ,•,,..ko"t%,� RDBBI BANKS c -Y,'Notary Public•state of Texas � A^•p 7 Comm.EaDues 07.31.2023 \:311), �/1L��- '�-Agt�:` Notary ID 130316282 Notary Public Page 23 of 24 Request for Qualifications for Auditing Services] City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 33 weaver Assurance-Tax•Advisory F. SB 252 Chapter 2252 Certification APPENDIX F SB 252 CHAPTER 2252 CERTIFICATION I, Greg Peterson, CPA , the undersigned n representative of Weaver and Tidwell, L.L.P. (Company or Business Name) being an adult over the age of eighteen (18) years of age, pursuant to Texas Government Code, Chapter 2252, Section 2252.152 and Section 2252.153, certify that the company named above is not listed on the website of the Comptroller of the State of Texas concerning the listing of companies that are identified under Section 806.051, Section 807.051 or Section 2253.153. I further certify that should the above-named company enter into a contract that is on said listing of companies on the website of the Comptroller of the State of Texas which do business with Iran, Sudan or any Foreign Terrorist Organization, I will immediately notify the City of Port Arthur Purchasing Department. Greg Peterson, CPA Name of Company Representative (Print) i'LlASign ure of Company Representative 09/04/2019 Date Page 24 of 24 Request for Qualifications for Auditing Services; City of Port Arthur(RFQ P19-098) Weaver and Tidwell. L.L.P. I Page 34 we ave r Assurance•Tax•Advisory • Request for Qualifications for Auditing Services I City of Port Arthur(RFQ P19-098) Weaver and Tidwell, L.L.P. I Page 35 \k) 6W\142.-- ,941' cn of = 3 CITY OF PORT ARTHUR,TEXAS —�. ADDENDUM NO. ONE (1) wilicb?r Texas September 11, 2019 Bid For: Auditing Service The following clarifications, amendments, deletions, additions, revision and/or modifications are made a part of the contract documents and change the original documents only in the manner and to the extent hereinafter stated and shall be incorporated in the contract documents. Provisions of this addendum shall take precedence over requirements of the original contract documents and all BIDDERS ARE REQUESTED TO ACKNOWLEDGE SAID PROVISIONS IN THE SUBMISSION OF THEIR BID. Addendum as follows 1. DEADLINE: Sealed Bid submittals must be received and time stamped by 3:00 p.m., Central Standard Time, Friday, September 13, 2019. (The clock located in the City Secretary's office will be the official time.) All bids received will be read aloud at 3:15 p.m. on Friday, September 13,2019 in the City Council Chambers, City Hall, 5th Floor,Port Arthur, TX. If you have any questions,please contact the Purchasing Division at 409-983-8160. NOTE: ALL PAGES OF ADDENDA MUST BE SIGNED AND SUBMITTED WITH YOUR BID DOCUMENTS. (. 4 - Gt)d Clift Williams,CPPB Purchasing Manager 09/18/2019 Signore of Proposer Date Cm of CITY OF PORT ARTHUR,TEXAS 4 ort ►thug'"- ADDENDUM NO.TWO(2) Tes¢+ September 13,2019 Bid For: Auditing Service The following clarifications, amendments, deletions, additions,revision and/or modifications are made a part of the contract documents and change the original documents only in the manner and to the extent hereinafter stated and shall be incorporated in the contract documents. Provisions of this addendum shall take precedence over requirements of the original contract documents and all BIDDERS ARE REQUESTED TO ACKNOWLEDGE SAID PROVISIONS IN THE SUBMISSION OF THEIR BID. Addendum as follows 1. DEADLINE: Sealed Bid submittals must be received and time stamped by 3:00 p.m., Central Standard Time, Wednesday, September 18, 2019. (The clock located in the City Secretary's office will be the official time.) All bids received will be read aloud at 3:15 p.m. on Wednesday, September 18,2019 in the City Council Chambers, City Hall, 5th Floor,Port Arthur,TX. 2. Revised Evaluation Criteria Below EVALUATION AND SELECTION PROCESS Evaluation ratings will be on a 100 point scale and shall be based on the following criteria: 1. Firm Qualifications and Experience(Maximum Points 45) a. Size of the firm and size of firms governmental audit staff. 10 b. Firm's Current and historical experience and performance on comparable audits of Texas Cities 25 c. References 10 2. Personnel Qualifications(Maximum Points 25) a. The number of key personnel assigned to the team,including supervisory and management staff. 10 b. The experience of the firm's professional personnel to be assigned to the team. 10 c. The governmental audit experience of staff assigned to the team. 5 3. Project Approach(Maximum Points 25) a. Adequacy of work plan details. 5 b. Adequacy of proposed staffing plan for various segments of the engagement. 5 c. Adequacy of sampling techniques and analytical procedures. 5 d. Adherence to timeline in the event of potential audit problems. 10 4. Quality of Response(Maximum Points 5) Completeness of response and presentation 5 If you have any questions, please contact the Purchasing Division at 409-983-8160. NOTE: ALL PAGES OF ADDENDA MUST BE SIGNED AND SUBMITTED WITH YOUR BID DOCUMENTS OR EMAILED. rL a Cliffatn Williams,CPPB Purchasing Manager 09/18/2019 Signa of Proposer Date at' id CITY OF PORT ARTHUR,TEXAS City of 7 ort rehu'r ADDENDUM NO.THREE(3) rem September 16, 2019 Bid For: Auditing Service The following clarifications, amendments, deletions, additions, revision and/or modifications are made a part of the contract documents and change the original documents only in the manner and to the extent hereinafter stated and shall be incorporated in the contract documents. Provisions of this addendum shall take precedence over requirements of the original contract documents and all BIDDERS ARE REQUESTED TO ACKNOWLEDGE SAID PROVISIONS IN THE SUBMISSION OF THEIR BID. Addendum as follows • Attached is the revision of the Evaluation process. • The points are stated in Addendum#2 • Attached is the revisions to General Information. If you have any questions,please contact the Purchasing Division at 409-983-8160. NOTE: ALL PAGES OF ADDENDA MUST BE SIGNED AND SUBMITTED WITH YOUR BID DOCUMENTS OR EMAILED. GtA CliClef.illiams,CPPB Purchasing Manager ik�. A 09/16/2019 Signa 1 e of Proposer Date EVALUATION AND SELECTION PROCESS The submitted proposals will be reviewed and ranked by a selection committee. Members of the selection committee will not be revealed. The City reserves the right to select a firm directly from the RFQ submittals or to short list several firms to prepare a presentation for the selection committee and select a firm from the presenting firms. The City also reserves the right to: • Make the selection based on its sole discretion; • Reject any and all proposals; • Issue subsequent Requests for Proposals; • Postpone opening proposals for its own convenience; • Remedy errors in the Request for Proposals process; • Approve or disapprove the use of particular sub-consultants; • Negotiate with any, all or none of the Proposers; • Waive informalities and irregularities in the Proposals; and/or • Enter into an agreement with another Proposer in the event the originally selected Proposer defaults or fails to execute an agreement with the City GENERAL INFORMATION: Interested auditing firms should submit Request for Qualifications with the following information: • Firm name, address,phone number, email and company website address • Type of organization(LLC, etc.) • Names of Principals • Personnel to be assigned the project • Identified sub-consultants • Experience and background of personnel and sub-consultants • Five references from previous projects completed with contact information(names,titles, contact numbers) CONFLICT OF INTEREST: Provide a completed copy of the Conflict of Interest Questionnaire(Form CIQ). The Texas legislature recently enacted House Bill 914 which added Chapter 176 to the Texas Local Government Code. Chapter 176 mandates the public disclosure of certain information concerning persons doing business or seeking to do business with the City of Port Arthur, including affiliations and business and financial relationships such persons may have with City of Port Arthur officers. The form can be can be located at the Texas Ethics Commission website: https://www.ethics.state.tx.us/filinginfo/conflict forms.htm By doing business or seeking to do business with the City of Port Arthur including submitting a response to this RFP, you acknowledge that you have been notified of the requirements of Chapter 176 of the Texas Local Government Code and you are representing that you in compliance with them. Any information provided by the City of Port Arthur is for information purposes only. If you have concerns about whether Chapter 176 of the Texas Local Government Code applies to you or the manner in which you must comply,you should consult an attorney. ETHICS: Public employees must discharge their duties impartially so as to assure fair, competitive access to governmental procurement by responsible contractors. Moreover, they should conduct themselves in such a manner as to foster public confidence in the integrity of the City of Port Arthur's procurement organization. Any employee that makes purchases for the City is an agent of the City and is required to follow the City's Code of Ethics. MINIMUM STANDARDS FOR RESPONSIBLE PROSPECTIVE BIDDERS: A prospective bidder must affirmatively demonstrate bidder's responsibility. A prospective bidder must meet the following requirements: 1. Be able to comply with the required or proposed delivery schedule. 2. Have a satisfactory record of performance. 3. Have a satisfactory record of integrity and ethics. 4. Be otherwise qualified and eligible to receive an award. 5. Be engaged in a full time business and can assume liabilities for any performance or warranty service required. 6. The City Council shall not award a contract to a company that is in arrears in its obligations to the City. 7. No payments shall be made to any person of public monies under any contract by the City with such person until such person has paid all obligations and debts owed to the City,or has made satisfactory arrangements to pay the same. INVOICES: All invoices shall be mailed directly to the City of Port Arthur, Attn.: Finance, P.O. Box 1089, Port Arthur,Texas 77641. PAYMENT: Payment will be made upon receipt of the original invoice and the acceptance of the goods or services by the City of Port Arthur, in accordance with the State of Texas Prompt Payment Act, Chapter 2251 of Texas Government Code, as amended. The City's standard payment terms are net 30, i.e. payment is due 30 days from the date of the invoice. SALES TAX: The City of Port Arthur is exempt by law from payment of Texas Sales Tax and Federal Excise Tax; therefore the proposal shall not include Sales Tax. VENUE: This agreement will be governed and construed according to the laws of the State of Texas. This agreement is performable in Port Arthur,Texas, Jefferson County. COMPLIANCE WITH LAWS: The Contractor shall comply with all applicable laws, ordinances, rules, orders, regulations and codes of the federal, state and local governments relating to performance of work herein. INTEREST OF MEMBERS OF CITY: No member of the governing body of the City, and no other officer, employee or agent of the City who exercises any functions or responsibilities in connection with the planning and carrying out of the program, shall have any personal financial interest, direct or indirect, in this Contract; and, the Contractor shall take appropriate steps to assure compliance. DELINQUENT PAYMENTS DUE CITY: The City of Port Arthur Code of Ordinances prohibits the City from granting any license, privilege or paying money to any-one owing delinquent taxes, paving assessments or any money to the City until such debts are paid or until satisfactory arrangements for payment has been made. Bidders must complete and sign the AFFIDAVIT included as part of this ITB. QUANTITIES: Quantities shown are estimated, based on projected use. It is specifically understood and agreed that these quantities are approximate and any additional quantities will be paid for at the quoted price. It is further understood that the contractor shall not have any claim against the City of Port Arthur for quantities less than the estimated amount. SHIPPING INFORMATION: All bids arc to be F.O.B.,City of Port Arthur,Port Arthur,TX 77640 INCORPORATION OF PROVISIONS REQUIRED BY LAW: Each provision and clause required by law to be inserted into the Contract shall be deemed to be enacted herein and the Contract shall be read and enforced as though each were included herein. If, through mistake or otherwise, any such provision is not inserted or is not correctly inserted the Contract shall be amended to make such insertion on application by either party. CONTRACTOR'S OBLIGATIONS: The Contractor shall and will,in good workmanlike manner,perform all work and furnish all supplies and materials, machinery, equipment, facilities and means, except as herein otherwise expressly specified, necessary or proper to perform and complete all the work required by this Contract, in accordance with the provisions of this Contract and said specifications. The apparent silence of these specifications as to any detail or to the apparent omission from it of a detailed description concerning any point shall be regarded as meaning that only the best commercial practices are to prevail. While the purpose of the specifications is to indicate minimum requirements in the way of capability, performance, construction, and other details, its use is not intended to deprive the City of Port Arthur the option of selecting goods which may be considered more suitable for the purpose involved. In the event of conflicts between the written bid proposal and information obtained verbally, the vendor is specifically advised that the written bid proposal will prevail in the determination of the successful bidder. Under the Title VI of the Civil Rights Act of 1964, no person shall, on the grounds of race, color, or national origin,be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. TERMINATION FOR CAUSE: If, through any cause, the Contractor shall fail to fulfill in a timely and proper manner his obligations under this contract, or if the Contractor shall violate any of the covenants, agreements or stipulations of this contract, the City shall thereupon have the right to terminate this contract by giving written notice to the Contractor of such termination and specifying the effective date thereof, at least fifteen(15) days before the effective date of such termination. Notwithstanding the above, the Contractor shall not be relieved of liability to the City for damages sustained by the City by virtue of any breach of the contract by the Contractor, and the City may withhold any payments to the Contractor for the purpose of set-off until such time as the exact amount of damages due the City from the Contractor is determined. TERMINATION FOR CONVENIENCE: The City may terminate this contract at any time giving at least thirty(30)days notice in writing to the Contractor. If the Contract is terminated by the City as provided herein, the Contractor will be paid for the service that it has performed up to the termination date. If this contract is terminated due to fault of the Contractor,the previous paragraph hereof relative to termination shall apply. RELEASES AND RECEIPTS: The City of Port Arthur before making payments may require the Contractor to furnish releases or receipts for any or all persons performing work and supplying material or service to the Contractor, or any sub-contractors for work under this contract, if this is deemed necessary to protect its interests. CARE OF WORK: The Contractor shall be responsible for all damages to person or property that occurs as a result of his fault or negligence in connection with the work performed until completion and fmal acceptance by the City. SUB-CONTRACTS: The Contractor shall not execute an agreement with any sub-contractor or permit any sub-contractor to perform any work included in this Contract until he has received from the City of Port Arthur written approval of such agreement. INSURANCE: All insurance must be written by an insurer licensed to conduct business in the State of Texas, unless otherwise permitted by Owner. The Contractor shall, at his own expense, purchase, maintain and keep in force insurance that will protect against injury and/or damages which may arise out of or result from operations under this contract, whether the operations be by himself or by any subcontractor or by anyone directly or indirectly employed by any of them, or by anyone for whose acts any of them may be liable, of the following types and limits 1. Standard Worker's Compensation Insurance: 2. Commercial General Liability occurrence type insurance City of Port Arthur, its officers, agents, and employees must be named as an additional insured): a. Bodily injury$500,000 single limit per occurrence or$500,000 each person/$500,000 per occurrence for contracts of$100,000 or less; or Bodily injury$1,000,000 single limit per occurrence or$500,000 each person/$1,000,000 per occurrence for contracts in excess of$100,000; and, b. Property Damage$100,000 per occurrence regardless of contract amount; and, c. Minimum aggregate policy year limit of$1,000,000 for contracts of $100,000 or less; or,Minimum aggregate policy year limit of$2,000,000 for contracts in excess of$100,000. 3. Commercial Automobile Liability Insurance (Including owned, non-owned and hired vehicles coverage's). a. Minimum combined single limit of$500,000 per occurrence, for bodily injury and property damage. b. If individual limits are provided, minimum limits are $300,000 per person, $500,000 per occurrence for bodily injury and$100,000 per occurrence for property damage. Contractor shall cause Contractor's insurance company or insurance agent to fill in all information required (including names of insurance agency, contractor and insurance companies, and policy numbers, effective dates and expiration dates) and to date and sign and do all other things necessary to complete and make into valid certificates of insurance and pertaining to the above listed items, and before commencing any of the work and within the time otherwise specified,Contractor shall file completed certificates of insurance with the Owner. None of the provisions in said certificate of insurance should be altered or modified in any respect except as herein expressly authorized. Said CERTIFICATE OF INSURANCE Form should contain a provision that coverage afforded under the policies will not be altered, modified or canceled unless at least fifteen (15) days prior written notice has been given to the City of Port Arthur. Contractor shall also file with the City of Port Arthur valid CERTIFICATE OF INSURANCE on like form from or for all Subcontractors and showing the Subcontractor(s) as the Insured. Said completed CERTIFICATE OF INSURANCE Form(s) shall in any event be filed with the City of Port Arthur not more than ten(10)days after execution of this Contract. NOTICE TO PROCEED: Notice to Proceed shall be issued within ten (10) days of the execution of the Contract by OWNER. Should there be any reasons why Notice to Proceed cannot be issued within such period, the time may be extended by mutual agreement between OWNER and CONTRACTOR. CELL PHONE OR PAGER: The Contractor must have a working cell phone or pager available Monday through Friday from 8:00 a.m. to 5:00 p.m. so that the City will be able to contact the contractor.