HomeMy WebLinkAboutPR 21722: APPROVAL OF AUDIT CONTRACT WITH WEAVER AND TIDWELL, LLP \011111.///,
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INTEROFFICE MEMORANDUM
Date: 12/11/2020
To: The Honorable Mayor and City Council
Through: Ron Burton, City Manager
From: Kandy Daniel, Interim Director of Finance
RE: PR No. 21722 Approval of Audit Contract With Weaver and Tidwell, LLP
Introduction: Request approval for the City Manager to execute a letter of engagement with
Weaver and Tidwell, LLP to perform auditing services for the City of Port Arthur for the fiscal
year ending 2020.
Background: Article XII, Section 17 of the Charter of the City of Port Arthur requires that a
CPA firm be engaged annually to perform an independent audit of all accounts of the City. The
scope includes the accounts of the Economic Development Corporation. The term of the letter
of engagement is one year and will provide for the audit of the general purpose financial
statements as presented in the Comprehensive Annual Financial Report and the Single Audit
reports in accordance with Federal requirements.
Weaver and Tidwell, LLP was selected through a competitive RFQ process. This firm's
personnel are experienced in governmental audits, and meet all continuing education and
quality review requirements. The City contracted with Weaver and Tidwell, LLP for its FYE
2019 audit, with additional options to renew for another four years. It is customary for the
City to retain the same auditors for five consecutive years, the maximum the charter allows.
We find this allows us to keep costs consistent and improve efficiency. The engagement letter
is attached as exhibit A.
Budget Impact: The contract has a projected budgetary impact of$136, 000 and funds are
available in the Finance Department professional services account no. 001-1031-515-54-00.
"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
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Recommendation: The attached Proposed Resolution No. 21722 authorizes the City Manager
to execute a letter of engagement with Weaver and Tidwell, LLP to perform auditing services
for the City of Port Arthur for the fiscal year ending 2020. 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. 21722
KD: 12/11/2020
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE CITY MANAGER
TO EXECUTE A LETTER OF ENGAGEMENT WITH
WEAVER AND TIDWELL, LLP, AS INDEPENDENT
AUDITOR FOR THE CITY OF PORT ARTHUR WITH A
PROJECTED BUDGETARY IMPACT OF $136,000 FOR
THE YEAR ENDING SEPTEMBER 30, 2020. FINANCE
DEPARTMENT ACCOUNT #001-1031-515.54-00
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR:
THAT the City Manager of the City of Port Arthur is hereby authorized and directed to
execute on behalf of the City of Port Arthur an engagement letter between the City of Port Arthur
and Weaver and Tidwell, LLP, for an independent audit of all accounts of the City and the Port
Arthur Economic Development Corporation for the fiscal year ending September 30, 2020, as
described in Exhibit "A"; and
THAT a copy of said contract is attached hereto and made a part hereof as Exhibit "A"; and,
THAT a copy of the caption of this resolution be spread upon the Minutes of the City
Council.
READ, ADOPTED,AND APPROVED, this day of December, 2020, A.D., 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:
Val Tizeno, City Attorney
APPROVED FOR AVAILABILITY OF FUNDS:
Kandy Danie , Interim Director of Finance
APPROVED FOR ADMINISTRATION:
Ron Burton, City Manager
Exhibits Are Available For Review In The
City Secretary Office Or Online
EXHIBIT "A"
weaver
December 8, 2020
The Honorable Mayor and Members of
City Council and Management
City of Port Arthur,Texas
444 4th Street
Port Arthur,Texas 77640
You have requested that Weaver and Tidwell, L.L.P ("Weaver", "our", "us", and "we") audit the
governmental activities, the business-type activities, the discretely presented component unit, each
major fund, and the aggregate remaining fund information of the City of Port Arthur, Texas (the "City"),
as of September 30,2020,and for the year then ended and the related notes to the financial statements,
which collectively comprise the City's basic financial statements as listed in the table of contents. In
addition, we will audit the City's compliance over major federal award programs for the period ended
Date.
Accounting principles generally accepted in the United States of America ("U.S.GAAP"),as promulgated
by the Governmental Accounting Standards Board ("GASB") require that management's discussion and
analysis and budgetary comparison information, among other items, be presented to supplement the
basic financial statements. Such information, although not a part of the basic financial statements, is
required by GASB, which considers it to be an essential part of financial reporting for placing the basic
financial statements in an appropriate operational, economic, or historical context. As part of our
engagement,we will apply certain limited procedures to the required supplementary information ("RSI")
in accordance with auditing standards generally accepted in the United States of America ("U.S.GAAS").
These limited procedures will consist primarily of inquiries of management regarding their methods of
measurement and presentation, and comparing the information for consistency with management's
responses to our inquiries. We will not express an opinion or provide any form of assurance on the RSI.The
following RSI is required by U.S. GAAP. This RSI will be subjected to certain limited procedures but will not
be audited:
1. Management's Discussion and Analysis
2. Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual -
General Fund
3. Schedule of Changes in the Net Pension Liabilities and Related Ratios-Texas Municipal Retirement
System
4. Schedule of Contributions-Texas Municipal Retirement System
5. Schedule of Changes in the Net Pension Liabilities and Related Ratios- Fireman's Retirement and
Relief Fund
6. Schedule of Contributions- Fireman's Retirement and Relief Fund
7. Schedule of Changes in Total OPEB Liability and Related Ratios - Texas Municipal Retirement
System Supplemental Death Benefit Fund
8. Schedule of Changes in Net OPEB Liability and Related Ratios-Retiree Health Care Plan
Weaver and Tidwell, L.L.P.
CPAs AND ADVISORS J WEAVER.COM
The Honorable Mayor and Members of
City Council and Management
City of Port Arthur,Texas
December 8, 2020
Page 2 of 10
Supplementary information other than RSI will accompany the City's basic financial statements. We will
subject the following supplementary information to the auditing procedures applied in our audit of the
basic financial statements and perform certain additional procedures, including comparing and
reconciling the supplementary information to the underlying accounting and other records used to
prepare the basic financial statements or to the basic financial statements themselves, and additional
procedures in accordance with U.S. GAAS. We intend to provide an opinion on the following
supplementary information in relation to the financial statements as a whole:
1. Schedule of Expenditures of Federal Awards
2. Combining and Individual Fund Financial Statements and Schedules
3. Discretely Presented Component Unit Fund Statements
Also, the document we submit to you will include the following other additional information that will not
be subjected to the auditing procedures applied in our audit of the basic financial statements:
1. Introductory Section
2. Statistical Section
We are pleased to confirm our acceptance and our understanding of this audit engagement by means
of this letter.
Audit Objectives
The objective of our audit is the expression of opinions as to whether your basic financial statements are
fairly presented, in all material aspects, in conformity with U.S. GAAP and to report on the fairness of the
supplementary information referred to above when considered in relation to the basic financial
statements as a whole. The objective also includes reporting on internal control related to the basic
financial statements and compliance with the provisions of laws, regulations, contracts, and grant
agreements, noncompliance with which could have a material effect on the basic financial statements
in accordance with Government Auditing Standards issued by the Comptroller General of the United
States of America ("GAGAS"); and internal control over compliance related to major programs and an
opinion (or disclaimer of opinion) on compliance with federal statutes, regulations, and the terms and
conditions of federal awards that could have a direct and material effect on each major program in
accordance with the Single Audit Act Amendments of 1996 and Title 2 U.S. Code of Federal Regulations
(CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards (Uniform Guidance).
Auditor Responsibilities
We will conduct our audit in accordance with U.S. GAAS, the standards applicable to financial audits
contained in GAGAS, and the provisions of the Uniform Guidance. Those standards and the Uniform
Guidance require that we plan and perform the audit to obtain reasonable assurance about whether
the basic financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the basic financial statements.The procedures selected depend on the auditor's judgment,including the
assessment of the risks of material misstatement of the basic financial statements, whether due to error,
fraudulent financial reporting, misappropriation of assets, or violations of laws, governmental regulations,
grant agreements, or contractual agreements. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by
The Honorable Mayor and Members of
City Council and Management
City of Port Arthur,Texas
December 8, 2020
Page 3 of 10
management, as well as evaluating the overall presentation of the financial statements. If appropriate,
our procedures will therefore include tests of documentary evidence that support the transactions
recorded in the accounts, tests of the physical existence of assets, and direct confirmation of cash,
investments, and certain other assets and liabilities by correspondence with creditors and financial
institutions. As part of our audit process,we may request written representations from your attorneys, and
they may bill you for responding. At the conclusion of our audit, we will also request certain written
representations from you about the basic financial statements and related matters.
Because of the inherent limitations of an audit, together with the inherent limitations of internal control,
an unavoidable risk that some material misstatements or noncompliance (whether caused by errors,
fraudulent financial reporting, misappropriation of assets, or violations of laws or governmental
regulations) may not be detected exists, even though the audit is properly planned and performed in
accordance with U.S. GAAS and GAGAS.
In addition, an audit is not designed to detect immaterial misstatements or violations of laws or
governmental regulations that do not have a direct and material effect on the basic financial statements.
However,we will inform the appropriate level of management of any material errors,fraudulent financial
reporting, or misappropriation of assets that comes to our attention. We will also inform the appropriate
level of management of any violations of laws or governmental regulations that come to our attention,
unless clearly inconsequential. Our responsibility as auditors is limited to the period covered by our audit
and does not extend to any later periods for which we are not engaged as auditors.
In making our risk assessments, we consider internal control relevant to the City's preparation and fair
presentation of the basic financial statements in order to design audit procedures that are appropriate
in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the City's
internal control. However, we will communicate to you in writing concerning any significant deficiencies
or material weaknesses in internal control relevant to the audit of the basic financial statements that we
have identified during the audit.
During the course of the audit we may observe opportunities for economy in, or improved controls over,
your operations. We will bring such matters to the attention of the appropriate level of management,
either orally or in writing.
Mr. Greg Peterson is the engagement partner for the audit services specified in this letter, and is
responsible for supervising our services performed as part of this engagement and signing or authorizing
another qualified firm representative to sign the audit report.
We may from time to time, and depending on the circumstances, use third-party service providers in
performing this engagement. We may share confidential information about you with these service
providers, but remain committed to maintaining the confidentiality and security of your information.
Accordingly, we maintain internal policies, procedures, and safeguards to protect the confidentiality of
your personal information. In addition,we will secure confidentiality agreements with all service providers
to maintain the confidentiality of your information and we will take reasonable precautions to determine
that they have appropriate procedures in place to prevent the unauthorized release of your confidential
information to others. In the event that we are unable to secure an appropriate confidentiality
agreement,you will be asked to provide your consent prior to the sharing of your confidential information
with the third-party service provider. Furthermore,we will remain responsible for the work provided by any
such third-party service provider.
We expect to begin our audit procedures in January 2021, and issue our report in March 2021. We will
issue a written report upon completion of our audit of the City's basic financial statements.Our report will
be addressed to the Governing Body of the City.We cannot provide assurance that unmodified opinions
The Honorable Mayor and Members of
City Council and Management
City of Port Arthur,Texas
December 8, 2020
Page 4 of 10
will be expressed. Circumstances may arise in which it is necessary for us to modify our opinions, add an
emphasis-of-matter or other-matter paragraph(s), or withdraw from the engagement. If our opinions on
the financial statements or compliance are other than unmodified,we will discuss the reasons with you in
advance. If, for any reason, we are unable to complete the audit or are unable to form or have not
formed opinions,we may decline to express opinions or withdraw from this engagement.
As part of obtaining reasonable assurance about whether the basic financial statements are free of
material misstatement, we will perform tests of the City's compliance with certain provisions of laws,
regulations, contracts, and grants that could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with the provisions is not an
objective of our audit, and accordingly,we will not express such an opinion.
Our audit of the City's major federal award program(s) compliance will be conducted in accordance
with the requirements of the Single Audit Act, as amended; and the provisions of the Uniform Guidance;
and will include tests of accounting records, a determination of major programs in accordance with the
Uniform Guidance, and other procedures we consider necessary to enable us to express such an opinion
on major federal award program compliance and to render the required reports. We cannot provide
assurance that an unmodified opinion on compliance will be expressed. Circumstances may arise in
which it is necessary for us to modify our opinion or withdraw from the engagement.
The Uniform Guidance requires that we also plan and perform the audit to obtain reasonable assurance
about whether the City has complied with applicable laws and regulations and the provisions of contracts
and grant agreements applicable to major federal award programs. Our procedures will consist of
determining major federal programs and performing the applicable procedures described in the U.S.
Office of Management and Budget OMB Compliance Supplement for the types of compliance
requirements that could have a direct and material effect on each of the City's major programs. The
purpose of those procedures will be to express an opinion on the City's compliance with requirements
applicable to each of its major programs in our report on compliance issued pursuant to the Uniform
Guidance.
Also, as required by the Uniform Guidance, we will perform tests of controls to evaluate the effectiveness
of the design and operation of controls that we consider relevant to preventing or detecting material
noncompliance with compliance requirements applicable to each of the City's major federal award
programs. However,our tests will be less in scope than would be necessary to render an opinion on these
controls and, accordingly, no opinion will be expressed in our report.
In accordance with the requirements of GAGAS, we will also issue a written report describing the scope
of our testing over internal control over financial reporting and over compliance with laws, regulations,
and provisions of grants and contracts,including the results of that testing. However, providing an opinion
on internal control and compliance over financial reporting will not be an objective of the audit and,
therefore, no such opinion will be expressed.
We will issue a report on compliance that will include an opinion or disclaimer of opinion regarding the
City's major federal award programs, and a report on internal controls over compliance that will report
any significant deficiencies and material weaknesses identified; however, such report will not express an
opinion on internal control.
The Honorable Mayor and Members of
City Council and Management
City of Port Arthur,Texas
December 8, 2020
Page 5 of 10
Management Responsibilities
Our audit will be conducted on the basis that management and, those charged with governance,
acknowledge and understand that they have responsibility:
a. for the preparation and fair presentation of the basic financial statements in accordance with the
framework described in Audit Objectives above;
b. for the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of basic financial statements that are free from material misstatement,
whether due to error, for fraudulent financial reporting, misappropriation of assets, or violations of
laws, governmental regulations, grant agreements, or contractual agreements;
c. to provide us with:
i. access to all information of which management is aware that is relevant to the preparation
and fair presentation of the basic financial statements, and relevant to federal award
programs, such as records, documentation, and other matters;
ii. additional information that we may request from management for the purpose of the audit;
and
iii. unrestricted access to persons within the City from whom we determine it necessary to
obtain audit evidence.
d. for including the auditor's report, and our report on any supplementary information if described
above, in any document containing the basic financial statements that indicates that such basic
financial statements have been audited by the City's auditor;
e. for identifying and ensuring that the City complies with the laws and regulations applicable to its
activities;
f. for adjusting the basic financial statements to correct material misstatements and confirming to
us in the management representation letter that the effects of any uncorrected misstatements
aggregated by us during the current engagement and pertaining to the current year under audit
are immaterial, both individually and in the aggregate, to the basic financial statements as a
whole;
g. for maintaining adequate records, selecting and applying accounting principles, and
safeguarding assets;
h. for identifying all federal awards expended during the period including federal awards and
funding increments received prior to December 26,2014,and those received in accordance with
the Uniform Guidance generally received after December 26, 2014;
i. for preparing the schedule of expenses of federal awards (including notes and noncash
assistance received) in accordance with the Uniform Guidance;
j. for the design, implementation, and maintenance of internal control over compliance;
k. For identifying and ensuring that the City complies with laws, regulations, grants, and contracts
applicable to its activities and its federal award programs;
I. For following up and taking corrective action on reported audit findings from prior periods and
preparing a summary schedule of prior audit findings;
The Honorable Mayor and Members of
City Council and Management
City of Port Arthur,Texas
December 8, 2020
Page 6 of 10
m. For following up and taking corrective action on current year audit findings and preparing a
corrective action plan for such findings;
n. For submitting the reporting package and data collection form to the appropriate parties;
o. For making the auditor aware of any significant vendor relationships where the vendor is
responsible for program compliance;
p. with regard to the supplementary information referred to above: (a) for the preparation of the
supplementary information in accordance with the applicable criteria; (b) to provide us with the
appropriate written representations regarding supplementary information; (c) to include our
report on the supplementary information in any document that contains the supplementary
information and that indicates that we have reported on such supplementary information; and
(d) to present the supplementary information with the audited basic financial statements, or if the
supplementary information will not be presented with the audited basic financial statements, to
make the audited basic financial statements readily available to the intended users of the
supplementary information no later than the date of issuance by you of the supplementary
information and our report thereon;
q. informing us of facts that may affect the basic financial statements of which you may become
aware during the period from the date of the auditor's report to the date the basic financial
statements are issued;
r. for confirming your understanding of your responsibilities in this letter to us in your management
representation letter.
We understand that your employees will prepare all confirmations we request and will locate any
documents or support for any other transactions we select for testing.
If we agree herein or otherwise to perform any non-attest services (such as tax services or any other non-
attest services), you agree to assume all management responsibilities for those services; oversee the
services by designating an individual, preferably from senior management,with suitable skill, knowledge,
or experience;evaluate the adequacy and results of the services;and accept responsibility for them.The
entity has designed Kandy Daniel, Interim Finance Director to oversee these services. Such services
include:
i. Preparation of financial statements and related notes
ii. Preparation of schedule of expenditures of federal awards (as applicable)
iii. Assisting with entries to convert accounting records from modified accrual to full accrual (GASB
34 entries)
iv. Prepare the Data Collection Form
v. Assisting with entries to convert accounting records from cash to modified accrual
GAGAS require that we document an assessment of the skills, knowledge, and experience of
management, should we participate in any form of preparation of the basic financial statements and
related schedules or disclosures as these actions are deemed a nonaudit/nonattest service.
During the course of our engagement, we will request information and explanations from management
regarding the City's operations, internal controls, future plans, specific transactions and accounting
systems and procedures. At the conclusion of our engagement, we will require, as a precondition to the
The Honorable Mayor and Members of
City Council and Management
City of Port Arthur,Texas
December 8, 2020
Page 7 of 10
issuance of our report, that management provide certain representations in a written representation
letter.The City agrees that as a condition of our engagement to perform an audit that management will,
to the best of its knowledge and belief, be truthful, accurate and complete in all representations made
to us during the course of the audit and in the written representation letter. The procedures we perform
in our engagement and the conclusions we reach as a basis for our report will be heavily influenced by
the written and oral representations that we receive from management. False or misleading
representations could cause us to expend unnecessary efforts in the audit; or, worse, could cause a
material error or a fraud to go undetected by our procedures.
Fees and Invoicing
We estimate that the fee for this engagement will be $136,000.The fee estimate is based on anticipated
cooperation from all involved and the assumption that unexpected circumstances will not be
encountered during the engagement. This is only an estimate and the fee for these services will be
determined by the complexity of the work performed and the tasks required. If significant additional time
is necessary, we will discuss the reasons with you and arrive at a new fee estimate before we incur the
additional costs. It is understood that neither our fees nor the payment thereof will be contingent upon
the results of this engagement.
Our engagement fees do not include consulting on the adoption of new accounting standards and any
future increased duties because of any regulatory body, auditing standard or an unknown or unplanned
significant transaction. We will consult with you in the event any of these take place that may affect our
fees.
Our engagement fees also do not include time and expenses we may incur related to testimony or
production of documents in response to any subpoena related to our engagement in a matter in which
we are not a party. Charges for time and expenses we incur responding to such requests (including our
out-of-pocket expenses such as attorney's fees) will be billed separately and may be the subject of a
new engagement letter.
Our invoices for this engagement will be rendered each month as work progresses. Our invoices are
payable on presentation. For invoices not paid within sixty (60) days of the invoice date, a late charge
will be added to the outstanding balance.The late charge will be assessed at.5%on the unpaid balance
per month. If invoices are not paid within one hundred twenty (120) days of the invoice date, the
engagement will be placed on hold and we will stop work until the balance is brought current,or we may
withdraw from the engagement (and any other engagements for the same client).
Ethical Conflict Resolution
In the unlikely event that circumstances occur which we in our sole discretion believe could create a
conflict with either the ethical standards of our firm or the ethical standards of our profession in continuing
our engagement,we may suspend our services until a satisfactory resolution can be achieved or we may
resign from the engagement. We will notify you of such conflict as soon as practicable, and will discuss
with you any possible means of resolving them prior to suspending our services.
The hiring of or potential employment discussions with any of our personnel could impair our
independence. Accordingly, you agree to inform the engagement partner prior to any such potential
employment discussions taking place.
The Honorable Mayor and Members of
City Council and Management
City of Port Arthur,Texas
December 8, 2020
Page 8 of 10
Audit Documentation and Confidentiality
The audit documentation we prepare pertaining to and in support of this engagement, along with any
resulting work product, is our property and constitutes confidential information. If we are requested to
make the documentation available to regulators,government agencies (including federal agencies and
the U.S Government Accountability Office), peer reviewers, or other outside parties, we will notify you
before producing any documents in response to the request (unless prohibited by law or direction of law
enforcement). Those outside parties may intend, or decide, to distribute the copies or information
contained therein to others, including other governmental agencies. Access will be provided if required
or authorized by law or regulation, or we will otherwise comply with any requirement for your notification
and consent prior to disclosure.
It is expected that prior to the conclusion of the engagement, sections of the Data Collection Form will
be completed by our firm. The sections that we will complete summarize our audit findings by federal
grant or contract. Management is responsible to submit the reporting package (defined as including
basic financial statements, schedule of expenditures of federal awards, summary schedule of prior audit
findings, auditor's reports,and corrective action plan) along with the Data Collection Form to the federal
audit clearinghouse. The instructions to the Data Collection Form require that the reporting package be
an unlocked, unencrypted,text searchable portable document file (PDF) or else it will be rejected by the
Federal Audit Clearinghouse. We will be available to assist management in creating the PDF if needed.
We will coordinate with you the electronic submission and certification upon the reporting package
completion. If applicable, we will provide copies of our report for you to include with the reporting
package if there is a need to submit the package to pass-through entities.
The Data Collection Form and the reporting package must be submitted within the earlier of 30 days after
receipt of our reports or nine months after the end of the audit period.
We will retain our audit documentation for a period of at least seven years from the date of our report.
You agree that following such period,we may destroy the audit documentation without notice to you.
The parties do not intend this engagement letter to be for the benefit of any third-party. You may inform
us of third-parties who will receive a copy of our audit report. Unless you inform us of such third-parties,
we are not aware of who you intend to supply our audit report to and we do not anticipate other
third-parties' reliance upon our professional services unless expressly stated herein.
During the course of the engagement, we may communicate via fax, email, or other electronic
mechanism. Please be aware that communication in those mediums contains a risk of misdirected or
intercepted communications.
Dispute Resolution Procedure including Jury Waiver
Any dispute between the parties arising from or relating to this engagement or engagement letter shall,
if negotiations and other discussions fail, be first submitted to mediation before resorting to litigation. The
parties agree to conduct any mediation in good faith and make reasonable efforts to resolve any dispute
by mediation. If the parties are unable to agree upon a mediator, either party may invoke the mediation
service of the American Arbitration Association (AAA) in accordance with the provisions of the
Commercial Mediation Procedures then in effect.The parties agree to conduct the mediation in Conroe,
Texas or another mutually agreed upon location, and each party shall bear its own expenses, including
attorney's fees and costs,except for the fees of the mediator which shall be borne equally by the parties.
This engagement letter and all disputes between the parties shall be governed by, resolved, and
construed in accordance with the laws of the State of Texas, without regard to conflict-of-law principles.
The Honorable Mayor and Members of
City Council and Management
City of Port Arthur,Texas
December 8, 2020
Page 9 of 10
Any action arising out of or relating to this engagement or engagement letter shall only be brought in,
and each party agrees to submit and consent to the exclusive jurisdiction of, the federal or state courts
situated in Tarrant County,Texas.
Each party hereby irrevocably waives any right it may have to trial by jury in any proceeding arising out
of or relating to this engagement or this engagement letter.
Whenever possible, this engagement letter shall be interpreted in such a manner as to be effective and
valid under applicable laws, regulations, or published interpretation, but if any term of this engagement
letter is declared illegal, unenforceable, or unconscionable, that term shall be severed or modified and
the remaining terms of the engagement letter shall remain in force.The parties agree that the court should
modify any term declared to be illegal, unenforceable, or unconscionable in a manner that will retain
the intended term as closely as possible.
If because of a change in status or due to any other reason,any provision in this engagement letter would
be prohibited by, or would impair our independence under laws, regulations or published interpretations
by governmental bodies, professional organizations or other regulatory agencies, such provision shall, to
that extent, be of no further force and effect and this agreement shall consist of the remaining portions.
Miscellaneous
In accordance with the requirements of Government Auditing Standards, we have attached a copy of
the latest external peer review report of our firm for your consideration and files.
We may at times provide you with documents marked as drafts. You understand that those documents
are for your review purposes only. You should not or rely upon those documents in any way.
Although the engagement partner responsible for this engagement is a licensed certified public
accountant, we inform you that we have nonlicensees who may provide services pertaining to this
engagement.
If you intend to publish or otherwise reproduce the financial statements in any document and make
reference to our firm or include our report or any portion of it,and that document is assembled differently
from any paper or electronic version that we may have assembled and provided to you, you agree to
provide us with printers' proofs or masters for our review and approval before printing. You also agree to
provide us with a copy of the final reproduced material for our written approval before it is distributed. If,
in our professional judgment, the circumstances require,we may withhold our approval.
Unless we provide you with written consent in advance of such use,the audited financial statements and
our report are not intended to and should not be provided or otherwise made available for use in
connection with the sale of debt or other securities. If, in our professional judgment, the circumstances
require,we may withhold our consent.
This engagement letter sets forth all of the agreed upon terms and conditions of our engagement with
respect to the matters covered herein, and supersedes any that may have come before. This
engagement letter may not be amended or modified except by further writing signed by all the parties.
[Intentionally Left Blank]
The Honorable Mayor and Members of
City Council and Management
City of Port Arthur,Texas
December 8,2020
Page 10 of 10
We appreciate the opportunity to assist you and look forward to working with you and your team.
Sincerely,
WEAVER AND TIDWELL, L.L.P.
Conroe,Texas
Please sign and return a copy of this letter to indicate your acknowledgment of, and agreement with,
the arrangements for our engagement as described herein, including each party's respective
responsibilities. By signing below,the signatory also represents that they have been authorized to execute
this agreement.
City of Port Arthur,Texas
By:
Printed Name:
Title:
Date:
EideBailly
CPAs&BUSINESS ADVISORS
Report on Firm's System of Quality Control
October 16, 2019
To the Partners of Weaver and Tidwell, L.L.P.
and the National Peer Review Committee
We have reviewed the system of quality control for the accounting and auditing practice of Weaver and Tidwell, L.L.P.
(the firm) applicable to engagements not subject to PCAOB permanent inspection in effect for the year ended May
31,2019. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer
Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants(Standards).
A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as
described in the Standards may be found at www.aicpa.org/prsummary.The summary also includes an explanation of
how engagements identified as not performed or reported in conformity with applicable professional standards, if
any, are evaluated by a peer reviewer to determine a peer review rating.
Firm's Responsibility
The firm is responsible for designing a system of quality control and complying with it to provide the firm with
reasonable assurance of performing and reporting in conformity with applicable professional standards in all material
respects.The firm is also responsible for evaluating actions to promptly remediate engagements deemed as not
performed or reported in conformity with professional standards,when appropriate,and for remediating weaknesses
in its system of quality control, if any.
Peer Reviewer's Responsibility
Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance
therewith based on our review.
Required Selections and Considerations
Engagements selected for review included engagements performed under Government Auditing Standards, including
compliance audits under the Single Audit Act;audits of employee benefit plans, an audit performed under FDICIA, an
audit of a broker-dealer,and examinations of service organizations[SOC 1 and SOC 2 engagements].)
As a part of our peer review,we considered reviews by regulatory entities as communicated by the firm, if applicable,
in determining the nature and extent of our procedures.
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Opinion
In our opinion,the system of quality control for the accounting and auditing practice of Weaver and Tidwell,
L.L.P. applicable to engagements not subject to PCAOB permanent inspection in effect for the year ended May
31, 2019, has been suitably designed and complied with to provide the firm with reasonable assurance of
performing and reporting in conformity with applicable professional standards in all material respects. Firms can
receive a rating of pass, pass with deficiency(ies)or fail. Weaver and Tidwell, L.L.P. has received a peer review
rating of pass.
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