HomeMy WebLinkAboutPR 12067:AUDIT OPINION Memorandum
City of Port Arthur, Texas
Finance Department
To~
From:
Date:
Subject:
Steve Fitzgibbons, Cit~_ ~.~
Rebecca Underhill, Dir~l~lLbt~Fi~l,~ce
January 16, 2003
Proposed Resolution 12067 - A Resolution requiring Gayle W. Botley, independent auditor
for the city of Port Arthur to provide his audit opinion no later then January 28, 2003.
State Law requires the Council to receive the audit within 120 days of year end. Due to the extraordinary
circumstances that the auditor has faced this year, it is not probable that he will be able to complete his
work in time to meet tlfis deadline.
As he explains in his letter (attached), he can issue an opinion by January 28, but it most likely would be a
"qualified" opinion (an opinion that the financial statements are fair with stated exceptions); or a
"disclaimer" (that is a statement that no opinion can be rendered).
With additional time, Mr. Botley is still hopeful that an unqualified opinion can be issued, however,
additional time doesn't assure that result. He still needs information to form and support an unqualified
opinion.
This resolution is being placed on the Council agenda to make them aware that they can receive the audit
opinion on time, but it will most likely be an opinion that we would no~t want. I am recommending that the
Council reject this resolution and accept the audit in February.
P. R. NO. 12067
JJA: 1/16/03
RESOLUTION NO.
A RESOLUTION REQUIRING GAYLE W. BOTLEY, CPA'S
INDEPENDENT AUDITOR FOR THE CITY OF PORT
ARTHUR, TO PROVIDE HIS AUDIT OPINION ON THE
FINANCIAL STATEMENTS FOR THE YEAR ENDED
SEPTEMBER 30, 2002 NO LATER THAN JANUARY 28,
2003.
WHEREAS, pursuant to Section 103.003 of the Texas Local Government Code, the City of Port
Arthur is required to have an independent audit report delivered to the City Council within 120 days of the
fiscal year end; and
WHEREAS, January 28, 2003 is 120 days after September 30, 2002; and
WHEREAS, it is the desire of the Council to be in compliance with the State Law.
NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PORT ARTHUR:
Section 1. The facts and opinions in the preamble are tree and correct.
Section 2. Gayle W. Botley is hereby instructed to provide the City Council with his audit opinion
no later than January 28, 2003.
READ, ADOPTED, AND APPROVED, this~ day of January, 2003 AD, at a Regular
Meeting of the City Council of the City of Port Arthur, Texas by the following vote:
AYES: Mayor:
Councilmembers:
NOES:
ATTEST:
Mayor
Evangeline Green, City Secretary
APPROVED AS TO FORM:
Mark Sokolow, City Attorney
APPROVED FOR ADMINISTRATION:
Steve Fitzgibbons, City Manager
Rebecca Underhill, Finance Director
Gay W. Bot y 65' Assoc tes
Certified Public Accountants Member of AIOPA
January 17, 2003
"Supporting Your Fi~r~al Growth"
TO the Honorable Mayor and Members of the City Council
City of Port Arthur
RE: Request Council state position on issuance of the audit report on January 28, 2003.
We are requesting Council to submit to us in writing whether you want Gayle W. Botley & Associates
to issue you ,an audit report on January 28, 2003, regardless of the status of the data requested by us
and procedures performed on that data. If we issue the audit report on January 28, 2003, this will
allow the City to satisfy the state law of issuing audited financial statements no later than 120 days
following the end of the fiscal year.
However, we must inform you that if we do not have time to apply our procedures to data being
submitted late or obtain answers to our questions pertaining to our expanded scope of the PAEDC
portion of the audit, more than likely our opinion we render will be either a qualified opinion or a
disclaimer of opinion. There is still a possibility we will sufficiently satisfy our procedures by January
28, 2003. Regardless, the fact remains we can issue your audit report on January 28, 2003.
Please understand if Council decides to allow us to take the time we need to sufficiently satisfy our
procedures in this audit, it will not guarantee an issuance of an unqualified opinion. Sufficiently
satisfying our procedures may support reasons for rendering an opinion other than an unqualified
opinion. Furthermore, council should seek legal advice pertaining to not meeting state law filing
requirements. With this option, the opinion will be based on a completed audit rather than an audit
ending in uncertainty dueto lack of time to apply needed procedures to data being received late.
Therefore, the two questions before you today requiring action are the following:
1. Auditor should issue audit report on January 28, 2003 regardless of the status of
procedures performed.
Auditor should issue audit report on January 28, 2003 only if auditing procedures have
sufficiently been satisfied. If not, then auditor should wait and issue audit report when
procedures have been sufficiently satisfied or otherwise directed by Council.
Thank you for your prompt consideration of this matter.
Sincere. l~...ff . _~,,~~~
C _Gayle'W. Botley & Assoc~-ates-_...~
Mcgee Tower
4749 T~ O~ H~, SM~ 280
P~ ~r, ~ 77~2
gbo~y~t
(4o9) 962-1040
fax (409) 962-0668
(800) 416-8757