R9A2-Nomination Of Audit Committee MembersMIAMIBEACH
OFFICE OF THE CITY AAANAGER
No. LTC # ee3-Jott1
Mayor Philip Levine and Members
FROM: Jimmy L. Morales, City Manager
DATE: July 1,2014
SUBJECT: Audit Committee
We need to issue an RFP for Audit Services and sought the guidance of the City
Attorney as to the requirement of an audit committee pursuant to FS 218.391. Contrary
to past practice, the City Attorney has opined that an audit committee must be
establlshed to select the external auditor for the City.
Therefore, I am requesting that the Mayor and each Commissioner plan to nominate a
member for the audit committee at the July 23 Commission meeting.
The primary purpose of an audit committee is to assist the governing body in selecting
an auditor to conduct the annual financial audit required in FS 218.39; however, the
audit committee may serve other audit oversight purposes as determined by the entity's
governing body. Under FS 218.391 the Audit Committee shall:
1 - Establish factors to use frcr the evaluation of audit services to be provided by a
certified public accounting firm;
2 - Evaluate proposals provided by qualified firms;
3 - Rank and recommend in order of preference no fewer than three firms deemed to
be the most highly qualified to perform the required services.
The GFOA Recommended Practice for Audit Committees is that ideally, all members of
the committee possess or obtain a basic understanding of governmenta! financial
reporting and auditing. The audit committee also should have access to the services of
at least one financial expert, either a committee member or an outside party engaged by
the committee for this purpose. Such a financial expert should through both education
and experience, and in a manner specifically relevant to the government sector,
possess 1) an understanding of generally accepted accounting principles and financial
statements; 2) experience in preparing or auditing financia! statements of comparable
entities; 3) experience in applying such principles in connection with the accountlng for
estimates, accruals, and reserues; 4) experience with internal accounting controls; and
5) an understanding of audit committee functions.
Please contact me if you have any questions,
JLM/PCIV \
*" ,*ffio providlg excelbnr publlc serulce ond salety to oll who llvo, wo*, anr) phy tn our vtbrant, hophol, hhatc comnuntty.
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LETTER TO COMMISSION
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