Page 46 - City of Bedford FY20 Approved Budget

AUDITING. In conformance with the City’s Charter and according to the provisions of the
Texas Local Government Code, Title 4, Chapter 103, the City will be audited annually by
outside independent accountants (auditor). The auditor must be a CPA firm of regional
reputation and must demonstrate that it has the breadth and depth of staff to conduct the City’s
audit in accordance with generally accepted auditing standards and contractual requirements.
The auditor must be registered as a partnership or corporation of certified public accountants,
holding a license under Article 41a1, Section 9, of the Civil Statutes of Texas, capable of
demonstrating that it has sufficient staff which will enable it to conduct the City’s audit in
accordance with generally accepted auditing standards as required by the City Charter and
applicable state and federal laws. The auditor’s report on the City’s financial statements will be
completed within 120 days of the City’s fiscal year end, and the auditor will jointly review the
management letter with the Council within 30 days of its receipt by the staff.

The City Council has established an audit committee that meets with the independent auditors
primarily at year-end to discuss the results of the audit. The committee consists of three City
Council members to be appointed by a majority of the City Council. The audit committee plays
an advisory role to the City Council and helps to facilitate communication between management,
the auditors, and the City Council. Management and City Council remain ultimately responsible
for the fair presentation of the financial statements and for obtaining and monitoring the financial
statement audit.

In conjunction with their review, the Director of Administrative Services shall respond in writing
to the City Manager and City Council regarding the auditor’s Management letter, addressing the
issues contained therein. The Council shall schedule its formal acceptance of the auditor report
upon resolution of any issues resulting from the joint review.

The auditor is retained by and is accountable directly to the City Council and will have access to
direct communication with the City Council if the City Staff is unresponsive to auditor
recommendations or if the auditor considers such communication necessary to fulfill its legal and
professional responsibilities.

The City will not require an auditor rotation; however, the Council may circulate requests for
proposal for auditor services every three to five years.

FINANCIAL REPORTING. Upon completion and acceptance of the annual audit by the
City’s auditors, the City shall prepare a comprehensive annual financial report (CAFR). The
CAFR will be prepared in accordance with generally accepted accounting principles. The CAFR
shall be presented to the City Council within 120 calendar days of the City’s fiscal year end.
City staffing limitations may preclude such timely reporting. In such case, the Administrative
Services Director will inform the City Manager and the City Manager will inform the City
Council of the delay and the reasons therefore.

The Finance Division will prepare internal financial reports sufficient to plan, monitor, and
control the City’s financial affairs. Internal reporting objectives are addressed throughout these
policies.

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