Page 403 - FY 2026-2027 Adopted Budget Book

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.

Single Audit Report or other audits of Federal and State grant funds will be performed in
compliance with applicable provisions of the Single Audit Act, applicable Office of Management
and Budget Circulars, and other relevant federal, state, and local rules and regulations.

The auditor’s report on the City’s financial statements will be completed within 180 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 the finance department 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 an annual comprehensive financial report (ACFR). The ACFR will
be prepared in accordance with generally accepted accounting principles. The ACFR shall be
presented to the City Council within 180 calendar days of the City’s fiscal year end. City staffing
limitations may preclude such timely reporting. In such case, the director of the finance
department 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.

III. OPERATING BUDGET MANAGEMENT

BUDGETARY ACCOUNTING BASIS. The City’s accounting records for general
governmental operations are maintained on a modified accrual basis according to Generally