R2000-260 ACCEPTING AND AUTHORIZING EXECUTION OF ENGAGEMENT LETTER FOR CONSULTING SERVICES

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I� . I � • � DEPARTMENT OF FINANCIAL MANAGEMENT #2000-22 To: Honorable Mayor and City Council From: Steve Garm City Manager Beth Couter, inance Director �jl� Re: GASB 34 nsulting Engagement Letter An item on the agenda for the December 18, 2000 City Council meeting is the acceptance of the engagement letter for GASB 34 implementation consulting services. The Government Accounting Standards Board (GASB)has completely changed the way cities and states will report their financial condition and transactions. This is the most sweeping change in accounting history for cities and states. For the city of Decatur it will be a massive undertaking both in terms of dollars and staff time during the next three years. Every public asset, such as roads, bridges, sidewalks, etc. must be inventoried and a depreciable cost basis assigned to every public infrastructure asset. The city will be required to complete change the way it accounts for all its financial and budgetary transactions. This will also include all the elements of the financial general ledger such as utility billing, accounts payable and receivable, and all other financial subledger activities. The attached engagement letter with the city's outside auditors, Pandolfi, Topolski and Weiss, will authorize the auditors to assist city staff over the next three years during our implementation of GASB 34. They will assist in each stage of implementation including: establishing the methodology of how to assess current city operations and how to revise them to meet GASB 34 requirements; assist with RFP writing and review of potential external vendors the city will hire to design and implement new financial, budgetary and infrastructure reporting software;they will assist in establishing new procedures to collect applicable data needed for GASB 34; and any other tasks which come up during this process. It was contemplated earlier this year when the RFP was written for outside audit services that the audit firm hired would also be the firm to assist with GASB 34 implementation as that outside auditor firm would be the most familiar with the city's financial operations and data collection. Given this familiarity with city operations they would have the best understanding of how the city currently operates and therefore the city would not need to spend time and money assisting another firm in coming up to speed about our current operations, financial condition and software. k:council\GASB 34