Title
Consider approving Resolution No. 2025-122 authorizing the City Manager to execute a professional services agreement with Forvis Mazars, LLP, for Financial Audit Services for Fiscal Year-End September 30, 2025, in the amount of $131,650; and take appropriate action.
Body
REQUESTOR:
Finance Department
BACKGROUND:
The Texas Local Government Code, Section 103.001, requires City management to present a draft of the annual audits of municipalities. The City Charter, Section 2-18, requires a yearly audit of the books of accounts, financial records, and other evidence of transactions by a certified public accountant within 180 days of the end of the fiscal year. The Annual Comprehensive Financial Report (ACFR) includes all the City's funds, blended component units, and joint ventures. It complies with the accounting requirements established by the Governmental Accounting Standards Board (GASB). The City of Farmers Branch engages an independent third-party firm to conduct its annual financial audit, ensuring transparency, accountability, and an open, unbiased review of the City’s financial operations.
DISCUSSION:
This agenda item proposed a Professional Services Agreement with Forvis Mazars, LLP, in an amount not to exceed $131,650 for audit services related to the Annual Comprehensive Financial Report (ACFR), Annual Financial Assurance to Texas Commission on Environmental Quality (TCEQ), and Schedule of Federal Awards (grant reporting). The service agreement also includes reporting software license renewal and optional quotes for assistance with preparing government-wide entries in the ACFR, as well as calculations related to the Governmental Accounting Standards Board (GASB) standards 68, 75, 87, 94, 96, and 101.
For fiscal year-end (FYE) September 30, 2017, the Request for Proposal for independent audit services from Grant Thornton LLP, which continued through FYE 2019, was approved. For FYE 2020 and 2021, we retained the services of BKD, LLP, and for FYE 2022, 2023, and 2024, we retained the services of Forvis Mazars, LLP (previously FORVIS, LLP). Continuing audit services with Forvis Mazars, LLP for FYE 2025 will provide a significant benefit, as the audit firm is well-acquainted with our operations and controls, which can be invaluable in identifying trends and anomalies. Forvis Mazars, LLP provides experienced audit teams with deep knowledge and understanding of governmental reporting, as well as our specific accounting and financial reporting software, which has been well-suited to the new pronouncements from GASB.
Forvis Mazars, LLP provides experienced audit teams with deep knowledge and understanding of governmental reporting, as well as our specific accounting and financial reporting software, which has been well-suited to the new pronouncements from GASB. This agreement includes a price increase of $12,150, with $4,650 representing a year-over-year increase and $7,500 representing the new addition of capital assets reconciliation, as of FYE 2024’s engagement.
With the new State Bill 1851 in effect, the City must file financial audits within 180 days of the FYE; therefore, staff is requesting consideration of the item to meet the State-mandated timeline.
FISCAL IMPACT:
Budgeted Financial Impact: $131,650 in the proposed 2025-2026 budget.
DISTRICT:
Citywide
POSSIBLE COUNCIL ACTION:
1. I move to approve Resolution No. 2025-122 as presented.
2. I move to approve Resolution No. 2025-122 with modifications.
3. I move to table this item for further review and discussion.
ATTACHMENT(S):
1. Resolution No. 2025-122
2. Forvis Mazars Fee Letter
3. Forvis Mazars Letter of Engagement