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HomeMy WebLinkAbout20120202.tiff McGee, Hearne & Paiz, LLP Certified Public Accountants and Consultants January 4, 2012 Weld County, Colorado P.O. Box 758 Greeley, Colorado 80632 Attention: Monica Mika, Director of Finance and Administration This letter is to explain our understanding of the arrangements for the services we are to perform for Weld County, Colorado (the "County") for the year ending December 31, 2011. We ask that you either confirm or amend this understanding. Audit Services We will perform an audit of the County's governmental activities, business-type activities, aggregate discretely presented component units, each major fund, and aggregate remaining fund information as of and for the year ended December 31, 2011, which collectively comprise basic financial statements. We understand that the financial statements will be prepared in accordance with accounting principles generally accepted in the United States of America. The objective of an audit of financial statements is to express an opinion on those statements. We are responsible for forming and expressing an opinion about whether the financial statements that have been prepared by management with the oversight of the Board of County Commissioners are presented fairly, in all material respects, in conformity with accounting principles generally accepted in the United States of America. We will also perform the audit of the County as of December 31, 2011 so as to satisfy the audit requirements imposed by the Single Audit Act and the U.S. Office of Management and Budget (OMB) Circular No. A-133. We will conduct the audit in accordance with auditing standards generally accepted in the United States of America and "Government Auditing Standards" issued by the Comptroller General of the United States and the provisions of the Single Audit Act, OMB Circular A-133, and OMB's Compliance Supplement. Those standards circulars, supplements, or guides require that we plan and perform the audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement whether caused by error or fraud. Accordingly, a material misstatement, may remain undetected. Also, an audit is not designed to detect errors or fraud that are immaterial to the financial statements. The determination of abuse is subjective; therefore, Government Auditing Standards do not expect us to provide reasonable assurance of detecting abuse. An audit of financial statements also includes obtaining an understanding of the County and its environment, including its internal control, sufficient to assess the risks of material misstatement of the financial statements, and to design the nature, timing. and extent of further audit procedures. An audit is not designed to provide assurance on internal control or to identify significant deficiencies or material weaknesses. However, we will communicate to management and the Board of County Commissioners any significant deficiencies or material weaknesses that become known to us during the course of the audit. 314 West 18th Street An Independently Owned Member P.O. Box 1088(Zip 82003-1088) C'ownsvyt 0-prw(irk, 2012-0202 MCGLADREY ALLIANCE Cheyenne,Wyoming 82001-4404 1-12-,20) ,),„ (307)634-2151 ((. . (11 t, I-1/2(j Fax: (307)634-4939 I _ z` I) Ft D051 McGladrey The McGladrey Alliance is a premier affiliation of independent accounting and consulting firms. The McGladrey Alliance member firms maintain their name,autonomy and independence and are responsible for their own client fee arrangements,delivery of services and maintenance of client relationships. Weld County, Colorado January 4, 2012 Page 2 We will also communicate to the Board of County Commissioners (a) any fraud involving senior management and fraud (whether caused by senior management or other employees) that causes a material misstatement of the financial statements, (b) any illegal acts, violations of provisions of contracts or grant agreements, and abuse that come to our attentiom(unless they are clearly inconsequential), (c) should any arise, any disagreements with management and other serious difficulties encountered in performing the audit, and (d) various matters related to the County's accounting policies and financial statements. In addition to our report on the County's financial statements, we will also issue the following reports or types of reports: • A report on the fairness of the presentation of the County's schedule of expenditures of federal awards for the year ending December 31, 2011. • Reports on internal control related to the financial statements and major programs. These reports will describe the scope of testing of internal control and the results of our tests of internal controls. • Reports on compliance with laws, regulations, and the provision of contracts or grant agreements. We will report on any noncompliance which could have a material effect on the financial statements and any noncompliance which could have a direct and material effect on each major program. • A schedule of findings and questioned costs. The funds that you have told us are maintained by the County and that are to be included as part of our audit are listed here. Governmental Funds: Proprietary Funds: General Fund Paramedic Enterprise Fund Public Works Fund Motor Vehicle Fund (Internal Service) Social Services Fund Health Insurance Fund (Internal Service) Human Services Fund Insurance Fund (Internal Service) Contingent Fund Phone Services Fund (Internal Service) Capital Expenditures Fund Conservation Trust Fund Fiduciary Funds: Emergency Fund Public Health Fund Retirement Plan Solid Waste Fund Other Post Employment Benefits Law Enforcement Authority Fund Agency Funds The component units whose financial statements you have told us are to be included as part of the County's basic financial statements are the Weld County Housing Authority and the E-911 Emergency Telephone Service Authority Board. The federal financial assistance programs that you have told us that the County participates in and that are to be included as part of the single audit are listed in Attachment A - Federal Financial Assistance Programs. Weld County, Colorado January 4, 2012 Page 3 Our reports on internal control will include any significant deficiencies and material weaknesses in controls of which we become aware as a result of obtaining an understanding of internal control and performing tests of internal control consistent with requirements of the standards and circulars identified above. Our reports on compliance will address material errors, fraud, abuse, violations of compliance requirements, and other responsibilities imposed by state and federal statutes and regulations and assumed by contracts; and any state or federal grant, entitlement of loan program questioned costs of which we become aware, consistent with requirements of the standards and circulars identified above. Weld County,Colorado's Responsibilities Management is responsible for the financial statements, including the selection and application of accounting policies, adjusting the financial statements to correct material misstatements, and for making all financial records and related information available to us. Management is responsible for providing us with a written management representation letter confirming certain representations made during the course of our audit of the financial statements and affirming to us that it believes the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole and to the opinion units of the financial statements. Management is responsible for establishing and maintaining effective internal control over financial reporting and for informing us of all significant deficiencies and material weaknesses in the design or operation of such controls of which it has knowledge. Management is responsible for identifying and ensuring that the County complies with the laws and regulations applicable to its activities, and for informing us about all known material violations of such laws or regulations. In addition, management is responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud affecting the County involving management, employees who have significant roles in internal control, and others where the fraud could have a material effect on the financial statements. Management is also responsible for informing us of its knowledge of any allegations of fraud or suspected fraud affecting the County received in communications from employees, former employees, analysts, regulators, or others. Management is also responsible for (a) making us aware of significant vendor relationships where the vendor is responsible for program compliance, (b) following up and taking corrective action on audit findings, including the preparation of a summary schedule of prior audit findings, and a corrective action plan, and (c) report distribution including submitting the reporting package. The Board of County Commissioners is responsible for informing us of its views about the risks of fraud within the County, and its knowledge of any fraud or suspected fraud affecting the County. The County agrees that it will not associate us with any public or private securities offering without first obtaining our consent. Therefore, the County agrees to contact us before it includes our reports or otherwise makes reference to us, in any public or private securities offering. We may conclude that we are not otherwise associated with the proposed offering and that our association with the proposed offering is not necessary, providing the County agrees to clearly indicate that we are not associated with the contents of the official statement. The County agrees that the following disclosure will be prominently displayed in the official statement: Weld County, Colorado January 4, 2012 Page 4 McGee, Hearne &Paiz, LLP, our independent auditor, has not been engaged to perform, and has not performed, since the date of its report included herein, any procedures on the financial statements addressed in that report. McGee, Hearne & Paiz, LLP, also has not performed any procedures relating to this official statement. Our association with an official statement is a matter for which separate arrangements will be necessary. The County agrees to provide us with printer's proofs or masters of such offering documents for our review and approval before printing, and with a copy of the final reproduced material for our approval before it is distributed. In the event our auditor/client relationship has been terminated when the County seeks such consent, we will be under no obligation to grant such consent or approval. Because McGee, Hearne & Paiz, LLP will rely on the County and its management and the Board of County Commissioners to discharge the forgoing responsibilities, the County holds harmless and releases McGee, Hearne & Paiz, LLP, its partners, and employees from all claims, liabilities, losses, and costs arising in circumstances where there has been a knowing misrepresentation by a member of the County's management which has caused, in any respect, McGee, Hearne & Paiz, LLP's breach of contract or negligence. This provision shall survive the termination of this arrangement for services. Weld County,Colorado's Records and Assistance If circumstances arise relating to the condition of your records, the availability of appropriate audit evidence, or indications of a significant risk of material misstatement of the financial statements because of error, fraudulent financial reporting, or misappropriation of assets which in our professional judgment prevent us from completing the audit or forming an opinion, we retain the unilateral right to take any course of action permitted by professional standards, including declining to express an opinion or issue a report, or withdrawal from the engagement. During the course of our engagement, we may accumulate records containing data that should be reflected in the County's books and records. The County will determine that all such data, if necessary, will be so reflected. Accordingly, the County will not expect us to maintain copies of such records in our possession. The assistance to be supplied by County personnel, including the preparation of schedules and analyses of accounts, has been discussed and coordinated with Barbara Connolly, Controller. The timely and accurate completion of this work is an essential condition to our completion of the audit and issuance of our audit report. Fees, Costs,and Access to Audit Documentation Our fees for the audit and accounting services described above are based upon the time required by the individuals assigned to the engagement, plus direct expenses. Interim billings will be submitted as work progresses and as expenses are incurred. Billings are due upon submission. Our fee for the services described in this letter will not exceed $71,500 unless the scope of the engagement is changed, the assistance which the County has agreed to furnish is not provided, or unexpected conditions are encountered, in which case we will discuss the situation with you before proceeding. All other provisions of this letter will survive any fee adjustment. Weld County, Colorado January 4, 2012 Page 5 Our professional standards require that we perform certain additional procedures, on current and previous years' engagements, whenever a partner or professional employee leaves the firm and is subsequently employed by or associated with a client. Accordingly, the County agrees it will compensate McGee, Hearne & Paiz, LLP for any additional costs incurred as a result of the County's employment of a partner or professional employee of McGee, Hearne& Paiz, LLP. In the event we are requested or authorized by the County or are required by government regulation, subpoena, or other legal process to produce our documents or our personnel as witnesses with respect to our engagements for the County, the County will, so long as we are not a party to the proceeding in which the information is sought, reimburse us for our professional time and expenses, as well as the fees and expenses of our counsel, incurred in responding to such requests. The documentation for this engagement is the property of McGee, Hearne & Paiz, LLP. However, you acknowledge and grant your assent that representatives of the cognizant or oversight agency or their designee, other government audit staffs, and the U.S. Government Accountability Office shall have access to the audit documentation upon their request; and that we shall maintain the audit documentation for a period of at least three years after the date of the report, or for a longer period if we are requested to do so by the cognizant or oversight agency. Access to requested documentation will be provided under the supervision of McGee, Hearne & Paiz, LLP audit personnel and at a location designated by our Firm. You have informed us that you intend to prepare a comprehensive annual financial report (CAFR) and submit it for evaluation by the Government Finance Officers Association's Certificate of Achievement for Excellence in Financial Reporting. Claim Resolution The County and McGee, Hearne & Paiz, LLP agree that no claim arising out of services rendered pursuant to this agreement shall be filed more than two years after the date of the audit report issued by McGee, Hearne & Paiz, LLP or the date of this arrangement letter if no report has been issued. The County waives any claim for punitive damages. McGee, Hearne & Paiz, LLP's liability for all claims, damages and costs of the County arising from this engagement is limited to the amount of fees paid by the County to McGee, Hearne & Paiz, LLP for the services rendered under this arrangement letter. This letter constitutes the complete and exclusive statement of agreement between McGee, Hearne & Paiz, LLP and the County, superseding all proposals, oral or written, and all other communications, with respect to the terms of the engagement between the parties. In accordance with Government Auditing Standards, a copy of our most recent peer review report is enclosed, for your information. Weld County, Colorado January 4, 2012 Page 6 If this letter defines the arrangements as the County understands them, please sign and date the enclosed copy and return it to us. McGEE, HEARNE & PAIZ, LLP t-sal,,ret. , Robert W. Dahill, Partner Confirmed on behalf of the Weld County, Colorado: /r /7 (aUld79-1i Sean P. Conway, Chair, Board o l d County Commissioners JAN 18 2012 , 2012 Enclosure a2D/ ,9-G.7i vn rf ao r r- r- r co 00 0o 00 a a a 0 0o eo 00 0o eo 00 o. rf v 00 '0 b b N N b N N 00 0 0 0 0 0 v v) .o r r r r r 0 0 0 0 0 en 0 • 6 N N N N: 00 N N N: N N N N: N N N N N N N N N N N 0 V b A o 0 0 0 0 0 o rE e r r r r r r r r r r r r r r r r r r r r N 0 0 0 N e 'C .6 N N N N N b b b 9 A P 00 4 N N N:0 - e m c N E r i° o — U � ra a C c O) U v 2 00 c T.) 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N u 2H • v 00 E o c DO 01 i c co .9 " a c8 v... ha a ' A' O c0 0 5 G c A v c o E° m °1 C C d - a °) U m a o t 0 o w v U 0 E a E v N > i f:V w °' .a O i--.7 :2 s c E o 'a v E ? w = X 5 0 0' ° v Z 0 E v i's, a U U 2 E C 5 0 0 0 s u o " ) s` s 0 0 0 0 0 a A ❑ o Z U 2 0 0 0 N v U U ZOO Q �. m u1 m U a a LU U a g Y CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS SYSTEM REVIEW REPORT October 7, 2010 To the Partners of McGee, Hearne & Paiz, LLP and the Peer Review Committee of the Nevada Society of Certifed Public Accountants We have reviewed the system of quality control for the accounting and auditing practice of McGee, Hearne & Paiz, LLP (the firm) in effect for the year ended June 30, 2010. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants. The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance therewith based on our review. The nature, objectives, scope, limitations of and the procedures performed in a System Review are described in the standards at www. aicpa.orq/prsummarv. As required by the standards, engagements selected for review included engagements performed under the Government Auditing Standards and audits of employee benefit plans. In our opinion, the system of quality control for the accounting and auditing practice of McGee, Hearne & Paiz, LLP in effect for the year ended June 30, 2010, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficiency(ies) or fail. McGee, Hearne & Paiz, LLP has received a peer review rating of pass. Brady Marti& Associ es P.C. BRADY,NIARTL A ASSOCIATES,P.C 401 Demers Avenue Suite 300 P.O Box 14296 Gland Folks,ND 58208-4296(7(1)775-4685 Fax 17011 795-749B RSM McGladrey Network an end"deny 0,,nPd Me.mbn aww,bn�!4m ill(0111 Hello