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BONDI & Co. LLC
44 INVERNESS DRIVE EAST (303)799-6826 PHONE
ENGLEWOOD,COLORADO 80112 CERTIFIED PUBLIC ACCOUNTANTS (800)250-9083 TOLL-FREE
MANAGEMENT CONSULTANTS
www.bondico.com (303)799-6926 FAX
October 9, 2007
Board of County Commissioners
Weld County, Colorado
do Mr. Donald Warden
915 10th Street
Greeley, CO 80631
Dear Members of the County Commission:
We are pleased to confirm our understanding of the services we are to provide to Weld
County, Colorado for each year ended December 31. We will audit the financial statements of
the government activities, the business-type activities, the discretely presented component unit,
each major fund, and the aggregate remaining fund information, which collectively comprise
the basic financial statements of Weld County, Colorado as of and for each year ended
December 31 that will be prepared by your staff. We will furnish our opinions as to the
fairness of those financial statements for inclusion in your annual report.
The following supplementary information accompanying the basic financial statements is
required by generally accepted accounting principles and will be subjected to certain limited
procedures, but will not be audited:
• Management's Discussion and Analysis
• Budgetary comparisons for the general fund and major individual special revenue funds
Also, the following additional information accompanying the basic financial statements will be
subjected to the auditing procedures applied in our audit of the financial statements upon which
we will provide an opinion in relation to the basic financial statements:
• Schedule of expenditures of federal awards
• Combining and individual fund statements and schedules
• Local Highway Finance Report
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Board of County Commissioners
Weld County, Colorado
Page 2
Audit Objective
The objective of our audit is the expression of opinions as to whether your basic financial
statements are fairly presented, in all material respects, in conformity with accounting
principles generally accepted in the United States of America and to report on the fairness of
the additional information referred to above when considered in relation to the financial
statements taken as a whole.
The objective also includes reporting on:
• Internal control related to the financial statements and compliance with the provisions
of applicable laws, regulations, contracts, agreements, and grants, noncompliance with
which could have a material effect on the financial statements in accordance with
Government Auditing Standards.
• Internal control related to major programs and an opinion (or disclaimer of opinion) on
compliance with laws, regulations, and the provisions of contracts or grant agreements
that could have a direct and material effect on each major program in accordance with
the Single Audit Act Amendments of 1996 and OMB Circular A-133, Audits of States,
Local Governments, and Non-Profit Organizations.
The reports on internal control and compliance will each include a statement that the report is
intended for the information and use of the Board of County Commissioners, management,
federal awarding agencies, and pass-through entities and is not intended to be, and should not
be, used by anyone other than these specified parties.
Our audit will be conducted in accordance with auditing standards generally accepted in the
United States of America; the standards for financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; the Single Audit Act
Amendments of 1996; and the provisions of OMB Circular A-133, and will include tests of the
accounting records, a determination of major program(s) in accordance with Circular A-133,
and other procedures we consider necessary to enable us to express such opinions and to render
the required reports. If our opinion on the financial statements or the Single Audit compliance
opinions are other than unqualified, we will fully discuss the reasons with you in advance. If,
for any reason, we are unable to complete the audit or are unable to form, or have not formed,
opinions, we may decline to express opinions or to issue a report as a result of this
engagement.
Board of County Commissioners
Weld County, Colorado
Page 3
Management Responsibilities
Management is responsible for the financial statements of Weld County, Colorado. Accordingly,
your staff must take ownership of those statements and the responsibility for their accuracy. We
will advise you about appropriate accounting principles and their application, but the
responsibility for the financial statements remains with you. We anticipate that your personnel
will prepare your annual financial statements, including notes, year-end fund trial balances and
supporting schedules, including reconciliations, in the format requested before our post-
December 31 audit work can begin. We anticipate receiving much of your financial information
electronically, as described in previous discussions with your staff. It is also our understanding
that your staff will be available to assist by answering questions, analyzing accounts, preparing
confirmations and obtaining needed documentation for transactions. Further, you are required
to designate a qualified management-level individual to be responsible and accountable for
overseeing our services.
Management is responsible for establishing and maintaining effective internal control and for
compliance with the provisions of applicable laws, regulations, contracts, agreements, and
grants. In fulfilling this responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of the controls. The objectives of internal control
are to provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition, and that transactions are
executed in accordance with management's authorizations and recorded properly to permit the
preparation of financial statements in accordance with generally accepted accounting
principles, and that federal award programs are managed in compliance with applicable laws
and regulations and the provisions of contracts and grant agreements.
Management is responsible for making all financial records and related information available to
us. We understand that you will provide us with such information required for our audit and
that you are responsible for the accuracy and completeness of that information. Management
will have the Chief Financial Officer, and the Accounting Manager and other key people
present during the course of our audit field work. Management will provide intemet access, a
telephone line and adequate space for our auditors to conduct the audit in an efficient manner.
As part of our engagement, we may propose standard, adjusting, or correcting journal entries
to your financial statements. You are responsible for reviewing the entries and understanding
the nature of any proposed entries and the impact they have on the financial statements.
Management's responsibilities include adjusting the financial statements to correct material
misstatements and for confirming to us in the representation letter that 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.
Board of County Commissioners
Weld County, Colorado
Page 4
You are responsible for establishing and maintaining internal controls, including monitoring
ongoing activities; for the selection and application of accounting principles; and for the fair
presentation in the financial statements of the financial position of the governmental activities,
business-type activities, the discretely presented component unit, each major fund, and the
aggregate remaining fund information of Weld County, Colorado and the respective changes in
financial position and, where applicable, cash flows in conformity with accounting principles
generally accepted in the United States of America.
You are 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, or illegal acts affecting
Weld County, Colorado involving (1) management, (2) employees who have significant roles
in internal control, and (3) others where the fraud or illegal acts could have a material effect on
the financial statements. Your responsibilities include informing us of your knowledge of any
allegations of fraud or suspected fraud or illegal acts affecting Weld County, Colorado
received in communications from employees, former employees, grantors, regulators, or
others. In addition, you are responsible for identifying and ensuring that Weld County,
Colorado complies with applicable laws and regulations and for taking timely and appropriate
steps to remedy any fraud, illegal acts, or violations of contracts or grant agreements, or abuse
that we may report. Additionally, as required by OMB Circular A-133, it is management's
responsibility to follow up and take corrective action on reported audit findings and to prepare
a summary schedule of prior audit findings and a corrective action plan. The summary
schedule of prior audit findings should be available for our review on the first day of our
interim fieldwork. You will be asked to make representations regarding the financial statements
upon which we will rely. You will be responsible for any legal fees incurred should any false
representations be made during the course of our audit.
With regard to the electronic dissemination of audited financial statements, including financial
statements published electronically on websites, you understand that electronic sites are a
means to distribute information and, therefore, we are not required to read the information
contained in these sites or to consider the consistency of other information in the electronic site
with the original document.
Audit Procedures—General
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements; therefore, our audit will involve judgment about the number of
transactions to be examined and the areas to be tested. We will plan and perform the audit to
obtain reasonable, rather than absolute, assurance about whether the financial statements are
free of material misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3)
Board of County Commissioners
Weld County, Colorado
Page 5
misappropriation of assets, or (4) violations of laws or governmental regulations that are
attributable to Weld County, Colorado or to acts by management or employees acting on behalf
of Weld County, Colorado. Because the determination of abuse is subjective, Government
Auditing Standards do not expect auditors to provide reasonable assurance of detecting abuse.
As required by the Single Audit Act Amendments of 1996 and OMB Circular A-133, our audit
will include tests of transactions related to major federal award programs for compliance with
applicable laws and regulations and the provisions of contracts and agreements.
Because an audit is designed to provide reasonable, but not absolute, assurance and because we
will not perform a detailed examination of all transactions, there is a risk that material
misstatements or noncompliance may exist and not be detected by us. In addition, an audit is
not designed to detect immaterial misstatements or violations of laws or governmental
regulations that do not have a direct and material effect on the financial statements or major
programs. However, we will inform you of any material errors and any fraudulent financial
reporting or misappropriation of assets that come to our attention. We will also inform you of
any violations of laws or governmental regulations that come to our attention, unless clearly
inconsequential. We will include such matters in the reports required for a Single Audit. Our
responsibility as auditors is limited to the period covered by our audit and does not extend to
any later periods for which we are not engaged as auditors.
Our procedures will include tests of documentary evidence supporting the transactions
recorded in the accounts, and may include tests of the physical existence of inventories and
assets, and direct confirmation of receivables and certain other assets and liabilities by
correspondence with selected individuals, creditors, and financial institutions. We will request
written representations from your attorneys as part of the engagement, and they may bill you
for responding to this inquiry. At the conclusion of our audit, we will also require certain
written representations from you about the financial statements and related matters.
Audit Procedures—Internal Control
In planning and performing our audit, we will consider the internal control sufficient to plan
the audit in order to determine the nature, timing, and extent of our auditing procedures for the
purpose of expressing our opinions on Weld County, Colorado's financial statements and on its
compliance with requirements applicable to major programs.
We will obtain an understanding of the design of the relevant controls and whether they have
been placed in operation, and we will assess control risk. Tests of controls may be performed
to test the effectiveness of certain controls that we consider relevant to preventing and
detecting errors and fraud that are material to the financial statements and to preventing and
Board of County Commissioners
Weld County, Colorado
Page 6
detecting misstatements resulting from illegal acts and other noncompliance matters that have a
direct and material effect on the financial statements. Tests of controls relative to the financial
statements are required only if control risk is assessed below the maximum level. Our tests, if
performed, will be less in scope than would be necessary to render an opinion on internal
control and, accordingly, no opinion will be expressed in our report on internal control issued
pursuant to Government Auditing Standards.
As required by OMB Circular A-133, we will perform tests of controls over compliance to
evaluate the effectiveness of the design and operation of controls that we consider relevant to
preventing or detecting material noncompliance with compliance requirements applicable to
each major federal award program. However, our tests will be less in scope than would be
necessary to render an opinion on those controls and, accordingly, no opinion will be
expressed in our report on internal control issued pursuant to OMB Circular A-133.
An audit is not designed to provide assurance on internal control or to identify significant
deficiencies. However, we will inform the Board of County Commissioners and management,
in writing, of any matters involving internal control and its operation that we consider to be
significant deficiencies under standards established by the American Institute of Certified
Public Accountants. Significant deficiencies involve matters coming to our attention relating to
a control, or combination of control deficiencies, that, in our judgment, could adversely affect
Weld County, Colorado's ability to initiate, authorize, record, process, or report financial data
reliably in accordance with generally accepted accounting principles such that there is more
than a remote likelihood that a misstatement of Weld County, Colorado's financial statements
that is more than inconsequential will not be prevented or detected. We will also inform you
of any nonreportable conditions or other matters involving internal control, if any, as required
by Government Auditing Standards and OMB Circular A-133.
Audit Procedures—Compliance
Our audit will be conducted in accordance with the standards referred to in the section titled
Audit Objectives. As part of obtaining reasonable assurance about whether the financial
statements are free of material misstatement, we will perform tests of Weld County,
Colorado's compliance with applicable laws and regulations and the provisions of contracts and
agreements, including grant agreements. However, the objective of those procedures will not
be to provide an opinion on overall compliance, and we will not express such an opinion in our
report on compliance issued pursuant to Government Auditing Standards.
OMB Circular A-133 requires that we also plan and perform the audit to obtain reasonable
assurance about whether the auditee has complied with applicable laws and regulations and the
provisions of contracts and grant agreements applicable to major programs. Our procedures
Board of County Commissioners
Weld County, Colorado
Page 7
will consist of the applicable procedures described in the OMB Circular A-133 Compliance
Supplement for the types of compliance requirements that could have a direct and material
effect on each of Weld County, Colorado's major programs. The purpose of those procedures
will be to express an opinion on Weld County, Colorado's compliance with requirements
applicable to each of its major programs in our report on compliance issued pursuant to OMB
Circular A-133.
Audit Administration, Fees, and Other
We will require a conference room sufficient in size to accommodate five professionals to
conduct our annual examination. These rooms should be quipped with telephone and internet
access.
We may from time to time, and depending on the circumstances, use third-party service
providers in serving your account. We may share confidential information about you with
these service providers, but remain committed to maintaining the confidentiality and security of
your information. Accordingly, we maintain internal policies, procedures, and safeguards to
protect the confidentiality of your personal information. In addition, we will secure
confidentiality agreements with all service providers to maintain the confidentiality of your
information, and we will take reasonable precautions to determine that they have appropriate
procedures in place to prevent the unauthorized release of your confidential information to
others. In the event that we are unable to secure an appropriate confidentiality agreement, you
will be asked to provide your consent prior to the sharing of your confidential information with
the third-party service provider. Furthermore, we will remain responsible for the work
provided by any such third-party service providers.
We understand that your employees will prepare all cash or other confirmations we request and
will locate any documents selected by us for testing. We also understand that you will have the
documents we request, and your annual financial statements prepared, before we commence
over post year end audit work. We will develop a timeline for the audit process with the intent
on having work concluded and reports issued by June 1' each year. We will share the timeline
with you as you will be an integral part of helping us meet key dates and milestones.
At the conclusion of the engagement, we will complete the appropriate sections of and sign the
Data Collection Form that summarizes our audit findings. However, it is management's
responsibility to submit the reporting package (including financial statements, schedule of
expenditures of federal awards, summary schedule of prior audit findings, auditors' reports,
and a corrective action plan) along with the Data Collection Form to the designated federal
clearinghouse and to pass-through entities. The Data Collection Form and the reporting
package must be submitted within the earlier of 30 days after receipt of the auditors' reports or
Board of County Commissioners
Weld County, Colorado
Page 8
nine months after the end of the audit period, unless a longer period is agreed to in advance by
the cognizant or oversight agency for audits.
The audit documentation for this engagement is the property of BONDI & Co. ac and
constitutes confidential information. However, pursuant to authority given by law or
regulation, we may be requested to make certain audit documentation available to the State of
Colorado or its designee, a federal agency providing direct or indirect funding, or the U.S.
Government Accountability Office for purposes of a quality review of the audit, to resolve
audit findings, or to carry out oversight responsibilities. We will notify you of any such
request. If requested, access to such audit documentation will be provided under the
supervision of BONDI & Co. tic personnel. Furthermore, upon request, we may provide
copies of selected audit documentation to the aforementioned parties. These parties may
intend, or decide, to distribute the copies or information contained therein to others, including
other governmental agencies.
The audit documentation for this engagement will be retained for a minimum of five years after
the report release. If we are aware that a federal awarding agency, pass-through entity, or
auditee is contesting an audit fording, we will contact the party(ies) contesting the audit finding
for guidance prior to destroying the audit documentation.
Government Auditing Standards require that we provide you with a copy of our most recent
external peer review report and any letter of comment, and any subsequent peer review reports
and letters of comment received during the period of the contract. Our 2006 peer review
report accompanies this letter.
Fees for these services will be billed based on the value we provide and the time we incur. Our
2007 standard hourly rate schedule is attached, and is subject to modification each January 1.
Invoices will be rendered as the work progresses and are payable upon presentation.
We estimate our all-inclusive maximum fees for auditing the financial statements for each year
will be as follows:
December 31, 2007 Financial Statement Audit $ 75,000
December 31, 2008 Financial Statement Audit $ 77,000
December 31, 2009 Financial Statement Audit $ 79,000
Board of County Commissioners
Weld County, Colorado
Page 9
Unforeseen or changed circumstances might affect our original fee estimate. If that is the case,
we will notify you as soon as we become aware of any such circumstances.
You may request that we perform additional services not addressed in this engagement letter.
If this occurs, we will communicate with you regarding the scope of the additional services and
the estimated fees. We also may issue a separate engagement letter covering the additional
services. In the absence of any other written communication from us documenting such
additional services, our services will continue to be governed by the terms of this engagement
letter and will be performed at our standard hourly rates, plus any out-of-pocket expenses.
Weld County, Colorado and BONDI & Co. tic further agree that any dispute over fees charged
will be submitted for resolution by arbitration in accordance with the rules of the American
Arbitration Association. Such arbitration fees shall be binding and final. In agreeing to
arbitration, we both acknowledge that in the event of a dispute over fees, each of us is giving up
the right to have the dispute decided in a court of law before a judge or jury, and instead we are
accepting the use of arbitration for resolution.
Weld County, Colorado also agrees that in order to prevent disruptive practices which may
harm the business of BONDI & Co. ac during the course of our services under this
agreement, and for a period of one year thereafter, no person acting on behalf of Weld County,
Colorado, any of it's affiliates, employees or representatives, will solicit or attempt to hire or
hire any employee or consultant working for our firm. Weld County, Colorado and BONDI &
Co. ac agree that any breach of this provision would cause damages to our firm that would be
difficult and impracticable to ascertain, and the amount of$15,000 or 25% of the person's first
year compensation (whichever is higher) shall constitute a fair and reasonable estimate of those
damages. Weld County, Colorado waives any right to claim that such amount is not fair and
reasonable and agrees to pay all attorney's fees and costs incurred by BONDI & Co. ac in
enforcing this provision. BONDI & Co. ac agrees that the recovery of such amount shall
constitute its sole right, remedy and recourse against Weld County, Colorado or its affiliates,
employees and representatives for the violation of the prohibitions contained in this paragraph.
To the extent permitted by law, Weld County, Colorado agrees to hold BONDI & Co. ac,
harmless and to indemnify BONDI & Co. tc, against claims arising from the alleged negligent
acts or omissions of Weld County, Colorado, its employees, or agents, which occurred or are
alleged to have occurred during the performance under this contract, unless such acts or
omissions occurred outside the scope of their employment or were willful and wanton. Such
claims shall be subject to the limitations of the Colorado Governmental Immunity Act, C.R.S.
24-10-101, et seq.
Board of County Commissioners
Weld County, Colorado
Page 10
BONDI & Co. ac, agrees to hold Weld County, Colorado harmless and to indemnify Weld
County, Colorado against claims arising from the alleged negligent acts or omissions of
BONDI & Co. tc, its employees, or agents, which occurred or are alleged to have occurred
during the performance under this contract.
Our files are subject to peer review by outside regulators and by our own professional
association, the American Institute of Certified Public Accountants. These peer reviews are
conducted to ensure we are using the applicable standards in performing our work for you. By
approving us as your auditors, you are granting us permission to have your files available for our
peer review.
This agreement will serve as a basis of understanding between our firm and Weld County,
Colorado, from this point forth until either party notifies the other of any change in writing.
We appreciate the opportunity to be of service to you and believe this letter accurately
summarizes the significant terms of our engagement. If you have any questions, please let us
know. If you agree with the terms of our engagement as described in this letter, please sign
below and return the original to us in the enclosed envelope. The copy is for your files.
Sincerely,
BONDI& Co. ac
APP ED:
By: /1 F
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Title: fiI c -BA IAA ommi.55io
Date: /0// 7/v?
BONDI & Co. LLC
CERTIFIED PUBLIC ACCOUNTANTS
MANAGEMENT CONSULTANTS
2007 RATE SCHEDULE
Partners $ 200 - $ 300 per hour
Supervisors $ 120 - $ 200 per hour
Consultants $ 125 - $ 190 per hour
Staff $ 85 - $ 125 per hour
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OFFICE OF BOARD OF COMMISSIONERS
PHONE: 970-336-7204
�' FAX: 970-352-024242' 915 I 0TH STREET
P.O. BOX 758
C. GREELEY, COLORADO 80632
COLORADO
July 8, 2010
Bondi & Company LLC
Attn: Bert Bondi
44 Inverness Drive East
Englewood, Colorado 80112
Dear Mr. Bondi:
The Board of County Commissioners considered the request for additional funds,dated June 3,2010.
As you are aware,we have experienced a successful relationship with your company for the past five
years. During this time, Weld County has acted in good faith and provided compensation beyond the
terms of the original agreement for mileage reimbursement.
At this time, we are not prepared, nor do we find it our obligation, to pay for any additional fees
beyond those specifically called for in our current agreement. A multi-year agreement was entered
into and, as such, it is assumed the changes in workload were taken into consideration.
It has been our pleasure working with your company. Should you wish to discuss this matter further,
I may be reached at the above address and/or telephone number.
Sincerely,
ABOARD OF COUNTY COMMISSIONERS
Douglas Rademacher, air
cc: Monica Mika
Barb Connolly
Fz cc'
Ccnni-nu tieft_tcns Z 1t:17- 31 s)
BONDI & Co. LLC
44 INVERNESS DRIVE EAST (303)799-6826 PHONE
INGLEWOOD,COLORADO 80112 CERTIFIED PUBLIC ACCOUNTANTS (800)250-9083 TOLL-FREE
MANAGEMENT CONSULTANTS
www_boll dico.com
(303)799-6926 FAX
June 3, 2010
Ms. Barbara Connolly, CPA
Controller
Weld County, Colorado
Post Office Box 758
Greeley, Colorado 80632
Dear Barb:
We are writing this letter to supplement the attached invoice for the additional required audit
work performed for the December 31, 2009 financial statement audit regarding the American
Recovery and Reinvestment (ARRA) federal dollars expended during 2009, as we discussed with
you while we were on-site during fieldwork. We are asking that Weld County be fair and
considerate regarding the additional work we had to perform due to the extra federal dollars the
County received and spent.
The ARRA dollars expended by Weld County in 2009 increased the audit work surrounding the
required federal compliance audit procedures. In previous years, the number of federal programs
required to be tested for compliance was about five programs per year. In 2009, the number of
required federal programs to be tested was nine programs, or cluster of programs, that
encompass 14 Catalog of Federal Domestic Assistance (CFDA) numbers. This is far more
federal programs than have ever been tested in Weld County. We had no way of knowing the
County would receive and spend these additional federal dollars when we priced your audit.
At the time of our scheduled interim fieldwork in January 2010, we did not receive current
information from the County as to the extent of the ARRA spending. Had we known of the
ARRA spending at that time, the additional costs associated with this testing would be been
brought to your attention in January. The additional ARRA spending disclosed to us in April
2010 significantly changed the major program determination required by OMB Circular A133.
We audited $34,987,543 in additional federal dollars that you received in 2009.
Ms. Barbara Connolly, CPA
Controller
Weld County, Colorado
Page 2
The additional audit work entailed 59 hours at a cost of$8,850.
Please call me directly with any questions at 303.799.6826, extension 128.
Sincerely,
BONDI& Co. ac
nni L. Ulrich
Manager
cc: Don Warden, Budget Administration
Monica Mika, Finance and Administration
Bert R. Bondi, Partner
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