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HomeMy WebLinkAboutContracts & Agreements_23-1997_CCv0001.pdf ~ ~ c�n ccm/uau c`�x cmnauxu"�~�c�r^ ����v]�in��@�° '��D0���° Day & Co. um�su^�/ c'^ on�"neuxu�c^'' c. rnxwr�,nc�^ mou'"mm^c"'m'""� xxvnrpvn�mc,� uvnawm/ac,^ womu�,smom sxoasce^ «ovJ e/a/cc'^ ^^mw ^a,.msm"*",cw,ondp"mu`^cm"n`"",s n^ masVouwrc �'^' |�myv^ cava� ce^ ^sscwaco'���,m.` oavm � oav"n^ �p^ |xaxmxm/�. c."^ `'�«mm/"��/n'v",c�o/mamux=^=uomums �umnysuuanoamc/»a/ m^c |Jcw pnnc�u/ |cxmxcauumow /c,ux�vxan, April 28, 1997 City Council City ofRedlands P.O. Box 3005 Redlands, California 92373 VVeare pleased toconfirm our understanding ofthe services weare bzprovide for the ChxofRedlands for the year ended June 3O. 18Q7. \NewiUauditthegenens/ purposefinanuia| staternentsof' eCityof Redlands asofand for the year ended June 3O, 1SS7. Also, the opinion letter wesubmit L you will include the paragraph which states that the supplementary section, which includes the connbining, individual fund, and individual account group financial statements, will be subject to the auditing procedures applied inour audit ofthe general purpose financial statements. Since the City ofRedlands intends to issue a Comprehensive Annual Financial Report(CAFR), the opinion letter we submit to you will include the statement that the information contained in the statistical section of the CAFR will not be subjected hothe auditing procedures applied inour audit cf the general purpose financial statements. Our audit will be a Single Audit conducted in accordance with generally accepted auditing standards; the standards for financial audits contained inGovernment Auditing Standards, issuedbvthe(�ornptroUer General of the United States; the Single Audit Act of1A84; and the pnovisionsofO&8^ Circular A-128 'Y\uditaofState and Local Govennrnenbs.''and will include tests of the acuounUngrecords ofthe{�ih/ 'of Redlands and other procedures we consider necessary to enable us to express an unqualified opinion that the financial statements are fairly presented, in all material respects, in conformity with generally accepted accounting principles and to report on the Schedule of Federal Financial Assistance and on the City of Redlands compliance with laws and regulations and its internal controls as required fora Single Audit. The management of the City of Redlands is responsible for establishing and maintaining an internal control structure. In fulfilling this nssponsibi|ih/, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorizations and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that federal financial assistance programs are managed in compliance with applicable laws and regulations. |nplanning and performing our audits for the year ended June 3O. 1087. xvewill consider the internal control structure in order to determine our auditing procedures for the purpose of expressing our opinions onthe City ofRed!ands'mgeneral purpose financial statements and onits compliance with requirements applicable to majorpnz8narns and to report on the internal control structure in accordance with OMB Circular A-1 28, and not to provide assurance on the internal control structure, a��o�su,n�/,��� " Ranchocucarno,xguc/\u/��V wwd�oK|c,n �oca�uc� pr�s ' eounxw��� " uanclucocamon. o (mx»)4*6-4/1 paxK909 u�un� ox� . . ' City ofRedlands April 28. 1997 Page We will obtain an understanding of the design of the relevant policies and procedures and whether they have been placed inoperation, and w/ewill assess control risk. Tests ofcontrols may baperformed bmtest the effectiveness of certain policies and procedures that we consider relevant to preventing and detecting errors and irregularities that are material to the general purpose financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect onthe general purpose financial statements. (Tests ofcontrols are required only ifcontrol risk iaassessed below the maximum |eve|.) Our tests, ifperformed, will beless inscope than would be necessary to render an opinion on the internal control structure policies and procedures and, accordingly, noopinion will beexpressed. We will perform tests ofcontrols, as required by 0K8B Circular A-128, toevaluate the effectiveness of the design and operation of internal control policies and procedures that we consider relevant to preventing or detecting material noncompliance with specific requirements, general requirements, and requirements governing claims for advances and reimbursements and amounts claimed or used for matching that are applicable to each of the City of Redlands's nonmajor federal financial assistance programs. Our tests will be less in scope than would be necessary to render an opinion on the internal control structure policies and, accordingly, noopinion will beexpressed. We will inform you of any matters involving internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming toour attention relating bosignificant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements. VVewill also inform you ofany nonreportable conditions or other matters involving the internal control structure, if any, as required by OMB Circular A-128. Compliance with laws, regulations, contracts, ondgnentagnaernentsapp|icab|ehothaCityofFled|andsis the responsibility ofthe City ofRed|ando'amanagement. Aspart ofobtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we will perform tests of the City of Redlands's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective ofour audit will not betoprovide anopinion onoverall compliance with such provisions, and vvewill not express such anopinion. Our audit will be conducted in accordance with the standards referred 'to in the second paragraph. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements governing types of services allowed or unallowed; eligibility; matching, level of effoM or earmarking; reporting; special tests and provisions; claims for advances and reimbursements; and amounts claimed or used for matching that are applicable bo major programs occurred. The purpose of our audit will be to express an opinion on the City of Redlands's compliance with the specific requirements applicable ho major programs habad in the previous sentence. We will perform certain procedures to test the City of Redlands's compliance with general requirements applicable to its federal financial assistance programs as required by OMB Circular A-128. Our procedures will belimited bothe applicable procedures described }nthe OMB's" Compliance Supplement for Single Audits ofState and Local 8overnrnents.^ Our procedures will be substantially less inscope than an audit, the objective of which is the expression of an opinion on the general requirements, and we will not express such amopinion. ~ ' - . City nfRedlands April 28. 19S7 Page Our procedures will include tests ofdocumentary evidence supporting the transactions recorded inthe accounts, and may include test of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, creditors, and financial institutions. VVewill also request written representations from your attorneys. At the conclusions of the audit, we will also request certain written representations from you about the financial statements and related matters. As required by the Single Audit Act of1QG4. our audit will include tests oftransactions related tofederal assistance programs for compliance with applicable laws and regulations. However, because ofthe concept of reasonable assurance and because we will not perform a detailed examination of all transactions, there is a risk that material errors, irregularities, or illegal acts, including fraud or defalcations, may exist and not bedetected byus. \Newill inform you, however, ofany matters ofthat nature that come to our attention, and 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 matters that might ohoedurinOany |oterperiodsfnrxvhiohwearenotengaQedooauditono. We understand that you will provide us with the basic information required for our audit and that you are responsible for the accurate and completeness ofthat information. VVawill advise you about appropriate accounting principles and their application. The City will beresponsible for preparing, typing and printing of the Comprehensive Annual Financial Report and the responsibility for the financial statements remains with you. The responsibility for the financial sbabanlenh; remains with you. This responsibility includes the maintenance of adequate records and related internal control structure policies and procedures, the selection and application of accounting principles, and the safeguarding ofassets. VVeunderstand that your employees will type all cash or other confirmations we request and will locate any invoices selected bvusfor testing. We understand the workpapers for this engagement are the property of Vavrinek, Trine, Day& Co. and constitute confidential information. However, vvemay berequested tomake certain workpapers available to the City's Cognizant Agency pursuant to authority given to it by law or regulation. |frequested, access to such workpapers will be provided under the supervision of Vavrinek, Trine, Day &Co. personnel. Furthermore, upon request, we may provide photocopies of selected workpapers to the City's Cognizant Agency. The Cognizant Agency may intend, or decide, to distribute the photocopies or information contained therein boothers, including other governmental agencies. Our fees for these services will be based on the actual time spent at our standard hourly rates. Our standard hourly rates vary according to the degree of responsibility involved and the experience level of the personnel assigned bmyouraudit Our invoices for these fees will berendered each month oswork progresses and are payable onpresentation. The maximum not hzexceed price for the City ofRedlands audit for the year ended June 3O. 1QQ7. ieS21,QOO. This fee |sbased onanticipated cooperation from your personnel and the assumption that significant unexpected circumstances will not be encountered during the audit. The Auditors may also furnish other accounting services, which may include advisory and system accounting services as requested by the City, and shall receive payment for such additional service at the rates indicated under the compensation section of this contract. All additional services would be approved bythe City prior hothe commencement ofsuch work. - ~ . . City of Redlands April 28. 1SQ7 Page We appreciate the 0noorb|m�yhJb8mfserv�etothe C�vofRedlands and believe this ke�oraccurately summarized thesignificant' ' honnsofouren0ogemenL |fyou have any quesdlet If with return ittous. Yours very truly, Kevin T. Pulliam ufV/A/R\NEK, TRINE, DAY& CO. K3'Pdmm RESPONSE: This letter correctly sets forth the drshad| ofthe City ofRedlands. Title: Swen Larson, Mayor Date: May 1, 1997 Cit of Red California '