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HomeMy WebLinkAboutDocumentation_Pension Public Safety_Tab 08B_02/10/2004Rachhn Cohen & Holtz LLP Certified Public Accountants & Consultants October 1, 2001 Honorable Mayor, Village Council and Village Manager Village of Tequesta 250 Tequesta Drive., Ste 300 Tequesta, FL 33469-0273 =i ~~~ We are pleased to confirm our understanding of the services we are to provide to the Village of Tequesta, Florida (the Village). We will audit the general purpose financial statements of the Village as of and for the fiscal years ending September 30, 2001, 2002 and 2003 with an option to renew for two subsequent years (2004 and 2005) at the mutual agreement of both the Village and RCH. Audit Objectives The objective of our audit is the expression of an opinion as to whether your general purpose financial statements are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States and to report on the fairness of the additional information referred to in the first paragraph when considered in relation to the general purpose financial statements taken as a whole. Our audit will be conducted in accordance with auditing standards generally accepted in the United States and the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and will include tests of the accounting records of the Village and other procedures we consider necessary to enable us to express such an opinion. If our opinion on the general purpose financial statements is 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 an opinion, we may decline to express an opinion or to issue a report as a result of this engagement. We will also provide reports (that do not include opinions) on internal control related to the financial statements and compliance with laws, regulations, and the hi•ovisians or grant agreements, non- compliance with which could have a material effect on the financial statements as required by Government Auditing Standards. Management Responsibilities Management is responsible for establishing and maintaining internal control and for compliance with laws, regulations, contracts, and agreements. 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, 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 accounting principles generally accepted in the United States. One Southeast Third Avenue, Tenth Floor, Miami, Florida 33131 • Tel 305-377-4228 • Fax 305-377-8331 Offices in: Miami Ft. Lauderdale Boca Raton West Palm Beach Stuart - www.rchcpa.com -- --- - --- - Member of Summit International Associates, Inc. with offices in principal cities throughout the world Member of the American Instihite of Certified Public Accountants and member of the Florida [nstitute of Certified Public Accountants Honorable Mayor, Village Council and Village Manager Village of Tequesta October 1, 2001 Page 2 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. We will advise you about appropriate accounting principles and their application and will assist in the preparation of your financial statements, but the responsibility for the financial statements remains with you. That responsibility includes the establishment and maintenance of adequate records and effective internal control over financial reporting, the selection and application of accounting principles, and the safeguarding of assets. Management is responsible for 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 aggregate, to the general purpose financial statements taken as a whole. Audit Procedures-General An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial 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 caused by error or fraud. 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 a material misstatement may exist and not be detected by us. In addition, an audit is not designed to detect immaterial errors, fraud, or other illegal acts or illegal acts that do not have a direct effect on the general purpose financial statements. However, we will inform you of any material errors and any fraud that comes to our attention. We will also inform you of any other illegal acts that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not extend to matters that might arise during 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 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. Identifying and ensuring that the Village complies with laws, regulations, contracts, and agreements is the responsibility of management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we will perform tests of the Village's compliance with applicable laws and regulations and the provisions of contracts and agreements. However, the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an opinion. Honorable Mayor, Village Council and Village Manager Village of Tequesta October 1, 2001 Page 3 Audit Procedures-Internal Controls 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 opinion on the Village's general purpose financial statements. 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 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 on the general purpose financial statements. (Tests of controls 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. An audit is not designed to provide assurance on internal control or to identify reportable conditions. However, we will inform the Village Council and management of any matters involving internal control 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 to our attention relating to significant deficiencies in the design or operation of the internal control 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. Audit Administration, Fees, and Other We understand that your employees will prepare all cash or other confirmations we request and will locate any invoices selected by us for testing. The workpapers for this engagement are the property of Rachlin Cohen & Holtz LLP and constitute confidential information. However, we may be requested to make certain workpapers available to regulatory agencies pursuant to authority given to it by law or regulation. If requested, access to such workpapers will be provided under the supervision of Rachlin Cohen & Holtz LLP personnel. Furthermore, upon request, we may provide photocopies of selected workpapers to the regulatory agency. The regulatory agency may intend, or decide, to distribute the photocopies or information contained therein to others, including other governmental agencies. Honorable Mayor, Village Council and Village Manager Village of Tequesta October 1, 2001 Page 4 Our fees for these services will be at our standard hourly rates ~he fees a~-e- r.ot l to e,~ceed: Year Ending September 30, 2001 $36,000 2002 $38,000 2003 $41,000 Our standard hourly rates vary according to the degree of responsibility involved and the experience level of the personnel assigned to your audit. Our invoices for these fees will be rendered each month as the audit progresses and are payable on presentation. The above fees are based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. If significant additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the additional costs. The Village will be required to implement Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements -and Management's Discussion and Analysis -For State atzd Local Governments, for the fiscal year ending September 30, 2004. Your auditors need to be involved in the implementation process. As a result, there will be consultation and communication between the Village and Rachlin Cohen & Holtz LLP regarding implementation efforts. We estimate that fees for these annual services will range from $4,000 to $7,000 depending on the degree and nature of the consultation requested by the Village. Our fees for this engagement will be based on the number of hours at our standard billing rates required to perform these services. If the Village is required to have a Single Audit performed in accordance with auditing standards generally accepted in the United States; the standards for financial audits contained in Gove~•nment 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, Audits of States, Local Governments, and Non-Profit Organizations, during the periods covered by this letter, we will prepare an addendum to this letter indicating the additional services and fees necessary to complete the engagement. If additional services are required or requested as a result of the Village receiving grant funds under the new Florida Single Audit Act, we will prepare an addendum to this letter indicating the additional services and fees necessary to complete the engagement. The Village of Tequesta is allowed to terminate this agreement, with or without cause, upon 60 days written notice. Honorable Mayor, Village Council and Village Manager Village of Tequesta October 1, 2001 Page 5 We appreciate the opportunity to be of service to you and believe this letter accurately surnrnarizes 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 ielter, please sign the enclosed copy and return it to us. We hope this is the beginning of a long and mutually beneficial association with the Village of Tequesta. Sincerely, ~,R ;; C{'.~Jerry Cl'iiocca, CPA Director -Miami Enclosure APPR(~VF.i~- This letter correctly sets forth the understanding of the Village of Tequesta. Signed: Title: Date: F:\01\76533\Eng Ltr HEREBY CERTIFY THE A6pVE A~;C ~C;iE^,~ir~ z I~ A T~,~_;[- ~,,; CORRECT' COPY APPEAR;~~c F~C~~I THE i ~~:;^ '~F -,-~ j.~~3 ~ ;. CLERK'S OFFICE, VILLAGE C1= TEO`rs-;;•6~, F.,,.,.~YF, ,,;z,., ~~-;;. AFFI FFfCIAL SEAL TI~'~ ~_ „ ,- ~ -- ,-, ,s~~