HomeMy WebLinkAboutContract 1528 MCGLADREY&PULLEN, LLP
® Certified Public Accountants and Consultants
international
July 17, 2000
Columbia Heights Economic Development Authority
City of Columbia Heights
590 40~h Avenue N.E.
Columbia Heights, MN 55421
Attention: Randy Schumacher, Commumty Development Assistant
This letter is to explain our understanding of the arrangements regarding our engagement to assist you
with determining that certain reports, that were prepared by City of Columbia Heights' personnel, are
based on the supporting records from the City's accounting system or other statistical databases. The
following reports (the HUD Reports) related to the City of Columbia Heights' Section 8 Program of the
Department of Housing and Urban Development 0-IUD), for the years ended December 31, 1997, 1998
and 1999 will be subjected to the procedures detailed below.
Quarterly Requisition for Partial Payment of Annual Contribution- HUD 52663
Voucher for Payment of Annual Contributions - HUD 52681
Annual Balance Sheet - HUD 52595
Annual Report on Program Utilization- Certificates and Vouchers - HUD 52683
Annual Estimate of Total Required Annual Contributions - HUD 52672 and 52673
Annual Documentation for Ongoing Admimstrative Fee
Annual Documentation for Hard-to House Fee
Documentation for portability revenue billings to other agencies for Section 8 Programs-
Certificates and Vouchers
1. We will obtain from you a copy of each of the HUD Reports that the City completed that covers the
time period of January 1, 1997 to December 31, 1999. We will provide you with a summary of the
reports and indicate if any of the reports are not provided.
2. We will determine the clerical accuracy of each HUD Report provided to us by recomputing the data
on the report.
3. For every entry made by City personnel on the HUD Reports, we will trace that amount to the City's
general ledger or other supporting documentation to determine whether the information is properly
supported by the City's internal records.
4. For all HUD Reports that support a request for reimbursement from HUD or other agencies, we will
determine by tracing to your cash receipts records, that the claimed amount was received.
5. We will obtain a listing from you, that you will generate from the Happy software system, of all
certificates and vouchers for the time period of January 1, 1997 to December 31, 1999 to determine
which certificates and vouchers are portable from other agencies. For each portable certificate and
voucher identified, we will trace the portable certificate and/or voucher to the monthly portability
revenue billings as prepared by City personnel to determine if the portable certificate or voucher was
properly billed to the other agencies. We will provide a smm-tmry list of the portable certificates and
vouchers identified and indicate whether or not we were able to verify if the portable certificates and
vouchers were billed. -
Twin Cities Practice
801 Nicollet Avenue, STE 1300
Minneapolis, Minnesota 55402-2529
(612) 332-4300 FAX (612) 376-9876
Worldwide
Services
Through
RSM International
We ask that you either confirm or amend our understanding regarding the above procedures. The
sufficiency of these procedures is solely the responsibility of the City of Columbia Heights. We make no
representation regarding the sufficiency of the procedures described above either for the purpose for
which these services have been requested or for any other purpose.
Our engagement will be conducted in accordance with standards established by the American Institute of
Certified Public Accountants, to selected records and transactions for the period referred to in the
preceding paragraph. Because these procedures do not constitute an audit made in accordance with
generally accepted auditing standards, we will not express an opinion on any of the specific elements,
accounts, or items referred to in our report or on the financial statements of the City of Columbia Heights
taken as a whole.
At the conclusion of our engagement, we will submit a report in letterform outlining the procedures
performed and our findings, observations and recommendations resulting from the procedures performed.
Our report will contain a statement that it is intended solely for the use of the City of Columbia Heights
and should not be used by those who have not agreed to the procedures and taken responsibility for the
sufficiency of the procedures for their purposes. Other parties to whom the report may be provided
should be advised that the procedures were performed only for the purposes of the specified users.
Should you desire that others be added to our report as specified users, please contact us, as it will be
necessary to obtain their agreement with respect to the sufficiency of the procedures for their purpose.
Our report will also contain a paragraph pointing out that if we had performed additional procedures or if
we had conducted an audit of the specified elements, accounts, or items of the financial statements in
accordance with generally accepted auditing standards, matters in addition to any findings, observations
and recommendations that may result from the procedures performed above might have come to our
attention and been reported to you.
During the course of our engagement, we may accumulate records contaim'ng data which should be
reflected in your books and records. You will determine that all such data, if necessary, will be so
reflected. Accordingly, you will not expect us to maintain copies of such records in our possession.
The City of Columbia Heights acknowledges that McGladrey & Pullen, LLP will use employees of RSM
McGladrey, Inc., an indirect wholly owned subsidiary of H&R Block, Inc., for certain admimstrative
support and professional services relating to the City of Columbia Heights. To facilitate the delivery of
these services, the City of Columbia Heights authorizes McGladrey & Pullen, LLP to allow employees of
RSM McGladrey, Inc. access to the City of Columbia Heights file, financial information and other
confidential reformation as determined by McGladrey & Pullen, LLP. RSM McGladrey, Inc. has agreed
to comply with Rule 301 of the AICPA Code of Professional Conduct, Confidential Client Information.
RSM McGladrey, Inc. is not a licensed certified public accounting firm and will not offer to perform
public accounting services.
The assistance to be supplied by your personnel has been discussed and coordinated with Mr. Randy
Schumacher, Community Development Assistant. The timely and accurate completion of this work is an
essential condition to the completion of our services and issuance of our report. We anticipate that we
will begin our procedures the week of July 17, 2000 with completion of testing the week of July 24,2000.
We anticipate issuing our report with any findings, observations and recommendations by August 11,
2000.
Our fees are based on 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
R®
MCGLADREY&PULLEN, LLP
Certified Public Accountants and Consultants
RSM
international
To the Board of Commissioners
City of Columbia Heights Economic
Development Authority
590 40t~ Avenue Northeast
Columbia Heights, MN 55421
August 25, 2000
Attention: Randy Schumacher, Community Development Assistant
This letter is to explain our understanding of the arrangements for the services we are to perform for the
City of Columbia Heights Economic Development Authority for the year ending December 31, 1999. We
ask that you either confirm or amend that understanding.
We will compile the City of Columbia Heights Economic Development Authority's HUD 52595 and
HUD 52681, including Annual Documentation for Ongoing Administrative Fee (the HUD Reports) for
the above mentioned year from the adjusted trial balances and other data furnished to us by you and your
employees, and issue an accountant's compilation report thereon in accordance with Statements on
Standards for Accounting and Review Services issued by the American Institute of Certified Public
Accountants.
We understand that the HUD Reports will be prepared in accordance with the requirements of HUD,
which differ from generally accepted accounting principles and will not include all disclosures necessary
for a fair presentation. We will not audit or review the HUD Reports, and accordingly, we will not
express an opinion or any other form of assurance on them.
A compilation is limited to presenting information that is the representation of management in the form of
the HUD Reports. Furthermore, the services that we will perform are not designed and cannot be relied
upon to disclose errors, fraudulent financial reporting, misappropriation of assets or illegal acts, should
any exist. However, we will inform the appropriate level of management of any material errors,
fraudulent financial reporting, misappropriation of assets, or illegal acts that come to our attention, unless
they are clearly inconsequential.
All of the information included in the HUD Reports is the representation of management. We direct your
attention to the fact that management has the responsibility for the proper recording of the transactions in
the books of account, for the safeguarding of assets, for the substantial accuracy of the HUD Reports and
for identifying and ensuring that the City of Columbia Heights Economic Development Authority
complies with the laws and regulations applicable to its activities.
Twin Cities Practice
801 Nicollet Avenue, STE 1300
Minneapolis, Minnesota 55402-2529
(612) 332-4300 FAX (612) 376-9876
Worl&
Serv
Thro
RSM Internatk
4de
.ces
~gh
,hal
The City of Columbia Heights Economic Development Authority acknowledges that McGladrey &
Pullen, LLP will use employees of RSM McGladrey, Inc., an indirect wholly owned subsidiary of H&R
Block, Inc., for certain administrative support and professional services relating to The City of Columbia
Heights Economic Development Authority. To facilitate the delivery of these services, the City of
Columbia Heights Economic Development Authority authorizes McGladrey & Pullen, LLP to allow
employees of RSM McGladrey, Inc. access to the City of Columbia Heights Economic Development
Authority files, financial information and other confidential information as determined by McGladrey &
Pullen, LLP. RSM McGladrey, Inc. has agreed to comply with Rule 301 of the AICPA Code of
Professional Conduct, Confidential Client Information. RSM McGladrey, Inc. is not a licensed certified
public accounting finn and will not offer or perform pubhc accounting services.
During the course of our engagement, we may accumulate records containing data which should be
reflected in your books and records. You will determine that all such data will be so reflected.
Accordingly, you will not expect us to maintain copies of such records in our possession.
We will render such accounting and bookkeeping assistance as we find necessary for the preparation of
the financial statements and as may be arranged with you or your authorized employees. The assistance to
be supplied by your personnel in the preparation of schedules and analyses of accounts has been discussed
and coordinated with Mr. Randy Schumacher. The timely and accurate completion of this work is an
essential condition to our completion of the engagement and issuance of our compilation report.
Our fees are based on the time required by the individuals assigned to the engagement, plus direct
expenses. Interim billings will be submitted as services are rendered and as expenses are incurred.
Billings are due upon submission. As stated in the agreed-upon-procedures arrangement letter dated July
17, 2000, our fees will not exceed $15,000.
The City of Columbia Heights Economic Development Authority hereby indemnifies McGladrey &
Pullen, LLP and its partners and employees and holds them harmless from all claims, liabilities, losses
and costs arising in circumstances where there has been a knowing misrepresentation by a member of the
City of Columbia Heights Economic Development Authority's management, regardless of whether such
person was acting in the City of Columbia Heights Economic Development Authority's interest. This
indemnification will survive termination of this letter.
In the event we are requested or authorized by the City of Columbia Heights Economic Development
Authority 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 City of Columbia
Heights Economic Development Authority, the City of Columbia Heights Economic Development
Authority will, so long as we are not 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.
You understand that compiled financial statements are not appropriate for inclusion in a public or private
offering of debt or equity securities. Accordingly, you agree not to include our reports or make reference
to us in any way in any public or private securities offering.
If you intend to publish or otherwise reproduce the financial statements and make reference to us in any
other manner, you agree to provide us with printer's proofs or masters for our review and approval before
printing. You also agree to provide us with a copy of the final reproduced material for our approval before
it is distributed. Our fees for review and approval of such proofs or masters, and any related services to be
provided to you in connection therewith, will be established with you at the time such services are
determined to be necessary or appropriate.
It is agreed by the City of Columbia Heights Economic Development Authority and McGladrey & Pullen,
LLP or any successors in interest that no claim arising out of services rendered pursuant to this agreement
by or on behalf of the City of Columbia Heights Economic Development Authority shall be asserted more
than two years after the date of the last compilation report issued by McGladrey & Pullen, LLP.
This letter constitutes the complete and exclusive statement of the agreement between McGladrey &
Pullen, LLP and the City of Columbia Heights Economic Development Authority, superseding all
proposals oral or written and all other communications, except for the agreed-upon-procedures
arrangement letter dated July 17, 2000, with respect to the terms of the engagement between the parties.
If this letter defines the arrangements as'you understand them, please sign and date the enclosed copy and
return it to us.
Mc.Qladr~ay & Pullen, LLP
Damel~A. ~, Partner
,2000
MCGLADREY& PULLEN, LLP
RSM
international
December 7, 2000
Columbia Heights Economic Development Authority
City of Columbia Heights
590 40th Avenue N.E.
Columbia Heights, MN 55421
Attention: Randy Schumacher, Community Development Assistant
This letter is to explain our understanding of the arrangements regarding our engagement to assist you
with determimng that certain reports, that were prepared by City of Columbia Heights' personnel, are
based on the supporting records from the City's accounting system or other statistical databases for the
years ended December 31, 1997, 1998 and 1999. We will not be responsible for determining whether
other documents exist that conflict with the schedules that will be provided by City personnel or by HUD.
This letter amends thc arrangement letter dated July 17, 2000 between the City of Columbia Heights and
McGladrey and Pullen, LLP.
The following reports (the HUD Reports) related to the City of Columbia Heights' Section 8 Program of
the Department of Housing and Urban Development (HUD), for the years ended December 31, 1997,
1998 and 1999 will be subjected to the procedures detailed below.
Quarterly Requisition for Partial Payment of Annual Contribution - HUD 52663
Voucher for Payment of Annual Contributions - HUD 52681, including Annual Documentation
for Ongoing Administrative Fee and Hard-to-House Fee
Annual Balance Sheet - HUD 52595
Annual Report on Program Utilization- Certificates and Vouchers - HUD 52683
Estimate of Total Required Annual Contributions - HUD 52673
Supporting Data for Annual Contributions - HUD 52672
1. We will obtain from you a completed and filed copy of each of the HUD Reports maintained by City
or directly from HUD that covers the time period of January 1, 1997 to December 31, 1999. We will
provide you with a summary of the reports that have not been completed or filed during this time
period.
2. We will determine the clerical accuracy of each HUD Report provided to us by recomputing the data
on the report.
3. For data entries made by City personnel on HUD 52673, HUD 52672, HUD 52663, and HUD 52683,
we will determine whether amounts presented are based on supporting documentation to be provided
by City personnel or to be received from HUD by tracing to this supporting documentation. We will
provide you with a summary of exceptions noted.
801 Nicollet Avenue, STE 1300
Minneapolis, Minnesota 55402-2529
(612) 332-4300 ° Fax (612) 376-9876
www. mcgladrey, com
Worldwide
Services
Through
RSM International
4. We will obtain a computer download from the City's general ledger of all housing assistance
payments (HAP) made by the City for the time period of January 1, 1998 through December 31,
1998. For each HAP amount, we will determine whether the payment was for a certificate, voucher,
or portable from another agency (collectively the program category) by agreeing the transaction
description in the general ledger which will include tenant information to the program category listing
of all enrolled tenants that is to be provided by the City. We will recalculate the number of unit
months billed for certificates and vouchers for the same time period. We will provide a reconciliation
of total HAP amounts extracted from the download to total HAP amounts recorded in the general
ledger for the same time period.
5. We will trace the HAP payments and unit months billed from procedure number 4 to HUD 52681
and Annual Documentation for Ongoing Administrative Fee and Hard-to-House Fee reports filed for
the fiscal year ended December 31, 1998. We will provide a summary of exceptions noted.
6. We will trace every data entry made on HUD 52595 for the fiscal year ended December 31, 1998, to
the City's general ledger. We will provide a summary of exceptions noted.
7. We will obtain the "1998 Section 8 Worksheet" (the Worksheet) from City personnel, which contains
a preliminary reconciliation of portability activity for the year ended December 31, 1998. City
personnel represent that this worksheet shows all tenants that had certificates and vouchers that were
portable from other agencies and reconciles the payments made by the City to the landlords and
receipts from the agency responsible for the tenant. The Worksheet indicates total payments made by
the City of $520,718 and receipts of $573,543, which includes earned administrative fees. The
Worksheet also shows the tenants for which portable payments have been made, but have not been
fully received at December 3 I, 1998. The Worksheet also reflects $13,307 of receipts that were not
specifically applied (unapplied cash receipts) to individual tenant balances during the City's
completion of the "1998 Section 8 Worksheet."
For the tenants identified as portable from other agencies in procedure number 4 above, we will agree
total HAP payments as recorded in the general ledger for each tenant to the Worksheet. For tenants
that are incorrectly included or excluded from the Worksheet based on information supplied by City
personnel indicating whether the tenant had a certificate or voucher directly from the City or if the
tenant was portable from another agency, we will correct the Worksheet to properly reflect portable
HAP payments made by the City. We will agree the total HAP payments on the Worksheet to the
total HAP payments as identified in procedure number 4 above.
We will provide a list of tenants that still have outstanding HAP receivable (payable) balances from
other agencies for 1998. We will update the Worksheet for cash receipts through December 31, 1999,
which we will obtain from the City.
We ask that you either confirm or amend our understanding regarding the above procedures. The
sufficiency of these procedures is solely the responsibility of the City of Columbia Heights. We make no
representation regarding the sufficiency of the procedures described above either for the purpose for
which these services have been requested or for any other purpose.
Our engagement will be conducted in accordance with standards established by the American Institute of
Certified Public Accountants, to selected records and transactions for the period referred to in the
preceding paragraph. Because these procedures do not constitute an audit made in accordance with
generally accepted auditing standards, we will not express an opinion on any of the specific elements,
accounts, or items referred to in our report or on the financial statements of the City of Columbia Heights
taken as a whole.
At the conclusion of our engagement, we will submit a report in letterform outlining the procedures
performed and our findings, observations and recommendations resulting from the procedures performed.
Our report will contain a statement that it is intended solely for the use of the City of Columbia Heights
and should not be used by those who have not agreed to the procedures and taken responsibility for the
sufficiency of the procedures for their purposes. Other parties to whom the report may be provided
should be advised that the procedures were performed only for the purposes of the specified users.
Should you desire that others be added to our report as specified users, please contact us, as it will be
necessary to obtain their agreement with respect to the sufficiency of the procedures for their purpose.
Our report will also contain a paragraph pointing out that if we had performed additional procedures or if
we had conducted an audit of the specified elements, accounts, or items of the financial statements in
accordance with generally accepted auditing standards, matters in addition to any findings, observations
and recommendations that may result from the procedures performed above might have come to our
attention and been reported to you.
During the course of our engagement, we may accumulate records containing data which should be
reflected in your books and records. You will determine that all such data, if necessary, will be so
reflected. Accordingly, you will not expect us to maintain copies of such records in our possession.
The City of Columbia Heights acknowledges that McGladrey & Pullen, LLP will use employees of RSM
McGladrey, Inc., an indirect wholly owned subsidiary of H&R Block, Inc., for certain administrative
support and professional services relating to the City of Columbia Heights. To facilitate the delivery of
these services, the City of Columbia Heights authorizes McGladrey & Pullen, LLP to allow employees of
RSM McGladrey, Inc. access to the City of Columbia Heights file, financial information and other
confidential information as determined by McGladrey & Pullen, LLP. RSM McGladrey, Inc. has agreed
to comply with Rule 301 of the AICPA Code of Professional Conduct, Confidential Client Information.
RSM McGladrey, Inc. is not a licensed certified public accounting finn and will not offer to perform
public accounting services.
The assistance to be supplied by your personnel has been discussed and coordinated with Mr. Randy
Schumacher, Community Development Assistant. The timely and accurate completion of this work is an
essential condition to the completion of our services and issuance of our report. We anticipate that we
will begin our procedures the week of July 17, 2000 with completion of testing the week of July 24,2000.
We anticipate issuing our report with any findings, observations and recommendations by August 11,
2000.
Our fees are based on 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. Based on the scope of work described above and assuming timely and accurate
completion of the work your staffwill provide, our fees will not exceed $15,000. However, this fee is
subject to adjustments based on unanticipated changes in the scope of our work. Any assistance we may
provide to you, related to correcting the HUD Reports, or determining the proper data to be included in
the HUD Reports is considered to be additional assistance, which we will charge you at regular hourly
rates of $150 for Corey Topp and $90 for staff assistance. We will not perform additional procedures
without approval from you. All other provisions of this letter will survive any fee adjustment.
In the event we are requested or authorized by the City of Columbia Heights or are required by
government regulation, subpoena, or other legal process to produce our documents or our personnel as
witnesses with respect to this engagement for the City of Columbia Heights, the City of Columbia
Heights 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.
This letter constitutes the complete and exclusive statement of agreement between McGladrey & Pullen,
LLP and the City of Columbia Heights, superseding all other communications oral or written with respect
to the terms of the engagement between the parties.
It is agreed by the City of Columbia Heights and McGladrey & Pullen, LLP or any successors in interest
that no claim arising out of services rendered pursuant to this agreement by or on behalf of the City of
Columbia Heights shall be asserted more than two years after the date of the report issued by McGladrey
& Pullen, LLP.
If this letter defines the arrangements as you understand them, please sign and date the enclosed copy and
return it to us. Thank you for this opportunity to be of assistance. We appreciate your business.
McGladrey & Pullen, LLP
behalf. af~e addressee:
,2000