HomeMy WebLinkAboutContract 1839
Tautges Redpath, Ltd.
Certified Public Accountants and Consultants
March 24, 2005
-f COpy
Mr. Bill Elrite, Finance Director
City of Columbia Heights
590 40th A venue NE
Columbia Heights, MN 55421
ADDENDUM #3 TO ENGAGEMENT LETTER DATED AUGUST 21, 2001
This addendum is the result of changes in Government Auditing Standards. For the 2004
audit, the engagement letter is amended to include the following additional items:
Audit Obiectives - Internal Control Report
Paragraph 4.07 of Government Auditing Standards require an auditor to communicate
with the auditee any potential restrictions of the auditors reports. Restriction on the use
of the internal control report is required by SAS Nos. 60 and 87. Though restricted in
use, reports issued in connection with an audit of a local government may be a matter of
public record. To comply with the above standards, the "Audit Objectives" section of the
engagement letter is amended to include the following:
This report will include a statement that the report is intended solely for the
infonnation and use of the City Council and management and is not intended
to be and should not be used by anyone other than these specified parties.
Management Responsibilities
Paragraph 3.14 of Government Auditing Standards restricts auditors from performing
management functions or making management decisions. The following addendum is
added to the "Management Responsibilities" section of the engagement letter to
emphasize the auditor is to maintain throughout the audit that (a) the resulting audited
financial statements are the responsibility of the management of the governmental unit
and (b) the auditor is in no way acting in the role of management:
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.
4810 White Bear Parkway White Bear Lake, Minnesota 55110
1303 South Frontage Road Suite 13 Hastings, Minnesota 55033
651 4267000 651 426 5004 Fax
651 480 4990 651 426 5004 Fax
www.hlbtr.com
HLB Tautges Redpath, Ltd. is a member of n International. a world-wide organization of accounting firms and business advisors.
522320.1
" .~'
City of Columbia Heights
Addendum #3 to Engagement Letter Dated August 21,2001
March 24, 2005
Page 2
The following addendum emphasizes management responsibility for the design of
programs to prevent and detect fraud and for communicating to us known or suspected
fraud:
You are responsible for the design and implementation of programs and
controls to prevent and detect fraud, and for infonning us about all known or
suspectedfraud affecting the govemment involving (a) management, (b)
employees who have significant roles in intemal control, and (c) others where
the fraud could have a material effect on the financial statements. You are
also responsible for infonning us of your knowledge of any allegations of
fraud or suspectedfraud affecting the govemment received in
communications from employees, former employees, grantors, regulators, or
others. /n addition, you are responsible for identifying and ensuring that the
entity complies with applicable laws and regulations.
Audit Procedures - Internal Control
Paragraph 5.12 of Govemment Auditing Standards require an auditor to report
deficiencies in internal control (less than reportable condition, but more than clearly
inconsequential) in a management letter. The "Audit Procedures - Internal Control"
section of the engagement letter is amended to include the following:
... no opinion will be expressed in our report on intemal control issued
pursuant to Govemment Auditing Standards.
We will also info1711 you of any nonreportable conditions or other matters
involving intemal control, if any, as required by Govemment Auditing
Standards.
Audit Administration, Fees and Other
Paragraph 3.55 of the Yellow Book requires audit organizations to provide their 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, to the
party contracting for the audit. The "Audit Administration, Fees and Other" section of
the engagement letter is amended to include the following:
Government Auditing Standards requires that we provide you with a copy of
our most recent extenwl peer review report and any letter of comment, and
any subsequent peer review reports or letters of comment received during the
period of contract. Our 2001 peer review report and letter of comment
accompanies this letter as Appendix A.
522320.1
City of Columbia Heights
Addendum #3 to Engagement Letter Dated August 21,2001
March 24, 2005
Page 3
Agreed-Upon-Procedures - REAC
We will apply the agreed-upon procedure which the u.s. Department of Housing and
Urban Development, Real Estate Assessment Center (REAC), has specified, related to
the electronic submission and related hard copy documents of St. Cloud HRA as of and
for the year ended June 30, 2004. The procedures consist of verifying that certain
electronically submitted data agree with the related hard-copy documents. This
engagement is solely to assist St. Cloud HRA and REAC in determining whether
electronic submission of certain information agrees with the related hard copy documents
included within the OMB Circular A-B3 reporting package. Our engagement to apply
the agreed-upon procedure will be conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. The sufficiency of
the procedure is solely the responsibility of those parties specified in the report.
Consequently, we make no representation regarding the sufficiency of the procedures
specified by REAC either for the purpose for which this report has been requested or for
any other purpose. If, for any reason, we are unable to complete the procedure, we will
describe any restrictions on the performance of the procedure in a report to the St. Cloud
HRA or we will not issue a report as a result of this engagement.
Our procedures and findings will be documented in an electronic report on the REAC
website. This report is intended solely for the use of St. Cloud HRA and REAC and
should not be used by those who did not agree to the procedure and take responsibility for
the sufficiency of the procedure for their purposes.
Our report will include a statement that we have not performed any additional auditing
procedures after the date of our reports on the audited financial statements and
supplemental information. Fm1her, we take no responsibility for the security of the
information transmitted electronically to REAC.
You agree to retain a copy of the OMB Circular A-B3 reporting package in its entirety.
Nonaudit Services
If you request nonaudit services at anytime during the engagement, the following
provisions would apply:
· Management is responsible for the substantive outcomes of the work and, therefore,
has a responsibility to be in a position in fact and appearance to make an informed
judgment on the results of the nonaudit service.
el Management is responsible for establishing and monitoring the pelformance of the
nonaudit service to ensure that it meets managements' objectives.
. Management is responsible for making any decisions that involve management
functions related to the nonaudit service and accepts full responsibility for such
decisions.
522320. I
City of Columbia Heights
Addendum #3 to Engagement Letter Dated August 21,2001
March 24, 2005
Page 4
e Management is responsible for evaluating the adequacy of the services performed and
any findings that result.
We appreciate the opportunity to be of service to the City of Columbia Heights, Minnesota
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 the enclosed copy and return it to us.
Very truly yours,
HLB TAUTGES REDPATH, LTD.
David J. Mol, CPA
DJM/clg
Response
This letter correctly sets for the understanding of the City of Columbia Heights, Minnesota
By:
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Nonaudit Services:
Title:
Date:
The individual(s) assigned to oversee nonaudit services is as follows (check):
''ft Finance Director
o Other Individual(s) (Name and Title)
522320.]
Appendix A
Member:
Arizona SocIety of Certlfled
Public Accountants
Henry A. Liem
P.c.
Member:
Private COmpanles Practice
Section. Division of FInns.
American Instltute of
Certlned publiC Accountants
To the Shareholders
HLB Tautges, Redpath, Ltd.
We have reviewed the system of quality control for the accounting and auditing practice ofHLB Tautges,
Redpath, Ltd. in effect for the year ended September 30, 2001. A system of quality control encompasses
the firm's organizational structure and the policies adopted and procedures established to provide it with
reasonable assurance of complying with professional standards. The elements of quality control are
descnbed in the Statements of Quality Control Standards issued by the American Institute of Certified
Public Accountants (AlCP A). The design of the system and compliance with it are the responsibilities of
the firm. Our responsibility is to express an opinion on the design or the system, and the firm's
compliance with that system based on our review.
Our review was conducted in accordance with standards established by the Peer Review Board of the
AlCP A. In perfonning our review, we obtained an understanding of the system of quality control for the
firm's accounting and auditing practice. In addition, we tested compliance with the firm's quality control
policies and procedures to the e1\.'tent we considered appropriate. These tests covered the application of
the firm's policies and procedure on selected engagements. Because our review was based on selective
tests, it would not necessarily disclose all weaknesses in 1:..1.e system of quality control or all instances of
lack of compliance with it.
Because there are inherent limitations in the effectiveness of any system of quality control, departures
from the system may occur and not be detected. Also, projection of any evaluation of a system of quality
control to future periods is subject to the risk that the system of quality control may become inadequate
because of changes in conditions, or because the degree of compliance with the policies or procedures
may deteriorate.
In our opinion, the system of quaiity control ror the accounting and auditing practice of fiLB Tautges,
Redpath, Ltd. in effect for the year ended September 30, 2001, has been designed to meet the
requirements of the quality control standards for an accOlmting and auditing practice established by the
AlCP A and was complied with during the year then ended to provide the firm with reasonable assurance
of confonning with professional standards.
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Phoenix, Arizona
March 29, 2002
Certified Public Accountant
2777 East Camelback Road
Suite 325
Phoenix, Arizona 85016-4302
Telephone (602) 760-2920
Fax (602) 760-2917
Member
ArIzona Society of Certified
Public Accountants
Appendix A
Henry A. Liem
p.e.
Member
Private companies Practice
Section Division of FIrms
American Insmute of
Certlfled pUblic Accountants
To the Shareholders
HLB Tautges, Redpath, Ltd
We have reVIewed the system of quality control for the accountIng and audItIng practIce of HLB
Tautges, Redpath, Ltd (the firm) m effect for the year ended September 30, 2001, and have Issued our
report thereon dated March 29, 2002 That report should be read m conjUnctIOn with the comments m
thiS letter, willch were conSIdered m determmmg our opInion
Independence, mtegnty and objectiVIty
Fmdmg-The firm's pohcIes and procedures for mdependence, mtegnty and ObjectIvIty have been
appropnately commulllcated to the firm's profeSSIonal personnel through ItS quahty control document
and through trammg programs The firm's polICIes and procedures reqUire that profeSSIOnal personnel
be mformed of all new accountmg and audltmg chents at staff meetmgs of the departments that are
lllvolved In finanCial statement engagements All employees of the firm do not necessanly attend these
meetmgs StIll, the firm has mformed us that ItS mdependence has not been ImpaIred on any
accountmg and audItmg engagements
RecommendatIOn-The firm should penodIcally commumcate m wntmg or bye-maIl to all personnel
new accountmg an.d audltmg chents or engagements accepted by the firm Tills commumcatlOn should
also request that any persormel With a pOSSIble Independence problem WIth respect to the new
engagement or clIents contact the admInIstratIve partner Immediately
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Phoemx, Anzona
March 29,2002
Certified PublIc Accountant
2777 East Camelback Road
SUite 325
Phoemx, Anzona 850164302
Telephone (602) 7602920
Fax (602) 7602917