ENGAGEMENT LETTER DESIGNED TO FACILITATE THE PERFORMANCE OF OUR PROFESSIONAL SERVICES�� Cherry Bekaert"
CPAs & Advisors
July 28, 2015
Brian Jay Ravins, Finance Director
City of Clearwater, Florida
100 S. Myrtle Avenue
Clearwater, Florida 33756
Mr. Ravins:
This engagement letter between City of Clearwater, Florida (hereafter referred to as the
"City ") and Cherry Bekaert LLP (the "Firm" or "Cherry Bekaert") sets forth the nature and
scope of the services we will provide, the City's required involvement and assistance in
support of our services, the related fee arrangements and other Terms and Conditions, which
are attached hereto and incorporated by reference, designed to facilitate the performance of
our professional services and to achieve the mutually agreed upon objectives of the City.
SUMMARY OF SERVICES
We will provide the following services to the City as of and for the year ended September 30,
2015:
Audit services
1. We will audit the basic financial statements of the City as of and for the year ended
September 30, 2015 including the governmental activities, the business type activities,
each major fund and the remaining fund information. We will also audit the financial
statements of each of the City's non -major govemmental, non -major enterprise, internal
service and fiduciary funds presented as supplementary information, as defined by the
Governmental Accounting Standards Board, in the accompanying combining and
individual fund financial statements as of and for the year ended September 30, 2015.
2. Accounting standards generally accepted in the United States of America provide for
certain required supplementary information ('RSI "), such as management's discussion
and analysis, to accompany the City's basic financial statements. As part of our
engagement, we will apply certain limited procedures to the City's RSI. These limited
procedures will consist principally of inquiries of management regarding the methods of
measurement and presentation, which management is responsible for affirming to us in
its representation letter.
3. Supplementary information, other than RSI, also accompanies the City's basic financial
statements. We will subject such supplementary information to the auditing procedures
applied in our audit of the basic financial statements and will provide an opinion on it in
relation to the basic financial statements.
4. Additional information, such as the introductory section and statistical section, will not be
subjected to the auditing procedures applied in our audit of the financial statements, and,
accordingly, our auditors' report will disclaim an opinion on such information.
Accounting and other services
We will provide the following additional services:
1. Complete the appropriate sections of and sign the Data Collection Form.
401 East Jackson Street, Suite 3400, Tampa, FL 33602 P 813.251.1010 1 cbh.com
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City of Clearwater, Florida
July 28, 2015
Page 2
YOUR EXPECTATIONS
As part of our planning process, we have discussed with you your expectations of Cherry
Bekaert, changes that occurred during the year, your views on risks facing you, any
relationship issues with Cherry Bekaert, and specific engagement arrangements and timing.
Our services plan, which includes our audit plan, is designed to provide a foundation for an
effective, efficient, and quality- focused approach to accomplish the engagement objectives
and meet or exceed your expectations. Our service plan will be reviewed with you periodically
and will serve as a benchmark against which you will be able to measure our performance.
Any additional services that you may request, and that we agree to provide, will be the
subject of separate written arrangements.
The City recognizes that our professional standards require that we be independent from you
in our audit of your financial statements and our accompanying report in order to ensure that
our objectivity and professional skepticism have not been compromised. As a result, we
cannot enter into a fiduciary relationship with you and you should not expect that we will act
only with due regard to your interest in the performance of this audit and you should not
impose on us special confidence that we will conduct this audit with only your interest in
mind. Because of our obligation to be independent of you, no fiduciary relationship will be
created by this engagement or audit of your financial statements.
The engagement will be led by John Gilberto, who will be responsible for assuring the overall
quality, value, and timeliness of the services provided to you.
AUDIT SERVICES
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 U.S. generally
accepted accounting principles and to report on the fairness of the additional information
referred to in the Summary of Services section when considered in relation to the basic
financial statements taken as a whole. The objective also includes reporting on:
• Intemal 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.
• Intemal 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 and Chapter
10.550, Rules of the Auditor General of the State of Florida.
The reports on internal control and compliance will each include a paragraph that states that
the purpose of the report is solely to describe (1) the scope of testing of internal control over
financial reporting and compliance and the result of that testing and not to provide an opinion
on the effectiveness of intemal control over financial reporting or on compliance, (2) the
scope of testing intemal control over compliance for major programs and major program
compliance and the result of that testing and to provide an opinion on compliance but not to
provide an opinion on the effectiveness of internal control over compliance, and (3) that the
report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering intemal control over financial reporting and compliance and with
City of Clearwater, Florida
July 28, 2015
Page 3
OMB Circular A -133 and Chapter 10.550, Rules of the Auditor General of the State of Florida,
in considering intemal control over compliance and major program compliance. The
paragraph will also state that the report is not suitable for any other purpose.
Our audit will be conducted in accordance with auditing standards generally accepted in the
United States of America; Government Auditing Standards, issued by the Comptroller
General of the United States; the provisions of OMB Circular A -133; the Single Audit Act
Amendments of 1996; and Chapter 10.550, Rules of the Auditor General of the State of
Florida, and will include tests of accounting records, a determination of major programs in
accordance with Circular A -133, Chapter 10.550, and other procedures as deemed
necessary to enable us to express such opinions and to render the required reports. If any of
our opinions resulting from the procedures described above are other than unmodified, 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 issue a report as a result of this engagement.
ACCOUNTING AND OTHER SERVICES
Data Collection Form
We will complete the appropriate sections of and sign the Data Collection Form that
summarizes our audit findings. We will provide copies of our reports to the City; 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 corrective action plan) along with the Data Collection Form to the
designated federal audit clearinghouse and, if appropriate, 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 nine months after the end of the audit period.
Management's responsibilities related to accounting and other services
For all nonattest services we perform in connection with the engagement, you are
responsible for designating a competent employee to oversee the services, make any
management decisions, perform any management functions related to the services, evaluate
the adequacy of the services, and accept overall responsibility for the results of the services.
Prior to the release of the report, Management will need to sign a representation letter
acknowledging your responsibility for the results of these services.
Use of the Internal Audit Function
As part of our engagement, we plan to use the work of the intemal audit function to provide
direct assistance. The successful use of the internal audit function was considered in
developing our fee proposal. The successful use of the internal audit function is dependent
upon our assessment of the objectivity and competence of the internal audit function and its
personnel. The successful use of the internal audit function to provide direct assistance is
dependent upon our ability to confirm that those individuals employed or contracted by you
and performing work on our behalf are allowed to follow our instructions without undue
restrictions from management. We currently plan to use the internal audit function to provide
direct assistance during our audit. We will meet early in the planning process to mutually
agree on the work that the internal audit function will perform.
If any disagreements over our procedures or the use of the internal audit function do arise
you will work with us on a best efforts basis to satisfactorily resolve any issues.
City of Clearwater, Florida
July 28, 2015
Page 4
As part of our consideration of the use of the internal audit function we will make certain
inquiries and request supporting documentation when applicable. In addition, to facilitate a
constructive and complementary relationship we will ask that those responsible for the
internal audit function timely provide us responses to questionnaires and participate in the
planning of our audit when requested.
If we are unable to successfully use the work of the internal function, whether due to lack of
objectivity, competence, application of a systematic and disciplined approach, application of a
quality control system, or undue restrictions place by management, then we will estimate the
impact on the nature, timing and extent of our planned audit procedures and will
communicate with you concerning the scope of the additional procedures and the additional
estimated fees.
MANAGEMENT'S RESPONSIBILITIES RELATED TO THE AUDIT
Management is responsible for the fair presentation of the financial statements in conformity
with GAAP, including the appropriate basis of accounting is applied by all component units, if
applicable, for making all financial records and related information available to us, for
ensuring that all material information is disclosed to us, and for identifying and ensuring that
the City complies with the laws and regulations applicable to its activities and with the
provisions of contracts and grant agreements.
Management is responsible for the preparation of the supplementary information in
conformity with GAAP. Management agrees to include our report on the supplementary
information in any document that contains and indicates that we have reported on the
supplementary information. Management also agrees to include the audited financial
statements with any presentation of the supplementary information that includes our report
thereon or make the audited financial statements readily available to users of the
supplementary information no later than the date the supplementary information is issued
with our report thereon.
Management is also responsible for adjusting the financial statements to correct material
misstatements, informing us of events that occurred subsequent to the balance sheet date
until the date of the auditors' report that might affect the financial statements or related
disclosures and informing us of any discovery of facts related to items that existed at the
financial statement date that might affect the financial statements or related disclosures.
Management is responsible for informing us of its views regarding the risk of fraud at the City.
Management must inform us of their knowledge of any allegations of fraud or suspected fraud
affecting the City received in communications from employees, former employees, regulators,
or others. Additionally, Management must inform us about all known or suspected fraud
affecting the City 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.
Management is responsible for the design and implementation of programs and controls over
financial reporting and to prevent and detect fraud. Appropriate supervisory review
procedures are necessary to provide reasonable assurance that adopted policies and
prescribed procedures are adhered to and to identify errors and fraud or illegal acts. As a part
of our audit, we will consider the City's internal control structure, as required by GAAS,
sufficient to plan the audit and to determine the nature, timing, and extent of auditing
procedures necessary for expressing our opinion concerning the financial statements. An
audit is not designed to provide any assurance on internal controls. As part of our
City of Clearwater, Florida
July 28, 2015
Page 5
consideration of the City's internal control structure, we will inform you of matters that come
to our attention that represent significant deficiencies or material weaknesses in the design or
operation of the internal control structure.
Management is responsible for establishment and maintenance of a process for tracking the
status of audit findings and recommendations. Management is also responsible for identifying
to us previous audits or other engagements or studies related to the objectives discussed in
the Audit Objectives section of this letter. This responsibility includes relaying to us corrective
actions taken to address significant findings and recommendations resulting from those
audits or other engagements or studies. You are also responsible for providing
management's views on our current findings, conclusions and recommendations, as well as
your planned corrective actions, and the timing and format related thereto.
At the conclusion of the engagement, Management will provide to us a representation letter
that, among other things, addresses (1) Management's responsibilities related to the audit
and confirms certain representations made to us during the audit, including, Management's
acknowledgement of its responsibility for the design and implementation of programs and
controls to prevent and detect fraud; (2) Management's responsibilities related to the
monitoring of internal control over financial reporting; and (3) Management's knowledge,
directly or from allegations by others, of fraud or suspected fraud affecting the City. The
representation letter will also affirm to us that Management believes that the effects of any
uncorrected misstatements, if any, pertaining to the financial statements are immaterial, both
individually and in the aggregate, to the financial statements taken as a whole. The Firm will
rely on Management providing these representations to us, both in the planning and
performance of the audit, and in considering the fees that we will charge to perform the audit.
Because we will be relying on Management's representations, you agree to indemnify the
Firm, and its partners and employees, and hold them harmless from all claims, liabilities,
losses, and costs arising in circumstances where there has been a known misrepresentation
by an officer or employee of the City regardless of whether such officer or employee was
acting in the City's interest, and even if the Firm acted negligently or wrongfully in failing to
uncover or detect such misrepresentation. This indemnification will survive termination of this
letter.
FEES
The estimated fee contemplates only the services described in the Summary of Services
section of this letter. If Management requests additional services not listed above, we will
provide an estimate of those fees prior to commencing additional work.
The following summarizes the [estimated range of] fees for the services described above:
Description of Services
Audit services
Audit of the financial statements as described listed in the
Summary of services above for the year ended September
30, 2015.
Estimated Fee
$117,500
The fees will be billed periodically as the work progresses. Invoices are due on presentation.
A service charge will be added to past due accounts equal to 1 -1/2% per month (18%
annually) on the previous month's balance less payments received during the month, with a
minimum charge of $2.00 per month.
City of Clearwater, Florida
July 28, 2015
Page 6
If the foregoing is in accordance with your understanding, please sign a copy of this letter in
the space provided and retum it to us. If you have any questions, please call John Gilberto at
813- 251 -1010.
Sincerely,
CHERRY BEKAERT LLP
ATTACHMENT — Engagement Letter Terms and Conditions
City of Clearwater, Florida
ACCEPTED BY: 60,c_12024.-, 1"4--Lt JL.1
William B. Horne, II
TITLE: City Manager
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DATE:
Attachment - Page 1
Cherry Bekaert LLP
Engagement Letter Terms and Conditions
The following terms and conditions are an integral part of the attached engagement letter and
should be read in their entirety in conjunction with your review of the letter.
LIMITATIONS OF THE AUDIT REPORT
Any additional services that you may request, and that we agree to provide, will be the
subject of separate written arrangements.
Should the City wish to include, publish or otherwise reproduce the financial statements and
our report thereon at a date subsequent to their original issuance, such as for inclusion in a
bond offering, prospectus or similar document, our firm is presumed not to be associated with
such document and we have no obligation to perform any procedures with respect to such
document. In addition, you agree to include in the offering statement the following language:
"Cherry Bekaert LLP, our independent auditor, has not been engaged to perform and has not
performed, since the date of its report included herein, any procedures on the financial
statements addressed in that report. Cherry Bekaert also has not performed any procedures
relating to this official statement.
If, however, management takes certain actions, such as requesting a written consent from us
prior to including our audit report in such an offering statement, our firm then becomes
associated with the offering and in accordance with professional standards, we will be
required to perform certain limited procedures with respect to unaudited information
contained in the document. These procedures will be subject to separate written
arrangements and fees.
LIMITATIONS OF THE AUDIT PROCESS
In conducting the audit, we will perform tests of the accounting records and such other
procedures as we consider necessary in the circumstances to provide a reasonable basis for
our opinion on the financial statements. We also will assess the accounting principles used
and significant estimates made by Management, as well as evaluate the overall financial
statement presentation.
Our audit will include procedures designed to obtain reasonable assurance of detecting
misstatements due to errors or fraud that are material to the financial statements. Absolute
assurance is not attainable because of the nature of audit evidence and the characteristics of
fraud. For example, audits performed in accordance with GAAS are based on the concept of
selective testing of the data being examined and are, therefore, subject to the limitation that
material misstatements due to errors or fraud, if they exist, may not be detected. Also, an
audit is not designed to detect matters that are immaterial to the financial statements. In
addition, an audit conducted in accordance with GAAS does not include procedures
specifically designed to detect illegal acts having an indirect effect (e.g., violations of fraud
and abuse statutes that result in fines or penalties being imposed on the City) on the financial
statements.
Similarly, in performing our audit we will be aware of the possibility that illegal acts may have
occurred. However, it should be recognized that our audit provides no assurance that illegal
acts generally will be detected, and only reasonable assurance that illegal acts having a
direct and material effect on the determination of financial statement amounts will be
detected. We will inform you with respect to errors and fraud, or illegal acts that come to our
attention during the course of our audit unless clearly inconsequential. In the event that we
have to consult with the City's counsel or counsel of our choosing regarding any illegal acts
Attachment - Page 2
we identify, additional fees incurred may be billed to the City. You agree to cooperate fully
with any procedures we deem necessary to perform with respect to these matters.
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 professional 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) misappropriation of assets, or (4) violations of laws or governmental
regulations that are attributable to the City or to acts by management or employees acting on
behalf of the City. Because the determination of abuse is subjective, Government Auditing
Standards do not expect auditors to provide reasonable assurance of detecting abuse.
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 fraud,
or illegal acts that come to our attention during the course of our audit. We will also inform
you of any violations of laws or governmental regulations 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 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.
AUDIT PROCEDURES — INTERNAL CONTROLS
Our audit will include obtaining an understanding of the City and its environment, including
internal controls, sufficient to assess the risks of material misstatement of the financial
statements and to design the nature, timing and extent of further audit procedures. 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 detecting misstatements resulting from illegal acts and
other noncompliance matters that have a direct and material effect on the financial
statements. 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.
An audit is not designed to provide assurance on internal control or to identify significant
deficiencies. However, during the audit, we will communicate to management and those
charged with governance internal control related matters that are required to be
communicated under professional standards, and Government Auditing Standards.
Attachment - Page 3
AUDIT PROCEDURES — COMPLIANCE
As part of obtaining reasonable assurance about whether the basic financial statements are
free of material misstatement, we will perform tests of the City'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.
NON - ATTEST SERVICES (IF APPLICABLE)
All non - attest services to be provided in the attached engagement letter (if applicable) shall
be provided pursuant to the AICPA Code of Professional Conduct. The AICPA Code of
Professional Conduct requires that we establish objectives of the engagement and the
services to be performed, which are described under non -attest services in the attached
letter.
You agree to assume all management responsibilities for the nonattest services we provide;
oversee the services by designating an individual, with suitable skill, knowledge, or
experience; evaluate the adequacy and results of the services; and accept responsibility for
them. In order to ensure we provide such services in compliance with all professional
standards, you are responsible for-
• Making all financial records and related information available to us.
• Ensuring that all material information is disclosed to us.
• Granting unrestricted access to persons within the entity from whom we determine it
necessary to obtain audit evidence.
• Identifying and ensuring that such non - attest complies with the laws and regulations.
The accuracy and appropriateness of such non - attest services shall be limited by the
accuracy and sufficiency of the information provided by you. In the course of providing such
non -attest services, we may provide professional advice and guidance based on knowledge
accounting, tax and other compliance, and of the facts and circumstances as provided by
you. Such advice and guidance shall limited as permitted under the Code of Professional
Conduct.
COMMUNICATIONS
At the conclusion of the audit engagement, we may provide Management and those charged
with governance a letter stating any significant deficiencies or material weaknesses which
may have been identified by us during the audit and our recommendations designed to help
the City make improvements in its intemal control structure and operations related to the
identified matters discovered in the financial statement audit. As part of this engagement we
will ensure that certain additional matters are communicated to the appropriate members of
the City. Such matters include (1) our responsibility under GAAS; (2) the initial selection of
and changes in significant accounting policies and their application; (3) our independence
with respect to the City; (4) the process used by Management in formulating particularly
sensitive accounting estimates and the basis for our conclusion regarding the
reasonableness of those estimates; (5) audit adjustments, if any, that could, in our judgment,
either individually or in the aggregate be significant to the financial statements or our report;
(6) any disagreements with Management concerning a financial accounting, reporting or
auditing matter that could be significant to the financial statements; (7) our views about
matters that were the subject of Management's consultation with other accountants about
auditing and accounting matters; (8) major issues that were discussed with Management in
Attachment - Page 4
connection with the retention of our services, including, among other matters, any
discussions regarding the application of accounting principles and auditing standards; and (9)
serious difficulties that we encountered in dealing with Management related to the
performance of the audit.
We have attached, at your request, a copy of the report on our most recent peer review.
OTHER MATTERS
Access to working papers
The working papers and related documentation for the engagement are the property of the
Firm and constitute confidential information. We have a responsibility to retain the
documentation for a period of time to satisfy legal or regulatory requirements for records
retention. It is our policy to retain all workpapers and client information for seven years from
the date of issuance of the report. It is our policy to retain emails and attachments to emails
for a period of 15 months, except as required by any governmental regulation. Except as
discussed below, any requests for access to our working papers will be discussed with you
prior to making them available to requesting parties. Any parties seeking access to our
working papers must agree to sign our standard access letter.
We may be requested to make certain documentation available to regulators, governmental
agencies (e.g., SEC, PCAOB, HUD, DOL, etc.) or their representatives ( "Regulators ")
pursuant to law or regulations. If requested, access to the documentation will be provided to
the Regulators. The Regulators may intend to distribute to others, including other
govemmental agencies, our working papers and related documentation without our
knowledge or express permission. You hereby acknowledge and authorize us to allow
Regulators access to and copies of documentation as requested. In addition, our Firm, as
well as all other major accounting firms, participates in a "peer review" program covering our
audit and accounting practices as required by the American Institute of Certified Public
Accountants. This program requires that once every three years we subject our quality
assurance practices to an examination by another accounting firm. As part of the process, the
other firm will review a sample of our work. It is possible that the work we perform for you
may be selected by the other firm for their review. If it is, they are bound by professional
standards to keep all information confidential. If you object to having the work we do for you
reviewed by our peer reviewer, please notify us in writing.
Electronic transmittals
During the course of our engagement, we may need to electronically transmit confidential
information to each other, within the Firm, and to other entities engaged by either party.
Although email is an efficient way to communicate, it is not always a secure means of
communication and thus, confidentiality may be compromised. As an alternative, we
recommend using our Client Portal ( "Portal ") to transmit documents. Portal allows you, us,
and other involved entities to upload and download documents in a secure location. You
agree to the use of email, Portal, and other electronic methods to transmit and receive
information, including confidential information between the Firm, the City, and other third
party providers utilized by either party in connection with the engagement.
Attachment - Page 5
Subpoenas
In the event we are requested or authorized by you or required by govemment regulation,
subpoena, or other legal process to produce our working papers or our personnel as
witnesses with respect to our engagement for you, you 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
expense, as well as the fees and expenses of our counsel, incurred in responding to such a
request at standard billing rates.
Dispute resolution procedures
If any dispute, controversy or claim arises in connection with the performance or breach of
this agreement, either party may, on written notice to the other party, request that the matter
be mediated. Such mediation would be conducted by a mediator appointed by and pursuant
to the rules of the American Arbitration Association (AAA) or such other neutral facilitator
acceptable to both parties. Both parties would exert their best efforts to discuss with each
other in good faith their respective positions in an attempt to finally resolve such dispute,
controversy, or claim.
TERMS AND CONDITIONS SUPPORTING FEE
The estimated fees set forth in the attached engagement letter are based on anticipated full
cooperation from your personnel, timely delivery of requested audit schedules and supporting
information, timely communication of all significant accounting and financial reporting matters,
the assumption that unexpected circumstances will not be encountered during the audit, as
well as working space and clerical assistance as mutually agreed upon and as is normal and
reasonable in the circumstances. We strive to ensure that we have the right professionals
scheduled on each engagement. As a result, sudden City requested scheduling changes or
scheduling changes necessitated by the agreed information not being ready on the agreed
upon dates can result in expensive downtime for our professionals. Any last minute schedule
changes that result in downtime for our professionals could result in additional fees. Our
estimated fee does not include assistance in bookkeeping or other accounting services not
previously described. If for any reason the City is unable to provide such schedules,
information and assistance, the Firm and the City will mutually revise the fee to reflect
additional services, if any, required of us to achieve these objectives.
The estimated fees contemplate that the City will provide adequate documentation of its
systems and controls related to significant transaction cycles and audit areas.
In providing our services, we will consult with the City with respect to matters of accounting,
financial reporting or other significant business issues as permitted by professional
standards. Accordingly, time necessary to effect a reasonable amount of such consultation is
reflected in our fee. However, should a matter require research, consultation or audit work
beyond that amount, the Firm and the City will agree to an appropriate revision in our fee.
The estimated fees are based on auditing and accounting standards effective as of the date
of this engagement letter and known to apply to the City at this time, but do not include any
time related to the application of new auditing or accounting standards that impact the City for
the first time. If new auditing or accounting standards are issued subsequent to the date of
this letter and are effective for the period under audit, we will estimate the impact of any such
standard on the nature, timing and extent of our planned audit procedures and will
communicate with you concerning the scope of the additional procedures and the estimated
fees.
Attachment - Page 6
The City agrees to pay all costs of collection (including reasonable attorneys' fees) that the
Firm may incur in connection with the collection of unpaid invoices. In the event of
nonpayment of any invoice rendered by us, we retain the right to (a) suspend the
performance of our services, (b) change the payment conditions under this engagement
letter, or (c) terminate our services. If we elect to suspend our services, such services will not
be resumed until your account is paid. If we elect to terminate our services for nonpayment,
the City will be obligated to compensate us for all time expended and reimburse us for all
expenses through the date of termination.
This engagement letter sets forth the entire understanding between the City and the Firm
regarding the services described herein and supersedes any previous proposals,
correspondence, and understandings whether written or oral. Any subsequent changes to the
terms of this letter, other than additional billings, will be rendered in writing and shall be
executed by both parties. Should any portion of this engagement letter be ruled invalid, it is
agreed that such invalidity will not affect any of the remaining portions.
EISNERAMPER
ACCOUNTANTS, ADVISORS
System Review Report
August 30, 2013
To the Partners of Cherry Bekaert LLP
And the National Peer Review Committee
EisnerAmper LLP
2015 Lincoln Highway
P.O. Box 988
Edison, NJ 08818
r 732.287.1000
F 732.287.3200
www.ClSllt2fdl1 per.Cclil
We have reviewed the system of quality control for the accounting and auditing practice of Cherry
Bekaert LLP (the firm), applicable to non -SEC issuers in effect for the year ended April 30, 2013.
Our peer review was conducted in accordance with the Standards for Performing and Reporting on
Peer Reviews established by the Peer Review Board of the American Institute of Certified Public
Accountants. As a part of our peer review, we considered reviews by regulatory entities, if
applicable, in determining the nature and extent of our procedures. The firm is responsible for
designing a system of quality control and complying with it to provide the firm with reasonable
assurance of performing and reporting in conformity with applicable professional standards in all
material respects. Our responsibility is to express an opinion on the design of the system of
quality control and the firm's compliance therewith based on our review. The nature, objectives,
scope, limitations of, and the procedures performed in a System Review are described in the
standards at www.aicpa.org/prsumman/.
As required by the standards, engagements selected for review included engagements performed
under Government Auditing Standards; audits of employee benefit plans, and examinations of
service organizations [Service Organizations Control (SOC) 1 engagements].
In our opinion, the system of quality control for the accounting and auditing practice of Cherry
Bekaert LLP, applicable to non -SEC issuers in effect for the year ended April 30, 2013, has been
suitably designed and complied with to provide the firm with reasonable assurance of performing
and reporting in conformity with applicable professional standards in all material respects. Firms
can receive a rating of pass, pass with deficiency(ies) or fail. Cherry Bekaert LLP has received a peer
review rating of pass.
EisnerAmper LLP
Iselin, Ni
New York New Jersey Pennsylvania Cayman Islands
EisnerAmper is an independent member of PKF International Limited
Peer Review Program
Administered by the National Peer Review Committee
November 14, 2013
Howard Joseph Kies, CPA
Cherry Bekaert LLP
200 S 10th St
Ste 900
Richmond, VA 23219
Dear Mr. Kies:
American Institute of CPAs
220 Leigh Farm Road
Durham, NC 27707 -8110
It is my pleasure to notify you that on November 13, 2013 the National Peer Review Committee accepted
the report on the most recent system peer review of your firm. The due date for your next review is
October 31, 2016. This is the date by which all review documents should be completed and submitted to
the administering entity.
As you know, the report had a peer review rating of pass. The Committee asked me to convey its
congratulations to the firm.
Sincerely,
Betty Jo Charles
Chair, National Peer Review Committee
nprc @aicpa.org 919 402 -4502
cc: Lewis Eddie Dutton;Lawrence S Gray
Firm Number: 10011816 Review Number 347649
Letter ID: 840713
T: 1.919.402.4502 1 F: 1.919.402 4876 1 nprc @aicpa.org