HomeMy WebLinkAboutR2010-079 2010-06-14RESOLUTION NO. R2010-79
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO
ENTER INTO A CONTRACT FOR AUDIT SERVICES.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That engagement letter for audit services, a copy of which is attached
hereto as Exhibit "A" and made a part hereof for all purposes, is hereby authorized and
approved.
Section 2. That the City Manager or his designee is hereby authorized to execute
and the City Secretary to attest an engagement letter for audit services.
PASSED, APPROVED and ADOPTED this the 14th day of August, A.D., 2010.
TOM REID
MAYOR
ATTEST:
NG
Y S RETARY
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
Exhibit "A"
Resolution No. R2Q10-79
�'���.1��-�airS�l1 P.C�
� ; � �i��i�D �11�L1C ACCC1l���A���S
dv�ay 27, 2014
To the Honorable Mayor and
Members of City Couneil
Pearland, Texas
We are pleased �o confrm our understandin� of the services we are to provide City of P�arland,
Texas for the year ending Septeinber 30, 201 a. We will audit the financial stakements of the
governmental activities, the business-Eype activities, the aggregate discre4ely presented coinponent
units, each major fu�d, and the aggregate remaining fund informatian, which colleckiveby comprise
the basic financial stateenents, o#'the City as of and for the year ending Septe�nber 30, 2410 that will
be included in the City's Comprehensive Annual Financiai Report (CAFR}. Accounting standards
generally accepted in th� United States provide for c�rtain required supple�nen�ary informatian
{RSI) to accompany the City's basic �inancial statements. As part of our engagement, we will apply
certain limited procedures to tl�e City's RSI. These limitec6 procedures will consist principally of
i�tquiries of rnanagetnent regaeding the rnethods of tneasurerr�ent and presentakioa, which
management is res�onsible for affirrning to us in its representatian letter. Unless we encounter
problems with the presentation af the RSI or ��it� proGedures relaking to it, ti�e will disclaiia� an
opinion on it. The following R5I is required by generally aceepted accountin� principles and will be
subjected to certain limited procedures, but cvill not be audited;
• Managemer�t's diseussion and arralysis.
• Budge�ary schedules
• Required sup�lementary pension inforinati�n
Supplementary inforination other than RSI also acco�npanies the City's basic financial statements.
We will subjeck the follo��ing supplementary irtformation to the auditing prt�cedures applied in our
audit of the basic financial stateinents an�i will provide an opinion on it in relation to the basic
financia� statements:
• Individual and cornbir�ing fund statements and schedules
• Sehe�ule af expenditures of federa! awards {issued separakely ira the City's Federal Single Audit
Report dacument)
The folfotving additiona] info� aceo�npanying the basic financial statements wvil� not be
subjected to the auditing pracedures applied in our audit of the `nancial statemends, and for �vhich
our auditor's r�port will disclair� an opinion.
• In�roductory seetior�
• Stat[siical section
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�I�c� thz Hv��arable Nlavc�r and
Iviemb�rs of C'itv C'�€inci]
Pz�rla�id, Te�as
[v]ay�7,2fl]0
Page ? of 7
���c�ik Ok�jecti��es
Ttt� objectit�e e�t ��ur audi� is t�rz �.��r�s�QO�i �f' opinir�n, a, tu wlletlt�r y�u�� t�a,ie tAaY���tcial
statz�nents are fairl�- preserit�d, in �ll �nateri�l respects, in cociforn�it_y ��itki U.S. ��ec�erall3� acc�pt�d
accounting �rincigles �lnd to � on the fai� of the additional infori��ation refcrred to in the
tic�st para¢ra�l1 ed�hen considered in re9ation to the basic tinancial statemznts taken as a�vhole. T'he
objectit�e also ineludes re�oetino can
• Internal c�ntrol s�elated to the financial state�nents ane� �c��7i�lian�e �vit�Y la�,��•s, regulataons,
and tli� ,�rQVision5 of corltracts or trat�t agrecineEits, noncomp�iabu� �� ith «�17i4h cauld ]lave
��riat�rial et��c:t on th� tsnanci�l stat��n��Xs in accordance �vitlti Gor•er�rl�r���r .�lirrlitirig
�t�tattTcn�rl:e.
• 4ntei•nal eontr�l rel�Et�d ta n7ajor �raY=ra�ns and an Q�71I710t1 (rar disclai��a�r� of o�init�n} an
coailpiiance wi�th la�vs, regulation�, and the pro��isioiis ofcontracts or �rant aQreemei7[s that
eauld ha��e a dire�t �:nd anaterial effect on �ach majc�r pro�ram in accardanee n°itl� the Siii�le
Audit Act Atn�ndoYl�nts o�f 1996 and iDivlB Circular A-133, ,4rutits of�Strrtc�s, Locrrl G�rc>>�»rrrc>�xts,
attd :�`c�it-ProJ"rt Orgcrni=catiaars.
The reports on internal control and co»iplianc� ��rill each include a statei��ent that the eepoet is
intended solely for dhe �nforinatiQ�i and us� af marlaoen�ent, tli� body or ��idi��idua�s char�ed ��iCh
�QVeF•nance, others n�Ettiin the esi�itv specifc le�islakiv� ar regulatory badies, fedzeal a�vardErrg
a�encies, ant[ if applic�ble, p�ss-tl3rou�h entities and is not int�nded tc� be an� shauld not be u5ed
Uy anyoaa� otlaer thaci these s�ecityed parties:
Qur audit n��ll b� conducted i�� �acc�rclatice �vitti auditin� standards �ei�erally accepted in tlze Unit�d
Sta�es of ��z�a the sta��dards for tinancia] audits contain�d in GorEl�itraz��rt :�iadi7ir�g 5�trrnrlci�•cls,
issu�c3 b�� thz C'c�mptrnller Ger�eral of the Uriitec� States; the Sin�le Audit Act r�.mendinents of i 996;
and thz prot isions of Q�IB f'ircular .�-1 �3, and ��;�il] includ� tests of accountiu� records, a
determinaEia�i Of fnajc�r p�•o�ram(,) in aeeordance �i�it13 QA�fB Cieeular t1-L33, aitd other pro�edures
«, e�onsider neces�ar5 to �nable us t� e:�press suc�1 opinia�ls artd to render the required reports. If
our opinians an the ��nancial ;tatement, or th�. Sin�le Audit ecrntpliance o�in€ons ar� r�tlter khan
unqualiii�c3, «e �t�ill Fullw� diticu,s tlle rea�ozis «�itti yoti in ad� a�lce. If, fc�r a�iy reason, «•e a��e u�iab6e
�U con3��lete the audit or are unable to for or }�a��e not faa c��iT�ions, ne ia�ay declirie t� ex�ress
apinious or to i5sue a c•eport as a result of this znga�en�ent.
�I��nagc nient �esponsibilities
fVlan�r�em�;�7t is res}�onsible for the basic tirYancial stateu�e»ts and al9 �c�ortipanyin,� info� �s
�� ell as a!1 re�res�ntatac�ils coeikained ther�in. hlana�ement is also i•�sponsible tor �i•e�aratioci a#�khe
,c�ecl��ile c�fexp�enditure, of feder•al a���ai•ds in acc�r�ianc� ��•ith llie rec�uir�u�ent:s ofOtN1B Cir�ular,'�-
13�. �� part of` th� �ud�t, ���e n°ill a,s�;t ���itki pr�para�ti��i �f y��ir t1na��cial st��r�:ment�s, sch�dul�. ot
�spci�diture; of fzde�a�al a��°ards. and related not�es. Y'�u are res�roonsible for m�kin,� �all mana�e���enk
d�ci,ioe�� and �erfcs��min�� all man��em�nt function; relatin�� to the Einaneial �t�tements, �ch�dule of
ezpenditures c�f €ede� a����rds, and re'�ated i�ote•. asld t�r a��:eptin� ��11 respo�isi�alitv for such
decisioAts. `t`ou ls�ill be ���quire�l to a��:no�r�lzr��e in t1�e �ti,zn�a�����neelt �•epres��itatioQi l�tt�1• uur
as;:ist��7�:e ���ith �r�par�tic��i of t4ti� �lna���� ial stat�n�ent: and thz �clyzdule of e�p�nditurc. of f�d�.ral
�i�� �rds aatd that wou �iat i� and a��r�a��ed the tinancial statei��e»ts. �chedule of
e���c�ditur�; ot f4dcrz�l a«�arcf�. a�tii related noteti ��riom� co tlieir issuane� ai�d 17a��e accept�d
responsibiliky fo� the�a�. F�irtl�er, ��o�u ar� rec�uirec� t�r desi�rn��te an indi��idual ����at�i suitable skill,
I`o the Hc�nor�blL Mat`or �nd
�viembers of Citv Ca��ncil
Pearland, Tzxas
t��Iay 27, ?O10
Pa�e � of 7
kno���led�;e, c�r e��erience to o��erse� an� nona�dit scrvice; ��.•e pro��ide and for e�aluatititi� the
adequ�cy and s�es�lts of tlb�se services �nd t�ccepti��t� ��esponsibility far th�riz,
f��t�na��em�i7t is res��oez�ible f�r �staf�lishin�� a�nd maintainin�� eftecti��e ineeenal contrc�ls, inc�udin`,
ir�ternal cantrols or:�er coin�liance, �nd for mc�r�itarin�= on�Qin!� acti���tie�, Co he[p cns«re that
a�propriate roa9s and objzcti��es are niet. I�nu are �isc, responsible �or the sel�c�ion and application
oi' aecauntin� �rin�iples; #r�r tli� fair pi���s�ntatic�n in the fi�ianci�l stat�ments of the respecti��e
f��a►�eial po�itic�» of the go�=ern�nental actit�ities, t�i�e bus9ness-type acti��iti�s, th� agarzQat�
di�cr4tely p��esented ca�il�onent u�lits, eacti m�jc�r funci, ancl the a��gre�ate r�mainii�g fund
infc,��mation caf the City acid the respective chanaes in tuianciaV po;itian at�d, ���here ap�]rcable„ casl�
flo���s in confora�uty wiah U.S. ��enei•all�r accepted acc-oa�n[in�, pri�lciples; and for co���p�i�ance �r-ith
applica6�� ➢a�vs ai�ci rzgulations and the pra��i�ions c�f contracts and e�•ant aureements.
NTana,�ement is �lso res�o�isible fos �z�aki�14= all fir3ancial rzcords and related infori�iation availa'�le
to us�and far ensuE•in�� that m�na4rc�nc,nt and �nancial informatiari is reliabie and praperly
recorci�d. Your respansibilitie� also ir7cliide, including ident�tying signit3cant ��endor relationships
in �a��lic1� the v�ndo�� 3�a� � for proeram compliance and f�¢ t9i� accuracy and
completeness of that inforination.Your responsit�ilitieti iuclud� adjusting th� fi�ian�ia� stateinents to
corc material m'ssstatementl and confia•min� to us in the re�resentation letter that th� effeets of
aci�� uncorrected misstateme� ay�reQat�d by us dui tt�e eurr�nt engage�t�ent anci pertaining to
the [ate�T period �resented ar� ����nat�rial, botf� indil-idually and in the a�gre�at�, to the financial
staiements taken as a ���hole. 4
You are responsible f��• the de�iv�n anc� i�alplementation of ��°ograin� anc� controls to pr•e�.e�lt and
det�ct fraud, �nd Foj• ii�foret�ing u, at�out all knca�,z n or su��ected fraud oa• il���al acty affzctiij� the
govera�inent int�c�lvi�s{� ( 1} mana;�e�n�sit, (2 } emplo}fe�a «�lio ha��e si�nificant roles in inter�l�1
co�itrc�l, and (3) o�he� ��=l�ere the trat►d or ill��a] acts could hav� a�nat�ri�� eff�ck on t��e titx�ancial
st�teialent�. Y"our res�onsibilitie5 ir�cl�.�de informina us of }�c�ui• kno���le�ge of any ai�e�atians c�f �ra�id
�r susp�cted fraud affectin, the gover�iilient rec�i�ed irl coi�aaaltii�icatia��s froti� �mplayezs, former
e�n���yees, grantors, reQu�ators. or o[hers. In additiorl, y�u are r�spo�lsible for identityin, and
ensuriri�� tha� thz entity coi�z�li�s �a-ith applicable la�,vs, re{7tilatioitis, coi�te�acts, a�rezments, and
�rants. Additianallv, as eequix�e:�i b�' O�IB Circu9ar A-1.i3, it i; manageinent'� �°es}7Q���ibilit�' t� fc�llo�s°
up and take cc���rective a�ction on reported audit fy��din«� and to p� a �sua�t�t��r�F �ch�dule of
��ric7r auc�it tisidings and a c�orrective actic�n �lan.
Ivfan�geii72��it is re��onsible for est�blishin�= and �zlaintaiuinu a�rocess Ec�r kracki�tit� tl7e stat��s of
audit findiiigs and reuom«endations. l-1�rsa�e��lent is als� a'espo�nsibl� far itlentifyiia� tc�a� u�
�re��ious firyancia� aud�ts, attest�tion e��i��i��e�ncnt�, perfornl�nce audits, or other ,tudies related to
the c�bjecti��es ciiscusseci ii7 the .�.udat Ol�jc:ct�� es �ectic�n of thi� l�tt�r. Tl�iy res}�on,ibili�t�,� includes
rel�avi�l�� �c� L��, corres;ti� actions ta�:en to addr�ss si�s�iticant tindiir�s ��id reconiulz��c�a[io��s
re,ultin�.� frc�m those aud�t�, att4�tatiozi en�a�en�e��ts perie�rm�xnce a��dits, ar studi�s. You are al�o
respt�nsiMl� for �ra� idin� managertzent's �-ie�� s c��i c�ua� current findin��s, canclusio�l,, anc�
reccacninendations, a; �k ell a, �our pl��siriec� cc�rrectiti�e aetiotis, for the report, and for tl�� timin�s and
f�i•mat fc�r �� tl7at infc,rmation. �
:ludit Procedures General
ta�t audit i�tti�udes �xai�3inin«., on a te.t b�sis, ���idcn�;e su�p��rtin�, the �inount; :�n� di;closure� in
et1� tinancial st�rements: t�ierzfoa�e, c�ur audit w�•ill i�7��c�l��e jud�n7ei3t �€6out tl7e num'�er ��
��an;a�tions to be ���amined aeld tl�e ar��� �to b� tested. GVe «�ill �1���� astc� ped the �udit to
obtain a�e�sor�abl� rat�i�r khati abscal�u� �ss�u•ance �hout «�liether th� ti�lancial state�nents are fr�e
To tt�e I�o��oa h�Za}�or and
i��I�Enbers ofCitvCc�uncil
Feaa�lastd, Te�as
�-i34�?�, �a1c�
Pa�� � of 7
of r�naterial i��isstare«1er�t, «�hetl�er fi•a�n (1) eri•�rs, (?) fi�audulent tinartcial re�ortin�, {3)
misappropriation of assets, or (-�) ��iolatio�l� of la«�s or ��a� ernmental r�.gulations that are
attributa8�le to t}te zntity or ta act, by m�Fia��e�n4nt car eo��ployees actin�T on behalf of the entity.
Bec���se thz dz��i•iY�ination af al�us� i; su'k�j�cti���, Gc�i�el�l�it�iefrt .�4�rili�ti��g ,Stancl�r�•c�� do not zx��ct
�udi�ors ta p�'�ti�ic3e rea5�nable assurance ofdetectinQ abuse.
B����use ars aiadit is d�.i��r�i:d to provide rea;onaule, laut not absolutz �s�u�•a�3ce a��d bec�use �� e tri�l
nvt perfc�rn� a detailed era�uination c,f all transactions, there is � ri�k th�t �n�terial misstateme�lts
or noric��uplia�►c� may exist and nat b� detected by us. In additi�n, �n audit is nat �3�si��n�zd t�
detect in�i��aterial �nisstaten�ents or ��i�alations of la�vs or governmental regulatioi�s that do t�ot li���e
a direct and r effect oEl the fi�lanr:ial staten��nt; or �najc�r pro��E�an�s. I-lo��, ���er, �ve �vill ir�form
you of anv materi�] eri and any fraudulent financial repor•tin� �r misappropriation of assets tl7at
�c���l� to au�� a�tenti��7. ���e ri-i11 also inform you of any ��iolatio�7s af 1����s or go�°ea�nmental
re�,ulakions EhaT ccru�e to our att�ntion, unless clearly inc6nsec�uential. ��e �vi[t in�lude su�;h mattei•s
in th� i�eparts required f��r a Single Audit. Our rzs�onsit�il�ty as auditors i5 limited to the peric�d
eovered bv our audit and does not exte��cf t� any late� pea�iods for �vhic}i �Ee are not e��ga��ed as
a udi �o rs.
Our procedut°es t�-ill i�iclude te,ts of docume�ttary e� idence :�uppartiri�� the transactions rec�rcied in
the accounts, and �nay include tests of th4 �hysi�al ��iste�ice ofin��entoe�ies, and dirzct coi3firn�ation
c�f recei��ahles and cz;rtain �t�ier asset� and liabilities by cori•�spancience ���at�l selected indi��icRuals,
fun�in� saurees, creditc�rs, an�i tinan�ial institutic�ns. �Ve «�ill request �vritten representations from
yc�u� attorn�ys as part af tkte enga�em�nt, and they n�ay bill you for r�s�oii�iing to tl�is inquiz�y. At
the conclusion of our audit, «�e �.��all requit•e �;�rtain �.��rittesi representations frc�nY you ab�ut tl�e
financial statzn�ents and r�lated ir�atters.
Audit Procedures---Internal CantroEs
��r audit 4i�i11 include c�btai��ir��� ar� und�.rstandin� at the entity and its environinent, includ'in�
�nternal control, s�ifticient to ass�ss tlie risks af material missRateme�nt of tl�e tii7anc:ial ;,ta[ements
and to d�siti�n the nature, t�aniti�, a�id extent of f�rther• au�it pra�cedui�es. Tests of cantrols �l�ay be
p�a ta �eyt tl�e effe�ti� enz�s of certain contrals that �� e consi�ier re(e� ant to pre� c:ntiij�= and
detectin�� errnrs anc3 fr�iucl that ar� cnat�F�ial to the tinancial statem�nts ar�d to pre��entin� and
det�e�Cing m6s,tatemcnts resultii7�= froan ��le,�al a�;ts and oth�r noncouipliance anatters t9Yat ha��e a
direct as��3 mat4ria! �ff�4t on the tinancial statzsnents. Ou�� tests, if periormzd, �� ill l�e less in scc�pe
than ���e,uld be i�eczssarv ko render an opiniotz oi� inter�lal co��ta•al aud, aecordin��ly, no openion �ti�ill
b�; e��ressed in our re�ort on interna7 con�ral issued pud�suant to Ga�•errrnre�a�.�lPCCltti�i�=Staa��fcr�°ds.
:1s rec�uirecl by QI�fB Circular A-1.i3, rve tv�ll E��rfc�rm tests o� c�ntro[, oticr eom�liance to eva6uate
the effectiti�ene,s of t�ie de:�ir�u and oy�eratiai� of contra�s that �ve wonsid�E� i to pr�� or
detecti�ig inaterial n���s;e�m�lia��ce li itl� c��npliaslce requiresiienks applieable to each ma�or fedei•al
a�� ard pro;�r�ia�l. [ er, ou�� tc,ts n ill he less in sca�e than �i•��u�a ve neces;ary to ��znder an
a�i�ti��i on t}�t7,� cc��tit��olti and, ac�ord�n��ly. no opinian �kti�ill be etpre:,sed i1� our re�ort �on intern�id
cantrol issued �ursuant to �14IBCiz•�ular,�-133.
Ai� a��dit i5 not desi��Yecl ta �ro��id� assur�nce an i��teE ennt� or ta id�:ntify si;,nifc�nt
cieticiencie:. Hot�etier, clurin17 t13e a�idit, ���r �� �ammunicat4 ta �xtar�a;�eme�it a�ic1 tho�e Lhar�
���itl� �r,r,•�r�yae�+�e inC�r��al control rel��k�d matte_a that are required to be cou�n7unicated u��de�•
.a.IC'P.-� profesai���ial ;ta�idardy, Gr�i•c���aa��rcr�it .°Iir�Jitira,� Strrr���lm an� D�IB C'ircu[ar a-133 as f�ll�G4�:,:
• T17ese mattc rs, to the cxtei�lt the�• are applical�le, inci�iclz:
To t�le Ho�loi and
i�fembers of City Cou�ICil
4"eaa�la�i�l, Texas
tviav ?7, 20l 0
Pa�e 5 af 7
• O�r �°iz« s ab�ut yoti� si�ni#icant ac� ounkin� ��ractsces, islcluciiEi�� accoueitin�� polici�s,
ai;counting est�a��ates and fiilar7cial staten�e��t discl�sur�s.
• Si�t�ificant difticulties encountereci durin� the a�idit
� Uncorrected mrsstatem�nts, oth�r than tticrse the auditor belie�.�e�s are trivial
• Disagreeinents ���ith ina�la�,�zn��nt
• �,�tat�ri�l, corre�ted misstate�nentfi t� «-er� brou�l�t to �he attention af m�na�eineTtit as a
eeault af audit prc�cedur�� (recommended aciju;tm�nts ko t�iianceal stateinents).
• Repre�entatians n�e are requestina fa ntatia��entenk.
• Managernent`s corrs�ltatio�is �i ith other accountants
• Sr`i7iticank i:�;sues arisitig froin the auc�it that nere discusscd, or the subj�ct of
�oi•s ���itlj mana��ment
• Otl7er findin��� or issues, if a�iv, arisinQ frou� tl�e aud�t that are, in oa�r pt�afe�tiianal jud�n3ent,
signitic3nt and rele�,�ant to you r you�• o� ersi�ht of the financial repoi•kia�� prr�c�:ti�;.
Audit Prc�eet�ures---Compliance
As �art of c�btaiiasn�� reascanable assurance about �vlYetl�et the tinancial stateinents are free ot
material misstate�nealt, ��-e �t�ill perfor»i tzsts of the City's con��li�nce �vikh a�plicable la�r�s a��d
r�g�ilations and the provisi�ns of contracts and a��i including gj�ant agreemz�its. Ho���et�er,
the objeetive of Chcase procedu�°es tvill not be ta provide an opimion on o�'era�l compliance and «�e
«ill not e��ress such an opini�n ir� our report on co�npliance issued pursuank te� Goi•e��iriner�t
.�trditir�g Sta�aclarrls•.
�lbi$ Circular A-133 requ�i that «�e also plan and �erf�rm tl�e audiR to obtain reasc+nable
assurance about whether tl�e auditee ha� com�lied �vith a�plicable la��-s and re�ulatie�ns an� the
pro��isions of cocYtraets �i3d Mrant a,reecnents a�plica}�le tc� a��ajas pro�rams Our pro��dures ��.�ill
co��aist c�f test� of tratl�actions and other applieable �rocedures descr96ed in the D.LIB Ca� f1-
133 C�r�a��linaac�c Sii��Eal���aerrt foE the tyges of co�npliance requirecnents that could has-� a direct and
t�iaterial etfect a�t each of Ciri� of Pearland, Texas's �najor pro,rains. The purpose of tktese
prc�cedures �vill L�e tr� e3przss an o�inion on Cit,f of� Pe�rl�ncl, Teras's co�lly�liance «it��
rec�uiremetits applieable to zacli c�f its �t�ajor programs in oue report c�rl cc�inpliance issued �ursuant
t� OI�iB Circul��• A-133.
Eneagement Administi•ation, Fccs, and Other
�Ve exp�ect to be�in our auc�it i�i Ju�ie and �o issue o�r report, nc� later ti���l Kht fol{��1�i»g Ivlarc�i.
Christo�l�er L. Breau:�, CPA «�ill be desi,�nated a� tl�e en<�agem��it �artr�Gr a��d «-ill he responsible
for super��i�in�t� t�ie �r�t�a��;ment and si�ning the report.
EVe underst��ld that y'�ur ein�ioyees «�i9i prepare all casfi or other �ontiru�atic�ns n�� a�equ�st and
n�ill aocate anv docnn7ent5 s�lected b}- us for testitig.
Th� audit dti�cui»zi�tatinn for this e�i«aueii�e��t i�s tkie �ro�ertv of Null Laira��ti, P.�'. and constitutes
�onfic�e»tial ���t�arm�tia�l. H�«�e�.�er, pursua�3t to authar�t� �,ir,•�� b�� lati�� �or r�����tion, ���e ��la}r b�
requested t� anake certain Rudit documLnta�ion at�ai�able tc� � fec3eral �i�ency ���o� icti�iy� ciirect or
i�ldirect �utidin�, or thz U.�. G��,�ern�nena A�:�c,u��tabil�tv C)ti��lz f�a� pt�rpr�,e; of a quality r���i�:��� c�f
[l�e audit, to eesc�l��z audiC �ia�din��r:�, or t�o carr} out o� ersit,klt r�5�o�l:ibiluties. l�'`e �� ill natifv you of
any such requ�.t. If r�qaiested, access t� su�h auc�it dacum�ntation «�ill t�e pr��� undzr �h�
supert isictici at i�1u11 L3irs��ti, P.C, personnel. Fiirtllcr»lore, upon request, �� e ulay p�•ot�ic�e copies of
seleetec� audit dacusn�ntatian t� tl�e aforetl�etuioi3ed parCiz,. Thes� paeti�� ma�r d��tend, oi dccide. to
Tc� the Honorable l��ay�or anc�
Memlaers c�f Cit}� Cc�uncil
�'c;arlanc�, `Ce.r
Ni�y ? 7, 201(}
Pa�e 6 raf 7
distribute the copies or infortnatEOri coratained kherein to others, includinQ ather go�•ernmental
a�:encies.
Our f�;e fc�r thesz serti ices ���ill be at our standard hourly� rates plus out-of-pocket costs (such as
report reproduciian, s��ord �i•�ocessing, �ostatre, te•avzl, copies, tele�hane, etc.} except that 1<<e agree
that our �eoss f�e, incluc�inQ erpenses, «�ill not etce�d �6�,404. T�lis fee estimate consists of an
esti�nated 53,000 fc�r additior�al audit procedures required as a eesult of the City receiving a
suhstantial amoun� of fedzral funding. C)ur standard hourly rates ��ary accordin� to tl�e degree of
respon5ibility ialvol�•ed and the experience le���l of tE�e �ersanneC assa�n�c3 to yaur audi4. Qur
ic�voicts for tliese fees �vill be rendered each »ionth as �tnrk ��°ogrzsses a�td are paya6��e on
presentation. In accardance ���itli �UI" tll"111 policies, ��,�ork tnay be su�pended if your ac�;ount
becoines h0 days or more overd�ie and may not be resumed until your account is paid in ful4. If ���e
elect to terminate our serviees for nonpay�nen�, our en�a�e�nent �vill be deemed to l�ave i�een
cpmpletzd e�}�on �;�ritt�n notification of termination, e��en if we have nat cnmp3eted our report. You
t�rill be obli[�ated Co compensate us far all time e�p�ndecl and to rein�bul•se us for all out-of-poc�Cet
casts throuQh the daCe oftermination. Ttte above fee �s bas�d on anticipated cao�zration from your
personnel and the assumption [hat unexpected circurnstarlce� �vill r�ot be encountered during the
audit. If si�nificant additional timz is n�cessary, �ve �vil] discuss it ti��ith you and arri5�� at a ne«I fe�
estimat� before ��re in�cur tlie additional cosgs.
You xnay request that �ve perforin additional ser��ices not contei�p4atect by t�is en�a�z»sent leKter. If
khis occurs, �ve �vill coininunica;te ��.�ith you reQardin� khe scope of the adtiiti€�a�al se� atid the
estirnated fzes. ��e also inay issue a separ�te en�lgemeai3 lett�r cow�erin� the additional services. tn
khe absence of any other ���ritten cocninunicakion fr•om us docwl�entin� suckl additional' ser��iees, our
services �.��ill continue to be go��ei•ned bv tl�e ter�iis of thi, sn�a��eir�ent letter.
At tlle conclusion of tlte enga�e�n�nt, r��e �� ill eomplete the appro�ariatz sections of a�td sign the Data
Collzciion Forin that summarizes our audit tind�n�s. It is management''s responsibility to su6mit the
reportinL? packa�e (ineludin� financial stateinents, schedule of e�penditures of federal a�varc�s,
su�ni�lary schedule of �eior audit findin�s, auditars' repn� a��d a correc�ive actioti pla�i} alon4
n�itll tki� Data Callec�i�n Foc�m to �he c�esi�nat�d federal elearingkiouse and, if apF�ro�eiate, to pass-
throu,h entities. The Data Cc�llection Forn� a�id th� re�ortin� packa�e nzusC be subiY�itted ��fitli�n t�ie
earlier af 30 days after reczi�t of th� auditors' reports or nine months atter khe en�l af the audit
period, unless a lon{�e� �eriod is aareed to in advan�e b}f ttle coanizant or o��ersEg�it aaei�cy for
aud'ats. At tlie canclusion of the en���emei�t, ��e ���ill prc��•ide infarmation to manageme»t a, to
�vl�ere th� reportiFi�� packages sliould be submi�ted �nd Ch� nu�fiher to �ubmik.
Go��c�•fir�ac:�at Aiirlitr�rg Srrr�idru•ds requirz tllat �ve pro��icQe yau n•itli a copy of our cnost reeeiit ���ernal
peer r���ie�v re�ork �nd ar�_y letter ot cc�mment, and any subsec�uent peer rzvie«� re�orts and letter�
of tcamninent recei��ed durin� tl�e pe1•iod of tli� conta�act. W� t�are a[tacl�ed our in�r�t recenC peer
revi���- a�e�oi
�l'e appreciate th� ca�pcsrtunit4� to b� of szrvice to tl�e C'i[y and belie� e rhis letter accurateEy
suG��mariz�s the si�niticant te�•ms of olu ent�a�,emntint. If you lla�°e ail�° questions, pCea�e lzt us knon�.
lf v�u aRre� 1��ith t�ie term> of ��i� ��n�a<tic»Zent as des�rib�d in tltiis l�tter, plza�� �ig�i the ericloszd
capy �rtd return it to us.
Ver� teu1;�- ynues,
�, � , ��
�� - ��
To the Honorable Iv�ayor and
M�mbers ofCityC�uneil
Pearland, Texas
May 27, 201 Q
Page 7 of 7
RESPQNSE:
This ietter eorrectly sets h khe understandin� o�th� ��ty ofPearland, �'exas.
By: - --
Title; Bil1 Eisen, City Manager
Date: June 14 , 2 O 10