HomeMy WebLinkAbout166-17 RESOLUTION8k SAYr.f..
113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Resolution: 166-17
File Number: 2017-0401
AMEND RESOLUTION NO. 17-71:
A RESOLUTION TO AMEND RESOLUTION NO. 17-71 BY APPROVING PAYMENT OF AN
ADDITIONAL $5,000.00 TO GRANT THORNTON, LLP AS REIMBURSEMENT FOR OUT OF
POCKET EXPENSES
WHEREAS, Resolution No. 17-71, approved on March 21, 2017, authorized Mayor Jordan to sign a
contract with Grant Thornton, LLP for independent auditing services and further authorized payment of
$95,500.00 for those services; and
WHEREAS, the quoted price from Grant Thornton LLP includes an additional $5,000.00 for out of pocket
expenses, an amount which was anticipated in the budget, but which was unintentionally omitted from the
Resolution.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby amends Resolution No. 17-71
by approving the payment of an additional $5,000.00 to Grant Thornton, LLP as reimbursement for out of
pocket expenses.
PASSED and APPROVED on 8/15/2017
Page 1
Attest:
Sondra E. Smith, City Clerk Treasurer
41;14��!��� 11 1T 1,1 '
• FAYE 'EVILLE
• Ca ; a.
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J,r"�I
Printed on 8116117
City of Fayetteville, Arkansas 113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Text File
File Number: 2017-0401
Agenda Date: 8/15/2017 Version: 1 Status: Passed
In Control: City Council Meeting File Type: Resolution
Agenda Number: A. 10
AMEND RESOLUTION NO. 17-71:
A RESOLUTION TO AMEND RESOLUTION NO. 17-71 BY APPROVING PAYMENT OF AN
ADDITIONAL $5,000.00 TO GRANT THORNTON, LLP AS REIMBURSEMENT FOR OUT OF
POCKET EXPENSES
WHEREAS, Resolution No. 17-71, approved on March 21, 2017, authorized Mayor Jordan to sign a
contract with Grant Thornton, LLP for independent auditing services and further authorized payment of
$95,500.00 for those services; and
WHEREAS, the quoted price from Grant Thornton LLP includes an additional $5,000.00 for out of
pocket expenses, an amount which was anticipated in the budget, but which was unintentionally omitted
from the Resolution.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby amends Resolution No.
17-71 by approving the payment of an additional $5,000.00 to Grant Thornton, LLP as reimbursement
for out of pocket expenses.
City of Fayetteville, Arkansas Page 1 Printed on 811612017
Marsha Hertweck
Submitted By
City of Fayetteville Staff Review Form
2017-0401
Legistar File ID
8/15/2017
City Council Meeting Date - Agenda Item Only
N/A for Non -Agenda Item
7/17/2017 ACCOUNTING & AUDIT (131)
Submitted Date Division / Department
Action Recommendation:
Amend Resolution 17-71 to approve an additional $5,000 for out of pocket expenses to Grant Thornton LLP.
Various accounts
Account Number
Project Number
Budgeted Item? Yes
Does item have a cost? Yes
Budget Adjustment Attached? No
Previous Ordinance or Resolution #
Original Contract Number:
Comments:
Budget Impact:
Current Budget
Funds Obligated
Current Balance
Item Cost
Budget Adjustment
Remaining Budget
Various Funds
Fund
Project Title
$ 102,500.00
$ 95,500.00
$ 7;000.00
$ 5,000.00
$ 2,000.00
V20140710
Approval Date-
_.: CITY OF
FAYETTEVILLE
ARKANSAS
MEETING OF AUGUST 15, 2017
TO: Mayor and City Council
FROM: Marsha Hertweck, Accounting Director
DATE: July 17, 2017
CITY COUNCIL MEMO
SUBJECT: Amendment to Resolution 17-71, Grant Thornton LLP contract
RECOMMENDATION:
Amend Resolution 17-71 to approve an additional $5,000 for out of pocket expenses.
BACKGROUND:
On March 21, 2017, the City Council approved the contract with Grant Thornton LLP for the
annual audit of the 2016 financial statements.
DISCUSSION:
The contract amount was listed as $95,500 with $5,000 extra for out of pocket fees. I failed to
include the $5,000 out of pocket in the amount to approve.
BUDGET/STAFF IMPACT:
There is no impact on the budget to amend the resolution.
Attachments:
Staff Review form
City Council Memo
Original Contract
Mailing Address:
113 W. Mountain Street www.fayetteville-ar.gov
Fayetteville, AR 72701
113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Resolution: 71-17
File Number: 2017-0123
GRANT THORNTON LLP:
A RESOLUTION TO APPROVE A CONTRACT WITH GRANT THORNTON LLP IN THE AMOUNT
OF $95,500.00 TO PROVIDE INDEPENDENT AUDIT SERVICES TO THE CITY OF FAYETTEVILLE
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby approves a contract with Grant
Thornton LLP in the amount of $95,500.00 to provide independent audit services to the City of
Fayetteville. A copy of the engagement letter for services is attached to this Resolution and made a part
hereof.
PASSED and APPROVED on 3/21/2017
Page 1
Attest:
L'� .i.
Sondra E. Smith, City Clerk "!'reasurer
�,����►� irrrrrr,��
Printed on 3/22/17
4
City of Fayetteville, Arkansas
In Control: City Council Meeting
Agenda Number: A. 4
GRANT THORNTON LLP:
Text File
File Number: 2017-0123
Version: 1
113 West Mountain Street
Fayetteville, AR 72701
(478) 575-8323
Status: Passed
File Type: Resolution
A RESOLUTION TO APPROVE A CONTRACT WITH GRANT THORNTON LLP IN THE
AMOUNT OF $95,500.00 TO PROVIDE INDEPENDENT AUDIT SERVICES TO THE CITY OF
FAYETTEV:ILLE
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,
ARKANSAS:
Section I: That the City Council of the City of Fayetteville, Arkansas hereby approves a contract with
Grant Thornton LLP in the amount of $95,500.00 to provide independent audit services to the City of
Fayetteville. A copy of the engagement letter for services is attached to this Resolution and made a part
hereof.
City of Fayetteville, Arkansas Page 1 Printed on 3/22/2017
City of Fayetteville Staff Review Form
2017-0123
Legistar Fite ID
3/21/2017
City Council Meeting Date -Agenda Item Only
N/A for Non -Agenda Item
Marsha Hertweck 3/1/2017 Accounting & Audit/
Finance & Internal Services Department
Submitted By Submitted Date Division I Department
Action Recommendation:
Request approval of a contract with Grant Thornton, LLP for annual audit services for the 2016 financial audit,
Budget Impact:
various
Account Number Fund
Project Number
Budgeted Item? Yes Current Budget
Funds Obligated
Project Title
$ 99,500.00
Current Balance $ 99,50A.00
Does Item have a cost? Yes Item Cost $ 95,500.00
Budget Adjustment Attached? NA Budget Adjustment
Remaining Budget $ 4,000,40
Previous Ordlnance.,or Resolution #
Original Contract Number: Approval Datd<
Comments:
CITY OF
ay�I CITY COUNCIL AGENDA MEMO
ARKANSAS
MEETING OF, 4 Cali` k2, :J.
TO:
Mayor Lioneld Jordan and Fayetteville City council
THRU:
Paul Becker
FROM:
Marsha Hertweck
DATE:
March 1, 2017
SUBJECT:
Annual Audit
RE60MMENDATION:
Approval of the fifth year of a five year contract with Grant Thornton, LLP for annual audit
services for the 2016 audit.
BACKGROUND:
The City is required, under Arkansas statutes and applicable bond issues, to have an annual
financial audit conducted by either Legislative Audit or a Certified Public Accounting firm licensed
in;Arkansas. Because of the requirements of bond -Indentures, the City has for the past thirty plus
years utilized the services of a private CPA firm to perform these mandated financial audits.
Grant Thornton'was selected by the City following the applicable rules and regulations concerning
the procurement of auditing services for a five year contract beginning with the 2012 audit, Under
this contract Grant Thornton will provide an annual audit of the City's financial statements and a
review of the City's internal control system as required by state law. In addition to the financial
audit, Grant Thornton will issue a report on internal control and compliance requirements for major
federal award programs as required by the Single Audit Act. The single audit -is the primary
mechanism used by federal agencies to ensure accountability for federal awards to non-federal
entities.
Finally, Grant Thornton will also provide technical assistance to the City in producing the
Comprehensive Annual Financial Report (CAFR). The CAFR includes the City's financial
statements as well as statistical information required by the City's bond covenants.
DISCUSSION:
Staff is recommending approval of the contract with Grant Thornton, LLP for auditing services.
BUDGET/STAFF IMPACT:
The cost of the 2016 audit is $95,500. The audit cost has been budgeted in General Fund and
various other funds in the 2017 budget.
Mailing Address:
113 W. Mountain Street www.fayetteville-ar.gov
Fayetteville, AR 72701
Attachments:
Grant Thornton Engagement Letter
n. T. ho r n t on
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jjg:44,Atkanlsas- -72701
.'Pant Mn tad LLP
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21 551,07a 1,07a
6antThomtoff.com
Now- w4w0rato W.
ORdMemesit LettE2) docurrictits- our: mutual understanaihg of the arong w fc.vi the
WBI.2itidit.the financial statcmerfts of thet�g th
gov&bwien �tc.&ides .e
-ajor fand, And the
the baaic,RuancW statements CSnocialshicmente)
o theICkyd:r-a,"tt6w&. Arkansas (coftctively, the "City'�, as oif and for the year ended December M, 2016-
IT.h� s-ep4r4t,- flnih.cW swcrnm% of 'the, Fa#MvII16 Advertising and Prornatiow Commbsion And the.
k7ayGttev tie Public llbrary, included in the iinaadal.stWments, will be audited by other auditors, who will be
CM'00d sopa'&le I ly fiom this engagement letter. Our -audit opinion, insofar -as it relates to, the awounts ih dAuded
eqov sioti and the Fayetteville P64cUbtgy, ,make
f6r;th _Iqe Adver s�a
and I-Ii-orn. Qtiohs Cog=m
.xefererxp� fo the audit pc _tm4' by the odwr auditors. Our, financfid statement audit will be conducted in
laccOrdwim vnitiL auditing standards generally accepred in the United States of America C'US GARS" '
ewLblishtil'by -the Amct4can Instittite of Certified Public Accountants (`AICPX) and the standards fbr
,&,_4.hdd alltot$ Of ffie'ULS Giwer=A
eht cctuntabflity Office's ("GAV) Goydmiwat AudWq. StRif*rdf
C.'GAO&
., . hsucd,!3y th 'Comptrollet 6gneial of 6vUrAitdd'$%t0. An -audit lnvo(ves perfapinjn, pioqa4wev
to: 6WA.qit?dle evidence: -about the mounts and 4sclosores in. t6 financial statements. The procedures WcctcZ
depend on theaudktbr's judgniehk�iachOng the assessment oftbe.xisks of material misstatement of the finondal
"t to -Epi3d, Qt 4fror, 4.m sudiv also includes evaluating the app - cif tho
S.W�ft&ut , ropiiaken� tt,
k. *heth:pt do s
icdoutft-aed n-4 n
policies U =Ld the:±Cu6nableoas Of �igftificznt accounting estimates made 4y�mwageme
ell as v luadng the overall finanda statement prcscntaf on.
ja-m-sepl4g, the tisk.s of #mverW misstititektYes t At-ka4itor considers: internal control relevant- to the entity's
Preparation and fair presentati6h of the Fw4pcW statements in :order_ to design audit procccluxes that, are,
appop4Aela the &cutnstance. GAGAS further requires us to perform tests of the entity's compliance with
latus, ft-Uh-dofts contmets, and grant agreentenS, in which noncornpli2nce could have a dite-tt. Aftd material
fi=nclw-staranyat amounts. Howaver, a financial statement auditis riot d6gigzIod
w,pfoido assurance on cpMpli4oce or ioternil control over financial reporting or to identify,-inupfitegai
or internal contr4deficiencleR.
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vclefr- c64dioctio$ an audit, the auditor -is requited to obtal't te;fsonaWe assurance: about whether the financial
t-weidal iniss t-atemenk whether due'to-6aud'ot error, to�rmable tht, auditortoexptess
amp .-4 ' I all, material respects, in actotdance,tzith
PW0n,onwbe#ert.h-e� anoal statements are presented fairly, M
accounting Frtinciples generally accepted ih the United Stated of'Amenca, Although not absolute assm-kice-
reasonable assurance is, nevertheless, a� high level of: assdr$incej HoweV4, an audit is not x guarantee of .the,
accuad statements. Evc4 though thapudi I
Ak5prcpeA py oaned. and performed in accordance
with professianit standards, an unavoidable risk- evists, that some material :.misstatements or noncompliance
"Alaws, rept0togs, c6n&a.cfs,,aftd;9bint.4greem- entv -itay tidt be, detect -ed: due to the inhekent limitations of
4 di ft-th
-414%PO4t WIM of t=al.066�01, Also; an guditis not dc%guedito detect errors
or fraud oiak is ittimnarWJP theInaffc1al statements,
lt--multi 'bt ooted 'tbat h4ouso- the, de'teh mtiti
gpn of - ab. WeAs: su.�jpctivej.we- have no re - sy.oh ility to design
assurance of- iete-c6ng abuse. Abuse 1-9: distinct from fraud a:ft&iwfitbbipEance.
Ab-uRc invcdvc§- bah(Lvior that- is: dLfident or improper -*'hen compared with! behavior t.1.1,4t a
would consider gdasohAlranti nd;zes.n.7business .pvpr-ticogiven the facts at -.id wcumstances.
,Purs,uiint.to.t6 Single AudltAct.Amendment5 of 1996 and TRIc 2 Ua'S, C-ode.-o.f.F.(-detal%Flegwati6ns("CFR'�
Put ZO, - U0�*Ad*AwmAjve Requirtmotir, Qr Pnsicolks, wdAudtt.XVu,&wsnufor FederalAkt*4 ("Unif6im
`4R!aize"),.:wd will, also •audit the QV. q. compliahce, with. tire: typed of complia4ce requir4meno, desctib4o
6 OM D Covy)W* Sapa
pkmewf that could have 4 dizectand.rqMtrid effect oii hiefits. ] rn "or federal ot6grams.
for the year e-nded,December 31y 2016. We will conduct our.comph'ance-audit in accordance. with US GAAS-,
GAGASj and the Uniform Guidance. nose standards and the Uniform Guidance require -the auditor tb plan
and perform the compliance audit to obtain reasonable assurance ab-outwhethet'noncompliance with the types
of cornplikrice requirements that could have -a direct and ,mawrial effect. on each major federal program
to enable the auditor to express an opinion on the entity's compliance with these requirements in an
P. C -examining,.
mat i1i4eslietts Acbraplianc -audit,includes determining InaJorptogpims, oria test basis, evidence
a.bati.t the entity's compliance with those requiiernents, and performing such other procedures as we considered
necasaty in the circumstances, including performing tests of internal control to evaluate the, effectiveness of
the design and operatibi-i of controls considered relevant to preventing, or detecting and correcting, material
n,oncoinpli-afice with requirements applicable to major prograttis. Absolute assutante is not,attainable because
the compliance audit is conducted on alest bagis and compliance withthc specific program kequiremelit.s is
subject to; the !Aerent limitations of internal control over compliance, which may not prevent or detect
intentional or unintentional noncompliance. Accordingly, material noncompliance may remain undetected,
.Mso,,IL compliance -audit is not designed to detect i3oncompliMice, whether intentional or uniatentionA, that is
immMoaLOur compliarice, audit does, not provide a legal detarmn nation of the City's compliance with -those
requirements.
Uppri'the completion of the1otegoing financial statemexii and compliance audits and subject to their findings,
we will tendLit-our-rcpotts on the City's 'financial statements and oathe City's compliance with the requirements
referred to above that atd,applica1le to each of its major federal programs and will .communicate our findings
in accordance with UStGAAS,; GAGAS, and the Uniform Guidance. Our report ori the City's compliance will
Inclu& our findings on Internal pohtrof over compliance, however; no opinion will be expressed on `internal
colitrol over, compliance;
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As required h7.GAGAS, we -will also render a repott avat-iuclip&% our fia&As on the Ws internal control
weewitb tat and .grant agtoements, and vtl=
fiowo* odp_L�g, pa whpliance. ft regi &ftobs, Conttac
,11wtas jbasgofi Q attcial ataterncnt audit. gush report v& be, eonsidetcd integral to the basic financial
st4tetteuts and wOl'be 90'=4 to-'ibour repotv6ereon. AWw -_providiagan opinion .oti internal coAtol
'Over.finanew reporting or Asn compliance wlth. th6se-pto, Viv tem�tn
,wflloas is,n0t = objad cof our financial sta t
not_e;Vi=,*qch,ah opinion.
M0114*9WpEe§ g xall ted in the United Stakes of Amodca ieguirc: that ffic MwPage Me,
the Schedule - of, C._hwjgp in the.Fimwen'N Pension and .Relief Furrd .- Net Pension
,Iiaft thozdh-cdaloofthe lzlwhiefi'g Pension atidReliefFund Not Pension 11abiggy, the SeheduWof thdQity
df,puyettevEjes Contgbutioasfor the Fjm&eft.1s Pcr*1o:n acid er--Fund, the Schedule oP.InvestmgntActurns
.FQr Vircmaxn s Pension and Relief Fun4, tht Schedule of fih=gta in'thePolicQmen's Ponsion and Relief Fund -
"Vat Pension ilability, -ffia $cheJ%* of the.- Poli co6w, Peniibn andAelief Rond Not ?cnsion.1;iabiH% the
S chadule of the City of Pay Tung
ctmville's C=tdbutijjn# for the. Policertiens'Perwon. Lind Relief the Sc 1t#ie
of,lhwisti*wRettro� f(?f PbliooMgn's Pe:niion •and M.-irf runt}, the Schedule of the .Chews 9h-are-.,ofNet
PensjonIAO&y, the Sdhcdulc of the CiVs Net lle,nsibn - Liability Arkansm-LtLcal Police -and Fire Retirement
System (,OPFIj 'the Schedule of"ffic Citfs Contdb-dtiotis - Arkansm LocalTolice and Fire lLetitetncurSystern
A<Idildcityal -Plan 16fqr*)Ation_ An nsas; Local Police and We Retikuncht System (LOPFI)-. and the
8chedule of'Vj4*g Pxogress - Other Vwccrnp1oytaexLt Benefit Plan be presented to supplement the basic
financW statementa..,Such informationAthough-nota required part of the basic financial statements, is required
by the Govemmentid Accounting.St-an&rdt I Boatd CGASB'j who considers it to Ve,atl estientill part of
Gnanciij t4portjng, for placing the baete financial statements iti an appropriate o paratidnal, economic, or
historical context - This requireiNupplementary infonnati6n is the responsibility of rnanagemcnL We Veill -apply
tarmin limited procedures to the mquired soppletnentary information in accordance with US GAAS. nese
lirluted prioaedu,=5 consisc.of itiquides, ofmanagement about the methods of preparing the information and
comparing thc-informadon for consistency withmanagernents responses to our inquiries, the basic financial
statements, and other knpwledZe'wc obtain during ouraudit of the basic 'financial statements, We Will not
-express -an opinion nor provide any assurance on the information'because the firaitcd procedwes. will not
providevswith sufficient evidence -to.exPress an opirtion or provide arty assurance.
oiher intormation
MannenieritAgresponsible for providing.us with other information thatwill he included in an annual.repott or
similar d.oc=eot- cQnumtog: audited financial ato:tIpme4ts gftO our. :auditor's ,report thereon,,including the
introductory au&stWsdW,sections presented to 14Lfill the requirements of the Government Finance, Officers'
Association. Comprehensive.Annual Financial Report C'CAFR--',?). Management should provide the infotmad6n
prior tb the rdea:seof_oijt auditor's report. Ow re9potisibility for such ihfor =d6n does not,extend beyond the
A-ddAcig o=attonjdehtified in our tep6rt'Wo do not per-foirn any procedures to corroborate the other.
in;fqrrnxji9ntontgi:ned:ift these docurhents. Professional standaxas require -us to read the other information and
congider-wbcther,th.e,other .intg,rmation, or the manner of:its,,pxesvntadojT, Is Materially inconsistent with
it,formation, appgaijog; in the financial statements. We will bring to management's attention any information
&at ve believe is- a material rnisstatetntnt of fact. I
q;hy 7t.4FfflqM %XP
V , now Lid
QrantThornton
R-ap'oosibilities of those chu d::with govettsant e
EffedOc t-,yo--,yjy comtnuiucatioxt vA the City Council, and Audlt.Committee (referred to as "those'4hatged.
with ZaLvernance`) .assists us in obtaiiiirlgInformatlon relevant to the audit and also assiats those chgge i with.
govemance.in Mfft(ing theirresponsibility to weoee -the 4anc d reporting process. �nosc charged with
g y'e.mA ce, pla.y au., important- role, itt, tate Cjtty"s internal cotltml over financial reporting by. setting a positive
tone at'the'top and challr , ; rhe City's activ do in the. financial arena. Accordingly, it is important for those
charged. with governance to QOMMuniCate td 'us :riiattets they believe are relevant to our: engagement. As
Indicated Wow, management. also has` a i:espdnsibility to comitiunicate cettaiq matters to :those charged with
governa3ice:atld;to Cv�Ot Thornton,
fn ri ithection 1,yA.•1ouz rmpgefiaent, pxoi Ssiarlal standards require us to communicate 'eertain, matters that
.eom to out attention:to those chargodwit4jg47 y trance such as the follo'' ng
o.z. fraud itsvolving -sector rnanagentent and hadd chat causes a material misstatement
+ g i.acts,-unless c1'ea4y lttconsequentW
+ p,°ibladohs of cotttmcts ar.grant.agteements anda�,use that causes a material misstatement
rn(incoTpEanre with the.provisions of,a major federal financial assistance program
•. failure to rel ort fraud, ill al,, acts, violations of contracts br grant agrectnetits, or abuse to specified External
parties' whets requixCd bylaw ox tegulatitsir4 tide may also be required to report such matters directly to the
�tctiial party..
material weaknesses in internal control over financialportingand
$igniHcant.,defieiencics anti federal
financial asslstance-
• disagreements with management and.odier'seiious difficulties encountered
R qualitative aspects of significant accounting practices, including accounting policies, estimates, 'and
disclosures
+. audit adjustments and uncorrected misstatements, including missing disclosures.
'Management responsibilities
As 'you ,are aware, the -financial statements are the •responsibility of management. Management is responsible
forp> epaz$rsg grid fairly presentitig the fitsancial statements:ia accordance, with accounting -principles generally
aecepte'd in, the United nates of Ametica,.whichlincludes -adopting sound accounting practices and complying
with &-anges in accbunting principles and related guidance. Management is also respotssible for:
• pxovidir►g us with ;access to all infomation of which they aro aware that is relevant to the preparation and
fairpresentation of the financial statements, including all financial records, documentation of internal control
over financial fcpotting arsd' federal financial assistance and related information, and any additional
information that we may request for audit purposes
providing, us wiLhuntesttictcd .acces- to persons within the City from whom we determine it necessary to
obtain•audit evidence
+ making°.us•aware of any significant contractor relationships in which the contractor has the responsibility for
peogrAm c6t6phance
+ ensuring that'the City identifies and complies with all federal siatutes, regulations, and terms and conditions
of federal awards applicable to its �ac'tivities, and for infotming us of any known violations. The City should
G Fq ys Thermtan U,P
31,5.;r cintior 6ma at.Crent Thornton kiemsftal Lid
0: GrantThornton,
ideraq md'Aisrbse to us.an federal statutesj tegulations, and mans -snJ tondidons of E64". 4wa' &IhAt
mdoijol 'bf&pt ori the dbtoinina�m of fih=4:0 atat=ew amounts or oth-cr. slgp4cant
Ix,%t
-steps to., tanedy
ukiaq�lfacts, violations of t0httkts c, :e federal W dsa Q
q u Itmenting, and •roainti x ng effective itkternsl control over f
41,quate accounting records And procedures to -SafePatd the Citfs
IJ, n4M "&
cjf-aqkftOV.ft-6,lgd f lcant.ddficioenci-;�s-and- material W.6k se #114 4 t ficant
cha t are;iiit itial.cotit ol,t , p-.figaucjgjr4p&dng andfe.deralfinancigassistance
(hf -tM6Qf their v.1 'ews ab,>qt,the, i6kiof%fmudi*A& the City Andih&wwaeness of any OV
gw
suspected fraud --and the i6lated totrective aetioti proposed
texial misstat#euts 2m4 fbr,,-4ffimft
t
.0 Us is r4presenta4t, latter that the effects of any uncorrected nuast-atements, ivchyding wissing
g tpthelatesxpoelcA
A bsooau'res"O to-dby us during the c�krent;ehgtgoftip4t, ixicludiftg.those petalain
ts V;
-gate, -tem h -- as: We
b6thIU1110clually and in die agtt -to tile-filLihCOISM
-
and maintWmIng 2. process -to address and,,track the status :of our findings, conclusiPus, and
v corrective
.1 gra-anagement's,&,,wsonsuc-hiogtter-s�LBwcU�,."VI�nned
r-eco=n.ftidations.. including pro
:,hc6ons to be intludtd an the -report; in a timely manner, Ilii indudes infogpil6g- U -S of findlqs and
arnentp, or, other stadJO that tould have .a. hm,*r
effect on. the' financial statcments an4whether Any related recommendations were implemehre8-
`ox g
. '- any date of the financial statements through the date of
us of events occurting subsequent to the
out audito?s:;tep.p4 that may affect the Ana'ncial , statements or the -related disclosures
s I
informing us of any subsequent discovery of facts that may have vd.s�ted at the date of our au&kQe report
that r . noy,,bave affected:thefinancial statements or thcxelated disclosures
9. ta.ldng correcive• 4 on on any xr-ported finffiagS or questioned costs repotted to them and preparing a
wd
summaty,schl.,dule of,.prior audit finditags corrective action plan, if applicable, as required by ihe
Unifdrm Guidance
iw s.ubiwtth2g theoporting pack&agc:(includlng -financial statements, sgbedul.e of expen4.Wres of fc4ftal-"avvArds, -
auditor's xopoto and, ifapolicable, a summaschedule:of prior audit findings and a corrective actiowplan.)
a16n_g with the Data Colloction'Totm to the designated federal clearinghouse and, 'if Approp4?t0t. topass-
thkcjUgh endtje's, Mic IDstj Co'&t on Form and tl1Orepqjjting
pAekage must. -be submitted within the earlier
of 30 dqz gfrr receipt of the au'ditor's
it - or's rep.orts or aizm months afto the end,of the Audit period, unless u
longex P=04 is agreed to in advance by the cognisant or -oversight agency for the apdit,
distdbudug jhexeport(s), including the financial ataternents, ,any supplementary information, and the
report(a)mthertbri. to tbase,officials-and ar.gAnlizAtiong-zequiking them.
To assist those. ChMVO with govermixe in hlrMng their -respphslW(y to oversee the fina*: - Nal rcporting
'Pro.cess-, management Shoulddiscuss with those charged with, governance ihr.
itde=icrof internal control our financial rep�orttn.&Atid federal financial assi8tance and theidentificationof
any s tic
-or material weakness -es- incli4ding. the related corrective action proposed.
c_O Ltd
0 Gra>ntThornton
.+ :significant aceauki policies; alternative treatments;-aqd the reasons for the initial selection of, or change
in, giiflcantsacctiuntin policies
pracess used bjr managemcrnt irl for.mWating pattioalarly sensitive accounting judgments and estimates and
whether the possiblOt exists #hat ft�tuxc events affecting these estimates may differ markedly from current
judgrrients
• bas6 used'by management determinnig that uncorrected miss tatements, including missing disclosutvs, arc
6¢thlntiWdtfj l ,jnd. iii iht gWZatc, 3ncludingwliether any of these unt atrected mias�atemei�ts
could pormdally ratase' f itsxe. ftnane't statements to be materially uvsstated.
WWwill, " ni=ag4pmesst's 'coap;era&n to complete our services. In-add>tion, we --Will obtain, .1h-accordance
.%A- ptofesssbnal standar'ds,•certain written representations from management, which we will telt' upon,
tine of out-regorts
q'$e *lWsOo v:4Witton, or>reproduction "by the Grtp of any of our reports in dowmeAts such as bond
offerings;. x toi3r filings; and Data Collection Forms containing infvrmaitiati .iu •addition to finarieial
,statements, may require us to perform .additiorial procedures to fulfill our professional or legal responsibilities.
Appcor %lu,,.6m.reports'shoisld`.t-iot be used for airy such purposes without our prior.perrnission. In :addition,
tq.avoid uiineccs'sary delay ox misunde'rstanding,-it>is unportant that the City give us timely notice of its.•intendon
to issue atxy.such:document:
The report on compIiai�ce with lae�s, tegulations, contracts, and grant agreements and internal control over
financial r.epor4ng and the reposia on colxipliance and internal control over .compliance related to major
prQgrams issued in accordance with. the Uniform Guidance will each include a stateLnent that describes the
purpose of the communication, which is to describe thescope of our testing of intemal,control over financial
-repQttkng, internal control over compliance, and compliance, and the result of that testing. Accordingly, these
repoxts -are not suitable for any other purpose.
,Ot !r• services
,Supplementary information
Managemeat is responsible for separately preparing the schedule of expenditures - of federal awards,for the year
ended December 31, 2016 in accordance with the Uniform Guidance and the combining anal individual fund
sttatetn,Cnts and sehedyles in accgrdancc with the requirements of the Government Finance Officers'
Association Comprehensive Annual Financial'Report (" CAFW ), Such supplementary information, which will
be presented for purposes of additional analysis and is not a required part of the financial statements, will be
subjected to the auditing procedures applied in the audit of the financial statements and certain additional
pro:eedures. Z hese procedures .will. include comparing and reconciling the supplementary information ,directly
to the underlying accounting and other records used to prepare the financial statements or to the financial
statements themselves, and other additional procedures in accordance with US GAAS. The purpose of our
ptocedi5res-wi71 be -to fotm:and express an opinion>as towhether thesupplementary:informationis fairly stated,
in.,all material respects; in relation to ,the financial statements as a +:Tole.
Dram Thomson LLP
UL+(mmb'er arm o(Grard ThoroJm InWrlafional Ltd;
I
0 GrantThornton
In conection- Vni0i our procedures; management is -responsible for intormiq us Awlv
v &c methods of raemurement-and prts-cnWfotx of the supplementary infonniation
)JIged frpoj the Tadth6dg Used in the prior p reasons period. and the i so s for the
0 any wffli6put assvmpdons or intetprdmaons under.1
*g. the meisurerneht or proseqtation of the
mppleMrany ME019*don
M,atjogt *i31]rPro,$ 'Ciltibr, S'Opplementary IAFPftMNWi WWI the audited,faunciail statcmentsi'monagerne4t is
respovsjWe. for, inducftour'jrepott on the supplarneatuyinfoitnadon it, any. 46.&VAent that contlks° flaid
$uppjeMcY3# q iafbttadoAigad thit ikkdfaagl we -roported on it,
*vi�reqairemanvmento ProvIde uewith-certain wriiUm, reprMCOMonstelated. to tb&.tesponsibiffties
de,sc,dbcd above, jnCW�rwhqther-.m*g§OWeAt bc&ves the supplemerttM7� WP1=20n, #hC10ft its -form
and ounftnt) is IgEy PresImItea - 4; a4ordAAMMMU t1i eUniffirm Guidance and CSR and/or the. applicable
yqu!reques't, wi.tionst . iture a s',cpmt&- engngeriimt that will be subject to our acceptance
..Any other �&.60,s that
procedures. Professional standards, laws, anti iggWations may -prescribe liraitado.n& on no.11-audit services we
:mayperfotm vithaut'ItnpaVMg ot)t indePeiideAcc-
Fees
Stondard billings
Opr'bffling for the services get forth ire this EII9a9O"P6nt Letter, which Will not exceed $951'500 with additional
I
out-of-pocket expenses no.t to exceed $5,000, will be rendered on an estimated basis in accordance with, the
wdosed Uhedulp of Standard'BillinV and are payable payable within 20 days of receipt.
General purpose financial audit
GASB 6.8 procedures
'Out oMcket
Biiiirr ..date
MarcIt 9,201-7
March 50"g017
l>til 15, 417
May 15,. 2017
Fees
$12,500 — SingleAuditprocedums
$25;000
X35,000
$88'000
7:500-
5,000
rfit appears tbat,t�e esti m.
ged fee will be etceeded, we will bring this to your attention,
1=10
us I 1=11�1.t Thornton f6ternaliaml Lid
-0 CrantThornton- $.
prom dme 3o drne, CS, CintThotnton may, receive cextain incentives in .the form of`bonuses and rewatds from
its corporate card and.othen vendors. Such incentives to the;extent received will be retained lay Grant Thgrnton
to. covet:tif l -ft expetisrs.
�dtiitiortaX ��gs. •
of,course, cirri mstances, may arise -that will require us to do more work. Some of the more conamon
&cutgl taitges inglgge ,cFaaging au!40ng, accounting; and repotiing rcetitaments from ptofessional and
rrgu72wiy bgdlcs; ixrcc+> rest a tSr t#sig &pglicatioris or errors itt• City reCords; se3t2%tn'ents; failure to furbish
accurate-and,complete sa atalllon to. us oma iimely'basis; and unfoxeseen w,�e.nts, including legal andxxegWatvey,
change.
We are, enclosing an.,6V3ar ation 'of.'vadous matters that can :cause us to perforin wotkin excess of that
otater RAW'�Y out1ft a,0t miete.
At Grant Thornton, ve pike purselves on our al ffV to provide outstanding service and meet our .clients'
deadlines. To:help. accomplish this goal, eve work hard to,have the tight professionals avallablg. This involves
complex: scheduling models -to lialancc the needs of our .clients and the utilization •of out people, particularly
during peak petiods ;of the•yeax. Last minute client requested scheduling changes resulvin costly downtime due
�t . our inability to make altm ate, arrangements for .our professional staff:
We will coordinate a qonyenit3n.k time.fgr Grant Thptnton to begin work. If; after scheduling our. work, you do
not provide .proper notice, which we consider.. to be one.Nveek,,of your inability to meet the agzeed-upon dates
:for any reason; or do :not provide us vrith ;sufficient information required to ,complete the work in a timely
manner, additional lailli3iigs will be rendered for any downtime of our professional staff.
Adoption of.new:aecoundxig standards
Professional and resJ+ulatoky bodies fke'quently issue new accounting standards and guidance. Sometimes,
standards are issued and become effective in the same -period, providing a lhnited,implementation phase and
preventing usTirom inclu>ling:the impact in our estimated fees. In such circumstances,,we will discuss with yoia
the additional audit procedures and related fees, including matters such as -the. retrospective application of
accouattirtg,ehanges.and.ciituxgss•in classificatiort.
Other costs
F,'icept with respect to,a dfspute or.iidgation between Grant Thornton and the City, out costs and tune spent
in legal and xegulatory matters or proceedings: arising from our engagement, such as subpoenas, testimony, or
consultation involving private litigation, arbitxation,.industry, or government regulatory inquiries, whether -made
at the City's •request or by subpoena, will be baled to the City separately.
Professional sta.adartia4mppse additional responsibilities regarding the reporting of illegal acts that have or may
,have:occurred. To fulfilLour.responsibilides, we-may:need to consult with the City's in-house counsel or counsel
of .our choosing about any illegal acts that we becornc aware of Additional fees, including legal fees, will ba
billed to the City. The City..agrees to ensure full coopetation with any procedures that we may, deem n'ecess'ary
to perfom7,
Cran:l trv�ntdn iCP.
,SIS.mSrnpriCnn 4hnt Nffdonlnler6ftwllld
GrantThornton
Qtfier�t~
'RdatioushiPit'o'Grant Thornton, Intern-Atimndl, Ltd
;07 xot Theraton -is; the U:$, Member -firm of Gt=t Thx?bs soh Intexnational Ltd ("GTIV7, an oiganizatiDa of
.indejrrendently owned swd•imanaged' accounting and consulting firms. References :to GM- ate to Grant.
nottiton. 1nre nadohaL.Ltd. MIL AAd the t'doir{bb'r firm's are 'riot a VprldxVide partnership. 'SOTY os iter
dr] v cetl i d pet delntly by: the xii rib r xms: These fame ndt�mewbex�-of one interhadonal.pattnekship
sis'otlxetsvts.legaiiaxtaiers �vikt each js onyonefrrnx.responsfb)e dor th'c scrviccs.-ox
actxAes of''any othei-flan.
paittytsaty ae proddets and a i][Wes
GlatitThr)i:luton may:usolhird-party service lirpviders, such as independent contractors,'specialists, orvendors;
to assist iti liroViilSt g our,_itofesstoival se:tvices. `We nay also use GTIL.tn aidtl a:firms,: othkit affiliates, includinx
Set�lces OierSndiaL toljmstp4 and thee Graticl homton US Khowwzoarid Capataq
Center ih d4:�',c%sta,te j,i'rAbi ;. Bates of Grath thvtAwn.locwd.in B"galore, India, ok othcr accoxini tg,
(stens SucEi;endiies may lie"Iocateci wltliin ox outside thWhited States:
'Gl*pl Thotntan; also.may=use tha: technology and resources of the following entities to -asst us as follows:
i Capital C6n'fitrri3 Inc. — cleakor& bank eobfit hation service's
`You hetgl y•consent and authorize, us to, disclose,Cityinforwg' n to. the: ab-ove named entities..
Acl,Ilit 9m2y; Grant 1%ornfori may use third -party service ptovidet3'to provide administrative or operational
support to Grant Thornton, or to provide engagement team resource servicas. Such entities may be located
within 'or outside the United States. All of these third party service providets are subject to confidentiality
obUptions to protect the:confidentiality of client data.
You, h.oebyconstnt and authorize us.•to disclose City ipformatign to the GT US Shared Services Coutes India
pjivaio jjrriiit'ed,and/ox *6 Grant Thornton US Knowledge and Capability Center India Private.Limited and
tho.othet above parned.en-tides for purposes of providing services, to you.
) eer,review report
, :�$ ttagutii- x that we pxovide you with a -copy of our most recent txietsniai quality control review:repoa
Accordll *g ' our 16y'31, 201411cer. Review Report-acts?brapariles the-Rogagemont Letter.
Ptivacy
Grant I`h'otatgn is cominined to protecting, personal information. We will maintain sack infattnatim in
eon&delict .its ac�wrdance witii professional standards and governing laws. Therefore, any personal information
provided to us. by -the., City will be. kept confideatial and riot disclosed to any third party unless expressly
permitted by -%eCity ox required Ery :law; regulation, legall px0cess, or professional standards. The City is
responsible,fo.robbinthgi-pursuani to'iav or regulation, consents hom parties that provided the. City with their
personal infq;rmatidn, which will be obtained, used, and disclosed by Grant Thornton for its required purposes.
"tt4�;�' `.."pl�.�ant'Thomlanlnlcrneponal'Ltd
'0
GrantThornto:n
10
Documentation
'Chit d, erita�on; 'for this el a ctnesat. is the prgpexry..of # Thornton and constitutes confidential
.ip,Ebtr`fiatlo'n,-We have a Yesponsibility to retain the documentation for a period of time sufficientlo satisfy -any
:applicable legal°or re lgtoty'regahgments for records,retentiou,
Pursuant to lawsor regulation, we may be requested to matte certain docutnenta m avaiistile to regulators,
v'etriruhOwades, or theit representatives (`ReVAtors",), If requested; access to t}ie-documentation will
be ptoc 14dd-;tts t ,XR�tors -under our; supd*Won. A)V+ tnay also prend :copies of•selccted documentation.,
which:tNt Regilatois:ay distribute: to: other governmental agencies or third ,parties. -bu hereby acknowledge
'we volt( allow :and.tauthozize u's :to allow the •Regulators access to, and copies of, the documt:ntaoon in this
manner.
-Electroiiic c+a#amunieations
T,7alg the uitsg of otrr ;gement, Vve anay.need`to-eleetroriicaily tjransinit cgnFtcfienpl'inFoxtnatiori:to each
,other:and to. thifd-patty service providers or,othec !entitles engaged :by eitheroGrant Thornton or the Citi
Elea Ironic methods ;include'tetephones, cell,phones,-e-ma ,,secuee-file transfers,use° of.SharePoint,sites,and
favi. Tliesri:tecltnol''og`i'es provide a fast and' cpctvetti'entvxmy to;commuaicate. However, `all f6=54,electronic
-to'rnrnuftiotion. have inherent security weaknesses, and !the -risk of'cUmprotra sed carnWobtixlity cannot be
46
ted, zIhC Ci to the use• of electronic methgds to transtnit:attsl receive Information, including
conficl:ittformation,
,Standards ofperformance
We will. perforhi .our 'services in confoollity with theterms expressly_ set forth. in this Engagement letter,
includiing all applied ble professional standards, Accordhigly, our seivices shall be evaluated solely on our
sull�Unfig�conformance with such terms and standards. Any claim of nonconformance must be clearly and
Convincingly shown;
With respect to the services and this.Engagement,Letter, in.no event shall the liability of Grant Thornton and
its present, future, and former p'artners, principals, directors, employees., agents, and contractors for any claim,
i4tolutiaag but notlittiited toGran tThoriiton's own -negligence, exceed the fees itteceivcs for the portion of the
VJ4r Villgyiise to such,liability, This 11i station shall,not apply to:.thc extent that itis finally determined that
any ,claims,:losscs, ox°damages are the result of Grant Thorn ton's, izeglipenee or willful misconduct, In
:addition,•Grant Thocaten shall not be liable for any special, consequential, incidental; or exemplary damages
or loss (noranyiost~profits, interest, taxes,. penal ties, loss of savings, or -lost isusincss opportunity} even if Grant
Thornton wv is advised in:advance of such -potential damages. This paragraph,and the paragraph directly below
;shall apply to any type of claim asserted, ineluding:coAtraCt, statute, to- t, -or strict liability, whether`by.ehe City,
Gran t Tliomton; or others.
Farther, the City shall, upon receipt of whtten.notice,,, indemnify and hold han*css Grant Thornton and its
p'tcsent, future, and former partners, principals, directors, employees, agents, and contractors frofn and against
any liability and damages (including punitive damages), fees, expenses, losses, demands, and costa (including
defense costs) associated with sing claim -arising from or tcladng to Lite Cilyrs,knawing misrepresentations or
Use oxincomplete�information provided to Grant Thornton. In the event of any controversy or claim against
'Grant 'Thornton arjsing from or related to the services. described herein, Grant Thornton shall be entitled to
defend :itself from such co.'ntmve`rsy dr claim and to participate in :any settlement, administrative, or ,judicial
proceedings,
P(ant"nvnt?n LW
U.S.mrmbt-Fim61Grantl Q(nl nWe.w6O el.L
:0 Gra:ntThornton
It is expressly�agreed by the Entity and Grant Thointon that arty claim,by, or on behalf of either party, wising
out•of services or tills Enga eincat Letter; whethexit lie in contract; tort„ or otherwise, shall be, deemed waived
-if a claim is asserted snore than two. (2) years from: (i the 4;e'of the teport(s) issued by Grant Thornton; or
(ii) ibe:date of this,- ngag ent Letter if norepol^Ch'as li kssued.
If 17ccauaer of a range in the Cup's status 'or'due t o any Other, reason, any provision in this •Engagdment tetter
would be prohibited by laws, regulations, or published.interprerations by governmental bodies, comzmi#;00s,
state boards of accountancy, or other regulatory aganeie: , such'provlsic>n shag to that extent, beofno further
forge and. effect, and the 190gagerrient Letter shall consist of the remaining portions.
Dispute resolution
;may c6,hgc;. y". claim iiosing.out of ox Xelatin to the servip s, related fees, or this Engagement Letter shall
!graz•be suwwd'ito rncdiatstsxt ,kinedlator wifi. >e selected by.agreement of'the'pardes, of if the parties canilot
egret%. a medlawe acceptable to all parties, mill° be appointed by the American Aitbitration Associaden
(`" ") . °Ihemodiation will praceetl:in ac rsi�tiatsec Et+ith the custvm2q practice -of me ati on. In tare unlikely
event -that any dispute or claim- cannot be -resolved by meduttion, we bath recognize .that the mattec.wilS_pzribably
involve complex business or accounting issues: that would 'be decided most equitably to us both by a judge
heasitzg the evidence without a jury. Accordingly, to the extent now or hereafter permitted by applicable lav,
thnw.0tyand Grant.Thoi tion agree'to waive oby right -to a trial by jury in any action, proceeding, or counterclaim
arWn& out of or reladng•to our services or this Eng°sgcrnent Leder.
If the above jurytxial-ivaivver is detetb-ined to be prohibited by applicable law, then the patties agree that tha-
dispute otelaftrt shall be.5ettled by -b tiding arbitration. The atbittadou proceeding shall take placc•in the city in
wMch the Grtnt'Thorntvn .office -providing the relevani services is located, unless the parties mutually agree to
a different location. The proceeding shall be governed by the provisions of the Federal Arbitration Act ('FAA')
sandwill proc¢ed,in accordance v }th the. then. current Arbitration Rules for Professional Accounting and belated
Disputes of the AAA,. except that pre -.hearing discovery must be specifically aLithoxi, d by the arbitrator.'1'he
arbitrator vAh be. selected from AAA, JAlvl*S, the Center for Public Resources, or any other internationally or
nationally-x&ogtuzed orgrzrtiaStioil fnutually agreed apon by the parties. Potential arbitrator. names will be
exchanger, withip.15, days, of -the pat;iW agxecWeut to settle the dispute or-claun by binding arbittatim and
arb teat ory will thereafter proceed. expeditiously:. 'The,.acbittation will be conducted before '--single arbitrator,
rxperienced in accounting and auditing matters. ne arbitrator shall have no authority to award non -monetary
or equitable relief and will scot have the right to award punitive damages. Thi: award of the arbitration shall be
in writing and shall •lie accompanied by a wc&reasoned opinion. The award issued by'the arbitrator may be
congrmedin ajudgment by any federal or state -court of -competent jurisdiction. Bach party shall be responsible
for their own costs associated with the arbitration, except -that the costs of the arbitrator shall be equally divided
by the patties. The atbitraddh proceeding acrd all information disclosed duting the arbitration shall be
maintained as confidential, except as may be required for disclosure'to professional or regulatory bodies. or in
a ,related •confidential arbitration; In no event shall a demand for arbitration be made after the date when
institution of legal or equitable -proceedings based on such claim would be barred under the applicable: statute
of limitations.
9rxa %hormion LLP
4'&mvpbh i-firm®t GY60Thoribn`IltermbonalLid
t
GrantTfhornton
12
Authorization
"Chis En$, gempt Letti r stets forth the entire unde4tanding betty-om the City and Grant Thornton regarding
,the N:t eos described ]herein and supersedcs an7'pcetrious proposals, correspondence, and understandings,
whetherwritten oz:oral. If any'portioniof this Eslgagemesn Letter is held itivdlid, it is agreed that such invalidity
.shall. not affect any o£'the rernaining portions,
Please congrai your acceptance of this Engagement Letter by signing below and returning one copy to, in
the' enclosed self-addressed efnvelope. In addition, please provide the signed copies of the Flugigement,Letter
to tlie, Cit}?S Finance Directiaz, Paul Bt cker, ln, order for managment to acknowledge the terms herein.
sincetely,
GRANT TKORN ON.I:LI?
ON
D`an°B=6n
' Farmer
t&- Paul Becker, Finance Director
Fnc: Maoris that can cause work in excess of fee estimate
May 31, 2014 Peer Review Report
-Agreed and accepted by.:
Date:. � . a 14 1
City
Managemen'e-s acknowledgment of the Engagement Letter by:
Ck
Paul Becker, Finance Director
iwnk Thornl n RlA
3?.S; m bw..�m Gi ONA?!pmioo IntefnaUmA lid
Date! �S �' ill
0 G--rai1tThornton 13
IUTATTERSfii4AT CAN CAUSE'WOMMEXCESS OF FEE ESTIMATE
We want, you to seeeive the maximum• value for ouvprofessionaLservices and to percdive: that our:4fecs are
reasonable and fair. Howevor; in set'king to I?X*91& you with,sueh value, we find there are various matters that
can,cause us to perform work in excess of that contemplated by our fee estimate: The following, explains the
matters that gtise rnost frequently:
C �p }lYg.. fi pirenients
T6,&—y, tberr, are numerous gavw=entai or M, -making hodia that regularly add or change various
regolmmWts, Althgge h it+e.,attempt to plan out viol to anticipate the req�tiretnents tliat will affeEt our
engagemefit, three "Os— of situea&ns make this =difficult, Sometimes, these new requirements are not
communicated inntime £err us to anticipate their effects in our preliminary planning Secondly, in spite of our
anti padon and plant b&the work necessary to cornplywith new requirements =maybe underestimated.-Nnally,
in some instances,you may cledde $a.t it is, advan6igeous to you, to have the. ivcw recja emmts supplied
immediately.
Incertectaueounting-4pplieations or errorrz in,your.tecords
We generally Fo-qn,our fee estimates on the expettatiora that your accounting recordsan. re goad order so that
our work, can be completed based upon -our normal testing and other pttrcudutes. However, should we fend
numerous enors, incomplete tecot ls, or disorgarm' ed .bookkeeping methods, we will have to da -additional
murk to determine that the necessary corrections have been made and properly reflected in the financial
statements.
Lack of audit far ilittttion or -timely preparation
'po nnit finite your costs; we plan the means by which your personnel can facilitate the audit (for example, what
schedules they will prepare, ;how to prepare them, the supporting documents that need to be provided, and so
forth). We also discuss matters such as availaWity of your key personnel, deadlines, and ;vofking conditions.
indeed, the 3nfo=ation concerning these matters that you furbish to us is a key element in our fee quotation.
Therefore, if your personnel are unable, -6r whatever reasons, to provide these materials on a timely basis, it
tnay substantially increase the work we must do tv, comm
plete.the engagement within the established deadlines.
moreover, m some circumstandc%-this mq fega3i� a staff wiil drawal, as discussedbelow.
Staff withdrawal y.
A staff withdrawal consists of our removing 4tie or all staff because the condition of your records, or the
inability of your' person iel' to provide agreed upon materials_ within the established timetable, makes it
impossible for us to perform 04-worlt•iri tr6hieiy,�.cf dent;rn tt4ct; as .est bl shcel by our enggsgeittent P1. I.
Sometimes, a complete staff withilawal zs.necas r to.pcirrat'ah axdidy audit approach. A -staff Athc1rAwal.is
not. nece660tly:ari. sdver' a ref tcdoh on yout petro tifeli`140'Wever, it involves additional casts, as we must
reschedule our personnel; incur additional start-up costs .and sn fortdi-to premt tot�l_engagcmcnt costs. from
increasing significantly.
GrseTatommn LRP
Uj,:mertbzr' of Grant Thornton IntemaGonad`L'td
GrantThornton U
JJW�DMS9011 Midst:
Evta -thoiigh we communicate: frequently with clients And plan out engagement with management and their
staff„ unforeseenevents can occur. Examples include accounting problems, litigation, changes in your business
or business ehvironmentcontractual or other difficuldgs with suppliers, third -party service providers, or
cus , tornep) and so forth. When those dtO*tanti!s,Qc4Vr, additional time js needed -to provide you with
assistance and to complete .our engagement in Azoor4anc.c -with professional standards.
Now aw=d ptogp&is of program noncompliance
0 ;�M!� aw with A fee CsA*kt" w that =1jorvArernain relatively consistent t.hp4ot
wan. When iiewt;vards are received, ftThayrcjuireustoaudit addtioAdprogtms to at: the gk�iprop*te
teeing - Vii«. Ip such tkcqW#At%qs, additional fees my be intaorrod beyond what was previously
is 4 , - g WV4V-
coANI#PlAQ. Furthermom if the results of our procedures identify material Program noncomoiance or
internal control deficieacieA, w"- require,extensive research ox4ismssions with the cognizant, oversight, or
fqndingL#gbficy,,an apanslotil of but Audit scope and adft-6nal audit fees may -result.
:AVdn. we mphmin thatw1u.,foro aur iccS.Fee9pota quotations
provided based-upon4he facts and circumstances that you desciibe to us. However, tui&e the sale of products,
the per,forrdanec of professional services is affected by many variables, such as tbe,foregoing, which tatty cause
fee e tjrnakes,.tp,--ObAn&e.
C,.t&M nomlM LLP
rvontlhomtw Udemaftai Ltd
910 E, St. Louis Street, Suite 200 H P.O. Box 1190./I Springfield, MO 65801-11'90
0 4.17.86S.9701-11 fax 417,%5 -MH bkd.com
J 7—
System Review Report
To the pd>Eiiters-of
-Grant'rhor"nton LLP
and t11e National Pdei• review Committee
of the American %gtitute of -Certified
pudic Aces witants poerRoviow Board
We liave i5eVzew.ed the system•of quality control for the accounting and auditing practice of Grain
Thornton LLP-(thc firm), applicable to engagements not subject to PCAOJ3 permanent inspection in effect
forthuyear ended IYlay 3 t, 2014. Our peer review was voudwcted in agoor¢ance wri1h the Standards:far
Performing.wid Rcpprting on Peer.Reviews established by the -Peer Review Board of the American
I1lstitwte of Certdiiecl Public Accotiritanis. As a pAr[.of our peer review, we considered reviews by
regulatory entities;.ifapplicable, in detei=ring the nature and extent of oar procedures. The £irtn is
respansil le'for d€isigning a syst6lia of'gtrality control and complying with it to provide the firm with
remunble €rssur.once.of performling ireporting.,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
cdhtrol uiid the fuyn.'s .compliance therewith based on our review. The nature, objectives; scope,
Jirnitatisons of -and the procedures performed in a System Review are,described in the,standards at
,,,_www aielzaori*Jprstr _ 'tnsll�. •
A5 regttii WW*0 for review included..=gagemerits-�perfonned under
oveYitnretrt>IvdFtFn ; i `turrdrnds3'dudits
ofemployee bonefit plans, audits performed -ander FDIC -It",
audits of oarrying-brokor-dealers and examinations ofseivice organizations [Service Qrgaoizations
Control (SOC) I engagements.]
Id our opinion, the system of quality control for the accounting and auditing practice of Grant Thornton
P applicable to:engagerrxents: not subject to P60D pen.nomeAt lnspeo#lon in effeeffor the year ended
May 31, 2114, has been.suitably dosi&ned and complied With tp providetlie firmwltl'< reasonable
assurance ofperf6rmirtg and reporting.in conformity with applicable professional standards in 611 material
respepts.. Firms can, receive a rating ofpms, pass with deficlency(W) or fall. Grant Thornton LLP has
received 4 peer review rating of pass.
-FK,P, .1, ap
December 1, 2014
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