HomeMy WebLinkAbout81-20 RESOLUTIONOF fAV EETE
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4gKANS PS
113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Resolution: 81-20
File Number: 2020-0143
BKD, LLP:
A RESOLUTION TO AUTHORIZE MAYOR JORDAN TO SIGN AN ENGAGEMENT LETTER
WITH BKD, LLP AND PAY AN AMOUNT NOT TO EXCEED $112,770.00 FOR AUDITING
SERVICES FOR THE 2019 AUDIT
WHEREAS, on December 5, 2017, the City Council passed Resolution No. 254-17 which authorized a
one-year contract with four annual automatic renewals with BKD, LLP for auditing services; and
WHEREAS, BKD, LLP has presented an engagement letter describing the services to be provided in
the third year of this contract that requires Mayor Jordan's signature.
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 Mayor Jordan to sign the
engagement letter attached to this Resolution confirming the terms of the City's continued engagement
of BKD, LLP and further authorizes a payment in an amount not to exceed $112,770.00 for auditing
services for the 2019 audit.
PASSED and APPROVED on 3/4/2020
Page 1 Printed on 314120
File Number. 2020-0143
Resolution 81-20
Attest:
R K
GI T Y
Kara Paxton, City Clerk Treasur
9P
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6 of 16Y�1e `'`�O
Page 2 Printed on 314120
City of Fayetteville, Arkansas 113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Text File
File Number: 2020-0143
Agenda Date: 3/3/2020 Version: 1 Status: Passed
In Control: City Council Meeting File Type: Resolution
Agenda Number: A. 9
BKD, LLP:
A RESOLUTION TO AUTHORIZE MAYOR JORDAN TO SIGN AN ENGAGEMENT LETTER WITH
BKD, LLP AND PAY AN AMOUNT NOT TO EXCEED $112,770.00 FOR AUDITING SERVICES
FOR THE 2019 AUDIT
WHEREAS, on December 5, 2017, the City Council passed Resolution No. 254-17 which authorized a
one-year contract with four annual automatic renewals with BKD, LLP for auditing services; and
WHEREAS, BKD, LLP has presented an engagement letter describing the services to be provided in the third
year of this contract that requires Mayor Jordan's signature.
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 Mayor Jordan to sign the engagement
letter attached to this Resolution confirming the terms of the City's continued engagement of BKD, LLP and
further authorizes a payment in an amount not to exceed, $112,770.00 for auditing services for the 2019 audit.
City of Fayetteville, Arkansas
Page 1
Printed on 31412020
City of Fayetteville Staff Review Form
2020-0143
Legistar File ID
3/3/2020
City Council Meeting Date - Agenda Item Only
N/A for Non -Agenda Item
Marsha Hertweck 2/14/2020 ACCOUNTING & AUDIT (131)
Submitted By Submitted Date Division / Department
Action Recommendation:
Approval of the third year of a five year contract with BKD, LLP for annual audit services for the City's 2019 financial
audit.
Budget Impact:
various
Account Number
Project Number
Budgeted Item?, Yes
Current Budget
Funds Obligated
Current Balance
Does item have a cost? Yes Item Cost
Budget Adjustment Attached? NA Budget Adjustment
Remaining Budget
Fund
Project Title
$ 112,700.00
$ -
$ 112,700.00
$ 112,700.00
V20180321
Purchase Order Number: Previous Ordinance or Resolution #
Change Order Number: Approval Date:
Original Contract Number:
Comments:
CITY OF
CA FAYETTEVILLE
ARKANSAS
MEETING OF MARCH 3, 2020
TO: Mayor and City Council
FROM: Marsha Hertweck, Accounting Director
DATE: February 14, 2020
SUBJECT: BKD, LLP contract
CITY COUNCIL MEMO
RECOMMENDATION:
Approval of the third year of a five year contract with BKD,LLP for annual audit services for the
City's 2019 financial audit.
BACKGROUND:
The City is required by Arkansas statutes to have an annual financial audit by either Legislative
Audit or a Certified Public Accounting firm licensed in Arkansas. Because of the requirements of
the City's bond indentures, the City has utilized the services of a private CPA firm to perform
these mandated financial audits.
BKD,LLP 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 2017 audit. Under
the contract BKD 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, BKD will issue a report on
compliance for the City's major federal awards programs and on internal controls over
compliance as required by the Uniform Guidance. The Uniform Guidance program is the
primary mechanism used by federal agencies to ensure accountability for federal awards to
non-federal entities.
Finally, BKD 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.
DISCUSSION:
Staff is recommending approval of the contract with BKD,LLP for auditing services for the 2019
annual audit. The third year of the contract with BKD has maximum fees of $107,700. There is
an additional fee for implementing GASB Standard 84 in 2019 of up to $5,000.
Mailing Address:
113 W. Mountain Street www.fayetteville-ar.gov
Fayetteville, AR 72701
BUDGET/STAFF IMPACT:
The cost of the 2019 audit is a maximum of $112,770. The audit has been budgeted in the
various funds of the City in the 2020 budget.
Attachments:
Staff Review form
City Council Memo
Original Contract
BKD,LP 809 S. SNd Street, Saito A// P.O. Box 1893 H Rogers, Aft 72757.1893
CPAs & Advisors 479.845.02;'G//fax479.845.00wiO/ibkd.com
January 31, 2020
City Council
Lioneld Jordan, Mayor
Paul Becker, Chief Financial Officer
City of Fayetteville, Arkansas
113 W. Mountain Street
Fayetteville, AR 72701
We are pleased to confn-nn the arrangements of our engagement and the nature of the services we
will provide to City of Fayetteville, Arkansas (the City).
ENGAGEMENT OBJECTIVES AND SCOPE
We will audit the basic financial statements of the City as of and for the year ended
December 31, 2019, and the related notes to the financial statements.
Our audit will be conducted with the objectives of:
✓ Expressing an opinion on the financial statements.
✓ Issuing a report on your compliance based on the audit of your financial statements.
✓ Issuing a report on your internal control over fmanncial reporting based on the audit of your
financial statements.
✓ Expressing an opinion on your compliance, in all material respects, with the types of
compliance requirements described in the U.S. Office ofManagemerrt mid Budget (OMB)
Compliance Supplement that are applicable to each of your major federal award programs.
✓ Issuing a report on your internal control over compliance based on the audit of your compliance
with the types of compliance requirements that are applicable to each of your major federal
award programs.
✓ Issuing a report on your schedule of expenditures of federal awards.
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City Council
Lioneld Jordan, Mayor
Paul Becker, Chief Financial Officer
City of Fayetteville, Arkansas
Page 2
OUR RESPONSIBILITIES
We will conduct our audit in accordance with auditing standards generally accepted in the United
States of America (GARS), the standards applicable to financial audits contained in Government
Auditing Standards issued by'the Comptroller General of the United States and Title 2 U.S. Code
of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principle_r,
and Audit Requirements for Federal Awards (Uniform Guidance). Those standards require that
we plan and perform:
✓ The audit of the financial statements to obtain reasonable rather than absolute assurance about
whether the financial statements are flee of material misstatement, whether caused by fraud or
error.
The audit of compliance with the types of compliance requirements described in the OMB
Compliance Supplement applicable to each major federal. award program to obtain reasonable
rather than absolute assurance about whether noncompliance having a. direct and material effect
on a major federal award program occurred.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to error or fraud. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
Because of the inherent limitations of an audit, together with the inherent limitations of internal
control, an unavoidable risk that some material misstatements or noncompliance having a direct
and material effect may not be detected exists, even though the audit is properly planned and
performed in accordance with GAAS.
In making our risk assessments, we consider internal control relevant to the entity's preparation
and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. However, we will communicate to you in writing
concerning any significant deficiencies or material weaknesses in internal control relevant to the
audit of the financial statements that we have identified during the audit. Also, in the future,
procedures could become inadequate because of changes in conditions or deterioration in design
or operation. Two or more people may also circumvent controls, or management may override
the system.
City Council
Lioneld Jordan, Mayor
Paul Becker, Chief Financial Officer
City of Fayetteville, Arkansas
Page 3
We are available to perform additional procedures with regard to fi-aud detection and prevention
at your request, subject to completion of our normal engagement acceptance procedures. The
actual terns and fees of such an engagement would be documented in a separate letter to be
signed by you and BKD.
David Coleman, Partner is responsible for supervising the engagement and authorizing the
signing of the report or reports.
We will issue a. written report upon completion of our audit of the City's financial statements.
Our report will be addressed to the City Council of the City of Fayetteville, Arkansas. You are
responsible to distribute our reports to other officials who have legal oversight authority or those
responsible for acting on audit findings and reconunendations, and to others authorized to
receive such reports. We cannot provide assurance that an unnnodifred opinion will be
expressed. 'Circumstances may arise in which it is necessary for us to modify our opinion, add
an emphasis of matter or other matter paragraph(s), or withdraw from the engagement. If we
discover conditions that may prohibit us from issuing a standard report, we willnotify you as
well. In such circumstances, fin -flier arrangements may be necessary to continue our
engagement.
We will also express an opinion on whether the City's combining and individual fund statements
and schedules, and the schedules of expenditures of federal and state awards ("supplementary
information") are fairly stated, in all material respects, in relation to the financial statements as a
whole.
YOUR RESPONSIBILITIES
Our audit will be conducted on the basis that management acknowledge and understand that they
have responsibility:
1. For the preparation and fain presentation of the financial statements in accordance
with accounting principles generally accepted in the United States of America;
2. For the design, implementation and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error;
3. For identifying and ensuring compliance with the laws, regulations, contracts and
grants applicable to your activities (including your federal award programs); and
City Council
Lioneld Jordan, Mayor
Paul Becker, Chief Financial Officer
City of Fayetteville, Arkansas
Page 4
4. To provide us with:
a. Access to all information of which management is aware that is relevant to the
preparation and fair presentation of the financial statements such as records,
documentation and other matters;
b. Additional -information that, we may request from management for the pin -pose
of the audit; and
c. Unrestricted access to persons within the entity from whom we determine it
necessary to obtain audit. evidence.
As part of our audit process, we will request from management written confirmation
acknowledging certain responsibilities outlined in this engagement letter and conflming:
The availability of this information
Certain representations made during the audits for all periods presented
The effects of any uncorrected misstatements, if any, resulting from errors or fraud
aggregated by us during the current engagement and pertaining to the latest period
presented are immaterial, both individually and in the aggregate, to the financial
statements taken as a whole
The results of our tests of compliance and internal control over fnnancial reporting performed in
connection with our audit of the financial statements may not fully meet the reasonable needs of
report users. Management is responsible for obtaining audits, examinations, agreed-upon
procedures or other engagements that satisfy relevant legal, regulatory or contractual
requirements or fully meet other reasonable user needs.
With regard to supplementary information:
• Management is responsible for its preparation in accordance with applicable criteria
• Management will provide certain written representations regarding the supplementary
information at the conclusion of our engagement
• Management will include our report on this supplementary information in any
document that contains this supplementary information and indicates we have
reported on the supplementary information
• Management will make the supplementary information readily available to intended
users if it is not presented with the audited financial statements
City Council
Lioneld Jordan, Mayor
Paul Becker, Chief Financial Officer
City of Fayetteville, Arkansas
Page 5
OTHER SERVICES
The City's Compliance with Certain State Acts
We will examine management's written assertion that the City complied with certain state acts
during the year ended December 31, 2019.
The objective of our examination is the expression of an opinion in a written report about
whether the responsible party's assertion is fairly stated, in all material respects, with the
applicable criteria against which it is measured or evaluated.
The criteria to be used consist of the requirements of Arkansas Act 15 of 198.5 and the following
Arkansas statutes:
1. Arkansas Municipal Accounting Law of 1973, § 14-59-101 et seq.;
2. Arkansas District Courts and City Courts Accounting Law, § 16-10-201 et seq.;
3. Improvement contracts, §§ 22-9-202 — 22-9-204;
4. Budgets, purchases, and payrnents'of claims, etc., § 14-58-201 et seq. and § 14-58-301
et seq.;
5. Investment of public fiends, § 19-1-501 et seq.; and
6. Deposit of public finds, §§ 19-8-101-19-8-107.
We will conduct our examination in accordance with attestation standards established by the
American Institute of Certified Public Accountants. Those standards require that we plan and
perform the examination to obtain reasonable, rather than absolute, assurance about whether the
subject matter as measured or evaluated against the criteria is free of material misstatement.
Because of the inherent limitations of an examination engagement, together with the inherent
limitations of internal control, an unavoidable risk that some material misstatements may not be
detected exists, even though the examination is properly planned and performed in accordance
with the attestation standards.
Our engagement will not include a detailed examination of every transaction and cannot be relied
on to disclose all errors, fraud or illegal acts that may exist. However, we will inform you of any
such matters, if material, that come to our attention.
We cannot provide assurance that an unmodified opinion will be expressed. Circumstances may
arise in which it is necessary for us to modify our opinion or withdraw fiom the engagement. If
we discover conditions which may prohibit us fiom issuing a standard examination report, we
will notify you. In such circumstances, further arrangements may be necessary to continue our
engagement.
City Council
Lioneld Jordan, Mayor
Paul Becker, Chief Financial Officer
City of Fayetteville, Arkansas
Page 6
To facilitate our engagement, management is responsible for providing a written assertion about
the measurement or evaluation of the subject matter against the criteria, supplying us with all
necessary information and for allowing us access to personnel to assist in performing our
services. It should be understood that management is responsible for the accuracy and
completeness of these items, for the subject matter and the written assertion(s) referred to above
and for selecting and determining the appropriateness of the criteria.
At the conclusion of our engagement, management will provide to us a. letter confuming these
responsibilities, whether it is aware of any material misstatements in the subject matter or
assertion, and that it has disclosed all known events subsequent to the period (or point in time) of
the subject matter being reported on that would have a material effect on the subject matter or
assertion.
Management is responsible for establishing and maintaining effective internal control over
financial reporting and setting the proper tone; creating and maintaining a culture of Honesty and
high ethical standards; and establishing appropriate controls to prevent, deter and detect fraud
and illegal acts. Management is also responsible for identifying and ensuring compliance with
the laws and regulations applicable to your activities and for establishing and maintaining
effective internal control over compliance.
We may perform other services for you not covered by this engagement letter. You agree to
assume full responsibility for the substantive outcomes of those services, including any findings
that may result. You also acknowledge that those services are adequate for your purposes and
that you will establish and monitor the performance of those services to ensue that they meet
management's objectives. Any and all decisions involving management responsibilities related
to those services will be made by you, and you accept full responsibility for such decisions. We
understand that you will designate a management -level individual to be responsible and
accountable for overseeing the performance of those services, and that you will have determined
this individual is qualified to conduct such oversight.
ENGAGEMENT FEES
The fee for our services will be $107,770. The additional fee for implementing new standards
will be $2,000-5,000, based on time expended.
Our pricing for this engagement and our fee structure are based upon the expectation that our
invoices will be paid promptly. We will issue progress billings during the course of our
engagement, and payment of our invoices is due upon receipt. Interest will be charged on any
unpaid balance after 30 days at the rate of 10% per annum, or as allowed by law at the earliest
date thereafter, and highest applicable rate if less than 10%.
City Council
Lioneld Jordan, Mayor
Paul Becker, Chief Financial Officer
City of Fayetteville, Arkansas
Page 7
Our fees are based upon the understanding that your personnel will be available to assist us.
Assistance from your personnel is expected to include:
• Preparing audit schedules to support all significant balance -sheet and certain other
accotunts
• Responding to auditor inquiries
• Preparing audit confirmation and other letters
• Pulling selected invoices and other documents from files
• Helping to resolve any differences or exceptions noted
We will provide you with a. detailed list of assistance and schedules required and the date such
assistance and schedules are to be provided before the audit begins. All schedules should be
provided in electronic form unless indicated otherwise.
Our timely completion of the audit depends on you timely and accurate schedule and analyses
preparation and on the availability of you personnel to provide other assistance. If there are
inaccuracies or delays in preparing this material, or if we experience other assistance difficulties
that add a significant amount of time to our work, our fees will increase.
Our engagement fee does not include any time for post -engagement consultation with your
personnel or third parties, consent letters and related procedures for the use of our reports in
offering documents, inquiries from regulators or testimony or deposition regarding any
subpoena. Charges for such services will be billed separately.
Our fees may also increase if our duties or responsibilities are increased by rulemaking of any
regulatory body or any additional new accounting or auditing standards.
If our invoices for this or any other engagement you may have with BKD are not paid within 30
days, we may suspend or terminate our services for this or any other engagement. In the event
ouu work is suspended or terminated as a result of nonpayment, you agree we will not be
responsible for any consequences to you.
IMPLEMENTATION OF FIDUCIARY ACTIVITIES STANDARD
Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities, is effective
for fiscal years beginning after- December 15, 2018, with retrospective application in the year the
update is first applied. The Statement is expected to significantly change how entities evaluate
and report fiduciary activities.
City Couuncil
Lioneld Jordan, Mayor
Paul Becker, Chief Financial Officer
City of Fayetteville, Arkansas
Page 8
Our fees as a result of the adoption of the Standard will be based on time expended and will vary
based on the level of assistance and procedures required. We willneed input and assistance from
the accounting department throughout the process of implementation.
OTHER ENGAGEMENT MATTERS AND LIMITATIONS
BKD is not acting as your municipal advisor under Section 15B of the Securities Exchange Act
of 1934, as amended. As such, BKD is not recommending any action to you and does not owe
you a fiduciary duty with respect to any information or communications regarding municipal
financial products or the issuance of municipal securities. You should discuss such information
or communications with any and all internal or external advisors and experts you deem
appropriate before acting on any such informationn or material provided by BKD.
Our workpapers and documentation retained in any form of media for this engagement are the
property of BKD. We can be compelled to provide information under legal process. In addition,
we may be requested by regulatory or enforcement bodies to snake certain workpapers available
to them pursuant to authority granted by law or regulation. You agree that we have no legal .
responsibility to you in the event we provide such documents or information.
You agree to indemnify and hold harmless BKD and its personnel from any claims, liabilities,
costs and expenses relating to our services under this agreement attributable to false or
incomplete representations by management, except to the extent determined to have resulted
from the intentional or deliberate misconduct of BKD personnel.
You agree that any dispute regarding this engagement will, prior to resorting to litigation, be
submitted to mediation upon written request by either panty. Both parties agree to try in good
faith to settle the dispute in mediation. The American Arbitration Association will administer
any such mediation in accordance with its Commercial Mediation Rules. The results of the
mediation proceeding shall be binding only if each of us agrees to be bound. We will share any
costs of mediation proceedings equally.
Either of us may terminate these services at any time. Both of us must agree, in writing, to any
fixture modifications or extensions. If services are terminated, you agree to pay us for time
expended to date. In addition, you will be billed travel costs and fees for services from other
professionals, if any, as well as an administrative fee of 4°/a to cover items such as copies,
postage and other delivery charges, supplies, technology -related costs such as computer
processing, software licensing, research and library databases and similar expense iterns.
City Council
Lioneld Jordan, Mayor
Paul Becker, Chief Financial Officer
City of Fayetteville, Arkansas
Page 9
If any provision of this agreement is declared invalid or unenforceable, no other provision of this
agreement is affected and all other provisions remain in full force and effect.
This engagement letter represents the entire agreement regarding the services described herein
and supersedes all prior negotiations; proposals, representations or agreements, written or oral,
regarding these services. It shall be binding on heirs, successors and assigns of you and BKD.
We may from time to time utilize thud -party service providers, e.g., domestic software
processors or legal counsel, or disclose confidential information about you to thud -party service
providers in serving your account. We remain committed to maintaining the confidentiality and
security of your information. Accordingly, we maintain internal policies, procedures and
safeguards to protect the confidentiality of your information. In addition, we will secure
confidentiality agreements with all service providers to maintain the confidentiality of your
information. In the event we are unable to secure an appropriate confidentiality agreement, you
will be asked to provide your consent prior to the sharing of your confidential information with
the third -party service provider.
You agree to assume full responsibility for maintaining your original data and records and that
BKD has no responsibility to maintain this information. You agree you will not rely on BKD to
provide hosting, electronic security or backup services, e.g., business continuity or disaster
recovery services, to you unless separately engaged to do so. You understand that your access to
data, records and information fioim BKD's servers, i.e., BKDcomnect, can be terminated at any
time and you will not rely on using this to host your data and records.
We will, at our discretion or upon your request, deliver financial or other confidential
information to you electronically via email or other mechanism. You recognize and accept the
risk involved, particularly in email delivery as the internet is not necessarily a secure medium of
communication as messages can be intercepted and read by those determined to do so.
You agree you will not modify these documents for internal use or for distribution to thud
parties. You also understand that we may on occasion send you documents marked as draft and
understand that those are for your review purpose only, should not be distributed in any way and
should be destroyed as soon as possible.
The entity may wish to include our reporton these financial statements in an exempt offering
document. The entity agrees that the aforementioned auditor's report, or reference to our firm,
will not be included ill any such offering document without notifying us. Any agreement to
perform work in connection with an exempt offering document, including providing agreement
for the use of the auditor's report in the exempt offering document, will be a separate
engagement.
City Council
Lioneld Jordan, Mayor
Paul Becker, Chief Financial Officer
City of Fayetteville, Arkansas
Page 10
Any exempt offering document issued by the entity with which we are not involved will clearly
indicate that we are not involved by including a disclosure such as, "BKD, 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. BKD, LLP,
also has not performed any procedures relating to this offering document."
You agree to notify its if you desire to place these financial statements or our report thereon
along with other information, such as a. report by management or those charged with governance
on operations, financial summaries or highlights, financial ratios, etc., on an electronic site. You
recognize that we have no responsibility as auditors to review information contained in
electronic sites.
Any time you intend to reference our firm name in any manner in any published materials,
including on an electronic site, you agree to provide us with draft materials for our review and
approval before publishing or posting such information.
BKD is a registered limited liability partnership under Missouri law. Under applicable
professional standards, partners of BKD, LLP have the same responsibilities as do partners in a
general accounting and consulting partnership with respect toconfommnce by themselves and
other professionals ii BKD with their professional and ethical obligations. However, unlike the
partners in a general partnership, the partners in a registered limited liability partnership do not
have individual civil liability, directly or indirectly, including by way of indemnification,
contribution, assessment or otherwise, for any debts, obligations or liabilities of or chargeable to
the registered limited liability partnership or each other, whether arising in tort, contract or
otherwise.
Government Auditing Standards require that we provide you with a copy of our most recent
external peer review report and any letter of continent, and any subsequent peer review reports
and letters of comment received during the period of the contract. Our most recent peer review
report accompanies this letter.
Please sign and return the attached copy of this letter to indicate your acknowledgement of, and
agreement with, the arrangements for our audit of the financial statements including our
respective responsibilities. If the signed copy you return to its is in electronic form, you agree
that such copy shall be legally treated as a "duplicate original" of this agreement.
BKD, LLP
City Council
Lioneld Jordan, Mayor
Paul Becker, Chief Financial Officer
City of Fayetteville, Arkansas
Page 11
Acknowledged and agreed to on behalf of
Cl
Dr
BY
Paul Becker, Chief Financial Officer
V
DATE J—OJ—aOX
Enclosure
6""7Nw' P &N8550 United Plaza Blvd., Ste. 1001 — Baton Rouge, LA 70809
225-922-4600 Phone — 225-922-4611 Fax — pncpa,ccun
Posttethwaite & Nettervilte Postlethrvaite & Notterville and Associates, L.L.C.
Report on the Firm's System of Quality Control
To the Partners of
BKD,. LLP
and the National Peer Review Committee
We have reviewed the system of quality control for the accounting and auditing practice of BKD, LLP (the firm)
applicable to engagements not subject to PCAOB inspection in effect for the year ended May 31, 2017. 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 (Standards).
A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as
described in the Standards may be found at www.aicoa.ortr/prsuumnarv. The sunmtary also includes an explanation
of snow engagements identified as not performed or reported in conformity with applicable professional standards, if
any, are evaluated by a. peer reviewer to determine a peer review rating.
Firm's Responsibility
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. The firm is also responsible for evaluating actions to promptly remediate engagements deemed as not
performed or reported in conformity with professional standards, when appropriate, and for remediating weaknesses
in its system of quality control, if any.
Peer Reviewer's Responsibility
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.
Required Selections and Considerations
Engagements selected for review included engagements performed under GoveminentAuditirng Standards, including
compliance audits under Single Audit Act; audits of employee benefit plans, audits performed under FDICIA, an
audit of carrying broker-dealers, and examinations of service organizations [SOC I and SOC 2 engagements].
As pail of our peer review, we considered reviews by regulatory entities as communicated to the firm, if applicable,
in determining the nature and extent of our procedures.
Opinion
In our opinion, the system of quality control for the accounting and auditing practice of BKD, LLP applicable to
engagements not subject to PCAOB inspection in effect for the year ended May 31, 20417, 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. Finns can receive a rating of pass, pass with
defrciency(ies) or, fail. BKD, LLP has received a peer review rating of pars.
Baton Rouge, Louisiana
October 6, 2017