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HomeMy WebLinkAbout86-21 RESOLUTIONpF FAYETTP ii cl Jo��ll \AY'�m 9RK4NSPS 113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Resolution: 86-21 File Number: 2021-0139 BKD, LLP: A RESOLUTION TO AUTHORIZE MAYOR JORDAN TO SIGN AN ENGAGEMENT LETTER WITH BKD, LLP AND PAY AN AMOUNT NOT TO EXCEED $124,440.00 FOR AUDITING SERVICES FOR THE 2020 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 fourth 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 I.: 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 $124,440.00 for auditing services for the 2020 audit. PASSED and APPROVED on 3/16/2021 Page 1 Printed on 3117121 Resolution: 86-21 File Number. 2021-0139 Approve Attest: ```��� ► r rti��i G� ART FAY Lioneld Jo an, Ma Kara Paxton, City Clerk Treasurer :� y /O'J' CO�,N` Page 2 Printed on 3117121 City of Fayetteville, Arkansas 113 West Mountain Street \ Fayetteville, AR 72701 (479)575-8323 Text File / File Number: 2021-0139 Agenda Date: 3/16/2021 Version: 1 Status: Passed In Control: City Council Meeting File Type: Resolution Agenda Number: A.3 BKD, LLP: A RESOLUTION TO AUTHORIZE MAYOR JORDAN TO SIGN AN ENGAGEMENT LETTER WITH BKD, LLP AND PAY AN AMOUNT NOT TO EXCEED $124,440.00 FOR AUDITING SERVICES FOR THE 2020 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 fourth 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 $124,440.00 for auditing services for the 2020 audit. City of Fayetteville, Arkansas Page 1 Printed on 311712021 City of Fayetteville Staff Review Form 2021-0139 Legistar File ID 3/16/2021 City Council Meeting Date - Agenda Item Only N/A for Non -Agenda Item Marsha Hertweck ACCOUNTING & AUDIT (131) Submitted By Submitted Date Division / Department Action Recommendation: 2/18/2021 Approval of the fourth year of a five year contract with BKD,LLP for annual audit services for the City's 2020 financial audit. various funds Account Number Project Number Budgeted Item? Yes Does item have a cost? Yes Budget Adjustment Attached? No Budget Impact: Current Budget Funds Obligated Current Balance Item Cost Budget Adjustment Remaining Budget Fund V20180321 Purchase Order Number: Previous Ordinance or Resolution # Change Order Number: Original Contract Number: Comments: Approval Date: 4_1CITY OF FAYETTEVILLE ARKANSAS MEETING OF MARCH 16, 2021 TO: Mayor and City Council FROM: Marsha Hertweck, Accounting Director DATE: February 18, 2021 SUBJECT: BKD, LLP contract CITY COUNCIL MEMO RECOMMENDATION: Approval of the fourth year of a five-year contract with BKD, LLP for annual audit services for the City's 2020 financial audit. BACKGROUND/DISCUSSION 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. The City's bond indentures require the City to utilize the services of a private CPA firm to audit the financial statements. 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 the 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 nonfederal 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 other statistical information. Staff is recommending approval of the contract with BKD, LLP for auditing services for the 2020 annual audit. The fourth year of the contract with BKD has a maximum fee of $112,440. The engagement also includes up to $12,000 additional fees due to the implementation of a new GASB standard and the additional audit work for the Single Audit due to the Cares Act funding from the Federal Government. Mailing Address: 113 W. Mountain Street www.fayetteville-ar.gov Fayetteville, AR 72701 BUDGET/STAFF IMPACT: The cost of the 2020 audit is a maximum of $124,440. The audit has been budgeted in various funds of the City in the 2021 approved budget. Attachments: Staff Review form City Council Memo Engagement Letter BKOLLP 809 S. 57.nd Succr. SMw A // P,C7. Box !f19Rr.>�_rrs. AR /1.15/.1893 CPAs & Advisors Q Al is%1 .c210 // lax 47V.8<15.08i10 // bkd.com February 17, 2021 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 confirm 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, 2020, 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 financial 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 of Management and 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. Praxify': aernrnFn :,o,:, zn ia!:•1 u, 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 (GAAS), 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 Principles, 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 free 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 fraud detection and prevention at your request, subject to completion of our normal engagement acceptance procedures. The actual terms 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 recommendations, and to others authorized to receive such reports. 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, 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 will notify you as well. In such circumstances, further arrangements may be necessary to continue our engagement. We will also express an opinion on whether the City's combining 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 fair 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 purpose 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 confirming: 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 financial 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, 2020. 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 1985 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 payments of claims, etc., § 14-58-201 et seq. and § 14-58-301 et seq.; 5. Investment of public funds, § 19-1-501 et seq.; and 6. Deposit of public funds, §§ 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 from the engagement. If we discover conditions which may prohibit us from 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(3) 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 confirming 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. Electronic Submission We will also complete the auditee portion of the Form SF -SAC (Data Collection Form) through the Federal Audit Clearinghouse. We will not make the submission on your behalf. You will review a draft(s) of the submission prior to transmission and agree that you are solely responsible for approving the final draft for transmission as well as for the auditee submission and certification. We may perform other services for you not covered by this engagement letter. You agree to assume full responsibility for the substantive outcomes of the services described above and for any other services that we may provide, 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 ensure 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 under3tand 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. City Council Lioneld Jordan, Mayor Paul Becker, Chief Financial Officer City of Fayetteville, Arkansas Page 7 ENGAGEMENT FEES The base fee for our services will be $112,440. The expected additional fee for implementing GASB 84 and additional work related to COVID, including auditing an additional major program subject to Single Audit due to CARES act funding, will be $2,000-12,000, based on time expended. 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 accounts • 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 your timely and accurate schedule and analyses preparation and on the availability of your 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 fees do not consider additional efforts related to the SARS-CoV-2 virus and the incidence of COViD-19 environment and the impact of accounting and auditing issues such as: collectibility of receivables, inventory valuation, compliance with debt agreements, modification of lease terms, additional major programs subject to Single Audit, etc. Such amounts will be billed 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 8 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 our 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 reporting periods beginning after December 15, 2019, 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. 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 will need 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 information 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 make 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. City Council Lioneld Jordan, Mayor Paul Becker, Chief Financial Officer City of Fayetteville, Arkansas Page 9 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 party. 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 future 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% 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 items. 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 third -party service providers, e.g., domestic software processors or legal counsel, or disclose confidential information about you to third -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. City Council Lioneld Jordan, Mayor Paul Becker, Chief Financial Officer City of Fayetteville, Arkansas Page 10 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 from BKD's servers, i.e., BKDconnect, 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 intemet 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 third 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 report on 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 in 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. 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 us 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. City Council Lioneld Jordan, Mayor Paul Becker, Chief Financial Officer City of Fayetteville, Arkansas Page 11 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 to conformance by themselves and other professionals in 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 comment, 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 us is in electronic form, you agree that such copy shall be legally treated as a "duplicate original' of this agreement. BKD, LLP Acknowledgeo-grid agreed toonlbehalf of CITY O-EXAYETTE BY 744 Viond(d Jordan DATE . BY Paul Becker, Chief Financial Officer DATE Enclosure L"qP&N 8550 United Plaza Blvd., Ste. 1001 — Baton Rouge, LA 70809 225-922-4600 Phone — 225-9224611 Fax — pncpa.com Posttethwaite & Nettervilte Postlethwaite & Netterville 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 permanent inspection in effect for the year ended May 31, 2020. 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.aicpa.org/prsummary. The summary also includes an explanation of how 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 Government Auditing Standards, including compliance audits under the Single Audit Act; audits of employee benefit plans, audits performed under FDICIA, an audit of a broker -dealer, and examinations of service organizations [SOC 1 and SOC 2 engagements]. As part 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 permanent inspection in effect for the year ended May 31, 2020, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficiency(ies) or fail. BKD, LLP has received a peer review rating of puss. Baton Rouge, Louisiana November 2, 2020