HomeMy WebLinkAbout86-22 RESOLTUION113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Resolution: 86-22
File Number: 2022-0291
BKD, LLP:
A RESOLUTION TO AUTHORIZE MAYOR JORDAN TO SIGN AN ENGAGEMENT LETTER
WITH BKD, LLP AND PAY AN AMOUNT NOT TO EXCEED $117,320.00 FOR AUDITING
SERVICES FOR THE 2021 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 fifth 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 $117,320.00 for auditing
services for the 2021 audit.
PASSED and APPROVED on 4/19/2022
Page 1 Printed on 4120122
Resolution: 86-22
File Number: 2022-0291
Attest:
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Page 2 Printed on 4/20/22
City of Fayetteville, Arkansas 113 West Mountain Street
Fayetteville, AR 72701
(479)575-8323
Text File
File Number: 2022-0291
Agenda Date: 4/19/2022 Version: 1 Status: Passed
In Control: City Council Meetinq 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 $117,320.00 FOR AUDITING SERVICES
FOR THE 2021 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 fifth
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 $117,320.00 for auditing services for the 2021 audit.
City of Fayetteville, Arkansas Page 1 Printed on 412012022
City of Fayetteville Staff Review Form
4/19/2022
City Council Meeting Date - Agenda Item Only
N/A for Non -Agenda Item
Marsha Hertweck 3/25/2022 ACCOUNTING & AUDIT (131)
Submitted By Submitted Date Division / Department
Action Recommendation:
Approval of the final year of a five year contract with BKD,LLP for annual audit services for the City's 2021 financial
audit.
Budget Impact:
various
Account Number
Project Number
Fund
Project Title
Budgeted Item? Yes Current Budget
Funds Obligated
Current Balance
Does item have a cost? Yes Item Cost
Budget Adjustment Attached? No Budget Adjustment
Remaining Budget
V20210527
Purchase Order Number: Previous Ordinance or Resolution #
Change Order Number:
Original Contract Number:
Comments:
Approval Date:
•
FAYETTEVILLE
ARKANSAS
3'
MEETING OF APRIL 19, 2022
TO: Mayor and City Council
FROM: Marsha Hertweck, Accounting Director
DATE: March 25, 2022
SUBJECT: BKD, LLP contract
CITY COUNCIL MEMO
RECOMMENDATION:
Approval of the fifth year of a five-year contract with BKD, LLP for annual audit services for the
City's 2021 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 Annual
Comprehensive Financial Report (ACFR). The ACFR 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 2021
annual audit. The fifth year of the contract with BKD has a maximum fee of $117,320.
BUDGET/STAFF IMPACT:
The cost of the 2021 audit is a maximum of $117,320. The audit has been budgeted in various
funds of the City in the 2022 approved budget.
Attachments:
Staff Review form
City Council Memo
Engagement Letter
Mailing Address:
113 W. Mountain Street www.fayetteville-ar,gov
Fayetteville, AR 72701
809 S. 52nd Street, Suite A i P.O. Box 1893 1 Rogers, AR 72757-1893
479,845.0270 1 Fax 479.845.0840 1 hkd.com
March 24, 2022
City Council
Lioneld Jordan, Mayor
Paul Becker, Chief Financial Officer
CITY OF FAYETTEVILLE, ARKANSAS
113 W. Mountain Street
Fayetteville, AR 72701
We appreciate your selection of BKD, LLP as your service provider and are pleased to confirm the
arrangements of our engagement in this contract. Within the requirements of our professional standards
and any duties owed to the public, regulatory, or other authorities, our goal is to provide you Unmatched
Client Service®.
In addition to the terms set forth in this contract, including the detailed Scope of Services, our engagement
is governed by the following, incorporated fully by this reference:
• Terms and Conditions Addendum
Summary Scope of Services
As described in the attached Scope of Services, our services will include the following:
CITY OF FAYETTEVILLE, ARKANSAS
• Audit Services for the year ended December 31, 2021
Attestation Examination Services for the year ended December 31, 2021.
Engagement Fees
The fee for our services will be $117,320. Included in this fee are travel costs and fees for services from
other professionals, if any, as well as an administrative fee of five (5) percent to cover items such as copies,
postage and other delivery charges, supplies, technology -related costs such as software licensing, user
access, and research tools, and similar expense items.
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
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CITY OF FAYETTEVILLE, ARKANSAS
March 24, 2022
Page 2
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 analysis 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 pricing for this engagement and our fee structure are based upon the expectation that our invoices will
be paid promptly. Payment of our invoices is due upon receipt.
Additional Costs Related to Implementing New Standards
Assistance and additional time as a result of the adoption of new standards, such as those listed in the
attached New Auditing and Accounting Standards, are not included within our standard engagement
fees. These fees will be based on time expended and will vary based on the level of assistance and
procedures required.
Contract Agreement
Please sign and return this contract to indicate your acknowledgment of, and agreement with, the
arrangements for our services including our respective responsibilities.
BKD, LLP
Acknowledg and agreed to as it relates to the entire contract, including the Scope of Services, and Terms
and 'or
s Adders ut , on behalf of CITY OF FAYETTEVILLE, ARI{ANSAS.
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CITY OF FAYETTEVILLE, ARKANSAS
March 24, 2022
Page 3
Scope of Services
The following apply for all services:
Assistance Our timely completion of services depends on the assistance you provide us in
accumulating information and responding to our inquiries. Inaccuracies or delays
in providing this information or the responses may result in untimely filings or
inability to meet other deadlines.
Responsibility for We may perform additional services for you that are not covered by this contract.
Outcomes You agree to assume full responsibility for the substantive outcomes of the
contracted services and for any other services we may provide, including any
findings that may result.
You also acknowledge these services are adequate for your purposes, and you
will establish and monitor the performance of these services to ensure they meet
management's objectives. All decisions involving management responsibilities
related to these services will be made by you, and you accept full responsibility
for such decisions.
We understand you have designated (or will) a management -level individual to
be responsible and accountable for overseeing the performance of these services,
and you have determined (or will) this individual is qualified to conduct such
oversight.
Additional Costs Our fees do not consider additional efforts driven by the SARS-CoV-2 virus and
Related to COVID- the related COVID-19 (COVID-19) environment. Complexities and
19 uncertainties related to various provisions of new laws and the continued issuance
of interpretative and procedural guidance from federal agencies may affect our
services. Fees related to COVID-19 activities will be billed based on time
expended. Additional efforts or services may include:
Accounting 'and auditing issues such as collectability of receivables,
inventory valuation, compliance with debt agreements, modification of lease
terms, additional major programs subject to Single Audit, etc.
CITY OF FAYETTEVILLE, ARKANSAS
March 24, 2022
Page 4
Audit Services
We will audit the basic financial statements and related notes to the basic financial statements for the
following entity(ies) with the objective 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; and issuing a report on your schedule of expenditures of federal awards:
CITY OF FAYETTEVILLE, ARKANSAS as of and for the year ended December 31, 2021.
The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report
that includes our opinion.
You have informed us that the audited financial statements are expected to be presented along with the
Annual Comprehensive Financial Report (ACFR). Management is responsible for the other information
included in the ACFR. The other information comprises the ACFR but does not include the financial
statements and our auditor's report thereon. Our opinion on the financial statements will not cover the other
information, and we will not express an opinion or any form of assurance thereon. In connection with our
audit of the financial statements, our responsibility is to read the other information and consider whether a
material inconsistency exists between the other information and the financial statements, or whether the
other information otherwise appears to be materially misstated. If, based on the work performed, we
conclude that an uncorrected material misstatement of the other information exists, we are required to
describe it in our report.
We will also express an opinion on whether combining individual fund statements ,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.
We will also provide you with the following nonattest services:
• We will 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
David Coleman, Partner is responsible for supervising the engagement and authorizing the signing of the
report or reports.
We will issue a written report(s) upon completion of our audit(s), addressed to the following parties:
Entity Name Party Name
CITY OF FAYETTEVILLE, ARKANSAS City Council
CITY OF FAYETTEVILLE, ARKANSAS
March 24, 2022
Page 5
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.
The following apply for the audit services described above:
Our We will conduct our audit in accordance with auditing standards generally
Responsibilities 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, and
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
We will exercise professional skepticism throughout the audit.
We will identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion.
We will obtain an understanding of internal control relevant to the audit in order
to design audit procedures that are appropriate in the circumstances.
We will evaluate the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well
as evaluate the overall presentation of the financial statements, including the
disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
We will also conclude, based on audit evidence obtained, whether there are
conditions or events considered in the aggregate, that raise substantial doubt
about the entity's ability to continue as a going concern for a reasonable period
of time.
CITY OF FAYETTEVILLE, ARKANSAS
March 24, 2022
Page 6
Limitations & Reasonable assurance is a high level of assurance but is not absolute assurance
Fraud and therefore is not a guarantee that an audit conducted in accordance with GAAS
will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions
of users made on the basis of these financial statements.
The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Our understanding of internal control is not for the purpose of expressing an
opinion on the effectiveness of your internal control. However, we will
communicate to you in writing any significant deficiencies or material
weaknesses in internal control relevant to the audit of the financial statements
that we identify 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.
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 contract to be signed by you and BKD, LLP.
Opinion Circumstances may arise in which our report may differ from its expected form
and content based on the results of our audit. Depending on the nature of these
circumstances, it may be necessary for us to modify our opinion, add an
emphasis -of -matter paragraph or other -matter paragraph to our auditor's report,
or if necessary, withdraw from the engagement.
If we discover conditions that may prohibit us from issuing a standard report, we
will notify you. In such circumstances, further arrangements may be necessary
to continue our engagement.
Your Management and, if applicable, those charged with governance acknowledge and
Responsibilities understand their responsibility for the following:
For the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United
States of America (or other basis if indicated in the contract)
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
For identifying and ensuring compliance with the laws, regulations,
contracts, and grants applicable to your activities (including your federal
award programs)
CITY OF FAYETTEVILLE, ARKANSAS
March 24, 2022
Page 7
To provide us with:
o Access to all information of which you are aware that is relevant to
the preparation and fair presentation of the financial statements,
including access to information relevant to disclosures
o Additional information that we may request for the purpose of the
audit
o Unrestricted access to persons within the entity from whom we
determine it necessary to obtain audit evidence
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.
Written As part of our audit process, we will request from management and, if applicable,
Confirmations those charged with governance written confirmation acknowledging certain
Required responsibilities outlined in this contract 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
Peer Review Government Auditing Standards require that we provide you with a copy of our
Report 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 contract.
Supplementary With regard to any supplementary information that we are engaged to report on:
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
Implementation of Unless indicated in our contract, our services and related fees do not include
New Standards substantive assistance beyond routine advice related to the adoption of new
accounting and reporting standards. Should you require assistance, we will bill
you at our standard hourly rates.
CITY OF FAYETTEVILLE, ARKANSAS
March 24, 2022
Page 8
Assistance with Transactions or changes in business may require you to apply existing standards
Application of differently each year, such as when business operations create new revenue
Standards streams, operations are discontinued, liquidity or operational challenges are
encountered, business combinations are executed, etc. We welcome your
questions throughout the year and are happy to provide general guidance and
routine support; however, our engagement does not include substantive effort to
assist you with applying standards to these circumstances, unless otherwise
indicated in the contract.
Attestation Examination Services
We will examine the written assertion made by management that the City complied with certain state acts
during the year ended December 31, 2021.
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:
• Arkansas Municipal Accounting Law of 1973, § 14-59-101 et seq.;
• Arkansas District Courts and City Courts Accounting Law, § 16-10-201 et seq.;
• Improve contracts, § § 22-9-202 — 22-9-204
• Budgets, purchases, and payments of claims, etc., § 14-58-201 et seq. and § 14-58-301 et seq.;
• Investment of public funds, § 19-1-501 et seq.; and
• Deposit of public funds, §§ 19-8-101 — 19-8-107
The following apply for the attestation examination services described above:
Our We will conduct our examination in accordance with attestation standards
Responsibilities 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.
If we discover conditions that may prohibit us from issuing a standard report, we
will notify you. In such circumstances, further arrangements may be necessary
to continue our engagement.
Limitations & Because of the inherent limitations of an examination engagement, together with
Fraud 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.
Report 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 OF FAYETTEVILLE, ARKANSAS
March 24, 2022
Page 10
Your To facilitate our engagement, management is responsible for providing a written
Responsibilities 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
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.
CITY OF FAYETTEVILLE, ARKANSAS
March 24, 2022
Page 11
New Auditing and Accounting Standards
Leases
Governmental Accounting Standards Board Statement No. 87, Leases, is effective for fiscal years beginning
after June 15, 2021. Early application is encouraged.
Statement No. 87 establishes a single model for lease accounting based on the foundational principle that
leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to
recognize a lease liability and an intangible right -to -use lease asset, and a lessor is required to recognize a
lease receivable and a deferred inflow of resources. We can assist you with the adoption by providing
services which may include, but are not limited to:
Assessing your readiness by assisting with the evaluation of your:
o Current controls and policies
o Current internal resources and system capabilities
Assisting with changes required to adopt Statement No. 87, including:
o Assisting with information gathering to develop an inventory of all lease agreements,
service contracts, and other arrangements that may contain right -to -use lease assets
o Recommending enhancements to existing controls and policies or suggesting new controls
and policies to address Statement No. 87
o Documenting any changes from your previous lease recognition and reporting methods
o Drafting the required disclosures
The time it will take to perform the above assistance and our additional audit procedures relating to the
adoption of the Statement, and any time to assist you with the adoption, may be minimized to the extent
your personnel will be available to provide timely and accurate documentation and information as requested
by us.
CITY OF FAYETTEVILLE, ARKANSAS
March 24, 2022
Page 12
BKD, LLP Terms and Conditions Addendum
GENERAL
1. Overview. This addendum describes BKD, LLP's standard terms and
conditions ("Terms and Conditions") applicable to Our provision of
services to the Client ("You"). The "Terms and Conditions are a part
of the contract between You and BKD, LLP. For the purposes of the
Terms and Conditions, any reference to "Firm," "We," "US," or "Our"
is a reference to BKD, LLP ("BKD"), and any reference to "You" or
"Your" is a reference to the party or parties that have engaged Us to
provide services.
BILLING, PAYMENT, & TERMINATION
2. Billing and Payment Terms. We will bill You for Our professional
fees and costs as outlined in Our contract. Interest will be charged on
any unpaid balance after 30 days at the rate of 10 percent per annum,
or as allowed by law at the earliest date thereafter, and highest
applicable rate if less than 10 percent.
We reserve the right to suspend or terminate Our work for this
engagement or any other engagement for nonpayment of fees. If Our
work is suspended or terminated, You agree that We will not be
responsible for Your failure to meet governmental and other
deadlines, for any penalties or interest that may be assessed against
You resulting from Your failure to meet such deadlines, and for any
other damages (including but not limited to consequential, indirect,
lost profits, or punitive damages) incurred as a result of the suspension
or tenmination of Our services.
Our fees may increase if Our duties or responsibilities are increased
by rulemaking of any regulatory body or any additional new
accounting or auditing standards. Our engagement fees do 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.
3. Billing Records. If these services are determined to be within the
scope and authority of Section 1861(v)(1)(1) of the Social Security
Act, We agree to make available to the Secretary of Health and
Human Services, or to the U.S. Comptroller General, or any of their
duly authorized representatives, such of Our books, documents, and
records that are necessary to certify the nature and extent of Our
services, until the expiration of four (4) years after the furnishing of
these services. This contract allows access to contracts of a similar
nature between subcontractors and related organizations of the
subcontractor, and to their books, documents, and records.
4. Termination. Either party may terminate these services in good faith
at any time for any reason, including Your failure to comply with the
terms of Our contract or as We determine professional standards
require. Both parties must agree, in writing, to any future
modifications or extensions. If services are terminated, You agree to
pay BKD for time expended to date. In addition, You will be billed
costs and fees for services from other professionals, if any, as well as
an administrative fee of four (4) percent to cover items such as copies,
postage and other delivery charges, supplies, technology -related costs
such as software licensing, user access, and research tools, and similar
expense items.
DISPUTES & DISCLAIMERS
5. Mediation. Any dispute arising out of or related to this engagement
will, prior to resorting to litigation, be submitted for nonbinding
mediation upon written request by either party. Both parties agree to
try in good faith to settle the dispute in mediation. Unless the parties
agree otherwise, the American Arbitration Association ("AAA") will
administer any such mediation in accordance with its Commercial
Mediation Rules. The mediator will be selected by agreement of the
parties. If We cannot agree, a mediator shall be designated by the
AAA. The mediation proceeding shall be confidential. Each party will
bear its own costs in the mediation, but the fees and expenses of the
mediator will be shared equally.
Indemnification. Unless disallowed by law or applicable
professional standards, You agree to hold BKD harmless from any
and all claims which arise from knowing misrepresentations to BKD,
or the intentional withholding or concealment of information from
BKD by Your management or any partner, principal, shareholder,
officer, director, member, employee, agent, or assign of Yours. You
also agree to indemnify BKD for any claims made against BKD by
third parties, which arise from any wrongful actions of Your
management or any partner, principal, shareholder, officer, director,
member, employee, agent, or assign of Yours. The provisions of this
paragraph shall apply regardless of the nature of the claim.
Statute of Limitations. You agree that any claim or legal action
arising out of or related to this contract and the services provided
hereunder shall be commenced no more than one (1) year from the
date of delivery of the work product to You or the termination of the
services described herein (whichever is earlier), regardless of any
statute of limitations prescribing a longer period of time for
commencing such a claim under law. This time limitation shall apply
regardless of whether BKD performs other or subsequent services for
You. A claim is understood to be a demand for money or services,
demand for mediation, or the service of suit based on a breach of this
contract or the acts or omissions of BKD in performing the services
provided herein. This provision shall not apply if enforcement is
disallowed by applicable law or professional standards.
Limitation of Liability. You agree that BKD's liability, if any,
arising out of or related to this contract and the services provided
hereunder, shall be limited to the amount of the fees paid by You for
services rendered under this contract. This limitation shall not apply
to the extent it is finally, judicially determined that the liability
resulted from the intentional or willful misconduct of BKD or if
enforcement of this provision is disallowed by applicable law or
professional standards.
Waiver of Certain Damages. In no event shall BKD be liable to You
or a third party for any indirect, special, consequential, punitive, or
exemplary damages, including but not limited to lost profits, loss of
revenue, interruption, loss of use, damage to goodwill or reputation,
regardless of whether You were advised of the possibility of such
damages, regardless of whether such damages were reasonably
foreseeable, and regardless of whether such damages arise under a
theory of contract, tort, strict liability, or otherwise.
10. Severability. If any portion of this contract is deemed invalid or
unenforceable, said finding shall not operate to invalidate the
remainder of the terms set forth in this contract.
11. Assignment. You acknowledge and agree that the terms and
conditions of this contract shall be binding upon and inure to the
parties' successors and assigns, subject to applicable laws and
regulations.
12. Disclaimer of Legal or Investment Advice. Our services do not
constitute legal or investment advice.
RECORDS, WORKPAPERS, DELIVERABLES, & PROPRIETARY
INFORMATION
13. Maintenance of Records. 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.
14. BKD Workpapers. 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
(including any State Board) to make certain workpapers available to
them pursuant to authority granted by law or regulation. Unless We
are prohibited from doing so by law or regulation, BKD will inform
You of any such legal process or request. You agree We have no legal
responsibility to You in the event We determine We are obligated to
provide such documents or information. In addition, You agree to
compensate or reimburse BKD for all costs and expenses, including
reasonable attorney's fees, associated with BKD's compliance with
requests or demands for its workpapers or other information related
to this engagement, and for any testimony required by summons or
subpoena.
15. Use of Deliverables and Drafts. You agree You will not modify any
deliverables or drafts prepared by Us 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.
Our report on any financial statements must be associated only with
the financial statements that were the subject of Our engagement. You
may make copies of Our report, but only if the entire financial
statements (exactly as attached to Our report, including related
footnotes and supplementary information, as appropriate) are
reproduced and distributed with Our report. You agree not to
reproduce or associate Our report with any other financial statements,
or portions thereof, that are not the subject of Our engagement.
CITY OF FAYETTEVILLE, ARKANSAS
March 24, 2022
Page 13
have the limited right to use them solely within Your business. All
reports, templates, manuals, forms, checklists, questionnaires, letters,
agreements, and other documents which We make available to You
are confidential and proprietary to Us. Neither You, nor any of Your
agents, will copy, electronically store, reproduce, or make any such
documents available to anyone other than Your personnel. This
provision will apply to all materials whether in digital, "hard copy"
format, or other medium.
REGULATORY
17. U.S. Securities and Exchange Commission ("SEC") and other
Regulatory Bodies. Where We are providing services either for
(a) an entity that is registered with the SEC, (b) an affiliate of such
registrant, or (c) an entity or affiliate that is subject to rules,
regulations, or standards beyond those of the American Institute of
Certified Public Accountants ("AICPA"), any term of this contract
that would be prohibited by or impair Our independence under
applicable law or regulation shall not apply to the extent necessary
only to avoid such prohibition or impairment.
18. Offering Document. You may wish to include Our report(s) on
financial statements in an exempt offering document. You agree that
any report, including any 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 You 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.".
19. BKD Not a Municipal Advisor. 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 matters with internal or external advisors and experts You deem
appropriate before acting on any such infonnation or material
provided by BKD.
TECHNOLOGY
20. Electronic Sites. You agree to notify Us if You desire to place Our
report(s), including any reports on Your financial statements, 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 to review information contained in
electronic sites.
16. Proprietary Information. You acknowledge that proprietary
information, documents, materials, management techniques, and 21. Electronic Signatures and Counterparts. This contract and other
other intellectual property are a material source of the services We documents to be delivered pursuant to this contract may be executed
perform and were developed prior to Our association with You. Any in one or more counterparts, each of which will be deemed to be an
new forms, software, documents, or intellectual property We develop original copy and all of which, when taken together, will be deemed
during this engagement for Your use shall belong to Us, and You shall to constitute one and the same agreement or document, and will be
effective when counterparts have been signed by each of the parties
and delivered to the other parties. Each party agrees that the electronic
signatures, whether digital or encrypted, of the parties included in this
contract are intended to authenticate this writing and to have the same
force and effect as manual signatures. Delivery of a copy of this
contract or any other document contemplated hereby, bearing an
original manual or electronic signature by facsimile transmission
(including a facsimile delivered via the internet), by electronic mail
in "portable document format" (".pdf') or similar format intended to
preserve the original graphic and pictorial appearance of a document,
or through the use of electronic signature software, will have the same
effect as physical delivery of the paper document bearing an original
signature.
22. Electronic Data Communication and Storage. In the interest of
facilitating Our services to You, We may send data over the internet,
temporarily store electronic data via computer software applications
hosted remotely on the internet, or utilize cloud -based storage. Your
confidential electronic data may be transmitted or stored using these
methods. In using these data communication and storage methods,
We employ measures designed to maintain data security. We use
reasonable efforts to keep such communications and electronic data
secure in accordance with Our obligations under applicable laws,
regulations, and professional standards.
You recognize and accept that We have no control over the
unauthorized interception or breach of any communications or
electronic data once it has been transmitted or if it has been subject to
unauthorized access while stored, notwithstanding all reasonable
security measures employed by us. You consent to Our use of these
electronic devices and applications during this engagement.
OTHER MATTERS
23. Third -Party Service Providers. BKD 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. BKD maintains,
however, internal policies, procedures, and safeguards to protect the
confidentiality and security of Your information. In addition, BKD
will secure confidentiality agreements with all service providers to
maintain the confidentiality of Your information. If We are unable to
secure an appropriate confidentiality agreement, You will be asked to
consent prior to BKD sharing Your confidential information with the
third -party service provider.
24. Independent Contractor. When providing services to You, We will
be functioning as an independent contractor; and in no event will We
or any of Our employees be an officer of You, nor will Our
relationship be that of joint venturers, partners, employer and
employee, principal and agent, or any similar relationship giving rise
to a fiduciary duty to You.
25. Use of BKD Name. Any time You intend to reference BKD's fine
name in any manner in any published materials, including on an
electronic site, You agree to provide Us with draft materials for
review and approval before publishing or posting such information.
26. Praxity. BKD is an independent accounting firm allowed to use the
name "Praxity" in relation to its practice. BKD is not connected,
however, by ownership with any other firm using the name "Praxity."
BKD will be solely responsible for all work carried out on Your
behalf. In deciding to engage BKD, You acknowledge that We have
CITY OF FAYETTEVILLE, ARKANSAS
March 24, 2022
Page 14
not represented to You that any other firm using the name "Praxity"
will in any way be responsible for Our work.
27. BKD Status as LLP. 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, partners in a registered limited
liability partnership do not have individual civil liability, directly or
indirectly, 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.
28. Entire Agreement. The contract, including this Terms and
Conditions Addendum and any other attachments or addenda,
encompasses the entire agreement between You and BKD and
supersedes all previous understandings and agreements between the
parties, whether oral or written. Any modification to the terms of this
contract must be made in writing and signed by both You and BKD.
29. Force Majeure. We shall not be held responsible for any failure to
fulfill Our obligations if such failure was caused by circumstances
beyond Our control.
8550 United Plaza Blvd., Ste. 1001 — Baton Rouge, LA 70809
bP&N 225-922-4600 Phone — 225-922-4611 Fax — pnepa,coin
Posttethwiite & Nettervitte 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 histitute 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.aiepa.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 pass.
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November 2, 2020