HomeMy WebLinkAboutURA RES 2017-38 RESOLUTION NO.
RFSOIJJfION AU111ORIZING 'FILE FXECL)TION OF THE FINANCIAL, AUDIT
I
CONTRACT FOR '11111' CALDWELL, URBAN RENEWAI, AGENCY wi'm 11"IDE
BAIIA,Y FOR THE YF'AR. ENDED SE."PTEMBER. 30, 2017;
BE IT 14EREBY RESOLVED by the Urban Renewal Agency cif the City of Caldwell,
Idaho, to approve the execution of the financial audit contract with Eide Bailly hereto as set
forth in full.
PASSED BY 111E VRBAN RENEWAL AGENCY OFTFIE CITY OF
CALDWELL, IDAHO this 9t"day of October, 2017.
APPROVED BY 1'11E (11AIRMAN OF THE URBAN RENEWAL AGENCY OF'
THE crry OF CALDWELL, IDAHO on this 9th day of October, 2017,
AP11R( VED.
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October 2,2017
Caldwell East Urban Renewal Agency
Attn:Carol Mitchell
621 Cleveland Blvd
Caldwell, Idaho 83905
The following represents our understanding of the services we will provide to Caldwell East Urban Renewal
Agency.
You have requested that we audit the financial statements of the governmental activities and the major fund
information of Caldwell East Urban Renewal Agency,as of September 30,2017,and for the year then ended,and
the related notes to the financial statements,which collectively comprise Caldwell East Urban Renewal Agency's
basic financial statements as listed in the table of contents. We are pleased to confirm our acceptance and our
understanding of this audit engagement by means of this letter.Our audit will be conducted with the objective of
our expressing an opinion on each opinion unit applicable to those basic financial statements.
Accounting principles generally accepted in the United States of America(U.S. GAAP), as promulgated by the
Governmental Accounting Standards Board(GASB)require that certain supplementary information(RSI)be
presented to supplement the basic financial statements. Such information,although not a part of the basic
financial statements, is required by GASB,who considers it to be an essential part of financial reporting for
placing the basic financial statements in an appropriate operational,economic,or historical context.As part of our
engagement,we will apply certain limited procedures to the RSI in accordance with auditing standards generally
accepted in the United States of America(U.S.GAAS).These limited procedures will consist primarily of
inquiries of management regarding their methods of measurement and presentation,and comparing the
information for consistency with management's responses to our inquiries.We will not express an opinion or
provide any form of assurance on the RSI.The following RSI is required by U.S.GAAP.This RSI will be
subjected to certain limited procedures but will not be audited:
1) Management's Discussion and Analysis.
2) Schedule of Revenue,Expenditures,and changes in Fund Balances—Budget to Actual—General Fund
Auditor Responsibilities
We will conduct our audit in accordance with U.S.GAAS and in accordance with Government Auditing
Standards.Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the basic financial statements are free from material misstatement.An audit involves performing
procedures to obtain audit evidence about the amounts and disclosures in the basic financial statements. The
procedures selected depend on the auditor's judgment, including the assessment of the risks of material
misstatement of the basic financial statements,whether due to error,misappropriation of assets,or violations of
laws,governmental regulations,grant agreements,or contractual agreements.
www.eidebailly.com
877 W.Main St.,Ste.800 Boise,ID 83702-5858 1 T 208.344.7150 F 208.344.7435 1 EOE
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 basic
financial statements. If appropriate,our procedures will therefore include tests of documentary evidence that
support the transactions recorded in the accounts,tests of the physical existence of inventories,and direct
confirmation of cash, investments,and certain other assets and liabilities by correspondence with creditors and
financial institutions.As part of our audit process,we will request written representations from your attorneys,
and they may bill you for responding.At the conclusion of our audit,we will also request certain written
representations from you about the basic financial statements and related matters.
Because of the inherent limitations of an audit,together with the inherent limitations of internal control,an
unavoidable risk that some material misstatements(whether caused by errors,fraudulent financial reporting,
misappropriation of assets,or violations of laws or governmental regulations)may not be detected exists,even
though the audit is properly planned and performed in accordance with U.S.GAAS and in accordance with
Government Auditing Standards.
In making our risk assessments,we consider internal control relevant to the entity's preparation and fair
presentation of the basic 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 basic financial statements that we have identified during the audit.
Our responsibility as auditors is,of course, limited to the period covered by our audit and does not extend to any
other periods.
We cannot provide assurance that unmodified opinions will be expressed.Circumstances may arise in which it is
necessary for us to modify our opinions or add emphasis-of-matter or other-matter paragraphs.If our opinions on
the basic financial statements are other than unmodified,we will discuss the reasons with you in advance.If,for
any reason,we are unable to complete the audit or are unable to form or have not formed opinions,we may
decline to express opinions or to issue a report as a result of this engagement.
Compliance with Laws and Regulations
As previously discussed,as part of obtaining reasonable assurance about whether the basic financial statements
are free of material misstatement,we will perform tests of Caldwell East Urban Renewal Agency's compliance
with the provisions of applicable laws,regulations,contracts,and agreements.However,the objective of our audit
will not be to provide an opinion on overall compliance and we will not express such an opinion.
Other Services
We will also assist in preparing the financial statements of Caldwell East Urban Renewal Agency in conformity
with U.S.generally accepted accounting principles based on information provided by you. We may also provide
other nonattest services related to preparation of proposed adjusting journal entries related to GASB 34.These
nonaudit services do not constitute an audit under Government Auditing Standards and such services will not be
conducted in accordance with Government Auditing Standards.
Management Responsibilities
Our audit will be conducted on the basis that management and,when appropriate,those charged with governance,
acknowledge and understand that they have responsibility:
a. For the preparation and fair presentation of the financial statements in accordance with accounting
principles generally accepted in the United States of America;
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b. 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 error
fraudulent financial reporting,misappropriation of assets,or violations of laws,governmental regulations,
grant agreements, or contractual agreements;
c. To provide us with:
L Access to all information of which management is aware that is relevant to the preparation and
fair presentation of the basic financial statements such as records,documentation,and other
matters;
ii. Additional information that we may request from management for the purpose of the audit;and
iii. Unrestricted access to persons within the entity from whom we determine it necessary to obtain
audit evidence.
d. For including the auditor's report in any document containing basic financial statements that indicates that
such basic financial statements have been audited by the entity's auditor;
e. For identifying and ensuring that the entity complies with the laws and regulations applicable to its
activities;
f. For adjusting the financial statements to correct material misstatements and confirming to us in the
management representation letter that the effects of any uncorrected misstatements aggregated by us
during the current engagement and pertaining to the current period under audit are immaterial, both
individually and in the aggregate,to the financial statements as a whole;and
g. For maintaining adequate records,selecting and applying accounting principles,and safeguarding assets.
With respect to financial statement preparation services and any other nonattest services we perform including
preparation of proposed adjusting journal entries related to GASB 34,management is responsible for(a)making
all management decisions and performing all management functions;(b)assigning a competent individual to
oversee the services;(c)evaluating the adequacy of the services performed;(d)evaluating and accepting
responsibility for the results of the services performed;and(e)establishing and maintaining internal controls,
including monitoring ongoing activities.
With regard to the supplementary information referr ed to above,you acknowledge and understand your
responsibility(a)for the preparation of the supplementary information in accordance with the applicable criteria,
(b)to provide us with the appropriate written representations regarding supplementary information,(c)to include
our report on the supplementary information in any document that contains the supplementary information and
that indicates that we have reported on such supplementary information,and(d)to present the supplementary
information with the audited basic financial statements,or if the supplementary information will not be presented
with the audited basic financial statements,to make the audited basic financial statements readily available to the
intended users of the supplementary information no later than the date of issuance by you of the supplementary
information and our report thereon.
As part of our audit process,we will request from management and,when appropriate,those charged with
governance,written confirmation concerning representations made to us in connection with the audit.
Reporting
We will issue a written report upon completion of our audit of Caldwell East Urban Renewal Agency's basic
financial statements.Our report will be addressed to the governing body of Caldwell East Urban Renewal
Agency. We cannot provide assurance that unmodified opinions will be expressed.Circumstances may arise in
which it is necessary for us to modify our opinions,add an emphasis-of-matter or other-matter paragraph(s), or
withdraw from the engagement.
Other
We understand that your employees will prepare all confirmations we request and will locate any documents or
support for any other transactions we select for testing.
If you intend to publish or otherwise reproduce the basic financial statements and make reference to our firm,you
agree to provide us with printers' proofs or masters for our review and approval before printing.You also agree to
provide us with a copy of the final reproduced material for our approval before it is distributed.
Provisions of Engagement Administration,Timing and Fees
During the course of the engagement,we may communicate with you or your personnel via fax or e-mail,and you
should be aware that communication in those mediums contains a risk of misdirected or intercepted
communications.
Jodi Daugherty is the engagement partner for the audit services specified in this letter.Responsibilities include
supervising services performed as part of this engagement and signing or authorizing another qualified firm
representative to sign the audit report.We expect to begin our audit on approximately December 4,2017.
Our fees are based on the amount of time required at various levels of responsibility,plus actual out-of-pocket
expenses. Invoices are payable upon presentation.We estimate that our fee for the audit will not exceed$6,100.
This fee is based on our understanding that City staff will prepare the financial statements.If our assistance is
needed in the preparation of the financial statements,the fee is$125 per hour. .We will notify you immediately of
any circumstances we encounter that could significantly affect this initial fee estimate.Whenever possible,we
will attempt to use Caldwell East Urban Renewal Agency's personnel to assist in the preparation of schedules and
analyses of accounts.This effort could substantially reduce our time requirements and facilitate the timely
conclusion of the audit.
In addition,we will be compensated for any time and expenses,including time and expenses of legal counsel,we
may incur in conducting or responding to discovery requests or participating as a witness or otherwise in any
legal,regulatory,or other proceedings as a result of our Finn's performance of these services. You and your
attorney will receive,if lawful,a copy of every subpoena we are asked to respond to on your behalf and will have
the ability to control the extent of the discovery process to control the costs you may incur.
Should our relationship terminate before our audit procedures are completed and a report issued,you will be
billed for services to the date of termination.All bills are payable upon receipt.A service charge of 1%per month,
which is an annual rate of 12%,will be added to all accounts unpaid 30 days after billing date. If collection action
is necessary,expenses and reasonable attorney's fees will be added to the amount due.
During the course of the audit,we may observe opportunities for economy in,or improved controls over,your
operations. We will bring such matters to the attention of the appropriate level of management,either orally or in
writing.
You agree to inform us of facts that may affect the basic financial statements of which you may become aware
during the period from the date of the auditor's report to the date the financial statements are issued.
We agree to retain our audit documentation or work papers for a period of at least five years from the date of our
report.
At the conclusion of our audit engagement,we will communicate to the members of the Board of Commissioners
the following significant findings from the audit:
• Our view about the qualitative aspects of the entity's significant accounting practices;
• Significant difficulties,if any,encountered during the audit;
• Uncorrected misstatements,other than those we believe are trivial, if any;
• Disagreements with management, if any;
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• Other findings or issues,if any,arising from the audit that are, in our professional judgment,significant
and relevant to those charged with governance regarding their oversight of the financial reporting process;
• Material,corrected misstatements that were brought to the attention of management as a result of our
audit procedures;
• Representations we requested from management;
• Management's consultations with other accountants,if any; and
• Significant issues,if atiy,arising from the audit that were discussed, or the subject of correspondence,
with management.
The audit documentation for this engagement is the property of Eide Bailly LLP and constitutes confidential
information.However,we may be requested to make certain audit documentation available to the State of Idaho
and federal agencies and the U.S.Government Accountability Office pursuant to authority given to it by law or
regulation,or to peer reviewers.If requested,access to such audit documentation will be provided under the
supervision of Eide Bailly LLP's personnel.Furthermore,upon request,we may provide copies of selected audit
documentation to the State of Idaho.The State may intend,or decide,to distribute the copies of information
contained therein to others, including other governmental agencies.
Government Auditing Standards require that we provide,upon request,a copy of our most recent external peer
review report and any subsequent review reports to the party contracting for the audit.Accordingly,we will
provide a copy of our most recent peer review report at your request.
DISPUTE RESOLUTION
The following procedures shall be used to resolve any disagreement,controversy or claim that may arise out of
any aspect of our services or relationship with you,including this engagement,for any reason("Dispute").
Specifically,we agree to first mediate.
Mediation
All Disputes between us shall first be submitted to non-binding mediation by written notice("Mediation Notice")
to the other party. In mediation,we will work with you to resolve any differences voluntarily with the aid of an
impartial mediator. The mediator will be selected by mutual agreement,but if we cannot agree on a mediator,one
shall be designated by the American Arbitration Association("AAA").
The mediation will be conducted as specified by the mediator and agreed upon by the parties. The parties agree to
discuss their differences in good faith and to attempt,with the assistance of the mediator,to reach an amicable
resolution of the Dispute.Mediation will be conducted with the parties in person in Boise,Idaho.
Each party will bear its own costs in the mediation. The fees and expenses of the mediator will be shared equally
by the parties.
Either party may commence suit on a Dispute after the mediator declares an impasse.
Governing Law and Venue
We both agree to submit any unresolved Dispute to trial by a federal or state court venued in Minneapolis,
Minnesota.This agreement shall be governed by and construed in accordance with the laws of the State of
Minnesota(regardless of the laws that might be applicable under the principles of conflict of law)as to all matters
including without limitation,matters of validity,construction,effect,and performance.
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LIMITATION OF DAMAGES AND NO PUNITIVE DAMAGES
The exclusive remedy available to you in any adjudication proceeding shall be the right to pursue claims for
actual damages that are directly caused by acts or omissions that are breaches by us of our duties under this
agreement and/or under applicable professional standards,such damages will be limited to no more than two
times fees paid under this agreement. In no event shall we be liable to you for any punitive or exemplary
damages,or for attorneys' fees.
TIME LIMITATION
The nature of our services makes it difficult,with the passage of time,to gather and present evidence that fully
and fairly establishes the facts underlying any Dispute. We both agree that,notwithstanding any statute of
limitations that might otherwise apply to a Dispute,it is reasonable that you may not bring any legal proceeding
against us unless it is commenced within twenty-four(24)months("Limitation Period")after the date when we
deliver our report,return or other deliverable under this agreement to you,regardless of whether we do other
services for you or that may relate to the audit.
The Limitations Period applies and begins to run even if you have not suffered any damage or loss,or have not
become aware of the existence or possible existence of a Dispute.
INDEMNITY
You agree that none of Eide Bailly LLP,its partners,affiliates,officers or employees(collectively"Eide Bailly")
shall be responsible for or liable to you for any misstatements in your financial statements that we may fail to
detect as a result of knowing representations made to us,or the concealment or intentional withholding of
information from us,by any of your owners,directors,officers or employees,whether or not they acted in doing
so in your interests or for your benefit,and to hold Eide Bailly harmless from any claims, losses,settlements,
judgments,awards,damages and attorneys' fees from any such misstatement,provided that the services
performed hereunder were performed in accordance with professional standards, in all material respects.
If a claim is brought against you by a third-party that arises out of or is in any way related to the services provided
under this engagement,you agree to indemnify Eide Bailly LLP,its partners,affiliates, officers and employees
(collectively"Eide Bailly"),against any losses,including settlement payments,judgments,damage awards,
punitive or exemplary damages,and the costs of litigation(including attorneys' fees)associated with the services
perfonned hereunder provided that the services were performed in accordance with professional standards,in all
material respects.
ASSIGNMENTS PROHIBITED
You agree that you will not and may not assign, sell,barter or transfer any legal rights,causes of actions,claims
or Disputes you may have against Eide Bailly,its partners,affiliates,officers and employees,to any other person
or party,or to any trustee,receiver or other third party.
Please sign and return the attached copy of this letter to indicate your acknowledgment of,and agreement with,
the arrangements for our audit of the basic financial statements including our respective responsibilities.
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We appreciate the opportunity to be your certified public accountants and look forward to working with You and
your staff.
Respectfully,
<
.Jodi Daugherty,Partner
RESPONSE:
]'his letter correctly sets forth our understanding.
Acknowled e ,aid g, �xed( 'i I eliall'ol'Caldwell East Urban Renewal Agency by:
Name:
................ .. .......................... -
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EldeBailly
(PAs&BUSINESS ADVISORS
October 2, 2017
To the Board of Commissioners
Caldwell Bast l.7rban Renewal Agency
Caldwell,Idaho
This letter is provided in corrnec.tr<an with oru°engagement to audit the financial statements of the Caldwell last
urban Renewal Agency as of and for the year ended September 30,2017. Profcssional standards require that we
comrnt.inicate with you certain items including our responsibilities with regard to the financial statement audit and
the planned scope and timing of``our audit.
Our Responsibilities
As stated in our engagement letter cla'ted October 2,2017, we are responsible'f'or conducting our audit inn
accordance with auditing standards generally accepted in the united Stages ofArnerica and in accordance.with
Govt t-ninert/ l uc iVzrr Slaeadcn°cls for the purpose of forming and expressing an opinion about Whether the financial
staternerrts that have been prepared by management, with your oversight,are prepared, in all material respects, in
accordance with accounting principles generally accepted in the t-Inited States of America. Our audit of the
financial statements does not relieve you or rrranagernent of your respective responsibilities.
0L r responsibility as it relates to the budget to actual comparison schedule is to evaluate its presentation for the
purpose of foaming and expressing an opinion as to whether the information is fairly stated in all material respects
in relation to the financial staterncnts as a whole.
Planned scope of the Audit.
Our audit will include examining,oil a test basis, evidence supporting the amounts and disclos'rrres in the financial
statements; therefore,our audit will involve.judgmcnt about the number of transactions to be examined and the
areas to be tested. Our audit is designed to provide reasonable, but not absolute,assurance about whether the
financial sl:atement:s as a whole are free,of material misstatement, whether due to error,fraudulent financial
reporting,misappropriation of assets, or violations of laws or governmental regulations. Because ofthis concept
of reasonable assurance and because we will not examine all transactions, there is a risk that material
misstatements may exist and not be detected by us.
Our audit will inclrulc obtaining all understanding ofthre entity and its environment, including its internal control,
sufficient to assess the risks of material misstatement of the financial staterrients and as a basis for designing,the
nature,'tinning,and extent of"further audit procedures. Our audit is not designed to express an opinion or provide
assurance on internal control over financial reporting. However, we will corrrrnunicate to you at the conclusion of
Our audit,significant matters that are relevant;to your responsibilides in overseeing the financial reporting
process„ including any material weakness",significant deficiencies,and violation of laws or regulations that
come to our attention,
What inspires you,inspa res us.Let's talk.j eiale aillydmm
877 W.Main St.,Ste.800 Boise,ID 83702-5858 T 208,344.7150 F 208.344.7435 EOE
We expect to begin our audit on approximately December 4,2017.
This information is intended solely for the use of the Board of Commissioners of Caldwell East Urban Renewal
Agency and is not intended to be,and should not be,used by anyone other than these specified parties.
Very truly yours,
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Eide Bailly LLP