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LEMASTER &DANIELS SPOKANE COLFAX MOSES LAKE OMAK OTHELLO QUINCY TRI-CITIES September 15, 1992 CERTIFIED PUBLIC \CO.)UNTANTS MEMBER OF THE AMERICAN CROUP OF CPA FIRM, Honorable Mayor Paul Agidius and Members of the City Council City of Moscow Moscow, Idaho Dear Mr. Mayor: EUSTACE LrMASTLOCKLIN. CPA I'ONAL!l M BUTLER. CPA LARRY ll WYATT, CPA WAYNEC MILLER, CPA ERliNG 0 GEBERS, CPA JOHNSON. CPA MICHAEL W SONNER. CPA EDWIN G JOLICOEUR. CPA lEE R CALLARMAN, CPA RICHARDQ HONSOWETZ. CPA lYNN M JONES. C'PA PHilLIP R PETERSON. CPA WILLIAM L CPA FREDERICK R BEll. CPA }AMES W PHilOPANT. CPA SANDRA R. GAMBlE, CPA This letter is to confirm our understanding of the terms and objectives of our engagement and the nature and limitations of the services we are to provide. SCOPE We will audit the general purpose financial statements of the City of Moscow, Idaho (City) for the fiscal year ending September 30, 1992. Our audit will be made in accordance with generally accepted auditing standards adopted by the American Institute of Certified Public Accountants and generally accepted governmental auditing standards adopted by the General Accounting office of the United States government and will include such tests of the accounting data and procedures as we consider necessary under the circumstances. Generally accepted auditing standards mean that, when applicable, our audit will be performed in accordance with the Government Auditing Standards issued by the General Accounting Office of the United States, Office of Management and Budget Circular A-128, .,Audits of State and Local Governments If the City is not required to have an audit in accordance with the Single Audit Act of 1984 (the Act), generally accepted auditing standards mean that our audit will be performed in accordance with the Audit and Accounting Guide for Audits of State and Local Governmental Units (fifth edition) issued by the American Institute of Certified Public Accountants, which we have been advised by your cognizant audit agency (Legislative Auditor, State of Idaho) is the authoritative guidance for audits of Idaho cities not subject to the requirements of the Act. HOO SEA FIRST FINANCIAL CENTER SPOKANE. WASHINGTON 99201-0614 (509} 624-4li5 FAX (509} 624-8874 ---PAGE BREAK--- Honorable Mayor Paul Agidius and Members of the City Council City of Moscow September 15, 1992 Page 2 The objective of our engagement is the completion of an audit of the general purpose financial statements referred to above and, upon completion and subject to findings, the rendering of reports on the combined financial statements. Audits made in accordance with generally accepted auditing standards are subject to certain limitations and the inherent risk that errors, irregularities, or illegal acts, including fraud or defalcations, if they exist, will not be detected. However, if during the course of our audit we become aware of such errors, irregularities, or illegal acts, we will bring them to your attention immediately. Should you then wish us to expand our normal auditing procedures, we will be pleased to work with you on developing a separate engagement for that purpose. Our engagement will also include the applicable auditors' reports on the study and evaluation of internal control (accounting and administrative) and the applicable auditors' opinions/reports on compliance with laws and regulations if the City is required to have a Single Audit. GENERAL PROVISIONS We will make our audit workpapers available to your authorized personnel. In addition, our workpapers will be made available to representatives from the GAO, the cognizant agency, and state or federal agencies which require a review of our workpapers in lieu of their coming to your offices to conduct their own audits and investigations. Our workpapers will be retained for a minimum period of three years from the date of the audit report or until all findings have been resolved. In those instances where the federal or state government will send written evaluations of the audit reports and require a management response, we will make ourselves available to participate in such commentary. It is understood that space will be made available for our personnel and that the requirements for providing supporting data and locating materials will be met by your accounting personnel. The fee quoted below is based on the anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. If significant additional time is necessary, we will discuss it with you and arrive at a new report deadline or fee estimate before we incur the additional time or costs. This engagement will require that a representation letter be signed regarding the availability of data, the accuracy of the information being presented, and the City's compliance with City rules, regulations and policies, and state and federal regulations (if applicable) in the administration of fund and program activities. We take a constructive approach to our engagements and periodically issue informal management letters when we feel there is sufficient information to make meaningful recommendations for improved efficiency in the City accounting operations or in the management of federal and state grants and programs (when applicable). These recommendations will be discussed with ---PAGE BREAK--- Honorable Mayor Paul Agidius and Members of the City Council City of Moscow September 15, 1992 Page 3 the appropriate levels of management prior to the actual issuance of a report. Our fees are based on the time required by the individuals assigned to the engagement plus direct expenses. Individual hourly rates vary according to the degree of responsibility involved and the skill required. We will invoice on a basis for services rendered. The total professional fees and expenses for the services described in this letter will not exceed $9,000. Our invoices are due and payable upon presentation. If any extraordinary matters come to your attention during the engagement, and an extension of our services appears to be required, we will document the situation in writing and will consult with you about extending our services. We recognize that the most important product is prompt and effective service of the highest quality and all our efforts will be directed toward achieving that goal. We appreciate this opportunity to serve you. If you have any questions regarding any aspect of this engagement, please call us. If you are in agreement with the terms of this letter, please sign one copy and return it for our files. Yours very truly, LeMASTER & DANIELS Governmental Services Division Phillip R. Peterson Partner-In-Charge PRP;ddl;E:\14MOSCOW.EL LeMASTER & DANIELS: The foregoing letter fully describes the services required and is accepted by us. Date Mayor, City of Moscow, Idaho ---PAGE BREAK--- P.O. Box 9203 83843·1703 September 23, 1992 tl/ 122 East 4th Street Moscow, Idaho Phillip R. Peterson, Partner-In-Charge LeMaster & Daniels 800 Seafirst Financial Center Spokane, WA 99201-0614 Phone [PHONE REDACTED] Fax [PHONE REDACTED] Enclosed is the signed copy of the agreement with your firm to complete the City of Moscow annual audit for the fiscal year ending September, 1992 as approved by the City Council at their meeting September 21, 1992. Sincerely, Elaine Russell, CMC,ICCFOA City Clerk/Deputy Treas. enc.