HomeMy WebLinkAboutContract Amendment No. 8 with Eide Bailly for Financial Audit Services FY17November 14, 2017
MEMORANDUM
TO: Mayor de Weerd
FROM: Keith Watts, Purchasing Manager
Mayor Tammy de Weerd
City Council Members:
Keith Bird Joe Borton
Luke Cavener Genesis Milam
Ty Palmer Anne Little Roberts
RE: Contract Amendment No 8 — FINANCIAL AUDIT SERVICES
Madam Mayor:
Attached please find Contract Amendment No 8 with EideBailly in the amount of
$48,400.00 for the following services:
Financial Audit Services FY2017.
This amendment extends the contract for one additional year per the Terms and
Conditions of the agreement approved September 7, 2010. This procurement falls in
the category of Goods and Services Up to $50,000 for which I am authorized to sign,
however for internal controls I am sending to you for signature. The Finance
Department has notified and acquired approval from Council Liaison Joe Borton.
At this time, all parties have mutually agreed to the terms and conditions of the
agreement. I am presenting this Amendment for your signature.
Thank you.
r
Keith Watts
Purchasing Manager
Enclosure
Purchasing Department - 33 E. Broadway Avenue Ste 106 Meridian, ID 83642
Phone 208-489-0416 - Fax 208-8874813 - www.meridiancity.org
CITY OF MERIDIAN
CONTRACT AMENDMENT No. 8
FINANCIAL SERVICES AUDIT
CONTRACTOR NAME:
DEPARTMENT NAME:
EideBailly
Finance
ADDRESS:
ADDRESS:
877 W. Main St., Suite 800
33 E. Broadway
Boise, ID 83702
Meridian, ID 83642
CURRENT CONTRACT INFORMATION:
Contract Name: Financial Audit Services
Previous Amendment Date: 11-18-2015 Previous Amendments: 7.
Current Contract Dates: START: 114-2016 COMPLETION: 9-30-2017
Current Contract Amount (Inclusive of Previous Amendments):33$ 5,250
CHOOSE ONE AMENDMENT COLUMN BELOW, either "STANDARD AMENDMENT" or "AMENDMENT TO EXERCISE
OPTION TO RENEW" and check off any applicable amendments under that column.
AMENDMENT TO EXERCISE OPTION TO RENEW
(Check all that Apply)
_ Amendment to Contract Performance
X Amendment to Contract Dates
X Amendment to Contract Amount
_ Other: (Explain)
DESCRIPTION OF REASON FOR AMENDMENT: (Attach all relevant documentation detailing amendment):
Renewal of Agreement for FY 2016 Audit Services.
NEW CONTRACT INFORMATION:
Amendment Date: 11-21-2016
New Contract Dates: START: 10-1-2017 COMPLETION: 9-30-2018.
Amount of Amendment Change $ 48,400.00.
Current Contract Amount (including this Amendment): $.3838.650.00
ALL OTHER TERMS AND CONDITIONS OF THE ORIGINAL CONTRACT, RFQ AND
PREVIOUS AMENDMENTS REMAIN UNCHANGED AND IN FULL FORCE AND EFFECT.
CITY OF MIA -N EideBai ly
BY: . D A VG& BY:
TAMMY d E RD, MAYOR Vie° Sri Kevin Smith, partner
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Dated: r 1 / City of Dated: kd I `-i 1 1 1
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Attest; p"" °
a, � Purchasin Appro a
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BY:
CJ QbLES, CI Y LERK N'I(KEITH ATTS, PfJRCHASING MANAGER
EideBailly,
CPAs & BUSINESS ADVISORS
October 27, 2017
Todd Lavoie
City of Meridian, Idaho
33 East Broadway Avenue
Meridian, Idaho 83642
The following represents our understanding of the services we will provide to City of Meridian, Idaho.
You have requested that we audit the financial statements of the governmental activities, the business -type
activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund
information of City of Meridian, Idaho, as of September 30, 2017, and for the year then ended, and the related
notes to the financial statements, which collectively comprise City of Meridian, Idaho'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 the management's discussion, schedule of
employer's share of net pension liability and employer contributions, schedule of revenues, expenditures and
changes in fund balances — budget and actual — general fund, and notes to required supplementary information be
presented to supplement the basic financial statements. Such information, although not a pant 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:
• Management's Discussion and Analysis
• Schedule of Employer's Share of Net Pension Liability and Employer Contributions
• Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual — General Fund
• Notes to Required Supplementary Information
www.eidebaiIIy.com
877 W. Main St., Ste. 800 1 Boise, ID 83702-5858 1 T 208.344.7150 1 F 208.344.7435 1 EOE
Also, the document we submit to you will include the following other additional information that will not be
subjected to the auditing procedures applied in our audit of the basic financial statements:
• Schedule of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual — Capital
Projects
• Schedule of Revenues, Expenditures and Changes in Fund Balance — Enterprise Funds
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.
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 City of Meridian, Idaho'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 may assist in preparing the financial statements of City of Meridian, Idaho in conformity with U.S. generally
accepted accounting principles based on information provided by you. This nonaudit service does 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;
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:
i. 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 assistance in financial statement preparation services, City of Meridian, Idaho's 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 referred 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 City of Meridian, Idaho's basic financial
statements. Our report will be addressed to the governing body of City of Meridian, Idaho. 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.
Kevin Smith 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 January 1, 2018.
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 be $48,400. 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 City of Meridian, Idaho'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 Firm'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.
4
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 Mayor and Members of the City Council
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;
• 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 any, 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 oversight 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 Oversight Agencies. The Oversight Agencies 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.
INDEMNITY
You agree that none of Eide Bailly LLP, its partners, affiliates, officers or employees (collectively `Bide 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 `Bide 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
performed 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.
We appreciate the opportunity to be your certified public accountants and look forward to working with you and
your staff.
Respectfully,
K� S
Kevin Smith
Partner
RESPONSE:
This letter correctly sets forth our understanding.
Acknowledged and agreed on behalf of City of Meridian, Idaho by:
Name:
Title:
Date:
go
Cherry Bekaert"
No CAAs & Advisors
System Review Report
To the Partners of Eide Bailly LLP
and the AICPA National Peer Review Committee
We have reviewed the system of quality control for the accounting and auditing practice of Eide Bailly LLP (the
"firm") applicable to engagements not subject to PCAOB permanent inspection in effect for the year ended July
31, 2014. 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.
As a part of our peer review, we considered reviews by regulatory entities, if applicable, in determining the
nature and extent of our procedures. 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. 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. The nature,
objectives, scope, limitations of, and the procedures performed in a System Review are described in the
standards at www.aicpa.org/prsummary.
As required by the standards, engagements selected for review included engagements performed under
Government Auditing Standards, audits of employee benefit plans, audits performed under FDICIA, and
examinations of service organizations [Service Organizations Control (SOC) 1 and 2 engagements].
In our opinion, the system of quality control for the accounting and auditing practice of Eide Bailly LLP applicable
to engagements not subject to PCAOB permanent inspection in effect for the year ended July 31, 2014, 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 defrciency(ies) or fail. Eide Bailly LLP has received a peer review rating of pass.
Cj, . WLJ
Cherry Bekaert LLP
December 12, 2014