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HomeMy WebLinkAboutContract Amendment No. 3 with Eide Bailly for Audit ServicesTT ~ ~J~ ~~~ E _ C~NTRACTC~I~ I~AI~E: A~DRES-~i: ~7~` VUi Nlleir5, ~ti, quite ~©0' 8~ose, Id 83~'fl2 C~ntra~t ~I~r~e~ ,~,~ Iri ~ cial Audit s~enrice5 Previous Amendment Date. ~~~~~~~~~ CITY OF MERIDIAN GOIYTRACT AMENJDMENT No. 3 FINANCIAL SERVICES AUDIT ~~pARTMENT hIAM~: ~ir~~r~~ AL~Di~E~ ~~ E. Bra~~w~y I~{~ridiar~~ IU 83~~7 ~~V~L~US A~~~~111e11~r7~ ~ r Durrent Contract Dateso- TART.1 ~1= D~~1PL~TI~N+ ,,,~~~ Durrent ~or~tract Ar~tt~unt ~~at~~sive~ t~t`f~revio~s ~rnen~mer~fs~. 4~ C~I~~ ~-II~Eh1DMEI~T CC~LUIVII~i RELt~, either "TAI~D~RD ~~IEIdDMENT" or "AMEI~D-IwII~hIT Tt~ E7CERCI~E CWIO~~iE ~i~Tl{~~l TC~ RENEV'~" end ~he~k ~~f any a~p-lcable amendment under that column. ~I~EiV~1~EN'T T~ EXE~i~E ~PTI~~J T~ ~E~E ~Gheck a1~ f~gt a~~~~l Amendment. to contract Perf=ormance arnenr~mer~t to Cr~ntract Dates X Amendment to Cor~tra~t Arr~vunt _____. ~, Cther; ~Explain~ pE~CRI~"~IC~~ ~F i~EA~~I~I ~R ~I~ENDM~I~T: ~~t~a~l~ all relevant dc~cunaenta#ivn de#ailr'ng amendmen#~: Renewal ~f ~~reement fir F~' ~~12 Audit services. Base audit arad three sirt~le audits. l~E~ CC~I~TI~ACT INFORM~4TIC~1~: Amendment Date: 1 ~° New Contract Dates STA~T.1 ~(}MPLET~~f~; ~,~~„-7013 . Amount t~f Amendrnent Change ~ ~2 . Current Contract Amount ~Ir~c~tesr've at P~revt~~s ~,~ena~me~rts fo t~etej: .1,?~.~0 ~ ~Nd ~N~~TI~N ~~ THE RIIN~-~L CNTRA~T, R~~ ANA ALL ~fiN~~ ~"~ ~T~ ~~~N ~N~~~ N~ IN ~t1~.L ~~i~C A-N~ E~~E~T. ~'~1~~~~~ ~~IN~ _ CITY ~~' I~~~I ~~~ ~~ Qo~p,'IED~ A Uc~sT TAl~i~l~ ~~ EI~~, M~Yt~R o¢ ?~ a ,~V so a~t~t~: CEE t~O~MAN, CITY CLERK ti ~ City of ~'' E ~DIAN~- tDAHO .~ ~~ ti V ~~~~ ~y~ o f tk a TRH I+S~4 Eide~ai 11y ~`~, }~~'V'Ifi1 ~'iltfl, ~~i~nC ,,, ~~t~'~I. P"u~~h~~i A r~ ~ 9 i ... .. ,. KEITH ATT, ~~RG A~II`~1~ MAN~~EI~ EideBailly. cra: ra Busmrss aovtsnas September 13, 2012 To the Mayer and Members of the City Council City of Meridian, Idaho Meridian, Idaho We are engaged to audit the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component unit, and the major fund of City of Meridian, Idaho for the year ended September 30, 2012. Professional standards require that we provide you with the following information related to our audit. We would also appreciate the opportunity to meet with you to discuss this information further since a two-way dialogue can provide valuable information for the audit process. Our Responsibilities under U.S Generally Accepted Auditine Standards and OMB Circular A 133 As stated in our engagement letter dated September 13, 2012, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities. In planning and perfomring our audit, we will consider City of Meridian, Idaho's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide assurance on the internal control over financial reporting. We will also consider internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. As part of obtaining reasonable assurance about whether City of Meridian, Idaho's financial statements are free of material misstatement, we will perform tests of its compliance with certain provisions of laws, regulations, contracts, and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions is not an objective of our audit. Also in accordance with OMB Circular A-133, we will examine, on a test basis, evidence about City of Meridian, Idaho's compliance with the types of compliance requirements described in the "U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement" applicable to each of its major federal programs for the purpose of expressing an opinion on City of Meridian, Idaho's compliance with those requirements. While our audit will provide a reasonable basis for our opinion, it will not provide a legal determination on City of Meridian, Idaho's compliance with those requirements. Other Information in Documents Containing Audited Financial Statements Our responsibility for the supplementary infornation accompanying the financial statements, as described by professional standards, is to evaluate the presentation of the supplementary information in relation to the financial statements as a whole and to report on whether the supplementary information is fairly stated, in all material respects, in relation to the financial statements as a whole. www.eidebailly.com 877 W. Nwln St., Ste. B00 ~ Boise, ID 837025858 I T 208.344.7150 ~ F 208.344.7435 j EOE Planned Scone and Timing of the Audit An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. Our audit will include obtaining an understanding of the entity and its environment, including intemal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit procedures. Material misstatements may result from (()errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the entity or to acts by management or employees acting on behalf of the entity. We will generally communicate our significant findings at the conclusion of the audit. However, some matters could be communicated sooner, particularly if significant difficulties are encountered during the audit where assistance is needed to overcome the difficulties or if the difficulties tnay lead to a modified opinion. We will also communicate any internal control related matters that are required to be communicated under professional standards. We expect to begin our audit on approximately January 7, 2012. This information is intended solely for the use of the Mayer and Members of the City Council of City of Meridian, Idaho and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, C~ SGT Eide Bailly LL/ P~~ EideBailly, CPAs Sr ISUSINFSS ADVLSOaS September 13, 2012 Stacy Kilchenmann City of Meridian, Idaho 33 East Broadway Avenue Meridian, Idaho 83642 We are pleased to confirm our understanding of the services we are to provide City of Meridian, Idaho (the City) for the year ended September 30, 2012. We will audit the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component unit and the major fund which collectively comprise the basic financial statements, of the City as of and for the year ended September 30, 2012. Accounting standards generally accepted in the United States provide for certain required supplementary information (RSI), such as management's discussion and analysis (MD&A), to supplement the City's basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board 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 City's RS[ in accordance with auditing standards generally accepted in the United States of America. These limited procedures will consist of inquiries of management regarding the methods of preparing the information and comparing the infonnation for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We will not express an opinion or provide any assurance olt the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. The following RSI is required by generally accepted accounting principles and will be subjected to certain limited procedures, but will not be audited: 1) Management's Discussion and Analysis. 2) Statements of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual -- General Fund. 3) Notes to Required Supplementary Information. Supplementary infonnation other than RSI also accompanies the City's financial statements. We will subject the following supplementary information to the auditing procedures applied in our audit of the financial statetents and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America and will provide alt opinion on it in relation to the financial statements as a whole: I) Schedule of Expenditures of Federal Awards. 2) Notes to Schedule of Expenditures of Federal Awards. 3) Statements of Revenues, Expenditures and Changes in Fund Balauces -Budget and Actual .- Capital Improvement Fund. 4) Statements of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual - Enterprise Fund. www.eidebailly.com 877 W. Main 51., Sle. 800 (Boise, ID 837025838 ~ T 208.344.7150 I F 208.344.7435 1 EOE Audit Objectives The objective of our audit is the expression of opinions as to whether your basic financial statements are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles and to report on the fairness of the supplementary information referred to in the second paragraph when considered in relation to the financial statements as a whole. The objective also includes reporting on- • Internal control related to the financial statements and compliance with laws, regulations, and the provisions of contracts or grant agreements, noncompliance with which could have a material effect on the financial statements in accordance with Government Auditing Standards, • Intemal control related to major programs and an opinion (or disclaimer of opinion) on compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a direct and material effect on each major program in accordance with the Single Audit Act Amendments of 1996 and OMB Circular A-133, Audits of States, Loca/ GovernnrenJS, and Nan-Profrt Organizations. The reports on Intemal control and compliance will each include a statement that the report is intended solely for the information and use of mattagetnent, the body or individuals charged with governance, others within the entity specific Iegislalive or regulatory bodies, federal awarding agencies, and if applicable, pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America; the standards for financial audits contained in Government Auditing Strn7dar•ds, issued by the Comptroller General of the United States; the Single Audit Act Amendments of 1996; and the provisions of OMB Circular A-133, and will include tests of accounting records, a detennination of major programs in accordance with OMB Circulat• A-133, and other procedures we consider necessary to enable us to express such opinions and to render the required reports. If our opinions on the financial statements or the Single Audit compliance opinions are other than unqualified, we will fully 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. Management Responsibilities Management is responsible for the basic financial statements and all accompanying information as well as all representations contained therein. Management is also responsible for identifying governnent award programs and understanding and complying with the compliance requirements, and for preparation of the schedule of expenditures of federal awards in accordance with the requirements of OMB Circular A-133. You are responsible for making all management decisions and performing all management functions relating to the financial statements, schedule of expenditures of federal awards, and related notes and for accepting full responsibility for such decisions. You will be required to acknowledge in the management representation letter that you have reviewed and approved the financial statements, schedule of expenditures of federal awards, and related notes prior to their issuance and have accepted responsibility for them. Further, you are required to designate alt individual with suitable skill, knowledge, or experience to oversee any nonaudit services we provide and for evaluating the adequacy and results of those services and accepting responsibility for them. Management is responsible for establishing and maintaining effective intental controls, including Intemal controls over compliance, and for evaluating and monitoring ongoing activities, to help ensure that appropriate goals and objectives are met and that there is reasonable assurance that government programs are administered in compliance with compliance requirements. You are also responsible for the selection and application of accounting prirtciplcs; for the fair presentation in the financial statements of the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component unit and the major fund of the City of Meridian, Idaho and the respective changes in financial position and, where applicable, cash flows in conformity with U.S. generally accepted accounting principles; and for compliance with applicable laws and regulations and the provisions of contracts and grant agreements. Management is also responsible for making all financial records and related information available to us and for ensuring that management and financial information is reliable and properly recorded. Your responsibilities also include identifying significant vendor relationships in which the vendor has responsibility for program compliance and for the accuracy and completeness of that information. Your responsibilities include adjusting the financial statements to correct material misstatements and confirming to us in the representation letter that the effects of any uncorrected misstatements 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. You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud or illegal acts affecting the government involving (I) management, (2) employees who have significant roles in intental control, and (3) others where the fraud or illegal acts could have a material effect on the financial statements. Your responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud affecting the government received in communications from employees, fonner employees, grantors, regulators, or others. In addition, you are responsible for identifying and ensuring that the entity complies with applicable laws, regulations, contracts, agreements, and grants. You are responsible for the preparation of the supplementary information inconformity with U.S. generally accepted accounting principles. You agree to include our report on the supplementary information in any document that contains and indicates that we have reported on the supplementary information. You also agree to include the audited financial statements with any presentation of the supplementary irrforrnation that includes our report thereon. Management is responsible for establishing and maintaining a process for tracking the status of audit findings and recommendations, Management is also responsible for identifying fox tts previous financial audits, attestation engagements, performance audits, or other studies related to the objectives discussed in the Audit Objectives section of this letter. This responsibility includes relaying to us corrective actions taken to address significant findings and recommendations resulting from those audits, attestation engagements, performance audits, or studies, You are also responsible for providing management's views on our current findings, conclusions, and recommendations, as well as your planned corrective actions, for the report, and for the timing and format for providing that information. Audit Procedures-General An audit includes examining, on a test basis, evidence supporting the arnouuts and disclosures in the financial statements; therefore, our audit will involve judgment about the number oftransactions to be examined and the areas to be tested. We wilt plan and perform the audit to obtain reasonable rather than absolute assurance about whether the financial statements are free of material misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the entity or to acts by management or employees acting oft behalf of the entity. Because the determination of abuse is subjective, Government Auditing Standards do not expect auditors to provide reasonable assurance of detecting abuse. Because an audit is designed to provide reasonable, but not absolute assurance and because we will not perform a detailed examination of all transactions, there is a risk that material misstatements or noncompliance may exist and not be detected by us, In addition, an audit is not designed to detect immaterial misstatements or violations of laws or govenmental regulations that do not have a direct and material effect on the financial statements or major programs. However, we will inform you of any material errors and any fraudulent financial reporting or misappropriation of assets that come to our attention. We will also inform you of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential, and of any material abuse that comes to our attention. We will include such matters in the reports required for a Single Audit. Our responsibility as auditors is limited to the period covered by our audit and does not extend to any later periods for which we are not engaged as auditors. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, funding sources, creditors, and financial institutions. We will request written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will require certain written representations from you about the financial statements and related matters. Audit Procedures-Internal Controls Our audit will include obtaining an understanding of the entity and its environment, including intemal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit procedures. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the financial statements. Our tests, if performed, will be less in scope than would be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed in our report on intemal control issued pursuant to Governmen! Auditing Standards. As required by OMB Circular A-133, we with perform tests of controls over compliance to evaluate the effectiveness of the design and operation of controls that we consider relevant to preventing or detecting material noncompliance with compliance requirements applicable to each major federal award program. Flowever, our tests will be less in scope than would be necessary to render an opinion on those controls and, accordingly, no opinion will be expressed in our report on intemal control issued pursuant to OMB Circular A-133. An audit is not designed to provide assurance on internal control or to identify significant deficiencies. However, during the audit, we will communicate to management and those charged with governance internal control related matters that are required to be communicated under AICPA professional standards, Government Auditing Standards, and OMB Circular A-133. Audit Procedures-Compliance As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of City of Meridian, Idaho's compliance with applicable laws and regulations and the provisions of contracts and agreements, including grant agreements. However, the objective of those procedures will not be to provide an opinion on overall compliance and we will not express such an opinion in our report on compliance issued pursuant to Governrnenl Audiiing Standards. OMB Circular A-133 requires that we also plan and perform the audit to obtain reasonable assurance about whether the auditee has complied with applicable laws and regulations and the provisions of contracts and grant agreements applicable to major programs. Our procedures wilt consist of tests of transactions and other applicable procedures described in the OMB Circular A-133 Compliance Supplement and related addenda for the types of compliance requirements that could have a direct and material effect on each of City of Meridian, Idaho's major programs. The purpose of these procedures will be to express an opinion on City of Meridian, Idaho's compliance with requirements applicable to each of its major programs in our report on compliance issued pursuant to OMB Circular A-133. Engagement Administration, Fees, and Other We may from time to time, and depending on the circmnstances, use third-party service providers in serving your account. We may share confidential information about you with these service providers, but remain committed to maintaining the confidentiality and security of your information. Accordingly, we maintain internal policies, procedures, and safeguards to protect the confidentiality of your personal information. In addition, we will secure confidentiality agreements with alt service providers to maintain the confidentiality of your information and we will take reasonable precautions to determine that they have appropriate procedures in place to prevent the unauthorized release of your confidential information to others. In the event that we are unable to secure an appropriate confidentiality agreement, you will be asked to provide your consent prior to the sharing of your confidential information with the third-party service provider. Furthermore, we will remain responsible for the work provided by any such third-party service providers. We understand that your employees will prepare all cash, accounts receivable, or other confirmations we request and will locate any documents selected by us for testing. At the conclusion of the engagement, we will complete the appropriate sections of the Data Collection Form that summarizes our audit findings. It is management's responsibility to submit the reporting package (including financial statements, schedule of expenditures of federal awards, sutntnary schedule of prior audit findings, auditors' reports, and corrective action plan) along with the Data Collection Form to the federal audit clearinghouse. We will coordinate with you the electronic submission and certification. If applicable, we will provide copies of our report for you to include with the reporting package you will submit to pass-through entities. The Data Collection Form and the reporting package must be submitted within the earlier of 30 days after receipt of the auditors' reports or nine months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audits. The audit documentation for this engagement is the property of Hide Bailly LLP and constitutes confidential information. However, pursuant to authority given by law or regulation, we may be requested to make certain audit documentation available to granting agencies or its designee, a federal agency providing direct or indirect funding, or the U.S. Government Accountability Office for purposes of a quality review of the audit, to resolve audit findings, or to carry out oversight responsibilities. We will notify you of any such request. If requested, access to such audit documentation will be provided under the supervision of Bide Bailly LLP personnel. Furthermore, upon request, we may provide copies of selected audit documentation to the aforementioned parties. These parties may intend, or decide, to distribute the copies or information contained therein to others, including other governmental agencies. The audit documentation for this engagement will be retained for a minimum of five years after the report release or for arty additional period requested by the United States Government Accountability Office. If we are aware that a federal awarding agency, pass-through entity, or auditee is contesting an audit finding, we wilt contact the party(ies) contesting the audit finding for guidance prior to destroying the audit documentation. We expect to begin our audit on approximately January 7, 2012. Kevin Smith is the engagement partner and is responsible for supervising the engagement and signing the reports or authorizing another individual to sign them. Our fee for these services will be at our standard hourly rates plus out-of-pocket costs (such as report reproduction, word processing, postage, copies, telephone, etc.) except that we agree that our gross fee, including expenses, will not exceed the base fee of 42,250 for the audit, in addition the three single audits will be charged at $3,500 each totaling $10,500. The fee is based on the assumption that three single audits will be required. Our fee for each additional federal program that requires a single audit will be $3,500. Our standard hourly rates vary according to the degree of responsibility involved and the experience level of the personnel assigned to your audit. Our invoices for these fees will be rendered each month as work progresses and are payable on presentation. In accordance with our firm policies, work may be suspended ifyour account becomes 60 days or more overdue and may not be resumed until your account is paid in full. If we elect to terminate our services for nonpayment, our engagement will be deemed to have been completed upon written notification of termination, even if we have not completed our report. You will be obligated to compensate us for al] time expended and to reimburse us for all out-of-pocket costs through the date of termination. The above fee is based on 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 attive at a new fee estimate before we incur the additional costs. Governrrrent Auditing Standards require that we provide you with a copy of our most recent external peer review report and any letter of comment, and any subsequent peer review reports and letters of comment received during the period of tltc contract. Our 2011 peer review report accompanies this letter. Disnute 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 arty reason ("Dispute"). Specifically, we agree to first mediate before pursuing any other legal remedies available. NfPr~intinn 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. 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 other legal remedies on a Dispute after the mediator declares an impasse. If any Dispute has not been resolved within ninety (90) days after the written mediation notice, the mediation shall ternunate and the Dispute will be settled by other legal remedies. We appreciate the opportunity to be of service to City of Meridian, Idaho and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. We appreciate the opportunity to be of service to City of Meridian, Idaho and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. EIDE BAILEY LLP Kevin Smith, Partner ACCEPTED BY: City of Meridian, Idaho. Ma l ~a` Signature Date System Review Report To the Partners of Eide Bailly LLP and the 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 non-SEC issuers in effect for the year ended July 31, 201 1. Our pear 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. 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 alt 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 staudards at www.a i cpa.org/prsu mmary. As required by the standards, engagements selected for review included engagements performed under the Corernment Auditing Standards, audits of employee benefit plans, and audits performed under FDICIA. In our opinion, the system of quality control for the accounting and auditing practice of Eide Bailly LLP applicable to nat-SEC issuers in effect for the year ended July 31, 2011, 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 n~irh defrciency(ies) or jai/. Eide Bailly LLP has received a peer review rating of pass. Cherry, Bckacrt & Holland, L.L.P. November 21, 2011