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FYE2012 to FYE2014 1st Amendment 12/11/2013AMY REAVILIN, CPA m eov ne 94119% IT Pn11DT 4_ PAMDTQAI 1 CQ 3 CLERK OF U MONROE COUNTY, FLORIDA tORID DATE: January 6, 2013 TO: Bob Shillinger County Attorney A TTN: Kathy Peters FROM: Vitia Fernandez, D. At the December 11` 2013VBoard of County Commissioner's meeting the Board granted approval of Item 06 First Amendment to Monroe County Audit Contract dated July 18, 2012 with Cherry Bekaert LLP, to provide specific project closeout audit of State Revolving Fund Loan WW602091 between Monroe County and State of Florida, Department of Environmental Protection, which provided funding from the Clean Water State Revolving Fund for the Big Coppitt wastewater project, as required by paragraph 2.03 of the loan agreement. Enclosed is a duplicate original of the above - mentioned for your handling. Should you have any questions, please feel free to contact our office. cc: County Attorney Finance File 500 Whitehead Street Suite 101, PO Box 1980, Key West FL 33040 Phone: 305 - 295 -3130 Fax: 305 - 295 -3663 3117 Overseas Highway, Marathon, FL 33050 Phone: 305 - 289 -6027 Fax: 305- 289 -6025 88820 Overseas Highway, Plantation Key, FL 33070 Phone: 852 -7145 Fax: 305- 852 -7146 COUNTY OF MONROE, FLORIDA AUDIT CONTRACT FIRST AMENDMENT This is an amendment (First Amendment) to the contract dated July 18, 2012 ( "Audit Contract "), by and between the Board of County Commissioners of Monroe County, Florida (hereinafter "County ") and Cherry, Bekaert & Holland, L.L.P. (hereinafter "Auditor "), a Certified Public Accountant limited liability partnership licensed to do business within the State of Florida (collectively, the "Parties "). WHEREAS, the County is required under paragraph 2.03(4) of loan agreement WW602091 by and between Monroe County and the State of Florida, Department of Environmental Proection setting the terms and conditions for a State Revolving Fund loan in connection with the Big Coppitt wastewater system to conduct a project - specific closeout audit after the close of construction costs for the project; and WHEREAS, the Clerk of the Court wishes to engage the Auditor for the purpose of conducting the project - specific audit in addition to those duties already outlined in the Audit Contract; and WHEREAS, the Auditor will accept the additional responsibilities; and WHEREAS, it is advisable to update the Audit Contract to reflect the name change of the auditing firm from Cherry, Bekaert L.L.P. to Cherry Bekaert L.L.P.; now therefore IN CONSIDERATION of the mutual promises, benefits and covenants set forth herein, the Parties agree as follows: 1. Under Section 1, SCOPE OF SERVICES, anew paragraph 1.11 is added, as follows: 1.11 The Aaditcr shall perform the project -s pecif c closeout audit of the County's Florida Department of Environmental Protection Loan No. WW602091 from April 22, 2010 (date of inception) through loan close -out. The audit shall consist of an audit of special purpose financial statement of the loan revenues and expenditures, budget and actual, and shall be based on special purpose financial statements supplied by the Monroe County Clerk, as outlined in the engagement letter dated December 4, 2013, by and between Auditor and County. 2. Under Section 4, COMPENSATION AND TERMS OF PAYMENT, a new paragraph is added, as follows: In return for the project - specific closeout audit referenced in paragraph 1. 11, the Auditor shall receive a fee in the amount of one hundred twenty dollars ($120.00) per hour times the number of hours worked on the project up to a maximum of one hundred hours, or twelve thousand dollars ($12,000.00). This fee shall be inclusive of all fees and costs. Notwithstanding the terms set forth in the engagement letter dated December 4, 2013, the contractual fee will be paid in accordance with the Florida Local Government Prompt Payment Act. 3. The name of the firm is changed from Cherry, Bekaert & Holland LLP to Cherry Bekaert LLP wherever it appears in the Audit Contract including this amendment. 4. All other terms and conditions of the Audit Contract dated July 18, 2012 remain in full force and effect. WHEREOF, the Parties hereto have caused this agreement to be executed on the year first above written. Y HEAVILIN, lerk BOARD OF COUNTY COMMISSIONERS OF MONROE CO Y, FLORIDA Deputy Jerk By: Mayor /Chairperson WITNESSES: �Pdt.�4 Q PriIne: �A�' %c►n �N Prie: TOR: By: Partner Print name: cdw qre( T - Eurke: r� C7 O r� MONROE COUNTY ATTORNEY '3 APP OVE AS TO FOR z —: c NTHIA L. ALL ASSIST T COUNTY ATTORNEY -- a � Date �a- a3 -aoi3 2 Cherry Bekaert ILI CPAs & Advisors December 4, 2013 Mrs. Amy Heavilin, CPA Clerk of Circuit Court and Comptroller Monroe County, Florida 500 Whitehead Street Key West, Florida 33040 Dear Mrs. Heavilin: This engagement letter between Monroe County, Florida (hereafter referred to as the "County") and Cherry Bekaert LLP (the "Firm" or "Cherry Bekaert") sets forth the nature and scope of the services we will provide, the County's required involvement and assistance in support of our services, the related fee arrangements and other Terms and Conditions, which are attached hereto and incorporated by reference, designed to facilitate the performance of our professional services and to achieve the mutually agreed upon objectives of the County. SUMMARY OF SERVICES We will provide the following services to the County: Audit services 1. We will audit the special purpose financial statements of the loan revenues and expenditures — budget and actual - of the County's Florida Department of Environmental Protection Loan No. WW602091 from April 22, 2010 (date of inception) through loan close -out. The special purpose financial statements are the responsibility of the County's management. YOUR EXPECTATIONS As part of our planning process, we have discussed with you your expectations of Cherry Bekaert, changes that occurred during the year, your views on risks facing you, any relationship issues with Cherry Bekaert, and specific engagement arrangements and timing. Our services plan, which includes our audit plan, is designed to provide a foundation for an effective, efficient, and quality- focused approach to accomplish the engagement objectives and meet or exceed your expectations. Our service plan will be reviewed with you periodically and will serve as a benchmark against which you will be able to measure our performance. Any additional services that you may request, and that we agree to provide, will be the subject of separate written arrangements. The engagement will be led by Eddie Burke, who will be responsible for assuring the overall quality, value, and timeliness of the services provided to you. AUDIT SERVICES The objective of our audit is to report on the fairness of presentation of the special purpose financial statements and the rules and regulations of the Florida Department of Environmental Protection. The special purpose financial statements are not intended to be a presentation in conformity with U.S. generally accepted accounting principles. �BAKE 2626 Glenwood Avenue, Suite 200, Raleigh, NC 27608 -1045 1 r 919.782.1040 1 cbh.com 1NTEKNA710NAL Monroe County, Florida December 4, 2013 Page 2 The reports on internal control and compliance will each include a paragraph that states that the purpose of the report is solely to describe (1) the scope of testing of internal control over financial reporting and compliance and the result of that testing and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance, and (2) that the report is an integral part of an audit performed in accordance with Government Auditing Standards in considering internal control over financial reporting and compliance. The paragraph will also state that the report is not suitable for any other purpose. Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America; Government Auditing Standards, issued by the Comptroller General of the United States; the rules and regulations of the Florida Department of Environmental Protection; and will include tests of accounting records and other procedures as deemed necessary to enable us to express such opinions and to render the required reports. If any of our opinions resulting from the procedures described above 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 issue a report as a result of this engagement. FEES The estimated fee contemplates only the services described in the Summary of Services section of this letter. If Management requests additional services not listed above, we will provide an estimate of those fees prior to commencing additional work. The following summarizes the fees for the services described above: Description of Services Audit services Audit of the special purpose financial statements for a fee in the amount of one hundred twenty dollars ($120.00) per hour times the number of hours worked on the project up to a maximum of one hundred hours, or twelve thousand dollars ($12,000.00). The fees will be billed periodically. Invoices are due on presentation. A service charge will be added to past due accounts equal to 1% per month (12% annually) on the previous month's balance less payments received during the month, with a minimum charge of $2.00 per month. If the foregoing is in accordance with your understanding, please sign a copy of this letter in the space provided and return it to us. If you have any questions, please call Eddie Burke at 919- 782 -1040. Monroe County, Florida December 4, 2013 Page 3 Sincerely, CHERRY BEKAERT LLP ATTACHMENT - Engagement Letter Terms and Conditions Monroe County, Florida ACCEPTED BY: TITLE: �%� DATE: 1 4 Ll1 CJ LL c: LA-1 i LL- U � s � L a Li C -� -i ct: CD MONROE COUNTY ATTORNEY RO DA T F M: CYNTHIA L. ALL A. S, Af�T C�3 NTY Date mod! Attachment - Page 1 Cherry Bekaert LLP Engagement Letter Terms and Conditions The following terms and conditions are an integral part of the attached engagement letter and should be read in their entirety in conjunction with your review of the letter. LIMITATIONS OF THE AUDIT REPORT Should the County wish to include or incorporate by reference these special purpose financial statements and our report thereon into any other document at some future date, we will consider granting permission to include our report into another such document at the time of the request. However, we may be required by generally accepted auditing standards ( "GAAS ") to perform certain procedures before we can give our permission to include our report in another document such as an annual report, private placement, regulator filing, official statement, offering of debt securities, etc. You agree that you will not include or incorporate by reference these special purpose financial statements and our report thereon, or our report into any other document without our prior written permission. In addition, to avoid unnecessary delay or misunderstandings, it is important to provide us with timely notice of your intention to issue any such document. LIMITATIONS OF THE AUDIT PROCESS In conducting the audit, we will perform tests of the accounting records and such other procedures as we consider necessary in the circumstances to provide a reasonable basis for our opinion on the special purpose financial statements. We also will assess the accounting principles used and significant estimates made by Management, as well as evaluate the overall financial statement presentation. Our audit will include procedures designed to obtain reasonable assurance of detecting misstatements due to errors or fraud that are material to the financial statements. Absolute assurance is not attainable because of the nature of audit evidence and the characteristics of fraud. For example, audits performed in accordance with GAAS are based on the concept of selective testing of the data being examined and are, therefore, subject to the limitation that material misstatements due to errors or fraud, if they exist, may not be detected. Also, an audit is not designed to detect matters that are immaterial to the financial statements. In addition, an audit conducted in accordance with GAAS does not include procedures specifically designed to detect illegal acts having an indirect effect (e.g., violations of fraud and abuse statutes that result in fines or penalties being imposed on the County) on the special purpose financial statements. Similarly, in performing our audit we will be aware of the possibility that illegal acts may have occurred. However, it should be recognized that our audit provides no assurance that illegal acts generally will be detected, and only reasonable assurance that illegal acts having a direct and material effect on the determination of financial statement amounts will be detected. We will inform you with respect to errors and fraud, or illegal acts that come to our attention during the course of our audit unless clearly inconsequential. In the event that we have to consult with the County's counsel or counsel of our choosing regarding any illegal acts we identify, additional fees incurred may be billed to the County. You agree to cooperate fully with any procedures we deem necessary to perform with respect to these matters. If, for any reason, we are unable to complete the audit, or are unable to form, or have not formed an opinion on the special purpose financial statements, we may decline to express an opinion or decline to issue a report as a result of the engagement. We will notify the appropriate party within your organization of our decision and discuss the reasons supporting our position. Attachment - Page 2 MANAGEMENT'S RESPONSIBILITIES RELATED TO THE AUDIT Management is responsible for the fair presentation of the special purpose financial statements, for making all financial records and related information available to us, for ensuring that all material information is disclosed to us, and for identifying and ensuring that the County complies with the laws and regulations applicable to its activities and with the provisions of contracts and grant agreements. Management is also responsible for adjusting the special purpose financial statements to correct material misstatements, informing us of events that occurred subsequent to the statement date until the date of the auditor's report that might affect the special purpose financial statements or related disclosures and informing us of any discovery of facts related to items that existed at the financial statement date that might affect the special purpose financial statements or related disclosures. Management is responsible for informing us of its views regarding the risk of fraud at the County. Management must inform us of their knowledge of any allegations of fraud or suspected fraud affecting the County received in communications from employees, former employees, regulators, or others and for informing us about all known or suspected fraud affecting the County involving (a) Management, (b) employees who have significant roles in internal control, and (c) others where the fraud could have a material effect on the financial statements. Management is responsible for the design and implementation of programs and controls over financial reporting and to prevent and detect fraud. Appropriate supervisory review procedures are necessary to provide reasonable assurance that adopted policies and prescribed procedures are adhered to and to identify errors and fraud or illegal acts. As a part of our audit, we will consider the County's internal control structure, as required by GAAS, sufficient to plan the audit and to determine the nature, timing, and extent of auditing procedures necessary for expressing our opinion concerning the financial statements. An audit is not designed to provide any assurance on internal controls. As part of our consideration of the County's internal control structure, we will inform you of matters that come to our attention that represent significant deficiencies or material weaknesses in the design or operation of the internal control structure. Management is responsible for establishment and maintenance of a process for tracking the status of audit findings and recommendations. Management is also responsible for identifying to us previous audits or other engagements or 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 or other engagements 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, and the timing and format related thereto. At the conclusion of the engagement, Management will provide to us a representation letter that, among other things, addresses (1) Management's responsibilities related to the audit and confirms certain representations made to us during the audit, including, Management's acknowledgement of its responsibility for the design and implementation of programs and controls to prevent and detect fraud; (2) Management's responsibilities related to the monitoring of internal control over financial reporting; and (3) Management's knowledge, directly or from allegations by others, of fraud or suspected fraud affecting the County. The representation letter will also affirm to us that Management believes that the effects of any uncorrected misstatements, if any, pertaining to the financial statements are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. The Firm will rely on Management providing these representations to us, both in the planning and performance of the audit, and in considering the fees that we will charge to perform the audit. Because we will be relying on Management's representations, you agree to indemnify the Firm, and its partners and employees, and hold them harmless from all claims, liabilities, losses, and costs arising in circumstances where there has been a known misrepresentation by an officer or employee of the County regardless of whether such officer or employee was acting in the County's interest, and even if the Firm acted negligently or Attachment - Page 3 wrongfully in failing to uncover or detect such misrepresentation. This indemnification will survive termination of this letter. AUDIT PROCEDURES — GENERAL An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the special purpose financial statements; therefore, our audit will involve professional judgment about the number of transactions to be examined and the areas to be tested. We will plan and perform the audit to obtain reasonable rather than absolute assurance about whether the special purpose 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 County or to acts by management or employees acting on behalf of the County. 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 governmental 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 fraud, or illegal acts that come to our attention during the course of our audit. We will also inform you of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. 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, 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 also 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 County and its environment, including internal controls, 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 special purpose 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 special purpose 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 internal control issued pursuant to Government Auditing Standards. 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 professional standards, and Government Auditing Standards. Attachment - Page 4 AUDIT PROCEDURES - COMPLIANCE As part of obtaining reasonable assurance about whether the special purpose financial statements are free of material misstatement, we will perform tests of the County's compliance with applicable laws and regulations and the provisions of the Florida Department of Environmental Protection Loan No. WW602091. 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 Government Auditing Standards. Communications At the conclusion of the audit engagement, we may provide Management and those charged with governance a letter stating any significant deficiencies or material weaknesses which may have been identified by us during the audit and our recommendations designed to help the County make improvements in its internal control structure and operations related to the identified matters discovered in the financial statement audit. As part of this engagement we will ensure that certain additional matters are communicated to the appropriate members of the County. Such matters include (1) our responsibility under GARS; (2) the initial selection of and changes in significant accounting policies and their application; (3) our independence with respect to the County; (4) the process used by Management in formulating particularly sensitive accounting estimates and the basis for our conclusion regarding the reasonableness of those estimates; (5) audit adjustments, if any, that could, in our judgment, either individually or in the aggregate be significant to the financial statements or our report; (6) any disagreements with Management concerning a financial accounting, reporting or auditing matter that could be significant to the financial statements; (7) our views about matters that were the subject of Management's consultation with other accountants about auditing and accounting matters; (8) major issues that were discussed with Management in connection with the retention of our services, including, among other matters, any discussions regarding the application of accounting principles and auditing standards; and (9) serious difficulties that we encountered in dealing with Management related to the performance of the audit. Government Auditing Standards require that we provide you with a copy of our most recent quality control review report. Our most recent peer review report accompanies this letter. OTHER MATTERS Access to working papers The working papers and related documentation for the engagement are the property of the Firm and constitute confidential information. We have a responsibility to retain the documentation for a period of time to satisfy legal or regulatory requirements for records retention. Except as discussed below, any requests for access to our working papers will be discussed with you prior to making them available to requesting parties. We may be requested to make certain documentation available to regulators, governmental agencies (e.g., SEC, PCAOB, HUD, DOL, etc.) or their representatives ( "Regulators ") pursuant to law or regulations. If requested, access to the documentation will be provided to the Regulators. The Regulators may intend to distribute to others, including other governmental agencies, our working papers and related documentation without our knowledge or express permission. You hereby acknowledge and authorize us to allow Regulators access to and copies of documentation as requested. In addition, our Firm, as well as all other major accounting firms, participates in a "peer review" program covering our audit and accounting practices as required by the American Institute of Certified Public Accountants. This program requires that once every three years we subject our quality assurance practices to an examination by another accounting firm. As part of the process, the other firm will review a sample of our work. It is possible that the work we perform for you may be selected by the other firm for their review. If it is, they are bound by professional standards to keep all information confidential. If you object to having the work we do for you reviewed by our peer reviewer, please notify us in writing. Attachment - Page 5 Electronic transmittals During the course of our engagement, we may need to electronically transmit confidential information to each other, within the Firm, and to other entities engaged by either party. Although email is an efficient way to communicate, it is not always a secure means of communication and thus, confidentiality may be compromised. You agree to the use of email and other electronic methods to transmit and receive information, including confidential information between the Firm, the County and other third party providers utilized by either party in connection with the engagement. Subpoenas In the event we are requested or authorized by you or required by government regulation, subpoena, or other legal process to produce our working papers or our personnel as witnesses with respect to our engagement for you, you will, so long as we are not a party to the proceeding in which the information is sought, reimburse us for our professional time and expense, as well as the fees and expenses of our counsel, incurred in responding to such a request at standard billing rates. Dispute resolution procedures If any dispute, controversy or claim arises in connection with the performance or breach of this agreement, either party may, on written notice to the other party, request that the matter be mediated. Such mediation would be conducted by a mediator appointed by and pursuant to the rules of the American Arbitration Association (AAA) or such other neutral facilitator acceptable to both parties. Both parties would exert their best efforts to discuss with each other in good faith their respective positions in an attempt to finally resolve such dispute, controversy, or claim. TERMS AND CONDITIONS SUPPORTING FEE The estimated fees set forth in the attached engagement letter are based on anticipated full cooperation from your personnel, timely delivery of requested audit schedules and supporting information, timely communication of all significant accounting and financial reporting matters, the assumption that unexpected circumstances will not be encountered during the audit, as well as working space and clerical assistance as mutually agreed upon and as is normal and reasonable in the circumstances. We strive to ensure that we have the right professionals scheduled on each engagement. As a result, sudden County requested scheduling changes or scheduling changes necessitated by the agreed information not being ready on the agreed upon dates can result in expensive downtime for our professionals. Any last minute schedule changes that result in downtime for our professionals could result in additional fees. Our estimated fee does not include assistance in bookkeeping or other accounting services not previously described. If for any reason the County is unable to provide such schedules, information and assistance, the Firm and the County will mutually revise the fee to reflect additional services, if any, required of us to achieve these objectives. The estimated fees contemplate that the County will provide adequate documentation of its systems and controls related to significant transaction cycles and audit areas. In providing our services, we will consult with the County with respect to matters of accounting, financial reporting or other significant business issues as permitted by professional standards. Accordingly, time necessary to effect a reasonable amount of such consultation is reflected in our fee. However, should a matter require research, consultation or audit work beyond that amount, the Firm and the County will agree to an appropriate revision in our fee. Attachment - Page 6 The estimated fees are based on auditing and accounting standards effective as of the date of this engagement letter and known to apply to the County at this time, but do not include any time related to the application of new auditing or accounting standards that impact the County for the first time. If new auditing or accounting standards are issued subsequent to the date of this letter and are effective for the period under audit, we will estimate the impact of any such standard on the nature, timing and extent of our planned audit procedures and will communicate with you concerning the scope of the additional procedures and the estimated fees. The County agrees to pay all costs of collection (including reasonable attorneys' fees) that the Firm may incur in connection with the collection of unpaid invoices. In the event of nonpayment of any invoice rendered by us, we retain the right to (a) suspend the performance of our services, (b) change the payment conditions under this engagement letter, or (c) terminate our services. If we elect to suspend our services, such services will not be resumed until your account is paid. If we elect to terminate our services for nonpayment, the County will be obligated to compensate us for all time expended and reimburse us for all expenses through the date of termination. This engagement letter sets forth the entire understanding between the County and the Firm regarding the services described herein and supersedes any previous proposals, correspondence, and understandings whether written or oral. Any subsequent changes to the terms of this letter, other than additional billings, will be rendered in writing and shall be executed by both parties. Should any portion of this engagement letter be ruled invalid, it is agreed that such invalidity will not affect any of the remaining portions. www.eisnerampertern August 27, 2010 System Review Report To the Partners of Cherry, Bekaert & Holland L.L.P. and the National Peer Review Committee We have reviewed the system of quality control for the accounting and auditing practice of Cherry, Bekaert & Holland L.L.P. (the firm) applicable to non -SEC issuers in effect for the year ended April 30, 2010. 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. 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 y yww.aicpa.orelprsummary . As required by the standards, engagements selected for review included engagements performed under Government Auditing Standards; audits of employee benefit plans, and an audit performed under FDICIA. In our opinion, the system of quality control for the accounting and auditing practice of Cherry, Bekaert & Holland L.L.P., applicable to non -SEC issuers in effect for the year ended April 30, 2010, 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. Cherry, Bekaert & Holland L.L.P. has received a peer review rating of pass. C EisnerAmper LLP New Yo4 New Jersey i Pennsylvania Cayman Islands Ens ArnW a an independent number cl PKr lnlm , ionol Cnnited Eisn 8 EISNERAMPER 2015 Lincoln Highway , P.O. Box 9888 eccou�•a..s a •ovso�. J Edison. NJ 08818 T 732.2871000 F 732.287.3200 www.eisnerampertern August 27, 2010 System Review Report To the Partners of Cherry, Bekaert & Holland L.L.P. and the National Peer Review Committee We have reviewed the system of quality control for the accounting and auditing practice of Cherry, Bekaert & Holland L.L.P. (the firm) applicable to non -SEC issuers in effect for the year ended April 30, 2010. 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. 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 y yww.aicpa.orelprsummary . As required by the standards, engagements selected for review included engagements performed under Government Auditing Standards; audits of employee benefit plans, and an audit performed under FDICIA. In our opinion, the system of quality control for the accounting and auditing practice of Cherry, Bekaert & Holland L.L.P., applicable to non -SEC issuers in effect for the year ended April 30, 2010, 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. Cherry, Bekaert & Holland L.L.P. has received a peer review rating of pass. C EisnerAmper LLP New Yo4 New Jersey i Pennsylvania Cayman Islands Ens ArnW a an independent number cl PKr lnlm , ionol Cnnited ; A I C PA AICPA Peer Review Program Administered by the National Peer Review Committee October 7, 2010 Howard Joseph Kies, CPA Cherry Bekaert & Holland LLP 1700 Bayberry Ct Ste 300 Ste 300 Richmond, VA 23226 Dear Mr. Kies It is my pleasure to notify you that on September 16, 2010 the National Peer Review Committee accepted the report on the most recent system peer review of your firm. The due date for your next review is October 31, 2013. This is the date by which all review documents should be completed and submitted to the administering entity. As you know, the report had a peer review rating of pass. The Committee asked me to convey its congratulations to the firm. Sincerely, P 4 Robert Rohweder Chair — National PRC nprc ataicpa.org919 402 -4502 cc: Lawrence Gray, CPA Firm Number: 1001 1816 Review Number: 309298 American inatitu)e of Certified Pudic Accountants 220 Leigh Farm Road. Durham. NC 27707 • (919) 402 -0500 • fax (919) 402 -4505 • www.alcpa.org ISO Cortow