Item M7M
C ounty of f Monroe
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BOARD OF COUNTY COMMISSIONERS
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Mayor David Rice, District 4
Th e Florida Keys
Mayor Pro Tem Sylvia J. Murphy, District 5
Danny L. Kolhage, District 1
George Neugent, District 2
Heather Carruthers, District 3
County Commission Meeting
January 17, 2018
Agenda Item Number: M.7
Agenda Item Summary #3797
BULK ITEM: Yes DEPARTMENT: County Administrator
TIME APPROXIMATE: STAFF CONTACT: Lindsey Ballard (305) 292 -4443
No
AGENDA ITEM WORDING: Approval of Florida Audit Contract with Cherry Bekaert LLP for
external auditing services for FY 2017 and FY 2018, with the option to extend the agreement for a
third year at the sole election of the County.
ITEM BACKGROUND: In June 2017, the BOCC issued a Request for Proposals, seeking
proposals from qualified vendors for external auditing services for the County, constitutional officers
and the Monroe County Land Authority. Pursuant to F.S. 218.391, the RFP asked for qualifications
only — not prices. Thereafter, pursuant to the statute, an Audit Selection Committee was convened to
review and rank the proposals. On July 19, 2017, the Audit Selection Committee presented its
recommendations to the Board of County Commissioners (BOCC), and obtained the approval of the
BOCC to negotiate a contract with the top- ranked firm, Cherry Bekaert LLP. The Audit Selection
Committee also recommended that the term of any resulting contract be limited to two (2) years,
with the option of an additional year at the sole election of the County.
The County negotiated an agreement with Cherry Bekaert. The resulting contract will provide the
same professional auditing services as offered currently, for the fiscal years ending September 30,
2017 and September 30, 2018, with the option to extend the contract at the sole election of the
County for a third year. The all- inclusive fixed fee price for Year 1 ($301,920) represents a 2%
increase over the price for the audit covering fiscal year 2016. The contract fee would increase an
additional 2% in Year 2. The fees for any extension year would be negotiated separately.
PREVIOUS RELEVANT BOCC ACTION: July 19, 2017, BOCC granted approval to negotiate
the contract with Cherry Bekaert LLP.
CONTRACT /AGREEMENT CHANGES:
N/A
STAFF RECOMMENDATION: Approval.
DOCUMENTATION:
EXECUTED Florida Audit Contract Cherry Bekaert 1 9 18
Second Amendment to Cherry Bekaert audit contract
June agenda item N -7
FINANCIAL IMPACT:
Effective Date: January 17, 2018
Expiration Date: Terminates upon completion of the financial audits for the fiscal years.
Total Dollar Value of Contract: $301,920 in Year 1; $307,958 in Year 2.
Total Cost to County: $301,920 in Year 1; $307,958 in Year 2.
Current Year Portion:
Budgeted: Yes
Source of Funds:
CPI: No.
Indirect Costs:
Estimated Ongoing Costs Not Included in above dollar amounts:
Revenue Producing: No
Grant:
County Match:
Insurance Required:
Additional Details:
If yes, amount:
REVIEWED BY:
Cynthia Hall
Completed
12/29/2017 6:33 PM
Lindsey Ballard
Completed
01/02/2018 8:12 AM
Budget and Finance
Completed
01/02/2018 8:55 AM
Maria Slavik
Completed
01/02/2018 8:56 AM
Kathy Peters
Completed
01/02/2018 9:09 AM
Board of County Commissioners
Pending
01/17/2018 9:00 AM
COUNTY OF MONROE,
FLORIDA A U DIT C ONTRAc T
This CONTRACT is made and entered into this . day of , 2018, by and
between the Board of County Commissioners of Monroe County (hereinafter "COUNTY"),
Florida, and Cherry Bekaert LLP (hereinafter "AUDITOR"), a Certified Public Accountant
limited partnership licensed to do business in the State of Florida.
WHEREAS, the Monroe County, Florida Audit Selection Committee, in accordance with
Section 218.391, Florida Statutes, has followed the statutory procedures, including public
notice, issued a competitive solicitation in order to secure auditor services, and ranked the
AUDITOR as the top firm and deemed it most qualified to provide professional auditing
services; and
W1 IFREAS, on July 19, 2017, the Audit Selection Committee presented its recommendation
to the Board of County Commissioners ("BOCC and obtained approval of the BOCC to
negotiate a contract with the firm; and
WHEREAS, terms satisfactory to both parties have been negotiated pursuant to said statute;
now therefore
1. SCOPE OF SERVICES.
term of this Agreement. The compensation stated in this Agreement will include the audit
procedures related to such additional fends or component units unless it is agreed by the
COUNTY and AUDITOR that they significantly and materially impact the audit. Auditor will
also provide examinations in accordance with Chapter 10,550, Rule 1(f556(I 0), of the Florida
Auditor General.
1.2 "the audit fieldwork, including any analytical review, shall be completed on-site in the
offices of the County, each Constitutional Officer and the dependent district.
1.3 The financial audit reports applicable to each of the agencies described in paragraph 1,
as required by F.S. 218.391 and Section 10.550 of the Rules of the Auditor General, shall
include the following:
1 .3.4. Accountant's reports on compliance with examination requirements
specified in Chapter 10.550, Rule 10.556{ 1 0), of the Florida Auditor General.
1.4 Other Reports. Reports shall include reports required by Government Auditing
Standards; and Federal and State Agencies. If applicable, reports issued pursuant to the Federal
and State of Florida Single Audit Acts shall be included.
L5 The AUDITOR will provide electronic versions of the COUNTY's financial
statements, including footnotes and related schedules included as part of the reporting process.
AUDYI`OR will also provide copies of any journal entries required to convert the financial
records fronarnodified accrual or budgetary basis accounting to full accrual.
1.6 It is recognized that one of the primary purposes of the audit is to be able to provide
assurances to state and federal funding agencies. If any of those agencies require an opinion
in a style or format different than the AUDITOR's standard style or format, the AUDITOR
shall reissue the opinion in a style or format acceptable to the funding agency,
I . providing such
format is in accordance with professional standards.
and meeting the County staffs continuing professional education requirements.
1.9 Should irregularities or other unforeseeable conditions be encountered which might
necessitate the extension of the auditing work beyond the scope of normal auditing procedures,
the AUDITOR agrees to advise the COUNTY in writing of the circumstances and to request
an increase in the total fees be made before significant additional costs are incurred. Any
request for additional time or additional fees shall be in writing and shall contain a detailed
explanation of the unforeseen conditions or irregularities, and why the additional fees are
necessary. Either a time extension or additional fees granted to AUDITOR is at the sole
discretion ofCOUNTY.
1.10 AUDITOR shall take reasonable steps to bring errors to the attention of an appropriate
level of COUNTY management so that management can take corrective action. Any
adjustments to the books and records will be made only after review and only on direction Of
responsible authority.
2. ASSISTANCE TO BE FURNISHED BY THE COUNTY.
It is understood and agreed that COUNTY and Constitutional Officers' staff participation in
the audit will be limited to activities within the normal course of business, and any assistance
with the audit by COUNTY personnel shall be limited to matters within the normal scope of
the employees'work responsibility,
The COUNTY will prepare and Famish to the AUDITOR certain work papers required to
support the financial infori under audit, but they will be in the former designed by the
COUNTY.
The COUNTY will:
a. Download the trial balance, including actual balances and original and final budgets,
'rom the COUNTY'S accounting software to Excel spreadsheets.
b. Prepare the financial statements and footnotes for each constitutional office, the
BOCC and the CAER,
a. Produce the introductory and statistical sections and the Management's Discussion
and Analysis sections of the CAFR.
f. Produce the Schedules of Federal Awards and State Financial Assistance.
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L , . Review the final CAER and BOCC Financial Staternents and maintain responsibility
for the contents.
3. TERM OF ENGAGEMENT.
40 COMPENSATION AND TERMS OF PAYMENT.
The COUNTY shall pay to the AUDITOR a fixed fee for the annual audit of the COUNTY's
financial statements according to the following fee schedule. This fee is all-inclusive, and no
charge for travel, telephone bills, copying or any other related fees or expenses shall be
billed. Payment under this agreement is contingent upon annual appropriation.
AUDIT FOR FISCAL YEAR ENDED CONTRACT AMOUNT
Septernber 30, 2017 $301,920
September 30. 2018
$307,958
The following hourly Ices shall apply to extra work done for the term of this contract by
AUDITOR, whether under this Agreement or for extra work requested by the Board of County
Commissioners:
Partner in
$
240
Senior
$
170
Manager
$
150
Senior
$
130
Staff
$
95
Clerical
$
60
An invoice for the portion of the total amount of the Agreement in proportion to the work
completed to date shall be submitted to the COUNTY on a monthly basis. The invoice will
include a description of work completed for each of the COUNTY entities to be audited, the
total amount of the agreement, billings to date and payments to date. The invoices shall be In
a form approved by the Clerk of the Circuit Court. The maxinlUrn amount to be paid prior to
fulfillment of the terms of the Agreement shall be ninety (90) percent of the total annual
compensation. The retainage will be payable upon completion ofeach year's audits,
5. RECORDS.
All working papers and reports will be retained by the ACDITOR, at the AUDITOR's expense,
for a mini rn of five years front the date the reports are issued, or such longer period as may be
required to satisfy legal and administrative requirements. The Auditor will be required to make
the working papers available, upon request, to the following parties or their designees
6. MODIFICATIONS, AMENDMENTS, ASSIGNMENT AND SUBCONTRACTING.
Any and all modifications of the terms of this agreement shall be only amended in writing and
approved by the Board of County Commissioners for Monroe County, - The AUDITOR shall not
assign or subcontract or transfer any interest in this Contract or assign any claims for money due
or to become due under this Contract without first obtaining written and executed consent from
COUNTY,
7. INDEPENDENT CONTRACTOR.
8. COMPLIANCE WITH LAW.
Inc ying out its obligations under this agreement, the AUDITOR shall abide by all statutes,
ordinances, rules and regulations pertaining to or regulating the provisions of this agreement,
including those now in effect and hereafter adopted. Any violation of said statutes, ordinances,
rules or regulations may constitute a material breach of this agreement, which would entitle the
COUNTY to terminate this agreement immediately upon delivery of written notice often ination
to the AUDITOR.
9. HOLD HARMLESS/INDEMNIFICATION.
10. ANTI-DISCRIMINATION.
The AUDITOR agrees that they will not discriminate against any of their employees or applicants
for employment or against persons for any benefit or service because of their race, color, religion,
sex, national origin, or physical or mental handicap where the handicap does not affect the ability
of an individual to perform in a position of employment, and to abide by all federal and state laws
regarding non - discrimination.
12. TER.MINATION FOR CONVENIENCE (WITHOUT CAUSE).
This Agreement may be terminated, without cause, by either of the parties. For each fiscal year
to be audited, written notice to the other party not later than May I of the fiscal year to be audited
will constitute appropriate cancellation of the Agreement.
13® TERMINATION FOR CAUSE (BREACH).
affirmatively collect damages.
T
The AUDITOR may terminate the Agreement for failure of tine COI.
e JNTY to fulfill its duties and
obligations upon giving the COUNTY sixty (60) days prior written notice,
14. ENTIRE AGREEMENT.
15. CONSENT TO JURISDICTION.
This Agreement, its performance, and all disputes arising hereunder, shall be governed by the
laws of the State of Florida, and both parties agree that the proper venue for any actions shall be
in Monroe County.
16, ETHICS CLAUSE.
17. PUBLIC ENTITY CRIME STATEMENT.
18. A11THORITY.
AUDITOR warrants that it is authorized by law to engage in the performance of the activities
encompassed by the project herein described.
Each of the signatories for the AUDITOR below certifies and warrants that the AU D ITOR's name
in this agreement is the full name as designated in its organizing documents; that they are
empowered to act and contract for the AUDITOR, and this agreement has been approved by the
legal governing body of the AUDITOR.
19. LICENSES.
The AUDITOR warrants that it shall have, prior to commencement of work under this agreement
and at all times during said work, all required licenses whether federal, state, COUNTY or City.
20. INSURANCE.
1. Workers Compensation insurance as required by Florida Statutes.
2. Commercial General Liability Insurance with minimum limits of $500,000 per
occurrence for bodily injury, personal injury and property damage.
3. Comprehensive Auto Liability Insurance with minimum thrifts of $ 3 300.000
combined single limit per occurrence,
4 Professional Liability Insurance which will respond to damages resulting from any
claim arising out of the performance of professional services or any error or
omission of the AUDITOR arising out of work governed by this agreement. Such
insurance shall have the following minimum amounts of liability: $250,000 per
Occurrence/$500,000 Aggregate,
The policies shall provide no less than 30 days' notice of cancellation, non-renewal or reduction
of coverage.
At all times during the term of th is agreement and for one year after acceptance of the project, the
AUDITOR shall maintain on file with the COUDTY a certificate of insurance showing that the
aforesaid insurance coverages are in effect.
21. NOTICE�
Any written notice to be given to either party under this agreement or related hereto shall be
addressed and delivered as follows
For AUDITOR:
Edward Burke, Partner
Cherry Bekaert LLP
2626 Glenwood Avenue- Suite 300
Raleigh, NC 27608
Kevin Madok, Clerk
500 Whitehead Street, Ste. 101
Key West, Florida 33040
County Attorney
P.O. Box 1026
Key West, FL 33041-1026
M=
Roman Gastesi
County Administrator
Cato Building
11 Simonton St.
Key West, FL 33040
22. ADDITIONAL PROVISIONS REQUIRED UNDER 2 CF R PART 200.
The following additional clauses are included in recognition of the fact that a portion of the funds
used to pay for the services described herein may come from federal awards, as that term is
defined in 2 CFR 200,367. In the event of a conflict between these provisions and any other term
in this Agreement, the following provisions shall control.
A SMALL AND MINORITY BUSINESSES, WOMEN'S BUSINESS
ENTERPRISES, AND LABOR SURPLUS AREA FIRMS.
The County strongly encourages the use of women-, minority- and veteran-owned business
enterprises (SBEs) and wishes to see a minimum of 25% of the contract or subcontracts awarded
pursuant to this REP go to SBEs. Contractors may search for Florida registered SBEs at:
http://www.dms.myflorida.com/agency administration/office of supplier diversity osd
Any proposal submitted in which the vendor is certified as an SBE, or in which the vendor
proposes to use subcontractors that are certified as SBEs, in Florida or another jurisdiction, must
submit proof of the registration or certification from the local authority in order to receive credit
for the use of" the SBE.
B AUDIT OF RECORDS
The A[JDITOR shall comply with federal and/or state laws autbodzing an audit of AUDITORS's
operation as a whole, or of specific Project activities.
Under no circumstances shall advertising or other communications with the media be presented
in such a manner as to County or imply that the AUDITOR or the AUDITOR's services are
endorsed by the County,
c PUBLIC ENTITIES CRIMES AND DEBARMENT
By signing this agreement, AUDITOR represents that the execution of this Agreement will not
violate the Public Entity Crimes Act (Section 287.133, Florida Statutes).
Violation of terms of this contract shall result in termination of this Agreement and recovery of
all monies paid hereto, suspension of the ability to bid on and perform County contracts, and may
result in debarment from COUNTY's competitive procurement activities.
In addition to the foregoing, AUDITOR further represents that there has been no determination,
based on an audit, that it or any subcontractor has committed an act defined by Section 287.133,
Florida Statutes, as a "public entity crime" and that it has not been formally charged with
committing an act defined as a "public entity crime" regardless of the amount of money involved
or whether AUDITOR has been placed on the convicted vendor list.
AUDITOR will promptly notify the COUNTY if it or any subcontractor or AUDITOR is
formally charged with an act defined as a "public entity crime" or has been placed on the
convicted vendor list.
D NONDISCRIMINATION
During the performance of this Agreement, the AUDITOR agrees as follows.
(2) The AUDITOR will, in all solicitations or advertisements for employees placed by or on
behalf of the AUDITOR, state that all qualified applicants will receive consideration for
employment without regard to race, color. religion, sex, sexual orientation, gender
identity, or national origin.
(5) The AUDITOR will comply with all provisions of Executive Order 11246 of September
24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor,
(6) The AUDITOR will furnish all information and reports required by Executive Order
11246 of September 24, 1965, and by the rules, regulations, and orders of the Secretary
of Labor, or pursuant thereto, and will permit access to his books, records, and accounts
by the contracting agency and the Secretary of Labor for purposes of investigation to
ascertain compliance with such rules, regulations, and orders.
(7) In the event of the AUDITOR's non-compliance with the nondiscrimination clauses of
this contract or with any of such rules, regulations, or orders, this contract may be
canceled, terminated or suspended in whole or in part and the AUDITOR may be declared
ineligible for further Government contracts in accordance with procedures authorized in
Executive Order 11246 of'Septeruber 24, 1965, and such other sanctions n be imposed
and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or
by rule, regulation, or order of the Secretary of fabor, or as otherwise provided by law,
E COVENANT OF NO INTEREST
AUDITOR and COUNTY covenant that neither presently has any interest, and shall not acquire
any interest, which would conflict in any manner or degree with its performance under this
Agreement, and that only interest of each is to perform and receive benefits as recited in this
Agreement.
F CODE OF ETHICS
G NO SOLICITATION/PAYMENT
ii PUBLIC RECORDS.
Public Records Compliance.
Pursuant to F.S. 119.0701 and the terms and conditions of this contract, if the AUDITOR
(Contractor) is an individual, partnership, corporation or business entity that enters into a contract
for services with a public agency and is acting on behalf of the public agency as provided under
F. S. 119.011(2), the AUDITOR is required to:
(1) Keep and maintain public records that would be required by the County to perform the
service.
(2) Upon receipt from the County's custodian of records, provide the County with a copy of the
requested records or allow the records to be inspected or copied within a reasonable time at a cost
that does not exceed the cost provided in this chapter or as otherwise provided by law.
(3) Ensure that public records that are exempt or confidential and exempt from public records
disclosure requirements are not disclosed except as authorized by law for the duration of the
contract term and following completion of the contract if the A[JDITOR does not transfer the
records to the County.
(5) A request to inspect or copy public records relating to a County contract must be made directly
to the County, but if the County does not possess the requested records, the County shall
immediately notify the AUDITOR of the request, and the AUDITOR must provide the records
to the County or allow the records to be inspected or copied within a reasonable time.
The AUDITOR shall not transfer custody, release, alter, destroy or otherwise dispose of any
public records unless or otherwise provided in this provision or as otherwise provided by law.
i OTHER FEDERAL CONTRACT REQUIREMENTS
The AUDITOR and its subcontractors must follow the provisions as set forth in Appendix 11 to 2
CFR Part 200, as amended, including but not limited to:
A. AUDITOR agrees to comply with all applicable standards, orders or regulations issued
pursuant to the Clean Air Act (42 U.S.C. 7401-7671q) and the Federal Water Pollution Control
Act as amended (33 U.S.C. 1251-1387) and will reports violations to FEMA and the Regional
Office of the Environmental Protection Agency (EPA).
B. Davis-Bacon Act, as amended (40 LJ.S.C. 3141-3148). When required by Federal program
legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities
I. Procurement of recovered materials as set forth in 2 CFR § 200321
Other Federal Requirements:
A� Americans with Disabilities Act of 1990 (A '3A) — The AUDITOR will comply with all
the requirements as imposed by the ADA,, the regulations of the Federal government issued
thereunder, and the assurance by the AUDITOR pursuant thereto.
M No Obligation by Federal Government, The federal government is not a patty to this
contract and is not Subject to any obligations or liabilities to the non-Federal entity, contractor,
or any other party pertaining to any matter resulting from the contract.
E. Program Fraud and False or Fraudulent Statements or Related Acts. The AIJDFFOR
acknowledges that 31 U.S.C. Chapter 38 (Administrative Remedies for False Claims and
Statements) applies to the AUDITOR's actions pertaining to this contract.
IN Wl'f'N] WHEREOF, the parties hereto have caused this agreement to be executed the
day and year first above written.
(SEAL)
Attest: KEVIN MADOK, Clerk
E
BOARD OF COUNTY
COMMISSIONERS
OF MONROE COUNTY,
FLORIDA
0
Mayor/Chairperson
WI EASES: AUDITOR
Bv:
Print n� AN': J J Pa�rtner
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Print name:
Print name: Eddie Burke, CPA
Partner
MO E COUNTY ATTORNEY
APFVOVE AS OFJW
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ATTACHMENT A
This attachment Supplements provisions of the basic audit contract between the COUNTY and
AUDITOR.
AUDIT SERVICES
The objective of an audit is the expression of opinions as to whether the COUNTY'S 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 additional information referred to in the
Summary of Services section when considered in relation to the basic financial statements taken as
a whole. The objective also includes reporting on:
Internal control over financial reporting and compliance with the provisions of applicable
laws, regulations, contracts, and grant agreements, noncompliance with which could have
a material effect on the financial statements in accordance with Government Auditing
Standards.
The audit will be conducted in accordance with auditing standards generally accepted in the United
States of America; and the standards for financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; the Single Audit Act
Amendments of 1996; State Single Audit Implementation Act and OMB Guidance for Grants and
Agreements (2 CFR 200) Chapter 10.550, Rules of the Auditor General ofthe State ofFloridd, and
Management's responsibilities related to accounting and otber services
For all non-attest services we perforrn in connection with the engagement, you are responsible for
designating a competent employee to oversee the services, make any management decisions,
perform any management functions related to the services, evaluate the adequacy of the services,
and accept overall responsibility for the results of the services.
Prior to the release of the report, Management will need to sign a representation letter
acknowled( g your responsibility for the results of these services.
MANAGEMENT'S RESPONSIBILITIES RELATED TO THE AUDIT
Management is responsible for the design and implementation of programs and controls over
LIMITATIONS OFT AUDIT PROCESS
In conducting the audit, the AUDITOR 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
opinions on the financial statements. The AUDITOR also will assess the accounting principles used
and significant estimates made by the COUNTY'S management, as well as evaluate the overall
financial statement presentation.
The 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 {HAAS 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 financial statements.
also inform the COUNTY of any violations of laws or governmental regulations that come to our
attention, unless clearly inconsequential. Our responsibility as AUDITOR is limited to the period
covered by our audit and does not extend to any later periods for which we are not engaged as
auditor.
AUDIT PROCEDURES — INTERNAL CONTROLS
An audit is not designed to provide assurance on internal control or to identify significant
deficiencies or material weaknesses. However, during the audit, we will communicate to the
COUNTY'S managernent and those charged with governance internal control related matters that
are required to be communicated under AICPA professional standards, and Government Audoing
Standard.v.
You agree that the COUNTY'S designated individual will assume all the COUNTY'S management
responsibilities for the nonattest services we provide; oversee the services by designating an
individual, with suitable skill, knowledge, or experience; evaluate the adequacy and results of the
services; and accept responsibility for them. In order to ensure we provide such services in
compliance with all professional standards, the designated individual is responsible for-
• Making all financial records and related information available to us.
• Ensuring that all material information is disclosed to us.
• Granting unrestricted access to persons within the entity from whom we determine it
necessary to obtain audit evidence.
• Identifying and ensuring that such nonattest complies with the laws and regulations,
COMMUNICATIONS
OTHER MATTERS
Access to working papers
The working papers and related documentation for the engagement are the property of the
AUDITOR and constitute confidential information. AUDITOR has 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
(EXERCISING OPTION TO EXTEND FOR TWO ADDITIONAL YEARS)
This is an amendment (Second 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 I..L.P. (hereinafter "Auditor "), a Certified Public
Accountant limited liability partnership licensed to do business in the State of Florida
(collectively, the "Parties ").
WHEREAS, on July 18, 2012, the parties entered into the Audit Contract covering the external
audit of the County's finances for fiscal years ending September 30, 2012, 2013 and 2014; and
WHEREAS, the Audit Contract contains an option to extend the Audit Contract for an additional
two (2) years; and
WHEREAS, an Audit Selection Committee convened pursuant to Section 218.391, Fla. Stat.,
composed of representatives of each of the constitutional officers and the County unanimously
voted to recommend extension of the Audit Contract; and
WHEREAS, the County wishes to exercise the option to extend the Audit Contract for two (2)
additional years; and
WHEREAS, the base fee in the Audit Contract as originally stated ($286,000.00 per audit) has
not increased since inception of the Audit Contract; and
WHEREAS, the Auditor has requested an increase in the fixed fee by $10,000.00 per fiscal year
for each of the retraining two fiscal years; and
WHEREAS, the County agrees to the price increase.
NOW, THEREFORE, in consideration of the mutual promises, benefits and covenants set forth
herein, the Parties agree as follows:
1. Under Section 3 , TERMS OF ENGAGEMENT a new paragraph 3.1 is added, to
read as follows:
3.1 This Agreement is hereby extended for two (2) additional years, until the
completion of the financial audit for the fiscal year ending September 30, 2016,
2. Under Section 4 , COMPENSATION AND TERMS OF PAYMENT, a new
paragraph 4.1 is added, to read as follows:
4.1 For preparation of the audits covering fiscal years ending September 30,
2015 and September 30, 2016, the COUNTY shall pay to the AUDITOR a fixed
2'" Amendment C'hcm Hckacrl I..I.. P
related fees or expenses shall be billed. The hourly fees shown in Section 4 of the
Audit Contract, applicable to extra work requested by the COLTNTY, remain
unchanged. Payment under this agreement is contingent upon annual
appropriation by the Monroe County Board of County Commissioners.
3. In all other respects, the terms and conditions of the Audit Contract dated July I K
2012, and the First Amendment to the Audit Contract dated January 6, 2014 remain in full force
and effect.
IN WITNESS WHEREOF, the Parties hereto have caused this agreement to be executed on the
day and year first above written.
Witness:
is , y►
Printed Name: f a +[rN
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BOARD OF COUNTY COMMISSIONERS
OF MONROE COUNTY, FLORIDA
By:
Mayor /Chairperson
C Y BEKAERT, LLP
B
Partner
Printed Name: Edd' rlef-
M0NR0E :J0 !- ,
ATTORNEY
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2 "' Anu:ndment cherry lick aert L.{. -l'.
Meeting Date: June 10, 2015 Division: County Attorney
Bulk Item: Yes X No ® Department: Counly Attorney
Staff Contact /Phone #: Cynthia L. Hall x 3174
AGENDA ITEM WORDING: Approval for the County Administrator and the County Attorney's
Office to negotiate an amended agreement with the independent external auditing firm of Cherry
Bekaert LLP, exercising the option to extend the current Audit Contract by an additional two (2) years;
also, authorization for the County Administrator to execute the amended agreement provided the fees
in paragraph (4) of the agreement remains unchanged, and otherwise the amended agreement will be
returned to the BOCC for approval.
ITEM BACKGROUND: The Audit Contract between Monroe County and Cherry Bekaert, LLP
(Auditors) called for auditing services for fiscal years ending September 30, 2012, 2013 and 2014, with
the option to extend the agreement for two (2) additional years with the concurrence of the BOCC and
annual availability of appropriation. The County's auditor selection committee (required by F.S.
218.391) met on May 19, 2015, and unanimously voted to recommend approval for the County
Administrator and the County Attorney's Office to negotiate with the Auditors to extend the current
agreement for an additional two (2) years. Furthermore, if the flat fee in paragraph (4) is unchanged,
the County Administrator requests authority to execute the amended agreement; if the fees are changed
the amended agreement will go to the BOCC for approval.
PREVIOUS RELEVANT BOCC ACTION: The BOCC approved and authorized the Audit Contract
on July 18, 2012. At the BOCC meeting on December 11, 2013 the Board approved the First
Amendment to the Audit Contract.
CONTRACT/AGREEMENT CHANGES: Amendment exercising option to extend current
agreement for two (2) additional years, per paragraph 3 of the Audit Contract dated July 18, 2012.
;�i I KI MAYNONF1,1 1 �i � � 111 1 IS a .
TOTAL COST: Fixed fee for annual audit: $286,000 INDIRECT COST: BUDGETED: Yes
Extra work if required: $60/hr to $240/hr, depending on employee performing work
DIFFERENTIAL OF LOCAL PREFERENCE:
DOCUMENTATION: Included X Not Required
I I I
FM"
Revised 7/09
' monroe w_3 , Ey t.tera•s urxice - u 7 c
COUNTY OF MONROE, FLORIDA
AUDIT CONTRACT
This CONTRACT is made and entered into this l8 day of , 2012, by
and between the Board of County Commissioners of Monroe County er "COUNTY'S
Florida, and CHERRY, BEKAERT & HOLLAND, L.L.P. (hereinafter "AUDTTOR'j, a Certified
Public Accountant limited partnership licensed to do business in the State of Florida,
WHEREAS, the Monroe County, Florida Audit Selection Committee, in accordance with Section
218.391, Florida Statutes, has followed the statutory procedures, including public notice, and ranked
the AUDITOR as the top firm and deemed it most qualified to provide professional auditing
services; and
WHEREAS, terms satisfactory to both parties have been negotiated pursuant to said statute; now
therefore
In consideration of the mutual promises and covenants below, the parties agree:
1. SCOPE OF SERVICES.
AUDITOR shall provide a financial audit of the COUNTY financial records and a financial audit
report as required by Florida Statutes 218.391. Such audit shall be subject to the limitations and
responsibilities identified in Attachment A to this contract. In addition, such audit shall be
conducted in accordance with U.S. generally accepted auditing standards as promulgated by the
American Institute of Certified Public Accountants (AICPA) Industry Audit Guide, Audits for State
and Local Government Units, AICPA standards and procedures, the Florida Single Audit Act,
OMB Circular A -133, and, excluding review of economy and efficiency of operations and program
results, standards and procedures set forth in Government Auditing Standards issued by the
Comptroller General of the United States. The AUDITOR will also conduct the audit in
accordance with any other applicable federal, state and local regulations or professional guidance
not specifically listed previously as well as any additional requirements that may be adopted by
these organizations in the future. This audit includes the financial records concerning the operations
of the COUNTY as a whole, each Constitutional Officer, and any dependent district reported as part
of the primary government (blended component unit). Audits of financial statements of discrete
component units, either currently in existence or established subsequently to the beginning date of
this Agreement, are excluded from this Agreement. It is possible that additional "funds" or blended
component units will be established by the COUNTY during the term of this Agreement. The
compensation stated in this Agreement will include the audit procedures related to such additional
funds or component units unless it is agreed by the COUNTY and AUDITOR that they significantly
and materially impact the audit.
I.I. AUDITOR shall provide the work plan and services as described in detail in the
Request for Qualifications, attached hereto and incorporated herein. The AUDITOR,
prior to commencing any fiscal year audit, will provide a detailed audit plan, related
fee (to equal the total amount of the Agreement as noted in Section 4), and proposed
Page 1 of 15
time line for each of the COUNTY entities to be audited. The time- related
obligations shall be conditioned upon AUDITOR's receipt of necessary COUNTY
and Constitutional Officer data (including confirmation requests and consultant's
reports) in useable form, access to knowledgeable COUNTY and Constitutional
Officer personnel, and other timely cooperation by COUNTY and the Constitutional
Officers. AUDITOR shall conduct an exit interview with each of the Constitutional
Officers and dependent district executive officers prior to the issuance of final
reports.
1.2 The audit fieldwork, including any analytical review, shall be completed on -site in
the offices of the County, each Constitutional Officer and the dependent distrim
13 The financial audit reports applicable to each of the entities described in paragraph 1,
as required by F.S. 218.391 and Section 10.550 of the Rules of the Auditor General,
shall include the following:
13.1. Auditor's Report on Examinati of Financial Statements. This report shall
include but not be limited to:
(a) A statement of the scope of the audit; and
(b) Explanatory comments (if any) concerning exceptions by AUDITOR as
to application of either U.S. generally accepted auditing standards, U.S.
generally accepted accounting principles or the consistency of application
of such principles.
1.3.2. Financial Statements. Financial presentations shall include government wide
and fund level financial statements, including accompanying footnotes and
schedules, derived from the accounting records presented in conformity with
the fund type, fund and/or group classifications as required for compliance
with Section 10.550 of the Auditor General and U.S. generally accepted
accounting principles for governments. Financial statements will be prepared
for the County as a whole, and for each constitutional officer and dependent
district.
1.3.3. Auditor's Letter of Comments and Recommendations. A letter shall be
provided to COUNTY containing various comments and recommendations
by the AUDITOR based upon review of the COUNTY's system of
operations, internal controls and other findings and requirements by the
Florida Auditor General. Similar letters shall be submitted to each of the
County Constitutional Officers and dependent district.
1.3.4. Other Reports. Reports shall include reports required by Government Auditing
Standards; and Federal and State Agencies. If applicable, reports issued
pursuant to the Federal and State of Florida Single Audit Acts shall be
included.
Page 2 of 15
r�
1A The AUDITOR will provide electronic versions of the COUNTY's financial
statements including footnotes and related schedules included as part of the reporting
process. AUDITOR will also provide copies of any journal entries required to convert the
financial records from modified accrual or budgetary basis accounting to full accrual.
1.5 It is recognized that one of the primary purposes of the audit is to be able to provide
assurances to state and federal funding agencies. If any of those agencies require an opinion
in a style or format different than the AUDITOR's standard style or format, the AUDITOR
shall reissue the opinion in a style or format acceptable to the funding agency.
1.6 AUDITOR shall prepare and submit to the Board of County Commissioners a letter
regarding the COUNTY's compliance with the terms of its various bond issues. The
AUDITOR will also prepare a separate AUDITOR's report on the examination of the basic
financial statements suitable for inclusion in an official statement. The COUNTY may
prepare official statements in connection with the issuance of debt securities that will
contain the basic financial statements and the AUDITOR's report thereon. The AUDITOR
shall be notified by the COUNTY in advance of any such securities offering and will, if
requested by the fiscal advisor and/or the underwriter, issue a "consent and citation of
expertise" as the AUDITOR and any necessary "comfort letters." The provision of such
services will not generate additional compensation.
1.7 The AUDITOR agrees to provide tuition free access to seminars provided for either
staff or staff and client use in an effort to assist the County in maintaining staff
professionalism and meeting the County staffs continuing professional education
requirements.
1.9 Should irregularities or other unforeseeable conditions be encountered which might
necessitate the extension of the auditing work beyond the scope of normal auditing
procedures, the AUDITOR agrees to advise the COUNTY in writing of the circumstances
and to request an increase in the total fees be made before significant additional costs are
incurred. Any request for additional time or additional fees shall be in writing and shall
contain a detailed explanation of the unforeseen conditions or irregularities, and why the
additional fees are necessary. Either a time extension or additional fees granted to
AUDITOR is at the sole discretion of COUNTY.
1.9 AUDITOR shall take reasonable steps to bring errors to the attention of an appropriate
level of COUNTY management so that management can take corrective action. Any
adjustments to the books and records will be made only after review and only on direction of
responsible authority.
1.10 The COUNTY will send its Comprehensive Annual Financial Report (CAFR) to the
Goverment Finance Officers Association of the United States and Canada for review in its
Certificate of Achievement for Excellence in Financial Reporting Program. Therefore, the
COUNTY shall also provide additional financial and non - financial information not subject
to examination by the AUDITOR, but necessary for the reporting standards of such
Certificate of Achievement. It is expected that the AUDITOR will provide any special
Page 3 of 15
L
assistance reasonably necessary to assist the COUNTY in continuing to meet the
requirements of that program as part of the fixed fee compensation of this Agreement.
2. ASSISTANCE TO BE FURNISHED BY THE COUNTY
It is understood and agreed that COUNTY and Constitutional Officers' staff participation in the
audit will be limited to activities within the normal course of business, and any assistance with the
audit by COUNTY personnel shall be limited to matters within the normal scope of the employees'
work responsibility.
The COUNTY will prepare and furnish to the AUDITOR certain workpapers required to support
the financial information under audit, but they will be in the format designed by the COUNTY.
The COUNTY will:
a. Download the trial balance, including actual balances and original and final budgets, from the
COUNTY'S accounting software to Excel spreadsheets.
b. Prepare the financial statements and footnotes for each constitutional office, the BOCC and the
CAFR
c. Prepare the Statements of Cash Flows.
d. Prepare the fund -level and entity wide elimination entries.
e. Produce the introductory and statistical sections and the Management's Discussion and Analysis
sections of the CAFR.
E Produce the Schedules of Federal Awards and State Financial Assistance.
g. Review the final CAFR and BOCC Financial Statements and maintain responsibility for the
contents.
3. TERM OF ENGAGEMENT
This Agreement provides for professional auditing services for the fiscal year ending September 30,
2012, Z013'and 14 with anAption to extend for two (2) additiotwl y ars with the concurrence of the
Monme County4loatdof County Commissioners and annual availability of an appropriation. This
agreement shall come into effect on the date first written above and remain in effect until the
completion of the 2014 financial audit unless earlier terminated in accordance with paragraphs 12
and 13, below.
4. COMPENSATION AND TERMS OF PAYMENT
The COUNTY shall pay to the AUDITOR a fixed fee for the annual audit of the COUNTY's
financial statements according to the following fee schedule. This fee is all- inclusive, and no
Page 4 of 15
charge for travel, telephone bills, copying or any other related fees or expenses shall be billed.
Payment under this agreement is contingent upon annual appropriation.
FISCAL YEAR ENDED CONTRACT AMOUNT
September 30, 2012
$286,000
September 30, 2013
$286,000
September 30, 2014
$286,000
The following hourly fees shall apply to extra work done for the term of this contract by
AUDITOR, whether under this Agreement or for extra work requested by the Board of County
Commissioners:
Partner in Charge
$
240
Senior Manager
$
170
Merger
$
150
Senior Accountant
$
130
Staff Accountant
$
95
Clerical
$
60
Termination prior to the end of the agreement shall occur whenever funds cannot be obtained or
cannot be continued at a level sufficient to allow for the continuation of this agreement pursuant to
the terms herein. In the event that funds cannot be continued at a level sufficient to allow the
continuation of this agreement pursuant to the terms specified herein, this agreement may then be
terminated immediately by written notice of termination delivered in person or by mail to
AUDITOR
An invoice for the portion of the total amount of the Agreement in proportion to the work
completed to date shall be submitted to the COUNTY on a monthly basis. The invoice will include
a description of work completed for each of the COUNTY entities to be audited, the total amount of
the agreement, billings to date and payments to date. The invoices shall be in a form approved by
the Clerk of the Circuit Court. The maximum amount to be paid prior to fulfillment of the terms of
the Agreement shall be ninety (90) percent of the total annual compensation. The retainage will be
payable upon completion of each year's audits.
5. RECORDS.
ORDS.
All working papers and reports will be retained by the AUDITOR, at the AUDITOR's expense, for
a minimum of five years from the date the reports are issued, or such longer period as may be
required to satisfy legal and administrative requirements. The Auditor will be required to make the
working papers available, upon request, to the following parties or their designees:
A. COUNTY
B. Auditor General of the State of Florida
Page 5of15
C. U.S. General Accounting Office
D. Parties designated by the federal government, the State of Florida, or by the
COUNTY as part of an audit quality review program
E. Auditors of entities of which the COUNTY is a sub- recipient of grant funds
F. Successor auditors
G. Other parties as deemed necessary by the COUNTY, subject to AUDITOR
agreement
H. Other parties entitled by law to access such papers
6. MODIFICATIONS, AMENDMENTS, ASSIGNMENT AND SUBCONTRACTING
Any and all modifications of the terms of this agreement shall be only amended in writing and
approved by the Board of County Commissioners for Monroe County. The Contractor shall not
assign or subcontract or transfer any interest in this Contract or assign any claims for money due or
to become due under this Contract without first obtaining written and executed consent from
COUNTY.
7. INDEPENDENT CONTRACTOR
At all times and for all purposes hereunder, the AUDITOR is an independent contractor and not an
employee of the Board of County Commissioners of Monroe County. No statement contained in
this agreement shall be construed as to find the AUDITOR or any of its employees, contractors,
servants or agents to be the employees of the Board of County Commissioners of Monroe County,
and they shall not be entitled to any of the rights, privileges or benefits of employees of Monroe
County.
S. COMPLIANCE WITH LAW
In carrying out its obligations under this agreement, the AUDITOR shall abide by all statutes,
ordinances, rules and regulations pertaining to or regulating the provisions of this agreement,
including those now in effect and hereafter adopted. Any violation of said statutes, ordinances,
rules or regulations may constitute a material breach of this agreement, which would entitle the
COUNTY to terminate this agreement immediately upon delivery of written notice of termination to
the AUDITOR.
9. HOLD HARMLESSANDEMNIFICATION
Each party ("Indemnifying Party") shall indemnify and hold harmless the other ( "Indemnified
Party'l from any and all claims, suits, actions, liabilities and reasonable defense costs, in each case
solely for bodily injury to individuals and physical damage to tangible property to the extent
directly and proximately caused by the acts or omissions of the Indemnifying Party while
AUDITOR is engaged in the performance of services under this Agreement; provided, however,
that if there is also fault on the part of the Indemnified Party, the foregoing indemnity shall be on a
comparative fault basis, and provided that COUNTY's liability is limited to the statutory limitation
in Florida Statutes 768.28.
Page 6 of 15
J
10. ANTI DISCRIMINATION
The AUDITOR agrees that they will not discriminate against any of their employees or applicants
for employment or against persons for any benefit or service because of their race, color, religion,
sex, national origin, or physical or mental handicap where the handicap does not affect the ability of
an individual to perform in a position of employment, and to abide by all federal and state laws
regarding non - discrimination.
11. ANTI - KICKBACK
The AUDITOR warrants that no person has been employed or retained to solicit or secure this
agreement upon an agreement or understanding for a commission, percentage, brokerage or
contingent fee, and that no employee or officer of the COUNTY has any interest, financially or
otherwise, in the said funded project. For breach or violation of this warranty, the COUNTY shall
have the right to annul this agreement without liability or, in its discretion, to deduct from the
agreement price or consideration, the full amount of such commission, percentage, brokerage or
contingent fee.
12. TERMINATION W1TH0[lT CAUSE.
This Agreement may be terminated, without cause, by either of the parties. For each fiscal year to
be audited, written notice to the other party not later than May 1 of the fiscal year to be audited will
constitute appropriate cancellation of the Agreement.
If the AUDITOR breaches any provision of this Agreement, the COUNTY shall notify the
AUDITOR in writing within fourteen (14) days or some other time period deemed acceptable to the
COUNTY to cure this breach. The COUNTY by failure to provide notice to the AUDITOR or
accepting work under this Agreement does not waive or limit its authority to find the AUDITOR in
breach of this agreement for subsequent breaches. After notification of breach and the Agreement
has been terminated, the COUNTY shall pay the AUDITOR fair and equitable compensation for
work completed prior to termination of the agreement, less any amount of damages caused by the
AUDITOR's breach. If the damages are more than compensation due to the AUDITOR, the
AUDITOR will remain liable after termination and the COUNTY can affirmatively collect
damages.
The AUDITOR may terminate the Agreement for failure of the COUNTY to fulfill its duties and
obligations upon giving the COUNTY sixty (60) days prior written notice.
14. ENTIRE AGREEMENT
The COUNTY Audit Committee Request for Qualifications for Professional Auditing Services
dated April 27, 2012, and AUDITOR Proposal to Provide Professional Independent Auditing
Services , and this Agreement constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and supercedes any and all prior agreements with respect to such subject
matter between the AUDITOR and COUNTY. It is understood and agreed that in the event of a
Page 7 of 15
conflict between the terms of this Agreement and the terns of the above stated documents, the
terms of the Agreement shall control.
15. CONSENT TO JURISDICTION.
This agreement, its performance, and all disputes arising hereunder, shall be governed by the laws
of the State of Florida, and both parties agree that the proper venue for any actions shall be in
Monroe County.
16. ETHICS CLAUSE.
AUDITOR warrants that AUDITOR has not employed, retained or otherwise had act on
AUDITOR's behalf any former County officer or employee in violation of Section 2 or Ordinance
No. 10 -1990 or any County officer or employee in violation of Section 3 of Ordinance No. 10-
1990. For breach or violation of the provision the COUNTY may, at its discretion terminate this
agrceament without liability and may also, at its discretion, deduct from the agreement or otherwise
recover, the full amount of any fee, commission, percentage, gift, or consideration paid to the
former or present County officer or employee.
17. PUBLIC ENTITY CRBAE STATEMENT.
A person or affiliate who has been placed on the convicted vendor list following a conviction for
public entity crime may not submit a bid on an agreement to provide any goods or services to a
public entity, may not submit a bid on an agreement with a public entity for the construction or
repair of a public building or public work, may not submit bids on leases of real property to public
entity, may not be awarded or perform work as a contractor, supplier, sub- contractor, or consultant
under a agreement with any public entity, and may not transact business with any public entity in
excess of the threshold amount provided in Section 287.017, for CATEGORY TWO for a period of
36 months from the date of being placed on the convicted vendor list. AUDITOR represents that
AUDITOR has not been placed on the convicted vendor list.
I& AUTHORITY.
AUDITOR wan that it is authorized by law to engage in the performance of the activities
encompassed by the project herein described.
Each of the signatories for the AUDITOR below certifies and warrants that the AUDITOR's name
in this agreement is the full name as designated in its organizing documents; that they are
empowered to act and contract for the AUDITOR, and this agreement has been approved by the
legal governing body of the AUDITOR.
19. LICENSES.
The AUDITOR warrants that it shall have, prior to commencement of work under this agreement
and at all times during said work, all required licenses whether federal, state, COUNTY or City.
Page 8 of 15
20. INSURANCE
The AUDITOR agrees that it maintains in force at its own expense a liability insurance policy
which will insure and indemnify the AUDITOR and the COUNTY from any suits, claims or actions
brought by any person or persons and from all costs and expenses of litigation brought against the
AUDITOR for such injuries to persons or damage to property occurring during the agreement or
thereafter that results from performance by the AUDITOR of the obligations set forth in this
agreement. At all times during the term of this agreement and for one year after acceptance of the
project, the AUDITOR shall maintain on file with the COUNTY a certificate of the insurance of the
carriers showing that the aforesaid insurance policy is in effect. The following coverage shall be
provided:
1. Workers Compensation insurance as required by Florida Statutes.
2. Commercial General Liability Insurance with minimum limits of $500,000 per
occurrence for bodily injury, personal injury and property damage.
3. Comprehensive Auto Liability Insurance with minimum limits of $300,000 combined
single limit per occurrence.
4. Professional Liability Insurance which will respond to damages resulting from any claim
arising out of the performance of professional services or any error or omission of the
AUDITOR arising out of work governed by this agreement. Such insurance shall have
the following minimum amounts of liability: $250,000 per Occurrence/$500,000
Aggregate.
The policies shall provide no less than 30 days notice of cancellation, non - renewal or reduction of
coverage.
At all times during the term of this agreement and for one year after acceptance of the project, the
AUDITOR shall maintain on file with the COUNTY a certificate of insurance showing that the
aforesaid insurance coverages are in effect.
21. FORCE MAJEURE.
The AUDITOR shall not be liable for any failure or delays resulting from circumstances or causes
beyond its reasonable control, including, without limitation, acts or omissions due to fire or other
casualty, natural disasters, war or other violence, or any law, order or requirement of any
governmental agency or authority.
22. NOTICE.
Any written notice to be given to either party under this agreement or related hereto shall be
addressed and delivered as follows:
Page 9of15
For AUDITOR: Edward Burke, Partner
Cherry, Bekaert & Holland, L.L.P.
2626 Glenwood Avenue- Suite 300
Raleigh, NC 27608
For COUNTY: Danny L. Kolhage, Clerk
500 Whitehead Street, Ste. 101
Key West, Florida 33040
County Attorney
and P.O. Box 1026
Key West, FL 33041 -1026
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed the day
and year first above written.
(SEAL)
ATTEST: DANNY L. KOLHAGE, CLERK
Deputy Clerk 7 —Ar —/
BOARD OF COUNTY COMMISSIONERS
OF MO C NTY, FLORIDA
By-
Ma
WITNESSES:
A &..a aftalb
AUDITOR: CHERRY, BEKAERT &
LLAND, L.L.P.
B y:
Partner
Page 10 of 15
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ATTACHMENT A
LIMITATIONS OF THE AUDITING PROCESS
The objective of an audit is the expression of our opinion concerning whether the basic financial
statements are fairly presented, in all material respects, in conformity with accounting principles
generally accepted in the United States of America. The COUNTY'S audits 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
generally accepted auditing standards ( "GAAS'J 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 financial statements. Further, the internal control audit is not designed to
disclose deficiencies in internal control over financial reporting that, individually or in combination,
are less severe than a material weakness. Projections of any evaluation of the effectiveness of
internal control over financial reporting to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Similarly, in performing the audit the AUDITOR will be aware of the possibility that illegal acts
may have occurred. However, it is recognized that the 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. The
AUDITOR will inform the COUNTY with respect to errors and fraud, or illegal acts that come to
the AUDITOR'S attention during the course of the audit unless clearly inconsequential. The
COUNTY agrees to cooperate fully with any procedures the AUDITOR deems necessary to
perform with respect to these matters.
As applicable, in accordance with requirements of the Single Audit Act Amendments of 1996,
OMB Circular A -133 and the Florida Single Audit Act, the COUNTY'S audits will include tests of
transactions related to major federal and state award programs for compliance with applicable laws
and regulations and the provisions of contracts and grant agreements. Because an audit is designed
to provide reasonable, but not absolute assurance and because the AUDITOR will not perform a
detailed examination of all transactions, there is a risk that material errors, fraud, or illegal acts, or
noncompliance may exist and not be detected by the AUDITOR. In addition, an audit is not
designed to detect immaterial errors, fraud, or other illegal acts or illegal acts that do not have a
direct effect on the basic financial statements or to major programs. It should be recognized that the
audits generally provide no assurance that illegal acts 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. However, the AUDITOR will inform appropriate COUNTY
representatives with respect to material errors and fraud, or illegal acts that come to the
Page 11 of 15
Packet Pg. 2278
AUDITOR'S attention during the course of the audits. The AUDITOR will include such matters in
the reports as required for a Single Audit.
If, for any reason, the AUDITOR is unable to complete the audits, or is unable to form or has not
formed an opinion on the basic financial statements, the AUDITOR may decline to express an
opinion or decline to issue a report as a result of the engagement.
RESPONSIBILITIES AS TO INTERNAL CONTROLS
As a part of the audits, the AUDITOR will consider the COUNTY'S internal control structure, as
required by auditing standards generally accepted in the United States of America and Government
Auditing Standards, sufficient to plan the audit and to determine the nature, timing, and extent of
auditing procedures necessary for expressing our opinion concerning the basic financial statements.
As part of the audits, the AUDITOR will obtain 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 the AUDITOR
considers 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. These
tests, if performed, will be less in scope than would be necessary to render an opinion on internal
control and, accordingly, the AUDITOR will express no opinion in the AUDITOR'S report on
internal control issued pursuant to Government Auditing Standards.
The COUNTY recognizes that the basic financial statements and the establishment and maintenance
of an effective internal control over financial reporting are the responsibility of management. The
COUNTY also recognizes that management is responsible for identifying and ensuring that the
COUNTY complies with the laws and regulations applicable to its activities. Appropriate
supervisory review procedures are necessary to provide reasonable assurance that adopted policies
and prescribed procedures are adhered to and to identify errors, fraud, or illegal acts. An audit is not
designed to provide assurance on internal control. As required by OMB Circular A -133 and the
Florida Single Audit Act and as part of the AUDITOR'S consideration of the COUNTY'S internal
control structure, the AUDITOR will inform appropriate COUNTY representatives of internal
control deficiencies and other matters that come to the AUDITOR'S attention. These deficiencies,
if any, will be reported as either an internal control deficiency, a significant deficiency or a material
weakness depending on the severity of the deficiency.
As required by OMB Circular A -133 and the Florida Single Audit Act, the AUDITOR will perform
tests of controls over compliance to evaluate the effectiveness of the design and operation of
controls that the AUDITOR considers relevant to preventing or detecting material noncompliance
with compliance requirements, applicable to each major federal and state award programs.
However, 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 the AUDITOR'S report on internal control issued
pursuant to OMB Circular A -133 or the Florida Single Audit Act.
Page 12 of 15
The COUNTY is responsible for informing the AUDITOR of its views regarding the risk of fraud at
the COUNTY. The COUNTY is also responsible for the design and implementation of programs
and controls to prevent and detect fraud, and for informing the AUDITOR 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. COUNTY management is also responsible for informing the AUDITOR of
knowledge of any allegations of fraud or suspected fraud affecting the COUNTY received in
communications fiom employees, former employees, regulators, or others.
RESPONSIBILITIES AS TO COMPLIANCE
The COUNTY'S audits will be conducted in accordance with the standards referred to in the
Contract. As part of obtaining reasonable assurance about whether the basic financial statements are
free of material misstatement, the AUDITOR will perform tests of the COUNTY'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 the AUDITOR will not express such an opinion in the AUDITOR'S report
on compliance issued pursuant to Government Auditing Standards.
OMB Circular A -133 and the Florida Single Audit Act requires that the AUDITOR also plan and
perform the audit to obtain reasonable assuran about whether the COUNTY has complied with
applicable laws and regulations and the provisions of contracts and grant agreements applicable to
major programs. The AUDITOR'S procedures will consist of the applicable procedures described in
the OMB Circular A -133 Compliance Supplement and the requirements described in the Executive
Office of the Governor's State Project Compliance Supplement for the types of compliance
requirements that could have a direct and material effect of each of the COUNTY'S major
programs. The purpose of those procedures will be to express an opinion on the COUNTY'S
compliance with requirements applicable to major programs in the AUDITOR'S report on
compliance issued pursuant to OMB Circular A -133 and the Florida Single Audit Act.
REPRESENTATION FROM MANAGEMENT
Management is responsible for the fair presentation of the basic financial statements in conformity
with accounting principles generally accepted in the United States of America, for making all
financial records and related information available to the AUDITOR, for ensuring that all material
information is disclosed to the AUDITOR, 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. The COUNTY is also responsible for the preparation of the
schedule of expenditures of federal and State awards in accordance with the requirements of OMB
Circular A -133; and the Florida Single Audit Act.
The COUNTY is also responsible for adjusting the financial statements to correct material
misstatements, informing the AUDITOR of events that occurred subsequent to the balance sheet
date until the date of the AUDITORS' report that might affect the financial statements or related
disclosures and informing AUDITOR of any discovery of facts related to items that existed at the
financial statement date that might affect th financial statements or related disclosures.
Page 13 of 15
Additionally, as required by OMB Circular A -133 and the Florida Single Audit Act, it is
management's responsibility to follow up and take corrective action on prior audit findings and to
prepare a summary schedule of prior audit findings and a corrective action plan. The summary
schedule of prior audit findings and the corrective action plan should be made available to the
AUDITOR during the course of the engagement. Management, at the conclusion of the
engagement, will provide to the AUDITOR a representation letter that, among other things,
addresses these matters and confirms certain representations made during the audit, including, to the
best of their knowledge and belief, the absence of fraud involving management or those employees
who have significant roles in the COUNTY'S internal control, or others where it could have a
material effect on the basic financial statements. The representation letter will also affirm to the
AUDITOR that management believes that the effects of any uncorrected misstatements aggregated
pertaining to the current year financial statements are immaterial, both individually and in the
aggregate, to the financial statements taken as a whole.
The AUDITOR will rely on the COUNTY'S management providing these representations, both in
the planning and performance of the audit, and in considering the fees that the AUDITOR will
charge to perform the audit.
ACCESS TO WORKING PAPERS
The working papers for the engagement are the property of AUDITOR and constitute confidential
information. Except as discussed below, any requests for access to the AUDITOR'S working papers
will be discussed with COUNTY Management prior to making them available to requesting parties.
The AUDITOR 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, AUDITOR working papers and related documentation without AUDITOR
knowledge or express permission. The COUNTY acknowledges and authorizes the AUDITOR to
allow Regulators access to and copies of documentation as requested.
The AUDITOR participates in a "peer review" program, covering audit and accounting practices.
This program requires that once every three years the AUDITOR subject its quality assurance
practices to an examination by another accounting firm. As part of the process, the other firm will
review a sample of the AUDITOR'S work. It is possible that the work the AUDITOR performs for
the COUNTY 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 the COUNTY objects to having the
work done by the AUDITOR subjected to peer review, the COUNTY is to notify the AUDITOR in
writing.
USE OF THIRD PARTY SERVICE PROVIDERS
The AUDITOR may from time to time, and depending on the circumstances, use third -party service
providers in serving the COUNTY. The AUDITOR may share confidential information about the
COUNTY with these service providers, but shall remain committed to maintaining the
confidentiality and security of the COUNTY information. Accordingly, AUDITOR shall maintain
Page 14 of 15
internal policies, procedures and safeguards to protect the confidentiality of the COUNTY
information. In addition, AUDITOR will secure confidentiality agreements with all service
providers to maintain the confidentiality of COUNTY information and will take reasonable
precautions to determine that appropriate procedures are in place to prevent the unauthorized release
of COUNTY confidential information to others. In the event that AUDITOR is unable to secure an
appropriate confidentiality agreement, the COUNTY will be asked to provide their consent prior to
the sharing of COUNTY confidential information with the third-party service provider.
Furthermore, the AUDITOR will remain responsible for the work provided by any such &W-party
service providers.
ELECTRONIC TRANSMITTALS
During the course of our audit, the COUNTY and AUDITOR may need to electronically transmit
confidential information to each other, 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. The COUNTY agrees to the use of email and other electronic
methods to transmit and receive information, including confidential information between the
AUDITOR, the COUNTY and other third party providers utilized by either party in connection with
the audit.
Page 15 of 15
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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'l.
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 Chevy, Bekaert L.L.P. to Chevy 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, a new paragraph 1.11 is added, as follows:
1.11 The Auditor shall perform the project - specific 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:
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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.
SS WHEREOF, the Parties hereto have caused this agreement to be executed on the
year first above written.
, ,,Z
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Y HEAVII`IN lark BOARD OF COUNTY COMMISSIONERS
OF MONROE CO ,FLORIDA
Deputy Jerk
By:
Mayor /Chairperson
WITNESSES: Pot&w4, Q
Print e: A+,P;cin w
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By:
Partner
Print name: f dwArd T. Vt/rkE
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MONROE COUNTY ATTORNEY
APP VE AS TO O
NTHIA L. HALL
ASSISTANT COUNTY ATTORNEY
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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. Heaviiln:
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 to 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 Environment
Protection Loan No. WW602091 from April 22. 2010 (date of inception) through loan
dose-ouL The special purpose financial statements are the responsibility of the Countys
management
YOUR EXPECrAT1ONS
As part of our planning process, we have discussed with you your expectations of Cherry
Beksert, changes that occurred during the year, your views on risks facingr 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.
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2626 Glenwood Avenue, Suite 200.RaleigNNC27608 -1045 I r 919.782.1040 1 cbkwm �Nt *PIPJAI$OmAl
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 Nesting 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 Audtlng
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 summed zes the fees for the services described above:
Audit serrlcce
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 your have any questions, please call Eddie Burke at
919 - 782 -1040.
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Monroe County, Florida
December 46 2013
Page 3
Sincerely,
CHERRY BEKAERT LLP
ATTACHMENT — Enga0ement Letter Terms and Conditions
Monroe County, Florida -.0 . _
ACCEPTED BY:
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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 ('GAAW) 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 bests of the accounting records and such other procedures as we
consider necessary In the cirxurtmstences 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 GRAS 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, 0 they exist, may not
be detected. Also, an audit is not designed b 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 ads may have occurred.
However, it should be recognized that our audit provides no assurance that illegal ads generally will be
detected, and only reasonable assurance that illegal ads 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 ads that come to our attention during the course of our audit unless dearly
Inconsequential. in the event that we have to consult with the County's counsel or counsel of our
choosing regarding any illegal ads 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.
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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 financlal statements to correct material
misstatements, informing us of events that occurred subsequent to the statement date until the date of
the auditory 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 assuranm that adopted polities and prescribed procedures are adhered to and to
Identify errors and fraud or illegal acts. Asa part of our audit, we wifi consider the County's Internal control
structure, as required by GRAS, sufficient to plan time 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 structurs 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 used 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 angagements or studies. You are also
responsible for providing management's views on our current findings, concluslons 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 stetenwft are immaterial, both individually
and in the aggregate, to the financial statements taken as a whole. The Firm will rely on Management
providing these repreaemtattons 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 indemnity the Finn, 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
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Attachment - Page 3
wronghdly in falling 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 govemmental 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 dated
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 ads 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 aflentkm, unless clearly
inconsequential. Our responsibtitty 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 fasts of documentary evidence supporting the transactions recorded in the
accounts, and may Include tests of the physical existence of Inventories and dined confirmation of
receivables and certain other assets and liabilities by correspondence with selected Individuals, creditors
and financial institutions. We will request written r gnesentations 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 represer>tations 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
misatetsmenrts resulting from illegal acts and other noncompliance matters that have a direct and material
etfect 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 Aud ing 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.
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Attachment - Page 4
AUDIT PROCEDURES - COMPUANCE
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.
WWemo91. 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 audiL 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 GRAS; (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; (8) 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
Managements 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 audlt
GowOunment Auditing Standards require that we provide you with a copy of our most recent quality coi ik
review report. Our most recent peer review report aaempanles 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 Flan, 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 fine. 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.
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Attachment - Page S
Electronic transmittals
During the course of our engagement, we may need to eiectronicaby transmit confidential Information to
each other, within the Finn. and to other entitles 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 beat 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 deilvery of requested audit schedules and supporting information, timely
communication of all significant accounting and finandal 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 ci rcumstances. We strive to
ensure that we have the right professionals scheduled an 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 Flmu 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 flee.
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The estimated fees are based an 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 Finn may
Incur In connection with the collection of unpaid invoices. In the event of nonpayment of any Invoice
rendered by us, we retain dw 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 wig not be resumed until your account is paid. H 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 dais 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 parries. Should any portion of
this engagement letter be ruled Invalid, it is agreed that such Invalidity wig not affect any of the remaining
portions.
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oA LLP
EISNE PER 2MLaKen
P.O. Boa 988
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August 27, 2010
System Review Report
To the Partners of Cherry, Eekeart & Holland LLP.
and the National Peer Review !Committee
As required by the standards, enppromts selected for review Included enga
peolosre under 6ovwwmft Auditing Standards, audits of employee beneft plans, and an
audit perlbrmed under FDICIA.
In our opinion, the system of quality contral for the account ft and audftft prrcti of Cherry,
Balmert & Holland LLP., appkable to non -SEC Issuers he affect for the year ended April 30,
201% has been suitably designed and oompNed with to provide the firm with
ammenca of perfimning and reporting in conformity with ap#kW a professional standards In
all rmaterial respem Flora can receive a rating of pass, pass wide dodencyOW or jam.
Cherry, Bakaert & Holland LLP, has received a peer review rating of pass.
EisnerAmper LLP
New " N.w r , Penwaydmw • C,ymenfttm a
UPWAMW -Im"00 of M
AK PA.
October 7. 2010
Howard Joseph Kies, CPA
Chary BOOM & Holland LLP
1700 Bayberry Ct Sts 300 Ste 300
Richmond. VA 23226
Dear Mr. Kies:
It is my pleasure to no* you that on September 16.2010 the NmkrW Peer Review Committee
accepted the repod on the most recerrt rystem pear 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 s peer review rating of pass. The Committee asked roe to convey its
congratulations to the firm.
cc: Lawrence Gray, CPA
Finn Number. 10011816 Review Number: 309298