Item O6BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: July 10, 2006
Bulk Item: Yes X No
Division: Clerk's Office
AGENDA ITEM WORDING: Referral of single response to the Request for Proposals for
auditing by Cherry, Bekaert & Holland, LLP. Approval by the Board of the recommendation of
the Audit Selection Committee to appoint Danny L. Kolhage, Clerk; Suzanne A. Hutton, County
Attorney and Danise Henriquez, Tax Collector as the contract negotiating committee.
ITEM BACKGROUND: The Audit Selection Committee met on July 10, 2006 to discuss the
RFPs.
DIVISION DIRECTOR APPROVAL:
Danny L. Kolhage, Clerk
DOCUMENTATION: Included X To Follow Not Required
AGENDA ITEM NO.
Table of Contents
Cover Page
Table of Contents
Transmittal Letter
Firm Qualifications and Experience..................................................................................2
FirmProfile.......................................................................................................................................... 2
DeskReviews...................................................................................................................................... 3
Disciplinary Action and Litigation......................................................................................................... 3
Independence...................................................................................................................................... 3
Licenseto Practice in Florida............................................................................................................... 3
Experience in Peer and Quality Review............................................................................................... 3
Partner, Supervisory and Staff Qualifications................................................................5
Service Team Credentials................................................................................................................... 5
TeamOrganization.............................................................................................................................. 5
Qualifications of Assigned Personnel.................................................................................................. 6
Continuing Professional Education...................................................................................................... 8
Non -Discrimination Policy.................................................................................................................... 8
Insurance and Drug -Free Workplace Requirements............................................................................ 8
RequiredSignatures............................................................................................................................ 8
Prior Engagements with Monroe County..........................................................................9
Similar Engagements with Other Governmental Entities............................................10
CB&H Government Clients.................................................................................................12
SpecificAudit Approach....................................................................................................14
AuditApproach.................................................................................................................................. 14
AuditProcess.................................................................................................................................... 14
Useof EDP Software......................................................................................................................... 17
Information Systems Audit Procedures.............................................................................................. 17
SingleAudit Expertise.. .................. ................................................................................................... 18
GFOA Certificate Assistance............................................................................................................. 18
Assistance in Audit Documentation Required of the Auditee............................................................. 19
Identification of Anticipated Potential Audit Problems........................................................................ 19
WhyCB&H?..........................................................................................................................21
Appendix A: Professional Resumes
Appendix B: Peer Review Letters
Appendix C: Reference Letters
Cherry, Bekaert & Holland, L.L.P.
The Firm of Choice. wwwAlLcom
800 North Magnolia Avenue — Suite 1300
Orlando, Florida 32803
phone 407.423.7911
fax 407.841,4887
June 21, 2006
Monroe County Auditor Selection Committee
c/o Danny L. Kolhage, Clerk of the Circuit Court
500 Whitehead Street, Suite 101
Key West, FL 33040
Dear Auditor Selection Committee Members:
Cherry, Bekaert & Holland, L.L.P. ("CB&H") is pleased to present this proposal to serve as independent
auditors for Monroe County ("the County"). This proposal is to perform audit services for the County for the
years ending September 30, 2006 through 2008 and, subject to negotiation of contract terms, is an
irrevocable offer for ninety days.
CB&H is one of the largest accounting firms based in the southeastern United States, with 20 offices and
approximately 600 personnel. Our primary business is that of serving the public sector, with more than 100
public sector entities served throughout the southeast. County government comprises a significant portion
of the CB&H government industry group, including five counties currently served in Florida.
Our proposed service team for the County consists of seasoned professionals, the vast majority of whom
have considerable experience serving Monroe County and all of whom have significant county experience.
Each is experienced in auditing Constitutional Officers, performing audit services for the Board of County
Commissioners, and performing grant compliance procedures. I will continue to be the lead service team
professional and will be directly responsible for the performance of our services. The continuity of our
professional experience and expertise, not only in the management but also in the performance of our
work, will ensure high quality performance and priority for the Monroe County.
Outlined in this proposal are key factors that distinguish CB&H from other providers of government auditing
services. Among these are the experience level and expertise of our client service team, our firm's stature,
capabilities and focus on government services, and our knowledge of each agency within Monroe County.
Please feel free to contact me, as an authorized firm representative, at (407) 423-7911 should you have
any questions regarding this proposal.
Very truly yours,
CHERRY, BEKAERT & HOLLAND, L.L.P.
C.0 .
Ronald A. Conrad, CPA
Partner
B AKEPR Tl L LY
INTERNATIONAL
Firm Profile
Firm Qualifications and Experience
CB&H is one of the largest accounting firms based in the southeastern
United States- a limited liability partnership providing comprehensive
auditing and accounting, tax consulting and compliance, and management
consulting services to thousands of public and private companies and
governmental entities of all sizes through approximately 20 offices. Our firm,
formed in 1947, has a professional and support staff complement
approaching 600, including more than 90 partners.
Government services provide the fastest growing segment, the largest industry group and primary focus of
CB&H and our Florida practice, including more than 200 professionals. The majority of our Florida
professionals and a large percentage of our firm's total professional complement are experienced in this
industry. Our government focus, together with our size and stability, provides CB&H with unique
credentials to serve the public sector.
CB&H is a member of the AICPA SEC Practice Section and Private Structure Companies Practice Section
of the Division for CPA firms. Selected CB&H professionals are approved by the AICPA to perform peer
reviews, quality assurance reviews and consulting reviews of other firms' quality assurance programs.
Our Florida offices are located in Orlando, West Palm Beach, Tampa and St. Petersburg. Our Orlando
practice, from where our services to the County will be led, will be supported by a strong network of
professionals from within our government services group. Full-time professionals proposed to participate on
the audit of the County include three partners, three senior managers, an information systems consultant, a
manager and three auditors at senior and supporting staff positions. We anticipate continued involvement
among experienced professionals with the audits of each County agency.
Baker Tilly International Affiliation
-A an independent member o' CB&H is an independent member of Baker Tilly International, a global alliance
BAKER TILLY of more than 100 premier accounting and consulting practices focused on
INTERNATIONAL serving the global needs of growing enterprises. As the loth largest network in
the world, Baker Tilly International has offices in 67 countries with a staff of over 17,000. CB&H is a
founding member of this alliance, which offers a powerful fusion of local expertise with global reach. Baker
Tilly International members - all prominent practices in their home markets - are skilled at helping
enterprises compete effectively in the global arena,
Our affiliation with Baker Tilly International gives our Firm the best of both worlds. On one hand, we have
our roots in the Southeast while, on the other hand, we can provide a depth of services worldwide.
Desk Reviews
CB&H has successfully complied with all federal and state desk and field reviews in the last three (3) years.
There has been no disciplinary action taken or pending against the Firm in the last three (3) years.
Disciplinary Action and Litigation
There has been no disciplinary action taken against the Firm or any individual associated with the firm by
the State of Florida Board of Accountancy or other professional organizations in the past three (3) years.
Independence
CB&H is independent of Monroe County and its agencies, in accordance with Government Auditing
Standards. Specifically, CB&H is independent with respect to the Board of County Commissioners, Sheriff,
Clerk of the Circuit Court, Property Appraiser, Tax Collector, Supervisor of Elections, and Comprehensive
Plan Land Authority.
We have had no professional relationships involving Monroe County or any of its agencies or component
units during the past five years other than as independent auditors and as a provider of GO -Link CAFR
reporting services.
GO -Link is a tool used to prepare external financial statements of a local government based on the
locality's chart of accounts and trial balance. It does not process accounting transactions or generate
"basic accounting and financial records" as described in the independence rules. It is the same tool that
CB&H uses internally when asked to prepare the draft financial statements and note disclosures for audit
clients. It is for these reasons that the GO -Link report writer is a nonaudit service permissible under the
independence rules of Government Auditing Standards, described under section 3.18a, and does not
impair our independence with respect to Monroe County.
License to Practice in Florida
CB&H and its key assigned professional staff are properly licensed to practice in Florida.
Experience in Peer and Quality Review
CB&H has completed seven triennial peer reviews, all performed by national accounting firms and all of
which have resulted in unqualified reports. CB&H professionals have also been involved with numerous
peer reviews of other accounting firms. In addition, Ron Conrad has led the public sector internal peer
review processes during his tenure with CB&H and his twenty-year tenure with an international accounting
firm. The latest peer review report for CB&H, which included a review of government audits, is included as
Appendix B to this proposal.
CB&H has a number of internal practices to ensure quality of our work, not the least of which is a thorough
second partner review of audit working papers and an internal practice office review process. In addition,
our extensive partner involvement in the performance of audits ensures continuity and knowledge in the
leadership of engagement performance.
Our audits of local governments in Florida have been subjected to both peer review and internal practice
office review, as well as review by regulatory authorities for Single Audit compliance. In all instances, our
audits were accepted without any exceptions.
Partner, Supervisory and Staff Qualifications
Service Team Credentials
The quality of service you receive depends on the ability and experience of the individuals assigned to work
with you, the responsive manner in which those individuals serve, and the support those individuals have
from the firm. CB&H fosters a strong desire to work on public sector engagements and a positive
environment for the industry practice. We believe this to be very significant in contributing toward the
positive performance of our people. In addition, the overall experience and continuity of our service team
will ensure a smooth transition by knowledgeable professionals.
CB&H work will be performed by Ron Conrad, who has led the services to numerous counties in Florida
throughout his career, and a supporting team of highly experienced professionals. Because our client base
per partner and manager is much smaller than that of international accounting firms, our partners and
managers are much more actively involved with performance of audit procedures. This benefits Monroe
County through having more experienced professionals performing the work and having more continuity
from year to year. Following is a summary of our lead service team members. All of these professionals
are employed on a full-time basis.
Team Organization
Eddie Burke
Concurring Review
Peter Alfele
Senior Audit
Ron Conrad
Lead Service Partner
Linda Suggs
Senior Audit
John Montoro
Technical
Patrick Thomson
Audit Manager
Howard Rew I Carrie Cross/Laura John Taldi I I Sig Byrd
Senior Audit Tatem I I Audit In -Charge Information Systems
Qualifications of Assigned Personnel
The selection of our project team reflects our approach to this project and brings together expertise in the
areas of governmental and electronic data processing auditing. Because our client base per partner and
manager is much smaller than that of international accounting firms, our partners and managers are more
actively involved with the performance of audit procedures. Benefits to the County include having more
experienced professionals performing the work and greater continuity from year to year. The following is a
summary of our service team members' resumes. All of these professionals, except information technology
professionals who serve on a contract basis, are employed on a full-time basis and have exceeded
continuing professional education requirements during the past three years.
RONALD A. CONRAD, partner in charge of our Florida Public Sector Practice, will continue to lead our
services to the County. Ron has served Monroe County for the past three years, has served Florida county
governments throughout most of the past twenty five years, regularly speaks on public sector matters, has
authored various books and publications regarding industry developments, and was a firm -designated
compliance specialist while with an international accounting firm prior to joining CB&H. He has served on
the GFOA review committee for the Certificate of Achievement Program since the 1980's. He has also
served many of the major governments in Florida, including fourteen years of service to Orange County,
eleven years of service to Seminole County, five years of service to Hillsborough County and services to
numerous other counties. His county government experience includes considerable background with each
Constitutional Officer and the Board of County Commissioners. Further, Ron has considerable airport and
utility experience.
EDDIE BURKE, partner in charge of our North Carolina Public Sector Practice, will continue to be the
concurring reviewer for the County. In this capacity, Eddie will assist Ron in providing technical assistance
and a quality review of our report. He has considerable County experience, is a regular instructor in our
Government Services Group and works with Ron in leading much of the Firm's government practice. He
has also provided assistance to more than 75 clients in obtaining the GFOA Certificate of Achievement.
LiNDA SUGGs, senior audit manager, will be our lead manager for the audit of the Board of County
Commissioners audit and the Clerk of the Circuit Court. In this capacity, Linda will continue to work with the
County in CAFR preparation as well as on -sight presence related to audit fieldwork. Linda has 18 years of
public accounting experience, including approximately 1000 hours on the audit of Monroe County during
the past three years.
PETER ALFELE, audit senior manager, will continue to manage our services for the Sheriff. Peter has ten
years of diversified experience, including three years on the audit of Monroe County, and is our lead
manager on the audit of Martin County, among other government clients served.
HOWARD REw, senior audit manager, will lead our Single Audit procedures, a capacity for which he has
served Monroe County in the past. Howard has considerable Single Audit experience, as well as in an audit
senior manager capacity for various government engagements.
SIG BYRD, Information Technology consultant, will lead our evaluation of the County's information
systems environment. He is an experienced professional with more than 35 years in the technology
industry. Prior to joining CB&H, Sig utilized several years of technology and management experience in
the performance of technology based consulting engagements in the areas of technology risk assessment,
business continuity, general controls reviews and IT audits. He also has experience in systems
development, technical support, data center operations, information security, disaster recovery, change
control, technology integration and vendor relations.
PATRICK THomsoN, audit manager, will be our lead manager for the audits of the Tax Collector,
Supervisor of Elections and Property Appraiser. Patrick has sixteen years of public accounting experience,
in addition to working as the Comptroller for the Osceola County Sheriffs office, and has managed the
audits of the Sarasota County and Orange County Tax Collector, Supervisor of Elections and Property
Appraiser. Additionally, Patrick has served as manager on the audits of the Orange County Board of
County Commissioners, Comptroller and Sheriff and the Monroe County Sheriff audit.
JoHN TALDI, audit in -charge, will continue to serve on the various agencies of the County. John has
served the Monroe County Board of County Commissioners, each Monroe County Constitutional Officer
and the Monroe County Comprehensive Land Authority. He also has served Orange County, Charlotte
County, the City of Ft. Myers, the City of Haines City and other government organizations.
LAuRA TATEm, audit senior, will continue to serve as audit senior for the County Sheriff. In addition to
serving as the Sheriff's senior auditor last year, Laura serves on the audits of Martin County and numerous
other government organizations.
CARRIE CRoss, audit senior, will be available to assist on the County's Constitutional Officers. She has
served as audit senior for each of Orange County's Constitutional Officers, for which she is now in her third
year of service. She also has assisted on the audit of Martin County and serves a variety of other
government organizations.
In addition to the extensive experience among our service team members, the size of our Firm's
government practice and personnel complement provides assurance to the County that qualified personnel
will be available throughout our tenure as auditors. For your convenience, we have included professional
resumes in Appendix A.
Continuing Professional Education
We consider training of CB&H professionals to be extremely important to provide the highest quality of
service to our clients. We regularly have training on governmental topics and ensure our professionals are
"Yellow Book" qualified. Ron Conrad regularly speaks for the FGFOA, Central Florida FGFOA and the
FICPA, among other organizations, on governmental topics. Our firm's public sector focus also provides for
government conference calls among our firm's public sector leaders every two weeks to discuss issues of
importance for dissemination to other office professionals. This unique program assists in our information
sharing and ensures our professionals are current on issues of significance. We would welcome the
County to participate in our government program training sessions.
All of our local professionals receive government training, as required by Govemment Auditing Standards.
Non -Discrimination Polic
No person shall be denied or subjected to discrimination on account of any services or activities made
possible by or resulting from the audits on the grounds of sex, race, color, creed, national origin, age
(except minimum age and retirement provision), marital status or the presence of any sensory, mental or
physical handicap.
_ g- p Requirements
Insurance an Drug -Free ree Workplace , Requirements
We will comply with the insurance and drug free workplace requirements specified in appendices to the
Request for Proposals.
Required Signatures
CB&H agrees to sign a Truth -In -Negotiation Certificate, Public Entity Crime Statement, an Ethics Statement
and a Non -Collusion Affidavit, as requested on page 17 and 18 of the Request for Qualifications,
Prior Engagements with Monroe County
CB&H has been independent auditors for Monroe County and the Monroe County Comprehensive Land
Authority throughout the past three years. We also provided Go Link CAFR support services during this
time period. The engagement partners for these services have included Ron Conrad, Eddie Burke and
John Montoro, who are part of our current proposed audit team. Audit services have been performed by our
firm's government services group, led by our Orlando office but including professionals from our West Palm
Beach office and North Carolina and Virginia practices.
Total fours associated with our audits of Monroe County during the past three years have been
approximately 6,500, most of which have been at the partner, senior manager and manager levels. Total
hours associated with the Go Link assistance projects are estimated to have been approximately 500
hours.
Similar Engagements with Other Governmental Entities
CB&H professionals provide government services year-round, providing a solid base of knowledge and
adequate staffing capabilities for client additions. Following are references from five Florida governments
for which services are led by our Orlando office. In addition, the Orlando office has provided considerable
assistance on the audit of Sarasota County and has a substantial government practice involving state
agencies with June 30 year ends, allowing our professionals to serve government organizations throughout
the year.
Orange County, Florida
Financial and compliance audit
2001 to present
Ron Conrad
John Montoro
2800
Paul Wunderlich, Finance Director
Phone: 407-836-5720; email address: paul.wunderlich@occompt.com
16-1 i.-IRAM
Martin County, Florida
Financial and compliance audit
2005 to present
n
Ron Conrad
Eddie Burke
K =
2500
Jo Hempel, Accounting Manager
�=
Phone: 941-861-7400; email address: jhempel@martin.fl.us
Charlotte County, Florida
Financial and compliance audit
~:
rt
2005 to present
Ron Conrad
John Montoro
1800
Ann Navan, Finance Director
i
Phone: 941-743-1412; email address: ann.navan@co.charlotte.fl.us
Central Florida Regional Transportation Authority LYNX
w
Financial and compliance audit
g., =
2005 to present
g m:4r'
Ron Conrad
Elizabeth Tabor
Blanche Sherman, Accounting Manager
Phone: 407-254-6100; email address: bsherman@golynx.com
Orange County Housing Finance Authority
Financial and compliance audit
2004 to present
Ron Conrad
_v
Ray Quinton
Jim Singh, Chief Financial Officer
_ _ E�
Phone: 407-894-0014; email address: jsingh@ochfa.com
CB&H Government Clients
Our government services group continues to expand throughout the southeast. A representative listing of
government entities we currently serve is provided as follows;
Counties
Aiken County, SC
Montgomery County, NC
Charlotte County, FL
Moore County, NC
Cumberland County, NC
Nash County, NC
Durham County, NC
New Kent County, VA
Gaston County, NC
Orange County, FL
Guilford County, NC
Orange County, NC
Hanover County, VA
Pickens County, SC
Barnett County, NC
Richmond County, GA
Martin County, FL
Rockingham County, NC
Meklenburg County, NC
Sarasota County, FL
Monroe County, FL
York County, VA
Cities and Towns
City of Augusta, GA
City of Lynchburg, VA
Town of Cary, NC
City of Manassas, VA
City of Charlotte, NC
City of Morrow, GA
City of Clearwater, FL
City of Newport News, VA
City of Douglasville, GA
City of Norfolk, VA
City of Durham, NC
City of Pinellas Park, FL
City of Fayetteville, NC
City of Portsmouth, VA
City of Ft Myers, FL
City of Raleigh, NC
City of Greensboro, NC
City of Sanford, FL
City of Greenville, SC
City of Spartanburg, SC
City of Haines City, FL
City of Virginia Beach, VA
City of Knoxville, TN
City of Warm Springs, GA
City of Largo, FL
City of Wilson, NC
City of Lumberton, NC
Village of North Palm Beach, FL
School Districts
County of Chapel Hill, NC
Manatee County, FL
Cleveland County Board of Ed., NC
Manassas City Schools, VA
Collier County, FL
New Kent County, VA
Columbia County Schools, GA
Norfolk City Schools, VA
Escambia County, FL
Osceola County, FL
Goochland County, VA
Pinellas County, FL
Hanover County Schools, VA
Sarasota County, FL
Lake County, FL
Seminole County, FL
Lancaster County, SC
Lee County, FL
Lynchburg City Schools, VA
Authorities, Commissions and Agencies
County of Spartanburg School District 4, SC
Union County Board of Ed., NC
Virginia Beach City Schools, VA
Warren County, VA
Central Florida Regional Transportation Authority (LYNX)
Hillsborough Area Rapid Transit Authority, FL (HARTline)
International Drive Master Transit and Improvement District, FL
Metropolitan Atlanta Rapid Transit Authority (MARTA)
North Carolina Eastern Municipal Power Agency
North Carolina Municipal Power Agency Number 1
Orlando -Orange County Expressway Authority, FL
Orange County Housing Finance Authority, FL
Orange County Library District, FL
Pinellas County Arts Council, FL
Richmond International Airport, VA
Richmond Redevelopment Authority, VA
State of Florida
Tampa Bay Regional Planning Council, FL
Specific Audit Approach
Audit Approach
The CB&H audit approach is very heavily oriented toward involvement of experienced personnel,
comprehensive planning and regular communication. We believe the level of staffing we will provide to the
County, including extensive participation by professionals with considerable experience serving the County,
differentiates CB&H from other providers of government auditing services. The County can continue to
expect continuity among our engagement team, positive attitudes among professionals that identify public
sector as the focus of our firm, and extensive partner participation in the conduct of our work.
We believe it important to ensure technical and process issues are addressed throughout the year,
avoiding uncertainties and bottlenecks at year-end. We also believe it important that we receive client input
with regard to the conduct of our work and audit processes so that we can make appropriate adjustments
and improve our performance. Accordingly, we have met with your people to gather such input and
formulate a plan for necessary adjustments.
During the fiscal 2006 audit, we will plan to continue a schedule similar to the past for performance of audit
procedures related to each Constitutional Officer. However, in an effort to enhance timeliness and reduce
the burden of reporting in March, we have planned with the County to initiate Board of County
Commissioners year end procedures during the early part of December, rather than January. We have also
met with the Comprehensive Land Authority and a representative from its accounting firm to enhance
processes and improve timeliness related to the Comprehensive Land Authority's audit.
Our approach for the fiscal 2006 audit will include evaluation of GASB 34 retroactive infrastructure
implementation, which is required for the County in fiscal 2006, during interim procedures. We have already
had initial discussions related to this topic. In addition, during interim we will also further discuss
implementation of the new standard for revised statistical information, implementation of standards related
to other post employment benefits and additional accounting and auditing topics. Ron Conrad will lead our
efforts in this regard and work will be distributed among the audit team based on experience levels with
particular areas.
Audit Process
Our service team members are seasoned professionals knowledgeable as to the County's operations and
accounting issues. These attributes will enhance our ability to provide value to the County and to provide a
seamless transition from prior auditors. We will begin our audit with an initial planning meeting at each
Constitutional Officer and the County Finance Department to discuss issues, scheduling, expectations and
other relevant issues. We will plan to proceed with our analysis of internal control and compliance,
including matters related to information systems. We will also plan to meet regularly to identify and resolve
issues.
Our process will focus on those matters of compliance and internal control that have quantitative and
qualitative significance to the County. Such matters include compliance with state and federal compliance
requirements, bond covenant provisions, investing policies, procurement policies and County -specified
compliance provisions. From an internal control standpoint, we will focus on the County's primary business
cycles supporting financial transactions and amounts and supporting key compliance provisions related to
grant activities. Interviews and review of key documents will be the primary mechanisms for establishing
our understanding of the County systems and controls.
Segmentation
Florida county government reporting requirements include separate financial statements for each
Constitutional Officer and for the County as a whole. Most counties, including Monroe County, also
continue to issue separate financial statements for the Board of County Commissioners as well. In
addition, there are numerous special reports on specific activities.
CB&H segments Florida county government procedures based on these reporting requirements. Our
professionals, who are knowledgeable with respect to audit requirements for each County agency, will be
assigned based on their expertise with respect to each segment. Each Constitutional Officer and the Board
of County Commissioners, on which we separately report, will be assigned personnel with expertise
particularly in those respective areas. Single Audit and special report requirements will likewise be
assigned personnel with specific expertise in those areas. In addition, our audit procedures, related
documentation and our quality review will be segregated by each segment.
Sampling
Our interim and year-end audit procedures include considerable use of sampling. Sampling will be
performed for our tests of internal controls, compliance and year-end financial statement amounts, utilizing
approaches representative of populations tested. The extent to which we apply detailed audit procedures
and sampling is based on materiality, our evaluation of audit risks and internal accounting control, and the
characteristics of items comprising the account balances or class of transactions.
Our sample sizes will consider audit risk through reliability and precision factors. SAS No. 39 prescribes
the criteria for developing sample sizes, which we have utilized based on varying degrees of reliance and
confidence in internal control structure. Because our sample sizes are affected by many variables, as
prescribed by SAS No. 39, a statement about sample sizes cannot be made in absolute terms. However,
with regard to sample selection, we generally will utilize statistically generated, representative sampling for
internal control and compliance tests, including those related to Single Audit compliance, during the audit of
Monroe County. Samples will also be used in conjunction with other tests of compliance (e.g. Florida
Statutes, County Ordinances, etc.).
Our use of sampling will also consider requirements of the Single Audit Act and OMB Circular A-133.
Representative sample selections will be drawn for each separate system of internal control over major
federal financial assistance programs. We will integrate these tests, to the extent possible, with required
sampling for reliance on other aspects of the County's internal control structure. Certain compliance
matters, such as bond debt coverage requirements, are not subject to representative sampling procedures.
In such instances, we will recalculate compliance requirements or perform other applicable procedures.
Analytical Procedures
In addition to testing supporting documents and details of the accounting records, we will perform an overall
evaluation of account balances and their interrelationship with each other. We design this analytical review
to identify unexpected fluctuations in accounts, the absence of expected fluctuations, and other items that
appear unusual in light of expected results, past performances, normal relationships, and other factors.
This provides a business operation approach to auditing. Specifically, we perform analytical procedures:
To assist in planning the nature, timing and extent of our auditing procedures
Y As a substantive test to obtain evidential matter about particular assertions
Y As an overall review of financial statements in the final review stage of the audit
Our analytical procedures, which include comparisons of recorded amounts or ratios to expectations,
involve developing expectations based on plausible relationships (industry data, budget, prior year amounts
recorded, etc.). These procedures are included in the planning, substantive testing, and report review
phases of our audit.
Examples of our analytical procedures include:
Y Comparisons of interim financial balances to budget and prior year data to assist in planning
Y Comparison of water and sewer revenues to equivalent residential units
Y Comparison of year-end balance sheet amounts to expectations based on related data, such
as customer deposits to number of water and sewer customers
Y Comparison of year-end operating balances to prior year and budgeted data, and updating
analytical results from our interim planning
Y Comparison of budgeted and prior year data at the financial statement level
Determining Laws and Regulations
Our compliance audit procedures will be designed to identify and test those transactions and activities that
are likely to have a financial impact on the County's general purpose financial statements and to determine
whether they were carried out in accordance with the provisions of laws, rules, contracts, and grantor
guidelines. Our reports will note instances of noncompliance which could have a material effect on Monroe
County financial statements or major grants.
The nature and extent of our compliance tests are derived from the following:
Y Results of our analysis of internal control over compliance matters
Y Review of compliance supplements
Correspondence with federal and state agencies
Y FICPA Practice Aid for compliance auditing in Florida
i FICPA Practice Aid for compliance auditing of Constitutional County Officers
Y Florida Statutes
Y Rules of the Auditor General of the state of Florida
Bond covenants and agreements
�- Grant agreements
Y AICPA Statements of Position
Y AICPA Statements on Auditina Standards
Use of EDP Software
Our audit of the County features use of wireless technology and Engagement Manager software. With
Engagement Manager, our procedures are documented in an automated environment and files are shared
through wireless technology among engagement team members. This software also provides audit
programs and audit process documents tailored to specific industries, which we further tailor for the County.
Standardized automation of working papers is thus achieved, while also allowing the flexibility necessary
for tailoring to the County's automated environments.
At each County agency, we have coordinated efforts to achieve maximum benefit of respective automated
environments. Excel and Word documents prepared for analyzing and summarizing accounts are
commonly utilized, with such information transferred between audit and client personnel. We also utilize Go
Fund and Go Link software to import data for presentation in financial statement format and CAR
preparation.
Data Manipulation Software. In order to assist us in the audit
process, ACL data manipulation software makes it possible to
perform a 100 percent test of a transaction class for some
attributes in less time than it would take to draw a statistical
sample. ACL assists with tailored sample selections, as well as the performance of audit tests applied to
the entire population of transactions rather than a small sampling.
Other Software. We are increasingly finding use of the internet a valuable resource to identify financial
information for confirmation, to identify Auditor General, OMB and other regulatory updates that are
important to our audits, to conduct research of accounting and auditing literature, to access County web
sites for review of Commission minutes, Internal Audit reports and other information, and a myriad of other
uses.
In automating our approach to the audit, we are careful not to duplicate the County's software capabilities.
We take a long-term view toward our audits, investing considerable time and effort to automate and
coordinate use of client automation in order to enhance long-term efficiency. We will continue to seek ways
to improve as technology changes and ways to enhance our processes are identified.
Information Systems Audit Procedures
Sig Byrd will perform the review of the County's information systems environment. Sig specializes in
performing such reviews for clients throughout our firm, particularly county and city governments. With Sig,
Monroe County will have the assurance of direct review by a manager who has more than twenty years of
experience directly related to information systems. Further, this will provide continuity from year to year
and will provide the insights Sig has from his reviews throughout the firm.
Sig will assess the effect of systems processing on the County's business and will assess the reliability of
systems processing. He will focus on providing constructive service comments intended to improve the
quality of information and system controls. The results of this assessment will be integrated into our audit
approach to improve audit efficiency and to further define the way in which we address identified risk
factors.
Examples of computer controls that will be reviewed for each system include the following;
Information Security - The information security function is responsible for the administration and
maintenance of a client's information security program, including both physical and logical security. The
primary goal of such a program is to ensure that access to programs, data, on-line transactions and other
computing resources is restricted to authorized users. Our review of general computer controls in the
information security area will include an appropriate consideration of the level of security that is adequate
for a particular processing environment and the availability of access control mechanisms in that
environment.
Systems Acquisition, Development and Maintenance - Systems development personnel are
responsible for the selection and/or design, programming and maintenance of the application systems
processed to meet the needs of the various users, Our audit procedures are designed to ensure that
application programs are designed, implemented and maintained according to management's intentions
and in accordance with industry accepted practices.
Computer Operations - The computer operations department is responsible for the day-to-day
processing activities of the systems, ensuring that jobs are scheduled and processed in accordance with
established routines. It is also responsible for the physical control of data stored on portable media and
timely, accurate distribution of reports to users. Our review will be to test that these control procedures
were effective throughout the review year.
Single Audit Expertise
CB&H provides Single Audit services to five Florida counties, seven Florida School Board Districts, seven
Florida cities, and a host of other government organizations. We are also quite familiar with Monroe
County's grant programs and related compliance matters.
As a result of our concentration in government auditing, particularly related to Florida counties, CB&H has
numerous professionals with Single Audit experience. This local expertise and depth is supported by a firm -
wide network of professionals with Single Audit credentials.
In addition to the depth of experience among professional staff, Eddie Burke regularly provides Single Audit
training within CB&H and Ron Conrad was a firm -designated compliance specialist and author while with
an international accounting firm prior to CB&H.
GFOA Certificate Assistance
Over the years, CB&H has assisted the County and many other government organizations in preparing a
Comprehensive Annual Financial Report (CAFR) and applying for the GFOA Certificate of Achievement for
Excellence in Financial Reporting.
CB&H has been a long-term supporter of the GFOA Certificate of Achievement for Excellence in Financial
Reporting program. Ron Conrad, our engagement partner for the County, has seventeen years of
experience with the Special Review Committee. This committee reviews financial statements submitted by
governmental units for purposes of obtaining the Certificate of Achievement for Excellence in Financial
Reporting.
CB&H's local offices have significant experience in preparing financial statements in accordance with
accounting principles generally accepted in the United States of America applicable to units of local
government. We are proud to state that all of our clients participating in the Certificate of Achievement for
Excellence in Financial Reporting program have been successful in obtaining and maintaining the
Certificate. We utilize the GFOA Review Committee checklist in reviewing County CAFR contents and, as
part of this, also assist the County in addressing prior year comments.
Assistance in Audit Documentation Required of the Auditee
We understand that audits can result in significant burdens on client personnel, including schedule
preparation, assistance with document requests and answering of questions necessary to achieve a
quality, effective audit. We also recognize the importance of having an organized approach that identifies
what is needed up front, includes mechanisms to ensure appropriate communication between clients and
auditors during both the planning and year end procedures, includes mechanisms to identify and convey
accounting and auditing issues on a timely basis, considers client scheduling desires and contemplates
efficient and effective usage of client personnel time. CB&H provides a flexible audit that focuses on these
elements of a team approach.
Our schedule requests will be provided well in advance and contemplate use of schedules prepared for
year-end closing and other normal requirements, avoiding duplication of effort, Our knowledge of the
County's issues, personnel and operating environments should continue to provide considerable benefit in
the coordination of necessary audit information. We will continue to refine our approach to facilitate
performance of our procedures
Identification of Anticipated Potential Audit Problems
It is of utmost priority to ensure your service team professionals are current with developments in industry
practices, accounting releases and auditing requirements. In addition to a highly communicative
environment and industry training programs, the following facilitate our efforts in this regard:
Our service team understands the industry issues relevant to the County. The combination of our
firm's resources, level of partner involvement and experienced team members provides an
excellent service team of professionals capable of servicing the County's needs.
"r CB&H audits five Florida counties, providing additional insight regarding operational, internal
control and accounting matters. Knowledge from this experience will assist with our ability to most
effectively assist Monroe County.
Y Regular communication will be ongoing with the County personnel, allowing for timely knowledge
of the County matters as they arise. When we learn of matters the County may not be aware of,
we will be active in conveying relevant information.
y We are very much aware of Federal and Florida Single Audit requirements and accounting
requirements affecting County audits. As with other issues that may arise, we will work with the
County throughout the year to achieve appropriate resolution. Our resources throughout the firm,
which continue to build in the government practice, will be utilized as appropriate.
'v A number of new accounting pronouncements must be implemented in fiscal 2006 and beyond,
including those related to the post -employment benefits. We have already begun to assist with
implementation requirements and will proceed further with such assistance soon after our selection
to continue as the County's independent auditors.
The County can be assured that CB&H will provide a well -planned audit and one in which communication
will be appropriately administered. Our knowledgeable service team members, who provide government
services year round, and our tailored approach to Florida County government, will also be CB&H attributes
that prevent the occurrence of potential problems.
In summary, CB&H has a sound knowledge of the County's operations, a sound knowledge of the County's
accounting and auditing issues, and has professionals that are highly experienced and ready to serve
without conflict. We believe that the combination of these attributes, together with an approach that is
proactive in identifying and resolving audit and accounting issues, will best serve to address any potential
problems that may be experienced during the course of our tenure as auditors. We are familiar with the
excellent quality of professionals at the County that we would be working with and will not require any
assistance beyond that normally experienced in the past.
Why CB&H
CB&H meets all mandatory requirements listed in the Request for Proposals.
Y CB&H has provided audit services for the County during the past three years, accumulating
knowledge and experience and refining processes that will benefit the County and facilitate audits
going forward.
v CB&H has a strong record of growth in government services throughout the southeast and is the
only nationally recognized firm in the region which has government as its #1 priority. As recognition
of this stature, CB&H serves numerous Florida counties and other entities similar in engagement
scope and work effort to Monroe County.
y CB&H is one of the largest accounting firms based in the southeast and provides services to
entities throughout the United States. Our firm is well recognized and has abundant resource
capabilities to address Monroe County concerns.
y Our professional service team has had significant prior experience auditing Monroe County and
other counties throughout Florida, providing depth and knowledge of the County and its audit and
accounting requirements.
CB&H professionals proposed to work on the Monroe County audit have extensive experience; we
believe the experience level of our service team and the knowledge we have of Monroe County
provides CB&H with superior service team credentials.
Our service team has considerable Single Audit experience related to Florida county government
and considerable experience with the GFOA Certificate of Achievement for Excellence in Financial
Reporting program.
Y Our review of the County's information systems will be performed by an experienced manager with
35 years of information systems experience.
We know and understand the County's Go -Link CAFR preparation software and can continue to
assist the County with it's application.
Appendix A: Professional Resumes
RONALD A. CONRAD, CPA
PARTNER
EDUCATION
Iowa Wesleyan College, Bachelor of Arts in Business Administration and Accounting; has prerequisite
continuing education required by Government Auditing Standards. Licensed to practice as a certified
public accountant in the state of Florida.
EXPERIENCE
Ron leads our Florida Government Services Group and has been the engagement partner for Monroe
County the past three years. He currently serves five Florida counties, four for which he leads engagement
services, and he has served county government throughout most of his twenty five years in public
accounting. He is recognized for his expertise in accounting and compliance audit matters and is an author
and frequent speaker on public sector matters.
GOVERNMENTS SERVED
Charlotte County, FL
City of Bellaire Beach, FL
City of Boca Raton, FL
City of Largo, FL
City of Maitland, FL
City of Norfolk, VA
City of Pinellas Park, FL
City of Sanford, FL
City of Virginia Beach, VA
City of Winter Park, FL
City of Winter Springs, FL
Central Florida Regional Transportation Authority (LYNX)
Florida's Turnpike
Greater Orlando Aviation Authority
Hillsborough Area Rapid Transit Authority
Hillsborough County, FL
Hillsborough County Aviation Authority
Housing and Urban Development
International Drive Master Transit and Improvement District
PROFESSIONAL ACTIVITIES
Lake County Industrial Development Authority
Manatee County, FL
Martin County, FL
Monroe County, FL
Monroe County Land Authority, Ft_
Orange County, FL
Orange County Industrial Development Authority
Orange County Health Facilities Authority
Orange County Housing Finance Authority
Orange County Educational Facilities Authority
Orange County Library District
Orlando -Orange County Expressway Authority
Orlando Utilities Commission
Osceola County Industrial Development Authority
Putnam County, FL
Sarasota County, FL
Seminole County, FL
Seminole County Expressway Authority
State of Florida
American Institute of Certified Public Accountants
Florida Institute of Certified Public Accountants
Central Florida Chapter, Florida Government Finance Officers Association
Florida Government Finance Officers Association
EDDIE T. BURKE
EDUCATION
Bachelor of Science in Business Administration from Elon University; has more than 24 hours of relevant
continuing education during the last three years and prerequisite continuing education required by
Government Auditing Standards. Licensed to practice as a certified public accountant in North Carolina
and South Carolina.
EXPERIENCE
Eddie has twenty three years of experience in
past three years and works with Ron Conrad in
CB&H.
GOVERNMENTS SERVED
Cumberland County
Greenville County
Guilford County
Harnett County
Martin County, FL
Monroe County, FL
Montgomery County
Moore County
Nash County
Orange County
City of Fayetteville
City of Washington
City of Wilson
PROFESSIONAL ACTIVITIES
public accounting, has served Monroe County during the
leading the majority of government services provided by
Town of Carthage
Town of Cary
Town of Garner
Town of Selma
Town of Spring Lake
Asheboro Schools
Cleveland County Fire District
Moore County Airport Authority
North Carolina Indian Housing Authority
Public Works Commission
Stanley County Schools
Triangle Transit Authority
Warrenville Airport Authority
American Institute of Certified Public Accountants
Governmental Finance Officers Association Review Committee for the Certificate of
Achievement Program
Governmental Finance Officers Association
North Carolina Association of County Finance Officers
North Carolina Association of County Commissioners
LINDA SUGGS
SENIOR MANAGER
EDUCATION
Bachelor of Science in Accountancy, Wake Forest University
Linda has been the lead manager for Monroe County throughout the past three years. She is licensed to
practice as a certified public accountant in North Carolina and has 18 years experience in public
accounting. In addition to considerable experience with government auditing and accounting, Linda is well
versed on CB&H Go Link CAFR preparation and has been instrumental in CAFR preparation for the County
the past three years.
GOVERNMENTS SERVED
Monroe County, FL
Town of Spring Lake
Town of Cary
Harnett County
Cumberland County
Collier County District School Board
Public Works Commission
Moore County Airport Authority
North Carolina Indian Housing Authority
Harnett County Operations Manual
PROFESSIONAL ACTIVITIES
American Institute of Certified Public Accountants
North Carolina Association of Certified Public Accountants
GFOA Special Review Committee ("CAFR Reviewer")
PETER R. ALFELE, CPA
SENIOR AUDIT MANAGER
EDUCATION
Louisiana Tech University, Bachelor of Science in Accounting; has more than 24 hours of relevant
continuing education during the last three years and prerequisite continuing education required by
Government Auditing Standards. Licensed to practice as a certified public accountant in the state of
Florida.
Peter has served Monroe County the past three years and will continue to be the lead manager for the
Monroe County Sheriff. He also is our lead manager for the audit of Martin County, as well as numerous
other government organizations. He has ten years of public accounting experience, all of which have been
in the West Palm Beach practice.
GOVERNMENTS SERVED
Amalgamated Transit Union Local 1596 Pension Plan
Escambia County District School Board
Keysenergy Pension Plan
Lake Park Police Pension Fund
Lee County District School Board
Martin County, FL
Monroe County, FL
Palm Beach Gardens Police Pension Fund
Boynton Beach Police and Firefighters' Retirement System
Riviera Beach Municipal Firefighters' Retirement System
Riviera Beach Police Pension Fund
West Palm Beach Police Pension Fund
West Palm Beach Restated Employees' Defined Benefit Retirement System
PROFESSIONAL ACTIVITIES
American Institute of Certified Public Accountants
Florida Institute of Certified Public Accountants
Business Executives, Inc., West Palm Beach, FL
HOWARD M. REW, CPA
SENIOR AUDIT MANAGER
EDUCATION
University of Central Florida, Bachelor of Science with major in Accounting; has more than 24 hours of
relevant continuing education during the last three years and prerequisite continuing education required by
Government Auditing Standards. Licensed to practice as a certified public accountant in the state of
Florida.
EXPERIENCE
Howard has served as the lead manager for the Monroe County Single Audit and has considerable other
experience with Single Audit and other government auditing requirements. He has over twenty-two years
of public accounting experience, most in the West Palm Beach practice.
GOVERNMENTS SERVED
Monroe County, Florida
Village of North Palm Beach, FL
C. L. Brumback Health Center
Lake Park Police Pension Fund
Palm Beach Gardens Police Pension Fund
Boynton Beach Police and Firefighters' Retirement System
Riviera Beach Municipal Firefighters' Retirement System
Riviera Beach Police Pension Fund
West Palm Beach Police Pension Fund
West Palm Beach Restated Employees' Defined Benefit Retirement System
PROFESSIONAL ACTIVITIES
American Institute of Certified Public Accountants
Florida Institute of Certified Public Accountants
West Palm Beach Kiwanis Club
YMCA of the Palm Beaches
SIG BYRD
IT SPECIALIST
EDUCATION
B.A. in Economics — University of St. Thomas
Southwestern Graduate School of Banking, SMU
EXPERIENCE
Sig is an experienced professional with more than 35 years in the technology industry. Prior to joining
CB&H, Sig utilized several years of technology and management experience in the performance of
technology based consulting engagements in the areas of technology risk assessment, business continuity,
general controls reviews and IT audits. He has conducted engagements for Sarbanes-Oxley compliance,
OFAC Compliance and Gramm -Leach -Bliley Compliance. Sig also has experience in systems
development, technical support, data center operations, information security, disaster recovery, change
control, technology integration and vendor relations. Sig is certified to perform PIN and Key Management
Audits for member banks of STAR, NYCE and PULSE.
CERTIFICATIONS
Sig is certified to perform PIN and Key Management Audits for member banks of STAR, NYCE and
PULSE.
PATRICK W. THOMSON, CPA
AUDIT MANAGER
EDUCATION
Columbia University, Masters in Business Administration, Finance and Accounting major; has prerequisite
continuing education required by Government Auditing Standards. Licensed to practice as a certified public
accountant in the state of Florida.
EXPERIENCE
Patrick has sixteen years of public accounting experience, primarily with an international accounting firm.
He has more than two years of experience with CB&H and also has experience as a comptroller in
government and private industry. His Monroe County experience includes on -sight services for the Sheriff
and assistance in preparation for the audits of the Tax Collector, Property Appraiser and Supervisor of
Elections. Patrick also has considerable experience serving Sarasota County and Orange County,
particularly with regard to audits of Constitutional Officers.
GOVERNMENTS SERVED
Central Florida Regional Transportation Authority
Hillsborough Area Rapid Transit Authority
International Drive Master Transit and Improvement District
Lake County Industrial Development Authority
Monroe County, FL
Orange County, FL
Orange County Educational Facilities Authority
Orange County Health Facilities Authority
Orange County Housing Finance Authority
Orange County Library District
Orlando Utilities Commission
Osceola County, FL
Osceola County District School Board
Sarasota County, FL
School Board of Osceola County
State of Florida
PROFESSIONAL ACTIVITIES
American Institute of Certified Public Accountants
Florida Government Finance Officers Association
Florida Institute of Certified Public Accountants
New York State Society of Certified Public Accountants
JOHN TALDI
AUDIT IN -CHARGE
EDUCATION
B.S. in Accounting from University of Florida, Masters in Taxation; John has completed at least 24 hours in
subjects directly related to governmental accounting and auditing continuing education, as required by
Government Auditing Standards.
John has assisted on the audit of the Monroe County Board of County Commissioners, Comprehensive
Land Authority and each Constitutional Officer. He also has served Orange County and Charlotte County,
among other government organizations, and is the In -Charge auditor for the City of Haines City.
GOVERNMENTS SERVED
Orange County, FL
Charlotte County, FL
Monroe County, FL
City of Haines City, FL
City of Ft. Myers, FL
Osceola County District School Board
State of Florida
PROFESSIONAL ACTIVITIES
Florida Government Finance Officers Association
LAURA TATEM
AUDIT SENIOR
EDUCATION
Graduated Magna Cum Laude from UNC Wilmington with Bachelor of Business Administration degrees in
both Finance and Accounting.
EXPERIENCE
Laura served as an audit senior for the Monroe County Sheriff and for Martin County during 2005. 1n
addition, Laura has considerable experience auditing the City of Virginia Beach, City of Portsmouth, City of
Suffolk and York County.
GOVERNMENTS SERVED
City of Virginia Beach, VI
City of Portsmouth, VI
City of Suffolk, VI
Martin County, FL
Monroe County, FL
York County, VI
CARRIE CROSS, CPA
AUDIT SENIOR
EDUCATION
B.S. in Accounting from University of Florida, Masters in Accounting with emphasis in Auditing from
University of Central Florida; Carrie has completed at least 24 hours in subjects directly related to
governmental accounting and auditing continuing education, as required by Government Auditing
Standards. Licensed to practice as a Certified Public Accountant in the state of Florida.
EXPERIENCE
Carrie has been responsible for performance of daily fieldwork for the audits of each of Orange County's
Constitutional Officers and has provided assistance on the audit of Martin County. Her three years of
experience serving Constitutional Officers provides a depth of knowledge that is available to Monroe
County as the need may arise.
GOVERNMENTS SERVED
Central Florida Regional Transportation Authority
City of Sanford, FL
Collier County District School Board
Lake County District School Board
Lee County District School Board
Martin County, FL
Orange County Board of County Commissioners
Orange County Clerk of the Circuit Courts
Orange County Comptroller
Orange County Property Appraiser
Orange County Sheriff
Orange County Supervisor of Elections
Orange County Tax Collector
Orange County District School Board
Osceola County District School Board
Seminole County District School Board
PROFESSIONAL. ACTIVITIES
American Institute of Certified Public Accountants
Florida Government Finance Officers Association
Florida Institute of Certified Public Accountants
Appendix B: Peer Review Letters
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October 21, 2004
To the Partners of
Cherry Belcaert & Holland L.L P,
and the Center for Public Company Audit Firms Peer Review Committee
We have reviewed the system of quality control for the accounting and auditing practice of
Cherry 13aka.ert & Holland L.L.P. (tine firm) applicable to non -SEC issuers in effect for the year
ended April 30, 2004. The firm's accounting and auditing practice applicable to SEC issuers
was not reviewed by us since the Public Company Accounting Oversight Board (PCAOB) is
responsible for inspecting that portion of the firm's accounting and auditing practice in
accordance with PCAOB requirements. A systems of quality control encompasses the firm's
organizational structure and the policies adopted and procedures established to provide it with
reasonable assurance of complying with professional standards. The elements of quality control
are described in the Statements on Quality Control Standards issued by the American Institute of
Certified Public Accountants (the AiCPA). The design of the system, and compliance with it,
are the responsibilities of the firm. Our responsibility is to express an opinion on the design of
the system, and the firm's compliance with the system based on our review.
Our review was conducted in accordance with standards established by the Peer Review
Committee of the Center for Public Company Audit Firms and included procedures to plan and
perform the review that are summarized in the attached description of the peer review process.
Our review would not necessarily disclose all weaimesses in the system of duality control or all
instances of lacy of compliance with it since it was based on selective tests. Because there are
inherent limitations in the effectiveness of any system of quality control, departures from the
system may occur and not be detected. Also, projection of any evaluation of a system of quality
control to future periods is subject to the risk that the system of quality control may become
inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
In our opinion, the system of quality control for the accounting and auditing practice applicable
to the non -SEC issuers of Cherry Beiraert & Holland L.L.P. in effect for the year ended April 30,
2004, has been designed to meet the requirements of the quality control standards for an
accounting and auditing practice established by the AICPA, and was complied with during the
year then ended to provide the firm with -reasonable assurance of complying with applicable
professional standards.
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As is customary in a peer review, we have issued a letter under this date that sets forth ca mnenU
relating to certain policies and procedures or compliance with them. The matters described in
the letter were not considered to be of sufficient siguihcance to effect the opinion expressed in
this report.
Attachment to the Peer Review Report of Cherry Bekaert & Holland L.L.P.
Description of the Peer Review Process
Overview
Firms enrolled in the AICPA Center for Public Company Audit Firms (the Center) Peer Review
Program have their system of quality control periodically reviewed by independent peers. These
reviews are system and compliance oriented with the objectives of evaluation whether:
The reviewed firm's system of quality control for its accounting and auditing practice
applicable to non -SEC issuers has been designed to meet tic requirements of the Quality
Control Standards established by the AICPA.
The reviewed firrn's quality control policies and procedures applicable to non -SEC
issuers were being complied with to provide the firm with reasonable assurance of
complying with professional standards.
A peer review is based on selective tests and directed at assessing whether the design of and
compliance with the friars system of quality control for its accounting and auditing practice
applicable to non -SEC issuers provides the firm with reasonable, not absolute, assurance of
complying with professional standards. Consequently a peer review on the firrn's system of
quality control is not intended to, and does not, provide assurance with respect to any individual
engagement conducted by the firm or that none of the financial statements audited by the firm
should be restated.
The Center's Peer Review Committee (PRC) establishes and maintains peer review standards.
At regular meetings and through report evaluation task forces, the PRC considers each peer
review, evaluates the reviewer's competence and performance, and examines every report, letter
of comments, and accompanying response from the reviewed firm that states its corrective action
plan before the peer review is finalized. The Center's staff plays a key role in overseeing the
performance of peer reviews working closely witb the peer review teams and the PRC.
Once the PRC accepts the Peer review reports, letters of co=ents, and reviewed firms'
responses, these documents are maintained in a file available to the public. In some situations,
the public file also includes a signed undertaldug by the firm agreeing to specific follow-up
action requested by the PRC.
Firms that perform audits or play a substantial role in the audit of one or more SEC issuers, as
deftried by the Public Company Accounting Oversight Board (PCAOB), are required to be
registered with and have their accounting and auditing practice applicable to SEC issuers
inspected by the PCAOB, Therefore, we did not review the fam's accounting and auditing
practice applicable to SEC issuers.
Planning the Review for the Firm's Accounftg and Auditing Practice Applicable to Non -
SEC Issuers
To plan the review of Chcny Bekaert & Holland L.L.P., we obtained an understanding of (1.) the
nature and extent of the firm's accounting and auditing practice, and (2) the design of the fum's
system of quality control sufficient to assess the inherent and control risks implicit in its practice.
Inherent risks were assessed by obtaining an understanding of the firm's practice, such as the
industries of its clients and other factors of complexity in serving those clients, and the
organization of the firm's personnel into practice units. Control risks were assessed by obtaining
an understanding of the design of the firm's system of quality control, including its audit
methodology, and monitoring procedures. Assessing control risk is the process of evaluating the
effectiveness of the reviewed firm's system of quality control in preventing the performance of
engagements that do not comply with professional standards.
Performing the Review for the Firm's accounting and Auditing Practice Applicable to Non -
SEC Issuers
Based on our assessment of the combined level of inherent and control risks, we identified
practice units and selected engagements within those units to test for compliance with the firm's
system of quality control. The engagements selected for review included engagmnezits
performed under the Government Auditing Standards, multi -office audits, and audits of
Employee Benefit Plans. The engagements selected for review represented a cross-section of the
firm's accounting and auditing practice with emphasis on higher -risk engagements. The
engagement reviews included examining working paper files and reports and interviewing
engagement personnel,
The scope of the peer review also included examining selected administrative and personnel files
to determine compliance with the firm's policies and procedures for the elements of quality
control pertaining to independence, integrity, and objectivity; personnel management; and
acceptance and continuance of clicmts and engagements. Prior to concluding the review, we
reassessed the adequacy of scope and conducted a meeting with firm management to discuss our
findings and recommendations.
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October 21, 2004
To the Partners of
Cherry Bekaert & Holland L.L.P.
and the Center for Public Company Audit Firms Peer Review Committee
We have reviewed the system of quality control for the accounting and auditing practice of
Cherry Bekaert & Holland L.L.P. (the firm) applicable to non -Sec issuers in effect for the year
ended April 30, 2004 and have issued our report thereon dated October 21, 2004. The matters
described below were not considered to be of sufficient significance to affect the opinion
expressed in that report, which should be read in conjunction with this letter.
Engagement Performance
Finding — The firm's quality control policies and procedures require the completion of a
financial statement disclosure checklist for its full disclosure engagements. However, on several
engagements reviewed we noted inappropriate answers on the checklists in the areas of
investments and debt disclosures. As a result, several financial statements did not disclose all the
disclosures requited by generally accepted accounting principles for these two items. None of
the missing disclosures were of such significance to cause the financial statements to be
misleading.
Recommendation -- The frm should carefully review the proper use of its financial statement
disclosure checklist as part of the final financial statement review. In addition, a training session
should be held to review the questions on the checklist with regard to investments and debt
disclosures and establish procedures for resolving issues when questions about such disclosures
arise.
Finding — The firm's audit programs outline steps for performing and documenting audit
procedures for determining fair value of investments, reliance on SAS 70 Type II letters,
determining reporting entities and component units, and reviewing budgetary versus actual
information. However, our review disclosed several instances where the fma's working papers
did not include documentation for these areas. Through discussion with engagement personnel,
we were able to satisfy ourselves that the procedures were performed but not adequately
documented.
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Recommendation -- The fzrnn should remind all professionals of the matters to be considered
when documenting procedures performed in the above areas. The firm should consider
conducting a training session to highlight the documentation matters noted during the review.
Finally the f n should monitor the adequacy of Audit documentation through increased emphasis
by the reviewers of audit engagements in the above areas,.
Finding -- The firm's quality control policies and procedures require that representation letters
refer to uncorrected adjustments and that a schedule of such adjustments be attached to the
representation letters. We found several instances in which the representation letter did not
address uncorrected adjustments or the schedule attached contained incorrect amounts. These
instances did not result in any financial statement misstatements,
Recommendation — We recommend that the firm re-emphasize its policies and procedures
concerning reference to uncorrected adjustments and hold a training session to review such
procedures. In addition, aE reviewers should more closely monitor representation letters and the
schedules attached to such letters for uncorrected adjustments.
November 5, 2004
Center for Public Company Audit Firms Peer Review Committee
American Institute of Certified Public Accountants
Practice Monitoring Department
Harborside Financial Center
201 Plaza Three
Jersey City, New Jersey
This letter represents our response to the letter of comments issued in
connection with our firm's peer review for the year ended April 30, 2004, and
should be read in conjunction with that letter.
The Firm will issue communications to all professionals to focus their attention on
the matters noted in the peer review. In addition, these matters will be the focus
of training sessions to be conducted in the near future. The items noted during
the peer review will also be given emphasis in the design and delivery of future
professional development programs at appropriate levels.
The communications and training described above will emphasize (i) accurate
completion and review of our financial statement disclosure checklists,
particularly in the areas of investment and debt disclosure requirements, (ii)
documentation requirements related to procedures performed, results of such
procedures, and conclusions reached, particularly in the areas of determining fair
values of investments, reliance on SAS 70 Type II letters, determining reporting
entities and component units, and reviewing budgetary versus actual information,
and (lii) compliance with the requirements to obtain management's
representations regarding uncorrected financial statement adjustments.
Appendix C: Reference Letters
CITY OF CLEARWATER
Pos-i- Box 4748, CLEAJAWKIT-14, FUJIUM 33758-4748
'I 1\,iY]1*1'1.1:,'\�,'I-'.','[;]-', CLE-UMATF.R, I•LOKIDA 33756
Nlk'XiCIPAI. SERVIC -.-S 13ljJLI>I\(.;, 100 Sol
FINAMJAI, SIXVICHN
To Whom It May Concern:
I am pleased to have the opportunity to recommend the auditing firm of Cherry, Bekaert,
and Holland, L.L.P.
The City of.Clearwater recently hired CB&H for a five-year contract via a competitive
R_FP process, effective with the fiscal year ended September 30, 2005. The first year of
the engagement has gone very well and the CB&H has done an excellent job of making
0 = 0
the transition year a smooth one. We were very pleased with the governmental expertise
of the CB&H staff and their professionalism in completing the audit with minimal
disruption of City staff.
We have been very pleased with Cherry, Bekaert, & Holland and highly recommend the
firm. Please feel free to contact me at 727-562-45308 if you need additional information.
Sincerely,
1_/
Margaret L. Simmons, CPA
Finance- Director
1"YANK I filiIIARI), MAY(IN
3tldj ()N No�. VIC 1:-,%IAVt 114 JOHN 1)(IMN, (:;It
1071 1AMJU(A, (-.();'N(Ill �11%%JKIT ("AW.EKA. PF'I TKY:N. CMI
'T'(,WAJ. [-,,%I Ill.( IYNl INI ANI) ArFIRXIATM: Acl'lol,
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City of Largo, Florida
Post Office Box 296, Lazgc, Florida 33779-0296
Management Services Department
Kimball R. Adams, CPA, Director
E-Mail: kadams@largo.com
To Whom It May Concern:
Director (727) 587-6747
Accounting & Finance (727) 587-6719
Information Technology (727) 587-6781
FAX: f727) 586-7421
i would like to take this opportunity to recommend the auditing firm of Cherry, Bekaert and
Holland, L.LP. The City of Largo was pleased to sign a multi -year contract with Cherry, Bekaert
and Holland, L.L.P. beginning with our audit of fiscal year ending September 30, 2002.
After many years with our previous auditors, the City chose a new auditing firm. The contract was
delayed while the City Commission reviewed the proposals and asked for additional input. In
addition to this delay and change of auditing companies, 1 was also new to the City as the
Comptroller. Given all this turmoil, the audit staff conducted the audit in a very professional
manner and with as minimal disruption to City staff as possible. The audit field staff was
knowledgeable and willing to listen to explanations given.
If you would like to discuss Cherry, Bekaert and Holland, L.L.P. any further, please contact either
myself of Kimball Adams, CPA, Management Services Director, at (727) 587-6719,
Yours in Community Service,
Wende Hester
Comptroller
City 01
PI N ELLA S PA.FtK
5141 78TH AVE. • P.O. SOX 1100
PINELLAS PARK, FL33780-1100
April 15, 2005
To Whom It May Concern:
FLORA
PHONE • (727) 541-0700
FAX (727) 544-7448
SUNCOM 969-1o11
I am pleased to have the opportunity to recommend the auditing firm of Cherry,
Bekaert & Holland. The City of Pinellas Park has been a client of theirs for the
past two years. After spending many years with our previous auditors, we were
concerned about dealing with a new firm. In addition to being our first year with
new auditors, it was also the year we were required to implement GAS13
Statement 34. 1 must admit we were a little worried about both new things
happening in the same year.
l am happy to say the transition went very smoothly and we were very pleased.
We were provided with a very professional, experienced and knowledgeable
staff. They were a great help to us in our conversion to GASB Statement 34 and
were a pleasure to work with.
The City of Pinellas Park has been very satisfied with Cherry, Bekaert & Holland
and highly recommends their services. Please feel free to contact me personally
at 727-541-0700, ext. 1200 if you need further information.
Sincerely,
George E. Kotala
Assistant Finance Administrator
OW
PRfNTED ON RECYCLED PAPER
City of Satiford,, Fiorida
P.O. Box 1788 • 32772-1788
(407) 330-5610 • (407) 330-5666 Fax
Office of the Finance Director
Kevin L. Smith, CGFO
March 5, 2003
TO WHOM IT MAY CONCERN:
The City of Sanford entered into a 5-year contract with Cherry, Bekaert & Holland, L.L.P. for auditing
services effective with the City's audit for fiscal year ended September 30, 2002. Mr. Ron Conrad, CPA is
the Partner -in -charge of this engagement.
Cherry, Bekaert & Holland was selected through a formal competitive negation process. Their selection
was based on the firm's strong presence and expertise in the government sector and its knowledge of
ongoing changes in governmental financial reporting.
Mr. Conrad became immediately involved in the annual audit by meeting with the appropriate City staff
during the audit -planning phase and maintained an on -site presence throughout the audit process. Further,
the expertise of the audit staff involved in the engagement facilitated a smooth transition to the new audit
team. The audit staff displayed professional discipline in their approach to gathering the necessary
information to complete the audit resulting in minimal impact on the City's daily workflow.
Upon completion of the audit, Mr. Conrad presented the results of operations to the City Commission. The
presentation was professional, crisp, clear and concise. I would recommend the firm of Cherry, Bekaert and
Holland, L.L.P. without reservation. If there are any questions in regard to this matter, please do not
hesitate to call.
Sincerely,
�KzevinuCGFO
Director of Finance and
Administrative Services
"Tie Friendly City"
THE SCHOOL DISTRICT OF LEE COUNTY
2055 CENTRAL AVENUE • FORT MYERS, FLORIDA 33901 - (239) 334-1102 - TTOrrTY (239) 335-1512
June 20, 2005
To Whom It May Concern:
B LINpF; %. BCRICCA• I�H. �.
G W.a1F M6N QIaTq�GT3
B GREAT �, [�HILM4NIK
V,Ce CNwIRMnN QIOTRICT i
Dlarnlcr 2
JANE E. KLIGKEL, PH.L].
DIQTIgICT �
S'TEVEN K. TELIBER
0181—CT 4
JAmEs W. BROVvGEFI, E:C.f].
suJ a.IN E@ OBNT
KE1TH B. MARTIN
BO.gC A—om,ay
I am writing this as a letter of reference for the firm of Cherry, Bekaert, and Holland,
L.L.P.
The School District of Lee County selected Cherry, Bekaert to be its independent auditors
through a Request for Proposal process in 2003. We appreciated the interaction, hands-on
approach, and accessibility of the senior partners. We were impressed by the
qualifications and professionalism of the staff assigned to our engagement.
Now, two years later, I ant pleased to say that our experience with the firm has been all
that we expected. As 2003 was the first year that our District prepared a Comprehensive
Annual Financial Report, the staff was extremely helpful in ensuring that information
was presented in the format desired by the Government Finance Officers Association and
the Association of School Business Officials. As a result, we received awards for
excellence in financial reporting from both Associations.
In addition, we expanded our original engagement to include a risk assessment of District
procedures as recommended by the State of Florida's Office of Program Policy Analysis
and Government Accountability. This was the first time that a formal risk assessment of
our District procedures was performed and the firm was helpful to the staff and thorough
in their review. In addition, the firm ensured that the auditors involved maintained
independence from the auditors that performed the audits of our financial records. We
look forward to the finished product within a couple of weeks.
I would recommend Cherry, Bekaert and Holland, L.L.P. as a professional, conscientious
audit firm offering personal attention.
Sincerely,
j L L_�Z
/r,
Greta S. Campbell, Direct
Financial Accounting Department
OIESTPFICT %ffavo V
TO BE A WORLQ-CLASS SCHOOL SYSTEM
a1011-MC-17 MIJl91OIV
To ;-ROVIDE A UUALITY EDUCATION IN A SAFE AND WELL -MANAGED ENVIRONMENT
.0
PINELLAS COUNTY
SCHOOLS
ADMINISTRATION BUILDING
301 Fourth Street S.W.
P.O. Box 2942
Largo, FL 33779-2942
(72.7) 586-1818
PAX (727) 588-6202
School Board of
Pinellas County,
Florida
Chairman
Nancy N. Bostock
Vice Chairman
Carol J. Cook
Mary L. Tyus Brown
Janet R. Clark
Jane Gallucci
Linda S. Lerner
Mary L. Russell
Superintendent
Clayton M. Wilcox, Ed.D.
Pinellas County Schools is
an equal opportunity
institution for education
and employment
To Whom It May'Concern:
I am happy to take this oppoil nity to recommend the auditing firm of Cherry,
Bekaert and Holland (CBH). Pinellas County Schools has been a client of CBH
for the past four. years. CBH has exhibited professionalism in governmental
accounting and auditing. The audit staff has approached their task with great
professionalism while maintaining an amicable attitude towards school board
personnel.
I know it isn't said very often if ever about auditors, but it has been a pleasure
working with them.
Sincerely,
Kevin Smith, CPA
Director of Accounting
Printed on Recycled Paper
THOMAS E. CHALIFOUX, JR.
DISTRICT NO. 2 - KISSIMMEE
PHONE: 407-846.0977
TOM GREER
DISTRICT NO. 4 - KISSIMMEE
PHONE: 407.892.8200
JOHN MCXAY
DISTRICT NO. 5 - ST, CLOUD
PHONE: 407.957.4056
DAVID E. STONE
DISTRICT NO. 3 - KISSIMMEE
PHONE: 407-933.2700
JAY WHEELER
DISTRICT NO. 1-KISSIMMEE
PHONE: 407-390.0505
Administrative Cemaler Offices
Alternative Programs
805 Bill Beek Boulevard
Ktsaimmee, FL 34744.4495
PHONE: 407-343.8713
FAX: 407.343.8776
EKeeptional Student Educallon
ll BII Beck Boulevard
Kissimmee, FL 34744.4496
PHONE: 407-343-B700
FAX: 407-343.8626
Facilities
809 Bill Beck Boulevard
Kissimmee, FL 34744.4495
PHONE: 407-518.2964
FAX: 407.618.2985
Professional Development
799 BIII Beck Boulevard
Kissimmee, FL 34744.4495
PHONE: 407-518.2940
FAX: 407.518-2988
Student Services
801 Bill Beck Boulevard
Kissimme", FL 34744.4405
PHONE: 407-870-4897
FAX: 407.870.4629
The School District of Osceola County, Florida
Blaine A. Muse - Superintendent
817 Bill Beck Boulevard • Kissimmee, Florida 34744-4495
Phone: 407-870-4600 - FAX 407-870-4010 - www.osceola.k12.f1.us
March 3, 2003
Cherry, Bekaert & Holland, L.L.P.
800 N. Magnolia Ave., Suite 1300
Orlando, Florida 32803
To Whom It May Concern:
I am writing this as a letter of reference for Cherry, Bekaert, and Holland, L.L.P.
The School District of Osceola County selected Cherry, Bekaert as its
independent auditors through an RFP process in 2001. We appreciated the
specific nature of their response to our request as opposed to the more generic,
canned approaches taken by some of the larger firms. We were impressed by the
qualifications and professionalism of the staff assigned to our engagement. We
also liked the close access promised to upper management of the firm. We felt
that we would have contact directly with Tony Morris, who is a partner. The
senior audit supervisor, Alisa Train, is only one level below Tony and has direct
involvement in the audit.
Now, a year later, I am pleased to say that our experience with Cherry, Bekaert
has been as good as we hoped it would be.
We expanded our original engagement to include Internal Accounts. The Internal
Accounts audits for 2001 and 2002 have been completed, and we are current for
the first time in years. Cherry, Bekaert was very good to us in pricing these audits
and absorbed cost overruns due to the first time engagement.
The District audit is in final draft now. I think the audit was thorough, but it was
accomplished without unnecessary demands on my staff. The auditors worked
around our schedules. They were reasonable in accepting supporting records and
explanations. I worked closely with Tony Morris and Alisa Train both in
preparing our statements and on the audit. They have always been cooperative,
reasonable, and responsive. They have produced a good finished product.
I feel that we made the right decision in selecting Cherry, Bekaert. I would
recommend them as a professional, conscientious audit firm offering personal
attention and direct access to high level personnel at the firm.
Sincerely,
d' r
William C. Collins
Coordinator of Accounting and Audit
Board Meets First Tuesday of Each Month
DISTRICT -WIDE ACCREDITATION BY THE SOUTHERN ASSOCIATION OF COLLEGES AND SCHOOLS
An Equal Opportunity Agency
EXPRESSWAY
AUTHORITY
September 26, 2002
To whom it may concern:
ORLANDO - ORANGE COUNTY
S25 SOUTH MAGNOLIA AVENUE, ORLANDO, FLORIDA 32801-4414
TELEPHONE (407) 316.3800 • FAX (407) 316-3801 • W W W.00CBA.COM
The Orlando -Orange County Expressway Authority chose Cherry, Bekaert & Holland as its
auditors during the spring of 2002. We have since been very pleased with the services of Cherry,
Bekaert & Holland in all respects.
Cherry, Bekaert & Holland has provided an experienced and knowledgeable service team that has
been very helpful and a pleasure to work with. The professional service team also quickly gained
an understanding of our business and audit requirements, provided helpful suggestions and
assisted in what has been a very smooth transition.
We at the Orlando -Orange County Expressway Authority have been very satisfied with Cherry,
Bekaert & Holland and highly recommend its services.
Very truly yours,
Nita Crowder
Deputy Chief Financial Officer
ALLAN E. KEEN ORLANDO L. EVORA JAMM R. MGH, JR. RICHARD T. CRO= MICHAEL SNXDER, P.E. HAROLD W. WORRALL, P.E.
Chairman Vice Chairman Secretary/Treasurer Ex OHiclo Member Ex Otficlo Member Executive Director
Orange County Florida Department of
Transportation
OF 5 '2'SPT,y THE SCHOOL BOARD OF SARASOTA COUNTY, FLORIDA
FINANCIAL SERVICES DEPARTMENT
�.,•vtio' 1960 LANDINGS BOULEVARD SARASOTA, FLORIDA 34231-3331
TELEPHONE (941) 927-9000 - FAX (941) 927-4017
www.sarasota.1c12JI. us
March 1, 2002
TO WHOM IT MAY CONCERN:
Cherry, Bekaert, and Holland has audited the School Board of Sarasota County every two out of
three years beginning with the 1998-99 fiscal year. The third year must be audited by the Auditor
General.
The School Board of Sarasota County has been very satisfied with the professionalism of Cherry,
Bekaert, and Holland's staff that has been assigned to the audit. On January 22, 2002, we
renewed another three year contract with the firm. In addition, the School Board of Sarasota
County has entered into an agreement with Cherry, Bekaert, and Holland to assist the district in
its transition to GASB Statement number 34 with its implementation this fiscal year.
Any questions regarding Cherry, Bekaert, and Holland should be referred to either Carrie
Hannabass, Acting Controller, or myself as Executive Director of Finance. The SUNCOM
number for the Finance Department is 529-1300.
Sincerely,
Bruce C. Monson
Executive Director
BCM:dj
An Equal Opportunity /Affirmative Action Agency
/. Srrict Scl> o
�
OFFICE OF THE EXECUTIVE DIRECTOR
4
o
BUSINESS SERVICES
1
3710 Estey Avenue
F
_21
Naples, Florida 34104.4499
�rwo�Ia
cI®�
(941) 436-6417
�r Collier
Cout`,
(941) 436-6599 FAX
February 18, 2002
To Whom It May Concern:
The Collier School District has entered into a multi -year contract for audit services with the
C.P.A. firm of Cherry, Bekaert & Holland. This firm has performed two audits for the district
and I highly recommend them for the reasons listed below:
° Professionalism
° Timeliness
° Flexibility with schedules
• Speed and efficiency
An audit of a governmental entity with a $500 trillion budget, and a limited finance and
accounting staff, is a difficult task to accomplish without significant disruptions to the normal
workload. The firm of Cherry, Bekaert and Holland has effectively worked with us to achieve
success.
Please feel free to contact me personally at (941) 436-6417 or SC 752-641.7 if you need
further information.
Sincerely,
6�
Stephen M. Fain
Executive Director of Business Services
SMF:jcb
01-021cbh audit
COLLIER COUNTY CHARACTER EDUCATION TRAITS
Fairness Honesty Kindness Perseverance Respect Responsibility Self -Discipline ° PSA
THE COLLIER COUNTY PUBLIC SCHOOL SYSTEM IS AN EQUAL ACCESS I EQUAL OPPORTUNITY INSTITUTION FOR EDUCATION AND EMPLOYMENT,