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2003-037 Rachlin, Cohen & Holtz Agrmnt. for FY 2002-03 Audit• RESOLUTION 37-2003 A RESOLUTION OF THE VILLAGE COUNC[L OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA, AUTHORIZING THE MAYOR AND VILLAGE CLERK TO ENTER INTO AN AGREEMENT WITH RACHLIN, COHEN & HOLTZ, LLP, CERTIFIED PUBLIC ACCOUNTANTS, ATTACHED AS EXHIBIT "A", WHICH AGREEMENT IS FOR THE PURPOSE OF SECURING AN ANNUAL AUDIT OF THE GENERAL PURPOSE FINANCIAL STATEMENTS OF THE VILLAGE FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2003; AND, PROVIDING FOR AN EFFECTIVE DATE. BE IT RESOLVED BY THE VILLAGE COUNCIL OF NORTH PALM BEACH, FLORIDA: Section 1. The Village Council of the Village of North Palm Beach, Florida, does hereby approve the agreement with Rachlin, Cohen & Holtz, LLP, certified public accountants, attached as Exhibit "A", which agreement is for the purpose of securing an annual audit of the general purpose financial statements of the Village for the fiscal year ending September 30, 2003. Section 2. The Mayor and Village Clerk are hereby authorized and directed to execute the agreement with Rachlin, Cohen & Holtz, LLP, set forth in Exhibit "A" for and on behalf of the Village of North Palm Beach. Section 3. This resolution shall take effect immediately upon its adoption. (i A ~1 LJ PASSED AND ADOPTED THIS 14th DAY OF AUGUST, 2003. Rachlin Cohen & Holtz ~Lr Certified Public Accountants & Consultants CJ July 28, 2003 Village of North Palm Beach, Florida 50] U.S. Highway I North Palm Beach, FL 33408 We are pleased to confirm our understanding of the services we are to provide the Village of North Palm Beach for the year ended September 30, 2003. We will audit the financial statements of the Village of North Palm Beach as of and for the year ended September 30, 2003. We understand that the financial statements will be presented in accordance with the financial reporting model described in GASB Statement No. 34. Also, the financial statements will be a part of the Comprehensive Annual Financial Report (CAFR), which is the final document that will be submitted to the Village of North Palm Beach. The CAFR we submit to you will include the following additional information that will be subjected to the au- diting procedures applied in our audit of the financial statements: l . Management's Discussion and Analysis 2. Budgetary Comparison Schedules 3. Schedules of Funding Progress and Employer Contributions The CAFR will also include the following additional information that will not be subject to the auditing procedures applied in our audit of the financial statements, and for which our accountant's report will dis- claim an opinion. 1. Statistical Section Audit Objectives The objective of our audit is the expression of an opinion as to whether your 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 refereed to in the first paragraph when considered in re- lation to the financial statements taken as a whole. Our audit will be conducted in accordance with U.S. generally accepted auditing standards and the standards for financial audits contained in Government Audit- ing Standards, issued by the Comptroller General of the United States, and will include tests of the account- ing records of the Village of North Palm Beach and other procedures we consider necessary to enable us to express such an opinion. If our opinion on the financial statements is 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 un- able to form or have not formed an opinion, we may decline to express an opinion or to issue a report as a result of this engagement. r ~ LJ Phillips Point East Tower 777 South Flagler Drive, Suite 1 i0, West Palm Beach, Flurida 33101 • Tel 561-633-000? • Fax i6t-333-3?3i Offices in: tbliami Ft. Lauderdale West Palm Beach Stuart --- - - -- -- - www.rchcpa,com _ .- .. - ?IemMv n( Summit Inlematiunal:\.tixian~s, Inc. +rilh offices in principal citiiti throughout Ihe+rorld )Iemhr u(Ihe American Inslilulr n! Certifini I'nhlic Attoun6mts' and memher of Iht. Flurida Irtrtitute ai Cer,iG.-0 Public dccounlanl+ Village of North Palm Beach, Florida July 28, 2003 • Page 2 We will also provide reports (that do not include opinions) on internal control related to [he financial state- ments and compliance with laws, regulations, and the provision of grant agreements, noncompliance with which could have a material effect on the financial statements as required by Govern- ment Auditing Standards. Management Responsibilities Management is responsible for establishing and maintaining internal control and for compliance with the provisions of laws, regulations, contracts, and agreements. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of the controls. The objectives of internal control are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorizations and recorded properly to permit the preparation of finan- cial statements in accordance with generally accepted accounting principles. Management is responsible for making all financial records and related information available to us. We understand that you will provide us with such information required for our audit and that you are responsi- ble for the accuracy and completeness of that information. We will advise you about appropriate account- ing principles and their application and will advise you in the preparation of your financial statements, but the responsibility for the financial statements remains with you. That responsibility includes the establish- ment and maintenance of adequate records and effective internal control over financial reporting, the selec- tion and application of accounting principles, and the safeguarding of assets. Management is responsible for adjusting the financial statements to correct material misstatements and for confirming to us in the rep- resentation letter that the effects of any uncorrected misstatements aggregated by us during the current en- gagement and pertaining to the latest period presented are immaterial, both individually and in the aggre- gate, to the financial statements taken as a whole. You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud affecting the government involving (a) management, (b) employees who have significant roles in in[emal control, and (c) others where the fraud could have a material effect on the financial statements. You are also responsible for informing us of your knowledge of any allegations of fraud or suspected fraud affecting the government received in communications from employees, former employees, regulators, or others. In addition, you are responsible for identifying and ensuring that the entity complies with applicable laws and regulations. Audit Procedures-General An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the finan- cial statements; therefore, our audit will involve 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 as- surance about whether the financial statements are free of material misstatement, whether from errors, fraudulent financial reporting, misappropriation of assets, or violations of laws or governmental regulations that are attributable to the Village or to acts by management or employees acting on behalf of the Village. 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 noncompli- • ance may exist and not be detected by us. In addition, an audit is not designed to detect immaterial mis- Village of North Palm Beach, Florida July 28, 2003 • Page 3 statements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements. However, we will inform you of any material errors that come to our attention, and we will inform you of any fraudulent financial reporting or misappropriation of assets that comes to our attention. We will also inform you of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not extend to matters that might arise during any later periods for which we are not en- gaged as auditors. Our procedures will include tests of documentary evidence supporting the transactions recorded in the ac- counts, and may include tests of the physical existence of inventories, and direct confirmation of receiv- ables and certain other assets and liabilities by correspondence with selected individuals, creditors, and fi- nancial institutions. We will request written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will also require certain written representations from you about the financial statements and related matters. Identifying and ensuring that the Village of North Palm Beach complies with laws, regulations, contracts, and agreements is the responsibility of management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of the Village of North Palm Beach's compliance with applicable laws and regulations and the provisions of contracts and agreements. However the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an opinion. Audit Procedures-Internal Controls In planning and performing our audit, we will consider the internal control sufficient to plan the audit in order to determine the nature, timing, and extent of our auditing procedures for the purpose of expressing our opinion on the Village of North Palm Beach's financial statements. We will obtain an understanding of the design of the relevant controls and whether they have been placed in operation, and we will assess control risk. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the financial statements. (Tests of controls are required only if control risk is assessed below the maximum level.) 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. An audit is not designed to provide assurance on internal control or to identify reportable conditions. How- ever, we will inform the governing body or audit committee of any matters involving internal control and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of [he internal control that, in our judgment, could ad- versely affect the entity's ability to record, process, summarize, and report financial data consistent with the • assertions of management in the financial statements. Village of North Palm Beach, Florida July 28, 2003 • Page 4 Audit Administration, Fees, and Other We understand that your employees will prepare all cash or other confirmations we request and will locate any invoices selected by us for testing. We expect to begin our audit on approximately November 17, 2003 and to issue our reports no later than January 31, 2004. Our fee for these services will be at our standard hourly rates and we anticipate that our gross fee will not exceed $21,700 far the audit of the Village's financial statements. Our standard hourly rates vary according to the degree of responsibility involved and the experience level of the personnel assigned to your audit. Our invoices for these fees will be rendered each month as work progresses and are payable on presenta- tion. The above fee is based on anticipated cooperation from your personnel and the assumption that unex- pected circumstances will not be encountered during the audit. If significant additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the additional costs. In accordance with our firm's policy, the terms of this engagement letter are subject to approval by our in- ternal Risk Acceptance Committee. Goventmeat Auditing Standards require that we provide you with a copy of our most recent quality control review report. Our 2001 peer review report accompanies this letter. We appreciate the opportunity to be of service to the Village of North Palm Beach, and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. Other Matters Audit Period -This agreement shall commence on the date that this instrument is fully executed by both parties. The terms of this agreement shall be for the year ending September 30, 21103. This contract may be renewed annually to include the audit of the basic financial statements for the year ending September 30, 2004, as hereinafter specified. Either party to this Agreement may give notice of in- tent to renew at least ninety (90) days prior [o expiration of the initial term of ninety (90) days prior to expi- ration of the first renewal term. The party who received notice shall have a period of forty-five (45) days in which to either accept or reject the offer to renew. If the offer to renew is accepted, then the contract shall be extended for a one (1) year period. If the offer to renew is rejected by the other party, then this contract shall expire at the end of such year unless this agreement is otherwise terminated in accordance with other provisions set forth in this agreement. Termination of Services - It is understood and agreed that this Agreement shall be terminated with or with- out cause upon thirty (30) days written notice by the Village or ninety (90) days written notice by the Audi- tor during the term of this contract or extension thereof. Auditor shall be compensated through the date of • termination based on the hours incurred at the Auditor's billing rates as set forth in this letter of engage- ment. Village of North Palm Beach, Florida July 28, 2003 • Page 5 Assignment of Work -This Agreement, or any interest therein, shall not be assigned, transferred or other- wise encumbered, under any circumstances by Auditor. However, the Agreement shall run to the Village and to any of its successors. Very truly yours, ~. A-e~1..e.t,,J ~-~..eaJ r- ~4-~, L L Rachlin Cohen & Holtz LLP o Certified Public Accountants RESPONSE: This letter correctly sets forth the understanding of the Village of North Palm Beach. Tide: ' d \n C~-t J.~... Date: l.~ ~ ~{ ~- ~ ~ 3 -r r ATT ST: i~ / !% /iit~ Village C erk .~