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2006-076 Audit Agreement with Nowlen, Holt & MinerRESOLUTION 2006-76 A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA, APPROVING AN AGREEMENT FOR INDEPENDENT ANNUAL AUDITING SERVICES WITH NOWLEN, HOLT & MINER, P.A. AND AUTHORIZING THE MAYOR TO EXECUTE SAME ON BEHALF OF THE VILLAGE; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the Village issued a Request for Proposals for Annual Independent Auditing Services dated July 18, 2006 ("RFP"), and the Village's Auditing Committee reviewed the responses to the RFP and made a recommendation to the Village Council for the selection of an annual independent auditor for the Village; and WHEREAS, having considered the Audit Committee's recommendation, the Village Council selected Nowlen Holt & Miner, P.A. to perform such services and wishes to formally execute an Agreement with Nowlen Holt & Miner in accordance with the terms of the RFP and its response thereto; and WHEREAS, the Village Council determines that the execution of this Agreement is in the best interests of the Village and its residents. NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF NORTH PALM BEACH, FLORIDA as follows: Section 1. The Village Council hereby approves the Agreement for Auditing Services with Nowlen, Holt and Miner, P.A. to provide auditing services to the Village for the fiscal year ending September 30, 2006, through the fiscal year ending September 30, 2010, unless terminated as provided therein. A copy of the Agreement for Auditing Services is attached hereto as Exhibit "A" and incorporated herein by this reference. The Village Council hereby authorizes the Mayor to execute the Agreement on behalf of the Village. Section 2. All resolutions or parts of resolutions in conflict herewith are hereby repealed to the extent of such conflict. Section 3 This resolution shall take effect immediately n»nn atln»tinn PASSED AND ADOPTED THIS 28~' DAY OF (Village Seal) ATTEST: __- VILLAGE CLERK AGREEMENT FOR AUDITING SERVICES ~~ THIS AGREEMENT is made and entered into this d day of September, 2006 by and between the Village of North Palm Beach, Florida, a Florida municipal corporation ("Village") and Nowlen Holt & Miner, P.A., a Florida corporation ("NH&M"). WITNESSETH: WHEREAS, the Village issued a Request for Proposals for Annual Independent Auditing Services dated July 18, 2006 ("RFP"); and WHEREAS, the Village's Auditing Committee reviewed the responses to the RFP and made a recommendation to the Village Council for the selection of an annual independent auditor for the Village; and WHEREAS, having considered the Audit Committee's recommendation, the Village Council selected NH&M to perform such services on behalf of the Village. NOW, THEREFORE, in consideration of the mutual representations and obligations herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: I. The Village hereby selects NH&M to supply annual independent auditing services on behalf of the Village in accordance with the RFP issued by the Village. 2. NH&M agrees to perform such services for the Village in accordance with the requirements of Sections C, D, E and F of the RFP, attached hereto as Exhibit "1" and incorporated herein by this reference, and its Engagement Letter dated Septembera~,~i2006, attached hereto as Exhibit " 2" and incorporated herein by this reference. In the event of a conflict between the terms of the RFP and the Engagement Letter, the terms of the RFP shall control. 3. The Village shall compensate NH&M in accordance with the terms and conditions set forth in the Engagement Letter and Exhibit "A" attached thereto. The Total Price for Audit Services set forth in Exhibit "A" to the Engagement Letter encompasses all general auditing services performed on behalf of the Village, including the County Club Enterprise Fund, but does not include any Single Audits that may be requested by the Village during the term of the Agreement. The fee for such Single Audits is set forth in Exhibit "A" to the Engagement Letter. 4. This Agreement may be terminated for any or no reason upon thirty (30) days' written notice by the Village or ninety (90) days' written notice by NH&M. The Village shall compensate NH&M through the date of termination based on the hours incurred at NH&M's discounted rates set forth in Exhibit "A" to the Engagement Letter. Page 1 of 2 5. During the term of this Agreement, NH&M agrees to keep and maintain professional liability insurance with minimum coverage of $500,000 per claim. 6. In the event any lawsuit is brought to enforce compliance with the terms of the Agreement or interpret same, or if any administrative proceeding is initiated for the same purposes, the prevailing party shall pay to the non-prevailing party reasonable attorney's fees and costs, including appellate fees and costs. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. VILLAGE OF NORTH PALM BEACH By (VILLAGE SEAL) ATTEST: VILLAGE CLERK Witnesses: NOWLEN, HOLT & MINER, P.A. Print Name: Geraldine Sibel Name: Edward T. Holt Title: President Prin Name: Judy Drake Page 2 of 2 EXHIBIT "1" TO AUDITING SERVICES AGREEMENT SECTIONS C, D, E AND F OF THE RFP FOR ANNUAL INDEPENDENT AUDITING SERVICES C. SCOPE OF AUDIT The funds to be audited are those listed in Exhibit A of this proposal. The Village shall have closed and balanced all accounts for all funds to be examined by the auditor by November 15`h of each year. a. REPORTS: The auditor shall prepare (30) bound copies and one electronic copy of the Villages' Comprehensive Annual Financial Report and shall include an opinion on the General Purpose Financial Statements and "in relation to" opinion on individual funds and supplementary schedules (including budgetary basis reporting of the Country Club Enterprise Fund). The financial statements shall be prepared in conformance with the generally accepted accounting principles applicable to government entities for General Purpose Financial Statements and on an individual basis for all funds and account groups as described in statements issued by the Governmental Accounting Standards Board and Auditor General and any amendments thereto with supplemental schedules for sub-funds and consistent with GFOA Certificate of Achievement Standards and Practices. The Auditor will be responsible for the preparation of Governmental Accounting Standards Board 34 (GASB 34) Financial Report and all related supporting schedules for GASB 34 reporting. Special reports shall be prepared concurrently with the report on the General Purpose Financial Statements required above or at other times as specifically required by law, and contracts. The following reports shall be required. • Report on Internal Auditing Controls and other matters based solely on a study and evaluation made as part of the examination of the General Purpose Financial Statements. • Report on compliance based on the examination of the General Purpose Financial Statements performed in accordance with the standards for audit issued by the U.S. General Accounting Office and Government Auditing Standards. • Report on supplementary information including the budgetary basis reporting of the Village Country Club Enterprise Fund and schedule of Federal Financial Assistance, if applicable. • Report on compliance with laws and regulations related to major Federal ~ financial assistance programs, if applicable. • Report on internal controls (accounting and administrative) based on a study and evaluation made as part of the examination of the General Purpose Financial Statements and the additional test required by the Single Audit Act, if applicable. • State of Florida, Annual Local Government Financial Report. • Any other required disclosures or report. 2 The auditors shall observe the adequacy of the system of internal control. If weaknesses are noted, appropriate recommendations should first be reviewed with the appropriate officials and included in a separate letter to the Village Council. D. AUDITING STANDARDS The examination shall be conducted in accordance with (a) generally accepted auditing standards as promulgated by the American Institute of Certified Public Accountants (AICPA) including the AICPA's Industry Audit Guide, Audits of State and Local Governmental Units, (b) Standards for Audit of Governmental Organizations, Programs, Activities and Functions (excluding the review of economy and efficiency of operations and program results) as published by the Comptroller General of the United States, (c) OMB Circular A-128, (d) Rules of the Auditor General, State of Florida, and (e) any other applicable Federal, State, Local Regulations or Professional Guidance not specifically listed above. E. CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING Auditor shall provide advice, consultation and assistance in connection with the preparation and submission of the Village's Comprehensive Annual Financial Report to the Government Finance Officers Association, for that organization's review and determination of the Village's eligibility to receive a Certificate for Excellence in Financial Reporting. This service is not intended to be construed as extra work or additional services. F. COMPLETION OF WORK The auditor's must complete all audit work and provide a "Draft" Audit Report to the Village by January 31. A Final Audit Report shall be provided by February 28. f EXHIBIT " 2" TO AUDITING SERVICES AGREEMENT NOWLEN HOLT & MINER, P.A. ENGAGEMENT LETTER 1 N H __ ~~~ } 1 September 20, 2006 NOWLEN, HOLT & MINER, P.A. CERTIFIED PUBLIC ACCOUNTANTS WEST PALM BEACH OFFICE 215 FIFTH STREET, SUITE 200 POST OFFICE BOX 347 WEST PALM BEACH, FLORIDA 33402-0347 TELEPHONE (561) 659-3060 FAX (561) 835-0628 Village of North Palm Beach C/O Trey Sizemore, Finance Director 501 U.S. Highway 1 North Palm Beach, FL 33408 Dear Ladies and Gentlemen: EVERETT B. NOWLEN hs3o~ieeal, CPA EDWARD T HOLT. CP4 WILLIAM B. MINER. CPA ROBERT W. HENDRIX, JR., CPA JANET R. BARICEVICH, CPA MARK B. ELHILOW, PFS, CPA KATHLEEN A. MINER, CPA R. GREGORY SMITH, CPA ROBERT W. HELMREICH, GPA TERRY L. MORTON, JR., CPA N. RONALD BENNETT, CPA J. MICHAEL STEVENS, CPA DANIEL A. KIRCHMAN, CPA MARILVN B. RASH. CPA ALEXIA G. VARGA, CPA JAMES W JOHNSON, CPA BRIAN J. BRESCIA, PFS, CPA DONALD D. RINZEL, CPA BELLE GLADE OFFICE 333 S. E. 2nd STREET POST OFFICE BOX 338 BELLE GLADE, FLORIDA 33430-0338 TELEPHONE (561)996-5612 FAX (561) 998-6248 We are pleased to confirm our understanding of the services we are to provide the Village of North Palm Beach for the years ending September 30, 2006, with option to renew for 2007, 2008, 2009, and 2010. We will audit the financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information, which collectively comprise the basic financial statements of the Village of North Palm Beach, Florida as of and for the year ended September 30, 2006. The document we submit to you will include the following supplementary information required by generally accepted accounting principles that will be subjected to certain limited procedures, but will not be audited: 1. Management's Discussion and Analysis 2. Budgetary Comparison Schedule -General Fund 3. Schedule of Funding Progress -General Employees Retirement Fund 4. Schedule of Employer and State Contributions Also, the following additional information accompanying the basic financial statements will be subjected to the auditing procedures applied in our audit of the financial statements upon which we will provide an opinion in relation to the basic financial statements: 1. Combining and Individual Fund Financial Statements and Schedules 2. Schedule of Expenditures of Federal Awards and State Financial Assistance 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 the fairness of the additional information referred to in the first paragraph when considered in relation to the financial statements taken as a whole. AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL Village of North Palm Beach September 20, 2006 Page 2 of 8 The objective also includes reporting on: • Internal control related to the financial statements and compliance with laws, regulations, and the provisions of contracts or grant agreements, noncompliance with which could have a material effect on the financial statements in accordance with Government Auditing Standards. • Internal control related to major programs and an opinion (or disclaimer of opinion) on compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a direct and material effect on each major program in accordance with the Single Audit Act Amendments of 1996 and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. The reports on internal control and compliance will each include a statement that the report is intended for the information and use of the audit committee, management, specific legislative or regulatory bodies, federal awarding agencies, and if applicable, pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Our audit will be conducted in accordance with U.S. generally accepted auditing standards; the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the Single Audit Act Amendments of 1996; the provisions of OMB Circular A-133; and the provisions of Chapter 10.550, Rules of the Florida Auditor General, and will include tests of accounting records, a determination of major program(s) in accordance with Circular A- 133, and other procedures we consider necessary to enable us to express such an opinion and to render the required reports. If our opinion on the financial statements or the Single Audit compliance opinion 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 unable 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. Management Responsibilities Management is responsible for establishing and maintaining effective internal control and for compliance with the provisions of applicable laws, regulations, contracts, agreements, and grants. 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 financial statements in accordance with generally accepted accounting principles, and that federal award programs are managed in compliance with applicable laws and regulations and the provisions of contracts and grant agreements. Village of North Palm Beach September 20, 2006 Page 3 of 8 Management is responsible for making all financial records and related information available to us, including any significant vendor relationships in which the vendor has the responsibility for program compliance. We understand that you will provide us with such information required for our audit and that you are responsible for the accuracy and completeness of that information. Management is responsible for adjusting the financial statements to correct material misstatements and for confirming to us in the representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. You are responsible for establishing and maintaining internal controls, including monitoring ongoing activities; for the selection and application of accounting principles; and for the fair presentation in the financial statements of the respective financial position of the Village of North Palm Beach and the changes in financial position and cash flows in conformity with U.S. generally accepted accounting principles. You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud or illegal acts affecting the government involving (a) management, (b) employees who have significant roles in internal control, and (c) others where the fraud or illegal acts 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 or illegal acts affecting the government received in communications from employees, former employees, grantors, regulators, or others. In addition, you are responsible for identifying and ensuring that the entity complies with applicable laws and regulations and for taking timely and appropriate steps to remedy any fraud, illegal acts, violations of contracts or grant agreements, or abuse that we may report. Additionally, as required by OMB Circular A-133, it is management's responsibility to follow up and take corrective action on reported audit findings and to prepare a summary schedule of prior audit findings and a corrective action plan. As part of the audit, we may propose standard, adjusting, or correcting journal entries to your financial statements. You are responsible for reviewing the entries and understanding the nature of any proposed entries and the impact they have on the financial statements. In accordance with Government Auditing Standards, you will be required to review and approve the financial statements prior to their issuance and have a responsibility to be in a position in fact and appearance to make an informed judgment on the financial statements. Further, you are required to designate a qualified management- level individual to be responsible and accountable for overseeing our services. Audit Procedures-General An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about Village of North Palm Beach September 20, 2006 Page 4 of 8 the number of transactions to be examined and the areas to be tested. We will plan and perform the audit to obtain reasonable rather than absolute assurance about whether the 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 entity or to acts by management or employees acting on behalf of the entity. Because the determination of abuse is subjective, Government Auditing Standards do not expect the auditor to provide reasonable assurance of detecting abuse. As required by the Single Audit Act Amendments of 1996 and OMB Circular A-133, our audit will include test of transactions related to major federal award programs for compliance with applicable laws and regulations and the provisions of contracts and grant agreements. Because an audit is designed to provide reasonable, but not absolute assurance and because we will not perform a detailed examination of all transactions, there is a risk that material misstatements or noncompliance may exist and not be detected by us. In addition, an audit is not designed to detect immaterial misstatements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements or major programs. However, we will inform you of any material errors and 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 We will include such matters in the reports required for a Single Audit. Our responsibility as your auditor 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 engaged as your auditor. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, creditors, and financial institutions. We will request written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will also require certain written representations from you about the financial statements and related matters. Audit Procedures-Internal Controls 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 and on its compliance with requirements applicable to major programs. 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 Village of North Palm Beach September 20, 2006 Page 5 of 8 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 relative to the financial statements 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 in our report on internal control issued pursuant to Government Auditing Standards. As required by OMB Circular A-133, we will perform tests of controls to evaluate the effectiveness of the design and operation of controls that we consider relevant to preventing or detecting material noncompliance with compliance requirements applicable to each major federal award program. However, our tests will be less in scope than would be necessary to render an opinion on those controls and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to OMB Circular A-133. An audit is not designed to provide assurance on internal control or to identify reportable conditions. However, 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 the internal control that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. We will also inform you of any non-reportable conditions or other matters involving internal control, if any, as required by Government Auditing Standards and OMB Circular A-133. Audit Procedures-Compliance Our audit will be conducted in accordance with the standards referred to in the section titled Audit Objectives. 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, including grant agreements. However, the objective of those procedures will not be to provide an opinion on overall compliance, and we will not express such an opinion in our report on compliance issued pursuant to Government Auditing Standards. OMB Circular A-133 requires that we also plan and perform the audit to obtain reasonable assurance about whether the auditee has complied with applicable laws and regulations and the provisions of contracts and grant agreements applicable to major programs. Our procedures will consist of the applicable procedures described in the OMB Circular A-133 Compliance Supplement for the types of compliance requirements that could have a direct and material effect on each of the major programs of the Village of North Palm Beach. The purpose of those procedures will be to express an opinion on the Village of North Palm Beach's compliance with requirements applicable to major programs in our report on compliance issued pursuant to OMB Circular A-133. Village of North Palm Beach September 20, 2006 Page 6 of 8 Audit Administration, Fees, and Other We understand that your employees will provide assistance as detailed in the request for proposal. At the conclusion of the engagement, we will complete the appropriate sections of and sign the Data Collection Form that summarizes our audit findings. We will provide copies of our reports to the District. However, it is management's responsibility to submit the reporting package (including financial statements, schedule of expenditures of federal awards, summary schedule of prior audit findings, auditors' reports, and a corrective action plan) along with the Data Collection Form to the designated federal clearinghouse and, if appropriate, to pass-through entities. The Data Collection Form and the reporting package must be submitted within the earlier of 30 days after receipt of the auditors' reports or nine months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audits. At the conclusion of the engagement, we will provide information to management as to where the reporting packages should be submitted and the number to submit. The audit documentation for this engagement is the property of Nowlen, Holt & Miner, P.A. and constitute confidential information. However, we may be requested to make certain documentation available to a Grantor Agency pursuant to authority given to it by law or regulation. We will notify you of any such request. If requested, access to such documentation will be provided under the supervision of Nowlen, Holt & Miner, P.A. personnel. Furthermore, upon request, we may provide photocopies of selected documentation to the Grantor Agency. The Grantor Agency may intend, or decide, to distribute the photocopies or information contained therein to others, including other governmental agencies. The documentation for this engagement will be retained for a minimum of five years after the date the auditors' report is issued or for any additional period requested by the Grantor Agency. If we are aware that a federal awarding agency, pass-through entity, or auditee is contesting an audit finding, we will contact the party contesting the audit finding for guidance prior to destroying the documentation. Government Auditing Standards require that we provide you with a copy of our most recent quality control review report. Our 2003 peer review report accompanies this letter. Our fees for the aforementioned audit services inclusive of all expenses will be in accordance with the attached schedule. Our invoices for these fees will be rendered each month as work progresses and are payable on presentation. In accordance with our firm policies, work may be suspended if your account becomes overdue and may not be resumed until your account is paid in full. If we elect to terminate our services for nonpayment, our engagement will be deemed to have been completed upon written notification of termination, even if we have not completed our report. You will be obligated to compensate us for all time expended and to reimburse us for all out-of- pocket costs through the date of termination. The attached fees are based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will Village of North Palm Beach September 20, 2006 Page 7 of 8 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. You may request that we perform additional services not contemplated by this engagement letter. If this occurs, we will communicate with you regarding the scope of the additional services and the fees for additional services will be in accordance with the attached schedule. We also may issue a separate engagement letter covering the additional services. In the absence of any other written communication from us documenting such additional services, our services will continue to be governed by the terms of this engagement 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. Sincerely, Nowlen, Holt & Miner, P.A. Village of North Palm Beach September 20, 2006 Page 8 of 8 RESPONSE: This letter accurately sets forth the understanding of the Village of North Palm Beach. By: Title: _ /~.4~/O~ Date: ~CC1 ~,F.y16~~Z ~~ 006 ~- A 'e ding nets^~rk :,° +ndep2ndFn? CPA firms September 30, '_003 T~> the shareholder- \~u~~le,~, Holt ~~ ti1iner. P. ~~. ~~'e have reviewed the s}stem of quality control for the acc<~untin~7 ~~nd ~zuditin~~ prac:tict ~~f \o~~~len, Holt & diner, P.A. (the firm) in effect for the year ended'Mav 31, ?003. A system of duality control encompasses the firm's organizational structure and the policies adopted and procedures established to provide it with reasonahle assurance of conforming, ~~~ith professional standards. The elements of duality control are described in the Statements on Quality Control Standards issued by the r~ITlel'1Can Institute of Certified Public :accountants t~[CP;\). The. desi~~n c~i~ the system and compliance with it are the responsibility of the firm. Our resprrnsihilit_y is to express an opinion on the dcsi<an of the system, and the firm's compliance ~~~ith the system based on our review. Our rcvietiv was conducted in accordar~cc ~~~ith standards established by the Peer RevieU~ Board of the .~[CP~. In performing our review, we obtained an understanding, oi~ the system of~ quality control for the firm's accountin« and auditing practice. In addition, we tested compliance with the firm., duality control policies and procedures to the extent we considered appropriate. "Chew tests covered the application of the firms policies and procedures on selected engagements. Because our review was based <~n selective tests, it would not necessarily disclose all weaknesses in the system of quality control or all instances of lack of compliance with it. Because there are. inherent limitations in the effectiveness of any system of duality 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 yualit_y control may become inadequate because of changes in conditions, or because the dogree of compliance with the policies or pros-educes may deter-iotate. fn our opinion, the system of duality control for the accounting= and auditin~a practice of ~~~~~~Ien, Holt ~~ Miner. P.A. in etl~ect for the vent ended May 31. ?003, has been desi~~ned to meet the reduirements of the quality control standards fir an accounting and auditin~~ practice established by the AICP~ and was complied with durin« the year then ended try pro~~ide the firm with reasonable assurance of conforming with professional standards. ~~?,~~~i~¢(~ ltlil~n.~r `lichael E. Nilson ~heam Captain ~t1' 1'.~var~!~ } )k ,~}._ ' i2if* t t ti- tt>t): t a~: ,i5t~' ~ j .tit=t HOS~VaVI \f.3,ht~.~ 1 i : ~i, l - ! °r;ai! t #r,{incrr.ar ~ ~~~.tnx~, ~;.i ~tr~ .etiti...: ,,en - r ..~~~r~~ er .,.,,~,_<. ATTACHMENT A SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE SEPTEMBER 30, 2006-2010 FINANCIAL STATEMENTS: SUPPORTING SCHEDULE FOR PROFESSIONAL AUDIT SERVICES VILLAGE OF NORTH PALM BEACH The following are hourly rates for any additional accounting services the Village may request: Standard Team Member Hourly Rate Discounted Hourly Rate for the Village** Partner $ 325 $ 220 Manager $ 240 $ 160 Supervisor $ 210 $ 150 Senior $ 180 $ 110 Staff $ 110 $ 90 Support $ 92 $ 60 ** Rates subject to an annual 3% increase Total Price for Audit Services September 30, 2006 $ 25,500 Optional Years September 30, 2007 26,300 September 30, 2008 27,100 September 30, 2009 28,000 September 30, 2010 28,800 Total $ 135,700 NOTES: 1. Price Proposal assumes that no significant audit adjustments will be necessary. 2. The hourly rates presented above will be applicable to any additional professional services the Village may require during the above contract years. 3. This price does not include a Single Audit fee. If required, each major program for years 2006 through 2010 of this contract will be $4,500.