HomeMy WebLinkAboutJames Moore FY15-19 Engagement LetterJamc-%s Moore
Certified Public Accountants and Consultants
March 27, 2015
To the Honorable Mayor and City Council Members,
City of Cape Canaveral, Florida:
We are pleased to confirm our understanding of the services we are to provide City of Cape Canaveral,
Florida (the City) for the years ending September 30, 2015, 2016, 2017, 2018, and 2019. 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
City of Cape Canaveral, Florida as of and for the years ending September 30, 2015, 2016, 2017, 2018,
and 2019.
Accounting standards generally accepted in the United States of America provide for certain required
supplementary information (RSI), such as management's discussion and analysis (MD&A), to
supplement the City's basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. As part of our engagement, we will apply certain limited
procedures to the City's RSI in accordance with auditing standards generally accepted in the United
States of America. These limited procedures will consist of inquiries of management regarding the
methods of preparing the information and comparing the information for consistency with management's
responses to our inquiries, the basic financial statements, and other knowledge we obtained during our
audit of the basic financial statements. We will not express an opinion or provide any assurance on the
information because the limited procedures do not provide us with sufficient evidence to express an
opinion or provide any assurance. The following RSI is required by generally accepted accounting
principles and will be subjected to certain limited procedures, but will not be audited:
1) Management's Discussion and Analysis
2) Schedule of Funding Progress
We have also been engaged to report on supplementary information other than RSI that accompanies the
City's financial statements. We will subject the following supplementary information to the auditing
procedures applied in our audit of the financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used
to prepare the financial statements or to the financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America and
will provide an opinion on it in relation to the financial statements as a whole:
1) Combining and Individual Fund Statements and Schedules
121 Executive Circle 5931 NW 1st Place 2477 Tim Gamble Place, Suite 200
Daytona Beach, FL 32114-1180 Gainesville, FL 32607-2063 Tallahassee, FL 32308-4386
Telephone: 386/257-4100 Telephone: 352/378-1331 Telephone: 850/386-6184
Fax: 386/255-3261 Fax: 352/372-3741 Fax: 850/422-2074
dab@jmco.com gnv@jmco.com tlh@jmeo.com
blember of AGN International with offl'ces in principal cities worldwide
City of Cape Canaveral, Florida
March 27, 2015
Page 2
The following other information accompanying the financial statements will not be subjected to the
auditing procedures applied in our audit of the financial statements, and our auditor's report will not
provide an opinion or any assurance on that other information.
1) The Introductory Section
2) The Statistical Section
Audit Objectives
The objective of our audit is the expression of opinions as to whether your basic financial statements are
fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles
and to report on the fairness of the supplementary information referred to in the second paragraph when
considered in relation to the financial statements as a whole. The objective also includes reporting on
internal control related to the financial statements and compliance with the provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a material effect on the financial
statements in accordance with Government Auditing Standards.
The report on internal control and compliance will include a statement that the report is intended solely
for the information and use of management, the body or individuals charged with governance, and
specific legislative or regulatory bodies, 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 auditing standards generally accepted in the United States
of America; the standards for financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General; and will
include tests of accounting records and other procedures we consider necessary to enable us to express
such opinions and to render the required reports. If our opinions on the financial statements are other than
unmodified, we will discuss the reasons with you in advance. If, for any reason which is beyond our
control, we are unable to complete the audit or are unable to form or have not formed opinions, we may
decline to express opinions or to issue a report as a result of this engagement.
Management Responsibilities
Management is responsible for the basic financial statements and all accompanying information as well as
all representations contained therein. As part of the audit, we will assist with preparation of your financial
statements and related notes. You are responsible for making all management decisions and performing
all management functions relating to the financial statements and related notes and for accepting full
responsibility for such decisions. You will be required to acknowledge in the written representation letter
our assistance with preparation of the financial statements and that you have reviewed and approved the
financial statements and related notes prior to their issuance and have accepted responsibility for them.
Further, you are required to designate an individual with suitable skill, knowledge, or experience to
oversee any nonaudit services we provide and for evaluating the adequacy and results of those services
and accepting responsibility for them.
City of Cape Canaveral, Florida
March 27, 2015
Page 3
Management is responsible for establishing and maintaining effective internal controls, including
evaluating and monitoring ongoing activities, to help ensure that appropriate goals and objectives are met.
You are also responsible for the selection and application of accounting principles; for the fair
presentation in the financial statements of the respective financial position of the governmental activities,
the business -type activities, each major fund, and the aggregate remaining fund information of the City
and the respective changes in financial position and, where applicable, cash flows in conformity with U.S.
generally accepted accounting principles; and for compliance with applicable laws and regulations and
the provisions of contracts and grant agreements.
Management is also responsible for making all financial records and related information available to us
and for ensuring that management is reliable and financial information is reliable and properly recorded.
You are also responsible for providing us with (1) access to all information of which you are aware that is
relevant to the preparation and fair presentation of the financial statements, (2) additional information that
we may request for the purpose of the audit, and (3) unrestricted access to persons within the government
from whom we determine it necessary to obtain audit evidence.
Management's responsibilities include adjusting the financial statements to correct material misstatements
and confirming to us in the written 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 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 (1) management, (2) employees who have significant roles in internal control, and (3) others
where the fraud or illegal acts could have a material effect on the financial statements. Your
responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud
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, regulations, contracts, agreements, and grants.
Although we will assist, you are responsible for the preparation of the other supplementary information,
which we have been engaged to report on, in conformity with U.S. generally accepted accounting
principles. You agree to include our report on the supplementary information in any document that
contains and indicates that we have reported on the supplementary information. You also agree to include
the audited financial statements with any presentation of the supplementary information that includes our
report thereon OR make the audited financial statements readily available to users of the supplementary
information no later than the date the supplementary information is issued with our report thereon. Your
responsibilities include acknowledging to us in the written representation letter that (1) you are
responsible for presentation of the supplementary information in accordance with GAAP; (2) that you
believe the supplementary information, including its form and content, is fairly presented in accordance
with GAAP; (3) that the methods of measurement or presentation have not changed from those used in
the prior period (or, if they have changed, the reasons for such changes); and (4) you have disclosed to us
any significant assumptions or interpretations underlying the measurement or presentation of the
supplementary information.
City of Cape Canaveral, Florida
March 27, 2015
Page 4
Management is responsible for establishing and maintaining a process for tracking the status of audit
findings and recommendations. Management is also responsible for identifying for us previous financial
audits, attestation engagements, performance audits, or other studies related to the objectives discussed in
the Audit Objectives section of this letter. This responsibility includes relaying to us corrective actions
taken to address significant findings and recommendations resulting from those audits, attestation
engagements, performance audits, or studies. You are also responsible for providing management's views
on our current findings, conclusions, and recommendations, as well as your planned corrective actions,
for the report, and for the timing and format for providing that information.
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 the number of transactions to be
examined and the areas to be tested. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of significant accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements. 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 (1) errors, (2) fraudulent financial reporting, (3) misappropriation of
assets, or (4) 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 auditors to provide reasonable assurance of detecting
abuse.
Because of the inherent limitations of an audit, combined with the inherent limitations of internal control,
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, even though the audit is properly
planned and performed in accordance with U.S. generally accepted auditing standards and Government
Auditing Standards. 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 the appropriate level of management and the
City Council of any material errors or any fraudulent financial reporting or misappropriation of assets that
come to our attention. We will also inform the appropriate level of management of any violations of laws
or governmental regulations that come to our attention, unless clearly inconsequential, and of any material
abuse that comes to our attention. Our responsibility as auditors is limited to the period covered by our
audit and does not extend to any later periods for which we are not engaged as auditors.
Our procedures will include tests of documentary evidence supporting the transactions recorded in the
accounts, and may include tests of the physical existence of inventories, and direct confirmation of
receivables and certain other assets and liabilities by correspondence with selected individuals, funding
sources, 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 require certain written representations from you about the financial statements and related
matters.
City of Cape Canaveral, Florida
March 27, 2015
Page 5
Audit Procedures—Internal Controls
Our audit will include obtaining an understanding of the entity and its environment, including internal
control, sufficient to assess the risks of material misstatement of the financial statements and to design the
nature, timing, and extent of further audit procedures. Tests of controls may be performed to test the
effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud
that are material to the 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. Our tests, if performed, will be less in scope than would be necessary to render an opinion on
internal control and, accordingly, no opinion will be expressed in our report on internal control issued
pursuant to Government Auditing Standards.
An audit is not designed to provide assurance on internal control or to identify significant deficiencies or
material weaknesses. However, during the audit, we will communicate to management and the City
Council and those charged with governance internal control related matters that are required to be
communicated under AICPA professional standards and Government Auditing Standards.
Audit Procedures—Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we will perform tests of City's compliance with provisions of applicable laws, regulations,
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.
Examination Procedures—Compliance with Section 218.415, Florida Statutes
You have also requested that we examine compliance with Section 218.415, Florida Statutes, Local
Government Investment Policies, of the City for the years ended September 30, 2015, 2016, 2017, 2018,
and 2019. We are pleased to confirm our acceptance and our understanding of this examination
engagement by means of this letter. Our examination will be conducted with the objective of expressing
an opinion as to whether the City complied in all material respects with Section 218.415, Florida Statutes,
Local Government Investment Policies.
Examination Procedures—Practitioner Responsibilities
We will conduct our examination in accordance with the attestation standards related to examinations of
the American Institute of Certified Public Accountants. An examination -level attestation engagement
involves performing procedures to obtain attest evidence about whether compliance with Section 218.415,
Florida Statutes, Local Government Investment Policies is fairly presented, in all material respects, in
conformity with Section 218.415, Florida Statutes, Local Government Investment Policies. The
procedures selected depend on the practitioner's judgment, including the assessment of the risks of
material misstatement or misrepresentation of the subject matter, whether due to fraud or error.
Because of the inherent limitations of an examination, together with the inherent limitations of internal
control, an unavoidable risk that some material misstatements or misrepresentations may not be detected
exists, even though the examination is properly planned and performed in accordance with the attestation
standards related to examinations of the American Institute of Certified Public Accountants. However, we
will inform you of any material errors or fraud that comes to our attention, unless clearly inconsequential.
City of Cape Canaveral, Florida
March 27, 2015
Page 6
Examination Procedures—Management Responsibilities
Our examination will be conducted on the basis that management and, when appropriate, those charged
with governance acknowledge and understand that they have responsibility:
a. For the preparation and fair presentation of the Section 218.415, Florida Statutes, Local
Government Investment Policies in accordance with Section 218.415, Florida Statutes, Local
Government Investment Policies;
b. For the design, implementation, and maintenance of internal control relevant to Section 218.415,
Florida Statutes, Local Government Investment Policies, which is the best means of preventing or
detecting errors or fraud;
c. For selecting and determining the suitability and appropriateness of the criteria upon which the
Section 218.415, Florida Statutes, Local Government Investment Policies will be evaluated; and
d. To provide us with:
Access to all information of which management is aware that is relevant to the Section
218.415, Florida Statutes, Local Government Investment Policies such as records,
documentation, and other matters and that you are responsible for the accuracy and
completeness of that information;
ii. Additional information that we may request from management for the purpose of the
examination; and
iii. Unrestricted access to persons within the entity from whom we determine it necessary to
obtain attest evidence.
As part of our examination process, we will request from management regarding Section 218.415, Florida
Statutes, Local Government Investment Policies, written confirmation concerning representations made to
us in connection with the examination.
Examination Procedures—Reporting
We will issue a written report upon completion of our examination of Section 218.415, Florida Statutes,
Local Government Investment Policies. Our report will be addressed to the City. We cannot provide
assurance that an unmodified opinion will be expressed. Circumstances may arise in which it is necessary
for us to modify our opinion, add an emphasis -of -matter or other -matter paragraph(s), or withdraw from
the engagement.
Engagement Administration, Fees, and Other
We understand that your employees will prepare all cash, accounts receivable, or other confirmations we
request and will locate any documents selected by us for testing. We also understand that your employees
will assist with preparation of schedules and workpapers required for the completion of the
comprehensive annual financial report.
City of Cape Canaveral, Florida
March 27, 2015
Page 7
We will provide copies of our reports to the City; however, management is responsible for distribution of
the reports and the financial statements. Unless restricted by law or regulation, or containing privileged
and confidential information, copies of our reports are to be made available for public inspection.
The audit documentation for this engagement is the property of James Moore & Co., P.L. (JMCo) and
constitutes confidential information. However, we recognize that should any portion of the audit
documentation be shared with and also used by the City, such portion of the audit documentation may be
deemed to be public record under the Florid Public Records Law. Notwithstanding the confidential nature
of the audit documentation, pursuant to authority given by law or regulation, we may be requested to
make certain audit documentation available to a federal agency providing direct or indirect funding, or the
U.S. Government Accountability Office for purposes of a quality review of the audit, to resolve audit
findings, or to carry out oversight responsibilities. We will notify you of any such request. If requested,
access to such audit documentation will be provided under the supervision of JMCo personnel.
Furthermore, upon request, we may provide copies of selected audit documentation to the aforementioned
parties. These parties may intend, or decide, to distribute the copies or information contained therein to
others, including other governmental agencies.
It is the policy of James Moore & Co. P.L. (the Firm), to keep records related to this engagement for
seven years after the completion of our services (the "retention period"), as specified by the Firm's
Record Retention and Destruction Policy. However, the Firm does not keep any original client provided
records. Client provided records will be returned to you at the completion of the engagement. Records
prepared by us specifically for you as part of this engagement (for example, financial statements and other
financial reports, general ledgers, depreciation schedules, etc.) and other supporting records prepared by
us (for example, adjusting entries and related support, data combining schedules, calculations supporting
amounts in financial statements, etc.) will remain part of the engagement records. When any records are
returned or provided to you, it is your responsibility to retain and protect them for possible future use,
including potential examination by any government or regulatory agencies. At the expiration of the
retention period, the related engagement records will be destroyed. However, the related engagement
records will not be destroyed regardless of the retention period, if the Firm has knowledge of potential or
pending litigation and/or investigation by a regulatory agency, and it has been determined by the Firm
that the records in question are relevant to said litigation and/or investigation. If it is determined that the
records in question are relevant to the litigation and/or investigation, the Firm will impose a litigation
hold on the records thereby suspending the scheduled destruction of the records. As potential or pending
litigation or investigation may not be public knowledge, we request that you inform us of any such
litigation or investigation in a timely manner. Likewise, as it may not be public knowledge when the
litigation or an investigation has been concluded, we request that you inform us when all litigation or
investigation has been concluded so that the litigation hold may be lifted and the records related to our
engagement destroyed in accordance with our Record Retention and Destruction Policy. Your signature
below authorizes us, that upon the expiration of the seven year period, the Firm is free to destroy all
records related to this engagement.
Bernadette Britz -Parker is the engagement partner and is responsible for supervising the engagement and
signing the reports or authorizing another individual to sign them.
City of Cape Canaveral, Florida
March 27, 2015
Page 8
Our fee for these services will be $45,020 for the year ending September 30, 2015. Our fees for the
subsequent years ended September 30, 2016 through 2019 will be adjusted each year hereafter according
to the Consumer Price Index (CPI). CPI shall mean the Consumer Price Index — All Urban Consumers,
Series ID: CUURXOOOSAO, not seasonally adjusted, size class B/C (between 50,000 and 1,5000,000), all
items, base period December 1996 = 100, as published by the United States Department of Labor,
Department of Labor Statistics. In the event a federal or state single audit is required, the fee shall be
increased by an additional $3,000 per major program required to be tested. 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 30 days or more 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(s). 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 above fee is based on
anticipated cooperation from your personnel and the assumption that unexpected 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. This contract may be extended, upon the
mutual consent of both parties, for an additional 5 -year period.
This engagement letter covers the audits for the years ending September 30, 2015, 2016, 2017, 2018, and
2019. This contract is cancellable by either party with 30 days' written notice of their intention to
terminate the engagement.
Government Auditing Standards require that we provide you with a copy of our most recent external peer
review report and any letter of comment, and any subsequent peer review reports and letters of comment
received during the period of the contract. Our 2012 peer review report accompanies this letter.
We appreciate the opportunity to be of service to the City of Cape Canaveral, Florida 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.
Very truly yours,
JAMES MOORE & CO., P.L.
RESPONSE:
This letter correctly sets forth the understanding of the City of Cape Canaveral, Florida.
By:
Title: mMCA 1VO, a k,
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