Loading...
HomeMy WebLinkAboutJames Moore Agreement Oct 2019 ApprovedJames Moore Certified Public Accountants and Consultants August 28, 2019 To the Honorable Mayor and City Council Members, City of Cape Canaveral, Florida: You have requested that we audit the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of City of Cape Canaveral, Florida (the City), as of September 30, 2020, 2021, 2022, 2023, and 2024, and for the years then ended, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. In addition, if applicable, we will audit the City's compliance over major federal award programs and major state projects for the years ended September 30, 2020, 2021, 2022, 2023, and 2024. We are pleased to confirm our acceptance and our understanding of this audit engagement by means of this letter. Our audits will be conducted with the objectives of our expressing an opinion on each opinion unit and an opinion on compliance regarding the City's major federal award programs and major state projects. Accounting principles generally accepted in the United States of America, (U.S. GAAP,) as promulgated by the Governmental Accounting Standards Board (GASB) require that supplementary information, such as management's discussion and analysis (MD&A) or budgetary comparison information, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the GASB, 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 required supplementary information (RSI) in accordance with auditing standards generally accepted in the United States of America (U.S. GAAS). These limited procedures will consist primarily of inquiries of management regarding their methods of measurement and presentation, and comparing the information for consistency with management's responses to our inquiries. We will not express an opinion or provide any form of assurance on the RSI. The following RSI is required by U.S. GAAP. This RSI will be subjected to certain limited procedures but will not be audited: 1. Management's discussion and analysis 2. Budgetary comparison schedules (if presented as RSI) Supplementary information other than RSI will accompany the City's basic financial statements. We will subject the following supplementary information to the auditing procedures applied in our audit of the basic financial statements and perform certain additional procedures, including comparing and reconciling the supplementary information to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and additional procedures in accordance with U.S. GARS. We intend to provide an opinion on whether the following supplementary information is presented fairly in all material respects in relation to the basic financial statements as a whole: I . Schedule of expenditures of federal awards and state financial assistance (if applicable) 2. Combining and nonmajor fund schedules 121 Executive Circle 133 East Indiana Avenue 5931 NW 1st Place 2477 Tim Gamble Place, Suite 200 Daytona Beach, FL 32114-1180 DeLand, FL 32724-4329 Gainesville, FL 32607-2063 Tallahassee, FL 3230&4386 Telephone: 386-257-4100 Telephone: 386-738-330D Telephone: 352-378-1331 Telephone. 850-386-6184 Website: www.jmco.com I Email: info@jmco.com I Member of AGN Intemational with offices in principal cities worldwide City of Cape Canaveral, Florida August 28, 2019 Page 2 Also, the document we submit to you will include the following other additional information that will not be subjected to the auditing procedures applied in our audit of the basic financial statements: 1. Introductory section 2. Statistical section Data Collection Form Prior to the completion of our engagement, if applicable, we will complete the sections of the Data Collection Form that are our responsibility. The form will summarize our audit findings, amounts and conclusions. It is management's responsibility to submit a reporting package including financial statements, schedule of expenditure of federal awards, summary schedule of prior audit findings and corrective action plan along with the Data Collection Form to the federal audit clearinghouse. The financial reporting package must be text searchable, unencrypted, and unlocked. Otherwise, the reporting package will not be accepted by the federal audit clearinghouse. We will assist you in the electronic submission and certification. You may request from us copies of our report for you to include with the reporting package submitted to pass-through entities. The Data Collection Form is required to be submitted within the earlier of 30 days after receipt of our auditors' reports or nine months after the end of the audit period, unless specifically waived by a federal cognizant or oversight agency for audits. Data Collection Forms submitted untimely are one of the factors in assessing programs at a higher risk. Audit of the Financial Statements We will conduct our audit in accordance with U.S. GAAS and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States of America; the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, Audit Requirements for Federal Awards (Uniform Guidance), Section 215.97, Florida Statutes, Florida Single Audit Act, and the provisions of Chapter 10.5501 Rules of the State of Florida, Office of the Auditor General. Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error, misappropriation of assets, or violations of laws, governmental regulations, grant agreements, or contractual agreements. 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. If appropriate, our procedures will therefore include tests of documentary evidence that support the transactions recorded in the accounts, tests of the physical existence of inventories, and direct confirmation of cash, investments, and certain other assets and liabilities by correspondence with creditors and financial institutions. As part of our audit process, we will request written representations from your attorneys, and they may bill you for responding. At the conclusion of our audit, we will also request certain written representations from you about the financial statements and related matters. Because of the inherent limitations of an audit, together with the inherent limitations of internal control, an unavoidable risk that some material misstatements or noncompliance (whether caused by errors, fraudulent City of Cape Canaveral, Florida August 28, 2019 Page 3 financial reporting, misappropriation of assets, or violations of laws or governmental regulations) may not be detected exists, even though the audit is properly planned and performed in accordance with U.S. GAAS; Government Auditing Standards of the Comptroller General of the United States of America; Section 215.97, Florida Statutes, Florida Single Audit Act; the provisions of Chapter 10.550, Rules of the State of Florida, Office of the Auditor General and will include tests of accounting records, a determination of major state project(s) in accordance with Chapter 10.550, Rules of the State of Florida, Office of the Auditor General and other procedures we consider necessary to enable us to express such opinions and to render the required reports. Please note that the determination of abuse is subjective and Government Auditing Standards does not require auditors to detect abuse. In making our risk assessments, we consider internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. However, we will communicate to you in writing concerning any significant deficiencies or material weaknesses in internal control relevant to the audit of the financial statements that we have identified during the audit. Our responsibility as auditors is, of course, limited to the period covered by our audit and does not extend to any other periods. We cannot provide assurance that unmodified opinions will be expressed. Circumstances may arise in which it is necessary for us to modify our opinions or add emphasis -of -matter or other -matter paragraphs. If our opinions on the basic financial statements are other than unmodified, we will discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to form or have not formed opinions, we may decline to express opinions or to issue a report as a result of this engagement. We will issue a written report upon completion of our audit of the City's basic financial statements. Our report will be addressed to the governing body of the City. We cannot provide assurance that unmodified opinions will be expressed. Circumstances may arise in which it is necessary for us to modify our opinions, add an emphasis -of -matter or other -matter paragraph(s), or withdraw from the engagement. In accordance with the requirements of Government Auditing Standards, we will also issue a written report describing the scope of our testing over internal control over financial reporting and over compliance with laws, regulations, and provisions of grants and contracts, including the results of that testing. However, providing an opinion on internal control and compliance over financial reporting will not be an objective of the audit and, therefore, no such opinion will be expressed. We also will issue a written report as required by Chapter 10.550, Rules of the State of Florida, Office of the Auditor General upon completion of our audit. Audit of Major Program/Project Compliance If applicable, our audit of the City's major federal award program(s) and state project(s) compliance will be conducted in accordance with the requirements of the Single Audit Act, as amended; the Uniform Guidance; and Chapter 10.550, Rules of the State of Florida, Office of the Auditor General; and will include tests of accounting records, a determination of major programs/projects in accordance with the Uniform Guidance, Chapter 10.550, Rules of the State of Florida, Office of the Auditor General, and other procedures we consider necessary to enable us to express such an opinion on major federal award program and major state project compliance and to render the required reports. We cannot provide assurance that an unmodified opinion on compliance will be expressed. Circumstances may arise in which it is necessary for us to modify our opinion or withdraw from the engagement. City of Cape Canaveral, Florida August 28, 2019 Page 4 The Uniform Guidance requires that we also plan and perform the audit to obtain reasonable assurance about whether the entity has complied with applicable laws and regulations and the provisions of contracts and grant agreements applicable to major federal award programs. Our procedures will consist of determining major federal programs and performing the applicable procedures described in the U.S. Office of Management and Budget OMB Compliance Supplement for the types of compliance requirements that could have a direct and material effect on each of the entity's major programs. The purpose of those procedures will be to express an opinion on the entity's compliance with requirements applicable to each of its major programs in our report on compliance issued pursuant to the Uniform Guidance. Also, as required by the Uniform Guidance, 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 of the entity's major federal award programs. However, our tests will be less in scope than would be necessary to render an opinion on these controls and, accordingly, no opinion will be expressed in our report. Chapter 10.550, Rules of the State of Florida, Office of the Auditor General 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 state projects. Our procedures will consist of tests of transactions and other applicable procedures described in the State of Florida State Projects Compliance Supplement for the types of compliance requirements that could have a direct and material effect on each of the Organization's major state projects. The purpose of these procedures will be to express an opinion on the City's compliance with requirements applicable to each of its major state projects in our report on compliance issued pursuant to Chapter 10.550, Rules of the State of Florida, Office of the Auditor General. Also, as required by Chapter 10.550, Rules of the State of Florida, Office of the Auditor General, we will perform tests of controls over compliance 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 state project. 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 Chapter 10.550, Rules of the State of Florida, Office of the Auditor General. We will issue a report on compliance that will include an opinion or disclaimer of opinion regarding the entity's major federal award programs and major state projects, and a report on internal controls over compliance that will report any significant deficiencies and material weaknesses identified; however, such report will not express an opinion on internal control. Management's Responsibilities Our audit will be conducted on the basis that management acknowledge and understand that they have responsibility: I . For the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; 2. For the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; City of Cape Canaveral, Florida August 28, 2019 Page 5 3. For identifying, in its accounts, all federal awards received and state financial assistance expended during the period and the federal programs under which they were received, including federal awards and funding increments received prior to December 26, 2014 (if any), and those received in accordance with the Uniform Guidance (generally received after December 26, 2014); 4. For maintaining records that adequately identify the source and application of funds for federally funded activities; 5. For preparing the schedule of expenditures of federal awards and state financial assistance (including notes and noncash assistance received) in accordance with the Uniform Guidance and Chapter 10.550, Rules of the State of Florida, Office of the Auditor General requirements; 6. For the design, implementation, and maintenance of internal control over federal awards, state financial assistance, and compliance; 7. For establishing and maintaining effective internal control over federal awards and state financial assistance that provides reasonable assurance that the nonfederal entity is managing federal awards and state projects in compliance with federal and state statutes, regulations, and the terms and conditions of the federal awards and state financial assistance; 8. For identifying and ensuring that the entity complies with federal and state statutes, regulations, and the terms and conditions of federal award programs and state financial assistance projects and implementing systems designed to achieve compliance with applicable federal and state statutes, regulations, and the terms and conditions of federal award programs and state financial assistance projects; 9. For disclosing accurately, currently, and completely the financial results of each federal award and major state project in accordance with the requirements of the award; 10. For identifying and providing report copies of previous audits, attestation engagements, or other studies that directly relate to the objectives of the audit, including whether related recommendations have been implemented; 11. For taking prompt action when instances of noncompliance are identified; 12. For addressing the findings and recommendations of auditors, for establishing and maintaining a process to track the status of such findings and recommendations and taking corrective action on reported audit findings from prior periods and preparing a summary schedule of prior audit findings; 13. For following up and taking corrective action on current year audit findings and preparing a corrective action plan for such findings; 14. For submitting the reporting package and data collection form to the appropriate parties; 15. For making the auditor aware of any significant contractor relationships where the contractor is responsible for program compliance; 16. To provide us with: a. Access to all information of which management is aware that is relevant to the preparation and fair presentation of the financial statements, and relevant to federal award programs and state financial assistance projects, such as records, documentation, and other matters; b. Additional information that we may request from management for the purpose of the audit; and c. Unrestricted access to persons within the entity from whom we determine it necessary to obtain audit evidence. 17. For adjusting the financial statements to correct material misstatements and confirming to us in the management representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the current year period(s) under audit are immaterial, both individually and in the aggregate, to the financial statements as a whole; 18. For acceptance of nonattest services, including identifying the proper party to oversee nonattest work; City of Cape Canaveral, Florida August 28, 2019 Page 6 19. For maintaining adequate records, selecting and applying accounting principles, and safeguarding assets; 20. For informing us of any known or suspected fraud affecting the entity involving management, employees with significant role in internal control and others where fraud could have a material effect on compliance; 21. For the accuracy and completeness of all information provided; 22. For taking reasonable measures to safeguard protected personally identifiable and other sensitive information; 23. For confirming your understanding of your responsibilities as defined in this letter to us in your management representation letter; and 24. For identifying and ensuring that the entity complies with applicable laws, regulations, contracts, agreements, and grants. Additionally, as required by Uniform Guidance and Chapter 10.550, Rules of the State of Florida, Office of the Auditor General, 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. The summary schedule of prior audit findings should be available for our review at the commencement of fieldwork. With regard to the supplementary information referred to above, you acknowledge and understand your responsibility (a) for the preparation of the supplementary information in accordance with the applicable criteria, (b) to provide us with the appropriate written representations regarding supplementary information, (c) to include our report on the supplementary information in any document that contains the supplementary information and that indicates that we have reported on such supplementary information, and (d) to present the supplementary information with the audited financial statements, or if the supplementary information will not be presented with the audited financial statements, to make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance by you of the supplementary information and our report thereon. As part of our audit process, we will request from management written confirmation concerning representations made to us in connection with the audit. Investment Attestation Engagement You have requested that we examine compliance with Section 218.415, Florida Statutes, Local Government Investment Policies of the City for the year ended 2020, 2021, 2022, 2023, and 2024. 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. 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. City of Cape Canaveral, Florida August 28, 2019 Page 7 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. 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: l . 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; 2. 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 3. To provide us with: a. 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; b. Additional information that we may request from management for the purpose of the examination; and C. 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 you written confirmation concerning representations made to us in connection with the examination. 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 governing body. 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 or support for any other transactions we select for testing. During the course of the audit, we may observe opportunities for economy in, or improved controls over, your operations. We will bring such matters to the attention of the appropriate level of management, either orally or in writing. City of Cape Canaveral, Florida August 28,.2019 Page 8 You agree to inform us of facts that may affect the financial statements of which you may become aware during the period from the date of the auditor's report to the date the financial statements are issued. Zach Chalifour is the service leader for the audit services specified in this letter. His responsibilities include supervising the services performed as part of this engagement and signing or authorizing another qualified firm representative to sign the reports. Our fees for the audit of the financial statements and related services, including expenses, for each of the fiscal years included in this engagement are as follows: Financial Year Audit Single Audit (per major program) 2020 $ 48,500 $ 3,500 2021 48,500 3,500 2022 49,000 3,500 2023 49,000 3,500 2024 49,500 3,500 If the annual Consumer Price Index (CPI — All Urban Customers Series ID: CUURXOOOSAO, not seasonally adjusted, size class B/C, all items, as published by the United States Bureau of Labor Statistics) for the 12 months preceding a year-end audit date is a negative value, a reduction in the financial audit fees for the respective year under audit may be renegotiated based on the index. Upon completion of the audit for the year ended September 30, 2024, this engagement may be renewed for an additional five-year period at the option of both parties. Any renewals will be evidenced by a new engagement letter. At the conclusion of our audit engagement, we will communicate to those charged with governance the following significant findings from the audit: • Our view about the qualitative aspects of the entity's significant accounting practices; • Significant difficulties, if any, encountered during the audit; • Uncorrected misstatements, other than those we believe are trivial, if any; • Disagreements with management, if any; • Other findings or issues, if any, arising from the audit that are, in our professional judgment, significant and relevant to those charged with governance regarding their oversight of the financial reporting process; • Material, corrected misstatements that were brought to the attention of management as a result of our audit procedures; • Representations we requested from management; • Management's consultations with other accountants, if any; and • Significant issues, if any, arising from the audit that were discussed, or the subject of correspondence, with management. In accordance with the requirements of Government Auditing Standards, we have attached a copy of our latest external peer review report of our firm for your consideration and files. City of Cape Canaveral, Florida August 28, 2019 Page 9 We will perform the following nonattest services: Preparation of financial statements (if requested), Schedule of Federal Awards and State Financial Assistance (if requested), and Data Collection Form (if applicable). With respect to any nonattest services we perform, the City's management is responsible for (a) making all management decisions and performing all management functions; (b) assigning a competent individual (John DeLeo, Administrative & Financial Services Director) to oversee the services; (c) evaluating the adequacy of the services performed; (d) evaluating and accepting responsibility for the results of the services performed; and (e) establishing and maintaining internal controls, including monitoring ongoing activities. The audit documentation for this engagement is the property of James Moore & Co., P.L. and constitutes confidential information. However, we may be requested to make certain audit documentation available to a grantor or their designee, a federal or state agency providing direct or indirect funding, or the U.S. Government Accountability Office pursuant to authority given to it by laws or regulation, or to peer reviews. If requested, access to such audit documentation will be provided under the supervision of James Moore & Co., P.L. personnel. We will notify you of any such request. Furthermore, upon request, we may provide copies of selected audit documentation to these agencies and regulators. The regulators and agencies may intend, or decide, to distribute the copies or information contained therein to others, including other governmental agencies. We appreciate the opportunity to be of service to the City 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, �p•W l�irae � fie. � �.L. JAMES MOORE & CO., P.L. RESPONSE: This letter ectly sets forth the understanding of the City of Cape Canaveral, Florida. By 7�� Title /!�(ff % Mayor Date /0/%S�/il� CPAs & Advisors REPORT ON THE FIRM'S SYSTEM OF QUALITY CONTROL April 11, 2018 To the Members James Moore & Co., P.L. and the National Peer Review Committee We have reviewed the system of quality control for the accounting and auditing practice of James Moore & Co., P.L. (the firm) in effect for the year ended October 31, 2017. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants (Standards). A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as described in the Standards may be found at www.aicpa.org/vrsummary. The summary also includes an explanation of how engagements identified as not performed or reported in conformity with applicable professional standards, if any, are evaluated by a peer reviewer to determine a peer review rating. Firm's Responsibility The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. The firm is also responsible for evaluating actions to promptly remediate engagements deemed as not performed or reported in conformity with professional standards, when appropriate, and for remediating weaknesses in its system of quality control, if any. Peer Reviewer's Responsibility Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance therewith based on our review. One Jackson Place, Suite 500 . P.O. Drawer 22507 . Jackson, MS 39225-2507 . Ph: 601-948-2924 . Fx: 601-960-9154 . wwwMaddoxReid.com Required Selections and Considerations Engagements selected for review included engagements performed under Government Auditing Standards, including compliance audits under the Single Audit Act, and audits of employee benefit plans and an examination of a service organization (SOC 2 engagement). As a part of our peer review, we considered reviews by regulatory entities as communicated by the firm, if applicable, in determining the nature and extent of our procedures. Opinion In our opinion, the system of quality control for the accounting and auditing practice of James Moore & Co., P.L. in effect for the year ended October 31, 2017, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficiency (les) or fail. James Moore & Co., P.L. has received a peer review rating of pass. //444y— A",W'oe 640404 9682t 19ZZ C