Loading...
HomeMy WebLinkAbout1999 S Audit Contract for Fiscal Year Ending June 30, 1999 CONTRACT TO AUDIT ACCOUNTS ", ,)coo of Orange County, , ; n Governmental Ui Ju% RETURN THIS COPY TO THE CLERK'S OFFICE FOR THE PERMANENT AGENDA FILE On 6 6 h _day of April , 19 99 . Deloitte & Tou�he LI P Auditor Post Office Box 2778, Raleigh, North Carolina 27A02_977$ Mailing Address board 0 county ,hereinafter referred to as the Auditor,and Commissioners of Orange County ,hereinafter referred Governing Board Governmental Unit to as the Governmental Unit,agree as follows: 1. The Auditor shall audit all statements and disclosures required by generally accepted accounting principles and additional required legal statements and disclosures of all funds and/or divisions of the Governmental Unit for the period beginning July 1, , 19 98,and ending June 30, , 1999 .The combining,individual fund,and account group financial statements and schedules shall be subjected to the auditing procedures applied in the audit of the combined financial statements and an opinion a ill be rendered in relation to the combined financial statements taken as a whole. 2. At a minimum, the Auditor shall conduct his audit and render his report in accordance with gcneralh• accepted auditing standards.The auditor shall perform the audit in accordance%%ith Government Auditing Standards if required by the State Single Audit Implementation Act, as codified in G.S. 159-34. If required by OMB Circular A-133 and the State Single Audit Implementation Act,the auditor shall perform a Single Audit. 3. This contract contemplates on unqualified opinion being rendered. If financial statements are not prepared in accordance with gencrally Sccepted accounting principles(GAAP).or the matcments fail to Include all disclosures required by GAAI',explain that deparwre from GAAP in the.pace btlu�v; 4 Ills contract contemplates all urapralified opinion being rendered. The audit shall include such tests of file accounting records and such other auditing procedures as are considered by the Auditor to he necessary in the circumstances. Anv linritations or ic.)irtctions its scope it itould lead to a yuahftcarrori should be fire/•explained in on aitachnrew to this contract. The audit ti ill have no scope limitations except: 5. II'this audit engagement is subject to the standards for audit as defined in the Government Auditing Standards, issued by the Comptroller General of the Unitcd States. then the Auditor ixarrants by accepting this cngagement that lie/she has stet the requirements for a peer rex icxi and continuing education as specified in the Government Auditing Standard,.The Auditor agrees to pros ide a cop; of Ilicir most recent peer rc%-icN report to the Governmental Unit and the Secretary of the Lucid Government tr Ulnlllla}Ion prlihr Ill tee C\CCtllloll oI leis audit contract. (sec Item 2U.) G. It is agrec,l that time is of the essence in this contract.All audits arc to be performed and the report of audit submitted by October 31, . 19 99. 7. It is agreed that gencralh accepted auditing standards include a review of the Governmental Unit's system of internal control and accounting as sanic relates to accountability of fundz and adherence to budget and lacy requirements applicable thereto;that the Auditor dill make a\%ritten report.%shish may or may not he a pan of the written report of audit,to the Governing Board setting forth his findings,together%%ith his recommendations f'or improvement.That written report must include all matters defined as "reportable conditions" in AU 325 of the AICPA Professional Standards.The Auditor shall file a cony of that report xvith the Secretnry of the Local Government Commission. S. All local government and public authority contracts for annual or special audits,bookkeeping or other assistance necessary to prepare the Unit's records for audit,financial statement preparation,any finance-related investigations,or any other audit-related \%ork in flit State of North Carolina require the approval of the Secretary of the Local Government Commission. Invoices for sen ices rendered under these contracts shall not be paid by the Governmental Unit until the invoice has been approved by the Secretan of the Local Government Commission. (This also includes any progress billings.)All invoices should be submitted in triplicate to the Secretary of the Local Government Commission. The original and one copy will be returned to the Auditor. Approval is not required on contracts and invoices for system improvemcnts and similar services of a non-auditing nature. 9. In consideration of the satisfactory performance of the provisions of this agreement, the Governmental Unit shall pay to the Auditor,upon approval by the Secretary of the Local Government Commission,the following fee which includes any cost the Auditor may incur from xvork paper or peer reviews or any other quality assurance program required by third parties(federal and State agencies or other organizations)as required under the Federal and State Single Audit Acts: Year-end bookkeeping assistance- N/A Audit- r $60,300- Preparation of the financial statements N/A (Continued on Reverse) * - The independent auditors' report of Deloitte & Touche LLP should not be included or incorporated by reference in any client prepared document without the express written permission of Deloitte & Touche LLP. 10. After completing his audit,the Auditor shall submit to the Governing Board a written report of audit.This report shall include,at least.the financial statements of the governmental unit and all of its component units and notes thereto prepared in accordance _ with generally accepted accounting principles,combining and supplementary information requested by the client or required for full disclosure under the law,and the auditor's opinion on the material presented.The Auditor shall furnish the required number of copies of the report of audit to the Governing Board as soon as practical after the close of the accounting period. H. The Auditor shall file with the Local Government Commission two copies of the report of audit, including one copy of the federal Data Collection Form,if a federal single audit is conducted. Two copies of the report of audit should be submitted if an audit is required to be performed only under the requirements of the State Single Audit Implementation Act or a financial audit is required to be performed in accordance with Government Auditing Standards.Otherwise,one copy shall be submitted.Copies of the report shall be filed with the Local Government Commission when(or prior to)submitting the invoice for the services rendered. All copies of the report submitted must be bound. The report of audit, as filed with the Secretary of the Local Government Commission,becomes a matter of public record for inspection and review in the offices of the Secretary by any interested parties.Any subsequent revisions to these reports must be sent to the Secretary of the Local Government Commission. These audited financial statements arc used in the preparation of official Statements for debt offerings,by municipal bond rating services,and to fulfill secondary market disclosure requirements of the Securities and Exchange Commission. 12. Should circumstances disclosed by the audit call for a more detailed investigation by the Auditor than necessary under ordinary circumstances,the Auditor shall inform the Governing Board in writing of the need for such additional investigation and the additional compensation required therefor. Upon approval by the Secretary of the Local Government Commission. this agreement may be%aricd or changed to include the increased time and/or compensation as may be agreed upon by the Governing Board and the Auditor. 13. If an approved contract needs to be varied or changed for any reason•the change must be reduced to writing,signed by both parties,preaudited if necessary,and submitted to the Secretary of the Local Government Commission for approval.No chance shall he effecti%c unless approved M• the Sccrclar• of the Local Government Commission. the Governing Board. and the Auditor. 14. Whenever the Auditor uses an engagement letter %%ith the client, Items 9 and 15 may be completed by referencing the engagement letter and attaching a copy of the engagement letter to the contract to incorporate the engagement letter into the contract.In case of conflict between the terms of the engagement letter and the terms of this contract•the terms of this contract vv ill control.Gngagenicnt letter terns arc deemed to be%oid unless the conflicting terms of this contract are specifically deleted in Item 21 of this contract.Engagement Icucrs containing indemnification clauses mill not be approved by the Local Government Commission. 15. There are no special provisions except: See attached engagement letter 16 A separate contract should not be made for each division to be audited or report to be submitted.A separate contract must be executed for each component unit which is a local government and for which a separate audit report is issued. 17. The contract should be executed and submitted in triplicate to the Secretary of the Local Government Commission,325 North Salisbury Street.Raleigh.North Carolina 27603.1385. 18. Upon approval•the original contract will be returned to rile Governmental Unit.a copy will be forwarded to the Auditor,and a cope retained by the Secretary of the Local Government Commission. The audit should not he started before the contract is aprroed. 19. There arc no other agreements between the panics hereto and no other agreements rclaii%c hereto that shall be enforceable unless entered into in accordance %with the procedure set out herein and approved by the Secretary of the Local Government Commission. 20. If this audit engagement is not subject to Cmernment Auditing Standards,then Item 5 shall be listed as a deleted provision in hem 21. An explanation must he given for deleting this pro%ision. 21. All of the above paragraphs are understood and shall apply to this agreement.except the following numbered paragraphs shall be deleted:(Sec Item 1.1.) Deloitte & Touche LLP Orange County, North Carolina Audu fnn mcrnmcnta Unit f)v. K. Alan Lonbom, Partner fill 1. r print name) l►> Alice M. Gordon, Chair /y A f Plwx r r prim name and tide Signature) /L�l' GUt�K (Signature or Ma,or or Chai rson orgotroming board) at Date 2 Date � L 3 so . 1 l ! 1 Approved by the Secretary of the Local Government Commission as provided in Article 3.Chapter 159 of the This instrument has been prcaudited in the manner required by General Statutes or Article 31.Part 3.Chapter I I SC of the The Local Government Budget and Fiscal Control Act or by the General Sta a School Budget and Fiscal Control Act. TEES A BORDEAUX Kenneth T. Chavious r the Secretary.L-I Go. unent Con 'ssim Gm-emmental Unit Finance OBeer(1 I axe type or prim name) (Si•na urcl (Signature) Date_ �U Dave `�/� --'o� (p-1,nJ Q•n���t be dated.) 1 • • � �y�<�'`�� is Deloitte & Touche Deloitte&Tou6he LLP ..Telephc+ 19)546-8000 �\ Suite 1800 Telex:4995716 First Union Capital Center Facsimile: (919)833-3276 150 Fayetteville Street Mall P.O. Box 2778 Raleigh, North Carolina 27602-2778 April 26, 1999 The Board of County Commissioners Orange County,North Carolina Dear Ladies and Gentlemen: We are pleased to serve as independent accountants and auditors for Orange County(the "County") for the year ended June 30, 1999. This letter reaffirms our contract with you dated April 26, 1999 Mr. K. Alan Lonbom will be responsible for the services that we perform for the County. It will be the responsibility of Mr. Lonbom to ensure that the County receives quality service. He will be assisted by Mr. Thomas Moore, audit manager. Mr. Lonbom will, as he considers necessary, call on other individuals with specialized knowledge,either in this office or elsewhere in our Firm, to assist in the performance of our services. While auditing and reporting on the County's general purpose financial statements for the year ending June 30, 1999, is the service that we are to provide under this engagement letter,we would also be pleased to assist the County on issues as they arise throughout the year. Hence, we hope that the County will call Mr. Lonbom whenever management believes he can be of assistance. It is our usual practice to have a second partner act as a consulting partner on each client assignment. The purpose of this arrangement is to have another partner,known to you,who is familiar with your operations and who can substitute for Alan in his absence or work with him when a second viewpoint is desired. Mr. Sam McNairy will be consulting partner for your engagement. This letter sets forth our understanding of the terms and objectives of our engagement,the nature and scope of the services we will provide, and the related fee arrangements. Delolt buche bhmatsu April 26, 1999 Orange County,North Carolina Page 2 Audit of General Purpose Financial Statements We will audit the County's general purpose financial statements as of and for the year ending June 30, 1999. In addition,we will audit the County's compliance with laws and regulations related to federal and state awards; and report on the County's Schedule of Expenditures of Federal and State Awards. Our audits will be conducted in accordance with Government Auditing Standards, issued by the Comptroller General of the United States, Office of Management and Budget("OMB") Circular A-133,Audits of States, Local Governments and Non profit Institutions, and the State Single Audit Implementation Act. We will plan and perform our audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement, whether caused by error or fraud, and we will perform tests of the County's compliance with certain provisions of laws, regulations, contracts and grants. However,because of the characteristics of fraud,particularly those involving concealment and falsified documentation(including forgery), a properly planned and performed audit may not detect a material misstatement. Therefore, an audit conducted in accordance with generally accepted auditing standards is designed to obtain reasonable,rather than absolute,assurance that the general purpose financial statements are free of material misstatement. An audit is not designed to detect error or fraud that is immaterial to the general purpose financial statements or to detect immaterial instances of noncompliance. As part of our audit,we will consider the County's internal control and assess control risk,as required by generally accepted auditing standards and Government Auditing Standards, for the purpose of establishing a basis for determining the nature,timing, and extent of auditing procedures necessary for expressing an opinion on the general purpose financial statements, and not to provide assurance on the County's internal control or to identify reportable conditions. 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 assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation. April 26, 1999 Orange County,North Carolina Page 3 Our auditing 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 make audit inquiries and request written responses from the County's attorneys as part of the engagement,and they may bill the County for responding to this inquiry. As part of our audit of compliance with the requirements of major federal programs,we will obtain an understanding of the County's internal control related to administering major federal programs and we will assess risk as required by OMB Circular A-133 for the purpose of establishing the nature,timing, and extent of auditing procedures necessary for expressing an opinion concerning compliance with laws and regulations related to major federal and state award programs. As required by OMB Circular A-133 and the State Single Audit Implementation Act, our audit of compliance will also include tests of transactions related to federal and state award programs for compliance with applicable laws and regulations. However,because of the concept of reasonable assurance and because we will not perform a detailed examination of all transactions, there is a risk that material errors, fraud or illegal acts may exist and not be detected by us. We will advise you, however,of any matters of that nature that come to our attention, and will include such matters in the reports required for an audit in accordance with OMB Circular A-133. Our responsibility as auditors is limited to the period covered by our audit and does not extend to matters that arise during any subsequent periods for which we have not been engaged as auditors or for which we have performed no substantive auditing procedures. The report on our understanding of the County's internal control and the assessment of control risk made as part of the County's general purpose financial statement audit will include(1)the scope of our work in obtaining an understanding of the County's internal control and in assessing the control risk and(2)the reportable conditions, including the identification of material weaknesses identified as a result of our work in understanding and assessing the control risk. In addition, we will render a report on illegal acts,as required,depending on the results of our audit procedures. We will complete and sign one copy of the auditor's information section of the Data Collection Form. County management must prepare all other sections of the form and sign the form prior to its submission to the Federal Bureau of the Census. April 26, 1999 Orange County,North Carolina Page 4 The objective of an audit carried out in accordance with the standards described above is(1) the expression of an opinion concerning whether the general purpose financial statements present fairly, in all material respects the financial position,results of operations,and cash flows of the County in conformity with generally accepted accounting principles, (2)reporting on the internal control relevant to an audit of the financial statements, (3)reporting on the County's compliance with laws and regulations, which could have a material effect on the financial statements, (4)reporting on whether the schedule of expenditures of federal and state awards is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole, (5)the reporting on our determination as to whether the County's internal control provides reasonable assurance of compliance with federal laws and other laws and regulations,(6)the expression of an opinion on whether the County complied with specific terms and conditions of its major federal and state programs and(7)preparation of a schedule of findings and questioned costs to summarize the results of the audit in accordance with the requirements of OMB Circular A-133. Our ability to express that opinion and render those reports, and the wording of our opinion and reports,will, of course, be dependent on the facts and circumstances at the date of such reports. If we are unable to complete our audit or if our auditors' reports require modification, the reasons therefor will be discussed with County management and the Board of Commissioners. Neither our audit of the County's general purpose financial statements for the year ending June 30, 1999, nor any other services provided pursuant to this engagement letter, will provide any assurances, nor will we express any opinion,that the County's systems or any other systems, such as those of the County's vendors, service providers, customers,component units, unconsolidated subsidiaries or joint ventures in which the County has an investment or other third parties,are year 2000 compliant. In addition,we are not engaged to perform,nor will we perform as part of this engagement, any procedures to test whether the County's systems or any other systems are year 2000 compliant or whether the plans and activities of the County or any third parties are sufficient to address and correct system or any other problems that might arise because of the year 2000,nor will we express any opinion or provide any other assurances with respect to these matters. We understand that our reports on the County's internal control,as part of the general purpose financial statement audit and on compliance with laws and regulations, are intended for the information of the County Manager,members of the Board of County Commissioners(the "Board"), management and officials of federal and state awarding agencies and pass-through entities and the Local Government Commission. April 26, 1999 Orange County,North Carolina Page 5 Management's Responsibility The general purpose financial statements are the responsibility of management. In this regard, management has the responsibility for, among other things,establishing and maintaining effective internal control over financial reporting, identifying and ensuring compliance with laws, regulations, contracts and grants and establishing and maintaining effective internal control to assure such compliance with those requirements applicable to its activities for properly recording transactions in the accounting records, for making appropriate accounting estimates, for safeguarding assets, for the overall accuracy of the financial statements and their conformity with generally accepted accounting principles and for making all financial records and related information available to us. In addition,management is responsible for implementing the requirements of any applicable Government Accounting Standards Board ("GASB") Statements effective this fiscal year. We will advise you about accounting principles and their application and will assist in the preparation of your general purpose financial statements, but the responsibility for the general purpose financial statements remains with you. We will make specific inquiries of management about the representations embodied in the general purpose financial statements. As part of our audit procedures, we will request that management provide us with a representation letter acknowledging management's responsibility for the preparation of the general purpose financial statements and for compliance with laws and regulations applicable to federal and state award programs, and confirming certain representations made to us during our audit. The responses to those inquiries and related written representations of management required by generally accepted auditing standards are part of the evidential matter that we will rely on as auditors in forming our opinion on the County's general purpose financial statements. Because of the importance of management's representations,the County agrees to release and indemnify Deloitte& Touche LLP and its personnel from all claims, liabilities and expenses relating to our services under this engagement letter attributable to any misrepresentation by management. If the County intends to publish or otherwise reproduce in any document our report on the County's general purpose financial statements, or otherwise make reference to Deloitte& Touche LLP in a document that contains other information in addition to the audited financial statements(e.g., in a debt or equity offering circular or in a private placement memorandum), the County agrees that prior to making any such use of our report,or reference to Deloitte& Touche LLP, Orange County management will provide us with a draft of the document to read and obtain our approval for the inclusion or incorporation by reference of our report,or the April 26, 1999 Orange County,North Carolina Page 6 reference to Deloitte&Touche LLP, in such document before the document is printed and distributed. The inclusion or incorporation by reference of our report in any such document would constitute the reissuance of our report and any request by the County to reissue our report or to consent to its inclusion or incorporation by reference in an offering or other document will be considered based on the facts and circumstances existing at the time of such request. The estimated fees outlined herein do not include any services that would need to be performed in connection with any such request to make use of our report, or reference to Deloitte&Touche LLP; fees for such services(and their scope)would be subject to our mutual agreement at such time and would be described in a separate engagement letter. Other Communications Arising From the Audit In connection with the planning and the performance of our audit, generally accepted auditing standards and Government Auditing Standards require that we ensure that certain matters are communicated to management and members of the Board. We will report directly to the members of the Board any fraud of which we become aware that involves senior management, and any fraud (whether caused by senior management or other employees)of which we become aware that causes a material misstatement of the general purpose financial statements. We will report to senior management any fraud perpetrated by lower level employees of which we become aware that does not cause a material misstatement of the general purpose financial statements; however,we will not report such matters directly to the Board, unless otherwise directed by the Board. We will inform the appropriate level of management of the County and ensure that the Board is adequately informed with respect to illegal acts that have been detected or have otherwise come to our attention in the course of our audit, unless the illegal act is clearly inconsequential. If, after determining that the Board has been adequately informed of an illegal act that has been detected or which has otherwise come to our attention in the course of our audit,we conclude that(1)the illegal act has a material effect on the general purpose financial statements; (2) senior management has not taken, and the Board has not caused senior management to take,timely and appropriate remedial actions with respect to the illegal act; and(3)the failure to take appropriate remedial actions is likely to result in a departure from the standard auditors' report or warrant our resignation from the audit engagement,we will directly report our conclusions to the Board and take such actions as are required by state or federal law to report such matters to funding agencies and appropriate legal authorities. April 26, 1999 Orange County,North Carolina Page 7 We will also report directly to County management and the Board matters coming to our attention during the course of our audit that we believe are reportable conditions. Reportable conditions are significant deficiencies in the design or operation of internal control that could adversely affect the County's ability to record,process, summarize and report financial data consistent with the assertions of management in the general purpose financial statements. In addition we will communicate to the Board certain other matters relating to the conduct of our audit, including,when applicable: • Our responsibility as auditors under generally accepted auditing standards, Government Auditing Standards and OMB Circular A-133 • Significant accounting policies • Management judgments and accounting estimates • Significant audit adjustments (recorded and unrecorded) • Other information in documents containing audited financial statements • Disagreements with management • Consultation by management with other accountants on significant matters • Difficulties encountered in performing the audit • Major issues discussed with management prior to our retention as auditors. We may also have other comments for management on matters we have observed and possible ways to improve the efficiency of the County's operations or other recommendations concerning internal control. With respect to these other communications, it is our practice to discuss all comments,if appropriate,with the level of management responsible for the matters,prior to their communication to senior management and/or the Members of the Board. April 26, 1999 Orange County,North Carolina Page 8 Coordination of the Audit Our audit is scheduled for performance and completion as follows: Schedule for Begin Completion Audit Performance Schedule: Planning August 1999 August 1999 Year-end September 1999 October 1999 Audit Communications- Report on audit of financial statements November 15, 1999 Other Communications: Report of reportable conditions, if any November 15, 1999 Other management comments November 15, 1999 We understand that the County's employees will type all cash or other confirmations that we request and will locate any invoices selected by us for testing. Assistance to be supplied by your personnel, including preparation of schedules and analyses of accounts as will be coordinated with Ken Chavious, Finance Director. Other assistance to be supplied by your personnel, including preparation of schedules and analyses of accounts, is described in a separate attachment. Timely completion of this work will facilitate the conclusion of our audit. We are, of course, available to assist you in other areas that might arise. Record Retention We will maintain the working papers for a minimum of three years from the date of the audit report. These working papers will be made available to representatives of the United States General Accounting Office or other government audit staffs upon their request and after they have properly notified you of their request to review the working papers. April 26, 1999 Orange County,North Carolina Page 9 Access to Working Papers by Regulators In accordance with the requirements of Government Auditing Standards,we are required to provide access to our working papers and photocopies thereof to a federal agency or the Comptroller General of the United States upon their request for their regulatory oversight purposes. If such a request is made,we will inform you prior to providing such access. The working papers for this engagement are the property of Deloitte&Touche LLP and constitute confidential information. Access to the requested working papers will be provided to representatives of the United States General Accounting Office or other appropriate government audit staffs under the supervision of Deloitte&Touche LLP audit personnel and at a location designated by our Firm. If photocopies are requested,we will mark all information as confidential and maintain control over the duplication of all information. All professional and administrative services relating to such access (including photocopying)will be charged as an additional expense to the engagement. Professional Fees Our fees for these services will be based on the actual time spent at various levels of responsibility,plus travel and other expense(e.g., report production,typing, communication and postage). We estimate that our total fees for this audit will be$60,300 (for the general audit and the single audit), including expenses. This 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. Fees for additional services including implementation of new accounting pronouncements,not outlined above will be mutually agreed upon prior to beginning such work. We appreciate this opportunity to be of service to Orange County, and we believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. • April 26, 1999 Orange County,North Carolina Page 10 If the above terms are acceptable to Orange County and the services outlined are in accordance with your understanding,please sign the enclosed copy of this letter in the space provided and return it to us. Yours truly, Response: This letter correctly sets forth the understanding of Orange County: By: Title: Date: a BERNST&YOUNG LLP ■ 787 Seventh Avenue • Phone: 212 773 3000 New York,New York 10019 Deloitte & Touche LLP We have reviewed the system of quality control for the accounting and auditing practice of Deloitte & Touche LLP (the Firm) in effect for the year ended March 31, 1996. Our review was conducted in conformity with standards for peer reviews promulgated by the Peer Review Committee of the SEC Practice Section of the AICPA Division for CPA Firms (the Section). We tested compliance with the Firm's quality control policies and procedures at the Firm's National office and at selected practice offices in the United States and with the membership requirements of the Section to the extent we considered appropriate. These tests included the application of the Firm's policies and procedures on selected accounting and auditing engagements. We tested the supervision and control of portions of engagements performed outside the United States. In performing our review, we have given consideration to the general characteristics of a system of quality control as described in quality control standards issued by the AICPA. Such a system should be appropriately comprehensive and suitably designed in relation to the firm's organizational structure, its policies, and the nature of its practice. Variance in individual performance can affect the degree of compliance with a firm's prescribed quality control policies and procedures. Therefore, adherence to all policies and procedures in every case may not be possible. As is customary in a peer review, we are issuing a letter under this date that sets forth comments relating to certain policies and procedures or compliance with them. These matters were not considered to be of sufficient significance to affect the opinion expressed in this report. In our opinion, the system of quality control for the accounting and auditing practice of Deloitte & Touche LLP in effect for the year ended March 31, 1996 met the objectives of quality control standards established by the AICPA, and was being complied with during the year then ended to provide the Firm with reasonable assurance of conforming with professional standards. Also, in our opinion, the Firm was in conformity with the membership requirements of the Section in all material respects. f f LLB New York,New York November 25, 1996 Ernst&Young LLP is a member of Ernst&Young International, Ltd.