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HomeMy WebLinkAboutAgenda - 06-06-2000-8iORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 6, 2000 Action Agenda Item No. ~~ SUBJECT: Audit Contract for the June 30, 2000 Fiscal Year DEPARTMENT: Finance PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Contract and Engagement Letter INFORMATION CONTACT:. Ken Chavious, ext 2453 TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 9fi8-4501 Durham fi88-7331 Mebane 33fi-227-2031 PURPOSE: To consider awarding a contract to Deloitte and Touche, LLP, for the provision of audit services for the fiscal year ending June 30, 2000. BACKGROUND: During the spring of 1997, County staff pursued a request for proposal process for audit services. Staff recommended and the Board approved the proposal submitted by Deloitte and Touche, LLP. The 1997 RFP stated that the County would contract with the successful firm for a period of at least three years. The final year of the County's commitment to Deloitte and Touche, LLP was last year. Staff has been very pleased with the services provided by Deloitte and Touche, LLP during the past three years. In many cases, consultation and advice above and beyond the contract requirements has been provided by the firm. Staff desires to work with Deliotte and Touche, LLP far one mare year and consider pursuing another RFP process for the audit of the 2000-2001 fiscal year. FINANCIAL IMPACT: The fee proposed for the 2000 audit is $66,500. This is a 10% increase over last year. The majority of the increase is attributed to compliance testing required by the state and federal government under the single audit act. In addition, the following factors contribute to the increase: • Revenues in all funds have increased from $97.9 million to $113.3 million (15%) • Expenditures in all funds have increased from $98.9 million to $117.4 million (19%) • State Bond expenditures of $10 million • Expenditures and investments related to $40 million in bonds recently sold. • Addition of the Landfill fund. These items significantly increase the number of accounting transaction and, in turn, impacts the amount of testing, sampling and time required by the auditors. Expenditures related to the single audit are partially recouped through indirect casts reimbursements in Social Services and Child Support, and the Landfill fund will be charged its fair share of the audit costs. The net cost to the County is expected to be approximately $58,000. RECOMMENDATION(S): The Manager recommends that the Board approve the audit contract far the fiscal year ending June 30, 2000 with Deloitte and Touche, LLP and authorize the Chair to sign. i_cc•zos trtev. Inrzuool CDNTRACT TD AUDIT ACCOUNTS I'ila in Triplicate, of Oran>7e ~1rY .._ rovemmenta~ Unit Dn this 24th day of ___May ~, 2000 , _D_eloitte & Touche LLP Auditor ~,~`-7tlC2tZ11Cm Btri1_di_ngr 777 Wiaa~~"s~dr~ Cr,.~er fh~?-1nt•f-°~ - -`Z.~~2,.,~7K Mailing Address htminafter referred to as thrAuditor, and BO~'d of Oots~..st3i.t7tier'sof hereinafterrcfurred • Govemina Bond _ Govemmenua Unit .,. to as the Governmental Unit, agree as follows: 1. The Auditor shall audit all statements and disclosures required by generally accepted eeeounting principles and addidanal required legal statements and disclosures of all funds and/or divisions of the GovtsnmenW Unit for the period beginning __T,,,~_r1~„ l ~,A99 and ending Jtne 3d 2000 The combining, individtttd fttntl, and ,account group Fnancial statements and schedules shell be subjected W We auditing procedures apptied in the audit of the combined financial statements and an opinion will be rendered In relation to the combined financial statemetns taken s, a whales 2. At a minimum, the Auditor shall conduct hie audit and rends his report in atx;ordanae with generally accepted auditing standards. The auditor shnll perform the audit in accordance with if required b3' the State Single Audit Implementation Act, as codified in G.S. 159-34. if required by OMB Circular A-133 and tho Stttta Single Audit Implementation Act, the auditor shall ptxfarm a Single Audit. 3. This contract eonremp/ates an urrgaalifiad opinion being rcndcnd If fmmttial statemerts are not prepared in accordance with generally accepted atx:oundng principles (GAAA), or_ the smteruems fail to include all dacloaures required by GAAP, estplain that departure ftom GAAP in the space below: 4. This contract coruearplares an ttrrgrta/fed oplnlari being rendered The audit shall include such testa of the atxouating rtxords and such other auditing procedures as arc considered by the Atulitor to be aacesstuy in the eircutrtstantxs...ttrry llnrlratrarts, err restrictionr in scope which would had to a quallfieatlan should be fully ttg7la4red bs an attacharant ra lhir conb~acr. The audit will have no scope limiutions except: 5. If this audit engagement is subject to the stantierds -for audit as defined in the issued by the Comptroller General of the United States, then the Auditor warranq by aecepthtg this engsgemettt Uri hdahe has ntat the requirements far a peer review and continuing education es specified in the Go~O~t Auditing Standards The Auditor agras to provide a copy of their mast recent peer review report to the Governmental Unit and the 5cenetary of the (.Deal Government Commission o^or to the oxewtion of the audit contract_ (See icon( 20.) 6. It is agreed That time is of the essence in this contrail. All audits are to be performed and the report of audit submitted by 7, It is agreed that generally accepted auditing standards ittclude n mierv of the Govtxrfmatta4Unit's,system of internal control and accounting es same relates to accountability of funds and adherence to budget and'Iaw refry' itemen"t's'app(icabfe theteto; that the Auditor will make a wrinen report, which may or may not be a part of the written reppR of audit, tD the Governing Board setting forth his findings, together with his rewmmtuidadons far improvanent, That written report must include all matters defined as "reportable conditions" in AU 325 of the '~QAudiWr~1ta11Srle,a Dopy _of that rauart with the Secretary 6f theJ.ocal_Govemment Commissiog 8. All Ioc~l government and public authority contracts for annual of special audit; bookkeeping'orrotiter assistance necessary to Prepare the Unit's rerards for audit, financial sntttnnmt preparation, arty tinancarelated investigetlons, or atry other eudh-ttdated work in the State of Nordt Carolina require the approval• of the Su7shry of the i.ocal Government Cottutrinaion. Irtvoicts_for services rendered under theaesrotttracts shall not ¢e Wald by the Gcwerrtmental Unit until,yln ,iRY.RI£f_hhs been ~~ 6g~ ~egfetgfy~( the Loral Oovernmem Commissiot_ fThis,~ jQcludes emLp~pr~,s 6illin~- All invoices should 11e submitted is triplicate to the Secndtuy of the Leal. Govenunent Cormnissien. The' original and one copy will 6e rebtrned m the Auditor. Approval is net required oa eot-traera and invoices for system improvements and similar services of anon-auditing rtqure. 4. In consideration of the.satisfactory perfotmartx of the provisions of this agrtxment, the Governmental Uait shall pay to the Auditor, upon approval by the Secretary of the l.ocal'Government Commission. the following fm which includes any cost the Auditor may incur from work paper or peer reviews or any other quality assunuta program required by third parties (Federal and State grantor and oversight agencies or other organizations) ss required under We Federal and Stec Single Audit Aers: Year-end bookkeeping assistance - Audit- $66.500 Preparation of the financial statements NSA 10. After completing his audit, the Auditor shall submit to the Governing Board a wrinen 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 numbs of copies of the report of audit to the Gpveming Doard as scan as practical after the close of the accounting period. ;-F~. `;(. Ji;.i ',i (Continued nn Reverse) 1 t. The Auditor shall file with the Local Gavemmrnl Commission two copies of the rcpon of audit, including one copy of the federal Data Collection Farm, if a federal single audit is conducted. Two copies of the report of audit should he submitted if an audit is requited to be performed only under the requirements of the State Single Audit linplemenlation Act or a financial audit is required to be performed in accordance with ~oygr~tment Auditine Standards. Otherwise, one wpy shell be submitted. Copies of the report shall be filed with the Local Government Commission whrn (or prior to) submitting the invoice for the servit:es rendered. All copies of the report submitted tQu~he_ bound. The report of audit, as tiled with the Secretary of the Local Government Commission, bewma a matter of public record for inspection and review jn the offices of the Secretary by any interested parties. Any subsequent revisions to these reports must be sent to ilia Secretary of the Local Govemmant Commission. These audited financial statements arc used in the preparation of O~ciel 5tatemmts Cor debt offerings, by municipal bond rating savitxs, and to fulfill secortdary tttarlcet disclosure requirements of the Securities and Gxcltartge Commission. 12. Should circumstance disclosed by the audit tall for a more detailed investigation by the Auditor than necessity under artlinary - circumstances, the Auditor shell inform the Governing Board in writing of the need for such additional investigation and the - •, additional wmpertsation required therefor. Upon approval by the Secretary of the Local Government Commission, this egtterrtrnt may be varied or changed to include the intrea,cd time andror compensation as may be agreed upon by the Governing Board and the Auditor. - _ 13. if an approved conuaet needs to be vtvied or changed for any trason, the change must be reduced to writing, signed by both panic, presudited if necessary, and submitted to the Secretary of the Local Govtmttmmt Commission for appmvsl.N° change ive u the o v uditor. 14, WbeneveT the Auditor uses an mgagemrnl Itttar with the clier-4 Item 13 may be completed by refaatcing rho rngagetrnent letter end attaching a copy of the engagement letter to the canuact to inwrporate the engaganant letter into the contract In case of conflict bawaxt the terms of the engagement IGler end the turns of this contract, the leans oP this Contract will control. Engagematt letter terms arc deemed to be void unless the conflicting lams of this contract are sptxifit~lly deleted in Item 21 of - this Contrcct. Engagement letters coetaining inttentniflcatian clause will hot be approved by the Local Govattment Commis,ion. - I3. There arc no special provisions extxpt: $~ att3d7ed t3l.gyt3gt~lti let''tex, - 16. A separate contract ~ be made for each division to be audited or report m be subtrtitted. A separates conhact mttst be executed for each component unit which is a local govemmeet and for which a saperste atdft repoR is issued. - .. 17. - 'f he contract should he exaeutt:d and submitted jn triplicate tq the Seaetsry of the Local Government Cortunission, 32S North - Salisbury StteeL Raleigh, North Carolina 27603-f38S. _ 18. Uptm approval, the origirra! contract will be retttrned to dx Gova'mnents! Unit, a copy will be forwarded tb the Auditor, arid a - copy retained by the Setxetery of the Local Govemmart Cotttmission. The_au~it should no~,j~fq~ Ihg, r~ntract is aonroved. 19. There arc no other agrwnettts betwecrt the parties htxeto and no other agrtxmrnts relatives htxeto that shall be enforceable unless - - .. rntered into in ttccordatrcc with the procedtue set out hereirt and approved by the Secretary of the Local Government Cotntnissioa. " ,; f;` .' 20. If this audit rngagemant is not subject to Sa9vs~rttAuditing c.^...t^~~ then Item 5 shall be listed as a deleted provision in - Item 2l. An explanation must be givee for deleting this provision. - 21. All of the above paragraphs cue wtde'stood trnd shall apply to this agreement, except the following ttttmbered paragraphs shall be -_ deleted: (Six Item 14.) • - Lot~+art G.I+kFN~BBt~ - .: ay_ n~lnir_ze ~Trnx~e.~C,~~' sy Oratlae Catniry -- (t+trur typ priest miss) (~ typ. ar print urn. ztabtle- .. (S eat erewure) (simaaae aPL+ItCmt orb ~ a ~itdl Dra ~ ~ Die . Appsored by die Seoesry of the Local Goraaatent ay - Catmtte:sian a proridad in AttiWe 3, l]tapter 159 of the o t (PMate typ. ar prim mmr) - Cemteral Snwhx ar Artiek 31, Part 3, t7tapra 1 l3C of the ' t7attatd Statiutes . - ~ (Sia~htte of Andes Cmtatetn Chsirprrwa) . ~ Fa<da Serrra:y, L.aal Go~amw C Dw (If unit does not have an audit taommieee, this stsaion should be - - (St~snss) ntarked'N/A.') Dare - :~° This imtrutttent has heat preaudited in the manner required by The Local Government budget tdtd Ftsal Conuol Aa yr by the School Budget and Fiscal Control AR GoveromatW IJoit Fiaaatt OHlcer (%tare type err prim ewe) (~ltnMwe) Data - (Pmtudu een;fiaro taw 6e dated.) Deloit~e ~ Touche Daloitt4 &Touche LLP Telephone: (704) 372-3560 1100 Carillon 227 West Trade Street Charlotte, North Carolina 28202-1675 May 24, 2000 . The Board of County Commissioners ' Orange County, North Carolina, We are pleased to serve as independent accountants and auditors for Orange County (the "County's for the year ending June 30, 2000. Mr. Rich Bovard will be responsible for the services that we perform for the County. He will be assisted by Mr. George Doehner, Audit Manager. Mr. Bovard 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 financial statements for the year ending June 30, 2000 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. Bovard whenever management believes he can be of assistance. This letter sets forth our understandiuig of the terms and objectives of our engagement, the nature and scope of the services we will pmvide, and the related fee arrangements. Audit of l~nancial Statements and Other Reporting We will audit the County's general purpose financial stademe~ats for the year ending June 30, 2000. 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 auditing standards generally accepted in the United States of America, standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and Office of Management, Budget Circular A 133, Audits of States, Local Governments and Non profit Organfzatlans, and the State Single Audit Implementation Act. We'will plea sad perform our audQ to obtain reasonable a.~~nr-e about whether the financial statements arc free of material misstatement, whether caused by error or fiend, and we will perform tests of the County's compliance with certain provisions of laws, regulations, contracts, and grains. 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 auditing standards generally accepted in the United States of America is designed to obtain reasonable; rather than absohrte, assurance that the general purpose financial c+afiP**+~*+*~ are free of material misstateme~. An audit is not designed to detect error or fraud that is immaterial to the general purpose financial statemenrts or to detect immaterial instances of noncompliance. Deloit~Tuuche The Board of County Commissioners May 24, 2000 Page 2 As part of our audits we will consider the County's internal control and assess control risk, as required by auditing standards generally accepted in the United States of America. and Government Auditing Standards, for the purpose of establishing a basis for d~ern,in;ng the nature, timing, and extent of auditing procedures necessary for expressing an opinion on the general purpose financial statemerts, and not to provide assurance on the County's irrternal control or to identify reportable conditions. An audit includes examining, on a test basis, evidence supporting the amourrts and disclosures in the general purpose financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the azeas to be tested. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. Our auditing procedures will include tests of documentary evidence supporting the t~ranssactiams recorded in the accounts, and may include tests of the physical existence of inventories, and duect confirmation of receivables and certain axher assets and liabilities by correspondence with selected individuals, creditors,. cad financial instiRutions. We will make audit inquiries and request written responses from your attorneys as part of the engagement, and they may bill you far 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 award pmgrauns. As required by OMB Circulaz A-133, our audit of compliance will also include tests of transactions related to federal award programs far compliance with applicable laws and regulations. However, because of the concept of reasonable assu*~e 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 act been engaged as auditors or far which we have performed no substantive auditing procedures. T'he 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 its present fairly, in all materal respects, the financial position, results of operations, and cash flows of the Cou~y in conformity with accounting principles generally accepted in the United States of America, (2) reporting on the internal routrol relevarrt to an audit of the general purpose financial statements, (3) reporting an the County's compliance with laws and regulations, which could have a material effect o'n the general purpose financial statements, (4) reporting on whether the schedule of ekpenditures of federal awards is fairly stated in a1] material respects when considered in relation to the basic general purpose financial statements taken as a whole, (5) the reporting on our determination as to whether the County's internal comrol provides reasonable assurance of compliance with federal laws and other laws and regulations, (b) the expression of an opinion on whether the County complied with specific terms and conditions of its major federal programs, and ('n preparation of a schedule of findings and questioned costs to summarize the results afthe audit~in accordance with the requiremerrts of OMB Circular A-133. The Board of County Commissioners May 24, 2000 Page 3 The report oa our understanding of the County's internal control and the assessment of control risk made as Part of the Courrty's financial statement audit will include (1) the scope of our work in attaining an understanding of the Courriy's internal control and in assessing the control risk, and (2) the reportable conditions, including the identification of material weaknesses ideirtified 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. Orange County management must prepare all other sections of the form and sign the farm prior to its submission to the Federal Bureau of the Census. Our ability to express an opinion and render those reports, and the wording of our opinion and reports, will, of course, be dependent on the facts and circurnstaaces at the date of such reports. lf, for any reason, we are unable to complete the audit or are, unable to form or have not formed an opinion, we may decline to express an opinion or decline to issue a report as a result of this engagement. if we are unable to complete our audit or if our auditors' reports require modification, the reasons therefor will be discussed with Orange County management and the Board of County Commissioners (the "Baard'~. We understand that our reports an the County's internal control, as part of the general purpose financial statement audit and vn compliance with laws and regulations, are intended far the information of the Board, management, and officials of federal and state awarding agencies aadpass-through, amities and the Local Government Commission. Neither our audit of the County's general purpose financial statements for the year ending June 3 0, 2000, nor nay other services provided pursuant to this engagement letter, will provide any assurances, nor will we express any opinion, that the County's systems or a~- 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 as investme~ 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 ar whether the plans and activities of the County or any third parties are suffiicierrt to address and correct system or any other problems that might arise because of the year 2000, nor will we express nay opinion or provide nay other as~++~~_s with respect to these matters. The Board of County Commissioners May 24, 200 Fage 4 Management's Responsibility The general purpose financial statements are the responsibility of Orange Coutrty management. In this regard, management has the responsibility for, among other things, establishing and maintaining effective internal control over financial reporting, for properly recording transactions in the accounting records, for adjusting the general purpose financial statements to correct material misstatements, for making appropriate accounting estimates, for safeguarding assets, for ensuring the overall accurary of the general purpose financial statements and their conformity with accounting principles generally accepted in the United States of America, and far making all financial records and related information available to us. Management is also responsible for compliance with laws, regulations, co~racts, and grants, and for establishing and maintaining effective internal cairtrol to ensure such compliance with those requirements applicable to its activities. We will advise you about accounting principles and their application and will assist in the preparation of your general purpose financial statement, but the responsibility for the general purpose financial statements remains with you. We will make specific inquiries of Orange County management about the representations embodied in the general purpose financial statement. As part of our audit procedures, we will request that management provide us with a representation letter aclmowledging management's responsibility for the preparation of the general purpose financial statements and for compliance with laws and regulations applicable to federal award programs; and affirming managemem's belief that the effects of any uncorrected financial statement misstatements aggregated by us during the curreYrt audit engagement and pertaining to the latest period presenated are immaterial, both individually and is the aggregate, to the general purpose financial statements taken as a whole. We will also request that management confirm certain representations made to us during our audit. The responses to those inquiries and related written representations of managemenrt required by auditing standards generally accepted in the United States of America 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 LLF 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 ar otherwise reproduce in any document our report on the County's general purpose financial statennenRs, or otherwise make reference to Deloitte & Touche LLF in a document that contains other i~ormatian in addition to the audited general purpose financial statement (e.g., in a periodic filing with a regula#or, in a debt or equity offering circular or in a private placement memorandum), the County agrees that prior to malting any such use of our report, or reference to Deloitte & Touche LLF, Orange County management will provide us with a draft of the document to read and ob~in our approval for the inclusion or incorporation by reference of our report, ar the reference to Deloitte 8t Touche LLF, in such document before the document is printed and distributed. The itichision or incorporation by reference of our report in any such document would constitute the reissuance of our report, The County also agrees that Orange County management will notify us and obtain our approval prior to including our report on an electronic site. The Board of County Commissioners May 24, 2000 Page 5 Our engagement to perform the services described above does not constitute our agreement to be associated with any such documents published or reproduced by or on behalf ofthe County. Any request by the Couzriy to reissue our report, to canse~ to its inclusion or incorporation by reference in an offering or other document, or to agree to its inclusion on an electronic site, will be considered based on the facts and circumstances existing at the time of such request. The estimated fees outlined herein da not include any services that would need to be performed in connection with any such request m 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 CommunicationsArisi~eg from the Audit In connection with the planning and the performance of our audit, auditing standards generally accepted in the United States of America and Government Audtttng Standards require that certain matters be communicated to the Baazd. We will report directly to the Board any fraud of which we become aware that involves senior managemerrt, and any fraud (whether caused by senior managemen or other employees) of which we become aware that causes a material misstatement ofthe 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 determine 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 cleazly inconsequential. lf, after determining that the Board has been adequately informed of an illegal act that has been detected or which has atherwige 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 managemen 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 warant our resignatiaa 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. We will also report directly to Orange County management and the Board matters coming to our attention daring the course of our audit that we believe are reportable conditions. Reportable conditions are sigtifir~rt deficiencies in the design or operation of internal connvl that could adversely affect the County's ability to record, process, summarize, and report fngancial data consisteirt with the assertions of management in the general purpose financial statements. 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. The Board of County Commissioners May 24, 2000 Page 6 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 Baaxd of County Commissioners. • Coordination aftheAudit We will plan the performance of our audit in accordance with the following timetable: Audit performance schedule: Planing Year end Audit communications: Report cQi audit of general purpose financial statements Report of findings and questioned costs and reportable conditions, if any Otller m811agemeIIt Comments October 2000 October 2000 October 2000 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. Other assistance to be supplied by your personnel, including preparation of schedules and analyses of accounts, is described in a separate letter. Timely completion of your personnel's work will facilitate the conclusion of our audit by the targeted completion dates. We will notify you promptly of any circumstances we encounter that could significaartly change the targeted completion dates. We are, of course, available to assist you is other areas that might arise. Access to Working Papers by Regulartors lii accordance with the requisemerits of Government Auditing Standards and of the Single Audit Act Amendments of 1996, we are required to provide access Lo. our working papers and photocopies thereof to a federal agency air the Comptroller General of the United States upon their request for their regulatory oversight purposes. If such a request is made, we will inform y~ prior to providing such access. The working papers for this engagement are the property of Deloitte 8c 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 governmem audit Targeted for Begin Completion July 2000 August 2000 August 2000 September 2000 The Boazd of County Commissioners May 24, 2000 Page 7 staffs under the supervision of Deloitte & Touche LLP audit personnel and at a location designated by our firm. If photocopies aze requested, we will mazk 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. The working papers relating to this audit will be retained by us for a minimum of three years from the date of the reports issued, car such longer periai as maybe required to satisfy legal and administrative requirements. Professional Fees Our fees for these services will be based on the actual time spent at our standard hourly rates, plus travel and other actual expenses (e.g., report production, typing, telephone and postage). Based on our preliminary estimates, the fee should approximate $b6,500, including expenses. This estimate is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. Our standard hourly rates vary according to the degree of responsibility involved and the experience level of the personnel assigned to your audit. Based on the anticipated timing of the work [as indicated above], our fees will be payable approximately as follows: Invoice Date Amount July 2000 $15,500 August 2000 $17,000 September 2000 $17,000 October 2000 $17,000 Invoices will be sent according to the above schedule and payments are due 30 days from the date of the invoice. We reserve the right to suspend work if your account becomes 90 days or more overdue and work may not be resumed until your account is paid in full. We will notify you promptly of any circumstances we encounter that could significantly affect our estimate and establish a new fee estimate before we incur the additional costs. Additional services provided beyond the described scope of services will be billed separately. ******** 10 We appreciate the opportututy m be of service to Orange County. If you have nay questions, please let us lmow. The Board of County Commissioners May 24, 2000 Page 8 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, Dd.~lG.~~wd.. uP Accepted and agreed to by: ORANGE COUNTY By: Title: 11 Date: