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Home My WebLink About2008-027 Finance - Cherry Bekaert & Holland for Documentation of Orange Co Fiscal Processess y- Cherry, Bekaert & Holland, L.L.P. The Firm of Choice. vlralrw.cbb.com • • March 31, 2008 Mr. Gary Humphreys, Finance Director Orange County, North Carolina 200 South Cameron Street Hillsborough, North Carolina 27278 Dear Gary: 2626 Glenwood Avenue -Suite 300 Raleigh, North Carolina 27608 phone 919.782.1040 fax 919.783.0976 We look forward to providing you with accounting documentation services. This letter outlines our understanding of the terms and objectives of the engagement. Eddie Burke, Partner in the Raleigh office of Cherry Bekaert & Holland, will coordinate the delivery of our services. Summary of Services Orange County, North Carolina (the "County") has requested that Cherry, Bekaert & Holland, L.L.P. (CB&H) assist with documenting selected operating cycles as part of the County's efforts to comply with Statement on Auditing Standards 109. As requested, we have contacted the audit engagement partner for the County to identify what he would require in the way of documentation for. June 30, 2008. He requested that we document the property tax, payroll, purchasing, disbursement, receipt, food stamp, Medicaid, and budgeting cycles. This process will require that we meet and interview management and other various County employees in order to obtain the information we will need to document these processes. At the conclusion of this process, we will issue a report to the County which documents these cycles from origination to completion and will also include the material monitoring controls that are in place for each cycle. Because our work is limited in scope, our involvement and knowledge of the daily operations of the County will be limited. Because of this, there is a risk that material errors, irregularities, or illegal acts, including fraud or defalcation, may exist and may not be detected by us. The County acknowledges this fact and agrees to indemnify us should any of these situations occur. We will inform an appropriate level of management of any such matters that come to our attention. It is anticipated that the CB&H project team will have full cooperation and timely access to necessary County personnel during the course of its services. In addition, CB&H shall not be liable for any default or delay in performance of its obligations under the terms of this agreement to the extent that such default or delay is the result of (i) the failure of County to comply with any of its obligations within the terms of this agreement or (ii) the unavailability or absence of key County personnel. The services under this engagement letter will be performed in accordance with the Statement on Standards for Consulting Services (SSCS) issued by the American Institute of Certified Public Accountants (AICPA). Consulting services differ fundamentally from attestation services. In an attest service, the practitioner expresses a conclusion about the reliability of a written assertion that is the responsibility of another party, the asserter. The nature and scope of work is determined solely by the agreement between the practitioner and the client. This work is performed by the practitioner only for the use and benefit of the client. . ~.,......,~ m.~,..., BAKER TILLY INTERNATIONAL . Accordingly, our services will not constitute an audit, compilation, review or attestation service of the County's financial statements or any part thereof, as described in the pronouncements on professional standards of the AICPA. Our performance of the procedures will not result in the expression of an opinion, or any other form of assurance, on the County's financial statements or any part thereof; no an opinion or any other form of assurance on the County's internal control systems or its compliance with laws, regulations, or other matters. It is clearly understood that, while CB&H will assist the County, the ultimate responsibility for the project remains solely with the County. • Scope of Services and Project Plan We believe the tasks set forth in the following table are required in order for us to accomplish the objectives noted above. We have provided our best estimate of the hours and fees required to complete each task. Project Tasks Total Hours Estimated Fees General tannin for en a ement 30 $ 3,600 Meet with and interviews of the tax collector, tax assessor and an other relevant em to ees. Document the rocess. 60 7,200 Meet with and interviews of human resources, payroll employees, and any other relevant employees. Document the rocess. 60 7,200 Meet with and interview of purchasing department employees and any other relevant employees. Document the rocess. 50 6,000 Meet with and interview of employees involved in the cash disbursement rocess. Document the rocess. 50 6,000 Meet with and interview of employees involved in the cash recei t rocess. Document the rocess. 50 6,000 Meet with and interview of employees involved in the administration of the food stamp program. Document the rocess. 60 7,200 Meet with and interview of employees involved in the administration of the Medicaid program. Document the rocess. 60 7,200 Meet with and interview of employees involved in the County bud etin rocess. Document the rocess. 50 6,000 Develop and present final report that includes analysis of the Coun 's risk universe. 30 3,600 Total Hours and Estimated Fees 500 $60,000 The above fee estimate presumes a blended rate of approximately $120 per hour. This rate is based upon our expectation that an experienced Senior will pertorm the majority of the initial business risk • assessment given the complexity entailed in such a project. The County is responsible for the appointment of a designated individual to serve as a liaison with CB&H in coordinating the conduct of these services and communicating the results. Fees and Standard Billing Practices Our fee for this work will be 60,000 and is based on anticipated cooperation from your personnel. If there are significant changes in the scope of our work, we will discuss it with you and arrive at a new fee estimate before we incur the additional costs. Any modification to the fee shall be in writing and signed by both parties. Invoices will be submitted as the work is being done and will be billed accordingly. Payment will be due within 30 days of receipt of invoices. If billings are past due in excess of 30 days, we will stop all work until your account is brought current, or withdraw from the engagement. The County acknowledges and agrees that we are not required to continue work in the event of the County's failure to pay on a timely basis for services rendered as required by this engagement letter. The County further acknowledges and agrees that in the event we stop work or withdraw from this engagement as a result of the County's failure to pay on a timely basis for services rendered, we shall not be liable to the County for any damages that occur as a result of our ceasing to render services. Indemnification We will indemnify, defend, and hold harmless the County and its directors, officers, and employees from and against any and all claims, demands, suits, damages, costs, liabilities, expenses, including reasonable attorney's fees, or losses arising out of our gross negligence or willful misconduct. The foregoing undertakings are expressly conditioned upon the County giving us (a) prompt written notice of any such claims, damages, expenses, liabilities, costs, or losses, (b) information, assistance and cooperation in connection with the defense or settlement thereof, and (c) the opportunity to defend .through counsel solely of our choosing. We appreciate the opportunity to be of service and believe. this letter accurately summarizes the significant terms of our engagement. If the foregoing is in accordance with your understanding, please sign a copy of this letter in the space provided and return it to my attention. If you have any questions, please call Eddie Burke, at 919-782-1040. Very truly yours, CHERRY, BEKAERT ~ HOLLAND, L.L.P. Response: This letter correctly sets forth the understanding of Orange County, North Carolina. Signa Laura Blackmon, County Manager Date: ~//~/~ "'T~a i~xPrpr~eat 6aa 5~ ~reezat~ted ~~; r€r. ~~~nar reg~a'r*ed by the L~cul G~~:. r ; ll~~~ acct i; :seal C~~trol ~#, If ~X.YaCp s QtB~! ~0+7~yA