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2011-18 Independent Auditor AgreementRESOLUTION 2011-18 • A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA, EXTENDING THE VILLAGE'S AGREEMENT WITH NOWLEN, HOLT & MINER, P.A. FOR INDEPENDENT ANNUAL AUDITING SERVICES; APPROVING A FIRST AMENDMENT TO AGREEMENT FOR AUDITING SERVICES AND AUTHORIZING THE MAYOR AND VILLAGE CLERK TO EXECUTE SAME; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, through the adoption of Resolution 2006-76 on September 28, 2006, the Village Council approved an Agreement for Auditing Services for Nowlen, Holt and Miner to provide auditing services to the Village through Fiscal Year 2010; and WHEREAS, as authorized by Section 218.391(8), Florida Statutes, the Village Audit Committee has recommended extending the Village's Agreement with Nowlen, Holt & Miner for an additional five years; and WHEREAS, the Village Council determines that the extension of the Village's Agreement with Nowlen, Holt & Miner is in the best interests of the Village and its residents. NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA as follows: ~~ Section 1. The foregoing recitals are ratified as true and incorporated herein. Section 2. The Village Council hereby approves the Amendment to Agreement for Auditing Services with Nowlen, Holt & Miner, P.A., a copy of which is attached hereto and incorporated herein by reference, and authorizes the Mayor and Village Clerk to execute the Amendment on behalf of the Village. Section 3. All resolutions or parts of resolution in conflict with this Resolution are hereby repealed to the extent of such conflict. Section 4. This Resolution shall be effective immediately upon adoption. PASSED AND ADOPTED THIS 12th DAY OF MAY, 2011. (Village Seal) ATTEST: __ ~ ~ %~'~~ VILLAGE CLERK MAYOR AMENDMENT TO AGREEMENT FOR AUDITING SERVICES THIS AMEMENT TO AGREEMENT FOR AUDITING SERVICES is made and entered into this~~ day of May, 2011, by and between the Village of North Palm Beach, Florida, a Florida municipal corporation ("Village") and Nowlen Holt & Miner, P.A., a Florida corporation ("NH&M"). WITNESSETH: WHEREAS, based on a Request for Proposal for Annual Independent Auditing Services dated July 18, 2006 ("RFP") and the recommendation of the Village Audit Committee, the Village Council selected NH&M to perform such services on behalf of the Village; and WHEREAS, the Village entered into an Agreement for Auditing Services dated September 28, 2006 ("Agreement"), where by NH&M would provide independent auditing services through Fiscal Year 2010; and WHEREAS, in lieu of instituting the auditor selection procedures outlined in Chapter 218, Florida Statutes, the Village has elected to extend its Agreement with NH&M as authorized by Section 218.391(8), Florida Statutes. NOW, THEREFORE, in consideration of the mutual representations and obligations set forth herein and in the Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. The Village hereby extends its Agreement with NH&M to supply annual independent services on behalf of the Village. 2. NH&M agrees to perform such services as outlined in the Agreement, provided, however, that the Engagement Letter dated May 2, 2011, attached hereto as Exhibit "1" and incorporated herein by reference, shall be substituted for the Engagement Letter referenced in the Agreement. The provisions of the RFP incorporated into the Agreement shall remain in full force and effect, and as stated in the Agreement, in the event of a conflict between the terms of the RFP and the Engagement Letter, the terms of the RFP shall control. 3. All other provisions of the Agreement, to the extent not expressly modified herein, shall remain in full force and effect. [Remainder of page intentionally blank] Page 1 of 2 IN WITNESS WHEREOF, the parties have executed this Amendment to Agreement for Auditing Services as of the date first above written. VILLAGE OF NORTH PALM BEACH By: ~~~ D YL AU Y, Mayor (VILLAGE SEAL)"~ ~ ~. ATTEST: ~,~ By: ILL GE CLERK Witnesses: ~~ ~~ ~~ ~'os~ ~ ~co l~~o~ Print Name: o o_ ~~ ~~ ~ ~ ~ Print Name: NOWLEN, HOLT & MINER, P.A. By: ~° Name:Edward T. Holt Title:President Page 2 of 2 ~~ . \ ~ fv J~ ~ ~ s P.A. HOLT & MINER NOWLEN - , , O~ u~~~f ] CERTIFIED PUBLIC ACCOUNTANTS EVERETT B. NOWLEN (1930-1984), CPA EDWARD T HOLT, CPA WILLIAM 8. MINER, CPA ROBERT W. HENDRIX, JR., CPA WEST PALM BEACH OFFICE JANET R. BARICEVICH, CPA 215 FIFTH STREET, SUITE 200 POST OFFICE BOX 347 WEST PALM BEACH, FLORIDA 33402-0347 TELEPHONE (561) 659-3060 KATHLEEN A. MINER, CPA FAX (561) 835-0628 TERRY L. MORTON, JR., CPA WWWNHMCPA.COM N. RONALD BENNETT, CPA J. MICHAEL STEVENS, CPA ALEXIA G. VARGA, CPA BRIAN J. BRESCIA, CFP', CPA KARA D. PETERSON, CPA EDWARD T HOLT, JR., CPA May 2, 2011 e of North Palm Beach Villa g BELLE GLADE OFFICE Finance Director c/o Samia Janjua 333 S.E. 2nd STREET , POST OFFICE BOX 338 Highway 1 501 U S BELLEG D I . . EPHONE ( 61)996-5612 TE North Palm Beach, FL 33408 FAX (561) 996-6248 Dear Ladies and Gentlemen: We are pleased to confirm our understanding of the services we are to provide the Village of North Palm Beach, Florida for the year ended September 30, 2011, with an option for the years ended September 30, 2012, September 30, 2013, September 30, 2014, and September 30, 2015. We will audit the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information, which collectively comprise the basic financial statements of the Village of North Palm Beach, Florida as of and for the year ended September 30, 2011. Accounting standards generally accepted in the United States provide for certain required supplementary information (RSI), such as management's discussion and analysis (MD&A), to supplement the Village of North Palm Beach, Florida's basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. As part of our engagement, we will apply certain limited procedures to the Village of North Palm Beach, Florida's RSI in accordance with auditing standards generally accepted in the United States of America. These limited procedures will consist of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, ands other knowledge we obtained during our audit of the basic financial statements. We will not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. The following RSI is required by generally accepted accounting principles and will be subjected to certain limited procedures, but will not be audited: 1) Management's Discussion and Analysis. 2) Budgetary Comparison Schedule -General Fund 3) Schedule of Funding Progress -General Employees Retirement Fund 4) Schedule of Employer and State Contributions 5) Schedule of Funding Progress - OPEB AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL May 2, 2011 Page 2 Supplementary information other than RSI also accompanies the Village of North Palm Beach, Florida's financial statements. We will subject the Combining and Individual Fund Financial Statements and Schedules to the auditing procedures applied in our audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America and will provide an opinion on it in relation to the financial statements as a whole. The Statistical Section and Introductory Section accompanying the financial statements will not be subjected to the auditing procedures applied in our audit of the financial statements, and for which our auditor's report will not provide an opinion or any assurance. Audit Objectives The objective of our audit is the expression of opinions as to whether your basic financial statements are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles and to report on the fairness of the supplementary information referred to in the second paragraph when considered in relation to the financial statements as a whole. Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America and the standards for .financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and will include tests of the accounting records of the Village of North Palm Beach, Florida and other procedures we consider necessary to enable us to express such opinions. If our opinions on the financial statements are other than unqualified, we will fully 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 also provide a report (that does not include an opinion) on internal control related to the financial statements and compliance with laws, regulations, and the provisions of contracts or grant agreements, noncompliance with which could have a material effect on the financial statements as required by Government Auditing Standards. The report on internal control and compliance will include a statement that the report is intended solely for the information and use of management, the body or individuals charged with governance, others within the entity, and specific legislative or regulatory bodies and is not intended to be and should not be used by anyone other than these specified parties. If during our audit we become aware that the Village of North Palm Beach, Florida is subject to an audit requirement that is not encompassed in the terms of this engagement, we will communicate to management and those charged with governance that an audit in accordance with U.S. generally accepted auditing standards and the standards for financial audits contained in Government Auditing Standards may not satisfy the relevant legal, regulatory, or contractual requirements. Management Responsibilities Management is responsible for the basic financial statements and all accompanying information as well as all representations contained therein. As part of the audit, we will assist with preparation of your financial statements and related notes. You are responsible for making all management decisions and May 2, 2011 Page 3 performing all management functions relating to the financial statements and related notes and for accepting full responsibility for such decisions. You will be required to acknowledge in the management representation letter our assistance with preparation of the financial statements and that you have reviewed and approved the financial statements and related notes prior to their issuance and have accepted responsibility for them. Further, you are required to designate an individual with suitable skill, knowledge, or experience to oversee any nonaudit services we provide and for evaluating the adequacy and results of those services and accepting responsibility for them. Management is responsible for establishing and maintaining effective internal controls, including monitoring ongoing activities, to help ensure that appropriate goals and objectives are met; for the selection and application of accounting principles; and for the fair presentation in the financial statements of the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village of North Palm Beach, Florida and the respective changes in financial position and cash flows, where applicable, in conformity with U.S. generally accepted accounting principles. Management is also responsible for making all financial records and related information available to us and for ensuring that management and financial information is reliable and properly recorded. Your responsibilities include adjusting the financial statements to correct material misstatements and for confirming to us in the representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud affecting the government involving (1) management, (2) employees who have significant roles in internal control, and (3) others where the fraud or illegal acts could have a material effect on the financial statements. Your responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud affecting the government received in communications from employees, former employees, grantors, regulators, or others. In addition, you are responsible for identifying and ensuring that the entity complies with applicable laws, regulations, contracts, agreements, and grants for taking timely and appropriate steps to remedy any fraud, illegal acts, violations of contracts or grant agreements, or abuse that we may report. You are responsible for the preparation of the supplementary information in conformity with U.S. generally accepted accounting principles. You agree to include our report on the supplementary information in any document that contains and indicates that we have reported on the supplementary information. Management is responsible for establishing and maintaining a process for tracking the status of audit findings and recommendations. Management is also responsible for identifying for us previous financial audits, attestation engagements, performance audits or other studies related to the objectives discussed in the Audit Objectives section of this letter. This responsibility includes relaying to us corrective actions taken to address significant findings and recommendations resulting from those audits, attestation engagements, performance audits, or other studies. You are also responsible for providing management's views on our current findings, conclusions, and recommendations, as well as your planned corrective actions, for the report, and for the timing and format for providing that information. May 2, 2011 Page 4 Audit Procedures-General An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. We will plan and perform the audit to obtain reasonable rather than absolute assurance about whether the financial statements are free of material misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the entity or to acts by management or employees acting on behalf of the entity. Because the determination of abuse is subjective, Government Auditing Standards do not expect auditors to provide reasonable assurance of detecting abuse. Because an audit is designed to provide reasonable, but not absolute assurance and because we will not perform a detailed examination of all transactions, there is a risk that material misstatements may exist and not be detected by us. In addition, an audit is not designed to detect immaterial misstatements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements. However, we will inform you of any material errors and any fraudulent financial reporting or misappropriation of assets that come to our attention. We will also inform you of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not extend to later periods for which we are not engaged as auditors. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, funding sources, creditors, and financial institutions. We will request written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will require certain written representations from you about the financial statements and related matters. Audit Procedures-Internal Controls Our audit will include obtaining an understanding of the entity and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit procedures. Tests of controls maybe performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the financial statements. Our tests, if performed, will be less in scope than would be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to Government Auditing Standards. An audit is not designed to provide assurance on internal control or to identify significant deficiencies. However, during the audit, we will communicate to management and those charged with governance internal control related matters that are required to be communicated under AICPA professional standards and Government Auditing Standards. May 2, 2011 Page 5 Audit Procedures-Compliance As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of the Village of North Palm Beach, Florida's compliance with the provisions of applicable laws, regulations, contracts, agreements, and grants. However, the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an opinion in our report on compliance issued pursuant to Government Auditing Standards. EngLgement Administration, Fees, and Other We will provide one electronic and thirty bound copies of our reports to the Village; however, management is responsible for distribution of the reports and the financial statements. Unless restricted by law or regulation, or containing privileged and confidential information, copies of our reports are to be made available for public inspection. The audit documentation for this engagement is the property of Nowlen Holt and Miner, P.A. and constitutes confidential information. However, pursuant to authority given by law or regulation, we may be requested to make certain audit documentation available to a federal or state agency providing direct or indirect funding, the Florida Auditor General, or the U.S. Government Accountability Office for purposes of a quality review of the audit, to resolve audit findings, or to carry out oversight responsibilities. We will notify you of any such request. If requested, access to such audit documentation will be provided under the supervision of Nowlen Holt and Miner, P.A personnel. Furthermore, upon request, we may provide copies of selected audit documentation to the aforementioned parties. These parties may intend, or decide, to distribute the copies or information contained therein to others, including other governmental agencies. The audit documentation for this engagement will be retained for a minimum of five years after the report release date or for any additional period requested by a grantor agency. If we are aware that a federal awarding agency or auditee is contesting an audit finding, we will contact the party(ies) contesting the audit finding for guidance prior to destroying the audit documentation. Edward T. Holt is the engagement partner and is responsible for supervising the engagement and signing the reports or authorizing another individual to sign them. Our fee for these services will be in accordance with the attached schedule. Our standard hourly rates vary according to the degree of responsibility involved and the experience level of the personnel assigned to your audit. Our invoices for these fees will be rendered each month as work progresses and are payable on presentation. The above fee is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. If significant additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the additional costs. May 2, 2011 Page 6 Government Auditing Standards require that we provide you with a copy of our most recent external peer review report and any letter of comment, and any subsequent peer review reports and letters of comment received during the period of the contract. Our 2009 peer review report accompanies this letter. We appreciate the opportunity to be of service to the Village of North Palm Beach, Florida and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. Very truly yours, Nowlen Holt and Miner, P.A. RESPONSE: This letter correctly sets forth the understanding of Village of North Palm Beach, Florida. By: Darryl Aubrey ayor Date: ~~~`~~`~ SCHEDULE OF PROFESSIONAL FEES AND EXPNESES FOR THE AUDIT OF THE SEPTEMBER 30, 2011-2015 FINANCIAL STATEMENTS: SUPPORTING SCHEDULE FOR PROFESSIONAL AUDIT SERVIES VII,LAGE OF NORTH PALM BEACH, FLORIDA Discounted Team Member Hourly Rate* Partner $ 255 Manager 185 Supervisor 175 Senior 130 Staff 105 Support 70 * Rates subject to an annual 3% increase, the hourly rates are as in the original proposal increased by 3% per year. TOTAL PRICE FOR AUDIT SERVICES Friday, September 30, 2011 $ 28,800 ** Optional Years Sunday, September 30, 2012 29,600 Monday, September 30, 2013 30,500 Tuesday, September 30, 2014 31,500 Wednesday, September 30, 2015 32,500 ** The audit fee did not increase from 2010. NOTES: 1. Price Proposal assumes that no significan audit adjustments will be necessary 2. The hourly rates presented above will be applicable to any additional professional services the Village may require during the above contract years. 3. This price does not include a Single Audit fee. If required, the fee would not be more than $5,400 per major program for years 2011-2015. 0 certif ed public accountants System Review Report December 4, 2009 To the Shareholders of Nowlen, Holt & Miner, P.A. and the Peer Review Committee of the Florida Institute of Certified Public Accountants We have reviewed the system of quality control for the accounting and auditing practice of Nowlen, Holt & Miner, P.A. (the firm) in effect for the year ended May 31, 2009. 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. 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. 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. The nature, objectives, scope, limitations of, and the procedures performed in a System Review are described in the standards at www.aicpa.or~/prsummary. As required by the standards, engagements selected for review included engagements performed under the Government Auditing Standards and audits of employee benefit plans. In our opinion, the system of quality control for the accounting and auditing practice of Nowlen, Holt & Miner, P.A. in effect for the year ended May 31, 2009, 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(ies) orfail. Nowlen, Holt & Miner, P.A. has received a peer review rating of pass. Johnson, Price & Sprinkle, PA 79 Woodfin Place, Suite 300 Asheville, NC 28801 828.254.2374 ~ Fax 252.9994 • vvww.jpspa.com A Member of the CPAmerica International Network.