HomeMy WebLinkAbout04-05-2017 Agreement between SLO city and Glenn, Burdette Attest CorporationAGREEMENT
THIS AGREEMENT is made and entered into in the City of San Luis Obispo and ed Z ,
by and between the CITY OF SAN LUIS OBISPO, a municipal corporation, hereinafter referred to as
City, and GLENN, BURDETTE ATTEST CORPORATION, hereinafter referred to as Contractor.
WITNESSETH:
WHEREAS, on April 5, 2011, City requested proposals for auditing services per Specification
No. 91067.
WHEREAS, pursuant to said request, Contractor submitted a proposal which was accepted by
City for said auditing services through June 30, 2018.
WHEREAS, a prior agreement that was entered into between City and Contractor expired on
June 30, 2016.
WHEREAS, the City wishes to continue to contract for Contractor's services through the
remainder of the period contemplated in Specification No. 91067.
NOW THEREFORE, in consideration of their mutual promises, obligations, and covenants
hereinafter contained, the parties hereto agree as follows:
1. TERM. The term of this Agreement shall be from July 1, 2016 until June 30, 2018.
2. INCORPORATION BY REFERENCE. City Specification No. 91067 and
Contractor's proposal dated April 27, 2011 are hereby incorporated in and made a part of this Agreement.
Additionally, Contractor's Engagement Letter, dated February 24, 2017 and attached hereto is hereby
incorporated and made part of this Agreement.
3. CITY'S OBLIGATIONS. For providing auditing services as specified in this
Agreement, City will pay and Contractor shall accept therefore compensation as stated in Contractor's
Engagement Letter, dated February 24, 2017, and in no event shall exceed $158,800.
4. CONTRACTOR'S OBLIGATIONS. For and in consideration of the payments and
agreements hereinbefore mentioned to be made and performed by City, Contractor agrees with City to do
everything required by this Agreement and the said Specification.
5. AMENDMENTS. Any amendment, modification or variation from the terms of this
Agreement shall be in writing and shall be effective only upon approval by the City Manager of the City.
6. COMPLETE AGREEMENT. This written Agreement, including all writings
specifically incorporated herein by reference, shall constitute the complete agreement between the parties
hereto. No oral agreement, understanding, or representation not reduced to writing and specifically
incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding, or
representation be binding upon the parties hereto.
7. NOTICE. All written notices to the parties hereto shall be sent by United States mail,
postage prepaid by registered or certified mail addressed as follows:
City City Clerk
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
Contractor Al Eschenbach, CPA
Glenn, Burdette, Phillips & Bryson
Certified Public Accountants
A Professional Corporation
1150 Palm Street
San Luis Obispo, CA 93401
Email: al.eschenbach@glennburdette.com
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AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant
that each individual executing this agreement on behalf of each party is a person duly authorized and
empowered to execute Agreements for such party.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day
and year first above written.
ATTEST:
111 till
City Clerk
CITY OF SAN LUIS OBISPO
By:
City Man ger
O.
r
0 GLENN BURDETTE
CERTIFIED PUBLIC ACCOUN T A N T S
Audit Engagement Letter
February 24, 2017
The Honorable City Council
City of San Luis Obispo
c/o Xenia Bradford
990 Palm Street
San Luis Obispo, California 93401
We are pleased to confirm our understanding of the services we are to provide the City of San Luis Obispo
for the years ended June 30, 2017 and 2018. We will audit the financial statements of the governmental
activities, the business -type activities, each major fund, and the aggregate remaining fund information,
including the related notes to the financial statements, which collectively comprise the basic financial
statements of the City of San Luis Obispo as of and for the years ended June 30, 2017 and 2018. Accounting
standards generally accepted in the United States of America provide for certain required supplementary
information (RSI), such as management's discussion and analysis (MD&A), to supplement City of San Luis
Obispo's basic financial statements. Such information, although not 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 City of San Luis
Obispo'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 response to our inquiries,
the basic financial statements, and 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. Schedule of Revenues, Expenditures, and Changes in Fund Balances —Budget and Actual (GAAP) for
the General Fund and all other major Special Revenue Funds, if applicable
SAN LUIS OBISPO PASO ROBLES
SANTA MARIA
1150 Palm Sire..^.t 102 South Vine Street, Ste. A
2222 Soutii Eroad-,.tFy, Ste. A
Sari Luis Cbisro, CA 93401 Pc;o Roble, CA 934A6
Santa Haria, CA 93454
p 005 544 1441 p 805 237 3995
805 922 4010
GLENNBURDETTEXOM f F05 5444351 / 905 239 9332
f 005 922 4266
The Honorable City Council
City of San Luis Obispo
February 24, 2017
Page 2
3. Schedule of Funding Progress for OPEB Obligation
4. Schedule of Changes in the Net Pension Liability and Related Ratios— Miscellaneous Agent
Multiple -Employer Plan
S. Schedule of Plan Contributions— Miscellaneous Agent Multiple -Employer Plan
6. Schedule of the City's Proportionate Share of the Net Pension Liability —Safety Cost -Sharing Plans
7. Schedule of the City's Contributions —Safety Cost -Sharing Plans
We have also been engaged to report on supplementary information other than RSI that accompanies City
of San Luis Obispo's financial statements. We will subject the following supplementary information 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 in a report
combined with our auditor's report on the financial statements:
1. Schedule of Expenditures of Federal Awards
2. Half Percent Sales Tax Measure Funding Schedule
3. Combining and individual non -major fund financial statements and schedules
The following other information accompanying the financial statements will not be subjected to the
auditing procedures applied in our audit of the financial statements, and our auditor's report will not
provide an opinion or any assurance on that other information.
1. Introductory section
2. Statistical section
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 taken as a whole. The objective also includes reporting
on -
The Honorable City Council
City of San Luis Obispo
February 24, 2017
Page 3
ts Internal control over financial reporting and compliance with the provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a material effect on the
financial statements in accordance with Government Auditing Standards.
41 Internal control over compliance related to major programs and an opinion (or disclaimer of
opinion) on compliance with federal statutes, regulations, and the terms and conditions of federal
awards that could have a direct and material effect on each major program in accordance with the
Single Audit Act Amendments of 1996 and Title 2 U.S. C ode of Federal Regulations (CFR) Part 200,
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance).
The Governmental Auditing Standards report on internal control over financial reporting and on compliance
and other matters will include a paragraph that states (1) that the purpose of the report is solely to
describe the scope of testing of internal control and compliance and the results of that testing, and not to
provide an opinion on the effectiveness of the entity's internal control or on compliance, and (2) that the
report is an integral part of an audit performed in accordance with Government Auditing Standards in
considering the entity's internal control and compliance . The Uniform Guidance report on internal control
over compliance will include a paragraph that states that the purpose of the report on internal control over
compliance is solely to describe the scope of testing of internal control over compliance and the results of
that testing based on the requirements of the Uniform Guidance. Both reports will state that the report is
not suitable for any other purpose.
Our audit will be conducted in accordance with auditing standards generally accepted in the United States
of America; the standards for financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; the Single Audit Act Amendments of 1996; and the provisions of
the Uniform Guidance, and will include tests of accounting records, a determination of major program(s) in
accordance with the Uniform Guidance and the applicable laws, rules and regulations of the Transportation
Development Act (TDA) and will include tests of accounting records and other procedures we consider
necessary to enable us to express such opinions. We will issue written reports upon completion of our
Single Audit. Our reports will be addressed to the Honorable City Council of the City of San Luis Obispo. We
cannot provide assurance that unmodified opinions will be expressed. Circumstances may arise in which it
is necessary for us to modify our opinions or add emphasis -of -matter or other -matter paragraphs. If our
opinions are other than unmodified, we will discuss the reasons with you in advance. If, for any reason, we
are unable to complete the audit or are unable to form or have not formed opinions, we may decline to
express opinions or issue reports, or may withdraw from this engagement.
The Honorable City Council
City of San Luis Obispo
February 24, 2017
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. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of significant accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements. 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 government or to
acts by management or employees acting on behalf of the government. Because the determination of
abuse is subjective, Government Auditing Standards do not expect auditors to provide reasonable
assurance of detecting abuse.
Because of the inherent limitations of an audit, combined with the inherent limitations of internal control,
and because we will not perform a detailed examination of all transactions, there is a risk that material
misstatements or noncompliance may exist and not be detected by us, even though the audit is properly
planned and performed in accordance with U.S. generally accepted accounting standards and Government
Auditing Standards. 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 or major programs. However, we will inform the appropriate level of management of any
material errors, any fraudulent financial reporting, or misappropriation of assets that come to our
attention. We will also inform the appropriate level of management of any violations of laws or
governmental regulations that come to our attention, unless clearly inconsequential, and of any material
abuses that comes to our attention. We will include such matters in the reports required for a Single Audit.
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 your responsibilities for the financial
statements; schedule of expenditures of federal awards; federal award programs; compliance with laws,
The Honorable City Council
City of San Luis Obispo
February 24, 2017
Page 5
regulations, contracts, and grant agreements; and other responsibilities required by generally accepted
auditing standards.
Audit Procedures - Internal Controls
Our audit will include obtaining an understanding of the government 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 may be 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.
As required by the Uniform Guidance, we will perform test of controls over compliance to evaluate the
effectiveness of the design and operation of controls that we consider relevant to preventing or detecting
material noncompliance with compliance requirements applicable to each major federal award program.
However, our tests will be less in scope than would be necessary to render an opinion on those controls
and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to the
Uniform Guidance.
An audit is not designed to provide assurance on internal control or to identify significant deficiencies or
material weaknesses. 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, Government Auditing Standards, and the Uniform Guidance.
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 City of San Luis Obispo's compliance with the provisions of
applicable laws, regulations, contracts and agreements, including grant agreements. However, the
objective of those procedures 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.
The Honorable City Council
City of San Luis Obispo
February 24, 2017
Page 6
The Uniform Guidance requires that we also plan and perform the audit to obtain reasonable assurance
about whether the auditee has complied with applicable laws and regulations and the provisions of
contracts and grant agreements applicable to major programs. Our procedures will consist of test of
transactions and other applicable procedures described in the OMB Compliance Supplement for the types
of compliance requirements that could have a direct and material effect on each of City of San Luis Obispo's
major programs. The purpose of those procedures will be to express an opinion on City of San Luis Obispo's
compliance with requirements applicable to each of its major programs in our report on compliance issued
pursuant to the Uniform Guidance.
Other Services
We will also assist in preparing the financial statements, schedule of expenditures of federal awards, and
related notes of the City of San Luis Obispo in conforming with U.S. generally accepted accounting
principles and the Uniform Guidance based on information provided to you. These nonaudit services do
not constitute an audit under Governmental Auditing Standards and such services will not be conducted in
accordance with Government Auditing Standards. We will perform the services in accordance with
applicable professional standards. The other services are limited to the financial statements, schedule of
expenditures of federal awards, and related notes services previously defined. We, in our sole professional
judgment, reserve the right to refuse to perform any procedure or take any action that could be construed
as assuming management responsibilities.
Management Responsibilities
Management is responsible for (1) establishing and maintaining effective internal controls, including
internal controls over compliance, and for evaluating and monitoring ongoing activities, to help ensure that
appropriate goals and objectives are met; (2) following laws and regulations; (3) ensuring that there is
reasonable assurance that government programs are administered in compliance with compliance
requirements; and (4) ensuring that management is reliable and financial information Is reliable and
properly reported. Management is also responsible for implementing systems designed to achieve
compliance with applicable laws, regulations, contracts, and grant agreements. You are also responsible for
the selection and application of accounting principles; for the preparation and fair presentation of the
financial statements in conformity with U.S. generally accepted accounting principles; and for compliance
with applicable laws and regulations and the provisions of contracts and grant agreements.
The Honorable City Council
City of San Luis Obispo
February 24, 2017
Page 7
Management is also responsible for making all financial records and related information available to us for
the accuracy and completeness of that information. You are also responsible for providing us with (1)
access to all information of which you are aware that is relevant to the preparation and fair presentation of
the financial statements, (2) access to personnel, accounts, books, records, supporting documentation, and
other information as needed to perform an audit under the Uniform Guidance, (3) additional information
that we may request for the purpose of the audit, and (3) unrestricted access to persons within the
government from whom we determine it necessary to obtain audit evidence.
Your responsibilities include adjusting the financial statements to correct material misstatements and
confirming to us in the management representation letter that the effects of any uncorrected
misstatements aggregated by us during the current engagement and pertaining to the 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
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 government complies with applicable laws, regulations,
contracts, agreements, and grants. Management is also responsible for taking timely and appropriate steps
to remedy fraud and noncompliance with provisions of laws, regulations, contracts, and grant agreements,
or abuse that we report. Additionally, as required by the Uniform Guidance, it is management's
responsibility to follow up and take corrective action on reported audit findings and to prepare a summary
schedule of prior audit findings and a corrective action plan. The summary schedule of prior audit findings
should be available for our review during audit fieldwork.
You are responsible for identifying all federal awards received and understanding and complying with the
compliance requirements and for the preparation of the schedule of expenditures of federal awards
(including notes and noncash assistance received) in conformity with the Uniform Guidance. You agree to
include our report on the schedule of expenditures of federal awards in any document that contains and
indicates that we have reported on the schedule of expenditures of federal awards. You also agree to make
the audited financial statements readily available to intended users of the schedule of expenditures of
federal awards no later than the date of the schedule of expenditures of federal awards is issued with our
The Honorable City Council
City of San Luis Obispo
February 24, 2017
Page 8
report thereon. Your responsibilities included acknowledging to us in the written representation letter that
(1) you are responsible for the presentation of the schedule of expenditures of federal awards in
accordance with the Uniform Guidance; (2) you believe the schedule of expenditures of federal awards,
including its form and content, is fairly presented in accordance with the Uniform Guidance; (3) the
methods of measurement or presentation have not changed from those used in the prior period (or, if they
have changed, the reasons for such changes); and (4) you have disclosed to us any significant assumptions
or interpretations underlying the measurement or presentation of the schedule of expenditures of federal
awards.
You are also responsible for the preparation of the other supplementary information, which we have been
engaged to report on, 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. You also agree to include the audited financial
statements with any presentation of the supplementary information that includes our report. Your
responsibilities included acknowledging to us in the written representation letter that (1) you are
responsible for the presentation of the supplementary information in accordance with GAAP; (2) you
believe the supplementary information, including its form and content, is fairly presented in accordance
with GAAP; (3) the methods of measurement or presentation have not changed from those used in the
prior period (or, if they have changed, the reasons for such changes); and (4) you have disclosed to us any
significant assumptions or interpretations underlying the measurement or presentation of 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 and providing report copies
of 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 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.
You agree to assume all management responsibilities relating to the financial statements, schedule of
expenditures of federal awards, related notes, and any other nonaudit services we provide. You will be
required to acknowledge in the management representation letter our assistance with preparation of the
financial statements, schedule of expenditures of federal awards, and related notes and that you have
reviewed and approved the financial statements, schedule of expenditures of federal awards, and related
The Honorable City Council
City of San Luis Obispo
February 24, 2017
Page 9
notes prior to their issuance and have accepted responsibility for them. Further, you agree to oversee the
nonaudit services by designating an individual, preferably from senior management, with suitable skill,
knowledge, or experience; evaluate the adequacy and results of those services; and accept responsibility
for them.
With regard to electronic dissemination of audited financial statements, including financial statements
electronically on your website, you understand that electronic sites are means to distribute information
and, therefore, we are not required to read the information contained on these sites or consider the
consistency of other information in the electronic site with the original document. You agree to indemnify
Glenn Burdette from any and all claims that may arise from any differences between the electronic version
of the financial statements and audit report presented on your web site, now and in the future, and the
signed version of the financial statements and audit report provided to management by Glenn Burdette.
Timing of Engagement
We will work with management to determine mutually agreed upon fieldwork dates. The timing of our
work is dependent on the timely receipt of the information we request from you.
We ask that you inform us as soon as possible if you will not be ready on the date(s) agreed upon. If you
request that we reschedule our fieldwork, we will do our best to accommodate the changes. However, we
cannot guarantee timely completion due to other previously scheduled engagements.
Audit Administration, Fees, and Other
We understand that your employees will prepare all cash, accounts receivable or other confirmations we
request and will locate any documents selected by us for testing.
At the conclusion of the engagement, we will complete the appropriate sections of the Data Collection
Form that summarizes our audit findings. It is management's responsibility to submit the reporting package
(including financial statements, schedule of expenditures of federal awards, summary schedule of prior
audit findings, auditors' reports, and corrective action plan) along with the Data Collection Form to the
federal audit clearinghouse. We will coordinate with you the electronic submission and certification. If
applicable, we will provide copies of our report for you to include with the reporting package you will
submit to pass-through entities. The Data Collection Form and the reporting package must be submitted
within the earlier of 30 days after receipt of the auditor's reports or nine months after the end of the audit
period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audits.
The Honorable City Council
City of San Luis Obispo
February 24, 2017
Page 10
We will provide copies of our reports to you; however, management is responsible for distribution of the
reports and the financial statements. Unless restricted bylaw 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 Glenn Burdette and constitutes
confidential information. However, subject to applicable laws and regulations, audit documentation and
appropriate individuals will be made available upon request and in a timely manner to City of San Luis
Obispo's cognizant agency or its designee, a federal agency providing direct or indirect funding, 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 underthe supervision of Glenn Burdette 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.
It is our policy to keep records related to this engagement for seven (7) years after the report release or for
any additional period requested by City of San Luis Obispo's cognizant agency, oversight agency for audit,
or pass-through entity. If we are aware that a federal awarding agency, pass-through entity, 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. However, we do not keep any original client records, so we will return
those to you at the completion of the services rendered under this engagement. When records are
returned to you, it is your responsibility to retain and protect your records for possible future use, including
potential examination by any government or regulatory agencies. By your signature below, you
acknowledge and agree that upon the expiration of the seven (7) year period, Glenn Burdette shall be free
to destroy our records related to this engagement.
Allen E. Eschenbach is the engagement partner and is responsible for supervising the engagement and
signing or authorizing another qualified firm representative to sign the report.
Our fee for the audit and other services for the year ended June 30, 2017 will be $40,700 for the basic
financial statements and GANN Appropriations Limit (which is covered under a separate agreed -upon -
procedures engagement letter); $10,300 for the compilation of the CAFR; $5,250 for TDA financial audit and
compilation report; $7,500 for Single Audit Act report; and $4,600 for Whale Rock Commission audit report,
totaling $68,350. Our fee for the audit and other services for the year ended June 30, 2018 will be $42,000
for the basic financial statements and GANN Appropriations Limit (which is covered under a separate
agreed -upon -procedures engagement letter); $10,600 for the compilation of the CAFR; $5,400 for TDA
The Honorable City Council
City of San Luis Obispo
February 24, 2017
Page 11
financial audit and compilation report; $7,725 for Single Audit Act report; and $4,725 for Whale Rock
Commission audit report, totaling $70;450.
These estimates are based upon our initial analysis of the complexity of the work to be performed and the
experience level of the staff to be assigned. The estimate is based on maximum audit efficiencies providing
for participation and anticipated cooperation from your personnel and the assumption that unexpected
circumstances will not be encountered. It includes only our work associated with the audit of the financial
statements of City of San Luis Obispo. Additional fees will be added if we have to perform additional
services due to the incomplete or untimely receipt by us of the information on the schedule requests list,
accounts not being fully adjusted the day we commence fieldwork, or timing related inefficiencies. In the
event of a change in the scope of our audit resulting from any changes in facts and circumstances, we will
discuss any additional fees with you as soon as is reasonably possible after we become aware of the
change. If appropriate, a change order will be issued.
The estimate does not include significant assistance in applying any new accounting standards that impact
the reports. Such additional services would be billed separately as accounting or consulting services.
You understand that services may be provided by a non -licensee owner of the firm. Payment for service is
due when rendered and interim billings may be submitted as work progresses and expenses are incurred.
We reserve the right to stop work on any account that is 60 days past due, in accordance with our firm's
stated collection policy. You acknowledge and agree that we are not required to continue work in the
event of failure to pay on a timely basis for services rendered as required bythis engagement letter. We
shall not be liable to you for any damages that occur as a result of our ceasing to render services. Any past
due fee under this agreement shall bear late charges at the rate of 1.5 percent per month (18.00 annual
percentage rate) on any unpaid balance.
Any work performed during the audit will be billed at our standard hourly rates. These are currently as
follows:
Principals
Senior Managers
Managers
Supervisors
Senior Professional Associates
Professional Associates
$ 350/hour
Entry Level Professionals -11 Yr
290/hour
Administrative Associates
265/hour
Support Associates
200/hour
Human Resources Consulting
175/hour
Credit & Collection Services
140/hour
Litigation Testimony/Support
$ 120/hour
95/hour
85/hour
265/hour
265/hour
450/400/hour
The Honorable City Council
City of San Luis Obispo
February 24, 2017
Page 12
If any dispute arises among the parties, they agree to try first in good faith to settle the dispute by
mediation administered by the American Arbitration Association (AAA) under its Rules for Professional
Accounting and Related Services Disputes, before resorting to litigation or arbitration. The mediation shall
take place in San Luis Obispo, California at a date and time mutually convenient to the parties. The cost of
any mediation proceeding shall be shared equally by all parties. Evidence of anything said, any admission
made, or any documents prepared in the course of the mediation shall not be admissible in evidence, or
subject to discovery in any arbitration or court proceeding pursuant to California Evidence Code Section
1152.5. All unresolved disputes shall then be decided by final and binding arbitration in accordance with
the Rules for Professional Accounting and Related Services Disputes of the AAA. The arbitration shall be
held in San Luis Obispo, California unless otherwise agreed in writing between the parties. Fees charged by
arbitrators or the AAA shall be shared equally by all parties. In agreeing to arbitration, we both
acknowledge that in the event of a dispute over fees charged by the accountant, each of us is giving up the
right to have the dispute decided in a court of law before a judge or jury and instead we are accepting the
use of arbitration for resolution.
As your auditors, we are required to keep all information about our engagement confidential; so, we will
not disclose any information about you unless we have your approval or are required/permitted by law.
This applies even if you are no longer a client.
As your auditors, we are committed to the safekeeping of your confidential information and we maintain
physical, electronic, and procedural safeguards to protect your information.
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 2014 peer review report accompanies this letter.
Electronic Communication
In the interest of facilitating our services to your company, we may communicate by facsimile transmission
or send electronic mail over the Internet. Such communications may include information that is
confidential to your company. Our firm employs measures in the use of facsimile machines and computer
technology designed to maintain data security. While we will use reasonable efforts to keep such
communications secure in accordance with our obligations under applicable laws and professional
standards, you recognize and accept that we have no control over the unauthorized interception of these
communications once they have been sent, and consent to our use of these electronic devices during this
engagement.
The Honorable City Council
City of San Luis Obispo
February 24, 2017
Page 13
We appreciate the opportunity to be of service to the City of San Luis Obispo 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 and return the
original letter to us. A copy is enclosed for your files.
Sincerely,
omp_
Allen E. Eschenbach, CPA
Principal
for
Glenn Burdette Attest Corporation
RESPONSE:
This letter correctly sets forth the understanding of the City of San Luis Obispo.
Officer signature:
Title:
Date:
6170.01
Cliftorkarsor-Aller, LLP
CLAconnect.com
CliftonLarsonAllen
SYSTEM REVIEW REPORT
To the Principals of Glenn Burdette Attest Corporation
and the National Peer Review Committee
We have reviewed the system of quality control for the accounting and auditing practice of Glenn
Burdette Attest Corporation (the firm) in effect for the year ended May 31, 2014. 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. As a
part of our peer review, we considered reviews by regulatory entities, If applicable, in determining the
nature and extent of our procedures. 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.org/prsummary.
As required by the standards, engagements selected for review included engagements performed
under Government Auditing Standards and audits of employee benefit plans.
In our opinion, the system of quality control for the accounting and auditing practice of Glenn Burdette
Attestation Corporation in effect for the year ended May 31, 2014, 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), or fail. Glenn Burdette Attest Corporation has received a peer review rating of
pass.
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CliftonLarsonAllen LLP
Bellevue, Washington
November 21, 2014
`K,Mmaw M !ndrpendent member of Haile lowmztiocal
iNTeANATFONAL