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R-38-03 Authorizing Acceptance Of Proposal From Miller, Cooper & CO., LTD. For Auditing Services For The Years Ending April 30, 2003 Through 2005RESOLUTION A RESOLUTION AUTHORIZING ACCEPTANCE OF PROPOSAL FROM MILLER, COOPER & CO., LTD. FOR AUDITING SERVICES FOR THE YEARS ENDING APRIL 30, 2003 THROUGH 2005 WHEREAS, the Village of Lemont seeks to utilize the firm of Miller, Cooper & Co., Ltd. for auditing services; and WHEREAS, Miller, Cooper & Co., Ltd. has presented a proposal to the Village of Lemont identifying the terms and conditions of the services to be provided. NOW THEREFORE BE IT RESOLVED by the President and Board of Trustees that the proposal for auditing services presented by Miller Cooper & Co., Ltd. for auditing services for the years ending April 30, 2003 through 2005, is hereby approved. PASSED AND APPROVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF LEMONT, COUNTIES OF COOK, WILL AND DUPAGE, ILLINOIS on this /2-- day of Mco) , 2003. AYES NAYS PASSED ABSENT V Debby Blatzer l/ Peter Coules (/ Brian Reaves Steven Rosendahl ,/ Ronald Stapleton Jeanette Virgilio Approved by me this 0— day of titan , 2003. CHARLENE SMOLLE , Village Clerk ARLENE SMOLLEN, Village Clerk F. PIAZZA, V rent lage P MILLER CQDPER &Co.,Ltd ACCOUNTANTS AND CONSULTANTS April 25, 2003 Village President and Board of Trustees Village of Lemont 418 Main Street Lemont, IL 60439 Attention: Jean M. Nona, Treasurer This letter is to explain our understanding of the arrangements for the services we are to perform for the Village of Lemont for the years ending April 30, 2003 through 2005. We ask that you either confirm or amend that understanding. We will perform an audit of the Village of Lemont's general purpose (or entity -wide and major fund as applicable) financial statements as of and for the years ending April 30, 2003 through 2005. We understand that these financial statements will be prepared in accordance with generally accepted accounting principles. We will also perform the audit of the Village of Lemont as of April 30, 2003 through 2005, so as to satisfy the audit requirements imposed by the Single Audit Act and the U.S. Office of Management and Budget (OMB Circular No. A -133), if applicable. We will conduct our audit in accordance with generally accepted auditing standards; and "Government Auditing Standards" issued by the Comptroller General of the United States; and the provisions of the Single Audit Act, OMB Circular A -133 and OMB's Compliance Supplement, if applicable. Those standards, circulars, supplements or guides require that we plan and perform the audit to obtain reasonable rather than absolute, assurance about whether the financial statements are free of material misstatement whether caused by error, fraudulent financial reporting or misappropriation of assets. Accordingly, a material misstatement, whether caused by error, fraudulent financial reporting or misappropriation of assets, may remain undetected. An audit includes examining, on a test basis evidence supporting the amounts and disclosures in the financial statements. As a result, an audit is not designed to detect errors or fraud that are immaterial to the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit will provide a reasonable basis for our reports. 650 DUNDEE ROAD, Su1TE 250 NoETHBRoox, IL 60062 -2759 PHONE 847/205 -5000 FAX 847/205 -1400 e -mail mccltd @millercooper.com Village President and Board of Trustees Village of Lemont April 25, 2003 Page Two In addition to our reports on the Village's financial statements, we will also issue the following reports or types of reports: A report on the fairness of the presentation of the Village's schedule of expenditures of Federal awards for the years ending April 30, 2003 through 2005, if applicable. Reports on internal control related to the financial statements, and major programs. These reports will describe the scope of testing of internal control and the results of our tests of internal controls, if applicable. Reports on compliance with laws, regulations, and the provision of contracts or grant agreements. We will report on any noncompliance which could have a material effect on the financial statements and any noncompliance which could have a direct and material effect on each major program, if applicable. A schedule of findings and questioned costs, if applicable. The funds and account groups that are listed in the April 30, 2002 financial statements are to be included as part of our audits. The Federal financial assistance programs are to be determined each year. This proposal assumes one major program. Our reports on internal control, if applicable, will include any reportable conditions and material weaknesses in the system of which we become aware as a result of obtaining an understanding of internal control and performing tests of internal control consistent with requirements of the standards and circular identified above. Our reports on compliance will address material errors, fraud; violations of compliance requirements and other responsibilities imposed by state and Federal statutes and regulations and assumed by contracts; and any state or Federal grant, entitlement of loan program questioned costs of which we become aware, consistent with requirements of the standards and circulars identified above. If circumstances arise relating to the conditions of your records, the availability of sufficient, competent evidential matter, or indications of a significant risk of material misstatement of the financial statements because of error, fraudulent financial reporting, misappropriation of assets or noncompliance which in our professional judgment prevent us from completing the audit, we retain the unilateral right to take any course of action permitted by professional standards, including withdrawal from the engagement. MILLER COOPER & CO., LTD. Village President and Board of Trustees Village of Lemont April 25, 2003 Page Three As you know, management is responsible for (1) the Village of Lemont's financial statements, (2) establishing and maintaining effective internal control over financial reporting and safeguarding assets, (3) properly recording transactions in the records, (4) identifying and ensuring that Village of Lemont complies with the laws and regulations applicable to its activities, (5) making all financial records and related information available to us, and (6) for adjusting the financial statements to correct material misstatements. At the conclusion of our audit, we will request certain written representations from management about the financial statements and matters related thereto. We will also require that you affirm to us 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 statement taken as a whole. The Village of Lemont hereby indemnifies Miller, Cooper & Co., Ltd. and its partners, principals and employees and holds them harmless from all claims, liabilities, losses and costs arising in circumstances where there has been a knowing misrepresentation by a member of the Village of Lemont's management, regardless of whether such person was acting in the Village of Lemont's interest. This indemnification will survive termination of this letter. As indicated previously in this letter, we will prepare the Village's Annual Financial Report to the State Comptroller which you will be required to file. You acknowledge that you have the final responsibility for these reports and, therefore, you should review them carefully before you sign and file them. You have informed us that you intend to prepare a comprehensive annual financial report (CAFR) and submit it for evaluation by the Government Finance Officers Association's Certificate of Achievement for Excellence in Financial Reporting. Our participation is to draft for your review and approval the CAFR and to review the statistical and introductory sections. The working papers for this engagement are the property of the Village of Lemont. However, you acknowledge and grant your assent that representatives of the cognizant or oversight agency or their designee, other government audit staffs and the U.S. General Accounting Office shall have access to the audit working papers upon their request; and that we shall maintain the working papers for a period of at least three years after the date of the report, or for a longer period if we are requested to do so by the cognizant or oversight agency. Access to requested workpapers will be provided under the supervision of Miller, Cooper & Co., Ltd. audit personnel and at a location designated by our Firm. During the course of our engagement, we may accumulate records containing data which should be reflected in your books and records. You will determine that all such data, if necessary, will be so reflected. Accordingly, you will not expect us to maintain copies of such records in our possession. MILLER COOPER & CO., LTD. Village President and Board of Trustees Village of Lemont April 25, 2003 Page Four The assistance to be supplied by your personnel, including the preparation of schedules and analyses of accounts, is listed below. The timely and accurate completion of this work is an essential condition to our completion of the audit and issuance of our audit report. • Balanced cash basis trial balances for each fund • Support for selected balance sheet accounts • Reconciliation of interfund accounts • Copies of selected documents as necessary • Detail of investment transactions that reconcile with the general ledger Our fee for the services described in this letter will not exceed the attached summary unless the scope of the engagement is changed, the assistance which the Village has agreed to furnish is not provided, or unexpected conditions are encountered, in which case we will discuss the situation with you before proceeding. All other provisions of this letter will survive any fee adjustment. Interim billings will be submitted as work progresses and as expenses are incurred. Billings are due upon submission In the event we are requested or authorized by the Village of Lemont or are required by government regulation, subpoena, or other legal process to produce our documents or our personnel as witnesses with respect to our engagements for Village of Lemont, Village of Lemont will, so long as we are not a party to the proceeding in which the information is sought, reimburse us for our professional time and expenses, as well as the fees and expenses of our counsel, incurred in responding to such requests. Our report on the financial statements is not to be included in an official statement or other document involved with the sale of debt instruments without our prior consent. Additionally, if you intend to publish or otherwise reproduce the financial statements and/or make reference to us or our audit, you agree to provide us with printer's proofs or master for our review and consent before reproduction and /or release occurs. You also agree to provide us with a copy of the final reproduced material for our consent before it is distributed or released. Our fees for any additional services that may be required under our quality assurance system as a result of the above will be established with you at the time such services are determined to be necessary. It is agreed by Village of Lemont and Miller, Cooper & Co., Ltd. or any successors in interest that no claim by or on behalf of Village of Lemont shall be asserted more than two years after the date of the last audit report issued by Miller, Cooper & Co., Ltd. This letter constitutes the complete and exclusive statement of agreement between Miller, Cooper & Co., Ltd. and Village of Lemont, superseding all proposals oral or written and all other communication, with respect to the terms of the engagement between the parties. MILLER COOPER Sr CO., LTD. Village President and Board of Trustees Village of Lemont April 25, 2003 Page Five In accordance with "Government Auditing Standards," a copy of our most recent peer review report is enclosed, for your information. If this letter defines the arrangements as you understand them, please sign and date the enclosed copy and return it to us. We appreciate your business. Sincerely, MII�ER, COOPER & CO., LTD. Irwin A. Lyons Enclosure IALaaI mN,cmonl propr mg 03 lal Confirmed on behalf of the Village of Lemont: MILLER COOPER & CO., LTD. PROPOSED FEES Years Ending April 30, 2003 2004 2005 Audit Services Audit of the Village's and drafting combined financial statements $ 13,900 $ 14,400 $ 14,900 Single audit (when applicable) 2,000 2,100 2,200 TIF compliance audit and reports 2,500 2,600 2,700 Accounting Services Assist in adjusting the Village's cash basis trial balance to modified accrual/accrual basis 6,400 6,600 6,900 Assistance with GFOA Certificate 500 500 550 Assistance with the drafting of the Comptroller's AFR 700 750 800 Total $ 26,000 $ 26,950 $ 28,050 MILLER COOPER & CO., LTD. ASSOCIATES INTERNATIONAL October 18, 2001 To the Principals Miller, Cooper & Co., Ltd. We have reviewed the system of quality control for the accounting and auditing practice of MILLER, COOPER & CO., LTD. (the firm) in effect for the year ended May 31, 2001. A system of quality control encompasses the firm's organizational structure and the policies adopted and procedures established to provide it with reasonable assurance of conforming with professional standards. The elements of quality control are described in the Statements on Quality Control Standards issued by the American Institute of Certified Public Accountants (AICPA). The design of the system and compliance with it are the responsibility of the firm. Our responsibility is to express an opinion on the design of the system, and the firm's compliance with the system based on our review. Our review was conducted in accordance with standards established by the Peer Review Board of the AICPA. In performing our review, we obtained an understanding of the system of quality control for the firm's accounting and auditing practice. In addition, we tested compliance with the firm's quality control policies and procedures to the extent we considered appropriate. These tests covered the application of the firm's policies and procedures on selected engagements. Because our review was based on selective tests, it would not necessarily disclose all weaknesses in the system of quality control or all instances of lack of compliance with it. Because there are inherent limitations in the effectiveness of any system of quality control, departures from the system may occur and not be detected. Also, projection of any evaluation of a system of quality control to future periods is subject to the risk that the system of quality control may become inadequate because of changes in conditions, or because the degree of compliance with the policies or procedures may deteriorate. In our opinion, the system of quality control for the accounting and auditing practice of MILLER, COOPER & CO., LTD. in effect for the year ended May 31, 2001, has been designed to meet the requirements of the quality control standards for an accounting and auditing practice established by the AICPA and was complied with during the year then ended to provide the firm with reasonable assurance of conforming with professional standards. CPA ASSOCIA S INTERNATIONAL, INC. REVIEW TEAM J. Thomas Vickers, CPA Team Captain CPA Associates International, Inc. Meadows Office Complex, 301 Route 17 North, Rutherford, N.J. 07070 Tel: 201- 804 -8686 Fax: 201- 804 -9222 E -mail: homeoffice @cpaai.com ASSOCIATES INTERNATIONAL October 18, 2001 To the Principals Miller, Cooper & Co., Ltd. We have reviewed the system of quality control for the accounting and auditing practice of MILLER, COOPER & CO., LTD. (the firm) in effect for the year ended May 31, 2001. A system of quality control encompasses the firm's organizational structure and the policies adopted and procedures established to provide it with reasonable assurance of conforming with professional standards. The elements of quality control are described in the Statements on Quality Control Standards issued by the American Institute of Certified Public Accountants (AICPA). The design of the system and compliance with it are the responsibility of the firm. Our responsibility is to express an opinion on the design of the system, and the firm's compliance with the system based on our review. Our review was conducted in accordance with standards established by the Peer Review Board of the AICPA. In performing our review, we obtained an understanding of the system of quality control for the firm's accounting and auditing practice. In addition, we tested compliance with the firm's quality control policies and procedures to the extent we considered appropriate. These tests covered the application of the firm's policies and procedures on selected engagements. Because our review was based on selective tests, it would not necessarily disclose all weaknesses in the system of quality control or all instances of lack of compliance with it. Because there are inherent limitations in the effectiveness of any system of quality control, departures from the system may occur and not be detected. Also, projection of any evaluation of a system of quality control to future periods is subject to the risk that the system of quality control may become inadequate because of changes in conditions, or because the degree of compliance with the policies or procedures may deteriorate. In our opinion, the system of quality control for the accounting and auditing practice of MILLER, COOPER & CO., LTD. in effect for the year ended May 31, 2001, has been designed to meet the requirements of the quality control standards for an accounting and auditing practice established by the AICPA and was complied with during the year then ended to provide the firm with reasonable assurance of conforming with professional standards. CPA ASSOCIA S INTERNATIONAL, INC. REVIEW TEAM J. Thomas Vickers, CPA Team Captain CPA Associates International, Inc. Meadows Office Complex, 301 Route 17 North, Rutherford, N.J. 07070 Tel: 201 - 804 -8686 Fax: 201 -804 -9222 E -mail: homeoffice @cpaai.com