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HomeMy WebLinkAboutPKF O'Connor Davies, LLP RESOLUTION 2024-798 MY ADOPTED DOC ID: 20608 THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION NO.2024-798 WAS ADOPTED AT THE REGULAR MEETING OF THE SOUTHOLD TOWN BOARD ON SEPTEMBER 10,2024: RESOLVED that the Town Board of the Town of Southold hereby authorizes and directs Supervisor Albert J. Krupski Jr. to execute an engagement letter with PKF O'Connor Davies, LLP in connection with their examination of the Town's compliance with rules and regulations concerning use of Local Fiscal Recovery Funds through December 31, 2023, and that said fees shall be a legal charge to the General Fund Whole Town Independent Auditing and Accounting budget(A.1320.4.500.300), and that said engagement letter is subject to review and approval by the Town Attorney. Denis Noncarrow Southold Town Clerk RESULT: ADOPTED [UNANIMOUS] MOVER: Louisa P.Evans, Justice SECONDER:Greg Doroski, Councilman AYES: Doroski,Mealy, Smith, Krupski Jr,Doherty, Evans 6P1`C_r0NN0R DAMES ACCOUNTANTS AND ADVISORS May 16, 2024 Mr. Albert J. Krupski Jr. Town Supervisor Town of Southold Southold, New York 11971 This letter sets forth our understanding of the terms and objectives of our engagement, and the nature and scope of the services we will provide to the Town of Southold, New York (the "Town"). Examination Objectives We will examine the Town's compliance with the compliance requirements "activities allowed or unallowed" and "allowable cost/cost principles" (the "specified requirements") as described in Part IV "Requirements for an Alternative Compliance Examination Engagement for Recipients That Would Otherwise be Required to Undergo,a Single Audit or Program-Specific Audit as a Result of Receiving State and Local Fiscal Recovery Funds" of the Coronavirus State and Local Fiscal Recover Funds ("CSLFRF") section of the 2023 Compliance Supplement (referred to herein as "Requirements for an Alternative CSLFRF Compliance Examination Engagement")during the year ended December 31, 2023. The objectives ofour examination are to obtain reasonable assurance about whether the Town complied, in all material respects, with the specified requirements during the year ended December 31, 2023. Our examination will be conducted in accordance with attestation standards established by the AICPA, the standards applicable to attestation engagements contained in Government Auditing Standards, issued by the Comptroller General of the United States; and in the "Requirements for an Alternative CSLFRF Compliance Examination Engagement". Accordingly, it will include examining, on a test basis, your records and other procedures to obtain evidence necessary to enable us to express our opinion. We will issue a written report upon completion of our examination. Our report will be addressed to The Honorable Supervisor and Members of the_Town Board of the Town of Southold, New York. We cannot provide assurance that an unmodified opinion will be expressed. Circumstances may arise in which it is necessary for us to modify our opinion. If our opinion is other than unmodified,we will discuss the reasons with you in advance. If, for any reason, we are unable to complete the examination or are unable to form or have not formed an opinion, we may decline to express an opinion or may withdraw from this engagement. Because of the inherent limitations of an examination engagement,together with the inherent limitations of internal control, an unavoidable risk exists that some material misstatements may not be detected, even though the examination is properly planned and performed in accordance with the attestation standards. PKF O'CONNOR DAVIES LLP 878 Veterans Memorial Highway,Fourth Floor, Hauppauge, NY 11788 1 Tel:631.434.9500 1 Fax: 631.434.9518 1 www.pkfod.com PKF O'Connor Davies LLP is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. Town of Southold May 16, 2024 i Examination Objectives (continued) You understand that the report is intended solely to express and opinion on whether the Town complied, in all material respects with the specified requirements referenced above during the year ended December 31, 2023. We will plan and perform the examination to obtain reasonable assurance about whether the Town complied with the "Requirements for an Alternative CSLFRF Compliance Examination Engagement", based on attestation standards established by the AICPA; the standards applicable to attestation engagements contained in Government Auditing Standards, issued by the Comptroller General of the United States; and in the "Requirements for an Alternative CSLFRF Compliance Examination Engagement". Our engagement will not include a detailed inspection of every transaction and cannot be relied on to disclose all material errors, or known and suspected fraud or noncompliance with laws or regulations,or internal control deficiencies,that may exist. However,we will inform you of any known and suspected fraud and noncompliance with laws or regulations, internal control deficiencies identified during the engagement, and uncorrected misstatements that come to our attention unless clearly trivial. We understand that you will provide us with the information required for our examination and that you are responsible for the accuracy and completeness of that information.We may advise you about appropriate criteria, but the responsibility for the subject matter remains with you. Your Responsibilities You are responsible for the Town's compliance with the specified requirements. You are responsible for, and agree to provide us with, a written assertion about whether the Town complied, in all material respects,with the specified requirements.Failure to provide such an assertion will result in our withdrawal from the engagement.You are also responsible for providing.us with (1)access to all information of which you are aware that is relevant to the measurement, evaluation, or disclosure of the subject matter; (2) additional information that we may request for the purpose of the examination;and(3)unrestricted access to persons within the Town from whom we determine it necessary to obtain evidence. You are also responsible to notify us in advance of your intent to print our report, in whole or in part, for inclusion in a document containing other information, and to give us the opportunity to approve such use and to review such printed matter for material inconsistencies and misstatements before its issuance. At the conclusion of the engagement, you agree to provide us with certain written representations in the form of a representation letter. Our responsibility as accountants is limited to the period covered by our examination and does not extend to any later periods for which we are not engaged as accountants. We understand that your accounting department personnel will assist us to the extent practicable in completing the examination. They will provide us with detailed supporting schedules, and other information we deem necessary.A list of these schedules and other items of information will be furnished to you shortly before we begin the examination engagement. The timely and accurate completion of this information is an essential condition to our completion of our examination and the issuance of the report thereon. In the event that we become obligated to pay any cost, settlement, judgment, fine, penalty, or similar award or sanction as a result of a claim, investigation, or other proceeding instituted by any third party, as a direct or indirect result of an intentional, knowing or reckless misrepresentation or provision to us of inaccurate or incomplete information by the Town or any director, officer or employee thereof in connection with this engagement, and not any failure on our part to comply with professional standards, you agree to indemnify us against such obligations. 2 • Town of Southold May 16, 2024 Your Responsibilities (continued) To the best of your knowledge, you are unaware of any facts which might impair our independence with respect to this engagement. You must notify us in advance and obtain our approval if you intend to make reference to our firm in a document that includes our examination report. Because our engagement does not contemplate the foregoing, there may be an additional fee in connection with our review of any such documents. In the event our auditor/client relationship has been terminated when the Town seeks such consent, we will be under no obligation to grant such consent or approval. We keep documents related to this engagement in accordance with our records retention policy and applicable regulations. 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. Non-Reliance on Oral Advice It is our policy to put all advice on which a client intends to rely in writing.We believe that is necessary to avoid confusion and to make clear the specific nature and limitations of our advice. You should not rely on any advice that has not been put in writing by our firm after a full supervisory review. Electronic and Other Communication During the course of the engagement,we may communicate with you or with Town personnel via e-mail or other electronic means. You should be aware that communication in those media may be unsafe to use and present a risk of misdirection and/or interception by unintended third parties, or failed delivery or receipt. In that regard, you agree that we shall have no liability for any loss or damage to any person or entity resulting from the use of e-mail or other electronic transmissions, including any consequential, incidental, direct, indirect,or special damages. Access to Working Papers During the course of this engagement, we will develop files of various documents, schedules and.other related engagement information known as our working papers.As we are sure you can appreciate,these working papers may contain confidential information and our firm's proprietary data.You understand and agree that these working papers are, and will remain,our exclusive property. Except as discussed below, any requests for access to our working papers will be discussed with you before making them available to requesting parties: (1) Our firm, as well as other accounting firms, participates in a peer review program covering our audit and accounting practices. This program requires that once every three years we subject our system of quality control to an examination by another accounting firm. As part of this process, the other firm will review a sample of our work. It is possible that the work we perform for you may be selected for review. If it is, the other firm is bound by professional standards to keep all information confidential. 3 Town of Southold May 16, 2024 Access to Working Papers (continued) (2) We may be requested to make certain working papers available to regulators pursuant to authority given to them by law, regulation or subpoena. If requested, access to such working papers will be provided under the supervision of our personnel. Furthermore, upon request, we may provide photocopies of selected working papers to them.The regulator may intend, or decide,to distribute the photocopies or information contained therein to others, including other government agencies. You agree to compensate us for our time at our standard billing rates and to reimburse us for our out-of-pocket expenses and reasonable attorneys' fees incurred in complying with or responding to any request (by subpoena or otherwise) for testimony, documents or other information concerning the Organization by any governmental agency or investigative body or by a party in any litigation or dispute other than litigation or disputes involving claims by the Organization against the firm. This agreement will survive termination of this engagement. Fees and Billing We estimate that our fees for these services will be$9,500. In addition, if the condition of the accounting records is such that it would require excessive time on our part, we will consult with you beforehand regarding any possible additional charge for the time involved. Insurance We will throughout the term continuously maintain in force insurance adequate to cover our contractual obligations under this Agreement, which will in no event be less than the following: (a) claims-made Professional Liability errors and omissions insurance coverage,that provides coverage for Company and HUSA in a minimum amount of ten million dollars (US$10,000,000.00); (b) occurrence-based Commercial General Liability insurance covering bodily injury and property damage with minimum limits of at least one million dollars (US$1,000,000.00)for any claim arising out of a single occurrence and two million dollars (US$2,000,000.00) for all claims in the aggregate; (c) Worker's Compensation insurance coverage adequate to comply with all statutory requirements covering all persons employed by Company hereunder,and Employer's Liability with minimum limits of at least one million dollars(US$1,000,000.00); (d) Comprehensive Automobile Liability insurance with bodily injury limits of at least five hundred thousand dollars (US$500,000.00) per person and at least five hundred thousand dollars (US$500,000.00) per incident, and property damage with a minimum limit of no less than fifty thousand dollars (US$50,000.00) per incident; and (e) umbrella liability insurance of at least five million dollars (US$5,000,000.00) in the aggregate above the coverages referenced in (a), (b), (c) and (d) above. Upon request, we shall provide the Town certificates of insurance evidencing such coverage and an endorsement including a Waiver of Subrogation in favor of the Town, and naming the Town as an additional insured on all such policies (excluding Worker's Compensation).All insurance policies referred to above will be maintained with insurance companies that are rated A-or better by AM Best. Liability Our firm's maximum liability to the Town for any reason relating to the services under this letter shall be limited to six times the fees paid to the firm for the services or work product giving rise to liability, except to the extent it is finally determined that such liability resulted from the willful or intentional misconduct or fraudulent behavior of the firm. In no event shall the firm be liable to the Town,whether a claim be in tort, contract or otherwise, for any consequential, special, indirect, lost profit or similar damages. 4 Town of Southold May 16, 2024 Reimbursement You agree to reimburse our firm, its partners, principals and employees,to the fullest extent permitted by law for any expense, including compensation for our time at our standard billing rates and reimbursement for our out-of-pocket expenses and reasonable attorneys'fees, incurred in complying with or responding to any request(by subpoena or otherwise)for testimony, documents or other information concerning the Town by any governmental agency or investigative body or by a party in any litigation or dispute other than litigation or disputes involving claims by the Town against the firm. This agreement will survive termination of this engagement. Dispute Resolution Any claim or controversy ("dispute") arising out of or relating to this engagement, the services provided thereunder, or any other services provided by or on behalf of the firm or any of its subcontractors or agents to the Town or at its request(including any dispute involving any person or entity for whose benefit the services in question are or were provided), except any claim by our firm seeking payment of our fees and disbursement, shall first be submitted in good faith for mediation administered by the American Arbitration Association ("AAA") under its Mediation Rules. Each party shall bear its own costs in the mediation. Absent an agreement to the contrary, the fees and expenses of the mediator shall be shared equally by the parties. If the dispute is not resolved by mediation within 90 days of its submission to the mediator,then,and only then, the parties shall submit the dispute for arbitration administered by the American Arbitration Association under its Professional Accounting and Related Services Dispute Resolution Rules (the "Rules"). The arbitration will be conducted before a single arbitrator selected from the AAA's Panel of Accounting Professionals and Attorneys and shall take place in New York, New York. Any discovery sought in connection with the arbitration must be expressly approved by the arbitrator upon a showing of substantial need by the party seeking discovery. All aspects of the arbitration shall be treated as confidential. The parties and the arbitrator may disclose the existence, content or result of the arbitration only as expressly provided by the Rules. The arbitrator shall issue his or her final award in a written and reasoned decision to be provided to each party. In his or her decision, the arbitrator will declare one party the prevailing party. The arbitrator shall have the power to award to the prevailing party reasonable legal fees associated with the arbitration and prior mediation. The arbitrator shall have no authority to award non-monetary or equitable relief of any sort. The arbitrator shall not have authority to award damages that are punitive in nature, or that are not measured by the prevailing party's actual compensatory loss. The award reached as a result of the arbitration will be binding on the parties and confirmation of the arbitration award may be sought in any court having jurisdiction. Any claim by our firm seeking payment of our fees and disbursements related to this engagement and the services provided hereunder shall be brought in a federal or state court of appropriate jurisdiction sitting without a jury. YOU AND OUR FIRM,IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED TO NON-PAYMENT OF ANY OF OUR FEES AND DISBURSEMENTS. This engagement will be governed by the laws of the State of New York, without giving effect to any provisions relating to conflict of laws that would require the laws of another jurisdiction to apply. 5 Town of Southold May 16, 2024 Corporate Transparency Act/Beneficial Ownership Reporting Assisting you with your compliance with the Corporate Transparency Act ("CTA"), including beneficial ownership information ("BOI") reporting, is not within the scope of this engagement. You have sole responsibility for your compliance with the CTA, including its BOI reporting requirements and the collection of relevant ownership information.We shall have no liability resulting from your failure to comply with CTA. Information regarding the BOI reporting requirements can be found at https://www.fincen..gov/boi. Consider consulting with legal counsel if you have questions regarding the applicability of the CTA's reporting requirements and issues surrounding the collection of relevant ownership information. Confirmation Jeffrey Davoli is the engagement partner and is responsible for supervising the engagement and signing the report or authorizing another individual to sign it. We expect to begin our examination engagement as soon as possible. Our examination engagement for each period ends on delivery of our examination report covering that period. Requests for services other than those included in this engagement letter will be agreed to in a separate engagement letter. PKF O'Connor Davies LLP ("LLP") and PKF O'Connor Davies Advisory LLC ("Advisory") practice in an alternative practice structure in accordance with applicable law, regulations and professional standards. LLP provides attest services to its clients. Advisory is not a registered CPA firm and does not provide audit or attest services. LLP has a contractual arrangement with Advisory, whereby Advisory provides LLP with professional and support personnel to perform professional services on behalf of LLP. In connection with our services,we may share information that we currently have and/or receive in the future between LLP and Advisory. Unless you indicate otherwise, your acceptance of the terms of this engagement shall be understood by us as your consent for LLP, Advisory and its employees to share confidential information between LLP and Advisory. LLP and Advisory have policies in place that require their employees to maintain as confidential all client information that is not otherwise publicly available. All rights and obligations set forth herein shall become the rights and obligations of any successor firm to PKF O'Connor Davies, LLP by way of merger, acquisition or otherwise. If this letter correctly expresses your understanding of the terms of our engagement, including our respective responsibilities, please sign the enclosed copy where indicated and return it to us. We are pleased to have this opportunity to serve you. Very truly yours, LLP PKF O'Connor Davies, LLP Enc. The services and terms described in the foregoing letter are in accordance with our requirements and 6 Tpwn of Southold 'May 16, 2024 are acceptable to us. TOWN OF SOUTHOLD, NEW YORK BY: l TITLE: DATE: PKF O'Connor Davies, LLP is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. 7 COVER S&If OR DOCUMENTSSent To: 04 - Sent By: TOWN ATTORNEY, PAUL M. DECHANCE DEPUTY T/A, JACK SQUICCIARINI ASSISTANT T/A, JULIE M. MCGIVNEY ASSISTANT T/A, BENJAMIN JOHNSON CONFIDENTIAL SECRETARY, AMY SCHLACHTER_X Type Of Agreement: 16A�RECEIVED S E P 1 8 2024 Southold Town Clerk Nature Of Contract/Agreement o ' l�fi'