HomeMy WebLinkAboutAlbrecht, Viggiano, Zureck & co
rAWF X RESOLUTION 2013-754
ADOPTED DOC ID: 9154
THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION NO. 2013-754 WAS
ADOPTED AT THE REGULAR MEETING OF THE SOUTHOLD TOWN BOARD ON
OCTOBER 22,2013:
RESOLVED that the Town Board of the Town of Southold hereby authorizes and directs
Supervisor Scott Russell and Town Comptroller John Cushman to execute an engagement
letter with Albrecht. Viggiano. Zureck and Company. P.C. in connection with the fiscal
years' 2013 and 2014 annual audits, including one Federal Single Audit, the NYS DOT Audit,
and the Justice Court audit of the Town, at a fee not to exceed $80,000 for 2013, plus $5,000 for
any additional Federal Single Audits that may be required, and $82,500 for 2014, plus $5,000 for
any additional Federal Single Audits that may be required, that said fees shall be a legal charge
to the General Fund Whole Town Independent Auditing and Accounting budget
(A. 1320.4.500.300), or, for any additional Federal Single Audits required for Community
Preservation Fund purposes, the Community Preservation Fund budget (H3.1320.4.500.300), and
that said engagement letter is subject to review and approval by the Town Attorney.
Elizabeth A. Neville
Southold Town Clerk
RESULT: ADOPTED [UNANIMOUS]
MOVER: William P. Roland, Councilman
SECONDER: Louisa P. Evans, Justice
AYES: Dinizio Jr, Ruland, Doherty, Talbot, Evans, Russell
= ORIGINAL
CERTIFIED PUBLIC ACCOUNTANTS
October 1, 2013
Mr. Scott A. Russell, Town Supervisor
Town of Southold
Southold, New York 11971
Dear Mr. Russell:
We are pleased to confirm our understanding of the services we are to provide Town of Southold for the
years ended December 31, 2013 and December 31, 2014. We will audit the financial statements of the
governmental 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
Town of Southold as of and for the years ended December 31, 2013 and December 31, 2014. 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 Town of Southold'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 Town of Southold'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, and other knowledge we obtained during the 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 schedules
3) Other postemployment benefits (OPEB) information
We have also been engaged to report on supplementary information other than RSI that accompanies
Town of Southold's financial statements. The schedule of state transportation assistance expended will
be included in a separately issued New York State Department of Transportation single audit report. 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:
1) Combining and individual non-major fund financial statements
2) Schedule of expenditures of federal awards.
3) Schedule of state transportation assistance expended.
PERSONAL SERVICE. TRUSTED ADVICE.
ALBRECHT, VIGGIANO, ZURECK & COMPANY, P.C. -
245 PARK AVENUE, 39TH FLOOR 25 SUFFOLK COURT
NEW YORK, NY 10167 HAUPPAUGE, NY 11788-3715
T: 212.792.4075 T. 631.434.9500 F: 631.434.9518
www.avz.com
INDEPENDENT MEM DER OF BKR INTERNATIONAL
Mr. Scott A. Russell, Town Supervisor
Town of Southold
October 1, 2013
Page 2
We will also audit and issue separate financial statements for the Town of Southold Justice Court Fund.
Our audit will be conducted in accordance with accounting standards generally accepted in the United
States of America.
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 basic financial statements taken as a whole. The objective also includes
reporting on-
Internal control related to the financial statements 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.
• Internal control related to major programs and an opinion (or disclaimer of opinion) on compliance
with laws, regulations, and the provisions of contracts or grant agreements that could have a
direct and material effect on each major program in accordance with the Single Audit Act
Amendments of 1996 and OMB Circular A-133, Audits of States, Local Governments, and Non-
Profit Organizations and Draft Part 43 of the New York State Codification of Rules and
Regulations (NYCRR).
The reports on internal control and compliance will each include a paragraph that states that the purpose
of the report is intended solely to describe (1) the scope of testing of internal control over financial
reporting and compliance and the result of that testing and not to provide an opinion on the effectiveness
of internal control over financial reporting or on compliance, (2) the scope of testing internal control over
compliance for major programs and major program compliance and the result of that testing and to
provide an opinion on compliance but not to provide an opinion on the effectiveness of internal control
over compliance, and (3) that the report is an integral part of an audit performed in accordance with
Governmental Auditing Standards in considering internal control over financial reporting an compliance
and OMB Circular A-133 and Draft Part 43 of the NYCRR in considering internal control over compliance
and major program compliance. The paragraph will also 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 OMB Circular A-133 and Draft Part 43 of the NYCRR, and will include tests of accounting records, a
determination of major program(s) in accordance with OMB Circular A-133 and Draft Part 43 of the
NYCRR, and other procedures we consider necessary to enable us to express such opinions and to
render the required reports. We cannot provide assurance that unmodified opinions will be expressed.
Circumstance may arise in which it is necessary for us to modify our opinions or add emphasis-of-matter
paragraphs. If our opinions on the financial statements or the Single Audit compliance opinions are other
than unqualified, 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 to issue a report as a result of this engagement.
We will make reference to the other auditors' of the following discretely presented component units in our
reports on your financial statements:
Discretely Presented Component Auditor of record
Component Unit as of December 31. 2012
Fishers Island Waste Management District Doherty Beals & Banks, P.C.
Fishers Island Ferry District O'Connor Davies, LLP
Mr. Scott A. Russell, Town Supervisor
Town of Southold
October 1, 2013
Page 3
Management Responsibilities
Management is responsible for the basic financial statements and all accompanying information as well
as all representations contained therein. Management is also responsible for identifying government
award programs and understanding and complying with the compliance requirements, and for preparation
of the schedule of expenditures of federal awards in accordance with the requirements of OMB Circular
A-133 and the schedule of state transportation assistance expended in accordance with Draft Part 43 of
the NYCRR. As part of the audit, we will assist with preparation of your financial statements, schedule of
expenditures of federal awards, and related notes. You will be required to acknowledge in the written
representation letter our assistance with preparation of the financial statements an schedule of
expenditures of federal awards and that you have reviewed and approved the financial statements,
schedule of expenditures of federal awards, and related notes prior to their issuance and have accepted
responsibility for them. You agree to assume all management responsibilities for any nonaudit services
we provide; oversee the services by designating an individual, preferably from senior management, who
possesses suitable skill, knowledge, or experience; evaluate the adequacy and results of the services;
and accept responsibility for them.
Management is responsible for 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 and that there is reasonable assurance that government
programs are administered in compliance with compliance requirements. 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.
Management is also responsible for making all financial records and related information available to us
and for ensuring that management is reliable and financial information is reliable and properly recorded.
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) 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.
Management should be aware of the "Clarity Project" AU-C Section requirements, and ensuring
cooperation from the component auditors. Management is responsible for ensuring that (1) all component
auditors are familiar with and will prepare component financial statements using the same financial
reporting framework as the group financial statements, (2) audits on the component financial statements
will be performed in accordance with auditing standards generally accepted in the United States of
America and that the component auditors issue an auditors' report that is not restricted as to use, (3) all
component auditors will issue audit reports on component financial statements; communicated with the
group auditor on matters of significant audit findings, and conclusions; subsequent events that occur
between the dates of the financial statements of the components and the date of the auditors' report on
the group financial statements; representation on independence and competence in a timely manner.
Your responsibilities also include identifying significant vendor relationships in which the vendor has
responsibility for program compliance and for the accuracy and completeness of that information. Your
responsibilities include adjusting the financial statements to correct material misstatements and
confirming to us in the written 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.
Mr. Scott A. Russell, Town Supervisor
Town of Southold
October 1, 2013
Page 4
Management Responsibilities (continued)
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. Additionally, as required by OMB Circular A-133, 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 within two weeks of the commencement of
fieldwork.
You are also responsible for the preparation of the schedule of expenditures of federal awards and the
schedule of state transportation assistance expended (the "schedules) in conformity with OMB Circular A-
133 and Draft Part 43 of the NYCRR respectively. You agree to include our report on the schedule of
expenditures of federal awards and the schedule of state transportation assistance expended in any
document that contains and indicates that we have reported on these schedules. You also agree to make
the audited financial statements, readily available to intended users of the schedules no later than the
date the schedule of expenditures of federal awards and the schedule of state transportation of
assistance expended are issued with our report thereon. Your responsibilities included acknowledging to
us in the written representation letter that (a) you are responsible for presentation of the schedule of the
schedule of expenditures of federal awards and the schedule of state transportation assistance expended
in accordance with OMB Circular A-133 and Draft 43 NYCRR, respectively; (b) that you believe the
schedule of expenditures of federal awards and the schedule of state transportation assistance expended,
including its form and content, is fairly presented in accordance with OMB Circular A-133 and Draft 43
NYCRR; (c) that 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; if applicable and (d) you have
disclosed to us any significant assumptions or interpretations underlying the measurement or
presentation of the schedule of expenditures of federal awards and the schedule of state transportation
assistance expended.
You are also responsible for the preparation of the other 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. You also agree to include the audited financial statements with any presentation of the
supplementary information that includes our report thereon. Your responsibilities include acknowledging
to us in the written representation letter that (a) you are responsibility for presentation of the
supplementary information in accordance with GAAP; (b) that you believe the supplementary information,
including its form and content, is fairly represented in accordance with GAAP; (c) that the methods of
measurement or presentation have not change from those used in the prior period or, if they have
changed, the reasons for such changes; and (d) you have disclosed to us any significant assumptions or
interpretations underlying the measurement or presentation of the supplementary information.
With regard to using the auditors' report, you understand that you must obtain our prior written consent to
reproduce or use our report in bond offering official statement or other documents.
With regard to the electronic dissemination of the audited financial statements, including financial
statements published electronically on your website, you understand that electronic sites are a means to
distribute information and, therefore, we are not required to read the information contained in these sites
or to consider the consistency of other information in the electronic site with the original document.
Mr. Scott A. Russell, Town Supervisor
Town of Southold
October 1, 2013
Page 5
Management Responsibilities (continued)
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 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
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 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 the inherent limitations of an audit combined with the inherent limitations of internal controls, and
because we will not perform a detailed examination of all transactions, there is a risk that material
misstatement 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 auditing standards and Governmental
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 you of any violations of laws or governmental regulations that come to our attention,
unless clearly inconsequential, and of any material abuse 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 any 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.
Mr. Scott A. Russell, Town Supervisor
Town of Southold
October 1, 2013
Page 6
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 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 OMB Circular A-133 and Draft Part 43 of the NYCRR, we will perform tests 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 OMB Circular A-133 and Draft Part 43 of the NYCRR.
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, Government Auditing Standards, and OMB Circular A-133 and Draft Part 43 of the NYCRR.
Audit Procedures-Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we will perform tests of Town of Southold's compliance with 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.
OMB Circular A-133 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 tests of
transactions and other applicable procedures described in the OMB Circular A-133 Compliance
Supplement and Draft Part 43 of the NYCRR for the types of compliance requirements that could have a
direct and material effect on each of Town of Southold's major programs. The purpose of these
procedures will be to express an opinion on Town of Southold's compliance with requirements applicable
to each of its major programs in our report on compliance issued pursuant to OMB Circular A-133 and
Draft Part 43 of the NYCRR.
Audit Administration, Fees, and Other
We may from time to time, and depending on the circumstances, use third-party service providers in
serving your account. We may share confidential information about you with these service providers, but
remain committed to maintaining the confidentiality and security of your information. Accordingly, we
maintain internal policies, procedures, and safeguards to protect the confidentiality of your personal
information. In addition, we will secure confidentiality agreements with all service providers to maintain
the confidentiality of your information and we will take reasonable precautions to determine that they have
appropriate procedures in place to prevent the unauthorized release of your confidential information to
others. In the event that we are unable to secure an appropriate confidentiality agreement, you will be
asked to provide your consent prior to the sharing of your confidential information with the third-party
service provider. Furthermore, we will remain responsible for the work provided by any such third-party
service providers.
Mr. Scott A. Russell, Town Supervisor
Town of Southold
October 1, 2013
Page 7
Audit Administration, Fees, and Other (continued)
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 auditors' 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 audit documentation for this engagement is the property of Albrecht, Viggiano, Zureck & Company,
P.C. and constitutes confidential information. However, pursuant to authority given by law or regulation,
we may be requested to make certain audit documentation available to the U.S. Department of
Commerce 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 under the supervision of Albrecht, Viggiano, Zureck & Company, P.C.
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 or for any additional period requested by a federal award agency or its designee. If we are aware
that a federal awarding agency, pass-through entity, or auditee is contesting an audit finding, we will
contact the parties contesting the audit finding for guidance prior to destroying the audit documentation.
We expect to begin our audit on an agreed upon date and to issue our reports no later than September
30th after year end for each fiscal year. Our fees for these services will be at our standard hourly rates
plus out-of-pocket costs (such as report reproduction, word processing, postage, travel, copies, telephone,
etc.) except that we agree that our gross fee, including expenses, will not exceed the following:
2013 2014
Audited Financial Statements
Town of Southold - Basic Financial Statements & Single Audit $ 74,700 $ 77,100
Town of Southold - Justice Court 5.300 5.400
$ 80.000 $ 82.500
These fees assume that there will be one major program required for testing the Federal Single Audit. If
the Federal Single Audit requires two or more major programs to be tested, the cost will be $5,000 per
additional major program.
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. In accordance with our firm policies, work may be
suspended if your account becomes 180 days or more overdue and may not be resumed until your
account is paid in full. If we elect to terminate our services for nonpayment, our engagement will be
deemed to have been completed upon written notification of termination, even if we have not completed
our report(s). You will be obligated to compensate us for all time expended and to reimburse us for all
out-of-pocket costs through the date of termination. 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.
Mr. Scott A. Russell, Town Supervisor
Town of Southold
October 1, 2013
Page 8
Independent Requirements
Professional and certain regulatory standards may require us to be independent, in both fact and
appearance, with respect to the Town of Southold. In the performance of our services the Town of
Southold shall not, during the term of this agreement and for the 12 months following its termination for
any reason, with the prior written consent of Albrecht, Viggiano, Zureck & Co., P.C. solicit for employment,
or hire any current or former partner or professional employee of Albrecht, Viggiano, Zureck & Co., P.C.,
any affiliate thereof, or any other member of the global Albrecht, Viggiano, Zureck & Co., P.C. network or
any of their respective affiliates, if such partner or professional employee has been involved in the
performance of any audit, review, or attest services for or relating to the Town at any time during the then
current fiscal year of the Town of Southold up to and including the date of the audit report for that year, or
in the 12 months preceding the audit report date for the immediately preceding year.
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 2011 peer review report accompanies this letter.
We appreciate the opportunity to be of service to Town of Southold 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 y truly yours,
Albrecht, Viggiano, Zureck & Company, P.C
Enclosure
RESPONSE:
This letter correctly sets forth the understanding of:
Town of So t old
Governance signature:
masse-(
Title: ? r O
Date:
Management signature
7m art GtCS Nr a d/
Title:
Date: i~~/3