Loading...
GM-17-10-06-072 weaver - •Advisory 111- August 2,2017 Brushy Creek Regional Utility Authority,Inc. Mr.Tom Gollier, General Manager 221 E.Main Street Round Rock,Texas 78664 Dear Mr.Gallier. You have requested that we audit the financial statements of Brushy Creek Regional Utility Authority,Inc. as of September 30,2017 and for the year then ended,and the related notes to the financial statements, which comprise the Authority's basic financial statements as listed in the table of contents. We are pleased to confine our acceptance and our understanding of this audit engagement by means of this lefter. Accounting principles generally accepted in the United States of America require that management's discussion and analysis be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. As part of our engagement,we will apply certain limited procedures to the required supplementary information (RSI)in accordance with auditing standards generally accepted in the United States of America.These limited procedures will consist primarily of inquiries of management regarding their methods of measurement and presentation, and comparing the information for consistency with management's responses to our inquiries. We will not express an opinion or provide any form of assurance on the RSI. This RSI will be subjected to certain limited procedures but will not be audited. Supplementary information other than RSI will accompany the Authority's basic financial statements.We will subject the supplementary information, as identified in the table of contents, to the auditing procedures applied in our audit of the basic financial statements and perform certain additional procedures, including comparing and reconciling the supplementary information. as identified in the table of contents, to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and additional procedures in accordance with auditing standards generally accepted in the United States of America.We Intend to provide an opinion on the supplementary information In relation to the financial statements as a whole. 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 aspects,in conformity with generally accepted accounting principles and to report on the fairness of the supplementary information referred to above when considered in relation to the financial statements as a whole.We cannot provide assurance that an unmodified opinion will be expressed.Circumstances may arise in which it is necessary for us to modify our opinions. add emphasis- of-matter, or other-matter paragraphs. If our opinions on the financial statements are other than unmodified.we will discuss the reasons with you in advance.If,for any reason.we ore unable to complete the audit or are unable to form or have not formed opinions, we may decline to express op;nions or withdraw from this engagement. 17-72 AN INDEPENDENT MEMBER OF WEAVER AND TIDWELL,U.P. 1601 SOUTH MOPAC EXPRESSWAY SUITE D250,AUSTIN,TX 78746 BAKER TI LY INTERNATIONAL CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS P 512.509.1900 F;512,808.1911 Brushy Creek Regional Utility Authority,Inc. August 2.2017 Page 2 Auditor Responsibilities We will conduct our audit in accordance with auditing standards generally accepted in the United States of America(U.S.GAAS).Those standards require that we plan and perforin the audit to obtain reasonable assurance about whether the basic financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to error, fraudulent financial reporting,misappropriation of assets,or violations of laws,governmental regulations. grant agreements,or contractual agreements. 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.If appropriate,our procedures will therefore include tests of documentary evidence that support the transactions recorded In the accounts, tests of the physical existence of assets, and direct confirmation of cash,investments,and certain other assets and liabilities by correspondence with creditors and financial institutions.As part of our audit process,we may request written representations from your attorneys,and they may bill you for responding.At the conclusion of our audit, we will also request certain written representations from you about the financial statements and related matters. Because of the inherent limitations of an audit, together with the inherent limitations of internal control, an unavoidable risk that some material misstatements (whether caused by errors, fraudulent financial reporting, misappropriation of assets, or violations of laws or governmental regulations) may not be detected exists,even though the audit is properly planned and performed in accordance with U.S.GARS. In addition, an audit is not designed to detect immaterial misstatements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements. However,we will inform the appropriate level of management of any material errors,fraudulent financial reporting, or misappropriation of assets that comes 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.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. In mating our risk assessments, we consider internal control relevant to the Authority's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Authority's internal control. However,we will communicate to you in writing concerning any significant deficiencies or material weaknesses in internal control relevant to the audit of the financial statements that we have identified during the audit. 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 Brushy Creek Regional Utility Authority,Inc. August 2,2017 Page 3 with the third-party service provider.Furthermore,we will remain responsible for the work provided by any such third-porty service provider. Management Responsibil€ties Our audit will be conducted on the basis that management acknowledge and understand that they have responsibility: a. For the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; b. For the design,implementation,and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to error, fraudulent financial reporting, misappropriation of assets, or violations of laws, governmental regulations,grant agreements,or contractual agreements;and c. To provide us with: I. Access to oil information of which management is aware that Is relevant to the preparation and fair presentation of the financial statements such as records,documentation,and other matters; ii. Additional information that we may request from management for the purpose of the audit; and Iii. Unrestricted access to persons within the Authority from whom we determine it necessary to obtain audit evidence. d. For including the auditor's report in any document containing financial statements that indicates that such financial statements have been audited by the Authority's auditor; e. For identifying and ensuring that the Authority complies with the laws and regulations applicable to Its act€vities;and f. For 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 current year under audit are immaterial, both individually and In the aggregate, to the financial statements as a whole; and g. With respect to any nonaudit/nonattest services we perform, including preparation of financial statements,for(a) making all management decisions and performing all management functions; (b)assigning an individual with suitable skills,knowledge,and experience,preferably within senior management, to oversee the services; (c) evaluating the adequacy of the services performed; (d) evaluating and accepting responsibility for the results of the services performed; and (e) establishing and maintaining internal controls,including monitoring ongoing activities. h. With regard to the supplementary information referred to above: (a) for the preparation of the supplementary information in accordance with the applicable criteria; (b) to provide us with the appropriate written representations regarding supplementary information, (c) to include our report on the supplementary information in any document that contains the supplementary information and that indicates that we have reported on such supplementary information; and (d) to present the supplementary information with the audited consolidated financial statements, or if the supplementary information will not be presented with the audited consolidated financial statements, to make the audited financial statements readily available to the Intended users of the supplementary information no later than the date of issuance by you of the supplementary information and our report thereon. Brushy Creek Regional Utility Authority,Inc. August 2,2017 Page 4 During the course of our engagement,we will request information and explanations from management regarding the Authority's operations,internal controls,future plans,specific transactions and accounting systems and procedures.At the conclusion of our engagement,we will require,as a precondition to the issuance of our report, that management provide certain representations in a written representation letter.The Authority agrees that as a condition of our engagement to perform an audit that management Mi. to the best of its knowledge and belief, be truthful, accurate and complete In all representations made to us during the course of the audit and in the written representation letter. The procedures we perform in our engagement and the conclusions we reach as a basis for our report well be heavily influenced by the written and oral representations that we receive from management.False or misleading representations could cause us to expend unnecessary efforts in the audit; or, worse, could cause a material error or a fraud to go undetected by our procedures. Reporting We will issue a written report upon completion of our audit of the Authority's basic financial statements. Our report will be addressed to the governing body of the Authority. We cannot provide assurance that unmodified opinions will be expressed.Circumstances may arise in which it is necessary for us to modify our opinions, add an emphasis-of-matter or other-matter paregroph(s), or withdraw from the engagement. Other This engagement letter shall be construed and enforced for all purposes pursuant to the laws of the State of Texas.Venue shall be Williamson County,Texas. We understand that your employees will prepare all confirmations we request and will locate any documents or invoices selected by us for testing. This letter agreement may be terminated at any time at the option of either party, without future prospective liability for performance upon giving thirty(30) days written notice thereof. In the unlikely event that circumstances occur which we in our sole discretion believe could create a conflict with either the ethical standards of our firm or the ethical standards of our profession in continuing our engagement,we may suspend our services until a satisfactory resolution can be achieved or we may resign from the engagement.We will notify you of such conflict as soon as practicable, and will discuss with you any possible means of resolving them prior to suspending our services. The hiring of or potential employment discussions with any of our personnel could impair our independence. Accordingly,you agree to inform the engagement partner prior to any such potential employment discussions taking place. Both of us agree that any dispute between you and Weaver and Tidwell, L.L.P., arising from the engagement, this agreement, or the breach of it, may, if negotiations and other discussion tail be first submitted to mediation in accordance with the provisions of the Commercial Mediation Rules of the American Arbitration Association (AAA) then in effect. Both of us agree to conduct any mediation in good faith and make reasonable efforts to resolve any dispute by mediation. We agree to conduct the mediation in Austin,Texas or another mutually agreed upon location. Brushy Creek Regional Utility Authority,Inc. August 2,2017 Page 5 If any term of this engagement letter or the application thereof to any circumstances shall be ruled invalid or unenforceable, the validity or enforceability of the remainder of this engagement letter shall not be affected thereby,and each of the other terms,provisions,and conditions of this engagement letter shall be valid and enforceable to the fullest extent permitted by law.A waiver regarding a breach of any term, provision, or condition of this engagement tetter given by either party shall be effective only in that instance,shall not be construed as a bar or waiver of any right on any other occasion,and shall not act as a waiver of any other breach of this engagement letter or any some or similar breach which may occur In the future. If you Intend to publish or otherwise reproduce the financial statements and make reference to our firm. you agree to provide us with printers' proofs or masters for our review and approval before printing.You also agree to provide us with a copy of the final reproduced material for our approval before it is distributed. During the course of the engagement, we may communicate with you or your personnel via fax or e- mail, and you should be aware that communication in those mediums contains a risk of misdirected or intercepted communications. Mr. Adam McCune is the engagement partner for the audit services specified in this letter. His responsibilities include supervising our services performed as part of this engagement and signing or authorizing another qualified firm representative to sign the audit report. We expect to begin our audit procedures in October 2017 and issue our report In December 2017. We estimate that the fee for our audit will be $30,300. The fee estimate is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. If significant addittonat time is necessary, we will discuss It with you and arrive at a new fee estimate before we incur the additional costs. Our invoices for these fees will be rendered each month as work progresses and are payable on presentation.Our fee is based upon the complexity of the work to be performed and the tasks required. Payments are due in compliance with the Texas Local Government Code. During the course of the audit we may observe opportunities for economy in,or Improved controls over. your operations. We will bring such matters to the attention of the appropriate level of management, either orally or in writing. The audit documentation for this engagement is the property of Weaver and Tidwell,L.L.P.and constitutes confidential information. However, we may be requested to make certain audit documentation available to regulators or other outside parties pursuant to authority given to It by law or regulation,or to peer reviewers.If requested,access to such audit documentation will be provided under the supervision of Weaver and Tidwell,L.L.P.'s personnel.Furthermore,upon request,we may provide copies of selected audit documentation to regulators or other outside parties. The regulators or other outside parties may intend, or decide, to distribute the copies of information contained therein to others, including other governmental agencies. Brushy Creek Regional Utility Authority,Inc. August 2,2017 Page b Please sign and return the last page of this letter to indicate your acknowledgment of, and agreement with,the arrangements for our audit of the financial statements including our respective responsibilities. We appreciate the opportunity to be your Financial statement auditors and look forward to working with you and your staff. e• )A u� q�nc� —140 -,,f f f WEAVER AND TIDWELL,L.L.P. ACM:mIm cc: Board of Directors Brushy Creek Regional Utility Authority, Inc. RESPONSE: This letter correctly sets forth the understanding. Acknowledged and agreed on lahalf of Brushy Creek Regional Utility Authority,Inc.by: Signature: Title: lfiQ Q P.6' Date: Monique Adams From: Tom Gallier Sent: Friday, October 6, 2017 12:56 PM To: Adam McCane Cc: Robert Powers;Susan Morgan; Kent Meredith; Monique Adams; Lorie Lankford; Yonneque.Zeno@cedarparktexas.gov; Becca Thibodaux;Jodi Levie Subject: Executed FY 2017 Engagement Letter Attachments: Weaver Engagement Letter 20171006.pdf Adam, Please see the attached executed FY 2017 engagement fetter. Thanks, Tom Tom Gallier, General Manager Brushy Creek Regional Utility Authority(SCRUA) Physical Address: 1906 Hur Industrial Blvd. Cedar Park, 7X 78613 Mailing Address: 221 E. Main St. Round Rock, TX 78664 Cell.•(512)788-2036 Fax:(512)218-7097 e-mail:tagAkn2kn61or7 i BCRUA Time Schedule for Audit Procedures For Period Ended 9/30/2097 Reguested Need by Received Engagement letter 9/30/2017 Access to OneDrive site(username&password) 9/30/2017 List of any new bank/investment accounts with account numbers 10/1/2017 Signed bank&debt confirmations 10/15/2017 QuickBooks file 11/6/2017_ Draft compiled financial statements as of 09.30.17 _ 11/6/2017 Bank investment account reconciliations as of 09.30.17 11/13/2017 Master schedule of final cost allocation percentages by phase and project line item in effect for FY 2017 11/13/2017 Detail accounts payable/receivable listing 11/13/2017 Original and final amended budget for FY17 11/13/2017 Capitalized interest schedule 11/13/2017 Bond interest accrual schedule 11/13/2017 Due to cities schedule 11/13/2017 Depreciation schedules,and list of new assets or assets moved out of CIP,if applicable 11/13/2017 Schedule of any additional equity contributions made by cities,if applicable 11/13/2017 Copies of any minutes, new resolutions,contracts,contract amendments,leases,policies,etc.not available through OneDrive or website 11/13/2017 Copies of release of funds requests for TWDB funds with backup documentation 11/13/2017 Final compiled financial statements as of 09.30.15 11/30/2017 Bank/investment account statements(with images of cleared items) for October 2016—October 2017 _ 11/13/2017 MD&A revisions additions 12/8/2017 Bank/investment account statements (with images of cleared items) for November 2017 12/15/2017