BCRUA_R-13-06-19-7ARESOLUTION NO. R-13-06-19-7A
WHEREAS, the Brushy Creek Regional Utility Authority, Inc. (BCRUA) desires to enter into
a Multi-Year Agreement with Brockway, Gersbach, Franklin and Niemeier, P.e. for auditing services,
N ow Therefore
BE IT RESOLVED BY THE BRUSHY CREEK REGIONAL UTILITY AUTHORITY,
That the Board President is hereby authorized and directed to execute on behalf of the BCRUA
a Multi-Year Agreement with Brockway, Gersbach, Franklin and Niemeier, P.C., a copy of same being
attached hereto as Exhibit "A" and incorporated herein for all purposes.
The Board hereby finds and declares that written notice of the date, hour, place and subject of
the meeting at which this Resolution was adopted was posted and that such meeting was open to the
public as required by law at all times during which this Resolution and the subject matter hereof were
discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551,
Texas Government Code, as amended.
RESOLVED this 19th day of June, 2013.
ATTEST:
Z'\BCRUA\Board Packets\Packet Documenls\20\3\061913\Res. BcRUA -Multi-Year Agmt w-Brockway, Gersbach, (00276767),DOC/rmc
BROCKWAY
GERSBACH
FRANKLIN &
NIEMEIER,P.e.
CERTIFIED PUBLIC ACCOUNTANTS
May 7,2013
Brushy Creek Regional Utility Authority, Inc.
221 E Main St
Round Rock, Texas 78664
We are pleased to confirm our understanding of the services we are to provide Brushy Creek Regional Utility
Authority, Inc. (the BCRUA) for the year ended September 30,2013. We will audit the financial statements of the
business-type activities which comprise the basic financial statements of BCRUA as of and for the year ended
September 30,2013. Accounting standards generally accepted in the United States of America provide for certain
required supplementary information (RSI), such as management's discussion and analysis (MD&A), to
supplement BCRUA'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 BCRUA'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 our audit of the basic financial statements. We will not express an opinion or
provide any assurance on .the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance. The following RSI is required by generally accepted
accounting principles and will be subjected to certain limited procedures, but will not be audited:
I) Management's Discussion and Analysis
2) Budgetary Comparison Schedules
Audit Objectives
The objective of our audit is the expression of opinions as to whether your basic financial statements are fairly
presented, in all material respects, in conformity with U.S. generally accepted accounting principles and to report
on the fairness of the supplementary information referred to in the second paragraph when considered in relation
to the financial statements as a whole. Our audit will be conducted in accordance with auditing standards
generally accepted in the United States of America and the standards for financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States, and will include tests of the
accounting records of BRCUA and other procedures we consider necessary to enable us to express such opinions.
We cannot provide assurance that unmodified opinions will be expressed. Circumstances may arise in which it is
necessary for us to modify our opinions or add emphasis-of-matter or other-matter paragraphs. If our opinions on
the financial statements are other than unmodified, we will discuss the reasons with you in advance. If, for any
reason, we are unable to complete the audit or are unable to form or have not formed opinions, we may decline to
express opinions or to issue a report as a result of this engagement.
3520 SW H.K. DODGEN LOOP. TEMPLE, TEXAS 76504. 254.773.9907 • FAX 254.773.1570
WWW.TEMPlECPA.COM
Brushy Creek Regional Utility Authority, Inc.
Page Two
We will also provide a report (that does not include an opinion) 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 as required by Government
Auditing Standards. The reports on internal control and compliance will each include a paragraph that states that
the purpose of the report is solely to describe 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, and that the report is an integral part of an audit perfonned in
accordance with Government Auditing Standards in considering internal control over financial reporting and
compliance. The paragraph will also state that the report is not suitable for any other purpose. If during our audit
we become aware that BRCUA is subject to an audit requirement that is not encompassed in the tenns of this
engagement, we will communicate to management and those charged with governance that an audit in accordance
with u.s. generally accepted auditing standards and the standards for financial audits contained in Government
Auditing Standards may not satisfy the relevant legal, regulatory, or contractual requirements.
Management Responsibilities
Management is responsible for the basic financial statements and all accompanying infonnation as well as all
representations contained therein. As part of the audit, we will assist with preparation of your financial statements
and related notes. You will be required to acknowledge in the written representation letter our assistance with
preparation of the financial statements and that you have reviewed and approved the financial statements and
related notes prior to their issuance and have accepted responsibility for them. You agree to assume all
management responsibilities for any non audit 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 evaluating and
monitoring ongoing activities, to help ensure that appropriate goals and objectives are met; for the selection and
application of accounting principles; and for the preparation and fair presentation of the financial statements in
confonnity with U.S. generally accepted accounting principles.
Management is also responsible for making all financial records and related infonnation available to us and for
ensuring that management is reliable and financial infonnation is reliable and properly recorded. You are also
responsible for providing us with (l) access to all infonnation of which you are aware that is relevant to the
preparation and fair presentation of the financial statements, (2) additional infonnation that we may request for
the purpose of the audit, and (3) unrestricted access to persons within the government from whom we detennine it
necessary to obtain audit evidence.
Your responsibilities include adjusting the financial statements to correct material misstatements and for
confinning 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.
You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and
for infonning us about all known or suspected fraud affecting the government involving (1) management, (2)
employees who have significant roles in internal control, and (3) others where the fraud could have a material
effect on the financial statements. Your responsibilities include infonning us of your knowledge of any
allegations of fraud or suspected fraud affecting the government received in communications from employees,
fonner 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 for taking timely and
appropriate steps to remedy any fraud, violations of contracts or grant agreements, or abuse that we may report.
Brushy Creek Regional Utility Authority, Inc.
Page Three
You are responsible for the preparation of the 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·
[incl ude the audited financial statements with any presentation of the supplementary information that includes our
report thereon OR make the audited financial statements readily available to users of the supplementary
information no later than the date the supplementary information is issued with our report thereon]. Your
responsibilities include acknowledging to us in the written representation letter that (I) you are responsible for
presentation of the supplementary information in accordance with GAAP; (2) that you believe the supplementary
information, including its form and content, is fairly presented in accordance with GAAP; (3) 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); and (4) you have disclosed to us any significant assumptions or interpretations
underlying the measurement or presentation of the supplementary information.
Management is responsible for establishing and maintaining a process for tracking the status of audit findings and
recommendations. Management is also responsible for identifying 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 other
studies. You are also responsible for providing management's views on our current findings, conclusions, and
recommepdations, 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 fmancial
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 (I)
errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental
reguhltions 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 of the inherent limitations of an audit, combined with the inherent limitations of internal control, and
because we will not perform a detailed examination of all transactions, there is a risk that material misstatements
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 Government Auditing Standards. In addition, an audit is not
designed to detect immaterial misstatements or violations of laws or governmental regulations that do not have a
direct and material effect on the financial statements. 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 atteption. 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 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.
Brushy Creek Regional Utility Authority, Inc.
Page Four
Audit Procedures-Internal Control
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 perfonned 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 perfonned, 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.
An audit is not designed to provide assurance on internal control or to identify significant deficiencies or material
weaknesses. However, during the audit, we will communicate to management and those charged with governance
internal control related matters that are required to be communicated under AICPA professional standards and
Government Auditing Standards.
Audit Procedure~ompliance
As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement,
we will perfonn tests of BRCUA's compliance with the provisions of applicable laws, regulations, contracts,
agreements, and grants. However, the objective of our audit 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. .
Engagement 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 infonnation about you with these service providers, but remain committed to
maintaining the confidentiality and security of your infonnation. Accordingly, we maintain internal policies,
procedures, and safeguards to protect the confidentiality of your personal infonnation. In addition, we will secure
confidentiality agreements with all service providers to maintain the confidentiality of your infonnation and we
will take reasonable precautions to detennine that they have appropriate procedures in place to prevent the
unauthorized release of your confidential infonnation 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 infonnation with the third-party service provider. Furthennore, we will remain responsible for the
work provided by any such third-party service providers.
We understand that your employees will prepare all cash or other confinnations we request and will locate any
documents selected by us for testing.
We will provide copies of our reports to BRCUA; however, management is responsible for distribution of the
reports and the financial statements. Unless restricted by law or regulation, or containing privileged and
confidential infonnation, copies of our reports are to be made available for public inspection.
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Brushy Creek Regional Utility Authority, Inc.
Page Five
The audit documentation for this engagement is the property of Brockway, Gersbach, Franklin & Niemeier, 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 state or federal agency or its designee, a federal
agency providing direct or indirect funding, or the U.S. Government Accountability Office for purposes of a
quality review of the audit, to resolve audit findings, or to carry out oversight responsibilities. We will notify you
of any such request. If requested, access to such audit documentation will be provided under the supervision of
Brockway, Gersbach, Franklin & Niemeier, 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
date or for any additional period requested by the federal award agency. If we are aware that a federal awarding
agency or auditee is contesting an audit finding, we will contact the party(ies) contesting the audit finding for
guidance prior to destroying the audit documentation.
We expect to begin our audit the first of November 2013 and to issue our reports in January 2014. Steve
Niemeier is the engagement partner and is responsible for supervising the engagement and signing the reports or
authorizing another individual to sign them.
Our fee for these services will be at our standard hourly rates plus out-of-pocket costs (such as report reproduction,
typing, postage, travel, copies, telephone, etc.) 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 30 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, 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. Based on our preliminary estimates and the support we have received in the past, the fees should not
exceed $ 24,000 including out-of-pocket expense. See attached Appendix A for fee estimates for the year ending
September 30,2014 and September 30,2015.
We appreciate the opportunity to be of service to BCRUA 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.
Sinq /1
Bro~eich' I'1r....,.ank~'~li~;&~.
RESPONSE:
This l~ orre tly sets forth the understanding of Brushy Creek Regional Utility Authority, Inc.
Title Date
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Brushy Creek Regional Utility Authority, Inc.
Appendix A
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I.Schedule of professional fees and expenses listed below serves to document the total all inclusive maximum price
based on the continued level of assistance provided by the staff of the City of Cedar Park, Texas. ,
The total all inclusive maximum prices for the 2013, 2014 and 2015 engagements are as follows:
2013 $ 24,000
2014 $ 24.500
2015 $ 25,000
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