BCRUA_R-16-07-20-7E RESOLUTION NO. R-16-07-20-7E
WHEREAS, it is necessary for the Brushy Creek Regional Utility Authority, Inc. (BCRUA) to
conduct an annual audit of the BCRUA's financial records; and
WHEREAS, the accounting firm of Weaver and Tidwell, LLP has submitted an engagement
letter to provide said audit for the fiscal year ending September 30, 2016; and
WHEREAS, the BCRUA wishes to enter into an engagement letter with Weaver and Tidwell,
LLP for auditing services, Now 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
an engagement letter with Weaver and Tidwell, LLP to conduct said audit, 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 20th day of July, 2016.
G L
JON LUXE Piesi nt
Brushy Creek gional Utility Authority
ATTEST:
Roy Abruzzese, Secretar
C:\Users\madams\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content0udook\VWEYNNPO\Res.BCRUA-Engagement letter w-Weaver and Tidwell LLP-Annual Financial Audit
Servcies(00360583rA08F8).doc
weaver
sory
July 6, 2016
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, 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 (the Authority), as of September 30, 2016, 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 confirm our acceptance and our understanding
of this audit engagement by means of this letter.
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 this
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, such as combining financial statements, 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 certain additional procedures, including comparing and
reconciling the supplementary information 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.
f F• r,; tl �r.�
AN INDEPENDENT MEMBER OF WEAVER AND TIDWELL,L.L.P. 1601 SOUTH MOPAC EXPRESSWAY,SUITE D250,AUSTIN,TX 78746
BAKER TILLY INTERNATIONAL CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS P:512.609.1900 F:512.609.1911
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, General Manager
July 6, 2016
Page 2
Audit Objectives
The objective of our audit is the expression of an opinion 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. 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. 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 or add emphasis-
of-matter or other-matter paragraphs. If our opinions on the financial statements or compliance
are other than modified, 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.
Auditor Responsibilities
We will conduct our audit in accordance with auditing standards generally accepted in the United
States of America(U.S. GAAS) and the standards applicable to financial audits contained in
Government Auditing Standards. Those standards require that we plan and perform 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.
Because of the inherent limitations of an audit,together with the inherent limitations of internal
control, an unavoidable risk that some material misstatements or noncompliance may not be
detected exists, even though the audit is properly planned and performed in accordance with
U.S. GAAS and Government Auditing Standards issued by the Comptroller General of the
United States of America. 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
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, General Manager
July 6, 2016
Page 3
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 making 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.
As part of obtaining reasonable assurance about whether the financial statements are free of
material misstatement, we will perform tests of the Authority's compliance with certain
provisions of laws, regulations, contracts, and grants that could have a direct and material effect
on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions is not an objective of our audit, and accordingly, we will not
express such an opinion.
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 provider.
Management's Responsibilities
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;
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, General Manager
July 6, 2016
Page 4
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;
c. For safeguarding assets;
d. For identifying all federal and state awards expended during the period;
e. For following up and taking corrective action on current year audit findings and
preparing a corrective action plan for such findings;
f. For making the auditor aware of any significant vendor relationships where the vendor is
responsible for program compliance;
g. To provide us with:
i. Access to all information of which management is aware that is relevant to the
preparation and fair presentation of the financial statements, and relevant to federal
and state award programs, 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.
h. 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;
i. 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;
j. For confirming your understanding of your responsibilities as defined in this letter to us
in your management representation letter;
k. With respect to any nonattest services we perform, including the preparation of the
financial statements, for(a) making all management decisions and performing all
management functions; (b) assigning a competent individual 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; and
1. 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
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, General Manager
July 6, 2016
Page 5
supplementary information; and (d)to present the supplementary information with the
audited financial statements, or if the supplementary information will not be presented
with the audited 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.
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 will,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 will 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. Thus,the Authority agrees that we will not be liable
for any damages or otherwise responsible for any misstatements in the Authority's financial
statements that we may fail to detect as a result of false or misleading representations that are
made to us by management. Moreover, the Authority agrees to indemnify and hold us harmless
from any claims and liabilities, including reasonable attorneys' fees, expert fees, and costs of
investigation and defense, arising out of or related to this engagement if false or misleading
representations are made to us by any member of the Authority's management.
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
paragraph(s), or withdraw from the engagement.
In accordance with the requirements of Government Auditing Standards, we will also issue a
written report describing the scope of our testing over internal control over financial reporting
and over compliance with laws, regulations, and provisions of grants and contracts, including the
results of that testing. However, providing an opinion on internal control and compliance over
financial reporting will not be an objective of the audit and,therefore, no such opinion will be
expressed.
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, General Manager
July 6, 2016
Page 6
Other
We understand that your employees will prepare all confirmations we request and will locate any
documents or invoices selected by us for testing.
The initial term of the resulting agreement shall be one (1) consecutive twelve (12) month period
from the effective date. The engagement may extend for up three (3) additional terms, not to
exceed twelve (12) months each, provided both parties agree in writing. A new engagement
letter will be executed prior to the beginning of each succeeding twelve (12) month term.
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.
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.
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 fail 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.
Mediation is not a pre-condition to the arbitration provided for below and the failure or refusal
by either party to request or participate in mediation shall not preclude the right of either party to
initiate arbitration. We agree to conduct the mediation in Austin, Texas or another mutually
agreed upon location.
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 letter given by either
party shall be effective only in that instance, shall not be construed as a bar or waiver of any right
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, General Manager
July 6, 2016
Page 7
on any other occasion, and shall not act as a waiver of any other breach of this engagement letter
or any same 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 McCane 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.
The fee for our audit will be in an amount not to exceed $29,500. The 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. Our invoices for these
fees will be rendered each month as work progresses. Our fee is based upon the complexity of
the work to be performed and the tasks required. Fees for our services are due 30 days from
receipt of our invoice. Payments are due in compliance with the Texas Local Government Code.
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 and federal agencies and the U.S. Government
Accountability Office 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 these agencies and regulators. The regulators and agencies may
intend, or decide,to distribute the copies of information contained therein to others, including
other governmental agencies. We agree to retain our audit documentation or work papers for a
period of at least five years from the date of our report.
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.
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, General Manager
July 6, 2016
Page 8
In accordance with the requirements of Government Auditing Standards, we have attached a
copy of our latest external peer review report of our firm for your consideration and files.
Please sign and return the attached copy of this letter to indicate your acknowledgment of, and
agreement with,the arrangements for our audit of the financial statements compliance over
major federal award programs including our respective responsibilities.
We appreciate the opportunity to be your financial statement auditors and look forward to
working with you and your staff.
Respectfully,
WEAVER AND TIDWELL, L.L.P.
ACM:mlm
RESPONSE:
This letter correctly sets forth the understanding.
Acknowledged and agreed on behalf of Brushy Creek Regional Utility Authority, Inc. by:
Signature:
Title:
Date:
THE FOLLOWING PAGES CONSIST OF THE
FINAL ADOPTED DOCUMENT
DATE: July 15, 2016
SUBJECT: BCRUA Board Meeting—July 20,2016
ITEM: 7E. Consider a resolution authorizing the President to execute an agreement with
Weaver and Tidwell, LLP for Annual Financial Audit Services.
PRESENTER: Tom Gallier, General Manager
BACKGROUND INFO:
BCRUA's existing contract for audit services with Brockway, Gersbach, Franklin & Niemeier, P.C. expired
with the FY 2015 — 2016 financial audit. Working with financial staff from all three member cities, a
Request for Qualifications was issued by the City of Cedar Park, on BCRUA's behalf, in early May.
Responses were received from the following firms:
• Maxwell, Locke&Ritter, L.L.P.
• Weaver&Tidwell, L.L.P.
• Brockway, Gersbach, Franklin & Niemeier, P.C.
• Singleton, Clark&Company, P.C.
A review committee was selected with financial staff representatives from all three BCRUA member cities.
They were asked to complete an RFQ Grading Sheet, that graded each respondent on the following
criteria:
• Qualifications and Availability
• Proposed Staff
• Similar Project Experience
• Project Schedule
The committee met on the afternoon of Wednesday,June 1St, at the conclusion of the regular monthly
Operating Committee meeting. Cedar Park's Purchasing Manager collected all completed rating sheets,
and tabulated them. As a result, the committee selected Weaver&Tidwell, L.L.P. as the highest ranked
RFQ.
Staff then initiated negotiations with Weaver&Tidwell,L.L.P.,and have agreed to a one year engagement,
with up to three additional one year extensions (Four years total). Engagement letters will be brought
before the Board annually for Board approval, during the four year contract period.
Staff and the Operating Committee financial members recommend approval of the agreement.
weaver
Assurance•Tax•Advisory
July 6, 2016
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, 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 (the Authority), as of September 30, 2016, 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 confirm our acceptance and our understanding
of this audit engagement by means of this letter.
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 this
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, such as combining financial statements, 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 certain additional procedures, including comparing and
reconciling the supplementary information 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.
AN INDEPENDENT MEMBER OF WEAVER AND TIDWELL,L.L.P. 1601 SOUTH MOPAC EXPRESSWAY,SUITE D250,AUSTIN,TX 78746
BAKER TILLY INTERNATIONAL CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS P:512.609.1900 F:512.609.1911
ic-
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, General Manager
July 6, 2016
Page 2
Audit Objectives
The objective of our audit is the expression of an opinion 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. 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. 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 or add emphasis-
of-matter or other-matter paragraphs. If our opinions on the financial statements or compliance
are other than modified,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.
Auditor Responsibilities
We will conduct our audit in accordance with auditing standards generally accepted in the United
States of America(U.S. GAAS) and the standards applicable to financial audits contained in
Government Auditing Standards. Those standards require that we plan and perform 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.
Because of the inherent limitations of an audit,together with the inherent limitations of internal
control, an unavoidable risk that some material misstatements or noncompliance may not be
detected exists, even though the audit is properly planned and performed in accordance with
U.S. GAAS and Government Auditing Standards issued by the Comptroller General of the
United States of America. 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
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, General Manager
July 6, 2016
Page 3
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 making 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.
As part of obtaining reasonable assurance about whether the financial statements are free of
material misstatement,we will perform tests of the Authority's compliance with certain
provisions of laws, regulations, contracts, and grants that could have a direct and material effect
on the determination of financial statement amounts. However,providing an opinion on
compliance with those provisions is not an objective of our audit, and accordingly, we will not
express such an opinion.
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 provider.
Management's Responsibilities
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;
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, General Manager
July 6, 2016
Page 4
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;
c. For safeguarding assets;
d. For identifying all federal and state awards expended during the period;
e. For following up and taking corrective action on current year audit findings and
preparing a corrective action plan for such findings;
f. For making the auditor aware of any significant vendor relationships where the vendor is
responsible for program compliance;
g. To provide us with:
i. Access to all information of which management is aware that is relevant to the
preparation and fair presentation of the financial statements, and relevant to federal
and state award programs, 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.
h. 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;
i. 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;
j. For confirming your understanding of your responsibilities as defined in this letter to us
in your management representation letter;
k. With respect to any nonattest services we perform, including the preparation of the
financial statements, for(a) making all management decisions and performing all
management functions; (b) assigning a competent individual 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; and
1. 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
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, General Manager
July 6, 2016
Page 5
supplementary information; and(d)to present the supplementary information with the
audited financial statements, or if the supplementary information will not be presented
with the audited 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.
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 will,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 will 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. Thus,the Authority agrees that we will not be liable
for any damages or otherwise responsible for any misstatements in the Authority's financial
statements that we may fail to detect as a result of false or misleading representations that are
made to us by management. Moreover, the Authority agrees to indemnify and hold us harmless
from any claims and liabilities, including reasonable attorneys' fees, expert fees, and costs of
investigation and defense, arising out of or related to this engagement if false or misleading
representations are made to us by any member of the Authority's management.
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
paragraph(s), or withdraw from the engagement.
In accordance with the requirements of Government Auditing Standards, we will also issue a
written report describing the scope of our testing over internal control over financial reporting
and over compliance with laws, regulations, and provisions of grants and contracts, including the
results of that testing. However,providing an opinion on internal control and compliance over
financial reporting will not be an objective of the audit and,therefore, no such opinion will be
expressed.
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, General Manager
July 6, 2016
Page 6
Other
We understand that your employees will prepare all confirmations we request and will locate any
documents or invoices selected by us for testing.
The initial term of the resulting agreement shall be one (1) consecutive twelve (12) month period
from the effective date. The engagement may extend for up three (3) additional terms, not to
exceed twelve (12) months each,provided both parties agree in writing. A new engagement
letter will be executed prior to the beginning of each succeeding twelve (12) month term.
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.
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.
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 fail 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.
Mediation is not a pre-condition to the arbitration provided for below and the failure or refusal
by either party to request or participate in mediation shall not preclude the right of either party to
initiate arbitration. We agree to conduct the mediation in Austin, Texas or another mutually
agreed upon location.
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 letter given by either
party shall be effective only in that instance, shall not be construed as a bar or waiver of any right
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, General Manager
July 6, 2016
Page 7
on any other occasion, and shall not act as a waiver of any other breach of this engagement letter
or any same 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 McCane 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.
The fee for our audit will be in an amount not to exceed $29,500. The 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. Our invoices for these
fees will be rendered each month as work progresses. Our fee is based upon the complexity of
the work to be performed and the tasks required. Fees for our services are due 30 days from
receipt of our invoice. Payments are due in compliance with the Texas Local Government Code.
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 and federal agencies and the U.S. Government
Accountability Office 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 these agencies and regulators. The regulators and agencies may
intend, or decide,to distribute the copies of information contained therein to others, including
other governmental agencies. We agree to retain our audit documentation or work papers for a
period of at least five years from the date of our report.
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.
Brushy Creek Regional Utility Authority, Inc.
Mr. Tom Gallier, General Manager
July 6,2016
Page 8
In accordance with the requirements of Government Auditing Standards,we have attached a
copy of our latest external peer review report of our firm for your consideration and files.
Please sign and return the attached copy of this letter to indicate your acknowledgment of, and
agreement with,the arrangements for our audit of the financial statements compliance over
major federal award programs including our respective responsibilities.
We appreciate the opportunity to be your financial statement auditors and look forward to
working with you and your staff.
Respectfully,
l t)SWIP�I a4 Zf P.
WEAVER AND TIDWELL, L.L.P.
ACM:mlm
RESPONSE:
This letter correctly sets forth the understanding.
Acknowledged and agreed on behalf of Brushy Creek Regional Utility Authority, Inc. by:
Signature: /
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Title: Ch L
Date: / �l