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BCRUA_R-21-08-25-6B RESOLUTION NO. R-21-08-25-6B 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, 2021; 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 BOARD OF DIRECTORS OF 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 25th day of August, 2021. NACOLE TH MPSON, Pre 'dent Brushy Creek Regional Utility Authority ATTEST: RE "E FLORES, ecr ary hupsaroundrocktexas sharepwnt com'snesrAdmin sirationMepartmeni FilesHSCRk1AlRoard PackerslPaeket PocumentV2021-'0825202 t'6B Res BCRUA Engagement letter--Weaver and Tidwell,LLP Annual Financial Audit Sermes(00479381 xA08F8)doc we ave r Assuran •Advisory August 6, 2021 Brushy Creek Regional Utility Authority, Inc. Ms. Karen Bondy, General Manager and Board of Directors 221 East Main Street Round Rock, Texas 78664 Dear Ms. Bondy and Board of Directors: You have requested that Weaver and Tidwell, L.L.P ("Weaver", "our", "us", and "we") audit the financial statements of the business-type activities of Brushy Creek Regional Utility Authority, Inc ("BCRUA"), as of September 30, 2021, and for the year then ended and the related notes to the financial statements, which collectively comprise BCRUA's basic financial statements as listed in the table of contents. Accounting principles generally accepted in the United States of America ("U.S. GAAP"), as promulgated by the Governmental Accounting Standards Board ("GASB") require that management's discussion and analysis and budgetary comparison information, among other items, be presented to supplement the basic financial statements.Such information,although not a part of the basic financial statements, is required by GASB, which 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 ("U.S. GARS"). 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.The following RSI is required by U.S.GAAP.This RSI will be subjected to certain limited procedures but will not be audited: 1. Management's discussion and analysis Supplementary information other than RSI will accompany the BCRUA's basic financial statements. We will subject the following supplementary information 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 to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and additional procedures in accordance with U.S. GARS. We intend to provide an opinion on the following supplementary information in relation to the financial statements as a whole: 1. Combining statement of net position 2. Combining statement of revenues, expenses and changes in net position We are pleased to confirm our acceptance and our understanding of this audit engagement by means of this letter. Weaver and Tidwell, L.L.P. EXHIBUTO CPAs AND ADVISORS I WEAVER.COM Brushy Creek Regional Utility Authority, Inc. August 6,2021 Page 2 of 9 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 U.S.GAAP and to report on the fairness of the supplementary information referred to above when considered in relation to the basic financial statements as a whole. The objective also includes reporting on internal control related to the basic financial statements and compliance with the provisions of laws, regulations, contracts,and grant agreements, noncompliance with which could have a material effect on the basic financial statements in accordance with Government Auditing Standards issued by the Comptroller General of the United States of America ("GAGAS"). Auditor Responsibilities We will conduct our audit in accordance with U.S. GAAS and GAGAS. 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 basic financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the basic 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 basic 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.GAAS and GAGAS. In addition, an audit is not designed to defect 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 making our risk assessments, we consider internal control relevant to the BCRUA's preparation and fair presentation of the basic 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 Brushy Creek Regional Utility Authority, Inc. August 6, 2021 Page 3 of 9 effectiveness of the BCRUA'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 basic financial statements that we have identified during the audit. 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. Rebecca Goldstein is the engagement partner for the audit services specified in this letter,and is responsible for supervising our services performed as part of this engagement and signing or authorizing another qualified firm representative to sign the audit report. We may from time to time,and depending on the circumstances,use third-party service providers in performing this engagement. 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. We expect to begin our audit procedures in November 2021,and issue our report in January 2022. We will issue a written report upon completion of our audit of the BCRUA's basic financial statements. Our report will be addressed to the Board of Directors of the BCRUA. 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. If our opinions on the financial statements or compliance 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 withdraw from this engagement. As part of obtaining reasonable assurance about whether the basic financial statements are free of material misstatement, we will perform tests of the BCRUA's compliance with the provisions of applicable laws,regulations,contracts,and agreements. 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 accordance with the requirements of GAGAS,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. Non-Attest Services We will perform non-attest services which include assistance with financial statement preparation, including specific reporting journal entries as necessary.These nonaudit/nonottest services do not Brushy Creek Regional Utility Authority, Inc_ August 6, 2021 Page 4 of 9 constitute an audit under GAGAS and such services will not be conducted in accordance with GAGAS. Management Responsibilities Our audit wi'I be conducted on the basis that management and, when appropriate, those charged with governance,acknowledge and understand that they have responsibility'. a. for the preparation and fair presentation of the basic financial statements in accordance with the framework described in Audit Objectives above: b. for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of basic financial statements that are free from material misstoiement, whether due to error, fraudulent financial reporting. misappropriation of assets, or violations of laws, governmental regulations, grant agreements, or contractus' agreements; and c. 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 such as records. documentation, and other matters; il, additional information that we may request from management for the purpose of the audit;and iii. unrestricted access to persons within the BCRUA from whom we determine it necessary to obtain audit evidence. d. for including the auditor's report, and our report on any supplementary information if described above, in any document containing the basic financial statements that indicates that such financial statements have been audited by the BCRUA's auditor: e. for identifying and ensuring that the BCRUA complies with the laws and regulations applicable to its activities: 1. for adjusting the basic 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 years under audit are immaterial, both individually and in the aggregate, to the basic financial statements as a whole: g. for maintaining adequate records, selecting and applying accounting principles, and safeguarding assets: 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 basic financial statements, or if the supplementary information will not be presented with the audited bask financial statements, to make the audited basic financial Brushy Creek Regional Utility Authority, Inc. August 6, 2021 Page 5 of 9 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;and i. informing us of facts that may affect the basic financial statements of which you may become aware during the period from the date of the auditor's report to the date the basic financial statements are issued. We understand that your employees will prepare all confirmations we request and will locate any documents or support for any other transactions we select for testing. If we agree herein or otherwise to perform any non-attest services (such as tax services or any other nota-altest services),you agree to assume all management responsibilities for those services; oversee the services by designating an individual, preferably from senior management, with suitable skill, knowledge, or experience; evaluate the adequacy and results of the services; and accept responsibility for them. GAGAS require that we document an assessment of the skills, knowledge, and experience of management, should we participate in any form of preparation of the basic financial statements and related schedules or disclosures as these actions are deemed a no naudif/nona I test service. During the course of our engagement, we will request information and explanations from management regarding the BCRUA'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 BCRUA 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 leiter.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. Fees and Invoicing We estimate that the fee for this engagement will be $34,300. The fee estimate is based on anticipated cooperation from all involved and the assumption that unexpected circumstances will not be encountered during the engagement. This is only an estimate and the fee for these services will be determined by the complexity of the work performed and the tasks required. If significant additional time is necessary, we will discuss the reasons with you and arrive of a new tee estimate before we incur the additional costs. It is understood that neither our fees nor the payment thereof will be contingent upon the results of this engagement. Additionally, the fee for any term subsequent to this initial term shall not increase by more than four percent (4%) of the fee amount for the previous term for the same scope of services. In addition to the lee for our services,reasonable and necessary out-ol-pocket expenses we incur (such as parking, reproduction and printing, postage and delivery, and out-of-market travel, meals, and accommodations) will be billed at cost. At this time, we do not anticipate incurring substantial expenses. Brushy Creek Regional Utility Authority, Inc. August 6, 2021 Page 6 of 9 Our engagement fees do not include consulting on the adoption of new accounting standards and any future increased duties because of any regulatory body, auditing standard or an unknown or unplanned significant transaction. We will consult with you in the event any of these take place that may affect our fees. We will also invoice for reasonable and necessary time and out-of-pocket expenses we incur to respond to any request such as a subpoena,summons,court order, or administrative investigative demand) pertaining to this engagement in a legal matter to which we are not a party. Our time to facilitate the response will be billed at our then-current standard hourly rates,and our expenses (including attorney's fees) will be billed at cost. tf we agree to perform additional substantive services related to or arising out of the request, such matters may be the subject of a new engagement letter. Our invoices for this engagement will be rendered each month as work progresses. Our invoices are payable in accordance with Texas Government Code§ 2251.021. Ethical Conflict Resolution 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 impar our independence. Accordingly, you agree to inform the engagement partner prior to any such potential employment discussions taking place. Audit Documentatlon and Confidentiality The audit documentation we prepare pertaining to and in support of this engagement is our property and constitutes confidential information. If we are requested to make the audit documentation available to outside parties,except in the case of requests during our peer review (discussed below) or when prohibited by law or direction of law enforcement, any such requests will be discussed with you before we make the documentation available to the requesting parties. We may be requested to make certain audit documentation (working papers) available to regulators and other government agencies, pursuant to authority given by law or regulation. You should understand that responding to many such requests is mandatory. In those cases,access to such working papers will be provided under our supervision and we may, upon their request, provide the regulator or agency with copies of all or selected working papers. The requesting party may intend or decide to distribute the copies or information contained therein to others, including other regulators or agencies. You will be billed for additional fees as a result of the aforementioned work. Our firm, as well as other accounting firms, participates in a peer review program covering our audit and accounting practices. This program requires that once every three years, we subject our system of quality control to an examination by another accounting firm.As part of this process, the firm conducting our peer review will review a sample of our work. It is possible that the work we perform for you may be selected for such a review. 11 it is, our peer review firm is bound by Brushy Creek Regional Utility Authority, Inc. August 6, 2021 Page 7 of 9 professional standards to keep all information confidential and we are required to provide the required information. We will retain our audit documentation for a period of at least seven years from the date of our report. You agree that following such period, we may destroy the audit documentation without notice to you. To maintain independence, we will not act as the host of your financial or non-financial information or as your information back-up service provider. Instead, it is your responsibility to maintain a complete set of your financial and non-financial data and records. II some portion of your data and records is contained only within our files.you agree to inform us before the issuance of our report and we will provide that to you. The parties do not intend this engagement leiter to be for the benefit of any third-party. You may inform us of third-parties who will receive a copy of our audit report. Unless you inform us of such third-parties, we are not aware of who you intend to supply our audit report to and we do not anticipate other third parties' reliance upon our professional services unless expressly stated herein. During the course of the engagement, we may communicate via fax, email, or other electronic mechanism.Please be aware that communication in those mediums contains a risk of misdirected or intercepted communications. Dispute Resolution Procedure including Jury Waiver If a dispute arises out of or relates to this engagement or engagement letter,or the breach thereof, and if the dispute cannot be settled through negotiation,the parties agree first to try in good faith to settle the dispute by mediation before resorting to litigation. In such event, the parties will attempt to agree upon a location, mediator, and mediation procedures, but absent such agreement any party may require mediation in Austin, Texas, administered by the AAA under its Commercial Mediation Procedures. This engagement letter and all disputes between the parties shall be governed by, resolved,and construed in accordance with the laws of the State of Texas, without regard to conflict-of-law principles.Any action arising out of or relating to this engagement or engagement letter shall only be brought in, and each party agrees to submit and consent to the exclusive jurisdiction of, the federal or state courts situated in Tarrant County, Texas. Each party hereby irrevocably waives any right it may have to trial by jury in any proceeding arising out of or relating to this engagement or this engagement letter. Whenever possible,this engagement letter shall be interpreted in such a manner as to be effective and valid under applicable laws, regulations, or published interpretation, but it any term of this engagement letter is declared illegal, unenforceable, or unconscionable, that term shall be severed or modified and the remaining terms of the engagement letter shall remain in force. The parties agree that the court should modify any term declared to be illegal, unenforceable, or unconscionable in a manner that will retain the intended term as closely as possible. If because of a change in status or due to any other reason, any provision in this engagement letter would be prohibited by, or would impair our independence under laws, regulations or published interpretations by governmental bodies, professional organizations or other regulatory Brushy Creek Regional utility Authority, Inc. August 6,2021 Page 8 of 9 agencies,such provision shall,to that extent,be of no further force and effect and this agreement shall consist of the remaining portions. Miscellaneous In accordance with the requirements of Government Auditing Standards, we have attached a copy of the latest external peer review report of our firm for your consideration and files. We may at times provide you with documents marked as drafts. You understand that those documents are for your review purposes only. You should not rely upon those documents in any way. Although the engagement partner responsible for this engagement is a licensed certified public accountant, we inform you that we have nonlicensees who may provide services pertaining to this engagement. If you intend to make reference to our firm or include our report or any portion of it in a published document or other reproduction, and that document or other reproduction includes a version of our report or the financial statements that is assembled differently than any version we provided you or audited,you agree to provide us with printers'proofs or masters forour reviewond approval before reproducing.You also agree to provide us with a copy of the final reproduced material for our written approval before it is distributed. If, in our professional judgment, the circumstances require,we may withhold our approval.This requirement does not pertain to distributing our report or the financial statements when you do not modify their assembly or in situations where you disseminate the audited financial statements as a standalone document,such as on your website. Unless we provide you with written consent in advance of such use, the audited financial statements and our report are not intended to and should not be provided or otherwise made available for use in connection with the sale of debt or other securities. If, in our professional judgment, the circumstances require,we may withhold our consent. This engagement letter sets forth all of the agreed upon terms and conditions of our engagement with respect to the matters covered herein,and supersedes any that may have come before.This engagement letter may not be amended or modified except by further writing signed by all the parties. 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. Brushy Creek Regional Utility Authority, Inc. August 6, 2021 Page 9 of 9 We appreciate the opportunity to assist you and look forward to working with you and your team. Sincerely, UJ?aVe'l 4n.cQ ' ` r.Q� �• WEAVER AND TIDWEII, L.L.P. Austin,Texas Please sign and return a copy of this letter to indicate your acknowledgment of, and agreement with, the arrangements for our engagement as described herein, including each party's respective responsibilities. By signing below, the signatory also represents that they have been authorized to execute this agreement. Brushy Creek Regional Utility Authority, Inc. By: Printed Name: Title: Date: ORIGINAL EXECUTED DOCUMENT TO FOLLOW . . . weave rance-Tax•Advisory August 6, 2021 Brushy Creek Regional Utility Authority, Inc. Ms. Karen Bondy, General Manager and Board of Directors 221 East Main Street Round Rock,Texas 78664 Dear Ms. Bondy and Board of Directors: You have requested that Weaver and Tidwell, L.L.P ("Weaver", "our". "us", and "we") audit the financial statements of the business-type activities of Brushy Creek Regional Utility Authority, Inc ("BCRUA"), as of September 30, 2021, and for the year then ended and the related notes to the financial statements, which collectively comprise BCRUA's basic financial statements as listed in the table of contents. Accounting principles generally accepted in the United States of America ("U.S. GAAP"), as promulgated by the Governmental Accounting Standards Board ("GASB") require that management's discussion and analysis and budgetary comparison information, among other items,be presented to supplement the basic financial statements.Such information,although not a part of the basic financial statements,is required by GASB, which 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 ("U.S. GARS"). 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.The following RSI is required by U.S.GAAP.This RSI will be subjected to certain limited procedures but will not be audited: 1. Management's discussion and analysis Supplementary information other than RSI will accompany the BCRUA's basic financial statements. We will subject the following supplementary information 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 to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and additional procedures in accordance with U.S. GRAS. We intend to provide an opinion on the following supplementary information in relation to the financial statements as a whole: 1. Combining statement of net position 2. Combining statement of revenues, expenses and changes in net position We are pleased to confirm our acceptance and our understanding of this audit engagement by means of this letter. Weaver and Tidwell, L.L.P. CPAs AND ADVISORS ) WEAVER.COM Brushy Creek Regional Utility Authority, Inc. August 6, 2021 Page 2 of 9 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 U.S. GAAP and to report on the fairness of the supplementary information referred to above when considered in relation to the basic financial statements as a whole. The objective also includes reporting on internal control related to the basic financial statements and compliance with the provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a material effect on the basic financial statements in accordance with Government Auditing Standards issued by the Comptroller General of the United States of America ("GAGAS"). Auditor Responsibilities We will conduct our audit in accordance with U.S. GAAS and GAGAS. 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 basic financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the basic 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 basic 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. GAAS and GAGAS. 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 making our risk assessments, we consider internal control relevant to the BCRUA's preparation and fair presentation of the basic 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 Brushy Creek Regional Utility Authority, Inc. August b, 2021 Page 3 of 9 effectiveness of the BCRUA'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 basic financial statements that we have identified during the audit. 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. Rebecca Goldstein is the engagement partner for the audit services specified in this letter, and is responsible for supervising our services performed as part of this engagement and signing or authorizing another qualified firm representative to sign the audit report. We may from time to time,and depending on the circumstances, use third-party service providers in performing this engagement. 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. We expect to begin our audit procedures in November 2021, and issue our report in January 2022. We will issue a written report upon completion of our audit of the BCRUA's basic financial statements. Our report will be addressed to the Board of Directors of the BCRUA. 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 parograph(s), or withdraw from the engagement. If our opinions on the financial statements or compliance 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 withdraw from this engagement. As part of obtaining reasonable assurance about whether the basic financial statements are free of material misstatement, we will perform tests of the BCRUA's compliance with the provisions of applicable laws, regulations, contracts, and agreements. 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 accordance with the requirements of GALAS,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. Non-Attest Services We will perform non-attest services which include assistance with financial statement preparation, including specific reporting journal entries as necessary.These nonauditlnonattest services do not Brushy Creek Regional Utility Authority, Inc. August 6, 2021 Page 4 of 9 constitute an audit under GAGAS and such services will not be conducted in accordance with GAGAS. Management Responsibilities Our audit will be conducted on the basis that management and, when appropriate, those charged with governance, acknowledge and understand that they have responsibility: a. for the preparation and fair presentation of the basic financial statements in accordance with the framework described in Audit Objectives above; b. for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of basic 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 all 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 BCRUA from whom we determine if necessary to obtain audit evidence. d. for including the auditor's report, and our report on any supplementary information if described above, in any document containing the basic financial statements that indicates that such financial statements have been audited by the BCRUA's auditor; e. for identifying and ensuring that the BCRUA complies with the laws and regulations applicable to its activities; f. for adjusting the basic 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 years under audit are immaterial, both individually and in the aggregate, to the basic financial statements as a whole; g. for maintaining adequate records, selecting and applying accounting principles, and safeguarding assets: 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 basic financial statements, or if the supplementary information will not be presented with the audited basic financial statements,to make the audited basic financial Brushy Creek Regional Utility Authority, Inc. August 6, 2021 Page 5 of 9 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; and i, informing us of facts that may affect the basic financial statements of which you may become aware during the period from the date of the auditor's report to the date the basic financial statements are issued. We understand that your employees will prepare all confirmations we request and will locate any documents or support for any other transactions we select for testing. If we agree herein or otherwise to perform any non-attest services (such as tax services or any other non-attest services), you agree to assume all management responsibilities for those services; oversee the services by designating an individual, preferably from senior management, with suitable skill, knowledge, or experience; evaluate the adequacy and results of the services; and accept responsibility for them. GAGAS require that we document an assessment of the skills, knowledge, and experience of management, should we participate in any form of preparation of the basic financial statements and related schedules or disclosures as these actions are deemed a nonaudit/nonattest service. During the course of our engagement, we will request information and explanations from management regarding the BCRUA'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 BCRUA 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. Fees and Invoicing We estimate that the fee for this engagement will be $34,300. The fee estimate is based on anticipated cooperation from all involved and the assumption that unexpected circumstances will not be encountered during the engagement. This is only an estimate and the fee for these services will be determined by the complexity of the work performed and the tasks required. If significant additional time is necessary, we will discuss the reasons with you and arrive at a new fee estimate before we incur the additional costs. It is understood that neither our fees nor the payment thereof will be contingent upon the results of this engagement. Additionally, the fee for any term subsequent to this initial term shall not increase by more than four percent (4%) of the fee amount for the previous term for the some scope of services. In addition to the fee for our services, reasonable and necessary out-of-pocket expenses we incur (such as parking, reproduction and printing, postage and delivery, and oui-of-market travel, meals, and accommodations) will be billed at cost. At this time, we do not anticipate incurring substantial expenses. Brushy Creek Regional Utility Authority, Inc. August 6, 2021 Page 6 of 9 Our engagement fees do not include consulting on the adoption of new accounting standards and any future increased duties because of any regulatory body, auditing standard or an unknown or unplanned significant transaction. We will consult with you in the event any of these take place that may affect our fees. We will also invoice for reasonable and necessary time and out-of-pocket expenses we incur to respond to any request (such as a subpoena,summons,court order.or administrative investigative demand) pertaining to this engagement in a legal matter to which we are not a party. Our time to facilitate the response will be billed at our then-current standard hourly rates, and our expenses (including attorney's fees) will be billed at cost. If we agree to perform additional substantive services related to or arising out of the request, such matters may be the subject of a new engagement letter. Our invoices for this engagement will be rendered each month as work progresses. Our invoices are payable in accordance with Texas Government Code § 2251.021. Ethical Conflict Resolution 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. Audit Documentation and Confidentiality The audit documentation we prepare pertaining to and in support of this engagement is our property and constitutes confidential information. If we are requested to make the audit documentation available to outside parties,except in the case of requests during our peer review (discussed below) or when prohibited by law or direction of law enforcement, any such requests will be discussed with you before we make the documentation available to the requesting parties. We may be requested to make certain audit documentation (working papers) available to regulators and other government agencies, pursuant to authority given by law or regulation. You should understand that responding to many such requests is mandatory. In those cases, access to such working papers will be provided under our supervision and we may, upon their request, provide the regulator or agency with copies of all or selected working papers. The requesting party may intend or decide to distribute the copies or information contained therein to others, including other regulators or agencies. You will be billed for additional fees as a result of the aforementioned work. Our firm, as well as other accounting firms, participates in a peer review program covering our audit and accounting practices. This program requires that once every three years, we subject our system of quality control to an examination by another accounting firm.As part of this process, the firm conducting our peer review will review a sample of our work. It is possible that the work we perform for you may be selected for such a review. If it is, our peer review firm is bound by Brushy Creek Regional Utility Authority, Inc. August 6, 2021 Page 7 of 9 professional standards to keep all information confidential and we are required to provide the required information. We will retain our audit documentation for a period of at least seven years from the date of our report. You agree that following such period, we may destroy the audit documentation without notice to you. To maintain independence, we will not act as the host of your financial or non-financial information or as your information back-up service provider. Instead, it is your responsibility to maintain a complete set of your financial and non-financial data and records. If some portion of your data and records is contained only within our files,you agree to inform us before the issuance of our report and we will provide that to you. The parties do not intend this engagement letter to be for the benefit of any third-party. You may inform us of third-parties who will receive a copy of our audit report. Unless you inform us of such third-parties, we are not aware of who you intend to supply our audit report to and we do not anticipate other third parties' reliance upon our professional services unless expressly stated herein. During the course of the engagement, we may communicate via fax, email, or other electronic mechanism.Please be aware that communication in those mediums contains a risk of misdirected or intercepted communications. Dispute Resolution Procedure including Jury Waiver If a dispute arises out of or relates to this engagement or engagement letter,or the breach thereof, and if the dispute cannot be settled through negotiation,the parties agree first to try in good faith to settle the dispute by mediation before resorting to litigation. In such event, the parties will attempt to agree upon a location, mediator, and mediation procedures, but absent such agreement any party may require mediation in Austin, Texas, administered by the AAA under its Commercial Mediation Procedures. This engagement letter and all disputes between the parties shall be governed by, resolved, and construed in accordance with the laws of the State of Texas, without regard to conflict-of-law principles.Any action arising out of or relating to this engagement or engagement letter shall only be brought in, and each party agrees to submit and consent to the exclusive jurisdiction of, the federal or state courts situated in Tarrant County, Texas. Each party hereby irrevocably waives any right it may have to trial by jury in any proceeding arising out of or relating to this engagement or this engagement letter. Whenever possible,this engagement letter shall be interpreted in such a manner as to be effective and valid under applicable laws, regulations, or published interpretation, but if any term of this engagement letter is declared illegal, unenforceable, or unconscionable, that term shall be severed or modified and the remaining terms of the engagement letter shall remain in force.The parties agree that the court should modify any term declared to be illegal, unenforceable, or unconscionable in a manner that will retain the intended term as closely as possible. If because of a change in status or due to any other reason, any provision in this engagement letter would be prohibited by, or would impair our independence under lows, regulations or published interpretations by governmental bodies, professional organizations or other regulatory Brushy Creek Regional Utility Authority, Inc. August 6, 2021 Page 8 of 9 agencies,such provision shall,to that extent,be of no further force and effect and this agreement shall consist of the remaining portions. Miscellaneous In accordance with the requirements of Government Auditing Standards, we have attached a copy of the latest external peer review report of our firm for your consideration and files. We may at times provide you with documents marked as drafts. You understand that those documents are for your review purposes only. You should not rely upon those documents in any way. Although the engagement partner responsible for this engagement is a licensed certified public accountant, we inform you that we have nonlicensees who may provide services pertaining to this engagement. If you intend to make reference to our firm or include our report or any portion of it in a published document or other reproduction, and that document or other reproduction includes a version of our report or the financial statements that is assembled differently than any version we provided you or audited,you agree to provide us with printers' proofs or masters for our review and approval before reproducing. You also agree to provide us with a copy of the final reproduced material for our written approval before it is distributed. If, in our professional judgment, the circumstances require,we may withhold our approval.This requirement does not pertain to distributing our report or the financial statements when you do not modify their assembly or in situations where you disseminate the audited financial statements as a standalone document,such as on your website. Unless we provide you with written consent in advance of such use, the audited financial statements and our report are not intended to and should not be provided or otherwise made available for use in connection with the sale of debt or other securities. If, in our professional judgment, the circumstances require,we may withhold our consent. This engagement letter sets forth all of the agreed upon terms and conditions of our engagement with respect to the matters covered herein,and supersedes any that may have come before.This engagement letter may not be amended or modified except by further writing signed by all the parties. 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. Brushy Creek Regional Utility Authority, Inc. August 6, 2021 Page 9 of 9 We appreciate the opportunity to assist you and look forward to working with you and your team. Sincerely, WEAVER AND TIDWELL, L.L.P. Austin, Texas Please sign and return a copy of this letter to indicate your acknowledgment of, and agreement with, the arrangements for our engagement as described herein, including each party's respective responsibilities. By signing below, the signatory also represents that they have been authorized to execute this agreement. Brushy Creek Regional Utility Authority, Inc. By: - - Printed Name: "A Title: a/Y' Date: C� + CERTIFICATE OF INTERESTED PARTIES FORM 1295 101`1 Complete Nos.1-a and a If there are interested parties. OFFICE USE ONLY Complete Nos.1,2,3,5,and B if there are no interested parties. CERTIFICATION OF FILING 1 Name of business entity filing form,and the city,state and country of the business entity's place I Certificate Number: of business. 2021-791558 Weaver and Tidwell,L.L.P. Dallas,TX United States Date Filed: 2 Name of governmental entity or state agency that is a party to the contract for which the form Is08/17/2021 being filed. Brushy Creek Regional Utility Authority ]Date Acknowledged: 3 Provide the identification number used by the governmental entity or state agency to track or Identify the contract,and provide a description of the services,goods,or other property to be provided under the contract. Independent Audit 2021 Independent Audit 4 Nature of Interest Name of interested Party City,State,Country(place of business) check appticable Controlling Intermediary Rook,David Houston,TX United States X Mackel,John Houston,TX United States X 5 Check only If there is NO Interested Party. ❑ 6 UNSWORN DECLARATION My name is Rcbccca Goldstein,CPA and my date of birth is My address is 1601 South MoPac Expressway,Suite 4250 Austin TX 78746 _USA (sem) (may) (state) (ZIP code) (country} I declare under penalty of perjury that the foregoing is true and correct. Executed in Tarrant County, State of Texas on the i.- day of Aug 20 1 (rnonri) &Oar) Signature of a rued agent of contracting business entity (Dederant) Forms provided by Texas Ethics Commission www.ethics.state.tx.us Version V1.1 191b5cdc CERTIFICATE OF INTERESTED PARTIES FORM 1295 loft Complete Nos.1-4 and 6 if there are interested parties. OFFICE USE ONLY Complete Nos.1,2,3,5,and 6 if there are no interested parties. CERTIFICATION OF FILING 1 Name of business entity filing form,and the city,state and country of the business entity's place Certificate Number: of business. 2021-791558 Weaver and Tidwell, L.L.P. Dallas,TX United States Date t=iled: 2 Name of governmental entity or state agency that is a party to the contract for which the form is08/17/2021 being filed. Brushy Creek Regional Utility Authority Date Acknowledged: 08/17/2021 3 Provide the identification number used by the governmental entity or state agency to track or identity the contract,and provide a description of the services,goods,or other property to be provided under the contract. Independent Audit 2021 Independent Audit 4 Nature of interest Name of Interested Party City,State,Country(place of business) (check applicable) Controlling Intermediary Rook, David Houston,TX United States X Mackel,John Houston,TX United States X 5 Check only if there is NO Interested Party. 6 UNSWORN DECLARATION My name is and my date of birth is My address is (street) (city) (state) (zip code) (country) I declare under penalty of perjury that the foregoing is true and correct. Executed in County. State of on the day of ,20 (month) (year) Signature of authorized agent of contracting lousiness entity, (Declarant) Farms provided by Texas Ethics Commission www.ethics.state.tx.us Version V1.1.191b5cdc DATE: August 20, 2021 SUBJECT: BCRUA Board Meeting—August 25, 2021 ITEM: 6B. Consider a resolution authorizing the President to execute an Engagement Letter with Weaver and Tidwell, LLP for Annual Financial Audit Services. PRESENTER: Karen Bondy,General Manager BACKGROUND INFO: BCRUA's contract for audit services with Weaver and Tidwell, LLP expired with the FY 2020 — 2021 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.A review committee was selected with financial staff representatives from all three BCRUA member cities. Seven responses were received, and the following four firms were determined by the committee to be the most responsive: • Whitley Penn L.L.P. • Weaver&Tidwell, L.L.P. • Brockway,Gersbach, Franklin & Niemeier, P.C_ • RSM US L.L.P. The committee members completed an RFQ Grading Sheet that graded each respondent on the following criteria: • Qualifications and Availability • Proposed Staff • Similar Project Experience • Project Schedule Cedar Park's Purchasing Manager collected all completed rating sheets and tabulated them on July 21. The top two scoring firms were interviewed July 28. As a result, the committee selected Weaver & Tidwell, L.L.P. as the highest ranked submittal. Staff then initiated negotiations with Weaver&Tidwell,L.L.P.,and have agreed to a one-year engage ment, 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.