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HomeMy WebLinkAbout23 - General Services - Eide Bailly - Compliance over building code enforcementWhat inspires you, inspires us. | eidebailly.com 7001 E. Belleview Ave., Ste. 700 | Denver, CO 80237-2733 | TF 866.740.4100 | T 303.770.5700 | F 303.770.7581 | EOE 1 October 13, 2023 Honorable Mayor and Members of City Commission City of Bozeman 121 N. Rouse Ave. City of Bozeman, MT 59715 This letter sets forth our understanding for applying agreed-upon procedures to the City of Bozeman’s adherence to Administrative Rule (ARM) 24.301.208 building code of for the period ended June 30, 2023. The City of Bozeman is responsible for adherence to Administrative Rule (ARM) 24.301.208. This engagement is solely for the purpose of reporting our findings regarding the adherence to Administrative Rule (ARM) 24.301.208 (see Attachment A to this agreement for specific details). This report is intended for use by the City of Bozeman and the Montana State Department of Labor and Industry and is expected to be restricted to the use of these specified parties. Prior to the completion of the engagement, you agree to provide us with written agreement and acknowledgment that the procedures performed are appropriate for the intended purpose of the engagement as noted above. As part of our engagement, we will request from management or those charged with governance, written confirmation concerning representations made to us in connection with the agreed upon procedures. This will include confirmation that we have obtained from all necessary other parties’ agreement to the procedures and acknowledgement that the procedures performed are appropriate for their purposes. You agree to provide such confirmation. We will conduct our engagement in accordance with the attestation standards for agreed-upon procedures engagements established by the American Institute of Certified Public Accountants. We are responsible for carrying out the procedures and reporting findings in accordance with these standards. We have no responsibility to determine the differences between the procedures to be performed and the procedures that we would have determined to be necessary had we been engaged to perform another form of attestation engagement. Our report will list the procedures performed and our findings. Our report will be addressed to the mayor and members of city commission and will be intended for use by and restricted to the use of the specified parties as identified above. Our report will contain such restricted-use language. Should we have any reservations with respect to the subject matter, we will discuss them with you before the report is issued. We have no responsibility to update our report for events and circumstances occurring after the date of our report. DocuSign Envelope ID: 443CA44E-8C22-4039-821D-000596137FF9 2 During the course of the engagement, we will only provide confidential engagement documentation to you via Eide Bailly’s secure portal or other secure methods, and request that you use the same or similar tools in providing information to us. Should you choose not to utilize secure communication applications, you acknowledge that such communication contains a risk of the information being made available to unintended third parties. Similarly, we may communicate with you or your personnel via e-mail or other electronic methods, and you acknowledge that communication in those mediums contains a risk of misdirected or intercepted communications. Should you provide us with remote access to your information technology environment, including but not limited to your financial reporting system, you agree to (1) assign unique usernames and passwords for use by our personnel in accessing the system and to provide this information in a secure manner; (2) limit access to “read only” to prevent any unintentional deletion or alteration of your data; (3) limit access to the areas of your technology environment necessary to perform the procedures agreed upon; and (4) disable all usernames and passwords provided to us upon the completion of procedures for which access was provided. We agree to only access your technology environment to the extent necessary to perform the identified procedures. Professional standards prohibit us from being the sole host and/or the sole storage for your financial and non- financial data. As such, it is your responsibility to maintain your original data and records and we cannot be responsible to maintain such original information. By signing this engagement letter, you affirm that you have all the data and records required to make your books and records complete. We plan to begin our procedures in October 2023 and, unless unforeseeable problems are encountered, the engagement should be completed by November 30, 2023. Paul Kane, CPA is the engagement partner for the services specified in this letter. Responsibilities include supervising services performed as part of this engagement and signing or authorizing another qualified firm representative to sign the agreed-upon procedures report. With respect to any nonattest services we perform, we agree to perform the following: Prepare or assist with preparing financial statements in conformity with U.S. generally accepted accounting principles based on information provided by you. We will not assume management responsibilities on behalf of the City of Bozeman. The City of Bozeman’s management understands and agrees that any advice or recommendation we may provide in connection with our engagement are solely to assist management in performing its responsibilities. The City of Bozeman’s management is responsible 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. Our responsibilities and limitations of the nonattest engagement are as follows: •We will perform the services in accordance with applicable professional standards, including Attestation standards for agreed-upon procedures engagements established by the American Institute of Certified Public Accountants. •This engagement is limited to the agreed-upon procedures previously outlined. Our firm, in its sole professional judgment, reserves the right to refuse to do any procedure or take any action that could be construed as making management decisions or assuming management responsibilities. DocuSign Envelope ID: 443CA44E-8C22-4039-821D-000596137FF9 3 Our fees are based on the amount of time required at various levels of responsibility, plus actual out-of-pocket expenses, including administrative charges. Invoices are payable upon presentation. Our fee for the engagement will be $7,000. We will notify you immediately of any circumstances we encounter that could significantly affect this initial fee. Whenever possible, we will attempt to use the City of Bozeman’s personnel to assist in the preparation of information. This effort could substantially reduce our time requirements and facilitate the timely conclusion of our procedures. The ability to perform and complete our engagement consistent with the estimated fee included above depends upon the quality of your underlying accounting records and the timeliness of your personnel in providing information and responding to our requests. To assist with this process, we will provide you with a Prepared-by- Client (PBC) request that identifies the information required to perform our engagement, as well as a planned timeline for the engagement. A failure to provide this information in an accurate and timely manner may result in an increase in our fees and/or a delay in the completion of our engagement. We may be requested to make certain engagement documentation available to outside parties, including regulators, pursuant to authority provided by law or regulation or applicable professional standards. If requested, access to such engagement documentation will be provided under the supervision of Eide Bailly LLP’s personnel. Furthermore, upon request, we may provide copies of selected engagement documentation to the outside party, who may intend, or decide, to distribute the copies of information contained therein to others, including other governmental agencies. We will be compensated for any time and expenses, including time and expenses of legal counsel, we may incur in making such engagement documentation available or in conducting or responding to discovery requests or participating as a witness or otherwise in any legal, regulatory, or other proceedings as a result of our Firm’s performance of these services. You and your attorney will receive, if lawful, a copy of every subpoena we are asked to respond to on your behalf and will have the ability to control the extent of the discovery process to control the costs you may incur. Should our relationship terminate before our agreed upon procedures are completed and a report issued, you will be billed for services to the date of termination. All bills are payable upon receipt. A service charge of 1% per month, which is an annual rate of 12%, will be added to all accounts unpaid 30 days after billing date. If collection action is necessary, expenses and reasonable attorney’s fees will be added to the amount due. We will maintain the confidentiality of your personal information and will apply procedures to protect against any unauthorized release of your personal information to third parties. We agree to retain our attest documentation or workpapers for a period of at least eight years from the date of our report. We may use third party service providers and/or affiliated entities (including Eide Bailly Shared Services Private Limited), whether located within or outside the United States, (collectively, “service providers”) in order to facilitate delivering our services to you. Our use of service providers may require access to client information by the service provider. We will take reasonable precautions to determine that they have the appropriate procedures in place to prevent the unauthorized release of confidential information to others. We will remain responsible for the confidentiality of client information accessed by such service provider and any work performed by such service provider. DocuSign Envelope ID: 443CA44E-8C22-4039-821D-000596137FF9 4 Neither of us may use or disclose the other’s confidential information for any purpose except as permitted under this engagement letter or as otherwise necessary for Eide Bailly to provide the services. Your confidential information is defined as any information you provide to us that is not available to the public. Eide Bailly’s confidential information includes our documentation for this engagement. Our documentation shall at all times remain the property of Eide Bailly LLP. The confidentiality obligations described in this paragraph shall supersede and replace any and all prior confidentiality and/or nondisclosure agreements (NDAs) between us. Eide Bailly LLP is a member of HLB International, a worldwide organization of accounting firms and business advisors, (HLB). Each member firm of HLB, including Eide Bailly LLP is a separate and independent legal entity and is not owned or controlled by any other member of HLB. Each member firm of HLB is solely responsible for its own acts and omissions and no other member assumes any liability for such acts or omissions. Neither Eide Bailly LLP, nor any of its affiliates, are responsible or liable for any acts or omission of HLB or any other member firm of HLB and hereby specifically disclaim any and all responsibility, even if Eide Bailly LLP, or any of its affiliates are aware of such acts or omissions of another member of HLB. Eide Bailly LLP formed The Eide Bailly Alliance, a network for small to mid-sized CPA firms across the nation. Each member firm of The Eide Bailly Alliance, including Eide Bailly LLP, is a separate and independent legal entity and is not owned or controlled by any other member of The Eide Bailly Alliance. Each member firm of The Eide Bailly Alliance is solely responsible for its own acts and omissions and no other member assumes any liability for such acts or omissions. Neither Eide Bailly LLP, nor any of its affiliates, are responsible or liable for any acts or omission of The Eide Bailly Alliance or any other member firm of The Eide Bailly Alliance and hereby specifically disclaim any and all responsibility, even if Eide Bailly LLP, or any of its affiliates are aware of such acts or omissions of another member of The Eide Bailly Alliance. MEDIATION Any disagreement, controversy or claim arising out of or related to any aspect of our services or relationship with you (hereafter a “Dispute”) shall, as a precondition to litigation in court, first be submitted to mediation. In mediation, the parties attempt to reach an amicable resolution of the Dispute with the aid of an impartial mediator. Mediation shall begin by service of a written demand. The mediator will be selected by mutual agreement. If we cannot agree on a mediator, one shall be designated by the Montana Eighteenth Judicial District Court, Gallatin County, Montana. Mediation shall be conducted with the parties in person in Bozeman, Montana. Each party will bear its own costs in the mediation. The fees and expenses of the mediator will be shared equally by the parties. Neither party may commence a lawsuit until the mediator declares an impasse. LIMITATION OF LIABILITY Eide Bailly LLP and its partners, affiliates, officers and employees (collectively “Eide Bailly”) shall not be responsible for any misstatements in your financial statements that we may fail to detect as a result of misrepresentations or concealment of information by any of your owners, directors, officers or employees. The exclusive remedy available to you for any alleged loss or damages arising from or related to Eide Bailly’s services or relationship with you shall be the right to pursue claims for actual damages that are directly caused by Eide Bailly’s breach of this agreement or Eide Bailly’s violation of applicable professional standards. In no event shall Eide Bailly’s aggregate liability to you exceed ten times fees paid under this agreement, nor shall Eide Bailly ever be liable to you for incidental, consequential, punitive or exemplary damages. Please sign and return the attached copy of this letter to indicate your acknowledgment of, and agreement with, the arrangements for our engagement including our respective responsibilities. DocuSign Envelope ID: 443CA44E-8C22-4039-821D-000596137FF9 5 We appreciate the opportunity to be your certified public accountants and look forward to working with you and your staff. Respectfully, __________________________ Paul Kane, CPA Assurance Partner *************************************************************** RESPONSE: This letter correctly sets forth our understanding. Acknowledged and agreed on behalf of the City of Bozeman, Montana by: Name: _______________________________________________________________ Title: ________________________________________________________________ Date: ________________________________________________________________ DocuSign Envelope ID: 443CA44E-8C22-4039-821D-000596137FF9 12/20/2023 City Manager 6 ATTACHMENT A Agreed Upon Procedures: 1) We will determine if the City’s accounting records fully document the collection and expenditure of all fees and charges related to the Building Code Enforcement Program during the 2023 fiscal year. 2) We will compare the financial information included in the 2023 “Annual Report” submitted to the State Building Codes Bureau to corresponding information in the City’s accounting records and verify the information was the same. 3) From selected fiscal year 2023 building permit application, we will compare permit fees charged to the permit fee schedule established by the City and approved by the State Building Codes Bureau, and we will verify that the fees were the same. 4) From the selected fiscal year 2023 building permit applications, we will compare the total building permit fee paid to the amount credited to the Building Code Enforcement Program, and we will verify that the amounts agree and that no portion of the fee was diverted to other functions of the government. 5) We will examine selected fiscal year 2023 expenditures and other charges made from Building Code Enforcement Program-related fees to determine that all were necessary and reasonable costs directly and specifically identifiable to the enforcement of building codes, (with the exception of indirect costs charged to the Building Code Enforcement Program- see procedures 7 and 8 below). 6) We will examine selected fiscal year 2023 expenditures from the Building Code Enforcement Program to determine if any portion of permit fees collected were used to support fire departments, planning, zoning, or other activities, except to the extent that employees of those programs provided direct plan review, inspection or other building code enforcement services for the Building Code Enforcement Program. If so, we will obtain documentation from the government that supports the performance of these direct services and that documents that these costs were apportioned to the Building Code Enforcement Program on a basis supported by time sheets. 7) For indirect costs allocated to the Building Code Enforcement Program in fiscal year 2023, we will verify that the basis used to allocate costs to the Building Code Enforcement Program was the same basis used to allocate indirect costs to other proprietary funds of the City, and we will verify that indirect costs waived for any other proprietary fund of the City were also waived for the Building Code Enforcement Program. 8) For indirect costs charged to the Building Code Enforcement Program in fiscal year 2023, we will verify that they were limited to those costs allowed under 2CFR200. 9) For transfers out of the Building Code Enforcement Program Fund in fiscal year 2023, we will obtain detailed documentation from the City that describes the purposes and eventual uses of these transfers, and we will verify that these purposes and uses were in accordance with allowable expenditures as addressed in the procedures performed above. DocuSign Envelope ID: 443CA44E-8C22-4039-821D-000596137FF9 7 10)We will verify that 0.5% of fiscal year 2023 revenues from plan reviews and building permits (not including revenues from electrical, mechanical or plumbing permits) collected during the year were remitted to the State Department of Labor and Industry for the building codes education program. 11)We will determine whether the reserve account (fund balance) exceeds the amount needed to support the Building Code Enforcement program for twelve months. If so, we will verify that the City has taken steps to reduce permit fees. DocuSign Envelope ID: 443CA44E-8C22-4039-821D-000596137FF9