08-15-11 Fiscal Affairs Committee Meeting

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Al N I L a } August 3, 2011 Board of Directors La Porte Area Water Authority La Porte, Texas 77571 We are pleased to confirm our understanding of the services we are to provide La Porte Area Water Authority ( "the Authority ") for the year ended September 30, 2011. We will audit the financial statements of the business - type activities, which collectively comprise the basic financial statements of the Authority as of and for the year ended September 30, 2011. Accounting standards generally accepted in the United States provide for certain required supplementary information (RSI), such as management's discussion and analysis (MD &A), to accompany the Authority's basic financial statements. As part of our engagement, we will apply certain limited procedures to the Authority's RSI. These limited procedures will consist principally of inquiries of management regarding the methods of measurement and presentation, which management is responsible for affirming to us in its representation letter. Unless we encounter problems with the presentation of the RSI or with procedures relating to it, we will disclaim an opinion on it. The following RSI is required by generally accepted accounting principles and will be subjected to certain limited procedures, but will not be audited: 1) Management's Discussion and Analysis. 2) Budgetary Comparison Schedule We will perform additional procedures and present additional information together with auditors' reports as may be required by the Texas Commission on Environmental Quality ( "TCEQ ") for the same periods, as applicable. Audit Objective The objective of our audit is the expression of opinions as to whether your basic financial statements are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles and to report on the fairness of the additional information referred to in the first paragraph when considered in relation to the basic financial statements taken as a whole. Our audit will be conducted in accordance with U.S. generally accepted auditing standards and will include tests of the accounting records and other procedures we consider necessary to enable us to express such opinions. If our opinions on the financial statements are other than unqualified, we will fully 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. 2000 Loop 197 North I Suite 200 1 Texas Cite_ TX 77590 (P) 409.948.4406 1 (F) 409.948.0364 ��z�z� . null- lairson.com