08-15-11 Fiscal Affairs Committee Meeting

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Mayor and Members of City Council City* of La Porte, Texas Page 5 As required by OMB Circular A -133, we will perform tests of controls over compliance to evaluate the effectiveness of the design and operation of controls that we consider relevant to preventing or detecting material noncompliance with compliance requirements applicable to each major federal award program. However, our tests will be less in scope than would be necessaiv to render an opinion on those controls and, accordingly*, no opinion will be expressed in our report on internal control issued pursuant to OMB Circular A -133. An audit is not designed to provide assurance on internal control or to identify* significant deficiencies. However, during the audit, we will communicate to management and those charged with governance internal control related matters that are required to be communicated under AICPA professional standards, Government Auditing Standards, and OMB Circular A -133. Audit Procedures - Compliance As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of City* of La Porte, Texas's compliance with applicable laws and regulations and the provisions of contracts and agreements, including grant agreements. However, the objective of those procedures will not be to provide an opinion on overall compliance and we will not express such an opinion in our report on compliance issued pursuant to Government Auditing Standards. OMB Circular A -133 requires that we also plan and perform the audit to obtain reasonable assurance about whether the auditee has complied with applicable laws and regulations and the provisions of contracts and grant agreements applicable to major programs. Our procedures will consist of tests of transactions and other applicable procedures described in the OMB Circular A -133 Compliance Supplement and related addenda for the types of compliance requirements that could have a direct and material effect on each of City* of La Porte, Texas's major programs. The purpose of these procedures will be to express an opinion on City* of La Porte, Texas's compliance with requirements applicable to each of its major programs in our report on compliance issued pursuant to OMB Circular A -133. Engagement Administration, Fees, and Other We may* from time to time, and depending on the circumstances, use third -party* service providers in serving your account. We may share confidential 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, 'kve 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 providers. We understand that your employees will prepare all cash, accounts receivable, or other confirmations we request and will locate any* documents selected by us for testing.