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Board of Directors January 20, 2012 LaPorte Redevelopment Authority Page 3 Our approach to the audit will be to plan the audit and perform a preliminary review of your system of internal control. We will use our standard in-house generated audit program. Most material accounts will have a detailed test of transactions. Every audit is subject to Statement on Auditing Standard No. 115 that requires a management letter if there are matters that are considered to be material weaknesses or significant deficiencies in the system of internal control. By having your auditor prepare the financial statements and prepare certain adjustments to convert from fund financial statements to an entity -wide presentation as required by the Governmental Accounting Standards Board (GASB) Statement No. 34, these activities by the auditor can be considered material weaknesses and could result in a management letter, depending on the qualifications of management and consultants retained by management. This assessment will have to be made during the audit process. As noted in the enclosed engagement letter, the fees for audit services are expected to be as follows: • Audit of the Authority's financial statements as of and for the year ended September 30, 2011, to range between $5,500 and $7,000 Any audit estimate we give you will not be based upon a fixed bid amount but will be based upon a budget of 45 hours for the audit of the Authority. If during the course of performing the audit, it is determined our estimate is not adequate because of special problems or circumstances within the accounting records of the Authority, we will discuss the problems with the President or the Board of Directors prior to proceeding further. See the attached schedule of hourly rates, experience and training of the persons that will be involved in your audit. Having you as a client is very important to us and we sincerely want to work for you. Please feel free to give us a call if you have any questions regarding the engagement, our qualifications or the contents of this letter. Sincerely, i PV,J- S2 W\ VV� _AN . For the Firm McCall Gibson Swedlund Barfoot PLLC Certified Public Accountants