04-26-21 Regular Meeting of the La Porte City Council

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To the Board of Directors April 5, 2021 La Porte Area Water Authority Page 2 of 7 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 inventories, 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 will 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 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 or noncompliance (whether caused by errors, fraudulent financial reporting, misappropriation of assets, detected abuse, 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. In making our risk assessments, we consider internal c presentation of the 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 effec we will communicate to you in writing concerning any significant deficiencies or material weaknesses in internal control relevant to the audit of the financial statements that we have identified during the audit. Our responsibility as auditors is, of course, limited to the period covered by our audit and does not extend to any other periods. We will issue a written report upon complebasic financial statements. Our report will be addressed to the governing body of the Authority. 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. Our audit will be conducted on the basis that management and, when appropriate, those charged with governance acknowledge and understand that they have responsibility: 1. For the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; 2. For identifying and providing report copies of previous audits, attestation engagements, or other studies that directly relate to the objectives of the audit, including whether related recommendations have been implemented; 3. For taking prompt action when instances of noncompliance are identified; 4. For addressing the findings and recommendations of auditors, for establishing and maintaining a process to track the status of such findings and recommendations and taking corrective action on reported audit findings from prior periods and preparing a summary schedule of prior audit findings; 5. For following up and taking corrective action on current year audit findings and preparing a corrective action plan for such findings; 6. For submitting the reporting package and data collection form to the appropriate parties; 7. For making the auditor aware of any significant contractor relationships where the contractor is responsible for program compliance; 8. To provide us with: