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<br /> <br />City of Centerville <br />September 9, 2008 <br />Page 3 <br /> <br />Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include <br />tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by <br />correspondence with selected individuals, funding sources, creditors, and financial institutions. We will request written <br />representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the <br />conclusion of our audit, we will require certain written representations from you about the financial statements and related matters. <br /> <br />AUDIT PROCEDURES - INTERNAL CONTROL <br /> <br />Our audit will include obtaining an understanding of the entity and its environment, including internal control, sufficient to assess <br />the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit <br />procedures. An audit is not designed to provide assurance on internal control or to identify deficiencies in internal control. <br />However, during the audit, we will communicate to management and those charged with governance internal control related <br />matters that are required to be communicated under AICP A professional standards. <br /> <br />AUDIT PROCEDURES - COMPLIANCE <br /> <br />As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will <br />perform tests of the City's compliance with applicable laws and regulations and the provisions of contracts and agreements. <br />However, the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an <br />opinion. <br /> <br />AUDIT ADMINISTRATION, FEES, AND OTHER <br /> <br />We may from time to time, and depending on the circumstances, use third-party service providers in serving your account. We <br />may share confidential information about you with these service providers, but remain committed to maintaining the <br />confidentiality and security of your information. Accordingly, we maintain internal policies, procedures, and safeguards to protect <br />the confidentiality of your personal information. In addition, we will secure confidentiality agreements with all service providers <br />to maintain the confidentiality of your information and we will take reasonable precautions to determine that they have <br />appropriate procedures in place to prevent the unauthorized release of your confidential information to others. In the event that we <br />are unable to secure an appropriate confidentiality agreement, you will be asked to provide your consent prior to the sharing of <br />your confidential information with the third-party service provider. Furthermore, we will remain responsible for the work <br />provided by any such third-party service providers. <br /> <br />We understand that your employees will prepare all cash or other confirmations we request and will locate any documents <br />selected by us for testing. <br /> <br />Steven R. McDonald, CPA is the engagement partner and is responsible for supervising the engagement and signing the report. <br />We expect to begin our audit on approximately April 20, 2009 and to issue our reports no later than June 1,2009. <br /> <br />Our fee for these services will be as follows: <br /> <br />Audit <br />Office of the State Auditor 2008 Reporting Form <br /> <br />$ <br /> <br />27,800 <br />475 <br /> <br />Our invoices for these fees will be rendered each month as work progresses and are payable on presentation. In accordance with <br />our firm policies, work may be suspended if your account becomes 90 days or more overdue and may not be resumed until your <br />account is paid in full. If we elect to terminate our services for nonpayment, our engagement will be deemed to have been <br />completed upon written notification of termination, even if we have not completed our report. You will be obligated to <br />compensate us for all time expended and to reimburse us for all out-of-pocket costs through the date of termination. The above <br />fee is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be <br />encountered during the audit. If significant additional time is necessary, we will discuss it with you and arrive at a new fee <br />estimate before we incur the additional costs. <br /> <br />2008 ALG-CL-l.l: Audit Engagement Letter-Standard <br /> <br />952.835.9090 . Fax 952.835.3261 <br /> <br />www.aemcpas.com <br />