Independent Financial AuditCITY OF KALISPELL
REQUEST FOR PROPOSALS
The City of Kalispell, Montana is requesting proposals for the annual independent audit of the
City's financial records. Proposals will be accepted until 5:00 PM local time on March 15,
2013. One (1) original plus three (3) copies must be submitted, addressed to the Kalispell City
Clerk, Kalispell City Hall, 201 First Avenue East or PO Box 1997, Kalispell, Montana, 59903
1 Irb
and clearly identified as "Proposai for Independent Financial Audit". Proposals received after
5:00 pm on March 15, 2013 will not be considered. Faxed materials will not be considered.
A detailed description of the required services and qualifications may be obtained at the office of
the Kalispell City Clerk, Kalispell City Hall 201 First Avenue East, or on the City of Kalispell's
website at http:ZLw�ww.kalis-p ell. comZclerkZprol ects open.ph
.
By:
Theresa White
City Clerk
Publications Dates: February 10, 2013
February 17, 2013
CITY OF KALISPELL
REQUEST FOR PROPOSALS (RFPs)
FOR
ANNUAL INDEPENDENT FINANCIAL AUDIT
WIN 011
1.1 Pursuant to the authority granted to it under MCA Title 7, Chapter 5, Part 43, the City of
Kalispell is soliciting proposals for the annual independent audit of the City's financial records.
1.2 The proposal must be sealed and titled "Proposal of Independent Financial Audit" and
must be received by the City Clerk at 201 First Avenue East, Kalispell, Montana, no later than
5: 00 PM local time on March 15, 2013.
1.3 General questions pertaining to the Request for Proposal should be directed to the City
Clerk at (406) 758-7756 or ciLyclerk@kallsl)ell.com.
1.4 One (1) original plus three (3) copies of sealed proposals are required, not to be opened until
after the final submission date and hour noted above.
1.5 To be eligible to qualify as external auditor, the following minimum requirements must be
met:
a. The firm of certified public accountants must be of widely recognized ability and
standing, and licensed to practice in Montana.
b. The CPA firm must be a member of the American Institute of Certified Public
Accountants and must adhere to the AICPA professional standards of audit practices and
conduct.
C. The firm must have audited similar governmental units and must have the capability of
assisting the City in retaining its Certificate of Achievement for Excellence in Financial
Reporting awarded by the Government Finance Officers' Association.
d. The audit examination shall result in financial statements prepared in conformity with
generally accepted accounting principles for local governments. The resulting financial
statements will conform to all applicable GASB Statements, including GASB Statement
#34.
e. The firm must include a statement of the all-inclusive fee for which the work will be
done for fiscal years 2013, 2014, and 2015 (separate costs for each year). A statement of the
estimated total number of hours required for each year for audit staff is also required.
f. The CPA firm must demonstrate that it satisfies the Government Auditing Standards
educational requirements issued by the GAO.
g. The auditor must demonstrate compliance with the CPE requirements for auditing and
governmental accounting.
1.6 The Auditor Selection Committee will schedule oral presentations by selected firms if
deemed necessary.
Audit RFP - Page 1
1.7 The auditor's report will be submitted to the City by the third Monday in December, after the
close of the audited fiscal year. The audit work can commence by the successful audit firm at any
time after the contract is awarded.
1.8 The audit contract will be between the audit firm, the City, and the Department of
Commerce. A copy of the latest standard audit contract is attached. (See ATTACHMENT 1)
Auditors should be fully aware of any changes contemplated by the Commerce Department.
Auditors must also comply with the terms of this RFP.
1.9 The City of Kalispell reserves the right to reject any or all Proposals, to waive any
informality or irregularity in any Proposal received, and to be the sole judge of the merits of the
respective Proposals received.
2.1 Periods to be Audited:
July 1, 2012 through June 30, 2013 - Fiscal Year 2013
July 1, 2013 through June 30, 2014 - Fiscal Year 2014
July 1, 2014 through June 30, 2015 - Fiscal Year 2015
The City reserves the right to negotiate with the successful proposer for two subsequent
fiscal years to be audited.
2.2 Standards and Guidelines - The audit shall be conducted in accordance with:
a. Generally Accepted Auditing Standards (GARS).
b. Government Auditing Standards issued by the Comptroller General of the US 2003
Revision (GAO Standards).
C. AICPA Audit &Accounting Guide -Audits of State and Local Governmental Units
(ASLGU).
2.3 Audit Review - The audit should not be limited to a specific review of the financial
transactions and statements of the City. It should include an overall review of the City's financial
and accounting systems and procedures.
2.4 Specified "Deliverable" - The "deliverables" required for this audit shall be provided within
the time frame specified in Section 1.7. They are listed below.
a. All certifications and audit reports required by the Federal government for Federal
monies the City has received.
b. All certifications and audit reports required by the State for compliance with State
Law regarding the financial reporting of municipalities; including the report on compliance
with building inspection codes as prescribed by Montana statute.
2.5 The auditors shall familiarize themselves with and comply with the provisions of any and all
Federal, State and City orders, statutes, ordinances, bond covenants, and administrative rules and
Audit RFP - Page 2
regulations which may pertain to the work required in the engagement.
2.6 Audit Conferences:
a. The CPA firm will have an entrance conference with the Finance Director.
b. The CPA firm will meet with the Finance Director & City Manager for the purpose of
reviewing its audit findings and recommendations prior to the issuance of management
letters, certifications, or reports
C. The CPA firm will present the final reports to the Finance Director, City Manager, and
if requested, the City Council.
2.7 The CPA firm shall develop a time schedule and procedures to be observed during the audit
and prior to the beginning of each audit. The schedule and procedures will be developed in
conjunction with the City and shall be subject to approval by the City. The schedule will be
approved prior to the audit work commencing. The City's goal is to complete a preliminary close of
its accounting system by the 1 st week of October. Other than interim audit work and confirmations,
the auditors should not expect to perform general field work prior to this date.
2.8 The audit will meet the requirements of the Single Audit Act of 1984 (31 U.S.C. 7501-
7507), as amended by the Single Audit Act Amendments of 1996 (P.L. 104-156) and the Federal
Office of Management and Budget's (OMB) Circular A-133, when applicable.
3.1. The City will provide:
a. Draft Financial Statements.
b. Such City-wide schedules as necessary.
C. Bank reconciliations, vouchers in support of accounts payable, such checks, etc. as
needed to examination.
d. Access to all files and records of the City departments.
e. A City staff member to assist in the audit.
3.2 The City will prepare the entire CAFR, including preparation of the government -wide and
fund level statements, the combining and combined financial statements, notes to the financial
statements, and schedule of Federal Financial Assistance.
3.3 City staff will not prepare auditor work papers or data entry.
- r:
4.1 The auditors will:
a. Submit a draft copy of the financial statements to the City at least 2 weeks prior to the
final report date to enable City officials to review the financial statements for possible
changes.
Audit RFP - Page 3
b. In addition to the auditors' normal internal control review procedures, the auditors will
perform an in-depth review of the City's internal control procedures and internal audits of
one area each year as selected by the City.
C. Provide the City with two (2) written copies of the final audit reports and a CD. This
does not include copies that the auditors must submit to the state.
4.2 If there is a substantial change in the firm's audit staff (i.e. audit manager, managing audit
partner, etc.) prior to or during the audit, the City reserves the right to void the contract.
Estimate the total hours and the resulting all-inclusive maximum fee for the requested work,
separately stated for fiscal years 2013, 2014, and 2015. An appendix stating the hourly rates to be
charged for each staff classification is required. The auditor will not be reimbursed for any travel,
per diem, photo copying, telephone bills, or other related expenses of the audit unless incurred at the
specific request of the City.
The Proposal will be selected through the following selection process. Firms interested in
providing the above described scope of services to the City of Kalispell must submit a Proposal
that addresses the following evaluation criteria. Applicants are encouraged to organize their
submissions in such a way as to follow the general evaluation criteria listed below. Information
included within the RFP may be used to evaluate your firm as part of any criteria regardless of
where that information is found within the RFP. Information obtained from the RFP and from
any other relevant source may be used in the evaluation and selection process.
6.1 Cover Letter (1-page) containing at a minimum: company name, contact name, address,
telephone number, and email address.
6.2 Qualifications Criteria:
6.2.1 General Information
a. Description of company.
b. Legal company organization; organization chart with names.
6.2.2 Relevant Company Experience
a. Applicant's overall reputation, service capabilities, and quality as it relates
to this Proposal.
b. Referrals and references from other municipalities or local governments.
C. List and describe any litigation; arbitration; claims filed by your firm against
any other jurisdiction as a result of a contract dispute; any contract or negligence
claims filed against your company; premature termination from a services
agreement.
d. Applicant's capacity and intent to proceed without delay if selected.
Audit RFP - Page 4
6.2.3 Company Qualifications
The auditors must demonstrate compliance with the continuing professional education
requirements and the external quality control review requirements as set out in
Government Auditing Standards as established by the Comptroller General of the United
States.
a. State whether the firm is local, regional, or national.
b. Give the location of the office from which the work is to be done and the
number of partners, managers, supervisors, seniors, and other professional staff
employed at that office.
C. Describe the range of activities performed by the local office such as audit and
accounting, tax, and/or management advisory services.
d. Briefly describe certifications and licensure held by the company in the state
of Montana.
e. Identify the partners, managers and supervisors who will work on the audit.
Resumes for each supervisory person to be assigned to the audit should be included.
The resumes may be included as an appendix.
f. Describe local office auditing experience similar to the type of audit requested
and give the names and telephone numbers of client officials who can be contacted
as references.
6.2.4 Contract Understanding and Approach
a. Describe your understanding of the scope of work and the particular
expertise your company has in this area of work.
b. Identify and discuss any potential difficult issues your company may face in
providing services within Flathead County.
C. Identify and discuss methods to mitigate these difficulties.
6.2.5 Approach to Contract Management
a. Describe your company's approach in initiating and establishing the service
that meet the needs and requirements of the City.
b. Describe systems used for planning, scheduling, estimating and managing
manpower requirements.
C. Describe the firm's experience in maintaining training and certifications of
personnel.
6.2.6 Proposal for Audit
a. Provide a work schedule with beginning and ending times that meet the
scope criteria.
b. Provide a full schedule of proposed work methods that meet the scope
criteria.
C. Provide a full schedule of costs for each component of the work scope.
Audit RFP - Page 5
6.2.7 Other Factors
a. Current contracts and ability to proceed promptly.
b. Willingness to abide by the City's needs and requirements with few or no
objections or changes.
C. Relevant factors impacting the quality and value of service.
Proposals will be evaluated using a predetermined method to ascertain which proposer best meets
the needs of the City. In some circumstances, proposals may be so similar in quality that oral
interviews may have to be arranged to assist in making the final selection. Evaluation
considerations will include the following.
7.1 Qualifications of the Firm:
a. Relevant auditing experience (governmental), including experience in the
implementation of GASB Statement #34.
b. Reputation of firm (based on references).
C. Qualifications of personnel to be assigned (experience, training, communicative
skills.)
7.2. Technical Approach:
a. Ability to meet or exceed performance expectations.
b. Ability to communicate audit plans in an organized, clear, and convincing manner.
7.3 Fees:
a. Estimated cost as compared with other bids.
7.4 A three -member Auditor Selection Committee will evaluate each Proposal according to
the above criteria and may select up to three finalists that will be Short Listed for the contract. If
interviews are determined to be desirable, the Short List firms will meet with the Auditor
Selection Committee for interviews. The purpose of the interview will be to expand on the
information provided in the Proposal, not to repeat information already provided. Those firms
selected for the Short List will be provided additional instruction by the City. Those firms not
selected for further consideration will be notified.
7.5 The award to the audit firm will also conform to the Administrative Rules of Montana,
Section 2.4.407.
7.6 Following the interviews, the Auditor Selection Committee will rank each Short List
firm. Consideration will - be given to both the written Proposals and any oral presentations or
interviews. No other factors or criteria will be used in the qualification ranking.
Audit RFP - Page 6
7.7 The highest ranked firm will be recommended to the City Manager and City Council for
contract award.
7.8 Requests for debriefings or selection decisions shall be made in writing to the City. All
information submitted by firms and related Auditor Selection Committee evaluations and
rankings shall be considered confidential until after contract execution and award by the City
Council.
7.9 The City will enter a contract upon selection of the firm for the project to be submitted to
the City Council for approval. If the selected firm determines not to enter into a contract with
the City, the City may then contact the second or third highest ranked team until a contract is
executed, or may decide to terminate the selection process.
Audit RFP - Page 7
THIS CONTRACT is made this
1110191111'!111 i;v No I ON jq� 1,11 1 "Uy I 101 M 11
day of
Certified or Licensed Public Accountant
("Contractor"),
Governmental Entity
("Entity"),
9 by and between
and the Montana Department of Administration, Local Government Services Bureau, ("State"), PO Box
200547, Helena, MT 59620-054 acting under the authority of Title 2, Chapter 7, Part 5, of the Montana Code
Annotated.
1. State Approval: This contract is not effective with respect to any party until it is approved and signed
by the State, as required by Section 2-7-506(3), MCA. The Contractor may not begin any audit work
until the State gives this approval. If the Contractor begins work before the State has approved and signed
the contract and the State subsequently does not approve and sign the contract, the Contractor is not entitled to
receive any compensation for the work performed.
2. Audit Period and Payment: This contract covers the following audit period(s):
920 to 9 20.
A. The Entity shall pay the Contractor for the audit work on the basis of time and necessary out-of-pocket
expenses, which will not exceed:
for initial (or sole) audit covering
for subsequent audit covering
for subsequent audit covering
to
to
to
The Entity shall pay the fees listed in Appendices A, B & C, as applicable, which are attached hereto
and incorporated by reference.
B If the cost of any subsequent audit is not agreed upon at the time this contract is executed, the
Contractor and the Entity shall negotiate the cost at a later date. The results of this negotiation will be
set forth in the Appendices and made a part of this contract. The Contractor shall provide the State and
the Entity with a copy of the appropriate Appendices.
C. The contract payments do not include the cost of additional work that may be required if the Contractor
discovers a defalcation or material irregularity. Any change in the scope of the audit services to be
provided under this contract requires a contract amendment.
FORM/SAC01 Page 1 of 12 10/11
2. continued:
D. The Contractor may submit interim bills to the Entity each month, based upon the estimated percentage
of contract completion. The Entity may retain 10 percent of each of these estimates until the Contractor
has delivered the final audit report, at which time the Entity shall release the amount retained.
3. Audit Scope: The Contractor shall conduct a financial statement audit of the Entity as follows:
A. The Contractor shall conduct the audit in accordance with (i) generally accepted auditing standards
adopted by the American Institute of Certified Public Accountants and (ii) the standards applicable to
financial audits contained in Government Auditing Standards, issued by the Comptroller General of the
United States. The objective of the audit is the expression of the Contractor's opinion on the Entity's
financial statements. The Contractor shall obtain reasonable rather than absolute assurance about
whether the financial statements are free of material misstatement, whether caused by error or fraud.
Accordingly, a material misstatement may remain undetected. Also, the audit is not designed to detect
error or fraud that is immaterial to the financial statements. If the Contractor's opinion on the Entity's
financial statements is other than unqualified, the Contractor shall fully discuss the reasons with the
Entity in advance of issuing a report. If, for any reason, the Contractor is unable to complete the audit or
is unable to form or has not formed an opinion, the Contractor may decline to express an opinion or
decline to issue a report as a result of the engagement.
B . The Contractor shall include tests of internal control over financial reporting, but the audit is not
designed to provide an opinion on internal control or to identify significant deficiencies. The
Contractor, however, shall make the Entity aware, in writing, of any significant deficiencies that come
to the Contractor's attention.
C. The Contractor shall include the following tests of compliance and other matters as required by
Government Auditing Standards. These tests, however, will not be designed to provide an opinion on
such compliance. The Contractor shall determine whether:
(1) the Entity has complied with all appropriate statutes and regulations, as required by Section 2-7-
502, MCA;
(2) the Entity has complied with the provisions of each of its revenue bond ordinances and indenture
agreements;
(3) if the audit is of a county, city or town, money is or has been retained in a local charge for services
fund contrary to the requirements of Sections 17-2-301 through 17-2-303, MCA, as required by
Section 17-2-302, MCA. The Contractor shall report any findings of noncompliance with the
provisions of these statutes, regardless of materiality; and
(4) if the audit is of a county or consolidated city/county government, the Entity has complied with
state laws relating to receipts and disbursements of agency funds maintained by the Entity, as
required by Section 2-7-505, MCA.
D. When applicable, the audit must meet all requirements of the Federal Single Audit Act of 1984, as
amended by the Single Audit Act Amendments of 1996 and OMB Circular A-133.
E. The audit scope with regard to federal financial assistance for each fiscal year covered by this audit
contract must be as specified in Appendices A, B and C.
FORM/SACO1 Page 2 of 12 10/11
3. continued:
F. Except as provided below, for purposes of determining the scope of the audit, the Entity is considered the
financial reporting entity as defined by the Governmental Accounting Standards Board. This provision
does not preclude the Entity from engaging a different audit firm for the audit of a segment, fund or
component unit of the Entity. However, both the Entity and Contractor shall notify the State whenever the
Entity elects to engage a different audit firm for the audit of a segment, fund or governmental component
unit. Such additional audit must be contracted for on the State's Standard Audit Contract, and the audit
firm shall be on the Roster of Independent Auditors authorized to conduct audits of Montana local
governments that is maintained by the State.
If this contract is for an audit of a segment, fund, or governmental component unit of the primary
government, the Entity is considered to be the segment, fund or component unit.
G. Any school district audit must also include auditing procedures sufficient to provide an opinion as to
whether the following supplemental information is fairly stated in relation to the basic financial
statements:
(1) the school district's enrollment for the fiscal year or years being audited as reported to the Office of
Public Instruction in the Fall and Spring enrollment reports; and
(2) when applicable, the extracurricular funds for pupil functions.
H. If the Entity is a school district or associated cooperative, the Contractor shall contact the State Office of
Public Instruction and the county superintendent of schools before or during the audit of the Entity. The
Contractor shall determine whether those offices are aware of potential financial or legal compliance
problems relating to the Entity that could affect the scope of the audit.
I. The Contractor shall immediately notify the Entity and the State in writing of any material irregularities
it discovers. If the Entity is a school district or special education cooperative, the Contractor shall also
immediately notify the State Office of Public Instruction in writing.
J. The Contractor shall provide the Entity with a copy of its most recent external peer review report and
any letter of comment, and any subsequent peer review reports and letters of comment received during
the contract period.
K. The Contractor shall notify the Entity of all proposed audit adjustments and, if the Entity concurs, shall
obtain written acceptance of these proposed adjustments. The State reserves the right to request
documentation of these proposed and accepted audit adjustments.
4. Entity's Responsibilities: The Entity shall be responsible for:
A. its basic financial statements, including note disclosures;
B . all supplementary information required by GASB and by provisions of this contract;
C. establishing and maintaining effective internal control over financial reporting, including internal
controls related to the prevention and detection of fraud;
D. ensuring that it complies with the laws and regulations applicable to its activities;
FORM/SAC01 Page 3 of 12 10/11
4 . continued:
E. making all financial records and related information available to the Contractor;
F. the schedule of expenditures of federal awards required for audits conducted under OMB Circular A-
133;
G. approving all proposed audit adjustments before posting, if the Entity concurs with the proposed
adjustments;
H. adjusting the financial statements and accounting records to correct material misstatements and to agree
with the audited financial statements; and
I. providing the Contractor, at the conclusion of the audit engagement, with a letter that confirms certain
representations made during the audit, including an affirmation that the effects of any uncorrected
misstatements aggregated by the auditor during the current engagement and pertaining to the latest
period presented are immaterial, both individually and in the aggregate, to the financial statements taken
as a whole.
5. Dates for Annual Financial Report or Trial Balance of Accounts: The Entity shall prepare its annual
financial report or a trial balance of accounts no later than the dates specified in Appendices A, B and C. If
the Entity is unable to prepare its annual financial report or trial balance by the date specified in the
Appendices, the Entity shall notify the Contractor and the State in writing prior to the specified dates.
6. Beginning the Audit: The Contractor shall begin the audit field work based on the schedule established in
Appendices A, B and C. Under Section 2-7-503(3)(a), MCA, all audits must commence within nine months
from the close of the last fiscal year of the audit period.
7. Completion of Audit: The Contractor shall deliver the audit report to the Entity and the State, based on the
schedule established in Appendices A, B and C. If the Contractor cannot deliver the audit report to the Entity
and the State on the date specified in the Appendices, the Contractor shall notify the Entity and the State in
writing of that fact, and the reason(s) therefore. Under Section 2-7-503(3)(a), MCA, all audits must be
completed and the reports issued within one year from the close of the last fiscal year covered by the audit. If
the audit is conducted in accordance with the provisions of OMB Circular A-133, the Contractor shall also
complete the audit and issue the audit report within the time period required by that Circular, unless a longer
period has been agreed to in advance by the federal cognizant or oversight agency for audit. If the Entity has
requested and received an extension of the A-133 due date from a federal agency, the Entity shall submit a
copy of the approved extension to the State.
8. Audit Presentation: The final audit report must contain basic financial statements and required supplementary
information consistent with financial reporting standards in effect for the year or years being audited, as
established by the Governmental Accounting Standards Board. In addition, other supplementary information
required by provisions within this contract and by OMB Circular A-133 must also be included, if applicable.
A. The final audit report must also contain any other financial statements and supporting schedules and
information as agreed upon by the Entity and Contractor.
B . The financial statements presented must be in accordance with the financial reporting standards in effect
for the year or years being audited, as described above. If the accounting records or other circumstances
do not permit financial statements to comply with these requirements, the Contractor shall notify the
FORM/SACO1 Page 4 of 12 10/11
8. continued:
State of those conditions and describe the financial statements that will be presented. The applicable
auditor's reports must also be modified as required to reflect a departure from generally accepted
accounting principles.
C. If the audit is of a school district with separate elementary and high school district general funds, the
general funds must be combined as a single major fund. All other funds must be separately considered
for major fund criteria.
D. If the audit is a biennial audit covering two years, the Contractor shall present complete financial
statements as specified above for each year covered by the audit. However, note disclosures for both
fiscal years may be in one set of notes, with separate fiscal year disclosures as necessary. The two years
must be presented under one audit report cover and opined upon in one Independent Auditor's Report.
9. Auditor's Deports: All audit reports must contain the following auditor's reports, which must comply with
applicable professional standards in effect for the fiscal year or years being audited:
A. an independent auditor's report on the financial statements of the Entity;
B. a report on internal control over financial reporting and on compliance and other matters based on an
audit of financial statements performed in accordance with Government Auditing Standards. If
applicable, this report must include information about fraud, illegal acts, significant violations of
provisions of contracts or grant agreements, and significant abuse, or indications of these acts.
C. a report disclosing any lack of compliance with State statutes, rules, regulations, or ordinances that
would not have a material effect on the financial statements, but of which the Contractor becomes aware
during the course of the audit. This report must be referred to in the report required in 9.B . above. This
report may be combined with other reports if appropriate, or the findings may be included in a
management letter. If included in a management letter, that letter must be included as a part of, or
accompanying, the audit report.
D. a report on any supplemental schedules or information presented, if any such schedules or information
are presented in the audit report. This report may be given in a supplemental information paragraph of
the auditor's report on the financial statements (9.A. above), or in a separate report. For the following
supplemental information, the Contractor shall report on whether the information is fairly stated, in all
material respects, "in relation to" the financial statements as a whole, unless the condition of the
financial records do not allow the auditor to render such an opinion:
• Supplemental schedule of school district enrollment required in paragraph 1 LA;
• Supplemental schedule of school district extracurricular fund financial activities required in
paragraph 11 B ; and
• Supplemental schedule of expenditures of federal awards required by OMB circular A-133
and in paragraph 10.A.
E. a report disclosing the action taken by the Entity to correct any deficiencies or implement any
recommendations contained in the prior audit report. This report must be in a format that specifically
identifies, by title or summary, each deficiency or recommendation contained in the prior audit report
and the action taken by the Entity on each such deficiency or recommendation.
F. If the Contractor includes audit findings in the reports referenced in 9.B. and 9.C. above or in a
FORM/SAC01 Page 5 of 12 10/11
9. continued:
management letter, the views of Entity officials and their planned corrective actions must also be
included, as required by Government Auditing Standards, if they are available at the time the Contractor
files copies of the audit report with the State. If the views and planned corrective actions are not
available at that time, the Contractor shall so indicate in the reports.
10. Single Audits: All audit reports for single audits done in accordance with OMB Circular A-133 must also
contain the following:
A. a schedule of expenditures of federal awards. As required by OMB Circular A-133, the schedule must:
(i) list individual federal programs by federal agency. For federal programs included in a cluster
of programs, list individual federal programs within a cluster of programs;
(ii) for federal awards received as a subrecipient, include the name of the pass -through entity and
identifying number assigned by the pass -through entity;
(iii) provide total federal awards expended for each individual federal program and the CFDA
number or other identifying number when the CFDA information is not available;
(iv) include notes that describe the significant accounting policies used in preparing the schedule;
(v) to the extent practical, for pass -through entities identification in the schedule of the total
amount provided to subrecipients from each federal program; and
(vi) in either the schedule or a note to the schedule, the value of the federal awards expended in
the form of non -cash assistance, the amount of insurance in effect during the year, and loans
or loan guarantees outstanding at year end. While not required, it is preferable to present this
information in the schedule.
B . a report on the schedule of expenditures of federal awards. This report may be combined with other
reports as provided by OMB Circular A-133 and professional standards. This report must comply with
applicable professional standards in effect for the fiscal year or years being audited.
C. a report on compliance with requirements that could have a direct and material effect on each major
program and on internal control over compliance in accordance with OMB Circular A-13 3. This report
must refer to the separate schedule of findings and questioned costs described in paragraph 10.1). of the
contract. This report must comply with applicable professional standards in effect for the fiscal year or
years being audited.
D. a schedule of findings and questioned costs which must include the information required by OMB
Circular A-13 3.
E. the corrective action plan required by OMB Circular A-133, if that plan is available at the time the
Contractor files copies of the audit report with the State. This corrective action plan may be combined
with the Entity's planned corrective actions related to findings reported in accordance with Government
Auditing Standards, as provided in paragraph 9.F., above.
11. School Districts: School district audit reports must also include the following as supplemental
FORM/SAC01 Page 6 of 12 10/11
11. continued:
information/schedules:
A. a schedule of the district's enrollment as reported to the Office of Public Instruction for the fiscal year or
years being audited. The schedule must contain the enrollment both as reported in the Fall and Spring
enrollment reports and as documented by the school district's enrollment records; and
B. a detailed schedule of extracurricular fund financial activities.
12. Written Report to Entity: The Contractor shall render a single, written report for the Entity audited. The
report must include, or be accompanied by, all written reports and letters discussing findings and
recommendations from the Contractor to the Entity, including but not limited to the reports and
schedules referred to in paragraphs 9 and 10 above as well as an management letters that include
findings and recommendations.
13. Exit Interview: Before submitting the final audit report, the Contractor shall hold an exit review conference
in which the audit results are discussed with those charged with governance and appropriate Entity officials
and employees. The Contractor shall ensure that all members of the governing body and key members
of management are notified of this exit conference. The Contractor further agrees that before submitting
the final report, it will not discuss the audit findings with anyone other than the Entity or the State. However,
once the Contractor delivers the final audit report, the report is deemed to be a public record.
14. Report Distribution: The Contractor and Entity shall file copies of the audit report as specified below:
A. The Contractor shall provide the Entity with the number of copies of the audit report specified in
Appendices A, B and C and the cost of those copies is included in the total price for the engagement as
set out in paragraph 2.A., above, and in the Appendices. The Contractor shall submit one of these copies
to the attorney for the Entity.
B Upon request by the Entity, the Contractor shall provide additional copies of the audit report at a price
per copy agreed upon by the Entity and Contractor.
C. The Contractor shall provide the State with four copies of each audit report at no charge. These copies
must be sent to the State at the same time the Contractor delivers the final audit report to the
Entity and must include any management letters that include findings and recommendations. A
letter of transmittal must accompany the State's copies, advising the State of the date of the exit
conference, the date the final report was delivered to the Entity, the date of the audit report, the actual
number of hours spent by the Contractor in the conduct of the audit, the total audit fees billed the Entity,
whether the audit was conducted in accordance with the provisions of OMB Circular A- 13 3, and whether
there were any findings or opinion qualifications in the audit report, and, if so, whether the entity's
corrective action plan or response was included as part of or submitted with the audit report.
D. If the Entity is a school district or associated cooperative, the Contractor shall provide copies of the audit
report to the Office of Public Instruction, the county superintendent of schools, and the county attorney.
E. If the Entity is a city or town fire department relief association disability and pension fund, the
Contractor shall provide one copy of the audit report to the city or town clerk.
F. If the audit is a single audit conducted in accordance with the provisions of OMB Circular A-133, the
FORM/SAC01 Page 7 of 12 10/11
14. continued:
Entity shall provide copies of the reporting package defined in OMB Circular A- 13 3 and the data
collection form to the federal clearinghouse designated by OMB. In addition, the Entity shall provide
either a copy of the reporting package, or the alternative written notification as described by OMB
Circular A- 133 to all federal, state and other granting and pass -through agencies as required by Circular
A-133.
15. Entity Response: If not included in the audit report as provided in paragraphs 9.F. and 10.E., within 30 days
after receiving the audit report, the Entity shall notify the State in writing as to what action it plans to take to
correct any deficiencies or implement any recommendations identified or contained in the audit report, as
required by Section 2-7-515, MCA, and ARM 2.4.409. This notification must also address any findings
and recommendations contained in management letters, which are considered a part of the audit report
as prescribed in paragraph 12. If the audit is a single audit conducted in accordance with OMB Circular A-
13 3 , this corrective action plan must also meet the requirements of Circular A- 13 3 and contain all information
required by that Circular.
16. Entity's Attorney: If requested by the State, the attorney for the Entity shall report to the State on the actions
taken or the proceedings instituted or to be instituted relating to violations of law and nonperformance of duty
as required by Section 2-7-515(4), MCA. The attorney shall report to the State within 30 days after receiving
the request.
17. Certification of Auditor Independence: The Contractor certifies that, as required by generally accepted
government auditing standards, it and its principals and employees are independent in all matters with respect
to this engagement. This contract shall not include non -audit services, and the Contractor shall neither arrange
for nor accept non -auditing work with the Entity which could in any way impair the Contractor's independence
in violation of professional standards. If required by the State, the Contractor shall document that
independence has been maintained in both fact and appearance as required by professional auditing standards.
18. Prime Contractor: The Contractor is the prime contractor and is responsible, in total, for all work of any
subcontractors. The Contractor shall obtain the written approval of the Entity and the State before
engaging correspondent Contractors, consultants, or subcontractors to provide services in connection with this
audit. Any Contractors subcontracted to perform audit work must be on the Roster of Independent
Auditors authorized to conduct audits of Montana local governments that is maintained by the Local
Government Services Bureau. The Contractor is responsible to the Entity and the State for the acts and
omissions of all correspondent Contractors, consultants, subcontractors, or agents and of persons directly or
indirectly employed by such correspondent Contractors, consultants, subcontractors or agents, and for the acts
and omissions of persons employed directly by the Contractor. Further, nothing contained within this contract
creates any contractual relationship between any correspondent Contractor, consultant, or subcontractor and
the State.
19. Entrance and Exit Conferences: The State may participate in all entrance and exit conferences between the
Entity and Contractor, as well as all major conferences dealing with audit exceptions and recommendations
regarding accounting or operating procedures, management policies, or internal control changes.
20. Access to Records: The Contractor shall give the State and, when required by law, the Montana Legislative
Audit Division, access to the Contractor's audit programs, supporting working papers, time records, and all
other documents relating to the audit. Access to these documents must be provided at the State's offices in
Helena, Montana. Access to working papers includes the right of the State to obtain copies of working papers,
as is reasonable and necessary. The Contractor shall make the audit programs and supporting working papers
FORM/SAC01 Page 8 of 12 10/11
20. continued:
available to the State for use by the State or other public accounting firms as directed by the State in future
audits of the Entity. The Contractor shall make the audit programs and supporting working papers available to
the cognizant or oversight agency for audit or its designee, federal agencies providing direct or indirect
funding, or the U.S. General Accounting Office, if requested. Access to working papers includes the right of
federal agencies to obtain copies of working papers, as is reasonable and necessary. The Contractor shall
retain the audit report, audit programs, and audit working papers for a minimum of five years from the date of
the audit report, unless the State notifies the Contractor to extend the retention period. If professional
standards or other applicable laws, rules, or regulations require a longer retention period, the Contractor shall
retain the above materials for that specified period.
21. State Review: As provided by Section 2-7-522, MCA, the State may review the audit report submitted by the
Contractor. If the State determines that reporting requirements have not been met, it will notify the Entity and
the Contractor of the significant issues of noncompliance. The Contractor shall correct the identified
deficiencies within 60 days of notification.
22. Independent Contractor: The Entity and the State recognize that the Contractor is an independent contractor
and neither its principals nor its employees are employees of the State or Entity for purposes of tax, retirement
system, or social security (FICA) withholding.
23. Workers' Compensation: The Contractor certifies that it carries Workers' Compensation for its employees
and that it has either elected Workers' Compensation or has an approved Independent Contractor's Exemption
covering the Contractor while performing work under this contract. (Montana Code Annotated, Title 39,
Chapter 71) Neither the Contractor nor its employees are State employees for the purposes of this paragraph.
24. Indemnification: The Contractor agrees to protect, defend, and save the State and Entity, their elected and
appointed officials, agents, and employees, while acting within the scope of their duties as such, harmless from
and against all claims, demands, and causes of action of any kind or character, including the cost of defense
thereof, arising in favor of the Contractor's employees or third parties on account of bodily or personal
injuries, death, or damage to property arising out of services performed or omissions of services or in any way
resulting from the acts or omission of the Contractor and/or its agents, employees, representatives, assigns, and
subcontractors, except the sole negligence of the State or Entity, under this agreement.
If the Contractor is or may be obligated to pay any cost, settlement, judgment, fine, penalty, or similar award or
sanction as a result of a claim, investigation, or other proceeding instituted by any third party, then to the
extent that such obligation is or may be a direct or indirect result of the Entity' s intentional or knowing
misrepresentation or provision to the Contractor of inaccurate or incomplete information in connection with
this engagement, and not any failure on the Contractor's part to comply with professional standards, the Entity
shall indemnify, defend, and hold harmless the Contractor against such obligations.
25. Insurance: Contractor shall maintain for the duration of the contract, at its cost and expense, occurrence
coverage insurance against claims for injuries to persons or damages to property which may arise from or in
connection with the performance of the work by the Contractor, and/or its agents, employees, representatives,
assigns, or subcontractors. The Contractor's insurance coverage shall be primary insurance for the
Contractor's negligence as respects the State and Entity and their elected officers, officials, employees, and
volunteers. Any insurance or self-insurance maintained by the State and Entity, their officers, officials,
employees or volunteers shall be excess of the Contractor's insurance and shall not contribute with it
The Contractor shall purchase and maintain occurrence coverage to cover such claims as may be caused by any
FORM/SACO1 Page 9 of 12 10/11
25. continued:
act, omission, negligence of the Contractor or its officers, agents, representatives, assigns or subcontractors.
Note: If occurrence coverage is unavailable or cost -prohibitive, the state will accept `claims made' coverage
provided the following conditions are met: 1) the commencement date of the contract must not fall outside the
effective date of insurance coverage and it will be the retroactive date for insurance coverage in future years,
and 2) the claims made policy must have a three-year tail for claims that are made (filed) after the cancellation
or expiration date of the policy.
The State and Entity reserve the right to require complete copies of insurance policies at all times.
26. Compliance with Laws: The Contractor shall, in performance of work under this contract, fully comply with
all applicable federal, state, or local laws, rules and regulations, including the Montana Human Rights Act, the
Civil Rights Act of 1964, the Age Discrimination Act of 1975, the Americans with Disabilities Act of 1990,
and Section 504 of the Rehabilitation Act of 1973. Any subletting or subcontracting by the Contractor
subjects subcontractors to the same provisions. In accordance with Section 49-3-207, MCA, the Contractor
agrees that the hiring of persons to perform the contract will be made on the basis of merit and qualifications
and there will be no discrimination based upon race, color, religion, creed, political ideas, sex, age, marital
status, physical or mental disability, or national origin by the persons performing the Contract.
27. Work Accommodations: The Entity shall provide the Contractor with reasonable space in which to conduct
the audit and respond promptly to requests for information as well as for all necessary books and records.
Support for clerical, equipment, and photocopying or reproduction services shall be agreed upon by the Entity
and the Contractor as specified in Appendices A, B and C.
28. Termination before Audit Has Commenced: Before the commencement of the audit, either the Contractor
or the Entity, with the State's consent, or the State, may cancel this contract by providing 20 days' written
notice to the other parties. The contract may be canceled under this paragraph for cause. Cause includes, but is
not limited to, failure of any party to comply with the terms of this contract or with any Administrative Rule
adopted by the State under the authority of Title 2, Chapter 7, Part 5, of the Montana Code Annotated.
In addition, if both the Contractor and the Entity mutually agree to cancel this contract before the
commencement of the audit, for convenience, the State shall consent to cancellation of the contract upon
written notification by the Contractor and the Entity of their agreement to cancel this contract.
The State, however, will not consent to the cancellation of an audit contract for the sole purpose of allowing
the Contractor and Entity to then enter into a new contract that extends the number of fiscal years to be audited
by the Contractor. Unless there are extenuating circumstances, the existing audit contract must be completed
first. This provision does not prohibit the cancellation of a contract for the purpose of replacing an annual
audit with a biennial audit.
29. Termination after the Audit Has Commenced: After the audit has commenced, but before the audit report
has been issued, either the Contractor or the Entity, with the State's consent, or the State, may cancel this
contract for failure of any party to comply with the terms of this contract or with any Administrative Rule
adopted by the State under the authority of Title 2, Chapter 7, Part 5, MCA, or for other cause. This right of
cancellation may be exercised by providing the breaching party written notice of the default and, if applicable,
provide 20 days from the date of the notice to cure the default. If the Contractor is the breaching party and
fails to remedy the breach, then the Contractor is not entitled to the audit fee set out in this contract. If the
Entity is the breaching party, the Entity shall pay the Contractor a pro rata portion of the audit fee set out in
this contract, based on the percentage of work completed at the time of cancellation. In addition, if both the
FORM/SACO1 Page 10 of 12 10/11
29. continued:
Contractor and the Entity mutually agree to cancel this contract for convenience; the State shall consent to
cancellation of the contract upon written notification by the Contractor and the Entity of their agreement to
cancel this contract.
30. ProfessionalRequirements: By signing this contract, the Contractor certifies that it is in compliance with the
continuing professional education requirements and the external quality control review requirements as set out
in Government Auditing Standards, as established by the Comptroller General of the United States. The State
may require the Contractor to provide evidence that it has met the above requirements.
31. Single Audit Act Certification: If the audit is required to meet the requirements of the Single Audit Act of
1984 as amended by the Single Audit Act Amendments of 1996 and OMB Circular A-133, the Contractor
certifies that neither it nor any of its principals is presently debarred, suspended, proposed for debarment,
declared ineligible, or voluntarily excluded from performing audits by any Federal department or agency.
32. Governing Law and venue: This Contract is governed by the laws of Montana. The parties agree that any
litigation concerning this Contract in which the State is named as a party must be brought in the First Judicial
District in and for the County of Lewis and Clark, State of Montana, and each party shall pay its own costs and
attorney fees. The parties also agree that any litigation concerning this Contract in which the State is not
named as a party must be brought in the Judicial District in and for the County in which the Entity is located,
and each party shall pay its own costs and attorney fees.
33. Notice: All notices under this contract must be in writing and will be deemed given if delivered personally, by
mail, certified, return receipt requested, or by e-mail. All notices will (a) if delivered personally, be deemed
given upon delivery, (b) if delivered by mail, be deemed given upon receipt, or (c) if delivered by e-mail be
deemed given upon receipt.
34. Invalid Provision: If any provision of this contract is held to be illegal or unenforceable and the parties' rights
or obligations will not be materially and adversely affected, such provision will be (1) severed from the
contract, (b) the contract will be interpreted as if such provision was never a part of the contract and (c) the
remaining provisions will stay in effect.
35. Authority: Each party represents that the person signing this contract has the authority to bind that party.
36. Entire Agreement and Amendment: This contract and the attached Appendices contain the entire
understanding and agreement of the parties. No modification or amendment of this contract is valid unless it
is reduced to writing, signed by the parties, and made a part of this contract.
FORM/SACO1 Page 11 of 12 10/11
IN WITNESS WHEREOF, Contractor, Entity, and State have executed this Standard Audit Contract on the date first
above written:
Certified or Licensed Public Accountant
0
Firm Name
Authorized Representative
Governmental Entity
mo
Entity Name
Authorized Representative
Montana Department of Administration,
Local Government Services Bureau
0
Approved By
Date:
Date:
Date:
FORM/SAC01 Page 12 of 12 10/11
APPENDIX A
Initial or Sole Audit under this Contract
GOVERNMENTAL ENTITY (ENTITY):
Telephone: Address:
Contact Person(s):
PUBLIC ACCOUNTANT/ACCOUNTING
FIRM (CONTRACTOR): _
Address:
Telephone:
Contact Person(s):
(Street Address or P.O. Box)
, MT
(City/Town)
(Street Address or P.O. Box)
MT
(City/Town)
1. Audit Period and Dates of Engagement:
A. This audit will cover the fiscal year(s) ending
(and ).
(Month & Day) (Year) (Year)
B . Date to commence audit work:
C. Date to submit final audit report
to Entity and State:
2. Time and Price for Engagement:
A. Estimated total hours -
B. Price for audit personnel $
Price for Travel
Price for typing, clerical
and report preparation
Total price for this
engagement $
3. The reporting entity contains the following discretely presented component units:
4. Date Annual Financial Report or a trial balance will be available:
5. Number of copies of audit report Contractor will provide to Entity:
(Zip Code)
(Zip Code)
FORM/SAC01 Page Al 10/11
6. The Entity will provide clerical, equipment, and photocopying or reproduction services to the Contractor
as follows:
7. The audit scope with regard to federal financial assistance received by the Entity for the above fiscal
year(s) will be as indicated below:
EJ The audit will be a single audit conducted in accordance with the provisions of OMB Circular A-133 because the
Entity expended a total amount of federal awards equal to or in excess of $500,000 during the fiscal year(s), or
such other dollar amount as may be established by OMB that is effective for the fiscal year(s) being audited.
OR
The audit will not be a single audit conducted in accordance with the provisions of OMB Circular A-133 and will
p 9
not include audit coverage of any federal financial assistance in accordance with requirements of that Circular,
because the Entity expended a total amount of federal awards of less than $500,000 during the fiscal year(s), or
such other dollar amount as may be established by OMB that is effective for the fiscal year(s) being audited.
Certified or Licensed Public Accountant
Firm Name
Authorized Representative
Governmental ]Entity
Entity Name
Authorized Representative
]Montana Department of Administration,
Local Government Services Bureau
=0
Approved :,
Date:
Date:
Date:
FORM/SAC01 Page A2 10/11
APPENDIX B
Subsequent Audit under this Contract
GOVERNMENTAL ENTITY (ENTITY):
Telephone: Address:
Contact Person(s):
PUBLIC ACCOUNTANT/ACCOUNTING
FIRM (CONTRACTOR): _
Address:
Telephone:
Contact Person(s):
(Street Address or P.O. Box)
, MT
(City/Town) (Zip Code)
(Street Address or P.O. Box)
, MT
(City/Town)
1. Audit Period and Dates of Engagement:
A. This audit will cover the fiscal year(s) ending
(and }.
(Month & Day) (Year) (Year)
B. Date to commence audit work:
C. Date to submit final audit report
to Entity and State:
2. Time and Price for Engagement:
A. Estimated total hours -
B. Price for audit personnel $
Price for Travel
Price for typing, clerical
and report preparation
Total price for this
engagement $
3. The reporting entity contains the following discretely presented component units:
4. Date Annual Financial Report or a trial balance will be available:
5. Number of copies of audit report Contractor will provide to Entity:
(Zip Code)
FORM/SAC01 Page B 1 10/11
6. The Entity will provide clerical, equipment, and photocopying or reproduction services to the Contractor
as follows:
7. The audit scope with regard to federal financial assistance received by the Entity for the above fiscal
year(s) will be as indicated below:
F-I The audit will be a single audit conducted in accordance with the provisions of OMB Circular A-133 because the
Entity expended a total amount of federal awards equal to or in excess of $500,000 during the fiscal year(s), or
such other dollar amount as may be established by OMB that is effective for the fiscal year(s) being audited.
OR
The audit will not be a single audit conducted in accordance with the provisions of OMB Circular A-133 and will
p 9
not include audit coverage of any federal financial assistance in accordance with requirements of that Circular,
because the Entity expended a total amount of federal awards of less than $500,000 during the fiscal year(s), or
such other dollar amount as may be established by OMB that is effective for the fiscal year(s) being audited.
Certified or Licensed Public Accountant
Firm Name
Authorized Representative
Governmental Entity
r
Entity Name
Authorized Representative
Montana Department of Administration,
Local Government Services Bureau
MIDI
Approved By
Date:
Date:
Date:
FORM/SAC01 Page B2 10/11
APPENDIX C
Subsequent Audit under this Contract
GOVERNMENTAL ENTITY (ENTITY):
Telephone: Address:
Contact Person(s):
PUBLIC ACCOUNTANT/ACCOUNTING
FIRM (CONTRACTOR):
Address:
Telephone:
Contact Person(s):
(Street Address or P.O. Box)
MT
(City/Town)
(Street Address or P.O. Box)
MT
(City/Town)
1. Audit Period and Dates of Engagement:
A. This audit will cover the fiscal year(s) ending
(and ).
(Month & Day) (Year) (Year)
B . Date to commence audit work:
C. Date to submit final audit report
to Entity and State:
2. Time and Price for Engagement:
A. Estimated total hours -
B . Price for audit personnel $
Price for Travel
Price for typing, clerical
and report preparation
Total price for this
engagement $
3. The reporting entity contains the following discretely presented component units:
4. Date Annual Financial Report or a trial balance will be available:
5. Number of copies of audit report Contractor will provide to Entity:
(Zip Code)
(Zip Code)
FORM/SAC01 Page C 1 10/11
6. The Entity will provide clerical, equipment, and photocopying or reproduction services to the Contractor as
follows:
7. The audit scope with regard to federal financial assistance received by the Entity for the above fiscal year(s)
will be as indicated below:
El The audit will be a single audit conducted in accordance with the provisions of OMB Circular A-133 because the
Entity expended a total amount of federal awards equal to or in excess of $500,000 during the fiscal year(s), or
such other dollar amount as may be established by OMB that is effective for the fiscal year(s) being audited.
OR
El The audit will not be a single audit conducted in accordance with the provisions of OMB Circular A-133 and will
not include audit coverage of any federal financial assistance in accordance with requirements of that Circular,
because the Entity expended a total amount of federal awards of less than $500,000 during the fiscal year(s), or
such other dollar amount as may be established by OMB that is effective for the fiscal year(s) being audited.
Certified or Licensed Public Accountant
UIR
Firm Name
Date:
Authorized Representative
Governmental Entity
M
Entity Name
Date:
Authorized Representative
Montana Department of Administration,
Local Government Services Bureau
Date:
Approved By
FORM/SAC01 Page C2 10/11
410012
Denning, Downey & Associates, P. C
CEIR TIFIED PUBLIC- - A CCO UNTANTS
P.O. Box 1957, Kalispell, UT 59903-195 7
(406),756-68179 ® FAX(406) 257-7879 - E-Mail ddat udit. con?
KIM.M. Dry wn,�-y, CPA CGRAVCFE CJTP CITP nCGFM. CFF, Roben K. Denhi.g, CTA,
June 2, 2011
City of Kalispell
Mayor and City Council
Attn: Army Robertson, Finance Director
PO Box 1997
Kalispell,' MT 59903
�T
We are --our
UJIL rL11;Z,
to provide for the City 'Of Kalispell.
We will apply the. agreed -upon procedures, which. the Montana Department of Labor and
Industry, Building Codes Bureau
has specified to ..the :Building Code Enforcement Program of
the City of Kal ispe'll - as of and for the. fiscal year eh ded June 3*0.-'201 L This engagement is solely
to assist' the. Montana Department of Labor. and Industry, "B ldinR C Codes ',
Building 6 �'d' e ureau for the
purpose
-th 'financial : r`_ elate''d kaftite and
of determining wh'ethe'i.•,Ah local.gorrernrnent ha8:'co with. ecm liedstatutes n
P
administrative rules lati'g,.j localp�.ograrxll-c
re n o. building..: code enforcement
., The fin" i'' an al
state'n ents -will bpresented.--on...-the' -modified a6crual basis* ,of. accounting Our -en agpinent t , o
e
apply -agreed-upon procedures' will :.b&pe'rform' 6'di in accordance with. standa'rds,establiSh'd
e
b-y; tfi"
.,
An Institute. of� led -Public Accountants. The sufficiene''procedures_,Cer'tif V of --thejs.y
.
the. res-pon'Montana Dep-sibil ity .:Of the: Montana Department artmen., of Lab..0r and Industry'!. Building. Codes Bureau, as
red bv'-. ARM 24.301.20�. C entiv. we'make 'n'
orequionse.qu . repTesenfation regarding the
sufficiency of the procedur'es'de` scribed*. -in the at-taohed schedule. 'either for the ' uYP0se for hich
p�V
this .'report has been requested or for any other pur'po'se - If, -for , any -reasonwe are
. ..,unable, to
complete the procedures, we will describe
any restrictions on the performance
ormance of the proce'dures -
l'
in our. report, or will .not Issue a' report as a result of this ' engagement.,
.
Because of the agreed -Upon
procedutes listAd in ARM .24.301.208 do not constitute are audit we
-will not express an 'opinion on ..'the City of
Kalispell Bufldik-g Code. Enforc ement l'xo g-
ram's
financial statements or thereof. In addit'
any elements., accounts, or items ion, we have no
obligation t pe form 'e' g o-, r any procedures bevond.tho'se*II"sted in ine attached schedule.
We. will advise. you about appro-priate accounting princi i ation and will -assist -
nt
ples and their appl*c
firth
nmity .' 6 fill'
Outfinarciale resp QnsJ,
in.. the prepardtion�.o state'men't§.'th
8t einents,
-. Li
-est'
lud "bl hi�.e* a
iainsisresposil�ItyincU. 1"
S ate
e Ahe a. is tit aid
in enanpa,
cat can o
"`p
mal-
anetrveconttOis over financial rpp - oft" Q.q
Tec6id le...,--in"te
on:
ing -o' -are.
_:-S
dd* :''t-
acoQ es -and'.' the,' f6g�ard Assets :,.You Zesponsjoie ius
e,
s.- erial misstatem6ntS*.'.-:-'anC, or.. ri, e—
anc emen .-porrec,
con: irmi
h'
urin -audit" -Ah" 65,ect'-' f uncorrected
management representation the
that', s o :any.:_,
....missatemen s aggregated b y,,.us Uri the "current ngagemehf,and`ertain"InA.. OL'perio
d'
presented are immaterial, both individually and in the aggregate, to the financial statements taken
as a, whole.
As part of our engagement, we may propose standard, adjusting, or correcting Journal entries- to
your financial statements. You are responsible for reviewing the entries and understanding the
nature of any proposed entries and the impact they have on the financial statements. Further, you
are responsible for designating a qualified management -level individual to be responsible and
accountable for overseeing these services.
We will submit a report listing the procedures performed and our findings. This report is
intended 'solely for the information and use of the City of Kalispell Building Code Enforcement
Program and the Montana Department of Labor and Industry, Building Codes Bureau, and is not
intended to be and should not be used by anyone other than these specified parties. Our report
will contain a paragraph indicating that had we performed additional procedures, other matters
might have come to our attention that would have been reported to you.
Vue plan to begin our Procedures approx-Mietely JUirC201anrnesP-sle,ms,d s 1
are encountered, the engagement should be completed in August 201 I. At conclusion of our
engagement; we will require a representation letter from management that, among other things,
will confirm management's responsibility for the presentation of the Building Code Enforcement
Program of the City of Kalispell in accordance with generally accepted accounting principles.
Our fee for these services will be $3,500, -plus out-of-pocket costs (such as report reproduction,
typing.., postage,. travel, copies, telephone, etc).. The above fee is based on anticipated cooperation
from_ your personnel and the. assumption that unexpected circumstances will not be encountered
during the engagement. If we elect to terminate our services, you. will be obligated to
compensate- us for all time expended and to reimburse us for all out-of-pocket expenditures
through the date of termindtion.
We appreciate the o, * pportunity to assist you and believe this letter accurately summarizes the
significant terms of our engagement. If you have any questions, please let us know. 'If you'agree
withthe terms of our engagement as described in this letter,. please sign the enclosed copy and
return it to us. If the need for additional services arises,, our agreement with you will need to be
revised. It is customary for us to enumerate.. these revisions in an addendum to this letter. If
-r: X;rfa Ab 11 -a- knomr1pr1orp in
rlpd ,Vill .11! at t ey c.
a:"-, 1 U-1 L I A -L.L 1%., %TG:i Ix
writing their responsibility for the sufficiency of procedures.
,Vey truly. you, -
Robert.K. Dennima, CPA., CGFM, CFF,, CITP
.Denning, Downey & Associates, CPA's, P,C,-
R.D/sh
RESPONSE.
5 Page' 2.6
This letter correctly sets forth the understanding of the City of Kalispell Building Code
Enforcement Program.
BY: Date:
/V
�f
Authorized Representative
ji�
Wv� t W �1- -
June 2, 2011
City of Kalispell
City Council
Attn: Amy Robertson, Finance Director
PO Box 1997
Kalispell, MT 59901
This letter constitutes an addendum to our original engagement letter dated August 7, 2006. The purpose
of this letter is to outline the -agreed-upon procedures that will be performed in connection with our
engagement. These procedure's were set by the Montana Department of Labor and Industry, Business
Standards Division,, Building Codes Bureau, for determining whether the local government has complied
with the financial. related statutes and administrative rules, relating to local building code enforcement
program.
431 1
T P jgr e-upor, proc.e.d.-arcs ..'rickide-
1. We will determine that the City's accounting records fully document the collection and
expenditure of all fees and charges related to the Building Code Enforcement Program
during the fiscal year. Based on the City's accounting records, we will present a
schedule of revenues, expenditures, and changes in fund balance of the. Building Code
Enforcement Fund for the fiscal. year, in Schedule A. (Note: If the City did not account
for the Building Code Enforcement Program in a separate special revenue fund, we will
indicate in which fund the Program was accounted, and the corresponding information
from that fund.)
2. We will compare the financial information included in the "Fiscal Report" submitted to
the State- Building Codes Bureau to corresponding information in the City's accounting.
records,, and we will verify that information is the same.
3. Frorn selected building permit applications, we will compare permit fees charged to, the
permit fee schedule established by. the City and approved by the State Building Codes
Bureau, and. -we will. verify that the .fees were the same.
4. From selected building permit applications, we will compare the total building permit fee
paid to the amount credited .to the Building Code Enforcement Program, and we will
verify that the amounts agree and that no portion of the fee is diverted to other -functions
of the government.
S. We will examine selected expenditures and other charge's made from- Building Code
i. 1.111C.7 Lid
costs -directly and -specifically identifiable to the enforc6m. . ent of building codes, (With the
exception of indirect costs charged.46 the Building Cod6 Enforcement Program— see
procedures 'T' and ".8"-below). ("Fixed Charges" and prior period adjustments will be
itemized in Schedule B.)
6. We w.111 examine "selected expenditures from the Building Code Enforcement Program
and we will determine that no portion of permit fees collected are used to support fire
departrnents,'Planning, zoning, . g, or other activities, except. to the extent that employees . of
those pogramsprovideiDdirect review 'inspection or other build,* . g code
nt- services o
en cerno for tie -Building 'Code" "EnforceM ' eiat Program. If soy .we obtain
.documen tati"o'n" .from the.goverrent 'hat
-supportsthe performance of thesedirect
services: and that documents these. are properly charged to the.'BulIdI"g -Code
.Enforcement. Program .for -8pecifi callv allowable services. (T,be costs related a fire
0 activities a' S6 eduto B
7. d!epartn '6nt's'planning;-z nin or other ac"'tiviti reported in. detafl, in
re report.
We'Wi `eii
If indirect. costs --'are: Allo.bat6d"to the-Buildin e. En fbrC'em' ent rogram.�CodProgram,
e asis. .,use ca e., c
that b -d-i& allo t ':''o*s't'�."to'th.e"..Buildin*- Cade Ehfo
g o rcemen gram ate:tie •
Pa'ko 4 of 5'm.
S.
a
11.
same basis used to allocate indirect costs to other proprietary funds of the City, and we
will verify, that indirect costs waived for any other proprietary fund of the City were also
waived for the .Building Code Enforcement Program. (Total indirect costs will be
itemized in Schedule B.)
If indirect costs are charged to the Building Code Enforcement Program, we will verify
that. they are limited to those costs allowed under OMB Circular A-87.
If there are transfers out of the Building Code Enforcement. Program Fund, we will
obtain detailed documentation from the City that describes the purposes and eventual
-uses of these transfers.. and verified that these purposes and uses are in accordahce, with
allowable expenditures, as addressed in the procedures performed above. (Transfers will
be itemized in Schedule B.)
We will verify that 0.5% of revenues from plan reviews and building permits (not
including revenues from electrical, mechanical or plumbing permits) collected during the
year were remitted'to the State Department of Labor and Industry for the building codes
education program.
Based on the financial information presented in Schedule A, we will determine whether
the reserve account (fund balance) exceeded the amount needed to support the Building
ki %�A A_JA A, A %_1 %11� 10 w - �,,- I ill verify that the City will take
steps to reduce permit fees.
All the terms of our original -engagement letter will apply to this addendum. This addendum will become
effective as soon as you sign and date the original copy of this letter and return the signed _copy tows.
Very truly yours,
Robert K. Denning, CPA, CGFM., CFF.., CITP
Denning, Downey & Associates, CPA's, P.C.
RD/sh
RESPONSE:,
This letter" correctly sets. forth the understanding of the City of Kalispell Building Code Enforcement
Program.
B v:
Authorized Representative
icoster of Independent Auditors Authorized to Conduct its of
Montana Local Governments for State Fiscal Year of 2013
As of January 25, 2013
Anderson ZurMuehlen & Co., P.C. Phone: (406) 721-7800
1821 South Ave West - 5th Floor Fax: (406) 721-4155
P.O. Box 2368 Email: psepp@azworld.com
Missoula MT, 59806-2368 Roster Number: 767
Anderson ZurMuehlen & Co., P.C. Phone: (406) 727-0888
21 Tenth Street South Fax: (406) 727-0895
P.O. Box 1605 Email: rreisig@azworld.com
Great Falls MT, 59403-1605 Roster Number: 228
Anderson ZurMuehlen & Co., P.C. Phone: (406) 782-0451
129 West Park, Suite 201 Fax: (406) 782-1819
P.O. Box 748 Email: ahill@azworld.com
Butte MT, 59703-0748 Roster Number: 202
Anderson ZurMuehlen & Co., P.C. Phone: (406) 442-1040
828 Great Northern Blvd. Fax: (406) 442-1100
P.O. Box 1040 Email: pjacques@azworld.com
Helena MT, 59624-1040 Roster Number: 203
Anderson ZurMuehlen & Co., P.C. Phone: (406) 245-5136
402 N. Broadway Fax: (406) 245-6056
PO Box 20435 Email: sfreese@azworld.com
Billings MT, 59104-0435 Roster Number: 201
Anderson ZurMuehlen & Co., P.C. Phone: (406) 556-6160
1007 E Main, Suite 300 Fax: (406) 586-8719
Bozeman MT, 59715 Email: kstafford@azworld.com
Roster Number: 750
Brenner, Averett & Co., P.C. Phone: (406) 433-5464
121 South Central Fax: (406) 433-6016
P.O. Box 1049 Email: hnwpc@midrivers.com
Sidney MT, 59270-1049 Roster Number: 752
Burke, Terry James CPA Phone: (406) 541-3709
103 South 5th Street East Fax* (406) 541-3708
Missoula MT, 59801 Email: burke@blackfoot.net
Roster Number: 656
CHMS, P.C. Phone: (406) 228-9391
741 3rd Avenue South Fax: (406) 228-2063
Glasgow MT, 59230-2222 Email: doris@chmspc.com
Roster Number: 213
Page 1 of 7
Roster Year 2013
Roster Year 2013
Roster Year 2013
Roster Year 2013
Roster Year 2013
Roster Year 2013
Roster Year 2013
Roster Year 2013
Roster Year 2013
Department of Administration1 1 Bureau
Rosterof IndependentAuditors Authorized 1; Conduct Audits 1
Montana1Governments12013
As of January 25, 2013
OHMS, P.C. Phone: (406) 433-2092
104 Second Avenue SW Fax: (406) 433-2095
P.O. Box 1067 Email: ken@chmspc.com
Sidney MT, 59270-1067 Roster Number: 590 Roster Year 2013
OHMS, P.C.
Phone: (406) 654-1575
41 South First West
Fax: (406) 654-2689
P.O. Box 1239
Email: marty@chmspc.com
Malta MT, 59538-1239
Roster Number: 214 Roster Year 2013
Child, Van Wagoner & Bradshaw, PLLC Phone: (801) 927-1337
1284 West Flint Meadow Drive Suite D Fax: (801) 927-1344
Kaysville UT, 84037 Email: scott@cpaone.net
Roster Number: 778 Roster Year 2013
Cote & Associates CPA PLLC Phone: (406) 543-8088
PO Box 430 Fax: (406) 721-9357
Missoula MT, 59806 Email: jennifercote@cote-mtcpas.com
Roster Number: 760 Roster Year 2013
Denning Downey & Associates, P.C. Phone: (406) 756-6879
P O BOX 1957 Fax: (406) 257-7879
Kalispell MT, 59903-1957 Email: dda@ddaudit.com
Roster Number: 721 Roster Year 2013
Dingus, Zarecor & Associates, PLLC Phone: (509) 242-0874
12015 East Main, Suite A Fax: (509) 242-0877
Spokane Valley WA, 99206 Email: tdingus@dzacpa.com
Roster Number: 771 Roster Year 2013
Douglas Wilson & Company, PC Phone: (406) 761-4645
1000 First Avenue South Fax: (406) 761-4619
P.O. Box 2845 Email: randy.boysun@dwcogf.com
Great Falls MT, 59403-2845 Roster Number: 264 Roster Year 2013
Doyle & Associates, P.C. Phone: (406) 273-0700
103 Tyler Way Fax: (406) 273-4300
PO Box 446 Email: tana@doyleandassoc.com
Lolo MT, 59847 Roster Number: 768 Roster Year 2013
Eide Bailly LLP Phone: (406) 896-2400
401 North 31 st Street, Suite 1120 Fax: (406) 252-8600
P.O. Box 7112 Email: smarkovich@eidebailly.com
Billings MT, 59103-7112 Roster Number: 742 Roster Year 2013
Page 2 of 7
Department of Administration - Local Government Services Bureau
Roster of IndependentAuditors Authorized to Conduct Audits 1
Montanail Governments forof 2013
As of January 25, 2013
Galusha, Higgins & Galusha, P.C. Phone: (406) 442-5520
910 N. Last Chance Gulch Fax: (406) 457-7245
P.O. Box 1699 Email: nathan@ghg-cpa.com
Helena MT, 59624-1699 Roster Number: 57 Roster Year 2013
Galusha, Higgins & Galusha, P.C. Phone: (406) 728-1800
101 East Front St., Suite 301 Fax: (406) 542-8758
P.O. Box 8867 Email: wayneh@ghg-cpa.com
Missoula MT, 59807-8867 Roster Number: 58 Roster Year 2013
Galusha, Higgins & Galusha, P.C. Phone: (406) 586-2386
777 East Main, Suite 201 Fax: (406) 5 87-4121
P.O. Box 340 Email: garry@ghg-cpa.com
Bozeman MT, 59771-0340 Roster Number: 55 Roster Year 2013
Galusha, Higgins & Galusha, P.C. Phone: (406) 248-1681
303 North Broadway - Suite 503 Fax: (406) 248-2855
P.O. Box 2532 Email: jim@ghg-cpa.com
Billings MT, 59103-2532 Roster Number: 54 Roster Year 2013
Galusha, Higgins & Galusha, P.C. Phone: (406) 265-3201
300 2nd Avenue Fax: (406) 265-5949
P.O. Box 1530 Email: curt@ghg-cpa.com
Havre MT, 59501-1530 Roster Number: 56 Roster Year 2013
Hamilton Consulting Group, PLLP Phone: (406) 265-6724
330 4th Street Fax: (406) 265-4385
P.O. Box 2200 Email: gordon@hamiltonconsultinggroup.com
Havre MT, 59501-2200 Roster Number: 739 Roster Year 2013
Holmes & Turner, P.C. Phone: (406) 587-4265
1283 North 14th Avenue, Ste 201 Fax: (406) 586-3111
Bozeman MT, 59715 Email: bill@holmesandturner.com
Roster Number: 80 Roster Year 2013
James J. Wosepka, PC Phone: (701) 872-4321
10 East Montana Avenue Fax: (701) 872-4320
P.O. Box 602 Email: jimjjwcpa@midstate.net
Baker MT, 59313-0602 Roster Number: 267 Roster Year 2013
Joseph Eve Phone: (406) 252-3535
401 North 31 st Street, Suite 1600 Fax: (406) 252-1764
Billings MT, 59101-1200 Email: christine.green@josepheve.com
Roster Number: 702 Roster Year 2013
Page 3 of 7
Department of Administration - Local Government Services Bureau
Roster of Independent Auditors Authorized to Conduct its of
Montana Local Governments for State Fiscal Year of 2013
As of January 25, 2013
Joseph Eve Phone: (406) 752-5225
14 3rd Street East - Suite 200 Fax: (406) 752-5221
Kalispell MT, 59901-4588 Email: christine.green@josepheve.com
Roster Number: 772 Roster Year 2013
Joseph Eve Phone: (406) 727-1798
410 Central Avenue Fax: (406) 727-3760
Strain Bldg, Suite 414 Email: christine.green@josepheve.com
Great Falls MT, 59401 Roster Number: 46 Roster Year 2013
Junkermier Clark Campanella Stevens PC Phone: (406) 442-6901
24 West 6th Avenue Fax: (406) 442-9690
P.O. Box 1164 Email: jsteinhoff@jccscpa.com
Helena MT, 59624-1164 Roster Number: 237 Roster Year 2013
Junkermier Clark Campanella Stevens PC Phone: (406) 587-1277
220 West Larnme - Suite 3A Fax: (406) 587-8794
P.O. Box 1965 Email: talbom@jccscpa.com
Bozeman MT, 59771-1965 Roster Number: 754 Roster Year 2013
Junkermier Clark Campanella Stevens PC Phone: (406) 549-4148
PO Box 16237 Fax: (406) 549-3003
Missoula MT, 59808-6237 Email: rramsbacher@jccscpa.com
Roster Number: 238 Roster Year 2013
Junkermier Clark Campanella Stevens PC Phone: (406) 755-3681
35 Three Mile Drive, Ste 101 Fax: (406) 755-6661
P.O. Box 9047 Email: tvanomy@jccscpa.com
Kalispell MT, 59904-9047 Roster Number: 731 Roster Year 2013
Junkermier Clark Campanella Stevens PC Phone: (406) 761-2820
501 Park Drive South Fax: (406) 761-2825
P.O. Box 989 Email: Istensland@jccscpa.com
Great Falls MT, 59403-0989 Roster Number: 236 Roster Year 2013
Loren W. Randall, CPA's, P.C. Phone: (406) 728-5539
1135 Strand Avenue Fax: (406) 728-5568
P.O. Box 4325 Email: loren@lwr-cpa.com
Missoula MT, 59806-4325 Roster Number: 553 Roster Year 2013
Mrachek Popp and Associates, P.C. Phone: (406) 252-6301
PO Box 7236 Fax: (406) 252-3096
Billings MT, 59103-7236 Email: gpopp@mrachekpopp.com
Roster Number: 764 Roster Year 2013
Page 4 of 7
Department of Administration - Local Government Services Bureau
Roster of Independent Auditors Authorized to Conduct Audits of
Montana Local Governments for State Fiscal Year of 2013
As of January 25, 2013
Newland and Company, P.C. Phone: (406) 846-3733
212 Missouri Avenue Fax: (406) 846-3735
P.O. Box 850 Email: mjohns@newlandpc.com
Deer Lodge MT, 59722 Roster Number: 399 Roster Year 2013
Newland and Company, P.C. Phone: (406) 494-4754
2900 Lexington Avenue Fax: (406) 494-4958
P.O. Box 3006 Email: rtamblyn@newlandpc.com
Butte MT, 59702-3006 Roster Number: 243 Roster Year 2013
Nicole M. Noonan, CPA, P.C. Phone: (406) 649-2436
435 Little Mill Creek Road Fax: (406) 649-2436
St. Regis MT, 59866 Email: noonanaccounting@hotmail.com
Roster Number: 770 Roster Year 2013
Niewedde and Wiens Phone: (402) 362-4410
PO Box 98 Fax: (402) 362-4418
York NE, 68467 Email: nwcpa@windstream.net
Roster Number: 773 Roster Year 2013
Olness and Associates, P.C. Phone: (406) 252-6230
2810 Central Avenue, Suite B Fax: (406) 245-6922
Billings MT, 59102 Email: brent@oInesscpa.com
Roster Number: 717 Roster Year 2013
Peck & Peck, CPA's, P.C. Phone: (406) 683-4254
312 South Pacific Fax: (406) 683-4255
P.O. Box 1046 Email: dennis@peckandpeckcpas.com
Dillon MT, 59725 Roster Number: 744 Roster Year 2013
Philip Emmons, CPA Phone: (406) 234-2201
PO Box 546 Fax:
Miles City MT, 59301 Email: philemmons7@yahoo.com
Roster Number: 774 Roster Year 2013
Rector & Reeder P.C. Phone: (770) 879-8411
1305 Lakes Parkway, Suite 110 Fax: (770) 879-8431
Lawrenceville GA, 30043 Email: drector@rr-cpa.com
Roster Number: 740 Roster Year 2013
Ronald Paul Foltz, CPA Phone: (406) 728-8130
120 West Main Fax: (406) 728-0957
P.O. Box 4605 Email: ron.foltz@ronfoltzcpa.com
Missoula MT, 59806-4605 Roster Number: 52 Roster Year 2013
Page 5 of 7
Department of Administration - Local Government Services Bureau
Roster of Independent Auditors Authorized to Conduct Audits of
Montana Local Governments for State Fiscal Year of 2013
As of January 25, 2013
Ross R. Stalcup, CPA
Phone: (406) 784-2090
3901 W US Highway 212
Fax: (406) 784-2138
Ashland MT, 59003
Email: rrscpa@gmail.com
Roster Number: 256
Roster Year 2013
Rowland, Thomas & Company
Phone: (406) 234-4241
908 Main Street
Fax: (406) 234-4248
P.O. Box 610
Email: rtco@midrivers.com
Miles City MT, 59301-0610
Roster Number: 155
Roster Year 2013
Rudd & Company, PLLC
Phone: (406) 585-3393
3805 Valley Commons Drive Suite 7
Fax: (406) 585-7132
Bozeman MT, 59718
Email: sholton@ruddeo.com
Roster Number: 763
Roster Year 2013
Smith, Lange & Halley, P.C.
Phone: (406) 433-45 10
1060 South Central Avenue
Fax: (406) 433-4518
Sidney MT, 59270-5218
Email: slhpc@midrivers.com
Roster Number: 510
Roster Year 2013
Strom & Associates, PC
Phone: (406) 252-2765
PO Box 1980
Fax: (406) 252-2765
Billings MT, 59103
Email: audit @stromcpa.net
Roster Number: 736
Roster Year 2013
Summers, McNea & Company, P.C.
Phone: (406) 652-2320
80 25th Street West
Fax: (406) 652-2043
Billings MT, 59102-4662
Email: tmcnea@summers-mcnea.com
Roster Number: 173
Roster Year 2013
Tompkins & Peters CPAs, P.C.
Phone: (406) 251-4272
1715 South Reserve Street, Suite 1
Fax: (406) 363-3866
Missoula MT, 59801
Email: dana@tpcpas.com
Roster Number: 800
Roster Year 2013
Tompkins & Peters CPAs, P.C.
Phone: (406) 363-0097
1659 North 1st Street, Suite 2
Fax: (406) 363-3866
Hamilton MT, 59840
Email: dana@tpcpas.com
Roster Number: 766
Roster Year 2013
Tripp & Associates
Phone: (406) 661-7536
1645 Avenue D, Suite E
Fax: (406) 248-5150
Billings MT, 59102
Email: setrippcpa@hotmall.com
Roster Number: 777
Roster Year 2013
Page 6 of 7
Department of Administration - Local Government Services Bureau
Roster of Independent Auditors Authorized to Conduct Audits of
Montana Local Governments for State Fiscal Year of 2013
As of January 25, 2013
Wayne E. Hintz, CPA, PSC Phone: (406) 443-6220
1215 Eleventh Avenue Fax: (406) 442-5659
Helena MT, 59601-3917 Email: whintz@burghervision.com
Roster Number: 76 Roster Year 2013
Wipfli LLP Phone: (509) 489-4524
12 East Rowan, Suite 2 Fax: (509) 489-4524
Spokane WA, 99207 Email: ESchultz@wipfli.com
Roster Number: 776 Roster Year 2013
Report Count 56
Page 7 of 7