Okaloosa County BOCC — August 19, 2014 — Warren Averett - Terms of Engagement July 1 2014 — reading text

W Warren Averett CPAs AND ADVISORS July 1, 2014 To the Honorable Chairman and Members of the Board of County Commissioners, Clerk of Circuit Court, Sheriff, Tax Collector, Property Appraiser, and Supervisor of Elections Okaloosa County, Florida Dear Honorable Chairman and Members of the Board of County Commissioners, Clerk of Circuit Court, Sheriff, Tax Collector, Property Appraiser, and Supervisor of Elections: | want to thank you and Okaloosa County, Florida for your continued relationship with Warren Averett, LLC (the Firm). | appreciate this opportunity to further work with you and look forward to serving you in this capacity. In an ongoing effort to provide exceptional service to our clients, we focus on preventing any misunderstandings regarding professional services and client expectations. Enclosed is our Terms of Engagement which outlines the services you have engaged our Firm to provide. This standard Firm document must be signed by all clients prior to the initiation of work to help both the Firm and the client have a clear understanding of the services to be provided and the terms and objectives of the engagement. The document provides for proper client communication and complies with the American Institute of Certified Public Accountants Ethics Interpretations addressing documentation of accountants’ engagements to perform services. Although the Terms of Engagement may appear formal, it is intended to support the professional and personal relationship we have with your organization. You can be assured that the Firm and | will continue to keep your best interests in mind. If you have concerns or questions regarding this document you would like to discuss, please contact me in our office at (850) 244-5121. Otherwise, please sign and return the original to me and retain a copy for your files. | sincerely appreciate the opportunity to progress our professional relationship and look forward to many years of serving Okaloosa County, Florida. Best regards, Eng te. >. Bbalbnt— Angela D. Balent, CPA angela.balent@warrenavereit.com Direct (850) 275-1224 WwW Warren Averett CPAs AND ADVISORS TERMS OF ENGAGEMENT JULY 4, 2014) H. ENGAGEMENT: Warren Averett, LLC is pleased to confirm our understanding of the services we are to provide for Okaloosa County, Florida (the “Client”) and any of its affiliated entities. This agreement confirms our understanding of the terms and objectives of our engagement and the nature and limitations of the services we will provide. 2. SERVICES PROVIDED: We will audit the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information, including the related notes to the financial statements, which collectively comprise the basic financial statements of the Client as of and for the year ended September 30, 2014. Accounting standards generally accepted in the United States provide for certain required supplementary information (RSI), such as management's discussion and analysis (MD&A), to supplement the Client's basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. As part of our engagement, we will apply certain limited procedures to the Client’s RSI in accordance with auditing standards generally accepted in the United States of America. These limited procedures will consist of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We will not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. The following RSI is required by generally accepted accounting principles and will be subjected to certain limited procedures, but will not be audited: 1. Management's Discussion and Analysis. 2. Schedule of Funding Progress — Post Employment Benefits Plan Supplementary information other than RSI also accompanies the Client’s financial statements. We will subject the following supplementary information to the auditing procedures applied in our audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America and will provide an opinion on it in relation to the financial statements as a whole: 1. Schedule of Expenditures of Federal and/ or State Awards (as applicable) 2. Schedule of Expenditures of Passenger Facility Charges 3. Combining and Individual Fund Statement of Schedules The following other information accompanying the financial statements will not be subjected to the auditing procedures applied in our audit of the financial statements, and for which our auditors’ report will not provide an opinion or any assurance. 1. Statistical Schedules 3. AUDIT OBJECTIVES: The objective of our audit is the expression of opinions as to whether your basic financial statements are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles and to report on the fairness of the supplementary information referred to in the second paragraph when considered in relation to the financial statements as a whole. The objective also includes reporting on— Okaloosa County, Florida GOVT Engagement -133 July 1, 2014 Page 2 of 7 | 2 Internal control related to the financial statements and compliance with laws, regulations, and the provisions of contracts or grant agreements, noncompliance with which could have a material effect on the financial statements in accordance with Government Auditing Standards. « Internal control related to major programs and an opinion (or disclaimer of opinion) on compliance with laws, regulations, and the provision of contracts or grant agreements that could have a direct and material effect on each major program in accordance with the Single Audit Act Amendments of 1996 and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, Chapter 10.550, Rules of the Auditor General (as applicable) and compliance with requirements applicable to the passenger facility charge program. The reports on internal control and compliance will each include a paragraph that states that the purpose of the report is solely to describe (1) the scope of testing of internal control over financial reporting and compliance and the result of that testing and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance, (2) the scope of testing internal control over compliance for major programs and major program compliance and the result of that testing and to provide an opinion on compliance but not to provide an opinion on the effectiveness of internal control over compliance, and (3) that the report is an integral part of an audit performed in accordance with Government Auditing Standards in considering internal control over financial reporting and compliance and OMB Circular A-133 and Chapter 10.550 (as applicable) in considering internal control over compliance and major program compliance. The paragraph will also state that the report is not suitable for any other purpose. Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America; the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the Single Audit Act Amendments of 1996; the provisions of OMB Circular A-133; and Chapter 10.550 (as applicable), and will include tests of accounting records, a determination of major program(s) in accordance with OMB Circular A-133 and Chapter 10.550 (as applicable), and other procedures we consider necessary to enable us to express such opinions and to render the required reports. We cannot provide assurance that unmodified opinions will be expressed. Circumstances may arise in which it is necessary for us to modify our opinions or add emphasis-of-matter or other-matter paragraphs. If our opinions on the financial statements or the Single Audit compliance opinions are other than unmodified, we will discuss the reasons with the Client in advance. If, for any reason, we are unable to complete the audit or are unable to form or have not formed opinions, we may decline to express opinions or to issue a report as a result of this engagement. 4, MANAGEMENT RESPONSIBILITIES: Management is responsible for the basic financial statemenis, schedule of expenditures of federal and/or state awards (as applicable), schedule of expenditures of passenger facility charges and all accompanying information as well as all representations contained therein. Management is also responsible for identifying government award programs and understanding and complying with the compliance requirements, and for preparation of the schedule of expenditures of federal and/or state awards (as applicable) in accordance with the requirements of OMB Circular A-133 and Chapter 10.550 (as applicable). Management is responsible for establishing and maintaining effective internal controls, including internal controls over compliance, and for evaluating and monitoring ongoing activities to help ensure that appropriate goals and objectives are met and that there is reasonable assurance that government programs are administered in compliance with compliance requirements, The Client is also responsible for the selection and application of accounting principles; for the preparation and fair presentation in the financial statements in conformity with U.S. generally accepted accounting principles; and for compliance with applicable laws and regulations and the provisions of contracts and grant agreements. Management is also responsible for making all financial records and related information available to us and for ensuring that management is reliable and financial information is reliable and properly recorded. The Client is also responsible for providing us with (1) access to all information of which the Client is aware that is relevant to the preparation and fair presentation of the financial statements, (2) additional information that we may request for the purpose of the audit, and (3) unrestricted access to persons within the government from which we determine it necessary to obtain audit evidence. The Client’s responsibilities also include identifying significant vendor relationships in which the vendor has responsibility for program compliance and for the accuracy and completeness of that information. The Client's responsibilities include adjusting the financial statements to correct material Terms of Engagement is a standard firm document signed by the firm and all clients of the firm that ensures both the firm and the client have a clear understanding of the services to be provided and the terms and objectives of the engagement. 1 [Okaloosa County, Florida GOVT Engagement -133 July 1, 2014 Page 3 of 7 | misstatements and confirming to us in the written representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the