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Res 14-23 Approving the Auditing Firm Weaver LLP-------- WHEREAS, Section 103.001 of the Local Government Code requires that a municipality shall have its records and accounts audited annually and shall have an annual financial statement prepared based on the audit; and WHEREAS, Section 103.002 of the Local Government Code requires that a municipality shall employ at its own expense a certified public accountant who is licensed in this state or a public accountant who holds a permit to practice from the Texas State Board of Public Accountancy to conduct the audit and to prepare the annual financial statements, and WHEREAS, the Town Council is committed to the financial stability of the Town of Westlake and feel it is in the best interest of the citizens to obtain the services of this firm to perform the Town's audits as set forth above; and WHEREAS, the funds to facilitate the audit will be included in the proposed FY 2014/2015. NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF !; ! SECTION 1: That the recitals set forth above in this Resolution are true and correct and are hereby adopted as findings of the Town Council and are incorporated into the body of this Resolution as if fully set forth herein. SECTION 2: The Town Council of the Town of Westlake, Texas, does hereby approve the firm of Weaver, L.L.P. to perform the Town's audit for a 3 -year period attached, as Exhibit "A ", with the option of 2 additional years and authorizes the Finance Director to execute the FY 2013-2014 and subsequent engagement letters on behalf of the Town of Westlake, Texas. SECTION 3: If any portion of this Resolution shall, for any reason, be declared invalid by any court of competent jurisdiction, such invalidity shall not affect the remaining provisions hereof and the Council hereby determines that it would have adopted this Resolution without the invalid provision. Resolution 14-23 Page 1 of 2 SECTION 4: This Resolution shall become effective upon the date of its passage. 0-81=5 Kelly tdward0ecretary Laura Wheat, Mayor Tom E��r,/Twn Manager Resolution 14-23 Page 2 of 2 weaver Assurance • Tax • Advisory Proposal for Independent Auditing Services July 16, 2014 1 Presented to: Town of Westlake Entities Presented by: Jerry Gaither, CPA, CGFM Partner, Assurance Services 972.448.6918 1 jerry.gaither@weaver.com Weaver 12221 Merit Drive, Suite 1400 Dallas, Texas 75251 www.weaver.com Resolution 14-23 weave Assurance . Tax . Advisory July 16, 2014 Ms. Debbie Piper, CPA Finance Director Town of Westlake 3 Village Circle, Suite 202 Westlake, Texas 76262 RE: Request for Proposals for Independent Audit Services With this proposal, Weaver and Tidwell, L.L.P., (Weaver) commits to providing financial auditing services for the Town of Westlake and your associated entities. These audits will meet the requirements of your request for proposals, including government auditing standards, the U.S. Single Audit Act and Office of Management and Budget (OMB) Circular A-133, if required. We commit to offer you attentive personal service from a locally based audit team, to furnish results and reports conforming to relevant standards and your expectations, to work accurately and efficiently, and to meet your deadlines. Why will the Town of Westlake get the best results from Weaver? We offer: • A Texas-based firm. With offices in nearby Dallas and Fort Worth, as well as five other Texas locations, Weaver has served Texas clients for almost 65 years. We have a deep understanding of both economic and regulatory environments here. • Experience in municipal environments. Weaver currently serves as auditor for more than 100 public - sector clients, including 27 cities and towns. Through this work, we have grown familiar with the complexities of governmental accounting and financial reporting. • Commitment to ongoing communication. Frequent, effective and honest communication is critical to a successful audit. Our partners and engagement team leadership remain accessible to you not just throughout the engagement, but throughout the year. • High-quality work and on-time delivery. Weaver's reputation has been built on the quality of our work and our ability to stay on schedule and on budget. We are dedicated to meeting the timelines and other commitments set forth in our proposal. Our goal is to provide you with more than just a financial and compliance audit. We want to offer the support and guidance you need to maintain world-class financial operations — efficient, accurate and secure, as required by a town like Westlake. As Weaver's partner on the engagement, I am authorized to contractually bind the firm; upon award, we will furnish the certificates of insurance as requested in the RFP. This proposal is an irrevocable offer for a period of 90 days from the RFP closing date. If you have any questions regarding this proposal or any other matter, please do not hesitate to contact me directly at 972.448.6918 or via email at jerry.gaither@weaver.com. Sincerely, Jerry L. Gaither Engagement Partner WEAVER AND TIDWELL L.L.P. 12221 MERIT DRIVE, SUITE 1400, DALLAS, TX 75251 CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS P: (972) 4901970 F: (972) 702 8321 weaver Assurance • Tax . Advisory As a vibrant, growing Town that offers exceptional services, Westlake needs an auditor who understands your financial challenges. You need a firm who understands component units, charter schools, nonprofit reporting and the Government Finance Officers Association (GFOA) award requirements — and one who can provide the information you need to make good decisions. You need a responsive local auditor who can support and guide you through changing standards, rapidly evolving technology, and economic cycles. You need Weaver. Weaver proposes to audit financial statements of the following entities: K Named to Inside Public Accounting's "BEST of the BEST Firms" list (2012) Largest independent accounting firm in the Southwest Ranked #6 on the 2013 Largest North Texas Accounting Firms in the Dallas Business Journal Named an All-Star Firm and a Fastest Growing Firm by INSIDE Public Accounting (2013) Independent membership in Baker Tilly International, the world's 8th largest accounting firm network • Town of Westlake for the fiscal years ending September 30, 2014 through 2016 • Westlake Academy (blended component unit) for the fiscal years ending August 31, 2014 through 2016 • Westlake Academy Foundation (component unit of the Academy) for the fiscal years ending August 31, 2014 through 2016 • Texas Student Housing Authority and each of the four Texas Student Housing projects (discretely presented component units of the Town) for the fiscal years ending August 31, 2014 through 2016 The Town will have the option of extending the contract for the two subsequent years, through fiscal year 2018. The audits will be performed in accordance with Generally Accepted Auditing Standards (GAAS) as set forth by the American Institute of Certified Public Accountants (AICPA); standards for financial audits set forth in the U.S. General Accounting Office's Government Auditing Standards (2011); and provisions of the Single Audit Act of 1996 and U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations, if required. Based on the results of the audit, we will express opinions on the fair presentation of each entity's basic financial statements and the accompanying supplementary information. We will perform specified procedures on the required supplementary information each year. In addition, we will report on the Town's and Academy's internal control over financial reporting and on its compliance with requirements described in generally accepted government auditing standards (GAGAS). Weaver will report on the Weaver and Tidwell, L.L.P Page i Proposal for Independent Auditing Services Town of Westlake, Texas we ave r Assurance . Tax • Advisory Town's and Academy's compliance with requirements applicable to each major program and internal control over compliance in accordance with the Single Audit Act and OMB Circular A-133, if required. In addition, Weaver will assist the Town in preparing a comprehensive annual financial report (CAFR) that meets the requirements of the Government Finance Officers Association (GFOA) Certificate of Achievement for Excellence in Financial Reporting. Our engagement team is very experienced with GFOA requirements; in fact, every city John DeBurro, senior manager, has ever assisted in preparing its CAFR has been awarded that Certificate of Achievement. Why Weaver? Experience With a dedicated public sector practice composed of more than 120 professionals — the largest industry practice within our firm — Weaver understands the nuances and intricacies of governmental operational structures, financials and reporting requirements. Weaver provides audit services for more than 100 public sector clients across Texas, including 40 entities that receive the GFOA award and more than 75 entities that receive federal funding sufficient for a single audit. • Auditor of 5 of the 25 largest cities in the state • Auditor of 10 of the 50 largest cities in the state • Auditor of 16 of the 100 largest cities in the state • Auditor of more top -100 Texas cities than any other firm The level of specialized knowledge we have developed over the past six decades is second to none, and we will bring that full knowledge to bear in service of the Town's goals. Leveraging best practices and lessons learned from a wide variety of industries and organizations, we work to help you manage your financial reporting requirements efficiently, so you can focus on continuing to provide services to the businesses and citizens of Westlake. Collaboration At Weaver, success isn't built on engagements, it's built on relationships. We work to understand your unique needs. With a strong focus on continuity and communication, we work to cultivate a lasting, collaborative relationship with you. Our goal is not only to help the Town achieve your immediate audit objectives, but also to lay the foundation for achieving your long term strategic goals. To that end, our engagement partners provide much more than oversight and accountability during the audit — they remain available to you throughout the year. We also provide timely technical updates and consultation to ensure that you have the guidance and services necessary to help meet your changing needs over time. This collaborative spirit truly sets Weaver apart from other firms. Quality We are proud of our high standards and quality work product. Our auditors are recognized for their insight and ability to conduct both complex and relatively straightforward audits. Weaver professionals regularly author and present papers at various industry conferences. No firm in Texas can match Weaver's experience and capabilities in providing audit services to Texas municipal entities. Weaver is a member of the AICPA Governmental Audit Quality Center. We've also been a member of the AICPA Center for Audit Quality since the inception of the program, and undergo an independent peer review every three years to ensure we're maintaining the highest standards possible. Weaver has received the highest possible rating on every peer review completed to date. Value Weaver understands the importance of cost-effectiveness, especially for governmental entities. We also know you don't want to sacrifice quality in favor of controlling costs. That's why we focus on providing true value — ensuring that you get the highest degree of client service and quality with affordable fees. Our depth of experience and ability to leverage resources from across the firm enables us to take a function - specific approach: staffing the right resources at the right time, based on the tasks at hand. As a result, you are assured cost-efficient services without sacrificing the quality that has become our hallmark. Weaver and Tidwell, LLP Page ii Proposal for Independent Auditing Services Town of Westlake, Texas weaver - � ' . License to Practice in Texas Firm Qualifications and Experience Partner and Staff Qualifications and Experience Continuing Professional Education Similar Engagements with Other Government Entities Specific Audit Approach Scope Town of Westlake Audit at a Glance The Transition to Weaver: Making it Easy CAFR Preparation Implementation of Auditing Standards Communication, Technical Assistance and Staff Support Phase -by -Phase Audit Approach Potential Audit Problems Technical Assistance and Education Offered Our Clients Tax Approach Proposed Schedule Concluding Remarks Cost of Services Schedule Appendix A: Engagement Team Resumes 1 2 6 9 10 12 12 13 14 14 15 15 15 23 23 24 25 27 29 31 we ave r , Weaver is licensed to practice accountancy in Texas. All key staff assigned to the Town's audit are properly licensed to practice in Texas. We are a registrant with the Texas State Board of Public Accountancy under Section 14 of the Public Accountancy Act of 1979, Texas Revised Civil Statutes, Article 41 a-1. A copy of our license is provided at right. Each client -serving partner of the firm holds a certificate as a Certified Public Accountant pursuant to that act, as does each assigned key team member for your audit. Information about each team member's licenses and certificates is provided within the resumes in Appendix A. Tex" wtzte Sparc Of Pi3b*: A'ic:wri:anr.} hM¢ v^'71."e 16l3DAlBU �blp'90.i£ V,� ..W W"WR AND TIOWM1, AA.P. OFFICE 28-,1, VV "Do FQRT1JU.RTHU 7690.7 Film License IOr P043U inti °Sn1JO10it Office License ID: V01783 i dr r� No' I iO3$at)8 Weaver and Tidwell, L.L.P Proposal for Independent Auditing Services Page 1 Town of Westlake, Texas w.e. ave r>0- Firm Qualifications •' • Experience Size of the Firm Weaver is a nationally recognized, Texas-based firm with approximately 500 professionals and offices in seven major Texas cities: Dallas, Fort Worth, Houston, Austin, San Antonio, Odessa and Midland. We will manage and staff this audit from our Dallas office, which has significant experience auditing towns like Westlake. In addition, because of our closely integrated offices and use of advanced technology, you will have access to the resources of the entire firm. Governmental Audit Staff Weaver has a dedicated practice focused on public sector entities across the state of Texas. It is one of the largest industry practices in the firm, with more than 120 professionals serving more than 100 public sector clients. In fact, public sector clients account for nearly 40 percent of the firm's audit revenue. Specific Government and Charter School Auditing Experience Weaver serves as financial auditor for approximately 25 cities. Of the largest 100 cities in Texas (by population), we audit 16, more than any other firm. (Data based on published 2013 audited statements.) In addition, we audit approximately 20 public school districts, four charter schools, and numerous counties, councils of governments, and various other local governments. Our governmental practice is one of the largest and most respected in Texas. Other Services In addition to audit services, we also provide public sector clients with internal audits (both outsourced and co - sourced), risk assessments, enterprise risk management consulting, business process improvement, IT audits, data analytics and forensic accounting. The benefits of this diverse experience are clear: Weaver professionals are well informed about the wide array of issues our public sector clients face. Our broad and sustained experience enables us to take a particularly thoughtful approach, balancing your short-term reporting needs with your long-term objectives. Weaver and Tidwell, LLP Page 2 Proposal for Independent Auditing Services Town of Westlake, Texas ire ave r Assurance - Tax. Advi;ary >' GFOA and CAFR Experience The firm is the auditor of more than 40 entities who have received the GFOA certificate of achievement in each of the past two years. We are experienced with the reporting requirements of the GFOA and have the knowledge and experience to assist with reporting under these requirements. The firm has nine members of its staff who are currently members of the Special Review Committee of the GFOA that evaluate CAFRs for eligibility with Certificate of Achievement Program requirements. Two of your audit team members—Jerry Gaither and John DeBurro—are members of this Special Review Committee. One of these engagement team members who is also on the Special Review Committee will review prior -year GFOA comments and the Town's CAFR for compliance with GFOA requirements and standards. Number and Nature of Staff Assigned to Westlake GD C;�rxtjr«r!€ • 40 clients currently receiving the GFOA Certificate of Achievement • Nine members on the GFOA special review committee Two members of the SRC on the engagement team Weaver takes a function -specific approach to engagement staffing: we focus on leveraging the right resources at the right times, ensuring that teams are assigned based on the specific tasks required during each of the audit phases, as well as the timing of those tasks. The resources for your engagement have been chosen specifically for their broad understanding of public sector, utility and single audits, as well as their technical ability, experience and management skills. Partner Jerry Gaither, who has decades of experience leading government auditing engagements, will serve as the engagement partner. In this role, he will be responsible for the overall management of the engagement. Additional team members will include: • Senior Manager John DeBurro (full-time) • Senior Associate Meredith Churchill (full-time during field work) • IT Advisory team members to assist in evaluating IT controls and security (part-time) • Two audit associates (full-time during field work) The senior manager and senior associate will oversee the work of the audit associates during interim and final fieldwork. We may also draw upon additional resources and key subject matter advisors at various stages of the engagement. Our professionals have a broad range of public sector experience, knowledge and skills. With this leveraged model, Weaver is able to offer the Town a fully customized team that can adjust dynamically and quickly to meet your needs throughout all stages of the audit. It also enables us to provide a holistic, multidisciplinary audit with added innovation, thought leadership and insight. Weaver and Tidwell, LLP Page 3 Proposal for Independent Auditing Services Town of Westlake, Texas weaver>o_ Our Involvement in Professional Organizations All of our technical staff are members of the AICPA, the Texas Society of CPAs (TSCPA), the Internal Auditing Association (IIA), or other organizations appropriate to their professional focus. Many of them are officers or committee chairs; some are frequently asked to make presentations at industry conferences or other professional development opportunities. These Texas $QEiety of memberships and presentations are noted on individual staff members' resumes. At certified Nwk, AoQQuntants Weaver professionals have served in notable state-wide or even national leadership Uk positions in our profession. Tommy Lawler, managing partner, is a former member of the AICPA Technical Issues Committee, and in that position, he dealt with all FASB The knUtuteof pronouncements at the exposure draft stage. Intenmi Audttws Terry Ford, audit partner, is a member of the AICPA National Peer Review Committee, where he evaluates member firms across the nation. Additionally, Greg Bailes, audit partner, is a past chair of the Texas State Board of Public Accountancy (TSBPA) and currently serves on a committee of the National Association of State Boards of Accountancy. David Duree, audit partner, is a former regional director of the National Association of State Boards of Accountancy, a current member of the AICPA Auditing Standards Board audit issues task force, and a past chair of the TSBPA. i Jerry Gaither is also a Certified Government Financial Manager and a former l� 'r' member of the Technical Issues Committee of the AICPA as liaison to the Gcavr�ntetrnt 1 ��„7rrcat Governmental Accounting Standards Board. This not only provides him with 1� M.".49r1 knowledge of new governmental standards before enactment, but also a role in helping shape those standards. Single Audit Experience Due to the nature and size of our public -sector practice, we audit numerous entities that receive Federal financial assistance. We audit more than 75 government and nonprofit organizations that require a single audit under OMB Circular A-133.Of those, seven are multi -faceted entities that receive in excess of $50 million in federal financial assistance, with two in excess of $100 million. Weaver and Tidwell, L.L.P Page 4 Proposal for Independent Auditing Services Town of Westlake, Texas weaverpr- o - C PK� Govemme tAt Audit Quality QmW The AICPA's Government Audit Quality Control Center (GAQC) is a voluntary membership center for CPA firms and state audit organizations that perform governmental audits. Weaver has been a member since its inception. Every three years, the firm engages an independent accounting firm to determine if our quality control policies and procedures are suitably designed, and if our techniques for implementing these policies and procedures comply with professional standards. Each peer review has included a review of governmental audit engagements, as mandated by AICPA standards and GAQC requirements. Weaver has successfully completed all peer reviews to date. Our latest peer review was performed in EideBailly September of 2013. Firms can - receive a rating of pass, pass with deficiencies or fail. We are pleased to report that Weaver received the pass „I1•,II 11e,IC1, Rcpint rating. The latest report is shown here. (Motw4, ZOO Field and Desk Reviews T.,thrVart,el and ille "Awilal 11M Revio% C',N,lmitlev Three field reviews by the Department of Health and heel„\,,,,,;\,1•alhes�salnergnalitl'tNNn,IlirQlCal'e1N111111r1:1111A11a1t111�+Vgillp l+hl�''daya:UN111dnen, Human Services and the 1..1 ..V (live Finn?npldieal,k tie h1iNP\li(f Natters 61 elfeel 1m tile v—,tr eaded NIS% 31. 21113. kAir !leer riniem RAl c,ndlkted tin tisoniallce with tle SEA'dad, 11wPeffivining and Repwtipg on 1'ur Rorie,ls esmbltahad by the Texas Education Agency peer R, w,%Hoenioffhe t,nerictinllalinne,fCenilietillhlhlic \ceouinauls. \sapart oiotap rreyia have been completed in the y„nsiknatoknsbyre,•u4ttonetditio.irnpplicahk•. ill dztclnlitiiltgt,cnAtircmid ,ManofoarpmWaro. 'Ill, f inn it rev"Il ihk fir deawpinn ll systam n1'qualill. Conti,] and o4tiplYing, with It w provide ilk firm uilh last three years. There were-ltanle ee6 umlc:V111 Y1imlt1ll ala up'nin$ ill C,NhhNltiin \lithgjgih tlhk+v„f.?Ule,al 1Ian16N,i, in till no findings. We have been nlatcrial Arps fc Ourn:pdmsihilil% it Inexprc.+; till 1pinilNr1a1 to doi pl of tile„ t.mofti"HI, a,mral mid t,e firm's aNnpfiauec Ihcn•1\1ih basad 1N, our roioe 'lllc nature. ulti Lives. scolk, lindknio l of. al,d ills pmoccdlNrs notified by the Department perli,mwd in a Symms Revinv tire dawrilvd in dw 1mndArd. At %wwaicm.org fmutlumm. of Health and Human as ndpured by the mmid k el pgcnwmin *ekc� -d Cot rvvi %v inc4n4k(I algng;menl< I,cht.mI d niwkr Services that our audit of (kwa clsn:iv:;:rr;a t'rwuhtivh,:Auditsorelupkye. W[W1ilplain.audit, lxdGnmdiial:,VDIC'IA.mid financial statements met csalninatiansofsenizluganiratian,{SenieeINganivationscoinu,l(SOC)Iand75ma_;ztwtit . federal audit requirements In miropiniomthesvnanol'quulinumtml[ rtileaccottiuhigmid midifing,pra ti,carWemermillTidnell. with no findings. We are not 1.1.11. a ppli,nhle it, not -SEC isslren in elfin till- the }ear culka Mao 31. 2013, lru boon suitably desig1wd atld complied %% ith to linwide xW firin milli reasonable andreponing ill onH,muit\tvith aware of the number of allpheahk l,rofe;;ional sh ltilmde in all nitnerial resl,eets- Finns can rx:i,•a a rating air .+,.;z+„ Nvtfr +;tiiciene}•(ra,r „r,li+i7. R'eayer and'rid,yell. L.I.. P. hAs relxiyell a I1e.Y rcyien- rating of ;its,. federal or state desk reviews that have been performed 1 on our audits in the last three years; however, no findings ride nail!\ 1.I.p have been communicated to us. Disciplinary Action No disciplinary action has ever been alleged and no ac�raewa +.tan. U. 1: !Annaca. M5W.%U13 x612 M,SKO 1-6121916_]0 CUE action is pending or has ever been undertaken against the firm by the SEC, AICPA, state regulatory bodies or other professional organizations. Weaver and Tidwell, LLP Page 5 Proposal for Independent Auditing Services Town of Westlake, Texas we aver Partner and Staff• - p`I I At Weaver, we continually strive to bring you our best and brightest. Weaver engagement teams are marked by continuity, cross -functional communication, leadership and stability—all important factors for any engagement team to be effective. As mentioned previously, your engagement partner and managers remain accessible to you not just during the engagement, but throughout the year. This chart illustrates the team that will serve you: Continuing Education Program Policy Weaver's continuing professional education policy requires that all staff comply with the continuing professional education requirements of the PCAOB, AICPA, Texas State Board of Public Accountancy, and other regulatory agencies. All professional staff receive at least 120 hours of continuing professional education every three years, with a majority of this training in their industries of concentration. The governmental audit staff is required by GAGAS to obtain 80 hours, with at least 24 hours relating to the governmental audit environment, every two years. Each member of the engagement team has met the GAGAS requirement. Weaver and Tidwell, LLP Page 6 Proposal for Independent Auditing Services Town of Westlake, Texas weaver� Policy Regarding Staff Rotation We have a governmental engagement and practice planning process stressing experience and continuity in the engagement team from year to year. Weaver is committed to providing continuity and will not rotate partners or managers unless requested by the Town or required through advancement or promotion of personnel. The depth of our governmental practice ensures the Town will have experienced professionals from year to year. Assignment of Auditing Staff and Changes in Auditing Staff The individuals described in this proposal are the people who will actually do the work associated with the Town's audit. Weaver understands the Town reserves the right to approve any change to the assigned staff, both before and during the engagement. Before implementing any personnel change, Weaver will provide the resume of the proposed substitute, offer the Town an opportunity to interview that person and allow the Town to approve or deny the change. Commitment to Equal Employment Opportunity Weaver is an equal -opportunity employer. In accordance with federal, state and local laws, we recruit, hire, promote and evaluate all personnel without regard to race, color, religion, sex, age, national origin, citizenship status, physical or mental disability, or past, present, or future status in the uniformed services of the United States. Job applicants and present employees are evaluated solely on ability, experience, and the requirements of the job. Each employee is responsible for helping Weaver maintain a climate that provides equal opportunity for all. The objective of Weaver is to recruit, hire, promote and retain individuals who are the best qualified for each specific position based solely on job-related criteria of education, training accomplished, experience and personal qualifications. Any individual within the firm who has responsibility or input to personnel decisions is responsible for compliance with this policy. Weaver and Tidwell, LLP Page 7 Proposal for Independent Auditing Services Town of Westlake, Texas weave1>00- - Team Leadership Jerry L. Gaither, CPA I Engagement Partner Jerry has more than 36 years of experience auditing government entities and is the partner -in -charge of Weaver's public sector practice. With extensive experience leading audit teams, Jerry brings specialized government industry knowledge to each of his clients. In addition, he is responsible for developing Weaver's audit methodologies for financial auditing of government entities including cities, regional governments and public school districts as well as single audits meeting the requirements of the U.S. Office of Management and Budget (OMB) A-133. Jerry is licensed to practice as a Certified Public Accountant in Texas He is an associate member of the Government Finance Officers Association and also serves on the Special Review Committee. Jerry is a Certified Government Finance Manager and a former member of the Technical Issues Committee of the American Institute of Certified Public Accountants as liaison to the Governmental Accounting Standards Board. With Jerry's years of experience serving government entities and involvement in standard setting bodies, Jerry's clients have access to important industry insights often before major changes happen. He graduated with a bachelor's of business administration degree in accounting from Texas Christian University. Shawn M. Parker, CPA I Quality Control Partner Shawn has more than 25 years of experience in public accounting, 16 of which have been with Weaver. As the partner -in -charge of assurance services for Weaver's Dallas location, he is responsible for overall growth and strategy for the local department. Shawn's practice emphasis is in auditing and accounting for government entities, employee benefit plans, closely held businesses, nonprofit organizations, municipalities and school districts. Serving on the Special Review f fCommittee for the Government Finance Officers Association, he brings specialized technical knowledge and experience to his government clients. Shawn is a member of the American Institute of Certified Public Accountants and the Texas Society of Certified Public Accountants. He is a frequent author of articles for professional and business publications, providing valuable industry insights. Shawn earned a bachelor's degree from the University of Nebraska at Kearney. John DeBurro, CPA I Audit Senior Manager John will serve as audit engagement manager for the Town, leading day-to-day work and overseeing audit staff. He will ensure regular communication with management on the status of the audit and will provide technical assistance relating to accounting issues. John has more than 17 years of experience in public accounting, with a focus on audits of municipalities and other government entities, including entities with government -wide net position of more than $200 million. He also has experience managing single audits that meet the requirements of the U.S. Office of Management and Budget (OMB) A-133. John is licensed to practice as a Certified Public Accountant in Texas. He is a regular speaker at industry events, and a member of the Government Finance Officers Association Special Review Committee. He graduated from New Hampshire College with a master of science degree, and has a bachelor's degree in business administration from the University of New Hampshire. His recent public sector audit experience includes the cities of Southlake, Wylie, Lewisville and Little Elm. Weaver and Tidwell, L.L.P Page 8 Proposal for Independent Auditing Services Town of Westlake, Texas weaver>0- I• Subject Matter Advisors 0?4 Marlon Williams, CPA, ACDA I Data Analytics SME Marlon Williams has audited Texas governmental entities from the firm's Dallas office for the past 16 years. Marlon has been involved in various data -mining projects. Marlon is licensed to practice as a Certified Public Accountant in Texas. He is also an ACL Certified Data Analyst, evidence of his skill and experience analyzing large volumes of computerized data. If needed, Marlon will apply these skills to mine and efficiently analyze any large volumes of data needing to be examined at the Town. Brittany Teare, CISA I IT SME Brittany Teare will serve as an IT consultant to the audit team to test security and ensure data integrity. Brittany is a manager in the firm's IT audit services department; she has almost a decade of experience providing IT audit and consulting services to public sector and related entities. Her professional IT experience includes controls testing performed in SAP, JD Edwards, Oracle Database, Microsoft Dynamics (Great Plains), UNIX / LINUX, and Microsoft (SQL Server, Windows Server and Active Directory) environments. 17940=01070=0 Weaver's continuing professional education policy complies with the revised government auditing standards requirement regarding formal education for professionals responsible for planning, conducting or reporting on government audit engagements. The governmental audit staff is required by GAGAS to obtain 80 hours of CPE every two years, with at least 24 hours relating to the governmental audit environment. Specific CPE credits for the past three years for the key members of the proposed audit team are summarized below: Jerry L. Gaither 87.0 123.5 Shawn Parker 51.5 128.0 John DeBurro 91.5 185.4 Meredith Churchill 35.5* 147.5 *From the past two years. Staff Continuity Weaver makes engagement team continuity a client service priority; we established a formal policy years ago that states that continuity in engagement leadership should be maintained throughout a client relationship unless client interests indicate otherwise. This has proven to be a true differentiator for Weaver. We are committed to providing continuity for the Town, and will not rotate partners, managers or other supervisory staff unless the Town requests a change, or a change becomes necessary as a result of staff being promoted, leaving the firm or being assigned to another office. In these cases, Weaver will obtain prior express written permission from the Town, and will provide the Town with a resume of the proposed replacement team member. Weaver and Tidwell, L.L.P Page 9 Proposal for Independent Auditing Services Town of Westlake, Texas weaver - Similar Engagements with Other Government Entities The table below provides details regarding five similar engagements completed within the past three years by Weaver's Dallas office. We currently audit several cities and towns similar to Westlake that have both blended and discretely presented component units as part of the reporting entity. Weaver also audits four charter schools: Dallas Can Academy, Midland Academy Charter School, Lena Pope -Chapel Hill Academy, and TLC Academy, with annual audits ranging from 200 to 500 hours. Weaver and Tidwell, LLP Page 10 Proposal for Independent Auditing Services Town of Westlake, Texas Audit Client Partner Contact Scope of Work Dates I Hours Annual financial and City of Southlake Jerry Ms. Sharon Jackson compliance audits, 1997- 600 Gaither Director of Finance including AUP for Southlake present hours/ 817.748.8042 Tennis Center and GFOA year submission Annual financial and Town of Litlle Elm Jerry Mr. Alan Dickerson compliance audits, 2012 - 450 Gaither Finance Director including single audit, block present hours/ 214.975.0415 grants and GFOA year submission Ms. Linda Bantz Annual financial and 500 City of Wylie Jerry Finance Director compliance audits, 2008- hours/ Gaither including single audit and present 972.516.6122 GFOA submission years Ms. Brenda Martin Annual financial and 600 City of Lewisville Jerry Finance Director compliance audits, 2013- hours/ Gaither including single audit and present 972.219.3775 GFOA submission year Annual financial and Mr. Richard Matkin compliance audits, 800 Plano ISD Jerry Assoc. Supt. for including single audit and 2007- hours/ Gaither Business Services GFOA submission; forensic present year 469.752.8122 investigations Weaver and Tidwell, LLP Page 10 Proposal for Independent Auditing Services Town of Westlake, Texas weaver In eaver. In addition to these references, below is a partial list of public sector clients for whom Weaver has provided audit services: Municipalities City of Allen, Texas*/+ City of Benbrook, Texas* City of Bryan, Texas*/+/# City of Cedar Hill*/+ City of Denton*/+/# City of Euless, Texas*/+ City of Friendswood*/+ City of Galveston*/+ City of Grand Prairie*/+ City of Houston# City of Killeen*/+ City of McKinney*/+/# City of Midlothian, Texas+ City of Rowlett+ City of Saginaw, Texas* City of Sanger, Texas City of Southlake, Texas*/#/+ City of Springtown, Texas* City of University Park*/+ City of Wylie*/+ Town of Addison, Texas*/#/+ Town of Little Elm*/+ Town of Highland Park, Texas*/+ Town of Trophy Club+ Local & County Entities Bethany Special Utility District Central Texas Council of Governments*/+ Dallas County# Denton County Transit Authority*/+ East Texas Council of Governments*/+ Edwards Aquifer Authority* Ellis County Rural Rail Transport Emergency Communication District of Ector Co. Fort Worth Transportation Authority* Houston Galveston Council of Governments# Lake Cities Municipal Utility Authority Lubbock Housing Authority* MHMR of Tarrant County* Monahans Housing Authority* North Central Texas Council of Governments*/#/+ North Texas Municipal Water District# Odessa Housing Authority* Odessa Development Corporation Pecos County TJPC Reeves County Commissary Funds Reeves County TJPC Region XI Education Service Center# Tarrant Appraisal District Tarrant County College* Tarrant County Emergency Services District No. 10 Tarrant County Tax Collectors Office# Tarrant Regional Water District# Texas Coalition for Affordable Power Texas Municipal Power Agency+ Trinity River Authority+ Williamson County */+ State Entities Employee Retirement System of Texas# Texas Adjutant General's Office Texas Department of Insurance# Texas Lottery Commission Texas Permanent School Fund Texas State Auditors Office Educational Entities Burleson ISD*/+ Cedar Hill ISD* Conroe ISD*/+ Dallas County Schools Fort Worth ISD*/+/# Frisco ISD#/*/+ Hurst -Euless -Bedford ISD*/+ Higher Education Servicing Corporation# Highland Park ISD*/+ Irving ISD*/+/# Keller ISD Education Foundation, Inc. Keller ISD*/+ La Porte ISD*/+ Laredo ISD */+ Mesquite ISD* Midland ISD* Montgomery ISD */+ North Texas Higher Education Authority Northside ISD*/+ Plano ISD*/+ Rockwall ISD* Tarrant County College District*/+/# Legend * A-133 Single Audits + Recipients of GFOA Award for Excellence in Financial Reporting # IntPmnl Control nndlnr IT Audit Fxnerience Weaver and Tidwell, L.L.P Page 11 Proposal for Independent Auditing Services Town of Westlake, Texas weaver-i Skc0Pe Weaver will conduct an annual financial audit of the Town's financial statements and a single audit of federal grants, if required, for the fiscal years ending September 30, 2014, through 2016. We will also conduct annual financial audits of the following entities for the fiscal years ending August 31, 2014, through 2016: • Westlake Academy • Westlake Academy Foundation • Texas Student Housing Authority (TSHA) • TSHA Ballpark Austin Project • TSHA Town Lake Austin Project • TSHA College Station Project • TSHA The Ridge at North Texas Project The audits will be performed in accordance with GAAS as set forth by the AICPA; U.S. General Accounting Office's Government Auditing Standards; and provisions of the Single Audit Act of 1996 and OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations, if required. Based on the results of the audit, Weaver will express opinions on the fair presentation of each of the Westlake Entities' basic financial statements and the accompanying supplementary information, in relation to the basic financial statements as a whole for conformity with generally accepted accounting principles. We will perform specified procedures on the required supplementary information each year. Weaver will also report on each entity's internal control over financial reporting and on its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters for the year being audited, in accordance with generally accepted government auditing standards (GAGAS). Finally, Weaver will report on each of the Westlake Entities' compliance with requirements applicable to each major program and internal control over compliance in accordance with the Single Audit Act and OMB Circular A-133, if required. Weaver will make immediate, written report to governance (audit committee chair, Town manager, finance director, or executive director) of any suspected irregularity or illegal act that we become aware of. We will communicate in a letter to management any significant deficiency, material weakness, or other control deficiency found during the audit. Additional details about the reports to be issued are provided in the section "Phase 5: Reporting." Weaver and Tidwell, L.L.P Page 12 Proposal for Independent Auditing Services Town of Westlake, Texas weaver>00_- Town of Westlake Audit at- a Glance Seta minus ,agreeable schedule • Review previous audit reports • Request schedules for preliminary fieldwork • Assess risks for significant audit areas • Assess and test internal controls • Refine audit plan • Perform procedures on preliminary audit schedules • Perfom) substantive testing and data analysis • Discuss questions or issues with management Perform final analytical reviews Reviewresults and conclusions Perform quality assurance review Discuss preliminary report and recommendations with management and audit committee • Issue final reports, management letter and presentation • Deliver final reports • Make presentations to City Council, if requested Purpose Timing • Establish anaudit structure that U Pon iWgageff ten' anocnfes both client and fimm efforts TSHA- late October- appropriately retailed ;plan and • Transition tion, previousauditor PBC list delivered by efficiently July 31 (Academy; • Provide sufficient lead time forclienf= Foundation, TSHA) or provided schedules August 31 (Town) • Confirm effectiveness of controls and Academy/Foundafion/TSHA make suggestions for improvement August • Identify risks based on internal control processes Town -October • Create a refined, tightly focused, detailed audit plan • Ensure financial statements are Academy/Foundation/ appropriately stated TSHA- late October- • Maintain frequent, open early November communication with management Town draft presented by first Town -- December • Establish confidence in the accuracy Academy/Foundation/ and thoroughness of the audit TSHA drafts presented by • Ensure that management has a clear last Monday of November understanding of any issues or recommendations for improvement Town draft presented by first Wednesday of January • Ensure that appropriate stakeholders have a clear understanding of the audit results and recommendations • Instill public confidence in the organization's financial practices and reports Academy/Foundation/TSHA reports presented at January meetings Town reports presented at FebruaryCouncii meeting Weaver and Tidwell, LLP Page 13 Proposal for Independent Auditing Services Town of Westlake, Texas ave A.ssurnnce - Tax - Advisory The Transition to Weaver. Making It Easy Our goal is to make the transition process seamless and efficient. Current auditing standards require us to get certain information from the previous auditor before accepting a new engagement. Once those inquiries are finished, we will coordinate the work paper review as quickly as possible and begin the planning stages of the Town's audit, with the goal of a timely understanding of your controls and processes, to tailor our request list and audit plan accordingly. Weaver can accept electronic data from virtually every accounting system on the market, which minimizes the time required by your personnel to send us necessary information. We attempt to minimize the audit's impact on your staff by using the information your management already prepares and uses regularly. Our objective is to allocate only those tasks to you that will result in the greatest cost -efficiency overall and only after we have completed our understanding of your controls and operations. This approach ensures that we are only requesting information that has a direct impact on your financial processes and makes our audits easier not only on you, but also on your third -party vendors and investment managers. FOUFAUM0044k4=0 Weaver has a well-established process that will allow us to assist the Town by preparing significant portions of the CAR without impairing our independence. We will furnish a document to guide a Town representative through a review of the financial statements, ensuring that the Town has maintained oversight and taken responsibility for the work. Both Jerry Gaither, engagement partner, and John DeBurro, senior manager, have extensive experience meeting GFOA requirements and serve on the GFOA Special Review Committee. John's clients who have routinely received the Certificate of Achievement include: • City of Southlake • City of Midlothian • Town of Little Elm • Town of Trophy Club • City of Greenville • City of Frisco • City of Lewisville • Plano ISD • Highland Park ISD • City of Wylie In fact, every governmental entity that John has assisted with its CAFR has been awarded GFOA recognition. Weaver and Tidwell, L.L.P Proposal for Independent Auditing Services Page 14 Town of Westlake, Texas we avfe riwy J r.-- Im lementation of Au ifin1g St undo. rs Each year, we will discuss with you the implementation of new standards from GASB, FASB or GAO (for 2014, GASB statements 66, 67 and 70) and how they will impact your accounting and financial reporting. We will help you develop a plan to implement these standards, or, if such plans are already in place, we will evaluate and make recommendations for improvements, if necessary. Throughout our term as auditors, we will discuss emerging accounting standards with you as they are issued, in order to help you develop plans for timely implementation. Communication, `technical Assistance and Staff Support Creating value in any engagement starts with open and regular communication — hands-on partner involvement by leaders who communicate on a regular basis. This serves as the ever -valuable foundation in every Weaver engagement. Throughout the audit — and throughout our entire relationship with you — Weaver will remain in close communication with your management team. Our philosophy is a "no - surprises" audit. Therefore, whenever there is a question or a potential issue, we will immediately bring it to your attention, seek your confirmation of the data, and ask about any relevant circumstances. Weaver will identify all schedules customarily prepared by cities in conjunction with the annual audit, and provide a detailed list early enough to allow your staff time to prepare these schedules. Our objective is to allocate to you only those tasks that will result in the greatest cost -efficiency overall. # •. O • o •: Weaver's audit methodology is designed to be collaborative, comprehensive and efficient, with guidance from the engagement partner throughout. We focus on identifying potential risks that could lead to material misstatement of the basic financial statements, and tailor our audit accordingly. When we evaluate risks, we focus not only on understanding your operations and accounting processes, but also on examining your internal control systems and the personnel's Continuous Communication capabilities. We also take time to properly identify major programs for single audit purposes, so that the audit meets requirements without wasting our time or your money. Work Segmentation An overview of the key segments of our methodology is provided on the following page (for hours, see page 22. The timing indicated is based on our current understanding of the Town's desired delivery of services. We will adjust the timing as necessary to accommodate your needs. Weaver is committed to meeting your timelines and engagement objectives; we take our commitment to you seriously and will work diligently with you to meet or exceed the scheduled deadlines. We will schedule our fieldwork to minimize disruption to the ongoing finance operations while adhering to your deadlines and participating in conferences as requested. The following timeline will be discussed with you, and can be modified to best meet your needs. Weaver and Tidwell, LLP Page 15 Proposal for Independent Auditing Services Town of Westlake, Texas weaver A.ssui nnce -Tax • Advisory Phase 1: Planning & Risk Assessment During the planning phase, we will meet with you to learn more about your operations and processes, find out your preferences, ask for the reports and data we will need, and set milestones and deadlines. We will also review prior -year work papers and financial statements, identify potential risks and calculate a preliminary estimate of materiality. In planning our detailed audit approach, we will ensure that audit tests are designed to be efficient, not repetitive. We will also modify the audit program as needed to reflect changes in conditions or audit standards, unexpected results from tests of operating effectiveness of internal accounting controls, new information or unanticipated activities. When learning about your operations, we will consider aspects that could affect our audit scope and approach, such as your organizational structure; governing laws and regulations; the annual budget, including sources of revenue; number of employees; and any significant events during the past year that might have affected your financial processes. During this phase, we will develop the following key parameters and plans for the audit, including: • Audit objectives • Staffing and responsibilities, including manager and partner supervision • Application of analytical procedures • Schedules and hour budgets by audit area • Materiality levels used for planning • A risk assessment of internal controls As an integral part of our audit planning, we complete questionnaires, narratives and walkthroughs relating to internal control, operations and accounting processes. An in-depth understanding of these areas helps us perform a more thorough, efficient and effective audit. The better we understand your organization, the more helpful our management comments and recommendations will be. An "internal control' is any process you institute to make your operations more effective, to comply with regulations, to improve the reliability of your financial reports, or to reduce the risk of fraud or other loss. In Phase 2, we will examine your internal controls to make sure they are properly designed and functioning as intended. This will be accomplished by: • Reviewing controls and determining whether they have been placed in operation • Assessing the materiality of the various account balances and transaction classes • Evaluating the risk factors that could affect the scope of testing Weaver and Tidwell, L.L.P Page 16 Proposal for Independent Auditing Services Town of Westlake, Texas weaver- Approach to Determining Laws and Regulations Subject to Testing In the course of planning the engagement, we will obtain an understanding of the effects of laws and regulations that have a direct and material effect on the determination of amounts in the financial statements. These steps will be taken to determine laws and regulations subject to audit tests: • Discuss applicable laws and regulations with Town representatives and legal counsel, if indicated • Utilize information from prior -year work papers • Review certain grants and contracts • Obtain written representations from management Assessment of IT System Controls Due to the anticipated size and scope of the Town's computerized EDP function, we will use Weaver's IT Advisory group to assist with the audit. This group will lead EDP testing. Weaver has significant experience providing auditing and advisory services related to other major financial and business systems. Our procedures for evaluating the security and integrity of EDP systems typically include procedures to validate system settings and user authorizations. A well -thought-out, scalable design of IT general and system controls at the process, transaction or application level is vital to an effective system of control. We will focus on business areas that are mission- critical—areas that may impact your ability to perform financial reporting or continue operations. While we utilize a variety of frameworks and standards in conducting specific IT application and security audits, Control Objectives for Information and Related Technology (COBIT) provides us with a comprehensive approach and methodology underlying all of our IT audit engagements and allows us to us focus on the specific requirements. We apply the COBIT framework in planning, executing and reporting the results of our IT related services. Audit Sampling The nature and size of the Town's operations will require us to design procedures to include sampling applications. All sampling will be performed in accordance with AU Section 530 and the AICPA audit guide, "Audit Sampling." Sampling applications will be used for these areas: • Tests of accounting controls • Tests of controls over compliance requirements of major federal programs • Tests of compliance with major federal program requirements • Substantive tests of account -balance details Depending on the strength of your internal control structure, we may be able to rely on those controls to reduce the amount of substantive testing. In that case, we must first design tests of those controls. Randomly selected transactions will be evaluated based on nonstatistical methods for attribute sampling. The tests of controls, if any, are to be performed during interim fieldwork. The need for tests of controls for transaction cycles will be determined by our evaluation of the design and effectiveness of your accounting controls. We expect to use nonstatistical and probability -based sampling. Sample sizes depend on the characteristics of your data and cannot be determined in advance. However, we expect to test controls over cash disbursements, purchasing bids, payroll, journal entries, utility billings (water and sewer) and similar areas. Weaver and Tidwell, LLP Page 17 Proposal for Independent Auditing Services Town of Westlake, Texas weaver Assurance • Tax • Aa'visory Phase 3; Final Fieldwork After you complete the year-end closing of accounts, our team will begin final fieldwork. This is the time when we perform most of the substantive tests on your data and prepare our audit work papers. During this time, the auditors will: • Perform audit tests and complete preparation of audit work papers • Complete audit programs, procedures and conclusions • Discuss audit findings and adjusting entries with management • Obtain your representations and attorney letters Throughout this phase—and throughout our entire relationship with you—Weaver will remain in close communication with your management. Our goal is a "no -surprises" audit. Therefore, whenever there is a question or a potential issue, we will immediately bring it to your attention, seek your confirmation of the data, and ask about any relevant circumstances. Substantive Procedures Weaver determines the audit approach and the specific procedures performed for various financial statement accounts and transactions (e.g., cash and investments, long-term debt, etc.) based on our experience with similar entities. We tailor these procedures to your specific accounting system and controls in order to perform the audit thoroughly and efficiently. The financial objectives of these procedures are to provide reasonable assurance that you will be able to accurately process, summarize and report financial data consistent with management's assertions. Those assertions cover classes of transactions, year-end account balances, and presentation and disclosure of financial data. Analytical Procedures During your audit, we examine more than pieces of data in isolation. We also analyze the interrelationships of financial and nonfinancial data. Our extensive use of analytical procedures offers a natural extension to the process of understanding Town operations. As we develop this understanding, we determine what ratios, relationships, and internal or external data management tools will be useful in identifying and monitoring risks. The exact analytical procedures performed for the Town will be determined during the planning process, after we have examined your accounting systems and operations. Common procedures include trend analysis, ratio analysis, and predictive or "reasonableness" tests. For example, depending on the specifics of your data and processes, we may: • Compare financial information with comparable prior periods, taking into account any known or expected changes. For example, we will compare revenues and expenditures with comparable previous periods and balances, looking for unexpected variations • Compare actual with anticipated results (for example, budget -versus -actual comparison of revenues and expenditures) • Evaluate relationships among different elements within the period, such as receivables in relation to billings, or revenues in relation to costs • Analyze financial information in light of relevant nonfinancial information (growth, political changes, new regulatory requirements, etc.) • Perform automated data analysis (data mining) using audit command language (ACL) and similar tools Weaver and Tidwell, LLP Page 18 Proposal for Independent Auditing Services Town of Westlake, Texas weaver Assurance - 1?rx • Advisory Jjopo- Use of Technology in the Audit Weaver uses cutting-edge electronic technology to improve our efficiency throughout the audit process. We were one of the first CPA firms to adopt the paperless environment. Now, over years of practice, we have organized our system to create the most efficient workflow. Our paperless audit file product, CCH engagement, is used to store, review and track all items related to the engagement. In addition, our staff is skilled at using common software programs such as Excel, Access, and Crystal Reports when those tools are called for. As our client, you will have access to a portal system to exchange files—no matter how large—in a secure environment. Our portal allows both teams to store files for instant, secure access, creating a virtual private network where the audit team can collaborate with you. We use data -mining software that can analyze any size and number of records. We are able to perform analytical reviews, review general ledger information, import trial balances, review check registers, and examine various other data obtained during the audit efficiently and effectively using ACL. Marlon Williams, who leads Weaver's work using technology in audits, is one of a very few ACL Certified Data Analysts (ACDAs) in the state of Texas. Finally, Weaver uses an instant messaging client that enables our engagement team members at different locations to discuss work papers with supervisory personnel to look at documents together or review findings no matter where they are physically. Data Extraction Software (Data Mining) Weaver uses ACL, a data extraction application used as an investigative audit tool, during our audit engagements. ACL enables us to identify transactions with a higher -than -normal risk for errors or irregularities. With this tool, we can analyze all transactions in a data file for particular attributes defined by the auditor, efficiently identifying transactions that warrant further review and testing. Typically, we use ACL to test attributes of payroll transactions, purchasing and bidding compliance, purchase cards, and compliance with finance policies as well as other specific transactions identified during the planning process. Marlon Williams, ACL Certified Data Analyst (ACDA) and the partner in charge of Weaver Analytics, will be part of the Town's engagement team to help plan and execute these advanced analytical procedures over your data. Phase 4: Financial Review and Quality Control Weaver has built multi -layered quality assurance processes into its audit methodology. These layers give us repeated opportunities to check each other's work; they also ensure that the engagement partner and technical review partner are closely involved with your audit. After fieldwork is complete, the engagement partner will review the entire engagement, with particular attention to significant audit areas. In addition, the draft report and work papers will be reviewed by the technical review partner, with the work papers available, to determine the completeness with which the engagement has been performed. The auditor's review will determine whether judgments made by others are reasonable in relation to the supporting data and to generally accepted accounting principles, auditing standards, government auditing standards and firm policy. We discuss and confirm our findings with appropriate Town staff whenever we discover an area of potential concern. In addition, we will review draft findings and recommendations with you throughout the engagement. At the reporting stage, there should be no surprises. Weaver and Tidwell, LLP Page 19 Proposal for Independent Auditing Services Town of Westlake, Texas weaver- Review and quality control tasks include: • Engagement partner review of all work papers to ensure compliance with technical standards • Technical review of all work papers • Performing any final analytical procedures • A client conference to review financial statements, the auditor's opinion and preliminary management letter comments • Obtaining written representations from management Throughout the audit, if we become aware of irregularities or illegal acts, we will make an immediate, written report of those acts to the Town Council and management. After our internal reviews have confirmed that the audit is accurate and complete, you have reviewed the draft reports, and we have incorporated your management responses and related information, Weaver will issue the final audit documents, in both hard copy and electronic form: • A report on the fair presentation of the Town's financial statements in conformity with U.S. generally accepted accounting principles (GAAP), including an opinion on the fair presentation of the supplementary schedule of expenditures of federal awards in relation to the audited financial statements (10 copies) • A report on the fair presentation of the Westlake Academy's financial statements in conformity with GAAP (10 copies) • A report on the fair presentation of the Westlake Academy Foundation's financial statements in conformity with GAAP (15 copies) • Separate reports on the fair presentation of the financial statements of the Texas Student Housing Authority (TSHA), TSHA Ball Park Austin Project, TSHA Town Lake Austin Project, TSHA College Station Project, and TSHA The Ridge at North Texas Project, in conformity with GAAP (10 copies each) • 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 for each entity (except the Westlake Academy Foundation) • A report on compliance with laws, regulations, and grant requirements and on internal control over compliance applicable to each major federal and state award program in accordance with the U.S. Office of Management and Budget Circular A-133, if required • Report to the Town Council and component unit governing boards and a management letter, if necessary Our final reports on compliance and internal controls will detail any "significant deficiencies" in internal control (as defined by GAGAS) found during the audit. Significant deficiencies that are also material weaknesses will be identified as such in the report. Lesser deficiencies will be reported in a separate letter to management. Weaver will present our findings to the parties designated by the Town. At that time, we will explain our findings, present practical recommendations for improvement (if needed), and answer your questions. After the end of the engagement, your engagement partner and manager will remain accessible to answer your questions and help you prepare for the next audit. The engagement partner and audit manager will also bring these reports to meetings as requested, including audit committees, governing boards, or managers and administrators. This provides your leaders with the opportunity to ask questions directly and enables us to explain our recommendations and any unusual findings. Weaver and Tidwell, L.L.P Page 20 Proposal for Independent Auditing Services Town of Westlake, Texas We will assure ourselves that the audit committees or governing boards are informed of the following information, as well as any other items required by audit standards: 1. The auditor's responsibility under generally accepted auditing standards and government auditing standards 2. Significant accounting policies 3. Management judgments and accounting estimates 4. Significant audit adjustments 5. Other information in documents containing audited financial statements b. Disagreements with management 7. Management consultation with other accountants 8. Major issues discussed with management prior to retention 9. Difficulties encountered in performing the audit 10. Auditor's judgments about accounting principles Weaver will address our findings to the Honorable Mayor and ` members of Town Council, the Audit Committee, the Town Manager and Finance Director. We will also address any findings related to the Academy and Foundation to the Academy board, and any findings related to the TSHA and/or individual projects to the TSHA Executive Director. At that time, we will explain our findings, present practical recommendations for improvement (if needed), and answer your questions. After the end of the engagement, your engagement and manager will remain accessible to ,.�►��►.� '� partner answer your questions and help you prepare for the next audit. 17� The engagement partner and audit manager will also bring these reports to meetings as requested, including audit committees, the governing boards, or managers and administrators. This provides your leaders with the opportunity to ask questions directly and enables us to explain our recommendations and any unusual findings. Record Retention Weaver will retain all working papers and reports, at our own expense, for at least five years from the report date. We will make these documents and working papers available, on request, to authorized parties or their designees, including successor auditors. Otherwise, we will protect them as confidential information. Weaver and Tidwell, LLP Page 21 Proposal for Independent Auditing Services Town of Westlake, Texas w�eaye r - Staff Segmentation The following table includes the hours necessary to complete audits for the Town, Academy, Foundation, and Texas Student Housing Authority entities. Partner(s) Senior Manager(s) Senior Associate(s) Associate (s) Total *Due to the interwoven nature of activities in Phases 4 and 5 of our audit methodology, these phases have been combined for the purposes of depicting hourly segmentation. Weaver and Tidwell, LLP Page 22 Proposal for Independent Auditing Services Town of Westlake, Texas Total Control Testing Financial Planning and and Single Final Field Review, Quality Risk Assessment Audit/ Work/ Assurance, Preliminary Field Financial Audit Reporting and Work Presentations 1 1 1 / 1 ,1 1 •! •1 1 .� *Due to the interwoven nature of activities in Phases 4 and 5 of our audit methodology, these phases have been combined for the purposes of depicting hourly segmentation. Weaver and Tidwell, LLP Page 22 Proposal for Independent Auditing Services Town of Westlake, Texas weaver. Potential Audit Problems Based on the information provided by the Town, we do not anticipate any audit problems. 'Technical Assistance and Education Of ei e d Our Clients Your engagement partner and management remain available to the Town throughout the year to answer questions. We also provide timely technical updates and consultation to ensure that you have the guidance and services necessary to help meet your changing needs over time. Weaver's most immediate and ongoing professional development and technical assistance offered to clients occurs in the course of our work with you, during the audit and throughout the year. Our partners and managers will inform you of pending regulations and requirements, evolving industry standards and new best practices as we become aware of them. Additionally, we are available for technical accounting questions as needed at any time. Weaver routinely offers half-day to full-day continuing professional education (CPE) classes to targeted sectors of our client base, including governmental entities. These classes are led by the dedicated, industry - specific, professionals within our firm. We offer them at no cost to you; these opportunities are part of our commitment to add value to the Town. Weaver is a registered provider of CPE to the Texas Society of CPAs and these classes count as CPE hours for Texas -licensed CPAs. Please plan now to attend Weaver's Free CPE Day, which is targeted specifically to the concerns of cities and other governmental entities. The North Texas session is planned for August 7, 2014, and we will send formal invitations in July. Aw "Senior manager John DeBurro has always made himself available to us, not just during the field work of our audit, but all year long. Sometimes he feels more like a mentor than an auditor!" - CFO, Weaver Municipal Audit Client Weaver and Tidwell, LLP Page 23 Proposal for Independent Auditing Services Town of Westlake, Texas weaver Assurance -Tax • Advisory Simply complying with all of the current tax laws is a challenge for many organizations, but it is only one step in our approach to providing tax services. We also work to identify emerging tax issues and represent you before the IRS as your organization needs our assistance. We accomplish this by: • Offering the highest quality of prompt, professional, and technically innovative advice • Building and maintaining close client relationships to ensure we consistently provide tax solutions that are of the greatest benefit to you We also understand the importance of communication, with you and the tax authorities, and integrate it throughout every step of the process. We believe consistent and structured communication throughout the year is the key to a smooth tax return process. Tax partner Ira Nevelow, who leads tax compliance and planning services for many local nonprofit organizations, will work with you to help ensure that all state and national requirements are met and the Academy Foundation is prepared for looming changes. Form 990 Tax exempt organizations are required to file IRS Form 990. While there is no tax liability to consider there are numerous responses that if not answered correctly can draw IRS scrutiny. In addition, Form 990 is a public record and is available for viewing by potential donors and other interested parties. Proper completion of the form can be an important tool to market the organization. Weaver provides tax planning, tax return preparation and IRS representation services for approximately 180 Form 990 filers and 75 private foundations. Weaver employs tax professionals who utilize their experience and judgment to prepare your Form 990 with both your donors and the IRS in mind. Our reputation is one of varied and in-depth experience, even during times of complicated tax reform. You can be confident that your best interests will be addressed faithfully and accurately. Weaver and Tidwell, L.L.P Page 24 Proposal for Independent Auditing Services Town of Westlake, Texas weaverApp- Assuiance ed Schedul A preliminary, high-level schedule is provided below, based on our understanding of your needs and the work plan described in this proposal. We are committed to meeting the timelines indicated in the RFP. During the initial planning stage, we will work with you to finalize detailed, mutually agreeable schedules and the timing for receipt of information being provided by the Town. Adjustments can be made at that time to accommodate your needs, preferences and staff availability. The schedule may also be affected by any findings made during initial fieldwork. Town of Westlake Planning & Risk Assessment (PBC list provided by $l3 1) Control Testing & Preliminary Fieldwork Final Fieldwork Financial Review & Quality Control (Draft delivered by first Wednesday in January) Reporting (Final reports delivered at February Council meeting) Sept Nov Jon 2014 2014 2015 Weaver and Tidwell, L.L.P Page 25 Proposal for Independent Auditing Services Town of Westlake, Texas weaver Assurance - Tax • Advisory Westlake Academy, and Foundation Aug 2014 Planning & Risk Assessment (i'3clist providedby 7/31) Control Testing & Preliminary Fieldwork Final Fieldwork Financial Review & Quality Control (Drafts delivered by last !Jlondayin November) Reporting (Final reports delivered at January board meetings) Oct Dec 2014 2015 Texas Student Housing Authority and TSHA Projects Aug Oct Dec 2014 2014 2015 ■ Planning & Risk Assessment (PBC list provided by 7/31) Control Testing & Preliminary Fieldwork Final Fieldwork Financial Review & ;r Quality Control (Drafts delivered by last = Niondayin November) Reporting (final reports delivered at January board meeting) Weaver and Tidwell, L.L.P Page 26 Proposal for Independent Auditing Services Town of Westlake, Texas weaver Assurance . Tax • Advisory Concluding Remarks Weaver offers deep qualifications in all the areas most important to the Town: • Recognized knowledge and experience in governmental auditing, both by the firm as a whole and by your specific audit team • Experience with component units, charter schools, and nonprofit tax reporting • Excellent track record of success helping clients receive the GFOA Certificate of Achievement for Excellence in Financial Reporting • Local presence and responsive service • Competitive fees What else makes Weaver special? Offering the resources of a national or international firm without the excessive fees Our local headquarters, combined with strategic national and international affiliations, allows us to offer you the resources of a large firm without the fees required to support national or international overhead. Committed to your complete satisfaction The only goal you can't accomplish is the one you don't go after! Our mission is to help you identify and achieve your financial goals. As such, we promise to deliver professional services that add measurable value. Providing unmatched client service Members of your engagement team, including senior management, will communicate with you in a timely and courteous manner all year long, not just during your engagement. As a firm and as individuals, we place great value on building long- term relationships, and providing outstanding service is one way we accomplish this. Understanding your needs As your professional services provider, we have a responsibility to learn your business and understand your needs. To accomplish this, we utilize comprehensive, industry -specific research tools to identify and address the issues facing you. Recognizing knowledge is power Each member of our client -serving staff participates in a rigorous program of continuing professional education so we can help you translate complex information into knowledge, and knowledge into decisions. We also have several specializations represented within the firm, including accredited business valuators, accredited estate planners, certified financial planners, certified fraud examiners, certified profit enhancement consultants, licensed attorneys and personal financial specialists. Taking a proactive stance on your behalf We strive to help you reach your financial goals, seize the opportunities and conquer the challenges along the way. Weaver works to keep you informed of changes in the law or services we can offer that will help you meet your goals. In addition to accounting, audit, fax and advisory services, we offer numerous specialized services, including some focused on specific industries. Weaver and Tidwell, L.L.P Page 27 Proposal for Independent Auditing Services Town of Westlake, Texas weaver - -Tax jil GFOA and CAFE Expetlence The firm is the auditor of more than 40 entities who have regularly receive the GFOA Certificate of Achievement (not all of whom are listed). We understand the reporting requirements of the GFOA and have the knowledge to help you with the reporting required. Nine Weaver staff members are currently members of the Special Review Committee of the GFOA that evaluate CAFRs for eligibility with Certificate of Achievement Program requirements. Weaver maintains internal quality control standards that will help ensure the Town's receipt of the Certificate of Achievement. We conduct the following procedures: The CAFR goes through an initial review to ensure it agrees to the working trial balances that were audited. • Once it is determined that all schedules agree to the trial balance (and to other schedules or notes within the report, where applicable), the CAFR is reviewed in relation to the GFOA checklist, financial disclosure checklist, MD&A checklist, and financial reporting checklist. Any suggestions/comments noted during our reviews will be communicated to Town staff. • Prior -year GFOA comments are reviewed with the staff to ensure they are appropriately addressed during the preparation of the CAFR. • The revised report is then reviewed by our staff for grammatical, format and other technical issues that may not have been observed during the first review. Our Involvement in the GFOA Jerry Gaither, audit partner, and John DeBurro, audit senior manager, are both members of the GFOA. Including them, nine Weaver professionals are members of the Special Review Committee, including: • Jerry Gaither, partner • James Fitts, partner • Kevin Sanford, partner • Adam McCane, partner • John DeBurro, senior manager • Sara Dempsey, senior manager • Sarah Roberts, manager • Greg Peterson, manager • Jackie Gonzalez, manager Jerry Gaither is also a Certified Government Financial Manager and a former member of the Technical Issues Committee of the AICPA as liaison to the Governmental Accounting Standards Board. This not only provides him with knowledge of new governmental standards before enactment, but also a role in helping shape those standards. Weaver and Tidwell, LLP Proposal for Independent Auditing Services NO Certificate Achievement Financial Re carting Page 28 Town of Westlake, Texas weaver Assurance • Tax • Advisory Weaver prides itself on offering the capabilities of a much larger firm without the expense. With our streamlined operations, we can provide the knowledge and experience you need, combined with a personal touch and individual attention. One of the most important factors in Weaver's ability to perform cost-efficient services is our function - specific approach to rendering professional services. Weaver can field a team with experience at every level. As a result, we can apply staff time at the most cost-effective levels and rates. All-inclusive Maximum Prue Weaver and Tidwell, LLP Page 29 Proposal for Independent Auditing Services Town of Westlake, Texas 0a FY2017 FY2018 Financial audit for the Town of Westlake for the fiscal year $27,000 $27,675 $28,350 $29,050 $29,750 ending September 30 Financial audit for the Westlake Academy for the fiscal year $12,500 $12,800 $13,100 $13,400 $13,750 ending August 31 Preparation of IRS Form 990 for the Westlake Academy $500 $525 $550 $575 $600 Foundation for the fiscal year ending August 31 Financial audit for the Westlake Academy Foundation for the $3,500 $3,600 $3,700 $3,800 $3,900 fiscal year ending August 31 Financial audit for Texas Student Housing Authority for the fiscal $5,000 $5,125 $5,250 $5,375 $5,500 year ending August 31 Financial audit for Texas Student Housing Authority, Ballpark $10,000 $10,250 $10,500 $10,750 $11,000 Austin Project, for the fiscal year ending August 31 Financial audit for Texas Student Housing Authority, the Ridge at $10,000 $10,250 $10,500 $10,750 $11,000 North Texas Project, for the fiscal year ending August 31 Financial audit for Texas Student Housing Authority, Town Lake $10,000 $10,250 $10,500 $10,750 $11,000 Austin Project, for the fiscal year ending August 31 Financial audit for Texas Student Housing Authority, College $10,000 $10,250 $10,500 $10,750 $11,000 Station Project, for the fiscal year ending August 31 TOTAL $88,500 $90,725 $92,950 $95,200 $97,500 Weaver and Tidwell, LLP Page 29 Proposal for Independent Auditing Services Town of Westlake, Texas weaver>00- Asiulance Our Inveshnent In the ingagemsnt A considerable amount of time is required during the first year of any engagement to train and familiarize staff with the nuances of your accounting and operations and to create necessary plans, programs and internal documents. Weaver will provide these hours of service without charge, as an investment in building a long-term relationship with you. Out -of -Pocket hpenses Weaver will not bill any additional costs for travel, lodging, subsistence or other expenses. The all-inclusive fee includes expenses. Additional Services If the Town requests additional services outside the established scope of work, Weaver will first discuss the services and associated costs with you. The costs will be negotiated based upon the timing of the work and skill level required. Determining Fees Although hourly rates are a convenient measure of effort and therefore costs, Weaver considers many factors to arrive at a fair and competitive fee. Such factors include the timing of the work, availability of professionals with suitable experience, associated risk factors, characteristics of the prospective client and its operations and our interest in working with that client. The fee proposal offered here was developed with all of these factors in mind. Manner of Payment Weaver will submit monthly invoices based on hours of work completed. Weaver and Tidwell, L.L.P Page 30 Proposal for Independent Auditing Services Town of Westlake, Texas weaver ii5iur:a�are - �cr;: • nnv,s;u Engagement Weaver and Tidwell, LLP Proposal for Independent Auditing Services Appendix o Team Recur es Page 31 Town of Westlake, Texas weaver>o_ ,�.ssuraerre - i pax . ; trtvi;rrry Jerry L. Gaither, CPA, CGFM Partner -in -Charge, Public Sector Services Partner, Assurance Services Professional Experience • More than 36 years of public accounting experience • Extensive experience in the government and nonprofit industries providing financial audits, risk advisory services, forensic and litigation accounting support and consulting • Directs Weaver's strategic plans for the public sector practice, including the development of staff training, audit methodology and market development • Develops Weaver's audit methodologies for financial auditing of government entities including cities, regional governments and public school districts, providing single audits meeting the requirements of the U.S. Office of Management and Budget (OMB) A-133 • Engagement partner for four of the 25 largest Texas cities and three of the 15 largest Texas school districts • Serves as audit engagement partner for school districts with total assets up to $1.5 billion and total revenues up to $825 million • Serves as audit engagement partner for governmental entities with government wide assets up to $1.3 billion and government wide revenues up to $350 million Representative Client Experience • City of Allen • City of Azle • City of Carrollton • City of Crowley • City of Desoto • City of Denton • City of Duncanville • City of Frisco • City of Grand Prairie • City of Greenville • City of Haltom City • City of Highland Village • City of Killeen • City of Lancaster • City of Lewisville • City of McKinney • City of Rockwall • City of Rowlett • City of Sachse • City of University Park • Town of Addison • Town of Highland Park Weaver and Tidwell, L.L.P Proposal for Independent Auditing Services • Town of Little Elm • Town of Trophy Club • Town of Westlake • Birdville ISD • Carrollton -Farmers Branch ISD • Fort Worth ISD • Duncanville ISD • Highland Park ISD • Hurst -Euless -Bedford ISD • Irving ISD • Lancaster ISD • Lewisville ISD • Mansfield ISD • Mesquite ISD • Richardson ISD • Plano ISD • North Central Texas Council of Governments • Central Texas Council of Governments • Central Texas Workforce Development Board • Greenville Electric Utility • Texas Municipal Power Agency Page 32 Town of Westlake, Texas Jerry L. Gaither, continued Professional Involvement and Recognition • Member, American Institute of Certified Public Accountants (AICPA) • Member, Texas Society of Certified Public Accountants (TSCPA), Dallas chapter • Member, Association of Government Accountants (AGA) • Member, AICPA Government Audit Quality Center (GAQC) • Member, Special Review Committee, Government Finance Officers Association of Texas (GFOAT) (More than 30 years) • Associate Member, Association of School Business Officials (ASBO), Former member, Panel of Review • Former Member, Technical Issues Committee to AICPA as a liaison to the Government Accounting Standards Board • Former member, Strategic Planning committee, Town of Addison • Former member, Charter Review committee, Town of Addison Education and Certifications • Certified Public Accountant, Texas • Certified Government Financial Manager, AGA • Bachelor of Business Administration, Accounting, Texas Christian University • Currently meets continuing professional education required by Generally Accepted Government Auditing Standards and Texas State Board of Public Accountancy Weaver and Tidwell, L.L.P Page 33 Proposal for Independent Auditing Services Town of Westlake, Texas weaver>*- As%utaoce- Shawn M. Parker, CPA Partner -in -Charge, Dallas Assurance Services Professional Experience • More than 25 years of experience in public accounting, including more than 16 years with Weaver • Focus on auditing and accounting for government entities including water districts, municipalities and school districts, as well as employee benefit plans, closely held businesses and nonprofit organizations • Industry experience includes government, estates and trusts, manufacturing/distribution, construction, healthcare and staffing services Representative Client Experience • City of Cedar Hill • City of Southlake • Mesquite Independent School District • North Texas Municipal Water District • Trinity River Authority • Town of Trophy Club • Trophy Club Municipal Utility District • Central Texas Workforce Development Board • Central Texas Council of Governments • North Central Texas Council of Governments Professional Involvement and Recognition • Member, Texas Society of Certified Public Accountants (TSCPA), Dallas chapter • Member, American Institute of Certified Public Accountants (AICPA) • Member, Special Review Committee, Government Finance Officers Association (GFOA) • Member, Nebraska Society of Certified Public Accountants (NSCPA) Education and Certifications • Certified Public Accountant, Texas • Bachelor of Science, University of Nebraska at Kearney • Currently meets continuing professional education required by Generally Accepted Government Auditing Standards, and the Texas State Board of Public Accountancy Weaver and Tidwell, L.L.P Page 34 Proposal for Independent Auditing Services Town of Westlake, Texas wearer Assurance • Tax • Advisory John DeBurro, CPA Senior Manager, Audit Services Professional Experience • Seventeen years of experience in public accounting • Practice emphasis in accounting and auditing for governmental and nonprofit entities, including municipalities, public school districts, counties, municipal power agencies, and transportation districts. • Manages the annual financial audit for four governmental entities with government -wide net position in excess of $200 million • Prepares the CAFR and A-133 single audit report, state single audit report, and accountant's reports on debt coverage ratios, when applicable, for approximately seven entities, all of which receive the GFOA award • Supervises and reviews the work of engagement team staff • Researches proper accounting for complex transactions and assists clients with implementation of new accounting standards Representative Client Experience • City of Denton • City of Southlake • City of McKinney • City of Frisco • City of Greenville • City of Lewisville • City of Wylie • City of Midlothian • Town of Little Elm • Town of Trophy Club • Plano ISD • Frisco ISD • Cedar Hill ISD • Highland Park ISD • Wylie ISD • Texas Municipal Power Agency • Texas Coalition for Affordable Power • Reeves County Professional Involvement and Recognition • Member, Texas Society of Public Accountants and its Dallas chapter • Member, American Institute of Certified Public Accountants • Member, Government Finance Officers Association • Member, Government Finance Officers Association of Texas • Member, Special Review Committee of the Government Finance Officers Association (GFOA) • Member, Planning Committee, Texas School Districts Annual Accounting and Auditing Conference Weaver and Tidwell, L.L.P Page 35 Proposal for Independent Auditing Services Town of Westlake, Texas weaver Assurance • Tax . Advi.soty John DeBurro, continued Presentations and Publications • Speaker, Texas School Districts Annual Accounting and Auditing Conference, "GASB Update," June 2013 and 2014, San Antonio, Texas • Speaker, GFOAT Spring Institute, "Cash Flow Statements", April 2013, Austin, Texas • Speaker, GFOAT Fall Conference, "Single Audit / Grants Management Compliance", October 2012, San Marcos, Texas • Speaker, Summer 2012 Conference, GASB Update, June 2012, Allen, Texas • Speaker, GFOAT Fall Conference, "Intermediate Government Accounting", November 2011, Conroe, Texas • Speaker, Annual Weaver CPE Event, "GASB 54", "GASB Update," 2011-2013 • Speaker, Texas School Districts Annual Accounting and Auditing Conference, "Audit Findings under OMB Circular A-133 and GAS", June 2010, San Antonio, Texas • Speaker, GFOAT Spring Institute, "Accounting for Capital Assets: Using the New GFOA Manual", April 2010, Austin, Texas Education and Certifications • Certified Public Accountant, Texas • Bachelor of Business Administration, University of New Hampshire • Master of Science, New Hampshire College • Currently meets continuing professional education required by Generally Accepted Government Auditing Standards and Texas State Board of Public Accountancy Weaver and Tidwell, L.L.P Page 36 Proposal for Independent Auditing Services Town of Westlake, Texas weave • Meredith Churchill, CPA Senior Associate I, Audit Services Professional Experience • Three years of experience in public accounting • Practice emphasis in accounting and auditing for a wide array of nonpublic, nonprofit, and governmental entities including private foundations and schools, real estate management and investment companies, communication device providers, school districts, cities, and employee benefit plans • Plans and performs audits in accordance with generally accepted auditing standards (GRAS), and with the Single Audit Act and OMB Circular A-133, where applicable, to the aforementioned entities. • Supervises and reviews the work of engagement team staff • Supervises the annual audits of nonpublic companies with total assets up to $53 million and revenues of $100 million • Supervises the annual audits of employee benefit plan options with up to $13 million in net assets • Performs the annual audit of cities and school districts with more than $1 billion in assets and $29 million in annual net income Representative Client Experience • City of Denton, Texas • City of Wylie, Texas • Town of Addison, Texas • Highland Park ISD • Denton County Fresh Water Supply Districts Professional Involvement • Member, Texas Society of Certified Public Accountants (TSCPA) Education and Certifications • Certified Public Accountant, Texas • Bachelor of Science in Accounting, Abilene Christian University • Masters of Business Administration with a focus in Accounting, Abilene Christian University • Currently meets continuing professional education required by Generally Accepted Government Auditing Standards and Texas State Board of Public Accountancy Weaver and Tidwell, LLP Page 37 Proposal for Independent Auditing Services Town of Westlake, Texas rare ave r Assurance • Tax • Advisor/ Ira L. Nevelow, CPA, AEP, JD Partner -in -Charge, Estate, Gift and Trust Taxation Services Professional Experience • More than 30 years of experience in public accounting with concentrations in taxation of estates and trusts, nonprofit organizations and individuals Extensive experience working with individuals to strategically manage tax compliance responsibilities related to business and personal matters, including gift and estate planning and Texas separate property issues as a result of divorce • Counsels nonprofit organizations regarding compliance responsibilities, unrelated business income, private foundation excise tax and gift substantiation issues • Provides individual and business Internal Revenue Service proceeding representation • Significant experience providing tax and financial consulting to privately -held and owner - managed businesses in a variety of industries, including investment partnerships, professional services organizations and real estate entities Representative Client Experience • America Can! • Dallas Lighthouse for the Blind • Senior Citizens of Greater Dallas • Community Council of Greater Dallas • St. Paul Medical Foundation • YWCA of Metropolitan Dallas Professional Involvement and Recognition • Member, Texas Society of Certified Public Accountants (TSCPA) o Member, Nonprofit Organizations Conference committee o Former Chairman, Taxpayer Education committee, Dallas chapter • Member, Gulf States Area TEGE (Tax Exempt and Governmental Entities) Council • Member, American Institute of Certified Public Accountants (AICPA) • Member, State Bar of Texas and Dallas Bar Association Education and Certifications • Certified Public Accountant, Texas • Accredited Estate Planner • Licensed Attorney, Texas • Juris Doctor, University of Houston • Bachelor of Business Administration, Accounting, The University of Texas at Austin • Currently meets continuing professional education required by the Texas State Board of Public Accountancy Weaver and Tidwell, L.L.P Page 38 Proposal for Independent Auditing Services Town of Westlake, Texas weaver A.swiance - Tax -Advisory Marlon B. Williams, CPA, ACDA Partner, Assurance Services Professional Experience • More than 17 years of experience in public accounting • Leads the Weaver Analytics practice group, developing sophisticated data -mining and automated tools that can identify anomalies and potential areas of concern in large volumes of electronic data • Directs Weaver's use of ACL, a software tool used to analyze financial and other data during audits • Practice emphasis in auditing and consulting with numerous nonprofit organizations, municipalities and independent school districts • Significant experience in accounting and auditing of companies in the manufacturing, wholesale/distribution, financial services and service industries • Member of Weaver's Technical Integration Task Force Representative Client Experience • City of Duncanville • Garland ISD • Irving ISD • Allen ISD • North Texas Regional Water District • Lake Cities Municipal Utility Authority • City of Cedar Hill • City of Greenville • City of Lancaster • City of McKinney Professional Involvement and Recognition • Member, Texas Society of Certified Public Accountants (TSCPA) • Member, American Institute of Certified Public Accountants (AICPA) • Member, Texas ACL User Group Education and Certifications • Certified Public Accountant, Texas • ACL Certified Data Analyst • Bachelor of Business Administration, Accounting, Abilene Christian University Weaver and Tidwell, L.L.P Page 39 Proposal for Independent Auditing Services Town of Westlake, Texas we ave r.�" Assurance - Tax • Advisory Brittany George Teare, CISA Senior Manager, Advisory Services Professional Experience • Nearly 10 years of experiencing performing IT audit, security and consulting services, including more than six years of public accounting experience • Experience in oversight of the planning and performance of many of Weaver's most significant IT controls engagements, which have a heavy focus on information security • Practice emphasis in internal and external IT audits including risk assessment, planning and execution • More than two years of experience in KPMG's Information Technology Advisory practice and two and a half years with TXU/Capgemini Energy • Managed System, Integration and User Acceptance testing activities across multiple project teams for projects sponsored by ERCOT (Energy Regulatory Commission of Texas) involving market participants across Texas while at TXU/Capgemini Energy • Responsible for the oversight and management of the development and maintenance of annual IT audit and security project plans for multiple Fortune 500 companies. Additional experience in leading compliance engagement sections/phases, including the documentation of controls design and testing of controls • Industry experience includes: technology solutions, utilities, oil and gas, municipalities, telecommunications, financial services, healthcare, food services, banking, government • Documented and evaluated (SAP) internal general and application controls for compliance with security policies • Oversight and coordination with external auditors and other outside consultants to ensure timely completion of SOX attestation, assistance in planning and coordinating SOX training sessions and SOX planning/status meetings • Professional IT experience includes security controls testing performed in SAP, JD Edwards, Oracle Database, UNIX / LINUX, and Microsoft (SQL Server, Windows Server and Active Directory) environments Representative Client Experience • Garland ISD • City of Denton • Baptist General Convention of Texas • Frisco ISD • City of Fort Worth Professional Involvement and Recognition • Board Member, Information Systems Audit and Control Association (ISACA) • Member, Institute of Internal Auditors (IIA) • Member, AFCOM • Member, Metroplex Technology Business Council (MTBC) • Steering Committee Member, Cloud Computing Special Interest Group of the MTBC • Member, Cloud Security Alliance (CSA) Education and Certifications • Certified Information Systems Auditor • SAP Certified Consultant • Bachelor of Business Administration, Management Information Systems, University of Oklahoma Weaver and Tidwell, LLP Page 40 Proposal for Independent Auditing Services Town of Westlake, Texas weave :.' P ,EJ §¢ t iV ptt August 15, 2014 The honorable Mayor, Town Council, and Town Manager Town of Westlake 3 Village Circle, Suite 202 Westlake, Texas 76262 We are pleased to confirm our understanding of the services we are to provide the Town of Westlake (the Town) for the year ended September 30, 2014. 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 Town as of and for the year ended September 30, 2014. Accounting standards generally accepted in the United States of America provide for certain required supplementary information (RSI), such as management's discussion and analysis (MD&A), to supplement the Town's basic financial statements. Such information, although not a part of the basic financial statements, is required by the Govermnental 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 Town'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) General Fund Budgetary Comparison Schedules — General Fund. and Major Special Revenue Funds 3) TMRS Schedule of Funding Progress We have also been engaged to report on supplementary information other than RSI that accompanies the Town's financial statements. We will subject the following supplementary inforination 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: !-.ii i'r` E. E`11[) E ; WEAVER AND TIDWELL LLP DALLAS =i sER 0E g1RER TILLY CHTIr lED PUBLIC, ACCOOIII P' TS IVIND CONSULTANTS .2221 MERIT DRIVE, SUITE 1.400, DALLAS, TX 7521 Res 14-23 , = r�AF,G� A1_ �.,, _ �_ _ t t),'4� P: {9; 2) 490 1070 ; : (972, 702 8321 Town of Westlake August 15, 2014 Mage 2 1) Budgetary Comparison Schedule — Debt Service Fund 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 our auditor's report will not provide an opinion or any assurance on that other information. 1) Statistical Section 2) Introductory Section 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. Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America and the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and will include tests of the accounting records of the Town and other procedures we consider necessary to enable us to express such opinions. We cannot provide assurance that unmodified opinions will be expressed. Circumstances may arise in which it is necessary for us to modify our opinion or add emphasis of matter or other matter paragraphs. If our opinions on the financial statements are other than umnodified, we will discuss the reasons with you 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. We will also provide a report (that does not include an opinion) on internal control related to the financial statements and compliance with the provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a material effect on the financial statements as required by Government Auditing Standards. The reports on internal control and compliance will each include a paragraph that states that the purpose of the report is solely to describe 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, and 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. The paragraph will also state that the report is not suitable for any other purpose. If during our audit we become aware that the Town is subject to an audit requirement that is not encompassed in the terms of this engagement, we will communicate to management and those charged with governance that an audit in accordance with U.S. generally accepted auditing standards and the standards for financial audits contained in Government Auditing Standards may not satisfy the relevant legal, regulatory, or contractual requirements. Town of Westlake August 15, 2014 Page 3 Management is responsible for the basic financial statements and all accompanying information as well as all representations contained therein. As part of the audit, we will assist with preparation of your financial statements and related notes. You will be required to acknowledge in the written representation letter our assistance with preparation of the financial statements and that you have reviewed and approved the financial statements and related notes prior to their issuance and have accepted responsibility for them. You agree to assume all management responsibilities for any non -audit services we provide; oversee the services by designating an individual, preferably from senior management, who possesses suitable skill, knowledge, or experience; evaluate the adequacy and results of those services, and accept responsibility for them. Management is responsible for establishing and maintaining effective internal controls, including evaluating and monitoring ongoing activities, to help ensure that appropriate goals and objectives are met; for the selection and application of accounting principles; and for the preparation and fair presentation of the financial statements in conformity with U.S. generally accepted accounting principles. 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. You are also responsible for providing us with (1) access to all information of which you are 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 whom we determine it necessary to obtain audit evidence. Your responsibilities include adjusting the financial statements to correct material misstatements and for 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 aggregate, to the financial statements taken as a whole. You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud affecting the government involving (1) management, (2) employees who have significant roles in internal control, and (3) others where the fraud could have a material effect on the financial statements. Town of Westlake August 15, 2014 Your responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud affecting the government received in communications from employees, former employees, grantors, regulators, or others. In addition, you are responsible for identifying and ensuring that the entity complies with applicable laws, regulations, contracts, agreements, and grants for taking timely and appropriate steps to remedy any fraud, violations of contracts or grant agreements, or abuse that we may report. You are responsible for the preparation of the supplementary information in confonnity with U.S. generally accepted accounting principles. You agree to include our report on the supplementary information in any document that contains and indicates that we have reported on the supplementary information. You also agree to include the audited financial statements with any presentation of the supplementary information that includes our report thereon or make the audited financial statements readily available to users of the supplementary information no later than the date the supplementary information is issued with our report thereon. Your responsibilities include acknowledging to us in the written representation letter that (1) you are responsible for presentation of the supplementary information in accordance with GAAP; (2) that you believe the supplementary information, including its form and content, is fairly presented in accordance with GAAP; (3) that the methods of measurement or presentation have not changed from those used in the prior period (or, if they have changed, the reasons for such changes); and (4) you have disclosed to us any significant assumptions or interpretations underlying the measurement or presentation of the supplementary information. Management is responsible for establishing and maintaining a process for tracking the status of audit findings and recommendations. Management is also responsible for identifying for us previous financial audits, attestation engagements, performance audits or other studies related to the objectives discussed in the Audit Objectives section of this letter. This responsibility includes relaying to us corrective actions taken to address significant findings and recommendations resulting from those audits, attestation engagements, performance audits, or other studies. You are also responsible for providing management's views on our current findings, conclusions, and recommendations, as well as your planned corrective actions, for the report, and for the timing and format for providing that information. During the course of our engagement, we will request information and explanations from management regarding the Town's operations, internal controls, future plans, specific transactions and accounting systems and procedures. At the conclusion of our engagement, we will require, as a precondition to the issuance of our report, that management provide certain representations in a written representation letter. The Town. agrees that as a condition of our engagement to perform an audit, that management will, to the best of its knowledge and belief be truthful, accurate and complete in all representations made to us during the course of the audit and in the written representation letter. Town of Westlake August 15, 2014 Page 5 The procedures we perform in our engagement and the conclusions we reach as a basis for our report will be heavily influenced by the written and oral representations that we receive from management. False or misleading representations could cause us to expend unnecessary efforts in the audit; or, worse, could cause a material error or a fiaud to go undetected by our procedures. Thus, the Town agrees that we will not be liable for any damages or otherwise responsible for any misstatements in the Town's financial statements that we may fail to detect as a result of false or misleading representations that are made to us by management. Moreover, the Town agrees to indemnify and hold us harmless from any claims and liabilities, including reasonable attorneys' fees, expert fees and costs of investigation and defense, arising out of or related to this engagement if false or misleading representations are made to us by any member of the Town's management. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We will plan and perform the audit to obtain reasonable rather than absolute assurance about whether the financial statements are free of material misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the entity or to acts by management or employees acting on behalf of the entity. Because the determination of abuse is subjective, Government Auditing Standards do not expect auditors to provide reasonable assurance of detecting abuse. Because of the inherent limitations of an audit, combined with the inherent limitations of internal control, and because we will not perform a detailed examination of all transactions, there is a risk that material misstatements may exist and not be detected by us, even though the audit is properly planned and performed in accordance with U.S. generally accepted auditing standards and Government Auditing Standards. In addition, an audit is not designed to detect immaterial misstatements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements. However, we will inform the appropriate level of management of any material errors or any fraudulent financial reporting or misappropriation of assets that come to our attention. We will also inform the appropriate level of management of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not extend to Later periods for which we are not engaged as auditors. Town of Westlake August 15, 2014 Page 6 Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, funding sources, creditors, and financial institutions. We will request written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will require certain written representations from you about the financial statements and related matters. Our audit will include obtaining an understanding of the entity and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit procedures. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the financial statements. Our tests, if performed, will be less in scope than would be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to Government Auditing Standards. An audit is not designed to provide assurance on internal control or to identify significant deficiencies or material weaknesses. However, during the audit, we will communicate to management and those charged with governance internal control related matters that are required to be communicated under AICPA professional standards and Government Auditing Standards. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of the Town's compliance with the provisions of applicable laws, regulations, contracts, agreements, and grants. However, the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an opinion in our report on compliance issued pursuant to Government Auditing Standards. We understand that your employees will prepare all cash or other confirmations we request and will locate any documents selected by us for testing. Town of Westlake August 15, 2014 Page 7 Both of us agree that any dispute between you and Weaver and Tidwell, L.L.P., arising from the engagement, this agreement, or the breach of it, may, if negotiations and other discussion fail, be first submitted to mediation in accordance with the provisions of the Commercial Mediation Rules of the American Arbitration Association (AAA) then in effect. Both of us agree to conduct any mediation in good faith and make reasonable efforts to resolve any dispute by mediation. Mediation is not a pre -condition to the arbitration provided for below and the failure or refusal by either party to request or participate in mediation shall not preclude the right of either party to initiate arbitration. We agree to conduct the mediation in Dallas, Texas, or another mutually agreed upon location. Both of us agree that any dispute arising from the engagement, this agreement or the breach of it shall be subject to binding arbitration under the provisions of the Federal Arbitration Act (9 U.S.C. § 1, et seq.) and of the Dispute Resolution Rules for Professional Accounting and Related Services Disputes of the AAA (the Rules), and judgment on the award rendered by the arbitrator may be entered in any court of competent jurisdiction. The arbitration shall be heard before one or more arbitrators selected in accordance with the Rules. The parties agree to conduct the arbitration in Dallas, Texas, or another mutually agreed upon location. The arbitrator may only award direct damages and may not award consequential, exemplary, or punitive damages. The prevailing party in any arbitration or litigation shall be entitled to recover from the other parry reasonable attorneys' and expert witness fees, court costs, and the administrative costs, arbitrator's fees, and expenses of the AAA incurred in the arbitration or litigation in addition to any other relief that may be awarded. Notwithstanding the provisions of the immediately preceding paragraph, neither of us shall be compelled to arbitrate any dispute between us which arises out of any claim asserted against either of us by a third party, unless the third party (whether one or more) agrees to join the arbitration or can be compelled to join it. If any term of this engagement letter is declared illegal, unenforceable, or unconscionable, that term shall be severed and the remaining terms of the engagement letter shall remain in force. Both of us agree that the arbitrator(s) or Court, as the case may be, should modify any term declared to be illegal, unenforceable, or unconscionable in a manner that will retain the intended term as closely as possible. If a dispute arising from the engagement or from this agreement or any terra of it or any alleged breach of it is submitted to a Court for interpretation or adjudication, both of us irrevocably waive right to trial by jury and agree that the provisions of this engagement letter regarding damages, attorneys' fees, and expenses shall be applied and enforced by the Court. In the unlikely event that circumstances occur which we in our sole discretion believe could create a conflict with either the ethical standards of our firm or the ethical standards of our profession in continuing our engagement, we may suspend our services until a satisfactory resolution can be achieved or we may resign from the engagement. Town of Westlake August 15, 2014 We will notify you of such conflict as soon as practicable, and will discuss with you any possible means of resolving them prior to suspending our services. We will provide copies of our reports to the Town; however, management is responsible for distribution of the reports and the financial statements. Unless restricted by law or regulation, or containing privileged and confidential information, copies of our reports are to be made available for public inspection. The audit documentation for this engagement is the property of Weaver and Tidwell, L.L.P. and constitutes confidential information. However, pursuant to authority given by law or regulation, we may be requested to make certain audit documentation available to Town or its designee, a federal agency providing direct or indirect funding, or the U.S. Government Accountability Office for purposes of a quality review of the audit, to resolve audit findings, or to carry out oversight responsibilities. We will notify you of any such request. If requested, access to such audit documentation will be provided udder the supervision of Weaver and Tidwell, L.L.P. personnel. Furthermore, upon request, we may provide copies of selected audit documentation to the aforementioned parties. These parties may intend, or decide, to distribute the copies or information contained therein to others, including other governmental agencies. The audit documentation for this engagement will be retained for a minimum of five years after the report release date or for any additional period requested by the Town. If we are aware that a federal awarding agency or auditee is contesting an audit finding, we will contact the party(ies) contesting the audit finding for guidance prior to destroying the audit documentation. Mr. Jerry Gaither is the engagement partner and is responsible for supervising the engagement and signing the report on behalf of Weaver and Tidwell, L.L.P. We expect to begin our audit on approximately September 29, 2014 and to issue our reports no later than February 23, 2015. Our fee is based upon the complexity of the work to be performed and the tasks required. Fees for our services are due upon receipt of our invoice. For bills not paid within 60 days of the billing date, a late charge will be added to the outstanding balance. The late charge will be assessed at .5% on the unpaid balance per month. Our fee for these services will be at our standard hourly rates plus out-of-pocket costs (such as report reproduction, word processing, postage, travel, copies, telephone, etc.) except that we agree that our gross fee, including expenses, will not exceed $27,000. Our standard hourly rates vary according to the degree of responsibility involved and the experience Level of the personnel assigned to your audit. Our invoices for these fees will be rendered each month as work progresses and are payable on presentation. In accordance with our firm policies, work may be suspended if your account becomes 60 days or more overdue and may not be resumed until your account is paid in f czll. Town of Westlake August 15, 2014 Mage 9 If we elect to terminate our services for nonpayment, our engagement will be deemed to have been completed upon written notification of termination, even if we have not completed our report. You will be obligated to compensate us for all time expended and to reimburse us for all out-of-pocket costs through the date of termination. The above fee is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. If significant additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the additional costs. We will issue a written report upon completion of our audit of the Town's financial statements. Our report will be addressed to the Mayor, Council and Manager of the Town. We cannot provide assurance that an unmodified opinion will be expressed. Circumstances may arise in which it is necessary for us to modify our opinion, add an emphasis -of -matter or other -matter paragraph(s), or withdraw from the engagement. Government Auditing Standards require that we provide you with a copy of our most recent external peer review report and any letter of comment, and any subsequent peer review reports and letters of comment received during the period of the contract. Our 2013 peer review report accompanies this letter. If you intend to publish or otherwise reproduce the financial statements and make reference to our firm name, you agree to provide us with a copy of the final reproduced material for our approval before it is distributed. We appreciate the opportunity to be of service to the Town and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. Yours truly, WEAVER AND TIDWELL, L.L.F. .ILG:res Town of Westlake August 15, 2014 Page 10 RESPONSE: This letter correctly sets forth the understanding of Town of Westlake Officer signature Title 'LaA�A , --i Date 1 .E;, •.EideBallly, I:P.A, S lit 7SI\ESS ADVISORS System Review Report October 4, 2013 To the Partners of Weaver and Tidwell, L.L.P. and the National Peer Review Committee We have reviewed the system of quality control for the accounting and auditing practice of Weave and Tidwell, L.L.P. (the firm) applicable to non -SEC issuers in effect for the year ended May 31, 2013. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants. As a part of our peer review, we considered reviews by regulatory entities, if applicable, in determining the nature and extent of our procedures. The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Our responsibility is to express an opinion on the design of the system of quality control and the firm's compliance therewith based on our review. The nature, objectives, scope, limitations of, and the procedures performed in a System Review are described in the standards at www.aicpa.org/prsummary. As required by the standards, engagements selected for review included engagements performed under Government Auditing Standards; audits of employee benefit plans, audits performed under FDICIA, and examinations of service organizations (Service Organizations Control (SOC) 1 and 2 engagements). In our opinion, the system of quality control for the accounting and auditing practice of Weaver and Tidwell, L.L.P. applicable to non -SEC issuers in effect for the year ended May 31, 2013, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficieney(ies) or fail. Weaver and Tidwell, L.L.P. has received a peer review rating ofpass. Eide Bailly LLP www. E:ld,-'baiIIy.corn 800 Nicollet Mall, Ste. 1300 Minneapolis, MN 55402-7033 ; T 612.253.6500 ? F 612.253.6600 EOE