14 - INDEPENDENT OUTSIDE AUDIT FOR FISCAL YEARS 2016-17, 2017-18, 2018-19

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City of Paris February 3, 2017 Page 6 Audit Administration, Fees, and Other (Continued) estimate and the actual fee billed will be based on our standard billing rates and the number of hours necessary to complete the required scope of work. For the years ending September 30, 2018 and 2019, we propose to limit increases to the change in the annual average of the consumer price index published by the U.S. Department of Labor (CPI -U). Position Hours Partner 20 In- Charge 300 Staff 470 Clerical 60 Total 850 Matters That Can Cause Work in Excess of Fee Estimate We want you to receive the maximum value for our professional services and to perceive that our fees are reasonable and fair. However, in seeking to provide you with such value, we find there are various matters that can cause us to perform work in excess of that contemplated by our fee estimate. The following explains the matters that arise most frequently. Changing Requirements Today, there are numerous governmental or rule - making bodies that regularly add or change various requirements. Although we attempt to plan our work to anticipate the requirements that will affect our engagement, three types of situations make this difficult. Sometimes, these new requirements are not communicated in time for us to anticipate their effects in our preliminary planning. Secondly, in spite of our anticipation and planning, the work necessary to comply with new requirements may be underestimated. Finally, in some instances, you may decide that it is advantageous to you to have the new requirements applied immediately. Incorrect Accounting Applications or Errors in Records We generally form our fee estimates on the expectation that your accounting records are in good order so that our work can be completed based upon our normal testing and other procedures. However, should we find numerous errors, incomplete records, or disorganized bookkeeping methods, we will have to do additional work to determine that the necessary corrections have been made and are properly reflected in the financial statements. Lack ofAudit Facilitation or Timely Preparation To minimize your costs, we plan the means by which your personnel can facilitate the audit (for example, what schedules they will prepare, how to prepare them, the supporting documents that need to be provided, and so forth). We also discuss matters such as availability of your key personnel, deadlines, and working conditions. Indeed, the information concerning these matters that you furnish to us is a key element in our fee quotation. Therefore, if your personnel are unable, for whatever reasons, to provide these materials on a timely basis, it may substantially increase the work we must do to complete the engagement within the established deadlines. Moreover, in some circumstances, this may require a staff withdrawal, as discussed below.