18 - APPROVED ANNUAL AUDIT OF THE PEDC FOR FY 2013-14

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McClanahan and Holmes, LLP CERTIFIED PUBLIC ACCOUNTANTS R. E. BOSTWICK, CPA 228 SIXTH STREET S.E. STEVEN W. MOHUNDRO, CPA PARIS, TEXAS 75460 GEORGE H. STRUVE, CPA 903 - 784 -4316 ANDREW B. REICH, CPA FAX 903 - 784 -4310 RUSSELL P. WOOD, CPA DEBRA J. WILDER, CPA 304 WEST CHESTNUT DENISON, TEXAS 75020 903 -465 -6070 FAX 903 -465 -6093 1400 WEST RUSSELL BONHAM, TEXAS 75418 903- 583 -5574 FAX 903 - 583 -9453 Board of Directors Paris Economic Development Corporation Paris, Texas We have audited the financial statements of the Paris Economic Development Corporation (PEDC) for the year ended September 30, 2014. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our engagement letter to you dated October 6, 2014. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by PEDC are described in notes to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year ended September 30, 2014. We noted no transactions entered into by PEDC during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were sales tax receivable and accrued interest payable. Certain financial statement disclosures are particularly sensitive because of their significance to the financial statement users. The most sensitive disclosures affecting the financial statements were debt and commitments. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS