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02 Auditor Appointment MEMO TO: TERRY TOWNSE D, CITY MANAGE FROM: GENE ANDER ON SUBJECT: ANNUAL UDIT Request for proposals were mailed i July to local accounting firms a d advertisement made in the Paris Ne s regarding the performance oft e City's audit for the year ending Sept mber 30,2004. Attached you w 11 find a copy of the bid list and thë newspa er notice. Also attached is a copy of the one pr posal received from McClanah and Holmes, PLLC. The estimated cost i $42,500. This is a decrease ove the $48,000 paid the previous year. ;f It is recommended that the proposal e accepted. PUBLISH IN THE PARIS NEWS AUGUST 1,2004 AUGUST 8, 2004 LEGA NOTICE The City of Paris will receive proposals at t e office of the City Manager, City of aris, P.O. Box 9037, Paris, Texas 75461-9037 ~ r the City's annual outside audit for th period . ending September 30, 2004. Proposals will be received unti13:00 P.M., uesday, August 10,2004, at which ti proposals received will be opened, tabulate, and referred to the City Manager. P will then be referred to the City Council fo consideration. The City of Paris reserves the right to rejec any or all proposals,Jto waive any informality, and to award as may be advant geous to the City of Paris. Mattie Cunningham City Clerk, City of Paris, Paris, Texas AUDIT PR POSAL LIST J. Todd Duren, CPA 1323 Lamar Avenue Paris, Texas 75460 McClanahan & Holmes, PLLC 228 S.E. 6th Street Paris, Texas 75460 Paul T. Wells, CPA 1323 Lamar Avenue Paris, Texas 75460 Ma1nory, McNeal, & Co., PC 3660 Clarksville Street Paris, Texas 75460 f - "'0",. "'," 0 " '" ANNOUNCEMENTS ,i,"",""",," -' " 215 Legal Notices ADVERTISEMENT FOR A PROPOSAL HARRISON. WALKER" HARPER, LP. as Construction Manager for Prairiland ISO, In- vites qualified bidders to submit ¡J proposal for the New Prairl. Jand High School Field House. PROJECT: New Field House 18,OOOsf). Work will Include earthWork. site utilities, termite control, concrete, masonry, metal building. Insulation, rough carpentry, millwork, building sealants, hollow met. al doors and frames, rolling overhead doors, doors and hardware, storefront, glass & glazing, drywall, acoustical ceiling. resilIent nooring and carpet FRP panels, painting. viSual display bOards, toilet par. titions, Signage, /ockers, fire ex. tinguishers, toilet accessories, plumbing, HVAC, and electri. cal, BONDING: If the proposed subcontract price is S25,OOO or abOve, the subcontractor must show written evidence that they are able to bond and to provide an additional cost to provide the Payment and Per. formance Bonds, If the pro. posed subcontract price Is be- low S25,OOO. the subcontrac. ~;n7'~~~ ~~;:'~~~~d~o~1s: be paid via Joint check with their supplies or have thiS re- quirement waived by an omcer .,o.f Che company, all at the sole "iscretion of the company. PROPOSAL PACKAGE: May be oÞtained by contacting Har. rison, Walker & Harper, LP ATTN: Robert Black. Estimating Coordinator 1903)783-3637, Fax proposals are acceptable with original to follow to 1903) 785.1792 or /903) 784-1471. Please keep up to date on new addenda's Issued on this proj- ect' by accessing hrm'llwww wl'bulltU1wh com auestions may be directed to cwIlnerd~Þulld-hwh com or you may call 1800) 442-8326 or /903) 785-1653 for local calls. ' PROPOSAL OPENING: Pro- posals are due 2:00 p,m. Thursday. August 19. ZO04. PrOpoSals will be opened privately and may be faxed to /903) 785-179~ or (903) 784.147 J. The Owner/CM reserves the right to waive any Informality or to reject :tny or all proposals, ¡&JI proposafs shall remain good and may not be withdrawn for 60 calendar days. LEGAL NOnCE ,- The CIty of ParIs will receive proposals at the office or the, City Manager. City of Paris. P.O. Box 9037. Paris, Texas 75461.9037 tor the CIty's an- nual outside audit for Che peri- od ending September 30, 2004, ! : " ~-~ ..LI. 215 Legal Notices ...from previous column 3;00 P.M" Tuesday, AuguSt I , 2004, at which time all pro s' als received will be opene , tabulated, and referred 10 t e City Manager. Proposals w II then be referred to the Ci y Council for consideration. The City ørParis reserves t e right to r<:ject any or all pro. als, to waive any Informali and to award as may be adva tageous to the City of Paris, Mattie Cunningham, Oty Clerk. City of Paris. Paris, Texas REOUEST FOR PROPOS The CommIssioner's Court f Lamar County is requesting a audit proposal by Certified Pu lie Accountants for an Ind. pendent audit of the financl I records of Lamar County r r the fiscal years ending Septe ber 30, 2004 and Septemb r 30,2005. The audit proposal should I . clude the following specific, tions: ' I. General background of th orreror or the orrering firm a ItS principals and stati' membe s expected to be assigned to th audit; 2. Offeror's relevant exper. ence, Including representati clienlllsting and references; The proposal should be sent t the County Auditor, 119 . Main, Room 202, Paris, Tex s 75460, The Commissioner Court will accept the proposa on Monday, AuguSt 16, 200 , at 10:00 AM. Further Info tion to aid In completing yo r proposal may be oÞtained rro the Auditor's Office at the mar County Courthouse Ann , The Commissioner's Court r . . serves the right to reject any r all proposals and to waive m. nor technicalities. Kevin Parsons County Auditor rublle Notlncatlon of Nondiscrimination In Career and Technology ,Education Programs I, Paris Independent Scho I District orrers Career an Technology Education pr . grams In Agriculture Sclenc and Technolog , Business/Computer Educatio , Health Science Technology E ucation. Family and ConIum r Sciences Educa~on, Technol gy Education/InduStrial Tec ~~~0?Xd~rrl~1~"rJ~c;~~n~raã' mission to these programs based on career Interests, ap . tudes, specIal Ihterest. abili , age appropriateness and claSS space available, I 2, It Is the policy Of Paris loot pendent School District not tll CIIscrimlnate on basis of racd, color, national origin, sex, ~r ,handicap In Its vocational pre¡. grams, services. or activlti~ required by Title VI of the I Rlgha Act of 1964, as a - ed; Title IX of the Education Amendmena of 1972; and SO<!. tion 504 of the Rehabilitation 215 legal Notices 215 Legal Notices ...from previous column 5, Para informaciOn sobre s s derechos 0 procedimlent s para quejas. comunlquese c n el Coordinador del Titulo I , Mark Hudson en 1920 la cal e de Clarksville, Paris, Tex s 75460, 1903) 737.7473: ylo Coordinador de la SecclOn 50 , Mark Hudson, en 1920 en a calle de Clarksville, Paris, T s 75460, 1903) 737.7473, 225 Lost&Found ...from previous column 3, It is the policy of Paris Inde- pendent School District not to discrIminate on the basis of race, color, national origin, S""- handicap. or age In Its employ. ment practices as required by Title VI or the Civil Rights Act of 1964. as amended: TItle IX of the Education Amendments of 1972: the' Age Discrimination Act of 1975, as amended: and Section 504 of the Rehabilita. tion Act of 1973, as amended, 4. Paris Independent School District will take steps to ensure thaI fack of English language skills will not be a barrier to ad- " mission and participation in all - FOUND!! educational and vocational Female, Yellow Lab mi . programs, Dumped or lost In Pin 5. For information abOut your Valley Additon. 903.78 - rights or grievance procedures. 1744 contact the Title IX Coordina. tor, Mark Hudson, at (903) 737.7473, 1920 Cfarksville Slreet, Paris, Texas, 75460, and/or the Section 504 Coordi- nator, Mark Hudson at 1903) 737.7473, 1920 Clarksville Street. Paris, Texas, 75460, La'Notincaclðn Públlca de Las Carreras Y Los progr. .....s de Educac/6n Tecnolo- gill sin Dlserlmlnac/6n I. EI Distrlto Escolar !ndepen- diente de Paris Orrete Carreras y programas de EducadOn Toc. nologla en Ciencla de ~rfcola y Tecnologla, EducadOn de Ne- gocios, EducaclOn de Tecnolo- gfa de aencias de Salud, Edu. caciOn de Cienclas de Familia y Consumidor, EducaciOn Tecno- rogla! EducaclOn Tecnologla In- dustrial, EducadOn de Industri- al y Comercio. La admlsiOn a estos programas se depende en los intereses, aptitudes, n- tereses especiales, habilidades, edad apropiada y si hay esp..- cio disponible en Ia clase. 2, Es 01 reglamento dol Distrito Escolar independiente de Paris no discriminar por motivos de raza. color, origen nacional, sexo, 0 impedimento en sus programas, servlclos 0 activi. dades vocaclonales, tal como se requieren en el TItulo VI de la Ley de Derechos Civiles de 1964, según enmienda: 01 TItu- lo IX de las Enmlendas de la EducaciOn de 1972, y Ia Sec. ciOn 504 de Ia ley de Rehabili- taclOn de '973, según enmien- da. 3. Es 01 teglamenlo dol Distrito Escolar IOOependiente de Paris no discrfmlnar por motives de rala, COlor, origen naclonal, sexo, 0 Impedlmento en sus procedlmlentos de empleo, tal como se requleren en 01 Tltulo VI de Ia Ley de Deroches Civiles de '964, según enmienda; of TItulo IX de !as Enmiendas de fa EducadOn de 1972, la ley de DiscrlmlnaclOn por Edad de 1975, según enmlenda, y la SecciOn 504 de Ia ley de Reha- bilitadOn de,I973, según enm~ enda. 4. EI Distrlto Escolar 'ndepen- diente de Paris tomar~ las med- Idas neeesarias para asegurar que fa f3ita de habilldad en ef uso de Ia lengua IO9lesa no sea un obstaculo para Ia admisiOn y Ia particlpaCiOn en todos los programas educativos y yoc..- FOUND!! Male Blue Heeler on Ce ter St. Wearing collar, 90 - 517.1661 LOST A PET? Checl< with the City of Pa . is Animal Shelter first. 3rd H.E. & Clement R . LOST!! Adult, Male St. Bernard male Chocolate Lab pup in Direct. 903.784.7648 LOST!! BII< heifer cross. No.2 rl~ht ear, Bar F Brand Ie hip, Minter Area 903.65 . 2437 LOST!! Toy Min Pin, bll< & ta male. W. Terrell & 8th t in Cooper. ID chip. 90 . 243.1768, leave message LOST!! White tace heiter .fro Emberson July '9th. 90 - 784-5006 LOST!! Would the young lad who found our cell phon on Pine Mill Road, July , call 903-346-3560. 235 Public Notices NOTICE CLASSIFIED POUCIES ERRORS & GENERAL POUCIES The Paris News advertisin policies are Intended t create reader confidenc In ethical advertising. reserve the right to edit. ter or decline any adve . tisement. We accomm .' date advertisers reques whenever possible; ho . ever, position can not b guaranteed. The Par News assumes no finanei I respo~sibifity tor typo . ~, POBo! , ~ P~ " ...from prevl. I sion ot COP) errors or on not ~ce~d It; attributable space. Plea~' classified ad i Credit Is alto' first insertion' tisers, adverti' or agents wit: ability for aë; published an. sume any an~ bility tor Clal) theretrom a9' is News, It I rains an erro' ty The Paris! tied Departr business hoc' at (903) 78S: 9 a,m, otth' insertion ot 'i you for your~ NORTH L: offers career ~ education pro!, ture, BuSIness" cation, Health~ ogy. Family a~~ ence Technol"'. dustrial Educa5 Education. ancl, cation, AdmiSJI grams Is base' propriate, age~ class space 4 It Is Che policy! ISD not to disc: basis of race,! origin, sex or vocational prQ¡ or activities req, of the Civil Ri( as amended: 11; ucation AmerlC' and Section 50' itation Act or ... ed. ' ~ " North Lamar IS' to assure t/1a!1 ~~~at%...~Jcjn! patton In, al:j vocau~nalJt'l For Informati¡ rightS or grievl, contact the TI. tor, Tommy Fe', ISO, 3201 L...~ 75462, /90313 or the Sectlo~ fS~I~2~~~"" 75462, 903~t; North Lamar fera y Ios pf ' cacl6n de fa ~ Agricuftura, lJ:J ~~N.;¡~'fa°d'e Salud, en fa FfJ rogla de la Oet¡ dor. en eJ 'Cont¡ dOn de InduS1l'! cion de la TõåI EducaciOn qUi', mlslOn a e, st,~Ci', basa en el g edad apropla, pado de dase. ", " Es la norma ISO para no de Ia carrera.-¡" naclonaI. et WI! ]a en 1U1 'p~ nales. Ios ~ 235 i I ~OFPt.1EXAS PROPosj LETTER YEAR ENDING SE TEMBER 30, 2004 I I I i i I I I I I I I I i I f MCCLANAHAN AND HOLMES, LLP CERTIFIED PUBLIC ACCOUNTANTS R, FRANK RAY, CPA R. E. BOSTWICK, CPA STEVEN W, MOHUNDRO, CPA GEORGE H, STRUVE, CPA ANDREW B, REICH, CPA ~ Paris, Texas August 10, 2 04 Honorable Mayor and Members of the City Council City of Paris Paris, Texas 228 SIXTH STREET, S,E, PA IS, TEXAS 75460 903-784.4316 F X 903.784.4310 30 WEST CHESTNUT DEN SON, TEXAS 75020 903.465.6070 F X 903.465-6093 14 WEST RUSSELL BO HAM, TEXAS 75418 903.583.5574 X 903.583.9453 In response to your request for a proposal for the audit of the general purpose [mancial statements of th City of Paris, Texas (the City), for the year ending September 30, 2004, we shall appreciate your consideration of cClanahan and Holmes, LLP, for the performance of the engagement. This proposal is based on a report format in acco dance with the [mancial reporting described in the GASB Statement No, 34 and information for a Comprehensive ual Financial Report. , If engaged, we will audit the financial statements of the City as of and for the year ending September 30, 004. Also, the, document we submit to you will include the following additional information that will be subjected to the auditing procedures applied in our audit of the [mandaI statements: combining and individual fund and account group [mandaI statements and schedules; supplemental data; and the schedule of expenditures of federal awards, The do ument will also include statistical data that will not be subject to the auditing procedures applied in our audit of the [ma cial statements and for which our auditors' report will disclaim an opinion. Audit Objectives The objective of our audit will be the expression of an opinion about whether your financial state ents are fairly presented, in all material respects, in confonnity with accounting principles generally accepted in the cited States of America and to report on the fairness pf the additional information referred to in the first paragraph wh n considered in relation to the financial statements taken as a whole. The objective will also include reporting on: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS City of Paris August 10, 2004 Page 2 Audit Objectives (Continued) Internal control related to the financial statements and compliance with laws, regulations, and e provisions of contracts or grant agreements, noncompliance with which could have a material effect n the financial statements in accordance with Government Auditing Standards, Internal control related to major programs and an opinion (or disclaimer of opinion) on comp' ance with laws, regulations, and the provisions of contracts or grant agreements that could have a direct and aterial effect on each major program in accordance with the Single Audit Act Amendments of 1996 and OMB ircular A-133, Audits of States. Local Governments. and Non-Profit Organizations, The reports on internal control and compliance will each include a statement that the report is intended fo the infonnation and use of management, specific legislative or regulatory bodies, federal awarding agencies, and if pplicable, pass- through entities and is not intended to be and should not be used by anyone other than these specified part es, ;f If engaged, our audit will be conducted in accordance with auditing standards generally accepted in the United States of America; the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the Single Audit Act Amendments of 1996; and the provisions of Circula A-133 and will include tests of accounting records, a determination of major program(s) in accordance with Circular -133, and other procedures we consider necessary to enable us to express such an opinion and to render the require reports, If our opinion on the financial statements or the Single Audit compliance opinion is other than unqualified, we'll fully discuss the reasons with you in advance, If, for any reason, we are unable to complete the audit or are unable to fonn or have not fonned an opinion, we may decline to express an opinion or to issue a report asa result of the engagemen . Management Responsibilities Management is responsible for establishing and maintaining internal control and for compliance with he provisions of contracts, agreements, and grants, In fulfilling this responsibility, estimates and judgments by manageme t are required to assess the expected benefits and' related costs of the controls, The objectives of internal contro are to provid,e management with reasonable, but not absolute, assurance that assets are safeguarded against loss from u uthorized use or disposition, that transactions are executed in accordance with management's authorizations and rec ded properly to permit the preparation of financial statements in accordance with generally accepted accounting p , ciples, and that federal award programs are managed in compliance with applicable laws and regulations al1d the provi ions of contracts and grant agreements, Management is responsible for making all fmancial records and related infonnation available to us, e understand that you will provide us with such infonnation required for our audit and that you are responsible for e accuracy and completeness of that infonnation, We will advise you about appropriate accounting principles and the application and will assist in the preparation of your financial statements, including the schedule of expenditures of fi deral awards, but the responsibility for the financial st¡;¡.tements remains with you, That responsibility includes the stablishment and maintenance of adequate records and effective internal control over financial reporting and compliance the selection and application of accounting principles, and the safeguarding of assets. Management is responsible for adj ting the fmandal statements to correct material misstatements and for confmning to us in the representation letter that e effects of any McCLANAHAN AND HOLMES. LLP City of Paris August 10, 2004 Page 3 Management Responsibilities (Continued) uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest eriod presented are immaterial, both individually and in the aggregate, to the [mancial statements taken as a whole. Additionally, as required by OMB Circular A-B3, it is management's responsibility to follow up and take corrective a tion on reported audit findings and to prepare a summary schedule of prior audit findings and a corrective action pia. The summary schedule of prior audit [mdings should be available for our review prior to issuing our tentative draft. Management is also responsible for preparation of management's discussion and analysis, Audit Procedures - General An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the [m ncial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas 0 be tested. We will plan and perform the audit to obtain reasonable rather than absolute assurance about whether the [m ncial statements are free of material misstatement, whether caused by error or fraud, As required by the Single Audit Ac Amendments of 1996 and OMB Circular A-B3, our audit will include tests of transactions related to major federal aw rd programs for compliance with applicable laws and regulations and the provisions of contracts and grant agreements, B cause an audit is designed to provide reasonable, but not absolute assurance and because we will not perform a detailed amination of all transactions, there is a risk that material errors, fraud, other illegal acts, or noncompliance may exist an not be detected by us, In addition, an audit is not designed to detect immaterial errors, fraud, or other illegal acts or illeg I acts that do not have a direct effect on the financial statements or to major programs, However, we will inform the ap ropriate level of management of any material fraud that comes to our attention, Any fraud that involves senior manage ent or is material to the financial statements that comes to our attention will be reported directly to the City Council. W will also inform you of any other illegal acts that come to our attention, unless clearly inconsequential. We will include s ch matters in the reports required for a Single Audit. Our responsibility as auditors is limited to the period covered by 0 audit and does not extend to any later periods for which we are not engaged as auditors. . Our procedures will include tests of documentary evidence supporting the transactions recorded in the ccounts and may include tests of the physical existence of inventories and direct confmnation of receivables and certa' other assets and liabilities by correspondence with selected individuals, creditors, and [mancial institutions. We wi I request written representations from your attorneys as part of the engagements, and they may bill you for responding 0 this inquiry. At the conclusion of our audit, we will also request certain written representations from you about the fi ancial statements and related matters, Audit Procedures - Internal Controls If engaged, in plarming and performing our audit, we will consider the internal control sufficient to plan the audit in order to determine the nature, timing, and extent of our auditing procedures for the purpose of expressing 0 opinions on the City's general purpose financial statements and on its compliance with requirements applicable to major rograms, We will obtain an understanding of the design of the relevant controls and whether they have been pI ced in operation, and we will assess control risk. Tests of controls may be performed to test the effectiveness of certain controls that we McCLANAHAN AND HOLMES. LLP City of Paris August 10, 2004 Page 4 Audit Procedures - Internal Controls (Continued) consider relevant to preventing and detecting errors and fraud that are material to the fmancial sta ments and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that ha e a direct and material effect on the financial statements, Tests of controls relative to the fmancial statements are r quired only if control risk is assessed below the maximum level. Our tests, if performed, will be less in scope than wou d be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed in our report on nternal control issued pursuant to Government Auditing Standards. ' As required by OMB Circular A-B3, we will þerform tests of controls to evaluate the effectiveness of the design and operation of controls that we consider relevant to preventing or detecting material noncompliance 'th compliance requirements applicable to each major federal award program, However, our tests will be less in scope than would be necessary to render an opinion on those controls and, accordingly, no opinion will be expressed in our re ort on internal control issued pursuant to OMB Circular A-B3, '.t An audit is not designed to provide assurance on internal control or to identify reportable conditions. H wever, we will inform you of any matters involving internal control and its operation that we consider to be reportable c nditions under standards established by the American Institute of Certified Public Accountants, Reportable conditions' volve matters coming to our attention relating to significant deficiencies in the design or operation of the internal con 01 that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report fmancial data consistent with the assertions of administration in the fmancial statements, We will also inform you of any nonrepo able conditions or other matters involving internal control, if any, as required by OMB Circular A-B3, Audit Procedures - Compliance If engaged, our audit will be conducted in accordance with the standards referred to in the section titled A dit Objectives, As part of obtaining reasonable assurance about whether the financial statements are free of material 'sstatement, we will perfol:m tests of the City's compliance with applicable laws and regulations and the provisions f contracts and agreements, including grant agreements, However, the objective of those procedures will not be to provi e an opinion on overall compliance and we will not express such an opinion in our report on compliance issued pursuant to Government Auditing Standards, OMB Circular A-B3 requires that we also plan and perform the audit to obtain reasonable assurance a out whether the City has complied with applicable laws and regulations and the provisions of contracts and grant agreeme ts applicable to major programs, Our procedures will consist of the applicable procedures described in the OMB Circular A-B3 Compliance Supplement for the types of compliance requirements that could have a direct and material ffect on each of the City's major programs. The purpose of those procedures will be to express an opinion on the City's ompliance with requirements applicable to each of its major programs in our report on compliance issued pursuant to 0 B Circular A. 133. Audit Adnñnistration. Fees. and Other We encourage our clients to adopt the procedure of having their personnel prepare working papers and nalyses for use during the audit in order to minimize the clerical activities of our professional staff and resulting added co t. If engaged, a list of work papers will be furnished which can be prepared by your personnel prior to'the fmal field work. McCLANAHAN AND HOLMES. LLP City of Paris August 10, 2004 Page 5 Audit Administration. Fees. and Other (Continued) At the conclusion of the engagement, we will complete the appropriate sections of and sign the Data Colle tion Form that summarizes our audit findings, We will provide copies of our reports to the City; however, it is manage ent's responsi- bility to submit the reporting package (including financial statements, schedule of expenditures of ederal awards, summary schedule of prior audit findings, auditors' reports, and a corrective action plan) along with the ata Collection Form to the designated federal clearinghouse and, if appropriate, to pass-through entities. The Data CoIl tion Form and the reporting package must be submitted within the earlier of 30 days after receipt of the auditors' reports or nine months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or over' ght agency for audit. At the conclusion of the engagement, 'We will provide information to management as to wher the reporting packages should be submitted and the number to submit. The workpapers for this engagement are the property of McClanahan and Holmes, LLP, and will consti te confidential information. However, pursuant to authority given by law or regulation, we may be reijuested to make ce ain workpapers available to a federal or state agency providing direct or indirect funding, or the United States General Ac ounting Office for purposes of a quality review of the audit, to resolve audit findings, or to carry out oversight responsib lities. We will notify you of any such requests. If requested, access to such workpapers will be provided under the supervision of McClanahan and Holmes, LLP personnel. Furthermore, upon request, we may provide photo cop es of selected workpapers to the aforementioned parties, These parties may intend, or decide, to distribute the hotocopies or information contained therein to others, including other governmental agencies, The workpapers for this engagement will be retained for a minimum of three years after the date the a issued or for any additional period requested by the cognizant or oversight agency for audit or pass-thro are aware that a federal awarding agency, pass-through entity, or auditee is contesting an audit fmding, we party(ies) contesting the audit finding for guidance prior to destroying the workpapers, itors' report is h entity. If we 11 contact the McClanahan and Holmes, LLP originated from the public accounting practice opened in Paris in 19 2 by Mr. F. I. McClanahan, The fmn has grown to a five officer professional limited liability partnerslúp with operating ffices in Paris, , Bonham, and Denison, Our fmn consists of eleven certified public accountants, five professional perso el, and several para-professionals and clerical personnel who have extensive experience. Attachments list current clien s for wlúch we provide similar audit services and provide the education and experience of professional audit personnel ost likely to be assigned to the audit. Based on our understanding of the audit work required and our evaluation of your books and records, we would estimate that the fee for the engagement would not exceed $42,500 plus out-of-pocket expenses (such as report rep oduction costs, postage, etc), As competitive bidding by licensed certified public accountants is not permitted by s te law, this is considered a fee estimate and as such, we will not be bound to provide the proposed services for the est' ted amount. Our estimated fee for these services is based on the following rates and estimated hours of professional t' e. It should be noted that this fee is an estimate and the actual fee billed will be based on our standard billing rates an the number of hours necessary to complete the required scope of work. McCLANAHAN AND HOLMES, LLP City of Paris August 10, 2004 Page 6 Audit Adnúnistration. Fees. and Other (Continued) Position Officer In-Charge Staff Clerical Total Rate $ 140 $ 100 $72 - 88 $ 36 Hours 30 250 450 --12Q ~ If the City requests additional work or services Ift>t within the general scope of this proposal, that work wo ld be billed at our normal rates, Requests for additional work or services beyond the general scope of this proposal m st be made in writing before the beginning of field work, and appropriate rates would be negotiated, If engaged, we would expect our preliminary work to begin prior to year end and our f11)al field work to beg shortly after your records are closed out for the year, We would make every effort to deliver our report within . ety days after September 30, 2004, and would bill for the entire engagement after the report is delivered. We would pr vide as many copies of the report as needed, Government Auditin~ Standards require that we provide you with a copy of our most recent quality control review report. Our 2003 peer review report accompanies this letter. Should you want additional infonnation or should you want us to appear before the City Council, please 1 t us know. If you agree with the tenns of the engagement as described in this proposal, please sign the second copy and r turn it to us. jIJtk t(A~~e(4/¡ ~ /1 tÞlVUf, L t McClanahan and Holmes, LLP Certified Public Accountants RESPONSE: This letter correctly sets forth the understanding of the City of Paris, Texas. By: Signature Title: Date: McCLANAHAN AND HOLMES. LLP City of Paris August 10, 2004 Supplemental Information Following is a brief resume of our professional personnel most likely to be assigned to the engagement All Certified Public Accountants in the firm are members of the American Institute of Certified Public Accountants, th Texas Society of Certified Public Accountants, and the Dallas Chapter of the TSCPA. The fum is also a membe of the Texas Management Group, a consortium of public accounting firms organized for the purpose of sharing exp rtise and ideas with like-minded firms, Andrew B. Reich graduated from East Central Oklahoma State University (B.S,-Accounting 1985). He was employed by the firm in 1985, received his certificate in 1990, and became an officer in 1992. He practices primarily in the audit area of our fum and has several years of governmental audit experience. An y would serve as engagement officer for this audit. - Thomas Hensel graduated from Midwestern University (B,B,A.-Accounting 1966). He received his ertificate in 1969, was employed by the firm in 1976, and was an officer from 1979 through 1996. From 1 66 until 1976 he was employed by Peat, Marwick, Mitchell, & Co" Certified Public Acsountants, in their F rt Worth and Austin offices in the audit area, He practices primarily in the audit area of the fum and has s gnificant experience in governmental auditing, including formerly serving as engagement officer on the majo ty of our governmental audits, Tom would continue to serve as in-charge auditor for this audit. Elaine Wroten graduated from Baylor University (B.B,A.-Accounting 1979), She received her ce 'ficate in 1981 and was employed by the firm in 1998. From 1979 through 1994 she was employed by othe certified public accountants, and she worked in private industry from 1994 to 1998. Rebecca L. Sikes graduated from Texas A & M University - Commerce (B,B.A,-Accounting 200 ) and has been employed by our firm since July 2000. McCLANAHAN AND HOLMES. LLP City of Paris August 10, 2004 Supplemental Information We currently provide auditing services for the following governmental entities, most of which require special reports because of federally financed programs. Bonham Independent School District Paris Junior College City of Bailey City of Bonham City of Denison City of Deport City of Detroit City of Dodd City City of Honey Grove City of Leonard City of Paris City of Savoy City ofTr~nton Bois d' Arc Municipal Utility District Lamar County Water Supply District Southwest Fannin Special Utility District ?t Other audit clients include financial institutions, manufacturing companies, cooperatives, escrow funds of 'tIe companies, non-profit organizations, and other types of entities, McCLANAHAN AND HOLMES. LLP ~"')" GRIER '~" , REEVES ,Ii. & LAWLE~ P.c. CERTIFIED PUBLIC ACCOUNTANTS 3424 Texas Boulevard 903.793.5695 Texarkana, Texas 75503-3248 ax 903.794.2112 mail@grlcpa.co MEMBER OF THE AME ICAN INSTITUTE OF CERTIFIED PUBLI ACCOUNTANTS To the Officers McClanahan and Holmes, PLLC We have reviewed the system of quality control for the accounting and auditing practi e of McClanahan and Holmes, PLLC (the firm) in effect for the year ended March 31, 2003. A syste of quality control encompasses the firm's organizational structure and the policies adopted and procedu es established to provide it with reasonable assurance of conforming with professional standards. The ements of quality control are described in the Statements on Quality Control Standards issued by the A erican Institute of Certified Public Accountants (AICPA). The design of the system and complianc with it are the responsibility of the firm. Our responsibility is to express an opinion 00 the design of th system, and the firm's compliance with the system based on our review. Our review was conducted in accordance with standards established by the Peer Re iew Board of the AICPA. In performing our review, we obtained an understanding of the system of qu lity control for the firm's accounting and auditing practice. In addition, we tested compliance with the fir's quality control policies and procedures to the extent we considered appropriate. These tests covered the application of the firm's policies and procedures on selected engagements. Because our review was ased on selective tests, it would not necessarily disclose all weaknesses in the system of quality control r all instances of lack of compliance with it. Because there are inherent limitations in the effectiveness of any system of quality c ntrol, departures from the system may occur and not be detected. Also, projection of any evaluation of system of quality control to future periods is subject to the risk that the system of quality control may be me inadequate because of changes in conditions or because the degree of compliance with the polic es or procedures may deteriorate. ' , In our opinion, the system of quality control for the accounting and auditing practice of McClanahan arid Holmes, PLLC, in effect for the year ended March 31, 2003, has been designed to mee the requirements of the quality control standards for an accounting and auditing practice established by e AICP A and was complied with during the year then ended to provide the firm with reasonable assura ce of conforming with professional standards. ~J~l ,/e. August19,2003