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HomeMy Public PortalAbout2021-37 Approving a one year extension with MARCUM, LLP for auditing servicesRE SOLUTION NO. 2021-37 A RE SOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF KEY BISCAYNE, FLORIDA, APPROVING A ONE YEAR EXTENSION TO THE ENGAGEMENT AGREEMENT WITH MARCUM, LLP FOR ANNUAL AUDITING SERVICES IN AN AMOUNT NOT TO EXCEED $63,000 AND ADDITIONAL AUDIT SERVICES ON AN AS NEEDED BASIS; PROVIDING FOR AUTHORIZATION; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the Village of Key Biscayne ("Village") is required to have an independent certified public accountant conduct an annual financial audit of Village accounts and records in accordance with Section 218.39, Florida Statutes; and WHEREAS, in order to ensure compliance with Florida audit requirements and deadlines, the Village wishes to renew its agreement with Marcum, LLP ("Consultant") to provide auditing services for Fiscal Year 2021; and WHEREAS, accordingly, the Village Council desires to approve the Auditing Services Renewal Engagement Agreement with the Consultant in substantially the form attached hereto as Exhibit "A" (the "Agreement"); and WHEREAS, the Village Council finds that this Resolution is in the best interest and welfare of the residents of the Village. NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE VILLAGE OF KEY BISCAYNE, FLORIDA, AS FOLLOWS: Section 1. Recitals. That each of the above-stated recitals are hereby adopted, confirmed, and incorporated herein. Section 2. Approval. That the Village Council approves the Agreement m substantially the form attached hereto as Exhibit "A." Page I of2 Section 3. Authorization. That the Village Council hereby authorizes the Village Manager to execute the Agreement, in substantially the form attached hereto as Exhibit "A," in an amount not to exceed budgeted funds, subject to the approval of the Village Attorney as to form, content, and legal sufficiency. Section 4. adoption. Effective Date. That this Resolution shall be effective immediately upon PASSED and ADOPTED this 24th day of A ...... u..._g=us=t , 2021. ATTEST: ~0~'0¥'.-:orb .JOCLYN8.CH VILLAGE CLERK APPROVED AS TO FORM AND LEGAL SUFFICIENCY: ~p~ WEISS SEROTA HELFMAN COLE & BIERMAN, P.L. VILLAGE ATTORNEY Page 2 of2 MAR CUM July l 9, 2021 ACCOUNTANTS" ADVISORS Honorable Mayor and Village Council c/o Steven Williamson, Village Manager Village of Key Biscayne, Florida 88 West McIntyre Street Key Biscayne, Florida 33 149 Re: Engagement of Marcum LLP We are pleased to confirm our understanding of the services Marcum LLP ("Marcum," the "Firm," "we," "us" or "our") are to provide Village of Key Biscayne, Florida (the "Organization", "Village", "you" or "your") for the year ended September 30, 2021. W e will audit the financial statements of the governmental activities, the business-type activities, 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 Village of Key Biscayne, Florida as of and for the year ended September 30, 2021. 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), Budgetary Comparison Schedules, Pension related Schedules and OPEB Schedule, to supplement Village of Key Biscayne's basic financial statements. Such information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. As part of our engagement, we will apply certain limited procedures to Village'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: I) Management's Discussion and Analysis 2) Schedule of Changes in Village's Net Pension Liability and Related Ratios 3) Schedule of Village Contributions - Pensions 4) Schedule of Investment Returns- Pensions 5) Schedule of Changes in Total OPEB Liability and Related Ratios 6) Budgetary Comparison Schedules We have also been engaged to report on supplementary information other than RSI that accompanies Village of Key Biscayne's financial statements. We will subject the following supplementary information to the auditing procedures applied in our audit of the basic 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 !Ml MARCUM GROUP MEMBER Marcum LLP ■ One Southeast Third Avenue • Suite 1100 • Miami, Florida 33131 • Phone 305.995.9600 • Fax 305.995.9601 • www.marcumllp.com V ill age of K ey B iscayn e, F lorid a July 19, 2021 Page 2 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 basic financial statements as a whole: 1) Budgetary Comparison Schedule - Capital Improvements Fund 2) Schedule of Expenditures of Federal Awards and State Financial Assistance, as applicable The following other information accompanying the basic financial statements will not be subjected to the auditing procedures applied in our audit of the financial statements, and our auditors' report will not provide an opinion or any assurance on that other information. 1) Introductory Section 2) Statistical Section Audit Objectives The objective of our audit is the expression of opinions as to whether your basic financial statements are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles and to report on the fairness of the supplementary information referred to in the second paragraph when considered in relation to the financial statements as a whole. The objective also includes reporting on: • Internal control over financial reporting and compliance with provisions of laws, regulations, contracts, and award agreements, noncompliance with which could have a material effect on the financial statements in accordance with Government Auditing Standards. • Internal control over compliance related to major programs and an opinion ( or disclaimer of opinion) on compliance with federal statutes, regulations, and the terms and conditions of federal awards that could have a direct and material effect on each major program in accordance with the Single Audit Act Amendments of 1996 and Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and the Florida Single Audit Act and Chapter I 0.550, Rules of the Auditor General of the State of Florida. • The Government Auditing Standards report on internal control over financial reporting and on compliance and other matters will include a paragraph that states that (1) the purpose of the report is solely to describe the scope of testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance, and (2) the report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. The Uniform Guidance and the Florida Single Audit Act report on internal control over compliance will include a V ill a g e o f K ey B iscay n e, F lo rid a July 19, 2021 Page 3 paragraph that states that the purpose of the report on internal control over compliance is solely to describe the scope of testing of internal control over compliance and the results of that testing based on the requirem ents of the U nifo rm G uidance and the Florida Single A udit Act. Both reports w ill state that the report is not suitable fo r any other purpose O ur audit w ill be conducted in accordance w ith auditing standards genera lly accepted in the U nited States of A m erica; the standards fo r financial audits contained in Government Auditing Standards, issued by the Com ptro ller G enera l of the U nited States; the Single Audit Act A m endm ents of 1996; and the pro visions of the U nifo rm Guidance, Florida Single A udit A ct and C hapter 10.550, Rules of the Auditor G enera l of the State of Fl orida, and w ill include tests of accounting records, a determ ination of m ajor pro gra m (s) or m ajor project(s) in accordance w ith the U nifo rm G uidance, Fl orida Single A udit A ct and Chapter I 0.550, R ules of the Auditor Genera l of the State of Florida and other pro cedures w e consider necessary to enable us to express such opinions. W e w ill issue w ritten reports upon com pletion of our Single A udit. O ur reports w ill be addressed to the H onora ble M ayor, V illage Council and V illage M anager. W e cannot pro vide assura nce that unm odifi ed opinions w ill be expressed. C ircum stances m ay arise in w hich it is necessary fo r us to m odify our opinions or add em phasis-of-m atter or other- m atter para gra phs. If our opinions on the financial statem ents or the Single A udit com pliance opinions are other than unm odifi ed, w e w ill discuss the reasons w ith you in advance. If, fo r any reason, w e are unable to com plete the audit or are unable to fo rm or have not fo rm ed opinions, w e m ay decline to express opinions or issue reports, or m ay w ithdra w fr om this engagem ent. Audit Procedures - General A n audit includes exam ining, on a test basis, evidence supporting the am ounts and disclosures in the financial statem ents; therefo re, our audit w ill involve judgm ent about the num ber of tra nsactions to be exam ined and the areas to be tested. A n audit also includes evaluating the appro priateness of accounting policies used and the reasonableness of signifi cant accounting estim ates m ade by m anagem ent, as w ell as evaluating the overa ll presentation of the financial statem ents. W e w ill plan and perfo rm the audit to obtain reasonable ra ther than absolute assura nce about w hether the financial statem ents are fr ee of m aterial m isstatem ent, w hether fr om (l) erro rs, (2) fr audulent financial report ing, (3) m isappro priation of assets, or ( 4) violations of law s or govern m ental regulations that are attributable to V illage of K ey Biscayne or to acts by m anagem ent or em ployees acting on behalf of V illage of Key Biscayne. Because the determ ination of w aste and abuse is subjective, Government Auditing Standards do not expect auditors to pro vide reasonable assura nce of detecting w aste and abuse. B ecause of the inherent lim itations ofan audit, com bined w ith the inherent lim itation of intern al contro l, and because w e w ill not perfo rm a detailed exam ination of all tra nsactions, an unavoidable risk that som e m aterial m isstatem ents or noncom pliance m ay exist and not be detected by us, even though the audit is pro perly planned and perfo rm ed in accordance w ith U .S. genera lly accepted auditing standards and Government Auditing Standards. In addition, an audit is not designed to detect im m aterial m isstatem ents or violations of law s or govern m ental Village of Key Biscayne, Florida July 19, 2021 Page 4 regulations that do not have a direct and material effect on the financial statements or major programs. However, we will inform the appropriate level of management of any material errors, 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 and of any material waste and abuse that comes to our attention. We will include such matters in the reports required for a Single Audit. Our responsibility as auditors is limited to the period covered by our 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 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 your responsibilities for the financial statements; schedule of expenditures of federal awards and state financial assistance, if applicable; federal award programs and state projects, if applicable; compliance with laws, regulations, contracts, and grant agreements; and other responsibilities required by generally accepted auditing standards and Government Auditing Standards. Audit Procedures - Internal Controls 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 basic 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 misstatements 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. As required by the Uniform Guidance, the Florida State Single Audit Act, and Chapter 10.550 Rules of the Auditor General, we will perform tests of controls over compliance to evaluate the effectiveness of the design and operation of controls that we consider relevant to preventing or detecting material noncompliance with compliance requirements applicable to each major federal and state 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 report on internal control issued pursuant to the Uniform Guidance, the Florida State Single Audit Act, and Chapter I 0.550 Rules of the Auditor General. Village of Key Biscayne, Florida July 19, 2021 Page 5 An audit is not designed to provide assurance on internal control or to identify significant deficiencies or material weaknesses. Accordingly, we express no such opinion. 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, Government Auditing Standards, and the Uniform Guidance, the Florida State Single Audit Act, and Chapter I 0.550 Rules of the Auditor General. Audit Procedures - Compliance As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of Village's compliance with provision of applicable laws, regulations, contracts, agreements, and grants. However, the objective of those procedures 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. Uniform Guidance, the Florida State Single Audit Act, and Chapter I 0.550 Rules of the Auditor General requires that we also plan and perform the audit to obtain reasonable assurance about whether the auditee has complied with applicable laws, regulations, and the terms and conditions provisions of contracts and grant agreements applicable to major programs. Our procedures will consist of tests of transactions and other applicable procedures described in the 0MB Compliance Supplement, the State of Florida Compliance Supplement, and Chapter I 0.550 Rules of the Auditor General for the types of compliance requirements that could have a direct and material effect on each of Village of Key Biscayne's major programs. The purpose of these procedures will be to express an opinion on Village of Key Biscayne's compliance with requirements applicable to each of its major programs in our report on compliance issued pursuant to the Uniform Guidance, the Florida State Single Audit Act, and Chapter I 0.550 Rules of the Auditor General. Management Responsibilities Management is responsible for (I) establishing and maintaining effective internal controls, including internal controls over compliance, and for evaluating and monitoring ongoing activities; to help ensure that appropriate goals and objectives are met; (2) following laws and regulations; (3) ensuring that there is reasonable assurance that government programs are administered in compliance with compliance requirements; and (4) ensuring that management and financial information is reliable and properly reported. Management is also responsible for implementing systems designed to achieve compliance with applicable laws, regulations, contracts, and grant agreements. You are also responsible for the selection and application of accounting principles; for the preparation and fair presentation of the financial statements, schedule of expenditures of federal awards and state financial assistance, and all accompanying information in conformity with U.S. generally accepted accounting principles; and for compliance with applicable laws and regulations and the provisions of contracts and grant agreements. Village of Key Biscayne, Florida July 19, 2021 Page 6 Management is also responsible for making all financial records and related information available to us and for the accuracy and completeness of that information. 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 also include identifying significant contractor relationships in which the contractor has responsibility for program compliance and for the accuracy and completeness of that information. Your responsibilities include adjusting the basic financial statements to correct material misstatements and confirming to us in the management 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 (I) management, (2) employees who have significant roles in internal control, and (3) others where the fraud or illegal acts could have a material effect on the financial statements. Your responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud affecting Village of Key Biscayne received in communications from employees, former employees, granters, regulators, or others. In addition, you are responsible for identifying and ensuring that Village of Key Biscayne complies with applicable laws, regulations, contracts, agreements, and grants. Management is also responsible for taking timely and appropriate steps to remedy fraud and noncompliance with provisions of laws, regulations, contracts, and grant agreements, or abuse that we report. Additionally, as required by the Uniform Guidance, the Florida Single Audit Act, and Chapter 10.550 Rules of the Auditor General, it is management's responsibility to follow up and take corrective action on reported audit findings and to prepare a summary schedule of prior audit findings and a corrective action plan. You are responsible for identifying all federal awards and state financial assistance received, if applicable, and understanding and complying with the compliance requirements and for the preparation of the schedule of expenditures of federal awards and state financial assistance (including notes and noncash assistance) in conformity with the Uniform Guidance, the Florida State Single Audit Act, and Chapter 10.550 Rules of the Auditor General. You agree to include our report on the schedule of expenditures of federal awards and state financial assistance in any document that contains and indicates that we have reported on the schedule of expenditures of federal awards and state financial assistance. You also agree to include the audited financial statements with any presentation of the schedule of expenditures of federal awards and state financial assistance that includes our report thereon OR make the audited financial statements readily available to intended users of the schedule of expenditures of federal awards and state financial assistance no later than the date the schedule of expenditures of federal awards and state financial assistance is issued with our report thereon. Your responsibilities include acknowledging to us in the written representation letter that (I) you are responsible for V ill a g e o f K ey B iscay n e, F lo rid a July 19, 2021 Page 7 presentation of the schedule of expenditures of federal awards and state financial assistance in accordance with the Uniform Guidance, the Florida Single Audit Act, and Chapter I 0.550 Rules of the Auditor General; (2) you believe the schedule of expenditures of federal awards and state financial assistance, including its form and content, is fairly presented in accordance with Uniform Guidance, the Florida Single Audit Act, and Chapter 10.550 Rules of the Auditor General; (3) 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 schedule of expenditures of federal awards and state financial assistance. You are also responsible for the preparation of the other supplementary information which we have been engaged to report on, in conformity 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) you believe the supplementary information, including its form and content, is fairly presented in accordance with GAAP; (3) 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. At the conclusion of the engagement, you will complete the appropriate sections of the Data Collection Form that summarizes our audit findings. It is management's responsibility to submit the reporting package (including financial statements, schedule of expenditures of federal awards, summary schedule of prior audit findings, auditors' reports, and corrective action plan) along with the Data Collection Form to the federal audit clearinghouse. We will coordinate with you the electronic submission and certification. If applicable, we will provide copies of our report for you to include with the reporting package you will submit to pass-through entities, if requested. The Data Collection Fo rm 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 oversight agency for audits. Management is responsible for establishing and maintaining a process for tracking the status of audit findings and recommendations. Management is also responsible for identifying and providing report copies of 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 studies. You are also responsible for providing management's views on our current findings, V ill age of K ey B iscayn e, F lorid a July 19, 2021 Page 8 conclusions, and recommendations, as well as your planned corrective actions, for the report, and for the timing and format for providing that information. You agree to assume all management responsibilities relating to the financial statements, schedule of expenditures of federal awards and state financial assistance, related notes, the preparation of the data collection form, if applicable, and any other nonaudit/nonattest services we provide. These nonaudit/nonattest services do not constitute an audit under Government Auditing Standards and such services will not be conducted in accordance with Government Auditing Standards. We will perform these services in accordance with applicable professional standards. You will be required to acknowledge in the management representation letter our assistance with preparation of the financial statements, schedule of expenditures of federal awards and state financial assistance, and related notes and data collection form and that you have reviewed and approved the financial statements, schedule of expenditures of federal awards, state financial assistance, and data collection form if applicable, and related notes prior to their issuance and have accepted responsibility for them. Further, you agree to oversee the nonaudit/nonattest services by designating an individual, preferably from senior management, with suitable skill, knowledge, or experience; evaluate the adequacy and results of those services; and accept responsibility for them. Professional standards prohibit us from being the sole host and/or the sole storage for your financial and non-financial data. As such, it is your responsibility to maintain your original data and records and we cannot be responsible to maintain such original information. If you are missing any documents or work papers from our prior years' engagements (if applicable), it is your responsibility to inform us. By signing this engagement letter you affirm that you have all the data and records required to make your books and records complete. We will provide copies of our reports. to the Village Mayor, Village Council and Village Manager, Unless restricted by law or regulation, or containing privileged and confidential information, copies of our reports are to be made available for public inspection. With regard to the electronic dissemination of audited financial statements, including financial statements published electronically on your website, you understand that electronic sites are a means to distribute information and, therefore, we are not required to read the information contained in these sites or to consider the consistency of other information in the electronic site with the original document. Communication with Those Charged with Governance As part of our engagement, we are responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process as well as other matters we believe should be communicated to those charged with governance. Generally accepted auditing standards do not require the auditor to design procedures for the purpose of identifying other matters to communicate with those charged with governance. Such matters include, but are not limited to, (1) the initial selection of and changes in significant accounting policies and their application; (2) the process used by Village of Key Biscayne, Florida July 19, 2021 Page 9 management in formulating particularly sensitive accounting estimates and the basis for our conclusions regarding the reasonableness of those estimates; (3) all passed audit adjustments; (4) any disagreements with management, whether or not satisfactorily resolved, about matters that individually or in the aggregate could be significant to the financial statements or our report; (5) our views about matters that were the subject of management's consultation with other accountants about auditing and accounting matters; (6) major issues that were discussed with management in connection with the retention of our services, including, among other matters, any discussions regarding the application of accounting principles and auditing standards; (7) serious difficulties that we encountered in dealing with management related to the performance of the audit; and (8) matters relating to our independence as your auditors. Reproduction of Auditors' Report If you intend to publish or otherwise reproduce the financial statements and make reference to our Firm, you agree to provide us with printers' proofs or masters for our review and approval before printing. You also agree to provide us with a copy of the final reproduced material for our approval before it is distributed. In addition, to avoid unnecessary delay or misunderstanding, it is important that you give us timely notice of your intention to issue any such document. With regard to the electronic dissemination of the Village's annual financial statements, including financial statements published electronically on the Village's website, we are not required to read the information contained in those sites or to consider the consistency of other information in the electronic site with the original document. If the Village elects to issue public debt and not have us associated with the proposed offering, we agree that our association with the proposed offering is not necessary providing that the Village agrees to clearly indicate that we are not associated with the contents of any such official statement or memorandum. The Village agrees that the following disclosure will be prominently displayed in any such official statement or memorandum. Marcum LLP has not been engaged to perform, and has not performed, since the date of its report included herein, any procedures on the financial statements addressed in that repo11. Marcum LLP, also has not performed any procedures relating to this official statement. Assistance By Your Personnel We will ask that your personnel, to the extent possible, prepare required schedules and analyses, and make selected invoices and other required documents available to our staff. This assistance by your personnel will serve to facilitate the progress of our work and minimize our time requirements. Village of Key Biscayne, Florida July 19, 2021 Page 10 You acknowledge that your confidential information may be transmitted to us through an information portal or delivery system established by us or on our behalf. You shall notify us in writing of your employees, representatives, or other agents to be provided access to such portal or system; upon the termination of such status, you shall immediately notify us in writing. You acknow ledge that you are responsible for the actions of your current and former employees, representatives, or other agents in connection w ith the transmission of your information. Background Checks A s a m atter of Firm policy, w e m ay perfo rm backgro und checks on potential clients and/or on existing clients, on an as-determ ined basis. T he term s and conditions of this engagem ent are expressly contingent upon the satisfa ctory com pletion of our investigatory pro cedures and w e reserve the right to w ithdra w from any relationship should info rm ation w hich w e deem to be adverse com e to our attention. T he results of all backgro und checks and other investigatory pro cedures are subm itted to, and review ed by, our Firm 's C lient A cceptance C om m ittee. Independence Pro fe ssional standards require that a firm and its m em bers m aintain independence thro ughout the dura tion of the pro fe ssional relationship w ith a client. In order to preserve the integrity of our relationship, no offer of em ploym ent shall be discussed w ith any M arcum pro fessionals assigned to the audit, incl uding w ithin the one year period prior to the com m encem ent of the year-end audit. Pur suant to pro fessional standards, should such an offer of em ploym ent be m ade, or em ploym ent com m ences dur ing the indicated tim e period, w e w ill consider this an indication that our independence has been com pro m ised. A s such, w e m ay be required to recall our auditors' report due to our lack of independence. In the event additional w ork is required to satisfy independence requirem ents, such w ork w ill be billed at our standard hourl y ra tes. Furtherm ore, w e strive to m aintain a staff of quality, tra ined pro fessionals. In recognition of the investm ent w e have m ade to recru it and develop our personnel, you agree to the fo llow ing. In the event that any of our em ployees accepts a position of em ploym ent w ith your O rganization, or any of its related parties or affiliates at any tim e w hile w e are perfo rm ing services fo r you or w ithin one year thereaft er, irrespective of w hether they've w orked on your account or not, you agree to pay us a placem ent fee equal to the em ployee's annual com pensation in effect on the date such em ploym ent w as contra cted. Such fee is payable w hen the em ployee accepts such a position. Confidentiality/Access to Working Papers T o the extent that, in connection w ith this engagem ent, M arcum com es into possession of your pro prietary or confi dential info rm ation, M arcum w ill not, except as described herein, disclose such info rm ation to any third party w ithout consent, except (a) as m ay be required by law , regulation, judicial or adm inistra tive pro cess, or in accordance w ith applicable pro fe ssional Village of Key Biscayne, Florida July 19, 2021 Page 11 standards, or in connection with litigation pertaining to the subject matter of this engagement letter, or (b) to the extent such information (i) shall have otherwise become publicly available (including, without limitation, any information filed with any governmental agency and available to the public) other than as the result of a disclosure by Marcum in breach hereof, (ii) is disclosed by you to a third party without substantially the same restrictions as set forth herein, (iii) becomes available to Marcum on a non-confidential basis from a source other than you, your employees or agents which Marcum believes is not prohibited from disclosing such information to Marcum by obligation to you, (iv) is known by Marcum prior to its receipt from you, your employees or agents without any obligation of confidentiality with respect thereto, or (v) is deve lo ped by M a rcum in d epend ently of any disclosures made by you or your employees or agents to M a rcu m of suc h in fo rm a tio n. Y o u autho riz e M a rcum to pa rticipate in discussions with and to disclo se yo u r in fo rm atio n to yo ur agents, representatives, ad ministrators or professional adv iso rs (i nc lu d in g acco un tants, att o rn ey s, financial and other professional advisors), their resp ectiv e offi cers, directo rs or em p loy ees, and other parties as you may direct. In addition, you acknowledge and agree that any such information that comes to the attention of Marcum in the co urse of perfo rm in g this eng agem ent may be considered and used by Marcum in the context of resp o nd ing to its pro fessio nal ob lig atio ns as yo ur in depende nt acco u ntants. T he w ork in g pa pers p rep ared in co nju nctio n w ith ou r eng ag em ent are the property of M arcum and con stitute co n fi d ential in fo rm atio n subject to the Pub lic R eco rds L aw s of the Flo rid a Statutes. T hese w o rk in g papers w ill be retain ed by us in acco rda nce w ith app licab le law s and w ith our Firm 's po lic ies and pro ced ures. H ow ever, w e m ay be req u ired , by law or reg ulatio n, to m a k e certain w o rk in g pa pers ava ilab le to reg u lato ry autho ritie s fo r their rev iew , and upo n req u est, w e m a y be req u ired to pro v ide such autho ritie s w ith pho toco p ie s of selected w ork in g papers. T he F irm is requ ired to und ergo a "P eer R ev iew " ev ery three years. D urin g the co urse of a Peer R ev iew eng ag em e nt, se lected w ork ing papers and fi n anc ia l repo rts, on a sa m p le basis, w ill be in sp ected by an outsid e party on a co nfi d ential basis. C o nseq ue ntly , the acco unting and/o r aud itin g w ork w e perfo rm ed fo r yo u m a y be selected . Y o ur sig nin g th is lett er represents yo ur ack no w led g em e nt and perm issio n to allo w such access sho u ld yo ur eng ag em e nt be selected fo r rev iew . A s a result of our prio r or fu ture services to yo u, w e m ay be req u ired or requ ested to pro v id e in fo rm atio n or do cu m e nts to yo u or a th ird-party in co nn ectio n w ith a leg al or adm in istra tiv e pro ceed in g (in c lu d in g a gra nd ju ry inv estig atio n) in w hich w e are no t a party . ff this occurs, w e shall be entitle d to co m p ensatio n fo r our tim e and reim b u rsem e nt fo r ou r reaso nab le out-o f- po ck et ex p end itures (in c lu d in g leg al fe es) in co m p ly in g w ith such req uest or dem a nd . T his is no t in tend ed, ho w ev er, to relieve us of our duty to ob serve the con fi d entiality req u irem ents of our pro fessio n . ~ - ----- V ill ag e o f K ey B iscay n e, F lo rid a July19,2021 Page 12 Third-Party Service Providers The Firm may, from time to time, and depending on the circumstances, use third-party service providers (such as Confirmation.com) to assist us with the audit of your financial statements. You agree that Marcum may provide confidential and other information Marcum receives in connection with this agreement to Subcontractors for such purposes. Marcum maintains internal policies, procedures and safeguards to protect the confidentiality of your information and Marcum will remain responsible for the work performed by such Subcontractors. Dispute Resolution Procedure, Waiver of Jury Trial and Jurisdiction and Venue for Any and All Disputes Under This Engagement Letter and Governing Law AS A MATERIAL INDUCEMENT FOR US TO ACCEPT THIS ENGAGEMENT AND/OR RENDER THE SERVICES TO THE ORGANIZATION IN ACCORDANCE WITH THE PROVISIONS OF THIS ENGAGEMENT LETTER: This Firm and the Village each hereby knowingly, voluntarily and intentionally waive any right either may have to a trial by jury with respect to any litigation based hereon, or arising out of, under or in connection with this engagement letter and/or the services provided hereunder, or any course of conduct, course of dealing, statements (whether verbal or written) or actions of either party. This Firm and the Village each expressly agree and acknowledge that the Circuit Court of the I Ith Judicial Circuit, in and for Miami-Dade County, Florida, and the United States District Court for the Southern District of Florida, shall each have exclusive and sole jurisdiction and venue for any respective state or federal actions arising from, relating to or in connection with this engagement letter, or any course of conduct, course of dealing, statement or actions of either party arising aper the date of this engagement letter. The terms and provisions of this engagement letter, any course of conduct, course of dealing and/or action of this Firm and/or the Village and our relationship with you shall be governed by the laws of the State of Florida to the extent said laws are not inconsistent with the Federal Securities Laws and Rules, Regulations and Standards there under. We acknowledge your right to terminate our services at any time, and you acknowledge our right to resign at any time (including instances where in our judgment, our independence has been impaired or we can no longer rely on the integrity of management), subject in either case to our right to payment for all direct and indirect charges including out-of-pocket expenses incurred through the date of termination or resignation or thereafter as circumstances and this agreement may require, plus applicable interest, costs, fees and attorneys' fees. You agree that our liability arising out of our services provided shall not exceed the total amount paid for the services described herein. This shall be your exclusive remedy. V ill age of K ey B iscayn e, F lorid a July 19, 2021 Page 13 No action, regardless of form, arising out of the services under this agreement may be brought by either party more than one year after the date of the last services provided under this agreement. The Village hereby indemnifies Marcum and its partners, principals, and employees, and holds them harmless from all claims, liabilities, losses, and costs arising in circumstances where there has been a known or intentional misrepresentation by a member of the Village's management, regardless of whether such person was acting in the Village's interest. This indemnification will survive termination of this letter of engagement. Other Services We will perform, in accordance with Chapter 10.550, Rules of the Auditor General of the State of Florida, an examination pursuant to AICPA Professional Standards, promulgated by the American Institute of Certified Public Accountants regarding the compliance of the Village of Key Biscayne's with 218.415, Florida Statutes, Local Government Investment Policies. There is no additional cost for this service. We are always available to meet with you and/or other management personnel at various times throughout the year to discuss current business, operational, accounting and auditing matters affecting your Organization. Whenever you feel such meetings are desirable please let us know; we are prepared to provide services to assist you in any of these areas. We will be pleased, at your request to attend your Council meeting(s). Timeline Marcum 's engagement ends on the earlier of termination (including without limitation, our resignation or declining to issue a report or other work product) or Marcum's delivery of its report. Any follow-up services that might be required will be a separate, new engagement. The terms and conditions of that new engagement will be governed by a new, specific engagement letter for that service. Fees Our fee will be based on the actual time required of our personnel at our discounted hourly rates. Our discounted hourly rates vary according to the level of the personnel assigned to your engagement. Our invoices for these fees will be rendered as the work progresses, and are due and payable upon presentation. In the event that you dispute any of the fees or expenses on a specific invoice, you agree to notify us within twenty (20) days of receipt of the invoice of such dispute. If you fail to notify us within the twenty (20) day period, your right to dispute such invoice will be waived. Prior to the commencement of the services described above, any past due balances are required to be paid in full. In accordance with our Finn policies, should any invoice remain unpaid for more than thirty (30) days, we reserve the right to defer providing any additional services until all outstanding invoices are paid in full. Amounts past due sixty (60) days from the invoice date will incur a finance charge of 1 % per month. Nothing herein shall be V ill age of K ey B iscayn e, F lorid a July 19, 2021 Page 14 construed as extending the due date of payments required under this agreement, and you agree that we are not responsible for the impact on the Village of any delay that results from such non- payment by you. As a result of our planning process, we believe that the above described professional services (excluding any Federal and State single audit requirements) can be completed for an estimated fee of $63,000 for the year ended September 30, 2021 (same fee as fiscal years 2020 and 2019). The estimate of our fees is based on certain assumptions. To the extent that certain circumstances including, but not limited to those listed in Appendix A, arise during the engagement, our fee estimate may be significantly affected and additional fees may be necessary. Additional services provided beyond the described scope of services will be billed separately. If the Village is required to undergo a single audit in accordance with the Federal Single Audit Act Amendments of 1996 and the provisions of the Uniform Guidance and/oj Florida Single Audit in accordance with the Florida Single Audit Act and Chapter I 0.550 Rules of the Auditor General of the State of Florida, we will discuss with you the additional fees which will be dependent on the number of programs determined to be a major program based on the determination required by the Single Audit Acts. Agreement This letter comprises the complete and exclusive statement of the agreement between the parties, superseding all proposals oral or written and all other communications between the parties. If any provision of this letter is determined to be unenforceable, all other provisions shall remain in force. It is hereby understood and agreed that this engagement is being undertaken solely for the benefit of the Village of Key Biscayne, Florida and that no other person or entity shall be authorized to enforce the terms of this engagement. If you agree with the terms of our engagement, as described in this letter, please sign this PDF version of the engagement letter and return it to us by email. Moises D. Ariza, CPA is the Engagement Partner and is responsible for supervising the engagement and signing the report or authorizing another individual to sign it. V ill age of K ey B iscayne, Florida July 19, 2021 Page 15 This agreement is renewable at the option of both parties. We appreciate the opportunity to be of service to Village of Key Biscayne and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. Very truly yours, Marcum LLP ~~& Moises D. Ariza, CPA, CGMA ACCEPTED nt of Village of Key Biscayne, Florida. Authorized Signature :.-1,,,,Ll____:_....:__ _ ___::::==,,,,,,,,,,,..._,,=:::::::___ Title: J/M 1 f. /4/j;;,,..Jo-1, Ul/2:c. /f""'f (/ Date Signed: --~,9 ~-; /4_~_4L_> _ A P P E N D IX A V ill age of K ey B iscayn e C ircu m stan ces A ffectin g T im in g an d F ee E stim ate The estimated fee is based on certain assumptions. Circumstances may arise during the engagement that may significantly affect the targeted completion dates and our fee estimate. As a result, additional fees may be necessary. Such circumstances include but are not limited to the following: I. Changes to the timing of the engagement at your request. Changes to the timing of the engagement usually require reassignment of personnel used by Marcum in the performance of services hereunder. However, because it is often difficult to reassign individuals to other engagements, Marcum may incur significant unanticipated costs. 2. All requested schedules are not (a) provided by the accounting personnel on the date requested, (b) completed in a format acceptable to Marcum (c) mathematically correct, or (d) in agreement with the appropriate underlying records (e.g., general ledger accounts). Marcum will provide the accounting personnel with a separate listing of required schedules and deadlines. 3. Weaknesses in the internal control. 4. Significant new issues or unforeseen circumstances as follows: a. New accounting issues that require an unusual amount of time to resolve. b. Changes or transactions that occur prior to the issuance of our report. c. Changes in the Organization's accounting personnel, their responsibilities, or their availability. d. Changes in auditing requirements set by regulators. 5. Significant delays in the accounting personnel's assistance in the engagement or delays by them in reconciling variances as requested by Marcum. All invoices, contracts and other documents which we will identify for the Organization, are not located by the accounting personnel or made ready for our easy access. 6. A significant level of proposed audit adjustments are identified during our audit. 7. Changes in audit scope caused by events that are beyond our control. 8. Untimely payment of our invoices as they are rendered.