HomeMy Public PortalAbout04-13-20 Agenda Regular Meeting
Human Resources Director/Town Clerk Katherine Cathey
101 E. Orange St., PO Box 429, Hillsborough, NC 27278
919-296-9441 | katherine.cathey@hillsboroughnc.gov
www.hillsboroughnc.gov | @HillsboroughGov
Board of Commissioners Agenda | 1 of 2
Agenda
Board of Commissioners Regular Meeting (Virtual)
7 p.m. April 13, 2020
Town of Hillsborough YouTube channel
Due to current public health concerns, the Board of Commissioners is conducting its regular meeting virtually on
April 13, 2020 utilizing Zoom. Members of the Board of Commissioners will be participating in the meeting
remotely. Members of the public will be able to view and listen to the meeting via live streaming video on the
Town of Hillsborough YouTube channel. In this new virtual process, there are two methods for public comment.
Detailed public comment instructions for each method are provided at the bottom of this agenda.
• Written submittals by website contact form
• Speaking during the virtual meeting (Preregistration is required.)
Compliance with the American with Disabilities Act interpreter services and/or special sound equipment is
available on request. If you are disabled and need assistance with reasonable accommodations, call the Town
Clerk’s Office at 919-296-9441.
Please use the bookmark feature to navigate and view the item attachments.
1. Public charge
The Hillsborough Board of Commissioners pledges to the citizens of Hillsborough its respect. The board asks
citizens to conduct themselves in a respectful, courteous manner with the board and with fellow citizens. At
any time should any member of the board or any citizen fail to observe this public charge, the mayor or the
mayor’s designee will ask the offending person to leave the meeting until that individual regains personal
control. Should decorum fail to be restored, the mayor or the mayor’s designee will recess the meeting until
such time that a genuine commitment to this public charge is observed.
2. Audience comments not related to the printed agenda
3. Agenda changes and approval
4. Appointments
A. Historic District Commission – Appoint Eric Altman to a three-year term ending May 31, 2023
5. Items for decision — consent agenda
A. Minutes
1. Budgetary planning retreat March 7, 2020
2. Work session March 23, 2020
B. Miscellaneous budget amendments and transfers
C. Proposed contract for year-end audit services in connection with the fiscal year ended June 30, 2020
D. Ordinance to Amend Chapters 8, 8A and 14 of the Town of Hillsborough Code of Ordinances
E. Capital Reserve Fund Resolutions – Water and Sewer
Board of Commissioners Agenda | 2 of 2
6. Items for decision — regular agenda
A. Interlocal agreement with NC Department of Transportation and Go Triangle related to funding the
development of the train station property
B. Request from Habitat to receive remaining $65,000 of committed funding for Odie Street by June 30,
2020
C. Reconsideration of guidance to proceed with the Comprehensive Sustainability Plan
D. Hot topics for work session April 27, 2020
7. Updates
A. Board members
B. Town manager
C. Staff (written departmental reports are included in the agenda packet)
8. Adjournment
Public Comment Instructions
Public Comment – Written
(for items not on the agenda, agenda items and public hearings)
Members of the public may provide written public comment by submitting it via the Board of Commissioners
contact form by noon on the afternoon of the meeting.
When submitting the comment, include the following:
• The date of the meeting
• The agenda item (example: 5.C) you wish to comment on
• Your name, address, email and phone number
Members of the Board of Commissioners, town manager, assistant town manager/planning director and town
clerk will be copied on all comments submitted.
Public Comment – Verbal
(for items not on the agenda, agenda items and public hearings)
Members of the public will be asked to contact the town clerk using the town clerk contact form no later than
noon on the day of the meeting and indicate they wish to speak during the meeting.
When submitting the request to speak, include the following:
• The date of the meeting
• The agenda item (example: 5.C) you wish to speak on
• Your name, address, email and phone number
• The phone number must be the number you plan to call in from if participating by phone
Prior to the meeting, speakers will be emailed a Zoom participant link to be able to make comments during the
live meeting. Speakers may use a computer (with camera and/or microphone) or phone to make comments.
Speakers using the phone for comments must use the provided PIN/Password number.
The public speaker’s audio and video will be muted until the board gets to the respective agenda item(s).
Individuals who have pre-registered will then be brought into the public portion of the meeting one at a time.
If a member of the public encounters any concerns prior to the meeting related to speaking, please contact Town
Clerk Katherine Cathey at 919-296-9441.
Board of Commissioners
Agenda Abstract Form
Meeting Date: __April 13, 2020_____________________
Department: __Planning____________________________
Public Hearing: Yes No
Date of Public Hearing: __________________________
For Clerk’s Use Only AGENDA ITEM #
4.A
Consent
Agenda
Regular
Agenda
Closed
Session
PRESENTER/INFORMATION CONTACT: Margaret Hauth, Planning Director
ITEM TO BE CONSIDERED
Subject:
Historic District Commission - Appoint Eric Altman to a three-year term ending May 31, 2023
Attachment(s):
1. Application form
Brief Summary:
Mr. Altman has expressed interest in serving on the Historic District Commission and has been interviewed by the
Chairman of the Historic District Commission and staff. Based on his enthusiasm, his knowledge in research and
archaeology, and his professional background in archaeology and customer service, the recommendation is for Mr.
Atlman to be appointed to fill the vacancy due to the departure of Laura Simmons. Mr. Altman’s term would expire on
May 31, 2023.
Action Requested:
Appoint Eric Altman to fill an existing vacancy on the Historic District Commission.
ISSUE OVERVIEW
Background Information & Issue Summary:
See above.
Financial Impacts:
None
Staff Recommendations/Comments:
Approve
Advisory Board Application
If you are a Town of Hillsborough resident and willing to volunteer your time and expertise to your community, please
complete this form. Volunteers for the Parks and Recreation Board must be at least 13 years old, and volunteers for all
other boards must be at least 18 years old.
Name:
Eric Altman
Home address:
160 Hayes St
Home phone number:
828-719-7623
Email address:
ericaltmansa@gmail.com
Place of employment:
LHS
Job title:
Operations Manager
Birth date:
Oct. 26, 1984
Gender:
Male
Ethnic origin:
Caucasian
Boards you would be willing to serve on:
First choice — Historic District Commission
Second choice — Parks and Recreation Board
Third choice — Board of Adjustment
Reasons for wanting to serve:
I have been a resident of Hillsborough for seven years and after going through the Citizen's Academy program, I
learned the value that the advisory boards bring to the town. Ever since the class, I have wanted to volunteer in one
capacity or another and use my experience to help out the town!
Have you served or are you currently serving on a town board? If so, which ones and when?
I have not served on a town board yet, but thank's to my experience with the Academy, I'm at least pretty familiar with
their function!
Relevant work, volunteer or educational experience:
My primary application is for the Historic District but I have also indicated interest for the Parks and Rec and
Adjustment Board. I worked as an archaeologist and environmental scientist for two years for the DoD at Fort Knox,
KY, so I deeply understand the value of historic preservation and history. But I also dealt a great deal with assessing
environmental and permit compliance along with land use survey, so I feel that my background would be appropriate
for all three of the boards. I also have a great deal of professional experience as a manager, so I have done a lot of
hands-on work with organization and careful planning.
How are you connected to Hillsborough (live, work, play, shop, own property)?
I work, live, play and primarily shop in Hillsborough. Most days I never leave town except to go to the gym! Tellingly,
we originally bought our house over on Hayes St for its walkability to both the West side and downtown. We try to stay
involved in the community as much as we are able.
Have you reviewed the Vision 2030 plan, and what are your thoughts about it?
I have read the Vision 2030 plan somewhat recently. I agreed with the direction of the plan, especially in preserving the
unique character of the town and the wide diversity of attractions that we can offer, especially the maintenance and
preservation of the natural features of the area. I also feel like transportation (which is addressed in the 2030 plan) will
be a pivotal issue in the years to come and that the 2030 commitment to looking into alternative transportation from
private vehicles is an extremely worthy goal.
Have you reviewed other town documents (budget, strategy map, small area plans), and what are your thoughts
about them?
I have reviewed these documents when I was in the Citizen's Academy, but I have not looked them in some time. I
understand their use and application, but I don't have any particular opinion on them at this time I'm afraid.
What challenges do you see the town facing that could be addressed by the board or boards on which you wish
to serve?
I think Historic Preservation, Parks and Rec, and Adjustments all face some similar issues and challenges. All of these
boards have to deal with pressure from development and land use, which if left uninhibited would strip away
everything that is unique and/or healthy about Hillsborough. Historic structures need to be protected, our green areas
need to be maintained and more need to be established, and we cannot allow the need to expand compromise our
streams and wild areas. All of these boards require balancing the needs of the landowner with the greater good of the
community, all while enforcing the agreed upon codes and permits that define proper land use. I would look forward to
helping the other board members take on these challenges and also help the community navigate them!
How you heard about this opportunity:
Internet
Agreement:
3 I have been advised that I am committing to attend the volunteer board's regular meetings. Attendance at the regular
meetings shall be considered a prerequisite for maintaining membership on the board. The Board of Commissioners
may declare a vacancy on the board because of non-attendance.
Board of Commissioners
Agenda Abstract Form
Meeting Date: April 13, 2020
Department: Administration
Public Hearing: Yes No
Date of Public Hearing:
For Clerk’s Use Only AGENDA ITEM #
5.A
Consent
Agenda
Regular
Agenda
Closed
Session
PRESENTER/INFORMATION CONTACT: Katherine Cathey, Human Resources Director/Town Clerk
ITEM TO BE CONSIDERED
Subject:
Minutes
Attachment(s):
1. Budgetary planning retreat March 7, 2020
2. Work session March 23, 2020
Brief Summary:
None
Action Requested:
Approve minutes of the Board of Commissioners budgetary planning retreat March 7, 2020 and the Board of
Commissioners work session March 23, 2020. The minutes of the Board of Commissioners regular meeting March 9,
2020 will be presented for approval at the regular meeting in May.
ISSUE OVERVIEW
Background Information & Issue Summary:
None
Financial Impacts:
None
Staff Recommendations/Comments:
Approve minutes as presented.
Minutes
Board of Commissioners Budgetary Planning Retreat
9 a.m. March 7, 2020
Town Hall Annex Board Meeting Room, 105 E. Corbin St.
Present: Mayor Jenn Weaver and commissioners Mark Bell, Robb English, Kathleen Ferguson, Matt
Hughes, and Evelyn Lloyd
Staff: Budget Director Emily Bradford, Human Resources Director/Town Clerk Katherine Cathey,
Assistant to the Town Manager/Deputy Budget Director Jen Della Valle, Police Chief Duane
Hampton, Assistant Town Manager/Planning Director Margaret Hauth, Public Works Director Ken
Hines, Town Manager Eric Peterson, Budget Technician Jamie Privuznak, Finance Director Daphna
Schwartz, Utilities Director Marie Strandwitz, Public Space Manager Stephanie Trueblood, Public
Information Officer Catherine Wright, and Information Technology Manager Beth Yurchisin
Facilitator: Rod Visser
1.Opening, introductions and ground rules
Facilitator Rod Visser opened the meeting at 9 a.m., led introductions and provided ground rules for the
retreat.
2.Exercise: Why do we do what we do?
Mayor Jenn Weaver led a brief exercise in which commissioners and staff were asked to spend one minute
thinking about two or three values that they bring into the work they do for the town and one minute
thinking about what helps town staff and leaders get through challenging times for the town. Participants
were then asked to spend three minutes discussing answers with a person next to them.
Values included: accuracy, collaboration, community, compassion, dedication, equity, excellence, helping,
honesty, inclusivity, integrity, long-range planning, service, and teamwork.
Answers for getting through difficult times included: communication, desire to serve, leadership, reassurance
and support, sense of humor, teamwork, and trust in each other.
3.Strategy map
Town Manager Eric Peterson asked the mayor and board to review the strategy map and to think about the
top three to five priorities they want staff to focus on for the next three to five years. Answers will guide staff
in finalizing a modified strategy map and action plans.
A.Mission statement
The mayor and board reviewed the strategy map’s mission statement and noted no changes. Commissioner
Robb English suggested staff examine adding sustainability into the mission statement.
B.Vision statement
The mayor and board reviewed the strategy map’s vision statement and noted no changes. Commissioner
Matt Hughes suggested examining how the town’s values could be added into the statement, particularly for
diversity and equity.DRAFTMarch 7, 2020
Board of Commissioners Budgetary Planning Retreat
Approved: ____________________
Page 1 of 5
C. Values
The mayor and board reviewed proposed values presented to the board in January. Those values encompass
affordability, ethics, long-term planning and decision-making, safety, unity, and vibrancy. Following
discussion, it was determined that the mayor and board would provide guidance to staff on what the values
mean to them, that staff would create definitions for the values, and that the proposed values and definitions
would be presented to the board at a future meeting.
D. Strategic goals
The town manager reviewed that the town’s current strategy map includes four strategic priorities:
community safety, growth management, quality of life and superior services. He also reviewed that staff have
reviewed strategic goals for local governments across the country as they work to update the town’s strategy
map and actions plans. Examples of priorities from other local governments were provided.
The mayor and board also were provided with example goals that had been presented to the board in January
and with preliminary feedback from key staff on how to define the example goals. Staff had suggested:
sustainability and resiliency as an overarching goal, excellent core services as a foundational goal, and
additional goals of community safety, connected community, and economic vitality.
Peterson encouraged the board to determine the three to five most important priorities for the town, noting
that more focus areas will lessen staff’s ability to effectively tackle goals.
Following discussion, it was determined to use the example strategic goals provided by staff. Staff will develop
definitions based on feedback from the management team and present the proposed goals at a future board
meeting.
The board discussed Item 6 before breaking for lunch.
4. Preliminary FY21-23 budget overview
The town manager gave a large-scale overview of budget projections for the next three fiscal years. He asked
commissioners to think about the top goal for the budget cycle. Peterson noted the goal should be to
maintain solid savings levels in all funds because of uncertainty from the effects of the coronavirus on the
economy and town revenue. He said that preliminary work to draft a three-year General Fund budget with
currently funded operations and without most new funding requests shows deficits in fiscal years 2021 and
2022. A move to renovate the former Town Hall Annex and delay the building of a public safety facility is
expected to cost about $300,000 and is among unexpected costs for the current fiscal year.
The manager noted the town has accomplished much in the last decade including:
• Building phases 2 and 3 of the Riverwalk greenway.
• Completing other pedestrian projects downtown and connected to Riverwalk.
• Prioritizing street repaving.
• Acquiring property for a future train station, future public safety facility, and centralized services.
• Creating a new board meeting room and additional offices in renovations to the expanded Town Hall
Campus.
• Starting a stormwater utility.
• Developing a public information office and a human resources division.
• Doubling the police budget and tripling the recreation and public spaces budget.
• Expanding most departments.
Peterson said successes are seen in: DRAFTMarch 7, 2020
Board of Commissioners Budgetary Planning Retreat
Approved: ____________________
Page 2 of 5
• The results of the biennial community and employee surveys.
• The attraction of Hillsborough as a preferred destination.
• The AA rating the town received for a series of revenue bonds it sold to finance expanding the town
town’s reservoir.
The manager reviewed that since Fiscal Year 2015, the town has added a number of full-time employees but
has also eliminated a number of positions over the past 10 years, including positions for assistant town
manager, assistant finance and utilities directors, code enforcement officer, crime analyst, police
accreditation manager, and additional finance and utilities positions. Hillsborough’s location in the Triangle
and by larger communities creates greater financial pressure in recruiting and retaining employees, it was
noted. However, the town cannot afford to continue adding personnel as its population grows.
Peterson said leaders need to think about the town’s strategy going forward ― how it maintains competitive
salaries; takes care of assets; addresses large and small unfunded needs; and tackles climate action. What will
need to be prioritized, and what alternatives can be taken to address unfunded needs?
5. FY21-23 requests
This open question-and-answer period with staff regarded funding requests, opportunities, needs, and
concerns. Commissioners noted concerns about seemingly tighter budget conditions than the previous year, a
higher risk of changes in development plans, and a possible recession because of the coronavirus. The town
manager noted that the town was in a development lull before in which the Waterstone mixed use project
stalled for five years. That stoppage was not expected, but there is a higher risk of such a delay now, he said.
Peterson encouraged leaders to share ideas or thoughts, such as questioning whether a delay to a request or
an end to a service has been considered. He noted that everyone can get tunnel vision when looking at all the
details.
The mayor asked what would be the next step if a recession hit. The manager said there is no master plan
after today. He added he had attended a conference that week in which a strategy was noted of determining
the current situation and then figuring out the next one or two steps. He suggested that the budget would be
stripped to the bone, needs would be identified and decisions made.
Following discussion of unmet needs and funding options for the upcoming and future budget years, the town
manager noted that staff would try to develop a draft budget that gives the board options in selecting a final
budget.
Public Space Manager Stephanie Trueblood asked about direction from the board regarding transportation
and connectivity priorities. She said knowing the priorities would help her in finding and applying for grants. It
was determined that Trueblood and the planning director would recommend and prioritize a list of projects,
which would be brought before the board at a future meeting for approval.
6. Sustainability/Comprehensive Plan
This item was moved and discussed before Item 4. Staff requested permission to start a request for proposals
process to select a consultant to guide the development of a sustainability/comprehensive plan. Starting the
process soon could allow work to start in July on the plan. The board directed staff to move forward on the
request for proposals.
7. Small priorities taking up big time
There was discussion of smaller issues requiring significant staff time and how to manage and mitigate the
impact on tackling top priorities. The town manager noted that although Hillsborough is a small town, the DRAFTMarch 7, 2020
Board of Commissioners Budgetary Planning Retreat
Approved: ____________________
Page 3 of 5
community has a lot of expectations of staff and services. He suggested thinking about the balance between
being responsive and going overboard, noting that being overly responsive hurts staff’s ability to get priority
work done. He also suggested thinking about the cost in opportunity of work that hasn’t been done or now
can’t be done because three months were spent on an issue upsetting one person. How can we have this
happen less often, he asked.
Suggestions included empowering staff to:
• Deprioritize items even if viewed as low hanging fruit.
• Time management: Do not spend excessive time perfecting tasks unless it’s needed or essential.
• Give a longer time frame for providing an answer to a question.
• Do only what is requested.
• Make an assessment of a request and spend a set amount of time on it.
Additional suggestions encompassed lean work strategies:
• Break priorities into small, medium and large categories and budget time for those.
• Determine whether an item is for staff, the manager or board to handle.
It was noted that the typical person can do five tasks efficiently.
Other suggestions from the mayor for the board included adhering to more discipline in meetings when
constituents speak and having the fortitude for hard conversations and decisions.
It was noted that when an issue comes before the board, staff likely has already spent a large amount of time
on the issue and the board is now being asked to make a decision. It was suggested that staff give a
recommendation for what they think the board should do.
8. How to fail checklists
The board expressed appreciation for materials the manager provided, including a checklist of common
reasons initiatives fail and key points to consider in reducing decision failures. The latter was pulled from the
book “If We Can Put a Man on the Moon” by William Eggers and John O’Leary.
9. Confirm action items moving forward
The board confirmed the following action items:
• Regarding values for the strategy map, the mayor and board will provide guidance to staff on what
the values mean to them, that staff will create definitions for the values, and the proposed values and
definitions will be presented to the board at a future meeting.
• Regarding strategic goals, the example goals provided by staff will be used. Staff will develop
definitions based on feedback from the management team and present the proposed goals at a future
board meeting.
• Regarding the sustainability/comprehensive plan, staff will start the request for proposals process for
selecting a consultant to guide the plan’s development.
• Regarding transportation and connectivity priorities, the public space manager and the planning
director will recommend and prioritize a list of projects, which will be brought before the board for
approval.
10. Other
There was no discussion.
11. Review of the day/adjournment DRAFTMarch 7, 2020
Board of Commissioners Budgetary Planning Retreat
Approved: ____________________
Page 4 of 5
There was discussion of possible value in two retreats: one focused on strategy and the other on the budget.
The manager noted that the time involved in creating the budget no longer allows for providing a draft
proposal in February or March. He said perhaps strategic discussions could start earlier in the year.
The meeting adjourned at 3 p.m.
Respectfully submitted,
Katherine M. Cathey
Town Clerk
DRAFTMarch 7, 2020
Board of Commissioners Budgetary Planning Retreat
Approved: ____________________
Page 5 of 5
Minutes
Board of Commissioners Work Session – State of the Town Address
7 p.m. March 23, 2020
Town Hall Annex Board Meeting Room, 105 E. Corbin St.
Present: Mayor Jenn Weaver
Staff: Public Information Specialist Cheryl Sadgrove
Absent (excused): Commissioners Mark Bell, Robb English, Kathleen Ferguson, Matt Hughes and Evelyn Lloyd
Mayor Jenn Weaver delivered a virtual State of the Town Address at 7 p.m. March 23. The Board of
Commissioners work session originally scheduled at 7 p.m. March 23, 2020 was canceled March 12, 2020 as the
town took increased precautions to slow the spread of the COVID-19 outbreak.
Delivering her first State of the Town Address virtually, Weaver focused on the coronavirus pandemic and how the
community can surmount continued hardship by staying together.
“Fear is an entirely rational and reasonable reaction to the situation that we are in,” the mayor said during the
address that was broadcast live March 23 on the town’s @HillsboroughGov Facebook page. “The trick is to take
note of that fear, acknowledge it, but not let it consume our whole state of being. We are surrounded by good
people. Let’s take care of ourselves and each other — from at least 6 feet away.”
Reassurance
Seated at her normal spot in the Hillsborough Town Hall Annex’s board meeting room, Weaver started the
address by reassuring the community that essential town services are continuing and that she is confident in the
ability of the town’s leadership and staff to get through the pandemic and its resulting challenges.
She reminded viewers that the town has a solvent water and sewer utility, streets in good condition, and an
abundance of public spaces for respite now due to investments made in past years. Town leaders will make the
decisions needed to prioritize the safety of every community member, but they also realize actions to slow the
spread of the virus come at great cost, she said.
“The result is that our many local businesses are struggling to stay afloat and people are losing their jobs,” Weaver
said. “To all those local businesses, I want you to know that we see you and we are committed to working with
our community partners to connect you with the assistance that you need as it becomes available.”
Expedition mindset
Recalling past training in wilderness leadership, Weaver advocated approaching the coronavirus pandemic with an
expedition mindset to help lower the risks from an already risky situation. She suggested the community focus on
three elements of expedition mentality:
• Reduce your exposure to risk because what you are doing is already inherently risky — Stay home as
much as possible, the mayor advised, because the coronavirus is in community spread and we increase DRAFTMarch 23, 2020
Board of Commissioners Work Session
Approved: ____________________
Page 1 of 3
risks each time we leave our homes. When leaving home to get groceries or to take a walk, stay physically
distant from others and wash your hands when you return home.
• Make decisions that align your own behavior with what is best for the health and safety of the group, not
just your personal interests — The mayor noted it is known now that people can be infected and infecting
others for many days without showing symptoms. “So we each are holding each other’s health — and
possibly lives — in our own hands,” she said. “When you’re in a group setting out in the wilderness, you
shouldn’t take foolish physical risks because your personal injury turns into a liability for the group. In our
coronavirus situation we must each be extraordinarily careful in avoiding contagion not just to protect
ourselves but to protect everyone else around us in our community.”
• Stay focused, and remain flexible — The mayor noted the fluid nature of the pandemic brings the
unexpected, to which so many people already have had to adapt in the last weeks. “We cannot
necessarily predict when changes may come,” she said, “but we know there will be change and we can be
mentally prepared that change is coming and be ready to adapt.”
“Above all, our community must stick together,” Weaver said, recalling the instructions that a beloved guide in
rock climbing and wilderness leadership gave: No. 1, stay together. No. 2, stay together. No. 3, stay together. “If
we do, all of our hardships will be less.”
Concrete actions
Recognizing a desire from the community for ways to help, the mayor strongly encouraged these actions:
• Stay home as much as possible. Getting outside and walking for mental health are important, but stay 6
feet away from others and limit other outings to necessity only.
• Support local businesses from afar, including ordering takeout food, buying from farmers, and buying gift
cards.
• Support artists and musicians through the Orange County Arts Support Fund.
• Wash your hands the right way for a full 20 seconds with soap every time you enter your house, eat, use
the restroom or enter a building. Make sure kids know how to wash their hands too.
• Don’t gather in groups of more than 10. If gathering with fewer than 10, still practice social distancing.
These are best practices despite an executive order from the governor earlier in the day banning mass
gatherings of more than 50 people. “The fewer of us gathered at one time, the more safe our entire
community will be,” Weaver said.
• Talk with your kids about racism and xenophobia. “They might be hearing that this virus is something that
can be blamed on a particular nation or ethnic group,” the mayor said. “They might be hearing this on the
news. They might be hearing this from a friend as they’re chatting online. Please take the time to talk
about the harm that this causes with your children.”
• Stay connected to updates from the Orange County Health Department. See the county’s coronavirus
webpage, where you also can subscribe to a semiweekly COVID-19 newsletter. Subscribe to daily text
updates by texting ocnchealth to 888777. For questions, send an email to covid19@orangecountync.gov
or call the call center at 919-245-6111, which is open from 8:30 a.m. to 5 p.m. daily and available in
Spanish and other languages. DRAFTMarch 23, 2020
Board of Commissioners Work Session
Approved: ____________________
Page 2 of 3
“The coronavirus is very contagious, it is not contained, and it continues to spread,” Weaver said. “Our challenge
now is to slow its spread so that critical health services do not get overwhelmed.
She offered these additional tips for businesses:
•Implement daily physical distancing practices, especially in businesses with a large amount of foot traffic.
“The town cannot force this,” Weaver said, “so we are counting on you to do it yourselves.”
•If you own a small business and are worried and need help, contact Hillsborough Economic Development
Planner Shannan Campbell by email or phone at 919-296-9477 or Hillsborough/Orange County Chamber
of Commerce Chief Executive Officer Kim Tesoro at kim@hillsboroughchamber.com or 919-732-8156.
The mayor encouraged the community to take the time to fill out the census, noting that invitations to complete
the population survey have arrived in the mail and that the form took about 10 minutes for her family to
complete online.
She also answered questions submitted by the community, including questions about access to food during the
pandemic. The mayor noted that the county’s call center handles all information related to the coronavirus.
Individuals who cannot access food regardless of whether they are food insecure, do not have transportation, are
a member of an at-risk group, or are on quarantine can call the hotline at 919-245-6111 for help. Part of the
county’s role is providing social services, she noted.
In addition, while schools are closed, Orange County Schools is leading an effort with community partners to
continue to provide food to children who receive free and reduced lunch at school. Orange Congregations in
Mission also has a food pantry and continues to accept donations.
Weaver encouraged community members to also help each other in their individual areas by organizing a system
of checking up on each other and identifying needs. She advised starting a list of people living nearby with phone
numbers, ages, and underlying health conditions.
“Despite the tremendous challenges that we are currently facing, the state of our community is strong,” Weaver
said in concluding the address. “We’re a well-run town, full of excellent people in a beautiful setting. So let’s keep
our expedition mindset. And even when we are physically apart, stay together, stay together, stay together.”
View the address
You can view the address in full now on the town’s Facebook page (that video is in two parts because of a minor
interruption) and later this week on the town’s YouTube channel.
Respectfully submitted,
Katherine M. Cathey
Town Clerk DRAFTMarch 23, 2020
Board of Commissioners Work Session
Approved: ____________________
Page 3 of 3
Board of Commissioners
Agenda Abstract Form
Meeting Date: April 13, 2020
Department: Administration - Budget
Public Hearing: Yes No
Date of Public Hearing:
For Clerk’s Use Only AGENDA ITEM #
5.B
Consent
Agenda
Regular
Agenda
Closed
Session
PRESENTER/INFORMATION CONTACT: Emily Bradford, Budget Director
ITEM TO BE CONSIDERED
Subject:
Miscellaneous budget amendments and transfers
Attachment(s):
1. Description and explanation for budget amendments and transfers
Brief Summary:
To adjust budgeted revenues and expenditures where needed due to changes that have occurred since budget
adoption.
Action Requested:
Consider approving budget amendments and transfers.
ISSUE OVERVIEW
Background Information & Issue Summary:
N/A
Financial Impacts:
As indicated by each budget amendment.
Staff Recommendations/Comments:
To approve the attached list of budget amendments.
BUDGET CHANGES REPORT
TOWN OF HILLSBOROUGH
FY 2019-2020
DATES: 04/13/2020 TO 04/13/2020
REFERENCE NUMBER DATE BUDGET CHANGE BUDGET
ORIGINAL BUDGET AMENDEDCHANGE
USER
10-00-3900-3900-000 FUND BALANCE APPROPRIATION
04/13/2020 346,733.00 606.00To cover COVID-19 expenses 16559 817,246.90EBRADFORD
04/13/2020 346,733.00 2,648.00To cover SmartFusion cloud conversion 16563 819,894.90EBRADFORD
04/13/2020 346,733.00 5,000.00To est utility analysis budget 16583 824,894.90EBRADFORD
04/13/2020 346,733.00 10,000.00To cover COVID-19 expenses 16587 834,894.90EBRADFORD
10-00-9990-5300-000 CONTINGENCY
04/13/2020 250,000.00 -9,394.00To cover COVID-19 expenses 16558 0.00EBRADFORD
10-10-4000-5300-335 SUPPLIES - DISASTER
04/13/2020 0.00 10,000.00To cover COVID-19 expenses 16557 10,000.00EBRADFORD
04/13/2020 0.00 10,000.00To cover COVID-19 expenses 16586 20,000.00EBRADFORD
10-10-4400-5100-020 SALARIES
04/13/2020 375,109.00 -3,354.00To cover Harris contract overages 16593 371,755.00EBRADFORD
10-10-4400-5300-080 TRAINING/CONF./CONV.
04/13/2020 7,200.00 -1,640.00To cover Harris contract overages 16591 6,660.00EBRADFORD
10-10-4400-5300-453 C.S./HARRIS
04/13/2020 18,000.00 3,354.00To cover Harris contract overages 0 21,354.00EBRADFORD
04/13/2020 18,000.00 2,648.00To cover SmartFusion cloud conversion 16562 24,002.00EBRADFORD
04/13/2020 18,000.00 3,216.00To cover Harris contract overages 16592 27,218.00EBRADFORD
10-10-4400-5300-459 C.S./ACCOUNTING ASSISTANCE
04/13/2020 3,000.00 -1,576.00To cover Harris contract overages 16590 0.00EBRADFORD
10-20-5100-5300-150 MAINTENANCE - BUILDING
04/13/2020 14,085.00 15,402.00Roof repair and mold mitigation 16597 41,187.00JPrivuznak
10-20-5100-5300-320 SUPPLIES - OFFICE
04/13/2020 6,000.00 -1,000.00Roof repair and mold mitigation 16596 5,000.00JPrivuznak
10-20-5100-5300-330 SUPPLIES - DEPARTMENTAL
04/13/2020 1,500.00 -1,000.00Roof repair and mold mitigation 16598 500.00JPrivuznak
10-20-5100-5300-456 C.S./ALARM SERVICE
04/13/2020 0.00 5,000.00To cover security system camera repairs & upgrade16543 5,000.00EBRADFORD
10-20-5110-5100-010 OVERTIME COMPENSATION
04/13/2020 30,000.00 -2,000.00To cover security system camera repairs & upgrade16545 24,500.00EBRADFORD
10-20-5110-5300-080 TRAINING/CONF./CONV.
04/13/2020 6,560.00 -3,000.00To cover security system camera repairs & upgrade16544 3,560.00EBRADFORD
10-20-5110-5300-350 UNIFORMS
04/13/2020 18,150.00 4,917.00To cover uniforms for new officers 16542 27,153.66EBRADFORD
10-20-5110-5300-458 DATA PROCESSING SERVICES
04/13/2020 0.00 -9,500.00Roof repairs and mold mitigation 16599 0.00JPrivuznak
10-20-5110-5700-740 CAPITAL - VEHICLES
04/13/2020 47,500.00 -3,000.00To cover uniforms for new officers 16541 44,500.00EBRADFORD
10-20-5120-5300-150 MAINTENANCE - C.P. BLDG
04/13/2020 0.00 -2,902.00Roof repair and mold mitigation 16600 816.49JPrivuznak
10-20-5120-5300-321 SUPPLIES - COMMUNITY POLICE
04/13/2020 2,500.00 -1,000.00Repair roof and mold mitigation 16601 1,500.00JPrivuznak
10-20-5120-5300-730 DRUG ENFORCEMENT OPERATIONS
JPrivuznak 3:48:12PM04/07/2020
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Page 1 of 3
Fund Balance
GF
Contingency
COVID
Accounting
Accounting
Accounting
Accounting
Police -
Admin
Police -
Admin
Police -
Admin
Police -
Admin
Police -
Patrol
Police -
Patrol
Police -
Patrol
Police -
Patrol
Police -
Patrol
Police -
Investigation
Police -
Investigation
Police -
Investigation
BUDGET CHANGES REPORT
TOWN OF HILLSBOROUGH
FY 2019-2020
DATES: 04/13/2020 TO 04/13/2020
REFERENCE NUMBER DATE BUDGET CHANGE BUDGET
ORIGINAL BUDGET AMENDEDCHANGE
USER
04/13/2020 5,000.00 -1,917.00To cover uniforms for new officers 16540 0.00EBRADFORD
10-30-5600-5300-330 SUPPLIES - DEPARTMENTAL
04/13/2020 17,000.00 -1,000.00To cover account overages 16550 18,347.68EBRADFORD
04/13/2020 17,000.00 -1,059.00To cover Norfolk Southern invoice 16560 17,288.68EBRADFORD
10-30-5600-5300-450 C.S./RR CROSSINGS
04/13/2020 1,059.00 1,059.00To cover Norfolk Southern invoice 16561 3,177.00EBRADFORD
10-30-5800-5300-330 DEPARTMENTAL SUPPLIES
04/13/2020 700.00 1,000.00To cover account overages 16551 2,500.00EBRADFORD
10-60-6900-5300-475 C.S./UTILITY ANALYSIS
04/13/2020 0.00 5,000.00To est utility analysis budget 16582 5,000.00EBRADFORD
30-70-5972-5972-000 TRANSFER TO WATER CRF
04/13/2020 225,814.00 1,291.00Adj to actual 16588 227,105.00EBRADFORD
04/13/2020 225,814.00 12,880.00To adj to actual 16594 239,985.00EBRADFORD
30-80-3500-3523-000 WATER CAPITAL FACILITY FEES
04/13/2020 225,814.00 1,291.00Adj to actual 16589 227,105.00EBRADFORD
04/13/2020 225,814.00 12,880.00To adj to actual 16595 239,985.00EBRADFORD
30-80-7220-5300-572 JORDAN LAKE PARTNERSHIP
04/13/2020 37,500.00 1,790.00To cover higher than anticpated allocation 16572 39,919.00EBRADFORD
30-80-7240-5300-113 LICENSE FEES
04/13/2020 3,541.00 -3,000.00To cover bill printing costs 16569 541.00EBRADFORD
30-80-7240-5300-454 C.S./SOUTH DATA
04/13/2020 26,400.00 3,000.00To cover bill printing costs 16568 29,400.00EBRADFORD
30-80-8200-5300-080 TRAINING/CONF./CONV.
04/13/2020 5,600.00 -1,453.00To cover vactor truck debt payment 16570 4,147.00EBRADFORD
30-80-8200-5400-910 DEBT SERVICE
04/13/2020 141,797.00 1,453.00To cover vactor truck debt payment 16571 143,250.00EBRADFORD
30-80-9990-5300-000 CONTINGENCY
04/13/2020 400,000.00 -1,790.00To cover Jordan Lake Allocation 16573 310,878.00EBRADFORD
35-30-5900-5300-570 MISCELLANEOUS
04/13/2020 5,000.00 -714.00To cover land acquisition 16567 3,695.00EBRADFORD
35-30-5900-5700-710 CAPITAL - LAND ACQUISITION
04/13/2020 0.00 714.00To cover land acquisition 16566 33,714.00EBRADFORD
44-70-3700-3700-200 GRANT REVENUE-FEDERAL-NCDOT
04/13/2020 488,000.00 518,850.00To consolidate grant accounts 16547 1,006,850.00EBRADFORD
44-70-3700-3700-401 GRANT REVENUE-FEDERAL-STP-BG
04/13/2020 518,850.00 -518,850.00To consolidate grant accounts 16546 0.00EBRADFORD
47-20-5100-5700-000 CONTINGENCY
04/13/2020 0.00 -10,000.00To cover locks, wtr heater wall & wtr fountain 16548 5,000.00EBRADFORD
47-20-5100-5700-570 MISCELLANEOUS
04/13/2020 0.00 -12,855.00To cover facility cabling 16584 72,145.00EBRADFORD
47-20-5100-5700-720 CONSTRUCTION
04/13/2020 0.00 10,000.00To cover locks, wtr heater wall & wtr fountain 16549 210,000.00EBRADFORD
04/13/2020 0.00 12,855.00To cover facility cabling 16585 222,855.00EBRADFORD
JPrivuznak 3:48:12PM04/07/2020
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Streets
Streets
Solid Waste
Special
Appropriations
Water/Sewer
Capital Reserve
Fund
Revenue: Cap
Fees
Utilities
Admin.
Billing &
Collections
Billing &
Collections
Wastewater
Collection
Wastewater
Collection
WSF
Contingency
Stormwater
Stormwater
RiverWalk -
CMAQ
RiverWalk -
CMAQ
Public Safety
Bldg.
Public Safety
Bldg.
Public Safety
Bldg.
BUDGET CHANGES REPORT
TOWN OF HILLSBOROUGH
FY 2019-2020
DATES: 04/13/2020 TO 04/13/2020
REFERENCE NUMBER DATE BUDGET CHANGE BUDGET
ORIGINAL BUDGET AMENDEDCHANGE
USER
66-00-3850-3850-000 INTEREST EARNED
04/13/2020 0.00 33,187.19To correct budget amt due to estab Fund 67 16576 203,803.85EBRADFORD
66-70-3800-3800-000 OTHER FINANCING SOURCES BOND PREMIU
04/13/2020 0.00 1,025,846.00To correct budget amt due to estab Fund 67 16577 1,025,846.00EBRADFORD
66-70-3980-3980-300 LOAN PROCEEDS
04/13/2020 11,173,674.00 -1,025,846.00To correct budget amt due to estab Fund 67 16578 10,155,000.00EBRADFORD
66-80-8130-5700-000 CONTINGENCY
04/13/2020 636,037.90 -224,549.95To correct budget amt due to estab Fund 67 16579 411,487.95EBRADFORD
04/13/2020 636,037.90 33,187.19To correct budget amt due to estab Fund 67 16581 444,675.14EBRADFORD
66-80-8130-5700-720 CONSTRUCTION
04/13/2020 8,650,423.00 224,549.95To correct budget amt due to estab Fund 67 16580 7,912,875.53EBRADFORD
131,224.38
JPrivuznak 3:48:12PM04/07/2020
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Page 3 of 3
WFER - West
Fork Eno
WFER - West
Fork Eno
WFER - West
Fork Eno
WFER - West
Fork Eno
WFER - West
Fork Eno
Board of Commissioners
Agenda Abstract Form
Meeting Date: April 13, 2020
Department: Finance
Public Hearing: Yes No
Date of Public Hearing:
For Clerk’s Use Only AGENDA ITEM #
5.C
Consent
Agenda
Regular
Agenda
Closed
Session
PRESENTER/INFORMATION CONTACT: Finance Director Daphna Schwartz
ITEM TO BE CONSIDERED
Subject:
Proposed contract for year-end audit services in connection with the fiscal year ended June 30, 2020
Attachment(s):
1. Proposed FY 2020 contract for audit services submitted by Cherry Bekaert
Brief Summary:
The town released a request for proposal (RFP) to provide audit services on Feb. 13, 2020. Six audit firms responded
as follows:
Bernard Robinson & Company
Cherry Bekaert
CRI (Carr Riggs & Ingram)
Dixon Hughes Goodman
Maudlin Jenkins, LLC
Sharpe Patel CPA
There was one proposal submitted late, so it was not considered. The five proposals were evaluated using a
weighted 30-point scale and the following criteria:
General
Completeness of overall quality of the proposal.
Understanding of the bid requirements.
Ability to meet the town’s deadlines. Profile of the Firm
Adequate staffing to meet deadlines.
Staff educational background.
Experience with government audits.
Experience with NC municipality audits.
Experience with water and sewer utility audits.
Peer review.
Local Government Commission (LGC) and UNC School of Government knowledge and relationship. Audit Approach
Government staff assistance.
Audit staff time allocation.
Reasonable price.
Reasonable proposed deadlines.
Staff also checked to make sure there were no disciplinary action against any of the firms. Staff also verified all
licenses and insurance was up to date.
Cherry Bekaert was the top-ranking firm for both the technical and price evaluation. Cherry Bekaert’s pricing is as
follows:
FY 2020 $30,500
FY 2021 $31,400
FY 2022 $32,300
The Town’s audit fees for the FY 2019 audit were $35,000.
Action Requested:
Approve the audit contract for the FY 2020 audit.
ISSUE OVERVIEW
Background Information & Issue Summary:
See above.
Financial Impacts:
The cost of the audit will be $30,500, $31,400 and $32,300 for the FY 2020, FY 2021 and FY 2023 respectively.
Staff Recommendations/Comments:
2626 Glenwood Avenue, Suite 200, Raleigh, NC 27608‐1045 | P 919.782.1040 | cbh.com
April 3, 2020
Ms. Daphna Schwartz, Finance Director
Town of Hillsborough
P.O. Box 429
105 East Corbin Street
Hillsborough, North Carolina 27278
Dear Ms. Schwartz:
This engagement letter between Town of Hillsborough (hereafter referred to as the “Town” or
“you” or “your” or “management”) and Cherry Bekaert LLP (the “Firm” or “Cherry Bekaert” or
“we” or “us” or “our”) sets forth the nature and scope of the services we will provide, the
Town’s required involvement and assistance in support of our services, the related fee
arrangements, and other Terms and Conditions, which are attached hereto and incorporated
by reference, designed to facilitate the performance of our professional services and to
achieve the mutually agreed-upon objectives of the Town.
SUMMARY OF SERVICES
We will provide the following services to the Town as of and for the year ended June 30,
2020:
Audit and attestation services
1. We will audit the basic financial statements of the Town as of and for the year ended
June 30, 2020, including the governmental activities, the business type activities, each
major fund, and the remaining fund information.
2. We will audit the schedule of expenditures of federal and state awards. As part of our
engagement, we will apply certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used
to prepare the financial statements or the financial statements themselves, and other
additional procedures in accordance with auditing standards generally accepted in the
United States of America (“GAAS”).
3. We will audit the combining and individual fund statements and schedules, budgetary
schedules, and other schedules. As part of our engagement, we will apply certain
procedures, including comparing and reconciling such information directly to underlying
accounting and other records used to prepare the financial statements themselves.
4. The supplementary information, such as the introductory and statistical sections
accompanying the financial statements, will not be subjected to the auditing procedures
applied in our audit of the financial statements and our auditor’s report will not provide an
opinion or any assurance on that information.
5. We will apply limited procedures to the required supplementary information (RSI), such
as management’s discussion and analysis (MD&A), the Law Enforcement Officers’
Special Separation Allowance, the Local Government Employees’ Retirement System,
and the Other Post-Employment Benefits, which will consist of inquiries of Town’s
management about 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 obtain during our audit of the financial
statements.
Town of Hillsborough
April 3, 2020
Page 2
Nonattest accounting and other services
We will provide the following additional services:
1. Complete the appropriate sections of and sign the Data Collection Form.
YOUR EXPECTATIONS
Our services plan, which includes our audit plan, is designed to provide a foundation for an
effective, efficient, and quality-focused approach to accomplish the engagement objectives
and meet or exceed the Town’s expectations. Our services plan will be reviewed with you
periodically and will serve as a benchmark against which you will be able to measure our
performance. Any additional services that you may request, and that we agree to provide, will
be the subject of separate written arrangements.
The Town recognizes that our professional standards require that we be independent from
the Town in our audit of the Town’s financial statements and our accompanying report in
order to ensure that our objectivity and professional skepticism have not been compromised.
As a result, we cannot enter into a fiduciary relationship with the Town and the Town should
not expect that we will act only with due regard to the Town’s interest in the performance of
this audit, and the Town should not impose on us special confidence that we will conduct this
audit with only the Town’s interest in mind. Because of our obligation to be independent of
the Town, no fiduciary relationship will be created by this engagement or audit of the Town’s
financial statements.
The engagement will be led by April Adams, who will be responsible for assuring the overall
quality, value, and timeliness of the services provided to you.
AUDIT AND ATTESTATION SERVICES
The objective of our audit is the expression of opinions as to whether the Town’s basic
financial statements are fairly presented, in all material respects, in conformity with
accounting principles generally accepted in the United States of America (“U.S. GAAP”) and
to report on the fairness of the additional information referred to in the Summary of Services
section when considered in relation to the basic financial statements taken as a whole. The
objective also includes reporting on:
Internal control over financial reporting and compliance with the provisions of
applicable laws, regulations, contracts, and grant agreements, noncompliance with
which could have a material effect on the financial statements in accordance with
Government Auditing Standards.
Internal control related to major programs and an opinion (or disclaimer of opinion) on
compliance with laws, regulations, and the provisions of contracts or grant
agreements that could have a direct and material effect on each major program in
accordance with the Single Audit Act Amendments of 1996, 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 State Single Audit Implementation Act.
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
result of that testing, and not to provide an opinion on the effectiveness of the Town’s internal
control or on compliance, and (2) the report is an integral part of an audit performed in
Town of Hillsborough
April 3, 2020
Page 3
accordance with Government Auditing Standards in considering the Town’s internal control
and compliance. The Uniform Guidance report on internal control over compliance will
include a 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 requirements of the Uniform Guidance. Both reports
will state that the report is not suitable for any other purpose.
Our audit will be conducted in accordance with GAAS; and the standards for financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the
United States; the provisions of Uniform Guidance; the Single Audit Act Amendments of
1996; the State Single Audit Implementation Act; and OMB Guidance for Grants and
Agreements (2 CFR 200); and will include tests of accounting records, a determination of
major programs in accordance with Uniform Guidance, and other procedures as deemed
necessary to enable us to express such opinions. We will also issue written reports upon
completion of our Single Audit. We cannot provide assurance that an unmodified opinion will
be expressed. Circumstances may arise in which it is necessary for us to modify our opinion
or add emphasis-of-matter or other-matter paragraphs. If our opinion is other than
unmodified, we will discuss the reasons with you in advance. If, for any reason, we are
unable to complete the audit or are unable to form or have not formed an opinion, we may
decline to express opinions or issue reports, or may withdraw from this engagement.
NONATTEST ACCOUNTING AND OTHER SERVICES
In connection with any of the audit, accounting, or other services noted below, we will provide
a copy of all schedules or other support for you to maintain as part of your books and records
supporting your basic financial statements. You agree to take responsibility for all documents
provided by Cherry Bekaert and will retain copies based on your needs and document
retention policies. By providing these documents to you, you confirm that Cherry Bekaert is
not responsible for hosting your records or maintaining custody of your records or data and
that Cherry Bekaert is not providing business continuity or disaster recovery services. You
confirm you are responsible for maintaining internal controls over your books and records
including business continuity and disaster recovery alternatives. In addition, any documents
provided to Cherry Bekaert by the Town in connection with these services will be considered
to be copies and will not be retained by Cherry Bekaert after completion of the accounting
and other services. You are expected to retain anything you upload to a Cherry Bekaert
portal and are responsible for downloading and retaining anything we upload in a timely
manner. Portals are only meant as a method of transferring data, are not intended for the
storage of client information, and may be deleted at any time. You are expected to maintain
control over your accounting systems to include the licensing of applications and the hosting
of said applications and data. We do not provide electronic security or back-up services for
any of your data or records. Giving us access to your accounting system does not make us
hosts of information contained within.
The accounting and other services described in this section are nonaudit services, which do
not constitute audit services under Government Auditing Standards, and such services will
not be conducted in accordance with Government Auditing Standards. We will perform the
services in accordance with applicable professional standards. We, in our sole professional
judgment, reserve the right to refuse to perform any procedure or take any action that could
be construed as assuming Town’s management responsibilities.
Town of Hillsborough
April 3, 2020
Page 4
In conjunction with providing these accounting and other services, we may use third party
software or templates created by Cherry Bekaert for use on third party software.
Management expressly agrees that the Town has obtained no rights to use such software or
templates and that Cherry Bekaert’s use of the Town’s data in those applications is not
deemed to be hosting, maintaining custody, providing business continuity, or disaster
recovery services.
Data Collection Form
We will complete the appropriate sections of and sign the Data Collection Form that
summarizes our audit findings. We will provide copies of our reports to the Town; however, it
is management’s responsibility to submit the reporting package (including financial
statements, schedule of expenditures of federal and state awards, summary schedule of prior
audit findings, auditors’ reports, and corrective action plan) along with the Data Collection
Form to the designated federal audit clearinghouse and, if appropriate, to pass-through
entities. The Data Collection 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.
Town’s management responsibilities related to accounting and other services
For all nonattest services we perform in connection with the engagement, you are
responsible for designating a competent employee to oversee the services, make any
management decisions, perform any management functions related to the services, evaluate
the adequacy of the services, retain relevant copies supporting your books and records, and
accept overall responsibility for the results of the services.
Prior to the release of the report, the Town’s management will need to sign a representation
letter acknowledging its responsibility for the results of these services, and acknowledging
receipt of all appropriate copies.
TOWN’S MANAGEMENT RESPONSIBILITIES RELATED TO THE AUDIT
The Town’s management is responsible for (1) designing, implementing, and maintaining
effective internal controls, including internal controls over federal and state awards, 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 the Town’s management and financial information is
reliable and properly reported. The Town’s 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 and state awards, and all accompanying information in conformity
with U.S. GAAP; and for compliance with applicable laws and regulations (including federal
and state statutes) and the provisions of contracts and grant agreements (including award
agreements). 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.
The Town’s management is 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) access
Town of Hillsborough
April 3, 2020
Page 5
to personnel, accounts, books, records, supporting documentation, and other information as
needed to perform an audit under the Uniform Guidance; (3) additional information that we
may request for the purpose of the audit; and (4) unrestricted access to persons within the
Town from whom we determine it necessary to obtain audit evidence.
Your responsibilities include adjusting the financial statements to correct material
misstatements and for confirming to us in the written representation letter that the effects of
any uncorrected misstatements aggregated by us during the current engagement and
pertaining to the latest period presented are immaterial, both individually and in the
aggregate, to the financial statements taken as a whole.
You are responsible for the design and implementation of programs and controls to prevent
and detect fraud, and for informing us about all known or suspected fraud affecting the Town
involving (1) the Town’s management, (2) employees who have significant roles in internal
control, and (3) others where the fraud could have a material effect on the financial
statements. Your responsibilities include informing us of your knowledge of any allegations of
fraud or suspected fraud affecting the Town received in communications from employees,
former employees, grantors, regulators, or others. In addition, you are responsible for
identifying and ensuring that the Town complies with applicable laws, regulations, contracts,
agreements, and grants, and for taking timely and appropriate steps to remedy fraud and
noncompliance with provisions of laws, regulations, contracts, or grant agreements, or abuse
that we report. Additionally, as required by the Uniform Guidance, it is the Town’s
management’s responsibility to evaluate and monitor noncompliance with federal and
statutes, regulations, and the terms and conditions of federal and state awards; take prompt
action when instances of noncompliance are identified including noncompliance identified in
audit findings; promptly follow up and take corrective action on reported audit findings; and
prepare a summary schedule of prior audit findings and a separate corrective action plan.
The Town’s management is responsible for identifying all federal and state awards received
and understanding and complying with the compliance requirements and for the preparation
of the schedule of expenditures of federal and state awards (including notes and noncash
assistance received) in conformity with the Uniform Guidance. You agree to include our
report on the schedule of expenditures of federal and state awards in any document that
contains and indicates that we have reported on the schedule of expenditures of federal and
state awards. You also agree to include the audited financial statements with any
presentation of the schedule of expenditures of federal and state awards that includes our
report thereon OR make the audited financial statements readily available to intended users
of the schedule of expenditures of federal and state awards no later than the date the
schedule of expenditures of federal and state awards 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 schedule of expenditures of federal and state awards
in accordance with the Uniform Guidance; (2) you believe the schedule of expenditures of
federal and state awards, including its form and content, is stated fairly in accordance with
the Uniform Guidance; (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) the Town has disclosed to us any significant assumptions or interpretations
underlying the measurement or presentation of the schedule of expenditures of federal and
state awards.
You are responsible for the preparation of the supplementary information, which we have
been engaged to report on, in conformity with U.S. GAAP. 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
Town of Hillsborough
April 3, 2020
Page 6
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 U.S. GAAP; (2) you believe the supplementary information,
including its form and content, is fairly presented in accordance with U.S. 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.
The Town’s management is responsible for establishing and maintaining a process for
tracking the status of audit findings and recommendations. The Town’s 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 other studies. You are also
responsible for providing Town’s management views on our current findings, conclusions,
and recommendations, as well as your planned corrective actions, for the report, and for the
timing and format for providing that information.
The Town’s management agrees to assume all management responsibilities relating to the
financial statements, schedule of expenditures of federal and state awards, and related
notes, and any other nonaudit services we provide. You will be required to acknowledge in
the management representation letter our assistance with preparation of the financial
statements, schedule of expenditures of federal and state awards, and related notes, and that
you have reviewed and approved the financial statements, schedule of expenditures of
federal and state awards, and related notes prior to their issuance and have accepted
responsibility for them. Further, you agree to oversee the nonaudit 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.
MANAGEMENT REPRESENTATIONS
The Firm will rely on the Town’s management providing the above noted
representations to us, both in the planning and performance of the audit, and in
considering the fees that we will charge to perform the audit.
FEES
The estimated fee contemplates only the services described in the Summary of Services
section of this letter. If the Town’s management requests additional services not listed above,
we will provide an estimate of those fees prior to commencing additional work.
The following summarizes the fees for the services described above:
Description of Services Estimated Fee
Audit services
Audit of the financial statements $ 30,500
Audit of each single audit program, if applicable ($3,000)
Total $ 30,500
Town of Hillsborough
April 3, 2020
Page 7
The fees will be billed periodically. Invoices are due on presentation. A service charge will be
added to past due accounts equal to 1½% per month (18% annually) on the previous month’s
balance less payments received during the month, with a minimum charge of $2.00 per
month.
If the foregoing is in accordance with your understanding, please sign a copy of this letter in
the space provided and return it to us. If you have any questions, please call April Adams
at (919) 782-1040.
Sincerely,
CHERRY BEKAERT LLP
ATTACHMENT – Engagement Letter Terms and Conditions
TOWN OF HILLSBOROUGH
ACCEPTED BY: ____________________________________________________________
TITLE: ________________________________________ DATE: ___________________
Attachment – Page 1
Cherry Bekaert LLP
Engagement Letter Terms and Conditions
The following terms and conditions are an integral part of the attached engagement letter and
should be read in their entirety in conjunction with your review of the letter.
LIMITATIONS OF THE AUDIT REPORT
Should the Town wish to include or incorporate by reference these financial statements and
our report thereon into any other document at some future date, we will consider granting
permission to include our report into another such document at the time of the request.
However, we may be required by auditing standards generally accepted in the United States
of America (“GAAS”) to perform certain procedures before we can give our permission to
include our report in another document such as an annual report, private placement,
regulatory filing, official statement, offering of debt securities, etc. You agree that the Town
will not include or incorporate by reference these financial statements and our report thereon,
or our report into any other document without our prior written permission. In addition, to
avoid unnecessary delay or misunderstandings, it is important to provide us with timely notice
of your intention to issue any such document.
LIMITATIONS OF THE AUDIT PROCESS
In conducting the audit, we will perform tests of the accounting records and such other
procedures as we consider necessary in the circumstances to provide a reasonable basis for
our opinion on the financial statements. We also will assess the accounting principles used
and significant estimates made by the Town’s management, as well as evaluate the overall
financial statement presentation.
Our audit will include procedures designed to obtain reasonable assurance of detecting
misstatements due to errors or fraud that are material to the financial statements. Absolute
assurance is not attainable because of the nature of audit evidence and the characteristics of
fraud. For example, audits performed in accordance with GAAS are based on the concept of
selective testing of the data being examined and are, therefore, subject to the limitation that
material misstatements due to errors or fraud, if they exist, may not be detected. Also, an
audit is not designed to detect matters that are immaterial to the financial statements. In
addition, an audit conducted in accordance with GAAS does not include procedures
specifically designed to detect illegal acts having an indirect effect (e.g., violations of fraud
and abuse statutes that result in fines or penalties being imposed on the Town) on the
financial statements.
Similarly, in performing our audit we will be aware of the possibility that illegal acts may have
occurred. However, it should be recognized that our audit provides no assurance that illegal
acts generally will be detected, and only reasonable assurance that illegal acts having a
direct and material effect on the determination of financial statement amounts will be
detected. We will inform you with respect to errors and fraud or illegal acts that come to our
attention during the course of our audit unless clearly inconsequential. In the event that we
have to consult with the Town’s counsel or counsel of our choosing regarding any illegal acts
we identify, additional fees incurred may be billed to the Town. You agree that the Town will
cooperate fully with any procedures we deem necessary to perform with respect to these
matters.
Attachment – Page 2
We will issue a written report upon completion of our audit of the Town’s financial statements.
If, for any reason, we are unable to complete the audit, or are unable to form, or have not
formed, an opinion on the financial statements, we may decline to express an opinion or
decline to issue a report as a result of the engagement. We will notify the appropriate party
within your organization of our decision and discuss the reasons supporting our position.
AUDIT PROCEDURES – GENERAL
An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements; therefore, our audit will involve professional judgment
about the number of transactions to be examined and the areas to be tested. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness
of significant accounting estimates made by the Town’s management, as well as evaluating
the overall presentation of the financial statements. We will plan and perform the audit to
obtain reasonable rather than absolute assurance about whether the financial statements are
free of material misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3)
misappropriation of assets, or (4) violations of laws or governmental regulations that are
attributable to the Town or to acts by the Town’s management or employees acting on behalf
of the Town. Because the determination of abuse is subjective, Government Auditing
Standards do not expect auditors to provide reasonable assurance of detecting abuse.
Because of the inherent limitations of an audit, combined with the inherent limitations of
internal control, and because we will not perform a detailed examination of all transactions,
there is a risk that material misstatements or noncompliance may exist and not be detected
by us, even though the audit is properly planned and performed in accordance with GAAS
and Government Auditing Standards. In addition, an audit is not designed to detect
immaterial misstatements or violations of laws or governmental regulations that do not have a
direct and material effect on the financial statements or major programs. However, we will
inform the appropriate level of the Town’s management of any material errors and fraud or
illegal acts that come to our attention during the course of our audit. We will also inform you
of any violations of laws or governmental regulations that come to our attention, unless
clearly inconsequential. Our responsibility as auditor is limited to the period covered by our
audit and does not extend to any later periods for which we are not engaged as auditor.
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 and state awards; federal and state award programs; compliance with
laws, regulations, contracts, and grant agreements; and other responsibilities required by
GAAS.
AUDIT PROCEDURES – INTERNAL CONTROLS
Our audit will include obtaining an understanding of the Town and its environment, including
internal controls, sufficient to assess the risks of material misstatement of the financial
statements and to design the nature, timing, and extent of further audit procedures. Tests of
controls may be performed to test the effectiveness of certain controls that we consider
Attachment – Page 3
relevant to preventing and detecting errors and fraud that are material to the financial
statements and to preventing and detecting misstatements resulting from illegal acts and
other noncompliance matters that have a direct and material effect on the financial
statements. Our tests, if performed, will be less in scope than would be necessary to render
an opinion on internal control, including cybersecurity, 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 and the State Single Audit Implementation Act, 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 and the State Single Audit
Implementation Act.
An audit is not designed to provide assurance on internal control or to identify significant
deficiencies or material weaknesses. However, during the audit, we will communicate to the
Town’s management and those charged with governance internal control related matters that
are required to be communicated under American Institute of Certified Public Accountants
(“AICPA”) professional standards, Government Auditing Standards, and the Uniform
Guidance.
AUDIT PROCEDURES – COMPLIANCE
As part of obtaining reasonable assurance about whether the basic financial statements are
free of material misstatement, we will perform tests of the Town’s compliance with provisions
of applicable laws and regulations, contracts, and agreements, including grant agreements.
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.
The Uniform Guidance and the State Single Audit Implementation Act require that we also
plan and perform the audit to obtain reasonable assurance about whether the auditee has
complied with federal and state statutes, regulations, and the terms and conditions of federal
and state awards applicable to major programs. Our procedures will consist of tests of
transactions and other applicable procedures described in the OMB Compliance Supplement
for the types of compliance requirements that could have a direct and material effect on each
of the Town’s major programs. The purpose of these procedures will be to express an opinion
on the Town’s compliance with requirements applicable to each of its major programs in our
report on compliance issued pursuant to the Uniform Guidance and the State Single Audit
Implementation Act.
NONATTEST SERVICES (IF APPLICABLE)
All nonattest services to be provided in the attached engagement letter (if applicable) shall be
provided pursuant to the AICPA Code of Professional Conduct. The AICPA Code of
Professional Conduct requires that we establish objectives of the engagement and the
services to be performed, which are described under nonattest services in the attached letter.
Attachment – Page 4
You agree that the Town’s designated individual will assume all the Town’s management
responsibilities for the nonattest services we provide; oversee the services by designating an
individual, with suitable skill, knowledge, or experience; evaluate the adequacy and results of
the services; and accept responsibility for them. In order to ensure we provide such services
in compliance with all professional standards, the designated individual is responsible for:
Making all financial records and related information available to us.
Ensuring that all material information is disclosed to us.
Granting unrestricted access to persons within the Town from whom we determine it
necessary to obtain audit evidence.
Identifying and ensuring that such nonattest complies with the laws and regulations.
The accuracy and appropriateness of such nonattest services shall be limited by the
accuracy and sufficiency of the information provided by the Town’s designated individual. In
the course of providing such nonattest services, we may provide professional advice and
guidance based on knowledge of accounting, tax, and other compliance, and of the facts and
circumstances as provided by the Town’s designated individual. Such advice and guidance
shall be limited as permitted under the AICPA Code of Professional Conduct.
COMMUNICATIONS
At the conclusion of the audit engagement, we may provide the Town’s management and
those charged with governance a letter stating any significant deficiencies or material
weaknesses which may have been identified by us during the audit and our
recommendations designed to help the Town make improvements in its internal control
structure and operations related to the identified matters discovered in the financial statement
audit. As part of this engagement, we will ensure that certain additional matters are
communicated to the appropriate members of the Town. Such matters include (1) our
responsibility under GAAS; (2) the initial selection of and changes in significant accounting
policies and their application; (3) our independence with respect to the Town; (4) the process
used by Town’s management in formulating particularly sensitive accounting estimates and
the basis for our conclusion regarding the reasonableness of those estimates; (5) audit
adjustments, if any, that could, in our judgment, either individually or in the aggregate, be
significant to the financial statements or our report; (6) any disagreements with the Town’s
management concerning a financial accounting, reporting, or auditing matter that could be
significant to the financial statements; (7) our views about matters that were the subject of the
Town’s management’s consultation with other accountants about auditing and accounting
matters; (8) major issues that were discussed with the Town’s management in connection
with the retention of our services, including, among other matters, any discussions regarding
the application of accounting principles and auditing standards; and (9) serious difficulties
that we encountered in dealing with the Town’s management related to the performance of
the audit.
OTHER MATTERS
Access to working papers
The working papers and related documentation for the engagement are the property of the
Firm and constitute confidential information. We have a responsibility to retain the
documentation for a period of time to satisfy legal or regulatory requirements for records
retention. It is our policy to retain all workpapers and client information for seven years from
the date of issuance of the report. It is our policy to retain emails and attachments to emails
for a period of 12 months, except as required by any governmental regulation. Except as
Attachment – Page 5
discussed below, any requests for access to our working papers will be discussed with you
prior to making them available to requesting parties. Any parties seeking access to our
working papers must agree to sign our standard access letter.
We may be requested to make certain documentation available to regulators, governmental
agencies (e.g., SEC, PCAOB, HUD, DOL, etc.), or their representatives (“Regulators”)
pursuant to law or regulations. If requested, access to the documentation will be provided to
the Regulators. The Regulators may intend to distribute to others, including other
governmental agencies, our working papers and related documentation without our
knowledge or express permission. You hereby acknowledge and authorize us to allow
Regulators access to and copies of documentation as requested. In addition, our Firm, as
well as all other major accounting firms, participates in a “peer review” program covering our
audit and accounting practices as required by the AICPA. This program requires that once
every three years we subject our quality assurance practices to an examination by another
accounting firm. As part of the process, the other firm will review a sample of our work. It is
possible that the work we perform for the Town may be selected by the other firm for their
review. If it is, they are bound by professional standards to keep all information confidential. If
you object to having the work we do for you reviewed by our peer reviewer, please notify us
in writing.
Electronic transmittals
During the course of our engagement, we may need to electronically transmit confidential
information to each other, within the Firm, and to other entities engaged by either party.
Although email is an efficient way to communicate, it is not always a secure means of
communication and thus, confidentiality may be compromised. As an alternative, we
recommend using our Client Portal (“Portal”) to transmit documents. Portal allows the Town,
us, and other involved entities to upload and download documents in a secure location. You
agree to the use of email, Portal, and other electronic methods to transmit and receive
information, including confidential information, between the Firm, the Town, and other third
party providers utilized by either party in connection with the engagement.
Use of third party providers
In the normal course of business, we may on occasion use the services of an independent
contractor or a temporary or loaned employee, all of whom may be considered a third party
service provider. On these occasions, we remain responsible for the adequate oversight of all
services performed by the third party service provider and for ensuring that all services are
performed with professional competence and due professional care. We will adequately plan
and supervise the services provided by the third party service provider; obtain sufficient
relevant data to support the work product; and review compliance with technical standards
applicable to the professional services rendered. We will enter into a contractual agreement
with the third party service provider to maintain the confidentiality of information and be
reasonably assured that the third party service provider has appropriate procedures in place
to prevent the unauthorized release of confidential information to others.
Subpoenas
In the event we are requested or authorized by the Town, or required by government
regulation, subpoena, or other legal process to produce our working papers or our personnel
as witnesses with respect to our engagement for the Town, the Town will, so long as we are
not a party to the proceeding in which the information is sought, reimburse us for our
professional time and expense, as well as the fees and expenses of our counsel, incurred in
responding to such a request at standard billing rates.
Attachment – Page 6
Dispute resolution procedures
If any dispute, controversy, or claim arises in connection with the performance or breach of
this agreement, either party may, on written notice to the other party, request that the matter
be mediated. Such mediation would be conducted by a mediator acceptable to both parties.
Both parties would exert their best efforts to discuss with each other in good faith their
respective positions in an attempt to finally resolve such dispute, controversy, or claim.
Waiver of trial by jury
In the event the parties are unable to successfully mediate any dispute, controversy,
or claim, the parties agree to WAIVE TRIAL BY JURY and agree that the court will hear
any matter without a jury.
Independent contractor
Each party is an independent contractor with respect to the other and shall not be construed
as having a trustee, joint venture, agency, or fiduciary relationship.
No third party beneficiaries
The parties do not intend to benefit any third party by entering into this agreement, and
nothing contained in this agreement confers any right or benefit upon any person or entity
who or which is not a signatory of this agreement.
TERMS AND CONDITIONS SUPPORTING FEE
The estimated fees set forth in the attached engagement letter are based on anticipated full
cooperation from the Town’s personnel, timely delivery of requested audit schedules and
supporting information, timely communication of all significant accounting and financial
reporting matters, the assumption that unexpected circumstances will not be encountered
during the audit, as well as working space and clerical assistance as mutually agreed upon
and as is normal and reasonable in the circumstances. We strive to ensure that we have the
right professionals scheduled on each engagement. As a result, sudden Town requested
scheduling changes or scheduling changes necessitated by the agreed information not being
ready on the agreed-upon dates can result in expensive downtime for our professionals. Any
last minute schedule changes that result in downtime for our professionals could result in
additional fees. Our estimated fee does not include assistance in bookkeeping or other
accounting services not previously described. If, for any reason, the Town is unable to
provide such schedules, information, and assistance, the Firm and the Town will mutually
revise the fee to reflect additional services, if any, required of us to achieve these objectives.
The estimated fees contemplate that the Town will provide adequate documentation of its
systems and controls related to significant transaction cycles and audit areas.
In providing our services, we will consult with the Town with respect to matters of accounting,
financial reporting, or other significant business issues as permitted by professional
standards. Accordingly, time necessary to affect a reasonable amount of such consultation is
reflected in our fee. However, should a matter require research, consultation, or audit work
beyond that amount, the Firm and the Town will agree to an appropriate revision in our fee.
The estimated fees are based on auditing and accounting standards effective as of the date
of this engagement letter and known to apply to the Town at this time, but do not include any
time related to the application of new auditing or accounting standards that impact the Town
Attachment – Page 7
for the first time. If new auditing or accounting standards are issued subsequent to the date of
this letter and are effective for the period under audit, we will estimate the impact of any such
standard on the nature, timing, and extent of our planned audit procedures and will
communicate with the Town concerning the scope of the additional procedures and the
estimated fees.
The Town agrees to pay all costs of collection (including reasonable attorneys’ fees) that the
Firm may incur in connection with the collection of unpaid invoices. In the event of
nonpayment of any invoice rendered by us, we retain the right to (a) suspend the
performance of our services, (b) change the payment conditions under this engagement
letter, or (c) terminate our services. If we elect to suspend our services, such services will not
be resumed until your account is paid. If we elect to terminate our services for nonpayment,
the Town will be obligated to compensate us for all time expended and reimburse us for all
expenses through the date of termination.
This engagement letter sets forth the entire understanding between the Town and the Firm
regarding the services described herein and supersedes any previous proposals,
correspondence, and understandings whether written or oral. Any subsequent changes to the
terms of this letter, other than additional billings, will be rendered in writing and shall be
executed by both parties. Should any portion of this engagement letter be ruled invalid, it is
agreed that such invalidity will not affect any of the remaining portions.
CONTRACT TO AUDIT ACCOUNTS LGC-205 Rev. 9/2019
The
of
and
and
for
Primary Government Unit, together with DPCU (if applicable), hereinafter referred to as Governmental Unit(s)
Auditor Name
Auditor Address
Hereinafter referred to as Auditor
hereby agree as follows:
Must be within four months of FYE
1. The Auditor shall audit all statements and disclosures required by U.S. generally accepted auditing
standards (GAAS) and additional required legal statements and disclosures of all funds and/or divisions of the
Governmental Unit(s). The non-major combining, and individual fund statements and schedules shall be
subjected to the auditing procedures applied in the audit of the basic financial statements and an opinion shall
be rendered in relation to (as applicable) the governmental activities, the business- type activities, the
aggregate DPCUs, each major governmental and enterprise fund, and the aggregate remaining fund
information (non-major government and enterprise funds, the internal service fund type, and the fiduciary fund
types).
2. At a minimum, the Auditor shall conduct his/her audit and render his/her report in accordance with
GAAS. The Auditor shall perform the audit in accordance with Government Auditing Standards if required by
the State Single Audit Implementation Act, as codified in G.S. 159-34. If required by OMB Uniform
Administration Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance)
and the State Single Audit Implementation Act, the Auditor shall perform a Single Audit. This audit and all
associated audit documentation may be subject to review by Federal and State agencies in accordance with
Federal and State laws, including the staffs of the Office of State Auditor (OSA) and the Local Government
Commission (LGC). If the audit requires a federal single audit performed under the requirements found in
Subpart F of the Uniform Guidance (§200.501), it is recommended that the Auditor and Governmental Unit(s)
jointly agree, in advance of the execution of this contract, which party is responsible for submission of the audit
and the accompanying data collection form to the Federal Audit Clearinghouse as required under the Uniform
Guidance (§200.512).
If the audit and Auditor communication are found in this review to be substandard, the results of the review
may be forwarded to the North Carolina State Board of CPA Examiners (NC State Board).
Page 1
Governing Board
Primary Government Unit RUFKDUWHUKROGHU
Discretely Presented Component Unit (DPCU) (if applicable)
Fiscal Year Ending Audit Report Due Date
Board of Commissioners
Town of Hillsborough, North Carolina
N/A
Cherry Bekaert LLP
2626 Glenwood Avenue, Suite 200, Raleigh, North Carolina 27608
06/30/20 10/31/20
CONTRACT TO AUDIT ACCOUNTS LGC-205 Rev. 9/2019
If an entity is determined to be a component of another government as defined by the group audit
standards, the entity’s auditor shall make a good faith effort to comply in a timely manner with the requests of
the group auditor in accordance with AU-6 §600.41 - §600.42.
This contract contemplates an unmodified opinion being rendered. If during the process of conducting
the audit, the Auditor determines that it will not be possible to render an unmodified opinion on the financial
statements of the unit, the Auditor shall contact the LGC staff to discuss the circumstances leading to that
conclusion as soon as is practical and before the final report is issued. The audit shall include such tests of the
accounting records and such other auditing procedures as are considered by the Auditor to be necessary inthe
circumstances. Any limitations or restrictions in scope which would lead to a qualification should be fully
explained in an attachment to this contract.
If this audit engagement is subject to the standards for audit as defined in Government Auditing
Standards, 201 revision, issued by the Comptroller General of the United States, then by accepting this
engagement, the Auditor warrants that he/she has met the requirements for a peer review and continuing
education as specified in Government Auditing Standards. The Auditor agrees to provide a copy of the most
recent peer review report to the Governmental Unit(s) and the Secretary of the LGC prior to the execution of an
audit contract. Subsequent submissions of the report are required only upon report expiration or upon auditor’s
receipt of an updated peer review report. If the audit firm received a peer review rating other than pass, the
Auditor shall not contract with the Governmental Unit(s) without first contacting the Secretary of the LGC for a
peer review analysis that may result in additional contractual requirements.
If the audit engagement is not subject to Government Accounting Standards or if financial statements are not
prepared in accordance with U.S. generally accepted accounting principles (GAAP) and fail to include all
disclosures required by GAAP, the Auditor shall provide an explanation as to why in an attachment to this
contract or in an amendment.
6. It is agreed that time is of the essence in this contract. All audits are to be performed and the report of
audit submitted to LGC staff within four months of fiscal year end. If it becomes necessary to amend this due
date or the audit fee, an amended contract along with a written explanation of the delay shall be submitted to
the Secretary of the LGC for approval.
7. It is agreed that GAAS include a review of the Governmental Unit’s (Units’) systems of internal control
and accounting as same relate to accountability of funds and adherence to budget and law requirements
applicable thereto; that the Auditor shall make a written report, which may or may not be a part of the written
report of audit, to the Governing Board setting forth his/her findings, together with his recommendations for
improvement. That written report shall include all matters defined as “significant deficiencies and material
weaknesses” in AU-C 265 of the AICPA Professional Standards (Clarified). The Auditor shall file a copy of that
report with the Secretary of the LGC.
8. All local government and public authority contracts for audit or audit-related work require the approval
of the Secretary of the LGC. This includes annual or special audits, agreed upon procedures related to internal
controls, bookkeeping or other assistance necessary to prepare the Governmental Unit’s (Units’) records for
audit, financial statement preparation, any finance-related investigations, or any other audit- related work in the
State of North Carolina. Approval is not required on contracts and invoices for system improvements and
similar services of a non-auditing nature.
9. Invoices for services rendered under these contracts shall not be paid by the Governmental Unit(s)
until the invoice has been approved by the Secretary of the LGC. (This also includes any progress billings.)
[G.S. 159-34 and 115C-447] All invoices for Audit work shall be submitted in PDF format to the Secretary of
the LGC for approval. The invoice marked ‘approved ’with approval date shall be returned to
Page 2
CONTRACT TO AUDIT ACCOUNTS LGC-205 Rev. 9/2019
the Auditor to present to the Governmental Unit(s) for payment. This SDUDJUDSKis not applicable to
contracts for audits of hospitals.
10. In consideration of the satisfactory performance of the provisions of this contract, the Governmental
Unit(s) shall pay to the Auditor, upon approval by the Secretary of the LGC if required, the fee, which
includes any costs the Auditor may incur from work paper or peer reviews or any other quality assurance
program required by third parties (federal and state grantor and oversight agencies or other organizations)
as required under the Federal and State Single Audit Acts. This does not include fees for any pre-issuance
reviews that may be required by the NC Association of CPAs (NCACPA) Peer Review Committee or NC
State Board of CPA Examiners (see Item 13).
11. If the Governmental Unit(s) has/have outstanding revenue bonds, the Auditor shall submit to LGC staff,
either in the notes to the audited financial statements or as a separate report, a calculation demonstrating
compliance with the revenue bond rate covenant. Additionally, the Auditor shall submit to LGC staff
simultaneously with the Governmental Unit’s (Units’) audited financial statements any other bond compliance
statements or additional reports required by the authorizing bond documents, unless otherwise specified in the
bond documents.
12. After completing the audit, the Auditor shall submit to the Governing Board a written report of audit.
This report shall include, but not be limited to, the following information: (a) Management’s Discussion and
Analysis, (b) the financial statements and notes of the Governmental Unit(s) and all of its component units
prepared in accordance with GAAP, (c) supplementary information requested by the Governmental Unit(s) or
required for full disclosure under the law, and (d) the Auditor’s opinion on the material presented. The Auditor
shall furnish the required number of copies of the report of audit to the Governing Board upon completion.
13. If the audit firm is required by the NC State Board, the NCACPA Peer Review Committee, or the
Secretary of the LGC to have a pre-issuance review of its audit work, there shall be a statement in the
engagement letter indicating the pre-issuance review requirement. There also shall be a statement that the
Governmental Unit(s) shall not be billed for the pre-issuance review. The pre-issuance review shall be
performed prior to the completed audit being submitted to LGC Staff. The pre-issuance review report shall
accompany the audit report upon submission to LGC Staff.
14. The Auditor shall submit the report of audit in PDF format to LGC Staff. For audits of units other than
hospitals, the audit report should be submitted when (or prior to) submitting the final invoice for services
rendered. The report of audit, as filed with the Secretary of the LGC, becomes a matter of public record for
inspection, review and copy in the offices of the LGC by any interested parties. Any subsequent revisions to
these reports shall be sent to the Secretary of the LGC along with an Audit Report Reissued Form (available
on the Department of State Treasurer website). These audited financial statements, excluding the Auditors’
opinion, may be used in the preparation of official statements for debt offerings by municipal bond rating
services to fulfill secondary market disclosure requirements of the Securities and Exchange Commission and
for other lawful purposes of the Governmental Unit(s) without requiring consent of the Auditor. If the LGC Staff
determines that corrections need to be made to the Governmental Unit’s (Units’) financial statements, those
corrections shall be provided within three business days of notification unless another deadline is agreed to by
LGC staff.
15. Should circumstances disclosed by the audit call for a more detailed investigation by the Auditor than
necessary under ordinary circumstances, the Auditor shall inform the Governing Board in writing of the need
for such additional investigation and the additional compensation required therefore. Upon approval by the
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CONTRACT TO AUDIT ACCOUNTS LGC-205 Rev. 9/2019
Secretary of the LGC, this contract may be modified or amended to include the increased time, compensation,
or both as may be agreed upon by the Governing Board and the Auditor.
16. If an approved contract needs to be modified or amended for any reason, the change shall be made in
writing, on the Amended LGC-205 contract form and pre-audited if the change includes a change in audit fee
(pre-audit requirement does not apply to charter schools or hospitals). This amended contract shall be
completed in full, including a written explanation of the change, signed and dated by all original parties to the
contract. It shall then be submitted to the Secretary of the LGC for approval. No change to the audit contract
shall be effective unless approved by the Secretary of the LGC, the Governing Board, and the Auditor.
17. A copy of the engagement letter, issued by the Auditor and signed by both the Auditor and the
Governmental Unit(s), shall be attached to this contract, and except for fees, work, and terms not related to audit
services, shall be incorporated by reference as if fully set forth herein as part of this contract. In case of conflict
between the terms of the engagement letter and the terms of this contract, the terms of this contract shall take
precedence. Engagement letter terms that conflict with the contract are deemed to be void unless the conflicting
terms of this contract are specifically deleted in Item 28 of this contract. Engagement letters containing
indemnification clauses shall not be accepted by LGC Staff.
18. Special provisions should be limited. Please list any special provisions in an attachment.
19. A separate contract should not be made for each division to be audited or report to be submitted. If a
DPCU is subject to the audit requirements detailed in the Local Government Budget and Fiscal Control Act and
a separate audit report is issued, a separate audit contract is required. If a separate report is not to be issued
and the DPCU is included in the primary government audit, the DPCU shall be named along with the parent
government on this audit contract. DPCU Board approval date, signatures from the DPCU Board chairman and
finance officer also shall be included on this contract.
20. The contract shall be executed, pre-audited (pre-audit requirement does not apply to charter schools
or hospitals), and physically signed by all parties including Governmental Unit(s) and the Auditor, then
submitted in PDF format to the Secretary of the LGC.
21. The contract is not valid until it is approved by the Secretary of the LGC. The staff of the LGC shall notify
the Governmental Unit and Auditor of contract approval by email. The audit should not be started before the
contract is approved.
22. Retention of Client Records: Auditors are subject to the NC State Board of CPA Examiners’ Retention of
Client Records Rule 21 NCAC 08N .0305 as it relates to the provision of audit and other attest services, as well
as non-attest services. Clients and former clients should be familiar with the requirements of this rule prior to
requesting the return of records.
23. This contract may be terminated at any time by mutual consent and agreement of the Governmental
Unit(s) and the Auditor, provided that (a) the consent to terminate is in writing and signed by both parties, (b) the
parties have agreed on the fee amount which shall be paid to the Auditor (if applicable), and (c) no termination
shall be effective until approved in writing by the Secretary of the LGC.
24. The Governmental Unit’s (Units’) failure or forbearance to enforce, or waiver of, any right or an event of
breach or default on one occasion or instance shall not constitute the waiver of such right, breach or default on
any subsequent occasion or instance.
25. There are no other agreements between the parties hereto and no other agreements relative hereto that
shall be enforceable unless entered into in accordance with the procedure set out herein and approved by the
Secretary of the LGC.
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