HomeMy Public PortalAboutNowlen Agmt 00, 05, 06, 07, 08, 09, & 2010NH
&M
NOWLEN, HOLT & MINER, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
WEST PALM BEACH OFFICE
215 FIFTH STREET, SUITE 2D)
POST OFFICE BOX 347
WEST PALM BEACH. FLORIDA 33402L347
TELEPHONE (561) 659.3060
FAX (561) 835-0638
WWWNHMCPA.COM
August 3, 2010
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
100 Sea Road
Gulf Stream, FL 33483
EVERETT B. NOWLEN(IBTIBM), CPA
EDWARD HOLT, CPA
WI WAM B. MINER, CPA
ROBERT W. HENDRIX, JR., CPA
JANET R. BARICEVICH, CPA
XATHLEEN A. MINER, CPA
TERRY L. MORTON, JR., CPA
N. RONALD BENNETT CPA
J. MICHAEL STEVENS, CPA
ALEXIAG. VARGA, CPA
BRIAN J. BRESCIA. CFP'. CPA
141RA D. PETERSON, CPA
EDWARD T HOLT, JR., CPA
BELLE GLADE OFFICE
333 S.E. 2nd STREET
POST OFFICE BOX 338
BELLE GLADE, FLORIDA 334300338
TELEPHONE (561) 996.5612
FAX (661) 9968248
We are pleased to confirm our understanding of the services we are to provide the Town of Gulf Stream,
Florida for the year ended September 30, 2010. This letter updates our letter dated February 4, 2010 for
changes in terminology and revised wording required by professional standards.
We will audit the financial statements of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information, which collectively comprise the basic
financial statements, of the Town of Gulf Stream, Florida as of and for the year ended September 30,
2010. Accounting standards generally accepted in the United States provide for certain required
supplementary information (RSI), such as management's discussion and analysis (MD&A), to
supplement the Town of Gulf Stream, Florida's basic financial statements. Such information, although
not a part of the basic financial statements, is required by the Governmental Accounting Standards
Board who considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic, or historical context. As part of our engagement, we
will apply certain limited procedures to the Town of Gulf Stream, Florida's RSI in accordance with
auditing standards generally accepted in the United States of America. These limited procedures will
consist of inquiries of management regarding the methods of preparing the information and comparing
the information for consistency with management's responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements. We will
not express an opinion or provide any assurance on the information because the limited procedures do
not provide us with sufficient evidence to express an opinion or provide any assurance.. The following
RSI is required by generally accepted accounting principles and will be subjected to certain limited
procedures, but will not be audited:
1) Management's Discussion and Analysis.
2) Budgetary Comparison Schedule— General Fund
3) Schedule of Funding Progress —Other Post Employment Benefits
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL
Supplementary information other than RSI also accompanies the Town of Gulf Stream, Florida's
financial statements. We will subject the following supplementary information to the auditing
procedures applied in our audit of the financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records
used to prepare the financial statements or to the financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America
and will provide an opinion on it in relation to the financial statements as a whole:
1) Schedule of Expenditures of Federal Awards and State Financial Assistance, if applicable.
Audit Objectives
The objective of our audit is the expression of opinions as to whether your basic financial statements are
fairly presented, in all material respects, in conformity with U.S. generally accepted accounting
principles and to report on the fairness of the supplementary information referred to in the second
paragraph when considered in relation to the financial statements as a whole. The objective also includes
reporting on—
• Internal control related to the financial statements and compliance with laws, regulations, and the
provisions of contracts or 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 and OMB Circular A-133, Audits of States, Local Governments, and Non-
Profit Organizations, and Rules of the Auditor General Chapter 10.550.
The reports on internal control and compliance will each include a statement that the report is intended
solely for the information and use of management, the body or individuals charged with governance,
others within the entity specific legislative or regulatory bodies, federal awarding agencies, and if
applicable, pass-through entities and is not intended to be and should not be used by anyone other than
these specified parties.
Our audit will be conducted in accordance with auditing standards generally accepted in the United
States of America; the standards for financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States; the Single Audit Act Amendments of 1996; and
the provisions of OMB Circular A-133, and will include tests of accounting records, a determination of
major program(s) in accordance with OMB Circular A-133 and state projects in accordance with Rules
of the Auditor General Chapter 10.550, and other procedures we consider necessary to enable us to
express such opinions and to render the required reports. If our opinions on the financial statements or
the Single Audit compliance opinions are other than unqualified, we will fully 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 opinions, we may decline to express opinions or to issue a report as a result of this engagement.
Management Responsibilities
Management is responsible for the basic financial statements and all accompanying information as well
as all representations contained therein. Management is also responsible for identifying government
award programs and understanding and complying with the compliance requirements, and for
preparation of the schedule of expenditures of federal awards in accordance with the requirements of
2
OMB Circular A-133. As part of the audit, we will assist with preparation of your financial statements,
schedule of expenditures of federal awards, and related notes. You are responsible for making all
management decisions and performing all management functions relating to the financial statements,
schedule of expenditures of federal awards, and related notes and for accepting full responsibility for
such decisions. You will be required to acknowledge in the management representation letter our
assistance with preparation of the financial statements and the schedule of expenditures of federal
awards and that you have reviewed and approved the financial statements, schedule of expenditures of
federal awards, and related notes prior to their issuance and have accepted responsibility for them.
Further, you are required to designate an individual with suitable skill, knowledge, or experience to
oversee any nonaudit services we provide and for evaluating the adequacy and results of those services
and accepting responsibility for them.
Management is responsible for establishing and maintaining effective internal controls, including
internal controls over compliance, and for evaluating and monitoring ongoing activities, to help ensure
that appropriate goals and objectives are met and that there is reasonable assurance that government
programs are administered in compliance with compliance requirements. You are also responsible for
the selection and application of accounting principles; for the fair presentation in the financial statements
of the respective financial position of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information of the Town of Gulf Stream, Florida and the
respective changes in financial position and, where applicable, cash flows in conformity with U.S.
generally accepted accounting principles; and for compliance with applicable laws and regulations and
the provisions of contracts and grant agreements.
Management is also responsible for making all financial records and related information available to us
and for ensuring that management and financial information is reliable and properly recorded. Your
responsibilities also include identifying significant vendor relationships in which the vendor has
responsibility for program compliance and for the accuracy and completeness of that information. Your
responsibilities include adjusting the financial statements to correct material misstatements and
confirming to us in the 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 or illegal acts affecting the government
involving (1) management, (2) employees who have significant roles in internal control, and (3) others
where the fraud or illegal acts could have a material effect on the financial statements. Your
responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud
affecting the government received in communications from employees, former employees, grantors,
regulators, or others. In addition, you are responsible for identifying and ensuring that the entity
complies with applicable laws, regulations, contracts, agreements, and grants. Additionally, as required
by OMB Circular A-133, it is management's responsibility to follow up and take corrective action on
reported audit findings and to prepare a summary schedule of prior audit findings and a corrective action
plan. You are responsible for the preparation of the supplementary information in conformity with U.S.
generally accepted accounting principles.
Management is responsible for establishing and maintaining a process for tracking the status of audit
findings and recommendations. Management is also responsible for identifying for us 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
3
actions taken to address significant findings and recommendations resulting from those audits,
attestation engagements, performance audits, or studies. You are also responsible for providing
management's views on our current findings, conclusions, and recommendations, as well as your
planned corrective actions, for the report, and for the timing and format for providing that information.
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 judgment about the number of transactions to be
examined and the areas to be tested. 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 entity or to acts by management or
employees acting on behalf of the entity. Because the determination of abuse is subjective, Government
Auditing Standards do not expect auditors to provide reasonable assurance of detecting abuse.
Because an audit is designed to provide reasonable, but not absolute assurance 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. 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 you of any
material errors and any fraudulent financial reporting or misappropriation of assets that come to our
attention. We will also inform you of any violations of laws or governmental regulations that come to
our attention, unless clearly inconsequential, and of any material abuse that comes to our attention. We
will include such matters in the reports required for a Single Audit. Our responsibility as auditors is
limited to the period covered by our audit and does not extend to any later periods for which we are not
engaged as auditors.
Our procedures will include tests of documentary evidence supporting the transactions recorded in the
accounts, and may include tests of the physical existence of inventories, and direct confirmation of
receivables and certain other assets and liabilities by correspondence with selected individuals, funding
sources, creditors, and financial institutions. We will request written representations from your attorneys
as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our
audit, we will require certain written representations from you about the financial statements and related
matters.
Audit Procedures—Internal Controls
Our audit will include obtaining an understanding of the entity and its environment, including internal
control, sufficient to assess the risks of material misstatement of the financial statements and to design
the nature, timing, and extent of further audit procedures. Tests of controls may be performed to test the
effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud
that are material to the financial statements and to preventing and detecting misstatements resulting from
illegal acts and other noncompliance matters that have a direct and material effect on the financial
statements. Our tests, if performed, will be less in scope than would be necessary to render an opinion
on internal control and, accordingly, no opinion will be expressed in our report on internal control issued
pursuant to Government Auditing Standards.
n
As required by OMB Circular A-133 and Rules of the Auditor General Chapter 10.550, 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 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 OMB Circular A-133 and Rules of the
Auditor General Chapter 10.550..
An audit is not designed to provide assurance on internal control or to identify significant deficiencies.
However, during the audit, we will communicate to management and those charged with governance
internal control related matters that are required to be communicated under AICPA professional
standards, Government Auditing Standards, and OMB Circular A-133.
Audit Procedures—Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we will perform tests of the Town of Gulf Stream, Florida's compliance with applicable
laws and regulations and the provisions of 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.
OMB Circular A-133 requires that we also plan and perform the audit to obtain reasonable assurance.
about whether the auditee has complied with applicable laws and regulations and the provisions of
contracts and grant agreements applicable to major programs. Our procedures will consist of tests of
transactions and other applicable procedures described in the OMB Circular A-133 Compliance
Supplement and related addenda for the types of compliance requirements that could have a direct and
material effect on each of the Town of Gulf Stream, Florida's major programs. The purpose of these
procedures will be to express an opinion on the Town of Gulf Stream, Florida's compliance with
requirements applicable to each of its major programs in our report on compliance issued pursuant to
OMB Circular A-133.
Engagement Administration, Fees, and Other
We understand that your employees will prepare all cash, accounts receivable, or other confirmations we
request and will locate any documents selected by us for testing.
At the conclusion of the engagement, we will complete the appropriate sections of the Data Collection
Form that summarizes our audit findings. It is management's responsibility to submit the reporting
package (including financial statements, schedule of expenditures of federal awards, summary schedule
of prior audit findings, auditors' reports, and corrective action plan) along with the Data Collection
Form to the federal audit clearinghouse. We will coordinate with you the electronic submission and
certification. If applicable, we will provide copies of our report for you to include with the reporting
package you will submit to pass-through entities. 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, unless a longer period is agreed to in advance by the cognizant or oversight
agency for audits.
The audit documentation for this engagement is the property of Nowlen, Holt & Miner, P.A. and
constitutes confidential information. However, pursuant to authority given by law or regulation, we may
be requested to make certain audit documentation available to a regulatory agency or its designee, a
I
federal agency providing direct or indirect funding, or the U.S. Government Accountability Office for
purposes of a quality review of the audit, to resolve audit findings, or to carry out oversight
responsibilities. We will notify you of any such request. If requested, access to such audit documentation
will be provided under the supervision of Nowlen, Holt & Miner, P.A. personnel. Furthermore, upon
request, we may provide copies of selected audit documentation to the aforementioned parties. These
parties may intend, or decide, to distribute the copies or information contained therein to others,
including other governmental agencies.
The audit documentation for this engagement will be retained for a minimum of five years after the
report release or for any additional period requested by a federal awarding agency, state awarding
agency, or pass-through entity. If we are aware that a federal awarding agency, pass-through entity, or
auditee is contesting an audit finding, we will contact the party(ies) contesting the audit finding for
guidance prior to destroying the audit documentation.
Edward T. Holt is the engagement partner and is responsible for supervising the engagement and signing
the reports or authorizing another individual to sign them. Our fee for these services will be $15,050.
Our invoices for these fees will be rendered each month as work progresses and are payable on
presentation. In accordance with our firm policies, work may be suspended if your account becomes
overdue and may not be resumed until your account is paid in full. If we elect to terminate our services
for nonpayment, our engagement will be deemed to have been completed upon written notification of
termination, even if we have not completed our report(s). You will be obligated to compensate us for all
time expended and to reimburse us for all out-of-pocket costs through the date of termination. The above
fee is based on anticipated cooperation from your personnel and the assumption that unexpected
circumstances will not be encountered during the audit. If significant additional time is necessary, we
will discuss it with you and arrive at a new fee estimate before we incur the additional costs.
Government Auditing Standards require that we provide you with a copy of our most recent external
peer review report and any letter of comment, and any subsequent peer review reports and letters of
comment received during the period of the contract. Our 2009 peer review report accompanies this letter.
We appreciate the opportunity to be of service to the Town of Gulf Stream, Florida and believe this
letter accurately summarizes the significant terms of our engagement. If you have any questions, please
let us know.
Very truly yours,
Nowlen, Holt & Miner, P.A.
System Review Report
JPi fiSed public accountants
December 4, 2009
To the Shareholders of Nowlen, Holt & Miner, P.A.
and the Peer Review Committee of the Florida Institute of Certified Public Accountants
We have reviewed the system of quality control for the accounting and auditing practice of Nowlen,
Holt & Miner, P.A. (the firm) in effect for the year ended May 31, 2009. Our peer review was
conducted in accordance with the Standards for Performing and Reporting on Peer Reviews
established by the Peer Review Board of the American Institute of Certified Public Accountants. The
firm is responsible for designing a system of quality control and complying with it to provide the firm
with reasonable assurance of performing and reporting in conformity with applicable professional
standards in all material respects. Our responsibility is to express an opinion on the design of the
system of quality control and the firm's compliance therewith based on our review. The nature,
objectives, scope, limitations of, and the procedures performed in a System Review are described in
the standards at www.aicoa.org/prsummary/prsummary.
As required by the standards, engagements selected for review included engagements performed
under the Government Auditing Standards and audits of employee benefit plans.
In our opinion, the system of quality control for the accounting and auditing practice of Nowlen, Holt &
Miner, P.A. in effect for the year ended May 31, 2009, has been suitably designed and complied with to
provide the firm with reasonable assurance of performing and reporting in conformity with applicable
professional standards in all material respects. Firms can receive a rating of pass, pass with
deficiency(ies) or fail. Nowlen, Holt & Miner, P.A. has received a peer review rating of pass.
Johnson, Price & Sprinkle, PA
79 Woodfin Place, Suite 300 • Asheville, NC 28801 • 828.254.2374 • Fax 252.9994 • www.lpspa.com
A Member of the CPAmerica International Network
NH
&M
NOWLEN, HOLT & MINER, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
WEST PALM BEACH OFFICE
215 FIFTH STREET, SUITE 200
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 334020347
TELEPHONE (561) 659.7080
FAX (W) 835-0628
November 10, 2007
Town of Gulf Stream
C/O William Thrasher
Town Manager
100 Sea Road
Gulf Stream, Florida 33483
EVERETT B. NOWLEN o.,.N). CPA
EDWARD T HOLT. CPA
WIW AM B. MINER. CPA
ROBERT W. HENDRIK. JR., CPA
JANET R. BARICEVICH, CPA
KATHLEEN A. MINER. CPA
ROBERT W. HELMREICH. CPA
TERRY L MORTON. JR.. CPA
N. RONALD BENNETT CPA
J. MICHAEL STEVENS. CPA
DANIEL A. KIRCHMAN. CPA
ALEXIA O. VARGA, CPA
BRIAN J. BRESCIA. PFS. CPA
CONALO M RINZEL. CPA
BELLE GLADE OFFICE
333 S. E. 21ID STREET
POST OFFICE BOX 338
BELLE GLADE, FLORIDA 33430-0338
TELEPHONE (561) 9966612
FAX (581) 9966248
We are pleased to confirm our understanding of the services we are to provide the Town of Gulf
Stream, Florida for the year ended September 30, 2007. This letter updates our letter for year
ended September 30, 2005, for changes in terminology and revised wording required by
professional standards.
We will audit the financial statements of the governmental activities, business -type activities,
each major fund, and the aggregate remaining fund information, which collectively comprise the
basic financial statements, of the Town of Gulf Stream, Florida as of and for the year ended
September 30, 2007. Accounting standards generally accepted in the United States provide for
certain required supplementary information (RSI), such as management's discussion and analysis
(MD&A), to accompany the Town of Gulf Stream, Florida's basic financial statements. As part
of our engagement, we will apply certain limited procedures to the Town of Gulf Stream,
Florida's RSI. These limited procedures will consist principally of inquiries of management
regarding the methods of measurement and presentation, which management is responsible for
affirming to us in its representation letter. Unless we encounter problems with the presentation of
the RSI or with procedures relating to it, we will disclaim an opinion on it. The following RSI is
required by generally accepted accounting principles and will be subjected to certain limited
procedures, but will not be audited:
1. Management's discussion and analysis.
2. Required supplemental information other than MD&A
Audit Objectives
The objective of our audit is the expression of opinions as to whether your basic financial
statements are fairly presented, in all material respects, in conformity with U.S. generally
accepted accounting principles and to report on the fairness of the additional information referred
to in the first paragraph when considered in relation to the basic financial statements taken as a
whole. The objective also includes reporting on—
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS -FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS•CPAMERICA INTERNATIONAL
" I n t e r n a l c o n t r o l r e l a t e d t o t h e f i n a n c i a l s t a t e m e n t s a n d c o m p l i a n c e w i t h l a w s ,
r e g u l a t i o n s , a n d t h e p r o v i s i o n s o f c o n t r a c t s o r g r a n t a g r e e m e n t s , n o n c o m p l i a n c e
w i t h w h i c h c o u l d h a v e a m a t e r i a l e f f e c t o n t h e f i n a n c i a l s t a t e m e n t s i n a c c o r d a n c e
w i t h G o v e r n m e n t A u d i t i n g S t a n d a r d s .
" I n t e r n a l c o n t r o l r e l a t e d t o m a j o r p r o g r a m s a n d a n o p i n i o n ( o r d i s c l a i m e r o f
o p i n i o n ) o n c o m p l i a n c e w i t h l a w s , r e g u l a t i o n s , a n d t h e p r o v i s i o n s o f c o n t r a c t s o r
g r a n t a g r e e m e n t s t h a t c o u l d h a v e a d i r e c t a n d m a t e r i a l e f f e c t o n e a c h m a j o r
p r o g r a m i n a c c o r d a n c e w i t h t h e S i n g l e A u d i t A c t A m e n d m e n t s o f 1 9 9 6 a n d O M B
C i r c u l a r A - 1 3 3 , A u d i t s o f S t a t e s , L o c a l G o v e r n m e n t s , a n d N o n - P r o f i t
O r g a n i z a t i o n s .
T h e r e p o r t s o n i n t e r n a l c o n t r o l a n d c o m p l i a n c e w i l l e a c h i n c l u d e a s t a t e m e n t t h a t t h e r e p o r t i s
i n t e n d e d s o l e l y f o r t h e i n f o r m a t i o n a n d u s e o f m a n a g e m e n t , t h e b o d y o r i n d i v i d u a l s c h a r g e d w i t h
g o v e r n a n c e , o t h e r s w i t h i n t h e e n t i t y , s p e c i f i c l e g i s l a t i v e o r r e g u l a t o r y b o d i e s , f e d e r a l a w a r d i n g
a g e n c i e s , a n d i f a p p l i c a b l e , p a s s - t h r o u g h e n t i t i e s a n d i s n o t i n t e n d e d t o b e a n d s h o u l d n o t b e u s e d
b y a n y o n e o t h e r t h a n t h e s e s p e c i f i e d p a r t i e s .
O u r a u d i t w i l l b e c o n d u c t e d i n a c c o r d a n c e w i t h U . S . g e n e r a l l y a c c e p t e d a u d i t i n g s t a n d a r d s ; t h e
s t a n d a r d s f o r f i n a n c i a l a u d i t s c o n t a i n e d i n G o v e r n m e n t A u d i t i n g S t a n d a r d s , i s s u e d b y t h e
C o m p t r o l l e r G e n e r a l o f t h e U n i t e d S t a t e s ; t h e S i n g l e A u d i t A c t A m e n d m e n t s o f 1 9 9 6 ; a n d t h e
p r o v i s i o n s o f O M B C i r c u l a r A - 1 3 3 , a n d w i l l i n c l u d e t e s t s o f a c c o u n t i n g r e c o r d s , a d e t e r m i n a t i o n
o f m a j o r p r o g r a m ( s ) i n a c c o r d a n c e w i t h O M B C i r c u l a r A - 1 3 3 , a n d o t h e r p r o c e d u r e s w e c o n s i d e r
n e c e s s a r y t o e n a b l e u s t o e x p r e s s s u c h o p i n i o n a n d t o r e n d e r t h e r e q u i r e d r e p o r t s . I f o u r o p i n i o n s
o n t h e f i n a n c i a l s t a t e m e n t s o r t h e S i n g l e A u d i t c o m p l i a n c e o p i n i o n s a r e o t h e r t h a n u n q u a l i f i e d ,
w e w i l l f u l l y d i s c u s s t h e r e a s o n s w i t h y o u i n a d v a n c e . I f , f o r a n y r e a s o n , w e a r e u n a b l e t o
c o m p l e t e t h e a u d i t o r a r e u n a b l e t o f o r m o r h a v e n o t f o r m e d o p i n i o n s , w e m a y d e c l i n e t o e x p r e s s
o p i n i o n s o r t o i s s u e a r e p o r t a s a r e s u l t o f t h i s e n g a g e m e n t .
M a n a g e m e n t R e s p o n s i b i l i t i e s
M a n a g e m e n t i s r e s p o n s i b l e f o r e s t a b l i s h i n g a n d m a i n t a i n i n g i n t e r n a l c o n t r o l s , i n c l u d i n g
m o n i t o r i n g o n g o i n g a c t i v i t i e s ; f o r t h e s e l e c t i o n a n d a p p l i c a t i o n o f a c c o u n t i n g p r i n c i p l e s ; f o r t h e
f a i r p r e s e n t a t i o n i n t h e f i n a n c i a l s t a t e m e n t s o f t h e r e s p e c t i v e f i n a n c i a l p o s i t i o n o f t h e
g o v e r n m e n t a l a c t i v i t i e s , e a c h m a j o r f u n d , a n d t h e a g g r e g a t e r e m a i n i n g f u n d i n f o r m a t i o n o f t h e
T o w n o f G u l f S t r e a m , F l o r i d a a n d t h e r e s p e c t i v e c h a n g e s i n f i n a n c i a l p o s i t i o n i n c o n f o r m i t y w i t h
U . S . g e n e r a l l y a c c e p t e d a c c o u n t i n g p r i n c i p l e s ; a n d f o r f e d e r a l a w a r d p r o g r a m c o m p l i a n c e w i t h
a p p l i c a b l e l a w s a n d r e g u l a t i o n s a n d t h e p r o v i s i o n s o f c o n t r a c t s a n d g r a n t a g r e e m e n t s .
M a n a g e m e n t i s r e s p o n s i b l e f o r t h e b a s i c f i n a n c i a l s t a t e m e n t s a n d a l l a c c o m p a n y i n g i n f o r m a t i o n
a s w e l l a s a l l r e p r e s e n t a t i o n s c o n t a i n e d t h e r e i n .
A s p a r t o f t h e a u d i t , w e w i l l p r e p a r e a d r a f t o f y o u r f i n a n c i a l s t a t e m e n t s , s c h e d u l e o f
e x p e n d i t u r e s o f f e d e r a l a w a r d s , a n d r e l a t e d n o t e s . Y o u a r e r e s p o n s i b l e f o r m a k i n g a n y d e c i s i o n s
t h a t i n v o l v e m a n a g e m e n t f u n c t i o n s r e l a t i n g t o t h e f i n a n c i a l s t a t e m e n t s , s c h e d u l e o f e x p e n d i t u r e s
o f f e d e r a l a w a r d s , a n d r e l a t e d n o t e s a n d f o r a c c e p t i n g f u l l r e s p o n s i b i l i t y f o r s u c h d e c i s i o n s . Y o u
w i l l b e r e q u i r e d t o a c k n o w l e d g e i n t h e m a n a g e m e n t r e p r e s e n t a t i o n l e t t e r t h a t y o u h a v e r e v i e w e d
a n d a p p r o v e d t h e f i n a n c i a l s t a t e m e n t s , s c h e d u l e o f e x p e n d i t u r e s o f f e d e r a l a w a r d s , a n d r e l a t e d
n o t e s p r i o r t o t h e i r i s s u a n c e a n d h a v e a c c e p t e d r e s p o n s i b i l i t y f o r t h e m . F u r t h e r , y o u a r e r e q u i r e d
to designate an individual with suitable skill, knowledge, or experience to oversee any nonaudit
services we provide and for evaluating the adequacy and results of those services and accepting
responsibility for them.
Management is responsible for making all financial records and related information available to
us, including identifying significant vendor relationships in which the vendor has responsibility
for program compliance and for the accuracy and completeness of that information.
Management's responsibilities include adjusting the financial statements to correct material
misstatements and for confirming to us in the 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 or illegal acts affecting the
government involving (1) management, (2) employees who have significant roles in internal
control, and (3) others where the fraud or illegal acts could have a material effect on the financial
statements. Your responsibilities include informing us of your knowledge of any allegations of
fraud or suspected fraud affecting the government received in communications from employees,
former employees, grantors, regulators, or others. In addition, you are responsible for identifying
and ensuring that the entity complies with applicable laws, regulations, contracts, agreements,
and grants. Additionally, as required by OMB Circular A-133, it is management's responsibility
to follow up and take corrective action on reported audit findings and to prepare a summary
schedule of prior audit findings and a corrective action plan.
Management is responsible for establishing and maintaining a process for tracking the status of
audit findings and recommendations. Management is also responsible for identifying for us
previous audits or other engagements or 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 or other
engagements or studies. You are also responsible for providing management's views on our
current findings, conclusions, and recommendations, as well as your planned corrective actions.
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 judgment about the number of
transactions to be examined and the areas to be tested. 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 entity or to acts by management or employees acting on behalf of the entity.
Because the determination of abuse is subjective, Government Auditing Standards do not expect
auditors to provide reasonable assurance of detecting abuse.
Because an audit is designed to provide reasonable, but not absolute assurance 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. 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 you of any material errors and any fraudulent financial reporting or
misappropriation of assets that come to our attention. We will also inform you of any violations
of laws or governmental regulations that come to our attention, unless clearly inconsequential.
We will include such matters in the reports required for a Single Audit. Our responsibility as
auditors is limited to the period covered by our audit and does not extend to any later periods for
which we are not engaged as auditors.
Our procedures will include tests of documentary evidence supporting the transactions recorded
in the accounts, and may include tests of the physical existence of inventories, and direct
confirmation of receivables and certain other assets and liabilities by correspondence with
selected individuals, funding sources, creditors, and financial institutions. We will request
written representations from your attorneys as part of the engagement, and they may bill you for
responding to this inquiry. At the conclusion of our audit, we will require certain written
representations from you about the financial statements and related matters.
Audit Procedures—Internal Controls
Our audit will include obtaining an understanding of internal control sufficient to plan the audit
and to determine the nature, timing, and extent of audit procedures to be performed. Our audit
will include obtaining an understanding of internal control sufficient to plan the audit and to
determine the nature, timing, and extent of audit procedures to be performed. Tests of controls
may be performed to test the effectiveness of certain controls that we consider 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 and,
accordingly, no opinion will be expressed in our report on internal control issued pursuant to
Government Auditing Standards.
As required by OMB Circular A-133, 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 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 OMB Circular A-133.
An audit is not designed to provide assurance on internal control or to identify significant
deficiencies. However, during the audit, we will communicate to management and those charged
with governance internal control related matters that are required to be communicated under
AICPA professional standards, Government Auditing Standards, and OMB Circular A-133.
Audit Procedures—Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of
material misstatement, we will perform tests of the Town of Gulf Stream, Florida's compliance
with applicable laws and regulations and the provisions of 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.
OMB Circular A-133 requires that we also plan and perform the audit to obtain reasonable
assurance about whether the auditee has complied with applicable laws and regulations and the
provisions of contracts and grant agreements applicable to major programs. Our procedures will
consist of tests of transactions and other applicable procedures described in the OMB Circular A-
133 Compliance Supplement for the types of compliance requirements that could have a direct
and material effect on each of the Town of Gulf Stream, Florida's major programs. The purpose
of these procedures will be to express an opinion on the Town of Gulf Stream, Florida's
compliance with requirements applicable to each of its major programs in our report on
compliance issued pursuant to OMB Circular A-133.
Audit Administration, Fees, and Other
If applicable, at the conclusion of the engagement, 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 of Gulf Stream, Florida; however, it is management's responsibility to
submit the reporting package (including financial statements, schedule of expenditures of federal
awards, summary schedule of prior audit findings, auditors' reports, and corrective action plan)
along with the Data Collection Form to the designated federal 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, unless a longer period is agreed to in advance by the cognizant or oversight
agency for audits. At the conclusion of the engagement, we will provide information to
management as to where the reporting packages should be submitted and the number to submit.
The audit documentation for this engagement is the property of Nowlen, Holt & Miner, P.A. and
constitutes confidential information. However, pursuant to authority given by law or regulation,
we may be requested to make certain audit documentation available to U.S. Department of
Homeland Security or its designee, a federal agency providing direct or indirect funding, or the
U.S. Governmental Accountability Office for purposes of a quality review of the audit, to resolve
audit findings, or to carry out oversight responsibilities. We will notify you of any such request.
If requested, access to such audit documentation will be provided under the supervision of
Nowlen, Holt & Miner, P.A. personnel. Furthermore, upon request, we may provide copies of
selected audit documentation to the aforementioned parties. These parties may intend, or decide,
to distribute the copies or information contained therein to others, including other governmental
agencies.
The audit documentation for this engagement will be retained for a minimum of five years after
the report release or for any additional period requested by the U.S. Department of Homeland
Security. If we are aware that a federal awarding agency, pass-through entity, or auditee is
contesting an audit finding, we will contact the party contesting the audit finding for guidance
prior to destroying the audit documentation.
Our fee for these services will be $13,850 for the year 2007. This engagement may be extended
at the option of the Town of Gulf Stream, Florida for an additional three-year period, at an
increased fee of $400 per year. Our invoices for these fees will be rendered each month as work
progresses and are payable on presentation. In accordance with our firm policies, work may be
suspended if your account overdue and may not be resumed until your account is paid in full. If
we elect to terminate our services for nonpayment, our engagement will be deemed to have been
completed upon written notification of termination, even if we have not completed our report(s).
You will be obligated to compensate us for all time expended and to reimburse us for all out-of-
pocket costs through the date of termination. The above fee is based on anticipated cooperation
from your personnel and the assumption that unexpected circumstances will not be encountered
during the audit. If significant additional time is necessary, we will discuss it with you and arrive
at a new fee estimate before we incur the additional costs.
You may request that we perform additional services not contemplated by this engagement letter.
If this occurs, we will communicate with you regarding the scope of the additional services and
the fees for additional services will be in accordance with the attached schedule. We also may
issue a separate engagement letter covering the additional services. In the absence of any other
written communication from us documenting such additional services, our services will continue
to be governed by the terms of this engagement letter.
Should suit be brought concerning the quality or timeliness of our performance of services in this
engagement, it is agreed that the party who prevails shall be entitled to recovery of the attorney
fees.
Government Auditing Standards require that we provide you with a copy of our most recent
external peer review report and any letter of comment, and any subsequent peer review reports
and letters of comment received during the period of the contract. Our 2006 peer review report
accompanies this letter.
We appreciate the opportunity to be of service to the Town of Gulf Stream, Florida and believe
this letter accurately summarizes the significant terms of our engagement. If you have any
questions, please let us know.
Sincerely,
Aar 14,
Nowlen, Holt & Miner, P.A.
January 5, 2007
To the Shareholders
Nowlen, Holt & Miner, P.A.
iii
///
DIXONwl
HUGHES n
Ceffad Puolic Accountanu' and Adnan a
We have reviewed the system of quality control for the accounting and auditing practice of Nowlen,
Holt & Miner, P.A.(the firm) in effect for the year ended May 31, 2006. A system of quality control
encompasses the firm's organizational structure, the policies adopted and procedures established to
provide it with reasonable assurance of conforming with professional standards. The elements of
quality control are described in the Statements on Quality Control Standards issued by the American
Institute of CPAs (AICPA). The firm is responsible for designing a system of quality control and
complying with it to provide the firm reasonable assurance of conforming with professional
standards in all material respects. Our responsibility is to express an opinion on the design of the
system of quality control and the firm's compliance with its system of quality control based on our
review.
Our review was conducted in accordance with standards established by the Peer Review Board of
the AICPA. During our review, we read required representations from the firm, interviewed firm
personnel and obtained an understanding of the nature of the firm's accounting and auditing practice,
and the design of the firm's system of quality control sufficient to assess the risks implicit in its
practice. Based on our assessments, we selected engagements and administrative files to test for
conformity with professional standards and compliance with the firm's system of quality control.
The engagements selected represented a reasonable cross-section of the firm's accounting and
auditing practice with emphasis on higher -risk engagements. The engagements selected included
among others, audits of Employee Benefit Plans and engagements performed under Government
Auditing Standards. Prior to concluding the review, we reassessed the adequacy of the scope of the
peer review procedures and met with firm management to discuss the results of our review. We
believe that the procedures we performed provide a reasonable basis for our opinion.
In performing our review, we obtained an understanding of the system of quality control for the
firm's accounting and auditing practice. In addition, we tested compliance with the firm's quality
control policies and procedures to the extent we considered appropriate. These tests covered the
application of the firm's policies and procedures on selected engagements. Our review was based on
selected tests therefore it would not necessarily detect all weaknesses in the system of quality control
or all instances of noncompliance with it. There are inherent limitations in the effectiveness of any
system of quality control and therefore noncompliance with the system of quality control may occur
and not be detected. Projection of any evaluation of a system of quality control to future periods is
subject to the risk that the system of quality control may become inadequate because of changes in
conditions, or because the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the system of quality control for the accounting and auditing practice of Nowlen,
Holt & Miner, P.A. in effect for the year ended May 31, 2006, has been designed to meet the
requirements of the quality control standards for an accounting and auditing practice established by
the AICPA and was complied with during the year then ended to provide the firm with reasonable
assurance of conforming with professional standards.
�w.J �jCt.9i:r✓ ALL <
133 East First North Street
Suite 9
Summerville, SC 29483
Ph 843,937.9710 Fx.843.875.4919
mw dixon-hughestom
MW�iTAMm11MwM,nO
a+mgezo+v i•omepl
rm,.. � va +aqa� h rieia.
N- H NOWLEN, HOLT & MINER, P.A.
L CERTIFIED PUBLIC ACCOUNTANTS EVEnEI-rs NowLE RDT HOU. CM
IN UJAM aT. NIXT. CM
WILLWM B MINER, CM
- WEST PALM BEACH OFFICE ROBERT W. HENDRIX. JR., CM
215 FIFTH STREET, SUITE 200 JANET R. BARCE H. CM
POST OFFICE BOX 347 MARK a E 1H .. PFS. CM
WEST PALM BEACH, FLORIDA 33402.0347
TELEPHONE (561) 659-3060 KA R. ORREENA.MINER.CM
EOOM SMITH. CPA
FAX (561) 835.0826 ROBERT W. HELMRECH, LPA
TERM L. MORTON. JR.. LM
N. RONUD ETT. CM
J MILIUEL STW STEVEN. LM
RICHAR 6-..N HEN.LM
RICHARD M. .OMEN. CM
CAMELA.KIC LM
HENRIA CM
ALEXMIA G.LO.10 ..AMROA, CPA
.LAMES W.CIA. P N, CM
BRIAN 1 BRESCU, F9, CM
BELLE GLADE OFFICE
May 20, 2005 333 S. E. 2nd STREET
POST OFFICE BOX 336
BELLE GLADE, FLORIDA 33430-OMS
TELEPHONE (661) 996-5612
Mayor and Commissioners FAX (561) 996-6240
Town of Gulf Stream
100 Sea Road
Gulf Steam, Florida 33483
Mayor and Commissioners:
We are pleased to confirm our understanding of the services we are to provide the Town of Gulf Stream
for the years ended September 30, 2005, 2006, and 2007, with an option to extend the contract for the
years ended 2008, 2009, and 2010. We will audit the financial statements of the governmental activities,
the business -type activities, each major fund, and the aggregate remaining fund information, which
collectively comprise the basic financial statements of the Town of Gulf Stream as of and for the years
then ended. Also, the document we submit to you will include the following additional information that will
be subjected to the auditing procedures applied in our audit of the financial statements:
1. Management's discussion and analysis.
2. Budgetary Comparison Schedules
Audit Objectives
At the outset, it is imperative that we state the scope of your responsibilities in connection with this
engagement. It is your responsibility to provide an internal control structure, which includes a control
environment, an accounting system and control procedures, which will assist in the preparation of
financial statements which are fairly presented, in all material respects, in conformity with U. S. generally
accepted accounting principles. Financial statements which are produced thereby are your financial
statements, not ours. Our objective is to audit them in accordance with professional standards. Even
though we may prepare them, or assist in preparing them, they are inherently your financial statements
since they are based on your transactions. We are not a party to those transactions. We only audit a
sample of them and the balances created by them.
The objective of our audit is the expression of an opinion as to whether your financial statements are fairly
presented, in all material respects, in conformity with U.S. generally accepted accounting principles and
to report on the fairness of the additional information referred to in the first paragraph when considered in
relation to the financial statements taken as a whole. Our audit will be conducted in accordance with U.S.
generally accepted auditing standards and the standards for financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States, and will include tests of the
accounting records of the Town of Gulf Stream and other procedures we consider necessary to enable us
to express such an opinion. If our opinion on the financial statements is other than unqualified, we will
fully discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL
Town of Gulf Stream, Florida
May 20, 2005
Page 2
are unable to form or have not formed an opinion, we may decline to express an opinion or to issue a
report as a result of this engagement.
We will also provide a report (that does not include an opinion) on internal control related to the financial
statements and compliance with laws, regulations, and the provisions of contracts or grant agreements,
noncompliance with which could have a material effect on the financial statements as required by
Government Auditing Standards. This report will include a statement that the report is intended solely for
the information and use of the audit committee, management, and specific legislative or regulatory bodies
and is not intended to be and should not be used by anyone other than these specified parties.
Management Responsibilities
Management is responsible for establishing and maintaining internal control and for compliance with laws,
regulations, contracts, and agreements. In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of the controls. The
objectives of internal control are to provide management with reasonable, but not absolute, assurance
that assets are safeguarded against loss from unauthorized use or disposition, that transactions are
executed in accordance with management's authorizations and recorded properly to permit the
preparation of financial statements in accordance with generally accepted accounting principles.
Management is responsible for making all financial records and related information available to us. We
understand that you will provide us with such information required for our audit and that you are
responsible for the accuracy and completeness of that information. We will advise you about appropriate
accounting principles and their application and will advise you in the preparation of your financial
statements, but the responsibility for the financial statements remains with you. As part of our
engagement, we may propose standard, adjusting, or correcting journal entries to your financial
statements. You are responsible for reviewing the entries and understanding the nature of any proposed
entries and the impact they have on the financial statements. That responsibility includes the
establishment and maintenance of adequate records and effective internal control over financial reporting,
the selection and application of accounting principles, and the safeguarding of assets. Management is
responsible for adjusting the financial statements to correct material misstatements and for confirming to
us in the 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.
Also as part of the audit we will prepare a draft of your financial statements and related notes. In
accordance with Governmental Auditing Standards, you will be required to review and approve those
financial statements prior to their issuance and have a responsibility to be in a position in fact and
appearance to make an informed judgment on those financial statements. Further you are required to
designate a qualified management -level individual to be responsible and accountable for overseeing our
services.
You are responsible for the design and implementation of programs and controls to prevent and detect
fraud, and for informing us about all known or suspected fraud affecting the government involving (a)
management, (b) employees who have significant roles in internal control, and (c) others where the fraud
could have a material effect on the financial statements. You are also responsible for informing us of your
knowledge of any allegations of fraud or suspected fraud affecting the government received in
communications from employees, former employees, grantors, regulators, or others. In addition, you are
responsible for identifying and ensuring that the entity complies with applicable laws and regulations.
Town of Gulf Stream, Florida
May 20, 2005
Page 3
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 judgment about the number of transactions to be
examined and the areas to be tested. 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 errors, fraudulent financial reporting, misappropriation of assets, or violations of laws or
governmental regulations that are attributable to the entity or to acts by management or employees acting
on behalf of the entity. Because an audit is designed to provide reasonable, but not absolute assurance
and because we will not perform a detailed examination of all transactions, there is a risk that material
misstatements may exist and not be detected by us. 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. However, we will inform you of any material errors that come
to our attention, and we will inform you of any fraudulent financial reporting or misappropriation of assets
that comes to our attention. We will also inform you of any violations of laws or governmental regulations
that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the
period covered by our audit and does not extend to matters that might arise during any later periods for
which we are not engaged as auditors.
Our procedures will include tests of documentary evidence supporting the transactions recorded in the
accounts, and may include tests of the physical existence of inventories, and direct confirmation of
receivables and certain other assets and liabilities by correspondence with selected individuals, 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
also require certain written representations from you about the financial statements and related matters.
The discovery, subsequent to the date of our auditor's report, that one or more errors, irregularities or
illegal acts causing the financial statements to contain one or more material misstatements, have
occurred does not necessarily mean that our audit was not conducted in accordance with U. S. generally
accepted auditing standards. We as auditors assume neither client dishonesty nor unquestioned client
honesty.
Since the financial statements are your financial statements, the representations (i.e., the words and
numbers) in them are your representations. We audit the significant assertions which are implicit in those
representations. For example, inventories in the financial statements are stated at a certain amount and
are described in a certain manner, perhaps accompanied by additional language in the notes to the
financial statements. That is your representation about the inventories. Implicit in that representation are
some assertions made by you. You are asserting that the inventories exist, that they are valued in
accordance with U. S. generally accepted accounting principles, that any liabilities associated with them
are included in the financial statements, that all the inventories are included and that the words
associated with the number make the disclosures conform with U. S. generally accepted accounting
principles. For further example, sales are stated at a certain amount. You are asserting that that amount
includes sales which occurred and that the amount includes all the sales for the period.
We audit those assertions considered to be significant, i.e., material. We are not required by the
standards to audit those considered insignificant, although we may do so selectively. We are required by
the standards to assess the inherent and internal control structure risks related to the significant
assertions in determining the nature, extent and timing of our audit tests. For example, in testing whether
your assertion that the inventory exists, we customarily observe your taking of that inventory and test
count a small sample of it to verify the correctness of your existence assertion. It goes without staying that
the higher these risks are, the more extensive will our testing will be, and therefore the higher your cost.
Town of Gulf Stream, Florida
May 20, 2005
Page 4
We will keep you informed about our judgements as to which significant assertions, if any, require
significant audit testing beyond what is generally customary.
The assessment of overall audit risk and the inherent and internal control structure risks related to
significant assertions are a mater of professional judgment. We will be conservative in assessing those
risks, and we will exercise due professional care in judging them. You should be aware of the fact that
assessing risks is not an exact science. Therefore, it is not inconceivable that others might reach different
conclusions. This does not mean, however, that we have necessarily been wrong in judging those risks.
Identifying and ensuring that the Town of Gulf Stream complies with laws, regulations, contracts, and
agreements is the responsibility of management. As part of obtaining reasonable assurance about
whether the financial statements are free of material misstatement, we will perform tests of the Town of
Gulf Stream's compliance with applicable laws and regulations and the provisions of contracts and
agreements. However, the objective of our audit will not be to provide an opinion on overall compliance
and we will not express such an opinion.
Audit Procedures—Internal Controls
In planning and performing our audit, we will consider the internal control sufficient to plan the audit in
order to determine the nature, timing, and extent of our auditing procedures for the purpose of expressing
our opinion on the Town of Gulf Stream's financial statements.
We will obtain an understanding of the design of the relevant controls and whether they have been placed
in operation, and we will assess control risk. Tests of controls may be performed to test the effectiveness
of certain controls that we consider 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. Tests of
controls are required only if control risk is assessed below the maximum level. Our tests, if performed, will
be less in scope than would be necessary to render an opinion on internal control and, accordingly, no
opinion will be expressed in our report on internal control issued pursuant to Government Auditing
Standards.
An audit is not designed to provide assurance on internal control or to identify reportable conditions.
However, we will inform the governing body or audit committee of any matters involving internal control
and its operation that we consider to be reportable conditions under standards established by the
American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our
attention relating to significant deficiencies in the design or operation of the internal control that, In our
judgment, could adversely affect the entity's ability to record, process, summarize, and report financial
data consistent with the assertions of management in the financial statements. We will also inform you of
any nonreportable conditions or other matters involving internal control, if any, as required by
Government Auditing Standards.
Audit Administration, Fees, and Other
We understand that your employees will prepare all cash or other confirmations we request and will
locate any invoices selected by us for testing.
The audit documentation for this engagement Is the property of Nowlen, Holt & Miner P.A. and constitutes
confidential information. However, pursuant to authority given by law or regulation, we may be requested
to make certain audit documentation available to a Cognizant or Oversight Agency or its designee, a
federal agency providing direct or indirect funding, or the U.S. General Accounting Office for purposes of
a quality review of the audit, to resolve audit findings, or to carry out oversight responsibilities. We will
Town of Gulf Stream, Florida
May 20, 2005
Page 5
notify you of any such request. If requested, access to such audit documentation will be provided under
the supervision of Nowlen, Holt & Miner, P.A. personnel. Furthermore, upon request, we may provide
copies of selected audit documentation to the aforementioned parties. These parties may intend, or
decide, to distribute the copies or information contained therein to others, including other governmental
agencies.
Our fees for these services will be $13,050 for the year 2005, $13,450 for the year 2006, $13,850 for the
year 2007 and will be billed as the work progresses, and all invoices will be due and payable upon
presentation. This engagement may be extended at the option of the Town of Gulf Stream, Florida for an
additional three-year period, at an increased fee of $400 per year. Interest will be charged at the rate of
1.25% per month, for an annual percentage rate of 15%, on all past due accounts. The above fee is
based on anticipated cooperation from your personnel and the assumption that unexpected
circumstances will not be encountered during the audit. If significant additional time is necessary, we will
discuss it with you and arrive at a new fee before we incur the additional costs.
You may request that we perform additional services not contemplated by this engagement letter. If this
occurs, we will communicate with you regarding the scope of the additional services and the estimated
fees. We also may issue a separate engagement letter covering the additional services. In the absence of
any other written communication from us documenting such additional services, our services will continue
to be governed by the terms of this engagement letter.
Government Auditing Standards require that we provide you with a copy of our most recent external peer
review report and any letter of comment, and any subsequent peer review reports and letters of comment
received during the period of the contract. Our 2003 peer review report accompanies this letter.
We appreciate the opportunity to be of service to the Town of Gulf Stream and believe this letter
accurately summarizes the significant terms of our engagement. If you have any questions, please let us
know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed
copy and return it to us.
Very truly yours,
Nowlen, Holt & Miner, P.A.
RESPONSE:
This lett r or ec f s for h ders andi of the Town of Gulf Stream.
By:
Title: M 40
Date:
nA
1 AMERICA
lk�l N T E R N A T I O N A L
A leading network of independent CPA firms
September 30, 2003
To the Shareholders
Nowlen, Holt & Miner, P.A.
We have reviewed the system of quality control for the accounting and auditing practice of
Nowlen, Holt & Miner, P.A. (the firm) in effect for the year ended May 31, 2003. A system of
quality control encompasses the firm's organizational structure and the policies adopted and
procedures established to provide it with reasonable assurance of conforming with professional
standards. The elements of quality control are described in the Statements on Quality Control
Standards issued by the American Institute of Certified Public Accountants (AICPA). The
design of the system and compliance with it are the responsibility of the firm. Our responsibility
is to express an opinion on the design of the system, and the firm's compliance with the system
based on our review.
Our review was conducted in accordance with standards established by the Peer Review Board
of the AICPA. In performing our review, we obtained an understanding of the system of quality
control for the firm's accounting and auditing practice. In addition, we tested compliance with
the firm's quality control policies and procedures to the extent we considered appropriate. These
tests covered the application of the firm's policies and procedures on selected engagements.
Because our review was based on selective tests, it would not necessarily disclose all weaknesses
in the system of quality control or all instances of lack of compliance with it.
Because there are inherent limitations in the effectiveness of any system of quality control,
departures from the system may occur and not be detected. Also, projection of any evaluation of
a system of quality control to future periods is subject to the risk that the system of quality
control may become inadequate because of changes in conditions, or because the degree of
compliance with the policies or procedures may deteriorate.
In our opinion, the system of quality control for the accounting and auditing practice of Nowlen,
Holt & Miner, P.A. in effect for the year ended May 31, 2003, has been designed to meet the
requirements of the quality control standards for an accounting and auditing practice established
by the AICPA and was complied with during the year then ended to provide the firm with
reasonable assurance of conforming with professional standards.
11801 Research Dr.
Alachua, FL 32615
Michael E. Wilson
Team Captain
Ph: (386) 418-4001 Fax:(386)418-4002 A fjpryath
E-mail: cpamerin@cpamerim.org w .cpamerica.org Strategic Alliance
NOWLEN, HOLT & MINER, P.A.
CER71MM PUBLIC ACCOUNTANTS
WEST PALM BEACH OFFICE
215 FIFTH MEET, SUITE EGG
POST OFFICE BOX 347
WEST PAW BEACH, FLORIDA 334024347
TELEPHONE (681) 659.3080
FAX (661) 835-0628
August 12, 2000
Mayor and Commissioners
Town of Gulf Stream
100 Sea Road
Gulf Steam, Florida 33483
Mayor and Commissioners:
EVERE TB.NDWLENP�INAI,CPA
EOVARD T. HOLT. CPA
W6MAM M MRJER. CFA
ROBERTW.HEN Mifl.,CM
JMET0.BAAICEVIGH. CPA
MAPJt 3 ELHEDW, PFB, CPA
HAIHLEENA.MMR, M
R GREGORY SMR DPA
ROBERTW. NEDAREICH, CM
TMYL WRTDN.JR, CM
NROMLGBEM S,,CFA
J.MIOA'RUSSELL
WA
DAMELK E. PDeBEL4 CPA
R IRA.MBOLNEN,CPA
DANI MME.CIIMAN.0%
OAVXI E. BAKER.CM
BELLE GLIDE OFFICE
373 S. E. 2nD STREET
POSTOFFICE BOX 33B
BELLE GLADE, FLORIDA 334300338
TELEPHONE (561) 9965812
FAX(WI)9968248
We are pleased to confirm our understanding of the services we are to provide the Town of Gulf
Stream, Florida for the years ended September 30, 2000, 2001, and 2002. We will audit the
general purpose financial statements of Town of Gulf Stream, Florida as of and for years ended
September 30, 2000, 2001, and 2002. This engagement maybe extended at the option the Town
of Gulf Stream, Florida for an additional three-year period.
Audit Objectives
The objective of our. audit is the expression of an opinion as to whether your general purpose
financial statements are fairly presented, in all material respects, in conformity with generally
accepted accounting principles. Our audit will be conducted in accordance with generally
accepted auditing standards and the standards for financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States, and will include
tests of the accounting records of Town of Gulf Stream, Florida and other procedures we
consider necessary to enable us to express such an opinion. If our opinion on the general
purpose financial statements is other than unqualified, we will fully 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 an opinion or to issue a report as a result of
this engagement
We will also provide reports (that do not include opinions) on internal control related to the
financial statements and compliance with laws, regulations, and the provisions or grant
agreements, noncompliance with which could have a material effect on the financial statements
as required by Government Auditing Standards.
AMERICAN INSTITUTE OFCERTFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBUC ACCOUNTANTS •ACCOUNTING FIRMS ASSOCIATED INC.
Town of Gulf Stream, Florida
August 12, 2000
Page 2
Management Responsibilities
Management is responsible for establishing and maintaining internal control and for compliance
with laws, regulations, contracts, and agreements. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related costs of the
controls. The objectives of internal control are to provide management with reasonable, but not
absolute, assurance'that assets are safeguarded against loss from unauthorized use or disposition,
that transactions are executed in accordance with management's authorizations and recorded
properly to permit the preparation of general purpose financial statements in accordance with
generally accepted accounting principles.
Management is responsible for making all financial records and related information available to
us. We understand that you will provide us with such information required for our audit and that
you are responsible for the accuracy and completeness of that information. We will advise you
about appropriate accounting principles and their application and will assist in the preparation. of
your financial statements, but the responsibility for the financial statements remains with you.
That responsibility includes the establishment and maintenance of adequate records and effective
internal control over financial reporting, the selection and application of accounting principles,
and the safeguarding of assets. Management is responsible for adjusting the financial statements
to correct material misstatements and for confirming to us in the 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 general purpose financial statements taken as a whole.
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 judgment about the number of
transactions to be examined and the areas to be tested. 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 caused by error or fraud. Because an audit is designed to
provide reasonable, but not absolute assurance and because we will not perform a detailed
examination of all transactions, there is a risk that a material misstatement may exist and not be
detected by us. In addition, an audit is not designed to detect immaterial errors, fraud, or other
illegal acts or illegal acts that do not have a direct effect on the- general purpose financial
statements. However, we will inform you of any material errors and any fraud that comes to our
attention. We will also inform you of any other illegal acts that come to our attention, unless
clearly inconsequential. Our responsibility as auditors is limited to the period 'covered by our
audit and does not extend to matters that might arise during any later periods for which we are
not engaged as'auditors.
Town of Gulf Stream, Florida
August 12, 2000
Page 3
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, 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 also require certain written representations from
you about the financial statements and related matters.
Identifying and ensuring that Town of Gulf Stream, Florida complies with laws, regulations,
contracts, and agreements is the responsibility of management. As part of obtaining reasonable
assurance about whether the general purpose financial statements are free of material
misstatement, we will perform tests of Town of Gulf Stream, Florida's compliance with
applicable laws and regulations and the provisions of 'contracts and agreements. However, the
objective of our audit will not be to provide an opinion on overall. compliance and we will not
express such an opinion.
Audit Procedures—Internal Controls
In planning and performing our audit, we will consider the internal control sufficient to plan the
audit in order to determine the nature, timing, and extent of our auditing procedures for the
purpose of expressing our opinion on Town of Gulf Stream, Florida's general purpose financial
statements.
We will obtain an understanding of the design of the relevant controls and whether they have
been placed in operation, and we will assess control risk. Tests of controls may be performed to
test the effectiveness of certain controls that we consider relevant to preventing and detecting
errors and fraud that are material to the general purpose 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 general purpose financial statements. (Tests of controls
are required only if control risk is assessed below the maximum level.) Our tests, if performed,
will be less in scope than would be necessary to render an opinion on internal control and,
accordingly, no opinion will be expressed.
An audit is not designed to provide assurance on internal control or to identify reportable
conditions. However, we will inform the governing body or audit committee of any matters
involving internal control and its operation that we consider to be reportable conditions under
standards established by the American Institute of Certified Public Accountants, Reportable
conditions involve matters coming to our attention relating to significant deficiencies in the
design or operation of the internal control that, in our judgment,could adversely affect the
entity's ability to record, process, summarize, and report financial data consistent with the
assertions of management in the general purpose financial statements.
Town of Gulf Stream, Florida
August 12, 2000
Page 4
Audit Administration, Fees, and Other
The workpapers for this engagement are the property of Nowlen, Holt & Miner, P.A. and
constitute confidential information. However, we may be requested to make certain workpapers
available to grantors pursuant to authority given to them by law or regulation.. If requested,
access to such workpapers will be provided under the supervision of Nowlen, Holt & Miner,
P.A. personnel. Furthermore, upon request, we may provide photocopies of selected workpapers
to grantors. These grantors may intend, or decide, to distribute the photocopies or information
contained therein to others, including other governmental agencies.
Our fees for these services will be $11,105 for the year 2000, $11;450 for the year 2001, $11,850
for the year. 2Q02 and will be billed as the work progresses, and all invoices will be due and
payable upon presentation. This engagement may be extended at the option of the Town of Gulf
Stream, Florida for anadditional three-year period at an increased fee o $400 per Interest
will be charged at the rate of 1.25% per month, for an annual percentage rate of 15%, on all past
due accounts. The above fee is based on anticipated cooperation from your personnel and the
assumption that. unexpected circumstances will not be encountered during the audit. If
significant additional time is necessary, we will discuss it with you and arrive at a new fee before
we incur the additional costs.
The above fees include providing twelve copies of the general purpose financial statements and
the report required by the 1999 Rules of the Auditor General chapter 10.600. Special audits,
accounting and consulting services or any other special services as may be required or requested
from time to time will be billed separately
The above fees also include assistance in the implementation of GASB Statement Number 34 for
the fiscal year ending September 30, 2004. Our estimated procedures in assisting in the
transition would be as follows:
• During the performance of the September 30, 2002, audit we would inform the
Town of any changes that would be required to implement GASB 34.
• In June or July of the September 30, 2003, audit, we would review the Town's
accounting and reporting system for any problems that would affect the full
implementation for the fiscal year starting October 1, 2003. We would also assist
the Town in generating the required Management Discussion and Analysis and any
other comparative information that will be required for the September 30, 2004
audit report.
• Based upon the above procedures, we do not anticipate any implementation
problems with the September 30, 2004, audit and the report should be completed on
the same time schedule as prior audits
9
Town of Gulf Stream, Florida
August 12, 2000
Page 5
Government Auditing Standards require that we provide you with a copy of our most recent
quality control review report. Our 1997 peer review report accompanies this letter.
We appreciate the opportunity to be of service to Town of Gulf Stream, Florida and believe this
letter accurately summarizes the significant terms of our engagement. If you have any questions,
please let us know. This letter will continue in effect until canceled by either party.
Very truly yours,
Aalevwcd�1-114z�
Nowlen, Holt & Miner, P.A.
Accepted by the Town of Gulf Stream:
WilliamW,;;-�4 --F. Koch, Jr., Mayor
Date of Town Commission approval:
September 17, 1997
To the Shareholders
Nowlen; Holt & Miner, P. A.
We have reviewed the system of quality control for the accounting and auditing practice of
Nowlen, Holt & Miner, P.A. (the firm) in effect for the year ended May 31, 1997. Our review
was conducted in. conformity with standards established by the Peer Review Board of the
American Institute of Certified Public* Accountants (AICPA). We tested compliance with the
firm's quality control policies and procedures to the extent we considered appropriate. These
tests included a review of selected accounting and auditing engagements.
In performing our review, we have given consideration to the quality control standards issued by
the AICPA. Those standards indicate that a firm's system of quality control should be
appropriately comprehensive and suitably designed in relation to the firm's size, organizational
structure, operating policies, and the nature of its practice. They state that variance in individual
performance can affect the degree of compliance with a fern's quality control system and,
therefore, recognize that there may not be adherence to all policies and procedures in every case.
In our opinion, the system of quality.control for the accounting and auditing practice of Nowlen,
Holt & Miner, P.A. in effect for the year ended May 31, 1997, met the objectives of quality
control standards established by the AICPA, and was being complied with during the.year then
ended to provide the firm with reasonable assurance of conforming with professional standards
in the conduct of that practice.
Nowlen, Holt & Miner, P.A. is a member of the private companies practice section of the AICPA
Division for CPA Firms (the section) and has agreed to comply with the membership
requirements of the section. In connection with our review, we tested the firm's compliance with
those requirements to the extent we considered appropriate. In our opinion, the firm was in
conformity with the membership requirements of the section during the.year ended May 31,
1997, in all material spec s.
Mic ae] B. Jones
Te Captain
2811 NW 41ST STREET/ BUILDING C e GAINESVILLE, FLORIDA 32AD6 s PHONE 352-375-2324 s FAX 352-375-4187